Exhibit (10.18)
EASTMAN KODAK
COMPANY
2000 OMNIBUS LONG-TERM
COMPENSATION PLAN
Article Page
1. Purpose
and Term of
Plan 1
2. Definitions
2
3. Eligibility
13
4. Plan
Administration 14
5. Forms
of
Awards
16
6. Shares
Subject to
Plan 17
7. Performance
Awards 19
8. Stock
Options 21
9. Stock
Appreciation
Rights 25
10. Stock
Awards 26
11. Performance
Units 27
12. Performance
Shares 28
13. Performance
Stock
Program 29
14. Payment
of
Awards
33
15. Dividend
and Dividend
Equivalents 35
16. Deferral
of
Awards 36
17. Change
In
Ownership 37
18. Change
In
Control
42
19. Miscellaneous 47
Exhibit
A Rules
of the 2000 Omnibus Long-Term Compensation
Plan for French
Employees
Exhibit
B Australian
Addendum
Exhibit
C Rules
of the Eastman Kodak Company
2000 Omnibus
Long-Term Compensation Plan for Grants
to French
Employees on or After August 26, 2002
Exhibit
D
Australian Addendum for Grants On or After
Ó
2002, Eastman Kodak
Company
As Amended Effective January 1,
2009
ARTICLE
1 -- PURPOSE AND TERM OF PLAN
The purpose of
the Plan is to provide motivation to selected Employees and
Directors to put forth maximum efforts toward the continued growth,
profitability, and success of the Company by providing incentives
to such Employees and Directors through the ownership and
performance of Kodak Common Stock.
The Plan will
become effective on January 1, 2000, subject to its approval by
Kodak's shareholders at the 1999 Annual Meeting of the
Shareholders. Awards may not be granted after December
31, 2004; except that the Committee may grant Awards after this
date in recognition of performance for Performance Cycles
commencing prior to such date.
In any
necessary construction of a provision of this Plan, the masculine
gender may include the feminine, and the singular may include the
plural, and vice versa. This Plan should be construed in
a manner consistent with the intent of Kodak to establish an
omnibus long-term compensation plan subject to fixed accounting
treatment.
“Approved
Reason” means a reason for terminating employment with the
Company which, in the opinion of the Committee, is in the best
interests of the Company.
"Award" means
any form of stock option, stock appreciation right, Stock Award,
performance unit, performance share, Performance Award, shares of
Common Stock under the Performance Stock Program, or other
incentive award granted under the Plan, whether singly, in
combination, or in tandem, to a Participant by the Committee
pursuant to such terms, conditions, restrictions and/or
limitations, if any, as the Committee may establish by the Award
Notice or otherwise.
"Award Notice"
means the written document establishing the terms, conditions,
restrictions, and/or limitations of an Award in addition to those
established by this Plan and by the Committee's exercise of its
administrative powers. The Committee will establish the
form of the written document in the exercise of its sole and
absolute discretion. The Committee may, but need not,
require a Participant to sign a copy of the Award Notice as a
precondition to receiving an Award.
“Award
Payment Date” means, for a Performance Cycle, the date the
Awards for such Performance Cycle shall be paid to
Participants. The Award Payment Date for a Performance
Cycle shall occur as soon as administratively possible following
the completion of the certifications required pursuant to
Subsection 13.5(c).
"Board" means
the Board of Directors of Kodak.
“Capital
Charge” means, for a Performance Period, the amount obtained
by multiplying the Cost of Capital for the Performance Period by
the Operating Net Assets for the Performance Period.
"Cause" means
(a) the willful and continued failure by an Employee to
substantially perform his or her duties with his or her employer
after written warnings identifying the lack of substantial
performance are delivered to the Employee by his or her employer to
specifically identify the manner in which the employer believes
that the Employee has not substantially performed his or her
duties, or (b) the willful engaging by an Employee in illegal
conduct which is materially and demonstrably injurious to Kodak or
a Subsidiary.
“CEO” means the Chief Executive
Officer of Kodak.
“Change
in Control” means the occurrence of any one of the following
events:
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individuals
who, on December 9, 1999, constitute the Board (the
“Incumbent Directors”) cease for any reason to
constitute at least a majority of the Board, provided that any
person becoming a director subsequent to December 9, 1999, whose
election or nomination for election was approved by a vote of at
least two-thirds of the Incumbent Directors then on the Board
(either by a specific vote or by approval of the proxy statement of
Kodak in which such person is named as a nominee for director,
without written objection to such nomination) shall be an Incumbent
Director; provided , however , that no individual
initially elected or nominated as a director of Kodak as a result
of an actual or threatened election contest (as described in Rule
14a-11 under the Act) (“Election Contest”) or any other
actual or threatened solicitation of proxies or consents by or on
behalf of any “person” (as such term is defined in
Section 3(a)(9) of the Act) other than the Board (“Proxy
Contest”), including by reason of any agreement intended to
avoid or settle any Election Contest or Proxy Contest, shall be
deemed to be an Incumbent Director;
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any person is
or becomes a “beneficial owner” (as defined in Rule
13d-3 under the Act), directly or indirectly, of securities of
Kodak representing 25% or more of the combined voting power of
Kodak’s then outstanding securities eligible to vote
for
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the election of
the Board (the “Kodak Voting Securities”);
provided , however , that the event described in this
paragraph (b) shall not be deemed to be a Change in Control by
virtue of any of the following acquisitions: (1) by Kodak or
any
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Subsidiary, (2)
by any employee benefit plan (or related trust) sponsored or
maintained by Kodak or any Subsidiary, or (3) by any underwriter
temporarily holding securities pursuant to an offering of such
securities;
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the
consummation of a merger, consolidation, statutory share exchange
or similar form of corporate transaction involving Kodak or any of
its Subsidiaries that requires the approval of Kodak’s
shareholders, whether for such transaction or the issuance of
securities in the transaction (a “Reorganization”), or
sale or other disposition of all or substantially all of
Kodak’s assets to an entity that is not an affiliate of Kodak
(a “Sale”), unless immediately following such
Reorganization or Sale: (1) more than 60% of the total
voting power of (x) the corporation resulting from such
Reorganization or Sale (the “Surviving Company”), or
(y) if applicable, the ultimate parent corporation that directly or
indirectly has beneficial ownership of 100% of the voting
securities eligible to elect directors of the Surviving Company
(the “Parent Company”), is represented by Kodak Voting
Securities that were outstanding immediately prior to such
Reorganization or Sale (or, if applicable, is represented by shares
into which such Kodak Voting Securities were converted pursuant to
such Reorganization or Sale), and such voting power among the
holders thereof is in substantially the same proportion as the
voting power of such Kodak Voting Securities among the holders
thereof immediately prior to the Reorganization or Sale, (2) no
person (other than any employee benefit plan (or related trust)
sponsored or maintained by the Surviving Company or the Parent
Company), is or becomes the beneficial owner, directly or
indirectly, of 25% or more of the total voting power of the
outstanding voting securities eligible to elect directors of the
Parent Company (or, if there is no Parent Company, the Surviving
Company) and (3) at least a majority of the members of the board of
directors of the Parent Company (or, if there is no Parent Company,
the Surviving Company) following the consummation of the
Reorganization or Sale were Incumbent Directors at the time of the
Board’s approval of the execution of the initial agreement
providing for such Reorganization or Sale (any Reorganization or
Sale which satisfies all of the criteria specified in (1), (2) and
(3) above shall be deemed to be a “Non-Qualifying
Transaction”); or
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the
shareholders of Kodak approve a plan of complete liquidation or
dissolution of Kodak.
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Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur
solely because any person acquires beneficial ownership of more
than 25% of Kodak Voting Securities as a result of the acquisition
of Kodak Voting Securities by Kodak which reduces the number
of
Kodak Voting
Securities outstanding; provided that if after such
acquisition by Kodak such person becomes the beneficial owner of
additional Kodak Voting Securities that increases the percentage of
outstanding Kodak Voting Securities beneficially owned by such
person, a Change in Control shall then occur.
2.10 Change
In Control Price
"Change In
Control Price" means the highest closing price per share paid for
the purchase of Common Stock on the New York Stock Exchange during
the ninety (90) day period ending on the date the Change In Control
occurs.
"Change In
Ownership" means a Change In Control that results directly or
indirectly in Kodak's Common Stock ceasing to be actively traded on
the New York Stock Exchange.
"Code" means
the Internal Revenue Code of 1986, as amended from time to time,
including regulations thereunder and successor provisions and
regulations thereto.
“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 three or more
directors, all of whom are both a “Non-Employee
Director” within the meaning of Rule 16b-3 under the Exchange
Act and an “outside director” within the meaning of the
definition of such term as contained in Proposed Treasury
Regulation Section 1.162-27(e)(3), or any successor definition
adopted.
"Common Stock"
means common stock, $2.50 par value per share, of Kodak that may be
newly issued or treasury stock.
“Company” means Kodak and its
Subsidiaries.
“Cost of
Capital” means, for a Performance Period, the estimated
weighted average of the Company’s cost of equity and cost of
debt for the Performance Period as determined by the Committee in
its sole and absolute discretion. The Committee
will
determine the
Cost of Capital for a Performance Period within the first 90 days
of the Performance Period.
“Covered
Employee” means an Employee who is a “Covered
Employee” within the meaning of Section 162(m) of the
Code.
“Director” means a non-employee
member of the Board.
“Disability” means a disability
under the terms of the long-term disability plan maintained by the
Participant’s employer, or in the absence of such a plan, the
Kodak Long-Term Disability Plan.
“Economic
Profit” means, for a Performance Period, the Net Operating
Profit After Tax that remains after subtracting the Capital Charge
for such Performance Period. Economic Profit may be
expressed as follows: Economic Profit = Net Operating Profit After
Tax – Capital Charge. Economic Profit may be
either positive or negative.
2.21 Economic
Value Added or EVA
“Economic
Value Added or EVA” means Economic Profit for the current
year minus Economic Profit for the immediately prior
year.
“Effective Date” means the date an
Award is determined to be effective by the Committee upon its grant
of such Award.
"Employee"
means: (a) any person employed by Kodak on a full or part time
basis; (b) any person employed by a Subsidiary on a full or part
time basis; or (c) any person employed by a foreign country
identified in writing by the Committee who is providing
services to a
Subsidiary pursuant to a written contract between such country and
the Company and who would, but for the laws of such country,
otherwise be classified by the Subsidiary as an
Employee.
"Exchange Act"
means the Securities and Exchange Act of 1934, as amended from time
to time, including rules thereunder and successor provision and
rules thereto.
“Key
Employee” means a senior level Employee who holds a position
of responsibility in a managerial, administrative, or professional
capacity.
"Kodak" means
Eastman Kodak Company.
“Negative
Discretion” means the discretion authorized by the Plan to be
applied by the Committee in determining the size of an Award for a
Performance Period or Performance Cycle if, in the
Committee’s sole judgment, such application is
appropriate. Negative Discretion may only be used by the
Committee to eliminate or reduce the size of an
Award. By way of example and not by way of limitation,
in no event shall any discretionary authority granted to the
Committee by the Plan, including, but not limited to Negative
Discretion, be used to: (a) grant Awards for a Performance Period
or Performance Cycle if the Performance Goals for such Performance
Period or Performance Cycle have not been attained; or (b) increase
an Award above the maximum amount payable under Sections 7.5, 8.6,
9.6 or 13.6 of the Plan.
2.28 Net
Operating Profit After Tax
“Net
Operating Profit After Tax” means, for a Performance Period,
the after-tax operating earnings of the Company for the Performance
Period adjusted for interest expense and Wang in-process
R&D. The Committee is authorized at any time during
the first 90 days of a Performance Period, or at any time
thereafter in its sole and absolute discretion, to adjust or modify
the calculation of Net Operating Profit After Tax for such
Performance Period in order to prevent the dilution or enlargement
of the rights of Participants, (a) in the event of, or in
anticipation of, any dividend or other distribution (whether in the
form of cash, securities or other property), recapitalization,
restructuring, reorganization, merger, consolidation, spin off,
combination, repurchase, share exchange, liquidation, dissolution,
or other similar corporate transaction, event or development; (b)
in recognition of, or in anticipation of, any other unusual or
nonrecurring event 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; (c)
in recognition of, or in anticipation of, any other extraordinary
gains or losses; and (d) 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. However, if and to
the extent the exercise of such authority after the first 90 days
of a Performance Period would cause the Awards granted to the
Covered Employees for the Performance Period to fail to qualify as
“Performance-Based Compensation” under Section 162(m)
of the Code, then such authority shall only be exercised with
respect to those Participants who are not Covered
Employees.
2.29 Operating
Net Assets
“Operating Net Assets” means, for a
Performance Period, the net investment used in the operations of
the Company. Operating Net Assets is calculated from the
Company’s audited consolidated financial statements as being
total assets minus non-interest-bearing liabilities adjusted for
LIFO inventories, postemployment benefits other than pensions
(OPEB) and Wang in-process R&D. The Committee is
authorized at any time during a Performance Period to adjust or
modify the calculation of Operating Net Assets for such Performance
Period in order to prevent the dilution or enlargement of the
rights of Participants, (a) in the event of, or in anticipation of,
any dividend or other distribution (whether in the form of cash,
securities or other property), recapitalization, restructuring,
reorganization, merger, consolidation, spin off, combination,
repurchase, share exchange, liquidation, dissolution, or other
similar corporate transaction, event or development; (b) in
recognition of, or in anticipation of, any other unusual or
nonrecurring event 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; (c) in recognition of, or in anticipation
of, any other extraordinary gains or losses; and (d) 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. However, if and to the extent the exercise of
such authority after the first 90 days of a Performance Period
would cause the Awards granted to the Covered Employees for the
Performance Period to fail to qualify as “Performance-Based
Compensation” under Section 162(m) of the Code, then such
authority shall only be exercised with respect to those
Participants who are not Covered Employees.
"Participant"
means either an Employee or Director to whom an Award has been
granted by the Committee under the Plan or a Key Employee who, for
a Performance Cycle, has been selected to participate in the
Performance Stock Program.
“Performance Awards” means the Stock
Awards, Performance units and Performance Shares granted to Covered
Employees pursuant to Article 7. All Performance Awards
are intended to qualify as “Performance-Based
Compensation” under Section 162(m) of the Code.
2.32 Performance
Criteria
“Performance Criteria” means the one
or more criteria that the Committee shall select for purposes of
establishing the Performance Goal(s) for a Performance Period or
Performance Cycle. The Performance Criteria that will be
used to establish such Performance Goal(s) shall be limited to the
following: Economic Profit/EVA, return on net assets
(“RONA”), return on shareholders’ equity, return
on assets, return on capital, shareholder returns, total
shareholder return, profit margin, earnings per share, net
earnings, operating earnings, Common Stock price per share, and
sales or market share. To the extent required by Section
162(m) of the Code, the Committee shall, within the first 90 days
of a Performance Period or Performance Cycle (or, if longer, within
the maximum period allowed under Section 162(m) of the Code),
define in an objective fashion the manner of calculating the
Performance Criteria it selects to use for such Performance Period
or Performance Cycle.
“Performance Cycle” means the one or
more periods of time, which may be of varying and overlapping
durations, as the Committee may select, over which the attainment
of one or more Performance Goals will be measured for the purpose
of determining a Participant’s right to and the payment of an
Award under the Performance Stock Program. In no event,
however, shall a Performance Cycle exceed 3 years.
“Performance Formula” means, for a
Performance Period or Performance Cycle, the one or more objective
formulas applied against the relevant Performance Goal(s) to
determine, with regards to the Award of a particular Participant,
whether all, some portion but less than all, or none of the Award
has been earned for the Performance Period or Performance
Cycle. In the case of an Award under the Performance
Stock Program, in the event the Performance Goal(s) for a
Performance Cycle are achieved, the Performance Formula shall
determine what percentage of the Participant’s Target Award
for the Performance Cycle will be earned.
“Performance Goals” means, for a
Performance Period or Performance Cycle, the one or more goals
established by the Committee for the Performance Period or
Performance Cycle based upon the Performance
Criteria. The Committee is authorized at any time during
the first 90 days of a Performance Period or Performance Cycle, or
at any time thereafter (but only to the extent the exercise of such
authority after the first 90 days of a Performance Period or
Performance Cycle would not cause the Awards granted to the Covered
Employees for the Performance Period or Performance Cycle to fail
to qualify as “Performance-Based Compensation” under
Section 162(m) of the Code), in its sole and absolute discretion,
to adjust or modify the calculation of a Performance Goal for such
Performance Period or 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.
“Performance Period” means the one
or more periods of time, which may be of varying and overlapping
durations, as the Committee may select, over which the attainment
of one or more Performance Goals will be measured for the purpose
of determining a Participant’s right to and the payment of a
Performance Award. In the case of Awards issued under
Article 8 or Article 9 hereof, the Performance Period shall be
Kodak’s fiscal year.
2.37 Performance
Stock Program
“Performance Stock Program” means
the program established under Article 13 of the Plan pursuant to
which selected Key Employee receive Awards for a Performance Cycle
in the form of shares of Common Stock based upon attainment of
Performance Goals for such Performance Cycle. All Awards
granted to Covered Employees under the Performance Stock Program
are intended to qualify as “Performance-based
Compensation” under Section 162(m) of the Code.
"Plan" means
the 2000 Omnibus Long-Term Compensation Plan.
“Retirement” means, in the case of a
Participant employed by Kodak, voluntary termination of employment:
(i) on or after age 55 with 10 or more years of service or on or
after age 65; or (ii) at any time if the Participant had an age and
years of service combination of at least 75 points on December 31,
1995. In the case of a Participant employed by a
Subsidiary, “Retirement” means early or normal
retirement under the terms of the Subsidiary’s retirement
plan, or if the Subsidiary does not have a retirement plan,
termination of employment on or after age 60. A
Participant must voluntarily terminate his or her employment in
order for his or her termination of employment to be for
“Retirement.”
“Section
409A” means Section 409A of the Code, and the Treasury
Regulations promulgated and other official guidance issued
thereunder.
2.41 Section
409A Change in Control
“Section
409A Change in Control” means an event that qualifies as a
“change in the ownership or effective control of the
corporation, or in the ownership of a substantial portion of the
assets of the corporation” within the meaning of Sections
1.409A-3(a)(5) and 1.409A-3(i)(5) of the Treasury
regulations.
"Stock Award"
means an award granted pursuant to Article 10 in the form of shares
of Common Stock, restricted shares of Common Stock, and/or Units of
Common Stock.
"Subsidiary"
means a corporation or other business entity in which Kodak
directly or indirectly has an ownership interest of 50 percent or
more except that with respect to incentive stock options,
"Subsidiary" shall mean "subsidiary corporation" as defined in
Section 424(f) of the Code.
“Target
Award” means, for a Performance Cycle, the target award
amount, expressed as a number of shares of Common Stock,
established for each wage grade by the Committee for the
Performance Cycle. The fact, however, that a Target
Award is established for a Participant’s wage grade shall not
in any manner entitle the Participant to receive an Award for such
Performance Cycle.
"Unit" means a
bookkeeping entry used by the Company to record and account for the
grant of the following Awards until such time as the Award is paid,
canceled, forfeited or terminated, as the case may be: Units of
Common Stock, performance units, and performance shares which are
expressed in terms of Units of Common Stock.
Subject to
Section 3.2, all Employees and Directors are eligible to
participate in the Plan. The Committee may select, from
time to time, Participants from those Employees who, in the opinion
of the Committee, can further the Plan's purposes. In
addition, the Committee may select, from time to time, Participants
from those Directors (who may or may not be Committee members) who,
in the opinion of the Committee, can further the Plan’s
purposes. Once a Participant is so selected, the
Committee shall determine the type(s) of Awards to be made to the
Participant and shall establish in the related Award Notice(s) the
terms, conditions, restrictions and/or limitations, if any,
applicable to the Award(s) in addition to those set forth in this
Plan and the administrative rules and regulations issued by the
Committee.
3.2 Performance
Stock Program
Only Key
Employees shall be eligible to participate in the Performance Stock
Program.
ARTICLE
4 -- PLAN ADMINISTRATION
The Committee
shall have total and exclusive responsibility to control, operate,
manage and administer the Plan in accordance with its
terms.
4.2 Authority
of the Committee
The Committee
shall have all the authority that may be necessary or helpful to
enable it to discharge its responsibilities with respect to the
Plan. Without limiting the generality of the preceding
sentence, the Committee shall have the exclusive right to: (a)
select the Participants and determine the type of Awards to be made
to Participants, the number of shares subject to Awards and the
terms, conditions, restrictions and limitations of the Awards; (b)
interpret the Plan; (c) determine eligibility for participation in
the Plan; (d) decide all questions concerning eligibility for and
the amount of Awards payable under the Plan; (e) construe any
ambiguous provision of the Plan; (f) correct any default; (g)
supply any omission; (h) reconcile any inconsistency; (i) issue
administrative guidelines as an aid to administer the Plan and make
changes in such guidelines as it from time to time deems proper;
(j) make regulations for carrying out the Plan and make changes in
such regulations as it from time to time deems proper; (k)
determine whether Awards should be granted singly, in combination
or in tandem; (l), to the extent permitted under the Plan, grant
waivers of Plan terms, conditions, restrictions, and limitations;
(m) accelerate the vesting, exercise, or payment of an Award or the
performance period of an Award when such action or actions would be
in the best interest of the Company and in compliance with Section
409A and other applicable tax law; (n) establish such other types
of Awards, besides those specifically enumerated in Article 5
hereof, which the Committee determines are consistent with the
Plan's purpose; (o) subject to Section 8.2, grant Awards in
replacement of Awards previously granted under this Plan or any
other executive compensation plan of the Company; (p) establish and
administer the Performance Goals and certify whether, and to what
extent, they have been attained; (q) determine the terms and
provisions of any agreements entered into hereunder; (r) take any
and all other action it deems necessary or advisable for the proper
operation or administration of the Plan; and (s) make all other
determinations it deems necessary or advisable for the
administration of the Plan, including factual
determinations.
4.3 Discretionary
Authority
The Committee
shall have full discretionary authority in all matters related to
the discharge of its responsibilities and the exercise of its
authority under the Plan including, without limitation, its
construction of the terms of the Plan and its determination of
eligibility for participation and Awards under the
Plan. It is the intent of Plan that the decisions of the
Committee and its actions with respect to the Plan shall be final,
binding and conclusive upon all persons having or claiming to have
any right or interest in or under the Plan.
4.4 Section
162(m) of the Code
With regards to
all Covered Employees, the Plan shall, for all purposes, be
interpreted and construed in accordance with Section 162(m) of the
Code.
4.5 Action
by the Committee
The Committee
may act only by a majority of its members. Any
determination of the Committee may be made, without a meeting, by a
writing or writings signed by all of the members of the
Committee. In addition, the Committee may authorize any
one or more of its number to execute and deliver documents on
behalf of the Committee.
4.6 Allocation
and Delegation of Authority
The Committee
may allocate all or any portion of its responsibilities and powers
under the Plan to any one or more of its members and may delegate
all or any part of its responsibilities and powers to any person or
persons selected by it provided that any such allocation or
delegation be in writing; provided, however, that only the
Committee may select and grant Awards to Participants who are
subject to Section 16 of the Exchange Act or are Covered
Employees. The Committee may revoke any such allocation
or delegation at any time for any reason with or without prior
notice.
ARTICLE
5 -- FORM OF AWARDS
Awards may, at
the Committee’s sole discretion, be paid in the form of
Performance Awards pursuant to Article 7, stock options pursuant to
Article 8, stock appreciation rights pursuant to Article 9, Stock
Awards pursuant to Article 10, performance units pursuant to
Article 11, performance shares pursuant to Article 12, shares of
Common Stock pursuant to Article 13, any form established by the
Committee pursuant to Subsection 4.2(n), or a combination
thereof. All Awards shall be subject to the terms,
conditions, restrictions and limitations of the
Plan. The Committee may, in its sole judgment, subject
an Award to such other terms, conditions, restrictions and/or
limitations (including, but not limited to, the time and conditions
of exercise and restrictions on transferability and vesting),
provided they are not inconsistent with the terms of the
Plan. Awards under a particular Article of the Plan need
not be uniform and Awards under two or more Articles may be
combined into a single Award Notice. Any combination of
Awards may be granted at one time and on more than one occasion to
the same Participant. For purposes of the Plan, the
value of any Award granted in the form of Common Stock shall be the
mean between the high and low at which the Common Stock trades on
the New York Stock Exchange as of the date of the grant’s
Effective Date.
5.2 Foreign
Jurisdictions
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Special
Terms . In
order to facilitate the making of any Award to Participants who are
employed by the Company outside the United States (or who are
foreign nationals temporarily within the United States), the
Committee may provide for such modifications and additional terms
and conditions ("special terms") in Awards as the Committee may
consider necessary or appropriate to accommodate differences in
local law, policy or custom or to facilitate administration of the
Plan. The special terms may provide that the grant of an
Award is subject to (1) applicable governmental or regulatory
approval or other compliance with local legal requirements and/or
(2) the execution by the Participant of a written instrument in the
form specified by the Committee, and that in the event such
conditions are not satisfied, the grant shall be
void. The special terms may also provide that an Award
shall become exercisable or redeemable, as the case may be, if an
Employee's employment with the Company ends as a result of
workforce reduction, realignment or similar measure and the
Committee may designate a person or persons to make such
determination for a location. The Committee may adopt or
approve sub-plans, appendices or supplements to, or amendments,
restatements, or alternative versions of, the Plan as it may
consider necessary or appropriate for purposes of implementing any
special terms, without thereby affecting the terms of the Plan as
in effect for any other purpose; provided, however, no such
sub-plans, appendices or supplements to, or amendments,
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restatements,
or alternative versions of, the Plan shall: (a) increase the
limitations contained in Sections 6.3, 7.5, 8.6, 9.6 and 13.6; (b)
increase the number of available shares under Section 6.1; or (c)
cause the Plan to cease to satisfy any conditions of Rule 16b-3
under the Exchange Act or, with respect to Covered Employees,
Section 162(m) of the Code.
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Currency
Effects . Unless otherwise specifically
determined by the Committee, all Awards and payments pursuant to
such Awards shall be determined in U.S. currency. The
Committee shall determine, in its discretion, whether and to the
extent any payments made pursuant to an Award shall be made in
local currency, as opposed to U.S. dollars. In the event
payments are made in local currency, the Committee may determine,
in its discretion and without liability to any Participant, the
method and rate of converting the payment into local
currency.
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Modifications to Awards . The Committee shall have the right
at any time and from time to time and without prior notice to
modify outstanding Awards to comply with or satisfy local laws and
regulations or to avoid costly governmental filings. By
means of illustration but not limitation, the Committee may
restrict the method of exercise of an Award to avoid securities
laws or exchange control filings, laws or
regulations. Notwithstanding the foregoing, the
Committee may not modify an outstanding Award without the consent
of the affected Participant if such modification would cause the
Award to violate Section 409A.
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Acquired
Rights . No
Employee in any country shall have any right to receive an Award,
except as expressly provided for under the Plan. All
Awards made at any time are subject to the prior approval of the
Committee.
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ARTICLE
6 -- SHARES SUBJECT TO
PLAN
The maximum
number of shares of Common Stock, $2.50 par value per share, of
Kodak which shall be available for grant of Awards under the Plan
(including incentive stock options) during its term shall not
exceed 22,000,000. (Such amount shall be subject to
adjustment as provided in Section 6.2.) Any shares of
Common Stock related to Awards which terminate by expiration,
forfeiture, cancellation or otherwise without the issuance of such
shares, are settled in cash in lieu of Common Stock, or are
exchanged with the Committee's permission for Awards not involving
Common Stock, shall be available again for grant under the
Plan. Moreover, if the option price of any stock option
granted under the Plan is satisfied by tendering shares of Common
Stock to the Company (by either actual delivery or by attestation),
only the number of shares of Common Stock issued net of the shares
of Common Stock tendered will be deemed delivered for purposes of
determining the maximum number of shares of Common Stock available
for delivery under the Plan. The maximum number of
shares available for issuance under the Plan shall not be reduced
to reflect any dividends or dividend equivalents that are
reinvested into additional shares of Common Stock or credited as
additional performance shares. The shares of Common
Stock available for issuance under the Plan may be authorized and
unissued shares or treasury shares.
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In
General . The
provisions of this Subsection 6.2(a) are subject to the limitation
contained in Subsection 6.2(b). If there is any change
in the number of outstanding shares of Common Stock through the
declaration of stock dividends, stock splits or the like, the
number of shares available for Awards, the shares subject to any
Award and the option prices or exercise prices of Awards shall be
automatically adjusted. If there is any change in the
number of outstanding shares of Common Stock through any change in
the capital account of Kodak, or through a merger, consolidation,
separation (including a spin off or other distribution of stock or
property), reorganization (whether or not such reorganization comes
within the meaning of such term in Section 368(a) of the Code) or
partial or complete liquidation, the Committee shall make
appropriate adjustments in the maximum number of shares of Common
Stock which may be issued under the Plan and any adjustments and/or
modifications to outstanding Awards as it, in its sole discretion,
deems appropriate. In the event of any other change in
the capital structure or in the Common Stock of Kodak, the
Committee shall also be authorized to make such appropriate
adjustments in the maximum number of shares of Common Stock
available for issuance under the Plan and any adjustments and/or
modifications to outstanding Awards as it, in its sole discretion,
deems appropriate. The maximum number of shares
available for issuance under the Plan shall be automatically
adjusted to the extent necessary to reflect any
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dividend
equivalents paid in the form of Common Stock.
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Covered
Employees . In
no event shall the Award of any Participant who is a Covered
Employee be adjusted pursuant to Subsection 6.2(a) to the extent it
would cause such Award to fail to qualify as
“Performance-Based Compensation” under Section 162(m)
of the Code.
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Maximum
Number of Shares for Stock Awards, Performance Units and
Performance Shares
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Plan
Limit . From
the maximum number of shares available for issuance under the Plan
under Section 6.1, the maximum number of shares of Common Stock,
$2.50 par value per share, which shall be available for Awards
granted in the form of Stock Awards under Article 10, performance
units under Article 11 and performance shares under Article 12
(including those issued in the form of Performance Awards under
Article 7) under the Plan during its term shall be
3,500,000. If granted, 1,000,000 of these shares may be
awarded only if the Company achieves a specific Performance
Goal. The Performance Goal is total shareholder return
by the Company equal to at least that earned over the same period
by a company at the 50 th percentile in terms of total shareholder return
within the Standard & Poor’s 500 Composite Stock Price
Index. Fifty percent of the Award will be earned if this
Performance Goal is achieved. One hundred percent of the
Award will be earned if total shareholder return for the period
equals that of a company at the 60 th percentile in terms of total shareholder return
within the Standard & Poor’s Composite Stock Price
Index.
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Annual
Limit . The
maximum number of shares of Common Stock, $2.50 par value per
share, that may be awarded to any one Participant in a single
calendar year in the form of Stock Awards under Article 10,
performance units under Article 11 and performance shares under
Article 12 (including those issued in the form of Performance
Awards under Article 7) is 75,000 shares of Common
Stock.
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ARTICLE
7 -- PERFORMANCE AWARDS
For purposes of
grants issued to Covered Employees, the provisions of this Article
7 shall apply in addition to and, where necessary, in lieu of the
provisions of Articles 10, 11 and 12. The purpose of
this Article is to provide the Committee the ability to qualify the
Stock Awards authorized under Article 10, the performance units
under Article 11, and the performance shares under Article 12 as
“Performance-Based Compensation” under Section 162(m)
of the Code. The provisions of this Article 7 shall
control over any contrary provision contained in Articles 10, 11 or
12.
Only Covered
Employees shall be eligible to receive Performance
Awards. The Committee will, in its sole discretion,
designate within the first 90 days of a Performance Period (or, if
longer, within the maximum period allowed under Section 162(m) of
the Code) which Covered Employees will be Participants for such
period. However, designation of a Covered Employee as a
Participant for a Performance Period shall not in any manner
entitle the Participant to receive an Award for the
period. The determination as to whether or not such
Participant becomes entitled to an Award for such Performance
Period shall be decided solely in accordance with the provisions of
this Article 7. Moreover, designation of a Covered
Employee as a Participant for a particular Performance Period shall
not require designation of such Covered Employee as a Participant
in any subsequent Performance Period and designation of one Covered
Employee as a Participant shall not require designation of any
other Covered Employee as a Participant in such period or in any
other period.
7.3 Discretion
of Committee with Respect to Performance Awards
With regards to
a particular Performance Period, the Committee shall have full
discretion to select the length of such Performance Period, the
type(s) of Performance Awards to be issued, the Performance
Criteria that will be used to establish the Performance Goal(s),
the kind(s) and/or level(s) of the Performance Goal(s), whether the
Performance Goal(s) is(are) to apply to the Company, Kodak, a
Subsidiary, or any one or more subunits of the foregoing, and the
Performance Formula. Within the first 90 days of a
Performance Period (or, if longer, within the maximum period
allowed under Section 162(m) of the Code), the Committee shall,
with regards to the Performance Awards to be issued for such
Performance Period, exercise its discretion with respect to each of
the matters enumerated in the immediately preceding sentence of
this Section 7.3 and record the same in writing.
7.4 Payment
of Performance Awards
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Condition to
Receipt of Performance Award . Unless otherwise provided in the
relevant Award Notice, a Participant must be employed by the
Company on the last day of a Performance Period to be eligible for
a Performance Award for such Performance Period.
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Limitation . A Participant shall be eligible to
receive a Performance Award for a Performance Period only to the
extent that: (1) the Performance Goals for such period are
achieved; and (2) the Performance Formula as applied against such
Performance Goals determines that all or some portion of such
Participant’s Performance Award has been earned for the
Performance Period.
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Certification . Following the completion of a
Performance Period, the Committee shall meet to review and certify
in writing whether, and to what extent, the Performance Goals for
the Performance Period have been achieved and, if so, to also
calculate and certify in writing the amount of the Performance
Awards earned for the period based upon the Performance Formula.
The Committee shall then determine the actual size of each
Participant’s Performance Award for the Performance Period
and, in so doing, shall apply Negative Discretion, if and when it
deems appropriate.
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Negative
Discretion . In determining the actual size of
an individual Performance Award for a Performance Period, the
Committee may reduce or eliminate the amount of the Performance
Award earned under the Performance Formula for the Performance
Period through the use of Negative Discretion, if in its sole
judgment, such reduction or elimination is appropriate.
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Timing of
Award Payments . The Awards granted for a
Performance Period shall be paid to Participants as soon as
administratively possible following completion of the
certifications required by Subsection 7.4(c).
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7.5 Maximum
Award Payable
Notwithstanding
any provision contained in the Plan to the contrary, the maximum
Performance Award payable to any one Participant under the Plan for
a Performance Period is 75,000 shares of Common Stock or, in the
event the Performance Award is paid in cash, the equivalent cash
value thereof on the Performance Award’s Effective
Date.
ARTICLE
8 -- STOCK OPTIONS
Awards may be
granted in the form of stock options. These stock
options may be incentive stock options within the meaning of
Section 422 of the Code or n
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