Document:

ex10_08.htm

    
      

      
        
        

      

       

    

     

    
       AWARD
        NOTICE

      

      NOTICE
        OF NONQUALIFIED STOCK
        OPTION

      GRANTED
        PURSUANT TO THE

      EASTMAN
        CHEMICAL COMPANY

      2007
        OMNIBUS LONG-TERM COMPENSATION PLAN

      

      

      Grantee:

      

      Number
        of Shares:

      

      Option
        Price:  $____

      

      Date
        of Grant:  October
        30, 2007

      

      1.           Grant
        of Option.  This Award Notice serves to notify you that the
        Compensation and Management Development Committee (the “Committee”) of the Board
        of Directors of Eastman Chemical Company ("Company") has granted to you,
        under
        the Company’s 2007 Omnibus Long-Term Compensation Plan (the "Plan"), a
        nonqualified stock option ("Option") to purchase, on the terms and conditions
        set forth in this Award Notice and the Plan, up to the number of shares of
        its
        $.01 par value Common Stock ("Common Stock") set forth above, at a price
        equal
        to $____ per share. The Plan is incorporated herein by reference and made
        a part
        of this Award Notice.  Capitalized terms not defined herein have the
        respective meanings set forth in the Plan.  The principal terms of the
        Plan, and of the offer by the Company of the shares of Common Stock covered
        by
        the Option, are described in the Prospectus for the Plan, which Prospectus
        will
        be delivered to you by the Company.

      

      2.           Period
        of Option and Limitations on Right to Exercise.  Subject to
        earlier cancellation of all or a portion of the Option as described in Sections
        6 and 7 of this Award Notice, the Option will expire at 4:00 p.m., Eastern
        Standard Time, on October 29, 2017 ("Expiration Date").

      

      3.           Exercise
        of Option.

      

      (a)           Subject
        to the terms set forth in this Award Notice, the Option will become exercisable
        as to one-third of the shares covered hereby on October 30, 2008, and one-third
        of the shares covered hereby on October 30, 2009, and as to the remaining
        shares
        on October 30, 2010.

      

      (b)           Upon
        your death, your personal representative may exercise the Option, subject
        to the
        terms set forth in Section 6 of this Award Notice.

      

      (c)           The
        Option may be exercised in whole or in part.  The exercise generally
        must be accompanied by, or make provision for, full payment in cash; by check;
        by a broker-assisted cashless method; or by surrendering unrestricted shares
        of
        Common Stock having a value on the date of exercise equal to the exercise
        price,
        or in any combination of the foregoing; however, if you wish to pay with
        shares
        of Common Stock already held by you, you may submit an Affidavit of Ownership
        form attesting to the ownership of the shares instead of sending in actual
        share
        certificates.

      

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

      

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

      

      6.         Termination.  Upon
        termination of your employment with the Company and its Subsidiaries
        ("termination") by reason of death, disability, or retirement, the Option
        will
        remain exercisable for the lesser of: 1) five (5) years following your date
        of
        termination, or, 2) the Expiration Date.  Upon termination due to
        resignation, the Option will remain exercisable for the lesser of: 1) ninety
        (90) days following your date of termination, or, 2) the Expiration Date.
        Upon
        termination for cause, any portion of the Option not previously exercised
        by you
        will be canceled and forfeited by you, without payment of any consideration
        by
        the Company.  Upon termination for a reason other than those described
        in this Section (e.g., reduction in force, divestiture, special separation,
        termination by mutual consent), the Option will remain exercisable until
        the
        Expiration Date, unless the Committee (for executive officers) or the executive
        officer responsible for Human Resources (for non-executive
        employees)  determines that any portion of the Option will not remain
        exercisable, or that the Option will be exercisable for a period less than
        until
        the Expiration Date.

      

      7.           Noncompetition;
        Confidentiality.  You will not, without the written consent of the
        Company, either during your employment by the Company 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 the Company, except
        as
        such disclosure or use may be required in connection with your work as an
        employee of the Company.  During your employment by the Company, 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 the Company.  The agreement in
        this Section 7 applies 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 the Company.  You will forfeit all rights under this
        Award Notice to or related to the Option 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 7, and
        in
        that event any payment or other action with respect to the Option shall be
        made
        or taken, if at all, in the sole discretion of the Committee or the executive
        officer responsible for Human Resources.   

      

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

      

      9.           Change
        in Ownership; Change in Control.  Article 14 of the Plan contain
        certain special provisions that will apply to the Option in the event of
        a
        Change in Ownership or Change in Control, respectively.

      

      10.           Adjustment
        of Option 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 or in anticipation of any other corporate event or transaction
        involving the Company (including, without limitation, any merger, combination,
        or exchange of shares).

      

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

    
      
        
        

      

      
        
        

        
          

      

      
        
        

      

    

     AWARD
      NOTICE

    

    NOTICE
      OF NONQUALIFIED STOCK OPTION

    GRANTED
      PURSUANT TO THE

    EASTMAN
      CHEMICAL COMPANY

    2007
      OMNIBUS LONG-TERM COMPENSATION PLAN

    

    

    Grantee:  Mark
      J.
      Costa

    

    Number
      of Shares:

    

    Option
      Price:  $____

    

    Date
      of Grant:  October
      30, 2007

    

    1.           Grant
      of Option.  This Award Notice serves to notify you that the
      Compensation and Management Development Committee (the “Committee”) of the Board
      of Directors of Eastman Chemical Company ("Company") has granted to you, under
      the Company’s 2007 Omnibus Long-Term Compensation Plan (the "Plan"), a
      nonqualified stock option ("Option") to purchase, on the terms and conditions
      set forth in this Award Notice and the Plan, up to the number of shares of
      its
      $.01 par value Common Stock ("Common Stock") set forth above, at a price equal
      to $____ per share. The Plan is incorporated herein by reference and made a
      part
      of this Award Notice.  Capitalized terms not defined herein have the
      respective meanings set forth in the Plan.  The principal terms of the
      Plan, and of the offer by the Company of the shares of Common Stock covered
      by
      the Option, are described in the Prospectus for the Plan, which Prospectus
      will
      be delivered to you by the Company.

    

    2.           Period
      of Option and Limitations on Right to Exercise.  Subject to
      earlier cancellation of all or a portion of the Option as described in Sections
      6 and 7 of this Award Notice, the Option will expire at 4:00 p.m., Eastern
      Standard Time, on October 29, 2017 ("Expiration Date").

    

    3.           Exercise
      of Option.

    

    (a)           Subject
      to the terms set forth in this Award Notice, the Option will become exercisable
      as to one-third of the shares covered hereby on October 30, 2008, and one-third
      of the shares covered hereby on October 30, 2009, and as to the remaining shares
      on October 30, 2010.

    

    (b)           Upon
      your death, your personal representative may exercise the Option, subject to
      the
      terms set forth in Section 6 of this Award Notice.

    

    (c)           The
      Option may be exercised in whole or in part.  The exercise generally
      must be accompanied by, or make provision for, full payment in cash; by check;
      by a broker-assisted cashless method; or by surrendering unrestricted shares
      of
      Common Stock having a value on the date of exercise equal to the exercise price,
      or in any combination of the foregoing; however, if you wish to pay with shares
      of Common Stock already held by you, you may submit an Affidavit of Ownership
      form attesting to the ownership of the shares instead of sending in actual
      share
      certificates.

     

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

    

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

    

    6.         Termination.  Upon
      termination of your employment with the Company and its Subsidiaries
      ("termination") by reason of death, disability, or retirement, the Option will
      remain exercisable for the lesser of: 1) five (5) years following your date
      of
      termination, or, 2) the Expiration Date. Upon termination of your
      employment with the Company and its Subsidiaries without "Cause" or for
      "Good Reason" (as such terms are defined in your Employment Agreement dated
      May 4, 2006), the Option shall immediately vest and remain exercisable for
      the lesser of: 1) five (5) years following your date of termination, or, 2)
      the
      Expiration Date.  Upon termination due to voluntary resignation, the
      Option will remain exercisable for the lesser of: 1) ninety (90) days following
      your date of termination, or, 2) the Expiration Date. Upon termination for
      Cause, any portion of the Option not previously exercised by you will be
      canceled and forfeited by you, without payment of any consideration by the
      Company.  Upon termination for a reason other than those described in
      this Section, the Committee will determine if all or any portion of the Option
      will remain exercisable and if so, the period of time the Option may be
      exercised, up to, but not to exceed the Expiration Date.

    

    7.           Noncompetition;
      Confidentiality.  You will not, without the written consent of the
      Company, either during your employment by the Company 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 the Company, except
      as
      such disclosure or use may be required in connection with your work as an
      employee of the Company.  During your employment by the Company, 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 the Company.  The agreement in
      this Section 7 applies 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 the Company.  You will forfeit all rights under this
      Award Notice to or related to the Option 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 7, and
      in
      that event any payment or other action with respect to the Option shall be
      made
      or taken, if at all, in the sole discretion of the Committee or the executive
      officer responsible for Human Resources.   

    

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

    

    9.           Change
      in Ownership; Change in Control.  Article 14 of the Plan contain
      certain special provisions that will apply to the Option in the event of a
      Change in Ownership or Change in Control, respectively.

    

    10.           Adjustment
      of Option 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 or in anticipation of any other corporate event or transaction
      involving the Company (including, without limitation, any merger, combination,
      or exchange of shares).

    

    11.           Plan
      Controls.  In the event of any conflict between the provisions of
      the Plan and the provisions of this Award Notice, the provisions of the Plan
      will be controlling and determinative.ex10_09.htm

    
       

      

      
        
        

      

    

    

      EASTMAN
        CHEMICAL COMPANY

      PERFORMANCE
        SHARE AWARD SUBPLAN

      OF
        THE 2007 OMNIBUS LONG-TERM COMPENSATION PLAN

      2008-2010
        PERFORMANCE PERIOD

      

      

      

      Section
        1.  Background.  Under Article 4 of the Eastman Chemical
        Company 2007 Omnibus Long-Term Compensation Plan (the "Plan"), the "Committee"
        (as defined in the Plan), may, among other things, award shares of the $.01
        par
        value common stock ("Common Stock") of Eastman Chemical Company (the "Company")
        to "Participants" (as defined in the Plan), and such awards may take the
        form of
        Performance Awards which are contingent upon the attainment of certain
        performance objectives during a specified period, and subject to such other
        terms, conditions, and restrictions as the Committee deems
        appropriate.  The purpose of this Performance Share
        Award  Subplan (this "Subplan") is to set forth the terms of the award
        of performance shares for the 2008-2010 Performance Period specified herein,
        effective as of January 1, 2008 (the "Effective Date").

      

      Section
        2.  Definitions.

      

      
        	
                (a)

              	
                The
                  following definitions shall apply to this
                  Subplan:

              

      

      

      
        	
                (i)  

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

              

      

      

      
        	
                (ii)  

              	
                “Award
                  Amount” means the performance shares awarded 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 comprising the “Materials Sector” from
                  Standard and Poor’s Super Composite 1500 Index, identified as Global
                  Industry Classification Standard (“GICS”)
                  15.

              

      

      

      
        	
                 

              	
                (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.

              

      

      

      
        	
                 

              	
                (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.—confirm that this is still the correct
                  definition]

              

      

      

      
        	
                (vii)  

              	
                "Maximum
                  Deductible Amount" means the maximum amount deductible by the Company
                  under Section 162(a), taking into consideration the limitations
                  under

              

      

      

      
        	
                (viii)  

              	
                Section
                  162(m), of the Internal Revenue Code of 1986, as amended, or any
                  similar
                  or successor provisions thereto.

              

      

      

      (viii)                           “Participation
        Date” means October 30, 2007.

      

      (ix)            “Performance
        Period" means January 1, 2008 through December 31, 2010.

      

      
        	
                 

              	
                (x)

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

              

      

      

      
        	
                 

              	
                (xi)

              	
                “Return
                  on 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.  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%).

              

      

      

      
        	
                 

              	
                (xii)

              	
                "Target
                  Award Range" means, with respect to any eligible Participant, the
                  number
                  of performance shares within the range specified on Exhibit A hereto
                  for
                  the Salary Grade applicable to such
                  Participant.

              

      

      

      
        	
                (xiii)

              	
                “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.

      

      Section
        4.  Eligibility.  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.

      

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

      

      Section
        6.  Size of Awards.

      

      
        	
                (a)

              	
                Target
                  Award Range.  Exhibit A hereto shows by Salary Grade the
                  Target Award Range. The Salary Grade to be used in determining
                  the size of
                  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 based on an assessment by his or her senior
                  management
                  (and, in the case of executive officers, by the Committee) of 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 to the nearest 10 performance
                  shares.  Each member of senior management will have a
                  performance share budget, based on the cumulative award targets
                  for their
                  reports, which must be balanced for their
                  organizations.

              

      

      

      

      
        	
                (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 Capital minus a
                  Return on Capital target. The Return on Capital target will be
                  determined by the Committee. 

              

      

      

      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 Capital relative to a target during the Performance Period.
        [The award multipliers range from 3.0 (i.e. 300%), if the Company's TSR is
        in
        the top performing quintile (top 20%) of companies in the Comparison Group,
        and
        the average Return on Capital minus the target Return on Capital is greater
        than
        10 percentage points, to 0.0 (with no shares of Common Stock being delivered
        to
        participants under this Subplan), if the Company does not meet certain levels
        of
        performance relative to the two measures.

      

      Section
        7.  Composition of Comparison Group.   The
        Comparison Group is composed of companies relevant for purposes of TSR
        comparisons under this Subplan.  However, 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 Award.

      

      
        	
                (a)

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

              

      

      

      
        	
                (b)

              	
                Death,
                  Disability, Retirement, or Termination for an Approved Reason Before
                  the
                  Award Payment Date.  If a participant's employment with the
                  Company or a Subsidiary is terminated due to death, disability,
                  retirement, or any approved reason 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)  (including reduction in force, divestiture, special
                  separation, termination by mutual consent) prior to the Award Payment
                  Date, the participant shall receive, subject to the terms and conditions
                  of the Plan and this Subplan, an Award representing a prorated
                  portion of
                  the Actual Grant Amount to
                  which

              

      

      
        	
                 

              	
                such
                  participant otherwise would be entitled, with the precise amount
                  of such
                  Award to be determined by multiplying the Actual Grant Amount by
                  a
                  fraction, the numerator of which is the number of full calendar
                  months
                  employed in the Performance Period from the Effective Date through
                  and
                  including the effective date of such termination, and the denominator
                  of
                  which is 36 (the total number of months in the Performance
                  Period).

              

      

      

      Section
        9.  Manner and Timing of Award Payments.

      

      
        	
                (a)

              	
                Timing
                  of Award Payment.  Except for deferrals under Section 9(c)
                  if any Awards are payable under this Subplan, the payment of such
                  Awards
                  to eligible Employees shall be made as soon as is administratively
                  practicable after the end of the Performance Period and final approval
                  by
                  the Committee.

              

      

      

      
        	
                (b)

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

              

      

      

      
        	
                (c)

              	
                Deferral
                  of Award in Excess of the Maximum Deductible Amount.  If
                  payment of the Award would, or could in the reasonable estimation
                  of the
                  Committee, result in the participant's receiving compensation in
                  excess of
                  the Maximum Deductible Amount in a given year, then such portion
                  (or all,
                  as applicable) of the Award as would, or could in the reasonable
                  estimation of the Committee, cause such participant to receive
                  compensation from the Company in excess of the Maximum Deductible
                  Amount
                  may, at the sole discretion of the Committee, be converted into
                  the right
                  to receive a cash payment, which shall be deferred until after
                  the
                  participant retires or otherwise terminates employment with the
                  Company
                  and its Subsidiaries, provided that such deferral is compliant
                  with the
                  requirements of Internal Revenue Code Section 409A and Treasury
                  Regulations and guidance
                  thereunder.

              

      

      

      

      
        	
                (d)

              	
                Award
                  Deferral to the EDCP.  In the event that all or any portion
                  of an Award is converted into a right to receive a cash payment
                  pursuant
                  to Section 9(c) except as otherwise provided in this Section with
                  respect
                  to Participants who are subject to Section 16(a) of the 1934
                  Act  an amount representing the Fair Market Value, as of the
                  date the shares of Common Stock covered by the Award otherwise
                  would be
                  issued to the participant, of the Actual Grant Amount (or the deferred
                  portion thereof) will be credited to the Stock Account of the EDCP,
                  and
                  hypothetically invested in units of Common
                  Stock.   Notwithstanding the foregoing, for each
                  Participant who is subject to Section 16(a) of the 1934 Act. the
                  deferrable amount, when initially credited to the participant's
                  EDCP
                  Account, shall be held in a participant's Interest Account until
                  the next
                  date that dividends are paid on Common Stock, and on such date
                  the
                  deferrable amount that would have been initially credited to the
                  participant's Stock Account but for this sentence shall be transferred,
                  together with allocable interest thereon, to the participant's
                  Stock
                  Account, subject to provisions
                  set

              

      

      
        	
                 

              	
                forth
                  in the EDCP. Thereafter, such amount shall be treated in the same
                  manner
                  as other investments in the EDCP and shall be subject to the terms
                  and
                  conditions thereof.

              

      

      

      Section
        10.  No Rights as 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;
        provided, however, that if payment of all or any portion of an Award under
        this
        Subplan has been deferred pursuant to Section 9 of this Subplan or
        otherwise, but such Award otherwise has become payable hereunder, then during
        the period during which payment is deferred, the deferred Award shall be
        credited with additional units of Common Stock, and (if applicable) fractions
        thereof, based on any dividends declared on the Common Stock, in accordance
        with
        the terms of the EDCP.

      

      Section
        11.  Application of Plan.  The provisions of the Plan
        shall apply to this Subplan, except to the extent that any such provisions
        are
        inconsistent with specific provisions of this Subplan.

      

      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.

      

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

       

      
         

         

         

      

      EXHIBIT
        A

      

      Eastman
        Chemical Company

      Performance
        Share Award Grant Table

      2008-2010
        Cycle

      

      

      

      

      ON
        FILE
        IN GLOBAL COMPENSATIION

      

      EXHIBIT
        B

      

      Award
        Multiplier Table

      

      
        	 	
                Differential
                  from Target Return on Capital

              
	
                Eastman
                  TSR Relative to Comparison Companies

              	
                <-7%

              	
                -7%
                  to

                 -5%

              	
                -4.99
                  to

                  -3%

              	
                -2.99
                  to

                  -1%

              	
                -0.99
                  to 0%

              	
                .01
                  to +1%

              	
                +1.01
                  to +3%

              	
                +3.01
                  to +5%

              	
                +5.01
                  to +7%

              	
                +7.01
                  to +10%

              	
                >10%

              
	
                5th
                  quintile

              	
                0

              	
                0

              	
                0

              	
                0

              	
                .4

              	
                .5

              	
                .6

              	
                .7

              	
                .8

              	
                1.1

              	
                1.5

              
	
                4th
                  quintile

              	
                0

              	
                0

              	
                0

              	
                .4

              	
                .5

              	
                .7

              	
                .8

              	
                .9

              	
                1.1

              	
                1.5

              	
                2

              
	
                3rd
                  quintile

              	
                0

              	
                0

              	
                .4

              	
                .5

              	
                .8

              	
                1

              	
                1.2

              	
                1.5

              	
                1.8

              	
                2.1

              	
                2.4

              
	
                2nd
                  quintile

              	
                0

              	
                .4

              	
                .6

              	
                .8

              	
                1

              	
                1.3

              	
                1.6

              	
                1.9

              	
                2.2

              	
                2.5

              	
                2.8

              
	
                1st
                  quintile

              	
                0

              	
                .6

              	
                .8

              	
                1

              	
                1.3

              	
                1.6

              	
                1.9

              	
                2.2

              	
                2.5

              	
                2.8

              	
                3

              

      

      
        
          
          

        

        
          
          

          
            

        

        
          
          

        

      

      AWARD
        NOTICE

       

      

      NOTICE
        OF PERFORMANCE SHARES

      GRANTED
        PURSUANT TO THE

      EASTMAN
        CHEMICAL COMPANY

      2007
        OMNIBUS LONG-TERM COMPENSATION PLAN

      

      Recipient:

      

      Performance
        Period: 2008 –
2010

      

      Target
        Award:

      

      1.         Award
        of Performance Shares.  This Award Notice serves to notify you
        that the Compensation and Management Development Committee of the Board of
        Directors (the “Committee”) of Eastman Chemical Company ("Company") has awarded
        to you, under the 2008-2010 Performance Share Award Subplan ("Subplan") of
        the
        2007 Omnibus Long-Term Compensation Plan ("Plan"), on the terms and conditions
        set forth in the Subplan and the Plan, the number of performance shares (the
        "Performance Shares") of its $.01 par value Common Stock ("Common Stock")
        specified above.  The Performance Shares are rights to receive Awards
        in the form of shares of Common Stock, subject to the attainment of specified
        performance conditions by the Company.  Subject to satisfaction of the
        minimum performance conditions and the other terms of the Subplan, Awards
        under
        the Subplan will ultimately be paid in the form of unrestricted shares of
        Common
        Stock.

      

      This
        Award Notice provides a summary of
        the terms and conditions of your performance shares, all of which terms and
        conditions are contained in the Subplan and the Plan.  Capitalized
        terms not defined herein have the respective meanings set forth in the Subplan
        and/or the Plan, as applicable.

      

      2.         Performance
        Conditions.  The performance conditions for the Subplan involve:
        1)  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 period from January 1, 2008
        through December 31, 2010 (the "Performance Period"), to the TSRs of the
        companies in the Comparison Group (the group of companies comprising Standard
        and Poor’s “Materials Sector”, identified as Global Industry Classification
        Standard (“GICS”) 15, from Standard and Poor’s Super Composite 1500 Index); and
        2) 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.   The specific terms of the performance
        conditions are summarized in Section 3 of this Award Notice and are detailed
        in
        Section 6 of the Subplan.

      

      3.         Number
        of Performance Shares Awarded.  The number of Performance Shares
        that you have been awarded is shown above (the "Target
        Award").  However, the actual number of shares of Common Stock to
        which you will be entitled under the Subplan (the "Actual Grant Amount")
        may be
        more or less than the Target Award, depending upon the quintile ranking of
        the
        Company's TSR when ranked among the TSRs of the Comparison Group, and the
        Company’s average Return on Capital relative to a Return on Capital target for
        each of the Performance Years during the Performance Period.  The
        Company’s performance relative to these measures shall determine a multiplier to
        be applied to the Target Grant Amount.  Multipliers range from 3.0
        (i.e. 300%), if the Company’s TSR is ranked in the top performing quintile (top
        20%) of companies in the Comparison Group, and the average Return on Capital
        minus the target Return on Capital is greater than 10 percentage points,
        to 0.0
        (with no shares of Common Stock being delivered to participants under this
        Subplan), if the Company does not meet certain levels of performance relative
        to
        the two measures.  The award multiplier table is shown in Exhibit
        A.  Subject to the Committee’s authority to adjust the Actual Grant
        Amount described in Section 12 of this Award Notice, your Actual Grant Amount
        is
        determined by applying the multiplier corresponding to the Company’s performance
        (Exhibit A) to your Target Award.

       

      4.         Payment
        of Award.  If you are entitled to payment of an Award under the
        Subplan, such payment will be made 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 Award 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, then such portion (or all, as applicable) of
        the
        Award 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 will be deferred
        until
        after you terminate employment with the Company and its Subsidiaries, provided
        that such deferral is compliant with the requirements of Internal Revenue
        Code
        Section 409A and Treasury Regulations and guidance thereunder, as specified
        in
        Section 9 of the Subplan.

      

      If
        any portion of an Award 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
        Grant
        Amount will be credited to the Stock Account of 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.

      

      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.

      

      5.         Nontransferability.  Unless
        and until unrestricted shares of Common Stock are delivered or, if applicable,
        cash is distributed under the EDCP to you in payment of an earned Award of
        the
        Performance 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.

      

      6.         Limitation
        of Rights.  You generally will not have any rights as a
        stockholder with respect to the Performance Shares unless and until certificates
        for shares of Common Stock have been issued to you.  No such
        certificates will be issued under the Subplan until the Actual Grant Amount
        has
        been determined and you have otherwise become entitled to payment of an Award
        under the terms of the Plan and the Subplan.  However, if payment of
        all or any portion of the Award is deferred, but the Award has otherwise
        become
        payable, then the deferred Award will be credited with additional shares
        of
        Common Stock based on any dividends declared on the Common Stock, in accordance
        with the terms of the EDCP.  Neither the Plan, the Subplan, the
        granting of these Performance Shares nor this Award Notice gives you any
        right
        to remain employed by the Company and its Subsidiaries.

      

      7.         Termination.  Upon
        termination of your employment with the Company and its Subsidiaries by reason
        of death, disability or retirement, or for another approved reason (e.g.,
        reduction in force, divestiture, special separation, termination by mutual
        consent), as determined by the Committee (in the case of executive officers)
        or
        the executive officer responsible for Human Resources (in the case of
        non-executive employees), you will receive, subject to the terms and conditions
        of the Plan and the Subplan, an Award representing a prorated portion of
        the
        Actual Grant Amount to which you otherwise would be entitled, based on the
        number of full calendar months from January 1, 2007 through the effective
        date
        of such termination.  Upon termination of your employment with the
        Company and its Subsidiaries for a reason other than death, disability,
        retirement or another approved reason prior to the date the shares of Common
        Stock covered by the Award are delivered to you, you will not be eligible
        or
        entitled to receive any Award under the Subplan.

      

      8.         Noncompetition;
        Confidentiality.  You will forfeit all rights with respect to the
        Performance Shares if you violate the noncompetition and confidentiality
        provisions contained in Section 20 of the Plan.

      

      9.         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 Award, 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.

      

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

      

      11.         Adjustment
        of Terms.  The adjustment provisions 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).

      

      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.

      

      13.         Plan
        and Subplan Control.  In the event of any conflict between the
        provisions of the Plan or the Subplan and the provisions of this Award Notice,
        the provisions of the Plan or the Subplan, as applicable, will be controlling
        and determinative.

    
      
        
        

      

      
        
        

        
          

      

      
        
        

      

    

    AWARD
      NOTICE

     

    

    NOTICE
      OF PERFORMANCE SHARES

    GRANTED
      PURSUANT TO THE

    EASTMAN
      CHEMICAL COMPANY

    2007
      OMNIBUS LONG-TERM COMPENSATION PLAN

    

    Recipient:   Mark
      J.
      Costa

    

    Performance
      Period: 2008 –
2010

    

    Target
      Award:

    

    1.         Award
      of Performance Shares.  This Award Notice serves to notify you
      that the Compensation and Management Development Committee of the Board of
      Directors (the “Committee”) of Eastman Chemical Company ("Company") has awarded
      to you, under the 2008-2010 Performance Share Award Subplan ("Subplan") of
      the
      2007 Omnibus Long-Term Compensation Plan ("Plan"), on the terms and conditions
      set forth in the Subplan and the Plan, the number of performance shares (the
      "Performance Shares") of its $.01 par value Common Stock ("Common Stock")
      specified above.  The Performance Shares are rights to receive Awards
      in the form of shares of Common Stock, subject to the attainment of specified
      performance conditions by the Company.  Subject to satisfaction of the
      minimum performance conditions and the other terms of the Subplan, Awards under
      the Subplan will ultimately be paid in the form of unrestricted shares of Common
      Stock.

    

    This
      Award Notice provides a summary of
      the terms and conditions of your performance shares, all of which terms and
      conditions are contained in the Subplan and the Plan.  Capitalized
      terms not defined herein have the respective meanings set forth in the Subplan
      and/or the Plan, as applicable.

    

    2.         Performance
      Conditions.  The performance conditions for the Subplan involve:
      1)  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 period from January 1, 2008
      through December 31, 2010 (the "Performance Period"), to the TSRs of the
      companies in the Comparison Group (the group of companies comprising Standard
      and Poor’s “Materials Sector”, identified as Global Industry Classification
      Standard (“GICS”) 15, from Standard and Poor’s Super Composite 1500 Index); and
      2) 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.   The specific terms of the performance
      conditions are summarized in Section 3 of this Award Notice and are detailed
      in
      Section 6 of the Subplan.

    

    3.         Number
      of Performance Shares Awarded.  The number of Performance Shares
      that you have been awarded is shown above (the "Target
      Award").  However, the actual number of shares of Common Stock to
      which you will be entitled under the Subplan (the "Actual Grant Amount") may
      be
      more or less than the Target Award, depending upon the quintile ranking of
      the
      Company's TSR when ranked among the TSRs of the Comparison Group, and the
      Company’s average Return on Capital relative to a Return on Capital target for
      each of the Performance Years during the Performance Period.  The
      Company’s performance relative to these measures shall determine a multiplier to
      be applied to the Target Grant Amount.  Multipliers range from 3.0
      (i.e. 300%), if the Company’s TSR is ranked in the top performing quintile (top
      20%) of companies in the Comparison Group, and the average Return on Capital
      minus the target Return on Capital is greater than 10 percentage points, to
      0.0
      (with no shares of Common Stock being delivered to participants under this
      Subplan), if the Company does not meet certain levels of performance relative
      to
      the two measures.  The award multiplier table is shown in Exhibit
      A.  Subject to the Committee’s authority to adjust the Actual Grant
      Amount described in Section 12 of this Award Notice, your Actual Grant Amount
      is
      determined by applying the multiplier corresponding to the Company’s performance
      (Exhibit A) to your Target Award.

    

    4.         Payment
      of Award.  If you are entitled to payment of an Award under the
      Subplan, such payment will be made 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 Award 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, then such portion (or all, as applicable) of
      the
      Award 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 will be deferred
      until
      after you terminate employment with the Company and its Subsidiaries, provided
      that such deferral is compliant with the requirements of Internal Revenue Code
      Section 409A and Treasury Regulations and guidance thereunder, as specified
      in
      Section 9 of the Subplan.

    

    If
      any portion of an Award 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 Grant
      Amount will be credited to the Stock Account of 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.

    

    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.

    

    5.         Nontransferability.  Unless
      and until unrestricted shares of Common Stock are delivered or, if applicable,
      cash is distributed under the EDCP to you in payment of an earned Award of
      the
      Performance 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.

    

    6.         Limitation
      of Rights.  You generally will not have any rights as a
      stockholder with respect to the Performance Shares unless and until certificates
      for shares of Common Stock have been issued to you.  No such
      certificates will be issued under the Subplan until the Actual Grant Amount
      has
      been determined and you have otherwise become entitled to payment of an Award
      under the terms of the Plan and the Subplan.  However, if payment of
      all or any portion of the Award is deferred, but the Award has otherwise become
      payable, then the deferred Award will be credited with additional shares of
      Common Stock based on any dividends declared on the Common Stock, in accordance
      with the terms of the EDCP.  Neither the Plan, the Subplan, the
      granting of these Performance Shares nor this Award Notice gives you any right
      to remain employed by the Company and its Subsidiaries.

    

    7.         Termination.  Upon
      termination of your employment with the Company and its Subsidiaries
      ("termination")  by reason of death, disability or retirement, or for
      another approved reason as determine by the Committee, you will receive, subject
      to the terms and conditions of the Plan and the Subplan, an Award representing
      a
      prorated portion of the Actual Grant Amount to which you otherwise would be
      entitled, based on the number of full calendar months employed from January
      1,
      2007 through the effective date of such termination.  Upon termination
      without "Cause" or for "Good Reason" (as such terms are defined in your
      Employment Agreement dated May 4, 2006) Eastman will issue to you, within 30
      days of your termination (or such other date as may be required under Internal
      Revenue Code Section 409A), shares of Common Stock underlying outstanding
      performance shares (as if all performance objectives with respect thereto had
      been met at a level of 100%) on a pro rata basis based upon the number of full
      calendar months employed during the performance period.  Upon
      termination for a reason other than death, disability, retirement or another
      reason described above prior to the date the shares of Common Stock covered
      by
      the Award are delivered to you, you will not be eligible or entitled to receive
      any Award under the Subplan.

    

    

    8.         Noncompetition;
      Confidentiality.  You will forfeit all rights with respect to the
      Performance Shares if you violate the noncompetition and confidentiality
      provisions contained in Section 20 of the Plan.

    

    9.         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 Award, 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.

    

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

    

    11.         Adjustment
      of Terms.  The adjustment provisions 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).

    

    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.

    

    13.         Plan
      and Subplan Control.  In the event of any conflict between the
      provisions of the Plan or the Subplan and the provisions of this Award Notice,
      the provisions of the Plan or the Subplan, as applicable, will be controlling
      and determinative.

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