Exhibit 10.3
Retention Agreement
This Retention Agreement (the "Agreement") is made and entered into as
of August 17, 2004 by and between Xxxxxxx Company, a Delaware corporation
("Kellogg", together with its subsidiaries, divisions, affiliates and
successors, the "Company") and Xxxxx Xxxxxx ("Employee").
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Benefits.
a. Provided Employee remains employed with the Company through December
31, 2005, Employee would be eligible to begin a leave of absence
beginning December 31, 2005 and ending August 16, 2010 (the "Leave of
Absence"), and said Leave of Absence shall commence when Employee's
employment terminates with the Company, as provided in this Agreement.
During the Leave of Absence, Employee would accrue vesting service
(i.e., for retirement eligibility purposes only and not for purposes
of calculating Employee's benefit amount) under the Xxxxxxx Company
Pension Plan; provided, however, that the additional pension benefit
attributable to this provision shall be payable from the Xxxxxxx
Company Excess Benefit Retirement Plan. At the end of the Leave of
Absence, Employee would be eligible to retire from the Company under
the Xxxxxxx Company Pension Plan, and if Employee elects to retire,
Employee shall be eligible to receive retirement benefits which are
provided at the time of Employee's retirement to salaried retirees of
Kellogg in accordance with the terms of the benefit plans.
b. During the Leave of Absence, you would be eligible to receive the
benefits) provided under the Xxxxxxx Company Severance Benefit Plan,
as amended from time to time (the "Severance Plan") at such time,
provided that the severance pay shall be paid in equal installments
over the Leave of Absence consistent with the Company's then-current
payroll practices. Kellogg reserves the right to amend, modify, and/or
terminate its benefits plans, and you shall be subject to any such
changes, except as expressly otherwise provided in this letter. All
other Kellogg-provided benefits (e.g., short term and long term
disability, vacation accrual, option grants, and the Employee Stock
Purchase Program) shall cease as of your termination date.
2. Termination. Notwithstanding any to the contrary in this letter
agreement:
a. If Employee's employment is terminated by reason of Employee's death
or disability, Employee's estate or Employee, as the case may be,
shall be entitled to receive benefits provided under Kellogg's general
policy for such events and, if such termination occurs after December
31, 2005, the benefits specified in Paragraph 1 hereof.
b. The Company may, at any time, terminate Employee's employment under
this Agreement with or without "Cause." Termination for "Cause" means
termination by the Company because of (i) theft, embezzlement, or
fraud by Employee pursuant to which the Company has suffered a loss,
or conspiracy by Employee to commit any of the foregoing, (ii)
incapacity on the job by reason of Employee's abuse of alcohol or
drugs, (iii) commission by Employee of a crime involving moral
turpitude, or an act of dishonesty by Employee in connection with the
performance of Employee's duties hereunder, (iv) a willful and knowing
violation by Employee of any law or regulation respecting the business
of the Company, (v) a breach of any fiduciary duty owed by Employee to
the Company in any material respect, (vi) breach by Employee of any of
the provisions of this Agreement in any material respect, or (vii)
failure of Employee to perform his duties in any material respect as
required under this Agreement; provided, however, that in the case of
clauses (vi) and (vii) hereof, if such breach or failure is capable of
being cured within thirty (30) days, the Company must provide written
notice of such breach or failure within thirty (30) days of its
discovery thereof, and Employee shall have thirty (30) days from such
written notice to cure such breach or failure. Upon termination of
this Agreement pursuant to this Paragraph 2.b., Employee shall be
entitled to receive any salary earned and not paid up to the date of
termination, which shall be subject to set-off to the maximum extent
permitted by law if the Company has encountered a loss by reason of
the action permitting the Company to terminate Employee for Cause,
and, notwithstanding any other Paragraph herein, Employee shall not be
entitled to any further compensation. For avoidance of doubt, if
Employee's employment is terminated for any reason prior to December
31, 2005, Employee shall forfeit any benefits described in Paragraph
1; provided, however, Employee shall be eligible to receive the
benefits under the Severance Plan, subject to the terms and conditions
thereof.
c. Notwithstanding any other provision in this Agreement, if (i)
Employee's employment is terminated prior to December 31, 2005 and
(ii) at the time of such termination, Employee qualifies for benefits
under Section 5 of the Employment Agreement between Employee and
Kellogg dated July 26, 2000 (the "Change of Control Agreement"), then
Employee shall be eligible for the benefits described in Paragraph 1
and shall immediately begin the Leave of Absence on the date of such
termination.
3. Covenants and Release.
a. Non-compete. (i) For a period of two years beginning with the date
Employee's employment with the Company ends (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).
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.
(ii) For purposes of this Paragraph 3a.:
A. 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,
fruit snacks, meat substitutes, any other grain-based convenience
food or any other product which the Company manufactures,
distributes, sells or markets;
B. 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.
b. Non-solicitation. Employee agrees that during his employment and
during the Leave of Absence and thereafter for a period of two years,
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.
c. 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,
goodwill or commercial interests of the Company, or its officers,
directors, attorneys, agents and employees. Certain Company Executives
(as defined herein) agree 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 Employee. For
purposes of this Paragraph, "Certain Company Executives" means the
members of the Executive Management Committee at the time of
Employee's departure from the Company and for that period of time such
individuals are employees of the Company.
d. Preservation of Company Confidential Information. Employee agrees that
he shall not (without first obtaining the prior written consent in
each instance from the Company) 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 received directly or
indirectly 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), 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.
e. Release. 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 and unconditionally releases,
waives and forever discharges the Company and its 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 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 rights Employee may have under the Employee
Retirement Income Security Act of 1974 to recover any vested
benefits), 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.
4. Miscellaneous.
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. 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 Xxxxxxx 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.
c. Entire Agreement; Amendment. Employee agrees that this Agreement, the
Change of Control Agreement, and the Agreement between Employee and
Kellogg dated September 1, 2003 (the "September Agreement") constitute
the entire agreement between Employee and the Company, and that these
agreements supersede any and all prior and/or contemporaneous written
and/or oral agreements relating to Employee's employment with the
Company and termination therefrom. In the event of any conflict or
inconsistency between the terms of the September Agreement and this
Agreement, this Agreement shall control. Employee acknowledges that
this Agreement may not be modified except by written document, signed
by Employee and the General Counsel of Kellogg.
d. Employment Relationship. Employee acknowledges and agrees that his
employment with the Company described in this letter is an at-will
employment relationship, and that only the General Counsel of Kellogg
may modify this provision, and any modification must be in writing
signed by both parties.
e. Taxes. 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. 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.
f. Counterparts. This Agreement may be executed simultaneously in one or
more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties have executed and agreed to this
Employment Agreement on the dates provided below.
EMPLOYEE XXXXXXX COMPANY
By: /s/Xxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxxxxx
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