EXHIBIT 4
ASHLAND INC.
DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS (2005)
(Effective as of January 1, 2005)
ARTICLE I. GENERAL
PROVISIONS
1.
PURPOSE
The purpose of this Ashland Inc. Deferred Compensation Plan For
Non-Employee Directors (2005) (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. The obligations of
the
Company hereunder constitute a mere promise to make the payments
provided
for in this Plan. No Director, 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 the Company. To the extent
any
Participant has a right to receive payments from the Company under
this
Plan, such right shall be no greater than the right of any
unsecured
general creditor of the Company.
This Plan is a
replacement of the prior Ashland Inc. Deferred
Compensation Plan for Non-Employee Directors amended as of April 1,
2003
(the "Former Plan"). Fees deferred under the Former Plan shall
remain
subject to all of the rules, terms and conditions in effect under
the
Former Plan as of December 31, 2004. For this purpose, the Fees
deferred
under the Former Plan shall include all income, gains and losses
connected
to such Deferred Fees.
The rules, terms and conditions of this Plan shall apply to
Fees
deferred after December 31, 2004, including any Election to defer
such Fees
made in 2004. For this purpose, the Fees deferred after December
31, 2004
shall include all income, gains and losses connected to such
Fees.
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.
The definition of Change in Control as written
hereinabove shall remain in effect until the Secretary of the
Treasury
prescribes a definition that is inconsistent with the definition in
the
Plan. If a definition is prescribed that is inconsistent with
the
definition in the Plan, such prescribed definition shall supercede
the one
in the Plan. If such definition is not inconsistent with the
definition in
the Plan, then the Plan's definition shall remain in effect.
(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.
"Company" shall also include any direct successor in interest to
Ashland
Inc. that results from a corporate reorganization connected with
divesting
the interest Ashland Inc. has in Marathon Ashland Petroleum
LLC.
(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
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 that a Participant is unable to engage
in
any substantial gainful activity because of a medically
determinable
physical or mental impairment that is expected to result in death
or last
for a continuous period of 12 or more months.
(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, under
the terms of the Plan. Such notice shall also include
instructions
specifying the time and form under which the Deferred Fees will be
paid.
Such elections shall be irrevocable except as otherwise provided in
the
Plan or pursuant to Treasury guidance. Elections shall be made
and
delivered as prescribed by the Committee or the Company.
(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.
(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) "Performance-Based Fees" mean Fees that meet requirements
specified by the Secretary of the Treasury. Performance-Based Fees
will
include the attributes that they are variable, contingent on
the
satisfaction of preestablished metrics and are not readily
ascertainable at
the time of the election.
(z) "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.
(aa) "Plan" means this Ashland Inc. Deferred Compensation Plan
For
Non-Employee Directors (2005) as it now exists or may hereafter be
amended.
(bb) "Secretary of the Treasury" or "Treasury" means the United
States Department of Treasury.
(cc) "Stock Account" means an account by that name established
pursuant to Article III, Section 1,which is a subset of the
Deferral
Account.
(dd) "Stock Unit(s)" means the share equivalents credited to a
Participant's Stock Account pursuant to Article III, Section 1.
(ee) "Termination" means retirement from the Board or
termination
of service as a Director for any other reason.
(ff) "Unforeseeable Emergency" means a severe financial
hardship
of a Participant because of -
1.
An illness
or accident of the Participant, the Participant's
spouse or dependent
(as defined in Internal Revenue Code section
152(a));
2.
A loss of the
Participant's property due to casualty; or
3.
Such other similar extraordinary unforeseeable circumstances
because of events beyond the control of the Participant.
The meaning of Unforeseeable Emergency shall be interpreted and
applied in
accordance with applicable guidance that may be issued by the
Treasury.
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 othe
