From: Jim Markey
Sent: Tuesday, August 13, 2002 5:52 PM
Subject: Comments on File No. S7-22-02



August 13, 2002

Mr. Jonathan G. Katz
Secretary
Securities and Exchange Commission
Washington, D.C, 20549-0609
rule-comments@sec.gov

Re: Comments on Proposed Rule for Additional Form 8-K Disclosure Requirements
and Acceleration of Filing Date--File No. S7-22-02

Dear Mr. Katz:

I am Vice President and Chief Counsel of Kellogg Company, and appreciate the
opportunity to provide the following comments on this proposed rule.

First, the Commission should give more guidance, in the final rule, on the
meaning of the term "ordinary course", and should more precisely define the
"materiality" standard to be used by companies when determining whether to
report the agreements, amendments and terminations, in proposed Items 1.01 and
1.02.  Companies will need to educate their employees about what needs to be
reported and filed in order to timely make these filings.  Without more precise
definitions, such as the quantitative tests in proposed Items 1.03 and 2.01, it
will be impossible for companies to provide these needed guidelines to
employees.   My suggestion would be to harmonize the thresholds in Items 1.01,
1.02, 2.01, 2.03,  2.04 and 2.05 so one financial threshold applies to all these
Items.

Second, for Item 1.01, I would suggest that disclosure not be required of
letters of intent or similar agreements which are generally non-binding, except
for provisions such as those dealing with expenses and confidentiality.

Third, for Items 1.02 and 1.03, I would recommend that no disclosure be required
until the company has sent, or received, a formal, written termination notice,
and that these provisions not cover terminations that occur in accordance with
the terms of the agreements.  This would be a much clearer standard to use. To
me, the proposed test for Item 1.02--that no disclosure is required until all
material conditions to termination have occurred--is unworkable in practice.

Fourth, the two-business day filing requirement for documents to be filed as
exhibits, in the case of Items 1.01, 2.03, 2.04 and 5.03, will be extremely
difficult to meet without forcing companies to incur additional cost and
expense.  As you know, it takes some time to convert documents into versions
that can be filed under EDGAR, and to proof the filing.  It would be much better
if the requirement were to simply to provide the sort of information about the
agreement described in the proposed Item, without requiring the company to file
the actual agreement until the next Form 10-Q or 10-K is due.

Fifth, I would suggest that instructions to Items 2.03 and 2.04 state that a
non-binding letters of support or statements of intent provided to financial
institutions and covering obligations of subsidiaries for subsidiaries are not
"keepwell agreements" or "contingent financial obligations".

Sixth, I would suggest that companies be allowed additional time before being
required to announce exit activities under Item 2.05, or be permitted to make
non-specific disclosures.  Companies will clearly want to coordinate their
notification of community officials, employees, the press and the investment
community in connection with these activities, and companies oftentimes do not
start this process until after board approval is obtained.  Requiring specific
disclosures in two business days is not enough time to properly coordinate these
activities.

Seventh, the requirement under Item 5.02(b) to describe the reasons why a
specified officer has been reassigned or left the company could expose companies
to defamation lawsuits in situations where an officer and a company disagree
about whether, and the extent to which, the officer's performance has been
unsatisfactory. On the other hand, as written, it could also give rise to a
"wrongful hiring"-type claim by a future employer who could claim that a
company's failure to report performance issues misled the future employer into
hiring the terminated officer.  These points, obviously, need to be corrected in
the final rule.

Eighth, the disclosures required by Item 5.04 should not cover restrictions in
the terms of the plans themselves if those restrictions have otherwise been
disclosed to employees or participants.  For instance, stock purchase plans have
cutoff dates in the plan document itself by which employees must choose to
participate in the plans or be prohibited from participating for another
quarter.  Similarly, profit sharing plans have provisions in the plan document
describing when employees may elect to transfer fund balances and the amount of
time it takes for those transfer elections to be effective.  These restrictions
will have already been disclosed to participants and are not really of interest
to investors generally.

I thank you again for giving me the opportunity to comment on the proposed rule.

Sincerely,

/s/ Jim Markey

Jim Markey
Vice President and Chief Counsel--Securities and International
Kellogg Company