Kodak 2005 Annual Report Download - page 193

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Cash Balance Component
Messrs. Perez, Brust, Faraci, Langley and Masson are the named executive offi cers who participate in the cash balance component of the pension
plan. Under the cash balance component of the Company’s pension plan, the Company establishes an account for each participating employee. Every
month the employee works, the Company credits the employee’s account with an amount equal to 4% of the employee’s monthly pay, as well as any
pay received under EXCEL. In addition, the ongoing balance of the employee’s account earns interest at the 30-year Treasury bond rate (or such other
similar rate as may be legally permitted or required). To the extent pay is deferred, or federal laws place limitations on the amount of pay that may be
taken into account under the plan, 4% of the excess pay is credited to an account established for the employee in an unfunded supplementary plan. If
a participating employee leaves the Company and is vested (fi ve or more years of service), the employee’s account balance will be distributed to the
employee in the form of a lump sum or monthly annuity. Participating employees whose account balance exceeds $1,000 also have the choice of
leaving their account balances in the plan to continue to earn interest.
Estimated annual benefi ts payable upon retirement at normal retirement age (i.e., age 65) under the cash balance component of the pension plan to
Messrs. Perez, Brust, Faraci, and Langley are refl ected in the following table. Mr. Masson retired on January 2, 2006 and was not fully vested under
the pension plan and, therefore, will not receive any benefi ts under the plan. The retirement benefi ts in the table are: 1) calculated using the named
executive offi cer’s account balance on December 31, 2005; and 2) based on the assumptions that each named executive offi cer will remain an
employee until age 65, that his account balance on December 31, 2005 will continue to earn interest at the 30-year Treasury bond rate (or such other
similar rate as may be legally permitted or required), and that the terms of the pension plan remain unchanged.
Name Estimated Annual Benefi ts Payable at Normal Retirement Age
A. M. Perez $ 95,688
R. H. Brust 67,008
P. J. Faraci 75,756
J. T. Langley 48,504
Supplemental Retirement Arrangements
Antonio M. Perez
Mr. Perez is eligible for a supplemental unfunded pension benefi t under the terms of his March 3, 2003 offer letter. Under this arrangement, if
Mr. Perez remains employed for three years, he will be treated as if eligible for the traditional defi ned benefi t component of the pension plan. For
this purpose, he will be considered to have completed eight years of service with the Company and attained age 65. If, instead, Mr. Perez remains
employed for nine years, he will be considered to have completed 25 years of service with the Company. Mr. Perez’s supplemental pension benefi t will
be offset by his cash balance benefi t.
Mr. Perez’s total estimated annual benefi t payable upon retirement at normal retirement age (i.e., 65) under his supplemental unfunded pension
arrangement, prior to offset for any cash balance benefi t, is $480,876. This estimate is based on the following assumptions: 1) that Mr. Perez will
remain an employee of the Company until age 65; 2) that his compensation will increase 3.75% per year; 3) that the terms of the pension plan will
remain unchanged; and 4) the following additional assumptions for purposes of converting his cash balance benefi t into an annuity: the cash balance
account accrues interest at 5% per year; a discount rate of 5%; and life expectancy using the 1994 Group Annuity Reserving Table for males and
females projected to 2002 at scale AA.
Robert H. Brust
In addition to the benefi ts described above, Mr. Brust is covered under a supplemental unfunded pension arrangement established under his amended
offer letter. This arrangement provides Mr. Brust a single life annuity of $12,500 per month upon his retirement if he remains employed with the
Company for at least fi ve years. Since Mr. Brust has remained employed until January 3, 2006, he will, in lieu of receiving the $12,500 per month
Retirement Plan Table
Name Years of Service Average Participating Compensation
D. A. Carp 35 $3,238,836
The following table shows the years of service credited as of December 31, 2005 to Mr. Carp. This table also shows the amount of Mr. Carp’s APC at
the end of 2005.