Kodak 2008 Annual Report Download - page 174

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Our executive security program requires our CEO to use Company aircraft for all air travel, whether personal or business. Our Named
Executive Officers, other than our CEO, are not permitted to use corporate aircraft for personal travel without approval from our CEO. This
restriction applies to personal travel of these Named Executive Officers as well as the travel of a spouse when accompanying the Named
Executive Officer on business travel.
The compensation attributed to our Named Executive Officers for 2008 for perquisites is included in the Summary Compensation Table on
page 49 of this Proxy Statement.
SEVERANCE AND CHANGE-IN-CONTROL ARRANGEMENTS
Severance Arrangements
Our Named Executive Officers are responsible for the continued success of the Company and the execution of the Company’s strategic
plan to grow our digital portfolio and to continue management of a sustainable business model for our traditional businesses. The
Committee believes that it is important to provide our senior management some measure of financial security in the event their
employment is terminated without cause.
Most of our Named Executive Officers have an individual letter agreement that provides various severance benefits in the event their
employment is terminated under various circumstances. These individual letter agreements were established at the time each Named
Executive Officer commenced employment with the Company or later in connection with entering into a retention arrangement.
Additionally, when determining the appropriate severance arrangement for a Named Executive Officer, the Committee generally applies
pre-established guidelines. Under these guidelines, our Named Executive Officers may be eligible to receive a severance allowance equal
to one to two times their target cash compensation depending on their position, length of service and the circumstances surrounding their
departure. The individual letter agreements for Named Executive Officers are approved by the Committee and are consistent with
guidelines for executive severance that the Committee has established.
Our individual severance arrangements are designed to serve as a retention tool and to eliminate any reluctance of executives to
implement any transformational components of the Company’s strategic plan. In certain instances, an executive’s successful completion of
his or her responsibilities may result in the elimination of his/her job. These arrangements also provide an incentive for individuals to sign a
release of claims against the Company, to refrain from competing with the Company and to cooperate with the Company both before and
after their employment is terminated.
Mr. Perez’s individual severance arrangement provides him with severance benefits that are payable in the event his employment is
terminated by the Company without “cause” or if he terminates for “good reason.” Under their individual severance arrangements, Messrs.
Faraci and Sklarsky and Ms. Hellyar are entitled to severance benefits for termination by the Company without “cause.” The arrangements
for Mr. Sklarsky and Ms. Hellyar also provide them with severance benefits upon their long-term disability. For purposes of these
severance arrangements, the definitions of “cause” vary slightly among the relevant individual letter agreements negotiated between the
Company and the Named Executive Officers. When approving any letter agreement for employment or retention, the Committee focuses
on the severance triggers relative to each executive’s position and responsibilities.
Our severance arrangements with our Named Executive Officers also provide for the treatment of other compensation provided under the
Company’s annual bonus plan, equity plans and retirement plans. For additional information regarding the potential severance benefits
payable to our Named Executive Officers under various circumstances see the description under the Severance Benefits Tables beginning
on page 72 of this Proxy Statement.
Change-in-Control Arrangements
Consistent with our compensation philosophy, we believe that the interests of our shareholders are best served if the interests of our senior
management are aligned with theirs. To this end, our Executive Protection Plan, which the Company adopted in 1992, provides for
enhanced change-in-control severance benefits for our Named Executive Officers to reduce any reluctance of our Named Executive
Officers to support potential change-in-control transactions that may be in the best interest of shareholders and to promote the continued
employment and dedication of our Named Executive Officers without distraction. The Committee believes that these change-in-control
benefits also encourage smooth transition of management in the event of a change-in-control. The terms of the Executive Protection Plan
are more fully described on page 76 of this Proxy Statement.
When determining the appropriate level of change-in-control benefits for a Named Executive Officer under the Executive Protection Plan,
the Committee considers how to ensure that the plan continues to fulfill the objectives described above and, in doing so, it takes market
practice and cost of the benefits into consideration. The Committee’s decisions concerning these benefits do not affect decisions made
regarding other compensation elements.
Certain of our other employee benefit and compensation plans also provide enhanced benefits to our Named Executive Officers after a
change-in-control. These benefits are designed to protect our Named Executive Officers against possible loss of benefits after a change-in-
control. Additional plan terms and the treatment of any benefits after a change-in-control under the Company’s retirement and welfare
plans, deferred compensation plan, EXCEL plan and equity incentive plans are described beginning on page 76 of this Proxy Statement.