Exhibit 10.12

                                ASHLAND INC.

                         1995 PERFORMANCE UNIT PLAN

                      (As amended September 21, 2000)

1.       PURPOSE

         The purpose of this Ashland Inc. 1995  Performance  Unit Plan (the
"Plan")  is to  further  the  long-term  profitable  growth of  Ashland  by
offering a  long-term  incentive  in addition  to current  compensation  to
eligible  employees who will be largely  responsible for such growth to the
benefit of the Ashland  shareholders.  It is  expected  that this plan will
encourage  such  employees to remain with  Ashland and will also  encourage
qualified persons to seek and accept employment with Ashland.

2.       DEFINITIONS

         Terms  not  otherwise  defined  herein  shall  have the  following
meanings:

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

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

         (c)  "Change  in  Control"  shall be  deemed to occur (1) upon the
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 Inc. or any subsidiary or employee benefit plan or trust
maintained  by Ashland  Inc. or any of its  subsidiaries,  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  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.

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

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

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

         (g) "Employee" means an employee selected for participation in the
Plan as set forth in Section 5.

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

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         (i) "Fair Market Value" means,  as of any specified date (or, if a
weekend or holiday,  the next preceding business day), the closing price of
a share of Common  Stock,  as reported on the  Composite  Tape for New York
Stock Exchange issues.

         (j)  "Participant"  means any Employee who receives a  Performance
Unit Award under the Plan for a Performance Period. (k) "Performance Goals"
mean  performance  goals as may be  established in writing by the Committee
which may be based on earnings,  stock price,  return on equity,  return on
investment, total return to shareholders, economic value added, debt rating
or  achievement  of  business  or  operational  goals,  such as drilling or
exploration  targets or profit per  barrel.  Such goals may be  absolute in
their  terms or  measured  against or in  relationship  to other  companies
comparably or otherwise situated.  Such performance goals may be particular
to an Employee  or the  division,  department,  branch,  line of  business,
subsidiary or other unit in which the Employee works and/or may be based on
the performance of Ashland generally.

         (l)  "Performance  Period" means the period of time  designated by
the  Committee  applicable  to a  Performance  Unit Award  during which the
Performance Goals shall be measured.

         (m)  "Performance  Unit Award" means an award made pursuant to the
provisions of this Plan, the payment of which is contingent upon attainment
of Performance Goals.

3.       SHARES: ADJUSTMENTS IN THE 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 by reason of any stock split, share dividend,
recapitalization,  merger, consolidation,  reorganization,  combination, or
exchange or  reclassification  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 to
that the  proportionate  interest of the  Employees  shall be maintained as
before the occurrence of such event.

4.       ADMINISTRATION

         Subject to the  express  provisions  of this Plan,  the  Committee
shall have full authority to construe,  interpret and administer this Plan,
to prescribe, amend and rescind rules and regulations relating to the Plan,
to make  Performance  Unit Awards,  to determine the terms,  provisions and
conditions  of the  respective  Performance  Unit Awards (which need not be
identical) and to make all other determinations  necessary or advisable for
the  Plan's  administration.  Decisions  of the  Committee  shall be final,
conclusive and binding upon all parties.

5.       ELIGIBILITY

         Performance  Unit Awards may be made only to  regular,  full-time,
salaried  employees of Ashland as selected by the  Committee.  Any Employee
may receive one or more Performance Unit Awards as the

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Committee shall from time to time determine, and such determinations may be
different as to different  Employees  and may vary as to different  awards.
Nothing  contained  in this Plan shall be  construed  to limit the right of
Ashland to grant other forms of incentive compensation otherwise than under
this Plan.  The Plan or the receipt of a  Performance  Unit Award shall not
confer on any  individual any right to continue in the employ of Ashland or
interfere  in any way with the right of  Ashland  to  terminate  his or her
employment at any time,  with or without cause,  despite the fact that such
termination  may have an  adverse  impact on the  Participant's  receipt of
payment of a Performance Unit Award.

6.       PERFORMANCE UNIT AWARDS

         (a) The Performance  Goals and Performance  Period applicable to a
Performance  Unit Award shall be set forth in writing by the  Committee  no
later than 120 days after the  commencement of the  Performance  Period and
shall  be  communicated  to the  Employee.  The  Committee  shall  have the
discretion to later revise the Performance  Goals solely for the purpose of
reducing or eliminating the amount of compensation  otherwise  payable upon
attainment of the Performance  Goals;  provided that the Performance  Goals
and the amounts  payable upon  attainment of the  Performance  Goals may be
adjusted during any Performance Period to reflect promotions,  transfers or
other  changes in an  Employee's  employment  so long as such  changes  are
consistent  with the Performance  Goals  established for other Employees in
the same or similar positions.

         (b) In making a  Performance  Unit Award,  the  Committee may take
into  account  an  Employee's  responsibility  level,   performance,   cash
compensation   level,   incentive   compensation   awards  and  such  other
considerations as it deems  appropriate.  Each Performance Unit Award shall
be  established  in dollars or shares of Common Stock,  or a combination of
both, as determined by the Committee,  and shall be based on the Employee's
base salary on the date of the Performance  Unit Award. The original amount
of any Performance  Unit Award shall not exceed 400% of the Employee's then
annual base salary;  the amount paid out upon meeting the Performance Goals
shall not exceed the amount of such  Performance  Unit Award; and the total
amount of all  Performance  Unit Awards for a Performance  Period shall not
exceed 2% of  shareholders'  equity as shown in Ashland's  Annual Report to
Shareholders at the end of the fiscal year next preceding the  commencement
of such  Performance  Period.  In determining the amount of any Performance
Unit Award made, in whole or in part, in shares of Common Stock,  the value
thereof  shall be based on the Fair  Market  Value on the  first day of the
Performance Period or on such other date as the Board shall determine.

         (c) A Performance  Unit Award shall  terminate for all purposes if
the Employee  does not remain  continuously  employed and in good  standing
with Ashland until payment of such  Performance Unit Award. An Employee (or
his or her beneficiaries or estate) whose employment was terminated because
of death,  disability or retirement  will receive a pro rata portion of the
payment  of his or her award  based  upon the  portion  of the  Performance
Period  during  which he or she was so employed so long as the  Performance
Goals are subsequently achieved.

         (d) Payment with respect to  Performance  Unit Awards will be made
to Employees on a date or dates fixed by the Committee.  The amount of such
payment  shall be  determined  by the  Committee  and shall be based on the
original  amount of such  Performance  Unit Award  adjusted  to reflect the
attainment of the Performance Goals during the Performance Period.  Payment
may be made in one or more  installments  and may be made  wholly  in cash,
wholly  in shares  of  Common  Stock or  partly in cash and  partly in such
shares, all at the discretion of the Committee.

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         In addition, Employees may be offered the opportunity to defer the
receipt of payment of a Performance Unit Award. Common Stock may be granted
(i) as a  bonus  for  deferral,  or (ii) as a  bonus  for  retaining  for a
specified period of time, Common Stock received in payment of a Performance
Unit Award,  all under such terms as may be  established  by the  Committee
from  time to time.  Notwithstanding,  in no event  shall  the value of the
Common Stock granted as a bonus for deferral or retention exceed 20% of the
value of the  Performance  Unit Award so deferred or retained.  Any and all
payments  made under the Plan shall be subject to the  applicable  federal,
state or local taxes required by law to be withheld.

         If payment of a Performance  Unit Award  established in dollars is
to be made in shares of Common Stock or partly in such  shares,  the number
of shares of Common  Stock to be  delivered  to an  Employee on any payment
date shall be determined by dividing (x) the amount payable by (y) the Fair
Market Value on the date the Board approves the Committee's decision to pay
the  Performance  Unit  Award  or on such  other  date as the  Board  shall
determine.

         If payment of a Performance  Unit Award  established  in shares of
Common Stock is to be made in cash or partly in cash, the amount of cash to
be  paid  to an  Employee  on any  payment  date  shall  be  determined  by
multiplying  (x) the number of shares of Common Stock to be paid in cash on
such payment date with respect to such  Performance  Unit Award, by (y) the
Fair Market Value on the date the Board approves the  Committee's  decision
to pay the Performance  Unit Award or on such other date as the Board shall
determine.  Any payment may be subject to such  restrictions and conditions
as the Committee may determine.

7.       NONTRANSFERABILITY AND NO SHAREHOLDER RIGHTS

         The right to receive payment of a Performance Unit Award shall not
be  assigned  or  transferred  in whole or in part,  either  directly or by
operation  of law or  otherwise  (except by will or the laws of descent and
distribution)  including,  but not by way of limitation,  execution,  levy,
garnishment, attachment, pledge, bankruptcy or any other manner. The holder
of a Performance Unit Award payable in whole or in part in shares of Common
Stock shall have none of the rights of a  shareholder  with respect to such
award until shares of Common Stock shall have been  registered  in the name
of the person or persons  receiving  payment of such award on the  transfer
books of Ashland upon such payment.

8.       CHANGE IN CONTROL

         Upon a Change in  Control,  in order to  maintain a  Participant's
rights under the Plan,  there shall be an  acceleration  of any Performance
Period  relating  to  any  Performance  Unit  Award,  and  payment  of  any
Performance  Unit Award shall be made in cash as soon as practicable  after
such Change in Control  based upon  achievement  of the  Performance  Goals
applicable  to such award up to the date of the Change in Control.  If such
Performance  Unit  Award was  established  in shares of Common  Stock,  the
amount of cash to be paid to an Employee  with  respect to the  Performance
Unit Award shall be determined by  multiplying  (x) the number of shares of
Common  Stock  relating to such  Performance  Unit  Award,  by (y) the Fair
Market  Value on the date of the  Change  in  Control.  Further,  Ashland's
obligation with respect to such Performance Unit Award shall be assumed, or
new  obligations  substituted  therefor,  by  the  acquiring  or  surviving
corporation after such Change in Control. In addition, prior to the date of
such  Change in  Control,  the  Committee,  in its sole  judgment  may make
adjustment to any  Performance  Unit Award as may be appropriate to reflect
such Change in Control.

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9.       GOVERNING LAW

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

10.      AMENDMENT AND TERMINATION

         The Plan shall be submitted to the  shareholders  for approval and
adoption on January 26, 1995 or such other date fixed for the next  meeting
of  shareholders  or  any   adjournment  or  postponement   thereof.   Upon
shareholder approval, the Plan will become effective as of October 1, 1994.
Unless  terminated  sooner by the  Committee,  to the extent  necessary  to
ensure that  Performance  Unit Award payments be deductible under the Code,
this Plan shall  terminate  on, and no  Performance  Unit  Awards  shall be
granted after, the first meeting of shareholders occurring in calendar year
2000.  Termination  of the Plan shall not affect any awards made  hereunder
which are  outstanding  on the date of  termination  and such awards  shall
continue  to be  subject  to the  terms  of the  Plan  notwithstanding  its
termination.  The Committee may amend,  alter or terminate this Plan at any
time without the prior approval of the Board;  provided,  however, that the
Committee may not, without approval by the Board and the shareholders:

         (i) increase the amount of securities that may be issued under the
Plan (except as provided in Section 3(b));

         (ii)  materially  modify the  requirements  as to eligibility  for
participation in the Plan; or

         (iii)  otherwise  materially  increase the  benefits  accruing the
Employees under the Plan.