Kodak 2010 Annual Report Download - page 189


63
TERMINATION AND CHANGE IN CONTROL ARRANGEMENTS
Potential Benefits upon Termination for Reasons other than Change in Control
Each of our Named Executive Officers is eligible to receive certain severance payments and benefits in connection with termination of
employment under various circumstances. The potential severance benefits payable to our Named Executive Officers in the event of
termination of employment on December 31, 2010 pursuant to any individual arrangement with the Company are described below. For
Named Executive Officers without an individual arrangement, severance benefits equal to 1.5 weeks of target total cash compensation per
year of service with the Company may be payable in accordance with the Company’s Termination Allowance Plan (TAP). If a Named
Executive Officer terminates between February 1, 2009 and December 31, 2012 inclusive, his or her severance benefit pursuant to any
individual agreement or TAP, as applicable, will be partially offset by the Special Termination Program benefits payable from KRIP. A
Named Executive Officer’s severance arrangement may nevertheless be adjusted in accordance with pre-established guidelines applied
by the Committee to determine the appropriate arrangement for that Named Executive Officer. These guidelines are described on page 48
of this Proxy Statement.
Actual amounts paid or distributed to our Named Executive Officers as a result of one of the separation events occurring in the future may
be different than those described below due to the fact that many factors affect the amounts of any payments described under the various
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 vary from those provided in the Named Executive Officer's pre-existing individual letter agreement(s), if any,
or in relevant employee benefit plans, provided that such terms are consistent with the guidelines that the Committee establishes for
executive severance.
In addition to benefits outlined in our Named Executive Officers’ individual severance arrangements, Named Executive Officers will be
eligible to receive any benefits accrued under the Company’s broad-based benefit plans, such as distributions under SIP, disability benefits
and accrued vacation pay, in accordance with those plans and policies. Our Named Executive Officers will also be eligible to receive any
account balances at the 2010 fiscal year end under our non-qualified deferred compensation plans and programs as set forth in the Non-
Qualified Deferred Compensation Table on page 61 of this Proxy Statement and any present value of accrued benefits as set forth in the
Pension Benefits Table on page 59 of this Proxy Statement.
Following termination of employment, each of our Named Executive Officers is subject to compliance with the post-termination restrictive
covenants set forth in his or her Eastman Kodak Company Employee’s Agreement, in addition to any covenants under individual
arrangements with the Company. These covenants generally prohibit our Named Executive Officers from disclosing proprietary or
confidential information of the Company and from competing with the Company for a certain period after termination of their employment.
All of our Named Executive Officers are prohibited from soliciting any of our employees to leave employment with the Company, or to
solicit any of our customers or suppliers to do business with any of our competitors, for one year after termination of their employment. All
of our Named Executive Officers are prohibited from engaging in any work for a competitor of the Company in the field in which they were
employed by Kodak for a period of not more than 18 months after termination. Mr. Perez is also subject to a two-year non-compete after
termination of his employment under his letter agreement dated March 3, 2003.
For any unvested or restricted equity awards, related restriction periods may lapse pursuant to the terms of the awards depending on the
circumstances surrounding a Named Executive Officer’s termination of employment. The Committee may waive any restrictions or
accelerate vesting if an executive’s termination is determined to be for an “approved reason.” An “approved reason” is defined as a
termination of employment that is in the best interest of the Company, as determined by the Committee. Absent an agreement specifying
different treatment, equity awards held by Named Executive Officers will generally be affected as follows:
• Stock Options: If the Committee determines that a Named Executive Officer’s termination is for an approved reason, then all
unvested stock options will continue to vest as if employment continued and will expire on the third anniversary from the last date of
employment. Upon termination of employment due to death or disability, all unvested stock options will immediately vest and remain
exercisable until the third anniversary from the last date of employment.
• Leadership Stock Awards: Upon termination of employment due to death, disability, retirement, or an approved reason, an
executive will remain eligible to receive an award earned under the performance cycle, provided the executive was employed for
the entire year of the one-year performance cycle.
• Restricted Stock Awards: For termination due to an approved reason, subject to the Committee’s approval, the executive will
retain the shares and restrictions will lapse upon termination. In the event of disability, the executive will retain the shares and
restrictions will lapse upon termination. In the event of death, restrictions will lapse and the shares will be paid to the executive’s
estate.
• RSU Awards: Upon termination of employment due to death, disability or an approved reason, an executive will be eligible to
retain a portion of, or all of, his or her unvested award, unless the termination occurs prior to the first anniversary of the grant
date, subject to the terms and conditions of the award administrative guide. Upon termination of employment due to retirement,