Employment Agreement - Keebler Foods Co., Kellogg Co. and Sam Reed
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated and effective as of the 26th day of
October, 2000, by and among Keebler Foods Company, a Delaware corporation (the
"Company"), Kellogg Company, a Delaware corporation ("Kellogg"), and Sam Reed
(the "Executive").
WHEREAS, the Company has entered into an Agreement and Plan of
Merger dated as of October 26, 2000 (the "Merger Agreement"), among the Company,
Kellogg, and FK Acquisition Corp., a Georgia corporation, pursuant to which a
subsidiary of Flowers Industries, Inc., a Georgia Corporation, will merge with
and into the Company, with the Company as the surviving corporation, and the
Company will become an indirect wholly owned subsidiary of Kellogg (the
"Transaction," and references herein to the "Company" refer to the Company both
before and after the Transaction); and
WHEREAS, Kellogg, the Company and the Executive desire to set
forth in a written agreement the terms and conditions under which the Executive
will continue to render services to the Company after the consummation of the
Transaction;
NOW, THEREFORE, the parties hereto, in consideration of the
mutual covenants herein contained, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, agree as follows:
1. Employment Period. (a) This Agreement shall become effective at the
"Effective Time" as defined in the Merger Agreement if, but only if, the
Transaction is consummated and the Executive remains employed by the Company
through the Effective Time. If the Transaction is not consummated, or if the
Executive ceases for any reason to be employed by the Company before the
Effective Time, this Agreement shall be null and void and of no further force or
effect.
(b) The Company shall employ the Executive, and the Executive
shall serve the Company, on the terms and conditions set forth in this
Agreement, for the period beginning at the Effective Time and ending on the date
set forth on Exhibit A hereto (the "Employment Period").
2. Position and Duties. (a) During the Employment Period, the Executive
shall serve in the position set forth on Exhibit A hereto, with the duties and
responsibilities customarily assigned to such position and such other duties and
responsibilities as the Board of Directors of the Company (the "Board") shall
from time to time assign to the Executive.
(b) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive shall
devote his full business attention and time to the business and affairs of the
Company and shall use his reasonable best efforts to carry out his duties and
responsibilities hereunder faithfully and efficiently.
(c) The Executive's services shall be performed primarily at
the Company's offices in the Chicago, Illinois metropolitan area.
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3. Compensation. (a) Salary. As compensation for the Executive's
services hereunder during the Employment Period, the Company shall pay to the
Executive a base salary (hereinafter the "Base Salary") at an annual rate not
less than the amount set forth in Exhibit A hereto, payable at such times and
intervals as the Company customarily pays the base salaries of its other
executive employees. During the Employment Period, the Base Salary shall be
reviewed annually for possible increase in accordance with the Company's normal
payroll practices for management personnel. The Base Salary shall not be reduced
after any such increase, and the term "Base Salary" shall thereafter refer to
the Base Salary as so increased.
(b) Incentive Compensation. In addition to the Base Salary,
the Executive shall be eligible to earn an annual bonus (the "Annual Bonus"),
with a target bonus equal to the amount specified in Exhibit A hereto. In
addition, the Executive shall be awarded, as of the Effective Time stock options
on the terms and conditions set forth on Exhibit B hereto, in Section 4(c)
hereof, and otherwise in accordance with the terms and conditions of the Kellogg
Company 2001 Long-Term Incentive Plan (the "LTIP"). Further, beginning in 2001,
the Executive shall be eligible for regular option grants under the LTIP on the
same basis as similarly situated executives of the Company. Finally, the
Executive shall be entitled to receive special retention bonuses (the "Retention
Bonuses") in the amounts and on the dates set forth in Exhibit A hereto, if the
Executive remains employed by the Company on those dates.
(c) Employee Benefits and Fringe Benefits. During the
Employment Period, the Executive shall be entitled to receive employee benefits,
vacation and fringe benefits (including, without limitation, medical, life
insurance and other welfare benefits and benefits under retirement and savings
plans) to the same extent as, and on the same terms and conditions as, other
similarly situated executives of the Company from time to time.
(d) Expenses. The Executive shall be entitled to receive
prompt reimbursement for all reasonable business expenses incurred by the
Executive during the Term in carrying out his duties under this Agreement,
provided that the Executive complies with the policies, practices and procedures
of the Company for submission of expense reports, receipts, or similar
documentation of such expenses, as in effect from time to time.
(e) Change of Control: As soon as practicable after the
Effective Time, Kellogg shall offer to enter into, or shall cause the Company to
offer to enter into, a change-of-control employment agreement with the Executive
on the same terms and conditions as other similarly situated executives of
Kellogg and its subsidiaries (the "Change of Control Agreement").
4. Employment Termination. (a) Termination by the Company. (i) The
Executive's employment may be terminated by the Company upon the Disability of
the Executive (as defined below), for Cause (as defined below), or for any other
reason (a termination without Cause). The Company shall give the Executive
notice of termination specifying which of the foregoing provisions is applicable
and, in the case of a termination for Cause, the factual basis therefor, and the
termination shall be effective upon the 5th day after such notice is given or
such later day as may be specified in such notice (such day, the "Date of
Termination").
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(ii) For purposes of this Agreement, "Disability" shall mean a
disability that would entitle Executive to receive benefits under the long-term
disability plan of the Company, Kellogg or any of their affiliates (the Kellogg
and such affiliates are hereinafter referred to as the "Affiliated Companies"),
applicable to Executive, as in effect from time to time, which prevents the
Executive from performing his duties hereunder for 180 consecutive days or more.
(iii) For purposes of this Agreement, "Cause" means any of the
following:
(A) malfeasance or gross misconduct by the Executive in
connection with his employment or malfeasance or gross
misconduct that produces material loss or damage to, or
has a material adverse effect on the reputation of, the
Company or any of the Affiliated Companies, which shall
include but not be limited to instances of sexual
harassment or violation of the Company's
nondiscrimination policies.
(B) continuing refusal by the Executive to perform his
employment duties or any lawful direction of a senior
executive of the Company or Kellogg, within ten (10)
days after written notice of any such refusal to perform
such duties or direction is given to the Executive;
(C) any breach of the provisions of Section 5 of this
Agreement by the Executive or any other material breach
of this Agreement by the Executive; or
(D) the conviction of the Executive of, or plea of nolo
contendere by the Executive to:
(I) any felony under federal, state or local laws; or
(II) a misdemeanor that involves dishonesty or fraud or
produces material loss or damage to, or has a
material adverse effect on the reputation of, the
Company or any of the Affiliated Companies.
(b) Termination by Executive. (i) The Executive's employment
may be terminated by the Executive for "Good Reason," as defined below, or
without Good Reason. The Executive shall give the Company notice of termination,
which shall, if the termination is for "Good Reason," specify the factual basis
therefor, and the termination shall be effective upon the 30th business day
after such notice is given unless the Company agrees to an earlier day (such
day, the "Date of Termination").
(iv) A termination by the Executive shall be for "Good Reason"
if it occurs within 30 days after, and as a result of, one of the following:
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(A) the assignment to the Executive of any duties
inconsistent in any material adverse respect with the
Executive's position, duties or responsibilities as
contemplated by Section 2 of this Agreement, or any
other action by the Company which results in a material
diminishment in such position, duties or
responsibilities, other than action or inaction which is
remedied by the Company within 15 days after receipt of
written notice thereof given by the Executive;
(B) any failure by the Company to comply with any of the
provisions of Section 3 of this Agreement in any
material respect, other than any such failure that is
remedied by the Company within 15 days after receipt of
written notice thereof given by the Executive; or
(C) any relocation by the Company of the Executive's
principal place of business away from the Chicago,
Illinois metropolitan area.
(c) Consequences of Termination by the Company without Cause
or by the Executive for Good Reason. (i) If, during the Employment Period, the
Executive's employment is terminated by the Company without Cause or by the
Executive for Good Reason, the Executive shall not be entitled to any further
compensation provided for under this Agreement, and shall instead receive from
the Company (A) a lump sum cash payment, within 15 days after the Date of
Termination, equal to (I) the Base Salary, at the rate in effect immediately
before the Date of Termination (but, in the case of a termination by the
Executive for Good Reason, disregarding any reduction thereof that was the basis
for such termination), plus (II) the Annual Bonus Amount, as defined below, plus
(III) any Retention Bonuses that have not yet been paid, plus (IV) $30,000 in
lieu of certain benefits, and (ii) continued health and life insurance benefits
on the terms and conditions set forth in Section 4(c)(iii) below and the other
benefits set forth in Section 4(c)(iv) below.
(ii) The "Annual Bonus Amount" means the sum of:
(A) any earned but unpaid Annual Bonus for the fiscal year
ending immediately before the Date of Termination;
(B) an amount equal to (I) the Recent Bonus (as defined
below) times (II) a fraction, the numerator of which is
the number of days in the fiscal year in which the Date
of Termination occurs that precede the Date of
Termination, and the denominator of which is the total
number of days in such fiscal year; plus
(C) the Recent Bonus.
For purposes of clauses (B) and (C) above, the "Recent Bonus" means the greatest
of (I) the amount of the Executive's 1999 fiscal year bonus paid in 2000, (II)
if the Executive's 2000 fiscal year bonus has been determined as of the Date of
Termination, the average of the 1999 fiscal year bonus paid in 2000 and the 2000
fiscal year bonus paid or payable in 2001, and (III) the most recent Annual
Bonus (if any) earned by the Executive under this Agreement.
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(iii) The health and life insurance benefits described above
shall consist of continued coverage for the Executive and, if applicable, his
eligible dependents, under the Company's group health and life insurance plans
from the Date of Termination through the second anniversary thereof (subject to
making all required employee contributions) in the form then available to
employees of the Company. However, such continuation shall no longer be provided
when and to the extent that the Executive is entitled (without regard to any
individual waivers or other arrangements) to receive during such two-year period
the same type of coverage from another employer or another recipient of the
Executive's services (except to the extent that pre-existing conditions would
not be eligible to be covered under such successor coverage). To the extent that
such coverage cannot be provided under the terms of the applicable plans, the
Company may elect instead to provide alternative coverage through the purchase
of insurance (of equal value and coverage) at the Company's expense. After the
period during which such continued health and dental coverage is provided, the
Company may elect to continue coverage under the "COBRA" health benefit
continuation rules and, if he so elects such continuation, he shall pay the
required premiums to maintain such coverage.
(iv) In addition, the Executive shall continue to receive any
automobile allowance to which he was entitled immediately before the Date of
Termination until the second anniversary of the Date of Termination. However,
the Executive must deliver any Company-provided leased vehicles to the Company
within ten days after the Date of Termination. For a period of one year after
the Date of Termination, the Company shall provide outplacement assistance, as
appropriate and necessary to the Executive. The Executive shall not, however, be
entitled to any payment in lieu of accepting outplacement assistance services.
Finally, for purposes of any non-qualified retirement plan in which the
Executive is participating immediately before the Effective Time, the Executive
shall be credited with one additional year of service and the cash amounts
payable pursuant to Section 4(c)(i)(A)(I), (II), and (IV) above shall be treated
as compensation paid during the period of such additional service.
(d) Other Employment Terminations. If, during the Employment
Period, the Executive's employment is terminated for any reason other than by
the Company without Cause or by the Executive for Good Reason, the Executive
shall not be entitled to any compensation provided for under this Agreement,
other than (i) Base Salary through the Employment Termination Date, (ii)
benefits under any long-term disability insurance coverage in the case of
termination because of Disability, (iii) vested benefits, if any, required to be
paid or provided by law, and (iv) any Retention Bonuses that have not yet been
paid, in the case of the Executive's death or termination because of Disability.
(e) Coordination of Severance Benefits. The Executive
acknowledges and agrees that if he enters into the Change of Control Agreement,
and if the "Effective Date" as defined in the Change of Control Agreement (which
generally will occur if there is a Change of Control of Kellogg, as that term is
defined in the Change of Control Agreement) occurs during the Employment Period
under this Agreement, then notwithstanding any other provision of this
Agreement, the Change of Control Agreement shall supersede this Agreement in its
entirety. In addition, the Executive acknowledges and agrees that if he becomes
entitled to the severance pay and benefits provided under Section 4(c) or
Section 4(d) of this Agreement, he will not also be eligible for severance pay
or benefits under any severance plan, program or policy or similar arrangement
of Kellogg, the Company, or any of their affiliates.
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5. Covenants. (a) Confidential Information. The Executive
shall hold in a fiduciary capacity for the benefit of the Company and the
Affiliated Companies all secret or confidential information, knowledge or data
relating to the Company or any of the Affiliated Companies and their respective
businesses (including, without limitation, any proprietary and not publicly
available information concerning any processes, methods, trade secrets,
research, secret data, costs or names of users or purchasers of their respective
products or services, business methods, operating procedures or programs or
methods of promotion and sale) that the Executive has obtained or obtains during
his employment by the Company or any of the Affiliated Companies and that is not
public knowledge (other than as a result of the Executive's violation of this
Section 5(a)) ("Confidential Information"). For the purposes of this Section
5(a), information shall not be deemed to be publicly available merely because it
is embraced by general disclosures or because individual features or
combinations thereof are publicly available. The Executive shall not
communicate, divulge or disseminate Confidential Information at any time during
or after the Executive's employment with the Company or any of the Affiliated
Companies, except with the prior written consent of the Company or such
Affiliated Company, as applicable, or as otherwise required by law or legal
process. All records, files, memoranda, reports, customer lists, drawings,
plans, documents and the like that the Executive uses, prepares or comes into
contact with during the course of the Executive's employment shall remain the
sole property of the Company and/or one or more of the Affiliated Companies, as
applicable, and shall be turned over to the Company or such Affiliated Company,
as applicable, upon termination of the Executive's employment.
(b) No Solicitation. The Executive agrees that he will not, at
any time during the Noncompetition Period (as defined in Section 5(c) below),
without the prior written consent 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 six (6) months an employee, representative, officer or
director of the Company or any of the Affiliated Companies (except for such
employment by the Company or any of the Affiliated Companies).
(c) Noncompetition. During the Noncompetition Period (as
defined below), the Executive shall not become associated with a Competitor. The
foregoing sentence shall not apply, however, if the Executive obtains prior
written permission of Kellogg to become associated with a Competitor. For
purposes of this Section 5(c): (i) the "Noncompetition Period" means (A) the
period during which the Executive is employed by the Company or any of the
Affiliated Companies, plus (B) the period of one year immediately thereafter;
(ii) a "Competitor" means any grain-based convenience foods business of
Campbell's, Danone, General Mills, Kraft, Nabisco, Nestle, Parmalat, PepsiCo,
Quaker, or any of their respective affiliates and successors; and (iii) the
Executive shall be considered to have become "associated with a Competitor" if
the Executive becomes directly or indirectly involved as an owner, principal,
employee, officer, director, independent contractor, representative,
stockholder, financial backer, agent, partner, advisor, lender, or in any other
individual or representative capacity with a Competitor. Notwithstanding the
foregoing, the Executive may make and retain investments in less than one
percent of the equity of any Competitor, if such equity is listed on a national
securities exchange or regularly traded in an over-the-counter market.
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(d) Inventions. All plans, discoveries and improvements,
whether patentable or unpatentable, made or devised by the Executive, whether
alone or jointly with others, from the date of the Executive's initial
employment by the Company and continuing until the end of the Employment Period
and any subsequent period when the Executive is employed by the Company or any
of the Affiliated Companies, relating or pertaining in any way to the
Executive's employment with or the business of the Company or any of the
Affiliated Companies, shall be promptly disclosed in writing to the Board and
are hereby transferred to and shall redound to the benefit of the Company, and
shall become and remain its sole and exclusive property. The Executive agrees to
execute any assignments to the Company or its nominee, of the Executive's entire
right, title and interest in and to any such discoveries and improvements and to
execute any other instruments and documents requisite or desirable in applying
for and obtaining patents or copyrights, at the expense of the Company, with
respect thereto in the United States and in all foreign countries, that may be
required by the Company. The Executive further agrees, during and after the
Employment Period, to cooperate to the extent and in the manner required by the
Company, in the prosecution or defense of any patent or copyright claims or any
litigation, or other proceeding involving any trade secrets, processes,
discoveries or improvements covered by this Agreement, but all necessary
expenses thereof shall be paid by the Company.
(e) Acknowledgement and Enforcement. The Executive
acknowledges and agrees that: (i) the purpose of the foregoing covenants,
including without limitation the noncompetition covenant of Section 5(c), is to
protect the goodwill, trade secrets and other Confidential Information of the
Company being acquired by Kellogg in the Transaction; (ii) because of the nature
of the business in which the Company and the Affiliated Companies are engaged
and because of the nature of the Confidential Information to which the Executive
has access, it would be impractical and excessively difficult to determine the
actual damages of the Company and the Affiliated Companies in the event the
Executive breached any of the covenants of this Section 5; and (iii) remedies at
law (such as monetary damages) for any breach of the Executive's obligations
under this Section 5 would be inadequate. The Executive therefore agrees and
consents that if he commits any breach of a covenant under this Section 5 or
threatens to commit any such breach, the Company shall have the right (in
addition to, and not in lieu of, any other right or remedy that may be available
to it) to temporary and permanent injunctive relief from a court of competent
jurisdiction, without posting any bond or other security and without the
necessity of proof of actual damage. With respect to any provision of this
Section 5 finally determined by a court of competent jurisdiction to be
unenforceable, the Executive and the Company hereby agree that such court shall
have jurisdiction to reform this Agreement or any provision hereof so that it is
enforceable to the maximum extent permitted by law, and the parties agree to
abide by such court's determination. If any of the covenants of this Section 5
are determined to be wholly or partially unenforceable in any jurisdiction, such
determination shall not be a bar to or in any way diminish the Company's right
to enforce any such covenant in any other jurisdiction.
6. No Mitigation. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement and,
except as specifically provided in Section 4(c)(iii) above, such amounts shall
not be reduced, regardless of whether the Executive obtains other employment.
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7. Tax Gross-Up for Payments by the Company. (a) Any payment or benefit
provided by the Company or Kellogg for the benefit of the Executive under this
Agreement or otherwise under any other agreement, policy, plan, program or
arrangement, including without limitation any stock option, performance share,
performance unit, stock appreciation right, restricted stock award, executive
incentive award, or similar right, or the lapse or termination of any
restriction on, or the vesting or exercisability of, any of the foregoing
("Payment"), would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code") (or by any successor
provision) or to any similar excise or penalty tax imposed by state or local
law, or to any interest or penalties with respect to that tax (that tax or those
taxes, together with any interest and penalties, being hereinafter referred to
as the "Excise Tax"), then the Executive will be entitled to receive from the
Company a payment described in the provisions that follow (the "Gross-Up
Payment"). The Gross-Up Payment shall be in an amount such that, after payment
(out of the Gross-Up Payment) by the Executive of all taxes (including any
interest or penalties imposed on the Executive with respect to those taxes),
including any income and excise taxes imposed on the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed on the Payment and paid by the Executive.
(b) The determination of whether an Excise Tax is payable by
the Executive and the amount of that Excise Tax and whether a Gross-Up Payment
is required to be paid by the Company to the Executive and the amount of that
Gross-Up Payment, if any, shall be made by a nationally recognized accounting
firm ("Accounting Firm") designated by the Company. If the Accounting Firm
determines that any Excise Tax is payable by the Executive, the Company shall
pay the required Gross-Up Payment to the Executive as soon as practicable after
receipt of the determination and calculations with respect to any Payment to the
Executive. If the Accounting Firm determines that no Excise Tax is payable by
the Executive, it shall, at the same time as it makes that determination,
furnish the Company and the Executive an opinion that the Executive has
substantial authority not to report any Excise Tax on his federal, state or
local income or other tax return.
(c) The Company and the Executive shall each provide the
Accounting Firm access to and copies of any books, records and documents in the
possession of the Company or the Executive, as the case may be, reasonably
requested by the Accounting Firm, and shall otherwise cooperate with the
Accounting Firm in connection with the preparation and issuance of the
determinations and calculations contemplated by this Section 7. Any
determination by the Accounting Firm as to the amount of the Gross-Up Payment
shall be binding on the Company and the Executive, unless the amount of the
Excise Tax or such Gross-Up Payment is challenged by the IRS or any other taxing
authority (in which case the Gross-Up Payment shall be recalculated after such
challenge has been concluded).
(d) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service or any other taxing authority that, if
successful, would require the payment by the Company of a Gross-Up Payment (or
the recalculation of the Gross-Up Payment). That notification shall be given as
promptly as practicable but no later than ten (10) business days after the
Executive actually receives notice of the claim, and the Executive shall further
apprise the Company of the nature of the claim and the date on which such claim
is requested to be paid (in each case, to the extent known by the Executive).
The Company shall be
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responsible for representing the Executive before any taxing authority and shall
have full authority to defend, compromise or settle any claim, all of such shall
be at the Company's full expense (including any additional required Gross-Up
Payment and any accounting or legal fees incurred by the Company).
8. Notices. (a) Methods. Each notice, demand, request, consent, report,
approval or communication (hereinafter, "Notice") which is or may be required to
be given by any party to any other party in connection with this Agreement and
the transactions contemplated hereby, shall be in writing, and given by
facsimile, personal delivery, receipted delivery services, or by certified mail,
return receipt requested, prepaid and properly addressed to the party to be
served as shown in Section 8(b) below.
(b) Addresses. Notices shall be effective on the date sent via
facsimile, the date delivered personally or by receipted delivery service, or
three (3) days after the date mailed:
If to the Company: Keebler Foods Company
677 Larch Ave.
Elmhurst, IL 60126
Attn.: Corporate Secretary
Facsimile: (630) 833-3372
If to the Executive: At his residence address most recently
filed with the Company.
In each case, with
a copy to Kellogg:
If to Kellogg: Kellogg Company
One Kellogg Square
Battle Creek, MI 49016-3599
Attn.: General Counsel
Facsimile: (616) 961-6598
(c) Changes. Each party may designate by Notice to the other
in writing, given in the foregoing manner, a new address to which any Notice may
thereafter be so given, served or sent.
9. Entire Agreement. If this Agreement becomes effective as provided in
Section 1(a), then as of the Effective Time, this Agreement shall constitute the
entire agreement of the parties with respect to the subject matter hereof and
shall supersede all prior agreements with respect thereto, including, without
limitation, the Employment and Severance Agreement between the Company and the
Executive as amended on September 5, 2000.
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10. Successors. (a) Executive. This Agreement is personal to the
Executive and, without the prior written consent of the Company, shall not be
assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Executive's legal representatives.
(b) The Company. This Agreement shall inure to the benefit of
and be binding upon the Company and its successors and assigns.
(c) Assigns. The Company and/or Kellogg shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and perform this Agreement in the same manner and to
the same extent that the Company and/or Kellogg would have been required to
perform it if no such assignment had taken place. As used in this Agreement,
"Company" shall mean both the Company as defined above and any such successor by
operation of law or otherwise.
11. Miscellaneous. (a) Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Illinois, without
reference to principles of conflict of laws. This Agreement may not be amended
or modified except by a written agreement executed by the parties hereto or
their respective successors and legal representatives.
(b) Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement. If any provision of this Agreement shall
be held invalid or unenforceable in part, the remaining portion of such
provision, together with all other provisions of this Agreement, shall remain
valid and enforceable and continue in full force and effect to the fullest
extent consistent with law.
(c) Tax Withholding. Notwithstanding any other provision of
this Agreement, the Company may withhold from amounts payable under this
Agreement all federal, state, local and foreign taxes that are required to be
withheld by applicable laws or regulations.
(d) No Waiver. The Executive's or the Company's failure to
insist upon strict compliance with any provision of, or to assert any right
under, this Agreement shall not be deemed to be a waiver of such provision or
right or of any other provision of or right under this Agreement.
(e) Headings. The Section headings contained in this Agreement
are for convenience only and in no manner shall be construed as part of this
Agreement.
(f) Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Executive has hereunto set his hand
and, pursuant to the authorization of its Board of Directors, each of the
Company and Kellogg has caused this Agreement to be executed in its name on its
behalf, all as of the day and year first above written.
EXECUTIVE
------------------------------
Sam Reed
KEEBLER FOODS COMPANY
By
-----------------------------
Name:
Title:
KELLOGG COMPANY
By
-----------------------------
Name:
Title:
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EXHIBIT A
TERMS AND CONDITIONS FOR SAM REED
End of Employment Period: first anniversary of the Effective Time
Position: Vice Chairman of Kellogg.
Minimum Annual Rate of Base Salary: $810,000
Target Annual Bonus: 80% of Base Salary
Retention Bonus Payments: $4,269,500. Executive shall receive 100% of this
amount upon the first anniversary of the Effective Time.