Kodak 2006 Annual Report Download - page 225

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(1) This table only includes Mr. Perez because no other Named Executive Offi cer will receive severance benefi ts upon their voluntary termination.
(2) The amounts in this table: 1) refl ect incremental payments associated with a voluntary termination with good reason; 2) assume a stock price of
$25.80 (except if otherwise noted); and 3) includes all outstanding grants through the assumed termination date of December 31, 2006.
(3) The cash severance amounts for Mr. Perez was calculated by multiplying 2 times Mr. Perez’s target cash compensation.
(4) The amount in this row represent the intrinsic value of unvested stock options, based on a stock price of $25.80, the closing price of Kodak stock
as of December 29, 2006, that would continue to vest, per Mr. Perez’s offer letter, described on page 47 of this Proxy Statement.
(5) The amount in this row represent the value of unvested shares of restricted stock that would automatically vest upon voluntary termination for
good reason, and the value of the unvested shares of restricted stock that vest on a pro rata basis pursuant to the terms of Mr. Perez’s signing
bonus, included in his offer letter, discussed on page 47 of this Proxy Statement.
(6) The amounts in this row refl ect 50% of the target allocation for the 2006-2007 Leadership Stock performance cycle, although the actual amount
may range from 0% to 200% based on Company’s performance relative to plan goals, and also refl ects a 0% earnout for the 2005-2006 Leader-
ship Stock Award.
(7) The amount in this row refl ect a 95% payout from the 2006 EPSP.
(8) Mr. Perez would be entitled to $25,763 in perquisites, which include: 1) four months of continued health and dental benefi ts, valued at $2,763;
2) outplacement benefi ts, valued at $9,000; and 3) two years of fi nancial counseling benefi ts, valued at $7,000 per year.
(9) The amounts included in this row report the incremental value of pension benefi ts to which Mr. Perez would have been entitled assuming he
would receive his pension benefi ts in a lump sum.
Change-in-Control Severance Payments
Executive Protection Plan
The Company maintains an Executive Protection Plan to provide severance pay and continuation of certain welfare benefi ts for Named Executive
Offi cers in the event i) a change-in-control occurs and ii) the Named Executive Offi cer’s employment is terminated by the Company for reasons other
than cause or by the Named Executive Offi cer for good reason within two years after a change-in-control. A change-in-control is generally defi ned
under the plan as:
• the incumbent directors cease to constitute a majority of the Board, unless the election of the new directors was approved by at least two-
thirds of the incumbent directors then on the Board;
• the acquisition of 25% or more of the combined voting power of the Company’s then outstanding securities;
• a merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company or any of its subsidiaries that
requires the approval of the Company’s shareholders; or
• a vote by the shareholders to completely liquidate or dissolve the Company.
In the event of a termination of employment, either voluntarily with “good reason” or involuntarily without “cause,” within two years following a
change-in-control, each of the Named Executive Offi cers receives a lump-sum severance payment equal to i) three times their base salary and target
EXCEL bonus and ii) continued participation in the Company’s medical, dental, disability and life insurance plans for twelve months at no cost to the
executive. The Company’s change-in-control program also requires, subject to certain limitations, tax gross-up payments to all employees to mitigate
any excise tax imposed upon the employee under the Internal Revenue Code. If it is determined that an executive would not be subject to an excise tax
if the payments received in connection with the change-in-control were reduced by 10%, then amounts payable to the executive under the Plan will be
reduced to the maximum amount the executive could be paid without giving rise to an excise tax.
“Good reason” is defi ned under the plan for our Named Executive Offi cers to mean:
• the assignment of, or change in, the duties or responsibilities of the Named Executive Offi cer that are not comparable in any adverse respect
with his or her duties prior to the change-in-control, other than a change in the executive’s title or reporting relationship;
• a reduction of the Named Executive Offi cer’s pay, target bonus opportunities or benefi ts;
• a material reduction in the perquisites or fringe benefi ts provided;
• the failure of any successor to the Company to assume the Executive Protection Plan; or
• any amendment or termination of the Plan not permitted by its terms.
“Cause” is defi ned under the program for our Named Executive Offi cers to mean:
• the willful and continued failure of the executive to substantially perform his or her duties (other than due to physical or mental illness) after a
written demand by the Board of Directors; or
• the willful engaging in illegal conduct or gross misconduct which is materially injurious to the Company or its affi liates.