UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

(Amendment No.         )  

Filed by the Registrant  þ                            Filed by a party other than the Registrant  ¨

March 17, 20142016

Dear Fellow Stockholder:

Our 20142016 Annual Meeting of Stockholders will be held in the Cumberland Amphitheatre of the MeadowView Marriott Conference Resort and Convention Center, 1901 Meadowview Parkway, Kingsport, Tennessee, on May 1, 20145, 2016 at 11:30 a.m. Doors to the meeting will open at 10:30 a.m. The business to be considered and voted upon at the meeting is explained in this proxy statement. A copy of Eastman’s 20132015 Annual Report to Stockholders is also included with these materials.

Your vote is important for this year’s annual meeting, regardless of the number of shares you own. Signing and returning a proxy card or submitting your proxy by Internet or telephone in advance of the meeting will not prevent you from voting in person, but will assure that your vote is counted if you are unable to attend the meeting.Whether you choose to vote by proxy card or electronically by telephone or the Internet, I urge you to vote as soon as possible.If you are a record holder of Eastman stock, an admission ticket for the meeting is included with your proxy card or electronic form of proxy. Please bring this ticket with you if you plan to attend the meeting in person. If you received our proxy materials from a broker or bank and do not have an admission ticket but wish to attend the meeting, please call (423) 229-4647.

Thank you for your support of our Company.

Sincerely,

James P. RogersMark J. Costa

Chairman and

Chief Executive ChairmanOfficer

TABLE OF CONTENTS

NOTICE OF ANNUAL MEETING AND PROXY STATEMENT

EASTMAN CHEMICAL COMPANY

200 South Wilcox Drive

Kingsport, Tennessee 37662

(423) 229-2000

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MAY 1, 20145, 2016

To Our Stockholders:

The 20142016 Annual Meeting of Stockholders of Eastman Chemical Company (“Eastman” or the “Company”) will be held at the Cumberland Amphitheatre of the MeadowView Marriott Conference Resort and Convention Center, 1901 Meadowview Parkway, Kingsport, Tennessee, on May 1, 2014,5, 2016, at 11:30 a.m., local time. The purposes of the meeting are:

Only stockholders of record at the close of business on March 7, 201415, 2016 are entitled to notice of, and 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:

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

David A. Golden

Chief Legal Officer and Corporate Secretary

March 17, 20142016

PROXY STATEMENT

FOR

ANNUAL MEETING OF STOCKHOLDERS OF

EASTMAN CHEMICAL COMPANY

TO BE HELD ON MAY 1, 20145, 2016

INFORMATION ABOUT THE MEETING AND VOTING

Proxy Statement and Annual Meeting

This proxy statement is dated March 17, 20142016 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)(www.eastman.com) and atwww.ReadMaterial.com/EMN, on or about March 21, 2014.23, 2016. 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 1, 20145, 2016 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 stock you own. That other person is called a proxy. If you designate someone as your proxy in a written or electronic 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 viaby Internet, or by telephone), you appoint Curtis E. Espeland, the Company’s Chief Financial Officer, and David A. Golden, 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.meeting. 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 by 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:

If you received the “Important Notice Regarding the Availability of Proxy Materials”, follow the instructions on that notice to access an electronic form of proxy. 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

YouIf you give a proxy, you may revoke your proxyit at any time before its exercise at the meeting by:

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 37662-0431, Attention: Corporate Secretary, so that they are received before the meeting.

Record Date; Stockholders Entitled to Vote; Voting Rights

The record date for the 20142016 Annual Meeting of Stockholders is March 7, 2014.15, 2016. Stockholders 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 151,148,599147,938,222 shares of common stock issued and outstanding. Holders of common stock are entitled to one vote on each of the twelve 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.

QuorumQuorum; Abstentions and Broker Non-Votes

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 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. Brokers which have not received voting instructions from their clients cannot vote on their clients’ behalf on the election of directors, or the advisory approval of executive compensation, or the advisory vote on the stockholder proposal, but may, although they are not required to, vote their clients’ shares on the ratification of the appointment of independent auditors.

Votes Required for Approval of Matters to be Considered

Each director nominee 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 (1) vote “for” all twelve of the nominees, (2) vote “against” all twelve 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, 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 both the advisory approval of executive compensation, and the ratification of the appointment of independent auditors.auditors, and the advisory approval 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 the vote on these matters.

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 $15,000$16,000 plus reimbursement of out-of-pocket expenses.

Matters To Beto be Acted Upon 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 20152017 Annual Meeting

In accordance with the rules of the SEC, if you wish to submit a proposal for presentation at Eastman’s 20152017 Annual Meeting of Stockholders, it must be received by the Company at its principal executive offices no later than November 21, 201423, 2016 in order to be included in the Company’s proxy materials relating tofor its 20152017 Annual Meeting of Stockholders. Any such proposal should be sent to Eastman Chemical Company, P.O. Box 431, Kingsport, Tennessee 37662-0431, 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 37662-0431, Attention: Investor Relations. To be timely, the notice must be delivered to the Corporate Secretary of the Company no earlier than 150 days and not later than 120 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 20142016 Annual Meeting of Stockholders is first sent to stockholders on March 21, 2014,23, 2016, then such advance notice wouldmust be timely if delivered no earlier than October 22, 201424, 2016 and nonot later than November 21, 2014.23, 2016.

Nominations by Stockholders for Election to the Board of Directors and Stockholder Nomination Proxy Access

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. 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 any such nominees should be included with the Board’s nominees for election by stockholders. In addition, the proxy access Bylaw provision adopted by the Board in February 2016 allows qualifying stockholders to include their director nominees in the Company’s proxy materials by giving adequate and timely notice to the Corporate Secretary.See “Nominating and Corporate Governance Committee —Director Nominations” later in this proxy statement. To be adequate, the nomination notice and the notice of proxy access nomination each 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 37662-0431, Attention: Investor Relations. To be timely, the nomination notice and the notice of proxy access nomination each must be delivered to the Corporate Secretary of the Company no earlier than 150 days and not later than 120 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 20142016 Annual Meeting of Stockholders is first sent to stockholders on March 21, 2014,23, 2016 then such notice would be timely if delivered no earlier than October 22, 201424, 2016 and no later than November  21, 2014. 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 any such nominees should be included with the Board’s nominees for election by stockholders.23, 2016.

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

Our Annual Report to Stockholders for 2013,2015, including our consolidated financial statements for the year ended December 31, 2013,2015, is being mailed and delivered electronically to stockholders, and made available on the Internet at the Company’s website(www.eastman.com) and atwww.ViewMaterial.com/EMN, concurrently with this proxy statement. The Company’s Annual Report on Form 10-K for the year ended December 31, 20132015 as filed with the SEC is also available viaon the Internet on the Company’s website (www.eastman.com) and on 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 37662-0431, Attention: Investor Relations.

Communications to the Board of Directors

We believe that communication and engagement with the Company’s stockholders and other interested parties is an essential component of the Company’s corporate governance practices. Our Board has adopted a Stockholder Communication and Engagement Policy to facilitate communication between stockholders and other interested parties and the Board. Stockholders and other interested parties may communicate with non-managementsend communications to the Board, any individual director, or the independent directors as a group in writing by directing such communications to the Chairmail or email to: Board of the Nominating and Corporate Governance Committee or the Lead Director,Directors, Eastman Chemical Company, c/o Corporate Secretary, P.O. Box 1976, Kingsport, Tennessee 37662-1976, or by telephone toll free by calling (800) 782-2515. Any communications concerning substantive Board or Company matters are promptly forwarded byemail: corpsecy@eastman.com. Stockholders should indicate in the office“ATTN:” line of the Corporate Secretaryenvelope or the subject line of the email, as applicable, whether the communication is directed to the ChairBoard, an individual director, or the independent directors as a group.

The Board Stockholder Communication and Engagement Policy is available in the “Investors — Corporate Governance” section of the Nominating and Corporate Governance Committee and the Lead Director, and the office of the Corporate Secretary keeps and regularly provides to the Chair of the Nominating and Corporate Governance Committee and the Lead Director a summary of any communications received.Eastman website (www.eastman.com).

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, 20132015 by each director and by each executive officer named in the Summary Compensation Table (under “Executive Compensation — Compensation Tables” below, referred to as the “named executive officers”) and by the directors, the named executive officers, and the other executive officers as a group.

(5)	Includes 95,835143,941 shares that may be acquired upon exercise of options exercisable on or before March 1, 2014.2016.

(19)

Includes a total of 1,470,454930,706 shares that may be acquired upon exercise of options exercisable on or before March 1, 20142016 and 33,01529,828 restricted shares as to which directors have voting power but no investment power. Also includes 50,798 shares owned by the Foundation, of which shares two executive officers each may have been deemed a beneficial owner by virtue of shared voting and investment power as a director of the Foundation.Foundation, but as to which they have no pecuniary interest.

Executive and Director Stock Ownership Expectations; No Hedging or Pledging of Company Stock

Eastman has stock ownership expectations for its directors and executive officers. These persons are expected to acquire and maintain a stake in the Company valued at $250,000 for non-employee directors (five times the portion of the annual retainer fee designated as “service retainer”), five times annual base pay for the Chief Executive Officer, and two and one-half times annual base pay for the other executive officers. Directors and executive officers are expected to attain these levels of stock ownership within five years of first becoming a director or an executive officer. UnitsHypothetical units of the hypothetical Eastman common stock fund that are credited to an executive’s account under the Eastman Executive Deferred Compensation Plan (the “EDCP”) and to a director’s account under the Directors’ Deferred Compensation Plan (the “DDCP”) are counted with shares of common stock actually owned to determine stock ownership under the director and executive ownership expectations.See “Director Compensation” note (4) and “EXECUTIVE COMPENSATION — Compensation Tables — 2015 Nonqualified Deferred Compensation” later in this proxy statement.

Company directors and executive officers are prohibited from use of derivative financial instruments to hedge or mitigate their exposure to changes in the market price of Eastman common stock, and are prohibited from pledging Eastman common stock as security or collateral for loans or in margin brokerage accounts.

The table below shows the number of shares of common stock and EDCP and DDCP common stock units owned under the ownership expectations as of December 31, 20132015 by each director and each named executive officer. All directors and executive officers have met or are on schedule to meet their ownership expectations.

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, 2013.2015.

PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING

ITEM 1 — ELECTION OF DIRECTORS

The terms of office of all thirteen current directors will expire at the 2014 Annual Meeting, and twelve of those directors have been nominated for reelection for a one-year term. Howard L. Lance, who has served as a director since 2005, has notified the Board of Directors that he will not stand for reelection at the Annual Meeting. Stockholders are being asked to vote on the election of twelve directors to serve until the 20152017 Annual Meeting of Stockholders and their successors are duly elected and qualified. The terms of office of all twelve current directors will expire at the 2016 Annual Meeting, and each of those directors has been nominated for reelection for a one-year term. 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 Annual Meeting.

Director Change Since the 2015 Annual Meeting.    In February 2016 the Board elected James J. O’Brien as a director.

Majority Vote Standard for Election of Directors.    The Company’s Bylaws provide that directors are 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 receiveis a majority of votes cast in favor of reelection andholdover director 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 rationale 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 “holdoverholdover director.” In 2014,2016, all nominees for director are currently serving as directors.

Set forth below is information about each director nominated for election.

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

Set forth below is information about each director nominated for election.

NOMINEES FOR DIRECTOR

(For One-Year Term Expiring Annual Meeting 2015)2017)

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 with 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 sixfive meetings during 2013.2015. 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 committeesCommittees of the Board on which he or she served.served (during the period in which he or she served). The Board meets immediately before each annual meeting of stockholders, and the directors in attendance at such Board meeting attend the annual meeting of stockholders. All directorsattendeddirectorsthen serving on the 2013Board attended the 2015 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 may face from time to time, 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 at any time. 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 ChiefUpon retirement of the Company’s then Executive Officer, Mark J. Costa, was appointed toChairman, effective July 1, 2014 the Board on May 14, 2013, the date he was elected by the Board to serve as Chief Executive Officer of the Company (with such election being effective January 1, 2014). Our current Executive Chairman of the Board, James P. Rogers, served as bothdesignated Chief Executive Officer and Chairman until January 1, 2014, at which time his appointment as Executive Chairman became effective. Given his years of service to Eastman, his significant breadth and depth of knowledge of the Company and in the chemical industry, and the efficiencies that his continued service to the Company provides, the Board deemed it appropriate that he continuedirector Mark J. Costa to serve as Chairman, having determined that this was the appropriate time for the appointment and the most efficient manner to facilitate effective communication between management and the Board and provide strong and consistent leadership as well as a unified voice for the Company. In addition, the Board believes that currently combining the roles of Chairman and Chief Executive Chairman.Officer helps ensure that the Chief Executive Officer understands and can effectively and efficiently oversee the implementation of the recommendations and decisions of the Board.

In order to give a significant voice to our non-management directors and to reinforce effective, independent leadership on the Board, under the Company’s Bylaws and Corporate Governance Guidelines a Lead Director is appointed by the Board when the same person holds the Chief Executive Officer and Chairman positions or if the Chairman is not otherwise independent.independent the Company’s Bylaws and Corporate Governance Guidelines provide that the Company shall have a Lead Director. The Lead Director’s responsibilities, which are described in more detail in the Company’s Corporate Governance Guidelines, include:

Gary E. AndersonStephen R. Demeritt has served as Lead Director from January 2011 untilsince May 2013, when the Board appointed Stephen R. Demeritt as Lead Director.2013.

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 assessment and 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 capital structure, raw material and energy costs and hedging, large capital projects, pension obligations and funding, and acquisitions, divestitures, and joint ventures. The Health, Safety, Environmental and Security Committee assists the Board in fulfilling its oversight responsibility with respect to health, safety, environmental, security, and sustainability 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 (that is, all directors but Messrs. Costa and Rogers)Mr. Costa) has or had 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 these determinations, the Nominating and Corporate Governance Committee and the Board reviewed and evaluated all direct and indirect transactions and relationships between the Company and the non-employee directors and their affiliates and immediate family members. Under the New York Stock Exchange listing standards and Eastman’s Corporate Governance Guidelines, an “independent” director is one who has “no direct or indirect material relationship with the Company or its management” and who:

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-managementnon-employee 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 certain non-employee directors were executive officers.officers and a payment by a third-party to a partnership of which a non-employee director was a partner for professional services to the third-party for which the Company paid fees to the third party. 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 Company 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)(www.eastman.com).

Audit Committee.     The members of the Audit Committee are Ms. HornbakerMessrs. Alfonso (Chair), Anderson, Demeritt, and Hernandez and Ms. Holder, and Messrs. Alfonso, Anderson, Begemann, and Hernandez.Hornbaker. The Audit Committee held nine meetings during 2013.2015. The purpose of the Audit Committee is to assist the Board in fulfilling the Board’s oversight responsibilities relating to:

The Board of Directors has determined that each member of the Audit Committee is “independent” and that each of Ms. Hornbaker and Messrs. Alfonso, Anderson, and Hernandez and Ms. Hornbaker 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

TheOn behalf of the Board of Directors, the Audit Committee oversees the Company’s financial reporting process and its internal control over financial reporting and related disclosure controls and procedures, areas for which management has the primary responsibility. The independent audit firm is responsible for expressing an opinion on the conformity of the Company’s audited financial statements with accounting principles generally accepted in the United States and for issuing its report on the Company’s internal control over financial reporting. All audit and non-audit services provided to the Company by the independent auditors are pre-approved by the Audit Committee or by the Chair of the Audit Committee pursuant to delegated authority, and the Committee considers the compatibility of such non-audit services with the auditors’ independence. At the beginning of the year, the Audit Committee reviewed and discussed with the Company’s managementapproved all known audit and non-audit services and fees to be provided by and paid to PricewaterhouseCoopers LLP, the Company’s independent auditors. During the year, specific audit and non-audit services or fees not previously approved by the Audit Committee were approved in advance by the Audit Committee or by the Chair of the Audit Committee pursuant to delegated authority.

The Audit Committee evaluates the performance of the independent auditors, including the senior audit engagement team, each year and determines whether to reengage the current independent auditors or consider other audit firms. In doing so, the Audit Committee considers the quality and efficiency of the services provided by the auditors, the auditors’ global capabilities, and the auditors’ technical expertise, tenure as the Company’s independent auditors, and knowledge of the Company’s global operations and industry. Based on this evaluation, the Audit Committee decided to retain PricewaterhouseCoopers LLP to serve as independent auditors for the year

ending December 31, 2016. Although the Audit Committee has the sole authority to appoint the independent auditors, the Audit Committee will continue its long-standing practice of recommending that the Board ask stockholders to ratify the appointment of the independent auditors at the 2016 Annual Meeting (see Item 3 — “Ratification of Appointment of Independent Auditors”).

Of the Audit Committee’s nine meetings during 2015, five were regular in-person meetings that included separate private (or “executive”) sessions of the Committee with the Company’s independent auditors and with Company management, including the director of internal audit, the chief legal officer, the chief financial officer, the chief accounting officer, the corporate controller, the vice president of corporate compliance, the chief information officer, and other financial and legal management employees, and among the Committee members themselves. These executive sessions included candid discussion of specific financial management, legal, accounting, auditing, internal and disclosure controls, corporate compliance, and risk management matters. As part of its oversight of the Company’s risk management process, the Committee reviewed and discussed management’s risk assessment and risk management program, including individual areas of risk and the overall risk management process. See “Risk Oversight” earlier in this proxy statement. The Audit Committee also met with the chief legal officer and the vice president of corporate compliance to discuss the effectiveness of the Company’s compliance program and received regular corporate compliance program status reports and updates.

Four of the Audit Committee’s meetings were conference calls to review the Company’s planned public disclosures of quarterly financial results. These meetings included review with management and the independent auditors of the financial statements and management’s discussion and analysis of financial condition and results of operations disclosures in the Company’s annual Form 10-K and quarterly Form 10-Q filings prior to filing with the SEC and of matters relating to the Company’s internal control over financial reporting and disclosure controls and procedures for such filings.

Numerous other informal meetings and communications among the Chair, various Committee members, PricewaterhouseCoopers LLP, and the director of internal audit and other members of the Company’s management also occurred. The agenda for each of the Audit Committee’s meetings is established by the Audit Committee Chair and the director of internal audit.

Throughout the year, the Committee reviewed with the Company’s financial management, the independent auditors, and the director of internal audit the overall audit scope and plans, the results of internal and external audit examinations, evaluations by management and the independent auditors of the Company’s internal controls over financial reporting, and the quality of the Company’s financial reporting.

Management has reviewed and discussed the audited financial statements and related disclosures in the Company’s Annual Report on Form 10-K with the Audit Committee. This review and discussion included the quality of accounting principles, the reasonableness of the significant accounting judgments and estimates, the clarity of disclosures in and concerning the financial statements, and the internal controls and disclosure controls and procedures that support management’s accounting and disclosure judgments and the certifications of the Chief Executive Officer and the Chief Financial Officer that the financial statements of the Company containedfairly present, in all material respects, the financial condition, results of operations, and cash flows of the Company.

In its meetings with representatives of the independent auditors, the Audit Committee asked them to address, and discussed their responses to, questions relevant to the Audit Committee’s oversight. These discussions included significant accounting judgments or estimates made by management in preparing the financial statements, fair presentation to investors in the financial statements of the Company’s Annual Report to Stockholdersfinancial position and performance in accordance with generally accepted accounting principles and SEC disclosure requirements, and implementation of internal controls and internal audit procedures that are appropriate for the year ended December 31, 2013. Company.

The Audit Committee has also discussed with the Company’s independent auditorsPricewaterhouseCoopers LLP the matters required to be discussed by Auditing Standard No. 16,Communications with Audit Committees, issued by the Public Company Accounting Oversight Board.

The Audit Committee has received and reviewed the written disclosures and the letter from PricewaterhouseCoopers LLP required by applicable requirementsstandards of the Public Company Accounting Oversight Board (the “PCAOB”). The Committee has received from PricewaterhouseCoopers LLP the written disclosures and the letter required by applicable requirements of the PCAOB regarding PricewaterhouseCoopers LLP’sthe independent auditor’s communications with the Audit Committee concerning independence, and has discussed with them their independence from the Company and its management. In addition, the Committee has received written materials addressing PricewaterhouseCoopers LLP their independence. Theinternal quality control procedures.

In reliance on these reviews and discussions and the reports of the independent auditors, 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, and the Board has approved, that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 20132015 filed with the SEC.

Audit Committee

Renée J. Hornbaker (Chair)

Humberto P. Alfonso (Chair)

Gary E. Anderson

Brett D. BegemannStephen R. Demeritt

Robert M. Hernandez

Julie F. HolderRenée J. Hornbaker

Nominating and Corporate Governance Committee.    The members of the Nominating and Corporate Governance Committee are Messrs. LanceRaisbeck (Chair), Begemann, Connors, Demeritt,and Kling and Raisbeck.Ms. Holder. The Nominating and Corporate Governance Committee held sixfive meetings during 2013.2015. The purpose of the Nominating and Corporate Governance Committee is to:

The Board of Directors has determined that each member of the Nominating and Corporate Governance Committee is “independent” under applicable provisions of the New York Stock Exchange’s listing standards.

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:

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. Our Bylaws contain provisions that address the process (including the required information and deadlines) by which a stockholder or group of stockholders may nominate an individual for consideration by the Nominating and Corporate Governance Committee to stand for election at an annual meeting of stockholders. In addition, the proxy access provision in our Bylaws provides that, under certain circumstances, a stockholder, or a group of up to 20 stockholders, owning 3% or more of our outstanding common stock continuously for at least the previous three years may nominate and include director nominees constituting up to 20% of the number of directors then serving on the Board in the Company’s proxy materials, provided that such stockholder(s) and nominee(s) satisfy the disclosure and other requirements set forth in our Bylaws. In order to use this proxy access Bylaw provision, stockholders are required to hold shares until the date of the applicable annual meeting. The full text of the proxy access Bylaw can be found as an exhibit to the Current Report on Form 8-K filed by the Company with the SEC on February 19, 2016. For additional information on how stockholders may submit nominees for election to the Board,see “INFORMATION ABOUT THE MEETING AND VOTING — Nominations by Stockholders for Election to the Board of Directors.Directors and Stockholder Nomination Proxy Access.”

The Board and the Nominating and Corporate Governance Committee have from time to time utilized the services of director search firms to assist in the identification of qualified potential director nominees.nominees including its identification and nomination of independent non-employee director James J. O’Brien.

Compensation and Management Development Committee.The members of the Compensation and Management Development Committee (the “Compensation Committee”) are Messrs. ConnorsBegemann (Chair), Demeritt,Connors, Kling, Lance, and Raisbeck.Raisbeck and Ms. Holder. The Compensation Committee held sevensix meetings during 2013.2015. 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 responsibilities included in its charter, the Compensation Committee oversees the Company’s compensation and benefits philosophy and strategy, including risk assessment of compensation programs and practices, determines the compensation of the Company’s executive officers, reviews management’s executive compensation disclosures, reviews and approves the adoption of cash and equity-based incentive management compensation plans, and oversees the directionmanagement’s administration of the Company’s benefits plans. The Compensation Committee has exclusive authority to administer and grant stock-based incentive awards under the 2012 Omnibus Stock Compensation Plan, and has delegated to the Board may delegateChairman and Chief Executive Officer authority to make certain limited stock-based compensation awards to employees other than executive officers to a special committee consisting of one or more directors who are also officers of the Company.officers. The Compensation Committee receives input from Company management on compensation and benefits matters, and includesconsiders such input in the factors it considers in establishing and overseeing management’s compensation programs and in determining executive compensation. For additional description of the Committee’s processes and procedures for consideration and determination of executive compensation, including the role of management in recommending compensation, see the “Compensation Discussion and Analysis” later in this proxy statement.

The Board of Directors has determined that each member of the Compensation Committee is “independent” under applicable provisions of the New York Stock Exchange’s listing standards.

Compensation Committee Consultant.The Compensation Committee has directly engaged Aon Hewitt as its external compensation consultant. Under the terms of Aon Hewitt’s engagement by the Compensation Committee, Aon Hewitt reports to, and receives its direction from, the Compensation Committee,

and a representative of Aon Hewitt attends each meeting of the Compensation Committee as its advisor. Aon Hewitt provides the Compensation Committee with third-party survey information used in setting short- and long-term compensation levels, perspective on emerging compensation issues and trends, and expertise in incentive compensation structure, terms, and design.See “Compensation Discussion and Analysis.” Aon Hewitt also provides such services to the Nominating and Corporate Governance Committee for its recommendations to the Board regarding non-employee director compensation.See “Director Compensation.” Any other services provided by Aon Hewitt and its affiliates to Eastman are approved by the Compensation Committee. Aon Hewitt

and affiliates provided services to the Compensation Committee and the Nominating and Corporate Governance Committee for total fees in 2015 of $242,087 and provided international pension consulting, retirement benefits consulting, human resources consulting, and insurance brokerage services to the Company for total fees in 20132015 of $214,861. Aon Hewitt received total compensation in 2013 for all services provided to Eastman of $472,875.$314,134. Company management also uses the services of several other outside firms for compensation analysis, third-party surveys, and management pay research and analysis.Noneanalysis. None of these other firms provide any consulting services to the Compensation Committee or to the Nominating and Corporate Governance Committee.

In reviewing Aon Hewitt’s performance in 20132015 and considering its continued engagement for 2014,2016, the Compensation Committee evaluated Aon Hewitt’s independence from Company management and any conflicts of interest.interest in accordance with applicable New York Stock Exchange listing requirements. The Compensation Committee considered Aon Hewitt’s provision of other services to the Company, the fees paid by the Company to Aon Hewitt as a percentage of the firm’s total revenue, Aon Hewitt’s policies and procedures to prevent conflicts of interest, and thatthe confirmation by Aon Hewitt that it and its representatives have no business or personal relationship with any member of the Compensation Committee, do not own any stock of the Company, and have no business or personal relationship with any executive officer of the Company. The Compensation Committee concluded that Aon Hewitt is independent of the Committee and of Company management and has no conflicts of interest in its performance of services to the Committee.

Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the “Compensation Discussion and Analysis” which appears later in this proxy statement. Based on thethis review and discussions,discussion, 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, 20132015 filed with the SEC and in this proxy statement.

Compensation and Management Development Committee

Brett D. Begemann (Chair)

Michael P. Connors (Chair)

Stephen R. DemerittJulie F. Holder

Lewis M. Kling

Howard L. Lance

David W. Raisbeck

Finance Committee.    All of the directors except Messrs.Mr. Costa and Rogers are members, and Mr. Kling is the Chair, of the Finance Committee. The Finance Committee held four meetings during 2013.2015. 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, cost of capital, significant corporate transactions (including acquisitions, divestitures, and joint ventures), capital expenditures, financial status of the Company’s defined benefit pension plans, payment of dividends, issuance and repurchase of stock, and use of financial instruments, commodity purchasing, insurance, and other hedging arrangements and strategies to manage exposure to financial and market risks.

Health, Safety, Environmental and Security Committee.    All of the directors except Messrs.Mr. Costa and Rogers are members, and Mr. Hernandez is the Chair, of the Health, Safety, Environmental and Security Committee. The Health, Safety, Environmental and Security Committee held two meetings during 2013.2015. 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, sustainability, and sustainabilitypolitical activities matters.

Director Compensation

Director compensation is determined by the Board of Directors based upon the recommendation of the Nominating and Corporate Governance Committee and the Committee’s compensation consultant. The Board uses a combination of cash and stock-based incentive compensation to attract and retain qualified candidates to serve as directors. In setting the compensation of non-employee directors, the Nominating and Corporate Governance Committee and the Board consider the significant amount of time that the Board and its Committees are expected to expend, the skills, knowledge, and understanding needed for service on the Board, and the types and amounts of director pay of other similar public companies. The Nominating and Corporate Governance Committee and the Board annually review non-employee director compensation, and the Board, upon the recommendation of the Nominating and Corporate Governance Committee, has from time to time changed the amounts and forms of director pay.pay (including the change in vesting of restricted stock awards described in note (2) below).

The following table sets forth certain information concerning compensation ofpaid to the Company’s non-employee directors for 2013.2015. James J. O’Brien became a director in February 2016, and received no compensation for service as a director for 2015. Directors who are also employees of the Company (Mr. Costa) receive no additional compensation for their service as directors. The footnotes to the table describe each of the components of director compensation.

Director Compensation for Year Ended December 31, 20132015

Cash retainers and event fees are paid in two semi-annual payments. Event fees were paid in 2013 to Mr. Hernandez ($1,500), Ms. Holder ($4,500), Ms. Hornbaker ($12,000), and Mr. Lance ($3,000).

Cash retainers and event fees are paid in two semi-annual payments. Event fees were paid in 2015 to Mr. Anderson ($1,500), Mr. Begemann ($1,500), Mr. Connors ($4,500), Mr. Demeritt ($3,000), Mr. Hernandez ($1,500), Ms. Holder ($4,500), Ms. Hornbaker ($12,000), Mr. Kling ($1,500) and Mr. Raisbeck ($1,500).

The restricted shares are not transferable (except by will or the laws of descent and distribution or as described below) 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 attaining retirement age or another approved reason during the three years after grant, or (iii) departure from the Board at the end of the term of service to which elected. During the restricted period, the director has all of the rights of a stockholder with respect to the restricted shares (other than the right to transfer the shares), including voting and dividend rights. The DSCS contains provisions regarding the treatment of restricted shares in the event of a “change in control” (as defined in the DSCS, generally 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 DSCS, in which case such result would not occur.

Mr. Alfonso held 3,300, Mr. Begemann held 3,276, Ms. Holder held 2,335, and the other non-employee directors each held 3,068, restricted shares at December 31, 2013.

Eastman does not have a director pension plan.

ITEM 2 — ADVISORY APPROVAL OF EXECUTIVE COMPENSATION

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) provides stockholders with the right to vote to approve, on an advisory (nonbinding) basis, the compensation of the Company’s named executive officers as disclosed pursuant to the compensation disclosure rules of the SEC. This advisory vote is commonly referred to as the “say-on-pay” vote. In the Company’s advisory say-on-pay vote at the 20132015 Annual Meeting, 96.01%over 95% of votes cast were “for” approval of the executive compensation as disclosed in the 20132015 Annual Meeting proxy statement. The Compensation Committee considered the outcome of this vote in its establishment and oversight of the compensation of the executive officers during 2013,2015, as further discussed in “EXECUTIVE COMPENSATION — Compensation Discussion and Analysis” later in this proxy statement.

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 committed to maintaining a strong financial position with sufficientappropriate financial flexibility and liquidity. 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, while maintaining 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. Please read the “EXECUTIVE COMPENSATION — Compensation Discussion and Analysis” section of this proxy statement for additional details about our executive compensation philosophy and programs, including information about the compensation of our named executive officers for 20132015 as detailed in the tables and narrative.

The say-on-pay vote gives stockholders the opportunity to indicate their views on the compensation of our named executive officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers disclosed and the philosophy, policies,objectives, and practices described in this proxy statement.Accordingly, stockholders are being asked to approve the compensation of the named executive officers as disclosed in the “EXECUTIVE COMPENSATION” section of this proxy statement, including the Compensation Discussion and Analysis, compensation tables, and narrative.

Because this vote is advisory, it will not be binding on the Compensation Committee, the Board, or the Company. However, the Compensation Committee and the Board value the opinions of the Company’s stockholders, and the Compensation Committee will consider the outcome of the vote in its establishment and oversight of the compensation of the executive officers. It is currently expected that stockholders will be given an opportunity to cast an advisory vote on this topic annually, with the next opportunity occurring at the 20152017 Annual Meeting.

The Board of Directors recommends that you vote “FOR” advisory approval of the compensation of the Company’s named executive officers as disclosed in this proxy statement.

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 following sections of this proxy statement. What follows is a summary of compensation philosophy and 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” or the “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. What follows is a summary of compensation philosophy and objectives for executive officers, the relationship of corporate performance to executive compensation, and the bases for the compensation of executive officers.

Overview

As described in more detail below, the Compensation Committee believes that the compensation of the executive officers is appropriate based on Eastman’s performance and the competitive market. For 2013,2015, the compensation of the executive officers named in the “Summary Compensation Table” below (the “named executive officers”) consisted of three principal elements: base salary, annual incentive pay opportunities, and long-term stock-based incentive awards in the form of stock options, performance shares, and performance shares.restricted stock units. Base salary helps us to attract and retain executive talent and is the fixed element of our pay program. The Company uses annual incentive pay to tie executive compensation to attainment of key Company and individual objectives. Long-term stock-based pay is designed to align executive compensation with the long-term interests of the Company’s stockholders, focus on acheivmentachievement of strategic long-term financial objectives, and further 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 the interests of executive officers with those of other stockholders.

The Company’s executive compensation program currently includes the following features:

OurFor 2015, our executive officers were compensated based on the Company’s and its businesses’ solid financial performance and levels of corporate and individual attainment of short-term and longer-term strategic business objectives. For 2013, the executive officers:

In addition, in 2015 the Committee’s decision in 2012 to make future annual long-term stock-based incentive pay awards early in the year when it makes other annual compensation decisions, there were no option grants in 2012. As a result, the 2012 executive compensation is not entirely comparable to the 2011 and 2013 executive compensation in the tables and narrative in the remaining sections of this proxy statement.)Compensation Committee:

Management Compensation Philosophy, Objectives, and Program

Our Business.    Eastman is a global specialty chemicalschemical company that produces a broad range of advanced materials, chemicals, and fibers that are found in products people use every day. The Company sells differentiated products into diverse markets and geographic regions. Eastman’s objective is to be an outperforming specialty chemical company with consistent earnings growth. growth and strong cash flow. Eastman works with customers to meet their needs in existing and new markets through development of innovative products and technologies. Management believes that the Company can deliver consistent financial results by leveraging the Company’s world class technology platforms, improving product mix through innovation and increasing emphasis on specialty businesses and products, sustaining and expanding advantaged market positions, and leveraging advantaged cost positions. Consistently increasing earnings are expected to result from both organic (internal) growth initiatives and strategic inorganic (external growth through acquisitions and joint ventures) initiatives.

In 2013,2015, the Company’s products and operations were managed and reported in five operating segments: Additives & Functional Products (“AFP”), Adhesives & Plasticizers (“A&P”), Advanced Materials (“AM”), Fibers, and Specialty Fluids & Intermediates.Intermediates (“SFI”). As a result of changes in the Company’s organizational structure and management, beginning first quarter 2016 the Company’s products and operations are managed and reported in four operating segments: AFP, AM, Fibers, and Chemical Intermediates (“CI”). The new structure supports the Company’s strategy to transform towards a specialty portfolio by better aligning similar businesses

in a more streamlined structure. In addition to these segments, the Company manages certain costs and initiatives at the corporate level, including various research and development initiatives. Eastman had 20132015 revenues of $9.35$9.6 billion, compared to 2012 pro forma combined (giving effect to the July 2012 acquisition of Solutia Inc.)2014 revenues of $9.12$9.5 billion. Management believes that the Company can increase the revenues from its businesses while improving profitability through a balance of new applications for existing products, development of new products, sales growth in adjacent markets and emerging economies, and leveraging assets to improve cost position. These revenue and earnings increases are expected to result from both organic (internal growth) and inorganic (external growth through joint ventures and acquisitions) initiatives.

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 committed to maintaining a strong financial position with appropriate financial flexibility and liquidity. Our compensation philosophy supports this strategy by stressing the importance of pay for corporate and individual performance in meeting strategic and business goals for growth, value creation and financial strength, while maintaining 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 are expected to 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, as described in more detail below.

OurAs described below, our compensation program is designed so that a significant portion of compensation is stock-basedbased on the measures of performance that we believe are most relevant to tie executives’ interestsour corporate business strategy and significant to the interests of our stockholders. As shown below, ourinvestors, including cumulative total shareholder return (change inand return on capital for multi-year periods, annual adjusted earnings from operations, cash from operations, and free cash flow, and multi-year stock price plus dividends, assuming reinvestmentappreciation. Performance goals for each of dividends) for boththese measures of performance are designed to be challenging so that payouts at target levels will only occur if target performance is achieved (as evidenced by the three-year and five-year periods ended December 31, 2013 exceeded that of the chemical companies in the Standard & Poor’s (“S&P”below target 2013-2015 performance share payouts described below under “Long-Term Performance Shares”) 1500 Materials Sector and of the S&P 500 Stock Index. Also, in 2013 we increased our quarterly cash dividend for the fourth time in the last three years.

.

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

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

The Compensation Committee, with input from management and the Committee’s independent compensation consultant, designs, administers, and assesses the effectiveness of all executive compensation elements against the market and our overall compensation philosophy and objectives. The Committee’s assessment includes review of the value of each element of pay and of total pay on a recognized and a realizable basis. The table below describes each element of pay and its primary links to the objectives of our compensation philosophy.

Each year, the Compensation Committee, with the assistance of its independent compensation consultant, compares the relative mix of the compensation components with those of comparable companies. The Compensation Committee does not have a fixed method for determining how an executive officer’s total compensation should be allocated among these compensation components. Instead, the Compensation Committee uses a flexible approach to compensation setting to help us better achieve our business objectives from year to year and to attract and retain executive talent. 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. This means that at-risk compensation will be earned only if at least a threshold level of targeted business and individual performance is met. We believe it is also important to encourage a balance between the short-term and long-term focus of 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, including two nonqualified supplemental retirement plans for U.S. employees with pay above Internal Revenue Code limits, and in a deferred compensation plan for management-level employees. These benefits are intended to keep us competitive in attracting and retaining executive and other management-level employees by restoring benefits that will not be paid to them under our pension plan or 401(k) plan due to tax law limits.See “Pension Benefits” and “2015 Nonqualified Deferred Compensation” in the “Compensation Tables” section below. We have also entered into limited change in control severance agreements with certain of our executive officers and provide a modest program of executive perquisites and personal benefits which serve the specific purposes 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 2013.2015.

Risk Analysis of Executive Compensation.    The balance of short-term and long-term compensation as tools to drive individual behaviors and risk management is carefully considered in the design and administration of the Company’s overall employee compensation programs. The compensation program for executive employees is additionally structured so that a considerable amount of compensation 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 excessive risk-taking. 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 the elements of our executive compensation program to discourage management decisions that could pose inappropriate long-term risks to the Company and its stockholders, using the following methods:

	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 excessive risk. • Our stock ownership expectations are for the CEO to hold Eastman stock and stock-equivalents having a value of at least five times base annual pay and for the other executive officers to hold Eastman stock and stock-equivalents having a value of at least two-and-one-half times base annual pay. We also prohibit our executive officers from entering into arrangements designed to hedge their exposure to changes in the market price of Eastman stock or from pledging Eastman stock as security or collateral for loans or in margin brokerage accounts.See “Stock Ownership of Directors and Executive Officers — Executive and Director Stock Ownership Expectations; No Hedging or Pledging of Company Stock”. These policies ensure that each executive will have a significant amount of personal wealth tied to the long-term performance of Eastman stock and that their interests will remain aligned with those of our other stockholders.   Our stock ownership expectations are for the CEO to hold Eastman stock having a value of at least five times base annual pay and for the other executive officers to hold Eastman stock having a value of at least two-and-one-half times base annual pay. We also prohibit our executive officers from entering into arrangements designed to hedge their exposure to changes in the market price of Eastman stock or from pledging Eastman stock as security or collateral for loans or in margin brokerage accounts. See “Stock Ownership of Directors and Executive Officers — Executive and Director Stock Ownership Expectations; No Hedging or Pledging of Company Stock”. These policies ensure that each executive will have a significant amount of personal wealth tied to the long-term performance of Eastman stock and that their interests remain aligned with those of our stockholders. The largest percentageportion of total target executive pay is long-term, stock-based incentive compensation that vests over a period of years. The stock payout opportunity combined with a multi-year vesting period encourages our executives to focus on maximizing Eastman’s long-term performance. These awards are made annually, so executives will continue to have unvested awards that will provide value only if our business continues to be appropriately managed over the long term.   A significant portion of executives’ long-term incentive compensation consistsopportunities consist of performance share awards. 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. This approach focuses management on sustaining the Company’s long-term performance. These awards also have overlapping performance periods, thereby discouraging excessive risk-taking in the near-term because such behavior could significantly jeopardize the potential long-term payouts under other awards. To further ensure that there is not a significant incentive for excessive risk-taking, the payout of these awards washas been capped at 300% of target for the 2011-2013 performance period and at 250% of target for the 2012-2014, 2013-2015, 2014-2016 and 2014-20162015-2017 performance periods.   The variety of corporate and individual performance metrics setevaluated by the Compensation Committee to determine annualvarious forms of long-term and short-term incentive pay (for 2013,(including operating earnings and earnings per share, cash flow, return on capital, capital spending, employee safety, and total stockholder return relative to peer companies) is designed to minimize the risk that executives will focus excessive attention on a single area of performance or performance measure.   • Company policies and the plan under which our long-term stock-based incentive compensation awards are made require repayment of certain variable and incentive compensation amounts in the event of an accounting restatement due to material noncompliance by the Company with financial reporting requirements.See “Compensation Recoupment Policy” below. Company policy and the plan under which our long-term stock-based incentive compensation awards are made require repayment of certain variable and incentive compensation amounts in the event of an accounting restatement due to material noncompliance by the Company with financial reporting requirements. We believe that this combination of factors encourages our executives to manage our businesses and execute our strategy for growth in a prudent manner. In 2013,2015, Aon Hewitt, the Compensation Committee’s external compensation consultant, conducted a risk assessment of our compensation policies, programs, and practices, including executive compensation and broad-based compensation programs for all employees. Based on the results of Aon Hewitt’s assessment, the Compensation Committee has concluded that the Company’s compensation programs and practices are well aligned with the corporate strategy, contain appropriate risk balancing and mitigation features, and are not structured in a way that should incent risk taking that is reasonably likely to have a material adverse impacteffect on the Company. Review of 20132015 Executive Compensation The Compensation Committee reviewed overall compensation of the Chief Executive Officer and the other named executive officers and determined each component of executive compensation for 20132015 as described below. As part of this review, the Compensation Committee:   Reviewed the value of each type of compensation and benefit for each of the executive officers, including annual incentive pay opportunities and long-term stock-based compensation awards, perquisites and personal benefits, deferred accounts, and retirement plans and determined that the amounts, individually and in the aggregate, were appropriate and in line with external market and internal 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:   Company and 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 Eastman executive officers and 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 regarding pay for the other executive officers. For 2013,2015, the Compensation Committee compared total annual cash compensation opportunity (base pay and target incentive pay opportunity) levels and the value and mix of long-term stock-based incentive pay opportunity for the Company’s executive officers with those of the following companies, taking into account differences in the relative size and businesses of such other companies. These companies were selected with assistance from Aon Hewitt based upon similarity of their industry, number of employees, revenues, number and type of commercialized products, and market capitalization with Eastman:   Air Products and Chemicals, Inc. Ashland Inc. Ball Corporation Celanese Corporation Corning Inc. Danaher Corporation Dover Corporation The Dow Chemical Company Eaton Corporation Plc Ecolab Inc. E. I. DuPont de Nemours and Company FMC Corporation Ingersoll-Rand Plc Monsanto Company Parker-Hannifin Corporation PPG Industries Inc. Praxair Inc. Sealed Air Corporation Rockwell Automation, Inc. The Valspar Corporation   Evaluation of Stockholder Say-on-Pay Vote Results As described in “ITEM 2 — ADVISORY APPROVAL OF EXECUTIVE COMPENSATION” of this proxy statement, at the 2016 Annual Meeting stockholders will again have the opportunity to indicate their views on the compensation of our named executive officers by an advisory “say-on-pay” vote. At the Company’s 2015 Annual Meeting over 95% of the votes cast on the say-on-pay proposal were voted in favor of the proposal. The Compensation Committee considered this vote result as general approval of the Company’s approach to executive compensation. Therefore, it did not make any significant changes in the structure of our executive compensation program as a result of this vote. Instead, the Committee focused on refining select elements of the program, as summarized above under “Overview”. The Compensation Committee will continue to consider the vote results of say-on-pay proposals, and other appropriate executive compensation and corporate governance developments, in future years when making compensation decisions for our named executive officers. Elements of our Executive Compensation Annual Cash Compensation — Base Pay and Incentive Pay How Base Pay and Annual Incentive 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, business and functional organization, and individual performance are achieved. The targeted levels of cash compensation are based upon information provided by Aon Hewitt and from publicly available information. For 2015, a significant portion of each executive officer’s total pay was variable, as shown in the charts under “Mix of Total Compensation”. Depending upon Company, business and functional unit, and individual performance, executive officers could receive more or less than their target amount. As requested by the Compensation Committee, Aon Hewitt provided benchmarking analysis of the total cash compensation for executives with similar positions at the comparator companies listed above. Aon Hewitt 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 considered this benchmarking data and 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 of the comparator companies. For 2015, the Compensation Committee set the targeted cash pay for executives within a range of 10% above or below the median level of the total targeted cash compensation for comparable positions of the comparator companies, with exceptions in the event of changes in individual scope of responsibilities, corporate performance, and time and experience in position. Base Pay.    In late 2014 and early 2015, after reviewing market competitive pay levels and the targeted total cash compensation of the executive officers, the Compensation Committee determined that base pay increases were appropriate for certain of the executive officers because their targeted total cash compensation was below that of the mid-range of the comparator companies. In addition to external comparisons, the Committee considered the cash compensation levels of each executive officer relative to that of each other executive officer. Even with these increases in base salary, our executive officers’ total annual compensation for 2015 consisted primarily of variable compensation. Increases in the base pay amounts reported in the “Salary” column of the Summary Compensation Table reflect the increased target total cash compensation levels for 2015. Annual Incentive Pay — Unit Performance Plan.    For 2015, the variable portion of cash compensation paid to approximately 900 management level employees, including the executive officers, was determined under the Unit Performance Plan (the “UPP”). Under the UPP, the Compensation Committee sets a cash payout pool target amount at the beginning of each year, with the total available payout ranging from 0 to 200 percent of target amount depending on the Company’s financial performance. The Committee reserves discretion to adjust the total payout pool amount to reflect overall corporate performance and business and financial conditions and other corporate objectives. The total UPP award pool is determined after the end of the performance year 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. 2015 UPP named executive officer target opportunities.    Consistent with our compensation objectives, as employees assume greater responsibilities more of their pay is linked to Company performance. Variable UPP cash pay targets (expressed as a percentage of base salary) are established at the beginning of the performance year based on job responsibilities, relative targets for other Company positions, and comparator company practices. For the named executive officers, the target annual UPP incentive opportunities for 2015 were as follows: Stockholder Say-on-Pay VoteName As described in “ITEM 2 — ADVISORY APPROVAL OF EXECUTIVE COMPENSATION” of this proxy statement, at the 2014 Annual Meeting stockholders again have the opportunity to indicate their views on the compensation of our named executive officers by an advisory “say-on-pay” vote. At the Company’s 2013 Annual Meeting, over 96% of the votes cast on the say-on-pay proposal were voted in favor of the proposal. The Compensation Committee believes this vote reflects general approval of the Company’s approach to executive compensation, and, therefore, it did not make any significant changes in the structure of our executive compensation programTitle Target UPP Opportunity as a result% of this vote. The Compensation Committee will continue to consider the vote results for say-on-pay proposals in future years when making compensation decisions for our named executive officers. Elements of our Executive Compensation Annual Cash Compensation — Base Pay and Incentive PaySalary Mark J. Costa How Base Pay and Annual Incentive 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, business and functional organization, and individual performance are achieved. The targeted levels of cash compensation are based upon information provided by Aon Hewitt and publicly available information. For 2013, a significant portion of each executive officer’s total pay was variable, as shown in the charts under “Mix of Total Compensation”. Depending upon Company, business and functional unit, and individual performance, executive officers could receive more or less than their target amount. As requested by the Compensation Committee, Aon Hewitt provided benchmarking analysis of the comparable companies’ listed under “Review of 2013 Executive Compensation” 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 of the comparator companies. For 2013, the Compensation Committee set the targeted cash pay for executives within a range of 10% above or below the median level of the total targeted cash compensation for comparable positions of the peer companies, with exceptions in the event of changes in individual scope of responsibilities, corporate performance, and time and experience in position. Base Pay.    In late 2012, after reviewing market competitive pay levels and the targeted total cash compensation of the executive officers, the Compensation Committee determined that base pay increases were appropriate for the executive officers because their targeted total cash compensation was below that of the mid-range of the comparator companies. In addition to external comparisons, the Committee considered the cash compensation levels of each executive officer relative to that of each other executive officer. Increases in the base pay amounts reported in the “Salary” column of the Summary Compensation Table reflect the increased target total cash compensation levels for 2013. In late 2013, the Compensation Committee also determined the 2014 base pay for individuals holding the executive positions of Executive Chairman (James P. Rogers), Chief Executive Officer (Mark J. Costa), 130% Curtis E. Espeland Executive Vice President and Chief Financial Officer   90% Ronald C. Lindsay Chief Operating Officer (Ronald C. Lindsay) as of January 1, 2014, as well as for other new executive officers 100% Brad A. Lich Executive Vice President   85% David A. Golden Senior Vice President and executive officer positions. The factors considered in these decisions were generally the same as those considered in setting 2013 base pay levels described above.Chief Legal Officer   70% 2015 UPP Company performance measure and targets.    The 2015 UPP payout pool was determined based on Company earnings from operations (or “EFO”), as adjusted by the Compensation Committee for certain cost, charge, and income items that were not included in the Company’s targeted financial performance under the annual business plan and that were excluded from operating earnings in the non-GAAP financial measures disclosed by the Company in its public disclosures of financial results. The selection of adjusted EFO as the measure of 2015 corporate performance was intended to focus management level employees on both top-line revenue and bottom-line earnings and to allow measurement of UPP performance throughout the year based upon reported Company quarterly financial results. The Committee chose adjusted EFO to tie the performance measure and targets to the strategy and corresponding annual business plan targets on which UPP participant performance would be evaluated in 2015. (As described under “Overview”, following evaluation in 2015 of alignment of the design of the Company’s incentive pay program and compensation philosophy with recent changes to the Company’s business, products, and strategy for growth, 2016 UPP corporate performance and the corresponding payout pool will be measured 75% by adjusted EFO and 25% by free cash flow.) In establishing the 2015 UPP EFO performance target, the Committee considered the targeted 2015 financial and strategic performance under management’s annual business plan as approved by the Board in late 2014. The target levels of EFO and corresponding UPP payout pools were set for above-target payout if the Company exceeded target annual business plan performance and below-target payout if performance did not meet target business plan EFO. Target adjusted EFO for 2015 for executives and other senior managers corresponded to the Company’s operating earnings target under the annual business plan for 2015 as approved by the Board in late 2014. The 2015 UPP threshold, target, and maximum adjusted EFO amounts for UPP award pool funding were: Threshold (85% Performance) (50% Award Pool Funding) Target (100% Performance) (100% Award Pool Funding) Maximum (115% Performance) (200% Award Pool Funding) Annual Incentive Pay — Unit Performance Plan.    For 2013, the variable portion of cash compensation paid to 899 management level employees, including the executive officers, was determined under the Unit Performance Plan (the “UPP”). Under the UPP, the Compensation Committee sets a cash payout pool target amount at the beginning of each year, with the total available payout ranging from 0 to 200 percent of target amount depending on the Company’s financial performance. The Committee reserves discretion to adjust the total payout pool amount to reflect overall corporate performance and business and financial conditions. The total UPP award pool is determined as the aggregate of the UPP payouts for each participant if the individual’sAdjusted Earnings From Operations 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. 2013 UPP named executive officer target opportunities.    Consistent with our compensation objectives, as employees assume greater responsibilities more of their pay is linked to Company performance. Variable UPP cash pay targets (expressed as a percentage of base salary) are established at the beginning of the performance year based on job responsibilities, relative targets for other Company positions, and comparator company practices. For the named executive officers, the target annual UPP incentive opportunities for 2013 were as follows: $ 1.424 billion $ 1.675 billion $ 1.926 billion 2015 UPP Company performance and payout pool.    Adjusted operating earnings resulted in an above target payout pool for 2015 (compared to a UPP payout pool above target for 2013 and a payout pool below target for 2014). The graphs below show the threshold, target, and maximum payout performance targets for executives for each of 2013, 2014 and 2015, and the adjusted EFO performance for each year and the corresponding multiples of target UPP payouts.   Name Title Target UPP Opportunity as % of Base Salary James P. Rogers Chief Executive Officer 130 % Curtis E. Espeland Executive Vice President and Chief Financial Officer 80 % Mark J. Costa Executive Vice President (January – May) and President (May – December) 80 % Ronald C. Lindsay Executive Vice President 80 % David A. Golden Senior Vice President and Chief Legal Officer 60 % 2013 UPP Company performance measure and targets.    The 2013 UPP payout pool was determined based on Company earnings from operations (or “EFO”), as adjusted by the Compensation Committee for certain cost, charge, and income items that were not included in the Company’s targeted financial performance under the annual business plan and that were excluded from operating earnings in the non-GAAP financial measures disclosed by the Company in its public disclosures of financial results. The selection of adjusted EFO as the measure of 2013 corporate performance was intended to focus management level employees on both top-line revenue and bottom-line earnings and to allow measurement of UPP performance throughout the year based upon reported Company quarterly financial results. In establishing the 2013 UPP EFO performance target, the Committee considered the targeted 2013 financial and strategic performance under management’s annual business plan as approved by the Board in late 2012. The target levels of EFO and corresponding UPP payout pools were set for above-target payout if the Company exceeded target annual business plan performance and below-target payout if performance did not meet target business plan EFO. The target for 2013 adjusted EFO for executives and certain other senior managers ($1.575 billion) corresponded to the Company’s operating earnings target under the annual business plan for 2013 as approved by the Board in late 2012. The 2013 UPP threshold, target, and maximum adjusted EFO amounts for UPP award pool funding were:   Threshold (85% Performance) (50% Award Pool Funding) Target (100% Performance) (100% Award Pool Funding) Maximum (115% Performance) (200% Award Pool Funding) Earnings From Operations $ 1.339 billion $ 1.575 billion $ 1.811 billion 2013 UPP Company performance and payout pool.    Growth in operating results has resulted in target or above target annual UPP cash incentive payouts for each of the last three years, with 30 percent non-GAAP EFO growth from 2011 to 2012 and 21 percent non-GAAP EFO growth from 2012 to 2013. These results met or exceeded the UPP EFO targets for executives and certain other senior managers and resulted in an above-target cash incentive payout for 2011, a target payout for 2012, and an above-target payout for 2013. The graphs below show the threshold, target, and maximum payout performance targets for executives for each year and the non-GAAP EFO performance for each year and the corresponding multiples of target UPP payouts. Adjusted EFO for 2013 was $1.591 billion, resulting in a “performance factor” of 1.07 for executives and other senior managers and a total UPP award pool for all management level employees, including the named executive officers, of $41.91 million. The calculation of EFO under the UPP for 2013 was adjusted to exclude from GAAP operating earnings mark-to-market pension and other postretirement benefit net gain, Solutia acquisition-related costs and charges, and asset impairments and restructuring charges. These adjustments decreased the calculated earnings from operations under the UPP by $271 million and the UPP award pool by $35.7 million. 2013 UPP named executive officer payouts.    The Compensation Committee determines the portions of the overall UPP award pool to be allocated to the CEO and to the other executive officers as a group. 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. 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 the financial, organizational, and strategic performance objectives and expectations established at the beginning of the performance year. The Compensation Committee determined the CEO’s payout (equal to 122% of his target variable cash pay amount) based upon the Compensation Committee’s assessment of his individual performance as described below. The portion of the overall UPP award pool allocated to the other named executive officers was $2.192 million (equal to 117% of their aggregate individual target variable cash pay amounts), with their individual payout based upon the CEO’s assessment of each executive’s individual performance as described below. For 2013, the following corporate performance objectives were established for the CEO and the other named executive officers based upon targeted 2013 performance under management’s annual business plan as approved by the Board in late 2012, Adjusted EFO for 2015 was $1.717 billion, resulting in a “performance factor” of 1.17 for executives and other senior managers and a total UPP award pool for all management level employees, including the named executive officers, of $49.3 million. The calculation of EFO under the UPP for 2015 was adjusted to exclude from GAAP operating earnings mark-to-market pension and other postretirement benefit net loss, acquisition- related costs and charges, and asset impairments and restructuring charges. These adjustments increased the calculated earnings from operations under the UPP by $333 million and the UPP award pool by $49.3 million. 2015 UPP named executive officer payouts.    The Compensation Committee determines the portions of the overall UPP award pool to be allocated to the CEO and to the other executive officers as a group. 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 for payouts to other management-level employees. The allocation was based on their assessment of the performance of each organization relative to objectives established at the beginning of the performance year. 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 the financial, organizational, and strategic performance objectives and expectations established at the beginning of the performance year. The Compensation Committee determined the CEO’s payout (equal to 117% of his target variable cash pay amount) based upon the Compensation Committee’s assessment of his individual performance as described below. The portion of the overall UPP award pool allocated to the other named executive officers was $2.823 million (equal to 121% of their aggregate individual target variable cash pay amounts), with their individual payouts based upon the CEO’s assessment of each executive’s individual performance as described below. For 2015, the following corporate performance objectives were established for the CEO and the other named executive officers based upon targeted 2015 performance under management’s annual business plan as approved by the Board in late 2014, with no specific weighting among the objectives. Actual performance against these objectives was assessed by the Compensation Committee (for the CEO) and by the CEO and the Compensation Committee (for the other named executive officers) in determining the amounts of the individual payouts: Measure Target Actual Adjusted earnings from operations* $1.575 billion $1.591 billion Adjusted earnings per share* $6.25/share $6.44/share Free cash flow** ³$600 million $674 million Capital expenditures £$528 million $483 million Employee safety — days away from work (measured as days away from work per 200,000 hours worked) — achieve goal by 2015 with annual improvement £0.05 On track for 2015 goal OSHA recordable injuries (measured per 200,000 hours worked) — achieve goal by 2015 with annual improvement £0.35 On track for 2015 goal   * Non-GAAP financial measure, with adjustments as described above. ** Cash from operations less capital expenditures and dividends. 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 CEO) and by the CEO and the Compensation Committee (for the other named executive officers) in determining the amounts of the individual payouts: Measure Target Actual Adjusted earnings from operations* $1.675 billion $1.717 billion Adjusted earnings per share* $7.00/share $7.28/share Free cash flow** ³$850 million $960 million Employee safety — days away from work (measured as days away from work per 200,000 hours worked) — achieve goal by 2015 with annual improvement £0.05 0.17 OSHA recordable injuries (measured per 200,000 hours worked) — achieve goal by 2015 with annual improvement £0.35 0.64     * Non-GAAP financial measure, with adjustments as described above.    ** Cash from operations less capital expenditures. 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. Actual performance of the CEO (as assessed by the Compensation Committee) and of the other named executive officers (as assessed by the CEO and the Compensation Committee) was as follows: Officer Commitments Performance Mark J. Costa Overall Company financial and business performance Met Organic and inorganic growth and strategic initiatives (including acquisitions integration and synergies, new product and technology initiatives, productivity improvements, and organizational capabilities enhancement) Met Employee safety and wellness Met partially Curtis E. Espeland Earnings Met Free cash flow Met Officer Commitments Performance Integration of and synergies from acquisitions Met Finance organization efficiency and effectiveness of key processes Met Ronald C. Lindsay Adhesives & Plasticizers, Fibers, and Specialty Fluids & Intermediates business results (segment EFO, sales variable cost margin, and costs goals) Met overall Adhesives & Plasticizers, Fibers, and Specialty Fluids & Intermediates business organic and inorganic growth and strategic initiatives (including Fibers asset and business restructuring and reorganization and Special Fluids & Intermediates strategic business changes, acquisitions integration and synergies, and productivity improvements) Met Employee safety and wellness Met partially Brad A. Lich Additives & Functional Products and Advanced Materials business results (segment EFO and sales variable cost margin goals) Met Additives & Functional Products and Advanced Materials business organic and inorganic growth and strategic initiatives (including acquisitions integration and synergies, new technology and product development, and commercialization and productivity improvements) Exceeded Senior management and leadership development Met David A. Golden Legal, intellectual property, regulatory, health, safety, and environment, and corporate compliance support of organic and inorganic growth projects (including acquisitions integration and synergies, new product and technology initiatives, and cost reduction and productivity initiatives) Exceeded Manage commercial dispute resolution and litigation Exceeded Support key business contract customer negotiations Met The Compensation Committee determined that, based upon actual corporate performance against targets as listed above, each executive’s individual performance and leadership that contributed to this performance was satisfactory and met or exceeded expectations for purposes of determining his allocated individual portion of the respective award pools (117% of Mr. Costa’s individual target annual incentive pay amount and 121% of the other named executives’ aggregate individual target annual incentive pay amounts). Additionally, the Compensation Committee evaluated each executive’s performance against his 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 CEO and to the other named executive officers, respectively, as described above, and the assessments of the CEO’s 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 judgment of overall Company performance and performance of applicable business or functional units, each individual executive’s overall contribution and leadership, and external business conditions and circumstances, as follows:   Officer Named Executive Officer    Actual UPP Payout      Target UPP Payout      Actual UPP Payout as % of Target   Mark J. Costa      $1,673,100         $1,430,000         117 %  Curtis E. Espeland      774,000         661,500         117 %  Ronald C. Lindsay      904,000         772,500         117 %  Brad A. Lich      668,000         518,500         129 %  David A. Golden      477,000         371,000         129 %  The 2015 UPP payouts to the named executive officers are reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table below. Commitments Performance James P. Rogers Overall Company financial and business performance Execution of organic and inorganic growth and strategic initiatives Senior management and leadership development; personnel actions to optimize operational and financial results and diversity Exceeded Met Met Curtis E. Espeland EFO — $1.575 billion* EPS — $6.25* Free Cash Flow —>$600 million** Manage capital and cost structure Evaluate and recommend actions for acquisition and joint venture opportunities Evaluate, recommend, and execute strategic actions for Photovoltaics product line and Perennial Wood™ growth initiative Solutia acquisition integration (including cost and tax synergies targets) Improve finance organization efficiency and effectiveness of key processes Exceeded Exceeded Exceeded Met Met Met Exceeded Met Mark J. Costa Additives & Functional Products and Advanced Materials business results: •  EFO — $640 million* •  Segment sales variable cost margin goals Additives & Functional Products and Advanced Materials growth strategy and initiatives and new product portfolio development Solutia acquisition integration (including business and culture) Exceeded Exceeded Met Met Ronald C. Lindsay Adhesives & Plasticizers, Fibers, and Specialty Fluids & Intermediates business results: •  EFO — $1.045 billion* •  Segment sales variable cost margin goals Adhesives & Plasticizers, Fibers, and Specialty Fluids & Intermediates growth strategy and initiatives and new product portfolio development Manage capital expenditures — $500 - $550 million Did not meet Met Met Met Officer Commitments Performance David A. Golden Legal and health, safety and environment support of organic and inorganic growth projects Solutia acquisition integration (including intellectual property, legal, and health, safety and environment) Improve efficiency and effectiveness of key processes Legal, health, safety and environment, public affairs and policy, and trade and corporate compliance cost goals Met Met Met Exceeded   * Non-GAAP earnings from operations and earnings per share with adjustments as described above. ** Cash from operations less capital expenditures and dividends. The Compensation Committee determined that, based upon actual corporate performance against targets as listed above, each executive’s individual performance and leadership that contributed to this performance was satisfactory and met or exceeded expectations for purposes of determining his allocated individual portion of the respective award pools (122% of Mr. Rogers’s CEO individual target annual incentive pay amount and 117% of the other named executives’ aggregate individual target annual incentive 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 CEO and to the other named executive officers, respectively, as described above, and the assessments of the CEO’s 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 judgment of overall Company performance and performance of applicable business or functional units, each individual executive’s overall contribution and leadership, and external business conditions and circumstances, as follows: Named Executive Officer    Actual UPP Payout    Target UPP Payout    Actual UPP Payout as % of Target James P. Rogers        $1,900,000          $1,560,000          122 % Curtis E. Espeland        575,000          480,000          120 % Mark J. Costa        675,000          560,000          121 % Ronald C. Lindsay        600,000          560,000          107 % David A. Golden        342,000          285,000          120 % 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 further align those managers’ interests with the interests of other stockholders. Important elements of the current executive equity-based compensation program are:   Stock Options    Granted under the Company’s Omnibus Stock Compensation Plan (the “Omnibus Plan”), stock options create 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 multi-year 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), including performance units, restricted stock units, stock appreciation rights, and additional stock 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. See “Stock Ownership of Directors and Executive Officers — Executive and Director Stock Ownership Expectations.” All executive officers have met or are on schedule to meet their ownership expectations. Beginning in 2013, the Compensation Committee made annual long-term stock-based incentive pay awards early in the year when it made other annual compensation decisions rather than late in the year. The Committee adopted this change in order to make all compensation decisions at the same time based on the same performance and other pay-related information. As a result, the Compensation Committee granted options (includingmay also award additional options for the period between October 2012 and February 2013) to executives in February 2013 rather than in October 2012. Accordingly, the stock-based compensation award values(with or without restrictions), including performance units, restricted stock units, stock appreciation rights, and underlying share numbers reported in the “Summary Compensation Table” which follows this Compensation Discussion and Analysis do not include option grants for 2012, and the options granted by the Compensation Committee in February 2013 are included in such table in this proxy statement. How Stock-Based Incentive Pay Levels Are Determined.    The Compensation Committee establishes the value and mix of total stock-based incentive pay for a year by considering recommendations from Aon Hewitt based on long-term compensation survey data for the comparator companies listed under “Review of 2013 Executive Compensation”. As requested by the Compensation Committee, Aon Hewitt provides benchmarking analysis of this long-term stock-based compensation information, and also advises the Compensation Committee of general market stock-based incentive compensation practices and trends. The Compensation Committee also reviews the estimated value of each named executive officer’s outstanding unvested, unexercised, and unrealized stock-based awards in determining stock-based incentive pay levels. For 2013, stock options and performance shares were awarded in amounts intended to align total stock-based compensation with the mid-range of comparable stock-based compensation of the comparator companies. Stock Options.    In 2013, the Compensation Committee determined to provide approximately 40% of the value of each executive officer’s stock-based compensation in the form of stock options. The Compensation Committee grantsadditional stock options with anperformance-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 price equalof options. Over a five-year period, executive officers are expected to the market price of the underlyingaccumulate stock on the grant date, and on the date of its authorization of grants it setswith a grant date that is on or after the date of approval of the grant. In determining the size and terms of option awards, the Compensation Committee used the services of Aon Hewitt to derive values of options using a variation of the Black-Scholes option-pricing model. In addition, Aon Hewitt advises the Compensation Committee on the design of retention and performance incentive features of option grants. Computation of the value of option awards is comparabletwo and one-half times their annual base pay (five times base pay for the Chief Executive Officer) in Company stock or stock equivalents.See “Stock Ownership of Directors and Executive Officers — Executive and Director Stock Ownership Expectations.” All executive officers have met or are on schedule to values determined under FASB ASC Topic 718 and reported in the “2013 Grants of Plan Basedmeet their ownership expectations.

How Stock-Based Incentive Pay Levels Are Determined.    The Compensation Committee establishes the value and mix of total stock-based incentive pay for a year by considering recommendations from Aon Hewitt based on long-term compensation survey data for the comparator companies listed under “Review of 2015 Executive Compensation”.

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

The Compensation Committee also regularly reviews with Aon Hewitt the realizable value of each named executive officer’s outstanding unvested, unexercised, and unrealized stock-based awards compared to similar pay of executives of the comparator companies in determining stock-based incentive pay levels.

For 2015, stock options and performance shares were awarded in amounts intended to align total stock-based compensation with the mid-range of comparable stock-based compensation of the comparator companies.

Stock Options.    In 2015, the Compensation Committee determined to provide approximately 25% of the value of each executive officer’s stock-based compensation in the form of stock options. The Compensation Committee grants stock options with an exercise price equal to the market price of the underlying stock on the grant date, and on the date of its authorization of grants it sets a grant date that is on or after the date of approval of the grant. In determining the size and terms of option awards, the Compensation Committee used the services of Aon Hewitt to derive values of options using a variation of the Black-Scholes option-pricing model. In addition, Aon Hewitt advises the Compensation Committee on the design of retention and performance incentive features of option grants. Computation of the value of option awards is comparable to values determined under FASB ASC Topic 718 and reported in the “2015 Grants of Plan-Based Awards” table below.

Long-Term Performance Shares.    Other than the executives who received restricted stock unit awards, the other 75% of each executive officer’s 2015 stock-based compensation was in the form of performance shares. Shares of Company common stock are paid under performance shares based on the Company’s multi-year performance based on two measures:

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. Consistent with recent and planned changes to the Company’s business, products, and strategy for growth, the Committee designed the 2015-2017 performance shares with greater weight on relative total stockholder return and less relative reward for higher levels of return on capital to reflect the strategic emphasis on specialty businesses and products. Although the actual payout of the performance share awards in 2015 will not be determinable until after the end of the performance period in 2017, a grant date fair value of such awards is reported in the 2015 “Stock Awards” column of the Summary Compensation Table and the range of possible share payouts is reported in the “Estimated Future Payouts Under Equity Incentive Plan Awards” column of the “2015 Grants of Plan-Based Awards” table below.

In early 2016, the Compensation Committee reviewed performance results and approved a payout of shares to the executive officers under performance shares previously awarded for the 2013-2015 performance period. The payouts to the named executive officers under the 2013-2015 performance shares are reported in the “Stock Awards” column of the “2015 Option Exercises and Stock Vested” table below. The following tables show the targets and the payout matrix for the 2013-2015 performance shares:

Payouts under the 2011-2013 performance share awards for the named executive officers ranged from 4,400 shares to 202,400 shares, and represented 220% of each executive’s target award (of a possible 300% of the target award) based upon the Company’s total stockholder return ranking in the 2^nd quintile of the compared companies and an average return on capital of 5.57% in excess of the return on capital target.

		Differential from Target Return on Capital
Eastman TSR Relative to Comparison Companies		-7 to -5%				-4.99 to -3%				-2.99 to -1%				-.99 to 0%				.01 to 1%				1.01 to 3%				3.01 to 5%				5.01 to 7%				7.01 to 10%
0-19% (5th quintile)			0.0				0.0				0.0				0.0				0.2				0.3				0.4				0.5				0.6
20-39% (4th quintile)			0.0				0.0				0.4				0.5				0.6				0.7				0.8				0.9				1.0
40-49% (3rd quintile)			0.0				0.0				0.5				0.6				0.8				1.0				1.2				1.4				1.6
50-59% (3rd quintile)			0.0				0.4				0.6				0.8				1.0				1.25				1.5				1.75				2.0
60-79% (2nd quintile)			0.4				0.6				0.8				1.0				1.25				1.5				1.75				2.0				2.25
80-99% (1st quintile)			0.6				0.8				1.0				1.2				1.5				1.75				2.0				2.25				2.5

Payouts for the 2013-2015 performance period to the named executive officers ranged from 1,254 shares to 8,356 shares, and represented 50% of each executive’s target award (of a possible 250% of the target award) based upon the Company’s total stockholder return ranking in the 4^th quintile of the compared companies and an average return on capital of 12.43%. Measurement of return on capital under the performance shares was based on reported GAAP earnings, and did not exclude charges or other items excluded in the non-GAAP financial measures disclosed by the Company.

Restricted Stock Unit Awards.    From time to time, the Committee grants special cash or equity awards for recognition of sustained valuable performance or to retain key individuals who have critical skills of strategic importance.

The Compensation Committee awarded 18,000 restricted stock units to Curtis E. Espeland on January 1, 2015. This award, which will vest and be paid in unrestricted shares of Company common stock on January 1, 2018, is subject to Mr. Espeland’s continued employment and his satisfactory performance in leadership of the financial integration of mergers and acquisitions and of development and execution of business plans that result in improved financial performance, as determined by the Committee in its discretion. The award was designed to serve as a retention incentive and as recognition and incentive for Mr. Espeland’s continued financial management leadership and performance.

On February 18, 2015, the Committee awarded 14,600 restricted stock units to each of David A. Golden and one other executive officer as retention incentive and as recognition and incentive for their continued leadership. These awards will vest and be paid in unrestricted shares of Company common stock on February 18, 2018, subject to each executive’s continued employment.

The Compensation Committee set the values and terms of these awards to be consistent with recent similar special retention and performance incentive awards to executive officers.

Executive Perquisites and Personal Benefits

The Company provides only limited perquisites to our named executive officers, and those perquisites are designed to provide specific benefits. The Compensation Committee annually reviews the types and amount of perquisites provided to executives, and tax treatment of those perquisites for both the Company and executives. Perquisites provided to executives for 20132015 were:

In addition, in light of the significant time demands on our Chief Executive Officer, the Compensation Committee has determined that it is appropriate to allow the Chief Executive Officer to use corporate aircraft whenever possible for both business and personal travel (and for his family when they are traveling with him). This personal use is accounted for and periodically reviewed by the Compensation Committee.

In 2013,2015, the Compensation Committee also approved, beginning in 2016, long-term disability insurance to fill the current gap in coverage for the Company’s highest paid employees (including executives) under the Company’s all-employee long-term disability insurance coverage. This “gap” is caused by the fact that a giftlower percentage of highly-paid employees’ annual cash compensation is replaced in the event of their disability.

There are no tax gross-up payments made by the Company for any imputed income to Mr. Rogers from the Board valued at $2,500 in recognition of his service as Chief Executive Officer from May 2009 until January 1, 2014.executive officers on perquisites or personal benefits.

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, and 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 eliminate such a distraction and encourage our executive officers to remain employed with the Companyfocused on maximizing value when their prospects for continued employment following a transaction are often uncertain, we provide certain of our 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. Detailed information regarding these change-in-control severance 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 executive officer, and considers these severance protections an important part of executives’ compensation and consistent with practices of peer companies. Consistent with recommendations from Aon Hewitt and current market and peer company practices, the Compensation Committee has approved and the Company has entered into change in controlchange-in-control severance agreements with the named executive officers and certain other executive officers that provide for payments of no more than three-times base pay plus target annual bonus for the CEO and two-times base pay plus target annual bonus for other executive officers and which do not provide for any tax “gross up” payments to executives.

In connection with Mr. Costa’s new role as Chief Executive Officer and the Compensation Committee’s determination of his compensation in that position beginning January 1, 2014, the Committee and Mr. Costa cancelled Mr. Costa’s prior employment agreement, which had provided 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” in certain circumstances in addition to those covered by the executive change-in-control severance agreements.

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 for tax purposes to the extent possible while also maintaining the flexibility to compensate such officers in accordance with the Company’s compensation philosophy.

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 cash 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 tax deductible compensation. Compensation attributable to stock options and performance shares may qualify for deductibility under Section 162(m). Changes in tax laws (and interpretations of those laws), as well as other factors beyond the Company’s control, also affect the deductibility of executive compensation. In addition, the Committee may determine that corporate objectives justify the cost of being unable to deduct annual and long-term incentive compensation. For these and other reasons, the Company will not necessarily in all circumstances limit executive compensation to the amount which is permitted to be deductible as an expense of the Company under Section 162(m) of the Internal Revenue Code. The Committee will consider various alternatives to preserving the deductibility of compensation payments and benefits to the extent reasonably practicable and to the extent consistent with the Company’s other compensation objectives.

A portion of named executive officer compensation for 20132015 was non-deductible to the Company under Section 162(m). The anticipated amount of the Company’s taxes for non-deductible compensation in 20132015 is approximately $925,000.$1.03 million, and the additional tax cost of such non-deductible compensation has been determined by the Committee to be reasonable relative to total executive compensation cost and in context of overall compensation objectives. 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 RestatementsRecoupment Policy

The Sarbanes-Oxley Act, and Company policy, and pending provisions of the Dodd-Frank Act govern the process for reimbursement by executive officers of certain bonus or other incentive-based or equity-based

compensation (sometimes referred to as “clawback”) received following public disclosure of an accounting restatement due to material noncompliance by the Company with any financial reporting requirements. In addition, certain outstanding awards under our Omnibus Long-Term Compensation Plans require reimbursement of certain amounts from awards following an accounting restatement due to material noncompliance by the Company with any financial reporting requirement.

The Compensation Committee in February 2015 adopted an additional executive clawback policy which requires that, if the Company is required to prepare an accounting restatement due to material noncompliance with financial reporting requirements, then any current and former executive officers who willfully committed an act of fraud, dishonesty, or recklessness that contributed to the noncompliance would be required to repay the amount of incentive-based compensation paid or granted to that executive within three years before the accounting restatement that was in excess of the amount that would have been paid or granted to that executive if the restated financial statements had originally been prepared and disclosed. The clawback policy was adopted in advance of final rules or regulations (“Final Regulations”) expected to be adopted by the SEC and listing requirements expected to be adopted by the New York Stock Exchange that would implement the incentive-based compensation recovery requirements of the Dodd-Frank Act. We expect that the clawback policy will remain operative until it is amended to conform to any requirements that may be contained in the Final Regulations and, if necessary, the clawback policy will be interpreted and administered consistent with such Final Regulations.

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 20132015 and of the Company’s three other most highly compensated executive officers for the year ended December 31, 2013.2015.

Summary Compensation Table