Ashland Hercules Pension Plan

Schedule C

BetzDearborn, Inc. Employees

Summary Plan Description

Publication Date: January 1, 2014

TABLE OF CONTENTS

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ABOUT THIS BOOKLET .............................................................................................................................. 1

PLAN MEMBERSHIP ................................................................................................................................... 1 Eligibility .................................................................................................................................................. 1 Re-employment Of A Member ................................................................................................................ 2

CONTRIBUTIONS ........................................................................................................................................ 2

SERVICE ....................................................................................................................................................... 2 Direct Rollover of Lump Sum Distributions ......................................................................................... 2 Automatic Rollover ................................................................................................................................. 3

WHEN YOU CAN RETIRE ............................................................................................................................ 3 Normal Retirement .................................................................................................................................. 3 Early Retirement ..................................................................................................................................... 3 Special Early Retirement ........................................................................................................................ 4 Postponed Retirement............................................................................................................................ 4

Disability Retirement .............................................................................................................................. 4

RETIREMENT INCOME BENEFITS ............................................................................................................ 4 Normal Retirement Benefits................................................................................................................... 4 Early Retirement Benefits ...................................................................................................................... 6 Special Early Retirement Benefits — The “Rule of 85” ....................................................................... 6 Postponed Retirement Benefits ............................................................................................................ 7 Disability Benefits ................................................................................................................................... 7

TYPES OF RETIREMENT INCOME ............................................................................................................ 7 Standard Form Of Payment ................................................................................................................... 7

Not Married.......................................................................................................................................................... 7 Married – 50% Joint And Survivor Annuity ...................................................................................................... 7

Survivor Benefits .................................................................................................................................... 8 Optional Forms Of Payment .................................................................................................................. 8 Electing A Benefit Form of Payment ..................................................................................................... 9 Possible Benefit Payment Restrictions ................................................................................................ 9

VESTING ..................................................................................................................................................... 10

CLAIM PROCEDURES ............................................................................................................................... 10 How To Apply For Benefits .................................................................................................................. 10 Notice of Claim Denial/Right of Appeal .............................................................................................. 10

Initial Claim – Notice of Denial ........................................................................................................................ 10 Appeal of Denied Claim ................................................................................................................................... 10

PLAN INFORMATION ................................................................................................................................ 12 Plan Sponsor ......................................................................................................................................... 12

Plan Administrator ................................................................................................................................ 12 Plan Identification ................................................................................................................................. 12 Plan Year ................................................................................................................................................ 12 Trust Fund ............................................................................................................................................. 12 Legal Service ......................................................................................................................................... 12 Participants’ Rights .............................................................................................................................. 12 Plan Interpretation/Administration ...................................................................................................... 13 Plan Amendment/Termination ............................................................................................................. 13 Top-Heavy Provisions .......................................................................................................................... 14 PBGC Insurance .................................................................................................................................... 14 Assignment of Benefits ........................................................................................................................ 14 Authority to Delegate ............................................................................................................................ 14 Elections and Notices ........................................................................................................................... 14

TABLE OF CONTENTS

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Applicable Law ...................................................................................................................................... 14

APPENDIX A ............................................................................................................................................... 15

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ABOUT THIS BOOKLET This Summary Plan Description (“SPD”) summarizes the provisions of the Ashland Hercules Pension Plan (the “Plan”) for employees of Ashland, Inc. and/or Hercules, Inc., or any of its subsidiaries or affiliates (the “Company”) who participate in Schedule C of the Plan. This SPD is effective January 1, 2014. This SPD describes benefits earned under Schedule C, Part 1, of the Plan. If a Participant or member has accrued a benefit under Schedules A, B, D, or E of Part 1 of this Plan, such Participant/member must refer to the applicable SPD for that Schedule of benefits. The Pension Plan of Hercules Incorporated (the “Hercules Pension Plan”) was originally effective January 1, 1913. The Ashland, Inc. and Affiliates Pension Plan (the “Ashland Pension Plan”) was originally effective March 1, 1951 and was frozen on September 30, 1986. On or about November 13, 2008, Hercules Incorporated was acquired by the Company. Effective September 30, 2009, the Ashland Pension Plan was merged into the Hercules Pension Plan. The plan was then re-named the Ashland Hercules Pension Plan, effective September 30, 2009. The merger of the plans did not change the way your benefits are computed or administered. The Plan is maintained in accordance with the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended, and within federal tax regulations. The provisions of the Plan are subject to change due to changes in the law or regulations promulgated by the Internal Revenue Service (“IRS”) or Department of Labor (“DOL”). If any provisions of this SPD change, you will be notified by the Plan. The Company maintains the Plan to provide retirement benefits for the exclusive benefit of employees, and his or her beneficiaries, as explained below. The Plan is intended to qualify as a defined benefit plan under Section 401(a) of the Internal Revenue Code (the “Code”) and the Trust is intended to qualify as a tax exempt trust under Code Section 501(a). The Plan is administered by the Plan Administrator. If there is any discrepancy between this SPD and the governing Plan document and Trust Agreement, the Plan document shall govern. You may call the Ashland HR Service Center at 1-800-782-4669 if you have any questions about this SPD. No provision of the Plan: (1) gives any employee the right to be retained by the Company; (2) affects the right of the Company to terminate or discharge any employee at any time; (3) gives the Company the right to require any employee to remain in its employ; or (4) affects any employee's right to terminate employment at any time. References to "Plan Sponsor" are to Hercules Incorporated. References to “Plan Administrator” are to the Ashland Inc. Investment and Administrative Oversight Committee (“IAOC”). The Plan has multiple groups of Participants that have differing eligibility, benefits, forms of payment and other Plan terms. The provisions of the benefits under Schedule C of the Plan represents the incorporation of the provisions of the BetzDearborn Inc. Employees’ Retirement Plan into this Plan. Effective January 1, 1999, the BetzDearborn Inc. Employees’ Retirement Plan was merged into this Plan. This Schedule C applies to benefits paid and terminations prior to January 1, 2005. Effective January 1, 2005, Employees participating in this Schedule C were transferred to Schedule D under the Plan.

PLAN MEMBERSHIP

Eligibility Effective January 1, 1999, the BetzDearborn Inc., Employees’ Retirement Plan was merged with and into this Plan. As such, if you were a participant in the BetzDearborn Inc., Employees’ Retirement Plan on December 31, 1998, you became a participant under Schedule C of this Plan on January 1, 1999.

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On June 28, 1996, W.R. Grace & Co. was acquired by BetzDearborn, Inc. Employees of W.R. Grace & Co. who were extended employment by BetzDearborn and who were participants in the W.R. Grace Pension Plan on June 30, 1996 became participants in the BetzDearborn Inc., Employees’ Retirement Plan on July 1, 1996. As such, W.R. Grace employee-participants also became participants in Schedule C of the Plan. All other Employees who have been extended participation in Schedule C of the Plan by the Board of Directors of the Company will become eligible for benefits under Schedule C upon attainment of age 21 and completion of one (1) Year of Benefit Service. You will enter the Plan on January 1 or July 1 coincident with or immediately following your satisfaction of the eligibility requirements.

Re-employment Of A Member If you terminate employment while a Plan member, you may become a member again upon your re-employment date. You will incur a One-Year Break in Service for any Plan Year in which you do not complete more than 500 Hours of Service. If you are not vested when you terminate employment with the Company, you will recover service when you are rehired based on the following:

If you had 3 or more Benefit Years of Service as of December 31, 1997: You will recover your prior service even if you were not vested when you terminated from service with the Company

If you had Less Than 3 Benefit Years of Service as of December 31, 1997 or if you Enter the

Plan On or After January 1, 1998: If you are vested or return to work for the Company within five (5) years of your termination date, you will receive credit for your prior service when you return to work. If you are not vested and had 5 or more years of consecutive One-Year Breaks in Service, you will not receive credit for your years of past service with the Company.

If you are receiving payments under the Plan upon your reemployment, payments will cease during the period of reemployment. Payment will recommence upon your termination of employment and will be reduced by the actuarial equivalent of the payments you already received. If you received a lump sum distribution of your benefits when you terminated from service with the Company, you will only receive credit for Years of Benefit Service earned before your termination if you repay your distribution to the Plan. Your repayment must be made, with interest, within 5 years of your re-employment date or before you incur 5 One-Year Breaks in Service, if earlier.

CONTRIBUTIONS The Company makes actuarially determined contributions to the Plan to maintain funding levels required by federal law. Member contributions are not required or permitted.

SERVICE You will earn a Year of Service for any Plan Year in which you complete at least 1,000 Hours of Service with the Company. The Company may grant you service for any time you may spend on military duty.

DIRECT ROLLOVER DISTRIBUTIONS

Direct Rollover of Lump Sum Distributions A member or a member’s surviving spouse who will receive a lump sum distribution may elect to directly transfer all or an allowed portion of the distribution (determined in increments of 10 percent) to an eligible employer plan, traditional Individual Retirement Account (“IRA”) or a Roth IRA that accepts rollover contributions. An eligible rollover distribution cannot be rolled over to a SIMPLE IRA or a Coverdell Education Savings Account (formerly known as an education IRA). An eligible employer plan includes tax-qualified plans of deferred compensation under Section 401(a) of the Internal Revenue Code; Section

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403(a) annuity plans; Section 403(b) tax-sheltered annuities; and an eligible Section 457(b) plan maintained by a governmental employer. An individual may only designate one eligible employer plan, traditional IRA or Roth IRA that will receive all or an allowed part of a lump sum distribution. Annuity distributions are not eligible for direct rollover. The Plan Sponsor may impose other allowed restrictions on direct rollovers, from time to time. A beneficiary who is not your surviving spouse may also directly transfer an eligible rollover distribution to a traditional IRA. In that event, the IRA must be treated as an inherited IRA. If such a beneficiary delays making this transfer until after December 31 in the year following your death, the IRA will be subject to the required distribution rule of this plan, which requires a complete distribution by December 31 of the fifth calendar year following the calendar year of your death.

Automatic Rollover If the present value of your benefit is $5,000 or less it is subject to the mandatory cash out distribution rules under the plan. If your benefit is subject to these rules, you can elect to receive your benefit or you can elect to have your benefit directly rolled over to an eligible plan of your choice. The IRA provider that the Plan Administrator designated is:

The Principal Bank 711 High Street

Des Moines, Iowa 50392-0040 Therefore, if you fail to elect to receive a distribution or fail to elect an eligible plan for a direct rollover of your benefit, the plan will transfer your benefit to The Principal Bank to hold your benefit in an IRA for you. Once transferred to this IRA, your benefit will be invested in an FDIC insured savings account. The fees charged by the IRA provider will be deducted directly from your benefit. There are early withdrawal fees if you withdraw or transfer your benefit within 90 days of the date your IRA is established. All of the fees are subject to change. The fees cannot exceed what the IRA provider charges for its other rollover IRAs. The mandatory automatic rollover rules described in this section do not apply to your surviving spouse, an alternate payee under a qualified domestic relations order or to your designated beneficiary. Mandatory cash out amounts that are $1,000 or less will be distributed directly to you without your consent, unless you elect to directly rollover those amounts to an eligible plan of your choice before the distribution. If you have questions about the automatic rollover rules, you can contact the HR Service Center at 1-800-782-4669. You can address written questions to the Ashland Inc. Employee Benefits Department, Attention: Pension Automatic Rollover, 3499 Blazer Parkway, Lexington, Kentucky 40509.

WHEN YOU CAN RETIRE

Normal Retirement Your Normal Retirement Date is the first day of the month following your 65

th birthday or your fifth (5

th)

anniversary in the Plan, if later. Your Normal Retirement Age is 65. Upon your Normal Retirement Date, you will be eligible to receive a Normal Retirement Benefit, as more fully explained below.

Early Retirement Your Early Retirement Date is the first day of the month following your 55

th birthday and after you have

completed 10 Years of Benefit Service with the Company. Upon attainment of your Early Retirement Date, you will be eligible to receive an Early Retirement Benefit, as more fully explained below.

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Special Early Retirement If you are still employed with the Company, you will be eligible for Special Early Retirement when your age and Years of Vesting Service equals 85. Upon attaining Special Early Retirement, you will be eligible for a Special Early Retirement Benefit, as more fully explained below. However, payment of your Special Retirement Benefit under the Plan will not start until you attain age 55.

Postponed Retirement You will be eligible for Postponed Retirement if you remain employed later than the Normal Retirement Date. Your postponed retirement date will be the first day of any month after your Normal Retirement Date. In addition to the above retirement dates, a mandatory distribution (i.e., required minimum distribution) will be made to you on April 1

st following the calendar year in which (a) you attain age 70.5 or (b) retire,

whichever occurs later, and by December 31st for each subsequent distribution. If you are a 5% owner, a

mandatory distribution will be made to you on the April 1st following the calendar year in which you attain

age 70.5.

Disability Retirement If you are Totally and Permanently Disabled, as determined under the Long-Term Disability Plan, and have completed 5 Years of Vesting Service, you will be eligible for benefits under the Plan upon attainment of age 65.

RETIREMENT INCOME BENEFITS

Normal Retirement Benefits Your Normal Retirement Benefit equals 1.2% multiplied by the “Final Average Earnings” plus your “Excess Benefit” (if eligible) multiplied by your “Years of Benefit Service” (up to 35). “Final Average Earnings” is the sum of your three highest consecutive calendar years of earnings with the Company divided by three. Earnings as an employee of W.R. Grace & Co., if applicable, count as well. Earnings include your base salary or wages, overtime pay, any shift premium payment, incentive compensation, commissions, and bonuses paid under a Company plan. It also includes any contributions you make to the Company’s 401(k), Group Health Plan, and any sick, short-term disability, and vacation pay. Earnings do not include reimbursements or other allowances (such as car, financial counseling, and medical allowances), moving expenses, deferred compensation, stock options, welfare benefits (such as long-term disability payments and taxable group life insurance), severance pay, and payments made under an executed employment contract. “Covered Compensation” is based on the Social Security wage bases during the 35-year period ending with the calendar year in which you reach your Social Security Retirement Age (“SSRA”). The Plan benefit formula includes covered compensation in calculating your benefit to help ensure that your plan benefit adequately supplements your Social Security retirement benefits. The table below shows sample covered compensation amounts for 2014:

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Sample 2014 Covered Compensation Table

Year of Birth Covered Compensation

1949 $72,600 1950 $75,084 1951 $77,508 1952 $79,824 1953 $82,092 1954 $84,300 1955 1956 1957 1958 1959

$88,536 $90,600 $92,568 $94,440 $96,264

“Years of Benefit Service” is the total number of years in which you complete at least 1,000 Hours of Service with the Company. All service earned as an employee of W.R. Grace will count in this calculation. The maximum Years of Benefit Service that can be used to determine your benefits under the Plan is 35.

Example. Assume that Bill Smith retires on January 1, 2014 at age 65, his Final Average Earnings are $100,000 and he has completed 30 Years of Benefit Service. His Covered Compensation is $72,600. The pension benefit Bill can expect to receive monthly is determined as follows:

Bill’s Basic Benefit:

1.2% x $100,000 x 30 years = $36,000

Plus

Bill’s Excess Benefit:

1.6% x ($100,000 - $72,600) x 30 years = $ 4,932

Bill’s Total Monthly Normal Retirement Benefit = $40,932.00

Special Note to W.R. Grace Retirement Plan Participants:

If you participated in the W.R. Grace Retirement Plan before July 1, 1996 and your date of hire with BetzDearborn was July 1, 1996, your Plan benefit will be partly offset by the benefit you have accrued under the W.R. Grace Plan. However, in no event will the offset reduce your Plan benefit below what you would have earned as a new BetzDearborn employee hired on July 1, 1996. The Plan determines your retirement benefit using your total service with the Company, including your prior service with W.R. Grace & Co. This benefit is then reduced, dollar-for-dollar, by the accrued benefit you earned under the W.R. Grace Retirement Plan. For example, assume your W.R. Grace Retirement Plan benefit is $14,420 per year at Normal Retirement and the total benefit you are entitled to from the Plan is $19,506. You would receive the following from this Plan: This Plan (before Offset): $19,506.00

Less W.R. Grace Retirement Plan $14,420.00

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Actual Plan Normal Retirement Benefit = $5,086.00

The Total from Both Plans: $19,506.00

IMPORTANT NOTE: Any benefit you may have accrued under the W.R. Grace Retirement Plan will be paid solely from the assets of the W.R. Grace Retirement Plan. Under no circumstances will the assets of the Hercules Plan be available to satisfy the debts or benefit obligations of the W.R. Grace Retirement Plan.

Early Retirement Benefits Your Early Retirement Benefit will be calculated in the same manner as the Normal Retirement Benefit using your Final Monthly Earnings and Years of Benefit Service as of the date your employment with the Company ends. However, your Early Retirement Benefit will be a reduced amount from your Normal Retirement Benefit. This reduction is equal to 6.67% for each of the first five(5) years your Early Retirement Date precedes your Normal Retirement Date and then 4% for each year after that.

If You Retire at Age You Will Receive This

Percentage of Your Normal Retirement Benefit

65 64 63 62 61 60

100% 93.33% 86.66% 80.00% 73.33% 66.67%

59 62.67% 58 58.67% 57 54.67% 56 50.67% 55 46.67%

Example: Assume your normal retirement benefit is $17,500 per month and you decide to begin receiving your benefit upon retirement at age 60 rather than deferring your benefit until age 65. In this case, you would multiply your benefit ($17,500) by 66.67% to determine the early retirement reduction percentage. Therefore, you would expect to receive an annual Early Retirement Benefit of $11,666.73.

If you are eligible for a benefit from the W.R. Grace Retirement Plan and you retire before age 62, your W.R. Grace benefit will be reduced based on the W.R. Grace Retirement Plan’s early retirement reduction factors. There is no reduction for payments that begin at or after age 62. For more information about early retirement under the W.R. Grace Retirement Plan, refer to that plan’s Summary Plan Description.

Special Early Retirement Benefits — The “Rule of 85” If your age plus Years of Vesting Service equals at least 85 while you are actively working at the Company, you are eligible for “Special Early Retirement Benefits. The “Rule of 85”/Special Early Retirement Benefits provide a larger benefit to long-time employees who retire early from the Company.

Your Special Early Retirement Benefit is calculated as of the date you begin receiving benefits using the Normal Retirement Benefit formula (based on salary and service when you stopped working), which is then reduced as follows:

Your benefit is not reduced if you begin receiving benefits on or after age 60. Before age 60, your benefit is reduced by 5% for each year your Early Retirement Date precedes age 60; and

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Your Excess Benefit is reduced according to the Early Retirement Benefit reduction percentages.

Example: Assume you retire in 1998 at age 58 after completing 27 years of vesting and benefit service with the Company. Your Final Average Earnings are $46,500, and your age plus vesting years of service equals 85. Assume you Covered Compensation in 1998 is $45,216. The pension benefit you can expect to receive annually is determined as follows:

Your Basic Benefit:

1.2% x $70,000 x 27 years = $22,680.00 Multiply by your Early Retirement Benefit reduction factor: x .90000 (Rule of 85 applies: 5% x 2 years = 10%; 100% - 10% = 90%) = $20,412.00

Plus

Your Excess Benefit:

0.6% x ($70,000 - $46,291) x 27 years = $3,840.86 Multiply by your early retirement reduction factor: x .58667 $2,253.32 Your Total Annual Early Retirement Benefit = $22,665.32 (Basic Benefit + Excess Benefit)

Postponed Retirement Benefits If you continue your employment with the Company beyond your Normal Retirement Date, you will continue to accrue benefits until you retire, up to a maximum of 35 Years of Benefit Service. Your Postponed Retirement Benefits will be based on your Final Average Earnings, your Years of Benefit Service and your Covered Compensation as of the date you retire. Your Postponed Retirement Benefit will not be less than your Normal Retirement Benefit.

Disability Benefits If you are Totally and Permanently Disabled, as determined under the Long-Term Disability Plan, you will be eligible for Disability Benefits under the Plan. Your Disability Benefit will be calculated in the same manner as your Normal Retirement Benefit. The compensation used to compute your Disability Benefit will continue at a rate equal to your base earnings when you became Totally and Permanently Disabled. Your Covered Compensation will equal the amount in effect in the year you become eligible for Long-Term Disability Benefits.

TYPES OF RETIREMENT INCOME

Standard Form Of Payment Your retirement income will be paid in the following manner according to your marital status, unless you

elect an option described in the Optional Forms Of Payment Section. Not Married If you are not married, the standard form of distribution will be in the form of a single life annuity in monthly installments over your lifetime. When you die, payments stop. There is no payment after your death. Married – 50% Joint And Survivor Annuity If you are married, the standard form of distribution will be in the form of a 50% Qualified Joint and Survivor Annuity over your lifetime, with a 50% survivor annuity to your surviving spouse upon your death. If you die prior to retirement, your surviving spouse will receive “survivor benefits” are more fully explained below.

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Survivor Benefits If you die before you retire and have a vested benefit under the Plan, your spouse will receive a survivor benefit. The survivor benefit is based on the benefit you have accrued as of the time of your death, regardless of whether you were eligible for Early or Normal Retirement.

The amount of benefit your survivor will receive will depend on whether you die before or after your earliest retirement age. Your earliest retirement age is the earliest date on which you could begin to receive your benefit under the Plan.

If you die on or before attaining your earliest retirement age, your survivor’s benefit will be equal to 50% of the vested benefit you would have been entitled to receive had you retired with a 50% Qualified Joint and Survivor Annuity benefit, terminated employment on the date of your death and survived to earliest retirement age. The Plan will begin paying a benefit to your survivor on the day you would have reached your earliest retirement age.

If you die after attaining your earliest retirement age, your survivor’s benefit will be equal to 50% of the vested benefit you would have been entitled to receive had you retired with a 50% Qualified Joint and Survivor Annuity benefit on the day before your death. The plan will begin paying a benefit to your survivor on the first of the month following your death.

If the total value of your accrued benefit is $5,000 or less, your spouse will automatically receive that amount in a lump sum payment, regardless of whether you died before or while in receipt of your pension payments.

Optional Forms Of Payment You may elect to have your retirement income paid under one of the optional methods of payment described in the following paragraphs. If you are married, you will need your spouse's consent witnessed by a notary or by a Plan representative within 180 days before payments begin to elect a payment other than a spousal Joint and Survivor Annuity. You will also need your spouse's consent witnessed by a notary or by a Plan representative if you select someone other than your spouse as your beneficiary. You can revoke your election at any time before your benefit payments begin. However, your spouse may not revoke a consent to an optional form of payment once it has been given.

Single Life Annuity — Under this form of payment, your pension is paid monthly for your lifetime only. Payments stop at your death;

Lump Sum Payment — Applies to Only Balances of $5,000 or Less. If the lump sum value of your monthly pension is $5,000 or less, you may choose to receive a single payment of that amount;

Five Year Certain Annuity — Under this form of payment, you may choose to have your retirement benefit paid to you for life, but guaranteed for at least a five-year period. If you choose this option, you will receive a reduced monthly benefit for the rest of your life. However, if you die within five years after you began collecting your benefit, a beneficiary of your choosing will receive your benefit for the balance of the five-year period. If you receive monthly benefits for the full five-year period, no additional benefits are payable when you die.

50%, 75% or 100% Joint And Survivor Annuity — Under this form of payment, you can elect to receive a monthly benefit during your lifetime with a 50%, 75% or 100% of your reduced monthly benefit paid to your joint annuitant after your death. The amount of reduction in your benefit will depend on the percentage you choose to provide to your joint annuitant and the ages of you and your joint annuitant at the time you retire.

The following table presents some sample reduction factors, assuming that you and your beneficiary are the same age. If your beneficiary is older than you are, you will receive a larger percentage of your single life benefit. If your beneficiary is younger, you will receive a smaller percentage of your single life benefit.

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If You Are This Age When

Benefits Begin ...

50% Joint and

Survivor Annuity

75% Joint and Survivor

Annuity

100% Joint and Survivor

Annuity

55 92.4% 89.1% 86.0%

58 91.5% 87.7% 84.3%

60 90.8% 86.8% 83.1%

62 90.1% 85.8% 82.0%

64 89.4% 84.9% 80.8%

65 89.0% 84.4% 80.2%

Example: Assume you retire when both you and your spouse are age 65. If your Normal Retirement Benefit is $1,200 a month, and you elect the 50% Qualified Joint and Survivor Annuity form of payment, your retirement benefit is reduced as follows:

$1,200 x 89.0% (0.890) = $1,068.00

Monthly Benefit Payable to You During Your Lifetime = $1,068.00

$1,068.00 x 50% (0.50) = $ 534.00

Monthly Benefit Payable to Your Surviving Spouse = $ 534.00

NOTE: If you are eligible for benefits under the W.R. Grace Retirement Plan, you may elect to receive your benefit in any of the payment forms available under that plan. For more information about your payment options, please refer to your W.R. Grace Retirement Plan Summary Plan Description.

Electing A Benefit Form of Payment As you near retirement age, you will receive specific information about the benefit options available to you and your payment amounts. Regardless of which payment option you choose, you must submit a completed benefit application to your Human Resources Manager no earlier than 180 days, but no later than 30 days, before you plan to retire. If you wish to elect an optional form of payment, you must do so before you begin receiving your benefit. You may change your election at any time prior to the date your payments are to begin. Please keep in mind that you cannot change you payment method once benefit payment commence. Any change in your election which changes your spouse's benefit from the automatic form of payment to an optional form requires your spouse's notarized, or plan representative, consent.

Possible Benefit Payment Restrictions Complicated mathematical rules apply to determine the funding level of the plan. Under law, if the funding level falls below a prescribed threshold measured as a percentage of the plan's liabilities, the availability of certain optional forms of distribution and certain otherwise applicable benefit increases are restricted. For example, if the plan's adjusted funding target attainment percentage falls below 60%, lump sum distributions (other than a mandatory cash out of benefits of $5,000 or less) would not be allowed. If one or more of these funding based benefit restrictions apply, you would receive a notice from the Plan Administrator within 30 days of their application to you.

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VESTING

Vesting refers to the process by which you obtain full entitlement or a non-forfeitable interest in your benefit under the Plan. You will have earned Vesting Service through the date for each calendar year during which you completed at least 1,000 Hours of Service with the Company (including any predecessor company before it was acquired by Hercules Incorporated). For this purpose, an Hour of Service includes every hour for which you are entitled to be paid, regardless of whether you actually worked (including vacation, sick time and holidays). You will be fully vested upon the earlier of completion of 5 Years of Vesting Service or the date you attain Normal Retirement Age. Your benefits will be forfeited if you leave the Company before you are fully vested.

CLAIM PROCEDURES

How To Apply For Benefits To apply for your benefit under this Plan or your prior Plan benefits, you must complete the appropriate forms and return them to the Plan Administrator. Upon request, the Company will furnish you a description of the retirement income options available to you and an estimate of your benefit under each option. You can call the Ashland HR Service Center at 1-800-782-4669 for a description of your benefit options.

Notice of Claim Denial/Right of Appeal Initial Claim – Notice of Denial Written notification of a denied claim will be delivered to 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:

The reasons for the denial;

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;

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

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 the Employee Retirement Income Security Act of 1974, as amended (ERISA – §29 U.S.C. 1132). The claimant must exhaust the Plan’s appeal procedures 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. Appeal of Denied Claim The claimant may file a written appeal of a denied claim with the Plan Administrator in Lexington, Kentucky. The IAOC is the named fiduciary under ERISA for purposes of the appeal of the denied claim. The IAOC has delegated its authority to the Ashland Inc. Benefit Appeals Panel (Panel). The Panel has authority to further delegate some of its authority. The appeal must be sent at least 60 days after the

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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. The Panel (or its delegate) 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 the company or the Panel designates a committee as the appropriate named fiduciary for purposes of deciding appeals of denied claims. For the special rules to apply, the committee (or the Panel if it functions as such a 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 five 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:

The reasons for the denial;

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;

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; and

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 the Employee Retirement Income Security Act of 1974 (ERISA – §29 U.S.C. 1132).

If the claimant does not receive notice of the decision on the appeal within the prescribed time periods, the appeal is deemed denied. In that event the claimant may file a civil action in court.

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PLAN INFORMATION

Plan Sponsor Hercules Incorporated is the Plan Sponsor. The address and telephone number are:

Hercules Incorporated P.O. Box 14000

Lexington, KY 40512 1-800-782-4669

Plan Administrator The Ashland Inc. Investment and Administrative Oversight Committee (“IAOC”) is the Plan Administrator and a named fiduciary of the Plan. The Plan Administrator has the responsibility of managing, operating and interpreting the plan. The Plan Administrator can be contacted through:

Ashland Inc. Employee Benefits Department

Attention: Investment and Administrative Oversight Committee P.O. Box 14000

Lexington, KY 40512 1-800-782-4669

Upon written request to the Plan Administrator, information may be provided as to whether a particular company has adopted the plan and the address of such a company if it has adopted the plan.

Plan Identification The Ashland Hercules Pension Plan is a trusteed, defined benefit plan providing retirement and survivor benefits. It is identified by the following numbers under IRS rules:

The Employer Identification Number assigned by the IRS to the Plan Sponsor is 51-0023450

The Plan Number assigned to the plan is 001

Plan Year For recordkeeping purposes, the plan year is January 1 to the following December 31.

Trust Fund Plan assets are held in a trust fund established for plan purposes under the terms of a trust agreement. The name and address of the Trustee are:

Mellon Trust of New England, N. A. 135 Santilli Highway Everett, MA 02149

The prior terminated plan is funded by a group annuity contract issued by Metropolitan Life Insurance Company.

Legal Service Service of legal process may be made upon the Secretary of Ashland Inc., 50 E. RiverCenter Boulevard, P. O. Box 391, Covington, KY 41012. Legal process may also be served on the Trustee.

Participants’ Rights As a participant in the plan, you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). ERISA provides that all plan participants shall be entitled to:

Examine without charge at the Plan Administrator's office and at various work sites all plan documents including insurance contracts, collective bargaining agreements and copies of all documents filed by the plan with the U.S. Department of Labor, such as annual reports and plan descriptions;

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Obtain copies of all plan documents and other plan information upon written request to the Plan Administrator. There will be a charge of $.10 per page for these documents and you will be required to furnish a personal check, payable to Ashland Inc., covering the photocopying cost prior to receiving such copies;

Receive a summary of the plan's annual financial report. The Plan Administrator is required by law to furnish each participant with a copy of this summary financial report;

Obtain, once a year, a statement of the total pension benefits accrued and the nonforfeitable (vested) pension benefits (if any), or the earliest date on which benefits will become nonforfeitable (vested). This information will be furnished upon receipt of your written request to the Plan Administrator; and

File suit in a federal court if any materials requested are not received within 30 days of your request, unless the materials were not sent because of matters beyond the control of the Plan Administrator. The court may require the Plan Administrator to pay up to $110 for each day’s delay until the materials are received.

In addition to creating rights for plan participants, ERISA imposes obligations upon the persons who are responsible for the operation of the employee benefit plan. These persons are referred to as "fiduciaries" under the law. Fiduciaries must act solely in the interest of plan participants and they must exercise prudence in the performance of their plan duties. Fiduciaries who violate ERISA may be removed and required to make good any losses they have caused the plan. Your employer may not fire or discriminate against you to prevent you from obtaining a pension benefit or exercising your rights under ERISA. If you are improperly denied a benefit, in full or in part, you have a right to file suit in federal or state court. If plan fiduciaries are misusing the plan's money, you have a right to file suit in a federal court or request assistance from the U.S. Department of Labor. If you are successful in your lawsuit, the court may, if it so decides, require the other party to pay your legal costs, including attorney's fees. If you have any questions about this statement or your rights under ERISA, you should contact the Plan Administrator or the nearest Office of the Pension and Welfare Benefits Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Pension and Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W., Washington, D.C. 20210.

Plan Interpretation/Administration The Plan Administrator has all necessary, appropriate, and convenient discretion, 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 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. All such factual determinations and interpretations of the plan and documents associated with the plan and questions concerning its administration and application as determined by the Plan Administrator shall be binding on all persons having an interest under the plan. The Plan Administrator may employ one or more persons to render advice with respect to its fiduciary responsibilities. The Plan Administrator may also delegate fiduciary responsibilities to one or more persons who shall have the right to employ one or more persons to render advice with respect to its fiduciary duties. There is no restriction on any person serving in more than one fiduciary capacity under the plan.

Plan Amendment/Termination The Plan Sponsor, or the Personnel & Compensation Committee of the Ashland Inc. Board of Directors, the Chief Executive Officer of Ashland Inc. or the delegates of either of the foregoing (pursuant to resolution, by-law, or otherwise), reserves the right, in its sole discretion, to amend, suspend, modify,

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interpret, discontinue or terminate the plan or change the funding method at any time without the requirement to give cause or consideration to any individual. No accounting treatment or funding of the plan shall be deemed evidence of an intent to limit in any way the right to amend or terminate the plan.

Top-Heavy Provisions There are provisions in the plan that go into effect if the plan should ever show an imbalance in benefits for company officers. A more detailed explanation of these provisions will be provided in the extremely unlikely event they should ever go into effect.

PBGC Insurance Benefits under this plan are insured by the Pension Benefit Guaranty Corporation (PBGC) if the plan terminates. Generally, the PBGC guarantees most vested normal retirement age benefits, early retirement benefits, and certain survivor's pensions. However, the PBGC does not guarantee all types of benefits under covered plans, and the amount of benefit protection is subject to certain limitations. The PBGC guarantees vested benefits at the level in effect on the date of plan termination. However, if a plan has been in effect less than five years before it terminates, or if benefits have been increased within the five years before plan termination, the whole amount of the plan's vested benefits or the benefit increase may not be guaranteed. In addition, there is a ceiling on the amount of monthly benefit that the PBGC guarantees, which is adjusted periodically. For more information on the PBGC insurance protection and its limitations, contact the PBGC. Inquiries to the PBGC should be addressed to the Office of Communications and Public Affairs, PBGC, 1200 K Street, N.W., Washington, D.C. 20005-4026. The PBGC may also be reached by calling 1-800-400-7242.

Assignment of Benefits Benefits under the plan cannot be assigned, except as may be allowed under Internal Revenue Code section 401(a)(13). You may not pledge or otherwise transfer your right to receive benefits with one exception. If, as a result of a divorce, you are responsible for child support, alimony or marital property rights payments, all or a portion of your plan benefit could be assigned to meet these payments under a qualified domestic relations order. The Plan Administrator has procedures and a model order that are used in connection with reviewing an order to determine whether it is qualified under federal law. You can get a copy of these materials by calling the Ashland HR Service Center at 1-800-782-4669.

Authority to Delegate The Plan Administrator may employ one or more persons to render advice with respect to its fiduciary responsibilities. The Plan Administrator may also delegate fiduciary responsibilities to one or more persons who shall have the right to employ one or more persons to render advice with respect to its fiduciary duties. There is no restriction on any person serving in more than one fiduciary capacity under the plan.

Elections and Notices An election, designation, notice or other correspondence made regarding coverage under the plan shall not be effective unless it is made both in writing and received by the Plan Administrator (or its delegate), except as otherwise provided under the terms of the plan or by the Plan Administrator.

Applicable Law This plan shall be construed and enforced according to the laws of the Commonwealth of Kentucky, to the extent that Kentucky law is not pre-empted by federal law.

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APPENDIX A

ASHLAND HERCULES PENSION PLAN SPECIAL TAX NOTICE

YOUR ROLLOVER OPTIONS

You are receiving this notice because all or a portion of a payment you are receiving from the Ashland Hercules Pension Plan (the “Plan”) is eligible to be rolled over to an IRA or an employer plan. This notice is intended to help you decide whether to do such a rollover. The content of this notice is based on a model notice drafted by the IRS.

This notice describes the rollover rules that apply to payments from the Plan. Not all payments from the Plan are eligible for rollover. Rules that apply to most payments from a plan are described in the “General Information About Rollovers” section. Special rules that only apply in certain circumstances are described in the “Special Rules and Options” section.

GENERAL INFORMATION ABOUT ROLLOVERS

How can a rollover affect my taxes?

You will be taxed on a payment from the Plan if you do not roll it over. If you are under age 59½ and do not do a rollover, you will also have to pay a 10% additional income tax on early distributions (unless an exception applies). However, if you do a rollover, you will not have to pay tax until you receive payments later and the 10% additional income tax will not apply if those payments are made after you are age 59½ (or if an exception applies).

Where may I roll over the payment?

You may roll over the payment to either an IRA (an individual retirement account or individual retirement annuity) or an employer plan (a tax-qualified plan, section 403(b) plan, or governmental section 457(b) plan) that will accept the rollover. The rules of the IRA or employer plan that holds the rollover will determine your investment options, fees, and rights to payment from the IRA or employer plan (for example, no spousal consent rules apply to IRAs and IRAs may not provide loans). Further, the amount rolled over will become subject to the tax rules that apply to the IRA or employer plan.

How do I do a rollover?

There are two ways to do a rollover. You can do either a direct rollover or a 60-day rollover.

If you do a direct rollover, the Plan will make the payment directly to your IRA or an employer plan. The Plan may also make the payment directly to payable to the IRA or employer plan you elected and identified as being for your benefit. For example, the check for your eligible rollover distribution may be payable to the order of "First National Bank IRA, for the benefit of (or FOB) Jane Smith." You should contact the IRA sponsor or the administrator of the employer plan for information on how to do a direct rollover.

If you do not do a direct rollover, you may still do a rollover by making a deposit into an IRA or eligible employer plan that will accept it. You will have 60 days after you receive the payment to make the deposit. If you do not do a direct rollover, the Plan is required to withhold 20% of the payment for federal income taxes (up to the amount of cash and property received other than employer stock). This means that, in order to roll over the entire payment in a 60-day rollover, you must use other funds to make up for the 20% withheld. If you do not roll over the entire amount of the payment, the portion not rolled over will be taxed

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and will be subject to the 10% additional income tax on early distributions if you are under age 59½ (unless an exception applies).

How much may I roll over?

If you wish to do a rollover, you may roll over all or part of the amount eligible for rollover. Any payment from the Plan is eligible for rollover, except:

• Certain payments spread over a period of at least 10 years or over your life or life expectancy (or the lives or joint life expectancy of you and your beneficiary)

• Required minimum distributions after age 70½ (or after death)

• Cost of life insurance paid by the Plan

The Plan Administrator or the payor can tell you what portion of a payment is eligible for rollover.

If I don’t do a rollover, will I have to pay the 10% additional income tax on early distributions?

If you are under age 59½, you will have to pay the 10% additional income tax on early distributions for any payment from the Plan (including amounts withheld for income tax) that you do not roll over, unless one of the exceptions listed below applies. This tax is in addition to the regular income tax on the payment not rolled over.

The 10% additional income tax does not apply to the following payments from the Plan:

• Payments made after you separate from service if you will be at least age 55 in the year of the separation

• Payments that start after you separate from service if paid at least annually in equal or close to equal amounts over your life or life expectancy (or the lives or joint life expectancy of you and your beneficiary)

• Payments made due to disability

• Payments after your death

• Cost of life insurance paid by the Plan

• Payments made directly to the government to satisfy a federal tax levy

• Payments made under a qualified domestic relations order (QDRO)

• Payments up to the amount of your deductible medical expenses

If I do a rollover to an IRA, will the 10% additional income tax apply to early distributions from the IRA?

If you receive a payment from an IRA when you are under age 59½, you will have to pay the 10% additional income tax on early distributions from the IRA, unless an exception applies. In general, the exceptions to the 10% additional income tax for early distributions from an IRA are the same as the exceptions listed above for early distributions from a plan. However, there are a few differences for payments from an IRA, including:

• There is no exception for payments after separation from service that are made after age 55.

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• The exception for qualified domestic relations orders (QDROs) does not apply (although a special rule applies under which, as part of a divorce or separation agreement, a tax-free transfer may be made directly to an IRA of a spouse or former spouse).

• The exception for payments made at least annually in equal or close to equal amounts over a specified period applies without regard to whether you have had a separation from service.

• There are additional exceptions for (1) payments for qualified higher education expenses, (2) payments up to $10,000 used in a qualified first-time home purchase, and (3) payments after you have received unemployment compensation for 12 consecutive weeks (or would have been eligible to receive unemployment compensation but for self-employed status).

Will I owe State income taxes?

This notice does not describe any State or local income tax rules (including withholding rules).

SPECIAL RULES AND OPTIONS

If your payment includes after-tax contributions

After-tax contributions included in a payment are not taxed. If a payment is only part of your benefit, an allocable portion of your after-tax contributions is generally included in the payment. If you have pre-1987 after-tax contributions maintained in a separate account, a special rule may apply to determine whether the after-tax contributions are included in a payment.

You may roll over to an IRA a payment that includes after-tax contributions through either a direct rollover or a 60-day rollover. You must keep track of the aggregate amount of the after-tax contributions in all of your IRAs (in order to determine your taxable income for later payments from the IRAs). If you do a direct rollover of only a portion of the amount paid from the Plan and a portion is paid to you, each of the payments will include an allocable portion of the after-tax contributions. If you do a 60- day rollover to an IRA of only a portion of the payment made to you, the after-tax contributions are treated as rolled over last. For example, assume you are receiving a complete distribution of your benefit which totals $12,000, of which $2,000 is after-tax contributions. In this case, if you roll over $10,000 to an IRA in a 60-day rollover, no amount is taxable because the $2,000 amount not rolled over is treated as being after-tax contributions.

You may roll over to an employer plan all of a payment that includes after-tax contributions, but only through a direct rollover (and only if the receiving plan separately accounts for after-tax contributions and is not a governmental section 457(b) plan). You can do a 60-day rollover to an employer plan of part of a payment that includes after-tax contributions, but only up to the amount of the payment that would be taxable if not rolled over.

If you miss the 60-day rollover deadline

Generally, the 60-day rollover deadline cannot be extended. However, the IRS has the limited authority to waive the deadline under certain extraordinary circumstances, such as when external events prevented you from completing the rollover by the 60-day rollover deadline. To apply for a waiver, you must file a private letter ruling request with the IRS. Private letter ruling requests require the payment of a nonrefundable user fee. For more information, see IRS Publication 590, Individual Retirement Arrangements (IRAs).

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If you were born on or before January 1, 1936

If you were born on or before January 1, 1936 and receive a lump sum distribution that you do not roll over, special rules for calculating the amount of the tax on the payment might apply to you. For more information, see IRS Publication 575, Pension and Annuity Income.

If you roll over your payment to a Roth IRA

You can roll over a payment from the Plan made before January 1, 2010 to a Roth IRA only if your modified adjusted gross income is not more than $100,000 for the year the payment is made to you and, if married, you file a joint return. These limitations do not apply to payments made to you from the Plan after 2009. If you wish to roll over the payment to a Roth IRA, but you are not eligible to do a rollover to a Roth IRA until after 2009, you can do a rollover to a traditional IRA and then, after 2009, elect to convert the traditional IRA into a Roth IRA.

If you roll over the payment to a Roth IRA, a special rule applies under which the amount of the payment rolled over (reduced by any after-tax amounts) will be taxed. However, the 10% additional income tax on early distributions will not apply (unless you take the amount rolled over out of the Roth IRA within 5 years, counting from January 1 of the year of the rollover). For payments from the Plan during 2010 that are rolled over to a Roth IRA, the taxable amount can be spread over a 2-year period starting in 2011. If you roll over the payment to a Roth IRA, later payments from the Roth IRA that are qualified distributions will not be taxed (including earnings after the rollover). A qualified distribution from a Roth IRA is a payment made after you are age 59½ (or after your death or disability, or as a qualified first-time homebuyer distribution of up to $10,000) and after you have had a Roth IRA for at least 5 years. In applying this 5-year rule, you count from January 1 of the year for which your first contribution was made to a Roth IRA. Payments from the Roth IRA that are not qualified distributions will be taxed to the extent of earnings after the rollover, including the 10% additional income tax on early distributions (unless an exception applies). You do not have to take required minimum distributions from a Roth IRA during your lifetime. For more information, see IRS Publication 590, Individual Retirement Arrangements (IRAs). You cannot roll over a payment from the Plan to a designated Roth account in an employer plan.

If you are not a plan participant

Payments after death of the participant. If you receive a distribution after the participant’s death that you do not roll over, the distribution will generally be taxed in the same manner described elsewhere in this notice. However, the 10% additional income tax on early distributions and the special rules for public safety officers do not apply, and the special rule described under the section “If you were born on or before January 1, 1936” applies only if the participant was born on or before January 1, 1936.

If you are a surviving spouse. If you receive a payment from the Plan as the surviving spouse of a deceased participant, you have the same rollover options that the participant would have had, as described elsewhere in this notice. In addition, if you choose to do a rollover to an IRA, you may treat the IRA as your own or as an inherited IRA.

An IRA you treat as your own is treated like any other IRA of yours, so that payments made to you before you are age 59½ will be subject to the 10% additional income tax on early distributions (unless an exception applies) and required minimum distributions from your IRA do not have to start until after you are age 70½.

If you treat the IRA as an inherited IRA, payments from the IRA will not be subject to the 10% additional income tax on early distributions. However, if the participant had started taking required minimum distributions, you will have to receive required minimum distributions from the inherited IRA. If the participant had not started taking required minimum distributions from the Plan, you will not have to start receiving required minimum distributions from the inherited IRA until the year the participant would have been age 70½.

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If you are a surviving beneficiary other than a spouse. If you receive a payment from the Plan because of the participant’s death and you are a designated beneficiary other than a surviving spouse, the only rollover option you have is to do a direct rollover to an inherited IRA. Payments from the inherited IRA will not be subject to the 10% additional income tax on early distributions. You will have to receive required minimum distributions from the inherited IRA.

Payments under a qualified domestic relations order. If you are the spouse or former spouse of the participant who receives a payment from the Plan under a qualified domestic relations order (QDRO), you generally have the same options the participant would have (for example, you may roll over the payment to your own IRA or an eligible employer plan that will accept it). Payments under the QDRO will not be subject to the 10% additional income tax on early distributions.

If you are a nonresident alien

If you are a nonresident alien and you do not do a direct rollover to a U.S. IRA or U.S. employer plan, instead of withholding 20%, the Plan is generally required to withhold 30% of the payment for federal income taxes. If the amount withheld exceeds the amount of tax you owe (as may happen if you do a 60-day rollover), you may request an income tax refund by filing Form 1040NR and attaching your Form 1042-S. See Form W-8BEN for claiming that you are entitled to a reduced rate of withholding under an income tax treaty. For more information, see also IRS Publication 519, U.S. Tax Guide for Aliens, and IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities.

Other special rules

If a payment is one in a series of payments for less than 10 years, your choice whether to make a direct rollover will apply to all later payments in the series (unless you make a different choice for later payments). If your payments for the year are less than $200 (not including payments from a designated Roth account in the Plan), the Plan is not required to allow you to do a direct rollover and is not required to withhold for federal income taxes. However, you may do a 60-day rollover.

Unless you elect otherwise, a mandatory cash out of more than $1,000 will be directly rolled over to an IRA chosen by the Plan Administrator or the payor. A mandatory cash out is a payment from a plan to a participant made before age 62 (or normal retirement age, if later) and without consent, where the participant’s benefit does not exceed $5,000 (not including any amounts held under the plan as a result of a prior rollover made to the plan).

The automatic rollover is made if –

The present value of your benefit is more than $1,000 and less than or equal to $5,000;

You do not elect to receive your benefit in accordance with the procedures explained on another form in this package of materials; and

You do not elect to roll over your benefit to an eligible plan of your choice in accordance with the procedures explained on another form in this package of materials.

This rule is required by law. The IRA provider that the Plan Administrator designated is:

The Principal Bank 711 High Street

Des Moines, Iowa 50392-0040

Therefore, if you fail to elect to receive a distribution or fail to elect an eligible plan for a direct rollover of your benefit, the plan will transfer your benefit to The Principal Bank to hold your benefit in an IRA for you.

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Once transferred to this IRA, your benefit will be invested in an FDIC insured savings account. The fees charged by the IRA provider will be deducted directly from your benefit. There are early withdrawal fees if you withdraw or transfer your benefit within 90 days of the date your IRA is established. All of the fees are subject to change. The fees cannot exceed what the IRA provider charges for its other rollover IRAs.

The mandatory automatic rollover rules described in this section do not apply to your surviving spouse, an alternate payee under a qualified domestic relations order or to your designated beneficiary.

Mandatory cash out amounts that are $1,000 or less will be distributed directly to you without your consent, unless you elect to directly rollover those amounts to an eligible plan of your choice before the distribution.

If you have questions about the automatic rollover rules, you can contact the HR Service Center at 1-800-782-4669. You can address written questions to the Ashland Inc. Employee Benefits Department, Attention: Pension Automatic Rollover, 3499 Blazer Parkway, Lexington, Kentucky 40509.

You may have special rollover rights if you recently served in the U.S. Armed Forces. For more information, see IRS Publication 3, Armed Forces’ Tax Guide.

FOR MORE INFORMATION

You may wish to consult with the Plan Administrator or payor, or a professional tax advisor, before taking a payment from the Plan. Also, you can find more detailed information on the federal tax treatment of payments from employer plans in: IRS Publication 575, Pension and Annuity Income; IRS Publication 590, Individual Retirement Arrangements (IRAs); and IRS Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans). These publications are available from a local IRS office, on the web at www.irs.gov, or by calling 1-800-TAX-FORM.

Ashland Inc. P.O. Box 391

50 E. RiverCenter Boulevard Covington, Kentucky 41012