Kodak 2007 Annual Report Download - page 181

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(1) The amounts shown for the “Threshold,” “Target” and “Maximum” levels represent the possible payouts for 2007 under the EXCEL
plan as well as Mr. Langley’s individual bonus plan. There is no amount in the “threshold” level for either the EXCEL plan or the
individual bonus plan as the potential payouts can range from zero to the maximum amount allowable under the respective plan based
on performance. Actual payouts for 2007 are disclosed in the Summary Compensation Table in the column “Non-Equity Incentive Plan
Compensation.”
(2) The amounts shown represent the “threshold,” “target” and “maximum” number of shares of common stock that Named Executive
Officers can earn under the 2007 Leadership Stock (LS) performance cycle. There is no amount in the “threshold” level as participants
can earn any amount between zero and the maximum award payable, depending on performance.
(3) The maximum amounts for the EXCEL plan represent the maximum payout permitted under the plan in accordance with the formula
established under the plan. The maximum bonus payout for the EXCEL plan is the lesser of: 1) 10% of the corporate funding pool
determined in accordance with performance against the pre-established performance targets; 2) 500% of a Named Executive Officer’s
annual base salary as of December 31, 2006; or 3) $5 million. The maximum amount shown for the EXCEL plan is the lesser of 500%
of annual base salary or $5 million since the amount representing 10% of the corporate funding pool is not determinable as of the
beginning of the year. The maximum payout shown for Mr. Langley’s individual bonus plan is the maximum payout under his plan.
(4) The amounts shown represent full grant date fair value, as calculated in accordance with SFAS 123R.
(5) Due to two promotions throughout the year, Mr. Faraci had three target bonus percentages during fiscal 2007; in accordance with
Company policy, the target bonus shown in the table above represents Mr. Faraci's end-of-year salary multiplied by the weighted
average target bonus percentage during fiscal 2007.
EXCEL Plan
EXCEL (Executive Compensation for Excellence and Leadership) is our short-term variable incentive plan for executives. For a discussion
of the EXCEL plan, target allocations for our Named Executive Officers and the award earned under the plan for 2007 performance, see
the discussion in the “Compensation Discussion and Analysis” under the heading “Annual Variable Pay.”
2007 Leadership Stock
On December 12, 2006, the Compensation Committee approved a performance stock allocation to each Named Executive Officer
pursuant to the 2007 performance cycle of the Leadership Stock Program. The allocations became effective on January 1, 2007.
Leadership Stock may be earned by our executives at the end of a performance cycle if the Company achieves the aggregate performance
target established for the performance cycle. The actual number of stock units earned by an executive is based on the executive’s target
allocation multiplied by the applicable performance percentage based on the Company’s performance. Any unearned units are forfeited at
the end of the performance period. The performance metrics established for the 2007 performance cycle are discussed in the
“Compensation Discussion and Analysis” under the heading “Leadership Stock – 2007 Performance Cycle Awards.”
For the 2007 Leadership Stock performance cycle, the payment of any stock units earned under the program for the 2007 performance
cycle is delayed for two years contingent on the executive’s continued employment with the Company. During this two-year vesting period,
dividend equivalents accrue on the stock units, but payment of the dividends is also subject to this two-year vesting period. At the end of
the two-year period, the stock units and the dividend equivalents earned on these stock units are paid to the executive in the form of
shares of Company common stock. All shares earned under the Leadership Stock program are granted under the Company’s 2005
Omnibus Long-Term Compensation Plan.
2006 Performance Bonus
One-half of the discretionary bonus awarded to Named Executive Officers for performance in 2006 was awarded in the form of restricted
shares of Company common stock. These awards were granted on February 27, 2007 and assuming continued employment will vest in
equal installments on each of the first three anniversaries of the grant date, subject to acceleration upon the occurrence of certain events
as described in “Potential Payments upon Termination of Employment or Change-in-Control” later.
Individual Bonus Plan
Mr. Langley is eligible to earn a cash bonus under an individual bonus plan established to incent achievement of certain pre-established
goals in the GCG for the 2007 performance year. The target and maximum payout under the plan was $300,000. At the beginning of the
year, our CEO established the following four equally weighted performance goals, which were approved by the Compensation Committee:
1) solidify and operationalize the GCG operating structure; 2) deliver an accepted, cohesive and comprehensive graphic communications
strategy; 3) reduce SG&A targets at the business unit and corporate center level; and 4) drive GCG financial performance, specifically
GCG Digital Revenue Growth, GCG Earnings from Operation and GCG Contribution Earnings from Operations. The first three goals
focused on the integration of GCG into Kodak’s operating structure. The fourth goal relating to GCG financial performance had a minimum
threshold of achieving one of three specified financial metrics: Digital Revenue Growth, Earnings from Operations and Contribution
Earnings from Operations. The minimum goal for Digital Revenue Growth was 6% with a target of 7%. The Earnings from Operations
minimum goal was 4% with a target of 6%. The Contribution EFO minimum goal was $275 million with a target of $296 million.