Document:

Form of Award Notice for Stock Options Granted to Mark J Costa

    EXHIBIT
      10.02

    
 

     AWARD
      NOTICE 

    

    NOTICE
      OF NONQUALIFIED STOCK OPTION

    GRANTED
      PURSUANT TO THE

    EASTMAN
      CHEMICAL COMPANY

    2002
      OMNIBUS LONG-TERM COMPENSATION PLAN

    

    

    Grantee:
      Mark J. Costa

    

    Number
      of
      Shares: 28,000

    

    Option
      Price: $____

    

    Date
      of
      Grant: October 31, 2006

    

    1. Grant
      of Option.
      This
      Award Notice serves to notify you that the Compensation and Management
      Development Committee (the “Committee”) of the Board of Directors of Eastman
      Chemical Company ("Company") has granted to you, under the Company’s 2002
      Omnibus Long-Term Compensation Plan (the "Plan"), a nonqualified stock option
      ("Option") to purchase, on the terms and conditions set forth in this Award
      Notice and the Plan, up to the number of shares of its $.01 par value Common
      Stock ("Common Stock") set forth above, at a price equal to $______ per share.
      The Plan is incorporated herein by reference and made a part of this Award
      Notice. Capitalized terms not defined herein have the respective meanings set
      forth in the Plan. The principal terms of the Plan, and of the offer by the
      Company of the shares of Common Stock covered by the Option, are described
      in
      the Prospectus for the Plan, which Prospectus will be delivered to you by the
      Company.

    

    2. Period
      of Option and Limitations on Right to Exercise.
      Subject
      to earlier cancellation of all or a portion of the Option as described in
      Sections 6 and 7 of this Award Notice, the Option will expire at 4:00 p.m.,
      Eastern Standard Time, on October 30, 2016 ("Expiration Date").

    

    3. Exercise
      of Option.
      

    

    (a) Subject
      to the terms set forth in this Award Notice, the Option will become exercisable
      as to one-third of the shares covered hereby on October 31, 2007, and one-third
      of the shares covered hereby on October 31, 2008, and as to the remaining shares
      on October 31, 2009.

    

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

    

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

     

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

    

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

    

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

    

    7. Noncompetition;
      Confidentiality.
      You
      will forfeit all rights under the Option if you violate the noncompetition
      and
      confidentiality provisions contained in Section 20 of the Plan.

    

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

    

    9. Change
      in Ownership; Change in Control.
      Sections 25 and 26 of the Plan contain certain special provisions that will
      apply to the Option in the event of a Change in Ownership or Change in Control,
      respectively.

    

    10. Adjustment
      of Option Terms.
      The
      adjustment provisions of Section 18 of the Plan will control in the event of
      a
      nonreciprocal transaction between the company and its stockholders that causes
      the per-share value of the Common Stock to change (including, without
      limitation, any stock dividend, stock split, spin-off, rights offering, or
      large
      nonrecurring cash dividend) or upon the occurrence of in anticipation of any
      other corporate event or transaction involving the Company (including, without
      limitation, any merger, combination, or exchange of shares). 

    

    11. Plan
      Controls.
      In the
      event of any conflict between the provisions of the Plan and the provisions
      of
      this Award Notice, the provisions of the Plan will be controlling and
      determinative.Form of Performance Share Award to Executive Officers

    EXHIBIT
      10.03

    
 

    PERFORMANCE
      SHARE AWARD SUBPLAN

    OF
      THE 2002 OMNIBUS LONG-TERM COMPENSATION PLAN

    2007-2009
      PERFORMANCE PERIOD

    

    

    

    

    

    

    

    

    

    

    

    EASTMAN
      CHEMICAL COMPANY

     

    

    

    
      
        
          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    
       

      PERFORMANCE
        SHARE AWARD SUBPLAN

      OF
        THE 2002 OMNIBUS LONG-TERM COMPENSATION PLAN

      2007-2009
        PERFORMANCE PERIOD

    

    

    TABLE
      OF CONTENTS

    

    Section TitlePage

    

    Section
      1. Background
      1

    

    Section
      2. Definitions
      1

    

    Section
      3. Administration
      2

    

    Section
      4. Eligibility
      3

    

    Section
      5. Form of Awards
      3

    

    Section
      6. Size of Awards
      3

    

    Section
      7. Composition of Comparison Group
      4

    

    Section
      8. Preconditions to Receipt of an Award
      5

    

    Section
      9. Manner and Timing of Award Payments
      5

    

    Section
      10. No Rights as Stockholder
      6

    

    Section
      11. Application of Plan
      6

    

    Section
      12. Adjustment of Actual Grant Amount
      7

    

    Section
      13. Amendments
      7

    

    Exhibit
      A
8

    

    Exhibit
      B
9

    

    

    

    
      
        
          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    EASTMAN
      CHEMICAL COMPANY

    
      PERFORMANCE
        SHARE AWARD SUBPLAN

      OF
        THE 2002 OMNIBUS LONG-TERM COMPENSATION PLAN

      2007-2009
        PERFORMANCE PERIOD

    

     

    

    

    Section
      1. Background.
      Under
      Section 11 of the Eastman Chemical Company 2002 Omnibus Long-Term Compensation
      Plan (the "Plan"), the "Committee" (as defined in the Plan), may, among other
      things, award shares of the $.01 par value common stock ("Common Stock") of
      Eastman Chemical Company (the "Company") to "Employees" (as defined in the
      Plan), and such awards may take the form of performance shares, which are
      contingent upon the attainment of certain performance objectives during a
      specified period, and subject to such other terms, conditions, and restrictions
      as the Committee deems appropriate. The purpose of this Performance Share Award
      Subplan (this "Subplan") is to set forth the terms of the grant of performance
      shares for the 2007-2009 Performance Period specified herein, effective as
      of
      January 1, 2007 (the "Effective Date").

    

    Section
      2. Definitions.

    

    
      	
              (a)

            	
              The
                following definitions shall apply to this
                Subplan:

            

    

    

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

            

    

    

    
      	(ii)  	
              “Award
                Amount” means the performance shares awarded to the participant under this
                Subplan at the beginning of the Performance
                Period.

            

    

    

    
      	 	
               (iii)

            	
              "Award
                Payment Date" means the date the Compensation Committee approves
                the
                payout of Common Stock covered by an award under this Subplan to
                a
                participant.

            

    

    

    
      	 	
               (iv)

            	
              "Comparison
                Group" is the group of companies comprising the “Materials Sector” from
                Standard and Poor’s Super Composite 1500 Index, identified as Global
                Industry Classification Standard (“GICS”) 15.

            

    

    

    
      	 	
                   
                (v) 

            	
              “Cost
                of Capital” reflects the cost of debt and the cost of equity, expressed as
                a percentage, reflecting the percentage of interest charged on debt
                and
                the percentage of expected return on
                equity.

            

    

    

    
      	 	
                  
                (vi)

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

            

    

    

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

            

    

    

    
      	
            	(viii)	
              “Participation
                Date” means October 31, 2006. 

            

    

     

    
      	
            	 (ix)	
              “Performance
                Period" means January 1, 2007 through December 31,
                2009.

            

    

    

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

            

    

    

    
      	
            	 (xi)	
              “Return
                on Capital” shall mean the return produced by funds invested in the
                Company and shall be determined as Earnings from Continuing Operations,
                as
                defined in Section 2.a.(vi), divided by the Average Capital Employed.
                Average Capital Employed shall be derived by adding the Company's
                capital
                debt plus equity at the close of the last day of the year preceding
                the
                Performance Year, to the Company's capital debt plus equity at the
                close
                of the last day of the present Performance Year, with the resulting
                sum
                being divided by two. Capital debt is defined as the sum of borrowing
                by
                the Company due within one year and long-term borrowing, as designated
                on
                the Company's balance sheet. The resulting ratio shall be multiplied
                by
                One Hundred (100) in order to convert such to a percentage. Such
                percentage shall be calculated to the third place after the decimal
                point
                (i.e., xx.xxx%), and then rounded to the second place after the decimal
                point (i.e., xx.xx%).

            

    

    

    
      	 	
              (xii)

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

            

    

     

    
      	 	
              (xiii)

            	
              “TSR”
                means total stockholder return, as reflected by the sum of (A) change
                in
                stock price (measured as the difference between (I) the average of
                the
                closing prices of a company’s common stock on the New York Stock Exchange,
                or of the last sale prices or closing prices of such stock on another
                national trading exchange, as applicable, in the period beginning
                on the
                tenth trading day preceding the beginning of the Performance Period
                and
                ending on the tenth trading day of the Performance Period and (II)
                the
                average of such closing or last sale prices for such stock in the
                period
                beginning on the tenth trading day preceding the end of the Performance
                Period and ending on the tenth trading day following the end of the
                Performance Period) plus (B) dividends declared, assuming reinvestment
                of
                dividends, and expressed as a percentage return on a stockholder’s
                hypothetical investment.

            

    

    

    
      	
              (b)

            	
              Any
                capitalized terms used but not otherwise defined in this Subplan
                shall
                have the respective meanings set forth in the Plan.
                

            

    

    

    Section
      3. Administration.
      This
      Subplan shall be administered by the Committee. The Committee shall have
      authority to interpret this Subplan, to prescribe rules and regulations relating
      to this Subplan, and to take any other actions it deems necessary or advisable
      for the administration of this Subplan, and shall retain all general authority
      granted to it under Section 3 of the Plan. At the end of the Performance
      Period, the Committee shall approve Actual Grant Amounts awarded to participants
      under this Subplan. 

    

    Section
      4. Eligibility.
      The
      Employees who are eligible to participate in this Subplan are those Employees
      who, as of the Participation Date, are at Salary Grade 120 and above. These
      Salary Grades generally include Employees who, as of the Participation Date,
      have been designated as "officers" of the Company for purposes of Section 16
      of
      the Exchange Act, and held positions with the Company considered carrying
      responsibilities and functions generally associated with a vice-president-level
      position. Employees who are promoted during the Performance Period to a position
      that would meet the above criteria, but who do not hold such position as of
      the
      Participation Date, are not
      eligible
      to participate in this Subplan. 

    

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

    

    Section
      6. Size of Awards.
      

    

    
      	(a)	 	
              Target
                Award Range.
                Exhibit A hereto shows by Salary Grade the Target Award Range. The
                Salary
                Grade to be used in determining the size of any Award Amount to a
                participant under this Subplan shall be the Salary Grade applicable
                to the
                position held by the participant on the Participation Date. The actual
                size of the Award Amount to the participant shall be determined based
                on
                an assessment by his or her senior management of the participant’s past
                performance and potential for contributions to the Company’s future long
                term success. Based on this assessment, the participant may receive
                no
                award, the target award amount, or any amount within the Target Award
                Range to the nearest 10 performance shares. Each member of senior
                management will have a performance share budget, based on the cumulative
                award targets for their reports, which must be balanced for their
                organizations. 

            

    

    

    
      	
              (b)           
                  

            	
              Stock
                Option Grants for Employees Named After the Participation
                Date.
                Employees who are hired into, or promoted to a Salary Grade 120 or
                above
                position after the Participation Date but prior to the Performance
                Period,
                will be eligible to receive an additional number of options to purchase
                Company stock as of the next scheduled meeting of the Compensation
                Committee following their hire or promotion. The additional grant
                of
                options will be determined based on several factors, including timing
                of
                the promotion or hire, number of options received in the previous
                assignment, stock option target ranges for the employee’s new salary
                grade, and considerations of performance assessment. The amount of
                the
                award will be recommended by the Company’s Chief Executive Officer for
                approval by the Compensation Committee for officers of the Company
                for
                purposes of Section 16 of the Exchange Act. For non-Section 16 employees,
                the amount of the award will be approved by the Chief Executive Officer.
                The option grant price will be the closing price of Company Common
                Stock
                on the New York Stock Exchange on the meeting date of the Compensation
                Committee.

            

    

    

    
      	(c)         
               	
              Actual
                Grant Amount.
                Subject to the Committee’s authority to adjust the Actual Grant Amount
                described in Section 12, the Actual Grant Amount awarded to the
                participant at the end of the Performance Period is determined by
                applying
                a multiplier to the participant’s Award Amount. The multiplier shall be
                determined by comparing Company performance relative to two
                measures:

            

    

    

    
      	(i)  	
              The
                Company's TSR during the Performance Period relative to the TSRs
                of the
                companies in the Comparison Group during the Performance
                Period.
                The Company and each company in the Comparison Group shall be ranked
                by
                TSR, in descending order, with the company having the highest TSR
                during
                the Performance Period being ranked number one. The Comparison Group
                shall
                further be separated into quintiles (first 20%, second 20%, etc.)
                and the
                Company's position, in relation to the Comparison Group, shall be
                expressed as a position in the applicable quintile ranking;
                and

            

    

    

    
      	 	 	
                          
                (ii) 

            	
              The
                arithmetic average, for each of the Performance Years during the
                Performance Period, of the Company’s average Return on Capital minus a
                Return on Capital target.
                The Return on Capital target will be determined by the Committee.
                 

            

    

    

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

            

    

    

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

     

    Section
      8. Preconditions to Receipt of an Award.

    

    
      	
              (a)

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

            

    

    

    
      	
              (b)

            	
              Death,
                Disability, Retirement, or Termination for an Approved Reason Before
                the
                Award Payment Date.
                If
                a participant's employment with the Company or a Subsidiary is terminated
                due to death, disability, retirement, or any approved reason (e.
                g.,
                reduction in force, divestiture, special separation, termination
                by mutual
                consent) prior to the Award Payment Date, the participant shall receive,
                subject to the terms and conditions of the Plan and this Subplan,
                an Award
                representing a prorated portion of the Actual Grant Amount to which
                such
                participant otherwise would be entitled, with the precise amount
                of such
                Award to be determined by multiplying the Actual Grant Amount by
                a
                fraction, the numerator of which is the number of full calendar months
                employed in the Performance Period from the Effective Date through
                and
                including the effective date of such termination, and the denominator
                of
                which is 36 (the total number of months in the Performance Period).
                

            

    

    

    Section
      9. Manner and Timing of Award Payments.

    

    
      	
              (a)

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

            

    

    

    
      	
              (b)

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

            

    

    

    
      	
              (c)

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

            

    

    

    
      	
              (d)
                

            	
              Election
                to Defer the Award.
                Any participant in this Subplan may elect to defer the Award until
                after
                the participant retires or otherwise terminates employment with the
                Company and its Subsidiaries under the terms and subject to the conditions
                of the Eastman Executive Deferred Compensation Plan, as the same
                now
                exists or may be amended hereafter (the "EDCP"). If the participant
                chooses to defer the Award, the Award shall be converted into the
                right to
                receive a cash payment.

            

    

    

    
      	(e)	
                 
                

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

            

    

    

    Section
      10. No Rights as Stockholder.
      No
      certificates for shares of Common Stock shall be issued under this Subplan
      nor
      shall any participant have any rights as a stockholder as a result of
      participation in this Subplan, until the Actual Grant Amount has been determined
      and such participant has otherwise become entitled to an Award under the terms
      of the Plan and this Subplan. In particular, no participant shall have any
      right
      to vote or to receive dividends on any shares of Common Stock under this
      Subplan, until certificates for such shares have been issued as described above;
      provided, however, that if payment of all or any portion of an Award under
      this
      Subplan has been deferred pursuant to Section 9 of this Subplan or
      otherwise, but such Award otherwise has become payable hereunder, then during
      the period during which payment is deferred, the deferred Award shall be
      credited with additional units of Common Stock, and (if applicable) fractions
      thereof, based on any dividends declared on the Common Stock, in accordance
      with
      the terms of the EDCP.

    

    Section
      11. Application of Plan.
      The
      provisions of the Plan shall apply to this Subplan, except to the extent that
      any such provisions are inconsistent with specific provisions of this Subplan.
      In particular, and without limitation, Section 11 (relating to performance
      shares), Section 12 (relating to qualification of Awards as "performance-based"
      under Code Section 162(m)), Section 17 (relating to nonassignability),
      Section 18 (relating to adjustment of shares available), Section 19 (relating
      to
      withholding taxes), Section 20 (relating to noncompetition and confidentiality),
      Section 21 (relating to regulatory approvals and listings), Section 24 (relating
      to the governing law), Section 25 (relating to changes in ownership), Section
      26
      (relating to changes in control), Section 27 (relating to no rights to
      employment or participation), Section 28 (relating to no rights, title, or
      interest in Company assets), and Section 29 (relating to securities laws) shall
      apply to this Subplan. 

    

    Section
      12. Adjustment of Actual Grant Amount.
      The
      Committee may, in its sole discretion, adjust the Actual Grant Amount to reflect
      overall Company performance and business and financial conditions. 

    

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

    

    

    EXHIBIT
      A

    

    

    Eastman
      Chemical Company

    Performance
      Share Award Grant Table

    2007-2009
      Cycle

    

    

    

    

    ON
      FILE
      IN GLOBAL COMPENSATIION

    

     

    

    EXHIBIT
      B

    

    

    Award
      Multiplier Table

    

    
      	
              Eastman
                TSR Relative to Comparison Companies

            	
               

              Differential
                from Target Return on Capital

            
	 	
              <-7%

            	
              -5%
                to 

              -7%

            	
              -3
                to 

              -4.99%

            	
              -1
                to 

              -2.99%

            	
              -0.99
                to +1%

            	
              +1.01
                to +3%

            	
              +3.01
                to +5%

            	
              +5.01
                to +7%

            	
              +7.01
                to +10%

            	
              >10%

            
	
              0-19%(
                5th
                quintile)

            	
              0.0

            	
              0.0

            	
              0.0

            	
              0.0

            	
              0.6

            	
              0.8

            	
              1.0

            	
              1.3

            	
              1.6

            	
              1.9

            
	
              20-39%(4th
                quintile)

            	
              0.0

            	
              0.0

            	
              0.0

            	
              0.4

            	
              0.8

            	
              1.0

            	
              1.3

            	
              1.6

            	
              1.9

            	
              2.2

            
	
              40-59%(3rd
                quintile)

            	
              0.0

            	
              0.0

            	
              0.4

            	
              0.6

            	
              1.0

            	
              1.3

            	
              1.6

            	
              1.9

            	
              2.2

            	
              2.5

            
	
              60-79%(2nd
                quintile)

            	
              0.0

            	
              0.4

            	
              0.6

            	
              1.0

            	
              1.3

            	
              1.6

            	
              1.9

            	
              2.2

            	
              2.5

            	
              2.8

            
	
              80-99%(1st
                quintile)

            	
              0.0

            	
              0.6

            	
              0.8

            	
              1.3

            	
              1.6

            	
              1.9

            	
              2.2

            	
              2.5

            	
              2.8

            	
              3.0

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}]]