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COMPENSATION
33
E A S T M A N฀ K OD A K ฀ C O M PA N Y
nCompensation
INDEBTEDNESS฀OF฀MANAGEMENT
Robert฀H.฀Brust
Under฀Mr.฀Brust’s฀December฀20,฀1999฀offer฀letter,฀the฀Company฀agreed฀to฀pay฀Mr.฀Brust฀$3,000,000฀because฀he฀forfeited฀75,000฀restricted฀shares฀of฀his฀
former฀employer’s฀common฀stock฀as฀a฀result฀of฀accepting฀employment฀with฀the฀Company.฀The฀arrangement฀was฀structured฀as฀a฀loan,฀the฀balance฀of฀which฀
would฀be฀forgiven฀over฀time,฀to฀incent฀Mr.฀Brust฀to฀continue฀his฀employment฀with฀the฀Company฀and฀provide฀him฀favorable฀tax฀treatment.฀฀
The฀loan,฀which฀is฀evidenced฀by฀a฀promissory฀note฀dated฀January฀6,฀2000,฀bears฀interest฀at฀a฀rate฀of฀6.21%฀per฀annum,฀the฀applicable฀federal฀rate฀for฀
mid-term฀loans,฀compounded฀annually,฀in฀effect฀for฀January฀2000.฀A฀portion฀of฀the฀principal฀and฀all฀of฀the฀accrued฀interest฀on฀the฀loan฀is฀forgiven฀on฀each฀
of฀the฀first฀seven฀anniversaries฀of฀the฀loan.฀Mr.฀Brust฀is฀not฀entitled฀to฀forgiveness฀on฀any฀anniversary฀date฀if฀he฀voluntarily฀terminates฀his฀employment฀or฀is฀
terminated฀for฀cause฀on฀or฀before฀the฀anniversary฀date.฀The฀balance฀due฀under฀the฀loan฀on฀March฀1,฀2005฀was฀$1,008,858;฀the฀largest฀aggregate฀amount฀
outstanding฀under฀the฀loan฀during฀2004฀was฀$1,909,800.
Daniel฀A.฀Carp
In฀March฀2001,฀the฀Company฀loaned฀Mr.฀Carp฀$1,000,000฀for฀the฀purchase฀of฀a฀home.฀The฀loan฀is฀unsecured฀and฀bears฀interest฀at฀5.07%฀per฀year,฀the฀
applicable฀federal฀rate฀for฀mid-term฀loans,฀compounded฀annually,฀in฀effect฀for฀March฀2001.฀The฀entire฀amount฀of฀the฀loan฀and฀all฀accrued฀interest฀is฀due฀
upon฀the฀earlier฀of฀March฀1,฀2006฀or฀the฀date฀of฀Mr.฀Carp’s฀termination฀of฀employment฀from฀the฀Company.฀The฀loan฀is฀evidenced฀by฀a฀promissory฀note฀
dated฀March฀2,฀2001.฀Mr.฀Carp฀pre-paid฀$700,000฀of฀the฀balance฀of฀the฀loan฀on฀April฀13,฀2004.฀The฀balance฀due฀under฀the฀loan฀on฀March฀1,฀2005฀was฀
$487,582;฀the฀largest฀aggregate฀amount฀outstanding฀under฀the฀loan฀during฀2004฀was฀$1,166,708.