Effect on Shareholders We are not able to predict with any degree of certainty the impact the program will have on your rights as a shareholder because we are unable to predict how many option holders will exchange their options or what the future market price of the Company’s stock will be. The program was designed to be value neutral to you, and to avoid the dilution in ownership that normally results when all options are exchanged on a one-for-one basis. There is a risk that employees will not see the Stock Option Exchange Program as a sufficient incentive to motivate and retain them as employees. Also, if the price of the Company’s stock rises after the new options are granted, then option holders will be more likely to exercise the new options than the current options and the exercises are likely to occur earlier. As additional shares of our common stock are issued upon option exercises, existing shareholders will be proportionately diluted.

Proposed Plan Amendments

Generally, three plan amendments are necessary to implement the Stock Option Exchange Program.

The first of these amendments addresses the permissibility of implementing the program. Both the Eastman Kodak Company 1995 Omnibus Long-Term Compensation Plan and the 2000 Omnibus Long-Term Compensation Plan presently prohibit the cancellation of a stock option in exchange for the issuance of a new option with a lower exercise price. The remaining stock option plans, the Wage Dividend Plan, the Kodak Stock Option Plan and the Eastman Kodak Company 1990 Omnibus Long-Term Compensation Plan, do not either expressly permit or prohibit this kind of exchange. Consequently, we are asking you to approve an amendment to each of the plans so that we can on a one-time basis offer the Stock Option Exchange Program for the reasons previously described.

The second plan amendment affects the Eastman Kodak Company 1990 Omnibus Long-Term Compensation Plan and the Eastman Kodak Company 1995 Omnibus Long-Term Compensation Plan. This amendment will allow us to reissue new options under these plans in exchange for those options that are cancelled. This is necessary because the term of each of these plans has expired. With the exception of our existing stock option plan, the 2000 Omnibus Long-Term Compensation Plan, any shares underlying surrendered stock options which are not regranted under the terms of the exchange program will be permanently cancelled and, therefore, will not be available for regrant.

The final plan amendment affects the Wage Dividend Plan and the Eastman Kodak Company 1995 Omnibus Long-Term Compensation Plan. Both plans presently prohibit shares related to awards that are cancelled from being reissued under the plan. We are asking your approval to amend both plans to except the awards granted under the Stock Option Exchange Program from this prohibition.

The Board of Directors recommends a vote FOR the proposal.