Document:

Exhibit

EXHIBIT 10.12

ASHLAND INC. NONQUALIFIED EXCESS BENEFIT
PENSION PLAN
Effective January 1, 2005 
	
	
	 

WHEREAS, the Employee Retirement Income Security Act of 1974 (“ERISA”) establishes maximum limitations on benefits and contributions for retirement plans which meet the requirements of Section 401(a) of the Internal Revenue Code of 1986, as amended (“Code”);
WHEREAS, Ashland Inc. (“Ashland” or the “Company”) maintains certain pension plans which are subject to the aforesaid limitations on benefits and contributions;
WHEREAS, new rules were enacted effective January 1, 2005 affecting certain nonqualified plans;
WHEREAS, Ashland desires to comply with those new rules;
NOW, THEREFORE, effective January 1, 2005, except as may otherwise be provided, Ashland does hereby amend and restate the Ashland Inc. Nonqualified Excess Benefit Plan in accordance with the following terms and conditions:
1.           Designation and Purpose of Plan.  The Plan is designated the “Ashland Inc. Nonqualified Excess Benefit Pension Plan” (“Plan”).  The purpose of the Plan is to provide benefits for certain employees in excess of the limitations on contributions, benefits, and compensation imposed by Sections 415 and 401(a)(17) of the Code (including successor provisions thereto) on the plans to which those Sections apply.  The portion of the Plan providing benefits in excess of the Section 415 limits is an “excess benefit plan” as that term is defined in Section 3(36) of ERISA.  It is intended that the portion, if any, of the Plan that is not an excess benefit plan shall be maintained primarily for a select group of management or highly compensated employees.
 
This Plan is effective January 1, 2005, except as may otherwise be provided.  Amendment No. 1 to the Plan that was effective December 31, 2004 shall be null and void and treated as though never adopted.  For purposes of the Plan, the terms “Specified Employee,” “Termination of Employment” and “Effective Retirement Date” shall have the same definitions as they have in the Ashland Inc. Supplemental Early Retirement Plan for Certain Employees, or its successor (“SERP”); provided, however, effective on and after October 1, 2008, and for Terminations of Employment occurring thereafter, such term shall be applied by substituting “three years” for “five years.”
2.           Eligibility.  Subject to Section 11, the Plan shall apply to those employees (referred to as eligible employees) 
(i)           who have retired as an early, normal, or deferred normal retiree under the provisions of the Ashland    Inc. and Affiliates Pension Plan (“Ashland Pension Plan”), as it may be amended, from time to time, or under provisions of any other retirement plan, as such other plan may be amended from time to time, which, from time to time, is specifically designated by Ashland for purposes of eligibility and benefits under the Plan (all such plans, including the Ashland Pension Plan, are hereinafter referred to jointly and severally as “Affected Plans”) with a benefit as computed under Section 3; and
 (ii)           who have not been terminated from employment due to Cause.  Cause shall mean the willful and continuous  failure of an employee to substantially perform his or her duties to Ashland (other than any such failure resulting from incapacity due to physical or mental illness), or the willful engaging by an employee in gross misconduct materially and demonstrably injurious to Ashland, each to be determined by Ashland in its sole discretion.
 

Notwithstanding anything to the contrary contained herein, any employee who would be entitled to participate in this Plan, but who is not a member of a select group of management or a highly compensated employee, shall be entitled to a benefit amount payable under the Plan based solely on the limitations on benefits imposed under Section 415 of the Code.  The potential benefit of an eligible employee before such employee becomes a retiree may be computed under Section 3 at any point in time using assumptions deemed reasonable or convenient by Ashland.  Participation in the Plan is not subject to an election by an eligible employee.  Participation is automatic and is based on the employee’s status on Ashland’s records at the applicable time.  An eligible employee hereunder is referred to as a retiree at the time such eligible employee would have his or her benefit hereunder commence pursuant to the terms of Section 3(iii).
3.           Benefit Amount.
(i)           Computation if not Eligible for Retirement Growth Account.  The computation described in this paragraph (i) applies to the portion of a retiree’s benefit that is not eligible for the Retirement Growth Account in the Ashland Inc. and Affiliates Pension Plan.  At any particular time, the benefit payable to a retiree eligible to participate in this Plan pursuant to the provisions in Section 2 shall be computed by subtracting from (A) the sum of (B) and (C) where -
(A)          shall be the single life annuity that would be payable at age 62 to such retiree under the Affected Plans -
    (1)           with the benefit so payable thereunder calculated by disregarding any salary deferrals that may have been made by such retiree under the Ashland Inc. Deferred Compensation Plan and thereby restoring any salary that may have been so deferred to such retiree’s compensation for purposes of the Affected Plans, and
   (2)           prior to any reductions made because of the limits imposed by Sections 415 and 401(a)(17) of the Code;
provided that the single life annuity that would be so payable under the Ashland Pension Plan shall be computed without applying any offset attributable to the Ashland Inc. Leveraged Employee Stock Ownership Plan (“LESOP”), and such single life annuity shall be actuarially adjusted to be equivalent to a single life annuity payable at the particular time applicable based upon the applicable actuarial assumptions and other relevant provisions used for the same in the Affected Plans;
   (B)           shall be the single life annuity that would be payable at age 62 to such retiree under the Affected Plans after reducing the amount so payable for the limits imposed by Sections 415 and 401(a)(17) of the Code, provided that such single life annuity that would be so payable under the Ashland Pension Plan shall be computed after first applying the offset attributable to the Offset Account (as that term is defined under the LESOP) in the LESOP, and each such single life annuity shall be actuarially adjusted to be equivalent to a single life annuity payable at the particular time applicable based upon the applicable actuarial assumptions and other relevant provisions used for the same in the Affected Plans; and
(C)           shall be the single life annuity that would be actuarially equivalent to such retiree’s non-forfeitable portion of the Offset Account under the LESOP as of the valuation date thereunder coincident with or next preceding such retiree’s termination of employment using the actuarial assumptions prescribed for this purpose in the Ashland Pension Plan.
(ii)           Computation if Eligible for Retirement Growth Account.  The computation described in this paragraph (ii) applies to the portion of a retiree’s benefit that is eligible for the Retirement Growth Account in the Ashland Pension Plan.  At any particular time, the benefit payable to a retiree eligible to participate in this Plan pursuant to the provisions in Section 2 shall be computed by subtracting from (A) the sum of (B) and (C) where -
(A)           shall be the balance of the Retirement Growth Account added to the actuarially equivalent lump sum of any single life annuity that would be payable at age 62 to such retiree under the Affected Plans (other than the Ashland Pension Plan) based upon the applicable actuarial assumptions and other relevant provisions used for the same in the Affected Plans -

     (1)           with the benefit so payable thereunder calculated by disregarding any salary deferrals that may have been made by such retiree under the Ashland Inc. Deferred Compensation Plan and thereby restoring any salary that may have been so deferred to such retiree’s compensation for purposes of the Affected Plans, and
       (2)           prior to any reductions made because of the limits imposed by Sections 415 and 401(a)(17) of the Code;
provided that the Retirement Growth Account balance that would be so payable under the Ashland Pension Plan shall be computed without applying any offset attributable to the Ashland Inc. Leveraged Employee Stock Ownership Plan (“LESOP”);
  (B)           shall be the balance of the Retirement Growth Account added to the actuarially equivalent lump sum of any single life annuity that would be payable at age 62 to such retiree under the Affected Plans (other than the Ashland Pension Plan) based upon the applicable actuarial assumptions and other relevant provisions used for the same in the Affected Plans after reducing the amount so payable for the limits imposed by Sections 415 and 401(a)(17) of the Code, provided that such Retirement Growth Account balance that would be so payable under the Ashland Pension Plan shall be computed after first applying the offset attributable to the Offset Account (as that term is defined under the LESOP) in the LESOP; and
(C)           shall be such retiree’s non-forfeitable portion of the Offset Account under the LESOP as of the valuation date thereunder coincident with or next preceding such retiree’s termination of employment.
(iii)           Commencement.  The benefit computed under paragraph (i) or (ii) of this Section 3 shall commence or otherwise be paid or transferred on or after the eligible employee’s Effective Retirement Date pursuant to the eligible employee’s election as to the time of payment, as provided in Section 4.  Notwithstanding anything contained in the Plan to the contrary, an eligible employee who is a Specified Employee shall have the distribution of his or her benefit which is made on account of a Termination of Employment commence on a date that is not earlier than six months after his or her Termination of Employment.
(iv)           Vesting.  Unless an eligible employee is terminated due to Cause as defined in Section 2 and subject to Section 10, an eligible employee who has a benefit hereunder shall have a non-forfeitable right to that benefit to the extent such an employee has a non-forfeitable benefit under an Affected Plan.
4.           Payment Options.
		
	(i)
	Election.  Subject to applicable transition rules under guidance issued by the Treasury under section 409A of the Code, eligible employees will have 30 days following the earlier of January 1, 2005 or the date they are first eligible for the Plan to elect a form of distribution from among those available under Section 4(ii).  For this purpose, an eligible employee is first eligible for the Plan on the first day of the calendar year following the calendar year during which the eligible employee first accrued a benefit hereunder.  Any subsequent change to that election shall be subject to the provisions of this paragraph (i), sub-parts (A), (B) and (C), as applicable.  In all other events, an eligible employee’s election is irrevocable.  Notwithstanding anything in the foregoing to the contrary, any eligible employee who elects to change his or her election must meet the following requirements, as applicable –

              (A)    The election may not take effect until at least 12 months after it is made;
		
	(B)
	If the distribution relates to a Termination of Employment, the first payment that would be made pursuant to the election would be at least five years after the amount otherwise would have been distributed but for this election, except in the event of the eligible employee’s death; and

		
	(C)
	The election must be made at least 12 months before the first scheduled payment that would have been payable at a specified time or pursuant to a fixed schedule.

An eligible employee may not accelerate the time or schedule of any payment under the Plan, except as provided in guidance from the Treasury under Internal Revenue Code section 409A as may be allowed by Ashland in a manner consistent therewith.  A retiree eligible under Section 2 for the benefit under Section 3 shall elect the form in which such benefit shall be paid from among those identified in this Section 4 consistent with time for making such an election in this paragraph (i).
(ii)           Optional Forms of Payment.
(A)           Lump Sum Option.  All benefits provided by the Plan shall be payable in a single lump sum payment, computed under the applicable provisions of Section 3.  A retiree’s benefit is payable as a lump sum at the time specified under Section 3(iii) (or as soon thereafter as reasonably possible), in a manner pursuant to the election under Section 4(i) under an option identified in one of the following sub-paragraphs of this Section 4(ii), but only if the retiree was eligible for the Ashland Inc. Deferred Compensation Plan for Employees (2005), or its successor.  In all other events, the retiree’s benefit shall be distributed as a lump sum at the time specified under Section 3(iii) (or as soon thereafter as reasonably possible).  A lump sum benefit payment of a benefit under Section 3(i) shall be computed on the basis of the actuarially equivalent present value of such retiree’s benefit under Section 3(i) of the Plan payable at the particular time applicable based upon such actuarial assumptions (including the interest rate) as determined from time to time by the Personnel and Compensation Committee of Ashland’s Board of Directors (Committee).
(B)           Default Lump Sum Deferral Option.  If the eligible employee fails to make an election under Section 4(i) then the benefit shall be transferred at the time specified under Section 3(iii) (or as soon thereafter as reasonably possible) to the Ashland Inc. Deferred Compensation Plan for Employees (2005), or its successor, and held pursuant to the terms of such plan and thereafter distributed as provided thereunder.  Notwithstanding the foregoing, if an eligible employee fails to make an election under this Plan, but does make an effective election for the distribution of a benefit under the SERP, then the distribution of the benefit hereunder shall be made in the same manner as the eligible employee had elected under the SERP.  In all events, an eligible employee who is a Specified Employee shall have the transfer or other distribution of his or her benefit which is made on account of a Termination of Employment commence on a date that is not earlier than six months after his or her Termination of Employment.
(C)           Lump Sum Payment Option.  An eligible employee may elect to have his or her benefit paid as a single lump sum at the time specified under Section 3(iii) (or as soon thereafter as reasonably possible).  In all events, an eligible employee who is a Specified Employee shall have the distribution of his or her benefit which is made on account of a Termination of Employment commence on a date that is not earlier than six months after his or her Termination of Employment.
(D)           Elective Lump Sum Deferral Option.  An eligible employee may elect to have his or her benefit transferred to the Ashland Inc. Deferred Compensation Plan for Employees (2005), or any successor thereto, as a single lump sum at the time specified under Section 3(iii) (or as soon thereafter as reasonably possible), and held pursuant to the terms of such plan and thereafter distributed as provided thereunder.  In all events, an eligible employee who is a Specified Employee shall have the transfer of his or her benefit which is made on account of a Termination of Employment commence on a date that is not earlier than six months after his or her Termination of Employment.
(E)           Time of Distribution or Transfer.  Subject to the required delay of a distribution or transfer of a Plan benefit for an eligible employee who is a Specified Employee, the distribution or transfer of a benefit in the foregoing sub-paragraphs of this Section 4(ii) shall be paid by the later of (a) the end of the calendar year in which occurs the date specified under Section 3(iii) or (b) the 15th day of the third calendar month following such date.
(F)           Death Before Payment.  For deaths occurring after the approval of this restatement, if an eligible employee or a retiree with a vested benefit eligible under Section 2 for the benefit under Section 3 dies before his or her Effective Retirement Date, the benefit that would have been paid to such eligible employee or retiree had he or she survived to his or her Effective Retirement Date shall be paid to the beneficiary designated by such eligible employee or retiree as he or she elected 

from the options made available by Ashland; provided, however, that the benefit must be completely distributed by the end of the fifth calendar year following the calendar year in which the eligible employee or retiree died.  In the absence of an election, the benefit shall be paid in January of the calendar year following the calendar year in which the eligible employee or retiree died.  If the eligible employee or retiree dies before he or she attained age 55 and before the sum of his or her age and years of continuous service equaled 80, the benefit payable hereunder shall be actuarially adjusted using the assumptions under the Affected Plan that applied at the time of the eligible employee’s or retiree’s death
(G)           Distribution Exceptions.  Notwithstanding anything in the Plan to the contrary, the following shall apply to the distribution of benefits under the Plan:
(a)           Distribution shall be made pursuant to a domestic relations order as described in Section 5;
(b)           Distribution of a benefit shall be made in a single lump sum payment as soon as possible after a retiree’s Termination of Employment or death if the distribution, when added to the amount that would be payable from the Ashland Inc. Supplemental Early Retirement Plan for Certain Employees will not exceed the adjusted Code section 402(g) limit; and
(c)           Distribution may be made in the discretion of Ashland for any other permitted purpose under Treas. Reg. section 1.409A-3(j)(4)(ii)-(xiv).
5.           Non-Assignment Except for Domestic Relations Order.  Except as otherwise provided in connection with a division of property under a domestic relations proceeding under state law and subject to Section 9(iii), no right or interest of the eligible employees or retirees under this Plan shall be subject to involuntary alienation, assignment or transfer of any kind.  An eligible employee may voluntarily assign his or her rights under the Plan.  Ashland, the Board, the Committee and any of their delegates shall not review, confirm, guarantee or otherwise comment on the legal validity of any voluntary assignment.  Ashland and its delegates may review, provide recommendations and approve submitted domestic relations orders using procedures similar to those that apply to qualified domestic relations orders under the qualified pension plans sponsored by Ashland.  A domestic relations order intended to assign a benefit hereunder to a former spouse of an eligible employee must be delivered to the Company.  The Company will review the order to determine if it is qualified.  Upon notification by the Company that the order is qualified, the spouse will be able to elect a distribution of the assigned benefit by the end of the fifth calendar year following the calendar year during which the Company notifies the former spouse that the order is qualified.  In all events, the entire assigned benefit must be distributed by the end of the fifth calendar year following the calendar year during which the Company notifies the former spouse that the order is qualified.  Notwithstanding anything in the Plan to the contrary, if an assigned benefit is equal to or less than the adjusted Code section 402(g) limit it shall be distributed to the former spouse as soon as administratively possible.  The amount of assigned benefits shall be calculated in a manner consistent with the table summary attached hereto and incorporated herein as Appendix A.  The Company may prescribe procedures that are consistent with this Section 5 and applicable law to implement benefit assignments pursuant to qualified orders.
6.           Costs.  In appropriate cases, Ashland may cause an affiliate to make the payment (or an allocable portion thereof) called for by the Plan directly to the person eligible to receive such payments.
7.           Confidentiality and No Competition  All benefits under the Plan shall be forfeited by anyone who discloses confidential information to others outside of Ashland’s organization without the prior written consent of Ashland or who accepts, during a period of five (5) years following his or her retirement, any employment or consulting activity which is in direct conflict with the business of Ashland at such time.  Such determination shall be made in the sole discretion of Ashland.  A breach of this Section 8 shall result in an immediate forfeiture of benefits payable to any retiree under the Plan.
8.           Lost Participant/Beneficiary.  In the event Ashland, after reasonable effort, is unable to locate a person to whom a benefit is payable under the Plan, such benefit shall be forfeited; provided, however, that such benefit shall be reinstated (in the 

same amount and form as that of the benefit forfeited without any obligation to pay amounts which would otherwise have previously come due) upon proper claim made by such person prior to termination of the Plan.
9.           Miscellaneous.
(i)           The obligations of Ashland and any affiliate thereof with respect to benefits under this Plan constitute merely the unsecured promise of Ashland and/or its affiliates, as the case may be, to make the payments provided for in this Plan.  No property of Ashland or any affiliate is or shall, by reason of the Plan, be held in trust or be deemed to be held in trust for any person and any participant or beneficiary under the Plan, the estate of either of them and any person claiming under or through them shall not have, by reason of the Plan, any right, title or interest of any kind in or to any property of Ashland and its affiliates.  To the extent any person has a right to receive payments under the Plan, such right shall be no greater than the right of any unsecured general creditor of Ashland/ or its affiliates.
(ii)           Ashland shall administer the Plan.  Ashland shall have full power and authority to amend, modify, or terminate the Plan and shall have all powers and the discretion necessary and convenient to administer the Plan in accor­dance with its terms, including, but not limited to, all neces­sary, appropriate, discretionary and convenient power and authority to inter­pret, administer and apply the provisions of the Plan with respect to all persons having or claiming to have any rights, benefits, entitlements or obligations under the Plan.  This includes, without limitation, the ability to construe and inter­pret provisions of the Plan, make determinations regarding law and fact, reconcile any inconsistencies between provisions in the Plan or between provisions of the Plan and any other statement concerning the Plan, whether oral or written, supply any omissions to the Plan or any document asso­ciated with the Plan, and to correct any defect in the Plan or in any document associated with the Plan.  All such interpretations of the Plan and documents associated with the Plan and questions concerning its administration and application, as determined by Ashland, shall be binding on all persons having an interest under the Plan.  Ashland may delegate (and may give to its delegatee the power and authority to redelegate) to any person or persons any responsibility, power or duty under the Plan.  Decisions of Ashland or its delegatee shall be final, conclusive, and binding on all parties.
(iii)           Ashland or any affiliate may, offset or cause an offset to be made against any payment to be made under the Plan in regard to amounts due and owing from such person to Ashland or any affiliate.  Notwithstanding anything to the contrary in this paragraph (iii), legally required tax withholding on benefit payments, the recovery, by any means, of previously made overpayments of Plan benefits, or the direct deposit of Plan benefit payments in a bank or similar account, provided that such direct deposits are allowed by Ashland in the administration of the Plan and provided that such direct deposit is not part of an arrangement constituting an assignment or alienation, shall not be considered to be prohibited under this paragraph (iii).
(iv)           No amount paid or payable under the Plan shall be deemed salary or other compensation to any employee for the purpose of computing benefits to which such employee or any other person may be entitled under any employee benefit plan of Ashland or any affiliate.
(v)           To the extent that state law shall not have been preempted by ERISA or any other law of the United States, the Plan shall be governed by the laws of the Commonwealth of Kentucky.
10.   Change in Control.  Notwithstanding any provision of this Plan to the contrary, in the event of a Change in Control (as defined hereinafter in this Section 10), any employee who would or will meet the requirements of Section 2, except that such employee has not or is not eligible to retire or terminate with a vested early, normal or deferred retirement benefit under any Affected Plan, shall be deemed to have a vested benefit hereunder, regardless of when such employee actually retires and commences benefits under an Affected Plan and such entitlement shall be vested from and after the time of such Change in Control.  Ashland shall reimburse an employee for legal fees and expenses incurred if he or she is required to, and is successful in, seeking to obtain or enforce any right to payment pursuant to the Plan after a Change in Control.  In the event that it shall be determined that such employee is properly entitled to the payment of benefits hereunder, such employee shall also be entitled to interest thereon payable 

in an amount equivalent to the prime rate of interest (quoted by Citibank, N.A. as its prime commercial lending rate on the latest date practicable prior to the date of the actual commencement of payments) from the date such payment(s) should have been made to and including the date it is made.  Notwithstanding any provision of this Plan to the contrary, the Plan may not be amended after a Change in Control without the written consent of a majority of the Board of Directors of Ashland (hereinafter “Board”) who were directors prior to the Change in Control.  For purposes of this Section 10, Change in Control shall be deemed to occur (1) upon approval of the shareholders of Ashland (or if such approval is not required, upon the approval of the Board) of (A) any consolidation or merger of the Company (a “Business Combination”), other than a consolidation or merger of the Company into or with a direct or indirect wholly-owned subsidiary, in which the shareholders of the Company own, directly or indirectly, less than 50% of the then outstanding shares of common stock of the Business Combination that are entitled to vote generally for the election of directors of the Business Combination or pursuant to which shares of the Company's Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company's Common Stock immediately prior to the merger have substantially 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, provided, however, that no sale, lease, exchange or other transfer of all or substantially all the assets of Ashland shall be deemed to occur unless assets constituting 80% of the total assets of Ashland 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 Ashland, (2) when any person (as defined in Section 3(a)(9) or 13(d) of the Exchange Act), other than Ashland or any subsidiary or employee benefit plan or trust maintained by Ashland, shall become the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 25% of Ashland’s Common Stock outstanding at the time, without the approval of the Board, or (3) at any time during a period of two consecutive years, individuals who at the beginning of such period constituted the Board shall cease for any reason to constitute at least a majority thereof, unless the election or the nomination for election by Ashland’s shareholders of each new director during such two-year period was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such two-year period.
		
	11.          (a) 
	Initial Claim – Notice of Denial.  If any claim for benefits (within the meaning of section 503 of ERISA) is denied in whole or in part, Ashland (which shall include Ashland or its delegate throughout this Section 11) will provide written notification of the denied claim to the participant or beneficiary, as applicable, (hereinafter referred to as the claimant) in a reasonable period, but not later than 90 days after the claim is received.  The 90-day period can be extended under special circumstances.  If special circumstances apply, the claimant will be notified before the end of the 90-day period after the claim was received. The notice will identify the special circumstances.  It will also specify the expected date of the decision.  When special circumstances apply, the claimant must be notified of the decision not later than 180 days after the claim is received.

The written decision will include:

		
	(i)
	The reasons for the denial.

		
	(ii)
	Reference to the Plan provisions on which the denial is based.  The reference need not be to page numbers or  to section headings or titles.  The reference only needs to sufficiently describe the provisions so that the provisions could be identified based on that description.

		
	(iii)
	A description of additional materials or information needed to process the claim.  It will also explain why those materials or information are needed.

		
	(iv)
	A description of the procedure to appeal the denial, including the time limits applicable to those procedures.  It will also state that the claimant may file a civil action under section 502 of ERISA (ERISA – §29 U.S.C. 1132).  The claimant must complete the Plan’s appeal procedure before filing a civil action in court.

If the claimant does not receive notice of the decision on the claim within the prescribed time periods, the claim is deemed denied.  In that event the claimant may proceed with the appeal procedure described below.

		
	(b) 
	Appeal of Denied Claim.  The claimant may file a written appeal of a denied claim with Ashland in such manner as determined from time to time.  Ashland is the named fiduciary under ERISA for purposes of the appeal of the denied claim.  Ashland  may delegate its authority to rule on appeals of denied claims and any person or persons or entity to which such authority is delegated may re-delegate that authority.  The appeal must be sent at least 60 days after the claimant received the denial of the initial claim.  If the appeal is not sent within this time, then the right to appeal the denial is waived.

The claimant may submit materials and other information relating to the claim.  Ashland will appropriately consider these materials and other information, even if they were not part of the initial claim submission.  The claimant will also be given reasonable and free access to or copies of documents, records and other information relevant to the claim.
 
Written notification of the decision on the appeal will be delivered to the claimant in a reasonable period, but not later than 60 days after the appeal is received.  The 60-day period can be extended under special circumstances.  If special circumstances apply, the claimant will be notified before the end of the 60-day period after the appeal was received. The notice will identify the special circumstances.  It will also specify the expected date of the decision.  When special circumstances apply, the claimant must be notified of the decision not later than 120 days after the appeal is received.
 
Special rules apply if Ashland designates a committee as the appropriate named fiduciary for purposes of deciding appeals of denied claims.  For the special rules to apply, the committee must meet regularly on at least a quarterly basis.
 
When the special rules for committee meetings apply the decision on the appeal must be made not later than the date of the committee meeting immediately following the receipt of the appeal.  If the appeal is received within 30 days of the next following meeting, then the decision must not be made later than the date of the second committee meeting following the receipt of the appeal.
 
The period for making the decision on the appeal can be extended under special circumstances.  If special circumstances apply, the claimant will be notified by the committee or its delegate before the end of the otherwise applicable period within which to make a decision.  The notice will identify the special circumstances.  It will also specify the expected date of the decision.  When special circumstances apply, the claimant must be notified of the decision not later than the date of the third committee meeting after the appeal is received.

In any event, the claimant will be provided written notice of the decision within a reasonable period after the meeting at which the decision is made.  The notification will not be later than 5 days after the meeting at which the decision is made.
 

Whether the decision on the appeal is made by a committee or not, a denial of the appeal will include:
 
		
	(i)
	The reasons for the denial.

		
	(i)
	Reference to the Plan provisions on which the denial is based.  The reference need not be to page numbers or to section headings or titles.  The reference only needs to sufficiently describe the provisions so that the provisions could be identified based on that description.

		
	(i)
	A statement that the claimant may receive free of charge reasonable access to or copies of documents, records and other information relevant to the claim.

		
	(ii)
	A description of any voluntary procedure for an additional appeal, if there is such a procedure.  It will also state that the claimant may file a civil action under section 502 of ERISA (ERISA – §29 U.S.C. 1132).

If the claimant does not receive notice of the decision on the appeal within the prescribed time periods, the appeal is deemed denied.  In that event the claimant may file a civil action in court.  The decision regarding a denied claim is final and binding on all those who are affected by the decision.  No additional appeals regarding that claim are allowed.

IN WITNESS WHEREOF, this amendment and restatement of the Plan is executed this 7 day of October, 2008.

	
				
	ATTEST:
	 
	 
	ASHLAND INC.

	 
	 
	 
	 

	 
	 
	 
	 

	/s/ Linda L. Foss
	 
	 
	/s/ Susan B. Esler 

	Secretary
	 
	By:
	Vice President Human Resources and Communications

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

APPENDIX A
 
Actuarial Assumptions for SERP/Excess Plan for Domestic Relations Orders*
 
	
							
	Employee Base Salary Pay Band
	 
	Employee Age
	 
	Former Spouse’s Age
	 
	Actuarial Assumptions

	≥ 23**
	 
	≥ Effective Retirement Date*** if had terminated on date the order is approved
	 
	≥ Employee’s age at Effective Retirement Date*** if employee had terminated on date the order is approved
	 
	No actuarial adjustment

	≥ 23**
	 
	Employee or former spouse or both < above age on date the order is approved
	 
	Employee or former spouse or both < above age on date the order is approved
	 
	Use Ashland Pension Plan assumptions that would apply to employee under the Pension Plan

	21, 22 (23)**
	 
	≥ 62
	 
	≥ 62
	 
	No actuarial adjustment

	21, 22 (23)**
	 
	Employee or former spouse or both < above age on date the order is approved
	 
	Employee or former spouse or both < above age on date the order is approved
	 
	Use Ashland Pension Plan assumptions that would apply to employee under the Pension Plan

*The Excess Plan would rarely be affected because, at least for those employees still under the traditional qualified pension plan formula, it is truly unknown whether a benefit is payable under the Excess Plan until the employee actually terminates employment.  Therefore, for an employee covered under the traditional qualified pension plan formula, the Excess Plan could only be subject to an order that is entered after the employee terminated employment.  Employees in the RGA formula have a determinable Excess Plan benefit each year because it is known each year whether they have missed contribution credits due to base compensation exceeding the Code §401(a)(17) limit.  Any actuarial adjustments to the Excess Plan benefit would use the applicable adjustments from the qualified pension plan.

**Band 23 employees under the old formula are treated the same as bands 21 and 22 employees.

***The Effective Retirement Date is the earliest date the employee could elect to commence SERP payments if the employee had actually terminated from employment.Exhibit

EXHIBIT 10.15

AMENDED AND RESTATED
ASHLAND INC.
SUPPLEMENTAL EARLY RETIREMENT PLAN
FOR CERTAIN EMPLOYEES
Generally Effective as of January 1, 2011

ARTICLE I.    PURPOSE AND EFFECTIVE DATE.
		
	1.01
	Purpose

The purpose of the Plan is to allow designated employees to retire prior to their sixty-fifth birthday without an immediate substantial loss of income.  This Plan is a supplemental retirement arrangement for a select group of management.

		
	1.02
	Effective Date

The Amended and Restated Ashland Inc. Supplemental Early Retirement Plan for Certain Employees is effective January 1, 2011, except as otherwise provided.  This amended and restated Plan supersedes all prior versions of this Plan that were effective before January 1, 2011 with respect to Effective Retirement Dates that occur on or after such date, except as may otherwise be provided herein.  The rights and obligations of former Employees receiving Plan benefits before January 1, 2011 shall be governed by the terms of the Plan in effect at the time of each such former Employee’s Effective Retirement Date or at the time such an Employee otherwise ceased to be an Employee.  Notwithstanding anything herein to the contrary, amendments to the Plan that were executed since July 1, 2003 through the date of the adoption of this amendment and restatement shall continue to apply hereafter according to their respective terms; provided, however, that Amendment No. 1 to the Eleventh restatement of the Plan that was effective December 31, 2004 shall be null and void and treated as though never adopted. 

ARTICLE II.    DEFINITIONS.
The following terms used herein shall have the following meanings unless the context otherwise requires:
		
	2.01
	“Age” - means the age of an Employee as of his or her last birthday, except as may otherwise be provided under Sections 5.01 and 5.02 in the event of a Change in Control.

		
	2.02
	“Annual Retirement Income” - means the lifetime annual income that would be payable to a Participant that is converted to the equivalent lump sum benefit payable under this Plan by Ashland commencing on such Participant’s Effective Retirement Date, subject to the provisions of Section 5.04.

		
	2.03
	“Ashland” - means Ashland Inc. and its present or future subsidiary corporations.

		
	2.04
	“Board” - means the Board of Directors of Ashland and its designees.

		
	2.05
	 “Change in Control” -shall be deemed to occur (1) upon approval of the shareholders of Ashland (or if such approval is not required, upon the approval of the Board) of (A) any consolidation or merger of the Company (a “Business Combination”), other than a consolidation or merger of the Company into or with a direct or indirect wholly-owned subsidiary, in which the shareholders of the Company own, directly or indirectly, less than 50% of the then outstanding shares of common stock of the Business Combination that are entitled to vote generally for the election of directors of the Business Combination or pursuant to which shares of the Company's Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company's Common Stock 

immediately prior to the merger have substantially 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, provided, however, that no sale, lease, exchange or other transfer of all or substantially all the assets of Ashland shall be deemed to occur unless assets constituting 80% of the total assets of Ashland 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 Ashland, (2) when any person (as defined in Section 3(a)(9) or 13(d) of the Exchange Act), other than Ashland or any subsidiary or employee benefit plan or trust maintained by Ashland, shall become the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 25% of Ashland’s Common Stock outstanding at the time, without the approval of the Board, or (3) at any time during a period of two consecutive years, individuals who at the beginning of such period constituted the Board shall cease for any reason to constitute at least a majority thereof, unless the election or the nomination for election by Ashland’s shareholders of each new director during such two-year period was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such two-year period.  
2.06    “Change in Control Agreements” - means those contractual agreements, in effect from time to time, which are approved
 by the Board and which provide an Employee with benefits in the event of a change in control as defined in such agreement
 or other benefits that may be included in such an agreement.  
2.07    “Committee” - means the Personnel and Compensation Committee of the Board and its designees. 
2.08    “Continuous Service” - means Continuous Service as defined in the Pension Plan, except as the determination of
     Continuous Service is modified for purposes of this Plan.
		
	2.09
	“Effective Retirement Date” - means: 

		
	(a)
	In General.  The Effective Retirement Date of an Employee that is a Participant under Section 3.01 is whichever of the following applies, so long as the Participant has at least five years of Continuous Service.

		
	(1)
	The Effective Retirement Date is the first day of the month following the date a Participant incurs a Termination of Employment - 

		
	(i)
	on or after the date the sum of the Participant’s Age and Continuous Service is 80; or 

		
	(ii)
	on or after the date the Participant attains Age 55.

		
	(2)
	The Effective Retirement Date of a Participant that incurs a Termination of Employment before the dates specified in (1) above is the first day of the month following the date the Participant attains Age 55.

		
	(b)
	Change in Control.  The Effective Retirement Date in the event of a Change in Control of a Participant considered to be a Level I or II Participant who has a Change in Control Agreement shall be the first day of the month following (i) such Participant’s termination for reasons other than “Cause” or (ii) such Participant’s resignation for “Good Reason” (as they are defined in the applicable Change in Control Agreement).  The Effective Retirement Date in the event of a Change in Control of a Participant considered to be a Level III, IV or V Participant, or who is considered to be a Level I or II Participant and who does not have a Change in Control Agreement, shall be the first day of the month following such Participant’s termination for reasons other than “Cause”.  For Participant’s who do not have a Change in Control Agreement with Ashland, “Cause” shall have the meaning given to that word in 

Section 3.02.  In the event a Change in Control, all Participants shall be completely vested in their Plan benefits, regardless of the number of their years of Continuous Service
		
	2.10
	“Employee” - means, a common law employee of Ashland who is paid on the United States payroll of Ashland Inc.  

		
	2.11
	“Final Average Bonus” - means the Participant’s average bonus paid under the Incentive Compensation Plan (including amounts that may have been deferred) during the highest thirty-six (36) months out of the final eighty-four-month (84) period.  The calculation of the eighty-four month period shall be measured back from the Participant’s Termination of Employment that is nearest to or which is coincident with the Participant’s Effective Retirement Date.  If the Participant becomes classified below a Level V Employee before the Termination of Employment identified in the preceding sentence, then the date of such change in classification is substituted for the said Termination Date.  For these purposes, the “bonus paid” for a particular month within a particular fiscal year under such plan shall be equal to the amount of such bonus actually paid (regardless of the date paid, but excluding any adjustment for the deferral of such payment) to such Participant on account of such fiscal year divided by the number of months contained in such fiscal year which were used in determining the amount of such bonus actually paid to such Participant.  The bonus paid that is used to compute the average described in this Section 2.11 shall only be a bonus that is paid to the Participant when such Participant is considered a Level III, IV or V Participant.

		
	2.12
	“Final Average Compensation” - means the average total compensation paid during the highest paid month period (whether or not consecutive) as determined by the following chart out of the final month period (whether or not consecutive) as determined by the following chart:

    	
			
	Termination of Employment:
	Highest Paid
Month Period
	Final 
Month Period

	January 2011
	36 months
	84 months

	February 2011
	37 months
	85 months

	March 2011
	38 months
	86 months

	April 2011
	39 months
	87 months

	May 2011
	40 months
	88 months

	June 2011
	41 months
	89 months

	July 2011
	42 months
	90 months

	August 2011
	43 months
	91 months

	September 2011
	44 months
	92 months

	October 2011
	45 months
	93 months

	November 2011
	46 months
	94 months

	December 2011
	47 months
	95 months

	January 2012 to December 2015
	48 months
	96 months

	January 2016
	48 months
	107 months

	February 2016
	49 months
	108 months

	March 2016
	50 months
	109 months

	April 2016
	51 months
	110 months

	May 2016
	52 months
	112 months

	June 2016
	53 months
	113 months

	
			
	July 2016
	54 months
	114 months

	August 2016
	55 months
	115 months

	September 2016
	56 months
	116 months

	October 2016
	57 months
	117 months

	November 2016
	58 months
	118 months

	December 2016
	59months
	119 months

	January 2017 and after
	60 months
	120 months

The calculation of the final period shall be measured back from the Participant’s Termination of Employment that is nearest to or which is coincident with the Participant’s Effective Retirement Date.  If the Participant becomes classified below a Level II Employee before the Termination of Employment identified in the preceding sentence, then the date of such change in classification is substituted for the said Termination Date.  For these purposes, “total compensation paid” is the sum of the “compensation paid” and the “bonus paid” during a particular month. “Compensation paid” shall be the base rate of compensation for such Participant in effect on the first day of such calendar month.  “Bonus paid” shall have the same meaning as set forth in Section 2.11.  In the event a payment is due under the Plan after a Change in Control because the Participant was terminated other than for “Cause” or resigned for “Good Reason,” the calculation of Final Average Compensation shall include the amount paid under such Participant’s Change in Control Agreement.  The amount so paid shall be divided by 36 to derive the monthly “total compensation paid” it represents.  The total compensation paid that is used compute the average described in this Section 2.12 shall only be total compensation that is paid to the Participant when such Participant is considered a Level I or II Participant.  With respect to any Employee who becomes a Participant in the Plan on or after January 1, 2011, the total compensation paid that is used to compute the average in this Section 2.12 shall only be the bonus paid during a particular month.
2.13    “Hercules Employee” - means an Employee originally hired by Hercules Inc. or its subsidiary.
		
	2.14
	“Incentive Compensation Plan” - means the annual bonus paid to Employees in base salary pay band grades 21 and above under the applicable incentive compensation plan.

		
	2.15
	“LESOP” - means the Ashland Inc. Leveraged Employee Stock Ownership Plan.

		
	2.16
	“Level I, II, III, IV or V Participant or Employee” - means, the following corresponding base salary pay band grades on the records of the Company or any succeeding equivalent compensation grade designations:

	
		
	Level
	Base Salary Pay Band Grade

	Level I
	27-30

	Level II
	25-26

	Level III
	23-24

	Level IV
	22

	Level V
	21

		
	2.17
	“Participant” - means an Employee that meets the applicable requirements of Article III and who has not incurred a Termination of Employment for Cause, as defined in Section 3.02.  A former Employee that did not incur a Termination of Employment for Cause and who has a benefit being paid or payable from the Plan is also a Participant.  The term Participant includes Transition Participants, unless the context otherwise requires or unless expressly otherwise provided. 

		
	2.18
	“Pension Plan” - means the Ashland Hercules Pension Plan.

		
	2.19
	“Plan” - means the Amended and Restated Ashland Inc. Supplemental Early Retirement Plan for Certain Employees, generally effective as of January 1, 2011, as set forth herein.

		
	2.20
	“Service” - means the number of years and fractional years of employment by Ashland of an Employee, measured from the first day of the month coincident with or next succeeding his or her initial date of employment up to and including the earlier of such Employee's termination from employment or Effective Retirement Date.  For purposes of this Section 2.17, Service shall include an Employee’s employment with a subsidiary or an affiliate of Ashland determined in accordance with rules from time to time adopted or approved by the Board, or its delegate; provided, however, that Service for purposes of computing the amount of the benefit payable under the Plan shall not include any period of employment with a corporation or other business entity before such corporation or other business entity became an affiliate of Ashland Inc., as determined by the Board or its delegate. Service shall be calculated based on the rules for calculating Periods of Service under the Pension Plan, except as the determination of Service is modified for purposes of this Plan or under any other document that either directly or indirectly references the calculation of Service for purposes of the Plan.  Notwithstanding the foregoing, with respect to any Hercules Employee, Service shall be measured from January 1, 2011.

		
	2.21
	“Specified Employee” - means, for a particular calendar year, any Employee who was at anytime during the 12 months ending on the December 31 preceding the start of the particular calendar year (the Specified Employee identification date) classified on the records of Ashland as being in base salary pay band grade 23 or higher.  Such an Employee shall be classified as a Specified Employee as of January 1 of the particular calendar year (the Specified Employee effective date) and shall remain classified as such for the entirety of such calendar year.  Notwithstanding anything to the contrary, no more than 200 Employees may be classified as Specified Employees for any calendar year.  Unless otherwise provided in the particular document, this definition of Specified Employee shall apply to all plans, programs, contracts, agreements and other arrangements maintained by the Company that are subject to Code section 409A.   

		
	2.22
	“Termination of Employment” - means a termination from employment resulting in a cessation of performing active service for Ashland (other than by reason of death or disability).  An Employee is considered to incur a Termination of Employment on the date the Employee terminates employment with Ashland or when it is reasonably anticipated that the Employee's services to Ashland will permanently decrease to 20% or less of the average amount of services performed for Ashland during the immediately preceding 36 month period (or period of total employment if less than 36 months).  Notwithstanding anything in the foregoing to the contrary, a Termination of Employment does not occur as a result of military leave, sick leave or other bona fide leave of absence not exceeding six months or the period during which the Employee retains a right to reemployment.  

		
	2.23
	“Transition Participant” - means the Employees on June 30, 2003 that were in an employment classification that potentially made them eligible for the Plan and that - 

(a)were at least age 55 on June 30, 2003; or
(b)the sum of whose Age and Continuous Service was 80. 
Transition Participants shall remain subject to the terms of the Plan in effect before July 1, 2003 addressing the calculation and amount of benefits.  These Employees shall, however, be subject to the other changes that became effective thereafter and that apply to them as provided in the Plan as amended from time to time, such as those addressing the vesting of benefits and the change to the Effective Retirement Date.  

ARTICLE III.    PARTICIPATION IN PLAN.
Eligibility for benefits shall be determined as follows:
		
	3.01
	Participation after January 1, 2011

Any Employee who was a Participant in the Plan as of December 31, 2010 shall continue to participate in the Plan.  Effective as of January 1, 2011, any Employee who participated in the Pension Plan but was not eligible for the Retirement 

Growth Account under Section 3.3 of said plan and is classified as a Level I, II, III, IV or V Employee shall participate in the Plan.  After earning five years of Continuous Service, whenever earned, a Participant shall be completely vested in the applicable benefit under Plan.  The determination of whether a Level III, IV or V Employee receives a reduced benefit for commencement before age 62 under Section 5.02(c) is made based on the Employee’s deemed status on the Effective Retirement Date.  Notwithstanding such vesting, a Participant forfeits the right to receive any benefit under this Plan if the Participant incurs a Termination of Employment for Cause, as defined in Section 3.02.  A Participant may also forfeit the right to the Plan benefit and may have to repay a prior distribution pursuant to the provisions of Section 4.02.  Participation in the Plan is not subject to an election by an Employee.  Participation is automatic and is based on the Employee’s status on Ashland’s records at the applicable time.
		
	3.02
	Termination for Cause

Ashland reserves the right to terminate any Participant for “Cause” prior to his or her Effective Retirement Date, with a resulting forfeiture of the payment of benefits under the Plan.  Ashland also reserves the right to terminate any Participant’s participation in the Plan for “Cause” subsequent to his or her Effective Retirement Date.  For purposes of this Section 3.02, “Cause” shall mean the willful and continuous failure of a Participant to substantially perform his or her duties to Ashland (other than any such failure resulting from incapacity due to physical or mental illness), or the willful engaging by a Participant in gross misconduct materially and demonstrably injurious to Ashland, each to be determined by Ashland in its sole discretion.
		
	3.03
	Automatic Vesting for Change in Control

Subject to the provisions of Article VI, in the event of a Change in Control (as defined in Section 2.05), an Employee who is deemed to be a Level I, II, III, IV or V Participant shall automatically be completely vested in his or her benefits, regardless of the number of years of Continuous Service.   

ARTICLE IV.    INTERACTION WITH CHANGE IN CONTROL AGREEMENTS.
		
	4.01
	Terminations - General

Notwithstanding any provision of this Plan to the contrary, an Employee who has entered into an Change in Control Agreement with Ashland and who is terminated without “Cause” or resigns for “Good Reason” following a “change in control of Ashland” (each quoted term as defined in the applicable Change in Control Agreement) shall be entitled to receive the benefits as provided pursuant to this Plan.  Benefits payable hereunder in such a situation shall be calculated in accordance with the payment option elected by the Employee.
		
	4.02
	Subsequent Activity in Conflict with Ashland

The provisions of this Section 4.02 shall apply to Level I, II, III, IV and V Participants, regardless of whether such a Participant has a Change in Control Agreement; except that the provisions of this Section 4.02 shall not apply to any Participant after a Change in Control.  If a Participant accepts, during a period of five (5) years subsequent to his or her Effective Retirement Date, or Termination of Employment, if earlier, any consulting or employment activity which is in direct and substantial conflict with the business of Ashland at such time (such determination regarding conflicting activity to be made in the sole discretion of the Board), he or she shall be considered in breach of the provisions of this Section 4.02; provided, however, he or she shall not be restricted in any manner with respect to any other non-conflicting activity in which he or she is engaged.
If a Participant wishes to accept employment or consulting activity which may be prohibited under this Section 4.02, such Participant may submit to Ashland written notice (Attention: Vice President Human Resources and Communications or any successor position thereto) of his or her wish to accept such employment or consulting activity.  If within ten (10) 

business days following receipt of such notice Ashland does not notify the Participant in writing of Ashland’s objection to his or her accepting such employment or consulting activity, then such Participant shall be free to accept such employment or consulting activity for the period of time and upon the basis set forth in his or her written request.
In the event the provisions of this Section 4.02 are breached by a Participant, the Participant shall not be entitled to any additional payments hereunder (whether directly from this Plan or from a SERP Account for such Participant from the Ashland Inc. Deferred Compensation Plan for Employees (2005)) and shall be liable to repay to Ashland all amounts such Participant received prior to such breach.  If a Participant who breaches the provisions of this Section 4.02 received a lump sum distribution of his or her benefit prior to such breach, such Participant shall be liable to repay to Ashland the amount of such distribution.  If a Participant who breaches the provisions of this Section 4.02 deferred all or any part of a lump sum distribution hereunder to the Ashland Inc. Deferred Compensation Plan for Employees (2005), the amount so deferred shall be forfeited, and if any amount of the amount so deferred was distributed from the Ashland Inc. Deferred Compensation Plan for Employees (2005) before the breach occurred, the amount so distributed shall be repaid to Ashland.  Any repayment of benefits hereunder shall be assessed interest at the rate applicable for the calculation of a lump sum payment under Section 5.04(b) for the month in which the breach occurs, with such interest compounded monthly from the month in which the breach occurs to the month in which such repayment is made to Ashland.  Ashland shall have available to it all other remedies at law and equity to remedy a breach of this Section 4.02.

ARTICLE V.    RETIREMENT INCOME AND OTHER BENEFITS.
		
	5.01
	LEVELS I AND II.

(a)  Transition Participants.  The Transition Participants who are Level I or II Participants are eligible to receive Annual Retirement Income equal to:    
		
	(1)
	Pre-Age 62 Benefit

A Transition Participant who retires under this Plan, including a Transition Participant to whom the provisions of paragraph (b) of this Section 5.01 apply, shall receive an Annual Retirement Income lump sum benefit for the period from and after the first day of the calendar month next following his or her Effective Retirement Date until the end of the month in which he or she attains age 62 equal to the greater of (1) the amounts provided in the following schedule or (2) 50% of Final Average Compensation. Notwithstanding the previous sentence, in the event such Transition Participant retired with less than 20 years of Service, such Annual Retirement Income lump sum benefit amount shall be multiplied by a fraction (A) the numerator of which is such Transition Participant’s years of and fractional years of Service, and (B) the denominator of which is twenty (20).
    	
			
	 
	 
	% of

	Retirement
	 
	Compensation

	1st    -    Year After Effective        
	75%

	              Retirement Date

	70%

	2nd   -     "
	 
	65%

	3rd    -     "
	 
	60%

	4th    -     "
	 
	55%

	5th    -     "
	 
	50%

	6th    -     Year and thereafter
	 

	                to Age 62

	 

For purposes of this Section 5.01(a), “% of Compensation” shall mean the annualized average of the Transition Participant’s base monthly compensation rates (excluding incentive awards, bonuses, and any other form of extraordinary compensation) in effect with respect to Ashland on the first day of the thirty-six (36) consecutive calendar months which will give the highest average out of the one-hundred twenty (120) consecutive calendar month period ending on the Transition Participant’s Effective Retirement Date.
(2)    Age 62 Benefit and Thereafter
From and after the first day of the calendar month next following his or her Effective Retirement Date, or the attainment of age 62, whichever is later, the Transition Participant’s Annual Retirement Income lump sum benefit amount shall be equal to 50% of Final Average Compensation; provided, however, that in the event such Transition Participant retired with less than 20 years of Service, such Annual Retirement Income shall be 50% of Final Average Compensation multiplied by a fraction (A) the numerator of which is such Transition Participant’s years of and fractional years of Service, and (B) the denominator of which is twenty (20).
(3)    Benefit Reduction
The amount of benefit provided in paragraphs (1) and (2) of this Section 5.01 shall be reduced by the 
sum of the following:
		
	    (A)
	the Transition Participant’s benefit under the Pension Plan (assuming 50% of such Transition Participant’s account under the LESOP were transferred to the Pension Plan, as allowed under the terms of each of the said plans and disregarding any benefit assignment under an approved qualified domestic relations order affecting either the Pension Plan or the LESOP), determined on the basis of a single life annuity form of benefit;

		
	    (B)
	the Transition Participant’s benefit under any other defined benefit pension plan qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended which is maintained by Ashland, determined by disregarding any benefit assignment under an approved qualified domestic relations order and on the basis of a single life annuity form of benefit (said plans referred to in sub-paragraphs (1) and (2) of this paragraph (c) are hereinafter referred to jointly and severally as the “Affected Plans”);

		
	   (C)
	the Transition Participant’s benefit under the Ashland Inc. Nonqualified Excess Benefit Pension Plan, determined on the basis of a single life annuity form of benefit; and

		
	   (D)
	the Transition Participant’s benefit under the Ashland Inc. ERISA Forfeiture Plan attributable to amounts which were forfeited under the LESOP, multiplied by 50%, and determined on the basis of a single life annuity benefit.

Because a Transition Participant’s benefit hereunder is payable as a lump sum, the reduction to such benefit shall be calculated based upon the lump sum actuarial present value of the benefits referred to in subparagraphs (A)-(D) of this paragraph (3).  Such calculation shall be conducted on the basis that the benefits referred to in said subparagraphs (A)-(D) commence at the same time as of which the benefit in this Plan is paid as a lump sum, using the Transition Participant’s attained age at the time of such commencement, unless otherwise required in paragraph (d) of this Section 5.01.  
(b)    Benefit After a Change in Control
		
	(1)
	Participants Having Change in Control Agreements.  A Participant having a Change in Control Agreement who either is terminated without “Cause” or resigns for “Good Reason” after a Change in Control shall have the benefit payable under this Section 5.01 computed by adding 3 years to the Participant’s Age and Service at the Participant’s Effective Retirement Date.  These additions to Age and Service shall, except as otherwise provided, apply for purposes of computing the single life 

annuity payment to the Participant that is converted to Annual Retirement Income lump sum benefit amount, if applicable.  A Participant subject to this paragraph (b)(1) whose Effective Retirement Date occurs before attaining an actual age of 55 shall have the 3 year addition to Age apply when converting the single life annuity amount (if applicable) to the Annual Retirement Income lump sum benefit amount.  If the Effective Retirement Date of a Participant subject to this paragraph (b)(1) occurs on or after the Participant attains an actual age of 55, then the Participant's actual age shall be used when making such a conversion.  Notwithstanding anything to the contrary contained herein, when converting a Participant's single life annuity (if applicable) to the lump sum payment, the Participant's actual age shall be used without reference to the additional 3 years.  If the addition of 3 years to the Participant’s age results in an Age less than 55 and the Participant commences the benefit, the amount of the benefit shall be adjusted to account for the fact it is paid before the Participant’s attainment of Age 55.  This adjustment shall be based upon the early retirement table in Section 6.2 of the Ashland Inc. and Affiliates Pension Plan as it existed on September 30, 1999.  When applying this table under these circumstances, age 55 shall be substituted for age 62 and adjustments for ages younger than those on the table shall be reasonably determined by an actuary or actuarial firm who regularly performs services in connection with the Plan.
		
	(2)
	Participants Without Change in Control Agreements.  A Participant without a Change in Control Agreement who is terminated without “Cause” after a Change in Control shall have the benefit payable under this Section 5.01 computed by adding the applicable amount to the Participant’s Age and Service at the Participant’s Effective Retirement Date.  For these purposes, the applicable amount is derived from the following table.  

	
		
	Length of Participant’s Service at Separation from Employment
	Number of Years
(the Applicable Amount)

	Up to 5 years
	3 months

	More than 5 and up to 10 years
	6 months

	More than 10 and up to 15 years
	1 year

	More than 15 and up to 20 years
	1 year and 6 months

	More than 20 years
	2 years

These additions to Age and Service shall, except as otherwise provided, apply for purposes of computing the single life annuity payment (if applicable) to the Participant that would be converted to the Annual Retirement Income lump sum benefit amount.  A Participant subject to this paragraph (b)(2) whose Effective Retirement Date occurs before attaining an actual age of 55 shall have the applicable amount added to such Participant’s Age apply when converting the single life annuity amount (if applicable) to the Annual Retirement Income lump sum benefit amount.  If the Effective Retirement Date of a Participant subject to this paragraph (b)(2) occurs on or after the Participant attains an actual age of 55, then the Participant's actual age shall be used when making such a conversion.  Notwithstanding anything to the contrary contained herein, when converting a Participant's single life annuity (if applicable) to a lump sum payment option, the Participant's actual age shall be used without reference to the addition of the applicable amount.  If the addition of the applicable amount to the Participant’s age results in an Age less than 55 and the Participant commences the benefit, the amount of the benefit shall be adjusted to account for the fact it is paid before the Participant’s attainment of Age 55.  This 

adjustment shall be based upon the early retirement table in Section 6.2 of the Ashland Inc. and Affiliates Pension Plan as it existed on September 30, 1999.  When applying this table under these circumstances, age 55 shall be substituted for age 62 and adjustments for ages younger than those on the table shall be reasonably determined by an actuary or actuarial firm who regularly performs services in connection with the Plan.
		
	(c)
	  Benefit after June 30, 2003.  Subject to the applicable provisions of paragraph (b) above, the vested benefit payable to a Participant on the Effective Retirement Date for the period such Participant was deemed classified as a Level I or II Participant is equal to 25% of Final Average Compensation multiplied by years of Service not to exceed 20 years of Service.  Service includes full and fractional years.  There is no reduction for commencement before age 62 and there is no increase for commencement after age 62.  The normal form of the benefit so computed is a single lump sum payment.  The benefit so payable shall be reduced by the actuarially equivalent (as defined below) lump sum benefit from the following plans from which the Participant is entitled to a distribution:

		
	(1)
	the Pension Plan (assuming 50% of such Participant’s account - if any - under the LESOP were transferred to the Pension Plan, as allowed under the terms of each of the said plans and disregarding any benefit assignment under an approved qualified domestic relations order affecting either the Pension Plan or the LESOP);

		
	(2)
	the benefit under any other defined benefit pension plan qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended which is maintained by Ashland, determined by disregarding any benefit assignment under an approved qualified domestic relations order (said plans referred to in sub-paragraphs (1) and (2) of this paragraph (c) are hereinafter referred to jointly and severally as the “Affected Plans”);

		
	(3)
	the benefit under the Ashland Inc. Nonqualified Excess Benefit Pension Plan; and

		
	(4)
	the benefit under the Ashland Inc. ERISA Forfeiture Plan attributable to amounts which were forfeited under the Ashland Inc. Leveraged Employee Stock Ownership Plan, multiplied by 50%.

An interest rate assumption of 8% and the Section 415/417 Mortality Table in the Pension Plan shall be used for purposes of computing the actuarial equivalence of the reductions in the above numbered paragraphs, except for computing the actuarial equivalence of the benefit under the Ashland Inc. Nonqualified Excess Benefit Pension Plan under above paragraph (3).  Effective for Effective Retirement Dates on and after October 1, 2007, the computation under said paragraph (3) shall be conducted using the same assumptions as apply to the computation of the benefit payable under the Ashland Inc. Nonqualified Excess Benefit Pension Plan.  Actuarial equivalence shall be determined as of the Effective Retirement Date.
(d)    Changes in Status.  
		
	(1)
	Subject to the applicable provisions of paragraph (b) above, a Participant that earned a benefit under this Section 5.01 and that also earned a benefit under Section 5.02 shall receive the greater of the two benefits produced.  

		
	(2)
	If a Participant that earns a benefit hereunder is not considered to be a Level I, II, III, IV or V Participant on the earlier of the Participant’s Effective Retirement Date or Termination of Employment, then the Service after such Participant ceased to be considered a Level I, 

II, III, IV or V Participant shall be disregarded for purposes of computing the benefit payable under the Plan.  In that event, the only Service that shall be counted for purposes of computing the benefit payable under the Plan shall be the Service the Participant earned while considered to be a Level I, II, III, IV or V Participant.  Notwithstanding anything in the foregoing to the contrary, such a Participant shall be credited with a minimum of five years of Service, so long as such Participant has at least five years of Continuous Service.  
(e)    Specified Employee.  Notwithstanding anything contained in the Plan to the contrary, a Transition Participant or a Participant who is a Specified Employee shall have the distribution of his or her benefit which is made on account of a Termination of Employment commence on a date that is not earlier than six months after his or her Termination of Employment. 
5.02    LEVELS III, IV AND V.
(a)    General
The Annual Retirement Income lump sum benefit amount of a Transition Participant (including a Transition Participant to whom the provisions of paragraph (b) of this Section 5.02 apply) who on his or her Effective Retirement Date was deemed to be a Level III, IV, or V Participant shall, from and after the first day of the calendar month next following his or her 62nd birthday, be equal to 50% of the Transition Participant’s Final Average Bonus; provided, however, that in the event such Transition Participant retired with less than 20 years of Service, such Annual Retirement Income after age 62 shall be 50% of Final Average Bonus multiplied by a fraction (A) the numerator of which is such Participant’s years of and fractional years of Service, and (B) the denominator of which is twenty (20).  Although a Transition Participant may elect to commence benefits under this Plan upon his or her Effective Retirement Date, there shall be an actuarial adjustment (consistent with that applied under Ashland’s qualified pension plan, as from time to time in effect) for Participants receiving benefits under this Section 5.02 whose Effective Retirement Date is prior to age 62.
(b)    Benefit After a Change in Control
A Participant who is terminated other than for “Cause” after a Change in Control shall have the benefit payable under this Section 5.02 computed by adding to the Participant’s Age and Service at the Participant’s Effective Retirement Date the number of years equal to the applicable amount for the Participant derived from the following table.  
	
		
	Length of Participant’s Service at Separation from Employment
	Number of Years
(the Applicable Amount)

	Up to 5 years
	3 months

	More than 5 and up to 10 years
	6 months

	More than 10 and up to 15 years
	1 year

	More than 15 and up to 20years
	1 year and 6 months

	More than 20 years
	2 years

These additions to Age and Service shall, except as otherwise provided, apply for purposes of computing the single life annuity payment (if applicable) to the Participant that would be converted to the Annual Retirement Income lump sum benefit amount.  A Participant subject to this paragraph (b) whose Effective Retirement Date occurs before attaining an actual age of 62 shall have the applicable amount from the table hereinabove added to his or her Age apply when converting the single life annuity amount 

(if applicable) to the Annual Retirement Income lump sum benefit amount.  If the Effective Retirement Date of a Participant subject to this paragraph (b) occurs on or after the Participant attains an actual age of 62, then the Participant's actual age shall be used when making such a conversion.  Notwithstanding anything to the contrary contained herein, when converting a Participant's single life annuity (if applicable) to the lump sum payment, the Participant's actual age shall be used without reference to the applicable amount derived from the table hereinabove.  If the addition of the applicable amount from the table hereinabove to the Participant’s age results in an Age less than 62 and the Participant commences the benefit, the amount of the benefit shall be adjusted to account for the fact it is paid before the Participant’s attainment of Age 62.  This adjustment shall be based upon the early retirement table in Section 6.2 of the Ashland Inc. and Affiliates Pension Plan as it existed on September 30, 1999, and adjustments for ages younger than those on the table shall be reasonably determined by an actuary or actuarial firm who regularly performs services in connection with the Plan.  
(c)    Benefit after June 30, 2003.  Subject to the applicable provisions of paragraph (b) above, the vested benefit payable to a Participant on the Effective Retirement Date for the period such Participant was deemed classified as a Level III, IV or V Participant is equal to 25% of Final Average Bonus multiplied by years of Service not to exceed 20 years of Service.  Service includes full and fractional years.  There is no reduction for commencement before age 62 for Participants deemed classified as a Level III Participant at the Effective Retirement Date.  There is no increase for commencement after age 62 for any Participant.  There is an actuarial reduction to the benefit of a Participant that is deemed classified as a Level IV or V Participant at the Effective Retirement Date.  The actuarial reduction shall be made on the same basis as in the Pension Plan for the early commencement of a benefit in Articles 5, 6, and 7, as applicable.  The appropriate actuarial reduction shall be determined as of the Effective Retirement Date.  The normal form of the benefit so computed under this paragraph (c) is a single lump sum payment. 
(d)    Changes in Status.  
		
	(1)
	Subject to the applicable provisions of paragraph (b) above, a Participant that earned a benefit under Section 5.02 and that also earned a benefit under Section 5.01 shall receive the greater of the two benefits produced.  

		
	(2)
	If a Participant that earns a benefit hereunder is not considered to be a Level I, II, III, IV or V Participant on the earlier of the Participant’s Effective Retirement Date or Termination of Employment, then the Service after such Participant ceased to be considered a Level I, II, III, IV or V Participant shall be disregarded for purposes of computing the benefit payable under the Plan.  In that event, the only Service that shall be counted for purposes of computing the benefit payable under the Plan shall be the Service the Participant earned while considered to be a Level I, II, III, IV or V Participant.  Notwithstanding anything in the foregoing to the contrary, such a Participant shall be credited with a minimum of five years of Service, so long as such Participant has at least five years of Continuous Service.  

5.03    Benefits Payable for Less Than 12 Months
Annual Retirement Income benefits that would be payable under Sections 5.01 and 5.02 for a period of less than 12 months if such benefits were payable as an annuity due to a Participant’s attainment of 

age 62 or death will be computed as if payable on a pro-rata basis, with months taken as a fraction of a year.

5.04    Payment Options
(a)    Election
Subject to applicable transition rules under guidance issued by the Treasury under section 409A of the Code, Participants will have 30 days following the earlier of January 1, 2005 or the date they are first eligible for the Plan to elect a form of distribution from among those available under Section 5.04(b).  Any subsequent change to that election shall be subject to the provisions of this paragraph (a), sub-parts (1), (2) and (3), as applicable.  In all other events, a Participant’ election is irrevocable.  Notwithstanding anything in the foregoing to the contrary, any Participant who elects to change his or her election must meet the following requirements, as applicable -
		
	(1)
	The election may not take effect until at least 12 months after it is made; 

		
	(2)
	If the distribution relates to a Termination of Employment, the first payment that would be made pursuant to the election would be at least five years after the amount otherwise would have been distributed but for this election, except in the event of the Participant’s death; and

		
	(3)
	The election must be made at least 12 months before the first scheduled payment that would have been payable at a specified time or pursuant to a fixed schedule.

A Participant may not accelerate the time or schedule of any payment under the Plan, except as provided in guidance from the Treasury under Internal Revenue Code section 409A.
(b)    Optional Forms of Payment
		
	(1)
	Lump Sum Option  All benefits provided by the Plan shall be payable in a single lump sum payment, computed under the applicable provisions of Article V.  A Participant’s benefit is payable as a lump sum on the Effective Retirement Date (or as soon thereafter as reasonably possible), in a manner pursuant to a Participant’s election under Section 5.04(a) under an option identified in one of the following sub-paragraphs of this Section 5.04(b).  A lump sum benefit payable under the Plan to a Transition Participant shall be computed on the basis of the actuarially equivalent present value of such Transition Participant’s benefit under Article V based upon such actuarial assumptions as determined by the Committee.  

		
	(2)
	Default Lump Sum Deferral Option  If the Participant fails to make an election under Section 5.04(a) then the Participant’s benefit shall be transferred upon the Participant’s Effective Retirement Date (or as soon thereafter as possible) to the Ashland Inc. Deferred Compensation for Employees (2005), or its successor, and held pursuant to the terms of such plan and shall thereafter be distributed in three annual payments beginning with the January 1 after the account is established in the Ashland Inc. Deferred Compensation for Employees (2005) (33 1/3% in the first year, 50% of the remaining amount in the second year and the remaining amount in 

the third year).  Notwithstanding the foregoing, if a Participant fails to make an election under this Plan, but does make an effective election for the distribution of a benefit under the Ashland Inc. Nonqualified Excess Benefit Pension Plan, then the distribution of the benefit hereunder shall be made in the same manner as the Participant had elected under the said plan.  In all events, a Participant who is a Specified Employee shall have the transfer or other distribution of his or her benefit which is made on account of a Termination of Employment commence on a date that is not earlier than six months after his or her Termination of Employment.
		
	(3)
	Lump Sum Payment Option  A Participant may elect to have his or her benefit paid as a single lump sum upon reaching his or her Effective Retirement Date.  The benefit pursuant to such an election shall be paid as soon thereafter as possible.  In all events, a Participant who is a Specified Employee shall have the distribution of his or her benefit which is made on account of a Termination of Employment commence on a date that is not earlier than six months after his or her Termination of Employment. 

		
	(4)
	Elective Lump Sum Deferral Option  A Participant may elect to have his or her benefit transferred to the Ashland Inc. Deferred Compensation Plan for Employees (2005), or any successor thereto, as a single lump sum upon reaching his or her Effective Retirement Date, and held pursuant to the terms of such plan and thereafter distributed as provided thereunder.  The benefit pursuant to such an election shall be transferred as soon as possible after the Effective Retirement Date.  In all events, a Participant who is a Specified Employee shall have the transfer of his or her benefit which is made on account of a Termination of Employment commence on a date that is not earlier than six months after his or her Termination of Employment.  

		
	(5)
	Time of Distribution or Transfer  Subject to the required delay of a distribution or transfer of a Plan benefit for a Participant who is a Specified Employee, the distribution or transfer of a benefit in the foregoing sub-paragraphs of this Section 5.04(b) shall be paid by the later of (i) the end of the calendar year in which occurs the Participant’s Effective Retirement Date or (ii) the 15th day of the third calendar month following the Participant’s Effective Retirement Date.   

5.05.    Distribution Exceptions
Notwithstanding anything in the Plan to the contrary, the following shall apply to the distribution of benefits under the Plan:
		
	(1)
	Distribution shall be made pursuant to a domestic relations order as described in Section 7.04;

		
	(2)
	Distribution of a benefit shall be made in a single lump sum payment as soon as possible after a Participants Termination of Employment if the distribution, when added to the amount that would be payable from the Ashland Inc. Nonqualified Excess Benefit Pension Plan will not exceed the adjusted Code section 402(g) limit; and

		
	(3)
	Distribution may be made in the discretion of Ashland for any other permitted purpose under Treas. Reg. section 1.409A-3(j)(4)(ii)-(xiv).  

5.06.    Survivor Benefits  
For deaths occurring after the approval of this restatement, if a Participant with a vested benefit dies before his or her Effective Retirement Date, the benefit that would have been paid to the Participant had the Participant survived to his or her Effective Retirement Date shall be paid to the beneficiary designated by the Participant as elected by the Participant from those options made available by Ashland; provided, however, that the benefit must be completely distributed by the end of the fifth calendar year following the calendar year in which the Participant died.  In the absence of an election, the benefit shall be paid in January of the calendar year following the calendar year in which the Participant died.  If the Participant dies before he or she attained age 55 and before the sum of his or her age and years of Continuous Service equaled 80, the benefit payable hereunder shall be actuarially adjusted using the assumptions under the Pension Plan that applied at the time of the Participant’s death. 
5.07    Participation in Other Benefits
After the Effective Retirement Date, a Participant may continue to participate in the benefits offered by Ashland to former Employee’s and retiree’s similarly situated to the Participant.  Ashland reserves all rights to change those benefits at any time, including the right to terminate them.  Except as otherwise expressly provided in this Plan, a Participant’s active participation in all employee benefit programs maintained by Ashland derived from his or her employment status with Ashland shall be discontinued.
ARTICLE V-A.    LIMITED TEMPORARY ENHANCED RETIREMENT PROGRAM BENEFIT.  
5.01A    GENERAL.
For Participants whose Effective Retirement Date is March 1, 2007 (except as may otherwise be provided in Section 5.04A below), the retirement benefits payable under Article V shall be computed as modified under Section 5.03A below, provided that such Participants satisfy all of the requirements specified in Section 5.02A.  For purposes of this Article V-A, the limited enhanced retirement program benefit described herein is referred to as the Voluntary Severance Offer (VSO).
5.02A     ELIGIBILITY.
Subject to Section 3.01, the Employees who are eligible to have their benefits computed with the modifications described in Section 5.03A are those who would have been eligible for the pension benefit described in section 18.7B of the Pension Plan, but who are not so eligible because they are in pay classification band 21 or higher.  
5.03A    ENHANCED BENEFIT.
Each Participant described in Section 5.02A(a) who elects an Effective Retirement Date of March 1, 2007 (or at the Delayed Effective Retirement Date under Section 5.04A), hereinafter called "Electing Participant", shall have his or her benefit computed under Section 5.01 or Section 5.02 (whichever is applicable) by adding 2 years to his or her Age and 2 years to his or her Service at the Effective Retirement Date (or at the Delayed Effective Retirement Date under Section 5.04A).  These additions to Age and Service shall apply for purposes of computing the single life annuity amount with regard to the Electing Participant; for purposes of any actuarial reduction for early commencement; and for purposes of applying the Section 2.08 definition of Effective Retirement Date to this Article V-A.  Notwithstanding anything to the contrary contained herein, when converting an Electing Participant's benefit to the lump sum payment option, the Electing Participant's actual age shall be used without reference to the additional 2 years. 

5.04A     DELAYED EFFECTIVE RETIREMENT DATE.
Ashland reserves the right to require an Electing Participant or a Special Participant (as defined in Section 5.05A) to remain employed and delay his or her Effective Retirement Date (or other termination date) until, at the latest, to November 30, 2007 (hereinafter referred to as the "Delayed Effective Retirement Date").
(a)     If an Electing Participant's or Special Participant’s employment is terminated on or before his or her Delayed Effective Retirement Date by reason of discharge for cause, such Electing Participant or Special Participant shall not be entitled to any benefit computed under this Plan.
(b)     If an Electing Participant or Special Participant terminates employment by reason of death on or before his or her Delayed Effective Retirement Date, but after February 28, 2007, the benefit shall be determined as if he or she had the Delayed Effective Retirement Date on the day before death with any election of an optional form of benefit made by such Electing Participant or Special Participant given effect.
(c)     An Electing Participant or Special Participant who terminates employment on his or her Delayed Effective Retirement Date (except by reason of discharge for cause or death), shall have the benefit determined as provided under Section 5.03A by applying the rules contained therein to such Electing Participant or Special Participant at such Electing Participant's or Special Participant’s Delayed Effective Retirement Date; provided, however, that such Electing Participant's or Special Participant’s benefit, as so determined and payable effective as of the first of the calendar month immediately following the Delayed Effective Retirement Date, shall not be less than the amount of the benefit that would have been payable to such Electing Participant or Special Participant as of March 1, 2007.
5.05A    LIMITED TEMPORARY ENHANCED UNFUNDED PENSION              BENEFIT
(a)    Persons described in paragraph (b) of this Section 5.05A who constitute a select group of management or highly paid employees shall be entitled to the applicable benefit described in paragraph (c) of this Section 5.05A.  Such benefit shall constitute an unfunded promise to be paid from the general assets of Ashland Inc., and the payment of such benefit shall have no priority with respect to the claims of unsecured general creditors of Ashland Inc.
(b)    The benefit described in paragraph (c) of this Section 5.05A shall be paid with respect to those persons who would be entitled to the enhanced benefit payment under section 18.7B of the Pension Plan but for the exception contained in section 18.7B (b)(2)(i) of such Pension Plan (relating to highly compensated employees and employees in pay code band 21 and above).  For purposes of the benefit described in paragraph (c) of this Section 5.05A, these persons shall be referred to as Special Participants.  Such designation includes individuals who are otherwise Participants in this Plan and individuals who would not otherwise have a benefit paid through this Plan.  
(c)    The determination of the benefit payable under this paragraph (c) is different for Special Participants who, without the addition to age and service described in section 18.7B of the said Pension Plan and as of February 28, 2007, either (i) are age 55 or older; or (ii) have age and Continuous Service under the said Pension Plan equaling at least 80 (referred to as retirement eligible Special Participants) and Special 

Participants who require the addition to age and service described in section 18.7B of the said Pension Plan to fall within either clause (i) or (ii) as of February 28, 2007 (referred to as not retirement eligible Special Participants).
(1)  Retirement Eligible Special Participants.  For a retirement eligible Special Participant, the benefit payable under this paragraph (c) is calculated as the difference between two amounts calculated under the said Pension Plan.  This calculation is made as of the later of February 28, 2007 or the Delayed Termination Date (as defined in said Pension Plan).  This date is referred to as the Calculation Date.  The difference is between (i) the amount payable under the said Pension Plan on the Calculation Date adding the additional age and service pursuant to section 18.7B of said Pension Plan as though the retirement eligible Special Participant were eligible to receive the additional benefit described in said section 18.7B; and (ii) the amount payable under the said Pension Plan on the Calculation Date based on the retirement eligible Special Participant’s actual age and service.  This difference (which cannot be a negative number) is converted to an actuarially equivalent lump sum using the actuarial assumptions in the said Pension Plan, as determined by Ashland Inc., based on the actual age of the retirement eligible Special Participant.
(2)  Not Retirement Eligible Special Participants.  By definition, a not retirement eligible Special Participant cannot begin payments under the said Pension Plan because the not retirement eligible Special Participant is not eligible to commence benefits thereunder based on his or her actual age and service on the first of the month after the relevant Calculation Date.  To facilitate the commencement of a benefit equivalent to what could have been paid under the said Pension Plan had the not retirement eligible Special Participant actually been retirement eligible, such Special Participant will be offered an election to commence an equivalent benefit through this Plan, determined based on rules that would have applied under the said Pension Plan.  For this purpose, the not retirement eligible Special Participant’s actual age and service will be used.  Any such payments will only last through the end of the calendar month during which such Special Participant attains age 55.  Such Special Participant will then be able to make a separate election under the rules of the said Pension Plan for the benefit to commence payment from the said Pension Plan.  The not retirement eligible Special Participant is also entitled to a lump sum payment computed as the difference between (i) the amount payable under the said Pension Plan on the Calculation Date adding the additional age and service pursuant to section 18.7B of said Pension Plan as though the not retirement eligible Special Participant were eligible to receive the additional benefit described in said section 18.7B; and (ii) the amount payable under this Plan (as determined hereinabove) on the Calculation Date based on the not retirement eligible Special Participant’s actual age and service.  This difference (which cannot be a negative number) is converted to an actuarially equivalent lump sum using the actuarial assumptions in the said Pension Plan, as determined by Ashland Inc., but assuming that the not retirement eligible Special Participant had age and Continuous Service under the said Pension Plan that equaled 80 as of the Calculation Date and using such Special Participant’s actual age.
(3)  Payment of Lump Sum.  The lump sum amounts described in the preceding sub-paragraphs (1) and (2) are paid as soon as administratively feasible in January 2008, with certain exceptions that are described below.  Before the lump sum is paid, it will earn interest at the same rate and under the same terms that apply to the Retirement Growth Account benefit under the said Pension Plan.  The lump sum of a Special Participant who is also a Participant in this Plan shall be paid pursuant to the valid election such Participant has made for the rest of his or her benefit that is payable hereunder.  Additionally, payments shall comply with the provisions of Internal Revenue Code section 409A.  For purposes of computing any benefit under this Plan or the Ashland 

Inc. Nonqualified Excess Benefit Pension Plan that is coordinated with the said Pension Plan benefit, the lump sum payable under this paragraph (c) shall be considered to be part of the benefit payable under the said Pension Plan.  If a Special Participant dies before January 1, 2008, the death benefit that may be payable with respect to the benefit described in this Section 5.05A shall be based upon the Appendix A that is attached hereto and made a part of hereof, as interpreted and applied by Ashland Inc.
(d)   Elections by Special Participants for the benefit described in paragraph (c) of this Section 5.05A shall be made in such form and at such time as Ashland Inc., or its delegate, shall prescribe and such elections shall be subject to such rules and procedures, including the prior execution of a general release, as may be from time to time prescribed by Ashland Inc.  

5.06A     Administration.
Ashland Inc. has plenary power and authority to interpret, administer and apply all provisions of the Plan relating to or associated with the VSO.  The provisions of this Article V-A were effective February 28, 2007.

ARTICLE VI.    CHANGE IN CONTROL.
Notwithstanding any provision of this Plan to the contrary, in the event of a Change in Control, an Employee who is deemed to be a Level I, II, III, IV or V Participant shall, in accordance with Section 3.03, automatically be deemed approved for participation under this Plan and shall be completely vested in his or her benefit.  Consistent with the applicable terms of Sections 5.01 and 5.02, such a Participant may, in his or her sole discretion, elect to retire prior to Age 62.  In addition, Ashland (or its successor after the Change in Control) shall reimburse an Employee for legal fees, fees of other experts and expenses incurred by such Employee if he or she is required to, and is successful in, seeking to obtain or enforce any right to payment pursuant to the Plan.  In the event that it shall be determined that such Employee is properly entitled to the payment of benefits hereunder, such Employee shall also be entitled to interest thereon payable in an amount equivalent to the prime rate of interest (quoted by Citibank, N.A. as its prime commercial lending rate on the latest date practicable prior to the date of the actual commencement of payments) from the date such payment(s) should have been made to and including the date it is made.  Notwithstanding any provision of this Plan to the contrary, the provisions of this Plan or any other plan of Ashland Inc. having a material impact on the benefits payable under this Plan may not be amended after a Change in Control occurs without the written consent of a majority of the Board who were directors prior to the Change in Control.
ARTICLE VII.    MISCELLANEOUS.
		
	7.01
	The obligations of Ashland hereunder constitute merely the promise of Ashland to make the payments provided for in this Plan.  No employee, his or her spouse or the estate of either of them shall have, by reason of this Plan, any right, title or interest of any kind in or to any property of Ashland.  To the extent any Participant has a right to receive payments from Ashland under this Plan, such right shall be no greater than the right of any unsecured general creditor of Ashland.

		
	7.02
	Full power and authority to construe, interpret and administer this Plan shall be vested in the Board or its delegate.  This includes, without limitation, the ability to make factual determinations, construe and interpret provisions of the Plan, reconcile any inconsistencies between provisions in the Plan or between 

provisions of the Plan and any other statement concerning the Plan, whether oral or written, supply any omissions to the Plan or any document associated with the Plan, and to correct any defect in the Plan or in any document associated with the Plan.  Decisions of the Board or its delegate shall be final, conclusive and binding upon all parties, provided, however, that no such decision may adversely affect the rights of any Participant who has been approved for participation in the Plan under the terms of Section 3.03 and whose benefit is determined under the terms of Section 5.01(d) or Section 5.02(b).
		
	7.03
	This Plan shall be binding upon Ashland and any successors to the business of Ashland and shall inure to the benefit of the Participants and their beneficiaries, if applicable.  Except as otherwise provided in Article VI, the Board or its delegate may, at any time, amend this Plan, retroactively or otherwise, but no such amendment may adversely affect the rights of any Participant who has been approved for participation in the Plan except to the extent that such action is required by law.

		
	7.04
	Except as otherwise provided in Section 5.04 and in connection with a division of property under a domestic relations proceeding under state law, no right or interest of the Participants under this Plan shall be subject to involuntary alienation, assignment or transfer of any kind.  A Participant may voluntarily assign the Participant’s rights under the Plan.  Ashland, the Board, the Committee and any of their delegates shall not review, confirm, guarantee or otherwise comment on the legal validity of any voluntary assignment.  Ashland and its delegates may review, provide recommendations and approve submitted domestic relations orders using procedures similar to those that apply to qualified domestic relations orders under the qualified pension plans sponsored by Ashland.  A domestic relations order intended to assign a benefit hereunder to a former spouse of a Participant must be delivered to the Company.  The Company will review the order to determine if it is qualified.  Upon notification by the Company that the order is qualified, the spouse will be able to elect a distribution of the assigned benefit by the end of the fifth calendar year following the calendar year during which the Company notifies the former spouse that the order is qualified.  In all events, the entire assigned benefit must be distributed by the end of the fifth calendar year following the calendar year during which the Company notifies the former spouse that the order is qualified.  Notwithstanding anything in the Plan to the contrary, if an assigned benefit is equal to or less than the adjusted Code section 402(g) limit it shall be distributed to the former spouse as soon as administratively possible.  The amount of assigned benefits shall be calculated in a manner consistent with the table summary attached hereto and incorporated herein as Appendix B.  The Company may prescribe procedures that are consistent with this Section 7.04 and applicable law to implement benefit assignments pursuant to qualified orders.

7.05    This Plan shall be governed for all purposes by the laws of the Commonwealth of Kentucky.
		
	7.06
	If any term or provision of this Plan is determined by a court or other appropriate authority to be invalid, void, or unenforceable for any reason, the remainder of the terms and provisions of this Plan shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

		
	7.07
	(a)    Initial Claim - Notice of Denial.  If any claim for benefits (within the meaning of section 503 of ERISA) is denied in whole or in part, Ashland (which shall include Ashland or its delegate throughout this Section 7.07) will provide written notification of the denied claim to the Participant or beneficiary, as applicable, (hereinafter referred to as the claimant) in a reasonable period, but not later than 90 days after the claim is received.  The 90-day period can be extended under special circumstances.  If special circumstances apply, the claimant will be notified before the end of the 90-day period after the claim 

was received. The notice will identify the special circumstances.  It will also specify the expected date of the decision.  When special circumstances apply, the claimant must be notified of the decision not later than 180 days after the claim is received.

The written decision will include:

(i)The reasons for the denial.
(ii)Reference to the Plan provisions on which the denial is based.  The reference need not be to page numbers or to section headings or titles.  The reference only needs to sufficiently describe the provisions so that the provisions could be identified based on that description.
(iii)A description of additional materials or information needed to process the claim.  It will also explain why those materials or information are needed.
(iv)A description of the procedure to appeal the denial, including the time limits applicable to those procedures.  It will also state that the claimant may file a civil action under section 502 of ERISA (ERISA - §29 U.S.C. 1132).  The claimant must complete the Plan’s appeal procedure before filing a civil action in court.  

If the claimant does not receive notice of the decision on the claim within the prescribed time periods, the claim is deemed denied.  In that event the claimant may proceed with the appeal procedure described below.
		
	(b)
	Appeal of Denied Claim.  The claimant may file a written appeal of a denied claim with Ashland in such manner as determined from time to time.  Ashland is the named fiduciary under ERISA for purposes of the appeal of the denied claim.  Ashland  may delegate its authority to rule on appeals of denied claims and any person or persons or entity to which such authority is delegated may re-delegate that authority.  The appeal must be sent at least 60 days after the claimant received the denial of the initial claim.  If the appeal is not sent within this time, then the right to appeal the denial is waived. 

The claimant may submit materials and other information relating to the claim.  Ashland will appropriately consider these materials and other information, even if they were not part of the initial claim submission.  The claimant will also be given reasonable and free access to or copies of documents, records and other information relevant to the claim.

Written notification of the decision on the appeal will be delivered to the claimant in a reasonable period, but not later than 60 days after the appeal is received.  The 60-day period can be extended under special circumstances.  If special circumstances apply, the claimant will be notified before the end of the 60-day period after the appeal was received. The notice will identify the special circumstances.  It will also specify the expected date of the decision.  When special circumstances apply, the claimant must be notified of the decision not later than 120 days after the appeal is received.

Special rules apply if Ashland designates a committee as the appropriate named fiduciary for purposes of deciding appeals of denied claims.  For the special rules to apply, the committee must meet regularly on at least a quarterly basis.  

When the special rules for committee meetings apply the decision on the appeal must be made not later than the date of the committee meeting immediately following the receipt of the appeal.  If the appeal is received within 30 days of the next following meeting, then the decision must not be made later than the date of the second committee meeting following the receipt of the appeal.  

The period for making the decision on the appeal can be extended under special circumstances.  If special circumstances apply, the claimant will be notified by the committee or its delegate before the end of the otherwise applicable period within which to make a decision.  The notice will identify the special circumstances.  It will also specify the expected date of the decision.  When special circumstances apply, the claimant must be notified of the decision not later than the date of the third committee meeting after the appeal is received.  

In any event, the claimant will be provided written notice of the decision within a reasonable period after the meeting at which the decision is made.  The notification will not be later than 5 days after the meeting at which the decision is made.

Whether the decision on the appeal is made by a committee or not, a denial of the appeal will include:

		
	(i)
	The reasons for the denial.

		
	(ii)
	Reference to the Plan provisions on which the denial is based.  The reference need not be to page numbers or to section headings or titles.  The reference only needs to sufficiently describe the provisions so that the provisions could be identified based on that description.

		
	(iii)
	A statement that the claimant may receive free of charge reasonable access to or copies of documents, records and other information relevant to the claim.

		
	(iv)
	A description of any voluntary procedure for an additional appeal, if there is such a procedure.  It will also state that the claimant may file a civil action under section 502 of ERISA (ERISA - §29 U.S.C. 1132).  

If the claimant does not receive notice of the decision on the appeal within the prescribed time periods, the appeal is deemed denied.  In that event the claimant may file a civil action in court.  The decision regarding a denied claim is final and binding on all those who are affected by the decision.  No additional appeals regarding that claim are allowed.  

IN WITNESS WHEREOF, this amendment and restatement of the Plan is executed this _________ day of _____________________, 2010.

	
				
	ATTEST:
	 
	 
	ASHLAND INC.

	 
	 
	 
	 

	 
	 
	By:
	 

	Secretary
	 
	 
	Vice President Human Resources, and                        

	 
	 
	 
	               Communications

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

APPENDIX A

See Section 5.05A(c)(3).	
		
	Form of Benefit Payment under Pension Plan
	Manner of Paying the Enhanced Pension through the SERP

	Straight Life Annuity
	The sum of the difference between the monthly payments under the elected benefit option using the additional two years age/service and the monthly payments under the elected benefit option not using the additional two years age/service from the Calculation Date through the month of death in 2007 is paid in a lump sum to the employee’s estate.  That amount will earn the applicable amount of interest until paid.  Payment will not occur before 2008.  

	Life 10-Year Term Certain Annuity
	The sum of the difference between the monthly payments under the elected benefit option using the additional two years age/service and the monthly payments under the elected benefit option not using the additional two years age/service from the Calculation Date through the month of death in 2007.  The payment will be to the beneficiary as would be determined under the Ashland Pension Plan.  That amount will earn the applicable amount of interest until paid.  Payment will not occur before 2008.  

	Survivor Annuity (including qualified joint and survivor annuity)
	The lump sum that would have been paid had the employee survived is paid to the designated survivor annuitant in January 2008.  That amount will earn the applicable amount of interest until paid.  

	Survivor Annuity (including qualified joint and survivor annuity) assuming neither survives to January 2008
	The sum of the difference between the monthly payments under the elected benefit option using the additional two years age/service and the monthly payments under the elected benefit option not using the additional two years age/service from the Calculation Date through the month of death in 2007.  The payment will be to the estate of the last to die between the employee and the designated survivor annuitant.  If the deaths were simultaneous or the order of death was otherwise unable to be determined, then the payment would be to the employee’s estate.  That amount will earn the applicable amount of interest until paid.  Payment will not occur before 2008.  

APPENDIX B

Actuarial Assumptions for SERP/Excess Plan for Domestic Relations Orders*

	
				
	Employee Base Salary Pay Band
	Employee Age
	Former Spouse’s Age
	Actuarial Assumptions

	≥ 23**
	≥ Effective Retirement Date*** if had terminated on date the order is approved
	≥ Employee’s age at Effective Retirement Date*** if employee had terminated on date the order is approved
	No actuarial adjustment

	≥ 23**
	Employee or former spouse or both < above age on date the order is approved
	Employee or former spouse or both < above age on date the order is approved
	Use Ashland Pension Plan assumptions that would apply to employee under the Pension Plan

	21, 22 (23)**
	≥ 62
	≥ 62
	No actuarial adjustment

	21, 22 (23)**
	Employee or former spouse or both < above age on date the order is approved
	Employee or former spouse or both < above age on date the order is approved
	Use Ashland Pension Plan assumptions that would apply to employee under the Pension Plan

*The Excess Plan would rarely be affected because, at least for those employees still under the traditional qualified pension plan formula, it is truly unknown whether a benefit is payable under the Excess Plan until the employee actually terminates employment.  Therefore, for an employee covered under the traditional qualified pension plan formula, the Excess Plan could only be subject to an order that is entered after the employee terminated employment.  Employees in the RGA formula have a determinable Excess Plan benefit each year because it is known each year whether they have missed contribution credits due to base compensation exceeding the Code §401(a)(17) limit.  Any actuarial adjustments to the Excess Plan benefit would use the applicable adjustments from the qualified pension plan. 

**Band 23 employees under the old formula are treated the same as bands 21 and 22 employees.

***The Effective Retirement Date is the earliest date the employee could elect to commence SERP payments if the employee had actually terminated from employment.

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