Document:

exv10w42

 

EXHIBIT 10.42

KELLOGG COMPANY

EXECUTIVE SURVIVOR INCOME PLAN

(As Amended and Restated Effective January 1, 2004)

ARTICLE 1

HISTORY,
PURPOSE AND EFFECTIVE DATE

     The
Kellogg Company Executive Survivor Income Plan (“Plan”) was
established by Kellogg Company
(“Company”) effective November 1, 1985 to provide
survivor benefits to the beneficiaries of certain
executives of the Company. The Plan has been amended from time to time since that date. The following
provisions constitute an amendment and restatement of the Plan, generally effective January 1, 2004, unless
a different effective date is specified herein.

ARTICLE 2

ELIGIBILITY

     Effective July 1, 2002, all Senior Executives of the Company shall be eligible to
participate in the Plan and become “Participants” hereunder. The Company’s Chairman
and Chief Executive Officer shall have the sole authority and discretion to designate
any officer or executive of the Company as a “Senior Executive” for purposes of this
Plan, and to revise such designation. Generally, only employees in a level 8 position
or above may be designated as Senior Executives, although the Chairman and Chief
Executive Officer may designate an employee in a lower level position as a Senior
Executive, if he determines, in his sole discretion, that circumstances warrant such a
designation.

ARTICLE 3

PARTICIPATION 

     3.1. Commencement of Participation. A Senior Executive’s participation in
the Plan commences immediately upon such individual meeting the eligibility standards set
forth in Article 2. Employees who met the eligibility standards prior to July 1, 2002 but
are not classified

 

 

as Senior Executives after that date shall continue to be eligible to participate in the Plan in
accordance with the provisions of this Article 2 and Article 3.

     3.2. Effect of Termination of Employment on Participation. Participation in the
Plan will continue until the first to occur of the following:

	 	1.	 	If the Participant became eligible to participate in the Plan
prior to
April 1, 2001, and the Participant’s employment with the Company
and its affiliates terminates for any reason other than death or
Retirement, the Participant’s participation in the Plan shall cease
on such termination of employment. In such an event, no benefits
will be payable under the Plan to any person.
	 
	 	2.	 	If the Participant became eligible to participate in the Plan on
or
after April 1, 2001, participation will cease on the Participant’s
termination of the employment with the Company and its affiliates
for any reason other than death. In such an event, no benefits will
be payable under the Plan to any person.
	 
	 	3.	 	If the Participant became eligible to participate in the Plan
prior to
April 1, 2001 and the Participant’s employment with the Company
and its affiliates terminates by reason of Retirement (defined
below) or death, then following the Participant’s death, the
Participant’s beneficiary shall be eligible for the benefits set forth
in Article 4.
	 
	 	4.	 	If the Participant became eligible to participate in the Plan on
or
after April 1, 2001, the Participant’s beneficiary shall be eligible
for the benefits set forth in Article 4 if the Participant’s termination
of employment with the Company and its affiliates occurs by
reason of the Participant’s death.

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     For purposes of the Plan, the term “Retirement” means that an eligible Participant terminates
employment with the Company and its affiliates after satisfying one of the following requirements
on or before January 1, 2014:

	 	(a)	 	Age 55 with 20 years of service
	 
	 	(b)	 	Age 62 with 5 years of service
	 
	 	(c)	 	Age 65 with any number of years of service

	 
	 	(d)	 	Any age with 30 years of service

     A Participant’s “years of service” for purposes of the foregoing requirements shall be
determined consistent with the provisions of the Kellogg Company Pension Plan.

     A Participant may terminate his or her participation in the Plan at any time, provided that
the Participant gives prior notice to the Company of the election not to participate.

     A Company-approved leave of absence will not be deemed a termination of employment under this
Plan during the period of such leave, unless either the Participant agrees to a cessation of
participation under such leave of absence, or the Company notifies the Participant in writing
before the leave that participation in the Plan will not be extended.

     3.3. Change in Classification. A Participant who ceases to be designated as a Senior
Executive shall continue to be eligible for the benefits provided to Senior Executives under the
Plan until the Participant’s participation in the Plan
terminates pursuant to Section 3.2.
Similarly, if a Participant who was eligible to participate in the Plan prior to July 1, 2002 and
who was an Officer of the Company prior to that date ceases to be an Officer of the Company, such
Participant shall continue to be eligible for the benefits provided to Officers prior to July 1,
2002 under the Plan until such Participant’s participation in the Plan terminates pursuant to
Section 3.2. For purposes of the Plan, the term “Officer” shall mean the employees designated as
officers of the Company by the Board of Directors of the Company.

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     3.4. Rehires. If a Participant who terminates employment with the Company and affiliates
ceases to be a Participant in the Plan by reason of such termination and is later
rehired, such individual shall not be a Participant in the Plan for periods on or after
his or her rehire date unless and until such employee again satisfies the requirements
for participation under Section 3.1.

ARTICLE 4

BENEFITS

     4.1. Amount of Benefit. The Company may, in its discretion, establish
different benefit levels for different classes of Participants. As of the effective date
of this amendment and restatement, and subject to the provisions of Section 3.2, the
following benefits are provided under the Plan with respect to Participants who are
active employees of the Company and its affiliates as of January 1, 2004:

	 	1.	 	A Participant who either (i) is a Senior Executive on or
after July 1, 2002, or (ii) was an Officer of the Company prior to July 1,
2002, shall be eligible for a benefit equal to three (3) times
Compensation if such Participant’s termination of employment
with the Company and affiliates occurs by reason of death.
	 
	 	2.	 	An individual who was a Participant in the Plan prior to
July 1, 2002 and who does not satisfy the requirements of paragraph 1
next above shall be eligible for a benefit equal to two (2) times
Compensation if such Participant’s termination of employment
with the Company and affiliates occurs by reason of death.
	 
	 	3.	 	A Participant in the Plan whose participation in the Plan
continues following Retirement pursuant to Section 3.2 and whose death
occurs after such Retirement shall be eligible for a benefit
equal to one (1) times Compensation.

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In addition to the foregoing, a Participant who was an active Participant in the Plan prior to
April 1, 2001 and whose retirement (determined in accordance with the terms of the Plan as in
effect at the time of the Participant’s termination of employment) occurred prior to January 1,
2004, shall be eligible for the same benefit the Participant was entitled to as an active
employee, determined in accordance with the terms of the Plan as in effect on such Participant’s
retirement date.

The Company reserves the sole discretion to otherwise increase or decrease the benefits under this
Plan, provided that there shall be no increase or decrease of a benefit payable to a beneficiary of
a Participant who has died prior to the Company making a change in the benefit level under this
Plan.

     4.2. Definition of Compensation. For purposes of the Plan, “Compensation”
shall mean the following:

	 	1.	 	In the case of a Participant who dies prior to termination of
employment with the Company and affiliates, Compensation means the
Participant’s annual base salary as in effect for the year in which the
Participant’s death occurs, plus the bonus paid, if any, for the last
full year preceding the date of the Participant’s death.
	 
	 	2.	 	In the case of a Participant whose termination of employment with
the Company and affiliates occurs by reason of Retirement and who
remains eligible for benefits under the Plan following such
Retirement pursuant to Section 3.2, Compensation shall be determined
by substituting the date of the Participant’s Retirement for the date
of the Participant’s death under paragraphs 1 and 2 next above, as
applicable.
	 
	 	3.	 	Notwithstanding the foregoing provisions of this Section 4.2, in
the case of a Participant whose Compensation during any year of Plan
participation would be greater than the amount determined above if

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	 	 	 	such Compensation had been calculated as of the last day of such
year (i.e., as if the Participant had terminated employment or died
on the last of such year), the Company, in its discretion, may elect
to base the Participant’s Plan benefits on such higher amount of
Compensation.

     4.3. Payment of Benefits. Payments to a beneficiary will be made as a lump sum within
a reasonable period after the Participant’s death, unless the Participant elects of one of the
following alternative options:

	 	1.	 	Benefits paid to the Participant’s designated beneficiary in one
hundred twenty (120) equal monthly installments, with the
monthly amount being determined by multiplying the total benefit
amount by 1.25 percent.
	 
	 	2.	 	Benefits paid to the Participant’s designated beneficiary in
sixty
(60) equal monthly installments, with the monthly amount being
determined by multiplying the total benefit amount by 2.0 percent.

     Any election of an alternative form of payment must be made at the time and in
the form specified by the Company and will only be valid if filed with the Company
prior to the Participant’s death.

     4.4. Designation of Beneficiary. The beneficiary under this Plan shall be the
beneficiary last designated by the Participant under the Company’s group term life insurance plan
unless the Participant notifies the Company of the designation of a different beneficiary for
purposes of this Plan. Should the designated beneficiary or beneficiaries not survive the
Participant, and benefits become payable under this Plan, said benefits shall be paid in a lump-sum
payment to the Participant’s estate. Should a surviving
beneficiary who is entitled to payment(s)
under this Plan die before the benefit is fully paid, a lump-sum payment equal to the present value
of the remainder of the benefit shall be paid to that beneficiary’s estate.

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     4.5.
Form of Payment. All benefits under the plan are payable in United States
Dollars ($). Payment in any other currency may be made only with the approval of the
Company.

     4.6. No Conversion Rights. There are no conversion rights to benefits provided by
this Plan.

ARTICLE 5

FUNDING

     A Participant shall not be required to contribute toward the cost of the survivor benefits
provided under this Plan. Plan benefits shall be paid solely from the general assets of the
Company. This Plan does not involve salary reduction and in no way affects the past, present, or
future compensation of any Participant.

     The benefits under this Plan are inalienable and not subject to assignment, pledge,
encumbrance, seizure, attachment, or any other legal or equitable liability of any Participant or
any beneficiary. The Company’s obligations under this Plan will not be secured in any way and any
claims arising hereunder shall have no priority over the claims of the general creditors of the
Company.

     No Participant or beneficiary shall have any right, title, or interest in any asset of the
Company which has been designated or segregated for purposes of funding the benefits under this
Plan. The Company may or may not, in its discretion, purchase life insurance on the life of the
Participant to partially or wholly fund the cost of the survivor
income benefit. In the event such
policies are purchased, the Company shall be the sole owner and beneficiary of such insurance
policy and a Participant or beneficiary shall have no right, title, or interest in any such policy.

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ARTICLE 6

TERMINATION OR MODIFICATION

     The Company reserves the right to amend or terminate the Plan at any time; provided, however,
no such amendment or termination shall impair any benefits payable to a beneficiary with respect
to a Participant who has died prior to such amendment or termination.

ARTICLE 7

ADMINISTRATION OF THE PLAN

     7.1. Committee Duties and Authority. The Kellogg Company ERISA Administrative
Committee (“Committee”) shall administer the Plan and is authorized to make such rules and
regulations as it may deem necessary and proper to carry out the provisions of the Plan and to
designate actuaries, attorneys, accountants, and such other persons as it shall deem necessary or
desirable in the administration of the Plan. The Committee shall consider any question arising in
the administration, interpretation, and application of the Plan; and its determination on said
question shall be conclusive and binding on all persons.

     The
Committee shall act by the majority of members then in office at all meetings and may set
up a procedure to act upon matters by vote in writing without a meeting. The Committee, by
unanimous written consent, may authorize one (1) or more of its members to sign directions,
communications, and to execute documents on behalf of the Committee.

     7.2.
Claims Procedures. A beneficiary of a Participant (a “Claimant”) may submit his or her
claim for benefits to the Committee (or such other person or persons as may be designated by the
Committee) in accordance with the following:

	 	1.	 	Initial Claim. Such claim shall be in writing or made
telephonically, in such form as is provided or approved by the Committee. A
Claimant shall have no right to seek review of a denial of benefit, or to
bring any action

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	 	 	 	in any court to enforce a claim for benefits under the Plan, prior to filing a claim and exhausting
his or her rights to review under this Section 7.2. When a claim for benefits has been filed
properly, such claim shall be evaluated and the Claimant shall be notified of the approval or the
denial within ninety (90) days after the receipt of such claim unless special circumstances require
an extension of time for processing the claim. If such an extension of time is required, written
notice of the extension shall be furnished to the Claimant prior to the termination of the initial
ninety (90) day period which shall specify the special circumstances requiring an extension and the
date by which a final decision will be reached (which date shall not be later than one hundred and
eighty (180) days after the date on which the claim was filed). A Claimant shall be given a written
or electronic notice in which the Claimant shall be advised as to whether the claim is granted or
denied, in whole or in part. If a claim is denied, in whole or in part, such notice shall contain
(i) the specific reasons for the denial, (ii) references to the Plan provisions on which the denial
is based, (iii) a description of any additional material or information necessary to perfect the
claim and an explanation of why such material or information is necessary, (iv) the Claimant’s
right to seek review of the denial, and (v) the Claimant’s right to bring a civil action under
Section 502(a) of the Employee Retirement Income Security Act of 1974 (“ERISA”) following an
adverse benefit determination on review.

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	 	2.	 	Review of Claim Denial. If a claim is denied, in whole or in part (if the
Claimant has not received an approval or denial within the time periods specified in
paragraph (a) above, the claim shall be deemed denied), the Claimant shall have the right
to request that the Committee review the denial, provided that the Claimant files a
written request for review with the Committee within sixty (60) days after the date on
which the Claimant receives notification of the denial or the date the claim is deemed
denied. A claimant (or his or her duly authorized representative) may review pertinent documents
and submit issues and comments in writing to the Committee. Within sixty (60) days after
a request for review is received, the review shall be made and the Claimant shall be
advised in writing or electronically of the decision on review, unless special
circumstances require an extension of time for processing the review, in which case the
Claimant shall be given written notification within such initial sixty (60) day period
specifying the reason for the extension and when such review shall be completed (provided
that such review shall be completed within one hundred and twenty (120) days after the
date on which the request for review was filed). The decision on review shall be
forwarded to the Claimant in writing or electronically and shall include specific reasons
for the decision, references to Plan provisions upon which the decision is based, a
statement of the Claimant’s right to receive free of charge copies of all documents
relevant to the claim, and the Claimant’s right to file a civil action under Section
502(a) of ERISA. A decision on review is final

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	 	 	 	and binding for all purposes. If a Claimant fails to file a request for review in accordance with
the procedures described in this Section 7.2, such Claimant shall have no right to review and shall
have no right to bring action in any court and the denial of the claim shall become final and
binding on all persons for all purposes.

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     IN WITNESS WHEREOF, KELLOGG COMPANY has caused this instrument to be executed by its duly
authorized officers on this 19th day of April 2005, effective as of January 1, 2004.

	 	 	 	 	 
	 	KELLOGG COMPANY

 	 
	 	By:  	/s/
Gary Pilnick	 
	 	 	Title: Senior Vice President 	 
	 	 	 	 
	 

ATTEST:

			
	By:  	/s/
Olivia Harvey	 

12<PAGE>

                                                                   Exhibit 10.23

NON-EMPLOYEE DIRECTOR COMPENSATION

The compensation package for non-employee directors is currently comprised of
annual cash retainers, meeting fees and grants of restricted common stock. Each
director receives a $40,000 annual retainer for service to the Board. The
Chairman of the Board of Directors receives an additional annual retainer of
$30,000, the Chairman of the Audit Committee of the Board of Directors receives
an additional annual cash retainer of $10,000, and the Chairman of the
Compensation Committee of the Board of Directors, the Chairman of the Corporate
Governance and Nominating Committee of the Board of Directors and members of the
Audit Committee (other than the Chairman) each receives an additional annual
retainer of $5,000. Each director also receives a $2,000 fee for attending
regular meetings of the Board. Members of the Audit Committee receive a $2,000
fee for attending committee meetings, while members of the Corporate Governance
and Nominating Committee and members of the Compensation Committee receive a
$1,500 fee for attending committee meetings. Unless otherwise designated by the
committee chair, each committee member receives one-half of the regular
committee-meeting fee for attending committee meetings held telephonically. In
addition to the foregoing cash fees, non-employee directors also receive 2,000
shares of restricted common stock. Directors have the choice to elect to take
all or a portion of their Board fees in common stock of the Company, and may
defer all or part of their fee compensation. Directors are reimbursed for
expenses incurred in connection with attending Board and committee meetings.

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