Kodak 2009 Annual Report Download - page 229

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then amounts payable to the executive under the plan will be reduced to the maximum amount the executive could be paid without giving
rise to an excise tax. Under Mr. Perez’s letter agreement dated September 28, 2009, Mr. Perez waived any and all rights to receive tax
gross-up payments under the plan.
“Good reason” is defined under the plan for our Named Executive Officers to mean:
• The assignment of, or change in, the duties or responsibilities of the Named Executive Officer that are not comparable in any
adverse respect with his or her duties prior to the change in control, other than a change in the executive’s title or reporting
relationship;
• A reduction of the Named Executive Officer’s pay, target bonus opportunities or benefits;
• A material reduction in the perquisites or fringe benefits provided;
• The failure of any successor to the Company to assume the plan; or
• Any amendment or termination of the plan not permitted by its terms.
“Cause” is defined under the program for our Named Executive Officers to mean:
• The willful and continued failure of the executive to substantially perform his or her duties (other than due to physical or mental
illness) after a written demand by the Board; or
• The willful engaging in illegal conduct or gross misconduct which is materially injurious to the Company or its affiliates.
In addition to the above, the plan provides that both Mr. Perez and Mr. Faraci would also be entitled to these severance benefits if they
voluntarily terminate their employment for any reason during the 30-day period commencing 23 months after the change in control. Under
his letter agreement dated September 28, 2009, Mr. Perez waived any and all rights to receive benefits associated with this provision. A
Named Executive Officer will also receive severance benefits under the plan if his or her employment is terminated prior to a change in
control if they are able to demonstrate that their employment was terminated in contemplation of a change in control and a change in
control occurs.
Other Benefit Plans
As a result of the Company’s review in 2007 of the change in control benefits under various Company plans, the Committee determined to
gradually phase out, over a five-year period beginning January 1, 2008, the change in control pension enhancements under KRIP and
KURIP. Pursuant to this change, the additional age and service resulting from the change in control pension enhancement was decreased
from a maximum of five years by one year for every additional year that transpires, until the enhancement is fully phased out effective
January 1, 2012.
For 2009, any participant in the traditional defined benefit component of KRIP and KURIP, including the affected Named Executive
Officers, whose employment is terminated for a reason other than death, disability, cause or voluntary resignation, within three years of a
change in control, was provided up to three additional years of service to determine eligibility for a vested right, to calculate the amount of
the accrued benefit and to determine any applicable early retirement factors. In addition, a participant was deemed to have up to three
additional years of age in determining any applicable early retirement factors. For participants age 50 or older as of the date of the change
in control, the enhanced age and service was used to determine eligibility for retirement.
The actual additional number of years of service and age that are given to a participant decreases proportionately depending upon the
number of years that elapsed between the date of a change in control and the date of the participant’s termination of employment. If the
plan is terminated within three years after a change in control, the benefit for each participant would be calculated as indicated previously.
Participants in the cash balance component of KRIP and KURIP, including the affected Named Executive Officers, are entitled to a benefit
equal to 7% of the participant’s annual compensation at the time of the termination times the number of additional years of service that the
executive is entitled to under the plan’s change in control pension enhancement.
Compensation Programs
Upon a change in control (as defined in EDCP and by Section 409A to the extent applicable), each Named Executive Officer who
participates in EDCP will be entitled to a lump-sum cash payment of his or her account balance under the plan. For amounts not subject to
Section 409A, this rule will not apply if the executive elects in writing no later than prior to the beginning of the year preceding the year in
which a change in control occurs that payment shall be made in equal installments over a period not longer than 11 years.
Under the EXCEL plan, if a Named Executive Officer’s employment is terminated within two years following a change in control other than
as a result of death, disability, voluntary resignation, retirement or for cause, the executive will be entitled to be paid any earned, but
unpaid, award and a pro rata target award for the year in which their employment is terminated. If, upon a change in control, Kodak’s
common stock ceases to be actively traded on the NYSE, then each Named Executive Officer will be entitled to receive any earned but
unpaid award and a pro rata target award for the year in which the change in control occurs.