1
Exhibit (10) X.
October 2, 2003
Robert H. Brust
(address intentionally omitted)
Re: Retention Amendments
Dear Bob:
The purpose of this letter agreement (hereinafter the
"Letter Agreement") is to amend in several respects your
prior letter agreements with Eastman Kodak Company
("Kodak") regarding the terms and conditions of your
employment by Kodak. In particular, the letter
agreements that will be amended by way of this Letter
Agreement are those dated December 20, 1999 (the "Offer
Letter"), February 8, 2001 (the "February 8, 2001 Letter
Agreement") and November 12, 2001 (the "November 12, 2001
Letter Agreement"). The Offer Letter, the February 8,
2001 Letter Agreement and November 12, 2001 Letter
Agreement will hereinafter be collectively referred to as
the "Agreement." Once signed by both parties, this
Letter Agreement will constitute an agreement between
Kodak and you. For purposes of this Letter Agreement,
the term "Company" will refer to Kodak and all of its
subsidiaries and affiliates.
1. Retirement Income Benefit
Section 4 of the November 12, 2001 Letter Agreement
entitled "Enhanced Retirement Income Benefit" is amended
in its entirety to read as follows:
4. Retirement Income Benefit
A. In General. Should you remain employed with Kodak
until at least January 3, 2006, Section 11 of your Offer
Letter will, subject to your satisfaction of the terms
and conditions of this letter agreement, be deleted in
its entirety and replaced by the terms of this Section 4.
Similarly, should Kodak after January 3, 2005, but prior
to January 3, 2007, involuntarily terminate your
employment for other than "Cause" or "Disability," as
those terms are defined in the Offer Letter, Section 11
of your Offer Letter will, notwithstanding Section 3
above to the contrary, be deleted in its entirety and
replaced by the terms of this Section 4; provided,
however, you satisfy all of the terms and conditions of
this letter agreement.
2
B. Benefit. In addition to the retirement
benefits you are eligible for under the cash
balance benefit of KRIP, you will be eligible
for an enhanced pension benefit. Assuming you
satisfy the terms and conditions of this letter
agreement and subject to the offset provisions
contained in Section 4(D) below, Kodak will
provide you a retirement income benefit (1) as
if you were eligible to participate in Kodak's
retirement plans by virtue of being employed by
Kodak after December 31, 1995, but prior to
March 1, 1999, and (2) based on that number of
years of service specified in Section 4(C)
below. The names of the specific retirement
plans that you will be treated as participating
in by virtue of being treated as employed after
December 31, 1995, but prior to March 1, 1999,
are the Kodak Retirement Income Plan ("KRIP"),
the Kodak Unfunded Retirement Plan ("KURIP")
and the Kodak Excess Retirement Income Plan
("KERIP"). These three plans insofar as they
apply to employees employed by Kodak after
March 31, 1995, but prior to March 1, 1999,
will be collectively referred to as the
"Retirement Plan."
As described more fully in Section 4(C) below,
in order to receive the retirement income
benefit, you must remain employed by Kodak
until at least January 3, 2006. Thus, except
as provided in Section 4(D) below, if your
employment terminates for any reason, whether
voluntarily or involuntarily, prior to your
January 3, 2006, you will not be entitled to
receive the retirement income benefit described
in this Section 4.
C. Service. Should you remain continuously
employed at Kodak until at least January 3,
2006, you will be eligible for a retirement
income benefit under the Retirement Plan based
on 14 years of deemed service in addition to
your actual years of service at Kodak.
Thereafter, should you remain employed for at
least one additional year until at least
January 3, 2007, Kodak will calculate your
retirement income benefit under the Retirement
Plan based on 4 additional years of deemed
service in addition to the 14 years of deemed
service and your actual years of service at
Kodak.
3
By way of clarification, you will not be
credited with any years of service under the
Retirement Plan unless and until you complete 6
years of actual service under the Retirement
Plan. Upon completion of these 6 years of
service, you will have 20 years of service in
total, 14 years of deemed service and 6 years
of actual service. Upon completion of 7 years
of actual service under the Retirement Plan,
you will have 25 years of service in total, 18
years of deemed service and 7 years of actual
service. Should you remain employed with Kodak
after completing 7 years of actual service, you
will thereafter continue to earn credit under
the Retirement Plan based on your actual
service with Kodak, but you will not be
eligible for any additional years of deemed
service beyond the 18 years credited to you
upon completion of the 7 years of actual
service.
Any service credited to you under the
Retirement Plan (whether actual or deemed) will
only apply for purposes of establishing under
the Retirement Plan: (i) the total amount of
your "Vesting Service"; (ii) the total amount
of your "Accrued Service" used to calculate
your retirement income benefit; and (iii) your
"Total Service" for purposes of determining the
applicability of any early retirement reduction
factor. The crediting of service applies
solely for these purposes and is not intended
to enhance any other Kodak benefit or
compensation.
D. Termination For Other Than Cause or Disability.
Notwithstanding Sections 4(C) above to the
contrary, if after January 3, 2005, but prior
to January 3, 2007, Kodak terminates your
employment for other than "Cause" or
"Disability," as those terms are defined in the
Offer Letter, you will remain eligible for the
retirement income benefit described in this
Section 4. In such event, your retirement
income benefit will be calculated based on your
actual years of service at Kodak prior to your
termination of employment plus 14 years of
deemed service.
E. Offset. The amount of the retirement income
benefit, if any, provided to you under this
Section 4 will be offset by the retirement
benefits payable to you under the cash balance
benefit of KRIP and any supplemental and
successor plan(s) thereto, including but not
limited to KERIP and KURIP.
4
For purposes of determining the amount of any
offset under this Section 4(E), the amount of
the retirement benefits payable to you under
Cash Balance Plus and any supplemental and
successor plan(s) thereto will be calculated
pursuant to the same actuarial assumptions that
are used to calculate the retirement income
benefit that you will be treated as receiving
under the Retirement Plan, assuming the same
frequency of payment, form of benefit and
commencement date of payment as such retirement
income benefit, but based on your actual years
of service and actual age and reduced for any
actuarial reductions for any early commencement
of benefits.
F. Payment. The amount of the retirement benefit,
if any, payable to you under this Section 4
will: (i) be paid in such form(s) as Kodak, in
its discretion, determines; (ii) be paid out of
Kodak's general assets, not under KRIP; (iii)
not be funded in any manner; (iv) be included
in your gross income as ordinary income,
subject to all income and payroll tax
withholding required to be made under all
applicable laws; and (v) not be grossed up or
be given any other special tax treatment by
Kodak.
5
G. Employee Benefit Plan. To the extent the terms
of this retirement income benefit constitute an
"employee benefit plan" under Section 3(3) of
the Employee Retirement Income Security Act of
1974 ("ERISA"), the Vice President, Eastman
Kodak Company and Director, Human Resources
will be the plan administrator of the plan.
The plan 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 plan
administrator will have the exclusive right to:
interpret the plan, decide all questions
concerning eligibility for and the amount of
benefits 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 plan
administrator shall 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
benefits under the plan. It is the intent of
the plan, as well as both parties hereto, that
the decisions of the plan 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 will be modified upon judicial review
unless such decision or action is proven to be
arbitrary or capricious.
6
2. Outside Activities
The second paragraph of Section 22 of the Offer Letter
entitled "Miscellaneous" is deleted in its entirety to
read as follows:
You will devote all of your business time and
attention, and your best efforts, abilities,
experience, and talent, to the positions of Chief
Financial Officer and Executive Vice President and
for the businesses of the Company without commitment
to other business endeavors. Notwithstanding the
foregoing, you may engage in the following
activities provided such activities do not
materially interfere with your Kodak duties and
responsibilities and are consistent with the
Company's conflict of interest policies and
corporate governance guidelines as in effect from
time to time: (i) charitable, community and civic
activities; and (ii) serve on the board of directors
of the following number of public owned companies:
prior to October 1, 2004, one company, and on or
after October 1, 2004 two companies.
3. Remaining Terms of Agreement
All of the remaining terms of the Agreement, to the
extent they are consistent with the terms of this letter
agreement, will remain in full force and effect, without
amendment or modification.
4. Miscellaneous
A. Confidentiality. You agree to keep the content
and existence of this letter agreement
confidential except that you may review it with
your financial advisor, attorney or
spouse/partner and with me or my designee.
Upon such a disclosure, however, you agree to
advise the recipient of the confidential nature
of this letter agreement and the facts giving
rise to it as well as the recipient's
obligations to maintain the confidentiality of
this letter agreement and the facts giving rise
to it.
B. Unenforceability. If any portion of this
letter agreement is deemed to be void or
unenforceable by a court of competent
jurisdiction, the remaining portions will
remain in full force and effect to the maximum
extent allowed by law. The parties intend and
desire that each portion of this letter
agreement be given the maximum possible effect
allowed by law.
C. Headings. The heading of the several sections
of this letter agreement have been prepared for
convenience and reference only and shall not
control, affect the meaning, or be taken as the
interpretation of any provision of this letter
agreement.
7
D. Applicable Law. This letter agreement, and its
interpretation and application, will be
governed and controlled by the laws of the
State of New York, applicable as though to a
contract made in New York by residents of New
York and wholly to be performed in New York
without giving effect to principles of
conflicts of laws.
E. Amendment. This letter agreement may not be
changed, modified, or amended, except in a
writing signed by both you and Kodak that
expressly acknowledges that it is changing,
modifying or amending this letter agreement.
F. At Will. Please also keep in mind that,
regardless of any provision contained in this
letter to the contrary, your employment at
Kodak is "at will". That is, you will be free
to terminate your employment at any time, for
any reason, and Kodak is free to do the same.
* * *
Your signature below means that:
1. You have had ample opportunity to discuss the
terms and conditions of this letter agreement
with advisors of your choice from among those
types listed in Section 5(A) above, 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. You agree that this letter agreement supersedes
and replaces any and all agreements or
understandings whether written or oral that you
may have with Kodak concerning the subject
matter hereof; except, however, this letter
does not in any way supersede or replace your
Eastman Kodak Company Employee's Agreement.
If you find the foregoing acceptable, please sign your
name on the signature line provided below and return the
original signed copy of this letter directly to my
attention prior to October 9, 2003. Thank you and best
wishes towards your continuing successes at Kodak.
Very truly yours,
Michael P. Morley
MPM:llh
8
I agree to the terms and conditions of this letter
agreement.
Signed: /s/ Robert H. Brust
Robert H. Brust
Dated: