Document:

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                                                                     EXHIBIT 4.4

                             STOCK OPTION AGREEMENT

     This Agreement, made as of this 27th day of July, 2000, by KELLOGG COMPANY,
a Delaware Corporation (hereinafter called the "Company"), with JAMES M. JENNESS
(hereinafter called "Optionee").

     For and in consideration of the respective agreements herein set forth, it
is hereby agreed as follows:

1.   Optionee agrees to devote fifty (50) percent of his working time to
     consulting with the Company on such matters as the Chief Executive Officer
     of the Company may direct.

2.   Subject to the terms and conditions of this Stock Option Agreement, the
     Company hereby grants to the Optionee the Option to purchase 300,000 shares
     of the common stock ($.25 par value per share) of the Company (hereinafter
     the "Option").

3.   The exercise price per share shall be $27.00, the fair market value of the
     common stock on the date of the Option grant as determined by the Board of
     Directors. The fair market value means the average between the highest and
     lowest sale prices per share on the New York Stock Exchange Composite
     Transactions Tape on such date, provided that if there shall be no sales of
     shares reported on such date, the fair market value of a share on such date
     shall be deemed to be equal to the average of the highest and lowest sale
     prices per share on such Composite Tape for the last preceding date on
     which sales of shares were reported. The purchase price for exercise of the
     Option shall be payable at the time the Option is exercised, in cash, or by
     exchange of shares of common stock of the Company previously owned by the
     Optionee, with a market value equal, on the date of payment, to the
     aggregate purchase price for the Option, or partly in cash, and the
     remainder in shares of common stock of the Company.

4.   The Option may be exercised in whole or in part, subject to the terms and
     provisions of this Stock Option Agreement, by mailing by registered mail,
     or by delivering in person, a Notice Of Exercise Of Option to the Office of
     the Chairman, Kellogg Company, One Kellogg Square, Battle Creek, Michigan
     49016-3599. Such notice shall state the number of shares with respect to
     which the Option is being exercised and the method of payment for such
     shares. A copy of the Notice of Exercise shall simultaneously be delivered
     to the Secretary of Kellogg Company, One Kellogg Square, Battle Creek, MI
     49016-3599.

5.   The Option is not an incentive stock option under the provisions of the
     Internal Revenue Code. The Option is intended to be exempt from the
     provisions of Section 16(b) of the Securities Exchange Act of 1934 under
     Securities and Exchange Commission Rule 16b(3). No securities acquired
     pursuant to the exercise of this Option may be sold prior to a date that is
     six (6) months from the date of this Stock Option Agreement.

6.   The Option vests in equal, annual installments over three (3) years;
     one-third as of the date hereof; one-third on the first anniversary date of
     the grant; and one-third on the second anniversary date of the grant;
     provided, however, vesting of the second and third installments will be
     contingent upon this Stock Option Agreement remaining in effect through
     such installment periods. This Stock Option Agreement shall terminate
     immediately, as to unvested portions of this Option, if the Optionee
     notifies the Company that he is no longer willing to devote fifty (50%)
     percent of his working time to consulting with the Company pursuant to
     paragraph 1 hereof or if the Company notifies the Optionee that it no
     longer

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     wishes to receive such consulting services. In the event of such
     termination, portions of this Option that have not vested shall terminate
     and be forfeited to the Company, and vested portions of this Option may be
     exercised at any time prior to the expiration of the Option.

7.   In the event Optionee pays the Option price and any associated tax
     withholding obligations in whole or in part by surrendering shares of the
     Company's common stock, then Optionee may be eligible to receive an
     accelerated ownership feature (AOF) Option to purchase a number of shares
     of common stock equal to the number of shares delivered to pay the Option
     price or delivered or withheld for tax withholding obligations. The AOF
     Option, if granted, will be exercisable for a term ending on the same date
     as this Option. The exercise price of the AOF Option will be the fair
     market value of the common stock on the date the AOF is awarded as
     determined by the Board of Directors in the exercise of its discretion. AOF
     Options will be awarded only if no other AOF Option has been awarded to the
     Optionee within the six-month period (6) prior to the date of the exercise
     of this Option.

8.   This Agreement shall be construed in accordance with the laws of the State
     of Delaware (regardless of the law that might otherwise govern under
     applicable Delaware principles of conflict laws) to the extent not
     superceded by the laws of the United States government concerning
     securities.

9.   If Optionee exercises any portion of the Option granted pursuant to this
     Agreement and within one (1) year after such exercise, attempts to provide
     consulting services to a direct competitor of Kellogg Company, then the
     gain represented by the mean market price on the date of exercise over the
     exercise price, multiplied by the number of shares purchased by the
     Optionee, less any applicable withholding or tax obligations, without
     regard to any subsequent market price decrease or increase, shall be paid
     by Optionee to the Company. Furthermore, any unexercised Options will be
     immediately cancelled by the Company at the time of such event.

10.  This Option shall not be transferable, except by will or the laws of
     descent and distribution; and the Option shall be exercisable during
     Optionee's lifetime only by the Optionee.

11.  Optionee's right to exercise this Option terminates on the earliest of the
     following:

     a.   one (1) year after the Optionee's services as a Consultant or a member
          of the Board of Directors are terminated by death. Any portion of the
          Option exercisable following the death of the Optionee may be
          exercised subject to the terms and conditions contained herein by the
          Optionee's estate or by a person who has the acquired the right to
          exercise such Option by Will or the laws of descent;

     b.   ten (10) years from the date the Option was granted, July 27, 2000; or

     c.   immediately, with respect to any unvested portions of this Option,
          upon the occurrence of any of the events described in paragraph 6 of
          this Stock Option Agreement; or

     d.   immediately upon the occurrence of the event described in paragraph 9
          of this Stock Option Agreement.

12.  If any change is made in the stock subject to this Option, subsequent to
     the effective date of the grant of Option (through merger, consolidation,
     reorganization, recapitalization, stock dividend, split up, combination,
     exchange, change in corporate structure, or otherwise) appropriate
     adjustments shall be made by the Board of Directors as to the maximum
     number of shares subject to the Option and the price per share of stock
     subject to this

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     Option. Any adjustment made by the Board of Directors shall be final and
     binding upon the Optionee.

13.  Notwithstanding any other provision of this Option to the contrary, in the
     event of a Change in Control, any portion of this Option outstanding as of
     the date of Change in Control, which is not then exercisable and vested,
     shall become fully exercisable and vested as of the date such Change in
     Control has deemed to have occurred. For the purposes of this Stock Option
     Agreement, the term "Change in Control" shall have the same meaning as is
     found in Section 14.2 of the Kellogg Company 2001 Long-Term Incentive Plan
     and any amendments thereto.

14.  The Board of Directors may suspend or terminate this Stock Option Agreement
     and the Option at any time and from time to time in such respects as the
     Board may deem advisable to ensure that the Option conforms or otherwise
     reflects changes in applicable laws or regulations or to permit the Company
     or the Optionee to benefit from changes in applicable laws and regulations,
     or in any other respect, the Board may deem to be in the best interest of
     the Company. No such amendment, suspension, or termination shall materially
     adversely effect the rights of the Optionee without the consent of the
     Optionee, or revise the exercise price of the Option or increase the number
     of shares available under the Option without Kellogg Company share owner
     approval.

15.  Kellogg Company shall have the right to deduct from any payment or
     settlement any federal, state, local, or other tax of any kind that the
     Board of Directors, in its sole discretion, deems necessary to be withheld
     to comply with the Internal Revenue Code and/or any other applicable law,
     rule, or regulation.

16.  The grant of this Option shall not confer upon Optionee any right to
     continuing service with the Company.

17.  This Option shall become effective as of July 27, 2000, and shall continue
     for a term of ten (10) years thereafter unless terminated at an earlier
     date by Optionee or Company, or as otherwise provided in this Agreement.
     This Agreement replaces, in its entirety, a previously issued form of a
     Stock Option Agreement between the Company and the Optionee, which had
     errors in several terms.

         KELLOGG COMPANY                                      OPTIONEE

                                                  /s/ JAMES M. JENNESS
By: /s/ JANET LANGFORD KELLY                      ------------------------------
   ---------------------------------                     James M. Jenness
    Janet Langford Kelly
    Executive Vice President --                   Address:
    Corporate Development,
    General Counsel and Secretary                 ------------------------------

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                                                                     EXHIBIT 4.3

                         KELLOGG COMPANY 2001 LONG-TERM
                                 INCENTIVE PLAN

   1. PURPOSE. The purpose of the 2001 Long-Term Incentive Plan (the "Plan") is
to further and promote the interests of Kellogg Company, its Subsidiaries and
its share owners by enabling the Company and its Subsidiaries to attract, retain
and motivate employees and officers or those who will become employees or
officers, and to align the interests of those individuals and the Company's
share owners. To do this, the Plan offers performance-based incentive awards and
equity-based opportunities providing such employees and officers with a
proprietary interest in maximizing the growth, profitability and overall success
of the Company and its Subsidiaries.

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

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

     2.2 "AWARD AGREEMENT" means the agreement executed by a Participant
   pursuant to Sections 3.2 and 16.7 of the Plan in connection with the granting
   of an Award.

     2.3 "BOARD" means the Board of Directors of Kellogg Company, as constituted
   from time to time.

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

     2.5 "COMMITTEE" means the committee of the Board designated to administer
   the Plan, as described in Section 3 of the Plan.

     2.6 "COMMON STOCK" means the Common Stock, par value $.25 per share, of the
   Company or any security of the Company issued by the Company in substitution
   or exchange therefor.

     2.7 "COMPANY" means Kellogg Company, a Delaware corporation, or any
   successor corporation to Kellogg Company.

     2.8 "DISABILITY" means disability as defined in the Participant's then
   effective employment agreement, or if the Participant is not then a party to
   an effective employment agreement with the Company which defines disability,
   "Disability" means disability as determined by the Committee in accordance
   with standards and procedures similar to those under the Company's long-term
   disability plan, if any. Subject to the first sentence of this Section 2.8,
   at any time that the Company does not maintain a long-term disability plan,
   "Disability" shall mean any physical or mental disability which is determined
   to be total and permanent by a physician selected in good faith by the
   Company.
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     2.9 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as in effect
   and as amended from time to time, or any successor statute thereto, together
   with any rules, regulations and interpretations promulgated thereunder or
   with respect thereto.

     2.10 "FAIR MARKET VALUE" means, with respect to any date, the average
   between the highest and lowest sale prices per share on the New York Stock
   Exchange Composite Transactions Tape on such date, provided that if there
   shall be no sales of shares reported on such date, the Fair Market Value of a
   share on such date shall be deemed to be equal to the average between the
   highest and lowest sale prices per share on such Composite Tape for the last
   preceding date on which sales of shares were reported.

     2.11 "INCENTIVE STOCK OPTION" means any stock option granted pursuant to
   the provisions of Section 6 of the Plan (and the relevant Award Agreement)
   that is intended to be (and is specifically designated as) an "incentive
   stock option" within the meaning of Section 422 of the Code.

     2.12 "NON-QUALIFIED STOCK OPTION" means any stock option granted pursuant
   to the provisions of Section 6 of the Plan (and the relevant Award Agreement)
   that is not an Incentive Stock Option.

     2.13 "PARTICIPANT" means any individual who is selected from time to time
   under Section 5 to receive an Award under the Plan.

     2.14 "PERFORMANCE UNITS" means the monetary units granted under Section 9
   of the Plan and the relevant Award Agreement.

     2.15 "PLAN" means the Kellogg Company 2001 Long-Term Incentive Plan, as set
   forth herein and as in effect and as amended from time to time (together with
   any rules and regulations promulgated by the Committee with respect thereto).

     2.16 "RESTRICTED SHARES" means the restricted shares of Common Stock
   granted pursuant to the provisions of Section 8 of the Plan and the relevant
   Award Agreement.

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

     2.18 "STOCK APPRECIATION RIGHT" means an Award described in Section 7.2 of
   the Plan and granted pursuant to the provisions of Section 7 of the Plan.

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

   3. ADMINISTRATION.

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     3.1 THE COMMITTEE. The Plan shall be administered by the Compensation
   Committee of the Board of Directors.

     3.2 PLAN ADMINISTRATION AND PLAN RULES. The Committee is authorized to
   construe and interpret the Plan and to promulgate, amend and rescind rules
   and regulations relating to the implementation, administration and
   maintenance of the Plan. Subject to the terms and conditions of the Plan, the
   Committee shall make all determinations necessary or advisable for the
   implementation, administration and maintenance of the Plan including, without
   limitation, (a) selecting the Plan's Participants, (b) making Awards in such
   amounts and form as the Committee shall determine, (c) imposing such
   restrictions, terms and conditions upon such Awards as the Committee shall
   deem appropriate, and (d) correcting any technical defect(s) or technical
   omission(s), or reconciling any technical inconsistency(ies), in the Plan
   and/or any Award Agreement. The Committee may designate persons other than
   members of the Committee to carry out the day-to-day ministerial
   administration of the Plan under such conditions and limitations as it may
   prescribe, except that the Committee shall not delegate its authority with
   regard to the selection for participation in the Plan and/or the granting of
   any Awards to Participants who are subject to Section 16 of the Exchange Act.
   The Committee may, in its sole discretion, delegate its authority to one or
   more senior executive officers for the purpose of making Awards to
   Participants who are not subject to Section 16 of the Exchange Act. The
   Committee's determinations under the Plan need not be uniform and may be made
   selectively among Participants, whether or not such Participants are
   similarly situated. Any determination, decision or action of the Committee in
   connection with the construction, interpretation, administration,
   implementation or maintenance of the Plan shall be final, conclusive and
   binding upon all Participants and any person(s) claiming under or through any
   Participants. The Company shall effect the granting of Awards under the Plan,
   in accordance with the determinations made by the Committee, by execution of
   written agreements and/or other instruments in such form as is approved by
   the Committee.

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

   4. TERM OF PLAN/COMMON STOCK SUBJECT TO PLAN.

     4.1 TERM. The Plan shall terminate on such date as is ten years from the
   date the first award is granted hereunder, except with respect to Awards then
   outstanding. After such date no further Awards shall be granted under the
   Plan.

     4.2 COMMON STOCK. The maximum number of shares of Common Stock in respect
   of which Awards may be granted or paid out under the Plan, subject to
   adjustment as provided in Section 13.2 of the Plan, shall not exceed 26
   million shares. In the event of a change in the Common Stock of the Company
   that is limited to a change in the designation thereof to "Capital Stock" or
   other similar designation, or to a change in the par value thereof, or from
   par value to no par value,

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   without increase or decrease in the number of issued shares, the shares
   resulting from any such change shall be deemed to be the Common Stock for
   purposes of the Plan. Common Stock which may be issued under the Plan may be
   either authorized and unissued shares or issued shares which have been
   reacquired by the Company (in the open-market or in private transactions) and
   which are being held as treasury shares. No fractional shares of Common Stock
   shall be issued under the Plan.

     4.3 COMPUTATION OF AVAILABLE SHARES. For the purpose of computing the total
   number of shares of Common Stock available for Awards under the Plan, there
   shall be counted against the limitations set forth in Section 4.2 of the Plan
   the maximum number of shares of Common Stock potentially subject to issuance
   upon exercise or settlement of Awards granted under Sections 6 and 7 of the
   Plan, the number of shares of Common Stock issued under grants of Restricted
   Shares pursuant to Section 8 of the Plan and the maximum number of shares of
   Common Stock potentially issuable under grants or payments of Performance
   Units pursuant to Section 9 of the Plan, in each case determined as of the
   date on which such Awards are granted. If any Awards expire unexercised or
   are forfeited, surrendered, cancelled, terminated or settled in cash in lieu
   of Common Stock, the shares of Common Stock which were theretofore subject
   (or potentially subject) to such Awards shall again be available for Awards
   under the Plan to the extent of such expiration, forfeiture, surrender,
   cancellation, termination or settlement of such Awards.

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

   6. STOCK OPTIONS.

     6.1 TERMS AND CONDITIONS. Stock options granted under the Plan shall be in
   respect of Common Stock and may be in the form of Incentive Stock Options or
   Non-Qualified Stock Options (sometimes referred to collectively herein as the
   "Stock Option(s))". Such Stock Options shall be subject to the terms and
   conditions set forth in this Section 6 and any additional terms and
   conditions, not inconsistent with the express terms and provisions of the
   Plan, as the Committee shall set forth in the relevant Award Agreement.

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

     6.3 EXERCISE PRICE. The exercise price per share of Common Stock subject to
   a Stock Option shall be determined by the Committee, including, without
   limitation, a determination based on a formula determined by the Committee;
   provided, however, that the exercise price of an Incentive Stock Option shall
   not be less than one hundred percent (100%) of the Fair Market Value of the

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   Common Stock on the grant date of such Incentive Stock Option; provided,
   further, however, that, in the case of a 10% Share Owner, the exercise price
   of an Incentive Stock Option shall not be less than one hundred ten percent
   (110%) of the Fair Market Value of the Common Stock on the grant date.

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

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

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

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

     6.8 RELOAD PROVISION. The Committee may provide in any Award Agreement that
   if the optionee exercises a Stock Option using shares held for at least six
   (6) months and/or elects to have shares withheld to satisfy the Company's
   withholding obligations, the optionee will then

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   receive a new option covering the number of shares used to exercise and/or
   satisfy withholding obligations. Such option will have a per share exercise
   price equal to the then Fair Market Value of the shares, and will be subject
   to such terms and conditions as the Committee, in its sole discretion, may
   determine. Nothing in this Section 6.8 will restrict the Committee's ability
   to fix or limit in an Award Agreement the maximum number of shares available
   under any new option granted pursuant to an Award Agreement.

   7. STOCK APPRECIATION RIGHTS.

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

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

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

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

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

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

   8. RESTRICTED SHARES.

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     8.1 TERMS AND CONDITIONS. Grants of Restricted Shares shall be subject to
   the terms and conditions set forth in this Section 8 and any additional terms
   and conditions, not inconsistent with the express terms and provisions of the
   Plan, as the Committee shall set forth in the relevant Award Agreement.
   Restricted Shares may be granted alone or in addition to any other Awards
   under the Plan. Subject to the terms of the Plan, the Committee shall
   determine the number of Restricted Shares to be granted to a Participant and
   the Committee may provide or impose different terms and conditions on any
   particular Restricted Share grant made to any Participant. With respect to
   each Participant receiving an Award of Restricted Shares, there shall be
   issued a stock certificate (or certificates) in respect of such Restricted
   Shares. Such stock certificate(s) shall be registered in the name of such
   Participant, shall be accompanied by a stock power duly executed by such
   Participant, and shall bear, among other required legends, the following
   legend:

     "The transferability of this certificate and the shares of stock
     represented hereby are subject to the terms and conditions (including,
     without limitation, forfeiture events) contained in the Kellogg Company
     2001 Long-Term Incentive Plan and an Award Agreement entered into between
     the registered owner hereof and Kellogg Company. Copies of such Plan and
     Award Agreement are on file in the office of the Secretary of Kellogg
     Company, One Kellogg Square, Battle Creek, MI 49016. Kellogg Company will
     furnish to the recordholder of the certificate, without charge and upon
     written request at its principal place of business, a copy of such Plan and
     Award Agreement. Kellogg Company reserves the right to refuse to record the
     transfer of this certificate until all such restrictions are satisfied, all
     such terms are complied with and all such conditions are satisfied."

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

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

                                       7
<PAGE>   8
     8.3 RESTRICTION PERIOD. In accordance with Sections 8.1 and 8.2 of the Plan
   and unless otherwise determined by the Committee (in its sole discretion) at
   any time and from time to time, Restricted Shares shall only become
   unrestricted and vested in the Participant in accordance with such vesting
   schedule relating to such Restricted Shares, if any, as the Committee may
   establish in the relevant Award Agreement (the "Restriction Period"). During
   the Restriction Period, such stock shall be and remain unvested and a
   Participant may not sell, assign, transfer, pledge, encumber or otherwise
   dispose of or hypothecate such Award. Upon satisfaction of the vesting
   schedule and any other applicable restrictions, terms and conditions, the
   Participant shall be entitled to receive payment of the Restricted Shares or
   a portion thereof, as the case may be, as provided in Section 8.4 of the
   Plan.

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

     8.5 SHARE OWNER RIGHTS. A Participant shall have, with respect to the
   shares of Common Stock underlying a grant of Restricted Shares, all of the
   rights of a share owner of such stock (except as such rights are limited or
   restricted under the Plan or in the relevant Award Agreement). Any stock
   dividends paid in respect of unvested Restricted Shares shall be treated as
   additional Restricted Shares and shall be subject to the same restrictions
   and other terms and conditions that apply to the unvested Restricted Shares
   in respect of which such stock dividends are issued.

   9. PERFORMANCE UNITS.

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

     9.2 PERFORMANCE UNIT GRANTS. A Performance Unit is an Award of units (with
   each unit representing such monetary amount as is designated by the Committee
   in the Award Agreement) granted to a Participant, subject to such terms and
   conditions as the Committee deems appropriate, including, without limitation,
   the requirement that the Participant forfeit such units (or a portion
   thereof) in the event certain performance criteria or other conditions are
   not met within a designated period of time.

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

     9.4 PERFORMANCE GOALS AND PERFORMANCE PERIODS. Participants receiving a
   grant of Performance Units shall only earn into and be entitled to payment in
   respect of such Awards if the Company and/or the Participant achieves certain
   performance goals (the "Performance Goals") during and in respect of a
   designated performance period (the "Performance Period"). The

                                       8
<PAGE>   9
   Performance Goals and the Performance Period shall be established by the
   Committee, in its sole discretion. The Committee shall establish Performance
   Goals for each Performance Period prior to, or as soon as practicable after,
   the commencement of such Performance Period. The Committee shall also
   establish a schedule or schedules for Performance Units setting forth the
   portion of the Award which will be earned or forfeited based on the degree of
   achievement, or lack thereof, of the Performance Goals at the end of the
   relevant Performance Period. In setting Performance Goals, the Committee may
   use, but shall not be limited to, such measures as total share owner return,
   return on equity, net earnings growth, sales or revenue growth, cash flow,
   comparisons to peer companies, individual or aggregate Participant
   performance or such other measure or measures of performance as the
   Committee, in its sole discretion, may deem appropriate. Such performance
   measures shall be defined as to their respective components and meaning by
   the Committee (in its sole discretion). During any Performance Period, the
   Committee shall have the authority to adjust the Performance Goals and/or the
   Performance Period in such manner as the Committee, in its sole discretion,
   deems appropriate at any time and from time to time.

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

   10.DEFERRAL ELECTIONS/TAX REIMBURSEMENTS/OTHER PROVISIONS.

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

     10.2 PERFORMANCE-BASED AWARDS. Performance Units, Restricted Shares, and
   other Awards subject to performance criteria that are intended to be
   "qualified performance-based compensation" within the meaning of Section
   162(m) of the Code shall be paid solely on account of the attainment of one
   or more preestablished, objective performance goals within the meaning of
   Section 162(m) and the regulations thereunder. Until otherwise determined by
   the Committee, the performance goals shall be the attainment of
   preestablished levels of any of net income, market price per share, earnings
   per share, return on equity, return on capital employed and/or cash flow. The
   payout of any such Award to a Covered Employee may be reduced, but not
   increased, based on the degree of attainment of other performance criteria or
   otherwise at the

                                       9
<PAGE>   10
   discretion of the Committee. For purposes of the Plan, "Covered Employee" has
   the same meaning as set forth in Section 162(m) of the Code.

     10.3 MAXIMUM YEARLY AWARDS. The maximum annual Common Stock amounts in this
   Section 10.3 are subject to adjustment under Section 13.2 and are subject to
   the Plan maximum under Section 4.2.

     10.3.1 PERFORMANCE-BASED AWARDS. The maximum amount payable in respect of
   Performance Units, performance-based Restricted Shares and other Awards in
   any calendar year may not exceed 2,600,000 shares of Common Stock (or the
   then equivalent Fair Market Value thereof) in the case of any individual
   Participant. Further, the aggregate number of Performance Units,
   performance-based Restricted Shares and other Awards (excluding Awards
   granted under Section 6 and Section 7) granted to Participants under this
   Plan shall not exceed 2,750,000.

     10.3.2 STOCK OPTIONS AND SARS. Each individual Participant may not receive
   in any calendar year Awards of Options or Stock Appreciation Rights exceeding
   2,600,000 underlying shares of Common Stock.

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

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

                                       10
<PAGE>   11
   13.CHANGES IN CAPITALIZATION AND OTHER MATTERS.

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

     13.2 RECAPITALIZATION ADJUSTMENTS. If the Board determines that any
   dividend or other distribution (whether in the form of cash, Common Stock,
   other securities, or other property), recapitalization, stock split, reverse
   stock split, reorganization, merger, consolidation, split-up, spin-off,
   combination, repurchase, Change of Control or exchange of Common Stock or
   other securities of the Company, or other corporate transaction or event
   affects the Common Stock such that an adjustment is determined by the Board,
   in its sole discretion, to be necessary or appropriate in order to prevent
   dilution or enlargement of benefits or potential benefits intended to be made
   available under the Plan, the Board may, in such manner as it in good faith
   deems equitable, adjust any or all of (i) the number of shares of Common
   Stock or other securities of the Company (or number and kind of other
   securities or property) with respect to which Awards may be granted, (ii) the
   maximum limitation upon Options, Performance Units and performance-based
   Restricted Shares that may be granted to any individual participant, (iii)
   the number of shares of Common Stock or other securities of the Company (or
   number and kind of other securities or property) subject to outstanding
   Awards, and (iv) the exercise price with respect to any Stock Option, or make
   provision for an immediate cash payment to the holder of an outstanding Award
   in consideration for the cancellation of such Award.

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

                                       11
<PAGE>   12
   of the Fair Market Value, as determined by the Board, of the Common Stock
   underlying any unexercised Stock Options or Stock Appreciation Rights
   (whether then exercisable or not) over the aggregate exercise price of such
   unexercised Stock Options and/or Stock Appreciation Rights.

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

      14.  CHANGE OF CONTROL PROVISIONS.

     14.1 IMPACT OF EVENT. Notwithstanding any other provision of the Plan to
   the contrary, in the event of a Change in Control:

      (i)   Any Stock Options and Stock Appreciation Rights outstanding as of
            the date such Change in Control is determined to have occurred, and
            which are not then exercisable and vested, shall become fully
            exercisable and vested;

      (ii)  The restrictions and deferral limitations applicable to any
            Restricted Shares shall lapse, and such Restricted Shares shall
            become free of all restrictions and become fully vested and
            transferable;

      (iii) All Performance Units shall be considered to be earned and payable
            in full, and any deferral or other restriction shall lapse and such
            Performance Units shall be settled in cash as promptly as is
            practicable; and

      (iv)  The Committee may also make additional adjustments and/or
            settlements of outstanding Awards as it deems appropriate and
            consistent with the Plan's purposes.

     14.2 DEFINITION OF CHANGE IN CONTROL. For purposes of the Plan, a "Change
   in Control" shall mean the happening of any of the following events:

      (i)   An acquisition after the date hereof by any individual, entity or
            group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
            Exchange Act) (a "Person") of beneficial ownership (within the
            meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
            more of either (a) the then outstanding shares of common stock of
            the Company (the "Outstanding Company Common Stock") or (b) the
            combined voting power of the then outstanding voting securities of
            the Company entitled to vote generally in the election of directors
            (the "Outstanding Company Voting Securities"); excluding, however,
            the following: (1) any acquisition directly from the Company, other
            than an acquisition by virtue of the exercise of a conversion
            privilege unless the security being so converted was itself acquired
            directly from the Company or approved by the Incumbent Board (as
            defined below), (2) any acquisition by the Company, (3) any
            acquisition by any employee benefit plan (or related trust)
            sponsored or maintained by the Company or any entity controlled by
            the Company, (4) any acquisition by an underwriter temporarily
            holding Company securities pursuant to

                                       12
<PAGE>   13
            an offering of such securities, or (5) any acquisition pursuant to a
            transaction which complies with clauses (1), (2) and (3) of
            subsection (iii) of this Section 14.2; or

      (ii)  A change in the composition of the Board such that the individuals
            who, as of the effective date of the Plan, constitute the Board
            (such Board shall be hereinafter referred to as the "Incumbent
            Board") cease for any reason to constitute at least a majority of
            the Board; provided, however, for purposes of this Section, that any
            individual who becomes a member of the Board subsequent to the
            effective date of the Plan, whose election, or nomination for
            election by the Company's share owners, was approved by a vote of at
            least a majority of those individuals who are members of the Board
            and who were also members of the Incumbent Board (or deemed to be
            such pursuant to this proviso), either by a specific vote or by
            approval of the proxy statement of the Company in which such person
            is named as a nominee for director, without written objection to
            such nomination shall be considered as though such individual were a
            member of the Incumbent Board; but, provided further, that any such
            individual whose initial assumption of office occurs as a result of
            either an actual or threatened election contest with respect to the
            election or removal of directors or other actual or threatened
            solicitation of proxies or consents by or on behalf of a Person
            other than the Board shall not be so considered as a member of the
            Incumbent Board; or

      (iii) Consummation of a reorganization, merger or consolidation (or
            similar transaction), a sale or other disposition of all or
            substantially all of the assets of the Company, or the acquisition
            of assets or stock of another entity ("Corporate Transaction"); in
            each case, unless immediately following such Corporate Transaction
            (1) all or substantially all of the individuals and entities who are
            the beneficial owners, respectively, of the Outstanding Company
            Common Stock and Outstanding Company Voting Securities immediately
            prior to such Corporate Transaction will beneficially own, directly
            or indirectly, more than 60% of, respectively, the outstanding
            shares of common stock, and the combined voting power of the then
            outstanding voting securities entitled to vote generally in the
            election of directors, as the case may be, of the corporation
            resulting from such Corporate Transaction (including, without
            limitation, a corporation which as a result of such transaction owns
            the Company or all or substantially all of the Company's assets
            either directly or through one or more subsidiaries) in
            substantially the same proportions as their ownership, immediately
            prior to such Corporate Transaction, of the Outstanding Company
            Common Stock and Outstanding Company Voting Securities, as the case
            may be, (2) no Person (other than the Company, any employee benefit
            plan (or related trust) of the Company or such corporation resulting
            from such Corporate Transaction) will beneficially own, directly or
            indirectly, 20% or more of, respectively, the outstanding shares of
            common stock of the corporation resulting from such Corporate
            Transaction or the combined voting power of the outstanding voting
            securities of such corporation entitled to vote generally in the
            election of directors, except to the extent that such ownership
            existed prior to the Corporate Transaction, and (3) individuals who
            were members of the Incumbent Board at the time of the Board's
            approval of the execution of the initial agreement providing for
            such Corporate Transaction will constitute at least a majority of
            the members of the board of directors of the corporation resulting
            from such Corporate Transaction; or

                                       13
<PAGE>   14
      (iv)  The approval by the share owners of the Company of a complete
            liquidation or dissolution of the Company.

     14.3 CHANGE IN CONTROL CASH-OUT. Notwithstanding any other provision of the
   Plan, during the 60-day period from and after a Change in Control (the
   "Exercise Period"), if the Committee shall determine at the time of grant or
   thereafter, a Participant shall have the right, whether or not the Option is
   fully exercisable in lieu of the payment of the option price for the shares
   of Common Stock being purchased under the Option and by giving notice to the
   Company, to elect (within the Exercise Period) to surrender all or part of
   the Option to the Company and to receive cash, within 30 days of such
   election, in an amount equal to the amount by which the Change in Control
   Price (as defined below) per share of Common Stock on the date of such
   election shall exceed the exercise price per share of Common Stock under the
   Option (the "Spread") multiplied by the number of shares of Common Stock
   granted under the Option as to which the right granted under this Section
   14.3 shall have been exercised. Notwithstanding the foregoing, if any right
   granted pursuant to this Section 14.3 would make a Change in Control
   transaction ineligible for pooling-of-interests accounting under APB No. 16
   that but for the nature of such grant would otherwise be eligible for such
   accounting treatment, the Committee shall have the ability to substitute for
   the cash payable pursuant to such right Common Stock with a Fair Market Value
   (as of the date of delivery of such stock) equal to the cash that would
   otherwise be payable hereunder or, if necessary to preserve such accounting
   treatment, otherwise modify or eliminate such right.

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

   15. AMENDMENT, SUSPENSION, AND TERMINATION.

     15.1 IN GENERAL. The Board may suspend or terminate the Plan (or any
   portion thereof) at any time and may amend the Plan at any time and from time
   to time in such respects as the Board may deem advisable to insure that any
   and all Awards conform to or otherwise reflect any change in applicable laws
   or regulations, or to permit the Company or the Participants to benefit from
   any change in applicable laws or regulations, or in any other respect the
   Board may deem to be in the best interests of the Company or any Subsidiary.
   No such amendment, suspension or termination shall (a) materially adversely
   affect the rights of any Participant under any outstanding Stock Options,
   Stock Appreciation Rights, Performance Units, or Restricted Share grants,
   without the consent of such Participant, (b) make any change that would
   disqualify the Plan, or any other plan

                                       14
<PAGE>   15
   of the Company or any Subsidiary intended to be so qualified, from the
   benefits provided under Section 422 of the Code, or any successor provisions
   thereto, or (c) revise the exercise price of any outstanding Stock Option or
   increase the number of shares available for Awards pursuant to Section 4.2
   without share owner approval.

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

   16. MISCELLANEOUS.

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

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

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

                                       15
<PAGE>   16
   fiduciary relationship of any kind between the Company, any Subsidiary and/or
   any such Participant, any beneficiary thereof or any other person.

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

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

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

                                       16
<PAGE>   17
     16.7 AWARD AGREEMENTS. Each Participant receiving an Award under the Plan
   shall enter into an Award Agreement with the Company in a form specified by
   the Committee. Each such Participant shall agree to the restrictions, terms
   and conditions of the Award set forth therein and in the Plan.

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

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

     16.10 LOANS. Subject to applicable law, the Committee may provide, pursuant
   to Plan rules, for the Company or any Subsidiary to make loans to
   Participants to finance the exercise price of any Stock Options, as well as
   the withholding obligation under Section 16.1 of the Plan and/or the
   estimated or actual taxes payable by the Participant as a result of the
   exercise of such Stock Option and the Committee may prescribe the terms and
   conditions of any such loan.

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

     16.12 EFFECTIVE DATE. The Plan shall be effective upon its approval by the
   Board and adoption by the Company, subject to the approval of the Plan by the
   Company's share owners in accordance with Sections 162(m) and 422 of the
   Code.

   As adopted by the Board on February 18, 2000.

                                                   KELLOGG COMPANY
                                                   One Kellogg Square
                                                   Battle Creek, MI 49016-3599

                                       17

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