EXHIBIT 10.08
AWARD NOTICE
NOTICE OF NONQUALIFIED STOCK OPTION
GRANTED PURSUANT TO THE
EASTMAN CHEMICAL COMPANY
1997 OMNIBUS LONG-TERM COMPENSATION PLAN
Grantee: E. W. Deavenport, Jr.
Number of Shares: 100,000
Option Price: $ 36.11
Date of Grant: December 7, 2001
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 1997 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 $36.11 per share. This Award is in consideration for your past services and
for the consulting services you have agreed to provide to the Company or its
successors (the "Successor Companies") after your retirement from the Company on
December 31, 2001, pursuant to your Retirement and Consulting Agreement, dated
as of December 7, 2001 (the "Consulting Agreement"). 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 5:00 p.m.,
Eastern Standard Time, on December 6, 2011 (the "Expiration Date").
3. Exercise of Option.
(a) Subject to the terms set forth in this Award Notice,
the Option will become exercisable as to all of the shares covered hereby on
June 7, 2002.
(b) Upon your death, your personal representative may
exercise the Option, subject to the terms set forth in this Award Notice, until
the Expiration Date.
(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; or by surrendering unrestricted shares of Common Stock having
a value on the date of exercise equal to the exercise price, together with proof
that such shares have been owned by you for at least six months prior to the
date of exercise of the Option; 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.
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5. Limitation of Rights. You will not have any rights as a
shareowner 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 or in service as a consultant to the Company, Successor Companies,
or its or their Subsidiaries.
6. Termination. The Committee hereby determines that your
announced retirement on or about December 31, 2001 will be a termination of
employment for an "approved reason" within the meaning of Section 16 of the
Plan. Consequently, from and after such retirement, the Option will continue to
vest on June 7, 2002 even though such date is after your retirement, and the
Option will remain exercisable until the Expiration Date. However, if for any
reason you do not retire on or about December 31, 2001, then upon later
termination of your employment with the Company or a Subsidiary for a reason
other than death, disability, retirement or another approved reason, 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. The provisions of the
foregoing sentence shall be subject to the provisions of Section 9 and shall
become null and void and of no force and effect insofar as they apply to a
termination following a Change in Control under the circumstances described in
Section 25(a) of the Plan.
7. Noncompetition; Confidentiality; Adverse Activity.
(a) Except as described in Sections 24 and 25 of the
Plan, you will forfeit all rights under any unexercised portion of the Option if
you violate the noncompetition and confidentiality provisions contained in
Section 20 of the Plan.
(b) If you, during your employment or thereafter, engage
in activity, which, in the sole discretion of the Committee, is deemed to be in
conflict with or adverse to the interests of the Company or Successor Companies,
any unexercised portion of the Option will be forfeited and canceled
immediately. Such adverse activity by you shall include, but is not limited to,
the following: (i) becoming associated with, becoming employed by or rendering
services to, or owning an interest in (other than as a shareholder with a
nonsubstantial interest in such business) any business or enterprise that is
engaged in competition with the Company or Successor Companies; or (ii)
recruiting, soliciting or inducing, or attempting to induce, any employee or
employees of the Company or Successor Companies or any affiliate of the Company
or Successor Companies to terminate their employment with, or otherwise cease
their relationship with, the Company, Successor Companies, or its or their
affiliates; or (iii) soliciting, diverting or taking away, or attempting to take
away, the business patronage of any of the clients, customers, accounts, or
prospective clients, customers or accounts, which were contacted, solicited or
served by the Company during your employment; or (iv) initiating litigation
against the Company or Successor Companies; or (v) criticizing, denigrating or
otherwise speaking adversely against the Company or Successor Companies; or (vi)
violating the Company's or Successor Companies' ethics and business conduct
guidelines. The provisions of this Section 7(b) shall be subject to the
provisions of Section 9, and shall become null and void and of no force and
effect insofar as they apply to activity by you following your termination after
a Change in Control under the circumstances described in Section 25(a) 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 24 and 25 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 Shares. If the number of outstanding shares of
Common Stock changes through the declaration of stock dividends or stock splits,
the number of shares subject to the Option and the exercise price of the Option
automatically will be adjusted. If there is a change in the number of
outstanding shares of Common Stock or any change in the outstanding stock in the
Company, the Committee will make any adjustments and modifications to the Option
that it deems appropriate. In the event of any other change in the capital
structure or in the Common Stock of the Company, the Committee is authorized to
make appropriate adjustments to the Option.
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.
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