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EASTMAN CHEMICAL COMPANY

200 South Wilcox Drive

Kingsport, Tennessee 37662

(423) 229-2000

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MAY 6, 2010

To Our Stockholders:

The 2010 Annual Meeting of Stockholders of Eastman Chemical Company (“Eastman” or the “Company”) will be held at the Toy F. Reid Employee Center, located at 400 South Wilcox Drive, Kingsport, Tennessee, on May 6, 2010, at 11:30 a.m., local time. The purposes of the meeting are:


	•	Elect Directors. To elect three directors to serve in the class for which the term in office expires at the 2013 Annual Meeting of Stockholders and until their successors are duly elected and qualified;

	•	Ratify Appointment of Independent Auditors. To ratify the appointment of PricewaterhouseCoopers LLP as independent auditors for the Company for 2010;

	•	Approve Amendment to Certificate of Incorporation. To approve the proposed amendment to the Company’s Certificate of Incorporation to permit holders of 25% of shares to call a special meeting;

	•	Vote on Stockholder Proposal. To vote on a proposal submitted by a stockholder, if properly presented at the meeting, requesting that the Board of Directors take steps necessary to elect each director annually; and

	•	Transact Any Other Business. To transact such other business as may properly come before the meeting.

Only stockholders of record at the close of business on March 10, 2010 are entitled to vote at the meeting. It is important that your shares be represented and voted at the meeting. Please vote by proxy in one of these ways:


	•	Use the toll-free telephone number shown on your proxy card, electronic form of proxy, or voting instruction form (if you received the proxy materials by mail from a broker or bank);

	•	By Internet at the web address shown on your proxy card, electronic form of proxy, or voting instruction form; or

	•	Mark, sign, date, and promptly return or submit your proxy card, electronic form of proxy, or voting instruction form (in the postage-paid envelope provided if you are returning a paper proxy card).

Signing and returning the proxy card or submitting your proxy electronically by Internet or telephone does not affect your right to vote in person if you attend the meeting.

By order of the Board of Directors

Theresa K. Lee

Chief Legal Officer and Corporate Secretary

March 19, 2010

PROXY STATEMENT

FOR

ANNUAL MEETING OF STOCKHOLDERS OF

EASTMAN CHEMICAL COMPANY

TO BE HELD ON MAY 6, 2010

INFORMATION ABOUT THE MEETING AND VOTING

Proxy Statement and Annual Meeting

This proxy statement is dated March 19, 2010 and is first being mailed and delivered electronically to Eastman stockholders, and made available on the Internet at the Company’s website (www.eastman.com) and at www.ReadMaterial.com/EMN, on or about March 25, 2010. Our Board of Directors (the “Board”) is furnishing you this proxy statement in connection with its solicitation of proxies to be voted at the Annual Meeting of Stockholders of the Company to be held on May 6, 2010, and at any adjournments or postponements of the meeting. A proxy statement is a document that Securities and Exchange Commission (“SEC”) regulations require us to give you when we ask you to vote your stock by proxy. At the meeting, stockholders will be asked to consider and vote on the items of business listed and described in this proxy statement.

Voting By Proxy

A proxy is a legal designation of another person to vote the stock you own. That other person is called a proxy. If you designate someone as your proxy in a written document, that document is also called a proxy, a proxy card, or a form of proxy.

By completing and returning your proxy (either by returning the paper proxy card or by submitting your proxy electronically via the Internet, or by telephone), you appoint Curtis E. Espeland, the Company’s Chief Financial Officer, and Theresa K. Lee, the Company’s Chief Legal Officer and Corporate Secretary, to represent you at the meeting and direct them to vote your shares at the meeting according to your instructions. Shares of common stock represented by proxy will be voted by the proxy holders at the meeting in accordance with your instructions as indicated in the proxy. If you properly execute and return your proxy (in paper form or electronically by the Internet or telephone) but do not indicate any voting instructions, your shares will be voted in accordance with the recommendations of the Board as to the matters identified in this proxy statement and in the best judgment of the proxy holders as to any other matters.

If your shares are registered in your name, you are a stockholder of record. Stockholders of record may vote by proxy in one of three ways:


	•	by telephone: call (888) 693-8683 and follow the instructions on your proxy card or electronic form of proxy;

	•	via the Internet: visit the www.cesvote.com website and follow the instructions on your proxy card or electronic form of proxy; or

	•	by mail (if you received a paper proxy card): mark, sign, date, and mail your proxy card in the enclosed postage-paid envelope.

If you received via Internet the Important Notice Regarding Availability of Proxy Materials, follow the instructions on that notice to access an electronic form of proxy. The Internet and telephone voting procedures are designed to authenticate stockholder identities, to allow stockholders to give voting instructions, and to confirm that stockholders’ instructions have been recorded properly.

If your shares are held in “street name” through a broker, bank or other holder of record, you will receive instructions from that registered holder that you must follow in order for your shares to be voted for you by that record holder. Telephone and Internet voting may be offered to stockholders who own their shares through certain brokers and banks.

How to Revoke Your Proxy

You may revoke your proxy at any time before its exercise at the meeting by:


	•	giving written notice of revocation to the Corporate Secretary of the Company;

	•	executing and delivering a later-dated, signed proxy card or submitting a later-dated proxy via the Internet or by telephone before the meeting; or

	•	voting in person at the meeting.

All written notices of revocation or other communications with respect to revocation of proxies should be sent to Eastman Chemical Company, P.O. Box 431, Kingsport, Tennessee 37662-5280, Attention: Corporate Secretary, so that they are received before the meeting.

Record Date; Stockholders Entitled to Vote; Voting Rights

The record date for the 2010 Annual Meeting of Stockholders is March 10, 2010. Owners of record of common stock at the close of business on the record date are entitled to receive notice of the meeting and to vote at the meeting. The record date is established by the Board as required by Delaware law. If your shares are held in “street name” through a broker, bank or other holder of record, you must obtain a proxy, executed in your favor, from the holder of record to be able to vote in person at the meeting.

On the record date, there were 72,349,100 shares of common stock issued and outstanding. Holders of common stock are entitled to one vote on each of the three director-nominees, and one vote on each other matter voted upon at the meeting for each share of common stock they hold of record on the record date.

Quorum

The presence, in person or by proxy, of the holders of a majority of the shares of common stock entitled to vote at the meeting is necessary to constitute a quorum to conduct business. Abstentions and “broker non-votes” will be counted as present and entitled to vote for purposes of determining a quorum. A “broker non-vote” occurs when a registered holder (such as a broker or bank) holding shares in “street name” for a beneficial owner does not vote on a particular proposal because the registered holder does not have discretionary voting power for that particular item and has not received voting instructions from the beneficial owner. Banks and brokers which have not received voting instructions from their clients cannot vote on their clients’ behalf on the election of directors or on the stockholder proposal, but may vote their clients’ shares on the ratification of the appointment of independent auditors and the proposal to amend the Certificate of Incorporation.

Vote Required for Approval of Matters to be Considered

Each director who receives a majority of votes cast (number of shares voted “for” exceeds the number of shares voted “against”) will be elected as a director. With respect to the election of directors, stockholders may by proxy (1) vote “for” all three of the nominees, (2) vote “against” all three of the nominees, (3) vote “against” any individual nominee or nominees but vote “for” the other nominee(s), or (4) “abstain” from voting on one or more nominees. Shares not present, in person or by proxy, at the meeting and abstentions will have no effect on the outcome of the election of directors. Similarly, any broker non-votes are not considered to be votes cast and therefore will have no effect on the outcome of the election of directors.

The affirmative vote of a majority of the votes cast is required for each of the ratification of the appointment of independent auditors and the recommendation of the stockholder proposal. With respect to each of these items, stockholders may (1) vote “for,” (2) vote “against,” or (3) “abstain” from voting. Abstentions and broker non-votes are not considered to be votes cast and therefore will have no effect on the outcome of these proposals.

The affirmative vote of a majority of shares outstanding and entitled to vote at the meeting is required to approve the amendment to the Certificate of Incorporation to permit holders of 25% of shares to call a special meeting. Stockholders may (1) vote “for”, (2) vote “against”, or (3) “abstain” from voting on the proposed amendment. Abstentions and broker non-votes will have the same effect as a vote against the proposal to approve the amendment to the Certificate of Incorporation.

Proxy Solicitation Costs

We will bear the cost of soliciting proxies and the cost of the meeting. In addition to the solicitation of stockholders by mail and electronic means, proxies may be solicited by telephone, facsimile, personal contact, and similar means by our directors, officers, or employees, none of whom will be specially compensated for these activities. We have also contacted brokerage houses, banks, nominees, custodians, and fiduciaries which can be identified as record holders of common stock. Such holders, after inquiry by us, have provided certain information concerning beneficial owners not objecting to the disclosure of such information and the quantities of proxy materials and annual reports needed to supply such materials to beneficial owners, and we will reimburse such record holders for the expense of providing such beneficial ownership information and of mailing or otherwise delivering proxy materials and annual reports to beneficial owners. We have retained Georgeson Inc. to assist with the solicitation of proxies and vote projections for a fee of $18,500 plus reimbursement of out-of-pocket expenses.

Matters Raised at the Annual Meeting Not Included in this Proxy Statement

We do not expect any business to be acted upon at the meeting other than as described in this proxy statement. If, however, other matters are properly brought before the meeting, the persons appointed as proxies will have the discretion to vote or act on those matters for you according to their best judgment.

Stockholder Proposals for the 2011 Annual Meeting

In accordance with rules of the SEC, if you wish to submit a proposal for presentation at Eastman’s 2011 Annual Meeting of Stockholders, it must be received by the Company at its principal executive offices on or before November 25, 2010 in order to be included in the Company’s proxy materials relating to its 2011 Annual Meeting of Stockholders. Any such proposal should be sent to Eastman Chemical Company, P.O. Box 431, Kingsport, Tennessee 37662-5280, Attention: Corporate Secretary.

In addition, our Bylaws require that a proposal to be submitted by a stockholder for a vote of the Company’s stockholders at an annual meeting of stockholders, whether or not also submitted for inclusion in the Company’s proxy materials, must be preceded by adequate and timely notice to the Corporate Secretary of the Company. To be adequate, the notice must set forth certain information specified in our Bylaws about the stockholder and the proposal. The Bylaws are available through the “Investors — Corporate Governance” section of the Company’s website, and also will be provided to any stockholder upon written request to Eastman Chemical Company, P.O. Box 431, Kingsport, Tennessee 37662-5280, Attention: Investor Relations. To be timely, the notice must be delivered to the Corporate Secretary of the Company not less than 45 days prior to the day of the month on which the notice of the immediately preceding year’s annual meeting of stockholders was first sent to the stockholders of the Company. If, as expected, notice of the 2010 Annual Meeting of Stockholders is first sent to stockholders on March 25, 2010, then such advance notice would be timely if delivered on or before February 8, 2011.

Nominations by Stockholders for Election to the Board of Directors

Our Bylaws provide that nominations by stockholders of persons for election to the Board may be made by giving adequate and timely notice to the Corporate Secretary of the Company. To be adequate, the nomination notice must set forth certain information specified in our Bylaws about each stockholder submitting a nomination and each person being nominated. The Bylaws are available through the “Investors — Corporate Governance” section of the Company’s website, and also will be provided to any stockholder upon written request to Eastman Chemical Company, P.O. Box 431, Kingsport, Tennessee 37662-5280, Attention: Investor Relations. To be timely, the nomination notice must be delivered to the Corporate Secretary of the Company not less than 45 days prior to the day of the month on which the notice of the immediately preceding year’s annual meeting of stockholders was first sent to the stockholders of the Company. If, as described above, the notice of the 2010 Annual Meeting of Stockholders is first sent to stockholders on March 25, 2010, then such notice would be timely if delivered on or before February 8, 2011. The Nominating and Corporate Governance Committee of the Board will consider persons properly and timely nominated by stockholders and recommend to the full Board whether such nominee should be included with the Board’s nominees for election by stockholders.

Annual Report to Stockholders, Annual Report on Form 10-K, and Corporate Governance Materials

Our Annual Report to Stockholders for 2009, including our consolidated financial statements for the year ended December 31, 2009, is being mailed and delivered electronically to stockholders, and made available on the Internet at the Company’s website and at www.ViewMaterial.com/EMN, concurrently with this proxy statement but does not form any part of any proxy solicitation material. The Company’s Annual Report on Form 10-K for the year ended December 31, 2009 as filed with the SEC is also available via the Internet at the Company’s website (www.eastman.com) and at the SEC’s website (www.sec.gov).

We also make available free of charge, through the “Investors — Corporate Governance” section of the Eastman website, the Company’s Corporate Governance Guidelines, the charters of each of the committees of the Board, and codes of business conduct and ethics for our directors, officers, and employees. Such materials are also available in print upon written request of any stockholder to Eastman Chemical Company, P.O. Box 431, Kingsport, Tennessee 37662-5280, Attention: Investor Relations.

PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING

ITEM 1 — ELECTION OF DIRECTORS

The Company’s Certificate of Incorporation divides the Board into three classes, with the terms of office of the respective classes ending in successive years. Under the Company’s Bylaws, a director reaching age 70 during any term of office continues to be qualified to serve only until the next annual meeting of stockholders following his or her 70th birthday (or, if approved by unanimous action of the Board, until the next annual meeting following his or her 71st birthday). Unless additional terms of office are approved by the Board in certain circumstances, the maximum number of consecutive full three-year terms of office that may be served by any director (other than a director who is the Chief Executive Officer) is three.

Four directors are in the class for which the term in office expires at the 2010 Annual Meeting, and three of these four directors have been nominated for reelection for a new three-year term. Under the Board retirement and term limit policies, Peter M. Wood, whose current term expires at the 2010 Annual Meeting, is not standing for reelection. The terms of the other eight directors continue after the meeting.

Stockholders are being asked to vote on the election of three directors to the class for which the term of office shall expire at the 2013 Annual Meeting of Stockholders and their successors are duly elected and qualified. If any nominee is unable or unwilling to serve (which we do not anticipate), the persons designated as proxies will vote your shares for the remaining nominees and for another nominee proposed by the Board or, as an alternative, the Board could reduce the number of directors to be elected at the meeting.

Majority Vote Standard for Election of Directors. The Company’s Bylaws provide that directors be elected by a majority of votes cast by stockholders. If a nominee who is serving as a director is not reelected by a majority of votes cast at a meeting, under Delaware law the director would continue to serve on the Board as a “holdover director.” However, under the director election provision of our Bylaws, any incumbent director who does not receive a majority of votes cast in favor of reelection and whose successor has not been elected by stockholders would be required to offer to resign from the Board. The Nominating and Corporate Governance Committee would then make a recommendation to the Board whether to accept or reject the resignation, or whether other action should be taken. The Board would act on the recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date the election results are certified. The director who tenders his or her resignation would not participate in the Board’s decision. If a nominee who was not already serving as a director was not elected at an annual meeting, under Delaware law that nominee would not become a director and would not serve on the Board as a “holdover director.” In 2010, all nominees for director are currently serving on the Board.

The nominees have been recommended to the Board of Directors by the Nominating and Corporate Governance Committee of the Board. The Board of Directors recommends that you vote “FOR” election of the three nominees identified below.

Set forth below is information about each director nominated for reelection or whose term in office will continue after the meeting.



NOMINEES FOR DIRECTOR Term Expiring Annual Meeting 2013




		GARY E. ANDERSON (director since August 2007) Mr. Anderson is retired Chairman of the Board of the Dow Corning Corporation. He joined Dow Corning, a diversified company specializing in the development, manufacture, and marketing of silicones and related silicone-based products, in 1967 and served in various executive capacities for over 25 years, including Chairman, President, and Chief Executive Officer, retiring as Chairman in 2005. Mr. Anderson is also a member of the Board of Directors of Chemical Financial Corporation. Mr. Anderson is 64. In addition to serving on the Board, Mr. Anderson is also Chair of the Finance Committee and a member of the Audit Committee and the Health, Safety, Environmental and Security Committee. We believe that Mr. Anderson’s deep operational knowledge and experience in the chemical industry allows him to provide valuable skills when working with companies like Eastman which develop, manufacture, and market chemical products. Specifically, Mr. Anderson offers significant financial acumen and an understanding of risk and capital-related matters that are critical to our success and which are important in his leadership of the Finance Committee. Mr. Anderson also brings to us experience from serving on other public company boards of directors, which allows us to benefit from his insight into working with directors generally and the appropriate exercise of diligence and oversight.



		RENÉE J. HORNBAKER (director since September 2003) Ms. Hornbaker has served as Chief Financial Officer of Shared Technologies, Inc., a provider of converged voice and data networking solutions, since October 2006, and was Consultant to the Chief Executive Officer of CompuCom Systems, Inc., an information technology services provider, from 2005 to 2006. She was Vice President and Chief Financial Officer of Flowserve Corporation, a global manufacturer and service provider, from 1997 until 2004, and served as Vice President of Business Development and Chief Information Officer from 1997 to 1998. In 1977, Ms. Hornbaker joined the accounting firm Deloitte, Haskins & Sells, where she became a senior manager of its audit practice in the firm’s Chicago office. Following that, she served in senior financial positions with several major companies from 1986 until 1996, including five years at Phelps Dodge Corporation where she had financial responsibilities for its international businesses including Columbian Chemicals Corporation. Ms. Hornbaker is 57. Ms. Hornbaker’s expertise in a variety of financial and accounting matters, experience in business development, strategy and technology, and service with large global businesses makes her a valuable member of the Board, and enhances the value of her service as Chair of the Audit Committee and as a member of the Finance Committee and the Health, Safety, Environmental and Security Committee. Ms. Hornbaker’s significant experience in several senior financial positions at various companies, including her current service as a chief financial officer, as well as her previous service as a senior manager at an accounting firm, provides a solid platform for her to advise and consult with the Board on financial and audit-related matters as Chair of the Audit Committee.




		THOMAS H. McLAIN (director since February 2004) Mr. McLain has since March 2009 been Chief Executive Officer of Claro Scientific, LLC, an early-stage biomedical company that utilizes breakthroughs in biophotonic research to develop portable, low-cost devices to rapidly identify micro-organisms from bodily fluid samples. He previously served as Chairman, Chief Executive Officer, and President of Nabi Biopharmaceuticals, a biotechnology company that applies its knowledge of the human immune system to develop and market products that address serious medical conditions, from 2004 until his resignation in February 2007, and was Chief Executive Officer, President and a director of Nabi from 2002 until 2004, President, Chief Operating Officer and a director in 2002 and 2003, Executive Vice President and Chief Operating Officer in 2001 and 2002, and Senior Vice President, Corporate Services and Chief Financial Officer from 1998 to 2001. From 1988 to 1998, Mr. McLain was employed by Bausch & Lomb, Inc., a global eye care company, where he held various senior financial management positions of increasing responsibility. Before joining Bausch & Lomb, Mr. McLain practiced with the accounting firm of Ernst & Young LLP. Mr. McLain is 52. Mr. McLain is also Chair of the Health, Safety, Environmental and Security Committee, and a member of the Audit Committee and the Finance Committee. Mr. McLain’s substantial management experience as a chief executive officer of research and development focused companies is of substantial importance to the Board in addressing similar growth aspects of the Company’s business. Mr. McLain also possesses a strong financial management and accounting background as evidenced by the various financial management and accounting positions held during his career, which further has value in the oversight of the Company through his service as a member of the Audit Committee and the Finance Committee.



MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE Term Expiring Annual Meeting 2011



		MICHAEL P. CONNORS (director since March 2005) Mr. Connors has been Chairman of the Board and Chief Executive Officer of Information Services Group, Inc., an information-based services company, since July 2006. Mr. Connors served as a member of the Executive Board of VNU N.V., a major worldwide media and marketing information company, from the merger of ACNielsen into VNU in 2001 until 2005, and served as Chairman and Chief Executive Officer of VNU Media Measurement & Information Group and Chairman of VNU World Directories until 2005. He previously was Vice Chairman of the Board of ACNielsen from its spin-off from the Dun & Bradstreet Corporation in 1996 until 2001, was Senior Vice President of American Express Travel Related Services from 1989 until 1995, and before that was a Corporate Vice President of Sprint Corporation. Mr. Connors was also during the last five years a member of the Boards of Directors of R.H. Donnelley Corporation and NetRatings, Inc. Mr. Connors is 54. Mr. Connors brings to the Board substantial corporate management experience in a variety of industries as well as expertise in marketing through his high-level positions at marketing and information-based companies. Mr. Connors’ skills are enhanced through his experience serving on several public company boards, which furthers his ability to provide valued oversight and guidance to the Company and strategies to inform the Board’s general decision-making, particularly with respect to management development. For these reasons, Mr. Connors is also Chair of the Compensation and Management Development Committee, and a member of the Nominating and Corporate Governance Committee, the Finance Committee, and the Health, Safety, Environmental and Security Committee.




		J. BRIAN FERGUSON (director since January 2002) Mr. Ferguson has served as Executive Chairman of the Board since May 7, 2009. He joined Eastman in 1977. Mr. Ferguson was named Vice President, Industry and Federal Affairs in 1994, Managing Director, Greater China in 1997, President, Eastman Chemical Asia Pacific in 1998, President, Polymers Group in 1999, President, Chemicals Group in 2001, and was named Chairman of the Board and Chief Executive Officer in 2002. He is also a member of the Board of Directors of FPL Group, Inc., parent company of Florida Power & Light Company. Mr. Ferguson serves as Chairman of the American Chemistry Council Board of Directors and on the Executive Committee of the Society of the Chemical Industry, U.S. Section. Mr. Ferguson is 55. Mr. Ferguson’s over thirty years of experience at the Company, culminating in his service as Eastman’s Chairman and Chief Executive Officer for seven years, gives him unique knowledge of the opportunities and challenges associated with our business. Mr. Ferguson’s familiarity with the Company, the chemical industry and various market participants makes him uniquely qualified to lead and advise the Board as Executive Chairman.



		HOWARD L. LANCE (director since December 2005) Mr. Lance has served as President, Chief Executive Officer, and a director of Harris Corporation since January 2003, and was appointed Chairman of the Board in June 2003. Harris is an international communications and information technology company serving government and commercial markets. Mr. Lance was President of NCR Corporation, an information technology services provider, and Chief Operating Officer of its Retail and Financial Group from July 2001 until October 2002. Prior to joining NCR, he spent 17 years with Emerson Electric Company, an electronic products and systems company, where he held increasingly senior management positions. Earlier, Mr. Lance held sales and marketing positions with the Scott-Fetzer Company and Caterpillar, Inc. Mr. Lance is also a member of the Board of Directors of Stryker Corporation, and was during the last five years a member of the Board of Directors of Harris Stratex Networks, Inc. Mr. Lance is 54. Mr. Lance is also Chair of the Nominating and Corporate Governance Committee, and a member of the Compensation and Management Development Committee, the Finance Committee, and the Health, Safety, Environmental and Security Committee. Mr. Lance brings to the Company considerable corporate management experience and expertise in managing information systems through his high-level positions at information technology companies, which we believe are of significant importance as the Company seeks further growth opportunities. As chief executive officer of a multinational manufacturing company, Mr. Lance has significant exposure to, and we significantly benefit from his experiences related to, the necessary capital requirements and risk assessments for large manufacturing operations. Mr. Lance’s experience serving on the boards of directors of other public companies allows us to leverage his experiences with respect to, among other things, appropriate oversight and related actions utilized in the board environment, including concerning corporate governance matters as Chair of the Nominating and Corporate Governance Committee.




		JAMES P. ROGERS (director since December 2008) Mr. Rogers has been President and Chief Executive Officer of the Company since May 7, 2009. He joined the Company in 1999 as Senior Vice President and Chief Financial Officer and in 2002 also became Chief Operations Officer of Eastman Division, was named Executive Vice President of the Company and President of Eastman Division in November 2003, and was named President of Eastman Chemical Company and Chemicals & Fibers Business Group Head in 2006. Mr. Rogers served previously as Executive Vice President and Chief Financial Officer of GAF Materials Corporation, Executive Vice President, Finance, of International Specialty Products, Inc., Treasurer of Amphenol Corporation, a Vice President in the Corporate Finance group of Morgan Guaranty Trust, and a naval aviator in the United States Navy. Mr. Rogers serves on the Board of Directors of the Lord Corporation, a private technology company, and is a member of the American Section of the Société de Chemie Industrielle. Mr. Rogers is 58. Mr. Rogers has over ten years of experience at the Company in a variety of functional, financial, and business areas, currently serving as President and Chief Executive Officer, and has senior management experience with the Company and other companies and firms in areas of operations, manufacturing, and finance. As a result, he is appropriately and uniquely able to advise the Board on the opportunities and challenges of managing the Company, as well as its day-to-day operations and risks. Among other things, he brings to our Board his extensive background in managing merger and acquisition-intensive businesses. We believe the perspective of the Chief Executive Officer of the Company is critical for the Board in order for it effectively to oversee the affairs of the Company and its strategy for growth.



Term Expiring Annual Meeting 2012



		STEPHEN R. DEMERITT (director since February 2003) Mr. Demeritt served as Vice Chairman of General Mills, Inc. from 1999 until his retirement in 2005. General Mills is a leading producer of packaged consumer foods. He joined General Mills in 1969 and served in a variety of marketing positions, including President, International Foods from 1991 to 1993 and Chief Executive Officer of Cereal Partners Worldwide, General Mills’ global cereal joint venture with Nestle, from 1993 to 1999. Mr. Demeritt is 66. Mr. Demeritt is also a member of the Finance Committee, the Nominating and Corporate Governance Committee, the Compensation and Management Development Committee, and the Health, Safety, Environmental and Security Committee. He provides to the Board a significant base of marketing and operational expertise through his professional experience at consumer-products companies with significant marketing capabilities and operations, and he also furthers the Board’s knowledge base in corporate and product branding. Mr. Demeritt’s experience serving on the board of directors of a large public company allows us to leverage his experiences with respect to, among other things, appropriate oversight and related actions utilized in the board environment.




		ROBERT M. HERNANDEZ (director since August 2002) Mr. Hernandez was Vice Chairman of the Board and Chief Financial Officer of USX Corporation from 1994 until his retirement in 2001, and was a director of USX from 1991 until 2001. He joined U.S. Steel Corporation, the predecessor of USX, in 1968, and held positions of increasing responsibility in the financial and operating organizations, including Vice President and Treasurer from 1984 to 1987, Senior Vice President and Controller from 1987 to 1989, President, U.S. Diversified Group from 1989 to 1990, Senior Vice President, Finance from 1990 to 1991, and Executive Vice President and Chief Financial Officer from 1991 to 1994. Mr. Hernandez is non-executive Chairman of the Board of RTI International Metals, Inc., Lead Director of ACE Ltd., Chairman of the Board of Trustees of BlackRock Open End Long Term Bond & Equity Funds, and a member of the Board of Directors of Tyco Electronics Ltd. Mr. Hernandez is 65. Mr. Hernandez brings a diverse financial and business management background to the Board and the Audit Committee, the Finance Committee, and the Health, Safety, Environmental and Security Committee, as evidenced by his holding a variety of senior management positions throughout his career in a company producing basic materials and commodity-type products. This history and experience is critical to the Board’s knowledge base as it pertains to multiple applications. Mr. Hernandez has also served as a member of several boards of directors, which allows him to leverage his experience for the further benefit of the Company.



		LEWIS M. KLING (director since October 2006) Mr. Kling served as President, Chief Executive Officer, and a director of Flowserve Corporation, a provider of industrial flow management products and services, from 2005 until October 2009, and was Executive Vice Chairman of the Board of Directors of Flowserve until his retirement in February 2010. He was Chief Operating Officer of Flowserve from 2004 to 2005. Before joining Flowserve, Mr. Kling was Group Vice President and Corporate Vice President of SPX Corporation from 1999 to 2004, and served as President of Dielectric Communications, a division of General Signal Corporation, purchased by SPX Corporation, from 1997 to 1999. Mr. Kling is 65. In addition, to his Board service, Mr. Kling also serves as a member of the Audit Committee, the Finance Committee, and the Health, Safety, Environmental and Security Committee. Mr. Kling’s extensive corporate management experience and expertise in manufacturing through his high-level positions at several industrial product companies, including as CEO of a global manufacturer and aftermarket service provider of flow control systems to oil and gas, basic materials, and chemical manufacturing companies, allow him to offer a unique perspective on long-term growth strategies for manufacturing companies.




		DAVID W. RAISBECK (director since December 2000) Mr. Raisbeck was Vice Chairman of Cargill, Incorporated, an agricultural trading and processing company, from 1999 until his retirement in 2008, and was a director of Cargill until September 2009. He joined Cargill in 1971 and held a variety of merchandising and management positions focused primarily in the commodity and financial trading businesses. Mr. Raisbeck was appointed President of Cargill’s Financial Markets Division in 1988 and President of Cargill’s Trading Sector in 1993, was elected a director of Cargill in 1994 and Executive Vice President in 1995. Mr. Raisbeck is a director of CarVal, a distressed asset management company owned by Cargill, and was a director of Black River Asset Management, a hedge fund owned by Cargill, until August 2009. He is also a member of the Boards of Directors of Cardinal Health, Inc., Canadian Pacific Railway Company and Canadian Pacific Railway Limited. Mr. Raisbeck is 60. Mr. Raisbeck is also a member of the Finance Committee, the Nominating and Corporate Governance Committee, the Compensation and Management Development Committee, and the Health, Safety, Environmental and Security Committee. Mr. Raisbeck’s depth of experience in the areas of trading and risks related to commodities and raw materials, which are significant components of our operations and the manufacturing of our products, is a valuable addition to our Board and its Finance Committee. Given his professional experience managing trading businesses and other risk-based, finance-related transactions, we believe Mr. Raisbeck has unique capabilities with respect to the managing of risk exposure and execution of financing transactions, and his insight is a significant factor in our success.

The Board of Directors and Corporate Governance

The Board is elected by the stockholders to oversee management and to assure that the long-term interests of the stockholders are being served. The primary role of the Board is to maximize stockholder value over the long-term. Eastman’s business is conducted by its employees, managers, and officers, under the direction of the Chief Executive Officer and the oversight of the Board. The Nominating and Corporate Governance Committee of the Board periodically reviews and assesses the Company’s Corporate Governance Guidelines and governance practices.

The Board held five meetings during 2009. Each director attended at least 75% of the aggregate of the total number of meetings of the Board and the total number of meetings held by all committees of the Board on which he or she served. The Board meets before each annual meeting of stockholders, and the directors in attendance at such Board meeting attend the annual meeting of stockholders. All directors then in office attended the 2009 Annual Meeting of Stockholders.

Board Leadership Structure

The Chairman of the Board provides leadership to the Board and works with the Board to define its structure and activities in the fulfillment of its responsibilities. The Company believes that the members of the Board possess considerable experience and unique knowledge of the challenges and opportunities the Company faces, and therefore are in the best position to evaluate the needs of the Company and how best to organize the capabilities of our directors and senior executives to meet those needs. As a result, the Company believes that the decision as to who should serve as Chairman and as Chief Executive Officer, and whether the offices should be combined or separate, is properly the responsibility of the Board, to be exercised from time to time in appropriate consideration of then-existing facts and circumstances. Our Corporate Governance Guidelines provide the Board the flexibility to determine whether or not the separation or combination of the Chairman and Chief Executive Officer offices is in the best interests of the Company.

Our current Chief Executive Officer, James P. Rogers, was appointed to the Board on December 8, 2008, the date he was elected by the Board to serve as Chief Executive Officer of the Company (with such election being effective May 7, 2009). Our current Executive Chairman of the Board, J. Brian Ferguson, served as both our Chief Executive Officer and Chairman until May 7, 2009, at which time his appointment as Executive Chairman became effective. Given his recent years of service to Eastman, his significant breadth and depth of knowledge of the Company, and his current leadership in the chemical industry, as well as the efficiencies that his continued service to the Company provides, the Board deemed it appropriate that he continue to serve as Executive Chairman through 2010.

In order to give a significant voice to our non-management directors, our Corporate Governance Guidelines provide for executive sessions of our non-management directors at each regular meeting of our Board. These Guidelines specifically provide for the appointment of a presiding director to lead all executive sessions of non-management directors. In order to best manage such sessions, the presiding director of each such executive session is the Chair of the Committee with authority and expertise pertinent to the subject matters to be discussed or, if the subjects to be addressed do not directly pertain to one of the Committees, a presiding director is appointed by the Chairman of the Board on a rotating basis. The Executive Chairman and the Chairs of the Board Committees serve as liaisons between management and the independent directors, approve information to be sent to the Board and its Committees, approve meeting agendas, and have the authority to call meetings. Additionally, interested parties, including our stockholders, may communicate directly with non-management directors by mail or phone, with such communication being directed to the Chair of the Nominating and Corporate Governance Committee.

We believe that the foregoing structure, policies, and practices, when combined with the Company’s other governance policies and procedures, provide appropriate opportunities for oversight, discussion, and evaluation of decisions and direction from the Board.

Risk Oversight

The Board maintains oversight responsibility for the management of the Company’s risks, and oversees an enterprise-wide approach to risk management, designed to provide a holistic view of organizational objectives, including strategic objectives, to improve long-term organizational performance, to prioritize and manage identified risks, and to enhance stockholder value. A fundamental part of risk management is not only understanding the risks the Company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for the Company. The full Board reviews with management its process for managing enterprise risk. Additionally, the Audit Committee is charged with overseeing our risk management process each year, including ensuring that management has instituted processes to identify major risks and has developed plans to manage such risks and reviewing with management the identified most significant risks and management’s plans for addressing and mitigating the potential effects of such risks. During the Company’s risk management review process, risk is assessed throughout our entire business, and is reported to a management corporate risk committee comprised of members of our various business units and control functions. Risks that are identified as “high-level” risks are reported to the Audit Committee and thereafter assigned, as appropriate, to various of the Board’s Committees, or to the Board as a whole, for further review, analysis, and development of appropriate plans for management and mitigation of the identified risks.

While the Board maintains the ultimate oversight responsibility for risk management, each of the various Committees of the Board have been assigned responsibility for risk management oversight of specific areas. In particular, and in addition to its responsibility to conduct an annual assessment of the risk management process and report its findings to the Board, the Audit Committee maintains responsibility for overseeing risks related to the Company’s financial reporting, audit process, and internal controls over financial reporting and disclosure controls and procedures. The Finance Committee has oversight responsibility related to the Company’s financial position and financing activities, including such areas as raw material and energy costs and large capital projects. The Health, Safety, Environmental and Security Committee assists the Board in fulfilling its oversight responsibility with respect to health, safety, environmental and security issues that affect the Company and works closely with the Company’s legal and regulatory management with respect to such matters. In addition, in setting compensation, the Compensation and Management Development Committee endeavors to develop a program of incentives that encourage an appropriate level of risk-taking behavior consistent with the Company’s long-term business strategy and also reviews the leadership development of our employees. Finally, the Nominating and Corporate Governance Committee conducts an annual assessment of nominees to our Board and is charged with developing and recommending to the Board corporate governance principles and policies and Board Committees structure, leadership, and membership, including those related to, affecting, or concerning the Board’s and its Committees’ risk oversight.

Director Independence

The Board and its Nominating and Corporate Governance Committee have reviewed the standards of independence for directors established by applicable laws and regulations, including the listing standards of the New York Stock Exchange, and by the Company’s Corporate Governance Guidelines and have reviewed and evaluated the relationships of directors with the Company and its management. Based upon this review and evaluation, the Board has determined that none of the current non-employee members of the Board has a relationship with the Company or its management that would interfere with such director’s exercise of independent judgment, and that each non-employee member of the Board is an independent director.

In making this determination, the Nominating and Corporate Governance Committee and the Board reviewed and evaluated all direct and indirect transactions and relationships between the Company and non-employee directors and their affiliates and immediate family members. Under the New York Stock Exchange listing standards and the Corporate Governance Guidelines, an “independent” director is one who has “no direct or indirect material relationship with the Company or its management” and who:


	•	has not been employed by the Company or any of its subsidiaries or affiliates, and who has no immediate family member who has been an executive officer of the Company, within the previous three years;


	•	has not received, and whose immediate family member has not received, in any 12-month period within the previous three years, more than $120,000 in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service, provided such compensation is not contingent in any way on continued service;

	•	as to the Company’s internal or external auditor, is not, and whose immediate family member is not, a partner; is not employed by; has not been, and whose immediate family member has not been, within the last three years, and is not currently, a partner or employee and personally worked on the Company’s audit;

	•	is not and has not in the past three years been employed, and whose immediate family member is not and has not in the past three years been employed, as an executive officer of another company where any of the Company’s present executives at the same time serve or served on that company’s compensation committee;

	•	is not an employee of, and whose immediate family member is not an executive officer of, another company that has made payments to, or received payments from, the Company for property or services in an amount that exceeds, in any of the last three years, the greater of $1 million or 2% of such other company’s consolidated gross revenues;

	•	has no personal services contract with the Company, any subsidiary or affiliate of the Company or any executive officer;

	•	does not have any other business relationship with the Company or any of its subsidiaries or affiliates (other than service as a director) that the Company would be required to disclose in proxy statements or in annual reports on Form 10-K filed with the SEC;

	•	is not an executive officer of another company that is indebted to the Company or to which the Company is indebted and the total amount of either company’s indebtedness to the other is more than 1% of the total consolidated assets of the company that he or she serves as an executive officer;

	•	is not an officer, director, or trustee of a charitable organization to which discretionary charitable contributions to the organization by the Company or an affiliate are more than 1% of that organization’s total annual charitable receipts or $100,000, whichever is less; and

	•	is not a director, executive officer, partner, or greater than 10% equity holder of an entity that provides advisory, consulting, or professional services to the Company, any of its affiliates, or any executive officer.

Transactions with Directors, Executive Officers, and Related Persons

As described above, at least annually the Board reviews and evaluates all current and recent past transactions involving the Company in which non-management directors and their affiliates (including immediate family members and other firms, corporations, or entities with which the director has a relationship) have or had a direct or indirect interest. The Board also reviews any such transactions and relationships in which executive officers of the Company or members of their immediate families have or had an interest. In the most recent such review, the Board considered purchases and sales of products and services in the ordinary course of business to and from companies of which non-employee directors were executive officers. Each such transaction was below the thresholds of the categorical standards listed above and determined by the Board not to be a material transaction or relationship.

Written Company policies require approval by the Board (in the case of the Chief Executive Officer) or senior management (in the case of all other employees) of each transaction in which an employee has a direct or indirect financial or other personal interest, and restrict direct or indirect reporting relationships between immediate family member employees.

Board Committees

The Board has an Audit Committee, a Nominating and Corporate Governance Committee, a Compensation and Management Development Committee, a Finance Committee, and a Health, Safety, Environmental and Security Committee. All committee members are non-employee, independent directors. The written charter of each committee of the Board is available in the “Investors — Corporate Governance” section of the Company’s Internet website (www.eastman.com).

Audit Committee. The members of the Audit Committee are Ms. Hornbaker (Chair) and Messrs. Anderson, Hernandez, Kling, and McLain. The Audit Committee held 10 meetings during 2009. The purpose of the Audit Committee is to assist the Board in fulfilling the Board’s oversight responsibilities relating to:


	•	the integrity of the financial statements of the Company and the Company’s system of internal controls;

	•	the Company’s management of and compliance with legal and regulatory requirements;

	•	the independence and performance of the Company’s internal auditors;

	•	the qualifications, independence, and performance of the Company’s independent auditors;

	•	the retention and termination of the Company’s independent auditors, including the approval of fees and other terms of their engagement, and the approval of non-audit relationships with the independent auditors; and

	•	risk assessment and risk management.

The Board of Directors has determined that each current member of the Audit Committee is “independent” and that each of Ms. Hornbaker and Messrs. Anderson, Hernandez, and McLain is an “audit committee financial expert” under applicable provisions of the New York Stock Exchange’s listing standards and the Securities Exchange Act of 1934. In making such determination, the Board took into consideration, among other things, the express provision in Item 407(d) of SEC Regulation S-K that the determination that a person has the attributes of an audit committee financial expert shall not impose any greater responsibility or liability on that person than the responsibility and liability imposed on such person as a member of the Audit Committee and the Board of Directors, nor shall it affect the duties and obligations of other Audit Committee members or the Board.

Audit Committee Report

The Audit Committee has reviewed and discussed with the Company’s management and PricewaterhouseCoopers LLP, the Company’s independent auditors, the audited financial statements of the Company contained in the Company’s Annual Report to Stockholders for the year ended December 31, 2009. The Audit Committee has also discussed with the Company’s independent auditors the matters required to be discussed by the Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU Section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T.

The Audit Committee has received and reviewed the written disclosures and the letter from PricewaterhouseCoopers LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding PricewaterhouseCoopers LLP’s communications with the Audit Committee concerning independence and has discussed with PricewaterhouseCoopers LLP their independence. The Audit Committee has also considered whether the provision of non-audit services to the Company by PricewaterhouseCoopers LLP is compatible with maintaining their independence.

Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 filed with the SEC.

Audit Committee

Renée J. Hornbaker (Chair)

Gary E. Anderson

Robert M. Hernandez

Lewis M. Kling

Thomas H. McLain

Nominating and Corporate Governance Committee. The members of the Nominating and Corporate Governance Committee are Messrs. Lance (Chair), Connors, Demeritt, Raisbeck, and Wood. The Nominating and Corporate Governance Committee held four meetings during 2009. The purpose of the Nominating and Corporate Governance Committee is to:


	•	identify individuals qualified to become Board members;

	•	recommend to the Board candidates to fill Board vacancies and newly-created director positions;

	•	recommend to the Board whether incumbent directors should be nominated for re-election to the Board upon the expiration of their terms;

	•	develop and recommend corporate governance principles;

	•	review and make recommendations to the Board regarding director compensation; and

	•	recommend committee structures, membership, and chairs.

Director Nominations. The Nominating and Corporate Governance Committee is responsible for reviewing and recommending to the Board potential directors who possess the skills, knowledge, and understanding necessary to be valued members of the Board in order to assist it in successfully performing its role in corporate oversight and governance. The Nominating and Corporate Governance Committee considers not only an individual director’s or possible nominee’s qualities, performance, and professional responsibilities, but also the then-current composition of the Board and the challenges and needs of the Board as a whole in an effort to ensure that the Board, at any time, is comprised of a diverse group of members who, individually and collectively, best serve the needs of the Company and its stockholders. In general, and in giving due consideration to the composition of the Board at that time, the desired attributes of individual directors, including those of any nominees of stockholders, are as follows:


	•	integrity and demonstrated high ethical standards;

	•	experience with business administration processes and principles;

	•	the ability to express opinions, raise difficult questions, and make informed, independent judgments;

	•	knowledge, experience, and skills in at least one specialty area, for example:


	•	accounting or finance,

	•	corporate management,

	•	marketing,

	•	manufacturing,

	•	technology,

	•	information systems,

	•	international business, or

	•	legal or governmental matters.


	•	the ability to devote sufficient time to prepare for and attend Board meetings (it is assumed that service on up to three other boards of directors will not impair a director’s service on the Company’s Board; the Nominating and Corporate Governance Committee reviews instances in which a director serves on more than three other for-profit companies’ boards of directors);

	•	willingness and ability to work with other members of the Board in an open and constructive manner;

	•	the ability to communicate clearly and persuasively; and

	•	diversity with respect to other characteristics, which may include, at any time, gender, ethnic background, geographic origin, or personal, educational and professional experience.

The Nominating and Corporate Governance Committee will consider persons nominated by stockholders and recommend to the full Board whether such nominee should be included with the Board’s nominees for election by stockholders. The Board and the Nominating and Corporate Governance Committee have from time to time engaged the services of director search firms to assist in the identification of qualified potential director nominees.

Compensation and Management Development Committee. The members of the Compensation and Management Development Committee (the “Compensation Committee”) are Messrs. Connors (Chair), Demeritt, Lance, Raisbeck, and Wood. The Compensation Committee held six meetings during 2009. The purpose of the Compensation Committee is to establish and administer the Company’s policies, programs, and procedures for evaluating, developing, and compensating the Company’s senior management. Among other things, the Compensation Committee discharges the Board’s responsibilities relating to compensation of the Company’s executive officers, reviews and approves the adoption of cash and equity-based incentive management compensation plans, and oversees the administration of the Company’s benefits plans.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the “Compensation Discussion and Analysis” which appears later in this proxy statement. Based on the review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 filed with the SEC and in this proxy statement.

Compensation and Management Development Committee

Michael P. Connors (Chair)

Stephen R. Demeritt

Howard L. Lance

David W. Raisbeck

Peter M. Wood

Finance Committee. All of the directors except Messrs. Ferguson and Rogers are members, and Mr. Anderson is the Chair, of the Finance Committee. The Finance Committee held four meetings during 2009. The purpose of the Finance Committee is to review with management and, where appropriate, make recommendations to the Board regarding the Company’s financial position and financing activities, including consideration of the Company’s financing plans, corporate transactions (including acquisitions and divestitures), capital expenditures, financial status of the Eastman Retirement Assistance Plan (the Company’s defined benefit pension plan), payment of dividends, and use of financial instruments, commodity purchasing, and other hedging arrangements and strategies to manage exposure to market risks.

Health, Safety, Environmental and Security Committee. All of the directors except Messrs. Ferguson and Rogers are members, and Mr. McLain is the Chair, of the Health, Safety, Environmental and Security Committee. The Health, Safety, Environmental and Security Committee held two meetings during 2009. The purpose of the Health, Safety, Environmental and Security Committee is to review with management and, where appropriate, make recommendations to the Board regarding the Company’s policies and practices concerning health, safety, environmental, security and sustainability matters.

Director Compensation

The following table sets forth certain information concerning compensation of the Company’s non-employee directors for 2009. Directors who are also employees of the Company receive no Board or committee fees.

Director Compensation for Year Ended December 31, 2009


									Change in
									Pension Value
	Fees						Non-Equity		and Nonqualified
	Earned						Incentive		Deferred
	or Paid		Stock		Option		Plan		Compensation		All Other
	in Cash		Awards		Awards		Compensation		Earnings		Compensation
Name	($)(1)		($)(2)		($)		($)		($)(3)		($)(4)		Total($)

Gary E. Anderson	$	101,250	$	50,036	$	0	$	0	$	0	$	50,000	$	201,286
Michael P. Connors		107,250		50,036		0		0		0		50,000		207,286
Stephen R. Demeritt		104,250		50,036		0		0		0		50,000		204,286
Robert M. Hernandez		107,250		50,036		0		0		0		50,000		207,286
Renée J. Hornbaker		122,250		50,036		0		0		0		50,000		222,286
Lewis M. Kling		95,250		50,036		0		0		0		50,000		195,286
Howard L. Lance		101,250		50,036		0		0		0		50,000		201,286
Thomas H. McLain		101,250		50,036		0		0		0		50,000		201,286
David W. Raisbeck		96,750		50,036		0		0		0		50,000		196,786
Peter M. Wood		87,750		50,036		0		0		0		50,000		187,786


1)		Consists of director retainer fees and, where applicable, committee chair or Audit Committee member retainer fees and compensation on an “event” basis for significant time spent outside Board or committee meetings for director training, interviewing director candidates, meeting with Company management, meeting with external auditors, or other meetings or activities as directed by the Board or one of its committees. Cash fees for 2009 were paid according to the following schedule:


Director Retainer	$	90,000
“Event” Fee (Per Event)		1,500
Chair Retainer — Audit Committee		18,000
Chair Retainer — Compensation and Management Development Committee		12,000
Chair Retainer — Nominating and Corporate Governance Committee		9,000
Chair Retainer — Finance Committee		9,000
Chair Retainer — Health, Safety, Environmental and Security Committee		9,000
Audit Committee Member Retainer		9,000


		Event fees were paid for 2009 to Mr. Connors ($7,500), Mr. Demeritt ($7,500), Mr. Hernandez ($1,500), Ms. Hornbaker ($7,500), and Mr. Kling ($3,000).

		Effective July 1, 2009, the Board decreased the annual director retainer by five percent, consistent with the Company’s reduction of the base pay of employees in response to the global recession and then-current business conditions. The Company restored the five percent base salary reduction for employees and the Board made a corresponding five percent increase in the annual director retainer effective January 1, 2010.

2)		Grant date fair value of annual award of restricted shares of common stock (“restricted shares”) having a fair market value equal to $50,000 (with the number of restricted shares awarded rounded up in the case of fractional shares) on the date of the 2009 Annual Meeting of Stockholders under the 2008 Director Long-Term Compensation Subplan of the Omnibus Long-Term Compensation Plan (the “DLTP”), computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 (Stock Compensation). See note 1 to the Summary Compensation Table later in this proxy statement and note 15 to the Company’s consolidated financial statements in the Annual Report to Stockholders for 2009 mailed and delivered electronically with this proxy statement for discussion of the assumptions made in the valuation of stock awards under FASB ASC Topic 718.


		The number of outstanding restricted shares held by individual directors at December 31, 2009 was: Mr. Anderson (1,446), Mr. Connors (1,374), Mr. Demeritt (1,374), Mr. Hernandez (1,374), Ms. Hornbaker (1,374), Mr. Kling (1,374), Mr. Lance (1,374), Mr. McLain (1,374), Mr. Raisbeck (1,374), and Mr. Wood (1,374).

		Except as described below the restricted shares are not transferable (except by will or the laws of descent and distribution) and are subject to forfeiture until the earliest of: (i) the third anniversary of grant (provided the grantee is still a director), (ii) death, disability, or resignation due to term limit or retirement age during the three years after grant, or (iii) departure from the Board at the end of the term of service to which elected. If none of the three alternative vesting events occurs by the third anniversary of the grant date, then the restricted shares are forfeited. During the restricted period, the director has all of the rights of a stockholder (other than the right to transfer the shares) with respect to the restricted shares, including voting and dividend rights. The DLTP contains provisions regarding the treatment of restricted shares in the event of a “change in control” (as defined in the DLTP, generally involving circumstances in which the Company is acquired by another entity or its controlling ownership is changed). In such event, all outstanding restricted shares would immediately vest and become transferable, and would be valued and cashed out on the basis of the change in control price as soon as practicable, but in no event more than 90 days after the change in control. The Nominating and Corporate Governance Committee has the discretion, notwithstanding any particular event constituting a change in control, to determine that such event is of the type that does not warrant the described result with respect to restricted shares under the DLTP, in which case such result would not occur.

3)		The Company maintains the Directors’ Deferred Compensation Plan (the “DDCP”), an unfunded, non-qualified, deferred compensation plan under which non-employee directors of the Company may elect to defer compensation received as a director until such time as they cease to serve as a director. Non-employee directors may make an annual advance irrevocable election to defer compensation for services to be rendered the following year. Compensation that may be deferred includes all or a portion of cash compensation for service as a director, including retainer and “event” fees. In addition, as described in note (4) below, in 2009 each non-employee director received an automatic deferral of $50,000 into the director’s stock account of the DDCP. Compensation deferred into the DDCP is credited at the election of the non-employee director to individual interest accounts or stock accounts. Amounts deferred to the interest account are credited with interest at the prime rate until transfer or distribution, and amounts deferred to the stock account increase or decrease in value depending on the market price of Eastman common stock. When cash dividends are declared on the common stock, each stock account receives a dividend equivalent which is used to hypothetically “purchase” additional shares. Upon termination as a director, the value of the director’s DDCP account is paid, in cash, in a single lump sum or up to ten annual installments as elected in advance by the director. For 2009, no non-qualified deferred compensation earnings are reported because there were no preferential or above-market earnings on amounts in individual stock accounts (defined as appreciation in value and dividend equivalents earned at a rate higher than appreciation in value and dividends on common stock) or in individual interest accounts (defined as interest on amounts deferred at a rate exceeding 120% of the federal long-term rate).

		Eastman does not offer a pension plan for directors.

4)		Amount of annual retainer deferred into the stock account of the DDCP. Perquisites and personal benefits provided to non-employee directors (company-provided personal liability insurance and company-provided insurance for non-employee director travel) are not reported for 2009 since the total amount per individual was less than $10,000.

ITEM 2 — RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

The Audit Committee of the Board of Directors has retained PricewaterhouseCoopers LLP to serve as independent auditors for the year ending December 31, 2010.

PricewaterhouseCoopers LLP also served as the Company’s independent auditors for the years ended December 31, 2009 and 2008, and has billed the Company the following amounts for fees and related expenses for professional services rendered during 2009 and 2008:

Audit Fees: $4.8 million, in the aggregate, for the year ended December 31, 2009 and $5.6 million, in the aggregate, for the year ended December 31, 2008 for professional services rendered for the audits of the consolidated financial statements of the Company (including the audit of internal controls over financial reporting), statutory and subsidiary audits, issuance of comfort letters, and assistance with review of documents filed with the SEC.

Audit-Related Fees: $110,700, in the aggregate, for the year ended December 31, 2009 and $63,500, in the aggregate, for the year ended December 31, 2008 for assurance and related services, including employee benefit plan audits, other audit procedures, and consultations concerning financial accounting and reporting standards. In addition, various employee benefit plans were billed for fees and related expenses of $203,000 for 2009 and $218,000 for 2008 for audits of their plan financial statements by PricewaterhouseCoopers LLP.

Tax Fees: $1.1 million, in the aggregate, for the year ended December 31, 2009 and $1.5 million, in the aggregate, for the year ended December 31, 2008 for services related to tax compliance, including expatriate tax services and preparation of tax returns and claims for refunds, tax planning and tax advice, assistance with respect to tax audits, and requests for rulings for technical advice from tax authorities.

All Other Fees: $12,375, in the aggregate, for the year ended December 31, 2009 and $17,900, in the aggregate, for the year ended December 31, 2008 for all services other than those covered above under “Audit Fees,” “Audit-Related Fees,” and “Tax Fees.” “All Other Fees” for 2009 and 2008 were for services related to technology access and conference fees.

All audit and non-audit services provided to the Company by the independent auditors are pre-approved by the Audit Committee or in certain instances by the Chair of the Audit Committee pursuant to delegated authority. At the beginning of each year, the Audit Committee reviews and approves all known audit and non-audit services and fees to be provided by and paid to the independent auditors. During the year, specific audit and non-audit services or fees not previously approved by the Audit Committee are approved in advance by the Audit Committee or by the Chair of the Audit Committee pursuant to delegated authority. In addition, during the year the Chief Financial Officer and the Audit Committee monitor actual fees to the independent auditors for audit and non-audit services.

The stockholders are being asked to ratify the Audit Committee’s appointment of PricewaterhouseCoopers LLP. If the stockholders fail to ratify this appointment, the Audit Committee may, but is not required to, reconsider whether to retain that firm. Even if the appointment is ratified, the Audit Committee in its discretion may direct the appointment of a different accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders.

A representative of PricewaterhouseCoopers LLP is expected to attend the meeting and will have the opportunity to make a statement on behalf of the firm if he desires to do so. The representative is also expected to be available to respond to appropriate questions from stockholders.

The Board of Directors recommends that you vote “FOR” ratification of the appointment of PricewaterhouseCoopers LLP as independent auditors.

ITEM 3 — APPROVAL OF AN AMENDMENT TO CERTIFICATE OF INCORPORATION TO
PERMIT HOLDERS OF 25% OF SHARES TO CALL A SPECIAL MEETING

The Company’s Certificate of Incorporation currently provides that a special meeting of stockholders may be called only by the Board of Directors pursuant to a resolution adopted by a majority of the members of the Board then in office. The Board is committed to sound corporate governance practices and is mindful of the approval by a majority of votes cast, although less than a majority of shares outstanding, at our 2009 Annual Meeting of Stockholders of a stockholder proposal to allow the holders of 10% of our outstanding common shares to call a special meeting. Following careful consideration of the implications of that proposal, the Board, upon the recommendation of the Nominating and Corporate Governance Committee, has determined that it is appropriate

to propose an amendment to the Company’s Certificate of Incorporation to allow the holders of not less than 25% of our outstanding common shares to call a special meeting.

The Board believes that establishing an ownership threshold of 25% of our outstanding common shares for the right to call a special meeting strikes a reasonable balance between ensuring accountability to stockholders and protecting against the risk that a small minority of stockholders could call special meetings in order to advance their own, potentially conflicting, interests that could be extremely disruptive to the conduct of the Company’s operations, require significant attention from our Board and management, create major confusion for other stockholders, and impose significant administrative and financial burdens on the Company. We believe that allowing holders of 25% of outstanding shares to call a special meeting, when added to our other existing governance mechanisms, will afford management and the Board the ability to respond to proposals and concerns of all stockholders, regardless of their level of share ownership.

The Company’s Bylaws also currently provide that a special meeting of stockholders may be called only by the Board. If this proposal is approved by stockholders, our Board will amend our Bylaws to allow the holders of not less than 25% of our outstanding common shares to call a special meeting of stockholders. In such event, the Bylaws will also be amended to provide for advance notice procedures for special meetings similar to those currently in place for stockholders to bring an item of business for an annual meeting.

The text of the proposed amendments to the Company’s Certificate of Incorporation and Bylaws, each marked to show the proposed changes, are attached as Appendix A to this proxy statement. If adopted by stockholders, the proposed amendment to the Certificate of Incorporation, and the related amendment to the Bylaws, will become effective upon filing of a certificate of amendment with the Secretary of State of Delaware. We anticipate that this filing would be made as promptly as reasonably practicable following the 2010 Annual Meeting.

The Board of Directors recommends that you vote “FOR” adoption of this proposal to approve an amendment to the Certificate of Incorporation to permit holders of 25% of shares to call a special meeting.

ITEM 4 — PROPOSAL REQUESTING THAT THE BOARD TAKE STEPS NECESSARY TO ELECT EACH DIRECTOR ANNUALLY

Stockholder Gerald R. Armstrong, 910 Sixteenth Street, No. 412, Denver, Colorado 80202-2917, owner of 98 shares of Eastman common stock, has given notice that he intends to submit the following proposal and supporting statement:

RESOLUTION

That the shareholders of EASTMAN CHEMICAL COMPANY ask our Company to take the steps necessary to reorganize the Board of Directors into one class with each Director being subject to election, or re-election, each year and to complete this proposed transition within one-year.

STATEMENT

This proposal received more than 58% support of shares at the 2008 annual meeting and proposals often receive higher votes on subsequent presentations.

The Council of Institutional Investors, www.cii.org, recommends that management adopt shareholder proposals upon receiving their first majority vote and adoption of annual election of each director.

The current practice of electing only one-third of the directors for three-year terms is not in the best interest of the corporation or its shareholders. Eliminating this staggered system increases accountability and gives shareholders the opportunity to express their views on the performance of each director annually. The proponent believes the election of directors is the strongest way that shareholders influence the direction of any corporation and our corporation should be no exception.

As a professional investor, the proponent has introduced the proposal at several corporations which have adopted it. In others, opposed by the board or management, it has received votes in excess of 70% and is likely to be reconsidered favorably.

The proponent believes that increased accountability must be given our shareholders whose capital has been entrusted in the form of share investments especially during these times of great economic challenge.

Arthur Levitt, former Chairman of The Securities and Exchange Commission said, “In my view, it’s best for the investor if the entire board is elected once a year. Without annual election of each director, shareholders have far less control over who represents them.”

While management may argue that directors need and deserve continuity, management should become aware that continuity and tenure may be best assured when their performance as directors is exemplary and is deemed beneficial to the best interests of the corporation and its shareholders.

The proponent regards as unfounded the concern expressed by some that annual election of all directors could leave companies without experienced directors in the event that all incumbents are voted out by shareholders.

In the unlikely event that shareholders do vote to replace all directors, such a decision would express dissatisfaction with the incumbent directors and reflect the need for change.

If you agree that shareholders may benefit from greater accountability afforded by annual election of all directors, please vote “FOR” this proposal.

Response of the Company

The Board first determined that a classified board structure — where the Board of Directors is divided into three classes and directors are elected to staggered three-year terms with members of one of the three classes being elected every year — was in the best interests of Eastman and its stockholders in 1994 when the Company became independent. Since then, the Board has remained committed to corporate governance policies that are in the particular best interests of the Company. The Board regularly reviews the Company’s governance structure, policies, and practices, and makes changes that it determines to be in the best interests of the Company and its stockholders. Recent changes include the implementation of majority voting in the election of directors and the repeal of the Company’s stockholder rights plan, as well as the current proposal for stockholders to approve an amendment to the Company’s Certificate of Incorporation to permit holders of a certain amount of our outstanding common shares to call a special meeting that is discussed in more detail under Item 3 above.

Management and the Board continue to believe that a classified board structure remains in the best interests of Eastman and its stockholders. We believe that the election of directors by classes complements the implementation of the previously disclosed long-term strategy for creating stockholder value and assists the Company to recruit and retain more experienced directors while allowing an orderly evolution of the Board.

Given the cyclical nature of Eastman’s industry and the markets in which the Company operates, we believe our stockholders are uniquely positioned to benefit from a long-term strategy requiring commitment, stability, and vision. Our long-term strategy — to leverage our heritage of expertise and innovation in acetyl, polyester, and olefins chemistries to be an outperforming chemical company through solid financial results from our core businesses and plans for profitable growth — is furthered by continuity and stability in corporate governance and leadership. We believe that the classified board structure has helped, and will continue to help, to provide continuity and stability, enabling the development and implementation of the Company’s value creation strategy and continued focus on sustained performance rather than just short-term results.

The classified Board structure has allowed the Company to attract and retain a diverse group of experienced directors who develop in-depth knowledge of Eastman’s industry, strategy, and affairs. Such knowledge and experience is especially important because of the complex nature of our business and strategy for growth and the interconnected strategies for our various businesses, product lines, and technologies.

Contrary to the general assertions of opponents of classified boards, Eastman’s classified board structure has not been a deterrent to orderly and significant change in the composition of the Board. Rather, over the last 10 years, the Nominating and Corporate Governance Committee has nominated a total of 12 new directors to serve on the Board. As a result, since 2000, all of the directors have been new to the Board. This orderly evolution of the Board is expected to continue due, in part, to the Company’s Bylaw provisions that require mandatory retirement and impose term limits on directors.

Finally, while a classified board may help prevent a third party from acquiring control of the Company without the cooperation of the Board, we believe such an effect is beneficial to the interests of our stockholders. A classified structure, along with other takeover preparedness measures, is a useful tool in ensuring that the Board would be able to obtain fair value for our stockholders in the event of an unsolicited takeover attempt. In fact, studies show that the premiums paid by bidders to stockholders of companies with structural defenses, including a classified board, are typically greater than premiums paid to stockholders of companies without these defenses.

The Board of Directors recommends that you vote “AGAINST” this proposal.

STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

Common Stock

The table below sets forth certain information regarding the beneficial ownership of Eastman common stock as of December 31, 2009 by each director and by each executive officer named in the Summary Compensation Table (under “Executive Compensation — Compensation Tables” below), and by the directors, the named executive officers, and the other executive officers as a group.


	Number of
	Shares of
	Common Stock
Name	Beneficially Owned(1)(2)

J. Brian Ferguson		961,279	(3)
James P. Rogers		295,356	(4)
Mark J. Costa		122,746	(5)
Curtis E. Espeland		119,393	(6)
Theresa K. Lee		117,993	(7)
Ronald C. Lindsay		67,927	(8)
Gary E. Anderson		8,446	(9)
Michael P. Connors		8,713	(10)
Stephen R. Demeritt		14,121	(11)
Robert M. Hernandez		26,052	(12)
Renée J. Hornbaker		13,240	(13)
Lewis M. Kling		4,557	(14)
Howard L. Lance		9,642	(15)
Thomas H. McLain		11,977	(16)
David W. Raisbeck		17,256	(17)
Peter M. Wood		18,226	(18)
Directors, named executive officers, and other executive officers as a group (20 persons)		2,053,798	(19)


	(1)	Information relating to beneficial ownership is based upon information furnished by each person using “beneficial ownership” concepts set forth in rules of the SEC. Under those rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of, or to direct the disposition of, such security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership (such as by exercise of options) within 60 days. Under such rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may disclaim any beneficial interest. Except as indicated in other notes to this table, directors and executive officers possessed sole voting and investment power with respect to all shares of common stock referred to in the table.

	(2)	The total number of shares of common stock beneficially owned by the directors, the named executive officers, and the other executive officers as a group represents approximately 2.78% of the shares of common stock outstanding as of December 31, 2009. The percentage beneficially owned by any individual director or executive officer other than Mr. Ferguson (who beneficially owned approximately 1.30% of the outstanding


		shares) did not exceed one percent of the outstanding shares of common stock. Shares not outstanding which are subject to options exercisable within 60 days by persons in the group or a named individual are deemed to be outstanding for the purpose of computing the percentage of outstanding shares of common stock owned by the group or such individual.


	(3)	Includes 774,556 shares that may be acquired upon exercise of options and 582 shares allocated to Mr. Ferguson’s Employee Stock Ownership Plan (“ESOP”) account.

	(4)	Includes 210,965 shares that may be acquired upon exercise of options, 1,033 shares allocated to Mr. Rogers’ ESOP account, 22,086 shares held by a grantor retained annuity trust of which Mr. Rogers is trustee and as to which he has voting and investment power, and 55,609 shares pledged as security in a margin brokerage account.

	(5)	Includes 114,000 shares that may be acquired upon exercise of options and 741 shares allocated to Mr. Costa’s ESOP account.

	(6)	Includes 31,150 shares that may be acquired upon exercise of options and 792 shares allocated to Mr. Espeland’s ESOP account. Also includes 82,674 shares owned by the Eastman Chemical Company Foundation, Inc., of which shares Mr. Espeland may also be deemed a beneficial owner by virtue of his shared voting and investment power as a director of the Foundation but in which he has no pecuniary interest.

	(7)	Includes 95,571 shares that may be acquired upon exercise of options and 740 shares allocated to Ms. Lee’s ESOP account.

	(8)	Includes 58,500 shares that may be acquired upon exercise of options and 455 shares allocated to Mr. Lindsay’s ESOP account.

	(9)	Includes 1,000 shares that may be acquired upon exercise of options, 147 restricted shares that generally vest in August 2010, but as to which Mr. Anderson currently has voting power, 69 restricted shares that generally vest in May 2011, but as to which he currently has voting power, and 1,230 restricted shares that generally vest in May 2012, but as to which he currently has voting power.


(10)	Includes 7,000 shares that may be acquired upon exercise of options, 75 restricted shares that generally vest in May 2010, but as to which Mr. Connors currently has voting power, 69 restricted shares that generally vest in May 2011, but as to which he currently has voting power, and 1,230 restricted shares that generally vest in May 2012, but as to which he currently has voting power.

(11)	Includes 11,000 shares that may be acquired upon exercise of options, 75 restricted shares that generally vest in May 2010, but as to which Mr. Demeritt currently has voting power, 69 restricted shares that generally vest in May 2011, but as to which he currently has voting power, and 1,230 restricted shares that generally vest in May 2012, but as to which he currently has voting power.

(12)	Includes 11,000 shares that may be acquired upon exercise of options, 75 restricted shares that generally vest in May 2010, but as to which Mr. Hernandez currently has voting power, 69 restricted shares that generally vest in May 2011, but as to which he currently has voting power, and 1,230 restricted shares that generally vest in May 2012, but as to which he currently has voting power.

(13)	Includes 9,000 shares that may be acquired upon exercise of options, 75 restricted shares that generally vest in May 2010, but as to which Ms. Hornbaker currently has voting power, 69 restricted shares that generally vest in May 2011, but as to which she currently has voting power, and 1,230 restricted shares that generally vest in May 2012, but as to which she currently has voting power.

(14)	Includes 3,000 shares that may be acquired upon exercise of options, 75 restricted shares that generally vest in May 2010, but as to which Mr. Kling currently has voting power, 69 restricted shares that generally vest in May 2011, but as to which he currently has voting power, and 1,230 restricted shares that generally vest in May 2012, but as to which he currently has voting power.

(15)	Includes 5,000 shares that may be acquired upon exercise of options, 75 restricted shares that generally vest in May 2010, but as to which Mr. Lance currently has voting power, 69 restricted shares that generally vest in May 2011, but as to which he currently has voting power, and 1,230 restricted shares that generally vest in May 2012, but as to which he currently has voting power.


(16)	Includes 9,000 shares that maybe acquired upon exercise of options, 75 restricted shares that generally vest in May 2010, but as to which Mr. McLain currently has voting power, 69 restricted shares that generally vest in May 2011, but as to which he currently has voting power, and 1,230 restricted shares that generally vest in May 2012, but as to which he currently has voting power. Also includes 52 shares held by Mr. McLain’s spouse, as to which shares Mr. McLain disclaims beneficial ownership.

(17)	Includes 15,000 shares that may be acquired upon exercise of options, 75 restricted shares that generally vest in May 2010, but as to which Mr. Raisbeck currently has voting power, 69 restricted shares that generally vest in May 2011, but as to which he currently has voting power, and 1,230 restricted shares that generally vest in May 2012, but as to which he currently has voting power.

(18)	Includes 10,000 shares that may be acquired upon exercise of options, 75 restricted shares that generally vest in May 2010, but as to which Mr. Wood currently has voting power, 69 restricted shares that generally vest in May 2011, but as to which he currently has voting power, 1,230 restricted shares that generally vest in May 2012, but as to which he currently has voting power, and 4,287 shares pledged as security in a margin brokerage account. Also includes 1,000 shares held by Mr. Wood’s spouse, as to which shares Mr. Wood disclaims beneficial ownership.

(19)	Includes a total of 1,483,523 shares that may be acquired upon exercise of options and 4,361 shares allocated to executive officers’ ESOP accounts. Also includes 82,674 shares owned by the Eastman Chemical Company Foundation, Inc., of which shares Mr. Espeland and one other executive officer not named above may each be deemed a beneficial owner by virtue of their shared voting and investment power as directors of the Foundation.

Common Stock and Common Stock Units

As described elsewhere in this proxy statement, in addition to shares of Eastman common stock beneficially owned, certain executive officers and directors have units of common stock credited to their individual stock accounts in the Eastman Executive Deferred Compensation Plan (the “EDCP”) and in the Directors’ Deferred Compensation Plan (the “DDCP”), respectively.

Eastman has stock ownership guidelines for its directors and executive officers. These guidelines require such persons to acquire and maintain a stake in the Company valued at $250,000 for non-employee directors, five times annual base pay for the Chief Executive Officer, and two and one-half times annual base pay for the other executive officers named in the Summary Compensation Table. Common stock units are counted with certain shares of common stock beneficially owned (excluding certain shares that may be deemed beneficially owned under SEC rules, such as shares underlying options and shares over which the individual shares voting and investment power but in which the individual has no pecuniary interest) for purposes of the Company’s stock ownership guidelines. Common stock units represent hypothetical “investments” in Eastman common stock. The value of one common stock unit is equal to the market value of one share of Eastman common stock. Although the DDCP and EDCP allow common stock units to be paid out only in the form of cash, and not in shares of common stock, common stock units create essentially the same stake in the market performance of the Company’s common stock as do actual shares of common stock. The table below shows, for each director and each executive officer named in the Summary Compensation Table, and for the directors, the named executive officers, and the other executive officers as a group, the aggregate of the number of shares of common stock beneficially owned by such person and group, as set forth in the preceding table, and the number of common stock units credited to the stock accounts of such person and group as of December 31, 2009. The table below is included to provide a better indication of the stake of the named individuals, and of the group, with respect to Eastman common stock.


	Number of
	Shares of
	Common Stock
	and Common
	Stock Units
Name	Beneficially Owned

J. Brian Ferguson		961,279
James P. Rogers		550,800
Mark J. Costa		122,746
Curtis E. Espeland		123,190	(1)
Theresa K. Lee		118,012
Ronald C. Lindsay		73,526
Gary E. Anderson		10,961
Michael P. Connors		15,788
Stephen R. Demeritt		28,105
Robert M. Hernandez		29,681
Renée J. Hornbaker		21,536
Lewis M. Kling		9,226
Howard L. Lance		12,962
Thomas H. McLain		15,606
David W. Raisbeck		28,987
Peter M. Wood		21,855
Directors, named executive officers, and other executive officers as a group (20 persons)		2,383,574	(1)


(1)	Includes 82,674 shares owned by the Eastman Chemical Company Foundation, Inc., over which shares Mr. Espeland and one other executive officer not named share voting and investment power as directors of the Foundation but in which shares such executive officers have no pecuniary interest.

PRINCIPAL STOCKHOLDERS

The following table sets forth information about persons we know to be the beneficial owners of more than five percent of Eastman common stock as of December 31, 2009.


	Number of
	Shares of			Percent
	Common Stock			of
Name and Address of Beneficial Owner	Beneficially Owned			Class(1)


BlackRock, Inc.		6,953,943	(2)		9.61	%
40 East 52nd Street New York, New York 10022


LSV Asset Management		3,744,385	(3)		5.17	%
1 North Wacker Drive Suite 4000 Chicago, Illinois 60606


Todasa S.A.		4,452,434	(4)		6.15	%
Via Augusta, 200 6th Floor Barcelona, Spain 08201


The Vanguard Group, Inc.		4,081,898	(5)		5.64	%
100 Vanguard Boulevard Malvern, Pennsylvania 19355


(1)	Based upon the number of shares of common stock outstanding and entitled to be voted at the meeting as of March 10, 2010, the record date for the Annual Meeting.
(2)	As of December 31, 2009, based on a Schedule 13G filed with the SEC by BlackRock, Inc. as parent holding company of certain broker-dealer and investment adviser entities, including certain non-U.S. institutions. According to the Schedule 13G, BlackRock, Inc. and such affiliated entities together have sole investment and voting power with respect to all of such shares.
(3)	As of December 31, 2009, based on a Schedule 13G filed with the SEC by LSV Asset Management, an investment adviser. According to the Schedule 13G, LSV Asset Management has sole investment and voting power with respect to all of such shares.
(4)	As of December 12, 2007, based on a Schedule 13G filed with the SEC by Todasa S.A. According to the Schedule 13G, Todasa has sole investment and voting power with respect to all of such shares.
(5)	As of December 31, 2009, based on a Schedule 13G filed with the SEC by The Vanguard Group, Inc., an investment adviser. According to the Schedule 13G, The Vanguard Group has sole investment power with respect to 3,978,214 of such shares, shared investment power with respect to 103,684 of such shares, and sole voting power with respect to 115,984 of such shares.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This “Compensation Discussion and Analysis” is intended to provide context for the executive compensation information detailed in the tables and narrative in the remaining sections of this proxy statement under “Executive Compensation”. What follows is a summary of compensation objectives for executive officers, the relationship of corporate performance to executive compensation, and the bases for the compensation of executive officers. The Compensation and Management Development Committee of the Board of Directors (the “Compensation Committee”) establishes and oversees the administration of the policies, programs, and procedures for evaluating, developing, and compensating our senior management, and determines the components, structure, forms, terms, and amounts of the compensation of our executive officers.

Overview

The Compensation Committee believes that the compensation of the executive officers is appropriate based on Eastman’s performance and the competitive market. For 2009, the compensation of the executive officers named in the “Summary Compensation Table” below (the “named executive officers”) consisted of three principal elements: long-term stock-based awards in the form of performance share and restricted stock unit awards and stock option grants, annual variable cash pay, and base salary. The Company uses annual variable cash pay to tie executive compensation to attainment of key company and individual objectives, and uses long-term stock-based pay to link the executive compensation program and the long-term interests of the Company’s stockholders and to attract and retain an outstanding executive team. The Compensation Committee believes that this mix of executive pay components strikes an appropriate balance between the short- and long-term focus of the executives and the types of performance incented and risks encouraged, and aligns their interests with those of stockholders.

In 2009, the executive officers:


	•	had their annual base pay decreased in March 2009 by five percent, consistent with the Company’s reduction of the base pay of all employees in response to the global recession and then-current business conditions, and increased in December 2009 to restore the five percent base salary reduction, consistent with the restoration of the base pay of employees;

	•	had their annual base salaries and target annual variable cash pay increased to reflect new or additional responsibilities during 2009 (Messrs. Rogers, Costa, and Lindsay);

	•	received annual variable cash pay awards ranging from 101% to 135% of target amounts as a result of the Company’s above-target corporate earnings from operations and the individual executives’ organizational and personal performance meeting or exceeding expectations;

	•	received payouts of common stock of 130% of target award levels under previously awarded long-term performance shares as a result of the Company’s three-year total stockholder return ranking in the 2nd quintile of compared companies and average return on capital of 0.08% in excess of target return;

	•	received stock option grants and long-term performance share and restricted stock unit awards designed to link their future pay to long-term performance of the Company and return to other stockholders and as retention incentive; and

	•	had certain of their perquisites and personal benefits eliminated and their base pay increased as partial replacement of the eliminated perquisites.

Management Compensation Philosophy and Program

Our Business. Eastman is a global chemical company which manufactures and sells a broad portfolio of chemicals, plastics, and fibers products to customers throughout the world. The Company’s products and operations are managed and reported in five operating segments: the Coatings, Adhesives, Specialty Polymers, and Inks (“CASPI”) segment, the Fibers segment, the Performance Chemicals and Intermediates (“PCI”) segment, the Performance Polymers segment, and the Specialty Plastics segment. In addition to these segments, the Company

manages certain strategic initiatives at the corporate level, including various research and development initiatives. Eastman’s objective is to be an outperforming chemical company through solid financial results from its core businesses and its plans for profitable growth. Management believes that the Company can increase the revenues from its core businesses with increasing profitability through a balance of new applications for existing products, development of new products, and sales growth in adjacent markets and emerging geographic regions. These revenue and earnings increases are expected to result from organic initiatives and through acquisitions and joint ventures.

Our Compensation Philosophy. The Company’s business strategy for value creating growth is to leverage the capabilities of its employees to innovate and execute its growth strategy while remaining focused on positive free cash flow generation. Our compensation philosophy supports this strategy by stressing the importance of pay for corporate and individual performance in meeting strategic and business goals for value creation and financial strength and flexibility, and maintains flexibility to meet changing employee, business, and market conditions. Our executive compensation program is designed to attract and retain a talented and creative team of executives who will provide disciplined leadership for the Company’s success in dynamic, competitive markets. The Company seeks to accomplish this by motivating executives with an appropriate mix of compensation elements described in more detail below.

Our Compensation Objectives. With the management compensation program, our primary objectives are to:


	•	Provide the appropriate amount of annual pay, including a mix of base and variable pay, that allows us to compete for talent in the job market.

	•	Attract and retain highly-qualified executives by providing incentives for the attainment of the Company’s strategic business objectives, while rewarding superior performance.

	•	Provide appropriate short-term and long-term incentives to reward the attainment of short-term and long-term corporate and individual objectives.

	•	Ensure performance targets are appropriately challenging and properly aligned with the business strategy and stockholder interests.

	•	Maintain balance in the types of corporate and individual performance incented and the levels and types of risks managers are encouraged to evaluate and take, and ensure that compensation does not encourage managers to take unnecessary or excessive risks.

Components of our Management Compensation Program and How Each Component Complements our Philosophy and Objectives. Our management compensation program has three primary components:



Base pay		Provides a market-based annual salary at a level consistent with the individual’s position and contributions.

Variable pay		Designed to align the executives’ financial interests with the Company’s shorter-term business objectives, making a portion of each manager’s annual cash compensation dependent upon the annual success of the Company, organizational performance, and attainment of individual objectives.

Stock-based incentive pay		Encourages an ownership mindset by aligning the interests of senior managers with other stockholders, focusing on the achievement of strategic long-term financial objectives and outperforming other peer companies.

The Compensation Committee, with the assistance of management and the Committee’s outside consultant, designs, administers, and assesses the effectiveness of all compensation elements against the market and our overall compensation philosophy. The table below describes each element and its primary links to the objectives of our compensation philosophy.

Reward

Balance

Reward

Attract

Organizational

Among

Long-Term

and

Performance and

Performance

Performance in

Retain

Attainment

Incented

Alignment With

Compete

Executive

of Individual

And Risk

Stockholders’

Compensation Element

in Market

Talent

Objectives

Management

Interests

Annual Base Cash Pay

Annual Variable Cash Pay

Stock-Based Long-Term Incentive Pay — Stock Options

Stock-Based Long-Term Incentive Pay — Performance Shares

Stock-Based Long-Term Incentive Pay — RSUs

Other Compensation and Benefits

Each year, the Compensation Committee conducts a review of the relative mix of the compensation components to those of peer companies. As described below, the Company believes that a significant portion of our executives’ compensation should be at risk to business and individual performance, and that the at-risk amount should increase with the executive’s level of responsibility. There is also a need to ensure a balance between the short-term and long-term focus of the executives, and in the types of performance incented and risks encouraged, as well as to align their interests with those of stockholders, by providing a meaningful portion of their compensation in the form of stock-based pay.

Other Compensation and Benefits. The Company’s executive officers also participate in benefits plans generally available to all other employees. We have also entered into change in control agreements with certain of our executive officers and provide a modest program of executive perquisites and personal benefits as further described in this Compensation Discussion and Analysis and the tables that follow.

Mix of Total Compensation. The following charts illustrate the percentage of total compensation for our CEO and our other named executive officers on average, respectively, represented by each element of compensation for 2009. The CEO compensation is the performance share award payout for 2007-2009 to Mr. Ferguson and Mr. Rogers’ CEO base pay annualized and actual variable cash pay, option grant, and all other compensation.


*		Grant date fair value of options granted in 2009, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 (Stock Compensation). See Note 1 to the Summary Compensation Table below.

**		Market value of shares of common stock paid out under performance shares previously awarded for the 2007-2009 performance period, and grant date fair value of restricted stock units awarded in 2009 computed in accordance with FASB ASC Topic 718.

***		Perquisites and other personal benefits, annual Company contributions to defined contribution plans, and reimbursement for payment of taxes on compensation and benefits.

Each component of pay plays an important role in accomplishing our compensation objectives:


	•	Base cash pay provides a market-based annual salary at a level consistent with the individual’s position and contributions.

	•	The Company’s short-term variable cash incentive pay program is designed to align management’s financial interests with the Company’s short-term business objectives and to take into account the incentive value and


		level of influence on Company results by participants in the program. Individual variable pay for management employees correlates to the Company’s annual financial results compared to targeted results. The total amount available for variable pay is based upon annual financial results. All levels of management participate in the short-term variable cash incentive pay program in order to retain a focus on execution of the Company’s short-term strategic and tactical goals.


	•	Stock-based incentive compensation, including stock options, performance shares, and restricted stock units, is designed to create incentives for our management to meet strategic long-term objectives, which are aligned with the creation of value for the Company’s stockholders. Stock-based incentive compensation is generally awarded to upper levels of management with the most influence over the strategic, long-term direction of the Company.

Risk Analysis of Executive Compensation. The balance of short-term and long-term compensation as devices to drive individual behaviors and risk management is carefully considered in the design and administration of the Company’s compensation programs. The management compensation program is structured so that a considerable amount of compensation of our executives is tied to the long-term performance of Eastman. We strive to avoid disproportionately large short-term incentives that could encourage unnecessary risk-taking which is not in the Company’s long-term interests. While a significant portion of our executive compensation is performance-based, we do not believe that our philosophy or objectives encourage unnecessary or excessive risk-taking. While risk is inherent in any strategy for growth, the Compensation Committee has focused our management compensation program on aligning the Company’s compensation with the long-term interests of Eastman, and has designed elements of our executive compensation program to discourage management decisions that could pose inappropriate long-term risks to the Company and its stockholders, as follows:


	•	The compensation of our executive officers is not overly-weighted toward short-term incentives. For instance, our CEO’s target variable cash pay for 2009 was about 17% of his total target compensation, and the target variable cash pay for the other named executive officers was 20% of their total target pay. Moreover, annual variable cash pay awards are capped at 200% of an executive’s target award to protect against disproportionately large short-term incentives, and the Compensation Committee has broad discretion in determining the amount of variable cash payouts to executives based upon individual performance and other factors, including whether an executive has caused Eastman to take unnecessary or excessive risk.

	•	Our stock ownership guidelines require the executive officers to hold Eastman stock having a value of at least two-and-one-half times base annual pay, or five times in the case of the CEO. See “Stock Ownership of Directors and Executive Officers”. This ensures that each executive will have a significant amount of personal wealth tied to the long-term performance of Eastman stock.

	•	The largest percentage of total target executive pay is stock-based long-term incentive compensation that vests over a period of years. The stock payout combined with a vesting period encourages our executives to focus on maximizing Eastman’s long-term performance. These grants and awards are made annually, so executives will continue to have unvested awards that will provide value only if our business is managed for the long term.

	•	A significant portion of executives’ long-term incentive compensation consists of performance shares. Performance share payouts are tied to how Eastman performs on certain metrics identified by the Compensation Committee periodically as appropriately driving long-term stockholder value over a three-year period, which focuses management on sustaining the Company’s long-term performance. These awards also have overlapping performance periods, so risks taken to inappropriately increase the payout under one performance share award in the near-term could significantly jeopardize the potential long-term payouts under other awards. To further ensure that there is not a significant incentive for unnecessary risk-taking, the payout of these awards has been capped at 300% of target.

	•	The variety of performance metrics set by the Compensation Committee to determine variable pay (for 2009, operating earnings and earnings per share, cash flow, return on capital, capital spending, employee safety, and total stockholder return relative to peer companies) are intended to appropriately align our management’s decisions to long-term creation of stockholder value.


	•	Company policy requires reimbursement by the CEO and the CFO of certain variable and incentive compensation in the event of an accounting restatement due to material noncompliance by the Company with any financial reporting requirements as the result of misconduct, and the plan under which our long-term stock-based incentive compensation awards are made requires reimbursement by award recipients of certain amounts in the event of an accounting restatement due to material noncompliance by the Company with any financial reporting requirements as the result of misconduct.

We believe that this combination of factors encourages our executives to manage Eastman and execute our strategy for growth in a prudent manner.

Review of 2009 Executive Compensation

The Compensation Committee reviewed overall compensation of the Chief Executive Officer and the other executive officers included in the Summary Compensation Table below (collectively referred to as the “named executive officers”) and determined each component of executive compensation for 2009 as described below.

The Compensation Committee also:


	•	Reviewed the value of each type of compensation and benefit for each of the executive officers, including short-term cash and long-term stock-based compensation, perquisites and personal benefits, deferred accounts, and retirement plans and determined the amounts, as adjusted by the Committee during 2009 as described above and below, individually and in the aggregate, were appropriate and in line with internal and external market comparisons.

	•	Considered the estimated value of outstanding unvested, unexercised, and unrealized stock-based awards in its review of the types and values of each executive officer’s compensation.

	•	Determined the amount and forms of compensation considering the following:


	•	individual performance,

	•	compensation relative to that for similar positions in other companies,

	•	the mix of short- and long-term compensation, and total compensation, relative to other executive officers and other employees,

	•	whether the features of each form of compensation are appropriately balanced in terms of the types of corporate and individual performance being incented, the levels and types of risk they encourage managers to evaluate and take, and whether the compensation encourages managers to take unnecessary risks,

	•	background information and recommendations from the Company’s management compensation organization and from the external compensation consultant engaged by the Compensation Committee, and

	•	the recommendations of the Chief Executive Officer for the other named executive officers.

In connection with its review of external market data, the Compensation Committee has directly engaged Hewitt Associates (“Hewitt”) as its external compensation consultant. Under the terms of Hewitt’s engagement by the Compensation Committee, Hewitt reports to, and receives its direction from, the Compensation Committee, and a representative of Hewitt attends each meeting of the Compensation Committee as its advisor. Hewitt provides the Compensation Committee with third-party survey information used in setting short- and long-term compensation levels, perspective on emerging trends in compensation issues, and expertise in incentive compensation structure, terms, and design, and does not provide other non-executive compensation consulting services to the Company. The Company’s management also uses the services of several other outside firms for compensation analysis, third-party surveys, and management pay research and analysis.

Elements of our Executive Compensation

Annual Cash Compensation — Base Pay and Variable Pay

How Base Pay and Variable Pay Levels Are Determined. For executive officers, targeted total cash compensation is intended to be competitive with comparable pay for similar jobs when target levels of corporate, organizational, and individual performance are achieved. The targeted levels of cash compensation are based upon information provided by Hewitt and publicly available information. For 2009, a significant portion of each executive officer’s pay was variable. Depending upon Company, organizational, and individual performance, executive officers could receive more or less than the target amount.

For 2009, the Compensation Committee compared total cash compensation levels for the Company’s executive officers with those of the following companies selected based upon industry, number of employees, revenues, number and type of commercialized products, and market capitalization:


Air Products and Chemicals, Inc.		Olin Corporation
The Dow Chemical Company		Praxair Inc.
Ecolab Inc.		The Scotts Miracle-Gro Company
FMC Corporation		Solutia Inc.
H. B. Fuller Company		The Valspar Corporation
Nalco Holding Company

As requested by the Compensation Committee, Hewitt provided benchmarking analysis of the comparable companies’ total cash compensation information, and also advised the Compensation Committee of general market cash compensation practices and trends. In determining each executive officer’s targeted total cash compensation, the Compensation Committee also applied its judgment in considering the competitive market for executive talent, comparative pay levels of each other executive officer, relative cash compensation of other jobs in the Company, and differences between the Company’s executive positions and those in the benchmark information. For 2009, the Compensation Committee set the targeted cash pay for executives within a range of 10% above or below the median level of the total cash compensation for comparable positions of the peer companies.

Base pay. Other than increases in the base pay of Messrs. Rogers, Costa, and Lindsay for changes in job responsibilities, for 2009 the Committee did not increase the base pay of executives, consistent with the Company’s decision in December 2008 that the base salaries of employees for 2009 would not be increased from 2008 levels in response to the global recession and then-current business conditions. The base pay increases were based on review of market competitive pay levels. In March 2009 the Committee decreased the base pay of executives by five percent, consistent with the Company’s reduction of the base pay of employees, and in December 2009 the Committee restored the five percent base salary reduction, consistent with the restoration of the base pay of employees.

Variable Cash Pay — Unit Performance Plan. For 2009, the variable portion of cash compensation paid to the executive officers was determined solely under the Unit Performance Plan (the “UPP”). The UPP is designed to determine a portion of the annual cash compensation of management level employees according to corporate performance and the attainment of certain individual objectives and expectations. The UPP is intended to provide an incentive for superior business and individual performance and to tie the interests of our management level employees, including our named executive officers, to the performance of our businesses and the interests of our stockholders.

The amount of the award pool from which UPP payouts are made is determined annually by the Compensation Committee, and is based upon annual performance of the Company. For 2009, the Compensation Committee determined that the appropriate measure of corporate performance under the UPP was earnings from operations because such measure would align with the Company’s business objectives for 2009. Annual performance goals are established such that the target level is deemed reached if corresponding Company performance goals for the year are achieved. In determining earnings from operations for the purpose of measuring performance, the UPP provides for adjustments by the Compensation Committee for certain cost, charge, and income items, typically the same as those excluded from operating earnings in the non-GAAP pro forma financial measures disclosed by the Company

in its public sales and earnings disclosures. The target level for 2009 earnings from operations ($500 million) corresponded to the Company’s operating earnings target under the annual business plan for 2009 as approved by the Board in late 2008.

The total UPP award pool is determined as the aggregate of the UPP payouts for each participant if the individual’s organizational and individual performance were at target levels, multiplied by a “performance factor” determined by actual corporate performance compared to the pre-set performance goals. In addition, the Committee may, in its discretion, adjust the award pool to reflect overall corporate performance and business and financial conditions; for 2009, the total Company award pool was not so adjusted.

At the end of 2008, the Compensation Committee evaluated the Company’s financial and strategic performance targets under the Company’s annual business plan for 2009 and set the UPP payout “performance factor” multipliers at 0% of aggregate target payouts if earnings from operations were below 71% of the target level; at 100% of aggregate target payouts if earnings from operations were equal to the target; and at 200% of aggregate target payouts if earnings from operations were at or above the maximum, as shown in the following table. Linear interpolation is used to determine the “performance factor” and award pool if actual performance falls between the threshold and target or between the target and maximum levels. The 2009 UPP threshold, target, and maximum adjusted earnings from operations targets for UPP award pool funding were:

Threshold

Target

Maximum

(50% Award Pool Funding)

(100% Award Pool Funding)

(200% Award Pool Funding)

Earnings From Operations

355 million

500 million

645 million

Earnings from operations for 2009, as adjusted, were $517 million, resulting in a “performance factor” of 1.12 and a UPP award pool for all management level employees, including the named executive officers, of $25.4 million. The calculation of earnings from operations under the UPP for 2009 was adjusted to exclude the impact on financial results of net asset impairments and restructuring charges for the Company’s discontinuance of its Beaumont, Texas, industrial gasification project and for severance resulting from a reduction in force. These adjustments, which were the same as those excluded from operating earnings in the non-GAAP pro forma financial measures disclosed by the Company and were consistent with the Compensation Committee’s past practice, increased the calculated earnings from operations under the UPP by $200 million. Without the adjustments, earnings from operations would have been below the threshold for UPP award pool funding.

The Chief Executive Officer, in consultation with the other executive officers, determined the allocation of the overall UPP award pool to the various organizations within the Company based on their assessment of the performance of each organization relative to objectives established at the beginning of the performance year. The Compensation Committee determines the portions of the overall UPP award pool to the CEO and to the executive officers as a group. In 2009, the named executive officers (other than the CEOs) participated in an organization consisting of all executive officers directly reporting to the Chief Executive Officer. Mr. Ferguson (until May 7, 2009) and Mr. Rogers (beginning May 7, 2009) participated in the UPP in an organization established for the Chief Executive Officer.

Once each organization’s portion of the overall award pool was determined, management within each organization (the Chief Executive Officer in the case of the named executive officers other than the CEO and, in the case of the Chief Executive Officer, the Compensation Committee) allocated the organization’s portion of the Company award pool for individual payouts, based upon individual performance against financial, organizational, and strategic performance objectives and expectations established at the beginning of the performance year (described below for the CEOs and the other named executive officers).

For each executive officer, including the named executive officers, the Compensation Committee established a target UPP incentive opportunity based upon a peer company review, and expressed as a percentage of base salary. The individuals with the greatest overall responsibility for corporate performance had larger incentive opportunities in comparison to their base salaries in order to weight their overall pay mix more heavily towards

performance-based compensation. For the named executive officers, the target annual incentive opportunities for 2009 were as follows:


		Target UPP
		Opportunity
Name	Title	as % of Base Salary

J. Brian Ferguson	CEO (until May 7, 2009)	100% (0% as Executive Chairman)
James P. Rogers	President and Chemicals & Fibers Business Group Head (until May 7, 2009) and CEO (from May 7, 2009 through year-end 2009)	80% (100% as CEO)
Curtis E. Espeland	Senior Vice President and Chief Financial Officer	70%
Mark J. Costa	Executive Vice President, Polymers Business Group and Chief Marketing Officer (until May 7, 2009) and Executive Vice President, Specialty Polymers, Coatings and Adhesives and Chief Marketing Officer (from May 7, 2009 through year-end 2009)	75%
Ronald C. Lindsay	Senior Vice President, Corporate Strategy and Regional Leadership (until May 7, 2009) and Executive Vice President, Performance Polymers and Chemical Intermediates (from May 7, 2009 through year-end 2009)	75%
Theresa K. Lee	Senior Vice President, Chief Legal Officer and Corporate Secretary	65%

The Compensation Committee established individual financial, organizational, and strategic performance objectives and expectations for Mr. Ferguson and Mr. Rogers for their respective service as CEO, and determined their pool allocations and payouts (equal to 107% and 108% of their respective target variable pay amounts) based upon the Compensation Committee’s assessment of their respective performance against these objectives for 2009 as described below.

The portion of the overall 112% of target UPP award pool allocated to the other named executive officers was $1.415 million (equal to 109% of their aggregate individual target variable pay amounts), with their individual payouts based upon the CEO’s assessment of each executive’s individual performance compared to their objectives as described below.

For 2009, the following corporate performance target objectives were established for the CEOs and the other named executive officers, with no specific weighting among the objectives, and actual performance against these objectives was assessed by the Compensation Committee (for the CEOs) and by the CEO and the Compensation Committee (for the other named executive officers) in determining the amounts of the individual payouts from the respective award pools:


Measure	Target	Actual

Earnings from operations*	$500 million*	$517 million*
Earnings per share*	$3.90/share*	$3.63/share*
Cash from operating activities	$650 million	$758 million
Capital expenditures	<$450 million	$310 million
Employee safety — days away from work (measured as days away from work per 200,000 hours worked)	< 0.15	0.11
OSHA recordable injuries (measured per 200,000 hours worked)	< 0.75	0.53


*		Non-GAAP financial measure, with adjustments as described above.

Additionally, each of the named executive officers had individual performance commitments targeted to each executive’s area of responsibility, with no specific weighting among the commitments, and actual performance as

assessed by the Compensation Committee (for the CEOs) and by the CEO and the Compensation Committee (for the other named executive officers), as follows:


Officer	Commitments		Performance

J. Brian Ferguson* (CEO until May 7, 2009)	•	Facilitate transition of CEO responsibilities to new CEO	Exceeded
	•	Continue to improve corporate governance practices	Met
	•	Adjust and redirect human and financial resources to align to highest and best uses as defined by corporate strategy	Met
	•	Monitor and change incentives, structures, and personnel to manage during recession in order to optimize operational and financial results	Met
	•	Executive management and leadership development	Met
	•	Overall Company financial and business performance (primarily earnings from operations, earnings per share, and cash flow)	Met partially (EFO and cash flow)
	•	Execution of strategic initiatives (primarily Beaumont, Texas industrial gasification project)	Did not meet
James P. Rogers** (President and Chemicals and Fibers Group Head until May 7, 2009 and CEO from May 7, 2009 through year-end 2009)	•	Overall financial and business performance of CASPI, PCI, and Fibers (primarily earnings from operations and cash flow) (until May 7, 2009)	Exceeded
	•	Successful transition into new CEO responsibilities	Exceeded
	•	Implement plans to achieve growth goals for CASPI, PCI, and Fibers (until May 7, 2009)	Met
	•	Continue to improve corporate governance practices	Met
	•	Adjust and redirect human and financial resources to align to highest and best uses as defined by corporate strategy	Met
	•	Monitor and change incentives, structures and personnel to manage during recession in order to optimize operational and financial results	Met
	•	Executive management and leadership development	Met
	•	Overall Company financial and business performance (primarily earnings from operations, earnings per share, and cash flow)	Met partially (EFO and cash flow)
	•	Execution of strategic initiatives (primarily Beaumont, Texas industrial gasification project)	Did not meet


Officer	Commitments		Performance

Curtis E. Espeland	•	Implement cash conversion cycle and working capital initiatives	Exceeded
		• Positive free cash flow (cash from operations less capital expenditures and dividends)	+$320 million
		• Cash from operating activities - $650 million	$758 million
	•	Lead discretionary spending control during recession	Exceeded
	•	Implement investor relations initiatives to clarify communication of core performance and strategy and support transition to new CEO and CFO	Exceeded
	•	Enhance currency and commodity risk management	Met
	•	Evaluate merger and acquisition opportunities and recommend actions for targeted acquisitions	Met
Mark J. Costa (Executive Vice President, Polymers Business Group and Chief Marketing Officer	•	Manage and implement innovation portfolio, sustainability strategy, and branding initiatives	Exceeded
until May 7, 2009 and Executive Vice President, Specialty Polymers, Coatings and Adhesives and Chief Marketing Officer	•	Specialty Plastics growth strategy (Tritan^tm, core co-polyester, and displays growth initiatives)	Met
from May 7, 2009 through year-end 2009)	•	Manage and support marketing, sales and pricing capabilities initiatives	Met
	•	CASPI (partial year), Performance Polymers (partial year), and Specialty Plastics business results:	Did not meet
		• EFO - $239 million***	$186 million
		• Cash from operating activities - $363 million	$343 million
Ronald C. Lindsay (Senior Vice President, Corporate Strategy and Regional Leadership until May 7, 2009	•	Evaluate and recommend decision on Beaumont, Texas industrial gasification project	Met
and Executive Vice President, Performance Polymers and Chemical Intermediates from May 7, 2009 through	•	Evaluate olefins stream strategic alternatives, including evaluation of improved cost position and growth	Met
year-end 2009)	•	Outside U.S. businesses growth strategy, restructuring, and business development leadership (until May 7, 2009)	Met
	•	Performance Polymers (partial year) and PCI (partial year) business results:	Did not meet
		• EFO - $134 million***	$7 million
		• Cash from operating activities - $198 million	$139 million


Officer	Commitments		Performance

Theresa K. Lee	•	Manage intellectual property legal strategy	Exceeded
	•	Develop and lead implementation and execution of health, safety, and environment public policy and compliance strategy and initiatives, including greenhouse gas emission and energy policy advocacy and REACH compliance	Met
	•	Support corporate growth initiatives	Met
	•	Coordination and consolidation of corporate assessments and audits	Met
	•	Lead continued improvement of corporate governance practices	Met


*		Mr. Ferguson participated in the UPP until May 7, 2009 as CEO and did not participate in the UPP from May 7, 2009 until December 31, 2009 as Executive Chairman.

**		Mr. Rogers’ performance objectives were based on the position of President and Chemicals & Fibers Business Group Head until May 7, 2009 and were for CEO from May 7, 2009 until December 31, 2009.

***		Non-GAAP financial measure, with adjustments as described above.

The Compensation Committee determined that, based upon the actual corporate performance against targets as listed above, each executive’s individual performance and leadership that resulted in this performance was satisfactory and met or exceeded expectations for purposes of determining his or her allocated individual portion of the respective award pools (107% and 108% of Mr. Ferguson’s and Mr. Rogers’ respective CEO individual target variable pay amounts and 109% of the other named executives’ aggregate individual target variable pay amounts).

Additionally, the Compensation Committee evaluated each executive’s performance against his or her individual commitments as described above and concluded that each executive’s individual performance in these areas was overall at or above target performance for purposes of determining their individual portions of the respective award pools.

Based upon the amount of the UPP award pool allocated to the CEOs and to the other named executive officers, respectively, as described above, and the assessments of the CEOs’ and other executives’ individual performance against established goals and expectations as described above, the Compensation Committee determined the amounts of the individual payouts from the allocated portions of the UPP award pools based upon the Committee’s and the CEO’s judgment of overall Company performance, each individual executive’s overall contribution and leadership, and external business conditions and circumstances, as follows:


					Actual UPP Payout
Named Executive Officer	Actual UPP Payout		Target UPP Payout		as % of Target

J. Brian Ferguson	$	400,000	$	375,000		107%
James P. Rogers		1,000,000		926,250		108%
Curtis E. Espeland		370,000		297,500		124%
Mark J. Costa		380,000		377,250		101%
Ronald C. Lindsay		335,000		331,875		101%
Theresa K. Lee		330,000		286,000		115%

Stock-Based Incentive Pay

Equity-Based Compensation Program. Equity-based compensation is designed to facilitate stock ownership in order to link senior managers’ pay to long-term return to other stockholders. Important elements of the current executive equity-based compensation program are:


Stock Options		Stock option program, implemented under the Company’s Omnibus Long-Term Compensation Plan (the “Omnibus Plan”), creates a direct link between compensation of key Company managers and long-term performance of the Company through appreciation of stock price.
Performance Shares		Awarded under the Omnibus Plan to provide an incentive for key managers to earn stock awards by meeting specified business or individual performance goals.
Other Stock-Based Incentive Pay		Under the Omnibus Plan, the Compensation Committee may also award additional stock-based compensation (with or without restrictions), performance units, restricted stock units, or additional options, including options with performance-based or other conditions to vesting.
Stock Ownership Expectations		Established for executive officers to encourage long-term stock ownership and the holding of shares awarded under the Omnibus Plan or acquired upon exercise of options. Over a five year period, executive officers are expected to accumulate stock with a value of two and one-half times their annual base pay (five times base pay for the Chief Executive Officer) in Company stock or stock equivalents. All named executive officers have met or are on schedule to meet their ownership expectations.

How Stock-Based Incentive Pay Levels Were Determined. The Compensation Committee established the value and mix of total stock-based incentive pay for 2009 by considering recommendations from Hewitt based on long-term compensation surveys of the following manufacturing, industrial, and chemical companies of comparable size in the same market as the Company for executive talent:


Air Products and Chemicals, Inc.		Olin Corporation
The Dow Chemical Company		Praxair Inc.
Ecolab Inc.		The Scotts Miracle-Gro Company
FMC Corporation		Solutia Inc.
H. B. Fuller Company		The Valspar Corporation
Nalco Holding Company

As requested by the Compensation Committee, Hewitt provided benchmarking analysis of this long-term stock-based compensation information, and also advised the Compensation Committee of general market stock-based incentive compensation practices and trends.

Stock options and performance shares were awarded so that total stock-based incentive compensation for 2009 approximated the mid-range of total stock-based compensation of the compared companies. The current values of total stock-based incentive pay for 2009 ranged from 34% to 65% of total compensation for the named executive officers.

The Compensation Committee also considered the estimated value of all outstanding unvested, unexercised, and unrealized stock-based awards in determining stock-based incentive pay levels. The Committee made no changes to award levels based on the review of outstanding awards.

Stock Options. In 2009, the Compensation Committee determined to deliver approximately 40% of each executive officer’s stock-based equity value as stock options. In determining the size of option awards, the Compensation Committee used the services of Hewitt to derive values of options using a variation of the Black-

Scholes option-pricing model. Computation of the value of option awards is comparable to values determined under FASB ASC Topic 718 and reported in the “Grants of Plan Based Awards” table below.

Long-Term Performance Shares. In 2009, the Company awarded performance shares for the 2010 - 2012 performance period to each executive officer, representing approximately 60% of each executive officer’s stock-based equity value, to provide incentives for exceeding internal financial objectives and external return objectives versus a peer group of companies.

In 2007, the Compensation Committee revised the percentage of long-term performance shares to overall stock based pay in order to reduce the Company’s “burn rate” (generally defined as the total number of shares subject to all equity awards granted during the year divided by the total number of shares outstanding at the end of the year) and to reduce its “overhang” (generally defined as the number of shares subject to granted and outstanding equity awards plus the number of shares reserved for future awards, divided by the sum of total shares outstanding, granted and outstanding equity awards, and shares reserved for future awards).

For performance shares, performance is determined by comparing the Company’s multi-year performance as measured against a return on capital target established at the beginning of the three year performance period, and the Company’s total return to stockholders (change in stock price plus dividends declared during the performance period, assuming reinvestment of dividends) relative to a peer group of industrial companies comprising the Standard and Poor’s “Materials Sector” from Standard and Poor’s Super Composite 1500 Index. The return on capital target is established considering corporate and strategic business plans and expectations for the performance period. Performance relative to the total return to stockholders target is determined by the Company’s quintile placement relative to the peer group of industrial companies at the end of the three year performance period. If earned, awards are paid after the end of the performance period in unrestricted shares of Eastman common stock.

The Compensation Committee reviewed and certified performance results and approved a payout of shares to the executive officers under performance shares previously awarded for the 2007-2009 performance period. The following tables show the targets and the payout matrix for the 2007-2009 performance shares corresponding to return on capital and total stockholder return targets:


				Total Stockholder Return
Performance Year	Target Return on Capital			(TSR) Target Quintile

2007		9.5	%	3rd Quintile
2008		9.5	%	3rd Quintile
2009		9.5	%	3rd Quintile


Eastman TSR Relative	Differential from Target Return on Capital
to Comparison			–5 to		–3 to		–1 to		–0.99 to		+1.01 to		+3.01 to		+5.01 to		+7.01 to
Companies	<−7%		–7%		–4.99%		–2.99%		+1%		+3%		+5%		+7%		+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

Payouts under the 2007-2009 performance share awards for the named executive officers ranged from 57,200 shares to 4,160 shares, and represented 130% of the target award (of a possible 300% of the target award) based upon the Company’s total stockholder return ranking in the 2nd quintile of the compared companies and an average return on capital of 0.08% in excess of the return on capital target. Measurement of return on capital under performance shares is based on reported GAAP earnings, and does not exclude charges or other items excluded in the non-GAAP pro-forma financial measures disclosed by the Company.

Restricted Stock Unit Award. The Compensation Committee made a special restricted stock unit award to Mr. Espeland. This award was designed to serve as a retention incentive and as recognition and incentive for his performance in the area of financial management and to promote stability in the financial organization’s disciplined

leadership of the Company’s strategy for profitable growth. The Committee set the value and the terms of this award to be consistent with recent similar retention awards to executive officers.

Stock-Based Compensation Award Practices. The Compensation Committee has historically granted stock options with an exercise price equal to the market price of the underlying stock at the grant date, and on the date of its authorization of grants has set a grant date that is on or after the date of approval of the grant by the Compensation Committee. The Compensation Committee’s recent practice has been to grant stock options and other stock-based awards annually in the fall, and to set effective dates for stock option grants on the third business day after the next release of quarterly financial results. This is designed to ensure that the market price of the underlying common stock, and thus the exercise price of the options, reflects such results.

Executive Perquisites and Personal Benefits

The Company provides limited executive perquisites and personal benefits designed to provide a level of personal and financial security for our executives. The Compensation Committee annually reviews the types and values of perquisites provided, the imputation to the executives of taxable income for the provided perquisites, and tax treatment of the perquisites to the Company and executives. Perquisites and personal benefits provided to executives for 2009 were:


	•	personal financial counseling, estate planning, and tax preparation (discontinued after 2009),

	•	personal umbrella liability insurance coverage,

	•	home security system and associated reimbursement for the cost of taxes associated with imputed income (tax reimbursement discontinued after 2009), and

	•	non-business travel on corporate aircraft by executives, their families, and invited guests when seats are available and the aircraft is otherwise being used for Company business.

In addition, in considering time demands on the Chief Executive Officer, the Compensation Committee has authorized the personal use of corporate aircraft by the Chief Executive Officer, and his family when traveling with him, whenever possible for business and personal travel.

In 2009 the Compensation Committee eliminated personal financial counseling, estate planning, and tax preparation; reimbursement for the cost of taxes for imputed income related to the home security system; and the personal travel allowance for Mr. Costa which was approved under the terms of his employment agreement when he was hired in 2006. The Committee increased Mr. Costa’s annual base salary in the amount of $43,000 as partial replacement of the annual personal travel allowance and increased the annual base salary of each of the executive officers in the amount of $10,000 as partial replacement of the personal financial counseling, estate planning, and tax preparation executive perquisite.

Executive Termination and Change in Control Agreements

The Company believes that severance protections in the context of a change in control transaction can play a valuable role in attracting and retaining key executive officers. Accordingly, we provide such protections for certain of our executive officers. Detailed information regarding these change in control agreements and the benefits they provide is included in the “Termination and Change-in-Control Arrangements” section of this proxy statement.

The Compensation Committee evaluates the level of severance benefits payable to each such officer on a case-by-case basis, and considers these severance protections an important part of executives’ compensation and consistent with practices of peer companies.

Eastman believes that the occurrence, or potential occurrence, of a change in control transaction will create uncertainty regarding the continued employment of our executive officers. This uncertainty results from the fact that many change in control transactions result in significant organizational changes, particularly at the senior executive level. In order to encourage our executive officers to remain employed with the Company during an important time when their prospects for continued employment following the transaction are often uncertain, we provide certain of our named executive officers with severance benefits if their employment is terminated by the Company without “cause” or by the executive for “good reason” in connection with a change in control.

In addition, Mr. Costa’s employment agreement provides for a cash severance payment and vesting of certain outstanding stock-based compensation awards in the event of his termination without “cause” or his resignation for “good reason”, and for certain circumstances in addition to those covered by the executive change in control severance agreements. The Compensation Committee approved Mr. Costa’s termination arrangements and the other terms of his employment agreement when he was hired in 2006. Detailed information regarding the termination provisions of Mr. Costa’s employment agreement is included in the “Termination and Change-in-Control Arrangements” section of this proxy statement.

Tax Treatment of Executive Officer Compensation

The Compensation Committee intends to preserve the Company’s ability to deduct compensation paid to the Company’s Chief Executive Officer and other executive officers to the extent possible while also maintaining the flexibility to compensate such officers in accordance with the Company’s compensation policies.

Section 162(m) of the Internal Revenue Code generally limits the deductibility to the Company of annual compensation (other than qualified “performance-based” compensation) in excess of $1 million paid to certain of the Company’s executive officers. Base salaries, variable compensation under the UPP, any bonus payments outside the UPP, and stock and stock-based compensation payable other than solely based on corporate performance conditions are generally subject to the $1 million limit on deductible compensation. Compensation attributable to stock options granted and performance shares awarded beginning in 2009 under the Company’s 2007 Omnibus Long-Term Compensation Plan qualifies for deductibility under Section 162(m).

A portion of each named executive officer’s compensation for 2009 was non-deductible to the Company under Section 162(m). The anticipated amount of the Company’s taxes for non-deductible compensation in 2009 is approximately $2 million. The Compensation Committee will continue to retain the discretion to pay non-deductible amounts. The Compensation Committee believes that such flexibility best serves the interests of the Company and its stockholders by allowing the Committee to recognize and motivate executive officers as circumstances warrant.

Reimbursement of Certain Compensation Following Restatements

Pursuant to Section 304 of the Sarbanes-Oxley Act of 2002, a Company policy governs the process for reimbursement by the Chief Executive Officer and the Chief Financial Officer of any bonus or other incentive-based or equity-based compensation received during the 12-month period following public disclosure of an accounting restatement due to material noncompliance by the Company with any financial reporting requirements as the result of misconduct. In addition, our 2007 Omnibus Long-Term Compensation Plan requires reimbursement of certain amounts from awards following public disclosure of an accounting restatement due to material noncompliance by the Company with any financial reporting requirement as a result of misconduct if the award recipient knowingly or grossly negligently engaged in or failed to prevent the misconduct. Company officers and directors are prohibited from use of derivative financial instruments to hedge or mitigate their exposure to changes in the market price of Eastman common stock.

Compensation Tables

The following Summary Compensation Table sets forth information concerning compensation of the individuals serving as Eastman’s Chief Executive Officer and Chief Financial Officer during 2009, and the Company’s three other most highly compensated executive officers for the year ended December 31, 2009.

Summary Compensation Table


													Change in
													Pension
													Value
													and
											Non-Equity		Nonqualified
											Incentive		Deferred
							Stock		Option		Plan		Compensation		All Other
Name and Principal			Salary		Bonus		Awards		Awards		Compensation		Earnings		Compensation		Total
Position	Year		($)		($)		($)(1)(2)		($)(1)		($)(3)		($)(4)		($)(5)		($)

J. Brian Ferguson(6)		2009	$	894,519	$	0	$	1,651,391	$	0	$	400,000	$	591,342	$	126,910	$	3,664,162
Executive Chairman		2008		1,131,154		0		3,364,441		697,126		925,000		570,593		202,179		6,890,493
Of the Board		2007		1,136,538		0		2,642,200		2,370,106		1,500,000		542,849		222,217		8,413,910
James P. Rogers(7)		2009		799,183		0		485,209		1,110,568		1,000,000		157,724		113,170		3,665,854
President and Chief		2008		594,615		0		2,371,351		204,926		400,000		139,644		69,183		3,779,719
Executive Officer		2007		575,962		0		640,734		503,673		600,000		181,909		94,918		2,597,196
Curtis E. Espeland		2009		410,288		0		1,339,156		308,025		370,000		50,366		50,448		2,528,283
Senior Vice President		2008		331,731		0		269,155		178,210		200,000		41,873		33,989		1,054,958
and Chief Financial		2007		—		—		—		—		—		—		—		—
Officer
Mark J. Costa		2009		444,077		0		367,109		288,119		380,000		36,397		132,018		1,647,720
Executive Vice		2008		455,962		0		1,293,758		154,637		235,000		25,411		129,094		2,293,862
President, Specialty		2007		438,269		0		448,574		226,809		380,000		14,201		1,113,702		2,621,555
Polymers, Coatings and Adhesives and Chief Marketing Officer
Ronald C. Lindsay		2009		421,164		0		271,829		288,119		335,000		123,242		43,259		1,482,613
Executive Vice		2008		—		—		—		—		—		—		—		—
President, Performance		2007		—		—		—		—		—		—		—		—
Polymers and Chemical Intermediates
Theresa K. Lee		2009		424,769		0		295,049		205,874		330,000		159,388		45,359		1,460,439
Senior Vice President,		2008		433,269		0		604,758		124,464		225,000		135,656		56,298		1,579,445
Chief Legal Officer and		2007		416,318		0		448,574		305,486		320,000		121,894		67,399		1,679,671
Corporate Secretary


(1)		Grant date fair value of awards of performance shares and restricted stock units (reported in the “Stock Awards” column) and options (reported in the “Option Awards” column) made in the year indicated, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 (Stock Compensation). See note 15 to the Company’s consolidated financial statements in the Annual Report to Stockholders for 2009 mailed and delivered electronically with this proxy statement for discussion of the assumptions made in the valuation of stock awards under FASB ASC Topic 718. For more information about stock and option awards, see “Grants of Plan-Based Awards”, “Outstanding Equity Awards at Fiscal Year-End”, and “Option Exercises and Stock Vested” tables.

(2)		Contingent stock awards (“performance shares” and “restricted stock units”) with future payment subject to satisfaction of continued employment for specified time periods and the achievement of specified performance-based conditions. Performance share awards were made for performance periods beginning January 1, 2007 and ending December 31, 2009, beginning January 1, 2008 and ending December 31, 2010, and beginning January 1, 2009 and ending December 31, 2011, respectively. Restricted stock units were awarded on December 4, 2008 for performance and continued employment periods ending December 31, 2012 and on December 2, 2009 for performance and continued employment period ending December 2, 2013. The potential maximum grant date value of the performance share awards assuming the highest level of performance conditions, computed in accordance with FASB ASC Topic 718, were: Mr. Ferguson (2007 - $7,926,600, 2008 — $10,093,200, 2009 — $4,953,713); Mr. Rogers (2007 — $1,922,201, 2008 - $2,980,017, 2009 —


		$1,455,491); Mr. Espeland (2008 — $807,456, 2009 — $1,266,950); Mr. Costa (2007 — $1,345,721, 2008 — $1,814,253, 2009 — $1,101,225); Mr. Lindsay (2009 — $815,411); and Ms. Lee (2007 — $1,345,721, 2008 — $1,814,253, 2009 — $885,063).

(3)		Cash payments made in the following year for performance in the year indicated under the Unit Performance Plan. As described in the “Compensation Discussion and Analysis” section preceding these tables under “Executive Compensation” and in the “Grants of Plan-Based Awards” table, the Unit Performance Plan is the Company’s variable pay program under which a portion of the total annual compensation of managers is dependent upon corporate, organizational, and individual performance.

(4)		“Change in Pension Value” is the aggregate change in actuarial present value of the executive officer’s accumulated benefit under all defined benefit and actuarial retirement plans (including supplemental plans) accrued during the year. These plans are the Company’s tax-qualified defined benefit pension plan (the Eastman Retirement Assistance Plan, or “ERAP”) and unfunded, nonqualified retirement plans supplemental to the ERAP and providing benefits in excess of those allowed under the ERAP (the Eastman Unfunded Retirement Income Plan, or “URIP”, and the Eastman Excess Retirement Income Plan, or “ERIP”). The aggregate increase in actuarial value of the pension plans is computed as of the same pension plan measurement date used for financial statement reporting purposes with respect to the Company’s financial statements for 2009, 2008 and 2007, respectively. The actuarial present value calculations for 2009 and 2008 are based on the IRS 2013 Prescribed 417(e)(3) Unisex table. The actuarial present value calculation for 2007 is based on the 1994 Group Annuity Reserve — Unisex post-retirement mortality table, and assume individual compensation and service through December 31, 2009, December 31, 2008 and December 31, 2007, respectively, with benefit commencement at the normal retirement age of 65. Benefits are discounted using a 5.72% discount rate for the 2009 calculation, a 6.08% discount rate for the 2008 calculation, and a 6.16% discount rate for the 2007 calculation. See the “Pension Benefits” table for additional information about the named executive officers’ pension benefits.

		“Nonqualified Deferred Compensation Earnings” refers to above-market or preferential earnings on compensation that is deferred on a basis that is not tax-qualified, including such earnings on nonqualified defined contribution plans. The Company maintains the Executive Deferred Compensation Plan (the “EDCP”), an unfunded, nonqualified deferred compensation plan into which executive officers can defer compensation until retirement or termination from the Company. For 2009, 2008, and 2007, there were no preferential or above-market earnings on amounts in individual EDCP stock accounts (defined as appreciation in value and dividend equivalents earned at a rate higher than appreciation in value and dividends on common stock) or on individual EDCP interest accounts (defined as interest on amounts deferred at a rate exceeding 120% of the federal long term rate). See the “Nonqualified Deferred Compensation” table for additional information about the named executive officers’ EDCP accounts.

(5)		The items of “All Other Compensation” reported for the named executive officers for 2009 are identified and quantified below:


			Annual Company		Reimbursement
			Contributions to		for Payment of
	Perquisites and		Defined		Taxes on
	Other Personal		Contribution		Compensation and
Name	Benefits($)		Plans($)		Benefits($)

J. B. Ferguson		$35,000		$90,812		$1,098
J. P. Rogers		44,646		60,096		8,428
C. E. Espeland		16,981		30,514		2,953
M. J. Costa		94,146		33,954		3,918
R. C. Lindsay		11,003		32,071		185
T. K. Lee		12,473		32,489		397


		• Perquisites and other personal benefits. The amounts reported are the aggregate values, based upon the incremental cost to the Company, of the following perquisites and other personal benefits made available to executive officers during 2009: personal financial counseling, estate planning, and tax preparation; personal umbrella liability insurance coverage; home security system; personal travel allowance; non-business travel on corporate aircraft by executives, their families, and invited guests when seats are available and the


		aircraft is otherwise being used for Company business purposes, including an added destination of a flight when the plane is otherwise in reasonable proximity to the added destination; and personal use of corporate aircraft by the Chief Executive Officer and his family. The aggregate incremental cost to the Company for flying additional passengers on business flights is a de minimis amount, and no amount is included for these flights for purposes of determining “All Other Compensation.” The aggregate incremental cost to the Company for operating the corporate aircraft for non-business added destination portions of business flights and for personal flights for the Chief Executive Officer and his family is based upon calculation of direct operating costs including fuel, fuel additives, lubricants, maintenance, reserves for engine restoration and overhaul, landing and parking expenses, crew expenses, and miscellaneous supplies and catering. The aggregate incremental costs to the Company of umbrella liability insurance, home security system, financial counseling, and personal travel allowance are based upon the actual amounts paid by the Company for such perquisites and personal benefits. The perquisites and other personal benefits reported as “All Other Compensation” are further quantified in the following table:


	Perquisites and Other Personal Benefits
	Personal
	Use of		Umbrella		Home				Personal
	Corporate		Liability		Security		Financial		Travel
	Aircraft		Insurance		System		Counseling		Allowance
Name	($)		($)		($)		($)		($)

J. B. Ferguson	$	29,035	$	392	$	729	$	4,844	$	0
J. P. Rogers		12,429		987		20,511		10,719		0
C. E. Espeland		0		789		6,892		9,300		0
M. J. Costa		1,643		789		10,894		5,820		75,000	*
R. C. Lindsay		0		789		514		9,700		0
T. K. Lee		0		789		1,104		10,580		0


*		Annual personal travel allowance, payable in quarterly installments, under Mr. Costa’s employment agreement.


•		Annual Company contributions to defined contribution plans. The amounts reported for 2009 are annual Company contributions to the accounts of Messrs. Ferguson, Espeland, Rogers, and Lindsay, and Ms. Lee in the Eastman Investment Plan, a 401(k) retirement plan, and in the EDCP, and to Mr. Costa in the Eastman Stock Ownership Plan (“ESOP”) and EDCP. Contributions to the Eastman Investment Plan or ESOP equaled $12,250 for each named executive, with the remaining Company contributions to their EDCP accounts. See the “Nonqualified Deferred Compensation” table for additional information about Company contributions into the named executive officers’ EDCP accounts. Annual Company contributions were based upon actual compensation paid during the calendar year.

•		Amounts reimbursed during 2009 for the payment of taxes on certain compensation and benefits. Consists of tax reimbursements for imputed income for home security systems (Mr. Ferguson, $418; Mr. Rogers, $7,376; Mr. Espeland, $2,479; Mr. Costa, $3,918; Mr. Lindsay, $185; and Ms. Lee, $397) and non-business flights on corporate aircraft (Mr. Ferguson, $680; Mr. Rogers $1,052; and Mr. Espeland $474). Tax reimbursements for non-business flights on corporate aircraft were not tax gross-ups on perquisites, but rather were reimbursement of taxes imputed for business-related uses of the company plane in which a spouse or other non-employee accompanied the executive for a business purpose which was a taxable “non-business” use in accordance with IRS regulations. Eastman makes no tax gross-up payments for personal uses of the company plane (those uses disclosed as “perquisites” above), including non-business travel on corporate aircraft when seats are available and the aircraft is otherwise being used for business purposes and personal use by the CEO.

As described in the “Compensation Discussion and Analysis” section preceding these tables under “Executive Compensation”, the Compensation Committee has eliminated the personal travel allowance and personal financial counseling, estate planning, and tax preparation executive perquisites. The Compensation Committee also eliminated reimbursement for the cost of taxes associated with imputed income for home security systems and non-business flights on corporate aircraft.


(6)		Mr. Ferguson was Chief Executive Officer until May 7, 2009, when he became Executive Chairman. As Executive Chairman Mr. Ferguson’s sole compensation is an annual salary of $750,000.

(7)		Mr. Rogers became President and Chief Executive Officer effective May 7, 2009, and previously served as President and Chemicals & Fibers Business Group Head.

The following table sets forth certain information regarding grants in 2009 to the individuals named in the Summary Compensation Table of non-equity incentive awards, equity incentive awards, and all other non-incentive stock and option awards.

Grants of Plan-Based Awards


																	All Other		All Other
																	Stock		Option				Grant
					Estimated Future Payouts						Estimated Future						Awards:		Awards:		Exercise or		Date Fair
					UnderNon-Equity						Payouts Under Equity						Number of		Number of		Base Price		Value of
					Incentive Plan						Incentive						Shares of		Securities		of Option		Stock and
	Approval		Grant		Awards(3)						Plan Awards(4)						Stock or		Underlying		Awards		Option
	Date		Date		Threshold		Target		Maximum		Threshold		Target		Maximum		Units		Options		($/Share)		Awards
Name	(1)		(2)		($)		($)		($)		(#)		(#)		(#)		(#)(5)		(#)(6)		(7)		(8)


J. B. Ferguson				1/1/2009	$	187,500	$	375,000	$	750,000

		10/1/2008		1/1/2009								16,500		41,250		123,750							$	1,651,391

																		-0-

J. P. Rogers				1/1/2009	$	463,125	$	926,250	$	1,852,500

		10/1/2008		1/1/2009								4,848		12,120		36,360								485,209

		9/30/2009		10/27/2009																106,000		55.63		1,110,568

																		-0-

C. E. Espeland				1/1/2009	$	148,750	$	297,500	$	595,000

		10/1/2008		1/1/2009								4,220		10,550		31,650								422,356

		9/30/2009		10/27/2009																29,400		55.63		308,025

				12/2/2009														15,000						916,800

M. J. Costa				1/1/2009	$	188,625	$	377,250	$	754,500

		10/1/2008		1/1/2009								3,668		9,170		27,510								367,109

		9/30/2009		10/27/2009																27,500		55.63		288,119

																		-0-

R. C. Lindsay				1/1/2009	$	165,938	$	331,875	$	663,750

		10/1/2008		1/1/2009								2,716		6,790		20,370								271,829

		9/30/2009		10/27/2009																27,500		55.63		288,119

																		-0-

T. K. Lee				1/1/2009	$	143,000	$	286,000	$	572,000

		10/1/2008		1/1/2009								2,948		7,370		22,110								295,049

		9/30/2009		10/27/2009																19,650		55.63		205,874

																		-0-


(1)		The Compensation Committee approved a stock option grant to executive officers and other eligible managers at its regularly scheduled meeting in September 2009, and approved performance share awards for executive officers and other eligible officers for the 2009-2011 performance period at its regularly scheduled meeting in October 2008.

(2)		For stock options, the grant effective date was the third business day after public release of the Company’s third quarter 2009 financial results. Performance share awards for 2009-2011 were effective as of the beginning of the performance period on January 1, 2009.

(3)		Estimated payouts under the UPP, a variable cash pay program which makes a portion of participants’ total annual compensation dependent upon corporate, organizational, and individual performance. The “Threshold” column reflects the payout level if performance is at minimum of 71% of target levels. The “Target” column reflects the payout level if performance is at 100% of target levels. The “Maximum” column reflects the payout level if performance is at 129% of target levels for specified above-goal performance. See the “Summary Compensation Table” for actual payout under the UPP for 2009 and “Compensation Discussion and Analysis” for a more complete description of the UPP and how the amounts of payouts are determined.


(4)		Estimated future shares awarded at threshold, target, and maximum levels for performance shares for the 2009-2011 performance period, assuming performance conditions are satisfied. See also “Compensation Discussion and Analysis” for a more complete description of how performance share payouts are determined, “Outstanding Equity Awards at Year-End” table, and “Termination and Change-in-Control Arrangements”.

(5)		Restricted stock units, representing the right to receive the same number of unrestricted shares of common stock on December 2, 2013, subject to continued employment (other than termination by reason of death or disability). An amount equal to cash dividends paid during the period that the restricted stock units are outstanding and unvested with respect to shares underlying restricted stock units which vest is payable in cash on the vesting date of the restricted stock units.

(6)		Non-incentive based stock options granted during the fiscal year. Options granted in 2009 have an exercise price equal to the closing price on the New York Stock Exchange of the underlying common stock as of the date of grant. The stock options vest and become exercisable in one-third increments on each of the first three anniversaries of the grant date, with acceleration of vesting in the event of a “change in ownership” or in certain circumstances following a “change in control.” Stock options generally expire ten years from the date of grant. Upon termination by reason of death, disability, or retirement, the stock options remain exercisable for the lesser of five years following the date of termination or the expiration date. If an optionee resigns, the stock options remain exercisable for the lesser of ninety days or the expiration date. Stock options not previously exercised are canceled and forfeited upon termination for cause. See “Summary Compensation Table”, “Outstanding Equity Awards at Year-End” and “Option Exercises and Stock Vested” tables, and “Termination and Change-in-Control Arrangements”.

(7)		Per-share exercise price of stock options granted in 2009. The exercise price is the closing price of Eastman common stock on the New York Stock Exchange on the grant date.

(8)		Grant date fair value of each stock-based award, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 (Stock Compensation).

The following table sets forth information regarding outstanding option and stock awards as of December 31, 2009 held by individuals named in the Summary Compensation Table.

Outstanding Equity Awards at Year-End


	Option Awards											Stock Awards
																			Equity Incentive
																	Equity Incentive		Plan Awards:
	Number of			Number of			Equity Incentive								Market Value		Plan Awards:		Market or
	Securities			Securities			Plan Awards:					Number of			of Shares		Number of		Payout Value
	Underlying			Underlying			Number of					Shares or			or Units		Unearned		of Unearned
	Unexercised			Unexercised			Securities					Units of			of Stock		Shares, Units		Shares, Units
	Options			Options			Underlying	Option		Option		Stock That			That Have		or Other Rights		or Other Rights
	(#)			(#)			Unearned	Exercise		Expiration		Have Not			Not Vested		That Have Not		That Have Not
Name	Exercisable			Unexercisable			Options (#)	Price ($)		Date		Vested (#)			($)(1)		Vested (#)(2)		Vested ($)(3)

J. B. Ferguson		22,500						$	49.22		04/05/11
		41,406							47.55		04/04/12
		4,700	(4)						46.28		04/03/13
		75,000							46.98		11/01/14
		7,613	(4)						53.57		04/03/13
		170,000							53.51		10/31/15
		12,122	(4)						55.06		04/06/10
		52,516	(4)						60.92		04/03/13
		165,000							60.92		10/30/16
		113,400	(4)						66.50		04/04/12
		73,333			36,667	(5)			66.15		10/29/17
		36,966			73,934	(6)			36.60		10/27/18
																		81,250	$	4,894,500
J. P. Rogers		8,000							43.66		04/01/14
		16,000							46.98		11/01/14
		14,755	(4)						52.66		04/03/13
		11,665	(4)						59.23		04/06/10
		33,000							53.51		10/31/15
		40,000							60.92		10/30/16
		38,978	(4)						60.02		04/04/12
		16,701	(4)						66.31		04/05/11
		21,000			10,500	(5)			66.15		10/29/17
		10,866			21,734	(6)			36.60		10/27/18
					106,000	(7)			55.63		10/26/19
													50,000	(8)	$	3,012,000
																		23,930		1,441,543
C. E. Espeland		4,000							53.51		10/31/15
		12,000							60.92		10/30/16
		5,700			2,850	(5)			66.15		10/29/17
		9,450			18,900	(6)			36.60		10/27/18
					29,400	(7)			55.63		10/26/19
													15,000	(9)		903,600
																		13,750		828,300
M. J. Costa		65,000							56.52		05/31/16
		28,000							60.92		10/30/16
		12,800			6,400	(5)			66.15		10/29/17
		8,200			16,400	(6)			36.60		10/27/18
					27,500	(7)			55.63		10/26/19
													25,000	(8)		1,506,000
																		16,360		985,526
R. C. Lindsay		2,200							47.55		04/04/12
		834							43.66		04/01/14
		5,100							46.98		11/01/14
		15,000							53.51		10/31/15
		20,000							60.92		10/30/16
		9,266			4,634	(5)			66.15		10/29/17
		6,100			12,200	(6)			36.60		10/27/18
					27,500	(7)			55.63		10/26/19
													25,000	(8)		1,506,000
																		11,990		722,278
T. K. Lee		2,300	(4)						58.80		04/03/13
		31,000							53.51		10/31/15
		6,538	(4)						57.06		04/04/12
		28,000							60.92		10/30/16
		8,333	(4)						66.50		04/04/12
		12,800			6,400	(5)			66.15		10/29/17
		6,600			13,200	(6)			36.60		10/27/18
					19,650	(7)			55.63		10/26/19
																		14,560		877,094


(1)		Market value of shares of common stock payable under restricted stock units, based on the per share closing price of the common stock on the New York Stock Exchange on December 31, 2009.

(2)		Number of shares of common stock to be paid under outstanding performance shares, assuming achievement of target performance goals for 2008-2010 and 2009-2011 performance periods. See “Compensation Discussion and Analysis” for more complete description of how performances share payouts are determined. If earned, the awards will be paid after the end of the performance period in unrestricted shares of Eastman common stock (subject to proration if the executive’s employment is terminated during the performance period because of retirement, death, or disability, and to cancellation in the event of resignation or termination for cause).

(3)		Value of shares of common stock to be paid under outstanding performance shares, assuming achievement of target performance goals for 2008-2010 and 2009-2011 performance periods and assuming a market value equal to the closing price of the common stock on the New York Stock Exchange as of December 31, 2009.

(4)		“Reload” stock options received to purchase a number of shares equal to the number of previously owned shares of Eastman common stock surrendered in payment of the exercise price of previously granted stock options. Option exercise price is based upon the market price of underlying common stock on the date of exercise of the underlying option grant. Reload options are exercisable at grant and expire as of the date of the original underlying option grant. Stock options granted after 2003 do not include a “reload” feature, and no additional options will be granted upon exercise of those options.

(5)		Option becomes exercisable on October 30, 2010.

(6)		Option becomes exercisable as to one-half of the shares on October 28, 2010 and as to the remaining shares on October 28, 2011.

(7)		Option becomes exercisable as to one-third of the shares on each of October 27, 2010, October 27, 2011, and October 27, 2012.

(8)		Restricted stock units, representing the right to receive the same number of unrestricted shares of common stock on December 31, 2012 (or in the case of 25,000 of Mr. Rogers’ restricted stock units, prior to December 31, 2012 but in no event before December 31, 2011), subject to continued employment (other than termination by reason of death or disability) and, in the case of 25,000 of Mr. Rogers’ restricted stock units, satisfactory performance in the area of management and leadership development, including the development of internal candidates for senior leadership positions.

(9)		Restricted stock units, representing the right to receive the same number of unrestricted shares of common stock on December 2, 2013, subject to continued employment (other than termination by reason of death or disability).

The following table summarizes aggregate values realized upon exercise of options, vesting of restricted stock, and payout of stock under performance shares for the individuals named in the Summary Compensation Table for 2009.

Option Exercises and Stock Vested


	Option Awards				Stock Awards(1)
	Number of				Number of
	Shares Acquired				Shares Acquired
	on Exercise		Value Realized		on Vesting		Value Realized
Name	(#)		on Exercise($)		(#)		on Vesting($)

J. B. Ferguson		-0-	$	0		57,200	$	3,433,144
J. P. Rogers		-0-		0		13,871		832,537
C. E. Espeland		-0-		0		4,160		249,683
M. J. Costa		-0-		0		19,711		1,015,254
R. C. Lindsay		-0-		0		6,929		415,879
T. K. Lee		-0-		0		9,711		582,854


(1)		Represents: (i) for Mr. Costa, 10,000 shares of common stock for which transfer restrictions lapsed during 2009, and the aggregate value of such shares of common stock based upon the per share closing price of the common stock on the New York Stock Exchange on the vesting date; and (ii) number of shares received upon payout under 2007-2009 performance shares, and the aggregate value of such shares of common stock based upon the per share closing price of the common stock on the New York Stock Exchange on the payout date.

The following table summarizes the portion of post-employment benefits payable to the individuals named in the Summary Compensation Table from Company pension arrangements for 2009.

Pension Benefits


		Number of		Present Value		Payments During
	Plan Name	Years of Credited		of Accumulated		Last Fiscal
Name	(1)(2)	Service (#)		Benefit ($)(3)		Year($)

J. B. Ferguson	ERAP		33	$	547,177	$	0
	ERIP/URIP		33		2,918,941		0
J. P. Rogers	ERAP		10		143,462		0
	ERIP/URIP		10		803,018		0
C. E. Espeland	ERAP		14		103,411		0
	ERIP/URIP		14		117,364		0
M. J. Costa(4)	ERAP		4		22,664		0
	ERIP/URIP		4		58,739		0
R. C. Lindsay	ERAP		30		345,661		0
	ERIP/URIP		30		285,132		0
T. K. Lee	ERAP		22		399,714		0
	ERIP/URIP		22		641,432		0


(1)		The Eastman Retirement Assistance Plan (“ERAP”) is a tax-qualified, non-contributory defined benefit pension plan for essentially all active U.S. employees, other than employees of certain subsidiaries and some employees covered by collective bargaining agreements. A participant’s total ERAP benefit consists of his or her “Pre-2000 Benefit” and “Pension Equity Benefit,” as described below:

		Pre-2000 Benefit. Prior to 2000, the ERAP used a traditional pension formula which gave each participant a life annuity commencing at age 65. A participant is eligible for an unreduced Pre-2000 Benefit when such participant’s aggregate age plus years of eligible service totals 85, or at age 65. At retirement, the actuarial present value of the future annual Pre-2000 Benefit payments may at the election of the participant be paid in a lump sum. Benefits earned during 1998 and 1999, upon the election of the participant, may be payable over five years. The Pre-2000 Benefits payable upon retirement are based upon the participant’s years of service with the Company and “average participating compensation,” which is the average of three years of those earnings described in the ERAP as “participating compensation.” “Participating compensation,” in the case of the named executive officers consists of salary, bonus, and non-equity incentive plan compensation, including an allowance in lieu of salary for authorized periods of absence, such as illness, vacation, and holidays. To the extent that any participant’s annual Pre-2000 Benefit exceeds the amount payable under the ERAP, such excess will be paid from one or more unfunded, supplementary plans.

		Pension Equity Benefit. Effective January 1, 2000, the Company redesigned the ERAP to use a pension equity formula. Under the pension equity formula, beginning January 1, 2000, a participant earns a certain percentage of final average earnings each year based upon age and total service with the Company. When a participant terminates employment, he or she is entitled to a pension amount, payable over five years. The amount may also be converted to various forms of annuities. To the extent that any participant’s Pension Equity Benefit exceeds the amount payable under the ERAP, such excess will be paid from one or more unfunded, supplementary plans.


(2)		The Company maintains two unfunded, nonqualified plans, the Unfunded Retirement Income Plan (“URIP”) and the Excess Retirement Income Plan (“ERIP”). The ERIP and the URIP will restore to participants in the ERAP benefits that cannot be paid under the ERAP because of restrictions under the Internal Revenue Code of 1986, as amended, and benefits that are not accrued under the ERAP because of a voluntary deferral by the participant of compensation that would otherwise be counted under the ERAP. As to accruals after December 31, 2004, in order to comply with Section 409A of the Internal Revenue Code, it may be necessary to delay commencement of payment until six months after the participant’s separation from service with the Company. The Company has established a “Rabbi Trust” to provide a degree of financial security for the participants’ unfunded account balances under the ERIP and URIP. See “Termination and Change-in-Control Arrangements — Benefit Security Trust.”

(3)		Actuarial present value of the accumulated benefit, computed as of the same pension plan measurement date used for financial statement reporting purposes with respect to the Company’s audited financial statements for 2009. The actuarial present value calculation is based on the IRS 2013 Prescribed 417(e)(3)-Unisex post-retirement mortality tables, and assumes individual compensation and service through December 31, 2009, with benefit commencement at normal retirement age of 65. Benefits are discounted using a 5.72% discount rate.

(4)		Mr. Costa had not met the minimum vesting requirement for his retirement benefits as of December 31, 2009. Accrued benefits vest after five years of service, which would be in June 2011 for Mr. Costa. Accumulated benefits shown are calculated as if minimum vesting requirements had been met.

The following table is a summary of participation by the individuals named in the Summary Compensation Table in the Executive Deferred Compensation Plan (the “EDCP”), an unfunded, nonqualified deferred compensation plan into which executive officers and other management-level employees can defer compensation until retirement or termination from the Company. Annual base and incentive cash compensation, stock and stock-based awards which are payable in cash and allowed to be deferred, and cash signing, retention, or special recognition bonuses, may be deferred into the EDCP. Compensation deferred into the EDCP is credited at the election of the employee to individual interest accounts or stock accounts. Amounts deferred into interest accounts are credited with interest at the prime rate until transfer or distribution, and amounts deferred into stock accounts increase or decrease in value depending on the market price of Eastman common stock. When cash dividends are declared on the common stock, each stock account receives a dividend equivalent which is used to hypothetically “purchase” additional shares. Upon retirement or termination of employment, the value of a participant’s EDCP account is paid, in cash, in a single lump sum or in up to ten annual installments as elected in advance by the participant.

The EDCP provides for early withdrawal by a participant of amounts in his or her EDCP account in certain limited circumstances. The EDCP also provides that a participant may withdraw amounts deferred prior to January 1, 2005 at any time, provided that the participant forfeit 10% of his or her balances in the EDCP and not be permitted to participate in the EDCP for a period of 36 months from the date of the early withdrawal payment. In addition, if, within any six month period, either 50% or more of the EDCP participants with amounts deferred prior to January 1, 2005 elect early withdrawal from the EDCP or 20% or more of the EDCP participants with amounts deferred prior to January 1, 2005 with aggregate account balances valued at 50% or more of the total value of all EDCP accounts elect such early withdrawal, then all amounts deferred by all participants prior to January 1, 2005 will be distributed in a single lump sum.

Nonqualified Deferred Compensation


	Executive		Registrant		Aggregate
	Contributions		Contributions		Earnings		Aggregate		Aggregate
	in Last		in Last		in Last		Withdrawals/		Balance at
	Fiscal Year		Fiscal Year		Fiscal Year		Distributions		Last Fiscal
Name	($)		($)(1)		($)(2)		($)		Year-End($)(3)

J. B. Ferguson	$	0	$	78,562	$	59,622	$	0	$	1,893,216
J. P. Rogers		0		47,846		8,834,855		0		15,433,387
C. E. Espeland		0		18,264		119,768		0		410,093
M. J. Costa		0		21,704		1,432		0		48,849
R. C. Lindsay		0		19,821		170,738		0		419,616
T. K. Lee		26,000		20,239		43,284		0		1,361,564


(1)		Annual Company contributions were made to the accounts of Messrs. Ferguson, Rogers, Espeland, and Lindsay, and Ms. Lee in the Eastman Investment Plan, a 401(k) retirement plan, and in the EDCP, and to Mr. Costa in the Eastman ESOP and EDCP. Amounts shown are the amounts contributed into the EDCP and represent amounts that could not be contributed into the 401(k) retirement plan or ESOP accounts of the individuals due to Internal Revenue Code restrictions. The total amount of the contributions for each named executive officer in the Eastman Investment Plan, the ESOP, and the EDCP was five percent of his or her 2009 earnings. These contributions are included in the “Summary Compensation Table” in the “All Other Compensation” column.

(2)		Aggregate amounts credited to participant accounts during 2009. No earnings on deferred amounts are included in the “Summary Compensation Table” in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column because there were no preferential or above-market earnings on individual stock accounts or interest accounts. Quarterly dividend equivalents of $0.44 per hypothetical share were credited to amounts in individual stock accounts, and the prime rate of interest credited to amounts in individual interest accounts varied from 7.75% to 8.25%, during 2009.

(3)		Balance in individual EDCP accounts as of December 31, 2009. The portions of the balances from annual Company contributions before provision for certain taxes ($639,159 for Mr. Ferguson, $300,030 for Mr. Rogers, $51,453 for Mr. Espeland, $51,785 for Mr. Costa, $60,805 for Mr. Lindsay and $146,858 for Ms. Lee) were reported as “All Other Compensation” in the Summary Compensation Table in this proxy statement and in the annual meeting proxy statements for previous years; the portions of the balances from deferred salary ($80,700 for Mr. Espeland, $748,237 for Mr. Rogers, $37,800 for Mr. Lindsay, and $390,500 for Ms. Lee) were included in the amounts reported as “Salary” in the Summary Compensation Table in this proxy statement and in the annual meeting proxy statements for previous years; the portions of the balances from deferred annual incentive compensation and bonuses ($15,542 for Mr. Ferguson, $31,250 for Mr. Espeland, $536,861 for Mr. Rogers, $30,718 for Mr. Lindsay and $70,104 for Ms. Lee) were included in the amounts reported as “Non-Equity Incentive Plan Compensation” in the Summary Compensation Table in this proxy statement and in the annual meeting proxy statements for 2009, 2008 and 2007 and in the amounts reported as “Bonus” in the Summary Compensation Table in the annual meeting proxy statements for previous years; the portions of the balances from deferred stock-based awards ($502,663 for Mr. Ferguson, $220,502 for Mr. Espeland, $2,489,931 for Mr. Rogers, $220,881 for Mr. Lindsay, and $146,019 for Ms. Lee) are not reported in the Summary Compensation Table in this proxy statement and in the annual meeting proxy statements for 2009, 2008 and 2007 and were reported as “Long-Term Incentive Plan Payouts” in the Summary Compensation Table in the annual meeting proxy statements for previous years. The portions of the balances from earnings on deferred amounts were not reported in the “Summary Compensation Table” in this proxy statement or in the annual meeting proxy statements for previous years because there were no preferential or above-market earnings on individual EDCP stock accounts or interest accounts. Amounts in the “Registrant Contributions for Last Fiscal Year” column were paid in February 2010, and are not included in the aggregate balance as of December 31, 2009.

Termination and Change-in-Control Arrangements

The Company’s Change in Control Agreements with certain executive officers, including the individuals named in the Summary Compensation Table, and the Omnibus Long-Term Compensation Plans, provide for compensation and benefits in certain circumstances upon or following termination of the executive or a change in control of the Company. In addition, Mr. Costa’s employment agreement also includes certain additional termination arrangements. Circumstances that trigger compensation or provision of benefits related to termination or change in control, how such compensation and benefits are determined, and conditions or obligations applicable to the receipt of payments and benefits are described below.

Change in Control Agreements. For the reasons described in the Compensation Discussion and Analysis, the Company has entered into Change in Control Agreements with the individuals named in the Summary Compensation Table and certain other executive officers of the Company. The Agreements provide for specified compensation and benefits following a “change in control” of the Company. A “change in control” is generally defined in the Agreements to include the following, subject to certain exceptions: (i) the acquisition by a person of 35% or more of the voting stock of the Company; (ii) the incumbent Board members (and subsequent directors approved by them) ceasing to constitute a majority of the Board; (iii) approval by the Company’s stockholders of a reorganization or merger unless, after such proposed transaction, the former stockholders of the Company will own more than 50% of the resulting corporation’s voting stock, no person will own 35% or more of the resulting corporation’s voting stock, and the incumbent Board members will continue to constitute at least a majority of the Board of the resulting corporation; or (iv) approval by the Company’s stockholders of a complete liquidation or dissolution of the Company.

Pursuant to the Agreements, in the event that a change in control of the Company occurs during the “change in control period,” the Company agrees to continue to employ the executive for a period of two years after the occurrence of such change in control (the “Employment Period”). The “change in control period” means the period commencing on November 30, 2005, and ending three years after such date; provided that on each anniversary of the Agreements, the “change in control” period is automatically extended so as to terminate three years after such anniversary, unless the Company provides timely notice to the executive that it will not extend the period.

During the Employment Period, the executive would be entitled to (i) an annual base salary at a rate at least equal to the base salary in effect on the date of the change in control; (ii) an annual bonus at least equal to the executive’s target bonus opportunity for the last full fiscal year prior to the change in control; and (iii) continued participation in all incentive, savings, retirement, welfare benefit, and fringe benefit plans applicable to other peer executives of the Company on terms no less favorable than those in effect during the 120-day period preceding the change in control.

The Agreements also specify the payments and benefits to which an executive would be entitled upon a termination of employment during the Employment Period for specified reasons, including death, retirement, disability, termination by the Company with or without cause, and termination by the executive for or without “good reason” (as such terms are defined in the Agreement).

If an executive’s employment were to be terminated by the Company for any reason other than for cause or disability, or by the executive for good reason, during the Employment Period, the Company would be required to:

(i) pay to the executive a lump sum cash payment equal to his or her “accrued obligations” (unpaid base salary through the date of termination, a prorated target bonus for the year of termination, and any accrued vacation pay),

(ii) pay to the executive a lump sum severance payment equal to three-times the sum of his or her then-current annual base salary plus the amount of his or her target annual bonus for the year in which the termination occurs,

(iii) continue to provide all welfare benefits to the executive and his or her eligible dependents, subject to certain limitations, for 36 months following termination,

(iv) accelerate the vesting of the executive’s unvested benefits under the Company’s retirement plans, and pay to the executive a lump sum cash payment equal to the value of such unvested benefits, plus an amount

calculated to provide the executive with the additional benefits he or she would have been entitled to had he or she accumulated three additional years of service under the Company’s retirement plans, and

(v) pay or provide to the executive any other amounts or benefits to which he or she was entitled under any of the Company’s plans, programs, policies, practices, contracts, or agreements then in effect.

Upon the termination of an executive’s employment by reason of death, disability, or retirement, or upon a termination by the Company for cause or by the executive without good reason, the Agreement would terminate without further obligation of the Company other than the payment of base salary through the date of termination and any other amounts or benefits to which the executive was entitled under any of the Company’s plans, programs, policies, practices, contracts, or agreements then in effect.

The Agreements provide that if a payment to or for the benefit of an executive would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, then the executive will be entitled to a full gross-up for any excise tax imposed, including any income and excise taxes on such gross-up amount (subject to a net after-tax benefit threshold of $75,000).

The Agreements require that the executive not disclose any confidential information of the Company following termination of employment, and provide that the Company will reimburse the executive on a then-current basis for reasonable fees and expenses in seeking to enforce the Agreement (subject to repayment if his or her claims are determined to be frivolous or in bad faith).

Omnibus Long-Term Compensation Plans. The Company’s 2007 Omnibus Long-Term Compensation Plan (like its predecessor 1997 and 2002 Omnibus Long-Term Compensation Plans, collectively referred to as the “Omnibus Plans”) provides for grants to employees of nonqualified and incentive stock options, stock appreciation rights, stock awards, performance shares, and other stock and stock-based awards (collectively, “awards”).

The Omnibus Plans contain provisions regarding the treatment of awards in the event of a “change in ownership” (as defined, generally involving circumstances in which the Company’s common stock is no longer publicly traded) and of a “change in control” (as defined, generally involving circumstances in which the Company is acquired by another entity or its controlling ownership is changed). Upon a change in ownership or change in control, the rules described below will apply to awards granted under the Omnibus Plans.

However, the Compensation Committee has the discretion, notwithstanding any particular transaction constituting a change in ownership or a change in control, either to determine that such transaction is of the type that does not warrant the described consequences with respect to awards (in which case such consequences would not occur) or to alter the way in which awards are treated from the consequences outlined in the Omnibus Plans.

If a change in ownership occurs (and the Compensation Committee has not exercised its discretion described above) during the term of one or more performance periods for outstanding performance shares, the performance period will immediately terminate and, unless the Committee has already determined actual performance for such period, it will be assumed that the performance objectives have been attained at a level of 100%. Participants will be considered to have earned a prorated share of the awards for such performance period. In addition, upon a change in ownership, all outstanding awards will be valued and cashed out on the basis of the change in ownership price.

In the event of a change in control (assuming the Compensation Committee has not exercised its discretion described above), if a participant’s employment terminates within two years following the change in control, unless such termination is due to death, disability, cause, resignation (other than as a result of certain actions by the Company and any successor), or retirement, participants will be entitled to the following treatment. All conditions, restrictions, and limitations in effect with respect to any unexercised awards will immediately lapse and no other terms or conditions will be applied. Any unexercised, unvested, unearned, or unpaid awards will automatically become 100% vested. Performance shares will be treated in a manner similar to that described above in the case of a change in ownership. A participant will be entitled to a lump sum cash payment with respect to all of such participant’s awards.

In order to comply with Section 409A of the Internal Revenue Code, it may be necessary for the Company to delay payments until six months following the officer’s separation from service with the Company.

Mark J. Costa Employment Agreement. The Employment Agreement with Mr. Costa includes certain termination arrangements in addition to those of the standard Change in Control Agreements. If Mr. Costa’s employment is terminated without “cause” or if he resigns for “good reason”, other than in circumstances covered by the Change in Control Agreements:

(i) he would receive a lump-sum cash payment equal to the sum of:

(a) all accrued and unused vacation pay through the date of termination;

(b) an amount equal to one year of base annual salary; and

(ii) his unvested stock options would immediately vest and become exercisable and remain exercisable for the lesser of five years following the date of termination or the expiration date of the options;

(iii) all restrictions on transfer of issued shares of common stock would lapse; and

(iv) Eastman would issue to Mr. Costa shares of common stock underlying outstanding performance shares on a pro rata basis as if all performance objectives had been met at a level of 100%.

“Cause” is defined in the Employment Agreement as material breach by Mr. Costa of any provision of the Employment Agreement or of Eastman codes of conduct or ethics, conviction of a criminal act, or conduct that is grossly inappropriate or insubordinate and demonstrably likely to lead to material injury to Eastman. “Good reason” is defined in the Employment Agreement as assignment of duties materially inconsistent with Mr. Costa’s executive position when he was hired, reduction in base salary or target annual or long-term incentive pay, or failure by Eastman to comply with the provisions of the Employment Agreement.

Benefit Security Trust. The Company has established a Benefit Security Trust (sometimes referred to as the “Rabbi Trust”) to provide a degree of financial security for its unfunded obligations under the Executive Deferred Compensation Plan, the supplemental ERAP plans, and the Change in Control Agreements with the Company’s executives. The assets of the Rabbi Trust would be subject to the claims of the Company’s creditors in the event of insolvency. Upon the occurrence of a “change in control” or a “potential change in control” (each as defined), or if the Company fails to meet its payment obligations under the covered plans and agreements, the Company would be required to transfer to the trustee cash or other liquid funds in an amount equal to the value of the Company’s obligations under the covered plans and agreements. The Company has conveyed to the trustee rights to certain assets as partial security for the Company’s funding obligations under the Rabbi Trust.

A “change in control” for purposes of the Rabbi Trust is generally defined to include the following, subject to certain exceptions: (i) the acquisition by a person (other than the Company, certain affiliated entities, or certain institutional investors) of 19% or more of the voting stock of the Company; (ii) the incumbent Board members (and subsequent directors approved by them) ceasing to constitute a majority of the Board; (iii) approval by the Company’s stockholders of a reorganization or merger unless, after such proposed transaction, the former stockholders of the Company will own more than 75% of the resulting corporation’s voting stock; or (iv) approval by the Company’s stockholders of a complete liquidation and dissolution of the Company or the sale or other disposition of substantially all of the assets of the Company, other than to a subsidiary or in a spin-off transaction. A “potential change in control” will generally be deemed to have occurred if (i) the Company enters into an agreement, the consummation of which would result in the occurrence of a change in control; (ii) any person (including the Company) publicly announces an intention to take action which, if consummated, would constitute a change in control; or (iii) any person (other than the Company, certain affiliated entities, or certain institutional investors) becomes the beneficial owner of 10% or more of the combined voting power of the Company’s then-outstanding securities.

The Rabbi Trust is irrevocable until participants and their beneficiaries are no longer entitled to payments under the covered plans and agreements, but may be amended or revoked by agreement of the trustee, the Company, and a committee of individual beneficiaries of the Rabbi Trust.

Potential Payments Under Termination and Change-in-Control Arrangements

The following table shows, for each of the named executive officers, the payments and benefits that would have been provided under the Change in Control Agreements if the executive had been terminated without cause or had resigned for good reason on December 31, 2009 following a change in control.


	Amount of Payment
	J. B.		J. P.		C. E.		M. J.		R. C.		T. K.
	Ferguson		Rogers		Espeland		Costa		Lindsay		Lee
Form of Payment	($)		($)		($)		($)		($)		($)

Cash severance(1)	$	2,250,000	$	5,850,000	$	2,167,500	$	2,640,750	$	2,362,500	$	2,178,000
Value of unvested stock-based awards at target(2)		7,796,900		5,659,446		2,096,161		3,116,598		2,712,737		1,462,619
Additional pension credit(3)		924,133		277,165		59,529		149,554		129,371		218,953
Health and welfare continuation(4)		35,541		35,541		35,541		35,541		35,541		35,541
Excise tax payment(5)		0		2,749,137		1,340,692		1,552,612		1,377,360		0

Total Payments	$	11,006,574	$	14,571,289	$	5,699,423	$	7,495,055	$	6,617,509	$	3,895,113


(1)		Lump sum cash severance under Change in Control Agreement equal to three times the sum of annual base pay and the target Unit Performance Plan payout.

(2)		Value of unvested awards at target, which vest and are paid out under the Omnibus Plans at termination following a change in control (or earlier upon a change in control that is a change in ownership as shown in the next table below, in which case the payment would not also be received upon a subsequent termination without cause or resignation for good reason). Awards are valued as of year-end 2009 based upon the closing price of Eastman common stock on the New York Stock Exchange on December 31, 2009.

(3)		Lump sum present value of additional pension credit under Change in Control Agreement.

(4)		Value of continuation of health and welfare benefits for three years following termination under Change in Control Agreement.

(5)		Estimated payment under Change in Control Agreement for excise tax imposed by Section 4999 of the Internal Revenue Code. The calculation of the gross-up amount in the above table is based upon an excise tax rate of 20%, a 35% federal income tax rate, and a 1.45% Medicare tax rate.

The following table shows, for each of the named executive officers, the payment that would have been provided under the Omnibus Plans if there had been a change in ownership of the Company on December 31, 2009.

Amount of Payment

J. B.

J. P.

C. E.

M. J.

R. C.

T. K.

Ferguson

Rogers

Espeland

Costa

Lindsay

Lee

Form of Payment

($)

Value of unvested stock-based awards at target(1)

7,796,900

5,659,446

2,096,161

3,116,598

2,712,737

1,462,619


(1)		Value of unvested awards at target which vest and are paid out under the Omnibus Plans following a change in ownership of the Company. Awards are valued as of year-end 2009 based upon the closing price of Eastman common stock on the New York Stock Exchange on December 31, 2009.

The following table shows the payments that would have been provided to Mr. Costa under his Employment Agreement if he had been terminated without cause or had resigned for good reason other than in circumstances covered by the Change in Control Agreement on December 31, 2009.


	Amount of payment
	to M. J. Costa
Form of Payment	($)

Cash severance	$	918,942
Value of unvested stock-based awards at target		3,116,598


Total Payments	$	4,035,540

In addition to the payments described above, the executive officers would also receive the following payments for amounts already earned or vested as the result of participation in compensation or benefit plans on the same basis as other Company employees:


	•	value of outstanding vested stock-based awards (see the “Outstanding Equity Awards at Year-End” table),

	•	earned Unit Performance Plan payout (see “Estimated Future Payouts Under Non-Equity Incentive Plan Awards” column in the “Grants of Plan-Based Awards” table),

	•	earned Company contribution to vested and unvested defined contribution plans (see “All Other Compensation” column in the “Summary Compensation Table”),

	•	account balance in the Eastman Investment Plan, a 401(k) retirement plan, and the ESOP,

	•	account balance in the Executive Deferred Compensation Plan (see “Aggregate Balance at Last Fiscal Year-End” column in the “Nonqualified Deferred Compensation” table), and

	•	lump sum present value of pension under the Company’s qualified and non-qualified pension arrangements (see “Present Value of Accumulated Benefit” column in the “Pension Benefits” table).

APPENDIX A

TEXT OF PROPOSED AMENDMENTS TO CERTIFICATE OF INCORPORATION AND

BYLAWS (NEW TEXT BOLD AND UNDERLINED; DELETED TEXT STRUCK THROUGH)

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

EASTMAN CHEMICAL COMPANY

ARTICLE VI

Stockholder Actions and Meetings of Stockholders

Except as may be provided in a resolution or resolutions providing for any class or series of Preferred Stock pursuant to Article IV hereof, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of such holders and may not be effected by any consent in writing by such holders. Special meetings of stockholders of the Corporation may be called only by the Board of Directors (i)
pursuant to a resolution adopted by a majority of the members of the Board of Directors then in office
, or (ii) upon the written request of the holders of at least twenty-five percent of the outstanding voting stock of the Corporation in accordance with the requirements set forth in the Bylaws of the Corporation
. Elections of directors need not be by written ballot, unless otherwise provided in the Bylaws.

A-1

EASTMAN CHEMICAL COMPANY BYLAWS

SECTION II

Meetings of Stockholders

Section 2.2. Special. (a) Special meetings of stockholders for any purpose or purposes may be called only by the Board of Directors, (i) pursuant to a resolution adopted by a majority of the members of the Board of Directors then in office, or (ii) upon the written request of the holders of at least twenty-five percent of the outstanding voting stock of the Corporation (a “Request”) in accordance with the requirements set forth in Section 2.2(b) hereof.

(b) Any Request shall set forth with particularity (i) the names and business addresses of the stockholder or stockholders requesting the meeting (each a “Meeting Proponent”) and all Persons (as such term is defined in Article V of the Certificate of Incorporation) acting in concert with any Meeting Proponent; (ii) the name and address of each Meeting Proponent and the Persons identified in clause (i), as they appear on the Corporation’s books (if they so appear); (iii) the class and number of shares of the Corporation beneficially owned by each Meeting Proponent and the Persons identified in clause (i); (iv) the text of the proposal or business (including the text of any resolutions proposed for consideration and, if the business includes a proposal to amend these Bylaws or the Certificate of Incorporation, the language of the proposed amendment); and (v) all arrangements or understandings between each Meeting Proponent and any other Persons, including their names, in connection with the proposed business of the special meeting and any material interest of each Meeting Proponent in such business. Except as permitted in Section 2.2(c), the only business that may be conducted at the special meeting shall be the business proposed in the Request. The Request shall be delivered personally or sent by registered mail to the Secretary of the Corporation at its principal executive offices. If the Board of Directors determines that the Request complies with the Certificate of Incorporation and the provisions of these Bylaws and that the proposal to be considered or business to be conducted is a proper subject for stockholder action under applicable law, the Board of Directors shall call and send notice of a special meeting for the purpose set forth in the Request in accordance with Section 2.3 of these Bylaws. The Board of Directors shall determine the date for such special meeting, which date shall be not later than 90 days following the Corporation’s receipt of the Request, and the record date(s) for stockholders entitled to notice of and to vote at such special meeting.

(c) Special meetings may be held at any place, within or without the State of Delaware, as determined by the Board of Directors. The only business which may be conducted at ~~such~~ a special meeting, other than procedural matters and matters relating to the conduct of the special meeting, shall be the matter or matters described in the notice of the meeting.

Section 2.3. Notice. Notice of each meeting of stockholders, shall be made in writing, or electronically to such stockholders as have consented to the receipt of such notice by electronic means, or by any such other means permitted by the Delaware General Corporation Law. Such notice shall state the date, time, place and, in the case of a special meeting, the purpose thereof, shall be given as provided by law by the Secretary or an Assistant Secretary not less than ten days nor more than 60 days before such meeting (unless a different time is specified by law) to every stockholder entitled by law to notice of such meeting.

A-2

[SCRIPT OF DIALOGUE FOR REGISTERED STOCKHOLDER PROXY VOTING BY TELEPHONE]

STOCKHOLDER HEARS THIS SCRIPT

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	d.		Please call again, or vote, sign, date and return your proxy card using the envelope provided.

	e.		Goodbye

3.		Welcome to the Eastman Chemical Company telephone voting system.

4.		Voting your shares by telephone has the same effect as if you returned your proxy card by mail. You hereby direct the named proxies to vote your shares as instructed.

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	i.		If you plan to attend the annual meeting, please press 1; if not please press 0.

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If this is not correct, please press 0

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Nominee 1

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	d.		I’m sorry, that entry was not recognized (repeat a-c)

Nominee 2

	a.		To vote For, please press 1.

	b.		To vote Against, please press 6.

	c.		To Abstain, please press 0.

	d.		I’m sorry, that entry was not recognized (repeat a-c)

Nominee 3

	a.		To vote For, please press 1.

	b.		To vote Against, please press 6.

	c.		To Abstain, please press 0.

	d.		I’m sorry, that entry was not recognized (repeat a-c)

Item 2

	a.		To vote For, please press 1.

	b.		To vote Against, please press 6.

	c.		To Abstain, please press 0.

	d.		I’m sorry, that entry was not recognized (repeat a-c)

10.

Item 3

	a.		To vote For, please press 1.

	b.		To vote Against, please press 6.

	c.		To Abstain, please press 0.

	d.		I’m sorry, that entry was not recognized (repeat a-c)

11.

Item 4

	a.		To vote For, please press 1.

	b.		To vote Against, please press 6.

	c.		To Abstain, please press 0.

	d.		I’m sorry, that entry was not recognized (repeat a-c)

12.

Your vote have been cast as follows

	a.		Nominee 1, (For, Against or Abstain).

	b.		Nominee 2, (For, Against or Abstain).

	c.		Nominee 3, (For, Against or Abstain).

	d.		Item 2, (For, Against or Abstain).

	e.		Item 3, (For, Against or Abstain).

	f.		Item 4, (For, Against or Abstain).

	g.		If this is correct, please press 1

	i.		If you plan to attend the annual meeting please press 1; if not please press 0.

	ii.		If you would like to vote another proxy, please press 1; if not, please press 0.

	iii.		Thank you for voting.

	iv.		Good bye

If this is not correct, please press 0

	v.		If you would like to try again, please press 1, if not, please press 0.

	vi.		Please try your call again later, or vote, sign, date and return your proxy card using the envelope provided.

	vii.		Goodbye

By submitting your voting instructions through this site, you are agreeing with the appointment of proxy. Please indicate how you wish to vote and click on Submit Voting Instructions at the bottom of this screen. If you submit your voting instructions without making any specifications, your vote will be recorded according to the recommendations of the Board of Directors.

Click here to view the Eastman Chemical
Company Annual Report.

Click here to view the Eastman Chemical
Company Proxy Statement.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES IN ITEM 1.

Election of Directors:

Nominees for election of three directors to serve in the class for which the term in office expires at the Annual Meeting of Stockholders in 2013 and their successors are duly elected and qualified:

FOR AGAINST ABSTAIN

Gary E. Anderson (1)

Renée J. Hornbaker (2)

Thomas H. McLain (3)

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 2 AND 3.

FOR AGAINST ABSTAIN

2. Ratification of appointment of PricewaterhouseCoopers LLP as independent auditors.

3. Approval of amendment to Certificate of Incorporation to permit holders of 25% of shares to call a special meeting of stockholders.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEM 4.

[FORM OF LETTER TO EMPLOYEE STOCKHOLDERS WHO HOLD SHARES THROUGH COMPANY PLANS]


		Eastman Chemical Company
		P.O. Box 431
		Kingsport, Tennessee 37662-5280



		Theresa K. Lee
		Senior Vice President, Chief Legal Officer,
		and Corporate Secretary
		Phone: (423) 229-2097
		FAX: (423) 224-9399
		tklee@eastman.com

March 19, 2010


Re:		2010 Annual Meeting Materials

Dear Fellow Eastman Employee and Stockholder:

Our 2010 Annual Meeting of Stockholders will be held on May 6, and it is important that your shares be represented. Again this year, all employees who own Eastman shares through the ESOP or Eastman Investment Plan will access the Notice and Proxy Statement for the Annual Meeting and Eastman’s Annual Report to Stockholders electronically on the Internet. Making these materials available to you electronically rather than by sending printed material in the mail significantly reduces the Company’s printing and postage expenses and reflects our continuing efforts to increase efficiency and reduce costs through the expanded use of technology.

To access the 2009 Annual Report and the Notice and Proxy Statement for the 2010 Annual Meeting, please go to www.ViewMaterial.com/EMN and click on the icon for each document. (If you like, you may use your Eastman employee account to access the Internet website and review the materials.) The business to be considered and voted upon at the Annual Meeting is explained in the Proxy Statement. Please review the Proxy Statement, and the Annual Report, before voting your shares. If you wish to receive a paper copy of the Annual Report and Proxy Statement, select “SendMaterial” and enter the 11-digit number in the box by the arrow on your proxy card.

It is important that your shares be represented and voted at the Annual Meeting. As explained on the enclosed proxy card, you can vote by proxy by Internet, by telephone, or by marking, signing, dating, and mailing your proxy card in the enclosed postage-paid envelope. Whether you choose to vote by computer, telephone, or proxy card, please vote as soon as possible. Your vote is important, regardless of the number of shares you own.

Thank you.

Yours very truly,
-s- Theresa K. Lee

Theresa K. Lee
Senior Vice President, Chief Legal Officer and Corporate Secretary



o Preliminary Proxy Statement

o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

x Definitive Proxy Statement

o Definitive Additional Materials
o Soliciting Material Pursuant to §240.14a-12


(1)	Title of each class of securities to which transaction applies:


(2)	Aggregate number of securities to which transaction applies:


LETTER TO STOCKHOLDERS
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT
	INFORMATION ABOUT THE MEETING AND VOTING
	Proxy Statement and Annual Meeting
	Voting By Proxy
	How to Revoke Your Proxy
	Record Date; Stockholders Entitled to Vote; Voting Rights
	Quorum
	Vote Required for Approval of Matters to be Considered
	Proxy Solicitation Costs
	Matters Raised at the Annual Meeting Not Included in this Proxy Statement
	Stockholder Proposals for the 2011 Annual Meeting
	Nominations by Stockholders for Election to the Board of Directors
	Annual Report to Stockholders, Annual Report on Form 10-K, and Corporate Governance Materials
	Communications to the Board of Directors
	PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
	ITEM 1--ELECTION OF DIRECTORS
	NOMINEES FOR DIRECTOR
	MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
	The Board of Directors and Corporate Governance
		Board Leadership Structure
		Risk Oversight
		Director Independence
		Transactions with Directors, Executive Officers, and Related Persons
	Board Committees
		Audit Committee.
			Audit Committee Report
		Nominating and Corporate Governance Committee.
			Director Nominations.
		Compensation and Management Development Committee.
			Compensation Committee Report
		Finance Committee.
		Health, Safety, Environmental and Security Committee.
	Director Compensation
	ITEM 2 -- RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
	Audit Fees
	Audit-Related Fees
	Tax Fees
	All Other Fees
	ITEM 3 -- APPROVAL OF AN AMENDMENT TO CERTIFICATE OF INCORPORATION TO PERMIT HOLDERS OF 25% OF SHARES TO CALL A SPECIAL MEETING
	ITEM 4 -- PROPOSAL REQUESTING THAT THE BOARD TAKE STEPS NECESSARY TO ELECT EACH DIRECTOR ANNUALLY
	Response of the Company
	STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
	Common Stock
	Common Stock and Common Stock Units
	PRINCIPAL STOCKHOLDERS
	EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Compensation Tables
Termination and Change-in-Control Arrangements
	APPENDIX A -- TEXT OF PROPOSED AMENDMENTS TO CERTIFICATE OF INCORPORATION AND BYLAWS
FORM OF PAPER PROXY
SCRIPT OF DIALOGUE FOR REGISTERED STOCKHOLDER PROXY VOTING BY TELEPHONE
TEXT OF COMPUTER SCREEN FOR ELECTRONIC DELIVERY OF PROXY MATERIALS
TEXT OF COMPUTER SCREENS FOR INTERNET PROXY VOTING
FORM OF LETTER TO EMPLOYEE STOCKHOLDERS

	§		Do you plan to attend the Annual Meeting? (If so, you will receive an Admission Ticket approximately 10 days before the Meeting.)

	§		Please enter any change of address.

	§		Please enter any comments.

	§		Please enter your e-mail address to receive confirmation that your instructions were recorded.

			Note: We respect your privacy. Your e-mail address will not be saved or used for any purpose other than sending your confirmation e-mail.


(1)	Amount Previously Paid:


(2)	Form, Schedule or Registration Statement No.:


(3)	Filing Party:


(4)	Date Filed: