Kodak 2004 Annual Report Download - page 177

Exhibits
68
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
APPENDIX฀A฀—฀Eastman฀Kodak฀Company฀2005฀Omnibus฀Long-Term฀Compensation฀Plan฀
a)฀฀Introduction.฀The฀terms฀of฀this฀Appendix฀A฀apply฀to฀all฀Awards,฀other฀than฀Stock฀Options฀or฀SARs,฀that฀are฀intended฀by฀the฀Committee฀to฀satisfy฀the฀฀
฀ requirements฀for฀deductibility฀as฀“performance-based฀compensation”฀under฀Section฀162(m)(4)(C)฀of฀the฀Code.฀฀
b)฀฀Definitions.฀The฀capitalized฀terms฀used฀in฀this฀Appendix฀shall฀have฀the฀same฀meaning฀as฀set฀forth฀in฀the฀Plan,฀unless฀otherwise฀defined฀below.
฀ ฀i)฀Committee.฀“Committee”฀means฀the฀Executive฀Compensation฀and฀Development฀Committee฀of฀the฀Board,฀or฀such฀other฀Board฀committee฀as฀may฀be฀
designated฀by฀the฀Board฀to฀administer฀the฀Plan;฀provided฀that฀the฀Committee฀shall฀consist฀of฀at฀least฀two฀directors,฀each฀of฀whom฀is฀an฀“outside฀direc-
tor”฀within฀the฀meaning฀of฀Section฀162(m)฀of฀the฀Code฀and฀the฀applicable฀regulations฀thereunder.
฀ ฀ii)฀Performance฀Criteria.฀“Performance฀Criteria”฀shall฀mean฀any฀of฀the฀following฀for฀the฀Company฀on฀a฀consolidated฀basis฀and/or฀for฀any฀subsidiary,฀
division,฀business฀unit฀or฀one฀or฀more฀business฀segments:฀return฀on฀net฀assets฀(RONA),฀return฀on฀shareholders’฀equity,฀return฀on฀assets,฀return฀on฀
capital,฀shareholder฀returns,฀total฀shareholder฀return,฀return฀on฀invested฀capital,฀profit฀margin,฀earnings฀per฀share,฀net฀earnings,฀operating฀earnings,฀
Common฀Stock฀price฀per฀share,฀sales฀or฀market฀share,฀unit฀manufacturing฀cost,฀working฀capital,฀productivity,฀days฀sales฀in฀inventory,฀days฀sales฀out-
standing,฀revenue,฀revenue฀growth,฀cash฀flow฀and฀investable฀cash฀flow.
c)฀฀Awards.
฀ i)฀Eligible฀Employees.฀All฀Employees฀are฀eligible฀to฀be฀selected฀for฀a฀Performance฀Award฀during฀a฀Performance฀Cycle.฀
฀ ii)฀Performance฀Cycle.฀For฀purposes฀of฀this฀Appendix฀A,฀a฀Performance฀Cycle฀shall฀be฀at฀least฀twelve฀(12)฀calendar฀months.
฀ ฀iii)฀Committee฀Discretion.฀To฀the฀extent฀required฀by฀Section฀162(m)฀of฀the฀Code,฀the฀Committee฀shall฀have฀full฀discretion,฀within฀the฀first฀ninety฀(90)฀
days฀of฀a฀Performance฀Cycle฀(or,฀if฀longer,฀within฀the฀maximum฀period฀allowed฀under฀Section฀162(m)฀of฀the฀Code),฀to฀designate฀the฀Employees฀who฀
will฀be฀Participants฀for฀the฀Performance฀Cycle,฀the฀length฀of฀such฀Performance฀Cycle,฀the฀type(s)฀of฀Awards฀to฀be฀issued,฀the฀Performance฀Criteria฀that฀
will฀be฀used฀to฀calculate,฀in฀an฀objective฀manner,฀the฀Performance฀Formula,฀the฀kind(s)฀and/or฀level(s)฀of฀the฀goals฀under฀the฀Performance฀Formula,฀
whether฀the฀Performance฀Criteria฀shall฀apply฀to฀the฀Company,฀Kodak,฀a฀Subsidiary฀or฀any฀one฀or฀more฀subunits฀of฀the฀foregoing฀and฀the฀Performance฀
Formula.฀
฀ ฀iv)฀Adjustment฀of฀Awards.฀The฀Committee฀is฀authorized฀at฀any฀time฀during฀the฀first฀ninety฀(90)฀days฀of฀a฀Performance฀Cycle,฀or฀at฀any฀time฀thereafter฀
(but฀only฀to฀the฀extent฀the฀exercise฀of฀such฀authority฀after฀the฀first฀ninety฀(90)฀days฀of฀a฀Performance฀Cycle฀would฀not฀cause฀the฀Awards฀granted฀to฀the฀
Participant฀for฀the฀Performance฀Cycle฀to฀fail฀to฀qualify฀as฀“performance-based฀compensation”฀under฀Section฀162(m)฀of฀the฀Code),฀in฀its฀sole฀and฀abso-
lute฀discretion,฀to฀adjust฀or฀modify฀the฀Performance฀Formula฀for฀such฀Performance฀Cycle฀in฀order฀to฀prevent฀the฀dilution฀or฀enlargement฀of฀the฀rights฀of฀
Participants,฀A)฀in฀the฀event฀of,฀or฀in฀anticipation฀of,฀any฀unusual฀or฀extraordinary฀corporate฀item,฀transaction,฀event฀or฀development;฀B)฀in฀recognition฀of,฀
or฀in฀anticipation฀of,฀any฀other฀unusual฀or฀nonrecurring฀events฀affecting฀the฀Company,฀or฀the฀financial฀statements฀of฀the฀Company,฀or฀in฀response฀to,฀or฀
in฀anticipation฀of,฀changes฀in฀applicable฀laws,฀regulations,฀accounting฀principles฀or฀business฀conditions;฀and฀C)฀in฀view฀of฀the฀Committee’s฀assessment฀
of฀the฀business฀strategy฀of฀the฀Company,฀performance฀of฀comparable฀organizations,฀economic฀and฀business฀conditions฀and฀any฀other฀circumstances฀
deemed฀relevant.฀In฀no฀event฀shall฀the฀Award฀of฀any฀Participant฀who฀is฀a฀Covered฀Employee฀be฀adjusted฀pursuant฀to฀Section฀6.2฀of฀the฀Plan฀to฀the฀extent฀
it฀would฀cause฀such฀Award฀to฀fail฀to฀qualify฀as฀“performance-based฀compensation”฀under฀Section฀162(m)฀of฀the฀Code.
฀ ฀v)฀Determination฀of฀Awards.฀Following฀the฀completion฀of฀a฀Performance฀Cycle,฀the฀Committee฀shall฀review฀and฀certify฀in฀writing฀whether,฀and฀to฀
what฀extent,฀the฀goals฀under฀the฀Performance฀Formula฀for฀the฀Performance฀Cycle฀have฀been฀achieved฀and,฀if฀so,฀to฀calculate฀and฀certify฀in฀writing฀the฀
amount฀of฀the฀Awards฀earned฀for฀the฀period.฀The฀Committee฀shall฀then฀determine฀the฀actual฀size฀of฀each฀Participant’s฀Award฀for฀the฀Performance฀Cycle.฀
In฀determining฀the฀actual฀size฀of฀an฀individual฀Award฀for฀a฀Performance฀Cycle,฀the฀Committee฀may฀reduce฀(but฀not฀increase)฀or฀eliminate฀the฀amount฀
of฀the฀Award฀earned฀under฀the฀Performance฀Formula฀for฀the฀Performance฀Cycle,฀if฀in฀the฀Committee’s฀sole฀judgment,฀such฀reduction฀or฀elimination฀is฀
appropriate.฀฀