Kodak 2010 Annual Report Download - page 80

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The 2010 severance costs related to the elimination of approximately 800 positions, including approximately 550
manufacturing/service, 225 administrative, and 25 research and development positions. The geographic composition of these
positions includes approximately 475 in the United States and Canada, and 325 throughout the rest of the world.
The charges of $78 million recorded in 2010 included $38 million applicable to FPEG, $15 million applicable to GCG, $3 million
applicable to CDG, and $22 million that was applicable to manufacturing/service, research and development, and administrative
functions, which are shared across all segments.
As a result of these initiatives, severance payments will be paid during periods through 2011 since, in many instances, the
employees whose positions were eliminated can elect or are required to receive their payments over an extended period of time. In
addition, certain exit costs, such as long-term lease payments, will be paid over periods throughout 2011 and beyond.
NOTE 17: RETIREMENT PLANS
Substantially all U.S. employees are covered by a noncontributory defined benefit plan, the Kodak Retirement Income Plan (“KRIP”),
which is funded by Company contributions to an irrevocable trust fund. The funding policy for KRIP is to contribute amounts sufficient
to meet minimum funding requirements as determined by employee benefit and tax laws plus any additional amounts the Company
determines to be appropriate. Generally, benefits are based on a formula recognizing length of service and final average earnings.
Assets in the trust fund are held for the sole benefit of participating employees and retirees. They are comprised of corporate equity
and debt securities, U.S. government securities, partnership investments, interests in pooled funds, commodities, real estate, and
various types of interest rate, foreign currency, debt, and equity market financial instruments.
In March 1999, the Company amended the KRIP to include a separate cash balance formula for all U.S. employees hired after
February 1999. All U.S. employees hired prior to that date were granted the option to choose the traditional KRIP plan or the Cash
Balance plan. Written elections were made by employees in 1999, and were effective January 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 (“SIP”), the Company matches dollar-for-dollar on the first 1% contributed to SIP and $.50 for each dollar on the
next 4% contributed. Company contributions to SIP were $11 million and $13 million for 2010 and 2008, respectively. The Company
suspended its matching contribution for 2009, but resumed it in 2010.
The Company also sponsors unfunded defined benefit plans for certain U.S. employees, primarily executives. The benefits of these
plans are obtained by applying KRIP provisions to all compensation, including amounts being deferred, and without regard to the
legislated qualified plan maximums, reduced by benefits under KRIP. Employees covered by the Cash Balance plan also receive an
additional benefit equal to 3% of their annual pensionable earnings. The Company suspended this additional benefit for 2009, but
resumed it in 2010.
Many subsidiaries and branches operating outside the U.S. have defined benefit retirement plans covering substantially all
employees. Contributions by the Company for these plans are typically deposited under government or other fiduciary-type
arrangements. Retirement benefits are generally based on contractual agreements that provide for benefit formulas using years of
service and/or compensation prior to retirement. The actuarial assumptions used for these plans reflect the diverse economic
environments within the various countries in which the Company operates.
The measurement date used to determine the pension obligation for all funded and unfunded U.S. and Non-U.S. defined benefit
plans is December 31.