Kodak 2004 Annual Report Download - page 120

Proposals
11
E A S T M A N฀ K OD A K ฀ C O M PA N Y
Types฀of฀Awards
The฀Plan฀authorizes฀the฀grant฀of:
฀ •฀performance฀awards฀(awards฀earned฀by฀reference฀to฀performance฀criteria฀chosen฀by฀the฀Committee);
฀ •฀non-qualified฀and฀incentive฀stock฀options;
฀ •฀SARs;
฀ •฀฀restricted฀stock฀awards฀and฀restricted฀stock฀unit฀awards฀(stock฀awards,฀earned฀performance฀awards฀or฀other฀incentive฀compensation฀under฀
another฀plan฀maintained฀by฀the฀Company);฀and
฀ •฀฀other฀stock-based฀awards฀(stock-based฀awards฀granted฀either฀as฀freestanding฀grants,฀payments฀of฀earned฀performance฀awards฀or฀other฀incentive฀
compensation฀under฀another฀plan฀maintained฀by฀the฀Company).฀
Termination฀and฀Amendment฀of฀Plan
The฀Committee฀may฀terminate฀or฀amend฀the฀Plan฀at฀any฀time฀for฀any฀reason฀or฀no฀reason.฀Without฀shareholder฀approval,฀however,฀the฀Committee฀may฀not฀
adopt฀any฀amendment฀that฀would฀require฀the฀vote฀of฀shareholders฀of฀the฀Company฀under฀the฀NYSE’s฀approval฀rules฀or฀any฀amendment฀affecting฀“covered฀
employees”฀that฀requires฀the฀vote฀of฀the฀Company’s฀shareholders฀under฀Section฀162(m)฀of฀the฀Internal฀Revenue฀Code.฀The฀Company’s฀Chief฀Executive฀
Officer฀(CEO)฀and฀its฀four฀most฀highly฀compensated฀executive฀officers฀are฀“covered฀employees.”฀
Available฀Shares
The฀aggregate฀number฀of฀shares฀available฀under฀the฀Plan฀will฀be฀11,000,000฀shares฀of฀the฀Company’s฀common฀stock,฀plus฀any฀shares฀subject฀to฀awards฀
under฀the฀1990฀Omnibus฀Long-Term฀Compensation฀Plan,฀the฀1995฀Omnibus฀Long-Term฀Compensation฀Plan฀and฀the฀2000฀Omnibus฀Plan,฀that฀are฀outstand-
ing฀and฀become฀available฀under฀the฀terms฀of฀the฀Plan.฀The฀share฀reserve฀under฀the฀Plan฀is฀increased฀by:฀shares฀that฀are฀forfeited฀pursuant฀to฀awards฀made฀
under฀prior฀plans;฀shares฀retained฀for฀payment฀of฀tax฀withholding;฀shares฀issued฀in฀connection฀with฀reinvestment฀of฀dividends฀and฀dividend฀equivalents;฀
shares฀delivered฀for฀payment฀or฀satisfaction฀of฀tax฀withholding;฀shares฀reacquired฀on฀the฀open฀market฀using฀option฀exercise฀price฀cash฀proceeds;฀and฀
awards฀that฀otherwise฀do฀not฀result฀in฀the฀issuance฀of฀shares.฀The฀aggregate฀number฀of฀shares฀will฀not฀be฀reduced฀by฀shares฀granted฀by฀the฀Company฀in฀
assumption฀of,฀or฀exchange฀for,฀awards฀granted฀by฀another฀company฀as฀a฀result฀of฀a฀merger฀or฀consolidation.฀The฀number฀of฀shares฀under฀the฀Plan฀may฀be฀
adjusted฀for฀changes฀in฀the฀Company’s฀capital฀structure,฀such฀as฀a฀stock฀split฀or฀merger.฀฀
Award฀Limits
The฀maximum฀compensation฀granted฀as฀performance฀awards฀to฀any฀one฀participant฀for฀any฀performance฀cycle฀is฀500,000฀shares฀of฀common฀stock฀or฀
$5,000,000฀if฀the฀award฀is฀paid฀in฀cash.฀
The฀maximum฀number฀of฀shares฀for฀which฀stock฀options฀may฀be฀granted฀to฀any฀one฀participant฀during฀any฀36-month฀period฀is฀2,000,000฀shares฀of฀com-
mon฀stock.
The฀maximum฀number฀of฀shares฀for฀which฀SARs฀may฀be฀granted฀to฀any฀one฀participant฀during฀any฀36-month฀period฀is฀2,000,000฀shares฀of฀common฀stock.
Grants฀to฀Non-U.S.฀Employees
To฀facilitate฀the฀granting฀of฀awards฀to฀participants฀who฀are฀employed฀outside฀of฀the฀United฀States,฀the฀Plan฀authorizes฀the฀Committee฀to฀modify฀and฀amend฀
the฀terms฀and฀conditions฀of฀an฀award฀to฀accommodate฀differences฀in฀local฀law,฀policy฀or฀custom.
Performance฀Awards
The฀Committee฀may฀grant฀awards฀in฀the฀form฀of฀performance฀awards฀to฀participants฀who฀have฀been฀employed฀by฀the฀Company฀on฀the฀last฀day฀of฀a฀
performance฀cycle฀unless฀otherwise฀provided฀in฀the฀relevant฀award฀notice฀or฀administrative฀guide.฀Performance฀awards฀are฀paid฀to฀participants฀who฀have฀
achieved฀the฀goals฀under฀the฀performance฀formula฀as฀applied฀against฀the฀performance฀criteria฀set฀by฀the฀Committee฀for฀a฀performance฀cycle.฀The฀perfor-
mance฀formula฀will฀establish฀what฀percentage฀of฀the฀participant’s฀target฀award฀has฀been฀earned.฀฀
The฀Committee฀will฀select:฀1)฀the฀length฀of฀the฀performance฀cycle;฀2)฀the฀types฀of฀performance฀awards฀to฀be฀issued;฀3)฀the฀performance฀criteria฀that฀will฀
be฀used฀to฀establish฀the฀performance฀formula,฀which฀may฀be฀on฀a฀corporate-wide฀basis฀based฀on฀aggregate฀Company฀performance฀or฀performance฀at฀the฀
subsidiary฀or฀business฀unit฀or฀business฀segment฀level;฀and฀4)฀how฀to฀apply฀the฀performance฀formula.
Performance฀awards฀granted฀to฀“covered฀employees”฀will฀comply฀with฀Section฀162(m)฀of฀the฀Internal฀Revenue฀Code.฀
Stock฀Options
The฀Committee฀may฀grant฀awards฀in฀the฀form฀of฀stock฀options฀to฀purchase฀shares฀of฀the฀Company’s฀common฀stock.฀For฀each฀stock฀option฀grant,฀the฀Com-
mittee฀will฀determine฀the฀number฀of฀shares฀subject฀to฀the฀option฀and฀the฀manner฀and฀time฀of฀the฀option’s฀exercise,฀provided฀that฀no฀stock฀option฀will฀be฀
exercisable฀after฀seven฀years฀from฀the฀date฀of฀its฀grant.฀The฀minimum฀vesting฀schedule฀for฀a฀stock฀option฀is฀one฀year฀unless฀the฀participant’s฀employment฀
is฀terminated฀under฀certain฀circumstances฀or฀if฀there฀is฀a฀Change฀in฀Control฀of฀the฀Company.฀The฀exercise฀price฀of฀a฀stock฀option฀may฀not฀be฀less฀than฀
100%฀of฀the฀fair฀market฀value฀of฀the฀Company’s฀common฀stock฀on฀the฀date฀the฀stock฀option฀is฀granted.฀Upon฀exercise,฀a฀participant฀may฀pay฀the฀exercise฀