Kodak 2003 Annual Report Download - page 88

Proxy Statement
88
share, net earnings, operating earnings, common stock price per share
and sales or market share.
Maximum Amounts
The maximum number of shares of common stock that may be awarded
to any one participant in a single calendar year in the form of stock
awards, performance units or performance shares is 75,000.
The maximum award payable to any one participant under the
Performance Stock Program for a performance cycle is 75,000 shares of
common stock.
Summary of the Plan
A summary of the Plan appears below. This summary is qualified in its
entirety by reference to the text of the Plan. The Company will send, with-
out charge, a copy of the Plan to any shareholder who requests a copy.
Purpose
The purpose of the Plan is to motivate selected employees of the
Company and its subsidiaries to put forth maximum efforts toward the
continued growth, profitability and success of the Company and its sub-
sidiaries.
Term
The Plan became effective on January 1, 2000. Awards may not be grant-
ed under the Plan after January 18, 2005; except that the Committee may
grant awards after this date in recognition of performance for performance
cycles commencing prior to this date.
Administration
The Executive Compensation and Development Committee, or another
committee designated by the Board of Directors (the “Committee”), will
administer the Plan.
Eligibility for Participation
The following persons are eligible to participate in the Plan:
• all employees of the Company or any of its 50% or more owned sub-
sidiaries;
• certain foreign nationals who, but for the laws of their countries, would
be employees of one of the Company’s subsidiaries; and
• the Company’s directors.
The selection of those participants who receive awards is entirely within
the discretion of the Committee. Only the Company’s executives are eligi-
ble to participate in the Plan’s Performance Stock Program.
The Committee grants most of the Plan’s awards to the Company’s execu-
tives, those who are able to most significantly affect the growth, profitabil-
ity and success of the Company. There are currently approximately 800
employees in this category.
Types of Awards
The Plan authorizes the grant of:
• non-qualified and incentive stock options,
• stock appreciation rights (“SARs”),
• stock awards, performance shares (which are stock or stock-based
awards contingent upon attaining performance objectives during a per-
formance period),
• performance units (which are units valued by reference to criteria cho-
sen by the Committee),
• shares of the Company’s stock under the Plan’s Performance Stock
Program, and
• any other award established by the Committee which is consistent with
the Plan’s purpose.
Termination and Amendment of the Plan
The Committee may terminate or amend the Plan at any time for any rea-
son or no reason. Without shareholder approval, however, the Committee
may not adopt any amendment affecting “covered employees” that
requires the vote of the Company’s shareholders under Section 162(m) of
the Internal Revenue Code. The Company’s Chief Executive Officer and its
four other highest-compensated executive officers are “covered employ-
ees.”
Available Shares
Subject to adjustment described below, 22,000,000 shares of the
Company’s common stock may be granted under the Plan. As of
December 31, 2003, 7,621,562 shares of the Company’s common stock
remained available for grant under the Plan.
This number of shares available for grant under the Plan may be adjusted
for changes in the Company’s capital structure, such as a stock split.
Shares of common stock related to awards which terminate by expiration,
forfeiture, cancellation or otherwise without the issuance of shares, or are
settled in cash in lieu of common stock, will be available again for grant.
Award Limits
The maximum number of shares of common stock available for awards
granted in the form of stock awards, performance units or performance
shares (including those issued in the form of performance awards) is
3,500,000. If granted, 1,000,000 of these shares may be awarded only if
the Company achieves a specific performance goal. The performance goal
is total shareholder return by the Company equal to at least that earned
over the same period by a company at the 50th percentile in terms of
shareholder return within the Standard & Poor’s 500 Composite Stock
Price Index. Fifty percent of the target award will be earned if this per-
formance goal is achieved. One hundred percent of the target award will
be earned if total shareholder return for the period equals that of a com-
pany at the 60th percentile in terms of shareholder return within the
Standard & Poor’s 500 Composite Stock Price Index. The maximum num-
ber of shares of common stock that may be awarded to any one partici-
pant in a single calendar year in the form of stock awards, performance
units or performance shares is 75,000. The maximum number of shares
for which stock options may be granted to any one participant for a per-
formance period is 300,000. The maximum number of shares for which
SARs may be granted to any one participant for a performance period is
300,000. The maximum award payable to any one participant under the