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EXHIBIT 10.10
AMENDED AND RESTATED
EASTMAN EXECUTIVE DEFERRED COMPENSATION PLAN
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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 effective March 2,
1994, and is further amended and restated effective as of October 10, 1996.
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
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foregoing, the Compensation Committee may determine, if 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 the Company's Annual Performance Plan, the
Company's Unit Performance Plan, the Company's Management Carried
Interest Plan, and any sales incentive plan of the Company in which an
Eligible Employee participates; 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 and/or retention bonus, if any,
received in connection with his or her initial employment with the
Company or the acquisition by the Company of such person's previous
employer; provided, however, that in each case 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.
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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. For a person who becomes an employee of
the Company or a U.S. Subsidiary through an acquisition by the Company
of such person's previous employer, "Initial Enrollment Period" with
respect to deferral of any signing bonus or retention bonus payable to
such person shall mean the period beginning no more than 15 days prior
to such date of acquisition, and ending 30 days after such date of
acquisition.
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.
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.
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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 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. Also notwithstanding the foregoing, in the first year
in which a person becomes an Eligible Employee through an acquisition by the
Company of such person's previous employer, the Eligible Employee may elect to
defer receipt of all or any portion of his or her signing bonus and/or retention
bonus, provided that (i) the deferred amount represents compensation for
services to be performed subsequent to such election, and (ii) 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
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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 5.3. TRANSFERS OF OBLIGATIONS FROM OTHER DEFERRED
COMPENSATION PLANS. The Compensation Committee hereby delegates to the
Company's Vice President, Human Resources, the authority to permit from
time to time the transfer to this Plan from other non-qualified
deferred compensation plans or arrangements maintained by the Company
or its affiliates, any amounts accrued to an Eligible Employee under
such other plan or arrangement. In each case, before permitting such
transfer the Company's Vice President, Human Resources shall determine
that such transfer is in the best interests of the Company, and shall
further determine that such transfer to this Plan is permitted under
the terms of such other plan or arrangement.
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.
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.
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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 shall be credited to the Stock
Account of such a Participant shall equal the number
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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
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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
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,
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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. Finally, notwithstanding
Sections 8.2, 8.3, and 8.5, if a Participant terminates employment
under circumstances not contemplated at the time the Participant filed
with the Company his or her election under Section 8.5 (hereafter
"Changed Circumstances"), then the Vice President, Human Resources,
with respect to Participants who are not executive officers of the
Company, and the Compensation Committee, with respect to Participants
who are executive officers of the Company, may allow such Participant
to change his or her election made under Section 8.5. The determination
of whether or not to change such election shall be made by the Vice
President, Human Resources or the Compensation Committee, as
applicable, in his or its sole discretion, taking into account such
factors as deemed appropriate, and without regard to any prior
determinations made by such parties. Until announced otherwise by the
Vice President, Human Resources, "Changed Circumstances" shall mean
(and shall only mean) a Company-initiated event or action.
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.
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.
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
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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.
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 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.
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SECTION 15. DEDUCTIONS. The Company will withhold to the extent required
by law all 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 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.
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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).
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 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
NAME OF SUBSIDIARY EFFECTIVE DATE
Holston Defense Corporation January 1, 1994
McWhorter Technologies Effective as of the date of
acquisition by the Company, with
respect to signing and retention
bonuses, and effective as of
January 1, 2001, with respect to
other deferrable amounts
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