Kodak 2006 Annual Report Download - page 226

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Mr. Perez would also be entitled to these severance benefi ts if he voluntarily terminates his employment for any reason during the thirty-day period
commencing 23 months after the change-in-control. A Named Executive Offi cer will also receive severance benefi ts under the Plan if his or her
employment is terminated prior to a change-in-control if they are able to demonstrate that their employment was terminated in contemplation of a
change-in-control and a change-in-control actually occurs.
Other Benefi t Plans
A change-in-control will also result in payment of benefi ts under various Company plans. Under the Company’s defi ned benefi t pension plan, Named
Executive Offi cers will receive enhanced benefi ts under the Company’s defi ned benefi t retirement plan (KRIP). Any participant whose employment
is terminated, for a reason other than death, disability, cause or voluntary resignation, within fi ve years of a change-in-control is provided up to fi ve
additional years of service. In addition, where the participant is age 50 or over on the date of the change-in-control, up to fi ve additional years of age
are 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 benefi t.
Executives who participate in the cash balance component of the Company’s retirement plan will be entitled to a benefi t equal to 7% of the executive’s
annual compensation at the time of the termination times the number of additional years of service that the executive is entitled to under the plan. The
actual number of years of service and years of age that is given to such a participant decreases proportionately depending upon the number of years
that elapse between the date of a change-in-control and the date of the participant’s termination of employment. If the plan is terminated within fi ve
years after a change-in-control, the benefi t for each participant will be calculated as indicated above.
Upon a change-in-control (as defi ned in the Company’s Executive Deferred Compensation Plan), each Named Executive Offi cer who participates in
the deferred compensation plan will be entitled to a lump-sum cash payment of his or her account balance under the plan unless the executive elects
in writing no later than prior to the beginning of the year preceding the year in which a change-in-control occurs that payment shall be made in equal
installments over a period not longer than 11 years.
Under the EXCEL plan, if a Named Executive Offi cer’s employment is terminated within two years following a change-in-control other than as a result
of death, disability, voluntary termination or for cause, the executive will be entitled to be paid any earned but unpaid award and a pro rata target
award for the year in which their employment is terminated. If, upon a change-in-control, Kodak’s common stock ceases to be actively traded on
the NYSE, then each Executive Offi cer will be entitled to receive any earned but unpaid award and a pro rata target award for the year in which the
change-in-control occurs.
In the event of a change-in-control which causes the Company’s stock to cease active trading on the NYSE, the Company’s compensation plans (with
the exception of the 2005 Omnibus Long-Term Compensation Plan) will generally be affected as follows, when Kodak common stock is not exchanged
solely for common stock of the surviving company or the surviving company does not assume all Plan awards:
• Under the Company’s stock option plans, all outstanding options will vest in full and be cashed out based on the difference between the
change-in-control price and the option’s exercise price.
• Under the Company’s restricted stock programs, all of the restrictions on the stock will lapse and the stock will be cashed out based on the
change-in-control price.
Under the Company’s 2005 Omnibus Long-Term Compensation Plan, upon a change-in-control (as defi ned in the plan), if outstanding stock option
and restricted stock awards are assumed or substituted by the surviving company, as determined by the Compensation Committee, then the awards
will not immediately vest or be exercisable. If the awards are so assumed or substituted, then the awards will be subject to accelerated vesting and
exercisability upon certain terminations of employment within the fi rst two years after the change-in-control. Only if the awards are not so assumed
or substituted will they become immediately vested, exercisable and cashed out. For performance awards, if more than 50% of the performance cycle
has elapsed when a change-in-control occurs, the award will vest and be paid out at the greater of target performance or performance to date. If 50%
or less of the performance cycle has elapsed when a change-in-control occurs, the award will vest and be paid out at 50% of target performance,
regardless of actual performance to date.