0000950124-95-002520.txt : 19950815
0000950124-95-002520.hdr.sgml : 19950815
ACCESSION NUMBER: 0000950124-95-002520
CONFORMED SUBMISSION TYPE: 10-Q
PUBLIC DOCUMENT COUNT: 5
CONFORMED PERIOD OF REPORT: 19950630
FILED AS OF DATE: 19950814
SROS: NYSE
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: KELLOGG CO
CENTRAL INDEX KEY: 0000055067
STANDARD INDUSTRIAL CLASSIFICATION: GRAIN MILL PRODUCTS [2040]
IRS NUMBER: 380710690
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-Q
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-04171
FILM NUMBER: 95562808
BUSINESS ADDRESS:
STREET 1: ONE KELLOGG SQ
STREET 2: P O BOX 3599
CITY: BATTLE CREEK
STATE: MI
ZIP: 49016
BUSINESS PHONE: 6169612000
MAIL ADDRESS:
STREET 1: ONE KELLOGG SQUARE
STREET 2: P O BOX 3599
CITY: BATTLE CREEK
STATE: MI
ZIP: 49016
10-Q
1
FORM 10-Q
1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number 1-4171
KELLOGG COMPANY
State of Incorporation--Delaware IRS Employer Identification No.38-0710690
One Kellogg Square, P.O. Box 3599, Battle Creek, MI 49016-3599
Registrant's telephone number: 616-961-2000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--------- ----------
Common Stock outstanding July 31, 1995 - 219,204,635 shares
2
KELLOGG COMPANY
INDEX
Page
----
PART I - Financial Information
Item 1:
Consolidated Balance Sheet - June 30, 1995 and December 31, 1994 2
Consolidated Earnings - three and six months ended June 30, 1995 3
Consolidated Statement of Cash Flows - six months ended June 30,
1995 and 1994 4
Notes to Consolidated Financial Statements 5
Item 2:
Management's Discussion and Analysis of Financial Condition
and Results of Operations 6-10
PART II - Other Information
Item 4:
Submission of Matters to a Vote of Security Holders 11-12
Item 6:
Exhibits and Reports on Form 8-K 12
Signatures 13
Exhibit Index 14
1
3
CONSOLIDATED BALANCE SHEET
================================================================================
KELLOGG COMPANY AND SUBSIDIARIES JUNE 30, December 31,
(millions) 1995 1994
(unaudited) *
--------------------------------------------------------------------------------
CURRENT ASSETS
Cash and temporary investments $377.1 $266.3
Accounts receivable, net 648.6 564.5
Inventories 408.7 396.3
Other current assets 212.3 206.4
--------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 1,646.7 1,433.5
PROPERTY, net of accumulated depreciation
of $1,857.5 and $1,707.7 2,923.2 2,892.8
INTANGIBLE ASSETS 3.6 4.1
OTHER ASSETS 173.9 136.9
--------------------------------------------------------------------------------
TOTAL ASSETS $4,747.4 $4,467.3
================================================================================
CURRENT LIABILITIES
Current maturities of long-term debt $1.7 $0.9
Notes payable 342.1 274.8
Accounts payable 353.7 334.5
Income taxes 87.0 72.0
Accrued liabilities 588.3 503.0
--------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 1,372.8 1,185.2
LONG-TERM DEBT 718.5 719.2
NONPENSION POSTRETIREMENT BENEFITS 511.5 486.8
DEFERRED INCOME TAXES AND OTHER LIABILITIES 286.9 268.6
SHAREHOLDERS' EQUITY
Common stock, $.25 par value 77.7 77.6
Capital in excess of par value 84.7 68.6
Retained earnings 3,974.5 3,801.2
Treasury stock, at cost (2,129.8) (1,980.6)
Currency translation adjustment (149.4) (159.3)
--------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 1,857.7 1,807.5
--------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $4,747.4 $4,467.3
================================================================================
*Condensed from audited financial statements.
See accompanying notes to consolidated financial statements.
2
4
CONSOLIDATED EARNINGS (Results are unaudited)
=========================================================================================================
KELLOGG COMPANY AND SUBSIDIARIES Three months ended June 30, Six months ended June 30,
(millions, except per share data) 1995 1994 1995 1994
---------------------------------------------------------------------------------------------------------
NET SALES $1,780.1 $1,616.9 $3,496.1 $3,228.1
---------------------------------------------------------------------------------------------------------
Cost of goods sold 819.7 728.7 1,589.0 1,460.7
Selling and administrative expense 676.0 627.1 1,299.9 1,207.2
Non-recurring charge 52.8 0.0 52.8 0.0
---------------------------------------------------------------------------------------------------------
OPERATING PROFIT 231.6 261.1 554.4 560.2
Interest expense 16.5 11.5 34.5 21.2
Other income (expense), net 5.7 (4.1) 16.3 4.0
---------------------------------------------------------------------------------------------------------
EARNINGS BEFORE INCOME TAXES 220.8 245.5 536.2 543.0
Income taxes 84.9 94.0 204.3 207.6
---------------------------------------------------------------------------------------------------------
NET EARNINGS $135.9 $151.5 $331.9 $335.4
=========================================================================================================
EARNINGS PER SHARE $.62 $.68 $1.51 $1.49
DIVIDENDS PER SHARE $.36 $.34 $.72 $.68
AVERAGE SHARES OUTSTANDING 219.7 224.7 220.4 225.9
---------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
3
5
CONSOLIDATED STATEMENT OF CASH FLOWS (Results are unaudited)
========================================================================================
KELLOGG COMPANY AND SUBSIDIARIES SIX MONTHS ENDED JUNE 30,
(millions) 1995 1994
----------------------------------------------------------------------------------------
OPERATING ACTIVITIES
Net earnings $331.9 $335.4
Items in net earnings not requiring (providing) cash:
Depreciation 137.0 122.8
Pre-tax gain on sale of subsidiaries - (21.1)
Deferred income taxes 4.5 3.2
Non-recurring charges, net of cash paid 43.7 -
Other 3.1 3.0
Pension contribution (61.0) (48.6)
Change in operating assets and liabilities 17.1 11.5
----------------------------------------------------------------------------------------
NET CASH PROVIDED FROM OPERATING ACTIVITIES 476.3 406.2
----------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Additions to properties (144.7) (161.0)
Proceeds from sale of subsidiaries - 83.8
Other 5.9 18.9
----------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (138.8) (58.3)
----------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Net borrowings of notes payable 67.3 148.9
Issuance of long-term debt - -
Reduction in long-term debt (0.2) (2.6)
Common stock repurchases (147.6) (206.2)
Cash dividends (158.6) (153.4)
Other 14.6 (0.2)
----------------------------------------------------------------------------------------
NET CASH USED IN FINANCING ACTIVITIES (224.5) (213.5)
----------------------------------------------------------------------------------------
Effect of exchange rate changes on cash (2.2) (0.7)
----------------------------------------------------------------------------------------
Increase in cash and temporary investments 110.8 133.7
Cash and temporary investments at beginning of period 266.3 98.1
----------------------------------------------------------------------------------------
CASH AND TEMPORARY INVESTMENTS AT END OF PERIOD $377.1 $231.8
========================================================================================
See accompanying notes to consolidated financial statements.
4
6
Notes To Consolidated Financial Statements
for the six months ended June 30, 1995
(Unaudited)
1. Accounting policies
The unaudited interim financial information included herein reflects the
adjustments (consisting solely of normal recurring adjustments) which are, in
the opinion of management, necessary for a fair presentation of the results of
operations, financial position, and cash flows for the periods presented. Such
interim information should be read in conjunction with the financial statements
and notes thereto contained on pages 15 to 28 of the Company's Annual Report.
The accounting policies used in preparing these financial statements are the
same as those summarized in the Company's Annual Report.
The results of operations for the six months ended June 30, 1995, are not
necessarily indicative of the results to be expected for other interim periods
or the full year.
2. Non-recurring charge
Operating profit for the six months ended June 30, 1995, includes a
non-recurring charge of $52.8 million ($33.0 million after tax or $.15 per
share) related to productivity and operational streamlining initiatives in the
U.S. and international locations. The charge primarily consists of costs
related to employee benefits and separation payments.
3. Other income/(expense)
Other income for the six months ended June 30, 1994, includes a gain of $21.1
million ($13.3 million after tax or $.06 per share) from the sale of the Mrs.
Smith's Frozen Foods pie business and other expense includes a charge of $20.5
million ($13.1 million after tax or $.06 per share) primarily from the initial
funding of the Kellogg's Corporate Citizenship Fund.
5
7
KELLOGG COMPANY
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of operations
Kellogg revenues are generated from the sale of ready-to-eat cereals and other
convenience foods in nearly 160 countries. The ready-to-eat cereal category
continued to exhibit volume growth around the world during the first half of
1995, with Kellogg continuing to demonstrate strong global leadership.
For the second quarter of 1995, the Company exhibited solid growth, reporting
double-digit increases in net sales, net earnings, and earnings per share,
excluding non-recurring charges. These strong results were based primarily on
volume growth combined with aggressive cost containment programs. Management
was especially pleased with the Company's cereal volume growth experienced in
the U.S. market during the quarter, where the industry category was actually
down versus a year ago, and the significant growth in other North American
convenience foods business, which reported a double-digit increase in volume
over last year.
Consolidated net sales increased 10% for the second quarter and 8% for the
first half of 1995 over the comparable periods of 1994, principally from volume
growth, product mix improvements, and higher selling prices.
The Company's total volume was up 6% for the quarter and 4% for the
year-to-date period versus the prior year. Cereal volume increased 3% for both
quarter and year-to-date periods. Cereal volume growth was strong in the
Company's major markets outside the U.S. with the exception of Germany and
Mexico. In Germany the Company faced pressure from softer economic conditions,
while in Mexico the significant currency devaluation coupled with domestic
price inflation resulted in lower volume and increased operating costs. The
Company's management team in Mexico has implemented an aggressive pricing and
cost containment program to offset the impact of these conditions. Volume for
the Company's U.S. ready-to-eat cereal business strengthened slightly during
both the second quarter and the year-to-date period. Other convenience foods
volume increased significantly for the quarter and the year-to-date period
primarily due to strong sales of new products in the North American market.
The gross profit margin for the quarter declined to 54.0% from 54.9% in 1994,
and 54.5% year-to-date, down from 54.8% last year. These declines were
primarily related to the other convenience foods product mix, as ready-to-eat
cereal margins actually improved slightly over 1994. The Company's
manufacturing operations experienced pressure from higher raw material and
packaging costs during the quarter. However, due to increasing plant
efficiencies and productivity improvements, combined with other factors, the
Company has been able to substantially offset the
6
8
negative impact on gross profit margins without passing higher costs through to
customers. Management continues to expect the gross profit margin for the full
year to be in line with 1994.
Selling and administrative expense increased 8% both for the second quarter and
the first half of 1995, but was in line with last year's expense, as measured
as a percentage of net sales. Selling and administrative expense as a
percentage of net sales was 38% for the quarter and 37% for the year-to-date
period, as compared to last year's 39% and 37%, respectively. Beginning in the
second quarter of 1994, a shift in the marketing investment mix occurred toward
advertising from promotion. This trend has continued through the first half of
1995. Management believes that this strategy of emphasizing advertising and
other brand building activities, combined with a strong new product program,
will assist in adding further value to the Company's brand portfolio, thereby
delivering long-term profitable growth.
Management's objective of maximizing shareholder value includes a constant
reassessment of its business strategies. This commitment to position the
Company for continued success was the basis of an announcement in February 1995
of a program to improve productivity and streamline cereal production
operations in the U.S. and certain foreign locations.
Based on final identification of the employees participating in these early
retirement and severance programs, combined with certain additional global
productivity initiatives implemented subsequent to the February announcement,
the Company reported a total non-recurring pre-tax charge during the quarter
of $52.8 million ($33.0 million after tax or $.15 per share). The total pre-tax
charge consists of $17 million of pension benefits, $7 million of retiree
health care accruals, with the balance representing severance payments and
other program-related cash outlays to occur during the balance of 1995 and
1996. These initiatives will eliminate 475 employee positions by the end of
1995, approximately 60% of which are salaried positions primarily in the U.S.
and Europe, with the remainder comprised of hourly workforce in foreign
locations. As a result of this charge, the Company expects to realize annual
pre-tax savings of approximately $20 million beginning in 1996.
Operating profit, excluding the non-recurring charge, increased 9% to $284
million for the quarter and 8% to $607 million, year-to-date. Operating
profit growth reflects the increase in net sales, combined with achieving a
relatively flat per-kilo cost structure for manufacturing and marketing
spending. This quarter, before the non-recurring charge, is the eighth in a
row with year-over-year increases in operating profit.
Other income for the first six months of 1994 includes a gain of $21.1 million
($13.3 million after tax or $.06 per share) from the sale of the Mrs. Smith's
Frozen Foods pie business. Other expense includes a charge of $20.5 million
($13.1 million after tax or $.06 per share), primarily from the initial funding
of the Kellogg's Corporate Citizenship Fund, a private trust established for
charitable donations.
Gross interest expense, prior to amounts capitalized, increased to $18.5
million and $38.3 million for the quarter and year-to-date period respectively,
from $13.2 million and $24.7 million for the
7
9
comparable periods of 1994, due to increased interest rates on short-term
borrowings. This increase in interest expense was substantially offset by
increases in interest income due to higher cash balances.
The Company's second quarter income tax rate was 38.5%. The rate, excluding
the non-recurring charge, was 38.3%, even with the prior year. The 1995 second
quarter tax rate was impacted unfavorably by 1.2 percentage points due to
recognition of an increase in the statutory rate in Australia, retroactive to
the beginning of 1995, partially offset by favorable adjustments in certain
other foreign locations. For the six months ended June 30, 1995, the income
tax rate was 38.1%. Excluding the non-recurring charge, the rate for the first
six months of 1995 was 38.0%, as compared to 38.2% for 1994. The Company
expects its effective income tax rate for 1995 to be between 37% and 38%.
Earnings per share were $.62 for the second quarter and $1.51 for the
year-to-date period. Earnings per share, excluding the non- recurring charge,
were $.77 for the quarter and $1.66 for the year-to-date period, up 13.2% and
11.4% respectively, from the comparable periods of 1994. Net earnings were
$135.9 million for the quarter, and $331.9 million for the year-to-date period.
Net earnings for the quarter, excluding the non-recurring charge, were $168.9
million, up $17.4 million or 11.5% over last year. Net earnings year-to-date
were $364.9 million, up $29.7 million or 8.9%, excluding non-recurring events
for both years.
Liquidity and capital resources
The financial condition of the Company remained strong during the first half of
1995.
Operations provided a strong, positive cash flow of $476.3 million, up 17% from
the prior year, principally due to higher net earnings, adjusted for the
non-cash components of non-recurring items, partially offset by increased
pension funding. The strong cash flow, combined with a program of issuing
commercial paper and maintaining worldwide credit facilities, provides adequate
liquidity to meet the Company's operational needs. The Company maintains credit
facilities with banking institutions in the United States and other countries
where it conducts business. The ratio of current assets to current liabilities
was 1.2:1 as of June 30, 1995, unchanged from the ratio at December 31, 1994.
Capital spending for the first six months of 1995 was $144.7 million, compared
with $161.0 million during the first six months of 1994. Although slightly
behind spending levels as of June 30, 1994, management expects total year 1995
capital spending to be about equal to 1994's level at approximately $350
million. The steady level of capital expenditures reflects the Company's
application of value-based management principles and the ongoing strategy of
improving return on invested capital. During the second quarter of 1995, the
Company broke ground for the construction of a new research center, the W. K.
Kellogg Institute, located in Battle Creek, Michigan. This facility is
expected to be completed in 1997 with a total investment of approximately $65
million. During the third quarter of 1995, production is expected to begin at
two new cereal facilities located in Pilar, Argentina and
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10
Guangzhou, China.
As of June 30, 1995, the Company had spent $147.6 million to purchase
approximately 2.5 million shares of its common stock. Since June of 1994, the
Company has purchased approximately 4.7 million shares, or 2.1% of the total
shares outstanding as of that date, contributing an average of $.03 per quarter
to earnings per share growth over that time period. Stock repurchases are made
under plans authorized by the Company's Board of Directors. The total
authorized purchase amount remaining for 1995 is $177.8 million. Market
conditions permitting, management intends to fully utilize this authorization
by the end of 1995.
Long-term debt outstanding at June 30, 1995, consisted principally of $200
million of three-year notes issued in 1994, $200 million of five-year notes
issued in 1993, and $300 million of five-year notes issued in 1992. Short-term
debt outstanding consisted principally of commercial paper. The Company
continues to enjoy the highest available debt ratings on both its long-term
debt and commercial paper.
The Company's net debt position (long-term debt plus notes payable less cash
and temporary investments) at June 30, 1995, was $685.2 million, down $43.4
million from December 31, 1994. The ratio of debt to total capitalization was
36%, unchanged from December 31, 1994.
At June 30, 1995, the Company had available an unused "shelf registration" of
$200 million with the Securities and Exchange Commission to provide for the
issuance of debt in the United States. The proceeds of such an offering would
be added to the Company's working capital and be available for general
corporate purposes.
Dividends paid per share of common stock increased 6% to $.72 during the first
six months of 1995. The Company has announced an increase in the quarterly
dividend to $.39 from $.36 per share. The new dividend is payable September
15, 1995, to shareholders of record at the close of business on September 1,
1995.
LOOKING FORWARD
Management is not aware of any adverse trends that would materially affect the
Company's strong financial position. Should suitable investment opportunities
or working capital needs arise that would require additional financing,
management believes that the Company's triple A credit rating, strong balance
sheet, and its solid earnings history provides a base for obtaining additional
financial resources at competitive rates and terms.
As part of the Company's on-going program to streamline its operations, improve
productivity, and reduce costs, on August 1, 1995, management announced its
intent to begin discussions with union leadership regarding a proposed shutdown
of the Company's cereal manufacturing facility in San Leandro, California, by
the end of 1995. This announcement was as a result of an extensive
9
11
examination of the business which led management to conclude that the Company
needed to reduce cereal manufacturing capacity in order to remain competitive
in the North American market. A final decision on the proposed shutdown will
be made following a 60 day period during which management will receive input
from the union representing employees at the facility.
The proposed shutdown of this facility would eliminate about 8% of the
Company's U.S. cereal manufacturing capacity and approximately 325 salaried and
hourly employee positions, and would be expected to generate annual pre-tax
savings of $20-30 million. Due to the preliminary state of union negotiations,
the Company is unable to estimate, at this time, the full cost of closure of
this facility. However, provided this plan is implemented as currently
proposed, it is anticipated that asset write-offs and related removal costs of
$60-$70 million would be included as part of a pre-tax charge to be reported in
either the third or fourth quarter of this year.
The announcement of this plan is an important step in more effectively
utilizing the capacity of the North American operations, lowering the
manufacturing cost structure, and providing greater flexibility in the highly
competitive North American market. Additionally, the Company will continue to
focus on potential worldwide efficiency initiatives that improve its
manufacturing, marketing, logistics and customer service processes while
lowering costs and more effectively utilizing human and financial resources.
10
12
KELLOGG COMPANY
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Company's Annual Meeting of Shareholders was held on April 21,
1995.
Represented at the Meeting, either in person or by proxy were
196,624,144 voting shares, of a total 221,096,969 voting shares
outstanding. The matters voted upon at the Meeting are described in
(c) below.
(c) (i) To elect four (4) directors to serve for three-year (3) terms
expiring at the 1998 Annual Meeting of Stockholders or until
their respective successors are elected and qualified. All
nominees are named below.
Gordon Gund
Votes for Election - 196,019,643
Votes Withheld - 604,501
William E. LaMothe
Votes for Election - 195,991,771
Votes Withheld - 632,373
Russell G. Mawby
Votes for Election - 196,051,181
Votes Withheld - 572,963
Ann McLaughlin
Votes for Election - 195,954,401
Votes Withheld - 669,743
There were no votes against, abstentions, or broker non-votes
with respect to the election of any nominee named above.
(ii) To approve adoption of the Senior Executive Officer
Performance Bonus Plan.
Votes for Proposal - 186,325,592
Votes Against Proposal - 8,335,526
Votes Abstaining - 1,963,026
Broker Non-votes - 0
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Votes Withheld - 0
(iii) To approve adoption of an Amendment to the Certificate of
Incorporation to provide that the size of the Board of
Directors shall not be less than seven (7) nor greater than
fifteen (15) persons.
Votes for Proposal - 192,996,963
Votes Against Proposal - 2,289,232
Votes Abstaining - 1,336,048
Broker Non-votes - 1,901
Votes Withheld - 0
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
3.01 - Amended Restated Certificate of Incorporation of the
Company, as amended through April 21, 1995.
3.02 - Bylaws of the Company, as amended through April 21,
1995.
4.01 - There is no instrument with respect to long-term debt
of the Company that involves indebtedness or securities
authorized thereunder exceeding ten percent of the total
assets of the Company and its subsidiaries on a consolidated
basis. The Company agrees to file a copy of any instrument or
agreement defining the rights of holders of long-term debt of
the Company upon request of the Securities and Exchange
Commission.
10.01 - Senior Executive Officers' Performance Bonus Plan.
27.01- Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter for which
this report is filed.
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14
KELLOGG COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KELLOGG COMPANY
/s/ J. R. Hinton
---------------------------------------
J.R. Hinton
Principal Financial Officer;
Senior Vice President - Administration
/s/ A. Taylor
---------------------------------------
A. Taylor
Principal Accounting Officer;
Vice President and Corporate Controller
Date: August 10, 1995
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15
KELLOGG COMPANY
EXHIBIT INDEX
Number Description Page
------ ----------- ----
3.01 Amended Restated Certificate of Incorporation of
the Company, as amended through April 21, 1995 15
3.02 Bylaws of the Company, as amended through
April 21, 1995 25
10.01 Senior Executive Officers' Performance Bonus Plan 42
27.01 Financial Data Schedule 46
14
EX-3.01
2
EXHIBIT 3.01
1
KELLOGG COMPANY
AMENDED RESTATED
CERTIFICATE OF
INCORPORATION
(WITH ALL AMENDMENTS THROUGH APRIL 21, 1995)
FIRST
The name of this corporation is KELLOGG COMPANY.
SECOND
Its registered office, in the State of Delaware, is located at No. 100 West
Tenth Street, in the City of Wilmington, County of New Castle. The name and
address of its registered agent is The Corporation Trust Company, Corporation
Trust Center, 1209 Orange Street, Wilmington, Delaware.
THIRD
The purpose of the Corporation is to engage in any lawful act or activity for
which corporations may be now or hereafter organized under the General
Corporation Law of Delaware.
FOURTH
The total number of shares of capital stock which this Corporation shall have
authority to issue is 330,000,000 shares of common stock of the par value of
$0.25 per share. Each share of common stock, $0.25 par value per share, of
this Corporation, issued and held of record at the close of business on
December 4, 1991, including shares held by this Corporation as treasury shares,
shall automatically be converted at such time into two validly issued, fully
paid and nonassessable shares of common stock, $0.25 par value per share. A
statement of the designations, dividend rights, voting powers, preferences and
rights, and the qualifications, limitations or restrictions thereof, of the
shares of stock which the corporation shall be authorized to issue, is as
follows:
COMMON STOCK
1. DIVIDENDS.
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2
Dividends may be paid upon the common stock as and when declared by the Board
of Directors out of funds legally available for the payment of dividends.
2. VOTING POWERS.
The holders of the common stock shall have the exclusive right to vote for
the election of Directors and for all other purposes, each holder of common
stock being entitled to one vote for each share thereof held.
3. PREEMPTIVE RIGHTS.
No holder of stock of the Corporation shall have any preemptive right to
subscribe for, purchase, or otherwise acquire shares of stock of the
Corporation of any class, whether now or hereafter authorized, nor shall any
holder of stock of the Corporation have any preemptive right to subscribe for,
purchase, or otherwise acquire bonds, notes or other securities, whether or not
convertible, into shares of stock of the Corporation of any class; and the
Board of Directors may, from time-to-time, and at any time, cause shares of
stock of the Corporation of any class to be issued, sold or otherwise disposed
of at such price or prices and upon such terms as the Board of Directors may
determine.
4. LIQUIDATION RIGHTS.
Upon dissolution, liquidation or winding up of the Corporation, whether
voluntary or involuntary, the net assets of the Corporation shall be
distributed ratably to the holders of the common stock.
5. LIABILITY TO FURTHER CALL OR ASSESSMENT.
The stock heretofore issued shall be fully paid and nonassessable.
6. FRACTIONAL SHARES.
No fractional shares of any class of stock shall be issued.
FIFTH
The number of shares with which this Corporation will commence business is
ten (10) shares of common stock, which shares are without nominal or par value.
SIXTH
This Corporation is to have perpetual existence.
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3
SEVENTH
The private property of the stockholders shall not be subject to the payment
of corporate debts to any extent whatever.
EIGHTH
The Corporation may, in its Bylaws, confer powers upon its Directors in
addition to the powers and authorities expressly conferred upon them by
statute.
NINTH
This Restated Certificate of Incorporation, as amended, shall be subject to
alteration, amendment or repeal, and new provisions thereof may be adopted by
the affirmative vote of the holders of not less than a majority of the
outstanding shares of capital stock entitled to vote generally in the election
of Directors (such outstanding shares hereinafter referred to collectively as
the "Voting Stock"), voting together as a single class, at any regular or
special meeting of the stockholders (but only if notice of the proposed change
be contained in the notice to the stockholders of the proposed meeting).
Notwithstanding the foregoing and in addition to any other requirements of
applicable law, the alteration, amendment or repeal of, or the adoption of any
provision inconsistent with, this Article NINTH or Article TENTH, ELEVENTH or
TWELFTH of this Restated Certificate of Incorporation, as amended, shall
require the affirmative vote of the holders of not less than two-thirds of the
voting power of all shares of the Voting Stock, voting together as a single
class, at any regular or special meeting of the stockholders.
The Bylaws of this Corporation shall be subject to alteration, amendment or
repeal, and new bylaws may be adopted (i) by the affirmative vote of the
holders of not less than a majority of the voting power of all shares of the
Voting Stock, voting together as a single class, at any regular or special
meeting of the stockholders (but only if notice of the proposed change be
contained in the notice to the stockholders of the proposed meeting), or (ii)
by the affirmative vote of not less than a majority of the members of the Board
of Directors at any meeting of the Board of Directors at which there is a
quorum present and voting; provided, that any alteration, amendment or repeal,
or the adoption of any provision inconsistent with Article II, Section 2 or
Section 6, or Article III, Section 1, Section 2 or Section 5, or Article XIV,
Section 1 of the Bylaws, shall require, in the case of clause (i), the
affirmative vote of the holders of not less than two-thirds of the voting power
of all shares of the Voting Stock, voting together as a single class, at any
regular or special meeting of the stockholders, or, in the case of clause (ii),
the affirmative vote of such number of Directors constituting not less than
two-
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4
thirds of the total number of directorships fixed by a resolution adopted by
the Board of Directors pursuant to Article TENTH of this Restated Certificate
of Incorporation, as amended, whether or not such directorships are filled at
the time (such total number of directorships hereinafter referred to as the
"Full Board").
TENTH
The number of Directors of this Corporation shall be not less than twelve
(12) nor more than eighteen (18). The exact number of Directors within such
limitations shall be fixed from time-to-time by a resolution adopted by not
less than two-thirds of the Full Board (as defined in Article NINTH). At the
1986 Annual Meeting of Stockholders, the Directors shall be divided into three
classes, as nearly equal in number as possible, with the term of office of the
first class to expire at the 1987 Annual Meeting of Stockholders, the term of
office of the second class to expire at the 1988 Annual Meeting of
Stockholders, and the term of office of the third class to expire at the 1989
Annual Meeting of Stockholders. At each Annual Meeting of Stockholders
following such initial classification and election, the class of Directors
whose terms of office shall expire at such time shall be elected to hold office
for terms expiring at the third succeeding Annual Meeting of Stockholders
following their election. Each Director shall hold office until his successor
shall be elected and shall qualify.
Subject to the rights of the holders of any particular class or series of
equity securities of this Corporation, (i) newly created directorships
resulting from any increase in the total number of authorized Directors may be
filled by the affirmative vote of not less than two-thirds of the Directors
then in office, although less than a quorum, or by a sole remaining Director,
at any regular or special meeting of the Board of Directors, or by the
stockholders, in accordance with the Bylaws, and (ii) any vacancies on the
Board of Directors resulting from death, resignation, retirement,
disqualification, removal from office or other cause may be filled only by the
affirmative vote of not less than two-thirds of the Directors then in office,
although less than a quorum, or by a sole remaining Director, at any regular or
special meeting of the Board of Directors. Any Director so chosen shall hold
office for a term expiring at the Annual Meeting of Stockholders at which the
term of office of the class of Directors to which he or she has been elected
expires. No decrease in the total number of authorized Directors constituting
the Board of Directors shall shorten the term of office of any incumbent
Director.
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Subject to the rights of the holders of any particular class or series of
equity securities of this Corporation, any Director may be removed only for
cause and only by the affirmative vote of the holders of not less than
two-thirds of the voting power of all shares of Voting Stock, voting together
as a single class, at any regular or special meeting of the stockholders,
subject to any requirement for a larger vote contained in any applicable law,
this Corporation's Restated Certificate of Incorporation, as amended, or the
Bylaws.
ELEVENTH
Any action required or permitted to be taken by the stockholders of this
Corporation may be effected solely at an Annual or Special Meeting of
Stockholders duly called and held in accordance with law and this Corporation's
Restated Certificate of Incorporation, as amended, and may not be effected by
any consent in writing by such stockholders or any of them.
TWELFTH
Except as otherwise expressly provided in the immediately following paragraph:
(a) any merger or consolidation of this Corporation with or into any other
corporation other than a Subsidiary (as hereinafter defined); or
(b) any sale, lease, exchange or other disposition by this Corporation or
any Subsidiary of assets constituting all or substantially all of the
assets of this Corporation and its Subsidiaries taken as a whole, to
or with, any other person or entity in a single transaction or series
of related transactions; or
(c) any liquidation or dissolution of this Corporation;
shall require, in addition to any vote required by law or otherwise, the
affirmative approval of holders of not less than two-thirds of the voting power
of the Voting Stock.
The provisions of this Article TWELFTH shall not apply to any transaction
described in the immediately preceding paragraph if such transaction is
approved by a majority of the Continuing Directors (as hereinafter defined).
For purposes of this Article TWELFTH, (a) the term "Subsidiary" means any
corporation of which a majority of each class of equity security is
beneficially owned, directly or indirectly, by this Corporation; (b) the term
"Affiliate'', as used to indicate a relationship to a specified person, shall
mean a person who, directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with, such specified
person, except
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that, notwithstanding the foregoing, a Director of this Corporation shall not
be deemed to be an Affiliate of a specified person if such Director, in the
absence of being a stockholder, Director or officer of this Corporation, or a
Director or officer of any Subsidiary, would not be an Affiliate of such
specified person; (c) the term "Associate", as used to indicate a relationship
with a specified person, shall mean (i) any corporation, partnership or other
organization of which such specified person is an officer or partner, or
beneficially owns, directly or indirectly, ten percent or more of any class of
equity securities; (ii) any trust or other estate in which such specified
person has a substantial beneficial interest, or as to which such specified
person serves as trustee or in a similar fiduciary duty; (iii) any relative or
spouse of such specified person, or any relative of such spouse who has the
same home as such specified person; and (iv) any person who is a Director or
officer of such specified person or any of its Affiliates, except that
notwithstanding clauses (i), (ii), (iii) and (iv) above, a Director of this
Corporation shall not be deemed to be an Associate of a specified person if
such Director, in the absence of being a stockholder, Director or officer of
this Corporation, or a Director or officer of any Subsidiary, would not be an
Associate of such specified person; (d) the term "Transacting Entity" shall
mean (i) a corporation with which this Corporation merges or consolidates in a
transaction described in clause (a) of the first paragraph of this Article
TWELFTH; (ii) a person or entity to which this Corporation sells, leases,
exchanges or otherwise disposes of assets in a transaction described in clause
(b) of the first paragraph of this Article TWELFTH; or (iii) a person, other
than the Chief Executive Officer of this Corporation, or entity, who shall
propose a liquidation or dissolution described in clause (c) of the first
paragraph of this Article TWELFTH; and (e) the term "Continuing Director" shall
mean a Director who is neither an Affiliate nor an Associate of the Transacting
Entity, provided that if there be no Transacting Entity, each Director is a
Continuing Director.
THIRTEENTH
SECTION 1.
No person who is or was at any time a Director of the Corporation shall be
personally liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a Director; provided, however, that unless and
except to the extent otherwise permitted from time-to-time by applicable law,
the provisions of this Article shall not eliminate or limit the liability of a
Director (i) for any breach of the Director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the General Corporation Law of Delaware, (iv) for any
transaction from which the Director derived an improper personal benefit, or
(v) for any act or omission occurring prior to the date this Article becomes
effective.
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Any repeal or modification of the foregoing paragraph by the stockholders of
the Corporation shall not adversely affect any right or protection of a
Director of the Corporation existing at the time of such repeal or
modification.
SECTION 2.
(a). Right to Indemnification.
Each person who was or is made a party, or is threatened to be made a party
to, or is otherwise involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "Proceeding"), by
reason of the fact that he or she is or was a Director or officer of the
Corporation, where the basis of such Proceeding is an alleged action or
omission in an official capacity as such, shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by the Delaware
General Corporation Law as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such amendment permits
the Corporation to provide broader indemnification rights than such law
permitted the Corporation to provide prior to amendment) against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes, or penalties and amounts paid in settlement) reasonably incurred or
suffered by such indemnitee in connection therewith, and such indemnification
shall continue as to an indemnitee who has ceased to be a Director or officer,
and shall inure to the benefit of the indemnitee's heirs, executors and
administrators; provided, however. that except as provided in paragraph (b)
hereof with respect to proceedings to enforce rights to indemnification, the
Corporation shall indemnify any such indemnitee in connection with a Proceeding
(or part thereof) initiated by such indemnitee only if such Proceeding (or part
thereof) was authorized by the Board of Directors of the Corporation. The
right to indemnification conferred in this section shall be a contract right
and shall include the right to be paid by the Corporation the expenses incurred
in defending any such Proceeding in advance of its final disposition
(hereinafter an "Advancement of Expenses"); provided, however, that if the
Delaware General Corporation Law requires, an Advancement of Expenses incurred
by an indemnitee in his or her capacity as a Director or officer shall be made
only upon delivery to the Corporation of an undertaking, by or on behalf of
such indemnitee, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision, from which there is no further right to
appeal, that such indemnitee is not entitled to be indemnified for such
expenses under this section or otherwise (hereinafter an "Undertaking").
(b). Right of Indemnitee to Bring Suit.
If a claim under paragraph (a) of this section is not paid in full by the
Corporation within sixty days after a written claim has been received by the
Corporation, except in the case of a claim for an Advancement of Expenses, in
which case the applicable period shall be twenty days, the indemnitee
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8
may, at any time thereafter, bring suit against the Corporation to recover the
unpaid amount of the claim. If successful, in whole or in part, in any suit,
or in a suit brought by the Corporation to recover an Advancement of Expenses
pursuant to the terms of an Undertaking, the indemnitee shall be entitled to be
paid also the expense of prosecuting or defending such suit. In (i), any suit
brought by the indemnitee to enforce a right to indemnification hereunder (but
not in a suit brought by the indemnitee to enforce a right to an Advancement of
Expenses), it shall be a defense that, and (ii) any suit by the Corporation to
recover an Advancement of Expenses pursuant to the terms of an Undertaking, the
Corporation shall be entitled to recover such expenses upon a final
adjudication that the indemnitee has not met the applicable standard of conduct
set forth in the Delaware General Corporation Law. Neither the failure of the
Corporation (including its Board of Directors, independent legal counsel or its
stockholders) to have made a determination prior to the commencement of such
suit that indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set forth in
the Delaware General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel or its
stockholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met the
applicable standard of conduct, or, in the case of such a suit brought by the
indemnitee, be a defense to such suit. In any suit brought by the indemnitee
to enforce a right hereunder, or by the Corporation to recover an Advancement
of Expenses pursuant to the terms of an Undertaking, the burden of proving that
the indemnitee is not entitled to be indemnified or to such Advancement of
Expenses under this section or otherwise, shall be on the Corporation.
(c). Non-Exclusivity of Rights.
The rights to indemnification and to the Advancement of Expenses conferred in
this section shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, this Certificate of Incorporation,
bylaw agreement, vote of stockholders or disinterested Directors, or otherwise.
(d). Insurance.
The Corporation may maintain insurance, at its expense, to protect itself and
any Director, officer, employee or agent of the Corporation or another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expense, liability or loss under the
Delaware General Corporation Law.
(e). Other Indemnification.
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The Corporation may, to the extent authorized from time-to-time by the Board
of Directors, grant rights to indemnification and to the Advancement of
Expenses to any Director, officer, employee or agent of the Corporation,
whether or not acting in his or her capacity as such, or at the request of the
Corporation, to the fullest extent of the provisions of this section with
respect to the indemnification and Advancement of Expenses of Directors and
officers of the Corporation.
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CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
Kellogg Company, a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the corporation at a meeting
duly held October 21, 1994 adopted a resolution proposing and declaring the
amendment set forth below to the Corporation's Amended and Restated Certificate
of Incorporation to be advisable and calling for submission thereof to the
stockholders of the corporation at its next Annual Meeting. The resolution
setting forth the proposed amendment is as follows:
RESOLVED, That the Amended and Restated Certificate of
Incorporation of this Corporation be amended by changing the first
paragraph of Article TENTH thereof so that, as amended, said Article
shall be and read as follows:
TENTH
The number of Directors of this Corporation shall be
not less than seven (7) nor more than fifteen (15). The exact
number of Directors within such limitations shall be fixed
from time-to-time by a resolution adopted by not less than
two-thirds of the Full Board (as defined in Article NINTH).
The Directors shall be divided into three classes, as nearly
equal in number as possible, with a term of office of three
years, one class to expire each year. At each Annual Meeting
of Stockholders, the class of Directors whose terms of office
shall expire at such time shall be elected to hold office for
terms expiring at the third succeeding Annual Meeting of
Stockholders following their election. Each Director shall
hold office until his successor shall be elected and shall
qualify.
SECOND: That thereafter, at the Annual Meeting held April 21, 1995,
the necessary number of shares as required by the Certificate of Incorporation
and applicable bylaw were voted in favor of the amendment.
THIRD: That the aforesaid amendment was duly adopted in accordance
with the applicable provisions of Sections 222 and 242 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said Kellogg Company has caused this certificate
to be signed by Richard M. Clark, its Senior Vice President, General Counsel
and Secretary, this 8th day of May, 1995.
Kellogg Company
By /s/ Richard M. Clark
--------------------------
Richard M. Clark
Senior Vice President,
Attest: General Counsel and Secretary
/s/ Edward J. Gildea
-----------------------------------
Edward J. Gildea
Assistant Secretary
24
EX-3.02
3
EXHIBIT 3.02
1
KELLOGG COMPANY
BYLAWS
(AS AMENDED UP TO AND INCLUDING APRIL 21, 1995)
ARTICLE I
OFFICES
SECTION 1. OFFICES. The principal office shall be in the City
of Wilmington, County of New Castle, State of Delaware, and the name of the
resident agent in charge thereof is The Corporation Trust Company.
The Corporation may also have an office in the City of Battle
Creek, State of Michigan, and also offices at such other places as the Board of
Directors may, from time-to-time, appoint, or the business of this Corporation
may require.
ARTICLE II
STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. The Annual Meeting of
Stockholders of this Corporation may be held either within or without the State
of Delaware at a time and place to be designated by the Board of Directors.
Notice of such Annual Meeting shall be given by the Secretary, by mailing a
written or printed notice stating the place, day and hour of the meeting to
each stockholder of record entitled to vote at such meeting, at least ten (10)
days prior to the date of such meeting, at such stockholder's last known post
office address as the same appears upon the books of this Corporation. The
Chairman of the Board, or in such officer's absence or incapacity, a Vice
Chairman, or in such officer's absence or incapacity, the President and
Secretary of this Corporation, shall act as president and secretary,
respectively, of each stockholders' meeting unless it shall be otherwise
determined at the meeting.
SECTION 2. SPECIAL MEETINGS. Special meetings of the
stockholders may be held either within or without the State of Delaware and may
be called (i) by such number of Directors constituting not less than two-thirds
of the total number of directorships fixed by a resolution adopted by the Board
of Directors pursuant to Article III, Section 1 of these Bylaws, whether or not
such directorships are filled at the time (such total number of directorships
hereinafter referred to as the "Full Board"), or by the Chairman of the Board,
or in such officer's absence or incapacity, by a Vice Chairman, or in such
officer's
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absence or incapacity, by the President, by mailing a written or printed notice
at least ten (10) days prior to the date of such meeting to each stockholder of
record entitled to vote at such meeting (at such stockholder's last known post
office address as the same appears on the books of this Corporation), or (ii)
by any stockholder or stockholders holding not less than one-third of the
voting power of all of the outstanding shares of capital stock of this
Corporation entitled to vote at such meeting, voting together as a single
class, by mailing a written or printed notice at least thirty (30) days prior
to the date of such meeting to each stockholder of record entitled to vote at
such meeting. The notice required by clause (i) or (ii) of the immediately
preceding sentence shall state the place, date and hour of such meeting and any
and all purposes for which the meeting is called.
SECTION 3. VOTES. Each stockholder shall be entitled to one
(1) vote for each share of capital stock held on all matters to be voted upon.
Each stockholder entitled to vote shall be entitled to vote in person or by
proxy, but no proxy shall be voted on after three (3) years from its date
unless said proxy provides for a longer period. Except where the transfer
books of this Corporation shall have been closed, or a date shall have been
fixed as a record date for the determination of stockholders entitled to vote,
no share of stock shall be voted on at any election for Directors which shall
have been transferred on the books of this Corporation within twenty (20) days
next preceding such election of Directors.
SECTION 4. QUORUM. At any meeting at which the holders of
capital stock shall be entitled to vote for the election of Directors or for
other purposes, the holders of a majority of the outstanding shares of capital
stock entitled to vote at such meeting, and present in person or by proxy,
shall constitute a quorum for the purpose of electing Directors or for such
other purposes.
In the absence of a quorum of holders of capital stock at any
meeting of stockholders at which they are entitled to vote, the holders of
capital stock present at such meeting may adjourn the meeting to a future day
for such vote as the holders of capital stock are entitled and wish to take
without any notice other than an announcement at the meeting. At any such
adjourned meeting at which a quorum shall be present, any business may be
transacted by stockholders which they might have transacted at the meeting as
originally notified.
SECTION 5. STOCKHOLDERS LISTS. A complete list of the
stockholders entitled to vote at the ensuing election, arranged in alphabetical
order, with the residence of each and the number of voting shares held by each,
shall be prepared by the Secretary and filed in the office where the election
is to be held at least ten (10) days before every election, and shall, at all
times, during the usual hours for business, and during the whole time of said
election, and at the place thereof, be open to the examination of any
stockholder entitled to vote thereat.
SECTION 6. CONSENTS TO CORPORATE ACTION. The record date
for determining stockholders entitled to express consent to corporate action in
writing
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without a meeting shall be fixed by the Board of Directors. Any stockholder
seeking to have the stockholders authorize or take corporate action by written
consent without a meeting shall, by written notice, request the Board of
Directors to fix a record date. The Board of Directors shall, upon receipt of
such a request, fix a record date, which shall be not later than the 15th day
following receipt of the request, or such later date as may be specified by
such stockholder. If the record date falls on a Saturday, Sunday or legal
holiday, the record date shall be the day next following which is not a
Saturday, Sunday or legal holiday.
Subject to the immediately following paragraph, the date for
determining if an action has been consented to by the holder or holders of
shares of outstanding stock of this Corporation having the requisite voting
power to authorize or take the action specified therein (the "Consent Date")
shall be the 31st day after the date on which materials soliciting consents are
mailed to stockholders of this Corporation or, if no such materials are
required to be mailed under applicable law, the 31st day following the record
date fixed by the Board pursuant to the immediately preceding paragraph. If
the Consent Date falls on a Saturday, Sunday or legal holiday, the Consent Date
shall be the day next following which is not a Saturday, Sunday or legal
holiday.
In the event of the delivery to this Corporation of a written
consent or consents purporting to authorize or take corporate action and/or
related revocations (each such written consent and related revocation
hereinafter referred to in this Section 6 as a "Consent"), the Secretary of
this Corporation shall provide for the safekeeping of such Consent and shall
conduct such reasonable investigation as the Secretary deems necessary or
appropriate for the purpose of ascertaining the validity of such Consent and
all matters incident thereto, including, without limitation, whether the
holders of shares having the requisite voting power to authorize or take the
action specified in the Consent have given consent; provided, that if the
corporate action to which the Consent relates is the removal or replacement of
one or more members of the Board of Directors, the Secretary of this
Corporation shall designate two persons, who shall not be members of the Board,
to serve as inspectors with respect to such Consent, and such inspectors shall
discharge the functions of the Secretary of this Corporation under this
paragraph. If, after such investigation, the Secretary, or such inspectors, as
the case may be, shall determine that the Consent is valid, that fact shall be
certified on the records of this Corporation kept for the purpose of recording
the proceedings of meetings of the stockholders, and the Consent shall be filed
with such records, at which time the Consent shall become effective as
stockholder action; provided, that neither the Secretary, nor such inspectors,
as the case may be, shall make such certification or filing, and the Consent
shall not become effective as stockholder action, until the final termination,
without the availability of any further appeal, of any proceedings which may
have been commenced in the Court of Chancery of the State of Delaware, or any
other court of competent jurisdiction, for an adjudication of any legal issues
incident to determining the validity of the Consent, unless and until such
Court has determined that such proceedings are not being pursued expeditiously
and in good faith. In conducting the investigation required by this paragraph,
the Secretary, or such inspectors, as the case may be, may, at the expense of
this
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Corporation, retain special legal counsel and any other necessary or
appropriate professional advisors and such other personnel, as they may deem
necessary or appropriate, to assist them.
To the extent that this Section 6 is inconsistent with this
Corporation's Restated Certificate of Incorporation, as amended, the provisions
of this Corporation's Restated Certificate of Incorporation, as amended, will
prevail.
ARTICLE III
DIRECTORS
SECTION 1. MEMBERSHIP. The number of Directors of this
Corporation shall be not less than seven (7) nor more than fifteen (15), the
exact number of Directors to be fixed from time-to-time by a Resolution adopted
by not less than two-thirds of the full Board (as defined in Article NINTH of
the Restated Certificate of Incorporation). Directors shall be divided into
three classes, as nearly equal in number as possible, with a term of office of
three years, one class to expire each year. At each Annual Meeting of
Stockholders, the class of Directors whose terms of office shall expire at such
time shall be elected by a plurality vote by ballot to hold office for terms
expiring at the third Annual Meeting of Stockholders following their election
and until a successor shall be elected and shall qualify.
Nominations for the election of Directors may be made by the
Board of Directors or a committee appointed by the Board of Directors or by any
stockholder entitled to vote in the election of Directors at the particular
meeting at which the nomination is to occur. However, any stockholder entitled
to vote at such meeting may nominate one or more persons for election as
Directors only in person or by proxy at such meeting and only if written notice
of such stockholder's intent to make such nomination or nominations has been
delivered personally to, or otherwise received by, the Secretary of this
Corporation at least thirty (30) days, but no more than ninety (90) days prior
to the anniversary date of the record date for determination of stockholders
entitled to vote in the immediately preceding Annual Meeting of Stockholders.
Each such notice shall contain a representation that: (i) the stockholder is,
and will be, on the record date, a beneficial owner or a holder of record of
stock of this Corporation entitled to vote at such meeting; (ii) the
stockholder has, and will have, on the record date, full voting power with
respect to such shares; and (iii) the stockholder intends to appear in person
or by proxy at the meeting to nominate the person or persons specified in the
notice. Additionally, each such notice shall set forth: (a) the name and
address of the stockholder who intends to make the nomination and of the person
or persons to be nominated; (b) a description of all arrangements or
understandings between the stockholder and each proposed nominee, and any other
person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder; (c) the number and
kinds of securities of this Corporation held beneficially or of record by each
proposed nominee; (d) such other information regarding each proposed nominee as
would be required to be
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included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission for the initial election of such proposed
nominee for Director; and (e) the consent of each proposed nominee to serve as
a Director if so elected. The presiding officer of the meeting may refuse to
acknowledge the nomination of any person if any of the information supplied is
false or misleading or if any of the foregoing requirements are not satisfied.
SECTION 2. VACANCIES. Subject to the rights of the holders
of any particular class or series of equity securities of this Corporation, (i)
newly created directorships resulting from any increase in the total number of
authorized Directors may be filled by the affirmative vote of not less than
two-thirds of the Directors then in office, although less than a quorum, or by
a sole remaining Director, at any regular or special meeting of the Board of
Directors, or by a plurality vote of the stockholders at any regular Annual
Meeting or Special Meeting of Stockholders, and (ii) any vacancies on the Board
of Directors resulting from death, resignation, retirement, disqualification,
removal from office or other cause may be filled only by the affirmative vote
of not less than two-thirds of the Directors then in office, although less than
a quorum, or by a sole remaining Director, at any regular or special meeting of
the Board of Directors.
SECTION 3. PLACE OF MEETINGS. The Directors may hold their
meetings and have one or more offices and keep the books of this Corporation
outside of Delaware at the office of this Corporation, in the City of Battle
Creek, Michigan, or at such other place or places as they may, from
time-to-time, determine.
SECTION 4. REGULAR MEETINGS. In months other than the month
in which the Annual Meeting of Stockholders shall be held, regular meetings of
the Board of Directors shall be held without other notice than this bylaw, on
the fourth Friday of each month, if not a legal holiday, and if a legal
holiday, then on the preceding business day, at such time and place as the
Board of Directors may designate, or, if no such designation shall have been
made, at the executive offices of this Corporation, in the City of Battle
Creek, Michigan, at the hour of 1:30 p.m., local time. A regular meeting of
the Board of Directors shall also be held without other notice than this bylaw,
immediately after, and at the same place as the Annual Meeting of Stockholders.
The Board of Directors may provide, by resolution, the time and place for the
holding of different or additional regular meetings or the cancellation of a
regular meeting(s) without other notice than such resolution.
SECTION 5. SPECIAL MEETINGS. Special meetings of the Board
of Directors, to be held within or without the State of Delaware, may be called
by the Chairman of the Board, or in such officer's absence or incapacity, by a
Vice Chairman, or in such officer's absence or incapacity, by the President, or
in such officer's absence or incapacity, by an Executive Vice President, or in
such officer's absence or incapacity, by not less than six (6) Directors
(provided, that if this Corporation's Restated Certificate of Incorporation, as
amended, provides for the division of the Board of Directors into three
classes, no more than two of such members of the Board of Directors shall be
from the
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same class), by giving one day's notice thereof in the case of special meetings
called by the Chairman of the Board, a Vice Chairman, the President or an
Executive Vice President, as the case may be, or ten day's notice thereof in
the case of all other special meetings, which notice shall, in the case of any
special meeting, set forth the time and place of the meeting and be made
orally, or in writing, or by telegraph or by telephone, and shall, in the case
of special meetings not called by the Chairman of the Board, a Vice Chairman,
the President or an Executive Vice President, also set forth in reasonable
detail any and all purposes for which the special meeting is called.
SECTION 6. VOTES. Any member of the Board may require the
ayes and noes to be taken on any questions and recorded on the Minutes.
SECTION 7. QUORUM. Except as herein otherwise specifically
provided, a majority of the number of Directors constituting the Full Board (as
defined in Article II, Section 2) shall constitute a quorum for the transaction
of business.
SECTION 8. COMPENSATION OF DIRECTORS. Compensation of
Directors shall be as determined by the Board. Nothing contained herein shall
be construed to preclude any Director from serving this Corporation in any
other capacity and receiving compensation therefor.
SECTION 9. NOTICES. Neither the business to be transacted
at, nor the purpose of, any regular or special meeting of the Board of
Directors need be specified in the call or notice, or waiver of notice of such
meeting, unless specifically required by law, this Corporation's Restated
Certificate of Incorporation, as amended, or these Bylaws.
ARTICLE IV
COMMITTEES
SECTION 1. EXECUTIVE COMMITTEE. There may be an Executive
Committee of two or more Directors, including the Chairman of the Board,
designated by resolution of the Board of Directors. Said Committee may meet at
stated times or on notice to all by any of their own number. During the
intervals between meetings of the Board, the members of such Committee, who
shall be requested to do so, shall advise and aid the officers in all matters
concerning its interests and the management of its business, and generally
perform such duties and exercise such powers as may be directed or delegated by
the Board of Directors from time-to-time. The Board may delegate to such
Committee authority to exercise all powers of the Board, except those powers
specifically excluded from committees by Section 141(c) of the Delaware General
Corporation Law and except the power to authorize the issuance of stock of this
Corporation while the Board is not in session. Vacancies in the membership of
the Committee shall be filled by the Board of Directors at a regular meeting or
at a special meeting called for that purpose.
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The Executive Committee may, in its discretion, keep regular
minutes of its proceedings and shall report the same to the Board when
required.
In the absence or disqualification of a member of the
Executive Committee, the member or members of the Executive Committee present
at a meeting and not disqualified from voting, whether or not he, she or they
constitute a quorum, may unanimously appoint another member of the Board of
Directors of the Company to act at the meeting in place of each such absent or
disqualified member.
SECTION 2. AUDIT COMMITTEE. There may be an Audit Committee
of two or more Directors designated by resolution of the Board of Directors.
Said Committee may meet at stated times or on notice to all by any of its own
number. The Committee and its membership shall generally perform such duties
and exercise such powers as may be directed or delegated by the Board of
Directors from time-to-time. Vacancies in the membership of the Committee
shall be filled by the Board of Directors at a regular meeting or at a special
meeting called for that purpose. The Committee may, in its discretion, keep
regular minutes of its proceedings and shall report the same to the Board when
required.
SECTION 3. COMPENSATION COMMITTEE. There may be a
Compensation Committee of two or more Directors designated by resolution of the
Board of Directors. Said Committee may meet at stated times or on notice to
all by any of its own number. The Committee and its membership shall generally
perform such duties and exercise such power as may be directed or delegated by
the Board of Directors from time-to-time. Vacancies in the membership of the
Committee shall be filled by the Board of Directors at a regular meeting or at
a special meeting called for that purpose. The Committee may, in its
discretion, keep regular minutes of its proceedings and shall report the same
to the Board when required.
SECTION 4. EMPLOYEE BENEFITS ADVISORY COMMITTEE. There may
be an Employee Benefits Advisory Committee of two or more Directors designated
by resolution of the Board of Directors. Said Committee may meet at stated
times or on notice to all by any of its own number. The Committee and its
membership shall generally perform such duties and exercise such powers as may
be directed or delegated by the Board of Directors from time-to-time.
Vacancies in the membership of the Committee shall be filled by the Board of
Directors at a regular meeting or at a special meeting called for that purpose.
The Committee may, in its discretion, keep regular minutes of its proceedings
and shall report the same to the Board when required.
SECTION 5. FINANCE COMMITTEE. There may be a Finance
Committee of two or more Directors designated by resolution of the Board of
Directors. Said Committee may meet at stated times or on notice to all by any
of its own number. The Committee and its membership shall generally perform
such duties and exercise such powers as may be directed or delegated by the
Board of Directors from time-to-time. Vacancies in the membership of the
Committee shall be filled by the Board of Directors at a regular meeting or at
a special meeting called for that purpose. The Committee may, in
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its discretion, keep regular minutes of its proceedings and shall report the
same to the Board when required.
SECTION 6. NOMINATING COMMITTEE. There may be a Nominating
Committee of two or more Directors designated by resolution of the Board of
Directors. Said Committee may meet at stated times or on notice to all by any
of its own number. The Committee and its membership shall generally perform
such duties and exercise such powers as may be directed or delegated by the
Board of Directors from time-to-time. Vacancies in the membership of the
Committee shall be filled by the Board of Directors at a regular meeting or at
a special meeting called for that purpose. The Committee may, in its
discretion, keep regular minutes of its proceedings and shall report the same
to the Board when required.
SECTION 7. COMMITTEE ON SOCIAL RESPONSIBILITY. There may be
a Committee on Social Responsibility of two or more Directors designated by
resolution of the Board of Directors. Said Committee may meet at stated times
or on notice to all by any of its own number. The Committee and its membership
shall generally perform such duties and exercise such powers as may be directed
or delegated by the Board of Directors from time-to-time. Vacancies in the
membership of the Committee shall be filled by the Board of Directors at a
regular meeting or at a special meeting called for that purpose. The Committee
may, in its discretion, keep regular minutes of its proceedings and shall
report the same to the Board when required.
SECTION 8. OTHER COMMITTEES. The Board of Directors, by
resolution, may dissolve existing committees and may designate additional
committees, each of which shall consist of not less than two Directors. Each
such additional committee may meet at stated times or on notice to all by any
of its own number. Each such additional committee and its membership shall
generally perform such duties and exercise such powers as may be directed or
delegated by the Board of Directors from time-to-time. Vacancies in the
membership of any such additional committee shall be filled by the Board of
Directors at a regular meeting or at a special meeting called for that purpose.
Any such additional committee may, in its discretion, keep regular minutes of
its proceedings and shall report the same to the Board of Directors when
required.
ARTICLE V
OFFICERS
SECTION 1. OFFICERS. The officers of this Corporation shall
be elected by the Board of Directors and shall consist of the Chairman of the
Board (if designated as the Chief Executive Officer by the Board), the
President, one or more Vice Presidents, a Secretary, a Controller, one or more
Assistant Secretaries, a Treasurer, one or more Assistant Treasurers, and such
other officers as shall, from time-to-time, be provided by
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the Board of Directors, who shall perform the usual duties pertaining to their
respective offices, except as otherwise specifically provided herein or by
resolution of the Board of Directors. One person may hold more than one office
except that no person shall be both the President and a Vice President. The
Board of Directors may also elect one or more Vice Chairmen of the Board.
SECTION 2. QUALIFICATIONS. No person shall be eligible for
the Office of Chairman of the Board who is not a Director. Persons who are not
Directors or who are not stockholders shall be eligible for all other offices
of this Corporation.
SECTION 3. TERM OF OFFICE. The officers shall be elected at
the first regular meeting of the Board of Directors after the Annual Meeting of
Stockholders and shall hold office for one year and until their respective
successors have been duly elected and qualified; provided, however, that all
officers of this Corporation shall be subject to removal at any time by an
affirmative vote of Directors constituting not less than a majority of the Full
Board (as defined in Article II, Section 2).
SECTION 4. BONDS. The Directors may, by resolution, require
any or all of the officers or employees to give bond to this Corporation with
good and sufficient surety conditioned upon the faithful performance of their
respective duties and offices.
SECTION 5. CHAIRMAN OF THE BOARD AND VICE CHAIRMEN. The
Chairman of the Board, if one is elected, shall, in addition to his duties as a
Director of this Corporation, preside as Chairman at all meetings of the
stockholders, of the Board of Directors, and of the Executive Committee. A
Vice Chairman (if one or more is elected, in the order designated by the Board
of Directors or the Chief Executive Officer) shall, in the absence of the
Chairman of the Board, perform the duties of the Chairman of the Board provided
for in this Section.
SECTION 6. CHIEF EXECUTIVE OFFICER; PRESIDENT. The Chairman
of the Board, if so designated by the Board of Directors, shall be the Chief
Executive Officer of this Corporation and shall have general supervision of the
affairs of this Corporation, being responsible to the Board of Directors. The
President shall have general supervision of the operations of this Corporation
subject to the supervision of the Chairman of the Board, except that, if the
Chairman of the Board shall not also have been designated Chief Executive
Officer, or in the absence or incapacity of the Chairman of the Board who has
been so designated, the President shall be the Chief Executive Officer of this
Corporation and have general supervision of the affairs of this Corporation,
being responsible to the Board of Directors. The President shall, in the
absence or incapacity of the Chairman and Vice Chairman of the Board, perform
the functions of the Chairman of the Board set forth in Section 5 of this
Article V.
SECTION 7. VICE PRESIDENTS. One or more of the Vice
Presidents elected may be designated as Executive Vice Presidents. One or more
of the Vice Presidents elected may be designated as Senior Vice Presidents.
Each of the Vice
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Presidents, including the Executive Vice Presidents and the Senior Vice
Presidents, shall perform such duties as may be prescribed by the Board of
Directors or the Chief Executive Officer from time-to-time. In the absence or
disability to act of the President, any of the Executive Vice Presidents
designated by the Chief Executive Officer or the Board of Directors shall
possess all the powers and may perform any of the duties of the Office of the
President. In the absence or disability to act of the President and all of the
Executive Vice Presidents, such of the Vice Presidents designated by the Chief
Executive Officer or the Board of Directors, or in the absence or incapacity of
those designated Vice Presidents, any other person(s) designated by the Chief
Executive Officer shall possess all of the powers and may perform all of the
duties of the President.
SECTION 8. SECRETARY. The Secretary, or in his or her
absence, the Assistant Secretary, shall issue notices for meetings, shall keep
their minutes, shall have charge of the corporate seal and corporate Minute
Books, and shall make such reports and perform such other duties as are
incident to his or her office or as are properly required of him or her by the
Chief Executive Officer or the Board of Directors.
SECTION 9. TREASURER. The Treasurer shall have custody of
all monies and securities of this Corporation. He or she shall sign or
countersign such instruments as require his or her signature and shall perform
all duties incident to his or her office or that are properly required of him
or her by the Board of Directors or the Chief Executive Officer. He or she
shall give bond for the faithful performance of his or her duties in such sum
and with such sureties as may be required of him or her by the Board of
Directors or the Chief Executive Officer.
SECTION 10. CONTROLLER. The Controller shall have custody of
all the accounting records of this Corporation and shall keep regular books of
account. He or she shall sign or countersign such instruments as require his or
her signature and shall perform all duties incident to this office or that are
properly required of him or her by the Board of Directors, the Chief Executive
Officer or the President.
SECTION 11. DELEGATION. In case of the absence of any officer
of this Corporation or for any other reason which may seem sufficient to the
Board of Directors, the Board of Directors or the Chief Executive Officer may
delegate the powers and duties of any such officer to any Director for the time
being.
ARTICLE VI
EXECUTION OF CHECKS AND OTHER INSTRUMENTS
SECTION 1. The funds of this Corporation shall be deposited
in such bank or banks of deposit as shall be designated or authorized by the
Board of Directors and in the name of Kellogg Company or such other name as the
Board of Directors may designate. All checks, drafts or orders drawn against
funds on deposit in any such bank
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shall be signed by such person or persons as may be authorized by the Board of
Directors by a proper resolution spread of record.
SECTION 2. All other instruments in writing involving the
payment of money or of credit or liability of this Corporation, such as deeds,
bonds, contracts, etc., shall be signed in the name of this Corporation by the
Chairman of the Board, a Vice Chairman, the President, a Vice President or by
such other person or persons as may be authorized by the Board and may be
attested, and the corporate seal affixed thereto by either the Secretary or an
Assistant Secretary. In the absence of the Secretary and Assistant Secretary,
or their inability to act, the Treasurer or Assistant Treasurer may affix the
seal.
The Board of Directors, the Executive Committee or the Chief
Executive Officer may authorize the execution of contracts and other
instruments by such other officers, agents and employees as may be selected by
them from time-to-time and with such limitations and restrictions as the
authorization may require.
ARTICLE VII
CERTIFICATES OF STOCK
SECTION 1. CERTIFICATES OF STOCK. Certificates of stock
shall be signed by the Chairman of the Board, the President or a Vice
President, and by the Secretary or an Assistant Secretary of this Corporation,
both of whose signatures may be a facsimile, and shall be numbered and entered
in books of this Corporation as they are issued. They shall, in all respects,
conform to the requirements of the law of the State of Delaware, and shall be
otherwise in such form as may be prescribed by the Board of Directors.
SECTION 2. LOST CERTIFICATES. If any person claims a
certificate is lost or destroyed, a new certificate may be issued of the same
tenor and for the same number of shares as the one alleged to be lost or
destroyed, upon compliance with any terms and conditions which this Corporation
may prescribe.
ARTICLE VIII
TRANSFER OF SHARES
SECTION 1. TRANSFER OF SHARES. Shares of the capital stock
of this Corporation shall be transferred on the books of this Corporation by
the owner thereof in person or by his or her attorney upon the surrender and
cancellation of certificates for a like number of shares. Upon presentation
and surrender of a certificate properly endorsed
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and payment of all taxes thereon, the transferee shall be entitled to a new
certificate or certificates in place thereof.
SECTION 2. REGISTRATION. One or more Transfer Agents and
Registrars of the Company's stock may be appointed by resolution of the Board
of Directors for the transfer and registration of any class or classes of stock
of this Corporation, and upon such appointment, no certificate for any such
class of stock shall be issued or be valid for any purpose until countersigned
by one such Transfer Agent and registered and countersigned by one such
Registrar; provided, however, that the countersignature of such Transfer Agent
may be a facsimile if such certificate is countersigned manually by a Registrar
who shall be other than this Corporation or its employee.
SECTION 3. CLOSING OF TRANSFER BOOKS. The Board of Directors
shall have the power to close the stock transfer books of this Corporation for
a period not exceeding sixty (60) days preceding the date of any meeting of
stockholders, or the date of payment of any dividend or other distribution or
allotment of any rights, or the effective date of any change, conversion or
exchange of stock, or of any other lawful action; provided, however, that in
lieu of closing the stock transfer books as aforesaid and in order that this
Corporation may determine the stockholders entitled to notice or to vote at any
meeting of stockholders or any adjournment thereof, or entitled to receive
payment of any dividend or other distribution or allotment of any rights, or
entitled to exercise any rights in respect of any change, conversion or
exchange of stock, or for the purpose of any other lawful action, the Board of
Directors may fix, in advance, a record date, which shall not be more than
sixty (60) days before the date of such meeting, nor more than sixty (60) days
prior to any other action, and in such case, such stockholders, and only such
stockholders as shall be stockholders of record on the date so fixed, shall be
entitled to such notice of, and to vote at, such meeting and any adjournment or
adjournments thereof, or to receive payment of such dividend, or to receive
such allotment of rights, or to exercise such rights, as the case may be,
notwithstanding any transfer of any stock on the books of this Corporation
after any such record date fixed as aforesaid. A determination of stockholders
of record entitled to notice of, or to vote at, a meeting of stockholders shall
apply to any adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
SECTION 4. REGISTERED STOCKHOLDERS. The Corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof, and accordingly, shall not be bound to recognize any
equitable or other claim to, or interest in, such share on the part of any
other person, whether or not it shall have express or other notice thereof,
save as expressly provided by the laws of Delaware.
ARTICLE IX
CORPORATE SEAL
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SECTION 1. CORPORATE SEAL. The corporate seal shall have
inscribed thereon in the center the words "Corporate Seal" and the number
"1922," and in a circle around the margin the words
"Kellogg Company"
"Delaware".
ARTICLE X
DIVIDENDS
SECTION 1. DIVIDENDS. Dividends upon the stock of this
Corporation shall be payable from funds lawfully available therefor at such
times and in such amounts as the Board of Directors, or a Committee thereof
expressly authorized by resolution of the Board of Directors may, from
time-to-time, direct.
ARTICLE XI
FISCAL YEAR
SECTION 1. FISCAL YEAR. The fiscal year of this Corporation
shall begin on the 1st day of January and end on the 31st day of December of
each year.
ARTICLE XII
INSPECTION OF BOOKS
SECTION 1. INSPECTION OF BOOKS. The Directors shall
determine, from time-to-time whether, and if allowed, when, and under what
conditions and regulations, the accounts and books of this Corporation (except
such as may, by statute, be specifically open to inspection), or any of them,
shall be open to the inspection of the stockholders, and the stockholders'
rights in this respect are and shall be restricted and limited accordingly.
ARTICLE XIII
ORDER OF BUSINESS
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SECTION 1. ORDER OF BUSINESS. At all stockholders' and
Directors' meetings, the order of business shall be as determined by the
presiding officer of the meeting.
ARTICLE XIV
AMENDMENT
SECTION 1. AMENDMENT. Except to the extent otherwise
provided in this Corporation's Restated Certificate of Incorporation, as
amended, these Bylaws shall be subject to alteration, amendment or repeal, and
new bylaws may be adopted (i) by the affirmative vote of the holders of not
less than a majority of the voting power of all of the outstanding shares of
capital stock of this Corporation then entitled to vote generally in the
election of Directors, voting together as a single class, at any regular or
special meeting of the stockholders (but only if notice of the proposed change
be contained in the notice to the stockholders of the proposed action), or (ii)
by the affirmative vote of not less than a majority of the members of the Board
of Directors at any meeting of the Board of Directors at which there is a
quorum present and voting; provided, that in the case of clause (ii), any
alteration, amendment or repeal made with respect to, or the adoption of, a new
bylaw inconsistent with Article II, Section 2 or Section 6, or Article III,
Section 1, Section 2, or Section 5, or this Article XIV, Section 1 of these
Bylaws, shall require the affirmative vote of Directors constituting not less
than two-thirds of the Full Board (as defined in Article II, Section 2).
ARTICLE XV
INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS; INSURANCE
SECTION 1. The Corporation shall indemnify any person who was
or is a party, or is threatened to be made a party, to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
this Corporation), by reason of the fact that he is or was a Director or
officer of this Corporation, is or was serving at the request of this
Corporation as a Director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in, or not opposed to, the best interests of this Corporation, and, with
respect to any criminal action or proceeding, has no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he reasonably
believed to be in, or not opposed to, the best interests of this Corporation,
and, with respect to any criminal action or proceeding, has reasonable cause to
believe that his conduct was unlawful.
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SECTION 2. The Corporation shall indemnify any person who was
or is a party, or is threatened to be made a party, to any threatened pending
or completed action or suit by, or in the right of, this Corporation to procure
a judgment in its favor by reason of the fact that he is or was a Director or
officer of this Corporation, or, while a Director or officer of this
Corporation, is or was serving at the request of this Corporation as a
Director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of this
Corporation, and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to this Corporation unless and only to the extent that the Court of
Chancery of the State of Delaware or the court in which such action or suit was
brought shall determine, upon application, that despite the adjudication of
liability, but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court
of Chancery or such other court shall deem proper.
SECTION 3. The Board of Directors of this Corporation shall
have the power, in its discretion, to cause this Corporation to indemnify any
person who was or is a party, or is threatened to be made a party, to any
threatened, pending or completed action, suit or proceeding referred to in
Sections 1 or 2 of this Article by reason of the fact that (although not a
Director or officer of this Corporation) he is or was an employee or agent of
this Corporation, or is or was serving at the request of this Corporation as a
Director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise to the extent that any such person would
have been entitled to be indemnified under Sections 1 and 2 had he, at all
times, been a Director or officer of this Corporation.
SECTION 4. Any indemnification under Sections 1, 2 or 3 of
this Article (unless ordered by a court) shall be made by this Corporation only
as authorized in the specific case upon a determination that indemnification of
the Director, officer, employee or agent is proper in the circumstances because
he has met the applicable standard of conduct set forth in Sections 1 or 2.
Such determination shall be made (1) by the Board of Directors by a majority
vote of a quorum consisting of Directors who were not parties to such action,
suit or proceeding, or, (2) if such a quorum is not obtainable, or, even if
obtainable, a quorum of disinterested Directors so directs, by independent
legal counsel in a written opinion, or (3) by the stockholders.
SECTION 5. To the extent that a Director, officer, employee
or agent has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections 1, 2 or 3, or in defense of
any claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
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SECTION 6. Expenses incurred in defending a civil or criminal
action, suit or proceeding may be paid by this Corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by, or on behalf of, the Director, officer, employee or agent to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by this Corporation as authorized in this Article.
SECTION 7. The indemnification and advancement of expenses
provided by, or granted pursuant to, this Article, shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may, at any time, be entitled under any bylaw,
agreement, vote of stockholders or disinterested Directors, or otherwise, both
as to action by a person in his official capacity and as to action in another
capacity while holding such office.
SECTION 8. The Board of Directors shall have power to
authorize and direct the purchase and maintenance of insurance on behalf of
itself or any person who is or was a Director, officer, employee or agent of
this Corporation, or is or was serving at the request of this Corporation as a
Director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not this Corporation would have the power to indemnify him against
such liability under the provisions of this Article.
SECTION 9. For purposes of this Article XV, reference to
"this Corporation" shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent) absorbed
in a consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its Directors, officers and
employees or agents, so that any person who is or was a Director, officer,
employee or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under the provisions of this
Article XV with respect to the resulting or surviving corporation as he or she
would have with respect to such constituent corporation if its separate
existence had continued.
SECTION 10. For purposes of this Article XV, references to
"enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to an employee
benefit plan; and references to "serving at the request of this Corporation"
shall include any service as a Director, officer, employee or agent of this
Corporation which imposes duties on, or involves services by, such Director,
officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of this Corporation" as referred to in
this Article XV.
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SECTION 11. The indemnification and advancement of expenses
provided by, or granted pursuant to, this Article, shall, unless otherwise
provided when authorized or ratified, continue as to a person who has ceased to
be a Director, officer, employee or agent, and shall inure to the benefit of the
executors, administrators and other legal representatives and heirs of such a
person.
ARTICLE XVI
MISCELLANY
SECTION 1. The Chief Executive Officer or the Board of
Directors may designate any order of assignment to apply within any specified
group of officers where, as provided in these Bylaws, any such designation is
to be made as to one or more of such officers. In the event that no such
designation is made, the order of assignment within any specified group of
officers will be according to the length of service of each particular officer
in the specified office, with the officer serving the longest term within that
particular office to be assigned first, and in his or her absence or
incapacity, the officer serving the next longest term in that particular office
to be assigned second, and so on.
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EX-10.01
4
EXHIBIT 10.01
1
KELLOGG COMPANY
SENIOR EXECUTIVE OFFICER PERFORMANCE BONUS PLAN
SECTION 1.
PURPOSE AND ELIGIBILITY
The purpose of this Plan is to motivate the Company's executive
officers through awards of annual cash bonuses to achieve strategic, financial
and operating objectives, reward their contribution toward improvement in
financial performance, provide the executive officers with an additional
incentive to contribute to the success of the Company and offer a total
compensation package that is competitive in the industry, and to include a
bonus component which is intended to qualify as performance-based compensation
deductible by the Company under the Code. Such executive officers of the
Company as determined by the Compensation Committee of the Board will be
eligible to receive payments hereunder.
SECTION 2.
DEFINITIONS
"Award" shall have the meaning set forth in Section 3.
"Board" shall mean the Board of Directors of the Company.
"Bonus" shall mean a cash award payable to a participant pursuant to
the terms of the plan, including an Award.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean the Compensation Committee of the Board.
"Company" shall mean Kellogg Company, a Delaware corporation, and its
subsidiaries.
"Compensation Survey" shall mean a survey of compensation practices of
comparable companies as selected by the Committee.
"Corporate Incentive Factor" shall mean the Company's earnings per
share (as adjusted for certain extraordinary or non-recurring items) as
compared to the pre-established target earnings per share.
42
2
"Covered Employees" shall mean participants designated by the
Committee prior to the award of a Bonus opportunity hereunder who are or are
expected to be "covered employees" within the meaning of Section 162(m) of the
Code for the Measurement Period in which a Bonus hereunder is payable.
"Disinterested Person" shall mean a member of the Board who qualifies
as an "outside director" for purposes of Section 162(m) of the Code.
"Measurement Period" shall mean a period of one fiscal year, unless a
shorter period is otherwise selected and established in writing by the
Committee at the time the Performance Goals are established with respect to a
particular Award.
"Net Income" shall mean net income available for common stockholders
as reported in the Company's audited financial statements, but not including
extraordinary items and the cumulative effect of accounting changes.
"Payment Date" shall mean the date following the conclusion of a
particular Measurement Period on which the Committee certifies that applicable
Performance Goals have been satisfied and authorizes payment of corresponding
Bonuses.
"Performance Goals" shall have the meaning set forth in Section 3
hereof.
SECTION 3.
ADMINISTRATION AND CALCULATION OF AWARDS
The Plan shall be administered by the Committee, consisting of
Disinterested Persons, in conformance with Section 162(m) of the Code ("Section
162(m)"). Any action by the Committee that would be violative of Section 162(m)
shall be void. The Committee shall have the authority to determine eligibility
of executive officers and the financial and other performance criteria
applicable to the maximum potential recommended bonus (the "Award") which a
participating executive officer may receive for services performed during that
year. Target awards, which are a percentage of the midpoint of the applicable
salary range, shall be determined using as an objective the 75th percentile of
the Compensation Survey. Recommended Awards shall be determined by adjusting
the target awards based on individual performance factors. The result is then
adjusted further based on the Corporate Incentive Factor. This adjustment of
the recommended bonus may result in a bonus payment ranging from 0% to 150% of
the recommended bonus. The Committee shall evaluate individual performance by
such performance factors as it deems appropriate. The performance factors shall
be determined by the Committee in advance of each Measurement Period or such
period as may be permitted by the regulations issued under Section 162(m), and
may include long-term financial and non-financial objectives and Company
performance ("Performance Goals"). With respect to the Chief Executive Officer,
the factors shall be the same as those utilized by the Committee in its annual
determination of performance including the Company's earnings per share, return
on equity, return on
43
3
assets, growth in sales and earnings, market share and total return to
stockholders (including both the market value of the Company's stock and
dividends thereon) and the extent to which strategic and business plan goals
are met. Awards are based on the achievement of such performance criteria.
Negative discretion may be used by the Committee to reduce the Award. In no
event, however, will an exercise of negative discretion to reduce the Award of
a participating executive officer have the effect of increasing the amount of
an Award otherwise payable to any other participating executive officer.
SECTION 4.
MAXIMUM BONUS AWARDS
The total of all Awards payable to any Covered Employee shall not
under any circumstances exceed 3/4 of 1 percent (.0075) of the Net Income of
the Company (the "Maximum Bonus Awards Pool") and no one individual may receive
more than 60% of such pool. In the event that the total of all Awards payable
to Covered Employees should exceed the Maximum Bonus Awards Pool as specified
above, the Award of each Covered Employee will be proportionately reduced such
that the total of all such Awards paid is equal to the Maximum Bonus Awards
Pool.
SECTION 5.
PAYMENT OF AWARDS
If the Performance Goals established by the Committee are satisfied
and upon written certification by the Committee that the Performance Goals have
been satisfied, payment shall be made on the Payment Date in accordance with
the terms of the Award unless the Committee determines in its sole discretion
to reduce the payment to be made.
SECTION 6.
TERMINATION OF EMPLOYMENT
In the event that a participating executive officer's employment with
the Company terminates for any reason prior to the Payment Date with respect to
any Bonus, the balance of any Bonus which remains unpaid at the time of such
termination shall be payable to the participant, or forfeited by the
participant, in accordance with the terms of the Award granted by the
Committee; provided, however, that no amount shall be payable unless the
Performance Goals are satisfied unless the termination of employment of the
Covered Employee is due to death or disability. Participating executive
officers who remain employed through the Measurement Period but are terminated
prior to the Payment Date shall be entitled to receive Bonuses payable with
respect to such Measurement Period.
SECTION 7.
44
4
AMENDMENT AND TERMINATION
The Board shall have the right to modify the Plan from time to time
but no such modification shall, without prior approval of the Company's
stockholders, change Section 3 of this Plan, alter the business criteria on
which the Performance Goals may be based or to increase the amount set forth in
Section 4, materially increase the amount available for Awards, materially
increase the benefits accruing to participating executive officers, materially
modify the requirements regarding eligibility for participation in the Plan or,
without the consent of the participant affected, impair any Award made prior to
the effective date of the modification.
SECTION 8.
MISCELLANEOUS
Bonus payments shall be made from the general funds of the Company and
no special or separate fund shall be established or other segregation of assets
made to assure payment. No participant or other person shall have under any
circumstances any interest in any particular property or assets of the Company.
The Plan shall be governed by and construed in accordance with the laws of the
State of Delaware, without regard to its principles of conflict of laws.
Neither the establishment of this Plan nor the payment of any Award
hereunder nor any action of the Company or the Committee with respect to this
Plan shall be held or construed to confer upon any participating executive
officer any legal right to be continued in the employ of the Company or to
receive any particular rate of cash Compensation other than pursuant to the
terms of this Plan and the determination of the Committee, and the Company
expressly reserves the right to discharge any participating executive officer
whenever the interest of the Company may so permit or require without liability
to the Company, the Board of Directors or the Committee, except as to any
rights which may be expressly conferred upon a participating executive officer
under this Plan.
The adoption of this Plan shall not affect any other compensation
plans in effect for the Company or any subsidiary or affiliate of the Company,
nor shall the Plan preclude the Company or any subsidiary or affiliate thereof
from establishing any other forms of incentive or other compensation for the
participating executive officers.
SECTION 9.
EFFECTIVE DATE
This Plan shall become effective upon approval by the stockholders.
45
EX-27
5
EXHIBIT 27
5
1,000,000
6-MOS
DEC-31-1995
JAN-01-1995
JUN-30-1995
377
0
649
0
409
1,647
4,781
(1,857)
4,747
1,373
719
78
0
0
85
4,747
3,496
3,496
1,589
1,589
1,336
0
35
536
204
332
0
0
0
332
1.51
0