Kodak seeks court approval of $8.8 million key employee incentive plan

By Jim Witters

Wilmington, Del., July 11 - Eastman Kodak Co. is seeking approval of an $8.8 million performance incentive plan for 15 key management employees, according to documents filed July 11 with the U.S. Bankruptcy Court for the Southern District of New York.

"The plan is a performance-based incentive plan designed to directly tie key senior leaders to the success of the debtors' restructuring. The plan provides participants with the opportunity to receive incentive payments based on the recovery of the debtors' unsecured creditors following a successful reorganization," the company wrote in an 8-K filing with the U.S. Securities and Exchange Commission.

Plan structure

The one-time payouts range from zero, for creditor recoveries of 10% or less, to 200% of the employee's target amount for 100% creditor recovery.

"To receive target payouts under the performance plan, the leadership team must achieve a successful reorganization that provides a creditor recovery that would be approximately double that implied by the current value of Kodak's senior unsecured notes due 2013 and 2017," according to court documents.

The proposed target awards are as follows:

• 200% of base salary for the chairman and chief executive officer;

• 178% of base salary for the chief financial officer; and

• 16% to 206% of base salary for other key management employees.

Awards will be earned upon the earlier of the effective date of a confirmed plan of reorganization and the sale of all or substantially all of the debtors' assets.

Any earned amounts will be paid in cash and deferred stock units, according to the 8-K.

A hearing on the proposed plan is scheduled for 11 a.m. ET on Aug. 6.

Kodak is a Rochester, N.Y.-based imaging technology products and services provider to the photographic and graphic communications markets. The company filed for bankruptcy on Jan. 19. Its Chapter 11 case number is 12-10202.

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