EXHIBIT 10.1

WHEREAS, the Employee Retirement Income Security Act of 1974 ("ERISA") establishes maximum limitations on benefits and contributions for retirement plans which meet the requirements of Section 401(a) of the Internal Revenue Code of 1986, as amended ("Code"); WHEREAS, Ashland Inc. ("Ashland" or the "Company") maintains certain pension plans which are subject to the aforesaid limitations on benefits and contributions;
WHEREAS, Ashland adopted the Ashland Oil, Inc. Nonqualified Pension Plan as of September 24, 1975 (which is now called the Ashland Inc. Nonqualified Excess Benefit Pension Plan, otherwise referred to as the "Plan"), for the purpose of providing benefits for certain employees in excess of the aforesaid limitations;
WHEREAS, the Plan was amended and completely restated as of July 21, 1977;
WHEREAS, the Plan was amended and completely restated as of October 1, 1982;
WHEREAS, the Plan was amended and completely restated as of November 3, 1988;
WHEREAS, the Plan was amended and completely restated as of September 19, 1996;
WHEREAS, Ashland has retained the authority to make additional amendments to or terminate the Plan;
WHEREAS, Ashland desires to further amend and restate the Plan and, as so amended, to continue the Plan in full force and effect; NOW, THEREFORE, effective July 1, 2003, Ashland does hereby further amend and restate the Plan in accordance with the following terms and conditions:
1. Designation and Purpose of Plan. The Plan is designated the "Ashland Inc. Nonqualified Excess Benefit Pension Plan" ("Plan"). The purpose of the Plan is to provide benefits for certain employees in excess of the limitations on contributions, benefits, and compensation imposed by Sections 415 and 401(a)(17) of the Code (including successor provisions thereto) on the plans to which those Sections apply. The portion of the Plan providing benefits in excess of the Section 415 limits is an "excess benefit plan" as that term is defined in Section 3(36) of ERISA. It is intended that the portion, if any, of the Plan which is not an excess benefit plan shall be maintained primarily for a select group of management or highly compensated employees.

2. Eligibility. Subject to Section 11, the Plan shall apply to those employees -
(i) who have retired as an early, normal, or deferred normal retiree under the provisions of the Ashland Inc. and Affiliates Pension Plan ("Ashland Pension Plan"), as it may be amended, from time to time, or under provisions of any other retirement plan, as such other plan may be amended from time to time, which, from time to time, is specifically designated by Ashland for purposes of eligibility and benefits under the Plan (all such plans are hereinafter referred to jointly and severally as "Affected Plans"); and
(ii) who have not been terminated from employment due to Cause. Cause shall mean the willful and continuous failure of an employee to substantially perform his or her duties to Ashland (other than any such failure resulting from incapacity due to physical or mental illness), or the willful engaging by an employee in gross misconduct materially and demonstrably injurious to Ashland, each to be determined by Ashland in its sole discretion.

Notwithstanding anything to the contrary contained herein, any employee who would be entitled to participate in this Plan, but who is not a member of a select group of management or a highly compensated employee, shall be entitled to a benefit amount payable under the Plan based solely on the limitations on benefits imposed under Section 415 of the Code.
3. Benefit Amount.
(i) Computation if not Eligible for Retirement Growth Account. The computation described in this paragraph (i) applies to retirees that are not eligible for the Retirement Growth Account in the Ashland Inc. and Affiliates Pension Plan. At any particular time, the benefit payable to a retiree eligible to participate in this Plan pursuant to the provisions in
Section 2 shall be computed by subtracting from (A) the sum of (B) and (C) where - (A) shall be the single life annuity that would be payable at age 62 to such retiree under the Affected Plans -
(1) with the benefit so payable thereunder calculated by disregarding any salary deferrals that may have been made by such retiree under the Ashland Inc. Deferred Compensation Plan and thereby restoring any salary that may have been so deferred to such retiree's compensation for purposes of the Affected Plans, and
(2) prior to any reductions made because of the limits imposed by Sections 415 and 401(a)(17) of the Code;

provided that the single life annuity that would be so payable under the Ashland Pension Plan shall be computed without applying any offset attributable to the Ashland Inc. Leveraged Employee Stock Ownership Plan ("LESOP"), and such single life annuity shall be actuarially adjusted to be equivalent to a single life annuity payable at the particular time applicable based upon the applicable actuarial assumptions and other relevant provisions used for the same in the Affected Plans; (B) shall be the single life annuity that would be payable at age 62 to such retiree under the Affected Plans after reducing the amount so payable for the limits imposed by Sections 415 and 401(a)(17) of the Code, provided that such single life annuity that would be so payable under the Ashland Pension Plan shall be computed after first applying the offset attributable to the Offset Account (as that term is defined under the LESOP) in the LESOP, and each such single life annuity shall be actuarially adjusted to be equivalent to a single life annuity payable at the particular time applicable based upon the applicable actuarial assumptions and other relevant provisions used for the same in the Affected Plans; and
(C) shall be the single life annuity that would be actuarially equivalent to such retiree's nonforfeitable portion of the Offset Account under the LESOP as of the valuation date thereunder coincident with or next preceding such retiree's termination of employment using the actuarial assumptions prescribed for this purpose in the Ashland Pension Plan.
(ii) Computation if Eligible for Retirement Growth Account. The computation described in this paragraph (ii) applies to retirees that are eligible for the Retirement Growth Account in the Ashland Pension Plan. At any particular time, the benefit payable to a retiree eligible to participate in this Plan pursuant to the provisions in Section 2 shall be computed by subtracting from (A) the sum of (B) and (C) where - (A) shall be the balance of the Retirement Growth Account added to the actuarially equivalent lump sum of any single life annuity that would be payable at age 62 to such retiree under the Affected Plans (other than the Ashland Pension Plan) based upon the applicable actuarial assumptions and other relevant provisions used for the same in the Affected Plans -
(1) with the benefit so payable thereunder calculated by disregarding any salary deferrals that may have been made by such retiree under the Ashland Inc. Deferred Compensation Plan and thereby restoring any salary that may have been so deferred to such retiree's compensation for purposes of the Affected Plans, and

(A) the date six months prior to the first day of the month following such retiree's termination from employment; or (B) the December 31 immediately preceding the first day of the month following such retiree's termination from employment. Such election under sub-paragraph (B) of paragraph (ii) of this Section 4 shall be made in the manner prescribed by Ashland, from time to time, and shall be irrevocable as of the applicable time identified under (A) or (B) of this paragraph (i) of Section 4. Until the time at which such election becomes irrevocable, an eligible retiree shall be able to change it.
(ii) Optional Forms of Payment. (A) Lump Sum Option. Notwithstanding any provisions of
Section 3(i) to the contrary, a retiree in an eligible class may elect to receive all of the benefit under Section 3 as a lump sum distribution. A lump sum benefit payment of a benefit under Section 3(i) shall be computed on the basis of the actuarially equivalent present value of such retiree's benefit under Section 3(i) of the Plan payable at the particular time applicable based upon such actuarial assumptions (including the interest rate) as determined from time to time by the Personnel and Compensation Committee of Ashland's Board of Directors (Committee). The normal form of payment for a benefit under Section 3(ii) shall be a single lump sum. (B) Lump Sum Deferral Option. A retiree who is eligible to receive a lump sum distribution under sub-paragraph (A) of this paragraph
(ii) of Section 4 and who was part of a select group of management or a highly compensated employee, shall be able to elect to defer all or a portion of the receipt of the elected lump sum (in increments of such percentage or such amount as may be prescribed by Ashland or its delegatee, from time to time), by having the obligation to distribute such amount transferred to the Ashland Inc. Deferred Compensation Plan to be held thereunder in a notional account and paid pursuant to the applicable provisions of such Plan, as they may be amended from time to time; provided, however, that the election to defer such distribution shall be made at the time and in the manner prescribed in paragraph (i) of this
Section 4.
(C) Single Life Annuity. A retiree eligible under Section 2 for the benefit under Section 3 may elect to have such benefit paid in the form of equal monthly payments for and during such retiree's life, with such payments ending at such retiree's death. Before such

election becomes irrevocable as provided under paragraph (i) of Section 4, the retiree may change the option elected, subject to the applicable limitations and conditions applied to elections for the options described under sub-paragraphs (A) and (B) of this paragraph (ii) of Section 4. Payments under this option shall be actuarially equivalent to the benefit provided under Section 3, determined on the basis of the applicable actuarial assumptions and other relevant provisions used for the same in the Ashland Pension Plan.
(D) Joint and Survivor Income Option. A retiree eligible under Section 2 for the benefit under Section 3 may elect to receive an actuarially reduced benefit payable monthly during the retiree's lifetime with payments to continue after his death to the person he designates (hereinafter called "contingent annuitant"), in an amount equal to (1) 100% of such actuarially reduced benefit, (2) 66 2/3% of such actuarially reduced benefit, or (3) 50% of such actuarially reduced benefit. Benefit payments under this option shall terminate with the monthly payment for the month in which occurred the date of death of the later to die of the retiree and his contingent annuitant. The following additional limitations and conditions apply to this option:
(a) The contingent annuitant shall be designated by the retiree in writing in such form and at such time as Ashland may from time to time prescribe.
(b) In the event the contingent annuitant dies prior to the date the election of this optional form of benefit becomes irrevocable as provided under paragraph (i) of Section 4, the retiree's selection of this option shall be void. Before the date the election of this optional form of benefit becomes irrevocable as provided under paragraph (i) of
Section 4, the retiree may change the contingent annuitant or change the option elected, subject to the applicable limitations and conditions applied to elections for the options described under sub-paragraphs (A) and (B) of this paragraph (ii) of Section 4.
(c) In the event of the death of the retiree prior to the date the election is irrevocable as provided under paragraph (i) of
Section 4, such retiree shall be deemed to have terminated employment on the day before his death (for reasons other than death) and survived until the day after the date as of which the benefit he elected under this sub-paragraph (D) would have commenced.
(d) Actuarial equivalence under this sub-paragraph (D) shall be determined on the basis of the applicable actuarial assumptions and other relevant provisions used for the same in the Ashland Pension Plan.

(E) Period Certain Income Option. A retiree eligible under
Section 2 for the benefit under Section 3 may elect to receive an actuarially reduced benefit payable monthly during his lifetime and terminating with the monthly payment for the month in which his death occurs, with the provision that not less than a total of 120 monthly payments shall be made in any event to him and/or the person designated by him to receive payments under this sub-paragraph (E) in the event of his death (hereinafter called "alternate recipient"). Such alternate recipient shall be designated in writing by the retiree in such form and at such time as Ashland may from time to time prescribe. If a retiree and his alternate recipient die after the date as of which payments have commenced but before the total specified monthly payments have been made to such retiree and/or his alternate recipient, the commuted value of the remaining unpaid payments shall be paid in a lump sum to the estate of the later to die of the retiree or his alternate recipient. The following additional limitations and conditions shall apply to this option:
(a) A retiree may designate a new alternate recipient if the one first designated dies before the retiree and after the date the election of this optional form of benefit became irrevocable under paragraph (i) of Section 4. In the event the alternate recipient dies prior to the date the election becomes irrevocable as provided under paragraph
(i) of Section 4, the retiree's selection of this option shall be void. Before the date the election of this optional form of benefit becomes irrevocable as provided under paragraph (i) of Section 4, the retiree may change the alternate recipient or change the option elected, subject to the applicable limitations and conditions applied to elections for the options described under sub-paragraphs (A) and (B) of this paragraph (ii) of
Section 4.
(b) In the event of the death of the retiree prior to the date the election is irrevocable as provided under paragraph (i) of
Section 4, such retiree shall be deemed to have terminated employment on the day before his death (for reasons other than death) and survived until the day after the date as of which the benefit he elected under this sub-paragraph (E) would have commenced.
(c) Actuarial equivalence under this sub-paragraph (E) shall be determined on the basis of the applicable actuarial assumptions and other relevant provisions used for the same in the Ashland Pension Plan. (F) Death Before Payment. Subject to Section 6, in the event a retiree eligible under Section 2 for the benefit under Section 3 dies after having made an election of

an optional form of payment under this paragraph (ii) of Section 4 before the date such election became irrevocable as provided under paragraph (i) of Section 4, such retiree shall be deemed to have terminated employment on the day before his death (for reasons other than death) and survived until the day after the date as of which the optional form of payment he elected would have commenced and payment shall then be made under the Plan in accordance with such retiree's election.
5. Payment of Small Amounts. Unless such retiree receives his or her benefit in a lump sum as provided in Section 4, in the event a monthly benefit under this Plan, payable to either a retiree or to his contingent annuitant, alternate recipient or surviving spouse, is too small (in the sole judgment of Ashland) to be paid monthly, such benefit may be paid quarterly, semi-annually, or annually, as determined by Ashland to be administratively convenient.
6. Survivor Benefit. In the event a retiree who was eligible under
Section 2 for the benefit under Section 3(i) dies, leaving a surviving spouse, before electing an optional form of payment under paragraph (ii) of
Section 4 and before the date such an election would have become irrevocable under paragraph (i) of Section 4, then such retiree shall be deemed to have -
(i) elected the joint and 100% survivor income option under sub-paragraph (D) of paragraph (ii) of Section 4;
(ii) named his spouse as the 100% contingent annuitant;
(iii) terminated employment on the day before his death (for reasons other than death); and
(iv) survived until the day after the date as of which such benefit would have commenced. In the event a retiree who was eligible under Section 2 for the benefit under Section 3(ii) dies, leaving a surviving spouse, before electing an optional form of payment under paragraph (ii) of Section 4 and before the date such an election would have become irrevocable under paragraph (i) of
Section 4, then such surviving spouse shall be entitled to the lump sum amount of the benefit as calculated under Section 3(ii) and payable no later than the time such a benefit would have to be paid under the Ashland Pension Plan. If such a retiree dies under the foregoing described circumstances without leaving a surviving spouse, then the benefit so computed under Section 3(ii) shall be paid to the beneficiary to whom such retiree's Retirement Growth Account balance is payable under the Ashland Pension Plan.

7. Costs. In appropriate cases, Ashland may cause an affiliate to make the payment (or an allocable portion thereof) called for by the Plan directly to the person eligible to receive such payments.
8. Confidentiality and No Competition All benefits under the Plan shall be forfeited by anyone who discloses confidential information to others outside of Ashland's organization without the prior written consent of Ashland or who accepts, during a period of five (5) years following his or her retirement, any employment or consulting activity which is in direct conflict with the business of Ashland at such time. Such determination shall be made in the sole discretion of Ashland. A breach of this Section 8 shall result in an immediate forfeiture of benefits payable to any retiree under the Plan.
9. Lost Participant/Beneficiary. In the event Ashland, after reasonable effort, is unable to locate a person to whom a benefit is payable under the Plan, such benefit shall be forfeited; provided, however, that such benefit shall be reinstated (in the same amount and form as that of the benefit forfeited without any obligation to pay amounts which would otherwise have previously come due) upon proper claim made by such person prior to termination of the Plan.
10. Miscellaneous.
(i) The obligations of Ashland and any affiliate thereof with respect to benefits under this Plan constitute merely the unsecured promise of Ashland and/or its affiliates, as the case may be, to make the payments provided for in this Plan. No property of Ashland or any affiliate is or shall, by reason of the Plan, be held in trust or be deemed to be held in trust for any person and any participant or beneficiary under the Plan, the estate of either of them and any person claiming under or through them shall not have, by reason of the Plan, any right, title or interest of any kind in or to any property of Ashland and its affiliates. To the extent any person has a right to receive payments under the Plan, such right shall be no greater than the right of any unsecured general creditor of Ashland/ or its affiliates.
(ii) Ashland shall administer the Plan. Ashland shall have full power and authority to amend, modify, or terminate the Plan and shall have all powers and the discretion necessary and convenient to administer the Plan in accordance with its terms, including, but not limited to, all necessary, appropriate, discretionary and convenient power and authority to interpret, administer and apply the provisions of the Plan with respect to all persons having or claiming to have any rights, benefits, entitlements or obligations under the Plan. This 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. All such interpretations of the Plan and documents associated with the Plan and questions concerning its administration and application, as determined by Ashland, shall be binding on all persons having an interest under the Plan. Ashland may delegate (and may give to its delegatee the power and authority to redelegate) to any person or persons any responsibility, power or duty under the Plan. Decisions of Ashland or its delegatee shall be final, conclusive, and binding on all parties.
(iii) Except as expressly allowed pursuant to Sections 3 and 4 of this Plan in regard to the form of benefit option and in connection with a division of property under a domestic relations proceeding under state law, no right or interest of of any person entitled to a benefit under the Plan shall be subject to involuntary alienation, assignment or transfer of any kind. A person entitled to a benefit under this Plan may voluntarily assign his or her rights under the Plan. Ashland, the Committee and any of their delegates shall not review, confirm, guarantee or otherwise comment on the legal validity of any voluntary assignment. Ashland and its delegates may review, provide recommendations and approve submitted domestic relations orders using procedures similar to those that apply to qualified domestic relations orders under the Ashland Pension Plan. Ashland or any affiliate may, however, offset or cause an offset to be made against any payment to be made under the Plan in regard to amounts due and owing from such person to Ashland or any affiliate. Notwithstanding anything to the contrary in this paragraph (iii), legally required tax withholding on benefit payments, the recovery, by any means, of previously made overpayments of Plan benefits, or the direct deposit of Plan benefit payments in a bank or similar account, provided that such direct deposits are allowed by Ashland in the administration of the Plan and provided that such direct deposit is not part of an arrangement constituting an assignment or alienation, shall not be considered to be prohibited under this paragraph (iii).
(iv) No amount paid or payable under the Plan shall be deemed salary or other compensation to any employee for the purpose of computing benefits to which such employee or any other person may be entitled under any employee benefit plan of Ashland or any affiliate.

(v) To the extent that state law shall not have been preempted by ERISA or any other law of the United States, the Plan shall be governed by the laws of the Commonwealth of Kentucky.
(vi) The Plan described herein shall amend and supersede, as of July 1, 2003, all provisions in the Ashland Inc. Nonqualified Pension Plan as Amended, dated as of September 19, 1996, except as otherwise provided herein and further excepting that the rights of former employees who terminated employment, retired, or became disabled prior to the day before the effective date hereof shall be governed by the terms of the Plan as in effect at the time of such termination of employment, retirement, or disability, unless otherwise provided herein.
11. Change in Control. Notwithstanding any provision of this Plan to the contrary, in the event of a Change in Control (as defined hereinafter in this Section 11), any employee who would or will meet the requirements of Section 2, except that such employee has not or is not eligible to retire or terminate with a vested early, normal or deferred retirement benefit under any Affected Plan, shall be deemed to have a vested benefit hereunder, regardless of when such employee actually retires and commences benefits under an Affected Plan and such entitlement shall be vested from and after the time of such Change in Control. Ashland shall reimburse an employee for legal fees and expenses incurred if he or she is required to, and is successful in, seeking to obtain or enforce any right to payment pursuant to the Plan after a Change in Control. In the event that it shall be determined that such employee is properly entitled to the payment of benefits hereunder, such employee shall also be entitled to interest thereon payable in an amount equivalent to the prime rate of interest (quoted by Citibank, N.A. as its prime commercial lending rate on the latest date practicable prior to the date of the actual commencement of payments) from the date such payment(s) should have been made to and including the date it is made. Notwithstanding any provision of this Plan to the contrary, the Plan may not be amended after a Change in Control without the written consent of a majority of the Board of Directors of Ashland (hereinafter "Board") who were directors prior to the Change in Control. For purposes of this Section 11, Change in Control shall be deemed to occur (1) upon approval of the shareholders of Ashland (or if such approval is not required, upon the approval of the Board) of (A) any consolidation or merger of Ashland, other than a consolidation or merger of Ashland into or with a direct or indirect wholly-owned subsidiary, in which Ashland 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 Ashland, provided, however, that no sale, lease, exchange or other transfer of all or substantially all the assets of Ashland shall be deemed to occur unless assets constituting 80% of the total assets of Ashland 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 Ashland, (2) when any person (as defined in
Section 3(a)(9) or 13(d) of the Exchange Act), other than Ashland or any subsidiary or employee benefit plan or trust maintained by Ashland, shall become the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 15% of Ashland's Common Stock outstanding at the time, without the approval of the Board, or (3) 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 Ashland'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 Ashland'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, Ashland and Marathon Ashland Petroleum LLC, as amended from time to time, shall not be deemed to constitute a Change in Control.
12.
(a) Initial Claim - Notice of Denial. If any claim for benefits (within the meaning of section 503 of ERISA) is denied in whole or in part, Ashland (which shall include Ashland or its delegate throughout this Section 12) will provide written notification of the denied claim to the participant or beneficiary, as applicable, (hereinafter referred to as the claimant) in a reasonable period, but not later than 90 days after the claim is received. The 90-day period can be extended under special circumstances. If special circumstances apply, the claimant will be notified before the end of the 90-day period after the claim was received. The notice will identify the special circumstances. It will also specify the expected date of the decision. When special circumstances apply, the claimant must be notified of the decision not later than 180 days after the claim is received.

The written decision will include:
(i) The reasons for the denial.
(ii) Reference to the Plan provisions on which the denial is based. The reference need not be to page numbers or to section headings or titles. The reference only needs to sufficiently describe the provisions so that the provisions could be identified based on that description.
(iii)A description of additional materials or information needed to process the claim. It will also explain why those materials or information are needed.
(iv) A description of the procedure to appeal the denial, including the time limits applicable to those procedures. It will also state that the claimant may file a civil action under section 502 of ERISA (ERISA - ss.29 U.S.C. 1132). The claimant must complete the Plan's appeal procedure before filing a civil action in court.

If the claimant does not receive notice of the decision on the claim within the prescribed time periods, the claim is deemed denied. In that event the claimant may proceed with the appeal procedure described below.
(b) Appeal of Denied Claim. The claimant may file a written appeal of a denied claim with Ashland in such manner as determined from time to time. Ashland is the named fiduciary under ERISA for purposes of the appeal of the denied claim. Ashland may delegate its authority to rule on appeals of denied claims and any person or persons or entity to which such authority is delegated may re-delegate that authority. The appeal must be sent at least 60 days after the claimant received the denial of the initial claim. If the appeal is not sent within this time, then the right to appeal the denial is waived.

The claimant may submit materials and other information relating to the claim. Ashland will appropriately consider these materials and other information, even if they were not part of the initial claim submission. The claimant will also be given reasonable and free access to or copies of documents, records and other information relevant to the claim.

Written notification of the decision on the appeal will be delivered to the claimant in a reasonable period, but not later than 60 days after the appeal is received. The 60-day period can be extended under special circumstances. If special circumstances apply, the claimant will be notified before the end of the 60-day period after the appeal was received. The notice will identify the special circumstances. It will also specify the expected date of the decision. When special circumstances apply, the claimant must be notified of the decision not later than 120 days after the appeal is received.

Special rules apply if Ashland designates a committee as the appropriate named fiduciary for purposes of deciding appeals of denied claims. For the special rules to apply, the committee must meet regularly on at least a quarterly basis.

When the special rules for committee meetings apply the decision on the appeal must be made not later than the date of the committee meeting immediately following the receipt of the appeal. If the appeal is received within 30 days of the next following meeting, then the decision must not be made later than the date of the second committee meeting following the receipt of the appeal.

The period for making the decision on the appeal can be extended under special circumstances. If special circumstances apply, the claimant will be notified by the committee or its delegate before the end of the otherwise applicable period within which to make a decision. The notice will identify the special circumstances. It will also specify the expected date of the decision. When special circumstances apply, the claimant must be notified of the decision not later than the date of the third committee meeting after the appeal is received.

In any event, the claimant will be provided written notice of the decision within a reasonable period after the meeting at which the decision is made. The notification will not be later than 5 days after the meeting at which the decision is made.

Whether the decision on the appeal is made by a committee or not, a denial of the appeal will include:

(i) The reasons for the denial.
(ii) Reference to the Plan provisions on which the denial is based. The reference need not be to page numbers or to section headings or titles. The reference only needs to sufficiently describe the provisions so that the provisions could be identified based on that description.
(iii)A statement that the claimant may receive free of charge reasonable access to or copies of documents, records and other information relevant to the claim.
(iv) A description of any voluntary procedure for an additional appeal, if there is such a procedure. It will also state that the claimant may file a civil action under section 502 of ERISA (ERISA - ss.29 U.S.C. 1132).

If the claimant does not receive notice of the decision on the appeal within the prescribed time periods, the appeal is deemed denied. In that event the claimant may file a civil action in court. The decision regarding a denied claim is final and binding on all those who are affected by the decision. No additional appeals regarding that claim are allowed.

IN WITNESS WHEREOF, this amendment and restatement of the Plan is executed this 7th day of July, 2003.

ATTEST:                               ASHLAND INC.



/s/ Richard P. Thomas                 By:  /s/ Susan B. Esler
-------------------------------          ------------------------------------
          Secretary                          Vice President Human Resources -
                                             Programs and Services

AMENDMENT NO. 1 TO
ASHLAND INC. NONQUALIFIED EXCESS BENEFIT PENSION PLAN
JULY 1, 2003 AND AS AMENDED THEREAFTER

WHEREAS, effective for compensation deferred to calendar year 2005 and thereafter, there are new rules governing the tax consequences of such deferrals;
WHEREAS, the Company desires to comply with such new rules; NOW, THEREFORE, effective December 31, 2004, the Plan is frozen and no additional benefits will accrue hereunder. Benefits accrued hereunder through December 31, 2004 shall remain subject to all of the rules, terms and conditions in effect for the Plan as of December 31, 2004.

IN WITNESS WHEREOF, this Amendment to the Plan is executed this 20th day of December, 2004.

ATTEST:                                 ASHLAND INC.

/s/ David L. Hausrath                   By:  /s/ Susan B. Esler
--------------------------------           ----------------------------------
Secretary                                   Vice President, Human Resources

ARTICLE I.        PURPOSE AND EFFECTIVE DATE.
---------         --------------------------
1.01     PURPOSE
         The purpose of the Plan is to allow designated employees to retire
         prior  to  their   sixty-fifth   birthday   without  an  immediate
         substantial loss of income. This Plan is a supplemental retirement
         arrangement for a select group of management.
1.02     EFFECTIVE DATE
         The Eleventh Amended and Restated Ashland Inc.  Supplemental Early
         Retirement  Plan for Certain  Employees  is amended  and  restated
         effective July 1, 2003.  This amended and restated Plan supercedes
         all prior  versions of this Plan that were  effective on or before
         July 1, 2003 regarding Effective Retirement Dates that occur on or
         after such  date,  except as may  otherwise  be  provided  herein.
         Employees   on  June  30,   2003   that   are  in  an   employment
         classification  that potentially  makes them eligible for the Plan
         and that -
         (a)  are at least age 55 on June 30, 2003; or
         (b)  the sum of whose Age and Continuous Service is 80
         (hereinafter called Transition Participants)
         shall  remain  subject  to the terms of the Plan in effect  before
         July 1, 2003  addressing the  calculation  and amount of benefits.
         These Employees  shall,  however,  be subject to the other changes
         that are effective on July 1, 2003,  such as those  addressing the
         vesting of  benefits  and the change to the  Effective  Retirement
         Date.  The rights and  obligations of former  Employees  receiving
         Plan  benefits  before July 1, 2003 shall be governed by the terms
         of the Plan in effect at the time of each such  former  Employee's
         Effective  Retirement  Date,  unless  otherwise  determined by the
         Committee in its sole discretion.

2.01     "AGE"  -  means  the  age of an  Employee  as of  his or her  last
         birthday,  except as may otherwise be provided under Sections 5.01
         and 5.02 in the event of a Change in Control.
2.02     "ANNUAL RETIREMENT INCOME" - means the annual income payable under
         this Plan by Ashland for the lifetime of a Participant  commencing
         on such Participant's  Effective Retirement Date and ending on his
         or her date of death, subject to the provisions of Section 5.04.
2.03     "ASHLAND"  -  means   Ashland  Inc.  and  its  present  or  future
         subsidiary corporations.
2.04     "BOARD" - means the Board of Directors of Ashland and its designees.
2.05     "CHANGE IN  CONTROL" - shall be deemed to occur (1) upon  approval
         of the  shareholders  of  Ashland  (or  if  such  approval  is not
         required, upon the approval of the Board) of (A) any consolidation
         or merger of  Ashland,  other  than a  consolidation  or merger of
         Ashland into or with a direct or indirect wholly-owned subsidiary,
         in which Ashland 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
         Ashland, provided, however, that no sale, lease, exchange or other
         transfer of all or  substantially  all the assets of Ashland shall
         be deemed to occur  unless  assets  constituting  80% of the total
         assets of Ashland 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 Ashland,  (2) when
         any person (as defined in Section 3(a)(9) or 13(d) of the Exchange
         Act),  other than Ashland or any  subsidiary  or employee  benefit
         plan or trust  maintained by Ashland,  shall become the beneficial
         owner (as defined in Rule 13d-3 under the Exchange Act),  directly
         or  indirectly,  of  more  than  15%  of  Ashland's  Common  Stock
         outstanding at the time, without the approval of the Board, or (3)
         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 Ashland'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 Ashland'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,  Ashland and Marathon
         Ashland  Petroleum LLC, as amended from time to time, shall not be
         deemed to constitute a Change in Control.
2.06     "COMMITTEE" - means the Personnel  and  Compensation  Committee of
         the Board and its designees.
2.07     "CONTINUOUS  SERVICE" - means Continuous Service as defined in the
         Ashland  Inc.  and   Affiliates   Pension  Plan,   except  as  the
         determination  of  Continuous  Service is modified for purposes of
         this Plan.
2.08     "EFFECTIVE RETIREMENT DATE" - means:
             (a)  After June 30, 2003.  After June 30, 2003,  the Effective
                  Retirement  Date of an  Employee  that  is a  Participant
                  under Section 3.01 is whichever of the following applies,
                  so long as the  Participant  has at least  five  years of
                  Continuous Service.
                  (1)  The  Effective  Retirement  Date is the first day of
                       the month following the date a Participant  incurs a
                       Termination of Employment -
                       (i)  on  or   after   the   date   the  sum  of  the
                            Participant's Age and Continuous Service is 80;
                            or
                       (ii) on or after  the date the  Participant  attains
                            Age 55.
                  (2)  The Effective  Retirement Date of a Participant that
                       incurs a Termination of Employment  before the dates
                       specified in (1) above is the first day of the month
                       following the date the Participant attains Age 55.
             (b)  Change in Control.  The Effective  Retirement Date in the
                  event of a Change in Control of a Participant  considered
                  to  be a  Level  I or II  participant  in  the  Incentive
                  Compensation  Plan who has an Employment  Agreement shall
                  be  the  first  day  of  the  month  following  (i)  such

                  Participant's  termination for reasons other than "Cause"
                  or (ii) such Participant's resignation for "Good Reason."
                  The Effective Retirement Date in the event of a Change in
                  Control of a Participant considered to be a Level III, IV
                  or V participant in the Incentive  Compensation  Plan, or
                  who is  considered to be a Level I or II  participant  in
                  the Incentive  Compensation Plan and who does not have an
                  Employment Agreement, shall be the first day of the month
                  following  such  Participant's  termination  for  reasons
                  other than "Cause".  For Participant's who do not have an
                  Employment Agreement with Ashland, "Cause" shall have the
                  meaning  given to that word in Section 3.02. In the event
                  a Change in  Control  occurs  after  June 30,  2003,  all
                  Participants  shall be  completely  vested in their  Plan
                  benefits,  regardless  of the  number  of their  years of
                  Continuous Service
2.09     "EMPLOYEE"  - means,  effective  after June 30, 2003, a common law
         employee of Ashland.
2.10     "EMPLOYMENT AGREEMENTS" - means those contractual  agreements,  in
         effect  from  time to time,  which are  approved  by the Board and
         which  provide an Employee  with a specified  period of employment
         and other benefits.
2.11     "FINAL AVERAGE BONUS" - means the Participant's average bonus paid
         under the Incentive  Compensation Plan (including amounts that may
         have been deferred) during the highest  thirty-six (36) months out
         of  the  final   eighty-four-month   (84)  period.  For  Effective
         Retirement  Dates  after June 30,  2003,  the  calculation  of the
         eighty-four   month  period  shall  be  measured   back  from  the
         Participant's  Termination  of  Employment  that is  nearest to or
         which is coincident with the  Participant's  Effective  Retirement
         Date.  If the  Participant  becomes  classified  below  a  Level V
         Employee  after  June  30,  2003 and  before  the  Termination  of
         Employment identified in the preceding sentence,  then the date of
         such  change  in   classification  is  substituted  for  the  said
         Termination  Date.  For these  purposes,  the  "bonus  paid" for a
         particular  month within a particular  fiscal year under such plan
         shall  be  equal  to  the  amount  of  such  bonus  actually  paid
         (regardless of the date paid, but excluding any adjustment for the
         deferral of such payment) to such  Participant  on account of such
         fiscal  year  divided  by the number of months  contained  in such
         fiscal  year  which  were used in  determining  the amount of such
         bonus  actually paid

         to such  Participant.  The  bonus  paid that is used  compute  the
         average  described in this Section 2.11 shall only be a bonus that
         is paid to the Participant  when such  Participant is considered a
         Level III, IV or V participant in the Incentive Compensation Plan.
2.12     "FINAL   AVERAGE   COMPENSATION"   -  means  the   average   total
         compensation paid during the highest thirty-six months (36) out of
         the final  eighty-four-month (84) period. For Effective Retirement
         Dates after June 30,  2003,  the  calculation  of the  eighty-four
         month  period  shall  be  measured  back  from  the  Participant's
         Termination  of  Employment   that  is  nearest  to  or  which  is
         coincident  with  the  Participant's  Effective  Retirement  Date,
         provided that the  Termination  of Employment  occurred after June
         30, 2003. If the Participant  becomes  classified below a Level II
         Employee  after  June  30,  2003 and  before  the  Termination  of
         Employment identified in the preceding sentence,  then the date of
         such  change  in   classification  is  substituted  for  the  said
         Termination Date. For these purposes, "total compensation paid" is
         the sum of the  "compensation  paid" and the "bonus paid" during a
         particular  month.  "Compensation  paid" shall be the base rate of
         compensation  for such  Participant  in effect on the first day of
         such calendar  month.  "Bonus paid" shall have the same meaning as
         set forth in Section 2.11. In the event a payment is due under the
         Plan  after a  Change  in  Control  because  the  Participant  was
         terminated  other than for "Cause" or resigned for "Good  Reason,"
         the  calculation of Final Average  Compensation  shall include the
         amount paid under such  Participant's  Employment  Agreement.  The
         amount so paid shall be divided by 36 to derive the monthly "total
         compensation paid" it represents. The total compensation paid that
         is used  compute the average  described in this Section 2.12 shall
         only be total  compensation  that is paid to the Participant  when
         such  Participant is considered a Level I or II participant in the
         Incentive Compensation Plan.
2.13     "INCENTIVE  COMPENSATION  PLAN" - means the Ashland Inc. Incentive
         Compensation Plan or the Ashland Inc. Incentive  Compensation Plan
         for Key Executives, as applicable, including any successor to such
         plans.
2.14     "PARTICIPANT" - means for Effective  Retirement  Dates before July
         1, 2003 an Employee who was approved for participation in the Plan
         pursuant to Article III or Section  5.06,  as they  existed at the
         applicable  time.  For Effective  Retirement  Dates after June 30,
         2003,  Participant  means an  Employee  that meets the  applicable
         requirements of Article III and who has not incurred a Termination
         of  Employment  for Cause,  as defined in Section

         3.02.  A former  Employee  that  did not  incur a  Termination  of
         Employment  for Cause and who has a benefit  being paid or payable
         from the Plan is also a Participant.
         2.15 "PLAN" - means the Eleventh Amended and Restated Ashland Inc.
         Supplemental  Early  Retirement Plan for Certain  Employees as set
         forth herein.
2.16     "SERVICE"  - means the  number of years  and  fractional  years of
         employment by Ashland of an Employee,  measured from the first day
         of the month coincident with or next succeeding his or her initial
         date of employment up to and including such  Employee's  Effective
         Retirement Date. For purposes of this Section 2.16,  Service shall
         include an Employee's employment with a subsidiary or an affiliate
         of Ashland  determined in accordance  with rules from time to time
         adopted or approved by the Board, or its delegate.  Effective July
         1,  2003,  Service  shall be  calculated  based on the  rules  for
         calculating   Periods  of  Service  under  the  Ashland  Inc.  and
         Affiliates Pension Plan, except as the determination of Service is
         modified for purposes of this Plan.
         2.17  "TERMINATION  OF  EMPLOYMENT"  - means the date an  Employee
         ceases to be an Employee of Ashland.

         Ashland  reserves  the  right to  terminate  any  Participant  for
         "Cause"  prior to his or her  Effective  Retirement  Date,  with a
         resulting  forfeiture  of the payment of benefits  under the Plan.
         Ashland also  reserves the right to  terminate  any  Participant's
         participation  in the Plan for  "Cause"  subsequent  to his or her
         Effective  Retirement  Date.  For purposes of this  Section  3.02,
         "Cause"  shall  mean  the  willful  and  continuous  failure  of a
         Participant to substantially  perform his or her duties to Ashland
         (other than any such  failure  resulting  from  incapacity  due to
         physical  or  mental  illness),  or  the  willful  engaging  by  a
         Participant  in  gross  misconduct   materially  and  demonstrably
         injurious to Ashland, each to be determined by Ashland in its sole
         discretion.
3.03     AUTOMATIC VESTING FOR CHANGE IN CONTROL
         Subject to the  provisions of Article VI, in the event of a Change
         in Control (as defined in Section 2.05), an Employee who is deemed
         to be a Level I, II, III, IV or V participant  under the Incentive
         Compensation  Plan shall  automatically  be  completely  vested in
         their  benefits,  regardless  of the  number  of  their  years  of
         Continuous Service.
ARTICLE IV.       INTERACTION WITH EMPLOYMENT AGREEMENTS.
----------        --------------------------------------
4.01     TERMINATIONS - GENERAL
         Notwithstanding  any  provision of this Plan to the  contrary,  an
         Employee who has entered into an Employment Agreement with Ashland
         and who is either terminated without "Cause" prior to a "change in
         control of Ashland" or is  terminated  without  "Cause" or resigns
         for "Good Reason" following a "change in control of Ashland" (each
         quoted  term as defined in the  applicable  employment  agreement)
         shall be entitled to receive the benefits as provided  pursuant to
         this Plan. Benefits payable hereunder in such a situation shall be
         calculated in accordance  with the payment option  selected by the
         Employee at such time.
4.02     BENEFITS PRIOR TO "CHANGE IN CONTROL."
         If the  Employee's  termination  is  without  "Cause"  prior  to a
         "change in control of  Ashland,"  the benefits  payable  hereunder
         shall commence no earlier than as of the first day of the calendar
         month  coincident  with or next  following the second  anniversary
         following the Employee's  "Date of Termination" (as defined in the
         applicable employment agreement);  however, if the Employee elects
         to receive  such  benefits  in a lump sum as  provided  in Section
         5.04(b)(1), such benefits shall commence and be payable as therein
         specified.

4.03     BENEFITS SUBSEQUENT TO A "CHANGE IN CONTROL."
         If the  Employee's  termination  is  without  "Cause" or he or she
         resigns  for "Good  Reason"  following  a "change  in  control  of
         Ashland,"  benefits payable  hereunder shall begin as of the first
         day  of  the  calendar  month  next  following  the  Participant's
         Effective Retirement Date.
4.04     SUBSEQUENT ACTIVITY IN CONFLICT WITH ASHLAND
         The  provisions  of this  Section 4.04 shall apply to Level I, II,

III, IV and V Participants, regardless of whether such a Participant has an Employment Agreement; except that the provisions of this Section 4.04 shall not apply to any Participant after a Change in Control. If a Participant accepts, during a period of five (5) years subsequent to his or her Effective Retirement Date, any consulting or employment activity which is in direct and substantial conflict with the business of Ashland at such time (such determination regarding conflicting activity to be made in the sole discretion of the Board), he or she shall be considered in breach of the provisions of this Section 4.04; provided, however, he or she shall not be restricted in any manner with respect to any other non-conflicting activity in which he or she is engaged. If a Participant wishes to accept employment or consulting activity which may be prohibited under this Section 4.04, such Participant may submit to Ashland written notice (Attention: Vice President Human Resources - Programs and Services) of his or her wish to accept such employment or consulting activity. If within ten (10) business days following receipt of such notice Ashland does not notify the Participant in writing of Ashland's objection to his or her accepting such employment or consulting activity, then such Participant shall be free to accept such employment or consulting activity for the period of time and upon the basis set forth in his or her written request.
In the event the provisions of this Section 4.04 are breached by a Participant, the Participant shall not be entitled to any additional periodic payments hereunder and shall be liable to repay to Ashland all amounts such Participant received prior to such breach. If a Participant who breaches the provisions of this
Section 4.04 received a lump sum distribution of his or her benefit prior to such breach, such Participant shall be liable to repay to Ashland the amount of such distribution. If a Participant who breaches the provisions of this Section 4.04 deferred all or any part of a lump sum distribution hereunder to the Ashland Inc. Deferred Compensation Plan, the amount so deferred

shall be forfeited, and if any amount of the amount so deferred was distributed from the Ashland Inc. Deferred Compensation Plan before the breach occurred, the amount so distributed shall be repaid to Ashland. Any repayment of benefits hereunder shall be assessed interest at the rate applicable for the calculation of a lump sum payment under Section 5.04(b) for the month in which the breach occurs, with such interest compounded monthly from the month in which the breach occurs to the month in which such repayment is made to Ashland. Ashland shall have available to it all other remedies at law and equity to remedy a breach of this
Section 4.04.

ARTICLE V.        RETIREMENT INCOME AND OTHER BENEFITS.
---------         ------------------------------------
5.01     LEVELS I AND II.
         The  Transition  Participants  described  in Section  1.2 that are

deemed to be Level I or II participants under the Incentive Compensation Plan are eligible to receive Annual Retirement Income equal to:
(a) PRE-AGE 62 BENEFIT A Transition Participant who retires under this Plan, including a Transition Participant to whom the provisions of paragraph (d) of this Section 5.01 apply, shall receive an Annual Retirement Income from and after the first day of the calendar month next following his or her Effective Retirement Date until the end of the month in which he or she attains age 62 equal to the greater of (1) the amounts provided in the following schedule or (2) 50% of Final Average Compensation. Notwithstanding the previous sentence, in the event such Transition Participant retired with less than 20 years of Service, such Annual Retirement Income shall be multiplied by a fraction (A) the numerator of which is such Transition Participant's years of and fractional years of Service, and (B) the denominator of which is twenty (20).

% OF
RETIREMENT COMPENSATION

1st    -   Year After Effective            75%
           Retirement Date
2nd    -          "                        70%

3rd    -          "                        65%
4th    -          "                        60%
5th    -          "                        55%
6th    -   Year and thereafter             50%
           to Age 62

For purposes of this Section 5.01(a), "% of Compensation" shall mean the annualized average of the Transition Participant's base monthly compensation rates (excluding incentive awards, bonuses, and any other form of extraordinary compensation) in effect with respect to Ashland on the first day of the thirty-six (36) consecutive calendar months which will give the highest average out of the one-hundred twenty (120) consecutive calendar month period ending on the Transition Participant's Effective Retirement Date.
(b) AGE 62 BENEFIT AND THEREAFTER From and after the first day of the calendar month next following his or her Effective Retirement Date, or the attainment of age 62, whichever is later, the Transition Participant's Annual Retirement Income shall be equal to 50% of Final Average Compensation; provided, however, that in the event such Transition Participant retired with less than 20 years of Service, such Annual Retirement Income shall be 50% of Final Average Compensation multiplied by a fraction (A) the numerator of which is such Transition Participant's years of and fractional years of Service, and (B) the denominator of which is twenty (20).
(c) BENEFIT REDUCTION The amount of benefit provided in paragraphs (a) and (b) of this Section 5.01 shall be reduced by the sum of the following:
(1) the Transition Participant's benefit under the Ashland Inc. and Affiliates Pension Plan (the "Pension Plan") (assuming 50% of such Transition Participant's account under the Ashland Inc. Leveraged Employee Stock Ownership Plan were transferred to the Pension Plan, as allowed under the terms of each of the said plans and disregarding any benefit assignment under an approved qualified domestic relations order affecting either the

Pension Plan or the Ashland Inc. Leveraged Employee Stock Ownership Plan), determined on the basis of a single life annuity form of benefit;
(2) the Transition Participant's benefit under any other defined benefit pension plan qualified under
Section 401(a) of the Internal Revenue Code of 1986, as amended which is maintained by Ashland, determined by disregarding any benefit assignment under an approved qualified domestic relations order and on the basis of a single life annuity form of benefit (said plans referred to in sub-paragraphs (1) and (2) of this paragraph (c) are hereinafter referred to jointly and severally as the "Affected Plans");
(3) the Transition Participant's benefit under the Ashland Inc. Nonqualified Excess Benefit Pension Plan, determined on the basis of a single life annuity form of benefit; and
(4) the Transition Participant's benefit under the Ashland Inc. ERISA Forfeiture Plan attributable to amounts which were forfeited under the Ashland Inc. Leveraged Employee Stock Ownership Plan, multiplied by 50%, and determined on the basis of a single life annuity benefit. In the event a Transition Participant's benefit hereunder is paid as a lump sum pursuant to an election under
Section 5.04(b)(1), the reduction to such benefit shall be calculated based upon the lump sum actuarial present value of the benefits referred to in subparagraphs
(1)-(4) of this paragraph (c). For distributions commencing after May 31, 2001, such calculation shall be conducted on the basis that the benefits referred to in said subparagraphs (1)-(4) commence at the same time as of which the benefit in this Plan is paid as a lump sum, using the Transition Participant's attained age at the time of such commencement, unless otherwise required in paragraph (d) of this Section 5.01.
(d) BENEFIT AFTER A CHANGE IN CONTROL
(1) Participants Having Employment Agreements. A Participant having an Employment Agreement who either is terminated without "Cause" or resigns for "Good Reason" after a Change in Control shall have the benefit payable under this Section 5.01 computed by adding 3 years to the Participant's Age and Service at the Participant's Effective Retirement Date. These additions to Age and Service shall, except as

otherwise provided, apply for purposes of computing the single life annuity payment to the Participant, if applicable. A Participant subject to this paragraph (d)(1) whose Effective Retirement Date occurs before attaining an actual age of 55 shall have the 3 year addition to Age apply when converting the single life annuity amount (if applicable) to any permitted optional form under this Article V. If the Effective Retirement Date of a Participant subject to this paragraph (d)(1) occurs on or after the Participant attains an actual age of 55, then the Participant's actual age shall be used when making such a conversion. Notwithstanding anything to the contrary contained herein, when converting a Participant's single life annuity (if applicable) to a lump sum payment option, the Participant's actual age shall be used without reference to the additional 3 years. If the addition of 3 years to the Participant's age results in an Age less than 55 and the Participant commences the benefit, the amount of the benefit shall be adjusted to account for the fact it is paid before the Participant's attainment of Age 55. This adjustment shall be based upon the early retirement table in Section 6.2 of the Ashland Inc. and Affiliates Pension Plan as it existed on September 30, 1999. When applying this table under these circumstances, age 55 shall be substituted for age 62 and adjustments for ages younger than those on the table shall be reasonably determined by an actuary or actuarial firm who regularly performs services in connection with the Plan.
(2) Participants Without Employment Agreements. A Participant without an Employment Agreement who is terminated without "Cause" after a Change in Control shall have the benefit payable under this Section 5.01 computed by adding the applicable amount to the Participant's Age and Service at the Participant's Effective Retirement Date. For these purposes, the applicable amount is derived from the following table.

------------------------------------------------------------ ---------------------------------------------------------
    LENGTH OF PARTICIPANT'S SERVICE AT SEPARATION FROM                           NUMBER OF YEARS
                        EMPLOYMENT                                           (THE APPLICABLE AMOUNT)
------------------------------------------------------------ ---------------------------------------------------------
Up to 5 years                                                3 months
More than 5 and up to 10 years                               6 months
More than 10 and up to 15 years                              1 year
More than 15 and up to 20 years                              1 year and 6 months
More than 20 years                                           2 years

These additions to Age and Service shall, except as otherwise provided, apply for purposes of computing the single life annuity payment (if applicable) to the Participant. A Participant subject to this paragraph
(d)(2) whose Effective Retirement Date occurs before attaining an actual age of 55 shall have the applicable amount added to such Participant's Age apply when converting the single life annuity amount (if applicable) to any permitted optional form under this Article V. If the Effective Retirement Date of a Participant subject to this paragraph (d)(2) occurs on or after the Participant attains an actual age of 55, then the Participant's actual age shall be used when making such a conversion. Notwithstanding anything to the contrary contained herein, when converting a Participant's single life annuity (if applicable) to a lump sum payment option, the Participant's actual age shall be used without reference to the addition of the applicable amount. If the addition of the applicable amount to the Participant's age results in an Age less than 55 and the Participant commences the benefit, the amount of the benefit shall be adjusted to account for the fact it is paid before the Participant's attainment of Age 55. This adjustment shall be based upon the early retirement table in Section 6.2 of the Ashland Inc. and Affiliates Pension Plan as it existed on September 30, 1999. When applying this table under these circumstances, age 55 shall be substituted for age 62 and adjustments for ages younger than those on

the table shall be reasonably determined by an actuary or actuarial firm who regularly performs services in connection with the Plan.
(e) Benefit after June 30, 2003. Subject to the applicable provisions of paragraph (d) above, the vested benefit payable to a Participant on the Effective Retirement Date for the period such Participant was deemed classified as a Level I or II participant in the Incentive Compensation Plan is equal to 25% of Final Average Compensation multiplied by years of Service not to exceed 20 years of Service. Service includes full and fractional years. There is no reduction for commencement before age 62 and there is no increase for commencement after age 62. The normal form of the benefit so computed is a single lump sum payment. The benefit so payable shall be reduced by the actuarially equivalent (as defined below) lump sum benefit from the following plans from which the Participant is entitled to a distribution:
(1) the Ashland Inc. and Affiliates Pension Plan (the "Pension Plan") (assuming 50% of such Participant's account - if any - under the Ashland Inc. Leveraged Employee Stock Ownership Plan were transferred to the Pension Plan, as allowed under the terms of each of the said plans and disregarding any benefit assignment under an approved qualified domestic relations order affecting either the Pension Plan or the Ashland Inc. Leveraged Employee Stock Ownership Plan);
(2) the benefit under any other defined benefit pension plan qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended which is maintained by Ashland, determined by disregarding any benefit assignment under an approved qualified domestic relations order (said plans referred to in sub-paragraphs (1) and (2) of this paragraph (e) are hereinafter referred to jointly and severally as the "Affected Plans");
(3) the benefit under the Ashland Inc. Nonqualified Excess Benefit Pension Plan; and

(4) the benefit under the Ashland Inc. ERISA Forfeiture Plan attributable to amounts which were forfeited under the Ashland Inc. Leveraged Employee Stock Ownership Plan, multiplied by 50%. Effective for benefits payable to any Participant that is not a Transition Participant, actuarial equivalence shall be determined using an interest rate assumption of 8% and using the Section 415/417 Mortality Table in the Ashland Inc. and Affiliates Pension Plan. Actuarial equivalence shall be determined as of the Effective Retirement Date.
(f) Changes in Status.
(1) Subject to the applicable provisions of paragraph
(d) above, a Participant that earned a benefit under this Section 5.01 and that also earned a benefit under Section 5.02 shall receive the greater of the two benefits produced.
(2) If a Participant that earns a benefit hereunder is not considered to be a Level I, II, III, IV or V participant under the Incentive Compensation Plan on the earlier of the Participant's Effective Retirement Date or Termination of Employment, then the Service after such Participant ceased to be considered a Level I, II, III, IV or V participant under the Incentive Compensation Plan shall be disregarded for purposes of computing the benefit payable under the Plan. In that event, the only Service that shall be counted for purposes of computing the benefit payable under the Plan shall be the Service the Participant earned while

                       considered  to  be a  Level  I,  II,  III,  IV  or V
                       participant under the Incentive  Compensation  Plan.
                       Notwithstanding  anything  in the  foregoing  to the
                       contrary,  such a Participant shall be credited with
                       a minimum of five years of Service,  so long as such
                       Participant  has at least five  years of  Continuous
                       Service.
5.02     LEVELS III, IV AND V.
         --------------------
         (a) GENERAL
                  The Annual Retirement Income of a Transition  Participant
                  as  defined  in  Section  1.2   (including  a  Transition
                  Participant  to whom the  provisions  of paragraph (b) of

                  this  Section  5.02  apply)  who on his or her  Effective
                  Retirement  Date was deemed to be a Level  III,  IV, or V
                  participant under the Incentive  Compensation Plan shall,
                  from and after the first day of the  calendar  month next
                  following  his or her 62nd  birthday,  be equal to 50% of
                  the   Transition   Participant's   Final  Average  Bonus;
                  provided,  however,  that in the  event  such  Transition
                  Participant  retired  with less than 20 years of Service,
                  such Annual  Retirement  Income after age 62 shall be 50%
                  of Final Average  Bonus  multiplied by a fraction (A) the
                  numerator  of  which is such  Participant's  years of and
                  fractional  years of Service,  and (B) the denominator of
                  which is twenty (20).  Although a Transition  Participant
                  may elect to commence  benefits  under this Plan upon his
                  or her  Effective  Retirement  Date,  there  shall  be an
                  actuarial adjustment  (consistent with that applied under
                  Ashland's qualified pension plan, as from time to time in
                  effect) for  Participants  receiving  benefits under this
                  Section 5.02 whose Effective  Retirement Date is prior to
                  age 62.
         (b) BENEFIT AFTER A CHANGE IN CONTROL
                  A Participant  who is  terminated  other than for "Cause"
                  after a Change in Control shall have the benefit  payable

under this Section 5.02 computed by adding to the Participant's Age and Service at the Participant's Effective Retirement Date the number of years equal to the applicable amount for the Participant derived from the following table.

------------------------------------------------------------ ---------------------------------------------------------
    LENGTH OF PARTICIPANT'S SERVICE AT SEPARATION FROM                           NUMBER OF YEARS
                        EMPLOYMENT                                           (THE APPLICABLE AMOUNT)
------------------------------------------------------------ ---------------------------------------------------------
Up to 5 years                                                3 months
More than 5 and up to 10 years                               6 months
More than 10 and up to 15 years                              1 year
More than 15 and up to 20years                               1 year and 6 months
More than 20 years                                           2 years

These additions to Age and Service shall, except as otherwise provided, apply for purposes of computing the single life annuity payment (if applicable) to the Participant. A Participant subject to this paragraph (b) whose Effective

Retirement Date occurs before attaining an actual age of 62 shall have the applicable amount from the table hereinabove added to his or her Age apply when converting the single life annuity amount (if applicable) to any permitted optional form under this Article V. If the Effective Retirement Date of a Participant subject to this paragraph (b) occurs on or after the Participant attains an actual age of 62, then the Participant's actual age shall be used when making such a conversion. Notwithstanding anything to the contrary contained herein, when converting a Participant's single life annuity (if applicable) to a lump sum payment option, the Participant's actual age shall be used without reference to the applicable amount derived from the table hereinabove. If the addition of the applicable amount from the table hereinabove to the Participant's age results in an Age less than 62 and the Participant commences the benefit, the amount of the benefit shall be adjusted to account for the fact it is paid before the Participant's attainment of Age 62. This adjustment shall be based upon the early retirement table in Section 6.2 of the Ashland Inc. and Affiliates Pension Plan as it existed on September 30, 1999, and adjustments for ages younger than those on the table shall be reasonably determined by an actuary or actuarial firm who regularly performs services in connection with the Plan.
(c) Benefit after June 30, 2003. Subject to the applicable provisions of paragraph (b) above, the vested benefit payable to a Participant on the Effective Retirement Date for the period such Participant was deemed classified as a Level III, IV or V participant in the Incentive Compensation Plan is equal to 25% of Final Average Bonus multiplied by years of Service not to exceed 20 years of Service. Service includes full and fractional years. There is no reduction for commencement before age 62 for Participants deemed classified as a Level III participant in the Incentive Compensation Plan at the Effective Retirement Date. There is no increase for commencement after age 62 for any Participant. There is an actuarial reduction to the benefit of a Participant that is deemed classified as a Level IV or V participant in the Incentive Compensation Plan at the Effective Retirement Date. The actuarial reduction shall be made on the same basis as in the Ashland Inc. and Affiliates Pension Plan for the early commencement of a benefit in Articles 5, 6, and 7, as applicable. The appropriate actuarial reduction

shall be determined as of the Effective Retirement Date. The normal form of the benefit so computed under this paragraph (c) is a single lump sum payment.
(d) Changes in Status.
(1) Subject to the applicable provisions of paragraph
(b) above, a Participant that earned a benefit under
Section 5.02 and that also earned a benefit under
Section 5.01 shall receive the greater of the two benefits produced.
(2) If a Participant that earns a benefit hereunder is not considered to be a Level I, II, III, IV or V participant under the Incentive Compensation Plan on the earlier of the Participant's Effective Retirement Date or Termination of Employment, then the Service after such Participant ceased to be considered a Level I, II, III, IV or V participant under the Incentive Compensation Plan shall be disregarded for purposes of computing the benefit payable under the Plan. In that event, the only Service that shall be counted for purposes of computing the benefit payable under the Plan shall be the Service the Participant earned while

                       considered  to  be a  Level  I,  II,  III,  IV  or V
                       participant under the Incentive  Compensation  Plan.
                       Notwithstanding  anything  in the  foregoing  to the
                       contrary,  such a Participant shall be credited with
                       a minimum of five years of Service,  so long as such
                       Participant  has at least five  years of  Continuous
                       Service.
5.03     BENEFITS PAYABLE FOR LESS THAN 12 MONTHS
         Annual  Retirement Income benefits payable under Sections 5.01 and
         5.02 for a period of less than 12  months  due to a  Participant's
         attainment of age 62 or death will be payable on a pro-rata basis,
         with months taken as a fraction of a year.
5.04     PAYMENT OPTIONS
         (a)      ELECTION
                  A Participant  shall,  subject to Sections 5.05 and 5.06,
                  elect the form in which such  benefit  shall be paid from
                  among  those  identified  in this  Section  5.04 and such
                  election  shall  be made at the  time  and in the  manner
                  prescribed by Ashland,  from time to time,  provided that
                  the election is made before the  Participant's  Effective
                  Retirement Date. Such election, including the designation

of any contingent annuitant or alternate recipient under Sections 5.04(b)(4) or (5), shall be irrevocable except as otherwise set forth herein. Notwithstanding anything in the foregoing to the contrary, any Participant who makes an election under Section 5.04(b)(2) shall make such election by the earlier of -
(1) the date six months prior to Participant's Effective Retirement Date; or
(2) the December 31 immediately preceding the Participant's Effective Retirement Date. Such deferral election shall be made in the manner prescribed by Ashland, from time to time, and shall be irrevocable as of the applicable time identified under Sections 5.04(a)(1) or (2). Until the time at which an election becomes irrevocable, a Participant shall be able to change it.
(b) OPTIONAL FORMS OF PAYMENT
(1) LUMP SUM OPTION Except for the Transition Participants described in Section 1.2, the normal form of distribution for the benefit provided by the Plan shall be a single lump sum payment, computed under the applicable provisions of Article V. A Participant's benefit is paid as a lump sum on the Effective Retirement Date (or as soon thereafter as reasonably possible), unless a different election is made by the Participant pursuant to rules in the Plan and rules prescribed by Ashland. A Transition Participant may elect to receive the benefit under Article V as a lump sum distribution. A lump sum benefit payable under the Plan to a Transition Participant shall be computed on the basis of the actuarially equivalent present value of such Transition Participant's benefit under Article V based upon such actuarial assumptions as determined by the Committee. Such lump sum shall be payable within thirty (30) days following the later of the Transition Participant's Effective Retirement Date, or at such later date as Ashland or its delegate may determine, in its sole discretion.
(2) LUMP SUM DEFERRAL OPTION A Participant (including a Transition Participant) who is eligible to receive a lump sum distribution under 5.04(b)(1) shall be able to elect to defer all or a portion of the receipt of

the elected lump sum (in increments of such percentage or such amount as may be prescribed by Ashland or its delegatee, from time to time), by having the obligation to distribute such amount transferred to the Ashland Inc. Deferred Compensation Plan to be held thereunder in a notional account and paid pursuant to the applicable provisions of such Plan, as they may be amended from time to time; provided, however, that the election to defer such distribution shall be made at the time and in the manner prescribed in Section 5.04(a)(1) and (2).
(3) SINGLE LIFE ANNUITY A Participant or Transition Participant may elect to have such benefit paid in the form of equal monthly payments for and during such Participant's life, with such payments ending at such Participant's death. Payments under this option shall be actuarially equivalent to the benefit provided under Section 5.01 or 5.02, whichever is applicable. In the case of a Transition Participant, actuarial equivalence is determined on the basis of the applicable actuarial assumptions and other relevant provisions used for the same in the Pension Plan. In the case of all other Participants, actuarial equivalence is determined using the assumptions identified in Section 5.01(e).
(4) JOINT AND SURVIVOR INCOME OPTION A Participant or Transition Participant may elect to receive an actuarially reduced benefit payable monthly during the Participant's lifetime with payments to continue after his or her death to the person he designates (hereinafter called "contingent annuitant"), in an amount equal to (1) 100% of such actuarially reduced benefit, (2) 66 2/3% of such actuarially reduced benefit, or (3) 50% of such actuarially reduced benefit. Benefit payments under this option shall terminate with the monthly payment for the month in which occurred the date of death of the later to die of the Participant and his or her contingent annuitant. The following additional limitations and conditions apply to this option:

(A) The contingent annuitant shall be designated by
the Participant in writing in such form and at
such time as Ashland may from time to time
prescribe. Before the Participant's Effective
Retirement

Date, the Participant may change the contingent annuitant elected.

(B) In the event of the death of the contingent
annuitant prior to the date as of which the
election is irrevocable, the Participant's
selection of this option shall be void and the
Participant may change the contingent annuitant
or change the option elected, subject to the
applicable limitations and conditions applied
to elections for the options described under
5.04(a)(1) and (2).

(C) In the case of a Transition Participant, actuarial equivalence is determined on the basis of the applicable actuarial assumptions and other relevant provisions used for the same in the Pension Plan. In the case of all other Participants, actuarial equivalence is determined using the assumptions identified in
Section 5.01(e).
(5) PERIOD CERTAIN INCOME OPTION A Participant or Transition Participant may elect to receive an actuarially reduced benefit payable monthly during his or her lifetime and terminating with the monthly payment for the month in which his or her death occurs, with the provision that not less than a total of 120 monthly payments shall be made in any event to him or her and/or the person designated by him or her to receive payments under this sub-paragraph (5) in the event of his or her death (hereinafter called "alternate recipient"). If a Participant and his or her alternate recipient die after the Effective Retirement Date, but before the total specified monthly payments have been made to such Participant and/or his or her alternate recipient, the commuted value of the remaining unpaid payments shall be paid in a lump sum to the estate of the later to die of the Participant or his or her alternate recipient. The following additional limitations and conditions shall apply to this option:

(A) The alternate recipient shall be designated in
writing by the Participant in such form and at
such time as Ashland may from time to time
prescribe. The designation of an alternate
recipient under this sub-paragraph (5) is
irrevocable after the Effective Retirement
Date, provided, however, a Participant may
designate

a new alternate recipient if the one first designated dies before the Participant and after the Effective Retirement Date.

(B) In the event of the death of the alternate
recipient prior to the date as of which the
election is irrevocable, the Participant's
selection of this option shall be void and the
Participant may change the alternate recipient
or change the option elected, subject to the
applicable limitations and conditions applied
to elections for the options described under
5.04(a)(1) and (2).

(C) Actuarial equivalence for Transition Participants under this sub-paragraph (5) shall be determined on the basis of the applicable actuarial assumptions and other relevant provisions used for the same in the Pension Plan. In the case of all other Participants, actuarial equivalence is determined using the assumptions identified in Section 5.01(e).
5.05. PAYMENT OF SMALL AMOUNTS Unless a Transition Participant or Participant elects to receive his or her benefit in a lump sum as provided in
Section 5.04, in the event a monthly benefit under this Plan, payable to either a Participant or to his or her contingent annuitant, alternate recipient or surviving spouse, is too small (in the sole judgment of Ashland) to be paid monthly, such benefit may be paid quarterly, semi-annually, or annually, as determined by Ashland to be administratively convenient.
5.06. SURVIVING BENEFITS
(a) Except as otherwise provided in Section 5.04 of this Plan, in the event a Participant receiving Annual Retirement Income benefits dies after his or her Effective Retirement Date, no additional benefits shall be payable by Ashland under this Plan to such deceased Participant's beneficiaries, survivors, or estate.
(b) If a Participant while an Employee dies while in active service with Ashland
(1) at a time when the Participant is a Level I or II participant under the Incentive Compensation Plan, regardless of whether the Participant is vested; or
(2) after becoming vested and eligible to receive a distribution but for not having incurred a Termination of Employment but prior to making an election

pursuant to Section 5.04(a) and said Participant is a Level I -V participant under the Incentive Compensation Plan; then such Employee shall be deemed:
(i) to have elected to receive his or her benefits in the form of the 100% Joint & Survivor retirement income option and to have designated his or her spouse as the beneficiary thereunder; and
(ii) to have commenced such benefit one (1) day prior to the date of the Employee's death.

The surviving spouse entitled to a benefit under this paragraph (b) may commence the benefit as of the first day of a month. Such benefit shall be distributed as an actuarially equivalent lump sum using the assumptions for actuarial equivalence in Section 5.01(e). The benefit must commence as soon as possible after the deceased Participant would have attained age 62. If the Participant were 62 or older at death, then the distribution to the surviving spouse must commence as soon as possible. Distributions are subject to rules prescribed by Ashland from time to time.
(c) In the event a Participant dies after making an election under Section 5.04(a) but prior to his or her

                 Effective  Retirement Date, then such Participant shall be
                 deemed to have commenced  distributions  one (1) day prior
                 to the date of death and payment  shall be made under this
                 Plan in accordance with the Participant's election.
5.07     PARTICIPATION IN OTHER BENEFITS
         After the Effective Retirement Date, a Participant may continue to
         participate   in  the  benefits   offered  by  Ashland  to  former
         Employee's and retiree's  similarly  situated to the  Participant.
         Ashland  reserves all rights to change those benefits at any time,
         including  the  right  to  terminate  them.  Except  as  otherwise
         expressly   provided  in  this  Plan,   a   Participant's   active
         participation  in all  employee  benefit  programs  maintained  by
         Ashland  derived  from his or her  employment  status with Ashland
         shall be discontinued.

completely vested in his or her benefit. Consistent with the applicable terms of Sections 5.01 and 5.02, such a Participant may, in his or her sole discretion, elect to retire prior to Age 62.
In addition, Ashland (or its successor after the Change in Control) shall reimburse an Employee for legal fees, fees of other experts and expenses incurred by such Employee if he or she is required to, and is successful in, seeking to obtain or enforce any right to payment pursuant to the Plan. In the event that it shall be determined that such Employee is properly entitled to the payment of benefits hereunder, such Employee shall also be entitled to interest thereon payable in an amount equivalent to the prime rate of interest (quoted by Citibank, N.A. as its prime commercial lending rate on the latest date practicable prior to the date of the actual commencement of payments) from the date such payment(s) should have been made to and including the date it is made. Notwithstanding any provision of this Plan to the contrary, the provisions of this Plan or any other plan of Ashland Inc. having a material impact on the benefits payable under this Plan may not be amended after a Change in Control occurs without the written consent of a majority of the Board who were directors prior to the Change in Control.

ARTICLE VII.      MISCELLANEOUS.
-----------       -------------
7.01     The obligations of Ashland hereunder constitute merely the promise
         of  Ashland to make the  payments  provided  for in this Plan.  No
         employee,  his or her spouse or the estate of either of them shall
         have, by reason of this Plan, any right,  title or interest of any
         kind  in  or to  any  property  of  Ashland.  To  the  extent  any
         Participant  has a right to receive  payments  from Ashland  under
         this Plan,  such right  shall be no greater  than the right of any
         unsecured general creditor of Ashland.
7.02     Full power and  authority to construe,  interpret  and  administer
         this  Plan  shall be vested  in the  Board or its  delegate.  This
         includes,   without  limitation,   the  ability  to  make  factual
         determinations,  construe and  interpret  provisions  of the Plan,
         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 Board or its delegate shall be final,  conclusive
         and binding  upon all  parties,  provided,  however,  that no such
         decision may adversely  affect the rights of any  Participant  who
         has been

         approved for participation in the Plan under the terms of
         Section 3.03 and whose  benefit is  determined  under the terms of
         Section 5.01(d) or Section 5.02(b).
7.03     This Plan shall be binding upon Ashland and any  successors to the
         business  of  Ashland  and  shall  inure  to  the  benefit  of the
         Participants  and their  beneficiaries,  if applicable.  Except as
         otherwise  provided in Article VI, the Board or its delegate  may,
         at any time, amend this Plan,  retroactively or otherwise,  but no
         such amendment may adversely  affect the rights of any Participant
         who has been approved for  participation in the Plan except to the
         extent that such action is required by law.
7.04     Except as  otherwise  provided in Section  5.04 and in  connection
         with a division of property under a domestic relations  proceeding
         under state law, no right or  interest of the  Participants  under
         this Plan shall be subject to involuntary  alienation,  assignment
         or transfer of any kind. A Participant may voluntarily  assign the
         Participant's  rights  under the Plan.  Ashland,  the  Board,  the
         Committee and any of their  delegates  shall not review,  confirm,
         guarantee  or  otherwise  comment  on the  legal  validity  of any
         voluntary  assignment.  Ashland  and  its  delegates  may  review,
         provide  recommendations  and approve submitted domestic relations
         orders using  procedures  similar to those that apply to qualified
         domestic  relations  orders  under  the  qualified  pension  plans
         sponsored by Ashland.
7.05     This Plan shall be governed for all purposes by the laws of the
         Commonwealth of Kentucky.
7.06     If any term or provision of this Plan is determined by a court or other
         appropriate  authority to be invalid,  void, or unenforceable  for
         any reason, the remainder of the terms and provisions of this Plan
         shall  remain  in full  force  and  effect  and shall in no way be
         affected, impaired or invalidated.
7.07     (a) Initial  Claim - Notice of Denial.  If any claim for  benefits
         (within the meaning of section 503 of ERISA) is denied in whole or
         in part,  Ashland  (which  shall  include  Ashland or its delegate
         throughout this Section 7.07) will provide written notification of
         the denied claim to the Participant or beneficiary, as applicable,
         (hereinafter  referred to as the claimant) in a reasonable period,
         but not later than 90 days after the claim is received. The 90-day
         period can be extended  under  special  circumstances.  If special
         circumstances  apply, the claimant will be notified before the end
         of the 90-day period after the claim was received. The notice will
         identify  the  special  circumstances.  It will

         also  specify  the expected date of the decision.  When special
         circumstances apply, the  claimant  must be notified of the decision
         not later than 180 days after the claim is received.

         The written decision will include:

                 (i)   The reasons for the denial.
                 (ii)  Reference to the Plan provisions on which the denial
                       is based.  The reference need not be to page numbers
                       or to section headings or titles. The reference only
                       needs to  sufficiently  describe the  provisions  so
                       that the  provisions  could be  identified  based on
                       that description.
                 (iii) A description of additional materials or information
                       needed to process  the claim.  It will also  explain
                       why those materials or information are needed.
                 (iv)  A description of the procedure to appeal the denial,
                       including  the  time  limits   applicable  to  those
                       procedures. It will also state that the claimant may
                       file a  civil  action  under  section  502 of  ERISA
                       (ERISA  - ss.29  U.S.C.  1132).  The  claimant  must
                       complete the Plan's appeal procedure before filing a
                       civil action in court.

         If the  claimant  does not receive  notice of the  decision on the
         claim  within the  prescribed  time  periods,  the claim is deemed
         denied.  In that event the  claimant  may proceed  with the appeal
         procedure described below.
(b)      Appeal of Denied  Claim.  The claimant  may file a written  appeal of a
         denied  claim with  Ashland in such manner as  determined  from time to
         time.  Ashland is the named  fiduciary  under ERISA for purposes of the
         appeal of the denied claim.  Ashland may delegate its authority to rule
         on  appeals  of denied  claims  and any  person or persons or entity to
         which such authority is delegated may re-delegate  that authority.  The
         appeal must be sent at least 60 days after the  claimant  received  the
         denial of the  initial  claim.  If the appeal is not sent  within  this
         time, then the right to appeal the denial is waived.

         The claimant may submit materials and other  information  relating
         to the claim. Ashland will appropriately  consider these materials
         and other  information,  even if they were not part of the initial
         claim  submission.  The claimant will also be given reasonable and
         free  access  to  or  copies  of  documents,   records  and  other
         information relevant to the claim.

         Written  notification  of the  decision  on  the  appeal  will  be
         delivered to the claimant in a  reasonable  period,  but not later
         than 60 days after the appeal is received.  The 60-day  period can
         be extended under special circumstances.  If special circumstances
         apply,  the claimant will be notified before the end of the 60-day
         period after the appeal was received. The notice will identify the
         special  circumstances.  It will also specify the expected date of
         the decision.  When special circumstances apply, the claimant must
         be  notified  of the  decision  not later  than 120 days after the
         appeal is received.

         Special  rules  apply if Ashland  designates  a  committee  as the
         appropriate  named  fiduciary for purposes of deciding  appeals of
         denied claims.  For the special rules to apply, the committee must
         meet regularly on at least a quarterly basis.

         When the special rules for committee  meetings  apply the decision
         on the  appeal  must  be  made  not  later  than  the  date of the
         committee meeting immediately following the receipt of the appeal.
         If the  appeal is  received  within 30 days of the next  following
         meeting, then the decision must not be made later than the date of
         the second committee meeting following the receipt of the appeal.

         The period for making the  decision  on the appeal can be extended
         under special  circumstances.  If special circumstances apply, the
         claimant will be notified by the committee or its delegate  before
         the end of the otherwise  applicable period within which to make a
         decision. The notice will identify the special  circumstances.  It
         will also specify the expected date of the decision.  When special
         circumstances apply, the claimant must be notified of the decision
         not later than the date of the third  committee  meeting after the
         appeal is received.

         In any event,  the claimant will be provided written notice of the
         decision within a reasonable period after the meeting at which the
         decision is made. The  notification  will not be later than 5 days
         after the meeting at which the decision is made.

         Whether the  decision on the appeal is made by a committee or not,

a denial of the appeal will include:

(i) The reasons for the denial.
(ii) Reference to the Plan provisions on which the denial is based. The reference need not be to page numbers or to section headings or titles. The reference only needs to sufficiently describe the provisions so that the provisions could be identified based on that description.
(iii) A statement that the claimant may receive free of charge reasonable access to or copies of documents, records and other information relevant to the claim.
(iv) A description of any voluntary procedure for an additional appeal, if there is such a procedure. It will also state that the claimant may file a civil action under section 502 of ERISA (ERISA - ss.29 U.S.C. 1132).

If the claimant does not receive notice of the decision on the appeal within the prescribed time periods, the appeal is deemed denied. In that event the claimant may file a civil action in court. The decision regarding a denied claim is final and binding on all those who are affected by the decision. No additional appeals regarding that claim are allowed.

IN WITNESS WHEREOF, this amendment and restatement of the Plan is executed this 22nd day of August, 2003.

ATTEST:                                 ASHLAND INC.



/s/ Richard P. Thomas                   By:  /s/ Susan B. Esler
-----------------------------------        ----------------------------------
       Secretary                            Vice President Human Resources -
                                            Programs and Services

AMENDMENT NO. 1 TO
ASHLAND INC. SUPPLEMENTAL EARLY RETIREMENT PLAN
FOR CERTAIN EMPLOYEES
JULY 1, 2003 AND AS AMENDED THEREAFTER

WHEREAS, effective for compensation deferred to calendar year 2005 and thereafter, there are new rules governing the tax consequences of such deferrals;

WHEREAS, the Company desires to comply with such new rules;

NOW, THEREFORE, effective December 31, 2004, the Plan is frozen and no additional benefits will accrue hereunder. Benefits accrued hereunder through December 31, 2004 shall remain subject to all of the rules, terms and conditions in effect for the Plan as of December 31, 2004.

IN WITNESS WHEREOF, this Amendment to the Plan is executed this 20th day of December, 2004.

ATTEST:                                   ASHLAND INC.


/s/ David L. Hausrath                   By:  /s/ Susan B. Esler
------------------------------               ------------------------------
Secretary                                    Vice President, Human Resources

EXHIBIT 10.3

ASHLAND INC.
DEFERRED COMPENSATION PLAN
(AMENDED AND RESTATED AS OF APRIL 1, 2003)

1. PURPOSE

The purpose of this Ashland Inc. Deferred Compensation Plan (the "Plan"), is to provide eligible key employees of the Company with an opportunity to defer compensation to be earned by them from the Company as a means of saving for retirement or other future purposes.

2. DEFINITIONS

The following definitions shall be applicable throughout the Plan:

(a) "Accounting Date" means the Business Day on which a calculation concerning a Participant's Compensation Account is performed, or as otherwise defined by the Committee.

(b) "Beneficiary" means the person(s) designated by the Participant in accordance with Section 12, or if no person(s) is/are so designated, the estate of a deceased Participant.

(c) "Board" means the Board of Directors of Ashland Inc. or its designee.

(d) "Business Day" means a day on which the New York Stock Exchange is open for trading activity.

(e) "Change in Control" shall be deemed to occur (1) upon the approval of the shareholders of the Company (or if such approval is not required, upon the approval of the Board) of (A) any consolidation or merger of the Company, other than a consolidation or merger of the Company into or with a direct or indirect wholly-owned subsidiary, in which the Company is not the continuing or surviving corporation or pursuant to which shares of Common Stock would be converted into cash, securities or other property other than a merger in which the holders of Common Stock immediately prior to the merger will have the same proportionate ownership of common stock of the surviving corporation immediately after the merger, (B) any sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company, provided, however, that no sale, lease, exchange or other transfer of all or substantially all the assets of the Company shall be deemed to occur unless assets constituting 80% of the total assets of the Company are transferred pursuant to such sale, lease, exchange or other transfer, or
(C) adoption of any plan or proposal for the liquidation or dissolution of the Company, (2) when any "person" (as defined in Section 3(a)(9) or 13(d) of the Exchange Act), other than Ashland Inc. or any subsidiary or employee benefit plan or trust maintained by Ashland Inc. or any of its subsidiaries, shall become the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 15% of the Common Stock outstanding at the time, without the approval of the Board, or
(3) if at any time during a period of two consecutive years, individuals who at the beginning of such period constituted the Board shall cease for any reason to constitute at least a majority thereof, unless the election or the nomination for election by the Company's shareholders of each new director during such two-year period was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such two-year period. Notwithstanding the foregoing, any transaction, or series of transactions, that shall result in the disposition of the Company's interest in Marathon Ashland Petroleum LLC, including without limitation any transaction arising out of that certain Put/Call, Registration Rights and Standstill Agreement dated January 1, 1998 among Marathon Oil Company, USX Corporation, the Company and Marathon Ashland Petroleum LLC, as amended from time to time, shall not be deemed to constitute a Change in Control.

(f) "Committee" means the Personnel and Compensation Committee of the Board or its designee.

(g) "Common Stock" means the common stock, $1.00 par value, of Ashland Inc.

(h) "Common Stock Fund" means that investment option, approved by the Committee, in which a Participant's Compensation Account may be deemed to be invested and may earn income based on a hypothetical investment in Common Stock.

(i) "Company" means Ashland Inc., its divisions, subsidiaries and affiliates.

(j) "Compensation" means any employee compensation determined by the Committee to be properly deferrable under the Plan.

(k) "Compensation Account(s)" means the Retirement Account and/or the In-Service Account(s).

(l) "Corporate Human Resources" means the Corporate Human Resources Department of the Company.

(m) "Credit Date" means the date on which Compensation would otherwise have been paid to the Participant or in the case of the Participant's designation of investment option changes, within three Business Days after the Participant's designation is received by Corporate Human Resources, or as otherwise designated by the Committee.

(n) "Deferred Compensation" means the Compensation elected by the Participant to be deferred pursuant to the Plan.

(o) "Election" means a Participant's delivery of a written notice of election to defer payment of all or a portion of his or her Compensation either until retirement, Termination, death or such other time as further provided by the Committee or the Company.

(p) "Employee" means a full-time, regular salaried employee (which term shall be deemed to include officers) of the Company, its present and future subsidiary corporations as defined in Section 424 of the Internal Revenue Code of 1986, as amended or its affiliates.

(q) "Employee Savings Plan" means the Ashland Inc. Employee Savings Plan, as it now exists or as it may hereafter be amended.

(r) "Excess Payments" means payments made to a Participant pursuant to the Plan and the Excess Plan.

(s) "Excess Plan" means the Ashland Inc. Nonqualified Excess Benefit Pension Plan, as it now exists or as it may hereafter be amended.

(t) "Exchange Act" means the Securities Exchange Act of 1934, as amended.

(u) "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.

(v) "Fiscal Year" means that annual period commencing October 1 and ending the following September 30.

(w) "In-Service Account" means the account(s) to which the Participant's Deferred Compensation is credited and from which, pursuant to
Section 11, distributions are made.

(x) "Participant" means an Employee selected by the Committee to participate in the Plan and who has elected to defer payment of all or a portion of his or her Compensation under the Plan.

(y) "Plan" means this Ashland Inc. Deferred Compensation Plan as it now exists or as it may hereafter be amended.

(z) "Retirement Account" means the account(s) to which the Participant's Deferred Compensation is credited and from which, pursuant to
Section 11, distributions are made.

(aa) "SERP" means the Tenth Amended and Restated Ashland Inc. Supplemental Early Retirement Plan for Certain Key Executive Employees, as it now exists or as it may hereafter be amended.

(bb) "SERP Payments" means payments made to a Participant pursuant to the Plan and the SERP.

(cc) "Stock Unit(s)" means the share equivalents credited to the Common Stock Fund of a Participant's Compensation Account pursuant to
Section 6.

(dd) "Termination" means termination of services as an Employee for any reason other than retirement.

3. SHARES; ADJUSTMENTS IN EVENT OF CHANGES IN CAPITALIZATION

(a) Shares Authorized for Issuance. There shall be reserved for issuance under the Plan 500,000 shares of Common Stock, subject to adjustment pursuant to subsection (c) below.

(b) Units Authorized for Credit. The maximum number of Stock Units that may be credited to Participants' Compensation Accounts under the Plan is 1,500,000, subject to adjustment pursuant to subsection (c) below.

(c) Adjustments in Certain Events. In the event of any change in the outstanding Common Stock of the Company by reason of any stock split, share dividend, recapitalization, merger, consolidation, reorganization, combination, or exchange or reclassification of shares, split-up, split-off, spin-off, liquidation or other similar change in capitalization, or any distribution to common shareholders other than cash dividends, the number or kind of shares or Stock Units that may be issued or credited under the Plan shall be automatically adjusted so that the proportionate interest of the Participants shall be maintained as before the occurrence of such event. Such adjustment shall be conclusive and binding for all purposes of the Plan.

4. ELIGIBILITY

The Committee shall have the authority to select from management and/or highly compensated Employees those Employees who shall be eligible to participate in the Plan; provided, however, that employees and/or retirees who have elected to defer an amount into this Plan from another plan sponsored or maintained by Ashland Inc., the terms of which allowed such employee or retiree to make such a deferral election into this Plan, shall be considered to be eligible to participate in this Plan.

5. ADMINISTRATION

Full power and authority to construe, interpret and administer the Plan shall be vested in the Company and the Committee. This power and authority includes, but is not limited to, selecting Compensation eligible for deferral, establishing deferral terms and conditions and adopting modifications, amendments and procedures as may be deemed necessary, appropriate or convenient by the Committee. Decisions of the Company and the Committee shall be final, conclusive and binding upon all parties. Day-to-day administration of the Plan shall be the responsibility of Corporate Human Resources.

6. PARTICIPANT ACCOUNTS

Upon election to participate in the Plan, there shall be established a Retirement Account and/or In-Service Account, as designated by the Participant to which there shall be credited any Deferred Compensation, as of each Credit Date. Each such Compensation Account shall be credited (or debited) on each Accounting Date with income (or loss) based upon a hypothetical investment in any one or more of the investment options available under the Plan, as prescribed by the Committee for the particular compensation credited, which may include a Common Stock Fund, as elected by the Participant under the terms of Section 10.

7. WITHDRAWAL - FINANCIAL HARDSHIP

Upon the written request of a Participant or a Participant's legal representative and a finding that continued deferral will result in an unforeseeable financial emergency to the Participant, the Committee or the Company (each in its sole discretion) may authorize (a) the payment of all or a part of a Participant's Compensation Account in a single installment prior to his or her ceasing to be a Participant, or (b) the acceleration of payment of any multiple installments thereof. It is intended that the Committee's determinations as to whether the Participant has suffered an "unforeseeable financial emergency" shall be made consistent with the requirements under Section 457(d) of the Internal Revenue Code.

8. WITHDRAWAL - GOOD REASON

(a) Availability of Withdrawal Prior to Retirement. Upon the written request of a Participant or a Participant's legal representative and a finding that good reason exists for early withdrawal of some or all of the Participant's account balance, the Committee, in its sole discretion, may authorize the payment of all or a part of a Participant's Compensation Account in a single installment prior to his or her ceasing to be a Participant, provided the conditions specified in Sections 8(b), 8(c), 8(d) and 8(e) hereof are satisfied. It is intended that the Committee shall deem requests for early withdrawal for purposes similar to the following to constitute "good reason": (a) the purchase of a new home; (b) education expenses; or (c) charitable contributions.

(b) Forfeiture Penalty. In the event of a withdrawal pursuant to
Section 8(a), the Participant shall forfeit from such Compensation Account an amount equal to 5% of the amount of the withdrawal. The forfeited amount shall be deducted from the Compensation Account prior to giving effect to the requested withdrawal. Neither the Participant nor the Participant's Beneficiary shall have any right or claim to the forfeited amount, and the Company shall have no obligation whatsoever to the Participant, the Participant's Beneficiary or any other person with regard to the forfeited amount.

(c) Minimum Withdrawal. In no event shall the amount withdrawn in accordance with Section 8(a) be less than $50,000, or the entire balance of the Participant's Compensation Account immediately prior to the withdrawal, whichever is less. The withdrawal must be taken in increments of $25,000, except to the extent that the Participant's Compensation Account balance is less than $50,000 immediately prior to the withdrawal, and, in such an event, the Participant must withdraw the entire Compensation Account balance.

(d) Suspension from Deferrals. In the event of a withdrawal pursuant to Section 8(a), a Participant who is otherwise eligible to make deferrals of Compensation under the Plan shall be prohibited from making such deferrals with respect to the remainder of the current Fiscal Year and the Fiscal Year of the Plan immediately following the Fiscal Year of the Plan during which the withdrawal was made, and any Election previously made by the Participant with respect to deferrals of compensation for such Fiscal Years of the Plan shall be void and of no effect; however, during this period of suspension Participants shall be allowed to continue to defer enough compensation into the Plan to allow them to receive the company match they would otherwise receive under the Employee Savings Plan but for the dollar limitations for allowable contributions to such plan.

(e) Suspension from Withdrawals. Participants shall be prohibited from requesting a second withdrawal under Section 8(a) for a period of 60 months following any withdrawal under Section 8(a).

9. WITHDRAWAL - ACCELERATED DISTRIBUTION

(a) Availability of Withdrawal Prior to Retirement. The Participant or the Participant's Beneficiary who is receiving installment payments under the Plan may elect, in writing, to withdraw all or a portion of a Participant's Compensation Account at any time prior to the time such Compensation Account otherwise becomes payable under the Plan, provided the conditions specified in Sections 9(c), 9(d) and 9(e) hereof are satisfied.

(b) Acceleration of Periodic Distributions. Upon the written notice of the Participant or the Participant's Beneficiary who is receiving installment payments under the Plan, the Participant or Participant's Beneficiary may elect to have all or a portion of the remaining installments distributed in the form of an immediately payable lump sum, provided the conditions specified in Section 9(c) and 9(e) hereof are satisfied.

(c) Forfeiture Penalty. In the event of a withdrawal pursuant to
Section 9(a), or an accelerated distribution pursuant to Section 9(b), the Participant shall forfeit from such Compensation Account an amount equal to 10% of the amount of the withdrawal or accelerated distribution, as the case may be. The forfeited amount shall be deducted from the Compensation Account prior to giving effect to the requested withdrawal or acceleration. Neither the Participant nor the Participant's Beneficiary shall have any right or claim to the forfeited amount, and the Company shall have no obligation whatsoever to the Participant, the Participant's Beneficiary or any other person with regard to the forfeited amount.

(d) Minimum Withdrawal. In no event shall the amount withdrawn in accordance with Section 9(a) be less than 25% of the amount credited to such Participant's Compensation Account immediately prior to the withdrawal.

(e) Suspension from Deferrals. In the event of a withdrawal pursuant to Section 9(a) or 9(b), a Participant who is otherwise eligible to make deferrals of Compensation under this Plan shall be prohibited from making such deferrals with respect to the remainder of the current Fiscal Year and the Fiscal Year of the Plan immediately following the Fiscal Year of the Plan during which the withdrawal was made, and any Election previously made by the Participant with respect to deferrals of Compensation for such Fiscal Years of the Plan shall be void and of no effect; however, during this period of suspension, Participants shall be allowed to continue to defer enough compensation into the Plan to allow them to receive the company match they would otherwise receive under the Employee Savings Plan but for the dollar limitations for allowable contributions to such plan.

10. MANNER OF ELECTION

(a) General. The Company or the Committee shall determine the timing of the filing of the appropriate Election forms. An effective Election may not be revoked or modified except as otherwise determined by the Company or the Committee or as stated herein. In addition to the provisions contained in this Plan, any deferrals of SERP Payments or Excess Payments must be in accordance with the terms of the SERP or the Excess Plan.

(b) Investment Alternatives -- Existing Balances. A Participant may elect to change an existing selection as to the investment alternatives in effect with respect to an existing Compensation Account (in increments prescribed by the Committee or the Company) as often, and with such restrictions, as determined by the Committee or by the Company.

(c) Change of Beneficiary. A Participant may, at any time, elect to change the designation of a Beneficiary in accordance with Section 12 hereof.

11. DISTRIBUTION

(a) Retirement Account. In accordance with the Participant's Election and within the guidelines established by the Committee or the Company, a Participant's Retirement Account shall be distributed in cash or shares of Common Stock (or a combination of both). If no Election is made by a Participant as to the distribution or form of payment of his or her Retirement Account, upon the earlier of death or retirement such account shall be paid in cash or shares of Common Stock (or a combination of both) in lump sum. The entire Retirement Account must be paid out within fifteen years following the date of the earlier of the Participant's death or retirement.

(b) In-Service Account. In accordance with the Participant's Election and within the guidelines established by the Committee or the Company, Deferred Compensation credited to a Participant's In-Service Account shall be distributed in cash or shares of Common Stock (or a combination of both). A Participant may make different Elections with respect to the applicable distribution periods for different deferral cycles in the In-Service Accounts.

(c) Termination. Notwithstanding the foregoing, in the event of a Participant's Termination, the Company reserves the right to distribute the Participant's Compensation Account at such time and in such manner as deemed appropriate.

(d) Request to Change in Distribution of Compensation Account. A Participant will be allowed to request a change in his or her Election as to the distribution of Deferred Compensation of his or her Retirement Account for all amounts previously deferred pursuant to such Election. Any such request shall not be effective without the approval of the Committee or the Company, which approval shall be in their sole discretion. Such request must be made by the earlier of:

(1) the date six months prior to the first day of the month following such Participant's retirement; or

(2) the December 31 immediately preceding the first day of the month following such Participant's retirement.

A Participant may not request a change to his or her Election as to the distribution of Deferred Compensation in his or her In-Service Account(s) except as otherwise set forth in Sections 7, 8 and 9.

12. BENEFICIARY DESIGNATION

A Participant may designate one or more persons (including a trust) to whom or to which payments are to be made if the Participant dies before receiving distribution of all amounts due hereunder. A designation of Beneficiary will be effective only after the signed Election is filed with Corporate Human Resources while the Participant is alive and will cancel all designations of Beneficiary signed and filed earlier. If the Participant fails to designate a Beneficiary as provided above or if all of a Participant's Beneficiaries predecease him or her and he or she fails to designate a new Beneficiary, the remaining unpaid amounts shall be paid in one lump sum to the estate of such Participant. If all Beneficiaries of the Participant die after the Participant but before complete payment of all amounts due hereunder, the remaining unpaid amounts shall be paid in one lump sum to the estate of the last to die of such Beneficiaries.

13. CHANGE IN CONTROL

Notwithstanding any provision of this Plan to the contrary, in the event of a Change in Control, each Participant in the Plan shall receive an automatic lump sum cash distribution of all amounts accrued in the Participant's Compensation Account not later than fifteen (15) days after the date of the Change in Control. For this purpose, the balance in the portion of a Participant's Compensation Account invested in the Common Stock Fund shall be determined by multiplying the number of Stock Units by the higher of (a) the highest Fair Market Value on any date within the period commencing 30 days prior to such Change in Control, or (b) if the Change in Control of the Company occurs as a result of a tender or exchange offer or consummation of a corporate transaction, then the highest price paid per share of Common Stock pursuant thereto. Any consideration other than cash forming a part or all of the consideration for Common Stock to be paid pursuant to the applicable transaction shall be valued at the valuation price thereon determined by the Board.

In addition, the Company shall reimburse a Participant for the legal fees and expenses incurred if the Participant is required to seek to obtain or enforce any right to distribution. In the event that it is determined that such Participant is properly entitled to a cash distribution hereunder, such Participant shall also be entitled to interest thereon payable in an amount equivalent to the Prime Rate of Interest quoted by Citibank, N.A. as its prime commercial lending rate on the subject date from the date such distribution should have been made to and including the date it is made. Notwithstanding any provision of this Plan to the contrary, this Section 13 may not be amended after a Change in Control occurs without the written consent of a majority in number of Participants.

14. INALIENABILITY OF BENEFITS

The interests of the Participants and their Beneficiaries under the Plan may not in any way be voluntarily or involuntarily transferred, alienated or assigned, nor subject to attachment, execution, garnishment or other such equitable or legal process. A Participant or Beneficiary cannot waive the provisions of this Section 14.

15. GOVERNING LAW

The provisions of this plan shall be interpreted and construed in accordance with the laws of the Commonwealth of Kentucky, except to the extent preempted by Federal law.

16. AMENDMENTS

The Committee may amend, alter or terminate this Plan at any time without the prior approval of the Board; provided, however, that the Committee may not, without approval by the Board and the shareholders:

(a) increase the number of securities that may be issued under the Plan (except as provided in Section 3(c));

(b) materially modify the requirements as to eligibility for participation in the Plan; or

(c) otherwise materially increase the benefits accruing to Participants under the Plan.

17. EFFECTIVE DATE

The Plan was approved by the shareholders of the Company on January 26, 1995, and originally became effective as of October 1, 1994, and has been restated in this document effective as of April 1, 2003.

AMENDMENT NO. 1 TO
ASHLAND INC. DEFERRED COMPENSATION PLAN
(Amended and Restated as of April 1, 2003)

WHEREAS, effective for compensation deferred to calendar year 2005 and thereafter, there are new rules governing the tax consequences of such deferrals;

WHEREAS, the Company desires to comply with such new rules;

NOW, THEREFORE, effective December 31, 2004, the Plan is frozen and will not accept, maintain or administer any amounts that may be deferred by a Participant thereunder to calendar years after 2004 and beyond. Benefits maintained and administered under this Plan shall remain subject to all of the rules, terms and conditions in effect hereunder as of December 31, 2004.

IN WITNESS WHEREOF, this Amendment to the Plan is executed this 3rd day of December, 2004.

ATTEST:                                      ASHLAND INC.

/s/ David L. Hausrath                        By:  /s/ Susan B. Esler
-----------------------------                ------------------------------
Secretary                                    Vice President, Human Resources

EXHIBIT 10.4

ASHLAND INC.
DEFERRED COMPENSATION PLAN FOR EMPLOYEES (2005)
(EFFECTIVE AS OF JANUARY 1, 2005)

1. PURPOSE

The Ashland Inc. Deferred Compensation Plan for Employees (2005) (the "Plan") is maintained primarily for the purpose of providing an opportunity to defer compensation for retirement or other future purposes to a select group of management or highly compensated employees (including former employees that met these criteria when employed). The obligations of the Company hereunder constitute a mere promise to make the payments provided for in this Plan. No employee, his or her spouse or the estate of either of them shall have, by reason of this Plan, any right, title or interest of any kind in or to any property of the Company. To the extent any Participant has a right to receive payments from the Company under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Company.

This Plan is a replacement of the prior Ashland Inc. Deferred Compensation Plan amended and restated as of April 1, 2003 (the "Former Plan"). Compensation deferred under the Former Plan shall remain subject to all of the rules, terms and conditions in effect under the Former Plan as of December 31, 2004. For this purpose, the Compensation deferred under the Former Plan shall include all income, gains and losses connected to such Compensation.

The rules, terms and conditions of this Plan shall apply to Compensation deferred after December 31, 2004, including any Election to defer such Compensation made in 2004. For this purpose, the Compensation deferred after December 31, 2004 shall include all income, gains and losses connected to such Compensation.

2. DEFINITIONS

The following definitions shall be applicable throughout the Plan:

(a) "Accounting Date" means the Business Day on which a calculation concerning a Participant's Compensation Account is performed, or as otherwise defined by the Committee.

(b) "Beneficiary" means the person(s) designated by the Participant in accordance with Section 10, or if no person(s) is/are so designated, the estate of a deceased Participant.

(c) "Board" means the Board of Directors of Ashland Inc. or its designee.

(d) "Business Day" means a day on which the New York Stock Exchange is open for trading activity.

(e) "Change in Control" shall be deemed to occur (1) upon the approval of the shareholders of the Company (or if such approval is not required, upon the approval of the Board) of (A) any consolidation or merger of the Company, other than a consolidation or merger of the Company into or with a direct or indirect wholly-owned subsidiary, in which the Company is not the continuing or surviving corporation or pursuant to which shares of Common Stock would be converted into cash, securities or other property other than a merger in which the holders of Common Stock immediately prior to the merger will have the same proportionate ownership of common stock of the surviving corporation immediately after the merger, (B) any sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company, provided, however, that no sale, lease, exchange or other transfer of all or substantially all the assets of the Company shall be deemed to occur unless assets constituting 80% of the total assets of the Company are transferred pursuant to such sale, lease, exchange or other transfer, or (C) adoption of any plan or proposal for the liquidation or dissolution of the Company, (2) when any "person" (as defined in Section 3(a)(9) or 13(d) of the Exchange Act), other than Ashland Inc. or any subsidiary or employee benefit plan or trust maintained by Ashland Inc. or any of its subsidiaries, shall become the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 15% of the Common Stock outstanding at the time, without the approval of the Board, or (3) if at any time during a period of two consecutive years, individuals who at the beginning of such period constituted the Board shall cease for any reason to constitute at least a majority thereof, unless the election or the nomination for election by the Company's shareholders of each new director during such two-year period was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such two-year period. Notwithstanding the foregoing, any transaction, or series of transactions, that shall result in the disposition of the Company's interest in Marathon Ashland Petroleum LLC, including without limitation any transaction arising out of that certain Put/Call, Registration Rights and Standstill Agreement dated January 1, 1998 among Marathon Oil Company, USX Corporation, the Company and Marathon Ashland Petroleum LLC, as amended from time to time, shall not be deemed to constitute a Change in Control.

The definition of Change in Control as written hereinabove shall remain in effect until the Secretary of the Treasury prescribes a definition that is inconsistent with the definition in the Plan. If a definition is prescribed that is inconsistent with the definition in the Plan, such prescribed definition shall supercede the one in the Plan. If such definition is not inconsistent with the definition in the Plan, then the Plan's definition shall remain in effect.

(f) "Code" means the Internal Revenue Code of 1986, as amended.

(g) "Committee" means the Personnel and Compensation Committee of the Board or its designee.

(h) "Common Stock" means the common stock, $1.00 par value, of Ashland Inc.

(i) "Common Stock Fund" means that investment option, approved by the Committee, in which a Participant's Compensation Account may be deemed to be invested and may earn income based on a hypothetical investment in Common Stock.

(j) "Company" means Ashland Inc., its divisions, subsidiaries and affiliates. "Company" shall also include any direct successor in interest to Ashland Inc. that results from a corporate reorganization connected with divesting the interest Ashland Inc. has in Marathon Ashland Petroleum LLC.

(k) "Compensation" means any employee compensation determined by the Committee to be properly deferrable under the Plan.

(l) "Compensation Account(s)" means the Retirement Account and/or the In-Service Account(s).

(m) "Corporate Human Resources" means the Corporate Human Resources Department of the Company.

(n) "Credit Date" means the date on which Compensation would otherwise have been paid to the Participant or in the case of the Participant's designation of investment option changes, within three Business Days after the Participant's designation is received by Corporate Human Resources, or as otherwise designated by the Committee.

(o) "Deferred Compensation" means the Compensation elected by the Participant to be deferred pursuant to the Plan.

(p) "Disability" means that a Participant is either:

1. Unable to engage in any substantial gainful activity because of a medically determinable physical or mental impairment that is expected to result in death or last for a continuous period of 12 or more months; or

2. Receiving income replacement benefits for a period of at least three months under an accident and health plan covering employees of the Company because of a medically determinable physical or mental impairment that is expected to result in death or last for a continuous period of 12 or more months.

(q) "Election" means a Participant's delivery of a notice of election to defer payment of all or a portion of his or her Compensation under the terms of the Plan. Such notice shall also include instructions specifying the time the deferred Compensation will be paid and the form in which it will be paid. Such elections shall be irrevocable except as otherwise provided in the Plan or pursuant to Treasury guidance. Elections shall be made and delivered as prescribed by the Committee or the Company.

(r) "Employee" means a full-time, regular salaried employee (which term shall be deemed to include officers) of the Company, its present and future subsidiary corporations as defined in Section 424 of the Internal Revenue Code of 1986, as amended or its affiliates.

(s) "Employee Savings Plan" means the Ashland Inc. Employee Savings Plan, as it now exists or as it may hereafter be amended.

(t) "Excess Payments" means payments made to a Participant pursuant to the Plan and the Excess Plan.

(u) "Excess Plan" means the Ashland Inc. Nonqualified Excess Benefit Pension Plan, as it now exists or as it may hereafter be amended.

(v) "Exchange Act" means the Securities Exchange Act of 1934, as amended.

(w) "Fair Market Value" means the price of a share of Common Stock, as reported on the Composite Tape for New York Stock Exchange issues on the date and at the time designated by the Company.

(x) "In-Service Account" means the account(s) to which the Participant's Deferred Compensation is credited and from which distributions are made.

(y) "Key Employee" means any Employee who at any time during the Plan Year was -

1. an officer of the Company having annual compensation greater than $ 130,000 (as adjusted under section 416(i)(1) of the Code), provided that no more than 50 individuals may be considered an officer (or if less, the greater of 3 or 10 percent of the employees);

2. a 5-percent owner of the Company; or

3. a 1-percent owner of the Company with annual compensation exceeding $150,000.

For this purpose, annual compensation means compensation within the meaning of section 415(c)(3) of the Code.

(z) "Participant" means an Employee selected by the Committee to participate in the Plan and who has elected to defer payment of all or a portion of his or her Compensation under the Plan.

(aa) "Performance-Based Compensation" means Compensation that meets requirements specified by the Secretary of the Treasury. Performance-Based Compensation will include the attributes that it is variable, contingent on the satisfaction of preestablished metrics and is not readily ascertainable at the time of the Election to defer such compensation under Section 8(b).

(bb) "Plan" means this Ashland Inc. Deferred Compensation Plan for Employees (2005) as it now exists or as it may hereafter be amended.

(cc) "Plan Year" means the calendar year. The first Plan Year of the Plan is 2005.

(dd) "Retirement Account" means the account(s) to which the Participant's Deferred Compensation is credited and from which distributions are made.

(ee) "Secretary of the Treasury" or "Treasury" means the United States Department of Treasury.

(ff) "SERP" means the Ashland Inc. Supplemental Early Retirement Plan for Certain Employees, as it now exists or as it may hereafter be amended.

(gg) "SERP Payments" means payments made to a Participant pursuant to the Plan and the SERP.

(hh) "Stock Unit(s)" means the share equivalents credited to the Common Stock Fund of a Participant's Compensation Account pursuant to
Section 6.

(ii) "Termination" means termination of services as an Employee for any reason other than retirement.

(jj) "Unforeseeable Emergency" means a severe financial hardship of a Participant because of -

1. An illness or accident of the Participant, the Participant's spouse or dependent (as defined in Internal Revenue Code section 152(a));

2. A loss of the Participant's property due to casualty; or

3. Such other similar extraordinary unforeseeable circumstances because of events beyond the control of the Participant.

The meaning of Unforeseeable Emergency shall be interpreted and applied in accordance with applicable guidance that may be issued by the Treasury.

3. SHARES; ADJUSTMENTS IN EVENT OF CHANGES IN CAPITALIZATION

(a) Shares Authorized for Issuance. There shall be reserved for issuance under the Plan 500,000 shares of Common Stock, subject to adjustment pursuant to subsection (c) below.

(b) Units Authorized for Credit. The maximum number of Stock Units that may be credited to Participants' Compensation Accounts under the Plan is 1,500,000, subject to adjustment pursuant to subsection (c) below.

(c) Adjustments in Certain Events. In the event of any change in the outstanding Common Stock of the Company by reason of any stock split, share dividend, recapitalization, merger, consolidation, reorganization, combination, or exchange or reclassification of shares, split-up, split-off, spin-off, liquidation or other similar change in capitalization, or any distribution to common shareholders other than cash dividends, the number or kind of shares or Stock Units that may be issued or credited under the Plan shall be automatically adjusted so that the proportionate interest of the Participants shall be maintained as before the occurrence of such event. Such adjustment shall be conclusive and binding for all purposes of the Plan.

4. ELIGIBILITY

The Committee shall have the authority to select from management and/or highly compensated Employees those Employees who shall be eligible to participate in the Plan; provided, however, that employees and/or retirees who have elected to defer an amount into this Plan from another plan sponsored or maintained by Ashland Inc., the terms of which allowed such employee or retiree to make such a deferral election into this Plan, shall be considered to be eligible to participate in this Plan.

5. ADMINISTRATION

Full power and authority to construe, interpret and administer the Plan shall be vested in the Company and the Committee or one or more of their delegates. This power and authority includes, but is not limited to, selecting Compensation eligible for deferral, establishing deferral terms and conditions and adopting modifications, amendments and procedures as may be deemed necessary, appropriate or convenient by the Committee. This power and authority also includes, without limitation, the ability to construe and interpret provisions of the Plan, make determinations regarding law and fact, reconcile any inconsistencies between provisions in the Plan or between provisions of the Plan and any other statement concerning the Plan, whether oral or written, supply any omissions to the Plan or any document associated with the Plan, and to correct any defect in the Plan or in any document associated with the Plan. Decisions of the Company and the Committee (or their delegates) shall be final, conclusive and binding upon all parties. Day-to-day administration of the Plan shall be the responsibility of Corporate Human Resources.

6. PARTICIPANT ACCOUNTS

Upon election to participate in the Plan, there shall be established a Retirement Account and/or In-Service Account, as designated by the Participant to which there shall be credited any Deferred Compensation, as of each Credit Date. Each such Compensation Account shall be credited (or debited) on each Accounting Date with income (or loss) based upon a hypothetical investment in any one or more of the investment options available under the Plan, as prescribed by the Committee for the particular compensation credited, which may include a Common Stock Fund, as elected by the Participant under the terms of Section 8. The crediting or debiting on each Accounting Date of income (or loss) shall be made for the respective amounts that were subject to each Election under Section 8.

7. EARLY WITHDRAWAL

(a) Unforeseeable Emergency. A Participant or a Participant's legal representative may submit an application for a distribution from either a Retirement Account or an In-Service Account because of an Unforeseeable Emergency. The amount of the distribution shall not exceed the amount necessary to satisfy the needs of the Unforeseeable Emergency. Such distribution shall include an amount to pay taxes reasonably anticipated as a result of the distribution. The amount allowed as a distribution under this Section 7(a) shall take into account the extent to which the Unforeseeable Emergency may be relieved by reimbursement, insurance or liquidation of the Participant's assets (but only to the extent such liquidation would itself not cause a severe financial hardship). The distribution shall be made in a single sum and paid as soon as practicable after the application for the distribution on account of the Unforeseeable Emergency is approved. The provisions of this Section 7(a) shall be interpreted and administered in accordance with applicable guidance that may be issued by the Treasury.

(b) Disability. A Participant or a Participant's legal representative may submit an application for a distribution from the Retirement Account and In-Service Account because of the Participant's Disability. The distribution shall be made in a single sum and paid as soon as practicable after the application for the distribution on account of the Participant's Disability is approved. The provisions of this Section 7(b) shall be interpreted and administered in accordance with applicable guidance that may be issued by the Treasury. If such guidance should allow an election of a period or form of distribution at the time of the application for a distribution on account of the Participant's Disability then the Plan shall allow such elections.

(c) Prohibition on Acceleration. Except as otherwise provided in the Plan and except as may be allowed in guidance from the Secretary of the Treasury, distributions from a Participant's Compensation Account may not be made earlier than the time such amounts would otherwise be distributed pursuant to the terms of the Plan.

8. DEFERRAL ELECTION

(a) General. The Company or the Committee shall determine the timing of the filing of the appropriate Election forms. An effective Election may not be revoked or modified except as otherwise determined by the Company or the Committee or as stated herein. In addition to the provisions contained in this Plan, any deferrals of SERP Payments or Excess Payments must be in accordance with the terms of the SERP or the Excess Plan.

(b) Permissible Deferral Election. A Participant's Election to defer Compensation may only be made in the taxable year before the Compensation is earned, with two exceptions. The first exception applies to a Participant during his or her first year of eligibility to participate in the Plan. In that event such a Participant may, if so offered by the Company or the Committee, elect to defer Compensation for services performed after the Election, provided that the Election is made within 30 days of the date the Participant becomes eligible to participate in the Plan. The second exception is with respect to an election to defer Performance-Based Compensation. If Performance-Based Compensation is based on services of a Participant performed over a period of at least 12 months, then the Participant may make an Election to defer all or part of such Compensation not later than six months before the end of such service period. A Participant's Election under this Section 8(b) shall specify the amount or percentage of Compensation deferred and specify the time and form of distribution from among those described in Section 9 of the Plan. Each Election to defer Compensation is a separate election regarding the time and form of distribution.

(c) Investment Alternatives -- Existing Balances. A Participant may elect to change an existing selection as to the investment alternatives in effect with respect to an existing Compensation Account (in increments prescribed by the Committee or the Company) as often, and with such restrictions, as determined by the Committee or by the Company. If a Participant fails to make an investment selection for his or her Compensation Account, the Committee or the Company may prescribe a default selection or selections in any manner that appears reasonable in their discretion.

(d) Change of Beneficiary. A Participant may, at any time, elect to change the designation of a Beneficiary in accordance with Section 10 of the Plan.

9. DISTRIBUTION

(a) Retirement Account. In accordance with a Participant's Election under Section 8, but subject to Sections 7 and 11, amounts subject to such Election in the Retirement Account (determined in accordance with
Section 6) shall be distributed -

1. Upon a Participant's separation from service as either a lump sum or in installments not exceeding 15 years; provided, however, that the distribution to a Participant who is a Key Employee must not be made before the earliest of the date that is six months after the Participant's separation from service or the date of the Participant's death;

2. Upon a Participant's death to the Participant's Beneficiary as either a lump sum or in installments not exceeding 15 years; or

3. At a specified time or under a fixed schedule not exceeding 15 years.

(b) In-Service Account. In accordance with a Participant's Election under Section 8, but subject to Sections 7 and 11, amounts subject to such Election in the In-Service Account (determined in accordance with
Section 6) shall be distributed -

1. Upon a Participant's death to the Participant's Beneficiary as either a lump sum or in installments not exceeding 15 years; or

2. At a specified time or under a fixed schedule not exceeding 15 years.

(c) Medium of Distribution and Default Method. In accordance with the Participant's Election and within the guidelines established by the Committee or the Company, a Participant's Retirement Account or In-Service Account shall be distributed in cash or shares of Common Stock (or a combination of both). To the extent permissible under law, a Participant may make this Election at any time before a distribution is to be made. If no Election is made by a Participant as to the distribution or form of payment of his or her Retirement Account or In-Service Account, upon the earliest time that a distribution from such account is to be made pursuant to the terms of the Plan, such account shall be paid in cash or shares of Common Stock (or a combination of both) in lump sum.

(d) Election to Delay the Time or Change the Form of Distribution
. A Participant may make an Election to delay the time of a distribution or change the form of a distribution, or may elect to do both, with respect to an amount that would be payable pursuant to an Election under paragraphs
(a) or (b) of this Section 9, except in the event of a distribution on account of the Participant's death, if all of the following requirements are met -

1. Such an Election may not take effect until at least 12 months after it is made;

2. Any delay to the distribution that would take effect because of the Election is at least to a date five years after the date the distribution otherwise would have begun; and

3. In the case of a distribution that would be made under paragraphs (a)(3) or (b)(2) of this Section 9 such an Election may not be made less than 12 months before the date of the first scheduled payment.

10. BENEFICIARY DESIGNATION

A Participant may designate one or more persons (including a trust) to whom or to which payments are to be made if the Participant dies before receiving distribution of all amounts due hereunder. A designation of Beneficiary will be effective only after the signed Election is filed with Corporate Human Resources while the Participant is alive and will cancel all designations of Beneficiary signed and filed earlier. If the Participant fails to designate a Beneficiary as provided above or if all of a Participant's Beneficiaries predecease him or her and he or she fails to designate a new Beneficiary, the remaining unpaid amounts shall be paid in one lump sum to the estate of such Participant. If all Beneficiaries of the Participant die after the Participant but before complete payment of all amounts due hereunder, the remaining unpaid amounts shall be paid in one lump sum to the estate of the last to die of such Beneficiaries.

11. CHANGE IN CONTROL

Notwithstanding any provision of this Plan to the contrary, and to the extent consistent with guidance issued by the Secretary of the Treasury, in the event of a Change in Control, each Participant in the Plan shall receive an automatic lump sum cash distribution of all amounts accrued in the Participant's Compensation Account not later than fifteen
(15) days after the date of the Change in Control. For this purpose, the balance in the portion of a Participant's Compensation Account invested in the Common Stock Fund shall be determined by multiplying the number of Stock Units by the higher of (a) the highest Fair Market Value on any date within the period commencing 30 days prior to such Change in Control, or
(b) if the Change in Control of the Company occurs as a result of a tender or exchange offer or consummation of a corporate transaction, then the highest price paid per share of Common Stock pursuant thereto. Any consideration other than cash forming a part or all of the consideration for Common Stock to be paid pursuant to the applicable transaction shall be valued at the valuation price thereon determined by the Board.

In addition, the Company shall reimburse a Participant for the legal fees and expenses incurred if the Participant is required to seek to obtain or enforce any right to distribution. In the event that it is determined that such Participant is properly entitled to a cash distribution hereunder, such Participant shall also be entitled to interest thereon payable in an amount equivalent to the Prime Rate of Interest quoted by Citibank, N.A. as its prime commercial lending rate on the subject date from the date such distribution should have been made to and including the date it is made. Notwithstanding any provision of this Plan to the contrary, this Section 11 may not be amended after a Change in Control occurs without the written consent of a majority in number of Participants.

12. INALIENABILITY OF BENEFITS

The interests of the Participants and their Beneficiaries under the Plan may not in any way be voluntarily or involuntarily transferred, alienated or assigned, nor subject to attachment, execution, garnishment or other such equitable or legal process. A Participant or Beneficiary cannot waive the provisions of this Section 12. Notwithstanding anything contained herein to the contrary, valid court ordered divisions of a Participant's Compensation Account pursuant to a domestic relations order may be recognized and distributions may be made pursuant to such an order to the extent permissible under guidance that may be published by the Secretary of the Treasury.

13. CLAIMS

(a) Initial Claim - Notice of Denial. If any claim for benefits (within the meaning of section 503 of ERISA) is denied in whole or in part, the Company (which shall include the Company or its delegate throughout this Section 13) will provide written notification of the denied claim to the Participant or beneficiary, as applicable, (hereinafter referred to as the claimant) in a reasonable period, but not later than 90 days after the claim is received. The 90-day period can be extended under special circumstances. If special circumstances apply, the claimant will be notified before the end of the 90-day period after the claim was received. The notice will identify the special circumstances. It will also specify the expected date of the decision. When special circumstances apply, the claimant must be notified of the decision not later than 180 days after the claim is received.

The written decision will include:

(i) The reasons for the denial.

(ii) Reference to the Plan provisions on which the denial is based. The reference need not be to page numbers or to section headings or titles. The reference only needs to sufficiently describe the provisions so that the provisions could be identified based on that description.

(iii) A description of additional materials or information needed to process the claim. It will also explain why those materials or information are needed.

(iv) A description of the procedure to appeal the denial, including the time limits applicable to those procedures. It will also state that the claimant may file a civil action under section 502 of ERISA (ERISA - ss.29 U.S.C. 1132). The claimant must complete the Plan's appeal procedure before filing a civil action in court.

If the claimant does not receive notice of the decision on the claim within the prescribed time periods, the claim is deemed denied. In that event the claimant may proceed with the appeal procedure described below.

(b) Appeal of Denied Claim. The claimant may file a written appeal of a denied claim with the Company in such manner as determined from time to time. The Company is the named fiduciary under ERISA for purposes of the appeal of the denied claim. The Company may delegate its authority to rule on appeals of denied claims and any person or persons or entity to which such authority is delegated may re-delegate that authority. The appeal must be sent at least 60 days after the claimant received the denial of the initial claim. If the appeal is not sent within this time, then the right to appeal the denial is waived.

The claimant may submit materials and other information relating to the claim. The Company will appropriately consider these materials and other information, even if they were not part of the initial claim submission. The claimant will also be given reasonable and free access to or copies of documents, records and other information relevant to the claim.

Written notification of the decision on the appeal will be delivered to the claimant in a reasonable period, but not later than 60 days after the appeal is received. The 60-day period can be extended under special circumstances. If special circumstances apply, the claimant will be notified before the end of the 60-day period after the appeal was received. The notice will identify the special circumstances. It will also specify the expected date of the decision. When special circumstances apply, the claimant must be notified of the decision not later than 120 days after the appeal is received.

Special rules apply if the Company designates a committee as the appropriate named fiduciary for purposes of deciding appeals of denied claims. For the special rules to apply, the committee must meet regularly on at least a quarterly basis.

When the special rules for committee meetings apply the decision on the appeal must be made not later than the date of the committee meeting immediately following the receipt of the appeal. If the appeal is received within 30 days of the next following meeting, then the decision must not be made later than the date of the second committee meeting following the receipt of the appeal.

The period for making the decision on the appeal can be extended under special circumstances. If special circumstances apply, the claimant will be notified by the committee or its delegate before the end of the otherwise applicable period within which to make a decision. The notice will identify the special circumstances. It will also specify the expected date of the decision. When special circumstances apply, the claimant must be notified of the decision not later than the date of the third committee meeting after the appeal is received.

In any event, the claimant will be provided written notice of the decision within a reasonable period after the meeting at which the decision is made. The notification will not be later than 5 days after the meeting at which the decision is made.

Whether the decision on the appeal is made by a committee or not, a denial of the appeal will include:

(i) The reasons for the denial.

(ii) Reference to the Plan provisions on which the denial is based. The reference need not be to page numbers or to section headings or titles. The reference only needs to sufficiently describe the provisions so that the provisions could be identified based on that description.

(iii)A statement that the claimant may receive free of charge reasonable access to or copies of documents, records and other information relevant to the claim.

(iv) A description of any voluntary procedure for an additional appeal, if there is such a procedure. It will also state that the claimant may file a civil action under section 502 of ERISA (ERISA - ss.29 U.S.C. 1132).

If the claimant does not receive notice of the decision on the appeal within the prescribed time periods, the appeal is deemed denied. In that event the claimant may file a civil action in court. The decision regarding a denied claim is final and binding on all those who are affected by the decision. No additional appeals regarding that claim are allowed.

14. GOVERNING LAW

The provisions of this plan shall be interpreted and construed in accordance with the laws of the Commonwealth of Kentucky, except to the extent preempted by Federal law.

15. AMENDMENTS

The Committee may amend, alter or terminate this Plan at any time without the prior approval of the Board; provided, however, that the Committee may not, without approval by the Board:

(a) increase the number of securities that may be issued under the Plan (except as provided in Section 3(c));

(b) materially modify the requirements as to eligibility for participation in the Plan; or

(c) otherwise materially increase the benefits accruing to Participants under the Plan.

15. EFFECTIVE DATE

The Plan was approved and originally became effective as of January 1, 2005.

IN WITNESS WHEREOF, this adoption of the Plan is executed this 3rd day of December, 2004.

ATTEST:                                    ASHLAND INC.



/s/ David L. Hausrath                      By:  /s/ Susan B. Esler
-----------------------------------            ----------------------------
Secretary                                      Vice President Human Resources

EXHIBIT 10.5

ASHLAND INC.
DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
(AMENDED AS OF APRIL 1, 2003)

ARTICLE I. GENERAL PROVISIONS

1. PURPOSE

The purpose of this Ashland Inc. Deferred Compensation Plan For Non-Employee Directors (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.

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.

(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.

(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, pursuant to Article III, Section 5, 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 a Director's incapacity, due to physical or mental illness, resulting in an inability to attend to his or her duties and responsibilities as a member of the Board.

(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.

(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) "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.

(z) "Plan" means this Ashland Inc. Deferred Compensation Plan For Non-Employee Directors.

(aa) "Stock Account" means an account by that name established pursuant to Article III, Section 1.

(bb) "Stock Unit(s)" means the share equivalents credited to a Participant's Stock Account pursuant to Article III, Section 1.

(cc) "Termination" means retirement from the Board or termination of service as a Director for any other reason.

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. Decisions of the Company and the Committee 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 5. 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 5.

(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.

2. WITHDRAWAL - FINANCIAL HARDSHIP

Upon the written request of a Participant or a Participant's Personal Representative and a finding that continued deferral will result in an unforeseeable financial emergency to the Participant, the Committee or the Company (each in its sole discretion) may authorize (a) the payment of all or a part of a Participant's Deferral Account in a single installment prior to his or her ceasing to be a Director, or (b) the acceleration of payment of any multiple installments hereof. It is intended that the Committee's, or the Company's, determinations as to whether the Participant has suffered an "unforeseeable financial emergency" shall be made consistent with the requirements under Section 457(d) of the Internal Revenue Code. If the Participant requesting such a payment is a member of the Committee, the Participant shall abstain from the Committee's determination as to whether the payment shall be made.

3. WITHDRAWAL - GOOD REASON

(a) Availability of Withdrawal Prior to Retirement. Upon the written request of a Participant or a Participant's legal representative and a finding that good reason exists for early withdrawal of some or all of the Participant's account balance, the Committee may authorize the payment of all or a part of a Participant's Deferral Account in a single installment prior to his or her ceasing to be a Participant, provided the conditions specified in subsections (b), (c), (d), and (e) of this Article III, Section 3, are satisfied. It is intended that the Committee shall deem requests for early withdrawal for purposes similar to the following to constitute "good reason": (a) the purchase of a new home; (b) education expenses; or (c) charitable contributions. If the Participant requesting such a payment is a member of the Committee, the Participant shall abstain from the Committee's determination as to whether the payment shall be made.

(b) Forfeiture Penalty. In the event of a withdrawal pursuant to subsection (a) of this Article III, Section 3, the Participant shall forfeit from such Deferral Account an amount equal to 5% of the amount of the withdrawal. The forfeited amount shall be deducted from the Deferral Account prior to giving effect to the requested withdrawal. Neither the Participant nor the Participant's Beneficiary shall have any right or claim to the forfeited amount, and the Company shall have no obligation whatsoever to the Participant, the Participant's Beneficiary or any other person with regard to the forfeited amount.

(c) Minimum Withdrawal. In no event shall the amount withdrawn in accordance with subsection (a) of this Article III, Section 3 be less than $50,000, or the entire balance of the Participant's Deferral Account immediately prior to the withdrawal, whichever is less. The withdrawal must be taken in increments of $25,000, except to the extent that the Participant's Deferral Account balance is less than $50,000 immediately prior to the withdrawal, and, in such an event, the Participant must withdraw the entire Deferral Account balance.

(d) Suspension from Deferrals. In the event of a withdrawal pursuant to subsection (a) of this Article III, Section 3, a Participant who is otherwise eligible to make deferrals of Fees under the Plan shall be prohibited from making such deferrals with respect to the remainder of the current Fiscal Year and the Fiscal Year of the Plan immediately following the Fiscal Year of the Plan during which the withdrawal was made, and any Election previously made by the Participant with respect to deferrals of Fees for such Fiscal Years of the Plan shall be void and of no effect.

(e) Suspension from Withdrawals. Participants shall be prohibited from requesting a second withdrawal under subsection (a) of this Article III, Section 3 for a period of 60 months following any withdrawal under subsection (a) of this Article III, Section 3.

4. WITHDRAWAL - ACCELERATED DISTRIBUTION

(a) Availability of Withdrawal Prior to Termination. The Participant or the Participant's Beneficiary who is receiving installment payments under the Plan may elect, in writing, to withdraw all or a portion of a Participant's Deferral Account at any time prior to the time such Deferral Account otherwise becomes payable under the Plan, provided the conditions specified in subsections (c), (d) and (e) of this Article III,
Section 4 are satisfied.

(b) Acceleration of Periodic Distributions. Upon the written election of the Participant or the Participant's Beneficiary who is receiving installment payments under the Plan, the Participant or Participant's Beneficiary may elect to have all or a portion of the remaining installments distributed in the form of an immediately payable lump sum, provided the conditions specified in subsection (c) and (e) of this Article III, Section 4 are satisfied.

(c) Forfeiture Penalty. In the event of a withdrawal pursuant to subsection (a) of this Article III, Section 4, or an accelerated distribution pursuant to subsection (b) of this Article III, Section 4, the Participant shall forfeit from such Deferral Account an amount equal to 10% of the amount of the withdrawal or accelerated distribution, as the case may be. The forfeited amount shall be deducted from the Deferral Account prior to giving effect to the requested withdrawal or acceleration. Neither the Participant nor the Participant's Beneficiary shall have any right or claim to the forfeited amount, and the Company shall have no obligation whatsoever to the Participant, the Participant's Beneficiary or any other person with regard to the forfeited amount.

(d) Minimum Withdrawal. In no event shall the amount withdrawn in accordance with subsection (a) of this Article III, Section 4 be less than 25% of the amount credited to such Participant's Deferral Account immediately prior to the withdrawal.

(e) Suspension from Deferrals. In the event of a withdrawal pursuant to subsection (a) or (b) of this Article III, Section 4, a Participant who is otherwise eligible to make deferrals of Fees under this Plan shall be prohibited from making such deferrals with respect to the remainder of the current Fiscal Year and the Fiscal Year of the Plan immediately following the Fiscal Year of the Plan during which the withdrawal was made, and any Election previously made by the Participant with respect to deferrals of Fees for such Fiscal Year of the Plan shall be void and of no effect.

5. MANNER OF 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) 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.

(c) 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.

(d) Initial Election. With respect to Directors' Fees payable for all or any portion of a calendar year after such person's initial election to the office of Director of the Company, any such person wishing to participate in the Plan may file a proper Election within 30 days after such election to office. Any such Election shall be effective upon filing or as soon as possible thereafter with respect to such Fees.

6. 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.

(b) Request to Change in Distribution of Deferral Account. A Participant will be allowed to request a change in his or her Election as to the distribution of Deferred Compensation of his or her Deferral Account for all amounts previously deferred pursuant to such Election. Any such request shall not be effective without the approval of the Committee or the Company, which approval shall be in their sole discretion. Such change must be made by the earlier of:

(i) the date six months prior to the first day of the month following the Participant's Termination; or

(ii) the December 31 immediately preceding the first day of the month following the Participant's Termination.

If the Participant making such change is a member of the Committee, such Participant shall abstain from the Committee's decision to approve or disapprove such change.

7. PAYMENT COMMENCEMENT DATE

Payments of amounts deferred pursuant to a valid Election shall commence after a Participant's Termination in accordance with his or her 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.

8. CHANGE IN CONTROL

Notwithstanding any provision of this Plan to the contrary, 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 8 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 the shareholders:

(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 by the shareholders of the Company on January 27, 1994, and originally became effective as of November 9, 1993, and has been restated in this document effective April 1, 2003.

AMENDMENT NO. 1 TO
ASHLAND INC. DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
(AMENDED AND RESTATED AS OF APRIL 1, 2003)

WHEREAS, effective for compensation deferred to calendar year 2005 and thereafter, there are new rules governing the tax consequences of such deferrals;

WHEREAS, the Company desires to comply with such new rules;

NOW, THEREFORE, effective December 31, 2004, the Plan is frozen and will not accept, maintain or administer any amounts that may be deferred by a Participant thereunder to calendar years after 2004 and beyond. Benefits maintained and administered under this Plan shall remain subject to all of the rules, terms and conditions in effect hereunder as of December 31, 2004.

IN WITNESS WHEREOF, this Amendment to the Plan is executed this 3rd day of December, 2004.

ATTEST:                              ASHLAND INC.

/s/ David L. Hausrath                By:  /s/ Susan B. Esler
-------------------------------     ----------------------------------------
Secretary                               Vice President, Human Resources

EXHIBIT 10.6

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 3rd day of December, 2004.

ATTEST:                                 ASHLAND INC.



/s/ David L. Hausrath                   By:  /s/ Susan B. Esler
---------------------------------      ----------------------------------
Secretary                              Vice President Human Resources