Kodak 2005 Annual Report Download - page 215

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EXHIBIT II — AUDIT AND NON-AUDIT SERVICES PRE-APPROVAL POLICY
I. STATEMENT OF PRINCIPLES
The Audit Committee is responsible for the appointment, compensation and oversight of the work of the independent auditor. As part of this
responsibility, the Audit Committee is required to pre-approve the audit and non-audit services performed by the independent auditor in order to
assure that they do not impair the auditor’s independence from the Company. Accordingly, the Audit Committee has adopted this Pre-Approval
Policy which sets forth the procedures and the conditions pursuant to which services proposed to be performed by the independent auditor may
be pre-approved.
This Pre-Approval Policy establishes two different approaches to pre-approving services: proposed services either may be pre-approved without
specifi c consideration by the Audit Committee (“general pre-approval”) or require the specifi c pre-approval of the Audit Committee (“specifi c
pre-approval”). The Audit Committee believes that the combination of these two approaches in this policy will result in an effective and effi cient
procedure to pre-approve services performed by the independent auditor. As set forth in this policy, unless a type of service has received general
pre-approval, it will require specifi c pre-approval by the Audit Committee. Any proposed services exceeding pre-approved budgeted amounts will also
require specifi c pre-approval by the Audit Committee. For both types of pre-approval, the Audit Committee shall consider whether such services are
consistent with the SEC’s rules on auditor independence. The Audit Committee shall determine whether the audit fi rm is best positioned to provide the
most effective and effi cient service.
The non-audit services that have the general pre-approval of the Audit Committee will be reviewed on an annual basis unless the Audit Committee
considers a different period and states otherwise. The Audit Committee shall annually review and pre-approve the audit, audit-related and tax services
that can be provided by the independent auditor without obtaining specifi c pre-approval from the Audit Committee. The Audit Committee will revise
the list of general pre-approved services from time to time, based upon subsequent determinations. The Audit Committee does not delegate its
responsibilities to pre-approve services performed by the independent auditor to management or to others.
The independent auditor has reviewed this policy and believes that implementation of the policy will not adversely affect the auditor’s independence.
II. AUDIT SERVICES
The Audit Committee shall approve the annual audit services engagement terms and fees no later than its review of the independent auditor’s audit
plan. Audit services may include the annual fi nancial statement audit (including required quarterly reviews), subsidiary audits and other procedures
required to be performed by the independent auditor to be able to form an opinion on the Company’s consolidated fi nancial statements. These other
procedures include information systems and procedural reviews and testing performed in order to understand and place reliance on the systems of
internal control, and consultations occurring during, and as a result of, the audit. Audit services also include the attestation engagement for the
independent auditor’s report on management’s report on internal control over fi nancial reporting. The Audit Committee shall also approve, if
necessary, any signifi cant changes in terms, conditions and fees resulting from changes in audit scope, company structure or other items.
In addition to the annual audit services engagement approved by the Audit Committee, the Audit Committee may grant general pre-approval to other
audit services, which are those services that only the independent auditor reasonably can provide. Other audit services may include statutory audits
or fi nancial audits for subsidiaries or affi liates of the Company and services associated with SEC registration statements, periodic reports and other
documents fi led with the SEC or other documents issued in connection with securities offerings.
III. AUDIT-RELATED SERVICES
Audit-related services are assurance and related services that traditionally are performed by the independent auditor. Because the Audit Committee
believes that the provision of audit-related services does not impair the independence of the auditor and is consistent with the SEC’s rules on auditor
independence, the Audit Committee may grant general pre-approval to audit-related services. Audit-related services include, among others, due
diligence services pertaining to potential business acquisitions/dispositions, accounting consultations for signifi cant or unusual transactions not
classifi ed as “audit services,” assistance with understanding and implementing new accounting and fi nancial reporting guidance from rulemaking
authorities, fi nancial audits of employee benefi t plans, agreed-upon or expanded audit procedures performed at the request of management and
assistance with internal control reporting requirements.