ex10_10.htm


    
      

       

      
        
        

      

    


    


    


    


    


    


    


    


    EASTMAN
      CHEMICAL COMPANY

    2007
      DIRECTOR LONG-TERM COMPENSATION
      SUBPLAN

    


    (a
      Subplan of the 2007 Omnibus Long-Term Compensation Plan)

    


    


    


    


    


    


    


    


    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EASTMAN
      CHEMICAL COMPANY

    2007
      DIRECTOR LONG-TERM COMPENSATION SUBPLAN

    


    (a
      Subplan of the 2007 Omnibus Long-Term Compensation Plan)

    


    


    ARTICLE
      1

    PURPOSE

    


    1.1.           PURPOSE.
      The purpose of the Plan is to attract, retain and compensate
      highly-qualified individuals who are not employees of Eastman Chemical Company
      or any of its subsidiaries or affiliates for service as members of the Board
      by
      providing them with competitive compensation and an ownership interest in the
      Stock of the Company.  The Company intends that the Plan will benefit
      the Company and its stockholders by allowing Non-Employee Directors to have
      a
      personal financial stake in the Company through an ownership interest in the
      Stock and will closely associate the interests of Non-Employee Directors with
      that of the Company’s stockholders.

    


    1.2.           ELIGIBILITY.  Non-Employee
      Directors of the Company who are Eligible Participants, as defined below, shall
      automatically be participants in the Plan.

    


    ARTICLE
      2

    DEFINITIONS

    


    2.1.           DEFINITIONS.  Capitalized
      terms used herein and not otherwise defined shall have the meanings assigned
      such terms in the Omnibus Plan.  Unless the context clearly indicates
      otherwise, the following terms shall have the following meanings:

    


    (a)           “Committee”
      means the Nominating and Corporate Governance Committee of the
      Board.

    


    (b)           “Effective
      Date” of the Plan has the meaning set forth in Section 7.4 hereof.

    


    (c)           “Eligible
      Participant” means any person who is a Non-Employee Director on the Effective
      Date or becomes a Non-Employee Director while this Plan is in effect; except
      that during any period a director is prohibited from participating in the Plan
      by his or her employer or otherwise waives participation in the Plan, such
      director shall not be an Eligible Participant.

    


    (d)           “Omnibus
      Plan” means the Eastman Chemical Company 2007 Omnibus Long-Term Compensation
      Plan, or any subsequent equity compensation plan approved by the Board and
      designated as the Omnibus Plan for purposes of this Plan.

    


    (e)           “Plan”
      means this Eastman Chemical Company 2007 Director Long-Term Compensation
      Subplan, as amended from time to time.  The Plan is a subplan of the
      Omnibus Plan.

    


    (f)           “Plan
      Year(s)” means the approximate twelve-month periods between annual meetings of
      the stockholders of the Company, which, for purposes of the Plan, are the
      periods for which equity Awards are earned.

    


    ARTICLE
      3

    ADMINISTRATION

    


    3.1.           ADMINISTRATION.  The
      Plan shall be administered by the Committee.  Subject to the
      provisions of the Plan, the Committee shall be authorized to interpret the
      Plan,
      to establish, amend and rescind any rules and regulations relating to the Plan,
      and to make all other determinations necessary or advisable for the
      administration of the Plan.  The Committee’s interpretation of the
      Plan, and all actions taken and determinations made by the Committee pursuant
      to
      the powers vested in it hereunder, shall be conclusive and binding upon all
      parties concerned including the Company, its stockholders and persons granted
      awards under the Plan.  The Committee may appoint a plan administrator
      to carry out the ministerial functions of the Plan, but the administrator shall
      have no other authority or powers of the Committee.  The Board may
      reserve to itself any or all of the authority and responsibility of the
      Committee under the Plan or may act as administrator of the Plan for any and
      all
      purposes.  To the extent the Board has reserved any authority and
      responsibility or during any time that the Board is acting as administrator
      of
      the Plan, it shall have all the powers of the Committee hereunder, and any
      reference herein to the Committee (other than in this Section 3.1) shall include
      the Board.  To the extent any action of the Board under the Plan
      conflicts with actions taken by the Committee, the actions of the Board shall
      control.

    


    3.2.           RELIANCE.  In
      administering the Plan, the Committee may rely upon any information furnished
      by
      the Company, its public accountants and other experts.  No individual
      will have personal liability by reason of anything done or omitted to be done
      by
      the Company or the Committee in connection with the Plan.  This
      limitation of liability shall not be exclusive of any other limitation of
      liability to which any such person may be entitled under the Company’s
      certificate of incorporation or otherwise.

    


    ARTICLE
      4

    SHARES

    


    4.1.           SOURCE
      OF SHARES FOR THE PLAN.  The shares of Stock that may be
      issued pursuant to the Plan shall be issued under the Omnibus Plan, subject
      to
      all of the terms and conditions of the Omnibus Plan.  The terms
      contained in the Omnibus Plan are incorporated into and made a part of this
      Plan
      with respect to Restricted Stock, Nonstatutory Stock Options and any other
      equity awards granted pursuant hereto and any such awards shall be governed
      by
      and construed in accordance with the Omnibus Plan.  In the event of
      any actual or alleged conflict between the provisions of the Omnibus Plan and
      the provisions of this Plan, the provisions of the Omnibus Plan shall be
      controlling and determinative.  This Plan does not constitute a
      separate source of shares for the grant of the equity awards described
      herein.

    


    ARTICLE
      5

    EQUITY
      COMPENSATION

    


    5.1.           RESTRICTED
      STOCK

    


    (a)           Initial
      Award of Restricted Stock.  Subject to share
      availability under the Omnibus Plan, on the date that a new Non-Employee
      Director is initially elected or appointed to the Board, such director will
      receive a Restricted Stock Award.  The number of shares of Restricted
      Stock to be awarded shall be established from time to time by the
      Board.  Unless and until changed by the Board, the number of shares of
      Restricted Stock to be awarded in each initial Restricted Stock Award shall
      be
      determined by dividing $10,000 by the Fair Market Value of one share of Stock
      as
      of the award date, and rounding up to the nearest whole share (the “Initial
      Restricted Stock Award”).  Non-Employee Directors shall be eligible to
      receive both an Initial Restricted Stock Award and an Annual Restricted Stock
      Award (as defined below) in his or her initial year of service.  Such
      shares of Restricted Stock shall be evidenced by a written Award Notice in
      the
      form at the end of this Plan and shall be subject to such restrictions and
      risk
      of forfeiture as are described in the form of Award Notice and any
      other restrictions and terms determined by the Board, and shall be granted
      under and pursuant to the terms of the Omnibus Plan.

    


    (b)           Annual
      Award of Restricted Stock.  Subject to share availability under
      the Omnibus Plan, on the date of each annual meeting of the Company’s
      stockholders, each Eligible Participant in service on the close of business
      on
      that date shall receive a Restricted Stock Award.  The number of
      shares of Restricted Stock to be awarded shall be established from time to
      time
      by the Board.  Unless and until changed by the Board, the number of
      shares of Restricted Stock to be awarded in each annual Restricted Stock Award
      for a full Plan Year shall be determined by dividing $5,000 by the Fair Market
      Value of one share of Stock as of the award date, and rounding up to the nearest
      whole share (the “Annual Restricted Stock Award”).  Such shares of
      Restricted Stock shall be evidenced by a written Award Notice in the form at
      the
      end of this Plan and shall be subject to such restrictions and risk of
      forfeiture as are described in the form of Award Notice and any other
      restrictions and terms determined by the Board, and shall be granted under
      and
      pursuant to the terms of the Omnibus Plan.

    


    (c)           Vesting.  Unless
      and until provided otherwise by the Board, the Initial Restricted Stock Awards
      and the Annual Restricted Stock Awards shall vest and all restrictions with
      respect thereto shall lapse only upon the earliest to occur of: (i) three (3)
      years from the date of grant, but only if the Non-Employee Director is still
      a
      director of the Company immediately prior to the election of directors at the
      annual meeting of stockholders at the end of such three-year period; (ii) the
      date that his or her tenure as a director of the Company terminates by reason
      of
      death, Disability, resignation effective at an annual meeting of stockholders
      because he or she is no longer qualified to serve as a director under Section
      3.1 of the Bylaws of the Company, or for another approved reason as determined
      by the Committee; or (iii) the date that his or her tenure as director of the
      Company terminates by reason of his or her failure to be reelected as a director
      in an election in which he or she consented to be named as a director
      nominee.  If the grantee’s service as a director of the Company
      (whether or not in a Non-Employee Director capacity) terminates prior to the
      third anniversary of the date of grant other than as described in clause (ii)
      or
      (iii) of the foregoing sentence, then the grantee shall forfeit all of his
      or
      her right, title and interest in and to any unvested shares of Restricted Stock
      as of the date of such termination from the Board and such shares of Restricted
      Stock shall be reconveyed to the Company without further consideration or any
      act or action by the grantee.

    


    5.2           NONSTATUTORY
      STOCK OPTIONS

    


    (a)           Annual
      Nonstatutory Stock Option Grant.  Subject to share availability
      under the Omnibus Plan, on the date of each annual meeting of the Company’s
      stockholders, each Eligible Participant in service on the close of business
      on
      that date shall receive a Nonstatutory Stock Option. Unless and until changed
      by
      the Board, each such Nonstatutory Stock Option shall be to purchase 2,000
      shares of Stock.

    


    (b)           Terms
      and Conditions of Nonstatutory Stock Options.  Nonstatutory Stock
      Options granted under this Section 5.2 shall be evidenced by a written Award
      Notice in the form at the end of this Plan, and shall be subject to the terms
      and conditions described below and of the Omnibus Plan.

    


    (i)           Exercise
      Price.  The exercise price per share under a Nonstatutory Stock
      Option shall be the Fair Market Value on the date of grant.

    


    (ii)           Vesting.  Unless
      and until provided otherwise by the Board, each Nonstatutory Stock Options
      granted under this Section 5.2 shall become fully vested and exercisable as
      to
      50% of the shares on the first anniversary of the date of grant, and as to
      50%
      of the shares on the second anniversary of the date of grant, but only if the
      Non-Employee Director is still a director of the Company on such vesting dates.
      Notwithstanding the foregoing, the Nonstatutory Stock Options shall become
      fully
      vested and exercisable upon the earlier occurrence of (i) the date that the
      optionee’s tenure as a director of the Company terminates by reason of death,
      Disability, resignation effective at an annual meeting of stockholders because
      he or she is no longer qualified to serve as a director under Section 3.1 of
      the
      Bylaws of the Company, or for another approved reason as determined by the
      Committee, or (ii) the date that his or her tenure as a director of the Company
      terminates by reason of completion of his or her then-current term in office
      and
      he or she fails to be nominated for, or reelected as, a director to another
      term. If the optionee’s service as a director of the Company (whether or
      not in a Non-Employee Director capacity) terminates other than as described
      in
      clause (i) or (ii) of the foregoing sentence, then the optionee shall forfeit
      all of his or her right, title and interest in and to any unvested Nonstatutory
      Stock Options as of the date of such termination from the Board.

    


    (iii)           Nonstatutory
      Stock Option Term.  Subject to earlier termination as provided
      herein, each Nonstatutory Stock Option granted under this Section 5.2 shall
      expire on the tenth anniversary of the date of grant.

    


    5.3           CHANGE
      IN CONTROL.

    


    (a)           Vesting
      of Awards.  Upon a Change in Control: (i) the terms of this
      Section 5.3 shall immediately become operative, without further action or
      consent by any person or entity; (ii) all conditions, restrictions, and
      limitations in effect on any equity Awards awarded or granted pursuant to this
      Plan shall immediately lapse as of the date of such event; (iii) no other terms,
      conditions, restrictions and/or limitations shall be imposed upon any such
      Awards on or after such date, and in no circumstance shall such Awards be
      forfeited on or after such date; and (iv) all such Awards shall automatically
      become one hundred percent (100%) vested immediately.

    


    (b)           Valuation
      and Payment of Awards.  Upon a Change in Control, each
      Non-Employee Director, whether or not continuing in service as a director of
      the
      Company in any capacity, shall be paid, in a single lump-sum cash payment,
      as
      soon as practicable but in no event later than ninety (90) days after the
      effective date of the Change in Control, the value of all of his or her
      outstanding Awards.  For purposes of calculating the cash-out value of
      Awards for purposes of this Section 5.3, the Change-in-Control Price shall
      be
      used as the Fair Market Value of the Shares.

    


    


    ARTICLE
      6

    AMENDMENT,
      MODIFICATION, AND TERMINATION

    


    6.1.           AMENDMENT,
      MODIFICATION AND TERMINATION.  The Board may, at any time and from
      time to time, amend, modify or terminate the Plan without stockholder approval;
      provided, however, that if an amendment to the Plan would, in the reasonable
      opinion of the Board, require stockholder approval under applicable laws,
      policies or regulations or the applicable listing or other requirements of
      a
      securities exchange on which the Stock is listed or traded, then such amendment
      shall be subject to stockholder approval; and provided further, that the Board
      may condition any other amendment or modification on the approval of
      stockholders of the Company for any reason.

    


    ARTICLE
      7

    GENERAL
      PROVISIONS

    


    7.1.           ADJUSTMENTS.  The
      adjustment provisions of the Omnibus Plan shall apply with respect to Awards
      outstanding or to be awarded or granted pursuant to this Plan.

    


    7.2.           DURATION
      OF THE PLAN.  The Plan shall remain in effect until terminated by
      the Board or until the earlier termination of the Omnibus Plan.

    


    7.3.           EXPENSES
      OF THE PLAN.  The expenses of administering the Plan
      shall be borne by the Company.

    


    7.4.           EFFECTIVE
      DATE.  The Plan was originally adopted by the Board on
      [August 2, 2007], and became effective on that date (the “Effective
      Date”).

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    FORM
      OF NOTICE OF RESTRICTED STOCK AWARDS

    UNDER
      THE EASTMAN CHEMICAL COMPANY

    2007
      DIRECTOR LONG-TERM COMPENSATION SUBPLAN OF THE 2007 OMNIBUS LONG-TERM
      COMPENSATION PLAN

    


                                                                     Grantee:

                                                                     Number
      of Restricted Shares:

                                                                     Date
      of Award:

    


    1.  Award
      of Restricted Stock.  Eastman Chemical Company (“Company”) has
      granted to you, under the 2007 Director Long-Term Compensation Subplan of the
      2007 Eastman Chemical Company Omnibus Long-Term Compensation Plan (the “Plan”),
      ------------ shares (“Restricted Stock”) of its $.01 par value Common Stock
      (“Common Stock”) to be held as restricted stock under the terms of the Plan and
      this Award Notice (“Award Notice”).  The Plan is incorporated herein
      by reference and made a part of this Award Notice.  Capitalized terms
      not defined herein shall have the respective meanings set forth in the
      Plan.

    


    2.  Lapse
      of Restrictions.  The restrictions on transfer described below
      with respect to the Restricted Stock awarded to you hereunder will lapse upon
      the earliest of:  (a) 4:00 p.m., Eastern Time, on
      --------,20----  (the “Vesting Date”), if and only if you are still a
      director of the Company immediately prior to the election of directors at the
      annual meeting of stockholders at the end of such three-year period; or (b)
      the
      date that your tenure as a director of the Company terminates by reason of
      death, disability, resignation effective at an annual meeting of stockholders
      because you are no longer qualified to serve as a director under Section 3.1
      of
      the Bylaws of the Company, or for another approved reason as determined by
      the
      Committee; or (c) the date that your tenure as a director of the Company
      terminates by reason of completion of your then-current term in office and
      you
      fail to be reelected as a director to another term.

    


    3.  Book-Entry
      Registration.  The Restricted Stock awarded pursuant to this Award
      Notice initially will be evidenced by book-entry registration only, without
      the
      issuance of a certificate representing such shares.

    


    4.  Issuance
      of Shares.  Subject to the provisions of Section 7 of this Award
      Notice, the Company shall, provided that the conditions to vesting specified
      in
      Section 2 of this Award Notice are satisfied, issue a certificate or
      certificates representing the Restricted Stock as promptly as practicable
      following the Vesting Date.

    


    5.  Restrictions
      on Transfer of Shares.  Shares of Restricted Stock awarded under
      the Plan, and the right to vote such shares and to receive dividends thereon,
      may not, except as otherwise provided in the Plan, be sold, assigned,
      transferred, pledged, or encumbered in any way prior to the Vesting Date,
      whether by operation of law or otherwise, except by will or the laws of descent
      and distribution.  After the Vesting Date, the unrestricted shares of
      Restricted Stock may be issued during your lifetime only to you, except in
      the
      case of a permanent disability involving mental incapacity.

    


    6.  Rights
      as a Stockholder.  Except as otherwise provided in the Plan or
      this Award Notice, prior to the Vesting Date, you will have all of the other
      rights of a stockholder with respect to the Restricted Stock, including, but
      not
      limited to, the right to receive such cash dividends, if any, as may be declared
      on such shares from time to time and the right to vote (in person or by proxy)
      such shares at any meeting of stockholders of the Company.

    


    7.  Termination
      of Tenure as a Director.  Upon termination of your tenure as a
      director of the Company, prior to the Vesting Date, other than by reason of
      death, disability, resignation effective at an annual meeting of stockholders
      because you are no longer qualified to serve as a director under Section 3.1
      of
      the Bylaws of the Company, or your tenure as a director of the Company
      terminates by reason of completion of your then-current term in office and
      you
      fail to be reelected as a director to another term, or for another approved
      reason, as determined by the Committee, all of the Restricted Stock awarded
      to
      you shall be canceled and forfeited by you to the Company without the payment
      of
      any consideration by the Company.  In such event, neither you nor your
      successors, heirs, assigns, or personal representatives will thereafter have
      any
      further rights or interest in or with respect to such shares.

    


    8.  Change
      in Control.  Upon a Change in Control of the Company, the
      provisions of Section 5.3 of the Plan shall automatically and immediately become
      operative with respect to the Restricted Stock.

    


    9.  No
      Right to Continued Position on Board.  Neither the Plan, the award
      of Restricted Stock, nor this Award Notice, shall give you any right to remain
      on the Company’s Board of Directors.

    


    10.  Restrictions
      on Issuance of Shares.  If at any time the Company shall
      determine, in its sole discretion, that listing, registration, or qualification
      of the shares of Restricted Stock upon any securities exchange or under any
      state or federal law, or the consent or approval of any governmental regulatory
      body, is necessary or advisable as a condition to the award or issuance of
      certificate(s) for such Restricted Stock hereunder, such award or issuance
      may
      not be made in whole or in part unless and until such listing, registration,
      qualification, consent, or approval shall have been effected or obtained free
      of
      any conditions not acceptable to the Company.

    


    11.  Plan
      Controls.  In the event of any actual or alleged conflict between
      the provisions of the Plan and the provisions of this Award Notice, the
      provisions of the Plan shall be controlling and determinative.

    


    12.  Successors.  This
      Award Notice shall be binding upon any successor of the Company, in accordance
      with the terms of this Award Notice and the Plan.

    


    


    


    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    FORM
      OF NOTICE OF NONQUALIFIED STOCK OPTION GRANTS

    UNDER  THE
      EASTMAN CHEMICAL COMPANY

    2007
      DIRECTOR LONG-TERM COMPENSATION SUBPLAN OF THE 2007 OMNIBUS LONG-TERM
      COMPENSATION PLAN

    


    Grantee:

                                                                  Number
      of Shares:

                                                                  Option
      Exercise Price: $

    Date
      of Grant:

    


    1.           Grant
      of Option.  This Award Notice serves to notify you that Eastman
      Chemical Company ("Company") has granted to you, under the 2007 Director
      Long-Term Compensation Subplan of the 2007 Eastman Chemical Company Omnibus
      Long-Term Compensation Plan (the “Plan”), a nonqualified stock option ("Option")
      to purchase, on the terms and conditions set forth in this Award Notice and
      the
      Plan, the number of shares of its $.01 par value Common Stock ("Common Stock")
      set forth above at the exercise price per share set forth above.  The
      Plan is incorporated herein by reference and made a part of this Award
      Notice.  Capitalized terms not defined herein have the respective
      meanings set forth in the Plan.

    


    2.           Period
      of Option Exercise.  The Option shall expire at 4:00 p.m., Eastern
      Time, on ---------, 20-- (the “Expiration Date”).

    


    3.           Exercise
      of Option.  The terms and conditions of exercise of the Option are
      as follows:

    


    (a)           Subject
      to the terms set forth in this Award Notice, the Option shall become exercisable
      as to one half of the shares covered hereby on -------, 20--, and as to the
      remaining shares on ----------, 20--.

    


    (b)           Upon
      your death, your personal representative may exercise the Option, subject to
      the
      terms set forth in this Award Notice, until the Expiration Date.

    


    (c)           The
      Option may be exercised in whole or in part by completing and returning the
      exercise form delivered with the Option.  The exercise form generally
      must be accompanied by, or make provision for, full payment in cash; by check;
      or by surrendering unrestricted shares of Common Stock having a value on the
      date of exercise equal to the exercise price, together with proof that such
      shares, if acquired through a previous option exercise, have been owned by
      the
      optionee for at least six months prior to the date of exercise of the Option;
      or
      in any combination of the foregoing; however, if you wish to pay with shares
      of
      Common Stock already held by you, you may submit a Stock Validation form
      attesting to the ownership of the shares instead of sending in actual share
      certificates.

    


    4.      Nontransferability.  The
      Option is not transferable except by will or by the laws of descent and
      distribution, and may not be sold, assigned, pledged, or encumbered in any
      way,
      whether by operation of law or otherwise.  The Option may be granted
      only to, and exercised only by you during your lifetime, except in the case
      of a
      permanent disability involving mental incapacity.

    


    5.           Limitation
      of Rights.  You will not have any rights as a stockholder with
      respect to the shares covered by the Option until you become the holder of
      record of such shares by exercising the Option.  Neither the Plan, the
      granting of the Option nor this Award Notice gives you any right to remain
      on
      the Company's Board of Directors.

    


    


    6.           Termination.   Upon
      termination of your directorship by reason of death, disability, resignation
      effective at an annual meeting of stockholders because you are no longer
      qualified to serve as a director under Section 3.1 of the Bylaws of the Company,
      or your tenure as a director of the Company terminates by reason of completion
      of your then-current term in office and you fail to be nominated for, or
      reelected as, a director to another term, or for another approved reason, as
      determined by the Committee, the Option will remain exercisable in accordance
      with its original terms.  Upon termination of your directorship for a
      reason other than death, disability, resignation effective at an annual meeting
      of stockholders because you are no longer qualified to serve as a director
      under
      Section 3.1 of the Bylaws of the Company, or your tenure as a director of the
      Company terminates by reason of completion of your then-current term in office
      and you fail to be nominated for, or reelected as a director to, another term,
      or another approved reason, any portion of the Option not previously exercised
      by you will be canceled and forfeited by you, without payment of any
      consideration by the Company.

    


    7.       Restrictions
      on Issuance of Shares.  If at any time the Company determines that
      listing, registration, or qualification of the shares covered by the Option
      upon
      any securities exchange or under any state or federal law, or the approval
      of
      any governmental agency, is necessary or advisable as a condition to the
      exercise of the Option, the Option may not be exercised in whole or in part
      unless and until such listing, registration, qualification, or approval shall
      have been effected or obtained free of any conditions not acceptable to the
      Company.

    


    8.           Change
      in Control.  Section 5.3 of the Plan contains certain special
      provisions that will apply to the Option in the event of a Change in
      Control.

    


    9.           Adjustment
      of Shares.  If the number of outstanding shares of Common Stock
      changes through the declaration of stock dividends or stock splits, the number
      of shares subject to the Option and the exercise price of the Option will be
      appropriately adjusted.  If there is a change in the number of
      outstanding shares of Common Stock or any change in the outstanding stock in
      the
      Company, the Committee will make any adjustments and modifications to the Option
      that it deems appropriate.  In the event of any other change in the
      capital structure or in the Common Stock of the Company, the Committee is
      authorized to make appropriate adjustments to the Option.

    


    10.           Plan
      Controls.  In the event of any conflict between the provisions of
      the Plan and the provisions of this Award Notice, the provisions of the Plan
      will be controlling and determinative.