Exhibit (10.5)
 
 
2005 Omnibus Long-Term
 
 
Compensation Plan
 
 
of
 
 
Eastman Kodak Company
 
 
As Amended Effective January 1, 2009
 
 

 

 
 

 

Table of Contents
 
                                                                                                                                                          
Page

 
ARTICLE 1 PURPOSE AND TERM OF
PLAN                                                                            
1

ARTICLE 2
DEFINITIONS                                                                                                              
1
 
ARTICLE 3
ELIGIBILITY                                                                                                                 
6

ARTICLE 4 PLAN
ADMINISTRATION                                                                                        7
 
ARTICLE 5 FORM OF
AWARDS                                                                                                   9

ARTICLE 6 SHARES SUBJECT TO
PLAN                                                                                   11

ARTICLE 7 PERFORMANCE
AWARDS                                                                                     
11

ARTICLE 8 STOCK
OPTIONS                                                                                                        
12

ARTICLE 9 STOCK APPRECIATION
RIGHTS                                                                             13
 
ARTICLE 10 RESTRICTED STOCK
AWARDS                                                                           
14

ARTICLE 11 OTHER STOCK-BASED
AWARDS                                                                        14

ARTICLE 12 PAYMENT OF
AWARDS                                                                                         15

ARTICLE 13 DIVIDEND AND DIVIDEND
EQUIVALENT                                                          17

ARTICLE 14 DEFERRAL OF
AWARDS                                                                                        17

ARTICLE 15 CHANGE IN
CONTROL                                                                                           
 18

ARTICLE 16
MISCELLANEOUS                                                                                                    
20

APPENDIX A EASTMAN KODAK COMPANY
2005 OMNIBUS LONG TERM COMPENSATION
PLAN                                                            25

 
 

 

 
ARTICLE 1
 
 
 
 
PURPOSE AND TERM OF PLAN
 
1.1  
Purpose

 
The purpose of the Plan is to provide motivation to selected Employees and
Directors to put forth maximum efforts toward the continued growth,
profitability, and success of the Company by providing equity- and cash-based
incentives to such Employees and Directors.
1.2  
Term

 
The Plan will become effective on January 1, 2005, subject to its approval by
Kodak’s shareholders, at the 2005 Annual Meeting of the shareholders, and unless
sooner terminated by the Board pursuant to Section 16.6, the Plan shall have a
term of 10 years.  Awards may not be granted after December 31, 2014; except
that the Committee may grant Awards after this date in recognition of
performance for Performance Cycles commencing prior to such date.
 
ARTICLE 2
 
 
DEFINITIONS
 
In any necessary construction of a provision of this Plan, the masculine gender
may include the feminine, and the singular may include the plural, and vice
versa.
2.1  
Award

 
“Award” means grants of both equity-, and cash-based awards, including
Performance Awards, Stock Options, SARs, Restricted Stock Awards, Restricted
Stock Unit Awards, Other Stock-Based Awards, or any form of award established by
the
Committee pursuant to Subsection 4.2(o), whether singly, in combination, or in
tandem, to a Participant by the Committee pursuant to such terms, conditions,
restrictions and/or limitations, if any, as the Committee may establish by the
Award Notice or otherwise.
2.2  
Award Notice

 
“Award Notice” means the written document establishing the terms, conditions,
restrictions, and/or limitations of an Award in addition to those established by
this Plan and by the Committee’s exercise of its administrative powers.  The
Committee shall establish the form of the written document in the exercise of
its sole and absolute discretion.  The Committee may, but need not, require a
Participant to sign a copy of the Award Notice as a precondition to receiving an
Award.
2.3  
Board

 
“Board” means the board of directors of Kodak.
2.4  
CEO

 
“CEO” means the Chief Executive Officer of Kodak.
2.5  
Change in Control

 
“Change in Control” means the occurrence of any one of the following events:
 
(a) within any twenty-four (24) month period, the Incumbent Directors shall
cease to constitute at least a majority of the Board or the board of directors
of any successor to the Company;
 
(b) any person is or becomes a “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of Kodak
representing 25% or more of the combined voting power of Kodak's then
outstanding securities eligible to vote for

 
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the election of the Board (the “Kodak Voting Securities”); provided, however,
that the event described in this paragraph (b) shall not be deemed to be a
Change in Control by virtue of any of the following acquisitions: (1) by Kodak
or any Subsidiary, (2) by any employee benefit plan (or related trust) sponsored
or maintained by Kodak or any Subsidiary, (3) by any underwriter temporarily
holding securities pursuant to an offering of such securities, (4) pursuant to a
Non-Qualifying Transaction (as defined in paragraph (c) below), or (5) a
transaction (other than one described in paragraph (c) below) in which Kodak
Voting Securities are acquired from Kodak, if a majority of the Incumbent
Directors approve a resolution providing expressly that the acquisition pursuant
to this clause (5) does not constitute a Change in Control under this paragraph
(b);
(c) the consummation of a merger, consolidation, statutory share exchange or
similar form of corporate transaction involving Kodak or any of its Subsidiaries
that requires the approval of Kodak’s shareholders, whether for such transaction
or the issuance of securities in the transaction (a “Reorganization”), unless
immediately following such Reorganization:  (1) more than 60% of the total
voting power of (x) the corporation resulting from such Reorganization (the
“Surviving Company”), or (y) if applicable, the ultimate parent corporation that
directly or indirectly has beneficial ownership of 100% of the voting securities
eligible to elect directors of the Surviving Company (the “Parent Company”), is
represented by Kodak Voting Securities that were outstanding immediately prior
to such Reorganization (or, if applicable, is represented by shares into which
such Kodak Voting Securities were converted pursuantto such Reorganization), and
such voting power among the holders thereof is in substantially the same
proportion as the voting power of such Kodak Voting Securities among the holders
thereof immediately prior to the Reorganization, (2) no person (other than any
employee benefit plan (or related trust) sponsored or maintained by the
Surviving Company or the Parent Company), is or becomes the beneficial owner,
directly or indirectly, of 25% or more of the total voting power of the
outstanding voting securities eligible to elect directors of the Parent Company
(or, if there is no Parent Company, the Surviving Company), and (3) at least a
majority of the members of the board of directors of the Parent Company (or, if
there is no Parent Company, the Surviving Company) following the consummation of
the Reorganization were Incumbent Directors at the time of the Board’s approval
of the execution of the initial agreement providing for such Reorganization (any
Reorganization which satisfies all of the criteria specified in (1), (2) and (3)
above shall be deemed to be a “Non-Qualifying Transaction”);
 
(d) the shareholders of Kodak approve a plan of complete liquidation or
dissolution of Kodak; or
 
(e) the consummation of a sale of all or substantially all of Kodak’s assets to
an entity that is not an affiliate of Kodak.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any person acquires beneficial ownership of 25% or more of Kodak
Voting Securities as a result of the acquisition of Kodak Voting Securities by
Kodak which reduces the number of Kodak Voting Securities outstanding; provided
that if after such acquisition by Kodak such person becomes the beneficial owner
of additional Kodak Voting Securities that increases the percentage of
outstanding Kodak Voting Securities beneficially owned by such person, a Change
in Control shall then occur.
 
2.6  
Change in Control Price

 
“Change in Control Price” means, for events described in clause (c) of the
definition of Change in Control, the consideration received by shareholders of
the Company in respect of a share of Common Stock in connection with the
transaction, or, for events described in clauses (a), (b), (d) or (e) of the
definition of Change in Control, the average of the closing prices for the five
(5) days preceding the date of the Change in Control.
 
2.7  
Code

 
“Code” means the Internal Revenue Code of 1986, as amended from time to time,
including regulations thereunder and any successor provisions and regulations
thereto.
 
2.8  
Committee

 
“Committee” means the Executive Compensation and Development Committee of the
Board, or such other Board committee as may be designated by the Board to
administer the Plan; provided that the Committee shall consist of three or more
directors, each of whom is (1) an “independent” director under the New York
Stock Exchange’s listing requirements, (2) a “Non-Employee Director” within the
meaning of Rule 16b-3 under the Exchange Act, and (3) an “outside director”
within the meaning of Section 162(m) of the Code and the applicable regulation
thereunder.  However, if a member of the Committee does not meet each of the
foregoing requirements, the Committee may

 
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delegate some or all of its functions under the Plan to a committee or
subcommittee composed of members that meet the relevant requirements.  The term
“Committee” includes any such committee or subcommittee, to the extent of the
Executive Compensation and Development Committee’s delegation.
 
2.9  
Common Stock

 
“Common Stock” means the common stock, $2.50 par value per share, of Kodak that
may be newly issued or treasury stock.
 
2.10  
Company

 
“Company” means Kodak and its Subsidiaries.
 
2.11 
Covered Employee

 
“Covered Employee” means an Employee who is a “Covered Employee” within the
meaning of Section 162(m) of the Code.
 
2.12 
Director

 
“Director” means a non-employee member of the Board.
 
2.13  
Disability

 
“Disability” means a disability as defined under the terms of the long-term
disability plan maintained by the Participant’s employer, or in the absence of
such a plan, the Kodak Long-Term Disability Plan.
 
2.14  
Effective Date

 
“Effective Date” means the date an Award is determined to be effective by the
Committee upon its grant of such Award.

 
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2.15  
Employee

 
 “Employee” means any person employed by Kodak or any Subsidiary on a full or
part time basis.
 
2.16  
Exchange Act

 
“Exchange Act” means the Securities and Exchange Act of 1934, as amended from
time to time, including rules thereunder and any successor provisions and rules
thereto.
 
2.17  
Fair Market Value

 
“Fair Market Value” means the mean of the high and low sales prices of a share
of Common Stock on a particular date on the New York Stock Exchange.  In the
event that the Common Stock is not traded on the New York Stock Exchange on the
relevant date, the Fair Market Value will be determined on the next preceding
day on which the Common Stock was traded.
 
2.18  
Freestanding SAR

 
“Freestanding SAR” shall have the meaning as set forth in Section 9.1.
 
2.19  
Incentive Stock Options

 
“Incentive Stock Option” means incentive stock options within the meaning of
Section 422 of the Code.
 
2.20  
Incumbent Director

 
“Incumbent Directors” means  the persons who were members of the Board as of
January 1, 2005 plus, any person becoming a director subsequent to January 1,
2005 whose election or nomination for election was approved by a vote of at
least two thirds of the Incumbent Directors then on the Board (either by a
specific vote or by approval for the proxy statement of Kodak in which such
person is named as a nominee for director, without written objection to such
nomination); provided, however, that no individual initially elected or
nominated as a director of Kodak as a result of an actual or threatened election
contest with respect to directors (“Election Contest”) or any other actual or
threatened solicitation of proxies or consents by or on behalf of any “person”
(as such term is defined in Section 3(a)(9) of the Exchange Act) other than the
Board (“Proxy Contest”), including by reason of any agreement intended to avoid
or settle any Election Contest or Proxy Contest, shall be deemed to be an
Incumbent Director until twenty-four (24) months after such election.
 
2.21  
Indemnified Person

 
“Indemnified Person” shall have the meaning as set forth in Section 4.7.
 
2.22  
Kodak

 
“Kodak” means Eastman Kodak Company.
 
2.23  
Non-Qualified Option

 
“Non-Qualified Option” shall have the meaning as set forth in Section 8.1.
 
2.24  
Option Proceeds

 
“Option Proceeds” means the cash (or equivalents) received by the Company for
the option price in connection with the exercise of Stock Options plus the
maximum tax benefit that could be realized by the Company as a result of the
exercise of such Stock Options, which tax benefit shall be determined by
multiplying (a) the amount that is deductible for federal income tax purposes as
a result of any such Stock Option exercise, times (b) the maximum federal
corporate income tax rate for the year of exercise.  To the extent that a
Participant pays the option price and/or withholding taxes with shares of Common
Stock, Option Proceeds shall not be calculated with respect to the amounts so
paid in shares of Common Stock.
 
2.25  
Other Stock-Based Award

 
“Other Stock-Based Award” means the unrestricted shares, deferred share units,
or such other form as the Committee may determine, granted pursuant to Article
11 of the Plan.
 
2.26  
Parent Company

 
“Parent Company” shall have the meaning set forth in Section 2.5.
 
2.27  
Participant

 
“Participant” means either an Employee or Director to whom an Award has been
granted by the Committee under the Plan.
 
2.28  
Performance Awards

 
“Performance Awards” means the equity- and cash-based Awards that vest on
satisfying the Performance Criteria granted pursuant to Article 7.
 
2.29  
Performance Criteria

 
“Performance Criteria” means the one or more criteria that the Committee shall
select for a Performance Cycle.
 
2.30  
Performance Cycle

 
“Performance Cycle” means the one or more periods of time, which may be of
varying and overlapping durations, as the Committee may select, over which the
attainment of the Performance Criteria will be measured for the purpose of
determining a Participant’s right to and the payment of a Performance Award.

 
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2.31  
Performance Formula

 
 “Performance Formula” means, for a Performance Cycle, the one or more objective
formulas applied against the relevant Performance Criteria to determine, with
regard to the Award of a particular Participant, whether all, some portion but
less than all, or none of the Award has been earned for the Performance
Cycle.  The formula may exclude the impact of charges for restructurings,
discontinued operations, extraordinary items, and other unusual or non-recurring
items, and the cumulative effects of accounting changes each as defined by
generally accepted accounting principles and as identified in the financial
statements, notes to the financial statements, management’s discussion and
analysis or other SEC filings.
 
2.32  
Plan

 
“Plan” means the 2005 Omnibus Long-Term Compensation Plan, including all
attachments thereto.
 
2.33  
Restricted Stock Award

 
“Restricted Stock Award” means the equity-based awards in actual shares granted
pursuant to Article 10 of the Plan.
 
2.34  
Restricted Stock Unit Award

 
“Restricted Stock Unit Award” means the equity-based awards in share units
granted pursuant to Article 10 of the Plan.
 
2.35  
Retirement

 
“Retirement” means, in the case of a Participant employed by Kodak, voluntary
termination of employment on or after age 55 with 10 or more years of service or
on or after age 65.  In the case of a Participant employed by a Subsidiary,
“Retirement” means early or normal retirement under the terms of the
Subsidiary’s retirement plan, or if the Subsidiary does not have a retirement
plan, termination of employment on or after age 60.  A Participant must
voluntarily terminate his or her employment in order for his or her termination
of employment to be for “Retirement.”
 
2.36  
SARs

 
“SARs” means the stock appreciation rights granted pursuant to Article 9 of the
Plan.
 
2.37  
Section 409A

 
“Section 409A” means Section 409A of the Code, and the Treasury Regulations
promulgated and other official guidance issued thereunder.
 
2.38  
Section 409A Change in Control

 
“Section 409A Change in Control” means an event that qualifies as a “change in
the ownership or effective control of the corporation, or in the ownership of a
substantial portion of the assets of the corporation” within the meaning of
Sections 1.409A-3(a)(5) and 1.409A-3(i)(5) of the Treasury regulations.
 
2.39  
Stock Option

 
“Stock Option” means any right granted to a Participant to purchase Common Stock
at such price or prices and during such periods established pursuant to Article
8 of the Plan.
 
2.40  
Subsidiary

 
“Subsidiary” means a corporation or other business entity in which Kodak
directly or indirectly has an ownership interest of 50 percent or more, except
that with respect to Incentive Stock Options, "Subsidiary" shall mean
"subsidiary corporation" as defined in Section 424(f) of the Code.  

 
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2.41  
Substitute Awards

 
“Substitute Awards” means Awards granted or shares issued by the Company in
assumption of, or in substitution or exchange for, Awards previously granted, or
the right or obligation to make future awards, by a company acquired by the
Company or any Subsidiary or with which the Company or any Subsidiary combines.
 
2.42  
Surviving Company

 
“Surviving Company” shall have the meaning set forth in Section 2.5.
 
2.43  
Tandem SAR

 
“Tandem SAR” shall have the meaning set forth in Section 9.1.
 
2.44  
Year

 
“Year” means Kodak’s fiscal year.
 
ARTICLE 3
 
 
ELIGIBILITY
 

All Employees and Directors are eligible to participate in the Plan.  The
Committee may select, from time to time, Participants from those Employees who,
in the opinion of the Committee, can further the Plan’s purposes.  In addition,
the Committee may select, from time to time, Participants from those Directors
(who may or may not be Committee members) who, in the opinion of the Committee,
can further the Plan’s purposes.  Once a Participant is so selected, the
Committee shall determine the type(s) of Awards to be made to the Participant
and

 
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--------------------------------------------------------------------------------

 

shall establish in the related Award Notice(s) the terms, conditions,
restrictions and/or limitations, if any, applicable to the Award(s) in addition
to those set forth in this Plan and the administrative rules and regulations
issued by the Committee.
 
ARTICLE 4
 
 
PLAN ADMINISTRATION
 
4.1  
Responsibility

 
The Committee shall have total and exclusive responsibility to control, operate,
manage and administer the Plan in accordance with its terms.
 
4.2  
Authority of the Committee

 
The Committee shall have all the authority that may be necessary or helpful to
enable it to discharge its responsibilities with respect to the Plan.  Without
limiting the generality of the preceding sentence, the Committee shall have the
exclusive right to: (a) select the Participants and determine the type of Awards
to be made to Participants, the number of shares or amount of cash (or
equivalents) subject to Awards and the terms, conditions, restrictions and
limitations of the Awards; (b) interpret the Plan; (c) determine eligibility for
participation in the Plan; (d) decide all questions concerning eligibility for
and the amount of Awards payable under the Plan; (e) construe any ambiguous
provision of the Plan; (f) correct any defect; (g) supply any omission;
(h) reconcile any inconsistency; (i) issue administrative guidelines or
sub-plans as an aid to administer the Plan and make changes in such guidelines
or sub-plans as it from time to time deems proper; (j) prescribe, amend and
rescind rules and regulations relating to the Plan, including rules governing
its own operation; (k) amend the Plan in accordance

 
7

 

with Section 16.6; (l) determine whether Awards should be granted singly, in
combination or in tandem; (m) to the extent permitted under the Plan and, if
applicable, by Section 409A, grant waivers of Plan terms, conditions,
restrictions, and limitations; (n) accelerate the vesting, exercise or payment
of an Award or the Performance Cycle of an Award when such action or actions
would be in the best interests of the Company and in compliance with Section
409A and other applicable tax law; (o) establish such other types of Awards,
besides those specifically enumerated in Article 5 hereof, which the Committee
determines are consistent with the Plan’s purpose; (p) establish and administer
Performance Formula and certify whether, and to what extent, the goals have been
attained; (q) determine the terms and provisions of any Award Notice or other
agreements entered into hereunder; (r) take any and all other action it deems
necessary or advisable for the proper operation or administration of the Plan;
(s) make all other determinations it deems necessary or advisable for the
administration of the Plan, including factual determinations; and (t) determine
whether, to what extent and under what circumstances Awards may be settled or
exercised in cash or shares of Common Stock or cancelled, forfeited or suspended
and the method or methods by which Awards may be settled, cancelled, forfeited
or suspended.
 
4.3  
Discretionary Authority

 
The Committee shall have full discretionary authority in all matters related to
the discharge of its responsibilities and the exercise of its authority under
the Plan including, without limitation, its construction of the terms of the
Plan and its determination of eligibility for participation and Awards under the
Plan.  It is the intent of the Plan that the decisions of the Committee and its
actions with respect to the Plan shall be final, binding and conclusive upon all
persons having or claiming to have any right or interest in or under the Plan.
 
4.4  
Section 162 (m) of the Code and Covered Employees

 
The terms set forth in Appendix A shall apply to all Awards granted to any
Covered Employee, other than Awards of Stock Options or SARs.
 
4.5  
Action by the Committee

 
The Committee may act only by a majority of its members.  Any determination of
the Committee may be made, without a meeting, by a writing or writings signed by
all of the members of the Committee and action so taken shall be fully effective
as if it had been taken by a vote at a meeting.  In addition, the Committee may
authorize any one or more of its number to execute and deliver documents on
behalf of the Committee.
 
4.6  
Allocation and Delegation of Authority

 
The Committee may allocate all or any portion of its responsibilities and powers
under the Plan to any one or more of its members and may delegate all or any
part of its responsibilities and powers to any person or persons selected by it,
provided that any such allocation or delegation be in writing; provided,
however, that only the Committee may select and grant Awards to Participants who
are subject to Section 16 of the Exchange Act.  The Committee may revoke any
such allocation or delegation at any time for any reason with or without prior
notice.

 
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4.7  
Liability

 
No member of the Board or the Committee or any employee of the Company (each
such person an “Indemnified Person”) shall have any liability to any person
(including, without limitation, any Participant) for any action taken or omitted
to be taken or any determination made in good faith with respect to the Plan or
any Award.  Each Indemnified Person shall be indemnified and held harmless by
Kodak against and from any loss, cost, liability or expense (including
attorneys’ fees) that may be imposed upon or incurred by such Indemnified Person
in connection with or resulting from any action, suit or proceeding to which
such Indemnified Person may be a party or in which such Indemnified Person may
be involved by reason of any action taken or omitted to be taken under the Plan
and against and from any and all amounts paid by such Indemnified Person, with
Kodak’s prior approval, in settlement thereof, or paid by such Indemnified
Person in satisfaction of any judgment in any such action, suit or proceeding
against such Indemnified Person, provided that Kodak shall have the right, at
its own expense, to assume and defend any such action, suit or proceeding and,
once Kodak gives notice of its intent to assume the defense, Kodak shall have
sole control over such defense with counsel of Kodak’s choice.  The foregoing
right of indemnification shall not be available to an Indemnified Person to the
extent that a court of competent jurisdiction in a final judgment or other final
adjudication, in either case, not subject to further appeal, determines that the
acts or omissions of such Indemnified Person giving rise to the indemnification
claim resulted from such Indemnified Person’s bad faith, fraud or willful
criminal act or omission.  The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which Indemnified Persons
may be entitled under
the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any other power that the Company may have to indemnify such
persons or hold them harmless.
 
4.8  
Interim Decision Making

 
Notwithstanding anything to the contrary contained herein:  (i) until the Board
shall appoint the members of the Committee, the Plan shall be administered by
the Board and (ii) the Board may, in its sole discretion, at any time and from
time to time, grant Awards or resolve to administer the Plan.  In either of the
foregoing events, the Board shall have all of the authority and responsibility
granted to the Committee herein.
 
ARTICLE 5
 
 
 
FORM OF AWARDS
 
5.1  
In General

 
Awards may, at the Committee’s sole discretion, be paid in the form of
Performance Awards pursuant to Article 7, Stock Options pursuant to Article 8,
SARs pursuant to Article 9, Restricted Stock Awards and Restricted Stock Unit
Awards pursuant to Article 10, Other Stock-Based Awards pursuant to Article 11
and any form established by the Committee pursuant to Subsection 4.2(o), or a
combination thereof.  All Awards shall be subject to the terms, conditions,
restrictions and limitations of the Plan.  The Committee may, in its sole
judgment, subject an Award to such other terms, conditions, restrictions and/or
limitations (including, but not limited to, the time and conditions of exercise
and restrictions on transferability, termination and vesting), provided that
they are not inconsistent with the terms of the Plan.  Awards under a particular
Article of the Plan need not be uniform and Awards under two or more Articles
may be combined into a

 
9

--------------------------------------------------------------------------------

 

single Award Notice.  Any combination of Awards may be granted at one time and
on more than one occasion to the same Participant.  For purposes of the Plan,
the value of any Award granted in the form of Common Stock shall be the Fair
Market Value as of the grant’s Effective Date.
 
5.2  
Foreign Jurisdictions

 
(a) Special Terms.  In order to facilitate the making of any Award to
Participants who are employed by the Company outside the United States (or who
are foreign nationals temporarily within the United States), the Committee may
provide for such modifications and additional terms and conditions (“special
terms”) in Awards as the Committee may consider necessary or appropriate to
accommodate differences in local law, policy or custom or to facilitate
administration of the Plan.  The special terms may provide that the grant of an
Award is subject to (1) applicable governmental or regulatory approval or other
compliance with local legal requirements and/or (2) the execution by the
Participant of a written instrument in the form specified by the Committee, and
that in the event such conditions are not satisfied, the grant shall be
void.  The Committee may adopt or approve sub-plans, appendices or supplements
to, or amendments, restatements, or alternative versions of, the Plan as it may
consider necessary or appropriate for purposes of implementing any special
terms, without thereby affecting the terms of the Plan as in effect for any
other purpose; provided, however, no such sub-plans, appendices or supplements
to, or amendments, restatements, or alternative versions of, the Plan shall:
(a) increase the limitations contained in Sections 7.5, 8.6 and 9.5; (b)
increase the number of available shares under Section 6.1; or (c)cause the Plan
to cease to satisfy any conditions of Rule 16b-3 under the Exchange Act or, with
respect to Covered Employees, Section 162(m) of the Code.
 
(b) Currency Effects.  Unless otherwise specifically determined by the
Committee, all Awards and payments pursuant to such Awards shall be determined
in U.S. currency.  The Committee shall determine, in its discretion, whether and
to the extent any payments made pursuant to an Award shall be made in local
currency, as opposed to U.S. dollars.  In the event payments are made in local
currency, the Committee may determine, in its discretion and without liability
to any Participant, the method and rate of converting the payment into local
currency.
(c) Modifications to Awards.  The Committee shall have the right at any time and
from time to time and without prior notice to modify outstanding Awards to
comply with or satisfy local laws and regulations, to avoid costly governmental
filings or to implement administrative changes to the Plan that are deemed
necessary or advisable by the Committee for compliance with laws.  By means of
illustration but not limitation, the Committee may restrict the method of
exercise of an Award to avoid securities laws or exchange control filings, laws
or regulations.  Notwithstanding the foregoing, the Committee may not modify an
outstanding Award without the consent of the affected Participant if such
modification would cause the Award to violate Section 409A.
 
(d) Acquired Rights.  No Employee in any country shall have any right to receive
an Award, except as expressly provided for under the Plan.  All Awards made at
any time are subject to the prior approval of the Committee.

 
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ARTICLE 6
 
SHARES SUBJECT TO PLAN
6.1  
Available Shares

 
(a) Aggregate Limits.  The aggregate number of shares of the Company’s Common
Stock that shall be available for grant under this Plan shall be eleven million
(11,000,000), plus any shares subject to awards made under the 1990 Omnibus
Long-Term Compensation Plan, the 1995 Omnibus Long-Term Compensation Plan and
the 2000 Omnibus Long-Term Compensation Plan, in each case that are outstanding
upon the expiration of such plan and become available pursuant to Section
6.1(b).  The aggregate number of shares available for grant under this Plan and
the number of shares subject to outstanding Awards shall be subject to
adjustment as provided by Section 6.2.  The shares issued pursuant to Awards
granted under this Plan may be shares that either were reacquired by the
Company, including shares purchased in the open market, or authorized but
unissued shares.
 
(b) For purpose of this Section 6.1, the aggregate number of shares available
for Awards under this Plan shall be increased by, (i) shares subject to Awards
that have been canceled, expired, forfeited or settled in cash, without the
issuance of substitute shares, (ii) shares subject to Awards that have been
retained by the Company in payment or satisfaction of the purchase price or tax
withholding obligation of an Award, (iii) shares issued in connection with
reinvestment of dividends or dividend equivalents (iv) shares that have been
delivered (either actually or constructively by attestation) to the Company in
payment or satisfaction of the purchase price or tax withholding obligationof an
Award, (v) shares reacquired by the Company on the open market using Option
Proceeds; provided, however, that the aggregate number of shares that may be
added back to the aggregate limit shall not be greater than the amount of such
Option Proceeds divided by the Fair Market Value on the date of exercise of the
Stock Option giving rise to such Option Proceeds, and (vi) shares subject to
Awards that otherwise do not result in the issuance of shares in connection with
payment or settlement of an Award.  In addition, the aggregate number of shares
available for grant under this Plan shall not be reduced by shares granted as
Substitute Awards.
 
6.2  
Adjustment to Shares

 
If there is any change in the number of outstanding shares of Common Stock
through the declaration of stock dividends, stock splits or the like, the number
of shares available for Awards, the shares subject to any Award and the option
prices or exercise prices of Awards shall be automatically adjusted.  If there
is any change in the number of outstanding shares of Common Stock through any
change in the capital account of Kodak, or through a merger, consolidation,
separation (including a spin-off or other distribution of stock or property),
reorganization (whether or not such reorganization comes within the meaning of
such term in Section 368(a) of the Code) or partial or complete liquidation, the
Committee shall make appropriate adjustments in the maximum number of shares of
Common Stock which may be granted under the Plan and any adjustments and/or
modifications to outstanding Awards as it, in its sole discretion, deems
appropriate.  In the event of any other change in the capital structure or in
the Common Stock of Kodak, the Committee shall also be authorized to make such
appropriate adjustments in the maximum number of shares of Common Stock
available for grant under the Plan and any adjustments and/or modifications to
outstanding Awards as it, in its sole discretion, deems appropriate.  The
maximum number of shares available for grant under the Plan shall be
automatically adjusted to the extent necessary to reflect any dividend
equivalents paid in the form of Common Stock.
 
ARTICLE 7
 
 
PERFORMANCE AWARDS
 
7.1  
In General

 
Awards may be granted to Participants in the form of Performance Awards under
the Plan.
 
7.2  
Performance Criteria

 
The Performance Criteria to be measured during any Performance Cycle selected by
the Committee may be on a corporate-wide basis based on aggregate Company
performance or performance at the Subsidiary or business unit level.  The
performance goals under the Performance Criteria may be measured against
absolute targets or relative to the performance of one or more comparable
companies or an index covering multiple companies.
 
7.3  
Discretion of Committee with Respect to Performance Awards

 
With regard to a particular Performance Cycle, the Committee shall have full
discretion to select the length of such Performance Cycle, the type(s) of
Performance Awards to be issued, the Performance Criteria that will be used to
establish the Performance Formula, the kind(s) and/or level(s) of the goals
under the Performance Formula, whether the Performance Criteria shall apply to
the Company,

 
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--------------------------------------------------------------------------------

 

Kodak, a Subsidiary, or any one or more subunits of the foregoing, and the
Performance Formula.
 
7.4  
Payment of Performance Awards

 
(a) Condition to Receipt of Performance Award.  Unless otherwise provided in the
relevant Award Notice or administrative guide, a Participant must be employed by
the Company on the last day of a Performance Cycle to be eligible for a
Performance Award for such Performance Cycle.
 
(b) Limitation.  Unless otherwise determined by the Committee, a Participant
shall be eligible to receive a Performance Award for a Performance Cycle only to
the extent that achievement of the goals under the Performance Formula for such
period is measured and as a result, all or some portion of such Participant’s
Performance Award has been earned for the Performance Cycle.
 
(c) Timing of Award Payments.  The Awards granted for a Performance Cycle shall
be paid to Participants as soon as administratively possible following
determination of achievement of the goals under the Performance Formula and
satisfaction of any applicable vesting periods or other terms and
conditions.  Unless otherwise provided in the relevant Award Notice or
administrative guide, such payment shall be made no earlier than January 1 of
the calendar year following the end of the applicable Performance Cycle and no
later than December 31 of such calendar year.
 
7.5  
Maximum Award Payable

 
The maximum Performance Award payable to any one Participant under the Plan for
a Performance Cycle is five hundred thousand (500,000) shares of Common
Stock.  In the event that the Performance Award is denominated in cash rather
than shares of Common Stock, the maximum individual cash award paid in respect
of any Performance Cycle shall be five million dollars ($5,000,000).
 
ARTICLE 8
 
 
STOCK OPTIONS
 
8.1  
In General

 
Awards may be granted in the form of Stock Options.  These Stock Options may be
Incentive Stock Options or non-qualified stock options (i.e., Stock Options
which are not Incentive Stock Options) (“Non-Qualified Stock Options”), or a
combination of both.
 
8.2  
Terms and Conditions of Stock Options

 
(a) In General.  A Stock Option shall be exercisable in accordance with such
terms and conditions and at such times and during such periods as may be
determined by the Committee in its sole discretion and as set forth in an
individual Award Notice; provided, however, no Stock Option shall be exercisable
after the expiration of 7 years from the Effective Date of the Stock
Option.  The price at which Common Stock may be purchased upon exercise of a
Stock Option shall be not less than 100% of the Fair Market Value of the Common
Stock on the Effective Date of the Stock Option’s grant except for grants of
Substitute Awards.  Moreover, all Stock Options shall have a vesting schedule
not less than one year from the date of grant, except under certain
circumstances contemplated by Section 12.2 or Article 15.

 
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(b) Other than pursuant to Section 6.2 or as a result of a grant of a Substitute
Award, the Committee shall not be permitted to (i) lower the option price per
share of a Stock Option after it is granted, (ii) cancel a Stock Option when the
option price per share exceeds the Fair Market Value of the underlying shares in
exchange for another Award, or (iii) take any other action with respect to a
Stock Option that may be treated as a repricing under the rules and regulations
of the New York Stock Exchange, without shareholder approval.
 
8.3  
Restrictions Relating to Incentive Stock Options

 
Stock Options issued in the form of Incentive Stock Options shall, in addition
to being subject to the terms and conditions of Section 8.2, comply with Section
422 of the Code.  Accordingly, the aggregate Fair Market Value (determined at
the time the Incentive Stock Option was granted) of the Common Stock with
respect to which Incentive Stock Options are exercisable for the first time by a
Participant during any calendar year (under this Plan or any other plan of the
Company) shall not exceed one hundred thousand dollars ($100,000) (or such other
limit as may be required by the Code).
 
8.4  
Additional Terms and Conditions

 
The Committee may, by way of the Award Notice or otherwise, establish such other
terms, conditions, restrictions and/or limitations, if any, of any Stock Option
Award, provided that they are not inconsistent with the Plan.
 
8.5  
Exercise

 
Upon exercise, the option price of a Stock Option may, at the Committee’s
discretion, be paid in cash (or equivalents), or by tendering, by either actual
delivery of shares or by attestation, shares of Common Stock, a combination of
the foregoing, or such other consideration as the Committee may deem
appropriate.  Any shares of Common Stock tendered by a Participant upon exercise
of a Stock Option must, if acquired by the Participant pursuant to a previous
Stock Option exercise, be owned by the Participant for at least six months prior
to the date of exercise of the Stock Option.  The Committee shall establish
appropriate methods for accepting Common Stock, whether restricted or
unrestricted, and may impose such conditions as it deems appropriate on the use
of such Common Stock to exercise a Stock Option.
 
8.6  
Maximum Award Payable

 
Notwithstanding any provision contained in the Plan to the contrary, the maximum
number of shares for which Stock Options may be granted under the Plan to any
one Participant in any thirty-six (36) month period is two million (2,000,000)
shares of Common Stock.
 
ARTICLE 9
 
 
STOCK APPRECIATION RIGHTS
 
9.1  
In General

 
Awards may be granted in the form of SARs.  SARs entitle the Participant to
receive a payment equal to the appreciation in a stated number of shares of
Common Stock from the exercise price to the Fair Market Value of the Common
Stock on the date of exercise.  An SAR may be granted in tandem with all or a
portion of a related Stock Option under the Plan (“Tandem SARs”), or may be
granted separately (“Freestanding SARs").  A Tandem SAR may be granted either at
the time of the grant of the related Stock Option or at any time thereafter

 
13

 

during the term of the Stock Option.
 
9.2  
Terms and Conditions of SARs

 
(a) Tandem SARs.  A Tandem SAR shall be exercisable to the extent, and only to
the extent, that the related Stock Option is exercisable, and the “exercise
price” of such an SAR (the base from which the value of the SAR is measured at
its exercise) shall be the option price under the related Stock Option.  If a
Tandem SAR is added to an outstanding option, the exercise price shall be the
same as the earlier granted option which may be less than 100% of the Fair
Market Value on the date the SAR is granted. If a related Stock Option is
exercised as to some or all of the shares covered by the Award, the related
Tandem SAR, if any, shall be canceled automatically to the extent of the number
of shares covered by the Stock Option exercise.  Upon exercise of a Tandem SAR
as to some or all of the shares covered by the Award, the related Stock Option
shall be canceled automatically to the extent of the number of shares covered by
such exercise.  Moreover, all Tandem SARs shall expire not later than the
earlier of (1) seven years from the Effective Date of the SAR’s grant or (2) the
expiration of the related Stock Option.
(b) Freestanding SARs.  Freestanding SARs shall be exercisable in accordance
with such terms and conditions and at such times and during such periods as may
be determined by the Committee.  The exercise price of a Freestanding SAR shall
be not less than 100% of the Fair Market Value of the Common Stock, as
determined by the Committee, on the Effective Date of the Freestanding SAR’s
grant.  Moreover, all Freestanding SARs shall expire not later than seven years
from the Effective Date of theFreestanding SAR’s grant and generally have the
same terms and conditions as Stock Options.
 
(c) Other than pursuant to Section 6.2 or as a result of a grant of a Substitute
Award, the Committee shall not be permitted to (i) lower the exercise price of
an SAR after it is granted, (ii) cancel an SAR when the exercise price exceeds
the Fair Market Value of the underlying shares of Common Stock in exchange for
another Award or (iii) take any other action with respect to an SAR that may be
treated as a repricing under the rules and regulations of the New York Stock
Exchange, in each case without shareholder approval.
 
9.3  
Intentionally Omitted

 

9.4  
Additional Terms and Conditions

 
The Committee may, by way of the Award Notice or otherwise, determine such other
terms, conditions, restrictions and/or limitations, if any, of any SAR Award,
provided that they are not inconsistent with the Plan.
 
9.5  
Maximum Award Payable

 
Notwithstanding any provision contained in the Plan to the contrary, the maximum
number of shares for which SARs may be granted under the Plan to any one
Participant for a thirty-six (36) month period is two million (2,000,000) shares
of Common Stock.
 
9.6  
Payments of SARS

 
In the event that the SAR is paid in cash, the corresponding cash (or
equivalents) thereof shall be paid as of the date that the SAR is exercised.
 
 
ARTICLE 10
 
 
RESTRICTED STOCK AWARDS

10.1  
Grants

 
Awards under this Article 10 may be granted to Participants, either alone or in
addition to other Awards granted under the Plan as Restricted Stock Awards or
Restricted Stock Unit Awards.  Awards may be granted in the form of (i)
freestanding grants that vest based on the passage of time, or (ii) grants in
payment of earned Performance Awards or other incentive compensation under
another plan maintained by the Company.
 
10.2  
Award Restrictions

 
Restricted Stock Awards or Restricted Stock Unit Awards shall be subject to such
terms, conditions, restrictions, and/or limitations, if any, as the Committee
deems appropriate including, but not by way of limitation, restrictions on
transferability and continued employment; provided, however, they are not
inconsistent with the Plan.  The Committee may modify or accelerate the delivery
of a Restricted Stock Award or Restricted Stock Unit Award under such
circumstances as it deems would be in the best interest of the Company;
provided, however, such action would not cause a violation of Section 409A.
 
10.3  
Vesting Period for Awards to Employees

 
Except as provided in Section 12.2 or Article 15, the period to achieve full
vesting for Restricted Stock Awards and Restricted Stock Unit Awards granted to
Employees in the form of freestanding grants shall not be shorter than three
years.
Vesting under the Plan can be on a pro rata or graded basis over the period or
cliff at the end of the period; provided, however, that grants made to new hires
to replace forfeited awards from a prior employer and grants in payment of
earned Performance Awards (or other incentive compensation) are not subject to
the minimum vesting period.
 
10.4  
Evidence of Award

 
Any Restricted Stock Award or Restricted Stock Unit Award granted under the Plan
may be evidenced in such manner as the Committee deems appropriate, including,
without limitation, book-entry registration or issuance of a stock certificate
or certificates.
 
ARTICLE 11 
 
 
OTHER STOCK-BASED AWARDS
 
11.1  
Grants

 
Awards under this Article 11 may be granted to Participants, either alone or in
addition to the Awards granted under the Plan, in the form of Other Stock-Based
Awards.  Awards may be granted either as freestanding grants or payments of
earned Performance Awards or other incentive compensation under another plan
maintained by the Company.
 
11.2  
Conditions and Terms of Other Stock-Based Grants

 
The Committee may by way of the Award Notice or otherwise, determine such other
terms, conditions, restrictions and/or limitations, if any, of any Other
Stock-Based Award, provided that they are not inconsistent with the Plan.  Other
Stock-Based Awards in the

 
14

 

form of deferred stock units shall not be subject to a minimum vesting period.
 
ARTICLE 12 
 
 
PAYMENT OF AWARDS
 
12.1  
In General

 
Absent a Plan provision to the contrary, payment of Awards may, at the
discretion of the Committee, be made in cash (or equivalents), Common Stock, or
a combination of cash and Common Stock.  In addition, payment of Awards may
include such terms, conditions, restrictions and/or limitations, if any, as the
Committee deems appropriate, including, in the case of Awards paid in the form
of Common Stock, restrictions on transfer and forfeiture provisions; provided,
however, such terms, conditions, restrictions and/or limitations are not
inconsistent with the Plan.  Further, payment of Awards may be made in the form
of a lump sum or installments, as determined by the Committee, in accordance
with the requirements of Section 409A, to the extent applicable.
 
12.2  
Termination of Employment

 
Subject to the requirements of Section 409A, the Committee shall determine the
treatment of a Participant’s Award under the Plan in the event of the
Participant’s termination of employment, either in an individual Award Notice or
at the time of termination.

 
15

 
 
 
12.3  
Inimical Conduct

If a Participant performs any act or engages in any activity which the CEO, in
the case of an Employee or former Employee, or the Committee, in the case of the
CEO, a Director, or a former Director, determines is inimical to the best
interests of the Company, the Participant shall, effective as of the date the
Participant engages in such conduct, forfeit all unexercised, unearned and/or
unpaid Awards, including, but not by way of limitation, Awards earned but not
yet paid, all unpaid dividends and dividend equivalents, and all interest, if
any, accrued on the foregoing.
 
12.4  
Breach of Employee’s Agreement

 
(a) In General.  A Participant who engages in conduct described in Section
12.4(c) below shall immediately: (1) forfeit, effective as of the date the
Participant engages in such conduct, all unexercised, unearned, and/or unpaid
Awards, including, but not by way of limitation, Awards earned but not yet paid,
all unpaid dividends and dividend equivalents, and all interest, if any, accrued
on the foregoing; and (2) pay to the Company the amount of any gain realized or
payment received as a result of any Stock Option or SAR exercised by the
Participant under the Plan within the two year period immediately preceding the
date the Participant engages in such conduct.
 
(b) Set-Off.  By accepting an Award under this Plan, a Participant consents to a
deduction from any amounts the Company owes the Participant from time to time
(including, but not limited to, amounts owed to the Participant as wages or
other compensation, fringe benefits, or vacation pay), to the extent of the
amounts the Participant owes the Company under Section 12.4(a).  If the Company
elects to make an off-set in whole or in part, the Company will not off-set
amounts owed by a Participant tothe Company against amounts subject to Section
409A that are payable by the Company until the time that payment would have been
made, except as permitted by Section 409A.  Whether or not the Company elects to
make any set-off in whole or in part, if the Company does not recover by means
of set-off the full amount the Participant owes the Company, the Participant
shall immediately pay the unpaid balance to the Company.
 
(c) Conduct.  The following conduct shall result in the consequences described
in Section 12.4(a):
(i) Kodak.  In the case of a Participant who has signed a Kodak company
employee’s agreement that has restrictive covenants similar to those in Section
(iii) below (an “Eastman Kodak Company Employee’s Agreement”), the Participant’s
breach of the Eastman Kodak Company Employee’s Agreement.
 
(ii) Subsidiary.  In the case of a Participant who is employed by a Subsidiary
and has signed a written agreement with the Subsidiary that contains restrictive
covenants similar to those in the Eastman Kodak Company Employee’s Agreement,
the Participant’s breach of such written agreement.
 
(iii) Other Participants.  In the case of a Participant other than a Participant
described in Subsection 12(c)(i) or (ii) above, the Participant without the
prior written consent of Kodak, in the case of an Employee or former Employee,
or the Committee, in the case of a Director or former Director: (A) engages
directly or indirectly in any manner or capacity as principal, agent, partner,
officer, director, stockholder, employee, or otherwise, in any business or
activity competitive with the business conducted by Kodak or any Subsidiary;
or  (B) at any time divulges to any person or any entity other than the Company
any trade secrets, methods, processes or the proprietary or confidential
information of the Company.  For purposes of this Section 12.4(c)(iii), a
Participant shall not be deemed a stockholder if the Participant’s record and
beneficial ownership amount to not more than 1% of the outstanding capital stock
of any company subject to the periodic and other reporting requirements of the
Exchange Act.
 
 
16

 
 
ARTICLE 13
 
 
DIVIDEND AND DIVIDEND EQUIVALENT
 
The Committee may choose, at the time of the grant of an Award or any time
thereafter up to the time of the Award’s payment, to include as part of such
Award an entitlement to receive cash dividends or dividend equivalents, subject
to such terms, conditions, restrictions and/or limitations, if any, as the
Committee may establish.  Dividends and dividend equivalents shall be paid in
such form and manner (i.e., lump sum or installments), and at such time(s) as
the Committee shall determine in accordance with Section 409A, to the extent
applicable.  All dividends or dividend equivalents, which are not paid
currently, may, at the Committee’s discretion, accrue interest or be reinvested
into additional shares of Common Stock subject to the same vesting or
performance conditions as the underlying Award.

                                                                                
ARTICLE 14
 
 
                                                                    DEFERRAL OF
AWARDS
 
At the discretion of the Committee, payment of any Award, dividend, or dividend
equivalent, or any portion thereof, may be deferred by a Participant until such
time as the Committee may establish in accordance with Section 409A and other
applicable federal income tax requirements.  All such deferrals shall be
accomplished by the delivery of a written, irrevocable election by the
Participant prior to the time established by the Committee for such purpose, on
a form provided by the Company.  Further, all deferrals shall be made in
accordance with administrative guidelines established by the Committee to ensure
that such deferrals comply with Section 409A and all other applicable
requirements of the Code.  Deferred payments shall be paid in a lump sum or
installments, as determined by the Committee in accordance with the requirements
of Section 409A.  Deferred Awards may also be credited with interest, at such
rates to be determined by the Committee, and, with respect to those deferred
Awards denominated in the form of Common Stock, with dividends or dividend
equivalents.
 
 
17

 
 
ARTICLE 15 
 
 
CHANGE IN CONTROL
 
15.1  
Treatment of Non-Continued Awards

 
Notwithstanding any provision contained in the Plan, including, but not limited
to, Section 4.4, the provisions of this Article 15 shall control over any
contrary provision.  Except as otherwise set forth in Section 15.6, upon a
Change in Control: (i) the terms of this Article 15 shall immediately become
opertive, without further action or consent by any person or entity unless
otherwise expressly set forth in an Award Notice, (ii) all terms, conditions,
restrictions, and limitations in effect on any unexercised, unearned, unpaid,
and/or deferred Award in each case, other than Performance Awards, or any other
outstanding Award, shall immediately lapse as of the date of such event;
(iii) no other terms, conditions, restrictions and/or limitations shall be
imposed upon any Awards on or after such date, and in no circumstance shall an
Award be forfeited on or after such date; and (iv) except in those instances
where a prorated Award is required to be paid under this Article 15, all
unexercised, unvested, unearned, and/or unpaid Awards or any other outstanding
Awards shall automatically become one hundred percent (100%) vested
immediately.  Notwithstanding the foregoing, the treatment described in this
Section 15.1 shall not apply to any Award to the extent that such treatment
would violate Section 409A unless the Change in Control event also qualifies as
a Section 409A Change in Control, in which event the treatment described in this
Section 15.1 shall further apply to such Award to the extent such treatment
would not violate Section 409A.

 
18

 

 
15.2  
Dividends and Dividend Equivalents

 
Except as otherwise set forth in Section 15.6, upon a Change in Control, all
unpaid dividends and dividend equivalents and all interest accrued thereon, if
any, shall be treated and paid under this Article 15 in the identical manner and
time as the Award under which such dividends or dividend equivalents have been
credited.  For example, if upon a Change in Control, an Award under this Article
15 is to be paid in a prorated fashion, all unpaid dividends and dividend
equivalents with respect to such Award shall be paid according to the same
formula used to determine the amount of such prorated Award.  Notwithstanding
the foregoing, if such dividends or dividend equivalents are subject to Section
409A and the treatment described by this Section 15.2 would violate Section
409A, then the treatment described in this Section 15.2 shall not apply to the
extent such treatment would violate Section 409A unless the Change in Control
event also qualifies as a Section 409A Change in Control, in which event the
treatment described in this Section 15.2 shall further apply to such dividends
and dividend equivalents to the extent such treatment would not violate Section
409A.  Any payment of unpaid dividends and dividend equivalents pursuant to this
Section 15.2 shall be made as soon as practicable following the Change in
Control event, but in no event later than ninety (90) days thereafter.
 
15.3  
Valuation and Payment of Awards; Treatment of Performance Awards

 
Except as otherwise set forth in Section 15.6, upon a Change in Control, any
Participant, whether or not he or she is still employed by the Company, shall be
paid, in a single lump-sum cash payment, as soon as practicable but in no event
later than ninety (90) days after the Change in Control, in exchange for all of
his or her Freestanding SARs, Stock Options (including Incentive Stock Options),
Other Stock-Based Awards, Restricted Stock Awards and Restricted Stock Unit
Awards, and all other outstanding Awards (including those granted by the
Committee pursuant to its authority under Subsection 4.2(o) hereof), other than
Performance Awards, a cash payment (or the delivery of shares of stock, other
securities or a combination of cash, stock and securities equivalent to such
cash payment) equal to the difference, if any, between the Change in Control
Price and the purchase price per share, if any, under the Award multiplied by
the
number of shares of Common Stock subject to such Award; provided that if such
product is zero or less, the Awards will be cancelled and terminated without
payment therefor.  For Performance Awards, regardless of Section 15.6, (A) if at
the time of the Change in Control more than fifty percent (50%) of the
applicable Performance Cycle has elapsed, the Performance Award granted to the
Participant shall vest and Awards shall be paid out as soon as practicable, but
in no event later than ninety (90) days after the Change in Control event, in an
amount equal to the greater of (i) the target performance set out in the
Performance Formula or (ii) actual performance to date, and (B) if at the time
of the Change in Control fifty percent (50%) or less of the applicable
Performance Cycle has elapsed, the Performance Award granted to the Participant
shall vest and Awards shall be paid out as soon as practicable, but in no event
later than ninety (90) days after the Change in Control event, in an amount
equal to fifty percent (50%) of target performance set out in the Performance
Formula without consideration of actual performance to date.  Notwithstanding
the foregoing, if the Award is subject to Section 409A and the treatment
described by this Section 15.3 would violate Section 409A, then the treatment
described in this Section 15.3 shall not apply to the extent such treatment
would violate Section 409A unless the Change in Control event also qualifies as
a Section 409A Change in Control, in which event the treatment described in this
Section 15.3 shall further apply to such Award to the extent such treatment
would not violate Section 409A.
 
15.4  
Deferred Awards

 
Upon a Change in Control, all Awards deferred by a Participant under Article 14
hereof, but for which he or she has not received payment as of such date, shall
be paid in a single lump-sum cash payment as soon as practicable, but in no
event later than ninety (90) days after the Change in Control.  For purposes of
making such payment, the value of all Awards that are equity-based shall be
determined by the Change in Control Price.  Notwithstanding the foregoing, if
the Award is subject to Section 409A and the treatment described by this Section
15.4 would violate Section 409A, then the treatment described in this
Section 15.4 shall not apply to the extent such treatment would violate
Section 409A unless the Change in Control event also qualifies as a Section 409A
Change in Control, in which event the treatment described in this Section 15.4
shall further apply to such Award to the extent such treatment would not violate
Section 409A.

 
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15.5  
Miscellaneous

 
Upon a Change in Control, the provisions of Sections 12.2, 12.3, 12.4 and 16.3
hereof shall become null and void and of no further force and effect and no
action, including, but not by way of limitation, the amendment, suspension or
termination of the Plan, shall be taken which would affect the rights of any
Participant or the operation of the Plan with respect to any Award to which the
Participant may have become entitled hereunder on or prior to the date of such
action or as a result of such Change in Control.
 
15.6  
Continuation of Awards

 
Unless otherwise determined by the Committee, upon a Change in Control pursuant
to which the Surviving Company or Parent Company, as applicable, assumes (or
substitutes) all outstanding Awards (other than Performance Awards) pursuant to
the terms hereof, then the provisions of Sections 15.1 through 15.3 shall not
apply to any Award; provided, however, that if the Award is subject to Section
409A and the treatment described by this Section 15.6 would violate Section
409A, then the treatment described in this Section 15.6 shall not apply to the
extent such treatment would violate Section 409A.  The Committee shall determine
in its sole discretion whether an Award shall be considered “assumed” or
“substituted.”  Without limiting the foregoing, for the purposes of this
Article, a Stock Option or SAR shall be considered “assumed” or “substituted” if
in the reasonable determination of the Committee, (i) the aggregate intrinsic
value (the difference between the then Fair Market Value and the exercise price
per share of Common Stock multiplied by the number of shares of Common Stock
subject to such award) of the assumed (or substituted) Award immediately after
the Change in Control is substantially the same as the aggregate intrinsic value
of such Award immediately before such transaction, (ii) the ratio of the
exercise price per assumed (or substituted) Award to the fair market value per
share of successor corporation stock immediately after the Change in Control is
substantially the same as such ratio for such Award immediately before such
transaction, (iii) the Award is exercisable for the consideration approved by
the Committee (including shares of stock, other securities or property or a
combination of cash, stock, securities and other property), and (iv) the other
terms and conditions of the Stock Options or SARs remain substantially the
same.  For the purposes of this Article, Restricted Stock Awards and Restricted
Stock Unit Awards shall be considered an assumed (or substituted) Award if in
the reasonable determination of the Committee, the value and terms and
conditions of the assumed (or substituted) Award immediately after the Change in
Control are substantially the same as the value and terms and conditions of such
Award immediately before such transaction.
 
15.7  
Termination of Employment Following A Change in Control

 
(a) Eligibility.  Notwithstanding any provision contained in the Plan,
including, but not limited to, Sections 4.4, and 12.2, the provisions of this
Section 15.7 shall control over any contrary provision.  All Participants shall
be eligible for the treatment afforded by this Section 15.7 if their employment
by the Company terminates within  two years following a Change in Control,
unless the termination is due to (i) death, (ii) Disability, (iii) one of the
following reasons (A) the willful and continued failure by the Participant to
substantially perform his or her duties with his or her employer after a written
warning identifying the lack of substantial performance is delivered to the
Participant by his or her employer to specifically identify the manner in which
the employer believes that Participant has not substantially performed his or
her duties, or (B) the willful engaging by the Participant in illegal conduct
which is materially and demonstrably injurious to Kodak or a Subsidiary, (iv)
resignation other than (A) a resignation from a declined reassignment to a job
that is not reasonably equivalent in responsibility or compensation (as would be
determined under Kodak’s Termination Allowance Plan), or that is not in the same
geographic area (as would be determined under Kodak’s Termination Allowance
Plan), or (B) a resignation within 30 days following a reduction in base pay, or
(v) Retirement.
(b) If a Participant is eligible for treatment under this Section 15.7, (i) all
of the terms, conditions, restrictions, and limitations in effect on any of his
or her unexercised, unearned, unpaid and/or deferred Awards shall immediately
lapse as of the date of his or her termination of employment; (ii) no other
terms, conditions, restrictions and/or limitations shall be imposed upon any of
his or her Awards on or after such date, and in no event shall any of his or her
Awards be forfeited on or after such date; and (iii) except in those instances
where a prorated Award is required to be paid under this Article 15, all of his
or her unexercised, unvested, unearned and/or unpaid Awards shall automatically
become one hundred percent (100%) vested immediately upon his or her termination
of employment; provided, however, the treatment described in this Section 15.7
shall not apply to any Award subject to Section 409A to the extent such
treatment would violate Section 409A unless (A) the Change in Control event also
qualifies as a Section 409A Change in Control, and (B) the termination of
employment qualifies as a “separation from service” for purposes of Section
409A, in which event the treatment described in this Section 15.7 shall further
apply to such Award to the extent such treatment would not violate Section
409A.  Payment of Awards shall be made as soon as practicable following the
Participant’s termination of employment, but in no event later than ninety (90)
days thereafter, unless the Participant at the time of his or her termination of
employment is subject to the six-month waiting period following separation from
service that Kodak requires for certain executive employees as a result of
Section 409A, in which event payment instead will be made as soon as practicable
after the expiration of such period, but in no event later than ninety (90) days
thereafter.
 
(c) If a Participant is eligible for treatment under this Section 15.7, all of
his or her unpaid dividends and dividend equivalents and all interest accrued
thereon, if any, shall be treated and paid under this Article 15 in the
identical manner and time as the Award under which such dividends or dividend
equivalents have been credited.  Notwithstanding the foregoing, if such
dividends or dividend equivalents are subject toSection 409A and the treatment
described by this Section 15.7(c) would violate Section 409A, then the treatment
described in this Section 15.7(c) shall not apply to the extent such treatment
would violate Section 409A unless (A) the Change in Control event also qualifies
as a Section 409A Change in Control, and (B) the termination of employment
qualifies as a “separation from service” for purposes of Section 409A, in which
event the treatment described in this Section 15.7(c) shall further apply to
such dividends and dividend equivalents to the extent such treatment would not
violate Section 409A.  Any payment of unpaid dividends and dividend equivalents
pursuant to this Section 15.7(c) shall be made as soon as practicable following
the Participant’s termination of employment, but in no event later than ninety
(90) days thereafter, unless the Participant at the time of his or her
termination of employment is subject to the six-month waiting period following
separation from service that Kodak requires for certain executive employees as a
result of Section 409A, in which event payment instead will be made as soon as
practicable after the expiration of such period, but in no event later than
ninety (90) days thereafter.
 
15.8  
Legal Fees

 
Kodak shall pay all reasonable legal fees and related expenses incurred by a
Participant in seeking to obtain or enforce any payment, benefit or right he or
she reasonably may be entitled to under the Plan in connection with a Change in
Control; provided, however, the Participant shall be required to repay any such
amounts to Kodak to the extent a court of competent jurisdiction issues a final
and non-appealable order setting forth the determination that the position taken
by the Participant was frivolous or advanced in bad faith.  Any reimbursement by
Kodak under this section shall be made in accordance with Eastman Kodak
Company’s Policy Regarding Section 409A Compliance.
 
ARTICLE 16 
 
 
MISCELLANEOUS
 
16.1  
Nonassignability

 
(a) In General.  Except as otherwise determined by the Committee or as otherwise
provided in Subsection (b) below, no Awards or any other payment under the Plan
shall be subject to any manner to alienation, anticipation, sale, transfer
(except by will, the laws of descent and distribution, or domestic relations
order), assignment, pledge, or encumbrance, nor shall any Award be payable to or
exercisable by anyone other than the Participant to whom it was granted.
 
(b) Non-Qualified Stock Options.  The Committee shall have the discretionary
authority to grant Awards of Non-Qualified Stock Options or amend outstanding
Awards of Non-Qualified Stock Options to provide that they be transferable,
subject to such terms and conditions as the Committee shall establish.  In
addition to any such terms and conditions, the following terms and conditions
shall apply to all transfers of Non-Qualified Stock Options:
 
(i) Permissible Transferors.  The only Participants permitted to transfer their
Non-Qualified Stock Options are those Participants who are, on the date of the
transfer of their Non-Qualified Stock Option, either in wage grade 56 or above,
or the equivalent thereof, a corporate officer of Kodak, or a Director.

 
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(ii) Permissible Transferees.  Transfers shall only be permitted to: (i) the
Participant’s “Immediate Family Members,” as that term is defined in Subsection
(b)(9) below; (ii) a trust or trusts for the exclusive benefit of such Immediate
Family Members; or (iii) a family partnership or family limited partnership in
which each partner is, at the time of transfer and all times subsequent thereto,
either an Immediate Family Member or a trust for the exclusive benefit of one or
more Immediate Family Members.
(iii) No Consideration.  All transfers shall be made for no consideration.
 
(iv) Subsequent Transfers.  Once a Participant transfers a Non-Qualified Stock
Option, any subsequent transfer of such transferred option shall,
notwithstanding Section 16.1(b)(i) to the contrary, be permitted provided,
however, such subsequent transfer complies with all of the terms and conditions
of this Section 16.1(b), with the exception of Section 16.1(b)(i).
 
(v) Transfer Agent.  In order for a transfer to be effective, the Committee’s
designated transfer agent must be used to effectuate the transfer.  The costs of
such transfer agent shall be borne solely by the transferor.
 
(vi) Withholding.  In order for a transfer to be effective, a Participant must
agree in writing prior to the transfer on a form provided by Kodak to pay any
and all payroll and withholding taxes due upon exercise of the transferred
option.  In addition, prior to the exercise of a transferred option by a
transferee, arrangements must be made by the Participant with Kodak for the
payment of all payroll and withholding taxes.
 
(vii) Terms and Conditions of Transferred Option.  Upon transfer, a
Non-Qualified Stock Option continues to be governed by and subject to the terms
and conditions of the Plan and the Stock Option’s applicable administrative
guide and Award Notice.  A transferee of a Non-Qualified Stock Option is
entitled to the same rights as the Participant to whom such Non-Qualified Stock
Options were awarded, as if no transfer had taken place.  Accordingly, the
rights of the transferee are subject to the terms and conditions of the original
grant to the Participant, including provisions relating to expiration date,
exercisability, option price and forfeiture.
 
(viii) Notice to Transferees.  Kodak shall be under no obligation to provide a
transferee with any notice regarding the transferred options held by the
transferee upon forfeiture or any other circumstance.
 
(ix) Immediate Family Member.  For purposes of this Section 16.1, the term
“Immediate Family Member” shall mean the Participant and his or her spouse,
children or grandchildren, whether natural, step or adopted children or
grandchildren.
 
 
16.2  
Withholding Taxes

 
In connection with any payments to a Participant or other event under the Plan
that gives rise to a federal, state, local or other tax withholding obligation
relating to the Plan (including, without limitation, FICA tax), the Company
shall be entitled to deduct from any payment under the Plan, regardless of the
form of such payment, the amount of all applicable income and employment taxes
required by law to be withheld (or cause to be withheld) with respect to such
payment or may require the Participant to
pay to the Company such tax prior to and as a condition of the making of such
payment.  In accordance with any applicable administrative guidelines it
establishes, the Committee may allow a Participant to pay the amount of taxes
required to be withheld from an Award by withholding from any payment of Common
Stock due as a result of such Award at minimum statutory tax rates, or by
permitting the Participant to tender (actually or through attestation) to the
Company, shares of Common Stock having a Fair Market Value, as determined by the
Committee, equal to the amount of such required withholding taxes up to the
maximum marginal tax rate.
 
16.3  
Amendments to Awards

 
The Committee may at any time unilaterally amend any unexercised, unearned or
unpaid Award, including, but not by way of limitation, Awards earned but not yet
paid, to the extent it deems appropriate; provided, however, that (a) any such
amendment which, in the opinion of the Committee, materially impairs the rights
or materially increases the obligation of a Participant under an outstanding
Award shall be made only with the consent of the Participant (or, upon the
Participant’s death, the person having the right to exercise the Award), except
that amendments to implement administrative changes to the Plan that are deemed
necessary or advisable by the Committee for compliance with laws shall not
require Participant consent, and (b) no such amendment shall cause a violation
of Section 409A.  By means of illustration but not limitation, the Committee may
restrict the method of exercise of an Award to avoid securities laws or exchange
control filings, laws or regulations.

 
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16.4  
Regulatory Approvals and Listings

          Notwithstanding anything contained in this Plan to the contrary, the
Company shall have no obligation to issue or deliver certificates of Common
Stock evidencing any Award resulting in the payment of Common Stock prior to (a)
the obtaining of any approval from any governmental agency which the Company
shall, in its sole discretion, determine to be necessary or advisable, (b) the
admission of such shares to listing on the stock exchange on which the Common
Stock may be listed, and (c) the completion of any registration or other
qualification of said shares under any state or federal law or ruling of any
governmental body which the Company shall, in its sole discretion, determine to
be necessary or advisable.
 
16.5  
No Right to Continued Employment or Grants

 
Participation in the Plan shall not give any Employee any right to remain in the
employ of Kodak or any Subsidiary.  Kodak or, in the case of employment with a
Subsidiary, the Subsidiary, reserves the right to terminate any Employee at any
time for any or no reason.  Further, the adoption of this Plan shall not be
deemed to give any Employee or any other individual any right to be selected as
a Participant or to be granted an Award.  In addition, no Employee having been
selected for an Award, shall have at any time the right to receive any
additional Awards.
 
16.6  
Amendment/Termination

 
The Committee may suspend or terminate the Plan at any time for any reason with
or without prior notice.  In addition, the Committee may, from time to time for
any reason and with or without prior notice, amend the Plan in any manner, but
may not (a) without shareholder approval adopt any amendment which would require
the vote of the shareholders of Kodak required under the New York Stock
Exchange’s shareholder approval rules, or (b) adopt any amendment to the Plan
which would cause any Award outstanding under the Plan at the time of the
amendment to violate Section 409A.
 
16.7  
Governing Law

 
The Plan shall be governed by and construed in accordance with the laws of the
State of New York, except as superseded by applicable federal law, without
giving effect to its conflicts of law provisions.
 
16.8  
No Right, Title or Interest in Company Assets; No Rights as a Shareholder

 
No Participant shall have any rights as a shareholder, including the right to
vote, as a result of participation in the Plan until the date of issuance of a
stock certificate in his or her name or such other evidence of ownership as may
be determined by the Committee and, in the case of Restricted Stock Awards such
rights as are granted to the Participant under the Plan.  To the extent any
person acquires a right to receive payments from the Company under the Plan,
such rights shall be no greater than the rights of an unsecured creditor of the
Company and the Participant shall not have any rights in or against any specific
assets of the Company.  All of the Awards granted under the Plan shall be
unfunded.
 
16.9  
Section 16 of the Exchange Act

 
In order to avoid any Exchange Act violations, the Committee may, from time to
time, impose additional restrictions upon an Award, including but not limited
to, restrictions regarding tax withholdings.

 
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16.10  
No Guarantee of Tax Consequences

          No person connected with the Plan in any capacity, including, but not
limited to, Kodak and its Subsidiaries and their directors, officers, agents and
employees makes any representation, commitment, or guarantee that any tax
treatment, including, but not limited to, federal, state and local income,
estate and gift tax treatment, will be applicable with respect to amounts
deferred under the Plan, or paid to or for the benefit of a Participant under
the Plan, or that such tax treatment will apply to or be available to a
Participant on account of participation in the Plan.
 
16.11  
Other Benefits

 
No Award granted under the Plan shall be considered compensation for purposes of
computing benefits under any retirement plan of the Company nor affect any
benefits or compensation under any other benefit or compensation plan of the
Company now or subsequently in effect.
 
16.12  
Section Headings

 
The section headings contained herein are for the purpose of convenience only
and are not intended to define or limit the contents of the sections.
 
16.13  
Severability; Entire Agreement

 
If any of the provisions of this Plan or any Award Notice is finally held to be
invalid, illegal or unenforceable (whether in whole or in part), such provision
shall be deemed modified to the extent, but only to the extent, of such
invalidity, illegality or unenforceability and the remaining provisions shall
not be affected thereby; provided, that if any of such provisions is finally
held to be invalid, illegal, or unenforceable because it exceeds the maximum
scope determined to be acceptable to permit such provision to be enforceable,
such provision shall be deemed to be modified to the minimum extent necessary to
modify such scope in order to make such provision enforceable hereunder.  The
Plan, any administrative guidelines or sub-plans issued pursuant to Section
4.2(i), and any Award Notices contain the entire agreement of the parties with
respect to the subject matter thereof and supersede all prior agreements,
promises, covenants, arrangements, communications, representations and
warranties between them, whether written or oral with respect to the subject
matter thereof.
 
16.14  
No Third Party Beneficiaries

 
Except as expressly provided therein, neither the Plan nor any Award Notice
shall confer on any person other than the Company and the grantee of any Award
any rights or remedies thereunder.
 
16.15  
Successors and Assigns

 
The terms of this Plan shall be binding upon and inure to the benefit of the
Company and its successors and assigns.
 
16.16  
Waiver of Claims

 
Each Participant recognizes and agrees that prior to being selected by the
Committee to receive an Award he or she has no right to any benefits
hereunder.  Accordingly, in consideration of the Participant’s receipt of any
Award hereunder, he or she expressly waives any right to contest the amount of
any Award, the terms of any Award Notice, any determination, action or omission
hereunder or under any Award Notice by the Committee, the Company or the Board,
or any amendment to the Plan or any Award Notice (other than an amendment to
this Plan or an Award Agreement to which his or her consent is expressly
required by the express terms of the Plan or an Award Notice).

 
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16.17  
Section 409A

 
The Plan and the Awards granted thereunder are intended to be exempt from or
comply with the requirements of Section 409A, and the Plan, and Award Notices
and administrative guides issued thereunder, shall be administered and
interpreted consistent with such intention.  In addition, the Plan, Award
Notices and administrative guidelines will be interpreted and administered in
accordance with Eastman Kodak Company’s Policy Regarding Section 409A Compliance
with respect to benefits subject to Section 409A.

 
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APPENDIX A
 
 
EASTMAN KODAK COMPANY 2005 OMNIBUS LONG TERM COMPENSATION PLAN
 
(a) Introduction.  The terms of this Appendix A apply to all Awards, other than
Stock Options or SARs, that are intended by the Committee to satisfy the
requirements for deductibility as “performance-based compensation” under Section
162(m)(4)(C) of the Code.
 
(b) Definitions
The capitalized terms used in this Appendix shall have the same meaning as set
forth in the Plan, unless otherwise defined below.
(i) Committee
“Committee” means the Executive Compensation and Development Committee of the
Board, or such other Board committee as may be designated by the Board to
administer the Plan; provided that the Committee shall consist of at least two
directors, each of whom is an “outside director” within the meaning of Section
162(m) of the Code and the applicable regulations thereunder.
 
(ii) Performance Criteria
“Performance Criteria,” shall mean any of the following for the Company on a
consolidated basis and/or for any subsidiary, division, business unit or one or
more business segments: return on net assets (“RONA”), return on shareholders’
equity, return on assets, return on capital, shareholder returns, total
shareholder return, return on invested capital, profit margin, earnings per
share, net earnings, operating earnings, Common Stock price per share, sales or
market share, unit manufacturing cost, working capital, productivity, days sales
in inventory, days sales outstanding, revenue, revenue growth, cash flow and
investable cash flow.

 
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(c) Awards
(i) Eligible Employees.  All Employees are eligible to be selected for a
Performance Award during a Performance Cycle.
(ii) Performance Cycle.  For purposes of this Appendix A, a Performance Cycle
shall be at least twelve (12) calendar months.
(iii) Committee Discretion.  To the extent required by Section 162(m) of the
Code, the Committee shall have full discretion, within the first ninety (90)
days of a Performance Cycle (or, if longer, within the maximum period allowed
under Section 162(m) of the Code), to designate the Employees who will be
Participants for the Performance Cycle, the length of such Performance Cycle,
the type(s) of Awards to be issued, the Performance Criteria that will be used
to calculate, in an objective manner, the Performance Formula, the kind(s)
and/or level(s) of the goals under the Performance Formula, whether the
Performance Criteria shall apply to the Company, Kodak, a Subsidiary, or any one
or more subunits of the foregoing, and the Performance Formula.
 
(iv) Adjustment of Awards.  The Committee is authorized at any time during the
first ninety (90) days of a Performance Cycle, or at any time thereafter (but
only to the extent the exercise of such authority after the first ninety (90)
days of a Performance Cycle would not cause the Awards granted to the
Participant for the Performance Cycle to fail to qualify as “performance-based
compensation” under Section 162(m) of the Code), in its sole and absolute
discretion, to adjust or modify the Performance Formula for such Performance
Cycle in order to prevent the dilution or enlargement of the rights of
Participants, (A) in the event of, or in anticipation of, any unusual or
extraordinary corporate item, transaction, event or development; (B) in
recognition of, or in anticipation of, any other unusual or nonrecurring events
affecting the Company, or the financial statements of the Company, or in
response to, or in anticipation of, changes in applicable laws, regulations,
accounting principles, or business conditions; and (C) in view of the
Committee’s assessment of the business strategy of the Company, performance of
comparable organizations, economic and business conditions, and any other
circumstances deemed relevant.  In no event shall the Award of any Participant
who is a Covered Employee be adjusted pursuant to Section 6.2 of the Plan to the
extent it would cause such Award to fail to qualify as “performance-based
compensation” under Section 162(m) of the Code.
 
(v) Determination of Awards.  Following the completion of a Performance Cycle,
the Committee shall review and certify in writing whether, and to what extent,
the goals under the Performance Formula for the Performance Cycle have been
achieved and, if so, to calculate and certify in writing the amount of the
Awards earned for the period.  The Committee shall then determine the actual
size of each Participant’s Award for the Performance Cycle.  In determining the
actual size of an individual Award for a Performance Cycle, the Committee may
reduce (but not increase) or eliminate the amount of the Award earned under the
Performance Formula for the Performance Cycle, if in the Committee’s sole
judgment, such reduction or elimination is appropriate.

 
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