Kodak 2009 Annual Report Download - page 126

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(2) The Company's equity compensation plans not approved by security holders include the Eastman Kodak Company 1997 Stock
Option Plan and the Kodak Stock Option Plan.
The 1997 Stock Option Plan, a plan formerly maintained by the Company for the purpose of attracting and retaining senior
executive officers, became effective on February 13, 1997, and expired on December 31, 2003. The Compensation Committee
administered this plan and continues to administer these plan awards that remain outstanding. The plan permitted awards to
be granted in the form of stock options, shares of common stock and restricted shares of common stock. The maximum
number of shares that were available for grant under the plan was 3,380,000. The plan required all stock option awards to be
non-qualified, have an exercise price not less than 100% of fair market value of the Company’s stock on the date of the
option's grant and expire on the tenth anniversary of the date of grant. Awards issued in the form of shares of common stock or
restricted shares of common stock were subject to such terms, conditions and restrictions as the Compensation Committee
deemed appropriate.
The Kodak Stock Option Plan, an "all employee stock option plan" which the Company formerly maintained, became effective
on March 13, 1998, and terminated on March 12, 2003. The plan was used in 1998 to grant an award of 100 non-qualified
stock options or, in those countries where the grant of stock options was not possible, 100 freestanding stock appreciation
rights, to almost all full-time and part-time employees of the Company and many of its domestic and foreign subsidiaries. In
March of 2000, the Company made essentially an identical grant under the plan to generally the same category of employees.
The Compensation Committee administered this plan and continues to administer these plan awards that remain outstanding.
A total of 16,600,000 shares were available for grant under the plan. All awards granted under the plan generally contained the
following features: 1) a grant price equal to the fair market value of the Company's common stock on the date of grant; 2) a
two-year vesting period; and 3) a term of 10 years.
On December 31, 2009, the equity overhang, or the percentage of outstanding shares (plus shares that could be issued pursuant to
plans represented by all stock incentives granted and available for future grant under all plans) was 13.0%.
The following table sets forth information regarding awards granted and earned, the run rate for each of the last three fiscal years,
and the average run rate over the last three years.
(shares in thousands) Run Rate for the Year Ended December 31,
2009 2008 2007 3-year Average
Stock options granted 1,229 2,813 1,813 1,952
Unvested service-based stock granted 7,585 796 183 2,855
Actual performance-based stock awards earned 563 164 63 263
Basic common shares outstanding at fiscal year end 268,631 268,169 288,000 274,933
Run rate 3.49% 1.41% 0.71% 1.84%
The Company continues to manage its run rate of awards granted over time to levels it believes are reasonable in light of changes in
its business and number of outstanding shares while ensuring that our overall executive compensation program is competitive,
relevant, and motivational.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by Item 13 is incorporated by reference from the information under the captions "Compensation of Named
Executive Officers - Employment and Retention Arrangements" and "Board Structure and Corporate Governance - Board
Independence" in the Proxy Statement.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by Item 14 regarding principal auditor fees and services is incorporated by reference from the information
under the caption "Committee Reports - Report of the Audit Committee" in the Proxy Statement.