Kodak 2008 Annual Report Download - page 190

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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. As of January 1, 2008, an employee who has three 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, 2008, Ms. Hellyar and Mr. Berman are the only Named Executive Officers 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 2007 and 2008, $225,000 and
$230,000, 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 47 of this Proxy Statement. As of December 31, 2008, 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 employee’s account with an amount equal to 7% of his/her compensation that is ignored under KRIP and SIP because it is
either in excess of the Section 401(a)(17) compensation limit or deferred compensation. The ongoing balance of the executive’s account
earns interest at the 30-year Treasury bond rate. For 2009, the amount of an employee’s compensation used to credit his/her KURIP
account is reduced to 4% to parallel the Company’s suspension of matching contributions to SIP for that year.
Benefits due under KURIP are payable upon an employee’s termination of employment or death. Effective January 1, 2008, the plan
administrator may select, in his/her sole discretion, the form of payment options available under KURIP for benefits not subject to Section
409A of the Code. For benefits subject to Section 409A of the Code, payments are made in a lump sum. 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.