Kodak 2004 Annual Report Download - page 119

Proposals
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2 0 0 5 ฀ N O T I C E ฀ O F ฀ A N N U A L ฀ M E E T I N G ฀ A N D ฀ P R O X Y ฀ S T A T E M E N T
Principal฀Changes฀to฀the฀2005฀Omnibus฀Plan฀from฀the฀2000฀Omnibus฀Plan
฀Award฀Limits฀ •฀฀Maximum฀individual฀award฀limits฀are฀2,000,000฀shares฀in฀any฀36-month฀period฀for฀stock฀options฀or฀stock฀appre-
ciation฀rights฀(SARs).
฀ ฀ •฀฀The฀maximum฀compensation฀granted฀as฀performance฀awards฀to฀any฀one฀participant฀for฀any฀performance฀cycle฀is฀
500,000฀shares฀of฀common฀stock฀or฀$5,000,000฀if฀the฀award฀is฀paid฀in฀cash.฀
฀Term฀of฀Awards฀ •฀The฀maximum฀term฀for฀a฀stock฀option฀or฀SAR฀under฀the฀Plan฀is฀seven฀years.
฀Vesting฀ •฀฀Restricted฀stock฀grants฀have฀a฀minimum฀vesting฀period฀of฀three฀years,฀and฀stock฀options฀and฀SARs฀have฀a฀mini-
mum฀vesting฀period฀of฀one฀year,฀other฀than:฀in฀the฀event฀of฀certain฀terminations฀of฀employment;฀after฀a฀Change฀in฀
Control฀(as฀defined฀in฀the฀Plan);฀or,฀for฀restricted฀stock,฀grants฀to฀new฀hires฀made฀in฀payment฀of฀forfeited฀awards.
฀Share฀Reserve฀ •฀฀The฀share฀reserve฀under฀the฀Plan฀(i.e.,฀11,000,000฀shares)฀is฀increased฀by:฀shares฀that฀are฀forfeited฀pursuant฀to฀
awards฀made฀under฀prior฀plans;฀shares฀retained฀for฀payment฀of฀tax฀withholding;฀shares฀issued฀in฀connection฀with฀
reinvestment฀of฀dividends฀and฀dividend฀equivalents;฀shares฀delivered฀for฀payment฀or฀satisfaction฀of฀tax฀withhold-
ing;฀shares฀re-acquired฀on฀the฀open฀market฀using฀option฀exercise฀price฀cash฀proceeds;฀and฀awards฀that฀otherwise฀
do฀not฀result฀in฀the฀issuance฀of฀shares.
฀Change฀in฀Control฀ •฀฀On฀a฀Change฀in฀Control฀of฀the฀Company,฀if฀outstanding฀awards,฀other฀than฀performance฀awards,฀are฀assumed฀or฀
substituted฀by฀the฀surviving฀company,฀as฀determined฀by฀the฀Committee฀(as฀defined฀below),฀then฀the฀awards฀will฀
not฀immediately฀vest฀or฀be฀exercisable.฀These฀continued฀awards฀will฀be฀subject฀to฀accelerated฀vesting฀and฀exercis-
ability฀upon฀certain฀terminations฀of฀employment฀within฀the฀first฀two฀years฀after฀the฀Change฀in฀Control,฀but฀there฀will฀
be฀no฀automatic฀cash-out฀of฀the฀awards.฀If฀awards฀are฀not฀assumed฀or฀substituted฀by฀the฀surviving฀company,฀then฀
the฀awards,฀other฀than฀performance฀awards,฀will฀become฀immediately฀vested,฀exercisable฀and฀cashed-out.
฀ ฀ •฀฀On฀a฀Change฀in฀Control฀of฀the฀Company,฀if฀more฀than฀50%฀of฀the฀performance฀cycle฀has฀elapsed,฀performance฀
awards฀will฀vest฀and฀be฀payable฀at฀the฀greater฀of฀target฀performance฀or฀actual฀performance฀to฀date.฀If฀50%฀or฀less฀
of฀the฀performance฀cycle฀has฀elapsed฀at฀the฀time฀of฀the฀Change฀in฀Control,฀the฀awards฀will฀vest฀and฀be฀paid฀at฀50%฀
of฀target฀performance,฀regardless฀of฀actual฀performance.
A฀summary฀of฀the฀Plan฀appears฀below.฀This฀summary฀is฀qualified฀in฀its฀entirety฀by฀reference฀to฀the฀text฀of฀the฀Plan,฀a฀copy฀of฀which฀is฀attached฀to฀this฀
Proxy฀Statement฀as฀Exhibit฀I฀on฀page฀56.฀The฀Company฀will฀send,฀without฀charge,฀a฀copy฀of฀the฀Plan฀to฀any฀shareholder฀upon฀request.
Purpose
The฀purpose฀of฀the฀2005฀Omnibus฀Plan฀is฀to฀motivate฀selected฀employees฀and฀directors฀of฀the฀Company฀and฀its฀subsidiaries฀to฀put฀forth฀maximum฀efforts฀
toward฀the฀continued฀growth,฀profitability฀and฀success฀of฀the฀Company฀and฀its฀subsidiaries฀through฀equity-฀and฀cash-based฀incentives.
Administration
The฀Executive฀Compensation฀and฀Development฀Committee,฀or฀another฀committee฀designated฀by฀the฀Board฀of฀Directors฀(the฀Committee),฀will฀administer฀
the฀Plan.฀However,฀if฀a฀Committee฀member฀does฀not฀meet฀the฀following฀requirements,฀the฀Committee฀may฀delegate฀some฀or฀all฀of฀its฀functions฀to฀another฀
committee฀that฀meets฀these฀requirements.฀Generally,฀the฀Committee฀must฀consist฀of฀three฀or฀more฀directors,฀each฀of฀whom฀is:฀1)฀an฀independent฀direc-
tor฀under฀the฀listing฀requirements฀of฀the฀New฀York฀Stock฀Exchange฀(NYSE);฀2)฀a฀non-employee฀within฀the฀meaning฀of฀Rule฀16b-3฀under฀the฀Securities฀
Exchange฀Act;฀and฀3)฀an฀outside฀director฀within฀the฀meaning฀of฀Section฀162(m)฀of฀the฀Internal฀Revenue฀Code.
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฀subsidiaries;฀and
฀ •฀the฀Company’s฀directors.
The฀selection฀of฀those฀participants฀who฀will฀receive฀awards฀is฀entirely฀within฀the฀discretion฀of฀the฀Committee.
The฀Committee฀has฀not฀yet฀determined฀how฀many฀employees฀are฀likely฀to฀participate฀in฀the฀Plan.฀The฀Committee฀intends,฀however,฀to฀grant฀most฀of฀the฀
Plan’s฀awards฀to฀those฀executives฀who฀can฀have฀a฀significant฀effect฀on฀the฀growth,฀profitability฀and฀success฀of฀the฀Company.฀There฀are฀currently฀approxi-
mately฀800฀employees฀in฀this฀category.