Exhibit 10.25
 

DIRECTOR/OFFICER INDEMNIFICATION AGREEMENT
 
This [Director] [Officer] Indemnification Agreement, dated as of ___________ ,
200__ (this " Agreement "), is made by and between Eastman Chemical Company, a
Delaware corporation (the " Company "), and _____________________ (" Indemnitee
").
RECITALS :
 
A.  Section 141 of the Delaware General Corporation Law provides that the
business and affairs of a corporation shall be managed under the direction of
its board of directors.
 
B.  Pursuant to Sections 141 and 142 of the Delaware General Corporation Law,
significant authority with respect to the management of the Company has been
delegated to the officers of the Company.
 
C.  By virtue of the managerial prerogatives vested in the directors and
officers of a Delaware corporation, directors and officers act as fiduciaries of
the corporation and its stockholders.
 
D.  Thus, it is critically important to the Company and its stockholders that
the Company be able to attract and retain the most capable persons reasonably
available to serve as directors and officers of the Company.
 
E.  In recognition of the need for corporations to be able to induce capable and
responsible persons to accept positions in corporate management, Delaware law
authorizes (and in some instances requires) corporations to indemnify their
directors and officers, and further authorizes corporations to purchase and
maintain insurance for the benefit of their directors and officers.
 
F.  The Delaware courts have recognized that indemnification by a corporation
serves the dual policies of (1) allowing corporate officials to resist
unjustified lawsuits, secure in the knowledge that, if vindicated, the
corporation will bear the expense of litigation and (2) encouraging capable
women and men to serve as corporate directors and officers, secure in the
knowledge that the corporation will absorb the costs of defending their honesty
and integrity.
 
G.  The number of lawsuits challenging the judgment and actions of directors and
officers of Delaware corporations, the costs of defending those lawsuits and the
threat to directors’ and officers’ personal assets have all materially increased
over the past several years, chilling the willingness of capable women and men
to undertake the responsibilities imposed on corporate directors and officers.
 
H.  Recent federal legislation and rules adopted by the Securities and Exchange
Commission and the national securities exchanges have exposed such directors and
officers to new and substantially broadened civil liabilities.
 

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Exhibit 10.25
 

I.  Under Delaware law, a director’s and officer’s right to be reimbursed for
the costs of defense of criminal actions, whether such claims are asserted under
state or federal law, does not depend upon the merits of the claims asserted
against the director or officer and is separate and distinct from any right to
indemnification the director or officer may be able to establish.
 
J.  Indemnitee is, or will be, a director and officer of the Company and his/her
willingness to serve in such capacity is predicated, in substantial part, upon
the Company’s willingness to indemnify him/her in accordance with the principles
reflected above, to the fullest extent permitted by the laws of the state of
Delaware, and upon the other undertakings set forth in this Agreement.
 
K.  Therefore, in recognition of the need to provide Indemnitee with substantial
protection against personal liability, in order to procure Indemnitee’s
continued service as a director and officer of the Company and to enhance
Indemnitee’s ability to serve the Company in an effective manner, and in order
to provide such protection pursuant to express contract rights (intended to be
enforceable irrespective of, among other things, any amendment to the Company’s
certificate of incorporation or bylaws (collectively, the " Constituent
Documents "), any change in the composition of the Company’s Board of Directors
(the " Board ") or any change-in-control or business combination transaction
relating to the Company), the Company wishes to provide in this Agreement for
the indemnification of and the advancement of Expenses to Indemnitee as set
forth in this Agreement and for the continued coverage of Indemnitee under the
Company’s directors’ and officers’ liability insurance policies.
 
L.  In light of the considerations referred to in the preceding recitals, it is
the Company’s intention and desire that the provisions of this Agreement be
construed liberally, subject to their express terms, to maximize the protections
to be provided to Indemnitee hereunder.
 
AGREEMENT :
 
NOW, THEREFORE, the parties hereby agree as follows: 
 
1.  Certain Definitions. In addition to terms defined elsewhere herein, the
following terms have the following meanings when used in this Agreement with
initial capital letters:
 

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Exhibit 10.25
 

  (a)  "Change in Control" means the occurrence after the date of this Agreement
of any of the following events:
 
    (i)  the acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person" ) of Beneficial
Ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
("Beneficial Ownership") of 15% or more of the combined voting power of the
then-outstanding Voting Stock of the Company; provided , however , that:
 
    (A)   for purposes of this Section 1(a)(i), the following acquisitions shall
not constitute a Change in Control: (1) any acquisition of Voting Stock of the
Company directly from the Company that is approved by a majority of the
Incumbent Directors, (2) any acquisition of Voting Stock of the Company by the
Company or any Subsidiary, (3) any acquisition of Voting Stock of the Company by
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any Subsidiary, and (4) any acquisition of Voting Stock of the
Company by any Person pursuant to a Business Combination that complies with
clauses (1), (2) and (3) of Section 1(a)(iii) below;
 
    (B)  if any Person acquires Beneficial Ownership of 15% or more of combined
voting power of the then-outstanding Voting Stock of the Company as a result of
a transaction described in clause (A)(1) of Section 1(a)(i) and such Person
thereafter becomes the Beneficial Owner of any additional shares of Voting Stock
of the Company representing 1% or more of the then-outstanding Voting Stock of
the Company, other than in an acquisition directly from the Company that is
approved by a majority of the Incumbent Directors or other than as a result of a
stock dividend, stock split or similar transaction effected by the Company in
which all holders of Voting Stock are treated equally, such subsequent
acquisition shall be deemed to constitute a Change in Control;
 
    (C) a Change in Control will not be deemed to have occurred if a Person
acquires Beneficial Ownership of 15% or more of the Voting Stock of the Company
as a result of a reduction in the number of shares of Voting Stock of the
Company outstanding unless and until such Person thereafter becomes the
Beneficial Owner of any additional shares of Voting Stock of the Company
representing 1% or more of the then-outstanding Voting Stock of the Company,
other than in an acquisition directly from the Company that is approved by a
majority of the Incumbent Directors or other than as a result of a stock
dividend, stock split or similar transaction effected by the Company in which
all holders of Voting Stock are treated equally; and

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Exhibit 10.25
 

  (D) if at least a majority of the Incumbent Directors determine that a Person
has acquired Beneficial Ownership of 15% or more of the Voting Stock of the
Company inadvertently, and such Person divests as promptly as practicable a
sufficient number of shares so that such Person Beneficially Owns less than 15%
of the Voting Stock of the Company, then no Change in Control shall have
occurred as a result of such Person’s acquisition; or
 
    (ii)  a majority of the Directors are not Incumbent Directors; or
 
    (iii)  the consummation of a reorganization, merger or consolidation, or
sale or other disposition of all or substantially all of the assets of the
Company or the acquisition of assets of another corporation, or other
transaction (each, a "Business Combination" ), unless, in each case, immediately
following such Business Combination (A) all or substantially all of the
individuals and entities who were the Beneficial Owners of Voting Stock of the
Company immediately prior to such Business Combination Beneficially Own,
directly or indirectly, more than 60% of the combined voting power of the then
outstanding shares of Voting Stock of the entity resulting from such Business
Combination (including, without limitation, an entity which as a result of such
transaction owns the Company or all or substantially all of the Company’s assets
either directly or through one or more subsidiaries), (B) no Person (other than
the Company, such entity resulting from such Business Combination, or any
employee benefit plan (or related trust) sponsored or maintained by the Company,
any Subsidiary or such entity resulting from such Business Combination)
Beneficially Owns 15% or more of the combined voting power of the then
outstanding shares of Voting Stock of the entity resulting from such Business
Combination, and (C) a majority of the members of the Board of Directors of the
entity resulting from such Business Combination were Incumbent Directors at the
time of the execution of the initial agreement or of the action of the Board
providing for such Business Combination; or
 
    (iv)  approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company, except pursuant to a Business Combination that
complies with clauses (A), (B) and (C) of Section 1(a)(iii).
 

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 Exhibit 10.25

 

 
    (v)  For purposes of this Section 1(a), the following terms shall have the
following meanings when used herein with initial capital letters:
(A)  "Exchange Act " shall mean the Securities Exchange Act of 1934, as amended.
 
(B)  "Incumbent Directors" means the individuals who, as of the date hereof, are
directors of the Company and any individual becoming a director subsequent to
the date hereof (including other Incumbent Directors who first became directors
after the date hereof) whose election, nomination for election by the Company’s
stockholders, or appointment, was approved by a vote of at least two-thirds of
the then Incumbent Directors (either by a specific vote or by approval of the
proxy statement of the Company in which such person is named as a nominee for
director, without objection to such nomination); provided , however , that an
individual shall not be an Incumbent Director if such individual’s election or
appointment to the Board occurs as a result of an actual or threatened election
contest (as described in Rule 14a-12(c) of the Exchange Act) with respect to the
election or removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board.
 
(C)  "Subsidiary" means an entity in which the Company directly or indirectly
Beneficially Owns 50% or more of the outstanding Voting Stock.
 
(D)  "Voting Stock" means securities entitled to vote generally in the election
of directors (or similar governing bodies).
 
(b) "Claim " means (i) any threatened, asserted, pending or completed claim,
demand, action, suit or proceeding, whether civil, criminal, administrative,
arbitrative, investigative or other, and whether made pursuant to federal, state
or other law; and (ii) any inquiry or investigation, whether threatened,
asserted, pending or completed, by the Company or any other Person, including
without limitation any federal, state or other governmental entity, that
Indemnitee determines might lead to the institution of any such claim, demand,
action, suit or proceeding. For the avoidance of doubt, the Company intends
indemnity to be provided hereunder in respect of acts or failure to act prior
to, on or after the date hereof.
 
(c)"Controlled Affiliate" means any corporation, limited liability company,
partnership, joint venture, trust or other entity or enterprise, whether or not
for profit, that is directly or indirectly controlled by the Company. For
purposes of this definition, "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of an entity or enterprise, whether through the ownership of voting
securities, through other voting rights, by contract or otherwise; provided that
direct or indirect Beneficial Ownership of capital stock or other interests in
an entity or enterprise entitling the holder to cast 15% or more of the total
number of votes generally entitled to be cast in the election of directors (or
persons performing comparable functions) of such entity or enterprise shall be
deemed to constitute control for purposes of this definition.
 
 

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 Exhibit 10.25

 

 
(d) "Disinterested Director " means a director of the Company who is not and was
not a party to the Claim in respect of which indemnification is sought by
Indemnitee.
 
(e) "Expenses " means attorneys’ and experts’ fees and expenses and all other
costs and expenses paid or payable in connection with investigating, defending,
being a witness in or participating in (including on appeal), or preparing to
investigate, defend, be a witness in or participate in (including on appeal),
any Claim.
 
(f) "Indemnifiable Claim " means any Claim based upon, arising out of or
resulting from (i) any threatened, asserted, pending or completed claim, demand,
action, suit, proceeding, inquiry or investigation regarding the act or failure
to act by Indemnitee in his or her capacity as a director, officer, employee or
agent of the Company or as a director, officer, employee, member, manager,
trustee or agent of any other corporation, limited liability company,
partnership, joint venture, trust or other entity or enterprise, whether or not
for profit, as to which Indemnitee is or was serving at the request of the
Company as a director, officer, employee, member, manager, trustee or agent,
(ii) any threatened, asserted, pending or completed claim, demand, action, suit,
proceeding, inquiry or investigation regarding the act or failure to act by
Indemnitee in respect of any business, transaction, communication, filing,
disclosure or other activity of the Company or any other entity or enterprise
referred to in clause (i) of this sentence, or (iii) Indemnitee’s status as a
current or former director, officer, employee or agent of the Company or as a
current or former director, officer, employee, member, manager, trustee or agent
of the Company or any other entity or enterprise referred to in clause (i) of
this sentence or any actual, alleged or suspected act or failure to act by
Indemnitee in connection with any obligation or restriction imposed upon
Indemnitee by reason of such status. In addition to any service at the actual
request of the Company, for purposes of this Agreement, Indemnitee shall be
deemed to be serving or to have served at the request of the Company as a
director, officer, employee, member, manager, trustee or agent of another entity
or enterprise if Indemnitee is or was serving as a director, officer, employee,
member, manager, trustee or agent of such entity or enterprise and (i) such
entity or enterprise is or at the time of such service was a Controlled
Affiliate, (ii) such entity or enterprise is or at the time of such service was
an employee benefit plan (or related trust) sponsored or maintained by the
Company or a Controlled Affiliate, or (iii) the Company or a Controlled
Affiliate (by action of the Board, any committee thereof or the Company's Chief
Executive Officer (" CEO ") (other than as the CEO him or herself)) caused or
authorized Indemnitee to be nominated, elected, appointed, designated, employed,
engaged or selected to serve in such capacity.
 
(g) "Indemnifiable Losses" means any and all Losses relating to, arising out of
or resulting from any Indemnifiable Claim.

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Exhibit 10.25

 
(h) "Independent Counsel " means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither presently is, nor in the
past five years has been, retained to represent: (i) the Company (or any
Subsidiary) or Indemnitee in any matter material to either such party (other
than with respect to matters concerning the Indemnitee under this Agreement, or
of other indemnitees under similar indemnification agreements) or (ii) any other
named (or, as to a threatened matter, reasonably likely to be named) party to
the Indemnifiable Claim giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or Indemnitee in an action to determine Indemnitee’s rights under this
Agreement.
 
(i) "Losses " means any and all Expenses, damages, losses, liabilities,
judgments, fines, penalties (whether civil, criminal or other) and amounts paid
or payable in settlement, including without limitation all interest, assessments
and other charges paid or payable in connection with or in respect of any of the
foregoing.
 
2.  Indemnification Obligation. Subject only to Section 7 and to the proviso in
this Section, the Company shall indemnify, defend and hold harmless Indemnitee,
to the fullest extent permitted or required by the laws of the State of Delaware
in effect on the date hereof or as such laws may from time to time hereafter be
amended to increase the scope of such permitted indemnification, against any and
all Indemnifiable Claims and Indemnifiable Losses; provided , however , that,
except as provided in Sections 5 and 20, Indemnitee shall not be entitled to
indemnification pursuant to this Agreement in connection with any Claim
initiated by Indemnitee against the Company or any director or officer of the
Company unless the Company has joined in or consented to the initiation of such
Claim. The Company acknowledges that the foregoing obligation is substantially
broader than that now provided by applicable law and the Company’s Constituent
Documents and intends that it be interpreted consistently with this Section and
the recitals to this Agreement.

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Exhibit 10.25

 
3.  Advancement of Expenses. Indemnitee shall have the right to advancement by
the Company prior to the final disposition of any Indemnifiable Claim of any and
all Expenses relating to, arising out of or resulting from any Indemnifiable
Claim paid or incurred by Indemnitee or which Indemnitee determines are
reasonably likely to be paid or incurred by Indemnitee. Without limiting the
generality or effect of any other provision hereof, Indemnitee’s right to such
advancement is not subject to the satisfaction of any standard of conduct.
Without limiting the generality or effect of the foregoing, within five business
days after any request by Indemnitee, the Company shall, in accordance with such
request (but without duplication), (a) pay such Expenses on behalf of
Indemnitee, (b) advance to Indemnitee funds in an amount sufficient to pay such
Expenses, or (c) reimburse Indemnitee for such Expenses; provided that
Indemnitee shall repay, without interest any amounts actually advanced to
Indemnitee that, at the final disposition of the Indemnifiable Claim to which
the advance related, were in excess of amounts paid or payable by Indemnitee in
respect of Expenses relating to, arising out of or resulting from such
Indemnifiable Claim. In connection with any such payment, advancement or
reimbursement, at the request of the Company, Indemnitee shall execute and
deliver to the Company an undertaking, which need not be secured and shall be
accepted without reference to Indemnitee’s ability to repay the Expenses, by or
on behalf of the Indemnitee, to repay any amounts paid, advanced or reimbursed
by the Company in respect of Expenses relating to, arising out of or resulting
from any Indemnifiable Claim in respect of which it shall have been determined,
following the final disposition of such Indemnifiable Claim and in accordance
with Section 7, that Indemnitee is not entitled to indemnification hereunder.
 
4.  Indemnification for Additional Expenses. Without limiting the generality or
effect of the foregoing, the Company shall indemnify and hold harmless
Indemnitee against and, if requested by Indemnitee, shall reimburse Indemnitee
for, or advance to Indemnitee, within five business days of such request, any
and all Expenses paid or incurred by Indemnitee or which Indemnitee determines
are reasonably likely to be paid or incurred by Indemnitee in connection with
any Claim made, instituted or conducted by Indemnitee for (a) indemnification or
reimbursement or advance payment of Expenses by the Company under any provision
of this Agreement, or under any other agreement or provision of the Constituent
Documents now or hereafter in effect relating to Indemnifiable Claims, and/or
(b) recovery under any directors’ and officers’ liability insurance policies
maintained by the Company, regardless in each case of whether Indemnitee
ultimately is determined to be entitled to such indemnification, reimbursement,
advance or insurance recovery, as the case may be; provided , however , that
Indemnitee shall return, without interest, any such advance of Expenses (or
portion thereof) which remains unspent at the final disposition of the Claim to
which the advance related.
 

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  Exhibit 10.25

 

 
5.  Partial Indemnity. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of any
Indemnifiable Loss but not for all of the total amount thereof, the Company
shall nevertheless indemnify Indemnitee for the portion thereof to which
Indemnitee is entitled.
 
6.  Procedure for Notification . To obtain indemnification under this Agreement
in respect of an Indemnifiable Claim or Indemnifiable Loss, Indemnitee shall
submit to the Company a written request therefor, including a brief description
(based upon information then available to Indemnitee) of such Indemnifiable
Claim or Indemnifiable Loss. If, at the time of the receipt of such request, the
Company has directors’ and officers’ liability insurance in effect under which
coverage for such Indemnifiable Claim or Indemnifiable Loss is potentially
available, the Company shall give prompt written notice of such Indemnifiable
Claim or Indemnifiable Loss to the applicable insurers in accordance with the
procedures set forth in the applicable policies. The Company shall provide to
Indemnitee a copy of such notice delivered to the applicable insurers, and
copies of all subsequent correspondence between the Company and such insurers
regarding the Indemnifiable Claim or Indemnifiable Loss, in each case
substantially concurrently with the delivery or receipt thereof by the Company.
The failure by Indemnitee to timely notify the Company of any Indemnifiable
Claim or Indemnifiable Loss shall not relieve the Company from any liability
hereunder unless, and only to the extent that, the Company did not otherwise
learn of such Indemnifiable Claim or Indemnifiable Loss and such failure results
in forfeiture by the Company of substantial defenses, rights or insurance
coverage.
 
7.  Determination of Right to Indemnification .
 
    (a)  To the extent that Indemnitee shall have been successful on the merits
or otherwise in defense of any Indemnifiable Claim or any portion thereof or in
defense of any issue or matter therein, including without limitation dismissal
without prejudice, Indemnitee shall be indemnified against all Indemnifiable
Losses relating to, arising out of or resulting from such Indemnifiable Claim in
accordance with Section 2 and no Standard of Conduct Determination (as defined
in Section 7(b)) shall be required. Without limiting the generality or effect of
the foregoing, any Claim that is settled in whole or in part or withdrawn will
be deemed to be subject to this Section 7(a).

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Exhibit 10.25
 

 
    (b)  To the extent that the provisions of Section 7(a) are inapplicable to
an Indemnifiable Claim that shall have been finally disposed of, any
determination of whether Indemnitee has satisfied any applicable standard of
conduct under Delaware law that is a legally required condition precedent to
indemnification of Indemnitee hereunder against Indemnifiable Losses relating
to, arising out of or resulting from such Indemnifiable Claim (a " Standard of
Conduct Determination ") shall be made as follows: (i) if a Change of Control
shall not have occurred, or if a Change of Control shall have occurred but
Indemnitee shall have requested that the Standard of Conduct Determination be
made pursuant to this clause (i), (A) by a majority vote of the Disinterested
Directors, even if less than a quorum of the Board, (B) if such Disinterested
Directors so direct, by a majority vote of a committee of Disinterested
Directors designated by a majority vote of all Disinterested Directors, or
(C) if there are no such Disinterested Directors, by Independent Counsel in a
written opinion addressed to the Board, a copy of which shall be delivered to
Indemnitee; and (ii) if a Change in Control shall have occurred and Indemnitee
shall not have requested that the Standard of Conduct Determination be made
pursuant to clause (i), by Independent Counsel in a written opinion addressed to
the Board, a copy of which shall be delivered to Indemnitee. Upon reasonable
advance request, Indemnitee shall cooperate with reasonable requests of the
individual or firm making such Standard of Conduct Determination, including
providing to such Person documentation or information which is not privileged or
otherwise protected from disclosure and which is reasonably available to
Indemnitee and reasonably necessary to such determination without incurring any
unreimbursed cost in connection therewith. The Company shall indemnify and hold
harmless Indemnitee against and, if requested by Indemnitee, shall reimburse
Indemnitee for, or advance to Indemnitee, within five business days of such
request, any and all costs and expenses (including attorneys’ and experts’ fees
and expenses) incurred by Indemnitee in so cooperating with the Person making
such Standard of Conduct Determination.
 
    (c)  The Company shall use its best efforts to cause any Standard of Conduct
Determination required under Section 7(b) to be made as promptly as practicable.
If (i) the Person empowered or selected under Section 7 to make the Standard of
Conduct Determination shall not have made a determination within 30 calendar
days after the later of (A) receipt by the Company of written notice from
Indemnitee advising the Company of the final disposition of the applicable
Indemnifiable Claim (the date of such receipt being the " Notification Date ")
and (B) the selection of an Independent Counsel, if such determination is to be
made by Independent Counsel, that is permitted under the provisions of
Section 7(e) to make such determination and (ii) Indemnitee shall have fulfilled
his/her obligations set forth in the second sentence of Section 7(b), then
Indemnitee shall be deemed to have satisfied the applicable standard of conduct;
provided that such 30-day period may be extended for a reasonable time, not to
exceed an additional 30 calendar days, if the Person making such determination
in good faith requires such additional time for the obtaining or evaluation or
documentation and/or information relating thereto.

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Exhibit 10.25
 

 
    (d)  If (i) Indemnitee shall be entitled to indemnification hereunder
against any Indemnifiable Losses pursuant to Section 7(a), (ii) no determination
of whether Indemnitee has satisfied any applicable standard of conduct under
Delaware law is a legally required condition precedent to indemnification of
Indemnitee hereunder against any Indemnifiable Losses, or (iii) Indemnitee has
been determined or deemed pursuant to Section 7(b) or (c) to have satisfied any
applicable standard of conduct under Delaware law which is a legally required
condition precedent to indemnification of Indemnitee hereunder against any
Indemnifiable Losses, then the Company shall pay to Indemnitee, within five
business days after the later of (x) the Notification Date in respect of the
Indemnifiable Claim or portion thereof to which such Indemnifiable Losses are
related, out of which such Indemnifiable Losses arose or from which such
Indemnifiable Losses resulted and (y) the earliest date on which the applicable
criterion specified in clause (i), (ii) or (iii) above shall have been
satisfied, an amount equal to the amount of such Indemnifiable Losses.

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Exhibit 10.25
 

 
    (e)  If a Standard of Conduct Determination is required to be, but has not
been, made by Independent Counsel pursuant to Section 7(b)(i), the Independent
Counsel shall be selected by the Board or a Board Committee, and the Company
shall give written notice to Indemnitee advising him or her of the identity of
the Independent Counsel so selected. If a Standard of Conduct Determination is
required to be, or to have been, made by Independent Counsel pursuant to
Section 7(b)(ii), the Independent Counsel shall be selected by Indemnitee, and
Indemnitee shall give written notice to the Company advising it of the identity
of the Independent Counsel so selected. In either case, Indemnitee or the
Company, as applicable, may, within five business days after receiving written
notice of selection from the other, deliver to the other a written objection to
such selection; provided , however , that such objection may be asserted only on
the ground that the Independent Counsel so selected does not satisfy the
criteria set forth in the definition of "Independent Counsel" in Section 1(h),
and the objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the Person so selected shall
act as Independent Counsel. If such written objection is properly and timely
made and substantiated, (i) the Independent Counsel so selected may not serve as
Independent Counsel unless and until such objection is withdrawn or a court has
determined that such objection is without merit and (ii) the non-objecting party
may, at its option, select an alternative Independent Counsel and give written
notice to the other party advising such other party of the identity of the
alternative Independent Counsel so selected, in which case the provisions of the
two immediately preceding sentences and clause (i) of this sentence shall apply
to such subsequent selection and notice. If applicable, the provisions of
clause (ii) of the immediately preceding sentence shall apply to successive
alternative selections. If no Independent Counsel that is permitted under the
foregoing provisions of this Section 7(e) to make the Standard of Conduct
Determination shall have been selected within 30 calendar days after the Company
gives its initial notice pursuant to the first sentence of this Section 7(e) or
Indemnitee gives its initial notice pursuant to the second sentence of this
Section 7(e), as the case may be, either the Company or Indemnitee may petition
the Court of Chancery of the State of Delaware for resolution of any objection
which shall have been made by the Company or Indemnitee to the other’s selection
of Independent Counsel and/or for the appointment as Independent Counsel of a
person or firm selected by the Court or by such other person as the Court shall
designate, and the person or firm with respect to whom all objections are so
resolved or the person or firm so appointed will act as Independent Counsel. In
all events, the Company shall pay all of the reasonable fees and expenses of the
Independent Counsel incurred in connection with the Independent Counsel’s
determination pursuant to Section 7(b).

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Exhibit 10.25
 

 
  8.  Presumption of Entitlement.

(a)  Notwithstanding any other provision hereof, in making any Standard of
Conduct Determination, the Person making such determination shall presume that
Indemnitee has satisfied the applicable standard of conduct, and the Company may
overcome such presumption only by its adducing clear and convincing evidence to
the contrary. Any Standard of Conduct Determination that is adverse to
Indemnitee may be challenged by the Indemnitee in the Court of Chancery of the
State of Delaware. No determination by the Company (including by its directors
or any Independent Counsel) that Indemnitee has not satisfied any applicable
standard of conduct shall be a defense to any Claim by Indemnitee for
indemnification or reimbursement or advance payment of Expenses by the Company
hereunder or create a presumption that Indemnitee has not met any applicable
standard of conduct.

  9.  No Other Presumption. For purposes of this Agreement, the termination of
any Claim by judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendere or its equivalent,
will not create a presumption that Indemnitee did not meet any applicable
standard of conduct or that indemnification hereunder is otherwise not
permitted.

  10.  Non-Exclusivity. The rights of Indemnitee hereunder will be in addition
to any other rights Indemnitee may have under the Constituent Documents, or the
substantive laws of the Company’s jurisdiction of incorporation, any other
contract or otherwise (collectively, " Other Indemnity Provisions "); provided ,
however , that (a) to the extent that Indemnitee otherwise would have any
greater right to indemnification under any Other Indemnity Provision, Indemnitee
will without further action be deemed to have such greater right hereunder and
(b) to the extent that any change is made to any Other Indemnity Provision which
permits any greater right to indemnification than that provided under this
Agreement as of the date hereof, Indemnitee will be deemed to have such greater
right hereunder. The Company may not adopt any amendment to any of the
Constituent Documents the effect of which would be to deny, diminish or encumber
Indemnitee’s right to indemnification under this Agreement or any Other
Indemnity Provision.

180

     

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Exhibit 10.25
 

 
  11.  Liability Insurance and Funding. For the duration of Indemnitee’s service
as a director and/or officer of the Company and for not less than six years
thereafter, the Company shall cause to be maintained in effect policies of
directors’ and officers’ liability insurance providing coverage for directors
and/or officers of the Company that is at least as favorable in scope and amount
to that provided by the Company’s current policies of directors’ and officers’
liability insurance. Upon request, the Company shall provide Indemnitee or his
or her counsel with a copy of all directors’ and officers’ liability insurance
applications, binders, policies, declarations, endorsements and other related
materials, and shall provide Indemnitee with a reasonable opportunity to review
and comment on the same. Without limiting the generality or effect of the two
immediately preceding sentences, the Company shall not discontinue or
significantly reduce the scope or amount of coverage from one policy period to
the next (i)  without the prior approval thereof by a majority vote of the
Incumbent Directors, even if less than a quorum, or (ii) if at the time that any
such discontinuation or significant reduction in the scope or amount of coverage
is proposed there are no Incumbent Directors, without the prior written consent
of Indemnitee in his or her sole discretion. In all policies of directors’ and
officers’ liability insurance obtained by the Company, Indemnitee shall be named
as an insured in such a manner as to provide Indemnitee the same rights and
benefits, subject to the same limitations, as are accorded to the Company’s
directors and officers most favorably insured by such policy. Notwithstanding
the foregoing, (i) the Company may, but shall not be required to, create a trust
fund, grant a security interest or use other means, including without limitation
a letter of credit, to ensure the payment of such amounts as may be necessary to
satisfy its obligations to indemnify and advance expenses pursuant to this
Agreement and (ii) in renewing or seeking to renew any insurance hereunder, the
Company will not be required to expend more than 2.0 times the premium amount of
the immediately preceding policy period (equitably adjusted if necessary to
reflect differences in policy periods).
 
  12.  Subrogation. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the related rights
of recovery of Indemnitee against other Persons (other than Indemnitee’s
successors), including any entity or enterprise referred to in clause (i) of the
definition of "Indemnifiable Claim" in Section 1(f). Indemnitee shall execute
all papers reasonably required to evidence such rights (all of Indemnitee’s
reasonable Expenses, including attorneys’ fees and charges, related thereto to
be reimbursed by or, at the option of Indemnitee, advanced by the Company).
 
  13.  No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment to Indemnitee in respect of any Indemnifiable
Losses to the extent Indemnitee has otherwise already actually received payment
(net of Expenses incurred in connection therewith) under any insurance policy,
the Constituent Documents and Other Indemnity Provisions or otherwise (including
from any entity or enterprise referred to in clause (i) of the definition of
"Indemnifiable Claim" in Section 1(f)) in respect of such Indemnifiable Losses
otherwise indemnifiable hereunder.
 

181

     

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 Exhibit 10.25

 

 
  14.  Defense of Claims. The Company shall be entitled to participate in the
defense of any Indemnifiable Claim or to assume the defense thereof with counsel
reasonably satisfactory to the Indemnitee; provided that if Indemnitee
determines, after consultation with counsel selected by Indemnitee, that (a) the
use of counsel chosen by the Company to represent Indemnitee would present such
counsel with an actual or potential conflict, (b) the named parties in any such
Indemnifiable Claim (including any impleaded parties) include both the Company
and Indemnitee and Indemnitee shall conclude that there may be one or more legal
defenses available to him or her that are different from or in addition to those
available to the Company, (c) any such representation by such counsel would be
precluded under the applicable standards of professional conduct then
prevailing, or (d) Indemnitee has interests in the claim or underlying subject
matter that are different from or in addition to those of other Persons against
whom the Claim has been made or might reasonably be expected to be made, then
Indemnitee shall be entitled to retain separate counsel (but not more than one
law firm plus, if applicable, local counsel in respect of any particular
Indemnifiable Claim for all indemnitees in Indemnitee's circumstances) at the
Company’s expense. The Company shall not be liable to Indemnitee under this
Agreement for any amounts paid in settlement of any threatened or pending
Indemnifiable Claim effected without the Company’s prior written consent. The
Company shall not, without the prior written consent of the Indemnitee, effect
any settlement of any threatened or pending Indemnifiable Claim which the
Indemnitee is or could have been a party unless such settlement solely involves
the payment of money and includes a complete and unconditional release of the
Indemnitee from all liability on any claims that are the subject matter of such
Indemnifiable Claim. Neither the Company nor Indemnitee shall unreasonably
withhold its consent to any proposed settlement; provided that Indemnitee may
withhold consent to any settlement that does not provide a complete and
unconditional release of Indemnitee.
 
  15.  Successors and Binding Agreement.
 
(a)  The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation, reorganization or otherwise) to all or
substantially all of the business or assets of the Company, by agreement in form
and substance satisfactory to Indemnitee and its counsel, expressly to assume
and agree to perform this Agreement in the same manner and to the same extent
the Company would be required to perform if no such succession had taken place.
This Agreement shall be binding upon and inure to the benefit of the Company and
any successor to the Company, including without limitation any person acquiring
directly or indirectly all or substantially all of the business or assets of the
Company whether by purchase, merger, consolidation, reorganization or otherwise
(and such successor will thereafter be deemed the " Company " for purposes of
this Agreement), but shall not otherwise be assignable or delegatable by the
Company.
 
(b)  This Agreement shall inure to the benefit of and be enforceable by the
Indemnitee’s personal or legal representatives, executors, administrators,
heirs, distributees, legatees and other successors.
 

182

     

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 Exhibit 10.25

 

 
(c)  This Agreement is personal in nature and neither of the parties hereto
shall, without the consent of the other, assign or delegate this Agreement or
any rights or obligations hereunder except as expressly provided in
Sections 15(a) and 15(b). Without limiting the generality or effect of the
foregoing, Indemnitee’s right to receive payments hereunder shall not be
assignable, whether by pledge, creation of a security interest or otherwise,
other than by a transfer by the Indemnitee’s will or by the laws of descent and
distribution, and, in the event of any attempted assignment or transfer contrary
to this Section 15(c), the Company shall have no liability to pay any amount so
attempted to be assigned or transferred.
 
  16.  Notices. For all purposes of this Agreement, all communications,
including without limitation notices, consents, requests or approvals, required
or permitted to be given hereunder must be in writing and shall be deemed to
have been duly given when hand delivered or dispatched by electronic facsimile
transmission (with receipt thereof orally confirmed), or one business day after
having been sent for next-day delivery by a nationally recognized overnight
courier service, addressed to the Company (to the attention of the Secretary of
the Company) and to Indemnitee at the applicable address shown on the signature
page hereto, or to such other address as any party may have furnished to the
other in writing and in accordance herewith, except that notices of changes of
address will be effective only upon receipt.
 
  17.  Governing Law. The validity, interpretation, construction and performance
of this Agreement shall be governed by and construed in accordance with the
substantive laws of the State of Delaware, without giving effect to the
principles of conflict of laws of such State. The Company and Indemnitee each
hereby irrevocably consent to the jurisdiction of the Chancery Court of the
State of Delaware for all purposes in connection with any action or proceeding
which arises out of or relates to this Agreement, waive all procedural
objections to suit in that jurisdiction, including without limitation objections
as to venue or inconvenience, agree that service in any such action may be made
by notice given in accordance with Section 16 and also agree that any action
instituted under this Agreement shall be brought only in the Chancery Court of
the State of Delaware.
 
  18.  Validity. If any provision of this Agreement or the application of any
provision hereof to any Person or circumstance is held invalid, unenforceable or
otherwise illegal, the remainder of this Agreement and the application of such
provision to any other person or circumstance shall not be affected, and the
provision so held to be invalid, unenforceable or otherwise illegal shall be
reformed to the extent, and only to the extent, necessary to make it
enforceable, valid or legal. In the event that any court or other adjudicative
body shall decline to reform any provision of this Agreement held to be invalid,
unenforceable or otherwise illegal as contemplated by the immediately preceding
sentence, the parties thereto shall take all such action as may be necessary or
appropriate to replace the provision so held to be invalid, unenforceable or
otherwise illegal with one or more alternative provisions that effectuate the
purpose and intent of the original provisions of this Agreement as fully as
possible without being invalid, unenforceable or otherwise illegal.
 

183

     

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 Exhibit 10.25

 

 
  19.  Miscellaneous. No provision of this Agreement may be waived, modified or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by Indemnitee and the Company. No waiver by either party hereto at any
time of any breach by the other party hereto or compliance with any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
expressed or implied with respect to the subject matter hereof have been made by
either party that are not set forth expressly in this Agreement.
 
  20.  Legal Fees and Expenses. It is the intent of the Company that Indemnitee
not be required to incur legal fees and or other Expenses associated with the
interpretation, enforcement or defense of Indemnitee’s rights under this
Agreement by litigation or otherwise because the cost and expense thereof would
substantially detract from the benefits intended to be extended to Indemnitee
hereunder. Accordingly, without limiting the generality or effect of any other
provision hereof, if it should appear to Indemnitee that the Company has failed
to comply with any of its obligations under this Agreement or in the event that
the Company or any other person takes or threatens to take any action to declare
this Agreement void or unenforceable, or institutes any litigation or other
action or proceeding designed to deny, or to recover from, Indemnitee the
benefits provided or intended to be provided to Indemnitee hereunder, the
Company irrevocably authorizes the Indemnitee from time to time to retain
counsel of Indemnitee’s choice, at the expense of the Company as hereafter
provided, to advise and represent Indemnitee in connection with any such
interpretation, enforcement or defense, including without limitation the
initiation or defense of any litigation or other legal action, whether by or
against the Company or any director, officer, stockholder or other person
affiliated with the Company, in any jurisdiction. Notwithstanding any existing
or prior attorney-client relationship between the Company and such counsel, the
Company irrevocably consents to Indemnitee’s entering into an attorney-client
relationship with such counsel, and in that connection the Company and
Indemnitee agree that a confidential relationship shall exist between Indemnitee
and such counsel. Without limiting the generality or effect of any other
provision hereof or respect to whether Indemnitee prevails, in whole or in part,
in connection with any of the foregoing, the Company will pay and be solely
financially responsible for any and all attorneys’ and related fees and expenses
incurred by Indemnitee in connection with any of the foregoing.

184

     

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Exhibit 10.25
 

 
  21.  Certain Interpretive Matters. Unless the context of this Agreement
otherwise requires, (1) "it" or "its" or words of any gender include each other
gender, (2) words using the singular or plural number also include the plural or
singular number, respectively, (3) the terms "hereof," "herein," "hereby" and
derivative or similar words refer to this entire Agreement, (4) the terms
"Article," "Section," "Annex" or "Exhibit" refer to the specified Article,
Section, Annex or Exhibit of or to this Agreement, (5) the terms "include,"
"includes" and "including" will be deemed to be followed by the words "without
limitation" (whether or not so expressed), and (6) the word "or" is disjunctive
but not exclusive. Whenever this Agreement refers to a number of days, such
number will refer to calendar days unless business days are specified and
whenever action must be taken (including the giving of notice or the delivery of
documents) under this Agreement during a certain period of time or by a
particular date that ends or occurs on a non-business day, then such period or
date will be extended until the immediately following business day. As used
herein, "business day" means any day other than Saturday, Sunday or a United
States federal holiday .
 
  22.  Entire Agreement . This Agreement and the Constituent Documents
constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, between the parties hereto with respect
to the subject matter of this Agreement. Any prior agreements or understandings
between the parties hereto with respect to indemnification are hereby terminated
and of no further force or effect.
 
  23.  Counterparts. This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original but all of which together shall
constitute one and the same agreement.

185

     

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Exhibit 10.25
 

IN WITNESS WHEREOF, Indemnitee has executed and the Company has caused its duly
authorized representative to execute this Agreement as of the date first above
written.

EASTMAN CHEMICAL COMPANY
100 N. Eastman Road
Kingsport, TN 37660

By:    _________________________                       

[INDEMNITEE]
___________________________
___________________________
 
___________________________________________

    [Indemnitee Name]

 
  186