EXHIBIT 10.09
AWARD NOTICE
NOTICE OF RESTRICTED STOCK
GRANTED PURSUANT TO THE
EASTMAN CHEMICAL COMPANY
1997 OMNIBUS LONG-TERM COMPENSATION PLAN
Grantee: E. W. Deavenport, Jr.
Number of Shares: 30,000
Date of Grant: December 7, 2001
1. Award of Restricted Stock. This Award Notice serves to notify
you Eastman Chemical Company ("Company") has granted to you, under the 1997
Omnibus Long-Term Compensation Plan ("Plan"), the number of shares ("Restricted
Stock") of its $.01 par value Common Stock ("Common Stock") set forth above, to
be held, subject to the terms of the Plan and this Award Notice, as restricted
stock. 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
otherwise defined herein have the respective meanings set forth in the Plan.
2. Lapse of Restrictions. The restrictions described below with
respect to the Restricted Stock will lapse upon the earlier of (1) December 7,
2004, or (2) termination of the Consulting Agreement by reason of your death,
disability, or for another approved reason, as determined by the Vice President,
Human Resources of the Company (the date and time described in clause (1) or
(2), as applicable, is referred to herein as the "Vesting Date").
3. Book-Entry Registration. The Restricted Stock awarded pursuant
to this Award Notice initially will be evidenced by book-entry registration
only, without the issuance of certificates representing such shares.
4. Issuance of Shares. Subject to the other terms of this Award
Notice, the Company will either issue a certificate or certificates representing
the Restricted Stock as promptly as practicable following the Vesting Date or
place the shares in the Automatic Dividend Reinvestment Plan maintained for
shareowners of the Company as directed by you. The Company may withhold or
require you 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 you 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.
You may elect to defer the Award until after you retire or otherwise terminate
employment with the Company or its Successor Companies under the terms and
subject to the conditions of the Eastman Executive Deferred Compensation Plan or
a similar deferred compensation plan offered by its Successor Companies, as the
same now exists or may be amended hereafter (the "EDCP"). If you choose to defer
the Award, the Award shall be converted into the right to receive a cash
payment.
If any portion of an Award is converted into a right to receive a cash payment
as described above, an amount representing the Fair Market Value of the deferred
portion of the Actual Grant Amount will be credited to the Stock Account of the
Eastman EDCP or a similar deferred compensation plan offered by the Successor
Companies and hypothetically invested in units of Common Stock. Thereafter, such
amount will be treated in the same manner as other investments in the EDCP or a
similar deferred compensation plan offered by the Successor Companies and shall
be subject to the terms and conditions thereof.
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5. Restrictions on Transfer of Shares. The Restricted Stock, and
the right to vote such shares and to receive dividends thereon, may not, except
as otherwise provided in the Plan, be sold, assigned, transferred, pledged or
encumbered in any way prior to the Vesting Date, whether by operation of law or
otherwise. After the Vesting Date, certificates for the Restricted Stock may be
issued during your lifetime only to you, except in the case of a permanent
disability involving mental incapacity.
6. Limitation of Rights. Except as otherwise provided in this
Award Notice or the Plan, prior to the Vesting Date, you will have no rights of
a shareowner with respect to the Restricted Stock, except for the right to
receive such cash dividends, if any, as may be declared on the shares of Common
Stock subject thereto from time to time, and the right to vote (in person or by
proxy) such shares at any meeting of shareowners of the Company. Neither the
Plan, this Award nor this Award Notice gives you any right to remain employed by
or in service as a consultant to the Company, the Successor Companies or any of
its or their Subsidiaries.
7. 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; provided, however, that the Restricted Stock will not vest in full or be
forfeited upon your retirement, but will continue to vest for as long as the
Consulting Agreement remains in effect (subject to Section 9 below). If for any
reason you do not retire on or about December 31, 2001, then upon later
termination of your employment with the Company and its Subsidiaries, prior to
the Vesting Date, other than by reason of your death, disability, retirement, or
another approved reason, as determined by the Committee, all of the Restricted
Stock will be canceled and forfeited by you to the Company without the payment
of any consideration by the Company. In such event, neither you nor any of your
successors, heirs, assigns or personal representatives will thereafter have any
further rights or interest in such shares or otherwise in this Award. The
provisions of the foregoing two sentences 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.
8. Noncompetition; Confidentiality; Adverse Activity.
(c) 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.
(d) 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,
the Restricted Stock 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 induce, 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 8(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.
9. Change in Ownership; Change in Control. Sections 24 and 25 of
the Plan contain certain special provisions that will apply to this Award 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
prior to the Vesting Date, the shares of Common Stock subject to this Award
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 of the
Company prior to the Vesting Date, the Committee will make any adjustments
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and modifications to this Award 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 this Award.
11. Restrictions on Issuance of Shares. If at any time the Company
determines that listing, registration or qualification of the shares of Common
Stock subject to this Award 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 award or issuance of certificate(s) for the
shares of Common Stock subject to this Award, such award or issuance may not be
made 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.
12. Noncompetition. Confidentiality. You will forfeit all rights
to this Award if you violate the noncompetition and confidentiality provisions
contained in Section 20 of the Plan or the restrictive covenants in your
Retirement and Consulting Agreement.
13. Plan Controls. In the event of any actual or alleged 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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