Exhibit 10.1
SEPARATION AGREEMENT AND GENERAL RELEASE
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Section 1. SPECIAL SEVERANCE BENEFITS
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I, Gary A. Cappeline, understand that on December 31, 2006 ("Release
Date"), my employment with Ashland Inc. (the "Company" or "Ashland") will
end. I am signing this General Release in return for the special severance
benefits offered to me by Ashland, which are more than would otherwise be
provided to me upon termination. Specifically, I understand that I will
receive the severance benefits more fully described in Attachment I
(Summary of Benefits), which is hereby incorporated by reference.
Section 2. COMPLETE RELEASE OF LIABILITY
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(a) General Release. In exchange for these special severance benefits
offered by Ashland, I completely release all claims I may have at this
time against Ashland, its divisions, subsidiaries, insurers and
affiliates, their successors and assigns, and their officers,
directors or employees (collectively referred to hereafter as
"Releasees"). This Release is intended to be a broad release and shall
apply to any relief, no matter how denominated, including, but not
limited to, claims for future reemployment, rights or causes of action
for wages, backpay, front pay, compensatory damages, punitive damages,
or attorneys fees. I also agree that I will not file any such claim
and I hereby agree to indemnify and hold Releasees harmless from any
such claim. In addition, I agree to waive the right to receive any
recovery under any charge or lawsuit filed on my behalf.
(b) Extent of Release. This release includes all claims I may have which
relate either to the time of my employment or to my termination,
except the claims mentioned in Section 2(c) below. Some of the types
of claims that I am releasing, although there also may be others not
listed here, are claims under local, state or federal law relating to:
1. Discrimination on the basis of sex, race, color, national origin,
religion, disability or veteran status;
2. Restrictions, if any, upon the rights of Ashland to terminate its
employees at will, including (i) violation of public policy, (ii)
breach of any express or implied covenant of the employment
contract, and (iii) breach of any covenant of good faith and fair
dealing;
3. Discrimination on the basis of age, including claims under the
Age Discrimination in Employment Act (the "ADEA"), which is
located at 29 United States Code, Sections 621 through 634;
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4. Payments, if any, that might otherwise be owed and payable to me
pursuant to the Workers' Adjustment and Retraining Notification
(WARN) Act; and
5. Civil actions relating to negligence, defamation, invasion of
privacy, fraud, misrepresentation, or infliction of emotional or
mental distress.
(c) Exceptions to Release. The only claims that this release does not
include are claims related to:
1. Claims for benefits to which I am entitled under this special
severance offer;
2. Any applicable worker's compensation or unemployment compensation
laws;
3. My rights under the employee benefit plans of the Company that
are governed by the Employee Retirement Income Security Act of
1974, as amended (ERISA), in effect as of my Release Date; and
4. Any claims that the law states may not be waived.
Section 3. CONSEQUENCES OF BREACHING MY PROMISES IN SECTION 2
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If I breach my promise in Section 2 of this General Release and file a
claim or lawsuit based on what I released in this General Release, I agree
to pay for all liabilities and costs incurred by Releasees, including
reasonable attorneys' fees, in defending against my claim or lawsuit.
Provided, however, that this provision shall not apply to any alleged
breach due to a challenge of the validity of the ADEA waiver contained
herein.
Section 4. NONDISPARAGEMENT AND CONFIDENTIALITY
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I agree that I will not make any oral or written communication to any
person or entity which disparages, or has the effect of damaging the
reputation of, the Company, its affiliates, or their respective products,
services, officers, directors or employees, whether past or current;
provided, that this prohibition shall not be applied to prevent me from
providing truthful testimony in compliance with a lawful subpoena or court
order, or as otherwise may be required by law.
I further agree that I have acquired Company Information as defined
herein. I understand and agree that such Company Information has been
disclosed to me in confidence and for Company use only. I will not disclose
or communicate Company Information to any third party, and I will not make
use of
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Company Information on my own behalf, or on behalf of any third party.
Further, I agree that I will continue to be bound by the Service Agreement
executed during my employment with the Company and in effect on my Release
Date, the terms and conditions of which are incorporated herein by
reference.
In addition, I specifically agree and affirm that for a two (2) year
period following my Release Date, I will not, without prior written consent
from Ashland's General Counsel, accept a directorship or employment with,
participate in the management or control of, engage in consulting or
otherwise render services for, hold greater than ten percent (10%) of the
outstanding ownership interest in, or otherwise engage in any business
activity with, any corporation, partnership, firm or other form of business
enterprise which competes within the same geographical territory with the
products, activities and/or services currently offered by a business of the
Company or under development by a business of the Company as of my Release
Date (a "Competing Business"). Provided, that it will not be deemed a
violation of this section for me to work for a subsidiary, division,
affiliate, joint venture, or other business enterprise of a Competing
Business, which does not itself compete within the same geographical
territory with the products, activities and/or services currently offered
by a business of the Company or under development by a business of the
Company as of my Release Date, so long as I do not engage in any activity
with respect to the management or operations of any other part of the
Competing Business.
I further agree that during this non-compete period, I will not
interfere with or disrupt the business or employment relationship,
contractual or otherwise, between the Company or its successors and any
other party, including other employees of the Company or its successors;
nor will I assist any party in any attempt to acquire a controlling
interest in the Company.
I agree that all of the above restrictions are reasonable, and that
they do not unreasonably preclude me from being gainfully employed. I also
understand that I continue to be subject to the non-compete provisions of
Ashland's Supplemental Early Retirement Plan, and nothing in this Agreement
abrogates my obligations thereunder.
Section 5. RETURN OF COMPANY INFORMATION AND PROPERTY
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I agree that on or prior to my Release Date I returned to the Company
all Company Information and related reports, maps, files, memoranda, and
records; credit cards, cardkey passes; door and file keys; computer access
codes; software; and other physical or personal property which I received
or prepared or helped prepare in connection with my employment.
I further represent that I have not retained and will not retain any
copies, duplicates, reproductions, or excerpts thereof. I understand that
the term "Company Information" as used in this Agreement refers to
information obtained
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during my employment with Ashland, and/or any division, subsidiary, or
affiliate of Ashland, and includes (a) confidential information including,
without limitation, information received from third parties under
confidential conditions; and (b) other technical, business, or financial
information, the use or disclosure of which might reasonably be construed
to be contrary to the interests of the Company.
Section 6. ADVICE TO CONSULT WITH ATTORNEY
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I understand that I am advised to consult with an attorney before
signing this General Release.
Section 7. PERIOD FOR REVIEW AND COVERAGE OF OFFER
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I understand and agree that I have been given at least twenty-one (21)
days to review and consider this General Release. I understand that I may
use as much or as little of this period of time as I wish to prior to
reaching a decision regarding the signing of this General Release. I
understand that if I sign this General Release prior to my Release Date or
if I do not sign, date, and return this General Release by January 12, 2007
the General Release will not be valid and I will not receive the special
severance benefits under the terms of this special severance offer.
Section 8. EFFECTIVE DATE AND MY RIGHT TO REVOKE GENERAL RELEASE
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In accordance with federal law, I understand that this General Release
may be revoked by me at any time within seven (7) calendar days after the
date of execution noted below. To be effective, the revocation must be in
writing and delivered to Susan Esler, Vice President Human Resources,
Ashland Inc., 50 E RiverCenter Blvd., PO Box 391, Covington, KY 41012,
either by hand or mail within a seven (7) day period following my execution
of this General Release. If delivered by mail, the recision must be:
1. Postmarked within the seven (7) day period;
2. Properly addressed as noted above; and
3. Sent by Certified Mail, Return Receipt Requested.
I understand that this General Release and my acceptance of it shall
not become effective or enforceable until the seven (7) day revocation
period has expired.
Section 9. GOVERNING LAW
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It is agreed that this General Release shall be interpreted in
accordance with the laws of the State of Kentucky.
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Section 10. PARTIAL INVALIDITY OF THE GENERAL RELEASE
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I agree that if any term or provision of this General Release 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 General Release shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
Section 11. COMPLETE AGREEMENT
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It is agreed that the foregoing constitutes the entire agreement
between the Employee and the Company, and that there are no other
agreements, oral or written, express or implied, relating to any matters
covered by this Agreement, or any other agreement in effect and relating to
any other matter whatsoever, whether or not within the knowledge or
contemplation of either of the Parties at the time of execution of this
Agreement.
I M P O R T A N T N O T I C E
I acknowledge that:
o I have read this General Release and I understand fully its final and
binding effect;
o The only promises made to me to sign this General Release are those
stated herein;
o I am signing this General Release voluntarily; and
o I have no other claim or expectation of any additional pay or benefits
incident to my Employment. The benefits I am receiving for this
General Release are in lieu of, and fully satisfy, all monetary
amounts, if any, to which I might otherwise be entitled under federal
or state statute or common law.
ASHLAND INC.
/s/ Gary A. Cappeline By: /s/ Susan B. Esler
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Gary A. Cappeline
Jan. 2, 2007 Title: VP Human Resources
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Date of Execution
(Do Not Sign Prior To Release Date)
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NAME: GARY A. CAPPELINE
DATE OF PRESENTATION: DECEMBER 19, 2006
Attachment 1
SUMMARY OF SPECIAL SEVERANCE BENEFITS,
EMPLOYEE BENEFITS AND MISCELLANEOUS PROVISIONS
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On December 31, 2006 (your "Release Date"), your employment with the
Company will terminate. On July 1, 2007, Ashland will provide you with the
following payments:
1. a severance payment (your "Severance Benefit") equal to 24 months
of base pay, using your rate of base pay in effect on your
Release Date,
2. a payment of $1,500; and
3. a payment equal to three (3) months base compensation, using your
rate of base pay in effect on your Release Date.
The above payments, plus interest on these amounts calculated at a rate
equal to Ashland's average three month money market rate compounded
quarterly over the six-month period between January 1, 2007 and June 30,
2007, will be made to you in a lump sum, less all applicable tax
withholdings.
The following summarizes selected terms and conditions from some of the
employee benefit plans in which you were participating on your Release
Date. The actual terms of these plans are in their plan documents. You
should refer to the relevant summary plan description for more information
on a particular plan and the effect that your severance has with regard to
that plan.
In the event you do not sign this Separation Agreement and General Release
within the time period provided herein, or you revoke your acceptance of
the General Release within the 7-day period provided for revocation, you
understand and agree that you will not be eligible for any benefits under
this Agreement, or under Ashland's Severance Pay program.
PENSION PLAN
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Your rights under the Ashland Inc. and Affiliates Pension Plan (Pension
Plan) depend on whether you are in the traditional formula or the
retirement growth account formula. In general you are in the traditional
formula if you had 10 years of continuous service under the plan on June
30, 2003 and you were an employee on that day. In general, all others are
in the retirement growth account formula. You can call the HR Service
Center at (800) 782-4669 to find out which formula applies to you.
Your benefit will be based on the plan terms and the company's records of
your employment and plan benefit on your Release Date. You will be eligible
for an
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immediate pension benefit commencing as of the first day of the month
coincident with or next following your Release Date if either of the
following applies: on your Release Date you are at least age 55; or on your
Release Date the sum of your age and years of continuous service is at
least 80. Such benefits will not be automatically distributed. You will
have to make a proper election for a distribution to begin.
LIFE INSURANCE
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If you are at least age 55 or the sum of your age and years of continuous
service is at least 80, you have 5 years of service, and you had plan
coverage on your Release Date, you will be eligible for company-paid
retiree life coverage equal to $10,000. Contributory coverage, spouse
coverage, dependent child coverage and accidental death and dismemberment
coverage end at your Release Date.
You may be eligible to continue your non-contributory and/or contributory
life insurance coverage, and spouse and dependent child life coverages
after your Release Date. Continuing this coverage, though, is strictly
between you and the applicable insurance companies that provide this
coverage. You have a 31-day window following your Release Date to arrange
to continue these coverages. To find out more about your ability to
continue these coverages contact the HR Service Center at (800) 782-4669.
MEDICAL AND DENTAL
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If you are at least age 55 or the sum of your age and years of continuous
service is at least 80, and you have 5 years of service on your Release
Date, you may be eligible for retiree coverage under the Medical Plan and
the Dental Plan. Dental coverage during retirement is only available if you
were covered by the plan on your Termination Date. Your dental coverage
during retirement also must end on the last day of the month before the
month in which you attain age 65. Medical coverage during retirement is
generally only available if you were covered by the plan on your Release
Date. The exceptions to this general rule are described in the summary plan
description. If you elect retiree coverage, your retiree contributions
would be determined using your service to your Termination Date.
Although you may be eligible to elect retiree coverage, federal law
requires that COBRA continuation coverage also be offered for the plan or
plans in which you were covered. If the amount you have to pay for retiree
coverage is greater than what you paid for the same coverage as an active
employee, you can choose to elect the COBRA continuation coverage instead
of the retiree coverage. You will receive a written summary of your
options. If you choose the COBRA continuation coverage you need to be aware
that elected COBRA coverage is for a limited duration, while retiree
medical coverage may last for life and retiree dental coverage may last
until the end of the month before the month in which you reach age 65.
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FLEXIBLE SPENDING ACCOUNTS PLAN
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Any amount you have remaining in the Dependent Day Care Account and/or the
Health Care Account is available to reimburse you for covered services
incurred before your Release Date. Claims for services performed after that
time are not eligible for reimbursement. Claims for reimbursement must be
filed by June 30 in the calendar year following your Release Date. Any
amounts in your accounts that are not used will be forfeited according to
IRS rules. Because your Release Date will occur on the last day of the
calendar year, you are not eligible to elect COBRA continuation coverage
for your Health Care Account.
EMPLOYEE SAVINGS PLAN
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Upon your Release Date, you have a number of withdrawal options. If your
account is valued at more than $1,000 on your Release Date, you have the
option of leaving your account in the plan. If your account is valued at
$1,000 or less, it will be paid to you as a mandatory lump sum cash-out. If
you have an unpaid loan, you may continue to make monthly payments after
your Release Date. Fidelity will send you payment instructions
approximately 4 weeks following your Release Date. To receive Savings Plan
information, call Fidelity Investments at (800) 827-4526. You may also
access Savings Plan information on the internet by clicking "Access My
Account" under NetBenefits at www.401k.com.
LONG TERM DISABILITY; VOLUNTARY ACCIDENTAL DEATH AND DISMEMBERMENT;
OCCUPATIONAL ACCIDENTAL DEATH AND DISMEMBERMENT; TRAVEL ACCIDENT INSURANCE
AND ADOPTION ASSISTANCE PROGRAM
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If you are enrolled in one or more of these plans on your Release Date,
your eligibility for coverage ends on your Release Date for all the
benefits identified in the above title of this section. If you were covered
by the voluntary accidental death and dismemberment plan you may be
eligible for conversion privileges within 31 days of your Release Date. To
find out if this applies to you contact the HR Service Center at (800)
782-4669. They will be able to give you contact information for the
applicable insurance company.
VISION COST ASSISTANCE PLAN
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If you are enrolled for this coverage, it will end on your Release Date,
although you may be able to elect COBRA continuation of coverage at that
time. Ashland's Employee Benefits Department will provide you with a
summary of your COBRA rights that will tell you how to elect to continue
coverage.
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LEGAL PLAN
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If you were enrolled for the Legal Plan, your participation ends on your
Release Date. You may be eligible for coverage for covered legal matters
that are not completed as of your Release Date. Consult your summary plan
description for details.
GROUP AUTO AND HOMEOWNERS INSURANCE; LONG TERM CARE
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You may continue any coverage you had in the group auto and homeowners
insurance and the long term care insurance beyond your Release Date on the
same basis as any other former employee. Continuing that coverage, though,
is strictly between you and the applicable insurance company that provides
the coverage.
GROUP FINANCIAL SERVICES
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If you are enrolled for the group financial services at the time of your
Release Date, you may continue them for the remainder of the calendar year
if you make appropriate arrangements with the provider to make any required
payments then remaining for the services.
MISCELLANEOUS PROVISIONS
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UNUSED VACATION/SICK PAY
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Payment for unused earned and accrued vacation is included as part of the
lump sum severance benefit received under this agreement. You will not be
paid for any unused sick pay.
CREDIT UNION
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If you are a member of the Credit Union at the time of your Release Date,
you will be able to participate in the Credit Union after your Release
Date. You will need to contact them directly to discuss handling of credit
union business.
EDUCATIONAL REIMBURSEMENT
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If the course has been approved for reimbursement prior to your Release
Date and will be completed within six months of your Release Date, you will
be reimbursed for approved costs provided you complete the course within
policy guidelines.
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To be reimbursed, you must provide the following:
1. Your name, social security number, complete mailing address and
phone number;
2. An itemized receipt for tuition and fees issued by the
educational institution; and
3. A grade report from the educational institution.
All of the above information should be sent to: Employee Services,
Corporate Human Resources, Ashland Inc., 3499 Blazer Parkway, Lexington, KY
40509.
MATCHING GIFTS
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Participation in the Matching Gifts Program will cease upon your Release
Date.
UNEMPLOYMENT COMPENSATION
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State laws control whether you are eligible to receive unemployment
compensation. If you decide to file for unemployment compensation, the
Company is obligated to inform the state's unemployment commission of the
nature of your termination.
EXPENSES
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If you have incurred any expenses that are reimbursable by the Company, you
should submit an approved Expense Report to your supervisor, along with
required receipts immediately. In the event there is an outstanding balance
owed on your Corporate American Express or Purchasing Card account on your
Release Date, Ashland will make deductions from your severance benefits in
order to cover the balances due for (i) any authorized expenses for which
you have already received reimbursement from the Company but have not yet
remitted to American Express, or (ii) for any charges on your account(s)
that are not properly reimbursable under Ashland's reimbursement Policies.
VERIFICATION OF EMPLOYMENT AND NONDISPARAGEMENT
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The Company will only verify dates of employment and last job title,
department and work location. The Company will only release other
information concerning your employment as required by law, or at your
request and with your written consent. The Company further agrees that it
will not make any oral or written communication to any person or entity
which disparages you, or has the effect of damaging your reputation, and
that, if any inquiry is made concerning your employment, no negative
reference of any kind will be made; provided, that this prohibition shall
not be applied to prevent the Company or its representatives from providing
truthful testimony in compliance with a lawful subpoena or court order, or
as otherwise may be required by law.
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EMPLOYEE ASSISTANCE PROGRAM
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Your participation in the Employee Assistance Program will end on your
Release Date
FUTURE CORRESPONDENCE
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Any future information from the Company will be sent to the address you
currently have on file (i.e. employee benefit information, W-2's, etc.).
Should your address change in the near future you should contact the HR
Service Center at (800) 782-4669.
IMPORTANT NOTE ABOUT THIS SUMMARY
---------------------------------
DETAILS ON THE BENEFITS FROM THE EMPLOYEE BENEFIT PLANS DISCUSSED ABOVE ARE
PROVIDED IN THE SUMMARY PLAN DESCRIPTION BOOKLET FOR EACH PLAN. IN ALL
EVENTS, THE RIGHTS AND OBLIGATIONS OF THE COMPANY AND ALL COVERED
EMPLOYEES, BENEFICIARIES OR OTHER CLAIMANTS ARE GOVERNED SOLELY BY THE
TERMS OF THE OFFICIAL DOCUMENTS UNDER WHICH EACH PARTICULAR PLAN, POLICY OR
PROGRAM IS OPERATED.
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ADDENDUM TO RETIREMENT ELIGIBLE SUMMARY OF
EMPLOYEE BENEFITS AND MISCELLANEOUS PROVISIONS
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INCENTIVE COMPENSATION
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You will not be eligible to participate in the Ashland Inc. Incentive
Compensation Plan for FY 2007.
LTIP
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If and when payments are made, if eligible, you shall receive payment in
cash of any portion of the amount(s) you would have received under
Ashland's Long Term Incentive Plans for the 2005-2007 and 2006-2008 plan
cycles. You will not be eligible to participate in the 2007-2009 plan
cycle. Payment under these plans will be pro-rated through your Release
Date, and based on actual Ashland Inc. measures (as specified in the plans
and your awards under the plans) through the entire three-year plan cycles
(including adjustments for unusual items).
DEFERRED COMPENSATION
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Upon your Release Date, you shall receive distribution of your "DCP"
account(s) in accordance with your DCP election(s) subject the requirements
of Code Section 409A. Any changes regarding the distribution of your DCP
account(s) must be made in accordance with plan terms and are subject to
the requirements of Code Section 409A.
FINANCIAL PLANNING
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You shall be reimbursed for eligible financial planning expenses incurred
through the end of calendar year in which your Release Date occurs and the
following calendar year.
OUTPLACEMENT ASSISTANCE
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You will be provided with executive level outplacement assistance for the
12-month period following your Release Date, to assist you in your search
and transition into other employment. This assistance will be provided for
you at the Company's expense. Please contact your Human Resources
Representative for more information about this benefit.
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EXECUTIVE PHYSICALS
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You shall be eligible for an Executive Physical during the calendar year in
which your Release Date occurs and the following calendar year.
NON-QUALIFIED EXCESS BENEFIT PENSION PLAN AND SERP
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If eligible, and if you have a vested benefit under the Non-qualified
Excess Benefit Pension Plan and/or the SERP, you will be entitled to
receive the benefit provided under such plan in accordance with the terms
of each plan and subject to the requirements of Code Section 409A. For
purposes of determining your benefits under the Non-qualified Excess
Benefit Pension Plan, your compensation history will be determined as of
your Release Date. For purposes of determining your benefits under the
SERP, your compensation history will be determined using the seven (7) year
period ending on your Release Date.
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R E M I N D E R
===============
Once You Have Signed Both Originals of This
Document, Please Return Both Original Signed
Agreements To:
Susan Esler
Vice President Human Resources
Ashland Inc.
50 E RiverCenter Boulevard
PO Box 391
Covington, KY 41012
A Fully Executed Original Agreement will
be returned to your home address.
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