Ashland Settles Shareholder Litigation and Adopts Corporate Governance Changes

SAN DIEGO, Calif., Jan. 27, 2005 -- Ashland, Inc. today announced the implementation of significant corporate governance changes in connection with the settlement of shareholder derivative litigation filed in August 2002. Ashland is a diversified company whose products and services include new construction, specialty chemicals, lubricants, car-care products, chemical and plastics distribution and, global transportation fuel.

The derivative suit, brought by the Central Laborers' Pension Fund on behalf of Ashland against certain current and former Ashland directors and senior officers, alleged that the Board failed to adequately oversee company operations and protect shareholder value. The settlement announced today provides for improved governance procedures at Ashland and commits the Company to changes that extend beyond the corporate governance improvements required under the Sarbanes-Oxley Act of 2002.

"This is an important milestone for Ashland and its shareholders, as these changes will significantly increase shareholder input into how this company is governed," said lead plaintiffs' attorney, Darren Robbins of Lerach Coughlin Stoia Geller Rudman & Robbins LLP. "At Ashland and across the country, corporate directors are increasingly recognizing the importance of including shareholders in the governing processes."

As part of the settlement, Ashland will implement an innovative process that will directly involve Ashland shareholders in a process that should produce additional highly qualified candidates for election to the Ashland Board. Ashland will also significantly strengthen the Company's independence standards and require that at least two-thirds of the Board qualify as independent. The terms of the settlement also provide enhanced director stock ownership standards, and require that shareholder approval be obtained prior to the adoption of stock option plans for Ashland's officers or directors. The settlement also establishes a mandatory holding period for a portion of the Ashland shares acquired by the Company's directors and senior officers via option exercise.

"This settlement includes a package of corporate governance reforms with little precedent and positions Ashland to be at the forefront of corporate governance in America. It must not be forgotten that corporate officers and directors work for the benefit of and are accountable to shareholders," said Edward M. Smith, Chairman of the Central Laborers' Pension Fund.

"This settlement includes an unprecedented package of corporate governance reforms. With heightened independence standards and a board whose interests are aligned with shareholders through stock ownership, the Board will be well positioned to protect and serve the interests of Ashland and its public shareholders," said Richard Bennett of Lens Governance Advisors. "In particular, direct involvement by shareholders in the director nomination and election process is beneficial not only for shareholders of Ashland, but also to the movement by shareholders nationwide to improve corporate governance."

The plaintiff is represented by Lerach Coughlin, a 150-lawyer firm with offices in San Diego, San Francisco, Los Angeles, New York, Boca Raton, Washington, Houston, Philadelphia and Seattle. Lerach Coughlin is active in major litigation pending in federal and state courts throughout the United States. The firm has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. Lerach Coughlin lawyers have been responsible for more than $20 billion in aggregate recoveries. For more information about the firm, please visit the Lerach Coughlin Web site (http://www.lerachlaw.com/).