Sample Business Contracts

Leave of Absence and Severance Agreement - Kellogg Co. and John D. Cook

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                           (PRESENTED: JULY 13, 2000)

This Leave of Absence and Severance Agreement hereafter, (the "Agreement") made
and entered into as of July 13, 2000, by and between Kellogg Company, a Delaware
corporation ("the Company") and John D. Cook, an individual ("Employee").


The purpose of this Leave of Absence and Severance Agreement is to set forth the
arrangements with respect to Employee's resignation as an officer of the
Company, and its subsidiaries, divisions and affiliates, and related matters,
effective July 21, 2000. As of that date, Employee is relieved of all his
titles, duties, responsibilities, and authority as an officer and otherwise with
respect to the Company. This date shall be considered the Employee's "last day


   A.    Except as otherwise provided in this Agreement, for the period
         beginning July 21, 2000, through August 31, 2000, Employee will be an
         "employee" ON A PAID LEAVE OF ABSENCE. During this paid leave of
         absence, Employee shall receive his regularly scheduled salary
         payments. Except as otherwise provided herein, benefits for Employee
         and his eligible dependents (as outlined in "A Guide To Your
         Medical/Mental/Prescription Drug Benefits", as amended, and under the
         Executive Income Survivor Plan, subject to the respective terms and
         provisions thereof, including any amendment or alteration thereof after
         the date of this Agreement) shall be continued during the paid leave of
         absence period ending August 31, 2000.

         For the period beginning September 1, 2000 and continuing through July
         20, 2003, Employee will be an "employee" on an UNPAID LEAVE OF ABSENCE
         for the sole purpose of stock option and stock grant vesting, as more
         particularly described in Paragraph D. During Employee's paid and
         unpaid leaves of absence, Employee shall not hold any title or position
         with the Company, and Employee shall have no titles, duties,
         responsibilities or authority with respect to the Company, its business
         and/or operations.

   B.    As more fully provided herein below, the lump sum payment described
         herein is in consideration of Employee's release of any and all cause
         or causes of action he has, has had, or may have against the Company.

         Within thirty (30) days of September 1, 2000 Employee shall be paid a
         lump sum payment equal to $2,121,600 (two million, one hundred
         twenty-one thousand, six hundred dollars), less applicable deductions,
         upon execution of this Agreement. The amount payable to Employee under
         this Agreement is consistent with the severance

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         terms of Employee's January 26, 1999 (revised from original January 20,
         1999) Employment Agreement.

         All tax liability, with respect to any and all payments or services
         received by Employee under this Agreement (other than employer
         withholding and employer payroll taxes), will be Employee's

         Upon payment of the lump sum amounts in this Agreement, Employee's
         right to all other benefits including, but not limited to, medical,
         dental, short- and long-term disability life/AD&D insurances,
         eligibility for pension credited service, EAP assistance, eligibility
         to participate in the Matching Grants Program, eligibility to
         contribute and/or receive matching for the savings and investment plan,
         except as specifically provided in this Agreement, shall terminate at
         the end of the PAID leave of absence period (i.e., August 31, 2000).

         Continued insurance coverage pursuant to COBRA regulations and
         conversion privileges, if any, will be available to Employee at the end
         of the paid leave of absence period. Employee shall be responsible for
         the payment of all premiums for any continuation period. Additional
         information will be sent at a later date.

C.       Within sixty (60) days of the last day worked, the Company will pay to
         Employee that sum which is equivalent to all unused, earned, accrued
         prorated vacation of Employee as of the last day worked. Employee shall
         not be entitled to any future vacation pay accruals from and after the
         last day worked.

D.       Employee's right to exercise all nonqualified stock options and stock
         grants pursuant to the Company the 1991 Key Employee Long-Term
         Incentive Plan ("the Plans"), shall continue only through July 20, 2003
         of the unpaid leave of absence period, subject to and administered in
         accordance with the respective option grants and Plan provisions.

         This includes employee's right to exercise the 200,000 (two hundred
         thousand) stock option grants awarded as part of Employee's sign-on
         bonus and Employment Agreement terms and conditions dated January 26,
         1999. The ability to utilize the accelerated ownership feature of the
         Plans shall continue for eligible stock options, throughout the unpaid
         leave of absence period, unless this feature is altered, modified
         and/or otherwise terminated earlier. Any stock option grants and/or
         stock grants not exercised in accordance with and subject to "the
         Plans", by July 20, 2003, shall expire.

E.       The Company will pay Employee for financial planning and/or tax advice
         for 2000 only, up to $10,000.

F.       Employee will be eligible, at the Company's expense, for secretarial
         assistance from a designated Kellogg employee during the consulting
         period as outlined in this Paragraph H of this Agreement.

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G.       The Company shall pay a one-time lump sum of $150,000 (one hundred
         fifty thousand dollars) for any and all moving expenses incurred
         post-termination. Applicable taxes and withholding shall be deducted
         from this lump sum amount. This lump sum relocation payment shall be
         paid within thirty (30) days of the end of the paid leave of absence

H.       Employee agrees to make himself available at mutually convenient times
         for consulting to the Company until December 31, 2000 or until he
         secures full-time employment, whichever is earlier. Employee agrees
         that no further consideration shall be paid for such consulting

I.       Employee will be eligible for outplacement assistance at the Company's
         expense, by a mutually agreeable agency.

J.       In further consideration of the following noncompete provisions,
         Employee agrees that monetary consideration and benefits provided under
         this Agreement includes separate consideration for agreeing to the
         following non-competition restrictions. Employee agrees that, for the
         respective Restricted Periods (as hereinafter defined), Employee shall

         (i) accept full-time employment, for or on behalf of the following
         companies that compete in the cereal, meat alternative and/or
         convenience foods business: Gardenburger, General Mills, Post, Quaker
         (foods), Nabisco, Frito Lay, Pillsbury, Malto Meal, Ralcorp Cereal,
         and/or other private label cereal companies and/or

         (ii) provide consulting services to, for or with any person, firm,
         partnership, corporation or other business relating directly or
         indirectly to the manufacture, production, distribution, selling and/or
         marketing of any of the products (as defined below) in the geographic
         areas (as defined herein), including specifically, but not limited to,
         the following competing companies: Gardenburger, Post, General Mills,
         Quaker, Nabisco, Frito Lay, Pillsbury, Malto Meal, Ralcorp Cereal
         and/or other private label cereal company. However, nothing in this
         paragraph shall prohibit Employee from providing consulting services to
         food and/or beverage companies and/or their respective divisions with
         respect to products other than the Products.

         (iii) directly or indirectly, permit any business firm which Employee,
         individually or jointly with others may own, manage, operate, or
         control, to engage in the manufacture, production, distribution, sale
         or marketing of any of the Products in the Geographic Area excluding
         ownership of publicly traded securities, and/or

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         (iv) directly or indirectly participate with any person, firm,
         partnership, corporation, or other business whose efforts and/or
         intentions include purchasing and/or considering or evaluating for
         purchase, acquisition, or takeover the Company and/or any of its
         divisions, subsidiaries, affiliates, or related entities during the
         Restricted Period within the Geographic Area, as defined under this
         Agreement and/or

         (v) directly or indirectly solicit or attempt to solicit for employment
         any employee, manager, director, officer of Kellogg Company or its
         affiliates or related businesses and/or

         (vi) call upon, solicit, divert or take away or attempt to take away
         the business or patronage of any customer of the Company.

         For purposes of this non-compete provision, the term "Products" shall
         mean any ready-to-eat cereal products, any meat alternative product,
         toaster pastries, cereal bars, granola bars, frozen waffles, crispy
         marshmallow squares, and/or any other similar grain-based convenience
         food. For purposes of this non-compete provision, the term "Geographic
         Area" shall mean any country in the world where the Company (including
         any subsidiary, division or affiliate thereof) manufactures, produces,
         distributes, sells or markets any of the Products at any time during
         the applicable Restricted Period (as defined below). For purposes of
         this paragraph, the Restricted Period with respect to the Products
         shall be two (2) years from the date of this Agreement.

         To prevent any misunderstanding and conflicts regarding activities that
         may violate these promises Employee has made in this noncompetition
         agreement, Employee may, at his option, consult with the Company
         (specifically, the Executive Vice President, Corporate Development,
         General Counsel and Secretary, Janet L. Kelly) to discuss proposed
         actions to determine whether or not they may be violative from the
         Company's point of view.

         Employee acknowledges that a violation of the terms of this Noncompete
         provision may give rise to irreparable injury to the Company
         inadequately compensable in damages, and accordingly, Employee agrees
         that the Company may seek injunctive relief against such breach or
         threatened breach, in addition to any other legal remedies which may be
         available, including recovery of monetary damages. In any action
         successfully brought by the Company against Employee to enforce the
         rights of the Company under this Noncompete provision, the Company
         shall also be entitled to recover cost of the action, (exclusive of
         attorney's fees) and the period of the restrictions stated above shall
         be deemed to commence upon the entry of the Court's Order for relief.

K.       As a result of these lump sum payments, the Company, its subsidiaries,
         divisions and affiliates (including the directors, officers and
         employees of any of them) shall have no further obligations of any kind
         or nature to Employee, including, without limitation,

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         obligations for any other termination, severance, bonus, etc., except
         as specifically provided herein, and except as may be provided under
         the applicable eligible Company benefit plans in accordance with their

L.       Employee further agrees to and shall return to the Company no later
         than his last day worked, without limitation, all files, documents,
         correspondence, memoranda, customer and client lists, prospect lists,
         subscription lists, contracts, pricing policies, operational methods,
         marketing plans or strategies, product development techniques or plans,
         business acquisition plans, employee records, technical processes,
         designs and design projects, inventions, research project
         presentations, proposals, quotations, data, notes, records,
         photographic slides, photographs, posters, manuals, brochures, internal
         publications, books, films, drawings, videos, sketches, plans,
         outlines, computer disks, computer files, work plans, specifications,
         credit cards, keys (including elevator, pass, building and door keys),
         identification cards, and any other documents, writings and materials
         that Employee came to possess or otherwise acquire as a result of
         and/or in connection with the Company. Should Employee later find any
         Company property in his possession, Employee agrees to immediately
         return it. Except for key/pass for access to temporary office/secretary
         and any materials used while consulting to Kellogg as per paragraph H.

M.       Employee agrees that he will not divulge any/all proprietary and/or
         confidential business information, except to the extent required
         pursuant to a legal subpoena or a legal proceeding. Employee agrees
         that any and all information regarding the terms and conditions of this
         Agreement shall be kept confidential and not disclosed to anyone,
         except Employee's spouse, tax accountant and/or attorney.

N.       Employee agrees not to take any wrongful action with the intention of
         damaging the Company. Employee agrees to cooperate with the Company in
         connection with any and all existing or future investigations or
         litigation of any nature brought against it or its affiliates involving
         events which occurred during his employment with the Company. The
         Company will consider the convenience to the Employee and his other
         commitments in the timing and nature of its request for his cooperation
         hereunder and he shall not be considered in breach of his obligations
         hereunder if these commitments preclude his availability to the Company
         at any time or place. Employee agrees to notify the Company immediately
         if subpoenaed or asked to appear as a witness in any matter related to
         the Company or its affiliates. Nothing herein shall prevent Employee
         from communicating with or participating in any government

O.       Employee has carefully read this Leave of Absence and Severance
         Agreement and understands its contents. Employee recognizes that he
         will have no further job responsibilities at the Company.

P.       Subject to the Company's performance of its obligations under this
         Agreement, on behalf of Employee, his heirs, executors and
         administrators, Employee irrevocably and

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         unconditionally releases, waives and forever discharges the Company,
         its owners, stockholders, affiliates, subsidiaries, agents, directors,
         officers, employees, attorneys, representatives, insurance carriers,
         attorneys, advisors, and their predecessors, successors, heirs,
         executors, administrators and assigns from any and all claims, demands
         and causes of action he now has or may claim to now have arising from
         or relating in any way to his employment, leave of absence, or
         separation of employment. This includes, but is not limited to, all
         claims under the Age Discrimination in Employment Act of 1967 (as
         amended), Title VII of the Civil Rights Act of 1964, as amended,
         Section 1981 of the Civil Rights Act of 1986, as amended, the Civil
         Rights Act of 1991, the Elliott-Larsen Civil Rights Act and any other
         employment discrimination laws, the Family Medical Leave Act of 1993,
         the Rehabilitation Act of 1993, the Equal Pay Act of 1963, the Uniform
         Services Employment and Reemployment Rights Act of 1964, Americans with
         Disabilities Act, the Workers Adjustment and Retraining Notification
         Act (WARN), claims for attorney fees, and any common law or other
         federal, state or local law or ordinance.

         Employee agrees that this Leave of Absence and Severance Agreement is
         intended to and shall preclude any claim that his separation was in
         retaliation for exercising any right to which Employee is entitled
         under the provisions of an employee benefit plan, or for the purpose of
         interfering with the attainment of any right to which Employee may
         become entitled under such a plan or under the Employee Retirement
         Income Security Act of 1974, as amended, in violation of Section 510 of
         ERISA, 29 USC Sec. 1140, except as specifically altered and/or modified
         by the Leave of Absence and Severance Agreement. Nothing in the
         Agreement shall be construed as barring any other claims under Section
         502 ERISA.

         Employee agrees he has not filed any charges, claims, or lawsuits
         against the Company involving any aspect of his employment that have
         not been terminated as of the date of this Agreement. If Employee has
         filed any charges, claims, or lawsuits against the Company, Employee
         agrees to seek immediate dismissal with prejudice and provide written
         confirmation immediately (i.e., court order, and/or agency
         determination) as a condition to receiving any benefits under this
         Agreement. Employee additionally waives and releases any right he may
         have to recover in any lawsuit or proceeding brought by him, an
         administrative agency, or any other person on his behalf or which
         includes him in any class involving any aspect of his employment. If
         Employee intentionally breaches any portion of this Paragraph, Employee
         acknowledges that he will be liable for all expenses, including costs
         and reasonable attorney's fees incurred by any entity released in
         defending the lawsuit or claim, regardless of the outcome.

Q.       Employee has been advised to seek legal counsel to understand its full
         force and effect. Employee has been given the opportunity to consult
         with a lawyer.

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R.       Employee agrees and acknowledges that the consideration (severance pay
         and benefits) described in this Agreement is in full settlement of any
         and all such aforementioned claims, demands and causes of action he has
         or may have.

S.       The Company agrees to indemnify, hold and save harmless Employee from
         and against any and all claims, liens, demands, damages, liability,
         actions, causes of action, cooperation with future investigations,
         settlement costs, and approved attorney's fees and expenses sustained
         or asserted against Employee arising out of, resulting from, or
         attributable to any acts or omissions or alleged acts or omissions of
         Employee during his employment with the Company or in connection with
         the Employee's fulfillment of his obligations under Paragraph H of this
         Agreement; provided however, that the Company shall not be liable
         hereunder to indemnify or hold and save harmless Employee against
         liability for damages arising during the term of his employment
         involving willful misconduct, theft, malfeasance, unlawful activity,
         and/or immorality. The Company hereby releases Employee from any and
         all claims, liens, demands, damages, liability, actions, causes of
         action it may have against Employee as a result of Employee's
         employment, or any services rendered by him in the performance of his
         duties for the Company.

T.       Employee has disclosed to the Company any information in his possession
         concerning any conduct involving the Company that Employee has any
         reason to believe involves any false claims to the United States or is
         or may be unlawful or violates Company Policy in any respect.

U.       Employee signs this Leave of Absence and Severance Agreement knowingly
         and voluntarily and without coercion with full intent to release the
         Company, its subsidiaries, affiliates, agents, employees, directors,
         shareholders and any other parties acting on behalf of the Company, to
         the extent provided in this Agreement.

V.       Employee understands and agrees that signing this Leave of Absence and
         Severance Agreement and accepting the consideration for it shall not be
         deemed or construed as an admission of liability or responsibility at
         any time for any purpose. Liability for any and all claims is expressly
         denied by Kellogg Company.

W.       Employee also understands that the Company is not obligated to offer
         employment to him now or in the future.

X.       Employee understands that the Nondisclosure Confidentiality Agreement
         that he signed on his date of hire shall remain in full force and
         effect indefinitely.

Y.       Employee and Company agree, subject to any obligations under applicable
         law, that neither will make or cause to be made any statements that
         disparage each other and/or damage the reputation of the Company or any
         of its affiliates, agents, officers, directors, managers, or employees.

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Z.       Employee agrees that if any provision of this Leaves of Absence and
         Severance Agreement is invalid or unenforceable, it will not affect the
         validity or enforceability of any other provision of this Agreement
         which shall remain in full force and effect.

AA       Employee agrees that the construction, interpretation, and performance
         of this Agreement shall be governed by the laws of Michigan, including
         conflict of laws. It is agreed that any controversy, claim or dispute
         between the parties, directly or indirectly, concerning this Agreement
         or the breach thereof shall only be resolved in the Circuit Court of
         Calhoun County, or the United States District Court for the Western
         District of Michigan, whichever court has jurisdiction over the subject
         matter thereof, and the parties hereby submit to the jurisdiction of
         said courts.

BB       For purposes of any construction or interpretation of this Leave of
         Absence and Severance Agreement, all terms and provisions thereof shall
         be deemed to have been mutually drafted by both of the parties.

CC       Employee acknowledges and agrees that this is the entire Leave of
         Absence and Severance Agreement and the only promises made to him are
         those contained within this document.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and date first above written in Battle Creek, Michigan.


    ---------------------------------            -------------------------------
Carlos M. Gutierrez                              John D. Cook
Chairman of the Board,
President and Chief Executive Officer

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Date                                             Date

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