COMPOSITION
The Corporate Responsibility and Governance Committee is composed of six directors, each of whom meets the definition of “independence” set forth in the NYSE’s corporate governance listing standards. During 2003, the Committee met five times. The Charter of the Committee can be accessed electronically in the “Corporate Governance” section of www.kodak.com/go/governance.

RESPONSIBILITIES
The Committee is responsible for: (i) overseeing the Company’s corporate governance structure; (ii) identifying, screening and recommending director candidates to the Board; (iii) administering the Director Selection Process; (iv) developing the Company’s Director Qualification Standards; (v) overseeing the annual evaluation of the Board and each of its committees; (vi) overseeing and reviewing the Company’s Corporate Governance Guidelines and Director Independence Standards; (vii) assisting the Board in its determinations of director independence; (viii) recommending to the Board the compensation for directors; (ix) recommending committee assignments, including committee chairs, to the full Board for approval; and (x) overseeing the Company’s activities in the areas of environmental and social responsibility, diversity and equal employment opportunity. A complete description of the Committee’s responsibilities can be found in its charter.

NEW LEGISLATIVE AND REGULATORY REQUIREMENTS
The Committee spent much of its time this year planning for the Company’s compliance with the Sarbanes-Oxley Act, the NYSE’s final corporate governance listing standards and the SEC’s new disclosure rules. As a result of this work, in February 2004, the Committee and the Board took a number of actions regarding the Company’s corporate governance policies, practices and processes. These include: (i) adopting restated Corporate Governance Guidelines; (ii) approving amendments to the charters of the Audit Committee, the Executive Compensation and Development Committee, and the Corporate Responsibility and Governance Committee; (iii) creating new Director Independence Standards; (iv) developing Director Qualification Standards; (v) implementing a Director Selection Process; and (vi) formulating a Director Attendance Policy. You can access the Company’s Corporate Governance Guidelines, charters, Director Independence Standards, Director Qualification Standards, Director Selection Process and Director Attendance Policy in the “Corporate Governance” section of www.kodak.com/go/governance.

DIVERSITY INITIATIVES
In December of 2003, the Company’s Diversity Advisory Panel met with the Board to present its final recommendations. This seven-member, blue-ribbon panel was launched in 2001 to provide advice on the Company’s comprehensive diversity strategy and assess future diversity trends and the potential impact on Kodak. Based on the panel’s final recommendations, the Committee recommended a number of specific measures to the full Board for adoption. These measures were approved by the full Board at its February 2004 meeting. For more information regarding the Company’s Diversity Advisory Panel and Kodak’s diversity intiatives, see the section entitled “2003 Global Diversity” on page 140.

CHIEF GOVERNANCE OFFICER
With the consent of the Committee, Laurence L. Hickey, Assistant Secretary, was named to the new position of Chief Governance Officer effective July 15, 2003. While the Company has a strong tradition of good corporate governance, this action was taken in part to heighten the awareness and importance of good corporate governance within the Company. The functions of the Chief Governance Officer include monitoring compliance with legislative and regulatory requirements affecting corporate governance, performing ongoing assessment of the Board’s structure and governance practices, periodically auditing the Company’s compliance with its governance principles and policies, and keeping both the Board and senior management current on corporate governance laws, trends and best practices. The position reports to both the Committee and to the Company’s Corporate Secretary.

DIRECTOR COMPENSATION
During the later part of 2003, the Committee began a review of the Board’s Director Compensation Program. To assist it in this effort, the Committee retained an external independent compensation consultant. As a first step in this process, the Committee developed the following Director Compensation Principles:

• Pay should represent a moderately important element of Kodak’s director value proposition.
• Pay levels should generally target near the market median, and pay mix should be consistent with market considerations.
• Pay levels should be differentiated based on the time demands on some members’ roles, and the Board will ensure regular rotation of certain of these roles.
• The program design should ensure that rewards are tied to the successful performance of Kodak stock, and the mix of pay should allow flexibility and board diversity.
• To the extent practical, Kodak’s director compensation principles should parallel those of the Company’s executive compensation program.

  These principles will provide the foundation for developing and continuing a new Board compensation program. The Committee anticipates making a recommendation to the Board concerning the details of the program in the first quarter of 2004.

OTHER KEY ACTIONS LAST YEAR
Other actions taken by the Committee last year include:

• conducting a review of, and subsequently revising, its charter;
• developing and implementing a Board Evaluation Process;
• preparing and conducting an evaluation of the Board’s performance, reporting the results of the evaluation to the full Board for its discussion and utilizing this feedback to produce an action plan to further enhance the Board’s effectiveness;
• preparing and conducting an evaluation of the Committee’s own performance, discussing the results of this evaluation and developing an action plan from these discussions to further enhance the Committee’s performance;
• overseeing the Company’s performance against its five-year environmental goals;
• developing, and recommending to the full Board for approval, a realignment of the Board’s committee assignments; and
• creating a statement of Board responsibilities for inclusion in the Company’s Corporate Governance Guidelines.

The Committee is committed to continuous improvement in the Company’s corporate governance policies, practices and procedures, and believes that strong corporate governance is a fundamental ingredient to building shareholder value.