Eastman Kodak Company Annual Report 2002: Annual Meeting and Proxy Statement

Saturday, November 22

2003 PROXY STATEMENT: REPORT OF THE AUDIT COMMITTEE

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The Audit Committee is composed solely of independent directors and operates under a written charter adopted by the Committee and the Board, and most recently amended in May, 2002. A copy of the Committee's charter is attached to this Proxy Statement as Exhibit I. The members of the Audit Committee, as of December 31, 2002, were Dr. Hector de J. Ruiz (Chairman), Martha Layne Collins, Timothy M. Donahue and Richard S. Braddock.

Committee Responsibilities

The Committee performs a number of key functions, including:

Overseeing and evaluating the Company's financial reporting process, including evaluating the adequacy of its system of disclosure controls and procedures and internal controls, and the acceptability and appropriateness of the financial accounting and disclosure principles it employs;
Selecting and retaining the Company's independent accountants, subject to approval of the Board and ratification by the shareholders;
Approving the budget for fees to be paid to the independent accountants for audit services and for appropriate non-audit services;
Overseeing the relationship between the Company and the independent accountants and acting as the Board's primary avenue of communication with them;
Serving as the Board's primary avenue of communication with the Company's internal auditors, with the express purpose of ensuring, through a variety of means, that they are adequately staffed and funded and free from any potentially improper influences;
Approving the audit plans of the Company's internal auditors and independent accountants;
Overseeing and reviewing the preparation and disclosure of the Company's consolidated financial statements and the preparation and filing of the Company's periodic financial reports, including their certification by the Company's Chief Executive Officer and Chief Financial Officer, as required;
Discussing with the independent accountants matters required to be discussed by Statement on Auditing Standards No. 61 'Communications with Audit Committee;'
Monitoring significant risks and exposures to the Company;
Monitoring legal and other liabilities to which the Company is exposed;
Overseeing the Company's ethics and compliance programs; and
Other matters as set forth in the Committee's charter.

The Committee's Response to Corporate Reform Initiatives

The year 2002 brought a wave of new legislation and regulations in the area of corporate governance and financial reporting as the U.S. government took unprecedented measures to set new standards for corporate behavior and to restore investor confidence. The Company has a long history of corporate responsibility and good citizenship, and has taken appropriate measures to respond to the new standards. The Audit Committee took a lead role in overseeing the efforts of the Company's Controller's Group, Internal Audit Department, Legal Department, and independent accountants in ensuring the Company's compliance with these reforms.

In particular, the Audit Committee was instrumental in monitoring the Company's compliance with an SEC order of June 27, 2002, which required the CEOs and CFOs of nearly 1000 large publicly traded companies to attest to the accuracy of their companies' most recent Annual Reports on Form 10-K and other subsequent "covered reports." The Company's Chief Executive Officer and Chief Financial Officer have signed all certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act in connection with the Company's reports on Form 10-Q and Form 10-K.

The Company has created a Corporate Disclosure Committee that is responsible for ensuring that all events potentially subject to disclosure are identified, and for reviewing those events and recommending to senior management whether they should be disclosed. This Committee leverages the efforts of the Controller's Group with respect to the Company's certification roll-up process undertaken at the end of each financial reporting period.

2002 ANNUAL REPORT MAIN

CHAIRMAN'S LETTER

FINANCIALS

2003 PROXY STATEMENT Letter to Shareholders Notice of the 2003 Annual Meeting of Shareholders Questions and Answers Householding of Disclosure Documents Audio Webcast of Annual Meeting Proposals to be Voted On Board of Directors Beneficial Security Ownership Table Transactions with Management Compensation of Named Executive Officers Report of the Audit Committee Report of the Corporate Responsibility and Governance Committee Report of the Executive Compensation and Development Committee Section 16(a) Beneficial Ownership Reporting Compliance Performance Graph - Shareholder Return Exhibit I - Audit Committee Charter 2003 Annual Meeting Map, Directions and Parking Information 2003 Proxy Card (PDF, 71KB)

CORPORATE INFORMATION

PDF OF PRINT EDITION

2003 PROXY STATEMENT: REPORT OF THE AUDIT COMMITTEE

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