Kodak 2012 Annual Report Download - page 95

Table of Contents
Net Operating Loss Rights Agreement
On August 1, 2011, the Company entered into a Net Operating Loss (NOL) Rights Agreement (NOL Rights Agreement) designed to preserve
stockholder value and tax assets. The Company’s ability to use its tax attributes to offset tax on U.S. taxable income would be substantially
limited if there were an “ownership change” as defined under Section 382 of the U.S. Internal Revenue Code. In general, an ownership change
would occur if “5-percent shareholders,” as defined under Section 382, collectively increase their ownership in the Company by more than 50
percentage points over a rolling three-year period.
In connection with the adoption of the NOL Rights Agreement, the Company’s Board of Directors declared a dividend of one preferred share
purchase right for each outstanding share of the Company’s common stock. The preferred share purchase rights were distributed to stockholders
of record as of August 11, 2011, but would only be activated if triggered by the NOL Rights Agreement.
Under the NOL Rights Agreement, preferred share purchase rights will work to impose significant dilution upon any person or group which
acquires beneficial ownership of 4.9% or more of the outstanding common stock, without the approval of the Company’s Board of Directors,
from and after August 1, 2011. Stockholders that own 4.9% or more of the outstanding common stock as of the opening of business on August 1,
2011, will not trigger the preferred share purchase rights so long as they do not (i) acquire additional shares of common stock representing one
one-thousandth of one percent (0.001%) or more of the shares of common stock then outstanding or (ii) fall under 4.9% ownership of common
stock and then re-acquire shares that in the aggregate equal 4.9% or more of the common stock.
The NOL Rights Agreement has a three-year term, although the Company’s Board of Directors will review the plan periodically.
NOTE 19: RESTRUCTURING COSTS AND OTHER
Kodak recognizes the need to continually rationalize its workforce and streamline its operations in the face of ongoing business and economic
changes. Charges for restructuring and ongoing rationalization initiatives are recorded in the period in which Kodak commits to a formalized
restructuring or ongoing rationalization plan, or executes the specific actions contemplated by the plans and all criteria for liability recognition
under the applicable accounting guidance have been met.
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