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                                                                   EXHIBIT 10.4

                            UNITED STATES OF AMERICA
                                   BEFORE THE
                          OFFICE OF THRIFT SUPERVISION

------------------------------------
                                    )
In the Matter of                    )       Order No.: CN 09-35
                                    )
                                    )
PVF CAPITAL CORP.                   )       Effective Date:  October 19, 2009
                                    )
Solon, Ohio                         )
OTS Docket No. H1810                )
                                    )
------------------------------------

                            ORDER TO CEASE AND DESIST
                            -------------------------

         WHEREAS, PVF Capital Corp., Solon, Ohio, OTS Docket No. H1810 (Holding
Company), by and through its Board of Directors (Board), has executed a
Stipulation and Consent to Issuance of an Order to Cease and Desist
(Stipulation); and

         WHEREAS, the Holding Company, by executing the Stipulation, has
consented and agreed to the issuance of this Order to Cease and Desist (Order)
by the Office of Thrift Supervision (OTS) pursuant to 12 U.S.C. ss. 1818(b); and

         WHEREAS, pursuant to delegated authority, the OTS Regional Director for
the Central Region (Regional Director) is authorized to issue Orders to Cease
and Desist where a savings and loan holding company has consented to the
issuance of an order.

         NOW, THEREFORE, IT IS ORDERED THAT:

CEASE AND DESIST.
----------------

1.      The Holding Company and its directors, officers, employees, and agents
shall cease and desist from any action (alone or with another or others) for or

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toward causing, bringing about, participating in, counseling or the aiding and
abetting in the unsafe or unsound practices that resulted in operating the
Holding Company with an inadequate level of capital protection for the volume,
type, and quality of assets held by the consolidated Holding Company.

CAPITAL PLAN.
------------
2.      (a)     By October 31, 2009, the Board shall adopt and submit to
        the Regional Director, for review and comment, a detailed
        written plan for enhancing the consolidated capital and earnings of the
        Holding Company (Capital Plan). The Capital Plan shall cover the period
        beginning with the quarter ending September 30, 2009 through the quarter
        ending December 31, 2011. At a minimum, the Capital Plan shall include:

                (i)     establishment of a minimum tangible capital ratio of
                        tangible equity capital to total tangible assets
                        commensurate with the Holding Company's consolidated
                        risk profile;

                (ii)    specific plans to reduce the risks to the Holding
                        Company from its current debt levels and debt servicing
                        requirements;

                (iii)   operating strategies to achieve net income levels that
                        will result in profitability and adequate debt service
                        throughout the term of the Capital Plan;

                (iv)    quarterly cash flow projections for the Holding Company
                        on a stand alone basis through calendar year-end
                        December 31, 2011 that identify both the sources of
                        funds and the expected uses of funds ithout reliance on
                        dividends from the Holding Company's wholly-owned
                        savings association;

                (v)     detailed quarterly pro forma consolidated and
                        unconsolidated Holding Company balance sheets and income
                        statements for the period beginning with the quarter
                        ending September 30, 2009 through the quarter ending
                        December 31, 2011 that reflect maintenance throughout
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                        the period of the Board established minimum tangible
                        equity capital ratio;

                (vi)    detailed scenarios to stress-test the consolidated
                        minimum capital targets  based on continuing operating
                        results, economic conditions and risk profile of
                        consolidated assets; and

                (vii)   detailed descriptions of all relevant assumptions and
                        projections and the supporting documentation for all
                        relevant assumptions and projections.

        (b)     Within thirty (30) days after receiving written comments, if
        any, from the Regional Director, the Board shall revise and adopt the
        Capital Plan based upon such comments. Immediately thereafter, the
        Holding Company shall implement and comply with the Capital Plan. Within
        five (5) days of Board approval of the Capital Plan, the Holding Company
        shall send a copy of the Capital Plan to the Regional Director.

        (c)     Once the Capital Plan is implemented, the Holding Company shall
        operate within the parameters of its Capital Plan. Any proposed material
        deviations from or changes to the Capital Plan shall be submitted for
        the prior, written non-objection of the Regional Director. Requests for
        any material deviations or changes must be submitted at least thirty
        (30) days before a proposed deviation or change is implemented.

        (d)     The Holding Company shall notify the Regional Director regarding
        any material event affecting or that may affect the balance sheet,
        capital, or the cash flow of the Holding Company within five (5)
        business days after such event.

3.      (a)     On a quarterly basis, beginning with the quarter ending December
        31, 2009, the Board shall review a written report that compares
        projected operating results contained within the Capital Plan to actual
        results (Capital Plan Variance Report). The Board shall review each

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        Capital Plan Variance Report and address external and internal risks
        that may affect the Holding Company's ability to successfully implement
        the Capital Plan. This review shall include, but not be limited to,
        adverse scenarios relating to asset or liability mixes, interest rates,
        staffing levels and expertise, operating expenses, marketing costs, and
        economic conditions in the markets where the Holding Company is
        operating. The Board's review of each Capital Plan Variance Report and
        assessment of the Holding Company's compliance with the Capital Plan
        shall be fully documented in the appropriate Board meeting minutes.

        (b)     Within sixty (60) days after the close of each quarter beginning
        with the quarter ending December 31, 2009, the Board shall provide the
        Regional Director with a copy of each Capital Plan Variance Report.

DIVIDENDS.
---------

4.      Effective immediately, the Holding Company shall not declare, make, or
pay any cash dividends or other capital distributions or purchase, repurchase or
redeem or commit to purchase, repurchase, or redeem any Holding Company equity
stock without the prior written non-objection of the Regional Director. This
provision shall not apply to immaterial capital stock redemptions that arise in
the normal course of the Holding Company's business in connection with its
stock-based compensation plans. The Holding Company shall submit its written
request for non-objection to the Regional Director at least forty-five (45) days
prior to the anticipated date of the proposed dividend, capital distribution, or
stock transaction. The written request for such notice of non-objection shall:
(a) contain current and pro forma projections regarding the Holding Company's
capital, asset quality, and earnings; and (b) address compliance with the
Capital Plan required by Paragraph 2 of this Order.

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DEBT RESTRICTIONS.
-----------------

5.      Effective immediately, the Holding Company shall not, directly or
indirectly, incur, issue, renew, roll over, or increase any debt or commit to do
so without the prior written non-objection of the Regional Director. The Holding
Company shall submit its written request for non-objection to the Regional
Director at least forty-five (45) days prior to the anticipated date of the
proposed debt transaction. The Holding Company's written requests for Regional
Director non-objection to engage in such debt transactions, at a minimum, shall:
(a) describe the purpose of the proposed debt; (b) set forth and analyze the
terms of the proposed debt and covenants; (c) analyze the Holding Company's
current cash flow resources available to satisfy such debt repayment; and (d)
set forth the anticipated source(s) of repayment of the proposed debt. For
purposes of this Paragraph of the Order, the term "debt" includes, but is not
limited to loans, bonds, cumulative preferred stock, hybrid capital instruments
such as subordinated debt or trust preferred securities, and guarantees of debt.
For purposes of this Paragraph of the Order, the term "debt" does not include
liabilities incurred in the ordinary course of business to acquire goods and
services and that are normally recorded as accounts payable under generally
accepted accounting principles.

TRANSACTIONS WITH AFFILIATES.
----------------------------

6.      Effective immediately, the Holding Company shall not engage in
transactions with any subsidiary or affiliate without the prior written
non-objection of the Regional Director, except: (a) exempt transactions under 12
C.F.R. Part 223; and (b) intercompany cost-sharing transactions identified in
executed written agreements between the parties. The Holding Company shall
provide thirty (30) days advance written notice to the Regional Director of any
proposed affiliate transaction and shall include a full description of the
transaction.

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SEVERANCE AND INDEMNIFICATION PAYMENTS.
--------------------------------------

7.      Effective immediately, the Holding Company shall not make any golden
parachute payment(1) or any prohibited indemnification payment(2) unless, with
respect to each such payment, the Holding Company has complied with the
requirements of 12 C.F.R. Part 359.

DIRECTORATE AND MANAGEMENT CHANGES.
----------------------------------

8.      Effective immediately, the Holding Company shall comply with the prior
notification requirements for changes in directors and Senior Executive
Officers(3) set forth in 12 C.F.R. Part 563, Subpart H.

EMPLOYMENT CONTRACTS AND COMPENSATION ARRANGEMENTS.
--------------------------------------------------

9.      Effective immediately, the Holding Company shall not enter into, renew,
extend, or revise any contractual arrangement related to compensation or
benefits with any director or Senior Executive Officer of the Holding Company,
unless it first provides the Regional Director with not less than thirty (30)
days prior written notice of the proposed transaction. The notice to the
Regional Director shall include a copy of the proposed employment contract or
compensation arrangement, or a detailed written description of the compensation
arrangement to be offered to such director or officer, including all benefits
and perquisites. The Board shall ensure that any contract, agreement, or
arrangement submitted to the Regional Director fully complies with the
requirements of 12 C.F.R. Part 359.

COMPLIANCE COMMITTEE AND PROGRESS REPORTS.
-----------------------------------------
10. Within thirty (30) days, the Board shall appoint a committee of three (3) or
more directors to monitor and coordinate the Holding Company's compliance with
the Order (Compliance Committee). The Compliance Committee may be an existing

-----------------------
(1) The term "golden parachute payment" is defined at 12 C.F.R. ss. 359.1(f).
(2) The term "prohibited indemnification payment" is defined at 12 C.F.R. ss.
    359.1(l).
(3) The term "Senior Executive Officer" is defined at 12 C.F.R. ss.
    563.555.

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Board Committee that meets the criteria of this provision. The Committee shall
be comprised of independent(4) directors.

11.     Within forty-five (45) days of the end of each quarter beginning with
the quarter ending December 31, 2009, the Compliance Committee shall provide a
written progress report to the Board, describing the actions taken by the
Holding Company to comply with each provision of this Order and the results of
those actions. The Board's consideration of the Compliance Committee's progress
report for the period, including comments and questions concerning the progress
report and additional actions taken or directed by the Board, shall be reflected
in the minutes of the Board's meetings.

12.     Within sixty (60) days of the end of each quarter, beginning with the
quarter ending December 31, 2009, a copy of the progress report for the period
with any revisions or comments by the Board shall be provided to the Regional
Director.

EFFECTIVE DATE, INCORPORATION OF STIPULATION.
--------------------------------------------

13.     This Order is effective on the Effective Date as shown on the first
page. The Stipulation is made a part hereof and is incorporated herein by this
reference.

DURATION.
--------

14.     This Order shall remain in effect until terminated, modified, or
suspended by written notice of such action by the OTS, acting by and through its
authorized representatives.

--------------------
(4) For this purpose the term "independent" means that the director is
not: (1) a current or former officer or employee of the Holding Company or of an
affiliate or service provider of the Holding Company; (2) a member of
the immediate family (defined in 12 C.F.R. ss. 561.24) of a director, officer or
employee of the Holding Company or its affiliates; (3) a controlling person of
the Holding Company as defined in 12 C.F.R. ss. 561.14; (4) does not have
outstanding extensions of credit from the Holding Company or its affiliates
except for loans secured by a lien on the borrower's primary residence, and (5)
and has not served as a consultant, advisor, service provider, underwriter, or
legal counsel to the Holding Company or its affiliates.

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TIME CALCULATIONS.
-----------------

15.     Calculation of time limitations for compliance with the terms of this
Order run from the Effective Date and shall be based on calendar days, unless
otherwise noted.

16.     The Regional Director, or an OTS authorized representative, may extend
any of the deadlines set forth in the provisions of this Order upon written
request by the Holding Company that includes reasons in support for any such
extension. Any OTS extension shall be made in writing.

SUBMISSIONS AND NOTICES.
-----------------------

17.     All submissions, including any reports, to the OTS that are required by
or contemplated by this Order shall be submitted within the specified
timeframes.

18.     Except as otherwise provided herein, all submissions, requests,
communications, consents, or other documents relating to this Order shall be in
writing and sent by first class U.S. mail (or by reputable overnight carrier,
electronic facsimile transmission, or hand delivery by messenger) addressed as
follows:

        (a)     TO THE OTS:

                Regional Director
                Office of Thrift Supervision
                One South Wacker Drive, Suite 2000
                Chicago, Illinois  60606
                Facsimile: (312) 917-5001

         (b)    TO THE HOLDING COMPANY:

                Chairman of the Board
                PVF Capital Corp.
                30000 Aurora Road
                Solon, Ohio  44139-2728
                Facsimile: (440) 914-3916

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NO VIOLATIONS AUTHORIZED.
------------------------

19.     Nothing in this Order or the Stipulation shall be construed as allowing
the Holding Company, its Board, officers, or employees to violate any law, rule,
or regulation.

IT IS SO ORDERED.

                                        OFFICE OF THRIFT SUPERVISION

                                        By: /s/ Daniel T. McKee
                                            ------------------------------------
                                            Daniel T. McKee
                                            Regional Director, Central Region

                                            Date: See Effective Date on page 1exhibit10_01.htm

    Exhibit
10.01

     

     

    
 

    PERFORMANCE
SHARE AWARD SUBPLAN

    OF
THE 2007 OMNIBUS LONG-TERM COMPENSATION PLAN

    2010-2012
PERFORMANCE PERIOD

     

    

     

    

     

     

     

    EASTMAN
CHEMICAL COMPANY

     

     

     

     

     

    
       

      
         
51

        
          

        

      

       

    

    EASTMAN
CHEMICAL COMPANY

    PERFORMANCE
SHARE AWARD SUBPLAN

    OF
THE 2007 OMNIBUS LONG-TERM COMPENSATION PLAN

    2010-2012
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” (as defined in
the Plan) or “Qualified Performance-Based Awards” (as defined in the Plan) which
are contingent upon the attainment of certain performance objectives during a
specified period, and subject to such other terms, conditions, and restrictions
as the Committee deems appropriate.  The purpose of this Performance
Share Award Subplan (this “Subplan”) is to set forth the terms of the award
of  performance shares for the 2010-2012 Performance Period specified
herein, effective as of January 1, 2010 (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 within the S&P 1500 “Materials Sector” that
are classified by Standard & Poor’s as Chemical
companies.  The S&P “Materials Sector” index is an index of
industrial companies selected from the S&P “Super Composite 1500” Index,
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.

     

    
       

      
         
52

        
          

        

      

       

    

    

     

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

     

    (viii) “Participation
Date” means October 27, 2009.

     

    (ix) “Performance
Period” means January 1, 2010 through December 31, 2012.

     

    (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.

     

    
       

      
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    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; Types of
Awards.  The Participants who are eligible to participate in
this Subplan are those employees who, as of the Participation Date, are at
Salary Grade 49 and 105 and above.  Employees who are promoted during
the Performance Period to a position that would meet the above criteria, but who
do not hold such position as of the Participation Date, are not eligible to
participate in this Subplan.  The Covered Employees identified on
Schedule A shall receive Qualified Performance-Based Awards.  The
remainder of the Participants shall receive Performance Awards.

     

    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 in increments of 10 performance
shares.  Each member of senior management will have a performance
share budget, based on the cumulative award targets for their Participants,
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:

     

    
      
         

      

      
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    (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.  In the case of Qualified Performance-Based Awards, the
Return on Capital target for each year included in the Performance Period shall
be established within 90 days after commencement of the Performance Period
in a manner that complies with Code Section 162(m).  Moreover, in
the case of Qualified Performance-Based Awards, Return on Capital will be
measured in a manner that complies with Code Section 162(m), including the
requirement that the performance goals be objectively measured.

     

    An award
multiplier table is shown in Exhibit B.  The award multiplier is
based on the Company’s performance relative to its quintile ranking relative to
the Comparison Group, and its average Return on 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 earned by Participants under this Subplan) if the Company does not meet
the specified levels of performance relative to the two measures.

     

    Section
7. Composition of Comparison
Group.

     

    (a) Qualified Performance-Based
Awards.  In the case of Qualified Performance-Based Awards,
there shall be no adjustment in the Comparison Group during the Performance
Period that would cause the Qualified Performance-Based Awards not to qualify
for the Section 162(m) Exemption.

     

    (b) Performance
Awards.  In the case of Performance Awards, the Committee
retains the discretion to make the following adjustments in the Comparison Group
during the Performance Period.  A company in the Comparison Group may
be dropped from the Comparison Group if a company’s common stock ceases to be
publicly traded on a national stock exchange or market; or a company is a party
to a significant merger, acquisition, or other reorganization.  Under
these, or similar, circumstances, the company or companies may be removed from
the Comparison Group, and may be replaced with another company or companies by
Standard & Poor’s, consistent with their established criteria for selection
of companies for the Comparison Group.  In any case where the
Comparison Group ceases to exist, or is otherwise determined to no longer be
appropriate as the basis for a measure under this Subplan, the Committee may
designate a replacement Comparison Group.  In any such case, the
Committee shall have authority to determine the appropriate method of
calculating the TSR of such former and/or replacement Comparison Group, whether
by complete substitution of the replacement Comparison Group (and disregard of
the former Comparison Group) over the entire Performance Period or by pro rata
calculations for each Comparison Group or otherwise.

     

    
       

      
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    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, a Participant must
remain continuously employed with the Company or a Subsidiary at all times from
the Effective Date through the Award Payment Date.

     

    (b) Death, Disability,
Retirement, or Termination for an Approved Reason Before the Award Payment
Date.  If a Participant’s employment 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, or 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, a payout representing a prorated portion of the Actual Grant
Amount to which such participant otherwise would be entitled, with the precise
amount of such payout to be determined by multiplying the Actual Grant Amount by
a fraction, the numerator of which is the number of full calendar months
employed in the Performance Period from the 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
Participants 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.

     

    
       

      
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    (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 Executive
Deferred Compensation Plan (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.

     

    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, except in the case of a Qualified Performance-Based Award
where such actions would cause the Qualified Performance-Based Award to cease to
qualify for the Section 162(m) Exemption.  In the case of a
Qualified Performance-Based Award, the Committee shall retain the discretion to
adjust such Award downward, either on a formula or discretionary basis or any
combination, as the Committee determined.

     

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

     

    
      
         

      

      
        57 

        
          

        

      

       

    

    EXHIBIT
A

     

    Eastman
Chemical Company

    Performance
Share Award Grant Table

    2010-2012
Cycle

     

    

     

    

     

    ON FILE
IN GLOBAL COMPENSATION

     

    

     

    
      
        58

      

      
        
          

        

      

      
        
           

        

      

    

    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

            

    

    

     

    

     

    

     

    
      
        59

      

      
        
          

        

      

       

    

    

    AWARD
NOTICE

     

    

    NOTICE
OF PERFORMANCE SHARES

    AWARDED
PURSUANT TO THE

    EASTMAN
CHEMICAL COMPANY

    2007 OMNIBUS LONG-TERM
COMPENSATION PLAN

     

     

    Recipient:

      
      

    

    Performance Period: 2010 -
2012

     

    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 2010-2012 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 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,
2010 through December 31, 2012 (the "Performance Period"), to the TSRs of the
companies in the Comparison Group (the group of companies within the Standard
and Poor’s “Materials Sector” that are classified as Chemical
companies.  The S&P “Materials Sector” index, identified as Global
Industry Classification Standard (“GICS”) 15, is an index of industrial
companies selected from the S&P “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), 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.

     

     

    
      
        60

      

      
        
          

        

      

       

    

    

    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 Executive Deferred
Compensation Plan (the “EDCP”) and hypothetically invested in units of Common
Stock.  Thereafter, such amount will be treated in the same manner as
other investments in the EDCP, all as specified in Section 9 of the
Subplan.

    

    The Company may withhold or require you
to remit a cash amount sufficient to satisfy federal, state, and local taxes
(including your FICA obligation) required by law to be
withheld.  Further, either the Company or you 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,
an amount is credited 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 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.    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.

    

    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 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, 2010 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 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 8 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 Performance Shares if,. in the determination
of the Committee (in the case of executive officers) or of the executive officer
responsible for Human Resources (in the case of non-executive employees), you
have violated any of the provisions of this Section 8, and in that event any
issuance of shares, payment or other action with respect to the Performance
Shares shall be made or taken, if at all, in the sole discretion of the
Committee or the executive officer responsible for Human Resources

     

     

    
      
        61

      

      
        
          

        

      

       

    

     

    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 contains 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, except in the case of a
Qualified Performance-Based Award where such actions would cause the Qualified
Performance-Based Award to cease to qualify for the Section 162(m)
Exemption.  In the case of a Qualified Performance-Based Award, the
Committee shall retain the discretion to adjust such Award downward, either on a
formula or discretionary basis or any combination, as the Committee
determined.

    

    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.

    

     

    
      
        62

      

      
        
          

        

      

       

    

    EXHIBIT
A

    

    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

            

    

     

    
      
        63

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