AMENDED AND RESTATED
                        ASHLAND INC. INCENTIVE PLAN
                       (As amended November 7, 2002)

SECTION 1.  PURPOSE

     The  purpose of the  Ashland  Inc.  Incentive  Plan is to promote  the
interests of Ashland Inc. and its  shareholders by providing  incentives to
its directors,  officers and employees.  Accordingly, the Company may grant
to selected officers and employees Option Awards, Stock Appreciation Rights
Awards, Restricted Stock Awards, Incentive Awards,  Performance Unit Awards
and Merit Awards in an effort to attract and retain in its employ qualified
individuals  and to provide such  individuals  with  incentives to continue
service  with the  Company,  devote  their best  efforts to the Company and
improve the Company's economic performance, thus enhancing the value of the
Company  for the  benefit  of  shareholders.  This  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 an  automatic  Restricted  Stock Award and with  discretionary  Option
Awards.

SECTION 2.  DEFINITIONS

     (A) "Agreement" shall mean a written agreement setting forth the terms
of an Award, to be entered into at the Company's discretion.

     (B)  "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  Recipient  which the  Recipient  wishes to
utilize  to  pay  the  Exercise  Price.  The  Common  Stock  listed  on the
attestation  form must  have  been  owned by the  Recipient  six  months or
longer,  and not have been used to effect  an Option  exercise  within  the
preceding six months, unless the Committees specifically provide otherwise.

     (C) "Award" shall mean an Option  Award,  a Stock  Appreciation  Right
Award,  an Incentive  Award, a Performance  Unit Award, a Restricted  Stock
Award or a Merit Award, in each case granted under this Plan.

     (D)  "Beneficiary"  shall mean the  person,  persons,  trust or trusts
designated by a Recipient 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 a Recipient's death.

     (E) "Board"  shall mean the Board of  Directors  of the Company or its
designee.

     (F)  "Cashless  Exercise"  shall mean the  procedure by which a broker
provides  the funds to a  Recipient  to effect an Option  exercise.  At the
direction of the  Recipient,  the broker will  either:  (i) sell all of the
shares  received  when the Option is exercised  and pay the  Recipient  the
proceeds of the sale (minus the Exercise Price,  withholding  taxes and any
fees due to the broker);  or (ii) sell enough of the shares  received  upon
exercise of the Option to cover the Exercise Price,  withholding  taxes and
any fees due the broker and deliver to the  Recipient  (either  directly or
through the Company) a stock certificate for the remaining shares.

     (G) "Change in Control"  shall be deemed to occur (1) upon approval of
the shareholders of the Company (or if such approval is not required,  upon
the  approval  of the  Board)  of (A) any  consolidation  or  merger of the
Company, other than a consolidation or merger of the Company into or with a
direct or indirect wholly-owned subsidiary, in which the Company is not the
continuing or surviving  corporation  or pursuant to which shares of Common
Stock would be converted into cash, securities or other property other than
a merger in which the  holders  of Common  Stock  immediately  prior to the
merger will have the same  proportionate  ownership  of common stock of the
surviving  corporation  immediately after the merger,  (B) any sale, lease,
exchange,  or other  transfer  (in one  transaction  or a series of related
transactions)  of all or  substantially  all  the  assets  of the  Company,
provided,  however,  that no sale, lease, exchange or other transfer of all
or  substantially  all the assets of the  Company  shall be deemed to occur
unless  assets  constituting  80% of the total  assets of the  Company  are
transferred  pursuant to such sale, lease,  exchange or other transfer,  or
(C) adoption of any plan or proposal for the  liquidation or dissolution of
the Company, (2) when any person (as defined in Section 3(a)(9) or 13(d) of
the Exchange  Act),  other than the Company or any  Subsidiary  or employee
benefit  plan  or  trust  maintained  by  the  Company,  shall  become  the
beneficial  owner  (as  defined  in Rule  13d-3  under the  Exchange  Act),
directly or  indirectly,  of more than 15% of the  Company'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 the Company's  shareholders of each new director
during such two-year  period was approved by a vote of at least  two-thirds
of the directors  then still in office who were  directors at the beginning
of such two-year period. Notwithstanding the foregoing, any transaction, or
series of  transactions,  that shall result in the disposition of Ashland's
interest in Marathon Ashland Petroleum LLC,  including  without  limitation
any transaction  arising out of that certain Put/Call,  Registration Rights
and Standstill  Agreement dated January 1, 1998 among Marathon Oil Company,
USX Corporation, the Company and Marathon Ashland Petroleum LLC, as amended
from time to time, shall not be deemed to constitute a Change in Control.

     (H) "Code"  shall mean the Internal  Revenue Code of 1986,  as amended
from time to time.

     (I)  "Committees"  shall refer to the P&C  Committee  as it relates to
Awards to Participants  and to the G&N Committee as it relates to Awards to
Outside Directors.

     (J) "Common  Stock" shall mean the Common Stock of the Company  ($1.00
par value), subject to adjustment pursuant to Section 15 hereof.

     (K)  "Company"  shall  mean,   collectively,   Ashland  Inc.  and  its
Subsidiaries.

     (L) "Disability"  shall mean, (i) in the case of a Participant,  he or
she becomes unable to perform the functions  required by his or her regular
job due to physical or mental illness and, in connection  with the grant of
an  Incentive  Stock Option shall be disabled if he or she falls within the
meaning of that term as provided  in Section  22(e)(3) of the Code and (ii)
in the case of an Outside  Director,  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.

     (M) "Exercise  Price" shall mean, with respect to each share of Common
Stock subject to an Option, the price fixed by the Committees 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) "Exchange Act" shall mean the Securities  Exchange Act of 1934, as
amended.

     (O) "Fair  Market  Value"  shall mean the price of the Common Stock as
reported on the Composite  Tape of the New York Stock  Exchange on the date
and at the time selected by the Committees or as otherwise provided in this
Plan.

     (P) "G&N Committee" shall mean the Governance and Nominating Committee
of the Board, as from time to time constituted,  or any successor committee
of the Board with similar functions, or its designee.

     (Q)  "Incentive  Award" shall mean an Award made pursuant to Section 7
hereof,  the payment of which is  contingent  upon the  achievement  of the
Performance Goals for the particular Performance Period.

     (R)  "Incentive  Stock  Option" or "ISO"  shall mean an Option that is
intended by the Committees to meet the  requirements  of Section 422 of the
Code or any successor provision.

     (S) "ISO  Award"  shall  mean an Award of an  Incentive  Stock  Option
pursuant to Section 10 hereof.

     (T) "Merit Award" shall mean an Award of Common Stock issued pursuant to
Section 9 hereof.

     (U) "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.

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

     (W) "Notice of Grant" shall mean a written  notice  setting  forth the
terms of an  Option  or SAR  Award,  to be  entered  into at the  Company's
discretion.

     (X) "Option" shall mean the right to purchase  Common Stock at a price
to be  specified  and upon  terms to be  designated  by the  Committees  or
otherwise  determined pursuant to this Plan. The Committees shall designate
an Option as a Nonqualified Stock Option or an Incentive Stock Option.

     (Y)  "Option  Award"  shall  mean an Award of an  Option  pursuant  to
Section 10 hereof.

     (Z) "Outside Director" shall mean a director of the Company who is not
also an employee of the Company as selected by the G&N Committee to receive
an Award under this Plan.

     (AA)  "P&C  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  and an
outside director as defined in the regulations  issued under Section 162(m)
of the Code, or its designee.

     (BB)  "Participant"  shall  mean a  regular,  full-time  or  part-time
employee  of the Company as  selected  by the P&C  Committee  to receive an
Award under this Plan.

     (CC)  "Performance  Goals"  shall  mean  performance  goals  as may be
established in writing by the P&C Committee which may be based on earnings,
stock  price,  return on  equity,  return on  investment,  total  return to
shareholders,  economic  profit,  debt rating or  achievement  of business,
financial or operational  goals.  Such goals may be absolute in their terms
or  measured  against  or in  relation  to other  companies  comparably  or
otherwise  situated.   Such  performance  goals  may  be  particular  to  a
Participant  or the division or other unit in which the  Participant  works
and/or may be based on the performance of the Company generally.

     (DD) "Performance  Period" shall mean the period designated by the P&C
Committee during which the performance objectives shall be measured.

     (EE)  "Performance  Unit Award"  shall mean an Award made  pursuant to
Section 8 hereof,  the payment of which is contingent  upon the achievement
of the Performance Goals for the particular Performance Period.

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

     (GG) "Plan" shall mean this Ashland Inc.  Incentive  Plan,  as amended
and restated.

     (HH) "Recipients" shall mean a Participant or an Outside Director,  as
appropriate.

     (II) "Restricted Period" shall mean the period designated during which
Restricted  Stock  may not be  sold,  assigned,  transferred,  pledged,  or
otherwise encumbered, which period in the case of Participants shall not be
less than one year from the date of grant (unless otherwise directed by the
P&C  Committee),  and in the case of  Outside  Directors  is the period set
forth in Section 6(B) hereof.

     (JJ) "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, if any.

     (KK) "Restricted  Stock Award" shall mean an Award of Restricted Stock
pursuant to Section 6 hereof.

     (LL)  "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.

     (MM)  "Retirement"  shall  mean,  (a) in the  case  of a  Participant,
retirement  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, and (b) in the case of an Outside Director,
retirement  from the  Board at age 72 or at any  other age as the Board may
from time to time determine.

     (NN) "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.  A SAR may only be granted  concurrently  with the grant of
the related Option.  A 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 this Plan.

     (OO) "Stock  Appreciation  Right  Award" or "SAR Award"  shall mean an
Award of a Stock Appreciation Right pursuant to Section 11 hereof.

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

     (QQ) "Tax Date"  shall mean the date the  withholding  tax  obligation
arises with respect to an Award.

SECTION 3.  STOCK SUBJECT TO THIS PLAN

     There will be reserved  for  issuance  under this Plan an aggregate of
4,000,000  shares of Common  Stock,  par value  $1.00 per share;  provided,
however,  that of such shares only 1,000,000  shares in the aggregate shall
be available  for  Restricted  Stock Awards,  Merit Awards,  ISO Awards and
Performance  Unit  Awards.  Such shares  shall be  authorized  but unissued
shares of  Common  Stock.  If any Award  under  this Plan  shall  expire or
terminate for any reason  without  having been earned or vested in full, or
if any Award shall be  forfeited  or  deferred,  the shares  subject to the
unearned,  forfeited  or  deferred  portion  of such Award  shall  again be
available  for the purposes of this Plan. No  Participant  shall be granted
more than a total of 250,000  Option or SAR Awards  annually and no Outside
Director  shall be granted more than a total of 10,000 Option or SAR Awards
annually.

SECTION 4.  ADMINISTRATION

     The P&C  Committee  shall have the  exclusive  authority to administer
this Plan for  Participants.  The G&N  Committee  shall have the  exclusive
authority to administer this Plan for Outside Directors.

     In  addition  to any  implied  powers and duties that may be needed to
carry out the provisions hereof, the Committees, acting individually, shall
have all the powers vested in them by the terms hereof, including exclusive
authority to select the  Recipients,  to determine the type, size and terms
of the  Awards to be made to each  Recipient,  to  determine  the time when
Awards will be  granted,  and to  prescribe  the form of the  Agreement  or
Notice of Grant embodying Awards made under this Plan. The Committees shall
be  authorized  to interpret  this Plan and the Awards  granted  under this
Plan, to establish, amend and rescind any rules and regulations relating to
this Plan, to make any other determinations which they believe necessary or
advisable  for the  administration  hereof,  and to  correct  any defect or
supply any omission or reconcile any  inconsistency  in this Plan or in any
Award in the  manner and to the extent the  Committees  deem  desirable  to
carry it into effect.  Any decision of the Committees in the administration
of this Plan, as described herein, shall be final and conclusive.

SECTION 5.  ELIGIBILITY

     Awards  may only be  granted  (i) to regular  full-time  or  part-time
employees of the Company,  or (ii) as expressly  provided in Sections 6(B),
10 and 11 hereof, to Outside Directors of the Company.

SECTION 6.  RESTRICTED STOCK AWARDS

(A)  Awards to Employees

     The P&C  Committee  may make a  Restricted  Stock  Award  to  selected
Participants,   which   Restricted  Stock  Awards  may,  at  the  Company's
discretion  and as  directed  by the  P&C  Committee,  be  evidenced  by an
Agreement  which  shall  contain  such  terms  and  conditions  as the  P&C
Committee,  in its sole  discretion,  may  determine.  The  amount  of each
Restricted  Stock Award and the  respective  terms and  conditions  of such
Award (which terms and conditions  need not be the same in each case) shall
be determined by the P&C Committee in its sole  discretion.  As a condition
to any Restricted  Stock Award  hereunder,  the P&C Committee may require a
Participant to pay to the Company a  non-refundable  amount equal to, or in
excess  of,  the par value of the  shares of the  Restricted  Stock  Award.
Subject to the terms and  conditions of each  Restricted  Stock Award,  the
Participant,  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.

     Unless otherwise determined and directed by the P&C Committee,  in the
event that a Restricted  Stock Award has been made to a  Participant  whose
employment or service is  subsequently  terminated  for any reason prior to
the  lapse of all  restrictions  thereon,  such  Restricted  Stock  will be
forfeited in its entirety by such Participant.

(B)  Awards to Outside Directors

     During  the term of this  Plan,  each  person  who is  hereafter  duly
appointed or elected as an Outside Director shall be granted,  effective on
the date of his or her  appointment  or election to the Board, a Restricted
Stock  Award of 1,000  shares.  All Awards  under this  subsection  (B) are
subject to the limitation on the number of shares of Common Stock available
pursuant to Section 3 hereof and to the terms and  conditions  set forth in
this subsection (B) and subsection (C) below.

     As a condition to any Restricted  Stock Award  hereunder,  the Outside
Director  may be  required to pay to the  Company a  non-refundable  amount
equal to the par value of the shares of the  Restricted  Stock Award.  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
(C) 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)  Retirement,  (ii) the  death or
Disability of such Outside  Director,  (iii) a 50% change in the beneficial
ownership of the Company as defined in Rule 13d-3 under the  Exchange  Act,
or (iv)  voluntary  early  retirement  to take a position  in  governmental
service.  Unless otherwise determined and directed by the G&N Committee, 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
the preceding  sentence,  any Restricted  Stock Award made pursuant to this
subsection will be forfeited by such Outside Director.

(C) Transferability

     Subject to Section  17(B)  hereof,  Restricted  Stock may not be sold,
assigned, transferred, pledged, or otherwise encumbered during a Restricted
Period, which, in the case of Participants,  shall be determined by the P&C
Committee and, unless otherwise determined by the P&C Committee,  shall not
be less than one year from the date of the Restricted Stock Award,  and, in
the case of Outside  Directors,  shall be  determined  in  accordance  with
subsection (B) of this Section.  The P&C Committee may, at any time, reduce
the  Restricted  Period  with  respect  to  any  outstanding  shares  of  a
Restricted  Stock  Award,  but,  unless  otherwise  determined  by the  P&C
Committee, such Restricted Period shall not 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  thereto are subject to the restrictions,  terms,
and conditions provided in this Plan and the applicable Agreement,  if any.
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 this Plan and the
applicable Agreement,  if any. Restricted Stock shall constitute issued and
outstanding  shares of Common Stock for all  corporate  purposes,  with the
exception  that:  (i) the Recipient will not be entitled to delivery of the
stock   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) subject to
Section 17(B) hereof, 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)  unless  otherwise
determined and directed by the  Committees,  a breach of any  restrictions,
terms, or conditions provided in this Plan or established by the Committees
with respect to any Restricted Stock or Retained Distributions will cause a
forfeiture of such  Restricted  Stock and any Retained  Distributions  with
respect thereto.

SECTION 7.  INCENTIVE AWARDS

     (A) Any Participant may receive one or more Incentive  Awards,  as the
P&C Committee shall from time to time determine.

     (B) No later than 120 days (90 days for those Participants  subject to
the  limitations  of Code Section  162(m)) after the  commencement  of each
Performance  Period,  the P&C Committee  shall  establish in writing one or
more  Performance  Goals that must be reached by a Participant  in order to
receive an Incentive Award for such Performance Period. Except with respect
to Participants  subject to the limitations of Code Section 162(m), the P&C
Committee shall have the discretion to later revise the  Performance  Goals
and the amount to be paid out upon the  attainment  of these  goals for any
reason  including the reflection of promotions,  transfers or other changes
in a  Participant's  employment so long as such changes are consistent with
the Performance  Goals  established  for other  Participants in the same or
similar positions.  Performance Goals established for Participants  subject
to Code  Section  162(m) may only be  adjusted to reduce or  eliminate  the
amount of compensation otherwise payable upon attainment of the Performance
Goals.

     (C)  The  target   Incentive  Award  is  a  fixed  percentage  of  the
Participant's Base Salary paid during the year. The maximum Incentive Award
is 150% of the target  Incentive  Award.  No  Incentive  Award shall exceed
three million dollars ($3,000,000).

     (D) Payment of Incentive Awards shall be made on a date or dates fixed
by the P&C Committee.  Payment may be made in one or more  installments and
may be made  wholly  in  cash,  wholly  in  shares  of  Common  Stock  or a
combination thereof as determined by the P&C Committee.

     If payment of an  Incentive  Award shall be made all or  partially  in
shares  of Common  Stock,  the  number  of  shares  of  Common  Stock to be
delivered  to a  Participant  on any payment  date shall be  determined  by
dividing (x) the original  dollar amount to be paid on the payment date (or
the part thereof  determined by the P&C Committee to be delivered in shares
of such Incentive Award) by (y) the Fair Market Value on the date the Board
approves the P&C  Committee's  decision to pay an  Incentive  Award or such
other date as the Board shall determine.

     (E) Unless otherwise determined and directed by the P&C Committee,  an
Incentive  Award  shall  terminate  if  the  Participant  does  not  remain
continuously  employed and in good standing with the Company until the date
of payment of such Award.  Unless otherwise  determined and directed by the
P&C  Committee,  in the  event a  Participant's  employment  is  terminated
because of death, Disability or Retirement,  the Participant (or his or her
beneficiaries  or estate) shall receive the prorated portion of the payment
of an Incentive Award for which the  Participant  would have otherwise been
eligible 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.

SECTION 8.  PERFORMANCE UNIT AWARDS

     (A) Any Participant may receive one or more  Performance  Unit Awards,
as the P&C Committee shall from time to time determine.

     (B) The  Performance  Goals and  Performance  Period  applicable  to a
Performance  Unit Award shall be set forth in writing by the P&C  Committee
no later  than 120 days (90  days for  those  Participants  subject  to the
limitations  imposed by Code Section 162(m)) after the  commencement of the
Performance  Period.  Except with  respect to  Participants  subject to the
limitations  of Code  Section  162(m),  the P&C  Committee  shall  have the
discretion to later revise the Performance  Goals and the amount to be paid
out upon the  attainment  of  these  goals  for any  reason  including  the
reflection of  promotions,  transfers or other  changes in a  Participant's
employment  so long as such  changes are  consistent  with the  Performance
Goals established for other  Participants in the same or similar positions.
Goals established for Participants  subject to Code Section 162(m) may only
be adjusted to reduce or  eliminate  the amount of  compensation  otherwise
payable upon attainment of the Performance Goals.

     (C) Each  Performance  Unit Award shall be  established  in dollars or
shares of Common Stock,  or a combination of both, as determined by the P&C
Committee.  The  original  amount of any  Performance  Unit Award shall not
exceed 400% of the  Participant's  then annual base salary and the original
amount of any Performance  Unit Award shall not exceed five million dollars
($5,000,000). 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.

     (D) Unless otherwise  determined and directed by the P&C Committee,  a
Performance  Unit Award shall terminate for all purposes if the Participant
does not remain continuously employed and in good standing with the Company
until payment of such Performance Unit Award.  Unless otherwise  determined
and  directed  by  the  P&C  Committee,   a  Participant  (or  his  or  her
beneficiaries or estate) whose employment was terminated  because of death,
Disability or Retirement will receive a prorated  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.

     (E) Payment  with respect to  Performance  Unit Awards will be made to
Participants  on a date or dates fixed by the P&C Committee.  The amount of
such payment shall be determined by the P&C 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 a combination  thereof as determined by
the P&C Committee.

     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 a Participant 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 P&C 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  a  Participant  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 P&C  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 P&C Committee may determine.

SECTION 9.  MERIT AWARDS

     Any  Participant  may receive a Merit Award of Common Stock under this
Plan for such  reasons and in such  amounts as the P&C  Committee  may from
time to time  determine.  As a condition to any such Merit  Award,  the P&C
Committee may require a Participant to pay to the Company a  non-refundable
amount  equal to, or in excess  of,  the par value of the  shares of Common
Stock awarded to him or her.

SECTION 10.  OPTION AWARDS

     (A) Any  Recipient  may  receive  one or more  Option  Awards,  as the
Committees shall from time to time determine.

     (B) Designation and Price

     (1) Any Option  granted under this Plan may be granted as an Incentive
Stock Option or as a  Nonqualified  Stock Option as shall be  designated by
the Committees at the time of the grant of such Option.  Only  Participants
may be granted ISOs.  Each Option shall,  at the  discretion of the Company
and as directed by the Committees, be evidenced by a Notice of Grant, which
Notice of Grant 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 Committees, in their sole discretion,  may determine in accordance with
this Plan.

     (2) Every ISO shall provide for a fixed  expiration  date of not later
than ten years from the date such ISO is granted.  Every NQSO shall provide
for a fixed  expiration date of not later than ten years and one month from
the date such NQSO is granted.

     (3) The Exercise Price of Common Stock issued  pursuant to each Option
shall be fixed by the Committees 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.

     (C)  Exercise

     The  Committees  may,  in their sole  discretion,  provide for Options
granted under this 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 13 hereof or as the
Committees otherwise determine in accordance with this 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 the Company of (i) notice from the holder thereof of
the exercise of an Option,  and (ii) payment to the Company (as provided in
subsection  (D) of this  Section),  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
Trust  Investments   Department  of  the  Company,   3499  Blazer  Parkway,
Lexington, Kentucky 40509, or such other place as the Company may designate
from time to time.

     (D)  Payment for Shares

     Except as otherwise  provided in this Section,  the Exercise Price for
the  Common  Stock  shall be paid in full  when the  Option  is  exercised.
Subject to such rules as the Committees may impose,  the Exercise Price may
be paid in whole or in part:  (i) in cash;  (ii) in whole  shares of Common
Stock owned by the  Recipient  and  evidenced by  negotiable  certificates,
valued at their Fair Market Value  (which  shares of Common Stock must have
been owned by the Recipient six months or longer, and not used to effect an
Option  exercise  within the  preceding six months,  unless the  Committees
specifically   provide  otherwise);   (iii)  by  Attestation;   (iv)  by  a
combination of such methods of payment;  or (v) by such other consideration
as shall constitute  lawful  consideration for the issuance of Common Stock
and be approved by the Committees (including, without limitation, effecting
a Cashless Exercise of the Option with a broker).

     (E) Continued Employment, Agreement to Serve and Exercise Period

     (1) Participants

     (a) Subject to the  provisions of Section  13(D) hereof,  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 P&C  Committee)  and if the  employment of the
Participant  shall  terminate  prior to the end of such one year period (or
such other period  determined by the P&C Committee),  the Option granted to
such Participant shall immediately terminate.

     (b) Every Option shall provide that in the event the Participant  dies
(i) while employed by the Company, (ii) during the periods in which Options
may be exercised by a Participant determined to be Disabled, or (iii) after
Retirement,  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  number  of  shares  which  the
Participant  could have acquired under the Option  immediately prior to the
Participant's death.

     (c) Every Option shall provide that in the event the employment of any
Participant  shall cease by reason of Disability,  as determined by the P&C
Committee  at any time during the term of the Option,  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 such Participant for the number
of shares  which the  Participant  could  have  acquired  under the  Option
immediately prior to the Participant's Disability. The determination by the
P&C Committee of any question  involving  Disability of a Participant shall
be conclusive and binding.

     (d) Every Option shall provide that in the event the employment of any
Participant  shall  cease by  reason  of  Retirement,  such  Option  may be
exercised at any time or from time to time, prior to the fixed  termination
date set forth in the Option for the number of shares which the Participant
could have acquired under the Option immediately prior to such Retirement.

     (e)  Notwithstanding  any provision of this Plan to the contrary,  any
Option,  may, in the  discretion of the P&C Committee or as provided in the
relevant Notice of Grant (if any), become exercisable,  at any time or from
time to time,  prior to the fixed  termination date set forth in the Option
for the full number of awarded shares or any part thereof, less such number
as may have been  theretofore  acquired under the Option from and after the
time the Participant ceases to be an employee of the Company as a result of
the  sale or  other  disposition  by the  Company  of  assets  or  property
(including  shares of any Subsidiary) in respect of which such  Participant
had  theretofore  been employed or as a result of which such  Participant's
continued employment with the Company is no longer required.

     (f) Except as provided in  sub-subsections  (b), (c), (d), (e) and (g)
of this Section 10(E) and Section 13(D) hereof,  every Option shall provide
that it shall  terminate  on the earlier to occur of the fixed  termination
date set forth in the  Option or thirty  (30) days after  cessation  of the
Participant's  employment  for any cause in respect of the number of shares
which the  Participant  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.

     (g) Notwithstanding any provision of this Section to the contrary,  in
the  event  the  P&C  Committee  determines,   in  its  sole  and  absolute
discretion,  that the  employment of any  Participant  has terminated for a
reason or in a manner  adversely  affecting the Company (which may include,
without limitation,  taking other employment or rendering service to others
without the consent of the Company), then the P&C Committee may direct that
such Participant forfeit any and all Options that he or she could otherwise
have exercised pursuant to the terms of this Plan.

     (h) Each  Participant  granted an Award under this Plan shall agree by
his or her acceptance of such Award to remain in the service of the Company
for a period  of at least  one year  from the date of the  Notice  of Grant
respecting the Award (or, if no Notice of Grant is given, at least one year
from the date of the Award).  Such service  shall,  subject to the terms of
any contract between the Company and such  Participant,  be at the pleasure
of the Company and at such  compensation  as the Company  shall  reasonably
determine from time to time.  Nothing in this Plan, or in any Award granted
pursuant to this Plan, shall confer on any individual any right to continue
in the employment of or service to the Company or interfere in any way with
the right of the Company to terminate the  Participant's  employment at any
time.

     (i)  Notwithstanding  anything to the contrary herein, any Option that
is an ISO shall be  exercisable  not later than three (3) months  following
the date that the employment of a Participant terminated.

     (2) Outside Directors

     If an Outside  Director's service on the Board terminates by reason of
(i)  Retirement,  (ii) the death or  Disability  of such Outside  Director,
(iii) a 50% change in the beneficial ownership of the Company as defined in
Rule 13d-3 under the Exchange Act, or (iv)  voluntary  early  retirement to
take a position in  governmental  service,  any Option held by such Outside
Director may  thereafter  be exercised by the Outside  Director,  or in the
event of death,  by his or her  Beneficiary to the extent it was vested and
exercisable at the time of such  termination  (i) for a period equal to the
number  of  years  of  completed  Board  service  as of the  date  of  such
termination  of  the  Outside  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 Outside Director
may  thereafter  be exercised by the Outside  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,  unless
otherwise determined by the G&N Committee.

SECTION 11.  STOCK APPRECIATION RIGHT AWARDS

     The Committees  may grant Stock  Appreciation  Rights  pursuant to the
provisions  of this  Section to any  Recipient  holding any Option  granted
under this Plan with  respect to all or a portion of the shares  subject to
the related Option. A SAR may only be granted  concurrently  with the grant
of the related Option. Subject to the terms and provisions of this Section,
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.  A 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.
A SAR granted under this Plan shall be  exercisable  in whole or in part by
notice to the  Company.  Each such notice  shall be  delivered or mailed by
postpaid  mail,  addressed  to  the  Trust  Investments  Department  of the
Company,  3499 Blazer  Parkway,  Lexington,  Kentucky  40509, or such other
place as the company may  designate  from time to time.  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.

     Subject to the terms and provisions of this Section, upon the exercise
of a SAR,  the  Recipient  shall be  entitled  to receive  from the Company
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 Committees may stipulate in the Notice of Grant the
form of  consideration  which shall be received upon the exercise of a SAR.
If no consideration is specified  therein,  upon the exercise of a SAR, the
Recipient,  may  specify the form of  consideration  to be received by such
Recipient,  which shall be in shares of Common Stock, or in cash, or partly
in cash and partly in shares of Common  Stock  (valued  at the Fair  Market
Value on the date of exercise of the SAR), as the Recipient  shall request;
provided,  however,  that the  Committees,  in their 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 a 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 a  corresponding
number of shares of Common Stock shall not again be available for the grant
of Awards under this 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 12.  CONTINUED EMPLOYMENT

     Nothing in this Plan, or in any Award  granted  pursuant to this Plan,
shall confer on any  individual any right to continue in the employment of,
or service  to, the Company or  interfere  in any way with the right of the
Company to terminate the Participant's employment at any time.

SECTION 13.  CHANGE IN CONTROL

     (A) Upon a Change in Control, any Restricted Stock Award shall be free
of all  restrictions for the full number of awarded shares less such number
as may have been theretofore acquired under the Restricted Stock Award.

     (B) Upon a Change in Control,  there shall be an  acceleration  of any
Performance  Period  relating to any  Incentive  Award,  and payment of any
Incentive  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.  Further,
the  Company's  obligation  with respect to such  Incentive  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 P&C  Committee,  in its  sole
judgment, may make adjustments to any Incentive Award as may be appropriate
to reflect such Change in Control.

     (C) Upon a Change in Control,  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  Performance  Unit  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 a  Participant  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,  the Company'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 P&C Committee,
in its sole judgment, may make adjustments to any Performance Unit Award as
may be appropriate to reflect such Change in Control.

     (D) Upon a Change in  Control,  any  Option  Award or SAR Award  shall
become immediately exercisable for the full number of awarded shares or any
part thereof, less such numbers as may have been theretofore acquired under
the  Option  Award or SAR Award  from and after the date of such  Change in
Control, unless otherwise provided in the Notice of Grant.

SECTION 14.  WITHHOLDING TAXES

     Federal,  state or local  law may  require  the  withholding  of taxes
applicable  to gains  resulting  from the  payment  or vesting of an Award.
Unless  otherwise  prohibited by the P&C Committee,  each  Participant  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 the
Company to withhold from the shares of Common Stock  otherwise  issuable to
the  Participant  pursuant  to the  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 the
Company 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 the vesting of an Award. A Participant'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
P&C Committee may adopt,  and may be disapproved  by the P&C Committee.  If
the amount  requested is not paid,  the P&C  Committee  may refuse to issue
Common Stock under this Plan.

SECTION 15.  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 this Plan
pursuant  to Section 3 hereof 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  Recipient  shall be
maintained as before the occurrence of such event. Such adjustment shall be
conclusive and binding for all purposes hereof.

SECTION 16.  AMENDMENT AND TERMINATIONS

     The  Committees  may amend,  alter or terminate  this Plan at any time
without the prior approval of the Board;  provided,  however, that: (i) the
Committees may not, without approval by the Board and the shareholders, (a)
materially  increase the benefits provided to Recipients under this Plan or
(b) provide for the  re-pricing  of Options;  and (ii) any  amendment  with
respect to Restricted  Stock granted to Outside  Directors must be approved
by the full Board.

     Termination  of this 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 this  Plan  notwithstanding  its
termination.

SECTION 17.  MISCELLANEOUS PROVISIONS

     (A) Except as to Awards of Restricted Stock to Outside  Directors,  no
Participant  or other person shall have any claim or right to be granted an
Award under this Plan.

     (B) A  Recipient's  rights  and  interest  under  this 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 a Recipient'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 Recipient in
this  Plan  shall  be  subject  to any  obligation  or  liability  of  such
individual; provided, however, that a Recipient's rights and interest under
this Plan may,  subject to the discretion and direction of the  Committees,
be made  transferable by such Recipient during his or her lifetime.  Except
as specified in Section 6 hereof, 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  receiving or 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 this Plan shall be borne by the Company.

     (E) By accepting  any Award under this Plan,  each  Recipient 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 this Plan by the
Company, the Board, and the Committees.

     (F) Awards  granted under this Plan shall be binding upon the Company,
its successors, and assigns.

     (G)  Nothing  contained  in this Plan  shall  prevent  the Board  from
adopting  other  or  additional  compensation   arrangements,   subject  to
shareholder approval if such approval is required.

     (H) Each  Recipient  shall be deemed to have been granted any Award on
the date the Committees  took action to grant such Award under this Plan or
such date as the Committees in their sole discretion shall determine at the
time such grant is authorized.

SECTION 18.  EFFECTIVENESS OF THIS PLAN

     This Plan was originally  approved by the  shareholders of the Company
on January 27, 2000.  The Amended and  Restated  Plan shall be submitted to
the  shareholders of the Company for their approval and adoption on January
25, 2001, or such other date fixed for the next meeting of  shareholders or
any   adjournment  or  postponement   thereof.   If  not  approved  by  the
shareholders  of the Company at the January  25, 2001 Annual  Meeting,  the
original  Plan shall  remain in effect  with  respect to Awards  other than
Option Awards and SAR Awards.  No Option Awards or SAR Awards shall be made
under the  Amended  and  Restated  Plan  unless and until the  Amended  and
Restated  Plan has been  approved and adopted at a meeting of the Company's
shareholders.

SECTION 19.  GOVERNING LAW

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