Exhibit (99.3)
February 28, 2007
Xx. Xxxxx X. Xxxxxxx
(address intentionally omitted)
Re: First Amendment to August 12, 2003 Letter Agreement
Dear Xxx:
By way of a letter agreement dated August 12, 2003 (the "Agreement"),
Xxxxxxx Kodak Company ("Kodak") and you agreed to certain terms
regarding your employment. The purpose of this letter is to amend the
Agreement as set forth herein, for such consideration as the parties
acknowledge is mutually sufficient. Any defined term used in this
letter agreement, unless otherwise defined herein, will have the same
meaning as that ascribed to it under the Agreement.
1. Individual Bonus Plan
A. In General. You will be eligible to participate in an
individual bonus plan (the "Plan") based on the performance of
the Company's Graphic Communications Group during the period
commencing January 1, 2007 and ending December 31, 2007. The
purpose of this Plan is to incent you to achieve certain pre-
established goals in the Graphic Communications Group during
the year. Your maximum award under the Plan for the one-year
period will be $300,000. The plan will be performance-based
and, therefore, any payment under the Plan will be contingent
upon satisfaction of the Plan's performance goals. The "Bonus
Administrator" (as defined in Subsection G below), with your
input, will provide you with a detailed description of all of
the terms and conditions of the Plan (the "Plan Description").
This section describes several of the Plan's major features.
B. Maximum Performance Goals. "Maximum performance goals" will be
established for the year. To receive the entire amount of the
maximum award for the year, it will be necessary for you to
achieve 100% of this established "maximum performance goals".
The "maximum performance goals" for the year will be established
by the Bonus Administrator, with your input, in a manner similar
to the manner in which business unit goals are established under
ACP and EXCEL.
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C. Minimum Performance Goals. If you do not achieve the "maximum
performance goals" for the year, you may nevertheless receive
a portion of the maximum award for the year if you achieve at
least the Plan's "minimum performance goals" for the year.
"Minimum performance goals" will be established by the Bonus
Administrator, with your input. If you achieve for the year
at least the "minimum performance goals", you will receive a
portion of the maximum award for the year. The exact amount
of the award will be determined pursuant to the payment
methodology set forth in the Plan Description.
D. Maximum Award. The maximum award for the Plan's one-year
period is $300,000.
E. Continued Employment. Except as provided in Subsection (F)
below, in order to receive an award for the year, it will be
necessary for you to remain continuously employed by Kodak
through and including December 31, 2007. If prior to January
1, 2008, your employment terminates for any reason, other than
as set forth in Subsection (F) below, you will forfeit in
entirety the award for the year.
F. Termination Without Cause or For Good Reason. Notwithstanding
Subsection (E) above to the contrary, if prior to January 1,
2008 Kodak terminates your employment without Cause, you will
receive the maximum award available under the Plan, $300,000.
If you terminate employment for Good Reason prior to January
1, 2008, you will receive a pro-rated award for the year. The
amount of the pro-rated award will be determined from the
award earned for the year that you would have otherwise
received had you remained employed through December 31, 2007
and be based on the number of days you were employed by Xxxxx
during the year.
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G. Administration. The award will be administered by Xxxxx's
Chief Executive Officer (the "Bonus Administrator") in
accordance with the terms of this letter agreement and the
terms and conditions of the Plan Description. Within 45 days
of the completion of the year or as soon thereafter as is
administratively practicable (but not to exceed 90 days after
year end), the Bonus Administrator will determine whether you
have achieved the performance goal for the year and, if so,
the amount of the award that will be credited to you. The
Bonus Administrator will have total and exclusive
responsibility to control, operate, manage and administer the
Plan in accordance with its terms and all the authority that
may be necessary or helpful to enable him/her to discharge
his/her responsibilities with respect to the Plan. Without
limiting the generality of the preceding sentence, the Bonus
Administrator will have the exclusive right to: interpret the
Plan, decide all questions concerning eligibility for and the
amount of any award payable under the Plan, construe any
ambiguous provision of the Plan, correct any default, supply
any omission, reconcile any inconsistency, and decide all
questions arising in the administration, interpretation and
application of the Plan. The Bonus Administrator will have
full discretionary authority in all matters related to the
discharge of his/her responsibilities and the exercise of
his/her authority under the Plan, including, without
limitation, his/her construction of the terms of the Plan and
his/her determination of eligibility for an award under the
Plan. It is the intent of the Plan, as well as both parties
hereto, that the decisions of the Bonus Administrator and
his/her action with respect to the Plan will be final and
binding upon all persons having or claiming to have any right
or interest in or under the Plan and that no such decision or
actions shall be modified upon judicial review unless such
decision or action is proven to be arbitrary or capricious.
H. Payment. Any award earned by you for 2007 will be paid in a
lump sum cash payment by March 15, 2008. Kodak will withhold
from such payment all income, payroll and employment taxes
required by applicable law or regulation to be withheld.
I. Benefits Bearing. In no event will any award under the Plan be
"benefits bearing." In other words, the amount of the award
will not be taken into account, nor considered for any reason,
for purposes of determining any Company provided benefits or
compensation to which you are or may become eligible.
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2. Retirement Benefits
A. On page 8 of the Agreement, the sixth sentence in Section B of
the Section headed "Retirement Benefits" is hereby amended in
its entirety to read as follows: "By way of example, assuming
you complete six (6) or more full years of service with Kodak,
your account balance will be credited by $600,000."
B. On page 9 of the Agreement, Subsection (i) of Section E of the
Section headed "Retirement Benefits" is hereby amended in its
entirety to read as follows: "(i) be paid in the form of a
lump sum payment as soon as administratively practicable
following the six-month anniversary of your last day of work
(no interest will be paid during the six-month waiting
period);"
3. Miscellaneous
On page 16 of the Agreement, the Section headed "Miscellaneous" is
hereby amended to add the following paragraphs to the end of such
Section:
"The arrangements described in this letter agreement are intended to
comply with Section 409A of the Internal Revenue Code to the extent such
arrangements are subject to that law. The parties agree that they will
negotiate in good faith regarding amendments necessary to bring the
arrangements into compliance with the terms of that Section or an
exemption therefrom as interpreted by guidance issued by the Internal
Revenue Service; provided, however, that Kodak may unilaterally amend
this agreement for purposes of compliance if, in it's sole discretion,
Kodak determines that such amendment would not have a material adverse
effect with respect to your rights under the agreement. The parties
further agree that to the extent an arrangement described in this letter
fails to qualify for exemption from or satisfy the requirements of
Section 409A, the affected arrangement may be operated in compliance
with Section 409A pending amendment to the extent authorized by the
Internal Revenue Service. In such circumstances Kodak will administer
the letter in a manner which adheres as closely as possible to the
existing terms and intent of the letter while complying with Section
409A. This paragraph does not restrict Kodak's rights (including,
without limitation, the right to amend or terminate) with respect to
arrangements described in this letter to the extent such rights are
reserved under the terms of such arrangements.
To extent that the terms of this Agreement relate to a compensation or
benefit plan, such terms are subject to the provisions of the applicable
governing documents (such as plan documents, administrative guides and
award notices), which are subject to change.
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Except as otherwise provided herein, the benefits described in this
Agreement will be administered by the Kodak employee with the title
Director of Human Resources for Kodak ("Administrator"), in accordance
with the terms of this Agreement. The Administrator will have total and
exclusive responsibility to control, operate, manage and administer the
Agreement in accordance with its terms and all the authority that may be
necessary or helpful to enable him or her to discharge his or her
responsibilities with respect to such benefits. Without limiting the
generality of the preceding sentence, the Administrator will have the
exclusive right to: interpret the this Agreement, decide all questions
concerning eligibility for and the amount of benefits payable under this
Agreement (including, without limitation, whether Kodak has offered you
a reasonably comparable position for purposes of this Agreement),
construe any ambiguous provision of the this Agreement, correct any
default, supply any omission, reconcile any inconsistency, and decide
all questions arising in the administration, interpretation and
application of this Agreement. The Administrator will have full
discretionary authority in all matters related to the discharge of his
or her responsibilities and the exercise of his or her authority under
this Agreement, including, without limitation, his or her construction
of the terms of this Agreement and his or her determination of
eligibility for benefits under this Agreement. It is the intent of this
Agreement, as well as both parties hereto, that the decisions of the
Administrator and his or her actions with respect to this Agreement will
be final and binding upon all persons having or claiming to have any
right or interest in or under this Agreement and that no such decision
or actions shall be modified upon judicial review unless such decision
or action is proven to be arbitrary or capricious."
4. Remaining Terms of the Agreement
All of the remaining terms of the Agreement, to the extent that they are
not inconsistent with this letter agreement, will remain in full force
and effect, without amendment or modification.
Your signature below means that:
1. You have had ample opportunity to discuss the terms and
conditions of this letter agreement with an attorney and/or
financial advisor of your choice and as a result fully
understand its terms and conditions; and
2. You accept the terms and conditions set forth in this letter
agreement; and
3. This letter agreement supersedes and replaces any and all
agreements or understandings, whether written or oral, that
you may have had with the Company concerning the matters
discussed herein.
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If you find the foregoing acceptable, please sign your name on the
signature line provided below. Once the letter agreement is executed,
please return it directly to my attention.
Very truly yours,
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
RLB:gjg
I accept the terms and conditions of this letter agreement.
Signed: /s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Dated: February 28, 2007
