Kodak 2007 Annual Report Download - page 191

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For all other deferred awards, upon termination of employment for any reason other than death, the amounts held in an executive’s
notational accounts will be distributed in a single lump sum or in up to 10 annual installments as determined by the Compensation
Committee at its sole discretion. The Compensation Committee will also have the discretion to pay the amounts in cash or in shares, or in
any combination of both. Upon an executive’s death, the balance of an executive’s deferred account that is not subject to restriction will be
paid in a lump-sum cash payment within 30 days after appointment of a legal representative of the deceased executive. With respect to
any restricted portion of Mr. Perez’s deferred October 1, 2003 award of restricted stock, if Mr. Perez dies prior to the last day of the
restricted period, his estate will be entitled to receive all of his unrestricted units of common stock credited to his deferred account and a
pro rata share of the restricted units credited to his account.
Withdrawals prior to termination of employment are not permitted under the terms of the deferral program except in cases of severe
financial hardship not within the executive’s control, as determined at the Compensation Committee’s sole discretion.
TERMINATION AND CHANGE-IN-CONTROL ARRANGEMENTS
Potential Payments upon Termination or Change-in-Control
Each of our Named Executive Officers is eligible to receive certain severance payments and benefits in connection with termination of
employment under various circumstances. The potential severance benefits payable to our Named Executive Officers in the event of
termination of employment on December 31, 2007 pursuant to any individual arrangement with the Company are described below.
Actual amounts paid or distributed to our Named Executive Officers as a result of one of the separation events occurring in the future may
be different than those described below due to the fact that many factors affect the amounts of any payments described under the various
separation events discussed later. For example, factors that could affect the amounts payable include the executive’s base salary, the
Company’s stock price and the executive’s age and service with the Company. In addition, although the Company has entered into
individual letter agreements providing severance benefits with most of our Named Executive Officers, in connection with a particular
separation from the Company, the Company and the Named Executive Officer may mutually agree on severance terms that vary from
those provided in pre-existing agreements.
In addition to benefits outlined in our Named Executive Officers’ individual severance arrangements, Named Executive Officers will be
eligible to receive any benefits accrued under the Company’s broad-based benefit plans, such as distributions under SIP, disability benefits
and accrued vacation pay, in accordance with those plans and policies. Our Named Executive Officers will also be eligible to receive any
account balances at the 2007 fiscal year end under our non-qualified deferred compensation plans and programs as set forth in the Non-
Qualified Deferred Compensation table on page 66 of this Proxy Statement and any present value of accrued benefits as set forth in the
Pension Benefits table on page 63 of this Proxy Statement.
Following termination of employment, each of our Named Executive Officers is subject to compliance with the post-termination restrictive
covenants set forth in their Eastman Kodak Company Employee’s Agreement, in addition to any covenants provided for in their individual
arrangements with the Company. These covenants generally prohibit our Named Executive Officers from disclosing proprietary or
confidential information of the Company and from competing with the Company for a certain period after termination of their employment.
All of our Named Executive Officers are prohibited for one year after termination of their employment from soliciting any of our employees
to leave employment with the Company or any of our customers or suppliers to do business with any of our competitors. All of our Named
Executive Officers are prohibited from engaging in any work for a competitor of the Company in the field in which they were employed by
Kodak for a period of not more than 18 months after their employment is terminated. As described further below, Mr. Perez is also subject
to a two-year non-compete after termination of his employment under his offer letter dated March 3, 2003.
For any unvested or restricted equity awards, related restriction periods may lapse and vesting may be accelerated automatically pursuant
to the terms of the awards depending on the circumstances surrounding a Named Executive Officer’s termination of employment. The
Compensation Committee may waive any restrictions or accelerate vesting if an executive’s termination is determined to be for an
“approved reason.” An approved reason is defined as a termination of employment that is in the best interest of the Company, as
determined by the Compensation Committee. Absent an employment agreement specifying different treatment, equity awards held by
Named Executive Officers will generally be affected as follows:
• Stock Options: If the Compensation Committee determines that a Named Executive Officer’s termination is for an approved reason,
then all unvested stock options will continue to vest as if employment continued and will expire on the third anniversary date of
termination of employment. Upon termination of employment due to death or disability, all unvested stock options will immediately
vest and remain exercisable until the third anniversary of employment termination.
• Leadership Stock Awards: Upon termination of employment due to death, disability, retirement or an approved reason, an executive
will be eligible to receive a pro rata portion of any award earned under the performance cycle, provided the executive was employed
for the first year of the performance cycle.