ASHLAND INC.
                         DEFERRED COMPENSATION AND
              STOCK INCENTIVE PLAN FOR NON-EMPLOYEE DIRECTORS
                     (Amended as of September 18, 1997)


ARTICLE I.  GENERAL PROVISIONS

1.       PURPOSE

         The purpose of this Ashland Inc.  Deferred  Compensation and Stock
Incentive 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 and  providing  for the
grant of options to purchase Ashland Common Stock to Directors.

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) "Agreement"  means a written agreement setting forth the terms
of an Option.

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

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

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

         (g)  "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  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,  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.

<PAGE>


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

         (i) "Committee" means the Personnel and Compensation  Committee of
the Board or its designee.

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

         (k) "Common Stock Fund" means that investment option,  approved by
the Committee, 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.

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

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

         (n) "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.

         (o)  "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.

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

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

         (r) "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.

         (s) "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.

         (t) "Exchange Act" means the  Securities  Exchange Act of 1934, as
amended.

         (u) "Exercise  Price" means,  with respect to each share of Common
Stock subject to an Option,  the price at which such share may be purchased
from the Company pursuant to the exercise of such Option.

         (v)  "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.

         (w) "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.

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

         (y)  "Nonqualified  Stock  Option"  means any Option that does not
comply with the provisions of Section 422 of the Code.

<PAGE>


         (z) "Option" means the right to purchase  Common Stock as provided
in Article IV.

         (aa)  "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.

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

         (cc)  "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.

         (dd) "Plan"  means this  Ashland Inc.  Deferred  Compensation  and
Stock Incentive Plan For Non-Employee Directors.

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

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

         (gg) "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;  provided,  however,  that of
such  shares,  only  150,000  shares  shall be  available  for  issuance in
connection  with the award of Options.  Such shares shall be authorized but
unissued  shares of Common Stock. If any Option shall expire without having
been exercised in full, the shares  subject to the  unexercised  portion of
such Option shall again be available for the purposes of the Plan.

         (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.  Decisions  of the
Company and the Committee  shall be final,  conclusive and binding upon all
parties.  Day-to-day administration of the Plan shall be the responsibility
of Corporate Human  Resources.  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.

<PAGE>


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, 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 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 a payment  contemplated by subsection (a) or (b) of
this Article III, Section 2 is a member of the Committee,  such Participant
shall abstain from the Committee's determination as to whether such 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.

<PAGE>

         (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.  An effective election to defer
Fees may not be revoked or modified  except as otherwise  determined by the
Company or the Committee 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 or the  Company) as often,  and with such  restrictions,  as
determined by the Committee or by the Company.

         (c) Change of Beneficiary.  A Participant  may, at any time, elect
to change the  designation of a Beneficiary  in accordance  with Article V,
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,  Deferred Fees credited to a Participant's Deferral Account shall
be  distributed  in cash or  shares of Common  Stock (or a  combination  of
both).  If no election is made by a Participant as to the  distribution  or
form of payment  of his or her  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,  such
Participant  shall  abstain  from the  Committee's  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.

<PAGE>

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(g) 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(g) 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.  OPTIONS

1.       OPTION GRANT

         On the first  business day following the Company's  Annual Meeting
of Shareholders in 1994 and each year thereafter until 2004, or, if no such
meeting is held, on January 31 or the first  business day  thereafter,  and
each year thereafter  until 2004 (such day  hereinafter  referred to as the
"Effective  Date"),  each  person who is a Director  of the  Company on the
Effective Date shall be  automatically  granted an Option to purchase 1,000
shares of Common  Stock  if,  but only if,  the  return on  average  common
stockholders'  equity of the Company for the immediately  preceding  fiscal
year as set forth in the Company's  Annual Report to  Shareholders is equal
to or greater than 10%.

2.       OPTION TERMS

         Options  granted  under the Plan shall be subject to the following
terms and conditions:

         (a) Option Designation and Agreement. Any Option granted under the
Plan shall be granted as a Nonqualified Stock Option.  Each Option shall be
evidenced by an Agreement between the recipient and the Company  containing
the terms and conditions of the Option.

         (b)  Option  Price.  The  Exercise  Price of Common  Stock  issued
pursuant to each Option  shall be equal to Fair Market  Value of the Common
Stock on the Effective Date.

         (c) Term of Option.  No Option shall be exercisable  more than ten
years after the date the Option is granted.

         (d) Vesting.  Options granted under the Plan shall vest six months
after the date of grant.

         (e)  Exercise.  Options,  to the extent  they are  vested,  may be
exercised  in  whole  or in part at any  time  during  the  option  period;
provided,  however,  that an Option  may not 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 the Company of (i) notice
from the optionee of exercise of an Option, and (ii) payment to the Company
(as provided in (f) below),  of the Exercise Price for the number of shares
with respect to which the Option is exercised. Each such notice and payment
shall be delivered or mailed by postpaid  mail,  addressed to the Treasurer
of the Company at,  Ashland Inc.,  1000 Ashland Drive,  Russell,  Kentucky,
41169, or such other place as the Company may designate from time to time.


<PAGE>

         (f) Payment for Shares.  The  Exercise  Price for the Common Stock
shall be paid in full when the Option is exercised.  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 Director
six months or longer, and not used to effect a stock option exercise within
the  preceding  six  months,  unless the  Committee  specifically  provides
otherwise) and evidenced by negotiable  certificates,  valued at their Fair
Market Value, (iii) Attestation or (iv) by a combination of such methods of
payment.  In  addition,  a Director  may exercise the Option by effecting a
"cashless exercise," with a broker, of the Option.  "Attestation" means the
delivery to the Company of a completed  Attestation  Form prescribed by the
Company  setting  forth the  whole  shares  of  Common  Stock  owned by the
Director which the Director wishes to utilize to pay the Option price.  The
Common  Stock  listed on the  Attestation  Form must have been owned by the
Director  six months or longer,  and not have been used to effect an Option
exercise within the preceding six months, unless the Committee specifically
provides otherwise.

         (g) Termination . If a Director's  service on the Board terminates
by reason of (i) normal retirement from the Board at age 70, (ii) the death
or Disability of such  Director,  (iii) a Change of Control of the Company,
or (iv)  voluntary  early  retirement  to take a position  in  governmental
service,  any Option held by such  Director may  thereafter be exercised by
the Director,  or in the event of death,  by his or her  Beneficiary to the
extent it was vested and exercisable at the time of Termination,  (i) for a
period  equal to the number of years of completed  Board  service as of the
date  of  Termination  of the  Director  on  whose  behalf  the  Option  is
exercised,  or (ii) until the expiration of the stated term of such Option,
whichever period is the shorter. In the event of Termination for any reason
other than those set forth  above,  any Option  held by such  Director  may
thereafter  be  exercised  by the  Director to the extent it was vested and
exercisable  at the time of  Termination  (i) for a period of one year from
the date of such  Termination  or (ii) until the  expiration  of the stated
term of such Option, whichever period is the shorter.

         (h) Term.  No Option  shall be granted  pursuant to the Plan on or
after the tenth anniversary of the date of shareholder approval, but Option
awards granted prior to such tenth  anniversary may extend beyond that date
until the expiration of their terms.

3.       TRANSFER OF OPTIONS

         Options  granted under the Plan shall be  transferable by will, by
the laws of descent and  distribution,  and,  subject to the discretion and
direction of the Committee, may be made transferable by the Director-holder
thereof during his or her lifetime.

ARTICLE V.  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.  Subject to Section 3 of Article
IV of this  Plan,  any Option  shall be  exercisable,  during a  Director's
lifetime, only by him or her or his or her Personal Representative.

3.       GOVERNING LAW

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

<PAGE>

4.       AMENDMENTS

         The Committee may amend,  alter or terminate this Plan at any time
without the prior approval of the Directors;  provided,  however,  that the
Committee 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,

         (c)  otherwise   materially  increase  the  benefits  accruing  to
participants under the Plan, or

         (d) amend any provision relating to the amount,  price,  timing or
vesting of the  Options,  other than to comport with changes in the Code or
the rules and regulations promulgated thereunder.

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,  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
January27,  1994, and originally  became  effective as of November 9, 1993,
and has been restated in this document effective September 18, 1997.