EASTMAN CHEMICAL CO (Form: 10-K, Received: 03/05/2004 12:37:04)

	Exhibit 3.02

	EASTMAN CHEMICAL COMPANY BYLAWS

	AMENDED AND RESTATED AS OF DECEMBER 4, 2003

	SECTION I

	Capital Stock

	Section 1.1. Certificates

	. Every holder of stock in the Corporation shall be entitled to have a certificate signed in the name of the Corporation by the Chairman of the Board of Directors or the Vice Chairman or a Vice President, and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the Corporation certifying the number of shares in the Corporation owned by such holder. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent, or registrar at the date of issue.

	Section 1.2. Record Ownership

	. A record of the name and address of the holder of each certificate, the number of shares represented thereby and the date of issue thereof shall be made on the Corporation's books. The Corporation shall be entitled to treat the holder of record of any share of stock as the holder in fact thereof, and accordingly shall not be bound to recognize any equitable or other claim to or interest in any share on the part of any other person, whether or not it shall have express or other notice thereof, except as required by the laws of the State of Delaware.

	Section 1.3. Transfer of Record Ownership

	. Transfers of stock shall be made on the books of the Corporation only by direction of the person named in the certificate or such person's attorney, lawfully constituted in writing, and only upon the surrender of the certificate therefor and a written assignment of the shares evidenced thereby, which certificate shall be canceled before the new certificate is issued.

	Section 1.4. Lost Certificates

	. Any person claiming a stock certificate in lieu of one lost, stolen or destroyed shall give the Corporation an affidavit as to such person's ownership of the certificate and of the facts which go to prove its loss, theft or destruction. Such person shall also, if required by policies adopted by the Board of Directors, give the Corporation a bond, in such form as may be approved by the Corporation, sufficient to indemnify the Corporation against any claim that may be made against it on account of the alleged loss of the certificate or the issuance of a new certificate.

146


Exhibit 3.02

	Section 1.5. Transfer Agents; Registrars; Rules Respecting Certificates.

	The Board of Directors may appoint, or authorize any officer or officers to appoint, one or more transfer agents and one or more registrars. The Board of Directors may make such further rules and regulations as it may deem expedient concerning the issue, transfer and registration of stock certificates of the Corporation.

	Section 1.6. Record Date

	. The Board of Directors may fix in advance a future date, not exceeding 60 days (nor, in the case of a stockholders' meeting, less than ten days) preceding the date of any meeting of stockholders, payment of dividend or other distribution, allotment of rights, or change, conversion or exchange of capital stock or for the purpose of any other lawful action, as the record date for determination of the stockholders entitled to notice of and to vote at any such meeting and any adjournment thereof, or to receive any such dividend or other distribution or allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, or to participate in any such other lawful action, and in such case such stockholders and only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of and to vote at such meeting and any adjournment thereof, or to receive such dividend or other distribution or allotment of rights, or to exercise such rights, or to participate in any such other lawful action, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid.

	SECTION II

	Meetings of Stockholders

	Section 2.1. Annual

	. The annual meeting of stockholders for the election of directors and the transaction of such other proper business shall be held on the first Thursday in May, unless otherwise specified by resolution adopted by the Board of Directors, and at the time and place, within or without the State of Delaware, as determined by the Board of Directors.

	Section 2.2. Special

	. Special meetings of stockholders for any purpose or purposes may be called only by the Board of Directors, pursuant to a resolution adopted by a majority of the members of the Board of Directors then in office. 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 meeting, other than procedural matters and matters relating to the conduct of the meeting, shall be the matter or matters described in the notice of the meeting.

147


Exhibit 3.02

	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.

	Section 2.4. List of Stockholders.

	A complete list of the stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder, shall be prepared by the Secretary. Such list shall be available for examination of any stockholder, for any purpose germane to the meeting, either on a reasonably accessible electronic network or, during normal business hours, at the Corporation’s principal place of business, for at least ten days before the meeting and at the place of the meeting during the whole time of the meeting. In the event that such list is to be made available on an electronic network, the notice of meeting given under Section 2.3 hereof shall provide the information required to gain access to such list.

	Section 2.5. Quorum

	. The holders of shares of stock entitled to cast a majority of the votes on the matters at issue at a meeting of stockholders, present in person or represented by proxy, shall constitute a quorum, except as otherwise required by the Delaware General Corporation Law. In the event of a lack of a quorum, the chairman of the meeting or a majority in interest of the stockholders present in person or represented by proxy may adjourn the meeting from time to time without notice other than announcement at the meeting, until a quorum shall be obtained. At any such adjourned meeting at which there is a quorum, any business may be transacted that might have been transacted at the meeting originally called.

148


Exhibit 3.02

	Section 2.6. Organization and Procedure.

	(a) The Chairman of the Board, or such other officer of the Corporation designated by a majority of the directors that the Corporation would have if there were no vacancies on the Board of Directors (the "Whole Board"), will call meetings of the stockholders to order and will act as presiding officer thereof. Unless otherwise determined prior to the meeting by a majority of the Whole Board, the presiding officer of the meeting of the stockholders will have the right and the authority to determine and maintain the rules, regulations and procedures for the proper conduct of the meeting, including, without limitation, restricting entry to the meeting after it has commenced, maintaining order and the safety of those in attendance, opening and closing the polls for voting, dismissing business or proposals not properly submitted, limiting the time allowed for discussion of the business of the meeting, restricting the persons (other than stockholders of the Corporation or their duly appointed proxies) that may attend the meeting, and ascertaining whether any stockholder or proxy holder may be excluded from the meeting based upon any determination by the presiding officer, in his or her sole discretion, that the stockholder or proxy holder is unduly disruptive or is likely to disrupt the meeting. The Secretary of the Corporation shall act as secretary, but in the absence of the Secretary, the presiding officer may appoint a secretary.

	(b) At an annual meeting of the stockholders, only such business will be conducted or considered as is properly brought before the meeting. To be properly brought before an annual meeting, business must be (i) specified in the notice of meeting (or any supplement thereto) given in accordance with these bylaws, (ii) brought before the meeting by the presiding officer or by or at the direction of a majority of the Whole Board, or (iii) otherwise properly requested to be brought before the meeting by a stockholder of the Corporation in accordance with these bylaws.

	(c) At a special meeting of stockholders, only such business may be conducted or considered as is properly brought before the meeting. To be properly brought before a special meeting, business must be (i) specified in the notice of the meeting (or any supplement thereto) given in accordance with these bylaws or (ii) brought before the meeting by the presiding officer or by or at the direction of a majority of the Whole Board. The determination of whether any business sought to be brought before any annual or special meeting of the stockholders is properly brought before such meeting will be made by the presiding officer of the meeting. If the presiding officer determines that any business is not properly brought before such meeting, he or she will so declare at the meeting and any such business will not be conducted or considered.

149


Exhibit 3.02

	Section 2.7. Stockholder Nominations and Proposals.

	(a) No proposal for a stockholder vote shall be submitted by a stockholder (a "Stockholder Proposal") to the Corporation's stockholders unless the stockholder submitting such proposal (the "Proponent") shall have filed a written notice setting forth with particularity (i) the names and business addresses of the Proponent and all Persons (as such term is defined in Article V of the Certificate of Incorporation) acting in concert with the Proponent; (ii) the name and address of the 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 the Proponent and the Persons identified in clause (i); (iv) a description of the Stockholder Proposal containing all material information relating thereto; and (v) such other information as the Board of Directors reasonably determines is necessary or appropriate to enable the Board of Directors and stockholders of the Corporation to consider the Stockholder Proposal. The presiding officer at any stockholders' meeting may determine that any Stockholder Proposal was not made in accordance with the procedures prescribed in these Bylaws or is otherwise not in accordance with law, and if it is so determined, such officer shall so declare at the meeting and the Stockholder Proposal shall be disregarded.

150


Exhibit 3.02

	(b) Only persons who are selected and recommended by the Board of Directors or the committee of the Board of Directors designated to make nominations, or who are nominated by stockholders in accordance with the procedures set forth in this Section 2.7, shall be eligible for election, or qualified to serve, as directors. Nominations of individuals for election to the Board of Directors of the Corporation at any annual meeting or any special meeting of stockholders at which directors are to be elected may be made by any stockholder of the Corporation entitled to vote for the election of directors at that meeting by compliance with the procedures set forth in this Section 2.7. Nominations by stockholders shall be made by written notice (a "Nomination Notice"), which shall set forth (i) as to each individual nominated, (A) the name, date of birth, business address and residence address of such individual; (B) the business experience during the past five years of such nominee, including his or her principal occupations and employment during such period, the name and principal business of any corporation or other organization in which such occupations and employment were carried on, and such other information as to the nature of his or her responsibilities and level of professional competence as may be sufficient to permit assessment of his or her prior business experience; (C) whether the nominee is or has ever been at any time a director, officer or owner of 5% or more of any class of capital stock, partnership interests or other equity interest of any corporation, partnership or other entity; (D) any directorships held by such nominee in any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, or subject to the requirements of Section 15(d) of such Act or any company registered as an investment company under the Investment Company Act of 1940, as amended; (E) whether, in the last five years, such nominee has been convicted in a criminal proceeding or has been subject to a judgment, order, finding or decree of any federal, state or other governmental entity, concerning any violation of federal, state or other law, or any proceeding in bankruptcy, which conviction, order, finding, decree or proceeding may be material to an evaluation of the ability or integrity of the nominee;

	and (F) all information relevant to a determination of the nominee's status as to "independence," including references to the criteria established by the New York Stock Exchange (or any other exchange or quotation system on which the Corporation's equity securities are then listed or quoted) and the Corporation's Corporate Governance Guidelines, in each case as in effect at the time of such Stockholder Nomination;

	and (ii) as to the Person submitting the Nomination Notice and any Person acting in concert with such Person, (x) the name and business address of such Person, (y) the name and address of such Person as they appear on the Corporation's books (if they so appear), and (z) the class and number of shares of the Corporation that are beneficially owned by such Person. A written consent to being named in a proxy statement as a nominee, and to serve as a director if elected, signed by the nominee, shall be filed with any Nomination Notice. If the presiding officer at any stockholders' meeting determines that a nomination was not made in accordance with the procedures prescribed by these Bylaws, he shall so declare to the meeting and the defective nomination shall be disregarded.

151


Exhibit 3.02

	(c)

	In the case of an annual meeting of stockholders, Nomination Notices and Stockholder Proposals shall be delivered to the Secretary at the principal executive office of the Corporation not less than 45 days prior to the date on which the notice of the immediately preceding year's annual meeting of stockholders was first sent to the stockholders of the Corporation. In the case of a special meeting of stockholders, Nomination Notices and Stockholder Proposals shall be delivered to the Secretary at the principal executive office of the Corporation no later than the close of business on the 15th day following the day on which notice of the date of a special meeting of stockholders was given.

	Section 2.8. Voting

	. Unless otherwise provided in a resolution or resolutions providing for any class or series of Preferred Stock pursuant to Article IV of the Certificate of Incorporation or by the Delaware General Corporation Law, each stockholder shall be entitled to one vote, in person or by proxy, for each share held of record by such stockholder who is entitled to vote generally in the election of directors. Each stockholder voting by proxy shall grant such authority in writing, by electronic or telephonic transmission or communication, or by any such other means permitted by the Delaware General Corporation Law. All elections for the Board of Directors shall be decided by a plurality of the votes cast and all other questions shall be decided by a majority of the votes cast, except as otherwise required by the Delaware General Corporation Law or as provided for in the Certificate of Incorporation or these Bylaws. Abstentions shall not be considered to be votes cast.

	Section 2.9. Inspectors.

	The Board of Directors by resolution shall, in advance of any meeting of stockholders, appoint one or more inspectors, which inspector or inspectors may include individuals who serve the Corporation in other capacities, including, without limitation, as officers, employees, agents or representatives of the Corporation, to act at the meeting and make a written report thereof. One or more persons may be designated by the Board of Directors as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall have the duties prescribed by the Delaware General Corporation Law.

	SECTION III

	Board of Directors

152


Exhibit 3.02

	Section 3.1. Number and Qualifications

	. The business and affairs of the Corporation shall be managed by or under the direction of its Board of Directors. The number of directors constituting the Board of Directors shall be as authorized from time to time exclusively by a vote of a majority of the members of the Board of Directors then in office. The maximum number of consecutive three-year terms of office that may be served by any director is three, and for purposes of calculating such maximum number of terms there shall not be counted as a three-year term any service during a partial term for which such director is serving or during any initial term; provided, however, that the Board of Directors is authorized in circumstances it deems appropriate to nominate and thereby render eligible a person for a fourth or subsequent consecutive three-year term. Notwithstanding the foregoing, (i) a person who is not serving as a director shall not be eligible for nomination, appointment, or election if such person has or will have reached age 70 on the date of his or her appointment or election; and (ii) any director reaching the age of 70 during any term of office shall continue to be qualified to serve as a director only until the next annual meeting of stockholders following his or her 70th birthday, provided, however, that the Board of Directors is authorized, in circumstances it deems appropriate and by unanimous approval of all of the directors then in office (excepting the director whose qualification is the subject of the action), to render a director then in office eligible to serve until the next annual meeting of stockholders following his or her 71st birthday.

	Section 3.2. Resignation

	. A director may resign at any time by giving notice, in writing, by electronic transmission or by any other means permitted by the Delaware General Corporation Law, to the Chairman of the Board or to the Secretary. Unless otherwise stated in such notice of resignation, the acceptance thereof shall not be necessary to make it effective; and such resignation shall take effect at the time specified therein or, in the absence of such specification, it shall take effect upon the receipt thereof.

	Section 3.3. Regular Meetings

	. Regular meetings of the Board of Directors may be held without further notice at such time as shall from time to time be determined by the Board of Directors. Unless otherwise determined by the Board of Directors, the locations of the regular meetings of the Board of Directors shall be in Kingsport, Tennessee. A meeting of the Board of Directors for the election of officers and the transaction of such other business as may come before it may be held without notice immediately following the annual meeting of stockholders.

	Section 3.4. Special Meetings

	. Special meetings of the Board of Directors may be called by the Chairman of the Board, or the Vice Chairman or at the request in writing of one third of the members of the Board of Directors then in office.

153


Exhibit 3.02

	Section 3.5. Notice of Special Meetings

	. Notice of the date, time and place of each special meeting shall be mailed by regular mail to each director at his designated address at least six days before the meeting; or sent by overnight courier to each director at his designated address at least two days before the meeting (with delivery scheduled to occur no later than the day before the meeting); or given orally by telephone or other means, or by telegraph or telecopy, or by any other means comparable to any of the foregoing, to each director at his designated address at least 24 hours before the meeting; provided, however, that if less than five days' notice is provided and one third of the members of the Board of Directors then in office object in writing prior to or at the commencement of the meeting, such meeting shall be postponed until five days after such notice was given pursuant to this sentence (or such shorter period to which a majority of those who objected in writing agree), provided that notice of such postponed meeting shall be given in accordance with this Section 3.5. The notice of the special meeting shall state the general purpose of the meeting, but other routine business may be conducted at the special meeting without such matter being stated in the notice.

	Section 3.6. Place of Meetings

	. The Board of Directors may hold their meetings and have an office or offices inside or outside of the State of Delaware.

	Section 3.7. Telephonic Meeting and Participation

	. Any or all of the directors may participate in a meeting of the Board of Directors or any committee thereof by conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at the meeting.

	Section 3.8. Action by Directors Without a Meeting

	. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board or of such committee, as the case may be, consent thereto in writing, by electronic transmission, or by any other means permitted by the Delaware General Corporation Law, and the writing or writings or, if the consent action is taken by electronic transmission, paper reproductions of such electronic transmissions, are filed with the minutes of proceedings of the Board or committee.

154


Exhibit 3.02

	Section 3.9. Quorum and Adjournment

	. A majority of the directors then holding office shall constitute a quorum. The vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. Whether or not a quorum is present to conduct a meeting, any meeting of the Board of Directors (including an adjourned meeting) may be adjourned by a majority of the directors present, to reconvene at a specific time and place. It shall not be necessary to give to the directors present at the adjourned meeting notice of the reconvened meeting or of the business to be transacted, other than by announcement at the meeting that was adjourned; provided, however, notice of such reconvened meeting, stating the date, time, and place of the reconvened meeting, shall be given to the directors not present at the adjourned meeting in accordance with the requirements of Section 3.5 hereof.

	Section 3.10. Organization

	. The Chairman of the Board, or, in the absence of the Chairman of the Board, the Vice Chairman, or in the absence of the Vice Chairman, a member of the Board selected by the members present, shall preside at meetings of the Board. The Secretary of the Corporation shall act as secretary, but in the absence of the Secretary, the presiding officer may appoint a secretary.

	Section 3.11. Compensation of Directors

	. Directors shall receive such compensation for their services as the Board of Directors may determine. Any director may serve the Corporation in any other capacity and receive compensation therefor.

	Section 3.12. Presumption of Assent

	. A director of the Corporation who is present at a meeting of the Board of Directors when a vote on any matter is taken is deemed to have assented to the action taken unless he votes against or abstains from the action taken, or unless at the beginning of the meeting or promptly upon arrival the director objects to the holding of the meeting or transacting specified business at the meeting. Any such dissenting votes, abstentions or objections shall be entered in the minutes of the meeting.

	SECTION IV

	Committees

155


Exhibit 3.02

	Section 4.1. Committees

	. The Board of Directors may, by resolutions passed by a majority of the members of the Board of Directors, designate members of the Board of Directors to constitute other committees which shall in each case consist of such number of directors, and shall have and may execute such powers as may be determined and specified in the respective resolutions appointing them. Any such committee may fix its rules of procedure, determine its manner of acting and the time and place, whether within or without the State of Delaware, of its meetings and specify what notice thereof, if any, shall be given, unless the Board of Directors shall otherwise by resolution provide. Unless otherwise provided by the Board of Directors or such committee, the quorum, voting and other procedures shall be the same as those applicable to actions taken by the Board of Directors. A majority of the members of the Board of Directors then in office shall have the power to change the membership of any such committee at any time, to fill vacancies therein and to discharge any such committee or to remove any member thereof, either with or without cause, at any time.

	SECTION V

	Officers

	Section 5.1. Designation.

	The officers of the Corporation shall be a Chairman of the Board of Directors, a Chief Executive Officer, a Chief Financial Officer, a Treasurer, a Controller, and a Secretary, and such other officers as the Board of Directors may elect or appoint, or provide for the appointment of, as may from time to time appear necessary or advisable in the conduct of the business and affairs of the Corporation. Any number of offices may be held by the same persons, except that the Chairman of the Board must be a director of the Corporation and may also be the Chief Executive Officer.

	Section 5.2. Election Term.

	At its first meeting after each annual meeting of stockholders, the Board of Directors shall elect the officers or provide for the appointment thereof. Subject to Section 5.3 and Section 5.4 hereof, the term of each officer elected by the Board of Directors shall be until the first meeting of the Board of Directors following the next annual meeting of stockholders and until such officer’s successor is chosen and qualified.

	Section 5.3. Resignation.

	Any officer may resign at any time by giving written notice to the Secretary. Unless otherwise stated in such notice of resignation, the acceptance thereof shall not be necessary to make it effective; and such resignation shall take effect at the time specified therein or, in the absence of such specification, it shall take effect upon the receipt thereof.

156


Exhibit 3.02

	Section 5.4. Removal.

	Any officer may be removed at any time with or without cause by affirmative vote of a majority of the members of the Board of Directors then in office. Any officer appointed by another officer may be removed with or without cause by such officer or the Chief Executive Officer.

	Section 5.5. Vacancies.

	A vacancy in any office may be filled for the unexpired portion of the term by the Board of Directors or, in the case of offices held by officers who may be appointed by other officers, by any officer authorized to appoint such officer.

	Section 5.6. Chief Executive Officer.

	The Chief Executive Officer shall be responsible for carrying out the policies adopted by the Board of Directors.

	Section 5.7. Chairman of the Board.

	The Chairman of the Board shall have such powers and perform such duties as may be provided for herein and as may be incident to the office and as may be assigned by the Board of Directors.

	Section 5.8. Chief Financial Officer.

	The Chief Financial Officer shall act in an executive financial capacity, and assist the Chief Executive Officer in the general supervision of the Corporation’s financial policies and affairs, and shall perform all acts incident to the position of Chief Financial Officer, subject to the control of the Board of Directors.

	Section 5.9. Treasurer.

	The Treasurer shall have charge of all funds of the Corporation and shall perform all acts incident to the position of Treasurer, subject to the control of the Board of Directors.

	Section 5.10. Controller.

	The Controller shall serve as principal accounting officer of the Corporation, having the custody and operation of the accounting books and records of the Corporation, and shall perform all acts incident to the position of Controller, subject to the control of the Board of Directors.

	Section 5.11. Secretary.

	The Secretary shall keep the minutes, and give notices, of all meetings of stockholders and directors and of such committees as directed by the Board of Directors. The Secretary shall have charge of such books and papers as the Board of Directors may require. The Secretary (or any Assistant Secretary) is authorized to certify copies of extracts from minutes and of documents in the Secretary’s charge and anyone may rely on such certified copies to the same effect as if such copies were originals and may rely upon any statement of fact concerning the Corporation certified by the Secretary (or any Assistant Secretary). The Secretary shall perform all acts incident to the office of Secretary, subject to the control of the Board of Directors.

157


Exhibit 3.02

	Section 5.12. Compensation of Officers.

	The officers of the Corporation shall receive such compensation for their services as the Board of Directors or the appropriate committee thereof may determine. The Board of Directors may delegate its authority to determine compensation to designated officers of the Corporation.

	Section 5.13. Execution of Instruments.

	Checks, notes, drafts, other commercial instruments, assignments, guarantees of signatures and contracts (except as otherwise provided herein or by law) shall be executed by the Chief Executive Officer or other officers or employees or agents, in any such case as the Board of Directors may direct or authorize.

	Section 5.14. Mechanical Endorsements.

	The Chief Executive Officer, the Secretary, or other authorized officers may authorize any endorsement on behalf of the Corporation to be made by such mechanical means or stamps as any of such officers may deem appropriate.

	SECTION VI

	Indemnification

	Section 6.1. Indemnification Provisions in Certificate of Incorporation

	. The provisions of this Section VI are intended to supplement Article VII of the Certificate of Incorporation pursuant to Sections 7.2 and 7.3 thereof. To the extent that this Section VI contains any provisions inconsistent with said Article VII, the provisions of the Certificate of Incorporation shall govern. Terms defined in such Article VII shall have the same meaning in this Section VI.

	Section 6.2. Indemnification of Employees

	. The Corporation shall indemnify and advance expenses to its employees to the same extent as to its directors and officers, as set forth in the Certificate of Incorporation and in this Section VI of the Bylaws of the Corporation.

	Section 6.3. Undertakings for Advances of Expenses

	. If and to the extent the Delaware General Corporation Law requires, an advancement by the Corporation of expenses incurred by an indemnitee pursuant to clause (iii) of the last sentence of Section 7.1 of the Certificate of Incorporation (hereinafter an "advancement of expenses") shall be made only upon delivery to the Corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "final adjudication") that such indemnitee is not entitled to be indemnified for such expenses under Article VII of the Certificate of Incorporation or otherwise.

	158

	Exhibit 3.02

	Section 6.4. Claims for Indemnification

	. If a claim for indemnification under Section 7.1 of the Certificate of Incorporation is not paid in full by the Corporation within 60 days after it has been received in writing by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and in any suit by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking the Corporation shall be entitled to recover such expenses only upon a final adjudication that, the indemnitee has not met the applicable standard of conduct set forth in Section 145 of the Delaware General Corporation Law (or any successor provision or provisions). Neither the failure of the Corporation (including the Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in Section 145 of the Delaware General Corporation Law (or any successor provision or provisions), nor an actual determination by the Corporation (including the Board of Directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to have or retain such advancement of expenses, under Article VII of the Certificate of Incorporation or this Section VI or otherwise, shall be on the Corporation.

	Section 6.5. Insurance

	. The Corporation may maintain insurance, at its expense, to protect itself and any director, trustee, officer, employee or agent of the Corporation or another enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law.

	Section 6.6. Severability

	. In the event that any of the provisions of this Section VI (including any provision within a single section, paragraph or sentence) is held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, the remaining provisions are severable and shall remain enforceable to the full extent permitted by law.

	159

	Exhibit 3.02

	SECTION VII

	Miscellaneous

	Section 7.1. Seal

	. The Corporation shall have a suitable seal, containing the name of the Corporation. The Secretary shall be in charge of the seal and may authorize one or more duplicate seals to be kept and used by any other officer or person.

	Section 7.2. Waiver of Notice

	. Whenever any notice is required to be given, a waiver thereof in writing, signed by the person or persons entitled to the notice, whether before or after the time stated therein shall be deemed equivalent thereto. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

	Section 7.3. Voting of Stock Owned by the Corporation

	. Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Chairman of the Board, the Vice Chairman, any Vice President or such officers or employees or agents as the Board of Directors or any of such designated officers may direct. Any such officer may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and powers incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may from time to time confer like powers upon any other person or persons.

	SECTION VIII

	Amendment of Bylaws

160


Exhibit 3.02

	Section 8.1. Power to Amend.

	Except as otherwise provided by law or by the certificate of incorporation or these bylaws, these bylaws or any of them may be amended in any respect or repealed at any time, either (i) at any meeting of stockholders, subject to these bylaws,

	provided

	that any amendment or supplement proposed to be acted upon at any such meeting has been described in reasonable detail in the notice of such meeting, or (ii) at any meeting of the Board of Directors,

	provided

	in all events that any action relating to the last sentence of Section 3.1 hereof concerning the age 70 qualification limitation on Board service shall require the vote of 100% of the directors then in office, and

	provided

	further in all events that no amendment to any by-law that conflicts or varies with, or frustrates the purposes or effect of, any provision of the certificate of incorporation or other provisions of these bylaws may be adopted (including, without limitation, any bylaw the purpose or effect of which is to require approvals of matters by supermajority vote of the Board of Directors or a committee) without amendment of such provision of the certificate of incorporation or other provision of the bylaws in accordance with applicable law and, to the extent otherwise applicable, these bylaws.

	Section 8.2. Approval of Amendments.

	Notwithstanding the foregoing and anything contained in these bylaws to the contrary, these bylaws may not be amended, supplemented, or repealed by the stockholders, and no provision inconsistent in intent, operation, or effect therewith may be adopted by the stockholders, without the affirmative vote of the holders of at least 80% of the stock of the Corporation of any class or series entitled to vote generally in the election of the directors of the Board of Directors, voting together as a single class. Notwithstanding anything contained in these bylaws to the contrary, the affirmative vote of the holders of at least 80% of the stock of the Corporation of any class or series entitled to vote generally in the election of the directors of the Board of Directors, voting together as a single class, is required to amend, supplement or repeal, or to adopt any provisions inconsistent with, this section.

161

	Exhibit 10.33

	PERFORMANCE SHARE AWARD SUBPLAN

	OF THE 2002 OMNIBUS LONG-TERM COMPENSATION PLAN

	2004-2006 PERFORMANCE PERIOD

	EASTMAN CHEMICAL COMPANY

214


Exhibit 10.33

	PERFORMANCE SHARE AWARD SUBPLAN

	OF THE 2002 OMNIBUS LONG-TERM COMPENSATION PLAN

	2004-2006 PERFORMANCE PERIOD

	TABLE OF CONTENTS

Section	Title	Page

Section 1.	Background	1

Section 2.	Definitions	1

Section 3.	Administration	2

Section 4.	Eligibility	3

Section 5.	Form of Awards	3

Section 6.	Size of Awards	3

Section 7.	Composition of Comparison Group	4

Section 8.	Preconditions to Receipt of an Award	4

Section 9.	Manner and Timing of Award Payments	5

Section 10.	No Rights as Stockholder	6

Section 11.	Application of Plan	6

Section 12.	Adjustment of Actual Grant Amount	6

Section 13.	Amendments	6

Exhibit A.		7

Exhibit B.		8

215


Exhibit 10.33

	EASTMAN CHEMICAL COMPANY

	PERFORMANCE SHARE AWARD SUBPLAN

	OF THE 2002 OMNIBUS LONG-TERM COMPENSATION PLAN

	2004-2006 PERFORMANCE PERIOD

	Section 1. Background

	. Under Section 11 of the Eastman Chemical Company 2002 Omnibus Long-Term Compensation Plan (the "Plan"), the "Committee" (as defined in the Plan), may, among other things, award shares of the $.01 par value common stock ("Common Stock") of Eastman Chemical Company (the "Company") to "Employees" (as defined in the Plan), and such awards may take the form of performance shares, which are contingent upon the attainment of certain performance objectives during a specified period, and subject to such other terms, conditions, and restrictions as the Committee deems appropriate. The purpose of this Performance Share Award Subplan (this "Subplan") is to set forth the terms of the grant of performance shares for the 2004-2006 Performance Period specified herein, effective as of January 1, 2004 (the "Effective Date").

	Section 2. Definitions

	.

	(a)

	The following definitions shall apply to this Subplan:

	 (i)

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

	 (ii)

	"Award Amount" means the performance shares awarded to the participant under this Subplan at the beginning of the Performance Period.

	 (iii)

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

	 (iv)

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

	 (v)

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

	 (vi)

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

	 (vii)

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

	 1

	 216

	 Exhibit 10.33

	 (viii)

	"Participation Date" means April 2, 2004.

	 (ix)

	"Performance Period" means January 1, 2004 through December 31, 2006.

	 (x)

	"Performance Year" means one of the three calendar years in the Performance Period.

	 (xi)

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

	 (xii)

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

	 (xiii)

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

	(b)

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

	Section 3. Administration

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

	 2

	 217

	 Exhibit 10.33

	Section 4. Eligibility

	. The Employees who are eligible to participate in this Subplan are those Employees who, as of the Participation Date, are at Salary Grade 53 and above. These Salary Grades generally include Employees who, as of the Participation Date, have been designated as "officers" of the Company for purposes of Section 16 of the Exchange Act, and held positions with the Company considered carrying responsibilities and functions generally associated with a vice-president-level position. Employees who are promoted during the Performance Period to a position that would meet the above criteria, but who do not hold such position as of the Participation Date, are

	not

	eligible to participate in this Subplan.

	Section 5. Form of Awards

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

	Section 6. Size of Awards

	.

	(a)

	Target Award Range.

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

	(b)

	Stock Option Grants for Employees Named After the Participation Date.

	Employees who are hired into, or promoted to a Salary Grade 53 or above position after the Participation Date but prior to, subject to final approval by the Compensation Committee, an October 2004 option grant, will be eligible to receive an additional number of options to purchase Company stock as of the next scheduled meeting of the Compensation Committee following their hire or promotion. The additional grant of options will be determined based on several factors, including timing of the promotion or hire, number of options received in the previous assignment, stock option target ranges for the employee’s new salary grade, and considerations of performance assessment. The amount of the award will be recommended by the Company’s Chief Executive Officer for approval by the Compensation Committee. The option grant price will be the closing price of Company common stock on the New York Stock Exchange on the meeting date of the Compensation Committee.

	(c)

	Actual Grant Amount.

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

	 3

	 218

	 Exhibit 10.33

	(i)

	The Company's TSR during the Performance Period relative to the TSRs of the companies in the Comparison Group during the Performance Period.

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

	(ii)

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

	The Return on Capital target will be determined by the Committee.

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

	Section 7. Composition of Comparison Group

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

	Section 8. Preconditions to Receipt of an Award

	.

	(a)

	Continuous Employment

	. Except as specified in paragraph (b) below, to remain eligible for an Award under this Subplan, an eligible Employee must

	remain continuously employed with the Company or a Subsidiary at all times from the Effective Date through the Award Payment Date.

	4

	 219

	 Exhibit 10.33

	(b)

	Death, Disability, Retirement, or Termination for an Approved Reason Before the Award Payment Date.

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

	Section 9. Manner and Timing of Award Payments

	.

	(a)

	Timing of Award Payment

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

	(b)

	Tax Withholding

	. The Company may withhold or require the grantee to remit a cash amount sufficient to satisfy federal, state, and local taxes (including the participant’s FICA obligation) required by law to be withheld. Further, either the Company or the grantee may elect to satisfy the withholding requirement by having the Company withhold shares of common stock having a

	F

	air

	M

	arket

	V

	alue on the date the tax is to be determined equal to the minimum statutory total tax which could be imposed on the transaction.

	(c)

	Deferral of Award in Excess of the Maximum Deductible Amount

	. If payment of the Award would, or could in the reasonable estimation of the Committee, result in the participant's receiving compensation in excess of the Maximum Deductible Amount in a given year, then such portion (or all, as applicable) of the Award as would, or could in the reasonable estimation of the Committee, cause such participant to receive compensation from the Company in excess of the Maximum Deductible Amount shall be converted into the right to receive a cash payment, which shall be deferred until after the participant retires or otherwise terminates employment with the Company and its Subsidiaries.

	(d)

	Election to Defer the Award

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

	 5

	 220

	 Exhibit 10.33

	(e)

	Award Deferral to the EDCP

	. In the event that all or any portion of an Award is converted into a right to receive a cash payment pursuant to Sections 9(c) or 9(d), except as otherwise provided in this Section with respect to Section 16 insiders, an amount representing the Fair Market Value, as of the date the Common Stock covered by the Award otherwise would be delivered to the participant, of the Actual Grant Amount (or the deferred portion thereof) will be credited to the Stock Account of the EDCP, and hypothetically invested in units of Common Stock.

	Notwithstanding the foregoing, for each Section 16 insider electing to defer the Award, the deferrable amount, when initially credited to the participant's EDCP Account, shall be held in a participant's Interest Account until the next date that dividends are paid on Common Stock, and on such date the deferrable amount that would have been initially credited to the participant's Stock Account but for this sentence shall be transferred, together with allocable interest thereon, to the participant's Stock Account, subject to provisions set forth in the EDCP.

	Thereafter, such amount shall be treated in the same manner as other investments in the EDCP and shall be subject to the terms and conditions thereof.

	Section 10. No Rights as Stockholder

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

	Section 11. Application of Plan

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

	Section 12. Adjustment of Actual Grant Amount

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

	Section 13. Amendments

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

	 6

221


Exhibit 10.33

	EXHIBIT A

	Eastman Chemical Company

	Performance Share Award Grant Table

	2004-2006 Cycle

	 7

	 222

	 Exhibit 10.33

	EXHIBIT B

	Award Multiplier Table

	Eastman TSR Relative to Comparison Companies

	Differential from Target Return on Capital

	<-7%

	-5% to

	-7%

	-3 to

	-5%

	-1 to

	-3%

	-1 to +1%

	+1 to +3%

	+3 to +5%

	+5 to +7%

	+7 to +10%

	>10%

	0-19%( 5

	th

	quintile)

	0.0

	0.0

	0.0

	0.0

	0.6

	0.8

	1.0

	1.3

	1.6

	1.9

	20-39%(4

	th

	quintile)

	0.0

	0.0

	0.0

	0.4

	0.8

	1.0

	1.3

	1.6

	1.9

	2.2

	40-59%(3

	rd

	quintile)

	0.0

	0.0

	0.4

	0.6

	1.0

	1.3

	1.6

	1.9

	2.2

	2.5

	60-79%(2

	nd

	quintile)

	0.0

	0.4

	0.6

	1.0

	1.3

	1.6

	1.9

	2.2

	2.5

	2.8

	80-99%(1

	st

	quintile)

	0.0

	0.6

	0.8

	1.3

	1.6

	1.9

	2.2

	2.5

	2.8

	3.0

	8

223

[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2003
OR
[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________________________ to ______________________

Commission file number 0-12626

EASTMAN CHEMICAL COMPANY (Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	62-1539359 (I.R.S. Employer Identification No.)

100 N. Eastman Road, Kingsport, Tennessee (Address of principal executive offices)	37660 (Zip Code)

Registrant's telephone number, including area code: (423) 229-2000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Common Stock, par value $0.01 per share (including rights to purchase shares of Common Stock or Participating Preferred Stock)	Name of each exchange on which registered New York Stock Exchange

Securities registered pursuant to section 12(g) of the Act: None

1.	Business	4-26
	Executive Officers of the Company	27-28

2.	Properties	29-30

3.	Legal Proceedings	30-31

4.	Submission of Matters to a Vote of Security Holders	31

5.	Market for the Registrant's Common Stock and Related Stockholder Matters	32

6.	Selected Financial Data	33

7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	34-77

7A.	Quantitative and Qualitative Disclosures About Market Risk	78

8.	Financial Statements and Supplementary Data	79-133

9.	Changes in and Disagreements With Accountants on Accounting
	and Financial Disclosure	134

9A.	Controls and Procedures	134

10.	Directors and Executive Officers of the Registrant	135

11.	Executive Compensation	135

12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	135-136

13.	Certain Relationships and Related Transactions	136

14.	Auditor Fees	136

	Segment using manufacturing facility

Location	CASPI	PCI	SP	Polymers	Fibers


USA and Canada Batesville, Arkansas	x	x
Lynwood, California	x
Columbus, Georgia	x
Forest Park, Georgia	x
Carpentersville, Illinois	x
Jefferson, Pennsylvania	x
Columbia, South Carolina			x	x
Roebuck, South Carolina	x
Kingsport, Tennessee	x	x	x	x	x
LaVergne, Tennessee	x
Ennis, Texas	x
Longview, Texas	x	x		x
Franklin, Virginia*	x
Pleasant Prairie, Wisconsin	x
Europe Kallo, Belgium	x
Sokolov, Czech Republic	x	x
Hartlepool, England			x
Workington, England				x	x
Hamburg, Germany	x
Waterford, Ireland	x
Cola’ di Lazise, Italy	x
Sant’ Albano, Italy	x
Middelburg, Netherlands	x
Rotterdam, Netherlands**				x
San Roque, Spain		x	x	x
Molndal, Sweden	x
Llangefni, Wales		x
Asia Pacific Funing, China	x
Nanping, China	x
Tianjin, China	x
Kuantan, Malaysia**			x
Jurong Island, Singapore**		x

Latin America Zarate, Argentina		x
Cosoleacaque, Mexico		x
Uruapan, Mexico	x

			High		Low		Cash Dividends Declared
2002	First Quarter	$	48.99	$	37.82	$	0.44
	Second Quarter		49.04		43.30		0.44
	Third Quarter		47.82		38.17		0.44
	Fourth Quarter		40.53		35.35		0.44
2003	First Quarter	$	38.40	$	27.89	$	0.44
	Second Quarter		33.95		28.82		0.44
	Third Quarter		36.60		31.46		0.44
	Fourth Quarter		39.53		31.46		0.44

Summary of Operating Data

(Dollars in millions, except per share amounts)		2003		2002		2001		2000		1999


Sales	$	5,800	$	5,320	$	5,390	$	5,292	$	4,590
Operating earnings (loss)		(267)		208		(120)		562		202
Earnings (loss) from operations before cumulative effect of change in accounting principle		(273)		79		(175)		303		48
Net earnings (loss)		(270)		61		(175)		303		48

Basic
Earnings (loss) per share before
cumulative effect of change in
accounting principle	$	(3.54)	$	1.02	$	( 2.28)	$	3.95	$	0.61
Cumulative effect of change in
accounting principle, net		0.04		(0.23)		-		-		-

Net earnings (loss) per share	$	(3.50)	$	0.79	$	( 2.28)	$	3.95	$	0.61


Diluted
Earnings (loss) per share before
cumulative effect of change in
accounting principle	$	(3.54)	$	1.02	$	( 2.28)	$	3.94	$	0.61
Cumulative effect of change in
accounting principle, net		0.04		(0.23)		-		-		-

Net earnings (loss) per share	$	(3.50)	$	0.79	$	( 2.28)	$	3.94	$	0.61



Statement of Financial Position Data

Current assets	$	2,010	$	1,547	$	1,464	$	1,523	$	1,489
Net properties		3,419		3,753		3,627		3,925		3,950
Total assets		6,230		6,287		6,092		6,550		6,303
Current liabilities		1,477		1,247		960		1,258		1,608
Long-term borrowings		2,089		2,054		2,143		1,914		1,506
Total liabilities		5,187		5,016		4,710		4,738		4,544
Total stockholders’ equity		1,043		1,271		1,382		1,812		1,759
Dividends declared per share		1.76		1.76		1.76		1.76		1.76

34


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Change in Assumption	Impact on 2004 Pre-tax U.S. Pension Expense	Impact on December 31, 2003 Projected Benefit Obligation for U.S. Pension Plans	Impact on December 31, 2003 Benefit Obligation for Other U.S. Postretirement Plans


25 basis point decrease in discount rate	+$5 Million	+$48 Million	+$28 Million

25 basis point increase in discount rate	-$5 Million	-$46 Million	-$27 Million

25 basis point decrease in expected return on assets	+$2 Million	No Impact	N/A

25 basis point increase in expected return on assets	-$2 Million	No Impact	N/A

Earnings (Loss)

(Dollars in millions, except per share amounts)		2003		2002


Operating earnings (loss)	$	(267)	$	208
Net earnings (loss) before cumulative effect of change in accounting principle		(273)		79
Net earnings (loss)		(270)		61
Earnings (loss) per share
--Basic		(3.50)		0.79
--Diluted		(3.50)		0.79

Asset impairments and restructuring charges, net		489		5
Goodwill impairments		34		--
Other operating income		(33)		--

(Dollars in millions)		2003		2002	Change	Volume Effect	Price Effect	Product Mix Effect	Exchange Rate Effect


Sales	$	5,800	$	5,320	9 %	(1) %	5 %	1 %	4 %

(Dollars in millions)		Balance at January 1, 2002		Provision/ Adjustments		Noncash Reductions		Cash Reductions		Balance at December 31, 2002

Noncash charges	$	--	$	2	$	(2)	$	--	$	--
Severance costs		10		2		--		(10)		2
Site closure costs		13		3		--		(9)		7

Total	$	23	$	7	$	(2)	$	(19)	$	9


		Balance at January 1, 2003		Provision/ Adjustments		Noncash Reductions		Cash Reductions		Balance at December 31, 2003


Noncash charges	$	--	$	500	$	(500)	$	--	$	--
Severance costs		2		20		--		(12)		10
Site closure costs		7		3		--		(5)		5

Total	$	9	$	523	$	(500)	$	(17)	$	15

(Dollars in millions)		2003		2002

Other income	$	(28)	$	(14)
Other charges		18		16

Other (income) charges, net	$	(10)	$	2

CASPI Segment

(Dollars in millions)		2003		2002	Change


External Sales	$	1,597	$	1,540	4 %
Volume effect					(6) %
Price effect					2 %
Product mix effect					3 %
Exchange rate effect					5 %

Interdivisional sales		--		--	N/A

Operating earnings (loss)		(358)		58	N/A

Asset impairments and restructuring charges, net		386		5
Goodwill impairments		34		--
Other operating income		(13)		--

PCI Segment

(Dollars in millions)		2003		2002	Change


External Sales	$	1,184	$	1,084	9 %
Volume effect					-- %
Price effect					7 %
Product mix effect					-- %
Exchange rate effect					2 %

Interdivisional sales		495		383	29 %

Operating loss		(89)		14	N/A

Asset impairments and restructuring charges, net		99		(1)

SP Segment

(Dollars in millions)		2003		2002	Change


External Sales	$	559	$	528	6 %
Volume effect					1 %
Price effect					-- %
Product mix effect					1 %
Exchange rate effect					4 %

Interdivisional sales		49		45	9 %

Operating earnings		63		34	85 %

Asset impairments and restructuring charges, net		1		-
Other operating income		20		-

Polymers Segment

(Dollars in millions)		2003		2002	Change


External Sales	$	1,756	$	1,510	16 %
Volume effect					2 %
Price effect					11 %
Product mix effect					(1) %
Exchange rate effect					4 %

Interdivisional sales		68		55	23 %

Operating earnings (loss)		62		35	77 %

Asset impairments and restructuring charges, net		2		1

Fibers Segment

(Dollars in millions)		2003		2002	Change


External Sales	$	635	$	642	(1) %
Volume effect					4 %
Price effect					1 %
Product mix effect					(9) %
Exchange rate effect					3 %

Interdivisional sales		80		72	10 %

Operating earnings		125		133	(6) %
Asset impairments and restructuring charges, net		1		--

Developing Businesses Segment


(Dollars in millions)		2003		2002	Change


External Sales	$	69	$	16	>100 %

Interdivisional sales		396		330	20 %

Operating loss		(65)		(70)	7 %

		Balance at January 1, 2001		Provision/ Adjustments		Noncash Reductions		Cash Reductions		Balance at December 31, 2001


Noncash charges	$	--	$	373	$	(373)	$	--	$	--
Severance costs		--		16		--		(6)		10
Site closure costs		10		10		--		(7)		13

Total	$	10	$	399	$	(373)	$	(13)	$	23


(Dollars in millions)		Balance at January 1, 2002		Provision/ Adjustments		Noncash Reductions		Cash Reductions		Balance at December 31, 2002

Noncash charges	$	--	$	2	$	(2)	$	--	$	--
Severance costs		10		2		--		(10)		2
Site closure costs		13		3		--		(9)		7

Total	$	23	$	7	$	(2)	$	(19)	$	9

(Dollars in millions)		Payments Due For
Period		Notes and Debentures		Commercial Paper and Other Borrowings		Purchase Obligations		Operating Leases		Other Liabilities (a)		Total


2004	$	504	$	--	$	246	$	45	$	64	$	859
2005		--		196		246		40		128		610
2006		5		--		243		33		180		461
2007		--		--		240		24		151		415
2008		250		--		140		13		107		510
2009 and beyond		1,638		--		902		40		560		3,140

Total	$	2,397	$	196	$	2,017	$	195	$	1,190	$	5,995

ITEM	Page

Management's Responsibility for Financial Statements	80

Report of Independent Auditors	81

Consolidated Statements of Earnings (Loss), Comprehensive Income (Loss) and Retained Earnings	82

Consolidated Statements of Financial Position	83

Consolidated Statements of Cash Flows	84

Notes to Consolidated Financial Statements	85-133

Financial Statement Schedules: II - Valuation and Qualifying Accounts	145

/s/ J. Brian Ferguson		/s/ Richard A. Lorraine

J. Brian Ferguson		Richard A. Lorraine
Chairman of the Board and		Senior Vice President and
	Chief Executive Officer		Chief Financial Officer

March 5, 2004

	For years ended December 31,
(Dollars in millions, except per share amounts)		2003		2002		2001

Earnings (Loss)
Sales	$	5,800	$	5,320	$	5,390
Cost of sales		4,990		4,541		4,497

Gross profit		810		779		893

Selling and general administrative expenses		414		407		407
Research and development expenses		173		159		160
Asset impairments and restructuring charges, net		489		5		396
Goodwill impairments		34		--		--
Other operating income		(33)		--		--
Other operating expense		--		--		50

Operating earnings (loss)		(267)		208		(120)

Interest expense, net		124		122		140
Other (income) charges, net		(10)		2		31
Earnings (loss) before income taxes and cumulative effect of change in accounting principles		(381)		84		(291)
Provision (benefit) for income taxes		(108)		5		(116)


Earnings (loss) before cumulative effect of change in accounting principles		(273)		79		(175)
Cumulative effect of change in accounting principles, net		3		(18)		--

Net earnings (loss)	$	(270)	$	61	$	(175)


Earnings (loss) per share
Basic
Before cumulative effect of change in accounting principles	$	(3.54)	$	1.02	$	(2.28)
Cumulative effect of change in accounting principles, net		0.04		(0.23)		--

Net earnings (loss) per share	$	(3.50)	$	0.79	$	(2.28)


Diluted
Before cumulative effect of change in accounting principles	$	(3.54)	$	1.02	$	(2.28)
Cumulative effect of change in accounting principles, net		0.04		(0.23)		--

Net earnings (loss) per share	$	(3.50)	$	0.79	$	(2.28)


Comprehensive Income (Loss)
Net earnings (loss)	$	(270)	$	61	$	(175)
Other comprehensive income (loss)
Change in cumulative translation adjustment		150		102		(24)
Change in minimum pension liability, net of tax		19		(145)		(106)
Change in unrealized gains (losses) on investments, net of tax		--		(2)		(2)
Change in unrealized gains (losses) on derivative instruments, net of tax		5		1		(2)

Total other comprehensive income (loss)		174		(44)		(134)

Comprehensive income (loss)	$	(96)	$	17	$	(309)


Retained Earnings
Retained earnings at beginning of period	$	1,882	$	1,956	$	2,266
Net earnings (loss)		(270)		61		(175)
Cash dividends declared		(136)		(135)		(135)

Retained earnings at end of period	$	1,476	$	1,882	$	1,956

(Dollars in millions, except per share amounts)	December 31,
Assets		2003		2002

Current assets
Cash and cash equivalents	$	558	$	77
Trade receivables, net of allowance of $28 and $32		614		532
Miscellaneous receivables		87		142
Inventories		698		713
Other current assets		53		83

Total current assets		2,010		1,547


Properties
Properties and equipment at cost		9,861		9,660
Less: Accumulated depreciation		6,442		5,907

Net properties		3,419		3,753


Goodwill		317		344
Other intangibles, net of accumulated amortization of $218 and $51		33		229
Other noncurrent assets		451		414

Total assets	$	6,230	$	6,287


Liabilities and Stockholders’ Equity
Current liabilities
Payables and other current liabilities	$	973	$	1,244
Borrowings due within one year		504		3

Total current liabilities		1,477		1,247


Long-term borrowings		2,089		2,054
Deferred income tax liabilities		316		464
Postemployment obligations		1,126		1,069
Other long-term liabilities		179		182

Total liabilities		5,187		5,016


Commitments and contingencies

Stockholders’ equity
Common stock ($0.01 par value– 350,000,000 shares authorized; shares issued –85,177, 467 and 85,135,117)		1		1
Additional paid-in capital		122		119
Retained earnings		1,476		1,882
Accumulated other comprehensive loss		(121)		(295)

		1,478		1,707
Less: Treasury stock at cost (7,933,646 shares for 2003 and 2002)		435		436


Total stockholders’ equity		1,043		1,271


Total liabilities and stockholders’ equity	$	6,230	$	6,287

(Dollars and shares in millions, except per share amounts)		2003		2002		2001


Net earnings (loss), as reported	$	(270)	$	61	$	(175)
Deduct: Total additional stock-based employee Compensation cost, net of tax, that would have been included in net earnings (loss) under fair value method		10		11		8
Pro forma net earnings (loss)	$	(280)	$	50	$	(183)


Basic earnings (loss) per share	As reported	(3.50)		0.79		(2.28)
	Pro forma	(3.62)		0.65		(2.38)

Shares		77.1		77.0		76.8

Diluted earnings (loss) per share	As reported	(3.50)		0.79		(2.28)
	Pro forma	(3.62)		0.65		(2.38)

Shares		77.1		77.2		76.8

	December 31
(Dollars in millions)		2003		2002


At FIFO or average cost (approximates current cost)
Finished goods	$	583	$	582
Work in process		175		175
Raw materials and supplies		228		229

Total inventories		986		986
Reduction to LIFO value		(288)		(273)

Total inventories at LIFO value	$	698	$	713

		As of December 31, 2003				As of December 31, 2002
(Dollars in millions)		Gross Carrying Amount		Net Carrying Amount		Gross Carrying Amount		Net Carrying Amount


Amortizable intangible assets
Developed technology	$	124	$	6	$	124	$	96
Customer lists		62		6		62		48
Other		18		2		18		15

Total		204		14		204		159

Indefinite-lived intangible assets
Trademarks				19				70


Other intangible assets			$	33			$	229

(Dollars in millions)		CASPI Segment		Other Segments		Total Eastman Chemical


Reported balance at December 31, 2001		331		8		339
Intangible assets reclassified into goodwill at January 1, 2002 net of deferred tax liability		7		--		7
Purchase accounting adjustments and foreign currency translation effect		(5)		--		(5)
Acquisitions		--		3		3

Reported balance at December 31, 2002	$	333	$	11	$	344

Impairment of goodwill		(34)		--		(34)
Foreign currency translation effect		7		--		7

Reported goodwill balance at December 31, 2003	$	306	$	11	$	317

(Dollars in millions, except per share amounts)		2001


Reported net earnings (loss)	$	(175)
Add back goodwill amortization		15
Add back assembled workforce and trademark amortization		3

Adjusted net earnings (loss)	$	(157)


Basic earnings (loss) per share before cumulative effect of change in accounting principle:
Reported basic earnings (loss) per share	$	(2.28)
Add back goodwill amortization		.20
Add back assembled workforce and trademark amortization		.03

Adjusted net earnings (loss) per share	$	(2.05)


Diluted earnings (loss) per share before cumulative effect of change in accounting principle:
Reported diluted earnings (loss) per share	$	(2.28)
Add back goodwill amortization		.20
Add back assembled workforce and trademark amortization		.03

Adjusted net earnings (loss) per share	$	(2.05)

	December 31, 2003				December 31, 2002

(Dollars in millions)		Recorded Amount		Fair Value		Recorded Amount		Fair Value


Long-term borrowings	$	2,089	$	2,247	$	2,054	$	2,220

Summary Balance Sheet

(Dollars in millions)		2003		2002


Change in benefit obligation:
Benefit obligation, beginning of year	$	1,222	$	1,062
Service cost		42		36
Interest cost		84		80
Actuarial loss		94		72
New plans		28		72
Effect of currency exchange		10		--
Benefits paid		(134)		(100)

Benefit obligation, end of year	$	1,346	$	1,222


Change in plan assets:
Fair value of plan assets, beginning of year	$	574	$	697
Actual return (loss) on plan assets		189		(96)
New plans		19		70
Effect of currency exchange		6		--
Company contributions		249		3
Benefits paid		(134)		(100)

Fair value of plan assets, end of year	$	903	$	574


Benefit obligation in excess of plan assets	$	443	$	648
Unrecognized actuarial loss		(535)		(564)
Unrecognized prior service credit		73		96

Net amount recognized, end of year	$	(19)	$	180


Amounts recognized in the Statements of Financial Position consist of:
Prepaid benefit cost	$	(33)	$	--
Accrued benefit cost		14		180
Additional minimum liability		386		417
Accumulated other comprehensive loss		(386)		(417)

Net amount recognized, end of year	$	(19)	$	180

Summary of Benefit Costs

(Dollars in millions)		2003		2002		2001


Components of net periodic benefit cost:
Service cost	$	42	$	36	$	32
Interest cost		84		80		72
Expected return on assets		(82)		(77)		(72)
Amortization of:
Transition asset		--		(4)		(4)
Prior service credit		(11)		(12)		(12)
Actuarial loss		19		9		4

Net periodic benefit cost	$	52	$	32	$	20