EXHIBIT 4
ASHLAND INC.
DEFERRED COMPENSATION PLAN FOR EMPLOYEES (2005)
(EFFECTIVE AS OF JANUARY 1, 2005)
1.
PURPOSE
The Ashland Inc.
Deferred Compensation
Plan for Employees (2005)
(the "Plan") is
maintained
primarily for the purpose of providing an
opportunity to defer
compensation for
retirement or other future purposes
to a select group of management or highly compensated employees (including
former employees that met these criteria when employed). The
obligations of
the Company
hereunder constitute a mere promise 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 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
amended and
restated as of April
1, 2003 (the
"Former
Plan"). Compensation 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 Compensation deferred
under the
Former Plan shall
include all income,
gains and losses
connected to such
Compensation.
The rules,
terms and conditions of this Plan shall apply to
Compensation deferred
after December 31,
2004, including any
Election to
defer such
Compensation made in
2004. For this purpose, the Compensation
deferred after December 31, 2004 shall include all income, gains
and losses
connected to such Compensation.
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 10, 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.
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.
(f) "Code" means the Internal Revenue Code of 1986, as amended.
(g) "Committee" means the Personnel and Compensation Committee of
the Board or its designee.
(h) "Common Stock"
means the common
stock, $1.00 par
value, of
Ashland Inc.
(i) "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.
(j) "Company" means Ashland Inc., its divisions, subsidiaries and
affiliates. "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.
(k) "Compensation" means any employee compensation determined by
the Committee to be properly deferrable under the Plan.
(l) "Compensation
Account(s)" means the Retirement Account and/or
the In-Service Account(s).
(m) "Corporate
Human
Resources"
means the Corporate Human
Resources Department of the Company.
(n) "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.
(o) "Deferred
Compensation" means the Compensation elected by the
Participant to be deferred pursuant to the Plan.
(p) "Disability" means that a Participant is either:
1. 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; or
2.
Receiving income
replacement
benefits for a period of at
least three
months under an accident and health plan
covering employees
of the Company 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.
(q) "Election"
means a Participant's delivery of a notice of
election to defer
payment of all or a
portion of his or her
Compensation
under the terms of the Plan. Such notice shall also
include instructions
specifying the time the deferred Compensation will be paid and the
form in
which it 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.
(r) "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.
(s) "Employee
Savings Plan" means the Ashland Inc. Employee
Savings Plan, as it now exists or as it may hereafter be
amended.
(t) "Excess
Payments" means payments made to a Participant
pursuant to the Plan and the Excess Plan.
(u) "Excess
Plan" means the Ashland Inc. Nonqualified Excess
Benefit Pension Plan, as it now exists or as it may hereafter be
amended.
(v) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(w) "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.
(x) "In-Service
Account" means the account(s) to which the
Participant's
Deferred
Compensation is
credited
and from which
distributions are made.
(y) "Key Employee"
means any Employee who
at any time during the
Plan Year was -
1. an
officer of the Company having annual compensation greater
than $ 130,000 (as adjusted under section 416(i)(1) of the
Code), provided
that no more
than 50 individuals may be
considered an officer
(or if less,
the greater of 3 or
10
percent of the employees);
2. a
5-percent owner of the Company; or
3. a
1-percent owner of the
Company with annual
compensation
exceeding $150,000.
For this purpose, annual compensation means compensation within the
meaning
of section 415(c)(3) of the Code.
(z) "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.
(aa)
"Performance-Based
Compensation" means
Compensation
that
meets
requirements
specified by
the Secretary of the Treasury.
Performance-Based
Compensation will
include the attributes that it is
variable, contingent
on the satisfaction of preestablished metrics and is
not readily
ascertainable
at the time of the Election to defer such
compensation under Section 8(b).
(bb) "Plan" means this Ashland Inc. Deferred Compensation Plan
for
Employees (2005) as it now exists or as it may hereafter be
amended.
(cc) "Plan Year" means the calendar year. The first Plan Year of
the Plan is 2005.
(dd) "Retirement
Account" means the account(s) to which the
Participant's
Deferred
Compensation is
credited
and from which
distributions are made.
(ee) "Secretary of the
Treasury" or
"Treasury" means the
United
States Department of Treasury.
(ff) "SERP" means the Ashland Inc. Supplemental Early Retirement
Plan for Certain
Employees,
as it now exists or as
it may hereafter
be
amended.
(gg) "SERP Payments" means payments made to a Participant
pursuant
to the Plan and the SERP.
(hh) "Stock Unit(s)" means the share equivalents credited to the
Common Stock Fund of a
Participant's
Compensation
Account pursuant to
Section 6.
(ii) "Termination"
means termination of services as an
Employee
for any reason other than retirement.
(jj) "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 (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
