Document:

ex-10_11.htm

     

    

    

    

    

    

    

    

    

    AMENDED
AND RESTATED

    EASTMAN
EXECUTIVE DEFERRED COMPENSATION PLAN

    

    (As
Amended and Restated Effective as of December 31, 2008)

    

    

    

    

    

    

    

    EASTMAN
CHEMICAL COMPANY

    

    
      
        172 

      

      
         

        
          

        

      

      
         

      

    

    AMENDED
AND RESTATED

    EASTMAN
EXECUTIVE DEFERRED COMPENSATION PLAN

    TABLE
OF CONTENTS

    

    

    
      	
              Section

            	
              Title

            	
              Page

            
	
              Preamble

            	 
      	
              174

            
	
              Section
      1.

            	
              Definitions

            	
              174

            
	
              Section
      2.

            	
              Deferral
      of Compensation

            	
              177

            
	
              Section
      3.

            	
              Time
      of Election of Deferral

            	
              178

            
	
              Section
      4.

            	
              Hypothetical
      Investments

            	
              178

            
	
              Section
      5.

            	
              Deferrals
      and Crediting Amounts to Accounts

            	
              178

            
	
              Section
      6.

            	
              Deferral
      Period

            	
              179

            
	
              Section
      7.

            	
              Investment
      in the Stock Account and Transfers Between Accounts

            	
              179

            
	
              Section
      8.

            	
              Payment
      of Deferred Compensation

            	
              181

            
	
              Section
      9.

            	
              Payment
      of Deferred Compensation After Death

            	
              183

            
	
              Section
      10.

            	
              Acceleration
      of Payment for Hardship

            	
              183

            
	
              Section
      11.

            	
              Non-Competition
      and Non-Disclosure Provision

            	
              184

            
	
              Section
      12.

            	
              Participant's
      Rights Unsecured

            	
              185

            
	
              Section
      13.

            	
              No
      Right to Continued Employment

            	
              185

            
	
              Section
      14.

            	
              Statement
      of Account

            	
              185

            
	
              Section
      15.

            	
              Deductions

            	
              185

            
	
              Section
      16.

            	
              Administration

            	
              185

            
	
              Section
      17.

            	
              Amendment

            	
              186

            
	
              Section
      18.

            	
              Governing
      Law

            	
              186

            
	
              Section
      19.

            	
              Change
      in Control

            	
              186

            
	
              Section
      20.

            	
              Compliance
      with SEC Regulations

            	
              186

            
	
              Section
      21.

            	
              Successors
      and Assigns

            	
              186

            

    

    

    

    

    

    

    
      
        173 

      

      
         

        
          

        

      

      
         

      

    

    

    AMENDED
AND RESTATED

    EASTMAN
EXECUTIVE DEFERRED COMPENSATION PLAN

    

    Preamble. This
Amended and Restated Eastman Executive Deferred Compensation Plan is an
unfunded, nonqualified deferred compensation arrangement for eligible employees
of Eastman Chemical Company ("the Company") and certain of its
subsidiaries.  Under this Plan, each Eligible Employee is annually
given an opportunity to defer payment of part of his or her cash
compensation.

    

    This Plan
originally was adopted effective January 1, 1994, amended and restated effective
as of August 1, 2002 and August 1, 2007 and subsequently amended and restated
again effective as of December 31, 2008 in order to comply with Section 409A of
the Internal Revenue Code of 1986, as amended.  As permitted under
guidance issued under Code Section 409A, this Plan does not contain provisions
retroactive to the effective date of Section 409A and guidance thereunder since
the effective date of such legislation.

    

    Section
1.  Definitions.

    

    Section
1.1.  "Account" means the EDCP Account.  The EDCP
Account is further sub-divided into an Interest Account and a Stock Account, and
if applicable, each Interest Account and Stock Account is further sub-divided
into a Grandfathered Account and a Non-Grandfathered Account.

    

    Section
1.2.  "Board" means the Board of Directors of the
Company.

    

    
      	
               
      

            	
              Section
      1.3.  "Change In Control" means a change in control of
      the Company of a nature that would be required to be reported (assuming
      such event has not been "previously reported") in response to Item 1 (a)
      of a Current Report on Form 8-K, as in effect on December 31, 2001,
      pursuant to Section 13 or 15(d) of the Exchange Act; provided that,
      without limitation, a Change In Control shall be deemed to have occurred
      at such time as (i) any "person" within the meaning of Section 14(d) of
      the Exchange Act, other than the Company, a subsidiary of the Company, or
      any employee benefit plan(s) sponsored by the Company or any subsidiary of
      the Company, is or has become the "beneficial owner," as defined in Rule
      13d-3 under the Exchange Act, directly or indirectly, of 25% or more of
      the combined voting power of the outstanding securities of the Company
      ordinarily having the right to vote at the election of directors;
      provided, however, that the following will not constitute a Change In
      Control: any acquisition by any corporation if, immediately following such
      acquisition, more than 75% of the outstanding securities of the acquiring
      corporation ordinarily having the right to vote in the election of
      directors is beneficially owned by all or substantially all of those
      persons who, immediately prior to such acquisition, were the beneficial
      owners of the outstanding securities of the Company ordinarily having the
      right to vote in the election of directors, or (ii) individuals who
      constitute the Board on January 1, 2002 (the "Incumbent Board") have
      ceased for any reason to constitute at least a majority thereof, provided
      that: any person becoming a director subsequent to January 1, 2002 whose
      election, or nomination for election by the Company's stockholders, was
      approved by a vote of at least three-quarters (3/4) of the directors
      comprising the Incumbent Board (either by a specific vote or by approval
      of the proxy statement of the Company in which such person is named as a
      nominee for director without objection to such nomination) shall be, for
      purposes of this Plan, considered as though such person were a member of
      the Incumbent Board, (iii) upon approval by the Company's stockholders of
      a reorganization, merger or consolidation, other than one with respect to
      which all or substantially all of those persons who were the beneficial
      owners, immediately prior to such reorganization, merger or consolidation,
      of outstanding securities of the Company ordinarily having the right to
      vote in the election of directors own, immediately after such transaction,
      more than 75% of the outstanding securities of the resulting corporation
      ordinarily having the right to vote in the election of directors; or (iv)
      upon approval by the Company's stockholders of a complete liquidation and
      dissolution of the Company or the sale or other disposition of all or
      substantially all of the assets of the Company other than to a subsidiary
      of the Company.

            

    

    
      
        174 

      

      
         

        
          

        

      

      
         

      

    

    

    Section
1.4.  “Class Year” means each calendar
year.  Notwithstanding the foregoing, the “2004 Class Year” includes
all amounts deferred into this Plan in 2004 and in any calendar years prior to
2004 plus any earnings accruing to the Participant’s 2004 Class
Year.

    

    Section
1.5.  “Code” means the Internal Revenue Code of 1986, as
amended.

    

    
      	
               
      

            	
              Section
      1.6.  "Common Stock" means the $.01 par value common
      stock of the Company.

            

    

    

    
      	
               
      

            	
              Section
      1.7.  "Company" means Eastman Chemical
      Company.

            

    

    

    
      	
               
      

            	
              Section
      1.8.  "Compensation Committee" shall mean the
      Compensation and Management Development Committee of the
      Board.

            

    

    

    Section
1.9.  "Deferrable Amount" means, for a given fiscal year of the
Company, an amount equal to the sum of the Eligible Employee's (i) annual base
cash compensation; (ii) annual cash payments under the Company's Unit
Performance Plan and any sales incentive plan of the Company in which an
Eligible Employee participates; (iii) stock and stock-based awards under the
Omnibus Plan which, under the terms of the Omnibus Plan and the award, are
payable in cash and required or allowed to be deferred into this Plan; (iv)
signing bonus and/or retention bonus, if any, received in connection with his or
her initial employment with the Company or the acquisition by the Company of
such person's previous employer; and (v) special awards of $15,000 or more, such
as special awards under the Company’s Employee/Team Recognition Program and
Chairman & CEO’s Award Program.  In each case, however, the
Deferrable Amount shall not include any amount that must be withheld from the
Eligible Employee's wages for income or employment tax purposes.

    

    
      	
               
      

            	
              Section
      1.10.  “Disability” means the Participant (i) is, by
      reason of any medically determinable physical or mental impairment that
      can be expected to result in death or can be expected to last for a
      continuous period of not less than 12 months, receiving income replacement
      benefits for a period of not less than 3 months under the Applicable
      Disability Plan (as defined below), or (ii) qualifies for Social Security
      disability benefits.  The “Applicable Disability Plan” shall be
      the group long-term disability insurance plan offered by the Company to
      the Participant at the time of the determination.  If no group
      long-term disability insurance plan is being offered to the Participant at
      the time of such determination, the Participant shall be required to
      satisfy clause (ii) in order to be declared Disabled for purposes of this
      Plan.

            

    

    

    Section
1.11.  “EIP/ESOP” means the Eastman Investment and Employee
Stock Ownership Plan.

    

    Section
1.12.  "Eligible Employee" means a U.S.-based employee of the
Company or any of its U.S. Subsidiaries who at any time has a salary grade
classification of SG-49/SG-105 or above.  Any employee who becomes
eligible to participate in this Plan and in a future year does not qualify as an
Eligible Employee because of a change in position level shall nevertheless be
eligible to participate in such year.

    

    Section
1.13.  “Employee Service Center” means the Company’s internal
organization responsible for processing transactions and providing general
information for Participants under this Plan.

    

    Section
1.14.  "Enrollment Period" means the period designated by
Global Benefits each year, provided however, that such period shall end on or
before the last business day of each year.

    

    Section
1.15.  "Excess Compensation” means the excess, if any, of (1)
an Employee's "Company Compensation" as defined in the EIP/ESOP, over (2) the
applicable dollar amount under Section 401(a)(17) of the Internal Revenue Code
of 1986, as amended, which applies to the EIP/ESOP for a given plan year of the
EIP/ESOP.

    
      
        175 

      

      
         

        
          

        

      

      
         

      

    

    

    Section
1.16.  "Exchange Act" means the Securities Exchange Act of
1934, as amended.

    

    Section
1.17.  “Global Benefits” shall mean the Company’s internal
organization responsible for the administration of the payment of benefits under
this Plan.

    

    
      	
               
      

            	
              Section
      1.18.  “Grandfathered Account” means the value of the
      Account of each Participant on December 31, 2004, including (i) the amount
      of the Participant’s ESOP or RSC allocation for 2004, if any, even if such
      amount had not been credited to a Participant’s Account as of December 31,
      2004, and (ii) any earnings accruing to the Participant’s Grandfathered
      Account.   For purposes of this Plan, no part of the
      Participant’s Grandfathered Account shall be subject to Code Section 409A,
      including the 6 month delay required under Section 8.3 of this
      Plan.  For purposes of this Plan, the “Non-Grandfathered
      Account” shall equal the Participant’s Account balance on the date of the
      Participant’s Termination of Employment, minus the amount of the
      Participant’s Grandfathered Account.  The Non-Grandfathered
      Account shall be subject to Code Section
409A.

            

    

    

    Section
1.19.  “Hardship” means an emergency event beyond the
Participant’s control which would cause the Participant severe financial
hardship if the payment of amounts from his or her Accounts were not
approved.  Any distribution for Hardship shall be limited to amounts
in a Participant’s Grandfathered Account.

    

    Section
1.20.  “Initial Enrollment Period” means, for an Eligible
Employee who is newly employed by the Company, the period beginning prior to
such date of employment and ending 30 days after the date of
employment.  For a person who becomes an employee of the Company or a
U.S. Subsidiary through an acquisition by the Company of such person's previous
employer, "Initial Enrollment Period" with respect to deferral of any signing
bonus or retention bonus payable to such person shall mean the period beginning
prior to such date of acquisition, and ending 30 days after such date of
acquisition.  An Eligible Employee who is rehired by the Company may
not enroll during the Initial Enrollment Period if he or she was eligible to
participate in this Plan at any time during the twenty-four (24) month period
prior to his or her rehire.

    

    Section
1.21.  "Interest Account" means the account established by the
Company for each Participant for compensation deferred or Excess Contribution
amounts credited pursuant to this Plan and which shall bear interest as
described in Section 4.1 below.  The maintenance of individual
Interest Accounts is for bookkeeping purposes only.  If applicable,
each Interest Account shall be further sub-divided into a Grandfathered Account
and Non-Grandfathered Account.

    

    Section
1.22.  "Interest Rate" means the monthly average of bank prime
lending rates to most favored customers as published in The Wall Street Journal,
such average to be determined as of the last day of each month.

    

    Section
1.23.  "Market Value" means the closing price of the shares of
Common Stock on the New York Stock Exchange on the day on which such value is to
be determined or, if no such shares were traded on such day, said closing price
on the next business day on which such shares are traded, provided, however,
that if at any relevant time the shares of Common Stock are not traded on the
New York Stock Exchange, then "Market Value" shall be determined by reference to
the closing price of the shares of Common Stock on another national securities
exchange, if applicable, or if the shares are not traded on an exchange but are
traded in the over-the-counter market, by reference to the last sale price or
the closing "asked" price of the shares in the over-the-counter market as
reported by the National Association of Securities Dealers Automated Quotation
System (NASDAQ) or other national quotation service.

    
      
        176 

      

      
         

        
          

        

      

      
         

      

    

    

    Section
1.24.  "Omnibus Plan" means the Eastman Chemical Company 1994
Omnibus Long-Term Compensation Plan or any successor plan to the Omnibus Plan
providing for awards of stock and stock-based compensation to Company
employees.

    

    Section
1.25.  "Participant" means an Eligible Employee who (i) elects
for one or more years to defer compensation pursuant to this Plan; or (ii)
receives an ESOP or RSC allocation under Section 2.2 of this Plan.

    

    
      	
               
      

            	
              Section
      1.26.  "Plan" means this Amended and Restated Eastman
      Executive Deferred Compensation
Plan.

            

    

    

    
      	
               
      

            	
              Section
      1.27.  "Section 16 Insider" means a Participant who is,
      with respect to the Company, subject to the reporting requirements of
      Section 16 of the Exchange Act.

            

    

    

    

    Section
1.28.  "Stock Account" means the account established by the
Company for each Participant, the performance of which shall be measured by
reference to the Market Value of Common Stock.  The maintenance of
individual Stock Accounts is for bookkeeping purposes only.  If
applicable, each Stock Account shall be further sub-divided into a Grandfathered
Account and Non-Grandfathered Account.

    

    Section
1.29.  “Termination of Employment” means a separation from
service under Code Section 409A and the Final 409A Regulations.

    

    Section
1.30.  “Unforeseeable Emergency” means severe financial
hardship of the Participant resulting from an illness or accident of the
Participant, the Participant’s spouse, the Participant’s beneficiary or a
dependent (as defined in Section 152 of the Code without regard to Section
152(b)(1), (b)(2), and (d)(1)(B)), loss of the Participant’s property due to
casualty (including the need to rebuild a home not otherwise covered by
insurance), or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the
Participant.  Except as otherwise provided herein, the purchase of a
home and the payment of college tuition are not unforeseeable emergencies. Any
distribution for an Unforeseeable Emergency shall be limited to amounts in a
Participant’s Non-Grandfathered Account.

    

    Section
1.31.  "U.S. Subsidiaries" means the United States subsidiaries
of the Company listed on Schedule A.

    

    
      	
               
      

            	
              Section
      1.32.  "Valuation Date" means each business
      day.

            

    

    

    Section
2.  Deferral of Compensation;
Allocations.

    

    Section
2.1.  An Eligible Employee may elect to defer receipt of all or
any portion of his or her Deferrable Amount to the Interest Account and/or Stock
Account within such person's EDCP Account for the applicable Class
Year.  A Participant may make deferrals under this Plan regardless of
whether the Participant elects deferrals under the EIP/ESOP for that Class
Year.  If an Eligible Employee terminates employment with the Company
and all of its U.S. Subsidiaries, any previous Class Year deferral election and
distribution election with respect to a payment or award under the Company's
Unit Performance Plan, the Company's Omnibus Plan, and any sales incentive plan
of the Company in which an Eligible Employee participates, shall remain in
effect with respect to such items of compensation payable after Termination of
Employment in the absence of a valid election for the first Class Year occurring
after the Eligible Employee’s Termination.

    
      
        177 

      

      
         

        
          

        

      

      
         

      

    

    

    Section
2.2.  For any Plan Year in which an Eligible Employee has
Excess Compensation, then at such time, if any, as the Company makes a
contribution to the EIP/ESOP with respect to such Plan Year, the Company shall
credit to the Eligible Employee's Stock Account within his EDCP Account under
this Plan, an amount equal to the product of (1) the amount of such Eligible
Employee's Excess Compensation multiplied by (2) the ESOP or RSC Payout
Percentage (the “ESOP/RSC allocation”).

    

    Section
3.  Deferral
Elections.

    

    An
Eligible Employee who wishes to defer compensation must irrevocably elect to do
so during the applicable Enrollment Period. The Enrollment Period shall end
prior to the first day of the service year with respect to the applicable
Deferrable Amount. The “service year” is the Eligible Employee’s taxable year in
which the services related to the Deferrable Amount will be performed by the
Eligible Employee. Elections shall be made annually for each Class
Year.

    

    Notwithstanding
the foregoing, (i) in the first year in which a person becomes an Eligible
Employee by reason of being employed by the Company, the Eligible Employee may
elect to defer receipt of all or any portion of his or her Deferrable Amount
earned for services to be performed subsequent to such election, provided that
such election is made no later than the end of the Initial Enrollment Period;
(ii) in the first year in which a person becomes an Eligible Employee through an
acquisition by the Company of such person's previous employer, the Eligible
Employee may elect to defer receipt of all or any portion of his or her signing
bonus and/or retention bonus paid to such Eligible Employee by the Company,
provided that (x) the deferred amount represents compensation for services to be
performed subsequent to such election, and (y) such election is made no later
than the end of the Initial Enrollment Period.

    

    Section
4.  Hypothetical
Investments.

    

    Section 4.
1.  Interest
Accounts.  Amounts in a Participant's Interest Accounts are
hypothetically invested in an interest bearing account which bears interest
computed at the Interest Rate, compounded monthly.

    

    Section
4.2.  Stock
Accounts.  Amounts in a Participant's Stock Accounts are
hypothetically invested in units of Common Stock.  Amounts deferred
into Stock Accounts are recorded as units of Common Stock, and fractions thereof
with one unit equating to a single share of Common Stock.  Thus, the
value of one unit shall be the Market Value of a single share of Common
Stock.  The use of units is merely a bookkeeping convenience; the
units are not actual shares of Common Stock.  The Company will not
reserve or otherwise set aside any Common Stock for or to any Stock
Account.

    

    Section
5.  Deferrals and Crediting
Amounts to Accounts.

    

    Section
5.1.  Manner of Electing
Deferral.  An Eligible Employee may elect to defer compensation
by completing the deferral election process established by Global
Benefits.   For each Class Year, each Eligible Employee shall
elect, in the manner specified by Global Benefits (i) the amount and sources of
Deferrable Amount to be deferred; (ii) whether deferral of annual base cash
compensation is to be at the same rate throughout the year, or at different
rates for each calendar quarter of the year; (iii) the portion of the deferral
to be credited to the Participant's Interest Account and Stock Account
respectively; and (iv) the manner of payment.  An election to defer
compensation shall be irrevocable following the end of the applicable Enrollment
Period, but the portion of the deferral to be credited to the Participant's
Interest Account and Stock Account, respectively, may be reallocated by the
Participant in the manner specified by Global Benefits or its authorized
designee through and including the business day immediately preceding the date
on which the deferred amount is credited to the Participant's Accounts pursuant
to Section 5.2.

    
      
        178 

      

      
         

        
          

        

      

      
         

      

    

    

    Section
5.2.  Crediting of Amounts to
Accounts.  Except as otherwise provided in this Section with
respect to Section 16 Insiders, amounts to be deferred each Class Year shall be
credited to the Participant's Interest Account and/or Stock Account, as
applicable, within the EDCP Account as of the date such amounts are otherwise
payable.  An ESOP/RSC allocation which is made pursuant to Section 2.2
shall be credited to the Participant's Stock Account within the EDCP Account as
of the date the Company makes the contribution to the EIP/ESOP which triggers
the ESOP/RSC allocation under this Plan provided the Participant is employed by
the Company on the ESOP/RSC allocation date.  In the event a
Participant entitled to an ESOP/RSC allocation is not employed on the ESOP/RSC
allocation date, such payment shall be made in cash to the Participant by the
Company.  Notwithstanding the foregoing, for each Section 16 Insider,
each and every 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 (see Section 7.6 of this Plan), 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,
provided that such transfer shall be subject to the restrictions set forth in
Section 7.2.

    

    Section
6.  Deferral Period.
Subject to Sections 9, 10, and 19 hereof, the amounts credited to a
Participant's Accounts and earnings thereon will be deferred until the
Participant dies, becomes Disabled or has a Termination of Employment with the
Company and all of its U.S. Subsidiaries.  Any such election shall be
made during the applicable Enrollment Period on the deferred compensation form
referenced in Section 5 above.  The payment of a Participant's Account
shall be governed by Sections 8, 9, 10, and 19, as applicable.

    

    Section
7.  Investment in the Stock
Account and Transfers Between Accounts.

    

    Section
7.1.  Election Into the Stock
Account.  Amounts to be credited to a Participant's Stock
Account, whether by reason of a deferral election by the Participant or an ESOP
allocation by the Company, shall be credited, as of the date described in
Section 5.2, with that number of units of Common Stock, and fractions thereof,
obtained by dividing the dollar amount to be credited into the respective Stock
Account by the Market Value of the Common Stock as of such date.

    

    Section
7.2.  Transfers Between
Accounts.  Except as otherwise provided in this Section, a
Participant may direct that all or any portion, designated as a whole dollar
amount, of the existing balance of his or her Interest or Stock Account be
transferred to the other Account, effective as of (i) the date such election is
made, if and only if such election is made prior to the close of trading on the
New York Stock Exchange on a day on which the Common Stock is traded on the New
York Stock Exchange, or (ii) if such election is made after the close of trading
on the New York Stock Exchange on a given day or at any time on a day on which
no sales of Common Stock are made on the New York Stock Exchange, then on the
next business day on which the Common Stock is traded on the New York Stock
Exchange (the date described in (i) or (ii), as applicable, is referred to
hereinafter as the election's "Effective Date").

    

    Such
election shall be made in the manner specified by the Committee or its
authorized designee; provided however, that a Section 16 Insider may only elect
to transfer between his or her Accounts if he or she has made no election within
the previous six months to effect an "opposite way" fund-switching (i.e., transfer out
versus transfer in) transfer into or out of the Stock Account or the Eastman
Stock Funds of the Eastman Investment and Employee Stock Ownership Plan, or any
other "opposite way" intra-plan transfer or plan distribution involving a
Company equity securities fund which constitutes a "Discretionary Transaction"
as defined in Rule 16b-3 under the Exchange Act.  A Participant's election
to transfer less than all of the funds in his or her Interest Accounts to his or
her Stock Accounts shall be applied pro rata to the Interest Account in the
Participant's EDCP Account.  The same procedure shall be followed if
the Participant elects to transfer less than all of the funds in his or her
Stock Accounts to his or her Interest Accounts.

    
      
        179 

      

      
         

        
          

        

      

      
         

      

    

    

    In
addition, and notwithstanding the foregoing, a Section 16 Insider's Deferrable
Amount that is initially allocated to his or her Interest Account as provided in
Section 5.2, shall be transferred, following such initial allocation, from the
Participant's Interest Account to his or her Stock Account in the manner
provided in Section 5.2.

    

    Section
7.3.  Transfer Into the Stock
Account.  If a Participant elects pursuant to Section 7.2 to
transfer an amount from his or her Interest Accounts to his or her Stock
Accounts, then, effective as of the election's Effective Date, his or her Stock
Accounts shall be credited with that number of units of Common Stock; and
fractions thereof, obtained by dividing the dollar amount elected to be
transferred by the Market Value of the Common Stock on the Valuation Date
immediately preceding the election's Effective Date; and (ii) his or her
Interest Accounts shall be reduced by the amount elected to be
transferred.

    

    Section
7.4.  Transfer Out of the Stock
Account.  If a Participant elects pursuant to Section 7.2 to
transfer an amount from his or her Stock Accounts to his or her Interest
Account, effective as of the election's Effective Date; (i) his or her Interest
Accounts shall be credited with a dollar amount equal to the amount obtained by
multiplying the number of units to be transferred by the Market Value of the
Common Stock on the Valuation Date immediately preceding the election's
Effective Date; and (ii) his or her Stock Accounts shall be reduced by the
number of units elected to be transferred.

    

    Section
7.5.  Dividend
Equivalents.  Effective as of the payment date for each cash
dividend on the Common Stock, the Stock Accounts of each Participant who had a
balance in his or her Stock Accounts on the record date for such dividend shall
be credited with a number of units of Common Stock, and fractions thereof,
obtained by dividing (i) the aggregate dollar amount of such cash dividend
payable in respect of such Participant's Stock Accounts (determined by
multiplying the dollar value of the dividend paid upon a single share of Common
Stock by the number of units of Common Stock held in the Participant's Stock
Accounts on the record date for such dividend); by (ii) the Market Value of the
Common Stock on the Valuation Date immediately preceding the payment date for
such cash dividend.

    

    Section
7.6.  Stock
Dividends.  Effective as of the payment date for each stock
dividend on the Common Stock, additional units of Common Stock shall be credited
to the Stock Accounts of each Participant who had a balance in his or her Stock
Accounts on the record date for such dividend.  The number of units
that shall be credited to the Stock Account of such a Participant shall equal
the number of shares of Common Stock and fractions thereof, which the
Participant would have received as stock dividends had he or she been the owner
on the record date for such stock dividend of the number of shares of Common
Stock equal to the number of units credited to his or her Stock Accounts on such
record date.

    

    Section
7.7.  Recapitalization.  If,
as a result of a recapitalization of the Company, the outstanding shares of
Common Stock shall be changed into a greater number or smaller number of shares,
the number of units credited to a Participant's Stock Accounts shall be
appropriately adjusted on the same basis.

    

    Section
7.8.  Distributions.  Amounts
in respect of units of Common Stock may only be distributed out of the Stock
Accounts by transfer to the Interest Accounts (pursuant to Sections 7.2 and 7.4
or 7.10) or withdrawal from the Stock Accounts (pursuant to Sections 8, 9, 10,
or 19), and shall be distributed in cash.  The number of units to be
distributed from a Participant's Stock Accounts shall be valued by multiplying
the number of such units by the Market Value of the Common Stock as of the
Valuation Date immediately preceding the date such distribution is to
occur.  Pending the complete distribution under Section 8.2 or
liquidation under Section 7.10 of the Stock Accounts of a Participant who has
terminated his or her employment with the Company or any of its U.S.
Subsidiaries, the Participant shall continue to be able to make elections
pursuant to Sections 7.2, 7.3, and 7.4 and his or her Stock Accounts shall
continue to be credited with additional units of Common Stock pursuant to
Sections 7.5, 7.6,   and 7.7.

     

     

    
      
        180

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
7.9.  Responsibility for
Investment Choices.  Each Participant is solely responsible for
any decision to defer compensation into his or her EDCP Stock Account, and to
retain in his or her ESOP Stock Account any amounts credited thereto, and to
transfer amounts to and from his or her Stock Accounts. Each Participant accepts
all investment risks entailed by such decision, including the risk of loss and a
decrease in the value of the amounts he or she elects to transfer into his or
her Stock Accounts.

    

    Section
7.10.  No Reinvestment in Stock
Accounts after Termination of Employment.  Once a Participant
has had a Termination of Employment with the Company and all of its U.S.
Subsidiaries, a Participant may, until his Account is fully distributed and
pursuant to the rules of this Plan, elect to liquidate units of the Stock
Accounts and transfer such value to the Interest Accounts, but the Participant
may not transfer any funds from the Interest Accounts into the Stock
Accounts.  For purposes of valuing the units of Common Stock subject
to such a transfer, the approach described in Section 7.8 shall be
used.

    

    Section
8.  Payment of Deferred
Compensation.

    

    Section
8.1.  Background.  No
withdrawal may be made from a Participant's Accounts except as provided in this
Section 8 and Sections 9, 10, and 19.

    

    Section
8.2.  Manner of
Payment.  Payment of a Participant's Account shall be made in a
single lump sum or annual installments, as elected by the Participant pursuant
to this Section 8 for each Class Year.  The maximum number of annual
installments is ten.  If a Participant elects installments, the amount
of each payment shall be equal to the value, as of the preceding Valuation Date,
of the Participant’s Class Year Account, divided by the number of installments
remaining to be paid.  All payments from this Plan shall be made in
cash.

    

    Section
8.3.  Timing of
Payments.

    

    (a)       Subject
to Sections 8.3(b), 8.3(c) and 8.3(d), payments shall commence in the year
elected by the Participant pursuant to this Section 8, up through the tenth year
following the year in which the Participant becomes Disabled or has a
Termination of Employment from the Company and all of its U.S. Subsidiaries, but
in no event may a Participant elect to have payments commence later than the
year the Participant reaches age 71.  If payment is due from a
Participant’s Grandfathered Account in a lump sum, such payment shall be made on
the first business day of the month following the Participant’s Termination of
Employment.  If payment is due from a Participant’s Grandfathered
Account in installments, payments shall begin on the first business day
following the Participant’s Termination of Employment and the remaining
installment payments shall be made on each anniversary of the Participant’s
first installment payment.

    

    (b)       If
payment is due from this Plan on account of Termination of Employment (but not
death or Disability) and  payment is due in a lump sum, the
Participant’s right to receive such payment will be delayed until the earlier of
the Participant’s death, Disability or the first business day of the seventh
month following the date of the Participant’s Termination of Employment (subject
to the exceptions specified in the Final 409A Regulations).  This
Section 8.3(b) shall not apply to any portion of the Participant’s Grandfathered
Account.

    

    (c)       If
payment(s) are due from this Plan on account of Termination of Employment (but
not death or Disability) and payments are due in annual installments, the
Participant’s right to begin to receive such payments will be delayed until the
earlier of the Participant’s death, Disability or the first business day of the
seventh month following the date of the Participant’s Termination of Employment
(subject to the exceptions specified in the Final 409A Regulations) and the
remaining installment payments will be paid on the anniversary of the
Participant’s first installment payment.  For purposes of this Plan,
each installment payment is considered to be a separate payment.  This
Section 8.3(c) shall not apply to any portion of the Participant’s Grandfathered
Account.

    
      
        181 

      

      
         

        
          

        

      

      
         

      

    

    

    (d)       If
payment(s) are due from this Plan on account of Disability, and payments are due
in annual installments, payments from the Participant’s Grandfathered Account
and Non-Grandfathered Account shall commence no later than the first business
day of the second month following the Participant’s Termination of Employment
and the remaining installment payments will be paid on each anniversary of the
initial payment.  If payment is due from this Plan on account of
Disability in a lump sum, payment from the Participant’s Grandfathered Account
and Non-Grandfathered Account shall be made to the Participant on the first
business day of the month following the Participant’s Termination of
Employment.

    

    Section
8.4.  Valuation.   The
amount of each payment shall be equal to the value, as of the preceding
Valuation Date, of the Participant's Accounts, divided by the number of
remaining payments to be paid.  If payment of a Participant's Accounts
is to be paid in installments and the Participant has a balance in his or her
Stock Account at the time of the payment of an installment, the amount that
shall be distributed from his or her Stock Account shall be the amount obtained
by multiplying the total amount of the installment determined in accordance with
the immediately preceding sentence by the percentage obtained by dividing the
balance in the Stock Account as of the immediately preceding Valuation Date by
the total value of the Participant's Accounts as of such
date.  Similarly, in such case, the amount that shall be distributed
from the Participant's Interest Account shall be the amount obtained by
multiplying the total amount of the installment determined in accordance with
the first sentence of this Section 8.4 by the percentage obtained by dividing
the balance in the Interest Account as of the immediately preceding Valuation
Date by the total value of the Participant's Accounts as of such
date.

    

    Section
8.5.  Participant Payment
Elections.  An election by a Participant concerning the method
of payment under Section 8.2 or the commencement of payments under Section 8.3
for his or her 2004 Class Year account must be made at least one (1) year before
the Participant's Termination of Employment, and must be made during the
Enrollment Period in the manner specified by Global Benefits.  An
election by a Participant concerning the method of payment under Section 8.2 or
the commencement of payments under Section 8.3 for his or her 2005 or later
Class Year accounts, must be made during the Enrollment Period which ends prior
to the first day of the service year with respect to the Deferrable Amount
subject to the election.  Changes to elections for a Participant’s
2005 or later Class Year accounts must comply with Section 8.6.

    

    Section
8.5A.  Default Payment Distribution
Elections.  If a Participant does not have a valid election in
force at the time of Termination of Employment for any Class Year, then (i) if
the value of his aggregate Accounts (Grandfathered and Non-Grandfathered) as of
the last Valuation Date of the calendar year in which he has a Termination of
Employment is less than ten thousand dollars ($10,000), then the value of his
Class Year Account(s) for which a valid distribution election does not exist
shall be paid in a single lump sum to the Participant on the first business day
of the seventh month following the Participant’s Termination of Employment date;
and (ii) if the aggregate value of his Accounts (Grandfathered and
Non-Grandfathered) as of the last Valuation Date of the calendar year in which
he has a Termination of Employment is ten thousand dollars ($10,000) or more,
then the value of his Class Year Account(s) for which a valid distribution
election does not exist shall be paid in five (5) annual installments beginning
on the first business day of the seventh month following the Participant’s
Termination of Employment date with the remaining installments paid to the
Participant on each anniversary of the initial
payment.  Notwithstanding the foregoing, if the Class Year account for
which a valid distribution election does not exist is the Participant’s 2004
Class Year account, the six month delay shall not apply and payments shall be
made in accordance with the provisions of Section 8.3(a).

    

    This
Section 8.5A shall apply regardless of the Participant’s age on the date of his
Termination of Employment.

    
      
        182 

      

      
         

        
          

        

      

      
         

      

    

    

    Section
8.6.  Special Payment Election
Rules.

    

    
      	
            	
              (a)

            	
              Notwithstanding
      Sections 8.2, 8.3, 8.5 and 8.5A, if a Participant terminates employment
      less than one (1) year after the date he first becomes eligible to
      participate in this Plan, then an election made by the Participant under
      this Section 8 no later than thirty (30) days after the date he first
      becomes eligible to participate in this Plan shall be
    valid.

            

    

         

    
      	
               
      

            	
              (b)

            	
              The
      timing of a distribution of a Participant’s Non-Grandfathered Account may
      not be accelerated, except in the event of an Unforeseeable Emergency or
      other permissible acceleration of distribution under Treas. Reg. Section
      1.409A-3(j)(4)(iii) (conflicts of interest), (j)(4)(vi) (payment of
      employment taxes), (j)(4)(vii) (payment upon income inclusion under
      Section 409A), (j)(4)(ix) (plan terminations and liquidation), (j)(4)(xi)
      (payment of state, local or foreign taxes), (j)(4)(xiii) (certain offsets)
      and (i)(4)(xiv) (bona fide
disputes).

            

    

     

    
      	
            	
              (c)

            	
              Any
      change which delays the timing of distributions or changes the form of
      distributions from a Participant’s Non-Grandfathered Account may be made
      only if the following requirements are
met:

            

    

     

    (i)   Any election to
change the time and form of distribution may nottake effect until at least 12
months after the date on which the election ismade;

     

    (ii)  Other
than in the event of death, the first payment with respect to the election
described in (i) above, must be deferred for a period of at least 5 years from
the date such payment otherwise would have been made; and

     

    (iii)  Any
election related to a payment to be made at a specified time may not be made
less than 12 months prior to the date of the first scheduled
payment.

     

    Any
election to change the time or form of distribution from a Participant’s
Grandfathered Account must be in effect at least 12 months before the
Participant’s Termination of Employment in order to be valid.

     

    Section
9.  Payment of Deferred
Compensation After Death.  If a Participant dies prior to
complete payment of his or her Accounts, the balance of such Accounts, valued as
of the Valuation Date immediately preceding the date payment is made, shall be
paid in a single, lump sum Payment to:  (i) the beneficiary or
contingent beneficiary designated by the Participant in accordance with
procedures established by Global Benefits and such lump sum shall be paid no
later than ninety (90) days after the Employee Service Center is notified of the
Participant’s death, (ii) in the absence of a valid designation of a beneficiary
or contingent beneficiary, the Participant's estate within 30 days after
appointment of a legal representative of the deceased Participant.

    

    Section
10.  Acceleration of Payment for
Hardship or Unforeseeable Emergency.

    

    Section
10.1.  Hardship or Unforeseeable
Emergency.  Hardship distributions shall be limited to amounts
in a Participant’s Grandfathered Account and distributions for an Unforeseeable
Emergency shall be limited to amounts in a Participant’s Non-Grandfathered
Account. Upon written approval from the Company's Senior Vice President and
Chief Administrative Officer (“Senior VP & CAO), with respect to
Participants other than executive officers of the Company, and by the
Compensation Committee, with respect to Participants who are executive officers
of the Company, and subject to the restrictions in the next two sentences, a
Participant, whether or not he or she is still employed by the Company or any of
its U.S. Subsidiaries, may be permitted to receive all or part of his or her
Accounts if the Company's Senior VP & CAO (or his delegate), or the
Compensation Committee, as applicable, determines that the Participant has
suffered a Hardship or Unforeseeable Emergency.  The amount
distributed may not exceed the amount necessary to satisfy the Hardship or
Unforeseeable Emergency plus amounts necessary to pay

     

    
      
        183

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    taxes
reasonably anticipated as a result of the distribution, after taking into
account the extent to which such Hardship or Unforeseeable Emergency is or may
be relieved through reimbursement or compensation by insurance or otherwise by
liquidation of the Participant’s assets (to the extent the liquidation of such
assets would not itself cause severe financial hardship).

    

    Section
10.2.  Other
Payments.  Any participant in this Plan may at his or her
discretion withdraw at any time all or part of that person's Grandfathered
Account Balance under this Plan; provided, if this option is exercised the
individual will forfeit to the Corporation 10% of his or her aggregate
Grandfathered Account Balance, and will not be permitted to make deferrals to or
receive ESOP or RSC allocations under this Plan for a period of 36 months
beginning on the first day of the plan year following the plan year which
includes the date any payment to a Participant is made under this
section.

    

    Section
10.3.  Accelerated Payment.
If under this Plan one-half or more of the Participants with a Grandfathered
Account, or one-fifth or more of the Participants with a Grandfathered Account
with one-half or more of the value of all benefits owed exercise their option
for immediate distribution in any consecutive six-month period, this will
trigger immediate payment to all Participants of all benefits owed under the
terms of this Plan from Grandfathered Accounts, immediate payout under this
section will not involve reduction of the amounts paid to Participants as set
forth in section 10.2.  Any individual that has been penalized in this
six-month period for electing immediate withdrawal will be paid that penalty,
and continuing participation will be allowed, if payout to all Participants
under this section occurs.  Solely for purposes of this Section 10.3,
“benefits” shall refer to amounts held in Grandfathered Accounts under this
Plan.

    

    Section
10.4.  Section 16
Insiders.  A Section 16 Insider may only receive a withdrawal
from his or her Stock Account pursuant to this Section 10 if he or she has made
no election within the previous six months to effect a fund-switching transfer
into the Stock Account or the Eastman Stock Fund of the Eastman Investment Plan
or any other "opposite way" intra-plan transfer into a Company equity securities
fund which constitutes a "Discretionary Transaction" as defined in Rule 16b-3
under the Exchange Act.  If such a distribution occurs while the
Participant is employed by the Company or any of its U.S. Subsidiaries, any
election to defer compensation for the year in which the Participant receives a
withdrawal shall be ineffective as to compensation earned for the pay period
following the pay period during which the withdrawal is made and thereafter for
the remainder of such year and shall be ineffective as to any other compensation
elected to be deferred for such year.

    

    Section
10.5.  EDCP
Elections.  A Participant's election to withdraw less than all
of the funds in his or her Account under Sections 10.1 or 10.2 above shall be
applied pro rata to all of the Participant's sub-accounts under this Plan (i.e.,
to the two investment accounts under the EDCP Account.

    

    Section
11.  Non-Competition and
Non-Disclosure Provision. Participant will not, without the written
consent of the Company, either during his or her employment by Company or any of
its U.S. Subsidiaries or thereafter, disclose to anyone or make use of any
confidential information which he or she has acquired during his or her
employment relating to any of the business of the Company or any of its
subsidiaries, except as such disclosure or use may be required in connection
with his or her work as an employee of Company or any of its U.S.
Subsidiaries.  During Participant's employment by the Company or any
of its U.S. Subsidiaries, and for a period of two years after the termination of
such employment, he or she will not, without the written consent of the Company,
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 he or she has worked for the Company or any of its U.S.
Subsidiaries.  The agreement in this Section 11 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. If
the Participant does not comply with the terms of this Section 11, the Company's
Senior VP & CAO (or his delegate) with respect to Participants other than
executive officers of the Company, or the Compensation Committee, with respect
to executive

    
      
        184 

      

      
         

        
          

        

      

      
         

      

    

    

    officers
of the Company may, in his or its sole discretion, direct the Company to pay to
the Participant the balance credited to the portion of his or her Interest
Accounts and/or Stock Accounts that consists of the Grandfathered Account
portion.

    

    Section
12.  Participant's Rights
Unsecured.  The benefits payable under this Plan shall be paid
by the Company each year out of its general assets.  To the extent a
Participant acquires the right to receive a payment under this Plan, such right
shall be no greater than that of an unsecured general creditor of the
Company.  No amount payable under this Plan may be assigned,
transferred, encumbered or subject to any legal process for the payment of any
claim against a Participant.  No Participant shall have the right to
exercise any of the rights or privileges of a shareowner with respect to the
units credited to his or her Stock Accounts.

    

    Section
13.  No Right to Continued
Employment. Participation in this Plan shall not give any employee any
right to remain in the employ of the Company or any of its U.S.
Subsidiaries.  The Company and each employer U S. Subsidiary reserve
the right to terminate any Participant at any time.

    

    Section
14.  Statement of Account.
Statements will be made available no less frequently than annually to each
Participant or his or her estate showing the value of the Participant's
Accounts.

    

    Section
15.  Deductions. The
Company will withhold to the extent required by law an applicable income and
other taxes from amounts deferred or paid under this Plan.

    

    Section
16.  Administration.

    

    Section
16.1.  Responsibility.  Except
as expressly provided otherwise herein, the Compensation Committee shall have
total and exclusive responsibility to control, operate, manage and administer
this Plan in accordance with its terms.

    

    Section
16.2.  Authority of the
Compensation Committee.  The Compensation Committee shall have
all the authority that may be necessary or helpful to enable it to discharge its
responsibilities with respect to this Plan.  Without limiting the
generality of the preceding sentence, the Compensation Committee shall have the
exclusive right to interpret this Plan, to determine eligibility for
participation in this Plan, to decide all questions concerning eligibility for
and the amount of benefits payable under this Plan, to construe any ambiguous
provision of this Plan, to correct any default, to supply any omission, to
reconcile any inconsistency, and to decide any and all questions arising in the
administration, interpretation, and application of this Plan.

    

    Section
16.3.  Discretionary
Authority.  The Compensation Committee shall have full
discretionary authority in all matters related to the discharge of its
responsibilities and the exercise of its authority under this Plan including,
without limitation, its construction of the terms of this Plan and its
determination of eligibility for participation and benefits under this
Plan.  It is the intent that the decisions of the Compensation
Committee and its action with respect to this Plan shall be final and binding
upon all persons having or claiming to have any right or interest in or under
this Plan and that no such decision or action shall be modified upon judicial
review unless such decision or action is proven to be arbitrary or
capricious.

    

    Section
16.4.  Authority of Senior Vice
President and Chief Administrative Officer (“Senior VP &
CAO”).  Where expressly provided for under Sections 8, 10 and
11, the authority of the Compensation Committee is delegated to the Company's
Senior VP & CAO, and to that extent the provisions of Section 16.1 through
16.3 above shall be deemed to apply to such Senior VP & CAO.

    

    Section
16.5.  Delegation of
Authority.  The Compensation Committee may provide additional
delegation of some or all of its authority under this Plan to any person or
persons provided that any such delegation be in writing.

    
      
        185 

      

      
         

        
          

        

      

      
         

      

    

    

    Section
17.  Amendment.  The
Board may suspend or terminate this Plan at any time.  Notwithstanding
the foregoing, termination with respect to the portion of this Plan that
includes the Non-Grandfathered Accounts must comply with the requirements of
Treas. Reg. Section 1.409A-3(j)(4)(ix).  In addition, the Board may,
from time to time, amend this Plan in any manner without shareowner approval;
provided however, that the Board may condition any amendment on the approval of
shareowners if such approval is necessary or advisable with respect to tax,
securities, or other applicable laws. However, no amendment, modification, or
termination shall, without the consent of a Participant, adversely affect such
Participant's accruals in his or her Accounts as of the date of such amendment,
modification, or termination.

    

    Section
18.  Governing Law. This
Plan shall be construed, governed and enforced in accordance with the law of
Tennessee, except as such laws are preempted by applicable federal
law.

    

    Section
19.  Change in
Control.

    

    Section
19.1.  Background.  The
terms of this Section 19 shall immediately become operative, without further
action or consent by any person or entity, upon a Change in Control, and once
operative shall supersede and control over any other provisions of this
Plan.

    

    Section
19.2.  Amendment On or After Change
in Control.  On or after a Change in Control, no action,
including, but not by way of limitation, the amendment, suspension or
termination of this Plan, shall be taken which would affect the rights of any
Participant or the operation of this Plan with respect to the balance in the
Participant's Accounts without the written consent of the Participant, or, if
the Participant is deceased, the Participant's beneficiary under this Plan (if
any).

    

    Section
19.3.                                Attorney
Fees.  The Company shall pay all reasonable legal fees and
related expenses incurred by a Participant in seeking to obtain or enforce any
payment, benefit or right such participant may be entitled to under this Plan
after a Change in Control; provided, however, the Participant shall be required
to repay any such amounts to the Company to the extent a court of competent
jurisdiction issues a final and non-appealable order setting forth the
determination that the position taken by the Participant was frivolous or
advanced in bad faith.  For purposes of this Section 19.3, the legal
fees and related expenses must be incurred by the Participant within 5 years of
the date the Change in Control occurs.  All reimbursements must be
paid to the Participant by the Company no later than the end of the tax year
following the tax year in which the expense is incurred.

    

    Section
20.  Compliance with SEC
Regulations.  It is the Company's intent that this Plan comply
in all respects with Rule 16b-3 of the Exchange Act, and any regulations
promulgated thereunder.  If any provision of this Plan is found not to
be in compliance with such rule, the provision shall be deemed null and void.
All transactions under this Plan, including, but not by way of limitation, a
Participant's election to defer compensation under Section 7 and withdrawals in
the event of a Hardship or Unforeseeable Emergency under Section 10, shall be
executed in accordance with the requirements of Section 16 of the Exchange Act,
as amended and any regulations promulgated thereunder.  To the extent
that any of the provisions contained herein do not conform with Rule 16b-3 of
the Exchange Act or any amendments thereto or any successor regulation, then the
Committee may make such modifications so as to conform this Plan to the Rule's
requirements.

    

    Section
21.  Successors and
Assigns. This Plan shall be binding upon the successors and assigns of
the parties hereto.

    
      
        186 

      

      
         

        
          

        

      

      
         

      

    

    

    SCHEDULE
A

    

    

    Eastman
Chemical Resins, Inc.

    

    Eastman
Gasification Services Company

    

    EGSC
Beaumont, Inc.

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    
      
        187ex-10_12.htm

    FIFTH
AMENDED AND RESTATED

    EASTMAN
DIRECTORS' DEFERRED COMPENSATION PLAN

    

    Preamble.  This
Fifth Amended and Restated Eastman Directors' Deferred Compensation Plan is an
unfunded, non-qualified deferred compensation arrangement for non-employee
members of the Board of Directors of Eastman Chemical Company (the "Company").
Under this Plan, each Eligible Director is annually given an opportunity to
elect to defer payment of part of his or her compensation for serving as a
Director. This Plan originally was adopted effective January 1, 1994, was
amended and restated effective as of December 1, 1994, as of May 2, 1996,
October 10, 1996, and August 1, 2007 and is further amended and restated
effective as of December 31, 2008 in order to comply with Section 409A of the
Internal Revenue Code of 1986, as amended.

    

    Section
1.  Definitions.

    

    Section
1.1.  "Account" means the Interest Account or the Stock
Account.  If applicable, the Interest Account and the Stock Account
are each further sub-divided into a Grandfathered Account and a
Non-Grandfathered Account.

    

    Section
1.2.  "Board" means the Board of Directors of the
Company.

    

    
      	
               
      

            	
              Section 1.3.  "Change
      In Control" means a change in control of the Company of a nature that
      would be required to be reported (assuming such event has not been
      previously reported") in response to Item l(a) of a Current Report on Form
      8-K, as in effect on December 31, 2001, pursuant to Section 13 or 15(d) of
      the Exchange Act; provided that, without limitation, a Change In Control
      shall be deemed to have occurred at such time as
      (i) any "person" within the meaning of Section 14(d) of the Exchange
      Act, other than the Company, a subsidiary of the Company, or any employee
      benefit plan(s) sponsored by the Company or any subsidiary of the Company,
      is or has become the "beneficial owner," as defined in Rule l3d-3 under
      the Exchange Act, directly or indirectly, of 25% or more of the combined
      voting power of the outstanding securities of the Company ordinarily
      having the right to vote at the election of directors; provided, however,
      that the following will not constitute a Change In Control: any
      acquisition by any corporation if, immediately following such acquisition,
      more than 75% of the outstanding securities of the acquiring corporation
      ordinarily having the right to vote in the election of directors is
      beneficially owned by all or substantially all of those persons who,
      immediately prior to such acquisition, were the beneficial owners of the
      outstanding securities of the Company ordinarily having the right to vote
      in the election of directors; or (ii) individuals who constitute the Board
      on January 1, 2002 (the "Incumbent Board") have ceased for any reason to
      constitute at least a majority thereof, provided that: any person becoming
      a director subsequent to January 1, 2002 whose election, or nomination for
      election by the Company's shareowners, was approved by a vote of at least
      three-quarters (3/4) of the directors comprising the Incumbent Board
      (either by a specific vote or by approval of the proxy statement of the
      Company in which such person is named as a nominee for director without
      objection to such nomination) shall be, for purposes of this Plan,
      considered as though such person were a member of the Incumbent Board; or
      (iii) upon approval by the Company's shareowners of a reorganization,
      merger or consolidation, other than one with respect to which all or
      substantially all of those persons who were the beneficial owners,
      immediately prior to such reorganization, merger or consolidation, of
      outstanding securities of the Company ordinarily having the right to vote
      in the election of directors own, immediately after such transaction, more
      than 75% of the outstanding securities of the resulting corporation
      ordinarily having the right to vote in the election of directors; or (iv)
      upon approval by the Company's stockholders of a complete liquidation and
      dissolution of the Company or the sale or other disposition of all or
      substantially all of the assets of the Company other than to a subsidiary
      of the Company.

            

    

    

    Section
1.4.  “Employee Service Center” means the Company’s internal
organization responsible for processing transactions and providing general
information for Participants under this Plan.

    

    Section
1.5.  “Global Benefits” shall mean the Company’s internal
organization responsible for the administration of the payment of benefits under
this Plan.

    
      
        188 

      

      
         

        
          

        

      

      
         

      

    

    

    Section
1.6.  "Nominating and Corporate Governance Committee" means the
Nominating and Corporate Governance Committee of the Board.

    

    Section 1.7.  “Class Year”
means each calendar year.   Notwithstanding the foregoing, the
“2004 Class Year” includes all amounts deferred into this Plan in 2004 and in
any calendar years prior to 2004, plus any earnings accruing to the
Participant’s 2004 Class Year.

    

    Section 1.8.  “Code” means the Internal Revenue
Code of 1986, as amended.

    

    Section 1.9.  "Common Stock" means the $.01 par
value common stock of the Company.

    

    Section 1.10.  "Company" means Eastman Chemical
Company.

    

    Section 1.11.  "Deferrable Amount" means an amount
equal to the sum of the Eligible Director's cash compensation, including
retainer, meeting fees, and any other compensation otherwise payable in cash
plus any non-elective deferrals contributed to this Plan by the Company on
behalf of an Eligible Director.

    

    Section 1.12.  "Eligible Director" means a member
of the Board of Directors of the Company who is not an employee of the Company
or any subsidiary of the Company.

    

    Section 1.13.  "Enrollment Period" means the period
designated by Global Benefits or the Nominating and Corporate Governance
Committee each year; provided however, that such period shall end on or before
December 31 of each year

    

    Section 1.14.  "Exchange Act" means the Securities
Exchange Act of 1934, as amended.

    

    
      	
               
      

            	
              Section
      1.15.  “Grandfathered Account” means
      the value of the Interest Account and Stock Account of each Participant on
      December 31, 2004, including (i) any amounts the Participant is entitled
      to receive during 2004 that have not be credited to a Participant’s
      Interest Account or Stock Account as of December 31, 2004, and (ii) any
      earnings accruing to the Participant’s Grandfathered
      Account.  For purposes of this Plan, no portion of a
      Participant’s Grandfathered Account shall be subject to Code Section
      409A.  For purposes of this Plan, the “Non-Grandfathered
      Account” shall equal the value of the Participant’s Interest Account and
      Stock Account on the date of the Participant’s Termination of Employment,
      minus the amount of the Participant’s Grandfathered
      Account.  The Non-Grandfathered Account shall be subject to Code
      Section 409A.

            

    

    

    
      	
               
      

            	
              Section
      1.16.  “Hardship”
      means an emergency event beyond the Participant’s control which would
      cause the Participant severe financial hardship if the payment of amounts
      from his or her Interest Account or Stock Account were not
      approved.  Any distribution for Hardship shall be limited to
      distributions from the Participant’s Grandfathered
  Account.

            

    

    

    
      	
               
      

            	
              Section
      1.17.  “Initial Enrollment Period” means, for an Eligible
      Director who is newly appointed to serve as a Director, the period
      beginning prior to such date of appointment and ending 30 days after the
      date of such appointment.   An Eligible Director who is
      reappointed to the Board by the Company may not enroll during the Initial
      Enrollment Period if he was eligible to participate in this Plan at any
      time during the twenty-four (24) month period prior to his
      reappointment.

            

    

    

    Section 1.18.  "Interest Account" means the account
established by the Company for each Participant for compensation deferred
pursuant to this Plan and which shall bear interest as described in Section 4.1
below. The maintenance of individual Interest Accounts is for bookkeeping
purposes only.  If applicable, each Interest Account shall be further
sub-divided into a Grandfathered Account and Non-Grandfathered
Account.

    

    Section 1.19.  "Interest Rate" means the monthly
average of bank prime lending rates to most favored customers as published in
The Wall Street Journal,
such average to be determined as of the last day of each
month.

     

     

    
      
        189

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section 1.20.  "Market Value" means the closing
price of the shares of Common Stock on the New York Stock Exchange on the day on
which such value is to be determined or, if no such shares were traded on such
day, said closing price on the next business day on which such shares are
traded; provided, however, that if at any relevant time the shares of Common
Stock are not traded on the New York Stock Exchange, then "Market Value" shall
be determined by reference to the closing price of the shares of Common Stock on
another national securities exchange, if applicable, or if the shares are not
traded on an exchange but are traded in the over-the-counter market, by
reference to the last sale price or the closing "asked" price of the shares in
the over-the-counter market as reported by the National Association of
Securities Dealers Automated Quotation System (NASDAQ) or other national
quotation service.

    

    Section 1.21.  "Plan"
means this Fifth Amended and Restated Eastman Directors' Deferred Compensation
Plan.

    

    Section 1.22.  "Participant" means an Eligible
Director who elects for one or more years to defer compensation pursuant to this
Plan or who has non-elective deferrals contributed to his Account by the
Company.

    

    Section 1.23.  "Stock Account" means the account
established by the Company for each Participant, the performance of which shall
be measured by reference to the Market Value of Common Stock. The maintenance of
individual Stock Accounts is for bookkeeping purposes only.  If
applicable, each Stock Account shall be further sub-divided into a Grandfathered
Account and Non-Grandfathered Account.

    

    Section 1.24. “Unforeseeable Emergency” means severe
financial hardship of the Participant resulting from an illness or accident of
the Participant, the Participant’s spouse, the Participant’s beneficiary or a
dependent (as defined in Section 152 of the Code without regard to Section
152(b)(1), (b)(2) and (d)(1)(B), loss of the Participant’s property due to
casualty (including the need to rebuild a home not otherwise covered by
insurance), or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the
Participant.  Except as otherwise provided herein, the purchase of a
home and the payment of college tuition are not unforeseeable
emergencies.  Any distribution for an Unforeseeable Emergency shall be
limited to amounts in a Participant’s Non-Grandfathered Account.

    

    Section 1.25.  "Valuation Date" means each business
day.

    

    Section
2.  Deferral of
Compensation. An Eligible Director may elect to defer receipt of all or
any portion of his or her Deferrable Amount to his or her Interest Account
and/or Stock Account within such Eligible Director’s Account for the applicable
Class Year. No deferral shall be made of any compensation payable after
termination of the Eligible Director's service on the Board.

    

    Section
3.  Time of Election of
Deferral. An Eligible Director who wishes to defer compensation must
irrevocably elect to do so during the applicable Enrollment Period. The
Enrollment Period shall end prior to the first day of the service year with
respect to the applicable Deferrable Amount.  The “service year” is
the Eligible Director’s taxable year in which the services related to the
Deferrable Amount will be performed by the Eligible
Director.  Elections shall be made annually for each Class
Year.

    

    Section
4.  Hypothetical
Investments.

     

    Section 4.
1.  Interest Account.
Amounts in a Participant's Interest Account are hypothetically invested in an
interest bearing account which bears interest computed at the Interest Rate,
compounded monthly.

     

    
      Section
4.2.  Stock
Account.  Amounts in a Participant's Stock Account are
hypothetically invested in units of Common Stock. Amounts deferred into a Stock
Account are recorded as units of Common Stock, and fractions thereof, with one
unit equating to a single share of Common Stock. Thus, the value of one unit
shall be the Market Value of a single share of Common Stock. The use of units is
merely a bookkeeping convenience; the units are not actual shares of Common
Stock. The Company will not reserve or otherwise set aside any Common Stock for
or to any Stock Account.

       

    

    
      
        190 

      

      
         

        
          

        

      

      
         

      

    

    

    Section
5.  Deferrals and Crediting
Amounts to Accounts.

    

    Section
5.1.  Manner of Electing
Deferral. An Eligible Director may elect to defer compensation for each
Class Year by completing the deferral election process established by Global
Benefits.   For each Class Year, each Eligible Director shall
elect, in the manner specified by Global Benefits: (i) the amount of Deferrable
Amount to be deferred; (ii) the portion of the deferral to be credited to the
Participant's Interest Account and Stock Account, respectively; and (iii) the
manner of payment. An election to defer compensation shall be irrevocable
following the end of the applicable Enrollment Period, but the portion of the
deferral to be credited to the Participant's Interest Account and Stock Account,
respectively, may be reallocated by the Participant in the manner specified by
the Nominating and Corporate Governance Committee or its authorized designee
through and including the business day immediately preceding the date on which
the deferred amount is credited to the Participant's Accounts pursuant to
Section 5.2.

    

    Section
5.2.  Crediting of Amounts to
Accounts.  Except as otherwise provided in this Section,
amounts to be deferred each Class Year shall be credited to the Participant's
Interest Account and/or Stock Account, as applicable, as of the date such
amounts are otherwise payable.  In the event that the Participant has
failed to make an election, amounts to be deferred each Class Year shall be
credited to the Participant’s Interest Account. Notwithstanding the foregoing,
each and every Deferrable Amount, when initially credited to the Participant’s
Account, shall be held in a Participant’s Interest Account until the next date
that dividends are paid on Common Stock (see Section 7.6 of this Plan); 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, provided
that such transfer shall be subject to the restrictions set forth in Section
7.2.

    

    Section
6.  Deferral
Period.   Subject to Sections 9, 10 and 17 hereof, the
compensation which a Participant elects to defer under this Plan shall be
deferred until the Participant dies or ceases to serve as a member of the Board.
Any such election shall be made during the applicable Enrollment Period in the
manner established by Global Benefits. The payment of a Participant's account
shall be governed by Sections 8, 9, 10 and 17, as applicable.

    

    Section
7.  Investment in the Stock
Account and Transfers Between Accounts.

    

    Section
7.1.   Election Into the Stock
Account. If a Participant elects to defer compensation into his or her
Stock Account, his or her Stock Account shall be credited, as of the date
described in Section 5.2, with that number of units of Common Stock, and
fractions thereof, obtained by dividing the dollar amount to be deferred into
the Stock Account by the Market Value of the Common Stock as of such
date.

    

    Section
7.2.  Transfers Between
Accounts.  Except as otherwise provided in this Section, a
Participant may direct that all or any portion, designated as a whole dollar
amount, of the existing balance of one of his or her Accounts be transferred to
his or her other Account, effective as of (i) the date such election is made, if
and only if such election is made prior to the close of trading on the New York
Stock Exchange on a day on which the Common Stock is traded on the New York
Stock Exchange, or (ii) if such election is made after the close of trading on
the New York Stock Exchange on a given day or at any time on a day on which no
sales of Common Stock are made on the New York Stock Exchange, then on the next
business day on which the Common Stock is traded on the New York Stock Exchange
(the date described in (i) or (ii), as applicable, is referred to hereinafter as
the election's "Effective Date"). Such election shall be made in the manner
specified by the Nominating and Corporate Governance Committee or its authorized
designee; provided, however, that a Participant may only elect to transfer
between his or her Accounts if he or she has made no election within the
previous six months to effect an "opposite way" fund-switching (i.e. transfer out
versus transfer in) transfer into or out of the Stock Account or any other
"opposite way" intraplan transfer or plan distribution involving a Company
equity securities fund which constitutes a "Discretionary Transaction" as
defined in Rule 16b-3 under the Exchange Act.

    

    In
addition, and notwithstanding the foregoing, a Participant’s Deferrable Amount
that is initially allocated to his or her Interest Account as provided in
Section 5.2, shall be transferred, following such initial allocation, from the
Participant’s Interest Account to his or her Stock Account in the manner
provided in Section 5.2.

    
      
        191 

      

      
         

        
          

        

      

      
         

      

    

    

    Section
7.3.  Transfer Into the Stock
Account.  If a Participant elects pursuant to Section 7.2 to
transfer an amount from his or her Interest Account to his or her Stock Account,
effective as of the election's Effective Date, (i) his or her Stock Account
shall be credited with that number of units of Common Stock, and fractions
thereof, obtained by dividing the dollar amount elected to be transferred by the
Market Value of the Common Stock on the Valuation Date immediately preceding the
election's Effective Date; and (ii) his or her Interest Account shall be reduced
by the amount elected to be transferred.

    

    Section
7.4.  Transfer Out of the Stock
Account. If a Participant elects pursuant to Section 7.2 to transfer an
amount from his or her Stock Account to his or her Interest Account, effective
as of the election's Effective Date, (i) his or her Interest Account shall be
credited with a dollar amount equal to the amount obtained by multiplying the
number of units to be transferred by the Market Value of the Common Stock on the
Valuation Date immediately preceding the election's Effective Date; and (ii) his
or her Stock Account shall be reduced by the number of units elected to be
transferred.

    

    Section
7.5.  Dividend
Equivalents.  Effective as of the payment date for each cash
dividend on the Common Stock, the Stock Account of each Participant who had a
balance in his or her Stock Account on the record date for such dividend shall
be credited with a number of units of Common Stock, and fractions thereof,
obtained by dividing (i) the aggregate dollar amount of such cash dividend
payable in respect of such Participant's Stock Account (determined by
multiplying the dollar value of the dividend paid upon a single share of Common
Stock by the number of units of Common Stock held in the Participant's Stock
Account on the record date for such dividend); by (ii) the Market Value of the
Common Stock on the Valuation Date immediately preceding the payment date for
such cash dividend.

    

    Section
7.6.  Stock
Dividends.  Effective as of the payment date for each stock
dividend on the Common Stock, additional units of Common Stock shall be credited
to the Stock Account of each Participant who had a balance in his or her Stock
Account on the record date for such dividend. The number of units that shall be
credited to the Stock Account of such a Participant shall equal the number of
shares of Common Stock, and fractions thereof, which the Participant would have
received as stock dividends had he or she been the owner on the record date for
such stock dividend of the number of shares of Common Stock equal to the number
of units credited to his or her Stock Account on such record date.

    

    Section
7.7.  Recapitalization. If,
as a result of a recapitalization of the Company, the outstanding shares of
Common Stock shall be changed into a greater number or smaller number of shares,
the number of units credited to a Participant's Stock Account shall be
appropriately adjusted on the same basis.

    

    Section
7.8.  Distributions.  Amounts
in respect of units of Common Stock may only be distributed out of the Stock
Account by transfer to the Interest Account (pursuant to Sections 7.2 and 7.4 or
7.10) or withdrawal from the Stock Account (pursuant to Section 8, 9, 10, or
17), and shall be distributed in cash. The number of units to be distributed
from a Participant's Stock Account shall be valued by multiplying the number of
such units by the Market Value of the Common Stock as of the Valuation Date
immediately preceding the date such distribution is to occur.

    

    Section
7.9.  Responsibility for
Investment Choices.  Each Participant is solely responsible for
any decision to defer compensation into his or her Stock Account and to transfer
amounts to and from his or her Stock Account and accepts all investment risks
entailed by such decision, including the risk of loss and a decrease in the
value of the amounts he or she elects to defer into his or her Stock
Account.

    

    Section
7.10. Liquidation of Stock
Account.  Upon the date that a Participant ceases to serve on
the Board, the entire balance, if any, of the Participant's Stock Account shall
automatically be transferred to his or her Interest Account. For purposes of
valuing the units of Common Stock subject to such a transfer, the approach
described in Section 7.8 shall be used.

    

    Section
8.  Payment of Deferred
Compensation.

    

    Section 8. 1.
Background. No withdrawal may be made from a Participant's Account except
as provided in this Section 8 and Sections 9, 10 and 17.

     

     

    
      
        192

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section 8.2. Manner of
Payment. Payment of a Participant's Account shall be made in a single
lump sum or annual installments as elected by each Participant pursuant to this
Section 8 for each Class Year.  The maximum number of annual
installments is ten.  All payments from this Plan shall be made in
cash.  Each annual installment shall be treated as a separate
payment.

    

    Section
8.3. Timing of
Payments.

    

    
      	
              (a)  

            	
              Payments
      shall commence in any year elected by the Participant pursuant to this
      Section 8, up through the tenth year following the year in which the
      Participant ceases to be a member of the Board for any reason, but in no
      event may a Participant elect to have payment commence later than the year
      the Participant reaches age 71.

            

    

    

    If the
Participant elected to receive his or her payment in annual installments,
payments shall commence on the first business day of the month following the
Participant’s termination of service with the Board (“Board Termination Date”),
or as soon as administratively possible, but not later than 60 days following
the Participant’s Board Termination Date, and the remaining installment payments
will be paid on the anniversary of the initial payment date.

    

    If the
Participant elected to receive his or her payment in a lump sum, payment shall
be made on the first business day of the month following the Participant’s Board
Termination Date, or as soon as administratively possible, but not later than 60
days following the Participant’s Board Termination Date.

    

    
      	
              (b)  

            	
              The
      timing of the distribution of a Participant’s Non-Grandfathered Account
      may not be accelerated, except in the event of an Unforeseeable Emergency
      or other permissible acceleration of distribution under Treas. Reg.
      Section 1.409A-3(j)(4)(iii) (conflicts of interest), (j)(4)(vii) (payment
      upon income inclusion under Section 409A), (j)(4)(ix) (plan terminations
      and liquidation), (j)(4)(xi) (payment of state, local or foreign taxes),
      (j)(4)(xiii) (certain offsets) and (i)(4)(xiv) (bona fide
      disputes).

            

    

    

    Any
change which delays the timing of the distributions or changes the form of
distribution from the Participant’s Non-Grandfathered Account may only be made
by a written agreement signed by the Nominating and Corporate Governance
Committee and the Participant and only if the following requirements are
met:

    

    
      
        	
                (i) 
      

              	
                Any
      election to change the time and form of distribution may not take effect
      until at least 12 months after the date on which the election is
      made;

              

      

    

    
      
        	
                 
      

              	
                 

              
	
                 (ii) 
      

              	 Other
      than in the event of death, the first payment with respect to such
      election must be deferred for a period of at least five years from the
      date such payment would otherwise be made; and
	 	 
	
                 (iii) 

              	 Any
      election related to a payment to be made at a specified time may not be
      made less than 12 months prior to the date of the first
      scheduledpayment.

      

    

                   
    

    
      	
               
      

            	
              Any
      change to the time or form of distribution from the Participant’s
      Grandfathered Account may only be made by a written agreement signed by
      the Nominating and Corporate Governance Committee and the Participant and
      such change will be effective only if it is made at least 12 months before
      the Participant’s Board Termination
Date.

            

    

    

    Section 8.4.  Default Payment Distribution
Elections.  If a Participant does not have a valid election in
force on the Participant’s Board Termination Date for any Class Year, then the
value of his Class Year Account(s) for which a valid distribution election does
not exist shall be paid in a single lump sum to the Participant on the first
business day of the month following the Participant’s Board Termination
date

    
      
        193 

      

      
         

        
          

        

      

      
         

      

    

    

    Section
8.5. Valuation.  If
a Participant elects installments, the amount of each payment shall be equal to
the value, of the preceding Valuation Date, of the Participant's Class Year
Account, divided by the number of installments remaining to be
paid.

    

    Section
9.  Payment of Deferred
Compensation After Death.  If a Participant dies prior to
complete payment of his or her Accounts, the balance of such Accounts, valued as
of the Valuation Date immediately preceding the date payment is made, shall be
paid in a single, lump-sum payment to: (i) the beneficiary or contingent
beneficiary designated by the Participant on forms supplied by the Nominating
and Corporate Governance Committee no later than ninety (90) days after the date
the Employee Service Center is notified of the Participant’s death; or, in the
absence of a valid designation of a beneficiary or contingent beneficiary, (ii)
the Participant's estate within 30 days after appointment of a legal
representative of the deceased Participant.

    

    Section
10.  Acceleration of Payment in
Certain Circumstances.

     

    Section
10.1.  Acceleration
of Payment for Hardship or Unforeseeable Emergency.   
Hardship distributions
shall be limited to amounts in a Participant’s Grandfathered Account and
distributions for an Unforeseeable Emergency shall be limited to amounts in a
Participant’s Non-Grandfathered Account. Upon written approval from the
Compensation Committee, a Participant may be permitted to receive all or part of
his or her Accounts if the Compensation Committee determines that the
Participant has suffered a Hardship or Unforeseeable Emergency.  The
amount distributed may not exceed the amount necessary to satisfy the Hardship
or Unforeseeable Emergency plus amounts necessary to pay taxes reasonably
anticipated as a result of the distribution, after taking into account the
extent to which such Hardship or Unforeseeable Emergency is or may be
relieved through reimbursement or compensation by insurance or otherwise by
liquidation of the Participant’s assets (to the extent liquidation of such
assets would not itself cause severe financial hardship.

     

    
      Section 10.2. 
Payment to
Individuals  Any participant in this Plan may at his or her
discretion withdraw at any time all or part of that person's Grandfathered
Account balance under this Plan; provided, if this option is exercised the
individual will forfeit to the Company 10% of his or her account balance, and
will not be permitted to participate in this Plan for a period of 36 months from
date any payment to a Participant is made under this section.

    

     

    
      Section 10.3. Accelerated
Payment  If under this Plan one-half or more of the
Participants with a Grandfathered Account or one-fifth or more of the
Participants with Grandfathered Accounts totaling one-half or more of the value
of all benefits owed, exercise their option for immediate distribution in any
consecutive six-month period this will trigger immediate payment to all
Participants of all benefits owed under the terms of this Plan from the
Grandfathered Accounts, immediate payout under this section will not involve
reduction of the amounts paid to Participants as set forth in section
10.2.  Any individual that has been penalized in this six-month period
for electing immediate withdrawal will be paid that penalty, and continuing
participation will be allowed, if payout to all Participants under this section
occurs.  Solely for purposes of this Section 10.3, “benefits” shall
refer to amounts held in Grandfathered Accounts under this Plan.

       

      
        Section 10.4. 
Payments to "Insiders" under
Exchange Act Section 16. A Section 16 Insider may only receive a withdrawal
from the Grandfathered Account portion of his or her Stock Account pursuant to
this Section 10 if he or she has made no election within the previous six months
to effect a fund-switching transfer into the Stock Account or the Eastman Stock
Fund of the Eastman Investment and Employee Stock Ownership Plan or any other
"opposite way" intra-plan transfer into a Company equity securities fund which
constitutes a "Discretionary Transaction" as defined in Rule 16b-3 under the
Exchange Act.  If such a distribution occurs while the Participant is
employed by the Company or any of its U.S. Subsidiaries, any election to defer
compensation for the year in which the Participant receives a withdrawal shall
be ineffective as to compensation earned for the pay period following the pay
period during which the withdrawal is made and thereafter for the remainder of
such year and shall be ineffective as to any other compensation elected to be
deferred for such year.

      

    

     

    
      
        194

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Section
11.  Participant's Rights
Unsecured. The benefits payable under this Plan shall be paid by the
Company each year out of its general assets. To the extent a Participant
acquires the right to receive a payment under this Plan, such right shall be no
greater than that of an unsecured general creditor of the Company. No amount
payable under this Plan may be assigned, transferred, encumbered or subject to
any legal process for the payment of any claim against a Participant. No
Participant shall have the right to exercise any of the rights or privileges of
a shareowner with respect to units credited to his or her Stock
Account.

    

    Section
12.  No Right to Continued
Service.  Participation in this Plan shall not give any
Participant any right to remain a member of the Board.

    

    Section
13.  Statement of
Account.  Statements will be made available no less frequently
than annually to each Participant or his or her estate showing the value of the
Participant's Accounts.

    

    Section
14.  Deductions. The
Company will withhold to the extent required by law all applicable income and
other taxes from amounts deferred or paid under this Plan.

    

    Section
15.  Administration.

    

    Section
15.1. Responsibility.  Except
as expressly provided otherwise herein, the Nominating and Corporate Governance
Committee shall have total and exclusive responsibility to control, operate,
manage and administer this Plan in accordance with its terms.

    

    Section
15.2. Authority of the Nominating
and Corporate Governance Committee.  The Nominating and
Corporate Governance Committee shall have all the authority that may be
necessary or helpful to enable it to discharge its responsibilities with respect
to this Plan. Without limiting the generality of the preceding sentence, the
Nominating and Corporate Governance Committee shall have the exclusive right: to
interpret this Plan, to determine eligibility for participation in this Plan, to
decide all questions concerning eligibility for and the amount of benefits
payable under this Plan, to construe any ambiguous provision of this Plan, to
correct any default, to supply any omission, to reconcile any inconsistency, and
to decide any and all questions arising in the administration, interpretation,
and application of this Plan.

    

    Section
15.3. Discretionary
Authority.  The Nominating and Corporate Governance Committee
shall have full discretionary authority in all matters related to the discharge
of its responsibilities and the exercise of its authority under this Plan
including, without limitation, its construction of the terms of this Plan and
its determination of eligibility for participation and benefits under this Plan.
It is the intent that the decisions of the Nominating and Corporate Governance
Committee and its action with respect to this Plan shall be final and binding
upon all persons having or claiming to have any right or interest in or under
this Plan and that no such decision or action shall be modified upon judicial
review unless such decision or action is proven to be arbitrary or
capricious.

    

    Section
15.4. Delegation of
Authority.  The Nominating and Corporate Governance Committee
may delegate some or all of its authority under this Plan to any person or
persons provided that any such delegation be in writing.

    

    Section
15.5. Restriction on Authority of
the Nominating and Corporate Governance Committee.  Under any
circumstances where the Nominating and Corporate Governance Committee is
authorized to make a discretionary decision concerning a payment of any type
under this Plan to a member of such Committee, the member of the Committee who
is to receive such payment shall take no part in the deliberations or have any
voting or other power with respect to such decision.

    

    Section
16.  Amendment.  The
Board may suspend or terminate this Plan at any time. Notwithstanding the
foregoing, termination with respect to the portion of this Plan that includes
the Non-Grandfathered Accounts must comply with the requirements of Treas. Reg.
Section 1.409A-3(j)(4)(ix).  In addition, the Board may, from time to
time, amend this Plan in any manner without shareowner approval; provided,
however, that the Board may condition any amendment on the approval of
shareowners if such approval is necessary or advisable with respect to
tax,

    
      
        195 

      

      
         

        
          

        

      

      
         

      

    

    

    securities,
or other applicable laws. No amendment, modification, or termination shall,
without the consent of a Participant, adversely affect such Participant's
accruals in his or her Accounts as of the date of such amendment, modification,
or termination.

     

    Section
17.  Change
in Control.

     

    Section
17.1. Background.  The
terms of this Section 17 shall immediately become operative, without further
action or consent by any person or entity, upon a Change in Control, and once
operative shall supersede and control over any other provisions of this
Plan.

     

    Section
17.2. Acceleration
of Payment Upon Change in Control.  Upon the occurrence of a
Change in Control, each Participant, whether or not he or she is still a
Director, shall be paid in a single, lump-sum cash payment the balance of his or
her Accounts as of the Valuation Date immediately preceding the date payment is
made. Such payment shall be made as soon as practicable, but in no event later
than 90 days after the date.

     

    
      Section
17.3. Amendment
On or After Change in Control. On or after a Change in Control, no
action, including, but not by way of limitation, the amendment, suspension or
termination of this Plan, shall be taken which would affect the rights of any
Participant or the operation of this Plan with respect to the balance in the
Participant's Accounts. 

    

     

    Section
17.4. Attorney
Fees.     The Company shall pay all reasonable
legal fees and related expenses incurred by a participant in seeking to obtain
or enforce any payment, benefit or right such participant may be entitled to
under this plan after a Change in Control; provided, however, the Participant
shall be required to repay any such amounts to the Company to the extent a court
of competent jurisdiction issues a final and non-appealable order setting forth
the determination that the position taken by the Participant was frivolous or
advanced in bad faith.  For purposes of this Section 17.4, the legal
fees and related expenses must be incurred by the Participant within 5 years of
the date the Change in Control occurs.  All reimbursements must be
paid to the Participant by the Company no later than the end of the tax year
following the tax year in which the expense is
incurred.

     

    Section
18.  Governing
Law.  This Plan shall be construed, governed and enforced in
accordance with the law of Tennessee, except as such laws are preempted by
applicable federal law.

     

    Section
19.  Successors
and Assigns.  This Plan shall be binding upon the successors
and assigns of the parties hereto.

     

    Section
20.  Compliance
with SEC Regulations.  It is the Company's intent that this
Plan comply in all respects with Rule 16b-3 of the Exchange Act, and any
regulations promulgated thereunder. If any provision of this Plan is found not
to be in compliance with such rule, the provision shall be deemed null and void.
All transactions under this Plan, including, but not by way of limitation, a
Participant's election to defer compensation under Section 7
and  withdrawals in the event of Hardship or Unforeseeable Emergency
under Section 10, shall be executed in accordance with the requirements of
Section 16 of the Exchange Act, as amended and any regulations promulgated
thereunder. To the extent that any of the provisions contained herein do not
conform with Rule 16b-3 of the Exchange Act or any amendments thereto or any
successor regulation, then the Nominating and Corporate Governance Committee may
make such modifications so as to conform this Plan to the Rule's
requirements.

    

    
      
        196

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00153-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00153-of-00352.parquet"}]]