AMENDED AND RESTATED
EASTMAN UNFUNDED RETIREMENT INCOME PLAN
Amended and Restated Effective December 31, 2008

165 
 

--------------------------------------------------------------------------------

 

EASTMAN UNFUNDED RETIREMENT INCOME PLAN
Amended and Restated Effective December 31, 2008

TABLE OF CONTENTS

ARTICLE ONE
167
 
Purpose of Plan
167
ARTICLE TWO
167
 
Definitions
167
ARTICLE THREE
168
 
Eligibility
168
ARTICLE FOUR
168
 
Benefits
168
ARTICLE FIVE
170
 
Administration
170
ARTICLE SIX
171
 
Amendment and Termination
171
ARTICLE SEVEN
171
 
Miscellaneous
171

166 
 

--------------------------------------------------------------------------------

 

EASTMAN UNFUNDED RETIREMENT INCOME PLAN

 
ARTICLE ONE
 
 
Purpose of Plan
 

1.1
This Plan implements the intent of providing retirement benefits by means of
both a funded and unfunded plan. This Plan is maintained primarily for the
purpose of providing deferred compensation for a select group of management or
highly compensated employees as described in Section 201(2) of the Employee
Retirement Income Security Act of 1974 and is designed to provide retirement
benefits payable out of the general assets of the Company where benefits cannot
be paid under the Funded Plan because of Code Section 401(a)(17) or Code Section
415 and the provisions of the Funded Plan which implement such Sections and/or
because deferred compensation is ignored in defining compensation for purposes
of calculating benefits under the Funded Plan.

The Plan originally was adopted effective January 1, 1994, amended, renamed and
restated effective January 1, 2002 and January 1, 2008 and subsequently amended
and restated again effective as of December 31, 2008 in order to comply with
Section 409A of the Internal Revenue Code of 1986, as amended.

 
ARTICLE TWO
 
 
Definitions
 

2.1
"Code" shall mean the Internal Revenue Code of 1986, as amended from time to
time.

2.2
"Company" shall mean Eastman Chemical Company, and any subsidiary and/or
affiliated corporation which is a participating employer under the Funded Plan,
except where a specific reference is made to a particular corporation.

2.3
"Compensation Committee" shall mean the Compensation and Management Development
Committee of the Board of Directors of the Company.

2.4
"Effective Date" shall mean January 1, 1994.  The Effective Date of this amended
and restated Plan document is December 31, 2008.  As permitted under the
guidance issued under Code Section 409A, this Plan does not contain provisions
retroactive to the effective date of Section 409A (January 1, 2005), but this
Plan has complied with Section 409A and guidance thereunder since the effective
date of such legislation.

2.5           "Employee" or "Participant" shall mean a participant in the Funded
Plan.

2.6
“Five-Payment Lump Sum” shall mean the automatic form of payment for a
Participant’s benefit under this Plan if the Participant did not make the
one-time Special Election described in Section 4.2.  For purposes of calculating
the Present Value of the Participant’s benefit under this Plan on the date of
his Termination of Employment the Participant’s benefit shall be converted on an
actuarially equivalent basis (calculated using the actuarial assumptions and
methodologies that would be used by the Funded Plan) to five equal annual
installments commencing on the first business day following the six month
anniversary of the Participant’s Termination of Employment.  The remaining four
installment payments shall be paid on the first business day following
anniversary of the Participant’s Termination of Employment.

2.7           "Funded Plan" shall mean the Eastman Retirement Assistance Plan.

167 
 

--------------------------------------------------------------------------------

 

2.8
“Global Benefits” shall mean the Company’s internal organization responsible for
the administration of the payment of benefits under this plan.

2.9           "Plan" shall mean this Eastman Unfunded Retirement Income Plan.

2.10
"Present Value" shall mean the actuarial present-value of the Participant's
benefit under this Plan. Present Value for purposes of this Plan shall be
calculated using the actuarial assumptions and methodologies that would be used
by the Funded Plan to determine a single lump sum payment on the date of the
Participant's Termination of Employment.

2.11
“Termination of Employment” means a separation from service under Code Section
409A and the Final 409A Regulations.

 
ARTICLE THREE
 
 
Eligibility
 

3.1
All Employees eligible to receive a benefit from the Funded Plan shall be
eligible to receive a benefit under this Plan their benefit cannot be fully
provided by the Funded Plan due to the benefit limitations imposed by Code
Section 401(a)(17) or Code Section 415. Employees who are not eligible to
participate in the Funded Plan are not eligible to participate in this Plan.

 
ARTICLE FOUR
 
 
Benefits
 

4.1
Benefits due under this Plan shall be paid in the form of a Five-Payment Lump
Sum as described in Section 4.3 unless the Participant has made the election
described in Section 4.2 of this Plan.  If the Employee is deceased, the person
who shall receive payment under this Plan (if any), shall be the same person who
would be entitled to receive survivor benefits with respect to the Employee
under the Funded Plan.

If a Participant made the election described in Section 4.2 of this Plan and
dies while actively employed, the Present Value of the Participant’s benefit on
the date of his death shall be paid to the Participant’s beneficiary no later
than ninety (90) days after the date Global Benefits is notified of the
Participant’s death.

If a Participant dies before beginning to receive payments from this Plan (and
the Participant did not make the election described in Section 4.2 of this
Plan), the Present Value of the Participant’s benefit under this Plan on the
date of the Participant’s death shall be distributed to the Participant’s
beneficiary in the form of a Five-Payment Lump Sum.  The first payment will be
made no later than the first business day of the second month following the
Participant’s death.  The remaining payments shall be made on the anniversary of
the Participant’s death.

 
If the Participant dies before receiving all five installment payments, the
Participant’s Beneficiary shall receive the balance of the Participant’s
installment payments.  Such remaining payments shall be paid to the beneficiary
on the Participant’s annual payment date,

168 
 

--------------------------------------------------------------------------------

 

4.2
Special One-Time Election.

 
(a)
During the period beginning November 10, 2008 and ending December 5, 2008 (the
“Election Period”) each Participant who is eligible to participate in the
Eastman Executive Deferred Compensation Plan (“EDCP”) as of November 1, 2008
shall have the opportunity to elect, in the manner provided by the Company, to
have the Present Value of his benefit under this Plan, if any, transferred to
the EDCP on the date of his Termination of Employment (the “Transferred
Benefit”).  In order for such election to be effective:

 
(i)
The Participant shall also be required to elect the form of payment applicable
to his Transferred Benefit from the payment options available under the EDCP as
of January 1, 2008; and

 
(ii)
The Participant must acknowledge and agree that the election described in
paragraph (a) is irrevocable.

 
The election described above will not be available to any Participant whose
benefit commencement date under the Funded Plan is in 2008 or whose Termination
of Employment from the Company occurs in 2008.
 
(b)
In the event that a Participant fails to elect the form of payment applicable to
his Transferred Benefit from the payment options available under the EDCP as of
January 1, 2008, the Participant’s benefit shall be paid to him in accordance
with Section 4.3 of this Plan.

 
 
(c)
If the Participant makes such a timely election, then upon his Termination of
Employment, neither the Participant nor his beneficiaries shall have any further
right to benefits of any kind under this Plan, and the payment of such
Transferred Benefits shall be governed solely by the EDCP.

 
(d)
The election described in paragraph (a) will not be available to any Participant
who is not eligibleto participate in the EDCP on November 1, 2008 according to
records maintained by theCompany.

 
 
4.3
If a Participant was not eligible for, or did not make the special one-time
election described in Section 4.2 of this Plan, the Present Value of his benefit
under this Plan on the date of his Termination of Employment will be paid to the
Participant in a Five Payment Lump Sum.  The first installment will be paid on
the first business day following the six month anniversary of the Participant’s
Termination of Employment. The four remaining annual installment payments will
be paid on the anniversary of the   Participant’s Termination of
Employment.  Each installment payment shall be treated as a separate
payment.  No other payment option is available under this Plan.

 
4.4
The benefit payable under this Plan shall be the amount of the retirement income
benefit to which an Employee would otherwise be entitled under the Funded Plan,

 
(i)
if deferred compensation were included in the Funded Plan's definitions of
"Participating Compensation" and "Retirement Annual Salary Rate", at the time of
deferral; and

 
(ii)
if the provisions of Sections 415 and 401(a)(17) of the Code, as expressed in
the Funded Plan, were disregarded;

169 
 

--------------------------------------------------------------------------------

 

 
less the combined amounts of the retirement income benefit to which the Employee
is entitled under the Funded Plan and the retirement income benefit to which
such Employee is entitled under the Eastman Excess Retirement Income Plan.

The "retirement income benefit to which the Participant is entitled under the
Funded Plan generally means the benefits actually payable to the Participant
under the Funded Plan; provided, however, that where the benefits actually
payable to the Participant under the Funded Plan are reduced on account of a
payment of all or a portion of the Participant’s benefits to a third party on
behalf of or with respect to an Employee (pursuant, for example, to a qualified
domestic relations order), the "retirement income benefit to which the
Participant is entitled under the Funded Plan" shall be deemed to mean the
benefit that would have been actually payable but for such payment to a third
party.

4.5
If an Employee's benefit from the Funded Plan is subject to an actuarial
reduction because of the time when payment commences, his benefit from this Plan
shall be actuarially reduced on the same basis.

4.6
If the Present Value of the Participant’s benefit under this Plan on the date of
his Termination of Employment plus the Present Value of the Participant’s
benefit under the Eastman Excess Retirement Income Plan (the “ERIP”) is $5,000
or less, the Participant’s benefit from this Plan and the ERIP shall be
automatically paid to him in a single lump sum on the first business day
following the 6th month anniversary of his Termination of Employment.

4.7
The benefits payable under this Plan shall be paid by the Company out of its
general assets. To the extent an Employee acquires the right to receive a
payment under this Plan, such right shall be no greater than that of an
unsecured general creditor of the Company. No amount payable under this Plan may
be assigned, transferred, encumbered or subject to any legal process for the
payment of any claim against an Employee.

 
ARTICLE FIVE
 
 
Administration
 

5.1
Responsibility. Except as expressly provided otherwise herein, the Senior Vice
President and Chief Administrative Officer (“Senior VP & CAO”) shall have total
and exclusive responsibility to control, operate, manage and administer this
Plan in accordance with its terms.

5.2
Authority of Senior Vice President and Chief Administrative Officer.  The Senior
VP & CAO shall have all the authority that may be necessary or helpful to enable
him to discharge his responsibilities with respect to this Plan.  Without
limiting the generality of the preceding sentence, such Senior VP & CAO shall
have the exclusive right: to interpret this Plan, to determine eligibility for
participation in this Plan, to answer all question concerning eligibility for
and the amount of benefits payable under this Plan, to construe any ambiguous
provision of this Plan, to correct any default, to supply any omission, to
reconcile any inconsistency, and to answer any and all questions arising in the
administration, interpretation, and application of this Plan. However, see
Section 5.5.

5.3
Discretionary Authority. The Senior VP & CAO shall have full discretionary
authority in all matters related to the discharge of his responsibilities and
the exercise of his authority under this Plan including, without limitation, his
construction of the terms of this Plan and his determination of eligibility for
participation and benefits under this Plan. It is the intent of this Plan that
the decisions of such Senior VP & CAO and his action with respect to this Plan
shall be final and binding upon all persons having or claiming to have any right
or interest in or under this Plan and that no such decision or action shall be
modified upon judicial review unless such decision or action is proven to be
arbitrary or capricious. Notwithstanding anything to the contrary in this
Article Five, the Senior VP & CAO shall not have the authority to make any
decision or resolve any issue that directly affects his own participation or
benefits under this Plan, and instead such decision or resolution shall be
reserved to the Compensation Committee.

 
 
170

--------------------------------------------------------------------------------

 
5.4
Delegation of Authority. The Senior VP & CAO may delegate some or all of his
authority under this Plan to any person or persons provided that any such
delegation be in writing.

5.5
Authority Compensation Committee. Under Section 4.1 of this Plan, decisions
concerning payment of benefits to executive officers shall be made by the
Compensation Committee of the Board of Directors, and to that extent the
provisions of 5.1 through 5.4 above shall be deemed to apply to such Committee.

 
ARTICLE SIX
 
 
Amendment and Termination
 

6.1
While the Company intends to maintain this Plan under present business
conditions, the Company, acting through the Compensation Committee, reserves the
right to amend and/or terminate it at any time for whatever reasons it may deem
advisable.  Notwithstanding the foregoing, termination of this Plan must comply
with the requirements of Treas. Reg. Section 1.409A-3(j)(4)(ix).

6.2
Notwithstanding the preceding Section, however, the Company hereby makes a
contractual commitment to pay the benefits accrued under this Plan as of the
date of such amendment or termination to the extent it is financially capable of
meeting such obligation.

 
ARTICLE SEVEN
 
 
Miscellaneous
 

7.1
Nothing contained in this Plan shall be construed as a contract of employment
between the Company and an Employee, or as a right of an Employee to be
continued in the employment of the Company, or as a limitation of the right of
the Company to discharge any of its Employees, with or without cause.

7.2
This Plan shall be governed by the laws of the State of Tennessee, except to the
extent preempted by federal law.

7.3           This Plan shall be binding upon the successors and assigns of the
parties hereto.

7.4
The Company will withhold to the extent required by law all applicable income
and other taxes from amounts accrued or paid under this Plan.

171