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Eastman Kodak Company 2010 Annual Report on Form 10-K
and Notice of 2011 Annual Meeting and Proxy Statement

Table of contents

  • Page 1
    Eastman Kodak Company 2010 Annual Report on Form 10-K and Notice of 2011 Annual Meeting and Proxy Statement

  • Page 2

  • Page 3
    ...X Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the year ended December 31, 2010 or Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from Commission File Number 1-87 to EASTMAN KODAK COMPANY...

  • Page 4
    ... incorporate by reference information from the Notice of 2011 Annual Meeting and Proxy Statement: Item 10 - DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Item 11 - EXECUTIVE COMPENSATION Item 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS...

  • Page 5
    ... Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and Services PART II 18 Item 5. Market...

  • Page 6
    ... to Eastman Kodak Company. The Company's products and services span: • Digital still and video cameras and related accessories • Consumer inkjet printers and media • Digital picture frames • Retail printing kiosks, APEX drylab systems, and related media and services • KODAK Gallery online...

  • Page 7
    ...leading online merchandise and photo sharing service. The www.Kodakgallery.com website provides consumers with a secure and easy way to view, store and share their images with friends and family, and to receive Kodak prints and other creative products from their pictures, such as photo books, frames...

  • Page 8
    ... and black-and-white presses, components and systems. These products utilize Kodak's revolutionary Stream technology to deliver high-speed, high-quality variable data inkjet printing on a broad range of media at a low running cost. Business Services and Solutions: The Business Services and Solutions...

  • Page 9
    ... in several areas important to its business, including digital cameras and image sensors; network photo sharing and fulfillment; flexographic and lithographic printing plates and systems; digital printing workflow and color management proofing systems; color and black-and-white electrophotographic...

  • Page 10
    ...being electronically filed with or furnished to the SEC. They are available through the Company's website at www.Kodak.com. To reach the SEC filings, follow the links to Investor Center, and then SEC Filings. The Company also makes available its annual report to shareholders and proxy statement free...

  • Page 11
    ... consumer electronics, and develop improvements to our current technology to address changing customer preferences, this could adversely affect our revenue, earnings and cash flow. Due to changes in technology and customer preferences, the market for traditional film and paper products and services...

  • Page 12
    ... or use, which could adversely affect our competitive position. Also, because of the rapid pace of technological change in the information technology industry, much of our business and many of our products rely on key technologies developed or licensed by third parties, and we may not be able to...

  • Page 13
    ... sales to both enterprise accounts and customers. Successfully managing the interaction of direct and indirect channels to various potential customer segments for our products and services is a complex process. Moreover, since each distribution method has distinct risks and costs, our failure...

  • Page 14
    ...and employment laws; • difficulties in collecting accounts receivable; • limitations or restrictions on the repatriation of cash; • reduced or limited protection of intellectual property rights; • managing research and development teams in geographically disparate locations, including Canada...

  • Page 15
    ... pledged assets. Continued investment, capital needs, restructuring payments and servicing our debt require a significant amount of cash and our ability to generate cash may be affected by factors beyond our control. Our business may not generate cash flow in an amount sufficient to enable us to pay...

  • Page 16
    ... and Research in Motion Corporation v. Eastman Kodak Company, seeks to invalidate certain Company patents related to digital camera technology and software object linking, and seeks a determination that RIM handheld devices do not infringe such patents. On February 17, 2009, the Company filed its...

  • Page 17
    ... item in Part I of this report in lieu of being included in the Proxy Statement for the Annual Meeting of Shareholders. Date First Elected an to Executive Present Officer Office 2002 2005 2010 2002 2007 2007 2003 2006 2009 2008 2005 2007 2010 2009 2010 2011 2005 2011 2009 2010 Name Robert L. Berman...

  • Page 18
    ... for Kodak's digital cameras, picture frames, pocket video cameras, kiosks, imaging sensors, consumer inkjet printers, and KODAK Gallery - the company's online photo service. As Kodak's CMO, Mr. Jotwani is responsible for customer relationship management, brand management, business-to-business and...

  • Page 19
    ...-year career at Hewlett-Packard Company, where he was a corporate vice president and a member of the company's Executive Council. As President of HP's Consumer Business, Mr. Perez spearheaded the company's efforts to build a business in digital imaging and electronic publishing, generating worldwide...

  • Page 20
    ...OF EQUITY SECURITIES Eastman Kodak Company common stock is traded on the New York Stock Exchange under the symbol "EK." There were 51,347 shareholders of record of common stock as of January 31, 2011. Market Price Data 2010 Price per share: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter High $6.94...

  • Page 21
    ... during 2009 or 2010. Dividends may be restricted under the Company's debt agreements. Refer to Note 8, "Short-Term Borrowings and Long-Term Debt," in the Notes to Financial Statements. Performance Graph - Shareholder Return The following graph compares the performance of the Company's common stock...

  • Page 22
    ... the sale of products, technology, solutions and services to consumers, businesses and creative professionals. The Company's portfolio is broad, including image capture and output devices, consumables and systems and solutions for consumer, business, and commercial printing applications. Kodak has...

  • Page 23
    ..., have been aggregated into a single reporting unit. The Company's reporting units changed in 2010 as a result of organizational changes that became effective in the current year. Image Sensor Solutions (ISS) was a reporting unit in 2009. ISS no longer meets the definition of a component and...

  • Page 24
    ... 31, 2010 closing price), and ongoing declines in the FPEG business caused by digital substitution, the Company evaluated the long-lived assets of FPEG's film business and paper and output systems business for impairment, and updated its goodwill impairment analysis of the FPEG reporting unit as...

  • Page 25
    ... defined benefit pension and other postretirement benefit costs and obligations are dependent on the Company's key assumptions. These assumptions, which are reviewed at least annually by the Company, include the discount rate, long-term expected rate of return on plan assets ("EROA"), salary growth...

  • Page 26
    ... plans on high quality corporate bond yields in the respective countries as of the measurement date. Specifically, for its U.S. and Canadian plans, the Company determines a discount rate using a cash flow model to incorporate the expected timing of benefit payments and an AA-rated corporate...

  • Page 27
    ... packaging solutions. Digital Printing Solutions includes high-speed, high-volume commercial inkjet, and color and black-and-white electrophotographic printing equipment and related consumables and services. Business Services and Solutions includes workflow software and digital controllers, document...

  • Page 28
    ... OF OPERATIONS Net Sales from Continuing Operations by Reportable Segment and All Other (1) For the Year Ended December 31, Foreign Currency Impact 2009 Change (in millions) Consumer Digital Imaging Group Inside the U.S. Outside the U.S. Total Consumer Digital Imaging Group Graphic Communications...

  • Page 29
    ... expense Loss on early extinguishment of debt Other income (charges), net Loss from continuing operations before income taxes $ For the Year Ended December 31, Change 2009 Change +846% +38 -60 +100 +165 $ 35 (42) 159 (13) 139 (258) 88 3 (119) 30 -379% $ (117) +87% $ +120% -235 -19 +24 +321 $ 2010...

  • Page 30
    ..., % of 2009 Sales $ 7,606 5,838 1,768 1,302 356 226 (88) (dollars in millions) Net sales Cost of sales Gross profit Selling, general and administrative expenses Research and development costs Restructuring costs, rationalization and other Other operating expenses (income), net Loss from continuing...

  • Page 31
    ... of assets and businesses and certain impairment charges. The amount for 2010 primarily reflects a $626 million goodwill impairment charge related to the FPEG segment. The amount for 2009 primarily reflects a gain of approximately $100 million on the sale of assets of the Company's organic light...

  • Page 32
    ... includes interest income, income and losses from equity investments, and foreign exchange gains and losses. The decrease in other income (charges), net from 2008 to 2009 was primarily attributable to a decrease in interest income due to lower interest rates and lower cash balances in 2009 as...

  • Page 33
    Consumer Digital Imaging Group For the Year Ended December 31, % of 2009 Sales $ 2,619 1,955 664 483 146 $ 35 (dollars in millions) Total net sales Cost of sales Gross profit Selling, general and administrative expenses Research and development costs Earnings (loss) from continuing operations ...

  • Page 34
    ... within Digital Capture and Devices (-15%). Graphic Communications Group (dollars in millions) 2010 Total net sales Cost of sales Gross profit Selling, general and administrative expenses Research and development costs (Loss) earnings from continuing operations before interest expense, other income...

  • Page 35
    ..., including PROSPER S10 imprinting systems within Digital Printing Solutions; and document imaging scanners, including the introduction of the new Kodak i4000 Series Scanners within Business Services and Solutions. The decrease in GCG net sales from 2008 to 2009 reflected the impact of ongoing...

  • Page 36
    ...of the current economic climate on film makers, resulting in lower film production and the use of digital technology, as expected, and (3) industry shifts in film release strategies and distribution. Gross Profit The decrease in FPEG gross profit margin as a percentage of sales from 2009 to 2010 was...

  • Page 37
    ..., and $22 million that was applicable to manufacturing/service, research and development, and administrative functions, which are shared across all segments. The restructuring actions implemented in the year 2010 are expected to generate future annual cash savings of approximately $62 million. These...

  • Page 38
    ... related to the fourth quarter 2009 debt refinancing. Sources of Liquidity The Company believes that its current cash balance, combined with cash flows from operating activities, borrowings, and proceeds from sales of businesses and assets, will be sufficient to meet its anticipated needs in 2011...

  • Page 39
    ...the Company's strategy of divesting noncore assets. Refer to Note 8, "Short-Term Borrowings and Long-Term Debt," in the Notes to Financial Statements for further discussion of sources of liquidity, presentation of long-term debt, related maturities and interest rates as of December 31, 2010 and 2009...

  • Page 40
    ... workers' compensation claims, environmental liabilities, legal contingencies, rental payments, and to support various customs and trade activities. Refer to Note 8, "Short-Term Borrowings and Long-Term Debt," in the Notes to Financial Statements for additional information about the Company's credit...

  • Page 41
    ...of the Company's long-term debt obligations. See Note 8, "Short-Term Borrowings and LongTerm Debt," in the Notes to Financial Statements. Purchase obligations include agreements related to raw materials, supplies, production and administrative services, as well as marketing and advertising, that are...

  • Page 42
    ... of Financial Position. The Company issues indemnifications in certain instances when it sells businesses and real estate, and in the ordinary course of business with its customers, suppliers, service providers and business partners. Further, the Company indemnifies its directors and officers who...

  • Page 43
    ... and increased cash proceeds received from sales of assets and businesses of $64 million, primarily from the sale of assets of the Company's OLED group. Financing Activities Net cash provided by financing activities increased $779 million for the year ended December 31, 2009 as compared with...

  • Page 44
    ... 31, 2010, and in other filings the Company makes with the SEC from time to time: • Continued weakness or worsening of economic conditions which could continue to adversely impact our financial performance and our liquidity; • Whether we are successful with the strategic investment decisions we...

  • Page 45
    ... to mitigate the Company's risk to fluctuating silver prices. The Company's exposure to changes in interest rates results from its investing and borrowing activities used to meet its liquidity needs. Long-term debt is generally used to finance long-term investments, while short-term debt is used to...

  • Page 46
    ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of Eastman Kodak Company: In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in ...

  • Page 47
    Eastman Kodak Company CONSOLIDATED STATEMENT OF OPERATIONS (in millions, except per share data) Net sales Products Services Licensing & royalties Total net sales Cost of sales Products Services Total cost of sales Gross profit Selling, general and administrative expenses Research and development ...

  • Page 48
    ...outstanding as of December 31, 2010 and 2009 Additional paid in capital Retained earnings Accumulated other comprehensive loss Treasury stock, at cost; 122,393,782 shares as of December 31, 2010 and 122,662,246 shares as of December 31, 2009 Total Eastman Kodak Company shareholders' (deficit) equity...

  • Page 49
    ..., except share and per share data) Eastman Kodak Company Shareholders Accumulated Additional Other Paid In Retained Comprehensive Treasury Capital Earnings (Loss) Income Stock $ 889 $ 6,498 (442) $ 453 $ Common Stock (1) Equity (deficit) as of December 31, 2007 $ Net loss Equity transactions with...

  • Page 50
    Eastman Kodak Company CONSOLIDATED STATEMENT OF EQUITY (DEFICIT) continued (in millions, except share and per share data) Eastman Kodak Company Shareholders Accumulated Additional Other Common Paid In Retained Comprehensive Treasury Stock (1) Capital Earnings (Loss) Income Stock Equity (deficit) as ...

  • Page 51
    ... STATEMENT OF EQUITY (DEFICIT) continued (in millions, except share and per share data) Eastman Kodak Company Shareholders Accumulated Additional Other Common Paid In Retained Comprehensive Treasury Stock (1) Capital Earnings (Loss) Income Stock Equity (deficit) as of December 31, 2009 $ Net loss...

  • Page 52
    ... items, net of income taxes Depreciation and amortization Gain on sales of businesses/assets Loss on early extinguishment of debt, net Non-cash restructuring and rationalization costs, asset impairments and other charges (Benefit) provision for deferred income taxes Decrease in receivables...

  • Page 53
    ...Issuance of unvested stock, net of forfeitures (1) Includes payments related to discontinued operations. $ 451 $ 1,027 4 $ 1,105 2 1 For the Year Ended December 31, 2010 2009 2008 $ 115 197 $ 70 225 $ 85 145 The accompanying notes are an integral part of these consolidated financial statements. 51

  • Page 54
    ... variety of industries, markets, and geographies around the world. Receivables arising from these sales are generally not collateralized. The Company performs ongoing credit evaluations of its customers' financial conditions, and maintains reserves for potential credit losses and such losses, in the...

  • Page 55
    ... of net assets acquired. Goodwill is not amortized, but is required to be assessed for impairment at least annually. The Company has elected September 30 as the annual impairment assessment date for all of its reporting units, and will perform additional impairment tests when events or changes in...

  • Page 56
    ... Statement of Operations. Advertising expenses amounted to $301 million, $271 million, and $350 million for the years ended December 31, 2010, 2009, and 2008, respectively. Shipping and Handling Costs Amounts charged to customers and costs incurred by the Company related to shipping and handling...

  • Page 57
    ...Income Taxes." Earnings Per Share Basic earnings per share computations are based on the weighted-average number of shares of common stock outstanding during the year. As a result of the net loss from continuing operations presented for the years ended December 31, 2010, 2009, and 2008, the Company...

  • Page 58
    ... an entity's first annual reporting period that begins after November 15, 2009 (January 1, 2010 for the Company). The adoption of this guidance did not have a significant impact on the Company's Consolidated Financial Statements. Recently Issued Accounting Pronouncements In December 2010, the FASB...

  • Page 59
    ... of December 31, 2010 and 2009, respectively, are expected to be settled through customer deductions in lieu of cash payments. Such deductions represent rebates owed to the customer and are included in Other current liabilities in the accompanying Consolidated Statement of Financial Position at each...

  • Page 60
    ... 31, 2010 and 2009, respectively. The changes in the carrying amount of goodwill by reportable segment for 2010 and 2009 were as follows: Consumer Digital Imaging Group Film, Photofinishing and Entertainment Group (in millions) Balance as of December 31, 2008: Goodwill Accumulated impairment losses...

  • Page 61
    ... for the years ended December 31, 2010, 2009, and 2008, respectively. Estimated future amortization expense related to purchased intangible assets as of December 31, 2010 was as follows (in millions): 2011 2012 2013 2014 2015 2016+ Total $ 39 26 13 10 10 26 124 $ NOTE 6: OTHER LONG-TERM ASSETS (in...

  • Page 62
    ... The Company's current portion of long-term debt was $50 million and $62 million as of December 31, 2010 and 2009, respectively. There were no amounts outstanding under short-term bank borrowings as of December 31, 2010 and 2009. Long-Term Debt, Including Lines of Credit Long-term debt and related...

  • Page 63
    ...days after the closing of the related equity offering and not less than 65% of the original aggregate principal remains outstanding immediately thereafter. Upon the occurrence of a change of control, each holder of the 2018 Senior Secured Notes has the right to require the Company to repurchase some...

  • Page 64
    ...change in ownership, consolidation or merger, plan of dissolution, or common stock delisting from a U.S. national securities exchange. The Company may redeem the 2017 Convertible Notes in whole or in part for cash at any time on or after October 1, 2014 and before October 1, 2016 if the closing sale...

  • Page 65
    ... advances made from time to time will bear interest at applicable margins over the Base Rate, as defined, or the Eurodollar Rate. The Company pays, on a quarterly basis, an annual fee ranging from 0.50% to 1.00% to the Lenders based on the unused commitments. Under the terms of the Amended Credit...

  • Page 66
    ... market conditions. As of December 31, 2010, usage under these lines was approximately $51 million all of which were supporting non-debt related obligations. NOTE 9: OTHER LONG-TERM LIABILITIES (in millions) Non-current tax-related liabilities Environmental liabilities Asset retirement obligations...

  • Page 67
    ... long-term liabilities in the accompanying Consolidated Statement of Financial Position. The Company is currently implementing a Corrective Action Program required by the Resource Conservation and Recovery Act ("RCRA") at Eastman Business Park (formerly known as Kodak Park) in Rochester, NY. The...

  • Page 68
    ... 31, 2010 and 2009, the Company has recorded approximately $57 million and $62 million, respectively, of asset retirement obligations within Other long-term liabilities in the accompanying Consolidated Statement of Financial Position. The Company's asset retirement obligations primarily relate to...

  • Page 69
    ... the Short-term borrowings and current portion of long-term debt, and Long-term debt, net of current portion components in the accompanying Consolidated Statement of Financial Position. These guarantees expire in 2010 through 2019. Pursuant to the terms of the Company's Amended Credit Agreement...

  • Page 70
    ... liability at the time of sale. The Company estimates its warranty cost at the point of sale for a given product based on historical failure rates and related costs to repair. The change in the Company's accrued warranty obligations balance, which is reflected in Other current liabilities in the...

  • Page 71
    ... value of the current portion of long-term debt, which is not shown in the table above, approximates its fair value as of December 31, 2010 and 2009. The Company does not utilize financial instruments for trading or other speculative purposes. Fair Value The fair values of marketable securities are...

  • Page 72
    ... reported in the Consolidated Statement of Operations are shown in the following tables: Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) For the Year Ended December 31, 2010 2009 2008 Derivatives in Cash Flow Hedging Relationships...

  • Page 73
    ... purchases through March 2011. NOTE 13: OTHER OPERATING EXPENSES (INCOME), NET (in millions) Expenses (income): Goodwill impairments (1) Long-lived asset impairments Gains related to the sales of assets and businesses (2) Other Total (1) (2) For the Year Ended December 31, 2010 2009 2008 $ $ 626...

  • Page 74
    ...), NET (in millions) Income (charges): Interest income (Loss) gain on foreign exchange transactions Support for an educational institution Legal settlements Gain on sale of investee MUTEC equity method investment impairment Other Total For the Year Ended December 31, 2010 2009 2008 $ $ 11 (5) 10...

  • Page 75
    ... on those deferred tax assets. In June 2008, the Company received a tax refund from the U.S. Internal Revenue Service ("IRS") of $581 million. The refund is related to the audit of certain claims filed for tax years 1993-1998, and is composed of a refund of past federal income taxes paid of $306...

  • Page 76
    ... Statement of Financial Position: As of December 31, 2010 2009 $ 120 695 (7) (8) 800 $ 121 607 (11) 717 (in millions) Deferred income taxes (current) Other long-term assets Accrued income taxes Other long-term liabilities Net deferred tax assets $ $ As of December 31, 2010, the Company...

  • Page 77
    ...Accounting for Uncertainty in Income Taxes A reconciliation of the beginning and ending amount of the Company's liability for income taxes associated with unrecognized tax benefits is as follows: (in millions) Balance as of January 1 Tax positions related to the current year: Additions Tax positions...

  • Page 78
    ...long-term assets in the Consolidated Statement of Financial Position, partially offset by foreign currency translation adjustments. Severance reserve activity includes charges of $49 million. During the year ended December 31, 2010, the Company made cash payments of approximately $88 million related...

  • Page 79
    ... million of severance related charges for pension plan curtailments, settlements, and special termination benefits, which are reflected in Pension and other postretirement liabilities and Other long-term assets in the Consolidated Statement of Financial Position. (10) The Company expects to utilize...

  • Page 80
    ... 1, 2000. The Cash Balance plan credits employees' accounts with an amount equal to 4% of their pay, plus interest based on the 30-year treasury bond rate. In addition, for employees participating in the Cash Balance plan and the Company's defined contribution plan, the Savings and Investment Plan...

  • Page 81
    ...Social Security retirement age. The legislative change requires the minimum retirement age be extended up to 2 years, phasing in at a rate of 4 months per year until 2018. This amendment increased the projected benefit obligation in 2010 by $33 million, which is reflected in the plan amendments line...

  • Page 82
    ...in millions) U.S. Prior service cost (credit) Net actuarial loss Total $ $ 7 1,790 1,797 2010 Non-U.S. $ $ 38 1,423 1,461 $ $ U.S. 8 1,509 1,517 $ $ 2009 Non-U.S. (3) 1,406 1,403 Changes in plan assets and benefit obligations recognized in other comprehensive income (loss) during 2010 for all major...

  • Page 83
    ... net pension (income) expense for all the major funded and unfunded U.S. and Non-U.S. defined benefit plans were as follows: For the Year Ended December 31, 2009 U.S. Non-U.S. 6.76% 3.99% 8.49% 5.90% 3.45% 7.30% 2010 U.S. Non-U.S. Discount rate Salary increase rate Expected long-term rate of return...

  • Page 84
    ... long-term liabilities, and maintaining sufficient liquidity to pay current benefits and other cash obligations of the plans. This is primarily achieved by investing in a broad portfolio constructed of various asset classes including equity and equity-like investments, debt and debt-like investments...

  • Page 85
    ... Plans December 31, 2010 Quoted Prices in Active Markets for Identical Assets (Level 1) $ 436 - (in millions) Cash and cash equivalents Equity Securities Debt Securities: Government Bonds Inflation-Linked Bonds Investment Grade Bonds Global High Yield & Emerging Market Debt Other: Absolute Return...

  • Page 86
    ... pension plans, equity investments are invested broadly in U.S. equity, developed international equity, and emerging markets. Fixed income investments are comprised primarily of long duration U.S. Treasuries and global government bonds, as well as U.S. and emerging market companies' debt securities...

  • Page 87
    ... Plans December 31, 2010 Quoted Prices in Active Markets for Identical Assets (Level 1) $ 77 1 78 (in millions) Cash and cash equivalents Equity securities Debt securities: Government Bonds Inflation-Linked Bonds Investment Grade Bonds Global High Yield & Emerging Market Debt Other: Absolute Return...

  • Page 88
    ... benefit pension plans, equity investments are invested broadly in local equity, developed international and emerging markets. Fixed income investments are comprised primarily of long duration government and corporate bonds with some emerging market debt. Real estate investments include investments...

  • Page 89
    ... portfolio of hedge funds using equity, debt, commodity, and currency strategies. Of the investments shown in the major Non-U.S. plans table as of December 31, 2010 above, 6% and 11% of the total Non-U.S. assets reported within equity securities and government bonds, respectively, are reflective of...

  • Page 90
    ...the United Kingdom and Canada offer similar postretirement benefits. On August 1, 2008, the Company adopted and announced certain changes to its U.S. postretirement benefit plan affecting its postSeptember 1991 retirees beginning January 1, 2009. For affected participants, the terms of the amendment...

  • Page 91
    ..., and Canada plans consisted of: (in millions) Prior service credit Net actuarial loss $ $ As of December 31, 2010 2009 829 (535) 294 $ $ 875 (468) 407 Changes in benefit obligations recognized in other comprehensive loss during 2010 for the Company's U.S., United Kingdom, and Canada plans follows...

  • Page 92
    ... million for the year ended December 31, 2008 was a $79 million curtailment gain related to changes to the Company's U.S. postretirement benefit plan affecting its post-September 1991 retirees beginning January 1, 2009, as discussed above. The prior service credit and net actuarial loss estimated to...

  • Page 93
    ... stock and performance awards during the years ended December 31, 2010, 2009 and 2008 was $17 million, $15 million and $8 million, respectively. The Company's stock incentive plans consist of the 2005 Omnibus Long-Term Compensation Plan (the "2005 Plan"), the 2000 Omnibus Long-Term Compensation Plan...

  • Page 94
    ... stock, performance awards, and SARs, either in tandem with options or freestanding. As of December 31, 2010, 27,527 freestanding SARs were outstanding under the 2000 Plan at option prices ranging from $23.25 to $40.97. Compensation expense recognized for the years ended December 31, 2010, 2009...

  • Page 95
    ... to enhance global access to service and support for channel partners and end-user customers worldwide. This acquisition was immaterial to the Company's financial position as of December 31, 2009, and its results of operations and cash flows for the year ended December 31, 2009. 2008 On April...

  • Page 96
    ... digital still and video cameras, digital devices such as picture frames, kiosks, APEX drylab systems, and related consumables and services, consumer inkjet printing systems, Kodak Gallery products and services, and imaging sensors. CDG also includes the licensing activities related to the Company...

  • Page 97
    ... total assets: Consumer Digital Imaging Group Graphic Communications Group Film, Photofinishing and Entertainment Group Total of reportable segments Cash and marketable securities Deferred income tax assets All Other/corporate items Consolidated total assets 2010 As of December 31, 2009 2008...

  • Page 98
    ...external customers attributed to (1): The United States Europe, Middle East and Africa Asia Pacific Canada and Latin America Foreign countries total Consolidated total (1) Sales are reported in the geographic area in which they originate. For the Year Ended December 31, 2010 2009 2008 $ $ 58 2 60...

  • Page 99
    ...Kodak Company common shareholders (11) Continuing operations Discontinued operations Total Diluted net (loss) earnings per share attributable to Eastman Kodak Company common shareholders (11) Continuing operations Discontinued operations Total 2009 Net sales from continuing operations Gross profit...60...

  • Page 100
    ... Item," in the Notes to Financial Statements. (11) Each quarter is calculated as a discrete period and the sum of the four quarters may not equal the full year amount. The Company's diluted net earnings (loss) per share in the above table may include the effect of convertible debt instruments. 98

  • Page 101
    ... Cash dividends declared and paid - on common shares - per ommon share Common shares outstanding at year end Shareholders at year end Statement of Financial Position Data Working capital Property, plant and equipment, net Total assets Short-term borrowings and current portion of long-term debt Long...

  • Page 102
    Eastman Kodak Company SUMMARY OF OPERATING DATA - UNAUDITED continued (in millions, except per share data, shareholders, and employees) 2010 Supplemental Information Net sales from continuing operations - CDG $ 2,739 - GCG 2,681 - FPEG 1,767 - All Other Research and development costs 321 ...

  • Page 103
    ... filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including the Company's Chief Executive Officer and Chief Financial...

  • Page 104
    ..., EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by Item 10 regarding directors is incorporated by reference from the information under the caption "Board Structure and Corporate Governance - Board of Directors" in the Company's Notice of 2010 Annual Meeting and Proxy Statement...

  • Page 105
    ... 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...

  • Page 106
    ... - Valuation and qualifying accounts All other schedules have been omitted because they are not applicable or the information required is shown in the financial statements or notes thereto. 3. Additional data required to be furnished: Exhibits required as part of this report are listed in the index...

  • Page 107
    ... by the undersigned, thereunto duly authorized. EASTMAN KODAK COMPANY (Registrant) By: /s/ Antonio M. Perez Antonio M. Perez Chairman & Chief Executive Officer February 25, 2011 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following...

  • Page 108
    ... By: /s/ William G. Parrett William G. Parrett By: /s/ Joel Seligman Joel Seligman By: /s/ Dennis F. Strigl Dennis F. Strigl By: /s/ Laura D'Andrea Tyson Laura D'Andrea Tyson Date: February 25, 2011 Director Director Director Director Director Director Director Director 106

  • Page 109
    ... Balance at End of Period (in millions) Year ended December 31, 2010 Deducted in the Statement of Financial Position: From Current Receivables: Reserve for doubtful accounts Reserve for loss on returns and allowances Total From Deferred Tax Assets: Valuation allowance Year ended December 31, 2009...

  • Page 110
    ... the Eastman Kodak Company Current Report on Form 8-K for the date September 17, 2009, as filed on September 18, 2009, Exhibit 10.1.) Amendment No. 2 to the Amended and Restated Credit Agreement, dated as of February 10, 2010, among Eastman Kodak Company, Kodak Canada Inc., the lenders party thereto...

  • Page 111
    ... as of March 31, 2009, from the grantors party thereto to Citicorp USA, Inc. (Incorporated by reference to the Eastman Kodak Company Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2010, as filed on April 29, 2010, Exhibit 4.9 b.) Canadian Security Agreement, dated October 18...

  • Page 112
    ... to the Eastman Kodak Company Notice of 2010 Annual Meeting and Proxy Statement, Exhibit I.) Form of Notice of Award of Non-Qualified Stock Options pursuant to the 2005 Omnibus Long-Term Compensation Plan. (Incorporated by reference to the Eastman Kodak Company Current Report on Form 8-K, filed on...

  • Page 113
    ... reference to the Eastman Kodak Company Annual Report on Form 10-K for the fiscal year ended December 31, 2004, Exhibit 10.) (10.19) Administrative Guide for the 2004-2005 Performance Cycle of the Leadership Program under Article 12 of the 2000 Omnibus Long-Term Compensation Plan, as amended January...

  • Page 114
    ... Members). (Incorporated by reference to the Eastman Kodak Company Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009.) Administrative Guide For September 28, 2009 Restricted Stock Unit (RSU) Grant under the 2005 Omnibus Long-Term Compensation Plan (Hold Until Retirement...

  • Page 115
    ...Oxley Act of 2002. XBRL Taxonomy Extension Calculation Linkbase...Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement of prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act...

  • Page 116
    ...Loss from continuing operations before provision for income taxes Adjustments: Undistributed (earnings) loss of equity... (1) Capitalized interest Total fixed charges Ratio of earnings to fixed charges (1 2010 2009 Year Ended December 31 2008 2007 2006 $ (561) $ (117) $ (874) $ (257) $ ...

  • Page 117
    ... Eastman Kodak Sarl Kodak Brasileira Comercio de Produtos para Imagem e Servicos Ltda. Kodak Nederland B.V. Kodak (Hong Kong) Limited Kodak (China) Limited Kodak (China) Investment Company Ltd. Brazil Netherlands Hong Kong Hong Kong China Organized Under Laws of New Jersey California Delaware Canada...

  • Page 118
    ... Kodak Information Systems Kodak Digital Product Center, Japan Ltd. Kodak Electronic Products (Shanghai) Company Limited Kodak (China) Company Limited Kodak (China) Graphic Communications Company Ltd. Kodak (Wuxi) Company Limited Kodak (Xiamen) Company Limited Kodak (Shanghai) International Trading...

  • Page 119
    ... and No. 333-57729) of Eastman Kodak Company of our report dated February 24, 2011 relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Annual Report on Form 10-K. /s/ PricewaterhouseCoopers LLP...

  • Page 120
    ... control over financial reporting; and The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing...

  • Page 121
    ... control over financial reporting; and The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing...

  • Page 122
    ... with the Annual Report of Eastman Kodak Company (the "Company") on Form 10-K for the period ended December 31, 2010 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Antonio M. Perez, Chairman and Chief Executive Officer of the Company, certify, pursuant...

  • Page 123
    ... ACT OF 2002 In connection with the Annual Report of Eastman Kodak Company (the "Company") on Form 10-K for the period ended December 31, 2010 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Antoinette P. McCorvey, Chief Financial Officer of the Company...

  • Page 124
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  • Page 125
    NOTICE OF 2011 ANNUAL MEETING AND PROXY STATEMENT NOTICE OF 2011 ANNUAL MEETING AND PROXY STATEMENT Date of Notice March 31, 2011 EASTMAN KODAK COMPANY 343 STATE STREET ROCHESTER, NEW YORK 14650

  • Page 126
    ... in 2010 Outstanding Equity Awards at 2010 Fiscal Year-End Option Exercises and Stock Vested Pension Benefits for 2010 Individual Supplemental Retirement Arrangements Non-Qualified Deferred Compensation for 2010 Termination and Change in Control Arrangements BOARD STRUCTURE AND CORPORATE GOVERNANCE...

  • Page 127
    ... contact: Shareholder Services, Eastman Kodak Company, 343 State Street, Rochester, NY 14650-0218, 1-585-724-5492, e-mail: [email protected]. The Annual Meeting will be accessible by the handicapped. If you require special assistance, contact Shareholder Services. By Order of the Board...

  • Page 128
    ... include: • Our 2010 Annual Report on Form 10-K; and • Notice of 2011 Annual Meeting and Proxy Statement. If you received printed versions of the proxy materials by mail, these proxy materials also include the Proxy Card for the Annual Meeting. Q. What am I voting on? A. The Board is soliciting...

  • Page 129
    ....com/ek; or • E-mail at [email protected]. Reference "Proxy Materials Order" on the subject line. In the message, include your full name, address, and the number located in the shaded bar on the Notice, and state that you want to receive a paper copy of current and/or future meeting...

  • Page 130
    ... vote your Kodak shares, the records of the Company must show that you held your shares as of the close of business on March 14, 2011, the record date for the Annual Meeting. Each share of common stock is entitled to one vote. Q. How can I change my vote or revoke my proxy? A. Shareholder of Record...

  • Page 131
    ... votes on executive compensation and the shareholder voting on executive compensation. Q. Is my vote confidential? A. Yes. Only the inspectors of election and certain individuals who help with processing and counting the votes have access to your vote. Directors and employees of the Company may see...

  • Page 132
    ...executive offices. Our By-laws can also be accessed at www.kodak.com/go/governance. For purposes of summarizing this procedure, we have assumed: 1) the date of the upcoming Annual Meeting is within 30 days of the anniversary of the annual meeting for the previous year and 2) if the size of the Board...

  • Page 133
    ... printed copies of any of these documents by contacting: Shareholder Services Eastman Kodak Company 343 State Street Rochester, NY 14650-0218 1-585-724-5492 E-mail: [email protected] The address of our principal executive office is: Eastman Kodak Company 343 State Street Rochester, NY...

  • Page 134
    ... your request, a printed copy of its 2010 Annual Report on Form 10-K. To receive a printed copy of the 2010 Annual Report on Form 10-K, please contact: Shareholder Services Eastman Kodak Company 343 State Street Rochester, NY 14650-0218 1-585-724-5492 E-mail: [email protected] 8

  • Page 135
    ..., that the shareholders approve the compensation of Eastman Kodak Company's Named Executive Officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission in the Company's Proxy Statement for the 2011 Annual Meeting of Shareholders (which disclosure...

  • Page 136
    ... strategic plan and achieve annual and long-term performance goals necessary to create shareholder value. Our compensation strategy is to provide opportunities to reward our executives when they deliver defined performance results that are based on the business strategy of the Company. Through stock...

  • Page 137
    ... at www.kodak.com/go/directors. BUSINESS CONDUCT GUIDE AND DIRECTORS' CODE OF CONDUCT The reputation of our Company and our brand has been built by more than a century of ethical business conduct. All of our employees, including the Chief Executive Officer (CEO), the Chief Financial Officer (CFO...

  • Page 138
    ... an immediate family member of another Section 16 Executive Officer or a director of our Company and the related compensation would be reported in our proxy statement if the Section 16 Executive Officer was a "Named Executive Officer" and our Executive Compensation and Development Committee approved...

  • Page 139
    ..., digital technologies, public policy, economics, executive compensation, risk management, international operations, corporate governance and internal controls, each of which are important areas of responsibility for the Board and its Committees. In addition, as set forth in the Board's Director...

  • Page 140
    ...As a consequence of the various positions he has held, Mr. Chen has expertise in corporate finance, mergers and acquisitions, strategic business planning, executive compensation, digital technologies, risk management and corporate governance. Through his background in private equity, Mr. Chen brings...

  • Page 141
    ...Inc, a lighting systems technology firm, until 2007. Key Experience, Skills and other Qualifications: Dr. Hawley brings to the Board skills and experience in the field of digital media technology which is directly relevant to the Company's digital imaging products and our research and development in...

  • Page 142
    ..., marketing, operations, strategic planning and risk management. In addition, through his service on public company boards, Mr. Lewis has developed skills in the areas of corporate governance and executive compensation. WILLIAM G. PARRETT Director since November 2007 Mr. Parrett, 65, is a retired...

  • Page 143
    ... on Uniform State Laws, Revision of Uniform Securities Act; as chair of the Securities and Exchange Commission Advisory Committee on Market Information; and as a member of the American Institute of Certified Public Accountants Professional Ethics Executive Committee. He was a member of the board of...

  • Page 144
    ... acquisitions, risk management and strategic planning, with a particular emphasis on digital technologies that are relevant to the business of the Company. Mr. Strigl also has broad experience in corporate finance, marketing and executive compensation. Mr. Strigl's service on other boards has also...

  • Page 145
    ... systems of disclosure controls and procedures and internal controls over financial reporting; and the performance of the Company's internal auditors. A detailed list of the Audit Committee's functions is included in its charter, which can be accessed at www.kodak.com/go/committees. In the past year...

  • Page 146
    ... plans; • Determined not to award equity grants to executives under the annual long-term incentive compensation program during 2010, consistent with the intention described in the 2010 proxy statement; • Revised the Board's policy concerning our CEO's use of corporate aircraft for personal...

  • Page 147
    ... the Compensation Committee on target allocation levels for each Named Executive Officer for the upcoming performance year, with the exception of target allocation levels for the CEO. The performance targets of the Company's long-term equity incentive compensation plans for the new performance cycle...

  • Page 148
    ... authorized to exercise all of the powers of the Board in the intervals between meetings of the Board. The Executive Committee's charter can be accessed at www.kodak.com/go/committees. 2010 COMMITTEE MEMBERSHIP Director Name Richard S. Braddock Herald Y. Chen Adam H. Clammer Timothy M. Donahue...

  • Page 149
    ... so by providing the following information, in writing, to the Governance Committee, c/o Secretary, Eastman Kodak Company, 343 State Street, Rochester, NY 146500218: 1) the name, address and telephone number of the shareholder making the request; 2) the number of shares of the Company owned, and, if...

  • Page 150
    ..."Director Selection Process." The Director Selection Process is attached as Exhibit III to this Proxy Statement and can also be accessed at www.kodak.com/go/directors. The Governance Committee generally uses the services of a third-party executive search firm when identifying and evaluating possible...

  • Page 151
    ... Policy. Risk Management Our Board oversees an enterprise-wide approach to risk management, designed to support the achievement of the Company's objectives, including strategic objectives, to improve long-term performance and enhance shareholder value. A fundamental part of risk management is not...

  • Page 152
    ... year. The methodology used to convert the dollar-denominated value of equity awards to the actual amount of equity is the same as that used for management. Directors can elect to have their cash Board retainer paid in stock or deferred into the Directors' Deferred Compensation Plan. The Committee...

  • Page 153
    ... R. Lebda (2) In order to align with the change in timing of annual equity awards to management, in 2010, the Governance Committee approved a change in the timing of equity grants to directors. Effective in 2011, directors receive their annual equity grants in February of each year, rather than in...

  • Page 154
    ...,840 16,670 21,270 28,340 following table reports the outstanding Stock Option awards held by each of the non-employee directors at the end of fiscal year 2010: Aggregate Stock Options Outstanding at Fiscal Year End Name Richard S. Braddock Herald Y. Chen Adam H. Clammer Timothy M. Donahue Michael...

  • Page 155
    ... accounts will generally be paid in a single cash payment. The plan's benefits are neither funded nor secured. Other Benefits The Company reimburses its directors for travel expenses incurred in connection with attending Board, Committee and shareholder meetings and other Board business events...

  • Page 156
    ... 5% OF THE COMPANY'S COMMON SHARES The following table sets forth information from filings with the SEC under Sections 13(d) and 13(g) of the Securities Exchange Act of 1934, as amended, as to each person or group who beneficially owns more than 5% of our outstanding common shares: Number of Common...

  • Page 157
    ...The above table reports beneficial ownership of the Company's common stock in accordance with the applicable SEC rules. All Company securities over which the director nominees and Section 16 Executive Officers directly or indirectly have or share voting or investment power are listed as beneficially...

  • Page 158
    ... rights and may not be redeemed as shares of common stock within 6 months of Mr. Perez's departure from the Company. Mr. Parrett has 2,000 shares that have been pledged as security. Each individual Section 16 Executive Officer and director listed beneficially owned less than 1% of the outstanding...

  • Page 159
    ...by the Board, most recently amended on February 17, 2004. The Committee reviews and approves the charter annually. A copy of the Audit Committee's charter can be found on our website at www.kodak.com/go/committees. Management is responsible for the Company's internal control over financial reporting...

  • Page 160
    ... governance listing standards. During 2010, the Governance Committee met eight times and routinely reported its activities to the full Board. The Governance Committee acts pursuant to a written charter which can be accessed electronically in the "Corporate Governance" section at www.kodak.com/go...

  • Page 161
    ... the Board's processes for reviewing the Company's plans for succession planning and executive development. A copy of the amended Governance Guidelines is published on our website at www.kodak.com/go/directors. Director Independence The Governance Committee assessed each non-management director...

  • Page 162
    ...performance-based compensation to support the business strategy of the Company. The portion of compensation of our Named Executive Officers' annual target total direct compensation that is variable and based upon performance and stock price appreciation ranges from 69% to 87%. In 2010, the Committee...

  • Page 163
    ... in Awarding 2010 Performance-Based Compensation The Committee's decision regarding the 2010 EXCEL award for our Named Executive Officers directly reflected the Company's philosophy that performance-based incentives are conditioned upon the achievement of results that further the long-term business...

  • Page 164
    ...: 1) base salary; 2) annual variable pay; 3) long-term equity incentives; and 4) indirect compensation elements that include limited perquisites, retirement, severance, and change in control arrangements. Our Named Executive Officers are also eligible to participate in the benefit plans and programs...

  • Page 165
    ... when setting annual target total direct compensation levels for our Named Executive Officers. The Committee does, however, consider equity awards granted in past years to evaluate the relative value of the Company's long-term equity incentives and as an input to the annual mix of long-term equity...

  • Page 166
    ...this process for 2010 performance. This review provides input for the Committee's potential exercise of discretion associated with Mr. Perez's EXCEL award, as well as target annual equity grants. ELEMENTS OF TOTAL DIRECT COMPENSATION Base Salaries Base salaries provide a regular source of income to...

  • Page 167
    ...annual variable cash incentive opportunity to drive annual performance aligned to success in our business strategy. EXCEL is structured to comply with the "performance-based" compensation requirements of Section 162(m) so that the Company may deduct cash incentives payable under the plan. Executives...

  • Page 168
    ... Named Executive Officers. The Committee also established baseline metrics that it derived from key strategic and operational imperatives. The baseline metrics, goals and 2010 results were as follows: Baseline Metrics Maintain worldwide market share position for Production and Distributed scanners...

  • Page 169
    ... goal shared at our February 2010 Investor Meeting. This goal was consistent with our business strategy and reflected continued investment in our four digital growth product lines. The Committee established a threshold of -$350M to ensure a year-end cash balance of $1.5 billion after debt payments...

  • Page 170
    ... The Committee did not award an annual equity grant to any executive in fiscal year 2010. This decision was consistent with the intent disclosed in the Company's 2010 proxy statement. The Committee plans to resume annual grants in 2011. CEO 2010 Performance Share Plan Design and Performance Results...

  • Page 171
    ...in the Section 16 Officer's account under Kodak's Employee Stock Ownership Plan or Savings and Investment Plan, any "phantom stock" selected by a Section 16 Officer as an investment option in the Executive Deferred Compensation Plan, and shares owned directly by the Section 16 Officer and his or her...

  • Page 172
    ... Internal Revenue Code. Section 162(m) provides that the Company may not deduct compensation of more than $1 million paid to our CEO and the three other most highly compensated Named Executive Officers employed at year-end (other than the CFO), other than "performance-based" compensation that meets...

  • Page 173
    ... executives with the exception of the CEO. Named Executive Officers have access to the Company's consumer products and services. The compensation attributed to our Named Executive Officers for 2010 for perquisites is included in the Summary Compensation Table on pages 49 - 51 of this Proxy Statement...

  • Page 174
    ... to protect our Named Executive Officers against possible loss of benefits after a change in control. The terms of the Executive Protection Plan and the treatment of any benefits after a change in control under the Company's retirement and welfare plans, deferred compensation plan, EXCEL, and equity...

  • Page 175
    ...assumptions used to calculate the values of the awards are the same as those used for our stock-based compensation disclosure in Note 20 to our financial statements in our Annual Report on Form 10-K for the year ended December 31, 2010, as filed with the SEC on February 25, 2011. The following table...

  • Page 176
    ... the 20% of target award payment in 2010, see "2010 EXCEL Design and Performance Results" on page 42 of this Proxy Statement. Named Executive Officers did not receive any non-equity incentive compensation for 2008 because no EXCEL awards were earned. This column reports the aggregate change in the...

  • Page 177
    ... of home security services for all Named Executive Officers other than Mr. Perez was discontinued after January 2009. The incremental cost to the Company for personal use of Company aircraft is calculated based on the direct operating costs to the Company, including fuel costs, FBO handling and...

  • Page 178
    ... Named Executive Officer's employment or retention arrangements with the Company are described below. The levels of salary, annual variable incentive compensation and long-term incentive compensation, as well as the material considerations that the Committee takes into account in establishing target...

  • Page 179
    ... were made in 2010 that are shown in the following table include the Company's annual variable pay plan (EXCEL), and the 2005 Omnibus Long-Term Compensation Plan. Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) Award Description Grant Date Threshold ($) - Name Target ($) Max...

  • Page 180
    ... • Capital expenditures Year-over-Year Digital Revenue Growth Year-over-year growth is defined as the percent change in total combined segment net revenue, as reported, for the full year 2010 of Consumer Digital Imaging Group and Graphic Communications Group versus full year 2009. In the event of...

  • Page 181
    ... the target will be adjusted to remove the divested or repositioned business' earnings or losses from the date of divestiture through year-end, based on the Company's Annual Commitment Plan. All shares earned under the CEO Performance Share Plan are granted under the Company's 2005 Omnibus Long-Term...

  • Page 182
    OUTSTANDING EQUITY AWARDS AT 2010 FISCAL YEAR-END TABLE(1) The following table sets forth additional information concerning option awards and stock awards held by Named Executive Officers as of December 31, 2010, including awards granted during 2010 and described in the Grants of Plan-Based Awards ...

  • Page 183
    ...the 2009 Leadership Stock award held by our Named Executive Officers; it also includes the 2010 performance stock award for Mr. Perez under the 2009 amendment to his individual letter agreement. The market value of shares, units or other rights that have not vested was calculated using a stock price...

  • Page 184
    ... of the Named Executive Officers exercised stock options in 2010. This column represents the value of restricted stock and RSUs (including dividend equivalents) that vested during 2010. All awards represented in this column were valued using a stock price equal to the closing price on the vesting...

  • Page 185
    ... to the Company's Form 10-K for the year ended December 31, 2010. The present value has been calculated for all Named Executive Officers, with the exception of Ms. Haag, assuming they will remain in service until the normal retirement age of 65, and that the benefit is payable as a lump sum. The...

  • Page 186
    ... of employment. Participating compensation 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...

  • Page 187
    ... credit for each month of employment. Mr. Perez's supplemental retirement benefit will be offset by his cash balance benefit under KRIP and KURIP, and any Company matching contributions contributed to his account under SIP. Mr. Perez will receive his supplemental retirement benefit in a lump sum...

  • Page 188
    ... and its administrative cost. Prior to 2009, the Committee had made annual decisions to freeze the receipt of new monies in both 2007 and 2008. The plan's benefits are neither funded nor secured. After the period of fixed deferment, any account balance may be paid in a cash lump-sum payment as soon...

  • Page 189
    ... separation events. 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. At the time of separation of a Named Executive Officer, the Committee may approve severance terms that...

  • Page 190
    ... times the sum of his current base salary and EXCEL target award, payable over no more than 24 months; • A pro rata bonus award under EXCEL for the year in which the termination occurs, if earned (as certified and determined by the Committee), payable in a single installment on the normal payment...

  • Page 191
    ...): • Applicable benefits under the Kodak long-term disability plan; • A pro rata annual target award under EXCEL payable in a single installment on the normal payment date when awards are paid to other executives; • Any earned, but unpaid, EXCEL award for the prior performance year; • Waiver...

  • Page 192
    ...two years following a change in control, each of the Named Executive Officers will receive a lump-sum severance payment equal to: 1) three times their base salary and EXCEL target award and 2) continued participation in the Company's medical, dental, disability and life insurance plans for 12 months...

  • Page 193
    ... the Company's Executive Deferred Compensation Plan (EDCP), 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...

  • Page 194
    Severance Payments Table The table below estimates the incremental amounts payable upon a termination of employment by the Company under various circumstances as if the Named Executive Officer's last date of employment was December 31, 2010, using the closing price of our common stock as of December...

  • Page 195
    ...23, 2011 and he voluntarily terminates for any reason during the 30-day period commencing 23 months after the change in control. The cash severance amounts disclosed above were calculated using target total cash compensation (base salary plus EXCEL target award) for each Named Executive Officer. For...

  • Page 196
    ... event. The amounts reported assume that all affected Named Executive Officers would receive their supplemental retirement benefits in a lump sum. In 2009, Mr. Perez waived his rights to excise tax gross-up payments under the Executive Protection Plan. Mr. Jotwani waived his rights to these payments...

  • Page 197
    ... by us or written representations furnished to us, we believe that, for the reporting period covering our 2010 fiscal year, the forms were filed timely. By Order of the Board of Directors Patrick M. Sheller Secretary and Chief Compliance Officer Eastman Kodak Company March 30, 2011 71

  • Page 198
    ... three years employed as an executive officer of another company where any of the Company's present executive officers serve or served on that company's compensation committee; or • The director is a current employee, or an immediate family member of the director is a current executive officer of...

  • Page 199
    ... involved in the Board and its decision making. 8) Skills. Directors should be selected so that the Board has an appropriate mix of skills in core areas such as accounting and finance, technology, management, marketing, crisis management, strategic planning, international markets and industry...

  • Page 200
    ... current and future needs. 2) Using the results of this assessment, the Committee will prepare a target candidate profile. 3) The Committee will develop an initial list of director candidates by retaining a search firm, utilizing the personal network of the Board and senior management of the Company...

  • Page 201
    ...'s report on management's report on internal control over financial reporting. The Audit Committee shall also approve, if necessary, any significant changes in terms, conditions and fees resulting from changes in audit scope, company structure or other items. In addition to the annual audit services...

  • Page 202
    ...or changes to engagements when it is not practical to bring the matter before the Committee as a whole. Attachment 1 Prohibited Non-Audit Services • Bookkeeping or other services related to the accounting records or financial statements of the audit client • Financial information systems design...

  • Page 203
    ... INFORMATION 2011 ANNUAL MEETING DIRECTIONS AND PARKING INFORMATION The Hilton Garden Inn 6450 Carlsbad Blvd., Carlsbad, CA, 92011 Directions From the San Diego International Airport Start out going East on N Harbor Drive Turn Left onto W Laurel Street Turn Left onto Pacific Highway Turn Right...

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    About Kodak As the world's foremost imaging innovator, Kodak helps consumers, businesses and creative professionals unleash the power of pictures and printing to enrich their lives. To learn more, visit www.kodak.com and follow our blogs and more at www.kodak.com/go/followus.

  • Page 208
    Eastman Kodak Company 343 State Street Rochester, NY 14650 www.kodak.com This document was produced using solutions from Kodak's Graphic Communications Group including KODAK APPROVAL XP-Digital Color Imager, KODAK APPROVAL Digital Color Proofing Material, KODAK MATCHPRINT Inkjet Proofing system, ...