Document:

exv4w10

 

EXHIBIT 4.10

Form of Multicurrency Global Note

(Interest Bearing/Discounted/Index-Linked)

The Securities covered hereby have not been registered under the U.S. Securities Act of 1933, as
amended (the Securities Act) and may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons. Terms used above have the meanings given to them by
Regulation S under the Securities Act.

By accepting this obligation, the holder represents that it is not a United States person (other
than an exempt recipient described in Section 6049(b)(4) of the U.S. Internal Revenue Code and the
regulations described thereunder) and that it is not acting for or on behalf of a United States
person (other than an exempt recipient described in Section 6049(b)(4) of the U.S. Internal Revenue
Code and the regulations thereunder).

KELLOGG COMPANY

(Incorporated in Delaware)

	 	 	 
	No:
	 	 
	 

	 	 

	 	 	 
	Issued in London on:
	 	 
	 

	 	 

	 	 	 
	Specified Currency:
	 	 
	 

	 	 

	 	 	 
	Nominal Amount:
	 	 
	 

	 	 
	(words and figures if a Sterling Note)

	 	 	 
	Calculation Agent:3
	 	 
	 

	 	 

	 	 	 	 	 
	Fixed Interest Rate:5

	 	 	 	% per annum
	 

	 	 	 	 

	 	 	 
	Calculation Agent:7
	 	 
	 

	 	 
	(Interest)
	 	 

	 	 	 
	Series No.:
	 	 
	 

	 	 

	 	 	 
	Maturity Date1:
	 	 
	 

	 	 

	 	 	 
	Denomination:
	 	 
	 

	 	 

Reference Rate: LIBOR/EURIBOR2

	 	 	 
	Minimum Redemption Amount4
	 	 
	 

	 	 

	 	 	 
	Margin:6

	 	%
	 

	 	 

	 	 	 
	Interest Payment Dates:8
	 	 
	 

	 	 

 

			
	1	 	“Not to be more than 364 days from (and
including) the Issue Date.”
	 
	2	 	Delete as appropriate. The reference rate
will be LIBOR unless this Global Note is denominated in euro and the Issuer and
the relevant Dealer agree that the reference rate should be EURIBOR.
	 
	3	 	Complete for index-linked Notes only.
	 
	4	 	“Complete for a Sterling index linked note.”
	 
	5	 	Complete for fixed rate interest bearing Notes
only.
	 
	6	 	Complete for floating rate interest bearing
Notes only.
	 
	7	 	Complete for floating rate interest bearing
Notes only.
	 
	8	 	Complete for interest bearing Notes.

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	1.	 	For value received, KELLOGG COMPANY (the “Issuer”) promises to pay to the bearer of
this Global Note on the above-mentioned Maturity Date:

	 	(a)	 	the above-mentioned Nominal Amount; or
	 
	 	(b)	 	if this Global Note is index-linked, an amount (representing either principal
or interest) to be calculated by the Calculation Agent named above, in accordance with
the redemption or interest calculation, a copy of which is attached to this Global Note
and is available for inspection at the offices of the Paying Agent referred to below,

together (in any case) with interest thereon at the rate and at the times (if any) specified
herein.

All such payments shall be made in accordance with an issue and paying agency agreement
dated on or about 31 January 2007 between the Issuer, Kellogg Europe Company Limited and
Kellogg Holding Company Limited and Kellogg Company as the Guarantor, the issue agent and
the paying agents referred to therein, a copy of which is available for inspection at the
offices of HSBC Bank plc (the “Paying Agent”) at 8 Canada Square, London, E14 5HQ, and
subject to and in accordance with the terms and conditions set forth below. All such
payments shall be made upon presentation and surrender of this Global Note at the offices of
the Paying Agent referred to above by transfer to an account denominated in the
above-mentioned Specified Currency maintained by the bearer with a bank in the principal
financial centre in the country of that currency or, in the case of a Global Note
denominated or payable in euro by transfer to a euro account (or any other account to which
euro may be credited or transferred) maintained by the payee with, a bank in the principal
financial centre of any member state of the European Union. The Issuer will ensure that it
maintains a paying agent in a member state of the European Union that will not be obliged to
withhold or deduct tax pursuant to such Directive or any law implementing or complying with,
or introduced to conform to, such Directive.

Notwithstanding the foregoing, presentation and surrender of this Global Note shall be made
outside the United States and no amount shall be paid by transfer to an account in the
United States, or mailed to an address in the United States. In the case of a Global Note
denominated in U.S. dollars, payments shall be made by transfer to an account denominated in
U.S. Dollars in the principal financial centre of any country outside of the United States
that the Issuer or Agent so chooses.

2. This Global Note is issued in representation of an issue of Notes in the
above-mentioned aggregate Nominal Amount.

3. All payments in respect of this Global Note by or on behalf of the Issuer shall be
made without set-off, counterclaim, fees, liabilities or similar deductions and free and clear
of, and without deduction or withholding for or on account of, taxes, levies, duties,
assessments or charges of any nature now or hereafter imposed, levied, collected, withheld or
assessed by or on behalf of Delaware or any political subdivision or taxing authority of or in
any of the foregoing (“Taxes”). If the Issuer or any agent thereof is required by law or
regulation to make any

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deduction or withholding for or on account of Taxes, the Issuer shall, to the extent
permitted by applicable law or regulation, pay such additional amounts as shall be necessary
in order that the net amounts received by the bearer of this Global Note after such
deduction or withholding shall equal the amount which would have been receivable hereunder
in the absence of such deduction or withholding, except that no such additional amounts
shall be payable where this Global Note is presented for payment:

	 	(a)	 	by or on behalf of a holder which is liable to such Taxes by reason of its
having some connection with the jurisdiction imposing the Taxes other than the mere
holding of this Global Note; or
	 
	 	(b)	 	where such deduction or withholding is imposed on a payment to an individual
and is required to be made pursuant to European Council Directive 2003/48/EC or any
other Directive implementing the conclusions of the ECOFIN Council meeting of 26-27
November 2000 on the taxation of savings income or any law implementing or complying
with, or introduced in order to conform to, such Directive; or
	 
	 	(c)	 	by or on behalf of a holder who would have been able to avoid such withholding
or deduction by (i) presenting this Global Note to another Paying Agent in a member
state of the European Union or (ii) by authorising the Paying Agent to report
information in accordance with the procedure laid down by the relevant tax authority or
by producing, in the form required by the relevant tax authority, a declaration, claim,
certificate, document or other evidence establishing exemption therefrom; or
	 
	 	(d)	 	more than 15 days after the Maturity Date or, if applicable, the relevant
Interest Payment Date or (in either case) the date on which payment hereof is duly
provided for, whichever occurs later, except to the extent that the holder would have
been entitled to such additional amounts if it had presented this Global Note on the
last day of such period of 15 days.

	4.	 	If the Maturity Date or, if applicable, the relevant Interest Payment Date is not a
Payment Business Day (as defined herein) payment in respect hereof will not be made and credit
or transfer instructions shall not be given until the next following Payment Business Day
(unless that date falls more than 364 days after the Issue Date, in which case payment shall
be made on the immediately preceding Payment Business Day) and neither the bearer of this
Global Note nor the holder or beneficial owner of any interest herein or rights in respect
hereof shall be entitled to any interest or other sums in respect of such postponed payment.

As used in this Global Note:

“Payment Business Day” means any day other than a Saturday or Sunday which is both (A) a day
on which commercial banks and foreign exchange markets settle payments and are open for
general business (including dealings in foreign exchange and foreign currency deposits) in
the relevant place of presentation, and (B) either (i) if the above-mentioned Specified
Currency is any currency other than euro, a day on which commercial banks and foreign
exchange markets settle payments and are open for general business (including dealings in
foreign exchange and foreign currency deposits) in both London and the principal financial
centre of the country of the relevant Specified Currency or (ii) if the

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above-mentioned Specified Currency is euro, a day which is a TARGET Business Day; and

“TARGET Business Day” means a day on which the Trans-European Automated Real-time Gross
Settlement Express Transfer (TARGET) System, or any successor thereto, is operating credit
or transfer instructions in respect of payments in euro.

Provided that if the Paying Agent determines with the agreement of the Issuers that the
market practice in respect of euro denominated internationally offered securities is
different from that specified above, the above shall be deemed to be amended so as to comply
with such market practice and the Paying Agent shall procure that a notice of such amendment
is published not less than 15 days prior to the date on which any payment in euro falls due
to be made in such manner as the Paying Agent may determine.

	5.	 	The payment obligation of the Issuer represented by this Global Note constitutes and
at all times shall constitute a direct and unsecured obligation of the Issuer ranking at least
pari passu with all present and future unsecured and unsubordinated indebtedness of the Issuer
other than obligations preferred by mandatory provisions of law applying to companies
generally.
	 
	6.	 	This Global Note is negotiable and, accordingly, title hereto shall pass by delivery
and the bearer shall be treated as being absolutely entitled to receive payment upon due
presentation hereof free and clear of any equity, set-off or counterclaim on the part of the
Issuer against any previous bearer hereof.
	 
	7.	 	This Global Note is issued in respect of an issue of Notes of the Issuer and is
exchangeable in whole (but not in part only) for duly executed and authenticated bearer Notes
in definitive form (whether before, on or, subject as provided below, after the Maturity
Date):

	 	(a)	 	if the clearing system(s) in which this Global Note is held at the relevant
time is closed for a continuous period of 14 days or more (other than by reason of
weekends or public holidays statutory or otherwise) or announces an intention
permanently to cease business or does in fact do so); or
	 
	 	(b)	 	if default is made in the payment of any amount payable in respect of this
Global Note.

Upon presentation and surrender of this Global Note during normal business hours to the
Issuer at the offices of the Paying Agent (or to any other person or at any other office
outside the United States as may be designated in writing by the Issuer to the bearer), the
Issue Agent shall authenticate and deliver, in exchange for this Global Note, bearer
definitive notes denominated in the above-mentioned Specified Currency in an aggregate
nominal amount equal to the Nominal Amount of this Global Note.

	8.	 	If, upon any such default and following such surrender, definitive Notes are not
issued in full exchange for this Global Note before 5.00 p.m. (London time) on the thirtieth
day after surrender, this Global Note (including the obligation hereunder to issue definitive
notes) will become void and the bearer will have no further rights under this Global Note (but
without prejudice to the rights which

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	 	 	the bearer or any other person may have under a Deed of Covenant dated on or about 31
January 2007 entered into by the Issuer).

	9.	 	If this is an interest bearing Global Note, then:

	 	(a)	 	notwithstanding the provisions of paragraph 1 above, if any payment of
interest in respect of this Global Note falling due for payment prior to the
above-mentioned Maturity Date remains unpaid on the fifteenth day after falling so due,
the amount referred to in part (a) or (b) (as the case may be) of paragraph 1 shall be
payable on such fifteenth day;
	 
	 	(b)	 	upon each payment of interest (if any) prior to the Maturity Date in respect
of this Global Note, the Schedule hereto shall be duly completed by the Paying Agent to
reflect such payment; and
	 
	 	(c)	 	if no Interest Payment Dates are specified on the face of the Global Note, the
Interest Payment Date shall be the Maturity Date.

	10.	 	If this is a fixed rate interest bearing Global Note, interest shall be calculated on
the Nominal Amount as follows:

	 	(a)	 	interest shall be payable on the Nominal Amount in respect of each successive
Interest Period (as defined below) from the Issue Date to the Maturity Date only, in
arrear on the relevant Interest Payment Date, on the basis of the actual number of days
in such Interest Period and a year of 360 days or, if this Global Note is denominated
in Sterling, 365 days at the above-mentioned Interest Rate with the resulting figure
being rounded to the nearest amount of the above-mentioned Specified Currency which is
available as legal tender in the country or countries (in the case of the euro) of the
Specified Currency (with halves being rounded upwards); and
	 
	 	(b)	 	the period beginning on (and including) the Issue Date and ending on (but
excluding) the first Interest Payment Date and each successive period beginning on (and
including) an Interest Payment Date and ending on (but excluding) the next succeeding
Interest Payment Date is an “Interest Period” for the purposes of this paragraph.

	11.	 	If this is a floating rate interest bearing Global Note, interest shall be calculated
on the Nominal Amount as follows:

	 	(a)	 	in the case of a Global Note which specifies LIBOR as the Reference Rate on
its face, the Rate of Interest will be the aggregate of LIBOR and the above-mentioned
Margin (if any) above or below LIBOR. Interest shall be payable on the Nominal Amount
in respect of each successive Interest Period (as defined below) from the Issue Date to
the Maturity Date only, in arrear on the relevant Interest Payment Date, on the basis
of the actual number of days in such Interest Period and a year of 360 days or, if this
Global Note is denominated in Sterling, 365 days.
	 
	 	 	 	As used in this Global Note:
	 
	 	 	 	“LIBOR” shall be equal to the rate defined as “LIBOR-BBA” in respect of the
above-mentioned Specified Currency (as defined in the 2000 ISDA Definitions published
by the International Swaps and Derivatives

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	 	 	 	Association, Inc., as amended, updated or replaced as at the date of this Global Note,
(the “ISDA Definitions”)) as at 11.00 a.m. (London time) or as near thereto as
practicable on the second London Banking Day before the first day of the relevant
Interest Period or, if this Global Note is denominated in Sterling, on the first day
thereof (a “LIBOR Interest Determination Date”), as if the Reset Date (as defined in
the ISDA Definitions) were the first day of such Interest Period and the Designated
Maturity (as defined in the ISDA Definitions) were the number of months specified on
the face of this Note in relation to the Reference Rate; and
	 	 	 	 
	 	 	 	“London Banking Day” shall mean a day on which commercial banks are open for general
business (including dealings in foreign exchange and foreign currency deposits) in
London;
	 
	 	(b)	 	in the case of a Global Note which specifies EURIBOR as the Reference Rate on
its face, the Rate of Interest will be the aggregate of EURIBOR and the above-mentioned
Margin (if any) above or below EURIBOR. Interest shall be payable on the Nominal
Amount in respect of each successive Interest Period (as defined below) from the Issue
Date to the Maturity Date only, in arrear on the relevant Interest Payment Date, on the
basis of the actual number of days in such Interest Period and a year of 360 days.
	 
	 	 	 	As used in this Global Note, “EURIBOR” shall be equal to EUR-EURIBOR-Telerate (as
defined in the ISDA Definitions) as at 11.00 a.m. (Brussels time) or as near thereto
as practicable on the second TARGET Business Day before the first day of the relevant
Interest Period (a “EURIBOR Interest Determination Date”);
	 
	 	(c)	 	the Calculation Agent will, as soon as practicable after 11.00 a.m. (London
time) on each LIBOR Interest Determination Date or 11.00 a.m. (Brussels time) on each
EURIBOR Interest Determination Date (as the case may be), determine the Rate of
Interest and calculate the amount of interest payable (the “Amount of Interest”) for
the relevant Interest Period. “Rate of Interest” means (A) if the Reference Rate is
EURIBOR, the rate which is determined in accordance with the provisions of paragraph
11(b), and (B) in any other case, the rate which is determined in accordance with the
provisions of paragraph 11(a). The Amount of Interest shall be calculated by applying
the Rate of Interest to the Nominal Amount of one Note of each denomination,
multiplying such product by the actual number of days in the Interest Period concerned
divided by 360 or, if this Global Note is denominated in Sterling, by 365 and rounding
the resulting figure to the nearest amount of the above-mentioned Specified Currency
which is available as legal tender in the country or countries (in the case of the
euro) of the Specified Currency (with halves being rounded upwards). The determination
of the Rate of Interest and the Amount of Interest by the Calculation Agent named above
shall (in the absence of manifest error) be final and binding upon all parties;
	 
	 	(d)	 	the period beginning on (and including) the Issue Date and ending on (but
excluding) the first Interest Payment Date and each successive period beginning on (and
including) an Interest Payment Date and ending on (but excluding) the next succeeding
Interest Payment Date is called an “Interest Period” for the purposes of this
paragraph; and

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	 	(e)	 	the Issuer will procure that a notice specifying the Rate of Interest payable
in respect of each Interest Period be published as soon as practicable after the
determination of the Rate of Interest. Such notice will be delivered to the clearing
system(s) in which this Global Note is held at the relevant time or, if this Global
Note has been exchanged for bearer definitive Notes pursuant to paragraph 7, will be
published in a leading English language daily newspaper published in London (which is
expected to be the Financial Times).

	12.	 	If the proceeds of this Global Note are accepted in the United Kingdom, the Principal
Amount or Minimum Redemption Amount (as applicable) shall be not less than £100,000 (or the
equivalent in any other currency).
	 
	13.	 	Instructions for payment must be received at the offices of the Paying Agent referred
to above together with this Global Note as follows:

	 	(a)	 	if this Global Note is denominated in Australian dollars, New Zealand dollars,
Hong Kong dollars or Japanese Yen, at least two Business Days prior to the relevant
payment date;
	 
	 	(b)	 	if this Global Note is denominated in United States dollars, Canadian dollars
or Sterling, on or prior to the relevant payment date; and
	 
	 	(c)	 	in all other cases, at least one Business Day prior to the relevant payment
date.

As used in this paragraph, “Business Day” means:

	 	(i)	 	a day other than a Saturday or Sunday on which commercial banks are open
for general business (including dealings in foreign exchange and foreign currency
deposits) in London; and
	 
	 	(ii)	 	in the case of payments in euro, a TARGET Business Day and, in all other
cases, a day on which commercial banks are open for general business (including
dealings in foreign exchange and foreign currency deposits) in the principal
financial centre in the country of the above-mentioned Specified Currency.

	14.	 	This Global Note shall not be validly issued unless manually authenticated by HSBC
Bank plc as issue agent.
	 
	15.	 	This Global Note and all matters arising from or connected with it are governed by,
and shall be construed in accordance with, English law.
	 
	 	 	The English courts have exclusive jurisdiction to settle any dispute arising out of or in
connection with this Global Note (including a dispute regarding the existence, validity or
termination of this Global Note). The parties to this Global Note agree that the English
courts are the most appropriate and convenient courts to settle any such dispute and
accordingly no such party will argue to the contrary.
	 
	 	 	The Issuer irrevocably appoints Kellogg Marketing & Sales Co. (UK) Limited at its registered
office for the time being as its agent for service of process in any proceedings before the
English courts in connection with this Global Note. If any

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	 	 	person appointed as process agent is unable for any reason to act as agent for service of
process, the Issuer will appoint another agent, and failing such appointment within 15 days,
the bearer shall be entitled to appoint such a person by written notice addressed to the
Issuer and delivered to the Issuer or to the Specified Office of the Paying Agent. The
Issuer agrees that failure by a process agent to notify it of any process will not
invalidate the relevant proceedings. This paragraph 15 does not affect any other method of
service allowed by law.
	 
	 	 	The Issuer irrevocably and unconditionally, agrees not to claim any immunity from
proceedings brought by the bearer against it in relation to this Global Note and to ensure
that no such claim is made on its behalf, consents generally to the giving of any relief or
the issue of any process in connection with those proceedings, and waives all rights of
immunity in respect of it or its assets.
	 
	 	 	EACH PARTY WAIVES ANY RIGHT IT MAY HAVE TO A JURY TRAIL OF ANY CLAIM OR CAUSE OF ACTION IN
CONNECTION WITH THIS GLOBAL NOTE OR ANY TRANSACTION CONTEMPLATED BY THIS GLOBAL NOTE. THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO TRIAL BY COURT.

	16.	 	No person shall have any right to enforce any provision of this Note under the
Contracts (Rights of Third Parties) Act 1999 but this does not affect any right or remedy of
any person which exists or is available apart from that Act.

	 	 	 	 	 	 	 	 	 	 	 
	AUTHENTICATED by	 	 	 	Signed on behalf of:	 	 
	HSBC BANK PLC	 	 	 	KELLOGG COMPANY	 	 
	without recourse, warranty or liability
and for authentication purposes only	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

(Authorised Signatory)
	 	 	 	 	 	 

(Authorised Signatory)
	 	 

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SCHEDULE

Payments of Interest

The following payments of interest in respect of this Global Note have been made:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Notation
	 	 	 	 	 	 	 	 	on behalf
	Date	 	Payment	 	Payment	 	Amount	 	of Paying
	Made	 	From	 	To	 	Paid	 	Agent
	—

	 	—
	 	—
	 	—
	 	—
	 
	 	 	 	 	 	 	 	 
	—

	 	—
	 	—
	 	—
	 	—
	 
	 	 	 	 	 	 	 	 
	—

	 	—
	 	—
	 	—
	 	—
	 
	 	 	 	 	 	 	 	 
	—

	 	—
	 	—
	 	—
	 	—
	 
	 	 	 	 	 	 	 	 
	—

	 	—
	 	—
	 	—
	 	—

-9-

 

Pro-forma Redemption or Interest Calculation

(Index linked Global Note)

This is the Redemption or Interest Calculation relating to the attached index-linked Global Note:

Calculation Date:                                         

Calculation Agent:                                         

	 	 	 
	Redemption Amount (per note):

	 	to be calculated by the Calculation Agent as follows:
	 
	 	 
	 

	 	[Insert particulars of index and redemption calculation]
	 
	 	 
	 

	 	[Indicate whether the calculation refers to principal or
coupon]

Confirmed:

	 	 	 
	 

For KELLOGG COMPANY

	 	 

	 	 	 
	Note:

	 	The Calculation Agent is required to notify the Principal Paying Agent for the Notes of the
Redemption Amount immediately upon completing its calculation of the same.

- 10 -exv10w25

 

EXHIBIT 10.25

KELLOGG COMPANY 2003 LONG-TERM INCENTIVE PLAN

(amended and restated as of December 8, 2006)

     1. Purpose. The purpose of the 2003 Long-Term Incentive Plan, as amended and restated in its
entirety as of December 8, 2006, is to further and promote the interests of Kellogg Company, its
Subsidiaries and its share owners by enabling the Company and its Subsidiaries to attract, retain
and motivate employees and officers or those who will become employees or officers, and to align
the interests of those individuals and the Company’s share owners. To do this, the Plan offers
performance-based incentive awards and equity-based opportunities providing such employees and
officers with a proprietary interest in maximizing the growth, profitability and overall success of
the Company and its Subsidiaries.

     2. Definitions. Unless the context clearly indicates otherwise, for purposes of the Plan, the
following terms shall have the following meanings:

     2.1 “Award” means an award or grant made to a Participant under Sections 6, 7, 8 and/or 9 of
the Plan.

     2.2 “Award Agreement” means the agreement executed by a Participant pursuant to Sections 3.2
and 16.7 of the Plan in connection with the granting of an Award.

     2.3 “Board” means the Board of Directors of Kellogg Company, as constituted from time to
time.

     2.4 “Code” means the Internal Revenue Code of 1986, as in effect and as amended from time to
time, or any successor statute thereto, together with any rules, regulations and interpretations
promulgated thereunder or with respect thereto.

     2.5 “Committee” means the committee of the Board designated to administer the Plan, as
described in Section 3 of the Plan.

     2.6 “Common Stock” means the Common Stock, par value $0.25 per share, of the Company or any
security of the Company issued by the Company in substitution or exchange therefor.

     2.7 “Company” means Kellogg Company, a Delaware corporation, or any successor corporation to
Kellogg Company.

     2.8 “Disability” means disability as defined in the Participant’s then effective employment
agreement, or if the Participant is not then a party to an effective employment agreement with
the Company which defines disability, “Disability” means disability as determined by the
Committee in accordance with standards and procedures similar to those under the Company’s
long-term disability plan, if any. Subject to the first sentence of this Section 2.8, at any time
that the Company does not maintain a long-term disability plan, “Disability” shall mean any
physical or mental disability which is determined to be total and permanent by a physician
selected in good faith by the Company.

     2.9 “Exchange Act” means the Securities Exchange Act of 1934, as in effect and as amended
from time to time, or any successor statute thereto, together with any rules, regulations and
interpretations promulgated thereunder or with respect thereto.

     2.10 “Fair Market Value” of a share of Common Stock means, with respect to any date, the
officially quoted closing price of the Common Stock on the New York Stock Exchange—Composite
Transactions Tape on such date, provided that if there shall be no sales of shares reported on
such date, the Fair Market Value of a share of Common Stock on such date shall be deemed to be
the officially quoted closing price of the Common Stock on such Composite Tape for the last
preceding date on which sales of shares were reported.

 

 

     2.11 “Incentive Stock Option” means any stock option granted pursuant to the provisions of
Section 6 of the Plan (and the relevant Award Agreement) that is intended to be (and is
specifically designated as) an “incentive stock option” within the meaning of Section 422 of the
Code.

     2.12 “Non-Qualified Stock Option” means any stock option granted pursuant to the provisions
of Section 6 of the Plan (and the relevant Award Agreement) that is not an Incentive Stock
Option.

     2.13 “Participant” means any individual who is selected from time to time under Section 5 to
receive an Award under the Plan.

     2.14 “Performance Units” means the units granted under Section 9 of the Plan and the
relevant Award Agreement.

     2.15. “Performance Share Units” means units granted under Section 9 of the Plan and the
relevant Award Agreement.

     2.16 “Plan” means this Kellogg Company 2003 Long-Term Incentive Plan, as set forth herein
and as in effect and as amended from time to time (together with any rules and regulations
promulgated by the Committee with respect thereto).

     2.17 “Restricted Shares” means an Award of restricted shares of Common Stock granted
pursuant to the provisions of Section 8 of the Plan and the relevant Award Agreement.

     2.18 “Restricted Share Units” means an Award granted pursuant to the provisions of Section
8 of the Plan and the relevant Award Agreement.

     2.19 “Retirement” means the voluntary retirement by the Participant from active employment
with the Company and its Subsidiaries on or after the attainment of normal retirement age under
Company-sponsored pension or retirement plans, or any other age with the consent of the Board.

     2.20 “Stock Appreciation Right” means an Award described in Section 7.2 of the Plan and
granted pursuant to the provisions of Section 7 of the Plan.

     2.21 “Subsidiary(ies)” means any corporation (other than the Company) in an unbroken chain
of corporations, including and beginning with the Company, if each of such corporations, other
than the last corporation in the unbroken chain, owns, directly or indirectly, more than fifty
percent (50%) of the voting stock in one of the other corporations in such chain.

     3. Administration.

     3.1 The Committee. The Plan shall be administered by the Compensation Committee of the
Board, as constituted from time to time.

     3.2 Plan Administration and Plan Rules. The Committee is authorized to construe and
interpret the Plan and to promulgate, amend and rescind rules and regulations relating to the
implementation, administration and maintenance of the Plan. Subject to the terms and conditions
of the Plan, the Committee shall make all determinations necessary or advisable for the
implementation, administration and maintenance of the Plan including, without limitation, (a)
selecting the Plan’s Participants, (b) making Awards in such amounts and form as the Committee
shall determine, (c) imposing such restrictions, terms and conditions upon such Awards as the
Committee shall deem appropriate, and (d) correcting any technical defect(s) or technical
omission(s), or reconciling any technical inconsistency(ies), in the Plan and/or any Award
Agreement. The Committee may designate persons other than members of the Committee to carry out
the day-to-day ministerial administration of the Plan under such conditions and limitations as it
may prescribe, except that the Committee shall not delegate its authority with regard to the
selection for participation in the Plan and/or the granting of any Awards to Participants who are
subject to Section 16 of the Exchange Act. The Committee may, in its sole discretion, delegate
its authority to one or more senior executive officers for the purpose of making

 

 

Awards to Participants who are not subject to Section 16 of the Exchange Act. The
Committee’s determinations under the Plan need not be uniform and may be made selectively among
Participants, whether or not such Participants are similarly situated. Any determination,
decision or action of the Committee in connection with the construction, interpretation,
administration, implementation or maintenance of the Plan shall be final, conclusive and binding
upon all Participants and any person(s) claiming under or through any Participants. The Company
shall effect the granting of Awards under the Plan, in accordance with the determinations made by
the Committee, by execution of written agreements and/or other instruments in such form as is
approved by the Committee.

     3.3 Liability Limitation. Neither the Board, the Committee, nor any delegatee described in
Section 3.2 above, nor any member of either, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in connection with the Plan (or
any Award Agreement), and the members of the Board and the Committee shall be entitled to
indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense
(including, without limitation, attorneys’ fees) arising or resulting therefrom to the fullest
extent permitted by law and/or under any directors and officers liability insurance coverage
which may be in effect from time to time.

     4. Term of Plan/Common Stock Subject to Plan.

     4.1 Term of Incentive Stock Options. Incentive Stock Options may not be granted following
February 21, 2013, which is the ten-year anniversary of the Board’s adoption of the 2003
Long-Term Incentive Plan.

     4.2 Common Stock. The maximum number of shares of Common Stock in respect of which Awards
may be granted or paid out under the Plan, subject to adjustment as provided in this Section,
Section 4.3 and Section 13.2 of the Plan, shall not exceed the total of (a) 25 million shares;
plus (b) the total number of shares of Common Stock with respect to which no Awards have been
granted under the Kellogg Company 2001 Long-Term Incentive Plan (the “2001 Plan”) on the
Effective Date; plus (c) the total number of shares of Common Stock as to which Awards granted
under the 2001 Plan terminate or expire without being fully exercised or used. In addition, in
the event of a change in the Common Stock of the Company that is limited to a change in the
designation thereof to “Capital Stock” or other similar designation, or to a change in the par
value thereof, or from par value to no par value, without increase or decrease in the number of
issued shares, the shares resulting from any such change shall be deemed to be the Common Stock
for purposes of the Plan. Common Stock which may be issued under the Plan may be either
authorized and unissued shares or issued shares which have been reacquired by the Company (in the
open-market or in private transactions) and which are being held as treasury shares. No
fractional shares of Common Stock shall be issued under the Plan.

     4.3 Computation of Available Shares. For the purpose of computing the total number of shares
of Common Stock available for Awards under the Plan, there shall be counted against the
limitations set forth in Section 4.2 of the Plan (subject to the remainder of this Section and
Section 13.2) the maximum number of shares of Common Stock issued upon exercise or settlement of
Awards granted under Sections 6 and 7 of the Plan, the number of shares of Common Stock issued
under grants of Restricted Shares pursuant to Section 8 of the Plan and the maximum number of shares of Common Stock issued or issuable under grants or payments of Performance Units pursuant
to Section 9 of the Plan, in each case determined as of the date on which such Awards are
granted, or issued, as applicable. If any Awards expire unexercised or are forfeited,
surrendered, cancelled, terminated or settled in cash in lieu of Common Stock, the shares of
Common Stock which were theretofore subject (or potentially subject) to such Awards shall again
be available for Awards under the Plan to the extent of such expiration, forfeiture, surrender,
cancellation, termination or settlement of such Awards. In addition, any shares of Common Stock
exchanged or otherwise used by a Participant as full or partial payment for an Award (including
any shares withheld or deducted for tax withholding purposes), shall be added to the shares
available for Awards under the Plan.

     5. Eligibility. Individuals eligible for Awards under the Plan shall consist of employees and
officers, or those who will become employees or officers, of the Company and/or its Subsidiaries
whose performance or contribution, in the sole discretion of the Committee, benefits or will
benefit the Company or any Subsidiary.

     6. Stock Options.

     6.1 Terms and Conditions. Stock options granted under the Plan shall be in respect of Common
Stock and may be in the form of Incentive Stock Options or Non-Qualified Stock Options (sometimes
referred to collectively herein as

 

 

the “Stock Option(s))”. Such Stock Options shall be subject to
the terms and conditions set forth in this Section 6 and any additional terms and conditions, not
inconsistent with the express terms and provisions of the Plan, as the Committee shall set forth
in the relevant Award Agreement.

     6.2 Grant. Stock Options may be granted under the Plan in such form as the Committee may
from time to time approve. Stock Options may be granted alone or in addition to other Awards
under the Plan or in tandem with Stock Appreciation Rights. Special provisions shall apply to
Incentive Stock Options granted to any employee who owns (within the meaning of Section 422(b)(6)
of the Code) more than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or its parent corporation or any Subsidiary of the Company, within the
meaning of Sections 424(e) and (f) of the Code (a “10% Share Owner”).

     6.3 Exercise Price. The exercise price per share of Common Stock subject to a Stock Option
shall be determined by the Committee; provided, however, that the exercise price of a Stock
Option shall not be less than one hundred percent (100%) of the Fair Market Value of the Common
Stock on the grant date of such a Stock Option; provided, further, however, that, in the case of
a 10% Share Owner, the exercise price of an Incentive Stock Option shall not be less than one
hundred ten percent (110%) of the Fair Market Value of the Common Stock on the grant date.

     6.4 Term. The term of each Stock Option shall be such period of time as is fixed by the
Committee; provided, however, that the term of any Stock Option shall not exceed ten (10) years
(five (5) years, in the case of a 10% Share Owner receiving an Incentive Stock Option) after the
date immediately preceding the date on which the Stock Option is granted.

     6.5 Method of Exercise. A Stock Option may be exercised, in whole or in part, by giving
written notice of exercise to the Secretary of the Company, or the Secretary’s designee,
specifying the number of shares to be purchased. Such notice shall be accompanied by payment in
full of the exercise price in cash, by certified check, bank draft, electronic transfer, or money
order payable to the order of the Company, if permitted by the Committee in its sole discretion,
by surrendering (or attesting to the ownership of) shares of Common Stock already owned by the
Participant for at least six (6) months (if acquired in a transaction with the Company), or, if
permitted by the Committee (in its sole discretion) and applicable law, by delivery of, alone or
in conjunction with a partial cash or instrument payment, some other form of payment acceptable
to the Committee. Payment instruments shall be received by the Company subject to collection. The
proceeds received by the Company upon exercise of any Stock Option may be used by the Company for
general corporate purposes. Any portion of a Stock Option that is exercised may not be exercised
again. The shares issued to an optionee for the portion of any Stock Option exercised by
attesting to the ownership of shares shall not exceed the number of shares issuable as a result
of such exercise (determined as though payment in full therefor were being made in cash) less the
number of shares for which attestation of ownership is submitted. The value of owned shares
submitted (directly or by attestation) in full or partial payment for the shares purchased upon
exercise of a Stock Option shall be equal to the aggregate Fair Market Value of such owned shares
on the date of the exercise of such Stock Option.

     6.6 Exercisability. Any Stock Option granted under the Plan shall become exercisable on such
date or dates as determined by the Committee (in its sole discretion) at any time and from time
to time in respect of such Stock Option and set forth in the Award Agreement. Notwithstanding
anything to the contrary contained in this Section 6.6, such Stock Option shall become one
hundred percent (100%) exercisable as to the aggregate number of shares of Common Stock
underlying such Stock Option upon the death, Disability or Retirement of the Participant.

     6.7 Tandem Grants. If Non-Qualified Stock Options and Stock Appreciation Rights are granted
in tandem, as designated in the relevant Award Agreements, the right of a Participant to exercise
any such tandem Stock Option shall terminate to the extent that the shares of Common Stock
subject to such Stock Option are used to calculate amounts or shares receivable upon the exercise
of the related tandem Stock Appreciation Right.

     6.8 Reload Provision. The Committee may provide in any Award Agreement that if the optionee
exercises a Stock Option using shares (either actually or by attestation) held for at least six
(6) months (if acquired in a transaction with the Company) and/or elects to have shares withheld
to satisfy the Company’s withholding obligations, the
optionee will then receive a new option covering the number of shares used to exercise
and/or satisfy withholding obligations. Such option will have a per share exercise price equal to
the then Fair Market Value of the shares, and will be subject to such terms and conditions as the
Committee, in its sole discretion, may determine. Nothing in this Section 6.8 will

 

 

restrict the
Committee’s ability to fix or limit in an Award Agreement the maximum number of shares available
under any new option granted pursuant to an Award Agreement.

     7. Stock Appreciation Rights.

     7.1 Terms and Conditions. The grant of Stock Appreciation Rights under the Plan shall be
subject to the terms and conditions set forth in this Section 7 and any additional terms and
conditions, not inconsistent with the express terms and provisions of the Plan, as the Committee
shall set forth in the relevant Award Agreement.

     7.2 Stock Appreciation Rights. A Stock Appreciation Right is an Award granted with respect
to a specified number of shares of Common Stock entitling a Participant to receive an amount
equal to the excess of the Fair Market Value of a share of Common Stock on the date of exercise
over the Fair Market Value of a share of Common Stock on the grant date of the Stock Appreciation
Right, multiplied by the number of shares of Common Stock with respect to which the Stock
Appreciation Right shall have been exercised.

     7.3 Grant. A Stock Appreciation Right may be granted in addition to any other Award under
the Plan or in tandem with or independent of a Non-Qualified Stock Option.

     7.4 Date of Exercisability. In respect of any Stock Appreciation Right granted under the
Plan, unless otherwise (a) determined by the Committee (in its sole discretion) at any time and
from time to time in respect of any such Stock Appreciation Right, or (b) provided in the Award
Agreement, a Stock Appreciation Right may be exercised by a Participant, in accordance with and
subject to all of the procedures established by the Committee, in whole or in part at any time
and from time to time during its specified term. Notwithstanding the preceding sentence, in no
event shall a Stock Appreciation Right be exercisable prior to the date which is six (6) months
after the date on which the Stock Appreciation Right was granted or prior to the exercisability
of any Non-Qualified Stock Option with which it is granted in tandem. The Committee may also
provide, as set forth in the relevant Award Agreement and without limitation, that some Stock
Appreciation Rights shall be automatically exercised and settled on one or more fixed dates
specified therein by the Committee.

     7.5 Form of Payment. Upon exercise of a Stock Appreciation Right, payment may be made in
cash, in Restricted Shares or in shares of unrestricted Common Stock, or in any combination
thereof, as the Committee, in its sole discretion, shall determine and provide in the relevant
Award Agreement.

     7.6 Tandem Grant. The right of a Participant to exercise a tandem Stock Appreciation Right
shall terminate to the extent such Participant exercises the Non-Qualified Stock Option to which
such Stock Appreciation Right is related.

     8. Restricted Shares and Restricted Share Units.

     8.1 Terms and Conditions. Grants of Restricted Shares and Restricted Share Units shall be
subject to the terms and conditions set forth in this Section 8 and any additional terms and
conditions, not inconsistent with the express terms and provisions of the Plan, as the Committee
shall set forth in the relevant Award Agreement. Restricted Shares and Restricted Share Units may
be granted alone or in addition to any other Awards under the Plan. Restricted Share Units shall
be similar to Restricted Shares, except that no shares will be actually granted on the date of
the Award. Subject to the terms of the Plan, the Committee shall determine the number of
Restricted Shares and Restricted Share Units to be granted to a Participant and the Committee may
provide or impose different terms and conditions on any particular Restricted Share or Restricted
Share Units grant made to any Participant. With respect to each Participant receiving an Award of
Restricted Shares, there shall be issued a stock certificate (or certificates) in respect of such
Restricted Shares. Such stock certificate(s) shall be registered in the name of such Participant,
shall be accompanied by a stock power duly executed by such Participant, and shall bear, among
other required legends, the following legend:

“The transferability of this certificate and the shares of stock represented hereby are
subject to the terms and conditions (including, without limitation, forfeiture events)
contained in the Kellogg Company 2003 Long-Term Incentive Plan and an Award Agreement entered
into between the registered owner hereof and Kellogg Company. Copies of such Plan and Award
Agreement are on file in the office of the Secretary of Kellogg Company, One Kellogg Square,
Battle Creek, MI 49016. Kellogg Company will furnish to the recordholder of the certificate,
without

 

 

charge and upon written request at its principal place of business, a copy of such
Plan and Award Agreement. Kellogg Company reserves the right to refuse to record the transfer
of this certificate until all such restrictions are satisfied, all such terms are complied
with and all such conditions are satisfied.”

Such stock certificate evidencing such shares shall, in the sole discretion of the Committee, be
deposited with and held in custody by the Company until the restrictions thereon shall have
lapsed and all of the terms and conditions applicable to such grant shall have been satisfied.

     8.2 Restricted Share Grants. A grant of Restricted Shares is an Award of shares of Common
Stock granted to a Participant, subject to such restrictions, terms and conditions as the
Committee deems appropriate, including, without limitation, (a) restrictions on the sale,
assignment, transfer, hypothecation or other disposition of such shares, (b) the requirement that
the Participant deposit such shares with the Company while such shares are subject to such
restrictions, and (c) the requirement that such shares be forfeited upon termination of
employment for specified reasons within a specified period of time or for other reasons
(including, without limitation, the failure to achieve designated performance goals). A grant of
Restricted Share Units shall contain similar restrictions, terms and conditions, to the extent
appropriate.

     8.3 Restriction Period. In accordance with Sections 8.1 and 8.2 of the Plan and unless
otherwise determined by the Committee (in its sole discretion) at any time and from time to time,
Restricted Shares and Restricted Share Units shall only become unrestricted and vested in the
Participant in accordance with such vesting schedule relating to such Restricted Shares and
Restricted Share Units, if any, as the Committee may establish in the relevant Award Agreement
(the “Restriction Period”). During the Restriction Period, such stock shall be and remain
unvested and a Participant may not sell, assign, transfer, pledge, encumber or otherwise dispose
of or hypothecate such Award. Upon satisfaction of the vesting schedule and any other applicable
restrictions, terms and conditions, the Participant shall be entitled to receive payment of the
Restricted Shares or a portion thereof, as the case may be, as provided in Section 8.4 of the
Plan. Restricted Share Units may be paid in cash, shares of Common Stock or any combination
thereof, as determined by the Committee.

     8.4 Payment of Restricted Share Grants. After the satisfaction and/or lapse of the
restrictions, terms and conditions established by the Committee in respect of a grant of
Restricted Shares and Restricted Share Units, a new or additional certificate, without the legend
set forth in Section 8.1 of the Plan, for the number of shares of Common Stock which are no
longer subject (or deemed subject) to such restrictions, terms and conditions shall, as soon as
practicable thereafter, be delivered to the Participant.

     8.5 Share Owner Rights. A Participant shall have, with respect to the shares of Common Stock
underlying a grant of Restricted Shares (but not under Restricted Share Units), all of the rights
of a share owner of such stock (except as such rights are limited or restricted under the Plan or
in the relevant Award Agreement). Any stock dividends paid in respect of unvested Restricted
Shares or unvested Restricted Share Units (if the Committee determines, in its discretion, to
award dividend equivalents on Restricted Share Units) shall be treated as additional Restricted
Shares or Restricted Share Units and shall be subject to the same restrictions and other terms
and conditions that apply to the unvested Restricted Shares or unvested Restricted Share Units in
respect of which such stock dividends are issued.

     9. Performance Units and Performance Share Units.

     9.1 Terms and Conditions. Performance Units and Performance Share Units shall be subject to
the terms and conditions set forth in this Section 9 and any additional terms and conditions, not
inconsistent with the express provisions of the Plan, as the Committee shall set forth in the
relevant Award Agreement.

     9.2 Performance Unit Grants. A Performance Unit is an Award of units (with each unit
representing such monetary amount or value as is designated by the Committee in the Award
Agreement) granted to a Participant,
subject to such terms and conditions as the Committee deems appropriate, including, without
limitation, the requirement that the Participant forfeit such units (or a portion thereof) in the
event certain performance criteria or other conditions are not met within a designated period of
time. A Performance Share Unit shall have an initial value equal to the Fair Market Value of a
share of Common Stock as of the date of grant.

 

 

     9.3 Grants. Performance Units and Performance Share Units may be granted alone or in
addition to any other Awards under the Plan. Subject to the terms of the Plan, the Committee
shall determine the number of Performance Units and Performance Share Units to be granted to a
Participant and the Committee may impose different terms and conditions on any particular
Performance Units and Performance Share Units granted to any Participant.

     9.4 Performance Goals and Performance Periods. Participants receiving a grant of Performance
Units and Performance Share Units shall only earn into and be entitled to payment in respect of
such Awards if the Company and/or the Participant achieves certain performance goals (the
“Performance Goals”) during and in respect of a designated performance period (the “Performance
Period”). The Performance Goals and the Performance Period shall be established by the Committee,
in its sole discretion. The Committee shall establish Performance Goals for each Performance
Period prior to, or as soon as practicable after, the commencement of such Performance Period.
The Committee shall also establish a schedule or schedules for Performance Units and Performance
Share Units setting forth the portion of the Award which will be earned or forfeited based on
the degree of achievement, or lack thereof, of the Performance Goals at the end of the relevant
Performance Period. In setting Performance Goals, the Committee may use, but shall not be limited
to, such measures as total share owner return, return on equity, net earnings growth, sales or
revenue growth, cash flow, comparisons to peer companies, individual or aggregate Participant
performance or such other measure or measures of performance as the Committee, in its sole
discretion, may deem appropriate. Such performance measures shall be defined as to their
respective components and meaning by the Committee (in its sole discretion). During any
Performance Period, the Committee shall have the authority to adjust the Performance Goals and/or
the Performance Period in such manner as the Committee, in its sole discretion, deems appropriate
at any time and from time to time. At the discretion of the Committee, Participants holding
Performance Share Units may be entitled to receive dividend equivalents with respect to the
dividends declared, subject to any restrictions determined by the Committee.

     9.5 Payment of Units. With respect to each Performance Unit and Performance Share Unit, the
Participant shall, if the applicable Performance Goals have been achieved, or partially achieved,
as determined by the Committee in its sole discretion, by the Company and/or the Participant
during the relevant Performance Period, be entitled to receive payment in an amount equal to the
designated value of each Performance Unit and Performance Share Unit times the number of such
units so earned. Payment in settlement of earned Performance Units and Performance Share Unit
shall be made as soon as practicable following the conclusion of the respective Performance
Period in cash, in unrestricted Common Stock, or in Restricted Shares, or in any combination
thereof, as the Committee in its sole discretion, shall determine and provide in the relevant
Award Agreement.

     10. Deferral Elections/Tax Reimbursements/Other Provisions.

     10.1 Deferrals. The Committee may permit or require a Participant to elect to defer receipt
of any payment of cash or any delivery of shares of Common Stock or other item that would
otherwise be due to such Participant by virtue of the exercise, earn out or settlement of any
Award made under the Plan. If any such election is permitted or required, the Committee shall
establish rules and procedures for such deferrals. The Committee may also provide in the relevant
Award Agreement for a tax reimbursement cash payment to be made by the Company in favor of any
Participant in connection with the tax consequences resulting from the grant, exercise,
settlement, or earn out of any Award made under the Plan.

     10.2 Performance-Based Awards. Performance Units, Restricted Shares, and other Awards
subject to performance criteria that are intended to be “qualified performance-based
compensation” within the meaning of Section 162(m) of the Code shall be paid solely on account of
the attainment of one or more pre-established, objective performance goals within the meaning of
Section 162(m) and the regulations thereunder. Until otherwise determined by the Committee, the
performance goals shall be the attainment of pre-established levels of (or pre-established
changes or improvements in) any of net sales, net income, market price per share, earnings per
share, return on equity, return on capital employed, return on invested capital, cash flow,
discounted cash flow, cumulative
cash flow, operating profit, gross or pre-tax profits, post-tax profits, gross or net
margins, consolidated net income, unit sales volume, economic value added, costs, production,
unit production volume, improvements in financial ratings, regulatory compliance, achievement of
balance sheet or income statement objectives, market or category share, total return to share
owners (including both the market value of the Company’s stock and dividends thereon) and the
extent to which strategic and business goals are met. The payout of any such Award to a Covered
Employee may be reduced, but not increased, based on the degree of attainment of other
performance criteria or otherwise at the

 

 

discretion of the Committee. For purposes of the Plan,
“Covered Employee” has the same meaning as set forth in Section 162(m) of the Code.

     10.3 Maximum Yearly Awards. The maximum annual Common Stock amounts in this Section 10.3 are
subject to adjustment under Section 13.2 and are subject to the Plan maximum under Sections 4.2
and 4.3.

     10.3.1 Performance-Based Awards. The maximum amount payable in respect of Performance Units,
performance-based Restricted Shares and other Awards in any calendar year may not exceed
1,000,000 shares of Common Stock (or the then equivalent Fair Market Value thereof) in the case
of any individual Participant. Further, the aggregate number of Performance Units,
performance-based Restricted Shares and other Awards (excluding Awards granted under Section 6
and Section 7) granted to Participants under this Plan shall not exceed 5,000,000 shares of
Common Stock.

     10.3.2 Stock Options and SARs. Each individual Participant may not receive in any calendar
year Awards of Options or Stock Appreciation Rights exceeding 2,000,000 underlying shares of
Common Stock.

     11. Dividend Equivalents. In addition to the provisions of Section 8.5 of the Plan, Awards of
Stock Options, and/or Stock Appreciation Rights, may, in the sole discretion of the Committee and
if provided for in the relevant Award Agreement, earn dividend equivalents. In respect of any such
Award which is outstanding on a dividend record date for Common Stock, the Participant shall be
credited with an amount equal to the amount of cash or stock dividends that would have been paid on
the shares of Common Stock covered by such Award had such covered shares been issued and
outstanding on such dividend record date. The Committee shall establish such rules and procedures
governing the crediting of such dividend equivalents, including, without limitation, the amount,
the timing, form of payment and payment contingencies and/or restrictions of such dividend
equivalents, as it deems appropriate or necessary.

     12. Non-transferability of Awards. Unless otherwise provided in the Award Agreement, no Award
under the Plan or any Award Agreement, and no rights or interests herein or therein, shall or may
be assigned, transferred, sold, exchanged, encumbered, pledged, or otherwise hypothecated or
disposed of by a Participant or any beneficiary(ies) of any Participant, except by testamentary
disposition by the Participant or the laws of intestate succession. No such interest shall be
subject to execution, attachment or similar legal process, including, without limitation, seizure
for the payment of the Participant’s debts, judgments, alimony, or separate maintenance. Unless
otherwise provided in the Award Agreement, during the lifetime of a Participant, Stock Options and
Stock Appreciation Rights are exercisable only by the Participant.

     13. Changes in Capitalization and Other Matters.

     13.1 No Corporate Action Restriction. The existence of the Plan, any Award Agreement and/or
the Awards granted hereunder shall not limit, affect or restrict in any way the right or power of
the Board or the share owners of the Company to make or authorize (a) any adjustment,
recapitalization, reorganization or other change in the Company’s or any Subsidiary’s capital
structure or its business, (b) any merger, consolidation or change in the ownership of the
Company or any Subsidiary, (c) any issue of bonds, debentures, capital, preferred or prior
preference stocks ahead of or affecting the Company’s or any Subsidiary’s capital stock or the
rights thereof, (d) any dissolution or liquidation of the Company or any Subsidiary, (e) any sale
or transfer of all or any part of the Company’s or any Subsidiary’s assets or business, or (f)
any other corporate act or proceeding by the Company or any Subsidiary. No Participant,
beneficiary or any other person shall have any claim against any member of the Board or the
Committee, the Company or any Subsidiary, or any employees, officers, share owners or agents of
the Company or any Subsidiary, as a result of any such action.

     13.2 Recapitalization Adjustments. In the event of a dividend or other distribution (whether
in the form of cash, Common Stock, other securities, or other property), recapitalization, stock
split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, Change of Control or exchange of Common Stock or other securities of the
Company, or other corporate transaction or event affects the Common Stock such that an adjustment
is necessary or appropriate in order to prevent dilution or enlargement of benefits or potential
benefits intended to be made available under the Plan, the Board shall equitably adjust (i) the
number of shares of Common Stock or other securities of the Company (or number and kind of other
securities or property) with respect to which Awards may be granted, (ii) the maximum limitation
upon Options, Performance Units and performance-based

 

 

Restricted Shares that may be granted to
any individual participant, (iii) the number of shares of Common Stock or other securities of the
Company (or number and kind of other securities or property) subject to outstanding Awards, and
(iv) the exercise price with respect to any Stock Option, or make provision for an immediate cash
payment to the holder of an outstanding Award in consideration for the cancellation of such
Award.

     13.3 Mergers. If the Company enters into or is involved in any merger, reorganization,
Change of Control or other business combination with any person or entity (a “Merger Event”), the
Board may, prior to such Merger Event and effective upon such Merger Event, take such action as
it deems appropriate, including, but not limited to, replacing such Stock Options with substitute
stock options and/or stock appreciation rights in respect of the shares, other securities or
other property of the surviving corporation or any affiliate of the surviving corporation on such
terms and conditions, as to the number of shares, pricing and otherwise, which shall
substantially preserve the value, rights and benefits of any affected Stock Options or Stock
Appreciation Rights granted hereunder as of the date of the consummation of the Merger Event.
Notwithstanding anything to the contrary in the Plan, if any Merger Event or Change of Control
occurs, the Company shall have the right, but not the obligation, to cancel each Participant’s
Stock Options and/or Stock Appreciation Rights and to pay to each affected Participant in
connection with the cancellation of such Participant’s Stock Options and/or Stock Appreciation
Rights, an amount equal to the excess of the Fair Market Value, as determined by the Board, of
the Common Stock underlying any unexercised Stock Options or Stock Appreciation Rights (whether
then exercisable or not) over the aggregate exercise price of such unexercised Stock Options
and/or Stock Appreciation Rights.

Upon receipt by any affected Participant of any such substitute stock options, stock appreciation
rights (or payment) as a result of any such Merger Event, such Participant’s affected Stock
Options and/or Stock Appreciation Rights for which such substitute options and/or stock
appreciation rights (or payment) were received shall be thereupon cancelled without the need for
obtaining the consent of any such affected Participant.

     14. Change of Control Provisions.

     14.1 Impact of Event. Notwithstanding any other provision of the Plan to the contrary, in
the event of a Change in Control:

	 	(i)	 	Any Stock Options and Stock Appreciation Rights outstanding as of the date such
Change in Control is determined to have occurred, and which are not then exercisable and
vested, shall become fully exercisable and vested;
	 
	 	(ii)	 	The restrictions and deferral limitations applicable to any Restricted Shares shall
lapse, and such Restricted Shares shall become free of all restrictions and become fully
vested and transferable;
	 
	 	(iii)	 	All Performance Units shall be considered to be earned and payable in full, and
any deferral or other restriction shall lapse and such Performance Units shall be settled
in cash (with the value being determined by the Committee, in its sole discretion) as
promptly as is practicable; and
	 
	 	(iv)	 	The Committee may also make additional adjustments and/or settlements of
outstanding Awards as it deems appropriate and consistent with the Plan’s purposes.

     14.2 Definition of Change in Control. For purposes of the Plan, a “Change in Control” shall
mean the happening of any of the following events:

	 	(i)	 	An acquisition after the date hereof by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of 20% or more of either (a) the then outstanding shares of common stock of the
Company (the “Outstanding Company Common Stock”) or (b) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); excluding, however,
the following: (1) any acquisition directly from the Company, other than an acquisition
by virtue of the exercise of a conversion privilege unless the security being so
converted was itself acquired directly from the Company or approved by the Incumbent
Board (as defined below), (2) any acquisition by the Company, (3) any acquisition by any
employee benefit plan (or 

 

 

	 	 	 	related trust) sponsored or maintained by the Company or any
entity controlled by the Company, (4) any acquisition by an underwriter temporarily
holding Company securities pursuant to an offering of such securities, or (5) any
acquisition pursuant to a transaction which complies with clauses (1), (2) and (3) of
subsection (iii) of this Section 14.2; or

	 	(ii)	 	A change in the composition of the Board such that the individuals who, as of the
effective date of the Plan, constitute the Board (such Board shall be hereinafter
referred to as the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board; provided, however, for purposes of this Section, that any
individual who becomes a member of the Board subsequent to the effective date of the
Plan, whose election, or nomination for election by the Company’s share owners, was
approved by a vote of at least a majority of those individuals who are members of the
Board and who were also members of the Incumbent Board (or deemed to be such pursuant to
this proviso), either by a specific vote or by approval of the proxy statement of the
Company in which such person is named as a nominee for director, without written
objection to such nomination shall be considered as though such individual were a member
of the Incumbent Board; but, provided further, that any such individual whose initial
assumption of office occurs as a result of either an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other than
the Board shall not be so considered as a member of the Incumbent Board; or
	 
	 	(iii)	 	Consummation of a reorganization, merger or consolidation (or similar
transaction), a sale or other disposition of all or substantially all of the assets of
the Company, or the acquisition of assets or stock of another entity (“Corporate
Transaction”); in each case, unless immediately following such Corporate Transaction (1)
all or substantially all of the individuals and entities who are the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Corporate Transaction will beneficially own,
directly or indirectly, more than 60% of, respectively, the outstanding shares of common
stock, and the combined voting power of the then outstanding voting securities entitled
to vote generally in the election of directors, as the case may be, of the corporation
resulting from such Corporate Transaction (including, without limitation, a corporation
which as a result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such Corporate Transaction,
of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the
case may be, (2) no Person (other than the Company, any employee benefit plan (or related
trust) of the Company or such corporation resulting from such Corporate Transaction) will
beneficially own, directly or indirectly, 20% or more of, respectively, the outstanding
shares of common stock of the corporation resulting from such Corporate Transaction or
the combined voting power of the outstanding voting securities of such corporation
entitled to vote generally in the election of directors, except to the extent that such
ownership existed prior to the Corporate Transaction, and (3) individuals who were
members of the Incumbent Board at the time of the Board’s approval of the execution of
the initial agreement providing for such Corporate Transaction will constitute at least a
majority of the members of the board of directors of the corporation resulting from such
Corporate Transaction; or
	 
	 	(iv)	 	The approval by the share owners of the Company of a complete liquidation or
dissolution of the Company.

     14.3 Change in Control or Other Cash-Out. Notwithstanding any other provision of the Plan,
during the 60-day period from and after a Change in Control (the “Exercise Period”), if the
Committee shall determine at the time of grant or thereafter, a Participant shall have the right,
whether or not the Option is fully exercisable in lieu of the payment of the option price for the
shares of Common Stock being purchased under the Option and by giving notice
to the Company, to elect (within the Exercise Period) to surrender all or part of the Option
to the Company and to receive cash, within 30 days of such election, in an amount equal to the
amount by which the Change in Control Price (as defined below) per share of Common Stock on the
date of such election shall exceed the exercise price per share of Common Stock under the Option
(the “Spread”) multiplied by the number of shares of Common Stock granted under the Option as to
which the right granted under this Section 14.3 shall have been exercised. In addition, the
Committee shall also have the authority to otherwise require that any option be surrendered by
the holder thereof for cancellation by the Company, with the holder to receive a cash payment
equal to the Spread.

 

 

     14.4 Change in Control Price. For purposes of the Plan, “Change in Control Price” means the
higher of (i) the highest reported sales price, regular way, of a share of Common Stock in any
transaction reported on the New York Stock Exchange Composite Tape or other national exchange on
which such shares are listed during the 60-day period prior to and including the date of a Change
in Control, or (ii) if the Change in Control is the result of a tender or exchange offer or a
Corporate Transaction, the highest price per share of Common Stock paid in such tender or
exchange offer or Corporate Transaction; provided, however, that in the case of Incentive Stock
Options and Stock Appreciation Rights relating to Incentive Stock Options, the Change in Control
Price shall be in all cases the Fair Market Value of the Common Stock on the date such Incentive
Stock Option or Stock Appreciation Right is exercised. To the extent that the consideration paid
in any such transaction described above consists all or in part of securities or other noncash
consideration, the value of such securities or other noncash consideration shall be determined in
the sole discretion of the Board.

     15. Amendment, Suspension, and Termination.

     15.1 In General. The Board may suspend or terminate the Plan (or any portion thereof) at any
time and may amend the Plan at any time and from time to time in such respects as the Board may
deem advisable to ensure that any and all Awards conform to or otherwise reflect any change in
applicable laws or regulations, or to permit the Company or the Participants to benefit from any
change in applicable laws or regulations, or in any other respect the Board may deem to be in the
best interests of the Company or any Subsidiary. No such amendment, suspension or termination
shall (a) subject to Section 16.6, materially adversely affect the rights of any Participant
under any outstanding Stock Options, Stock Appreciation Rights, Performance Units, or Restricted
Share grants, without the consent of such Participant, (b) make any change that would disqualify
the Plan, or any other plan of the Company or any Subsidiary intended to be so qualified, from
the benefits provided under Section 422 of the Code, or any successor provisions thereto, or (c)
except as contemplated by Section 13, revise the exercise price of any outstanding Stock Option
or increase the number of shares available for Awards pursuant to Section 4.2 without share owner
approval. In addition, the Company will obtain share owner approval of any modification of the
Plan or Awards to the extent required by applicable laws or regulations or the regulations of any
stock exchange upon which the Common Stock is then listed.

     15.2 Award Agreement Modifications. Subject to Section 15.1, the Committee may (in its sole
discretion) amend or modify at any time and from time to time the terms and provisions of any
outstanding Stock Options, Stock Appreciation Rights, Performance Units, or Restricted Share
grants, in any manner to the extent that the Committee under the Plan or any Award Agreement
could have initially determined the restrictions, terms and provisions of such Stock Options,
Stock Appreciation Rights, Performance Units, and/or Restricted Share grants, including, without
limitation, changing or accelerating (a) the date or dates as of which such Stock Options or
Stock Appreciation Rights shall become exercisable, (b) the date or dates as of which such
Restricted Share grants shall become vested, or (c) the performance period or goals in respect of
any Performance Units. Subject to Section 16.6, no such amendment or modification shall, however,
materially adversely affect the rights of any Participant under any such Award without the
consent of such Participant.

     16. Miscellaneous.

     16.1 Tax Withholding. The Company shall have the right to deduct from any payment or
settlement under the Plan, including, without limitation, the exercise of any Stock Option or
Stock Appreciation Right, or the delivery, transfer or vesting of any Common Stock or Restricted
Shares, any domestic or foreign federal, state, local or other taxes of any kind which the
Committee, in its sole discretion, deems necessary to be withheld to comply with the Code and/or
any other applicable law, rule or regulation. Shares of Common Stock may be used to satisfy any
such tax
withholding. Such Common Stock shall be valued based on the Fair Market Value of such stock
as of the date the tax withholding is required to be made, such date to be determined by the
Committee. In addition, the Company shall have the right to require payment from a Participant to
cover any applicable withholding or other employment taxes due upon any payment or settlement
under the Plan.

     16.2 No Right to Employment. Neither the adoption of the Plan, the granting of any Award,
nor the execution of any Award Agreement, shall confer upon any employee of the Company or any
Subsidiary any right to continued employment with the Company or any Subsidiary, as the case may
be, nor shall it interfere in any way with the right, if any, of the Company or any Subsidiary to
terminate the employment of any employee at any time for any reason.

 

 

     16.3 Unfunded Plan. The Plan shall be unfunded and the Company shall not be required to
segregate any assets in connection with any Awards under the Plan. Any liability of the Company
to any person with respect to any Award under the Plan or any Award Agreement shall be based
solely upon the contractual obligations that may be created as a result of the Plan or any such
Award Agreement. No such obligation of the Company shall be deemed to be secured by any pledge
of, encumbrance on, or other interest in, any property or asset of the Company or any Subsidiary.
Nothing contained in the Plan or any Award Agreement shall be construed as creating in respect of
any Participant (or beneficiary thereof or any other person) any equity or other interest of any
kind in any assets of the Company or any Subsidiary or creating a trust of any kind or a
fiduciary relationship of any kind between the Company, any Subsidiary and/or any such
Participant, any beneficiary thereof or any other person.

     16.4 Payments to a Trust. The Committee is authorized to cause to be established a trust
agreement or several trust agreements or similar arrangements from which the Committee may make
payments of amounts due or to become due to any Participants under the Plan.

     16.5 Other Company Benefit and Compensation Programs. Payments and other benefits received
by a Participant under an Award made pursuant to the Plan shall not be deemed a part of a
Participant’s compensation for purposes of the determination of benefits under any other employee
welfare or benefit plans or arrangements, if any, provided by the Company or any Subsidiary
unless expressly provided in such other plans or arrangements, or except where the Board
expressly determines in writing that inclusion of an Award or portion of an Award should be
included to accurately reflect competitive compensation practices or to recognize that an Award
has been made in lieu of a portion of competitive annual base salary or other cash compensation.
Awards under the Plan may be made in addition to, in combination with, or as alternatives to,
grants, awards or payments under any other plans or arrangements of the Company or its
Subsidiaries. The existence of the Plan notwithstanding, the Company or any Subsidiary may adopt
such other compensation plans or programs and additional compensation arrangements as it deems
necessary to attract, retain and motivate employees.

     16.6 Listing, Registration and Other Legal Compliance. No Awards or shares of the Common
Stock shall be required to be issued or granted under the Plan unless legal counsel for the
Company shall be satisfied that such issuance or grant will be in compliance with all applicable
securities laws and regulations and any other applicable laws or regulations. The Committee may
require, as a condition of any payment or share issuance, that certain agreements, undertakings,
representations, certificates, and/or information, as the Committee may deem necessary or
advisable, be executed or provided to the Company to assure compliance with all such applicable
laws or regulations. Certificates for shares of the Restricted Shares and/or Common Stock
delivered under the Plan may be subject to such stock-transfer orders and such other restrictions
as the Committee may deem advisable under the rules, regulations, or other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Common Stock is then
listed, and any applicable laws. In addition, if, at any time specified herein (or in any Award
Agreement or otherwise) for (a) the making of any Award, or the making of any determination, (b)
the issuance or other distribution of Restricted Shares and/or Common Stock, or (c) the payment
of amounts to or through a Participant with respect to any Award, any law, rule, regulation or
other requirement of any governmental authority or agency shall require either the Company, any
Subsidiary or any Participant (or any estate, designated beneficiary or other legal
representative thereof) to take any action in connection with any such determination, any such
shares to be issued or distributed, any such payment, or the making of any such determination, as
the case may be, shall be deferred until such required action is taken. With respect to persons
subject to Section 16 of the Exchange Act, transactions under the Plan are intended to comply
with all applicable conditions of Rule 16b-3 promulgated under the Exchange Act. In addition,
the Company or Committee may, at the time of grant or thereafter, impose additional or
different conditions or take other actions with respect to Awards made to Participants in
countries outside of the United States of America, to the extent required or made advisable by
applicable laws and regulations.

     16.7 Award Agreements. Each Participant receiving an Award under the Plan may enter into an
Award Agreement with the Company in a form specified by the Committee. Each such Participant
shall then agree to the restrictions, terms and conditions of the Award set forth therein and in
the Plan. An Award Agreement may provide that, notwithstanding any other provision in this Plan
to the contrary, if the Participant breaches provisions in the Award Agreement during or after
the Participant’s employment, then the Participant will forfeit and/or repay all Awards (whether
unvested or vested) and profits realized on the exercise of Stock Options.

 

     16.8 Designation of Beneficiary. Each Participant to whom an Award has been made under the
Plan may designate a beneficiary or beneficiaries to exercise any Stock Option or to receive any
payment which under the terms of the Plan and the relevant Award Agreement may become exercisable
or payable on or after the Participant’s death. At any time, and from time to time, any such
designation may be changed or cancelled by the Participant without the consent of any such
beneficiary. Any such designation, change or cancellation must be on a form provided for that
purpose by the Committee and shall not be effective until received by the Committee. If no
beneficiary has been designated by a deceased Participant, or if the designated beneficiaries
have predeceased the Participant, the beneficiary shall be the Participant’s estate. If the
Participant designates more than one beneficiary, any payments under the Plan to such
beneficiaries shall be made in equal shares unless the Participant has expressly designated
otherwise, in which case the payments shall be made in the shares designated by the Participant.

     16.9 Leaves of Absence/Transfers. The Committee shall have the power to promulgate rules and
regulations and to make determinations, as it deems appropriate, under the Plan in respect of any
leave of absence from the Company or any Subsidiary granted to a Participant. Without limiting
the generality of the foregoing, the Committee may determine whether any such leave of absence
shall be treated as if the Participant has terminated employment with the Company or any such
Subsidiary. If a Participant transfers within the Company, or to or from any Subsidiary, such
Participant shall not be deemed to have terminated employment as a result of such transfers.

     16.10 Governing Law. The Plan and all actions taken thereunder shall be governed by and
construed in accordance with the laws of the State of Delaware, without reference to the
principles of conflict of laws thereof. Any titles and headings herein are for reference purposes
only, and shall in no way limit, define or otherwise affect the meaning, construction or
interpretation of any provisions of the Plan.

     16.11 Effective Date. The Plan (as amended and restated) shall be effective as of December
8, 2006. No awards may be granted under the plan after February 21, 2013 (or such earlier date
that the Plan may be terminated by the Board), but the term and exercise of Awards granted
theretofore may extend beyond that date.

     As originally adopted by the Board on February 21, 2003, and amended and restated by the
Board, on December 8, 2006.

KELLOGG COMPANY

One Kellogg Square

Battle Creek, MI 49016-3599

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