Exhibit 10.7

                            INDEMNIFICATION AGREEMENT

     This  Agreement  is made this ______ day of  _______________,  200____
between  ASHLAND  INC.,  a  Kentucky  corporation   ("Company"),   and  the
undersigned individual ("Director").

                                   WITNESSETH:

     WHEREAS, Director is a member of the Board of Directors of Company and
in such capacity is performing a valuable service for Company; and

     WHEREAS,  Article X of the Third Restated Articles of Incorporation of
Company  (the  "Article")  authorizes  Company to  indemnify  directors  of
Company to the maximum extent permitted by law; and

     WHEREAS,  the Article  authorizes Company to enter into contracts with
members of its Board of Directors with respect to  indemnification  of such
directors; and

     WHEREAS,  recent  developments  with respect to the  applications  and
enforcement of indemnification provisions and the availability of insurance
to protect  directors against  liabilities  generally have raised questions
concerning  the  adequacy and  reliability  of the  protection  afforded to
directors thereby; and

     WHEREAS, to provide greater certainty with respect to Director's right
to indemnification and the payment thereof,  and thereby induce Director to
serve as a member  of the  Board  of  Directors  of  Company,  Company  has
determined and agreed to enter into this Agreement with Director.

     Now, THEREFORE, in consideration of Director's agreement to serve as a
Director  after the date of this  Agreement,  Company and Director agree as
follows:

     1. INDEMNITY OF DIRECTOR.  Subject only to the exclusions set forth in
Sections 2 and 12 of this Agreement, Company hereby agrees to hold harmless
and indemnify  Director  against any and all reasonable  costs and expenses
(including,  but not  limited  to,  attorneys'  fees)  and any  liabilities
(including, but not limited to, judgments,  fines, penalties and reasonable
settlements)  paid by or on behalf  of, or  imposed  against,  Director  in
connection with any threatened, pending or completed claim, action, suit or
proceeding,   whether   civil,   criminal,   administrative,   legislative,
investigative or other (including any appeal relating  thereto) and whether
made or  brought  by or in the  right of  Company  or  otherwise,  in which
Director  is,  was or at  any  time  becomes  a  party  or  witness,  or is
threatened to be made a party or witness,  or  otherwise,  by reason of the
fact that  Director  is, was or at any time  becomes a  director,  officer,
employee  or agent of Company or a  director,  officer,  partner,  trustee,
employee or agent of an Affiliate of Company,  as hereafter defined, or any
employee  benefit plan  maintained by Company or any Affiliates of Company.
As used in this Agreement,  an Affiliate of Company means any  corporation,
partnership  or other entity which,  directly or indirectly,  controls,  is
controlled by or is under common control with Company.

<PAGE>

     2.  LIMITATIONS  ON INDEMNITY.  No indemnity  pursuant to Section 1 of
this Agreement shall be paid by Company:

     A. if a court of competent  jurisdiction  renders a final adjudication
on the merits,  in an action,  suit or  proceeding  in which  Director is a
party,  that [i] such  indemnification  is  prohibited  by law;  or [ii] in
connection with a proceeding by or in the right of the Company in which the
Director was adjudged liable to the Company; or

     B. in connection with any transaction with respect to which a court of
competent  jurisdiction  renders a final  adjudication on the merits, in an
action,  suit  or  proceeding  in  which  Director  is a  party,  [i]  that
Director's  personal  financial interest was in conflict with the financial
interests of Company or its shareholders,  or [ii] that Director derived an
improper personal benefit; or

     C. on account of acts or  omissions  of Director to the extent a court
of competent jurisdiction renders a final adjudication on the merits, in an
action,  suit or proceeding in which Director is a party, that such acts or
omissions  [i]  were  not in  good  faith,  or  [ii]  involved  intentional
misconduct, or [iii] were known to Director to be a violation of law; or

     D. in respect of any liability to Company,  to the extent that a court
of competent jurisdiction renders a final adjudication on the merits, in an
action,  suit or  proceeding  in  which  Director  is a  party,  that  such
liability to Company  arises under any federal or state  statute  providing
for liability directly to Company by reason of the fact that Director is or
was a director of Company, including, by way of example and not limitation,
liability  under Section 16(b) of the  Securities  Exchange Act of 1934, as
amended (the "Exchange Act"); or

     E. to the  extent and only to the  extent  that,  prior to a Change of
Control,  as hereinafter  defined,  a majority of the Board of Directors of
Company or a duly designated  committee thereof,  in either case consisting
of directors who are not at the time parties to the claim,  action, suit or
proceeding against Director,  determines that the amount of expenses and/or
settlements for which indemnification is sought is unreasonable; or

     F. in connection  with any claim,  suit,  action or proceeding  [i] if
such claim,  action, suit or proceeding was initiated by Director or his or
her  personal  or  legal   representative,   or  involved   the   voluntary
solicitation  or  intervention  by Director or his or her personal or legal
representative (other than an action to enforce  indemnification  rights or
an  action  initiated  with the  approval  of a  majority  of the  Board of
Directors  who are not at the time  parties to the claim,  action,  suit or
proceeding),  or  [ii] to the  extent  that  such  claim,  action,  suit or
proceeding  arose as a result of acts or  omissions  of Director  occurring
prior to the date of this Agreement.


<PAGE>


     For purposes of this Agreement,  a "Change in Control" shall be deemed
to have  occurred  if [i] any  "person"  (as such term is used in  Sections
13(d)  and  14(d) of the  Exchange  Act),  other  than a  trustee  or other
fiduciary holding securities under an employee benefit plan of Company or a
corporation owned,  directly or indirectly,  by the shareholders of Company
in  substantially  the  same  proportions  as their  ownership  of stock of
Company,  is or becomes  the  "beneficial  owner" (as defined in Rule 13d-3
under the Exchange  Act),  directly or  indirectly of securities of Company
representing  20% or more of the combined  voting  power of Company's  then
outstanding  voting  securities;  or [ii] during any period of  twenty-four
(24) consecutive months (not including any period prior to the date of this
Agreement), individuals who at the beginning of such period constituted the
Board of Directors  of Company and any new director  (other than a director
designated  by a person who has entered into an  agreement  with Company to
effect a transaction  described in clauses [ii] or [iii] of this Paragraph)
whose  election by the Board of  Directors  or  nomination  for election by
Company's  shareholders was approved by a vote of at least two-thirds (2/3)
of the  directors  then still in office who either  were  directors  at the
beginning of the period or whose  election or  nomination  for election was
previously  so approved,  cease for any reason to  constitute a majority of
the Board of  Directors  or [iii] the  shareholders  of  Company  approve a
merger or consolidation of Company with any other  corporation,  other than
(a) a merger  or  consolidation  of the  Company  into or with a direct  or
indirect  wholly-owned  subsidiary,  or (b) a merger or consolidation which
would  result  in the  voting  securities  of the  Company  outstanding  or
converted into voting securities of the surviving entity being at least 70%
of the combined  voting power of the voting  securities  of Company or such
surviving   entity   outstanding   immediately   after   such   merger   or
consolidation;  or [iv]  the  shareholders  of  Company  approve  a plan of
complete liquidation of Company or an agreement for the sale or disposition
by Company of all or  substantially  all of the  assets  owned by  Company,
whether  directly  or  indirectly;  provided,  however,  that  no  sale  or
disposition  of all or  substantially  all of the  assets  owned by Company
shall be deemed to occur unless assets constituting 80% of the total assets
of the  Company  are  transferred  pursuant  to such  sale or  disposition.
Notwithstanding the foregoing, any transaction,  or series of transactions,
that shall  result in the  disposition  of  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.

     3.  CONTINUATION  OF INDEMNITY.  All  agreements  and  obligations  of
Company  contained  in this  Agreement  shall  continue  during  the period
Director serves in any capacity entitling Director to indemnification under
this Agreement and shall  continue  thereafter so long as Director shall be
subject to any possible claim or threatened,  pending or completed  action,
suit or proceeding, whether civil, criminal, administrative, legislative or
investigative, or other, arising as a result of acts or omissions occurring
during the period Director served as a director of Company.

<PAGE>


     4.  NOTIFICATION  OF  CLAIM.  It shall  be a  condition  precedent  to
indemnification under this Agreement that, within twenty days after receipt
by Director of actual notice that  Director is or will be a party,  witness
or  otherwise  involved  in any  threatened  or  pending  action,  suit  or
proceeding  described in Section 1 of this  Agreement,  Director shall have
notified Company in writing of the assertion or commencement  thereof;  but
the omission to so notify  Company  will not relieve it from any  liability
which it may have to Director otherwise than under this Agreement.

     5. ADVANCEMENT OF COSTS AND EXPENSES.  The costs and expenses incurred
by Director in  investigating,  defending or appealing  any  threatened  or
pending  claim or any  threatened  or pending  action,  suit or  proceeding
described in Section 1 of this Agreement  shall,  at the written request of
Director, be paid by Company within ten (10) days after receiving copies of
invoices  presented  to Director  for such costs and expenses in advance of
final  judgment  or  settlement  with the  understanding,  undertaking  and
agreement  hereby  made and  entered  into by Director  and  Company,  that
Director shall, if it is ultimately determined in accordance with Section 2
or pursuant to Section 12 that Director is not entitled to be  indemnified,
or was not entitled to be fully indemnified,  repay to Company such amount,
or the appropriate portion thereof, so paid or advanced.  Such advancements
shall be made at least quarterly.

     6.  ENFORCEMENT.  If a claim for payment  under this  Agreement is not
paid in full by Company  within ninety days after a written demand has been
delivered by Director to Company, or within thirty days after delivery of a
written  demand by Director to Company based upon a final and  unappealable
judgment of a court of  competent  jurisdiction,  Director  may at any time
thereafter  bring suit against  Company to recover the unpaid amount of the
claim  and,  if  successful  in whole or in part,  Director  shall  also be
entitled to be paid all costs and  expenses  (including  but not limited to
attorneys' fees) incurred by Director in prosecuting such suit. In any suit
brought by Director to enforce this Agreement, the burden of proof shall be
on Company to establish  that Director is not entitled to the relief sought
under this Agreement.

     7.  ESTABLISHMENT  OF SECURITY.  In the event of a Potential Change in
Control,  as hereafter  defined,  Company  shall,  upon written  request of
Director,  obtain an  irrevocable  letter of credit  issued by a commercial
bank,  satisfactory  to  Director,  which  letter of credit shall be in the
amount of $10,000,000, shall have a term of ten years, shall name Director,
and  Director's  spouse,  heirs and personal and legal  representatives  as
beneficiary and shall permit  Director,  and Director's  heirs and personal
and legal representatives to draw thereunder from time to time such amounts
as are due and owing to Director under this Agreement,  whether in the form
of an  advancement  or  indemnification  or  otherwise,  upon  delivery  of
Director's  certificate  to the effect that Director is entitled to be paid
such  amounts  pursuant to the terms of this  Agreement.  The issuer of the
letter of credit shall be chosen by

<PAGE>

Director  and all  expenses,  fees  and  other  disbursements  incurred  in
connection with the issuance and enforcement of such letter of credit shall
be paid by Company.  Obtaining a letter of credit shall not relieve Company
of any of its obligations under this Agreement.

     The parties  acknowledge that Director will have no adequate remedy at
law if Company  breaches  its  obligations  under this Section 7, and agree
that, in addition to any other  remedies  which may be available,  Director
shall be entitled to the equitable  remedy of specific  performance  in the
event of a breach  or  threatened  breach  by  Company  of its  obligations
hereunder.  Director and Company  further agree that a monetary  remedy for
breach  of  this  Agreement,  at  some  later  date,  will  be  inadequate,
impracticable  and  difficult  to prove and further  agree that such breach
would cause Director  irreparable harm.  Accordingly,  Director and Company
agree that Director shall be entitled to temporary and permanent injunctive
relief to enforce this  Agreement  without the necessity of proving  actual
damages or  irreparable  harm.  Director  and  Company  further  agree that
Director shall be entitled to such injunctive relief,  including  temporary
restraining  orders,  preliminary  injunctions  and permanent  injunctions,
without the  necessity of posting bond or other  undertaking  in connection
therewith.  Any such requirement of bond or undertaking is hereby waived by
Company.

     For purposes of this Agreement,  a "Potential Change in Control" shall
be deemed to have  occurred if [i] Company  enters into an  agreement,  the
consummation  of which  would  result  in the  occurrence  of a  Change  in
Control;  [ii] any person,  other than a trustee or other fiduciary holding
securities  under an  employee  benefit  plan of Company  or a  corporation
owned,   directly  or  indirectly,   by  the  stockholders  of  Company  in
substantially  the same proportions as their ownership of stock of Company,
who is on the date hereof,  or hereafter  becomes,  the  beneficial  owner,
directly or  indirectly,  of  securities  of Company  representing  fifteen
percent  (15%)  or more of the  combined  voting  power of  Company's  then
outstanding  voting  securities,  hereafter  or  thereafter  increases  its
beneficial  ownership of such securities by one-half  percent (.5%) or more
over the  percentage  so owned by such  person on the date hereof or on the
date of becoming such a beneficial  owner;  or [iii] the Board of Directors
of Company  adopts a resolution  to the effect  that,  for purposes of this
Agreement, a Potential Change in Control has occurred.

     8.  CONTRIBUTION.  If the full indemnity provided in Section 1 of this
Agreement may not be paid to Director because of any exclusion in Section 2
of this  Agreement,  then in  respect of any  actual or  threatened  claim,
action, suit or proceeding in which Company is jointly liable with Director
(or would be if joined  in such  claim)  Company  shall  contribute  to the
amount of expenses and liabilities  incurred by Director in such proportion
as is appropriate to reflect [i] the relative  benefits received by Company
on the one hand and  Director on the other hand from the acts or  omissions
from  which  such  claim,  action,  suit or  proceeding  arose and [ii] the
relative fault of Company, including its other directors, officers, agents,
employees and other representatives, on the one hand and of Director on the
other hand in connection  with the acts or omissions which resulted in such
claim, action, suit or proceeding,  as well as any other relevant equitable
considerations. The relative

<PAGE>


fault  of  Company,  including  its  other  directors,   officers,  agents,
employees and other representatives, on the one hand and of Director on the
other hand shall be determined  by reference  to, among other  things,  the
parties' relative intent, knowledge,  access to information and opportunity
to correct or prevent the  circumstances  resulting in such claim,  action,
suit or proceeding.  Company agrees that it would not be just and equitable
if  contribution  pursuant to this  Section 8 were  determined  by pro rata
allocation  or any other  method  of  allocation  which  does not take into
account the foregoing equitable considerations.

     9. PARTIAL  INDEMNITY.  If Director is entitled under any provision of
this Agreement to  indemnification  by Company for some or a portion of the
costs,   expenses,   judgments,   fines,  penalties  and  amounts  paid  in
settlement,   but  not  for  the  total  amount   thereof,   Company  shall
nevertheless  indemnify  Director for the portion thereof to which Director
is entitled.

     10. NON-EXCLUSIVITY. The rights of Director under this Agreement shall
be in  addition  to any  other  rights  Director  may have  under the Third
Restated Articles of Incorporation or By-laws of Company,  both as amended,
agreement,  vote of shareholders or disinterested directors, as a matter of
law or otherwise.

     11.  SUBROGATION.  In the event of any payment  under this  Agreement,
Company  shall be  subrogated  to the extent of such  payment to all of the
rights of recovery of Director,  who shall execute all papers  required and
shall do everything that may be necessary to secure such rights,  including
the execution of such documents  necessary to enable Company effectively to
bring suit to enforce such rights.

     12. NO DUPLICATION OF PAYMENTS. Company shall not be liable under this
Agreement to make any payment to the extent Director has otherwise actually
received payment (under any insurance  policy,  By-law or otherwise) of the
amounts otherwise  payable by Company under this Agreement.  Director shall
use best  efforts to collect from all third  parties any amounts  otherwise
payable by Company under this Agreement. If Director is entitled to but has
not  received  payment from a third party  (under any  insurance  policy or
otherwise)  of  amounts   otherwise  payable  by  the  Company  under  this
Agreement,  Company shall  nevertheless  pay Director such amounts with the
understanding,  undertaking  and agreement  hereby made and entered into by
Director  and Company that  Director  will repay to Company such amounts to
the extent they are ultimately paid to Director by such third party.

        13. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors and assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of Company, heirs, and personal and legal representatives;
provided, however, that this Agreement is personal to Director and may not be
transferred or encumbered by Director in any way.

     14. SEVERABILITY.  The provisions of this Agreement shall be severable
in the event that any of the  provisions  hereof  (including  any provision
within a single

<PAGE>


section,   paragraph  or  sentence)  are  held  by  a  court  of  competent
jurisdiction  to be  invalid,  void  or  otherwise  unenforceable,  and the
remaining  provisions  shall  remain  enforceable  to  the  fullest  extent
permitted by law.

     15.  CHANGE  IN LAW.  To the  extent  that a change  in  Kentucky  law
(whether   by  statute  or  judicial   decision)   shall   permit   broader
indemnification or advancement of expenses than is provided under the terms
of the By-laws of Company and this Agreement, Director shall be entitled to
such broader indemnification and advancements,  and this Agreement shall be
deemed to be amended to such extent.

     16. GOVERNING LAW; AMENDMENT.

     A. This Agreement shall be interpreted and enforced in accordance with
the laws of the Commonwealth of Kentucky.

     B.  Except  as  provided  in  paragraph  15  hereof,   no   amendment,
modification,  termination  or  cancellation  of this  Agreement  shall  be
effective unless in writing signed by both parties hereto.

     17.  NOTICES.  Any notice to Company or Director  under this Agreement
shall be in writing and shall be delivered  personally or sent by overnight
courier service or certified mail:

        If to Company:                       Ashland Inc.
                                             50 E. RiverCenter Blvd.
                                             P.O. Box 391
                                             Covington, Kentucky 41012-0391
                                             Attn: Secretary

        If to Director:                     NAME
                                            ADDRESS



     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.

                                  ASHLAND INC.

                                  By:
                                     ---------------------------------------

                                     Title:  Chairman of the Board and Chief
                                             Executive Officer

                                  Director:


                                  NAME
                                      --------------------------------------