TENTH AMENDED AND RESTATED
ASHLAND INC.
SUPPLEMENTAL EARLY RETIREMENT PLAN
FOR CERTAIN EMPLOYEES
November 4, 1999
ARTICLE I. PURPOSE AND EFFECTIVE DATE.
1.01 PURPOSE
The purpose of the Plan is to allow designated employees to retire
prior to their sixty-fifth birthday without an immediate
substantial loss of income. This Plan is a supplemental retirement
arrangement for a select group of management.
1.02 EFFECTIVE DATE
The Tenth Amended and Restated Ashland Inc. Supplemental Early
Retirement Plan for Certain Employees is hereby amended effective
November 4, 1999. However, the rights and obligations of Employees
who were selected by the Board or approved for participation
pursuant to the eligibility requirements of the Plan to receive a
benefit under the Plan, or who were receiving benefits prior to
November 4, 1999 shall be governed by the terms of the Plan in
effect at the time of each such Employee's Effective Retirement
Date, unless otherwise determined by the Committee in its sole
discretion.
ARTICLE II. DEFINITIONS.
The following terms used herein shall have the following meanings
unless the context otherwise requires:
2.01 "Age" - means the age of an Employee as of his or her last
birthday, except as may otherwise be provided under Sections
5.01 and 5.02 in the event of a Change in Control.
2.02 "Annual Retirement Income" - means the annual income payable under
this Plan by Ashland for the lifetime of a Participant commencing
on such Participant's Effective Retirement Date and ending on his
or her date of death, subject to the provisions of Section 5.04.
2.03 "Ashland" - means Ashland Inc. and its present or future
subsidiary corporations.
2.04 "Board" - means the Board of Directors of Ashland and its
designees.
2.05 "Change in Control" - shall be deemed to occur (1) upon the
approval of the shareholders of Ashland (or if such approval is
not required, the approval of the Board) of (A) any consolidation
or merger of Ashland in which Ashland is not the continuing or
surviving corporation or pursuant to which shares of Ashland
common stock would be converted into cash, securities or other
property other than a merger in which the holders of Ashland
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
Ashland, 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 Securities Exchange Act
of 1934), other than Ashland or any subsidiary or employee benefit
plan or trust maintained by Ashland or any of its subsidiaries,
shall become the "beneficial owner" (as defined in Rule 13d-3
under the Securities Exchange Act of 1934), directly or
indirectly, of more than 15% of the Ashland 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 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.
2.06 "Committee" - means the Personnel and Compensation Committee of
the Board and its designees.
2.07 "Effective Retirement Date" - means the date upon which a
Participant retires under this Plan which shall be the first day
of the month following the Participant's 62nd birthday or, at
Ashland's discretion or as otherwise provided in Article V or VI,
any earlier age. Upon approval as provided in Sections 3.01 and
3.02, the "Effective Retirement Date" of a Participant may occur
after the Employee reaches age 62. The Effective Retirement Date
of an Employee who becomes a Participant under Section 3.03
because of a Change in Control and who is considered to be a Level
I or II participant in the Incentive Compensation Plan and who has
an Employment Agreement shall be the first day of the month
following (i) such Employee's termination for reasons other than
"Cause" or (ii) such Employee's resignation for "Good Reason." The
Effective Retirement Date of an Employee who becomes a Participant
under Section 3.03 because of a Change in Control and who is
considered to be a Level III, IV or V participant in the Incentive
Compensation Plan, or who is considered to be a Level I or II
participant in the Incentive Compensation Plan and who does not
have an Employment Agreement, shall be the first day of the month
following such Employee's termination for reasons other than
"Cause". For Employees who do not have an Employment Agreement
with Ashland, "Cause" shall have the meaning given to that word in
Section 3.05.
2.08 "Employee" - means an employee of Ashland who (i) is at least 55
years of age or such earlier age pursuant to Section 5.06(b); and
(ii) is deemed on the Effective Retirement Date to be a Level V or
above employee under the Incentive Compensation Plan.
Notwithstanding anything herein to the contrary, if, after a
Change in Control, an Employee is terminated other than for
"Cause" or, in the case of a Level I or II Employee having an
Employment Agreement, resigns for "Good Reason," the age 55
threshold in clause (i) does not apply and is inapplicable.
2.09 "Employment Agreements" - means those contractual agreements, in
effect from time to time, which are approved by the Board and
which provide an Employee with a specified period of employment
and other benefits.
2.10 "Final Average Bonus" - means the Participant's average bonus paid
under the Incentive Compensation Plan (including amounts that may
have been deferred) during the highest thirty-six (36) months out
of the final sixty-month (60) period. For these purposes, the
"bonus paid" for a particular month within a particular fiscal
year under such plan shall be equal to the amount of such bonus
actually paid (regardless of the date paid, but excluding any
adjustment for the deferral of such payment) to such Participant
on account of such fiscal year divided by the number of months
contained in such fiscal year which were used in determining the
amount of such bonus actually paid to such Participant.
2.11 "Final Average Compensation" - means the average total
compensation paid during the highest thirty-six months (36) out of
the final sixty-month (60) period. For these purposes, "total
compensation paid" is the sum of the "compensation paid" and the
"bonus paid" during a particular month. "Compensation paid" shall
be the base rate of compensation for such Participant in effect on
the first day of such calendar month. "Bonus paid" shall have the
same meaning as set forth in Section 2.10. In the event a payment
is due under the Plan after a Change in Control because the
Participant was terminated other than for "Cause" or resigned for
"Good Reason," the calculation of Final Average Compensation shall
include the amount paid under such Participant's Employment
Agreement. The amount so paid shall be divided by 36 to derive the
monthly "total compensation paid" it represents.
2.12 "Incentive Compensation Plan" - means the Ashland Inc. Incentive
Compensation Plan or the Ashland Inc. Incentive Compensation Plan
for Key Executives, as applicable, including any successor to such
plans.
2.13 "Participant" - means an Employee who has been approved for
participation in the Plan pursuant to Article III or Section 5.06.
2.14 "Plan" - means the Tenth Amended and Restated Ashland Inc.
Supplemental Early Retirement Plan for Certain Employees as set
forth herein.
2.15 "Service" - means the number of years and fractional years of
employment by Ashland of an Employee, measured from the first day
of the month coincident with or next succeeding his or her initial
date of employment up to and including such Employee's Effective
Retirement Date. For purposes of this Section 2.15, Service shall
include an Employee's employment with a subsidiary or an affiliate
of Ashland determined in accordance with rules from time to time
adopted or approved by the Board, or its delegate.
ARTICLE III. PARTICIPATION IN PLAN.
Eligibility for benefits shall be determined as follows:
3.01 EMPLOYEES WHO REQUIRE BOARD APPROVAL
Except as otherwise provided in Section 3.03, an Employee who on
the Effective Retirement Date is deemed to be a Level I or II
participant under the Incentive Compensation Plan shall require
Board approval to participate in this Plan.
3.02 EMPLOYEES WHO REQUIRE CEO OR OTHER APPROVAL
Except as otherwise provided in Section 3.03, an Employee who on
the Effective Retirement Date is deemed to be a Level III, IV, or
V participant under the Incentive Compensation Plan shall require
the approval of either (i) Ashland's Chief Executive Officer or
(ii) Ashland's Administrative Vice President, Human Resources and
either the President or the Chief Financial Officer to participate
in this Plan.
3.03 AUTOMATIC APPROVAL FOR CHANGE IN CONTROL
Subject to the provisions of Article VI, in the event of a Change
in Control (as defined in Section 2.05), an Employee who is deemed
to be a Level I, II, III, IV or V participant under the Incentive
Compensation Plan shall automatically be deemed to be approved by
the Board or by the Chief Executive Officer, as applicable, for
participation under this Plan.
3.04 OTHER APPROVALS
The Board or Chief Executive Officer, as applicable, may approve
such employees for participation in the Plan as they deem to be
appropriate, all in its or his sole discretion.
3.05 TERMINATION FOR CAUSE
Ashland reserves the right to terminate any Participant for
"Cause" prior to his or her Effective Retirement Date, with a
resulting forfeiture of the payment of benefits under the Plan.
Ashland also reserves the right to terminate any Participant's
participation in the Plan for "Cause" subsequent to his or her
Effective Retirement Date. For purposes of this Section 3.05,
"Cause" shall mean the willful and continuous failure of a
Participant to substantially perform his or her duties to Ashland
(other than any such failure resulting from incapacity due to
physical or mental illness), or the willful engaging by a
Participant in gross misconduct materially and demonstrably
injurious to Ashland, each to be determined by Ashland in its sole
discretion.
ARTICLE IV. INTERACTION WITH EMPLOYMENT AGREEMENTS.
4.01 TERMINATIONS - GENERAL
Notwithstanding any provision of this Plan to the contrary, an
Employee who has entered into an Employment Agreement with Ashland
and who is either terminated without "Cause" prior to a "change in
control of Ashland" or is terminated without "Cause" or resigns
for "Good Reason" following a "change in control of Ashland" (each
quoted term as defined in the applicable employment agreement)
shall be entitled to receive the benefits as provided pursuant to
this Plan. Benefits payable hereunder in such a situation shall be
calculated in accordance with the payment option selected by the
Employee at such time.
4.02 BENEFITS PRIOR TO "CHANGE IN CONTROL."
If the Employee's termination is without "Cause" prior to a
"change in control of Ashland," the benefits payable hereunder
shall commence no earlier than as of the first day of the calendar
month coincident with or next following the second anniversary
following the Employee's "Date of Termination" (as defined in the
applicable employment agreement); however, if the Employee elects
to receive such benefits in a lump sum as provided in Section
5.04(b)(1), such benefits shall commence and be payable as therein
specified.
4.03 BENEFITS SUBSEQUENT TO A "CHANGE IN CONTROL."
If the Employee's termination is without "Cause" or he or she
resigns for "Good Reason" following a "change in control of
Ashland," benefits payable hereunder shall begin as of the first
day of the calendar month next following the Participant's
Effective Retirement Date.
4.04 SUBSEQUENT ACTIVITY IN CONFLICT WITH ASHLAND
The provisions of this Section 4.04 shall apply to Level I, II,
III, IV and V Participants, regardless of whether such a
Participant has an Employment Agreement; except that the
provisions of this Section 4.04 shall not apply to any Participant
who was approved for participation hereunder under the provisions
of Section 3.03. If a Participant accepts, during a period of five
(5) years subsequent to his or her Effective Retirement Date, any
consulting or employment activity which is in direct and
substantial conflict with the business of Ashland at such time
(such determination regarding conflicting activity to be made in
the sole discretion of the Board), he or she shall be considered
in breach of the provisions of this Section 4.04; provided,
however, he or she shall not be restricted in any manner with
respect to any other non-conflicting activity in which he or she
is engaged.
If a Participant wishes to accept employment or consulting
activity which may be prohibited under this Section 4.04, such
Participant may submit to Ashland written notice (Attention:
Administrative Vice President, Human Resources) of his or her wish
to accept such employment or consulting activity. If within ten
(10) business days following receipt of such notice Ashland does
not notify the Participant in writing of Ashland's objection to
his or her accepting such employment or consulting activity, then
such Participant shall be free to accept such employment or
consulting activity for the period of time and upon the basis set
forth in his or her written request. In the event the provisions
of this Section 4.04 are breached by a Participant, the
Participant shall not be entitled to any additional periodic
payments hereunder and shall be liable to repay to Ashland all
amounts such Participant received prior to such breach. If a
Participant who breaches the provisions of this Section 4.04
received a lump sum distribution of his or her benefit prior to
such breach, such Participant shall be liable to repay to Ashland
the amount of such distribution. If a Participant who breaches the
provisions of this Section 4.04 deferred all or any part of a lump
sum distribution hereunder to the Ashland Inc. Deferred
Compensation Plan, the amount so deferred shall be forfeited, and
if any amount of the amount so deferred was distributed from the
Ashland Inc. Deferred Compensation Plan before the breach
occurred, the amount so distributed shall be repaid to Ashland.
Any repayment of benefits hereunder shall be assessed interest at
the rate applicable for the calculation of a lump sum payment
under Section 5.04(b) for the month in which the breach occurs,
with such interest compounded monthly from the month in which the
breach occurs to the month in which such repayment is made to
Ashland. Ashland shall have available to it all other remedies at
law and equity to remedy a breach of this Section 4.04.
ARTICLE V. ANNUAL RETIREMENT INCOME AND OTHER BENEFITS.
5.01 LEVELS I AND II.
The Annual Retirement Income of a Participant who is deemed to be
a Level I or II Participant under the Incentive Compensation Plan
shall be equal to:
(a) PRE-AGE 62 BENEFIT
A Participant who retires under this Plan, including a
Participant to whom the provisions of paragraph (d) of
this Section 5.01 apply, shall receive an Annual
Retirement Income from and after the first day of the
calendar month next following his or her Effective
Retirement Date until the end of the month in which he or
she attains age 62 equal to the greater of (1) the
amounts provided in the following schedule or (2) 50% of
Final Average Compensation. Notwithstanding the previous
sentence, in the event such Participant retired with less
than 20 years of Service, such Annual Retirement Income
shall be multiplied by a fraction (A) the numerator of
which is such Participant's years of and fractional years
of Service, and (B) the denominator of which is twenty
(20).
% OF
RETIREMENT COMPENSATION
1st - Year After Effective 75%
Retirement Date
2nd - " 70%
3rd - " 65%
4th - " 60%
5th - " 55%
6th - Year and thereafter 50%
to Age 62
For purposes of this Section 5.01(a), "% of Compensation"
shall mean the annualized average of the Participant's
base monthly compensation rates (excluding incentive
awards, bonuses, and any other form of extraordinary
compensation) in effect with respect to Ashland on the
first day of the thirty-six (36) consecutive calendar
months which will give the highest average out of the
one-hundred twenty (120) consecutive calendar month
period ending on the Participant's Effective Retirement
Date.
(b) AGE 62 BENEFIT AND THEREAFTER
From and after the first day of the calendar month next
following his or her Effective Retirement Date, or the
attainment of age 62, whichever is later, the
Participant's Annual Retirement Income shall be equal to
50% of Final Average Compensation; provided, however,
that in the event such Participant retired with less than
20 years of Service, such Annual Retirement Income shall
be 50% of Final Average Compensation multiplied by a
fraction (A) the numerator of which is such Participant's
years of and fractional years of Service, and (B) the
denominator of which is twenty (20).
(c) BENEFIT REDUCTION
The amount of benefit provided in paragraphs (a) and (b)
of this Section 5.01 shall be reduced by the sum of the
following:
(1) the Participant's benefit under the Ashland Inc.
and Affiliates Pension Plan (the "Pension Plan")
(assuming 50% of such Participant's account under
the Ashland Inc. Leveraged Employee Stock
Ownership Plan were transferred to the Pension
Plan, as allowed under the terms of each of the
said plans), determined on the basis of a single
life annuity form of benefit;
(2) the Participant's benefit under any other defined
benefit pension plan qualified under Section
401(a) of the Internal Revenue Code of 1986, as
amended which is maintained by Ashland, determined
on the basis of a single life annuity form of
benefit (said plans referred to in sub-paragraphs
(1) and (2) of this paragraph (c) are hereinafter
referred to jointly and severally as the "Affected
Plans");
(3) the Participant's benefit under the Ashland Inc.
Nonqualified Excess Benefit Pension Plan,
determined on the basis of a single life annuity
form of benefit; and
(4) the Participant's benefit under the Ashland Inc.
ERISA Forfeiture Plan attributable to amounts
which were forfeited under the Ashland Inc.
Leveraged Employee Stock Ownership Plan,
multiplied by 50%, and determined on the basis of
a single life annuity benefit.
In the event a Participant's benefit hereunder is paid as
a lump sum pursuant to an election under Section
5.04(b)(1), the reduction to such benefit shall be
calculated based upon the lump sum actuarial present
value of the benefits referred to in sub-paragraphs
(1)-(4) of this paragraph (c) to which the Participant
would be entitled at age 62, regardless of the date
payments actually commence. In the event the
Participant's benefit hereunder is paid in any form of
periodic payments, the reduction shall apply from and
after the date the Participant actually commences
payments under the plans referred to under sub-paragraphs
(1), (2) or (3) of this paragraph (c).
(d) BENEFIT AFTER A CHANGE IN CONTROL
(1) PARTICIPANTS HAVING EMPLOYMENT AGREEMENTS. A
Participant having an Employment Agreement who
either is terminated without "Cause" or
resigns for "Good Reason" after a Change in
Control shall have the benefit payable under
this Section 5.01 computed by adding 3 years
to the Participant's Age and Service at the
Participant's Effective Retirement Date. These
additions to Age and Service shall, except as
otherwise provided, apply for purposes of
computing the single life annuity payment to
the Participant. A Participant subject to this
paragraph (d)(1) whose Effective Retirement
Date occurs before attaining an actual age of
55 shall have the 3 year addition to Age apply
when converting the single life annuity amount
to any permitted optional form under this
Article V. If the Effective Retirement Date of
a Participant subject to this paragraph (d)(1)
occurs on or after the Participant attains an
actual age of 55, then the Participant's
actual age shall be used when making such a
conversion. Notwithstanding anything to the
contrary contained herein, when converting a
Participant's single life annuity to a lump
sum payment option, the Participant's actual
age shall be used without reference to the
additional 3 years. If the addition of 3 years
to the Participant's age results in an Age
less than 55 and the Participant commences the
benefit, the amount of the benefit shall be
adjusted to account for the fact it is paid
before the Participant's attainment of Age 55.
This adjustment shall be based upon the early
retirement table in Section 6.2 of the Ashland
Inc. and Affiliates Pension Plan as it existed
on September 30, 1999. When applying this
table under these circumstances, age 55 shall
be substituted for age 62 and adjustments for
ages younger than those on the table shall be
reasonably determined by an actuary or
actuarial firm who regularly performs services
in connection with the Plan.
(2) PARTICIPANTS WITHOUT EMPLOYMENT AGREEMENTS. A
Participant without an Employment Agreement
who is terminated without "Cause" after a
Change in Control shall have the benefit
payable under this Section 5.01 computed by
adding the applicable amount to the
Participant's Age and Service at the
Participant's Effective Retirement Date. For
these purposes, the applicable amount is
derived from the following table.
LENGTH OF PARTICIPANT'S SERVICE AT SEPARATION FROM NUMBER OF YEARS
EMPLOYMENT (THE APPLICABLE AMOUNT)
- -------------------------------------------------------------------------------
Up to 5 years 3 months
More than 5 and up to 10 years 6 months
More than 10 and up to 15 years 1 year
More than 15 and up to 20 years 1 year and 6 months
More than 20 years 2 years
These additions to Age and Service shall,
except as otherwise provided, apply for
purposes of computing the single life annuity
payment to the Participant. A Participant
subject to this paragraph (d)(2) whose
Effective Retirement Date occurs before
attaining an actual age of 55 shall have the
applicable amount added to such Participant's
Age apply when converting the single life
annuity amount to any permitted optional form
under this Article V. If the Effective
Retirement Date of a Participant subject to
this paragraph (d)(2) occurs on or after the
Participant attains an actual age of 55, then
the Participant's actual age shall be used
when making such a conversion. Notwithstanding
anything to the contrary contained herein,
when converting a Participant's single life
annuity to a lump sum payment option, the
Participant's actual age shall be used without
reference to the addition of the applicable
amount. If the addition of the applicable
amount to the Participant's age results in an
Age less than 55 and the Participant commences
the benefit, the amount of the benefit shall
be adjusted to account for the fact it is paid
before the Participant's attainment of Age 55.
This adjustment shall be based upon the early
retirement table in Section 6.2 of the Ashland
Inc. and Affiliates Pension Plan as it existed
on September 30, 1999. When applying this
table under these circumstances, age 55 shall
be substituted for age 62 and adjustments for
ages younger than those on the table shall be
reasonably determined by an actuary or
actuarial firm who regularly performs services
in connection with the Plan.
5.02 LEVELS III, IV AND V.
(a) GENERAL
The Annual Retirement Income of a Participant (including
a Participant to whom the provisions of paragraph (b) of
this Section 5.02 apply) who on his or her Effective
Retirement Date was deemed to be a Level III, IV, or V
Participant under the Incentive Compensation Plan shall,
from and after the first day of the calendar month next
following his or her 62nd birthday, be equal to 50% of
Participant's Final Average Bonus; provided, however,
that in the event such Participant retired with less than
20 years of Service, such Annual Retirement Income after
age 62 shall be 50% of Final Average Bonus multiplied by
a fraction (A) the numerator of which is such
Participant's years of and fractional years of Service,
and (B) the denominator of which is twenty (20). Although
a Participant may elect to commence benefits under this
Plan upon his or her Effective Retirement Date, there
shall be an actuarial adjustment (consistent with that
applied under Ashland's qualified pension plan, as from
time to time in effect) for Participants receiving
benefits under this Section 5.02 whose Effective
Retirement Date is prior to age 62.
(b) BENEFIT AFTER A CHANGE IN CONTROL
A Participant who is terminated other than for "Cause"
after a Change in Control shall have the benefit payable
under this Section 5.02 computed by adding to the
Participant's Age and Service at the Participant's
Effective Retirement Date the number of years equal to
the applicable amount for the Participant derived from
the following table.
LENGTH OF PARTICIPANT'S SERVICE AT SEPARATION FROM NUMBER OF YEARS
EMPLOYMENT (THE APPLICABLE AMOUNT)
- -------------------------------------------------------------------------------
Up to 5 years 3 months
More than 5 and up to 10 years 6 months
More than 10 and up to 15 years 1 year
More than 15 and up to 20 years 1 year and 6 months
More than 20 years 2 years
These additions to Age and Service shall, except as
otherwise provided, apply for purposes of computing the
single life annuity payment to the Participant. A
Participant subject to this paragraph (b) whose Effective
Retirement Date occurs before attaining an actual age of
62 shall have the applicable amount from the table
hereinabove added to his or her Age apply when converting
the single life annuity amount to any permitted optional
form under this Article V. If the Effective Retirement
Date of a Participant subject to this paragraph (b)
occurs on or after the Participant attains an actual age
of 62, then the Participant's actual age shall be used
when making such a conversion. Notwithstanding anything
to the contrary contained herein, when converting a
Participant's single life annuity to a lump sum payment
option, the Participant's actual age shall be used
without reference to the applicable amount derived from
the table hereinabove. If the addition of the applicable
amount from the table hereinabove to the Participant's
age results in an Age less than 62 and the Participant
commences the benefit, the amount of the benefit shall be
adjusted to account for the fact it is paid before the
Participant's attainment of Age 62. This adjustment shall
be based upon the early retirement table in Section 6.2
of the Ashland Inc. and Affiliates Pension Plan as it
existed on September 30, 1999, and adjustments for ages
younger than those on the table shall be reasonably
determined by an actuary or actuarial firm who regularly
performs services in connection with the Plan.
5.03 BENEFITS PAYABLE FOR LESS THAN 12 MONTHS
Annual Retirement Income benefits payable under Sections 5.01 and
5.02 for a period of less than 12 months due to a Participant's
attainment of age 62 or death will be payable on a pro-rata basis,
with months taken as a fraction of a year.
5.04 PAYMENT OPTIONS
(a) ELECTION
A Participant shall, subject to Sections 5.05 and 5.06,
elect the form in which such benefit shall be paid from
among those identified in this Section 5.04 and such
election shall be made at the time and in the manner
prescribed by Ashland, from time to time, provided that
the election is made before the Participant's Effective
Retirement Date. Such election, including the designation
of any contingent annuitant or alternate recipient under
Sections 5.04(b)(4) or (5), shall be irrevocable except
as otherwise set forth herein. Notwithstanding anything
in the foregoing to the contrary, any Participant
approved for participation in the Plan pursuant to
Sections 3.01, 3.02 and 3.04 who makes an election under
Section 5.04(b)(2) shall make such election by the later
of -
(1) the 60th day following such Participant's
approval to participate in this Plan; or
(2) the earlier of -
(A) the date six months prior to
Participant's Effective Retirement
Date; or
(B) the December 31 immediately preceding
the Participant's Effective Retirement
Date.
Such deferral election shall be made in the
manner prescribed by Ashland, from time to time,
and shall be irrevocable as of the applicable
time identified under Sections 5.04(a)(1) or
(2).
Until the time at which an election becomes irrevocable,
a Participant shall be able to change it.
(b) OPTIONAL FORMS OF PAYMENT
(1) LUMP SUM OPTION A Participant may elect to
receive the benefit under Article V as a lump
sum distribution.. A lump sum benefit payable
under the Plan to a Participant shall be
computed on the basis of the actuarially
equivalent present value of such Participant's
benefit under Article V based upon such
actuarial assumptions as determined by the
Committee. Such lump sum shall be payable within
thirty (30) days following the later of the
Participant's Effective Retirement Date, or at
such later date as Ashland or its delegate may
determine, in its sole discretion. The option
shall be made available to a Participant
contingent upon various considerations,
including, but not limited to, the following:
The tax status of Ashland, including without
limitation, the corporate and individual tax
rate then applicable and whether or not Ashland
has or projects a net operating loss; the
current and projected liquidity of Ashland,
including cash flow, capital expenditures and
dividends; Ashland `s borrowing requirements and
debt leverage; applicable book charges;
organizational issues, including succession
issues; security of the retirement payment(s)
with respect to the retiree; and the
Participant's preference.
(2) LUMP SUM DEFERRAL OPTION A Participant who is
eligible to receive a lump sum distribution
under 5.04(b)(1) shall be able to elect to defer
all or a portion of the receipt of the elected
lump sum (in increments of such percentage or
such amount as may be prescribed by Ashland or
its delegatee, from time to time), by having the
obligation to distribute such amount transferred
to the Ashland Inc. Deferred Compensation Plan
to be held thereunder in a notional account and
paid pursuant to the applicable provisions of
such Plan, as they may be amended from time to
time; provided, however, that the election to
defer such distribution shall be made at the
time and in the manner prescribed in Section
5.04(a)(1) and (2).
(3) SINGLE LIFE ANNUITY A Participant may elect to
have such benefit paid in the form of equal
monthly payments for and during such
Participant's life, with such payments ending at
such Participant's death. Payments under this
option shall be actuarially equivalent to the
benefit provided under Section 5.01 or 5.02,
whichever is applicable, determined on the basis
of the applicable actuarial assumptions and
other relevant provisions used for the same in
the Pension Plan.
(4) JOINT AND SURVIVOR INCOME OPTION A Participant
may elect to receive an actuarially reduced
benefit payable monthly during the Participant's
lifetime with payments to continue after his or
her death to the person he designates
(hereinafter called "contingent annuitant"), in
an amount equal to (1) 100% of such actuarially
reduced benefit, (2) 66 2/3% of such actuarially
reduced benefit, or (3) 50% of such actuarially
reduced benefit. Benefit payments under this
option shall terminate with the monthly payment
for the month in which occurred the date of
death of the later to die of the Participant and
his or her contingent annuitant. The following
additional limitations and conditions apply to
this option:
(A) The contingent annuitant shall be
designated by the Participant in
writing in such form and at such time
as Ashland may from time to time
prescribe. Before the Participant's
Effective Retirement Date, the
Participant may change the contingent
annuitant elected.
(B) In the event of the death of the
contingent annuitant prior to the date
as of which the election is
irrevocable, the Participant's
selection of this option shall be void
and the Participant may change the
contingent annuitant or change the
option elected, subject to the
applicable limitations and conditions
applied to elections for the options
described under 5.04(a)(1) and (2).
(C) Actuarial equivalence under this
sub-paragraph (4) shall be determined
on the basis of the applicable
actuarial assumptions and other
relevant provisions used for the same
in the Pension Plan.
(5) PERIOD CERTAIN INCOME OPTION A Participant may
elect to receive an actuarially reduced benefit
payable monthly during his or her lifetime and
terminating with the monthly payment for the
month in which his or her death occurs, with the
provision that not less than a total of 120
monthly payments shall be made in any event to
him or her and/or the person designated by him
or her to receive payments under this
sub-paragraph (5) in the event of his or her
death (hereinafter called "alternate
recipient"). If a Participant and his or her
alternate recipient die after the Effective
Retirement Date, but before the total specified
monthly payments have been made to such
Participant and/or his or her alternate
recipient, the commuted value of the remaining
unpaid payments shall be paid in a lump sum to
the estate of the later to die of the
Participant or his or her alternate recipient.
The following additional limitations and
conditions shall apply to this option:
(A) The alternate recipient shall be
designated in writing by the
Participant in such form and at such
time as Ashland may from time to time
prescribe. The designation of an
alternate recipient under this
sub-paragraph (5) is irrevocable after
the Effective Retirement Date,
provided, however, a Participant may
designate a new alternate recipient if
the one first designated dies before
the Participant and after the Effective
Retirement Date.
(B) In the event of the death of the
alternate recipient prior to the date
as of which the election is
irrevocable, the Participant's
selection of this option shall be void
and the Participant may change the
alternate recipient or change the
option elected, subject to the
applicable limitations and conditions
applied to elections for the options
described under 5.04(a)(1) and (2).
(C) Actuarial equivalence under this sub-paragraph (5) shall
be determined on the basis of the applicable actuarial
assumptions and other relevant provisions used for the
same in the Pension Plan.
5.05. PAYMENT OF SMALL AMOUNTS
Unless such Participant elects to receive his or her
benefit in a lump sum as provided in Section 5.04, in the
event a monthly benefit under this Plan, payable to
either a Participant or to his or her contingent
annuitant, alternate recipient or surviving spouse, is
too small (in the sole judgment of Ashland) to be paid
monthly, such benefit may be paid quarterly,
semi-annually, or annually, as determined by Ashland to
be administratively convenient.
5.06. SURVIVING BENEFITS
(a) Except as otherwise provided in Section 5.04 of
this Plan, in the event that a Participant
receiving Annual Retirement Income benefits
shall die after his or her Effective Retirement
Date, no additional benefits shall be payable by
Ashland under this Plan to such deceased
Participant's beneficiaries, survivors, or
estate.
(b) If an Employee dies while in active service with
Ashland
(1) prior to approval for participation in the
Plan and said Employee is a Level I or II
participant under the Incentive Compensation
Plan; or
(2) after approval for participation in the Plan
but prior to making an election pursuant to
Section 5.04(a) and said Employee is a Level I
-V participant under the Incentive Compensation
Plan; then such Employee shall be deemed:
(i) to be a Participant under the Plan in the
case of Section 5.06 (b)(1); (ii) to have
commenced participation one (1) day prior to the
date of the Employee's death; and (iii) to have
elected to receive his or her benefits in the
form of the 100% Joint & Survivor retirement
income option and to have designated his or her
spouse as the beneficiary thereunder.
(c) In the event an Employee is approved for
participation under the Plan and dies after
having made an election under Section 5.04(a)
but prior to his or her Effective Retirement
Date, then such Employee shall be deemed to have
commenced participation one (1) day prior to the
date of the Employee's death and payment shall
be made under this Plan in accordance with the
Employee's election.
5.07 PARTICIPATION IN OTHER BENEFITS
After a Participant's Effective Retirement Date, he or she shall
continue to participate in Ashland's Group Life Insurance, Medical
and Dental programs in the same manner and under the same terms
and conditions as provided for retirees as a class under the
provisions of such programs, as from time to time in effect.
Except as otherwise expressly provided in this Plan, a
Participant's active participation in all employee benefit
programs maintained by Ashland derived from his or her employment
status with Ashland shall be discontinued.
ARTICLE VI. CHANGE IN CONTROL.
Notwithstanding any provision of this Plan to the contrary, in the
event of a Change in Control, an Employee who is deemed to be a
Level I, II, III, IV or V participant under Ashland's Incentive
Compensation Plan, shall, in accordance with Section 3.03,
automatically be deemed approved for participation under this
Plan. Consistent with the applicable terms of Sections 5.01 and
5.02, such a Participant may, in his or her sole discretion, elect
to retire prior to Age 62. In addition, Ashland (or its successor
after the Change in Control) shall reimburse an Employee for legal
fees, fees of other experts and expenses incurred by such Employee
if he or she is required to, and is successful in, seeking to
obtain or enforce any right to payment pursuant to the Plan. In
the event that it shall be determined that such Employee is
properly entitled to the payment of benefits hereunder, such
Employee shall also be entitled to interest thereon payable in an
amount equivalent to the prime rate of interest (quoted by
Citibank, N.A. as its prime commercial lending rate on the latest
date practicable prior to the date of the actual commencement of
payments) from the date such payment(s) should have been made to
and including the date it is made. Notwithstanding any provision
of this Plan to the contrary, the provisions of this Plan or any
other plan of Ashland Inc. having a material impact on the
benefits payable under this Plan may not be amended after a Change
in Control occurs without the written consent of a majority of the
Board who were directors prior to the Change in Control.
ARTICLE VII. MISCELLANEOUS.
7.01 The obligations of Ashland hereunder constitute merely the promise
of Ashland 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 Ashland. To the extent any
Participant has a right to receive payments from Ashland under
this Plan, such right shall be no greater than the right of any
unsecured general creditor of Ashland.
7.02 Full power and authority to construe, interpret and administer
this Plan shall be vested in the Board or its delegate. 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.
Decisions of the Board or its delegate shall be final, conclusive
and binding upon all parties, provided, however, that no such
decision may adversely affect the rights of any Participant who
has been approved for participation in the Plan under the terms of
Section 3.03 and whose benefit is determined under the terms of
Section 5.01(d) or Section 5.02(b).
7.03 This Plan shall be binding upon Ashland and any successors to the
business of Ashland and shall inure to the benefit of the
Participants and their beneficiaries, if applicable. Except as
otherwise provided in Article VI, the Board or its delegate may,
at any time, amend this Plan, retroactively or otherwise, but no
such amendment may adversely affect the rights of any Participant
who has been approved for participation in the Plan except to the
extent that such action is required by law.
7.04 Except as otherwise provided in Section 5.04, no right or interest
of the Participants under this Plan shall be subject to voluntary
or involuntary alienation, assignment or transfer of any kind.
7.05 This Plan shall be governed for all purposes by the laws of the
Commonwealth of Kentucky.
7.06 If any term or provision of this Plan is determined by a court or
other appropriate authority to be invalid, void, or unenforceable
for any reason, the remainder of the terms and provisions of this
Plan shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.