Supplemental Early Retirement Plan

NINTH AMENDED AND RESTATED
ASHLAND INC.
SUPPLEMENTAL EARLY RETIREMENT PLAN
FOR CERTAIN KEY EXECUTIVE EMPLOYEES
November 6, 1997


ARTICLE I. PURPOSE AND EFFECTIVE DATE. 1.01 The purpose of the Plan is to allow designated senior executive
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 The Ninth Amended and Restated Ashland Inc. Supplemental Early
Retirement Plan for Certain Key Executive Employees is hereby
amended effective November 6, 1997. However, the rights and
obligations of Employees who were selected by the Board or
approved for participation pursuant to the eligibility
requirements of the Plan to receive a benefit under the Plan, or
who were receiving benefits prior to November 6, 1997,
(irrespective of the Effective Retirement Date(s) of such
Employee(s)), shall be governed by the terms of the Plan in effect
at the time of such retirement. ARTICLE II. DEFINITIONS.
The following terms used herein shall have the following meanings
unless the context otherwise requires: 2.01 "Age" - means the age of an Employee as of his or her last
birthday. 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 their
designees.


2.05 "Change in Control" - shall be deemed to occur (1) upon the
approval of the shareholders of Ashland (or if such approval is
not required, the approval of the Board) of (A) any consolidation
or merger of Ashland in which Ashland is not the continuing or
surviving corporation or pursuant to which shares of Ashland
common stock would be converted into cash, securities or other
property other than a merger in which the holders of Ashland
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, 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 Securities Exchange Act
of 1934), other than Ashland or any subsidiary or employee benefit
plan or trust maintained by Ashland or any of its subsidiaries,
shall become the "beneficial owner" (as defined in Rule 13d-3
under the Securities Exchange Act of 1934), directly or
indirectly, of more than 15% of the Ashland 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 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. 2.06 "Committee" - means the Personnel and Compensation Committee of
the Board and their designees. 2.07 "Effective Retirement Date" - means the date upon which a
Participant retires under this Plan which shall be the first day
of the month following the Participant's 62nd birthday or, at
Ashland's discretion or as otherwise provided in Article V or VI,
any earlier age. Upon approval as provided in


2
Sections 3.01 and 3.02, the "Effective Retirement Date" of a
Participant may occur after the Employee reaches age 62. 2.08 "Employee" - means an executive employee of Ashland who (i) is at
least 55 years of age or such earlier age pursuant to Section
5.06(b); and (ii) is deemed on the Effective Retirement Date to be
a Level V or above employee under the Incentive Compensation Plan. 2.09 "Employment Contracts" - 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. 2.10 "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 sixty-month (60) period. 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. 2.11 "Final Average Compensation" - means the average total
compensation paid during the highest thirty-six months (36) out of
the final sixty-month (60) period. 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 2.10. 2.12 "Incentive Compensation Plan" - means the Ashland Inc. Incentive
Compensation Plan or the Ashland Inc. Incentive Compensation Plan
for Key Executives, as applicable.
3 2.13 "Participant" - means an Employee who has been approved for
participation in the Plan pursuant to Article III or Section 5.06. 2.14 "Plan" - means the Ninth Amended and Restated Ashland Inc.
Supplemental Early Retirement Plan for Certain Key Executive
Employees as set forth herein. 2.15 "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 2.15, 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. ARTICLE III. PARTICIPATION IN PLAN.
Eligibility for benefits shall be determined as follows: 3.01 Except as otherwise provided in Section 3.03, an Employee who on
the Effective Retirement Date is deemed to be a Level I or II
Participant under the Incentive Compensation Plan shall require
Board approval to participate in this Plan. 3.02 An Employee who on the Effective Retirement Date is deemed to be a
Level III, IV, or V Participant under the Incentive Compensation
Plan shall require the approval of either (i) Ashland's Chief
Executive Officer or (ii) Ashland's Administrative Vice President,
Human Resources and either the Executive Vice President or the
Chief Financial Officer to participate in this Plan. 3.03 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 or II Participant under the Incentive
Compensation Plan shall automatically be deemed to be approved by
the Board for participation under this Plan. 3.04 The Board or Chief Executive Officer or Chief Operating Officer,
as applicable, may approve such key executives for participation
in the Plan as they deem to be appropriate, all in its sole
discretion.


4 3.05 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 3.05,
"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. ARTICLE IV. INTERACTION WITH EMPLOYMENT CONTRACTS. 4.01 Notwithstanding any provision of this Plan to the contrary, an
Employee who has entered into an Employment Contract 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," benefits payable hereunder shall
not include those benefits which would have been payable to the
Employee during the first two (2) years of his or her retirement
under the Plan. 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


5
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 not include those
benefits which would have been payable to the Employee during the
first three (3) years of his or her retirement under the Plan. The
benefits payable hereunder shall commence no earlier than as of
the first day of the calendar month coincident with or next
following the third 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. 4.04 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 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 not be entitled to the receipt of any
further payments of Annual Retirement Income under this Plan;
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:
Administrative Vice President, Human Resources) 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.


6


ARTICLE V. ANNUAL RETIREMENT INCOME AND OTHER BENEFITS. 5.01 LEVELS I AND II.
The Annual Retirement Income of a Participant who is deemed to be
a Level I or II Participant under the Incentive Compensation Plan
shall be equal to:
(a) Pre-Age 62 Benefit
A Participant who retire ...