| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointments of Certain Officers; Compensatory Arrangements of Certain Officers |
On February 26, 2021, Eastman Kodak Company (the “Company”) entered into an Executive Chairman and CEO Agreement (the “New Employment Agreement”) with James V. Continenza, the Company’s Executive Chairman and Chief Executive Officer, effective as of February 26, 2021 (the “Effective Date”) and having a three-year term (the “Term”). The New Employment Agreement replaces in its entirety Mr. Continenza’s prior employment agreement with the Company, dated February 20, 2019 (the “Prior Employment Agreement”), the scheduled term of which expired on February 19, 2021 (the “Expiration Date”). The New Employment Agreement provides that the terms of Prior Employment Agreement will apply to Mr. Continenza’s employment for the period between the Expiration Date and the Effective Date.
Under the New Employment Agreement, Mr. Continenza: (i) will receive an annual base salary in an amount equal to $1,000,000, (ii) will be entitled to an annual incentive award with an annual target award equal to 100% of his annual base salary, (iii) was granted, of the Effective Date, an award of 200,000 fully vested restricted stock units (“RSUs”) pursuant to the Company’s 2013 Omnibus Incentive Plan, as amended and restated (the “Plan”), and (iv) on the Effective Date was, and on each anniversary of the Effective Date during the Term, will be granted an award of 300,000 unvested RSUs, which RSUs will vest in substantially equal annual installments over a three-year period following the applicable grant date.
The New Employment Agreement contains notice and negotiation provisions the result of which, under certain circumstances, 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 the number of unvested RSUs granted annually on the applicable anniversary of the Effective Date will, instead of being a fixed number of 300,000 RSUs, 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 (“Common Stock”), for the twenty (20) trading days prior to the date of grant.
In the event the Company terminates Mr. Continenza’s employment without “cause” or Mr. Continenza voluntarily terminates his employment for “good reason”, Mr. Continenza will be eligible to receive, subject to Mr. Continenza executing, delivering and not revoking a release of claims, (i) an amount equal to two years of his annual base salary and two years of his annual incentive award, (ii) any earned but unpaid annual incentive award for the fiscal year ending immediately prior to the year in which his employment was terminated, (iii) an amount equal to his annual cash incentive award for the fiscal year in which his employment is terminated, pro-rated based upon the number of days from the beginning of such fiscal year through the date his employment terminates, (iv) accelerated vesting of the next tranche of unvested RSUs that would have vested but for the termination of his employment, and (v) 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.
The New 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 under the Plan 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 (as such term is defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 13d-5(b)(1) promulgated thereunder)), would beneficially own more than 4.99% (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder) of the then issued and outstanding shares of Common Stock.
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