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EXHIBIT 10.10
Kellogg Company
Deferred Compensation Plan for Non-Employee Directors
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KELLOGG COMPANY
DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
(AS AMENDED AND RESTATED AS OF MAY 21, 1993)
The Chairman of the Board of KELLOGG COMPANY (hereinafter referred to
as the "Company") a corporation with principal office located at One
Kellogg Square, Battle Creek, Michigan 49016-3599, does hereby adopt the
following amendment and restatement to the Deferred Compensation Plan for
Non-Employee Directors:
WHEREAS, the Employer maintains a Deferred Compensation Plan for
Non-Employee Directors (hereinafter sometimes referred to as the "Plan")
for the benefit of its Non-Employee Directors, which Plan was last amended
and restated effective February 26, 1993; and
WHEREAS, under the provisions of Article XIII of the amended and
restated Plan, the Employer retained the right to amend the Plan in any and
all respects at any time and from time to time; and
WHEREAS, the Board of Directors of the Employer, at a meeting duly held
on May 21, 1993, authorized its officers to amend the Plan to provide for a
change in the method of distribution of deferred compensation;
NOW, THEREFORE, the premises considered, the Company's Deferred
Compensation Plan for Non-Employee Directors is hereby amended, effective
May 21, 1993:
I. NAME AND PURPOSE.
The name of this Plan is the Kellogg Company Deferred Compensation Plan
for Non-Employee Directors. Its purpose is to provide non-employee
Directors of the Company with an opportunity to defer compensation
earned as a Director.
II. EFFECTIVE DATE.
The Plan was originally effective on August 1, 1986. This amendment and
restatement shall be effective May 21, 1993.
III. PARTICIPANTS.
Any Director of the Company who is not an employee of the Company or
of a subsidiary of the Company shall be eligible to participate in
the Plan. Any such person who elects to participate in the Plan is
hereinafter called a "Participant". The Plan shall establish for each
Participant an unfunded deferred compensation account.
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IV. ELECTION OF DEFERRAL.
(A) On or before December 31 of any year during which the Plan is in
effect, each Director shall be entitled to make an irrevocable
election (in the form of Exhibit A) to defer receipt of all or a
specified portion of each component of the Participant's compensation
(annual retainer, Committee Chair fees and attendance fees exclusive
of expense reimbursement) otherwise payable during the following
February 1 to January 31 period for service on the Board of Directors
of the Company and its Committees, and for attending meetings of the
Board of Directors and Committees of the Board of Directors. Such
compensation shall be credited to the Participant's deferred compensation
account on the date the compensation is otherwise payable.
(B) A newly-elected director may elect to participate in the Plan for the
remainder of the calendar year and the month of January of the
succeeding year in which such Director joins the Board. Any such
election shall be made within one month following the date on which such
Director is elected to the Board and shall be effective with respect to
compensation allocable to the quarterly period following the date on
which such election is made. It shall be made in the same manner as in
Section IV(A) above.
(C) Each annual election shall include an irrevocable election as to the
method by which the amounts deferred are to be distributed in accordance
with Section VI, below.
(D) Such notice shall be delivered to the Company on or before December 31
of the year preceding the first year to which such election relates,
except that notice from newly-elected Directors may be delivered at any
time within one month following the date of their election to the Board.
The elections set forth in such notice shall be given continuing effect
for subsequent years until a new notice specifying a different election
shall be delivered to the Company. Any such new notice shall apply only
to compensation for years (February 1 through January 31) subsequent to
the calendar year in which such new notice is delivered.
V. DEFERRED COMPENSATION ACCOUNTS.
(A) An account shall be established and maintained for each Participant in
the Plan. Units, including fractional Units, shall be credited to each
Participant's account to the extent of compensation deferred pursuant to
the Plan in accordance with the following procedures: (1) compensation
otherwise payable to the Participant, but deferred pursuant to the Plan,
arising from payment of quarterly in-advance installments of the annual
standard retainer payable to all non-employee members of the Board of
Directors, shall be credited to the Participant's account as Units,
including fractional Units, with the actual payment date of such
installments being February 1, May 1, August 1 and December 1 of each
year (or, if any such day is a Saturday, Sunday or legal holiday, the
next business day); (2) compensation otherwise payable to the
Participant, but deferred pursuant to the Plan, arising from payment of
fees
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attributable to service as the Chairman of any Committee(s) of the Board
of Directors, shall be credited to the Participant's account as Units,
including fractional Units, on May 1 of each year (or, if any such day is
a Saturday, Sunday or legal holiday, the next business day); (3)
compensation otherwise payable to the Participant, but deferred pursuant
to the Plan, arising from payment of fees attributable to attendance at
meetings of the Board of Directors or any Committee(s) of the Board of
Directors, shall be credited to the Participant's account as Units,
including fractional Units, on the date of each and any such meetings and
(4) dividend equivalents earned on the basis of whole Units previously
credited to the Participant's account shall be credited to the
Participant's account as Units, including fractional Units, on the date
any such dividend has been declared to be payable on shares of common
stock of the Company by the Board of Directors of the Company. Units,
excluding fractional Units, shall earn dividend equivalents from the date
of crediting until the date of final valuation of the Units on the last
day of the Participant's service as a Director. Dividend equivalents
shall be computed by multiplying the dividend paid per share of common
stock of the Company during the period Units are credited to a
Participant's account times the number of whole Units so credited, but
Units, excluding fractional Units, shall earn such dividend equivalents
only as, if and when dividends are declared and paid on the common stock
of the Company.
(B) Each Unit shall have an initial value and be credited in respect of
deferred compensation, equal to one hundred percent (100%) of the fair
market value of one share of the common stock of the Company on the
date, as hereinabove provided, of crediting to the Participant's
account. The fair market value per Unit shall be the average between
the highest and lowest quoted selling price per share of common stock on
the New York Stock Exchange Corporate Transactions Tape. If there
should be no sale of the shares of common stock of the Company on such
date, then the price per share shall be the average between the highest
and lowest quoted selling price on the Corporate Tape on the next
preceding day on which there shall have been a sale.
VI. METHOD OF DISTRIBUTION OF DEFERRED COMPENSATION -
UNFORESEEABLE EMERGENCY.
(A) No distribution of deferred compensation may be made except as provided
in this Section VI.
(B) The final value of said Units, including fractional Units, shall be
computed in accordance with the provisions of the second and third
sentences of Section V(B) and determined on and as of the last day of a
Participant's service as a Director. The value of Units, including
fractional Units, credited to a Participant's deferred compensation
account for each year shall be payable only in cash, either in a lump
sum or in up to ten annual installments. Payment of the lump sum or the
first annual installment shall be made or shall commence, as the case
may be, as soon as practicable, but not later than fifteen (15) days
following the date on which the Participant's service as a Director
terminates. If annual installments
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are elected for any year, the amount of the first payment shall be a
fraction of the amount of the Participant's deferred compensation
account for such year as of the last day of a Participant's Service as a
Director, the numerator of which is one and the denominator of which is
the total number of installments elected. The amount of each subsequent
payment shall be a fraction of the amount as of December 31 of the year
preceding each subsequent payment, the numerator of which is one and the
denominator of which is the total number of installments elected minus
the number of installments previously paid.
(C) Each distribution of deferred compensation, subsequent to the first
distribution, in annual installments, shall be made on January 10 (or,
if that date is a Saturday, Sunday or holiday, the next business day) of
the year, or years, as the case may be, of distribution.
(D) At the written request of a Participant, the Plan's Administrative
Committee, in its sole discretion, may authorize the cessation of
deferrals by such Participant under the Plan or accelerate payment of
any installments at any time after the sixth month following such
Participant's termination of service as a Director, upon a showing of
unforeseeable emergency by such Participant. If the Administrative
Committee authorizes any such distribution, valuation of the Units to be
distributed shall be determined on the date of such authorization in
accordance with the second and third sentences of paragraph VI(B). For
purposes of this paragraph, "unforeseeable emergency" is defined as
severe financial hardship resulting from extraordinary and unanticipated
circumstances arising as a result of one or more recent events beyond
the control of the Participant. In any event, payment may not be made
to the extent such emergency is or may be relieved: (1) through
reimbursement or compensation by insurance or otherwise; (2) by
liquidation of the Participant's assets, to the extent the liquidation
of such assets would not, itself, cause severe financial hardship; and
(3) by cessation of deferrals under the Plan. Examples of what are not
considered to be unforeseeable emergencies include the need to send a
Participant's child to college or the desire to purchase a home.
(E) The account will be credited with dividend equivalents in accordance
with the Plan up to the date of hardship distribution on account of an
unforeseeable emergency, or the last date of the Participant's service
as a Director, whichever first occurs.
(F) Interest shall accrue and be payable each succeeding January 10 (or, if
that date is a Saturday, Sunday or holiday, the next business day), on
and with respect to the total amount credited to a Participant's account
on and as of the final valuation of said account on each Participant's
last day of service as a Director through the date of initial
distribution and until the subsequent January 10 (or, if that date is a
Saturday, Sunday or holiday, the next business day) on the total amount
less the initial distribution. Such interest shall accrue at the prime
corporate rate in effect (at Morgan Guaranty, New York City) on the last
day of service. Regardless, if the Participant receives a lump sum
distribution, such lump sum distribution shall, include the interest
accrued through such date. Thereafter,
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interest will accrue on remaining principal amounts at the prime
corporate rate in effect (at Morgan Guaranty, New York City) on January
10 of each succeeding year, and be payable in full on each immediately
following January 10 (or, in each case, if such date is a Saturday,
Sunday or holiday, the next business day) until all principal amounts in
the Participant's account have been paid in accordance with his or her
election regarding lump sum or installment payments of deferred amounts.
VII. DISTRIBUTION UPON DEATH.
If any Participant dies while a Director, or thereafter, before receiving all
amounts credited to his or her account, the unpaid amount in the
Participant's account shall be paid in one lump sum on the last business day
of the month following the month of death to any beneficiary or beneficiaries
designated by the Participant by written notice to the Company or, in the
absence of such designation, to such Participant's estate.
VIII. PARTICIPANT'S RIGHTS IN ACCOUNT - UNFUNDED STATUS OF THE PLAN.
A Participant shall not have any interest in any amounts credited to his or
her account until it is distributed in accordance with the Plan. Any and all
cash payments made to a Participant pursuant to the Plan shall be made only
from the general assets of the Company. All amounts deferred under the Plan
shall remain the sole property of the Company, subject to the claims of its
general creditors and available for its use for whatever purposes are
desired. With respect to amounts deferred, a Participant is merely a general
creditor of the Company; and the obligation of the Company hereunder is
purely contractual and shall not be funded or secured in any way.
IX. NON-ALIENABILITY AND NON-TRANSFERABILITY.
The rights of a Participant to the payment of deferred compensation as
provided in the Plan shall not be assigned, transferred, pledged or
encumbered or be subject in any manner to alienation or anticipation. No
Participant may borrow against Units or fractional Units. No Units or
fractional Units shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, change, garnishment,
execution or levy of any kind, whether voluntary or involuntary prior to
distribution of deferred compensation in accordance with Section VI.
X. STATEMENT OF ACCOUNT.
Statements will be sent to Participants during February of each year as to
the balance in their deferred compensation accounts as of the end of the
previous calendar year.
XI. ADMINISTRATION.
The Administrator of this Plan shall be the Administrative Committee. The
Plan's Administrative Committee, shall consist of up to (but may be less
than) three (3) persons who are not and cannot be Participants in the Plan
and who shall be Directors of the Company. The Administrative Committee
shall be appointed annually by, and may
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include the Chief Executive Officer of the Company. The Administrative
Committee shall have authority to adopt rules and regulations for carrying out
the Plan and to interpret, construe and implement the provisions thereof.
XII. AMENDMENT AND TERMINATION.
The Plan may, at any time, be amended, modified or terminated by the Board of
Directors or the Executive Committee of the Company. No amendment,
modification or termination shall, without the consent of a Participant,
adversely affect such Participant's rights with respect to amounts accrued in
his or her deferred compensation account.
XIII. NOTICES.
All notices to the Company hereunder shall be delivered to the attention of the
Secretary of the Company.
XIV. ADJUSTMENTS.
If any change is made in the stock from which Units, including fractional
Units, in the Plan are derived, whether through merger, consolidation,
reorganization, recapitalization, stock dividend, split-up, combination of
shares, change in corporate structure or otherwise, the Administrative
Committee, in its sole discretion, may make appropriate adjustments in the
number and value of outstanding Units, or fractional Units. The decision of
the Administrative Committee as to whether to make any such adjustments, and
their amount and timing, if made, shall be conclusive.