Document:

EMN 2015.03.31-Ex 10.01

Exhibit 10.01

 

PERFORMANCE SHARE AWARD SUBPLAN
OF THE 2012 OMNIBUS STOCK COMPENSATION PLAN
2015-2017 PERFORMANCE PERIOD

EASTMAN CHEMICAL COMPANY

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EASTMAN CHEMICAL COMPANY
PERFORMANCE SHARE AWARD SUBPLAN
OF THE 2012 OMNIBUS STOCK COMPENSATION PLAN
2015-2017 PERFORMANCE PERIOD

Section 1.Background. Under Article 4 of the Eastman Chemical Company 2012 Omnibus Stock 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 “Participants” (as defined in the Plan), and such awards may take the form of “Performance Awards” (as defined in the Plan) 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. Performance Awards may be structured as “Qualified Performance-Based Awards” (as defined in the Plan) in order to be exempt from the compensation deduction limit of Section 162(m) of the Internal Revenue Code of 1986 (“Code Section 162(m)”). The purpose of this Performance Share Award Subplan (this “Subplan”) is to set forth the terms of the Performance Awards to be awarded for the 2015-2017 Performance Period specified herein, effective as of January 1, 2015 (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 a Performance Award, calculated in accordance with Section 6 of this Subplan.
 
(ii)“Award Amount” means the number of shares of Common Stock subject to the Performance Award granted to the Participant under this Subplan at the beginning of the Performance Period.
 
(iii)“Award Payment Date” means the date the Committee approves the payout of Common Stock covered by an award under this Subplan to a Participant. 

(iv)“Comparison Group” is the group of companies within the S&P 1500 “Materials Sector” that are classified by Standard & Poor’s as Chemical companies. The S&P “Materials Sector” index is an index of industrial companies selected from the S&P “Super Composite 1500” Index.
 
(v) “Cost of Capital” reflects the Company’s cost of debt and the cost of equity, expressed as a percentage, reflecting the percentage of interest charged on debt and the percentage of expected return on equity. “Cost”, “debt”, “equity”, “interest”, “interest charged on debt”, and “return on equity” shall be determined and measured in accordance with accounting principles generally accepted in the United States (“GAAP”) as applied in preparing the Company’s consolidated financial statements as of the Effective Date, excluding the impact of any subsequent changes during the Performance Period in GAAP or in the manner of application of GAAP in the preparation of the Company’s consolidated financial statements, and including the results from any operations which are included in the Company's continuing operations as of the Effective Date and which are subsequently presented as discontinued operations during the Performance Period as a result of a divestiture.

(vi)“Earnings from Continuing Operations” shall be defined as the total sales of the Company minus the costs of all operations of any nature used to produce such sales, including taxes, plus after-tax interest associated with the Company’s capital debt (as defined in Section 2(a)(xii)). “Sales”, “costs of operations”, “taxes”, and “after-tax interest associated with capital debt” shall be determined and measured in accordance with accounting principles generally accepted in the United States (“GAAP”), as applied in preparing the Company’s consolidated financial statements as of the Effective Date, excluding the impact of any subsequent changes during the Performance Period in GAAP or in the manner of application of GAAP in the preparation of the Company’s consolidated financial statements, and including the results from any operations which are included in the Company's continuing operations as of the Effective Date and which are subsequently presented as discontinued operations during the Performance Period as a result of a divestiture.

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

(viii)“Participation Date” means February 27, 2015. 

(ix)“Performance Period” means January 1, 2015 through December 31, 2017.

(x)“Performance Year” means one of the three calendar years in the Performance Period. 

(xi)    “Qualifying Termination” means a termination of employment when one of the following criteria has been met: combined age and years of service which equals or exceeds 75; age 55 and 10 years of service; or age 50 or greater at hire date, and 5 years of service; or age 65.

(xii)“Return on Invested Capital” shall mean the return produced by funds invested in the Company and shall be determined as Earnings from Continuing Operations, as defined in Section 2(a)(vi), divided by the Average Capital Employed. The impact on Earnings from Continuing Operations and on Average Capital Employed of one or more acquisitions with an aggregate purchase price of $300 million or more and of individual acquisitions with a purchase price of greater than $100 million shall be excluded for the calendar year in which the acquisition or acquisitions occur. Average Capital Employed shall be derived by adding the Company’s capital debt plus equity at the close of the last day of the year preceding the Performance Year to the Company’s capital debt plus equity at the close of the last day of the present Performance Year, with the resulting sum being divided by two. Capital debt is defined as the sum of borrowing by the Company due within one year and long-term borrowing, as designated on the Company’s balance sheet. The resulting ratio shall be multiplied by One Hundred (100) in order to convert such to a percentage. Such percentage shall be calculated to the third place after the decimal point (i.e., xx.xxx%), and then rounded to the second place after the decimal point (i.e., xx.xx%). “Equity”, “borrowing due within one year”, and “long-term borrowing” shall be determined and measured in accordance with accounting principles generally accepted in the United States (“GAAP”), as applied in preparing the Company’s consolidated financial statements as of the Effective Date, excluding the impact of any subsequent changes during the Performance Period in GAAP or in the manner of application of GAAP in the preparation of the Company’s consolidated financial statements, and including the results from any operations which are included in the Company's continuing operations as of the Effective Date and which are subsequently presented as discontinued operations during the Performance Period as a result of a divestiture.

(xiii) “Target Award” means, with respect to any eligible Participant, the targeted value based on the percentage of base salary specified on Exhibit A hereto for the Salary Grade applicable to such Participant. 

(xiv)“TSR” means total stockholder return, 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 or closing prices of such stock on another national trading exchange, 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 stockholder’s hypothetical investment. 

(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 Compensation and Management Development Committee of the Board of Directors. 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 Article 4 of the Plan. At the end of the Performance Period, the Committee shall approve Actual Grant Amounts awarded to participants under this Subplan in accordance with the applicable approval and certification requirements specified in the Plan.

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Section 4.Eligibility; Types of Awards. The Participants who are eligible to participate in this Subplan are those employees who, as of the Participation Date, are at Salary Grade 49 and 105 and above. 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. The Covered Employees identified on Schedule A shall receive Performance Awards that are Qualified Performance-Based Awards. The remainder of the Participants shall receive Performance Awards that are not intended to be Qualified Performance-Based Awards.

Section 5.Form of Payout of Awards. Subject to the terms and conditions of the Plan and this Subplan, amounts earned in connection with the Performance Awards under this Subplan shall be paid out in the form of unrestricted shares of Common Stock; provided, however, that any fractional share of Common Stock, payable as a result of Section 9 of this Subplan or otherwise, shall be paid in cash in an amount representing the market value of such fractional share at the time of payment.

Section 6.Size of Awards.

(a)Target Award. Exhibit A hereto shows by Salary Grade the Target Long- Term Incentive Award as a percentage of base salary and the percentage of Performance Shares determined by Salary Grade. The Salary Grade to be used in determining the percentage of base salary for any Award Amount to a Participant under this Subplan shall be the Salary Grade applicable to the position held by the participant on the Participation Date. The actual size of the Award Amount to the Participant shall be determined by the Committee with respect to Participants who are executive officers of the Company, and by the Committee’s senior management delegates in the case of all other Participants, based on the Participant’s past performance and potential for contributions to the Company’s future long term success. Based on this assessment, the Participant may receive no award, the target award amount, or any amount within the Target Award range of ±25% converted to increments of full Shares. The Committee shall provide its delegates with guidelines for determining the cumulative award targets for Participants who are not executive officers of the Company. 

(b)Actual Grant Amount. Subject to the Committee’s authority to adjust the Actual Grant Amount described in Section 12, the Actual Grant Amount awarded to the Participant at the end of the Performance Period is determined by applying a multiplier to the Participant’s Award Amount. The multiplier shall be determined by comparing Company performance relative to two measures: 

(i)The Company’s TSR during the Performance Period relative to the TSRs of the companies in the Comparison Group during the Performance Period. The Company and each company in the Comparison 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 Comparison Group shall further be separated into quintiles (first 20%, second 20%, etc.) and the Company’s position, in relation to the Comparison Group, shall be expressed as a position in the applicable quintile ranking; and 

(ii)The arithmetic average, for each of the Performance Years during the Performance Period, of the Company’s average Return on Invested Capital. Moreover, in the case of Performance Awards that are intended to be Qualified Performance-Based Awards, Return on Invested Capital will be measured in a manner that complies with Code Section 162(m), including the requirement that the performance goals be objectively measured. 

An award multiplier table is shown in Exhibit B. The award multiplier is based on the Company’s performance relative to its quintile ranking relative to the Comparison Group, and its average Return on Invested Capital during the Performance Period. The award multipliers range from 2.5 (i.e., 250%), if the Company’s TSR is in the top performing quintile (top 20%) of companies in the Comparison Group and the average Return on Invested Capital is greater than 15 percentage points, to 0.0 (with no shares of Common Stock earned by Participants under this Subplan) if the Company does not meet the specified levels of performance relative to the two measures.
Section 7.Composition of Comparison Group. 

(a)Qualified Performance-Based Awards. In the case of Performance Awards that are intended to be Qualified Performance-Based Awards, any member of the Comparison Group that ceases to exist during the Performance Period shall be disregarded for the entire Performance Period. There shall be no other adjustments in the Comparison Group after commencement of the Performance Period with respect to Performance Awards that are intended to be Qualified Performance-Based Awards.

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(b)Performance Awards. In the case of Performance Awards that are not intended to be Qualified Performance-Based Awards, the Committee retains the discretion to make the following adjustments in the Comparison Group during the Performance Period. A company in the Comparison Group may be dropped from the Comparison Group if a company’s common stock ceases to be publicly traded on a national stock exchange or market; or a company is a party to a significant merger, acquisition, or other reorganization. Under these, or similar, circumstances, the company or companies may be removed from the Comparison Group, and may be replaced with another company or companies by Standard & Poor’s, consistent with their established criteria for selection of companies for the Comparison Group. In any case where the Comparison Group ceases to exist, or is otherwise determined to no longer be appropriate as the basis for a measure under this Subplan, the Committee may designate a replacement Comparison Group. In any such case, the Committee shall have authority to determine the appropriate method of calculating the TSR of such former and/or replacement Comparison Group, whether by complete substitution of the replacement Comparison Group (and disregard of the former Comparison Group) over the entire Performance Period or by pro rata calculations for each Comparison Group or otherwise.

Section 8.Preconditions to Payout Under Performance Awards.

(a)Continuous Employment. Except as specified in paragraph (b) below, to be eligible for payout under a Performance Award under this Subplan, a Participant must remain continuously employed with the Company or a Subsidiary at all times from the Effective Date through the Award Payment Date. 

(b)Qualifying Termination, Death, Disability, or Termination for an Approved Reason Before the Award Payment Date. If a Participant’s employment is terminated due to a Qualifying Termination, death, disability, or any approved reason as determined by the Committee (in the case of an executive officer) or the executive officer responsible for Human Resources (in the case of non-executive officers) prior to the Award Payment Date, the Participant shall receive, subject to the terms and conditions of the Plan and this Subplan, a payout representing a prorated portion of the Actual Grant Amount to which such Participant otherwise would have been entitled to receive under Section 6 of this Subplan had the Participant remained in employment to the end of the Performance Period, with the precise amount of such payout to be determined by multiplying the Actual Grant Amount by a fraction, the numerator of which is the number of full calendar months employed in the Performance Period from the award 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). 

Section 9.Manner and Timing of Award Payments.

(a)Timing of Award Payment. Except as provided in Section 9(c), if any Awards are payable under this Subplan, the payment of such Awards to Participants shall be made as soon as is administratively practicable after final approval by the Committee of such payments and within the first taxable year immediately following 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 under a Performance 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 may, at the sole discretion of the Committee, be converted into the right to receive a cash payment, which shall be paid at such time as permitted under Internal Revenue Code Section 409A and applicable Treasury Regulations and guidance thereunder. 

Section 10.No Rights as Stockholder. No certificates for shares of Common Stock shall be issued under this Subplan, nor shall any participant have any rights as a stockholder 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.

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Section 11.Application of Plan. The provisions of the Plan shall apply to this Subplan, and the provisions of this Subplan shall be interpreted in a manner consistent with the terms of the Plan.

Section 12.Adjustment of Actual Grant Amount. The Committee may, in its sole discretion, adjust the Actual Grant Amount to reflect overall Company performance and business and financial conditions, except in the case of a Performance Award that is a Qualified Performance-Based Award where such actions would cause the Performance Award that is a Qualified Performance-Based Award to cease to qualify for the Section 162(m) Exemption. In the case of a Performance Award that is a Qualified Performance-Based Award, the Committee shall retain the discretion to adjust such Award downward, either on a formula or discretionary basis or any combination, as the Committee determined.

Section 13.Reimbursement of Certain Compensation Following Restatement. The Performance Awards are subject to the provisions of the Plan and any applicable law or Company policy requiring reimbursement to the Company of certain incentive-based compensation following an accounting restatement due to material non-compliance by the Company with any financial reporting requirement or due to other events or conditions.

Section 14.Amendments. The Committee may, from time to time, amend this Subplan in any manner.

Section 15. Code Section 409A. All Performance Awards granted under this Subplan shall be subject to the provisions of the Plan concerning Code Section 409A, which provisions shall be incorporated into this Subplan by reference.    

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EXHIBIT A
Eastman Chemical Company
Performance Share Award Grant Table
2015-2017 Cycle

On File in Global Compensation

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EXHIBIT B
Award Multiplier Table 2015 -2017 Award Multiplier Table

	
							
	Return on Invested Capital Performance

	Eastman TSR Relative to Comparison Companies
	>7.50 to 9.00
	9.01 to 10.50
	10.51 to 12.00
	12.01 to 13.50
	13.51 to 15.00
	>15.00

	5th quintile
	0.0
	0.0
	0.0
	0.2
	0.3
	0.4

	4th quintile
	0.0
	0.2
	0.4
	0.6
	0.8
	0.9

	3rd quintile   <50%
	0.4
	0.6
	0.8
	1.0
	1.2
	1.4

	3rd quintile   ≥50%
	0.6
	0.8
	1.0
	1.3
	1.5
	1.7

	2nd quintile
	1.0
	1.2
	1.4
	1.7
	1.9
	2.1

	1st quintile
	1.0
	1.8
	2.0
	2.3
	2.4
	2.5

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EASTMAN CHEMICAL COMPANY
2012 OMNIBUS STOCK COMPENSATION PLAN

AWARD NOTICE FOR GRANT OF PERFORMANCE SHARES

Grantee:  [NAME]

Performance Period:   January 1, 2015 through December 31, 2017

Number of Performance Shares Granted ("Target Award"):  [number]

Grant Date:  January 1, 2015

This Award Notice for the Grant of Performance Shares (this "Award Notice") by and between Eastman Chemical Company ("Company") and the Grantee named above (referred to below as "you") evidences the grant by the Company of performance shares ("Performance Shares" or the "Award") to you on the date stated above (the "Grant Date") and your acceptance of such Performance Shares in accordance with the provisions of the Eastman Chemical Company 2012 Omnibus Stock Compensation Plan, as amended from time to time (the "Plan") and the provisions of the 2015-2017 Performance Share Award Subplan (the "Subplan"). For purposes of this Award Notice, any references to the Plan shall include the Subplan

The Performance Shares are subject to the terms and conditions set forth in the Plan (which is incorporated herein by reference), any rules and regulations adopted by the Board of Directors of the Company or the Compensation and Management Development Committee (collectively, the "Committee"), and this Award Notice. In the event of any conflict between the provisions of the Plan and the provisions of this Award Notice, the terms, conditions, and provisions of the Plan shall control, and this Award Notice shall be deemed to be modified accordingly. Capitalized terms used in this Award Notice that are not defined herein shall have the meanings set forth in the Plan. For purposes of this Award Notice, "Employer" means the Subsidiary that employs you, if you are not employed directly by the Company.

1.Performance Share Grant. You have been granted the number of Performance Shares specified above as the Target Award. Each Performance Share represents the right to receive a number of shares of the Company's $.01 par value Common Stock ("Common Stock") upon the attainment of specified performance conditions by the Company; provided, however, that any fractional share of Common Stock shall be paid in cash in an amount representing the market value of such fractional share at the time of payment.

2.Performance Conditions. The Performance Shares are subject to the attainment of the following performance conditions as defined in Section 6 of the Subplan and as specifically set forth in Exhibit A of this Award Notice (the "Performance Conditions"):

(a)      a comparison of the total stockholder return (referred to in the Subplan as "TSR," and reflecting both the change in stock price and the amount of dividends declared) of the Company during the Performance Period, to the TSRs of the companies in the Comparison Group (the group of companies within the Standard and Poor’s “Materials Sector” that are classified as Chemical companies. The S&P “Materials Sector” index, identified as Global Industry Classification Standard 15, is an index of industrial companies selected from the S&P “Super Composite 1500” index); and

(b)    the arithmetic average for each of the Performance Years during the Performance Period of the Company’s average Return on Capital minus a Return on Capital target. 

3.Vesting of Performance Shares. Subject to Sections 7 and 8 of this Award Notice, if you remain continuously employed with your Employer, the Company or one of its Subsidiaries during the Performance Period, you shall become vested in a number of Performance Shares equal to the Target Award multiplied by the multiplier as set forth in Exhibit A of this Award Notice corresponding to the Company's achievement of the Performance Conditions ("Actual Earned Shares").

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4.Settlement of Performance Shares. The Company shall direct its transfer agent to issue you one share of Common Stock for each Actual Earned Share in your name or a nominee in book entry, or to issue one or more physical stock certificates representing such shares of Common Stock in your name, as soon as administratively practicable after the end of the Performance Period and final approval by the Committee; provided, however, that if payment of the Actual Earned Shares could, in the reasonable estimation of the Committee, result in your receiving compensation, in the year of scheduled payment, in excess of the amount deductible by the Company under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), or other applicable local laws, rules or regulations, then such portion (or all, as applicable) of the Actual Earned Shares as could, in the reasonable estimation of the Committee, create such excess compensation, may, at the sole discretion of the Committee, be converted into the right to receive a cash payment, which shall be paid at such time as permitted under Code Section 409A, applicable Treasury Regulations and guidance thereunder, as specified in Section 9 of the Subplan, or as permitted under applicable local laws, rules or regulations. 

If any portion of the Actual Earned Shares is converted into a right to receive a cash payment as described above, an amount representing the Fair Market Value of the deferred portion of the Actual Earned Shares will be credited to the Eastman Stock Account of the Eastman Chemical Company Executive Deferred Compensation Plan (the “EDCP”) and hypothetically invested in units of Common Stock. Thereafter, such amount will be treated in the same manner as other investments in the EDCP, all as specified in Section 9 of the Subplan.

5.Nontransferability of Performance Shares; Limitation on Issuance of Shares. The Performance Shares are 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. Following the Performance Period, certificates for the shares of Common Stock underlying the Actual Earned Shares may be issued during your lifetime only to you, except in the case of a permanent disability involving mental incapacity. Upon your death, any unissued shares of Common Stock underlying the Actual Earned Shares may be transferred to your legal representative as determined under applicable law, subject to the terms set forth in Section 7 of this Performance Shares Notice.

6.Limitation of Rights. You will not have any rights as a stockholder with respect to the shares of Common Stock underlying the Performance Shares until you become the holder of record of such shares following the determination of the Actual Earned Shares upon conclusion of the Performance Period and the issuance of such shares to you pursuant to Section 4 of this Award Notice.

7.Termination. 

(a)    Upon a termination of your employment with your Employer, the Company or any of its Subsidiaries by reason of a Qualifying Termination (as defined below) or by reason of death or disability, or for another approved reason as determined by the Committee (in the case of the executive officers) or the executive officer responsible for Human Resources (in the case of non-executive employees), you (or your legal representative, as applicable) will receive after the end of the Performance Period, subject to the terms and conditions of the Plan, a pro-rata portion of the Actual Earned Shares that you otherwise would have received had you remained in continuous employment with your Employer, the Company or one of its Subsidiaries during the entire Performance Period based upon the number of full months in which you were employed during the Performance Period. For purposes of this Award Notice, a “Qualifying Termination” means a termination of employment by reason of resignation or without cause when:

		
	•
	your combined age and years of service with your Employer, the Company and its Subsidiaries equals or exceeds 75;

		
	•
	you have attained age 55 and 10 years of service with your Employer, the Company and its Subsidiaries; 

		
	•
	you had attained age 50 or greater as of your hire date and you have attained 5 years of service with your Employer, the Company and its Subsidiaries; or

		
	•
	you have attained age 65. 

(b)    Upon termination of employment with your Employer, the Company or any of its Subsidiaries for reasons other than those described in this Section, your Performance Shares shall be immediately canceled and forfeited. In such event, neither you nor any of your successors, heirs, assigns or personal representatives will thereafter have any further rights or interest in such shares or otherwise in this Award.

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8.Income Tax and Social Insurance Contributions Withholding.

(a)    Regardless of any action the Company or your Employer take with respect to any or all income tax (including U.S. federal, state and local taxes and/or non-U.S. taxes), social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and your Employer: (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Performance Shares, including the grant of the Performance Shares, upon settlement or payment of the Performance Shares pursuant to the attainment of the performance objectives, and the subsequent sale of any shares of Common Stock acquired pursuant to the Performance Shares and the receipt of any dividends; and (ii) do not commit to structure the terms of the grant or any aspect of the Performance Shares to reduce or eliminate your liability for Tax-Related Items. 

(b)    Prior to the delivery of shares of Common Stock upon settlement or payment of the Performance Shares pursuant to the attainment of the performance objectives, if your country of residence (and/or your country of employment, if different) requires withholding of Tax-Related Items, the Company shall withhold a sufficient number of whole shares of Common Stock otherwise issuable under the Performance Shares that have an aggregate Fair Market Value sufficient to pay the minimum Tax-Related Items required to be withheld. In cases where the Fair Market Value of the number of whole shares of Common Stock withheld is greater than the minimum Tax-Related Items required to be withheld, the Company shall make a cash payment to you equal to the difference as soon as administratively practicable. The cash equivalent of the shares of Common Stock withheld will be used to settle the obligation to withhold the Tax-Related Items. Alternatively, the Company or your Employer may withhold the minimum Tax-Related Items required to be withheld with respect to the shares of Common Stock in cash from your regular salary/wages, or from any other amounts payable to you. In the event the withholding requirements are not satisfied through the withholding of shares of Common Stock by the Company or through the withholding of cash from your regular salary/wages or any other amounts payable to you, no shares of Common Stock will be issued to you (or your estate) upon settlement or payment of the Performance Shares unless and until satisfactory arrangements (as determined by the Board of Directors) have been made by you with respect to the payment of any Tax-Related Items which the Company and your Employer determines, in its sole discretion, must be withheld or collected with respect to such Award. If you are subject to Tax-Related Items in more than one jurisdiction, you acknowledge that the Company or your Employer may be required to withhold or account for Tax-Related Items in more than one jurisdiction. By accepting the Performance Shares, you expressly consent to the withholding of shares of Common Stock and/or the withholding of cash from your regular salary/wages or other amounts payable to you as provided for hereunder. All other Tax-Related Items related to the Performance Shares and any shares of Common Stock delivered in payment thereof are your sole responsibility.

9.Noncompetition; Confidentiality. You will not, without the written consent of the Company, either during your employment by your Employer, the Company or any of its Subsidiaries or thereafter, disclose to anyone or make use of any confidential information which you have acquired during your employment relating to any of the business of your Employer, the Company or any of its Subsidiaries, except as such disclosure or use may be required in connection with your work as an employee of the Company. During your employment by your Employer, the Company, or any of its Subsidiaries, and for a period of two years after the termination of such employment, you will not, either as principal, agent, consultant, employee or otherwise, engage in any work or other activity in competition with the Company in the field or fields in which you have worked for your Employer, the Company or any of its Subsidiaries. The provisions in this Section 9 apply separately in the United States and in other countries but only to the extent that its application shall be reasonably necessary for the protection of your Employer, the Company or any of its Subsidiaries. You will forfeit all rights under this Award Notice to or related to the Performance Shares if, in the determination of the Committee (in the case of executive officers) or of the executive officer responsible for Human Resources (in the case of non-executive employees), you have violated any of the provisions of this Section 9, and in that event any payment or other action with respect to the Performance Shares shall be made or taken, if at all, in the sole discretion of the Committee or the executive officer responsible for Human Resources.   

10.Restrictions on Issuance of Shares. If at any time the Company determines that listing, registration or qualification of the shares covered by an Award upon any securities exchange or under any state or federal law, or the approval of any governmental agency, is necessary or advisable prior to the delivery of any certificate for shares of Common Stock subject to the Performance Shares, no such certificate may be delivered unless and until such listing, registration, qualification or approval shall have been effected or obtained free of any conditions not acceptable to the Company. 

11.Change in Ownership; Change in Control. Article 14 of the Plan contains certain special provisions that will apply in the event of a Change in Ownership or Change in Control, respectively.

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12.Adjustment of Terms. The adjustment provisions of Article 15 of the Plan will control in the event of a nonreciprocal transaction between the Company and its stockholders that causes the per-share value of the Common Stock to change (including, without limitation, any stock dividend, stock split, spin-off, rights offering, or large nonrecurring cash dividend) or upon the occurrence of in anticipation of any other corporate event or transaction involving the Company (including, without limitation, any merger, combination, or exchange of shares).

13.Adjustment of Actual Grant Amount. The Committee may, in its sole discretion, adjust the Actual Earned Shares to reflect overall Company performance and business and financial conditions, except in the case of an Award that is a Qualified Performance-Based Award where such actions would cause the Performance Shares that is a Qualified Performance-Based Award to cease to qualify for the performance-based exemption under Code Section 162(m). In the case of an Award that is a Qualified Performance-Based Award, the Committee shall retain the discretion to adjust such Award downward, either on a formula or discretionary basis or any combination, as the Committee determined.

14.Reimbursement of Certain Compensation Following Restatement. The Award is subject to the provisions of the Plan and any applicable law or Company policy requiring reimbursement to the Company of certain incentive-based compensation following an accounting restatement due to material non-compliance by the Company with any financial reporting requirement or due to other events or conditions.

15.Repatriation and Legal/Tax Compliance Requirements. If you are a resident of or employed in a country other than the United States, you agree, as a condition of the grant of the Performance Shares, to repatriate all payments attributable to the shares of Common Stock and/or cash acquired under the Plan (including, but not limited to, dividends and any proceeds derived from the sale of the shares of Common Stock acquired pursuant to this Award) in accordance with local foreign exchange rules and regulations in your  country of residence (and country of employment, if different). In addition, you agree to take any and all actions, and consent to any and all actions taken by your Employer, the Company or any of its Subsidiaries as may be required to allow your Employer, the Company or any of its Subsidiaries to comply with local laws, rules and regulations in your country of residence (and country of employment, if different). Finally, you agree to take any and all actions that may be required to comply with your personal legal and tax obligations under local laws, rules and regulations in your country of residence (and country of employment, if different).

If you are resident or employed in a country that is a member of the European Union, the grant of the Performance Shares and this Award Notice is intended to comply with the age discrimination provisions of the EU Equal Treatment Framework Directive, as implemented into local law (the “Age Discrimination Rules”). To the extent that a court or tribunal of competent jurisdiction determines that any provision of this Award Notice is invalid or unenforceable, in whole or in part, under the Age Discrimination Rules, the Company, in its sole discretion, shall have the power and authority to revise or strike such provision to the minimum extent necessary to make it valid and enforceable to the full extent permitted under local law.

16.No Guarantee of Employment. The grant of the Performance Shares shall not create any employment relationship with the Company or any of its Subsidiaries. Further, the grant of the Performance Shares shall not confer upon you any right of continued employment with your Employer nor limit in any way the right of your Employer to terminate your employment at any time. You shall have no rights as a stockholder of the Company with respect to any shares of Common Stock issuable upon the settlement or payment of the Performance Shares pursuant to the attainment of the performance objectives until the date of issuance of such shares of Common Stock.

17.Discretionary Nature of Grant; No Vested Rights. You acknowledge and agree that the Plan is discretionary in nature and may be amended, cancelled, or terminated by the Company, in its sole discretion, at any time. The grant of the Performance Shares under the Plan is a one-time benefit and does not create any contractual or other right to receive a grant of Awards or benefits in lieu of Awards in the future. Future grants, if any, will be at the sole discretion of the Company, including, but not limited to, the form and timing of any grant, the number of shares of Common Stock subject to the grant, and the vesting provisions. Any amendment, modification or termination of the Plan or the Subplan shall not constitute a change or impairment of the terms and conditions of your employment with your Employer.

18.Termination Indemnities. Your participation in the Plan and Subplan is voluntary. The value of the Performance Shares and any other awards granted under the Plan and Subplan is an extraordinary item of compensation outside the scope of your employment (and your employment contract, if any). Any grant under the Plan or Subplan, including the grant of the Performance Shares, is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension, or retirement benefits or similar payments.

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19.Consent to Collection, Processing and Transfer of Personal Data. Pursuant to applicable personal data protection laws, the Company hereby notifies you of the following in relation to your personal data and the collection, processing and transfer of such data in relation to the Company’s grant of the Performance Shares and your participation in the Plan. The collection, processing and transfer of your personal data is necessary for the Company’s administration of the Plan and your participation in the Plan. Your denial and/or objection to the collection, processing and transfer of personal data may affect your participation in the Plan. As such, you voluntarily acknowledge and consent (where required under applicable law) to the collection, use, processing and transfer of personal data as described herein. 

The Company and its Affiliates and Subsidiaries hold certain personal information about you, including your name, home address and telephone number, date of birth, social security number or other employee identification number, salary, nationality, job title, any shares of Common Stock or directorships held in the Company or any Affiliate or Subsidiary, details of all equity awards or any other entitlement to shares of Common Stock awarded, canceled, purchased, vested, unvested or outstanding in your favor, for the purpose of managing and administering the Plan (“Data”). The Data may be provided by you or collected, where lawful, from third parties, and the Company and its Affiliates and Subsidiaries will process the Data for the exclusive purpose of implementing, administering and managing your participation in the Plan. The Data processing will take place through electronic and non-electronic means according to logics and procedures strictly correlated to the purposes for which Data are collected and with confidentiality and security provisions as set forth by applicable laws and regulations in your country of residence. Data processing operations will be performed minimizing the use of personal and identification data when such operations are unnecessary for the processing purposes sought. Data will be accessible within the organization of the Company and its Affiliates and Subsidiaries only by those persons requiring access for purposes of the implementation, administration and operation of the Plan and for your participation in the Plan.

The Company and its Affiliates and Subsidiaries will transfer Data as necessary for the purpose of implementation, administration and management of your participation in the Plan, and the Company and its Affiliates and Subsidiaries may further transfer Data to any third parties assisting the Company and its Affiliates and Subsidiaries in the implementation, administration and management of the Plan. These recipients may be located in the European Economic Area, or elsewhere throughout the world, such as the United States. You hereby authorize (where required under applicable law) them to receive, possess, use, retain and transfer the Data, in electronic or other form, for purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of Shares on your behalf to a broker or other third party with whom you may elect to deposit any Shares acquired pursuant to the Plan. 

You may, at any time, exercise your rights provided under applicable personal data protection laws, which may include the right to (a) obtain confirmation as to the existence of the Data, (b) verify the content, origin and accuracy of the Data, (c) request the integration, update, amendment, deletion, or blockage (for breach of applicable laws) of the Data, and (d) to oppose, for legal reasons, the collection, processing or transfer of the Data which is not necessary or required for the implementation, administration and/or operation of the Plan and your participation in the Plan. You may seek to exercise these rights by contacting your local HR manager or the Company’s Human Resources Department.

20.Private Placement. If you are a resident and/or employed outside of the United States, the grant of the Performance Shares is not intended to be a public offering of securities in your country of residence (and country of employment, if different). The Company has not submitted any registration statement, prospectus or other filing with the local securities authorities (unless otherwise required under local law), and the Performance Shares is not subject to the supervision of the local securities authorities. 

21.Electronic Delivery. The Company, in its sole discretion, may decide to deliver any documents related to the Performance Shares to you under the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

22.English Language. If you are resident outside of the United States, you acknowledge and agree that it is your express intent that the Performance Shares Notice, the Plan, the Subplan and all other documents, notices and legal proceedings entered into, given or instituted pursuant to the Performance Shares, be drawn up in English. If you have received the Performance Shares Notice, the Plan or any other documents related to the Performance Shares translated into a language other than English, and if the meaning of the translated version is different from the English version, the meaning of the English version shall control.

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23.Addendum. Notwithstanding any provisions of the Performance Shares Notice to the contrary, the Performance Shares shall be subject to any special terms and conditions for your country of residence (and country of employment, if different), as set forth in the applicable Addendum to the Performance Shares Notice. Further, if you transfer residence and/or employment to another country reflected in an Addendum to the Performance Shares Notice, the special terms and conditions for such country will apply to you to the extent the Company determines, in its sole discretion, that the application of such terms and conditions is necessary or advisable in order to comply with local law, rules and regulations or to facilitate the operation and administration of the Performance Shares, the Plan, and the Subplan (or the Company may establish alternative terms and conditions as may be necessary or advisable to accommodate your transfer). Any applicable Addendum shall constitute part of the Performance Shares Notice.

24.Additional Requirements. The Company reserves the right to impose other requirements on the Performance Shares, any payment made pursuant to the Performance Shares, and your participation in the Plan, to the extent the Company determines, in its sole discretion, that such other requirements are necessary or advisable in order to comply with local law, rules and regulations or to facilitate the operation and administration of the Performance Shares and the Plan. Such requirements may include (but are not limited to) requiring you to sign any agreements or undertakings that may be necessary to accomplish the foregoing.

25.Governing Law. This Award Notice shall be construed, administered and governed in all respects under and by the applicable laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation to the substantive law of another jurisdiction.

26.Venue. In accepting the Performance Shares grant, you are deemed to submit to the exclusive jurisdiction and venue of the federal or state courts of the State of Tennessee of the United States of America to resolve any and all issues that may arise out of or relate to the Performance Shares and the Performance Shares Notice.

27.Binding Effect. This Award Notice shall be binding upon the Company and you and its and your respective heirs, executors, administrators and successors.

28.Conflict. To the extent the terms of the Performance Shares Notice are inconsistent with the Plan, the provisions of the Plan shall control and supersede any inconsistent provision of the Performance Shares Notice.

29.Non-Negotiable Terms. The terms of the Performance Shares Notice are not negotiable, but you may refuse to accept the Performance Shares by notifying the Company’s executive officer responsible for Human Resources in writing; any such refusal of acceptance will immediately cancel and forfeit the award. 

*********************

[Remainder of page intentionally left blank]

63

EASTMAN CHEMICAL COMPANY
2012 OMNIBUS STOCK COMPENSATION PLAN

ADDENDUM TO AWARD NOTICE FOR GRANT OF PERFORMANCE SHARES

In addition to the terms of Eastman Chemical Company 2012 Omnibus Stock Compensation Plan (the “Plan”), the 2015-2017 Performance Share Award Subplan (the "Subplan"), and the Award Notice for the Grant of Performance Shares (the “Award Notice”), the Performance Shares are subject to the following additional terms and conditions as set forth in this addendum to the extent you reside and/or are employed in one of the countries addressed herein (the “Addendum”). All defined terms as contained in this Addendum shall have the same meaning as set forth in the Plan, the Subplan, and the Award Notice. To the extent you transfer residence and/or employment to another country, the special terms and conditions for such country as reflected in this Addendum (if any) will apply to you to the extent the Company determines, in its sole discretion, that the application of such terms and conditions is necessary or advisable in order to comply with local laws, rules and regulations, or to facilitate the operation and administration of the Performance Shares, the Plan, and the Subplan (or the Company may establish alternative terms and conditions as may be necessary or advisable to accommodate your transfer).

	
	
	China

The following provisions shall apply to the extent you are a local national of the People's Republic of China ("PRC"):

1.    Termination of Employment. Except as otherwise required by the State Administration of Foreign Exchange (the "SAFE") and notwithstanding any provision in the Award Notice or the Plan to the contrary, upon a termination of your employment with your Employer, the Company or any of its Subsidiaries by reason of a Qualifying Termination (as defined below) or by reason of death or disability, or for another approved reason as determined by the Committee (in the case of the executive officers) or the executive officer responsible for Human Resources (in the case of non-executive employees) prior to completion of the Performance Period:

		
	a. 
	If such termination occurs before the mid-point of the Performance Period, you (or your legal representative, as applicable) shall become vested in a number of Performance Shares equal to the Target Award; or 

		
	b. 
	If such termination occurs on or after the mid-point of the Performance Period, you (or your legal representative, as applicable) shall become vested in a number of Performance Shares equal to the Target Award multiplied by the multiplier as set forth in Exhibit A of this Award Notice corresponding to the Company's achievement of the most recent Performance Conditions available on the date of termination, as determined by the Committee in its sole discretion. 

2.    Immediate Sale of Shares. Notwithstanding anything in the Award Notice to the contrary, all shares of Common Stock issued in connection with your Performance Shares shall be immediately sold unless and until the Committee determines otherwise. For purposes of the foregoing, the Company shall establish procedures for effectuating the immediate sale of the shares of Common Stock issued in connection with your Performance Shares (including procedures whereby the Company may issue sales instructions on your behalf), and you hereby agree to comply with such procedures and to take any and all actions as the Company may determine, in its sole discretion, are necessary or advisable for purposes of complying with PRC laws, rules and regulations.

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3.    Exchange Control Restrictions. You acknowledge and agree that you will be required immediately to repatriate to the PRC the proceeds from the sale of any shares of Common Stock acquired under the Plan, as well as any other cash amounts attributable to the shares of Common Stock acquired under the Plan (collectively, "Cash Proceeds"). Further, you acknowledge and agree that the repatriation of the Cash Proceeds must be effected through a special bank account established by your Employer, the Company or one of its Subsidiaries, and you hereby consent and agree that the Cash Proceeds may be transferred to such account by the Company on your behalf prior to being delivered to you. The Cash Proceeds may be paid to you in U.S. dollars or local currency at the Company’s discretion. If the Cash Proceeds are paid to you in U.S. dollars, you understand that a U.S. dollar bank account must be established and maintained in China so that the proceeds may be deposited into such account. If the Cash Proceeds are paid to you in local currency, you acknowledge and agree that the Company is under no obligation to secure any particular exchange conversion rate and that the Company may face delays in converting the Cash Proceeds to local currency due to exchange control restrictions. You agree to bear any currency fluctuation risk between the time the shares of Common Stock are sold and the Cash Proceeds are converted into local currency and distributed to you. You further agree to comply with any other requirements that may be imposed by your Employer, the Company and its Subsidiaries in the future in order to facilitate compliance with exchange control requirements in the PRC.

4.    Administration. Your Employer, the Company and its Subsidiaries shall not be liable for any costs, fees, lost interest or dividends or other losses you may incur or suffer resulting from the enforcement of the terms of this Addendum or otherwise from the operation and enforcement of the terms of the Plan, the Award Notice and the Option in accordance with PRC law including, without limitation, any applicable SAFE rules, regulations and requirements.

BY SIGNING BELOW, YOU ACKNOWLEDGE, UNDERSTAND AND AGREE TO THE PROVISIONS OF THE AWARD NOTICE, THE PLAN AND THIS ADDENDUM.

__________________________________
Signature

__________________________________
Printed Name

_____________________
Date

IMPORTANT NOTE: THIS ADDENDUM MUST BE SIGNED AND RETURNED TO 

Eileen Tan
Singapore (ECAP)
Compensation and Benefits / Regional HR Manager
9 North Buona Visa Drive
Singapore  138588

NO LATER THAN 90 DAYS FOLLOWING THE GRANT DATE.

65

	
	
	France

1.    English Language. You acknowledge and agree that it is your express intent that this Award Notice, the Plan and all other documents, notices and legal proceedings entered into, given or instituted pursuant to the Performance Shares, be drawn up in English. If you have received this Award Notice, the Plan, the Subplan or any other documents related to the Performance Shares translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control. 

Langue anglaise. Vous reconnaissez et consentez que c'est votre intention expresse que cet Accord, le Projet et tous les autres documents, les notifications et l'événement légal est entré dans, compte tenu de ou institué conformément à la Récompense de Award, est formulé dans l'anglais. Si vous avez reçu cet Accord, le Projet ou aucuns autres documents liés a relaté à la Récompense de Award traduite dans une langue autrement que l'anglais, et si le sens de la version traduite est différent de la version anglaise, la version anglaise contrôlera.

BY SIGNING BELOW, YOU ACKNOWLEDGE, UNDERSTAND AND AGREE TO THE PROVISIONS OF THE AWARD NOTICE, THE PLAN AND THIS ADDENDUM.
__________________________________
Signature
__________________________________
Printed Name
_____________________
Date

IMPORTANT NOTE: THIS ADDENDUM MUST BE SIGNED AND RETURNED TO 

Karen van den Heuvel
Eastman Chemical B.V.
HR-Compensation and Benefits
Capelle, Netherlands 

NO LATER THAN 120 DAYS FOLLOWING THE GRANT DATE.

66

	
	
	Malaysia

1.    Consent to Collection, Processing and Transfer of Personal Data. This provision replaces Section 19 of the Award Notice in its entirety:

67

68

BY SIGNING BELOW, YOU ACKNOWLEDGE, UNDERSTAND AND AGREE TO THE PROVISIONS OF THE AWARD NOTICE, THE PLAN AND THIS ADDENDUM.

__________________________________
Signature

__________________________________
Printed Name

____________________
Date

IMPORTANT NOTE: THIS ADDENDUM MUST BE SIGNED AND RETURNED TO

Eileen Tan
Singapore (ECAP)
Compensation and Benefits / Regional HR Manager
9 North Buona Visa Drive
Singapore  138588

NO LATER THAN 120 DAYS FOLLOWING THE GRANT DATE.

69

	
	
	Mexico

1.    Commercial Relationship. You expressly recognize that your participation in the Plan, and the Company’s grant of the Performance Shares does not constitute an employment relationship between you and the Company. The Company has granted you the Performance Shares as a consequence of the commercial relationship between the Company and the Company’s Subsidiary in Mexico that employs you (i.e., your Employer), and the Company’s Subsidiary in Mexico is your sole employer. Based on the foregoing, (a) you expressly recognize the Plan, the Subplan, and the benefits you may derive from your participation in the Plan does not establish any rights between you and your Employer, (b) the Plan, the Subplan, and the benefits you may derive from your participation in the Plan are not part of the employment conditions and/or benefits provided by your Employer, and (c) any modifications or amendments of the Plan or the Subplan by the Company, or a termination of the Plan or Subplan by the Company, shall not constitute a change or impairment of the terms and conditions of your employment with your Employer.
BY SIGNING BELOW, YOU ACKNOWLEDGE, UNDERSTAND AND AGREE TO THE PROVISIONS OF THE AWARD NOTICE, THE PLAN AND THIS ADDENDUM.

__________________________________
Signature
__________________________________
Printed Name
_____________________
Date
IMPORTANT NOTE: THIS ADDENDUM MUST BE SIGNED AND RETURNED TO

Jorge Luis Hernandez Sosa
HR Manager, Latin American
Santo Toribio - MEXICO

NO LATER THAN 120 DAYS FOLLOWING THE GRANT DATE.

70

	
	
	Netherlands

1.    Waiver of Termination Rights. In consideration of the grant of your Award, you agree that you waive any and all rights to compensation or damages as a result of any termination of employment for any reason whatsoever, insofar as those rights result or may result from (a) the loss or diminution in value of such rights or entitlements under the Plan or the Subplan, or (b) you cease to have rights under, or ceasing to be entitled to any awards under the Plan or Subplan as a result of such termination.

71

	
	
	Singapore

1.    Qualifying Person Exemption. The following provision shall supplement Section 20 of the Performance Shares Notice: 

The grant of the Performance Shares under the Plan is being made pursuant to the “Qualifying Person” exemption” under section 273(1)(f) of the Securities and Futures Act (Chapter 289, 2006 Ed.) (“SFA”). The Plan or the Subplan have not been lodged or registered as a prospectus with the Monetary Authority of Singapore. You should note that, as a result, the Performance Shares is subject to section 257 of the SFA and accordingly, you will  be unable to make (a) any subsequent sale of any shares of Common Stock pursuant to the Performance Shares in Singapore or (b) any offer of sale of any shares of Common Stock acquired as a result of the Performance Shares in Singapore, unless such sale or offer is made pursuant to the exemptions under Part XIII Division (1) Subdivision (4) (other than section 280) of the SFA (Chapter 289, 2006 Ed.).

	
	
	South Korea

1.    Consent to Collection, Processing and Transfer of Personal Data. The following provision shall replace Section 19 of the Award Notice in its entirety: 

Pursuant to applicable personal data protection laws, the Company hereby notifies you of the following in relation to your personal data and the collection, processing and transfer of such data in relation to the Company’s grant of Performance Shares and your participation in the Plan. The collection, processing and transfer of your personal data is necessary for the Company’s administration of the Plan and your participation in the Plan, and although you have the right to deny or object to the collection, processing and transfer of personal data, your denial and/or objection to the collection, processing and transfer of personal data may affect your participation in the Plan. As such, you voluntarily acknowledge and consent (where required under applicable law) to the collection, use, processing and transfer of personal data as described herein. 

The Company holds certain personal information about you, including your name, home address and telephone number, date of birth, social security number (resident registration number) or other employee identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all Performance Shares, options or any other entitlement to Shares awarded, canceled, purchased, vested, unvested or outstanding in your favor, for the purpose of managing and administering the Plan (“Data”). The Data may be provided by you or collected, where lawful, from third parties, and the Company will process the Data for the exclusive purpose of implementing, administering and managing your participation in the Plan. The Data processing will take place through electronic and non-electronic means according to logics and procedures strictly correlated to the purposes for which Data are collected and with confidentiality and security provisions as set forth by applicable laws and regulations in your country of residence (and country of employment, if different). Data processing operations will be performed minimizing the use of personal and identification data when such operations are unnecessary for the processing purposes sought. Data will be accessible within the Company’s organization only by those persons requiring access for purposes of the implementation, administration and operation of the Plan and for your participation in the Plan.

The Company will transfer Data internally as necessary for the purpose of implementation, administration and management of your participation in the Plan, and the Company may further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. The third party recipients of Data may be any Affiliates or Subsidiaries of the Company and / or Fidelity Stock Plan Services, LLC ("Fidelity") or any successor or any other third party that the Company or Fidelity (or its successor) may engage to assist with the implementation, administration and management of the Plan from time to time. These recipients may be located in the European Economic Area, or elsewhere throughout the world, such as the United States. You hereby authorize (where required under applicable law) them to receive, possess, use, retain and transfer the Data, in electronic or other form, for purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of Shares on your behalf to a broker or other third party with whom you may elect to deposit any Shares acquired pursuant to the Plan. 

The Company and any third party recipient of the Data will use, process and store the Data only to the extent they are necessary for the purposes described above.

72

You may, at any time, exercise your rights provided under applicable personal data protection laws, which may include the right to (a) obtain confirmation as to the existence of the Data, (b) verify the content, origin and accuracy of the Data, (c) request the integration, update, amendment, deletion, or blockage (for breach of applicable laws) of the Data, (d) to oppose, for legal reasons, the collection, processing or transfer of the Data which is not necessary or required for the implementation, administration and/or operation of the Plan and your participation in the Plan, and (e) withdraw your consent to the collection, processing or transfer of Data as provided hereunder (in which case, your RSUs will be null and void). You may seek to exercise these rights by contacting your local Human Resources manager or the Company’s Human Resources Department.
BY SIGNING BELOW, YOU ACKNOWLEDGE, UNDERSTAND AND AGREE TO THE PROVISIONS OF THE AWARD NOTICE, THE PLAN AND THIS ADDENDUM.

__________________________________
Signature

__________________________________
Printed Name

_____________________
Date

IMPORTANT NOTE: THIS ADDENDUM MUST BE SIGNED AND RETURNED TO

Eileen Tan
Singapore (ECAP)
Compensation and Benefits / Regional HR Manager
9 North Buona Visa Drive
Singapore  138588

NO LATER THAN 120 DAYS FOLLOWING THE GRANT DATE.

73

	
	
	United Kingdom

1.    Income Tax and Social Insurance Contribution Withholding. The following provision shall replace Section 8 of the Performance Shares Notice:

Regardless of any action the Company or your Employer takes with respect to any or all income tax, primary and secondary Class 1 National Insurance contributions, payroll tax or other tax-related withholding attributable to or payable in connection with or pursuant to the grant of the Performance Shares, the settlement or payment of the Performance Shares pursuant to the attainment of the performance objectives, and the acquisition of shares of Common Stock, or the release or assignment of the Performance Shares for consideration, or the receipt of any other benefit in connection with the Performance Shares (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility. Furthermore, the Company and/or your Employer: (a) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Performance Shares, including the grant of the Performance Shares, settlement or payment of the Performance Shares pursuant to the attainment of the performance objectives, the acquisition of shares of Common Stock, the subsequent sale of any shares of Common Stock acquired and the receipt of any dividends; and (b) do not commit to structure the terms of the grant or any aspect of the Performance Shares to reduce or eliminate your liability for Tax-Related Items.
As a condition of the issuance of shares of Common Stock upon settlement or payment of the Performance Shares pursuant to the attainment of the performance objectives, the Company and your Employer shall be entitled to withhold and you agree to pay, or make adequate arrangements satisfactory to the Company and/or your Employer to satisfy, all obligations of the Company and/or your Employer to account to HM Revenue & Customs (“HMRC”) for any Tax-Related Items. In this regard, you authorize the Company and your Employer to withhold all applicable Tax-Related Items legally payable by you from any salary/wages or other cash compensation paid to you by the Company and your Employer. Alternatively, or in addition, if permissible under local law, you authorize the Company and/or your Employer, each at its discretion and pursuant to such procedures as it may specify from time to time, to satisfy the obligations with regard to all Tax-Related Items legally payable by you by one of the following: (a) by electing to have the Company withhold from the shares of Common Stock to be issued upon settlement or payment of the Performance Shares pursuant to the attainment of the performance objectives a sufficient number of whole shares of Common Stock having an aggregate Fair Market Value that would satisfy the withholding amount, provided, however, that in no event may the whole number of shares of Common Stock withheld in the case of this clause (a) exceed the applicable statutory minimum withholding rates (if any); or (b) in cash. If the obligation for Tax-Related Items is satisfied by withholding a number of shares of Common Stock as described herein, you are deemed to have been issued the full number of shares of Common Stock subject to the Performance Shares, notwithstanding that a number of the shares of Common Stock are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of the Performance Shares.  
If, by the date on which the event giving rise to the Tax-Related Items occurs (the "Chargeable Event"), you have relocated to a jurisdiction other than the jurisdiction in which you were living in at the Date of Grant, you acknowledge that the Company and your Employer may be required to withhold or account for Tax-Related Items in more than one jurisdiction. 
You also agree that the Company and your Employer may determine the amount of Tax-Related Items to be withheld and accounted for by reference to the maximum applicable rates, without prejudice to any right which you may have to recover any overpayment from the relevant tax authorities. 
You shall pay to the Company or your Employer any amount of Tax-Related Items that the Company or your Employer may be required to account to HMRC with respect to the Chargeable Event that cannot be satisfied by the means previously described. If payment or withholding is not made within 90 days of the Chargeable Event or if the Chargeable Event occurs on or after April 6, 2014, within 90 days after the end of the U.K. tax year in which the Chargeable Event occurs or such other period specified in section 222(1)(c) of the U.K. Income Tax (Earnings and Pensions) Act 2003 (the "Due Date"), you agree that the amount of any uncollected Tax-Related Items shall (assuming you are not a director or executive officer of the Company (within the meaning of Section 13(k) of the U.S. Securities and Exchange Act of 1934, as amended), constitute a loan owed by you to your Employer, effective on the Due Date. You agree that the loan will bear interest at the then-current HMRC Official Rate and it will be immediately due and repayable, and the Company and/or your Employer may recover it at any time thereafter by any of the means referred to above. If any of the foregoing methods of collection are not allowed under applicable laws or if you fail to comply with your obligations in connection with the Tax-Related Items as described in this section, the Company may refuse to deliver the shares of Common Stock acquired under the Plan. 

74

3.    Exclusion of Claim. You acknowledge and agree that you will have no entitlement to compensation or damages in consequence of the termination of your employment with your Employer for any reason whatsoever and whether or not in breach of contract, insofar as such entitlement arises or may arise from your ceasing to have rights under or to be entitled to settlement or payment of the Performance Shares as a result of such termination, or from the loss or diminution in value of the Performance Shares. Upon the grant of the Performance Shares, you shall be deemed irrevocably to have waived any such entitlement.

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EXHIBIT A 

Award Multiplier Table 2015 -2017 Award Multiplier Table

	
							
	Return on Invested Capital Performance

	Eastman TSR Relative to Comparison Companies
	>7.50 to 9.00
	9.01 to 10.50
	10.51 to 12.00
	12.01 to 13.50
	13.51 to 15.00
	>15.00

	5th quintile
	0.0
	0.0
	0.0
	0.2
	0.3
	0.4

	4th quintile
	0.0
	0.2
	0.4
	0.6
	0.8
	0.9

	3rd quintile   <50%
	0.4
	0.6
	0.8
	1.0
	1.2
	1.4

	3rd quintile   ≥50%
	0.6
	0.8
	1.0
	1.3
	1.5
	1.7

	2nd quintile
	1.0
	1.2
	1.4
	1.7
	1.9
	2.1

	1st quintile
	1.0
	1.8
	2.0
	2.3
	2.4
	2.5

76MNK Exhibit 10.1 03.27.15

Exhibit 10.1
EXECUTION VERSION
 

FIRST AMENDMENT TO THE 
NOTE PURCHASE AGREEMENT

This FIRST AMENDMENT TO THE NOTE PURCHASE AGREEMENT (this “Amendment”), dated as of January 20, 2015, is entered into by and among the following parties:
		
	(i)
	MALLINCKRODT SECURITIZATION S.À R.L., a private limited liability company (société à responsabilité limitée) incorporated and existing under the laws of Luxembourg with its registered office at 42-44, avenue de la Gare, L-1610 Luxembourg, with a share capital of USD20,200 and registered with the Luxembourg trade and companies register under number B 188808, as Issuer;

		
	(i)
	MALLINCKRODT LLC, as Servicer;

		
	(ii)
	SUNTRUST BANK, as a Purchaser; and

		
	(iii)
	PNC BANK, NATIONAL ASSOCIATION, as a Purchaser and as Administrative Agent.

Capitalized terms used but not otherwise defined herein (including such terms used above) have the respective meanings assigned thereto in the Note Purchase Agreement described below.
BACKGROUND
WHEREAS, the parties hereto have entered into a Note Purchase Agreement, dated as of July 28, 2014 (as amended, restated, supplemented or otherwise modified through the date hereof, the “Note Purchase Agreement”) and desire to amend the Note Purchase Agreement as set forth herein;
WHEREAS, concurrently herewith and pursuant to that certain Joinder Agreement, dated as of the date hereof, Questcor Pharmaceuticals, Inc., is becoming a party to the Purchase and Sale Agreement, as an Originator thereunder (the “Questcor Joinder”);
WHEREAS, concurrently herewith, the parties hereto and the Originators are entering into the First Amendment to the Purchase and Sale Agreement, dated as of the date hereof (the “PSA Amendment”); 
WHEREAS, concurrently herewith, Mallinckrodt LLC and Mallinckrodt APAP LLC are entering into a Sale Agreement, dated as of the date hereof (the “APAP Sale Agreement”);
WHEREAS, concurrently herewith, Mallinckrodt LLC and Mallinckrodt Nuclear Medicine LLC are entering into a Sale Agreement, dated as of the date hereof (the “Nuclear Medicine Sale Agreement”);
WHEREAS, concurrently herewith, the Parent and the Administrative Agent are entering into an Amended and Restated Performance Guaranty, dated as of the date hereof (the “A&R Performance Guaranty”);

	
			
	 
	 
	 

711379147 14453709

WHEREAS, concurrently herewith, the parties hereto are entering into an Amended and Restated Fee Letter, dated as of the date hereof (the “A&R Fee Letter”); and
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
SECTION 1.    Amendments to the Note Purchase Agreement.  The Note Purchase Agreement is hereby amended as follows:
(a)    The following new defined term and definition thereof is hereby added to Section 1.01 of the Note Purchase Agreement in appropriate alphabetical order:
“Luxembourg GAAP” means generally accepted accounting principles in Luxembourg, applicable to the circumstances as of the date of determination, consistently applied.
“Subject Originator” means each Originator and Sub-Originator other than Questcor Pharmaceuticals, Inc.
(b)    The definition of “Contractual Dilution Accrual” set forth in Section 1.01 of the Note Purchase Agreement is replaced in its entirety with the following:
“Contractual Dilution Accrual” means, at any time of determination, the aggregate amount of dilution or similar adjustments arising out of chargebacks, terms discounts, indirect rebates, direct rebates (net of any direct rebate recovery) and key promotional programs which are customary for the Subject Originators and specified in the related Contract or applicable marketing program related to the applicable Receivable and Obligor thereof that are expected by the Servicer to be made or otherwise incurred with respect to the then outstanding Pool Receivables as such expected dilution and similar adjustments are reflected on the books and records of the Subject Originators and reserved for by the Subject Originators, as determined in consultation with the external accountants of the Subject Originators and in accordance with the customary procedures established by the Subject Originators and such accountants.
(c)    The definition of “LMIR” set forth in Exhibit I of the Note Purchase Agreement is amended by adding “the greater of (a) 0.00% and (b)” after “any day during any Interest Period”.
(d)    The definition of “Facility Limit” set forth in set forth in Section 1.01 of the Note Purchase Agreement is amended by deleting the amount “$160,000,000” where it appears therein and substituting the amount “$250,000,000” therefor.
(e)    The definition of “Sale Agreement” set forth in Section 1.01 of the Note Purchase Agreement is replaced in its entirety with the following:

	
			
	 
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711379147 14453709

“Sale Agreement” means, individually and collectively, each Sale Agreement, among a Sub-Originator and Mallinckrodt, as such agreement may be amended, supplemented or otherwise modified from time to time, substantially in the form of Exhibit J hereto, duly executed by each party thereto, and consented to in writing by the Administrative Agent and each Purchaser.
(f)    The definition of “Sub-Originator” set forth in Section 1.01 of the Note Purchase Agreement is replaced in its entirety with the following:
“Sub-Originator” means, individually and collectively, each Subsidiary of Parent from time to time party to a Sale Agreement as a “Seller” thereunder.
(g)    Clause (g) of Section 2.02 of the Note Purchase Agreement is amended by deleting the amount “$140,000,000” where it appears therein and substituting the amount “$50,000,000” therefor.
(h)    Clause (i) of Section 7.01 of the Note Purchase Agreement is amended by deleting the word “GAAP” where it appears therein and substituting the phrase “Luxembourg GAAP” therefor.
(i)    Clause (l) of Section 7.01 of the Note Purchase Agreement is replaced in its entirety with the following:
(l)    Investment Company Act; Not a Covered Fund.  The Issuer is not an “investment company,” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act, and the Issuer is not a “covered fund” under the Volcker Rule (Section 619 of the Dodd‐Frank Wall Street Reform and Consumer Protection Act and the regulations implemented thereunder).  In reaching those conclusions, although other statutory or regulatory exemptions may be available under the Investment Company Act, the Issuer has relied on Section 3(c)(5) of the Investment Company Act.
(j)    Clause (c) of Section 8.01 of the Note Purchase Agreement is amended by deleting the word “GAAP” where it appears therein and substituting the phrase “Luxembourg GAAP” therefor.
(k)    Sub-clause (i) of clause (c) of Section 8.01 of the Note Purchase Agreement is amended by deleting the word “GAAP” where it appears therein and substituting the phrase “Luxembourg GAAP” therefor.
(l)    Section 14.21 of the Note Purchase Agreement is replaced in its entirety with the following:

	
			
	 
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711379147 14453709

Section 14.21.  Post-Closing Covenants.
(a)    On or prior to February 13, 2015, the Issuer and the Servicer shall, and shall instruct each Originator and Sub-Originator to, instruct all Obligors to cease delivering payments on the Pool Receivables to (i) any Lock-Box or Lock-Box Account maintained with JPMorgan Chase Bank, N.A. (each, a “JPMorgan Lock-Box” or “JPMorgan Lock-Box Account”, as applicable) or (ii) any account or related postal box at MUFG Union Bank, N.A. to which any of Questcor Pharmaceuticals, Inc.’s (“Questcor”) Obligors have been instructed to remit payments (each, a “Union Bank Postal Box” or “Union Bank Account”, as applicable) and, in each case, to instead deliver such payments to any other Lock-Box or Lock-Box Account.
(b)    On or prior to the earlier of (i) May 31, 2015 and (ii) the date that the Issuer has knowledge that each Obligor has ceased delivering payments on the Pool Receivables to the JPMorgan Lock-Boxes and the JPMorgan Lock-Box Accounts, the Issuer shall close each JPMorgan Lock-Box and JPMorgan Lock-Box Account.  Each of the Issuer and the Servicer hereby (i) consents to the termination by the Administrative Agent of that certain Lock-Box Agreement, dated as of the Closing Date (the “JPMorgan Lock-Box Agreement”), among JPMorgan Chase Bank, N.A., as Lock-Box Bank, the Issuer, the Servicer and the Administrative Agent, on the earlier of (A) May 31, 2015 and (B) the date that each JPMorgan Lock-Box and JPMorgan Lock-Box Account has been closed and (ii) agrees from time to time, at its own expense, promptly to execute (if necessary) and deliver all further instruments and documents, and to take all further actions, that may be necessary or desirable, or that the Administrative Agent may reasonably request, to effect the termination of the JPMorgan Lock-Box Agreement.  
(c)    On or prior to the earlier of (i) May 31, 2015 and (ii) the date that the Issuer has knowledge that each Obligor has ceased delivering payments on the Pool Receivables to the Union Bank Postal Boxes and the Union Bank Accounts, the Issuer shall close each Union Bank Postal Box and Union Bank Account.
(d)    Notwithstanding anything to the contrary set forth in this Agreement or the Purchase and Sale Agreement, the Administrative Agent and each Purchaser hereby agree that no Event of Default, Unmatured Event of Default, Purchase and Sale Termination Event or Unmatured Purchase and Sale Termination Event shall occur prior to February 13, 2015 resulting solely from Questcor, the Servicer or any other Person directing the Obligor of any Pool Receivables that were originated by Questcor (the “Questcor Receivables”) to remit any payment with respect thereto into any Union Bank Postal Box or Union Bank Account (so long as such Union Bank Postal Box or Union Bank Account is not a Lock-Box  or a Lock-Box Account, 

	
			
	 
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711379147 14453709

collectively, the “Non-Lock-Box Accounts”).  The temporary waiver provided for in this Section 14.21(d) shall automatically terminate on February 13, 2015 without any required action on the part of any Person.
(e)    Notwithstanding anything to the contrary set forth in this Agreement or the Purchase and Sale Agreement, (i) so long as both (A) no Event of Default or Unmatured Event of Default has occurred and is continuing and (B) the Issuer and the Servicer are in compliance in all respects with each of the requirements set forth in clauses (a), (c) and (d) of this Section 14.21 with respect to any Questcor Receivable, such Questcor Receivable shall be an Eligible Receivable for purposes of this Agreement and each of the other Transaction Documents, so long as such Questcor Receivable complies with each of the eligibility requirements set forth in the definition of “Eligible Receivable” (as defined in Section 1.01 of this Agreement) (other than the requirement set forth in clause (b) thereof to instruct the related Obligor to remit Collections in respect thereof directly to a Lock-Box or Lock-Box Account) and (ii) no Credit Party or Affected Person is hereby waiving or releasing, nor have they agreed to waive or release in the future, any right or claim to indemnification or reimbursement by, or damages from, any Originator, any Sub-Originator, the Servicer, the Issuer or any other Person under any Transaction Document, including without limitation, for any liability, obligation, loss, damage, penalty, judgment, settlement, cost, expense or disbursement resulting or arising directly or indirectly from Questcor Receivables being remitted to any Non-Lock-Box Account.
(m)    Exhibit J attached hereto is added to the Note Purchase Agreement as Exhibit J thereto.  
(n)    Schedule I of the Note Purchase Agreement is replaced in its entirety with Schedule I attached hereto.  
SECTION 2.    Non-Ratable Advance.  The parties hereto agree that this Section 2 constitutes an Advance Request pursuant to Section 2.02(a) of the Note Purchase Agreement (notwithstanding the non-ratable allocation among the Groups) and the Administrative Agent and the Purchasers waive any notice requirement set forth therein solely with respect to the Advance to occur on the date hereof.  The Issuer hereby requests an Advance in the amount of $80,000,000 to be made on the date hereof (of which $53,450,000 will be funded by the PNC Group, and $26,550,000 will be funded by the SunTrust Group).  The proceeds of such Advance should be deposited to the account so designated by the Issuer to the Purchasers in writing prior to the date hereof.  After giving effect to such Advance, the Aggregate Note Balance will be $230,000,000, PNC’s Note Balance will be $147,200,000 and SunTrust’s Note Balance will be $82,800,000. 
SECTION 3.    Representations and Warranties of the Issuer and Servicer.  Each of the Issuer and the Servicer hereby represents and warrants to the other parties hereto that the following statements shall be true and correct (the Issuer and the Servicer shall be deemed to have represented 

	
			
	 
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711379147 14453709

and warranted, as to itself only and not as to the other, that such statements are true and correct and as to clauses (c) through (e), such representations and warranties by the Servicer shall be deemed to have been given to the knowledge of the Servicer):
(a)    Representations and Warranties.  Immediately after giving effect to this Amendment, the representations and warranties made by such Person in the Transaction Documents to which it is a party are true and correct as of the date hereof (unless stated to relate solely to an earlier date, in which case such representations or warranties were true and correct as of such earlier date).
(b)    Enforceability.  This Amendment and each other Transaction Document to which it is a party, as amended hereby, constitute the legal, valid and binding obligation of such Person enforceable against such Person in accordance with its respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity, regardless of whether enforceability is considered in a proceeding in equity or at law.
(c)    No Event of Default.  No event has occurred and is continuing, or would result from the transactions contemplated hereby, that constitutes an Event of Default or Unmatured Event of Default.
(d)    Borrowing Base Deficit.  No Borrowing Base Deficit exists or would exist after giving effect to the Advance requested pursuant to Section 2 above.
(e)    Termination Date.  The Termination Date has not occurred.
SECTION 4.    Effect of Amendment.  All provisions of the Note Purchase Agreement and the other Transaction Documents, as expressly amended and modified by this Amendment, shall remain in full force and effect.  After this Amendment becomes effective, all references in the Note Purchase Agreement (or in any other Transaction Document) to “this Note Purchase Agreement”, “this Agreement”, “hereof”, “herein” or words of similar effect referring to the Note Purchase Agreement shall be deemed to be references to the Note Purchase Agreement as amended by this Amendment. This Amendment shall not be deemed, either expressly or impliedly, to waive, amend or supplement any provision of the Note Purchase Agreement other than as set forth herein.
SECTION 5.    Effectiveness.  This Amendment shall become effective as of the date hereof upon the Administrative Agent’s receipt of:
(a)    counterparts to this Amendment executed by each of the parties hereto;
(b)    counterparts to the Questcor Joinder executed by each of the parties thereto;
(c)    counterparts to the A&R Fee Letter executed by each of the parties thereto; 
(d)    counterparts to the PSA Amendment executed by each of the parties thereto;

	
			
	 
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711379147 14453709

(e)    counterparts to the APAP Sale Agreement executed by each of the parties thereto;
(f)    counterparts to the Nuclear Medicine Sale Agreement executed by each of the parties thereto;
(g)    counterparts to the A&R Performance Guaranty executed by each of the parties thereto;
(h)    confirmation that all fees owing under the A&R Fee Letter have been paid in accordance with its terms; and
(i)    such other documents, agreements, certificates, opinions and instruments as the Administrative Agent may reasonably request prior to the date hereof.
SECTION 6.    Severability.  Any provisions of this Amendment which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 7.    Transaction Document.  This Amendment shall be a Transaction Document for purposes of the Note Purchase Agreement.
SECTION 8.    Counterparts.  This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute but one and the same instrument.  Delivery of an executed counterpart of a signature page to this Amendment by facsimile or e-mail transmission shall be effective as delivery of a manually executed counterpart hereof.
SECTION 9.    GOVERNING LAW.  THIS AMENDMENT, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO ANY OTHER CONFLICTS OF LAW PROVISIONS THEREOF).
SECTION 10.      CONSENT TO JURISDICTION.  
(a)     EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT SITTING IN NEW YORK CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AMENDMENT, AND EACH PARTY HERETO HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND 

	
			
	 
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DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.  THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING.  THE PARTIES HERETO AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. 
(b)    EACH OF THE ISSUER AND THE SERVICER CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO IT AT ITS ADDRESS SPECIFIED IN SECTION 14.02 OF THE NOTE PURCHASE AGREEMENT.  NOTHING IN THIS SECTION 10 SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY OTHER CREDIT PARTY TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 11.    Section Headings.  The various headings of this Amendment are included for convenience only and shall not affect the meaning or interpretation of this Amendment, the Note Purchase Agreement or any provision hereof or thereof.
[SIGNATURE PAGES FOLLOW]

	
			
	 
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711379147 14453709

IN WITNESS WHEREOF, the parties hereto have executed this Amendment by their duly authorized officers as of the date first above written.
	
			
	 
	MALLINCKRODT SECURITIZATION S.À R.L. 
 

	 
	By:
	/s/ Marie Dhersin Luporsi

	 
	Name:
	Marie Dhersin Luporsi

	 
	Title:
	Manager

	 
	 
	 

	 
	MALLINCKRODT LLC,
as the Servicer 
 
 

	 
	By:
	/s/ John E. Einwalter

	 
	Name:
	John E. Einwalter

	 
	Title:
	Vice President and Treasurer

	 
	 
	 

711379147 14453709    S-1    First Amendment to the
 Note Purchase Agreement
(Mallinckrodt Securitization S.à r.l.)

	
			
	 
	PNC BANK, NATIONAL ASSOCIATION, 
as Administrative Agent 
 

	 
	By:
	/s/ Mark S. Falcione

	 
	Name:
	Mark S. Falcione

	 
	Title:
	Executive Vice President

	 
	 
	 

	 
	PNC BANK, NATIONAL ASSOCIATION, 
as a Purchaser 

 
By:    
Name:  Mark S. Falcione 
Title:    Executive Vice President

	 
	By:
	/s/ Mark S. Falcione

	 
	Name:
	Mark S. Falcione

	 
	Title:
	Executive Vice President

	 
	 
	 

711379147 14453709    S-2    First Amendment to the
 Note Purchase Agreement
(Mallinckrodt Securitization S.à r.l.)

	
			
	 
	SUNTRUST BANK, 
as a Purchaser  

	 
	By:
	/s/ Michael Peden

	 
	Name:
	Michael Peden

	 
	Title:
	Vice President

	 
	 
	 

 

711379147 14453709    S-3    First Amendment to the
 Note Purchase Agreement
(Mallinckrodt Securitization S.à r.l.)

EXHIBIT J 
Form of Sale Agreement

This Sale Agreement, dated as of [_____________] [__], 20[__] (this “Agreement”), is
between [_____________], a [_____________] (the “Seller”), and MALLINCKRODT LLC, a
Delaware limited liability company (the “Buyer”).

W I T N E S S E T H :

WHEREAS, the Seller is an indirect wholly-owned subsidiary of the Buyer;

WHEREAS, the Seller generates Receivables in the ordinary course of its business;

WHEREAS, the Receivables generated by the Seller are not tracked or accounted for
separately from those of the Buyer and are serviced by the Buyer, so that the Buyer receives all
collections on such Receivables;

WHEREAS, the Seller, in consideration of payment by the Buyer of the purchase price
for the Receivables in cash or the issuance by the Buyer of intercompany indebtedness to the
Seller, wishes to sell all of its Receivables and all of the related Related Rights to the Buyer, the
Buyer is willing to acquire such Receivables and the related Related Rights from the Seller, on
the terms and subject to the conditions set forth herein, and the Seller and the Buyer believe that
the Seller is receiving fair consideration for the Receivables and the related Related Rights;

WHEREAS, the Seller and the Buyer intend each such transaction to be a true sale of
Receivables and the related Related Rights by the Seller to the Buyer, providing the Buyer with
the full benefits of ownership of the Receivables, and the Seller and the Buyer do not intend the
transactions hereunder to be characterized as a loan from the Buyer to the Seller;

WHEREAS, the Buyer and certain other originators, Mallinckrodt LLC, as initial servicer
and Mallinckrodt Securitization S.à r.l., as buyer, have entered into that certain Purchase and
Sale Agreement dated July 28, 2014 (as amended, the “PSA”), wherein the Buyer has agreed to
sell Receivables and related Related Rights to Mallinckrodt Securitization S.à r.l. (the “Issuer”);
and

WHEREAS, capitalized terms used herein but not otherwise defined shall have the
meanings set forth in the PSA.

NOW, THEREFORE, in consideration of the premises and of the commitments made
hereunder the parties hereto agree as follows:

1.     For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Seller hereby sells to the Buyer on each Sale Date that is prior

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OHSUSA:760435930.4
    

to the Purchase and Sale Termination Date, without recourse or representation or
warranty of any kind except as provided herein, all of its right, title and interest in all its
Receivables and the related Related Rights that it has not previously sold to the Buyer hereunder, in each case at a price equal to the Purchase Price for such Receivables and
the related Related Rights as set forth in the PSA. The Buyer shall pay to the Seller on
each Sale Date the purchase price for the Receivables and the related Related Rights sold
to the Seller on such Sale Date either in cash, or with the consent of the Seller, by issuing
intercompany debt to the Seller.

2.     It is the express intent of the parties hereto that each transfer of Receivables and
the related Related Rights by the Seller to the Buyer as provided in this Agreement be,
and be construed as, an absolute sale of the Receivables and the related Related Rights. It
is, further, not the intention of the parties that any such transfer be deemed the grant of a
security interest in the Receivables and the related Related Rights by the Seller to the
Buyer to secure a debt or other obligation of the Seller. In the event, however, that,
notwithstanding the intent of the parties, any Receivables or related Related Rights are
held to be the property of the Seller, or if for any other reason this Agreement is held or
deemed to create a security interest in the Receivables and the related Related Rights,
then (a) this Agreement shall constitute a security agreement, and (b) each transfer
provided for in this Agreement shall be deemed to be a grant by the Seller to the Buyer
of, and the Seller hereby grants to the Buyer, to secure all of the Seller’s obligations
hereunder, a security interest in all of the Seller’s right, title, and interest, whether now
owned or hereafter acquired, in and to the Receivables and the related Related Rights and
all proceeds thereof.

3.     Representations and Warranties. In order to induce the Buyer to enter into this
Agreement and to make purchases hereunder, Seller hereby represents and warrants that
each representation and warranty set forth in this Section is true and correct with respect
to it and the Receivables and Related Rights sold by it hereunder on the applicable Sale
Date:
a. Binding Obligations. This Agreement constitutes legal, valid and binding
obligations of Seller, enforceable against Seller in accordance with its terms,
except (i) as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and (ii) as such enforceability may
be limited by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
b. Compliance with Applicable Law. The Seller (i) shall duly satisfy all
obligations on its part to be fulfilled under or in connection with the
Receivables and the Related Rights sold by it hereunder and (ii) has complied
in all material respects with all Applicable Law in connection with the
Receivables sold by it hereunder.
c. Valid Sale. Each sale of Receivables and the Related Rights made by Seller
pursuant to this Agreement shall constitute a valid sale, transfer and
assignment of Receivables and Related Rights to the Buyer, enforceable

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OHSUSA:760435930.4
    

against creditors of, and purchasers from, the Buyer, except (i) as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and (ii) as such enforceability may be limited by
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
d. No Sanctions. Seller is not a Sanctioned Person. To Seller’s knowledge, no
Obligor was a Sanctioned Person at the time of origination of any Receivable
owing by such Obligor. Seller, either in its own right or through any third
party, (a) does not have any of its assets in a Sanctioned Country or in the
possession, custody or control of a Sanctioned Person in violation of any Anti-
Terrorism Law; (b) does not do business in or with, or derives any of its
income from investments in or transactions with, any Sanctioned Country or
Sanctioned Person in violation of any Anti-Terrorism Law; or (c) does not
engages in any dealings or transactions prohibited by any Anti-Terrorism
Law.
e. Perfection; Good Title. Immediately preceding its sale of each Receivable
hereunder, Seller was the owner of such Receivable sold or purported to be
sold free and clear of any Adverse Claims, and each such sale hereunder
constitutes a valid sale, transfer and assignment to the Buyer of all of Seller’s
right, title and interest in, to and under the Receivables sold by it, free and
clear of any Adverse Claims. On or before the date hereof and before the
generation by Seller of any new Receivable to be sold or otherwise conveyed
hereunder, all financing statements and other documents, if any, required to be
recorded or filed in order to perfect and protect the Buyer’s ownership interest
in such Receivable against all creditors of and purchasers from Seller will
have been duly filed in each filing office necessary for such purpose, and all
filing fees and taxes, if any, payable in connection with such filings shall have
been paid in full. Upon the transfer to the Buyer of each new Receivable sold
or otherwise conveyed or purported to be conveyed hereunder and on the date
hereof for then existing Receivables, the Buyer shall have a valid and
perfected first priority ownership or security interest in each Receivable sold
to it hereunder, free and clear of any Adverse Claim.
f. Solvent. After giving effect to the transactions contemplated by this
Agreement, Seller is Solvent.

4. Covenants. From the date hereof until the Final Payout Date (unless earlier
terminated as provided herein), Seller will, unless the Administrative Agent (as assignee
of Issuer, which is the assignee of the Buyer) and the Buyer shall otherwise consent in
writing, perform the following covenants:
a. Compliance with Laws. Seller will comply with all Applicable Laws to which
it may be subject if the failure to comply could reasonably be expected to have
a Material Adverse Effect.
b. Sales, Liens, etc. Except as otherwise provided herein, Seller will not sell,
assign (by operation of law or otherwise) or otherwise dispose of, or create or

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OHSUSA:760435930.4
    

suffer to exist any Adverse Claim arising through or under it upon (including,
without limitation, the filing of any financing statement) or with respect to,
any Receivable or other Related Rights sold or purported to be sold by it
hereunder, or assign any right to receive income in respect thereof.
c. Ownership Interest, Etc. Seller shall, at its expense, take all action necessary
or reasonably desirable to establish and maintain a valid and enforceable
ownership or first priority perfected security interest in the Receivables, the
Related Rights and Collections with respect thereto, transferred or purported
to be transferred by it hereunder, free and clear of any Adverse Claim, in favor
of the Buyer (and Issuer and the Administrative Agent (on behalf of the
Secured Parties), as the assignee of the Issuer), including taking such action to
perfect, protect or more fully evidence the interest of the Buyer (and Issuer
and the Administrative Agent (on behalf of the Secured Parties), as the
assignee of the Issuer) as the Buyer, Issuer, the Administrative Agent or any
Purchaser may reasonably request.
d. Further Assurances. Seller hereby authorizes and hereby agrees from time to
time, at its own expense, promptly to execute (if necessary) and deliver all
further instruments and documents, and to take all further actions, that may be
necessary or desirable, or that the Buyer, Issuer or the Administrative Agent
(as assignee of the Issuer) may reasonably request, to perfect, protect or more
fully evidence the purchases made hereunder and/or security interest granted
pursuant to this Agreement, or to enable the Buyer, Issuer or the
Administrative Agent (as assignee of the Issuer) to exercise and enforce their
respective rights and remedies hereunder.
e. Mergers, Acquisitions, Sales, etc. Seller shall not (i) be a party to any merger,
consolidation or other corporate restructuring, except (I) a merger of Seller
into an Originator or (II) a merger, consolidation or other corporate
restructuring where the Buyer, the Administrative Agent (as Issuer’s assignee)
and each Purchaser have each (A) received notice thereof no later than or
promptly after the effective date, (B) within thirty (30) days following the
effectiveness thereof, received executed copies of all documents, certificates
and opinions (including, without limitation, opinions relating to corporate,
bankruptcy and UCC matters) as the Buyer or the Administrative Agent shall
reasonably request and (C) within thirty (30) days following the effectiveness
thereof, been satisfied that all other action to perfect and protect the interests
of the Buyer and the Administrative Agent, on behalf of the Purchasers, as the
Issuer’s assignee, in and to the Receivables to be sold by it hereunder and
other Related Rights, as reasonably requested by the Buyer or the
Administrative Agent (as Issuer’s assignee) shall have been taken by, and at
the expense of, Seller (including the filing of any UCC financing statements,
the receipt of certificates and other requested documents from public officials)
or (ii) directly or indirectly sell, transfer, assign, convey or lease (A) whether
in one or a series of transactions, all or substantially all of its assets except (I)
to an Originator or (II) if prior to the effective date thereof or in connection
therewith (i) this Agreement is or has been terminated and (ii) the

4
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Administrative Agent (as Issuer’s assignee) and each Purchaser shall have
received notice thereof or (B) any Receivables or Related Rights or any
interest therein (other than pursuant to this Agreement) except if prior to the
effective date thereof or in connection therewith (i) this Agreement is or has
been terminated and (ii) the Administrative Agent (as Issuer’s assignee) and
each Purchaser shall have received notice thereof.

5. Amendments. The provisions of this Agreement may from time to time be
amended, modified or waived, if such amendment, modification or waiver is in writing
and executed by the Buyer and Seller, with (prior to the Final Payout Date) the prior
written consent of the Administrative Agent (as assignee of the Issuer) and the Majority
Purchasers (as assignee of the Issuer).

6. Binding Effect; Termination. This Agreement shall be binding upon and inure to
the benefit of the Buyer and Seller and their respective successors and permitted assigns.
This Agreement shall create and constitute the continuing obligations of the parties hereto
in accordance with its terms, and shall remain in full force and effect until such time as
the parties hereto shall agree.

7. Third-Party Beneficiaries. By execution below, Seller expressly acknowledges
and agrees that all of the Buyer’s rights, title, and interests in, to, and under this
Agreement, shall be assigned by the Buyer to the Issuer, which shall in turn assign all
such right, title and interest to the Administrative Agent (for the benefit of the Secured
Parties) pursuant to the Purchase and Sale Agreement and the Note Purchase Agreement,
and Seller consents to such assignment. Each of the parties hereto acknowledges and
agrees that the Issuer and, prior to the Final Payout Date, the Purchasers and the
Administrative Agent are third-party beneficiaries of the rights of the Buyer arising
hereunder, and notwithstanding anything to the contrary contained herein or in any other
Transaction Document, upon the occurrence and during the continuation of an Event of
Default under the Note Purchase Agreement, the Administrative Agent, and not the
Buyer or the Issuer, shall have the sole right to exercise all such rights and related
remedies.

8. Governing Law. This Agreement shall be governed and construed in accordance
with the laws of the State of New York.

IN WITNESS whereof this Agreement has been entered into the date first above
written.
                                                                        [_________________________]
                            
By:                                                          
Name:
Title:

                        

5
OHSUSA:760435930.4
    

MALLINCKRODT LLC

By:                                                              
Name:
Title

6
OHSUSA:760435930.4
    

SCHEDULE I 
Commitments

	
			
	PNC Group

	Party
	Capacity
	Maximum Commitment

	PNC
	Purchaser
	$160,000,000

	
			
	SunTrust Bank Group

	Party
	Capacity
	Maximum Commitment

	SunTrust Bank
	Purchaser
	$90,000,000

1
OHSUSA:760435930.4

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