EXHIBIT 10.3
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.
(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.
(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
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 (o
