Document:

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                                                                    EXHIBIT 10.6

[LEAR CORPORATION LOGO]

                                 March 15, 2005

Mr. Raymond E. Scott
5560 Clearview
Troy, MI 48098

Dear Ray:

      Lear Corporation (the "Company") considers it essential to its best
interest and the best interests of its stockholders to foster the continued
employment of key management personnel.

      The Board of Directors of the Company (the "Board") has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Company's management, including
yourself, to their assigned duties. The Board recognizes that, as is the case
with many publicly-held companies, the possibility of a Change in Control (as
that term is hereafter defined) exists. The Company wishes to assure itself of
both present and future continuity of management in the event of any Change in
Control. In order to induce you to remain in the employ of the Company, and in
consideration of your agreement to the termination of any existing employment
contract you may have with the Company or any predecessor, the Company agrees
that you shall receive, upon the terms and conditions set forth herein, the
compensation and benefits set forth in this letter agreement ("Agreement")
during the Term hereof.

      1. TERM OF AGREEMENT. This Agreement shall commence as of March 15, 2005
("Effective Date"). The initial term of this Agreement shall be two (2) years
from the Effective Date. The term of this Agreement shall at all times be two
(2) years, that is, the term of this Agreement shall be automatically extended
each day for an additional day such that this Agreement shall continually have
an unexpired term of two (2) years, until the date two (2) years after written
notice is provided by either the Company or the Executive that this Agreement is
not to be further extended (a "Notice of Non-Renewal"), the date set forth in a
Notice of Termination provided pursuant to Section 4, the date of the
Executive's death, or the date the Executive reaches his or her normal
retirement date under the Lear Corporation Pension Plan or its successor,
whichever shall first occur (the initial term as so extended is referred to
herein as the "Term").

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Mr. Raymond E. Scott
March 15, 2005
Page 2 of 18

      2. TERMS OF EMPLOYMENT. During the Term, you agree to be a full-time
employee of the Company serving initially in the position of President, European
Customer Focus Division of the Company. You agree to devote substantially all of
your working time and attention to the business and affairs of the Company, to
discharge the responsibilities associated with your position with the Company,
and to use your best efforts to perform faithfully and efficiently such
responsibilities. In addition, you agree to serve in such other or different
capacities or offices to which you may be assigned, appointed or elected from
time to time by the Company. Nothing herein shall prohibit you from devoting
your time to civic and community activities, serving as a member of the Board of
Directors of other corporations that do not compete with the Company, or
managing personal investments, as long as the foregoing do not interfere with
the performance of your duties hereunder or violate the terms of the Company's
Code of Business Ethics and Conduct, the Company's Corporate Governance
Guidelines, or other policies applicable to the Company's executives generally,
as those policies may be amended from time to time by the Company.

      3. COMPENSATION.

      (a) As compensation for your services, under this Agreement, you shall be
entitled during the Term to receive an initial base salary the annualized amount
of which shall be $435,000*, to be paid in accordance with existing payroll
practices for executives of the Company. Increases in your base salary, if any,
shall be as approved by the Compensation Committee of the Board. In addition,
you shall be eligible to receive an annual incentive compensation bonus
("Bonus") to be approved from time to time by the Compensation Committee of the
Board.

      (b) During the Term, you shall be eligible for participation in the
welfare, retirement, perquisite and fringe benefit, and other benefit plans,
practices, policies and programs, as may be in effect from time to time, for
senior executives of the Company generally.

      (c) During the Term, you shall be eligible for prompt reimbursement for
business expenses reasonably incurred by you in accordance with the Company's
policies, as may be in effect from time to time, for its senior executives
generally.

      4. TERMINATION OF EMPLOYMENT.

      (a) NOTICE. You or the Company may terminate the employment relationship
by giving a Notice of Non-Renewal, as described in Section 1. Alternatively, the
employment relationship may be terminated by the Company with or without Cause,
by the Company for Incapacity, or by you with or without Good Reason, all as
defined below, by giving a Notice of Termination. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon, if any, and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision so
indicated. All notices under this Section 4(a) shall be given in accordance with
the requirements of Section 9.

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* effective December 1, 2005.

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Mr. Raymond E. Scott
March 15, 2005
Page 3 of 18

      (b) INCAPACITY. If the Company reasonably determines that you are unable
at any time to perform the duties of your position because of a serious illness,
injury, impairment, or physical or mental condition and you are not eligible for
or have exhausted all leave to which you may be entitled under the Family and
Medical Leave Act ("FMLA") or, if more generous, other applicable state or local
law, the Company may terminate your employment for "Incapacity". In addition, at
any time that you are on a leave of absence, the Company may temporarily
reassign the duties of your position to one or more other executives without
creating a basis for your Good Reason resignation, provided that the Company
restores such duties to you upon your return to work.

      (c) CAUSE. Termination of your employment for "Cause" shall mean
termination upon:

      (i) an act of fraud, embezzlement or theft by you in connection with your
      duties or in the course of your employment with the Company;

      (ii) your material breach of any provision of this Agreement, provided
      that in those instances in which your material breach is capable of being
      cured, you have failed to cure within a thirty (30) day period after
      notice from the Company;

      (iii) an act or omission, which is (x) willful or grossly negligent, (y)
      contrary to established policies or practices of the Company, and (z)
      materially harmful to the business or reputation of the Company, or to the
      business of the Company's customers or suppliers as such relate to the
      Company; or

      (iv) a plea of nolo contendere to, or conviction for, a felony.

      (d) GOOD REASON. For purposes of this Agreement, "Good Reason" shall mean
the occurrence of any of the following circumstances or events:

      (i) any reduction by the Company in your base salary or adverse change in
      the manner of computing your Bonus, as in effect from time to time, except
      for across-the-board salary reductions or changes to the manner of
      computing bonuses similarly affecting all executive officers of the
      Company subject to Section 16(b) of the Securities Exchange Act of 1934,
      as determined by the Board ("executive officers");

      (ii) the failure by the Company to pay or provide to you any amounts of
      base salary or Bonus or any benefits which are due, owing and payable to
      you pursuant to the terms hereof, except pursuant to an across-the-board
      compensation deferral similarly affecting all executive officers, or to
      pay to you any portion of an installment of deferred compensation due
      under any deferred compensation program of the Company;

      (iii) except in the case of across-the-board reductions, deferrals,
      eliminations, or plan modifications similarly affecting all executive
      officers, the failure by the Company to continue to provide you with
      benefits substantially similar in the aggregate

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Mr. Raymond E. Scott
March 15, 2005
Page 4 of 18

      to the Company's life insurance, medical, dental, health, accident or
      disability plans in which you are participating at the date of this
      Agreement;

      (iv) without limiting the generality or effect of the foregoing, any
      material breach of this Agreement by the Company.

However, the language in Sections 4(d)(i) through (iii) concerning reductions,
changes, deferrals, eliminations, or plan modifications similarly affecting all
executive officers of the Company shall not be applicable to circumstances or
events occurring in anticipation of, or within one year after, a Change in
Control, as defined in Section 4(e). In addition, upon a Change in Control, you
shall have the right to resign for Good Reason if your principal place of
employment is transferred to a location fifty (50) or more miles from its
location immediately preceding the transfer.

Notwithstanding anything else herein, Good Reason shall not exist if, with
regard to the circumstances or events relied upon in your Notice of Termination:
(x) you failed to provide a Notice of Termination to the Company within sixty
(60) days of the date you knew or should have known of such circumstances or
events, (y) the circumstances or events are fully corrected by the Company prior
to the Date of Termination, or (z) you give your express written consent to the
circumstances or events.

      (e) CHANGE IN CONTROL. For purposes of this Agreement, a "Change in
Control" of the Company shall be deemed to have occurred as of the first day any
one or more of the following paragraphs is satisfied:

      (i) any Person as that term is used in Section 13(d)(3) or Section
      14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act")
      (other than the Company or a trustee or other fiduciary holding securities
      under an employee benefit plan of the Company, or a corporation owned
      directly or indirectly by the shareholders of the Company in substantially
      the same proportions as their ownership of stock of the Company) becomes
      the Beneficial Owner, as that term is defined in Rule 13d-3 of the General
      Rules and Regulations under the Exchange Act, directly or indirectly, of
      securities of the Company, representing more than twenty percent of the
      combined voting power of the Company's then outstanding securities.

      (ii) during any period of twenty-six consecutive months beginning on or
      after the Effective Date, individuals who at the beginning of the period
      constituted the Board cease for any reason (other than death, disability
      or voluntary retirement) to constitute a majority of the Board. For this
      purpose, any new Director whose election by the Board, or nomination for
      election by the Company's shareholders, was approved by a vote of at least
      two-thirds of the Directors then still in office, and who either were
      Directors at the beginning of the period or whose election or nomination
      for election was so approved, will be deemed to have been a Director at
      the beginning of any twenty-six month period under consideration.

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Mr. Raymond E. Scott
March 15, 2005
Page 5 of 18

      (iii) the shareholders of the Company approve: (A) a plan of complete
      liquidation or dissolution of the Company; or (B) an agreement for the
      sale or disposition of all or substantially all the Company's assets; or
      (C) a merger, consolidation or reorganization of the Company with or
      involving any other corporation, other than a merger, consolidation or
      reorganization that would result in the voting securities of the Company
      outstanding immediately prior thereto continuing to represent (either by
      remaining outstanding or by being converted into voting securities of the
      surviving entity) at least eighty percent of the combined voting power of
      the voting securities of the Company (or such surviving entity)
      outstanding immediately after such merger, consolidation, or
      reorganization.

      (f) DATE OF TERMINATION. "Date of Termination" shall mean

      (i) if your employment is terminated by reason of your death, the date of
      your death;

      (ii) if your employment is terminated by the Company for any reason other
      than because of your death, the date specified in the Notice of
      Termination (which shall not be prior to the date of the notice);

      (iii) if your employment is terminated by you for any reason, the Date of
      Termination shall be not less than thirty (30) nor more than sixty (60)
      days from the date such Notice of Termination is given, or such earlier
      date after the date such Notice of Termination is given as may be
      identified by the Company.

Unless the Company instructs you not to do so, you shall continue to perform
services as provided in this Agreement through the Date of Termination.

      (g) EMPLOYEE BENEFITS. A termination by the Company pursuant to Section
4(c) hereof or by you pursuant to Section 4(d) hereof shall not affect any
rights which you may have pursuant to any other agreement, policy, plan, program
or arrangement of the Company providing employee benefits, which rights shall be
governed by the terms thereof and by Section 5; provided, however, that if you
shall have received or shall be receiving benefits under Section 5(a), (c), or
(d) hereof and, if applicable, Section 6 hereof, you shall not be entitled to
receive benefits under any other policy, plan, program or arrangement of the
Company providing severance compensation to which you would otherwise be
entitled.

      5. COMPENSATION UPON TERMINATION. Upon your termination of employment, you
shall receive:

      (a) If your employment shall be terminated by the Company for Incapacity,
(i) for the period from the Date of Termination until the end of the calendar
year in which such termination occurs, you shall receive all compensation
payable to you under the Company's disability and medical plans and programs, as
in effect on the Date of Termination, plus an additional payment from the
Company (if necessary) such that the aggregate amount received by you from all
sources equals your base salary, at the rate in effect on the Date of
Termination, plus any Bonus and all

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Mr. Raymond E. Scott
March 15, 2005
Page 6 of 18

other amounts to which you would have been entitled under any compensation or
benefit plans of the Company had your employment continued until the end of the
calendar year, (ii) for the period from the end of the calendar year in which
such termination occurs until two (2) years from the Date of Termination (the
"Payment End Date"), you shall receive all compensation payable to you under the
Company's disability and medical plans and programs, as in effect on the Date of
Termination, plus an additional payment from the Company (if necessary) such
that the aggregate amount received by you from all sources equals your base
salary at the rate in effect on the Date of Termination, and (iii) for purposes
of outstanding awards and amounts owing or accrued as described in Section
5(d)(iii) of this Agreement, your employment shall be deemed to have been
terminated due to your Disability (as that term is defined in the plans,
programs, or arrangements described in Section 5(d)(iii) of this Agreement).
After the Payment End Date, your benefits shall be determined under the
Company's retirement, insurance and other compensation programs then in effect
in accordance with the terms of such programs. The additional payments by the
Company described in this Section 5(a) shall be conditioned upon the execution
by you or a representative with legal authority to act on your behalf of a
general release relating to your employment in form and substance reasonably
acceptable to the Company.

      (b) If your employment shall be terminated (i) by the Company for Cause or
by a Notice of Non-Renewal, or (ii) by you other than for Good Reason, the
Company shall pay you your base salary through the Date of Termination, at the
rate in effect at the time Notice of Termination is given, plus all other
amounts to which you are fully vested and irrevocably entitled under any
compensation or benefit plans of the Company as of the Date of Termination, and
the Company shall have no further obligations in any respect whatsoever for
payment of compensation or benefits to you under this Agreement. Provided,
however, that if your employment is terminated by you other than for Good
Reason, you shall be compensated under this Section 5(b) only to the extent that
you actively performed your assigned responsibilities through the Date of
Termination. In addition, you acknowledge that a termination of employment
described in this Section 5(b) shall not be considered an End of Service Date
for any and all outstanding stock options to which you are a party, except to
the extent it would otherwise qualify as a Retirement thereunder.

      (c) If your employment shall be terminated by reason of your death, the
Company shall pay your estate or designated beneficiary (as designated by you by
written notice to the Company, which designation shall remain in effect for the
remainder of the Term and any extensions thereof until revoked or a new
beneficiary is designated, in either case by written notice to the Company) your
base salary through the Date of Termination, plus a Bonus prorated for the
portion of the Bonus measurement period occurring prior to the date of your
death, plus all other amounts to which you are entitled under any compensation
or benefit plans of the Company at the date of your death, including, but not
limited to, all life insurance proceeds payable on your death to which your
estate or beneficiaries are otherwise entitled in accordance with the terms
thereof, and the Company shall have no further obligation to you, your
beneficiaries or your estate under this Agreement.

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Mr. Raymond E. Scott
March 15, 2005
Page 7 of 18

      (d) If your employment shall be terminated (a) by the Company, except for
a termination by the Company for Cause or Incapacity or by a Notice of
Non-Renewal (or due to your death), or (b) by you for Good Reason, then you
shall be entitled to the benefits provided below:

      (i) The Company shall pay you your full base salary through the Date of
      Termination at the rate in effect at the time Notice of Termination is
      given (or, if greater, at the rate in effect at any time within 90 days
      prior to the time Notice of Termination is given), plus all other amounts
      to which you are entitled under any compensation or benefit plans of the
      Company, including, without limitation, a Bonus prorated for the portion
      of the Bonus measurement period occurring prior to the Date of
      Termination, at the time such payments are due, except as otherwise
      provided below.

      (ii) Conditioned upon your execution of a general release relating to your
      employment in form and substance reasonably acceptable to the Company, the
      Company shall pay or cause to be paid to you, in lieu of any further
      payments to you for the portion of the Term subsequent to the Termination
      Date an amount (the "Severance Payment"), which shall be equal to the sum
      of:

         (A) the aggregate base salary (at the highest rate in effect at any
            time during the Term) which you would have received pursuant to this
            Agreement for the Severance Period had your employment with the
            Company continued for such period, and

         (B) the aggregate Bonus (based upon the highest annual Bonus that you
            received with respect to any calendar year during the two years
            immediately preceding the calendar year in which the Termination
            Date occurred, or, in the event that the Termination Date occurs
            prior to the first anniversary of the Effective Date, then based
            upon the highest annual Bonus that you received with respect to any
            calendar year during the three years immediately preceding the
            calendar year in which the Termination Date occurred) which you
            would have received pursuant to this Agreement for the Severance
            Period, had your employment with the Company continued for such
            period.

      The Severance Payment shall be paid over a period of one (1) year (the
      "Severance Period") in the following manner: an amount equal to fifty
      percent (50%) of the value of the Severance Payment, or, if the Severance
      Period is adjusted per Section 10(e), then an amount equal to twenty-five
      percent (25%) of the value of the Severance Payment, paid in a lump sum as
      soon as administratively practicable after your Termination Date; and an
      amount equal to the remaining fifty percent (50%) or seventy-five percent
      (75%), as applicable, paid in equal semi-monthly installments, without
      interest, beginning six (6) months after the Termination Date and
      continuing through the end of the Severance Period. Notwithstanding the
      foregoing, in the event that the Termination Date occurs prior to the
      first anniversary of the Effective Date, the Severance Period will be
      increased by one year.

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Mr. Raymond E. Scott
March 15, 2005
Page 8 of 18

      (iii) All outstanding awards, and all amounts owing or accrued, on the
      Date of Termination under the Lear Corporation Long-Term Stock Incentive
      Plan ("LTSIP"), the Lear Corporation Management Stock Purchase Plan
      ("MSPP"), the Lear Corporation Executive Supplemental Savings Plan
      ("ESSP") and the Lear Corporation Pension Equalization Program ("PEP"),
      and any other compensation or equity-based plan, program or arrangement of
      the Company in which you participated (including, following a Change in
      Control, any additional accruals provided thereunder due to a Change in
      Control) will be paid to you under the terms and conditions of such plans,
      programs and arrangements (and the award agreements and other documents
      thereunder), as modified by this Section 5(d)(iii). Your awards and
      amounts owing or accrued that vest based on the passage of time and/or
      continued service (and not based primarily upon the satisfaction of
      performance measures, as described below) will vest as scheduled during
      the Severance Period as if you had remained employed; to the extent such
      awards and amounts owing or accrued, other than those stock options held
      by you on the Effective Date, have not vested by the end of your Severance
      Period, they will become vested and nonforfeitable on a pro rata basis
      determined by multiplying the unvested awards and amounts by a fraction,
      the numerator of which is the number of full months that elapsed from the
      grant date to the end of your Severance Period, as adjusted by Section
      10(e), and the denominator of which is the number of full months in the
      total vesting period. Your vested stock options shall be exercisable (A)
      prior to a Change in Control, for thirteen months following your Date of
      Termination (but not later than the date on which the stock options would
      otherwise expire if you remained employed by the Company), and (B)
      following a Change in Control, throughout their entire term. In the case
      of those awards and amounts owing or accrued which would otherwise have
      become vested and nonforfeitable primarily upon the satisfaction of
      performance measures set forth in the relevant award agreement, plan,
      program or arrangement, you shall be paid in stock as soon as
      administratively feasible after the end of the relevant performance period
      (or such earlier period as the other participants in such award agreement,
      plan, program or arrangement are eligible to be paid out), a pro rata
      amount (if and to the extent all relevant performance objectives are
      actually achieved at target levels), based on a fraction, the numerator of
      which is the number of full months that elapsed from the grant date to
      your Date of Termination and the denominator of which is the number of
      full months in the relevant performance period.

      You and the Company acknowledge that references in this Section 5(d)(iii)
      to the PEP, the MSPP, the ESSP, and the LTSIP, shall be deemed to be
      references to such plans as amended or restated from time to time and to
      any similar plan of the Company that supplements or supersedes any such
      plans. In addition, you and the Company acknowledge that references in
      this Section 5 to any Section of the Code shall be deemed to be references
      to such Section as amended from time to time or to any successor thereto.

      (iv) The Company shall arrange to provide to you, your dependents, and
      beneficiaries, for the Severance Period, benefits provided under any
      "welfare benefit plan" of the Company (as the term "welfare benefit plan"
      is defined in Section 3(1) of the Employee

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Mr. Raymond E. Scott
March 15, 2005
Page 9 of 18

      Retirement Income Security Act of 1974, as amended) ("Welfare Benefits").
      If and to the extent that any such Welfare Benefits shall not or cannot be
      paid or provided under any policy, plan, program or arrangement of the
      Company (A) solely due to the fact that you are no longer an officer or
      employee of the Company or did not continue as an officer or employee of
      the Company during the remainder of the Term or (B) as a result of the
      amendment or termination of any plan providing for Welfare Benefits, the
      Company shall then itself pay or provide for the payment of such Welfare
      Benefits to you, your dependents and beneficiaries. Without otherwise
      limiting the purposes or effect of the no mitigation obligation in Section
      5(h) hereof, Welfare Benefits payable to you (including your dependents
      and beneficiaries) pursuant to this Section 5(d)(iv) shall be reduced to
      the extent comparable welfare benefits are actually received by you
      (including your dependents and beneficiaries) from another employer during
      such period, and any such benefits actually received by you shall be
      reported by you to the Company.

      (v) Your right to acquire any shares of the Company's capital stock under
      any and all outstanding stock options, or other rights previously granted
      to you under any equity-based plans of the Company shall be governed by
      the express terms of such plans and the applicable agreements thereunder,
      except as provided in Section 5(a), 5(b), or 5(d)(iii) of this Agreement.

      (e) Any Bonus that is payable to you with respect to a period that is less
than a full calendar year (a "partial calendar year") shall be prorated by
multiplying (i) the Bonus that would have been payable to you with respect to
the entire calendar year had your employment with the Company continued until
the end of such year by (ii) a fraction, the numerator of which equals the
number of days in the partial calendar year and the denominator of which equals
365.

      (f) Unless your Date of Termination occurs within one year after a Change
in Control, the Company, if permitted by law, may set-off or counterclaim
losses, fines or damages in respect of any claim, debt or obligation against any
payment to or benefit for you provided for in this Agreement.

      (g) Without limiting your rights at law or in equity, if the Company fails
to make any payment or provide any benefit required to be made or provided
hereunder within thirty (30) days of the date it is due, the Company will pay
interest on the amount or value thereof at an annualized rate of interest equal
to the "prime rate" as quoted from time to time during the relevant period in
The Wall Street Journal, plus three percent. Such interest will be payable as it
accrues on demand. Any change in such prime rate will be effective on and as of
the date of such change.

      (h) The Company acknowledges that its severance pay plans and policies
applicable in general to its salaried employees do not provide for mitigation,
offset or reduction of any severance payment received thereunder. Accordingly,
the parties hereto expressly agree that the payment of the severance
compensation by the Company to you in accordance with the terms of this
Agreement shall be liquidated damages and that you shall not be required to
mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise,

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Mr. Raymond E. Scott
March 15, 2005
Page 10 of 18

nor shall any profits, income, earnings or other benefits from any source
whatsoever create any mitigation, offset, reduction or any other obligation on
the part of you hereunder or otherwise, except as expressly provided in this
Section 5.

      6. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.

      (a) Anything in this Agreement to the contrary notwithstanding, in the
event that it shall be determined (as hereafter provided) that any payment (or
benefit provided) by the Company to or for your benefit, whether paid or payable
pursuant to the terms of this Agreement or otherwise (a "Payment"), would be
subject to the excise tax imposed by Section 4999 (or any successor thereto) of
the Code, and any interest or penalties with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereafter
collectively referred to as the "Excise Tax"), then you shall be entitled to
receive an additional payment or payments (collectively, a "Gross-Up Payment"),
including without limitation any Gross-Up Payment made with respect to the
Excise Tax, if any, attributable to (i) any incentive stock option, as defined
by Section 422 of the Code ("ISO"), or (ii) any stock appreciation or similar
right, whether or not limited, granted in tandem with any ISO. The Gross-Up
Payment shall be in an amount such that, after payment by you of the Excise Tax,
plus any additional taxes, penalties and interest, and any further Excise Taxes
imposed upon the Gross-Up Payment, you retain, after payment of all such taxes
and Excise Taxes, an amount of the Gross-Up Payment equal to the Payment that
you would have received if no Excise Taxes had been imposed upon the Payment and
no additional taxes, penalties, and interest or further Excise Taxes had been
imposed upon the Gross-Up Payment.

      (b) Subject to the provisions of Section 6(e) hereof, all determinations
required to be made under this Section 6, including whether an Excise Tax is
payable by you and the amount of such Excise Tax and whether a Gross-Up Payment
is required and the amount of such Gross-Up Payment, shall be made by a
nationally recognized firm of certified public accountants (the "Accounting
Firm") selected by you in your sole discretion, other than the Company's
independent auditing firm, to the extent prohibited by applicable Public Company
Accounting Oversight Board rules. You shall direct the Accounting Firm to submit
its determination and detailed supporting calculations to both the Company and
you within 30 calendar days after the Termination Date. If the Accounting Firm
determines that any Excise Tax is payable by you, the Company shall pay the
required Gross-Up Payment to you within five (5) business days after receipt of
the aforesaid determination and calculations. If the Accounting Firm determines
that no Excise Tax is payable by you, it shall, at the same time as it makes
such determination, furnish you with an opinion that you do not owe any Excise
Tax on your Federal income tax return. Any determination by the Accounting Firm
as to the amount of the Gross-Up Payment to be paid by the Company within such
30 calendar day period shall be binding upon the Company and you. As a result of
the uncertainty in the application of Section 4999 (or any successor thereto) of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Company should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 6(e) hereof and you thereafter are
required to make a payment of any Excise Tax, you shall direct the Accounting
Firm to determine the amount of the

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Mr. Raymond E. Scott
March 15, 2005
Page 11 of 18

Underpayment that has occurred and to submit its determination and detailed
supporting calculations to both the Company and you as promptly as possible. Any
such Underpayment shall be promptly paid by the Company to or for your benefit
within three calendar days after receipt of such determination and calculations.

      (c) The Company and you shall each cooperate with the Accounting Firm in
connection with the preparation and issuance of the determination provided for
in Section 6(b) hereof. Such cooperation shall include without limitation
providing the Accounting Firm access to and copies of any books, records and
documents in the possession of the Company or you, as the case may be, that are
reasonably requested by the Accounting Firm.

      (d) The fees and expenses of the Accounting Firm for its services in
connection with the determinations and calculations provided for in Section 6(b)
hereof shall initially be paid by you. The Company shall reimburse you for your
payment of such costs and expenses within five (5) business days after receipt
from you of a statement therefor and evidence of your payment thereof.

      (e) You shall notify the Company in writing, of any claim by the Internal
Revenue Service (the "IRS") that, if successful, would require the payment by
the Company of a Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than 10 business days after you receive notice of such
claim and shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. You shall not pay such claim prior to
the earlier of (x) the expiration of the 30 calendar day period following the
date on which you give such notice to the Company or (y) the date that any
payment of taxes with respect to such claim is due. If the Company notifies you
in writing prior to the expiration of such period that it desires to contest
such claim, you shall:

            (i) give the Company any information reasonably requested by the
      Company relating, to such claim;

            (ii) take such action in connection with contesting such claim as
      the Company shall reasonably request in writing, from time to time,
      including without limitation accepting legal representation with respect
      to such claim by an attorney reasonably selected by the Company;

            (iii) cooperate with the Company in good faith in order effectively
      to contest such claim; and

            (iv) permit the Company to participate in any proceedings relating
      to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold you harmless, on an after-tax
basis, for any Excise Tax or income tax, including interest and penalties with
respect thereto, imposed as a result of such representation and payment of costs
and

                                       11
<PAGE>

Mr. Raymond E. Scott
March 15, 2005
Page 12 of 18

expenses. Without limitation on the foregoing provisions of this Section 6(e),
the Company shall, provided that such control does not have a material adverse
affect on your individual income tax with respect to matters unrelated to the
contest of the Excise Tax, control all proceedings taken in connection with such
contest and, at its sole option, may, provided that such pursuit or foregoing
does not have a material adverse affect on your individual income tax with
respect to matters unrelated to the contest of the Excise Tax, pursue or forego
any and all administrative appeals, proceedings, hearings and conference with
the IRS in respect of such claim (but, you may participate therein at your own
cost and expense) and may, at its sole option, provided that such payment, suit,
contest or prosecution does not have a material adverse affect on your
individual income tax with respect to matters unrelated to the contest of the
Excise Tax, either direct you to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and you agree to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs you to pay the tax
claimed and sue for a refund, the Company shall advance the amount of such
payment to you on an interest-free basis and shall indemnify and hold you
harmless, on an after-tax basis, from any Excise Tax or income tax, including
interest or penalties with respect thereto, imposed with respect to such advance
or with respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to payment of
taxes for your taxable year with respect to which the contested amount is
claimed to be due is limited solely to such contested amount. Furthermore, the
Company's control of such contest shall be limited to issues with respect to
which a Gross Up Payment would be payable hereunder, and you shall be entitled
to settle or contest, as the case may be, any other issue raised by the IRS.

      (f) If, after the receipt by you of an amount advanced by the Company
pursuant to Section 6(e) hereof, you receive any refund with respect to such
claim, you shall (subject to the Company's complying with the requirements of
Section 6(e) hereof) promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after any taxes applicable
thereto). If, after the receipt by you of an amount advanced by the Company
pursuant to Section 6(e) hereof, a determination is made that you shall not be
entitled to any refund with respect to such claim and the Company does not
notify you in writing of its intent to contest such denial or refund prior to
the expiration of 30 calendar days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.

      7. TRAVEL. You shall be required to travel to the extent necessary for the
performance of your responsibilities under this Agreement.

      8. SUCCESSORS; BINDING AGREEMENT. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all the business and/or assets of the Company, to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place, and will assign its rights and obligations hereunder to such
successor. Failure of the Company to make such an assignment and to obtain

                                       12
<PAGE>

Mr. Raymond E. Scott
March 15, 2005
Page 13 of 18

such assumption and agreement prior to the effectiveness of any such succession,
unless you agree otherwise in writing with the Company or the successor, shall
entitle you to compensation from the Company in the same amount and on the same
terms as you would be entitled to hereunder if you terminate your employment for
Good Reason and the date on which any such succession becomes effective shall be
deemed your Date of Termination. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise. This Agreement shall inure to the benefit of and
be enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees and/or legatees. This Agreement
is personal in nature and neither of the parties hereto shall, without the
consent of the other, assign, transfer or delegate this Agreement or any rights
or obligations hereunder except as expressly provided in this Section 8. Without
limiting the generality of the foregoing, your right to receive payments
hereunder shall not be assignable or transferable, whether by pledge, creation
of a security interest or otherwise, other than by a transfer by your will or by
the laws of descent and distribution and, in the event of any attempted
assignment or transfer contrary to this Section 8, the Company shall have no
liability to pay to the purported assignee or transferee any amount so attempted
to be assigned or transferred. The Company and you recognize that each party
will have no adequate remedy at law for any material breach by the other of any
of the agreements contained herein and, in the event of any such breach, the
Company and you hereby agree and consent that the other shall be entitled to a
decree of specific performance, mandamus or other appropriate remedy to enforce
performance of this Agreement.

      9. NOTICES. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing, and shall be
deemed to have been duly given when delivered by hand, or mailed by United
States certified mail, return receipt requested, postage prepaid, or sent by
Federal Express or similar overnight courier service, addressed to the
respective addresses set forth on the first page of this Agreement, or sent by
facsimile with confirmation of receipt to the respective facsimile numbers set
forth on the first page of this Agreement, provided that all notices to the
Company shall be directed to the attention of the Secretary of the Company (or,
if you are the Secretary at the time such notice is to be given, to the Chairman
of the Company's Board of Directors), or to such other address or facsimile
number as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address or facsimile number shall be
effective only upon receipt.

      10. NONCOMPETITION.

      (a) Until the Date of Termination, you agree not to engage in any
Competitive Activity. For purposes of this Agreement, the term "Competitive
Activity" shall mean your participation as an employee or consultant, without
the written consent of the CEO or the Board or any authorized committee thereof,
in the management of any business enterprise anywhere in the world if such
enterprise engages in competition with any product or service of the Company
(including without limitation any enterprise that is a supplier to an original
equipment automotive vehicle manufacturer) or is planning to engage in such
competition. "Competitive Activity" shall not include the mere ownership of, and
exercise of rights appurtenant to, securities of a publicly-traded

                                       13
<PAGE>

Mr. Raymond E. Scott
March 15, 2005
Page 14 of 18

company representing 5% or less of the total voting power and 5% or less of the
total value of such an enterprise. You agree that the Company is a global
business and that it is appropriate for this Section 10 to apply to Competitive
Activity conducted anywhere in the world.

      (b) You agree not to engage directly or indirectly in any Competitive
Activity (i) until one (1) year after the Date of Termination if you are
terminated by the Company for Cause, as a result of a Notice of Non-Renewal from
the Company, or you terminate your employment for other than Good Reason, or
(ii) until two (2) years after the Date of Termination in all other
circumstances.

      (c) You shall not directly or indirectly, either on your own account or
with or for anyone else, solicit or attempt to solicit any of the Company's
customers, solicit or attempt to solicit for any business endeavor or hire or
attempt to hire any employee of the Company, or otherwise divert or attempt to
divert from the Company any business whatsoever or interfere with any business
relationship between the Company and any other person, (i) until one (1) year
after the Date of Termination if you are terminated by the Company for Cause, as
a result of a Notice of Non-Renewal from the Company, or you terminate your
employment for other than Good Reason, or (ii) until two (2) years after the
Date of Termination in all other circumstances.

      (d) You acknowledge and agree that damages in the event of a breach or
threatened breach of the covenants in this Section 10 will be difficult to
determine and will not afford a full and adequate remedy, and therefore agree
that the Company, in addition to seeking actual damages pursuant to Section 10
hereof, may seek specific enforcement of the covenant not to compete in any
court of competent jurisdiction, including, without limitation, by the issuance
of a temporary or permanent injunction, without the necessity of a bond. You and
the Company agree that the provisions of this covenant not to compete are
reasonable. However, should any court or arbitrator determine that any provision
of this covenant not to compete is unreasonable, either in period of time,
geographical area, or otherwise, the parties agree that this covenant not to
compete should be interpreted and enforced to the maximum extent which such
court or arbitrator deems reasonable.

      (e) As additional compensation for the covenants contained in Sections
10(b) and 10(c), and only if you execute a general release in form and substance
reasonably acceptable to the Company acknowledging, among other things, your
obligations under this Agreement, the Company shall increase the Severance
Period for purposes of Section 5(d) from one (1) year to two (2) years.

      11. CONFIDENTIALITY AND COOPERATION.

      (a) You shall not knowingly use, disclose or reveal to any unauthorized
person, during or after the Term, any trade secret or other confidential
information relating to the Company or any of its affiliates, or any of their
respective businesses or principals, such as, without limitation, dealers' or
distributor's lists, information regarding personnel and manufacturing
processes, marketing and sales plans, pricing or cost information, and all other
such information; and you confirm that such information is the exclusive
property of the Company and its affiliates. Upon

                                       14
<PAGE>

Mr. Raymond E. Scott
March 15, 2005
Page 15 of 18

termination of your employment, you agree to return to the Company on demand by
the Company all memoranda, books, papers, letters and other data, and all copies
thereof or therefrom, in any way relating to the business of the Company and its
affiliates, whether made by you or otherwise in your possession.

      (b) Any design, engineering methods, techniques, discoveries, inventions
(whether patentable or not), formulae, formulations, technical and product
specifications, bill of materials, equipment descriptions, plans, layouts,
drawings, computer programs, assembly, quality control, installation and
operating procedures, operating manuals, strategic, technical or marketing
information, designs, data, secret knowledge, know-how and all other information
of a confidential nature prepared or produced during the period of your
employment and which ideas, processes, and other materials or information relate
to any of the businesses of the Company, shall be owned by the Company and its
affiliates whether or not you should in fact execute an assignment thereof or
other instrument or document which may be reasonably necessary to protect and
secure such rights to the Company.

      (c) Following the termination of your employment, you agree to make
yourself reasonably available to the Company to respond to periodic requests for
information relating to the Company or your employment which may be within your
knowledge. You further agree to cooperate fully with the Company in connection
with any and all existing or future depositions, litigation, or investigations
brought by or against the Company, any entity related to the Company, or any of
its (their) agents, officers, directors or employees, whether administrative,
civil or criminal in nature, in which and to the extent the Company deems your
cooperation necessary. In the event that you are subpoenaed in connection with
any litigation or investigation, you will immediately notify the Company. You
shall not receive any additional compensation, other than reimbursement for
reasonable costs and expenses incurred by you, in complying with the terms of
this Section 11(c).

      12. ARBITRATION.

      (a) Except as contemplated by Section 10(d) or Section 12(c) hereof, any
dispute or controversy arising under or in connection with this Agreement that
cannot be mutually resolved by the parties to this Agreement and their
respective advisors and representatives shall be settled exclusively by
arbitration in Southfield, Michigan, before one arbitrator of exemplary
qualifications and stature, who shall be selected jointly by an individual to be
designated by the Company and an individual to be selected by you, or if such
two individuals cannot agree on the selection of the arbitrator, who shall be
selected pursuant to the procedures of the American Arbitration Association.

      (b) The parties agree to use their best efforts to cause (i) the two
individuals set forth in the preceding Section 12(a), or, if applicable, the
American Arbitration Association, to appoint the arbitrator within 30 days of
the date that a party hereto notifies the other party that a dispute or
controversy exists that necessitates the appointment of an arbitrator, and (ii)
any arbitration hearing

                                       15
<PAGE>

Mr. Raymond E. Scott
March 15, 2005
Page 16 of 18

to be held within 30 days of the date of selection of the arbitrator, and, as a
condition to his or her selection, such arbitrator must consent to be available
for a hearing, at such time.

      (c) Judgment may be entered on the arbitrator's award in any court having
jurisdiction, provided that you shall be entitled to seek specific performance
of your right to be paid and to participate in benefit programs during the
pendency of any dispute or controversy arising under or in connection with this
Agreement. The Company and you hereby agree that the arbitrator shall be
empowered to enter an equitable decree mandating specific performance of the
terms of this Agreement. If any dispute under this Section 12 shall be pending,
you shall continue to receive at a minimum the base salary which you were
receiving immediately prior to the act or omission which forms the basis for the
dispute. At the close of the arbitration, such continued base salary payments
may be offset against any damages awarded to you or may be recovered from you if
its determined that you were not entitled to the continued payment of base
salary under the other provisions of this Agreement.

      13. MODIFICATIONS. No provision of this Agreement may be modified,
amended, waived or discharged unless such modification, amendment, waiver or
discharge is agreed to in writing and signed by both you and such officer of the
Company as may be specifically designated by the Board.

      14. NO IMPLIED WAIVERS. Failure of either party at any time to require
performance by the other party of any provision hereof shall in no way affect
the full right to require such performance at any time thereafter. Waiver by
either party of a breach of any obligation hereunder shall not constitute a
waiver of any succeeding breach of the same obligation. Failure of either party
to exercise any of its rights provided herein shall not constitute a waiver of
such right.

      15. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Michigan without giving effect to any conflicts of laws rules.

      16. PAYMENTS NET OF TAXES. Except as otherwise provided in Section 6
herein, any payments provided for herein which are subject to Federal, State
local or other governmental tax or other withholding requirements or
obligations, shall have such amounts withheld prior to payment, and the Company
shall be considered to have fully satisfied its obligation hereunder by making
such payments to you net of and after deduction for all applicable withholding
obligations.

      17. CAPACITY OF PARTIES. The parties hereto warrant that they have the
capacity and authority to execute this Agreement.

      18. VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not, at the option of the party for whose benefit such provision
was intended, affect the validity or enforceability of any other provision of
the Agreement, which shall remain in full force and effect.

                                       16
<PAGE>

Mr. Raymond E. Scott
March 15, 2005
Page 17 of 18

      19. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

      20. ENTIRE AGREEMENT. This Agreement and any attachments hereto, contain
the entire agreement by the parties with respect to the matters covered herein
and supersede any prior agreement (including, but not limited to, prior
employment agreement(s)), condition, practice, custom, usage and obligation with
respect to such matters insofar as any such prior agreement, condition,
practice, custom, usage or obligation might have given rise to any enforceable
right. No agreements, understandings or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement.

      21. LEGAL FEES AND EXPENSES. It is the intent of the Company that you not
be required to incur the expenses associated with the enforcement of your rights
under this Agreement by litigation or other legal action because the cost and
expense thereof would substantially detract from the benefits intended to be
extended to you hereunder. Accordingly, the Company shall pay or cause to be
paid and be solely responsible for any and all reasonable attorneys' and related
fees and expenses incurred by you (i) as a result of the Company's failure to
perform this Agreement or any provision hereof or (ii) as a result of the
Company unreasonably or maliciously contesting the validity or enforceability of
this Agreement or any provision hereof as aforesaid.

      22. CODE SECTION 409A. Notwithstanding any provision in this Agreement to
the contrary, if your employment is terminated as described in Section 5(d) and
Section 409A(a)(2)(B)(i) of the Code applies to all or any portion of your
Severance Payment and you are a "specified employee" thereunder, then the
Company shall pay the portion of your Severance Payment that is subject to such
Section of the Code no earlier than six (6) months after your Termination Date
or such other date as would be permissible under the Code. If your employment is
terminated as described in Section 5(d) and Section 409A(a)(2)(B)(i) of the Code
does not apply to any portion of your Severance Payment or you are not a
"specified employee" thereunder, then the Company shall pay your Severance
Payment as described in Section 5(d).

                            [Signature Page Follows]

                                       17
<PAGE>

Mr. Raymond E. Scott
March 15, 2005
Page 18 of 18

If this letter sets forth our agreement on the subject matter hereof, kindly
sign and return to the Company the enclosed copy of this letter which will then
constitute our agreement on this subject, effective on March 15, 2005
("Effective Date").

Sincerely,

LEAR CORPORATION

By:  /s/ Roger A. Jackson
     --------------------------------
     Roger A. Jackson

Agreed to this 15th day of March, 2005

/s/ Raymond E. Scott
------------------------------------
Raymond E. Scott

                                       18exv10w1

 

Exhibit 10.1

STOCK PURCHASE AND SALE AGREEMENT

     This STOCK PURCHASE AND SALE AGREEMENT (the “Agreement”) is made and entered into as
of this 8th day of November, 2005, by and between the W. K. Kellogg Foundation Trust, a charitable
trust organized under the laws of the State of Michigan (the “Selling Stockholder”), and
Kellogg Company, a Delaware corporation (the “Company”)).

     WHEREAS, pursuant to this Agreement (1) the Company has agreed to repurchase from the Selling
Stockholder and the Selling Stockholder has agreed to sell to the
Company 9,371,567 Shares (as
defined below) owned by the Selling Stockholder, for an aggregate
purchase price of $400 million in
cash as set forth herein, (2) the Selling Stockholder has agreed to grant the Company certain
rights with respect to the purchase of certain additional Shares of the Selling Stockholder in the
event the Selling Stockholder desires to dispose of such Shares under certain circumstances and (3)
the Company has agreed to grant certain registration rights to the Selling Stockholder.

     WHEREAS,
as of October 28, 2005, the Company had issued and there were
outstanding 414,235,942 shares of common stock, par value $.0l per share (the “Shares”).

     WHEREAS, the Selling Stockholder currently owns 120,904,040 Shares, constituting approximately
29% of the outstanding Shares.

     NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties,
covenants and agreements set forth in this Agreement, the parties agree as follows:

ARTICLE I

Purchase and Sale

     1.1 Purchase of Shares. On the terms and subject to the conditions of this Agreement,
at the Closing, the Selling Stockholder shall sell, assign, transfer and deliver to the Company,
and the Company shall acquire from the Selling Stockholder,
9,371,567 Shares owned by the Selling
Stockholder (the “Purchased Shares”), in exchange for cash in an aggregate amount equal to
$400 million (the “Purchase Price”),
representing a per Share purchase price of $42.68.

ARTICLE II

The Closing

     2.1
Closing; Closing Deliveries. (a) Subject to
clause (d) below, the closing shall take
place on November 10,
2005 at a time mutually
agreed by the parties at the offices of the Company (the “Closing”).

     (b) At the Closing, the Selling Stockholder shall cause the Purchased Shares to be
transferred to the Company (and such transfer to be reflected on the share registry of the

 

 

Company) free and clear of all liens, claims, security interests, pledges, charges and other
encumbrances.

     (c) At the Closing, the Company shall deliver by wire transfer to the account designated by
the Selling Stockholder and set forth on Schedule 2.1 immediately available funds in U.S. dollars
in an amount equal to the Purchase Price.

     (d) The
obligations of the parties hereto to consummate the transactions
contemplated hereby shall be subject to the satisfaction at the
Closing of the condition that there shall be no statute, regulation,
injunction, restraining or other order, rule or decree of any nature
of any local, state, federal or foreign court, arbitrator, arbitral
tribunal, or other governmental, administrative or regulatory entity,
agency, instrumentality or authority (collectively, a
“Governmental Authority”) that is in effect that prohibits,
restricts, alters or prevents consummation of the transactions
contemplated hereby.

ARTICLE III

Representations and Warranties of the Company

     In order to induce the Selling Stockholder to enter into this Agreement, the Company hereby
represents and warrants to the Selling Stockholder as follows:

     3.1 Corporate Power and Authority. The Company is duly organized, validly existing
and in good standing under the laws of the State of Delaware. The Company has all requisite
corporate power and authority to enter into and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated by this Agreement. The execution,
delivery and performance of this Agreement by the Company have been duly authorized by all
necessary corporate action on the part of the Company. This Agreement has been duly executed and
delivered by the Company and (assuming due authorization, execution and delivery by the Selling
Stockholder) constitutes the legal, valid and binding obligation of the Company enforceable against
the Company in accordance with its terms subject to (a) applicable bankruptcy, insolvency,
fraudulent conveyance and other similar laws and (b) general principles of equity, including
equitable defenses and limits as to the availability of equitable remedies, whether such principles
are considered in a proceeding at law or in equity.

     3.2 Conflicts; Consents and Approvals. To the knowledge of the General Counsel and
Chief Financial Officer of the Company as of the date hereof, the execution and delivery of this
Agreement and the consummation of the transactions contemplated by this Agreement do not and will
not (a) violate, conflict with, or result in a breach of any provision of, or constitute a default
under, the Company’s Amended Restated Certificate of Incorporation or Bylaws, as amended; (b)
violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Company;
or (c) require any action or consent or approval of, or review by, or registration or material
filing by the Company with, any Governmental Authority, except as set forth herein and the filing of a Current Report on Form 8-K.

     3.3 Litigation. As of the date immediately preceding the date hereof, to the
knowledge of the General Counsel and Chief Financial Officer of the Company, there are no actions,
suits or proceedings pending against the Company (or any of its properties, rights or franchises),
at law or in equity, or before any Governmental Authority that would, individually or in the aggregate, reasonably be expected to have an adverse
effect on its ability to consummate the transactions contemplated hereby.

-2-

 

ARTICLE IV

Representations and Warranties of the Selling Stockholder

     In order to induce the Company to enter into this Agreement, the Selling Stockholder
represents and warrants to the Company as follows:

     4.1 Title to Shares. The Selling Stockholder owns beneficially and of record the
Purchased Shares and has good title, free and clear of all liens, claims, security interests,
pledges, charges and other encumbrances, to the Purchased Shares.

     4.2 Power and Authority. The Selling Stockholder is duly organized and validly
existing under the laws of the State of Michigan. It has all requisite power and authority to
enter into and deliver this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated by this Agreement. The execution, delivery and performance of this
Agreement by the Selling Stockholder has been duly authorized by all necessary action on its part.
This Agreement has been duly executed and delivered by the Selling Stockholder and (assuming due
authorization, execution and delivery by the Company) constitutes the legal, valid and binding
obligation of the Selling Stockholder, enforceable against it in accordance with its terms subject
to (a) applicable bankruptcy, insolvency, fraudulent conveyance and other similar laws and (b)
general principles of equity, including equitable defenses and limits as to the availability of
equitable remedies, whether such principles are considered in a proceeding at law or in equity.

     4.3 Conflicts; Consents and Approvals. To the knowledge of the Trustees of the
Selling Stockholder as of the date hereof, the execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement do not and will not (a) violate,
conflict with, or result in a breach of any provision of, or constitute a default under, the
Selling Stockholder’s governing or organizational documents; (b) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Selling Stockholder; or (c)
require any action or consent or approval of, or review by, or registration or material filing,
other than a filing pursuant to Section 16(a) under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), by it with, any Governmental
Authority except as set forth herein.

     4.4 No Agreements or Understandings. The Selling Stockholder is not a party to any
contract, agreement, arrangement, understanding or relationship (legal or otherwise) with any other
person, individual, firm, corporation, partnership, trust, joint venture, governmental authority or
other entity with respect to any securities of the Company, including without limitation transfer
or voting of any securities of the Company, finders fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or losses or the giving or
withholding of proxies.

     4.5 Litigation. As of the date immediately preceding the date hereof, to the
knowledge of the Trustees of the Selling Stockholder, there are no actions, suits or proceedings
pending against the Selling Stockholder (or any of its properties, rights or franchises), at law or
in equity, or before any Governmental
Authority

-3-

 

that would, individually or in the aggregate, reasonably be expected to have
an adverse effect on its ability to consummate the transactions contemplated hereby.

ARTICLE V

Additional Covenants

     5.1 Press Releases. The initial press release by each of the Selling Stockholder and
the Company announcing the transactions contemplated by this Agreement shall be in the form
mutually agreed by the parties.

     5.2 Company’s Right of Further Repurchase. (a) Prior to providing a Demand Notice
(as defined in Exhibit A) to the Company requesting that the Company register the offer and
sale under the Securities Act of 1933, as amended (the “Securities Act”), of Registrable
Shares (as defined in Exhibit A) owned by the Selling Stockholder as provided for in
Exhibit A hereto, the Selling Stockholder shall provide the Company with a preliminary
notice (the “Preliminary Notice”) of its contemplation of submitting a Demand Notice,
including the number of Registrable Shares the Selling Stockholder is contemplating being covered
by the Demand Notice. Following the Company’s receipt of the Preliminary Notice, the Company and
the Selling Stockholder shall discuss the potential disposal of Shares being contemplated by the
Selling Stockholder for a period of three (3) business days or such other period upon which the
Company and the Selling Stockholder may agree (the “Discussion Period”). Following the end
of the Discussion Period and if the Selling Stockholder desires to do so, the Selling Stockholder
may provide the Company with a Demand Notice with respect to the number of Registrable Shares
contemplated by the Selling Stockholder’s Preliminary Notice; provided, that if the Selling
Stockholder does not provide such a Demand Notice within ten (10) business days following the end
of the Discussion Period, then the Selling Stockholder must provide a Preliminary Notice and follow
the procedures set forth above again prior to submitting a Demand Notice. The Preliminary Notice
and the Demand Notice may only be delivered to the Company on a business day. The Company shall
have the right (the “Repurchase Right”), exercisable within three (3) business days
following the date of the Company’s receipt of the Demand Notice, to give notice to the Selling
Stockholder that it elects to repurchase all or a portion of the Shares which are the subject of
the Demand Notice. The price per Share which the Company is to pay for such repurchase of Shares
shall be 96.8% of the New York Stock Exchange volume weighted average price (calculated by
reference to the five trading-day period as a whole and not as an average of five one-day numbers)
of the Shares as reported by Bloomberg for the five (5) trading days immediately preceding the
business day of the Company’s receipt of the Demand Notice (the “Pricing Period”) or such
other price as the Company and the Selling Stockholder may agree upon. The Company and the Selling
Stockholder will enter into customary documentation with respect to such a repurchase which
documentation shall contain provisions (other than those contained in this Section 5.2 and
Exhibit A) that are substantially similar to those contained in this Agreement. The
consummation of such a repurchase (including transfer of repurchased Shares to the Company and
payment for such Shares to the Selling Stockholder) shall occur at a time and place mutually agreed
upon by the Company and the Selling Stockholder, but in any event within two (2) business days
following the date on which the Company exercises its Repurchase Right. The Company’s repurchase
of Shares pursuant to this Section 5.2 and Exhibit A (and the delivery of the Preliminary
Notice and the Demand

-4-

 

Notice shall be made at a time such that any portion of the Discussion Period, the related
Pricing Period and any period during which the Company is to determine whether it will repurchase
Shares of the Selling Stockholder) shall not occur during the Company’s customary trading blackout
periods (as established on the date of this Agreement) or any Blackout Period which the Company
shall be entitled to impose in accordance with the provisions of
sub-clauses (i) - (iv) of clause
(a)(3) of Exhibit A; and any purported Preliminary Notice or Demand Notice delivered at such
time shall be invalid and have no effect for purposes of this
Agreement. Subject to the provisions of this Section 5.2 and in the absence of the
Company’s repurchase of the Shares contemplated to be sold by the Selling Stockholder either
pursuant to the Company’s exercise of its Repurchase Right or otherwise, effective as of the
Closing, the Company and the Selling Stockholder shall each have the rights and obligations set
forth in Exhibit A. For purposes of this Agreement, “business day” means any day
other than a Saturday, Sunday, Federal holiday or any other day on which banking institutions in
New York or Michigan are authorized or obligated by applicable law or regulation to be closed. Any
notice not received on a business day shall be deemed to be received on the next following business
day.

     5.3 Transfer Taxes. The Selling Stockholder shall be responsible for the payment of
any stock transfer or similar taxes in connection with the transactions contemplated by this
Agreement.

     5.4 Further Assurances. (a) Each of the parties hereto shall use its reasonable best
efforts to take, or cause to be taken, all appropriate action, to do or cause to be done all things
necessary, proper or advisable under applicable law, and to execute and deliver such documents and
other papers, as may be required to carry out the provisions of this Agreement and to consummate
and make effective the transactions contemplated by this Agreement.

     (b) Each of the Company and the Selling Stockholder agrees to cooperate and use its reasonable
best efforts to contest and resist any action, including, without limitation, administrative or
judicial action, and to have vacated, lifted, reversed or overturned any decree, judgment,
injunction or other order (whether temporary, preliminary or permanent) that is in effect that
restricts, prevents or prohibits the consummation of any of the transactions contemplated by this
Agreement, including, without limitation, by pursuing all reasonably available avenues of
administrative and judicial appeal.

ARTICLE VI

Miscellaneous

     6.1 Counterparts. This Agreement may be executed in any number of counterparts, which
together shall constitute one and the same Agreement. The parties may execute more than one copy
of the Agreement, each of which shall constitute an original.

     6.2 Entire Agreement. This Agreement (including the exhibit and schedule hereto)
constitutes the entire agreement between the parties and supersedes all prior agreements,
understandings, arrangements or representations by or between the parties, written and oral, with
respect to the subject matter hereof. The parties hereby agree that they shall have no further
rights, obligations, liabilities or claims under or relating to any such other agreement.

-5-

 

     6.3 Third Party Beneficiaries. Nothing in this Agreement, express or implied, is
intended or shall be construed to create any third party beneficiaries.

     6.4 Governing Law; Jurisdiction. This Agreement shall be governed by the laws of the
State of Delaware, without giving effect to the conflict of laws principles thereof. Each party
irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of
the State of Delaware and of the United States of America, in each case located in the State of
Delaware, for any action or proceeding arising out of or relating to this Agreement and the
transactions contemplated by this Agreement (and agrees not to commence any action except in any
such court). Each party irrevocably and unconditionally waives any objection to the laying of
venue of any action or proceeding in the courts of the State of Delaware or of the United States of
America, in each case located in the State of Delaware, and further irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any action or proceeding brought in
any such court has been brought in an inconvenient forum. Each party irrevocably and
unconditionally waives any right it may have to a trial by jury in connection with any action or
proceeding arising out of or relating to this Agreement and the transactions contemplated by this
Agreement.

     6.5 Specific Performance. The transactions contemplated by this Agreement are unique.
Accordingly, each of the parties acknowledges and agrees that, in addition to all other remedies
to which it may be entitled, each of the parties hereto is entitled to a decree of specific
performance and injunctive and other equitable relief.

     6.6 Amendment. This Agreement may not be altered, amended or supplemented except by
an agreement in writing signed by each of the parties hereto.

     6.7 Notices. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly
given or made upon receipt) by delivery in person, by facsimile, by courier service or by
registered or certified mail to the respective parties at the following addresses (or at such other
address for a party as shall be specified in a notice given in accordance with this Section 6.7):

     If to the Selling Stockholder, to:

W.
K. Kellogg Foundation Trust

c/o The Bank of New York

1633 Broadway, 13th Floor

New York, New York 10019

Attention: Kevin J. Bannon

Facsimile No.: (212) 237-0936

With a copy to:

Sidley Austin Brown & Wood LLP

One South Dearborn Street

Chicago, Illinois 60603

Attention: Paul A. Svoboda, Esq.

Facsimile No.: (312) 853-7036

-6-

 

if to the Company, to:

Kellogg
Company

One Kellogg Square

Battle Creek, Michigan 49017

Attention: Chief Financial Officer

Facsimile No.: (269) 961-6598

With copies to:

Kellogg
Company

One Kellogg Square

Battle Creek, Michigan 49017

Attention: General Counsel

Facsimile No.: (269) 565-1266

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

Attention: Daniel A. Neff, Esq.

Facsimile No.: (212) 403-2218

     6.8 Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by either of the parties (whether by operation of law or
otherwise) without the prior written consent of the other party. Subject to the preceding
sentence, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the
parties and their respective successors and assigns.

     6.9 Fees and Expenses. Except as otherwise provided in this Agreement or Exhibit
A, all costs and expenses incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be the responsibility of and shall be paid by the party
incurring such fees or expenses, whether or not the transactions contemplated by this Agreement are
consummated.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

-7-

 

     IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be executed by its
officer thereunto duly authorized as of the date first written above.

	 	 	 	 	 
	 	 	W. K. KELLOGG FOUNDATION TRUST
	 
	 	 	 	 
	 	 	By: The Bank of
New York, corporate trustee
	 
	 	 	 	 
	 
	 	By:	 	/s/ Kevin J. Bannon
	 

	 	 	 	 
	 

	 	 	 	Name: Kevin J. Bannon
	 

	 	 	 	Title: Executive Vice President
	 
	 	 	 	 
	 	 	KELLOGG COMPANY
	 
	 	 	 	 
	 

	 	By:	 	/s/ Jeffrey M. Boromisa
	 

	 	 	 	 
	 

	 	 	 	Name: Jeffrey M. Boromisa
	 

	 	 	 	Title:  Senior Vice President
and Chief Financial Officer

-8-

 

EXHIBIT A

REGISTRATION RIGHTS

     (a) From and after February 1, 2006, and until December 31, 2006 (subject to clause (a)(3)
below), the Selling Stockholder shall have the right to make up to two written requests (the
“Demand Notices”) of the Company for registration under the Securities Act of the offer and
sale of all or a portion of the Registrable Shares owned by the Selling Stockholder; provided that
(u) each Demand Notice must be with respect to Registrable Shares having a market value (based on
the New York Stock Exchange volume weighted average price (calculated by reference to the five
trading-day period as a whole and not as an average of five one-day numbers) of the Shares as
reported by Bloomberg for the five (5) trading days immediately preceding the business day of the
Company’s receipt of the applicable Demand Notice) of at least $100,000,000 (provided, that if such
market value is less than $100,000,000 solely as a result of the Company’s exercise of its
Repurchase Right with respect to some but not all of the Registrable Shares subject to the
applicable Demand Notice, then the $100,000,000 threshold shall not apply so long as the demanded
registration applies to all Registrable Shares which were the subject of the applicable Demand
Notice but were not subject to the Company’s exercise of its Repurchase Right) and all Registrable
Shares subjected to Demand Notices (including a deemed Demand Notice as provided for in clause (v)
below) pursuant to this Exhibit A shall have an aggregate market value (as set forth above)
of no more than $400,000,000, (v) a Demand Notice shall be deemed to have been exercised and used
with respect to (and therefore the $400,000,000 maximum shall be reduced by) each purchase by the
Company from the Selling Stockholder of Registrable Shares, including, without limitation, such a
purchase arising out of discussions occurring during a Discussion Period, (w) any sale pursuant to
the registration rights set forth in this Exhibit A shall be in the form of an underwritten
public offering in which the underwriters will use reasonable best efforts to effect a broad
distribution of the Registrable Shares to be sold led by two lead underwriters/bookrunners, both
chosen by the Selling Stockholder, provided that one such underwriter/bookrunner shall be selected
from a list of candidates identified by the Company, (x) the Company shall not be required to file
and the Company may withdraw (or otherwise take action to prohibit the sale and offering under) a
registration statement pursuant to a Demand Notice during the Company’s customary blackout periods
(as established on the date of this Agreement), and the Selling Stockholder agrees to cooperate
with respect thereto and not to engage in a sale or offering at such time, (y) the Selling
Stockholder shall not have the right to exercise its second Demand Notice prior to 60 days
following completion of an offering pursuant to the first Demand Notice or a repurchase by the
Company of Registrable Shares owned by the Selling Stockholder, either pursuant to the Company’s
exercise of its Repurchase Right or otherwise, and (z) the procedures set forth in Section 5.2 of
the Agreement shall have first been complied with and the Company shall not have repurchased
Registrable Shares owned by the Selling Stockholder, either pursuant to the exercise of its
Repurchase Right or otherwise with respect to such Registrable Shares. “Registrable
Shares” means the Shares beneficially owned as of the date hereof by the Selling Stockholder
which are not Purchased Shares and any Shares that may be issued in respect of such Shares;
provided that such Shares shall cease to be Registrable Shares as soon as such Shares have been
sold, transferred or otherwise disposed of or cease to be outstanding.

A-1

 

     (1) The Selling Stockholder hereby undertakes to provide all such information and materials
and take all such action as may be requested in order to permit the Company to comply with all
applicable requirements of the Securities and Exchange Commission (the “Commission”) and to
obtain, if not immediately effective, any desired acceleration of the effective date of a
registration statement with respect to the Registrable Shares covered by the applicable Demand
Notice.

     (2) Any registration statement filed at the Selling Stockholder’s request hereunder will not
count as a Demand Notice unless effectiveness thereof is maintained until the earlier of the
completion of the offering and the date that is 45 days following the effective date of such
registration statement.

     (3) Notwithstanding the foregoing, the Company shall be entitled to postpone for a reasonable
period of time (not to exceed 45 days in the case of any one demanded registration, provided that
in any such case the Company may extend such postponement for an additional number of days such
that the total Blackout Period does not exceed 90 days if it determines in good faith that a Delay
Standard exists and informs the Selling Stockholder of such determination before the termination of
the initial period) the filing of any registration statement otherwise required to be prepared and
filed by the Company and/or the sale and offering of Registrable Shares and to withdraw (or
otherwise take action to prohibit the sale and offering under) the related registration statement
(and the Selling Stockholder agrees to cooperate with respect thereto and not to engage in a sale
or offering at such time) following a Demand Notice (each such period, a “Blackout Period”)
if the Company determines that such postponement, withdrawal or other action is in the best
interests of the Company’s stockholders as such filing or the sale or offering of any Registrable
Shares would (i) substantially impede, delay or otherwise interfere with any pending or
contemplated acquisition, disposition, corporate reorganization or other material transaction
involving the Company or its subsidiaries, (ii) have an adverse effect on any pending or
contemplated financing, offering or sale of any class of securities of the Company in a substantial
way, (iii) require disclosure of material non-public information that is not then otherwise
required by law to be disclosed and that, if disclosed at such time, would be harmful to the
interests of the Company or its stockholders or (iv) otherwise raise issues or considerations of a
nature similar to those raised by the occurrences described in clauses (i), (ii) and/or (iii) of
this sentence (any of clauses (i), (ii), (iii) and/or (iv) of this sentence, the “Delay
Standard”). The Company shall promptly inform the Selling
Stockholder when a Blackout Period has ended. Notwithstanding the foregoing, the Company shall only be entitled to one Blackout
Period (including an extension thereof as contemplated above) with respect to each Demand Notice.
There shall be a commensurate extension of the December 31, 2006 deadline set forth in paragraph
(a) above by a number of days equal to the number of days the Company has postponed the filing of
any registration statement pursuant to this clause (a)(3).

     (b) If the Company is required by the provisions of paragraph (a) to use its reasonable best
efforts to effect the registration of Registrable Shares, the Company will:

     (1) as expeditiously as possible prepare and file with the Commission a registration
statement, or an amendment to an existing registration statement, if
any, as the case may be, on such form as the Company in its reasonable discretion shall

A-2

 

determine, with respect to the offer and sale of such Registrable Shares and use its
reasonable best efforts to cause such registration statement (or such
amendment) promptly to become and remain
effective for a period of time required for the disposition of such Registrable Shares by the
Selling Stockholder but not to exceed 45 days; provided, however, that before filing such
registration statement or any amendments thereto, to the extent practicable the Company shall
furnish to the representatives of the Selling Stockholder copies of all documents proposed to be
filed and counsel to the Selling Stockholder shall have a reasonable opportunity to comment thereon
and, provided, further, that the registration statement filed by the Company shall be an “automatic
shelf registration statement” (as such term is defined in the rules and forms of the Securities and
Exchange Commission) or a post-effective amendment to an automatic shelf registration statement if
the Company is at such time eligible to make such a filing;

     (2) prepare and file with the Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of the Securities Act with
respect to the sale of the Registrable Shares covered by such registration statement until the
earlier of the completion of the offering or the date that is 45 days following the effective date
of such registration statement;

     (3) furnish to the Selling Stockholder the applicable registration statement and each
amendment and supplement thereto (including in each case all exhibits), if any, and a copy of a
summary prospectus or other prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents, as the Selling Stockholder may
reasonably request;

     (4) use its reasonable best efforts to register or qualify the Registrable Shares covered by
such registration statement under such other securities or blue sky laws of such jurisdictions
within the United States as are necessary to keep such registration or qualification in effect for
so long as such registration statement remains in effect, and to take any other action which may be
necessary to enable the Selling Stockholder to consummate the disposition in such jurisdictions of
the Registrable Shares (provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business, subject itself to taxation in or to
file a general consent to service of process in any jurisdiction wherein it would not but for the
requirements of this paragraph (b)(4) be obligated to do so), and do such other reasonable acts and
things as may be required of it to enable the Selling Stockholder to consummate the disposition in
such jurisdiction of the Registrable Shares covered by such registration statement;

     (5) use reasonable best efforts to enter into customary agreements, including an underwriting
agreement customary in form and scope for underwritten secondary offerings of the nature
contemplated by the applicable registration statement, including with contemplated opinions of
counsel to the Company, “comfort letters” or similar documents of the independent certified public
accountants of the Company, indemnities and officer’s certificates as to the accuracy of the
Company’s representations and warranties contained in the underwriting agreement;

A-3

 

     (6) otherwise use its reasonable best efforts to comply with all applicable rules and
regulations of the Commission, and make earnings statements satisfying the provisions of Section
11(a) of the Securities Act generally available to the Selling Stockholder no later than 45 days
after the end of any twelve-month period (or 90 days, if such period is a fiscal year) commencing
at the end of any fiscal quarter in which Registrable Shares are sold to underwriters in an
underwritten public offering;

     (7) use its reasonable best efforts to cause all such Registrable Shares to be listed on each
securities exchange or quotation system on which similar securities issued by the Company are
listed or traded;

     (8) inform the Selling Stockholder:

	 	(A)	 	when such registration statement or any amendment thereto has
been filed with the Commission and when, if later, such registration statement
or any post-effective amendment thereto has become effective;
	 
	 	(B)	 	of any request by the Commission for amendments or supplements
to such registration statement or the prospectus included therein or for
additional information;
	 
	 	(C)	 	of the issuance by the Commission of any stop order suspending
the effectiveness of such registration statement or the initiation of any
proceeding for that purpose;
	 
	 	(D)	 	of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of the
Registrable Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
	 
	 	(E)	 	of the happening of any event that requires the Company to make
changes in such registration statement or the prospectus in order to make the
statements therein not misleading (accompanied by an instruction to suspend the
use of the prospectus until the requisite changes have been made);

     (9) use its reasonable best efforts to prevent the issuance or obtain the withdrawal of any
order suspending the effectiveness of such registration statement at the earliest possible time;

     (10) make reasonably available for inspection by the representatives of the underwriters
participating in any disposition pursuant to such registration statement relevant financial
records, pertinent corporate documents and properties of the Company in connection with customary
due diligence relating to such registration;

     (11) to the extent reasonably required and at such times that do not unreasonably interfere
with the other obligations of senior executives of the Company, make such senior executives
available to the Selling Stockholder for meetings with prospective

A-4

 

purchasers of the Registrable Shares and prepare and present to potential investors customary
“road show” material, in each case in accordance with the reasonable recommendations of the
underwriters and in all respects in a manner consistent with other secondary offerings of
securities in an offering of a similar size to such offering of the Registrable Shares; and

     (12) use reasonable best efforts to procure the cooperation of the Company’s transfer agent in
settling any offering or sale of Registrable Shares, including with respect to the transfer of
physical stock certificates into book-entry form in accordance with any procedures reasonably
requested by the Selling Stockholder or the underwriters.

     (c) In connection with a requested registration pursuant to paragraph (a) of this Exhibit
A, the Selling Stockholder shall pay all underwriting discounts and commissions relating to the
Registrable Shares of the Selling Stockholder being so registered, all fees and expenses of legal
counsel, accountants and other advisors to the Selling Stockholder and all reasonable fees and
expenses of legal counsel, accountants and other advisors to the Company incurred in connection
with such a registration (provided that the Selling Stockholder shall not be responsible, with
respect to one or more requested registrations, for more than an aggregate of $75,000 in fees of
outside legal counsel to the Company), all filing fees, printing fees, fees and expenses of
complying with “blue sky” or state securities laws and reasonable fees and expenses relating to
“road show” investor presentations (including the costs of any aircraft used in connection
therewith).

     (d) In the case of each offering registered pursuant to this Exhibit A, the Company
agrees to indemnify and hold the Selling Stockholder, each underwriter of Registrable Shares under
such registration and each person who controls any of the foregoing within the meaning of Section
15 of the Securities Act, and the trustees, directors and officers of the Selling Stockholder,
harmless against any and all losses, claims, damages, liabilities or actions, joint or several, to
which they or any of them may become subject under the Securities Act or any other statute or
common law or otherwise, and to reimburse them for any legal or other expenses reasonably incurred
by them in connection with defending any actions, insofar as any such losses, claims, damages,
liabilities or actions shall arise out of or shall be based upon (1) any untrue statement or
alleged untrue statement of a material fact contained in the registration statement relating to the
sale of such Registrable Shares, or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or (2) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus (as amended or
supplemented if the Company shall have filed with the Commission any amendment thereof or
supplement thereto), if used prior to the effective date of such registration statement, or
contained in the prospectus (as amended or supplemented if the Company shall have filed with the
Commission any amendment thereof or supplement thereto), or the omission or alleged omission to
state therein a material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however, that the
indemnification agreement contained in this paragraph (d) shall not apply to such losses, claims,
damages, liabilities or actions which shall arise from the sale of Registrable Shares by the
Selling Stockholder if such losses, claims, damages, liabilities or actions shall arise out of or
shall be based upon any such untrue statement or alleged untrue statement, or any such omission or
alleged omission, (i) made in reliance upon and in conformity

A-5

 

with information furnished in writing to the Company by the Selling Stockholder or any such
underwriter for use in connection with the preparation of the registration statement or any
preliminary prospectus or prospectus contained in the registration statement or any such amendment
thereof or supplement thereto or (ii) in the case of any underwriters (and each person who controls
any underwriters within the meaning of Section 15 of the Securities Act) and in the case of the
Selling Stockholder, made in any preliminary prospectus, and the prospectus contained in the
registration statement in the form filed by the Company with the Commission pursuant to Rule 424(b)
under the Securities Act shall have corrected such statement or omission and a copy of such
prospectus shall not have been sent or given to such person at or prior to the confirmation of such
sale to him.

     (e) In the case of each offering registered pursuant to this Exhibit A, the Selling
Stockholder and each underwriter participating therein agrees, in the same manner and to the same
extent as set forth in paragraph (d) of this Exhibit A, severally to indemnify and hold harmless
(1) the Company and each person, if any, who controls the Company (other than the Selling
Stockholder) within the meaning of Section 15 of the Securities Act, and the directors and officers
of the Company, (2) in the case of each such underwriter, the Selling Stockholder, each person, if
any, who controls the Selling Stockholder within the meaning of Section 15 of the Securities Act
and the trustees, directors and officers of the Selling Stockholder and (3) in the case of the
Selling Stockholder, the underwriters, each person, if any, who controls an underwriter within the
meaning of Section 15 of the Securities Act and the directors and officers of the underwriters,
with respect to any statement in or omission from such registration statement or any preliminary
prospectus (as amended or as supplemented, if amended or supplemented as aforesaid) or prospectus
contained in such registration statement (as amended or as supplemented, if amended or supplemented
as aforesaid), if such statement or omission shall have been made in reliance upon and in
conformity with information furnished in writing to the Company by the Selling Stockholder or such
underwriter (as the case may be) for use in connection with the preparation of such registration
statement or any preliminary prospectus or prospectus contained in such registration statement or
any such amendment thereof or supplement thereto.

     (f) Each party indemnified under paragraph (d) or (e) of this Exhibit A shall,
promptly after receipt of notice of the commencement of any action against such indemnified party
in respect of which indemnity may be sought hereunder, notify the indemnifying party in writing of
the commencement thereof. The failure of any indemnified party to so notify an indemnifying party
of any such action shall not relieve the indemnifying party from any liability in respect of such
action which it may have to such indemnified party on account of the indemnity agreement contained
in paragraph (d) or (e) of this Exhibit A, unless and only to the extent that the
indemnifying party was prejudiced by such failure, and in no event shall relieve the indemnifying
party from any other liability which it may have to such indemnified party. In case any such
action shall be brought against any indemnified party and it shall notify an indemnifying party of
the commencement thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it may desire, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under paragraph (d) or (e) of this Exhibit A for any legal or other
expenses subsequently incurred by such indemnified party in connection with the

A-6

 

defense thereof; provided, however, that if there exists or is reasonably likely to exist a
conflict of interest that would make it inappropriate in the reasonable judgment of the indemnified
party for the same counsel to represent both the indemnified party and the indemnifying party, then
the indemnified party shall be entitled to retain one of its own counsel, the reasonable fees and
expenses of which shall be paid by the indemnifying party. No such third party claim may be
settled by the indemnifying party or the indemnified party (unless, in the case of a settlement by
the indemnifying party, such settlement includes an unconditional release of the indemnified party
from all liability arising out of such claim or proceeding and does not include any relief other
than the payment of monetary damages) without the prior written consent of the other, which consent
shall not be unreasonably withheld.

     (g) If the indemnification provided for under paragraph (d) or (e) of this Exhibit A shall for
any reason be held by a court to be unavailable to an indemnified party under paragraph (d) or (e)
hereof in respect of any loss, claim, damage or liability, or any action in respect thereof, then,
in lieu of the amount paid or payable under paragraph (d) or (e) hereof, the indemnified party and
the indemnifying party under paragraph (d) or (e) hereof shall contribute to the aggregate losses,
claims, damages and liabilities, (1) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the prospective seller of securities covered by the
registration statement which resulted in such loss, claim, damage or liability, or action in
respect thereof, with respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant equitable
considerations or (2) if the allocation provided by clause (1) above is not permitted by applicable
law, in such proportion as shall be appropriate to reflect the relative fault of the Company and
such prospective seller from the offering of the securities covered by such registration statement.
The parties hereto agree that it would not be just and equitable if contribution pursuant to this
paragraph (i) were determined by pro rata allocation or by any other method of allocation which
does not take account the equitable considerations referred to in this paragraph. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. In addition, no person shall be obligated to contribute hereunder any amounts
in payment for any settlement of any action or claim effected without such person’s consent, which
consent shall not be unreasonably withheld.

     (h) Any underwriter overallotment option shall be made available by the Selling Stockholder
solely from its owned Registrable Shares.

     (i) Capitalized terms used and not defined in this Exhibit A shall have the meanings
set forth in the Agreement.

A-7

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