Kodak 2004 Annual Report Download - page 126
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Please find page 126 of the 2004 Kodak annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Proposals
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E A S T M A N K OD A K C O M PA N Y
ChangeInControlandChangeInOwnership
IntheeventofaChangeInControl(asdefinedinthePlan),ifaparticipant’semploymentisterminatedwithintwoyearsforareasonotherthandeath,
disability,cause,voluntaryresignationorretirement,theparticipantwillreceivethefollowingtreatment:
•theparticipantwillbepaidaprorataawardfortheperformanceperiodinwhichheorsheterminatesemployment;and
•alloftheparticipant’sotherunpaidawardswillbepaidtotheparticipant.
ThePlanalsoprovidesthatuponaChangeInOwnership,allparticipants,regardlessofwhethertheiremploymentisterminated,willautomaticallyreceive
thesametreatmentprovidedtoaterminatedparticipantintheeventofaChangeInControl.ThePlandefinesaChangeInOwnershipasaChangeIn
ControlthatresultsintheCompany’scommonstockceasingtobeactivelytradedontheNYSE.
TerminationandAmendmentofPlan
TheCompensationCommitteemayterminateoramendthePlanatanytimeforanyreasonornoreason.Withoutshareholderapproval,however,theCom-
pensationCommitteemaynotadoptanyamendmentaffecting“coveredemployees”thatrequiresthevoteoftheCompany’sshareholdersunderSection
162(m)oftheInternalRevenueCode.
FederalTaxTreatment
Undercurrentfederaltaxlaw,awardswillbeincludedinincomeatthetimeofreceiptandwillbesubjecttotaxatordinaryincometaxrates.TheCompany
willbeentitledtoacorrespondingdeductionatthesametime.
VoteRequired
Approvalofamendmentto,andre-approvalofthematerialtermsof,EXCELrequirestheaffirmativevoteofamajorityofthevotescastbytheholdersof
sharesentitledtovote.
TheBoardofDirectorsrecommendsavoteFORtheapprovalofamendmentto,andre-approvalofthematerialtermsof,theExecutiveCompen-
sationforExcellenceandLeadershipPlan.
ITEM5 — ApprovalofAmendmenttoSection5oftheRestatedCertificateofIncorporationRegarding
theElectionofDirectors
TheBoardofDirectorshasadoptedandnowrecommendsforyourapprovalaproposaltoamendSection5ofourRestatedCertificateofIncorporation,
toeliminatetheclassificationofourBoardofDirectorsandtoeliminatethelanguagethatpermitsanamendmentto,orrepealof,Section5onlyuponthe
voteofatleast80%ofthesharesoutstanding.
TheRestatedCertificateofIncorporationcurrentlydividesourBoardintothreeclasses,witheachclassofdirectorselectedtoservestaggeredthree-year
terms.TheBoardofDirectorshasadopted,andrecommendsthatyouapprove,aproposaltoamendourRestatedCertificateofIncorporationtophaseout
theclassifiedBoardandphaseintheannualelectionofdirectors.
TheCompanyandourBoardarecommittedtogoodcorporategovernance,whichiswhyourBoardhasmadedevelopingandimplementingcorporategov-
ernancebestpracticesoneofitsfundamentalgoals.Boardeffortsinthisregardareworking;wehavebeenrepeatedlyrecognizedasaglobalcorporate
governanceleader.
Overtheyears,ourBoardhascarefullyconsideredtheadvantagesanddisadvantagesofaclassifiedboard,andhasrepeatedlyconcludedthataclassified
boardisinthebestinterestsoftheCompanyanditsshareholders.Thispastyear,ourBoard,throughitsCorporateResponsibilityandGovernanceCom-
mittee,againreviewedtheclassifiedboard.Asithasdoneinthepast,theBoardsoughttheadviceofexternalcorporategovernanceexperts.
TheBoardcontinuestobelievethattheelectionofdirectorstostaggeredtermspromotesstrongcorporategovernancebyprovidingBoardstability,acriti-
calconsiderationforacompanylikeKodak,whichisundergoingafundamentalbusinesstransformation.TheBoardacknowledges,however,thegrowing
sentimentamongshareholdersinfavorofannualelections.Moreandmoreinvestorsviewclassifiedboardsasanachronismsthatreduceboardaccount-
abilitytoshareholders.TheBoardrecognizesthatannualelectionsareinlinewithemergingbestpracticesintheareaofcorporategovernance.
Asaresultofitsmostrecentreviewoftheclassifiedboardstructure,theBoard,ontherecommendationofitsCorporateResponsibilityandGovernance
Committee,hasdecidedtoproposedeclassifyingtheBoard.ThisdeterminationbytheBoardisresponsivetotheCompany’sshareholders,whohavevoted
infavorofshareholderproposalstodeclassifytheBoard,andconsistentwiththeBoard’scommitmenttobealeaderincorporategovernance.Declassifi-
cationwillbephasedinoverathree-yearperiod,beginningatthe2006annualmeeting,asfollows:
•ClassIdirectorsstandingforelectionatthe2006annualmeetingwouldbeelectedfortwo-yeartermsendingin2008.
•ClassIIdirectors,whosetermsendin2007,wouldserveouttheircurrenttermsinfullandstandforre-electionatthe2007annualmeetingfor
one-yeartermsendingin2008.
•ClassIIIdirectors,whosetermsendin2008,wouldcontinuetoserveouttheirtermsinfull.
ThisproposalwillnotaffecttheelectionofdirectorsatthisAnnualMeeting.WewillcontinuetohaveaclassifiedBoarduntilthe2008annualmeeting,at
whichtime,iftheproposalisapproved,alldirectorswillstandforelectiontoone-yearterms.