Kellogg Company
2003 Long Term Incentive Plan
OPTION TERMS AND CONDITIONS
FOR SVP EXECUTIVE OFFICERS
|
1.
|
|
Kellogg Company (the
“Company”) awards to you and you accept an option to
purchase the number of shares of the Company’s Common Stock
($0.25 par value) (the “Common Stock”) at the option
price per share on the date of award described in the Non-Qualified
Stock Option Award (the “Award Date”) and distributed
to you with this Terms and Conditions document (such document,
together with the Non-qualified Stock Option Award, being the
“Option”).
|
|
|
|
|
|
2.
|
|
This Option is not a tandem grant
nor an Incentive Stock Option under the provisions of the U.S.
Internal Revenue Code and, notwithstanding any other provision of
this Option or the Kellogg Company 2003 Long Term Incentive Plan
(the “Plan”), it must be exercised prior to the
expiration of ten (10) years from the Award Date (the
“Expiration Date”). This Option vests and becomes
exercisable in equal installments over three (3) years:
one-third on the first anniversary date of the grant, one-third on
the second anniversary date of the grant and the remaining
one-third on the third anniversary date of the grant. It is your
responsibility to exercise this Option prior to its Expiration
Date, just as is the case with any other employee stock option. The
Company has no obligation to notify or contact you prior to the
Expiration Date of this Option, or any other option.
|
|
|
|
|
|
4.
|
|
This Option fully vests if your
employment terminates because of death, Disability (as defined in
the Plan) or Retirement (as defined in the Plan). If your
employment terminates because of death, the legal representative of
your estate or your beneficiary, if so designated, may exercise
this Option before the first to occur of the Expiration Date and
the day after the first anniversary of your death. If your
employment terminates because of Disability or Retirement, you may
exercise this Option before the first to occur of the Expiration
Date and the day after the fifth anniversary of your termination of
employment due to Disability or Retirement.
|
|
|
|
|
|
5.
|
|
If
the Company terminates your employment for cause or if you
voluntarily terminate employment, vesting stops as of the date of
your termination of employment and any vested portion of this
Option must be exercised by you prior to such termination date (or
the Expiration Date, if earlier). Any unvested Options outstanding
on the date of termination shall be forfeited by you and cancelled
by the Company.
|
|
|
|
|
|
6.
|
|
If
the Company terminates your employment without cause, vesting stops
as of your date of termination of employment and any vested portion
of this Option must be exercised by you before the first to occur
of the Expiration Date and the date that is three months and one
day following the date of your termination of
employment.
|
|
|
|
Any
unvested Options outstanding on the date of termination shall be
forfeited by you and cancelled by the Company.
|
|
7.
|
|
In
the event of a Change of Control, as defined in the Plan, this
Option becomes fully exercisable and vested as of the date of such
Change of Control.
|
|
|
|
|
|
8.
|
|
If
the exercise of this Option within the time periods set forth
herein is prevented by the provisions of Section 16.6 of the
Plan, the Option shall remain exercisable until thirty (30) days
after the date such exercise first would no longer be prevented by
such provisions, but in any event no later than the Expiration
Date.
|
|
|
|
|
|
9.
|
|
This Option may be exercised, in
whole or in part during the term, by contacting Merrill Lynch at 1-
866-866-4050 or 1-609-818-8669 (outside of the U.S., Canada, or
Puerto Rico), or the Merrill Lynch Grand Rapids Office at
1-877-884-4371 or 1-616-774-4252 (outside of the U.S., Canada, or
Puerto Rico). This Option may be exercised by paying the exercise
price in cash or surrendering (or attesting to) shares of Common
Stock duly owned by you as provided in the Plan, based on the Fair
Market Value (as provided in the Plan) or via a buy/sell exercise
with Merrill Lynch.
|
|
|
|
|
|
10.
|
|
The
Company shall have the right to deduct or otherwise require any
payment by you of any Federal, state, local or foreign taxes
required by law to be withheld. The Company has the right to deduct
or require this payment prior to, and as a condition precedent to,
issuing or delivering any shares of Common Stock, to you pursuant
to this Option. Subject to any terms and conditions which the
Committee (as defined in the Plan) may impose, the minimum required
withholding obligation may be satisfied by reducing the number of
shares of Common Stock otherwise deliverable pursuant to this
Option. You acknowledge that (i) the ultimate liability for
any and all taxes is and remains your responsibility, (ii) the
Company makes no representations or undertaking regarding the
amount or timing of any taxes, (iii) the Company does not
commit to structure the terms of this Option or any aspect of the
transfer of the shares to reduce or eliminate your liability for
taxes, and (iv) in no event shall the Company be liable for
any tax or other costs to you that may arise under
Section 409A of the Internal Revenue Code of 1986 (the “
Code ”).
|
|
|
|
|
|
11.
|
|
You
will not receive any accelerated ownership feature or
“reload” options when this Option is exercised or any
tax withholding is paid using shares of Common Stock or
otherwise.
|
|
|
|
|
|
12.
|
|
This Option shall be construed
according to the laws of the State of Delaware (regardless of the
law that might otherwise govern under applicable Delaware
principles of conflict laws) to the extent not superseded by
Federal U.S. law.
|
|
|
|
|
|
13.
|
|
If
you exercise any portion of this Option and voluntarily leave
employment of the Company or any of its subsidiaries within one
(1) year after such exercise to work for a direct competitor
of the Company or any of its subsidiaries, then the gain on
exercise represented by the mean market price of the Common Stock
on the date of
|
|
|
|
exercise over
the exercise price, multiplied by the number of shares purchased,
less any tax withholding or tax obligations, without regard to
any
|
|
