Exhibit (10).
April 29, 2005
Xxxxxxx Xxxxxx
(address intentionally omitted)
Re: Amendment to Letter Agreement
Dear Xxxxxxx:
By way of a letter agreement dated August 13, 2003 (the
"Agreement"), Xxxxxxx Kodak Company ("Kodak") and you agreed
to certain terms regarding your employment. The purpose of
this letter, which will become an agreement once both you
and Kodak sign it, is to amend the Agreement as set forth
herein. In particular, the Agreement is being amended to
provide you with enhanced retirement benefits, and to change
the payment terms of your severance benefit as a result of
recent changes to the Internal Revenue Code. 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.Retirement Benefits
A. Enhanced Retirement Benefit. In addition to any
benefit you may be eligible for under the Agreement, you
will also be eligible for an enhanced retirement benefit.
More specifically, Kodak will establish a phantom cash
balance account on your behalf. Subject to your
satisfaction of the terms of this letter agreement and the
Agreement, including but not limited to Subsection (B)
below, Kodak will, for up to a maximum of five (5) years,
credit this account by $200,000 each year, beginning on June
1, 2005 and continuing on each succeeding June 1 until June
1, 2009. Thus, the maximum amount Kodak will credit to this
account is $1,000,000. By way of example, assuming you
remain continuously employed by Kodak until June 1, 2009,
your account balance will be credited by $1,000,000. Any
amounts credited to this account will earn interest at the
same interest rate that amounts accrue interest under the
cash balance benefit of the Kodak Retirement Income Plan
("KRIP").
B. Continuous Employment. In order to receive any of the
amounts, including interest, credited to your phantom
cash balance account, you must remain continuously
employed by Kodak until at least June 1, 2008. Thus,
except as provided in Subsection (C) below, if your
employment terminates for any reason, whether
voluntarily or involuntarily, on or prior to June 1,
2008, you will forfeit all of the amounts, including
interest, credited to your phantom cash balance
account.
C. Termination. Notwithstanding Subsection (B) above, (i)
if Kodak terminates your employment at any time for
reasons other than Cause, (ii) if your employment
terminates at any time by reason of death or
Disability, or (iii) if you voluntarily terminate your
employment after June 1, 2008, you will be entitled to
receive the then current balance, including interest,
in your phantom cash balance account, if any.
D. Payment. The amount of the enhanced retirement
benefit, if any, payable to you under Subsection (A)
will: (i) be paid in a lump sum within 2 weeks after
the date that is 6 months after the date of your
separation from service (within the meaning of Internal
Revenue Code Section 409A); (ii) not be funded in any
manner; (iii) 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 (iv) not be grossed up or be given any other
special tax treatment by Kodak. In the event of your
death, any amount remaining in your cash balance
account will be paid to your estate.
E. Employee Benefit Plan. To the extent the terms of this
enhanced retirement benefit constitute an "employee
benefit plan" under Section 3(3) of the Employee
Retirement Income Security Act of 1974 ("ERISA"), the
Senior Vice President, Xxxxxxx 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 shall 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
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 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 shall 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.
2.Severance Benefits.
The last sentence of the first paragraph of Section 8.A. of
the Agreement is hereby amended in its entirety to read as
follows:
The severance allowance will be paid in equal consecutive
monthly payments over the twelve (12) month period
commencing on the six-month anniversary of the date of your
termination of employment.
3.Section 409A of the Internal Revenue Code.
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. 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.
4.Terms of Agreement
All of the 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.
* * *
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 Xxxxxxx Kodak Company
Executive Employee's Agreement, which remains in full force
and effect.
You agree to keep the content and existence of this letter
agreement confidential except that you may review it with
your financial advisor, attorney, and/or spouse. 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.
This letter, 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 law.
Please also keep in mind that, regardless of any provision
contained in this letter agreement to the contrary, your
employment at Kodak is "at will." That is, you are free to
terminate your employment at any time, for any reason, and
Kodak is free to do the same.
Your signature below means that you accept the terms and
conditions set forth in this letter 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 agreement directly to my
attention. Thank you.
Very truly yours,
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Director, Human Resources and
Senior Vice President
I accept the terms and conditions of this letter agreement.
Signed: /s/ Xxxxxxx Xxxxxx
----------------------
Xxxxxxx Xxxxxx
Dated: May 5, 2005
