<SUBMISSION>
<ACCESSION-NUMBER>0000007694-03-000115
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>9
<PERIOD>20030630
<FILING-DATE>20030813
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ASHLAND INC
<CIK>0000007694
<ASSIGNED-SIC>5160
<IRS-NUMBER>610122250
<STATE-OF-INCORPORATION>KY
<FISCAL-YEAR-END>0930
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>001-02918
<FILM-NUMBER>03842327
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>50 E. RIVERCENTER BOULEVARD
<CITY>COVINGTON
<STATE>KY
<ZIP>41012
<PHONE>6068153333
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>50 E. RIVERCENTER BOULEVARD
<CITY>COVINGTON
<STATE>KY
<ZIP>41012
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>ASHLAND OIL INC
<DATE-CHANGED>19920703
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>ASHLAND OIL & REFINING CO
<DATE-CHANGED>19700806
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>goodq2.txt
<DESCRIPTION>FORM 10-Q 6-30-03
<TEXT>
================================================================================



                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                    FORM 10-Q



             Quarterly Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934




                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003

                          Commission file number 1-2918



                                  ASHLAND INC.
                            (a Kentucky corporation)



                              I.R.S. No. 61-0122250
                           50 E. RiverCenter Boulevard
                                  P. O. Box 391
                         Covington, Kentucky 41012-0391



                        Telephone Number: (859) 815-3333



     Indicate  by check  mark  whether  the  Registrant  (1) has  filed all
reports  required  to be filed  by  Section  13 or 15(d) of the  Securities
Exchange  Act of 1934 during the  preceding  12 months (or for such shorter
period that the Registrant was required to file such reports),  and (2) has
been subject to such filing requirements for the past 90 days. Yes[x] No

     Indicate by check mark whether the Registrant is an accelerated  filer
(as defined in Rule 12b-2 of the Act). Yes[x] No

     At July 31, 2003, there were 68,251,752 shares of Registrant's  Common
Stock  outstanding.  One  Right to  purchase  one-thousandth  of a share of
Series  A  Participating   Cumulative   Preferred  Stock  accompanies  each
outstanding share of Registrant's Common Stock.


================================================================================

<PAGE>




                       PART I - FINANCIAL INFORMATION
                       ------------------------------
<TABLE>
<CAPTION>
ITEM 1.  FINANCIAL STATEMENTS
------------------------------------------------------------------------------------------------------------------------------------

ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME

------------------------------------------------------------------------------------------------------------------------------------
                                                                                  Three months ended          Nine months ended
                                                                                       June 30                     June 30
                                                                                -----------------------    ------------------------
(In millions except per share data)                                                  2003         2002           2003         2002
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>          <C>           <C>           <C>
REVENUES
      Sales and operating revenues                                              $   2,006    $   1,997     $    5,388    $   5,315
      Equity income                                                                   104           80            169          141
      Other income                                                                     15            7             43           35
                                                                                ----------   ----------    -----------   ----------
                                                                                    2,125        2,084          5,600        5,491
COSTS AND EXPENSES
      Cost of sales and operating expenses                                          1,648        1,602          4,430        4,285
      Selling, general and administrative expenses                                    290          298            870          828
      Depreciation, depletion and amortization                                         49           52            153          153
                                                                                ----------   ----------    -----------   ----------
                                                                                    1,987        1,952          5,453        5,266
                                                                                ----------   ----------    -----------   ----------
OPERATING INCOME                                                                      138          132            147          225
      Net interest and other financial costs                                          (31)         (33)           (97)        (103)
                                                                                ----------   ----------    -----------   ----------
INCOME FROM CONTINUING OPERATIONS
      BEFORE INCOME TAXES                                                             107           99             50          122
      Income taxes                                                                    (36)         (38)           (17)         (47)
                                                                                ----------   ----------    -----------   ----------
INCOME FROM CONTINUING OPERATIONS                                                      71           61             33           75
      Results from discontinued operations (net of income taxes) - Note B              (1)           4            (94)           7
                                                                                ----------   ----------    -----------   ----------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT
      OF ACCOUNTING CHANGE                                                             70           65            (61)          82
      Cumulative effect of accounting change (net of income taxes) - Note C             -            -              -          (12)
                                                                                ----------   ----------    -----------   ----------
NET INCOME (LOSS)                                                               $      70    $      65     $      (61)   $      70
                                                                                ==========   ==========    ===========   ==========

BASIC EARNINGS (LOSS) PER SHARE - Note A
      Income from continuing operations                                         $    1.04    $     .88     $      .48    $    1.08
      Results from discontinued operations                                           (.02)         .06          (1.38)         .10
      Cumulative effect of accounting change                                            -            -              -         (.16)
                                                                                ----------   ----------    -----------   ----------
      Net income (loss)                                                         $    1.02    $     .94     $     (.90)   $    1.02
                                                                                ==========   ==========    ===========   ==========

DILUTED EARNINGS (LOSS) PER SHARE - Note A
      Income from continuing operations                                         $    1.03    $     .87     $      .48    $    1.06
      Results from discontinued operations                                           (.02)         .06          (1.37)         .10
      Cumulative effect of accounting change                                            -            -              -         (.16)
                                                                                ----------   ----------    -----------   ----------
      Net income (loss)                                                         $    1.01    $     .93     $     (.89)   $    1.00
                                                                                ==========   ==========    ===========   ==========

DIVIDENDS PAID PER COMMON SHARE                                                 $    .275    $    .275     $     .825    $    .825

</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.



                                       2

<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------

ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

------------------------------------------------------------------------------------------------------------------------------------
                                                                                      June 30       September 30           June 30
(In millions)                                                                            2003               2002              2002
------------------------------------------------------------------------------------------------------------------------------------

                                       ASSETS
                                       ------
<S>                                                                             <C>                <C>               <C>
CURRENT ASSETS
      Cash and cash equivalents                                                 $         112      $          90     $         101
      Accounts receivable                                                               1,085              1,090             1,089
      Allowance for doubtful accounts                                                     (40)               (34)              (36)
      Inventories - Note A                                                                512                456               469
      Deferred income taxes                                                                98                119               130
      Current assets of discontinued operations held for sale                             198                211                60
      Other current assets                                                                186                139               128
                                                                                --------------     --------------    --------------
                                                                                        2,151              2,071             1,941
INVESTMENTS AND OTHER ASSETS
      Investment in Marathon Ashland Petroleum LLC (MAP)                                2,401              2,350             2,406
      Goodwill                                                                            519                510               507
      Asbestos insurance receivable (noncurrent portion)                                  398                171               168
      Noncurrent assets of discontinued operations held for sale                            -                  -               146
      Other noncurrent assets                                                             345                329               380
                                                                                --------------     --------------    --------------
                                                                                        3,663              3,360             3,607
PROPERTY, PLANT AND EQUIPMENT
      Cost                                                                              2,949              2,920             2,912
      Accumulated depreciation, depletion and amortization                             (1,725)            (1,629)           (1,603)
                                                                                --------------     --------------    --------------
                                                                                        1,224              1,291             1,309
                                                                                --------------     --------------    --------------

                                                                                $       7,038      $       6,722     $       6,857
                                                                                ==============     ==============    ==============

                        LIABILITIES AND STOCKHOLDERS' EQUITY
                        ------------------------------------

CURRENT LIABILITIES
      Debt due within one year                                                  $         296      $         201     $         302
      Trade and other payables                                                          1,235              1,256             1,225
      Current liabilities of discontinued operations held for sale                         28                 39                23
      Income taxes                                                                         16                 24                53
                                                                                --------------     --------------    --------------
                                                                                        1,575              1,520             1,603
NONCURRENT LIABILITIES
      Long-term debt (less current portion)                                             1,564              1,606             1,600
      Employee benefit obligations                                                        493                509               400
      Deferred income taxes                                                               201                246               271
      Reserves of captive insurance companies                                             184                166               182
      Asbestos litigation reserve (noncurrent portion)                                    535                152               148
      Noncurrent liabilities of discontinued operations held for sale                       -                  -                13
      Other long-term liabilities and deferred credits                                    346                350               378
      Commitments and contingencies - Notes E and F
                                                                                --------------     --------------    --------------
                                                                                        3,323              3,029             2,992

COMMON STOCKHOLDERS' EQUITY                                                             2,140              2,173             2,262
                                                                                --------------     --------------    --------------
                                                                                $       7,038      $       6,722     $       6,857
                                                                                ==============     ==============    ==============

</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.


                                       3

<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------

ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF CONSOLIDATED COMMON STOCKHOLDERS' EQUITY

------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Accumulated
                                                                                                          other
                                                  Common           Paid-in          Retained      comprehensive
(In millions)                                      stock           capital          earnings               loss              Total
------------------------------------------------------------------------------------------------------------------------------------

<S>                                        <C>               <C>               <C>                <C>                <C>
BALANCE AT OCTOBER 1, 2001                 $          69     $         363     $       1,920      $        (126)     $       2,226
      Total comprehensive income (1)                                                      70                 18                 88
      Cash dividends                                                                     (57)                                  (57)
      Issued common stock under
        stock incentive plans                                           16                                                      16
      Repurchase of common stock                                       (11)                                                    (11)
                                           --------------    --------------    --------------     --------------     --------------
BALANCE AT JUNE 30, 2002                   $          69     $         368     $       1,933      $        (108)     $       2,262
                                           ==============    ==============    ==============     ==============     ==============



BALANCE AT OCTOBER 1, 2002                 $          68     $         338     $       1,961      $        (194)     $       2,173
      Total comprehensive income (1)                                                     (61)                76                 15
      Cash dividends                                                                     (56)                                  (56)
      Issued common stock under
        stock incentive plans                                            8                                                       8
                                           --------------    --------------    --------------     --------------     --------------
BALANCE AT JUNE 30, 2003                   $          68     $         346     $       1,844      $        (118)     $       2,140
                                           ==============    ==============    ==============     ==============     ==============


------------------------------------------------------------------------------------------------------------------------------------
(1)   Reconciliations of net income (loss) to total comprehensive income follow.
</TABLE>

<TABLE>
<CAPTION>
                                                                     Three months ended                     Nine months ended
                                                                           June 30                              June 30
                                                             --------------------------------     ----------------------------------
      (In millions)                                                   2003              2002               2003               2002
      ------------------------------------------------------------------------------------------------------------------------------

      <S>                                                    <C>               <C>                <C>                <C>
      Net income (loss)                                      $          70     $          65      $         (61)     $          70
      Minimum pension liability adjustment                               -                 -                 19                  -
          Related tax expense                                            -                 -                 (7)                 -
      Unrealized translation gains                                      32                26                 64                 17
          Related tax benefit (expense)                                  -                (2)                 -                  1
                                                             --------------    --------------     --------------     --------------
      Total comprehensive income                             $         102     $          89      $          15      $          88
                                                             ==============    ==============     ==============     ==============




------------------------------------------------------------------------------------------------------------------------------------
At June 30, 2003, the accumulated other  comprehensive loss of $118 million
(after tax) was comprised of net unrealized translation gains of $1 million
and a minimum pension liability of $119 million.

</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.



                                       4

<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------

ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS

------------------------------------------------------------------------------------------------------------------------------------
                                                                                                               Nine months ended
                                                                                                                     June 30
                                                                                                          --------------------------
(In millions)                                                                                                   2003         2002
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                       <C>           <C>
CASH FLOWS FROM OPERATIONS
      Income from continuing operations                                                                   $       33    $      75
      Expense (income) not affecting cash
          Depreciation, depletion and amortization                                                               153          153
          Deferred income taxes                                                                                   43         (104)
          Equity income from affiliates                                                                         (169)        (141)
          Distributions from equity affiliates                                                                   114          120
          Other items                                                                                             (1)           -
      Change in operating assets and liabilities (1)                                                             (62)         (96)
                                                                                                          -----------   ----------
                                                                                                                 111            7
CASH FLOWS FROM FINANCING
      Proceeds from issuance of common stock                                                                       1           11
      Repayment of long-term debt                                                                               (191)         (58)
      Repurchase of common stock                                                                                   -          (11)
      Increase in short-term debt                                                                                243           85
      Dividends paid                                                                                             (56)         (57)
                                                                                                          -----------   ----------
                                                                                                                  (3)         (30)
CASH FLOWS FROM INVESTMENT
      Additions to property, plant and equipment                                                                 (84)        (130)
      Purchase of operations - net of cash acquired                                                               (5)         (12)
      Proceeds from sale of operations                                                                             5            -
      Other - net                                                                                                 (6)           1
                                                                                                          -----------   ----------
                                                                                                                 (90)        (141)
                                                                                                          -----------   ----------
CASH PROVIDED (USED) BY CONTINUING OPERATIONS                                                                     18         (164)
      Cash provided by discontinued operations                                                                     4           29
                                                                                                          -----------   ----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                                  22         (135)

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                                                                   90          236
                                                                                                          -----------   ----------

CASH AND CASH EQUIVALENTS - END OF PERIOD                                                                 $      112    $     101
                                                                                                          ===========   ==========

------------------------------------------------------------------------------------------------------------------------------------
(1)   Excludes changes resulting from operations acquired or sold.

</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                       5

<PAGE>


--------------------------------------------------------------------------------

ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE A - SIGNIFICANT ACCOUNTING POLICIES

INTERIM FINANCIAL REPORTING

The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted  accounting  principles
for interim  financial  reporting and  Securities  and Exchange  Commission
regulations.  Although such  statements  are subject to any year-end  audit
adjustments  which may be  necessary,  in the  opinion of  management,  all
adjustments  (consisting of normal recurring accruals) considered necessary
for a fair  presentation  have been included.  These  financial  statements
should be read in conjunction with Ashland's Annual Report on Form 10-K, as
amended,  for  the  fiscal  year  ended  September  30,  2002.  Results  of
operations  for the  periods  ended  June  30,  2003,  are not  necessarily
indicative  of results to be  expected  for the year ending  September  30,
2003.

INVENTORIES
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                                                        June 30      September 30           June 30
(In millions)                                                              2003              2002              2002
--------------------------------------------------------------------------------------------------------------------
<S>                                                               <C>               <C>               <C>
Chemicals and plastics                                            $         364     $         335     $         334
Construction materials                                                       82                68                82
Petroleum products                                                           75                58                55
Other products                                                               60                51                53
Supplies                                                                      5                 5                 4
Excess of replacement costs over LIFO carrying values                       (74)              (61)              (59)
                                                                  --------------    --------------    --------------
                                                                  $         512     $         456     $         469
                                                                  ==============    ==============    ==============
</TABLE>


EARNINGS PER SHARE

The  following  table  sets  forth the  computation  of basic  and  diluted
earnings per share (EPS) from continuing operations.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                                                    Three months ended         Nine months ended
                                                                          June 30                   June 30
                                                                  ------------------------   -----------------------
(In millions except per share data)                                    2003          2002         2003         2002
--------------------------------------------------------------------------------------------------------------------
<S>                                                               <C>          <C>           <C>          <C>
NUMERATOR
Numerator for basic and diluted EPS - Income from
   continuing operations                                          $      71    $       61    $      33    $      75
                                                                  ==========   ===========   ==========   ==========
DENOMINATOR
Denominator for basic EPS - Weighted average
      common shares outstanding                                          68            69           68           69
Common shares issuable upon exercise of stock options                     1             1            1            1
                                                                  ----------   -----------   ----------   ----------
Denominator for diluted EPS - Adjusted weighted
      average shares and assumed conversions                             69            70           69           70
                                                                  ==========   ===========   ==========   ==========

BASIC EPS                                                         $    1.04    $      .88    $     .48    $    1.08
DILUTED EPS                                                       $    1.03    $      .87    $     .48    $    1.06

</TABLE>
PRODUCT WARRANTIES

Because  Ashland's   products  are  generally  sold  without  any  extended
warranties,  liabilities for product warranties are insignificant. Costs of
product warranties are generally expensed as incurred.

                                       6

<PAGE>


--------------------------------------------------------------------------------

ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE A - SIGNIFICANT ACCOUNTING POLICIES (continued)

STOCK INCENTIVE PLANS

As of October 1, 2002,  Ashland began  expensing  employee stock options in
accordance with Financial  Accounting  Standards Board (FASB) Statement No.
123 (FAS 123),  "Accounting for Stock-Based  Compensation," and its related
amendments.  Ashland elected the modified  prospective  method of adoption,
under which  compensation costs recorded in the periods ended June 30, 2003
are the same as that which  would have been  recorded  had the  recognition
provisions  of FAS 123 been  applied  from  its  original  effective  date.
Results for prior periods have not been restated. Prior to October 1, 2002,
Ashland  accounted  for stock  options under  Accounting  Principles  Board
Opinion No. 25 (APB 25),  "Accounting  for Stock Issued to Employees,"  and
related Interpretations,  and no expense was recorded. In addition to stock
options,  Ashland  grants  nonvested  stock  awards  to key  employees  and
directors, which are expensed over their vesting period under either APB 25
or FAS 123. The following  table  illustrates  the effect on net income and
earnings per share if FAS 123 had been  applied in 2002 to all  outstanding
and unvested awards.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                                                        Three months ended         Nine months ended
                                                                              June 30                   June 30
                                                                      ------------------------   -----------------------
(In millions except per share data)                                        2003          2002         2003         2002
------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>          <C>           <C>          <C>
Net income (loss) as reported                                         $      70    $       65    $     (61)   $      70
Add:  Stock-based employee compensation expense included
   in reported net income, net of related tax effects                         1             -            3            -
Deduct:  Total stock-based employee compensation expense
   determined under FAS 123 for all awards, net of related
   tax effects                                                               (1)           (1)          (3)          (3)
                                                                      ----------   -----------   ----------   ----------
Pro forma net income (loss)                                           $      70    $       64    $     (61)   $      67
                                                                      ==========   ===========   ==========   ==========

Earnings (loss) per share:
      Basic - as reported                                             $    1.02    $      .94    $    (.90)   $    1.02
      Basic - pro forma                                               $    1.02    $      .92    $    (.90)   $     .97

      Diluted - as reported                                           $    1.01    $      .93    $    (.89)   $    1.00
      Diluted - pro forma                                             $    1.01    $      .92    $    (.89)   $     .96

</TABLE>
NOTE B - DISCONTINUED OPERATIONS

Ashland is subject to  liabilities  from claims  alleging  personal  injury
caused by exposure to asbestos. During the quarter ended December 31, 2002,
Ashland  increased its reserve for asbestos claims by $390 million to cover
litigation  defense and claim  settlement  costs expected to be paid during
the next ten years.  The reserve was increased by an additional $30 million
during the six months  ended June 30,  2003,  to maintain  the reserve at a
level  adequate to cover future  payments  over a rolling  10-year  period.
Because  insurance  provides  reimbursements  for most of these  costs  and
coverage-in-place  agreements  exist  with  the  insurance  companies  that
provide  substantially all of the coverage currently being accessed,  these
increases  in the  asbestos  reserve  are  expected to be offset in part by
probable  insurance  recoveries valued at $250 million.  The resulting $170
million pretax charge to income (net of deferred income tax benefits of $66
million) was reflected as an after-tax loss from discontinued operations of
$104  million in the  Statements  of  Consolidated  Income.  See Note F for
further discussion of Ashland's asbestos-related litigation.

                                       7

<PAGE>


--------------------------------------------------------------------------------

ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE B - DISCONTINUED OPERATIONS (CONTINUED)

Ashland announced on June 30, 2003, it had signed a definitive agreement to
sell the net  assets  of its  Electronic  Chemicals  business  and  certain
related   subsidiaries   to  Air  Products  in  a  transaction   valued  at
approximately  $300 million before tax.  Electronic  Chemicals is a part of
Ashland  Specialty  Chemical and provides  ultra pure  chemicals  and other
products and services to the  worldwide  semiconductor  industry.  The sale
reflects  Ashland's strategy to optimize its business mix and focus greater
attention  on  the  remaining   specialty  chemical  businesses  and  other
transportation-related  and  construction  operations  where it can achieve
strategic advantage. Ashland's after-tax proceeds will be used primarily to
reduce debt.

On July 16, 2003,  Honeywell  International  filed suit in a Delaware state
court seeking to enjoin this  transaction.  Honeywell  claims,  among other
things, that the transaction would violate the strategic alliance agreement
between Air Products and GEM Microelectronic  Materials, a joint venture of
Honeywell and Texas Ultrapure Inc. On August 11, 2003,  Teamsters Local No.
773 filed  suit in a  Pennsylvania  federal  court  seeking  to enjoin  the
transaction,   claiming  it  violates  a  collective  bargaining  agreement
concerning  the  Electronic  Chemicals  manufacturing  facility  in Easton,
Pennsylvania.  Ashland  expects the  transaction to be completed,  although
these legal  proceedings may delay the projected closing date of August 29,
2003.

Components of amounts  reflected in the income and cash flow statements and
balance  sheets  related  to  the  discontinued  operations  of  Electronic
Chemicals are presented in the following  table. All assets and liabilities
of that business are classified as current  starting with the September 30,
2002 balance sheet.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                                                     Three months ended           Nine months ended
                                                                          June 30                      June 30
                                                                   -----------------------     -------------------------
(In millions)                                                           2003         2002            2003          2002
------------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>          <C>            <C>           <C>
INCOME STATEMENT DATA
Revenues                                                           $      56    $      56      $      163    $      157
Costs and expenses                                                       (51)         (51)           (151)         (149)
                                                                   ----------   ----------     -----------   -----------
Operating income                                                           5            5              12             8
Income taxes                                                              (1)          (1)             (2)           (1)
                                                                   ----------   ----------     -----------   -----------
Results from discontinued operations                               $       4    $       4      $       10    $        7
                                                                   ==========   ==========     ===========   ===========
CASH FLOW DATA
Cash flows from operations                                                                     $       15    $       13
Cash flows from investments                                                                            (3)           (6)
                                                                                               -----------   -----------
Cash provided by discontinued operations                                                       $       12    $        7
                                                                                               ===========   ===========


                                                                                  June 30    September 30       June 30
                                                                                     2003            2002          2002
                                                                                ----------------------------------------
BALANCE SHEET DATA
Current assets of discontinued operations held for sale
      Current assets                                                            $      52      $       62    $       60
      Investments and other assets                                                     26              23             -
      Property, plant and equipment - net                                             120             126             -
Noncurrent assets of discontinued operations held for sale
      Investments and other assets                                                      -               -            23
      Property, plant and equipment - net                                               -               -           123
Current liabilities of discontinued operations held for sale
      Current liabilities                                                              15              27            23
      Noncurrent liabilities                                                           13              12             -
Noncurrent liabilities of discontinued operations held for sale                         -               -            13
</TABLE>

                                       8

<PAGE>


--------------------------------------------------------------------------------

ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE C - ACCOUNTING CHANGE - GOODWILL

As of October 1, 2001,  Ashland  adopted FASB  Statement No. 142 (FAS 142),
"Goodwill  and  Other  Intangible  Assets."  Under  FAS 142,  goodwill  and
intangible  assets with  indefinite  lives are no longer  amortized but are
subject to annual impairment tests. As a result of the adoption of FAS 142,
it was determined that the goodwill of Ashland  Distribution  was impaired.
Accordingly,  an impairment  loss of $14 million ($12 million net of income
taxes) was  recorded  as a  cumulative  effect of  accounting  change as of
October 1, 2001.

NOTE D - UNCONSOLIDATED AFFILIATES

Under  Rule  3-09  of  Regulation  S-X,  Ashland  filed  audited  financial
statements  for  Marathon  Ashland  Petroleum  LLC (MAP) for the year ended
December 31, 2002,  on a Form 10-K/A on March 20,  2003.  Unaudited  income
statement information for MAP is shown below.

MAP is  organized  as a limited  liability  company  that has elected to be
taxed as a partnership.  Therefore,  the parents are responsible for income
taxes applicable to their share of MAP's taxable income.  The net income of
MAP  reflected  below does not include any  provision for income taxes that
will be incurred by its parents.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                                                      Three months ended          Nine months ended
                                                                            June 30                    June 30
                                                                    ------------------------   -------------------------
(In millions)                                                            2003          2002          2003          2002
------------------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>          <C>           <C>           <C>
Sales and operating revenues                                        $   8,005    $    6,775    $   23,338    $   17,823
Income from operations                                                    281           217           457           398
Net income                                                                276           214           446           391
Ashland's equity income                                                   101            78           157           137

</TABLE>
NOTE E - LEASES AND OTHER COMMITMENTS

LEASES

Under various operating  leases,  Ashland has guaranteed the residual value
of the  underlying  property  that had an  unamortized  cost  totaling $144
million at June 30,  2003.  If Ashland had  cancelled  those leases at that
date, its maximum  obligations  under the residual value  guarantees  would
have  amounted  to $126  million.  Ashland  does not  expect  to incur  any
significant charge to earnings under these guarantees, $78 million of which
relates to real estate.  These lease  agreements are with  unrelated  third
party  lessors  and  Ashland  has  no  additional   contractual   or  other
commitments to any party relative to these leases.

FASB  Interpretation  No. 46 (FIN 46),  "Consolidation of Variable Interest
Entities,"  was issued in January 2003.  Beginning July 1, 2003, one of the
lessor  entities will be  consolidated  in Ashland's  financial  statements
under  FIN 46,  resulting  in an  after-tax  charge of $5  million  for the
cumulative effect of this accounting change.  Property, plant and equipment
will  increase  by $27  million  and  long-term  debt will  increase by $35
million as a result of the consolidation of the lessor entity.  The ongoing
impact of the consolidation will not have a significant effect on Ashland's
earnings.


                                       9

<PAGE>


--------------------------------------------------------------------------------

ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE E - LEASES AND OTHER COMMITMENTS (CONTINUED)

FASB Interpretation No. 45 (FIN 45), "Guarantor's Accounting and Disclosure
Requirements for Guarantees,  Including Indirect Guarantees of Indebtedness
of Others," was issued in November 2002. Upon entering new lease agreements
with residual value guarantees after December 31, 2002, Ashland is required
to record the fair value at inception  of these  guarantee  obligations  in
accordance  with  FIN 45.  At June 30,  2003,  the  recorded  value of such
obligations was not significant.

OTHER COMMITMENTS

Ashland  has  guaranteed  38% of  MAP's  payments  for  certain  crude  oil
purchases,  up to a maximum  guarantee  of $95  million.  At June 30, 2003,
Ashland's  contingent  liability  under  this  guarantee  amounted  to  $78
million.  Although  Ashland  has not made and does not  expect  to make any
payments  under  this  guarantee,  it has  recorded  the fair value of this
guarantee obligation, which is not significant.

NOTE F - LITIGATION, CLAIMS AND CONTINGENCIES

ASBESTOS-RELATED LITIGATION

Ashland is subject to  liabilities  from claims  alleging  personal  injury
caused by exposure to asbestos.  Virtually all of those liabilities  result
from indemnification  obligations undertaken in 1990 in connection with the
sale of Riley Stoker Corporation  (Riley),  a former  subsidiary.  Although
Riley was neither a producer nor a manufacturer of asbestos, its industrial
boilers  contained some  asbestos-containing  components  provided by other
companies.

A  summary  of  asbestos  claims  activity  follows.   Because  claims  are
frequently  filed and  settled  in large  groups,  the amount and timing of
settlements,   as  well  as  the  number  of  open  claims,  can  fluctuate
significantly from period to period.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                                                 Nine months ended
                                                           June 30                Years ended September 30
                                            -----------------------    ------------------------------------------------
(In thousands)                                                2003             2002              2001             2000
-----------------------------------------------------------------------------------------------------------------------
<S>                                         <C>                         <C>              <C>              <C>
Open claims - beginning of period                              160              167               118               93
New claims filed                                                58               45                52               37
Claims settled                                                  (5)             (15)               (2)              (9)
Claims dismissed                                               (17)             (37)               (1)              (3)
                                            -----------------------    -------------     -------------    -------------
Open claims - end of period                                    196              160               167              118
                                            =======================    =============     =============    =============

</TABLE>
Since  October 1, 1999,  Riley has been  dismissed as a defendant in 65% of
the  resolved  claims.  Amounts  spent  on  litigation  defense  and  claim
settlements  totaled $36 million for the nine months  ended June 30,  2003,
compared to annual  costs of $38  million in 2002,  $15 million in 2001 and
$11 million in 2000.


                                       10

<PAGE>

--------------------------------------------------------------------------------

ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE F - LITIGATION, CLAIMS AND CONTINGENCIES (CONTINUED)

During the  December  2002  quarter,  Ashland  increased  its  reserve  for
asbestos  claims by $390 million to cover the litigation  defense and claim
settlement costs expected to be paid during the next ten years. The reserve
was increased by an additional $30 million during the six months ended June
30,  2003,  to  maintain  the reserve at a level  adequate to cover  future
payments over a rolling  10-year  period.  Prior to December 31, 2002,  the
asbestos reserve was based on the estimated costs that would be incurred to
settle open claims.  The  estimates of future  asbestos  claims and related
costs  were  developed  with  the  assistance  of  Hamilton,  Rabinovitz  &
Alschuler,  Inc.  (HR&A),  nationally  recognized  experts  in that  field.
Reflecting the additional provisions, Ashland's reserve for asbestos claims
on an  undiscounted  basis  amounted  to $585  million  at June  30,  2003,
compared to $195 million at June 30, 2002.

The  methodology  used by HR&A to project  future  asbestos costs was based
largely  on  Ashland's  recent  experience,   including   claim-filing  and
settlement  rates,  disease mix, open claims,  and  litigation  defense and
claim  settlement  costs.  Ashland's  claim  experience was compared to the
results of previously  conducted  epidemiological  studies  estimating  the
number of people likely to develop asbestos-related diseases. Those studies
were  undertaken in connection  with  national  analyses of the  population
expected to have been exposed to  asbestos.  Using that  information,  HR&A
estimated the number of future  claims that would be filed,  as well as the
related costs that would be incurred in resolving those claims.

However,  projecting future asbestos costs is subject to numerous variables
that are  extremely  difficult to predict.  In addition to the  significant
uncertainties  surrounding  the number of claims  that  might be  received,
other  variables  include the type and  severity of the disease  alleged by
each claimant,  the long latency period associated with asbestos  exposure,
dismissal rates, costs of medical treatment,  the impact of bankruptcies of
other companies that are co-defendants in claims, uncertainties surrounding
the litigation  process from  jurisdiction to jurisdiction and from case to
case,  and the impact of  potential  changes  in  legislative  or  judicial
standards. Furthermore, any predictions with respect to these variables are
subject to even greater uncertainty as the projection period lengthens.  In
light of these inherent  uncertainties,  Ashland believes that ten years is
the most reasonable  period for recognizing a reserve for future costs, and
that costs  that might be  incurred  after that  period are not  reasonably
estimable.

Because  insurance  provides  reimbursements  for most of these  costs  and
coverage-in-place  agreements  exist  with  the  insurance  companies  that
provide  substantially  all of the coverage  currently being accessed,  the
current year increases in the asbestos reserve are expected to be offset in
part by probable insurance  recoveries valued at $250 million.  At June 30,
2003,  Ashland's  receivable for recoveries of such costs from its insurers
amounted to $423 million,  of which $33 million relates to costs previously
paid. Receivables from insurance companies amounted to $190 million at June
30, 2002.

Ashland  retained  the  services  of  Tillinghast-Towers  Perrin  to assist
management  in  the  estimation  of  probable  insurance  recoveries.  Such
recoveries are based on assumptions and estimates surrounding the available
insurance  coverage,  including  the  continued  viability  of all  solvent
insurance carriers.  About 35% of the estimated  receivables from insurance
companies  at June 30, 2003,  are  expected to be due from Equitas  Limited
(Equitas)  and  other  London  companies.  Of the  remainder,  over  90% is
expected to come from  companies or groups that are rated A or higher by A.
M. Best.

Although  coverage limits are resolved in the  coverage-in-place  agreement
with Equitas and other London companies, there is a disagreement with these
companies   over  the  timing  of   recoveries.   The  resolution  of  this
disagreement  could  have a  material  effect  on the  value  of  insurance
recoveries  from  those  companies.  In  estimating  the  value  of  future
recoveries   at  June  30,   2003,   Ashland   used  the  least   favorable
interpretation of this agreement and will continue to do so until such time
as the disagreement is resolved.

                                       11

<PAGE>


--------------------------------------------------------------------------------

ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

NOTE F - LITIGATION, CLAIMS AND CONTINGENCIES (CONTINUED)

ENVIRONMENTAL REMEDIATION

Ashland is subject to various federal,  state and local  environmental laws
and  regulations  that  require  environmental  assessment  or  remediation
efforts (collectively  environmental remediation) at multiple locations. At
June 30, 2003,  such  locations  included  100 waste  treatment or disposal
sites where Ashland has been identified as a potentially  responsible party
under Superfund or similar state laws, approximately 130 current and former
operating  facilities  (including certain  facilities  conveyed to MAP) and
about  1,220   service   station   properties.   Ashland's   reserves   for
environmental  remediation  amounted to $167 million at June 30, 2003,  and
reflect its  estimates of the most likely costs that will be incurred  over
an extended period to remediate  identified  conditions for which the costs
are reasonably  estimable,  without regard to any  third-party  recoveries.
Engineering  studies,  probability  techniques,  historical  experience and
other  factors are used to identify and evaluate  remediation  alternatives
and  their  related  costs  in  determining  the  estimated   reserves  for
environmental remediation.

Environmental   remediation  reserves  are  subject  to  numerous  inherent
uncertainties  that affect  Ashland's  ability to estimate its share of the
costs. Such uncertainties involve the nature and extent of contamination at
each  site,  the  extent  of  required   cleanup   efforts  under  existing
environmental  regulations,  widely  varying  costs  of  alternate  cleanup
methods,  changes in  environmental  regulations,  the potential  effect of
continuing  improvements  in  remediation  technology,  and the  number and
financial strength of other potentially  responsible  parties at multiparty
sites. Ashland regularly adjusts its reserves as remediation continues.

None of the remediation  locations is  individually  material to Ashland as
its  largest  reserve for any site is less than $10  million.  As a result,
Ashland's  exposure to adverse  developments with respect to any individual
site is not expected to be material,  and these sites are in various stages
of ongoing  remediation.  Although  environmental  remediation could have a
material   effect  on  results  of   operations  if  a  series  of  adverse
developments occur in a particular quarter or fiscal year, Ashland believes
that the  chance of such  developments  occurring  in the same  quarter  or
fiscal year is remote.

OTHER LEGAL PROCEEDINGS

In addition  to the  matters  described  above,  there are various  claims,
lawsuits  and  administrative  proceedings  pending or  threatened  against
Ashland  and its  current and former  subsidiaries.  Such  actions are with
respect to commercial matters, product liability, toxic tort liability, and
other environmental  matters, which seek remedies or damages, some of which
are for substantial amounts. While these actions are being contested, their
outcome is not predictable with assurance.

                                       12

<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------

ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES
INFORMATION BY INDUSTRY SEGMENT

------------------------------------------------------------------------------------------------------------------------------------
                                                                                Three months ended           Nine months ended
                                                                                      June 30                     June 30
                                                                              ------------------------    --------------------------
(In millions)                                                                      2003          2002          2003          2002
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>           <C>           <C>           <C>
REVENUES
    Sales and operating revenues
       APAC                                                                   $     683     $     756     $   1,615     $   1,861
       Ashland Distribution                                                         733           670         2,081         1,875
       Ashland Specialty Chemical                                                   308           290           870           809
       Valvoline                                                                    307           305           889           833
       Intersegment sales
          Ashland Distribution                                                       (6)           (6)          (16)          (15)
          Ashland Specialty Chemical                                                (19)          (18)          (50)          (47)
          Valvoline                                                                   -             -            (1)           (1)
                                                                              ----------    ----------    ----------    ----------
                                                                                  2,006         1,997         5,388         5,315
    Equity income
       APAC                                                                           2             -             6             -
       Ashland Specialty Chemical                                                     1             1             5             3
       Valvoline                                                                      -             1             1             1
       Refining and Marketing                                                       101            78           157           137
                                                                              ----------    ----------    ----------    ----------
                                                                                    104            80           169           141
    Other income
       APAC                                                                           3             2             5             8
       Ashland Distribution                                                           3             2            17            14
       Ashland Specialty Chemical                                                     3            (1)            8             2
       Valvoline                                                                      1             2             4             4
       Refining and Marketing                                                         4             -             4             2
       Corporate                                                                      1             2             5             5
                                                                              ----------    ----------    ----------    ----------
                                                                                     15             7            43            35
                                                                              ----------    ----------    ----------    ----------
                                                                              $   2,125     $   2,084     $   5,600     $   5,491
                                                                              ==========    ==========    ==========    ==========
OPERATING INCOME
    APAC                                                                      $      17     $      42     $     (39)    $      64
    Ashland Distribution                                                             11             3            27             8
    Ashland Specialty Chemical                                                        3            20            21            50
    Valvoline                                                                        24            25            56            53
    Refining and Marketing (1)                                                      100            66           145           111
    Corporate                                                                       (17)          (24)          (63)          (61)
                                                                              ----------    ----------    ----------    ----------
                                                                              $     138     $     132     $     147     $     225
                                                                              ==========    ==========    ==========    ==========


------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)      Includes Ashland's equity income from MAP, amortization related to
         Ashland's   excess   investment  in  MAP,  and  other   activities
         associated with refining and marketing.


                                       13

<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------

ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES
OPERATING INFORMATION BY INDUSTRY SEGMENT

------------------------------------------------------------------------------------------------------------------------------------
                                                                                Three months ended           Nine months ended
                                                                                      June 30                     June 30
                                                                              ------------------------    -------------------------
                                                                                    2003         2002          2003          2002
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>         <C>      <C>          <C>
APAC
    Construction backlog at June 30 (millions) (1)                                                        $   1,824    $    1,797
    Hot-mix asphalt production (million tons)                                        9.8         11.4          21.0          25.3
    Aggregate production (million tons)                                              8.1          8.5          20.5          22.2
    Ready-mix concrete production (million cubic yards)                              0.6          0.6           1.5           1.5
ASHLAND DISTRIBUTION (2)
    Sales per shipping day (millions)                                         $     11.6    $    10.5     $    11.1    $     10.0
    Gross profit as a percent of sales                                              15.1%        15.6%         15.3%         16.3%
ASHLAND SPECIALTY CHEMICAL (2)
    Sales per shipping day (millions)                                         $      4.9    $     4.5     $     4.6    $      4.3
    Gross profit as a percent of sales                                              33.1%        38.0%         33.8%         37.2%
VALVOLINE
    Lubricant sales (million gallons)                                               49.2         53.7         142.2         145.5
    Premium lubricants (percent of U.S. branded volumes)                            19.8%        17.2%         18.5%         15.7%
REFINING AND MARKETING (3)
    Refinery runs (thousand barrels per day)
       Crude oil refined                                                             951          973           878           930
       Other charge and blend stocks                                                 129          134           130           156
    Refined product yields (thousand barrels per day)
       Gasoline                                                                      582          598           544           602
       Distillates                                                                   292          308           276           298
       Asphalt                                                                        76           77            69            71
       Other                                                                         138          131           123           122
                                                                               -----------   ----------    ----------   -----------
       Total                                                                       1,088        1,114         1,012         1,093
    Refined product sales (thousand barrels per day) (4)                           1,346        1,351         1,311         1,299
    Refining and wholesale marketing margin (per barrel) (5)                  $     2.94    $    2.18     $    2.21    $     1.89
    Speedway SuperAmerica (SSA)
       Retail outlets at June 30                                                                              1,802         2,081
       Gasoline and distillate sales (million gallons)                               882          911         2,608         2,679
       Gross margin - gasoline and distillates (per gallon)                   $    .1229    $   .1116     $   .1134    $    .1032
       Merchandise sales (millions) (6)                                       $      590    $     612     $   1,695    $    1,736
       Merchandise margin (as a percent of sales)                                   23.9%        25.5%         24.4%         24.5%

------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)      Includes   APAC's   proportionate   share   of  the   backlog   of
         unconsolidated joint ventures.

(2)      Sales are defined as sales and operating revenues. Gross profit is
         defined as sales and  operating  revenues,  less cost of sales and
         operating expenses,  and depreciation and amortization relative to
         manufacturing assets.

(3)      Amounts represent 100% of MAP's operations,  in which Ashland owns
         a 38% interest.

(4)      Total average  daily volume of all refined  product sales to MAP's
         wholesale, branded and retail (SSA) customers.

(5)      Sales revenue less cost of refinery inputs, purchased products and
         manufacturing expenses, including depreciation.

(6)      Effective January 1, 2003, SSA adopted EITF 02-16,  "Accounting by
         a  Customer  (Including  a  Reseller)  for  Certain  Consideration
         Received from a Vendor," which requires rebates from vendors to be
         recorded as  reductions  to cost of sales.  Rebates  from  vendors
         recorded in SSA merchandise  sales for periods prior to January 1,
         2003 have not been  restated and included $38 million in the three
         months ended June 30,  2002;  $46 million in the nine months ended
         June 30, 2003;  and $129 million in the nine months ended June 30,
         2002.


                                       14

<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

--------------------------------------------------------------------------------

ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS

--------------------------------------------------------------------------------

RESULTS OF OPERATIONS

Ashland  reported income from continuing  operations of $71 million for the
quarter ended June 30, 2003,  compared to $61 million for the quarter ended
June 30, 2002.  For the nine months ended June 30, 2003,  Ashland  reported
income from continuing  operations of $33 million,  compared to $75 million
for the nine months ended June 30, 2002. An analysis of operating income by
industry segment follows.

APAC

CURRENT  QUARTER - APAC  reported  operating  income of $17 million for the
June 2003 quarter,  compared to $42 million for the June 2002 quarter. APAC
continues to suffer from adverse  weather that has  significantly  hampered
construction  activity.  Twelve of the 14 states in APAC's  operating  area
experienced  much higher than normal  rainfall for the quarter,  continuing
the pattern that has persisted  throughout  the fiscal year. In addition to
hampering  the  overall  level  of  construction   activity,   the  weather
conditions   created   significant   inefficiencies   in   completing   the
construction work that APAC was still able to perform. Net construction job
revenue (total revenue less subcontract costs) decreased 11% from the prior
year period, while production of hot-mix asphalt declined 14% and aggregate
production  dropped 5%. In addition,  the cost of liquid asphalt  increased
15% compared to the June 2002 quarter.

YEAR-TO-DATE  - APAC reported an operating loss of $39 million for the nine
months ended June 30, 2003, compared to operating income of $64 million for
the nine months ended June 30, 2002. The decline  reflects the same factors
described in the current quarter  comparison.  Net construction job revenue
declined  14%,  while  production  of  hot-mix  asphalt  declined  17%  and
production  of  aggregate  dropped 8%.  Operating  expenses  included a 15%
increase in the cost of liquid  asphalt  and higher  fuel and power  costs.
Construction backlog, which consists of work awarded and funded but not yet
performed,  continues to grow and was at a record high for the June quarter
of $1.8 billion.

APAC has  completed its  strategic  reorganization,  reducing the number of
operating  units to 24 from 38 and decreasing  field  overhead  expenses by
approximately  $8 million per year. In addition,  financial shared services
were implemented for four more operating units during the quarter, bringing
to 11 the total number sharing financial  services.  This centralization of
resources,  resulting  from the  Project  PASS  business  redesign  effort,
advances APAC's competitive position as a low-cost, operationally efficient
organization.

ASHLAND DISTRIBUTION

CURRENT QUARTER - Ashland  Distribution  reported  operating  income of $11
million for the June 2003 quarter  compared to $3 million for the June 2002
quarter.  Ashland Distribution  continues to revitalize its business and to
improve   service  to  customers  by  aggressively   implementing   quality
initiatives.  Sales per shipping day  increased  10%  reflecting  increased
prices, while the gross profit percentage declined 3% reflecting higher raw
material costs.

YEAR-TO-DATE  -  Ashland  Distribution  reported  operating  income  of $27
million for the nine months ended June 30, 2003, compared to $8 million for
the same period of 2002.  Sales per shipping day increased 11% reflecting a
6% increase  in the  average  price per pound and a 5% increase in volumes.
The gross  profit  percentage  declined 6%  reflecting  higher raw material
costs. A significant portion of the profits for both periods ($6 million in
2003 and $7 million in 2002) came from litigation  settlements and gains on
asset sales.

                                       15

<PAGE>


--------------------------------------------------------------------------------

ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS

--------------------------------------------------------------------------------

ASHLAND SPECIALTY CHEMICAL

CURRENT QUARTER - Operating  income for Ashland  Specialty  Chemical was $3
million in the June 2003 quarter and included an  impairment  charge of $10
million for a maleic anhydride  production  facility in Neville Island, Pa.
These results  compared to operating income of $20 million in the June 2002
quarter.  Sales per shipping day  increased 9%  reflecting  higher  product
prices.  Although demand for durable goods dipped by a combined 2.7 percent
in April and May,  adversely  affecting sales volumes,  volumes improved in
June.  Ashland Specialty  Chemical's gross profit  percentage  declined 13%
reflecting higher raw material costs.  Composite  polymers was hardest hit,
due  to  higher  styrene  costs.  However,  margins  improved  in  June  as
previously announced price increases took effect.

YEAR-TO-DATE - Ashland Specialty  Chemical reported operating income of $21
million for the nine months  ended June 30,  2003,  compared to $50 million
for the same  period  of  2002.  The  decline  reflects  the  same  factors
described  in the  current  quarter  comparison.  Sales  per  shipping  day
increased  7%  reflecting  increased  prices.  However,  the  gross  profit
percentage declined 9% reflecting higher raw material costs, especially for
composite polymers.

VALVOLINE

CURRENT QUARTER - Valvoline  reported  operating  income of $24 million for
the June 2003  quarter  compared to $25 million for the June 2002  quarter.
Although  overall sales volumes  declined,  Valvoline  increased its market
share in a very soft market.  Premium  product  sales  volumes  increased 7
percent. Lower margins in the core lubricants business reflected higher raw
material  costs.  Valvoline  Instant  Oil Change  (VIOC) had a record  June
quarter, due in part to a 20% increase in non-oil change revenues and a 12%
increase  in premium oil  changes.  In  addition,  results  from  Valvoline
International   improved   due  to  better   volumes  in  key  markets  and
strengthening foreign currencies.

YEAR-TO-DATE - Valvoline  reported  operating income of $56 million for the
nine  months  ended June 30,  2003,  compared  to $53  million for the same
period  of 2002.  Results  from  Valvoline  International  improved  on the
strength  of  higher  earnings  in  Europe,  Asia and  Australia.  Improved
earnings from VIOC reflected an 18% increase in non-oil change revenues and
a 14%  increase in premium  oil  changes.  Results for the core  lubricants
business declined reflecting  decreased lubricant volumes and lower margins
due to higher raw material costs.

REFINING AND MARKETING

CURRENT  QUARTER - Operating  income from  Refining  and  Marketing,  which
consists  primarily of equity income from Ashland's 38% ownership  interest
in MAP,  amounted  to $100  million for the  quarter  ended June 30,  2003,
compared to $66 million for the June 2002 quarter. Equity income from MAP's
refining and wholesale marketing operations  increased $12 million.  Demand
for petroleum products was soft in the quarter due to high crude oil prices
and a weak industrial economy.  However,  MAP refineries operated well, and
MAP's refining and wholesale  marketing margin improved 76 cents per barrel
over the June 2002 quarter. This improvement was partially offset by higher
operating  and  administrative  expenses.  Equity  income from MAP's retail
operations  (Speedway  SuperAmerica  and a 50% interest in the Pilot Travel
Centers joint venture) increased $10 million, reflecting an $8 million gain
on the sale of 190  Speedway  SuperAmerica  stores  and  increased  product
margins.  The net  costs  of  Ashland's  retained  refining  and  marketing
activities declined $12 million. The June 2003 quarter included gains of $4
million on petroleum  crack-spread  futures contracts,  while the June 2002
quarter included $7 million in fines and settlement costs related to a 1997
fire at the St. Paul Park, Minnesota refinery.


                                       16

<PAGE>


--------------------------------------------------------------------------------

ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS

--------------------------------------------------------------------------------

REFINING AND MARKETING (CONTINUED)

YEAR-TO-DATE  - Operating  income from Refining and  Marketing  amounted to
$145  million for the nine  months  ended June 30,  2003,  compared to $111
million for the comparable  2002 period.  Equity income from MAP's refining
and wholesale marketing  operations  increased $7 million,  reflecting a 32
cents per barrel increase in MAP's refining and wholesale marketing margin,
partially offset by higher operating and  administrative  expenses.  Equity
income from MAP's retail  operations  increased $15 million,  while the net
costs of Ashland's retained refining and marketing  activities declined $14
million,  reflecting  the same  factors  described  in the current  quarter
comparison.

CORPORATE

Corporate  expenses  amounted to $17 million in the quarter  ended June 30,
2003,  compared  to $24  million  in the June  2002  quarter.  The  decline
reflects  the impact of  Ashland's  program  initiated  last fall to reduce
general and administrative  (G&A) costs by $25 million per year.  Corporate
expenses  on a  year-to-date  basis  amounted  to $63  million  in the 2003
period,  compared to $61 million in the 2002 period.  The increase reflects
the net effect of an $8 million  charge in the  December  2002  quarter for
severance and other transition costs related to the cost-reduction program,
the expensing of employee  stock  options which began October 1, 2002,  and
the cost savings from the G&A cost reduction program.

NET INTEREST AND OTHER FINANCIAL COSTS

For the quarter ended June 30, 2003, net interest and other financial costs
totaled $31 million, compared to $33 million for the June 2002 quarter. For
the  year-to-date,  net interest and other  financial costs amounted to $97
million in the 2003  period,  compared to $103  million in the 2002 period.
The decline  reflects the repayment of currently  maturing  long-term  debt
with lower rate short-term debt, and reduced interest rates.

DISCONTINUED OPERATIONS AND ACCOUNTING CHANGE

As  described  in  Notes B and F to the  Condensed  Consolidated  Financial
Statements,  Ashland's results from discontinued operations include charges
associated  with  estimated  future  asbestos   liabilities  less  probable
insurance  recoveries,   as  well  as  net  income  from  the  discontinued
operations  of  its  Electronic   Chemicals  business.   Such  amounts  are
summarized below.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                                                     Three months ended           Nine months ended
                                                                          June 30                      June 30
                                                                   -----------------------     -------------------------
(In millions)                                                           2003         2002            2003          2002
------------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>          <C>            <C>           <C>
Asbestos-related charges (net of deferred income tax benefits)     $      (5)   $       -      $     (104)   $        -
Net income of Electronic Chemicals business                                4            4              10             7
                                                                   ----------   ----------     -----------   -----------
Results from discontinued operations (net of income taxes)         $      (1)   $       4      $      (94)   $        7
                                                                   ==========   ==========     ===========   ===========

</TABLE>
As described in Note C to the Condensed  Consolidated Financial Statements,
Ashland  recognized  an  impairment  loss of $12 million after income taxes
related  to the  goodwill  of  Ashland  Distribution,  as a  result  of the
adoption of FAS 142 as of October 1, 2001.

                                       17

<PAGE>


--------------------------------------------------------------------------------

ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS

--------------------------------------------------------------------------------

FINANCIAL POSITION

LIQUIDITY

Cash flows from operations, a major source of Ashland's liquidity, amounted
to $111  million for the nine months  ended June 30,  2003,  compared to $7
million for the nine months ended June 30, 2002.  Cash flows from Ashland's
wholly owned  operations  were down primarily as a result of lower earnings
from APAC. Cash distributions from MAP were also somewhat lower,  amounting
to $108  million in the 2003  period and $119  million in the 2002  period.
However,  income taxes paid by Ashland  related to MAP's earnings were $142
million  lower in the 2003 period  than in the 2002  period.  Ashland  pays
income taxes on most of its share of the taxable  earnings  reported by MAP
in the following year,  creating timing issues in Ashland's cash flows from
year to year. Ashland's capital requirements for net property additions and
dividends  exceeded cash flows from  operations by $23 million for the nine
months ended June 30, 2003.

Ashland's  financial  position  has  enabled it to obtain  capital  for its
financing needs and to maintain investment grade ratings on its senior debt
of Baa2  from  Moody's  and BBB from  Standard  & Poor's.  Ashland  has two
revolving credit agreements providing for up to $350 million in borrowings.
Under a shelf  registration,  Ashland  can also  issue an  additional  $545
million in debt and equity securities should future  opportunities or needs
arise.  While the revolving credit  agreements  contain a covenant limiting
new borrowings based on Ashland's  stockholders'  equity,  these agreements
would have  permitted an additional  $1.3 billion of borrowings at June 30,
2003. Additional  permissible  borrowings are increased (decreased) by 150%
of any increase (decrease) in stockholders' equity.

On August 7, 2003,  S&P revised  its  outlook on Ashland to  negative  from
stable, and lowered Ashland's commercial paper rating to A-3 from A-2. This
action  will  materially  restrict,  and  could  at  times  eliminate,  the
availability  of the commercial  paper market to Ashland.  S&P affirmed its
investment-grade  long-term  ratings for Ashland at BBB. On August 8, 2003,
Ashland  borrowed $100 million under its 364-day  revolving credit facility
that matures in June 2004, to repay maturing commercial paper. Ashland will
likely  utilize a portion of its $250 million  revolving  credit  facility,
which also matures in June 2004, to repay  additional  maturing  commercial
paper.  S&P's action does not trigger any  obligations or other  provisions
under Ashland's financing agreements or other contractual relationships.

At June 30,  2003,  working  capital  (excluding  debt due within one year)
amounted to $872  million,  compared to $752 million at September 30, 2002,
and $640  million at June 30,  2002.  This  comparison  is  affected by the
classification of all of the assets and liabilities of Electronic Chemicals
as current at June 30, 2003,  and  September  30, 2002.  Ashland's  working
capital is affected by its use of the LIFO method of  inventory  valuation.
That method valued inventories below their replacement costs by $74 million
at June 30,  2003,  $61 million at September  30, 2002,  and $59 million at
June  30,  2002.   Liquid  assets  (cash,  cash  equivalents  and  accounts
receivable)  amounted  to 73% of  current  liabilities  at June  30,  2003,
compared to 75% at September 30, 2002, and 72% at June 30, 2002.

CAPITAL RESOURCES

For the nine months ended June 30, 2003, property additions amounted to $84
million,  compared to $130  million for the same period last year.  Ashland
anticipates  meeting its remaining 2003 capital  requirements  for property
additions and dividends from internally generated funds.

                                    18

<PAGE>



--------------------------------------------------------------------------------

ASHLAND INC. AND CONSOLIDATED SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS

--------------------------------------------------------------------------------

CAPITAL RESOURCES (CONTINUED)

Ashland's debt level amounted to $1.9 billion at June 30, 2003, compared to
$1.8 billion at September 30, 2002, and $1.9 billion at June 30, 2002. Debt
as a  percent  of  capital  employed  amounted  to 46.5% at June 30,  2003,
compared to 45.4% at  September  30, 2002,  and 45.7% at June 30, 2002.  At
June 30,  2003,  Ashland's  debt  included  $292  million of  floating-rate
obligations,  including $253 million of short-term commercial paper and $39
million of long-term  debt,  and the interest  rates on an additional  $153
million of  fixed-rate,  medium-term  notes were  effectively  converted to
floating  rates  through  interest  rate  swap  agreements.   In  addition,
Ashland's costs under its sale of receivables program and various operating
leases are based on the  floating-rate  interest  costs on $289  million of
third-party debt underlying those  transactions.  As a result,  Ashland was
exposed to  fluctuations  in short-term  interest  rates on $734 million of
debt obligations at June 30, 2003.

ASBESTOS-RELATED LITIGATION AND ENVIRONMENTAL REMEDIATION

For a discussion of Ashland's asbestos-related litigation and environmental
remediation  matters,  see Note F to the Condensed  Consolidated  Financial
Statements.

FORWARD LOOKING STATEMENTS

Management's  Discussion  and  Analysis  (MD&A)  contains   forward-looking
statements, within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the  Securities  Exchange  Act of 1934,  with respect to
various  information  in the  Results  of  Operations,  Capital  Resources,
Asbestos-Related  Litigation and Environmental Remediation sections of this
MD&A. Estimates as to operating performance, earnings, and scope and effect
of  asbestos  and  environmental  liabilities  are  based  upon a number of
assumptions,  including  those  mentioned in MD&A.  Such estimates are also
based upon  internal  forecasts  and analyses of current and future  market
conditions and trends, management plans and strategies,  weather, operating
efficiencies and economic  conditions,  such as prices,  supply and demand,
cost of raw materials, and legal proceedings and claims (including asbestos
and environmental matters).  Although Ashland believes its expectations are
based  on  reasonable  assumptions,   it  cannot  assure  the  expectations
reflected in MD&A will be achieved.  This  forward-looking  information may
prove to be inaccurate  and actual  results may differ  significantly  from
those  anticipated  if  one  or  more  of  the  underlying  assumptions  or
expectations  proves  to be  inaccurate  or  is  unrealized,  or  if  other
unexpected  conditions or events occur.  Other factors and risks  affecting
Ashland  are  contained  in  Risks  and  Uncertainties  in  Note  A to  the
Consolidated  Financial  Statements in Ashland's  2002 Annual Report and in
Ashland's  Form 10-K for the  fiscal  year ended  September  30,  2002,  as
amended.  Ashland undertakes no obligation to subsequently update or revise
these forward-looking statements.

                                       19

<PAGE>


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Ashland's  market risk  exposure at June 30, 2003 is  generally  consistent
with the types and amounts of market risk exposures  presented in Ashland's
Form 10-K for the fiscal year ended September 30, 2002.

ITEM 4.  CONTROLS AND PROCEDURES

(a)      As of the end of the  period  covered  by this  quarterly  report,
         Ashland,  under the supervision and with the  participation of its
         management,  including  Ashland's Chief Executive  Officer and its
         Chief Financial Officer,  evaluated the effectiveness of Ashland's
         disclosure  controls and procedures pursuant to Rule 13a-15(b) and
         15d-15(b)  promulgated under the Securities  Exchange Act of 1934,
         as  amended.  Based  upon that  evaluation,  the  Chief  Executive
         Officer  and  Chief  Financial  Officer  have  concluded  that the
         disclosure controls and procedures were effective.

(b)      There were no significant  changes in Ashland's  internal  control
         over  financial  reporting,  or in other  factors,  that  occurred
         during  the  period  covered by this  quarterly  report  that have
         materially  affected,  or  are  reasonably  likely  to  materially
         affect, Ashland's internal control over financial reporting.

                                       20

<PAGE>






                           PART II - OTHER INFORMATION
--------------------------------------------------------------------------------

     ITEM 1. LEGAL PROCEEDINGS

     ENVIRONMENTAL  PROCEEDINGS  - As of June 30,  2003,  Ashland  has been
identified as a "potentially  responsible party" ("PRP") under Superfund or
similar state laws for potential  joint and several  liability for clean-up
costs  in  connection  with  alleged   releases  of  hazardous   substances
associated  with 100 waste  treatment  or disposal  sites.  These sites are
currently  subject  to  ongoing   investigation  and  remedial  activities,
overseen by the United States  Environmental  Protection  Agency or a state
agency,  in which Ashland is typically  participating  as a member of a PRP
group.  Generally,  the  type of  relief  sought  includes  remediation  of
contaminated soil and/or groundwater,  reimbursement for past costs of site
clean-up and  administrative  oversight,  and/or  long-term  monitoring  of
environmental   conditions  at  the  sites.  The  ultimate  costs  are  not
predictable   with   assurance.   For  additional   information   regarding
environmental   matters  and   reserves,   see  Note  F  to  the  Condensed
Consolidated Financial Statements.

     ASBESTOS-RELATED  LITIGATION - Ashland is subject to liabilities  from
claims  alleging  personal  injury  caused by  exposure  to  asbestos.  For
additional  information regarding liabilities arising from asbestos-related
litigation, see Note F to the Condensed Consolidated Financial Statements.

     SHAREHOLDER  DERIVATIVE  LITIGATION  - On  August  16,  2002,  Central
Laborers'   Pension  Fund,   derivatively  as  a  shareholder  of  Ashland,
instituted  an action in the Circuit  Court of  Kentucky  in Kenton  County
against Ashland's then-serving Board of Directors. On motion of Ashland and
the other  defendants,  the case was removed to the United States  District
Court,  Eastern  District of Kentucky,  Covington  Division.  Plaintiff has
moved to remand  the case to the state  court.  The  action is  purportedly
filed on behalf of  Ashland,  and asserts  the  following  causes of action
against the Directors:  breach of fiduciary duty,  abuse of control,  gross
mismanagement,  and waste of corporate assets.  The suit also names Paul W.
Chellgren,  the  then-serving  Chief Executive  Officer and Chairman of the
Board, and James R. Boyd,  former Senior Vice President and Group Operating
Officer, as individual defendants,  and it seeks to recover an unstated sum
from them individually alleging unjust enrichment from various transactions
completed  during their  tenure with  Ashland.  The suit  further  seeks an
unspecified  sum  from  Mr.  Chellgren   individually  based  upon  alleged
usurpation  of corporate  opportunities.  The suit also names Mr. J. Marvin
Quin,  Ashland's Chief Financial Officer, as well as three former employees
of Ashland's  wholly-owned  subsidiary,  APAC, as individual defendants and
alleges  that they  participated  in the  preparation  and  filing of false
financial  statements  during  fiscal  years 1999 - 2001.  The suit further
names Ernst & Young LLP  ("E&Y"),  as a  defendant,  alleging  professional
accounting  malpractice  and  negligence  in the  conduct  of its  audit of
Ashland's  1999 and 2000  financial  statements,  respectively,  as well as
alleging  that E&Y aided and abetted  the  individual  defendants  in their
alleged  breach of duties.  The  complaint  seeks to  recover,  jointly and
severally,  from  defendants an unstated sum of  compensatory  and punitive
damages.  The complaint seeks equitable and/or  injunctive  relief to avoid
continuing harm from alleged ongoing illegal acts, and seeks a disgorgement
of defendants' alleged insider-trading gains, in addition to the reasonable
cost and expenses incurred in bringing the complaint,  including attorneys'
and experts' fees.

ITEM 5. OTHER INFORMATION

     On June 30,  2003,  Ashland  filed a Form 8-K  disclosing  that it had
signed a  definitive  agreement  to sell the net  assets of its  Electronic
Chemicals  business and certain related  subsidiaries  to Air Products.  On
August 11, 2003,  Teamsters Local Union No. 773 in Allentown,  Pennsylvania
("Union")  filed suit against  Ashland in the United States  District Court
for the Eastern District of Pennsylvania  based upon an alleged breach of a
collective   bargaining  agreement  between  Ashland  and  the  Union.  The
collective

                                    21

<PAGE>


bargaining  agreement  at issue  concerns  Ashland's  Electronic  Chemicals
manufacturing  facility in Easton,  Pennsylvania.  The lawsuit seeks, among
other  remedies,  a preliminary  and  permanent  injuction  preventing  the
consumation  of Air  Products'  proposed  purchase  of the  net  assets  of
Ashland's Electronic  Chemicals business and certain related  subsidiaries.
Honeywell  International  has also  filed suit in a  Delaware  state  court
seeking to enjoin this proposed transaction,  as was described in Ashland's
Form  8-K  filed  July  18,  2003.   Ashland  still  expects  the  proposed
transaction  to be completed,  although the current legal  proceedings  may
delay the projected closing date of August 29, 2003.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits
         --------

10.1     Ashland Inc. Deferred Compensation Plan

10.2     Ashland Inc. Deferred Compensation Plan for Non-Employee Directors

10.3     Eleventh  Amended and  Restated  Ashland Inc.  Supplemental  Early
         Retirement Plan for Certain Employees

10.4     Ashland  Inc.  Nonqualified  Excess  Pension  Benefit  Plan - 2003
         Restatement

12       Computation of Ratio of Earnings to Fixed Charges.

31.1     Certificate  of James  J.  O'Brien,  Chief  Executive  Officer  of
         Ashland pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2     Certificate of J. Marvin Quin, Chief Financial  Officer of Ashland
         pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32       Certificate  of James  J.  O'Brien,  Chief  Executive  Officer  of
         Ashland,  and J. Marvin Quin, Chief Financial  Officer of Ashland,
         pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002, U.S.C.
         Section 1350.

(b)      Reports on Form 8-K
         -------------------

During the  quarter  ended June 30,  2003,  and  between  such date and the
filing of this Form 10-Q,  Ashland filed or furnished the following reports
on Form 8-K:

(1)      Form 8-K dated April 22, 2003 reporting  Ashland's  second quarter
         results.

(2)      Form 8-K dated May 2, 2003 containing a Regulation FD disclosure.

(3)      Form 8-K dated May 23, 2003 containing a Regulation FD disclosure.

(4)      Form  8-K  dated  June  27,  2003   containing  a  Regulation   FD
         disclosure.

(5)      Form 8-K  dated  June  30,  2003  reporting  the  execution  of an
         agreement to sell the net assets of Ashland's Electronic Chemicals
         business and certain related subsidiaries.

(6)      Form 8-K dated July 18, 2003  reporting the filing of a lawsuit by
         a third party seeking,  among other  remedies,  a preliminary  and
         permanent  injunction  preventing the consummation of the proposed
         sale of the net assets of Ashland's  Electronic Chemicals business
         and certain related subsidiaries.

(7)      Form 8-K dated July 22, 2003  reporting  Ashland's  third  quarter
         results.

(8)      Form  8-K  dated  July  23,  2003   containing  a  Regulation   FD
         disclosure.

                                    22

<PAGE>


                                 SIGNATURE

Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                                    Ashland Inc.
                                      ------------------------------------------
                                                   (Registrant)


Date: August 13, 2003                   /s/ J. Marvin Quin
                                      ------------------------------------------
                                      J. Marvin Quin
                                      Senior Vice President and Chief Financial
                                      Officer (on behalf of the Registrant and
                                      as principal financial officer)




                               EXHIBIT INDEX



Exhibit
  No.                          Description
-------  -----------------------------------------------------------------------

10.1     Ashland Inc. Deferred Compensation Plan

10.2     Ashland Inc. Deferred Compensation Plan for Non-Employee Directors

10.3     Eleventh  Amended and  Restated  Ashland Inc.  Supplemental  Early
         Retirement Plan for Certain Employees

10.4     Ashland  Inc.  Nonqualified  Excess  Pension  Benefit  Plan - 2003
         Restatement

12       Computation of Ratio of Earnings to Fixed Charges.

31.1     Certificate  of James  J.  O'Brien,  Chief  Executive  Officer  of
         Ashland pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2     Certificate of J. Marvin Quin, Chief Financial  Officer of Ashland
         pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32       Certificate  of James  J.  O'Brien,  Chief  Executive  Officer  of
         Ashland,  and J. Marvin Quin, Chief Financial  Officer of Ashland,
         pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002, U.S.C.
         Section 1350.


                                    23

<PAGE>



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>defcomp.txt
<DESCRIPTION>EX. 10.1 DEF. COMP. PLAN
<TEXT>

                                                                Exhibit 10.1
                                ASHLAND INC.
                         DEFERRED COMPENSATION PLAN
                 (Amended and Restated as of April 1, 2003)

     1. PURPOSE

     The  purpose of this  Ashland  Inc.  Deferred  Compensation  Plan (the
"Plan"),  is to provide  eligible  key  employees  of the  Company  with an
opportunity to defer  compensation to be earned by them from the Company as
a means of saving for retirement or other future purposes.

     2. DEFINITIONS

     The following definitions shall be applicable throughout the Plan:

     (a)  "Accounting  Date" means the Business Day on which a  calculation
concerning  a  Participant's  Compensation  Account  is  performed,  or  as
otherwise defined by the Committee.

     (b) "Beneficiary" means the person(s) designated by the Participant in
accordance  with Section 12, or if no person(s)  is/are so designated,  the
estate of a deceased Participant.

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

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

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

<PAGE>


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

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

     (h) "Common Stock Fund" means that investment option,  approved by the
Committee,  in which a Participant's  Compensation Account may be deemed to
be  invested  and may earn income  based on a  hypothetical  investment  in
Common Stock.

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

     (j) "Compensation" means any employee  compensation  determined by the
Committee to be properly deferrable under the Plan.

     (k) "Compensation  Account(s)" means the Retirement Account and/or the
In-Service Account(s).

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

     (m) "Credit Date" means the date on which Compensation would otherwise
have  been  paid to the  Participant  or in the  case of the  Participant's
designation of investment option changes,  within three Business Days after
the Participant's  designation is received by Corporate Human Resources, or
as otherwise designated by the Committee.

     (n)  "Deferred  Compensation"  means the  Compensation  elected by the
Participant to be deferred pursuant to the Plan.

     (o) "Election"  means a Participant's  delivery of a written notice of
election  to defer  payment of all or a portion of his or her  Compensation
either until retirement,  Termination,  death or such other time as further
provided by the Committee or the Company.

     (p) "Employee"  means a full-time,  regular  salaried  employee (which
term shall be deemed to include  officers) of the Company,  its present and
future  subsidiary  corporations  as defined in Section 424 of the Internal
Revenue Code of 1986, as amended or its affiliates.

     (q) "Employee  Savings Plan" means the Ashland Inc.  Employee  Savings
Plan, as it now exists or as it may hereafter be amended.

     (r) "Excess Payments" means payments made to a Participant pursuant to
the Plan and the Excess Plan.

     (s) "Excess Plan" means the Ashland Inc.  Nonqualified  Excess Benefit
Pension Plan, as it now exists or as it may hereafter be amended.

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

<PAGE>


     (u) "Fair Market Value" means the price of a share of Common Stock, as
reported on the Composite  Tape for New York Stock  Exchange  issues on the
date and at the time designated by the Company.

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

     (w)   "In-Service   Account"   means  the   account(s)  to  which  the
Participant's Deferred Compensation is credited and from which, pursuant to
Section 11, distributions are made.

     (x)  "Participant"  means an  Employee  selected by the  Committee  to
participate  in the Plan and who has  elected to defer  payment of all or a
portion of his or her Compensation under the Plan.

     (y) "Plan" means this Ashland Inc.  Deferred  Compensation  Plan as it
now exists or as it may hereafter be amended.

     (z)   "Retirement   Account"   means  the   account(s)  to  which  the
Participant's Deferred Compensation is credited and from which, pursuant to
Section 11, distributions are made.

     (aa)  "SERP"  means  the  Tenth  Amended  and  Restated  Ashland  Inc.
Supplemental Early Retirement Plan for Certain Key Executive Employees,  as
it now exists or as it may hereafter be amended.

     (bb) "SERP Payments" means payments made to a Participant  pursuant to
the Plan and the SERP.

     (cc)  "Stock  Unit(s)"  means the share  equivalents  credited  to the
Common  Stock Fund of a  Participant's  Compensation  Account  pursuant  to
Section 6.

     (dd)  "Termination"  means  termination of services as an Employee for
any reason other than retirement.

     3. SHARES; ADJUSTMENTS IN EVENT OF CHANGES IN CAPITALIZATION

     (a) Shares  Authorized  for  Issuance.  There  shall be  reserved  for
issuance  under  the Plan  500,000  shares  of  Common  Stock,  subject  to
adjustment pursuant to subsection (c) below.

     (b) Units  Authorized  for Credit.  The maximum  number of Stock Units
that may be credited to Participants'  Compensation Accounts under the Plan
is 1,500,000, subject to adjustment pursuant to subsection (c) below.

     (c) Adjustments in Certain  Events.  In the event of any change in the
outstanding Common Stock of the Company by reason of any stock split, share
dividend,   recapitalization,   merger,   consolidation,    reorganization,
combination,   or  exchange  or  reclassification   of  shares,   split-up,
split-off, spin-off, liquidation or other similar change in capitalization,
or any distribution to common  shareholders other than cash dividends,  the
number  or kind of  shares or Stock  Units  that may be issued or  credited
under the Plan shall be  automatically  adjusted so that the  proportionate
interest of the  Participants  shall be maintained as before the occurrence
of such event.  Such  adjustment  shall be  conclusive  and binding for all
purposes of the Plan.

4.       ELIGIBILITY

<PAGE>


     The  Committee  shall have the  authority  to select  from  management
and/or highly  compensated  Employees those Employees who shall be eligible
to  participate  in the Plan;  provided,  however,  that  employees  and/or
retirees  who have  elected to defer an amount into this Plan from  another
plan  sponsored or maintained  by Ashland Inc.,  the terms of which allowed
such  employee or retiree to make such a deferral  election into this Plan,
shall be considered to be eligible to participate in this Plan.

     5. ADMINISTRATION

     Full power and  authority to construe,  interpret and  administer  the
Plan  shall be vested in the  Company  and the  Committee.  This  power and
authority includes,  but is not limited to, selecting Compensation eligible
for  deferral,  establishing  deferral  terms and  conditions  and adopting
modifications,  amendments  and  procedures  as  may be  deemed  necessary,
appropriate  or convenient by the  Committee.  Decisions of the Company and
the  Committee  shall be final,  conclusive  and binding  upon all parties.
Day-to-day  administration  of the  Plan  shall  be the  responsibility  of
Corporate Human Resources.

     6. PARTICIPANT ACCOUNTS

     Upon election to participate in the Plan, there shall be established a
Retirement  Account  and/or  In-Service   Account,  as  designated  by  the
Participant to which there shall be credited any Deferred Compensation,  as
of each Credit Date. Each such  Compensation  Account shall be credited (or
debited)  on each  Accounting  Date  with  income  (or loss)  based  upon a
hypothetical  investment  in any  one or  more  of the  investment  options
available under the Plan, as prescribed by the Committee for the particular
compensation credited, which may include a Common Stock Fund, as elected by
the Participant under the terms of Section 10.

     7. WITHDRAWAL - FINANCIAL HARDSHIP

     Upon the written  request of a Participant  or a  Participant's  legal
representative  and a finding  that  continued  deferral  will result in an
unforeseeable financial emergency to the Participant,  the Committee or the
Company (each in its sole  discretion) may authorize (a) the payment of all
or a part of a Participant's  Compensation  Account in a single installment
prior to his or her ceasing to be a Participant, or (b) the acceleration of
payment of any  multiple  installments  thereof.  It is  intended  that the
Committee's  determinations  as to whether the  Participant has suffered an
"unforeseeable  financial  emergency"  shall  be made  consistent  with the
requirements under Section 457(d) of the Internal Revenue Code.

     8. WITHDRAWAL - GOOD REASON

     (a) Availability of Withdrawal  Prior to Retirement.  Upon the written
request of a Participant  or a  Participant's  legal  representative  and a
finding that good reason exists for early  withdrawal of some or all of the
Participant's account balance, the Committee,  in its sole discretion,  may
authorize  the  payment  of all or a part of a  Participant's  Compensation
Account  in a  single  installment  prior  to his or  her  ceasing  to be a
Participant, provided the conditions specified in Sections 8(b), 8(c), 8(d)
and 8(e) hereof are satisfied. It is intended that the Committee shall deem
requests  for early  withdrawal  for purposes  similar to the  following to
constitute  "good  reason":  (a) the purchase of a new home;  (b) education
expenses; or (c) charitable contributions.

<PAGE>


     (b)  Forfeiture  Penalty.  In the event of a  withdrawal  pursuant  to
Section 8(a), the Participant shall forfeit from such Compensation  Account
an amount equal to 5% of the amount of the withdrawal. The forfeited amount
shall be deducted from the  Compensation  Account prior to giving effect to
the requested  withdrawal.  Neither the Participant  nor the  Participant's
Beneficiary shall have any right or claim to the forfeited amount,  and the
Company  shall  have  no  obligation  whatsoever  to the  Participant,  the
Participant's  Beneficiary or any other person with regard to the forfeited
amount.

     (c)  Minimum  Withdrawal.  In no event shall the amount  withdrawn  in
accordance with Section 8(a) be less than $50,000, or the entire balance of
the Participant's Compensation Account immediately prior to the withdrawal,
whichever is less. The  withdrawal  must be taken in increments of $25,000,
except to the extent that the Participant's Compensation Account balance is
less than  $50,000  immediately  prior to the  withdrawal,  and, in such an
event,  the  Participant  must  withdraw  the entire  Compensation  Account
balance.

     (d) Suspension from Deferrals.  In the event of a withdrawal  pursuant
to Section 8(a), a Participant who is otherwise  eligible to make deferrals
of  Compensation  under  the Plan  shall be  prohibited  from  making  such
deferrals  with respect to the remainder of the current Fiscal Year and the
Fiscal Year of the Plan  immediately  following the Fiscal Year of the Plan
during which the withdrawal was made, and any Election  previously  made by
the Participant  with respect to deferrals of compensation  for such Fiscal
Years of the Plan  shall be void and of no  effect;  however,  during  this
period of  suspension  Participants  shall be allowed to  continue to defer
enough  compensation  into the Plan to allow  them to receive  the  company
match they would otherwise  receive under the Employee Savings Plan but for
the dollar limitations for allowable contributions to such plan.

     (e) Suspension from Withdrawals. Participants shall be prohibited from
requesting a second withdrawal under Section 8(a) for a period of 60 months
following any withdrawal under Section 8(a).

     9. WITHDRAWAL - ACCELERATED DISTRIBUTION

     (a) Availability of Withdrawal Prior to Retirement. The Participant or
the Participant's  Beneficiary who is receiving  installment payments under
the  Plan  may  elect,  in  writing,  to  withdraw  all or a  portion  of a
Participant's  Compensation  Account  at any time  prior  to the time  such
Compensation Account otherwise becomes payable under the Plan, provided the
conditions specified in Sections 9(c), 9(d) and 9(e) hereof are satisfied.

     (b) Acceleration of Periodic Distributions. Upon the written notice of
the  Participant  or  the   Participant's   Beneficiary  who  is  receiving
installment  payments  under the Plan,  the  Participant  or  Participant's
Beneficiary   may  elect  to  have  all  or  a  portion  of  the  remaining
installments  distributed in the form of an  immediately  payable lump sum,
provided  the  conditions  specified  in Section  9(c) and 9(e)  hereof are
satisfied.

     (c)  Forfeiture  Penalty.  In the event of a  withdrawal  pursuant  to
Section 9(a), or an accelerated  distribution pursuant to Section 9(b), the
Participant shall forfeit from such Compensation Account an amount equal to
10% of the amount of the  withdrawal or  accelerated  distribution,  as the
case may be. The forfeited  amount shall be deducted from the  Compensation
Account prior to giving effect to the requested withdrawal or acceleration.
Neither the Participant nor the  Participant's  Beneficiary  shall have any
right or claim to the  forfeited  amount,  and the  Company  shall  have no
obligation whatsoever to the Participant,  the Participant's Beneficiary or
any other person with regard to the forfeited amount.

<PAGE>


     (d)  Minimum  Withdrawal.  In no event shall the amount  withdrawn  in
accordance  with  Section  9(a) be less than 25% of the amount  credited to
such   Participant's   Compensation   Account   immediately  prior  to  the
withdrawal.

     (e) Suspension from Deferrals.  In the event of a withdrawal  pursuant
to Section 9(a) or 9(b), a  Participant  who is otherwise  eligible to make
deferrals of  Compensation  under this Plan shall be prohibited from making
such deferrals with respect to the remainder of the current Fiscal Year and
the Fiscal Year of the Plan  immediately  following  the Fiscal Year of the
Plan during which the withdrawal was made, and any Election previously made
by the  Participant  with  respect to deferrals  of  Compensation  for such
Fiscal  Years of the Plan shall be void and of no effect;  however,  during
this  period of  suspension,  Participants  shall be allowed to continue to
defer  enough  compensation  into  the Plan to allow  them to  receive  the
company match they would otherwise  receive under the Employee Savings Plan
but for the dollar limitations for allowable contributions to such plan.

     10. MANNER OF ELECTION

     (a) General.  The Company or the Committee  shall determine the timing
of the filing of the appropriate  Election forms. An effective Election may
not be revoked or modified except as otherwise determined by the Company or
the Committee or as stated herein. In addition to the provisions  contained
in this Plan, any deferrals of SERP Payments or Excess  Payments must be in
accordance with the terms of the SERP or the Excess Plan.

     (b) Investment  Alternatives -- Existing  Balances.  A Participant may
elect to change an existing selection as to the investment  alternatives in
effect with  respect to an  existing  Compensation  Account (in  increments
prescribed  by the  Committee  or the  Company)  as  often,  and with  such
restrictions, as determined by the Committee or by the Company.

     (c) Change of Beneficiary.  A Participant  may, at any time,  elect to
change the  designation  of a  Beneficiary  in  accordance  with Section 12
hereof.


     11. DISTRIBUTION

     (a) Retirement Account. In accordance with the Participant's  Election
and within the guidelines  established  by the Committee or the Company,  a
Participant's  Retirement Account shall be distributed in cash or shares of
Common  Stock (or a  combination  of  both).  If no  Election  is made by a
Participant  as to  the  distribution  or  form  of  payment  of his or her
Retirement  Account,  upon the earlier of death or retirement  such account
shall be paid in cash or shares of Common Stock (or a combination  of both)
in lump sum. The entire Retirement  Account must be paid out within fifteen
years  following  the date of the  earlier  of the  Participant's  death or
retirement.

     (b) In-Service Account. In accordance with the Participant's  Election
and within the  guidelines  established  by the  Committee  or the Company,
Deferred Compensation credited to a Participant's  In-Service Account shall
be  distributed  in cash or  shares of Common  Stock (or a  combination  of
both).  A  Participant  may make  different  Elections  with respect to the
applicable  distribution  periods  for  different  deferral  cycles  in the
In-Service Accounts.

     (c)  Termination.  Notwithstanding  the  foregoing,  in the event of a
Participant's Termination, the Company reserves the right to distribute the
Participant's  Compensation  Account  at such  time and in such  manner  as
deemed appropriate.

<PAGE>


     (d)  Request to Change in  Distribution  of  Compensation  Account.  A
Participant  will be allowed to request a change in his or her  Election as
to the  distribution  of  Deferred  Compensation  of his or her  Retirement
Account for all amounts previously deferred pursuant to such Election.  Any
such request  shall not be effective  without the approval of the Committee
or the Company,  which  approval  shall be in their sole  discretion.  Such
request must be made by the earlier of:

     (1) the date six months prior to the first day of the month  following
such Participant's retirement; or

     (2) the December 31  immediately  preceding the first day of the month
following such Participant's retirement.

     A  Participant  may not request a change to his or her  Election as to
the  distribution  of  Deferred  Compensation  in  his  or  her  In-Service
Account(s) except as otherwise set forth in Sections 7, 8 and 9.

     12. BENEFICIARY DESIGNATION

     A Participant may designate one or more persons (including a trust) to
whom or to which  payments  are to be made if the  Participant  dies before
receiving  distribution  of all amounts due  hereunder.  A  designation  of
Beneficiary  will be effective only after the signed Election is filed with
Corporate  Human  Resources  while the Participant is alive and will cancel
all  designations  of  Beneficiary   signed  and  filed  earlier.   If  the
Participant fails to designate a Beneficiary as provided above or if all of
a Participant's  Beneficiaries predecease him or her and he or she fails to
designate a new Beneficiary,  the remaining unpaid amounts shall be paid in
one lump sum to the estate of such Participant. If all Beneficiaries of the
Participant die after the  Participant  but before complete  payment of all
amounts due  hereunder,  the remaining  unpaid amounts shall be paid in one
lump sum to the estate of the last to die of such Beneficiaries.

     13. CHANGE IN CONTROL

     Notwithstanding  any  provision of this Plan to the  contrary,  in the
event of a Change in Control, each Participant in the Plan shall receive an
automatic  lump  sum  cash  distribution  of  all  amounts  accrued  in the
Participant's  Compensation  Account not later than fifteen (15) days after
the date of the Change in  Control.  For this  purpose,  the balance in the
portion of a  Participant's  Compensation  Account  invested  in the Common
Stock Fund shall be determined by multiplying  the number of Stock Units by
the higher of (a) the  highest  Fair  Market  Value on any date  within the
period  commencing  30 days prior to such Change in Control,  or (b) if the
Change in Control of the Company occurs as a result of a tender or exchange
offer or  consummation of a corporate  transaction,  then the highest price
paid per share of Common Stock pursuant thereto.  Any  consideration  other
than cash forming a part or all of the consideration for Common Stock to be
paid  pursuant  to  the  applicable  transaction  shall  be  valued  at the
valuation price thereon determined by the Board.


     In addition,  the Company shall  reimburse a Participant for the legal
fees and expenses incurred if the Participant is required to seek to obtain
or enforce any right to  distribution.  In the event that it is  determined
that  such  Participant  is  properly   entitled  to  a  cash  distribution
hereunder,  such  Participant  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 subject date
from the date such distribution  should have been made to and including the
date  it is  made.  Notwithstanding  any  provision  of  this  Plan  to the
contrary,  this  Section  13 may not be  amended  after a Change in Control
occurs without the written consent of a majority in number of Participants.

<PAGE>



     14. INALIENABILITY OF BENEFITS

     The interests of the  Participants and their  Beneficiaries  under the
Plan  may  not in any  way be  voluntarily  or  involuntarily  transferred,
alienated or assigned, nor subject to attachment, execution, garnishment or
other such equitable or legal process.  A Participant or Beneficiary cannot
waive the provisions of this Section 14.

     15. GOVERNING LAW

     The  provisions  of this plan shall be  interpreted  and  construed in
accordance  with the laws of the  Commonwealth  of Kentucky,  except to the
extent preempted by Federal law.

     16. AMENDMENTS

     The  Committee  may amend,  alter or  terminate  this Plan at any time
without  the prior  approval  of the  Board;  provided,  however,  that the
Committee may not, without approval by the Board and the shareholders:

     (a)  increase  the number of  securities  that may be issued under the
Plan (except as provided in Section 3(c));

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

     (c)   otherwise   materially   increase  the   benefits   accruing  to
Participants under the Plan.

     17. EFFECTIVE DATE

     The Plan was  approved by the  shareholders  of the Company on January
26, 1995,  and originally  became  effective as of October 1, 1994, and has
been restated in this document effective as of April 1, 2003.


<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>dirdefcomp.txt
<DESCRIPTION>EX. 10.2 DIR. DEF. COMP. PLAN
<TEXT>

                                                                Exhibit 10.2

                                ASHLAND INC.
           DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS

                       (Amended as of April 1, 2003)



     ARTICLE I. GENERAL PROVISIONS

     1. PURPOSE

     The  purpose  of this  Ashland  Inc.  Deferred  Compensation  Plan For
Non-Employee  Directors  (the "Plan") is to provide each  Director  with an
opportunity  to  defer  some or all of the  Director's  Fees as a means  of
saving for  retirement or other  purposes.  In addition,  the Plan provides
Directors  with the ability to increase their  proprietary  interest in the
Company's long-term  prospects by permitting  Directors to receive all or a
portion of their Fees in Ashland Common Stock.

     2. DEFINITIONS

     The following definitions shall be applicable throughout the Plan:

     (a)  "Accounting  Date" means the Business Day on which a  calculation
concerning  a  Participant's  Compensation  Account  is  performed,  or  as
otherwise defined by the Committee.

     (b) "Act" means the  Securities  Act of 1933,  as amended from time to
time.

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

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

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

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

<PAGE>


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


     (h) "Committee"  means the Governance and Nominating  Committee of the
Board or its designee.


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

     (j) "Common Stock Fund" means that investment option,  approved by the
Committee, in which a Participant's  Retirement Account may be deemed to be
invested and may earn income based on a  hypothetical  investment in Common
Stock.

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

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

     (m)  "Credit  Date"  means the date on which any Fees would  otherwise
have  been  paid to the  Participant  or in the  case of the  Participant's
designation of investment option changes,  within three Business Days after
the Participant's  designation is received by Corporate Human Resources, or
as otherwise designated by the Committee.

     (n) "Deferral Account" means the account(s) to which the Participant's
Deferred Fees are credited and from which, pursuant to Article III, Section
5, distributions are made.

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

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

     (q)  "Disability"  means a Director's  incapacity,  due to physical or
mental  illness,  resulting  in an inability to attend to his or her duties
and responsibilities as a member of the Board.

     (r) "Election"  means a Participant's  delivery of a written notice of
election to the  Secretary of the Company  electing to defer payment of his
or her Fees or to receive such Fees in the form of Common Stock.

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

     (t) "Fair Market Value" means the price of a share of Common Stock, as
reported on the Composite  Tape for New York Stock  Exchange  issues on the
date and at the time designated by the Company.

<PAGE>


     (u) "Fees" mean the annual  retainer and meeting  fees, as well as any
per diem compensation for special assignments, earned by a Director for his
or her service as a member of the Board  during a calendar  year or portion
thereof.

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

     (w) "Participant" means a Director who has elected to defer payment of
all or a portion of his or her Fees  and/or to receive  all or a  specified
portion of his or her Fees in shares of Common Stock.

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

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

     (z) "Plan"  means this  Ashland Inc.  Deferred  Compensation  Plan For
Non-Employee Directors.

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

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

     (cc)  "Termination"  means retirement from the Board or termination of
service as a Director for any other reason.

     3. SHARES; ADJUSTMENTS IN EVENT OF CHANGES IN CAPITALIZATION

     (a) Shares  Authorized  for  Issuance.  There  shall be  reserved  for
issuance  under  the Plan  500,000  shares  of  Common  Stock,  subject  to
adjustment   pursuant  to  subsection  (b)  below.  Such  shares  shall  be
authorized but unissued shares of Common Stock.

     (b) Adjustments in Certain  Events.  In the event of any change in the
outstanding Common Stock of the Company by reason of any stock split, stock
dividend,   recapitalization,   merger,   consolidation,    reorganization,
combination,  or  exchange  of  shares,  split-up,   split-off,   spin-off,
liquidation or other similar change in capitalization,  or any distribution
to common  shareholders  other than cash  dividends,  the number or kind of
shares that may be issued under the Plan shall be automatically adjusted so
that the  proportionate  interest of the  Directors  shall be maintained as
before the occurrence of such event.  Such  adjustment  shall be conclusive
and binding for all purposes of the Plan.

     4. ELIGIBILITY

     Any  non-employee  Director  of  the  Company  shall  be  eligible  to
participate in the Plan.


<PAGE>



     5. ADMINISTRATION

     Full power and  authority to construe,  interpret and  administer  the
Plan shall be vested in the Company  and the  Committee.  Decisions  of the
Company and the Committee  shall be final,  conclusive and binding upon all
parties.  Day-to-day administration of the Plan shall be the responsibility
of Corporate Human  Resources.  This Department may authorize new or modify
existing  forms for use under this Plan so long as any such modified or new
forms are not inconsistent with the terms of the Plan.

     ARTICLE II. COMMON STOCK PROVISION

     Each Director may elect to receive all or a portion of his or her Fees
in shares of Common  Stock by making an Election  pursuant to Article  III,
Section  5.  Shares  shall be  issued  to the  Director  at the end of each
quarter  beginning in the quarter the Election is effective.  The number of
shares of Common Stock so issued shall be equal to the amount of Fees which
otherwise  would have been  payable  to such  Director  during the  quarter
divided by the Fair  Market  Value.  Only whole  number of shares of Common
Stock will be issued, with any fractional shares to be paid in cash.

     ARTICLE III. DEFERRED COMPENSATION

     1. PARTICIPANT ACCOUNTS


     (a)  Upon  election  to  participate  in  the  Plan,  there  shall  be
established  a  Deferral  Account  to which  there  shall be  credited  any
Deferred  Fees as of each  Credit  Date.  The  Deferral  Account  shall  be
credited (or debited) on each  Accounting  Date with income (or loss) based
upon a hypothetical investment in any one or more of the investment options
available under the Plan, as prescribed by the Committee, which may include
a Common  Stock  Fund,  as  elected by the  Participant  under the terms of
Article III, Section 5.


     (b) The Stock  Account  of a  Participant  shall be  credited  on each
Accounting  Date with Stock  Units  equal to the number of shares of Common
Stock (including  fractions of a share) that could have been purchased with
the amount of such deferred Fees as to which a stock deferral  election has
been made at the Fair Market Value on the  Accounting  Date. As of the date
of any dividend  distribution  date for the Common Stock, the Participant's
Stock Account shall be credited  with  additional  Stock Units equal to the
number of shares of Common  Stock  (including  fractions  of a share)  that
could have been purchased,  at the Fair Market Value on such date, with the
amount  which  would have been paid as  dividends  on that number of shares
(including  fractions  of a share)  of Common  Stock  which is equal to the
number of Stock Units then credited to the Participant's Stock Account.


     2. WITHDRAWAL - FINANCIAL HARDSHIP

     Upon the written request of a Participant or a Participant's  Personal
Representative  and a finding  that  continued  deferral  will result in an
unforeseeable financial emergency to the Participant,  the Committee or the
Company (each in its sole  discretion) may authorize (a) the payment of all
or a part of a Participant's Deferral Account in a single installment prior
to his or her ceasing to be a Director,  or (b) the acceleration of payment
of any multiple  installments  hereof. It is intended that the Committee's,
or the Company's, determinations as to whether the Participant has suffered
an  "unforeseeable  financial  emergency" shall be made consistent with the
requirements  under  Section  457(d) of the Internal  Revenue  Code. If the
Participant  requesting  such a payment is a member of the  Committee,  the
Participant shall abstain from the Committee's  determination as to whether
the payment shall be made.


<PAGE>



     3. WITHDRAWAL - GOOD REASON

     (a) Availability of Withdrawal  Prior to Retirement.  Upon the written
request of a Participant  or a  Participant's  legal  representative  and a
finding that good reason exists for early  withdrawal of some or all of the
Participant's  account balance,  the Committee may authorize the payment of
all or a part of a Participant's  Deferral Account in a single  installment
prior to his or her ceasing to be a  Participant,  provided the  conditions
specified  in  subsections  (b),  (c),  (d),  and (e) of this  Article III,
Section 3, are  satisfied.  It is intended  that the  Committee  shall deem
requests  for early  withdrawal  for purposes  similar to the  following to
constitute  "good  reason":  (a) the purchase of a new home;  (b) education
expenses; or (c) charitable  contributions.  If the Participant  requesting
such a payment is a member of the Committee,  the Participant shall abstain
from the Committee's determination as to whether the payment shall be made.

     (b)  Forfeiture  Penalty.  In the event of a  withdrawal  pursuant  to
subsection  (a) of this  Article  III,  Section  3, the  Participant  shall
forfeit from such  Deferral  Account an amount equal to 5% of the amount of
the  withdrawal.  The forfeited  amount shall be deducted from the Deferral
Account  prior to giving effect to the  requested  withdrawal.  Neither the
Participant nor the Participant's Beneficiary shall have any right or claim
to  the  forfeited  amount,  and  the  Company  shall  have  no  obligation
whatsoever to the Participant,  the Participant's  Beneficiary or any other
person with regard to the forfeited amount.

     (c)  Minimum  Withdrawal.  In no event shall the amount  withdrawn  in
accordance with subsection (a) of this Article III,  Section 3 be less than
$50,000,  or the  entire  balance  of the  Participant's  Deferral  Account
immediately prior to the withdrawal, whichever is less. The withdrawal must
be  taken  in  increments  of  $25,000,  except  to  the  extent  that  the
Participant's  Deferral  Account  balance is less than $50,000  immediately
prior to the  withdrawal,  and,  in such an  event,  the  Participant  must
withdraw the entire Deferral Account balance.

         (d) Suspension from Deferrals. In the event of a withdrawal pursuant to
subsection (a) of this Article III, Section 3, a Participant who is otherwise
eligible to make deferrals of Fees under the Plan shall be prohibited from
making such deferrals with respect to the remainder of the current Fiscal Year
and the Fiscal Year of the Plan immediately following the Fiscal Year of the
Plan during which the withdrawal was made, and any Election previously made by
the Participant with respect to deferrals of Fees for such Fiscal Years of the
Plan shall be void and of no effect.

     (e) Suspension from Withdrawals. Participants shall be prohibited from
requesting a second  withdrawal  under  subsection (a) of this Article III,
Section  3 for a  period  of  60  months  following  any  withdrawal  under
subsection (a) of this Article III, Section 3.

     4. WITHDRAWAL - ACCELERATED DISTRIBUTION

     (a) Availability of Withdrawal  Prior to Termination.  The Participant
or the  Participant's  Beneficiary  who is receiving  installment  payments
under the Plan may elect,  in writing,  to  withdraw  all or a portion of a
Participant's  Deferral Account at any time prior to the time such Deferral
Account otherwise  becomes payable under the Plan,  provided the conditions
specified in  subsections  (c), (d) and (e) of this Article III,  Section 4
are satisfied.


     (b) Acceleration of Periodic Distributions.  Upon the written election
of  the  Participant  or the  Participant's  Beneficiary  who is  receiving
installment  payments  under the Plan,  the  Participant  or  Participant's
Beneficiary   may  elect  to  have  all  or  a  portion  of  the  remaining
installments  distributed in the form of an  immediately  payable lump sum,
provided the conditions specified in subsection (c) and (e) of this Article
III, Section 4 are satisfied.

<PAGE>


     (c)  Forfeiture  Penalty.  In the event of a  withdrawal  pursuant  to
subsection  (a)  of  this  Article  III,   Section  4,  or  an  accelerated
distribution pursuant to subsection (b) of this Article III, Section 4, the
Participant shall forfeit from such Deferral Account an amount equal to 10%
of the amount of the  withdrawal or accelerated  distribution,  as the case
may be. The forfeited  amount shall be deducted  from the Deferral  Account
prior to giving effect to the requested withdrawal or acceleration. Neither
the Participant nor the  Participant's  Beneficiary shall have any right or
claim to the  forfeited  amount,  and the Company  shall have no obligation
whatsoever to the Participant,  the Participant's  Beneficiary or any other
person with regard to the forfeited amount.

     (d)  Minimum  Withdrawal.  In no event shall the amount  withdrawn  in
accordance with subsection (a) of this Article III,  Section 4 be less than
25%  of  the  amount  credited  to  such  Participant's   Deferral  Account
immediately prior to the withdrawal.

     (e) Suspension from Deferrals.  In the event of a withdrawal  pursuant
to subsection (a) or (b) of this Article III,  Section 4, a Participant who
is  otherwise  eligible to make  deferrals of Fees under this Plan shall be
prohibited  from making such deferrals with respect to the remainder of the
current Fiscal Year and the Fiscal Year of the Plan  immediately  following
the Fiscal Year of the Plan during which the  withdrawal  was made, and any
Election  previously made by the  Participant  with respect to deferrals of
Fees for such Fiscal Year of the Plan shall be void and of no effect.

     5. MANNER OF ELECTION

     (a) General. Any Director wishing to participate in the Plan may elect
to do so by  delivering  to the  Secretary  of the Company an Election on a
form  prescribed by Corporate  Human  Resources  designating  the manner in
which such Deferred Fees are to be invested in accordance with Article III,
Section 1 and electing the timing and form of  distribution.  The timing of
the filing of the appropriate  form with Corporate Human Resources shall be
determined by the Company or the Committee.  An effective election to defer
Fees may not be revoked or modified  except as otherwise  determined by the
Company or the Committee or as stated herein.

     (b) Investment  Alternatives - Existing  Balances.  A Participant  may
elect to change an existing selection as to the investment  alternatives in
effect with respect to existing deferred Fees (in increments  prescribed by
the  Committee or the  Company) as often,  and with such  restrictions,  as
determined by the Committee or by the Company.

     (c) Change of Beneficiary.  A Participant  may, at any time,  elect to
change the  designation  of a Beneficiary  in  accordance  with Article IV,
Section 1 hereof.

     (d) Initial Election.  With respect to Directors' Fees payable for all
or any portion of a calendar year after such person's  initial  election to
the  office  of  Director  of the  Company,  any  such  person  wishing  to
participate  in the Plan may file a proper  Election  within 30 days  after
such election to office.  Any such Election  shall be effective upon filing
or as soon as possible thereafter with respect to such Fees.


<PAGE>




     6. DISTRIBUTION

     (a) Deferral Account.  In accordance with the  Participant's  Election
and  as  prescribed  by  the   Committee,   Deferred  Fees  credited  to  a
Participant's  Deferral  Account shall be  distributed in cash or shares of
Common Stock (or a combination of both).  Unless otherwise  directed by the
Committee,  if no Election is made by a Participant as to the  distribution
or form of payment of his or her Deferral  Account,  upon  Termination such
account shall be paid in cash in lump sum. The entire Deferral Account must
be paid out within  fifteen years  following the date of the  Participant's
Termination.

     (b)  Request  to  Change  in  Distribution  of  Deferral  Account.   A
Participant  will be allowed to request a change in his or her  Election as
to the distribution of Deferred Compensation of his or her Deferral Account
for all amounts  previously  deferred  pursuant to such Election.  Any such
request shall not be effective without the approval of the Committee or the
Company, which approval shall be in their sole discretion. Such change must
be made by the earlier of:

     (i) the date six months prior to the first day of the month  following
the Participant's Termination; or

     (ii) the December 31 immediately  preceding the first day of the month
following the Participant's Termination.

     If the  Participant  making such change is a member of the  Committee,
such Participant shall abstain from the Committee's  decision to approve or
disapprove such change.

     7. PAYMENT COMMENCEMENT DATE


     Payments  of  amounts  deferred  pursuant  to a valid  Election  shall
commence after a  Participant's  Termination in accordance  with his or her
Election.  If a  Participant  dies  prior  to the  first  deferred  payment
specified  in an Election,  payments  shall  commence to the  Participant's
Beneficiary on the first payment date so specified.


     8. CHANGE IN CONTROL

     Notwithstanding  any  provision of this Plan to the  contrary,  in the
event of a "Change in Control"  (as defined in Section  2(f) of Article I),
each  Participant  in the Plan  shall  receive an  automatic  lump sum cash
distribution of all amounts accrued in the Participant's  Cash and/or Stock
Account(s)  (including  interest at the Prime Rate of Interest  through the
business day immediately preceding the date of distribution) not later than
fifteen  (15) days  after the date of the  "Change  in  Control."  For this
purpose,   the  balance  in  the  Stock  Account  shall  be  determined  by
multiplying  the  number of Stock  Units by the  higher of (a) the  highest
closing  price of a share of Common Stock during the period  commencing  30
days prior to such Change in Control or (b) if the Change in Control of the
Company occurs as a result of a tender or exchange offer or consummation of
a corporate  transaction,  then the highest  price paid per share of Common
Stock pursuant thereto. Any consideration other than cash forming a part or
all of the  consideration  for  Common  Stock  to be paid  pursuant  to the
applicable  transaction  shall be valued  at the  valuation  price  thereon
determined by the Board.


     In addition, the Company shall reimburse a Director for the legal fees
and  expenses  incurred  if the  Director  is required to seek to obtain or
enforce any right to distribution.  In the event that it is determined that
such Director is properly entitled to a cash distribution  hereunder,  such
Director  shall also be entitled  to interest  thereon at the Prime Rate of
Interest quoted by Citibank,  N.A. as its prime commercial  lending rate on
the subject date from the date such  distribution  should have been made to
and  including the date it is made.  Notwithstanding  any provision of this
Plan to the contrary, Article I, Section 2(f) and Section 8 of this Article
may not be amended after a "Change in Control"  occurs  without the written
consent of a majority in number of Participants.

<PAGE>

     ARTICLE IV. MISCELLANEOUS PROVISIONS

     1. BENEFICIARY DESIGNATION

     A Director may  designate  one or more persons  (including a trust) to
whom  or to  which  payments  are to be made if the  Director  dies  before
receiving   payment  of  all  amounts  due  hereunder.   A  designation  of
Beneficiary  will be effective only after the signed Election is filed with
the  Secretary  of the Company  while the Director is alive and will cancel
all designations of a Beneficiary signed and filed earlier. If the Director
fails  to  designate  a  Beneficiary  as  provided  above  or if  all  of a
Director's  Beneficiaries  predecease  him or her  and he or she  fails  to
designate a new Beneficiary,  remaining unpaid amounts shall be paid in one
lump  sum to the  estate  of such  Director.  If all  Beneficiaries  of the
Director die before the Director or before complete  payment of all amounts
due hereunder,  the remaining  unpaid amounts shall be paid in one lump sum
to the estate of the last to die of such Beneficiaries.

     2. INALIENABILITY OF BENEFITS

     The interests of the Directors and their  Beneficiaries under the Plan
may not in any way be voluntarily or involuntarily  transferred,  alienated
or assigned, nor be subject to attachment,  execution, garnishment or other
such equitable or legal process.

     3. GOVERNING LAW

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

     4. AMENDMENTS

     The  Committee  may amend,  alter or  terminate  this Plan at any time
without the prior approval of the Directors;  provided,  however,  that the
Committee may not, without approval by the shareholders:

     (a)  materially  increase the number of securities  that may be issued
under the Plan (except as provided in Article I, Section 3),

     (b)  materially   modify  the   requirements  as  to  eligibility  for
participation in the Plan, or

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

<PAGE>


     5. COMPLIANCE WITH RULE 16b-3

     It is the  intention  of the  Company  that  the  Plan  comply  in all
respects  with Rule 16b-3  promulgated  under Section 16(b) of the Exchange
Act and that Plan Participants remain non-employee directors ("Non-Employee
Directors") for purposes of  administering  other employee benefit plans of
the Company and having such other plans be exempt from Section 16(b) of the
Exchange  Act.  Therefore,  if any Plan  provision  is  found  not to be in
compliance with Rule 16b-3 or if any Plan provision  would  disqualify Plan
participants from remaining Non-Employee Directors, that provision shall be
deemed  amended so that the Plan does so comply  and the Plan  participants
remain  Non-Employee  Directors,  to the extent permitted by law and deemed
advisable by the  Committee,  and in all events the Plan shall be construed
in favor of its meeting the requirements of Rule 16b-3.

     6. EFFECTIVE DATE


     The Plan was  approved by the  shareholders  of the Company on January
27, 1994, and originally  became  effective as of November 9, 1993, and has
been restated in this document effective April 1, 2003.


<PAGE>



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>serp.txt
<DESCRIPTION>EX. 10.3 SERP
<TEXT>

                                                                Exhibit 10.3
                          ELEVENTH AMENDED AND RESTATED
                                  ASHLAND INC.
                       SUPPLEMENTAL EARLY RETIREMENT PLAN
                              FOR CERTAIN EMPLOYEES
                     JULY 1, 2003 AND AS AMENDED THEREAFTER

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 Eleventh  Amended and Restated  Ashland  Inc.  Supplemental  Early
Retirement  Plan for Certain  Employees is amended and  restated  effective
July 1, 2003.  This amended and restated Plan supercedes all prior versions
of this Plan  that  were  effective  on or  before  July 1, 2003  regarding
Effective  Retirement Dates that occur on or after such date, except as may
otherwise  be provided  herein.  Employees  on June 30, 2003 that are in an
employment classification that potentially makes them eligible for the Plan
and that - are at least  age 55 on June 30,  2003;  or the sum of whose Age
and Continuous Service is 80 (hereinafter  called 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 are  effective  on July 1,
2003,  such as those  addressing  the vesting of benefits and the change to
the  Effective  Retirement  Date.  The  rights  and  obligations  of former
Employees  receiving Plan benefits before July 1, 2003 shall be governed by
the terms of the Plan in effect at the time of each such former  Employee's
Effective  Retirement Date, unless otherwise determined by the Committee in
its sole discretion.

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 annual  income  payable
under this Plan by Ashland for the lifetime of a Participant  commencing on
such Participant's  Effective Retirement Date and ending on his or her date
of death, 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 Ashland,
other than a  consolidation  or merger of Ashland  into or with a direct or
indirect wholly-owned subsidiary, in which Ashland is not the continuing or
surviving  corporation or pursuant to which shares of Common Stock would be
converted  into cash,  securities or other  property other than a merger in
which the holders of Common Stock immediately prior to the merger will have
the  same  proportionate   ownership  of  common  stock  of  the  surviving
corporation immediately after the merger, (B) any sale, lease, exchange, or
other transfer (in one transaction or a series of related  transactions) of
all or substantially all the assets of Ashland, 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 15% of Ashland's  Common Stock
outstanding at the time,  without the approval of the Board,  or (3) at any
time  during a period  of two  consecutive  years,  individuals  who at the
beginning of such period  constituted  the Board shall cease for any reason
to  constitute  at least a majority  thereof,  unless the  election  or the
nomination  for  election by  Ashland's  shareholders  of each new director
during such two-year  period was approved by a vote of at least  two-thirds
of the directors  then still in office who were  directors at the beginning
of such two-year period. Notwithstanding the foregoing, any transaction, or
series of  transactions,  that shall result in the disposition of Ashland's
interest in Marathon Ashland Petroleum LLC,  including  without  limitation
any transaction  arising out of that certain Put/Call,  Registration Rights
and Standstill  Agreement dated January 1, 1998 among Marathon Oil Company,
USX  Corporation,  Ashland and Marathon  Ashland  Petroleum LLC, as amended
from time to time, shall not be deemed to constitute a Change in Control.

     2.06 "COMMITTEE" - means the Personnel and  Compensation  Committee of
the Board and its designees.

     2.07 "CONTINUOUS SERVICE" - means Continuous Service as defined in the
Ashland Inc. and Affiliates  Pension Plan,  except as the  determination of
Continuous Service is modified for purposes of this Plan.

     2.08  "EFFECTIVE  RETIREMENT  DATE" - means:  (a) AFTER JUNE 30, 2003.
After June 30, 2003, 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  in the  Incentive  Compensation  Plan  who  has an  Employment
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." 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 in the Incentive  Compensation  Plan, or who
is  considered  to  be a  Level  I  or  II  participant  in  the  Incentive
Compensation Plan and who does not have an Employment  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 an Employment
Agreement  with Ashland,  "Cause" shall have the meaning given to that word
in Section  3.02.  In the event a Change in Control  occurs  after June 30,
2003, all Participants  shall be completely  vested in their Plan benefits,
regardless of the number of their years of Continuous Service

     2.09  "EMPLOYEE" - means,  effective after June 30, 2003, a common law
employee of Ashland.

     2.10 "EMPLOYMENT AGREEMENTS" - means those contractual agreements,  in
effect from time to time, which are approved by the Board and which provide
an Employee with a specified period of employment and other benefits.

     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.  For Effective  Retirement Dates after June
30, 2003, 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 after June 30,
2003 and 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 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 in the Incentive Compensation Plan.

     2.12  "FINAL   AVERAGE   COMPENSATION"   -  means  the  average  total
compensation  paid  during the  highest  thirty-six  months (36) out of the
final  eighty-four-month  (84) period. For Effective Retirement Dates after
June 30, 2003,  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, provided that the Termination of Employment occurred after
June 30,  2003.  If the  Participant  becomes  classified  below a Level II
Employee  after  June 30,  2003 and 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
Employment  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  in the  Incentive
Compensation Plan.

     2.13 "INCENTIVE  COMPENSATION PLAN" - means the Ashland Inc. Incentive
Compensation Plan or the Ashland Inc.  Incentive  Compensation Plan for Key
Executives, as applicable, including any successor to such plans.

     2.14 "PARTICIPANT" - means for Effective  Retirement Dates before July
1, 2003 an Employee who was approved for participation in the Plan pursuant
to Article III or Section 5.06, as they existed at the applicable time. For
Effective  Retirement  Dates  after  June 30,  2003,  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.

     2.15 "PLAN" - means the  Eleventh  Amended and  Restated  Ashland Inc.
Supplemental  Early  Retirement  Plan for  Certain  Employees  as set forth
herein.

     2.16  "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 such Employee's  Effective  Retirement Date.
For purposes of this Section  2.16,  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.  Effective July 1, 2003, Service shall be calculated based
on the rules for calculating  Periods of Service under the Ashland Inc. and
Affiliates Pension Plan, except as the determination of Service is modified
for purposes of this Plan.

     2.17  "TERMINATION  OF EMPLOYMENT" - means the date an Employee ceases
to be an Employee of Ashland.

ARTICLE III.      PARTICIPATION IN PLAN.
-----------       ---------------------

     Eligibility for benefits shall be determined as follows:

3.01     PARTICIPATION AFTER JUNE 30, 2003

     Effective  after  June  30,  2003,  approval  shall  no  longer  be  a
prerequisite  for an  Employee  to become a  Participant  in the Plan.  All
Employees  classified on the records of Ashland on or after July 1, 2003 as
a Level I, II, III, IV or V Employee  or under any  equivalent  designation
shall be Participants  in the Plan.  After earning five years of Continuous
Service, whether such service is in whole or in part before July 1, 2003 or
after  June 30,  2003,  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 4.04.

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 under the Incentive Compensation Plan
shall  automatically be completely vested in their benefits,  regardless of
the number of their years of Continuous Service.

ARTICLE IV.       INTERACTION WITH EMPLOYMENT AGREEMENTS.
----------        --------------------------------------

4.01     TERMINATIONS - GENERAL

     Notwithstanding  any  provision  of  this  Plan  to the  contrary,  an
Employee who has entered into an Employment  Agreement with Ashland and who
is either  terminated  without  "Cause"  prior to a "change  in  control of
Ashland" or is  terminated  without  "Cause" or resigns  for "Good  Reason"
following a "change in control of Ashland"  (each quoted term as defined in
the  applicable  employment  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
selected by the Employee at such time.

4.02     BENEFITS PRIOR TO "CHANGE IN CONTROL."

         If the Employee's termination is without "Cause" prior to a "change in
         control of Ashland," the benefits payable hereunder shall commence no
         earlier than as of the first day of the calendar month coincident with
         or next following the second anniversary following the Employee's "Date
         of Termination" (as defined in the applicable employment agreement);
         however, if the Employee elects to receive such benefits in a lump sum
         as provided in Section 5.04(b)(1), such benefits shall commence and be
         payable as therein specified.

4.03     BENEFITS SUBSEQUENT TO A "CHANGE IN CONTROL."

     If the Employee's  termination is without "Cause" or he or she resigns
for "Good  Reason"  following  a "change in control of  Ashland,"  benefits
payable  hereunder  shall begin as of the first day of the  calendar  month
next following the Participant's Effective Retirement Date.

4.04     SUBSEQUENT ACTIVITY IN CONFLICT WITH ASHLAND

     The  provisions  of this Section 4.04 shall apply to Level I, II, III,
IV and V  Participants,  regardless  of whether such a  Participant  has an
Employment Agreement; except that the provisions of this Section 4.04 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, 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 4.04; 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  4.04,  such  Participant  may
submit to Ashland written notice (Attention: Vice President Human Resources
- Programs and  Services) 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  4.04 are breached by a
Participant,  the  Participant  shall  not be  entitled  to any  additional
periodic  payments  hereunder  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  4.04  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 4.04 deferred all
or any  part of a lump  sum  distribution  hereunder  to the  Ashland  Inc.
Deferred Compensation Plan, 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 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 4.04.

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

     The Transition  Participants  described in Section 1.2 that are deemed
to be Level I or II participants under the Incentive  Compensation Plan are
eligible to receive Annual Retirement Income equal to:

(a) PRE-AGE 62 BENEFIT

     A  Transition  Participant  who retires  under this Plan,  including a
Transition  Participant  to whom the  provisions  of paragraph  (d) of this
Section  5.01 apply,  shall  receive an Annual  Retirement  Income 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 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
                  2nd    -          "                                   70%
                  3rd    -          "                                   65%
                  4th    -          "                                   60%
                  5th    -          "                                   55%
                  6th    -   Year and thereafter                        50%
                             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.

     (b) 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 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).

     (c) BENEFIT REDUCTION

     The  amount of  benefit  provided  in  paragraphs  (a) and (b) of this
Section 5.01 shall be reduced by the sum of the following:

     (1) the  Transition  Participant's  benefit under the Ashland Inc. and
Affiliates  Pension  Plan  (the  "Pension  Plan")  (assuming  50%  of  such
Transition  Participant's account under the Ashland Inc. Leveraged Employee
Stock Ownership Plan 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 Ashland Inc.  Leveraged Employee Stock Ownership Plan),
determined on the basis of a single life annuity form of benefit;

     (2) 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");

     (3) 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

     (4) the Transition  Participant's 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%,
and determined on the basis of a single life annuity benefit.

     In the event a Transition Participant's benefit hereunder is paid as a
lump sum pursuant to an election under Section 5.04(b)(1), the reduction to
such benefit shall be calculated based upon the lump sum actuarial  present
value  of  the  benefits  referred  to in  subparagraphs  (1)-(4)  of  this
paragraph  (c).  For  distributions  commencing  after May 31,  2001,  such
calculation  shall be conducted on the basis that the benefits  referred to
in said  subparagraphs  (1)-(4)  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.

     (d) BENEFIT AFTER A CHANGE IN CONTROL

     (1) PARTICIPANTS HAVING EMPLOYMENT AGREEMENTS. A Participant having an
Employment  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,  if
applicable.  A Participant subject to this paragraph (d)(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 any permitted optional form under this Article V. If the
Effective Retirement Date of a Participant subject to this paragraph (d)(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 a lump sum payment
option, 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 EMPLOYMENT AGREEMENTS.  A Participant without
an Employment 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.

<TABLE>
<CAPTION>


    LENGTH OF PARTICIPANT'S SERVICE AT SEPARATION FROM                           NUMBER OF YEARS
                        EMPLOYMENT                                           (THE APPLICABLE AMOUNT)
<S>                                                          <C>
------------------------------------------------------------ ---------------------------------------------------------
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
------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
     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. A Participant subject to this paragraph
(d)(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 any
permitted  optional form under this Article V. If the Effective  Retirement
Date of a Participant  subject to this paragraph  (d)(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.

     (e) BENEFIT AFTER JUNE 30, 2003. Subject to the applicable  provisions
of paragraph (d) 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  in the  Incentive  Compensation
Plan 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 Ashland Inc. and Affiliates  Pension Plan (the "Pension Plan")
(assuming  50% of such  Participant's  account - if any - under the Ashland
Inc.  Leveraged  Employee  Stock  Ownership  Plan 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  Ashland  Inc.
Leveraged Employee Stock Ownership Plan);

     (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  (e) 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%.

     Effective  for  benefits  payable  to any  Participant  that  is not a
Transition Participant,  actuarial equivalence shall be determined using an
interest  rate  assumption  of 8% and using the Section  415/417  Mortality
Table  in  the  Ashland  Inc.  and  Affiliates   Pension  Plan.   Actuarial
equivalence shall be determined as of the Effective Retirement Date.

     (f) CHANGES IN STATUS.

     (1) Subject to the  applicable  provisions of paragraph  (d) 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  under  the  Incentive
Compensation Plan 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  under the
Incentive  Compensation Plan 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  under the  Incentive  Compensation
Plan.  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.

     5.02 LEVELS III, IV AND V.

     (a) GENERAL

     The Annual Retirement Income of a Transition Participant as defined in
Section 1.2  (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  under
the Incentive  Compensation Plan 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.
<TABLE>
<CAPTION>
------------------------------------------------------------ ---------------------------------------------------------
    Length of Participant's Service at Separation from                           Number of Years
                        Employment                                           (the Applicable Amount)
------------------------------------------------------------ ---------------------------------------------------------
<S>                                                          <C>
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
------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
     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. 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 any  permitted  optional  form under this Article V. 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 a lump sum payment
option, 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   in  the  Incentive
Compensation  Plan 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  in the
Incentive  Compensation Plan 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  in the  Incentive  Compensation
Plan at the Effective  Retirement  Date. The actuarial  reduction  shall be
made on the same basis as in the Ashland Inc. and  Affiliates  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  under  the  Incentive
Compensation Plan 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  under the
Incentive  Compensation Plan 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  under the  Incentive  Compensation
Plan.  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 payable under Sections 5.01 and 5.02
for a period of less than 12 months due to a  Participant's  attainment  of
age 62 or death will be payable on a pro-rata basis, with months taken as a
fraction of a year.

5.04     PAYMENT OPTIONS

     (a) ELECTION

     A Participant shall, subject to Sections 5.05 and 5.06, elect the form
in which such  benefit  shall be paid from among those  identified  in this
Section 5.04 and such election  shall be made at the time and in the manner
prescribed  by Ashland,  from time to time,  provided  that the election is
made before the  Participant's  Effective  Retirement  Date. Such election,
including  the  designation  of  any  contingent   annuitant  or  alternate
recipient under Sections  5.04(b)(4) or (5), shall be irrevocable except as
otherwise  set forth herein.  Notwithstanding  anything in the foregoing to
the  contrary,   any  Participant  who  makes  an  election  under  Section
5.04(b)(2)  shall make such  election  by the earlier of - (1) the date six
months  prior  to  Participant's  Effective  Retirement  Date;  or (2)  the
December 31 immediately  preceding the Participant's  Effective  Retirement
Date.  Such  deferral  election  shall be made in the manner  prescribed by
Ashland,  from time to time,  and shall be irrevocable as of the applicable
time identified  under Sections  5.04(a)(1) or (2). Until the time at which
an election becomes irrevocable, a Participant shall be able to change it.


     (b) OPTIONAL FORMS OF PAYMENT

     (1) LUMP SUM OPTION Except for the Transition  Participants  described
in Section 1.2, the normal form of distribution for the benefit provided by
the Plan shall be a single lump sum payment,  computed under the applicable
provisions of Article V. A  Participant's  benefit is paid as a lump sum on
the  Effective  Retirement  Date  (or  as  soon  thereafter  as  reasonably
possible),  unless a different election is made by the Participant pursuant
to  rules in the  Plan  and  rules  prescribed  by  Ashland.  A  Transition
Participant  may elect to receive the benefit under Article V as a lump sum
distribution.  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.  Such
lump sum shall be payable  within  thirty (30) days  following the later of
the Transition  Participant's  Effective  Retirement Date, or at such later
date as Ashland or its delegate may determine, in its sole discretion.

     (2) LUMP SUM  DEFERRAL  OPTION A  Participant  (including a Transition
Participant)  who is  eligible  to  receive a lump sum  distribution  under
5.04(b)(1)  shall be able to elect to defer all or a portion of the receipt
of the elected lump sum (in increments of such percentage or such amount as
may be  prescribed  by Ashland  or its  delegatee,  from time to time),  by
having the obligation to distribute such amount  transferred to the Ashland
Inc. Deferred Compensation Plan to be held thereunder in a notional account
and paid pursuant to the applicable provisions of such Plan, as they may be
amended from time to time;  provided,  however,  that the election to defer
such distribution shall be made at the time and in the manner prescribed in
Section 5.04(a)(1) and (2).


     (3) SINGLE LIFE ANNUITY A Participant  or Transition  Participant  may
elect to have such benefit paid in the form of equal  monthly  payments for
and during  such  Participant's  life,  with such  payments  ending at such
Participant's  death.  Payments  under  this  option  shall be  actuarially
equivalent to the benefit provided under Section 5.01 or 5.02, whichever is
applicable. In the case of a Transition Participant,  actuarial equivalence
is  determined on the basis of the  applicable  actuarial  assumptions  and
other  relevant  provisions  used for the same in the Pension  Plan. In the
case of all other Participants,  actuarial  equivalence is determined using
the assumptions identified in Section 5.01(e).

     (4) JOINT AND  SURVIVOR  INCOME  OPTION A  Participant  or  Transition
Participant  may elect to receive an actuarially  reduced  benefit  payable
monthly during the  Participant's  lifetime with payments to continue after
his  or  her  death  to  the  person  he  designates   (hereinafter  called
"contingent annuitant"), in an amount equal to (1) 100% of such actuarially
reduced benefit,  (2) 66 2/3% of such actuarially  reduced benefit,  or (3)
50% of such actuarially reduced benefit. Benefit payments under this option
shall  terminate  with the monthly  payment for the month in which occurred
the  date of death of the  later to die of the  Participant  and his or her
contingent annuitant.  The following additional  limitations and conditions
apply to this option:

     (A) The contingent annuitant shall be designated by the Participant in
writing  in such  form and at such  time as  Ashland  may from time to time
prescribe.   Before  the  Participant's   Effective  Retirement  Date,  the
Participant may change the contingent annuitant elected.

     (B) In the event of the death of the contingent annuitant prior to the
date as of which the election is irrevocable,  the Participant's  selection
of this option shall be void and the  Participant may change the contingent
annuitant  or  change  the  option  elected,   subject  to  the  applicable
limitations and conditions  applied to elections for the options  described
under 5.04(a)(1) and (2).

     (C) In the case of a Transition Participant,  actuarial equivalence is
determined on the basis of the applicable  actuarial  assumptions and other
relevant  provisions  used for the same in the Pension Plan. In the case of
all other  Participants,  actuarial  equivalence  is  determined  using the
assumptions identified in Section 5.01(e).

     (5)  PERIOD   CERTAIN   INCOME  OPTION  A  Participant  or  Transition
Participant  may elect to receive an actuarially  reduced  benefit  payable
monthly during his or her lifetime and terminating with the monthly payment
for the month in which his or her death occurs, with the provision that not
less than a total of 120 monthly payments shall be made in any event to him
or her and/or the person designated by him or her to receive payments under
this sub-paragraph (5) in the event of his or her death (hereinafter called
"alternate recipient"). If a Participant and his or her alternate recipient
die after the Effective  Retirement  Date,  but before the total  specified
monthly  payments  have been  made to such  Participant  and/or  his or her
alternate  recipient,  the commuted value of the remaining  unpaid payments
shall  be paid  in a lump  sum to the  estate  of the  later  to die of the
Participant  or his or her alternate  recipient.  The following  additional
limitations and conditions shall apply to this option:

     (A) The  alternate  recipient  shall be  designated  in writing by the
Participant  in such form and at such time as Ashland may from time to time
prescribe.   The   designation  of  an  alternate   recipient   under  this
sub-paragraph  (5) is  irrevocable  after the  Effective  Retirement  Date,
provided, however, a Participant may designate a new alternate recipient if
the one  first  designated  dies  before  the  Participant  and  after  the
Effective Retirement Date.

     (B) In the event of the death of the alternate  recipient prior to the
date as of which the election is irrevocable,  the Participant's  selection
of this option shall be void and the  Participant  may change the alternate
recipient  or  change  the  option  elected,   subject  to  the  applicable
limitations and conditions  applied to elections for the options  described
under 5.04(a)(1) and (2).

     (C)  Actuarial  equivalence  for  Transition  Participants  under this
sub-paragraph  (5)  shall be  determined  on the  basis  of the  applicable
actuarial  assumptions  and other relevant  provisions used for the same in
the  Pension  Plan.  In the  case  of  all  other  Participants,  actuarial
equivalence  is  determined  using the  assumptions  identified  in Section
5.01(e).

     5.05. PAYMENT OF SMALL AMOUNTS

     Unless a Transition  Participant or Participant  elects to receive his
or her benefit in a lump sum as provided  in Section  5.04,  in the event a
monthly benefit under this Plan,  payable to either a Participant or to his
or her contingent  annuitant,  alternate  recipient or surviving spouse, is
too  small (in the sole  judgment  of  Ashland)  to be paid  monthly,  such
benefit may be paid quarterly, semi-annually, or annually, as determined by
Ashland to be administratively convenient.

     5.06. SURVIVING BENEFITS

     (a) Except as otherwise  provided in Section 5.04 of this Plan, in the
event a Participant  receiving Annual Retirement Income benefits dies after
his or her  Effective  Retirement  Date, no  additional  benefits  shall be
payable  by  Ashland  under  this  Plan  to  such  deceased   Participant's
beneficiaries, survivors, or estate. (b) If a Participant while an Employee
dies while in active service with Ashland

     (1) at a time  when  the  Participant  is a Level I or II  participant
under  the  Incentive   Compensation   Plan,   regardless  of  whether  the
Participant is vested; or

     (2) after becoming  vested and eligible to receive a distribution  but
for not having  incurred a Termination of Employment but prior to making an
election  pursuant to Section 5.04(a) and said  Participant is a Level I -V
participant under the Incentive Compensation Plan; then such Employee shall
be deemed:

     (i) to have  elected to receive his or her benefits in the form of the
100% Joint & Survivor  retirement  income option and to have designated his
or her spouse as the  beneficiary  thereunder;  and

     (ii) to have  commenced  such benefit one (1) day prior to the date of
the Employee's death.

     The surviving  spouse  entitled to a benefit under this  paragraph (b)
may commence the benefit as of the first day of a month. Such benefit shall
be distributed as an actuarially  equivalent lump sum using the assumptions
for actuarial  equivalence in Section 5.01(e). The benefit must commence as
soon as possible after the deceased Participant would have attained age 62.
If the Participant were 62 or older at death,  then the distribution to the
surviving  spouse must  commence  as soon as  possible.  Distributions  are
subject to rules  prescribed by Ashland from time to time.

     (c) In the event a  Participant  dies after  making an election  under
Section  5.04(a) but prior to his or her Effective  Retirement  Date,  then
such Participant  shall be deemed to have commenced  distributions  one (1)
day prior to the date of death and payment shall be made under this Plan in
accordance with the Participant's election.

     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 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 under Ashland's  Incentive  Compensation Plan,
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.

     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 - ss.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 - ss.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 1st day of July, 2003.


ATTEST:                                  ASHLAND INC.



 /s/ Richard P. Thomas         By:  /s/ Susan Esler
--------------------------     -----------------------------------
     Secretary                 Vice President Human Resources -
                               Programs and Services









</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>6
<FILENAME>pension.txt
<DESCRIPTION>EX. 10.4 PENSION
<TEXT>

                                                                Exhibit 10.4
                    ASHLAND INC. NONQUALIFIED EXCESS BENEFIT
                         PENSION PLAN - 2003 RESTATEMENT
                     July 1, 2003 and as amended thereafter
--------------------------------------------------------------------------------

     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,  Ashland adopted the Ashland Oil, Inc.  Nonqualified  Pension
Plan as of  September  24,  1975  (which is now  called  the  Ashland  Inc.
Nonqualified  Excess  Benefit  Pension Plan,  otherwise  referred to as the
"Plan"),  for the purpose of providing  benefits  for certain  employees in
excess of the aforesaid limitations;

     WHEREAS,  the Plan was amended and completely  restated as of July 21,
1977;

     WHEREAS, the Plan was amended and completely restated as of October 1,
1982;

     WHEREAS,  the Plan was amended and completely  restated as of November
3, 1988;

     WHEREAS,  the Plan was amended and completely restated as of September
19, 1996;

     WHEREAS,  Ashland  has  retained  the  authority  to  make  additional
amendments to or terminate the Plan;

     WHEREAS, Ashland desires to further amend and restate the Plan and, as
so amended, to continue the Plan in full force and effect;

     NOW,  THEREFORE,  effective July 1, 2003,  Ashland does hereby further
amend and  restate  the 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  which is not an  excess
benefit plan shall be maintained primarily for a select group of management
or highly compensated employees.

<PAGE>


     2.  ELIGIBILITY.  Subject to Section 11, the Plan shall apply to those
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 are  hereinafter  referred to jointly and severally as
"Affected  Plans");  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.

     3. BENEFIT AMOUNT.


     (i)  COMPUTATION IF NOT ELIGIBLE FOR RETIREMENT  GROWTH  ACCOUNT.  The
computation  described in this  paragraph  (i) applies to retirees that are
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;

<PAGE>

     (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  nonforfeitable  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 retirees that are
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

<PAGE>


     (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  nonforfeitable  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.  Subject to Section 6, the benefit  computed under  paragraph
(i) or (ii) of  this  Section  3 shall  commence  or  otherwise  be paid or
transferred  pursuant to the provisions in Sections 4 or 5, effective as of
the date as of which  payments to such retiree  commence under the Affected
Plans.

     4. PAYMENT OPTIONS.

     (i) Election. A retiree eligible under Section 2 for the benefit under
Section 3 shall,  subject to Sections 5 and 6, elect the form in which such
benefit  shall be paid from among those  identified  in this  Section 4 and
such  election  shall be made at the time and in the manner  prescribed  by
Ashland,  from time to time,  provided that the election is made before the
first  day  of  the  month  following  such  retiree's   termination   from
employment.  Such  election,  including the  designation  of any contingent
annuitant  or  alternate  recipient  under  sub-paragraphs  (D)  or  (E) of
paragraph (ii) of this Section 4, shall be irrevocable  except as otherwise
set  forth  herein.  Notwithstanding  anything  in  the  foregoing  to  the
contrary,  any  retiree who makes an election  under  sub-paragraph  (B) of
paragraph (ii) of this Section 4 shall make such election by the earlier of
-
<PAGE>

     (A) the date six months prior to the first day of the month  following
such retiree's termination from employment; or

     (B) the December 31  immediately  preceding the first day of the month
following such retiree's  termination from employment.  Such election under
sub-paragraph  (B) of paragraph (ii) of this Section 4 shall be made in the
manner  prescribed by Ashland,  from time to time, and shall be irrevocable
as of the applicable time identified under (A) or (B) of this paragraph (i)
of Section 4. Until the time at which such election becomes irrevocable, an
eligible retiree shall be able to change it.

     (ii) OPTIONAL FORMS OF PAYMENT.

     (A) LUMP SUM OPTION. Notwithstanding any provisions of Section 3(i) to
the  contrary,  a retiree in an eligible  class may elect to receive all of
the benefit under Section 3 as a lump sum distribution.  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).  The normal form of payment for a benefit
under Section 3(ii) shall be a single lump sum.

     (B) LUMP SUM DEFERRAL  OPTION.  A retiree who is eligible to receive a
lump sum  distribution  under  sub-paragraph  (A) of this paragraph (ii) of
Section  4 and who was part of a select  group  of  management  or a highly
compensated  employee,  shall be able to elect to defer all or a portion of
the receipt of the elected lump sum (in  increments  of such  percentage or
such amount as may be prescribed by Ashland or its delegatee,  from time to
time),  by having the obligation to distribute  such amount  transferred to
the Ashland Inc.  Deferred  Compensation  Plan to be held  thereunder  in a
notional  account and paid  pursuant to the  applicable  provisions of such
Plan, as they may be amended from time to time; provided, however, that the
election  to defer such  distribution  shall be made at the time and in the
manner prescribed in paragraph (i) of this Section 4.

     (C) SINGLE LIFE ANNUITY.  A retiree  eligible  under Section 2 for the
benefit  under Section 3 may elect to have such benefit paid in the form of
equal  monthly  payments  for and during  such  retiree's  life,  with such
payments  ending at such  retiree's  death.  Before such  election  becomes
irrevocable as provided  under  paragraph (i) of Section 4, the retiree may
change  the  option  elected,  subject to the  applicable  limitations  and
conditions   applied  to  elections   for  the  options   described   under
sub-paragraphs  (A) and (B) of this  paragraph  (ii) of Section 4. Payments
under this option shall be actuarially  equivalent to the benefit  provided
under  Section  3,  determined  on the  basis of the  applicable  actuarial
assumptions and other relevant  provisions used for the same in the Ashland
Pension Plan.

<PAGE>

     (D) JOINT AND SURVIVOR INCOME OPTION. A retiree eligible under Section
2 for the  benefit  under  Section 3 may elect to  receive  an  actuarially
reduced benefit payable monthly during the retiree's lifetime with payments
to continue after his death to the person he designates (hereinafter called
"contingent annuitant"), in an amount equal to (1) 100% of such actuarially
reduced benefit,  (2) 66 2/3% of such actuarially  reduced benefit,  or (3)
50% of such actuarially reduced benefit. Benefit payments under this option
shall  terminate  with the monthly  payment for the month in which occurred
the date of death of the  later to die of the  retiree  and his  contingent
annuitant.  The following  additional  limitations and conditions  apply to
this option:

     (a) The  contingent  annuitant  shall be  designated by the retiree in
writing  in such  form and at such  time as  Ashland  may from time to time
prescribe.

     (b) In the event the  contingent  annuitant dies prior to the date the
election of this optional form of benefit  becomes  irrevocable as provided
under  paragraph (i) of Section 4, the  retiree's  selection of this option
shall  be void.  Before  the date the  election  of this  optional  form of
benefit  becomes  irrevocable as provided under paragraph (i) of Section 4,
the  retiree  may  change  the  contingent  annuitant  or change the option
elected,  subject to the applicable  limitations and conditions  applied to
elections for the options  described  under  sub-paragraphs  (A) and (B) of
this paragraph (ii) of Section 4.

     (c) In the  event of the  death of the  retiree  prior to the date the
election is irrevocable as provided under  paragraph (i) of Section 4, such
retiree shall be deemed to have terminated employment on the day before his
death (for reasons  other than death) and survived  until the day after the
date as of which the benefit he elected under this  sub-paragraph (D) would
have commenced.

     (d)  Actuarial  equivalence  under  this  sub-paragraph  (D)  shall be
determined on the basis of the applicable  actuarial  assumptions and other
relevant provisions used for the same in the Ashland Pension Plan.

<PAGE>

     (E) PERIOD CERTAIN INCOME OPTION.  A retiree  eligible under Section 2
for the benefit under Section 3 may elect to receive an actuarially reduced
benefit  payable  monthly  during his  lifetime  and  terminating  with the
monthly payment for the month in which his death occurs, with the provision
that not less  than a total of 120  monthly  payments  shall be made in any
event to him and/or the person  designated by him to receive payments under
this  sub-paragraph  (E) in the  event  of his  death  (hereinafter  called
"alternate  recipient").  Such alternate  recipient  shall be designated in
writing by the  retiree  in such form and at such time as Ashland  may from
time to time prescribe.  If a retiree and his alternate recipient die after
the date as of which payments have commenced but before the total specified
monthly  payments  have  been made to such  retiree  and/or  his  alternate
recipient,  the commuted  value of the remaining  unpaid  payments shall be
paid in a lump sum to the estate of the later to die of the  retiree or his
alternate recipient.  The following  additional  limitations and conditions
shall apply to this option:

     (a) A retiree may designate a new alternate recipient if the one first
designated  dies before the retiree and after the date the election of this
optional form of benefit became  irrevocable under paragraph (i) of Section
4. In the event the alternate recipient dies prior to the date the election
becomes  irrevocable  as  provided  under  paragraph  (i) of Section 4, the
retiree's  selection  of this  option  shall be void.  Before  the date the
election of this optional form of benefit  becomes  irrevocable as provided
under  paragraph  (i) of Section 4, the  retiree  may change the  alternate
recipient  or  change  the  option  elected,   subject  to  the  applicable
limitations and conditions  applied to elections for the options  described
under sub-paragraphs (A) and (B) of this paragraph (ii) of Section 4.

     (b) In the  event of the  death of the  retiree  prior to the date the
election is irrevocable as provided under  paragraph (i) of Section 4, such
retiree shall be deemed to have terminated employment on the day before his
death (for reasons  other than death) and survived  until the day after the
date as of which the benefit he elected under this  sub-paragraph (E) would
have commenced.

     (c)  Actuarial  equivalence  under  this  sub-paragraph  (E)  shall be
determined on the basis of the applicable  actuarial  assumptions and other
relevant provisions used for the same in the Ashland Pension Plan.

     (F) DEATH BEFORE PAYMENT. Subject to Section 6, in the event a retiree
eligible  under Section 2 for the benefit under Section 3 dies after having
made an election of an optional form of payment under this  paragraph  (ii)
of Section 4 before the date such election  became  irrevocable as provided
under  paragraph  (i) of  Section 4, such  retiree  shall be deemed to have
terminated  employment  on the day before his death (for reasons other than
death) and  survived  until the day after the date as of which the optional
form of payment he elected  would have  commenced and payment shall then be
made under the Plan in accordance with such retiree's election.


<PAGE>

     5. PAYMENT OF SMALL AMOUNTS.  Unless such retiree  receives his or her
benefit  in a lump sum as  provided  in  Section  4, in the event a monthly
benefit under this Plan,  payable to either a retiree or to his  contingent
annuitant,  alternate  recipient or surviving  spouse, is too small (in the
sole  judgment  of Ashland) to be paid  monthly,  such  benefit may be paid
quarterly,  semi-annually,  or  annually,  as  determined  by Ashland to be
administratively convenient.

     6.  SURVIVOR  BENEFIT.  In the event a retiree who was eligible  under
Section 2 for the  benefit  under  Section  3(i) dies,  leaving a surviving
spouse, before electing an optional form of payment under paragraph (ii) of
Section  4  and  before  the  date  such  an  election  would  have  become
irrevocable  under  paragraph  (i) of Section 4, then such retiree shall be
deemed to have - (i)  elected  the joint and 100%  survivor  income  option
under  sub-paragraph  (D) of  paragraph  (ii) of  Section 4; (ii) named his
spouse as the 100% contingent annuitant; (iii) terminated employment on the
day before his death (for  reasons  other than  death);  and (iv)  survived
until the day after the date as of which such benefit would have commenced.
In the event a retiree  who was  eligible  under  Section 2 for the benefit
under Section 3(ii) dies,  leaving a surviving  spouse,  before electing an
optional form of payment under  paragraph  (ii) of Section 4 and before the
date such an election would have become  irrevocable under paragraph (i) of
Section 4, then such  surviving  spouse  shall be  entitled to the lump sum
amount of the  benefit as  calculated  under  Section  3(ii) and payable no
later than the time such a benefit  would have to be paid under the Ashland
Pension  Plan.  If  such a  retiree  dies  under  the  foregoing  described
circumstances  without  leaving a  surviving  spouse,  then the  benefit so
computed under Section 3(ii) shall be paid to the  beneficiary to whom such
retiree's  Retirement  Growth Account  balance is payable under the Ashland
Pension Plan.

     7. 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.

<PAGE>


     8.  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.

     9.  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.

     10. 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.

<PAGE>


     (iii) Except as expressly allowed pursuant to Sections 3 and 4 of this
Plan in regard  to the form of  benefit  option  and in  connection  with a
division of property under a domestic relations proceeding under state law,
no right or interest of of any person  entitled to a benefit under the Plan
shall be subject to involuntary  alienation,  assignment or transfer of any
kind. A person entitled to a benefit under this Plan may voluntarily assign
his or her rights under the Plan.  Ashland,  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 Ashland Pension Plan.  Ashland or any affiliate
may,  however,  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.

<PAGE>


     (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.

     (vi) The Plan described herein shall amend and supersede, as of July
1, 2003,  all provisions in the Ashland Inc.  Nonqualified  Pension Plan as
Amended,  dated as of  September  19, 1996,  except as  otherwise  provided
herein  and  further  excepting  that the  rights of former  employees  who
terminated employment,  retired, or became disabled prior to the day before
the effective  date hereof shall be governed by the terms of the Plan as in
effect  at the  time of such  termination  of  employment,  retirement,  or
disability, unless otherwise provided herein.

     11. 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  11), 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 11, Change in Control shall be deemed
to occur (1) upon  approval  of the  shareholders  of  Ashland  (or if such
approval  is not  required,  upon the  approval  of the  Board)  of (A) any
consolidation or merger of Ashland, other than a consolidation or merger of
Ashland into or with a direct or indirect wholly-owned subsidiary, in which
Ashland is not the continuing or surviving corporation or pursuant to which
shares of Common Stock would be converted  into cash,  securities  or other
property  other  than a  merger  in  which  the  holders  of  Common  Stock
immediately prior to the merger will have the same proportionate  ownership
of common stock of the surviving corporation  immediately after the merger,
(B) any sale, lease,  exchange,  or other transfer (in one transaction or a
series of related  transactions) of all or substantially  all the assets of
Ashland, 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 15% of Ashland's  Common Stock  outstanding at the time,  without
the  approval  of the  Board,  or (3) at any time  during  a period  of two
consecutive  years,  individuals  who  at  the  beginning  of  such  period
constituted  the Board shall cease for any reason to  constitute at least a
majority  thereof,  unless the election or the  nomination  for election by
Ashland's shareholders of each new director during such two-year period was
approved by a vote of at least  two-thirds of the  directors  then still in
office  who  were  directors  at the  beginning  of such  two-year  period.
Notwithstanding the foregoing, any transaction,  or series of transactions,
that shall  result in the  disposition  of  Ashland's  interest in Marathon
Ashland Petroleum LLC, including without limitation any transaction arising
out of that certain Put/Call,  Registration Rights and Standstill Agreement
dated January 1, 1998 among Marathon Oil Company, USX Corporation,  Ashland
and Marathon Ashland Petroleum LLC, as amended from time to time, shall not
be deemed to constitute a Change in Control.

<PAGE>


     12 (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 12) 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 - ss.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.

<PAGE>


     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.

<PAGE>


     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 - ss.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 1st day of July, 2003.


ATTEST:                            ASHLAND INC.



/s/ Richard P. Thomas              By: /s/ Susan Esler
------------------------           --------------------------------
  Secretary                        Vice President Human Resources -
                                   Programs and Services


<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>7
<FILENAME>ex12.txt
<DESCRIPTION>EX. 12
<TEXT>

                                                                  EXHIBIT 12

                                  ASHLAND INC.

                COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

                                  (In millions)

<TABLE>
<CAPTION>
                                                                                                               Nine months ended
                                                                     Years ended September 30                        June 30
                                                      ----------------------------------------------------   --------------------
                                                          1998       1999       2000       2001       2002       2002       2003
                                                      --------   --------   --------   --------   --------   --------   ---------
<S>                                                   <C>        <C>        <C>        <C>        <C>        <C>        <C>
EARNINGS
--------

Income (loss) from continuing operations              $    172   $    283   $    272   $    390   $    115   $     75   $     33
Income taxes                                               108        188        179        266         68         47         17
Interest expense                                           133        141        189        160        133        100         94
Interest portion of rental expense                          39         34         39         40         35         26         23
Amortization of deferred debt expense                        1          1          2          2          2          2          1
Distributions in excess of (less than) earnings
    of unconsolidated affiliates                           (62)       (11)      (112)       (91)        20        (21)       (55)
                                                      --------   --------   --------   --------   --------   --------   ---------
                                                      $    391   $    636   $    569   $    767   $    373   $    229   $    113
                                                      ========   ========   ========   ========   ========   ========   =========


FIXED CHARGES
-------------

Interest expense                                      $    133   $    141   $    189   $    160   $    133   $    100   $     94
Interest portion of rental expense                          39         34         39         40         35         26         23
Amortization of deferred debt expense                        1          1          2          2          2          2          1
                                                      --------   --------   --------   --------   --------   --------   ---------
                                                      $    173   $    176   $    230   $    202   $    170   $    128   $    118
                                                      ========   ========   ========   ========   ========   ========   =========

RATIO OF EARNINGS TO FIXED CHARGES                        2.26       3.61       2.47       3.80       2.19       1.79       0.96

</TABLE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>8
<FILENAME>ex311.txt
<DESCRIPTION>EX. 31.1 CEO CERT.
<TEXT>


                                                        Exhibit 31.1

                               CERTIFICATION
                               -------------

Statement  Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of 2002 by
Chief  Executive  Officer  Regarding  Facts and  Circumstances  Relating to
Exchange Act Filings.

I, James J. O'Brien, Chief Executive Officer of Ashland Inc., certify that:

1.       I have  reviewed  this  quarterly  report on Form 10-Q of  Ashland
         Inc.;

2.       Based on my knowledge,  this quarterly report does not contain any
         untrue  statement  of a material  fact or omit to state a material
         fact  necessary  to make  the  statements  made,  in  light of the
         circumstances   under  which  such   statements   were  made,  not
         misleading  with respect to the period  covered by this  quarterly
         report;

3.       Based  on  my  knowledge,  the  financial  statements,  and  other
         financial  information  included in this quarterly report,  fairly
         present in all material respects the financial condition,  results
         of operations and cash flows of the registrant as of, and for, the
         periods presented in this quarterly report;

4.       The registrant's  other certifying  officers and I are responsible
         for   establishing   and  maintaining   disclosure   controls  and
         procedures  (as defined in Exchange Act Rules 13a-15 and 15d-15(e)
         for the registrant and have:

a)       Designed such disclosure  controls and procedures,  or caused such
         disclosure  controls  and  procedures  to be  designed  under  our
         supervision,  to ensure that material  information relating to the
         registrant, including its consolidated subsidiaries, is made known
         to us by others  within those  entities,  particularly  during the
         period in which this quarterly report is being prepared;

b)       Evaluated  the   effectiveness  of  the  registrant's   disclosure
         controls  and   procedures   and  presented  in  this  report  our
         conclusions about the effectiveness of the disclosure controls and
         procedures,  as of the end of the period covered by this quarterly
         report based on such evaluation; and

c)       Disclosed in this quarterly  report any change in the registrant's
         internal control over financial reporting that occurred during the
         registrant's  most recent fiscal quarter that occurred  during the
         registrant's most recent fiscal quarter (the  registrant's  fourth
         fiscal  quarter  in  the  case  of  an  annual  report)  that  has
         materially affected, or is reasonably likely to materially affect,
         the registrant's internal control over financial reporting; and

5.       The registrant's other certifying officers and I have disclosed,
         based on our most recent evaluation of internal control over
         financial reporting, to the registrant's auditors and the audit
         committee of registrant's board of directors (or persons
         performing the equivalent functions):

a)       All significant deficiencies and material weaknesses in the design
         or operation of internal  control over financial  reporting  which
         are reasonably likely to adversely affect the registrant's ability
         to record,  process,  summarize and report financial  information;
         and

b)       Any fraud,  whether or not material,  that involves  management or
         other  employees who have a significant  role in the  registrant's
         internal control over financial reporting.

Date: August 13, 2003

                           /s/ James J. O'Brien
                          -------------------------
                          Chief Executive Officer


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>9
<FILENAME>ex312.txt
<DESCRIPTION>EX. 31.2 CFO CERT.
<TEXT>

                                                        Exhibit 31.2


                               CERTIFICATION

Statement  Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of 2002 by
Chief  Financial  Officer  Regarding  Facts and  Circumstances  Relating to
Exchange Act Filings.

I, J. Marvin Quin, Chief Financial Officer of Ashland Inc., certify that:

1.       I have reviewed this quarterly report on Form 10-Q of Ashland Inc.;

2.       Based on my  knowledge,  this  report  does not contain any untrue
         statement  of a  material  fact or omit to state a  material  fact
         necessary  to  make  the   statements   made,   in  light  of  the
         circumstances   under  which  such   statements   were  made,  not
         misleading with respect to the period covered by this report;

3.       Based  on  my  knowledge,  the  financial  statements,  and  other
         financial  information included in this report,  fairly present in
         all  material  respects  the  financial   condition,   results  of
         operations  and cash flows of the  registrant  as of, and for, the
         periods presented in this report;

4.       The registrant's  other certifying  officers and I are responsible
         for   establishing   and  maintaining   disclosure   controls  and
         procedures  (as defined in Exchange Act Rules 13a-15 and 15d-15(e)
         for the registrant and have:

a)       Designed such disclosure  controls and procedures,  or caused such
         disclosure  controls  and  procedures  to be  designed  under  our
         supervision,  to ensure that material  information relating to the
         registrant, including its consolidated subsidiaries, is made known
         to us by others  within those  entities,  particularly  during the
         period in which this report is being prepared;

b)       Evaluated  the   effectiveness  of  the  registrant's   disclosure
         controls  and   procedures   and  presented  in  this  report  our
         conclusions about the effectiveness of the disclosure controls and
         procedures,  as of the end of the period  covered  by this  report
         based on such evaluation; and

c)       Disclosed in this report any change in the  registrant's  internal
         control  over  financial   reporting  that  occurred   during  the
         registrant's  most recent fiscal quarter that occurred  during the
         registrant's most recent fiscal quarter (the  registrant's  fourth
         fiscal  quarter  in  the  case  of  an  annual  report)  that  has
         materially affected, or is reasonably likely to materially affect,
         the registrant's internal control over financial reporting; and

5.       The registrant's  other certifying  officers and I have disclosed,
         based on our most  recent  evaluation  of  internal  control  over
         financial  reporting,  to the registrant's  auditors and the audit
         committee  of   registrant's   board  of  directors   (or  persons
         performing the equivalent functions):

a)       All significant deficiencies and material weaknesses in the design
         or operation of internal  control over financial  reporting  which
         are reasonably likely to adversely affect the registrant's ability
         to record,  process,  summarize and report financial  information;
         and

b)       Any fraud,  whether or not material,  that involves  management or
         other  employees who have a significant  role in the  registrant's
         internal control over financial reporting.

Date: August 13, 2003

                               /s/ J. Marvin Quin
                               -----------------------
                               Chief Financial Officer



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>10
<FILENAME>ex32.txt
<DESCRIPTION>EX. 32 SEC. 906 CERT.
<TEXT>
                                                        Exhibit 32

                               ASHLAND INC.


                         CERTIFICATION PURSUANT TO
                          18 U.S.C. SECTION 1350,
                           AS ADOPTED PURSUANT TO
               SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly  Report of Ashland Inc. (the "Company") on
Form 10-Q for the period  ended June 30, 2003 as filed with the  Securities
and  Exchange  Commission  on the date hereof (the  "Report"),  each of the
undersigned,  James J. O'Brien, Chief Executive Officer of the Company, and
J. Marvin Quin, Chief Financial Officer of the Company,  certify,  pursuant
to 18 U.S.C.  Section  1350,  as adopted  pursuant  to  Section  906 of the
Sarbanes-Oxley Act of 2002, to the best of his knowledge, that:

(1)      The Report fully complies with the  requirements  of section 13(a)
         or 15(d) of the Securities Exchange Act of 1934; and

(2)      The information  contained in the Report fairly  presents,  in all
         material  respects,   the  financial   condition  and  results  of
         operations of the Company.



/s/ James J. O'Brien
James J. O'Brien
Chief Executive Officer
August 13, 2003

/s/ J. Marvin Quin
J. Marvin Quin
Chief Financial Officer
August 13, 2003


A signed  original of this  written  statement  required by Section 906 has
been  provided to Ashland  Inc.  and will be retained by Ashland  Inc.  and
furnished to the Securities and Exchange Commission or staff upon request.


</TEXT>
</DOCUMENT>
</SUBMISSION>
