Note 19 - Stock-based Compensation

12 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 19: STOCK-BASED COMPENSATION

2013 Omnibus Incentive Plan

Kodak’s stock incentive plan consists of the 2013 Omnibus Incentive Plan (the “2013 Plan”) which replaces all prior stock-based employee benefit plans (including the 2005 Omnibus Long-Term Compensation Plan and the 2000 Omnibus Long-Term Compensation Plan). The 2013 Plan is administered by the Executive Compensation Committee of the Board of Directors, and the Board of Directors also has the authority and responsibility granted to the Executive Compensation Committee with respect to the 2013 Plan.

Awards under the 2013 Plan may be cash-based or stock-based.  Officers, directors and employees of the Company and its consolidated subsidiaries are eligible to receive awards.  Stock options are generally non-qualified, are at exercise prices not less than 100% of the per share fair market value on the date of grant and expire seven years after the grant date.  Stock-based compensation awards granted under Kodak’s stock incentive plan are generally subject to a three-year vesting period from the date of grant.  Unless sooner terminated by the Executive Compensation Committee, no awards may be granted under the 2013 Plan after the tenth anniversary of the Effective Date.

The maximum number of shares of common stock that may be issued under the 2013 Plan is approximately 4.8 million. In addition, under the 2013 Plan, the maximum number of shares available for the grant of incentive stock options is 2.0 million shares. The maximum number of shares as to which stock options or stock appreciation rights may be granted to any one person under the 2013 Plan in any calendar year is 2.0 million shares. The maximum number of performance-based compensation awards that may be granted to any one employee under the 2013 Plan in any calendar year is 1.0 million shares or, in the event such award is paid in cash, $2.5 million. The maximum number of awards that may be granted to any non-employee director under the 2013 Plan in any calendar year may not exceed a number of awards with a grant date fair value of $900,000, computed as of the grant date.

Compensation expense is recognized on a straight-line basis over the service or performance period for each separately vesting tranche of the award and is adjusted for actual forfeitures before vesting.  Kodak assesses the likelihood that performance-based shares will be earned based on the probability of meeting the performance criteria.  For those performance-based awards that are deemed probable of achievement, expense is recorded, and for those awards that are deemed not probable of achievement, no expense is recorded. Kodak assesses the probability of achievement each quarter.

For the year ended December 31, 2014, compensation expense related to unvested stock awards was $8 million, of which $7 million was associated with unvested restricted stock unit awards and $1 million was associated with unvested stock options.  Compensation expense for the four months ended December 31, 2013 of $1 million was related to unvested restricted awards as Kodak did not issue any stock option awards during that period.

As of December 31, 2014 there was $9 million of total unrecognized compensation cost related to unvested restricted stock unit awards and $5 million of total unrecognized compensation cost related to unvested stock option awards.  The unrecognized compensation cost related to unvested restricted stock unit awards is expected to be recognized over a weighted-average period of 1.7 years.  The unrecognized compensation cost related to unvested stock option awards is expected to be recognized over a weighted-average period of 1.8 years.

Restricted Stock Units

Restricted stock units are payable in shares of the Company common stock upon vesting.  The fair value is based on the closing market price of the Company’s stock on the grant date.

The following table summarizes information about restricted stock unit activity since emergence:

	Number of		Weighted-Average
	Restricted		Grant Date
	Stock Units		Fair Values
Outstanding on September  3, 2013		-		-
Granted		426,503	$	16.36
Vested		53,043	$	14.11
Outstanding on December 31, 2013		373,460	$	16.68
Granted		465,491	$	24.16
Vested		126,649	$	14.11
Forfeited		26,872	$	18.69
Outstanding on December 31, 2014		685,430	$	22.15

Predecessor

Prior to the Effective Date, Kodak had shares or share-based awards outstanding under two share-based employee compensation plans consisting of the 2005 Omnibus Long-Term Compensation Plan (the “2005 Plan”), and the 2000 Omnibus Long-Term Compensation Plan (the “2000 Plan”). In conjunction with the Plan (see Note 24, “Emergence from Voluntary Reorganization under Chapter 11 Proceedings”), all shares, options, restricted shares and other share-based awards that were outstanding on the Effective Date were canceled.

Kodak recognized stock-based compensation expense in the amount of $3 million and $7 million for the eight months ended August 31, 2013, and year ended December 31, 2012, respectively.  There were no proceeds from the issuance of common stock through stock option plans for the eight months ended August 31, 2013 or the year ended December 31, 2012.