Exhibit (99.2)
February 28, 2007
Mr. Philip J. Faraci
(address intentionally omitted)
Re: First Amendment to November 3, 2004 Letter Agreement
Dear Phil:
By way of a letter agreement dated November 3, 2004 (the "Agreement"),
Eastman 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. This letter
supersedes the Agreement to the extent inconsistent therewith.
1. Retirement Benefits
On page 9 of the Agreement, Section F of the Section headed "Retirement
Benefits" is hereby amended in its entirety to read as follows:
F. Payment. The amount of the enhanced retirement benefit, if
any, payable to you under Subsection (B) will: (i) if your
employment terminates prior to June 1, 2007, be paid in the
form of a monthly annuity commencing the first month following
the month containing the six-month anniversary of your
termination of employment from Kodak and continuing for any
remaining months in 2007, with the balance to be paid in a
lump sum as soon as practicable on or after January 1, 2008;
(ii) if your employment terminates on or after June 1, 2007,
be paid in a single lump sum as soon as practicable following
the six-month anniversary of your termination of employment
from Kodak; (iii) be paid out of Kodak's general assets, not
under KRIP; (iv) not be funded in any manner; (v) 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 (vi) not be grossed up or be given any
other special tax treatment by Kodak. For purposes of
calculating the lump sum amount under (i) and (ii), you will
be considered a pre-1996 lump-sum eligible hire, all benefits
under this agreement will be treated as post-1995 accrued
benefits, and the actuarial assumptions used will be those in
effect under KRIP with respect to your Annuity Start Date (as
defined under KRIP).
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2. Miscellaneous
On page 17 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 the 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."
3. 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/ Robert L. Berman
Robert L. Berman
RLB:gjg
I accept the terms and conditions of this letter agreement.
Signed: /s/ Philip J. Faraci
Philip J. Faraci
Dated: February 28, 2007