ASHLAND INC.
                         1993 STOCK INCENTIVE PLAN

                      (Amended as of November 6, 1997)


SECTION 1. PURPOSE

     The  purpose  of the  Ashland  Inc.  1993 Stock  Incentive  Plan is to
promote the interests of Ashland Inc. and its shareholders by providing its
directors,  officers and  employees  with an incentive to continue  service
with Ashland.  Accordingly,  the Company may grant to selected officers and
employees Stock Options, Stock Appreciation Rights, Restricted Stock, Merit
Awards and  Performance  Share Awards in an effort to attract and retain in
its employ  qualified  individuals  and to provide  such  individuals  with
incentives to devote their best efforts to the Company through ownership of
the  Company's  stock,  thus  enhancing  the value of the  Company  for the
benefit of shareholders.  The Plan also provides an incentive for qualified
persons,  who are not officers or employees of the Company, to serve on the
Board of  Directors  of the  Company  and to  continue to work for the best
interests of the Company by rewarding such persons with automatic grants of
Restricted Stock of the Company.  Stock Options, Stock Appreciation Rights,
Merit  Awards and  Performance  Shares  may not be granted to such  Outside
Directors under the Plan.

SECTION 2. DEFINITIONS

      (A)  "Agreement"  shall mean a written  agreement  setting  forth the
terms of an Award.

      (B)  "Ashland"  shall  mean,  collectively,   Ashland  Inc.  and  its
Subsidiaries.

     (C)  "Award"  shall  mean an Option,  a Stock  Appreciation  Right,  a
Restricted  Stock Award, a Merit Award,  or a Performance  Share Award,  in
each case granted under this Plan.

     (D)  "Beneficiary"  shall mean the  person,  persons,  trust or trusts
designated by an Employee or Outside Director or if no designation has been
made, the person, persons, trust, or trusts entitled by will or the laws of
descent and distribution to receive the benefits  specified under this Plan
in the event of an Employee's or Outside Director's death.

     (E) "Board"  shall mean the Board of  Directors  of the Company or its
designee.

     (F) "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 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,  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.

      (G) "Code" shall mean the Internal  Revenue Code of 1986,  as amended
from time to time.

      (H) "Committee"  shall mean the Personnel and Compensation  Committee
of the Board, as from time to time constituted,  or any successor committee
of the Board with similar  functions,  which shall consist of three or more
members, each of whom shall be a Non-Employee Director or its designee.

      (I) "Common  Stock" shall mean the Common Stock of the Company ($1.00
par value), subject to adjustment pursuant to Section 13.

      (J)  "Company"  shall  mean,  collectively,   Ashland  Inc.  and  its
Subsidiaries.

      (K) "Employee" shall mean an officer or employee of the Company.

      (L) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

      (M) "Exercise Price" shall mean, with respect to each share of Common
Stock  subject to (i) an Option  (other  than a Reload  Option),  the price
fixed by the  Committee  at which  such  share  may be  purchased  from the
Company pursuant to the exercise of such Option, which price at no time may
be less than 100% of the Fair Market  Value of the Common Stock on the date
the  Option is granted  or (ii) a Reload  Option,  the price of which is as
fixed pursuant to Section 6 of the Plan.

      (N) "Fair  Market  Value" shall mean the price of the Common Stock as
reported on the Composite  Tape on the date and at the time selected by the
Company.

      (O)  "Incentive  Stock  Option" or "ISO" shall mean an Option that is
intended by the  Committee to meet the  requirements  of Section 422 of the
Code or any successor provision.

      (P) "Long-Term  Incentive Plan" shall mean the Ashland Inc. Long-Term
Incentive Plan approved and adopted on January 26, 1989 by the shareholders
of the Company, as it now exists or as it may hereafter be amended.

      (Q) "Merit Award" shall mean an award of Common Stock issued pursuant
to Section 9 of the Plan.

      (R) "Non-Employee Director" shall mean a non-employee director within
the  meaning  of  applicable  regulatory   requirements,   including  those
promulgated under Section 16 of the Exchange Act.

      (S)  "Nonqualified  Stock  Option"  or  "NQSO"  shall  mean an Option
granted  pursuant to this Plan which does not qualify as an Incentive Stock
Option.

      (T) "Option" shall mean the right to purchase Common Stock at a price
to be  specified  and  upon  terms to be  designated  by the  Committee  or
otherwise  determined  pursuant to this Plan. An Option shall be designated
by the  Committee as a  Nonqualified  Stock  Option or an  Incentive  Stock
Option.

      (U)  "Original  Option" shall mean an option as defined in Subsection
(D) of Section 6 of the Plan.

      (V)  "Outside  Director"  shall mean a director of the Company who is
not also an Employee of the Company.

      (W)  "Performance  Period"  shall mean the period  designated  by the
Committee during which the performance objectives shall be measured.

      (X) "Performance Share Award" shall mean an award of shares of Common
Stock,  the issuance of which is contingent  upon attainment of performance
objectives specified by the Committee.

      (Y)  "Performance  Shares"  shall mean those  shares of Common  Stock
issuable pursuant to a Performance Share Award.

      (Z) "Personal  Representative"  shall mean the person or persons who,
upon the  disability or  incompetence  of an Employee or Outside  Director,
shall have acquired on behalf of the Employee or Outside  Director by legal
proceeding or otherwise the right to receive the benefits specified in this
Plan.

      (AA) "Plan" shall mean this Ashland Inc. 1993 Stock Incentive Plan.

      (BB)  "Reload  Option"  shall  mean an  option  granted  pursuant  to
Subsection (D) of Section 6 of the Plan.

      (CC)  "Restricted  Period"  shall mean the period  designated  by the
Committee  during  which  Restricted  Stock  may  not  be  sold,  assigned,
transferred,  pledged, or otherwise encumbered, which period in the case of
Employees  shall not be less  than one year from the date of grant,  and in
the case of Outside  Directors is the period set forth in subsection (B) of
Section 8.

      (DD)  "Restricted  Stock"  shall  mean those  shares of Common  Stock
issued  pursuant  to a  Restricted  Stock  Award  which are  subject to the
restrictions, terms, and conditions set forth in the related Agreement.

      (EE)  "Restricted  Stock  Award"  shall  mean an award of  Restricted
Stock.

      (FF)  "Retained  Distributions"  shall mean any  securities  or other
property (other than regular cash dividends)  distributed by the Company in
respect of Restricted Stock during any Restricted Period.

      (GG)  "Retirement"  shall mean  retirement  of an  Employee  from the
employ of the  Company at any time as  described  in the Ashland  Inc.  and
Affiliates  Pension Plan or in any successor  pension plan, as from time to
time in effect.

      (HH)  "Section  16(b)  Optionee"  shall  mean an  Employee  or former
Employee who is subject to Section 16(b) of the Exchange Act.

      (II) "Stock  Appreciation Right" or "SAR" shall mean the right of the
holder to elect to surrender an Option or any portion thereof which is then
exercisable and receive in exchange therefor shares of Common Stock,  cash,
or a combination thereof, as the case may be, with an aggregate value equal
to the excess of the Fair  Market  Value of one share of Common  Stock over
the Exercise  Price  specified in such Option  multiplied  by the number of
shares of Common Stock  covered by such Option or portion  thereof which is
so surrendered.  An SAR may only be granted  concurrently with the grant of
the related Option.  An SAR shall be exercisable  upon any additional terms
and conditions (including,  without limitation,  the issuance of Restricted
Stock and the imposition of restrictions upon the timing of exercise) which
may be determined as provided in the Plan.

      (JJ)  "Subsidiary"  shall  mean  any  present  or  future  subsidiary
corporations, as defined in Section 424 of the Code, of Ashland.

      (KK) "Tax Date" shall mean the date the  withholding  tax  obligation
arises with respect to the exercise of an Award.


SECTION 3. STOCK SUBJECT TO THE PLAN

     There will be reserved for issuance  under the Plan (upon the exercise
of Options and Stock Appreciation  Rights, upon awards of Restricted Stock,
Performance  Shares  and Merit  Awards and for stock  bonuses  on  deferred
awards of  Restricted  Stock  and  Performance  Shares),  an  aggregate  of
2,900,000  shares of  Ashland  Common  Stock,  par value  $1.00 per  share;
provided,  however,  that of such  shares,  only  1,500,000  shares  in the
aggregate  shall be available for issuance for Restricted  Stock Awards and
Merit Awards. Such shares shall be authorized but unissued shares of Common
Stock.  Except as provided in Sections 7 and 8, if any Award under the Plan
shall expire or terminate for any reason  without  having been exercised in
full,  or if any  Award  shall be  forfeited,  the  shares  subject  to the
unexercised or forfeited portion of such Award shall again be available for
the purposes of the Plan.

SECTION 4. ADMINISTRATION

     The Plan shall be administered by the Committee. No person who is (or,
within  one  year  prior  to his  or her  appointment  as a  member  of the
Committee, was) eligible to participate in the Plan, except as specifically
authorized under subsection (B) of Section 8 herein,  or in any other stock
option  or stock  bonus  plan of the  Company,  shall  be a  member  of the
Committee.  The Committee shall have no authority regarding the granting of
Restricted Stock to Outside Directors, as such grants are fixed pursuant to
subsection (B) of Section 8 of the Plan.

     In  addition  to any  implied  powers and duties that may be needed to
carry out the  provisions  of the Plan,  the  Committee  shall have all the
powers vested in it by the terms of the Plan, including exclusive authority
(except as to Awards of Restricted  Stock granted to Outside  Directors) to
select the Employees to be granted  Awards under the Plan, to determine the
type, size and terms of the Awards to be made to each Employee selected, to
determine  the time when Awards will be granted,  and to prescribe the form
of the  Agreements  embodying  Awards  made under the Plan.  Subject to the
provisions of the Plan  specifically  governing  Awards of Restricted Stock
granted or to be granted to Outside Directors pursuant to subsection (B) of
Section 8 herein,  the Committee  shall be authorized to interpret the Plan
and the Awards granted under the Plan, to establish,  amend and rescind any
rules  and   regulations   relating   to  the  Plan,   to  make  any  other
determinations   which  it  believes   necessary  or   advisable   for  the
administration  of the Plan,  and to  correct  any  defect  or  supply  any
omission or reconcile any  inconsistency in the Plan or in any Award in the
manner and to the extent the  Committee  deems  desirable  to carry it into
effect. Any decision of the Committee in the administration of the Plan, as
described herein, shall be final and conclusive.

     The  Committee  may  act  only  by a  majority  of  its  members.  Any
determination of the Committee may be made,  without notice, by the written
consent of the majority of the members of the Committee.  In addition,  the
Committee  may  authorize any one or more of their number or any officer of
the Company to execute and deliver documents on behalf of the Committee. No
member of the Committee  shall be liable for any action taken or omitted to
be  taken  by  him  or  her or by any  other  member  of the  Committee  in
connection with the Plan,  except for his or her own willful  misconduct or
as expressly provided by statute.

     The  provisions  of this Section 4 with respect to decisions  made by,
and  authority  of, the  Committee  shall be subject to the  provisions  of
subsection (B) of Section 8 herein.

SECTION 5. ELIGIBILITY

     Awards may only be granted (i) to  individuals  who are  Employees  of
Ashland,  and (ii) as expressly  provided in subsection (B) of Section 8 of
the Plan, to individuals who are duly elected Outside Directors of Ashland.

SECTION 6. STOCK OPTIONS

A. Designation and Price.

     (a) Any Option  granted  under the Plan may be granted as an Incentive
Stock Option or as a  Nonqualified  Stock Option as shall be  designated by
the Committee at the time of the grant of such Option. Each Option shall be
evidenced  by an Agreement  between the  recipient  and the Company,  which
Agreement  shall specify the designation of the Option as an ISO or a NQSO,
as the case may be,  and shall  contain  such terms and  conditions  as the
Committee,  in its sole  discretion,  may determine in accordance  with the
Plan.

     (b) Every Incentive Stock Option shall provide for a fixed  expiration
date of not later than ten years from the date such Incentive  Stock Option
is granted.

     (c) The Exercise Price of Common Stock issued  pursuant to each Option
(other than a Reload Option) shall be fixed by the Committee at the time of
the granting of the Option;  provided,  however,  that such Exercise  Price
shall in no event be less than 100% of the Fair Market  Value of the Common
Stock on the date such Option is granted.

B. Exercise.

     The  Committee  may, in its  discretion,  provide for Options  granted
under the Plan to be  exercisable in whole or in part;  provided,  however,
that no Option (other than a Reload Option) shall be  exercisable  prior to
the first  anniversary  of the date of its  grant,  except as  provided  in
Section 11 or as the Committee otherwise  determines in accordance with the
Plan,  and in no case may an Option be exercised at any time for fewer than
50 shares  (or the total  remaining  shares  covered by the Option if fewer
than 50 shares)  during the term of the  Option.  The  specified  number of
shares will be issued upon receipt by Ashland of (i) notice from the holder
thereof of the  exercise of an Option,  and (ii) either  payment to Ashland
(as  provided in this  Section 6,  subsection  (C) below),  of the Exercise
Price  for the  number  of  shares  with  respect  to which  the  Option is
exercised,  or with approval of the Committee, a secured promissory note as
hereinafter  provided.  Each such notice and payment  shall be delivered or
mailed by postpaid  mail,  addressed to the Treasurer of Ashland at Ashland
Inc., 1000 Ashland Drive, Russell,  Kentucky, 41169, or such other place as
Ashland may designate from time to time.

C. Payment for Shares.

     Except as otherwise provided in this Section 6, the Exercise Price for
the  Common  Stock  shall be paid in full  when the  Option  is  exercised.
Subject to such rules as the Committee may impose,  the Exercise  Price may
be paid in whole or in part (i) in cash,  (ii) in whole  shares  of  Common
Stock owned by the  Employee  and  evidenced  by  negotiable  certificates,
valued at their Fair Market Value  (which  shares of Common Stock must have
been owned by the Employee  six months or longer,  and not used to effect a
stock Option exercise within the preceding six months, unless the Committee
specifically  provides  otherwise),   (iii)  by  Attestation,   (iv)  by  a
combination of such methods of payment,  or (v) by such other consideration
as shall constitute  lawful  consideration for the issuance of Common Stock
and be approved by the Committee (including, without limitation,  effecting
a "cashless  exercise," with a broker, of the Option).  "Attestation" means
the  delivery  to Ashland of a completed  Attestation  Form  prescribed  by
Ashland  setting  forth the  whole  shares  of  Common  Stock  owned by the
Employee  which the Employee  wishes to utilize to pay the Exercise  Price.
The Common Stock listed on the Attestation Form must have been owned by the
Employee  six months or longer,  and not have been used to effect an Option
exercise within the preceding six months, unless the Committee specifically
provides otherwise. The Committee may, in its discretion, authorize payment
of all or any part of the  Exercise  Price  over a period  of not more than
five years  from the date the Option is  exercised,  In such  instance  any
unpaid  balance of the Exercise  Price shall be evidenced by the Employee's
promissory  note payable to the order of Ashland  which shall be secured by
such collateral and shall bear interest at such rate or rates as determined
from time to time by the Committee.

D.  Reload Options

     The Committee shall have the authority to specify at the time of grant
that an Employee shall be granted another Stock Option (a "Reload  Option")
in the event such  Employee  exercises  all or a part of a Stock Option (an
"Original Option") by surrendering in accordance with Section 6, subsection
(C) already owned shares of Common Stock in full or partial  payment of the
Exercise Price under such Original  Option,  subject to the availability of
shares of Common Stock under the Plan at the time of exercise.  Each Reload
Option  shall cover a number of shares of Common  Stock equal to the number
of shares of Common Stock  surrendered  in payment of the  Exercise  Price,
shall have an  Exercise  Price per share of Common  Stock equal to the Fair
Market Value of the Common Stock on the date of grant of such Reload Option
and shall expire on the stated  expiration date of the Original  Option.  A
Reload Option shall be  exercisable  at any time and from time to time from
and after the date of grant of such Reload  Option (or, as the Committee in
its sole  discretion  shall determine at the time of grant, at such time or
times as shall be specified in the Reload Option); provided,  however, that
a  Reload  Option  granted  to  a  Section  16(b)  Optionee  shall  not  be
exercisable  during  the  first six  months  from the date of grant of such
Reload Option. The first such Reload Option may provide for the grant, when
exercised,  of one  subsequent  Reload  Option to the  extent and upon such
terms and  conditions,  consistent  with this Section 6, subsection (D), as
the Committee in its sole discretion  shall specify at or after the time of
grant of such Reload Option. A Reload Option shall contain such other terms
and conditions  which may include a restriction on the  transferability  of
the number of shares of Common Stock received upon exercise of the Original
Option  reduced by a number of shares  equal in value to the tax  liability
incurred  upon exercise as the  Committee in its sole  discretion  may deem
desirable  which may be set forth in the  Agreement  evidencing  the Reload
Option.

SECTION 7. STOCK APPRECIATION RIGHTS

     The  Committee  may grant Stock  Appreciation  Rights  pursuant to the
provisions  of this  Section 7 to any holder of any Option  (including  any
Reload  Option)  granted under the Plan with respect to all or a portion of
the  shares  subject  to the  related  Option.  An SAR may only be  granted
concurrently with the grant of the related Option. Subject to the terms and
provisions  of this  Section 7, each SAR shall be  exercisable  only at the
same time and to the same extent the related Option is  exercisable  and in
no event  after the  termination  of the  related  Option.  An SAR shall be
exercisable  only when the Fair Market Value  (determined as of the date of
exercise  of the SAR) of each share of Common  Stock with  respect to which
the SAR is to be exercised  shall  exceed the  Exercise  Price per share of
Common Stock subject to the related  Option.  An SAR granted under the Plan
shall be exercisable in whole or in part by notice to Ashland.  Such notice
shall state that the holder of the SAR elects to  exercise  the SAR and the
number of  shares  in  respect  of which  the SAR is being  exercised.  For
purposes  of this  Section 7, the date of exercise of an SAR shall mean the
date on which the Company receives such notice.

     Subject  to the  terms  and  provisions  of this  Section  7, upon the
exercise of an SAR,  the holder  thereof  shall be entitled to receive from
Ashland  consideration (in the form hereinafter provided) equal in value to
the excess of the Fair Market Value  (determined as of the date of exercise
of the SAR) of each share of Common  Stock  with  respect to which such SAR
has been  exercised  over the  Exercise  Price per  share of  Common  Stock
subject to the related Option. The Committee may stipulate in the Agreement
the form of  consideration  which shall be received upon the exercise of an
SAR. If no consideration is specified therein, upon the exercise of an SAR,
the holder may  specify  the form of  consideration  to be received by such
holder,  which shall be in shares of Common Stock, or in cash, or partly in
cash and partly in shares of Common  Stock  (valued at Fair Market Value on
the date of exercise of the SAR) , as the holder shall  request;  provided,
however,  that the Committee,  in its sole  discretion,  may disapprove the
form of consideration  requested and instead  authorize the payment of such
consideration in shares of Common Stock (valued as aforesaid),  or in cash,
or partly in cash and partly in shares of Common Stock.

     Upon the  exercise  of an SAR,  the  related  Option  shall be  deemed
exercised  to the  extent of the  number of  shares  of Common  Stock  with
respect to which such SAR is exercised  and to that extent a  corresponding
number of shares of Common Stock shall not again be available for the grant
of Awards under the Plan.  Upon the exercise or  termination of the related
Option,  the SAR with  respect  thereto  shall be  considered  to have been
exercised  or  terminated  to the  extent of the number of shares of Common
Stock  with  respect  to which  the  related  Option  was so  exercised  or
terminated.

SECTION 8. RESTRICTED STOCK AWARDS

A. Awards to Employees

     The  Committee  may  make an  award of  Restricted  Stock to  selected
Employees,  evidenced  by an Agreement  which shall  contain such terms and
conditions as the Committee,  in its sole  discretion,  may determine.  The
amount  of each  Restricted  Stock  Award  and  the  respective  terms  and
conditions of each Award (which terms and  conditions  need not be the same
in each case) shall be determined by the Committee in its sole  discretion.
As a  condition  to any Award  hereunder,  the  Committee  may  require  an
Employee to pay to the Company an amount equal to, or in excess of, the par
value of the shares of  Restricted  Stock  awarded to him or her.  Any such
Restricted  Stock  Award shall  automatically  expire if not  purchased  in
accordance with the Committee's  requirements within thirty (30) days after
the date of grant.  Subject to the terms and conditions of each  Restricted
Stock  Award,  the  Employee,  as the owner of the Common  Stock  issued as
Restricted Stock, shall have all rights of a shareholder including, but not
limited to,  voting rights as to such Common Stock and the right to receive
dividends thereon when, as and if paid.

     In the  event  that a  Restricted  Stock  Award  has  been  made to an
Employee  whose  employment or service is  subsequently  terminated for any
reason  prior to the lapse of all  restrictions  thereon,  such  Restricted
Stock  will  be  forfeited  in its  entirety  by such  Employee;  provided,
however,  that the  Committee  may,  in its  sole  discretion,  limit  such
forfeiture.  Any  Restricted  Stock so forfeited  by an Employee  shall not
again be available for the grant of Awards under the Plan.

     Employees  may be  offered  the  opportunity  to defer the  receipt of
payment of vested  shares of  Restricted  Stock,  and  Common  Stock may be
granted as a bonus for deferral,  under terms as may be  established by the
Committee  from time to time;  however,  in no event shall the Common Stock
granted  as a bonus for  deferral  exceed  20% of the  Restricted  Stock so
deferred.

B. Awards to Outside Directors

     During the term of the Plan, (i) each Outside Director who was granted
an award of restricted stock under the Long-Term  Incentive Plan on January
26, 1989 and who  continues to serve as an Outside  Director on January 31,
1994  shall be  granted  an Award of 1,000  shares of  Restricted  Stock on
January 31, 1994;  (ii) each  Outside  Director who was granted an award of
restricted  stock  under  such  Long-Term  Incentive  Plan other than those
Outside Directors in (i) above shall be granted an Award of 1,000 shares of
Restricted Stock upon the fifth anniversary of his or her prior award under
the Long-Term  Incentive  Plan; and (iii) each person who is hereafter duly
appointed  or elected as an Outside  Director  and who does not  receive an
award under the Long-Term Incentive Plan shall be granted, effective on the
date of his or her  appointment or election to the Board, an Award of 1,000
shares of  Restricted  Stock.  All  Awards  under this  subsection  (B) are
subject to the limitation on the number of shares of Common Stock available
pursuant  to  Section 3 and to the terms and  conditions  set forth in this
subsection (B) and subsection (C) below.

     As a condition to any Award  hereunder,  the Outside  Director will be
required to pay to the  Company a  non-refundable  amount  equal to the par
value of the shares of  Restricted  Stock  awarded to him or her.  Upon the
granting of the  Restricted  Stock Award,  such Outside  Director  shall be
entitled to all rights incident to ownership of Common Stock of the Company
with respect to his or her Restricted Stock, including, but not limited to,
the right to vote such shares of Restricted Stock and to receive  dividends
thereon when, as and if paid;  provided,  however,  that in no case may any
shares  of  Restricted  Stock  granted  to an  Outside  Director  be  sold,
assigned,   transferred,   pledged,  or  otherwise  encumbered  during  the
Restricted  Period  which shall not lapse until the earlier to occur of the
following:  (i) normal  retirement from the Board at age 70, (ii) the death
or  disability  of  such  Outside  Director,  (iii)  a 50%  change  in  the
beneficial  ownership  of the  Company as  defined in Rule 13d-3  under the
Exchange  Act, or (iv)  voluntary  early  retirement  to take a position in
governmental  service.  In the  case  of  voluntary  resignation  or  other
termination  of service of an Outside  Director  prior to the occurrence of
any of the events  described in (i),  (ii),  (iii) or (iv) of the preceding
sentence, any grant of Restricted Stock made to him or her pursuant to this
subsection (B) will be forfeited by such Outside  Director.  Any Restricted
Stock so forfeited by an Outside  Director shall not again be available for
the grant of Awards  under the Plan.  As used herein,  a director  shall be
deemed  "disabled"  when he or she is unable to attend to his or her duties
and  responsibilities as a member of the Board because of incapacity due to
physical or mental illness.

C. Transferability

     Subject to subsection (B) of Section 15 hereof,  Restricted  Stock may
not be sold, assigned, transferred, pledged, or otherwise encumbered during
a Restricted Period,  which, in the case of Employees,  shall be determined
by the  Committee  and which  shall not be less than one year from the date
such Restricted Stock was awarded,  and, in the case of Outside  Directors,
shall be determined in accordance  with  subsection  (B) of this Section 8.
The Committee may, at any time,  reduce the Restricted  Period with respect
to any  outstanding  shares of  Restricted  Stock awarded under the Plan to
Employees,  but in no event shall such  Restricted  Period be less than one
year.

     During the Restricted Period, certificates representing the Restricted
Stock and any Retained Distributions shall be registered in the recipient's
name and bear a  restrictive  legend to the effect that  ownership  of such
Restricted Stock (and any such Retained  Distributions),  and the enjoyment
of all rights appurtenant  thereto are subject to the restrictions,  terms,
and  conditions  provided in the Plan and the  applicable  Agreement.  Such
certificates shall be deposited by the recipient with the Company, together
with stock powers or other  instruments  of  assignment,  each  endorsed in
blank,  which will permit  transfer to the Company of all or any portion of
the Restricted Stock and any securities constituting Retained Distributions
which shall be forfeited  in  accordance  with the Plan and the  applicable
Agreement.  Restricted Stock shall constitute issued and outstanding shares
of Common Stock for all corporate  purposes.  The  recipient  will have the
right to vote such Restricted Stock, to receive and retain all regular cash
dividends,  and to exercise all other rights,  powers,  and privileges of a
holder of Common  Stock with  respect to such  Restricted  Stock,  with the
exception  that (i) the  recipient  will not be entitled to delivery of the
stock certificate or certificates  representing such Restricted Stock until
the restrictions  applicable  thereto shall have expired;  (ii) the Company
will retain  custody of all Retained  Distributions  made or declared  with
respect to the Restricted  Stock (and such Retained  Distributions  will be
subject to the same restrictions, terms and conditions as are applicable to
the  Restricted  Stock) until such time, if ever, as the  Restricted  Stock
with  respect to which such  Retained  Distributions  shall have been made,
paid, or declared shall have become vested, and such Retained Distributions
shall not bear  interest  or be  segregated  in  separate  accounts;  (iii)
subject to subsection (B) of Section 15 hereof, the recipient may not sell,
assign, transfer, pledge, exchange,  encumber, or dispose of the Restricted
Stock or any Retained  Distributions during the Restricted Period; and (iv)
a breach of any restrictions,  terms, or conditions provided in the Plan or
established  by the  Committee  with  respect  to any  Restricted  Stock or
Retained Distributions will cause a forfeiture of such Restricted Stock and
any Retained Distributions with respect thereto.

SECTION 9.  MERIT AWARDS

     The  Committee  may from time to time  make an award of  Common  Stock
under the Plan to selected  Employees  for such reasons and in such amounts
as the Committee, in its sole discretion,  may determine. As a condition to
any such Merit Award,  the  Committee may require an Employee to pay to the
Company an amount equal to, or in excess of, the par value of the shares of
Common Stock awarded to him or her.

SECTION 10. PERFORMANCE SHARES

     The  Committee  may make  awards  of  Common  Stock,  evidenced  by an
Agreement,  to selected  Employees on the basis of the Company's  financial
performance in any given period. Subject to the provisions of the Plan, the
Committee shall have sole and complete authority to determine the Employees
who shall receive such Performance  Shares, to determine the number of such
shares to be granted for each  Performance  Period,  and to  determine  the
duration  of each  such  Performance  Period.  There  may be more  than one
Performance  Period in  existence  at any one  time,  and the  duration  of
Performance Periods may differ from each other.

     The  Committee   shall   establish   performance   measures  for  each
Performance  Period on the basis of such  criteria and to  accomplish  such
objectives as the Committee may from time to time, in its sole  discretion,
determine.  Such measures may include,  but shall not be limited to, return
on  investment,  earnings per share,  return on  shareholders'  equity,  or
return  to  shareholders.   The  performance  measures  determined  by  the
Committee shall be established  prior to the beginning of each  Performance
Period but may be subject to such later  revisions as the  Committee  shall
deem   appropriate.   Performance   Shares  may  not  be  sold,   assigned,
transferred,  pledged, or otherwise  encumbered,  except as herein provided
and as provided in  subsection  (E) of Section 11 and subject to subsection
(B) of Section 15, during the Performance Period.

     The Committee shall determine,  in its sole discretion,  the manner of
payment,  which may include (i) cash, (ii) shares of Common Stock, or (iii)
shares of  Restricted  Stock in such  proportions  as the  Committee  shall
determine. Employees may be offered the opportunity to defer the receipt of
payment of earned Performance  Shares, and Common Stock may be granted as a
bonus for deferral  under terms as may be established by the Committee from
time to time;  however,  in no event  shall the Common  Stock  granted as a
bonus for deferral exceed 20% of the Performance Shares so deferred.

     An  Employee  must  be  employed  by  the  Company  at  the  end  of a
Performance Period in order to be entitled to payment of Performance Shares
in  respect  of such  period;  provided,  however,  that in the event of an
Employee's  cessation of employment  before the end of such period, or upon
the occurrence of his or her death,  retirement,  or  disability,  or other
reason  approved  by  the  Committee,   the  Committee  may,  in  its  sole
discretion, limit such forfeiture.

SECTION 11. CONTINUED EMPLOYMENT, AGREEMENT TO SERVE AND EXERCISE PERIODS

     (A) Subject to the  provisions of  subsection  (F) of this Section 11,
every Option (other than a Reload Option) and SAR shall provide that it may
not be  exercised  in whole or in part for a period  of one year  after the
date of granting such Option (unless otherwise determined by the Committee)
and, if the  employment  of the Employee  shall  terminate,  for any reason
other than  death or  disability  (as  defined  in  subsection  (C) of this
Section 11) as  determined by the  Committee,  prior to the end of such one
year period or with  respect to any Reload  Option such other period as may
be specified by the  Committee  within which such Reload  Option may not be
exercised, the Option granted to such Employee shall immediately terminate.

     (B) Every  Option shall  provide  that in the event the Employee  dies
while  employed  by  Ashland;  during  the period in which  Options  may be
exercised  by  an  Employee  determined  to  be  disabled  as  provided  in
subsection  (C) of this Section 11, or within three months after  cessation
of employment for any cause, such Option shall be exercisable,  at any time
or from time to time, prior to the fixed  termination date set forth in the
Option, by the Beneficiaries of the decedent for the number of shares which
the Employee could have acquired under the Option  immediately prior to the
Employee's death.

     (C) Every Option shall provide that in the event the employment of any
Employee  shall  cease  by  reason  of  disability,  as  determined  by the
Committee  at any time during the term of the Option,  such Option shall be
exercisable,  at any  time or from  time to time by such  Employee  for the
number of shares which the Employee  could have  acquired  under the Option
immediately  prior  to the  Employee's  disability.  An  Option  held by an
Employee  determined by the Committee to be disabled prior to September 19,
1996  shall  be  exercisable  during a  period  of one  year of  continuing
disability   following   termination   of  employment  by  reason  of  such
disability. An Option held by an Employee determined by the Committee to be
disabled on or after  September 19, 1996 shall be  exercisable  at any time
prior to the  fixed  termination  date set  forth  in the  Option.  As used
herein, an Employee will be deemed "disabled" when he or she becomes unable
to perform the functions required by his or her regular job due to physical
or mental illness and, in connection  with the grant of an Incentive  Stock
Option,  shall be deemed  disabled if he or she falls within the meaning of
that term as provided in Section 22(e)(3) of the Code. The determination by
the Committee of any question involving  disability shall be conclusive and
binding.

     (D) Every Option shall provide that in the event the employment of any
Employee shall cease by reason of Retirement,  such Option may be exercised
only in  respect  of the  number of shares  which the  Employee  could have
acquired under the Option  immediately  prior to such  Retirement.  Options
held by an  Employee  who  retires  prior to  September  19,  1996 shall be
exercisable for a period of three years after such Retirement  date,  which
three-year  period may be  extended  at the  discretion  of the  Committee.
Options held by an Employee who retires on or after September19, 1996 shall
be exercisable until the fixed termination date set forth in the Option.

     (E) Except as provided in  subsections  (A),  (B),  (C) (D) and (F) of
this Section 11, every Option shall provide that it shall  terminate on the
earlier to occur of the fixed  termination  date set forth in the Option or
three months after  cessation of the  Employee's  employment  for any cause
only in  respect  of the  number of shares  which the  Employee  could have
acquired  under  the  Option   immediately   prior  to  such  cessation  of
employment;  provided,  however,  that no Option may be exercised after the
fixed termination date set forth in the Option.

     (F)  Notwithstanding any provision of this Section 11 to the contrary,
any Award granted pursuant to the Plan,  except a Restricted Stock Award to
Outside Directors,  which is governed by Section 8, subsection (B), may, in
the  discretion of the Committee or as provided in the relevant  Agreement,
become  exercisable,  at any time or from time to time,  prior to the fixed
termination  date set  forth in the Award  for the full  number of  awarded
shares or any part thereof,  less such numbers as may have been theretofore
acquired under the Award (i) from and after the time the Employee ceases to
be an Employee of Ashland as a result of the sale or other  disposition  by
Ashland  of assets or  property  (including  shares of any  Subsidiary)  in
respect of which such Employee had theretofore been employed or as a result
of which such  Employee's  continued  employment  with Ashland is no longer
required,  and (ii) in the case of a Change in Control of Ashland, from and
after the date of such Change in Control.

     (G) Each Employee  granted an Award under this Plan shall agree by his
or her  acceptance  of such Award to remain in the service of Ashland for a
period of at least one year from the date of the Agreement  respecting  the
Award between Ashland and the Employee.  Such service shall, subject to the
terms of any contract between Ashland and such Employee, be at the pleasure
of Ashland and at such  compensation as Ashland shall reasonably  determine
from time to time. Nothing in the Plan, or in any Award granted pursuant to
the Plan,  shall  confer on any  individual  any right to  continue  in the
employment  of or service to Ashland or interfere in any way with the right
of Ashland to terminate the Employee's employment at any time.

     (H) Subject to the  limitations  set forth in Section 422 of the Code,
the  Committee  may  adopt,  amend,  or  rescind  from  time to  time  such
provisions as it deems  appropriate with respect to the effect of leaves of
absence approved by any duly authorized  officer of Ashland with respect to
any Employee.

SECTION 12. WITHHOLDING TAXES

     Federal,  state or local  law may  require  the  withholding  of taxes
applicable  to  gains  resulting  from the  exercise  of an  Award.  Unless
otherwise  prohibited by the Committee,  each Employee may satisfy any such
tax  withholding  obligation  by  any  of  the  following  means,  or  by a
combination of such means: (i) a cash payment,  (ii) authorizing Ashland to
withhold from the shares of Common Stock otherwise issuable to the Employee
pursuant to the exercise or vesting of an Award a number of shares having a
Fair Market Value, as of the Tax Date, which will satisfy the amount of the
withholding tax obligation,  or (iii) by delivery to Ashland of a number of
shares of Common  Stock having a Fair Market Value as of the Tax Date which
will satisfy the amount of the withholding  tax obligation  arising from an
exercise  or  vesting  of an  Award.  An  Employee's  election  to pay  the
withholding tax obligation by (ii) or (iii) above must be made on or before
the Tax Date, is irrevocable, is subject to such rules as the Committee may
adopt, and may be disapproved by the Committee.  If the amount requested is
not paid, the Committee may refuse to issue Common Stock under the Plan.

SECTION 13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

     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 stockholders other than cash
dividends,  the number or kind of shares that may be issued  under the Plan
pursuant  to Section 3 and the number or kind of shares  subject to, or the
price per share under any outstanding Award shall be automatically adjusted
so that the  proportionate  interest of the  Employee  or Outside  Director
shall be maintained as before the occurrence of such event. Such adjustment
shall be conclusive and binding for all purposes of the Plan.

SECTION 14. AMENDMENTS AND TERMINATIONS

     Unless the Plan shall have been  terminated as  hereinafter  provided,
the Plan  shall  terminate  on, and no Award  (other  than  Reload  Options
automatically granted pursuant to Section 6) shall be granted after January
26,  1998.  The  plan  may  be  terminated,  modified  or  amended  by  the
shareholders of the Company. The Board may at any time terminate, modify or
amend  the Plan in such  respects  as it shall  deem  advisable;  provided,
however,  that the Board may not,  without  approval  by the  holders  of a
majority  of the  outstanding  shares of stock  present  and  voting at any
annual or special meeting of shareholders of Ashland:  (i) increase (except
as provided in Section 13) the maximum number of shares which may be issued
pursuant  to the Awards  granted  under the Plan,  (ii) change the class of
persons eligible to receive Awards,  (iii) change the manner of determining
the minimum  Exercise  Price of Options  other than to change the manner of
determining  the Fair  Market  Value of the  Common  Stock as set  forth in
Section 2, (iv)  extend the period  during  which  Awards may be granted or
exercised,  or (v) amend any  provision  of the Plan  insofar as it applies
specifically to Restricted Stock Awards granted or to be granted to Outside
Directors.

SECTION 15. MISCELLANEOUS PROVISIONS

     (A) Except as to Awards to Outside  Directors,  no  Employee  or other
person shall have any claim or right to be granted an Award under the Plan.

     (B) An Employee's or Outside  Director's rights and interest under the
Plan may not be  assigned  or  transferred  in  whole  or in  part,  either
directly or by  operation  of law or  otherwise  (except in the event of an
Employee's or Outside  Director's death, by will or the laws of descent and
distribution),  including, but not by way of limitation,  execution,  levy,
garnishment,  attachment, pledge, bankruptcy or in any other manner, and no
such right or  interest  of any  Employee  or Outside  Director in the Plan
shall  be  subject  to any  obligation  of  liability  of such  individual;
provided,  however,  that an  Employee's or Outside  Director's  rights and
interest under the plan may, subject to the discretion and direction of the
Committee, be made transferable by such Employee or Outside Director during
his or her  lifetime.  Except as  specified  in Section 8, the holder of an
Award  shall  have none of the  rights of a  shareholder  until the  shares
subject  thereto  shall  have  been  registered  in the name of the  person
receiving or person or persons  exercising  the Award on the transfer books
of the Company.

     (C) No Common Stock shall be issued  hereunder  unless counsel for the
Company shall be satisfied  that such  issuance will be in compliance  with
applicable Federal, state, and other securities laws.

      (D) The expenses of the Plan shall be borne by the Company.

     (E) By accepting  any Award under the Plan,  each Employee and Outside
Director and each Personal  Representative or Beneficiary claiming under or
through him or her shall be  conclusively  deemed to have  indicated his or
her acceptance and  ratification of, and consent to, any action taken under
the Plan by the Company, the Board or the Committee.

     (F) Awards  granted under the Plan shall be binding upon Ashland,  its
successors, and assigns.

     (G) The  appropriate  officers of the Company  shall cause to be filed
any reports,  returns,  or other information  regarding Awards hereunder or
any Common Stock issued pursuant hereto as may be required by Section 13 or
15(d) of the  Exchange  Act,  or any other  applicable  statute,  rule,  or
regulation.

     (H)  Nothing  contained  in this  Plan  shall  prevent  the  Board  of
Directors  from  adopting  other or additional  compensation  arrangements,
subject to shareholder approval if such approval is required.

     (I) Each  Employee  shall be deemed to have been  granted any Award on
the date the  Committee  took  action to grant such Award under the Plan or
such later date as the Committee in its sole discretion  shall determine at
the time such grant is authorized;  provided, however, that a Reload Option
shall be  deemed  to have been  granted  on the date on which the  Original
Option  is  exercised  or such  later  date as the  Committee  in its  sole
discretion  shall determine prior to the date on which such exercise occurs
and a subsequent  Reload Option shall be deemed to have been granted on the
date on which the underlying  Reload Option is exercised or such later date
as the Committee in its sole  discretion  shall determine prior to the date
on which such exercise occurs.

SECTION 16. EFFECTIVENESS OF THE PLAN

     The Plan shall be  submitted  to the  shareholders  of the Company for
their  approval  and  adoption on January 28, 1993 or such other date fixed
for the next meeting of  shareholders  or any  adjournment or  postponement
thereof.  The  Plan  shall  not be  effective  and no  Award  shall be made
hereunder  unless and until the Plan has been so approved  and adopted at a
meeting of the Company's shareholders.

SECTION 17. GOVERNING LAW

     The  provisions  of this Plan shall be  interpreted  and  construed in
accordance with the laws of the Commonwealth of Kentucky.