Kodak 2010 Annual Report Download - page 151

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accept the director’s letter of resignation within 90 days following the certification of the shareholder vote. If the letter of resignation is not
accepted by the Board within this 90-day period, the resignation will not be effective until the next annual meeting.
All the director nominees standing for election at the Annual Meeting have submitted an irrevocable letter of resignation as a condition of
being renominated to the Board as called for under the amended Majority Vote 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 only identifying and prioritizing the risks the Company faces and monitoring the steps management is taking to manage those risks,
but also determining the level of risk that is appropriate for the Company. As an integral part of its review and approval of the Company’s
strategic plan, the Board considers the appropriate level of risk for the Company to accept. The full Board also participates in an annual
enterprise risk assessment which is led by the Company's Chief Compliance Officer. Through this process, risk is assessed throughout the
Company, focusing on four primary categories of risk: strategic, operational, legal/compliance and financial reporting. In 2010, the Board
received a report on the results of the Company's enterprise risk assessment. The Board also receives regular reports on management’s
progress in mitigating key risks.
While the Board has assumed oversight responsibility for the Company's enterprise risk management process, the Board has delegated to
its Committees responsibility for the oversight of the Company’s risk management in specific risk areas. For example:
• The Audit Committee oversees the Company’s financial reporting (including internal controls) and compliance risk management.
• The Executive Compensation and Development Committee oversees risk management relating to the Company's compensation
programs and awards.
• The Finance Committee oversees risk management relating to the Company’s capital structure and insurance program.
• The Governance Committee oversees the Company’s health, safety and environmental risk management program.
In 2010, the Compensation Committee reviewed a report from management on an assessment of risks relating to the Company’s
compensation programs and awards. The assessment concluded, and the Compensation Committee agreed, that such programs and
awards do not present any material adverse risks to the Company.
DIRECTOR COMPENSATION
Introduction
Our directors are compensated through a combination of cash retainers and equity-based incentives. Consistent with the Board’s Director
Compensation Principles, a substantial portion of director compensation is linked to our stock performance. In addition, directors can elect
to receive their entire Board remuneration in equity-based compensation. Kodak does not pay management directors for Board service in
addition to their regular employee compensation.
Director Compensation Principles
The Board has adopted the following Director Compensation Principles, which are aligned with the Company’s executive compensation
principles:
• Pay should represent a moderately important element of Kodak’s director value proposition.
• Pay levels should generally target near the market median, and pay mix should be consistent with market considerations.
• Pay levels should be differentiated based on the time demands on directors’ roles, and the Board will ensure regular rotation of
certain of these roles.
• The program design should ensure that rewards are tied to the successful performance of our common stock, and the mix of pay
should allow flexibility and Board diversity.
• To the extent practicable, Kodak’s Director Compensation Principles should parallel the principles of the Company’s executive
compensation program.
Review
The Governance Committee, which consists solely of independent directors, has the primary responsibility for reviewing and considering
any changes to the Board’s compensation program. The Board reviews the Governance Committee’s recommendation and determines the
amount of director compensation.