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_________________________________________________

Susan B. Esler
Vice President
Chief Human Resources and Communications Officer
 
Ashland Inc.
50 E. RiverCenter Blvd.
P.O. Box 391
Covington, KY 41012-0391
Tel: 859 815-3543, Fax: 859 815-5894
 
     

 
November 6, 2013
 
 
John E. Panichella
 
 
 
 
Dear John:

This letter (“Letter Agreement”) will confirm the understanding between you and
Ashland Inc. (“Ashland”) concerning your transfer from Ashland Specialty
Ingredients (“ASI”), to Hercules Inc. (“Hercules”), where you will assume
leadership of the Ashland Water Technologies (“AWT”) business unit. Your
acceptance of this Letter Agreement will rescind and replace the Executive Offer
Special Incentive Award you were otherwise eligible to receive based on your
performance during the October 1, 2012- September 30, 2014 performance period,
which had a target award amount of One Million ($1,000,000) Dollars, and a
maximum potential payout of Two Million ($2,000,000) Dollars. This Letter
Agreement will also rescind and replace all other agreements concerning your
employment and compensation currently in place between you and ASI, Hercules
and/or Ashland, to the extent said agreements are inconsistent with the terms
provided herein.

Subject to the terms and conditions contained herein, in exchange for your
agreement to assume leadership of the AWT business, and assist Ashland as it
prepares to divest those assets of Ashland and Hercules associated with the
operation of the AWT business (the “Transaction”), you will be eligible to
receive the following Special Bonus Payments:

a)  
If you remain employed through the date on which a definitive agreement for the
Transaction is executed by Ashland and a purchaser (the “Buyer”), then Hercules
will provide you with a lump sum payment equal to $500,000, less applicable
withholdings, to be paid within 15 days of the date the purchase agreement is
signed by the parties; and

b)  
Thereafter, if you remain employed through the date on which the Transaction
closes, then Hercules will provide you with a second lump sum payment equal to
$500,000, less applicable withholdings, to be paid within 15 days of the date
the Transaction closes.

During the term of this Letter Agreement, you will continue to receive
compensation at a rate at least equivalent to your level of base pay in effect
at the time this Letter Agreement was executed, and except as specifically
excluded herein, you will also continue to be eligible to participate in those
compensation and benefit programs offered to other regular, full-time employees
of Ashland or Hercules within your salary band.

You understand and agree that the Special Bonus Payments provided for under this
Letter Agreement will be made in accordance with any applicable requirements of
Internal Revenue Code §409A.

In the event your employment with Hercules terminates as of the close of the
Transaction, and you are not offered employment with Ashland or one of its other
subsidiaries at that time,
 
 
 
 
 
 
John Panichella
November 6, 2013
Page 2
 
 
nothing in this Letter Agreement will impair any right you would otherwise have
to receive severance benefits under the Ashland Inc. Severance Pay Plan or under
any special severance pay plan or program offered by Ashland or Buyer to
employees of Hercules whose employment terminates as of the close of the
Transaction, or whose subsequent employment with Buyer terminates within a
six-month window thereafter.
 
You understand and agree that this Letter Agreement will immediately terminate
(an “Early Termination”), and Hercules will be relieved of any obligation to
provide any outstanding Special Bonus Payment(s) to you if any of the following
occurs prior to the date on which the obligation pay a Special Bonus Payment is
triggered:

i)  
you voluntarily terminate your employment with Hercules;

ii)  
Hercules terminates your employment for cause;  For the purposes of this letter,
termination for cause will arise if you:  (a) substantially fail to perform your
duties with Hercules, unless such failure is due to your incapacity as a result
of physical or mental illness; or (b) you engage in willful misconduct or gross
negligence in performing your duties;

iii)  
in the event of your death.   Provided, however, that Hercules and/or Ashland
will not be relieved of any obligations under those employee benefits plans in
which you participated which arise due to your death.

This Letter Agreement shall terminate on the earlier of the date of the close of
the Transaction, or the date on which an Early Termination occurs. Provided,
however, that any obligations on the part of Hercules or Ashland arising under
this Letter Agreement during its term, or triggered under this Letter Agreement
on the date of its termination, shall survive the termination of this Letter
Agreement.

This Letter Agreement does not, in any way, constitute a contract or agreement
guaranteeing your continued employment. Hercules reserves the right to terminate
your employment at any time, with or without cause.

If you agree with the foregoing, please sign and date each original of this
Letter Agreement in the space provided for your signature, and return one
original to me prior to November 15, 2013.  You may retain a copy for your
records.

Should you have any questions, please feel free to contact me.

    Sincerely yours,  
 
 
        /s/  Susan B. Esler          

Agreed to and accepted
This 13th day of November, 2013.

/s/ John E. Panichella
              John E. Panichella