Exhibit 10.9

                                ASHLAND INC.

                          LONG-TERM INCENTIVE PLAN

                       (Amended as of July 19, 2000)

SECTION 1. PURPOSE

         The purpose of the Ashland  Inc.  Long-Term  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 and
Performance  Share  awards in an effort to attract and retain in its employ
qualified  individuals  and to provide  such  individuals  with  additional
incentive 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
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 (which may be a  Nonqualified  or
Incentive Stock Option),  a Stock  Appreciation  Right, a Restricted  Stock
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 3(a)(9) or 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.

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         (I)  "Common  Stock"  shall mean the Common  Stock of the  Company
($1.00 par value), subject to adjustment pursuant to Section 12.

         (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 an 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.

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

         (Q)  "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.

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

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

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

         (U)  "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.

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

         (W)  "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.

         (X)      "Plan" shall mean this Ashland Inc. Long-Term Incentive
Plan.

         (Y)  "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 nor more than five years from the
date of grant, and in the case of Outside Directors is the period set forth
in subsection (B) of Section 8.

         (Z)  "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.

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

         (BB) "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.

         (CC)  "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.

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

         (EE) "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 be  granted  as part of an  Option  or as a
separate  right to any  holder  of any  Option  theretofore  or then  being
granted under this Plan. 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.

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

         (GG) "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 and Performance  Shares and for stock bonuses on deferred
awards of  Restricted  Stock  and  Performance  Shares),  an  aggregate  of
3,000,000 shares of Ashland Common Stock,  par value $1.00 per share.  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

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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 its 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  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 shall be exercisable  prior to the first  anniversary of the
date of its grant,  except as  provided  in Section 10 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 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.,  500 Diederich  Boulevard,  Russell,
Kentucky,  41169, or such other place as Ashland may designate from time to
time.

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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  (which  shares of Common  Stock must have been owned by the Employee
six months or longer,  and not used to effect an Option exercise within the
preceding  six months,  in the case of an  exercise of an Option  which was
granted  after May21,  1992,  unless the  Committee  specifically  provides
otherwise)  evidenced  by  negotiable  certificates,  valued at their  Fair
Market  Value on the date of  exercise,  (iii)  by  Attestation;  (iv) by a
combination of such methods of payment,  or (v) by such other consideration
as shall be approved by the Committee  (including  without  limitation,  by
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.  In the case of an exercise of an Option granted after May 21, 1992,
the Common Stock listed on the Attestation Form must have been owned by the
Employee six months, unless the Committee  specifically provides otherwise.
Moreover,  in the case of an exercise of an Option granted prior to May 21,
1992, if so provided in the  Agreement,  and subject to such  restrictions,
terms and  conditions as the Committee may impose,  an Employee may request
Ashland to "pyramid" his or her shares; that is, to automatically apply the
shares  which he or she is entitled to receive on the exercise of a portion
of an Option to satisfy the exercise for additional portions of the Option,
thus  resulting in multiple  simultaneous  exercises of an Option by use of
whole shares as payment.

         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 bear  interest at such rate or
rates as determined from time to time by the Committee.

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  granted under the
Plan with respect to all or a portion of the shares  subject to the related
Option.  An SAR may be granted as part of an Option or as a separate  right
to any holder of any Option  theretofore  or then being  granted under this
Plan. 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  (valued at Fair Market
Value on the date of  exercise of the SAR),  or in cash,  or partly in cash
and  partly in  shares  of  Common  Stock,  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 for purposes of
determining

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the  number of shares of  Common  Stock  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 by reason
of death or disability (as defined in subsection (C) of Section 10 hereof),
or for such other reason as the  Committee  may provide,  such Employee (or
his or her estate) will receive his or her Restricted  Stock subject to the
terms of his or her Agreement with the Company, which Agreement shall be in
accordance  with the terms and  conditions  set forth in this Section 8. In
the event that a  Restricted  Stock Award has been made to an Employee  who
subsequently  voluntarily resigns or whose employment is terminated for any
reason  other than as  referred  to above,  such  Restricted  Stock will be
forfeited by such Employee; provided, however, that the Committee may limit
such  forfeiture  to that  portion  thereof  which is  proportional  to the
unelapsed portion of the Restricted Period under such Award.

         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 per year over a five-year period.

B.       Awards to Outside Directors

         Subject to the  limitation of the number of shares of Common Stock
available pursuant to Section 3, effective  immediately  following the 1989
Annual Meeting of Shareholders of the Company, each person who at such time
shall be a duly elected Outside  Director is hereby  granted,  effective on
such  date,  1,000  shares of  Restricted  Stock  subject  to the terms and
conditions  set forth in this  subsection  (B) and  subsection  (C)  below.
Subsequent to the 1989 Annual Meeting of Shareholders of the Company,  each
person who has  received no  previous  Award under the Plan and who is duly
appointed  or  elected  as an  Outside  Director  of the  Company is hereby
granted, effective on the date of his or her appointment or election to the
Board,  1,000  shares  of  Restricted  Stock,  subject  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,  subject  to
subsection  (B) of  Section  14  hereof,  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 72, (ii) the death or disability of

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such Outside Director, or (iii) a 50% change in the beneficial ownership of
the Company as defined in Rule 13d-3 under the Exchange Act. 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) or (iii) 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.  As used  herein,  an Outside  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 14 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 nor
more than five years 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 hereto 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) 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.  Any forfeited Restricted
Stock shall not again be available for the grant of Awards under the Plan.

SECTION 9. 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 investments,  cumulative  earnings per share, or return on shareholders'
equity.  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

<PAGE>
appropriate.  Subject to subsection  (B) of Section 14 hereof,  Performance
Shares  may not be  sold,  assigned,  transferred,  pledged,  or  otherwise
encumbered,  except as herein provided and as provided in subsection (F) of
Section 10 hereof, 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 per
year over a five-year period.

         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  discretion,
limit such forfeiture to that portion of the Performance  Shares deemed not
earned.

SECTION 10.  CONTINUED EMPLOYMENT, AGREEMENT TO SERVE AND EXERCISE PERIODS

         (A) Subject to the provisions of  subsections  (B), (C) and (F) of
this  Section 10,  every  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 be  terminated,  for any reason other
than death or disability as determined by the  Committee,  prior to the end
of such  one  year  period,  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 10; 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  full  number  of
optioned  shares or any part  thereof,  less  such  number as may have been
theretofore acquired under the Option.

         (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 full
number of optioned shares or any part thereof, less such number as may have
been theretofore  acquired under the Option.  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 a 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 until the earlier to occur of the fixed termination date set
forth in the Option or three years after such  Retirement.  Options held by
an Employee who retires on or after September 19, 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 10, 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

<PAGE>
months after  cessation of the Employee's  employment  for any cause,  and,
except as provided in subsection (F) of this Section 10, if exercised after
cessation  of such  employment,  may be  exercised  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  10 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 11.  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 12.  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.


<PAGE>


SECTION 13.  AMENDMENTS AND TERMINATIONS

         Unless  the  Plan  shall  have  been   terminated  as  hereinafter
provided, the Plan shall terminate on, and no Award shall be granted after,
November 3, 1993.  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 12) 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 14.  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 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 or the Board.

         (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.

SECTION 15.  EFFECTIVENESS OF THE PLAN

         The Plan shall be submitted to the shareholders of the Company for
their  approval  and  adoption on January 26, 1989 or such other date fixed
for the next meeting of  shareholders  or any  adjournment or  postponement
thereof.

<PAGE>
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 16.  GOVERNING LAW

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