Kodak 2007 Annual Report Download - page 187

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Traditional Defined Benefit Component
Under the traditional defined benefit component of KRIP, benefits are based upon an employee’s average participating compensation
(APC). The plan defines APC as one-third of the sum of the employee’s participating compensation for the highest consecutive 39 periods
of earnings over the 10 years ending immediately prior to retirement or termination of employment. Participating compensation, in the case
of the Named Executive Officers, is base salary and any EXCEL award, including allowances in lieu of salary for authorized periods of
absence, such as illness, vacation or holidays.
For an employee with up to 35 years of accrued service, the annual normal retirement income benefit is calculated by multiplying the
employee’s years of accrued service by the sum of (a) 1.3% of APC, plus (b) 1.6% of APC in excess of the average Social Security wage
base. For an employee with more than 35 years of accrued service, the amount is increased by 1% for each year in excess of 35 years.
The retirement income benefit is not subject to any deductions for Social Security benefits or other offsets. Participants in the traditional
defined benefit component of the plan may choose from among optional forms of benefits such as a straight life annuity, a qualified joint
and 50% survivor annuity, other forms of annuity or a lump sum.
An employee may be eligible for normal retirement, early retirement benefits, vested benefits or disability retirement benefits under the
traditional defined benefit component depending on the employee’s age and total service when employment with the Company ends. An
employee is entitled to normal retirement benefits at age 65. For early retirement benefits, an employee must have reached age 55 and
have at least 10 years of service or have a combined age and total service equal to 75. Generally, the benefit is reduced if payment begins
before age 65. An employee who has five or more years of vesting service with the Company will be entitled to a reduced vested benefit if
employment with the Company is terminated before becoming eligible for normal retirement or early retirement benefits.
As of December 31, 2007, Ms. Hellyar is the only Named Executive Officer eligible for an early retirement benefit under the traditional
defined benefit component of the plan.
Non-Qualified Supplemental Retirement Plans (KURIP and KERIP)
Each of our Named Executive Officers is eligible to receive benefits under the Kodak Unfunded Retirement Income Plan (KURIP). KURIP
is an unfunded non-contributory retirement plan. It provides pension benefits where benefits cannot be paid under KRIP and matching
contributions cannot be made to the Company’s Savings and Investment Plan (SIP)(a 401(k) defined contribution plan), because of the
limitation on the inclusion of earnings in excess of limits contained in Section 401(a)(17) of the Code (for 2006 and 2007, $220,000 and
$225,000, respectively) and because deferred compensation is ignored when calculating benefits under KRIP and SIP.
For Named Executive Officers participating in the traditional defined benefit component of KRIP, the annual benefit is calculated by
determining the amount of the retirement benefit to which the employee would otherwise be entitled under KRIP if deferred compensation
were considered when calculating such benefit and the limits under Section 401(a)(17) of the Code were ignored, less any benefits earned
under KRIP or under the Company’s excess benefit plan (KERIP). KERIP is further described in the Compensation Discussion and
Analysis on page 38 of this Proxy Statement. As of December 31, 2007, none of our Named Executive Officers had any accrued benefit
under KERIP.
For Named Executive Officers participating in the cash balance component of KRIP, the annual benefit under KURIP is calculated by
crediting an executive’s account with an amount equal to 7% of an employee’s compensation that is ignored under KRIP because it is
either deferred compensation or in excess of the Section 401(a)(17) compensation limit. The ongoing balance of the executive’s account
earns interest at the 30-year Treasury bond rate.
Benefits due under KURIP are payable upon an employee’s termination of employment or death, as the plan administrator may determine.
For benefits not subject to Section 409A of the Code, the plan administrator may select, in his/her sole discretion, the form of payment
options available under KURIP. For benefits subject to Section 409A of the Code, participants who retire on or before January 1, 2008
elect the form of distribution. If an employee’s benefit under KRIP is subject to actuarial reduction, then any benefit payable under KURIP
will also be subject to actuarial reduction.