EXHIBIT 10.4 ASHLAND INC. DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS (2005) (Effective generally as of January 1, 2005)

(a)  

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

(b)  

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

(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 approval of the shareholders of Ashland (or if such approval is not required, upon the approval of the Board) of (A) any consolidation or merger of the Company (a “Business Combination”), other than a consolidation or merger of the Company into or with a direct or indirect wholly-owned subsidiary, in which the shareholders of the Company own, directly or indirectly, less than 50% of the then outstanding shares of common stock of the Business Combination that are entitled to vote generally for the election of directors of the Business Combination or pursuant to which shares of the Company's Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company's Common Stock immediately prior to the merger have substantially the same proportionate ownership of common stock of the surviving corporation immediately after the merger, (B) any sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of Ashland, provided, however, that no sale, lease, exchange or other transfer of all or substantially all the assets of Ashland shall be deemed to occur unless assets constituting 80% of the total assets of Ashland are transferred pursuant to such sale, lease exchange or other transfer, or (C) adoption of any plan or proposal for the liquidation or dissolution of Ashland, (2) when any person (as defined in Section 3(a)(9) or 13(d) of the Exchange Act), other than Ashland or any subsidiary or employee benefit plan or trust maintained by Ashland, shall become the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 25% of Ashland’s Common Stock outstanding at the time, without the approval of the Board, or (3) at any time during a period of two consecutive years, individuals who at the beginning of such period constituted the Board shall cease for any reason to constitute at least a majority thereof, unless the election or the nomination for election by Ashland’s shareholders of each new director during such two-year period was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such two-year period.

(f)  

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

(g)  

"Committee” means the Governance and Nominating Committee of the Board or its designee.

(h)  

"Common Stock" means the common stock, $.01 par value, of Ashland Inc.

(i)  

"Common Stock Fund" means that investment option, approved by the Committee, in which a Participant's Deferral 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 and subsidiaries.

(k)  

"Corporate Human Resources" means the Corporate Human Resources Department of the Company.

(l)  

"Credit Date" means the date on which any Fees would otherwise have been paid to the Participant.

(m)  

"Deferral Account" means the account(s) to which the Participant's Deferred Fees, Stock Units and Restricted Stock Units are credited and from which distributions are made.  A Director who does not elect to defer Fees may still have a Deferral Account with a Restricted Stock Account (as defined in (z) of this Section 2).

(n)  

"Deferred Fees" mean the Fees elected by the Participant to be deferred pursuant to the Plan.

(o)  

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

(p)  

“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. Corporate Human Resources or its delegate shall determine whether a Participant has incurred a Disability.

(q)  

"Election" means a Participant's delivery of a written notice to the Vice-President of Human Resources for the Company (or his or her delegate) directing how his or her Fees will be paid under the terms of the Plan.  The Committee or the Company may prescribe other means of making and delivering an Election.  An Election shall also include instructions specifying the time and form under which the Participant’s Deferral Account will be paid.  Such elections shall be irrevocable except as otherwise provided in the Plan.

(r)  

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

(s)  

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

(t)  

"Fees" mean the annual retainer and, as applicable, other additional retainers earned by a Director for service as a member of the Board during all or part of a calendar year.

(u)  

"Participant" means a Director, regardless of whether the Director elects to defer the payment of any Fees.

(v)  

"Payment Commencement Date" means the date payments of amounts deferred begin pursuant to Article III, Section 5.

(w)  

“Personal Representative” means the person or persons who, upon the disability or incompetence of a Participant, have acquired on behalf of the Participant, by legal proceeding or otherwise, the right to receive the benefits specified in this Plan.

(x)  

"Plan" means this Ashland Inc. Deferred Compensation Plan for Non-Employee Directors (2005) as it now exists or may be hereafter amended.

(y)  

“Restricted Stock Account” means the portion of a Participant’s Stock Account that is separately accounted for and to which Restricted Stock Units are credited.

(z)  

“Restricted Stock Unit(s)” means the share equivalents credited to a Participant’s Restricted Stock Account pursuant to Article III, Section 1.

(aa)  

“Secretary of the Treasury” or “Treasury” means the United States Department of Treasury.

(bb)  

"Stock Account” means the portion of a Participant’s Deferral Account that is separately accounted for and to which Stock Units are credited.

(cc)  

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

(gg)  

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

(hh)  

“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.

1.  

Upon a Participant’s separation from service, including death, as a Director as either a lump sum or in installments not exceeding 15 years; or

2.  

At a specified time or under a fixed schedule not exceeding 15 years.

1.  

Such an Election may not take effect until at least 12 months after it is made;

2.  

Any delay to the distribution that would take effect because of the Election is at least to a date five years after the date the distribution otherwise would have begun; and

3.  

In the case of a distribution that would be made under paragraph (a)(2) of this Section 4 such an Election may not be made less than 12 months before the date of the first scheduled payment.