Exhibit 10.11

 
EASTMAN CHEMICAL COMPANY
 
EASTMAN UNIT PERFORMANCE PLAN
(amended and restated effective December 31, 2007)
 
ARTICLE 1. PURPOSE
 
Total cash compensation for all Company employees, including Plan participants,
is intended to be competitive with pay in the applicable labor market and in the
chemical industry for similar jobs when target levels of performance are
achieved. The Eastman Unit Performance Plan ("UPP", or the "Plan") is a variable
compensation plan for management level individuals at Eastman Chemical Company
(the "Company") and subsidiaries of the Company, as recommended by the Chief
Executive Officer ("CEO"))  and as designated by the Compensation and Management
Development Committee (the "Committee") of the Board of Directors. It is
designed to deliver a portion of annual cash compensation according to corporate
and organizational unit performance and the attainment of individual objectives
and expectations. The UPP is intended to provide an incentive for superior
business and individual performance, and to tie the interests of
management-level individuals to the performance of the Company's businesses and,
thereby, the interests of the Company and its stockholders.
 
ARTICLE 2. SUMMARY OF PLAN DESIGN
 
The UPP is designed so that a pool of dollars ("Award Pool") is generated for
each major functional organization (a "Unit") within the Company. For purposes
of this plan, the CEO shall be a participant in the CEO Unit Award Pool, and the
Committee shall be the "head" and "management" of the CEO Unit.

A Unit Award Pool will be determined by multiplying, for each participant in a
Unit:

1)  
Each participant's annual base pay rate on December 31 of the year in which
Company and Unit performance is measured (the "Performance Year"), times

2)  
The participant's "UPP Target Award Percentage", which is a target award
percentage, expressed as a percentage of annual base rate, and determined by the
participant's salary grade, times

3)  
A "Unit Performance Factor", expressed as a percentage and determined by pre-set
corporate and/or specified organizational unit ("Business Group Units")
performance goals. Generally, the Performance Factor can range from 0%, if
performance goals are not met, up to the maximum performance factor of 200% for
each UPP measure.

UPP Target Award Percentages are established by the Committee for executive
officers of the Company.   UPP Target Award Percentages for Plan participants
other than executive officers are determined by the CEO and reviewed by the
Committee.

The performance goals and correlative Performance Factors for each Unit will be
established as soon as practicable, either prior to the beginning of each
Performance Year or as soon as reasonably determinable at the beginning of the
Performance Year. The performance goals and correlative Performance Factors are
established by the Committee, based (in all cases except for the CEO) upon the
recommendation of the CEO.

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At the end of each Performance Year, the Committee will certify performance in
relation to the pre-established performance goals, thereby determining the
Performance Factor and Award Pool for each Unit. The CEO, after consultation
with the Company executive officers with management responsibility for the
affected Units, will determine whether, in his discretion, any adjustments to
the amounts of any of the Unit Award Pools is appropriate. Once the amount of
each Unit Award Pool has been determined within each Unit, management will
exercise discretion in allocating the Award Pool for individual payouts. The
payouts will be based on the attainment of individual objectives and
expectations established at the beginning of such Performance Year by Unit
management for each individual participant. Maximum potential for an individual
award could exceed an individual's assigned UPP Target Award Percentage
multiplied by the Unit Performance Factor, based on management's assessment of
individual performance. However, except in the case of the CEO Unit Award Pool
and the Unit Award Pool for the executive officers, the sum of all individual
awards cannot exceed the sum of all Unit Award Pools. As the Committee approves
executive officer awards and determines the CEO award, it may, in its
discretion, adjust the CEO Unit Award Pool and the Unit Award Pool for the
executive officers. Any adjustment to these Unit Award Pools will result in an
adjustment to the sum of all Unit Award Pools for the Company.
 
ARTICLE 3. ELIGIBILITY AND PARTICIPATION
 
3.01 General Eligibility

The UPP is designed for management-level individuals who have an impact on the
financial performance of the Company. Prior to or at the time performance goals
are established for a Performance Year, the Committee, upon the recommendation
of the CEO, will confirm in writing the eligibility criteria for participation
in the UPP for such Performance Year and the portion of each participant's total
annual compensation that is variable under the Plan.

3.02 New Participants and Job Changes During the Performance Year

Individuals who are appointed to positions eligible for UPP participation during
the Performance Year become eligible for participation on the first day of the
month of the appointment. Individuals who become participants during the
Performance Year will be eligible to receive a UPP award based on the discretion
of Unit management. Each participant's "Target UPP Variable Pay", (for each
participant, 1) his or her annual base pay rate, 2) multiplied by his or her UPP
Target Award Percentage, 3) multiplied by the Unit Performance Factor(s)) will
be allocated to a Unit Award Pool based upon the following process:

 
I.
The Performance Year will be divided into four, three-month (quarterly)
intervals (January 1 to March 31; April 1 to June 30; July 1 to September 30;
and October 1 to December 31)

 
II.
Anyone promoted into UPP, who changes UPP participation level, or who moves
between Units at any time during one of these three-month intervals will have a
portion of his/her Target UPP Variable Pay allocated to a Unit Award Pool as
follows:

Table 1. Promotion into UPP
Quarter
Date of Promotion
Prorated Percent of Target UPP Variable Pay Allocated to Unit Award Pool
1st
January 1 - March 31
100%
2nd
April 1 - June 30
75%
3rd
July 1 - September 30
50%
4th
October 1 - December 31
25%

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Table 2. Change in UPP participation level
 
Quarter
 
Date of Change in UPP participation level
Percent of Target UPP Variable Pay Prior to Change Allocated to Unit Award Pool
Percent of New Target UPP Variable Pay After the Change Allocated to Unit Award
Pool
1st
January 1 - March 31
0%
100%
2nd
April 1 - June 30
25%
75%
3rd
July 1 - September 30
50%
50%
4th
October 1 - December 31
75%
25%

Table 3. Terminations
Quarter
Date of Termination
Prorated Percent of Target UPP Variable Pay Allocated to Unit Award Pool
1st
January 1 - March 31
25%
2nd
April 1 - June 30
50%
3rd
July 1 - September 30
75%
4th
October 1 - December 31
100%

3.03 Terminations

In the event an eligible participant (1) retires, (2) dies, (3) becomes disabled
under the Eastman Long-Term Disability Plan, or (4) terminates employment as a
result of, pursuant to, or in connection with layoff, special separation,
divestiture, or similar circumstances, such person's Target UPP Variable Pay
will be allocated to his or her Unit's Award Pool for such Performance Year in
accordance with the process outlined in Section 3.02, Part II, Table 3, under
the column "Prorated Percent of Target UPP Variable Pay Allocated to Unit Award
Pool". He/she will be eligible to receive a UPP award for such Performance Year
at the sole discretion of the Unit management.

Participants who terminate employment with the Company for reasons other than
those specified under this Section 3.03 will be credited to a Unit Award Pool
and be eligible to receive an award under the UPP only if they were actively
employed on the last scheduled workday of the Performance Year.
 
ARTICLE 4. PERFORMANCE YEAR AND PERFORMANCE GOALS
 
4.01 Performance Year

The Plan's Performance Year shall be the calendar year beginning on January 1
and ending on December 31.

4.02 Performance Goals

Each year, the CEO will recommend to the Committee performance goals for each
Unit for a given Performance Year. Such performance goals may be for one or more
Units, for the Company as a whole, or for a combination of one or more Units and
the Company. Either by the first day of the Performance Year, or such later date
as is practicable, the Committee shall establish in writing, with respect to the
Performance Year, a target objective(s) with respect to such performance goals
and formulae or methods for computing the applicable Performance Factor(s) based
on the extent to which such performance goals are attained. Performance Factors
can range from 0%, if performance goals are not met, to the maximum performance
factors for each UPP measure. Performance goals for each measure may be based
upon any quantitative and objectively determinable business or financial
criteria, alone or in combination, as the CEO and the Unit heads shall deem
appropriate.

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Once established, performance goals for a particular Performance Year can only
be modified during the Performance Year in the event of a change in the
business, operations, corporate structure, capital structure, method of
conducting business, or other events or circumstances which render the
performance goals unsuitable. Any modification of performance goals during the
Performance Year requires the approval of the Committee.
 
ARTICLE 5. AWARD DETERMINATION
 
5.01 Certification of Performance

As soon as practicable following the availability of performance results for the
completed Performance Year, the Committee shall certify performance in relation
to the pre-established goals, thereby determining the Performance Factor(s) and
Award Pools for each Unit. To the extent the performance goals are expressed in
standard accounting terms, they shall be measured according to generally
accepted accounting principles as in existence on the date on which the
performance goals are established and without regard to any changes in such
principles after such date.

In determining whether the performance goals have been met, to the extent that
such goals are expressed in terms of financial performance, the Committee may
adjust the financial results for a Performance Year to exclude the effect of
unusual charges or income items or other events which are distortive of
financial results for the Performance Year. Notwithstanding actual performance,
the Committee may, in its sole discretion, adjust the amounts of the Unit Award
Pools to reflect overall Company performance and business and financial
conditions.

5.02 Calculation of Unit Award Pool and Individual Awards; Report to Committee

Based upon Company and/or Unit performance against the performance goals, the
Performance Factors are determined as provided in Sections 4.02 and 5.01. The
amount generated for each Unit Award Pool will equal the aggregate of the Target
UPP Variable Pay for each eligible participant in the Unit. The CEO, after
consultation with the Company executive officers with management responsibility
for the affected Units, will determine whether, in his discretion, any
adjustments to the amounts of any of the Unit Award Pools is appropriate. Once
the amount of each Unit Award Pool has been determined within each Unit,
management shall have the sole discretion to allocate the Unit Award Pool among
eligible participants, based on objective or subjective assessments of the
participants' achievement of pre­established goals and expectations for the
Performance Year. If the sum of individual awards as allocated by the Unit
management within a particular Unit exceeds the Award Pool amount for that Unit,
the Unit management shall make adjustments to individual awards to account for
the difference. In certain circumstances (e.g. participants transferring between
Units), however, awards in a Unit may exceed the Unit Award Pool. As a result,
corresponding adjustments must be made to another Unit Award Pool. The sum of
all individual awards shall not exceed the sum of all Unit Award Pools for the
Company. Final allocations of the Unit Award Pools shall be reported to the CEO,
who shall report the UPP results to the Committee. The Committee shall approve
the UPP award amounts for all executive officers of the Company, and shall
determine the UPP Award amount for the CEO. As the Committee approves executive
officer awards and determines the CEO award, it may, in its discretion, adjust
the CEO Unit Award Pool and the Unit Award Pool for the executive officers. Any
adjustment to these Unit Award Pools will result in an adjustment to the sum of
all Unit Award Pools for the Company.
 
ARTICLE 6. PAYMENT OF AWARDS

UPP award payments shall be made by the 15th day of March for performance in the
previous Performance Year., based upon the Unit management's allocation of
awards from the Unit Award Pools.

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ARTICLE 7. SALARY ADJUSTMENTS AND BENEFITS
 
7.01 Salary Adjustment Upon Entry Into the UPP

The UPP is a variable compensation program whereby participants may earn
compensation based upon corporate, organizational, and individual performance.
New participants to the Plan are immediately administered on the appropriate
rate schedule for their assigned salary grade. This may reduce or eliminate
promotional increases, depending upon the person's pay position in the rate
range of the new salary grade. Subsequent salary treatment will depend upon
pay/performance relationships for their assigned grade.

7.02 Salary Conversion Upon Withdrawal From the UPP

In unusual circumstances when it is necessary for an individual to be removed
from the Plan, the individual's base salary and target annual cash compensation
will be reviewed to ensure competitiveness with pay in the applicable labor
market and in the chemical industry for similar jobs when target levels of
performance are achieved. Should the removal from the Plan involve a reduction
in salary grade, base salary in the new salary grade will be selected based upon
the individual's applicable training and experience.

7.03 Relationship to Benefits

The UPP award payout is considered in calculating the basis for calculation of
certain benefits. For participants who are U. S.-based employees, base salary,
the actual UPP payout (if applicable), the actual Annual Performance Plan
("APP") payout (if applicable), and the actual Eastman Performance Plan ("EPP")
payout (if applicable), are included in calculating retirement benefits. For,
Participants who are non-U.S.-based employees, generally retirement benefits are
calculated using only base salary plus amounts earned under the UPP,  and APP,
and EPP; however, some countries have different rules concerning the pay that
must be counted in calculating retirement benefits, and non-U.S. based employees
should contact their human resources representatives if they have questions.
 
ARTICLE 8. OTHER TERMS AND CONDITIONS

8.01 Claims

No person shall have any legal claim to be granted an award under the Plan.
Except as may be otherwise required by law, payouts under the Plan shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, charge, garnishment, execution, or levy of any kind, either
voluntary or involuntary. Plan payouts shall be payable from the general assets
of the Company and no participant shall have any claim with respect to any
specific assets of the Company.

8.02 No Employment Rights

Neither the UPP nor any action taken under the UPP shall be construed as giving
any employee the right to be retained in the employ of the Company or to
maintain any participant's compensation at any level.

8.03 Withholding

For Participants who are U.S.-based employees, the Company shall have the power
and the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy Federal, state, and local taxes
(including the participant's OASDI and MEDI obligation) required by law to be
withheld. For Participants who are non-U. S. based employees, the Company shall
have the power and the right to deduct or withhold, or require a Participant to
remit to the Company, an amount sufficient to satisfy all applicable foreign and
local taxes required by law to be withheld.

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ARTICLE 9. ADMINISTRATION
 
9.01 Power and Authority of the Committee

The Committee shall have full power and authority to administer and interpret
the provisions of the Plan and to adopt such rules, regulations, agreements,
guidelines, and instruments for the administration of the Plan and for conduct
of its business as the Committee deems appropriate or advisable. The Committee
sets and interprets policy, confirms the individual participants in the UPP and
the amounts of variable pay under the UPP, establishes annual performance
measures and performance goals, certifies the extent to which performance goals
were satisfied under the Plan, and approves the UPP award amounts to
participants who are executive officers of the Company.

9.02 Committee's Delegation of Authority

The Committee shall have full power to delegate to any officer or employee of
the Company the authority to administer and interpret the procedural aspects of
the Plan, subject to the Plan's terms, including adopting and enforcing rules to
decide procedural and administrative issues.

9.03 Amending or Terminating the Plan

By action of the Committee, the Plan may be amended, modified, suspended, or
terminated, in whole or in part, at any time for any reason.
 
ARTICLE 10. PLAN AUDIT
 
The Senior Vice President, Human Resources, has responsibility for monitoring
and reporting on the administration and effectiveness of the Plan. The Senior
Vice President's role is to provide independent, objective appraisal and
guidance to both the Committee and the CEO, in the administration of the UPP.
Each year, the Senior Vice President will provide a formal review to the
Committee and the CEO.

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