EASTMAN CHEMICAL COMPANY

Brian L. Henry
Senior Counsel and Assistant Secretary
Phone: (423) 229-1295
FAX: (423) 229-4137
blhenry@eastman.com

December 22, 2003

VIA E-MAIL ("rule-comments@sec.gov")

Mr. Jonathan Katz
Secretary
U.S. Securities and Exchange Commission
450 Fifth Street N.W.
Washington, D.C. 20549

Dear Mr. Katz:

I write on behalf of Eastman Chemical Company to comment on the proposed rules to allow shareholder access to company proxy materials to nominate directors. Eastman Chemical is a Delaware corporation that is subject to the reporting requirements of the Securities Exchange Act of 1934 and has its common stock listed on the New York Stock Exchange. I and Theresa Lee, our Chief Legal Officer and Corporate Secretary, work closely with the Eastman Chemical Board of Directors, the Nominating and Corporate Governance Committee of the Board, and with other members of management in the areas of disclosure and corporate governance, including the matters covered by the proposed new rules concerning access to company proxy materials.

We commend and support the Commission's recent timely efforts to implement the Sarbanes-Oxley Act and its continuing efforts otherwise to clarify and enhance disclosure standards to strengthen investor confidence in public companies and U.S. capital markets. We believe that the Commission's recently adopted amendments to the proxy rules to require more robust disclosure of the nominating committee processes of public companies, as well as more specific disclosure of the processes by which security holders may communicate with directors of the companies in which they invest, are balanced disclosure-based changes that appropriately address the concerns raised in the Staff Report of the SEC's Division of Corporation Finance, "Review of the Proxy Process Regarding the Nomination and Election of Directors" (July 15, 2003). We do not, however, support the proposed rules concerning shareholder access to company proxy materials for their board nominees.

We oppose the proposal because:

• A contested election is not the best way to select qualified board members. An independent governance committee is best suited to select qualified directors with the unique mix of skills and experience needed to oversee each company.
   
• The institutional shareholders most likely to take advantage of the proposed election contest rules are the politically active institutions, such as labor unions and public pension funds, that have interests and agendas beyond the economic performance of the company. These shareholders may use election contests strategically to serve other goals. Moreover, there is a substantial risk that any director candidates nominated by such shareholders, even though not affiliated with the nominating shareholders, would be special-interest candidates. Directors should represent all shareholders.
   
• Directors are obligated to consider many factors in selecting nominees and their decisions must be made in the best interest of the corporations they serve. Existing directors will not be able to participate in the selection of directors nominated by shareholders through the proxy process and, unlike boards of directors and their nominating committees, shareholders have no duty to other shareholders in selecting their nominees.
   
• The recent governance and disclosure reforms initiated by the stock exchanges and the SEC will raise the bar of independence and accountability for public company boards of directors generally. The SEC should allow time for those reforms to work before imposing additional, unproven requirements on public companies.
   
• The proposed thresholds for triggering a shareholder nomination are too low. They could result in frequent contested elections. Even companies that are performing well could face annual election contests. Annual election contests would be distracting and costly and could dissuade qualified individuals from serving as corporate directors.
   
• Companies should have a reasonable amount of time to anticipate and prepare for actions and events that may ultimately qualify as a triggering event for shareholder access under the proposed rule. Therefore, shareholder action or voting results during the 2004 proxy season should not qualify as a trigger for shareholder access under the proposed rule. There will be tremendous shareholder and company confusion with disclosures in 2004 proxy statements that attempt to provide information about a shareholder access process that has not been finalized. Moreover, companies may need to add additional governance staff or retain counsel to assist with the proposals that may ultimately qualify as triggering events and related issues.

In addition, we share the concerns and endorse the opinions expressed in the comment letters submitted by the American Society of Corporate Secretaries and the Business Roundtable.

Thank you for the opportunity to provide our views on the proposed new proxy rules concerning shareholder nominated board candidates. If you have any questions about our comments or would like additional information, please contact me at the above direct-dial telephone number or e-mail address.