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                                                                   EXHIBIT 10.02

                            EASTMAN CHEMICAL COMPANY

                          EASTMAN UNIT PERFORMANCE PLAN
                (AMENDED AND RESTATED EFFECTIVE DECEMBER 6, 2000)
                       (AMENDED EFFECTIVE JANUARY 5, 2001)

ARTICLE 1. PURPOSE

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

ARTICLE 2. RELATIONSHIP TO OTHER VARIABLE COMPENSATION PLANS

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

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

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

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

ARTICLE 3. SUMMARY OF PLAN DESIGN

The UPP is designed so that a pool of dollars ("Bonus Pool") is generated for
each major functional organization (a "Unit") within the Company. For purposes
of this plan, the CEO shall be a participant of the Office of the CEO Unit Bonus
Pool, and the Committee shall be the "Head" and "Management" of the Office of

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the CEO Unit. The amount generated for a Unit Bonus Pool will equal (1) the
aggregate of the UPP pay at risk for each eligible participant in the Unit,
multiplied by (2) a percentage (the "Unit Performance Factor") determined by
performance compared to pre-set Unit performance goals. Generally, the Unit
Performance Factor can range from 0%, if Unit performance goals are not met, to
250% for specified above-goal performance. For those Units for which
quantitative performance goals can be established ("Business Group Units"), the
performance goals and correlative Unit Performance Factors will be established
as soon as practicable, either prior to the beginning of each Performance Year
or as soon as reasonably determinable at the beginning of the Performance Year.
The performance goals and correlative Unit Performance Factors are established
by the Committee, based (in all cases except for the CEO) upon the
recommendation of the CEO, following consultation between the CEO and the head
of each such Unit. For those Units for which quantitative performance measures
are not feasible (for example, Units consisting of staff and support services
whose role is to support Business Group Units), the Unit Performance Factor will
be an average of the actual Unit Performance Factors for the Business Group
Units.

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

ARTICLE 4. ELIGIBILITY AND PARTICIPATION

4.01     GENERAL ELIGIBILITY

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

4.02     NEW PARTICIPANTS AND JOB CHANGES DURING THE PERFORMANCE YEAR

Individuals who are appointed to positions eligible for UPP participation during
the Performance Year become eligible for participation on the first day of the
month of the appointment. Individuals who become participants during the
Performance Year will be eligible to receive a UPP award based on the discretion
of Unit management. Each participant's UPP pay at risk will be allocated to the
Unit Bonus Pool based upon the following process:

         I.       The Performance Year will be divided into four, three-month
                  (quarterly) intervals (January 1 to March 31; April 1 to June
                  30; July 1 to September 30; and October 1 to December 31)

         II.      Anyone promoted into UPP or transferred into a Unit, or
                  changes UPP participation level at any time during one of
                  these three-month intervals will have a portion of his/her
                  total pay at risk allocated to that specific Unit Pool as
                  follows:

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         A.       First Quarter

                  1.       If a PROMOTION into UPP occurs at any time within the
                           first quarter of the Performance Year, then 100% of
                           the participant's UPP pay at risk will be allocated
                           to the unit where he/she is promoted (assuming no
                           other status changes occur within the Performance
                           Year).

                  2.       If a TRANSFER or CHANGE IN PARTICIPATION LEVEL occurs
                           at any time within the first quarter of the
                           Performance Year, then 25% of the participant's UPP
                           pay at risk will be allocated to the unit where
                           he/she was assigned at the time of the transfer; and
                           the remaining 75% of the participant's UPP pay at
                           risk will be allocated to the participant's unit in
                           which he/she is transferred (assuming no other status
                           changes occur within the Performance Year).

         B.       Second Quarter

                  A.       If a PROMOTION into UPP occurs at any time within the
                           second quarter of the Performance Year, then 75% of
                           the participant's UPP pay at risk will be allocated
                           to the unit where he/she is promoted (assuming no
                           other status changes occur within the Performance
                           Year).

                  B.       If a TRANSFER or CHANGE IN PARTICIPATION LEVEL occurs
                           at any time within the second quarter of the
                           Performance Year, then 50% of the participant's UPP
                           pay at risk will be allocated to the unit where
                           he/she was assigned at the time of the transfer; and
                           the remaining 50% of the participant's UPP pay at
                           risk will be allocated to the participant's unit in
                           which he/she is transferred (assuming no other status
                           changes occur during the Performance Year).

         C.       Third Quarter

                  1.       If a PROMOTION into UPP occurs within the third
                           quarter of the Performance Year, then 50% of the
                           participant's UPP pay at risk will be allocated to
                           the unit where he/she is promoted (assuming no other
                           status changes occur within the Performance Year).

                  2.       If a TRANSFER or CHANGE IN PARTICIPATION LEVEL occurs
                           within the third quarter of the Performance Year,
                           then 75% of the participant's UPP pay at risk will be
                           allocated to the unit where he/she was assigned at
                           the time of the transfer; and the remaining 25% of
                           the participant's UPP pay at risk will be allocated
                           to the participant's unit in which he/she is
                           transferred (assuming no other status changes occur
                           during the Performance Year).

         D.       Second Quarter

                  1.       If a PROMOTION into UPP occurs within the fourth
                           quarter of the Performance Year, then 25% of the
                           participant's UPP pay at risk will be allocated to
                           the unit where he/she is promoted (assuming no other
                           status changes occur within the Performance Year).

                  2.       If a TRANSFER or CHANGE IN PARTICIPATION LEVEL occurs
                           within the fourth quarter of the Performance Year,
                           then 100% of the UPP participant's pay at risk will
                           be allocated to the unit where he/she was assigned at
                           the time of the transfer (assuming no other status
                           changes occur during the Performance Year).

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4.03     TERMINATIONS

In the event an eligible participant (1) retires, (2) dies, (3) becomes disabled
under the Eastman Long-Term Disability Plan, or (4) terminates employment as a
result of, pursuant to, or in connection with layoff, special separation,
divestiture, or similar circumstances, such person's UPP pay at risk will be
allocated to his or her Unit's Bonus Pool for such Performance Year in
accordance with the process outlined in Section 4.02, Part II A2, or Part II B2,
or Part II C2, or Part II D2. He/she will be eligible to receive a UPP award for
such Performance Year at the sole discretion of the Unit management.

Participants who terminate employment with the Company for reasons other than
those specified under this Section 4.03 will be credited to a Bonus Pool and
eligible to receive an award under the UPP only if they were actively employed
on the last scheduled workday of the Performance Year.

ARTICLE 5. PERFORMANCE YEAR AND PERFORMANCE GOALS

5.01     PERFORMANCE YEAR

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

5.02     PERFORMANCE GOALS

Each year, the CEO will recommend to the Committee, based upon consultation with
the head of each Business Group Unit, performance goals for each Business Group
Unit for a given Performance Year. Either by the first day of the Performance
Year, or such later date as is practicable, the Committee shall establish in
writing, with respect to the Performance Year, a target objective(s) with
respect to such performance goals and formulae or methods for computing the
applicable Unit Performance Factor based on the extent to which such performance
goals are attained. Unit Performance Factors can range from 0%, if Unit
performance goals are not met, to 250% for specified above-goal performance.
Performance goals for Business Group Units may be based upon any quantitative
and objectively determinable business or financial criteria, alone or in
combination, as the CEO and the applicable Unit head shall deem appropriate.
Performance goals need not be established for all Units, since the Unit
Performance Factor for each Unit other than those with established performance
goals will be an average of the actual Unit Performance Factors for the Business
Group Units.

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

ARTICLE 6. AWARD DETERMINATION

6.01     CERTIFICATION OF PERFORMANCE

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

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

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

Based upon each Business Group Unit's performance against the performance goals,
the Unit Performance Factors for each Unit are determined as provided in
Sections 5.02 and 6.01. The amount generated for each Unit Bonus Pool will equal
(1) the aggregate of the UPP pay at risk for each eligible participant in the
Unit, multiplied by (2) the Unit Performance Factor for such Unit. The
management of each Unit shall have the sole discretion to allocate the Unit
Bonus Pool among eligible participants, based on objective or subjective
assessments of the participants' achievement of pre-established goals and
expectations for the Performance Year. To the extent that the sum of individual
awards as allocated by the Unit management within a particular Unit exceeds the
Bonus Pool amount for that Unit, the Unit management shall make adjustments to
individual awards to account for the difference. Individual adjustments shall be
at the discretion of the Unit management, but aggregate payouts cannot exceed
the total Bonus Pool allocation for the Unit and may be less than the Bonus Pool
allocation for the Unit. Final allocations of the Unit Bonus Pools shall be
reported to the CEO, who shall report the UPP results to the Committee. The
Committee shall approve the UPP award amounts for all executive officers of the
Company, and shall determine the UPP Award amount for the CEO.

ARTICLE 7. PAYMENT OF AWARDS

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

ARTICLE 8. SALARY ADJUSTMENTS AND BENEFITS

8.01     SALARY ADJUSTMENT UPON ENTRY INTO THE UPP

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

8.02     SALARY CONVERSION UPON WITHDRAWAL FROM THE UPP

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

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Should the removal from the Plan involve a reduction in salary grade, a new rate
in the new salary grade will be selected based upon the individual's applicable
training and experience.

8.03     RELATIONSHIP TO BENEFITS AND OTHER COMPENSATION

The UPP award payout is considered in calculating the basis for other
compensation and benefits. For participants who are U. S.-based employees, base
salary, the actual UPP payout (if applicable), the actual APP payout (if
applicable), and the actual EPP payout (if applicable), are included in
calculating retirement benefits. For Participants who are non-U.S.-based
employees, generally retirement benefits are calculated using only base salary
plus "pay at risk" under the UPP, APP, and EPP; however, some countries have
different rules concerning the pay that must be counted in calculating
retirement benefits, and non-U.S. based employees should contact their human
resources representatives if they have questions. Base salary, the target UPP
award payout, the target APP award payout and the target EPP payout are included
in the basis for calculating the actual UPP payout (if applicable), the actual
APP payout (if applicable), the actual EPP payout (if applicable), life
insurance, long-term disability, termination allowance, miscellaneous expense
allowance, and foreign service premium. The base salary rate is the basis for
calculating short-term disability, vacation pay, holiday pay, personal absence
and field allowance.

ARTICLE 9.        OTHER TERMS AND CONDITIONS

9.01     CLAIMS

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

9.02     NO EMPLOYMENT RIGHTS

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

9.03     WITHHOLDING

For Participants who are U.S.-based employees, the Company shall have the power
and the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy Federal, state, and local taxes
(including the participant's OASDI and MEDI obligation) required by law to be
withheld. For Participants who are non-U.S. based employees, the Company shall
have the power and the right to deduct or withhold, or require a Participant to
remit to the Company, an amount sufficient to satisfy all applicable foreign and
local taxes required by law to be withheld.

ARTICLE 10. ADMINISTRATION

10.01    POWER AND AUTHORITY OF THE COMMITTEE

The Committee shall have full power and authority to administer and interpret
the provisions of the Plan and to adopt such rules, regulations, agreements,
guidelines, and instruments for the administration of the Plan and for conduct
of its business as the Committee deems appropriate or advisable. The Committee

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sets and interprets policy, confirms the individual participants in the UPP and
the amounts of "pay-at-risk" under the UPP, establishes annual Unit performance
goals, certifies the extent to which Unit performance goals were satisfied under
the Plan, and approves the UPP award amounts to participants who are executive
officers of the Company.

10.02    COMMITTEE'S DELEGATION OF AUTHORITY

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

10.03    AMENDING OR TERMINATING THE PLAN

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

ARTICLE 11. PLAN AUDIT

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

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                                                                   EXHIBIT 10.03

                            EASTMAN CHEMICAL COMPANY

                            EASTMAN PERFORMANCE PLAN
                (AMENDED AND RESTATED EFFECTIVE FEBRUARY 1, 2001)

ARTICLE 1.        INTRODUCTION

The Eastman Performance Plan, as set forth in this document, has been approved
by the Board of Directors of Eastman Chemical Company (the "Company") as a
variable compensation program which provides eligible employees with tangible
recognition for their contributions to the success of the Company.

The Company's Board of Directors is responsible for approving the declaration of
Plan Payouts under this Plan each year, except for Plan payouts to executive
officers of the Company, which shall be approved by the Compensation Committee.
No declaration of Plan Payout by the Board or the Compensation Committee for any
given year shall commit the Board or the Compensation Committee to any given
level of Plan Payout in future years.

ARTICLE 2.         DEFINITIONS

2.00     AFFILIATED COMPANY. See Section 2.28A.

2.01     BOARD. The Board of Directors of the Company.

2.02     RESERVED.

2.03     CAPITAL. Capital shall designate the funds invested in the Company
through either debt or equity, including funds loaned to the Company from
financial institutions or through the issuance of bonds, debentures or other
private debt instruments, plus the shareholders' cumulative investment in the
Company through the ownership of all outstanding shares of all classes of stock.

2.04     CODE. The Internal Revenue Code of 1986, as amended.

2.05     COLLEGE COOPERATIVE STUDENT. College Cooperative Student shall refer to
an employee who is a college student pursuing studies of interest to the Company
and who generally works a full-time schedule on an alternate work/school block
basis.

2.06     COMPANY. Eastman Chemical Company or its corporate successors.
Notwithstanding the foregoing, whenever reference is made in this Plan to "the
Company" in the context of financial performance, e.g., "the Company's capital
debt", the "Company" shall mean Eastman Chemical Company and all of its
affiliates that are included on its consolidated financial statements.

2.07     RESERVED.

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2.08     COMPENSATION COMMITTEE. The Compensation and Management Development
Committee of the Board, or such other committee designated by the Board,
authorized to administer the Plan as provided herein.

2.09     COST OF CAPITAL. The Cost of Capital reflects the 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.

2.10     RESERVED.

2.11     EARNINGS FROM CONTINUING OPERATIONS. 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.

2.12     RESERVED.

2.13     EASTMAN INVESTMENT AND EMPLOYEE STOCK OWNERSHIP PLAN OR EIP/ESOP. The
Eastman Investment and Employee Stock Ownership Plan, a qualified savings and
employee stock ownership plan under Sections 401(a), 401(k), and 4975 of the
Code, including any amendments which may from time to time be adopted thereto.

2.14     RESERVED.

2.15     ELIGIBLE EMPLOYEE. Eligible Employees shall be all those individuals
who meet the eligibility criteria set forth under Article 3; provided however,
that nonresident aliens working outside of the United States shall not be
defined as Eligible Employees for the purposes of this Plan.

2.16     RESERVED.

2.17     LIMITED SERVICE EMPLOYEE. Limited Service Employee shall refer to any
individual hired by the Company for the specific purpose of meeting needs of
Nine Hundred (900) hours or less in any consecutive twelve (12) month period and
who is designated as a Limited Service Employee when hired.

2.18     PARTICIPATING AFFILIATES. Participating Affiliates shall signify all
those Subsidiaries or Affiliated Companies which from time to time accept the
provisions of the Plan as applying to the employees of such Subsidiary or
Affiliated Company.

2.19     PARTICIPATING EARNINGS. Participating Earnings for a given Performance
Year shall be an Eligible Employee's Participating Earnings set forth in
Appendix A for such Performance Year.

2.20     PAYOUT BASIS. The Payout Basis shall signify the applicable percentage
set forth in accordance with the Payout Table contained in Section 4.04.

2.20A    PAYOUT TABLE. The Payout Table shall be that Table set forth under
Section 4.04 providing for the correlation between the Performance Indicator and
the Payout Basis.

2.21     PERFORMANCE INDICATOR. The Performance Indicator shall mean the Return
on Capital minus the Cost of Capital. Such calculation shall be expressed as a
percentage, which 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%).

2.22     PERFORMANCE YEAR. The Performance Year shall be the calendar year,
running from January 1 through December 31, with respect to which the financial
performance of the Company shall be determined.

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2.23     Plan. The Eastman Performance Plan.

2.24     PLAN PAYOUT. The Plan Payout shall consist of those monies to which the
Eligible Employee shall be entitled in accordance with the provisions of this
Plan.

2.25     REGULAR FULL-TIME EMPLOYEE. Regular Full-Time Employee shall refer to
those individuals who are defined as such on the payrolls of the Company or a
Participating Affiliate and who work a regular schedule of:

         (a) 40 or more hours per week (or shorter time periods where required
         by law, by Company needs, or by the employee's health); or

         (b) Alternative work schedules such as alternating 36 and 48-hour
         workweeks comprised of 12-hour days.

2.26     REGULAR PART-TIME EMPLOYEE. Regular Part-Time Employee shall refer to
those individuals who are defined as such on the payroll of the Company or a
Participating Affiliate, who work a regular schedule of less than 40 hours per
week, and who are not defined as Regular Full-Time Employees under Section 2.25.

2.27     RETURN ON CAPITAL. The 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 2.11, 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%).

2.28     SPECIAL PROGRAM EMPLOYEE. Special Program Employee shall refer to a
high school study-work student, a drafting trainee employed to work one quarter
or semester, a clerical assistant trainee hired to work for one quarter or
semester, a summer technical employee, a visiting scientist, or a normal
temporary employee hired for a limited period.

2.28A    SUBSIDIARY OR AFFILIATED COMPANY. Subsidiary or Affiliated Company
shall mean (i) any business organization which is required to be affiliated with
Eastman Chemical Company under Code Sections 414(a) or (b); and (ii) any joint
venture or other business organization in which Eastman Chemical Company or an
entity described in clause (i) has a direct or indirect stock ownership or
capital and profits interest of at least 20%. Not every Subsidiary or Affiliated
Company is a Participating Affiliate under this Plan.

2.29     TERMINATION ALLOWANCE PLAN OR TAP. Termination Allowance Plan or TAP
shall mean the Termination Allowance Plan adopted by the Company effective
January 1, 1994, and as amended thereafter from time to time.

ARTICLE 3.        ELIGIBILITY

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3.01     BASIC ELIGIBILITY

All Regular Full-Time Employees and Regular Part-Time Employees of Eastman
Chemical Company and any other Participating Affiliates as may from time to time
participate under this Plan, are eligible to receive a Plan Payout as described
herein if they:

         (a) Meet all of the following requirements;

                  (i)      Are employed by Eastman Chemical Company or one of
         the Participating Affiliates on the last scheduled workday for such
         employee during the Performance Year; and

                  (ii)     Receive Participating Earnings with respect to the
         Performance Year; and

                  (iii)    Are living at 11:59 p.m. on the last scheduled
         workday for such Employee during the Performance Year (e.g., if an
         Employee regularly works a Monday to Friday shift, his last scheduled
         workday for the 1996 Performance Year would be Tuesday, December 31,
         1996);

         or

         (b) Meet the requirements of Section 3.02.

         (c) Are not on Company Final Warning as of December 31 of the
         Performance Year.

3.02     SPECIAL ELIGIBILITY

Regular Full-Time Employees and Regular Part-Time Employees who are not actively
employed with the Company or a Participating Affiliate as of December 31 of the
Performance Year are eligible to participate under the provisions of this Plan
provided that they meet one of the following criteria:

         (a) Such employee has retired in accordance with the Eastman Retirement
         Assistance Plan on or after February 1 of the Performance Year; or

         (b) Such employee has exhausted Short-Term Disability benefits during
         the Performance Year and:

                  (i)      Is approved for benefits under the Eastman Long-Term
         Disability Plan; or

                  (ii)     Is not approved for benefits under the Eastman
         Long-Term Disability Plan and is terminated by the Company due to lack
         of prescribed work; or

         (c) Such employee's employment with the Company was terminated during
         the Performance Year and as a result of such termination the employee
         becomes entitled to a Termination Allowance Benefit under the Company's
         Termination Allowance Plan; or

         (d) All of the following conditions are met: (i) an employee's
         employment with the Company is terminated during the Performance Year
         under a layoff as defined in Section 4.01 of TAP, a special separation
         as defined in Section 4.02 of TAP, or a divestiture as defined in
         Section 4.03 of TAP; (ii) such employee does not become entitled to a
         Termination Allowance Benefit under TAP; and (iii) management of the
         Company nevertheless resolves in writing that such employee shall be
         entitled to participate in the Performance Plan for such Performance
         Year upon meeting such conditions as management shall determine in its

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         sole discretion. For this purpose "management of the Company" shall
         mean any of the following: the Board of Directors of the Company, a
         committee of the Board; a committee of the Company responsible for
         benefits plans oversight; or an officer of the Company; or

         (e) Such employee is (i) paid on a United States-based salary
         structure, and (ii) is temporarily employed with a non-participating
         affiliate of the Company and serving outside the borders of the United
         States at the direction or request of the Company or any Participating
         Affiliate; or

         (f) Such employee's employment with the Company was terminated during
         the Performance Year in order to accompany or follow their Eastman
         employee spouse who is transferred to a company unit or subsidiary or
         affiliated company in a different geographic area which is not a
         Participating Affiliate.

3.03     TRANSFER INTO PLAN

Employees who transfer to the Company during the course of any Performance Year
from a subsidiary or affiliated company which is not a Participating Affiliate
in the Plan will be eligible for the Plan Payout payable for the Performance
Year if they satisfy the eligibility requirements of Section 3.01 or 3.02 above.
Earnings and allowances received from such subsidiary or affiliated company are
not included in Participating Earnings.

3.04     TRANSFER FROM PLAN

Employees who are transferred during any Performance Year from the Company to
employment with a subsidiary or affiliated company which is not a Participating
Affiliate will qualify for the Plan Payout payable for that Performance Year,
provided that they are employed full-time or part time by the Subsidiary or
Affiliated Company on the last scheduled workday for such employee during the
Performance Year or meet the requirements of clause (a), (b), or (c) of the
immediately following paragraph. However, earnings and allowances received from
such subsidiary or affiliated company are not included in Participating
Earnings.

If such a transferred regular full time or regular part time employee terminates
employment with the Subsidiary or Affiliated Company prior to the last scheduled
workday of the Performance Year for such employee, then such employee shall
nevertheless be eligible to participate under this Plan if the employee meets
one of the following criteria:

         (a) Such employee has retired in accordance with the defined benefit
         retirement plan for the Subsidiary or Affiliated Company
         (b) Such employee was terminated during the Performance Year and as a
         result of such termination, the employee becomes eligible for a benefit
         from such Subsidiary or Affiliated Company which in the judgment of the
         Compensation Committee or its delegate is comparable to the benefits
         under the Company's Termination Allowance Plan.
         (c) Such employee has exhausted Short-Term Disability benefits during
         the Performance Year; and is approved for benefits under the
         Subsidiary's or Affiliated Company's Long-Term Disability Plan; or is
         not approved for benefits under the Subsidiary or Affiliated Company's
         Long-Term Disability Plan and is terminated due to lack of prescribed
         work.

3.05     EXCLUSIONS

Limited Service Employees, Special Program Employees, College Cooperative
Employees, and all other employees of the Company and Participating Affiliates
not defined as Regular Full-Time Employees or Regular Part-Time

                                       98
<PAGE>   6

Employees are not eligible to receive a Plan Payout as authorized herein unless
reclassified before December 31 of the Performance Year into a class of
employees eligible to receive a Plan Payout in accordance with Sections 3.01 and
3.02. For such reclassified employees, except those employees who were
classified as Limited Service Employees prior to such reclassification, earnings
before reclassification are included in Participating Earnings.

3.06     PARTICIPATION OF RECENTLY HIRED EMPLOYEES

Notwithstanding any language to the contrary contained herein, for the
Performance Year in which an Eligible Employee is first hired by the Company or
by a Participating Affiliate, the Eligible Employee shall not receive a Plan
Payout. For the first full Performance Year after the Eligible Employee's date
of hire, the Eligible Employee shall receive a full (100%) Plan Payout as
calculated under Section 4.06(a). Such allocation made shall be paid entirely in
cash pursuant to the provisions of Section 5.01.

3.07     TERMINATION OF EMPLOYMENT SUBSEQUENT TO PERFORMANCE YEAR

Any Eligible Employee who has met the requirements for participation contained
in this Article 3 for the Performance Year and with whom the employment
relationship with the Company or any Participating Affiliate is subsequently
terminated for any reason prior to the distribution of the Plan Payout for that
Performance Year shall be entitled to the Plan Payout for that Performance Year.
Payment of such Plan Payout shall be made in accordance with the provisions set
forth under Section 5.01.

3.08     ELIGIBILITY IN CASE OF DEATH

Notwithstanding any language contained herein, if an employee dies before
qualifying for the Plan Payout for the Performance Year, the Company may, in its
sole discretion, elect to pay all, part, or none of the Plan Payout to the
estate of the employee or to a designated beneficiary thereof. However, if an
Eligible Employee dies after qualifying for but before receiving a given Plan
Payout, such Plan Payout will be paid to the decedent's estate as a legal right.

ARTICLE 4.        DETERMINATION OF PLAN PAYOUT

4.01     IN GENERAL

The Plan Payout, if any, is intended to reflect the financial performance of the
Company over the course of the Performance Year. Financial performance shall be
measured in terms of the Performance Indicator. Such Plan Payout, if any, shall
be calculated as determined under Section 4.06. The resulting Plan Payout for
each Eligible Employee shall be distributed pursuant to the provisions of
Article 5 below.

4.02     DETERMINATION OF PERFORMANCE INDICATOR

Before or as soon as practicable after the first day of a Performance Year, the
Compensation Committee shall establish in writing for that Performance Year, the
Performance Indicator (including the Cost of Capital for the Performance Year),
the Payout Basis, the General Payout Table, and the formula or method for
calculating the Plan Payout payable to each Eligible Employee if certain levels
of the Performance Indicator are attained.

The Performance Indicator for any Performance Year shall be the Return on
Capital (as defined in Section 2.27) minus the Cost of Capital (as defined in
Section 2.09), expressed as a percentage, which shall be calculated to the third

                                       99
<PAGE>   7
place after the decimal point (i.e., xx.xxx%), and then rounded to the second
place after the decimal point (i.e., xx.xx%). Except as otherwise provided in
the next sentence, measurement of the Company's performance against the
performance goals established by the Committee shall be objectively determinable
and, to the extent they are expressed in standard accounting terms, shall be
determined according to generally accepted accounting principles as in existence
on the date on which the performance goals are established and without regard to
any changes in such principles after such date. In determining whether the
performance goals established by the Committee have been met, the Committee may
in its discretion adjust the financial results for a Performance Year to exclude
the effect of unusual charges or income items or other events (including,
without limitation, acquisitions or divestitures), which are distortive of
financial results for the Performance Year.

4.03     DETERMINATION OF PAYOUT BASIS

The Payout Basis, expressed as a percentage as follows, shall be determined
according to the Payout Table shown in Section 4.04. If the Return on Capital
minus Cost of Capital is not an even percentage, then the exact Payout Basis
shall be calculated by straight line interpolation, and 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%).

4.04     PAYOUT TABLE

<TABLE>
<CAPTION>
                   RETURN ON CAPITAL
                 MINUS COST OF CAPITAL          1              PAYOUT
                                                      BASIS*
                      (PERCENTAGE)                             CASH %
                 <S>                                           <C>
                       10 or More                               25
                           9                                    22
                           8                                    19
                           7                                    17
                           6                                    15
                           5                                    13
                           4                                    11
                           3                                   9.5
                           2                                     8
                           1                                   6.5
                           0                                     5
                          -1                                     4
                          -2                                     3
                          -3                                     2
                          -4                                     1
                         <=5                                     0
</TABLE>

                           * Actual Payout percentages may vary based on pay at
         risk as determined under Section 4.06.

4.05      RESERVED

                                      100
<PAGE>   8

4.06     CALCULATION OF INDIVIDUAL PLAN PAYOUT

Calculations of the individual Plan Payout shall be done as follows:

The Plan Payout for each Eligible Employee shall be calculated by multiplying
the Participating Earnings of the Eligible Employee for the Performance Year by
a fraction, the numerator of which is the Payout Basis derived from the Payout
Table contained in Section 4.04 and the denominator of which is One (1) minus
that percentage of the Eligible Employee's pay at risk as of the Performance
Year as defined under the regular employment practices of the Company. Such
fraction 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%). Thus, the calculation shall be expressed as follows:

           Plan Payout (Total) = Participating Earnings x      Payout Basis
                                                          ----------------------
                                                          1  -  % of Pay at Risk

4.07     ESTIMATED PLAN PAYOUT

The Vice President and Chief Financial Officer, or his delegate shall, on or
about the close of each quarter of the Company's fiscal year, estimate the
annual Payout Basis for the Plan based upon financial performance for the
Performance Year to date. The estimates thus generated shall subsequently be
communicated to Eligible Employees in such a manner as determined by the
Company.

4.08     FINAL DETERMINATIONS BY BOARD AND BY COMPENSATION COMMITTEE

As soon as practicable following the availability of performance results for the
completed Performance Year, the Committee shall determine the Company's
performance in relation to the Performance Indicator for that period and certify
in writing the Company's performance. Such certification shall include
confirmation of the Return on Capital (determined as described in Section 2.27),
and final approval and declaration of the Plan Payout to executive officers.

Notwithstanding any language contained herein, final approval for any Plan
Payout to Eligible Employees other than executive officers determined in
conjunction with this Article 4 must be given by the Board of Directors of the
Company. No declaration of Plan Payout by the Board or the Compensation
Committee for any given year shall commit the Board or the Compensation
Committee to any given level of Plan Payout in future years.

4.09     SHAREOWNER APPROVAL

No Plan Payout payable in cash shall be paid under the Plan to any "Covered
Employee" (within the meaning of Section 162(m) of the Code) for any Performance
Year after 1996 and through and including 1999, unless and until the material
terms (within the meaning of Section 162(m) of the Code) of the Plan, including
the performance goals on which the Plan Payout would be based, are disclosed to
the Company's shareowners and are approved by the shareowners by a majority of
the votes cast.

                                      101
<PAGE>   9

ARTICLE 5.          MECHANISM OF PLAN PAYOUT

5.01     PLAN PAYOUT

Approved Plan Payouts for any Performance Year shall be made in the subsequent
Performance Year and shall, at the discretion of the Company, be paid out in
March of the subsequent Performance Year in cash by check or into an account
designated by the Eligible Employee and held with a commercial bank. The Plan
Payout shall reflect any deductions made by the Company for purposes of Federal
or other taxation or pursuant to request for deferral of benefits made by the
Eligible Employee under the provisions of Article 5.02.

5.02     EASTMAN INVESTMENT AND EMPLOYEE STOCK OWNERSHIP PLAN AND EASTMAN
EXECUTIVE DEFERRED COMPENSATION PLAN PARTICIPATION

Eligible Employees who are also eligible to participate in the Eastman
Investment and Employee Stock Ownership Plan may elect to defer the Plan Payout
for a given Performance Year into the Eastman Investment and Employee Stock
Ownership Plan, to the extent provided under such Plan. Eligible Employees who
are also eligible to participate in the Eastman Executive Deferred Compensation
Plan may elect to defer the Plan Payout for a given Performance Year into the
Eastman Executive Deferred Compensation Plan, to the extent provided under such
Plan. Any funds deferred pursuant to the provisions of this Section 5.02 shall
become subject to the rules and regulations of the EIP/ESOP or the Executive
Deferred Compensation Plan, and shall reflect any deductions made for purposes
of payment of social security taxes due under the Code.

5.03     RESERVED

5.04     DEFERRAL OF AWARD

Notwithstanding anything in this Article 5 to the contrary, if the Compensation
Committee determines that the current payment of any award under this Article 5
could result in the Eligible Employee's receiving compensation in excess of the
maximum amount deductible by the Company for Federal income tax purposes, then
such Committee in its sole discretion may determine that such award shall not be
paid currently, and instead shall be transferred to the Employee's account under
the Eastman Executive Deferred Compensation Plan (and thereafter shall be
subject to the provisions of the Executive Deferred Compensation Plan).

ARTICLE 6.        CLAIM AGAINST PERFORMANCE PAYMENT

The payment of any Plan Payout which may be subject in whole or in part to
execution, lien, assignment, or other claim, notice of which is received by the
Company on or before the Plan Payout payment date, may be delayed for an
appropriate time in order to facilitate proper handling of the claim and in
order to make any necessary adjustments.

ARTICLE 7.        INABILITY TO LOCATE PAYEE

If the Company is unable to make payment hereunder to any Eligible Employee to
whom a Plan Payout is due because the Company is unable to ascertain the
whereabouts of such Eligible Employee after reasonable efforts have been made,
such payment otherwise due shall be forfeited one (1) year after the date the
Plan Payout was to be made.

                                      102
<PAGE>   10

ARTICLE 8.          PLAN DOCUMENT CONTROLS

In the event of a conflict between this Plan document and any other information
or enrollment materials provided to the Eligible Employees (whether written or
oral), the provisions of this document shall control.

ARTICLE 9.          RIGHT TO AMEND OR TERMINATE

Although the Company intends to continue the Plan indefinitely, the Plan may be
terminated, suspended or modified, in whole or in part, at any time for any
reason by action of the Compensation Committee.

ARTICLE 10.         NO EMPLOYMENT RIGHTS

Nothing contained in this Plan shall give any Eligible Employee the right to be
retained in the employment of the Company or affect the right of the Company to
dismiss any employee. The adoption and maintenance of this Plan shall not
constitute a contract between the Company and the Eligible Employee for
consideration for, or inducement or condition of, the employment of the Eligible
Employee.

ARTICLE 11.       CONCLUSIVENESS OF RECORDS

The records of the Company with respect to financial data, Participating
Earnings, and all other relevant matters shall be conclusive for purposes of the
administration of the Plan described in this document.

ARTICLE 12.       ADMINISTRATION; ACTIONS BY THE COMPANY

The Committee shall have full power and authority to administer and interpret
the provisions of the Plan and to adopt such rules, regulations, agreements,
guidelines, and instruments for the administration of the Plan and for conduct
of its business as the Committee deems appropriate or advisable. The Committee
sets and interprets policy, establishes annual performance goals, evaluates
Company performance against the goals, and confirms and certifies the extent to
which Company performance goals were satisfied under the Plan.

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

                                      103
<PAGE>   11

                                   APPENDIX A

                  PARTICIPATING AND NON-PARTICIPATING EARNINGS

PARTICIPATING EARNINGS

Pay for all time worked including:
         Wages and salaries
         Pay for clothes change
         Pay for time spent attending meetings
         Paid lunch periods
         Pay for time in Eastman Medical Department (scheduled hours only)
         Pay for work on community campaigns and special community projects (at
         company request)
         Pay when serving as pallbearer (at company request)
Overtime pay
Shift premiums
Shift supplements
Compensating time off
Holiday pay, premiums, and allowances (including payment for holiday during a
full week of absence)
Vacation pay (including payment in lieu of vacation and excluding purchased
vacation cashout)
Pay for travel status
Lack of work allowance
Time spent by Apprentices in supervised tests or labs
Medical pay allowance (as recommended and arranged by the Eastman Medical
Department)
Jury duty
Call-in allowance
On-call allowance
Adjustment for amount of time spent on Final Warning (for 2000 Performance Year
only)(1)

Note 1:  For the 2000 Performance Year only, Participating Earnings does not
         include pay during the period of time while a Employee is on Final
         Warning Status, as determined under the Company's regular employment
         practices. This adjustment is made by taking an Employee's
         Participating Earnings for the 2000 Performance Year, and excluding a
         pro rata portion based on the amount of time that the Employee was on
         Final Warning Status during such year.

                                      104
<PAGE>   12

NON-PARTICIPATING EARNINGS

Eastman Performance Plan payouts
Annual Performance Plan payouts
Omnibus Plan awards such as:
         Stock Option grants
         Restricted Stock grants
         Long-Term Performance Award Plan awards
Tuition refunds
Educational support payments
Termination allowance and special separation allowance
Moving expenses and allowances as the result of domestic relocation
Additions to allowances on prizes for tax purposes
Taxable awards and prizes such as:
         25-year service awards
         40-year service awards
         Safety awards
         Attendance awards
Allowances for excused absences due to:
         accident at work
         death of a relative
         emergency blood donation
         emergency relief activities
         organized color guard
         employee medical or dental appointment
         serving in public office
         personal absences
         temporary military duty
         time spent voting
         voluntary community services
         other allowances not specifically identified under Participating
         Earnings
Allowances for expatriates:
         cost-of-living allowance
         housing allowance
         tax makeup allowance
         travel allowance
         education allowance
Foreign service premium payments
Payment in lieu of notice of termination
Short-Term Disability benefits
Taxable portion of insurance premium paid by company
Workers' Compensation payments and allowances:
         makeup payments
         statutory payments
         supplements
All other payments or allowances not specifically identified as Participating
Earnings

                                      105

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