Document:

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                                                                   EXHIBIT 10.03

                            EASTMAN CHEMICAL COMPANY

                            EASTMAN PERFORMANCE PLAN
                (AMENDED AND RESTATED EFFECTIVE DECEMBER 1, 1999)
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ARTICLE 1.         INTRODUCTION

The Eastman Performance Plan, as set forth in this document, has been approved
by the Board of Directors of Eastman Chemical Company (the "Company") as a
variable compensation program which provides eligible employees with tangible
recognition for their contributions to the success of the Company. The Eastman
Performance Plan is also intended to secure the full deductibility of Plan
Payouts to Covered Employees, and all cash compensation payable hereunder to
such persons is intended to qualify as "performance based compensation", as
described in Section 162(m) of the Internal Revenue Code of 1986, as amended.

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

ARTICLE 2.         DEFINITIONS

2.01     BOARD.  The Board of Directors of the Company.

2.02     RESERVED.

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

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

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

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

2.07     RESERVED.

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

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shall consist of not less than two members, each of whom shall be an "outside
director" as that term is used in Code Section 162(m) and the regulations
promulgated thereunder.

2.09     COST OF CAPITAL. The Cost of Capital reflects the cost of debt and the
cost of equity, expressed as a percentage reflecting the percentage of interest
charged on debt and the percentage of expected return on equity.

2.10     COVERED EMPLOYEE.  An individual defined in Code Section 162(m)(3).

2.11     EARNINGS FROM CONTINUING OPERATIONS. Earnings from Continuing
Operations shall be defined as the total sales of the Company minus the costs of
all operations of any nature used to produce such sales, including taxes, plus
after-tax interest associated with the Company's capital debt.

2.12     RESERVED.

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

2.14     RESERVED.

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

2.16     RESERVED.

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

2.18     PARTICIPATING AFFILIATES. Participating Affiliates shall signify all
those companies or organizations which from time to time accept the provisions
of the Plan as applying to the employees of such company or organization.

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

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

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

2.21     PERFORMANCE INDICATOR. The Performance Indicator shall mean the Return
on Capital minus the Cost of Capital. Such calculation shall be expressed as a
percentage, which shall be calculated to the third place after the decimal point
(i.e., xx.xxx%), and then rounded to the second place after the decimal point
(i.e., xx.xx%).

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

2.23     PLAN.  The Eastman Performance Plan.

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

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

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

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

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

2.27     RETURN ON CAPITAL. The Return on Capital shall mean the return produced
by funds invested in the Company and shall be determined as Earnings from
Continuing Operations, as defined in Section 2.11, divided by the Average
Capital Employed. Average Capital Employed shall be derived by adding the
Company's capital debt plus equity at the close of the last day of the year
preceding the Performance Year, to the Company's capital debt plus equity at the
close of the last day of the present Performance Year, with the resulting sum
being divided by two. Capital debt is defined as the sum of Borrowing by the
Company Due Within One Year and Long-Term Borrowing, as designated on the
Company's balance sheet. The resulting ratio shall be multiplied by One Hundred
(100) in order to convert such to a percentage. Such percentage shall be
calculated to the third place after the decimal point (i.e., xx.xxx%), and then
rounded to the second place after the decimal point (i.e., xx.xx%).

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

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

ARTICLE 3.  ELIGIBILITY

3.01     BASIC ELIGIBILITY

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

      (a)      Meet all of the following requirements;

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

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

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

         or

     (b) Meet the requirements of Section 3.02.

3.02     SPECIAL ELIGIBILITY

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

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

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

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

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

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

     (d)  All of the following conditions are met: (i) an employee's
     employment with the Company is terminated during the Performance Year
     under a layoff as defined in Section 4.01 of TAP, a special separation
     as defined in Section 4.02 of TAP, or a divestiture as defined in
     Section 4.03 of TAP; (ii) such employee does not become entitled to a
     Termination Allowance Benefit under TAP; and (iii) management of the
     Company nevertheless resolves in writing that such employee shall be
     entitled to participate in the Performance Plan for such Performance
     Year upon meeting such conditions as management shall determine in its
     sole discretion. For this purpose, "management of the Company" shall
     mean any of the following: the Board of Directors of the Company, a
     committee of the Board; a committee of the Company responsible for
     benefits plans oversight; or an officer of the Company; or

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

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

3.03     TRANSFER INTO PLAN

Employees who transfer to the Company during the course of any Performance Year
from a subsidiary or affiliated company which is not a Participating Affiliate
in the Plan will be eligible for the Plan Payout payable for the

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Performance Year if they satisfy the eligibility requirements of Section 3.01 or
3.02 above. Earnings and allowances received from such subsidiary or affiliated
company are not included in Participating Earnings.

3.04     TRANSFER FROM PLAN

Employees who are transferred during any Performance Year from the Company to
employment with a subsidiary or affiliated company which is not a Participating
Affiliate will qualify for the Plan Payout payable for that Performance Year.
However, earnings and allowances received from such subsidiary or affiliated
company are not included in Participating Earnings.

3.05     EXCLUSIONS

Limited Service Employees, Special Program Employees, College Cooperative
Employees, and all other employees of the Company and Participating Affiliates
not defined as Regular Full-Time Employees or Regular Part-Time Employees are
not eligible to receive a Plan Payout as authorized herein unless reclassified
before December 31 of the Performance Year into a class of employees eligible to
receive a Plan Payout in accordance with Sections 3.01 and 3.02. For such
reclassified employees, except those employees who were classified as Limited
Service Employees prior to such reclassification, earnings before
reclassification are included in Participating Earnings.

3.06     PARTICIPATION OF RECENTLY HIRED EMPLOYEES

Notwithstanding any language to the contrary contained herein, during the
Performance Year in which an Eligible Employee is first hired by the Company or
by a Participating Affiliate, and the next Performance Year, Eligible Employees
shall receive prorated allocations of the Plan Payout, as follows. For the
Performance Year of the Eligible Employee's date of hire, the Eligible Employee
shall receive an allocation equal to Twenty-Five Percent (25%) of the Eligible
Employee's Plan Payout as calculated under Section 4.06(a). For the first full
Performance Year after the Eligible Employee's date of hire, the Eligible
Employee shall receive an allocation equal to Fifty Percent (50%) of that
Eligible Participant's Plan Payout as calculated under Section 4.06(a). Such
allocation made shall be paid entirely in cash pursuant to the provisions of
Section 5.01.

3.07     TERMINATION OF EMPLOYMENT SUBSEQUENT TO PERFORMANCE YEAR

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

3.08     ELIGIBILITY IN CASE OF DEATH

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

ARTICLE 4. DETERMINATION OF PLAN PAYOUT

4.01     IN GENERAL

The Plan Payout, if any, is intended to reflect the financial performance of the
Company over the course of the Performance Year. Financial performance shall be
measured in terms of the Performance Indicator. Such Plan

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Payout, if any, shall be calculated as determined under Section 4.06. The
resulting Plan Payout for each Eligible Employee shall be distributed pursuant
to the provisions of Article 5 below.

4.02     DETERMINATION OF PERFORMANCE INDICATOR

No later than the first day of a Performance Year (or such later date as may be
permitted by Code Section 162(m)), the Compensation Committee shall establish in
writing for that Performance Year, the Performance Indicator (including the Cost
of Capital for the Performance Year), the Payout Basis, the General Payout
Table, and the formula or method for calculating the Plan Payout payable to each
Eligible Employee if certain levels of the Performance Indicator are attained.

The Performance Indicator for any Performance Year shall be the Return on
Capital (as defined in Section 2.27) minus the Cost of Capital (as defined in
Section 2.09), expressed as a percentage, which shall be calculated to the third
place after the decimal point (i.e., xx.xxx%), and then rounded to the second
place after the decimal point (i.e., xx.xx%). Except as otherwise provided in
the next two sentences, measurement of the Company's performance against the
performance goals established by the Committee shall be objectively determinable
and, to the extent they are expressed in standard accounting terms, shall be
determined according to generally accepted accounting principles as in existence
on the date on which the performance goals are established and without regard to
any changes in such principles after such date. With respect to participants
other than Covered Employees, in determining whether the performance goals
established by the Committee have been met, the Committee may in its discretion
adjust the financial results for a Performance Year to exclude the effect of
unusual charges or income items or other events (including, without limitation,
acquisitions or divestitures), which are distortive of financial results for the
Performance Year. The Committee may in its discretion reduce (but not increase)
the resulting award to Covered Employees if deemed necessary to exclude the
effect of unusual charges or income items or other events (including, without
limitation, acquisitions or divestitures), which are distortive of financial
results for the Performance Year. No adjustment will be made with respect to a
Covered Employee if the Committee determines that such adjustment will cause an
award to such Covered Employee to fail to qualify as performance-based
compensation under Section 162(m).

4.03     DETERMINATION OF PAYOUT BASIS

The Payout Basis, expressed as a percentage as follows, shall be determined
according to the Payout Table shown in Section 4.04. If the Return on Capital
minus Cost of Capital is not an even percentage, then the exact Payout Basis
shall be calculated by straight line interpolation, and shall be calculated to
the third place after the decimal point (i.e., xx.xxx%), and then rounded to the
second place after the decimal point (i.e., xx.xx%).

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4.04     PAYOUT TABLE

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

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

4.05     BOARD ELECTION REGARDING 0% PAYOUT BASIS

Neither the Board nor the Compensation Committee shall have discretion to
increase or reduce the Plan Payout determined according to this Article 4.

4.06     CALCULATION OF INDIVIDUAL PLAN PAYOUT

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

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

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

The maximum annual Plan Payout to any individual is $500,000.

4.07     ESTIMATED PLAN PAYOUT

The Vice President and Chief Financial Officer, or his delegate shall, on or
about the close of each quarter of the Company's fiscal year, estimate the
annual Payout Basis for the Plan based upon financial performance for the

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Performance Year to date. The estimates thus generated shall subsequently be
communicated to Eligible Employees in such a manner as determined by the
Company.

4.08     FINAL DETERMINATIONS BY BOARD AND BY COMPENSATION COMMITTEE

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

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

4.09     SHAREOWNER APPROVAL

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

ARTICLE 5.          MECHANISM OF PLAN PAYOUT

5.01     PLAN PAYOUT

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

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

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

5.03     RESERVED

5.04     DEFERRAL OF AWARD

Notwithstanding anything in this Article 5 to the contrary, if the Compensation
Committee determines that the current payment of any award under this Article 5
could result in the Eligible Employee's receiving compensation in excess

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of the maximum amount deductible by the Company for Federal income tax purposes,
then such Committee in its sole discretion may determine that such award shall
not be paid currently, and instead shall be transferred to the Employee's
account under the Eastman Executive Deferred Compensation Plan (and thereafter
shall be subject to the provisions of the Executive Deferred Compensation Plan).

ARTICLE 6.  CLAIM AGAINST PERFORMANCE PAYMENT

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

ARTICLE 7.  INABILITY TO LOCATE PAYEE

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

ARTICLE 8.  PLAN DOCUMENT CONTROLS

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

ARTICLE 9.  RIGHT TO AMEND OR TERMINATE

Although the Company intends to continue the Plan indefinitely, the Plan may be
terminated, suspended or modified, in whole or in part, at any time for any
reason by action of the Compensation Committee. No amendment may be made to the
class of individuals who are eligible to participate in the Plan, the
performance criteria specified in Article 4, or the maximum annual Plan Payout
payable to any individual, without shareowner approval unless shareowner
approval is not required in order for Plan Payouts paid to Covered Employees to
constitute qualified performance-based compensation under Section 162(m) of the
Code.

ARTICLE 10.  NO EMPLOYMENT RIGHTS

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

ARTICLE 11.  CONCLUSIVENESS OF RECORDS

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

ARTICLE 12.  ADMINISTRATION; ACTIONS BY THE COMPANY

All members of the Compensation Committee shall be persons who qualify as
"outside directors" as defined under Section 162(m) of the Code. The Committee
shall have full power and authority to administer and interpret the

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

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

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                                   APPENDIX A

                  PARTICIPATING AND NON-PARTICIPATING EARNINGS

PARTICIPATING EARNINGS

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

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

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NON-PARTICIPATING EARNINGS

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

                                       100<PAGE>   1
                                                                  EXHIBIT 10.10

                              AMENDED AND RESTATED
                  EASTMAN EXECUTIVE DEFERRED COMPENSATION PLAN

                  Preamble. The 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 the Plan, each Eligible Employee is
annually given an opportunity to elect to defer payment of part of his or her
cash compensation. This Plan also assumed the liabilities accrued under the
Kodak Executive Deferred Compensation Plan, as of January 1, 1994, in respect
of each Eligible Employee who was actively employed by the Company as of such
date and who chose to transfer his or her deferred compensation account to the
Company. This Plan originally was adopted effective January 1, 1994, was
amended and restated effective as of December 1, 1999.

SECTION 1:        DEFINITIONS

         SECTION 1.1.   "Account" means the Interest Account or the Stock
         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 August 1, 1993,
         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, 1994 (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,
         1994 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 the 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.
         Notwithstanding the occurrence of any of the foregoing, the
         Compensation Committee may determine, if

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         it deems it to be in the best interest of the Company, that an event
         or events otherwise constituting a Change In Control shall not be so
         considered. Such determination shall be effective only if it is made
         by the Compensation Committee prior to the occurrence of an event that
         otherwise would be or probably will lead to a Change In Control or
         after such event if made by the Compensation Committee a majority of
         which is composed of directors who were members of the Board
         immediately prior to the event that otherwise would be or probably
         will lead to a Change In Control.

         SECTION 1.4.   "Common Stock" means the $.01 par value common stock of
         the Company.

         SECTION 1.5.   "Company" means Eastman Chemical Company.

         SECTION 1.6.   "Compensation Committee" shall mean the Compensation
         and Management Development Committee of the Board.

         SECTION 1.7.   "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
         Eastman Performance Plan and the Annual Performance Plan of the
         Company; and (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; and
         (iv) signing bonus, if any, received in connection with his or her
         initial employment with the Company; provided, however, that the
         Deferrable Amount shall not include any amount that must be withheld
         from the Eligible Employee's wages for income or employment tax
         purposes.

         In addition, each Eligible Employee as of January 1, 1994, who had
         previously participated in the Kodak Executive Deferred Compensation
         Plan could elect to transfer the amount then in his or her account in
         the Kodak Executive Deferred Compensation Plan.

         SECTION 1.8.   "Eligible Employee" means a U.S.-based employee of the
         Company or any of its U.S. Subsidiaries who at any time (i) has a
         salary grade classification of SG 49 or above; or (ii) is not covered
         under clause (i), but who was an Eligible Employee under the Kodak
         Executive Deferred Compensation Plan, as in effect on January 1, 1994.
         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 1.9.   "Enrollment Period" means the period designated by the
         Compensation Committee each year, provided however, that such period
         shall end on or before the last business day before the last Sunday in
         December of each year.

         SECTION 1.10.  "Exchange Act" means the Securities Exchange Act of
         1934, as amended.

         SECTION 1.10A. "Initial Enrollment Period" means, for an Eligible
         Employee who is newly employed by the Company, the period beginning no
         more than 15 days prior to such date of employment and ending 30 days
         after the date of employment.

         SECTION 1.11.  "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.

         SECTION 1.12.  "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.

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         SECTION 1.13.  "Market Value" means the closing price of the shares of
         Common Stock on the Now 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 1.14.  "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 1.15.  "Participant" means an Eligible Employee who elects for
         one or more years to defer compensation pursuant to this Plan.

         SECTION 1.16.  "Plan" means this Amended and Restated Eastman
         Executive Deferred Compensation Plan.

         SECTION 1.17.  "Section 16 Insider" means a Participant who is, with
         respect to the Company, subject to Section 16 of the Exchange Act.

         SECTION 1.18.  "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.

         SECTION 1.19.  "U.S. Subsidiaries" means the United States
         subsidiaries of the Company listed on Schedule A.

         SECTION 1.20.  "Valuation Date" means each business day.

SECTION  2.  DEFERRAL OF COMPENSATION. An Eligible Employee 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. A Participant in this Plan need not
participate in the Eastman Investment Plan. If an Eligible Employee terminates
employment with the Company or any of its U.S. Subsidiaries, any previous
deferral election with respect to a Wage Dividend, Success Sharing, Eastman
Performance Plan, Annual Performance Plan or Omnibus Plan payment or award shall
remain in effect with respect to such items of compensation payable after
termination of employment.

SECTION 3.  TIME OF ELECTION OF DEFERRAL. 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
calendar year in which the applicable Deferrable Amount will first be paid,
earned, or awarded. Elections shall be made annually.

Notwithstanding the foregoing, 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

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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.

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 the maximum number of Common Stock units that
         may be hypothetically purchased by deferral of compensation to Stock
         Accounts under this Plan is 4,500,000.

SECTION 5.  DEFERRALS AND CREDITING AMOUNTS TO ACCOUNTS

         SECTION 5.1.   MANNER OF ELECTING DEFERRAL. An Eligible Employee may
         elect to defer compensation by executing and returning to the
         Compensation Committee a deferred compensation form provided by the
         Company. The form shall indicate (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
         one rate for part of the year and at a second rate for the remainder
         of the year; and (iii) the portion of the deferral to be credited to
         the Participant's Interest Account and Stock Account respectively. 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 Compensation 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. Amounts to be
         deferred shall be credited to the Participant's Interest Account
         and/or Stock Account, as applicable, as of the date such amounts are
         otherwise payable.

SECTION 6.  DEFERRAL PERIOD. Subject to Sections 9, 10, and 19 hereof, the
compensation which a Participant elects to defer under the Plan will be deferred
until the Participant retires or otherwise terminates employment with the
Company or any 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.

Notwithstanding the foregoing, any fixed date election made by an Eligible
Employee under the Kodak Executive Deferred Compensation Plan shall remain in
force under this Plan, provided he or she continues as an employee of the
Company or any of its U.S. Subsidiaries during the period of deferral. Payment
of such amount pursuant to a deferral election made under such Kodak Plan shall
be made in cash in a single lump sum on the fifth business day in March in the
year following the termination of such deferral period, and the amount of the
lump sum due the Participant shall be valued as of the last Valuation Date in
February in the year following the termination of the deferral period. If such
Participant ceases to be an employee of the Company or any of its U.S.
Subsidiaries prior to the end of the fixed period, Section 8 shall govern the
payment of his or her Accounts.

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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. 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 Now 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 Plan or the Savings and Investment Plan Appendix,
         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.

         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, (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

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         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
         19), 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. Pending the complete distribution under
         Section 8.2 or liquidation under Section 7.10 of the Stock Account 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 Account shall continue to be credited
         with additional units of Common Stock pursuant to Sections 7.5, 7.6,
         and 7.7.

         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 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 Account.

         SECTION 7.10.  NO REINVESTMENT IN STOCK ACCOUNT AFTER TERMINATION OF
         EMPLOYMENT. Once a Participant has terminated 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 Account and transfer such value
         to the Interest Account, but Participant may not transfer any funds
         from the Interest Account into the Stock 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 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 Accounts
         shall be made in a single lump sum or annual installments, as elected
         by the Participant pursuant to this Section 8. The maximum number of
         annual installments is ten. The minimum annual installment payment
         permitted under such election (determined based on the value of the
         Participant's Accounts as of the last Valuation Date of the calendar
         year in which the Participant terminates employment, and disregarding
         any earnings under this Plan after such date) shall be one thousand
         dollars ($1,000); this minimum shall be applied by dividing by $1,000
         the value of the Participant's Accounts as of the last Valuation Date
         of the calendar year in which the Participant terminates employment,
         and the result, rounded down to the next largest whole number, shall
         be the maximum number of annual installments permitted. All payments
         from the Plan shall be made in cash.

         SECTION 8.3.   TIMING OF PAYMENTS. Payments shall be made by the fifth
         business day in March and shall commence in any year elected by the
         Participant pursuant to this Section 8, up through the tenth year

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         following the year in which the Participant retires, becomes disabled,
         or for any other reason, ceases to be an employee of the Company or
         any of its U.S. Subsidiaries, but in no event shall payment commence
         later than the year the Participant reaches age 71.

         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 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. Except as provided in
         Section 8.6, an election by a Participant concerning the method of
         payment under Section 8.2 or the commencement of payments under
         Section 8.3 must be made at least one (1) year before the
         Participant's termination of employment, and must be made on forms
         provided by the Company. If a Participant does not have a valid
         election in force at the time of termination of employment, then (i)
         if the value of his Accounts as of the last Valuation Date of the
         calendar year in which he terminates employment is less than ten
         thousand dollars ($10,000), then his Accounts shall be paid in a
         single lump sum; (ii) if the value of his Accounts as of the last
         Valuation Date of the calendar year in which he terminates employment
         is ten thousand dollars ($10,000) or more, then his Accounts shall be
         paid in ten (10) annual installments; and (iii) regardless of whether
         payment is made in a single lump sum or installments, payment shall
         commence by the fifth business day in March following the calendar
         year in which the Participant terminates employment.

         SECTION 8.6.   SPECIAL PAYMENT ELECTION RULES. Notwithstanding
         Sections 8.2, 8.3, and 8.5, if a Participant terminates employment
         less than one (1) year before 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.
         Also notwithstanding Sections 8.2, 8.3, and 8.5, Participants who (i)
         retire or otherwise terminate employment no later than January 1,
         2000, or (ii) notify the Company in writing no later than December 31,
         1999 of their intention to retire during calendar year 2000, shall,
         subject to the restrictions of Sections 8.2 and 8.3, have the manner
         and commencement of payment of their Account determined by the Vice
         President, Human Resources, with respect to Participants who are not
         executive officers of the Company, and by the Compensation Committee,
         with respect to Participants who are executive officers of the
         Company; and in such event (i) the Vice President, Human Resources and
         the Compensation Committee, as applicable, may expressly designate any
         such decision under Sections 8.2 or 8.3 concerning time of payment of
         benefits and/or form of payment as being irrevocable, and if such
         designation is made, such decision may be changed only with the
         consent of the Participant, or, if the Participant is deceased, the
         Participant's beneficiary under this Plan (if any); and (ii) once
         payments have commenced to a Participant or beneficiary under this
         Plan, the form of payment shall be considered irrevocable within the
         meaning of the immediately preceding sentence, regardless of whether
         it is designated as such by the Vice President, Human Resources or the
         Compensation Committee.

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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
Compensation Committee; 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.

         SECTION 10.1.  ACCELERATION OF PAYMENT FOR HARDSHIP. Upon written
         approval from the Company's Vice President, Human Resources, 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 Vice President, Human Resources, or the Compensation
         Committee, as applicable, determines that an emergency event beyond
         the Participant's control exists which would cause such Participant
         severe financial hardship if the payment of his or her Accounts were
         not approved. Any such distribution for hardship shall be limited to
         the amount needed to meet such emergency.

         SECTION 10.2.  PAYMENT TO INDIVIDUALS. Any participant in the Eastman
         Executive Deferred Compensation Plan may at his or her discretion
         withdraw at any time all or part of that person's account balance
         under the Plan; provided, if this option is exercised the individual
         will forfeit to the Corporation 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 Eastman Executive Deferred
         Compensation Plan one-half or more of the Participants or one-fifth or
         more of the Participants 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 the plan,
         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.

         SECTION 10.4.  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 the Savings and Investment Plan
         Appendix, 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 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

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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 Vice President, Human Resources, with respect
to Participants other than executive officers of the Company, or the
Compensation Committee, with respect to executive officers of the Company may,
in his or its sole discretion, direct the Company to pay to the Participant the
balance credited to his or her Interest Account and/or Stock Account.

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 Account.

SECTION 13.  NO RIGHT TO CONTINUED EMPLOYMENT. Participation in the 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 sent 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
a applicable income and other taxes from amounts deferred or paid under the
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 the 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 the Plan. Without limiting the generality of the
         preceding sentence, the Compensation Committee shall have the
         exclusive right to interpret the Plan, to determine eligibility for
         participation in the Plan, to decide all questions concerning
         eligibility for and the amount of benefits payable under the Plan, to
         construe any ambiguous provision of the 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 the 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 the Plan including, without limitation, its construction of the
         terms of the Plan and its determination of eligibility for
         participation and benefits under the Plan. It is the intent that the
         decisions

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         of the Compensation Committee and its action with respect to the Plan
         shall be final and binding upon all persons having or claiming to have
         any right or interest in or under the 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 VICE PRESIDENT HUMAN RESOURCES. Where
         expressly provided for under Sections 8, 10 and 11, the authority of
         the Compensation Committee is delegated to the Company's Vice
         President, Human Resources, and to that extent the provisions of
         Section 16.1 through 16.3 above shall be deemed to apply to such Vice
         President.

         SECTION 16.5.  DELEGATION OF AUTHORITY. The Compensation Committee may
         provide additional delegation of some or all of its authority under
         the Plan to any person or persons provided that any such delegation be
         in writing.

SECTION 17.  AMENDMENT. The Board may suspend or terminate the Plan at any time.
In addition, the Board may, from time to time, amend the 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. The 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.  [RESERVED]

         SECTION 19.3.  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 the 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 19.4.  ATTORNEY FEES. The Corporation 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 the plan after a Change in Control; provided,
         however, the participant shall be required to repay any such amounts
         to the Corporation 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.

SECTION 20.  COMPLIANCE WITH SEC REGULATIONS. It is the Company's intent that
the Plan comply in all respects with Rule 16b-3 of the Exchange Act, and any
regulations promulgated thereunder. If any provision of the Plan is found not to
be in compliance with such rule, the provision shall be deemed null and void.
All transactions under the plan, including, but not by way of limitation, a
Participant's election to defer compensation or transfer Account balances under
Section 7 and hardship withdrawals 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

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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 the
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.

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                                  SCHEDULE A

                          Holston Defense Corporation

                                      112

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