Kodak 2000 Annual Report Download

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Table of contents

  • Page 1

  • Page 2
    Quick, what comes to your mind when you think of Kodak?

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    S u re. Kodak has helped the world create a lot of memories .

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    But there 's something else we've helped cre a te .

  • Page 11
    Hu n d reds of billions of dollars of value in today's net economy.

  • Page 12
    And there 's a name for how it was done: infoimaging.

  • Page 13
    Infoimaging. It's how a garme n t maker in Iceland s ells s weaters ...and how real estate agents in your neighborhood s ell homes . It's how your kids buy C Ds ...and how Detroit buys manufacturing c o mp o n e n ts . 12

  • Page 14
    ... while sitting in his den in Maryland. He ather Obert's home furnis hings s tudio ships worldwide to cus tome rs who se e he r c reations on the We b . Paul Martin selects parts supplie rs for his car customization business base d upon the high re solution pro d u c t photos the y e -mail to him.

  • Page 15
    Infoimaging. It's how Motorola turn s cell phones into web brows ers . It's how your doctor gets diagnos tic data in s econds ...and how you will p re s e rve your mos t important documents for centuries . 14

  • Page 16
    ... photo diarie s they s h a re on the We b. John Bern a rd 's radiologis t in S eattle got a se cond opinion within minute s from a te am of s pecialists at a teac hing hospital in Bos ton. Elizabe th Drye r p rovide s be tter s ervice to her auto ins urance polic yholders by c apturing picture...

  • Page 17
    Infoimaging is the convergence o f In fo rmation Technology and Imaging S cience. It's already a $225 billion indus try. And it's g rowing daily. 16

  • Page 18
    ... Do lo res Eason s h a red he r we dding picture s over the Inte rn e t with e ve ryone who couldn't atte nd the c ere mony held in Ta h iti. S amantha G race is writing a re s e a rc h study on Pac ific c oral ree fs with the help of s atellite image s that pinpoint e cos ystems that have suffe red...

  • Page 19
    ...canners Printers / X-ray laser output systems / Image-enabled information devices / Flat panel displays / Health imaging equipment / S ensors S ervices and Media Photo printing, storage and sharing / Document preservation / Motion picture digital imaging services and visual effects / Film and paper...

  • Page 20
    ..., the number of pictures on the Web grew by an astonishing 50 0% . To d a y, cons ume rs are converting nearly 30 million film image s a month into digital files . In one industry alone - th e medic al pro fe s s ion - mo re than $20 billion a year is s pent on imaging products and servic e s . C le...

  • Page 21
    ... ounc es ) PalmPix, you can c apture and store up to 1,000 c olor images, or download them to your pers onal computer s o you can save, manipulate , and e-mail s tandard JP EG or BMP files. O LED It s tands for O rganic Light-Emitting Diode. And this Kodak innovation may be the cooles t full-c olor...

  • Page 22
    ...music vide os and e -mail the m to your friends. Advantix P re vie w C ame ra We c ombined the be st-like d feature of digital c ame ras - ins tant previe ws of e ac h s hot - with the eas ies t-to-use film s ys tem ever deve loped. With the ne w Kodak Advantix Pre view C amera, you see the picture...

  • Page 23
    ...throughout. Working with C ine site (a Kodak s ubs idiary), the filmmakers gave the e ntire movie a hand-painted look in keeping with the story's e ra. The re sulting Kodak Digital Interme diate enables film prints as well as c ontent for digital cine ma, high definition te levision and other future...

  • Page 24
    ... the p a tie n t's medic al image s. And bec aus e diagnosticians still want h a rd copy prints , we offe r the market-leading Kodak DryView family of dry laser imagers , for s tand-alone us e or as components of comple te imaging systems . Kodak Earth Imaging P roduc ts Kodak is building the world...

  • Page 25
    ... workflow link syste m, images c an easily be transmitted and vie wed online - with elec tronic ally embe dde d ins tructions for eac h ord e r. For example, wedding portrait pro o fs - whic h photographers now commonly share only with the bride and groom and their families - can now be e-mailed to...

  • Page 26
    ... your picture s online as eas y as "c he cking the box" on the e nvelope when you drop off your film for proces s ing. S ince 1998, Kodak has sc anned, stored and delive re d millions of photos as downloaded files , prints , Kodak Pic ture C Ds and Kodak Picture Dis cs. Kodak PhotoNet online is...

  • Page 27
    ...Disc uss ion and Analysis Detaile d Res ults of Ope rations Ma n a g e me n t's Re spons ibility Re p o rt of Inde pendent Ac countants C onsolidate d S tatement of Earnings...u mma ry of Ope rating Data 2000 Kodak He alth, S afety, and Enviro n me n t 2000 G lobal Diversity C orporate Dire c to ry C orporate...

  • Page 28
    ... per share Diluted e arnings pe r s hare C as h dividends dec lare d -pe r common s hare Ave rage number of common s hare s outstanding S h a re holders at year e nd Total shareholde rs ' e quity Additions to pro p e rtie s De p re c ia tio n Wages, s alaries and employe e be nefits Employees at...

  • Page 29
    ... eve r, to invest in strong brands. Be cause when time s are tighte r, consumers are le ss inc line d to ris k the ir mone y on a ne w or unknown name . S ec ond, inves t in products and service s that offe r high satisfaction at a low price. In other words, value-for-the-money is king. Th ird, it...

  • Page 30
    ... with a dual mission: bette r pic tures and better sharing. For many consumers, be tter pictures be gin with better film - suc h as the ne w, improved Kodak Max 400 film, whic h delive rs significantly bette r res ults for up to 25% of picture s taken, whe n compared to 100 and 200 spee d films. In...

  • Page 31
    ...-toe nd Kodak Digital Intermediate of a major motion picture ("O B ro th e r, Where Art Thou? "), introducing an innovative digital p roc es s that e xte nds the c reativity of filmmakers and provides a high-quality bridge to digital display. Work is now in pro g re ss on a digital cine ma infrastru...

  • Page 32
    ... print kiosk product line ($32 million pre -tax) as we ll as the write o ff of the C ompany's C alcomp investment ($20 million pre -ta x), whic h was determined to be unre c o ve ra b le . P re -tax gains of approximate ly $120 million ($79 million after tax) re lated to the sale of The Image Bank...

  • Page 33
    ...and p ap e r e xpe rie nc e d s light s ale s de c line s while the C ompany's Kodak P rofe ssional segment expe rie nce d mo re signific ant de clines . Howe ver, a numbe r of the C ompany's bus iness es did achieve sales growth in 2000, inc luding Health Imaging, Entertainment Imaging, Digital and...

  • Page 34
    ... es and ne gative c urre ncy move me n ts . Th roughout 2000, the C ompany continued to succ es sfully s hift c ons ume rs to the diffe re ntia te d, highe r value MAX and Advantix product lines. By the fourth quarte r, c ombined U.S . sales of MAX and Advantix films gre w to more than 62% of total...

  • Page 35
    ... inc reas ed 67% in 2000. DryView me dia sale s inc reas ed 48% on higher volumes, while digital capture produc ts and PAC S inc re as ed 51% . The g rowth in the se digital product line s was partially mitigated by an expec ted de cline in wet lase r imaging sale s. S ale s of traditional medic al...

  • Page 36
    ... ss es , inc luding Health Imaging film (analog film as we ll as lase r imaging pro d u c ts of the ac quire d Imation medic al imaging business), c onsume r and p rofe ssional digital c ame ras, C onsume r Imaging c olor pape r and film (e s pe c ially Advantix film and one -time-us e c a me ras...

  • Page 37
    ... to the acquis ition of Imation's medical imaging busine ss. S ales of digital produc ts (inc luding digital print film, las er printers and digital me dia) also be nefited from the Imation ac quisition, inc reas ing 98% in 1999. S G&A expense s increase d 34% over 1998, due primarily to the...

  • Page 38
    ...During 2000, the C ompany comple ted an ongoing pro g ra m of re al e state dive stitures and portfolio rationalization that c ontribute d to other inc ome (charges ) re aching an annual average of $100 million over the pas t three ye ars. Now that this program is la rg e ly c omp le te , th e o th...

  • Page 39
    ... c ons umer films and pape r and cons umer digital camera sales; and decre ases in liabilitie s (e xc luding borrowings) of $755 million relate d primarily to se verance payments for re s tru c tu rin g p rograms and reduc tions in ac counts payable and ac crue d bene fit c osts . Ne t cash use d in...

  • Page 40
    ... ; and othe r factors disc los ed previously and from time to time in the C o mp a ny's filings with the S e curities and Exchange C ommis sion. Any forw a rd-looking s tate me nts in this re p o rt s hould b e e valuate d in light of these important ris k fac tors. Market P ric e Data 2000 Hig...

  • Page 41
    ...in silver price s in 2000. At De cember 31, 2000, the C ompany had ope n forw a rd contracts, with maturity date s ranging from January 2001 to De cembe r 2001, hedging virtually all of its planned silver re q u irements through the fourth quarte r of 2001. At Dec e mbe r 31, 2000, the fair value of...

  • Page 42
    ... manage ment pre se nt, to discuss acc ounting, auditing and financ ial re p o rting matters. To the Board of Dire c tors and S hareholde rs of Eastman Kodak C o mp a n y In our opinion, the ac c ompanying c onsolidate d financial state ments appearing on pages 42 through 63 of this Annual Report...

  • Page 43
    ... diluted e arnings pe r share Number of c ommon share s use d in bas ic earnings per share In c remental s hare s from assume d conve rs ion of options Number of c ommon share s use d in diluted earnings per s hare The accompanying notes are an inte gral part of thes e financial s tatements. 2000...

  • Page 44
    ...a re holders ' Equity C ommon stock, par value $2.50 pe r share 950,000,000 shares authorized; issued 391,292,760 shares in 2000 and 1999 Additional paid in c apital Retaine d earn in g s Ac cumulate d other c omprehensive loss Tre a s u ry stoc k, at c os t 100,808,494 shares in 2000 and 80,871,830...

  • Page 45
    ...) 63 15 3 ,4 2 8 $ $ *Th e re are 100 million shares of $10 par value pre fe rre d stock authorize d, none o f whic h have been iss ue d. Ac c umulated unre alize d holding gains , related to available for sale s ec urities , as of Dece mbe r 31, 2000, 1999 and 1998 we re $7 million, $113 million...

  • Page 46
    ... t earn in g s Adjustments to reconcile to net c ash provide d by ope rating activitie s: De p re c iation and amortiza tio n Gains on sales of ... r borro w in g s Dividends to s hare h o ld e rs Exe rc ise of e mployee stock options S toc k re p u rchase pro g ra ms Ne t cash (us ed in) provided by ...

  • Page 47
    ... d by the portion of the earnings of subsidiarie s applicable to minority inte re sts. The equity method of ac counting is us ed for inves tme nts in assoc iate d c ompanies over which Kodak doe s not have effe ctive c ontro l. Us e of Estimate s The pre paration of financial state me nts in c onfo...

  • Page 48
    ... c larifies the application of AP B No. 25 for c e rtain is s ues . The inte rp re ta tion wa s e ffec tive July 1 , 200 0, e xc ept for the provisions that relate to modifications that dire c tly or indire c tly reduce the exercise price of an award and the de finition of an employe e, whic h are...

  • Page 49
    ... tu ity D Da t ea s te s 2000 ofof 2000 Bo rro w in g s 2000 1999 Inventories value d on the LIFO me thod are approximately 47% and 48% of total inventories in 2000 and 1999, re s p e c tive ly. Note 4: Pro p e rtie s (in millions ) La n d Buildings and building equipment Ma c h in e ry and equipme...

  • Page 50
    ... Kodak P ark site in Rocheste r, NY ...imaging he alth bus ine sse s as a PRP in approximately four active S uperfund s ite s. O the r C ommitme nts and C ontinge nc ie s The C omp any has e n te red into agre eme nts with se veral companie s which pro vid e Kodak with products and se rvices to be use...

  • Page 51
    ... re d e te rmined by re fe rence to quote d marke t price s or by obtaining quotes from deale rs. The fair value s for the re maining financial in s truments in the above table are bas ed on de ale r quotes and re fle ct the e stimated amounts the Company would pay or re c e ive to te rminate the...

  • Page 52
    ...in millions ) Amount computed using the s tatutory rate In c reas e (re duc tion) in taxes resulting fro m: S tate and other income taxes G oodwill amortiza tio n Exp o rt sale s and manufacturing c re d its O perations outside the U.S . O th e r, net P rovision for inc ome taxes 2000 1999 1998 The...

  • Page 53
    ... red by a noncontributory plan, the Kodak Retire me nt Inc ome Plan (KRIP), whic h is funded by C ompany c ontributions to an irre voc able trust fund. The funding policy for KRIP is to c ontribute amounts sufficient to me et minimum funding re q u ire ments as dete rmined by employe e benefit and...

  • Page 54
    ...value of plan as sets at January 1 Actual re tu rn on plan ass ets Employer contributions P a rtic ipant contributions Be nefit payme nts S e ttle me n ts C u rre nc y adjus tments O th e r Fair value of plan...the Statement of Financ ial Position for major plans are as follows: 2000 U. S . No n -U. S ...

  • Page 55
    ...Office Imaging bus ines s, which was inc luded in the gain on the s ale . The we ig hte d a s s u mp tion s us e d to c omp ute p e ns io n amounts for major plans we re as follows : 2000... e xpe nse re c o rded in 2000, 1999 and 1998 related to this plan was $34 million, $21 million and $26 million, re...

  • Page 56
    ... Un a mo rtize d net loss Un a mo rtize d plan ame ndments Ne t amount rec ognize d and re c o rde d at end of ye ar 2000 1999 The we ighted-average ass umptions us ed to c ompute postre tire ment benefit amounts were as follows: 2000 Dis count rate S a la ry increase rate He a lth c a re c ost tre...

  • Page 57
    ... es ranging from $32.50 to $44.50. In Ap ril 1998, the C omp any mad e a grant of 100 s toc k options for common stock to mos t employe es of the C ompany at that date (8,468,100 shares unde r options). The options were grante d at fair market value on the date of grant and e xpire ten years from...

  • Page 58
    ...as if the C ompany had acc ounte d for employe e s toc k options unde r S FAS No. 123 's fair value method. The fair value of options was e stimate d at grant date using a Black-S c holes option pricing model with the following we ighted-average assumptions : 2000 Risk free inte res t rates Expe cte...

  • Page 59
    ... d charg e s . G oodwill related to this ac quis ition is being amortized ove r 7 years. 1 9 9 9 In connec tion with the sale of the C ompany's digital printe r, c o p ie r-d up lic a to r, and rolle r ass e mbly ope rations primarily as sociate d with the Offic e Imaging bus ine s s (S e e Note...

  • Page 60
    ... s of Imation's medical imaging busine ss, inc luding all of the outstanding shares of Imation's C e max-Ic on s u b s id ia ry, for approximately $530 million. At the date of ac quis ition, the bus ines s acquired by Kodak ge nerate d appro xima te ly $500 million in annual re venue s. The transac...

  • Page 61
    ... cts related to this ac quisition was c onc lude d in 2000. The image se tting pro je c ts we re disc ontinued while cash inflows from the remaining acquire d technology c omme nc ed in 2000. The se inflows are e xpe cte d to peak in 2001 and steadily de cline through 2007. Ac q u ired developed tec...

  • Page 62
    .... Note 17: S egment Informa tio n The C ons ume r Imaging se gme nt derives re venue s from photographic film, pape r, che micals, cameras , photoproc es sing equipme nt, digitization s e rvic e s, and photoproc e ss ing se rvic es s old to consumers. The Kodak Profe ss ional segment de rives re ve...

  • Page 63
    ... ate d to s egments C ons olidated total 2000 1999 1998 (in millions ) Operating net as sets: C ons umer Imaging Kodak P ro fe s s io n a l Health Imaging O ther Imaging Total of se gme nts LIFO inve ntory re s e rve C ash and marke table s e c u ritie s Dividends payable Ne t defe rred inc ome tax...

  • Page 64
    ... Asia Pac ific C anada and Latin America C ons olidated total 2000 1999 1998 Note 18: S ubse que nt Eve nts On Fe bru a ry 7, 2001, the C ompany complete d its acquisition of s ubs tantially all of the imaging busines ses of Be ll & Howell C o mp a n y. The purc has e price of this stock and...

  • Page 65
    ...upplemental Informa tio n S a le s - C ons umer Imaging - Kodak P ro fe s s io n a l - Health Imaging - O ther Imaging Re s e a rc h and de velopment cos ts De p re c ia tio n Taxe s (e xclude s payroll, sales and excis e taxes) Wages , salaries and e mployee benefits Employees at ye ar end - in the...

  • Page 66
    ... e n corridors and open s pac es ac ross the United S tates . Through World Wild life F u n d 's "Windows on the Wild" program, we help children to c o mp rehe nd the meaning and importance of biodive rsity. In 2000, we als o be gan an affiliation with the National P arks Foundation as one of five...

  • Page 67
    ...re aske d about their workplace , a full s eve nty-two pe rce nt agre ed that the ir s u p e rvisors demons trate res pe ct for the styles, personalities, and viewpoints of othe rs . More than half of all employe es agre e that Kodak is creating an inclusive environment that values diversity. O ffic...

  • Page 68
    ... ines s G eneral Manager, European, African and Middle Easte rn Region, C onsumer Imaging; Vice P re s id e n t Paul E. G ray P res ident Emeritus & P ro fe s s o r Mas sac huse tts Institute of Te c h n o lo g y1, 5, 6 Aa ron C . C ro s s Director, Global Equipment Manufacturing; Vice President...

  • Page 69
    ... co, CA. This 2000 Annual Report was produced using Kodak films, papers , graphic arts produc ts , and Kodak photo C D pro duc ts . This re p o rt is printe d on recyc led paper co ntaining at least 10% pos t-consumer waste. Kodak, Advantix, Advantix P review C ame ra, Digital S cie nc e, Durafle...

  • Page 70

  • Page 71
    Eastman Kodak Company 343 State Street Rochester, NY 14650 Notice of 2001 Annual Meeting and Proxy Statement Date of Notice March 22, 2001

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  • Page 73
    ..., 2001, you are entitled to vote at the Annual Meeting. If you have any questions about the Meeting, please contact: Coordinator, Shareholder Services Eastman Kodak Company 343 State Street Rochester, New York 14650-0205 (716) 724-5492 The E.M. Pearson Theatre is handicap accessible. If you require...

  • Page 74
    ..., St. Paul, MN 55104. You will be asked to vote on three proposals. We will also review Kodak's performance and answer your questions. You may vote by internet, telephone, written proxy, or written ballot at the Meeting. We encourage you to use the internet; it is the most cost-effective way to...

  • Page 75
    ... ...24 Employment Contracts and Arrangements ...25 Change in Control Arrangements ...26 Retirement Plan ...27 Report of the Executive Compensation and Development Committee ...29 Report of the Audit Committee ...32 Performance Graph - Shareholder Return ...33 Exhibit I - Amendment to 2000 Management...

  • Page 76
    ... of four Class II directors for a term of three years: William W. Bradley Alice F. Emerson Hector de J. Ruiz Laura D'Andrea Tyson 2. Ratification of election of PricewaterhouseCoopers LLP as independent accountants. 3. Amendment to 2000 Management Variable Compensation Plan. Q: What are the voting...

  • Page 77
    ... by your card represent all the shares of Kodak stock you own, including those in the Eastman Kodak Shares Program and the Employee Stock Purchase Plan, and those credited to your account in the Eastman Kodak Employees' Savings and Investment Plan and the Kodak Employees' Stock Ownership Plan. The...

  • Page 78
    ... will be counted as votes cast. On March 1, 2001, there were 290,089,490 shares outstanding. Q: How do I recommend someone to be a director? A: You may recommend any person to be a director by writing to Joyce P. Haag, Secretary and Assistant General Counsel, Eastman Kodak Company, 343 State Street...

  • Page 79
    ...plans of the Company and its subsidiaries • Diversity Report; Form EEO-1 • Health, Safety and Environment Annual Report on Kodak's website at http://www.kodak.com/go/HSE You may request copies by contacting: Coordinator, Shareholder Services Eastman Kodak Company 343 State Street Rochester, New...

  • Page 80
    ... your Kodak shares, please contact ADP and inform them of your request by calling them at (888) 603-5847 or writing them at Householding Department, 51 Mercedes Way, Edgewood, NY 11717. Be sure to include your name, the name of your brokerage firm and your account number. AUDIO WEBCAST OF ANNUAL...

  • Page 81
    ... shares represented by proxies will be voted for the substitute. If a director retires, resigns, dies or is unable to serve for any reason, the Board may reduce the number of directors or elect a new director to fill the vacancy. This new director will serve until the next Annual Meeting. The Board...

  • Page 82
    ... used: return on net assets, return on shareholders' equity, return on assets, return on capital, return on sales, shareholder return, total shareholder return, profit margin, earnings per share, net earnings, operating earnings, earnings before interest and taxes, common stock price per share, cash...

  • Page 83
    ... paid to the named executive officers, executive officers and all other employees cannot be determined because the amendment identifies a list of performance criteria and does not establish a specific criterion. The Board of Directors recommends a vote FOR the amendment to 2000 Management Variable...

  • Page 84
    ...Vice President of the Memory Products Division, Corporate Vice President and General Manager of Integrated Circuit Wafer Manufacturing, Corporate Vice President and Assistant General Manager, Microprocessor Products Group, Corporate Vice President and Director of Technology and Senior Vice President...

  • Page 85
    ... Chief Operating Officer since November 1995. Mr. Carp began his career with Kodak in 1970 and has held a number of increasingly responsible positions in market research, business planning, marketing management and line of business management. In 1986, Mr. Carp was named Assistant General Manager of...

  • Page 86
    ... in 1971. Appointed a Group Vice President later in 1971, he became President and Chief Operating Officer in 1976. He was named Chief Executive Officer in January 1984 and Chairman of the Board in March 1985. Mr. Zimmerman was graduated from Pennsylvania State University. He is a director of Stabler...

  • Page 87
    ... EXPIRING AT THE 2003 ANNUAL MEETING (Class I Directors) MARTHA LAYNE COLLINS Director since May 1988 Governor Collins, 64, is Executive Scholar in Residence at Georgetown College, a position she assumed in August 1998, after having been Director, International Business and Management Center, at the...

  • Page 88
    ... benefit pension plan. Public Policy Committee • reviewed philanthropic programs; • reviewed environmental initiatives; • reviewed employee survey results; • reviewed employee relations issues; and • reviewed diversity initiatives. 4 meetings in 2000 4 meetings in 2000 6 meetings in 2000...

  • Page 89
    ...phantom accounts will generally be paid in a single cash payment. Life Insurance The Company provides $100,000 of group term life insurance to each non-employee director. This decreases to $50,000 at retirement or age 65, whichever occurs later. Charitable Award Program This program is closed to new...

  • Page 90
    ... directors, nominees and executive officers directly or indirectly have or share voting or investment power are listed as beneficially owned. The figures above include shares held for the account of the above persons in the Eastman Kodak Shares Program and the Kodak Employees' Stock Ownership Plan...

  • Page 91
    .... In August 1999, the Company loaned Mr. Gustin, Chief Marketing Officer and Senior Vice President, $170,000 for the purchase of a home. The loan is unsecured and bears interest at 5.96% per year, the applicable federal rate for mid-term loans, compounded annually, in effect for August 1999. Under...

  • Page 92
    ... other highest-paid executive officers during 2000. The figures shown include both amounts paid and amounts deferred. SUMMARY COMPENSATION TABLE Annual Compensation Long-Term Compensation Awards Other Annual Compensation(c 30,334 - Payouts Name and Principal Position(a) G. M. C. Fisher Chairman...

  • Page 93
    ... loans which were fully forgiven in 1998 and $29,840 for life insurance premiums. For R. H. Brust for 2000, this amount represents the company matching contribution to his account under the Eastman Kodak Employees' Savings and Investment Plan because he is a participant in the Company's cash balance...

  • Page 94
    ...000 (b) 10,000 (b) 36,000 (b) 100,000 (d) M. P. Morley 23,000 (b) 50,000 (d) Percentage of Total Options/SARs Granted to Employees in Fiscal Year 1.17% 0.84 0.42 1.26 0.23 0.33 0.08 0.30 0.84 0.19 0.42 Name G. M. C. Fisher D. A. Carp R. H. Brust Exercise or Base Price Per Share $55.1875 55.1875 65...

  • Page 95
    ... Year-End Number of Shares Acquired Name on Exercise Value Realized Exercisable Unexercisable Exercisable Unexercisable Value of Unexercised In-the-Money Options/SARs at Fiscal Year-End* G. M. C. Fisher 0 $ 0 2,896,505 791,820 $ 0 $0 D. A. Carp 17,942 408,576 355,362 500,100 50,409...

  • Page 96
    ...in the form of restricted stock, which restrictions lapse at age 60. The table below shows the threshold (i.e., attainment of the performance goal), target and maximum number of shares for the named executive officers for each cycle. No awards were earned for the 1998-2000 performance cycle as shown...

  • Page 97
    ...'s health and dental plans. Following his retirement, Mr. Fisher retained both his stock option and restricted stock awards. Daniel A. Carp - Effective December 10, 1999, the Company entered into a letter agreement with Mr. Carp providing for his employment as President and Chief Executive Officer...

  • Page 98
    ...severance pay equal to three times his base salary plus target annual bonus award. In addition, each named executive officer would be eligible to participate in the Company's medical, dental, disability and life insurance plans until the first anniversary of the date of his termination of employment...

  • Page 99
    ... 39 periods of earnings over the 10-year period ending immediately prior to retirement or termination of employment. Participating compensation, in the case of the named executive officers in the Summary Compensation Table, is base salary and Management Variable Compensation Plan awards, including...

  • Page 100
    ... by any pension paid by his previous employer. (b) After Mr. Steenburgh has been employed for five years, he will be credited with 20 extra years of service for purposes of calculating his retirement benefit. Cash Balance Feature Under the cash balance feature of the Company's pension plan, the...

  • Page 101
    ... reviewing at least annually diversity representation at the senior and mid-management levels. Principles of Executive Compensation The Company's executive compensation program is designed to: • tie compensation to performance that is consistent with the Company's values and increases shareholder...

  • Page 102
    ... target. The Summary Compensation Table on page 20 lists for 2000 the awards for the named executive officers. Long-Term Incentives: Long-term compensation is delivered through stock options, the Performance Stock Program and restricted stock. The Company maintains a management stock option program...

  • Page 103
    ..., however, increase Mr. Carp's target award under the short-term bonus plan from 105% to 145% of base salary and under the management stock option program from 100,000 to 140,000 shares. To recognize Mr. Carp's promotion, the Committee granted him, effective January 12, 2001, a stock option award of...

  • Page 104
    ... statements for inclusion in the Company's Annual Report on Form 10-K for the year ended December 31, 2000, and the Board accepted the Committee's recommendation. The following fees were paid to PricewaterhouseCoopers LLP for services rendered in 2000: Audit Fees: $3.8 million All Other Fees...

  • Page 105
    ... dividends. $300 $250 $200 $150 $100 EK $50 $0 12/31/1995 12/31/1996 12/31/1997 12/31/1998 12/31/1999 12/31/2000 S&P DJIA The graph assumes that $100 was invested on December 31, 1995, in each of the Company's common stock, the Standard & Poor's 500 Composite Stock Price Index and the Dow Jones...

  • Page 106
    ..., return on sales, shareholder return, total shareholder return, profit margin, earnings per share, net earnings, operating earnings, earnings before interest and taxes, Common Stock price per share, cash flow, cost reduction, revenue, revenue growth, sales or market share. EXHIBIT II CHARTER...

  • Page 107
    ... relationships or services that may impact the objectivity or independence of the independent accountant. (f) Review the annual audit plan of the independent accountant and its scope. 2. Internal Auditors (a) Serve as the Board's primary avenue of communication with the Director of Corporate...

  • Page 108
    ... actions. (b) Review the Company's regulatory compliance programs for ethical business conduct. 6. Access and Communication (a) Meet separately and privately with the independent accountant and with the Director of Corporate Auditing and with the Company's chief financial and accounting officers to...

  • Page 109
    EASTMAN KODAK COMPANY 2001 ANNUAL MEETING E.M. Pearson Theatre at Concordia University 312 North Hamline Avenue St. Paul, Minnesota Shareholders may park in the following lots for attending the Meeting: • Lot E on Hamline Avenue • Lot C on Hamline Avenue • Lot D on Marshall Avenue Parking in ...

  • Page 110
    CC5-2 2001 This proxy was printed on recyclable paper. Cat No. 1897909