PROPOSAL 1
PROPOSAL 1 - ELECTION OF DIRECTORS
Our By-laws require us to have at least five but no more than 13 directors.
The number of directors, which is set by the Board, is currently seven. Mr. Continenza, our Executive Chairman and Chief Executive
Officer, is the only director who is an employee of the Company.
The following directors are standing for re-election, having been elected
at the 2021 Annual Meeting of Shareholders (2021 Annual Meeting), and have been recommended for nomination by the Compensation,
Nominating and Governance Committee: James V. Continenza, B. Thomas Golisano, Philippe D. Katz, Kathleen B. Lynch, Jason New,
Darren L. Richman and Michael E. Sileck, Jr. All nominees have consented to serve if elected.
Mr. Richman has served on the Board since April 2021 and is a designee
of Kennedy Lewis Investment Management LLC (KLIM). In connection with debt financing we obtained from Kennedy Lewis Capital Partners
Master Fund LP (KLIM Fund I) and Kennedy Lewis Capital Partners Master Fund II LP (KLIM Fund II and, collectively with KLIM Fund
I, the KLIM Lenders) pursuant to the Credit Agreement among the Company, the KLIM Lenders, as lenders, and Alter Domus (US) LLC,
as administrative agent (the Term Loan Credit Agreement), we agreed to appoint an individual designated by KLIM as a Board member
at or prior to the 2021 Annual Meeting. KLIM has the right to nominate one director at each subsequent shareholder meeting until
the earlier to occur of (i) February 26, 2024 or (ii) KLIM affiliated funds ceasing to hold at least 50% of the original principal
amount of the term loans and commitments under the Term Loan Credit Agreement. Until KLIM affiliated funds cease to hold at least
50% of the original principal amount of the term loans and commitments under the Term Loan Credit Agreement, at any time that
KLIM’s designated director is not serving on the Board, KLIM will have the right to designate a non-voting observer to the
Board.
Mr. Golisano is a nominee designated in connection with the Series C Preferred
Stock Purchase Agreement (the Series C Purchase Agreement) dated as of February 26, 2021, between the Company and GO EK Ventures
IV, LLC (GO EK Ventures), whereby GO EK Ventures has the contractual right to nominate one director to the Board. This nomination
right expires on February 26, 2024. Following February 26, 2024, if dividends on the Series C preferred stock are in arrears for
six or more consecutive or non-consecutive dividend periods, GO EK Ventures will be entitled to nominate one director at the next
annual shareholder meeting and all subsequent shareholder meetings until all accumulated dividends on such Series C preferred
stock have been paid in full in the form of additional shares of Series C preferred stock or the liquidation preference has been
increased by the amount of any unpaid dividends, at which time any such director serving on the Board shall resign. The foregoing
nomination rights will automatically terminate upon GO EK Ventures ceasing to directly or indirectly hold at least a majority
of the shares of the Series C preferred stock purchased or the common stock received upon the conversion of such shares. Such
nomination rights are exclusive to GO EK Ventures and do not transfer with the Series C preferred stock.
If elected, all of the nominees for director will serve a one year term
or until their successors are duly elected and qualified. Information about the director nominees is provided in the section entitled
“Board of Directors and Corporate Governance” in this Proxy Statement. If a nominee is unable to stand for election,
the Board may reduce the number of directors or choose a substitute. If the Board chooses a substitute, the shares represented
by proxies will be voted for the substitute. If a director retires, resigns, dies or is unable to serve for any reason, the Board
may reduce the number of directors or elect a new director to fill the vacancy.
Director nominees are elected by a majority of votes cast. Each director
nominee who receives more “FOR” than “AGAINST” votes cast for his or her election will be elected. If
a director nominee receives a greater number of votes “AGAINST” his or her election than votes “FOR” such
election, the Board will decide whether to accept the irrevocable letter of resignation the nominee submitted as a condition of
being nominated to the Board in accordance with our Majority Vote Policy.
The Board of Directors recommends a vote FOR the election of each of
the director nominees.
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
DIRECTOR NOMINEES
The Compensation, Nominating and Governance Committee and the Board seek
to ensure that the Board is composed of members who bring an appropriate mix of skills and experience across a variety of disciplines,
including strategic planning, organizational management, technology, corporate finance, mergers and acquisitions, marketing, digital
technologies, public policy, economics, executive compensation, risk management, international operations, corporate governance
and internal controls, each of which is an important area of responsibility for the Board and its committees.
The Board and the Compensation, Nominating and Governance Committee believe
that each of the director nominees possesses important experience and skills that provide the Board with an optimal balance of
leadership, competencies and qualifications in areas that are important to our company. Each of our director nominees has high
ethical standards, acts with integrity and exercises careful, mature judgment. Each is committed to employing his or her skills
and abilities to aid the long-term interests of our shareholders.
In addition to the biographical information in each director nominee’s
profile below, the Board and the Compensation, Nominating and Governance Committee considered the listed Key Experience, Skills
and other Qualifications in its evaluation and determination to nominate each director for re-election.
| JAMES V. CONTINENZA |
Director since April 2013, Chairman since September 2013, |
| |
Executive Chairman since February 2019, and Chief Executive Officer since July 2020 |
James V. Continenza, age 59, leads the transformation of Kodak as Executive
Chairman and Chief Executive Officer. He was appointed by the Board as Executive Chairman in February 2019 and as Chief Executive
Officer in July 2020. Mr. Continenza joined the Board of Kodak in April 2013 and became Chairman of the Board in September 2013.
From September 2012 through June 2021, Mr. Continenza served as the Chairman and Chief Executive Officer of Vivial Inc., a privately
held marketing technology and communications company. He has also held leadership roles at STi Prepaid, LLC, a telecommunications
company; Anchor Glass Container Corp., a leading manufacturer of glass containers; Teligent, Inc., a provider of communications
services including voice, data, and internet access; Lucent Technologies Product Finance, a global leader in telecom equipment;
and AT&T Inc., a telecommunications company.
In addition to his management experience, Mr. Continenza currently serves
on the board of directors of Cenveo Corporation, an industry leader in transformative publishing solutions. He has also served
on the boards of directors of Datasite LLC (formerly known as Merrill Corporation), NII Holdings, Inc., Tembec, Inc. and Neff
Corporation. He also serves or has served on the boards of a number of private companies.
Key Experience, Skills and other Qualifications:
Mr. Continenza brings a proven track record of guiding leading technology
companies through transformations. Mr. Continenza has extensive experience in the management and governance of a wide range of
companies, including technology companies, with a particular focus on companies that have undergone significant corporate restructuring.
He brings to the Board valuable expertise in technology, marketing, operations, strategic planning, mergers and acquisitions,
and executive compensation. In addition, Mr. Continenza brings corporate governance and risk management expertise to the Board
through his past and current executive positions and service as a board member of diverse companies.
| B. THOMAS GOLISANO |
Director since May 2021 |
B. Thomas Golisano, age 80, founded Paychex, Inc. (Nasdaq: PAYX), a provider
of human resource, payroll, and benefits outsourcing services for small- to medium-sized businesses, in 1971 and serves as its
Chairman of the Board. He served as President and Chief Executive Officer of Paychex, Inc. until October 2004. Mr. Golisano also
serves on the boards of Cognivue, Inc., Greenlight Networks, Inc. and Twinlab Consolidated Holdings, Inc. Mr. Golisano serves,
and has served, as a director of numerous other non-profit organizations and private companies. He is the founder and member of
the board of trustees of the B. Thomas Golisano Foundation.
Key Experience, Skills and other Qualifications:
Mr. Golisano brings to the Board substantial executive leadership experience,
including as the founder and chair of a large public company.
| PHILIPPE D. KATZ |
Director since February 2019 |
Philippe D. Katz, age 60, has been a partner of the private investment
firm United Equities Commodities Company since February 1995. Mr. Katz has been a director and officer of Momar Corp., a private
investment firm, since May 2010, a partner of
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Marneu Holding Company, a privately held investment company, since February
2007, and a director and officer of 111 John Realty Corp., a property management company, since December 1995. In addition, Mr.
Katz is a managing member of K.F. Investors LLC, a privately held investment company, a position he has held since March 2007.
Mr. Katz has served on the board of directors of Berkshire Bancorp, Inc. since June 2013. Mr. Katz served as an observer to our
Board from September 2013 to February 2019.
Key Experience, Skills and other Qualifications:
Mr. Katz has extensive experience in investing, finance and corporate
strategy. Mr. Katz brings to the Board knowledge of capital markets, risk management and corporate finance, all of which are considered
important to our business.
| KATHLEEN B. LYNCH |
Director since May 2021 |
Kathleen B. Lynch, age 56, served as the Chief Operating Officer and Group
Managing Director of UBS Wealth Management Americas and UBS Americas Holding LLC, an intermediate holding company for the U.S.
based subsidiaries of UBS Group AG, a global wealth manager and financial services firm, from February 2013 until May 2018. Prior
to that she served twenty-five years at Merrill Lynch/Bank of America in a variety of leadership positions in global markets and
investment banking and global research. Ms. Lynch has served on the board of directors of UBS Americas Holding LLC since July
2016, where she serves on the audit & finance committee and risk committee. From April 2017 until March 2022, Ms. Lynch served
on the board of directors of Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure
for the world’s financial markets.
Key Experience, Skills and other Qualifications:
In addition to governance and board service as a skill set, Ms. Lynch
brings to the Board extensive skills, leadership and deep expertise in strategy execution and development, risk and talent management
and regulatory matters. Her leadership experience is across a diverse set of businesses including wealth management, operations,
technology and global markets. She has held global, regional, and business responsibilities throughout her career, overseeing
major transformation initiatives, business integration efforts and implementation of digital strategy and platforms. She brings
a strong focus on the full spectrum of all risk types in crisis management.
| JASON NEW |
Director since September 2013 |
Jason New, age 53, is the Co-Founder and Managing Partner of NovaWulf
Digital Management, LP, an investment fund formed in 2021. Previously, Mr. New served as Co-CEO of Onex Credit, the credit investing
arm of Onex Corporation (Onex) from April 2020 to December 2021. Prior to joining Onex, Mr. New was the Senior Managing Director
of The Blackstone Group L.P., a global investment and advisory firm, and the Head of Special Situation Investing for GSO Capital
Partners LP (GSO), a credit-oriented alternative asset manager, having served in such positions from 2005 until December 2019.
Mr. New joined The Blackstone Group L.P. in 2008 in connection with its acquisition of GSO. Before joining GSO in 2005, Mr. New
was a senior member of Credit Suisse’s distressed finance group. Mr. New joined Credit Suisse in 2000 when it acquired Donaldson,
Lufkin & Jenrette (DLJ), where he was a member of DLJ’s restructuring group. Prior to joining DLJ in 1999, he was an associate
with the law firm Sidley Austin LLP, where he practiced in the firm’s corporate reorganization group.
Mr. New has served on the board of directors of TeraWulf Inc. (Nasdaq:
WULF), a digital asset technology company with a core business of sustainable bitcoin mining since December 2021. He also has
served on the board of directors of MPM Holdings Inc. from October 2014 to August 2016, Cheniere Energy, Inc. from August 2008
to December 2010 and Global Aviation Holdings Inc. from September 2009 to January 2012.
Key Experience, Skills and other Qualifications:
Mr. New has significant expertise in investment strategies and opportunities,
with a particular focus on companies that have experienced distressed economic conditions or are in various stages of restructuring.
He brings to the Board skills in developing creative financial solutions and strategies, which are critical to our ability to
sustain growth and profitability as a manufacturing company in a competitive environment. Mr. New is highly experienced in complex
financial and investment transactions. He also has a legal background, which is useful in the governance and risk management issues
facing our company.
| DARREN L. RICHMAN |
Director since April 2021 |
Darren L. Richman, age 50, is the Co-Founder and a Managing Member
of Kennedy Lewis Investment Management LLC (KLIM), an investment adviser, and a Managing Member of funds managed by KLIM,
having served in those positions since November 2017. Mr. Richman was a Senior Managing Director with Blackstone from 2006 to
2016 where he focused on special situation and opportunistic investments, and he sat on the Investment Committee for GSO
Capital Partner’s opportunistic credit funds and special situation funds. Before joining GSO Capital Partners, Mr.
Richman worked at DiMaio Ahmad Capital, where he was a Founding Member and the Co-Head of its Investment Research Team, from
2003 to 2006. Prior to joining DiMaio Ahmad, Mr. Richman was a Vice President and Senior Special Situations Analyst at
Goldman Sachs, from 1999 to 2003. Mr. Richman
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began his career with Deloitte & Touche, ultimately serving as a Manager
in the firm’s Mergers and Acquisitions Services Group, from 1994 to 1999. He was formerly a Certified Public
Accountant and a Member of the American Institute of Certified Public Accountants. Since October 2020, Mr. Richman has served
on the board of directors of F45 Training Holdings Inc. (NYSE:FXLV), a fitness franchisor focused on creating a leading global
fitness training and lifestyle brand. Mr. Richman also currently serves on the board of directors of Outward Bound USA and
previously sat on the board of directors of Vemo Education, Inc., Sorenson Communications, Seneca Mortgage and Warrior Coal.
He is a member of the Economic Club of New York and formerly served on its strategic planning committee.
Key Experience, Skills and other Qualifications:
Mr. Richman brings to the Board valuable financial and special situation
experience. His knowledge, expertise and experience, especially with respect to special situation and opportunistic investments,
are attributes the Board considers valuable.
| MICHAEL E. SILECK, JR. |
Director since May 2021 |
Michael E. Sileck, Jr., age 61, has served as the President since March
2020 and is an owner of SeaAgri Solutions, LLC, a global manufacturer and distributor of proprietary ocean minerals for the agricultural
and human consumption markets. Mr. Sileck was the Chief Operating Officer and Chief Financial Officer of World Wrestling Entertainment
from June 2005 to December 2008 and previously served as the Chief Financial Officer of Monster Worldwide from March 2002 to March
2005 and Interactive Corp from September 1999 to February 2002. Mr. Sileck has served on the boards of directors of numerous public
and private companies.
Key Experience, Skills and other Qualifications:
Mr. Sileck brings to the Board expertise in value creation, strategic
transformation, and financial and operational leadership. Mr. Sileck is an operationally oriented executive with extensive C-suite
experience within large public and smaller private companies. Mr. Sileck brings to the Board over 20 years of financial and operational
leadership experience.
DIRECTOR INDEPENDENCE
The Board has determined that each of the following directors has no material
relationship with us (either directly or as a partner, shareholder or officer of an organization that has a relationship with
us) and is independent under our Director Independence Standards and the independence standards of the New York Stock Exchange
(NYSE): B. Thomas Golisano, Philippe D. Katz, Kathleen B. Lynch, Jason New, Darren L. Richman, and Michael E. Sileck, Jr. In determining
the independence of the non-management directors, the Board considered the relationships of Mr. Katz, as an affiliate of entities
that are beneficial owners of our common stock, the relationships of Messrs. Golisano and Richman described in “Interested
Transactions”, and payroll and benefits services provided to the Company by Paychex, Inc. of which Mr. Golisano is Chairman
of the Board and a greater than 10% beneficial owner, and determined that these relationships do not preclude independence from
management.
The Board has adopted Director Independence Standards for use in determining
whether a director is independent. The Director Independence Standards are consistent with NYSE independence standards. The Board
also uses the NYSE independence standards in determining whether members of specific committees are independent. The Director
Independence Standards are part of our Corporate Governance Guidelines, which are posted on our website at http://investor.kodak.com/supporting.cfm.
BOARD LEADERSHIP STRUCTURE
The Board recognizes that one of its key responsibilities is to determine
the most appropriate leadership structure for our company and to provide independent oversight of management. James V. Continenza
serves as our Executive Chairman and Chief Executive Officer. The Board believes that it is appropriate to have the same person
perform the roles of Chairman and Chief Executive Officer in order to best oversee our company and management and provide a unified
structure ensuring strong and consistent leadership. The Company does not have a lead independent director. Instead, in accordance
with NYSE listing standards and our Corporate Governance Guidelines, our independent directors are required to meet in executive
session without management and, at each such session, an independent director chosen by the independent directors will preside
at such executive session.
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COMMITTEES OF THE BOARD
The Board has two standing committees including an Audit and Finance Committee
and the Compensation, Nominating and Governance Committee. We describe below the composition and functions of each of our standing
committees.
Board Committee Membership
| Director Name |
Audit and Finance
Committee |
Compensation, Nominating and
Governance Committee |
| B. Thomas Golisano |
|
Member |
| Philippe D. Katz |
|
Chair |
| Kathleen B. Lynch |
Chair |
|
| Jason New |
|
Member |
| Darren L. Richman |
Member |
|
| Michael E. Sileck, Jr. |
Member |
|
| Total Meetings in 2021 |
5 |
6 |
Audit and Finance Committee
The current members of the Audit and Finance Committee are Ms. Lynch (Chair)
and Messrs. Richman and Sileck. The Audit and Finance Committee was established in accordance with Section 3(a)(58)(A) of the
Exchange Act. The Board has determined that all members of the Audit and Finance Committee are independent and financially literate
under NYSE listing standards. The Board has also determined that Mr. Sileck possesses the qualifications of an “audit committee
financial expert,” as defined by SEC rules.
The Audit and Finance Committee assists the Board in overseeing and making
recommendations to the Board on such matters as: the integrity of our financial statements; our compliance with legal and regulatory
requirements; our independent registered public accounting firm’s selection, compensation, retention, performance and evaluation,
including assessing the firm’s qualifications and independence; our systems of disclosure controls and procedures and internal
controls over financial reporting; and the performance of our internal audit function. The Audit and Finance Committee charter
is posted on our website at http://investor.kodak.com/supporting.cfm.
Compensation, Nominating and Governance Committee
The current members of the Compensation, Nominating and Governance Committee
are Messrs. Golisano, Katz (Chair) and New, each of whom the Board has determined is independent under NYSE listing standards.
The Compensation, Nominating and Governance Committee is responsible for the dual roles of overseeing (a) our corporate governance
matters and the nomination of director candidates to the board of directors and (b) our compensation program and responsibilities.
The Compensation, Nominating and Governance Committee charter is posted on our website at http://investor.kodak.com/supporting.cfm.
With respect to its compensation functions, the Compensation, Nominating
and Governance Committee assists the Board in fulfilling its responsibilities in connection with the compensation of our Chief
Executive Officer and Section 16 Executive Officers as defined under Section 16 of the Exchange Act (a Section 16 Executive Officer),
including our named executive officers. The Compensation, Nominating and Governance Committee also reviews and makes recommendations
to the Board from time to time regarding compensation of directors.
The Compensation, Nominating and Governance Committee may engage compensation
consultants at the Company’s expense. In 2021, the Compensation, Nominating and Governance Committee engaged Lyons, Benenson
& Company, Inc. to provide the Committee with guidance regarding the compensation of our Section 16 Executive Officers, including
our Executive Chairman and Chief Executive Officer, and to provide recommendations regarding director compensation.
In accordance with its charter, the Compensation, Nominating and
Governance Committee may delegate authority to one or more subcommittees or management as it deems fit. The Compensation,
Nominating and Governance Committee has delegated limited authority to our Vice President, Human Resources to assist in the
administration of executive compensation and equity-based compensation plans. Except as a plan may otherwise provide, the
Compensation, Nominating and Governance Committee has authorized the Vice President, Human Resources to amend any executive
compensation or equity-based compensation plan in which our named executive officers participate, other than to materially
increase the benefits accruing to a participant under the plan, increase the number of shares available for issuance under
the plan or substantially modify the
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requirements as to eligibility for participation under the plans. In addition, the Vice
President, Human Resources is authorized to amend any award agreement and related documents under the plans, other than to
increase the benefits accruing to a participant.
With respect to its governance and nominating functions, some of the primary
duties of the Compensation, Nominating and Governance Committee are to oversee our corporate governance structure, which includes
the development of our Corporate Governance Guidelines, recommend individuals to the Board for nomination as members of the Board
and its committees, determine director independence, lead the Board in its periodic review of Board performance and review “Interested
Transactions” in accordance with our Related Party Transactions Policy and Procedures.
CORPORATE GOVERNANCE OVERVIEW
Ethical business conduct and good corporate governance are well-established
practices at Kodak. We practice good corporate governance and believe it to be a prerequisite to delivering sustained, long-term
value to our shareholders. We monitor developments in the area of corporate governance to maintain and implement sound practices.
Strong corporate governance is an important goal of our Board.
Our Corporate Governance Guidelines reflect the principles by which our
Board operates. From time to time, the Board reviews and revises our Corporate Governance Guidelines in response to regulatory
requirements and evolving market practices. Our Corporate Governance Guidelines are posted on our website at http://investor.kodak.com/supporting.cfm.
BUSINESS CONDUCT GUIDE AND DIRECTORS’ CODE OF CONDUCT
Our reputation and our brand have been built by more than a century of
ethical business conduct. All of our employees, including the Executive Chairman and Chief Executive Officer, the Chief Financial
Officer, the Controller, all other senior financial officers and all other Section 16 Executive Officers, are required to comply
with our code of conduct, the “Business Conduct Guide.” We also have a Directors’ Code of Conduct. Our Business
Conduct Guide and our Directors’ Code of Conduct are posted on our website at http://investor.kodak.com/supporting.cfm.
GOVERNANCE PRACTICES
Meeting Attendance
Our Board has a Director Attendance Policy that is part of our Corporate
Governance Guidelines, which is posted on our website at http://investor.kodak.com/supporting.cfm. Under this policy, all of our
directors are strongly encouraged to attend all Board meetings and our annual meeting of shareholders. In 2021, the Board held
a total of 12 meetings. Each continuing director attended more than 75% of the meetings of the Board and committees of the Board
on which the director served. All of our then serving directors attended the annual meeting of shareholders held on May 19, 2021.
Executive Sessions
Each executive session of our non-management directors is chaired by an
independent director, chosen by the independent directors to preside at such executive session.
Communications with Our Board
Shareholders and interested parties who wish to communicate with the Board,
the independent directors as a group or an individual director, may send an e-mail to our Executive Chairman at chairman@kodak.com
or may send a letter to our Executive Chairman or to the independent director(s) c/o Secretary, Eastman Kodak Company, 343 State
Street, Rochester, NY 14650-0224. Communications received will be forwarded to the Board, the independent directors as a group
or the individual director as directed, unless the communication is unduly hostile, threatening, illegal, does not reasonably
relate to the Company or its business, or is similarly inappropriate. The Executive Chairman and the directors have authority
to disregard any inappropriate communications or to take other appropriate actions with respect to any such inappropriate communications.
Consideration of Director Candidates
The Compensation, Nominating and Governance Committee will consider nominations
for director candidates recommended by its members, other Board members, management, shareholders and the search firms as it may
retain. The Compensation, Nominating and Governance Committee reviews all potential candidates under our Director Selection Process
and Qualification Standards described below.
Shareholders wishing to recommend candidates for consideration by the
Board may do so by providing the following information, in writing, to the Compensation, Nominating and Governance Committee of
the Board, c/o Secretary, Eastman Kodak Company, 343 State Street, Rochester, NY 14650-0224: 1) the name, address and telephone
number of the shareholder making the request; 2) the number of shares owned, and, if such person is not a shareholder of record
or if such shares are held by an
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entity, reasonable evidence of such person’s ownership of such shares or such
person’s authority to act on behalf of such entity; 3) the full name, address and telephone number of the individual
being recommended, together with a reasonably detailed description of the background, experience and qualifications of that
individual; 4) a signed acknowledgement by the individual being recommended that he or she has consented to: a) serve as
director if elected and b) the Company undertaking an inquiry into that individual’s background, experience and
qualifications; 5) the disclosure of any relationship of the individual being recommended with the Company, whether direct or
indirect; and 6) if known to the shareholder, any material interest of such shareholder or individual being recommended in any
proposals or other business to be presented at the next annual meeting of shareholders (or a statement to the effect that no
material interest is known to such shareholder).
Director Selection Process and Qualification Standards
The Compensation, Nominating and Governance Committee is responsible for
identifying, screening and recommending candidates for Board membership. When reviewing a potential candidate for the Board, the
Compensation, Nominating and Governance Committee looks to whether the candidate possesses the necessary qualifications to serve
as a director. To assist it in these determinations, the Compensation, Nominating and Governance Committee has adopted Director
Qualification Standards and a Director Selection Process, which are posted as part of our Corporate Governance Guidelines on our
website at http://investor.kodak.com/supporting.cfm.
The Director Qualification Standards specify that, in addition to any
other factors described in the Company’s Corporate Governance Guidelines, the Board should at a minimum consider the following
factors, as more fully described in our Director Qualification Standards, in the nomination or appointment of members of the Board:
integrity, reputation, judgment, knowledge, experience, maturity, commitment, skills, track record, diversity (including with
respect to gender, race, ethnicity and sexual orientation), age, independence and ownership stake. The Compensation, Nominating
and Governance Committee, in accordance with its Director Selection Process, will then consider the candidate’s qualifications
in light of the needs of the Board and our company at that time, given the then-current mix of director attributes and the Board’s
projected strengths and future needs. Based on the Compensation, Nominating and Governance Committee’s results of the assessment
of Board needs, they may develop a target candidate profile. As provided in our Corporate Governance Guidelines, the Compensation,
Nominating and Governance Committee seeks to create a multi-disciplinary Board that, as a whole, is strong in both its knowledge
and experience. The Compensation, Nominating and Governance Committee may use the services of a third-party executive search firm,
as well as the personal network of the Board and senior management, and may consider any previously recommended nominees when
identifying and evaluating possible nominees for director. A list of preferred candidates is developed and presented to the full
Board, including the Executive Chairman, for review and input. Interest on the part of the potential candidate is gauged and an
interview and reference check are performed. The full Board makes a determination with respect to the candidate. Candidates that
are successfully elected to the Board participate in orientation sessions to familiarize them with our business. The Board has
a mandatory retirement age of 72, unless an extension is approved by the Board, but in no event above age 75; however, this requirement
does not apply to candidates nominated pursuant to contractual nomination rights.
Although the Compensation, Nominating and Governance Committee does not
have a formal policy regarding the consideration of diversity in the selection of candidates, the Compensation, Nominating and
Governance Committee considers diversity when evaluating possible nominees under our Director Qualification Standards, which provide
that the Board should be a diverse body, with diversity reflecting gender, ethnic background, race, sexual orientation, country
of citizenship and professional experience. In addition, the Compensation, Nominating and Governance Committee and the Board periodically
evaluates diversity as part of their self-evaluation processes.
Strategic Role of the Board
The Board plays a key role in developing, reviewing and overseeing the
execution of our business strategy. The Board receives progress reports from management throughout the year on the implementation
of the strategic plan, including business segment performance and strategy reviews for each of our key businesses, product line
reviews and presentations regarding research and development initiatives and our intellectual property portfolio.
Succession Planning
The entire Board reviews our succession plans for our Executive Chairman
and Chief Executive Officer and other key senior management positions and oversees our activities in the areas of leadership and
executive development. To assist the Board, management periodically reports to the Board on succession planning to ensure that
it is a continuous and ongoing effort.
Majority Voting for Directors
Our By-laws provide for majority voting in uncontested director elections.
We also maintain a Majority Vote Policy that requires a director nominee,
in connection with his or her nomination to the Board, to submit a resignation letter in which the director nominee irrevocably
elects to resign if he or she fails to receive the required
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majority vote in the next election and the Board accepts the resignation.
The policy requires the Board to nominate for election or re-election as a director only those candidates who agree to execute
such a letter upon his or her nomination. The Majority Vote Policy is posted on our website at http://investor.kodak.com/supporting.cfm.
If a director nominee fails to receive a majority vote in an uncontested
election, the Majority Vote Policy provides that the Compensation, Nominating and Governance Committee will consider the resignation
letter and recommend to the Board whether to accept it. The Compensation, Nominating and Governance Committee, in making its recommendation
to the Board, and the Board, in reaching its decision, may consider relevant factors, including any stated reason why shareholders
voted against the election of the director, the director’s qualifications, the director’s past and expected future
contributions to us, the overall composition of the Board and whether accepting the resignation letter would cause us to fail
to comply with any applicable rule, such as the NYSE’s listing standards.
The policy provides that the Board will act on the Compensation, Nominating
and Governance Committee’s recommendation and publicly disclose its decision whether to accept the director’s letter
of resignation within 90 days following the certification of the shareholder vote. If the letter of resignation is not accepted
by the Board within this 90-day period, the resignation will not be effective until the next annual meeting.
All seven director nominees standing for election at the Annual Meeting
have submitted an irrevocable letter of resignation as a condition of nomination pursuant to the Majority Vote Policy.
Anti-Hedging and Pledging Policy
Our Anti-Hedging and Pledging Policy prohibits our directors and executive
officers from engaging, directly or indirectly, in any transactions that are designed to or that may reasonably be expected to
have the effect of hedging or offsetting a decrease in the market value of our equity securities. In addition, the policy prohibits
directors and executive officers from purchasing our equity securities on margin, borrowing against our securities on margin or
pledging our equity securities as collateral for a loan. The Anti-Hedging and Pledging Policy is posted on our website at http://investor.kodak.com/supporting.cfm.
Risk Management
Our Board oversees an enterprise-wide approach to risk management, designed
to support the achievement of our objectives, including strategic objectives, to improve long-term performance and enhance shareholder
value. A fundamental part of risk management is not only identifying and prioritizing the risks we face and monitoring the steps
management is taking to manage those risks, but also determining the level of risk that is appropriate for us. As an integral
part of its review and approval of our strategic plan, the Board considers the appropriate level of risk that is acceptable. Through
this process, the Board assesses risk throughout the Company, focusing on four primary risk categories: strategic, operational
(including with respect to cybersecurity), legal/compliance and financial reporting. The Audit and Finance Committee is responsible
for reviewing the results of our enterprise risk assessment on an annual basis. The Board also receives reports on management’s
progress in mitigating key risks.
The Board has delegated to its committees responsibility for the oversight
of risk management in specific risk areas. For example, the committees of the Board oversee:
| |
● |
Risk management relating to our financial reporting
(including internal controls). |
| |
|
|
| |
● |
Risk management relating to our compensation programs and awards. |
| |
|
|
| |
● |
Risk management relating to our capital structure. |
| |
|
|
| |
● |
Risk management relating to our insurance and pension programs. |
| |
|
|
| |
● |
Risk management relating to cybersecurity. |
15
Table of Contents
EXECUTIVE COMPENSATION
We are eligible to rely on the scaled disclosure requirements under Item
402 (m) through (q) of Regulation S-K in this proxy statement. The following tables and related narrative contain information
regarding the compensation paid to our named executive officers for our two most recently completed fiscal years, which ended
on December 31, 2021 and December 31, 2020.
Our named executive officers for 2021 are as follows:
James V. Continenza –
Executive Chairman and Chief Executive Officer
David E. Bullwinkle – Chief Financial Officer, President, Eastman Business
Park, and Senior Vice President
John O’Grady – Senior Vice President, Print and Vice President.
SUMMARY COMPENSATION TABLE
Name
and
Principal
Position |
Year |
Salary
($)(1) |
Bonus
($) |
Stock
Awards
($)(2) |
Option
Awards
($)(3) |
Non-Equity
Incentive
Plan
Comp.
($) |
All
Other
Comp.
($)(4) |
Total
($) |
J.V.
Continenza
Executive Chairman and Chief Executive Officer |
2021 |
986,934 |
0 |
5,000,000 |
0 |
0 |
28,833 |
6,015,767 |
| 2020 |
824,040 |
0 |
0 |
11,112,869 |
0 |
0 |
11,936,909 |
D.E.
Bullwinkle
Chief Financial Officer, President,
Eastman Business Park and Senior Vice President |
2021 |
453,990 |
0 |
0 |
0 |
0 |
0 |
453,990 |
| 2020 |
379,059 |
0 |
0 |
322,267 |
0 |
0 |
701,326 |
J.
O’Grady
Senior Vice President, Print and
Vice President |
2021 |
414,513 |
0 |
0 |
0 |
0 |
0 |
414,513 |
| 2020 |
346,098 |
0 |
0 |
0 |
0 |
0 |
346,098 |
| (1) |
This column reports the base salary paid to each
of our named executive officers during each year reported. The base salary paid to our named executive officers during 2021
is described under “Base Salary” below. |
| (2) |
This column reports the aggregate grant date fair value (as calculated
for financial reporting purposes), without any reduction for risk of forfeiture, for all restricted stock units (RSUs) granted
during each year reported. The amounts reported in this column have been calculated in accordance with FASB ASC Topic 718.
The terms of the RSUs are described under “Long-Term Incentive Compensation” below. |
| (3) |
This column reports the aggregate grant date fair value (as calculated
for financial reporting purposes), without any reduction for risk of forfeiture, for all stock option awards granted during
each year reported. The amounts reported in this column have been calculated in accordance with FASB ASC Topic 718. |
| (4) |
For 2021, we paid $28,833 in legal fees on behalf of Mr. Continenza
pursuant to his employment agreement for legal fees incurred by him in connection with the negotiation of such agreement. |
17
Table of Contents
NARRATIVE TO SUMMARY COMPENSATION TABLE
Base Salary
We paid Messrs. Continenza and Bullwinkle base salaries by reference
to their employment agreements as discussed below under “Employment Agreements”.
We have paid Mr. O’Grady an annual base salary of $420,000 since
April 24, 2018.
In response to the COVID-19 pandemic, we temporarily reduced the base
salaries of each of our named executive officers by 25%, effective from April 13, 2020 through January 4, 2021. During this period,
Mr. Continenza’s annual salary was reduced from $1,000,000 to $750,000, Mr. Bullwinkle’s annual salary was reduced
from $460,000 to $345,000 and Mr. O’Grady’s annual salary was reduced from $420,000 to $315,000.
Long-Term Incentive Compensation
In connection with the entry into his employment agreement, on February
26, 2021, we granted Mr. Continenza 200,000 fully vested restricted stock units (RSUs) and 300,000 RSUs that vest in three equal
installments on the first three anniversaries of the grant date, subject to continued employment through each applicable vesting
date. Mr. Continenza has not exercised any options granted to him by the Company and, while certain shares have been withheld
by the Company to satisfy withholding obligations upon the vesting of RSUs, Mr. Continenza has not sold any shares of the Company
received by him as compensation or otherwise acquired by him.
Non-Equity Incentive Compensation
For 2021, the annual incentive plan, known as Executive Compensation
for Excellence and Leadership (EXCEL), was suspended, and none of the named executive officers received an EXCEL payment or other
cash bonus.
Employment Agreements
James V. Continenza
On February 26, 2021, we entered into a new employment agreement with
Mr. Continenza, which has an initial three-year term. The new employment agreement replaced in its entirety Mr. Continenza’s
prior employment agreement which was effective February 20, 2019.
The employment agreement provides Mr. Continenza the following:
| |
● |
An annual base salary of $1 million; |
| |
● |
Participation in our annual incentive plan, with an annual target opportunity
of 100% of base salary, predicated on the achievement of yearly targeted free cash flow; |
| |
● |
Annual grants of 300,000 RSUs that vest in three equal installments on the
first three anniversaries of the applicable grant date, subject to continued employment through each applicable vesting date;
and |
| |
● |
Participation in all benefit plans, policies and arrangements that are provided to employees
generally. |
The employment agreement further provides that if Mr. Continenza’s
employment is terminated by us without cause or by him for good reason, he would be eligible to receive (less any applicable withholding
and deduction):
| |
● |
an amount equal to two years of salary plus two years of annual incentive awards; |
| |
● |
an amount equal to earned but unpaid annual incentive awards for the fiscal
year ending immediately prior to the year in which his employment was terminated; |
| |
● |
an amount equal to the annual incentive award in respect of the fiscal year
in which his termination of employment occurs, pro-rated based upon the number of days from the beginning of such fiscal year
through the date of termination of employment; |
| |
● |
accelerated vesting of the next tranche of outstanding unvested RSUs that
would have vested but for the termination of his employment; and |
| |
● |
continued participation in all health, medical and dental plans and programs maintained by the
Company for 24 months and payment of all required contributions to maintain such coverage. |
Mr. Continenza’s employment agreement contains notice and negotiation
provisions the result of which, may result in the Term being automatically renewed for successive three-year periods. During any
renewal periods, if applicable, the terms of Mr. Continenza’s employment will remain the same except that his annual grant
of RSUs, instead of being a fixed number of
18
Table of Contents
300,000 RSUs, will be equal to $3,000,000 divided by the volume-weighted
average price per share of common stock of the Company, par value $.01 per share, for the twenty (20) trading days prior to the
date of grant.
The employment agreement provides that in the event that Mr. Continenza’s
employment is terminated due to his disability or death, he or his estate, as applicable, will be eligible to receive (less applicable
withholding) his accrued compensation, earned but unpaid annual incentive awards for the fiscal year ending immediately prior
to the year of the termination, an amount equal to the annual incentive award in respect of the fiscal year in which the termination
occurs, pro-rated based upon the number of days from the beginning of such fiscal year through the date of termination, and accelerated
vesting of the next tranche of unvested RSUs. All unvested portions of remaining RSUs would be forfeited.
Eligibility to receive the post-termination benefits in connection with
termination without cause or with good reason beyond accrued compensation and benefits is subject to execution of a severance
agreement including (1) a general release and covenant not to sue in favor of us and (2) non-solicitation provisions.
Mr. Continenza’s employment agreement also provides that Mr. Continenza
will not have the right to exercise any stock options granted to him pursuant to the terms of any award granted to him in February
2019 or July 2020 to the extent that, after giving effect to the issuance of the common stock resulting from such exercise, Mr.
Continenza (together with his affiliates and any person acting as a group), would beneficially own more than 4.99% of the then
issued and outstanding shares of common stock.
David E. Bullwinkle
We employ Mr. Bullwinkle under an employment agreement effective July
1, 2016 with no scheduled term ending date. Under this employment agreement, Mr. Bullwinkle is eligible for the following:
| |
● |
An annual base salary of $400,000, which was
increased to $460,000 effective November 12, 2018; |
| |
● |
Participation in our EXCEL Plan with an annual target opportunity
of 65% of base salary and a maximum of 200% of target; and |
| |
● |
Participation in all benefit plans, policies and arrangements that
are provided to employees generally. |
The employment agreement provides that if Mr. Bullwinkle’s employment
is terminated by us without cause or by him with good reason, he will be eligible to receive (less applicable withholding):
| |
● |
An amount equal to his annual base salary; |
| |
● |
Continued vesting of his equity grants in accordance with the terms
of such awards; and |
| |
● |
Eligibility for an EXCEL award for the fiscal year in which the
termination occurs, if earned, as governed by the terms of the EXCEL Plan and applicable Administrative Guide or Award Notice. |
The employment agreement provides that in the event that Mr. Bullwinkle’s
employment is terminated due to his disability or death, he or his estate, as applicable, will be eligible to receive (less applicable
withholding) continued vesting of his equity awards in accordance with the terms of such awards and a pro rata EXCEL award, if
earned, as governed by the terms of the EXCEL Plan and applicable Administrative Guide or Award Notice.
Eligibility to receive the severance benefits payable in connection with
termination without cause or with good reason is subject to (1) execution of a general release and covenant not to sue in favor
of us; and (2) compliance with a non-compete agreement after termination of employment.
John O’Grady
Mr. O’Grady’s employment with the Company terminated effective
April 1, 2022. We did not have a written employment agreement with Mr. O’Grady. In 2021, Mr. O’Grady was eligible
for the following:
| |
● |
An annual base salary of $420,000; |
| |
● |
Participation in our EXCEL plan with an annual target opportunity
of 50% of base salary, this was increased to 70% effective April 24, 2018, and a maximum of 200% of target; and |
| |
● |
Participation in all benefit plans, policies and arrangements that
are provided to employees generally. |
Mr. O’Grady was eligible to participate in our Officer Severance
Policy. If Mr. O’Grady’s employment had been terminated by us without cause or by him with good reason, the Officer
Severance Policy would have entitled him to (less applicable withholding):
| |
● |
An amount equal to 100% of his total target cash
compensation; |
| |
● |
Modified accelerated vesting of his equity grants in accordance
with the terms of such awards; and |
19
Table of Contents
| |
● |
Eligibility for an EXCEL award for the fiscal
year in which the termination occurs, if earned, as governed by the terms of the EXCEL Plan and applicable Administrative
Guide or Award Notice. |
In the event that Mr. O’Grady’s employment were terminated
due to his disability or death, he or his estate, as applicable, would have been eligible to receive (less applicable withholding)
continued vesting of his equity awards in accordance with the terms of such awards and a pro rata EXCEL award, if earned, as governed
by the terms of the EXCEL Plan and applicable Administrative Guide or Award Notice.
Eligibility to receive the severance benefits payable in connection with
termination without cause or with good reason was subject to (1) execution of a general release and covenant not to sue in favor
of us; and (2) compliance with a non-compete and non-solicitation agreement after termination of employment.
In connection with his termination of employment, Mr. O’Grady waived
his right to receive payments under our Officer Severance Policy and instead entered into a severance arrangement with us that
provides for him to receive 25 weeks’ pay at his current base salary level and a lump sum payment equal to 12 months’
COBRA premiums for him and his eligible dependents. The payments are subject to (1) execution of a general release and covenant
not to sue in favor of us; and (2) compliance with a non-compete and non-solicitation agreement after termination of employment.
Tax-Qualified Retirement Plans
Employees’ Savings and Investment Plan (SIP)
We offer a tax-qualified 401(k) defined contribution plan known as the
Employees’ Savings and Investment Plan (SIP) for all U.S. employees. Employer contributions to SIP were frozen as of January
1, 2015.
Kodak Retirement Income Plan (KRIP)
We fund a tax-qualified defined benefit pension plan known as the Kodak
Retirement Income Plan (KRIP) for all U.S. employees. Under KRIP, a hypothetical account is established for each participating
employee and, for every month the employee works, the employee’s account is credited with an amount equal to either 10%
(non-exempt employees) or 9% (exempt employees) of the employee’s monthly pay (i.e., base salary and EXCEL awards, including
allowances in lieu of salary for authorized periods of absence, such as illness, vacation or holidays). In addition, the ongoing
balance of the employee’s account earns interest at the 30-year Treasury bond rate. Employees’ rights are fully vested.
Benefits are payable upon normal retirement (age 65), early retirement, termination or death. Participants may choose from among
various forms of benefits such as a lump sum, a joint and survivor annuity and a straight life annuity.
Non-Qualified Deferred Compensation
Except for Mr. Continenza, none of our named executive officers have
non-qualified deferred compensation.
Effective December 26, 2013, we adopted the Deferred Compensation Plan
for Directors, which allows non-employee directors to defer some or all of their RSU awards into a phantom stock account. Mr.
Continenza became ineligible when he was appointed as Executive Chairman and Chief Executive Officer.
20
Table of Contents
OUTSTANDING EQUITY AWARDS AT 2021 FISCAL YEAR-END TABLE (1)
The following table sets forth additional information concerning equity
awards held by our named executive officers as of December 31, 2021.
| |
|
Option
Awards |
|
|
Stock
Awards |
|
| Name |
Number
of
Securities
Underlying
Unexercised
Options (#)
Exercisable |
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable |
Option
Exercise
Price
($) |
Option
Expiration
Date |
Number
of
Shares or
Units of Stock
Held that
Have Not
Vested
(#) |
Market Value of
Shares or Units
of Stock Held
that Have Not
Vested
($) |
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other Rights
that Have
Not Vested
(#)(2) |
Equity Incentive
Plan Awards:
Market or
Payout Value of
Unearned
Shares, Units or
Other Rights
that Have Not
Vested
($)(3) |
| J.V. Continenza |
981,707 |
(4) |
|
3.03 |
02/19/2026 |
|
|
|
|
| |
298,780 |
(4) |
|
4.53 |
02/19/2026 |
|
|
|
|
| |
298,780 |
(4) |
|
6.03 |
02/19/2026 |
|
|
|
|
| |
170,733 |
(4) |
|
12.00 |
02/19/2026 |
|
|
|
|
| |
1,150,000 |
|
|
3.03 |
02/19/2026 |
|
|
|
|
| |
350,000 |
|
|
4.53 |
02/19/2026 |
|
|
|
|
| |
350,000 |
|
|
6.03 |
02/19/2026 |
|
|
|
|
| |
200,000 |
|
|
12.00 |
02/19/2026 |
|
|
|
|
| |
|
|
|
|
|
|
300,000(5) |
1,404,000 |
| D.E. Bullwinkle |
5,000 |
(6) |
10,000 |
3.03 |
02/19/2026 |
|
|
|
|
| |
3,333 |
(6) |
6,667 |
4.53 |
02/19/2026 |
|
|
|
|
| |
3,333 |
(6) |
6,667 |
6.03 |
02/19/2026 |
|
|
|
|
| |
3,333 |
(6) |
6,667 |
12.00 |
02/19/2026 |
|
|
|
|
| |
72,017 |
(7) |
|
3.90 |
12/03/2025 |
|
|
|
|
| |
355,330 |
|
|
12.50 |
09/13/2024 |
|
|
|
|
| |
45,942 |
|
|
16.24 |
06/30/2023 |
|
|
|
|
| |
7,965 |
|
|
13.76 |
09/02/2022 |
|
|
|
|
| J.
O’Grady |
25,218 |
(8) |
|
13.76 |
09/02/2022 |
|
|
|
|
| |
29,712 |
(9) |
|
15.58 |
09/02/2023 |
|
|
|
|
| |
39,247 |
(10) |
|
15.20 |
11/14/2023 |
|
|
|
|
| |
51,441 |
(7) |
|
3.90 |
12/03/2025 |
|
|
|
|
| (1) |
This table includes
only those awards outstanding as of December 31, 2021.
|
| (2) |
This column represents outstanding awards of RSUs. |
| (3) |
This column represents the market value of RSUs that have not vested, which
was calculated using a stock value of $4.68 per share, which was the closing price of our common stock as of December 31,
2021, the last trading day of the year. |
| (4) |
This stock option was granted on July 27, 2020 in four tranches with separate
exercise prices. Pursuant to the terms of the award agreement, 471,405 shares (28.57% of each tranche) vested on the grant
date, an additional 1,119,665 shares (67.86% of each tranche) vested on July 29, 2020 upon the conversion of 95% of our $100,000,000
of our outstanding Notes, and the remaining 58,930 shares (3.57% of each tranche) vested on September 30, 2020 upon the conversion
of the remaining 5% of the Notes. |
| (5) |
These RSUs were granted on February 26, 2021 and vest in three equal installments on February
26, 2022, February 26, 2023 and February 26, 2024. |
21
Table of Contents
| (6) |
This stock option was granted on July 27, 2020
in four tranches with separate exercise prices. This stock option vests in substantially equal installments on the first,
second and third anniversaries of the grant date. |
| (7) |
This stock option was granted on December 4, 2018 and vested in
three substantially equal installments on September 3, 2019 and September 3, 2020 and September 3, 2021. |
| (8) |
This stock option was granted on September 3, 2015 and vested in
three substantially equal installments on September 3, 2016, September 3, 2017 and September 3, 2018. |
| (9) |
This stock option was granted on September 3, 2016 and vested in
three equal installments on September 3, 2017, September 3, 2018 and September 3, 2019. |
| (10) |
This stock option was granted on November 15, 2016 and vested in
three substantially equal installments on September 3, 2018, September 3, 2019 and September 3, 2020. |