ASHLAND INC.
                         DEFERRED COMPENSATION PLAN
               (Amended and Restated as of November 7, 2002)

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

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

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

     (v)   "In-Service   Account"   means  the   account(s)  to  which  the
Participant's Deferred Compensation is credited and from which, pursuant to
Section 10, distributions are made.

     (w)  "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.

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

     (y)   "Retirement   Account"   means  the   account(s)  to  which  the
Participant's Deferred Compensation is credited and from which, pursuant to
Section 10, distributions are made.

     (z)  "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.

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

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

     (cc)  "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 9.

     7. 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. 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 8(c), 8(d) and 8(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  8(c) and 8(e)  hereof are
satisfied.

     (c)  Forfeiture  Penalty.  In the event of a  withdrawal  pursuant  to
Section 8(a), or an accelerated  distribution pursuant to Section 8(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  8(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 8(a) or 8(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.

     9. 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 11
hereof.

     10. 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 forty
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) Change of Distribution of Compensation Account. A Participant will
be  allowed to change  the  Election  as to the  distribution  of  Deferred
Compensation  of his or her Retirement  Account for all amounts  previously
deferred pursuant to such Election, subject to approval by the Committee or
the Company. Such change 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 change the Election as to the  distribution  of
Deferred  Compensation  in his  or  her  In-Service  Account(s)  except  as
otherwise set forth in Sections 7 and 8.

     11. 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.

     12. 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  12 may not be  amended  after a Change in Control
occurs without the written consent of a majority in number of Participants.

     13. 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 13.

     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 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.

     16. 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 November 7, 2002.