Exhibit (10.21)
EASTMAN KODAK
COMPANY
EXECUTIVE COMPENSATION FOR
EXCELLENCE AND LEADERSHIP
Article Page
1. Purpose,
Effective Date and Term of
Plan 1
2. Definitions 2
3. Eligibility
11
4. Plan
Administration 12
5. Forms
of
Awards
14
6. Setting
Performance Goals and Performance
Formula
15
7. Award
Determination 16
8. Payment
of Awards for a Performance
Period 19
9. Deferral
of
Awards 20
10. Intentionally
Omitted 21
11. Change
In
Ownership 22
12. Change
In
Control 24
13. Miscellaneous 26
As Amended Effective January 1,
2009
Ó
2008, Eastman Kodak
Company
ARTICLE
1 -- PURPOSE, EFFECTIVE DATE AND TERM OF
PLAN
The purposes of
the Plan are to provide an annual incentive to Key Employees of the
Company to put forth maximum efforts toward the continued growth
and success of the Company, to encourage such Key Employees to
remain in the employ of the Company, to assist the Company in
attracting and motivating new Key Employees on a competitive basis,
and to endeavor to qualify the Awards granted to Covered Employees
under the Plan as performance-based compensation as defined in
Section 162(m) of the Code. The Plan is intended to
apply to Key Employees of the Company in the United States and
throughout the world.
The Plan is
intended to qualify for exemption from Section 409A of the Code, by
reason of the short-term deferral rule set forth in Section
1.409A-1(b)(4) of the Treasury Regulations. No person
acquires a legally binding right to any Award hereunder until the
year following the Performance Period, except Awards governed by
Articles 11 and 12. Awards governed by Articles 11 and
12 will be paid by March 15 th of
the year following the Performance Period in which the legally
binding right to the Award arose. Awards otherwise will
be paid in the year following the Performance Period, unless
deferred under a separate plan pursuant to Article 9.
The Plan, in
its amended and restated form, will be effective as of January 1,
2009.
“Actual
Award Pool” means, for a Performance Period, the amount
determined in accordance with Section 7.2(d). The Actual
Award Pool for a Performance Period determines the aggregate amount
of all the Awards that are to be issued under the Plan for such
Performance Period.
“Award” means the compensation
granted to a Participant by the Committee for a Performance Period
pursuant to Articles 7 and 8. All Awards shall be issued
in the form specified by Article 5.
“Award
Pool” means, for a Performance Period, the dollar amount
calculated in accordance with Section 7.2(b) by applying the
Performance Formula for such Performance Period against the
Performance Goals for the same Performance Period.
“Award
Payment Date” means, for each Performance Period, the date
that the amount of the Award for that Performance Period shall be
paid to the Participant under Article 8, without regard to any
election to defer receipt of the Award made by the Participant
under Article 9 of the Plan.
“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
Operating Net Assets for the Performance Period.
“Cause” means (a) the willful and
continued failure by a Key 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 Key Employee by his or her employer to specifically identify
the manner in which the employer believes that the Key Employee has
not substantially performed his or her duties; or (b) the willful
engaging by a Key Employee in illegal conduct which is materially
and demonstrably injurious to the Company.
“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 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
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
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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.
"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 the 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 a Key Employee who is either a “Covered
Employee” within the meaning of Section 162(m) of the Code or
a Key Employee who the Committee has identified as a potential
“Covered Employee” within the meaning of Section 162(m)
of the Code.
“Disability” means a disability
under the terms of any long-term disability plan maintained by the
Company.
“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.
“Effective Date” means the date an
Award is determined to be effective by the Committee upon its grant
of such Award.
“Exchange
Act” or “Act” means the Securities Exchange Act
of 1934, as amended from time to time, including rules thereunder
and successor provisions and rules thereto.
“Key
Employee” means either (a) a salaried employee of the Company
in wage grade 48 or above, or the equivalent thereof; or (b) a
salaried employee of the Company who holds a position of
responsibility in a managerial, administrative, or professional
capacity and is in wage grade 43 or above.
“Kodak” means Eastman Kodak
Company.
“Negative
Discretion” means the discretion granted to the Committee
pursuant to Section 7.2(c) to reduce or eliminate the portion of
the Award Pool allocated to a Covered Employee.
2.24 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.
2.25 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
last in first out 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 for a
Performance Period, a Key Employee who is designated to participate
in the Plan for the Performance Period pursuant to Article
3.
2.27 Performance
Criteria
“Performance Criteria” shall mean
any of the following for the Company on a consolidated basis and/or
for any subsidiary, division, business unit or one or more business
segments: return on net assets (RONA), return on
shareholders’ equity, return on assets, return on capital,
shareholder returns, total shareholder return, return on invested
capital, profit margin,
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