Kodak 2004 Annual Report Download - page 137

Board
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2 0 0 5 ฀ N O T I C E ฀ O F ฀ A N N U A L ฀ M E E T I N G ฀ A N D ฀ P R O X Y ฀ S T A T E M E N T
will฀periodically฀provide฀the฀Board฀with฀a฀summary฀of฀all฀communications฀received฀that฀were฀not฀forwarded฀to฀the฀Presiding฀Director฀and฀will฀make฀those฀
communications฀available฀to฀any฀director฀on฀request.฀The฀Presiding฀Director฀will฀determine฀whether฀any฀communications฀sent฀to฀the฀full฀Board฀should฀be฀
properly฀addressed฀by฀the฀entire฀Board฀or฀a฀committee฀thereof฀and฀whether฀a฀response฀to฀the฀communication฀is฀warranted.฀If฀a฀response฀is฀warranted,฀the฀
Presiding฀Director฀may฀choose฀to฀coordinate฀the฀content฀and฀method฀of฀the฀response฀with฀our฀Corporate฀Secretary.
Consideration฀of฀Director฀Nominees
The฀Governance฀Committee฀will฀consider฀for฀nomination฀as฀director฀of฀the฀Company฀candidates฀recommended฀by฀its฀members,฀other฀Board฀members,฀
management,฀shareholders฀and฀the฀search฀firms฀it฀retains.
Shareholders฀wishing฀to฀recommend฀candidates฀for฀consideration฀by฀the฀Governance฀Committee฀may฀do฀so฀by฀providing฀the฀following฀information,฀in฀writ-
ing,฀to฀the฀Governance฀Committee,฀c/o฀Corporate฀Secretary,฀Eastman฀Kodak฀Company,฀343฀State฀Street,฀Rochester,฀NY฀14650-0218:฀1)฀the฀name,฀address฀
and฀telephone฀number฀of฀the฀shareholder฀making฀the฀request;฀2)฀the฀number฀of฀shares฀of฀the฀Company฀owned,฀and฀if฀such฀person฀is฀not฀a฀shareholder฀of฀
record฀or฀if฀such฀shares฀are฀held฀by฀an฀entity,฀reasonable฀evidence฀of฀such฀person’s฀ownership฀of฀such฀shares฀or฀such฀person’s฀authority฀to฀act฀on฀behalf฀
of฀such฀entity;฀3)฀the฀full฀name,฀address฀and฀telephone฀number฀of฀the฀individual฀being฀recommended,฀together฀with฀a฀reasonably฀detailed฀description฀of฀
the฀background,฀experience฀and฀qualifications฀of฀that฀individual;฀4)฀a฀signed฀acknowledgement฀by฀the฀individual฀being฀recommended฀that฀he฀or฀she฀has฀
consented฀to:฀a)฀serve฀as฀director฀if฀elected฀and฀b)฀the฀Company฀undertaking฀an฀inquiry฀into฀that฀individual’s฀background,฀experience฀and฀qualifications;฀
5)฀the฀disclosure฀of฀any฀relationship฀of฀the฀individual฀being฀recommended฀with฀the฀Company฀or฀any฀subsidiaries฀or฀affiliates,฀whether฀direct฀or฀indirect;฀
and฀6)฀if฀known฀to฀the฀shareholder,฀any฀material฀interest฀of฀such฀shareholder฀or฀individual฀being฀recommended฀in฀any฀proposals฀or฀other฀business฀to฀be฀
presented฀at฀the฀Company’s฀next฀annual฀meeting฀of฀shareholders฀(or฀a฀statement฀to฀the฀effect฀that฀no฀material฀interest฀is฀known฀to฀such฀shareholder).฀Our฀
Board฀may฀change฀the฀process฀by฀which฀shareholders฀may฀recommend฀director฀candidates฀to฀the฀Governance฀Committee.฀Please฀refer฀to฀the฀Company’s฀
website฀at฀www.kodak.com/go/governance฀for฀any฀changes฀to฀this฀process.฀
With฀regard฀to฀the฀election฀of฀directors฀covered฀by฀this฀Proxy฀Statement,฀the฀Company฀received฀one฀recommendation฀of฀a฀director฀candidate฀from฀an฀indi-
vidual฀who฀nominated฀himself.฀This฀individual฀was฀ineligible฀for฀membership฀on฀the฀Board฀since฀he฀had฀already฀attained฀the฀Board’s฀mandatory฀retirement฀
age฀of฀70.
Director฀Qualification฀Standards
When฀reviewing฀a฀potential฀candidate฀for฀the฀Board,฀the฀Governance฀Committee฀looks฀to฀whether฀the฀candidate฀possesses฀the฀necessary฀qualifications฀to฀
serve฀as฀a฀director.฀To฀assist฀it฀in฀these฀determinations,฀the฀Governance฀Committee฀has฀adopted฀“Director฀Qualification฀Standards.”฀The฀Director฀Qualifica-
tion฀Standards฀are฀attached฀as฀an฀appendix฀to฀the฀Company’s฀Corporate฀Governance฀Guidelines,฀which฀are฀attached฀as฀Exhibit฀IV.฀These฀standards฀specify฀
the฀minimum฀qualifications฀that฀a฀nominee฀must฀possess฀in฀order฀to฀be฀considered฀for฀election฀as฀a฀director.฀If฀a฀candidate฀possesses฀these฀minimum฀
qualifications,฀the฀Committee,฀in฀accordance฀with฀the฀Director฀Selection฀Process฀described฀in฀the฀next฀section,฀will฀then฀consider฀the฀candidate’s฀qualifica-
tions฀in฀light฀of฀the฀needs฀of฀the฀Board฀and฀the฀Company฀at฀that฀time,฀given฀the฀then฀current฀mix฀of฀director฀attributes.
Director฀Selection฀Process
As฀provided฀in฀the฀Company’s฀Corporate฀Governance฀Guidelines,฀the฀Governance฀Committee฀seeks฀to฀create฀a฀diverse฀and฀inclusive฀Board฀that,฀as฀a฀
whole,฀is฀strong฀in฀both฀its฀knowledge฀and฀experience.฀When฀identifying,฀screening฀and฀recommending฀new฀candidates฀to฀the฀Board฀for฀membership,฀the฀
Governance฀Committee฀follows฀the฀procedures฀outlined฀in฀its฀“Director฀Selection฀Process.”฀The฀Director฀Selection฀Process฀is฀attached฀as฀an฀appendix฀to฀
the฀Company’s฀Corporate฀Governance฀Guidelines,฀which฀are฀attached฀as฀Exhibit฀IV.฀The฀Governance฀Committee฀generally฀uses฀the฀services฀of฀a฀third-party฀
executive฀search฀firm฀when฀identifying฀and฀evaluating฀possible฀nominees฀for฀director.฀A฀third-party฀executive฀search฀firm฀recommended฀Mr.฀Hawley฀to฀the฀
Governance฀Committee฀for฀consideration฀as a฀director฀candidate.
DIRECTOR฀COMPENSATION฀
Review
In฀late฀2003,฀the฀Governance฀Committee฀began฀a฀review฀of฀the฀Director฀Compensation฀Program.฀As฀a฀first฀step฀in฀this฀process,฀the฀Committee฀developed฀
a฀set฀of฀Director฀Compensation฀Principles.฀These฀principles,฀which฀are฀aligned฀with฀the฀Company’s฀executive฀compensation฀principles,฀are฀described฀in฀
the฀Committee’s฀report฀on฀page฀47.฀Based฀on฀these฀principles,฀the฀Committee,฀with฀the฀assistance฀of฀its฀independent฀consultant,฀undertook฀a฀thorough฀
examination฀of฀the฀Director฀Compensation฀Program฀in฀2004฀to:฀1)฀assess฀the฀appropriateness฀of฀the฀Board’s฀compensation฀and฀2)฀conduct฀a฀competitive฀
review฀of฀director฀pay฀levels฀and฀practices฀at฀peer฀companies.฀As฀a฀result฀of฀this,฀the฀Committee฀recommended฀four฀fundamental฀changes฀to฀the฀Director฀
Compensation฀Program.฀A฀description฀of฀these฀changes,฀and฀the฀basis฀for฀their฀recommendation,฀appears฀in฀the฀Committee’s฀report฀on฀page฀47.฀The฀fol-
lowing฀describes฀the฀Director฀Compensation฀Program฀as฀revised฀by฀the฀Board,฀effective฀June฀1,฀2004,฀based฀on฀these฀Committee฀recommendations.