Exhibit (10.7)
Eastman Kodak
Company
Administrative Guide for the 2007
Performance Cycle
of the Leadership Stock
Program
under Article 7 (Performance
Awards) of the
2005 Omnibus Long-Term
Compensation Plan
ARTICLE
1. INTRODUCTION
1.1 Background
Under Article 7
(Performance Awards) of the 2005 Omnibus Long-Term Compensation
Plan (the “Plan”), the Executive Compensation and
Development Committee of Kodak’s Board of Directors (the
“Committee”) may, among other things, award the
opportunity to earn shares of Common Stock to those Participants as
the Committee in its discretion may determine, subject to such
terms, conditions and restrictions as it deems
appropriate.
1.2 Purpose
This
Administrative Guide governs the Committee’s grant of Awards
under Article 7 of the Plan pursuant to a subprogram that is
hereinafter referred to as the “Leadership Stock
Program,” to be effective as of January 1, 2007, by which the
Committee will award the opportunity to earn shares of Common Stock
for the Cycle to eligible Participants described in Article 3, with
the objectives of improving the relationship between controllable
performance and realized compensation and enhancing the focus on
operating goals. It is expected that improvement in
these areas will have a corollary effect upon the price of the
Common Stock. Unless otherwise noted in this
Administrative Guide or determined by the Committee, the terms of
the Plan shall apply to Awards granted under this Leadership Stock
Program.
In addition,
this Administrative Guide is intended to establish those
requirements necessary to ensure that the Cycle’s Awards will
be treated as performance-based compensation for the purposes of
Section 162(m) of the Code. These requirements include
establishment of the Cycle’s Performance Criteria,
performance goals under the Performance Criteria and Performance
Formula.
1.3 Administration
The Leadership
Stock Program shall be administered by the
Committee. The Committee is authorized to issue this
Administrative Guide and to make changes in this Administrative
Guide as it from time to time deems proper. The Committee
is
authorized to
interpret and construe the Leadership Stock Program and this
Administrative Guide, to prescribe, amend, and rescind rules and
regulations relating to each, and to make all other determinations
necessary, appropriate or advisable for the administration of the
Leadership Stock Program, including without limitation, whether or
not to pay fractional shares, whether and how to round fractional
shares, and any issues regarding valuation, withholding and
international considerations. If there are any
inconsistencies between the terms of this Administrative Guide and
the terms of the Plan, the terms of the Plan will
control. Any determination by the Committee in
carrying out, administering or construing the Leadership Stock
Program will be final and binding for all purposes and upon all
interested persons and their heirs, successors and personal
representatives. The Committee is authorized to suspend
or terminate the Leadership Stock Program, at any time, for any
reason, with or without prior notice. Notwithstanding
any provision herein to the contrary, the Company's Director, Human
Resources is authorized to round fractional shares arising in any
way under the Plan either up or down with respect to any or all
Participants, for ease of administration or some other reasonable
purpose.
ARTICLE
2. DEFINITIONS
Any defined
term used in this Administrative Guide, other than those set forth
in this Article 2 or defined within another Article of this
Administrative Guide, will have the same meaning for purposes of
this document as that ascribed to it under the terms of the
Plan.
2.1 Approved
Reason
“Approved
Reason” means, with regard to all Participants other than a
Participant who is subject to Section 16 of the Exchange Act or a
Covered Employee, a reason for terminating employment which, in the
opinion of the CEO, is in the best interests of the
Company. With regard to a Participant who is subject to
Section 16 of the Exchange Act or is a Covered Employee,
“Approved Reason” means a reason for terminating
employment which, in the opinion of the Committee, is in the best
interests of the Company.
2.2 Award
Payment Date
“Award
Payment Date” is the date payment of an Award in the form of
shares of Common Stock is credited to the Participant’s
account with Kodak’s transfer agent pursuant to Section 9.3,
which shall be as soon as is administratively practicable after the
Vesting Date, but in no event later than 90 days
thereafter.
2.3 Cycle
“Cycle” or “Performance
Cycle” means the one-year period commencing on January 1,
2007 and ending December 31, 2007.
2.4 Consumer
Inkjet Printer Revenue
“Consumer
Inkjet Printer Revenue” means total net revenue of the
Consumer Inkjet Equipment strategic product group (SPU) within the
Consumer Digital Group, excluding revenue from ink or other
consumables.
2.5 GCG
Digital Revenue
“GCG
Digital Revenue” means YOY growth in total net revenue of the
Graphics Communication Group’s digital products.
2.6 (intentionally
omitted)
2.7 Joint
Venture
“Joint
Venture” means a corporation or other business entity in
which the Company has an ownership interest of fifty percent
(50%).
2.8 Participant
Account
“Participant Account” means the
account established by the Company for each Participant who is
granted an Award under the Leadership Stock Program to record and
account for the grant of the Award and any dividend equivalents
that are to be credited to the Account pursuant to Article 10,
until such time as the balance in the Account is paid, canceled,
forfeited or terminated, as the case may be.
2.9 Performance
Criteria
“Performance Criteria” means, with
respect to the Leadership Stock Program, the criteria that will be
used to establish the Performance Goal for the Performance Cycle,
as described in Article 6.
2.10 Performance
Cycle
“Performance Cycle” has the meaning
specified in Section 2.3.
2.11 Performance
Goals
“Performance Goals” means, with
respect to the Performance Cycle of the Leadership Stock Program,
the goals based upon the Performance Criteria and established by
the Committee, as more particularly described in Article
6.
2.12
Target Allocation
“Target
Allocation” means, for the Performance Cycle of the
Leadership Stock Program, the target allocation amount, expressed
as a number of units of Common Stock, allocated to a Participant
prior to the start of the Performance Cycle pursuant to Section
5.2.
2.13
Target Allocation Range
“Target
Allocation Range” has the meaning, for the Performance Cycle
of the Leadership Stock Program, set forth in Section
5.1.
2.14
Unit
“Unit” means a bookkeeping entry
used by the Company to record and account for the amount of an
Award granted to a Participant and any dividend equivalents that
are to be credited to the Participant’s Account pursuant to
Article 10, even though such Award and dividend equivalents have
not yet been earned, until such time as the balance in the Account
is paid, canceled, forfeited, or terminated, as the case may
be. Units are expressed in terms of one Unit being the
equivalent of one share of Common Stock.
2.15
Vesting Date
“Vesting
Date” shall mean the date that is two (2) years following the
end of the Performance Cycle.
ARTICLE
3. PARTICIPATION
3.1
In General
The
Participants who are eligible to participate in this Cycle of the
Leadership Stock Program are those executives who, as of the first
day of the Cycle, are either employed by Kodak world-wide in wage
grades 48 and higher, or are senior-level executives employed by
Kodak Subsidiaries. The CEO will make recommendations
for participation for this Cycle of the Leadership Stock Program
from among those eligible Participants. Participants for
this Cycle of the Leadership Stock Program will be designated by
the Committee from those recommended by the CEO. A
schedule of such Participants is maintained by Kodak’s
Worldwide Total Compensation Group.
No person may
become eligible to participate in this Cycle of the Leadership
Stock Program after the first day of the Cycle, whether as a result
of a job change or otherwise.
3.3
Termination of Participation
A
Participant’s participation in this Cycle of the Leadership
Stock Program is subject to immediate termination upon the
Participant’s termination of employment from the Company
during the Performance Cycle. In the case of the
Participant’s termination of employment after the end of the
Performance Cycle but prior to the Vesting Date, the Participant
will forfeit any and all rights to receive payment on account of an
Award for the Cycle, except as specified in Section
8.2 (Death, Disability, Retirement or Termination for an
Approved Reason), Section 8.3 (Divestiture to a Joint Venture) and
Section 8.4 (Divestiture to an Unrelated Third Party).
ARTICLE 4. FORM OF
AWARDS
4.1 Form
of Awards
Awards granted
under the Leadership Stock Program provide Participants with the
opportunity to earn shares of Common Stock, subject to the terms
and conditions contained in this Administrative Guide and the
Plan. Each Award granted under the Leadership Stock
Program shall be expressed as a fixed number of Units that will be
equivalent to an equal number of shares of Common
Stock. The fixed number of Units that are allocated to a
Participant by the Committee prior to the start of the Performance
Cycle is referred to herein and in the Plan as the Target
Allocation.
4.2 Participant
Account
The Company
will establish a Participant Account for each Participant who is
granted an Award.
4.3 Participant’s
Account Unfunded
The maintenance
of individual Participant Accounts is for bookkeeping purposes
only; the Units recorded in the account are not actual shares of
Common Stock. The Company will not reserve or otherwise
set aside any Common Stock for or to any Participant
Account. No Participant shall have the right to exercise
any of the rights or privileges of a shareholder with respect to
the Units credited to his or her Participant Account. As
more specifically described in Article 10, until the Committee has
certified the Award earned by a Participant pursuant to the
procedure referred to in Article 7 of this Guide, no additional
Units will be credited for dividends that may be paid on the
Company’s Common Stock.
ARTICLE 5. AWARD
ALLOCATION
5.1 Target
Allocation Range
The attached
Exhibit “A” shows by wage grade the range of the number
of Units that an eligible Participant could be allocated with
respect to the Performance Cycle (the “Target Allocation
Range”). Exhibit “A” also shows the
midpoint for the Target Allocation Range for each wage
grade.
5.2 Establishing
the Target Allocation
No later than
the cut-off date of the allocation pe
