<PAGE>   1
                                                                   EXHIBIT 10.20

                         LONG-TERM PERFORMANCE SUBPLAN
                OF THE 1997 OMNIBUS LONG-TERM COMPENSATION PLAN
                          2000-2002 PERFORMANCE PERIOD




                            EASTMAN CHEMICAL COMPANY
                           Effective January 1, 2000


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<PAGE>   2

                         LONG-TERM PERFORMANCE SUBPLAN
                OF THE 1997 OMNIBUS LONG-TERM COMPENSATION PLAN
                          2000-2002 PERFORMANCE PERIOD


                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
Section            Title                                                                                       Page
-------            -----                                                                                       ----

<S>         <C>                                                                                                <C>
Section 1.  Background.....................................................................................

Section 2.  Definitions....................................................................................

Section 3.  Administration.................................................................................

Section 4.  Eligibility....................................................................................

Section 5.  Form of Awards.................................................................................

Section 6.  Size of Awards.................................................................................

Section 7.  Composition of Peer Group......................................................................

Section 8.  Preconditions to Receipt of an Award...........................................................

Section 9.  Manner and Timing of Award Payments............................................................

Section 10. No Rights as Shareowner........................................................................

Section 11. Application of Plan............................................................................

Section 12. Amendments.....................................................................................
</TABLE>


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                            EASTMAN CHEMICAL COMPANY
                         LONG-TERM PERFORMANCE SUBPLAN
                OF THE 1997 OMNIBUS LONG-TERM COMPENSATION PLAN
                          2000-2002 PERFORMANCE PERIOD

SECTION 1.  BACKGROUND. Under Section 11 of the Eastman Chemical Company 1997
Omnibus Long-Term Compensation Plan (the "Plan"), the "Committee" (as defined in
the Plan), may, among other things, award shares of the $.01 par value common
stock ("Common Stock") of Eastman Chemical Company (the "Company") to
"Employees" (as defined in the Plan), and such awards may take the form of
performance shares, which are contingent upon the attainment of certain
performance objectives during a specified period, and subject to such other
terms, conditions, and restrictions as the Committee deems appropriate. The
purpose of this Long-Term Performance Subplan (this "Subplan") is to set forth
the terms of the grant of performance shares for the 2000-2002 Performance
Period specified herein, effective as of January 1, 2000 (the "Effective Date").

SECTION 2.  DEFINITIONS.

(a)       The following definitions shall apply to this Subplan:

          (i)      "Actual Grant Amount" means the number of shares of Common
                   Stock to which a participant is entitled under this Subplan,
                   calculated in accordance with Section 6 of this Subplan.

          (ii)     "Award Payment Date" means the date the shares of Common
                   Stock covered by an award under this Subplan are delivered
                   to a participant.

          (iii)    "Compared Group" means the Company and the companies in the
                   Peer Group.

          (iv)     "Maximum Deductible Amount" means the maximum amount
                   deductible by the Company under Section 162(a), taking into
                   consideration the limitations under Section 162(m), of the
                   Internal Revenue Code of 1986, as amended, or any similar or
                   successor provisions thereto.

          (v)      "Target Grant Amount" means, with respect to any eligible
                   Employee, the number of shares of Common Stock specified on
                   Exhibit A hereto for the Salary Grade applicable to such
                   Employee.

          (vi)     "Participation Date" means June 30, 2000.

          (vii)    "Peer Group" means the group of companies identified in
                   Exhibit B hereto, with any changes made by the Committee
                   pursuant to Section 7 of this Subplan.

          (viii)   "Performance Period" means January 1, 2000 through December
                   31, 2002.

          (ix)     "TSR" means total  return to  shareowners,  as reflected by
                   the sum of (A) change in stock price (measured as the
                   difference between (I) the average of the closing prices of a
                   company's common stock on the New York Stock Exchange, or of
                   the last sale prices of such stock on the Nasdaq Stock
                   Market, as applicable, in the period beginning on the tenth
                   trading day preceding the beginning of the Performance
                   Period and ending on the tenth trading day of the Performance
                   Period and (II) the average of such closing or last sale
                   prices for such stock in the period beginning on the tenth
                   trading day preceding the end of the Performance Period and
                   ending on the tenth trading day following the end of the
                   Performance Period) plus (B) dividends declared, assuming
                   reinvestment of dividends, and expressed as a percentage
                   return on a shareowners's hypothetical investment.


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(b)       Any capitalized terms used but not otherwise defined in this Subplan
          shall have the respective meanings set forth in the Plan.

SECTION 3.   ADMINISTRATION. This Subplan shall be administered by the
Committee. The Committee shall have authority to interpret this Subplan, to
prescribe rules and regulations relating to this Subplan, and to take any other
actions it deems necessary or advisable for the administration of this Subplan,
and shall retain all general authority granted to it under Section 3 of the
Plan.

SECTION 4.   ELIGIBILITY. The Employees who are eligible to participate in this
Subplan are those Employees who, as of the Effective Date, have been designated
as "officers" of the Company for purposes of Section 16 of the Exchange Act and
those Employees designated by the Company's Chief Executive Officer during 2000,
which shall generally include Employees who, as of the Effective Date or the
Participation Date, held positions with the Company considered by the Chief
Executive Officer to carry responsibilities and functions generally associated
with a vice-president-level position. Employees who are promoted during the
Performance Period to a position that would meet the above criteria, but who do
not hold such position as of the Participation Date, are not eligible to
participate in this Subplan; however, the ability of the Chief Executive Officer
under this Section 4 to designate eligible Employees at any time during 2000 is
intended to allow the participation of Employees who, as of the Participation
Date, held positions with the Company that may not have been considered to carry
responsibilities and functions generally associated with a vice-president-level
position but which positions are or were evaluated during 2000 and determined by
the Chief Executive Officer to carry such responsibilities and functions.

SECTION 5.   FORM OF AWARDS. Subject to the terms and conditions of the Plan and
this Subplan, Awards under this Subplan shall be paid in the form of
unrestricted shares of Common Stock, except for conversions to cash and
deferrals under Section 9 of this Subplan, and except that if a participant is
entitled to any fraction of a share of Common Stock, as a result of Section 10
of this Subplan or otherwise, then in lieu of receiving such fraction of a
share, the participant shall be paid a cash amount representing the market
value, as determined by the Committee, of such fraction of a share at the time
of payment.

SECTION 6.   SIZE OF AWARDS. Exhibit A hereto shows by Salary Grade the Target
Grant Amount. The Salary Grade to be used in calculating the size of any Award
to a participant under this Subplan shall be the higher of (a) the Salary Grade
applicable to the position held by the participant on the Participation Date
(or, in the case of participants whose employment is terminated prior to the
Participation Date, the Effective Date) and (b) the Salary Grade assigned to
such position during 2000 as a result of any reevaluation of the Salary Grade
appropriate for such position. The Actual Grant Amount shall be determined by
comparing the Company's TSR during the Performance Period to the TSRs of the
companies in the Peer Group during the Performance Period. Specifically, the
Company and each company in the Peer Group shall be ranked by TSR, in descending
order, with the company having the highest TSR during the Performance Period
being ranked number one. The Company's rank, by TSR, in relation to the Compared
Group, shall determine a multiplier to be applied to the Target Grant Amount.
Multipliers range from 2.0 (i.e. 200%), if the Company's TSR is ranked number
one, to 0.0 (with no shares of Common Stock being delivered to participants
under this Subplan), if the Company's rank is lower than company twelve in the
Compared Group. The payout table with multipliers for each TSR rank is shown in
Exhibit C. The Actual Grant Amount is determined by applying the multiplier
corresponding to the Company's TSR rank (Exhibit C) to the Target Grant Amount.
Notwithstanding the foregoing, if the Peer Group produces fewer than 15 distinct
TSRs (as a result of the removal of a company from the Peer Group without
substitution of a replacement company therefor, as described in Section 7 of
this Subplan), then the Committee shall, in its sole discretion, determine the
appropriate means of calculating the Actual Grant Amount.

SECTION 7.   COMPOSITION OF PEER GROUP. The members of the Peer Group identified
in Exhibit B hereto have been identified as companies currently relevant for
purposes of TSR comparisons under this Subplan. However, the Committee shall
have the authority, at any time and from time to time, to determine that any
member of the Peer Group is no longer appropriate for inclusion. Circumstances
that might require such a determination include, without


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limitation, the following events: a company's common stock ceasing to be
publicly traded on an exchange or on the Nasdaq Stock Market; a company's being
a party to a significant merger, acquisition, or other reorganization; or a
company's ceasing to operate in the chemical industry. In any case where the
Committee determines that a particular company is no longer appropriate for
inclusion in the Peer Group, the Committee may designate a replacement company,
which shall then be substituted in the Peer Group for the former member. In any
such case, the Committee shall have authority to determine the appropriate
method of calculating the TSR of such former and/or replacement company or
companies, whether by complete substitution of the replacement company (and
disregard of the former company) over the entire Performance Period or by pro
rata calculations for each company or otherwise. Alternatively, in any case
where the Committee determines that a particular company is no longer
appropriate for inclusion in the Peer Group, the Committee may remove such
company from the Peer Group without substituting a replacement company
therefor.

SECTION 8.   PRECONDITIONS TO RECEIPT OF AN AWARD.

(a)       CONTINUOUS EMPLOYMENT. Except as specified in paragraph (b) below, to
          remain eligible for an Award under this Subplan, an eligible Employee
          must remain continuously employed with the Company or a Subsidiary at
          all times from the Participation Date (or the Effective Date) through
          the Award Payment Date.

(b)       DEATH, DISABILITY, RETIREMENT, OR TERMINATION FOR AN APPROVED REASON
          BEFORE THE AWARD PAYMENT DATE. If a participant's employment with the
          Company or a Subsidiary is terminated due to death, disability,
          retirement, or any approved reason prior to the Award Payment Date,
          the participant shall receive, subject to the terms and conditions of
          the Plan and this Subplan, an Award representing a prorated portion of
          the Actual Grant Amount to which such participant otherwise would be
          entitled, with the precise amount of such Award to be determined by
          multiplying the Actual Grant Amount by a fraction, the numerator of
          which is the number of full calendar months in the Performance Period
          from the Effective Date through and including the effective date of
          such termination, and the denominator of which is 36 (the total number
          of months in the Performance Period). If the effective date of a
          participant's termination of employment occurs on or after the last
          business day of a particular calendar month, then such month shall be
          considered a full calendar month and shall be counted in determining
          the numerator of the fraction described in the preceding sentence; if
          the effective date of such termination occurs prior to the last
          business day of a particular calendar month, then such month shall not
          be so counted.

SECTION 9.   MANNER AND TIMING OF AWARD PAYMENTS.

(a)       TIMING OF AWARD PAYMENT. Except for deferrals under Sections 9(c) and
          9(d), if any Awards are payable under this Subplan, the payment of
          such Awards to eligible Employees shall be made as soon as is
          administratively practicable after the end of the Performance Period.

(b)       TAX WITHHOLDING. The company may withhold or require the grantee to
          remit a cash amount sufficient to satisfy federal, state, and local
          taxes (including the participant's FICA obligation) required by law
          to be withheld. Further, either the Company or the grantee may elect
          to satisfy the withholding requirement by having the Company withhold
          shares of common stock having a fair market value on the date the tax
          is to be determined equal to the minimum statutory total tax which
          could be imposed on the transaction.

(c)       DEFERRAL OF AWARD IN EXCESS OF THE MAXIMUM DEDUCTIBLE AMOUNT. If
          payment of the Award would, or could in the reasonable estimation of
          the Committee, result in the participant's receiving compensation in
          excess of the Maximum Deductible Amount in a given year, then such
          portion (or all, as applicable) of the Award as would, or could in
          the reasonable estimation of the Committee, cause such participant to
          receive compensation from the Company in excess of the Maximum
          Deductible Amount shall be converted into the right to receive a cash
          payment, which shall be deferred until after the participant retires
          or otherwise terminates employment with the Company and its
          Subsidiaries.


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(d)       Election to Defer the Award. Any participant in this Subplan may
          elect to defer the Award until after the participant retires or
          otherwise terminates employment with the Company and its Subsidiaries
          under the terms and subject to the conditions of the Eastman
          Executive Deferred Compensation Plan, as the same now exists or may
          be amended hereafter (the "EDCP"). If the participant chooses to
          defer the Award, the Award shall be converted into the right to
          receive a cash payment.

(e)       AWARD DEFERRAL TO THE EDCP. In the event that all or any portion of
          an Award is converted into a right to receive a cash payment pursuant
          to Sections 9(c) or 9(d), an amount representing the Fair Market
          Value, as of the date the Common Stock covered by the Award otherwise
          would be delivered to the participant, of the Actual Grant Amount (or
          the deferred portion thereof) will be credited to the Stock Account
          of the EDCP, and hypothetically invested in units of Common Stock.
          Thereafter, such amount shall be treated in the same manner as other
          investments in the EDCP and shall be subject to the terms and
          conditions thereof.

SECTION 10.  NO RIGHTS AS SHAREOWNER. No certificates for shares of Common Stock
shall be issued under this Subplan nor shall any participant have any rights as
a shareowner as a result of participation in this Subplan, until the Actual
Grant Amount has been determined and such participant has otherwise become
entitled to an Award under the terms of the Plan and this Subplan. In
particular, no participant shall have any right to vote or to receive dividends
on any shares of Common Stock under this Subplan, until certificates for such
shares have been issued as described above; provided, however, that if payment
of all or any portion of an Award under this Subplan has been deferred pursuant
to Section 9 of this Subplan or otherwise, but such Award otherwise has become
payable hereunder, then during the period during which payment is deferred, the
deferred Award shall be credited with additional units of Common Stock, and (if
applicable) fractions thereof, based on any dividends declared on the Common
Stock, in accordance with the terms of the EDCP.

SECTION 11.  APPLICATION OF PLAN. The provisions of the Plan shall apply to this
Subplan, except to the extent that any such provisions are inconsistent with
specific provisions of this Subplan. In particular, and without limitation,
Section 11 (relating to performance shares), Section 12 (relating to
qualification of Awards as "performance-based" under Code Section 162(m)),
Section 17 (relating to nonassignability), Section 18 (relating to adjustment of
shares available), Section 19 (relating to withholding taxes), Section 20
(relating to noncompetition and confidentiality), Section 21 (relating to
regulatory approvals and listings), Section 23 (relating to the governing law),
Section 24 (relating to changes in ownership), Section 25 (relating to changes
in control), Section 26 (relating to no rights, title, or interest in Company
assets), and Section 27 (relating to securities laws) shall apply to this
Subplan.

SECTION 12.  AMENDMENTS. The Committee may, from time to time, amend this
Subplan in any manner.


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                                   EXHIBIT A


                            EASTMAN CHEMICAL COMPANY
                   LONG-TERM PERFORMANCE SUBPLAN GRANT TABLE
                                2000-2002 CYCLE



                              Original on File in
                            Management Compensation


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                                   EXHIBIT B

                          COMPANIES IN THE PEER GROUP


Air Products and Chemicals, Inc.
CK Witco
Cytec Industries, Inc.
Dow Chemical Company/Union Carbide Corporation
E. I. du Pont de Nemours and Company
H. B. Fuller Company
The Geon Company
Great Lakes Chemical Corporation
Hercules Chemical Corporation
Imperial Chemical Industries PLC
Lyondell Petrochemical Company
Millennium Chemicals, Inc.
Morton International, Inc./Rohm & Haas Company
Solutia
Wellman, Inc.


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                                   EXHIBIT C

                            EASTMAN CHEMICAL COMPANY
                         LONG-TERM PERFORMANCE SUBPLAN
                          2000-2002 PERFORMANCE PERIOD
                                  PAYOUT TABLE

<TABLE>
<CAPTION>
      Eastman's TSR                      Payout Multiplier
         Ranking                   (Times Target Grant Amount)
      -------------                ---------------------------
      <S>                          <C>
            1                                2.0 X
            2                                1.9 X
            3                                1.8 X
            4                                1.7 X
            5                                1.6 X
            6                                1.4 X
            7                                1.2 X
            8                                1.0 X
            9                                0.8 X
           10                                0.6 X
           11                                0.4 X
           12                                0.2 X
           13                                0.0 X
           14                                0.0 X
           15                                0.0 X
           16                                0.0 X
</TABLE>


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