KELLOGG CO (Form: 8-K, Received: 07/23/2007 08:36:20)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): July 23, 2007

Kellogg Company

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation)		1-4171 (Commission File Number)		38-0710690 (IRS Employer Identification No.)

One Kellogg Square
Battle Creek, Michigan 49016-3599
(Address of principal executive offices, including zip code)

(269) 961-2000
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):


o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On July 23, 2007, Kellogg Company (“Kellogg” or the “Company”) issued a press release announcing management changes intended to further broaden the experience of several of the Company’s senior executive leaders, including Jeffrey W. Montie and John A. Bryant. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Mr. Montie was appointed executive vice president, Kellogg Company, president, Kellogg International and will assume the additional responsibilities for leading Kellogg’s global innovation, marketing, consumer promotions, and sales teams. Previously, Mr. Montie was executive vice president, Kellogg Company, president, Kellogg North America.

Mr. Bryant was appointed executive vice president, Kellogg Company, president, Kellogg North America. Mr. Bryant will retain the role of chief financial officer. Previously, Mr. Bryant was executive vice president and chief financial officer, Kellogg Company, president, Kellogg International.

In connection with these changes, the Company entered into retention agreements with Mr. Montie and Mr. Bryant pursuant to which (a) if the executive is terminated by the Company without cause or leaves the Company for good reason prior to his retirement date under the Company’s pension plans (June 2016 for Mr. Montie and November 2020 for Mr. Bryant), he would receive certain pension benefits under these plans; (b) Mr. Bryant’s pension benefits would be calculated based on the same formula applicable to most other senior executives; and (c) each executive will be subject to non-compete and non-solicit obligations.

The above description of the retention agreements with Mr. Montie and Mr. Bryant is qualified in its entirety by reference to the copies of the agreements filed herewith as Exhibit 10.1 and Exhibit 10.2, which agreements are incorporated herein by reference.

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 hereunto duly authorized.


	KELLOGG COMPANY
Date: July 23, 2007	/s/ Gary H. Pilnick
	Name:	Gary H. Pilnick
	Title:	Senior Vice President, General Counsel, Corporate Development and Secretary

EXHIBIT INDEX

10.1		Letter Agreement with Jeffrey W. Montie, dated July 23, 2007.

10.2		Letter Agreement with John A. Bryant, dated July 23, 2007.

99.1		Kellogg Company’s July 23, 2007 Press Release.

Exhibit 10.1

July 23, 2007

Jeffrey W. Montie
Kellogg Company
One Kellogg Square
Battle Creek, MI 49016

Dear Jeff:

We are excited about you assuming the role of President, Kellogg International, and leading the Company’s global efforts relating to marketing, innovation, sales and promotions. The purpose of this letter is to set forth terms of retention benefits that reflect your valuable contributions to the business and our desire that you remain with Kellogg Company (“Kellogg,” and together with its affiliates and subsidiaries, the “Company”) for the long term. The letter also includes non-compete and other commitments from you to the Company.

Retention

	a.		In the event you are either terminated by the Company without “Cause” (as herein defined) or you terminate your employment with the Company for “Good Reason” (as herein defined) prior to June 2, 2016 (the “Retirement Date”), the date you are first able to retire from the Company under the terms of the Kellogg Company Pension Plan and Kellogg Company Executive Excess Plan (the “Pension Plans”), you will be eligible to receive the pension benefit you would have received under the current Pension Plans had you remained with the Company through the Retirement Date. This pension benefit shall be payable from the Kellogg Company Executive Excess Plan.

	b.		For purposes of this letter agreement, termination for “Cause” means termination by the Company because of (i) your willful engaging in illegal conduct or gross misconduct pursuant to which the Company has suffered a loss, or (ii) your willful and continued refusal to perform substantially your duties hereunder in any material respect; provided, however, that in the case of clause (ii), the Company must provide written notice of such breach or refusal within thirty (30) days of its discovery thereof, and you shall have thirty (30) days from such written notice to cure such breach or refusal.

	c.		For purposes of this letter agreement, termination for “Good Reason” means termination by you because of (i) a reduction in your base salary, as in effect from time to time, except in connection with salary reductions which are generally implemented with respect to the Company’s senior executives, (ii)

			the Company’s failure to provide any fringe benefit plan or substantially similar benefit or compensation plan which is made generally available to other management employees of the Company; provided, however, that nothing in this clause shall be construed to constrain the Company from amending or eliminating any benefit or compensation plan; (iii) a breach by the Company of its obligations to you under this letter agreement in any material respect, or (iv) a material reduction in your responsibilities or duties as in effect immediately prior to such change, provided however, that in the case of each of clauses (i) through (iv) hereof, you shall provide written notice of any such alleged action of the Company within thirty (30) days of the date you knew of such action and the Company shall have thirty (30) days from such written notice to cure such action.

	d.		Notwithstanding any other provision in this letter agreement, if (i) your employment is terminated prior to the Retirement Date and (ii) at the time of such termination, you qualify for benefits under the Company’s Change of Control Policy, then you shall be eligible for the benefits described in Paragraph 1 (a). In addition, if your employment is terminated by reason of your death or disability, you or your estate, as the case may be, shall be entitled to receive the benefits described in Paragraph 1 (a).

	e.		Notwithstanding any other provisions in this letter agreement, if you violate any of your obligations under this letter agreement, you shall not be entitled to any of the benefits described in Paragraph 1 (a).

Non-Compete . In further consideration of the foregoing, you agree that for a period of three years beginning with the last of the day of your active employment with the Company (the “Restricted Period”), you shall not, without the prior written consent from the Chief Executive Officer of Kellogg:

	a.		directly or indirectly, accept any employment, consult for or with, or otherwise provide or perform any services of any nature to, for or on behalf of any person, firm, partnership, corporation or other business or entity that manufactures, produces, distributes or markets any of the Products (as herein defined) in the Geographic Area (as herein defined).

	b.		directly or indirectly, permit any business, entity or organization which you, individually or jointly with others, owns, manages, operates, or controls, to engage in the manufacture, production, distribution, sale or marketing of any of the Products in the Geographic Area.

For purposes of this Paragraph, the term “Products” shall mean (i) ready-to-eat cereal products, toaster pastries, cereal bars, granola bars, crispy marshmallow squares, frozen waffles, frozen pancakes, fruit snacks, cookies, crackers, ice cream cones and meat substitutes; (ii) any other grain-based convenience food; or (iii) any other product which the Company manufactures, distributes, sells or markets at the time your employment ends with the Company. With respect to


			(iii) above, such products shall not include products which the Company reasonably determines insignificant to the Company. The term “Geographic Area” shall mean any territory, region or country where the Company sells any Products at any time during the applicable Restricted Period.

	3.		Non-solicitation . You agree that during your active employment and thereafter for a period of three years, you shall not, without the prior written consent of the Chief Executive Officer of Kellogg, directly or indirectly employ, or solicit the employment of (whether as an employee, officer, director, agent, consultant or independent contractor) any person who is or was an officer, director, representative, agent or employee of the Company at any time during the two year period prior to your last day of employment.

	4.		Non-Disparagement of the Company . You agree, during the term of your employment and thereafter, not to engage in any form of conduct or make any statements or representations that disparage, portray in a negative light, or otherwise impair the reputation, goodwill or commercial interests of the Company, or its past, present and future subsidiaries, divisions, affiliates, successors, officers, directors, attorneys, agents and employees.

	5.		Preservation of Company Confidential Information . You acknowledge that you will not (without first obtaining the prior written consent in each instance from the Company) during the term of your employment and thereafter, disclose, make commercial or other use of, give or sell to any person, firm or corporation, any information received directly or indirectly from the Company or acquired or developed in the course of your employment, including, by way of example only, trade secrets (including organizational charts, employee information such as credentials, skill sets and background information), ideas, inventions, methods, designs, formulas, systems, improvements, prices, discounts, business affairs, products, product specifications, manufacturing processes, data and know-how and technical information of any kind whatsoever unless such information has been publicly disclosed by authorized officials of the Company.

	6.		Release . In consideration of the compensation and benefits provided pursuant to this letter agreement, the sufficiency of which is hereby acknowledged, you, for yourself and for any person who may claim by or through you, irrevocably and unconditionally releases, waives and forever discharges the Company and its respective officers, directors, attorneys, agents and employees, from any and all claims or causes of action that you had, have or may have, known or unknown, relating to your employment with the Company up until the date of this letter agreement, including but not limited to, any claims arising under Title VII of the Civil Rights Act of 1964, as amended, Section 1981 of the Civil Rights Act of 1866, as amended, the Civil Rights Act of 1991, as amended, the Family and Medical Leave Act, the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act of 1990, the Americans with Disabilities Act, the Employee Retirement Income Security Act; claims under any other federal, state or local statute, regulation or ordinance; claims for

discrimination or harassment of any kind, breach of contract or public policy, wrongful or retaliatory discharge, defamation or other personal or business injury of any kind; and any and all other claims to any form of legal or equitable relief, damages, compensation or benefits (except rights you may have under the Employee Retirement Income Security Act of 1974 to recover any vested benefits), or for attorneys fees or costs. You additionally waive and release any right you may have to recover in any lawsuit or proceeding against the Company brought by you, an administrative agency, or any other person on your behalf or which includes you in any class.

Miscellaneous .

	a.		Severability . You also agree that if any provision of this letter agreement is invalid or unenforceable by a court of law, (i) such provision shall be deemed to be amended so that the intent of the parties is fulfilled to the greatest extent possible; and (ii) it would not affect the validity or enforceability of any other provision of this letter agreement, which shall remain in full force and effect.

	b.		Controlling Law and Venue . You agree that the construction, interpretation, and performance of this letter agreement shall be governed by the laws of Michigan, including conflict of laws. It is agreed that any controversy, claim or dispute between the parties, directly or indirectly, concerning this letter agreement or the breach thereof shall only be resolved in the Circuit Court of Calhoun County, or the United States District Court for the Western District of Michigan, whichever court has jurisdiction over the subject matter thereof, and the parties hereby submit to the jurisdiction of said courts.

	c.		Entire Agreement; Amendment . You agree that this letter agreement constitutes the entire agreement between you and the Company with respect to the matters described herein, and that this letter agreement supersedes any and all prior and/or contemporaneous written and/or oral agreements relating to such matters. You acknowledge that this letter agreement may not be modified except by written document, signed by you and the General Counsel of Kellogg.

	d.		Employment Relationship . You acknowledge and agree that your employment with the Company described in this letter agreement is an at-will employment relationship, and that only the General Counsel of Kellogg may modify this provision, and any modification must be in writing signed by both parties.

	e.		Counterparts . This letter agreement may be executed simultaneously in one or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same letter agreement.

Jeff, enclosed are two copies of this letter. If the letter is acceptable to you please sign both copies and return one to me for our files.

Sincerely,

/s/ David Mackay

David Mackay
President
Chief Executive Officer

I accept the terms of the agreement as presented in this letter this 23 ^rd day of July, 2007.

/s/ Jeffrey W. Montie
Jeffrey W. Montie

Exhibit 10.2

July 23, 2007

John A. Bryant
Kellogg Company
One Kellogg Square
Battle Creek, MI 49016

Dear John:

We are excited about you assuming the role of President, Kellogg North America and Chief Financial Officer for the Company. The purpose of this letter is to set forth terms of retention benefits that reflect your valuable contributions to the business and our desire that you remain with Kellogg Company (“Kellogg,” and together with its affiliates and subsidiaries, the “Company”) for the long term. The letter also includes non-compete and other commitments from you to the Company.

Retention.

	a.		In the event you are either terminated by the Company without “Cause” (as herein defined) or you terminate your employment with the Company for “Good Reason” (as herein defined) prior to November 6, 2020 (the “Retirement Date”), the date you are first able to retire from the Company under the terms of the Kellogg Company Pension Plan and Kellogg Company Executive Excess Plan (the “Pension Plans”), you will be eligible to receive the pension benefit you would have received under the current Pension Plans had you remained with the Company through the Retirement Date. This Pension benefit shall be payable from the Kellogg Company Executive Excess Plan.

	b.		For purposes of this letter agreement, termination for “Cause” means termination by the Company because of (i) your willful engaging in illegal conduct or gross misconduct pursuant to which the Company has suffered a loss, or (ii) your willful and continued refusal to perform substantially your duties hereunder in any material respect; provided, however, that in the case of clause (ii), the Company must provide written notice of such breach or refusal within thirty (30) days of its discovery thereof, and you shall have thirty (30) days from such written notice to cure such breach or refusal.

	c.		For purposes of this letter agreement, termination for “Good Reason” means termination by you because of (i) a reduction in your base salary, as in effect from time to time, except in connection with salary reductions which are generally implemented with respect to the Company’s senior executives, (ii)

			the Company’s failure to provide any fringe benefit plan or substantially similar benefit or compensation plan which is been made generally available to other management employees of the Company; provided, however, that nothing in this clause shall be construed to constrain the Company from amending or eliminating any benefit or compensation plan; (iii) a breach by the Company of its obligations to you under this letter agreement in any material respect, or (iv) a material reduction in your responsibilities or duties as in effect immediately prior to such change, provided however, that in the case of each of clauses (i) through (iv) hereof, you shall provide written notice of any such alleged action of the Company within thirty (30) days of the date you knew of such action and the Company shall have thirty (30) days from such written notice to cure such action.

	d.		Notwithstanding any other provision in this letter agreement, if (i) your employment is terminated prior to the Retirement Date and (ii) at the time of such termination, you qualify for benefits under the Company’s Change of Control Policy, then you shall be eligible for the benefits described in Paragraph 1 (a). In addition, if your employment is terminated by reason of your death or disability, you or your estate, as the case may be, shall be entitled to receive the benefits described in Paragraph 1 (a).

	e.		You shall be deemed a “Grandfathered Participant” under the Company’s qualified and non-qualified defined benefit pension plans (and any benefits payable under Paragraph 1 (a) will be calculated accordingly). This pension benefit shall be payable from the Kellogg Company Executive Excess Plan.

	f.		Notwithstanding any other provisions in this letter agreement, if you violate any of your obligations under this letter agreement, you shall not be entitled to any of the benefits described in this Paragraph 1.

	a.		directly or indirectly, accept any employment, consult for or with, or otherwise provide or perform any services of any nature to, for or on behalf of any person, firm, partnership, corporation or other business or entity that manufactures, produces, distributes or markets any of the Products (as herein defined) in the Geographic Area (as herein defined).

	b.		directly or indirectly, permit any business, entity or organization which you, individually or jointly with others, owns, manages, operates, or controls, to engage in the manufacture, production, distribution, sale or marketing of any of the Products in the Geographic Area.

			For purposes of this Paragraph, the term “Products” shall mean (i) ready-to-eat cereal products, toaster pastries, cereal bars, granola bars, crispy marshmallow squares, frozen waffles, frozen pancakes, fruit snacks, cookies, crackers, ice cream cones and meat substitutes; (ii) any other grain-based convenience food; or (iii) any other product which the Company manufactures, distributes, sells or markets at the time your employment ends with the Company. With respect to (iii) above, such products shall not include any product which the Company reasonably determines is insignificant to the Company. The term “Geographic Area” shall mean any territory, region or country where the Company sells any Products at any time during the applicable Restricted Period.

	3		Non-solicitation . You agree that during your active employment and thereafter for a period of three years, you shall not, without the prior written consent of the Chief Executive Officer of Kellogg, directly or indirectly employ, or solicit the employment of (whether as an employee, officer, director, agent, consultant or independent contractor) any person who is or was an officer, director, representative, agent or employee of the Company at any time during the two year period prior to your last day of employment.

	4		Non-Disparagement of the Company . You agree, during the term of your employment and thereafter, not to engage in any form of conduct or make any statements or representations that disparage, portray in a negative light, or otherwise impair the reputation, goodwill or commercial interests of the Company, or its past, present and future subsidiaries, divisions, affiliates, successors, officers, directors, attorneys, agents and employees.

	5.		Preservation of Company Confidential Information . You acknowledge that you will not (without first obtaining the prior written consent in each instance from the Company) during the term of your employment and thereafter, disclose, make commercial or other use of, give or sell to any person, firm or corporation, any information received directly or indirectly from the Company or acquired or developed in the course of your employment, including, by way of example only, trade secrets (including organizational charts, employee information such as credentials, skill sets and background information), ideas, inventions, methods, designs, formulas, systems, improvements, prices, discounts, business affairs, products, product specifications, manufacturing processes, data and know-how and technical information of any kind whatsoever unless such information has been publicly disclosed by authorized officials of the Company.

	6.		Release . In consideration of the compensation and benefits provided pursuant to this letter agreement, the sufficiency of which is hereby acknowledged, you, for yourself and for any person who may claim by or through you, irrevocably and unconditionally releases, waives and forever discharges the Company and its respective officers, directors, attorneys, agents and employees, from any and all claims or causes of action that you had, have or may have, known or unknown, relating to your employment with the Company up until the date of this letter agreement, including but not limited to, any claims arising under Title VII of the

			Civil Rights Act of 1964, as amended, Section 1981 of the Civil Rights Act of 1866, as amended, the Civil Rights Act of 1991, as amended, the Family and Medical Leave Act, the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act of 1990, the Americans with Disabilities Act, the Employee Retirement Income Security Act; claims under any other federal, state or local statute, regulation or ordinance; claims for discrimination or harassment of any kind, breach of contract or public policy, wrongful or retaliatory discharge, defamation or other personal or business injury of any kind; and any and all other claims to any form of legal or equitable relief, damages, compensation or benefits (except rights you may have under the Employee Retirement Income Security Act of 1974 to recover any vested benefits), or for attorneys fees or costs. You additionally waive and release any right you may have to recover in any lawsuit or proceeding against the Company brought by you, an administrative agency, or any other person on your behalf or which includes you in any class.

	7.		Miscellaneous .

	a.		Severability . You also agree that if any provision of this letter agreement is invalid or unenforceable by a court of law, (i) such provision shall be deemed to be amended so that the intent of the parties is fulfilled to the greatest extent possible; and (ii) it would not affect the validity or enforceability of any other provision of this letter agreement, which shall remain in full force and effect.

	b.		Controlling Law and Venue . You agree that the construction, interpretation, and performance of this letter agreement shall be governed by the laws of Michigan, including conflict of laws. It is agreed that any controversy, claim or dispute between the parties, directly or indirectly, concerning this letter agreement or the breach thereof shall only be resolved in the Circuit Court of Calhoun County, or the United States District Court for the Western District of Michigan, whichever court has jurisdiction over the subject matter thereof, and the parties hereby submit to the jurisdiction of said courts.

	c.		Entire Agreement; Amendment . You agree that this letter agreement constitutes the entire agreement between you and the Company with respect to the matters described herein, and that this letter agreement supersedes any and all prior and/or contemporaneous written and/or oral agreements relating to such matters. You acknowledge that this letter agreement may not be modified except by written document, signed by you and the General Counsel of Kellogg.

	d.		Employment Relationship . You acknowledge and agree that your employment with the Company described in this letter agreement is an at-will employment relationship, and that only the General Counsel of Kellogg may modify this provision, and any modification must be in writing signed by both parties.

Counterparts . This letter agreement may be executed simultaneously in one or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same letter agreement.

John, enclosed are two copies of this letter. If the letter is acceptable to you please sign both copies and return one to me for our files.

Sincerely,

/s/ David Mackay

David Mackay
President
Chief Executive Officer

I accept the terms of the agreement as presented in this letter this 23 ^rd day of July, 2007.

/s/ John A. Bryant
John A. Bryant

Exhibit 99.1

Media Contact:
Kris Charles
269-961-3799

Analysts Contact:
Simon Burton, CFA
269-961-6636

KELLOGG ANNOUNCES EXECUTIVE MANAGEMENT CHANGES
John A. Bryant to lead North American business, Jeffrey W. Montie to lead International business

BATTLE CREEK, Mich., July 23, 2007 — Kellogg Company (NYSE: K) today announced management changes intended to further broaden the experience of several of its senior executive leaders. John A. Bryant is appointed executive vice president, Kellogg Company, president, Kellogg North America. He will retain the role of chief financial officer. Previously he was executive vice president and chief financial officer, Kellogg Company, president, Kellogg International. Jeffrey W. Montie is appointed executive vice president, Kellogg Company, president, Kellogg International and will assume the additional responsibilities for leading the global innovation, marketing, consumer promotion, and sales teams. Previously he was executive vice president, Kellogg Company, president, Kellogg North America.

Both appointments are effective immediately. Bryant and Montie will continue to serve on the Global Leadership Team and report to David Mackay, president and chief executive officer, Kellogg Company. Supporting Bryant and Montie are senior and experienced leadership teams in both the international regions and U.S. business units.

“These organizational moves will further broaden John and Jeff’s considerable experience and reflect our Company’s continued commitment to deliver sustainable rates of growth,” said Mackay. “This shift in responsibilities leverages their capabilities, and offers new opportunities to enhance our bench strength.”

A 20-year veteran of Kellogg, Montie has been executive vice president of Kellogg Company since September 2003 and president, Kellogg North America since June 2004. He joined Kellogg Company in 1987 in the U.S. ready-to-eat cereal business. He has held general management positions in both the Kellogg North American and international businesses, including vice president, global innovation for Kellogg Europe.

Bryant was chief financial officer from February 2002 to June 2004 and president of Kellogg International since June 2004. In December 2006, he was renamed chief financial officer. He joined

-more-

Kellogg Company in 1998 and has served in a number of leadership positions in both the Kellogg North American and international businesses.

Additionally, the company announced the following organizational changes for its North American business: Paul Norman, senior vice president, Kellogg Company, president, U.S. Morning Foods will continue to manage the Morning Foods and Kashi business and additionally will have responsibility for our Frozen Foods business unit; Brad Davidson, senior vice president, Kellogg Company, president, U.S. Snacks will take on the added responsibility of overseeing the Canadian business unit. These changes are effective immediately.

“Our North American and International businesses have posted strong growth and returns in recent years; performance that has continued in the first half of 2007,” said Mackay. “I have every confidence that both businesses will continue to generate excellent results in the years to come under Jeff and John’s leadership.”

With 2006 sales of almost $11 billion, Kellogg Company (NYSE:K) is the world’s leading producer of cereal and a leading producer of convenience foods, including cookies, crackers, toaster pastries, cereal bars, fruit snacks, frozen waffles, and veggie foods. The company’s brands include Kellogg’s, Keebler, Pop-Tarts, Eggo, Cheez-It, Nutri-Grain, Special K, Rice Krispies, Murray, Austin, Morningstar Farms, Famous Amos, Carr’s, Plantation, Ready Crust and Kashi . Kellogg products are manufactured in 17 countries and marketed in more than 180 countries around the world. For more information, visit the company’s Web site at www.kelloggcompany.com .

###