Resignation Agreement and General Release - Kellogg Co. and Janet Langford Kelly
RESIGNATION AGREEMENT AND GENERAL RELEASE
This Resignation Agreement and General Release ("Agreement") is hereby
made and entered into by and between Janet Langford Kelly ("Employee"), whose
address is 9534 W. Gull Lake Drive, Richland, MI 49083, and Kellogg Company, a
Delaware corporation ("Kellogg" or the "Company").
WHEREAS, Employee has notified Kellogg that she has determined to
resign her employment with Kellogg on September 1, 2003 (the "Departure Date");
WHEREAS, the parties desire to set forth and clarify the terms under
which Employee plans to and will terminate her employment with Kellogg;
THEREFORE, in consideration of the mutual promises contained herein,
the parties agree to the following:
1. Employee's Duties and Responsibilities. Employee agrees that from the date
of this Agreement until the Departure Date, Employee shall (i) perform her
regular duties and (ii) transition her work to her successor as reasonably
requested by Kellogg. Employee's active employment with Kellogg shall
terminate upon the Departure Date.
2. Consideration. In consideration for Employee entering into this Agreement,
Kellogg agrees to provide Employee with the consideration described below
(a). From the date of this Agreement through the Departure Date, Employee
shall receive salary and benefits at current levels, provided that she
and her eligible dependents remain eligible for benefits according to
the terms of the relevant benefit plans, which may be altered, amended
or terminated at any time. Kellogg reserves the right to amend, modify
and/or terminate any of its benefit plans, and Employee shall be
subject to any such changes; provided, however, Employee shall only be
subject to any such changes that affect all similarly situated
employees of Kellogg (e.g., all senior managers).
(b). From and after the Departure Date, Employee will be placed on a leave
of absence and Kellogg agrees to provide Employee the following
compensation and benefits: (i) base pay at her current level of
$480,600 per year until January 7, 2006, paid in accordance with
Kellogg's then-current payroll practices, (ii) the following bonuses,
each paid at the time and in the manner that bonuses are paid for
active employees: (a) for 2003, Employee shall receive a bonus
calculated using her target of 75% as modified by the application of
an individual performance factor of 100% and the Company performance
factor actually used by the Company in calculating 2003 bonuses for
Corporate Center employees and (b) for each of 2004 and 2005, a bonus
of 75% of annual base salary; (iii) within thirty (30) days of the
Departure Date, that sum which is equivalent to all unused and accrued
vacation of Employee as of the Departure Date and a lump sum payment
of $150,000 as a relocation allowance; (iv) within sixty (60) days of
the Departure Date, a lump sum payment of her account balance in the
Kellogg Company Supplemental Savings and Investment Plan (Restoration
Plan), and (v) on the earlier of the time 2003 bonus payments are paid
to other senior executives of Kellogg and April 1, 2004, Employee's
award under the 2001-2003 Executive Performance Plan calculated by
adjusting the award opportunity previously communicated to Employee by
the actual performance of Kellogg against the targets set therein, as
though Employee were still actively employed by Kellogg at the time of
the payment of such award. It is agreed that the salary and bonus paid
hereunder will be considered "compensation" for the purposes of
Employee's retirement plan with Kellogg, and that she will accordingly
be entitled to have approximately 11 and 1/3 years of service used in
calculating her final pension, which will be calculated and paid,
commencing at age 55, as though Employee had remained actively
employed by Kellogg until attaining age 55 and retired from Kellogg at
that time. Employee will continue to vest in her stock options and
restricted stock awards until January 7, 2006, notwithstanding
anything to the contrary contained in any such agreement or award.
Employee will be allowed to continue her participation in the
following Employer-sponsored employee benefit programs to the extent
they are provided to Kellogg employees and otherwise in accordance
with the terms of the respective plan until January 7, 2006: medical,
dental, prescription drug, life insurance and voluntary programs
(including supplemental life insurance and long-term care). Employee
will be able to continue such participation so long as such Employee
(i) pays the monthly premium or contribution rate applicable to
"active" employees, (ii) complies with the other terms of the
respective plan, and (iii) complies with the terms of this Agreement
and the Release of Claims. Thereafter, the Employee may be eligible
for continuation coverage under any group health plan under the
federal law known as "COBRA.." Kellogg shall provide Employee with
outplacement assistance for the term and at the level customarily
provided by Kellogg to senior executives of the Company. Kellogg shall
continue Employee's participation in the Executive Financial Planning
program at her current level of participation for the 2004 calendar
year.
Employee acknowledges and agrees that (i) usual and customary
withholding for tax purposes will be withheld from any payments made
to Employee pursuant to this Agreement, to the extent required by law,
and (ii) 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
responsibility.
3. Continuation of Indemnification and Insurance. Kellogg shall continue
to indemnify Employee in accordance with its By-Laws to the fullest
extent permitted by law for her acts while an officer of the Company,
and shall continue to provide coverage under Kellogg's Directors and
Officers Insurance policy for such acts.
4. Benefit Participation and No Other Compensation or Benefits Owing.
Except as otherwise expressly provided herein, Employee acknowledges
that after the Departure Date, Employee's participation will cease in
all of the benefit plans of Kellogg. Employee further acknowledges
that, except as expressly provided herein, Employee is not and will
not be due any other compensation or benefits whatsoever from Kellogg.
In addition, Kellogg shall have no further obligations of any other
kind or nature to Employee (other than obligations under this
Agreement and claims arising after the date Employee signs this
Agreement, including a claim to enforce the terms of this Agreement).
For avoidance of doubt, Employee shall have no rights in, and waives
any benefit whatsoever under the Executive Performance Plan for
performance years 2002-2004, 2003-2005 or any other performance years,
and any relocation policy. Notwithstanding the foregoing, Employee
will be entitled to receive benefits, including any right to exercise
any conversion privileges, that are vested and accrued prior to the
Effective Date pursuant to benefit plans and programs of Kellogg.
5. No Other Representations. Employee represents and warrants that no
promise or inducement has been offered or made except as herein set
forth and that Employee is entering into and executing this Agreement
without reliance on any statement or representation not set forth
within this Agreement by Kellogg, or any person(s) acting on its
behalf.
6. Non-Assignment of Rights. Employee represents and warrants that
Employee has not sold, assigned, transferred, conveyed or otherwise
disposed of to any third party, by operation of law or otherwise, any
action, cause of action, debt, obligation, contract, agreement,
covenant, guarantee, judgment, damage, claim, counterclaim, liability
or demand of any nature whatsoever relating to any matter covered in
this Agreement.
7. Non-Compete. In further consideration of the foregoing, Employee
agrees that, for a period of two years beginning with the date of this
Agreement (the "Restricted Period"), Employee shall not:
(a) directly or indirectly, accept any employment, consult for or
with, or otherwise provide or perform any services of any nature
to, for or on behalf of any person, firm, partnership,
corporation or other business or entity that manufactures,
produces, distributes, sells or markets any of the Products (as
hereinafter defined) in the Geographic Area (as hereinafter
defined), including, without limitation, General Mills, Kraft,
PepsiCo, Malto Meal, Ralcorp, Nestle, Parmalat, Campbell's and
Danone, other than the retail sale of Products through a
restaurant or store, which shall not be prohibited hereby;
(b) directly or indirectly, permit any business, entity or
organization which Employee, individually or jointly with others,
owns, manages, operates, or controls, to engage in the
manufacture, production, distribution, sale or marketing of any
of the Products in the Geographic Area, other than the retail
sale of Products through a restaurant or store, which shall not
be prohibited hereby.
For purposes of this Paragraph, the term "Products" shall mean
ready-to-eat cereal products, toaster pastries, cereal bars,
granola bars, frozen waffles, crispy marshmallow squares,
cookies, crackers, ice cream cones, any other grain-based
convenience food, fruit snacks or meat substitutes. For purposes
of this Paragraph, the term "Geographic Area" shall mean any
country in the world where Kellogg manufactures, produces,
distributes, sells or markets any of the Products at any time
during the applicable Restricted Period.
8. Non-Solicitation. In further consideration of the foregoing, Employee
agrees that, for a period of two years beginning with the date of this
Agreement, Employee shall not, without the prior written consent of
the General Counsel of Kellogg, directly or indirectly employ, or
solicit the employment of (whether as an employee, officer, director,
agent, consultant or independent contractor) any person who is or, if
such person resigned, was at any time during the previous year an
officer, director, or employee of the Company (except pursuant to an
advertisement of general solicitation not directed at such parties).
For avoidance of doubt, the parties acknowledge that Employee shall
not be deemed to "employ" any person unless Employee is involved or
has otherwise provided input into the decision to hire such
individual. For example, if Employee is a senior executive of a
company, and that company hires an employee of Kellogg without
employee's involvement or input, Employee will not be deemed to have
"employed" such person.
9. Non-Disparagement. Employee agrees not to engage in any form of
conduct or make any statements or representations that disparage,
portray in a negative light, or otherwise impair the reputation of the
Company or its Senior Executives (as defined below). The Company
agrees that neither it nor any of its Senior Executives shall engage
in any form of conduct or make any statements or representations that
disparage, portray in a negative light, or otherwise impair the
reputation of Employee. The Company agrees to promptly inform, in
writing, each of the Senior Executives of his or her obligations under
this Section 9. "Senior Executives" means Carlos Gutierrez, David
Mackay, Alan Harris, King Pouw, John Bryant, Larry Pilon, Celeste
Clark, Gary Pilnick, Jeff Montie, Brad Davidson and Kevin Smith. For
the purposes of this Section, the actions of the Company shall be
those taken by or at the direction of any officer of the Kellogg
Company.
10. Employment Status. Employee understands and agrees that (i) Employee's
active employment with the Company ends effective the Departure Date;
and (ii) the Company has no obligation to reinstate, rehire, reemploy,
recall, or hire Employee in the future.
11. Disclosure of Any Material Information. As of the date Employee signs
this Agreement, Employee represents and warrants that Employee has
disclosed to Kellogg any information in Employee's possession
concerning any conduct involving the Company or any of its officers,
directors, representatives, agents or employees that Employee knows
is, or should reasonably have known to be, unlawful or a material
violation of any written Company policy applicable to Employee.
12. Return of Property. Employee agrees to return to the Company, no later
than the Departure Date, all property of the Company, regardless of
the type or medium (i.e., computer disk, CD-ROM) upon which it is
maintained, including, but not limited to, 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
acquired as a result of and/or in connection with Employee's
employment with the Company; provided, however, that Employee may
retain the computer and fax machine installed at her home until
January 7, 2006, at which time she may elect to purchase such
equipment from Kellogg at its book value on such date or return it to
the Company; and provided, further, that Employee may retain copies of
documents generated by her for use as forms in the future so long as
she complies with Section 15 hereof. Should Employee later find any
Company property in Employee's possession, Employee agrees to
immediately return it. Employee further agrees not to maintain any
copies of said property or make any copies of said property available
to any third-party.
13. Non-Admission of Liability. Employee understands and agrees that this
Agreement does not and shall not be deemed or construed as an
admission of liability or responsibility by the Company for any
purpose. Employee further agrees that nothing contained in this
Agreement can be used by Employee in any way as precedent for future
dealings with the Company or any of its successors, officers,
directors, attorneys, representatives, agents or employees. For
avoidance of doubt, nothing in this Agreement is intended to allow any
past, present or future employee of the Company to use this Agreement
as precedent in future dealings with the Company.
14. Releases, Representations and Covenants. In consideration of the
compensation and benefits provided pursuant to this Agreement, the
sufficiency of which is hereby acknowledged, Employee, for Employee
and for any person who may claim by or through Employee, irrevocably
(except with respect to Paragraph 20 below) and unconditionally
releases, waives and forever discharges the Company and its past,
present and future subsidiaries, divisions, affiliates, successors,
and their respective officers, directors, attorneys, agents and
employees, from any and all claims or causes of action that Employee
had, has or may have, relating to Employee's employment with and/or
termination from the Company up until the date of this Agreement,
including but not limited to, any claims arising under Title VII of
the Civil Rights Act of 1964, as amended, Section 1981 of the Civil
Rights Act of 1866, as amended, the Civil Rights Act of 1991, as
amended, the Family and Medical Leave Act, the Age Discrimination in
Employment Act, as amended by the Older Workers Benefit Protection Act
of 1990, the Americans with Disabilities Act, the Employee Retirement
Income Security Act; claims under any other federal, state or local
statute, regulation or ordinance; claims for discrimination or
harassment of any kind, breach of contract or public policy, wrongful
or retaliatory discharge, defamation or other personal or business
injury of any kind; and any and all other claims to any form of legal
or equitable relief, damages, compensation or benefits (except as set
forth in subparagraph (c), below), accruing prior to the date of this
Agreement. Employee additionally waives and releases any right
Employee may have to recover in any lawsuit or proceeding against the
Company brought by Employee, an administrative agency, or any other
person on Employee's behalf or which includes Employee in any class,
in each case with respect to any such claims or causes of action
arising prior to the date of this Agreement.
(a). No Pending Claims/Withdrawal of Claims. Employee represents and
warrants that, as of the date Employee signs this Agreement,
Employee has no charges, claims or lawsuits of any kind pending
against the Company or any of its subsidiaries, divisions,
affiliates, successors, or their respective officers, directors,
attorneys, agents and employees that would fall within the scope
of the Release set forth in this Paragraph 14. To the extent that
Employee has such pending charges, claims or lawsuits as of the
date Employee signs this Agreement, Employee agrees to seek and
obtain immediate dismissal with prejudice and provide written
confirmation immediately (i.e., court order, and/or agency
determination) as a condition precedent to the Kellogg's
obligations under this Agreement on and after the date Employee
signs this Agreement (including, but not limited to, providing
any compensation or benefits under this Agreement).
(b). Covenant Not to Sue. Subject to (c) below, to the maximum extent
permitted by law, Employee agrees not to sue or to institute or
cause to be instituted any action in any federal, state, or local
agency or court against the Company based upon the claims
released in this Paragraph 14 (the provisions set forth in
Paragraph 14(a) and (b) are collectively referred to herein as
the "Release").
(c). Exclusion for Certain Claims. Notwithstanding the foregoing,
Kellogg and Employee agree that the Release shall not apply to
any claims arising on and after the date Employee signs this
Agreement, nor shall anything herein prevent Employee or the
Company from instituting any action to enforce the terms of this
Agreement. In addition, Employee and Kellogg agree that nothing
herein shall be construed to prevent Employee from enforcing any
rights Employee may have under the Employee Retirement Income
Security Act of 1974 to recover any vested benefits.
15. Preservation of Company Confidential Information. Employee agrees that
she shall not (without first obtaining the prior written consent in
each instance from Kellogg) during the term of this Agreement or
thereafter, disclose, make commercial or other use of, give or sell to
any person, firm or corporation, any information (other than
information that currently is public or is made public (except in the
case of Employee's disclosure)) regarding the Company, including, by
way of example only, ideas, inventions, methods, designs, formulas,
systems, improvements, prices, discounts, business affairs, products,
product specifications, manufacturing processes, data and know-how and
technical information of any kind whatsoever unless such information
has been publicly disclosed by authorized officials of the Company
16. Cooperation. Employee agrees to cooperate truthfully and fully with
the Company in connection with any and all existing or future
investigations or litigation of any nature brought against the Company
involving events that occurred during Employee's employment with the
Company. Employee agrees to notify the Company immediately if
subpoenaed or asked to appear as a witness in any matter related to
the Company. The Company will reimburse Employee for reasonable
out-of-pocket expenses and, if approved in advance by the General
Counsel of Kellogg (such approval not to be unreasonably withheld),
reasonable attorney's fees incurred as a result of such cooperation.
17. General.
(a). Severability. If any provision of this Agreement is found by a
court of competent jurisdiction to be unenforceable, in whole or
in part, then that provision will be eliminated, modified or
restricted in whatever manner is necessary to make the remaining
provisions enforceable to the maximum extent allowable by law.
(b). Successors. This Agreement shall be binding upon, enforceable by,
and inure to the benefit of Employee and Kellogg, and Employee's
personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees, and to
any successor of Kellogg (including by operation of law) or
acquiror of substantially all of Kellogg's assets (as such term
is defined by Delaware law), but neither this Agreement, nor any
rights, payments, or obligations arising hereunder may be
assigned, pledged, transferred, or hypothecated by Employee or
Kellogg.
(c). Controlling Law and Venue. Employee agrees that, except as
provided in Section 17(b), the laws of the State of Michigan
shall govern this Agreement. Employee also agrees that any
controversy, claim or dispute between the parties, directly or
indirectly, concerning this Agreement or the breach of 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.
(d) Attorneys Fees. The Company agrees to pay promptly as incurred,
to the full extent permitted by law, all legal fees and expenses
that Employee may reasonably incur in order to enforce any
provision of this Agreement, provided that Employee shall
reimburse the Company for such amounts in the event that Employee
does not substantially prevail on the merits in any such action.
(e). Waiver. No claim or right arising out of a breach or default
under this Agreement can be discharged by a waiver of that claim
or right unless the waiver is in writing signed by the party
hereto to be bound by such waiver. A waiver by either party
hereto of a breach or default by the other party of any provision
of this Agreement shall not be deemed a waiver of future
compliance therewith and such provision shall remain in full
force and effect.
(f). Notices. All notices, requests, demands and other communications
regarding this Agreement shall be in writing and delivered in
person or sent by registered or certified mail, postage prepaid,
return receipt requested, and properly addressed as follows:
To Kellogg: Kellogg Company
One Kellogg Square
P.O. Box 3599
Battle Creek, MI 49016
Attention: General Counsel
With a copy to:
Kellogg Company
One Kellogg Square
P.O. Box 3599
Battle Creek, MI 49016
Attention: Vice President-Chief Counsel,
Employment and Labor
To Employee: At the address set forth in the preamble of this Agreement.
18. Entire Agreement/Amendment. Employee agrees that this Agreement,
together with Employee's stock option and restricted stock agreements
with the Company, constitute the entire agreement between Employee and
Kellogg, and that this Agreement supersedes any and all prior and/or
contemporaneous written and/or oral agreements relating to Employee's
employment with the Company and termination therefrom. Employee
acknowledges that this Agreement may not be modified except by written
document, signed by Employee and the General Counsel or Deputy General
Counsel of Kellogg.
19. Knowing and Voluntary Action. Employee acknowledges that Employee has
been advised to consult an attorney before signing this Agreement.
Employee further acknowledges that Employee has read this Agreement;
has been given a period of at least twenty-one (21) days to consider
this Agreement; understands its meaning and application; and is
signing of Employee's own free will with the intent of being bound by
it. If Employee elects to sign this Agreement prior to the expiration
of twenty-one (21) days, Employee has done so voluntarily and
knowingly, without any improper inducement or coercion by the Company.
20. Revocation of Agreement. Employee further acknowledges that Employee
may revoke this Agreement at any time within a period of seven (7)
days following the date Employee signs this Agreement. Notice of
revocation shall be made in writing addressed to Kellogg in accordance
with Paragraph 17(f) above. Such revocation must be received by
Kellogg by the close of business of the first day following the end of
the seven (7) day revocation period. This Agreement shall not become
effective until after the time period for revocation has expired.
IN WITNESS WHEREOF, the parties have executed and agreed to this Agreement
as of the dates provided below.
EMPLOYEE KELLOGG COMPANY
/s/ Janet Langford Kelly /s/ Carlos M. Gutierrez
__________________________ By: ___________________________
Date: 8/25/03 Date: 8/25/03