Letter Agreement

Amendment to Letter Agreement

Second Amendment to Letter Agreement

Third Amendment to Letter Agreement

Letter dated May 10, 2005, from the Chair, Executive Compensation and Development Committee, to Antonio M. Perez

 

 

 

 

March 3, 2003

  

Antonio M. Perez

(Address intentionally

Omitted)

 

 

Dear Antonio:

 

We are delighted to extend you an offer to join Eastman Kodak Company

("Kodak") as its President and Chief Operating Officer.  We are

confident that your professional talent will be a tremendous asset to

our company and we are enthusiastic about welcoming you as a member of

our top management team.  We look forward to you playing a crucial

leadership role, working with others throughout the company to realize

our potential.

 

This letter agreement outlines the role, compensation and benefits of

your offer of employment with Kodak.  Due to the strategic importance

of your role, we are pleased to offer you a comprehensive package with

the following elements.

 

1.   Position

 

Your position will be President and Chief Operating Officer, Eastman

Kodak Company.  You will report directly to Daniel A. Carp, Chairman

and Chief Executive Officer, Eastman Kodak Company.

 

As President and Chief Operating Officer, your responsibilities and

duties will be commensurate with the titles of these positions and

include those duties and responsibilities normally performed by the

President and Chief Operating Officer of a large publicly-held

corporation operating worldwide.  You will also perform such other

duties and responsibilities that are consistent with the positions of

President and Chief Operating Officer as the Chief Executive Officer or

the Board may direct.  The Board or Chief Executive Officer may also

modify your duties and responsibilities from time to time with your

consent.

 

2.   Location

 

You will be located at the Company's headquarters in Rochester, New

York.

 

3.   Permanent Residence

 

As a result of your location in Rochester, NY, it is understood you

will establish your permanent residence in the Rochester area.

 

4.   Employment Date

 

You will commence your employment with Kodak as soon as possible, but

not later than April 3, 2003.

                                                              <PAGE 61>

 

5.   Base Salary

 

Your base salary will be at the rate of $900,000 per year.  Your base

salary will be reviewed no less frequently than annually for increase

in the discretion of the Executive Compensation and Development

Committee of the Board.  Once increased, your base salary will not be

decreased below the increased amount.

 

6.   Executive Compensation for Excellence and Leadership

 

You will be eligible to participate in Kodak's short-term variable pay

plan for its management level employees, Executive Compensation for

Excellence and Leadership ("EXCEL").  Your initial annual target award

under EXCEL will be 100% of your base salary, making your total

targeted annual compensation $1,800,000.  Your actual award for a year

will vary based on Company performance, unit performance, your job

performance, and such other criteria selected by the Executive

Compensation and Development Committee.  For 2003, any award you

receive will be pro-rated based on your length of service during 2003.

 

7.   Signing Incentive-Stock Option Award

 

To encourage you to join Kodak, you will receive as an incentive bonus

a one-time grant of 500,000 options to acquire Kodak common stock.  The

options will be issued to you under the terms of the Eastman Kodak

Company 1997 Stock Option Plan.  The options will be granted to you on

the first day of your employment.  The options will have a term of 10

years and an exercise price equal to the mean between the high and low

at which Kodak common stock trades on the New York Stock Exchange on

the date they are granted.  One half of the options, i.e., 250,000

options, will vest on the second anniversary of the date of grant, the

remaining 250,000 options will vest on the third anniversary of the

date of grant.

 

If your employment terminates during the one-year period following the

date the options are granted, you will forfeit the options unless your

termination is due to death, Disability or for a Permitted Reason, as

defined below.  Thereafter, so long as the options remain unvested,

they will be subject to forfeiture in the event of your termination of

employment for any reason other than for death or for Disability or an

Approved Reason, as those terms are defined below.

 

For purposes of this stock option incentive bonus, if Kodak terminates

your employment without Cause, as defined below, or if you terminate

your employment for Good Reason, as defined below, your termination

will be for both a Permitted Reason and an Approved Reason.

Consequently, in such event you will not forfeit by virtue of your

termination any of the stock options granted to you prior to your

termination of employment.

 

The specific terms, conditions and restrictions of your stock option

grant, which will be consistent with those described in this letter

agreement, will be contained in an award notice delivered to you

shortly after the commencement of your employment.

                                                              <PAGE 62>

 

8.   Signing Incentive-Restricted Stock Award

 

As a further inducement to join Kodak, you will receive as a signing

incentive, a one-time grant of 100,000 shares of restricted Kodak

Common Stock.  The restricted shares will be issued to you under the

terms of the 2000 Omnibus Long-Term Compensation Plan (the "Omnibus

Plan").  The restrictions on 50,000 shares will lapse on the third

anniversary of the date of the commencement of your employment.  The

restriction on the remaining 50,000 shares will lapse on the fifth

anniversary of the date of the commencement of your employment.

 

For so long as these shares remain restricted, they will be subject to

forfeiture in the event of your termination of employment for any

reason other than for death, Disability, termination by Kodak without

Cause or termination by you for Good Reason.  In the event of your

death, all of the restrictions on the shares will immediately lapse on

the date of your death and the shares will be paid to your estate.  If

your employment is terminated by Kodak without Cause or terminates due

to Disability or Good Reason, you will receive a pro rata portion of

the restricted shares based on your service with Kodak until your

termination of employment.  The remaining restricted shares will be

immediately forfeited.

 

The specific terms, conditions and restrictions of your restricted

stock grant, which will be consistent with those described in this

letter agreement, will be contained in an award notice delivered to you

shortly after the commencement of your employment.

 

9.   Stock Option Program

 

You will be eligible to participate in our Management Stock Option

Program under the Omnibus Plan.  Grants are typically made annually

under this program.  Your annual target award under the program will be

100,000 options.  Individual awards under the program are, however,

wholly within the discretion of the Executive Compensation and

Development Committee.  Presently, the Executive Compensation and

Development Committee grants awards under the program based primarily

on the results of Kodak's leadership assessment and succession planning

process.  The first grant that you will be eligible for under the

program is the grant for 2003 tentatively scheduled for the fall of

that year.

 

10.  Performance Stock Program

 

You will be eligible to participate in the Performance Stock Program,

Kodak's long-term compensation plan for its senior management.  Upon

your employment, you will be named a participant in the program's three

pending performance cycles.  Awards earned under the program are paid

in the form of restricted shares of Kodak common stock.  The

restrictions, which lapse at age 60, require continuous employment and

noncompetition and prohibit the transferability of awards.  Newly

eligible participants are eligible for pro rata awards under the

program's pending performance cycles based on their service during the

cycle.  Your target award for a full performance cycle under the

program will be 15,000 shares of restricted Kodak common stock.

                                                              <PAGE> 63

 

You will also be eligible to participate in the program's EIP subplan

for the 2002-2004 cycle. The purposes of this one-time subplan are to:

(1) reduce the losses of certain of the company's strategic product

groups by yearend 2003; and (2) to improve year over year cash flow by

yearend 2003.  In this regard, certain target and threshold performance

goals have been established under the EIP subplan based on these two

metrics for the two-year period commencing January 1, 2002 and ending

December 31, 2003.  Under the EIP subplan, your target award, which if

earned would pay out shortly after yearend 2003, will be 55,607 shares

of Kodak common stock.  Any award earned under the EIP subplan will be:

(1) pro-rated based on your length of service during the two-year

cycle; and (2) subtracted from any award you may otherwise receive

under the 2002-2004 performance cycle of the Performance Stock Program.

 

11.  Cash Balance Plan

 

 Upon your employment, you will be eligible for the cash balance

benefit provided under the Kodak Retirement Income Plan ("KRIP").  This

program is Kodak's retirement plan for all employees hired on or after

March 1, 1999.  The enclosed brochure describes this program in more

detail.

 

12.  Enhanced Pension Benefit

 

     A.   In General.  In addition to the retirement benefits you are

          eligible for under the cash balance benefit of KRIP, you will

          be eligible for an enhanced pension benefit.  Assuming you

          satisfy the conditions of Section 12(B) below and subject to

          the offset provisions contained in Section 12(D) below, Kodak

          will provide you a retirement income benefit based on the

          following assumptions: (1) that you were eligible to

          participate in Kodak's retirement plans by virtue of being

          employed by Kodak after December 31, 1995, but prior to March

          1, 1999; (2) that you have completed 8 years of service; and

          (3) that you have attained age 65 (so that there is no

          actuarial reduction for early commencement of this benefit);

          provided, however, that expressed in the form of a single

          life annuity, this enhanced pension benefit will provide you

          a retirement income benefit of at least $21,000 per month.

          The names of the specific retirement plans that you will be

          treated as participating in by virtue of being treated as

          employed after December 31, 1995, but prior to March 1, 1999,

          are KRIP, the Kodak Unfunded Retirement Plan ("KURIP") and

          the Kodak Excess Retirement Income Plan ("KERIP").  These

          three plans insofar as they apply to employees employed by

          Kodak after December 31, 1995, but prior to March 1, 1999,

          will be collectively referred to as the "Retirement Plan."

 

          As explained in Section 12(B) below, the 8 years of service

          that you will be treated as receiving under the Retirement

          Plan will not be credited to you unless and until you

          complete 3 years of actual service with the Company.  Any

          service credited to you under the Retirement Plan will only

          apply for purposes of establishing under the Retirement Plan:

          (i) the total amount of your "Vesting Service"; and (ii) the

          total amount of your "Accrued Service" used to calculate your

          retirement income benefit.  The crediting of service applies

          solely for these two purposes and is not intended to enhance

          any other Kodak benefit or compensation.

                                                              <PAGE> 64

 

     B.   Continuous Employment.  In order to receive the enhanced

          retirement benefit described above, you must remain

          continuously employed with Kodak during the 3 year period

          commencing on the date of your employment.  Except as

          provided in Section 12(C) below, if your employment

          terminates for any reason, whether voluntarily or

          involuntarily, prior to the third anniversary of your

          employment with Kodak, you will not be entitled to receive

          any of the enhanced retirement benefits described above.

 

     C.   Termination Without Cause or Termination due to Death,

          Disability or Good Reason After the First Anniversary of

          Employment.  Notwithstanding Section 12(B) above, if after

          the first anniversary of the date of the commencement of your

          employment, Kodak terminates your employment without Cause or

          your employment terminates due to death, Disability or Good

          Reason, you will receive a pro rata portion of the enhanced

          pension benefit.  If your termination of employment occurs

          after the first anniversary of the commencement of employment

          but prior to the second anniversary of the date of the

          commencement of your employment, the amount of your enhanced

          pension will be determined based on the following

          assumptions, rather than the assumptions described in Section

          12(A) above: (1) that you were eligible to participate in

          Kodak's retirement plans by virtue of being employed by Kodak

          after December 31, 1995, but prior to March 1, 1999; (2) that

          you have completed 5 years of service; and (3) that you have

          attained age 65; provided, however, that expressed in the

          form of a single life annuity, the amount of the pro rata

          portion of the enhanced pension enhanced pension benefit will

          be at least $13,125 per month.

 

          If, instead, your termination of employment occurs after the

          second anniversary of the commencement of employment but

          prior to the third anniversary of the date of the

          commencement of your employment, the amount of your enhanced

          pension will be determined based on the following

          assumptions, rather than the assumptions described in Section

          12(A) above: (1) that you were eligible to participate in

          Kodak's retirement plans by virtue of being employed by Kodak

          after December 31, 1995, but prior to March 1, 1999; (2) that

          you have attained age 65; and (3) that you have completed

          that number of years of service determined by multiplying 8

          by the following fraction:

 

                              (A)

                              ---

                              36

                                                              <PAGE> 65

 

          For purposes of this fraction, "A" will be the total number

          of your completed full months of service with Kodak prior to

          your termination of employment; provided, however, that

          expressed in the form of a single life annuity, the amount of

          the pro rata portion of the enhanced pension benefit will be

          at least that monthly amount determined from the following

          equation:

 

                               (A) x $21,000

                               ---

                               36

 

          For purposes of this equation, "A" will be the total number

          of your completed full months of service with Kodak prior to

          your termination of employment

 

          In the case of your death, the service credited to you under

          this Section 12(C) will be used solely for purposes of

          determining the survivor benefit which your survivor may be

          eligible for under the Retirement Plan (but not the post-

          retirement survivor income benefit which is provided under

          our life insurance plans for a specified grandfathered

          population).

 

     D.   Offset.  The amount of the retirement income benefit or

          survivor benefit, if any, provided under this Section 12 will

          be offset by: (1) the retirement benefits payable to you

          under the cash balance benefit of KRIP and any supplemental

          and successor plan(s) thereto , including but not limited to

          KERIP and KURIP, and (2) any company matching contribution

          made to your account under the Eastman Kodak Employees'

          Savings and Investment Plan ("SIP") or any supplement or

          successor plan(s) thereto, including but not limited to KERIP

          and KURIP.

 

          For purposes of determining the amount of any offset under

          this Section 12(D), the amount of the retirement benefits

          payable to you under Cash Balance Plus and any supplemental

          and successor plan(s) thereto will be calculated pursuant to

          the same actuarial assumptions that are used to calculate the

          retirement income benefit that you will be treated as

          receiving under the Retirement Plan, assuming the same

          frequency of payment, form of benefit and commencement date

          of payment as such retirement income benefit, but based on

          your actual years of service and actual age and reduced for

          any actuarial reductions for any early commencement of

          benefits.

 

     E.   Payment.  The amount of the enhanced retirement benefit, if

          any, payable to you under this Section 12 will: (i) be paid

          in the form of a monthly annuity commencing on the first day

          of a month selected by you on or after the date of your

          termination of employment; (ii) be paid out of Kodak's

          general assets, not under KRIP; (iii) not be funded in any

          manner; (iv) be included in your gross income as ordinary

          income, subject to all income and payroll tax withholding

          required to be made under all applicable laws; and (v) not be

          grossed up or be given any other special tax treatment by

          Kodak.

                                                              <PAGE> 66

 

     F.   Employee Benefit Plan.  To the extent the terms of this

          enhanced retirement benefit constitute an "employee benefit

          plan" under Section 3(3) of the Employee Retirement Income

          Security Act of 1974 ("ERISA"), the Vice President, Eastman

          Kodak Company and Director, Human Resources will be the plan

          administrator of the plan.  The plan administrator will have

          total and exclusive responsibility to control, operate,

          manage and administer the plan in accordance with its terms

          and all the authority that may be necessary or helpful to

          enable him/her to discharge his/her responsibilities with

          respect to the plan.  Without limiting the generality of the

          preceding sentence, the plan administrator shall have the

          exclusive right to: interpret the plan, decide all questions

          concerning eligibility for and the amount of benefits payable

          under the plan, construe any ambiguous provision of the plan,

          correct any default, supply any omission, reconcile any

          inconsistency, and decide all questions arising in the

          administration, interpretation and application of the plan.

          The plan administrator will have full discretionary authority

          in all matters related to the discharge of his/her

          responsibilities and the exercise of his/her authority under

          the plan, including, without limitation, his/her construction

          of the terms of the plan and his/her determination of

          eligibility for benefits under the plan.  It is the intent of

          the plan, as well as both parties hereto, that the decisions

          of the plan administrator and his/her action with respect to

          the plan shall be final and binding upon all persons having

          or claiming to have any right or interest in or under the

          plan and that no such decision or actions shall be modified

          upon judicial review unless such decision or action is proven

          to be arbitrary or capricious.

 

          Notwithstanding the foregoing paragraph of this Section

          12(F), the plan administrator will not determine the

          resolution of disputes concerning whether your termination of

          employment is for Cause or Good Reason, but rather such

          disputes will be arbitrated in accordance with the terms of

          Section 23 below.

                                                              <PAGE> 67

 

13.  Supplemental Enhanced Pension Benefit

 

     A.   In General.  After you have completed at least 3 years of

          service, you will be eligible for the supplemental enhanced

          pension benefit described in this Section 13 in lieu of, and

          not in addition to, the enhanced pension benefit described in

          Section 12.  Assuming you satisfy the conditions of Section

          13(B) below and subject to the offset provisions contained in

          Section 13(D) below, Kodak will provide you, a retirement

          income benefit based on the following assumptions: (1) that

          you were eligible to participate in the Retirement Plan by

          virtue of being employed by Kodak after December 31, 1995,

          but prior to March 1, 1999; and (2) that you have completed

          25 years of service; provided, however, that expressed in the

          form of a single life annuity, the amount of the supplemental

          enhanced pension benefit will be at least $21,000 per month.

          Expressed in the form of a single life annuity and based on

          your initial base salary and target EXCEL bonus and assuming

          a 5% increase in base salary, this supplemental enhanced

          pension benefit would provide you a retirement income benefit

          of approximately $84,000 per month.

 

          As explained in Section 13(B) below, the 25 years of service

          that you will be treated as receiving under the Retirement

          Plan will not be credited to you unless and until you

          complete 9 years of actual service with the Company.  Any

          service credited to you under the Retirement Plan will only

          apply for purposes of establishing under the Retirement Plan:

          (i) the total amount of your "Vesting Service"; and (ii) the

          total amount of your "Accrued Service" used to calculate your

          retirement income benefit.  The crediting of service applies

          solely for these two purposes and is not intended to enhance

          any other Kodak benefit or compensation.

                                                              <PAGE> 68

 

     B.   Continuous Employment.  In order to receive the full

          supplemental enhanced retirement benefit described above, you

          must remain continuously employed with Kodak during the 9

          year period commencing on the date of your employment.  If,

          after the third anniversary of the date of your commencement

          of employment but prior to the ninth anniversary of the date

          of your commencement of employment, your employment is

          terminated by Kodak without Cause or you terminate your

          employment due to death, Disability or Good Reason, you will

          only receive the pro-rated supplemental enhanced retirement

          benefit described in Section 13(C) below.  Alternatively, if,

          after the third anniversary of the date of your commencement

          of employment but prior to the ninth anniversary of the date

          of your commencement of employment, your employment is

          terminated for any other reason, including if Kodak

          terminates your employment for Cause or you terminate your

          employment other than for death, Disability or Good Reason,

          you will only be entitled to a supplemental retirement

          benefit based on the following assumptions, rather than those

          set forth in Section 13(A) above: (1) that you were eligible

          to participate in Kodak's retirement plans by virtue of being

          employed by Kodak after December 31, 1995, but prior to March

          1, 1999; (2) that you have completed 8 years of service; and

          (3) that you have attained age 65 (so that there is no

          actuarial reduction for early commencement of this benefit).

          For purposes of clarification of the immediately preceding

          sentence, in performing such calculation "Average

          Participating Compensation," as defined in the Retirement

          Plan, will not be determined merely from the "Participating

          Compensation," as defined in the Retirement Plan, during

          first three years of your employment.

 

     C.   Termination Without Cause or Termination due to Death,

          Disability or Good Reason.  Notwithstanding Section 13(B)

          above, if, after you have completed 3 years of service, Kodak

          terminates your employment without Cause or your employment

          terminates due to death, Disability or Good Reason, you will

          receive a pro rata portion of the supplemental enhanced

          pension benefit described in Section 13(A) above.  In such an

          event, the amount of your supplemental enhanced pension

          benefit will be determined based on the following assumptions,

          rather than the assumptions described in Section 13(A) above:

          (1) that you were eligible to participate in Kodak's

          retirement plans by virtue of being employed by Kodak after

          December 31, 1995, but prior to March 1, 1999; (2) that you

          have attained age 65; and (3) that you have completed that

          amount of service with the Company determined by adding

          together 8 years of service plus the total number of your full

          months of service with the Company during the period beginning

          on the third anniversary of the date of your commencement of

          employment and ending on the date of your termination of

          employment; provided, however, that expressed in the form of

          a single life annuity, the amount of the pro rata portion of

          the supplemental enhanced pension benefit will not be less

          than $21,000 per month.

                                                              <PAGE> 69

 

          In the case of your death, this service will be used solely

          for purposes of determining the survivor benefit which your

          survivor may be eligible for under the Retirement Plan (but

          not the post-retirement survivor income benefit which is

          provided under our life insurance plans for a specified

          grandfathered population).

 

     D.   Offset.  The amount of the retirement income benefit or

          survivor benefit, if any, provided under this Section 13 will

          be offset by: (1) the retirement benefits payable to you

          under the cash balance benefit of KRIP and any supplemental

          and successor plan(s) thereto, including but not limited to

          KERIP and KURIP, and (2) any company matching contribution

          made to your account under the Eastman Kodak Employees'

          Savings and Investment Plan ("SIP") or any supplement or

          successor plan(s) thereto, including but not limited to KERIP

          and KURIP.

 

          For purposes of determining the amount of any offset under

          this Section 13(D), the amount of the retirement benefits

          payable to you under Cash Balance Plus and any supplemental

          and successor plan(s) thereto will be calculated pursuant to

          the same actuarial assumptions that are used to calculate the

          retirement income benefit that you will be treated as

          receiving under the Retirement Plan, assuming the same

          frequency of payment, form of benefit and commencement date

          of payment as such retirement income benefit, but based on

          your actual years of service and actual age and reduced for

          any actuarial reductions for any early commencement of

          benefits.

 

     E.   Payment.  The amount of the supplemental enhanced retirement

          benefit, if any, payable to you under this Section 13 will:

          (i) be paid in the form of a monthly annuity commencing on

          the first day of a month selected by you on or after the date

          of your termination of employment; (ii) be paid out of

          Kodak's general assets, not under KRIP; (iii) not be funded

          in any manner; (iv) be included in your gross income as

          ordinary income, subject to all income and payroll tax

          withholding required to be made under all applicable laws;

          and (v) not be grossed up or be given any other special tax

          treatment by Kodak.

                                                              <PAGE> 70

 

     F.   Employee Benefit Plan.  To the extent the terms of this

          supplemental enhanced retirement benefit constitute an

          "employee benefit plan" under Section 3(3) of the Employee

          Retirement Income Security Act of 1974 ("ERISA"), the Vice

          President, Eastman Kodak Company and Director, Human

          Resources will be the plan administrator of the plan.  The

          plan administrator will have total and exclusive

          responsibility to control, operate, manage and administer

          the plan in accordance with its terms and all the authority

          that may be necessary or helpful to enable him/her to

          discharge his/her responsibilities with respect to the plan.

          Without limiting the generality of the preceding sentence,

          the plan administrator shall have the exclusive right to:

          interpret the plan, decide all questions concerning

          eligibility for and the amount of benefits payable under the

          plan, construe any ambiguous provision of the plan, correct

          any default, supply any omission, reconcile any

          inconsistency, and decide all questions arising in the

          administration, interpretation and application of the plan.

          The plan administrator will have full discretionary

          authority in all matters related to the discharge of his/her

          responsibilities and the exercise of his/her authority under

          the plan, including, without limitation, his/her

          construction of the terms of the plan and his/her

          determination of eligibility for benefits under the plan.

          It is the intent of the plan, as well as both parties

          hereto, that the decisions of the plan administrator and

          his/her action with respect to the plan shall be final and

          binding upon all persons having or claiming to have any

          right or interest in or under the plan and that no such

          decision or actions shall be modified upon judicial review

          unless such decision or action is proven to be arbitrary or

          capricious.

 

          Notwithstanding the foregoing paragraph of this Section

          13(F), the plan administrator will not determine the

          resolution of disputes concerning whether your termination

          of employment is for Cause or Good Reason, but rather such

          disputes will be arbitrated in accordance with the terms of

          Section 23 below.

 

14.  Termination of Employment.

 

     A.   Termination Due to Death.  In the event your employment

          terminates due to your death, your estate or your

          beneficiaries, as the case may be, will receive:

 

          I.   base salary through the date of death;

 

          II.  a pro rata annual target award under EXCEL for the year

               in which your death occurs, based on service performed

               for such year, payable in a single installment on the

               normal payment date for awards earned for the year;

 

          III. any earned, but unpaid, EXCEL award for the year

               immediately prior to the year in which your death

               occurs;

                                                             <PAGE> 71

 

          IV.  any restricted stock award outstanding at the time of

               your death, including the award under Section 8,

               whereupon the award will become fully vested and any

               forfeiture provisions set forth in the award's

               restricted stock agreement will immediately lapse;

 

          V.   any outstanding stock option award at the time of your

               death will become fully vested and your estate or, in

               the event of an assignment of your stock option award,

               your transferee will have the right to exercise any

               such award for the remainder of the full original ten

               year term of the option;

 

          VI.  a pro rata award under the Performance Stock Program

               for each cycle during which your death occurs, based

               on performance and your service during such cycle,

               payable in a single installment on the normal payment

               date for awards earned for the cycle; provided,

               however, in the case of your death in 2003, you will

               receive a pro-rated award under the EIP subplan based

               on your service during 2003 in lieu of any other award

               for the 2002-2004 performance cycle;

 

          VII. any outstanding award under the Performance Stock

               Program at the time of your death, and any forfeiture

               provisions under the program applicable to such awards

               will immediately lapse;

 

          VIII.services under Kodak's financial counseling program for

               the two year period immediately following the date of

               your death;

 

          IX.  continuation of existing health and dental coverage for

               you and your eligible dependents for up to 18 months,

               provided your qualified beneficiary timely elects

               COBRA continuation coverage and pays the required

               COBRA premiums;

 

          X.   a survivor benefit under the terms of Section 12 or 13

               as the case may be; and

 

          XI.  other or additional benefits in accordance with

               applicable plans and programs of the Company.

 

                                                             <PAGE> 72

 

     B.   Termination Due to Disability.  In the event your employment

          terminates due to Disability, you will receive:

 

          I.   base salary through the date of your termination of

               employment;

 

          II.  those benefits to which you are entitled under the

               Kodak Long-Term Disability Plan;

 

          III. a pro rata annual target award under EXCEL for the year

               in which your termination occurs, based on service

               performed during such year until your date of

               termination, payable in a single installment on the

               normal payment date for awards earned for the year;

 

          IV.  any earned, but unpaid, EXCEL award for the year

               immediately prior to the year in which your termination

               occurs;

 

          V.   any restricted stock award, other than the restricted

               stock award described in Section 8 above, outstanding

               for at least one year at the time of your termination,

               and the forfeiture provisions applicable to the award

               will immediately lapse;

 

          VI.  a pro rata portion of the restricted stock award

               described in Section 8 which will be determined in

               accordance with the terms of Section 8;

 

          VII. any stock option award, other than the stock option

               award described in Section 7, outstanding for at least

               one year at the time of your termination of employment

               and, if the award is unvested at the time of your

               termination, it will continue to vest per its terms as

               if you continued your employment through each vesting

               date and, once vested, you will have the right to

               exercise the award for the remainder of its ten year

               term unless they are forfeited sooner pursuant to their

               terms relating to inimical conduct or breach of

               Employee's Agreement;

 

          VIII.                                              the stock

               options granted under Section 7 above and, if any of

               the options are unvested at the time of your

               termination, they will continue to vest per their terms

               as if you continued your employment through each

               vesting date and, once vested, you will have the right

               to exercise the options for the remainder of their ten

               year term;

                                                             <PAGE> 73

 

          IX.  a pro rata award under the Performance Stock Program

               for each cycle during which your termination occurs,

               based on performance and your service during such cycle

               until your date of termination, payable in a single

               installment on the normal payment date for awards

               earned for the cycle; provided, however, in the case of

               your termination of employment in 2003, you will

               receive a pro-rated award under the EIP subplan based

               on your service during 2003 in lieu of any other award

               for the 2002-2004 performance cycle;

 

          X.   any outstanding award under the Performance Stock

               Program at the time of your termination, any forfeiture

               provisions under the program applicable to such award

               will immediately lapse;

 

          XI.  services under Kodak's financial counseling program for

               the two year period immediately following the date of

               your termination of employment;

 

          XII. continuation of existing health and dental coverage for

               you and your eligible dependents for up to the maximum

               applicable COBRA period, provided you timely elect COBRA

               continuation coverage and pay the required COBRA

               premiums;

 

          XIII.an enhanced retirement income benefit under the terms of

               Section 12 or 13 as the case may be; and

 

          XIV. other or additional benefits in accordance with

               applicable plans and programs of the Company.

 

     C.   Termination by the Company for Cause.  In the event Kodak

          terminates your employment for Cause, you will receive:

 

          I.   base salary through the date of your termination of

               employment;

 

          I.   any earned, but unpaid, EXCEL award for the year

               immediately prior to the year in which your termination

               occurs;

 

          II.  any award earned (but not yet paid) pursuant to the

               terms of the Performance Stock Program, but you will

               forfeit any award subject to any restriction at the time

               of your termination;

 

          III. payment for any reimbursed business expenses in

               accordance with Kodak's expense reimbursement policy;

                                                             <PAGE> 74

 

          IV.  any enhanced pension benefit you may be entitled to

               under the terms of Section 12 or 13 above;

 

          V.   sixty days in which to exercise any vested stock option

               held by you on the date of your termination of

               employment unless such stock option is forfeited by its

               terms as a result of the circumstances resulting in your

               termination for Cause;

 

          VI.  the vested portion, as of the date of your termination

               of employment, of the restricted stock award granted to

               you under Section 8; the unvested portion of such

               restricted shares, as of the date of your termination of

               employment, will be immediately forfeited as of such

               date; and

 

          VII. other or additional benefits in accordance with

               applicable plans or programs of the Company.

 

     D.   Termination Without Cause. In the event your employment is

          terminated by Kodak without Cause, you will receive:

 

          I.   base salary through the date of your termination of

               employment;

 

          II.  a severance allowance equal to two (2) times the sum of

               your then-current annual base salary plus your then-

               current target annual incentive award under EXCEL,

               payable in equal consecutive bi-monthly payments over

               the two (2) year period commencing on the date of your

               termination of employment;

 

          III. a pro rata annual target award under EXCEL for the year

               in which your termination occurs, based on service

               performed for such year, payable in a single installment

               on the normal payment date for awards earned for the

               year;

 

          IV.  any earned, but unpaid, EXCEL award for the year

               immediately prior to the year in which your termination

               occurs;

 

          V.   any restricted stock award, other than the restricted

               stock award described in Section 8 above, outstanding

               at the time of your termination, and the forfeiture

               provisions applicable to such award will immediately

               lapse;

 

          VI.  a pro rata portion of the restricted stock award

               described in Section 8 which will be determined in

               accordance with the terms of Section 8;

                                                              <PAGE> 75

 

          VII. any stock option award, other than the stock option

               award described in Section 7, outstanding at the time of

               your termination of employment and, if the award is

               unvested at the time of your termination, it will

               continue to vest per its terms as if you continued your

               employment through each vesting date and, once vested,

               you will have the right to exercise the award for the

               remainder of its ten year term unless they are forfeited

               sooner pursuant to their terms relating to inimical

               conduct or breach of Employee's Agreement;

 

          VIII.     the stock options granted under Section 7 above

               and, if any of the options are unvested at the time of

               your termination, they will continue to vest per their

               terms as if you continued your employment through each

               vesting date and, once vested, you will have the right

               to exercise the options for the remainder of their ten

               year term;

 

          IX.  a pro rata award under the Performance Stock Program for

               each cycle during which your termination occurs, based

               on performance and your service during such cycle,

               payable in a single installment on the normal payment

               date for awards earned for the cycle; provided, however,

               in the case of your termination of employment in 2003,

               you will receive a pro-rated award under the EIP subplan

               based on your service during 2003 in lieu of any other

               award for the 2002-2004 performance cycle;

 

          X.   any outstanding award under the Performance Stock

               Program at the time of your termination, any forfeiture

               provisions under the program applicable to such award

               will immediately lapse;

 

          XI.  an enhanced retirement income benefit under the terms of

               Section 12 or 13 as the case may be; and

 

          XII. continuation, at Kodak's expense, of your then existing

               elections under Kodak's health and dental plans for the

               four month period immediately following the month in

               which you terminate your employment;

 

          XIII.     following the expiration of the 4 months of company

               paid health and dental coverage, continuation of

               existing health and dental coverage for you and your

               eligible dependents for up 14 months, provided you

               timely elect COBRA continuation coverage and pay the

               required COBRA premiums;

 

          XIV. outplacement services in the same manner, and on the

               same terms and conditions, as if you were eligible for

               "Outplacement Services" pursuant to Article 8 of Kodak's

               Termination Allowance Plan;

                                                              <PAGE> 76

 

          XV.  services under Kodak's financial counseling program for

               the two year period immediately following the date of

               your termination of employment; and

 

          XVI. other or additional benefits in accordance with

               applicable plans and programs of the Company.

 

     E.   Good Reason.  In the event you terminate your employment for

          "Good Reason," you will receive:

 

          I.   base salary through the date of your termination of

               employment;

 

          II.  a severance allowance equal to two (2) times the sum of

               your then-current annual base salary plus your then-

               current target annual incentive award under EXCEL,

               payable in equal consecutive bi-monthly payments over

               the two (2) year period commencing on the date of your

               termination of employment;

 

          III. a pro rata annual target award under EXCEL for the year

               in which your termination occurs, based on service

               performed for such year, payable in a single installment

               on the normal payment date for awards earned for the

               year;

 

          IV.  any earned, but unpaid, EXCEL award for the year

               immediately prior to the year in which your termination

               occurs;

 

          V.   any restricted stock award, other than the restricted

               stock award described in Section 8 above, outstanding at

               the time of your termination, and the forfeiture

               provisions applicable to such award will immediately

               lapse;

 

          VI.  a pro rata portion of the restricted stock award

               described in Section 8 which will be determined in

               accordance with the terms of Section 8;

 

          VII. any stock option award, other than the stock option

               award described in Section 7, outstanding at the time of

               your termination of employment and, if the award is

               unvested at the time of your termination, it will

               continue to vest per its terms as if you continued your

               employment through each vesting date and, once vested,

               you will have the right to exercise the award for the

               remainder of its ten year term unless they are forfeited

               sooner pursuant to their terms relating to inimical

               conduct or breach of Employee's Agreement;

 

          VIII.     the stock options granted under Section 7 above

               and, if any of the options are unvested at the time of

               your termination, they will continue to vest per their

               terms as if you continued your employment through each

               vesting date and, once vested, you will have the right

               to exercise the options for the remainder of their ten

               year term;

                                                              <PAGE> 77

 

          IX.  a pro rata award under the Performance Stock Program for

               each cycle during which your termination occurs, based

               on performance and your service during such cycle,

               payable in a single installment on the normal payment

               date for awards earned for the cycle; provided, however,

               in the case of your termination of employment in 2003,

               you will receive a pro-rated award under the EIP subplan

               based on your service during 2003 in lieu of any other

               award for the 2002-2004 performance cycle;

 

          X.   any outstanding award under the Performance Stock

               Program at the time of your termination, any forfeiture

               provisions under the program applicable to such award

               will immediately lapse;

 

          XI.  an enhanced retirement income benefit under the terms of

               Section 12 or 13 as the case may be; and

 

          XII. continuation, at Kodak's expense, of your then existing

               elections under Kodak's health and dental plans for you

               and your eligible dependents for the four month period

               immediately following the month in which you terminate

               your employment;

 

          XIII.following the expiration of the 4 months of company

               paid health and dental coverage, continuation of

               existing health and dental coverage for up 14 months,

               provided you timely elect COBRA continuation coverage

               and pay the required COBRA premiums;

 

          XIV. outplacement services in the same manner, and on the

               same terms and conditions, as if you were eligible for

               "Outplacement Services" pursuant to Article 8 of Kodak's

               Termination Allowance Plan;

 

          XV.  services under Kodak's financial counseling program for

               the two year period immediately following the date of

               your termination of employment; and

 

          XVI. other or additional benefits in accordance with

               applicable plans and programs of the Company.

                                                              <PAGE> 78

 

     F.   Voluntary Termination.  In the event you voluntarily

          terminate your employment, you will receive:

 

          I.   base salary through the date of your termination of

               employment;

 

          II.  any earned, but unpaid, EXCEL award for the year

               immediately prior to the year in which your termination

               occurs;

 

          III. any award earned (but not yet paid) pursuant to the

               terms of the Performance Stock Program, but you will

               forfeit any award subject to any restriction at the time

               of your termination;

 

          IV.  payment for any reimbursed business expenses in

               accordance with Kodak's expense reimbursement policy;

 

          V.   any enhanced pension benefit you may be entitled to

               under the terms of Section 12 or 13 above;

 

          VI.  if your voluntary termination of employment occurs prior

               to the third anniversary of the commencement of your

               employment, sixty days in which to exercise any vested

               stock option granted to you under Section 7 and held by

               you on the date of your termination of employment (the

               unvested portion of such stock option award, as of the

               date of your termination of employment, will be

               immediately forfeited as of such date);

 

          VII. if your voluntary termination of employment occurs on or

               after the third anniversary of the commencement of your

               employment, the stock option award granted to you under

               Section 7 and you will have the right to exercise these

               stock options for the remainder of their ten year term;

 

          VIII.sixty days in which to exercise any other vested

               stock option held by you on the date of your termination

               of employment;

 

          IX.  the vested portion, as of the date of your termination

               of employment, of the restricted stock award granted to

               you under Section 8 (the unvested portion of such

               restricted shares, as of the date of your termination of

               employment, will be immediately forfeited as of such

               date); and;

 

          X.   other or additional benefits in accordance with

               applicable plans or programs of the Company.

                                                              <PAGE> 79

 

     G.   Exclusivity of Severance Allowance.  The severance allowance

          payable to you under this Section 14 will be paid to you in

          lieu of any other severance benefit, payment or allowance

          that you would otherwise be eligible for, except any benefits

          payable to you under any Kodak severance plan.  To the

          extent, however, you are eligible for a benefit under a Kodak

          severance plan, the severance allowance payable to you under

          this Section 14 will be reduced by the amount of such

          severance benefit.

 

     H.   Release.  As a condition of your entitlement to any of the

          rights, benefits and payments provided in this Section 14,

          you will be required to execute immediately prior to your

          termination of employment and honor a general release of

          claims and covenant not to sue in a form substantially

          similar to that attached to this letter agreement as Addendum

          A, which may be amended or supplemented from time to time by

          written agreement of the parties.

 

     I.   Termination at Will.  Notwithstanding anything herein to the

          contrary, your employment by Kodak is terminable at will with

          or without Cause; provided, however, that a termination of

          your employment will be governed in accordance with the terms

          of this Section 14.  Thus, you will be free to terminate your

          employment at any time, for any reason, and Kodak is free to

          do the same.

 

     J.   Benefits Bearing.  None of the benefits or payments payable

          under this Section 14 are "benefits bearing."  That is,

          they will not be taken into account, nor considered for

          any reason, for purposes of determining any company

          provided benefits or compensation to which you are or may

          become eligible.

 

     K.   No Mitigation/No Offset.  You will not be required to seek

          other employment or otherwise mitigate the value of any

          severance benefits payable under this letter agreement, nor

          will any such benefits be reduced by any earnings or

          benefits that you may receive from any other source.

          Except as expressly provided in this letter agreement or

          Addendum A, the severance allowance payable under this

          letter agreement will not be subject to setoff,

          counterclaim, recoupment, defense or other right which

          Kodak may have against you or others.

                                                             <PAGE> 80

 

     L.   Conditional Nature of Severance Payments.

 

          I.   Noncompetition.  You acknowledge that the nature of the

               Company's business is such that if you were to become

               employed by, or substantially involved in, the business

               of a Competitor during the period immediately after

               termination of your employment equal to the total number

               of months during which you were employed by Kodak,

               whether continuously or not, but not for less than six

               (6) months nor more than twenty-four (24) months after

               such termination, it would be very difficult for you not

               to rely on or use the Company's trade secrets and

               confidential information.  Consequently, you agree that

               you will not during such period directly or indirectly

               engage in (whether as an employee, consultant, agent,

               proprietor, principal, partner, stockholder, corporate

               officer, director or otherwise), nor have any material

               ownership interest in or participate in the financing,

               operation, management or control of a Competitor

 

          II.  Forfeiture.  To avoid the inevitable disclosure of the

               Company's trade secrets and confidential information,

               you agree and acknowledge that your right to receive the

               severance payments and benefits set forth in Sections

               14(D)(II), (D)(V), (D)(XII), (D)(XIV), and (D)(XV) and

               Sections 14(E)(II), (E)(V), (E)(XII), (E)(XIV), and

               (E)(XV), hereinafter collectively referred to as the

               "Severance Benefits," (to the extent you are otherwise

               entitled to such Severance Benefits) will be conditioned

               upon your compliance with the terms of Section 14(L)(I).

               Upon any breach of Section 14(L)(I), all Severance

               Benefits will immediately cease and any Severance

               Benefits already paid will be immediately repaid by you

               to the Company.  You also agree that in the event the

               provisions of Section 14(L)(I) are ever determined to be

               unenforceable under applicable law, all Severance

               Benefits will immediately cease and any Severance

               Benefits already paid will be immediately repaid by you

               to the Company should you fail to continue to comply

               with requirements of Section 14(L)(I).  The requirements

               under Section 14(L)(I) are in addition to, and not in

               lieu of, your obligations under the Eastman Kodak

               Company Employee's Agreement.

 

15.  Vacation

 

You will be entitled to 6 weeks vacation per calendar year.  For the

current year, your vacation will be pro-rated on a daily basis.

 

16.  Benefits

 

You will be immediately eligible to participate in Kodak's Flexible

Benefits Plan, which includes health and dental coverage, long-term

disability coverage, group life insurance and eligibility for long-term

care insurance.

 

You will also be able to participate in Kodak's Short-Term Disability

Plan.  You will be eligible for up to 52 weeks of benefits under the

terms of such plan.  This is based upon a special credit of having 15

years of deemed service for purposes of the plan.  Under the plan,

participants receiving benefits remain Kodak employees and, as such,

are eligible for the same benefits as other Kodak employees.

                                                              <PAGE> 81

 

Our executives also qualify for company-paid coverage of $5 million of

personal umbrella liability insurance ("PULI").

 

In addition, you will be eligible to participate in the 1982 Eastman

Kodak Company Executive Deferred Compensation Plan ("EDCP").  This is a

non-qualified/unfunded plan in which you may elect to defer a portion

of your base salary and MVCP award.

 

Immediately upon your employment, you will also be eligible to

participate in the Eastman Kodak Employees' Savings and Investment Plan

("SIP").  You will be eligible to make rollover deferrals to SIP from

other qualified plans within two years from the date of your hire.

 

Our executives are provided with individual financial counseling

services through one of three companies.  You may, in lieu thereof,

choose to continue using your current financial counselor for such

services and we will reimburse you for the cost of these services;

subject, however, to a maximum reimbursement of $6,000 per year.  You

will be immediately eligible for this benefit.  You are also eligible

to participate in the Kodak Executive Health Management Plan.

 

You will be eligible to participate in any of Kodak's executive fringe

benefits in accordance with the terms and conditions of such

arrangements as are in effect from time to time for Kodak's senior-

level executives.

 

You will be eligible to participate in the Eastman Kodak Company

Executive Protection Plan.  You will be treated under the plan as a

Tier 1 employee.

 

17.  Share Ownership Program

 

Kodak firmly believes that the interests of its executives must be

consistent with those of its shareholders.  One program designed to

meet this objective is Kodak's share ownership program.  Under this

program, all senior executives are required to own common stock of

Kodak equal to a set multiple of his or her base salary.  The multiple

that you are expected to own is 3 times your base salary.  This amount

must be achieved by the fifth anniversary of the date of your

commencement of employment by Kodak.

 

18.    Relocation

 

You will be eligible to participate in Kodak's Enhanced New Hire

Relocation Program (the "Relocation Program").  We have previously

provided you a summary of the program's benefits.  To the extent you

are required to include any of the Relocation Program's benefits in

your gross income for federal, state or local income or payroll tax

purposes, Kodak will provide you with tax gross-up payments so that

after taxes are incurred on any benefits under the Relocation Program

you will be kept whole.

                                                              <PAGE> 82

 

To assist you in finding a permanent residence in the Rochester, New

York area, Kodak will reimburse you for your temporary housing

expenses.  More specifically, for up to a 6 month period commencing on

your start date, Kodak agrees to reimburse you for your temporary

housing expenses up to a maximum dollar amount of $3,000 per month.

These expenses must be incurred for temporary housing in the Rochester,

New York area.  Proper documentation of these expenses will be required

in accordance with the terms of Kodak's relocation program.  To the

extent you are required to include any of these expense reimbursement

in your gross income for federal, state or local income or payroll tax

purposes, Kodak will provide you with tax gross-up payments so that

after taxes are incurred on any such expense reimbursement you will be

kept whole.  The amount of any such "gross-up" will not be included in

the calculation of the $3,000 per month limit.

 

19.  Confidential Information

 

It is important that the relationship between you and Kodak be

established at the outset so as to enable you to properly safeguard

confidential information that you may have acquired from your previous

employer(s).   "Confidential Information" is defined as information

proprietary to a previous employer which is generally secret, and which

you learned while employed with that employer.

 

By accepting this conditional offer, you represent to Kodak that your

obligations regarding the Confidential Information will not impede your

ability to perform the duties and responsibilities required by virtue

of the positions offered to you under this letter agreement. You

further represent that the performance of these duties and

responsibilities will not violate any agreement between you and any

other person, firm, entity or organization or violate any Federal,

state or local law, executive order or regulation.

 

During your employment with Kodak, we would expect that you will keep

in mind the Confidential Information and inform us if you believe that

any duties or responsibilities to which you are assigned will involve

its use or disclosure.  I am available at any time to discuss questions

that might arise in this regard.  All such discussions you may have

with me or anyone at Kodak in this regard should refer to the

Confidential Information only in general terms so as to avoid

disclosure of the information you believe to be confidential.

 

20.  No Conflicts of Interest

 

By signing this letter, you represent that as of the commencement of

your employment you will not be subject to any restrictions,

particularly, but without limitation, in connection with any previous

employment, which at such time or thereafter will prevent you from

performing your obligations under this letter or will materially and

adversely affect (or may in the future, so far as you can reasonably

foresee, materially affect) your rights to participate in the affairs

of Kodak.

                                                              <PAGE> 83

 

21.  Employment Preconditions

 

This conditional offer of employment is subject to the following

conditions and may be withdrawn by Kodak due to your inability to

satisfy any one or more of these conditions.  By signing this letter,

you agree and acknowledge that Kodak may perform the activities

contemplated below in order to verify the stated conditions.

 

     A.   Physical Exam and Drug Test.  You are required to complete a

          physical examination and drug screen before this offer

          becomes final.  This will be at Kodak's expense. This offer

          is contingent upon a negative drug screen urinalysis test

          result.  Kodak's Medical Director will contact you directly

          concerning the details of your physical exam and drug test.

 

     B.   INS.  All employers are now required by Federal law to verify

          identity and authorization to work for all prospective

          employees.  Enclosed is an Immigration and Naturalization

          Service I-9 form that outlines the details of these

          requirements.  Inability to comply with these requirements

          will cause rescission of this conditional offer.

 

     C.   Check of Past Employment, Education, Credit History, etc.

          Kodak will conduct a check of your past employment,

          education, credit history and criminal convictions records.

          This offer is contingent upon such check being acceptable to

          Kodak.  Informed Directions International of 110 15th Street

          NE, Canton, Ohio 44714, has been engaged by Kodak to conduct

          this check.  Enclosed is a disclosure letter required by

          Federal Law concerning our request to obtain a copy of your

          credit report.  You will also find enclosed a consent form

          authorizing Kodak to obtain such credit report.  Please sign

          and date the consent form and enclose it along with this

          letter.

 

22.  Employee's Agreement

 

Attached is a copy of the Kodak Employees' Agreement, which you must

sign and return to me upon your acceptance of this letter agreement.

 

23.  Resolution of Disputes

 

Any controversy or claim arising out of or relating to this letter

agreement, or the breach, termination or validity hereof will be

submitted to binding arbitration before a sole arbitrator in Rochester,

New York administered by the American Arbitration Association in

accordance with its rules.  The arbitration shall be governed by the

United States Arbitration Act, 9 U.S.C. 1-16, and judgment upon the

award rendered may be entered by any court having jurisdiction thereof.

All costs and expenses of any arbitration (including the fees and

expenses reasonably incurred by you) will be borne by Kodak unless your

claim is determined by the arbitrator to be either frivolous or in bad

faith.

                                                              <PAGE> 84

 

You and Kodak will not arbitrate any dispute relating to Sections 12,

13 or 14(L) or your breach of your Eastman Kodak Company Employee's

Agreement or the Release attached as Addendum A, but shall institute

any judicial proceedings in a court of competent jurisdiction with

respect to such a dispute or claim.  Disputes with respect to any such

provision will be adjudicated within the exclusive jurisdiction of a

state or federal court located in Monroe County, New York.  Neither

party waives any right it may have to remove such an action to the

United States Federal District Court located in Monroe County, New

York.

 

24.  Outside Activities

 

Except as may otherwise be agreed in writing by the Chief Executive

Officer and you, you are expected to devote all of your business time

to the affairs of Kodak.  You may, however, engage in charitable, civic

and community activities and manage your personal affairs and personal

passive investments, provided, however, such conduct does not

materially interfere with your Kodak duties and responsibilities.  You

may also serve on the boards of directors or advisory committees of

other corporations with the prior approval of the Board of Directors or

Chief Executive Officer provided such activities do not (1) materially

interfere with your Kodak duties and responsibilities; or (2) conflict

with the Company's businesses or strategies.

 

25.  Definitions

 

The following definitions will apply to this letter agreement:

 

     A.   Approved Reason.  Approved Reason is a term used in all of

          Kodak's stock option grants and means a reason for

          terminating employment with Kodak which, in the opinion of

          the Executive Compensation and Development Committee of the

          Board of Directors, is in the best interests of Kodak.

 

     B.   Cause.  Cause means:

 

          I.   your Willful and continued failure or refusal for a

               period of at least 60 days following delivery to you of

               a written notification from the Chief Executive Officer

               or Board to attempt to perform the usual, customary or

               reasonable functions of your positions other than due to

               a disability or approved leave; or

 

          II.  your gross negligence or Willful misconduct in the

               performance of your duties or obligations to Kodak that

               is, or is likely to be or is intended to be, materially

               detrimental to the Company; or

 

          III. your conviction of any felony (other than a felony

               predicated on your vicarious liability or involving a

               traffic violation) or crime involving moral turpitude;

               or

 

          IV.  your unlawful possession, use or sale of narcotics or

               other controlled substances, or performing job duties

               while illegally used controlled substances are present

               in your system; or

                                                              <PAGE> 85

 

          V.   your material breach of this letter agreement which, if

               correctable, remains uncorrected for 20 days after

               written notice to you by Kodak of the breach; or

 

          VI.  your material breach of a requirement of the Kodak

               Business Conduct Guide which requirement has

               consistently resulted in the termination of employment

               by employees who have committed similar breaches and

               which, if correctable, remains uncorrected for 20 days

               after written notice to you by Kodak of the breach; or

 

          VII. your breach of your Employee's Agreement.

 

     C.   Company.  "Company" means Kodak and all of its subsidiaries and

          affiliates.

 

     D.   Competitor.  A "Competitor" means any of the five (5)

          organizations designated by the Board of Directors in good

          faith as direct competitors to the Company.  Such designation

          shall be in a writing delivered to you within thirty (30)

          days after the commencement of employment (the "Prohibited

          List").  The Prohibited List may be changed by the Board of

          Directors from time to time if, in the Board's good faith

          judgment, changes in the Company's or a competitor's business

          warrant substitution of one direct competitor for another on

          the Prohibited List (but there may never be more than five

          (5) entities listed).  Such changes to the Prohibited List

          will be communicated by written notice to you, such notice to

          be effective only if your commencement of rendering services

          for such entity is ninety (90) or more days after the giving

          of such notice.

 

     E.   Disability.  "Disability" means meeting the definition of

          disability under the terms of the Kodak Long-Term Disability

          Plan and receiving benefits under such plan.

 

     F.   Good Reason.  "Good Reason" means the occurrence or failure

          to cause the occurrence, as the case may be, without your

          express written consent, of any of the following

          circumstances:

 

          I.   any adverse change in your titles; or

 

          II.  a material diminution of your duties, responsibilities

               or authority; or

 

          III. your assignment of duties or responsibilities which are

               materially inconsistent with your then position(s) which

               if correctable, remain uncorrected for 20 days following

               written notice to Kodak by you of the assignment (your

               nonperformance of those duties or responsibilities you

               consider materially inconsistent solely during such 20

               day notice period will not be considered a breach of

               this letter agreement); or

                                                              <PAGE> 86

 

          VI.  any material breach by Kodak of any material provision

               of this letter agreement that is not cured within 20

               days of written notice by you to Kodak's General Counsel

               specifying the nature of the material breach; or

 

          V.   failure of any successor to Kodak (whether direct or

               indirect and whether by merger, acquisition,

               consolidation, or otherwise) to assume in a writing

               delivered to you upon the assignee becoming such, the

               obligations of Kodak hereunder.

 

     G.   Permitted Reason.  "Permitted Reason" is a term used in all

          of Kodak's stock option grants and means a reason for

          terminating employment that is approved by the Chief

          Executive Officer.

 

     H.   Willful.  "Willful" means any act done or omitted to be done

          not in good faith and without reasonable belief that such

          action or omission was in the best interest of Kodak.

 

26.  Withholding

 

All amounts paid by Kodak under this letter agreement will be subject

to reduction in order to comply with applicable Federal, state and

local tax withholding requirements.

 

27.  Successors

 

This letter agreement is personal to you and, without the prior written

consent of the Board, will not be assignable by you otherwise than by

will or the laws of descent and distribution. This letter agreement

will inure to the benefit of and be enforceable by your legal

representatives.

 

This letter agreement is assignable by Kodak to any successor to all or

substantially all of the business and/or assets of Kodak (whether

direct or indirect, by purchase, merger, consolidation or otherwise).

Kodak will require any successor to assume and agree to perform this

letter agreement in the same manner and to the same extent that Kodak

would have been required to perform it if no such succession had taken

place.  This letter agreement will inure to the benefit of and be

binding upon Kodak and any such successor or assigns.

 

28.  Indemnification

 

During your employment and thereafter for the period during which you

may be subject to potential liability for any claim, action or

proceeding (whether civil or criminal) as a result of your service as

an officer of Kodak or in any capacity at the request of Kodak, Kodak

agrees to (1) indemnify and hold you harmless to the extent permitted

under the terms of its Certificate of Incorporation and Bylaws as such

document are amended from time to time; and (2) continue to cover you

under its directors and officers insurance at the same level then

maintained by Kodak for its officers and directors.

                                                              <PAGE> 87

 

29.  Miscellaneous

 

By accepting this conditional offer of employment, you agree and

acknowledge that this letter contains the entire understanding between

Kodak and yourself with respect to your employment and supersedes all

previous written or oral negotiations, commitments, and agreements with

respect to such subject matter.

 

You agree to keep the content and existence of this letter, and all of

the facts concerning its negotiation and implementation, confidential

until it is filed by Kodak with the Securities and Exchange Commission.

You may, however, review it with your financial advisor, attorney

and/or spouse and with my designee or me.

 

If any portion of this letter is deemed to be void or unenforceable by

a court of competent jurisdiction, the remaining portions will remain

in full force and effect to the maximum extent allowed by law.  The

parties intend and desire that each portion of this letter be given the

maximum possible effect by law.

 

This letter agreement, the Eastman Kodak Company Employee's Agreement

and the Release attached as Addendum A, and their interpretation and

application, will be governed and controlled by the laws of the State

of New York, applicable as though to a contract made in New York by

residents of New York and wholly to be performed in New York without

giving effect to principles of conflicts of laws.

 

                                *    *    *

 

Please respond to this conditional offer of employment prior to March

15, 2003.  If you find the conditional offer acceptable, please

acknowledge this by signing your name on the signature line provided

and returning the signed original of this letter agreement, along with

the executed copy of the enclosed Employees' Agreement and the consent

form authorizing Kodak to obtain your credit report, directly to me.

 

Please feel free to contact me at (716) 724-4573 if you have any

questions.

 

 

                                   Sincerely,

 

 

 

                                   Michael P. Morley

 

MPM:llh

Enclosures

 

cc:  Daniel A. Carp

 

 

I accept the terms and conditions of this letter agreement.

 

 

 

Signature                         Date

 

 

 

Social Security No.                Birthdate

 

TOP OF DOCUMENT

 

 

 

 

 

 

 

 

 

February 27, 2007

 

 

Mr. Antonio M. Perez

Chairman and Chief Executive Officer

Eastman Kodak Company

343 State Street

Rochester, NY 14650

 

Re:  First Amendment to March 3, 2003 Letter Agreement

 

Dear Antonio:

 

By way of a letter agreement dated March 3, 2003 (the "Agreement"),

Eastman Kodak Company ("Kodak") and you agreed to certain terms

regarding your employment.  Certain terms of the Agreement were changed

by my letter to you dated May 10, 2005 on behalf of the Executive

Compensation and Development Committee of the Kodak Board of Directors

in connection with your election by the Board as Chief Executive

Officer, effective June 1, 2005.  The purpose of this letter is to amend

the Agreement as set forth herein, for such consideration as the parties

acknowledge is mutually sufficient.  Any defined term used in this

letter agreement, unless otherwise defined herein, will have the same

meaning as that ascribed to it under the Agreement.  This letter

supersedes the Agreement to the extent inconsistent therewith.

 

1.   Supplemental Enhanced Pension Benefit

 

     A.   Section13A of the Agreement is hereby amended to change the

reference therein from "9 years" to "seven years, seven months and six

days".  Section 13B of the Agreement is hereby amended to change the

reference therein from "9 year period" to "seven year, seven month and

six day period", and to change the two references therein from "ninth

anniversary" to "seven year, seven month and six day anniversary".

 

<PAGE> 2

 

     B.   Section13E of the Agreement is hereby amended in its entirety

to read as follows:

 

     E.   Payment.   The amount of the supplemental enhanced  retirement

          benefit,  if any, payable to you under this Section  13  will:

          (i)  if  your employment terminates prior to June 1, 2007,  be

          paid  in  the form of a monthly annuity commencing  the  first

          month following the month containing the six-month anniversary

          of  your  termination of employment from Kodak and  continuing

          for  any remaining months in 2007, with the balance to be paid

          in  a  lump sum as soon as practicable on or after January  1,

          2008;  (ii) if your employment terminates on or after June  1,

          2007,  be  paid  in a single lump sum as soon  as  practicable

          following  the  six-month anniversary of your  termination  of

          employment  from  Kodak; (iii) be paid out of Kodak's  general

          assets, not under KRIP; (iv) not be funded in any manner;  (v)

          be  included in your gross income as ordinary income,  subject

          to  all income and payroll tax withholding required to be made

          under  all applicable laws; and (vi) not be grossed up  or  be

          given  any other special tax treatment by Kodak.  For purposes

          of  calculating the lump sum amount under (i)  and  (ii),  you

          will  be considered a pre-1996 lump-sum eligible hire who  has

          attained  age  65, all benefits under this agreement  will  be

          treated  as  post-1995  accrued benefits,  and  the  actuarial

          assumptions  used  will  be those in effect  under  KRIP  with

          respect to your Annuity Start Date (as defined under KRIP).

 

<PAGE> 3

 

2.   Miscellaneous

 

Section 29 of the Agreement is hereby amended to add the following

paragraphs to the end of such Section:

 

"The arrangements described in this letter agreement are intended to

comply with Section 409A of the Internal Revenue Code to the extent such

arrangements are subject to that law.  The parties agree that they will

negotiate in good faith regarding amendments necessary to bring the

arrangements into compliance with the terms of that Section or an

exemption therefrom as interpreted by guidance issued by the Internal

Revenue Service; provided, however, that Kodak may unilaterally amend

this agreement for purposes of compliance if, in it's sole discretion,

Kodak determines that such amendment would not have a material adverse

effect with respect to your rights under the agreement.  The parties

further agree that to the extent an arrangement described in this letter

fails to qualify for exemption from or satisfy the requirements of

Section 409A, the affected arrangement may be operated in compliance

with Section 409A pending amendment to the extent authorized by the

Internal Revenue Service.  In such circumstances Kodak will administer

the letter in a manner which adheres as closely as possible to the

existing terms and intent of the letter while complying with Section

409A.  This paragraph does not restrict Kodak's rights (including,

without limitation, the right to amend or terminate) with respect to

arrangements described in this letter to the extent such rights are

reserved under the terms of such arrangements.

 

To the extent that the terms of this Agreement relate to a compensation

or benefit plan, such terms are subject to the provisions of the

applicable governing documents (such as plan documents, administrative

guides and award notices), which are subject to change.

 

<PAGE> 4

 

Except as otherwise provided herein, the benefits described in this

Agreement will be administered by the Kodak employee with the title

Director of Human Resources for Kodak ("Administrator"), in accordance

with the terms of this Agreement.  The Administrator will have total and

exclusive responsibility to control, operate, manage and administer the

Agreement in accordance with its terms and all the authority that may be

necessary or helpful to enable him or her to discharge his or her

responsibilities with respect to such benefits.  Without limiting the

generality of the preceding sentence, the Administrator will have the

exclusive right to: interpret the this Agreement, decide all questions

concerning eligibility for and the amount of benefits payable under this

Agreement (including, without limitation, whether Kodak has offered you

a reasonably comparable position for purposes of this Agreement),

construe any ambiguous provision of the this Agreement, correct any

default, supply any omission, reconcile any inconsistency, and decide

all questions arising in the administration, interpretation and

application of this Agreement.  The Administrator will have full

discretionary authority in all matters related to the discharge of his

or her responsibilities and the exercise of his or her authority under

this Agreement, including, without limitation, his or her construction

of the terms of this Agreement and his or her determination of

eligibility for benefits under this Agreement.  It is the intent of this

Agreement, as well as both parties hereto, that the decisions of the

Administrator and his or her actions with respect to this Agreement will

be final and binding upon all persons having or claiming to have any

right or interest in or under this Agreement and that no such decision

or actions shall be modified upon judicial review unless such decision

or action is proven to be arbitrary or capricious."

 

3.   Remaining Terms of the Agreement

 

All of the remaining terms of the Agreement, to the extent that they are

not  inconsistent with this letter agreement, will remain in full  force

and effect, without amendment or modification.

 

Your signature below means that:

 

     1.   You  have  had  ample  opportunity to discuss  the  terms  and

          conditions  of  this letter agreement with an attorney  and/or

          financial  advisor  of  your choice  and  as  a  result  fully

          understand its terms and conditions; and

 

     2.   You  accept the terms and conditions set forth in this  letter

          agreement; and

 

     3.   This  letter  agreement supersedes and replaces  any  and  all

          agreements  or understandings, whether written or  oral,  that

          you  may  have  had  with the Company concerning  the  matters

          discussed herein.

 

<PAGE> 5

 

If  you  find  the foregoing acceptable, please sign your  name  on  the

signature  line provided below.  Once the letter agreement is  executed,

please return it directly to my attention.

 

                              Very truly yours,

 

                              /s/ Timothy M. Donahue

 

                              Timothy M. Donahue

TMD:gjg

 

I accept the terms and conditions of this letter agreement.

 

Signed:  /s/ Antonio M. Perez

 

          Antonio M. Perez

 

Dated:   March 1, 2007

 

  

 

 

 

 

 

Exhibit (10.24)

December 9, 2008

 

 

 

Mr. Antonio M. Perez

Chairman and Chief Executive Officer

Eastman Kodak Company

343 State Street

Rochester, NY 14650

 

Re:           Second Amendment to March 3, 2003 Letter Agreement

 

Dear Antonio:

 

By way of a letter agreement dated March 3, 2003 (the “Agreement”), Eastman Kodak Company (“Kodak”) and you agreed to certain terms regarding your employment.  Certain terms of the Agreement were changed by the letter to you from Timothy M. Donahue dated May 10, 2005 on behalf of the Executive Compensation and Development Committee of the Kodak Board of Directors in connection with your election by the Board as Chief Executive Officer, effective June 1, 2005, and reflected in the First Amendment to the Agreement dated February 27, 2007.  The purpose of this letter is to amend the Agreement as set forth herein, for such consideration as the parties acknowledge is mutually sufficient, for the purpose of complying with certain requirements of Section 409A of the Internal Revenue Code.  Any defined term used in this letter agreement, unless otherwise defined herein, will have the same meaning as that ascribed to it under the Agreement.  This letter supersedes the Agreement (as amended) to the extent inconsistent therewith.

 

 1.           Supplemental Enhanced Pension Benefit

 

A.           The following paragraph will replace the second paragraph in Section 13(C) of the Agreement:

 

Provided, however, in the event of termination as a result of your death, your spouse or beneficiary will be entitled to a survivor benefit calculated as set forth in Section 13(E) below, using the service crediting set forth in the prior paragraph and subject to the offset set forth in Section 13(D).  By way of clarification, your survivors are not eligible for the post-retirement survivor income benefit which is provided under our life insurance plans for a specified grandfathered population.

 

 

 

 

 

 

 

Mr. Antonio M. Perez

December 9, 2008

 

 

 

B.           Section 13(E) of the Agreement is hereby amended in its entirety to read as follows:

 

 

E.

Payment.  The amount of the supplemental enhanced retirement benefit, if any, payable to you or your beneficiary under this Section 13 will be paid in the form set forth below.  Such amount shall (i) be paid out of Kodak’s general assets, not under KRIP; (ii) not be funded in any manner; (iii) be included in the gross income of you or your beneficiary as ordinary income, subject to all income and payroll tax withholding required to be made under all applicable laws; and (iv) not be grossed up or be given any other special tax treatment by Kodak.  For purposes of calculating any benefits, you will be considered a pre-1996 lump-sum eligible hire who has attained age 65, all benefits under this Agreement will be treated as post-1995 accrued benefits, and the actuarial assumptions used will be those in effect under KRIP with respect to the Annuity Starting Date (as defined under KRIP).

 

 

I.

Form of Payment to You.  Your supplemental enhanced pension benefit will be paid in a single lump sum within 90 days following the six-month anniversary of your termination of employment from Kodak.  If you die after separation from service but before expiration of the six-month waiting period, payment of your supplemental enhanced pension benefit will be made to your estate within 90 days following the date of your death, and no survivor benefits will be paid under paragraph (II).

 

 

II.

Form of Payment to Your Beneficiary.  The survivor benefit attributable to your supplemental enhanced pension benefit hereunder will be paid in the form of a lump sum that, in the case of your surviving spouse who would qualify to select between the Pre-retirement Survivor Income Benefit or a qualified pre-retirement survivor annuity under Section 10.02 of KRIP if you were a participant in traditional KRIP, is actuarially equivalent to the greater of (i) an annuity that would be calculated under the formula for the Pre-retirement Survivor Income Benefit set forth in Section 10.02 of KRIP, or (ii) a qualified pre-retirement survivor annuity as calculated pursuant to Section 10.02(h) of KRIP, and if you have no surviving spouse who would qualify for a benefit under Section 10.02 of KRIP but have a beneficiary who would be entitled to a Pre-retirement Survivor Income Benefit if you were a participant in traditional KRIP, is actuarially equivalent to an annuity that would be calculated under the formula for the Pre-retirement Survivor Income Benefit set forth in Section 10.02 of

 

 

 

page 2 of 8

 

 

 

 

Mr. Antonio M. Perez

December 9, 2008

 

 

 

 

KRIP with payment to be made to the person(s) who would receive the first monthly payment of the Pre-retirement Survivor Income Benefit or the qualified pre-retirement survivor annuity (if greater).  If no such person(s) exist(s), no survivor benefits will be paid.

 

 

 2.           Stock Options

 

In order to clarify and ensure compliance with Section 409A, Section 14(A)(V) is amended to read as follows:

 

 

V.

any outstanding stock option award at the time of your death will become fully vested and your estate or, in the event of an assignment of your stock option award, your transferee will have the right to exercise any such award for the remainder of the full original term of the option (but no longer than ten years);

 

Also, Section 14(B)(VII) is amended to read as follows:

 

                VII.

any stock option award, other than the stock option award described in Section 7, outstanding for at least one year at the time of your termination of employment and, if the award is unvested at the time of your termination, it will continue to vest per its terms as if you continued your employment through each vesting date and, once vested, you will have the right to exercise the award for the remainder of its original term (but no longer than ten years) unless they are forfeited sooner pursuant to their terms relating to inimical conduct or breach of Employee’s Agreement

 

Furthermore, Section 14(C)(VI) is amended to read as follows:

 

 

VI.

sixty days (or through the expiration of the option’s original term, if earlier) in which to exercise any vested stock option held by you on the date of your termination of employment unless such stock option is forfeited by its terms as a result of the circumstances resulting in your termination for Cause;

 

Section 14(D)(VII) is amended to read as follows:

 

                VII.

any stock option award, other than the stock option award described in Section 7, outstanding at the time of your termination of employment and, if the award is unvested at the time of your termination, it will continue to vest per its terms as if you continued your employment through each vesting date and, once vested, you will have the right to exercie the

 

 

 

page 3 of 8

 

 

 

 

Mr. Antonio M. Perez

December 9, 2008

 

 

 

 

award for the remainder of its original term (but no longer than ten years) unless they are forfeited sooner pursuant to their terms relating to inimical conduct or breach of Employee’s Agreement;

 

Finally, Section 14(E)(VII) is amended to read as follows:

 

                 VII.

any stock option award, other than the stock option award described in Section 7, outstanding at the time of your termination of employment and, if the award is unvested at the time of your termination, it will continue to vest per its terms as if you continued your employment through each vesting date and, once vested, you will have the right to exercise the award for the remainder of its original term (but no longer than ten years) unless they are forfeited sooner pursuant to their terms relating to inimical conduct or breach of Employee’s Agreement;

 

In addition, Section 14(F)(VIII) is amended to read as follows:

 

                 VIII.

sixty days (or through the expiration of the option’s original term, if earlier) in which to exercise any other vested stock option held by you on the date of your termination of employment;

 

 3.           Severance Allowance

 

Section 14(D) (Termination Without Cause) and Section 14(E) (Good Reason) provide for payment of a severance allowance in the event that Kodak terminates your employment without Cause, or you terminate your employment for Good Reason.  Since this severance allowance is subject to Section 409A, paragraph II of both Section 14(D) and Section 14(E) is amended to delete the phrase “on the date of your termination of employment” and replace it with “in accordance with the six-month waiting period that Kodak requires for certain executive employees as a result of Internal Revenue Code Section 409A, six months after your termination of employment, at which time payments will commence on the bi-weekly schedule and continue for the two (2) year period;”

 

Furthermore, Section 14(G) is amended to read as follows:

 

 

G.

Exclusivity of Severance Allowance.  The severance allowance payable to you under this Section 14 will be paid to you in lieu of any other severance, termination, or separation pay or benefit to which you may otherwise be entitled, except any benefits payable to you under any Kodak severance plan.  To the extent, however, you are eligible for a benefit under a Kodak severance plan, the severance allowance payable to you under this Section 14 will be reduced by the amount of such

 

 

 

page 4 of 8

 

 

 

 

Mr. Antonio M. Perez

December 9, 2008

 

 

 

 

severance benefit.  You acknowledge that pursuant to Section 409A of the Internal Revenue Code, any benefit provided to you under a Kodak severance plan may be required to be paid at the time and in the form prescribed for the severance allowance hereunder (notwithstanding the terms of the applicable plan), but that otherwise, benefits under a Kodak severance plan will be paid in the form provided thereunder and will not be controlled by the terms of this Agreement.

 

 4.           Financial Counseling Benefits

 

 

Sections 14(A)(VIII), B(XI), D(XV), and E(XV) state that Kodak will provide you with services under Kodak’s financial counseling program for the two year period immediately following the date of your termination of employment.

 

Section 14(A)(VIII) is amended to read as follows:

 

 

VIII.

services for your spouse or estate under Kodak’s financial counseling program for the two year period immediately following the date of your death, with all reimbursements for services to be completed no later than the end of the taxable year following the taxable year in which the expense was incurred;

 

Sections 14(B)(XI), D(XV), and E(XV) are amended to read as follows:

 

services under Kodak’s financial counseling program for the two year period immediately following the date of your termination of employment, provided that during the six-month waiting period that Kodak requires for certain executive employees as a result of Internal Revenue Code Section 409A, you will be required to pay for any services provided prior to that six-month anniversary at the time such services are rendered and Kodak will reimburse you upon receipt from you of proper documentation, as soon as administratively practicable after the six month waiting period has expired; and further provided that all reimbursements for services will be completed no later than the end of the taxable year following the taxable year in which the expense was incurred;

 

The sixth paragraph of Section 16 is amended to read as follows:

 

Our executives are provided with individual financial counseling services through one of three companies.  You may, in lieu thereof, choose to continue using your current financial counselor for such services and we will reimburse you for the cost of these services; subject, however, to a maximum reimbursement of $6,000 per taxable year.  You will be immediately eligible for this benefit.  If you

 

 

 

page 5 of  8 

 

 

 

 

Mr. Antonio M. Perez

December 9, 2008

 

 

 

elect to utilize your own financial planner, reimbursement claims must be submitted in a timely manner and reimbursement must be completed by the end of the taxable year after the taxable year in which the expense is incurred.  This benefit will cease upon termination of employment except as otherwise provided under the terms of Kodak’s financial counseling services program or Section 14.

 

 5.           Miscellaneous

 

Section 29 of the Agreement is hereby amended to revise the paragraphs added to the end of such Section by the First Amendment to read as follow:

 

The arrangements described in this letter agreement are intended to comply with Section 409A of the Internal Revenue Code to the extent such arrangements are subject to that law, and shall be interpreted and administered accordingly.  The parties agree that they will negotiate in good faith regarding amendments necessary to bring the arrangements into compliance with the terms of that Section or an exemption therefrom as interpreted by guidance issued by the Internal Revenue Service; provided, however, that Kodak may unilaterally amend this Agreement for purposes of such compliance if, in its sole discretion, Kodak determines that such amendment would not have a material adverse effect with respect to your rights under the Agreement.  The parties further agree that to the extent an arrangement described in this letter fails to qualify for exemption from or satisfy the requirements of Section 409A, the affected arrangement may be operated in compliance with Section 409A pending amendment to the extent authorized by the Internal Revenue Service.  In such circumstances Kodak will administer the letter in a manner which adheres as closely as possible to the existing terms and intent of the letter while complying with Section 409A.  This paragraph does not restrict Kodak’s rights (including, without limitation, the right to amend or terminate) with respect to arrangements described in this letter to the extent such rights are reserved under the terms of such arrangements.

 

By signing this Agreement you agree that the Company has not provided you with advice regarding the tax treatment of any of the benefits or payments provided hereunder.  In particular, you hereby acknowledge that Kodak makes no representations with respect to the tax consequences of the compensation arrangements described in this Agreement under Section 409A of the Internal Revenue Code of 1986, as amended, or administrative guidance thereunder.

 

To the extent that the terms of this Agreement relate to a compensation or benefit plan, such terms are subject to the provisions of the applicable governing documents (such as plan documents, administrative guides and award notices), which are subject to change.

 

 

 

page 6 of 8

 

 

 

 

Mr. Antonio M. Perez

December 9, 2008

 

 

 

Except as otherwise provided herein, the benefits described in this Agreement will be administered by the Kodak employee with the title Director of Human Resources for Kodak ("Administrator"), in accordance with the terms of this Agreement.  The Administrator will have total and exclusive responsibility to control, operate, manage and administer the Agreement in accordance with its terms and all the authority that may be necessary or helpful to enable him or her to discharge his or her responsibilities with respect to such benefits.  Without limiting the generality of the preceding sentence, the Administrator will have the exclusive right to: interpret this Agreement, decide all questions concerning eligibility for and the amount of benefits payable under this Agreement (including, without limitation, whether Kodak has offered you a reasonably comparable position for purposes of this Agreement), construe any ambiguous provision of the this Agreement, correct any default, supply any omission, reconcile any inconsistency, and decide all questions arising in the administration, interpretation and application of this Agreement.  The Administrator will have full discretionary authority in all matters related to the discharge of his or her responsibilities and the exercise of his or her authority under this Agreement, including, without limitation, his or her construction of the terms of this Agreement and his or her determination of eligibility for benefits under this Agreement.  It is the intent of this Agreement, as well as both parties hereto, that the decisions of the Administrator and his or her actions with respect to this Agreement will be final and binding upon all persons having or claiming to have any right or interest in or under this Agreement and that no such decision or actions shall be modified upon judicial review unless such decision or action is proven to be arbitrary or capricious.

 

 6.           Remaining Terms of the Agreement

 

All of the remaining terms of the Agreement, as amended by the First Amendment, to the extent that they are not inconsistent with this letter agreement, will remain in full force and effect, without amendment or modification.

 

Your signature below means that:

 

 

1.

You have had ample opportunity to discuss the terms and conditions of this letter agreement with an attorney and/or financial advisor of your choice and as a result fully understand its terms and conditions; and

 

 

2.

You accept the terms and conditions set forth in this letter agreement; and

 

 

3.

This letter agreement supersedes and replaces any and all agreements or understandings, whether written or oral, that you may have had with the Company concerning the matters discussed herein.

 

 

 

page 7of 8

 

 

 

 

Mr. Antonio M. Perez

December 9, 2008

 

 

 

If you find the foregoing acceptable, please sign your name on the signature line provided below.  Once the letter agreement is executed, please return it directly to my attention.

 

Very truly yours,

 

 

                                                        /s/ Richard S. Braddock

 

Richard S. Braddock

Chairman,

Executive Compensation and Development Committee

 

RSB:gjg

 

 

 

I accept the terms and conditions of this letter agreement.

 

 

Signed:                      /s/ Antonio M. Perez                                                                           

     Antonio M. Perez

 

Dated:                                                      

 

 

page 8 of 8

 

 

 

EX-10.24 2 exhibit1024.htm EXHIBIT (10.24)

 

Exhibit (10.24)

September 28, 2009

 

Mr. Antonio M. Perez

Chairman and Chief Executive Officer

Eastman Kodak Company

343 State Street

Rochester, New York  14650

 

Re:  Amendment to Employment Agreement

 

Dear Antonio:

 

This letter serves as an amendment to your letter agreement with Eastman Kodak Company (“Kodak”) dated March 3, 2003, as amended by letter agreements dated February 27, 2007, December 9, 2008 and April 29, 2009 (“Letter Agreement”).  This letter also amends certain terms in the letter to you from the Company dated May 10, 2005, concerning your election as Chairman and Chief Executive Officer (the “Position Letter”).  Any defined term used in this letter, unless otherwise defined herein, will have the same meaning that is ascribed to it under the Letter Agreement or the Position Letter as applicable.  This letter supersedes the Letter Agreement and the Position Letter to the extent inconsistent therewith.

 

Amendments to Letter Agreement

 

Your Letter Agreement is revised as follows:

 

Sections 9 and 10

Sections 9 and 10 of your Letter Agreement are deleted and replaced with the following:

 

Corporate Officer Equity Program

 

You will be eligible to participate in the annual equity program for corporate officers under the Eastman Kodak Company Omnibus Plan (the “Omnibus Plan”).  Awards under the Omnibus Plan may take the form of Stock Options, Leadership Stock Units(Performance Shares), Restricted Stock Units, and/or other forms of equity as provided under the Omnibus Plan.  On an annual basis, the Executive Compensation and Development Committee (the “Committee”) will make the final determination of the amount and form of the award to be granted to you.  The specific terms, conditions and restrictions on any such award will be governed by the Omnibus Plan and accompanying Administrative Guides and Award Notices.

 

Sections 13A and 13C

The first paragraph of Section 13A of your Letter Agreement is revised to add the terms set forth below in bold type, to state in full as follows:

 

In General.  After you have completed at least 3 years of service, you will be eligible for the supplemental enhanced pension benefit described in this Section 13 in lieu of, and not in addition to, the enhanced pension benefit described in Section 12.  Assuming you satisfy the conditions of Section 13(B) below and subject to the offset provisions contained in Section 13(D) below, Kodak will provide you, a retirement income benefit based on the following assumptions: (1) that you were eligible to participate in the Retirement Plan by virtue of being employed by Kodak after December 31, 1995, but prior to March 1, 1999; and (2) that you have completed 25 years of service through November 30, 2010 plus service for each full or partial month of employment beginning on December 1, 2010; provided, however, that expressed in the form of a single life annuity, the amount of the supplemental enhanced pension benefit will be at least $21,000 per month.  Expressed in the form of a single life annuity and based on your initial base salary and target EXCEL bonus and assuming a 5% increase in base salary, this supplemental enhanced pension benefit would provide you a retirement income benefit of approximately $84,000 per month.

 

 

                                                                 Eastman Kodak Company • 343 State Street • Rochester, NY  14650


 

The first sentence of Section 13C is revised to state as follows:

 

Notwithstanding Section 13(B) above, if Kodak terminates your employment before November 8, 2010 without Cause, or if your employment terminates before November 8, 2010 due to death, Disability or Good Reason, you will receive a pro rata portion of the supplemental enhanced pension benefit described in Section 13(A) above.

 

Sections 14D and 14E

Paragraph III of Section 14D and 14E of your Letter Agreement is revised as follows:

 

III. a pro-rata award under EXCEL for the year in which your termination occurs, if earned, as certified and determined by the Committee, payable in a single installment on the normal payment date for awards earned for the year.  The pro-rata award will be calculated by multiplying the amount of the earned award by a fraction, the numerator of which will be the number of full months you are employed by the Company during the performance period and the denominator of which shall be 12. For purposes of this calculation, a partial month of employment will: (1) be treated as a full month of employment to the extent you are employed for 15 or more days of such month; and (2) not be taken into consideration to the extent you are employed for less than 15 days of such month.

 

 

Executive Protection Plan

As part of your Letter Agreement, it is agreed that you waive any and all rights to receive benefits associated with the following terms in Section 2.16 of the Eastman Kodak Company Executive Protection Plan:

 

“(c) a voluntary termination of employment by the Chief Executive Officer for any reason (or no reason at all) during the 30-day period commencing 23 months after the date of a Change in Control.”

 

In addition, as part of your Letter Agreement, it is agreed that you waive any and all rights to receive the Gross-Up Payment as defined and described in Exhibit D of the Executive Protection Plan.

 

In the event of any conflict between the terms of the Executive Protection Plan and your Letter Agreement as amended hereby, your Letter Agreement (as amended hereby) shall govern.

 

 

Amendments to Position Letter

 

The terms in your Position Letter pertaining to “Target Leadership Stock Allocation” and “Target Stock Option Allocation under Officer Stock Option Program” are deleted and replaced with the terms above with regard to Sections 9 and 10 of your Letter Agreement.  For the sake of clarity, these terms are:

 

Corporate Officer Equity Program

 

You will be eligible to participate in the annual equity program for corporate officers under the Eastman Kodak Company Omnibus Plan (the “Omnibus Plan”).  Awards under the Omnibus Plan may take the form of Stock Options, Leadership Stock Units(Performance Shares), Restricted Stock Units, and/or other forms of equity as provided under the Omnibus Plan.  On an annual basis, the Executive Compensation and Development Committee (the “Committee”) will make the final determination of the amount and form of the award to be granted to you.  The specific terms, conditions and restrictions on any such award will be governed by the Omnibus Plan and accompanying Administrative Guides and Award Notices.

 

 

2


 

Compensation Elements

 

In connection with the amendments to your Letter Agreement and the Position Letter, you shall receive the following:

 

1.  

Stock Option Grant

Effective October 14, 2009, you shall receive a grant of 500,000 stock options under the terms of the Omnibus Plan and its associated relevant Administrative Guide/Notice of Award  that will accompany the grant.

 

2. Performance Stock Units

You will be eligible for grants of performance stock units on January 4, 2010 and January 3, 2011, under the terms of the Omnibus Plan and its associated Administrative Guides/Notice of Awards that accompanies the grants.  Each grant shall have a value of $1,230,000.  Each grant shall have a performance period of one year and each shall vest in full on December 31, 2013.  The performance goals associated with each grant shall be established by the Committee within the first ninety (90) days of each performance period.

 

Remaining Terms of Letter Agreement and Position Letter

 

All of the remaining terms of the Letter Agreement and of the Position Letter, to the extent that they are not inconsistent with this letter amendment, will remain in full force and effect, without amendment or modification.

 

 

3


 

 

 

Your signature below means that:

 

1.  

You have had ample opportunity to discuss the terms and conditions of this letter agreement with an attorney and/or financial advisor of your choice and, as a result, fully understand its terms and conditions; and

 

2.  

You accept the terms and conditions set forth in this letter agreement; and

 

3.  

This letter agreement supersedes and replaces any and all agreements or understandings, whether written or oral, that you may have had with the Company concerning the matters discussed herein.

 

If you find the foregoing acceptable, please sign your name on the signature line provided below.  Once this letter agreement is executed, please return it directly to my attention.

 

Thank you for your continued leadership and commitment to Kodak.

 

 

Very truly yours,


 

                                                                                                 /s/ Richard S. Braddock


 

Richard S. Braddock

 

 

 

I accept the terms and conditions of this letter agreement.

 

 

Signed:        /s/ Antonio M. Perez

 

Antonio M. Perez

 

Dated:           9/28/2009

 

 

 

 

 

 

4


 



 

 

 

May 10, 2005

 

Mr. Antonio M. Perez

President and Chief Operating Officer

Eastman Kodak Company

343 State Street

Rochester, NY 14650

 

Dear Antonio:

 

The purpose of this letter is to inform you that the

Executive Compensation and Development Committee (the

"Compensation Committee") of the Board of Directors of

Eastman Kodak Company (the "Company") has approved the

following compensation arrangements for you in connection

with your election by the Board as Chief Executive Officer

of the Company, effective June 1, 2005, and Chairman of the

Board of the Company, effective December 31, 2005.

 

Effective June 1, 2005, the following will apply:

 

Wage Grade:  72

 

Base Salary:  $1,100,000

 

Target EXCEL Cash Bonus Leverage:  155% of base salary

 

Target Leadership Stock Allocation:  34,000 units for the

2006-2007 cycle

 

Target Stock Option Allocation under Officer Stock Option

Program:  72,000 non-qualified stock options for the 2005

officer stock option grant

 

One-Time Cash Award:  $150,000

 

One-Time Restricted Stock Award:  60,000 shares of

restricted stock (assuming shareholder approval of the

Company's new omnibus plan); 50% to vest on third

anniversary of grant date and 50% to vest on fifth

anniversary of grant date; deferral feature

 

One-Time Stock Option Award:  300,000 non-qualified stock

options (assuming shareholder approval of the Company's new

omnibus plan); 7-year term; exercise price of fair market

value on grant date; 1/3 to vest on each of first three

anniversaries of grant date

 

 

<PAGE> 2

May 10, 2005

 

 

Effective December 31, 2005, the following will apply:

 

Wage Grade:  73

 

Target Leadership Stock Allocation:  50,000 units,

commencing with the 2007-2008 cycle, subject to Compensation

Committee approval of the allocation schedule

 

Target Stock Option Allocation under Officer Stock Option

Program:  100,000 non-qualified stock options, subject to

Compensation Committee approval of the allocation schedule

 

Congratulations on your promotion.  I wish you continued

success at the Company.

 

                              Sincerely,

 

                              /s/ Timothy M. Donahue

 

                              Timothy M. Donahue

 

 

 

Timothy M. Donahue, Chairman, Executive Compensation and

Development Committee

 

EASTMAN KODAK COMPANY  343 STATE STREET  ROCHESTER, NEW YORK

14650

 

TEL (585) 724-4000

 

 

_________________________________________________________________________