Kodak’s stock incentive plan is the 2013 Omnibus Incentive Plan (as restated and further amended, the “2013 Plan”). The 2013 Plan is administered by the Compensation, Nominating and Governance Committee of the Board of Directors.

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 equal to or greater than the closing price of Kodak’s stock on the date of grant and expire seven years or ten 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, or a later date as determined by the Compensation, Nominating and Governance Committee. Awards are subject to settlement in newly-issued shares of common stock. Unless sooner terminated by the Compensation, Nominating and Governance Committee, no awards may be granted under the 2013 Plan after May 15, 2034.

The maximum number of shares of common stock available for grant under the 2013 Plan is 20.0 million. For stock option grants awarded on or prior to May 19, 2021, for the number of shares available for grant under the 2013 Plan, a stock option counted as a fraction of a share, based on the fair market value of the stock option relative to the closing stock price on the date of grant. For stock option awards granted after May 19, 2021, a stock option counts as one share. Each restricted stock unit and restricted stock award counts as one share. The total number of shares of common stock registered for issuance under the 2013 Plan is approximately 13.5 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 2.5 million shares.

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 $450,000, 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.

Restricted stock units and restricted stock awards are payable in shares of the Company common stock upon vesting. The fair value of restricted stock units and restricted stock awards without a market condition is based on the closing market price of the Company’s stock on the grant date. The following inputs were used for restricted stock units issued in 2023 with a market condition (there were no restricted stock units issued in 2024 or 2022 with a market condition):


	Year Ended
	December 31,
	2023
Fair value of restricted stock units granted	$	3.03
Risk-free interest rate		3.80	%
Term (in years)		3.0
Volatility		60	%
Weighted-average expected dividend yield		0.00	%

Compensation cost related to restricted stock units and restricted stock awards was $6 million, $4 million and $4 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The weighted average grant date fair value of restricted stock units and awards granted for the years ended December 31, 2024, 2023 and 2022 was $5.29, $3.90 and $4.60, respectively. The total fair value of restricted stock units and awards that vested was $8 million, $4 million and $5 million for the years ended December 31, 2024, 2023 and 2022. As of December 31, 2024, there was $4 million of unrecognized compensation cost related to restricted stock units. The cost is expected to be recognized over a weighted average period of 1.5 years.

The following table summarizes information about unvested restricted stock unit and award activity for the year ended December 31, 2024:


	Restricted Stock Units/Awards		Weighted-Average Grant Date Fair Values
Outstanding on December 31, 2023		2,537,584	$	4.44
Granted		715,022	$	5.29
Vested		1,351,572	$	5.00
Forfeited		3,334	$	7.23
Outstanding on December 31, 2024		1,897,700	$	4.36

In addition to the outstanding unvested restricted stock units and awards per the above table, there are also 443,057 vested restricted stock units outstanding as of December 31, 2024 with a weighted average grant date fair value of $5.80.

The following table summarizes information about stock option activity for the year ended December 31, 2024:


					Average
			Weighted		Remaining		Aggregate
	Shares		Exercise		Contractual		Intrinsic
	Under		Price		Life		Value
	Option		Per Share		(Years)		($ millions)
Outstanding on December 31, 2023		6,748,108	$	6.75
Granted		—	$	—
Expired		479,350	$	12.46
Exercised		46,441	$	3.53
Outstanding on December 31, 2024		6,222,317	$	6.34		2.57	$	13
Exercisable on December 31, 2024		6,180,650	$	6.35		2.55	$	13
Expected to vest December 31, 2024		6,222,317	$	6.34		2.57	$	13

The aggregate intrinsic value represents the total pretax intrinsic value that option holders would have received had all option holders exercised their options on the last trading day of the year. The aggregate intrinsic value is the difference between the Kodak closing stock price on the last trading day of the year and the exercise price, multiplied by the number of in-the-money options. The intrinsic values of options outstanding, exercisable or expected to vest as of December 31, 2024 were each $13 million.

There were no options granted in the years ended December 31, 2024 and 2022. The weighted average grant date fair value of options granted for the year ended December 31, 2023 was $2.87. The total fair value of options that vested during the years ended December 31, 2024, 2023 and 2022 was less than $1 million, $1 million and $2 million, respectively. Compensation cost related to stock options for the years ended December 31, 2024, 2023 and 2022 was less than $1 million, $3 million and $1 million, respectively.

As of December 31, 2024, there was less than $1 million of unrecognized compensation cost related to stock options, which will be recognized over a weighted average period of 1.3 years.

There were less than 1 million options exercised in the years ended December 31, 2024, 2023 and 2022.

Kodak utilizes the Black-Scholes option valuation model to estimate the fair value of stock options that do not have a market condition for award vesting and the lattice-based method to estimate the fair value of stock options with a market condition for award vesting.

The expected term of options granted is the period of time the options are expected to be outstanding and is calculated using a simplified method based on the option’s vesting period and original contractual term. The Company uses the historical volatility of the Company’s stock to estimate expected volatility. The risk-free rate was based on the yield on U.S. Treasury notes with a term equal to the option’s expected term.

The following inputs were used for the valuation of stock option grants issued without a market condition in the year ended December 31, 2023 (there were no stock option grants issued in the years ended December 31, 2024 and 2022):


	Year Ended
	December 31,
	2023
Weighted-average fair value of options granted	$	3.48
Weighted-average risk-free interest rate		3.75	%
Expected option lives (in years)		4.5
Weighted-average volatility		120	%
Expected dividend yield		0	%

The following inputs were used in the lattice-based valuation of stock option grants issued with a market condition in 2023:


	Year Ended
	December 31,
	2023
Fair value of options granted	$	2.25
Risk-free interest rate		3.80	%
Term (in years)		3.0
Volatility		60	%
Weighted-average expected dividend yield		0.00	%

On February 16, 2023, the Compensation, Nominating and Governance Committee of the Board of Directors approved extending the expiration dates for non-qualified stock options awarded between 2016 and 2020 to 21 currently active employees and directors. No other terms were modified. The contractual terms were extended from approximately seven years to approximately ten years. In November 2023 the extended expiration date of certain options was rescinded. The change in the terms of the awards was accounted for as a modification. As a result of the modification, Kodak recognized $2 million of incremental compensation expense in the year-ended 2023, reflecting the incremental fair value of the 3.5 million awards that were modified over the fair value of the original awards immediately before the modification. The fair value of the awards was calculated using a binomial lattice-based valuation model. The key assumptions used in the fair value calculations were:

On February 26, 2021 James V. Continenza, Executive Chairman and Chief Executive Officer of Kodak, and the Company entered into an Executive Chairman and CEO Agreement, as amended on November 29, 2023 and November 30, 2022 (the “Employment Agreement”). The Employment Agreement is effective for a three-year period ending on February 26, 2027. Pursuant to the Employment Agreement, Mr. Continenza will not have the right to exercise any stock options granted to him in February 2019 or July 2020 to the extent that, after giving effect to the issuance of the Company’s common stock resulting from such exercise, Mr. Continenza (together with his affiliates and any person acting as a group), would beneficially own more than 4.99% of the then issued and outstanding shares of Common Stock (the “Beneficial Ownership Limitation”). The Beneficial Ownership Limitation shall cease and be of no further force and effect upon a Change of Control (as such term is defined in the Company’s Amended and Restated 2013 Omnibus Incentive Plan). The restrictions on the exercisability of previous stock option awards were a modification of the original awards. As the February 2019 and July 2020 stock options were fully vested prior to the modification date and there was no incremental value provided in the modification, no additional compensation expense was recognized.