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                                                                   EXHIBIT 10.01

                            EASTMAN CHEMICAL COMPANY

                         EASTMAN ANNUAL PERFORMANCE PLAN
                (AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1997)
                             (AMENDED MARCH 4, 1998)
                           (AMENDED DECEMBER 1, 1999)
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ARTICLE 1.  PURPOSE

The Eastman Annual Performance Plan ("APP", or the "Plan") is a variable
compensation plan for Eastman Chemical Company (the "Company") management level
individuals which is designed to deliver a portion of annual cash compensation
according to business performance. APP is intended to provide an incentive for
superior performance and to motivate participants toward higher achievement and
business results, and to tie the interests of management-level individuals to
the interests of the Company and its shareowners. The Annual Performance Plan is
also intended to secure the full deductibility of Plan compensation payable to
the Company's Chief Executive Officer and the four highest compensated executive
officers (collectively, the "Covered Employees") whose compensation is required
to be reported in the Company's proxy statement, and all compensation payable
hereunder to such persons is intended to qualify as "performance-based
compensation" as described in Section 162(m) of the Internal Revenue Code of
1986, as amended.

ARTICLE 2.  SUMMARY OF PLAN DESIGN

The annual cash compensation of each participant in the Plan consists of a base
salary, an annual Eastman Performance Plan award, and an annual performance
award from the Annual Performance Plan. APP is designed so that a target award
will be paid when the expected financial performance level is reached.
Generally, APP awards vary from zero, if financial goals are not met, to two
times the target award for specified above-goal performance. Target awards range
from 5% of Target Total Annual Compensation ("TTAC"), as defined in Exhibit 1,
for lower management positions, to 35% of TTAC for the Chief Executive Officer.
APP awards are in addition to the 5% target award level for the Eastman
Performance Plan. APP awards are paid in a lump sum in March of the year
following the year for which performance was measured ("Performance Year").

ARTICLE 3.  ELIGIBILITY AND PARTICIPATION

3.01     GENERAL ELIGIBILITY

The Plan is designed for management-level individuals (salary grade 46 and
above) in key roles which have an impact on the financial performance of the
Company. Prior to or at the time performance objectives are established for a
Performance Year, the Compensation and Management Development Committee (the
"Committee") of the Board of Directors (the "Board") will confirm in writing the
salary grade level of the individuals eligible to participate in the Plan for
such Performance Year.

3.02     NEW PARTICIPANTS DURING THE PERFORMANCE YEAR

Individuals who are appointed to positions eligible for Plan participation
during the Performance Year become eligible for participation on the first day
of the month of the appointment. Individuals who become participants

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during the Performance Year will receive a pro rata award based upon the number
of months in an eligible position during the Performance Year. (For example, an
individual promoted to an eligible position on May 1 during the Performance Year
would receive an award based upon eight months' participation in the Plan, or
8/12 (eight-twelfths) of an award).

3.03     JOB CHANGES DURING THE PERFORMANCE YEAR

Participants who change jobs during a Performance Year which results in a change
of their target award level will receive a pro rata award for the interval of
time spent in each job. Each pro rata award is calculated using the
participant's base salary just prior to each job change which changes their
target award level; and their base pay at the end of the Performance Year. Each
pro rata award is based on the financial performance of the full Performance
Year. In these instances, each pro rata award will compose the participant's
award for the full Performance Year.

3.04     TERMINATIONS

Participants who (1) retire, or (2) become disabled under the Eastman Long-Term
Disability Plan, or (3) terminate employment under circumstances which qualify
for a Termination Allowance Benefit under the Company's Termination Allowance
Plan, or (4) terminate employment as a result of, pursuant to, or in connection
with layoff, special separation, divestiture, or similar circumstances, where
such termination does not qualify for a Termination Allowance but for which
Company management in its sole discretion authorizes an award, receive a pro
rata award at the normal time of payout based on base salary at the time of
separation and financial performance at the end of the Performance Year.

The estates of participants who die receive a pro rata award at the normal time
of payout based on base salary at the time of death and financial performance at
the end of the Performance Year.

Participants who terminate employment with the Company for reasons other than
those specified under this Section 3.04 will receive an award only if they were
actively employed on the last scheduled workday of the Performance Year.

ARTICLE 4.  PERFORMANCE YEAR, GOAL SETTING, AND PERFORMANCE GOALS

4.01     PERFORMANCE YEAR

The Plan's Performance Year shall be the calendar year beginning on January 1
and ending on December 31. The performance period with respect to which payouts
may be payable under the APP shall generally be the Performance Year.

4.02     PERFORMANCE GOAL SETTING

In December of each year, The Chief Executive Officer will recommend performance
goals for the following Performance Year to the Committee. No later than the
first day of the Performance Year (or such later date as may be permitted by
Section 162(m) of the Internal Revenue Code of 1986, as amended), the Committee
shall establish in writing, with respect to the Performance Year, one or more
performance goals, the relative weights to be assigned to such goals, a specific
target objective or objectives with respect to such performance goals, and
objective formulae or methods for computing the amount of the APP award payable
to each participant if the performance goals are attained.

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4.03     PERFORMANCE GOALS

Performance goals shall be based upon one or more of the following business
criteria, alone or in combination, as the Committee deems appropriate: (i)
economic value created; (ii) productivity; (iii) cost improvements; (iv) cash
flow; (v) sales revenue growth; (vi) earnings from operations; (vii) quality;
(viii) customer satisfaction; provided, however, that such business criteria, as
they apply to performance goals for Covered Employees, shall be based on
performance for the Company as a whole. Performance goals for persons other than
Covered Employees, may be based on the above business criteria for the Company
as a whole or for any functional unit or units, as the Committee deems
appropriate. Performance goals will include a minimum, maximum, and target level
of performance, with the size of the award based upon the level attained for
each of the criteria selected, and the weighting selected for each of the
criteria. Once established, performance goals for a particular Performance Year
cannot be changed.

ARTICLE 5.  AWARD DETERMINATION

5.01     CERTIFICATION OF PERFORMANCE

As soon as practicable following the availability of performance results for the
completed Performance Year, the Committee shall determine the Company's
performance in relation to the performance goals for that period and certify in
writing the extent to which performance goals were satisfied. Except as
otherwise provided in the next two sentences, measurement of the Company's
performance against the performance goals established by the Committee shall be
objectively determinable, and to the extent they are expressed in standard
accounting terms, shall be determined according to generally accepted accounting
principles as in existence on the date on which the performance goals are
established and without regard to any changes in such principles after such
date. With respect to participants other than Covered Employees, in determining
whether the performance goals established by the Committee have been met, to the
extent that such goals are expressed in terms of financial performance, the
committee may in its discretion adjust the financial results for a Performance
Year to exclude the effect of unusual charges or income items or other events
(including, without limitation, acquisitions or divestitures), which are
distortive of financial results for the Performance Year. The Committee may in
its discretion reduce (but not increase) the resulting APP award to Covered
Employees if deemed necessary to exclude the effect of unusual charges or income
items or other events (including, without limitation, acquisitions or
divestitures), which are distortive of financial results for the Performance
Year. No adjustment will be made with respect to a Covered Employee if the
Committee determines that such adjustment will cause an award to such Covered
Employee to fail to qualify as performance-based compensation under Section
162(m).

5.02     CALCULATION AND REVIEW/APPROVAL

Based upon the Company's performance against the performance goals, and the
formulae or methods established, the APP award for each participant is
calculated. (The calculation method for the Plan is illustrated in Exhibit 1).
The Committee shall approve the APP award amounts for participants who are
members of the Board of Directors and for participants who are "Covered
Employees" and shall review the APP award amounts for other executive officers
of the Company.

5.03     AWARD ADJUSTMENTS

The Committee shall have no discretion to increase the amount of any
participant's award as so determined, but may reduce the amount of or totally
eliminate such award, if it determines, in its absolute and sole discretion,
that such a reduction or elimination is appropriate in order to reflect the
participant's performance or unanticipated factors.

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5.04     MAXIMUM AWARD PAYABLE IN PERFORMANCE YEAR

No participant's APP award for any Performance Year shall exceed $1,000,000.

ARTICLE 6.  PAYMENT OF AWARDS

APP awards shall be paid by the Company in March for performance in the previous
year, and after the Committee has certified in writing that the relevant
performance goals were achieved. The Committee has the authority, in its
discretion, to defer payment of a participant's award into the Executive
Deferred Compensation Plan until the participant retires or otherwise terminates
employment, if the Committee determines that payment of the award could result
in the participant receiving compensation in excess of the maximum amount
deductible by the Company for Federal income tax purposes.

ARTICLE 7.  SALARY ADJUSTMENTS AND BENEFITS

7.01     SALARY ADJUSTMENT UPON ENTRY INTO THE APP

The Plan is a variable compensation, or pay at risk, program whereby
participants have their base salary administered on reduced rate ranges. New
participants to the Plan are immediately administered on the reduced rate range
for their assigned salary grade. This may reduce or eliminate promotional
increases, depending upon the person's pay position in the rate range of the new
salary grade. Subsequent salary treatment will depend upon pay/performance
relationships in the reduced rate range for their assigned grade.

7.02     SALARY CONVERSION UPON WITHDRAWAL FROM THE APP

In unusual circumstances when it is necessary for an individual to be removed
from the Plan, the individual will be placed on a non-APP rate schedule and the
base salary recalculated. The recalculated base salary will be determined by
calculating the ratio of the individual's base salary prior to removal from the
Plan to the midpoint of the APP rate schedule, and applying the same ratio to
the midpoint of the non-APP rate schedule, to determine the new base salary.
Should the removal from the Plan involve a reduction in salary grade, a new rate
in the new salary grade will be selected based upon the individual's applicable
training and experience.

7.03     RELATIONSHIP TO BENEFITS AND OTHER COMPENSATION

The APP award payout is considered in calculating the basis for other
compensation and benefits. Base salary, the actual APP payout and the actual
Eastman Performance Plan payout are included in calculating retirement benefits.
Base salary, the target APP award payout and the target Eastman Performance Plan
payout are included in the basis for calculating the actual APP payout, the
actual Eastman Performance Plan payout, life insurance, long-term disability,
termination allowance, miscellaneous expense allowance, and foreign service
premium. The base salary rate is the basis for calculating short-term
disability, vacation pay, holiday pay, personal absence, and field allowance.

ARTICLE 8.        OTHER TERMS AND CONDITIONS

8.01     SHAREOWNER APPROVAL

No APP award payment shall be paid under the Plan to any "Covered Employee" for
any Performance Year after 1996 unless and until the material terms (within the
meaning of Section 162(m) of the Internal Revenue Code of

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1986) of the APP, including the performance goals on which the APP award payout
would be based, are disclosed to the Company's shareowners and are approved by
the shareowners by a majority of the votes cast.

8.02     CLAIMS

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

8.03     NO EMPLOYMENT RIGHTS

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

8.04     WITHHOLDING

The Company shall have the power and the right to deduct or withhold, or require
a Participant to remit to the Company, an amount sufficient to satisfy Federal,
state, and local taxes (including the participant's OASDI and MEDI obligation)
required by law to be withheld.

ARTICLE 9.  ADMINISTRATION

9.01     POWER AND AUTHORITY OF THE COMMITTEE

All members of the Committee shall be persons who qualify as "outside directors"
as defined under Section 162(m) of the Internal Revenue Code. The Committee
shall have full power and authority to administer and interpret the provisions
of the Plan and to adopt such rules, regulations, agreements, guidelines, and
instruments for the administration of the Plan and for conduct of its business
as the Committee deems appropriate or advisable. The Committee sets and
interprets policy, establishes annual performance goals, evaluates Company
performance against the goals, and confirms and certifies the extent to which
Company performance goals were satisfied under the Plan.

9.02     COMMITTEE'S DELEGATION OF AUTHORITY

Except with respect to matters which under Section 162(m) of the Internal
Revenue Code are required to be determined in the sole and absolute discretion
of the Committee, the Committee shall have full power to delegate to any officer
or employee of the Company the authority to administer and interpret the
procedural aspects of the Plan, subject to the Plan's terms, including adopting
and enforcing rules to decide procedural and administrative issues.

9.03     AMENDING OR TERMINATING THE PLAN

By action of the Committee, the Plan may be amended, modified, suspended, or
terminated, in whole or in part, at any time for any reason. Unless otherwise
prohibited by applicable law, any amendment required to conform the Plan to the
requirements of Section 162(m) of the Internal Revenue Code may be made by the
Committee. No amendment may be made to the class of individuals who are eligible
to participate in the Plan, the performance criteria specified in Article 4, or
the maximum Plan payout payable to any participant without shareowner approval
unless shareowner approval is not required in order for payouts paid to "Covered
Employees" to constitute qualified performance-based compensation under Section
162(m) of the Internal Revenue Code.

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ARTICLE 10.  PLAN AUDIT

The Vice President, Human Resources and Communications and Public Affairs, has
responsibility for monitoring and reporting on the administration and
effectiveness of the Plan. The Vice President's role is to provide independent,
objective appraisal and guidance to both the Committee and to the Chief
Executive Officer in the administration of the APP. Each year, the Vice
President will provide a formal review to the Committee and the CEO on the
overall effectiveness of the APP.

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EXHIBIT 1.  CALCULATION OF THE ANNUAL PERFORMANCE PLAN PAYOUT

Awards are paid based on goal achievement. In the example below, three
performance goals have been selected for the relevant Performance Year with a
weighting of 50% for goal number 1, 25% for goal number 2, and 25% for goal
number 3. Weighted performance is calculated on a scale ranging from zero (0%,
or no payout at this level of performance) to 200% (or 2 times target
performance), with target performance at 100% (or 1 times target performance
level). In this way, regardless of their target award percentage (5% to 35%),
the performance for all participants can be calculated using the same scale. In
the example, the performance for goal 1 is 125% on the scale of 0 to 200%,
resulting in a weighted performance (50% times 125%) of 62.5%. Goal 2
performance is 94% on the scale, resulting in a weighted performance of 23.5%
(25% times 94%). Goal 3 performance is 116%, resulting in weighted performance
of 29% (25% times 116%). Adding the weighted performance factors together
results in a total weighted performance of 115%.

                               PERFORMANCE LEVELS

Example:

<TABLE>
<CAPTION>
Performance Level:          A          B             C           D           E

<S>                       <C>         <C>          <C>          <C>         <C>
Performance Percent:      200%        150%         100%         50%         0%
</TABLE>

<TABLE>
<CAPTION>
             GOAL                                               WEIGHTED
GOALS      WEIGHTING      X      PERFORMANCE LEVEL    =        PERFORMANCE
-----      ---------      -      -----------------             -----------
<S>        <C>            <C>    <C>                  <C>      <C>
  #1          50%         X            125%           =          62.5%

  #2          25%         X             94%           =          23.5%

  #3          25%         X            116%           =          29.0%
                                                               -----------
                                               Total  =         115.0%
</TABLE>

In this example, assume that the participant has a year-end base salary of
$100,000 and a target award level of 10%. To calculate this participant's award,
the Target Total Annual Compensation is calculated as described below. Then the
target award for the performance year is determined. Knowing the target award
and the total weighted performance (115% from above), the APP payout can be
calculated.

Target Total Annual Compensation = Base Salary divided by [1 minus (the target
                                   award percent + Eastman Performance Plan
                                   5%)].

In this example:     $100,000      =    $117,647 = Target Total Annual
                     ----------         Compensation
                     1-(.10 +.05)

Target Payout = Target Total Annual Compensation times Target Award %

         Target Payout  = $117,647 X 10% = $11,765.

APP Payout = Target Payout times Total Weighted Performance

         APP Payout = $11,765 X 115% = $13,530

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                                                                   EXHIBIT 10.02

                            EASTMAN CHEMICAL COMPANY

                          EASTMAN UNIT PERFORMANCE PLAN

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ARTICLE 1.  PURPOSE

The Eastman Unit Performance Plan ("UPP", or the "Plan") is a variable
compensation plan for Eastman Chemical Company (the "Company") management level
individuals which is designed to deliver a portion of annual cash compensation
according to business unit performance and the attainment of individual
objectives and expectations. The UPP is intended to provide an incentive for
superior business and individual performance, and to tie the interests of
management-level individuals to the performance of the Company's businesses and,
thereby, the interests of the Company and its shareowners.

ARTICLE 2.  RELATIONSHIP TO OTHER VARIABLE COMPENSATION PLANS

Total cash compensation for all Company employees, including Plan participants,
is intended to be competitive with pay in the applicable labor market and in the
chemical industry for similar jobs when target levels of performance are
achieved. Accordingly, a portion of each employee's target pay level is placed
"at risk". Base pay is reduced to below competitive levels, and the difference
between the resulting pay level and the competitive level is made variable and
is "at risk". Depending upon performance, employees may lose the "at risk"
amount, receive some or all of the amount "at risk", or receive an amount in
excess of the pay "at risk".

The annual cash compensation of each participant in the Plan consists of a base
salary and, depending on eligibility and participation level, awards under
variable compensation plans -- the Eastman Performance Plan ("EPP"), the Annual
Performance Plan ("APP") and the UPP.

The portion of pay "at risk" under the Plan is determined for each performance
year for which performance is measured (a "Performance Year") by the
Compensation and Management Development Committee (the "Committee") of the Board
of Directors, based on the recommendation of the Chief Executive Officer
("CEO").

Amounts "at risk" under the UPP are in addition to the pay "at risk" under the
EPP and APP. UPP awards, if any, are paid in a lump sum in March of the year
following the Performance Year.

ARTICLE 3.  SUMMARY OF PLAN DESIGN

The UPP is designed so that a pool of dollars ("Bonus Pool") is generated for
each major functional organization (a "Unit") within the Company. The amount
generated for a Unit Bonus Pool will equal (1) the aggregate of the UPP pay at
risk for each eligible participant in the Unit, multiplied by (2) a percentage
(the "Unit Performance Factor") determined by performance compared to pre-set
Unit performance goals. Generally, the Unit Performance Factor can range from
0%, if Unit performance goals are not met, to 200% for specified above-goal
performance. For those Units for which quantitative performance goals can be
established ("Business Group Units"), the performance goals and correlative Unit
Performance Factors will be established as soon as practicable, either prior to
the beginning of each Performance Year or as soon as reasonably determinable at
the beginning of the Performance Year. The performance goals and correlative
Unit Performance Factors are established by the

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Committee, based upon the recommendation of the CEO, following consultation
between the CEO and the head of each such Unit. For those Units for which
quantitative performance measures are not feasible (for example, Units
consisting of staff and support services whose role is to support Business Group
Units), the Unit Performance Factor will be an average of the actual Unit
Performance Factors for the Business Group Units.

At the end of each Performance Year, the Committee will certify Unit performance
in relation to the pre-established performance goals, thereby determining the
Unit Performance Factor and Bonus Pool for each Unit. Within each Unit,
management will exercise discretion in allocating the Bonus Pool for individual
payouts. The payouts will be based on the attainment of individual objectives
and expectations established at the beginning of such Performance Year by Unit
management for each individual participant. Maximum potential for an individual
award could exceed two times that person's UPP pay at risk, based on Unit
management's assessment of individual performance. However, the sum of all
individual awards cannot exceed the Bonus Pool for the Unit.

ARTICLE 4.  ELIGIBILITY AND PARTICIPATION

4.01     GENERAL ELIGIBILITY

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

4.02     NEW PARTICIPANTS DURING THE PERFORMANCE YEAR

Individuals who are appointed to positions eligible for UPP participation during
the Performance Year become eligible for participation on the first day of the
month of the appointment. Individuals who become participants during the
Performance Year will be eligible to receive a UPP award based on the discretion
of Unit management. Each participant's UPP pay at risk will be allocated to the
Unit Bonus Pool based upon the number of months in an eligible position during
the Performance Year. For example, if an individual was promoted to an eligible
position within his or her Unit in the ninth month of the Performance Year, the
allocation of the funds to that Unit Bonus Pool with respect to that individual
would be determined by multiplying the Unit Performance Factor times four
twelfths (4/12) of such person's UPP pay at risk as if he or she had been
eligible under the UPP for the entire Performance Year.

4.03     JOB CHANGES DURING THE PERFORMANCE YEAR

Participants who change jobs during a Performance Year, which results in a
change of their Unit affiliation, will be eligible to receive a UPP award from
each such Unit, at the discretion of Unit management. UPP pay at risk amounts
for such participants will be pro-rated among the applicable Unit Bonus Pools to
reflect such job changes during the Performance Year.

4.04     TERMINATIONS

In the event an eligible participant (1) retires, (2) dies, (3) becomes disabled
under the Eastman Long-Term Disability Plan, or (4) terminates employment as a
result of, pursuant to, or in connection with layoff, special separation,
divestiture, or similar circumstances, such person's UPP pay at risk will be
allocated to his or her Unit's Bonus Pool for such Performance Year based on the
number of months served, and he or she will be eligible to receive a UPP award
for such Performance Year at the sole discretion of the Unit management.

Participants who terminate employment with the Company for reasons other than
those specified under this Section 4.04 will be credited to a Bonus Pool and
eligible to receive an award under the UPP only if they were actively employed
on the last scheduled workday of the Performance Year.

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ARTICLE 5.  PERFORMANCE YEAR AND PERFORMANCE GOALS

5.01 PERFORMANCE YEAR

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

5.02 PERFORMANCE GOALS

Each year, the CEO will recommend to the Committee, based upon consultation with
the head of each Business Group Unit, performance goals for each Business Group
Unit for a given Performance Year. Either by the first day of the Performance
Year, or such later date as is practicable, the Committee shall establish in
writing, with respect to the Performance Year, a target objective(s) with
respect to such performance goals and formulae or methods for computing the
applicable Unit Performance Factor based on the extent to which such performance
goals are attained. Unit Performance Factors can range from 0%, if Unit
performance goals are not met, to 200% for specified above-goal performance.
Performance goals for Business Group Units may be based upon any quantitative
and objectively determinable business or financial criteria, alone or in
combination, as the CEO and the applicable Unit head shall deem appropriate.
Performance goals need not be established for all Units, since the Unit
Performance Factor for each Unit other than those with established performance
goals will be an average of the actual Unit Performance Factors for the Business
Group Units.

Once established, performance goals for a particular Performance Year cannot
be changed during the Performance Year.

ARTICLE 6.  AWARD DETERMINATION

6.01     CERTIFICATION OF PERFORMANCE

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

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

6.02     CALCULATION OF BONUS POOL AND INDIVIDUAL AWARDS; REPORT TO COMMITTEE

Based upon each Business Group Unit's performance against the performance goals,
the Unit Performance Factors for each Unit are determined as provided in
Sections 5.02 and 6.01. The amount generated for each Unit Bonus Pool will equal
(1) the aggregate of the UPP pay at risk for each eligible participant in the
Unit, multiplied by (2) the Unit Performance Factor for such Unit. The
management of each Unit shall have the sole discretion to allocate the Unit
Bonus Pool among eligible participants, based on objective or subjective
assessments of the participants' achievement of pre-established goals and
expectations for the Performance Year. To the extent that the sum of individual
awards as allocated by the Unit management within a particular Unit does not
equal the Bonus Pool amount for that Unit, the Unit management shall make
adjustments to individual awards to account for the

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difference. Individual adjustments shall be at the discretion of the Unit
management, but aggregate payouts cannot exceed the total Bonus Pool for the
Unit. Final allocations of the Unit Bonus Pools shall be reported to the CEO,
who shall report the UPP results to the Committee. The Committee shall approve
the UPP award amounts for all executive officers of the Company.

ARTICLE 7.  PAYMENT OF AWARDS

UPP awards shall be paid by the Company in March for performance in the previous
Performance Year, based upon the Unit management's allocation of awards from the
Unit Bonus Pools. The Committee has the authority, in its discretion, to defer
payment of a participant's award into the Executive Deferred Compensation Plan
until the participant retires or otherwise terminates employment, if the
Committee determines that payment of the award could result in the participant
receiving compensation in excess of the maximum amount deductible by the Company
for Federal income tax purposes.

ARTICLE 8.  SALARY ADJUSTMENTS AND BENEFITS

8.01     SALARY ADJUSTMENT UPON ENTRY INTO THE UPP

The UPP is a variable compensation, or pay at risk, program whereby participants
have their base salary administered on reduced rate ranges. New participants to
the Plan are immediately administered on the reduced rate range for their
assigned salary grade. This may reduce or eliminate promotional increases,
depending upon the person's pay position in the rate range of the new salary
grade. Subsequent salary treatment will depend upon pay/performance
relationships in the reduced rate range for their assigned grade.

8.02     SALARY CONVERSION UPON WITHDRAWAL FROM THE UPP

In unusual circumstances when it is necessary for an individual to be removed
from the Plan, the individual will be placed on a non-UPP rate schedule and the
base salary recalculated. The recalculated base salary will be determined by
calculating the ratio of the individual's base salary prior to removal from the
Plan to the midpoint of the UPP rate schedule, and applying the same ratio to
the midpoint of the non-UPP rate schedule, to determine the new base salary.
Should the removal from the Plan involve a reduction in salary grade, a new rate
in the new salary grade will be selected based upon the individual's applicable
training and experience.

8.03     RELATIONSHIP TO BENEFITS AND OTHER COMPENSATION

The UPP award payout is considered in calculating the basis for other
compensation and benefits. Base salary, the actual UPP payout (if applicable),
the actual APP payout (if applicable), and the actual EPP payout (if
applicable), are included in calculating retirement benefits. Base salary, the
target UPP award payout, the target APP award payout and the target EPP payout
are included in the basis for calculating the actual UPP payout (if applicable),
the actual APP payout (if applicable), the actual EPP payout (if applicable),
life insurance, long-term disability, termination allowance, miscellaneous
expense allowance, and foreign service premium. The base salary rate is the
basis for calculating short-term disability, vacation pay, holiday pay, personal
absence and field allowance.

ARTICLE 9.  OTHER TERMS AND CONDITIONS

9.01     CLAIMS

No person shall have any legal claim to be granted an award under the Plan.
Except as may be otherwise required by law, payouts under the Plan shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, charge, garnishment, execution, or levy of any kind, either
voluntary or

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involuntary. Plan payouts shall be payable from the general assets of the
Company and no participant shall have any claim with respect to any specific
assets of the Company.

9.02     NO EMPLOYMENT RIGHTS

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

9.03     WITHHOLDING

The Company shall have the power and the right to deduct or withhold, or require
a Participant to remit to the Company, an amount sufficient to satisfy Federal,
state, and local taxes (including the participant's OASDI and MEDI obligation)
required by law to be withheld.

ARTICLE 10.  ADMINISTRATION

10.01    POWER AND AUTHORITY OF THE COMMITTEE

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

10.02    COMMITTEE'S DELEGATION OF AUTHORITY

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

10.03    AMENDING OR TERMINATING THE PLAN

By action of the Committee, the Plan may be amended, modified, suspended, or
terminated, in whole or in part, at any time for any reason.

ARTICLE 11.  PLAN AUDIT

The Vice President, Human Resources, has responsibility for monitoring and
reporting on the administration and effectiveness of the Plan. The Vice
President's role is to provide independent, objective appraisal and guidance to
both the Committee and the CEO in the administration of the UPP. Each year, the
Vice President will provide a formal review to the Committee and the CEO on the
overall effectiveness of the UPP.

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