ASHLAND INC.
           DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
                      (Amended as of November 7, 2002)


ARTICLE I.  GENERAL PROVISIONS

     1. PURPOSE

     The  purpose  of this  Ashland  Inc.  Deferred  Compensation  Plan For
Non-Employee  Directors  (the "Plan") is to provide each  Director  with an
opportunity  to  defer  some or all of the  Director's  Fees as a means  of
saving for  retirement or other  purposes.  In addition,  the Plan provides
Directors  with the ability to increase their  proprietary  interest in the
Company's long-term  prospects by permitting  Directors to receive all or a
portion of their Fees in Ashland Common Stock.

     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) "Act" means the  Securities  Act of 1933,  as amended from time to
time.

     (c) "Beneficiary"  means the person(s)  designated by a Participant in
accordance with Article IV, Section 1.

     (d)  "Board"  means the Board of  Directors  of  Ashland  Inc.  or its
designee.

     (e) "Business Day" means a day on which the New York Stock Exchange is
open for trading activity.

     (f) "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 the Company or any subsidiary or employee
benefit  plan  or  trust  maintained  by  the  Company,  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.

     (g) "Code"  means the Internal  Revenue Code of 1986,  as amended from
time to time.

     (h)  "Committee on Directors"  means the Committee on Directors of the
Board or its designee.

     (i) "Common Stock" means the common stock, $1.00 par value, of Ashland
Inc.

     (j) "Common Stock Fund" means that investment option,  approved by the
Committee on Directors, in which a Participant's  Retirement Account may be
deemed  to  be  invested  and  may  earn  income  based  on a  hypothetical
investment in Common Stock.

     (k) "Company" means Ashland Inc., its divisions and subsidiaries.

     (l) "Corporate  Human  Resources"  means the Corporate Human Resources
Department of the Company.

     (m)  "Credit  Date"  means the date on which any Fees 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) "Deferral Account" means the account(s) to which the Participant's
Deferred Fees are credited and from which, pursuant to Article III, Section
5, distributions are made.

     (o) "Deferred  Fees" means the Fees elected by the  Participant  to be
deferred pursuant to the Plan.

     (p) "Director" means any non-employee director of the Company.

     (q)  "Disability"  means a Director's  incapacity,  due to physical or
mental  illness,  resulting  in an inability to attend to his or her duties
and responsibilities as a member of the Board.

     (r) "Election"  means a Participant's  delivery of a written notice of
election to the  Secretary of the Company  electing to defer payment of his
or her Fees or to receive such Fees in the form of Common Stock.

     (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) "Fees" mean the annual  retainer and meeting  fees, as well as any
per diem compensation for special assignments, earned by a Director for his
or her service as a member of the Board  during a calendar  year or portion
thereof.

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

     (w) "Participant" means a Director who has elected to defer payment of
all or a portion of his or her Fees  and/or to receive  all or a  specified
portion of his or her Fees in shares of Common Stock.

     (x)  "Payment  Commencement  Date" means the date  payments of amounts
deferred begin pursuant to Article III, Section 6.

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

     (z) "Plan"  means this  Ashland Inc.  Deferred  Compensation  Plan For
Non-Employee Directors.

     (aa)  "Stock  Account"  means  an  account  by that  name  established
pursuant to Article III, Section 1.

     (bb)  "Stock  Unit(s)"  means  the  share  equivalents  credited  to a
Participant's Stock Account pursuant to Article III, Section 1.

     (cc)  "Termination"  means retirement from the Board or termination of
service as a Director for any other reason.

     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  (b)  below.  Such  shares  shall  be
authorized but unissued shares of Common Stock.

     (b) Adjustments in Certain  Events.  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  shareholders  other than cash  dividends,  the number or kind of
shares that may be issued under the Plan shall be automatically adjusted so
that the  proportionate  interest of the  Directors  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

     Any  non-employee  Director  of  the  Company  shall  be  eligible  to
participate in the Plan.





     5. ADMINISTRATION

     Full power and  authority to construe,  interpret and  administer  the
Plan  shall be  vested  in the  Company  and the  Committee  on  Directors.
Decisions of the Company and the  Committee  on  Directors  shall be final,
conclusive and binding upon all parties.  Day-to-day  administration of the
Plan  shall  be the  responsibility  of  Corporate  Human  Resources.  This
Department  may authorize new or modify  existing  forms for use under this
Plan so long as any such  modified or new forms are not  inconsistent  with
the terms of the Plan.

     ARTICLE II. COMMON STOCK PROVISION

     Each Director may elect to receive all or a portion of his or her Fees
in shares of Common  Stock by making an Election  pursuant to Article  III,
Section  4.  Shares  shall be  issued  to the  Director  at the end of each
quarter  beginning in the quarter the Election is effective.  The number of
shares of Common Stock so issued shall be equal to the amount of Fees which
otherwise  would have been  payable  to such  Director  during the  quarter
divided by the Fair  Market  Value.  Only whole  number of shares of Common
Stock will be issued, with any fractional shares to be paid in cash.

     ARTICLE III. DEFERRED COMPENSATION

     1. PARTICIPANT ACCOUNTS

     (a)  Upon  election  to  participate  in  the  Plan,  there  shall  be
established  a  Deferral  Account  to which  there  shall be  credited  any
Deferred  Fees as of each  Credit  Date.  The  Deferral  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 on Directors,
which may include a Common Stock Fund, as elected by the Participant  under
the terms of Article III, Section 4.

     (b) The Stock  Account  of a  Participant  shall be  credited  on each
Accounting  Date with Stock  Units  equal to the number of shares of Common
Stock (including  fractions of a share) that could have been purchased with
the amount of such deferred Fees as to which a stock deferral  election has
been made at the Fair Market Value on the  Accounting  Date. As of the date
of any dividend  distribution  date for the Common Stock, the Participant's
Stock Account shall be credited  with  additional  Stock Units equal to the
number of shares of Common  Stock  (including  fractions  of a share)  that
could have been purchased,  at the Fair Market Value on such date, with the
amount  which  would have been paid as  dividends  on that number of shares
(including  fractions  of a share)  of Common  Stock  which is equal to the
number of Stock Units then credited to the Participant's Stock Account.

     2. FINANCIAL HARDSHIP

     Upon the written request of a Participant or a Participant's  Personal
Representative  and a finding  that  continued  deferral  will result in an
unforeseeable  financial  hardship to the  Participant,  the  Committee  on
Directors or the Company  (each in its sole  discretion)  may authorize (a)
the  payment  of all or a part of a  Participant's  Deferral  Account  in a
single installment prior to his or her ceasing to be a Director, or (b) the
acceleration of payment of any multiple installments hereof. 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. If
the  Participant  requesting such a payment is a member of the Committee on
Directors,  the Participant  shall abstain from the Committee on Directors'
determination as to whether the payment shall be made.

     3. ACCELERATED DISTRIBUTION

     (a) Availability of Withdrawal  Prior to Termination.  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  Deferral Account at any time prior to the time such Deferral
Account otherwise  becomes payable under the Plan,  provided the conditions
specified in  subsections  (c), (d) and (e) of this Article III,  Section 3
are satisfied.

     (b) Acceleration of Periodic Distributions.  Upon the written election
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 subsection (c) and (e) of this Article
III, Section 3 are satisfied.

     (c)  Forfeiture  Penalty.  In the event of a  withdrawal  pursuant  to
subsection  (a)  of  this  Article  III,   Section  3,  or  an  accelerated
distribution pursuant to subsection (b) of this Article III, Section 3, the
Participant shall forfeit from such Deferral 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 Deferral  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 subsection (a) of this Article III,  Section 3 be less than
25%  of  the  amount  credited  to  such  Participant's   Deferral  Account
immediately prior to the withdrawal.

         (e) Suspension from Deferrals. In the event of a withdrawal pursuant to
subsection (a) or (b) of this Article III, Section 3, a Participant who is
otherwise eligible to make deferrals of Fees 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 Fees for such Fiscal Year of the
Plan shall be void and of no effect.

     4. MANNER OF ELECTION

     (a) General. Any Director wishing to participate in the Plan may elect
to do so by  delivering  to the  Secretary  of the Company an Election on a
form  prescribed by Corporate  Human  Resources  designating  the manner in
which such Deferred Fees are to be invested in accordance with Article III,
Section 1 and electing the timing and form of  distribution.  The timing of
the filing of the appropriate  form with Corporate Human Resources shall be
determined  by the Company or the  Committee  on  Directors.  An  effective
election to defer Fees may not be revoked or modified  except as  otherwise
determined  by the  Company  or the  Committee  on  Directors  or as stated
herein.

     (b) Investment  Alternatives - Existing  Balances.  A Participant  may
elect to change an existing selection as to the investment  alternatives in
effect with respect to existing deferred Fees (in increments  prescribed by
the  Committee  on  Directors  or the  Company)  as  often,  and with  such
restrictions,  as  determined  by  the  Committee  on  Directors  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 Article IV,
Section 1 hereof.

     (d) Initial Election.  With respect to Directors' Fees payable for all
or any portion of a calendar year after such person's  initial  election to
the  office  of  Director  of the  Company,  any  such  person  wishing  to
participate  in the Plan may file a proper  Election  within 30 days  after
such election to office.  Any such Election  shall be effective upon filing
or as soon as possible thereafter with respect to such Fees.

     5. DISTRIBUTION

     (a) Deferral Account.  In accordance with the  Participant's  Election
and as prescribed by the Committee on Directors,  Deferred Fees credited to
a Participant's  Deferral Account shall be distributed in cash or shares of
Common Stock (or a combination of both).  Unless otherwise  directed by the
Committee on Directors,  if no Election is made by a Participant  as to the
distribution  or form  of  payment  of his or her  Deferral  Account,  upon
Termination  such  account  shall be paid in cash in lump sum.  The  entire
Deferral  Account must be paid out within forty years following the date of
the Participant's Termination.

     (b) Change of Distribution of Deferral Account.  A Participant will be
allowed to change the Election as to the applicable  payment period for all
amounts  deferred  pursuant  to such  Election,  subject to approval by the
Company or the Committee. Such change must be made by the earlier of:

     (i) the date six months prior to the first day of the month  following
the Participant's Termination; or

     (ii) the December 31 immediately  preceding the first day of the month
following the Participant's Termination.

     If the Participant  making such change is a member of the Committee on
Directors,  such Participant shall abstain from the Committee on Directors'
decision to approve or disapprove such change.

     6. PAYMENT COMMENCEMENT DATE

     Payments  of  amounts  deferred  pursuant  to a valid  Election  shall
commence after a  Participant's  Termination in accordance  with his or her
Election.  If a  Participant  dies  prior  to the  first  deferred  payment
specified  in an Election,  payments  shall  commence to the  Participant's
Beneficiary on the first payment date so specified.

     7. CHANGE IN CONTROL

     Notwithstanding  any  provision of this Plan to the  contrary,  in the
event of a "Change in Control"  (as defined in Section  2(f) of Article I),
each  Participant  in the Plan  shall  receive an  automatic  lump sum cash
distribution of all amounts accrued in the Participant's  Cash and/or Stock
Account(s)  (including  interest at the Prime Rate of Interest  through the
business day immediately preceding the date of distribution) not later than
fifteen  (15) days  after the date of the  "Change  in  Control."  For this
purpose,   the  balance  in  the  Stock  Account  shall  be  determined  by
multiplying  the  number of Stock  Units by the  higher of (a) the  highest
closing  price of a share of Common Stock during 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 Director for the legal fees
and  expenses  incurred  if the  Director  is required to seek to obtain or
enforce any right to distribution.  In the event that it is determined that
such Director is properly entitled to a cash distribution  hereunder,  such
Director  shall also be entitled  to interest  thereon at 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, Article I, Section 2(f) and Section 7 of this Article
may not be amended after a "Change in Control"  occurs  without the written
consent of a majority in number of Participants.


     ARTICLE IV. MISCELLANEOUS PROVISIONS

     1. BENEFICIARY DESIGNATION

     A Director may  designate  one or more persons  (including a trust) to
whom  or to  which  payments  are to be made if the  Director  dies  before
receiving   payment  of  all  amounts  due  hereunder.   A  designation  of
Beneficiary  will be effective only after the signed Election is filed with
the  Secretary  of the Company  while the Director is alive and will cancel
all designations of a Beneficiary signed and filed earlier. If the Director
fails  to  designate  a  Beneficiary  as  provided  above  or if  all  of a
Director's  Beneficiaries  predecease  him or her  and he or she  fails  to
designate a new Beneficiary,  remaining unpaid amounts shall be paid in one
lump  sum to the  estate  of such  Director.  If all  Beneficiaries  of the
Director die before the Director or 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.

     2. INALIENABILITY OF BENEFITS

     The interests of the Directors and their  Beneficiaries under the Plan
may not in any way be voluntarily or involuntarily  transferred,  alienated
or assigned, nor be subject to attachment,  execution, garnishment or other
such equitable or legal process.

     3. GOVERNING LAW

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

     4. AMENDMENTS

     The Committee on Directors may amend,  alter or terminate this Plan at
any time without the prior  approval of the Directors;  provided,  however,
that  the  Committee  on  Directors  may  not,   without  approval  by  the
shareholders:

     (a)  materially  increase the number of securities  that may be issued
under the Plan (except as provided in Article I, Section 3),

     (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.

     5. COMPLIANCE WITH RULE 16b-3

     It is the  intention  of the  Company  that  the  Plan  comply  in all
respects  with Rule 16b-3  promulgated  under Section 16(b) of the Exchange
Act and that Plan Participants remain non-employee directors ("Non-Employee
Directors") for purposes of  administering  other employee benefit plans of
the Company and having such other plans be exempt from Section 16(b) of the
Exchange  Act.  Therefore,  if any Plan  provision  is  found  not to be in
compliance with Rule 16b-3 or if any Plan provision  would  disqualify Plan
participants from remaining Non-Employee Directors, that provision shall be
deemed  amended so that the Plan does so comply  and the Plan  participants
remain  Non-Employee  Directors,  to the extent permitted by law and deemed
advisable by the Committee on  Directors,  and in all events the Plan shall
be construed in favor of its meeting the requirements of Rule 16b-3.

     6. EFFECTIVE DATE

     The Plan was  approved by the  shareholders  of the Company on January
27, 1994, and originally  became  effective as of November 9, 1993, and has
been restated in this document effective November 7, 2002.