[X]
|
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
[ ]
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
NEW JERSEY
|
16-0417150
|
(State of incorporation)
|
(IRS Employer Identification No.)
|
343 STATE STREET, ROCHESTER, NEW YORK
|
14650
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
|
[ ]
|
Accelerated filer
|
[X]
|
Non-accelerated filer
|
[ ]
|
Smaller reporting company
|
[ ]
|
Title of each Class
|
Number of Shares Outstanding at
April 25, 2016
|
Common Stock, $0.01 par value
|
42,220,176
|
Page
|
||
Part I.—Financial Information
|
||
Item 1.
|
Financial Statements
|
2
|
Consolidated Statement of Operations (Unaudited)
|
2
|
|
Consolidated Statement of Comprehensive (Loss) Income (Unaudited)
|
3
|
|
Consolidated Statement of Financial Position (Unaudited)
|
4
|
|
Consolidated Statement of Cash Flows (Unaudited)
|
5
|
|
Notes to Financial Statements (Unaudited)
|
6
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
19
|
Liquidity and Capital Resources
|
29
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
31
|
Item 4.
|
Controls and Procedures
|
31
|
Part II.—Other Information
|
||
Item 1.
|
Legal Proceedings
|
32
|
Item 2.
|
Unregistered Sales of Securities and Use of Proceeds
|
32
|
Item 5.
|
Other Information
|
33
|
Item 6.
|
Exhibits
|
33
|
Signature
|
34
|
|
Index to Exhibits
|
35
|
Three Months Ended
March 31,
|
||||||||
|
2016
|
2015
|
||||||
Revenues
|
||||||||
Sales
|
$ | 288 | $ | 326 | ||||
Services
|
74 | 85 | ||||||
Total revenues
|
362 | 411 | ||||||
Cost of revenues
|
||||||||
Sales
|
228 | 268 | ||||||
Services
|
48 | 60 | ||||||
Total cost of revenues
|
276 | 328 | ||||||
Gross profit
|
86 | 83 | ||||||
Selling, general and administrative expenses
|
40 | 52 | ||||||
Research and development costs
|
9 | 13 | ||||||
Restructuring costs and other
|
4 | 17 | ||||||
Other operating expense, net
|
14 | 3 | ||||||
Income (loss) from continuing operations before interest expense, other charges, net, reorganization items, net and income taxes
|
19 | (2 | ) | |||||
Interest expense
|
16 | 15 | ||||||
Other charges, net
|
1 | 10 | ||||||
Reorganization items, net
|
- | 5 | ||||||
Income (loss) from continuing operations before income taxes
|
2 | (32 | ) | |||||
Provision for income taxes
|
6 | 5 | ||||||
Loss from continuing operations
|
(4 | ) | (37 | ) | ||||
Loss from discontinued operations, net of income taxes
|
(11 | ) | (17 | ) | ||||
Net loss
|
(15 | ) | (54 | ) | ||||
Less: Net income attributable to noncontrolling interests
|
3 | 4 | ||||||
NET LOSS ATTRIBUTABLE TO EASTMAN KODAK COMPANY
|
$ | (18 | ) | $ | (58 | ) | ||
Basic and diluted net (loss) earnings per share attributable to Eastman Kodak Company common shareholders:
|
||||||||
Continuing operations
|
$ | (0.17 | ) | $ | (0.97 | ) | ||
Discontinued operations
|
(0.26 | ) | (0.41 | ) | ||||
Total
|
$ | (0.43 | ) | $ | (1.38 | ) | ||
Number of common shares used in basic and diluted net (loss) earnings per share
|
42.1 | 41.9 |
Three Months Ended
March 31,
|
||||||||
2016
|
2015
|
|||||||
NET LOSS
|
$ | (15 | ) | $ | (54 | ) | ||
Less: net income attributable to noncontrolling interests
|
3 | 4 | ||||||
Net loss attributable to Eastman Kodak Company
|
(18 | ) | (58 | ) | ||||
Other comprehensive (loss) income, net:
|
||||||||
Currency translation adjustments
|
8 | (7 | ) | |||||
Unrealized gains on available-for-sale securities, net
|
- | 1 | ||||||
Pension and other postretirement benefit plan obligation activity, net
|
(146 | ) | 7 | |||||
Other comprehensive loss, net attributable to Eastman Kodak Company
|
(138 | ) | 1 | |||||
COMPREHENSIVE LOSS, NET ATTRIBUTABLE TO EASTMAN KODAK COMPANY
|
$ | (156 | ) | $ | (57 | ) | ||
March 31,
2016
|
December 31,
2015
|
|||||||
ASSETS
|
||||||||
Cash and cash equivalents
|
$ | 513 | $ | 546 | ||||
Receivables, net
|
319 | 346 | ||||||
Inventories, net
|
286 | 263 | ||||||
Deferred income taxes
|
22 | 22 | ||||||
Other current assets
|
23 | 28 | ||||||
Current assets held for sale
|
141 | 73 | ||||||
Total current assets
|
1,304 | 1,278 | ||||||
Property, plant and equipment, net of accumulated depreciation of $336 and $314, respectively
|
372 | 394 | ||||||
Goodwill
|
88 | 88 | ||||||
Intangible assets
|
101 | 119 | ||||||
Restricted cash
|
53 | 43 | ||||||
Deferred income taxes
|
23 | 23 | ||||||
Other long-term assets
|
125 | 122 | ||||||
Long-term assets held for sale
|
- | 71 | ||||||
TOTAL ASSETS
|
$ | 2,066 | $ | 2,138 | ||||
LIABILITIES AND EQUITY (DEFICIT)
|
||||||||
Accounts payable, trade
|
$ | 177 | $ | 186 | ||||
Current portion of long-term debt
|
4 | 4 | ||||||
Other current liabilities
|
230 | 247 | ||||||
Current liabilities held for sale
|
32 | 22 | ||||||
Total current liabilities
|
443 | 459 | ||||||
Long-term debt, net of current portion
|
672 | 673 | ||||||
Pension and other postretirement liabilities
|
735 | 619 | ||||||
Other long-term liabilities
|
264 | 277 | ||||||
Long-term liabilities held for sale
|
- | 7 | ||||||
Total Liabilities
|
2,114 | 2,035 | ||||||
Commitments and Contingencies (Note 5)
|
||||||||
Equity (Deficit)
|
||||||||
Common stock, $0.01 par value
|
- | - | ||||||
Additional paid in capital
|
635 | 633 | ||||||
Treasury stock, at cost
|
(5 | ) | (5 | ) | ||||
Accumulated deficit
|
(301 | ) | (283 | ) | ||||
Accumulated other comprehensive loss
|
(405 | ) | (267 | ) | ||||
Total Eastman Kodak Company shareholders’ equity (deficit)
|
(76 | ) | 78 | |||||
Noncontrolling interests
|
28 | 25 | ||||||
Total equity (deficit)
|
(48 | ) | 103 | |||||
TOTAL LIABILITIES AND EQUITY (DEFICIT)
|
$ | 2,066 | $ | 2,138 | ||||
Three Months Ended
March 31,
|
||||||||
2016
|
2015
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$ | (15 | ) | $ | (54 | ) | ||
Adjustments to reconcile to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
30 | 38 | ||||||
Pension and other postretirement income
|
(37 | ) | (25 | ) | ||||
Net gain on sales of businesses/assets
|
- | (3 | ) | |||||
Non-cash restructuring costs, asset impairments and other charges
|
25 | 6 | ||||||
Stock based compensation
|
2 | 7 | ||||||
Non-cash reorganization items, net
|
- | 2 | ||||||
Payment of claims
|
- | (9 | ) | |||||
Provision for deferred income taxes
|
3 | - | ||||||
Decrease in receivables
|
38 | 33 | ||||||
Increase in inventories
|
(20 | ) | (35 | ) | ||||
Decrease in liabilities excluding borrowings
|
(46 | ) | (55 | ) | ||||
Other items, net
|
(1 | ) | 6 | |||||
Total adjustments
|
(6 | ) | (35 | ) | ||||
Net cash used in operating activities
|
(21 | ) | (89 | ) | ||||
Cash flows from investing activities:
|
||||||||
Additions to properties
|
(5 | ) | (7 | ) | ||||
Proceeds from sales of businesses/assets, net
|
- | 2 | ||||||
Funding of restricted cash
|
(10 | ) | (1 | ) | ||||
Net cash used in investing activities
|
(15 | ) | (6 | ) | ||||
Cash flows from financing activities:
|
||||||||
Repayment of emergence credit facilities
|
(1 | ) | (1 | ) | ||||
Proceeds from VIE credit facility
|
- | 1 | ||||||
Treasury stock purchases
|
- | (1 | ) | |||||
Net cash used in financing activities
|
(1 | ) | (1 | ) | ||||
Effect of exchange rate changes on cash
|
3 | (7 | ) | |||||
Net decrease in cash and cash equivalents
|
(34 | ) | (103 | ) | ||||
Cash and cash equivalents, beginning of period
(1)
|
547 | 712 | ||||||
Cash and cash equivalents, end of period
(1)
|
$ | 513 | $ | 609 | ||||
(1)
|
Cash and cash equivalents, beginning of period includes $546 million of cash reported in the Statement of Financial Position and $1 million of cash reported in Current assets held for sale. There is no cash reported in Current assets held for sale at the end of the period.
|
(
in millions)
|
March 31,
2016
|
December 31,
2015
|
||||||
Trade receivables
|
$ | 268 | $ | 300 | ||||
Miscellaneous receivables
|
51 | 46 | ||||||
Total (net of allowances of $11 and $10 as of March 31, 2016 and December 31, 2015,
respectively)
|
$ | 319 | $ | 346 | ||||
|
(in millions)
|
March 31,
2016
|
December 31,
2015
|
||||||
Finished goods
|
$ | 157 | $ | 141 | ||||
Work in process
|
66 | 61 | ||||||
Raw materials
|
63 | 61 | ||||||
Total
|
$ | 286 | $ | 263 | ||||
March 31, 2016
|
|||||||||||||
(in millions)
|
Gross Carrying
|
Accumulated
|
Weighted-Average
|
||||||||||
Amount
|
Amortization
|
Net
|
Amortization Period
|
||||||||||
Technology-based
|
$ | 77 | $ | 38 | $ | 39 |
3 years
|
||||||
Kodak trade name
|
40 | - | 40 |
Indefinite life
|
|||||||||
Customer-related
|
30 | 10 | 20 |
7 years
|
|||||||||
Other
|
2 | - | 2 |
21 years
|
|||||||||
Total
|
$ | 149 | $ | 48 | $ | 101 | |||||||
December 31, 2015
|
|||||||||||||
(in millions)
|
Gross Carrying
|
Accumulated
|
Weighted-Average
|
||||||||||
Amount
|
Amortization
|
Net
|
Amortization Period
|
||||||||||
Technology-based
|
$ | 83 | $ | 38 | $ | 45 |
3 years
|
||||||
Kodak trade name
|
46 | - | 46 |
Indefinite life
|
|||||||||
Customer-related
|
37 | 11 | 26 |
7 years
|
|||||||||
Other
|
2 | - | 2 |
21 years
|
|||||||||
Total
|
$ | 168 | $ | 49 | $ | 119 | |||||||
Q2 - Q4 2016
|
$ 14
|
2017
|
17
|
2018
|
13
|
2019
|
6
|
2020
|
4
|
2021 and thereafter
|
7
|
Total
|
$ 61
|
Deferred revenue on extended warranties as of December 31, 2015
|
$ | 26 | ||
New extended warranty and maintenance arrangements in 2016
|
41 | |||
Recognition of extended warranty and maintenance arrangement revenue in 2016
|
(43 | ) | ||
Deferred revenue on extended warranties as of March 31, 2016
|
$ | 24 | ||
(in millions)
|
Three Months Ended
March 31,
|
|||||||
2016
|
2015
|
|||||||
Expense (income):
|
||||||||
Silver metal mesh touch screen long-lived asset impairments
(1) (2)
|
$ | 19 | $ | - | ||||
Litigation proceeds
(3)
|
(10 | ) | - | |||||
Goodwill and indefinite-lived intangible asset impairments
(4) (5)
|
5 | 6 | ||||||
Gain on sale of assets
|
- | (3 | ) | |||||
Total
|
$ | 14 | $ | 3 | ||||
(1)
|
In the first quarter of 2016, due to the exit of its position in silver metal mesh touch screen development, Kodak concluded that the carrying value of property, plant and equipment associated with those operations exceeded their fair value and recorded a pre-tax impairment charge of $11 million.
|
(2)
|
In the first quarter of 2016, Kodak recorded an impairment charge of $8 million related to silver metal mesh touch screen intangible assets. Refer to Note 4, “Intangible Assets.”
|
(3)
|
In the first quarter of 2016, Kodak received $10 million representing net litigation proceeds from DuPont.
|
(4)
|
In the first quarter of 2016, Kodak recorded an impairment charge of $5 million related to the Kodak trade name. Refer to Note 4, “Intangible Assets.”
|
(5)
|
In the first quarter of 2015, due to the change in Kodak’s reporting units and the delay in commercializing new technologies in the Micro 3D Printing reporting unit, Kodak concluded the carrying value of the Micro 3D Printing reporting unit exceeded its implied fair value and recorded a goodwill impairment charge of $6 million representing the entire amount of goodwill for this reporting unit.
|
|
Three Months Ended
March 31,
|
|||||||
(in millions) |
2016
|
2015
|
||||||
Loss on foreign exchange transactions
|
(1 | ) | (10 | ) | ||||
|
Three Months Ended
March 31,
|
|||||||
(in millions) |
2016
|
2015
|
||||||
Earnings (loss) from continuing operations before income taxes
|
$ | 2 | $ | (32 | ) | |||
Effective tax rate
|
300.0 | % | -15.6 | % | ||||
Provision for income taxes
|
6 | 5 | ||||||
Provision (benefit) for income taxes @ 35%
|
1 | (11 | ) | |||||
Difference between tax at effective vs. statutory rate
|
$ | 5 | $ | 16 | ||||
(in millions)
|
Severance Reserve
(1)
|
Exit
Costs
Reserve
(1)
|
Long-lived Asset Impairments and Inventory
Write-downs
(1)
|
Accelerated Depreciation
(1)
|
Total
|
|||||||||||||||
Balance as of December 31, 2015
|
$ | 7 | $ | 4 | $ | - | $ | - | $ | 11 | ||||||||||
Q1 2016 charges
|
4 | - | 1 | - | 5 | |||||||||||||||
Q1 utilization/cash payments
|
(5 | ) | (1 | ) | (1 | ) | - | (7 | ) | |||||||||||
Q1 2016 other adjustments & reclasses
(2)
|
(1 | ) | - | - | - | (1 | ) | |||||||||||||
Balance as of March 31, 2016
|
$ | 5 | $ | 3 | $ | - | $ | - | $ | 8 | ||||||||||
(1)
|
The severance and exit costs reserves require the outlay of cash, while long-lived asset impairments, accelerated depreciation and inventory write-downs represent non-cash items.
|
(2)
|
The $(1) million represents severance related charges for pension plan special termination benefits, which are reflected in Pension and other postretirement liabilities in the Consolidated Statement of Financial Position.
|
Three Months Ended
March 31,
|
||||||||||||||||
|
2016
|
2015
|
||||||||||||||
(in millions) |
U.S.
|
Non-U.S.
|
U.S.
|
Non-U.S.
|
||||||||||||
Major defined benefit plans:
|
||||||||||||||||
Service cost
|
$ | 3 | $ | 1 | $ | 4 | $ | 1 | ||||||||
Interest cost
|
30 | 3 | 37 | 4 | ||||||||||||
Expected return on plan assets
|
(65 | ) | (7 | ) | (68 | ) | (8 | ) | ||||||||
Amortization of:
|
||||||||||||||||
Prior service credit
|
(2 | ) | - | (2 | ) | - | ||||||||||
Net pension income before special termination benefits
|
(34 | ) | (3 | ) | (29 | ) | (3 | ) | ||||||||
Special termination benefits
|
1 | - | 4 | - | ||||||||||||
Net pension income
|
(33 | ) | (3 | ) | (25 | ) | (3 | ) | ||||||||
Other plans including unfunded plans
|
- | (1 | ) | - | 2 | |||||||||||
Total net pension income
|
$ | (33 | ) | $ | (4 | ) | $ | (25 | ) | $ | (1 | ) | ||||
(in millions of shares)
|
Three Months Ended
March 31,
|
|||||||
2016
|
2015
|
|||||||
Restricted stock units
|
0.4 | - | ||||||
Stock options
|
1.7 | 0.9 | ||||||
2.1 | 0.9 | |||||||
|
Three Months Ended
March 31,
|
|||||||
(in millions) |
2016
|
2015
|
||||||
Currency translation adjustments
|
$ | 8 | $ | (7 | ) | |||
Unrealized gains on available-for-sale securities, before tax
|
- | 1 | ||||||
Tax provision
|
- | - | ||||||
Unrealized gains on available-for-sale securities, net of tax
|
- | 1 | ||||||
Pension and other postretirement benefit plan changes
|
||||||||
Newly established prior service credit
|
- | 4 | ||||||
Newly established net actuarial (loss) gain
|
(142 | ) | 5 | |||||
Tax provision
|
- | - | ||||||
Newly established prior service credit and net actuarial (loss) gain, net of tax
|
(142 | ) | 9 | |||||
Reclassification adjustments:
|
||||||||
Amortization of prior-service credit
|
(a)
|
(2 | ) | (2 | ) | |||
Amortization of actuarial gains
|
(a)
|
(1 | ) | - | ||||
Recognition of gains due to settlements
|
(a)
|
(1 | ) | - | ||||
Total reclassification adjustments
|
(4 | ) | (2 | ) | ||||
Tax provision
|
- | - | ||||||
Reclassification adjustments, net of tax
|
(4 | ) | (2 | ) | ||||
Pension and other postretirement benefit plan changes, net of tax
|
(146 | ) | 7 | |||||
Other comprehensive (loss) income
|
$ | (138 | ) | $ | 1 | |||
(in millions)
|
March 31,
2016
|
December 31, 2015
|
||||||
Currency translation adjustments
|
$ | (59 | ) | $ | (67 | ) | ||
Available for sale securities
|
2 | 2 | ||||||
Pension and other postretirement benefit plan changes
|
(348 | ) | (202 | ) | ||||
Ending balance
|
$ | (405 | ) | $ | (267 | ) | ||
|
Three Months Ended
March 31,
|
|||||||
(in millions) |
2016
|
2015
|
||||||
Print Systems
|
$ | 231 | $ | 254 | ||||
Micro 3D Printing and Packaging
|
29 | 31 | ||||||
Software and Solutions
|
22 | 28 | ||||||
Consumer and Film
|
56 | 72 | ||||||
Enterprise Inkjet Systems
|
20 | 23 | ||||||
Intellectual Property Solutions
|
- | - | ||||||
Eastman Business Park
|
4 | 3 | ||||||
Consolidated total
|
$ | 362 | $ | 411 | ||||
Three Months Ended
March 31,
|
||||||||
(in millions)
|
2016
|
2015
|
||||||
Print Systems
|
$ | 18 | $ | 13 | ||||
Micro 3D Printing and Packaging
|
1 | - | ||||||
Software and Solutions
|
2 | 2 | ||||||
Consumer and Film
|
7 | 18 | ||||||
Enterprise Inkjet Systems
|
5 | 7 | ||||||
Intellectual Property Solutions
|
(4 | ) | (8 | ) | ||||
Eastman Business Park
|
- | (1 | ) | |||||
Total of reportable segments
|
29 | 31 | ||||||
All Other
|
3 | 4 | ||||||
Corporate components of pension and
OPEB income
(1)
|
41 | 33 | ||||||
Depreciation and amortization
|
(27 | ) | (36 | ) | ||||
Restructuring costs and other
|
(5 | ) | (17 | ) | ||||
Overhead supporting, but not directly absorbed by discontinued operations
(2)
|
(4 | ) | (5 | ) | ||||
Stock-based compensation
|
(2 | ) | (6 | ) | ||||
Consulting and other costs
(3)
|
(1 | ) | (2 | ) | ||||
Idle costs
(4)
|
(1 | ) | (1 | ) | ||||
Other operating expense, net
(5)
|
(14 | ) | (3 | ) | ||||
Interest expense
(5)
|
(16 | ) | (15 | ) | ||||
Other charges, net
(5)
|
(1 | ) | (10 | ) | ||||
Reorganization items, net
(5)
|
- | (5 | ) | |||||
Consolidated earnings (loss) from continuing
operations before income taxes
|
$ | 2 | $ | (32 | ) | |||
(1)
|
Composed of interest cost, expected return on plan assets, amortization of actuarial gains and losses and curtailments and settlement components of pension and other postretirement benefit expenses.
|
(2)
|
Primarily consists of costs for shared resources allocated to the Prosper Enterprise Inkjet business discontinued operation in the prior year period which are now included in the results of continuing operations and an estimate of costs for shared resources which would have been allocated to the Prosper Enterprise Inkjet business discontinued operation in the current year period had the business remained in continuing operations.
|
(3)
|
Consulting and other costs are primarily related to professional services provided for corporate strategic initiatives.
|
(4)
|
Consists of third party costs such as security, maintenance, and utilities required to maintain land and buildings in certain locations not used in any Kodak operations.
|
(5)
|
As reported in the Consolidated Statement of Operations.
|
|
Three Months Ended
March 31,
|
|||||||
(in millions) |
2016
|
2015
|
||||||
Revenues
|
$ | 14 | $ | 16 | ||||
Cost of sales
|
12 | 23 | ||||||
Selling, general and administrative expenses
|
5 | 6 | ||||||
Research and development expenses
|
6 | 5 | ||||||
Loss from discontinued operations, before income taxes
|
(9 | ) | (18 | ) | ||||
Provision (benefit) for income taxes
|
1 | (1 | ) | |||||
Loss from discontinued operations, net of income taxes
|
$ | (10 | ) | $ | (17 | ) | ||
(in millions)
|
March 31,
2016
|
December 31,
2015
|
||||||
ASSETS
|
||||||||
Cash and cash equivalents
|
$ | - | $ | 1 | ||||
Receivables, net
|
13 | 19 | ||||||
Inventories, net
|
52 | 51 | ||||||
Property, plant and equipment, net
|
36 | 32 | ||||||
Intangible assets, net
|
38 | 39 | ||||||
Assets of business held for sale
|
$ | 139 | $ | 142 | ||||
LIABILITIES
|
||||||||
Accounts payable, trade
|
$ | 6 | $ | 9 | ||||
Current portion of long-term debt
|
- | 1 | ||||||
Other current liabilities
|
20 | 12 | ||||||
Long-term debt, net of current portion
|
2 | 2 | ||||||
Other long-term liabilities
|
4 | 5 | ||||||
Liabilities of business held for sale
|
$ | 32 | $ | 29 | ||||
|
Three Months Ended
March 31,
|
|||||||
(in millions) |
2016
|
2015
|
||||||
Depreciation
|
2 | 1 | ||||||
Amortization
|
1 | 1 | ||||||
Capital expenditures
|
1 | - |
Three Months Ended
|
||||||||
(in millions)
|
March 31,
|
|||||||
2015
|
2016
|
|||||||
Net gain from derivatives not designated as hedging instruments
|
$ | 2 | $ | 18 | ||||
·
|
Kodak’s ability to comply with the covenants in the Credit Agreements;
|
·
|
Kodak’s ability to improve and sustain its operating structure, cash flow, profitability and other financial results;
|
·
|
the ability of Kodak to achieve cash forecasts, financial projections, and projected growth;
|
·
|
Kodak’s ability to achieve the financial and operational results contained in its business plans;
|
·
|
Kodak’s ability to fund continued investments, capital needs and restructuring payments and service its debt;
|
·
|
Kodak’s ability to discontinue, sell or spin-off certain non-core businesses or operations, or otherwise monetize assets;
|
·
|
changes in foreign currency exchange rates, commodity prices and interest rates;
|
·
|
Kodak’s ability to effectively anticipate technology trends and develop and market new products, solutions and technologies, including its micro 3D printing of touch sensors;
|
·
|
Kodak’s ability to effectively compete with large, well-financed industry participants;
|
·
|
continued sufficient availability of borrowings and letters of credit under the ABL Credit Agreement, Kodak’s ability to obtain additional financing if and as needed and Kodak’s ability provide or facilitate financing for its customers;
|
·
|
Kodak’s ability to attract and retain key executives, managers and employees;
|
·
|
the performance by third parties of their obligations to supply products, components or services to Kodak; and
|
·
|
the impact of the global economic environment of Kodak.
|
·
|
Use Kodak’s divisional structure to drive accountability, transparency, and speed of decision making;
|
·
|
Focus product investment in growth engines - Sonora, Packaging, Micro 3D Printing and Software and Services;
|
·
|
Maintain stable market leadership position and cash flows associated with Print Systems;
|
·
|
Manage the expected decline in and maximize cash generated by mature businesses;
|
·
|
Continue to streamline processes to drive cost reductions and improve operating leverage; and
|
·
|
Continue to explore opportunities to monetize the asset base.
|
·
|
Print Systems’ digital plate products include traditional digital plates and KODAK SONORA Process Free Plates. SONORA process free plates allow Kodak customers to skip the plate processing step prior to mounting plates on a printing press. This improvement in the printing process saves time and costs for customers. Also, SONORA process free plates reduce the environmental impact of the printing process because they eliminate the use of chemicals (including solvents), water and power that is otherwise required to process a traditional plate. While traditional digital plate offerings are experiencing pricing pressure, innovations in Kodak product lines which command premium prices, such as SONORA Process Free Plates, are expected to offset some of the long-term price erosion in the market. Print Systems’ revenues declined $23 million compared with the prior year quarter with close to half of the decline due to lower pricing on plates.
|
·
|
In Micro 3D Printing and Packaging, the earnings contribution from Packaging offsets the cost of developing the Micro 3D Printing business. Kodak expects that growth in Packaging, as well as the transition from investment to commercialization of product in Micro 3D Printing, will result in revenue and earnings growth in this segment.
|
·
|
The Software and Solutions segment is comprised of Kodak Technology Solutions, which includes Enterprise Services and Solutions, and Unified Workflow Solutions. Unified Workflow Solutions is an established product line, whereas Kodak Technology Solutions includes growing product lines that leverage existing technologies and intellectual property in new applications. These business initiatives generally do not require substantial additional investment, and Kodak expects that they will grow in contribution to earnings.
|
·
|
The Consumer and Film segment’s revenues are expected to continue to decline. Consumer and Film’s revenue declined $16 million compared with the prior year quarter.
|
·
|
In Enterprise Inkjet Systems, the legacy Versamark business is expected to continue to decline.
|
·
|
Selling, general and administrative expenses (“SG&A”) and research and development (“R&D”) expenses declined a combined $16 million from the first quarter of 2015 to the first quarter of 2016, as the result of a number of actions including headcount reductions, reduced overhead costs, savings from global benefit changes, facilities consolidations and renegotiations of vendor contracts and the focusing of R&D spending on materials science.
|
·
|
Kodak plans to continue to pursue monetization of its asset base, including selling and licensing intellectual property, selling and leasing excess capacity in its properties, and pursuing rights to an earn-out from a previous divestiture.
|
·
|
Prepress Solutions:
|
·
|
Digital offset plates, which includes KODAK SONORA Process Free Plates. KODAK SONORA Process Free Plates are prepared directly with a CTP thermal output device and do not require subsequent processing chemistry, processing equipment or chemical disposal. As a result, the plates deliver cost savings and efficiency for customers and promote environmental sustainability practices.
|
·
|
CTP output devices that are used by customers to transfer images onto aluminum offset printing plates and provide consistent and high quality imaging for offset press applications. CTP products provide high resolution, consistency and stability in thermal imaging. Kodak also offers a lower cost CTP system using TH5 imaging technology, which provides a highly efficient and cost-effective imaging solution at a lower price point.
|
·
|
Electrophotographic Printing Solutions:
|
·
|
NEXPRESS printers produce high-quality, differentiated printing of short-run, personalized print applications, such as direct mail, books, marketing collateral and photo products.
|
·
|
DIGIMASTER printers use monochrome electrophotographic printing technology for transactional printing, short-run books, corporate documentation, manuals and direct mail.
|
·
|
Micro 3D Printing
|
·
|
The Micro 3D Printing products offer many advantages over traditionally manufactured products, including lower cost points and reduced adverse environmental impact. Traditionally manufactured products require higher material costs,
|
·
|
additional manufacturing steps, and, for the most widely used technology, the mining of a rare metal. Kodak is working with lead customers in large format and industrial markets to achieve market introduction in 2016.
|
·
|
Packaging
|
·
|
The Packaging business consists of flexographic printing equipment and related consumables and services, which enable graphic customization of a wide variety of packaging materials. The flagship FLEXCEL NX system provides imaging devices to deliver high productivity and consistency, as well as a full tonal range for flexographic printing. The new FLEXCEL Direct System is a next generation platform that significantly reduces the steps needed to produce flexographic plates.
|
·
|
Motion Picture, Industrial Chemicals and Films:
|
·
|
Includes the motion picture film business serving the entertainment and advertising industries. Motion picture products are sold directly to studios, laboratories and independent filmmakers.
|
·
|
Offers industrial films, including films used by the electronics industry to produce printed circuit boards.
|
·
|
The business also includes related component businesses: Polyester Film; Solvent Recovery; and Specialty Chemicals, Inks and Dispersions.
|
·
|
Consumer Inkjet Solutions:
|
·
|
Involves the sale of ink to an existing installed base of consumer inkjet printers
|
·
|
Consumer Products
:
|
·
|
Includes licensing of Kodak brands to third parties and consumer products. Kodak currently licenses its brand for use with a range of consumer products including batteries, cameras and camera accessories and recordable media.
Kodak intends to continue efforts to grow its portfolio of consumer product licenses in order to generate both ongoing royalty streams and upfront payments.
|
Three Months Ended March 31,
|
||||||||
(in millions)
|
2016
|
2015
|
||||||
Revenues from continuing operations:
|
||||||||
Print Systems
|
$ | 231 | $ | 254 | ||||
Enterprise Inkjet Systems
|
20 | 23 | ||||||
Micro 3D Printing and Packaging
|
29 | 31 | ||||||
Software and Solutions
|
22 | 28 | ||||||
Consumer and Film
|
56 | 72 | ||||||
Intellectual Property Solutions
|
- | - | ||||||
Eastman Business Park
|
4 | 3 | ||||||
Consolidated total
|
$ | 362 | $ | 411 | ||||
Three Months Ended
March 31,
|
||||||||
(in millions)
|
2016
|
2015
|
||||||
Print Systems
|
$ | 18 | $ | 13 | ||||
Micro 3D Printing and Packaging
|
1 | - | ||||||
Software and Solutions
|
2 | 2 | ||||||
Consumer and Film
|
7 | 18 | ||||||
Enterprise Inkjet Systems
|
5 | 7 | ||||||
Intellectual Property Solutions
|
(4 | ) | (8 | ) | ||||
Eastman Business Park
|
- | (1 | ) | |||||
Total of reportable segments
|
29 | 31 | ||||||
All Other
|
3 | 4 | ||||||
Corporate components of pension and
OPEB income
(1)
|
41 | 33 | ||||||
Depreciation and amortization
|
(27 | ) | (36 | ) | ||||
Restructuring costs and other
|
(5 | ) | (17 | ) | ||||
Overhead supporting, but not directly absorbed by discontinued operations
(2)
|
(4 | ) | (5 | ) | ||||
Stock-based compensation
|
(2 | ) | (6 | ) | ||||
Consulting and other costs
(3)
|
(1 | ) | (2 | ) | ||||
Idle costs
(4)
|
(1 | ) | (1 | ) | ||||
Other operating expense, net
(5)
|
(14 | ) | (3 | ) | ||||
Interest expense
(5)
|
(16 | ) | (15 | ) | ||||
Other charges, net
(5)
|
(1 | ) | (10 | ) | ||||
Reorganization items, net
(5)
|
- | (5 | ) | |||||
Consolidated earnings (loss) from continuing
operations before income taxes
|
$ | 2 | $ | (32 | ) | |||
(1)
|
Composed of interest cost, expected return on plan assets, amortization of actuarial gains and losses, and curtailments and settlement components of pension and other postretirement benefit expenses.
|
(2)
|
Primarily consists of costs for shared resources allocated to the Prosper Enterprise Inkjet business discontinued operation in the prior year period which are now included in the results of continuing operations and an estimate of costs for shared resources which would have been allocated to the Prosper Enterprise Inkjet business discontinued operation in the current year period had the business remained in continuing operations.
|
(3)
|
Consulting and other costs are primarily related to professional services provided for corporate strategic initiatives.
|
(4)
|
Consists of third party costs such as security, maintenance, and utilities required to maintain land and buildings in certain locations not used in any Kodak operations.
|
(5)
|
As reported in the Consolidated Statement of Operations.
|
(in millions)
|
Three Months Ended March 31,
|
|||||||||||||||||||
|
2016
|
% of Sales
|
2015
|
% of Sales
|
$ Change
|
|||||||||||||||
Revenues
|
$ | 362 | $ | 411 | $ | (49 | ) | |||||||||||||
Cost of revenues
|
276 | 328 | (52 | ) | ||||||||||||||||
Gross profit
|
86 | 24 | % | 83 | 20 | % | 3 | |||||||||||||
Selling, general and administrative expenses
|
40 | 11 | % | 52 | 13 | % | (12 | ) | ||||||||||||
Research and development costs
|
9 | 2 | % | 13 | 3 | % | (4 | ) | ||||||||||||
Restructuring costs and other
|
4 | 1 | % | 17 | 4 | % | (13 | ) | ||||||||||||
Other operating expense, net
|
14 | 3 | 11 | |||||||||||||||||
Income (loss) from continuing operations before interest expense, other charges, net, reorganization items, net and income taxes
|
19 | 5 | % | (2 | ) | 0 | % | 21 | ||||||||||||
Interest expense
|
16 | 15 | 1 | |||||||||||||||||
Other charges, net
|
1 | 10 | (9 | ) | ||||||||||||||||
Reorganization items, net
|
- | 5 | (5 | ) | ||||||||||||||||
Income (loss) from continuing operations before income taxes
|
2 | 1 | % | (32 | ) | -8 | % | 34 | ||||||||||||
Provision for income taxes
|
6 | 2 | % | 5 | 1 | % | 1 | |||||||||||||
Loss from continuing operations
|
(4 | ) | -1 | % | (37 | ) | -9 | % | 33 | |||||||||||
Loss from discontinued operations, net of
income taxes
|
(11 | ) | (17 | ) | 6 | |||||||||||||||
Net loss
|
(15 | ) | -4 | % | (54 | ) | -13 | % | 39 | |||||||||||
Less: Net earnings attributable to noncontrolling interests
|
3 | 4 | (1 | ) | ||||||||||||||||
NET LOSS ATTRIBUTABLE TO EASTMAN KODAK COMPANY
|
$ | (18 | ) | -5 | % | $ | (58 | ) | -14 | % | $ | 40 | ||||||||
Three Months Ended March 31,
|
||||||||||||
2016
|
2015
|
$ Change
|
||||||||||
Revenues
|
$ | 231 | $ | 254 | $ | (23 | ) | |||||
Operational EBITDA before allocation of corporate SG&A costs
|
30 | 25 | 5 | |||||||||
Allocation of corporate SG&A costs
|
12 | 12 | - | |||||||||
Operational EBITDA
|
18 | 13 | 5 | |||||||||
Operational EBITDA as a % of revenues
|
8 | % | 5 | % |
Three Months Ended March 31,
|
||||||||||||
2016
|
2015
|
$ Change
|
||||||||||
Revenues
|
$ | 29 | $ | 31 | $ | (2 | ) | |||||
Operational EBITDA before allocation of corporate SG&A costs
|
3 | 2 | 1 | |||||||||
Allocation of corporate SG&A costs
|
2 | 2 | - | |||||||||
Operational EBITDA
|
1 | - | 1 | |||||||||
Operational EBITDA as a % of revenues
|
3 | % | 0 | % |
Three Months Ended March 31,
|
||||||||||||
2016
|
2015
|
$ Change
|
||||||||||
Revenues
|
$ | 22 | $ | 28 | $ | (6 | ) | |||||
Operational EBITDA before allocation of corporate SG&A costs
|
3 | 4 | (1 | ) | ||||||||
Allocation of corporate SG&A costs
|
1 | 2 | (1 | ) | ||||||||
Operational EBITDA
|
2 | 2 | - | |||||||||
Operational EBITDA as a % of revenues
|
9 | % | 7 | % |
Three Months Ended March 31,
|
||||||||||||
2016
|
2015
|
$ Change
|
||||||||||
Revenues
|
$ | 56 | $ | 72 | $ | (16 | ) | |||||
Operational EBITDA before allocation of corporate SG&A costs
|
10 | 21 | (11 | ) | ||||||||
Allocation of corporate SG&A costs
|
3 | 3 | - | |||||||||
Operational EBITDA
|
7 | 18 | (11 | ) | ||||||||
Operational EBITDA as a % of revenues
|
13 | % | 25 | % |
Three Months Ended March 31,
|
||||||||||||
2016
|
2015
|
$ Change
|
||||||||||
Revenues
|
$ | 20 | $ | 23 | $ | (3 | ) | |||||
Operational EBITDA before allocation of corporate SG&A costs
|
6 | 8 | (2 | ) | ||||||||
Allocation of corporate SG&A costs
|
1 | 1 | - | |||||||||
Operational EBITDA
|
5 | 7 | (2 | ) | ||||||||
Operational EBITDA as a % of revenues
|
25 | % | 30 | % |
(in millions)
|
March 31,
2016
|
December 31,
2015
|
||||||
Cash and cash equivalents
|
$ | 513 | $ | 546 | ||||
Three Months Ended
|
||||||||||||
March 31,
|
||||||||||||
(in millions)
|
2016
|
2015
|
Change
|
|||||||||
Cash flows from operating activities:
|
||||||||||||
Net cash used in operating activities
|
$ | (21 | ) | $ | (89 | ) | $ | 68 | ||||
Cash flows from investing activities:
|
||||||||||||
Net cash used in investing activities
|
(15 | ) | (6 | ) | (9 | ) | ||||||
Cash flows from financing activities:
|
||||||||||||
Net cash used in financing activities
|
(1 | ) | (1 | ) | - | |||||||
Effect of exchange rate changes on cash
|
3 | (7 | ) | 10 | ||||||||
Net decrease in cash and cash equivalents
(1)
|
$ | (34 | ) | $ | (103 | ) | $ | 69 | ||||
(1)
|
The beginning cash and cash equivalents balance for the three month period ended March 31, 2016 in the cash flow activity above included $546 million of cash reported in the Statement of Financial Position and $1 million of cash reported in Current assets held for sale. There was no cash reported in Current assets held for sale at the end of that period or in the three month period ended March 31, 2015.
|
Total Number of Shares Purchased
|
Average Price Paid per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
Maximum That May Be Purchased under the Plans or Programs
|
|||||||||||||
February 1 through 29
|
1,541 | 8.84 | n/a | n/a | ||||||||||||
March 1 through 31
|
18,099 | 10.18 | n/a | n/a | ||||||||||||
Total
|
19,640 | |||||||||||||||
(1)
|
These repurchases are made pursuant to the terms of the 2013 Omnibus Incentive Plan providing the Company the right to withhold amounts deliverable under the plan in order to satisfy minimum statutory tax withholding requirements.
|
(a)
|
Exhibits required as part of this report are listed in the index appearing below.
|
EASTMAN KODAK COMPANY
(Registrant)
|
|||
Date:
May 5, 2016
|
/s/ Eric Samuels
|
||
Eric Samuels
Chief Accounting Officer and Corporate Controller
|
|||
(Chief Accounting Officer and Authorized Signatory)
|
(a)
|
Exhibits required as part of this report are listed in the index appearing below.
|
o
|
“Business”
means the business of the Company at the time of the termination of the Executive’s employment with which the Executive was involved to a material extent during the period of 12 months ending on the date of the termination of his employment;
|
o
|
“Company”
means Eastman Kodak Sári or any subsidiary associated or holding company in the Kodak group of companies and where not less than 25 per cent of such company is owned directly or indirectly by Kodak Limited or its holding company;
|
o
|
“Customer”
means any firm, company or other person who, during the period of 12 months ending on the date of the termination of the Executive’s employment, was a customer of or in the habit of dealing with the Company and with whom the Executive had contact or about whom he became aware or informed in the course of his employment; and
|
o
|
“Employee”
means any person who, at the date of the termination of the employment was an employee of the Company and who could materially damage the interests of the Company if he became employed in any business concern in competition with the Business.
|
a)
|
The Employee will not without the prior written consent of the Company for a period of 12 months after the termination of his employment, solicit or endeavor to entice away from the Company the business or custom of a Customer with a view to providing goods or services to that Customer in competition with the Business.
|
b)
|
The Employee will not without the prior written consent of the Company for a period of 12 months after the termination of his employment, provide goods or services to or otherwise have any business dealings with any Customer in the course of any business concern which is in competition with the Business.
|
c)
|
The Employee will not without the prior written consent of the Company for a period of 12 months after the termination of his employment in the course of any business concern which is in competition with the Business offer employment to or otherwise endeavor to entice away from the Company any Kodak co-worker.
|
d)
|
The Employee will not without the prior written consent of the Company for a period of 12 months after the termination of his employment, be engaged in or concerned in any capacity in any business concern which is in competition with the Business. This clause shall not restrain the Employee from being engaged or concerned in any business concern in so far as the Employee’s duties or work shall relate solely to:
|
o
|
Geographical areas where the business concern is not in competition with the Restricted Business; or
|
o
|
Services or activities of a kind with which the Executive was not concerned to a material extent during the period of 12 months ending on the date of the termination of his employment.
|
Read and approved:
|
/s/ Philip Cullimore
|
Date:
|
9/12/10
|
(
Philip Cullimore)
|
•
|
Place of work
: the Employee’s place of work will be at the registered office in Gland (Route des Avouillons 30, 1196 Gland, Switzerland).
|
•
|
Public holidays
: public holidays applicable are of the Canton of Vaud.
|
•
|
Social Security
: compulsory social security contributions (AVS/Al/AF/APG) applicable are of the Canton of Vaud; the Employer will no compensate for any loss of social security benefits and/or deductions.
|
•
|
Tax at source
: compulsory application of the tax at source rules between France and the Canton of Vaud will be implemented.
|
•
|
Parking places for employees
: the Employer can no longer guarantee a parking place for all employees; however a plan to minimize impacts is in place (see Mobility plan).
|
•
|
Work permit
: the Employee’s work permit will be updated to comply with the local law of the Canton of Vaud when appropriate.
|
Name and address for notices
|
Philip Cullimore Address currently on file with the Company.
|
Position
|
You will serve as Managing Director -EAMER.
|
Scheduled Term
|
Your Scheduled Term begins on the Effective Date and is initially scheduled to end on the 3rd anniversary of the Effective Date.
|
Starting Salary
|
$573,982 (CHF 540,000)
|
Annual Incentive
|
The target level for your Annual Incentive will be at least 50% of your Salary.
|
Emergence Award
|
Restricted stock units with a grant date fair value equal to $208,600 that vest in three equal , annual installments beginning on the first anniversary of the Effective Date.
|
Long-Term Equity Award
|
The target level for your Long-Term Equity Award will be at least $200,000.
|
Severance Multiplier
|
1
|
Additional Benefits
|
N/A
|
1.
|
Terms Schedule
|
2.
|
Commencement of Employment
|
3.
|
Your Position, Performance and Other Activities
|
a)
|
Position.
You will be employed in the position stated in your Schedule. Your position will be based in Singapore.
|
b)
|
Authority, Responsibilities, and Reporting.
Your authority, responsibilities and reporting relationships will correspond to your position and will include any particular authority, responsibilities and reporting relationships that any manager or officer of the Company to whom you report may assign to you from time to time.
|
c)
|
Performance.
You will devote substantially all of your business time and attention to the Company and will use good faith efforts to discharge your responsibilities under this Agreement to the best of your ability.
|
d)
|
Other Activities.
During your employment and subject to the terms of the Schedule, you may (1) serve on corporate, civic or charitable boards or committees, (2) manage personal investments, or (3) engage in any other permitted activity stated in your Schedule,
so long as
these activities, whether individually or in the aggregate, do not materially interfere with your performance of your responsibilities under this Agreement.
|
e)
|
Incorporation of Employee’s Agreement.
The terms of Eastman Kodak Company Employee’s Agreement, attached hereto as Exhibit 1, are incorporated by reference and you agree to abide by all such terms.
|
4.
|
Your Compensation
|
a)
|
Salary.
You will receive an annual base salary (your “
Salary
”). Commencing on the Effective Date, the starting amount of your Salary will be the amount set forth in your Schedule. Your Salary will be paid in accordance with the Company’s normal practices for similarly situated executives.
|
b)
|
Annual Incentive.
You will be eligible to participate in the Company’s short-term variable pay plan for its management level employees, known as Executive Compensation for Excellence and Leadership (“EXCEL”) (your “
Annual Incentive
”). Your annual target award under EXCEL will be determined in accordance with your Schedule. Any actual award in a given annual performance period will depend upon performance against corporate goals selected by management and approved by the appropriate committee of the Board and will be paid in the discretion of such committee. The terms of the EXCEL plan itself govern and control all interpretations of the plan.
|
c)
|
Sign-On Award.
On or shortly after the Effective Date, you will be granted the sign-on award stated in your Schedule, which will be subject to the terms and conditions set forth in the applicable award notice. This award is stated on your Schedule in terms of US dollar ($) value. The actual number of restricted stock units you will be granted is calculated by dividing the dollar value of your award by the closing price of the Company’s stock on the New York Stock Exchange on the date of grant.
|
d)
|
Long-Term Incentive Awards.
You will be eligible to participate in the Company’s Long-Term Incentive (LTI) program under the Eastman Kodak Company 2013 Omnibus Incentive Plan (the “
Omnibus Plan
”). The amount and form of any award (the “
Long-Term Equity Award
”) to be granted to you will be determined by the Company in accordance with the terms of the Omnibus Plan and your Schedule. The specific terms, conditions and restrictions on any Long-Term Equity Award will be contained in the Administrative Guide and Award Notice delivered to you within twenty (20) business days of the grant date.
|
5.
|
Your Benefits
|
a)
|
Employee Benefit Plans.
During the Scheduled Term, you will be entitled to participate in each of the Company’s Singapore employee benefit plans available to employees of the Company or its subsidiaries who are based in Singapore, on a basis that is at least as favorable as that provided to similarly situated executives of the Company or its subsidiaries in Singapore.
|
b)
|
Vacation.
You will be entitled to paid annual vacation in accordance with your Schedule.
|
c)
|
Business Expenses.
You will be reimbursed for all reasonable business expenses incurred by you in performing your responsibilities under this Agreement, subject to the terms of applicable Company reimbursement policies as in effect from time to time.
|
d)
|
Additional Benefits.
During your employment, you will be provided any additional benefits stated in your Schedule.
|
6.
|
Employment Preconditions
|
7.
|
Termination of Your Employment
|
a)
|
No Reason Required.
Neither you nor the Company is under any obligation to continue your employment. In addition, you or the Company may terminate your employment at any time for any reason, or for no reason, subject to compliance with Section 7(c).
|
b)
|
Related Definitions
.
|
1.
|
“
Cause
” means any of the following: (A) your continued failure, for a period of at least 30 calendar days following a written warning, to perform your duties in a manner deemed satisfactory by your supervisor, in the exercise of his or her sole discretion; (B) your failure to follow a lawful written directive of the Chief Executive Officer, your supervisor or the Board of Directors of the Company; (C) your willful violation of any material rule, regulation, or policy that may be established from time to time for the conduct of the Company’s business; (D) your unlawful possession, use or sale of narcotics or other controlled substances, or performing job duties while illegally used controlled substances are present in your system; (E) any act or omission or commission by you in the scope of your employment (a) which results in the assessment of a civil or criminal penalty against you or the Company, or (b) which in the reasonable judgment of your supervisor could result in a material violation of any foreign or U.S. federal, state or local law or regulation having the force of law; (F) your conviction or of plea of guilt or no contest to any crime involving moral turpitude; (G) any misrepresentation of a material fact to, or concealment of a material fact from, your supervisor or any other person in the Company to whom you have a reporting relationship in any capacity; or (H) your breach of the Company’s Business Conduct Guide or the Eastman Kodak Company Employee’s Agreement.
|
2.
|
“
Good Reason
” means any of the following: (A) a material diminution in your total target cash compensation, comprised of your Salary and target Annual Incentive; (B) a material diminution in your authority or responsibilities as provided in Section 3(b); (C) any material breach of this Agreement by the Company; or (D) any purported termination by the Company of your employment other than as expressly permitted by this Agreement; or (E) a Change of Control (as defined below) event followed by your involuntary termination (as determined by the Board or the appropriate committee of the Board) within two years of the Change of Control event.
|
3. |
“
Disability
” means meeting the definition of disability under the terms of the Kodak Long-Term Disability Plan and receiving benefits under such plan, where such a plan exists.
|
4. |
“
Willful
” means any act done or omitted to be done not in good faith and without reasonable belief that such action or omission was in the best interest of the Company.
|
a)
|
any “person” (as such term is defined in Section 3(a)(9) of the Securities Exchange Act of 1934 (
“Exchange Act”
) and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), is or becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of the Company’s securities representing 50% or more of the combined voting power of the Company’s then outstanding securities eligible to vote for the election of the Board (“Company Voting Securities”); provided, however, that the event described in this paragraph (a) shall not be deemed to be a Change of Control by virtue of an acquisition of Company Voting Securities: (i) by the Company or any Subsidiary, (ii) by any beneficial owner of the Company’s securities as of the Effective Date, (iii) by any employee benefit plan (or related trust) sponsored or maintained by Company or any Subsidiary, (iv) by any underwriter temporarily holding securities pursuant to an offering of such securities or (v) pursuant to a Non-Qualifying Transaction (as defined in paragraph (b) of this definition);
|
b)
|
the consummation of a merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company that requires the approval of the Company’s shareholders, whether for such transaction or the issuance of securities in the transaction (a “Business Combination”), unless immediately following such Business Combination: (i) more than 50% of the total voting power of (x) the entity resulting from such Business Combination (the “Surviving Entity”), or (y) if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of at least 95% of the voting power, is represented by Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which such Company Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the holders thereof immediately prior to the Business Combination, (ii) no person (other than any employee benefit plan (or related trust) sponsored or maintained by the Surviving Entity or the parent), is or becomes the beneficial owner, directly or indirectly, of 50% or more of the total voting power of the outstanding voting securities eligible to elect directors of the parent (or, if there is no parent, the Surviving Entity) and (iii) at least a majority of the members of the board of directors of the parent (or, if there is no parent, the Surviving Entity) following the consummation of the Business Combination were Incumbent Directors at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination (any Business Combination which satisfies all of the criteria specified in (i), (ii) and (iii) of this paragraph (b) shall be deemed to be a “Non-Qualifying Transaction”);
|
c)
|
the consummation of a sale of all or substantially all of the Company’s assets (other than to an Affiliate); or
|
d)
|
approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
|
c)
|
Advance Notice Generally Required
.
|
1.
|
To terminate your employment, either you or the Company must provide a Termination Notice to the other. A “
Termination Notice
” is a written notice that states the specific provision of this Agreement on which termination is
based, including, if applicable, the specific clause of the definition of Cause or Good Reason and a reasonably detailed description of the facts that permit termination under that clause;
provided
, that the failure to include any fact
in a Termination Notice that contributes to a showing of Cause or Good Reason does not preclude either party from asserting that fact in enforcing its rights under this Agreement. If you do not give a Termination Notice within 90
days after you have knowledge that an event constituting Good Reason has occurred, the event will no longer constitute Good Reason. In addition, you must give the Company 30 days to cure the first event constituting Good Reason.
|
2.
|
You and the Company agree to provide 30 days’ advance Termination Notice of any termination,
unless
your employment is terminated by the Company for Cause or because of your Disability or death. If you die or become
Disabled after you provide a valid Termination Notice with Good Reason or the Company provides Termination Notice without Cause, your termination will be treated as a termination with Good Reason or without Cause, effective
as of the date of your Disability or death.
|
d)
|
With Good Reason or Without Cause.
If, during your employment, the Company terminates your employment without Cause or you terminate your employment for Good Reason:
|
1.
|
The Company will pay you the following at the end of your employment: (A) your accrued but unpaid Salary through the last day of your employment, (B) your Salary for any accrued but unused vacation, and (C) any accrued expense reimbursements and other cash entitlements (including for accrued expense reimbursement for which supporting documentation is submitted within 30 days after termination of your employment) (together, your “
Accrued Compensation
”). In addition, the Company will
timely pay you any amounts and provide you any benefits that are required, or to which you are entitled, under any plan, contract or arrangement of the Company as of the end of your employment (together, the “
Other Benefits
”)
|
2.
|
The Company will pay you severance (“
Severance Payments
”) in an amount equal to your Salary, multiplied by the severance multiplier on your Schedule (“
Severance Multiplier
”).
|
3.
|
Your Annual Incentive will be governed by the terms of the EXCEL plan and any applicable Administrative Guide or Award notice.
|
4.
|
Your Long-Term Equity Awards will be governed by the terms of the Omnibus Plan and any applicable Administrative Guide and/or Award Notice.
|
e)
|
For Cause or without Good Reason.
If the Company terminates your employment for Cause or you terminate your employment without Good Reason, the Company will pay your Accrued Compensation and your Other Benefits. Effective upon the date of termination for Cause or without Good Reason, all of the unvested portion of your remaining equity would be immediately forfeited.
|
f)
|
For Your Disability or Death.
If your employment terminates as a result of your Disability or death, the Company will pay your Accrued Compensation, Earned Annual Incentive and will provide Continued Vesting of your Long Term Incentive Awards in accordance with the terms of the applicable awards, without regard to any continued employment condition, and your Other Benefits.
|
g)
|
Benefits Bearing.
In no event shall any of the severance payments or benefits provided under this Section 7 be “benefits bearing.”
|
h)
|
Clawback.
In the event you breach any of the terms in the Eastman Kodak Company Employee’s Agreement, this Agreement or the release described in Section 7(i) below, in addition to and not in lieu of any other remedies that the Company may pursue against you, no further Severance Payments will be made to you pursuant to this Section 7 and you agree to immediately repay to the Company all moneys previously paid to you pursuant to this Section 7.
|
i)
|
Timing.
The benefits provided in this Section 7 will begin at the end of your employment, and any cash payments owed to you under this Section 7 will be paid in one lump sum 65 days following your date of termination, except for Severance Payments, which will be made consistently with the Company’s normal payroll cycles and begin as soon as administratively practicable after your separation from service. Notwithstanding the foregoing, any Severance Payments owed to you and any Continued Vesting of your Long Term Incentive Awards will only be provided if, at the time of your termination, you provide a release of any and all claims you may have against the Company (other than the rights and benefits provided in Section 5 and the other rights under this Agreement that continue following your employment) in a form reasonably provided by the Company such that you have taken all action necessary for such release to become effective and irrevocable no later than 65 days following your date of termination. You agree that if you become eligible for Severance Payments under this Agreement you will not be entitled to any local severance provisions offered to other Singapore-based employees. Should a court
nonetheless award you severance benefits in such circumstances, you agree that the amount of severance payments will be reduced by such award and be immediately repaid to the Company.
|
8.
|
Confidential Information
|
9.
|
On-going Restrictions on Your Activities
|
a)
|
Related Definitions
.
|
1.
|
“
Competitive Enterprise
” means any business enterprise that derives more than 20% of its revenue from any activity that competes anywhere with any activity that the Company is then engaged in and which activity generates more than 10% of the Company’s revenue.
|
2.
|
“
Client
” means any client or prospective client of the Company to whom you provided services, or for whom you transacted business, or whose identity became known to you in connection with your relationship with or employment by the Company.
|
3.
|
“
Solicit
” means any direct or indirect communication of any kind, regardless of who initiates it, that in any way invites, advises, encourages or requests any person to take or refrain from taking any action.
|
4.
|
For purposes of this Section 9, “
Company
” means Eastman Kodak Company and its subsidiaries.
|
b)
|
Your Importance to the Company and the Effect of this Section 9
. You acknowledge that:
|
1.
|
In the course of your involvement in the Company’s activities, you will have access to Confidential Information and the Company’s client base and will profit from the goodwill associated with the Company. On the other hand, in view of your access to Confidential Information and your importance to the Company, if you compete with the Company for some time after your employment, the Company will likely suffer significant harm. In return for the benefits you will receive from the Company and to induce the Company to enter into this Agreement, and in light of the potential harm you could cause the Company, you agree to the provisions of this Section 9. The
Company would not have entered into this Agreement if you did not agree to this Section 9.
|
2.
|
This Section 9 may limit your ability to earn a livelihood in a Competitive Enterprise and your relationship with Clients. You acknowledge, however, that complying with this Section 9 will not result in severe economic hardship for you or your family.
|
c)
|
Transition Assistance.
During the 90 days after a Termination Notice has been given, you will take all actions the Company may reasonably request to maintain for the Company the business, goodwill and business relationships with any Clients.
|
d)
|
Non-Competition.
During your employment and for a period of eighteen (18) months following the end of your employment you agree that you will not directly or indirectly engage in (whether as an employee, consultant, agent, proprietor, principal, partner, stockholder, corporate officer, director or otherwise), nor have any material ownership interest in or participate in the financing, operation, management or control of a Competitive Enterprise.
|
e)
|
Non-Solicitation of Clients.
Until the end of the 18 month period following the end of your employment, you will not attempt to Solicit any Client to transact business with a Competitive Enterprise or to reduce or refrain from doing any business with the Company or interfere with or damage any relationship between the Company and a Client.
|
f)
|
Non-Solicitation of Company Employees.
Until the end of the 18 month period following the end of your employment, you will not attempt to Solicit anyone who is then an employee or consultant of the Company (or who was an employee or consultant of the Company within the prior six months) to resign from or cease to provide services to the Company or to apply for or accept employment with any Competitive Enterprise.
|
g)
|
Notice to New Employers.
Before you accept employment with any other person or entity while this Section 9 is in effect, you will provide the prospective employer with written notice of the provisions of this Section 9 and will deliver a copy of the notice to the Company.
|
h)
|
Terms of this Section Control
. In the event of any inconsistency between the terms of this Section 9 and your Eastman Kodak Company Employee’s Agreement, the terms of this Section 9 shall control.
|
10.
|
Effect on Other Agreements
|
a)
|
Effect on Other Agreements; Entire Agreement.
This Agreement is the entire agreement between you and the Company with respect to the relationship contemplated by this Agreement and supersedes any earlier agreement, written or oral, with respect to the subject matter of this Agreement. In entering into this Agreement, no party has relied on or made any representation, warranty, inducement, promise or understanding that is not in this Agreement.
|
11.
|
Successors
|
a)
|
Assignment by You.
You may not assign this Agreement without the Company’s consent. Also, except as required by law, your right to receive payments or benefits under this Agreement may not be subject to execution, attachment, levy or similar process. Any attempt to effect any of the preceding in violation of this Section 11, whether voluntary or involuntary, will be void.
|
b)
|
Assumption by any Surviving Company.
Before the effectiveness of any merger, consolidation, statutory share exchange or similar transaction (including an exchange offer combined with a merger or consolidation) involving the Company (a “
Reorganization
”) or any sale, lease or other disposition (including by way of a series of transactions or by way of merger, consolidation, stock sale or similar transaction involving one or more subsidiaries) of all or substantially all of the Company’s consolidated assets (a “
Sale
”), the Company will cause (1) the Surviving Company to unconditionally assume this Agreement in writing and (2) a copy of the assumption to be provided to you. After the Reorganization or Sale, the Surviving Company will be treated for all purposes as the Company under this Agreement. The “
Surviving Company
” means (A) in a Reorganization, the entity resulting from the Reorganization or (B) in a Sale, the entity that has acquired all or substantially all of the assets of the Company.
|
12.
|
General Provisions
|
a)
|
Administrator.
All compensation and benefits provided under this Agreement will be administered by the Chief Human Resources Officer for the Company (the “
Administrator
”).
The Administrator will have total and exclusive responsibility to control, operate, manage and administer such compensation and benefits in accordance with their terms and all the authority that may be necessary or helpful to enable him to discharge his responsibilities with respect to them. Without limiting the generality of the preceding sentence, the Administrator will have the exclusive right to: interpret this Agreement, decide all questions concerning eligibility for and the amount of compensation and benefits payable, construe any ambiguous provision, correct any default, supply any omission, reconcile any inconsistency, and decide all questions arising in the administration, interpretation and application of this Agreement. The Administrator will have full discretionary authority in all matters related to the discharge of his responsibilities and the exercise of his authority, including, without limitation, his construction of the terms of this Agreement and his determination of eligibility for compensation and benefits. It is the intent of the parties hereto, that the decisions of the Administrator and his actions with respect to this Agreement will be final and binding upon all persons having or claiming to have any right or interest in or under this Agreement and that no such decision or actions shall be modified upon judicial review unless such decision or action is proven to be arbitrary or capricious.
|
b)
|
Withholding
. You and the Company will treat all payments to you under this Agreement as compensation for services. Accordingly, the Company may withhold from any payment any taxes that are required to be withheld under any law, rule or regulation
|
c)
|
Confidentiality
. You agree to keep the existence and terms of this Agreement confidential except that you may review it with your financial advisor, attorney, or spouse/partner and with the Administrator.
|
d)
|
Severability.
If any provision of this Agreement is found by any court of competent jurisdiction (or legally empowered agency) to be illegal, invalid or unenforceable for any
reason, then (1) the provision will be amended automatically to the minimum extent necessary to cure the illegality or invalidity and permit enforcement and (2) the remainder of this Agreement will not be affected. In particular, if any provision of Section 8 is so found to violate law or be unenforceable because it applies for longer than a maximum permitted period or to greater than a maximum permitted area, it will be automatically amended to apply for the maximum permitted period and maximum permitted area.
|
e)
|
No Set-off or Mitigation.
Your and the Company’s respective obligations under this Agreement will not be affected by any set-off, counterclaim, recoupment or other right you or any member of the Company may have against each other or anyone else (except as this Agreement specifically states). You do not need to seek other employment or take any other action to mitigate any amounts owed to you under this Agreement, and those amounts will not be reduced if you do obtain other employment.
|
f)
|
Notices.
All notices, requests, demands and other communications under this Agreement must be in writing and will be deemed given (1) on the business day sent, when delivered by hand or facsimile transmission (with confirmation) during normal business hours, (2) on the business day after the business day sent, if delivered by a nationally recognized overnight courier or (3) on the third business day after the business day sent if delivered by registered or certified mail, return receipt requested, in each case to the following address or number (or to such other addresses or numbers as may be specified by notice that conforms to this Section 12(f)):
|
g)
|
Amendments and Waivers.
Any provision of this Agreement may be amended or waived but only if the amendment or waiver is in writing and signed, in the case of an amendment, by you and the Company or, in the case of a waiver, by the party that would have benefited from the provision waived. Except as this Agreement otherwise provides, no failure or delay by you or the Company to exercise any right or remedy under this Agreement will operate as a waiver, and no partial exercise of any right or remedy will preclude any further exercise.
|
h)
|
Jurisdiction; Choice of Forum; Costs
. You and the Company irrevocably submit to the exclusive jurisdiction of any state or federal court located in the County of New York over any controversy or claim arising out of or relating to or concerning this Agreement or any aspect of your employment with the Company (together, an “
Employment Matter
”). Both you and the Company (1) acknowledge that the forum stated in this Section 11(h) has a reasonable relation to this Agreement and to the relationship between you and the Company and that the submission to the forum will apply even if the forum chooses to apply non-forum law, (2) waive, to the extent permitted by law, any objection to personal jurisdiction or to the laying of venue of any action or proceeding covered by this
Section 12(h) in the forum stated in this Section, (3) agree not to commence any such action or proceeding in any forum other than the forum stated in this Section 12(h) and (4) agree that, to the extent permitted by law, a final and non-appealable judgment in any such action or proceeding in any such court will be conclusive and binding on you and the Company. However, nothing in this Agreement precludes you or the Company from bringing any action or proceeding in any court for the purpose of enforcing the provisions of this Section 12(h). To the extent permitted by law, the Company will pay or reimburse any reasonable expenses, including reasonable attorney’s fees, you incur as a result of any Employment Matter.
|
i)
|
Governing Law.
This Agreement will be governed by and construed in accordance with the law of the State of New York.
|
j)
|
Counterparts.
This Agreement may be executed in counterparts, each of which will constitute an original and all of which, when taken together, will constitute one agreement.
|
1.
|
Nondisclosure
|
2.
|
Assignment of Rights
|
2.1
|
I hereby sell, assign and transfer to Kodak all of my right, title and interest in and to all Rights that, during my employment by Kodak and within two (2) years following termination of my employment from Kodak, are made or conceived by me, alone or with others, that (i) are within or arise out of any general field of the Kodak Business in which I have been employed or have worked during my employment by Kodak; or (ii) arise out of any work I perform or information I received regarding the Kodak Business which I received while employed by Kodak; or (iii) arise from work that Kodak authorizes me to perform for or on behalf of any person or entity affiliated with Kodak.
|
2.2
|
While employed in California, no employee will be required to make an assignment of any invention to the extent prohibited by California Labor Code §2870(a) (a copy of which will be made available to any employee upon request).
|
2.3
|
I will fully disclose to Kodak as promptly as available all information known or possessed by me concerning the Rights referred to in the preceding section 2.1, and upon request by Kodak and without any further remuneration in any form to me by Kodak, but at the expense of Kodak, execute all applications for patents and for copyright registrations, assignments thereof and other instruments and do all things which Kodak deems necessary to vest and maintain in it the entire right, title and interest in and to all such Rights.
|
3.1
|
The restrictions contained in this section 3 will apply during my employment by Kodak and continue after the termination of my employment for any reason (whether voluntary or involuntary or with or without cause) for a period equal to the total number of months I was employed by Kodak, whether continuously or not, but not for fewer than six (6) months nor more than eighteen (18) months after such termination (the “Post Employment Period”).
|
3.2
|
During the period described in section 3.1 following termination of my employment by Kodak, I will, prior to accepting employment with a Competing Business (as defined in section 3.3), inform that Competing Business of the existence of this Agreement and provide a copy to that Competing Business.
|
3.3
|
While employed by Kodak and during the Post-Employment Period, I will not work, be employed by, consult, advise, assist or engage in any business or activity that: (a) competes with any area of the Kodak Business in or with which I worked at Kodak (a “Competing Business”) during the two (2) years immediately preceding termination of my Kodak employment; and (b) involves subject matter(s) about which I gained Kodak Confidential Information during the two (2) years immediately preceding termination of my Kodak employment. Prior to accepting employment, working, consulting, advising or assisting in or with any Competing Business, I agree to: (a) provide such Competing Business with a copy of this Agreement: (b) advise my Kodak supervisor or an appropriate Kodak Human Resources representative of my intent to accept such position; and (c) at Kodak’s request, to provide information and/or facilitate Kodak’s communication with such Competing Business concerning the nature, scope and responsibilities of such position.
|
3.4
|
During the Post-Employment Period, the restrictions of section 3.3 will apply only to my work or activities within the relevant geographic area(s) or with the accounts, as defined in this section.
|
3.4.1
|
If I was employed by Kodak in a sales or service job immediately prior to the termination of my employment, and if my responsibilities were confined to specific territories, accounts, or regions, then the restrictions will apply to: (a) any and all sales or service territories, or regions in which I worked within the two (2) years prior to termination of my employment and, (b) the then existing accounts and prospective accounts of Kodak with which I worked within the two (2) years immediately preceding termination of my employment with Kodak.
|
3.4.2
|
If, immediately prior to the termination of my Kodak employment: (a) I was employed by Kodak in a sales or service job and my responsibilities were not confined to specific territories, accounts or regions, or (b) if I was employed by Kodak in any other capacity, then the relevant geographic area(s) will consist of the United States and any other country to which my responsibilities extended, unless a narrower geographic area would be sufficient to protect from disclosure the Kodak Confidential Information of which I have knowledge.
|
3.4.3
|
I understand and agree that the foregoing geographic restrictions are necessary in light of the international scope of the Kodak Business and the business of Kodak’s competitors, and that the disclosure or use anywhere of Kodak Confidential Information to or for the benefit of a Competing Business would irreparably harm Kodak.
|
3.4.4
|
If during the Post-Employment Period, this Agreement prohibits me from accepting an offer of full-time employment consistent with my skills, abilities, and education solely because of the provisions of this section 3, and if I provide to Kodak proof of such offer and rejection, the provisions of this section 3 shall thereafter continue to bind me only as long as Kodak pays me, for each month in which I am unable to secure a position consistent with my skills, abilities, and education, an amount equal to 1/12th of my annual total target compensation at the time of termination (exclusive of employee benefits, non-recurring bonuses, vacation pay and/or other special compensation), less any severance, separation or termination benefits or the like that I am entitled to receive from Kodak for the same pay period, and less any compensation I receive during the same period in the form of unemployment insurance or in exchange for any employment, consulting or other work I have undertaken. Any such payments will also be less all amounts that Kodak is required by law to withhold. Notwithstanding anything in this Agreement to the contrary, I understand that if Kodak declines or ceases to make one or more payments to me due to my failure to comply with the restrictions and obligations I have agreed to under the terms of this Agreement, or for any of the reasons enumerated in Section 3.4.6 below, I will not be excused from, and will continue to be subject to, all of the restrictions and obligations set forth in this section 3.
|
3.4.5
|
In return for any payments made by Kodak under section 3.4.4, I agree to make conscientious, aggressive and continuing efforts to find other employment or income consistent with my skills, abilities and education but not prohibited by this section 3. Within seven (7) days of Kodak’s request, I will provide documentation satisfactory to Kodak of my efforts to obtain employment or income, all employment, contracting, or consulting offers I have received during the Post-Employment Period, the amount of any income received from employment (including self-employment), contracting, consulting, or any other work performed by me, and the identity of the employer offering employment, or other entity requesting contracting or consulting services or other work, and any other information or documents reasonably necessary for Kodak to verify my income and employment status.
|
3.4.6
|
Kodak, at its option and sole discretion, may decline to make post-employment compensation payments:
|
|
(1) for any month during which I, in the reasonable determination of Kodak, have not conscientiously sought employment, or
|
|
(2) for any month during which I have failed to provide documentation requested by Kodak, as provided for above, or
|
|
(3) if I breach this Agreement or any other post-employment obligations I may owe Kodak; or
|
|
(4) if I reject an offer of employment that Kodak does not deem to be in violation of section 3.3 above; or
|
|
(5) by giving me written permission to accept available employment or by giving me a written release from some or all of the obligations of section 3 of this Agreement (in which case, the terms of
such release shall govern my obligations for the remainder of the Post-Employment Period); or
|
|
(6) if I am terminated from Kodak or any subsequent employment, contracting, or consulting engagement “for cause,” which as defined herein includes, but is not limited to, the following:
|
·
|
neglect of duties, failure to follow policies or supervisor’s directives, or insubordination;
|
·
|
dishonesty, deception, fraud, or breach of trust or loyalty in connection with the affairs of an employer;
|
·
|
conviction of any felony, gross misdemeanor, or misdemeanor, other than a minor traffic offense;
|
·
|
any act or omission in the scope of employment that places an employer in violation of any applicable law or regulation; or
|
·
|
breach of any of the material terms or conditions contained in this Agreement.
|
|
3.5 I understand that this section 3 will not be effective at any time during which I am employed by Kodak in the State of California.
|
|
During my Kodak employment and for a period of one (1) year after termination of my employment for any reason (whether voluntarily or involuntarily or with or without cause), I will not, directly or indirectly, either for myself or for the benefit of any other person or entity: (i) induce or attempt to induce any employee of Kodak to leave the employ of Kodak, (ii) in any way interfere with the relationships between Kodak and any employee of Kodak, (iii) employ or otherwise engage as an employee, independent contractor or otherwise, any person who has been an employee of Kodak during the six months immediately preceding such employment or (iv) solicit, entice, call upon or in any way for the purpose of diverting or taking away or attempting to divert or take away any of Kodak’s customers and suppliers to do business with a Competing Business.
|
5.
|
Return of Property
|
|
I agree that, upon termination of my employment for any reason (whether voluntary or involuntary or with or without cause), I will immediately return to Kodak, (i) all Kodak Confidential Information in any form (including without limitation printed, handwritten, and electronically-stored materials or information), together with all copies, thereof, within my possession, custody or control and; (ii) all other Kodak property in my possession, custody or control, including, but not limited to, office keys, identification badges or passes, Kodak credit cards, automobiles, computer equipment and software (“Kodak Property”). Under no circumstances will I deliver or give such Kodak Confidential Information or Kodak Property to any person or entity without Kodak management’s advance written permission and, upon Kodak’s request, I will verify that I have not done so.
|
6.
|
At-Will Employment
|
|
I understand that, regardless of any statement made to me or contained in any handbook, policy statement, or other document, my employment will be “at-will”. That is, I will be free to terminate my employment at any time, for any reason, and Kodak is free to do the same. No other agreement relating to this issue will be effective unless it is contained in a written agreement which: (1) mentions me by name; (2) references this Agreement by name and date; (3) specifically acknowledges that it is intended to amend this Agreement; and (4) is signed by a Kodak corporate officer and me.
|
7.
|
Business Conduct
|
|
I understand that Kodak is an ethical company and that I am required to adhere to Kodak’s policies and procedures regarding ethical business practices, including but not limited to, Kodak’s conflict of interest policy and policies concerning the protection of Kodak Confidential Information. I understand that my failure to do so constitutes a breach of this Agreement.
|
8.
|
Miscellaneous
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8.1 I agree that Kodak has provided me with valuable consideration for accepting the terms and conditions set forth in this Agreement, including those set forth in section 3. Among other things, that consideration includes my employment and/or continued employment and certain benefits to be received by me in connection with such employment, some of which may be conditioned upon a validly executed Employee’s Agreement.
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8.2 This Agreement replaces any and all previous agreements relating to the same or similar matters that I may have entered into with Kodak with respect to my present or any future period of employment by Kodak. Further, the terms of this Agreement shall inure to the benefit of the successors and assigns of Kodak and shall be binding upon my heirs, assigns, administrators and representatives. No oral agreement, statement or representation shall be effective to alter the terms of this Agreement.
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8.3 I understand and agree that a breach of the provisions of this Agreement will cause Kodak irreparable injury that may not be compensable by receipt of money damages. I, therefore, expressly agree that Kodak shall be entitled, in addition to any other remedies legally available, to injunctive and/or other equitable relief, including but not limited to temporary, preliminary and/or permanent injunctive relief, to prevent or remedy a breach of this Agreement, or any part hereof, and to payment of reasonable attorneys fees it incurs in enforcing this Agreement.
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8.4 If any one or more of the provisions of this Agreement shall be found to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. If any one or more of the provisions of this Agreement is for any reason held unacceptably broad, it shall be construed or rewritten (blue-lined) so as to be enforceable to the extent of the greatest protection to Kodak under existing law.
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8.5 All titles or headings in this agreement are for convenience only and shall not affect the meaning of any provision herein.
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8.6 THIS AGREEMENT IS ENTERED INTO IN THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO PRINCIPALS OF CONFLICT OF LAWS. I UNDERSTAND AND AGREE THAT ANY ACTION OR PROCEEDING UNDER, IN CONNECTION WITH OR RELATING TO, THIS AGREEMENT SHALL BE BROUGHT IN AND ADJUDICATED BY THE UNITED STATES DISTRICT COURT, WESTERN DISTRICT OF NEW YORK IN ROCHESTER, NEW YORK, UNLESS THERE IS NO BASIS FOR FEDERAL JURISDICTION, IN WHICH CASE SUCH ACTION OR PROCEEDING SHALL BE BROUGHT IN AND ADJUDICATED BY THE STATE OF NEW YORK, SUPREME COURT, COUNTY OF MONROE.
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___________________________________
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__________________
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Signature of Employee
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Global I.D.
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___________________________________
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____________________
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Employee Name (Print or Type)
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____________________
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Address
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Position
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Director, Global Sales Strategy, and Senior Vice President, Eastman Kodak Company
1
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Base Salary
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SGD 600,000
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Annual Cash Performance Incentive under Company’s Executive Compensation for Excellence and Leadership (EXCEL) Plan
2
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The target level for your Annual Incentive will be
50
%
of your Base Salary.
The maximum payout under the EXCEL Plan is 200%.
Total Target Cash Compensation is
SGD 900,000
.
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Initial Sign-on Grant
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$450,000
in Restricted stock Units (RSUs), granted on the Effective Date of your agreement with vesting over a three-year period (33.3% vests each year)
(
SGD 562,500
).
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Long-Term Incentive Compensation
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Target award for annual equity
grant:
$250,000
3
(SGD 312,500)
Total Direct Compensation is
SGD 1,212,500
(Total Target Cash plus Annual Equity Awards).
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Housing Allowance and Travel Expenses
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Local Singapore Practice
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Severance Multiplier
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1X
Base Salary
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Change of Control
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In the case of a Change of Control event followed by an involuntary termination
4
within two years following the Change of Control, severance would be paid after the 409(a) waiting period.
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Additional Benefits
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Up to four weeks vacation.
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Standard Benefits
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Local Singapore Practice
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Exhibit (31.1)
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1)
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I have reviewed this Form 10-Q;
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2)
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3)
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4)
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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5)
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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Chief Executive Officer
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Exhibit (31.2)
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1)
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I have reviewed this Form 10-Q;
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2)
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3)
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4)
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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5)
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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Exhibit (32.1)
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CERTIFICATION PURSUANT TO
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18 U.S.C. Section 1350,
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AS ADOPTED PURSUANT TO
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SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
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CERTIFICATION PURSUANT TO
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18 U.S.C. Section 1350,
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AS ADOPTED PURSUANT TO
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SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
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/s/John N. McMullen
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