Document:

kodk-ex104_329.htm

Exhibit 10.4

Personal and Confidential

 

Eysins, May 24th, 2016

Re:Project Voyager Retention Incentive and Continuation of Existing Severance Contractual Terms

Dear Philip

In recognition of your critical contributions to the Enterprise Inkjet Systems Division, I am pleased to inform you of your eligibility for an individualized special retention award and continuation of your existing severance contractual terms, each as described in this letter.  For purposes of this letter, “Kodak” refers to Eastman Kodak Sàrl and its related affiliates.

If you agree with the terms of this letter, and you execute and return this letter, this letter will constitute an “Agreement” between you and Kodak, effective as of the date that the executed Agreement is received by Kodak.

Background

As of the date of this Agreement, you have a contract of employment with Eastman Kodak Sàrl, effective January 1, 2011, which was modified by an addendum effective January 1, 2013, and which was amended by Amendment No. 1 dated September 9, 2013 (collectively, your “Employment Contract”).  By its terms, your Employment Contract will expire on September 3, 2016 at the latest (the “Expiration Date”), it being noted that you or Kodak may terminate your employment early by providing to the other party a Termination Notice at least one month prior to the Expiration Date.  

Under your Employment Contract, you are entitled to contractual severance in the event of the termination of your Employment Contract by Kodak without “Cause” or by you for “Good Reason” (each term, as defined in your Employment Contract), in accordance with the terms and conditions specified by your Employment Contract.  The contractual severance to which you are entitled to receive under your Employment Contract in the event of a qualifying termination of your employment is (A) the sum of your salary and your target annual incentive under Executive Compensation for Excellence and Leadership (“EXCEL”) for the fiscal year in which the termination notice is given (or if such target has not yet been established for such fiscal year, the target annual incentive under EXCEL for the fiscal year prior to the year in which the termination notice is given) multiplied by (B) one (the “Severance Payments”).  

As you know, Kodak is currently in talks to sell its Prosper enterprise inkjet printing business (“Project Voyager”).  The purpose of the retention award and the extension of your existing severance contractual terms is to provide you, in your capacity as the President of the Enterprise Inkjet Systems Division and President of the Micro 3D Printing and Packaging Division, an incentive to remain employed with Kodak and to successfully manage the sale 

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Exhibit 10.4

process in Project Voyager, the launch of the Ultrastream writing system at Drupa and the exit of the silver metal mesh program.

1.Retention Incentive

	
 
	
A.
	
Success Fee.  Kodak will pay you a one-time individualized special retention incentive in the amount set forth on Schedule A to this Agreement (the “Success Fee”) if you satisfy the continuous employment requirement set forth in Section 1.B and provided that all other conditions of this Agreement have been satisfied. 

	
 
	
B.
	
Continuous Employment.  To be eligible for the Success Fee, you must remain continuously and actively employed with Kodak in good standing through the successful closing of the transactions contemplated in Project Voyager (the “Success Date”).  In the event of the termination of your employment for any reason before the Success Date, or if all other conditions of this Agreement have not been satisfied, no Success Fee shall be payable to you.  In addition, no partial Success Fee shall be payable for achievement of any partial milestones. 

	
 
	
C.
	
Payment.  Payment of the Success Fee will be made by Kodak in a lump sum with the next payroll cycle following the Success Date.

	
 
	
D.
	
Tax Withholding/Social Security.  Kodak will withhold from the payment of the Success Fee all income, payroll, employment taxes and compulsory social security contributions required by applicable law or regulation to be withheld.  

	
 
	
E.
	
Not Benefits Bearing.  The Success Fee will not be “benefits bearing” for Kodak purposes.  That is, the amount will not be taken into account, or considered for any reason, for purposes of determining any company-provided benefits or compensation for which you are or may become eligible, including by way of illustration, and not by way of limitation, any pension or other retirement benefit.  

	
 
	
H.
	
Forfeiture.  In the event you breach any of the terms of your Employment Contract, this Agreement, or the waiver and release required by Section 2.C, in addition to and not in lieu of any other remedies that Kodak may pursue against you, you shall forfeit your right to the Success Fee, and if the Success Fee has already been paid to you, you agree to immediately repay to Kodak the Success Fee.

2.Continuation of Existing Severance Contractual Terms

	
 
	
A.
	
Existing Severance Contractual Terms.  In the event of the termination of your employment by Kodak without Cause or by you for Good Reason at any time after the date on which this Agreement becomes effective, regardless of whether such date is later than the Expiration Date of your Employment Contract, and you satisfy the requirements of Section 2.C, Kodak will pay to you the Severance Payments.  The Severance Payments will be made in lieu of any severance benefits under any other 

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Exhibit 10.4

	
 
		
agreement or arrangement with Kodak, as well as in lieu of any benefits under any local severance provisions applicable to employees in Switzerland, unless the benefits under any local severance provisions applicable to employees in Switzerland would be more than the Severance Payments, in which case you would be entitled to the benefits under any local severance provisions applicable to employees in Switzerland.  If after the effective date of this Agreement, you are entitled to severance benefits under your Employment Contract, other agreement or arrangement with Kodak, or under any local severance provisions applicable to employees in Switzerland, then the amount of the Severance Payments payable under this Agreement shall be reduced accordingly by the amounts of such other severance benefits.  In addition to the Severance Payments, your Emergence Award and Long-Term Equity Awards (as described in your Employment Contract) granted on or before the Expiration Date will continue to vest and remain exercisable according to the terms of the applicable award, in each case without any regard to any continued employment condition (your “Continued Vesting” benefits).

	
 
	
B.
	
Additional Event for Continuation of Existing Severance Contractual Terms.  In the event that, in connection with Project Voyager, you terminate your employment with Kodak and become employed by the acquirer of the Prosper business (directly or indirectly), and you are not otherwise eligible for the Severance Payments under Section 2.A of this Agreement, and you satisfy the requirements of Section 2.C, such termination of your employment shall be deemed to be a termination of your employment for Good Reason, and you shall be entitled to receive the Severance Payments and your Continued Vesting benefits in accordance with Section 2.A as a result of such termination.

	
 
	
C.
	
Waiver and Release Requirement.  The Severance Payments and your Continued Vesting benefits will only be provided if, at the time of your termination, you provide a waiver and release of any and all claims you may have with respect to Kodak in the form attached hereto as Exhibit 1.

	
 
	
D.
	
Time of Payment of Severance Benefits.  The Severance Payments will be made by Kodak in a lump sum within the next payroll cycle following the later of the date of your termination of employment or the date on which you provide Kodak with the waiver and release required by Section 2.C.

	
 
	
E.
	
Tax Withholding/Social Security.  Kodak will withhold from the payment of the Severance Payments all income, payroll, employment taxes and compulsory social security contributions required by applicable law or regulation to be withheld.

	
 
	
F.
	
Forfeiture.  In the event you breach any of the terms of your Employment Contract, this Agreement, or the waiver and release required by Section 2.C, in addition to and not in lieu of any other remedies that Kodak may pursue against you, you will immediately forfeit your right to the Severance Payments under your Employment 

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Exhibit 10.4

	
 
		
Contract or this Agreement, and if the Severance Payments have already been paid to you, you agree to immediately repay to Kodak the Severance Payments, and your Continued Vesting benefits shall immediately cease.

	
 
	
G.
	
Employment Reference.  Kodak will provide you with an employment reference promptly following the date of your termination of employment.

	
 
	
H.
	
Non-Duplication of Severance Payments.  Under no circumstances shall you be entitled to receive your Severance Payments under this Agreement and severance payments under your Employment Contract, any other agreement with Kodak or an affiliate thereof or any applicable employment statute.  In the event that you are entitled to receive severance payments outside of this Agreement, your Severance Payments payable under this Agreement shall be reduced by the amount of such other severance payments.

3.Assignment

	
 
	
A.
	
Assignment by You.  You may not assign your rights or obligations under this Agreement.

	
 
	
B.
	
Assignment by Kodak.  Kodak may assign its rights and obligations under this Agreement to a third party, including its obligations to make payment to you of the Success Fee or Severance Payments; provided, however, Kodak shall remain liable for the payment of the Success Fee and Severance Payments in the event that such third party fails to make such payments to you.

	
 
	
C.
	
Kodak Successors.  The rights and obligations of Kodak hereunder will inure to the benefit of and will be binding upon its successors and assigns.

4.Effect of Agreement on Employment Contract

The terms of your Employment Contract other than those regarding severance (including, but not limited to compensation, benefits, data protection, obligations of confidentiality, and non-competition and non-solicitation restrictions, etc.) remain in effect and continue in accordance with their terms under the Employment Contract until the Expiration Date, and for certain terms (e.g., obligations of confidentiality, and non-competition and non-solicitation restrictions), beyond the Expiration Date to the extent and for the period provided by the Employment Contract.  Notwithstanding the foregoing, your employment with the acquirer of the Prosper business on or after the Success Date shall not be considered engagement in a business which is in competition with the Business (as defined in your Employment Contract).

5.Miscellaneous Provisions

	
 
	
A.
	
Confidentiality.  You agree to keep the existence and content of this Agreement confidential, except that you may review it with your supervisor, attorney, financial advisor, spouse, and/or with me or my designee.  Prior to any such disclosure, you 

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Exhibit 10.4

	
 
		
agree to advise these individuals of the confidential nature of this Agreement and the facts giving rise to it as well as their obligations to maintain the confidentiality of this Agreement and the facts giving rise to it.  Nonetheless, either party to this Agreement (that is, you and Kodak) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of this transaction and all materials of any kind (including opinions or other tax analysis) that may be provided to that party relating to tax treatment and tax structure.  In addition, Kodak may disclose this Agreement as required by applicable law (including filing a copy of this Agreement with the U.S. Securities and Exchange Commission).

	
 
	
B.
	
Unenforceability.  If any portion of this Agreement 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 Agreement be given the maximum possible effect allowed by law.

	
 
	
C.
	
Kodak Right to Set-off.  By accepting this Agreement, you agree that except as prohibited by law, your obligations to repay Kodak under the terms of this Agreement or other agreement with Kodak may be satisfied by Kodak, at its option and without prior notice to you, by its set-off against amounts payable by Kodak to you, including compensation or benefits, at the time of your termination of employment for or on account of any reason.  Kodak will advise you of any set-off effected under this Section.  This Section shall be without prejudice and in addition to any right of set-off, combination of accounts, lien or other right to which Kodak is at any time otherwise entitled (whether by operation of law, contract or otherwise).

	
 
	
D.
	
Headings.  The headings of the several sections of this Agreement have been prepared for convenience and reference only and shall not control, affect the meaning or be taken as the interpretation of any provision of this Agreement.

	
 
	
E.
	
Applicable Law and Jurisdiction.  This Agreement shall be governed by substantive Swiss law.  Disputes arising under this Agreement shall be subject to the competent courts of the canton of Geneva.

	
 
	
F.
	
Amendment.  This Agreement may not be changed, modified, or amended, except in a writing signed by both you and Kodak that expressly acknowledges that it is changing, modifying or amending this Agreement.

	
 
	
G.
	
No Right to Continued Employment Created.  This Agreement does not provide you with any right to remain in the continued employment of Kodak for any specified period of time.  As agreed in the Employment Contract, you or the Company may terminate your employment early at any time for any reason, or for no reason, provided that you or the Company provides a Termination Notice to the other at least one month prior to any termination.

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Exhibit 10.4

	
 
	
H.
	
Complete Agreement.  By accepting this Agreement, you agree and acknowledge that this Agreement contains the entire understanding between Kodak and yourself with respect to your retention incentive and the severance payment benefits, and supersedes all previous written or oral negotiations, commitments, and agreements with respect to such subject matter.

	
 
	
I.
	
Tax Liability.  By signing this Agreement you agree that Kodak 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.

*****

If you wish to accept the terms of this Agreement, please sign your name and complete the signature date in the spaces provided below and return the signed original to me.

Sincerely,

/s/ Cendrine Saugy

Cendrine Saugy

HR Manager, Switzerland

 

Accepted by:

/s/ Philip Cullimore25/5/16

_____________________________________

Philip Cullimore   Date

 

cc:Jeffrey J. Clarke

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Exhibit 10.4

Letter Agreement with Philip Cullimore dated May 24, 2016

Schedule A

 

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Exhibit 10.4

Letter Agreement with Philip Cullimore dated May 24, 2016

Exhibit 1

Form of Waiver and Release of Claims

 

Eastman Kodak Sàrl

Cendrine Saugy

Route de Crassier 21

CH - 1262 Eysins

Switzerland

 

 Eysins, May 24th 2016

 

	
Re: 
	
Termination of my employment relationship with Eastman Kodak Sàrl (the “Company”)

 

 

 

Dear Sirs,

 

Reference is made to the termination of my employment relationship with the Company.

 

I irrevocably and unconditionally release and forever discharge the Company and/or its affiliates, including without limitation their directors, officers, executives, partners, stakeholders, agents, attorneys, insurers and employees, past and present, and each of them, from any and all claims (including but not limited to potential claims regarding benefits, overtime, vacation, pension, social security or bonus) in full and final settlement of any rights or obligations that may exist on the date hereof or at any time hereafter, including in particular in connection with or arising out of my employment agreement and/or the termination thereof.

 

Yours Sincerely,

 

 

_____________________________

Philip Cullimore

 

 

 

8kodk-ex105_331.htm

Exhibit 10.5

 

Eastman Kodak Company

Administrative Guide for the 2016 Performance Period

under the

Executive Compensation for Excellence and Leadership Plan

ARTICLE 1.INTRODUCTION

1.1Background

Under Article 4 of the Executive Compensation for Excellence and Leadership Plan (the “Plan”), the Executive Compensation Committee (the “Committee”) has exclusive responsibility to control, operate, manage and administer the Plan in accordance with its terms.   

1.2Purpose 

This Administrative Guide governs the Committee’s grant of Awards for the Plan’s 2016 Performance Period.  Unless otherwise noted in this Administrative Guide or determined by the Committee, the terms of the Plan shall apply to Awards granted under the Plan. 

ARTICLE 2.DEFINITIONS

Any defined term used in this Administrative Guide, other than those specifically defined in this Administrative Guide, will have the same meaning as that given to it under the terms of the Plan.

2.1  Form 10-K Filing Date

The term “Form 10-K Filing Date” means the date that the Company files, with the Security and Exchange Commission, its Form 10-K for the period ending December 31, 2016.

2.2Performance Gates

The term “Performance Gate” means a performance condition which must be achieved in order for performance against the Plan’s Performance Goal(s) to be considered.  Failure to achieve a Performance Gate prevents the funding of any Award Pool regardless of performance against the Performance Goal(s).

2.3 Performance Goal(s)

Definitions of the Performance Goal(s) are listed in Appendix A.           

2.4Performance Period

“Performance Period” means the 2016 Performance Period that coincides with Kodak’s 2016 fiscal year.

ARTICLE 3.ELIGIBILITY

Only Executives who are Officers under Section 16 of the Exchange Act shall be Participants in the Plan under this Administrative Guide for the 2016 Performance Period.

 

Confidential

 

 

Awards will be calculated using the base salary and target EXCEL percentage as of December 31 of the Performance Period.  For purposes of Covered Employees as defined by Section 162(m) of the Code, the Committee shall have the authority to exercise Negative Discretion pursuant to Section 5.3.

Unless the Committee provides otherwise, an Executive who becomes a Participant as a result of a job change or promotion during the Performance Period will become a Participant effective on the date of his or her appointment to the new job and will be eligible for a pro-rata Award based on the number of days of participation in EXCEL during the Performance Period.  

The amount of any pro-rata Award under the Plan as referenced above will be calculated by multiplying the earned Award by a percentage, the numerator of which is the number of days in the Performance Period during which the executive is a Participant in EXCEL and the denominator of which is 365 days.

Designation of an executive as a Participant for the 2016 Performance Period will not in any manner entitle the Participant to receive payment of an Award for the 2016 Performance Period.  The determination as to whether or not such Participant becomes entitled to payment of an Award for the 2016 Performance Period will be decided solely in accordance with the terms of this Administrative Guide and the Plan.

Subject to applicable local laws, regulations and processes, in order to be eligible for and to receive an Award, all eligible Participants must have signed an Employee Agreement in a form acceptable to the Chief Human Resources Officer, Eastman Kodak Company.  Any Participant who fails to sign such an Employee Agreement on or prior to the Award Payment Date(s) will not receive an Award.

ARTICLE 4.AWARD DESCRIPTION

4.1Terms of Awards

Any Award granted by the Committee under this Administrative Guide will be subject to the terms, conditions, restrictions and limitations contained in this Administrative Guide as well as those contained in the Plan.

4.2Form of Awards

Any Awards payable for the 2016 Performance Period will be paid on the Award Payment Date(s) determined by the Company, in cash, Common Stock or other property, or any combination thereof, as determined by the Committee.  To the extent an Award is paid in Common Stock, such Common Stock will be issued under the Eastman Kodak Company 2013 Omnibus Incentive Compensation Plan (or any applicable successor plan thereto).

ARTICLE 5.AWARD DETERMINATION

5.1Calculation of Award Pool

Provided that the Performance Gate(s) have been achieved, the percentage derived from the Performance Goal(s) will be multiplied by the aggregate Target Award to determine the Award Pool for the 2016 Performance Period.  

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Confidential

 

 

5.2 Performance Goal(s) and Performance Gate(s)

The Performance Goal(s) and Performance Gate(s) for the 2016 Performance Period are attached in Appendix A.  

Results between the dollar amounts for the Performance Goal(s) shown will be interpolated to derive a Performance Percentage for the Performance Period.  The Performance Goal(s) are subject to a maximum payout limit of 200%, although, in the discretion of the CEO and subject to the terms of the Plan, individual Awards may exceed this maximum for any Participant except for the Award of a Covered Employee.  

5.3Allocation of Award Pool to Covered Employees

Subject to the Committee’s authority to exercise Negative Discretion with regard to the amount of the Award Pool allocated to any Covered Employee for the 2016 Performance Period, each Covered Employee will be allocated an Award no greater than the lesser of: (i) 10% of the Award Pool; or (ii) 500% of his or her annual base salary on December 31, 2015 (or if the Executive was not employed by the Company on such date, 500% of his or her base salary upon hire following December 31, 2014); or (iii) $5,000,000.

Solely for purposes of this Section 5.3, the “Award Pool” will be determined by using the definition of “Aggregate Target Award” as set forth in this Section 5.3.

For purposes of this Section 5.3, “Aggregate Target Award” means the sum of the Target Award amounts on May 23, 2016 for all of the Participants eligible to participate in the Plan on May 23, 2016.

5.4Certification

Following the completion of the Performance Period, the Committee shall meet to review and certify in writing whether, and to what extent, the Performance Goal(s) and Performance Gate(s) for the Performance Period have been achieved.  If the Committee certifies that the Performance Gate(s) and minimum Performance Goal(s) have been achieved, it shall also calculate and certify in writing the Applicable Performance Percentage.  By applying the Performance Formula, the Committee shall then determine and certify the total allocation that has been earned for the Performance Period.  The Committee may, through the use of discretion, increase or reduce the amount that would otherwise be certified by application of the Performance Formula, if, in its sole judgment, such increase or reduction is appropriate.

ARTICLE 6.PAYMENT OF AWARDS 

6.1Continued Employment

Except as otherwise provided by this Article 6, to be eligible to be considered for an Award for the 2016 Performance Period, a Participant must be actively employed by the Company on the Form 10-K Filing Date. 

6.2Termination During the Performance Period 

In the event a Participant’s employment is terminated during the 2016 Performance Period, whether by the Company or the Participant, for any reason (including, but not limited to the 

3

Confidential

 

 

Participant’s death or Disability) other than as part of a divestiture by the Company, the Participant will not be eligible to be considered for an Award for the 2016 Performance Period.  

If the termination during the 2016 Performance Period is part of a divestiture by the Company, the Participant will be eligible to be considered for a pro-rata Award paid by the Company based on the number of days of participation in EXCEL during the Performance Period before the date of the divestiture only if the successor company has not agreed to accept liability for the Award.  The amount of any pro-rata Award will be calculated as described in Article 3 above.

6.3Termination After Performance Period and Prior to Form 10-K Filing Date 

In the event that a Participant is terminated by the Company for Cause after the end of the Performance Period, but before the Form 10-K Filing Date, the Participant will not be eligible to be considered for an Award for the Performance Period.

In the event that a Participant is terminated by the Company after the end of the Performance Period and prior to the Form 10-K Filing Date for any reason other than Cause, the Participant will be eligible to be considered for an Award for the Performance Period, based on certification by the Committee as set forth in Section 5.4 and subsequent management discretion with respect to the Participant’s performance in the Performance Period.  If the termination is part of a divestiture by the Company, the Participant will be eligible to be considered for an Award paid by the Company only if the successor company has not agreed to accept liability for the Award. 

In the event that a Participant voluntarily terminates his or her employment with the Company after the end of the Performance Period and prior to the Form 10-K Filing Date for any reason other than the death or Disability of the Participant, the Participant will not be eligible to be considered for an Award for the Performance Period.  

In the event of the death or Disability of a Participant after the end of the Performance Period and prior to the Form 10-K Filing Date, the Participant will be eligible to be considered for an Award for the Performance Period, based on certification by the Committee as set forth in Section 5.4 and subject to subsequent management discretion with respect to the Participant’s performance in the Performance Period.

6.4Forfeiture 

If, at any time, a Participant breaches his or her Employee Agreement or performs any act or engages in any activity which the CEO, in the case of all Participants other than the CEO, or the Committee, in the case of the CEO, determines is inimical to the best interests of Kodak, the Participant will forfeit all of his or her Awards under the Plan.

ARTICLE 7.ADMINISTRATION

This Administrative Guide shall be administered by the Committee.  The Committee is authorized to interpret, construe and implement the Administrative Guide, to prescribe, amend and rescind rules and regulations relating to it, and to make all other determinations necessary, appropriate or advisable for its administration.  Any determination by the Committee in carrying out, administering or construing this Administrative Guide will be final and binding for all purposes and upon all interested persons and their heirs, successors, and personal representatives.

ARTICLE 8.MISCELLANEOUS

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Confidential

 

 

8.1.Termination/Amendment 

The Committee may amend, suspend or terminate this Administrative Guide in whole or in part at any time and for any reason, with or without prior notice.  In addition, the Committee, or any person to whom the Committee has delegated the requisite authority, may, at any time and from time to time, amend this Administrative Guide in any manner and for any reason.

8.2     Section 409A Compliance

Notwithstanding Section 10.9 of the Plan, the Awards described in this Administrative Guide for the Performance Period are intended to comply with Section 409A of the Code to the extent such arrangements are subject to that law, and the Plan and this Administrative Guide shall be interpreted and administered accordingly.

8.3Participant’s Rights Unsecured

The amounts payable under this Administrative Guide will be unfunded, and the right of any Participant or his or her estate to receive payment under this Administrative Guide will be an unsecured claim against the general assets of the Company.  

8.4No Guarantee of Tax Consequences

No person connected with this Administrative Guide in any capacity, including, but not limited to, the Company and its 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 this Administrative Guide, or paid to or for the benefit of a Participant under this Administrative Guide, or that such tax treatment will apply to or be available to a Participant on account of participation in this Administrative Guide.

*****

 

5

Confidential

 

 

APPENDIX A

CONFIDENTIAL - DO NOT DISTRIBUTE

	
 
	
·
	
Definitions of Performance Goal(s):

	
 
	
·
	
Performance Gate(s):

	
 
	
·
	
Performance Goal Matrices (as presented to the Committee on May 23, 2016).

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