Kodak 2010 Annual Report Download - page 192


66
Former Executive: Frank S. Sklarsky
Mr. Sklarsky’s last date of employment with the Company was November 5, 2010. Since his departure was voluntary, Mr. Sklarsky was not
eligible for severance benefits.
Potential Benefits upon Change in Control
Executive Protection Plan
The Company maintains the Executive Protection Plan to provide severance pay and continuation of certain welfare benefits for Named
Executive Officers in the event a change in control occurs and:
1) The Named Executive Officer’s employment is terminated by the Company for reasons other than cause or by the Named
Executive Officer for good reason within two years after a change in control; or
2) The Named Executive Officer’s employment is terminated prior to a change in control and they are able to demonstrate that their
employment was terminated in contemplation of a change in control.
A change in control is generally defined under the plan as:
• The incumbent directors cease to constitute a majority of the Board, unless the election of the new directors was approved by at
least two-thirds of the incumbent directors then on the Board;
• The acquisition of 25% or more of the combined voting power of the Company’s then outstanding securities;
• A merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company or any of its
subsidiaries that requires the approval of the Company’s shareholders; or
• A vote by the shareholders to completely liquidate or dissolve the Company.
The plan provides that, in the event of a termination of employment, either voluntarily with “good reason” or involuntarily without “cause,”
within 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 at no cost to the executive.
“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 plan 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.
2010 Changes
In addition to the above, prior to certain amendments, the Executive Protection Plan provided that Mr. Perez and Mr. Faraci would be
entitled to the above-referenced benefits if they voluntarily terminated their employment for any reason during the 30-day period
commencing 23 months after a change in control. Under the September 28, 2009 amendment to his letter agreement, Mr. Perez waived
his rights to receive benefits associated with this provision. On December 23, 2010, the plan was amended to eliminate this provision.
Also, prior to certain amendments, the plan provided for excise tax gross-up payments. Under the September 28, 2009 amendment to his
letter agreement, Mr. Perez waived his right to excise tax gross-up payments. Beginning in February 2010, new Section 16 Officers waived
their right to these payments, and the plan was amended on December 23, 2010 to eliminate these payments for all executives.
Under the plan, no amendment adversely impacting the rights of covered executives will be effective if a change in control occurs during
the 12-month period following the amendment. As a result, these amendments will apply to any change in control occurring on or after
December 23, 2011.