Separation Agreement and General Release - Kellogg Co. and King T. Pouw
SEPARATION AGREEMENT AND GENERAL RELEASE
This Separation Agreement and General Release ("Agreement") is hereby made
and entered into by and between King T. Pouw ("Employee"), whose address is 7403
Cottage Oak Drive, Portage, MI 49002, and Kellogg Company, a Delaware
corporation ("Kellogg").
1. Employee's Departure Date. Employee's last day of active employment was
May 28, 2004 (the "Last Day Worked") with a "Departure Date" of May 29, 2004.
Except as otherwise expressly provided herein, Employee acknowledges that as of
the Departure Date, the Employee's participation will cease in all of the
benefit plans of Kellogg and any of its subsidiaries, divisions or affiliates
(collectively, the "Company"). Employee will be entitled to receive benefits,
including any right to exercise any conversion privileges, that are vested and
accrued prior to the Departure Date pursuant to benefit plans and programs of
the Company.
2. Consideration. In consideration for Employee entering into this
Agreement and fully abiding by its terms, and assuming Employee has not revoked
this Agreement as described in Paragraph 20 below, Kellogg agrees to provide
Employee with the following consideration:
Severance Compensation and Benefits.
(a). Kellogg agrees to provide Employee severance compensation and benefits
pursuant to the terms and conditions of the Kellogg Company Severance Benefit
Plan (the "Plan"), a copy of which is attached to this Agreement as Exhibit A,
and the terms of which are incorporated herein. Employee represents and warrants
that Employee has read the Plan and understands its meaning and application. For
purposes of the Plan, Employee agrees that Employee is, and shall receive
benefits under the Plan as, a Senior Executive who is a Direct Report of the
Chief Executive Officer. According to the Plan, Employee shall receive severance
pay under the Plan equal to two years of base salary and two years of target
bonus. Such amount shall be paid to Employee in equal installments from the
Departure Date until August 28, 2008 (the "Severance Leave of Absence") in
accordance with Kellogg's then-current payroll practices. Employee shall also
receive an Annual Incentive Plan pro-rata Target Bonus (as described under the
Annual Incentive Plan) for performance year 2004 payable within 30 days after
the date of this Agreement. Employee shall receive all other benefits as
provided under the Plan during the Severance Leave of Absence. In addition to
the benefits provided under the Plan, Employee shall continue to accrue
credited, vesting and eligibility service under the Kellogg Company Pension Plan
during the Severance Leave of Absence; provided, however, that the additional
pension benefit attributable to this provision shall be payable from the Kellogg
Company Excess Benefit Retirement Plan. At the end of the Severance Leave of
Absence, Employee will be eligible to retire from the Company under the Kellogg
Company Pension Plan.
(b). Notwithstanding the foregoing, Employee shall not vest in any
restricted stock awards (including but not limited to, the restricted stock
award granted to Employee in September, 2003) during the Severance Leave of
Absence. For avoidance of doubt, Employee hereby releases, waives and forfeits
any and all right, title and interest in and to any and all restricted stock
awards granted, and which are not fully vested, prior to the Departure Date.
(c). 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. No Other Compensation or Benefits Owing. Employee acknowledges and
agrees that, except as otherwise expressly provided for in this Agreement and
the Plan, Employee is not and will not be due any other compensation or benefits
whatsoever from the Company and the Company shall have no further obligations of
any kind or nature to Employee. For avoidance of doubt, Employee hereby
releases, waives and forfeits any and all right, title and interest in and to
any payment under the (a) 2002-2004 and 2003-2005 Executive Performance Plans
(or any other Executive Performance Plan), and (b) except as expressly provided
in this Agreement, the 2004 Annual Incentive Plan (and any other Annual
Incentive Plan).
4. 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 the
Company, or any person(s) acting on its behalf.
5. 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.
6. Non-Compete. In further consideration of the foregoing, Employee agrees
that, for a period beginning with the date of this Agreement and ending on the
second anniversary of the Departure Date (the "Restricted Period"), Employee
shall not, without the prior written consent of the Chief Executive Officer of
Kellogg:
(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).
(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.
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, or meat substitutes; the term "Geographic Area"
shall mean any country in the world where the Company manufactures, produces,
distributes, sells or markets any of the Products at any time during the
applicable Restricted Period.
7. Non-Solicitation.In further consideration of the foregoing, Employee
agrees that during the Restricted Period, 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 was at any
time during the previous year an officer, director, representative, agent 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.
8. Non-Disparagement of the Company. Employee agrees not to engage in any
form of conduct or make any statements or representations that disparage,
criticize or otherwise be critical, or otherwise impair the reputation, goodwill
or commercial interests, of the Company, or its past, present and future
subsidiaries, divisions, affiliates, successors, officers, directors, attorneys,
agents and employees. 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
impairs the reputation of Employee. "Senior Executives" include Carlos
Gutierrez, David Mackay, Alan Harris, John Bryant, Annunciata Cerioli, Celeste
Clark, Gary Pilnick, Jeff Montie, and Brad Davidson, for as long as any such
person remains employed by the Company.
9. Employment Status. Employee understands and agrees that (i) Employee's
active employment with the Company ends effective May 28, 2004; and (ii) the
Company has no obligation to reinstate, rehire, reemploy, recall, or hire
Employee in the future.
10. 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 has any reason to believe may be unlawful, or a
material violation of Company policy applicable to Employee.
11. 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. 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.
12. 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 or any
other past, present or future employee of the Company in any way as precedent
for future dealings with the Company or any of its successors, officers,
directors, attorneys, representatives, agents or employees.
13. 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, known or unknown, 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 (d), below), or for attorneys fees
or costs. 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.
(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 past, present and future 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 13. 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. 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, including, but not
limited to, the claims released in this Paragraph 13.
(c). Remedies for Breach. If Employee breaches any portion of this
Agreement (other than an immaterial breach as determined by Kellogg in its
reasonable discretion), or disavows any portion of the Release, Employee shall
forfeit any payments or benefits whatsoever under this Agreement and Employee
acknowledges and agrees that, in addition to any damages, Employee will be
obligated, to the maximum extent permitted by law, to reimburse Kellogg for all
amounts paid to Employee pursuant to this Agreement and under the Plan, and,
subject to Paragraph 17.d., Employee shall be liable for all expenses, including
costs and reasonable attorney's fees, incurred by any entity released in
defending the lawsuit or claim. Employee also hereby agrees and acknowledges
that if he or she breaches this Agreement, because it would be impractical and
excessively difficult to determine the actual damages to the Company as a result
of such breach, any remedies at law (such as a right to monetary damages) would
be inadequate. Employee, therefore agrees that, if he or she breaches this
Agreement, the Company shall have the right (in addition to, and not in lieu of,
any other right or remedy available to it) to a temporary and permanent
injunctive relief from a court of competent jurisdiction, without posting any
bond or other security and without proof of actual damage.
(d). Exclusion for Certain Claims. Notwithstanding the foregoing, Kellogg
and Employee agree that the Release shall not apply to any claims arising 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.
14. Preservation of Company Confidential Information. Employee acknowledges
and agrees that previously executed Company confidentiality or non-disclosure
agreements, if any, will continue to remain in effect after the Departure Date.
In addition, Employee agrees that he or 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 from the Company or acquired
or developed in the course of Employee's employment, including, by way of
example only, trade secrets (including organizational charts, reporting
relationships, employee information such as credentials, individual performance,
skill sets, salaries and background information), , 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.
15. Confidentiality of Agreement. Employee agrees that the terms of this
Agreement, the events leading up to this Agreement, will not be disclosed by
Employee or Employee's Representatives to any third party except for Employee's
spouse, tax or legal advisor(s) ("Employee's Representatives"), provided such
parties agree to keep such information confidential and, in the case of
disclosure to any such advisor, only to the extent necessary to perform
services. Employee shall be primarily liable to the Company for any disclosure
of the existence or terms of this Agreement by such third parties.
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 or assignee of Kellogg, 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 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). Attorney Fees. In the event of any dispute or controversy arising out
of the claims described in 13(d), the prevailing party shall be entitled to
reimbursement of its reasonable costs, including attorney fees, court costs,
alternative dispute resolution costs and expert witnesses' fees and costs.
(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: Chief Counsel, Labor and Employment
To Employee: At the address set forth in the preamble of this Agreement.
(g) Continuation of Indemnification and Insurance. Kellogg shall continue
to indemnify Employee in accordance with the By Laws to the fullest extent
permitted by law for his acts while an officer of the Company, and shall
continue to provide coverage under Kellogg's Directors and Officers Insurance
policy for such acts.
18. Entire Agreement/Amendment. Employee agrees that this Agreement,
including any Exhibits attached hereto, the Plan and the Stock Option Agreements
related to vested options, constitutes 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 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 and any Exhibits
attached hereto; 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(e) 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.
EMPLOYEE KELLOGG COMPANY
By: /s/ King Pouw By: /s/ Carlos M. Gutierrez
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