SEPARATION AGREEMENT AND GENERAL RELEASE
Exhibit 10.1
SEPARATION AGREEMENT AND GENERAL RELEASE
This Separation Agreement and General Release (“Agreement”) is hereby made and entered into by
and between Xxxxxxx X. Xxxxxx (“Employee”), whose address is c/o One Kellogg Square, X.X. Xxx 0000,
Xxxxxx Xxxxx, XX 00000, and Xxxxxxx Company, a Delaware corporation (“Kellogg”).
1. Employee’s Departure Date.
Employee’s last day of active employment will be September 30, 2008, with a “Departure Date”
of October 1, 2008. 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 19 below, Kellogg agrees to provide Employee with the following consideration:
(a). Severance Compensation and Benefits. Kellogg agrees to provide Employee
severance compensation and benefits pursuant to the terms and conditions of the Xxxxxxx 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, except as otherwise provided in this Agreement.
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 June 2, 2016 (the “Severance Leave of Absence”) in
accordance with Kellogg’s then-current payroll practices, provided that any installments that
would otherwise be payable during the period beginning on the Departure Date and ending six months
after such date (the “Six Month Period”) that exceed $460,000.00 (the dollar limit contained in
Treasury Regulation §1.409A-1(b)(iii)) shall be paid in a lump sum in the first payroll period
ending after the Six Month Period. The parties acknowledge that the delay in these installments is
intended solely to comply with the requirements of Internal Revenue Code Section 409A and shall be
interpreted to comply with those requirements.
Employee will be eligible to retire from the Company under the Xxxxxxx Company Pension Plan
and the Xxxxxxx Company Executive Excess Plan (the “Pension Plans”) subject to the terms of the
Pension Plans and in accordance with this Paragraph 2(a), at the end
of the Severance Leave of Absence, and if Employee elects to retire, Employee shall otherwise
be eligible to receive retirement benefits which are provided at that time to salaried retirees of
Xxxxxxx Company in accordance with the terms of the benefit plans. The additional pension
Xxxxxxx
Company/Corporate Headquarters
One Kellogg Square/P.O. Xxx 0000/Xxxxxx Xxxxx, Xxxxxxxx 00000-0000 (000) 000-0000
One Kellogg Square/P.O. Xxx 0000/Xxxxxx Xxxxx, Xxxxxxxx 00000-0000 (000) 000-0000
benefit
attributable to this provision shall be payable from the Xxxxxxx Company Executive Excess Plan.
(b). Health and Welfare Benefits. Employee shall receive health and welfare benefits
during the Severance Leave of Absence in accordance with the Plan; provided, however, that if
Employee becomes eligible for health and welfare benefit coverage by another employer’s health and
welfare plan, coverage of Employee and his dependents under the Company’s health and welfare
benefit plans shall terminate. Thereafter, if Employee has elected to retire under the Pension
Plans, Employee and his eligible dependents, if any, shall be provided with retiree health benefits
at a level equal to the health benefits provided, during such time, to Xxxxxxx Company salaried
retirees in accordance with the terms of the plan in effect at the time. The Company reserves the
right to amend, modify and/or terminate any of its benefit plans, and Employee shall be subject to
any such changes.
(c). Other Payments. Employee shall also receive (i) a prorated target bonus under
the Xxxxxxx Company Senior Executive Annual Incentive Plan for performance year 2008 within 30 days
of the Departure Date; and (ii) the actual award payable under the 2006-2008 Executive Performance
Plan at the time other participants receive such payments.
(d). Taxes. 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, 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 (a) under
the 2007-2009 and 2008-2010 Executive Performance Plans (or any other Executive Performance Plan),
(b) any shares pursuant to any unvested restricted stock award, and (c) any other payments under
the Xxxxxxx Company Senior Executive 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 of three years beginning with the second anniversary of the Departure Date (the
“Restricted Period”), Employee shall not, without the prior written consent from the Chief
Executive Officer of Kellogg:
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(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 herein defined) in the Geographic Area (as herein 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 (i) ready-to-eat cereal products,
toaster pastries, cereal bars, granola bars, crispy marshmallow squares, frozen waffles, frozen
pancakes, fruit snacks, cookies, crackers, ice cream cones, meat substitutes, (ii) any other
grain-based convenience food or (iii) any other product which the Company manufactures,
distributes, sells or markets at the Departure Date. With respect to (iii) above, such products
shall not include products which the Company reasonably determines insignificant to the Company.
The term “Geographic Area” shall mean any territory, region or country where the Company sells any
Products at any time during the applicable Restricted Period.
7. 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 was at any time during the previous year an officer,
director, representative, agent or employee of the Company.
8. Non-Disparagement of the Company. 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 past,
present and future subsidiaries, divisions, affiliates, successors, officers, directors, attorneys,
agents and employees.
9. Employment Status. Employee understands and agrees that (i) Employee’s active
employment with the Company ends effective at the end of business on September 30, 2008; 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 violates Company Policy or would otherwise reflect poorly on the Company in any
respect.
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
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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 19 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; claims of representation, misrepresentation, or negligent
representation, 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 Representation by Kellogg. Employee acknowledges that no Kellogg employee,
including any attorney or human resource representative, has provided advice or counsel to Employee
regarding the circumstances surrounding Employee’s separation from employment with Kellogg,
including the negotiation of any term or provision set forth in this Agreement. Employee
acknowledges that Employee’s decision to execute this Agreement is without reliance upon any
statements made by any employee or representative of Kellogg.
(b). No Pending Claims/Withdrawal of Claims. Employee represents and warrants
that, as of the date Employee signs this Agreement, Employee has no charges,
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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).
(c). Covenant Not to Xxx. To the maximum extent permitted by law, Employee agrees not
to xxx 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.
(d). Remedies for Breach. If Employee breaches any portion of this Agreement, 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 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, regardless of the outcome. 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.
(e). 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 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
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of any kind whatsoever unless such information has been publicly
disclosed by authorized officials of the Company.
15. 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, reasonable
attorney’s fees incurred as a result of such cooperation.
16. 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.
(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 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.
(d). 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.
(e). 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: |
Xxxxxxx Company | |
| One Kellogg Square | ||
| X.X. Xxx 0000 | ||
| Xxxxxx Xxxxx, XX 00000 | ||
| Attention: General Counsel |
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| With a copy to: | ||
| Xxxxxxx Company | ||
| One Kellogg Square | ||
| X.X. Xxx 0000 | ||
| Xxxxxx Xxxxx, XX 00000 | ||
| Attention: General Counsel |
To Employee: At the address set forth in the preamble of this Agreement.
17. Entire Agreement/Amendment. Employee agrees that this Agreement, including any
Exhibits attached hereto, 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
(including the agreements between Employee and the Company dated August 30, 2000, March 29, 2005,
and July 23, 2007) 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.
18. 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.
19. 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 16(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 | XXXXXXX COMPANY | |||||
/s/ Xxxxxxx X. Xxxxxx
|
By: | /s/ A.D. Xxxxx Xxxxxx
|
||||
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