Kodak 2001 Annual Report Download

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What do you see when you look at Kodak?
KODAK 2001

Table of contents

  • Page 1
    What do you see when you look at Kodak? KODAK 2001

  • Page 2
    a familiar face

  • Page 3
    and a personality that might surprise you

  • Page 4

  • Page 5
    For more than 120 years, Kodak products and services have helped shape our world. From preserving memories, to revealing mysteries. From providing entertainment, to archiving documents. From saving lives, to capturing everyday events. But take a closer look. You'll see that Kodak is more than this. ...

  • Page 6
    ... our Kodak online photo services and acquired Ofoto so that we could meld the best ideas from two of the most successful online services. Similarly, we customized and cobranded online services with key retailers such as Kmart, CVS, Costco and Rite-Aid. We're not just developing smarter products, but...

  • Page 7
    smart

  • Page 8
    ...We also developed MEMS (micro-electromechanical systems) technology to produce smaller ink droplets for higher-quality color inkjet printing. New and improved products also became a reality in 2001 thanks to creative inspiration, including the easy-to-use Kodak EasyShare digital cameras with docking...

  • Page 9
    inspired

  • Page 10
    ... U.S. consumer film business and managed to grow film share slightly worldwide. We led the market in high-speed production document scanners and in dry laser imagers for health imaging, and continued to hold the leading position as a supplier to the motion picture industry. In the digital realm, we...

  • Page 11
    patient

  • Page 12
    ...century, our trusted products have helped people around the globe to record and share what is important in their lives. Our current consumer advertising theme-Share Moments. Share Life.â„¢-sums up the emotional appeal of our products and services. Capturing and sharing memories-from everyday moments...

  • Page 13
    resilient

  • Page 14
    united united

  • Page 15
    ...a larger community. This spirit of unity can be found on our Web site (www.kodak.com) in a "Tribute to American Spirit PhotoQuilt" constructed by a team from Kodak, working with America Online. The quilt offers people the opportunity to post photos that have special meaning to them- from pictures of...

  • Page 16
    ...9-11-01 he was killed in front of my eyes. I choose this photo because he and I cried together and we would ...best friend carried a man down to safety because the elevators weren't working and this man used a wheelchair. This is the type of guy my Dad was...They still haven't found him. At this time...

  • Page 17
    ... 15, 2001...just prior to a Marlboro County High School (Bennettsville, SC) football game...Like most Americans, I was trying to come to grips with the horrific events of earlier that week...But seeing the absolute respect for community, state, and nation that is so somberly displayed in the...

  • Page 18
    ... 23 24 27 29 49 49 50 51 Infoimaging Financial Highlights Letter to Shareholders Management's Discussion and Analysis Detailed Results of Operations Management's Responsibility Reports of Independent Accountants Consolidated Statement of Earnings Consolidated Statement of Financial Position 52 53...

  • Page 19
    ... is about images, enabled by technology, improving communication and commerce, creating significant new revenue and market opportunities for businesses around the world. Kodak is the leader in helping people take, share, enhance, preserve, print and enjoy pictures-for memories, for information, and...

  • Page 20
    ... sensor provides high-quality digital capture, while an LCD screen and image management software simplify the imaging process. Kodak's awardwinning pro back digital camera backs are designed for high-end portraiture and commercial photography. The Kodak picture maker digital station makes it...

  • Page 21
    ... our health business with x-ray films, but in recent years Kodak has become a leader in digital medical imaging. We provide products and systems for image capture, image processing, dry laser printing, image distribution, and image and information management. In 2001, digital sales accounted for...

  • Page 22
    ... a process called "digital film mastering"-the conversion of filmoriginated images for digital and film projection. This creative process will become the heart of digital cinema, for which Kodak is developing high-quality systems, services and software. Kodak inkjet papers give you prints that...

  • Page 23
    ... of digital photo services anywhere. Online, we offer uploading, printing and storing services through Ofoto, America Online and a number of our retailer partners. You can have your images uploaded or written to Kodak picture CDs when your film is processed. You can print your own pictures-film or...

  • Page 24
    2001 in review financials

  • Page 25
    ...(Dollar amounts and shares in millions, except per share data) Stock price per share at year end Sales Earnings from operations Net earnings Basic earnings per share Diluted earnings per share Cash dividends paid -per common share Average number of common shares outstanding Shareholders at year end...

  • Page 26
    ... our full-year market share in the U.S. consumer film business and increased it slightly worldwide. We drove Kodak digital imaging to record revenues, with consumer-friendly products and services-including online and retail photo printing and the highly successful Kodak EasyShare camera launch-that...

  • Page 27
    ...joint venture helping to drive even greater popularity for printing digital photo files. Our professional product offerings returned to basics with the move of graphics and wide-format inkjet to Commercial Imaging. Our professional products include both traditional and digital solutions and services...

  • Page 28
    ...image output. So is our worldwide population of 35,000 Kodak picture maker kiosks. We will also be introducing the Kodak I.Lab system, with exceptionally high-quality, digitally enhanced output on silver-halide paper. • Facilitate ease of use in digital imaging. Our EasyShare camera line's success...

  • Page 29
    ... contracts as would be necessary under the percentage of completion methodology. Furthermore, the Company records estimated reductions to revenue for customer incentive programs offered including cash discounts, price protection, promotional and advertising allowances and volume discounts. If market...

  • Page 30
    ... the exit of one of the Company's equipment manufacturing facilities. Charges totaling approximately $103 million ($68 million after tax) associated with the exits of the Eastman Software business ($51 million) and Entertainment Imaging's sticker print kiosk product line ($32 million) as well as the...

  • Page 31
    ... (60) Total of segments 1,215 Restructuring costs and credits and asset impairments Wolf charge Environmental reserve Kmart charge Consolidated total Net Earnings by Reportable Segment and All Other (in millions) Photography Health Imaging Commercial Imaging All Other Total of segments Restructuring...

  • Page 32
    ... of exchange. Net worldwide sales of consumer film products, which include traditional 35mm film, Advantix film and one-time-use cameras in both the traditional and APS formats, decreased 7% in 2001 relative to 2000, reflecting a 3% decline in volume and a 2% decline in both exchange and price/mix...

  • Page 33
    ...inkjet photo paper demonstrated double-digit growth year-over-year throughout 2001, reflecting the Company's increased promotional activity at key retail accounts, improved merchandising and broader channel distribution of the entire line of inkjet paper within the product group. Net worldwide sales...

  • Page 34
    ... of exchange. Sales in emerging markets increased slightly, up 4% from 2000 to 2001. Net sales of digital products, which include laser imagers (DryView imagers and wet laser printers), digital media (DryView and wet laser media), digital capture equipment (computed radiography capture equipment and...

  • Page 35
    ... a strong channel to the wide-format inkjet printer market, which Kodak had not previously served. Net worldwide sales of graphic arts products to Kodak Polychrome Graphics (KPG), an unconsolidated joint venture affiliate in which the Company has a 50% ownership interest, decreased 15% in 2001 as...

  • Page 36
    ... $238 million, or 4% as reported, or an increase of 2% excluding the negative impact of exchange. Net worldwide sales of the Company's consumer film products, which include traditional 35mm film, Advantix film and one-time-use cameras in both the traditional and APS formats, decreased 1% in 2000 as...

  • Page 37
    ... consumer imaging digital business, which includes the picture maker kiosks/media and consumer imaging digital products and services revenue from picture CD, "You've Got Pictures," Print@Kodak and PictureVision. Revenues from the placement of picture maker kiosks and the related media increased 17...

  • Page 38
    ... efforts to improve its position in this market. Net worldwide sales of graphic arts products to KPG decreased 23% in 2000 as compared with 1999. With decreases in sales of all product groups sold to KPG, including film, equipment, paper, digital media and chemicals, the largest contributor to this...

  • Page 39
    ... divestment of the Eastman Software business in 2000, the sale of the Company's Office Imaging business in 1999 and a decrease in the sale of semi-finished equipment and products to third parties, which was partially offset by an increase in optics revenues. Restructuring Costs and Other Earnings...

  • Page 40
    ... of sales and marketing (460), R&D (70) and administrative (500) functions in various locations of the Company's worldwide operations. In the second quarter of 2000, the Company reversed approximately $44 million of severance-related costs originally recorded as part of this program. The...

  • Page 41
    ... be less variation in payment terms; and it will be easier for the Company to expand into new marketing channels such as mail-order and Internet marketing. The Company made changes in areas such as marketing and pricing, purchasing, contracts, payroll, taxes, cash management and treasury operations...

  • Page 42
    ...used to bridge timing differences between expenditures and cash generated from operations. The Company has $2.45 billion in revolving credit facilities established in 2001, which are available to support the Company's commercial paper program and for general corporate purposes. The credit agreements...

  • Page 43
    ... of accounting. ESF provides a long-term financing solution to Qualex's photofinishing customers in connection with Qualex's leasing of photofinishing equipment to third parties, as opposed to Qualex extending long-term credit. As part of the operations of its photofinishing business, Qualex sells...

  • Page 44
    ... for consumer films, paper and digital cameras; and decreases in liabilities, excluding borrowings, of $755 million related primarily to severance payments for restructuring programs and reductions in accounts payable and accrued benefit costs. Net cash used in investing activities of $783...

  • Page 45
    ... of and the accounting for recognition and measurement of consideration given by a vendor to a customer, which includes sales incentive offers labeled as discounts, coupons, rebates and free product or services as well as arrangements labeled as slotting fees, cooperative advertising and buydowns...

  • Page 46
    ... with the non-imaging health businesses in five active Superfund sites. At December 31, 2001, estimated future remediation costs of $51 million are accrued on an undiscounted basis by the Company and are included in the environmental accruals reported in other long-term liabilities. The Company...

  • Page 47
    ...business. As Kodak continues to expand the planned information services, the Company must continue to balance the investment of the planned deployment with the need to upgrade the vendor software. Kodak's failure to successfully upgrade to the vendor-supported version could result in risks to system...

  • Page 48
    ... in the digital industry with a large number of competitors vying for customers and market share domestically and internationally. Kodak intends to continue new program introductions and competitive pricing to drive demands in the marketplace. The process of developing new products and services is...

  • Page 49
    ... time in the Company's filings with the Securities and Exchange Commission. Any forward-looking statements in this report should be evaluated in light of these important risk factors (see aforementioned Risk Factors). Market Price Data 2001 Price per share: 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. High...

  • Page 50
    ... and marketable securities as they mature and are renewed at current market rates. The extent of this risk is not predictable because of the variability of future interest rates and business financing requirements. Using a yield-to-maturity analysis, if December 31, 2001 interest rates increased 10...

  • Page 51
    ... the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. Rochester, New York January 23, 2002 Chief Financial Officer, and Executive Vice...

  • Page 52
    ...59 $ 1,407 304.9 1.7 306.6 $ 1.76 (in millions, except per share data) Net sales Cost of goods sold Gross profit Selling, general and administrative expenses Research and development costs Goodwill amortization Restructuring costs (credits) and other Earnings from operations Interest expense Other...

  • Page 53
    ... earnings Accumulated other comprehensive loss Treasury stock, at cost 100,363,059 shares in 2001 and 100,808,494 shares in 2000 Total Shareholders' Equity Total Liabilities and Shareholders' Equity The accompanying notes are an integral part of these consolidated financial statements. $ 448...

  • Page 54
    ... common share) Treasury stock repurchased (13,482,648 shares) Treasury stock issued under employee plans (1,105,220 shares) Tax reductions - employee plans Shareholders' Equity December 31, 1999 Net earnings Other comprehensive income (loss): Unrealized losses on available-for-sale securities ($77...

  • Page 55
    ...or less Proceeds from other borrowings Repayment of other borrowings Dividends to shareholders Exercise of employee stock options Stock repurchase programs Net cash used in financing activities Effect of exchange rate changes on cash Net increase (decrease) in cash and cash equivalents Cash and cash...

  • Page 56
    ... to Financial Statements Note 1: Significant Accounting Policies Company Operations Eastman Kodak Company (the Company or Kodak) is engaged primarily in developing, manufacturing, and marketing traditional and digital imaging products, services and solutions to consumers, the entertainment industry...

  • Page 57
    ... costs of warranties and reduces revenue for estimated returns. For product sales, the recognition criteria are generally met when title and risk of loss have transferred from the Company to the buyer, which may be upon shipment or upon delivery to the customer sites, based on contract terms...

  • Page 58
    ... sales and cost of goods sold, respectively, in accordance with Emerging Issues Task Force (EITF) Issue No. 00-10, "Accounting for Shipping and Handling Fees and Costs." Prior to January 1, 2001, costs incurred for shipping and handling and other distribution costs were reported in selling, general...

  • Page 59
    ... related inventory is sold to third parties, the hedge gains or losses as of the date of the intercompany sale are transferred from other comprehensive income to cost of goods sold. The fair value of silver forward contracts designated as hedges of forecasted worldwide silver purchases is reported...

  • Page 60
    ... of and the accounting for recognition and measurement of consideration given by a vendor to a customer, which includes sales incentive offers labeled as discounts, coupons, rebates and free products or services as well as arrangements labeled as slotting fees, cooperative advertising and buydowns...

  • Page 61
    ... investees and the Company's approximate ownership interest in each investee were as follows: Kodak Polychrome Graphics (KPG) NexPress Solutions LLC Phogenix Imaging LLC Matsushita-Ultra Technologies Battery Corporation Express Stop Financing (ESF) SK Display Corporation 50% 50% 50% 30% 50% 34% 59

  • Page 62
    ... short-term borrowings outstanding during 2001 and 2000 were 6.2% and 5.4%, respectively. The Company has $2.45 billion in revolving credit facilities established in 2001, which are available to support the Company's commercial paper program and for general corporate purposes. The credit agreements...

  • Page 63
    ... Act (RCRA) at the Kodak Park site in Rochester, NY. As part of this Program, the Company has completed the RCRA Facility Assessment (RFA), a broad-based environmental investigation of the site. The Company is currently in the process of completing, and in some cases has completed, RCRA Facility...

  • Page 64
    ... with the non-imaging health businesses in five active Superfund sites. At December 31, 2001, estimated future remediation costs of $51 million are accrued on an undiscounted basis by the Company and are included in the environmental accruals reported in other long-term liabilities. The Company...

  • Page 65
    ... of accounting. ESF provides a long-term financing solution to Qualex's photofinishing customers in connection with Qualex's leasing of photofinishing equipment to third parties, as opposed to Qualex extending long-term credit. As part of the operations of its photofinishing services, Qualex sells...

  • Page 66
    ... sales. Silver forward contracts are used to mitigate the Company's risk to fluctuating silver prices. The Company's exposure to changes in interest rates results from its investing and borrowing activities used to meet its liquidity needs. Long-term debt is generally used to finance long-term...

  • Page 67
    ...third parties. During 2001, a loss of $13 million was reclassified from other comprehensive income to cost of goods sold. Hedge ineffectiveness was insignificant. The Company does not apply hedge accounting to the foreign currency forward contracts used to offset currency-related changes in the fair...

  • Page 68
    ... (benefit) provision State and other income taxes Current provision Deferred (benefit) provision Total 2001 2000 1999 The significant components of deferred tax assets and liabilities were as follows: (in millions) Deferred tax assets Postemployment obligations Restructuring programs Employee...

  • Page 69
    ... million, respectively. Additionally, during 2001, the Company recorded asset impairments relating to the Wolf Camera bankruptcy, its photofinishing operations, relocation costs in connection with a closed manufacturing site and investments in strategic and nonstrategic ventures (See Note 6) of $77...

  • Page 70
    ... covered by a noncontributory plan, the Kodak Retirement Income Plan (KRIP), which is funded by Company contributions to an irrevocable trust fund. The funding policy for KRIP is to contribute amounts sufficient to meet minimum funding requirements as determined by employee benefit and tax laws plus...

  • Page 71
    ... 1 Service cost Interest cost Participant contributions Plan amendment Benefit payments Actuarial loss (gain) Settlements Curtailments Currency adjustments Projected benefit obligation at December 31 Change in Plan Assets Fair value of plan assets at January 1 Actual return on plan assets Employer...

  • Page 72
    ...curtailment gain in 1999 as a result of the sale of the Office Imaging operations. The weighted assumptions used to compute pension amounts for major plans were as follows: 2001 U.S. Discount rate Salary increase rate Long-term rate of return on plan assets 7.25% 4.30% Non-U.S. 5.90% 3.10% U.S. 7.50...

  • Page 73
    ... sale of the Office Imaging operations, and $4 million related to the establishment of the NexPress joint venture. The Company will no longer fund healthcare and dental benefits for employees who elected to participate in the Company's Cash Balance Plus plan, effective January 1, 2000. This change...

  • Page 74
    ... exchange program for its employees. The voluntary program offers employees a one-time opportunity to exchange stock options they currently hold for new options. The new options are expected to be granted on or about August 26, 2002. The new options will have a grant price equal to the fair market...

  • Page 75
    ..."Accounting for Stock Issued to Employees," in accounting for its stock option plans. Under APB No. 25, the Company does not recognize compensation expense upon the issuance of its stock options because the option terms are fixed and the exercise price equals the market price of the underlying stock...

  • Page 76
    ... accelerate Kodak's growth in the online photography market and help drive more rapid adoption of digital and online services. Ofoto offers digital processing of digital images and traditional film, top-quality prints, private online image storage, sharing, editing and creative tools, frames, cards...

  • Page 77
    ..., scanners, other business equipment, media sold to commercial and government customers, and from graphics film products sold to the Kodak Polychrome Graphics joint venture. The All Other group derives revenues from the sale of organic light emitting diode (OLED) displays, imaging sensor solutions...

  • Page 78
    ... $ 1,430 518 233 (11) 2,170 $ 1,709 483 257 (109) 2,340 Restructuring costs and credits and asset impairments Wolf charge Environmental reserve Kmart charge Consolidated total $ Net earnings: Photography Health Imaging Commercial Imaging All Other Total of segments (732) (77) (41) (20) 345 44...

  • Page 79
    ... located in: The United States Europe, Middle East and Africa Asia Pacific Canada and Latin America Consolidated total $ 3,738 672 977 272 $ 5,659 $ 3,913 647 1,056 303 $ 5,919 $ 3,904 715 1,024 304 $ 5,947 (1) Includes relocation charges (included in cost of goods sold) related to the sale...

  • Page 80
    ...-term debt, net of current portion Total shareholders' equity Supplemental Information Sales - Photography - Health Imaging - Commercial Imaging - All Other Research and development costs Depreciation Taxes (excludes payroll, sales and excise taxes) Wages, salaries and employee benefits Employees...

  • Page 81
    ... one-time-use cameras in 2001, pushing the total recycled well past the 500-million mark. Return rates for Kodak one-time-use cameras is about 70 percent worldwide, with nearly 80 percent return in the United States. These efforts helped earn a "Partner of the Year" award from the U.S. Environmental...

  • Page 82
    ... in which our company does business. Kodak actively supports and promotes efforts to strengthen education, economic development of minority communities, and equal employment opportunity. Among the organizations we proudly support are: NAACP, National Urban League, National Council of La Raza, the...

  • Page 83
    ..., commercial and government products and services; Vice President Carl E. Gustin, Jr.* Chief Marketing Officer; Senior Vice President Robert L. LaPerle James C. Stoffel* Jack C. Chang General Manager, kodak.com; Vice President Chief Technical Officer, Director, Research & Development; Senior...

  • Page 84
    ...: Transfer Agent & Registrar EquiServe Trust Company, N.A. P.O. Box 43016 Providence, RI 02940-3016 800/253-6057 On the World Wide Web at: www.equiserve.com For copies of the Annual Report, 10-K, Proxy Statement, or 10-Q, contact: Literature & Marketing Support Eastman Kodak Company 343 State Street...

  • Page 85

  • Page 86
    www.kodak.com Wait til you see what's next!

  • Page 87
    Eastman Kodak Company 343 State Street Rochester, NY 14650 Notice of 2002 Annual Meeting and Proxy Statement Date of Notice March 20, 2002

  • Page 88
    ... of record at the close of business on March 11, 2002, 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 14650-0211, (585) 724-5492. The...

  • Page 89
    ... ...Long-Term Incentive Plan ...Employment Contracts and Arrangements ...Change in Control Arrangements ...Retirement Plan ...17 17 19 19 20 21 22 23 Report of the Executive Compensation and Development Committee ...25 Report of the Audit Committee ...29 Performance Graph - Shareholder Return ...30...

  • Page 90
    ..., Daniel A. Carp and Joyce P. Haag will vote your shares FOR items 1 and 2 and AGAINST item 3. Q: Who can vote? A: You can vote at the Meeting if you were a shareholder of record as of the close of business on March 11, 2002 (the Record Date). Each share of common stock is entitled to one vote. 3

  • Page 91
    ... your proxy cards. To provide better shareholder service, we encourage you to have all your shares registered in the same name and address. You may do this by contacting our transfer agent, EquiServe Trust Company, N.A., at (800) 253-6057. Q: Who can attend the Annual Meeting? A: All shareholders of...

  • Page 92
    .... Q: When are the shareholder proposals due for the 2003 Annual Meeting? A: Shareholder proposals must be in writing, received by November 19, 2002, and addressed to: Joyce P. Haag, Secretary and Assistant General Counsel Eastman Kodak Company 343 State Street Rochester, New York 14650-0218...

  • Page 93
    ... 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...

  • Page 94
    ... of directors with overlapping three-year terms. There are five Class III directors whose terms expire at the 2002 Annual Meeting. Mr. Zimmerman, a Class III director, is retiring from the Board effective May 8, 2002, in accordance with the Company's retirement policy for directors. In addition, Dr...

  • Page 95
    ... affirms the intent of environmental responsibility stating: 'Eastman Kodak is recognized as a world-class company, and the leading imaging company, in protecting the quality of the environment and the health and safety of its employees, customers, and the community in which it operates...

  • Page 96
    ... Company's efforts to protect and restore the environment in its Health, Safety and Environment Annual Report, meet the information needs of shareholders. All material information is disclosed concerning the Company's environmental liabilities. The Board of Directors recommends a vote AGAINST this...

  • Page 97
    ... as Executive Vice President and Assistant Chief Operating Officer from November 1995 to January 1997. 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...

  • Page 98
    ... LEWIS MARTHA LAYNE COLLINS NOMINEES TO SERVE A ONE-YEAR TERM EXPIRING AT THE 2003 ANNUAL MEETING (Class I Directors) TIMOTHY M. DONAHUE Director since October 2001 Mr. Donahue, 52, is President and Chief Executive Officer of Nextel Communications, Inc. and a board member of NII Holdings, Inc. He...

  • Page 99
    ...MOS Wafer Processing, 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...

  • Page 100
    ... 7 meetings in 2001 • reviewed the Company's executive development process; • set the compensation for the executive officers and recommended the compensation of other key management; • granted and certified awards under the Company's compensation plans; • reviewed diversity representation...

  • Page 101
    ... 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, which was closed to new participants...

  • Page 102
    ...include shares held for the account of the above persons in the Eastman Kodak Shares Program and the Kodak Employees' Stock Ownership Plan, and the interests of the above persons in the Kodak Stock Fund of the Eastman Kodak Employees' Savings and Investment Plan, stated in terms of Kodak shares. 15

  • Page 103
    TRANSACTIONS WITH MANAGEMENT Under Mr. Brust's offer letter, the Company loaned Mr. Brust, Chief Financial Officer and Executive Vice President, the sum of $3,000,000 at an annual interest rate of 6.21%, the applicable federal rate for mid-term loans, compounded annually, in effect for January 2000....

  • Page 104
    ... table were the Company's Chief Executive Officer and the four other highest-paid executive officers during 2001. The figures shown include both amounts paid and amounts deferred. SUMMARY COMPENSATION TABLE Annual Compensation Long-Term Compensation Awards Name and Principal Position(a) Year...

  • Page 105
    ... annual management appraisal process. (f) No awards were paid for the periods 1999-2001, 1998-2000, and 1997-1999 under the Performance Stock Program. (g) For P. F. Russo the amount represents the company contribution made to her account under the cash balance feature of the Kodak Retirement Income...

  • Page 106
    ... as Chairman. (c) These awards were granted in November 2001 under the management stock option program. Beginning with this grant, stock options are granted in the fourth quarter of a year to coordinate with the timing of the Company's annual management appraisal process. P. F. Russo forfeited her...

  • Page 107
    ... of shares for the named executive officers for each cycle. No awards were earned for the 1999-2001 performance cycle as shown in the "LTIP Payouts" column of the Summary Compensation Table on page 17. LONG-TERM INCENTIVE PLAN - AWARDS IN LAST FISCAL YEAR Number of Shares, Units or Other Rights...

  • Page 108
    ... agreement also provides Mr. Coyne a target award under the Company's variable pay plan equal to 85% of Mr. Coyne's annual base salary. Patricia F. Russo - The Company employed Ms. Russo as President and Chief Operating officer under an offer letter dated April 2001. In addition to the information...

  • Page 109
    ... change in control, up to five additional years of age is given for the following plan purposes: • to determine eligibility for early and normal retirement; • to determine eligibility for a vested right; and • to calculate the amount of retirement benefit. The actual number of years of service...

  • Page 110
    ... 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 allowances in lieu of salary for...

  • Page 111
    ...years of service credited as of December 31, 2001, to each of the named executive officers. This table also shows the amount of each named executive officer's APC at the end of 2001, except for Mr. Brust and Ms. Russo, who participated in the cash balance feature in 2001. RETIREMENT PLAN Name Years...

  • Page 112
    ...the Company's executive compensation program, • overseeing the administration of the executive compensation plans, • monitoring and overseeing the career development of executives, • annually establishing performance commitments for the CEO, executive officers and key management, • reviewing...

  • Page 113
    ... that all plan awards are fully deductible for U.S. federal income tax purposes, the plan states that any discretion exercised by the Committee regarding the plan's performance goal after the first 90 days of the year cannot affect the payment of awards to the named executive officers. Given the...

  • Page 114
    ... coordinate the timing of the management stock option grant with the annual management appraisal process, awards will now be made in the fourth quarter, rather than the first quarter, of the year. As a result of this change, two grants under the program were made in 2001; one in January 2001 and the...

  • Page 115
    employees, excluding its five most senior executive officers, were given a one-time opportunity to exchange their current options for a proportionately fewer options at a new exercise price. The new exercise price will equal the mean between the high and low trading price at which the Company's ...

  • Page 116
    ..., Hector de J. Ruiz and Richard A. Zimmerman. Management has the primary responsibility for the Company's financial statements and the reporting process, including the system of internal controls. PricewaterhouseCoopers LLP, the independent accountants for the Company, are responsible for performing...

  • Page 117
    PERFORMANCE GRAPH - SHAREHOLDER RETURN The following graph compares the performance of the Company's common stock with the performance of the Standard & Poor's 500 Composite Stock Price Index and the Dow Jones Industrial Index, by measuring the changes in common stock prices from December 31, 1996, ...

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