EXHIBIT 3.2
BY-LAWS
of
GENERAL MILLS, INC.
as amended
through
December 13, 1993
INDEX OF BY-LAWS
Page
ARTICLE I. STOCKHOLDERS 1
Section 1. Place of Holding Meeting 1
Section 2. Quorum 1
Section 3. Adjournment of Meetings 1
Section 4. Annual Election of Directors 2
Section 5. Special Meetings: How Called 2
Section 6. Voting at Stockholders' Meetings 2
Section 7. Notice of Stockholders' Meetings 3
ARTICLE II. DIRECTORS. 3
Section 1. Organization 3
Section 2. Election of Officers 3
Section 3. Regular Meetings 3
Section 4. Special Meetings: How Called: Notice 3
Section 5. Number: Qualifications: Quorum: Term 4
Section 6. Place of Meetings 4
Section 7. Powers of Directors 4
Section 8. Vacancies. 4
Section 9. Resignation and Removal of Directors 4
Section 10. Compensation of Directors 5
Section 11. Executive Committee 5
Section 12. Executive Committee: Powers 5
Section 13. Executive Committee:Organization: Meetings,
Etc. 6
Section 14. Resignation and Removal of Member of
Executive Committee 6
Section 15. Vacancies in the Executive Committee 6
ARTICLE III. OFFICERS 6
Section 1. Titles. 6
Section 2. Chairman 7
Section 3. Vice Chairman 7
Section 4. President 7
Section 5. Vice President(s) 7
Section 6. Secretary 7
Section 7. Assistant Secretary 8
Section 8. Senior Vice President, Corporate Finance 8
Section 9. Director of Finance 8
Section 10. Senior Vice President, Financial Operations 8
Section 11. Resignation and Removal of Officers 9
Section 12. Salaries 9
ARTICLE IV. CAPITAL STOCK 9
Section 1. Issue of Certificates of Stock 9
Section 2. Transfer of Shares 9
Section 3. Dividends 10
Section 4. Lost Certificates 10
Section 5. Rules as to Issue of Certificates 10
Section 6. Holder of Record Deemed Holder in Fact 10
Section 7. Closing of Transfer Books or Fixing Record
Date 10
ARTICLE V. CONTRACTS, CHECKS, DRAFTS,
BANK ACCOUNTS, ETC 11
Section 1. Contracts, Etc.: How Executed 11
Section 2. Loans 11
Section 3. Deposits 11
Section 4. Checks, Drafts, Etc 11
Section 5. Transaction of Business 12
ARTICLE VI. MISCELLANEOUS PROVISIONS 12
Section 1(a) Fiscal Year 12
Section 1(b) Staff and Divisional Titles. 12
Section 2. Notice and Waiver of Notice 12
Section 3. Inspection of Books 13
Section 4. Construction 13
Section 5. Adjournment of Meetings.. 13
Section 6. Indemnification 13
Section 7. Resolution of Board of Directors Providing
for Issuance of Cumulative Preference
Stock 15
ARTICLE VII. AMENDMENTS 15
Section 1. Amendment of By-Laws 15
BY-LAWS
of
GENERAL MILLS, INC.
ARTICLE I
STOCKHOLDERS
SECTION 1. Place of Holding Meeting: Meetings of
stockholders may be held within or without the State of
Delaware, and, unless otherwise determined by the board of
directors or the stockholders, all meetings of the stockholders
shall be held at the principal office of the corporation in the
City of Minneapolis in the State of Minnesota. The place of
meeting of the stockholders for the election of directors shall
not be changed within sixty (60) days next before the day on
which the election is to be held. A notice of any change shall
be given to each stockholder entitled to vote, at least twenty
(20) days before the election is held, in person or by letter
mailed to him at his last-known post office address.
SECTION 2. Quorum: Any number of stockholders together
holding one-half (1/2) in amount of the stock issued and
outstanding entitled to vote, who shall be present in person or
represented by proxy at any meeting duly called, shall
constitute a quorum for the transaction of business, except as
may be otherwise provided by law, by the certificate of
incorporation, or by these by-laws. At any meeting of
stockholders for the election of directors at which any class or
classes of stock or any one or more series of any class or
classes of stock shall have a separate vote as such class or
series for the election of directors by such class or series,
the absence of a quorum of any other class of stock or of any
other series of any class of stock shall not prevent the
election of the directors to be elected by such class or series.
SECTION 3. Adjournment of Meetings: If less than a quorum
shall be in attendance at the time for which the meeting shall
have been called, the meeting may be adjourned from time to time
by a majority vote of the stockholders present or represented,
without any notice other than by announcement at the meeting,
until a quorum shall attend. Any meeting at which a quorum is
present may also be adjourned, in like manner, for such time, or
upon such call, as may be determined by vote. At any such
adjourned meeting at which a quorum may be present any business
may be transacted which might have been transacted at the
meeting as originally called. In the absence of a quorum of any
class or classes of stock or any one or more series of any class
or classes of stock at any meeting of stockholders at which more
than one class or series of stock shall be entitled to vote
separately as a class or series for the election of directors, a
majority in interest of the stockholders present in person or by
proxy of the class or classes or one or more series of stock
which lack a quorum shall also have the power to adjourn the
meeting for the election of directors which they are entitled to
elect, from time to time, without notice other than by
announcement at the meeting, until a quorum of such class or
classes or one or more series of stock shall be present.
SECTION 4. Annual Election of Directors: The annual
meeting of stockholders for the election of directors and the
transaction of other business shall be held on the fourth Monday
of September in each year at 1:00 o'clock in the afternoon,
standard time, unless, by a resolution adopted not later than
sixty (60) days before such date, the board of directors fixes
another date or time in the months of September or October for
the holding of such annual meeting. If the election of
directors shall not be had on the day designated herein for the
annual meeting or at an adjournment thereof, the board of
directors shall cause a meeting of the stockholders for the
election of a board of directors to be held as soon thereafter
as conveniently may be. At such meeting the stockholders may
elect the directors and transact other business with the same
force and effect as at an annual meeting duly called and held.
After the first election of directors no stock shall be
voted on at any election which shall have been transferred on
the books of the corporation within twenty (20) days next
preceding such election, except where the transfer books of the
corporation shall have been closed or a date shall have been
fixed as a record date for the determination of the stockholders
entitled to vote, as hereinafter in article IV, section 7 of
these by-laws provided.
The directors elected annually shall hold office until the
next annual election and until their successors are respectively
elected and qualified; provided, however, in the event that the
holders of any class or classes of stock or any one or more
series of any class or classes of stock have the right to elect
directors separately as a class or series and such right shall
have vested, such right may be exercised as provided in the
certificate of incorporation of the corporation.
The secretary shall prepare, or cause to be prepared, at
least ten (10) days before every election, a complete list of
stockholders entitled to vote, arranged in alphabetical order,
and such list shall be open at the place where the election is
to be held, for such ten (10) days, to the examination of any
stockholder, and shall be produced and kept at the time and
place of election during the whole time thereof, subject to the
inspection of any stockholder who may be present.
SECTION 5. Special Meetings: How Called: Special meetings
of the stockholders for any purpose or purposes may be called by
the chairman of the board of directors or by any three (3)
directors or by the holders of not less than one-third (1/3) in
interest of the stock of the corporation entitled to vote, or by
resolution of the board of directors. Special meetings of the
holders of any class or classes of stock or any one or more
series of any class or classes of stock for the purpose of
electing directors in accordance with a special right as a class
or series shall be called as provided in the certificate of
incorporation of the corporation.
SECTION 6. Voting at Stockholders' Meetings: The board of
directors shall determine the voting power of any cumulative
preference stock in accordance with article IV of the
certificate of incorporation. Each stockholder entitled to vote
shall have one (1) vote for each share of voting stock
registered in his name on the books of the corporation. At all
meetings of stockholders all questions, except as otherwise
provided by law or the certificate of incorporation, shall be
determined by a majority vote in interest of the stockholders
entitled to vote present in person or represented by proxy;
provided, however, that any qualified voter may demand a stock
vote, and in that case, such stock vote shall immediately be
taken. A stock vote shall be by ballot and each ballot shall be
signed by the stockholder voting, or by his proxy, if there be
such proxy, and shall state the number of shares voted. Shares
of its own capital stock belonging to the corporation shall not
be voted upon directly or indirectly. The vote on stock of the
corporation may be given by the stockholder entitled thereto in
person or by his proxy appointed by an instrument in writing,
subscribed by such stockholder or by his attorney thereunto
authorized, and delivered to the secretary of the meeting. No
proxy shall be voted on after three (3) years from its date,
unless said proxy provides for a longer period.
SECTION 7. Notice of Stockholders' Meetings: Written
notice, stating the time and place of the meeting and, in case
of a special meeting, stating also the general nature of the
business to be considered, shall be given by the secretary by
mailing, or causing to be mailed, such notice, postage prepaid,
to each stockholder entitled to vote, at his post office address
as the same appears on the stock books of the corporation, or by
delivering such notice to him personally, at least ten (10) days
before the meeting.
ARTICLE II
DIRECTORS
SECTION 1. Organization: The board of directors may hold
a meeting for the purpose of organization and the transaction of
other business, if a quorum be present, immediately before or
after the annual meeting of the stockholders and immediately
before or after any special meeting at which directors are
elected. Notice of such meeting need not be given. Such
organizational meeting may be held at any other time or place,
which shall be specified in a notice given as hereinafter
provided for special meetings of the board of directors, or in a
consent and waiver of notice thereof signed by all the
directors.
SECTION 2. Election of Officers: At such meeting the
board of directors may elect from among its number a chairman of
the board of directors, one or more persons to serve as a vice
chairman; a president and one or more corporate and company vice
presidents, a secretary, a treasurer, a controller, one or more
assistant secretaries, and one or more assistant treasurers who
need not be directors. Such officers shall hold office until
the next annual election of officers and until their successors
are respectively elected and qualified, unless removed by the
board of directors as provided in section 11 of article III.
SECTION 3. Regular Meetings: Regular meetings of the
board of directors shall be held on such dates as are
designated, from time to time, by resolutions of the board, and
shall be held at the principal office of the corporation,
or at such other location as the board selects. Each regular
meeting shall commence at the time designated by the Chairman of
the Board on at least five (5) days' written notice to each
director when sent by mail and on at least three (3) days'
notice when sent by private express carrier or transmitted by
telex, facsimile or similar means.
SECTION 4. Special Meetings: How Called: Notice:
Special meetings of the board of directors may be called by the
chairman of the board, a vice chairman of the board, the
president or by any three (3) directors who are not salaried
officers or salaried employees of the corporation. Written
notice of the time, place and purposes of each special meeting
shall be sent by private express carrier or transmitted by
telex, facsimile or similar means to each director at least
twenty-four (24) hours prior to such meeting. Notwith-standing
the preceding, any meeting of the board of directors shall be a
legal meeting without any notice thereof if all the members of
the board shall be present, or if all absent members waive
notice thereof.
SECTION 5. Number: Qualifications: Quorum: Term:
(a) The Board of Directors shall consist of fourteen (14)
members.
(b) No person shall be eligible to become or to remain a
director of the corporation unless he shall be a stockholder
in the corporation. Not more than six (6) of the members of
the board of directors shall be officers or employees of the
corporation, but the chairman of the board shall not be
deemed such an officer or employee.
(c) Subject to the provisions of the certificate of
incorporation, as amended, one-third (1/3) of the total
number of the directors (but in no event less than two (2))
shall constitute a quorum for the transaction of business.
The affirmative vote of the majority of the directors
present at a meeting at which a quorum is constituted shall
be the act of the board of directors, unless the certificate
of incorporation shall require a vote of a greater number.
(d) Except as otherwise provided in these by-laws,
directors shall hold office until the next succeeding annual
stockholders' meeting and thereafter until their successors
are respectively elected and qualified.
(e) Except as otherwise provided in the certificate of
incorporation or these by-laws, the number of directors may
by altered from time to time by amendment to the above sub-
section (a).
SECTION 6. Place of Meetings: The board of directors may
hold its meetings and keep the books of the corporation outside
of the State of Delaware, at any office or offices of the
corporation, or at any other place, as it may from time to time
by resolution determine.
SECTION 7. Powers of Directors: The board of directors
shall have the management of the business of the corporation,
and, subject to the restrictions imposed by law, by the
certificate of incorporation or by these by-laws, may exercise
all the powers of the corporation.
SECTION 8. Vacancies: Except as otherwise provided in the
certificate of incorporation, any vacancy in the board of
directors because of death, resignation, disqualification,
increase in number of directors, or any other cause may be
filled by a majority of the remaining directors, though less
than a quorum, at any regular or special meeting of the
directors; or any such vacancy resulting from any cause
whatsoever may be filled by the stockholders at the first annual
meeting held after such vacancy shall occur or at a special
meeting thereof called for the purpose.
SECTION 9. Resignation and Removal of Directors: Any
director of the corporation may resign at any time by giving
written notice to the chairman of the board or to the secretary
of the corporation. Such resignation shall take effect at the
time specified therein; and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to
make it effective. Except as otherwise provided in the
certificate of incorporation, any director may be removed,
either with or without cause, at any time, by the affirmative
vote of a majority in interest of the stockholders of the
corporation entitled to vote, given at a special meeting of the
stockholders called for the purpose; and the vacancy in the
board caused by any such removal may be filled by the
stockholders at such meeting.
SECTION 10. Compensation of Directors: The board of
directors shall have the authority to fix the compensation of
directors. In addition, each director shall be entitled to be
reimbursed by the corporation for his expenses incurred in
attending meetings of the board of directors or of any committee
of which he is a member. Nothing herein contained shall be
construed to preclude any director from serving the corporation
in any other capacity and receiving compensation for such
services from the corporation; provided, however, that any
person who is receiving a stated compensation as an officer of
the corporation for his services as such officer shall not
receive any additional compensation for services as a director
during such period. A director entitled to receive stated
compensation for his services as director, who shall serve for
only a portion of a year, shall be entitled to receive only that
portion of his annual stated compensation on which the period of
his service during the year bears to the entire year. The
annual compensation of directors shall be paid at such times and
in such installments as the board of directors may determine.
SECTION 11. Executive Committee:
(a) The board of directors may appoint from its number an
executive committee of not less than eight (8) members.
(b) Not more than four (4) members shall be officers or
employees of the corporation but the chairman of the board
shall not be deemed such an officer or employee.
(c) A majority shall constitute a quorum, and in every
case the affirmative vote of a majority of all the members
of the committee shall be necessary for the adoption of any
motion, provided that in order to procure and maintain a
quorum at any meeting of the executive committee in the
absence or disqualification of any member of such committee,
the member or members thereof present at such meeting and
not disqualified from voting, whether or not he or they
constitute a quorum, may unanimously appoint another member
of the board of directors (subject always to the limitations
of subsection (b) above) to act at the meeting in the place
of any such absent or disqualified member.
(d) Each member of the executive committee, if appointed,
shall hold office until the election at the next succeeding
annual meeting of the stockholders of the corporation of a
new board of directors; subject to the provisions of section
14 of this article.
SECTION 12. Executive Committee: Powers: During the
intervals between the meetings of the board of directors, the
executive committee shall have and may exercise all the powers
of the board of directors in the management of the business and
affairs of the corporation, including power to authorize the
execution of any papers and to authorize the seal of the
corporation to be affixed to all papers which may require it,
in such manner as such committee shall deem best for the interests
of the corporation, in all cases in which specific directions
shall not have been given by the board of directors.
SECTION 13. Executive Committee: Organization: Meetings,
Etc.: The chairman of the executive committee shall preside at
all meetings of the executive committee and the secretary of the
corporation shall act as secretary of the executive committee.
In the absence of the chairman of the executive committee the
committee shall appoint another member thereof to act as
chairman of the meeting, and in the absence of the secretary, an
assistant secretary of the corporation shall act as secretary of
the meeting. In the absence of all of such persons, the
committee shall appoint a chairman or a secretary of the
meeting, as the case may be. If an executive committee shall be
appointed it shall hold regular meetings without notice on each
day excepting only Sundays and holidays at 9:00 o'clock in the
forenoon and at 2:30 o'clock in the afternoon. Failure of such
committee to meet at such hours on any day or for a series of
days shall not invalidate any subsequent meeting of the
committee held on any day at an hour herein specified. Such
regular meetings of such committee shall be held at the
principal office of the corporation, or at such other office of
the corporation as such committee by resolution may from time to
time designate as the place for the holding of such regular
meetings, in which latter event the place so designated shall
constitute the place at which such meetings shall be held until
such committee shall by resolution designate a different place
for the holding of such regular meetings. A special meeting of
the executive committee may be called by the chairman of the
board, the chairman of the executive committee or the secretary
of the corporation upon such notice as may be given for special
meetings of the board of directors. Any meeting of the
executive committee shall be a legal meeting without notice
thereof if all the members of the committee shall be present or
if all absent members waive notice thereof. The committee shall
keep a record of its acts and proceedings and report thereon to
the board of directors at the regular meeting thereof held next
after they shall have been taken.
SECTION 14. Resignation and Removal of Member of Executive
Committee: Any member of the executive committee may resign at
any time or may be removed at any time either with or without
cause by resolution adopted by a majority of the whole board of
directors at any meeting of the board of directors at which a
quorum is present.
SECTION 15. Vacancies in the Executive Committee: Any
vacancy in the executive committee shall be filled in the manner
prescribed by these by-laws for the original appointment of such
committee.
ARTICLE III
OFFICERS
SECTION 1. Titles: The corporate and company officers to be
elected by the board of directors shall be a chairman of the
board of directors and one or more persons to serve as a vice
chairman, and a president, who shall be directors, and one or
more corporate or company vice presidents, a secretary, a senior
vice president, corporate finance, a senior vice president,
financial operations, one or more assistant secretaries, and one
or more directors of finance who need not be directors. The
board shall designate one of the corporate officers to serve as
chief executive officer.
SECTION 2. Chairman: The chairman of the board of directors
shall preside at all meetings of the board, all meetings of the
stockholders, as well as all meetings of the executive
committee. The chairman, upon being designated the
chief executive officer, shall have supervisory authority over
the policies of the corporation as well as the management and
control of the business and affairs of the corporation. He
shall also exercise such other powers as the board of directors
may from time to time direct or which may be required by law.
SECTION 3. Vice Chairman: The officer or officers serving
as vice chairman shall have such duties and responsibilities
relating to the management of the corporation as may be defined
and designated by the chief executive officer or the board of
directors.
SECTION 4. President: The president shall have responsibility
for the management of the operating businesses of the corporation
and shall do and perform all acts incident to the office of president
or which are authorized by the chief executive officer, the board of
directors or as may be required by law.
SECTION 5. Vice President(s): Each corporate vice president
shall have such designations and such powers and shall perform
such duties as may be assigned by the board of directors or the
chief executive officer. The board of directors may designate
one or more corporate vice presidents to be a senior executive
vice president, executive vice president, senior vice president,
or group vice president.
Each company vice president shall have such designations and
such powers, and shall perform such duties as may be assigned to
him by the board of directors, the chief executive officer or by
a corporate vice president.
SECTION 6. Secretary: The secretary shall:
(a) keep the minutes of the meetings of the stockholders,
of the board of directors and of the executive committee in
books provided for the purpose;
(b) see that all notices are duly given in accordance
with the provisions of these by-laws or as required by law;
(c) be custodian of the records and have charge of the
seal of the corporation and see that it is affixed to all
stock certificates prior to their issuance and to all
documents the execution of which on behalf of the
corporation under its seal is duly authorized in accordance
with the provisions of these by-laws;
(d) have charge of the stock books of the corporation and
keep or cause to be kept the stock and transfer books in
such manner as to show at any time the amount of the stock
of the corporation issued and outstanding, the manner in
which and the time when such stock was paid for, the names,
alphabetically arranged, and the addresses of the holders of
record thereof, the number of shares held by each, and the
time when each became such holder of record; exhibit or
cause to be exhibited at all reasonable times to any
director, upon application, the original or duplicate stock
ledger;
(e) see that the books, reports, statements, certificates
and all other documents and records required by law are
properly kept, executed and filed; and
(f) in general, perform all duties incident to the office
of secretary, and such other duties as from time to time may
be assigned to him by the board of directors.
SECTION 7. Assistant Secretary: The board of directors may
elect an assistant secretary or more than one assistant
secretary. At the request of the secretary, or in his absence
or disability, an assistant secretary may perform all the duties
of the secretary, and, when so acting, he shall have all the
powers of, and be subject to all the restrictions upon, the
secretary. Each assistant secretary shall have such other
powers and shall perform such other duties as may be assigned to
him by the board of directors.
SECTION 8. Senior Vice President, Corporate Finance: The
senior vice president, corporate finance, if required so to do
by the board of directors, shall give a bond for the faithful
discharge of his duties in such sum, and with such sureties, as
the board of directors shall require. The senior vice president,
corporate finance shall:
(a) have charge and custody of, and be responsible for,
all funds and securities of the corporation coming into his
hands (until he has deposited the same to the credit or
account of the corporation with an authorized depositary)
and deposit all such funds in the name of the corporation in
such banks, banking firms, trust companies or other
depositaries as shall be selected in accordance with the
provisions of article V of these by-laws;
(b) exhibit at all reasonable times his books of account
and records to any of the directors of the corporation upon
application during business hours at the office of the
corporation where such books and records are kept;
(c) receive, and give receipt for, moneys due and payable
to the corporation from any source whatsoever; and
(d) in general, perform all the duties incident to the
office of senior vice president, corporate finance and such
other duties as from time to time may be assigned to him by
the board of directors.
SECTION 9. Director of Finance: The board of directors may
elect a director of finance or more than one director of
finance. At the request of the senior vice president, corporate
finance, or in his absence or disability, a director of finance
may perform all the duties of the senior vice president,
corporate finance, and, when so acting, he shall have all the
powers of, and be subject to all the restrictions upon, the
senior vice president, corporate finance. Each director of
finance shall have such other powers and shall perform such
other duties as may be assigned to him by the board of
directors.
SECTION 10. Senior Vice President, Financial Operations:
The senior vice president, financial operations shall perform
all of the duties incident to the office of senior vice
president, financial operations, as such duties may from time to
time be designated or approved by the board of directors.
Included in such duties shall be the establishment and
maintenance of sound accounting and auditing policies and
practices, in respect to which duties he shall be responsible
directly to the board of directors through its chairman.
SECTION 11. Resignation and Removal of Officers: Any
officer of the corporation may resign at any time by giving
written notice to the chairman of the board or to the secretary.
Such resignation shall take effect at the time specified
therein, and unless otherwise specified therein the acceptance
of such resignation shall not be necessary to make it effective.
Any officer may be removed for cause at any time by a
majority of the board of directors and any officer may be
removed summarily without cause by such vote.
SECTION 12. Salaries: The salaries of officers shall be
fixed from time to time by the board of directors or the
executive committee or other committee appointed by the board.
The board of directors or the executive committee of the board
may authorize and empower the chief executive officer, any vice
chairman, or any vice president of the corporation designated by
the board of directors or by the executive committee to fix the
salaries of all officers of the corporation who are not
directors of the corporation. No officer shall be prevented
from receiving a salary by reason of the fact that he is also a
director of the corporation.
ARTICLE IV
CAPITAL STOCK
SECTION 1. Issue of Certificates of Stock: Certificates for
the shares of the capital stock of the corporation shall be in
such forms as shall be approved by the board of directors. Each
stockholder shall be entitled to a certificate for his shares of
stock under the seal of the corporation, signed by the chairman,
a vice chairman or a vice president and also by the secretary or
an assistant secretary or by the senior vice president,
corporate finance or a director of finance; provided, however,
that where a certificate is countersigned by a transfer agent,
other than the corporation or its employee, or by a registrar,
other than the corporation or its employee, the corporate seal
and any other signature on such certificate may be a facsimile,
engraved, stamped or printed. In case any officer, transfer
agent or registrar of the corporation who shall have signed, or
whose facsimile signature shall have been used on any such
certificate, shall cease to be such officer, transfer agent or
registrar, whether because of death, resignation, or otherwise,
before such certificate shall have been delivered by the
corporation, such certificate shall nevertheless be deemed to
have been adopted by the corporation and may be issued and
delivered as though the person who signed such certificate or
whose facsimile signature shall have been used thereon had not
ceased to be such officer, transfer agent or registrar.
SECTION 2. Transfer of Shares: The shares of stock of the
corporation shall be transferable upon its books by the holders
thereof in person or by their duly authorized attorneys or legal
representatives, and upon such transfer the old certificates
shall be surrendered to the corporation by the delivery thereof
to the person in charge of the stock and transfer books and
ledgers, or to such other person as the board of directors may
designate, by whom they shall be cancelled, and new certificates
shall thereupon be issued for the shares so transferred to the
person entitled thereto. A record shall be made of each
transfer and whenever a transfer shall be made for collateral
security, and not absolutely, it shall be so expressed in the
entry of the transfer.
SECTION 3. Dividends: The board of directors may declare
lawful dividends as and when it deems expedient. Before
declaring any dividend, there may be reserved out of the
accumulated profits such sum or sums as the board of directors
from time to time, in its discretion, thinks proper for working
capital or as a reserve fund to meet contingencies or for
equalizing dividends, or for such other purposes as the board of
directors shall think conducive to the interests of the
corporation.
SECTION 4. Lost Certificates: Any person claiming a
certificate of stock to be lost or destroyed shall make an
affidavit or affirmation of that fact, and if requested to do so
by the board of directors of the corporation shall advertise
such fact in such manner as the board of directors may require,
and shall give to the corporation, its transfer agent and
registrar, if any, a bond of indemnity in such sum as the board
of directors may direct, but not less than double the value of
stock represented by such certificate, in form satisfactory to
the board of directors and to the transfer agent and registrar
of the corporation, if any, and with or without sureties as the
board of directors with the approval of the transfer agent and
registrar, if any, may prescribe; whereupon the chairman, a vice
chairman or a vice president and the senior vice president,
corporate finance or a director of finance or the secretary or
an assistant secretary may cause to be issued a new certificate
of the same tenor and for the same number of shares as the one
alleged to have been lost or destroyed. The issuance of such
new certificates shall be under the control of the board of
directors.
SECTION 5. Rules as to Issue of Certificates: The board of
directors may make such rules and regulations as it may deem
expedient concerning the issue, transfer and registration of
certificates of stock of the corporation. It may appoint one or
more transfer agents and/or registrars of transfers, and may
require all certificates of stock to bear the signature of
either or both. Each and every person accepting from the
corporation certificates of stock therein shall furnish the
corporation with a written statement of his or her residence or
post office address, and in the event of changing such residence
shall advise the corporation of such new address.
SECTION 6. Holder of Record Deemed Holder in Fact: The
board of directors 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 or
shares on the part of any other person, whether or not it shall
have express or other notice thereof, save as expressly provided
by law.
SECTION 7. Closing of Transfer Books or Fixing Record Date:
The board of directors shall have the power to close the stock
transfer books of the corporation for a period not exceeding
sixty (60) days preceding the date of any meeting of
stockholders or the date for payment of any dividend or the date
for the allotment of rights or the date when any change or
conversion or exchange of capital stock shall go into effect;
provided, however, that in lieu of closing the stock transfer
books as aforesaid, the board of directors may fix in advance a
date, not exceeding sixty (60) days preceding the date of any
meeting of stockholders or the date for the payment of any
dividend, or the date for the allotment of rights, or the date
when any change or conversion or exchange of capital stock shall
go into effect, as a record date for the determination of the
stockholders entitled to notice of, and to vote at, any such
meeting, or entitled to receive payment of any such dividend, or
to any such allotment of rights, or to exercise the rights in
respect of any such change, conversion or exchange of capital
stock, and in such case 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, 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 the
corporation after any such record date fixed as aforesaid.
ARTICLE V
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
SECTION 1. Contracts, Etc.: How Executed: The board of
directors or such officer or person to whom such power shall be
delegated by the board of directors by resolution, except as in
these by-laws otherwise provided, may authorize any officer or
officers, agent or agents, either by name or by designation of
their respective offices, positions or class, to enter into any
contract or execute and deliver any instrument in the name of
and on behalf of the corporation, and such authority may be
general or confined to specific instances; and, unless so
authorized, no officer, agent or employee shall have any power
or authority to bind the corporation by any contract or
engagement, or to pledge its credit or to render it liable
pecuniarily for any purpose or in any amount.
SECTION 2. Loans: No loans shall be contracted on behalf of
the corporation and no negotiable paper shall be issued in its
name, unless and except as authorized by the vote of the board
of directors or by such officer or person to whom such power
shall be delegated by the board of directors by resolution.
When so authorized by the board of directors or by such officer
or person to whom such power shall be delegated by the board of
directors by resolution, any officer or agent of the corporation
may obtain loans and advances at any time for the corporation
from any bank, banking firm, trust company or other institution,
or from any firm, corporation or individual, and for such loans
and advances may make, execute and deliver promissory notes,
bonds or other evidences of indebtedness of the corporation,
and, when authorized as aforesaid to give security for the
payment of any loan, advance, indebtedness or liability of the
corporation, may pledge, hypothecate or transfer any and all
stocks, securities and other personal property at any time held
by the corporation, and to that end endorse, assign and deliver
the same, but only to the extent and in the manner authorized by
the board of directors. Such authority may be general or
confined to specific instances.
SECTION 3. Deposits: All funds of the corporation shall be
deposited from time to time to the credit of the corporation
with such banks, banking firms, trust companies or other
depositaries as the board of directors may select or as may be
selected by any officer or officers, agent or agents of the
corporation to whom such power may be delegated from time to
time by the board of directors.
SECTION 4. Checks, Drafts, Etc.: All checks, drafts or
other orders for the payment of money, notes, acceptances, or
other evidences of indebtedness issued in the name of the
corporation, shall be signed by such officer or officers, agent
or agents of the corporation and in such manner as shall be
determined from time to time by resolution of the board of
directors or by such officer or person to whom such power of
determination shall be delegated by the board of directors by
resolution. Endorsements for deposit to the credit of the
corporation in any of its authorized depositaries may be made,
without any countersignature, by the chairman of the board, a
vice chairman, or any vice president, or the senior vice
president, corporate finance or any director of finance, or by
any other officer or agent of the corporation appointed by any
officer of the corporation to whom the board of directors, by
resolution, shall have delegated such power of appointment, or
by hand-stamped impression in the name of the corporation.
SECTION 5. Transaction of Business: The corporation, or any
division or department into which any of the business or
operations of the corporation may have been divided, may
transact business and execute contracts under its own corporate
name, its division or department name, a trademark or a trade
name.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 1.
(a) Fiscal Year: The fiscal year of the corporation
shall end with the last Sunday of May of each year.
(b) Staff and Divisional Titles: The chief executive
officer may appoint at his discretion such persons to hold
the title of staff vice president, divisional president or
divisional vice president or other similar designation.
Such persons shall not be officers of the corporation and
shall retain such title at the sole discretion of the chief
executive officer who may at his will and from time to time
make or revoke such designation.
SECTION 2. Notice and Waiver of Notice: Whenever any notice
is required by these by-laws to be given, personal notice to the
person is not meant unless expressly so stated; and any notice
so required shall be deemed to be sufficient if given by
depositing the same in a post office or post box in a sealed
postpaid wrapper, addressed to the person entitled thereto at
his post office address as shown on the stock books of the
corporation, in case of a stockholder, and at his last known
post office address in case of an officer or director who is not
a stockholder; and such notice shall be deemed to have been
given on the day of such deposit. In the case of notice by
private express carrier, telex, facsimile or similar means,
notice shall be deemed to be sufficient if transmitted or sent
to the person entitled to notice or to any person at the
residence or usual place of business of the person entitled to
notice who it is reasonably believed will convey such notice to
the person entitled thereto; and notice shall be deemed to have
been given at the time of receipt at such residence or place of
business. Any notice required by these by-laws may be given to
the person entitled thereto personally and attendance of a
person at a meeting shall constitute a waiver of notice of such
meeting. Whenever notice is required to be given under these by-
laws, a written waiver thereof, signed by the person entitled to
notice, whether before or after the time stated therein, shall
be deemed equivalent to notice.
SECTION 3. Inspection of Books: The board of directors
shall determine from time to time whether and, if allowed, when
and under what conditions and regulations the accounts, records
and books of the 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.
SECTION 4. Construction: All references herein (i) in the
plural shall be construed to include the singular, (ii) in the
singular shall be construed to include the plural and (iii) in
the masculine gender shall be construed to include the feminine
gender, if the context so requires.
SECTION 5. Adjournment of Meetings: If less than a quorum
shall be present at any meeting of the board of directors of the
corporation, or of the executive committee of the board, or
other committee, the meeting may be adjourned from time to time
by a majority vote of members present, without any notice other
than by announcement at the meeting, until a quorum shall
attend. Any meeting at which a quorum is present may also be
adjourned in like manner, for such time or upon such call, as
may be determined by vote. At any such adjourned meeting at
which a quorum may be present, any business may be transacted
which might have been transacted at the meeting originally held
if a quorum had been present thereat.
SECTION 6. Indemnification:
(a) 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 the corporation)
by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving
at the request of the 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 the
corporation, and, with respect to any criminal action or
proceeding, had 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 the
corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct
was unlawful.
(b) 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 the corporation to procure a judgment in its favor
by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving
at the request of the 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 the 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 the corporation unless and only to the
extent that the Court of Chancery 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.
(c) To the extent that a director, officer, employee or
agent of the corporation has been successful on the merits
or otherwise in defense of any action, suit or proceeding
referred to in subsections (a) and (b), or in defense of any
claim, issue or matter therein, he shall be indemnified or
reimbursed against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection
therewith.
(d) Any indemnification under sub-sections (a) and (b)
(unless ordered by a court) shall be made by the 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 sub-sections (a)
and (b) of this section. 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.
(e) Expenses (including attorneys' fees) incurred by an
officer or director in defending a civil, criminal,
administrative or investigative action, suit or proceeding
shall be paid by the corporation in advance of the final
disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be
determined that such person is not entitled to be
indemnified by the corporation as authorized in this
section. Such expenses incurred by other employees and
agents may be so paid upon such terms and conditions, if
any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other subsections
of this section shall not be deemed exclusive of any other
rights to which those seeking indemnification or advancement
of expenses may be entitled under any by-law, agreement,
vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as
to action in another capacity while holding such office.
(g) The corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or
is or was serving at the request of the 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 the corporation would have the power to
indemnify him against such liability under the provisions of
this section.
(h) For purposes of this section, references to "the
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 this section with respect to the resulting or
surviving corporation as he would have with respect to such
constituent corporation if its separate existence had
continued.
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans;
references to "fines" shall include any excise taxes
assessed on a person with respect to am employee benefit
plan; and references to "serving at the request of the
corporation" shall include any service as a director,
officer, employee or agent of the 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 the
corporation" as referred to in this section.
(j) The indemnification and advancement of expenses
provided by, or granted pursuant to, this section 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 heirs, executors and administrators of such a person.
SECTION 7. Resolution of Board of Directors Providing for
Issuance of Cumulative Preference Stock: For purposes of these
by-laws the certificate of incorporation shall be deemed to
include any certificate filed and recorded in accordance with
section 151(g) of the Delaware Corporation Law which, in
accordance with said section, sets forth the resolution or
resolutions adopted by the board of directors providing for the
issuance of cumulative preference stock or any series thereof.
ARTICLE VII
AMENDMENTS
SECTION 1. Amendment of By-Laws: All by-laws of the
corporation shall be subject to alteration or repeal, and new by-
laws may be made, either by the stockholders at an annual
meeting or at any special meeting, provided notice of the
proposed alteration or repeal or of the proposed new by-laws be
included in the notice of any such special meeting, or by the
affirmative vote of a majority of the whole board of directors
of the corporation at any regular meeting or at any special
meeting of the board of directors, provided that notice of the
proposed alteration or repeal or of the proposed new by-laws be
included in the notice of any such special meeting; but the time
and place for the election of directors shall not be changed
within sixty (60) days next before the day on which the election
is to be held, as in these by-laws provided; and provided
further that no by-law shall be adopted which shall be in
conflict with the provisions of the certificate of incorporation
or any amendment thereto. By-laws made or altered by the
stockholders or by the board of directors shall be subject to
alteration or repeal either by the stockholders or by the board
of directors; provided, however, that the board of directors
shall have no power or authority to alter or repeal sub-section
(b) of section 5 or sub-section (b) of section 11 of article II
of these by-laws respecting eligibility of officers or employees
of the corporation as members of the board of directors and of
the executive committee of the board, or to make any alteration
in sub-section (a) of section 5 or in sub-section (a) of section
11 of said article II which would reduce the number composing
the board of directors below twelve (12) or the number composing
the executive committee below eight (8); the sole right to make
any such change being reserved to the stockholders. So long as
any class or classes of stock or any one or more series of any
class or classes of stock which have a separate vote as such
class or series for the election of directors by such class or
series shall be outstanding, no alteration, amendment, or repeal
of the provisions of sections 2, 3, 4, 5 and 6 of article I,
sections 1, 5, 8 and 9 of article II, section 7 of article VI,
and article VII of these by-laws which affects adversely the
rights or preferences of any such outstanding class or series of
stock shall be made without the consent or affirmative vote of
the holders of at least two-thirds (2/3) of each such class or
series entitled to vote; provided, however, that any increase or
decrease in the number of directors set forth in the first
sentence of sub-section (a) of section 5 of article II shall not
be deemed adversely to affect such rights or preferences.
EXHIBIT 10.1
GENERAL MILLS, INC.
STOCK OPTION AND LONG-TERM INCENTIVE PLAN OF 1988
As Amended Through June 27, 1994
GENERAL MILLS, INC.
STOCK OPTION AND LONG-TERM INCENTIVE PLAN OF 1988
1. PURPOSE OF THE PLAN
The purpose of the General Mills, Inc. Stock Option and
Long-Term Incentive Plan of 1988 (the "Plan") is to
attract and retain strong management employees by
rewarding certain officers and key employees of General
Mills, Inc. (the "Corporation") and its subsidiaries who
are primarily responsible for the management, growth and
sound development of the business of the Corporation.
2. EFFECTIVE DATE OF PLAN
This Plan shall become effective as of September 26,
1988, subject to the approval of the stockholders of the
Corporation at the Annual Meeting on September 26, 1988.
3. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Compensation
Committee (the "Committee"). The Committee shall be made
up of non-management members of the Board of Directors
(the "Board") appointed in accordance with the
Corporation's Certificate of Incorporation. The
Committee shall have authority to adopt rules and
regulations for carrying out the purpose of the Plan,
select the employees to whom grants will be made, the
number of shares to be optioned or awarded and interpret,
construe and implement the provisions of the Plan;
provided that if at any time Rule 16b-3 or any successor
rule ("Rule 16b-3") under the Securities Exchange Act of
1934, as amended (the "1934 Act"), so permits without
adversely affecting the ability of the Plan to comply
with the conditions for exemption from Section 16 of the
1934 Act (or any successor provisions) provided by Rule
16b-3, the Committee may delegate the administration of
the Plan in whole or in part, on such terms and
conditions, and to such person or persons as it may
determine in its discretion, as it relates to persons not
subject to Section 16 of the 1934 Act, or any successor
provision. Decisions of the Committee (or its delegate
as permitted herein) shall be final, conclusive and
binding upon all parties, including the Corporation,
stockholders and optionees.
4. COMMON STOCK SUBJECT TO THE PLAN
The shares of Common Stock of the Corporation ($.10 par
value) to be issued upon exercise of a Stock Option, as
Restricted Stock, or upon expiration of the restricted
period for Restricted Stock Units, may be made available
from the authorized but unissued Common Stock, shares of
Common Stock held in the treasury, or Common Stock
purchased on the open market or otherwise.
Approval of the Plan by the stockholders of the
Corporation shall constitute authorization to use such
shares for the Plan, subject to the discretion of the
Board or as such discretion may be delegated to the
Committee.
The Committee, in its discretion, may require as a
condition to the grant of Stock Options, Restricted Stock
or Restricted Stock Units, the deposit of Common Stock
("Deposit Shares") by the person receiving such grant,
and the forfeiture of such Stock Options, Restricted
Stock or Restricted Stock Units, if such deposit is not
made or maintained during the option period or the
applicable restricted period. Such shares of deposited
Common Stock may not be otherwise sold, exchanged,
transferred, pledged or disposed of during the applicable
option period or restricted period. The Committee may
also determine whether any shares issued in respect of a
Stock Option shall be restricted in any manner.
Subject to the provisions of the next succeeding
paragraph, the maximum aggregate number of shares
originally authorized under the Plan for which Stock
Options, Restricted Stock and Restricted Stock Units
could be granted under the Plan was 6,000,000 shares. As
of September 20, 1993, and subject to the provisions of
the next succeeding paragraph, there remain 798,050
shares authorized to be issued under the Plan (as
adjusted for stock splits). If a Stock Option granted
under the Plan is terminated without having been
exercised in full, the unpurchased shares shall become
available for grant to other employees, except when a Non-
Qualified Stock Option is terminated as a result of a
withdrawal from an optionee's Performance Unit Account.
The number of shares subject to the Plan, the outstanding
options, the outstanding Restricted Stock, the
outstanding Restricted Stock Units and the exercise price
per share of outstanding options may be appropriately
adjusted by the Committee in the event that:
(i) the number of outstanding shares of Common
Stock of the Corporation shall be changed by
reason of split-ups, combinations or
reclassifications of shares;
(ii) any stock dividends are distributed to
the holders of Common Stock of the Corporation;
or
(iii) the Common Stock of the Corporation is
converted into or exchanged for other shares as
a result of any merger or consolidation
(including a sale of assets) or other
recapitalization.
5. ELIGIBLE PERSONS
Only persons who are officers or key employees of the
Corporation or a subsidiary shall be eligible to receive
grants under the Plan. No grant shall be made to any
member of the Committee or any other non-employee
Director.
6. PURCHASE PRICE OF STOCK OPTIONS
The purchase price for each share of Common Stock
issuable under a Stock Option shall not be less than 100%
of the Fair Market Value of the shares of Common Stock of
the Corporation subject to such option on the date of
grant. "Fair Market Value" as used in the Plan shall
equal the mean of the high and low price of shares of the
Common Stock on the New York Stock Exchange on the
applicable date.
7. STOCK OPTION TERM
The term of any Stock Option grant as determined by the
Committee shall not exceed 10 years and 1 month from the
date of that grant and shall expire as of the last day of
the designated term, unless terminated earlier under the
provisions of the Plan.
8. STOCK OPTION TYPE
The Committee shall determine whether stock option grants
will be Non-Qualified Stock Options governed by section
83 of the Internal Revenue Code of 1986, as amended (the
"Code") or Incentive Stock Options governed by section
422A of the Code or stock options governed by any other
newly enacted provision of the Code.
9. INCENTIVE STOCK OPTIONS
No optionee may be granted an Incentive Stock Option,
under this or any other stock option plan of the
Corporation, with respect to which the Fair Market Value
of shares subject to such Incentive Stock Option and
which first become exercisable in a specified calendar
year exceed $100,000. For purposes of this Section, the
Fair Market Value of such shares shall be determined on
the date of the grant.
10. PERFORMANCE UNITS
At the time of the granting of Non-Qualified Stock
Options, the Corporation may grant corresponding
Performance Units to the optionee, less than or equal in
number to the shares covered by the option grant.
In each fiscal year of the Corporation in which
Performance Units may be granted, the Committee shall
establish goals for
(i) the compound growth in earnings per share
("EPS") for the Corporation over 3 fiscal years
(the "Performance Period"); and
(ii) the after-tax return on average stockholder
equity ("ROE") for the Corporation for the
final fiscal year of the Performance
Period.
The Committee shall specify the Performance Unit values
to be earned at various actual rates of EPS growth and
ROE. "EPS" means the Corporation's earnings from
continuing operations per common share and common share
equivalent (before extraordinary items) as reported in
the Corporation's financial statements included in the
Corporation's annual report for the final fiscal year of
the Performance Period. The compound growth rate in EPS
shall be calculated by comparing the EPS for the final
fiscal year of the Performance Period and the EPS for the
fiscal year immediately preceding the Performance Period.
"ROE" means the Corporation's after-tax earnings, divided
by its average equity, which is the sum of beginning and
ending total stockholders' equity for such fiscal year
divided by 2. EPS and ROE shall be subject to such
adjustments as may be determined by the Committee. An
optionee shall have no vested right to the value of a
Performance Unit until the end of the Performance Period,
except as set forth below.
A Performance Unit Account shall be established for each
optionee for each fiscal year in which Performance Unit
grants are made under the Plan. The value of the
Performance Units when determined shall be credited to
the optionee's Performance Unit Account, and such amount
shall thereafter earn interest at an annual rate
determined by the Committee; provided, that no such
interest rate shall exceed two-thirds of the
Corporation's "return on average capital structure,"
defined as earnings after-tax plus after-tax interest
expense, divided by average capital structure. "Average
capital structure" is the sum of beginning and ending
stockholders' equity and interest bearing obligations,
both current and long-term, divided by 2. The optionee's
Performance Unit Account shall be credited with such
interest on such Performance Units at the end of each
fiscal quarter of the Corporation until:
(i) such Performance Units are withdrawn from
the Account by the optionee; or
(ii) the corresponding Non-Qualified Stock
Options have been exercised, provided that no
interest shall be paid beyond the term of the
corresponding Non-Qualified Stock Option.
In the event of a Change of Control as described in
Section 15, Performance Units which have not been valued
shall be immediately valued at the maximum amount
specified by the Committee for the pro-rata portion of
the Performance Period completed to the date of the
Change of Control, and credited to each optionee's
Performance Unit Account.
Performance Units may be granted commencing in fiscal
year 1989, and each fiscal year thereafter until the
termination of the Plan. Accruals of the Performance
Units (but not the accumulating interest) shall be
charged annually against the Corporation's profit sharing
fund established in accordance with the resolution
approved by the stockholders in 1933, as amended in 1953
and 1968.
11. RESTRICTED STOCK AND RESTRICTED STOCK UNITS
A. Grant of Awards
With respect to awards of Restricted Stock and
Restricted Stock Units, the Committee shall:
(i) select those employees to whom awards will be
made ("the Participants"), provided that
Restricted Stock Units may only be awarded to
those officers or key employees of the
Corporation or a subsidiary who are employed in
a country other than the United States;
(ii) determine the number of shares of Restricted
Stock or the number of Restricted Stock Units to
be awarded;
(iii) determine the length of the restricted period;
(iv) determine the purchase price, if any, to be paid
by the Participant for (a) shares of Restricted
Stock at the time of the award, or (b)
Restricted Stock Units at the expiration of the
applicable restricted period; and
(v) determine any restrictions other than those set
forth in this Section 11.
Each Participant who receives shares of Restricted
Stock shall deliver to the Corporation a stock power
endorsed in blank relating to the Restricted Stock
prior to issuance of Restricted Stock. A certificate
for the shares of Restricted Stock shall be issued and
registered in the name of the Participant and shall
bear an appropriate restrictive legend. Such
certificates shall be held in the custody of the
Corporation until the restricted period expires or
until all restrictions thereon otherwise lapse.
Subject to the restrictions set forth in this
Section 11, each Participant who receives Restricted
Stock shall have all rights as a shareholder with
respect to such shares, including the right to vote
the shares and receive dividends and other distributions.
Each Participant who receives Restricted Stock Units
shall be eligible to receive, at the expiration of the
applicable restricted period, one share of Common
Stock for each Restricted Stock Unit awarded pursuant
thereto, and the Corporation shall issue to and
register in the name of each such Participant a
certificate for that number of shares of Common Stock.
Participants who receive Restricted Stock Units shall
have no rights as shareholders with respect to such
Restricted Stock Units until such time as share
certificates for Common Stock are issued to the
Participants; provided, however, that quarterly during
the applicable restricted period for all Restricted
Stock Units awarded hereunder, the Corporation shall
pay to each such Participant an amount equal to the
sum of all dividends and other distributions paid by
the Corporation on that number of shares of Common
Stock during the prior quarter.
B. Termination of Employment
Except when specified otherwise in this Section 11, if
a Participant's employment by the Corporation or a
subsidiary terminates before the expiration of the
applicable restricted period for Restricted Stock or
Restricted Stock Units for any reason other than
disability, retirement, death, "Change of Control" (as
defined in Section 15), or termination for the
convenience of the Corporation, all shares of
Restricted Stock and all Restricted Stock Units which
are subject to restriction as of said termination date
shall be forfeited by the Participant to the
Corporation.
For those shares of Restricted Stock or Restricted
Stock Units which have a deposit requirement, subject
to the provisions of this Section 11, a Participant
will be eligible to vest only in those shares of
Restricted Stock or Restricted Stock Units for which
Deposit Shares are on deposit with the Corporation as
of the date the Participant's employment with the
Corporation terminates.
(i) Early Retirement
A Participant who takes early retirement (after
age 55, but prior to age 65) during any
applicable restricted period may elect either of
the following alternatives with respect to
Restricted Stock or Restricted Stock Units
(unless any award provides otherwise):
(a) Leave Deposit Shares on deposit with the
Corporation and vest in all shares of
Restricted Stock or Restricted Stock Units,
effective as of the earlier of the date the
participant attains age 65 or the
termination date of the applicable
restricted period;
(b) Withdraw Deposit Shares and vest in a
proportionate number of shares of Restricted
Stock or Restricted Stock Units, effective
as of the date the Deposit Shares are
withdrawn. Such proportionate vesting shall
be pro-rata, based on the number of full
months of employment completed during the
restricted period prior to the date of early
retirement, as a percentage of the
applicable restricted period.
(ii) Retirement
A Participant who retires on or after the date
he or she attains age 65 shall fully vest in all
shares of Restricted Stock or Restricted Stock
Units, effective as of the date of retirement
(unless any such award specifically provides
otherwise).
(iii) Disability
A Participant who becomes permanently disabled
and unable to work (as determined by the
Corporation's Director of Health and Human
Services) during any applicable restricted
period shall vest in a proportionate number of
shares of Restricted Stock or Restricted Stock
Units, effective as of the date of disability.
Such proportionate vesting shall be pro-rata,
based on the number of full months of employment
completed during the restricted period prior to
the date of disability, as a percentage of the
applicable restricted period.
(iv) Death
A Participant who dies during any applicable
restricted period shall vest in a proportionate
number of shares of Restricted Stock or
Restricted Stock Units, effective as of the date
of death. Such proportionate vesting shall be
pro-rata, based on the number of full months of
employment completed during the restricted
period prior to the date of death, as a
percentage of the applicable restricted period.
(v) Change of Control
In the event of a Change of Control, a
Participant shall vest in all shares of
Restricted Stock and Restricted Stock Units,
effective as of the date of such Change of
Control.
(vi) Termination for Convenience of the Corporation
In the event a Participant's employment with the
Corporation is terminated for the convenience of
the Corporation during any applicable restricted
period, the Committee, in its sole discretion,
may vest such Participant in all or any portion
of shares of Restricted Stock or Restricted
Stock Units, effective as of the date of such
termination.
C. Non-Transferability
Except as otherwise provided in Section 11, no shares
of Restricted Stock and no Restricted Stock Units
shall be sold, exchanged, transferred, pledged, or
otherwise disposed of during the restricted period.
D. Withholding Taxes
Upon the vesting of Restricted Stock or Restricted
Stock Units, the Participant shall deliver to the
Corporation (or foreign subsidiary) cash in an amount
equal to all federal, state, and local or foreign
withholding taxes required to be collected by the
Corporation (or foreign subsidiary), and the
Corporation (or foreign subsidiary) may, in its
discretion, retain all or a portion of the shares to
be delivered until such payment is made.
Notwithstanding the foregoing, in the event the number
of shares to be issued equals or exceeds 500 and to
the extent permitted by law and pursuant to such rules
as the Committee may adopt, a Participant may
authorize the Corporation to satisfy any such
withholding requirement by directing the Corporation
to withhold from any shares to be issued, such number
of shares as shall be sufficient to satisfy the
withholding obligation.
12. NON-TRANSFERABILITY OF STOCK OPTIONS AND
PERFORMANCE UNITS
No Stock Option or Performance Unit granted under this
Plan shall be transferable by the optionee otherwise than
by the optionee's Last Will and Testament or by the laws
of descent and distribution, and such Stock Option shall
be exercised and Performance Units withdrawn during the
optionee's lifetime only by the optionee or his or her
guardian or legal representative.
13. EXERCISE OF STOCK OPTIONS
Except as provided in Sections 15, 18 and 19 (Change of
Control, termination or death), each Stock Option may be
exercised only:
(i) after 1 year of continued employment
with the Corporation or a subsidiary (as defined
in section 425(f) of the Code) immediately
following the date the Stock Option is granted;
(ii) during the optionee's employment with the
Corporation or such subsidiary; and
(iii) in such cumulative annual installments as
determined by the Committee at the time of grant.
Subject to the provisions of this Section 13, each Non-
Qualified Stock Option may be exercised in whole or, from
time to time, in part with respect to the number of then
exercisable shares in any sequence desired by the
optionee without regard to the date of grant of other
Stock Options.
An optionee exercising a Stock Option shall give notice
to the Corporation of such exercise and of the number of
shares elected to be purchased prior to 4:30 P.M. CST/CDT
on the day of exercise, which must be a business day at
the executive offices of the Corporation. At the time of
purchase, the optionee shall tender the full purchase
price of the shares purchased. Until such payment has
been made and a certificate or certificates for the
shares purchased has been issued in the optionee's name,
the optionee shall possess no stockholder rights with
respect to such shares. Payment of such purchase price
shall be made to the Corporation, subject to any
applicable rule or regulation adopted by the Committee:
(i) in cash (including check, draft, money
order or wire transfer made payable to the order
of the Corporation);
(ii) through the delivery of shares of
Common Stock owned by the optionee; or
(iii) by a combination of (i) and (ii) above.
For determining the payment, Common Stock delivered
pursuant to (ii) or (iii) shall have a value equal to the
Fair Market Value of the Common Stock on the date of
exercise.
14. WITHHOLDING TAXES ON STOCK OPTION EXERCISE
Each optionee shall deliver to the Corporation cash in an
amount equal to all federal, state and local withholding
taxes required to be collected by the Corporation in
respect of the exercise of a Stock Option, and until such
payment is made, the Corporation may, in its discretion,
retain all or a portion of the shares to be issued.
Notwithstanding the foregoing, to the extent permitted by
law and pursuant to such rules as the Committee may
adopt, an optionee may authorize the Corporation to
satisfy any such withholding requirement by directing the
Corporation to withhold from any shares to be issued,
such number of shares as shall be sufficient to satisfy
the withholding obligation.
15. EXERCISE OF STOCK OPTIONS IN EVENT OF CERTAIN
CHANGES OF CONTROL
Each outstanding Stock Option shall become immediately
and fully exercisable for a period of 6 months following
the date of the following occurrences, each constituting
a "Change of Control":
(i) if any person (including a group as defined
in Section 13(d)(3) of the Securities Exchange
Act of 1934) becomes, directly or indirectly,
the beneficial owner of 20% or more of
the shares of the Corporation entitled to vote for the
election of directors;
(ii) as a result of or in connection with any cash
tender offer, exchange offer, merger or
other business combination, sale of assets or
contested election, or combination of the
foregoing, the persons who were Directors of the
Corporation just prior to such event cease to
constitute a majority of the Corporation's Board
of Directors; or
(iii) the stockholders of the Corporation approve an
agreement providing for a transaction in which
the Corporation will cease to be an independent
publicly-owned corporation or a sale or other
disposition of all or substantially all of the
assets of the Corporation occurs.
After such 6 month period the normal option exercise
provisions of the Plan shall govern. In the event an
optionee is terminated as an employee of the Corporation
or a subsidiary within 2 years of any of the events
specified in (i), (ii) or (iii), all outstanding Stock
Options at that date of termination shall become
immediately exercisable for a period of 3 months.
With respect to Stock Option grants outstanding as of the
date of any such Change of Control which require the
deposit of optionee-owned Common Stock as a condition to
obtaining rights: (a) said deposit requirement shall be
terminated as of the date of the Change of Control and
any such deposited stock shall be promptly returned to
the optionee; and (b) any restrictions on the sale of
shares issued in respect of any such Stock Option shall
lapse.
16. WITHDRAWAL OF PERFORMANCE UNITS
Performance Units (plus accrued interest) may be
withdrawn only after the completion of the Performance
Period, except as described in Section 10, and provided
the optionee has remained in the employment of the
Corporation during said Performance Period, except as
provided in Sections 18 and 19 (termination or death).
An optionee may subsequently withdraw Performance Units,
without regard to the date of the grant of the
Performance Units. Withdrawals must be made in whole
units, including accrued interest.
To withdraw Performance Units, the optionee shall give
notice to the Corporation. Upon receipt of such notice,
the Committee shall determine whether the withdrawal is
to be paid in cash or by the delivery of Common Stock
with a Fair Market Value on the date of withdrawal equal
to the amount being withdrawn.
17. RELATIONSHIP OF PERFORMANCE UNITS AND NON-QUALIFIED
STOCK OPTIONS
Upon a withdrawal of Performance Units (including accrued
interest), the corresponding Non-Qualified Stock Options
shall terminate on a "one-for-one" basis. Upon the
exercise of Non-Qualified Stock Options, the optionee's
corresponding Performance Unit Account shall be decreased
on a "one-for-one" basis by the value of the Performance
Units, including accrued interest, on the date of such
exercise. In the event Non-Qualified Stock Options are
exercised prior to the completion of the Performance
Period, the corresponding Performance Units shall not be
valued and shall lapse on a "one-for-one" basis as of the
date of such exercise.
18. TERMINATION OF EMPLOYMENT OR LEAVE OF ABSENCE OF AN
OPTIONEE
A. Normal Termination
If the optionee's employment by the Corporation or a
subsidiary terminates for any reason other than as
specified in subsections B, C, D or E, the optionee's
Stock Options and right to withdraw Performance Units
shall terminate 3 months after such termination, and
all Performance Units granted but not valued at the
termination of employment shall expire on that date.
If the employment by the Corporation or a subsidiary
of an optionee, other than an optionee subject to
Section 16 of the 1934 Act, is terminated for the
convenience of the Corporation, as determined by the
Committee, and, at the time of termination the sum of
the optionee's age and service with the Corporation
equals or exceeds 70, the Committee, in its sole
discretion, may permit any Stock Option previously
granted to the optionee under the Plan to be
exercised to the full extent that such Stock Option
could have been exercised by such optionee
immediately prior to the optionee's termination and
may permit such Stock Option to remain exercisable
until the earlier of (i) 5 years after the date of
termination, or (ii) the expiration of the Stock
Option in accordance with its original term.
B. Death
If the termination of employment is due to the
optionee's death, the Stock Options may be
exercised or Performance Units withdrawn as
provided in Section 19.
C. Retirement
If the termination of employment is due to the
optionee's retirement, the optionee may exercise a
Stock Option, subject to the original term of the
Stock Option, within 5 years after the date of
retirement, including any Stock Option granted
under the Plan within the 12 months preceding such
retirement and, provided further, with respect to
Stock Option grants which require the deposit by
the optionee of optionee-owned Common Stock as a
condition to obtaining rights, any restrictions on
the sale of shares issued in respect of any such
Stock Option shall lapse. Performance Units
granted but not valued at the date of retirement
shall be valued at the end of the Performance
Period as provided in Section 10 with such value
being reduced by the percentage of the Performance
Period not completed at the date of such
retirement. In the event of such retirement, the
optionee may withdraw Performance Units within such
time period as the corresponding Non-Qualified
Stock Option could have been exercised after the
optionee's retirement.
D. Spin-offs
If the termination of employment is due to the
cessation, transfer, or spin-off of a complete line
of business of the Corporation, the Committee, in
its sole discretion, may determine that all
outstanding Stock Options granted more than 1 year
prior to the date of such termination shall
immediately become exercisable for a period of 2
years after the date of such termination, subject
to the provisions of Section 7.
E. Leave of Absence
Unless the Committee shall otherwise determine, if
an optionee is placed on an unpaid leave of
absence, such optionee's Stock Options and right to
withdraw Performance Units shall terminate at the
expiration of 3 months from the inception of said
leave of absence and all Performance Units granted,
but not valued, at the inception of said leave of
absence shall expire on such date.
If an optionee is placed on an unpaid leave of
absence, retires during such leave, and the
Committee had decided not to terminate the
optionee's right to exercise a Stock Option, right
to withdraw Performance Units or the right to
Performance Units granted, but not valued, at the
date of the inception of said leave of absence,
then such optionee may exercise a Stock Option or
withdraw Performance Units in accordance with
subsection C. Performance Units granted but not
valued at the date of such retirement shall be
valued at the end of the Performance Period as
provided in Section 10 with such value being
reduced by the percentage of the Performance Period
not completed at the date the optionee was placed
on the unpaid leave of absence.
19. DEATH OF OPTIONEE
If an optionee should die while employed by the
Corporation or a subsidiary, any Stock Option previously
granted to the optionee under this Plan may be exercised
or Performance Units withdrawn by the person designated
in such optionee's Last Will and Testament or, in the
absence of such designation, by the optionee's estate, to
the full extent that such Stock Option could have been
exercised or Performance Units withdrawn by such optionee
immediately prior to the optionee's death, provided that
the Stock Option is exercised or corresponding
Performance Units which have been valued are withdrawn
within 2 years of the optionee's death.
Performance Units granted but not valued at the date of
the optionee's death shall be valued at the end of the
applicable Performance Period with such value being
reduced by the percentage of the Performance Period not
completed at the date of death. Such amounts must be
withdrawn within the later of (i) 2 years of the
optionee's death or (ii) 3 months of such valuation.
With respect to Stock Option grants which require the
deposit by the optionee of optionee-owned Common Stock as
a condition to obtaining rights, in the event an optionee
should die while in the employment of the Corporation or
a subsidiary, said Stock Options may be exercised as
provided in the first paragraph of this Section, subject
to the following special conditions:
(i) any restrictions on the sale of shares issued
in respect of any such Stock Option shall
cease;
(ii) any optionee-owned Common Stock deposited by the
optionee pursuant to said grant shall be
promptly returned to the person designated in
such optionee's Last Will and Testament or, in
the absence of such designation, to the
optionee's estate, and all requirements
regarding deposit by the optionee shall be
terminated; and
(iii) the amount of the Stock Options deemed to be
exercisable immediately prior to the
optionee's death shall be as follows: (a) None,
if the date of death is less than 1 year after
the date of the grant; (b) 1/3, if the date of
death is 1 year after the date of the grant; (c)
2/3, if the date of death is 2 years after the
date of the grant; and (d) total amount, if the
date of death is 3 years after the date of the
grant.
20. AMENDMENTS OF THE PLAN
The Plan may be terminated, modified, or amended by the
Board of Directors of the Corporation.
The Committee may from time to time prescribe, amend and
rescind rules and regulations relating to the Plan.
Subject to the approval of the Board of Directors, the
Committee may at any time terminate, modify, or suspend
the operation of the Plan, provided that no action shall
be taken by the Board of Directors or Committee without
the approval of the stockholders of the Corporation which
would:
(i) materially increase the number of shares
which may be issued under the Plan;
(ii) materially increase the benefits accruing
to optionees and Participants under the Plan; or
(iii) materially modify the requirements as
to eligibility for participating in the Plan.
The Board of Directors shall have authority to cause the
Corporation to take any action related to the Plan which
may be required to comply with the provisions of the
Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, and the rules and
regulations prescribed by the Securities and Exchange
Commission. Any such action shall be at the expense of
the Corporation.
No termination, modification, suspension, or amendment of
the Plan shall alter or impair the rights of any optionee
or Participant pursuant to a prior grant, without the
consent of the optionee or Participant.
21. FOREIGN JURISDICTIONS
The Committee may adopt, amend, and terminate such
arrangements, not inconsistent with the intent of the
Plan, as it may deem necessary or desirable to make
available tax or other benefits of laws of any foreign
jurisdiction, to key employees of the Corporation who are
subject to such laws and who receive grants under the
Plan.
22. DURATION OF THE PLAN
Grants may be made under the Plan until July 1, 1994.
23. NOTICE
All notices to the Corporation shall be in writing,
effective as of actual receipt by the Corporation, and
shall be sent to:
General Mills, Inc.
Number One General Mills Boulevard
Minneapolis, Minnesota 55426
Attention: Corporate Compensation
If by Telex: 170360 Gen Mills
If by Facsimile: (612) 540-4925
24. SECTION 16 OFFICERS
With respect to persons subject to Section 16 of the 1934
Act, transactions under the Plan are intended to comply
with all applicable conditions of Rule 16b-3 or its
successors under the 1934 Act. To the extent any
provision of the Plan or action by the Committee fails to
so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the
Committee.
Adopted by the Board of Directors on July 25, 1988
Adopted by the Shareholders on September 26, 1988
Effective as of September 26, 1988
As amended effective March 1, 1989
As amended effective April 23, 1990
As amended effective April 22, 1991
As amended effective June 1, 1992
As amended effective September 20, 1993
As amended effective June 27, 1994
EXHIBIT 10.2
GENERAL MILLS, INC.
STOCK OPTION AND LONG-TERM INCENTIVE PLAN OF 1984
As Amended Through June 27, 1994
GENERAL MILLS, INC.
STOCK OPTION AND LONG-TERM INCENTIVE PLAN OF 1984, AS AMENDED
1. ADMINISTRATION OF THE PLAN
The Stock Option and Long-Term Incentive Plan of 1984 (the
"Plan") shall be administered by the Compensation Committee
(the "Committee") as from time to time appointed by the
Board of Directors (the "Board") from members of the Board
in accordance with the Certificate of Incorporation of
General Mills, Inc. (the "Corporation"). Subject to such
authority being granted to the Committee by the Board, the
Committee shall have full power and authority in the name of
and on behalf of the Corporation to construe and interpret
the Plan and the terms and conditions thereof, and to adopt
such rules and regulations for carrying out the purpose of
the Plan as it deems appropriate. Decisions of the Board
and/or Committee shall be final, conclusive and binding upon
all parties, including the Corporation, the stockholders and
the optionees.
2. PURPOSE OF THE PLAN
The purpose of this Plan is to attract and retain strong
management employees by rewarding certain officers and key
employees of the Corporation and its subsidiaries who are
primarily responsible for the management, growth and sound
development of the business of the Corporation.
3. COMMON STOCK SUBJECT TO THE PLAN
The shares of Common Stock to be issued upon the exercise of
a Stock Option shall be made available at the discretion of
the Board (or as such discretion may be delegated to the
Committee) from the authorized but unissued Common Stock of
the Corporation, from shares of Common Stock held in the
treasury of the Corporation, or from shares purchased on the
open market or otherwise.
Subject to the provisions of the next succeeding paragraph,
the aggregate number of shares for which Stock Options may
be granted under this Plan shall not exceed 2,000,000
shares, the aggregate number of shares for which Stock
Options may be granted in each fiscal year of the
Corporation under this Plan shall not exceed 750,000 shares,
and the aggregate number of shares for which Stock Options
may be granted to any one employee under this Plan shall not
exceed 36,000 shares in any fiscal year nor exceed 90,000
shares in total. If, prior to September 30, 1988, a Stock
Option granted under this Plan shall have terminated without
having been exercised in full (except where Non-Qualified
Stock Options are terminated as a result of a withdrawal
from an optionee's Performance Unit Account), the
unpurchased shares shall (unless this Plan shall have
terminated) become available for Stock Options to other
employees. No Stock Options may be granted under the Plan
after September 30, 1988.
The number of shares for which Stock Options may be granted
(in the aggregate, in any fiscal year, and as to any
individual), the number of shares subject to outstanding
Stock Options, and the price per share to be paid upon the
exercise of outstanding Stock Options shall be appropriately
adjusted by the Committee in the event that (i) the number
of outstanding shares of Common Stock of the Corporation
shall be changed by reason of split-ups, combinations or
reclassifications of shares, or (ii) any stock dividends are
distributed to the holders of Common Stock of the
Corporation, or (iii) the Common Stock of the Corporation is
converted into or exchanged for other shares as a result of
any merger or consolidation (including a sale of assets) or
other recapitalization.
4. STOCK OPTION PRICE
The purchase price under each Stock Option shall be
determined by the Committee, but shall not be less than one
hundred percent of the fair market value of the shares of
Common Stock of the Corporation subject to such Stock Option
on the date the Stock Option is granted. The fair market
value shall be determined in accordance with procedures
established by the Committee.
5. STOCK OPTION TERM AND TYPE
Stock Options may be granted for such terms as may be
determined by the Committee, but must expire no later than
the date the optionee leaves the employment of the
Corporation, subject to the provisions of Sections 14 and 15
hereof; provided, that Stock Options may not be granted for
a term exceeding ten (10) years and one (1) month.
The Committee shall determine whether stock option grants
will be Non-Qualified Stock Options governed by Section 83
of the Internal Revenue Code or Incentive Stock Options
governed by Section 422A of the Internal Revenue Code.
6. INCENTIVE STOCK OPTIONS
No optionee may be granted an Incentive Stock Option in any
calendar year to purchase more than $100,000 of stock of the
Corporation (determined by the fair market value of the
Corporation's Common Stock on the date of grant) provided,
that one-half of any unused portion of such amount may be
carried over for Incentive Stock Option grants to such
participant in any of the three succeeding years.
7. PERFORMANCE UNITS
At the time of the granting of Non-Qualified Stock Options,
the Corporation may grant corresponding Performance Units to
the optionee, up to a number of Performance Units equal to
the number of shares covered by the option.
In each fiscal year of the Corporation in which Performance
Units may be granted, the Committee shall establish goals
for (i) the compound growth in earnings per share ("EPS")
for the Corporation over three fiscal years (the
"Performance Period"), and (ii) the after-tax return on
average stockholder equity ("ROE") for the Corporation for
the final fiscal year of the Performance Period. The
Committee shall specify the Performance Unit values to be
earned at various actual rates of EPS growth and ROE. "EPS"
shall mean the Corporation's earnings from continuing
operations per common share and common share equivalent
(before extraordinary items) as reported in the
Corporation's financial statements included in the
Corporation's annual report for the final fiscal year of the
Performance Period. The compound growth rate in EPS shall
be calculated by comparing the EPS for the final fiscal year
of the Performance Period and the EPS for the fiscal year
immediately preceding the Performance Period. "ROE" shall
mean the Corporation's after-tax earnings, divided by its
average equity, which is the sum of beginning and ending
total stockholders' equity for such fiscal year divided by
two. EPS and ROE shall be subject to such adjustments as
may be determined by the Committee. An optionee shall have
no vested right to the value of a Performance Unit until the
end of the Performance Period.
A Performance Unit Account shall be established for each
optionee for each fiscal year in which Performance Unit
grants are made under the Plan. The value of the
Performance Units when determined shall be credited to the
optionee's Performance Unit Account, and such amount shall
thereafter earn interest at an annual rate determined by the
Committee; provided, that such interest rate shall not
exceed two-thirds of the Corporation's return on average
capital structure, defined as earnings after-tax plus after-
tax interest expense, divided by average capital structure.
"Average capital structure" is the sum of beginning and
ending stockholders' equity and interest bearing
obligations, both current and long-term, divided by two.
The optionee's Performance Unit Account shall be credited
with such interest at the end of each fiscal quarter of the
Corporation until (i) the amounts in the Performance Unit
Account are withdrawn by the optionee, or (ii) the
corresponding Non-Qualified Stock Options have been
exercised, and the value of such exercise (in accordance
with Section 13 hereof) has equaled or exceeded the amount
in the optionee's Performance Unit Account; provided, that
no interest shall be paid beyond the term of the
corresponding Non-Qualified Stock Option.
Performance Units may be granted for fiscal years commencing
May 28, 1984, and thereafter until September 30, 1988.
Accruals of the Performance Units (but not the accumulating
interest) shall be charged annually against the
Corporation's profit sharing fund established in accordance
with the resolution approved by the shareholders in 1933, as
amended in 1953 and 1968.
8. ELIGIBILITY OF OPTIONEES
Only persons who are officers or key employees of the
Corporation or a subsidiary shall be eligible to receive
Stock Options and Performance Units under this Plan.
Directors who are also active employees are eligible.
Neither the members of the Committee nor any member of the
Board who is not an active employee shall be eligible to
receive Stock Options or Performance Units under this Plan.
Subject to the terms, limitations, provisions and conditions
of the Plan, the Committee shall: (i) select the employees
to be granted Stock Options; (ii) determine whether Stock
Option grants will be Non-Qualified Stock Options or
Incentive Stock Options; (iii) determine the number of
shares covered by each Stock Option, subject to the limit on
the number of shares specified in Section 3 hereof that may
be granted to any one person; (iv) determine whether
Performance Units shall be granted with a Non-Qualified
Stock Option; (v) determine the time or times when Stock
Option grants will be made; (vi) determine the option price
of the shares subject to each Stock Option; (vii) determine
the time when each Stock Option may be exercised;
(viii) determine whether any of the shares issued in respect
of any Stock Option are to be restricted in any manner;
(ix) determine if any corresponding deposit of stock is
required, specifying the terms and conditions of such
deposit and any forfeiture of rights in the event of failure
to make or maintain such deposit; and (x) prescribe the
form, which shall be consistent with this Plan, of the
instruments evidencing any Stock Option or Performance Unit
granted under this Plan.
9. NON-TRANSFERABILITY OF STOCK OPTIONS AND PERFORMANCE
UNITS
No Stock Option or Performance Unit granted under this Plan
shall be transferable by the optionee otherwise than by the
optionee's Last Will and Testament or by the laws of descent
and distribution, and such Stock Option shall be exercised
and amounts in the Performance Unit Account withdrawn during
the optionee's lifetime only by the optionee.
10. EXERCISE OF STOCK OPTIONS
Except as provided in Sections 14, and 15, each Stock Option
granted under this Plan may be exercised only after one year
of continued employment with the Corporation or a subsidiary
(as defined in section 425(f) of the Internal Revenue Code)
immediately following the date the Stock Option is granted
and only during the continuance of the optionee's employment
with the Corporation or such subsidiary, and may be
exercised, subject to such overall limitations, only in such
annual installments, which shall be cumulative, as may be
determined by the Committee at the time of grant.
Subject to the provision of this Section 10, each Non-
Qualified Stock Option may be exercised in whole or, from
time to time, in part with respect to the number of shares
as to which it is then exercisable in any sequence desired
by the optionee without regard to the date of grant of other
Stock Options. No Incentive Stock Option shall be
exercisable by the optionee while there is outstanding,
within the meaning of section 422A(c)(7) of the Internal
Revenue Code, any Incentive Stock Option previously granted
to such optionee to purchase stock in the Corporation.
A person exercising a Stock Option shall give written notice
to the Corporation at its main executive offices of such
exercise and of the number of shares the optionee has
elected to purchase, and shall at the time of purchase
tender the full purchase price of the shares the optionee
has elected to purchase. Until the optionee has made such
payment and has had issued in the optionee's name a
certificate or certificates for the shares so purchased, the
optionee shall possess no stockholder rights with respect to
any such shares.
Subject to any applicable rule or regulation adopted by the
Committee, payment of such purchase price shall be made to
the Corporation (i) in cash (including check, draft or money
order made payable to the order of the Corporation); (ii)
through the delivery of shares of Common Stock owned by the
optionee; or (iii) by a combination of (i) and (ii) above.
The Common Stock so delivered shall have a value for
determining payment equal to the mean of the high and low
price of shares of the Common Stock on the New York Stock
Exchange on the date of exercise.
Upon the exercise of a Stock Option, the Corporation may, in
its discretion, retain all or a portion of the shares until
such time as the optionee delivers cash, a check, or a draft
or money order to the Corporation in an amount equal to all
Federal or State withholding taxes required to be collected
by the Corporation.
Notwithstanding the foregoing, to the extent permitted by
law and pursuant to such rules as the Committee may adopt,
an optionee may authorize the Corporation to satisfy any
such withholding requirement by directing the Corporation to
withhold from any shares to be issued, such number of shares
as shall be sufficient to satisfy the withholding
obligation.
11. EXERCISE OF STOCK OPTIONS IN CERTAIN EVENTS
Each outstanding Stock Option shall, except as provided in
the following clauses, become immediately and fully
exercisable if (i) any person (including a group as defined
in Section 13(d)(3) of the Securities Exchange Act of 1934)
becomes, directly or indirectly, the beneficial owner of
twenty percent (20%) or more of the shares of the
Corporation entitled to vote for the election of directors;
(ii) as a result of or in connection with any cash tender
offer, exchange offer, merger or other business combination,
sale of assets or contested election, or combination of the
foregoing, the persons who were directors of the Corporation
just prior to such event shall cease to constitute a
majority of the Corporation's Board of Directors; or
(iii) the stockholders of the Corporation approve an
agreement providing for a transaction in which the
Corporation will cease to be an independent publicly-owned
corporation or a sale or other disposition of all or
substantially all of the assets of the Corporation occurs.
If any of the foregoing events specified in clauses (i),
(ii), or (iii) above occur, each outstanding Stock Option
shall be exercisable in full for a period of six months
following the date of occurrence of such event, and after
such period the normal provisions of the Plan pertaining to
vesting of Stock Options shall govern, or in the event any
optionee is terminated as an employee of the Corporation or
a subsidiary within two years of any of the events specified
in the foregoing clauses, any outstanding Stock Options at
the date of termination shall immediately vest and become
exercisable for a period of three months, provided, however,
that no Stock Option may become exercisable as a result of
such acceleration within one year of the date of its grant.
12. WITHDRAWAL OF AMOUNTS IN PERFORMANCE UNIT ACCOUNTS
The amount in an optionee's Performance Unit Account (plus
accrued interest) may be withdrawn only after the completion
of the Performance Period, provided the optionee has
remained in the employment of the Corporation for such time
period except as provided in Sections 14 and 15 hereof.
An optionee may thereafter withdraw amounts, which shall be
paid in cash, from the optionee's Performance Unit Account,
without regard to the date of the grant of the Performance
Units. An optionee withdrawing an amount from a Performance
Unit Account shall give written notice of such intent to
withdraw to the Corporation at its main executive offices.
For withdrawals related to Stock Options granted before
July 27, 1987, an optionee may give notice of a withdrawal
only during a period commencing with the beginning of the
third business day following the date of release by the
Corporation of quarterly or annual summary statements of
sales and earnings, and ending on the close of business on
the twelfth business day following such date.
For withdrawals related to Stock Options granted on or after
July 27, 1987 or withdrawals made pursuant to Sections 14
and 15, an optionee may give notice of a withdrawal on any
business day of the executive offices of the Corporation.
Subject to the approval of the Committee and any applicable
rule or regulation adopted by the Committee, an optionee may
elect to defer receipt until January 4, 1988 of any and all
cash withdrawals from his Performance Unit Account which the
optionee may make during calendar year 1987 in accordance
with the preceding paragraph by executing and filing a
deferred distribution agreement (in the form as provided by
the Corporation) with the Corporation. No further interest
on any such unpaid amounts shall accrue after the date of
receipt by the Corporation of the notice of an intended
withdrawal in accordance with the second paragraph of this
Section 12.
If a withdrawal from an optionee's Performance Unit Account
relating to Performance Units granted prior to July 27, 1987
results in less than twenty percent (20%) of the original
number of such optionee's corresponding Non-Qualified Stock
Options remaining outstanding, such optionee shall be
required to withdraw at the same time the full amount in his
Performance Unit Account, including accrued interest,
corresponding to such Non-Qualified Stock Options.
13. PERFORMANCE UNITS AND CORRESPONDING NON-QUALIFIED STOCK
OPTIONS
Upon a withdrawal from an optionee's Performance Unit
Account, the corresponding Non-Qualified Stock Options shall
terminate as to a number of shares of which the "appreciated
value" is equal to the amount withdrawn from the Performance
Unit Account. In the event the "appreciated value" equals a
fractional number of shares, the corresponding Non-Qualified
Stock Options shall terminate as to the next lower whole
number of shares. "Appreciated value" means the excess of
the fair market value of the Common Stock over the option
price.
Upon the exercise of a Non-Qualified Stock Option, the
optionee's corresponding Performance Unit Account shall be
decreased by the "appreciated value" on the date of such
exercise. However, neither of the preceding conditions
relating to the withdrawal from a Performance Unit Account
nor the exercise of a Non-Qualified Stock Option shall be a
limit to such withdrawal or exercise in the event either
exceeds the value of the other.
In the event a Non-Qualified Stock Option is exercised prior
to the completion of the Performance Period, the amount of
the "appreciated value" for the options exercised shall be
deducted at the end of the Performance Period from the
optionee's Performance Unit Account.
For Performance Units granted on or after July 27, 1987,
upon a withdrawal from an optionee's Performance Unit
Account consisting of any or all such Performance Units and
accrued interest thereon, the corresponding Non-Qualified
Stock Options shall terminate on a "one-for-one" basis.
Upon the exercise of Non-Qualified Stock Options granted on
or after July 27, 1987, the optionee's corresponding
Performance Unit Account shall be decreased on a
"one-for-one" basis by the value of the Performance Units,
including accrued interest, on the date of such exercise.
In the event Non-Qualified Stock Options granted on or after
July 27, 1987 are exercised prior to the completion of the
Performance Period, the corresponding Performance Units
shall not be valued and shall lapse on a "one-for-one" basis
as of the date of such exercise.
14. TERMINATION OF EMPLOYMENT
If an optionee ceases to be an employee of the Corporation
or a subsidiary, the optionee's Stock Options and right to
withdraw amounts in the Performance Unit Account shall
terminate after three (3) months, and all Performance Units
granted but not valued at the termination of employment
shall expire on the date of termination; provided that if
the optionee's employment with the Corporation or a
subsidiary, other than the employment of an optionee subject
to Section 16 of the Securities Exchange Act of 1934, is
terminated for the convenience of the Corporation, as
determined by the Committee, and, at the time of termination
the sum of the optionee's age and service with the
Corporation equals or exceeds 70, the Committee, in its sole
discretion, may permit any Stock Option previously granted
to any such optionee under the Plan to be exercised to the
full extent that such Stock Option could have been exercised
by such optionee immediately prior to the optionee's
termination and may permit such Stock Option to remain
exercisable until the earlier of (i) five years after the
date of termination or (ii) the expiration of the Stock
Option in accordance with its original term.
Notwithstanding the foregoing, (i) if the cessation of
employment is due to the optionee's death, the Stock Options
may be exercised or amounts in the Performance Unit Account
withdrawn to the extent and in the manner provided in
Section 15; (ii) if the cessation of employment is due to
the optionee's retirement with the consent of the
Corporation, the optionee may exercise a Stock Option
subject to the original term of the Stock Option, within
five years after the optionee shall so cease to be an
employee, including any Stock Option granted under the Plan
within the twelve (12) months preceding such retirement and,
provided further, with respect to Stock Option grants which
require the deposit by the optionee of optionee owned
Corporate Common Stock as a condition to obtaining rights,
any restrictions on the sale of shares issued in respect of
any such Stock Option shall cease; and (iii) if the
cessation of employment occurs within a twelve-month period
from the date a Stock Option was vested in the optionee by
the Committee at the date of grant for purposes of this
subsection, and is due to termination of the optionee's
employment by the Corporation after a change of control as
described in Section 11 hereof, any Stock Option which was
so vested shall become exercisable one year after the date
of grant for a period of three months and, provided further,
that with respect to Stock Option grants which require the
deposit by the optionee of optionee owned Corporation Common
Stock as a condition to obtaining rights, (a) said deposit
requirement shall be terminated as of the date of cessation
of employment and any such deposited stock shall be promptly
returned to the optionee, (b) the total amount of the grant
not previously forfeited or exercised shall be exercisable
as set forth in this subsection (iii), and (c) any
restrictions on the sale of shares issued in respect of any
such Stock Option shall cease. Performance Units granted
but not valued at the date of such retirement shall be
valued at the end of the Performance Period as provided in
Section 7. Such Performance Units may then be withdrawn in
a proportionate amount equal to the percentage of the
Performance Period completed to the date of such retirement.
In the event of such a retirement, the optionee may withdraw
amounts in the Performance Unit Account within such time
period as the corresponding Non-Qualified Stock Option could
have been exercised after the optionee's retirement.
If an optionee ceases to be an employee of the Corporation
or a subsidiary and the cessation of employment is due to
the cessation, transfer, or spin-off of a complete line of
business of the Corporation, the Committee, in its sole
discretion, may determine that (i) outstanding Stock Options
of such optionee shall immediately vest and become
exercisable, provided that no Stock Options may become
exercisable as a result of such acceleration within one year
of the date of grant; and (ii) the optionee may exercise a
Stock Option, subject to the original term of the Stock
Option, within two years after such optionee shall cease to
be an employee.
In the event an optionee is placed on an unpaid leave of
absence, such optionee's Stock Option and right to withdraw
amounts in the Performance Unit Account shall terminate,
unless the Committee shall otherwise determine, at the
expiration of three (3) months from the inception of the
said leave of absence and all Performance Units granted but
not valued at the inception of said leave of absence shall
expire on such date.
In the event an optionee is placed on an unpaid leave of
absence and retires with the consent of the Corporation
during such leave, and the Committee has determined not to
terminate, in accordance with the preceding paragraph, the
optionee's right to exercise a Stock Option, right to
withdraw amounts in the Performance Unit Account, or the
right to Performance Units granted but not valued at the
date of the inception of said leave of absence, such
optionee may exercise a Stock Option, subject to the
original term of the Stock Option, within five years after
the date of such retirement, including any Stock Option
granted under the Plan within the twelve (12) months
preceding such retirement, or withdraw amounts in the
Performance Unit Account within such time period as the
corresponding Stock Option could have been exercised after
the optionee's retirement. Performance Units granted but
not valued at the date of such retirement shall be valued at
the end of the Performance Period as provided in Section 7.
Such Performance Units may then be withdrawn in a
proportionate amount equal to the percentage of the
Performance Period completed to the date the optionee was
placed on the unpaid leave of absence.
Any question as to whether and when there has been a
cessation of employment or a retirement with the consent of
the Corporation shall be determined by the Committee, and
its determination of such questions shall be final.
15. DEATH OF OPTIONEE
If an optionee should die while in the employment of the
Corporation or a subsidiary, any Stock Option theretofore
granted to the optionee under this Plan may be exercised or
amounts in the Performance Unit Account withdrawn by the
person designated in such optionee's Last Will and Testament
or, in the absence of such designation, by the optionee's
estate, to the full extent that such Stock Option could have
been exercised or amounts in the Performance Unit Account
withdrawn by such optionee immediately prior to the
optionee's death, provided the Stock Option is so exercised
within two years of the optionee's death, and the amounts in
the Performance Unit Account are withdrawn within three (3)
months of the optionee's death.
Performance Units granted but not valued at the date of the
optionee's death shall be valued at the end of the
Performance Period as provided in Section 7. Such
Performance Units may then be withdrawn in a proportionate
amount equal to the percentage of the Performance Period
completed to the date of the optionee's death. Such amounts
must be withdrawn by the designated person or estate from
the Performance Unit Account within three (3) months of such
valuation.
With respect to Stock Option grants which require the
deposit by the optionee of optionee owned Corporation Common
Stock as a condition to obtaining rights, in the event an
optionee should die while in the employment of the
Corporation or a subsidiary, said Stock Options may be
exercised as provided in the first paragraph of this Section
15, subject to the following special conditions: (i) any
restrictions on the sale of shares issued in respect of any
such Stock Option shall cease, (ii) any optionee owned
Corporation Common Stock deposited by the optionee pursuant
to said grant shall be promptly returned to the person
designated in such optionee's Last Will and Testament or, in
the absence of such designation, to the optionee's estate,
and all requirements regarding deposit by the optionee shall
be terminated, and (iii) the amounts of the Stock deemed to
be exercisable immediately prior to the optionee's death
shall be as follows: (a) zero, if the date of death is less
than one year after the date of the grant; (b) one-third, if
the date of death is one year after the date of the grant;
(c) two-thirds, if the date of death is two years after the
date of the grant; and (d) total amount, if the date of
death is three years after the date of the grant.
16. AMENDMENTS TO PLAN
The Committee may from time to time prescribe, amend and
rescind rules and regulations relating to the Plan and,
subject to the approval of the Board, may at any time
terminate, modify or suspend the operation of the Plan;
provided that no such modification shall, without the
approval of the stockholders:
(i) increase the maximum number of shares as to
which Stock Options may be granted under this Plan
either in the aggregate, for any fiscal year or to
any one person, except as permitted by Section 3;
(ii) permit the granting of any Stock Option under
this Plan at a purchase price less than one hundred
percent of the fair market value (determined as
provided in Section 4) of the shares of common stock
subject to such Stock Option at the date of the
grant;
(iii) shorten the period which must elapse between the
granting of a Stock Option and the first
accrual of rights to exercise such Stock Option;
(iv) permit the exercise of a Stock Option unless
full payment for the shares as to which the Stock
Option is exercised is made at the time of exercise;
(v) extend the term of a Stock Option after the grant
of such Stock Option; or
(vi) expand the class of employees eligible to receive
Stock Options.
The Board of Directors shall have authority to cause the
Corporation at its expense to take any action related to the
Plan which may be required to comply with the provisions of
the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, and the rules and
regulations prescribed by the Securities and Exchange
Commission.
17. EFFECTIVE DATE
This Plan shall become effective as of October 1, 1983,
subject to the approval of the shareholders of the
Corporation at the Annual Meeting on September 26, 1983, and
shall expire (unless terminated earlier) as of September 30,
1988.
18. SECTION 16 OFFICERS
With respect to persons subject to Section 16 of the
Securities Exchange Act of 1934 ("1934 Act"), transactions
under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934
Act. To the extent any provision of the Plan or action by
the Committee fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed
advisable by the Committee.
Adopted by the shareholders on September 26, 1983
Amended June 25, 1984, July 22, 1985, October 28, 1985, June 23,
1986, February 23, 1987, March 1, 1987, July 27, 1987, December 14,
1987, and July 25, 1988, June 1, 1992 and June 27, 1994
EXHIBIT 10.5
MANAGEMENT CONTINUITY AGREEMENT
THIS MANAGEMENT CONTINUITY AGREEMENT, previously referred to
as an "Executive Protection Agreement" (the "Agreement")
between General Mills, Inc., a Delaware corporation (the
"Corporation"), and <name of officer> (the "Executive"),
originally entered into as of June 24, 1986 (the "date hereof")
is hereby amended as of April 24, 1989.
WITNESSETH:
WHEREAS, the Corporation wishes to attract and retain well-
qualified executive and key personnel and to assure both itself
and the Executive of continuity of management in the event of
any Change of Control (as defined in Section 2) of the
Corporation;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is hereby agreed by and between
the Corporation and the Executive as follows:
1. Operation of Agreement. The "Effective Date" of this
Agreement shall be the date during the Contract Period (as
defined in Section 3) on which a Change of Control occurs.
2. Change of Control. For the purpose of this Agreement, a
"Change of Control" shall mean an event during the Contract
Period required to be reported in response to Item 1(a) of the
Current Report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15(d) of the Securities and Exchange
Act of 1934 (the "Exchange Act"); provided that, without
limitation, such a "Change of Control" shall be deemed to have
occurred if: (i) a third person, including a "group" as
defined in Section 13(d)(3) of the Exchange Act, becomes the
beneficial owner, directly or indirectly, of 20% or more of the
combined voting power of the Corporation's outstanding voting
securities ordinarily having the right to vote for the election
of directors of the Corporation; or (ii) individuals who
constitute the Board of Directors of the Corporation as of the
date hereof (the "Incumbent Board") cease for any reason to
constitute at least two-thirds thereof, provided that any
person becoming a director subsequent to the date hereof whose
election, or nomination for election by the Corporation's
stockholders, was approved by a vote of at least three-quarters
of the directors comprising the Incumbent Board shall be, for
purposes of this clause (ii), considered as though such persons
were a member of the Incumbent Board.
3. Contract Period. The "Contract Period" is the period
commencing on the date hereof and ending on the earlier to
occur of (i) the second anniversary of such date, or (ii) the
first day of the month next following the Executive's 65th
birthday; provided, however, that commencing on the date one
year after the date hereof, and on each annual anniversary of
such date (the date one year after the date hereof, and each
annual anniversary of such date, is hereinafter referred to as
the "Renewal Date"), the Contract Period shall be automatically
extended so as to terminate on the earlier of (i) two years
from such Renewal Date or (ii) the first day of the month next
following the Executive's 65th birthday, unless at least 60
days prior to the Renewal Date the Corporation shall give
notice that the Contract Period shall not be so extended
subject however that any failure of the Corporation to extend
the Contract Period shall not limit or reduce in any manner the
rights and benefits of the Executive contained in this
Agreement if a Change of Control has occurred during a Contract
Period and, in such event, the rights and benefits of the
Executive shall continue in full force and effect
notwithstanding that a Contract Period may have ended.
4. Certain Definitions.
(a) Cause. The Executive's employment may be terminated
for Cause if a majority of the Board of Directors, after the
Executive shall have been afforded a reasonable opportunity to
appear in person before the Board of Directors and to present
such evidence as the Executive deems appropriate, determines
that Cause exists. For purposes of this Agreement, "Cause"
means (i) an act or acts of fraud or misappropriation on the
Executive's part which result in or are intended to result in
his personal enrichment at the expense of the Corporation, (ii)
conviction of a felony, or (iii) a physical or mental
disability which materially interferes with the capacity of the
Executive in fulfilling his or her responsibilities and which
will qualify the Executive for disability benefits from a
company-sponsored plan.
(b) Good Reason. For purposes of this Agreement, "Good
Reason" means
(i) without the express written consent of the
Executive (A) the assignment to the Executive of any
duties inconsistent in any substantial respect with the
Executive's position, authority or responsibilities as
in effect during the 90-day period immediately
preceding the Effective Date of this Agreement, or (B)
any other substantial adverse change in such position
(including titles), authority, or responsibilities;
(ii) any failure by the Corporation to furnish the
Executive with compensation and benefits at a level
equal to or exceeding those received by the Executive
from the Corporation during the 90-day period preceding
the Effective Date of this Agreement, including a
failure by the Corporation to maintain its policy of
paying retirement and supplemental savings plan
benefits which would be payable under the General Mills
Retirement Plan but for the limits imposed by the
Employee Retirement Income Security Act of 1974, as may
be amended ("ERISA"), other than an insubstantial and
inadvertent failure remedied by the Corporation
promptly after receipt of notice thereof given by the
Executive;
(iii) the Corporation's requiring the Executive to be
based or to perform services at any office or location
other than that at which the Executive is based at the
Effective Date of this Agreement, except for travel
reasonably required in the performance of the
Executive's responsibilities;
(iv) any failure by the Corporation to obtain the
assumption and agreement to perform this Agreement by a
successor as contemplated by Section 10(b); or
(v) any failure by the Corporation to deposit
amounts which may become payable to the Executive to
the Trustee as contemplated by Section 8.
For purposes of this Section 4(b), any determination of
"Good Reason" made by the Executive shall be conclusive.
(c) Notice of Termination. Any termination by the
Corporation for Cause or by the Executive for Good Reason or
otherwise shall be communicated by Notice of Termination to the
other party hereto given in accordance with Section 10(b). For
purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination
provision in this Agreement relief upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment
under the provision so indicated (provided, however, that any
Notice of Termination given by (i) the Executive at least six
months but no more than two years after the Effective Date, or
(ii) by the Corporation more than two years after the Effective
Date, need not set forth any such basis for termination) and
(iii) if the termination date is other than the date of receipt
of such notice, specifies the termination date (which date
shall be not more than 15 days after the giving of such
notice).
(d) Date of Termination. "Date of Termination" means
the date of receipt of the Notice of Termination or any later
date specified therein, as the case may be.
5. Obligations of the Corporation upon Termination.
(a) Good Reason and other than for Cause Subject to the
limitations of Section 5(c), if:
(i) within two years after the Effective Date of
this Agreement, the Corporation shall terminate the
Executive's employment for any reason other than for
Cause; or
(ii) at least six months but no more than two years
after the Effective Date of this Agreement, the
Executive shall terminate employment for any reason in
his sole discretion; or
(iii) within two years after the Effective Date of
this Agreement, the Executive shall terminate his
employment for Good Reason:
(I) the Corporation shall pay to the
Executive in a lump sum in cash within 20
days after the Date of Termination the
aggregate of the amounts determined
pursuant to the following clauses (A), (B)
and (C) inclusive plus the continuation of
the benefits specified in Clause (D), as
follows:
(A) if not theretofore paid, the
Executive's Base Salary through the
Date of Termination at the rate in
effect at the time the Notice of
Termination was given, plus a bonus,
determined in accordance with the
provisions of the following clause
(B)(ii), for that fraction of the
fiscal year completed as of the date
the Notice of Termination was given;
and
(B) three times the sum of (i) the
Executive's annual base salary at the
rate in effect at the time the Notice
of Termination was given and (ii) an
amount equal to the highest bonus paid
to the Executive in any of the
preceding three fiscal years; and
(C) In the event that the Executive
becomes entitled to any or all of the
specified payments under clauses (A),
(B) or (D) of this Section 5(a)(I) or
under Section 5(b), if any of such
payments or benefits will be subject to
the tax imposed by section 4999 of the
Internal Revenue Code of 1986, as may
be amended (the "Code"), and/or any
similar tax that may hereafter be
imposed by the federal or any state or
local government (the "Excise Tax"),
the Corporation shall pay to the
Executive, at the time of receipt of
such payments or benefits, an
additional amount (the "Gross-Up
Payment") so that the net amount
retained by the Executive, after
deduction of any Excise Tax on the
Total Payments (as hereinafter defined)
and any federal, state and local income
tax and Excise Tax upon the payment
provided for by this clause, shall be
equal to the Total Payments.
For purposes of determining whether any of such payments or
benefits will be subject to the Excise Tax and the amount of
such Excise Tax:
(x) Any other payments or benefits
received or to be received by the
Executive in connection with a Change
of Control of the Corporation or the
Executive's termination of employment
(whether pursuant to the terms of this
Agreement or any other plan, stock
option, restricted stock, stock
performance units, or any other
benefits or arrangement or agreement
with the Corporation, or any person
whose actions result in a Change of
Control of the Corporation, or any
person affiliated with the Corporation
or such person) (which together with
the payments or benefits under Section
5(a)I or Section 5(b) constitute the
"Total Payments") shall be treated as
"parachute payments" within the
meaning of section 280G(b)(2) of the
Code, and all "excess parachute
payments" within the meaning of
section 280G(b)(1) of the Code shall
be treated as subject to the Excise
Tax unless, in the opinion of tax
counsel selected by the Corporation
and reasonably acceptable to the
Executive, such other payments or
benefits (in whole or in part) do not
constitute parachute payments, or such
excess parachute payments (in whole or
in part) represent reasonable
compensation for services actually
rendered within the meaning of section
280G(b)(4) of the Code in excess of
the base amount within the meaning of
section 280G(b)(3) of the Code, or are
otherwise not subject to the Excise
Tax;
(y) The amount of the Total Payments
which shall be treated as subject to
the Excise Tax shall be equal to the
lesser of (1) the total amount of the
Total Payments, or (2) the amount of
excess parachute payments within the
meaning of section 280G(b)(1) (after
applying subclause (x) above; and
(z) The value of any non-cash
benefits or any deferred payment or
benefit shall be determined by the
Corporation's independent public
accountants in accordance with the
principles of sections 280G(d)(3) and
(4) of the Code.
For purposes of determining the amount of the Gross-Up Payment,
the Executive shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation in the
calendar year in which the Gross-Up Payment is to be made and
state and local income taxes at the highest marginal rate of
taxation in the state and locality of the Executive's residence
on the Date of Termination, net of the maximum reduction in
federal income taxes which could be obtained from deduction of
such state and local taxes. In the event that the Excise Tax
is subsequently determined to be less than the amount taken
into account hereunder at the time of termination of the
Executive's employment, the Executive shall repay to the
Corporation at the time that the amount of such reduction in
Excise Tax is finally determined, the portion of the Gross-Up
Payment attributable to such reduction (plus the portion of the
Gross-Up Payment attributable to the Excise Tax and federal and
state and local income tax imposed on the Gross-Up Payment
being repaid by the Executive if such repayment results in a
reduction in Excise Tax and/or a federal and state and local
income tax deduction) plus interest on the amount of such
repayment at the rate provided in section 1274(b)(2)(B) of the
Code. In the event that the Excise Tax is determined to exceed
the amount taken into account hereunder at the time of the
termination of the Executive's employment (including by reason
of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the
Corporation shall make an additional Gross-Up Payment in
respect of such excess (plus any interest payable with respect
to such excess) at the time that the amount of such excess is
finally determined.
(D) until the earlier to occur of (i)
the date three years following the
Date of Termination,or (ii) the first
day of the first month next following
the Executive's 65th birthday (the
period of time from the Date of
Termination until the earlier of (i)
or (ii) is hereinafter referred to as
the "Unexpired Period," the
Corporation shall continue to provide
all benefits which the Executive
and/or his spouse is or would have
been entitled to receive under all
present and post-retirement medical,
dental, vision, disability, executive
life, group life, accidental death and
other programs of the Corporation,
including additional benefit service
under the applicable General Mills
retirement plan equal to the
"Unexpired Period," in each case on a
basis providing the Executive or his
spouse with benefits at least equal to
those provided by the Corporation for
the Executive under such plans and
programs in effect at any time during
the 90-day period immediately
preceding the Effective Date of this
Agreement, subject that if an
Executive is terminated under the
provisions of Section 5(a) or Section
5(b), and at the Date of Termination
the Executive would not qualify for
post-retirement benefits under the
plans and programs then in effect
during such 90-day period for the
reason that the Executive has not
reached his 55th birthday, the
Executive shall nevertheless be
entitled to such benefits equal to the
benefits such Executive would have
received if the Executive was of the
age of 55 at the Date of Termination;
and (ii) the Executive and/or his
spouse, as the case may be, shall
receive supplemental periodic payments
equal to retirement and savings plan
benefits which would be payable under
the applicable General Mills
retirement plan but for limits imposed
by ERISA, calculated as if the
Executive (a) had been employed to the
end of the Unexpired Period; (b) had
retired at the age he would have
attained at the end of the Unexpired
Period; and (c) had earnings to the
end of the Unexpired Period at a rate
equal to the rate of Executive's total
compensation for the calendar year
prior to the effective date of this
Agreement.
(b) By the Corporation more than two years after the
Effective Date. If the Corporation shall terminate the
Executive's employment for any reason other than Cause at any
date which is more than two years after the Effective Date, the
Executive shall be entitled to receive the benefits specified
under Clauses (A), (B), (C) and (D) of Section 5(a)(I) except
that the words "three times" in Clause (B), "three years" and
"thirty-six" in Clause (B) shall be substituted by "one times",
"one year" and "twelve" respectively.
6. Non-exclusivity of Rights. Nothing in this Agreement
shall prevent or limit the Executive's continuing or future
participation in any benefit, bonus, incentive deferred
compensation or other plan or program provided by the
Corporation or any of its affiliated companies and for which
the Executive may qualify, nor shall anything herein limit or
otherwise affect such rights as the Executive may have under
any employment, stock option, performance units or other
agreements with the Corporation or any of its affiliated
companies. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan or
program of the Corporation or any of its affiliated companies
at or subsequent to the Date of Termination shall be payable in
accordance with such plan or program.
7. Full Settlement. The Corporation's obligation to make
the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any
circumstances, including, without limitation, any setoff,
counterclaim, recoupment, defense or other right which the
Corporation may have against the Executive or others or by any
amounts received by Executive from others. In no event shall
the Executive be obligated to seek other employment by way of
mitigation of the amounts payable to the Executive under any of
the provisions of this Agreement. The Corporation agrees to
pay, to the full extent permitted by law, all legal fees and
expenses which the Executive may reasonably incur as a result
of any contest (regardless of the outcome thereof) by the
Corporation or others of the validity or enforceability of, or
liability under any provision of this Agreement or any
guarantee of performance thereof, in each case plus interest,
compounded monthly, on the total unpaid amount determined to be
payable under this Agreement, such interest to be calculated on
the basis of the "Prime Rate" as reported in the WALL STREET
JOURNAL during the period of such nonpayment plus 5%.
8. Trustee. The Corporation has established a
Supplemental Benefits Trust with Norwest Bank Minnesota, N.A.
as Trustee to hold assets of the Corporation under certain
circumstances as a reserve for the discharge of the
Corporation's obligations under this Agreement and certain
plans of deferred compensation of the Corporation. In the
event of a Change of Control as defined in Section 2 hereof,
the Corporation shall be obligated to immediately contribute
such amounts to the Trust as may be necessary to fully fund all
benefits payable under the Agreement. Executives shall have
the right to demand and secure specific performance of this
provision. All assets held in the Trust remain subject only to
the claims of the Corporation's general creditors whose claims
against the Corporation are not satisfied because of the
Corporation's bankruptcy or insolvency (as those terms are
defined in the Trust Agreement). The Executive does not have
any preferred claim on, or beneficial ownership interest in,
any assets of the Trust before the assets are paid to the
Executive and all rights created under the Trust, as under this
Agreement, are unsecured contractual claims of the Executive
against the Corporation.
In the event the funding of the Trust described in the
preceding paragraph does not occur, upon written demand by the
Executive given at any time after a Change of Control occurs,
the Corporation shall deposit in trust with an institutional
trustee (the "Trustee") designated by the Executive in such
demand amounts which may become payable to the Executive
pursuant to Section 5(a) or Section 5(b) with irrevocable
instructions to pay amounts to the Executive when due in
accordance with the terms of this Agreement. All charges of
the Trustee shall be paid by the Corporation. The Trustee
shall be entitled to rely conclusively on the Executive's
written statement as to the fact that payments are due under
this Agreement and the amount of such payments. If the Trustee
is not notified that payments are due under this Agreement
within two years and 60 days after receipt of a deposit
hereunder, all amounts deposited with the Trustees and earnings
with respect thereto shall be delivered to the Corporation on
demand.
9. Successors. (a) This Agreement is personal to the
Executive and without the prior written consent of the
Corporation shall not be assignable by the Executive otherwise
than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by
the Executive's legal representatives, heirs and legatees.
(b) This Agreement shall inure to the benefit of and be
binding upon the Corporation and its successors. The
Corporation shall require any successor to all or substantially
all of the business and/or assets of the Corporation, whether
directly or indirectly, by purchase, merger, consolidation,
acquisition of stock, or otherwise, by an agreement in form and
substance satisfactory to the Executive, expressly to assume
and agree to perform this Agreement in the same manner and to
the same extent as the Corporation would be required to perform
if no such succession had taken place.
10. Miscellaneous. (a) This Agreement shall be governed by
and construed in accordance with the laws of the State of
Minnesota, without reference to principles of conflict of laws.
The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may
not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective
successors and legal representatives. Any dispute,
disagreement or controversy shall be arbitrated in Minneapolis,
Minnesota as provided for in Minnesota Statutes 572.08 et seq.
under the rules, regulations and procedures of the American
Arbitration Association.
(b) All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the
other party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive:
<name and address>
If to the Corporation:
General Mills, Inc.
Number One General Mills Boulevard
Minneapolis, Minnesota 55426
Attn: General Counsel
or to such other address as either party shall have furnished
to the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the
addressee.
(c) The invalidity or unenforceability of any provision
of this Agreement shall be severable and not affect the
validity or enforceability of any other provision of this
Agreement.
(d) The Corporation may withhold from any amounts
payable under this Agreement such Federal, state or local taxes
as shall be required to be withheld pursuant to any applicable
law or regulation.
(e) This Agreement contains the entire understanding
with the Executive with respect to the subject matter hereof.
(f) The employment of Executive by the Corporation may
be terminated by either the Executive or the Corporation at any
time and for any reason. Nothing contained in the Agreement
shall affect such rights to terminate, provided, however, that
nothing in this Section 10(f) shall prevent the Executive from
receiving any amounts payable pursuant to Section 5(a) or
Section 5(b) of this Agreement in the event of a termination
described in such Section 5(a) or 5(b).
IN WITNESS WHEREOF, the Executive has hereunto set his hand
and, pursuant to the authorization from its Board of Directors,
the Corporation has caused these presents to be executed in its
name on its behalf, and its corporate seal to be hereunder
affixed and attested by its secretary or assistant secretary,
all as of the day and year first above written.
GENERAL MILLS, INC.
______________________________ By____________________________
Executive
Its___________________________
ATTEST:
______________________________
_______________ Secretary
(Seal)
EXHIBIT 10.6
SUPPLEMENTAL RETIREMENT PLAN
OF GENERAL MILLS, INC.
As Amended Effective January, 1991,
November, 1991, December, 1992
and May, 1994
SUPPLEMENTAL RETIREMENT PLAN
OF GENERAL MILLS, INC.
Effective as of January 1, 1991, General Mills, Inc. hereby amends
and restates the Supplemental Retirement Plan of General Mills,
Inc. for the exclusive benefit of its employees, pursuant to
authorization of the Board of Directors of General Mills, Inc.
Additional amendments have been made since the date of the last
restatement.
ARTICLE I
INTRODUCTION
Section 1.1 Name of Plan. The name of the Plan is the
"Supplemental Retirement Plan of General Mills, Inc." It is also
referred to as the "Supplemental Plan" or the "Plan."
Section 1.2 Effective Date. The effective date of the Plan
is January 1, 1976. This Plan, except as may otherwise be
specifically provided herein, shall not apply to Participants who
separated from active service prior to January 1, 1991.
ARTICLE II
DEFINITIONS
Section 2.1 Base Plan shall mean a defined benefit pension
plan sponsored by the Company, which is qualified under the
provisions of Code Section 401. With respect to any Participant in
this Plan where, as of June 1, 1991, the sum of such individual's
age and length of Company service equals or exceeds 65, Base Plan
shall mean the provisions of such plan as were in effect on
December 31, 1988, and benefits under this Plan shall be determined
as if such provisions had continued in effect until the date of the
Participant's termination or retirement from the Company. With
respect to any Participant in this Plan where, as of June 1, 1991,
the sum of such individual's age and Company service is less than
65, Base Plan shall mean the provisions of such Plan as are in
effect on the date of such Participant's termination or retirement
from the Company.
Section 2.2 Board shall mean the Board of Directors of
General Mills, Inc.
Section 2.3 Change in Control shall mean the occurrence of
any of the following events:
(a) any person (including a group as defined in Section
13(d)(3) of the Securities Exchange Act of 1934)
becoming, directly or indirectly, the beneficial owner of
twenty percent (20%) or more of the shares of stock of
General Mills, Inc. entitled to vote for the election of
directors.
(b) as a result of or in connection with any cash tender
offer, exchange offer, merger or other business
combination, sale of assets or contested election, or
combination of the foregoing, the persons who were
directors of the Company just prior to such event shall
cease to constitute a majority of the Company's Board of
Directors; or
(c) the stockholders of the Company approve an agreement
providing for a transaction in which the Company will
cease to be an independent publicly-owned corporation or
a sale or other disposition of all or substantially all
of the assets of the Company occurs.
Section 2.4 Code shall mean the Internal Revenue Code of
1986, as it may be amended from time to time.
Section 2.5 Company shall mean General Mills, Inc. and any
of its subsidiaries or affiliated business entities as shall be
authorized to participate in the Plan by the Board, or its
delegate.
Section 2.6 Compensation Committee shall mean the
Compensation Committee of the Board.
Section 2.7 Deferred Cash Award shall mean the cash amount
deferred by an individual under any formal plan of deferred
compensation sponsored by the Company. A Deferred Cash Award shall
not include:
(a) any base salary which was deferred during calendar year
1986;
(b) any interest or investment increment applied to the
amount of the cash award which is deferred; or
(c) any cash amount deferred by any person under any
individual contract or arrangement with the Company or
any of its subsidiaries or affiliated business entities.
Section 2.8 ERISA shall mean the Employee Retirement Income
Security Act of 1974, as it may be amended from time to time.
Section 2.9 Minor Amendment Committee shall mean the Minor
Amendment Committee appointed by the Compensation Committee.
Section 2.10 "Maximum Benefit" shall mean the maximum annual
benefit payable in dollars permitted to be either accrued or paid
to a participant of any Base Plan, as determined under all
applicable provisions of the Code and ERISA, specifically taking
into account the limitations of Code Sections 401(a)17 and 415, and
any applicable regulations thereunder. It is specifically intended
that the Maximum Benefit, as defined herein, shall take into
account changes in the dollar limits under Code Sections 401(a)17
and 415, and benefits payable from this Plan and the Base Plan
shall be adjusted accordingly. In addition, if a Base Plan limits
the accrued benefits of any Participant by restricting the
application of future changes in such dollar limits with respect to
such Participant, benefits payable under this Plan shall
nevertheless be determined on the full amount that would have been
permissible absent such restrictions under the Base Plan.
Section 2.11 Participant shall mean an individual who is a
participant in the Company's Executive Incentive Plan or who is
eligible to defer compensation under a formal deferred compensation
program maintained by the Company, and who is:
(a) an active participant in one or more Base Plans on and
after January 1, 1976 and whose accrued benefits,
determined on the basis of the provisions of such Base
Plans without regard to the Maximum Benefit, would exceed
the Maximum Benefit;
(b) An individual with a Deferred Cash Award, which, if
included as compensation under any Base Plans in which
such individual is a participant, would result in a
greater accrued benefit under the provisions of such Base
Plans;
(c) An active participant of the General Mills, Inc.
Executive Incentive Plan who is entitled to a vested
Pension under a Base Plan and who is involuntarily
terminated prior to attainment of age 55, if the sum of
such individual's age and length of company service at
the date of termination equals or exceeds 75; or
(d) An individual who participates in the Retirement Income
Plan of General Mills, Inc., where the sum of such
individual's age and length of Company service as of
June 1, 1991 equals or exceeds 65, and who would have been
entitled to a greater benefit under the provisions of the
RIP at the time of his or her retirement from the Company
had he or she not been considered a "highly compensated
employee" for any period on or after January 1, 1989.
An eligible individual shall remain a Participant under this
Supplemental Plan until all amounts payable on his or her behalf
from this Plan have been paid.
Section 2.12 Defined Terms. Capitalized terms which are not
defined herein shall have the meaning ascribed to them in the
relevant Base Plan.
ARTICLE III
BENEFITS
Section 3.1 Effect of Retirement. Upon the Normal, Early,
Late or Disability Retirement of a Participant, as provided under a
Base Plan, such Participant shall be entitled to a benefit equal to
the amount determined in accordance with the provisions of the Base
Plan without regard to the limitations of the Maximum Benefit,
including as compensation for purposes of such calculation any
Deferred Cash Award (as if actually paid at the time of the award),
reduced by the lesser of the Participant's actual accrued benefit
under such Base Plan or the Maximum Benefit.
In the event a Participant has accrued benefits under more
than one Base Plan, the provisions of the Base Plan from which the
Participant retires as an Active Participant shall be used to
determine the total benefits payable without regard to the Maximum
Benefit.
If the Participant received a partial prepayment as described
in Section 3.10, benefits payable under this Section shall be
adjusted as provided in Section 3.11.
Section 3.2 Spouse's Pension. Upon the death of a
Participant whose surviving spouse is eligible for a Spouse's
Pension under a Base Plan, such surviving spouse shall be entitled
to a benefit under this Supplemental Plan, determined in accordance
with the provisions of the Base Plan without regard to the
limitations of the Maximum Benefit, and including as compensation
for purposes of such calculation any Deferred Cash Award (as if
actually paid at the time of the award), reduced by the lesser of
the actual Spouse's Pension payable under such Base Plan or the
Maximum Benefit.
In the event a Participant had accrued benefits under more
than one Base Plan, the provisions of the Base Plan under which the
Participant was accruing benefits as an Active Participant shall be
used to determine the total benefits payable without regard to the
Maximum Benefit.
If the Participant received a partial prepayment as described
in Section 3.10, benefits payable under this Section shall be
adjusted as provided in Section 3.11.
Section 3.3 Effect of Termination Prior to Retirement
Eligibility. If a Participant terminates employment with the
Company and is entitled to a Vested Deferred Pension under a Base
Plan, such Participant shall be entitled to a benefit equal to the
amount determined in accordance with the provisions of the Base
Plan without regard to the limitations of the Maximum Benefit,
including as compensation for purposes of such calculation any
Deferred Cash Award (as if actually paid at the time of the award),
reduced by the lesser of the Participant's actual accrued benefit
under such Base Plan or the Maximum Benefit.
In the event a Participant has participated in more than one
Base Plan, the provisions of the Base Plan under which the
Participant was accruing benefits as an Active Participant at the
time of such separation from service shall be used to determined
the total amount of benefit payable without regard to the Maximum
Benefit.
If the Participant received a partial prepayment as described
in Section 3.10, benefits payable under this Section shall be
adjusted as provided in Section 3.11.
Section 3.4 Benefits Prior to Separation from Service.
Prior to a Participant's separation from service due to Retirement,
termination or death, benefits shall accrue under this Supplemental
Plan, based on the Participant's actual accrued benefit under a
Base Plan or Plans, the Maximum Benefit and Deferred Cash Awards,
if any. A Participant's benefit under this Supplemental Plan may
increase or decrease, before or after Retirement or termination, as
a result of changes in the formula under any Base Plan, the Maximum
Benefit, or changes in the earnings used to calculate benefits
under a Base Plan formula.
Any benefit accrued under this Supplemental Plan as a result
of a Participant's Deferred Cash Award shall be payable only if,
and to the extent that on the date of his or her termination of
employment, both of the following conditions are satisfied:
(a) The Participant has a vested accrued benefit under the
applicable Base Plan; and
(b) A Deferred Cash Award was made during a year which is
used in the calculation of Final Average Earnings under
this Supplemental Plan on the date of termination.
If the Participant received a partial prepayment as described
in Section 3.10, benefits payable under this Section shall be
adjusted as provided in Section 3.11.
Section 3.5 Effect of Involuntary Termination of EIP
Participants Prior to Retirement Eligibility. In the event of the
involuntary termination of an active Participant of the General
Mills, Inc. Executive Incentive Plan, where the sum of such
Participant's age and years of service with the Company equals or
exceeds 75 at the date of termination, and who is entitled to a
Vested Deferred Pension under a Base Plan, the provisions of this
Section shall apply. Subject to the aggregate limits of Section
4.4, such Participant shall be entitled to receive benefits
determined under this Section, in addition to any benefit provided
under Section 3.3. Such additional benefits shall be in the form
of a retirement supplement, calculated as the difference between an
Early Retirement Pension under the provisions of such Base Plan and
a Vested Deferred Pension under such Base Plan.
If the Participant received a partial prepayment as described
in Section 3.10, benefits payable under this Section shall be
adjusted as provided in Section 3.11.
Section 3.6 Effect of Termination of the Retirement Income
Plan of General Mills, Inc. In the event of the termination of the
Retirement Income Plan of General Mills, Inc. (RIP) within five
years after a Change in Control each Participant of the RIP whose
benefits would then exceed the Maximum Benefit as a result of the
changes required under Section 12.4 of the RIP shall be entitled to
receive such excess benefits under the Supplemental Plan.
Section 3.7 Form of Payment. Any benefit amount payable
under the Supplemental Plan to a married Participant shall be
adjusted and paid in the form of a joint and 100% to survivor
annuity. Any benefit amount payable under the Supplemental Plan to
an unmarried Participant shall be paid in the form of a single life
annuity. Notwithstanding the above, a married Participant may
request, subject to the approval of the Minor Amendment Committee,
to have such benefit amounts adjusted and paid as a joint and 50%
to survivor annuity or as a single life annuity. Further, any
Participant may request, subject to the approval of the Minor
Amendment Committee, that any benefit amount be paid in a single
sum payment in cash, effective as of the first day monthly benefits
would otherwise begin. Any request for an alternate form of
benefit that is granted may be made at any time before benefits
would otherwise begin. The Minor Amendment Committee may approve
or reject any such request in its sole discretion. Any joint and
survivor annuity shall be the actuarial equivalent of a single life
annuity based on the following factors, determined using the ages
of the Participant and spouse on the effective date of the payment:
(a) For benefits commencing after January 1, 1989. The
formula for the joint and 100% to survivor factor is:
.868 + .005 (65 - X) + .005 (Y - X), where X is
equal to the Participant's age and Y is equal to the
age of the spouse.
The formula for the joint and 50% to survivor factor is:
.928 + .003 (65 - X) + .003 (Y - X), where X is
equal to the Participant's age and Y is equal to the
age of the spouse.
(b) For benefits commencing on or before January 1, 1989.
The formula for the joint and 100% to survivor factor is:
.815 + .007 (63 - X) + .007 (Y - X), where X is
equal to the Participant's age and Y is equal to the
age of the spouse.
The formula for the joint and 50% to survivor factor is:
.898 + .004 (63 - X) + .004 (Y - X), where X is
equal to the Participant's age and Y is equal to the
age of the spouse.
For the purpose of calculating any lump sum payment, the interest
rate used shall be the immediate annuity interest rate determined
by the Pension Benefit Guaranty Corporation as in effect on the
first day of the year in which a distribution is to be made.
Section 3.8 Time of Payment. The payment of benefits
determined under the provisions of the Supplemental Plan shall
commence on the first day of the month coincident with or next
following the date upon which a Participant (or surviving spouse)
first becomes eligible to commence receiving benefits under the
Base Plan or Plans, regardless of the time benefits actually
commence under the Base Plan. Notwithstanding any other provisions
of the Supplemental Plan to the contrary, the Minor Amendment
Committee may, in its sole discretion, direct that payments be made
before such payments are otherwise due, if, for any reason
(including but not limited to, a change in the tax or revenue laws
of the United States of America, a published ruling or similar
announcement issued by the Internal Revenue Service, a regulation
issued by the Secretary of the Treasury or his delegate, or a
decision by a court of competent jurisdiction involving a
Participant or Beneficiary), it believes that a Participant or
Beneficiary has recognized or will recognize income for federal
income tax purposes with respect to amounts that are or will be
payable under the Supplemental Plan before they are to be paid. In
making this determination, the Minor Amendment Committee shall take
into account the hardship that would be imposed on the Participant
or Beneficiary by the payment of federal income taxes under such
circumstances.
Section 3.9 Effect of Changes in the Maximum Benefit. In
the event the dollar amount of the Maximum Benefit increases as a
result of federal legislation, the benefits of any Participant
payable under the Supplemental Plan, whether or not in pay status,
shall be recalculated to take into account the higher Maximum
Benefit payable from the applicable Base Plan. If payments have
already commenced under the provisions of the applicable Base Plan
and the Supplemental Plan, benefit amounts under both Plans shall
be adjusted to reflect the higher Maximum Benefit, by increasing
the amount paid under the Base Plan and decreasing the amount paid
under the Supplemental Plan, as soon as administratively possible
after such a change. Notwithstanding the above, if a Base Plan is
terminated, no adjustments shall be made to benefits payable under
the Supplemental Plan with respect to changes in the Maximum
Benefit after the date of termination of the Base Plan.
Section 3.10 Partial Prepayment. Notwithstanding any other
provisions of this Supplemental Plan, partial prepayment of
benefits due under this Supplemental Plan may be made from time to
time, pursuant to amendments to this Section. Prepayments so
authorized are described as follows:
(a) (1) The first prepayment was authorized to be made in
January, 1988 to those active Participants who, on
December 31, 1987, had earned vested accrued benefits
under one or more Base Plans equal to the Maximum Benefit
then in effect, payable at December 31, 1987, or age 55,
if later.
(2) The second prepayment was authorized to be made on or
after October, 1988 and before December 31, 1988, to
those active Participants who had earned vested accrued
benefits under one or more Base Plans, when projected to
December 31, 1988, equal to the Maximum Benefit then if
effect, payable at December 31, 1988, or age 55, if
later.
(3) The third prepayment was authorized to be made in
December, 1989, to those active Participants who, if the
Base Plans had continued in effect through December 31,
1989 as in effect on December 31, 1988, would have earned
vested accrued benefits under such Base Plans equal to
the Maximum Benefit then in effect, payable at January 1,
1990, or at age 55 if later.
(4) The fourth prepayment was authorized to be made in
October, 1990, to those active Participants who, if the
Base Plans had continued in effect through December 31,
1990, as in effect on December 31, 1988, would have
earned vested accrued benefits under such Base Plans
equal to the Maximum Benefit then if effect, payable at
January 1, 1991, or at age 55 if later.
(5) The fifth prepayment was authorized to be made in
December, 1991, to those active Participants who had
earned vested accrued benefits under one or more Base
Plans, when projected to December 31, 1991, equal to the
Maximum Benefit then in effect, payable at December 31,
1991, or age 55, if later, but only to the extent that,
when estimated benefits payable at each Participant's
normal retirement age were projected, the Participant's
additional benefits payable from this Plan at such normal
retirement date were equal to or greater than zero.
(6) The sixth prepayment was authorized to be made in
December, 1992, to those active Participants who had
earned vested accrued benefits under one or more Base
Plans, when projected to December 31, 1992, equal to the
Maximum Benefit then in effect, payable at December 31,
1992, but only to the extent that, when estimated
benefits payable at each Participant's normal retirement
age (or announced early retirement age, if earlier) were
projected, the Participant's additional benefits payable
from this Plan at such retirement date were equal to or
greater than zero.
(b) For such Participants identified in (a) above, who were
eligible for a Normal or Early Retirement under the applicable
Base Plans as of the stated dates, a monthly benefit payable
under this Supplemental Plan is calculated as if (i)
retirement actually occurred on the stated date, and (ii) the
benefits payable under the applicable Base Plans were paid
under the normal form of payment provided in such Base Plans.
The resulting benefit payable under the provisions of this
Supplemental Plan shall be calculated as if payable in the
form of an annuity for the life of such Participant.
(c) For such Participants who are participating in the Company's
Executive Incentive Plan but are not eligible for a Normal or
Early Retirement under the applicable Base Plans as of the
stated date, a monthly benefit payable under this Supplemental
Plan is calculated under the provisions of Section 3.5 as if
(i) such a Participant's involuntary termination occurred as
of the stated date, and (ii) the benefit payable under the
applicable Base Plans is paid under the normal form of payment
provided in such Base Plans. The resulting benefit payable
under the provisions of this Supplemental Plan shall be
calculated as if payable in the form of an annuity payable for
the life of such Participant.
(d) The present value of the monthly benefits payable under this
Supplemental Plan as calculated above shall be based on the
immediate annuity interest rates determined by the Pension
Benefit Guaranty Corporation as in effect on the January 1 of
the year of any such authorized prepayment.
(e) In the event the Compensation Committee, or its delegate,
believes that payment of the entire present value of any
amounts calculated pursuant to this Section may result in
an overpayment of amounts that would have been payable
under this Supplemental Plan upon the actual retirement
or separation from service of any of such Participants,
without regard to the provisions of this Section, the
Compensation Committee, or its delegate, shall reduce the
amount of the single sum payment as the Compensation
Committee, or its delegate, in its sole discretion, deems
appropriate.
Section 3.11 Adjustment for Prepayment. With respect to any
Participant who received a prepayment of benefits under Section
3.10 above, the benefits due upon Retirement, separation or death
under Sections 3.1, 3.2, 3.3, 3.4 or 3.5, or a subsequent
prepayment of benefits due under Section 3.10, shall be adjusted to
reflect the prepayment of benefits in the following manner:
(a) The monthly benefit payable under the applicable section
shall be calculated first without regard to prepayment,
under a life only form of payment.
(b) The offset for each prepayment shall be calculated based
on a lump sum future value of the amount of the
prepayment. Such amount will be calculated using the
time period from the stated date as of which the
prepayment was calculated to the date of the
Participant's retirement, separation, subsequent payment
date, or death, and an annual interest rate equal to
66.2% of the immediate annuity interest rate used to
calculate the lump sum value of such prepayment, on the
after-tax value of the prepayment. The after-tax value
of the prepayment shall be based on an effective annual
tax rate of 33.8%. This same rate shall be used to
compute a before-tax value for offset purposes. The
resulting lump sum future value is to be converted to a
life annuity figure using the 1983 Group Annuity
Mortality table for males.
(c) The result in (b) above shall be subtracted from (a)
above after both figures have been adjusted for the
appropriate form of benefit selected by the Participant
(or spouse, in the event of the Participant's death).
The result shall be the additional benefit remaining, if
any, to be paid from this Supplemental Plan. In the
event of multiple prepayments for such a Participant, the
offset for each prepayment shall be calculated separately
and applied to the benefit in (a) above in the order in
which paid. In the event the amount (or amounts in the
event of multiple payments) determined in (b) above is
equal to the amount determined in (a) above, no
additional benefits shall be payable under this
Supplemental Plan. If the amount (or amounts in the
event of multiple payments) determined in (b) above is
greater than the amount determined in (a) above, the
Company shall be entitled to recover the amount of any
excess prepayments from the Participant and may withhold
and retain sums which would otherwise be payable to the
Participant under any other nonqualified plan of the
Company in satisfaction of the excess prepayment.
Section 3.12 Participants Formerly on Leave to General Mills
Restaurants, Inc. Participants in this Plan (i) who were active
participants in the Retirement Income Plan of General Mills, Inc.
("RIP") on "leave of absence status" to General Mills Restaurants,
Inc. and (ii) whose leaves were canceled effective as of May 31,
1991, may be entitled to additional benefits under this Plan as
described below. In addition to any benefits that such a
Participant may be entitled to under the provisions of this Article
III, this Plan shall also pay the difference, if any, between the
total benefits the Participant is entitled to from the Base Plan in
which he or she is participating at the time of termination and
this Plan, and the total benefits the Participant would have been
entitled to from the RIP and this Plan, had the Participant
continued to participate in the RIP until the date of the
Participant's termination of employment or Retirement.
Section 3.13 Presidents of General Mills Restaurants, Inc.
Participants in this Plan who were employed as Presidents of a
General Mills Restaurants, Inc. division as of May 31, 1994, were
not eligible for any benefit accrual under the terms of the Base
Plan in which they participated for the period from January 1, 1989
through May 31, 1994. Benefits shall accrued under the terms of
this Plan equal to the entire benefit which would have accrued to
such individuals under the applicable Base Plan for this period.
The form and timing of such payments shall be subject to all
provisions of this Plan.
ARTICLE IV
PLAN ADMINISTRATION
Section 4.1 Compensation Committee. The Supplemental Plan
shall be administered by the Compensation Committee, and the
Compensation Committee shall have full authority to interpret the
Supplemental Plan. Such interpretations of the Compensation
Committee shall be final and binding on all parties, including the
Participants, their beneficiaries, surviving spouses and the
Company.
Section 4.2 Delegated Duties. The Compensation Committee
shall have the authority to delegate the duties and
responsibilities of administering the Supplemental Plan,
maintaining records, issuing such rules and regulations as it deems
appropriate, and making the payments hereunder to such employees or
agents of the Company as it deems proper.
Section 4.3 Amendment and Termination. The Board, or if
specifically delegated, its delegate, may amend, modify or
terminate the Supplemental Plan at any time, provided, however,
that no such amendment, modification or termination shall adversely
affect any accrued benefit under the Supplemental Plan to which a
Participant, or the Participant's Beneficiary, is entitled under
Article III prior to the date of such amendment or termination, and
in which such Participant, or the Participant's Beneficiary, would
have been vested if such benefit had been provided under the
applicable Base Plan, unless the Participant, or the Participant's
Beneficiary, becomes entitled to an amount equal to the cash value
of such benefit under another plan, program or practice adopted by
the Company. Notwithstanding the above, no amendment,
modification, or termination which would affect benefits accrued
under this Supplemental Plan prior to such amendment, modification
or termination may occur after a Change in Control without the
written consent of a majority of the Participants determined as of
the day before such Change in Control. Each year the Compensation
Committee shall notify, in writing, those individuals who have any
accrued benefits under the Supplemental Plan.
Section 4.4 Payments. The Company will pay all benefits
arising under this Supplemental Plan and all costs, charges and
expenses relating thereto. The benefits payable under this
Supplemental Plan to each Participant shall not be greater that
what would have been paid in the aggregate under the Base Plan (i)
in the absence of federal limitations on benefit amounts, (ii) if
amounts deferred had been paid to the Participant when earned, and
(iii) with respect to Section 3.5, the Participant had actually
been eligible for Early Retirement under the Base Plan.
Section 4.5 Arbitration.
(a) Any controversy or claim arising out of or relating to
this Plan, or any alleged breach of the terms or
conditions contained herein, shall be settled by
arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (the "AAA")
as such rules may be modified herein.
(b) An award rendered in connection with an arbitration
pursuant to this Section shall be final and binding and,
judgment upon such an award may be entered and enforced
in any court of competent jurisdiction.
(c) The forum for arbitration under this Plan shall be
Minneapolis, Minnesota and the governing law for such
arbitration shall be laws of the State of Minnesota.
(d) Arbitration under this Section shall be conducted by a
single arbitrator selected jointly by the Company and the
Participant (the "Complainant"). If within thirty (30)
days after a demand for arbitration is made, the Company
and the Complainant are unable to agree on a single
arbitrator, three arbitrators shall be appointed. Each
party shall select one arbitrator and those two
arbitrators shall then select a third neutral arbitrator
which thirty (30) days after their appointment. In
connection with the selection of the third arbitrator,
consideration shall be given to familiarity with
executive compensation plans and experience in dispute
resolution between parties, as a judge or otherwise. If
the arbitrators selected by the parties cannot agree on
the third arbitrator, they shall discuss the
qualifications of such third arbitrator with the AAA
prior to selection of such arbitrator, which selection
shall be in accordance with the Commercial Arbitration
Rules of the AAA.
(e) If an arbitrator cannot continue to serve, a successor to
an arbitrator selected by a party shall be also selected
by the same party, and a successor to a neutral
arbitrator shall be selected as specified in subsection
(d) of this Section. A full rehearing will be held only
if the neutral arbitrator is unable to continue to serve
or if the remaining arbitrators unanimously agree that
such a rehearing is appropriate.
(f) The arbitrator or arbitrators shall be guided, but not
bound, by the Federal Rules of Evidence and by the
procedural rules, including discovery provisions, of the
Federal Rules of Civil Procedure. Any discovery shall be
limited to information directly relevant to the
controversy or claim in arbitration.
(g) The parties shall each be responsible for their own costs
and expenses, except for the fees and expenses of the
arbitrators, which shall be shared equally by the Company
and the Complainant.
Section 4.6 Non-Assignability of Benefits. Neither any
benefit payable hereunder nor the right to receive any future
benefit payable under the Supplemental Plan may be anticipated,
alienated, sold, transferred, assigned, pledged, encumbered, or
subjected to any charge or legal process, and if any attempt is
made to do so, or a person eligible for any benefits becomes
bankrupt, the interest under the Supplemental Plan of the person
affected may be terminated by the Compensation Committee which, in
its sole discretion, may cause the same to be held or applied for
the benefit of one or more of the dependents of such person or make
any other disposition of such benefits that it deems appropriate.
Section 4.7 Applicable Law. All questions pertaining to
the construction, validity and effect of the Supplemental Plan
shall be determined in accordance with the laws of the United
States and the laws of the State applicable to the Base Plan
covering the Participant.
Section 4.8 Supplemental Benefits Trust. The Company has
established a Supplemental Benefits Trust with Norwest Bank
Minneapolis, N.A. as Trustee to hold assets of the Company under
certain circumstances as a reserve for the discharge of the
Company's obligations under the Supplemental Plan and certain other
plans of deferred compensation of the Company. In the event of a
Change in Control as defined in Section 2.3 hereof, the Company
shall be obligated to immediately contribute such amounts to the
Trust as may be necessary to fully fund all benefits payable under
the Supplemental Plan. Any Participant of the Supplemental Plan
shall have the right to demand and secure specific performance of
this provision. The Company may fund the Trust in the event of the
occurrence of a Potential Change in Control as determined by the
Finance Committee of the Board. All assets held in the Trust
remain subject only to the claims of the Company's general
creditors whose claims against the Company are not satisfied
because of the Company's bankruptcy or insolvency (as those terms
are defined in the Trust Agreement). No Participant has any
preferred claim on, or beneficial ownership interest in, any assets
of the Trust before the assets are paid to the Participant and all
rights created under the Trust, as under the Supplemental Plan, are
unsecured contractual claims of the Participant against the
Company.
EXHIBIT 10.9
SUPPLEMENTAL SAVINGS PLAN
OF GENERAL MILLS, INC.
Restated as of January 1, 1989
With Certain Provisions Effective as of January, 1992
Further Amended as of November, 1991,
December, 1992, and August, 1993
SUPPLEMENTAL SAVINGS PLAN
OF GENERAL MILLS, INC.
The Supplemental Savings Plan of General Mills, Inc., a non-
qualified deferred compensation plan for the exclusive benefit of
its employees, is hereby amended and restated as of January 1,
1989, with certain provisions effective as of January 1, 1992,
pursuant to authorization of the Board of Directors of General
Mills, Inc.
ARTICLE I
INTRODUCTION
Section 1.1 Name of Plan. The name of the Plan is the
"Supplemental Savings Plan of General Mills, Inc." It is also
referred to as the "Supplemental Savings Plan" or the "Plan."
Section 1.2 Effective Date. The effective date of the Plan
is July 25, 1983.
Section 1.3 Purpose. The purposes of the Supplemental
Savings Plan are to: (i) provide a means by which a Participant
may, under certain circumstances, be credited with benefits which,
in the absence of restrictions imposed by Code Sections 401(a)(17),
401(k), 401(m) or 415, would be provided as Company Contributions
under a Base Plan; and (ii) provide a means by which certain
individuals, who are otherwise eligible to participate in this
Plan, may be credited with amounts set forth under individual
arrangements which the Minor Amendment Committee has approved for
inclusion in this Plan.
ARTICLE II
DEFINITIONS
Section 2.1 Account shall mean a Participant's individual
account, as described in Section 3.2 of this Plan.
Section 2.2 Base Plan shall mean a defined contribution
plan sponsored by the Company, which is qualified under the
provisions of Code Section 401, including the Voluntary Investment
Plan of General Mills, Inc. (VIP), the Profit Sharing & Savings
Plan for General Mills Restaurants, Inc. (PSSP), the General Mills,
Inc. Employee Stock Ownership Plan (ESOP), the Retirement Savings
Plan of General Mills, Inc. (RSP), and such other defined
contribution plans as have been declared by the Board to be covered
by this Plan.
Section 2.3 Beneficiary shall mean the beneficiary or
beneficiaries designated by the Participant in writing to receive
the balance, if any, remaining in the Participant's Account upon
the Participant's death.
Section 2.4 Board shall mean the Board of Directors of
General Mills, Inc.
Section 2.5 Change in Control shall mean the occurrence of
any of the following events:
(a) any person (including a group as defined in Section
13(d)(3) of the Securities Exchange Act of 1934)
becoming, directly or indirectly, the beneficial owner of
twenty percent (20%) or more of the shares of stock of
General Mills, Inc. entitled to vote for the election of
directors;
(b) as a result of or in connection with any cash tender
offer, exchange offer, merger or other business
combination, sale of assets or contested election, or
combination of the foregoing, the persons who were
directors of the Company just prior to such event shall
cease to constitute a majority of the Company's Board of
Directors; or
(c) the stockholders of the Company approve an agreement
providing for a transaction in which either the Company
will cease to be an independent publicly-owned
corporation or a sale or other disposition of all or
substantially all of the assets of the Company occurs.
Section 2.6 Code shall mean the Internal Revenue Code of
1986, as amended from time to time.
Section 2.7 Company shall mean General Mills, Inc., and any
of its subsidiaries or affiliated business entities authorized to
participate in a Base Plan by the Board, or its delegate.
Section 2.8 Company Contribution shall mean any
contribution or other addition to be made or allocated by the
Company under a Base Plan, other than a contribution made pursuant
to a Participant's election to make contributions under Code
Sections 401(k) or 401(m).
Section 2.9 ERISA shall mean the Employee Retirement Income
Security Act of 1974, as it may be amended from time to time.
Section 2.10 Limitation Year shall mean the calendar year.
Section 2.11 Minor Amendment Committee shall mean the Minor
Amendment Committee appointed by the Compensation Committee of the
Board.
Section 2.12 Participant shall mean an employee who is
eligible to participate in a formal non-qualified deferred
compensation program adopted by the Company and who participates in
this Supplemental Savings Plan pursuant to Article III.
Section 2.13 Defined Terms. Capitalized terms which are not
defined herein shall have the meaning ascribed to them in the
relevant Base Plan.
ARTICLE III
PARTICIPATION
Section 3.1 Participation. An employee described in
Section 2.12 will participate in this Plan if:
(a) as a result of the application of Code Section 415, no
additional contributions can be made to the Base Plan for
the remainder of the applicable Limitation Year, or as a
result of the application of Code Section 401(a)(17), or
the application of the nondiscrimination testing
limitations imposed by Code Sections 401(k) and 401(m),
he or she cannot make any further Participant
contributions to the Base Plan for the remainder of the
Plan Year for the Base Plan; or
(b) an individual deferred compensation agreement exists with
respect to the employee, and the Minor Amendment
Committee approves the inclusion of the amounts to be
credited under such agreement as "Company Contributions"
under the terms of this Plan. Once credited under this
Plan, such amounts shall be subject to all provisions of
this Plan.
Section 3.2 Establishment of Supplemental Savings Plan
Accounts. The Company shall establish an Account for each
Participant to which amounts shall be credited in accordance with
Section 3.3. Such amounts shall be credited to Participants'
Accounts under this Plan as bookkeeping entries only.
Section 3.3 Crediting of Company Contributions. Company
Contributions may be credited to a Participant's Account under the
following circumstances:
(a) A Participant shall be credited with amounts under this
Plan equal to the additional Company Contributions that
would have been made to the Base Plan with respect to
such Participant for the remainder of the Plan Year or
Limitation Year, as appropriate, as if the restrictions
described in Section 3.1 did not apply. Such amounts
shall be credited to such Participant's Account under
this Plan as of the last day of the month coincident with
or next following the date the additional Company
Contributions would have been made to the Base Plan if
the restrictions described in Section 3.1 did not apply.
Such credits shall be based on the rate of total
contributions elected by the Participant under the Base
Plan as in effect for the period in which the applicable
restriction first applies, but not more than the maximum
percentage of Earnable Compensation with respect to which
Company Contributions may be made pursuant to the Base
Plan as in effect for the period without regard to any
limitations on Company Contributions which may be imposed
under the Base Plan in order to comply with the
applicable limitations. In no event will amounts be
credited under this Plan with respect to any Participant
if the Participant is able to make any additional
contributions under the Base Plan without violating: (a)
the limitations of Code Section 401(a)(17); (b) the
limitations of Code Section 415; or (c) the application
of the nondiscrimination limitations under Code Sections
401(k) and 401(m).
In no event shall a Participant be credited with
Contributions under a Base Plan and this Plan during a
given period that would exceed the Contributions that
would have been made to the Base Plan in the absence of
the restrictions imposed by Code Sections 401(a)(17),
401(k), 401(m) and 415.
(b) Under the terms of an individual agreement, the amount of
Company Contributions shall be determined at the time the
Minor Amendment Committee approves the inclusion of such
amounts as Company Contributions under this Plan.
Section 3.4 Changes in Amounts Credited to a Supplemental
Savings Plan Account. Amounts credited to a Participant's
Supplemental Savings Plan Account shall be treated as if invested
in the Fixed Income Fund of the VIP, unless the Participant has
specifically requested, in writing, that the contribution be
attributed to a different fund, or combination of funds otherwise
available from time to time under the VIP. Effective as of January
1, 1992, the fund elections available for Accounts under this Plan
shall be the Fixed Income Fund, the Equity Fund, the International
Fund and the U. S. Treasury Fund of the VIP. Participants who had
previously elected to have a portion of their Account under this
Plan credited as if in the Company Stock Fund shall be given an
opportunity to make a written election to have such amounts
credited as if in any combination of the Fixed Fund, Equity Fund,
U. S. Treasury Fund or International Fund for periods beginning
January 1, 1992. In the absence of a written election from a
Participant with amounts credited under the Company Stock Fund as
of December 31, 1991, such amounts shall be credited under this
Plan as if the Participant elected to have such amounts credited in
the Fixed Income Fund for periods beginning on and after January 1,
1992. Transfers of amounts already credited to a Participant's
Supplemental Savings Plan Account shall be permitted as of the
first day of any month, provided a written request is received by
the Minor Amendment Committee, or its delegate, on or before the
last business day of the preceding month.
Section 3.5 Distribution of Amounts Credited to a
Supplemental Savings Plan Account. Amounts credited to a
Participant's Supplemental Savings Plan Account shall be available
for distribution only at such times as set forth in this Section.
(a) Hardship Withdrawals. If an active Participant withdraws
100% of the account balance available for withdrawal
under all Base Plans in which he or she participates,
such Participant may request a hardship withdrawal under
this Plan, by filing such a request in writing with the
Minor Amendment Committee. The Minor Amendment
Committee, in its sole discretion, may approve such a
request if it finds that the Participant has incurred a
severe financial hardship occasioned by an emergency,
including, but not limited to, illness, disability or
personal injury sustained by the Participant or a member
of the Participant's immediate family. If such a request
is approved, the Participant shall receive amounts
reasonably necessary to alleviate the financial hardship
from the value of such Participant's Supplemental Savings
Plan Account, effective as of the first day of the month
following the approval of such hardship withdrawal by the
Minor Amendment Committee.
(b) Death. In the event of the death of a Participant prior
to the date a full distribution has been made from the
Participant's Supplemental Savings Plan Account, the
Company shall make distribution of the balance in such
Account to the Participant's Beneficiary, effective as of
the January 1 coincident with or next following the date
of the Participant's death.
(c) Termination and Retirement. Unless an effective
"Participant Election," described below, has been filed
with the Minor Amendment Committee, the Company shall
make distribution of the amount credited to a
Participant's Supplemental Savings Plan Account to the
Participant, in a single sum, as soon as practical after
the January 1 coincident with or next following the
Participant's last day of employment with the Company. A
Participant may elect a later distribution date and/or
distribution in installments by filing a Participant
Election with the Minor Amendment Committee, specifying
the date and form of distribution of his or her
Supplemental Savings Plan Account. Such election shall
be effective provided all of the following requirements
are met:
(1) the Participant Election is filed with the Minor
Amendment Committee at least one year prior to the
date the distribution would otherwise be made;
(2) unless the date of the initial distribution from
this Plan pursuant to the Participant Election is
during the same calendar year as the date of
distribution would otherwise have been made in the
absence of such Participant election, the date of
the initial distribution from this Plan pursuant to
the Participant Election is at least one year after
the date the distribution would otherwise have been
made in the absence of such Participant Election;
and
(3) the form of distribution is specified as either a
single sum payment, or annual installment payments,
for a specified period of time, not to exceed ten
years.
A retired or terminated Participant (or Beneficiary of a
deceased Participant) may, at any time prior or
subsequent to the commencement of payments under this
Plan, elect in writing to have his or her form of payment
of all amounts due under this Plan changed to an
immediate single sum distribution which shall be paid
within one (1) business day of receipt by the Company of
such request; provided that the amount of any such single
sum distribution shall be reduced by an amount equal to
the product of (X) the total single sum distribution
otherwise payable (based on the value of the account as
of the first day of the month in which the lump-sum
amount is paid, adjusted by a pro-rata portion of the
rate of return for the month in which the lump-sum is
paid, determined by multiplying the actual rate of return
for such month by a fraction, the numerator of which is
the number of days in the month prior to the date of
payment, and the denominator of which is the number of
days in the month), and (Y) the rate set forth in
Statistical Release H.15(519), or any successor
publication, as published by the Board of Governors of
the Federal Reserve System for one-year U.S. Treasury
notes under the heading "Treasury Constant Maturities"
for the first day of the calendar month in which the
request for a single sum distribution is received by the
Company.
Notwithstanding any other provisions of this Plan to the
contrary, the Minor Amendment Committee, may, in its sole
discretion, direct that payments be made before such payments are
otherwise due if, for any reason (including, but not limited to, a
change in the tax or revenue laws of the United States of America,
a published revenue ruling or similar announcement issued by the
Internal Revenue Service, a regulation issued by the Secretary of
the Treasury or his delegate, or a decision by a court of competent
jurisdiction involving a Participant or Beneficiary), it believes
that a Participant or Beneficiary has recognized or will recognize
income for federal income tax purposes with respect to amounts that
are or will be payable under the Plan before they are to be paid.
In making this determination, the Minor Amendment Committee shall
take into account the hardship that would be imposed on the
Participant or Beneficiary by the payment of federal income taxes
under such circumstances. All distributions under this Plan shall
be in cash paid by check.
Section 3.6 No Forfeitures of Amounts in a Supplemental
Savings Plan Account. All credited amounts in the Plan shall be
fully vested. The Participant shall not forfeit any amount
credited to his or her Supplemental Savings Plan Account even
though such amount would have been forfeited if such amount had
been a Company Contribution under the Base Plan to which it was
attributable.
Section 3.7 Non-Assignability of Interests. The interests
herein and the right to receive distributions under this Plan may
not be anticipated, alienated, sold, transferred, assigned,
pledged, encumbered, or subjected to any charge or legal process,
and if any attempt is made to do so, or a Participant becomes
bankrupt, the interests of the Participant under the Plan may be
terminated by the Minor Amendment Committee, which, in its sole
discretion, may cause the same to be held or applied for the
benefit of one or more of the dependents of such Participant or
make any other disposition of such interests that it deems
appropriate. Notwithstanding the foregoing, in the event a
Participant has received an overpayment from the Supplemental
Retirement Plan of General Mills, Inc. and had failed to repay such
amounts upon written demand of the Company, the Company shall be
authorized and empowered, at the discretion of the Company, to
deduct such amount from the Participant's Deferred Accounts.
Section 3.8 Supplemental Benefits Trust. The Company has
established a Supplemental Benefits Trust with Norwest Bank
Minneapolis, N.A. as Trustee to hold assets of the Company under
certain circumstances as a reserve for the discharge of the
Company's obligations under the Plan and certain other plans of
deferred compensation of the Company. In the event of a Change in
Control as defined in Section 2.5 hereof, the Company shall be
obligated to immediately contribute such amounts to the Trust as
may be necessary to fully fund all benefits payable under the Plan.
Any Participant of the Plan shall have the right to demand and
secure specific performance of this provision. The Company may
fund the Trust in the event of the occurrence of a Potential Change
in Control as determined by the Finance Committee of the Board.
All assets held in the Trust remain subject only to the claims of
the Company's general creditors whose claims against the Company
are not satisfied because of the Company's bankruptcy or insolvency
(as those terms are defined in the Trust Agreement). No
Participant has any preferred claim on, or beneficial ownership
interest in, any assets of the Trust before the assets are paid to
the Participant and all rights created under the Trust, as under
the Plan, are unsecured contractual claims of the Participant
against the Company.
ARTICLE IV
PLAN ADMINISTRATION
Section 4.1 Administration. The Plan shall be administered
by the Minor Amendment Committee. The Minor Amendment Committee
shall have the authority to interpret the Plan and any such
interpretation shall be final and binding on all parties. The
Minor Amendment Committee shall have the authority to delegate the
duties and responsibilities of maintaining records, issuing such
regulations as it deems appropriate, and making distributions
hereunder. The Board, or if specifically delegated, its delegate,
may amend or terminate the Plan at any time, provided that no such
amendment or termination shall adversely affect the amounts
credited to a Supplemental Savings Plan Account before the time of
such amendment or termination unless the Participant becomes
entitled to a benefit equal in value to such amount under another
plan or practice adopted by the Company, and provided, further,
that the Plan may not be amended with respect to benefits accrued
under this Plan prior to such amendment after a Change in Control
without the written consent of a majority of Participants
determined as of the day before such Change in Control. The
Company will pay for all distributions made pursuant to the Plan
and for all costs, charges and expenses relating to the
administration of the Plan.
Section 4.2 Applicable Law. All questions pertaining to
the construction, validity and effect of the Plan shall be
determined in accordance with the laws of the United States of
America and the laws of the State applicable to the Base Plan
covering the Participant.
Section 4.3 Arbitration.
(a) Any controversy or claim arising out of or relating to
this Plan, or any alleged breach of the terms or
conditions contained herein, shall be settled by
arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (the "AAA")
as such rules may be modified herein.
(b) An award rendered in connection with an arbitration
pursuant to this Section shall be final and binding and,
judgment upon such an award may be entered and enforced
in any court of competent jurisdiction.
(c) The forum for arbitration under this Plan shall be
Minneapolis, Minnesota and the governing law for such
arbitration shall be laws of the State of Minnesota.
(d) Arbitration under this Section shall be conducted by a
single arbitrator selected jointly by the Company and the
Participant or Beneficiary, as applicable (the
"Complainant"). If within thirty (30) days after a
demand for arbitration is made, the Company and the
Complainant are unable to agree on a single arbitrator,
three arbitrators shall be appointed. Each party shall
select one arbitrator and those two arbitrators shall
then select a third neutral arbitrator which thirty (30)
days after their appointment. In connection with the
selection of the third arbitrator, consideration shall be
given to familiarity with executive compensation plans
and experience in dispute resolution between parties, as
a judge or otherwise. If the arbitrators selected by the
parties cannot agree on the third arbitrator, they shall
discuss the qualifications of such third arbitrator with
the AAA prior to selection of such arbitrator, which
selection shall be in accordance with the Commercial
Arbitration Rules of the AAA.
(e) If an arbitrator cannot continue to serve, a successor to
an arbitrator selected by a party shall be also selected
by the same party, and a successor to a neutral
arbitrator shall be selected as specified in subsection
(d) of this Section. A full rehearing will be held only
if the neutral arbitrator is unable to continue to serve
or if the remaining arbitrators unanimously agree that
such a rehearing is appropriate.
(f) The arbitrator or arbitrators shall be guided, but not
bound, by the Federal Rules of Evidence and by the
procedural rules, including discovery provisions, of the
Federal Rules of Civil Procedure. Any discovery shall be
limited to information directly relevant to the
controversy or claim in arbitration.
(g) The parties shall each be responsible for their own costs
and expenses, except for the fees and expenses of the
arbitrators, which shall be shared equally by the Company
and the Complainant.
EXHIBIT 10.13
GENERAL MILLS, INC.
SUPPLEMENTAL BENEFITS TRUST
TRUST AGREEMENT
This TRUST AGREEMENT, amended and restated as of September 26,
1988, is between General Mills, Inc. (the "Grantor") and
Norwest Bank Minnesota, N.A. (formerly known as Norwest Bank
Minneapolis, N.A.) (the "Trustee").
1. Purpose. The purpose of this trust (the "Trust"),
originally established on February 9, 1987, is to provide a
vehicle to (a) hold assets of the Grantor as a reserve for the
discharge of the Grantor's obligations to certain individuals
(the "Beneficiaries") entitled to receive benefits under the
Supplemental Savings Plan of General Mills, Inc., amended and
restated as of January 1, 1986, and any other plan of deferred
compensation that the Grantor so designates in writing to the
Trustee, including those plans designated in Exhibit A attached
hereto and made a part hereof (the "Plans"), and (b) invest,
reinvest, disburse and distribute those assets and the earnings
thereon as provided hereunder and in the Plans.
2. Trust Corpus. The Grantor hereby transfers to the
Trustee and the Trustee hereby accepts and agrees to hold, in
trust, the sum of Ten Dollars ($10.00) plus such cash and/or
property, if any, transferred to the Trustee by the Grantor or
on behalf of the Grantor pursuant to obligations incurred under
any or all of the Plans and the earnings thereon, and such cash
and/or property, together with the earnings thereon and
together with any other cash or property received by the
Trustee pursuant to Section 8(a) of this Trust Agreement, shall
constitute the trust estate and shall be held, managed and
distributed as hereinafter provided. The Grantor shall execute
any and all instruments necessary to vest the Trustee with full
title to the property hereby transferred.
3. Grantor Trust. The Trust is intended to be a trust of
which the Grantor is treated as the owner for federal income
tax purposes in accordance with the provisions of Sections 671
through 679 of the Internal Revenue Code of 1986, as amended
(the "Code"). If the Trustee, in its sole discretion, deems it
necessary or advisable for the Grantor and/or the Trustee to
undertake or refrain from undertaking any actions (including,
but not limited to, making or refraining from making any
elections or filings) in order to ensure that the Grantor is at
all times treated as the owner of the Trust for federal income
tax purposes, the Grantor and/or the Trustee will undertake or
refrain from undertaking (as the case may be) such actions.
The Grantor hereby irrevocably authorizes the Trustee to be its
attorney-in-fact for the purpose of performing any act which
the Trustee, in its sole discretion, deems necessary or
advisable in order to accomplish the purposes and the intent of
this Section 3. The Trustee shall be fully protected in acting
or refraining from acting in accordance with the provisions of
this Section 3.
4. Irrevocability of Trust. The Trust shall be irrevocable
and may not be altered or amended in any substantive respect,
or revoked or terminated by the Grantor in whole or in part,
without the express written consent of a majority of the
Beneficiaries of the Trust; provided, however, that the Trust
may be amended, as may be necessary either (i) to obtain a
favorable ruling from the Internal Revenue Service with respect
to the tax consequences of the establishment and settlement of
the Trust, or (ii) to make nonsubstantive changes, which have
no effect upon the amount of any Beneficiary's benefits, the
time of receipt of benefits, the identity of any recipient of
benefits, or the reversion of any assets to the Grantor prior
to the Trustee's satisfaction of all the Trustee's obligations
hereunder; provided, further, that in the event of a "Change of
Control" as defined in Section 12.4 of the Retirement Income
Plan of General Mills, Inc. (hereinafter referred to as a
"Change in Control"), the Trust may not be altered or amended
in any substantive respect, or revoked or terminated by the
Grantor's successor unless a majority of the Beneficiaries,
determined as of the day before such Change in Control, agree
in writing to such an alteration, amendment, revocation or
termination.
5. Investment of Trust Assets.
(a) Subject to the provisions of paragraph (b) below,
until the Trustee has distributed all of the assets of the
Trust in accordance with the terms hereof, the Trustee shall
invest and reinvest such assets (without regard to any state
law limiting the investment powers of fiduciaries) in such
securities and other property as the Trustee deems advisable,
considering the probable income (including capital appreciation
potential) from any such investment, the probable safety of the
assets of the Trust and, where appropriate, the rate of return
at which the assets would have been invested on behalf of each
Beneficiary under any applicable qualified defined contribution
plan maintained by the Grantor. Within the limitations of the
foregoing, the Trustee is specifically authorized to acquire,
for cash or on credit, every kind of property, real, personal
or mixed, and to make every kind of investment, specifically
including, but not limited to, corporate and governmental
obligations of every kind, preferred or common stocks,
securities of any regulated investment company or trust,
interests in common trust funds now or hereafter established by
a corporate trustee, and property in which the Trustee owns an
undivided interest in any other trust capacity. The Trustee is
expressly authorized and empowered to purchase such insurance
in its own name (and with itself as the beneficiary) as it
shall determine to be necessary or advisable to advance best
the purposes of the Trust and the interests of the
Beneficiaries.
(b) The Trustee shall invest and reinvest the assets of
the Trust in accordance with such investment objectives,
guidelines, restrictions or directions as the Grantor may
furnish to the Trustee at the time of the execution of the
Trust or at any later date; provided, however, that if there is
a Change in Control the Trust's investment objectives,
guidelines, restrictions or directions may not be changed by
the Grantor's successor unless a majority of the Beneficiaries,
determined as of the day before such Change in Control, agree,
in writing, to such a change.
6. Distribution of Trust Assets.
(a) Subject to the provisions of paragraph (b) below, at
such time as a Beneficiary is entitled to a payment under any
of the Plans, he shall be entitled to receive from the Trust
(i) an amount in cash equal to the amount to which he is
entitled under the Plan or Plans at such time, less (ii) any
payments previously made to him by the Grantor with respect to
such amount pursuant to the terms of the Plans. The
commencement of payments from the Trust shall be conditioned on
the Trustee's prior receipt of a written instrument from the
Beneficiary in a form satisfactory to the Trustee containing
representations as to (A) the amount to which the Beneficiary
is entitled under the Plans, (B) the fact that he has requested
the payment of such amount from the Grantor pursuant to the
terms of the Plans, (C) the amount, if any, he has received
from the Grantor under the Plans with respect to such amount,
and (D) the amount to be paid him by the Trust (i.e., the
difference between (A) and (C) above). All payments to a
Beneficiary from the Trust shall be made in accordance with the
provisions of the applicable Plan. The Trustee shall be fully
protected in making any payment in accordance with the
provisions of this paragraph.
(b) The Trustee shall make or commence payment to the
Beneficiary in accordance with his representations not later
than 30 business days after its receipt thereof; provided,
however, that before the Trustee makes or commences any such
payment and not later than 7 business days after its receipt of
the Beneficiary's representations, the Trustee shall request in
writing the Grantor's agreement that the Beneficiary's
representations are accurate with respect to the amount, fact,
and time of payment to him. The Trustee shall enclose with
such request a copy of the Beneficiary's representations and
written advice to the Grantor that it must respond to the
Trustee's request on or before the 20th business day (which
date shall be set forth in such written advice) after the
Beneficiary furnished such representations to the Trustee. If
the Grantor, in a writing delivered to the Trustee, agrees with
the Beneficiary's representations in all respects, or if the
Grantor does not respond to the Trustee's request by the 20th
day deadline, the Trustee shall make payment in accordance with
the Beneficiary's representations. If the Grantor advises the
Trustee in writing on or before the 20th day deadline that it
does not agree with any or all of the Beneficiary's
representations, the Trustee immediately shall take whatever
steps it in its sole discretion, deems appropriate, including,
but not limited to, a review of any notice furnished by the
Grantor pursuant to paragraph (e) hereof, to attempt to resolve
the difference(s) between the Grantor and the Beneficiary. If,
however, the Trustee is unable to resolve such difference(s) to
its satisfaction within 60 business days after its receipt of
the Beneficiary's representations, the Trustee shall make
payment at such time and in such form and manner as is allowed
under the Plans as of the date first stated above and as the
Trustee, in its sole discretion, selects. The Trustee shall be
fully protected in making or refraining from making any payment
in accordance with the provisions of this paragraph.
(c) Notwithstanding any other provision of the Trust
Agreement to the contrary, the Trustee shall make payments
hereunder before such payments are otherwise due if it
determines, based on a change in the tax or revenue laws of the
United States of America, a published ruling or similar
announcement issued by the Internal Revenue Service, a
regulation issued by the Secretary of the Treasury or his
delegate, or a decision by a court of competent jurisdiction
involving a Beneficiary, or a closing agreement made under Code
Section 7121 that is approved by the Internal Revenue Service
and involves a Beneficiary, that a Beneficiary has recognized
or will recognize income for federal income tax purposes with
respect to amounts that are or will be payable to him under the
Plans before they are paid to him.
(d) Unless (contemporaneously with his submission of the
written instrument referred to in paragraph (a) hereof) a
Beneficiary furnishes documentation in form and substance
satisfactory to the Trustee that no withholding is required
with respect to a payment to be made to him from the Trust, the
Trustee may deduct from any such payment any federal, state or
local taxes required by law to be withheld by the Trustee.
(e) The Trustee shall provide the Grantor with written
confirmation of the fact and time of any commencement of
payments hereunder within 10 business days after any payments
commence to a beneficiary. The Grantor shall notify the
Trustee in the same manner of any payments it commences to make
to a Beneficiary pursuant to the Plans.
(f) The Trustee shall be fully protected in making or
refraining from making any payment or any calculations in
accordance with the provisions of this Section 6.
7. Termination of the Trust and Reversion of Trust Assets.
The Trust shall terminate upon the first to occur of (i) the
payment by the Grantor of all amounts due the Beneficiaries
under each of the Plans and the receipt by the Trustee of a
valid release to that effect from each of the Beneficiaries
with respect to payments made to him, or (ii) the twenty-first
anniversary of the death of the last survivor of the
Beneficiaries who are in being on the date of the execution of
this Trust Agreement. Upon termination of the Trust, any and
all assets remaining in the Trust, after the payment to the
Beneficiaries of all amounts to which they are entitled and
after payment of the expenses and compensation in Sections 10
and 15(i) of this Trust Agreement, shall revert to the Grantor
and the Trustee shall promptly take such action as shall be
necessary to transfer any such assets to the Grantor.
Notwithstanding the above, the Grantor shall be obligated to
take whatever steps are necessary to ensure that the Trust is
not terminated for a period of five (5) years following a
Change in Control as of the date of the execution of this Trust
Agreement, such steps to include, but not being limited to, the
transfer to the Trustee of cash or other assets pursuant to the
provisions of Section 8(a) hereof.
8. Powers of the Trustee. To carry out the purposes of the
Trust and subject to any limitations herein expressed, the
Trustee is vested with the following powers until final
distribution, in addition to any now or hereafter conferred by
law affecting the trust or estate created hereunder. In
exercising such powers, the Trustee shall act in a manner
reasonable and equitable in view of the interests of the
Beneficiaries and in a manner in which persons of ordinary
prudence, diligence, discretion and judgment would act in the
management of their own affairs.
(a) Receive and Retain Property. To receive and retain
any property received at the inception of the Trust or
at any other time, whether or not such property is
unproductive of income or is property in which the
Trustee is personally interested or in which the
Trustee owns an undivided interest in any other trust
capacity.
(b) Dispose of, Develop, and Abandon Assets. To dispose
of an asset, for cash or on credit, at public or
private sale and, in connection with any sale or
disposition, to give such warranties and
indemnifications as the Trustee shall determine; to
manage, develop, improve, exchange, partition, change
the character of or abandon a Trust asset or any
interest therein.
(c) Borrow and Encumber. To borrow money for any Trust
purpose upon such terms and conditions as may be
determined by the Trustee; to obligate the Trust or any
part thereof by mortgage, deed of trust, pledge or
otherwise, for a term within or extending beyond the
term of the Trust.
(d) Lease. To enter for any purpose into a lease as
lessor or lessee, with or without an option to purchase
or renew, for a term.
(e) Grant or Acquire Options. To grant or acquire
options and rights of first refusal involving the sale
or purchase of any Trust assets, including the power to
write covered call options listed on any securities
exchange.
(f) Powers Respecting Securities. To have all the
rights, powers, privileges and responsibilities of an
owner of securities, including, without limiting the
foregoing, the power to vote, to give general or
limited proxies, to pay calls, assessments, and other
sums; to assent to, or to oppose, corporate sales or
other acts; to participate in, or to oppose, any voting
trusts, pooling agreements, foreclosures,
reorganizations, consolidations, mergers and
liquidations, and, in connection therewith, to give
warranties and indemnifications and to deposit
securities with and transfer title to any protective or
other committee; to exchange, exercise or sell stock
subscription or conversion rights; and, regardless of
any limitations elsewhere in this instrument relative
to investments by the Trustee, to accept and retain as
an investment hereunder any securities received through
the exercise of any of the foregoing powers.
(g) Use of Nominee. To hold securities or other
property in the name of the Trustee, in the name of a
nominee of the Trustee, or in the name of a custodian
(or its nominee) selected by the Trustee, with or
without disclosure of the Trust, the Trustee being
responsible for the acts of such custodian or nominee
affecting such property.
(h) Advance Money. To advance money for the protection
of the Trust, and for all expenses, losses and
liabilities sustained or incurred in the administration
of the Trust or because of the holding or ownership of
any Trust assets, for which advances, with interest,
the Trustee has a lien on the Trust assets as against
the Beneficiaries.
(i) Pay, Contest or Settle Claims. To pay, contest or
settle any claim by or against the Trust by compromise,
arbitration or otherwise; to release, in whole or in
part, any claim belonging to the Trust to the extent
that the claim is uncollectible. Notwithstanding the
foregoing, the Trustee may only pay or settle a claim
asserted against the Trust by the Grantor if it is
compelled to do so by a final order of a court of
competent jurisdiction.
(j) Litigate. To prosecute or defend actions, claims or
proceedings for the protection of Trust assets and of
the Trustee in the performance of its duties.
(k) Employ Advisers and Agents. To employ persons,
corporations or associations, including attorneys,
auditors, investment advisers or agents, even if they
are associated with the Trustee, to advise or assist
the Trustee in the performance of its administrative
duties; to act without independent investigation upon
their recommendations.
(l) Use Custodian. If no bank or trust company is
acting as Trustee hereunder, the Trustee shall appoint
a bank or trust company to act as custodian (the
"Custodian") for securities and any other Trust assets.
Any such appointment shall terminate when a bank or
trust company begins to serve as Trustee hereunder.
The Custodian shall keep the deposited property,
collect and receive the income and principal, and hold,
invest, disburse or otherwise dispose of the property
or its proceeds (specifically including selling and
purchasing securities, and delivering securities sold
and receiving securities purchased) upon the order of
the Trustee.
(m) Execute Documents. To execute and deliver all
instruments which will accomplish or facilitate the
exercise of the powers vested in the Trustee.
(n) Grant of Powers Limited. The Trustee is expressly
prohibited from exercising any powers vested in it
primarily for the benefit of the Grantor rather than
for the benefit of the Beneficiaries. The Trustee
shall not have the power to purchase, exchange, or
otherwise deal with or dispose of the assets of the
Trust for less than adequate and full consideration in
money or money's worth.
(o) Deposit Assets. To deposit Trust assets in
commercial, savings or savings and loan accounts
(including such accounts in a corporate Trustee's
banking department) and to keep such portion of the
Trust assets in cash or cash balances as the Trustee
may, from time to time, deem to be in the best
interests of the Trust, without liability for interest
thereon.
9. Resignation of Trustee and Appointment of Successor
Trustee. Each Trustee shall have the right to resign upon 30
days' written notice to the Grantor, during which time the
Grantor shall appoint a "Qualified Successor Trustee." If no
Qualified Successor Trustee accepts such appointment, the
resigning Trustee shall petition a court of competent
jurisdiction for the appointment of a "Qualified Successor
Trustee." For this purpose, a "Qualified Successor Trustee"
may be an individual or a corporation but may not be the
Grantor, any person who would be a "related or subordinate
party" to the Grantor within the meaning of Section 672(c) of
the Code or a corporation that would be a member of an
"affiliated group" of corporations including the Grantor within
the meaning of Section 1504(a) of the Code if the words "80
percent" wherever they appear in that section were replaced by
the words "50 percent." Upon the written acceptance by the
Qualified Successor Trustee of the trust and upon approval of
the resigning Trustee's final account by those entitled
thereto, the resigning Trustee shall be discharged.
10. Trustee Compensation. The Trustee shall be entitled to
receive as compensation for its services hereunder the
compensation (a) as negotiated and agreed to by the Grantor and
the Trustee, or (b) if not negotiated or if the parties are
unable to reach agreement, as allowed a trustee under the laws
of the State of Minnesota in effect at the time such
compensation is payable. Such compensation shall be paid by
the Grantor; provided, however, that to the extent such
compensation is not paid by the Grantor, subject to the
provisions of Section 15(i) hereof, it shall be charged against
and paid from the Trust and the Grantor shall reimburse the
Trust for any such payment made from the Trust within 30 days
of its receipt from the Trustee of written notice of such
payment.
11. Trustee's Consent to Act and Indemnification of the
Trustee. The Trustee hereby grants and consents to act as
Trustee hereunder. The Grantor agrees to indemnify the Trustee
and hold it harmless from and against all claims, liabilities,
legal fees and expenses that may be asserted against it,
otherwise than on account of the Trustee's own negligence or
willful misconduct (as found by a final judgment of a court of
competent jurisdiction) by reason of the Trustee's taking or
refraining from taking any action in connection with the Trust,
whether or not the Trustee is a party to a legal proceeding or
otherwise.
12. Prohibition Against Assignment. No Beneficiary shall
have any preferred claim on, or any beneficial ownership
interest in, any assets of the Trust before such assets are
paid to the Beneficiary as provided in Section 6, and all
rights created under the Trust and the Plans shall be unsecured
contractual rights of the Beneficiary against the Grantor. No
part of, or claim against, the assets of the Trust may be
assigned, anticipated, alienated, encumbered, garnished,
attached or in any other manner disposed of by any of the
Beneficiaries, and no such part or claim shall be subject to
any legal process or claims of creditors of any of the
Beneficiaries.
13. Annual Accounting. The Trustee shall keep accurate and
detailed accounts of all investments, receipts and
disbursements and other transactions hereunder, and, within
ninety days following the close of each calendar year, and
within ninety days after the Trustee's resignation or
termination of the Trust as provided herein, the Trustee shall
render a written account of its administration of the Trust to
the Grantor by submitting a record of receipts, investments,
disbursements, distributions, gains, losses, assets on hand at
the end of the accounting period and other pertinent
information, including a description of all securities and
investments purchased and sold during such calendar year.
Written approval of an account shall, as to all matters shown
in the account, be binding upon the Grantor and shall forever
release and discharge the Trustee from any liability or
accountability. The Grantor will be deemed to have given his
written approval if he does not object in writing to the
Trustee within one hundred and twenty days after the date of
receipt of such account from the Trustee. The Trustee shall be
entitled at any time to institute an action in a court of
competent jurisdiction for a judicial settlement of its
account.
14. Notices. Any notice or instructions required under any
of the provisions of this Trust Agreement shall be deemed
effectively given only if such notice is in writing and is
delivered personally or by certified or registered mail, return
receipt requested and postage prepaid, addressed to the
addresses as set forth below of the parties hereto. The
address of the parties are as follows:
(i) The Grantor:
General Mills, Inc.
Post Office Box 1113
Number One General Mills Boulevard
Minneapolis, MN 55440
Attention: Treasurer
(ii) The Trustee:
Norwest Bank Minnesota, N.A.
6th and Marquette Avenue
Minneapolis, MN 55479-0069
Attention: Administrative Officer
The Grantor or Trustee may at any time change the address to
which notices are to be sent to it by giving written notice
thereof in the manner provided above.
15. Miscellaneous Provisions.
(a) This Trust Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota
applicable to contracts made and to be performed therein and
the Trustee shall not be required to account in any court other
than one of the courts of such state.
(b) All section headings herein have been inserted for
convenience of reference only and shall in no way modify,
restrict or affect the meaning or interpretation of any of the
terms or provisions of this Trust Agreement.
(c) This Trust Agreement is intended as a complete and
exclusive statement of the agreement of the parties hereto,
supersedes all previous agreements or understandings among them
and may not be modified or terminated orally.
(d) The term "Trustee" shall include any successor
Trustee.
(e) If a Trustee or Custodian hereunder is a bank or
trust company, any corporation resulting from any merger,
consolidation or conversion to which such bank or trust company
may be a party, or any corporation otherwise succeeding
generally to all or substantially all of the assets or business
of such bank or trust company, shall be the successor to it as
Trustee or custodian hereunder, as the case may be without the
execution of any instrument or any further action on the part
of any party hereto.
(f) If any provision of this Trust Agreement shall be
invalid and unenforceable, the remaining provisions hereof
shall subsist and be carried into effect.
(g) The Plans are by this reference expressly
incorporated herein and made a part hereof with the same force
and effect as if fully set forth at length. As of the date
first stated above, the terms of the Plans are as set forth in
Exhibit A attached hereto.
(h) The assets of the Trust shall be subject only to the
claims of the Grantor's general creditors in the event of the
Grantor's bankruptcy or insolvency. The Grantor shall be
considered "bankrupt" or "insolvent" if the Grantor is (A)
unable to pay its debts when due or (B) engaged as a debtor in
a proceeding under the Bankruptcy Code, 11 U.S.C. Section 101
et seq. The Board of Directors and the chief executive officer
of the Grantor must notify the Trustee of the Grantor's
bankruptcy or insolvency within three (3) days following the
occurrence of such event. Upon receipt of such a notice, or,
upon receipt of a written allegation from a person or entity
claiming to be a creditor of the Grantor that the Grantor is
bankrupt or insolvent, the Trustee shall discontinue payments
to Beneficiaries. The Trustee shall, as soon as practicable
after receipt of such notice or written allegation, determine
whether the Grantor is bankrupt or insolvent. If the Trustee
determines, based on such notice, written allegation, or such
other information as it deems appropriate, that the Grantor is
bankrupt or insolvent, the Trustee shall hold the assets of the
Trust for the benefit of the Grantor's general creditors, and
deliver any undistributed assets to satisfy the claims of such
creditors as a court of competent jurisdiction may direct. The
Trustee shall resume payments to Beneficiaries only after it
has determined that the Grantor is not bankrupt or insolvent,
is no longer bankrupt or insolvent (if the Trustee determined
that the Grantor was bankrupt or insolvent), pursuant to an
order of a court of competent jurisdiction. Unless the Trustee
has actual knowledge of the Grantor's bankruptcy or insolvency,
the Trustee shall have no duty to inquire whether the Grantor
is bankrupt or insolvent. The Trustee may in all events rely
on such evidence concerning the Grantor's solvency as may be
furnished to the Trustee which will give the Trustee a
reasonable basis for making a determination concerning the
Grantor's solvency.
If the Trustee discontinues payment of benefits from the
Trust pursuant to this Section 15(h) and subsequently resumes
such payments, the first payment following such discontinuance
shall include the aggregate amount of all payments which would
have been made to each Beneficiary (together with interest)
during the period of such discontinuance, less the aggregate
amount of payments made to the Beneficiary by the Grantor in
lieu of the payments provided for hereunder during any such
period of discontinuance.
(i) Any and all taxes, expenses (including, but not
limited to, the Trustee's compensation) and costs of litigation
relating to or concerning the adoption, administration and
termination of the Trust shall be borne and promptly paid by
the Grantor; provided, however, that, to the extent such taxes,
expenses and costs relating to the Trust are due and owing and
(A) are not paid by the Grantor, and (B) do not in the
aggregate exceed $1,000, they shall be charged against and paid
from the Trust, and the Grantor shall reimburse the Trust for
any such payment made from the Trust within 30 days of its
receipt from the Trustee of written notice of such payment.
(j) Any reference hereunder to a Beneficiary shall
expressly be deemed to include, where relevant, the
beneficiaries of a Beneficiary duly appointed under the terms
of the Plans. A Beneficiary shall cease to have such status
once any and all amounts due such Beneficiary under the Plan
have been satisfied.
(k) Any reference hereunder to the Grantor shall
expressly be deemed to include the Grantor's successor and
assigns.
(l) Whenever used herein, and to the extent appropriate,
the masculine, feminine or neuter gender shall include the
other two genders, the singular shall include the plural and
the plural shall include the singular.
IN WITNESS WHEREOF, the parties hereto have executed this
amended and restated TRUST AGREEMENT as of this 26th day of
September, 1988.
GRANTOR:
GENERAL MILLS, INC.
Attest:
_______________________________ By:_________________________
Name: Ivy S. Bernhardson Name: C. L.Whitehill
Title: Assistant Secretary Title: Senior Vice President
TRUSTEE:
NORWEST BANK MINNESOTA, N.A.
Attest:
_______________________________ By:_________________________
Name: _________________________ Name:_______________________
Title: ________________________ Title:______________________
EXHIBIT A
A. Deferred Compensation Plan, Amended and Restated as of
January 1, 1986.
B. Executive Incentive and Estate Building Program, Amended
and Restated as of June 1, 1986.
C. Supplemental Retirement Plan of General Mills,Inc.,
Amended and Restated effective as of January 1, 1986.
D. Supplemental Savings Plan of General Mills, Inc., Amended
and Restated effective as of January 1, 1986.
EXHIBIT 10.14
GENERAL MILLS, INC.
SUPPLEMENTAL BENEFITS TRUST
TRUST AGREEMENT
This TRUST AGREEMENT is made as of September 26, 1988, is
between General Mills, Inc. (the "Grantor") and Norwest Bank
Minnesota, N.A. (the "Trustee").
1. Purpose. The purpose of this trust (the "Trust") is
to provide a vehicle to (a) hold assets of the Grantor as a
reserve for the discharge of the Grantor's obligations to
certain individuals (the "Beneficiaries") entitled to receive
benefits under the General Mills, Inc. Compensation Plan for Non-
Employee Directors and the General Mills, Inc. Retirement Plan
for Non-Employee Directors and any other plan of deferred
compensation that the Grantor so designates in writing to the
Trustee (the "Plans"), and (b) invest, reinvest, disburse and
distribute those assets and the earnings thereon as provided
hereunder and in the Plans.
2. Trust Corpus. The Grantor hereby transfers to the
Trustee and the Trustee hereby accepts and agrees to hold, in
trust, the sum of Ten Dollars ($10.00) plus such cash and/or
property, if any, transferred to the Trustee by the Grantor or
on behalf of the Grantor pursuant to obligations incurred under
any or all of the Plans and the earnings thereon, and such cash
and/or property, together with the earnings thereon and together
with any other cash or property received by the Trustee pursuant
to Section 8(a) of this Trust Agreement, shall constitute the
trust estate and shall be held, managed and distributed as
hereinafter provided. The Grantor shall execute any and all
instruments necessary to vest the Trustee with full title to the
property hereby transferred.
3. Grantor Trust. The Trust is intended to be a trust of
which the Grantor is treated as the owner for federal income tax
purposes in accordance with the provisions of Sections 671
through 679 of the Internal Revenue Code of 1986, as amended
(the "Code"). If the Trustee, in its sole discretion, deems it
necessary or advisable for the Grantor and/or the Trustee to
undertake or refrain from undertaking any actions (including,
but not limited to, making or refraining from making any
elections or filings) in order to ensure that the Grantor is at
all times treated as the owner of the Trust for federal income
tax purposes, the Grantor and/or the Trustee will undertake or
refrain from undertaking (as the case may be) such actions. The
Grantor hereby irrevocably authorizes the Trustee to be its
attorney-in-fact for the purpose of performing any act which the
Trustee, in its sole discretion, deems necessary or advisable in
order to accomplish the purposes and the intent of this Section
3. The Trustee shall be fully protected in acting or refraining
from acting in accordance with the provisions of this Section 3.
4. Irrevocability of Trust. The Trust shall be irrevocable
and may not be altered or amended in any substantive respect, or
revoked or terminated by the Grantor in whole or in part,
without the express written consent of a majority of the
Beneficiaries of the Trust; provided, however, that the Trust
may be amended, as may be necessary either (i) to obtain a
favorable ruling from the Internal Revenue Service with respect
to the tax consequences of the establishment and settlement of
the Trust, or (ii) to make nonsubstantive changes, which have no
effect upon the amount of any Beneficiary's benefits, the time
of receipt of benefits, the identity of any recipient of
benefits, or the reversion of any assets to the Grantor prior to
the Trustee's satisfaction of all the Trustee's obligations
hereunder; provided, further, that in the event of a "Change of
Control" as defined in Section 2.2 of the General Mills, Inc.
Retirement Plan for Non-Employee Directors (hereinafter referred
to as a "Change in Control"), the Trust may not be altered or
amended in any substantive respect, or revoked or terminated by
the Grantor's successor unless a majority of the Beneficiaries,
determined as of the day before such Change in Control, agree in
writing to such an alteration, amendment, revocation or
termination.
5. Investment of Trust Assets.
(a) Subject to the provisions of paragraph (b) below,
until the Trustee has distributed all of the assets of the Trust
in accordance with the terms hereof, the Trustee shall invest
and reinvest such assets (without regard to any state law
limiting the investment powers of fiduciaries) in such
securities and other property as the Trustee deems advisable,
considering the probable income (including capital appreciation
potential) from any such investment, the probable safety of the
assets of the Trust and, where appropriate, the rate of return
at which the assets would have been invested on behalf of each
Beneficiary under any applicable qualified defined contribution
plan maintained by the Grantor. Within the limitations of the
foregoing, the Trustee is specifically authorized to acquire,
for cash or on credit, every kind of property, real, personal or
mixed, and to make every kind of investment, specifically
including, but not limited to, corporate and governmental
obligations of every kind, preferred or common stocks,
securities of any regulated investment company or trust,
interests in common trust funds now or hereafter established by
a corporate trustee, and property in which the Trustee owns an
undivided interest in any other trust capacity. The Trustee is
expressly authorized and empowered to purchase such insurance in
its own name (and with itself as the beneficiary) as it shall
determine to be necessary or advisable to advance best the
purposes of the Trust and the interests of the Beneficiaries.
(b) The Trustee shall invest and reinvest the assets of
the Trust in accordance with such investment objectives,
guidelines, restrictions or directions as the Grantor may
furnish to the Trustee at the time of the execution of the Trust
or at any later date; provided, however, that if there is a
Change in Control the Trust's investment objectives, guidelines,
restrictions or directions may not be changed by the Grantor's
successor unless a majority of the Beneficiaries, determined as
of the day before such Change in Control, agree, in writing, to
such a change.
6. Distribution of Trust Assets.
(a) Subject to the provisions of paragraph (b) below, at
such time as a Beneficiary is entitled to a payment under any of
the Plans, he shall be entitled to receive from the Trust (i) an
amount in cash equal to the amount to which he is entitled under
the Plan or Plans at such time, less (ii) any payments
previously made to him by the Grantor with respect to such
amount pursuant to the terms of the Plans. The commencement of
payments from the Trust shall be conditioned on the Trustee's
prior receipt of a written instrument from the Beneficiary in a
form satisfactory to the Trustee containing representations as
to (A) the amount to which the Beneficiary is entitled under the
Plans, (B) the fact that he has requested the payment of such
amount from the Grantor pursuant to the terms of the Plans, (C)
the amount, if any, he has received from the Grantor under the
Plans with respect to such amount, and (D) the amount to be paid
him by the Trust (i.e., the difference between (A) and (C)
above). All payments to a Beneficiary from the Trust shall be
made in accordance with the provisions of the applicable Plan.
The Trustee shall be fully protected in making any payment in
accordance with the provisions of this paragraph.
(b) The Trustee shall make or commence payment to the
Beneficiary in accordance with his representations not later
than 30 business days after its receipt thereof; provided,
however, that before the Trustee makes or commences any such
payment and not later than 7 business days after its receipt of
the Beneficiary's representations, the Trustee shall request in
writing the Grantor's agreement that the Beneficiary's
representations are accurate with respect to the amount, fact,
and time of payment to him. The Trustee shall enclose with such
request a copy of the Beneficiary's representations and written
advice to the Grantor that it must respond to the Trustee's
request on or before the 20th business day (which date shall be
set forth in such written advice) after the Beneficiary
furnished such representations to the Trustee. If the Grantor,
in a writing delivered to the Trustee, agrees with the
Beneficiary's representations in all respects, or if the Grantor
does not respond to the Trustee's request by the 20th day
deadline, the Trustee shall make payment in accordance with the
Beneficiary's representations. If the Grantor advises the
Trustee in writing on or before the 20th day deadline that it
does not agree with any or all of the Beneficiary's
representations, the Trustee immediately shall take whatever
steps it in its sole discretion, deems appropriate, including,
but not limited to, a review of any notice furnished by the
Grantor pursuant to paragraph (e) hereof, to attempt to resolve
the difference(s) between the Grantor and the Beneficiary. If,
however, the Trustee is unable to resolve such difference(s) to
its satisfaction within 60 business days after its receipt of
the Beneficiary's representations, the Trustee shall make
payment at such time and in such form and manner as is allowed
under the Plans as of the date first stated above and as the
Trustee, in its sole discretion, selects. The Trustee shall be
fully protected in making or refraining from making any payment
in accordance with the provisions of this paragraph.
(c) Notwithstanding any other provision of the Trust
Agreement to the contrary, the Trustee shall make payments
hereunder before such payments are otherwise due if it
determines, based on a change in the tax or revenue laws of the
United States of America, a published ruling or similar
announcement issued by the Internal Revenue Service, a
regulation issued by the Secretary of the Treasury or his
delegate, or a decision by a court of competent jurisdiction
involving a Beneficiary, or a closing agreement made under Code
Section 7121 that is approved by the Internal Revenue Service
and involves a Beneficiary, that a Beneficiary has recognized or
will recognize income for federal income tax purposes with
respect to amounts that are or will be payable to him under the
Plans before they are paid to him.
(d) Unless (contemporaneously with his submission of the
written instrument referred to in paragraph (a) hereof) a
Beneficiary furnishes documentation in form and substance
satisfactory to the Trustee that no withholding is required with
respect to a payment to be made to him from the Trust, the
Trustee may deduct from any such payment any federal, state or
local taxes required by law to be withheld by the Trustee.
(e) The Trustee shall provide the Grantor with written
confirmation of the fact and time of any commencement of
payments hereunder within 10 business days after any payments
commence to a beneficiary. The Grantor shall notify the Trustee
in the same manner of any payments it commences to make to a
Beneficiary pursuant to the Plans.
(f) The Trustee shall be fully protected in making or
refraining from making any payment or any calculations in
accordance with the provisions of this Section 6.
7. Termination of the Trust and Reversion of Trust Assets.
The Trust shall terminate upon the first to occur of (i) the
payment by the Grantor of all amounts due the Beneficiaries
under each of the Plans and the receipt by the Trustee of a
valid release to that effect from each of the Beneficiaries with
respect to payments made to him, or (ii) the twenty-first
anniversary of the death of the last survivor of the
Beneficiaries who are in being on the date of the execution of
this Trust Agreement. Upon termination of the Trust, any and
all assets remaining in the Trust, after the payment to the
Beneficiaries of all amounts to which they are entitled and
after payment of the expenses and compensation in Sections 10
and 15(i) of this Trust Agreement, shall revert to the Grantor
and the Trustee shall promptly take such action as shall be
necessary to transfer any such assets to the Grantor.
Notwithstanding the above, the Grantor shall be obligated to
take whatever steps are necessary to ensure that the Trust is
not terminated for a period of five (5) years following a Change
in Control as of the date of the execution of this Trust
Agreement, such steps to include, but not being limited to, the
transfer to the Trustee of cash or other assets pursuant to the
provisions of Section 8(a) hereof.
8. Powers of the Trustee. To carry out the purposes of the
Trust and subject to any limitations herein expressed, the
Trustee is vested with the following powers until final
distribution, in addition to any now or hereafter conferred by
law affecting the trust or estate created hereunder. In
exercising such powers, the Trustee shall act in a manner
reasonable and equitable in view of the interests of the
Beneficiaries and in a manner in which persons of ordinary
prudence, diligence, discretion and judgment would act in the
management of their own affairs.
(a) Receive and Retain Property. To receive and retain
any property received at the inception of the Trust or
at any other time, whether or not such property is
unproductive of income or is property in which the
Trustee is personally interested or in which the Trustee
owns an undivided interest in any other trust capacity.
(b) Dispose of, Develop, and Abandon Assets. To dispose
of an asset, for cash or on credit, at public or private
sale and, in connection with any sale or disposition, to
give such warranties and indemnifications as the Trustee
shall determine; to manage, develop, improve, exchange,
partition, change the character of or abandon a Trust
asset or any interest therein.
(c) Borrow and Encumber. To borrow money for any Trust
purpose upon such terms and conditions as may be
determined by the Trustee; to obligate the Trust or any
part thereof by mortgage, deed of trust, pledge or
otherwise, for a term within or extending beyond the
term of the Trust.
(d) Lease. To enter for any purpose into a lease as
lessor or lessee, with or without an option to purchase
or renew, for a term.
(e) Grant or Acquire Options. To grant or acquire
options and rights of first refusal involving the sale
or purchase of any Trust assets, including the power to
write covered call options listed on any securities
exchange.
(f) Powers Respecting Securities. To have all the
rights, powers, privileges and responsibilities of an
owner of securities, including, without limiting the
foregoing, the power to vote, to give general or limited
proxies, to pay calls, assessments, and other sums; to
assent to, or to oppose, corporate sales or other acts;
to participate in, or to oppose, any voting trusts,
pooling agreements, foreclosures, reorganizations,
consolidations, mergers and liquidations, and, in
connection therewith, to give warranties and
indemnifications and to deposit securities with and
transfer title to any protective or other committee; to
exchange, exercise or sell stock subscription or
conversion rights; and, regardless of any limitations
elsewhere in this instrument relative to investments by
the Trustee, to accept and retain as an investment
hereunder any securities received through the exercise
of any of the foregoing powers.
(g) Use of Nominee. To hold securities or other property
in the name of the Trustee, in the name of a nominee of
the Trustee, or in the name of a custodian (or its
nominee) selected by the Trustee, with or without
disclosure of the Trust, the Trustee being responsible
for the acts of such custodian or nominee affecting such
property.
(h) Advance Money. To advance money for the protection
of the Trust, and for all expenses, losses and
liabilities sustained or incurred in the administration
of the Trust or because of the holding or ownership of
any Trust assets, for which advances, with interest, the
Trustee has a lien on the Trust assets as against the
Beneficiaries.
(i) Pay, Contest or Settle Claims. To pay, contest or
settle any claim by or against the Trust by compromise,
arbitration or otherwise; to release, in whole or in
part, any claim belonging to the Trust to the extent
that the claim is uncollectible. Notwithstanding the
foregoing, the Trustee may only pay or settle a claim
asserted against the Trust by the Grantor if it is
compelled to do so by a final order of a court of
competent jurisdiction.
(j) Litigate. To prosecute or defend actions, claims or
proceedings for the protection of Trust assets and of
the Trustee in the performance of its duties.
(k) Employ Advisers and Agents. To employ persons,
corporations or associations, including attorneys,
auditors, investment advisers or agents, even if they
are associated with the Trustee, to advise or assist the
Trustee in the performance of its administrative duties;
to act without independent investigation upon their
recommendations.
(l) Use Custodian. If no bank or trust company is acting
as Trustee hereunder, the Trustee shall appoint a bank
or trust company to act as custodian (the "Custodian")
for securities and any other Trust assets. Any such
appointment shall terminate when a bank or trust company
begins to serve as Trustee hereunder. The Custodian
shall keep the deposited property, collect and receive
the income and principal, and hold, invest, disburse or
otherwise dispose of the property or its proceeds
(specifically including selling and purchasing
securities, and delivering securities sold and receiving
securities purchased) upon the order of the Trustee.
(m) Execute Documents. To execute and deliver all
instruments which will accomplish or facilitate the
exercise of the powers vested in the Trustee.
(n) Grant of Powers Limited. The Trustee is expressly
prohibited from exercising any powers vested in it
primarily for the benefit of the Grantor rather than for
the benefit of the Beneficiaries. The Trustee shall not
have the power to purchase, exchange, or otherwise deal
with or dispose of the assets of the Trust for less than
adequate and full consideration in money or money's
worth.
(o) Deposit Assets. To deposit Trust assets in
commercial, savings or savings and loan accounts
(including such accounts in a corporate Trustee's
banking department) and to keep such portion of the
Trust assets in cash or cash balances as the Trustee
may, from time to time, deem to be in the best interests
of the Trust, without liability for interest thereon.
9. Resignation of Trustee and Appointment of Successor
Trustee. Each Trustee shall have the right to resign upon 30
days' written notice to the Grantor, during which time the
Grantor shall appoint a "Qualified Successor Trustee." If no
Qualified Successor Trustee accepts such appointment, the
resigning Trustee shall petition a court of competent
jurisdiction for the appointment of a "Qualified Successor
Trustee." For this purpose, a "Qualified Successor Trustee" may
be an individual or a corporation but may not be the Grantor,
any person who would be a "related or subordinate party" to the
Grantor within the meaning of Section 672(c) of the Code or a
corporation that would be a member of an "affiliated group" of
corporations including the Grantor within the meaning of Section
1504(a) of the Code if the words "80 percent" wherever they
appear in that section were replaced by the words "50 percent."
Upon the written acceptance by the Qualified Successor Trustee
of the trust and upon approval of the resigning Trustee's final
account by those entitled thereto, the resigning Trustee shall
be discharged.
10. Trustee Compensation. The Trustee shall be entitled to
receive as compensation for its services hereunder the
compensation (a) as negotiated and agreed to by the Grantor and
the Trustee, or (b) if not negotiated or if the parties are
unable to reach agreement, as allowed a trustee under the laws
of the State of Minnesota in effect at the time such
compensation is payable. Such compensation shall be paid by the
Grantor; provided, however, that to the extent such compensation
is not paid by the Grantor, subject to the provisions of Section
15(i) hereof, it shall be charged against and paid from the
Trust and the Grantor shall reimburse the Trust for any such
payment made from the Trust within 30 days of its receipt from
the Trustee of written notice of such payment.
11. Trustee's Consent to Act and Indemnification of the
Trustee. The Trustee hereby grants and consents to act as
Trustee hereunder. The Grantor agrees to indemnify the Trustee
and hold it harmless from and against all claims, liabilities,
legal fees and expenses that may be asserted against it,
otherwise than on account of the Trustee's own negligence or
willful misconduct (as found by a final judgment of a court of
competent jurisdiction) by reason of the Trustee's taking or
refraining from taking any action in connection with the Trust,
whether or not the Trustee is a party to a legal proceeding or
otherwise.
12. Prohibition Against Assignment. No Beneficiary shall
have any preferred claim on, or any beneficial ownership
interest in, any assets of the Trust before such assets are paid
to the Beneficiary as provided in Section 6, and all rights
created under the Trust and the Plans shall be unsecured
contractual rights of the Beneficiary against the Grantor. No
part of, or claim against, the assets of the Trust may be
assigned, anticipated, alienated, encumbered, garnished,
attached or in any other manner disposed of by any of the
Beneficiaries, and no such part or claim shall be subject to any
legal process or claims of creditors of any of the
Beneficiaries.
13. Annual Accounting. The Trustee shall keep accurate and
detailed accounts of all investments, receipts and disbursements
and other transactions hereunder, and, within ninety days
following the close of each calendar year, and within ninety
days after the Trustee's resignation or termination of the Trust
as provided herein, the Trustee shall render a written account
of its administration of the Trust to the Grantor by submitting
a record of receipts, investments, disbursements, distributions,
gains, losses, assets on hand at the end of the accounting
period and other pertinent information, including a description
of all securities and investments purchased and sold during such
calendar year. Written approval of an account shall, as to all
matters shown in the account, be binding upon the Grantor and
shall forever release and discharge the Trustee from any
liability or accountability. The Grantor will be deemed to
have given his written approval if he does not object in writing
to the Trustee within one hundred and twenty days after the date
of receipt of such account from the Trustee. The Trustee shall
be entitled at any time to institute an action in a court of
competent jurisdiction for a judicial settlement of its account.
14. Notices. Any notice or instructions required under any
of the provisions of this Trust Agreement shall be deemed
effectively given only if such notice is in writing and is
delivered personally or by certified or registered mail, return
receipt requested and postage prepaid, addressed to the
addresses as set forth below of the parties hereto. The address
of the parties are as follows:
(i) The Grantor:
General Mills, Inc.
Post Office Box 1113
Number One General Mills Boulevard
Minneapolis, MN 55440
Attention: Treasurer
(ii) The Trustee:
Norwest Bank Minnesota, N.A.
6th and Marquette Avenue
Minneapolis, MN 55479-0069
Attention: Administrative Officer
The Grantor or Trustee may at any time change the address to
which notices are to be sent to it by giving written notice
thereof in the manner provided above.
15. Miscellaneous Provisions.
(a) This Trust Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota
applicable to contracts made and to be performed therein and the
Trustee shall not be required to account in any court other than
one of the courts of such state.
(b) All section headings herein have been inserted for
convenience of reference only and shall in no way modify,
restrict or affect the meaning or interpretation of any of the
terms or provisions of this Trust Agreement.
(c) This Trust Agreement is intended as a complete and
exclusive statement of the agreement of the parties hereto,
supersedes all previous agreements or understandings among them
and may not be modified or terminated orally.
(d) The term "Trustee" shall include any successor
Trustee.
(e) If a Trustee or Custodian hereunder is a bank or
trust company, any corporation resulting from any merger,
consolidation or conversion to which such bank or trust company
may be a party, or any corporation otherwise succeeding
generally to all or substantially all of the assets or business
of such bank or trust company, shall be the successor to it as
Trustee or custodian hereunder, as the case may be without the
execution of any instrument or any further action on the part of
any party hereto.
(f) If any provision of this Trust Agreement shall be
invalid and unenforceable, the remaining provisions hereof shall
subsist and be carried into effect.
(g) The Plans are by this reference expressly
incorporated herein and made a part hereof with the same force
and effect as if fully set forth at length. As of the date
first stated above, the terms of the Plans are as set forth in
Exhibit A attached hereto.
(h) The assets of the Trust shall be subject only to the
claims of the Grantor's general creditors in the event of the
Grantor's bankruptcy or insolvency. The Grantor shall be
considered "bankrupt" or "insolvent" if the Grantor is (A)
unable to pay its debts when due or (B) engaged as a debtor in a
proceeding under the Bankruptcy Code, 11 U.S.C. Section 101 et
seq. The Board of Directors and the chief executive officer of
the Grantor must notify the Trustee of the Grantor's bankruptcy
or insolvency within three (3) days following the occurrence of
such event. Upon receipt of such a notice, or, upon receipt of
a written allegation from a person or entity claiming to be a
creditor of the Grantor that the Grantor is bankrupt or
insolvent, the Trustee shall discontinue payments to
Beneficiaries. The Trustee shall, as soon as practicable after
receipt of such notice or written allegation, determine whether
the Grantor is bankrupt or insolvent. If the Trustee
determines, based on such notice, written allegation, or such
other information as it deems appropriate, that the Grantor is
bankrupt or insolvent, the Trustee shall hold the assets of the
Trust for the benefit of the Grantor's general creditors, and
deliver any undistributed assets to satisfy the claims of such
creditors as a court of competent jurisdiction may direct. The
Trustee shall resume payments to Beneficiaries only after it has
determined that the Grantor is not bankrupt or insolvent, is no
longer bankrupt or insolvent (if the Trustee determined that the
Grantor was bankrupt or insolvent), pursuant to an order of a
court of competent jurisdiction. Unless the Trustee has actual
knowledge of the Grantor's bankruptcy or insolvency, the Trustee
shall have no duty to inquire whether the Grantor is bankrupt or
insolvent. The Trustee may in all events rely on such evidence
concerning the Grantor's solvency as may be furnished to the
Trustee which will give the Trustee a reasonable basis for
making a determination concerning the Grantor's solvency.
If the Trustee discontinues payment of benefits from the
Trust pursuant to this Section 15(h) and subsequently resumes
such payments, the first payment following such discontinuance
shall include the aggregate amount of all payments which would
have been made to each Beneficiary (together with interest)
during the period of such discontinuance, less the aggregate
amount of payments made to the Beneficiary by the Grantor in
lieu of the payments provided for hereunder during any such
period of discontinuance.
(i) Any and all taxes, expenses (including, but not
limited to, the Trustee's compensation) and costs of litigation
relating to or concerning the adoption, administration and
termination of the Trust shall be borne and promptly paid by the
Grantor; provided, however, that, to the extent such taxes,
expenses and costs relating to the Trust are due and owing and
(A) are not paid by the Grantor, and (B) do not in the aggregate
exceed $1,000, they shall be charged against and paid from the
Trust, and the Grantor shall reimburse the Trust for any such
payment made from the Trust within 30 days of its receipt from
the Trustee of written notice of such payment.
(j) Any reference hereunder to a Beneficiary shall
expressly be deemed to include, where relevant, the
beneficiaries of a Beneficiary duly appointed under the terms of
the Plans. A Beneficiary shall cease to have such status once
any and all amounts due such Beneficiary under the Plan have
been satisfied.
(k) Any reference hereunder to the Grantor shall
expressly be deemed to include the Grantor's successor and
assigns.
(l) Whenever used herein, and to the extent appropriate,
the masculine, feminine or neuter gender shall include the other
two genders, the singular shall include the plural and the
plural shall include the singular.
IN WITNESS WHEREOF, the parties hereto have executed this
TRUST AGREEMENT as of this 26th day of September, 1988.
GRANTOR:
GENERAL MILLS, INC.
Attest:
_______________________________ By: _________________________
Name: Ivy S. Bernhardson Name: C. L. Whitehill
Title: Assistant Secretary Title: Senior Vice President
TRUSTEE:
NORWEST BANK MINNESOTA, N.A.
Attest:
_______________________________ By: _________________________
Name: _________________________ Name: _______________________
Title: ________________________ Title: ______________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended May 29, 1994
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from .............. to .............
Commission File Number 1-1185
GENERAL MILLS, INC.
(Exact name of registrant as specified in its charter)
Delaware 41-0274440
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Number One General Mills Boulevard
Minneapolis, MN 55426
(Mail: P.O. Box 1113) (Mail: 55440)
(Address of principal executive offices) (Zip Code)
(612) 540-2311
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, $.10 par value New York Stock Exchange
Midwest Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 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
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of Registrant's knowledge,
in definitive proxy or information statements incorporated by
Reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Aggregate market value of Common Stock held by non-
affiliates of the Registrant, based on the closing price of
$50.375 per share as reported on the New York Stock Exchange on
July 22, 1994: $7,947.9 million.
Number of shares of Common Stock outstanding as of July 22,
1994: 157,775,569 (excluding 46,377,763 shares held in the
treasury).
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Registrant's Proxy Statement dated August 19, 1994
are incorporated by reference into Part III, and portions of
Registrant's 1994 Annual Report to Stockholders
are incorporated by reference into Parts I, II and IV.
PART I
ITEM 1. BUSINESS.
General Mills, Inc. was incorporated in Delaware in 1928.
The Company currently markets consumer goods and services in
two principal business areas: Consumer Foods and
Restaurants. The terms "General Mills," "Company" and
"Registrant" mean General Mills, Inc. and its subsidiaries
unless the context indicates otherwise.
CONSUMER FOODS
The Company is a leading producer of packaged consumer
foods, including those in the categories set forth below.
Breakfast Products. General Mills produces and sells a
number of ready-to-eat cereals, including such brands as:
CHEERIOS, HONEY NUT CHEERIOS, APPLE CINNAMON CHEERIOS, MULTI-
GRAIN CHEERIOS, WHEATIES, WHEATIES HONEY GOLD, LUCKY CHARMS,
CORN TOTAL, WHEAT TOTAL, TRIX, GOLDEN GRAHAMS, KIX, BERRY
BERRY KIX, FIBER ONE, COCOA PUFFS, CRISPY WHEATS 'N RAISINS,
CINNAMON TOAST CRUNCH, CLUSTERS, RAISIN NUT BRAN, TOTAL
RAISIN BRAN, OATMEAL CRISP, TRIPLES, BASIC 4 and RIPPLE
CRISP. In fiscal 1994, the Company introduced SPRINKLE
SPANGLES, HIDDEN TREASURES and REESE'S PEANUT BUTTER PUFFS.
Desserts and Baking Mixes. General Mills makes and
sells a line of dessert mixes under the BETTY CROCKER
trademark, including Supermoist layer cakes, CREAMY DELUXE
ready-to-spread frosting, SUPREME BROWNIE MIX, SUPREME
DESSERT BARS, muffin mixes and two new lines, CREAMY CHILLED
DESSERTS and EASY DELICIOUS DESSERTS. The Company markets a
variety of baking mixes under the BISQUICK trademark and
sells pouch mixes under the names GOLD MEDAL and ROBIN HOOD.
Convenience Foods. General Mills manufactures a line of
BETTY CROCKER dry packaged dinner mixes under the HAMBURGER
HELPER, TUNA HELPER, and SKILLET CHICKEN HELPER trademarks.
Also under the BETTY CROCKER trademark, the Company sells
POTATO BUDS instant mashed potatoes, POTATO SHAKERS
flavorings and other potato and pasta specialty mixes, such
as SUDDENLY SALAD and BETTY CROCKER au gratin and scalloped
potatoes. The Company also sells BAC*O'S garnish and salad
topping.
Family Flour, Bakery Flour and Ingredients. General
Mills produces family flour under the GOLD MEDAL brand,
introduced in 1880, and regional brands such as LA PINA,
ROBIN HOOD and RED BAND. The Company also engages in grain
merchandising, produces ingredient flour for internal
requirements and sells flour to bakery, foodservice and
manufacturing markets.
Snack Products and Beverages. General Mills markets POP
SECRET microwave popcorn; a line of grain snacks including
NATURE VALLEY GRANOLA BARS, DUNKAROOS, FUNDAMIDDLES and a
new lowfat chewy granola bar; a line of fruit snacks
including FRUIT ROLL-UPS, FRUIT BY THE FOOT, GUSHERS, SHARK
BITES, BUGS BUNNY and TASMANIAN DEVIL; and a line of savory
snacks including BUGLES and new CHEERIOS snack mix and POP
SECRET POP CHIPS. The Company also produces and sells a
line of single-serving fruit juice drinks marketed under the
SQUEEZIT trademark and introduced SQUEEZIT 100, a 100% juice
beverage in fiscal 1994.
International Food Operations. General Mills Canada,
Inc. manufactures and sells food products in Canada,
including BIG G ready-to-eat cereals, BETTY CROCKER baking
and packaged dinner mixes and snacks and a variety of frozen
seafood entrees under the BLUE WATER brand name. The
Company also has interests in companies engaged primarily in
flour milling operations in Latin America, licenses food
products for manufacture in Europe and the Asia/Pacific
region, and exports flour and packaged products throughout
the world.
Cereal Partners Worldwide ("CPW"), the Company's joint
venture with Nestle, S.A. through various entities,
initiated marketing activities in Belgium, Austria,
Switzerland, Greece and Chile during fiscal 1994, and
continues to market breakfast cereals in France, Spain,
Portugal, Italy, Ireland, the United Kingdom, Mexico,
Germany, the Phillipines, Malaysia, Thailand and Singapore.
The following products under the umbrella NESTLE trademark
were introduced into selected markets in fiscal 1994: TRIO,
CLUSTERS, NESQUICK, MULTI-CHEERIOS, HONEY NUT CHEERIOS,
GOLDEN GRAHAMS, CINI MINIS, CHOCAPIC and TRIX. The Company
has a 50% equity interest in CPW. See Note Four to
Consolidated Financial Statements appearing on page 25 of
the Company's 1994 Annual Report to Stockholders,
incorporated herein by reference.
Snack Ventures Europe ("SVE"), the Company's joint venture
with PepsiCo, Inc., manufactures and sells snack foods in
Holland, France, Belgium, Spain, Portugal and Greece, and
late in fiscal 1994 entered the Italian market. The Company
has a 40.5% equity interest in SVE. See Note Four to
Consolidated Financial Statements appearing on page 25 of
the Company's 1994 Annual Report to Stockholders,
incorporated herein by reference.
Other. The Gorton's division sells a variety of seafood
entrees and other products, mostly in frozen and canned
form, under the GORTON'S brand name. The Gorton's division
also markets institutional seafood and supplies frozen fish
portions, breadings and coatings to the food service trade.
Yoplait USA manufactures and sells a line of yogurt,
including YOPLAIT ORIGINAL, YOPLAIT LIGHT, CUSTARD STYLE,
LIGHT CUSTARD STYLE, FAT FREE FRUIT ON THE BOTTOM, TRIX, a
layered yogurt for children, YOPLAIT CRUNCH 'N YOGURT, a
lowfat yogurt with an overcap of crunchy toppings and CRUNCH
'N YOGURT LIGHT, a new addition to the Yoplait line.
Yoplait USA also markets soft frozen yogurt in food service
channels and hardpack frozen yogurt and novelties under a
licensing arrangement. The Colombo yogurt business was
acquired in December 1993 and manufactures and sells a
variety of refrigerated cup yogurt, soft frozen yogurt, and
superpremium hardpack frozen yogurt products under the
COLOMBO brand name.
The Foodservice division markets General Mills branded
baking mixes, cereals and snacks to the commercial and non-
commercial sectors, including airlines, schools, restaurants
and food management companies.
General Mills markets its packaged food products primarily
through its own sales organizations, supported by
advertising and other promotional activities. Such products
are primarily distributed directly to retail food chains, co-
operatives, membership stores and wholesalers. Certain food
products, such as seafood and some food service products,
are sold through distributors and brokers.
The Company's Consumer Foods business segment is highly
competitive, with numerous competitors of varying sizes.
The principal methods of competition include product
quality, advertising, promotion and price. In most of its
consumer foods lines, General Mills competes not only with
other widely advertised branded products, but also with
generic products and private label products, which are
generally distributed at lower prices. The Company is a
major manufacturer of consumer food products in the United
States.
RESTAURANTS
The Company operates RED LOBSTER full-service seafood
restaurants in the United States and Canada and is engaged
in a partnership in Japan operating RED LOBSTER restaurants.
The Company also operates THE OLIVE GARDEN full-service
Italian restaurants in the United States and Canada, and has
started national expansion of CHINA COAST, its full-service
Chinese restaurant concept.
The Company's Restaurant businesses operate in the highly
competitive casual dining segment, with numerous competitors
of varying sizes, and compete on the basis of value and
service. Restaurant businesses rely on the varied tastes,
discretionary decisions and available disposable income of
individual consumers. The Company's RED LOBSTER and THE
OLIVE GARDEN restaurants are market share leaders in the
United States.
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Company, together with their
ages and business experience, are set forth below.
H.B. Atwater, Jr., age 63, is Chairman of the Board and
Chief Executive Officer, and has been a director since 1971.
Mr. Atwater joined the Company in 1958 and was elected an
Executive Vice President in 1970, Chief Operating Officer in
1976, Chief Executive Officer in 1981 and Chairman of the
Board in 1982.
Dean Belbas, age 62, is Vice President and Director of
Investor Relations. Mr. Belbas joined General Mills in
1956, was elected a Vice President in 1977 and was elected
to his present position in 1979.
Edward K. Bixby, age 58, is Senior Vice President;
President, Consumer Foods Sales, with additional
responsibility for Foodservice. Mr. Bixby joined the
Company in 1958 and served as General Manager of several
Consumer Foods divisions. Mr. Bixby was elected Senior Vice
President, General Manager, Grocery Products Sales Division
in 1987, and was named to his present position in 1989.
Michael E. Cushmore, age 54, is Senior Vice President;
President, Gold Medal. Mr. Cushmore joined the Company in
1966 and was named Vice President, General Manager for the
Northstar Division in 1983, Chairman of Leeann Chin's, Inc.,
a former subsidiary of General Mills Restaurants, Inc., in
1985, Vice President, General Manager for the Betty Crocker
Division in 1987 and was elected to his present position in
1993.
Stephen R. Demeritt, age 50, is Senior Vice President of
General Mills and Chief Executive Officer of CPW, S.A., a
joint venture of General Mills and Nestle, S.A. Mr.
Demeritt joined the Company in 1969 and was named a
Marketing Director in the Big G Division in 1976, appointed
a Vice President of the Company in 1983, named President of
General Mills Canada, Inc. in 1986 and elected Senior Vice
President of General Mills in 1992. He was named to his
present position with CPW, S.A. in 1993.
Walter W. Faster, age 60, is Vice President and Director
of Corporate Growth and Development. Mr. Faster joined the
Company in 1963 and was elected Vice President and Director
of Corporate Growth and Development in 1982.
Jon L. Finley, age 40, is Senior Vice President;
President, China Coast. Mr. Finley joined the Company in
1983 and was named President, Yoplait USA in 1991, appointed
a Vice President of the Company in 1991, named President of
China Coast in 1992 and was elected to his present position
in 1994.
Leslie M. Frecon, age 41, is Senior Vice President,
Corporate Finance. Ms. Frecon joined the Company in 1981 as
Manager of Acquisitions and was named Director of
Acquisitions in 1983, Controller of Foodservice in 1989 and
Controller of Sperry in 1991. She was named a Vice
President of the Company in 1991 and was elected to her
present position in 1993.
Charles W. Gaillard, age 53, is Vice Chairman, with
overall responsibility for Big G, Consumer Foods Sales and
Yoplait. Mr. Gaillard was elected a director in 1993. Mr.
Gaillard joined the Company in 1966, became General Manager
of the Golden Valley Division and was appointed a Vice
President in 1977. He was appointed General Manager of the
Big G Division in 1979, was elected a Senior Vice President
in 1985, was named Senior Vice President, International
Foods in 1988 and was elected Executive Vice President and
President and Chief Executive Officer of CPW, S.A. in 1989.
He was elected to his present position in 1993.
Stephen J. Garthwaite, age 50, is Senior Vice President,
Technology and Operations. Mr. Garthwaite joined the
Company in 1982 as Vice President, Director of Corporate
Research and was named Vice President, Research and
Development for the Betty Crocker Division in 1986. He
assumed the position of Vice President, Research and
Development for Consumer Foods in 1987, was elected Senior
Vice President, Research and Development in 1989 and was
named Senior Vice President, Technology and Operations in
1990.
Joe R. Lee, age 53, is Vice Chairman with overall
responsibility for Betty Crocker Products, Gorton's, China
Coast, Gold Medal, Marketing Services, Technology and
Operations, Communications and Public Affairs. Mr. Lee was
elected a director in 1985. Mr. Lee joined Red Lobster in
1967 as a member of its founding team, and was named its
President in 1975. He was elected a Vice President of
General Mills in 1976, a Group Vice President in 1979, an
Executive Vice President in 1981, named Executive Vice
President, Finance and International Restaurants in 1991 and
elected to his present position in 1992.
Ronald N. Magruder, age 46, is Executive Vice President;
President, The Olive Garden - North America. Mr. Magruder
joined Red Lobster in 1972 and has served as both Vice
President of Operations and Vice President of International
Growth and Development for Red Lobster. He was named
President of Casa Gallardo in 1982, President of York Steak
House Systems in 1983, President of The Olive Garden in 1987
and was elected Senior Vice President in 1989 and Executive
Vice President in 1993.
David D. Murphy, age 42, is Senior Vice President;
President, General Mills Canada and International Foods.
Mr. Murphy joined the Company in 1976, was appointed Vice
President of Marketing Services in 1986 and subsequently
Vice President, General Manager of the Minnetonka Division
in 1988. He assumed overall responsibility for Betty
Crocker Products in 1989, when the Minnetonka and Betty
Crocker Divisions were merged. He was elected a Senior Vice
President in 1991, named President of the Big G Division in
1992 and named President of General Mills Canada and
International Foods in 1993.
Sandy J. Navin, age 58, is Vice President and Director of
Taxes. Mr. Navin joined General Mills as Tax Counsel in
1969, was named Assistant Director of Taxes in 1974 and was
elected Vice President and Director of Taxes in 1988.
Jeffrey J. O'Hara, age 46, is Executive Vice President;
President, Red Lobster - North America. Mr. O'Hara joined
the Company in 1970 and was named Vice President of
Marketing and Menu Planning for Red Lobster in 1978. He was
named President of The Good Earth in 1981, Executive Vice
President of Marketing and Development for General Mills
Restaurants in 1984 and President of Red Lobster in 1986.
He was elected Senior Vice President in 1989 and Executive
Vice President in 1993.
Michael A. Peel, age 44, is Senior Vice President,
Personnel. Mr. Peel joined the Company in 1991 from
PepsiCo, Inc. where he was Senior Vice President, Personnel,
responsible for PepsiCo Worldwide Foods from 1987 to 1991.
He was elected to his present position in 1991.
Gary M. Rodkin, age 42, is Senior Vice President;
President, Yoplait USA. Mr. Rodkin joined the Company in
1979 and was named Vice President, Assistant General
Manager, Sperry Division in 1988, Vice President, General
Manager, Grain Snacks and Beverages in 1989, President,
General Mills New Ventures in 1989, President, Yoplait USA
in 1992 and was elected to his present position in 1994.
Jeffrey J. Rotsch, age 44, is Senior Vice President;
President, Betty Crocker Products. Mr. Rotsch joined the
Company in 1974 and was named Vice President, Director of
Marketing for the Betty Crocker Divsion in 1987, Vice
President, General Manager for Betty Crocker main meals and
side dishes in 1989 and was elected to his present position
in 1993.
Stephen W. Sanger, age 48, is President and has been a
director since 1992. Mr. Sanger joined the Company in 1974
and was named Vice President, General Manager of the
Northstar Division in 1983. He was appointed Vice
President, General Manager of New Business Development in
1986, President of Yoplait USA in 1986, President of the Big
G Division in 1988, elected Senior Vice President in 1989,
Executive Vice President in 1991, Vice Chairman in 1992 and
President in 1993.
Blaine Sweatt, III, age 47, is Senior Vice President;
General Manager, New Business Development, Restaurants. Mr.
Sweatt joined the Company in 1976 and was named Vice
President, General Manager, The Olive Garden in 1984,
appointed a Vice President of the Company in 1989, named
Vice President, General Manager, New Business Development,
Restaurants in 1991, named President of New Business,
Restaurants in 1992 and elected to his present position in
1994.
Kenneth L. Thome, age 46, is Senior Vice President,
Financial Operations. Mr. Thome joined the Company in 1969
and was named Vice President, Controller for Convenience and
International Foods Group in 1985, Vice President,
Controller for International Foods in 1989, Vice President,
Director of Information Systems in 1991 and was elected to
his present position in 1993.
Stephen H. Warhover, age 50, is Senior Vice President;
President, Gorton's. Mr. Warhover joined the Company in
1968 and was appointed Vice President, General Manager of
the Betty Crocker Division in 1980. He was named Vice
President, General Manager of the Minnetonka Division in
1983, President of the Gorton's Division in 1986 and was
elected Senior Vice President in 1989.
Clifford L. Whitehill, age 63, is Senior Vice President,
General Counsel and Secretary. Mr. Whitehill joined the
Company in 1962 as an attorney in the Law Department. He
was appointed Assistant General Counsel in 1968, elected
Vice President in 1971, named General Counsel in 1975,
elected Senior Vice President in 1981 and elected Secretary
in 1983.
Mark H. Willes, age 53, is Vice Chairman, with overall
responsibility for International Foods, Cereal Partners
Worldwide, Red Lobster Japan, Restaurant Business
Development, Corporate Finance, Financial Operations, Law
and Investor Relations. Mr. Willes joined the Company as
Executive Vice President and Chief Financial Officer in
1980. He was elected President and became a director in
1985 and was elected to his present position in 1992.
GENERAL
Trademarks and Patents. The Company's products are
marketed and businesses operated under trademarks and
service marks owned by or licensed to the Company.
Trademarks and service marks are vital to the Company's
business. The most significant trademarks and service marks
of the Company are contained in the business segment
discussions above.
The Company considers that, taken as a whole, the rights
under its various patents, which expire from time to time,
are a valuable asset, but the Company does not believe that
its businesses are materially dependent upon any single
patent or group of related patents. The Company's
activities under licenses or other franchises or concessions
are not material.
Raw Materials and Supplies. The principal raw materials
used by General Mills are cereal grains, sugar, fruits,
other agricultural products, vegetable oils, fish for food
products, and plastic and paper for packaging materials.
Although General Mills has some long-term contracts, the
bulk of such raw materials are purchased on the open market.
Although prices of most raw materials will probably increase
over the long term, General Mills believes that it will be
able to obtain an adequate supply of such raw materials.
Occasionally and where possible, General Mills makes advance
purchases of commodities significant to its business in
order to ensure continuity of operations. In many cases,
the Company also seeks to protect itself from basic market
price fluctuations of certain commodities (grains and
vegetable oil) through hedging transactions.
Capital Expenditures. During the three fiscal years
ended May 29, 1994, General Mills expended $1,879 million
for capital expenditures, not including the cost of acquired
companies. The Company expects to spend approximately $525
million for such purposes in fiscal 1995.
Research and Development. The main research and
development facilities are located at the James Ford Bell
Technical Center in Golden Valley (suburban Minneapolis),
Minnesota. With a staff of approximately 740, the Center is
responsible for most of the food research for the Company.
Approximately one-half of the staff hold degrees in various
chemical, biological and engineering sciences. Research and
development expenditures (all Company-sponsored) amounted to
$63.6 million in fiscal 1994, $60.1 million in fiscal 1993
and $62.1 million in fiscal 1992. General Mills' research
and development resources are focused on new product
development, product improvement, process design and
improvement, packaging and exploratory research in new
business areas.
Employees. At May 29, 1994, General Mills had
approximately 125,700 employees.
Environmental Matters. As of June 30, 1994, the Company
has received notices advising it that there have been
releases or threatened releases of hazardous substances or
wastes at 10 sites, and alleging that the Company is
potentially responsible for cleaning up those sites and/or
paying certain costs in connection with those sites. These
matters involve several different procedural contexts,
including litigation initiated by governmental authorities
and/or private parties, administrative proceedings commenced
by regulatory agencies, and demand letters issued by
regulatory agencies and/or private parties. The Company
recognizes that its potential exposure with respect to any
of these sites may be joint and several, but has concluded
that its probable aggregate exposure is not material. This
conclusion is based upon, among other things, the Company's
payments and/or accruals with respect to each site; the
number, ranking, and financial strength of other potentially
responsible parties identified at each of the sites; the
status of the proceedings, including various settlement
agreements, consent decrees or court orders; allocations of
volumetric waste contributions and allocations of relative
responsibility among potentially responsible parties
developed by regulatory agencies and by private parties;
remediation cost estimates prepared by governmental
authorities or private technical consultants; and the
Company's historical experience in negotiating and settling
disputes with respect to similar sites.
Based on current facts and circumstances, General Mills
believes that neither the results of these proceedings nor
its compliance in general with environmental laws or
regulations will have a material effect upon the capital
expenditures, earnings or competitive position of the
Company.
Segment Information. For financial information relating
to industry segments of General Mills and foreign and
domestic operations and sales, see Note Eighteen to
Consolidated Financial Statements appearing on page 32 of
the Company's 1994 Annual Report to Stockholders,
incorporated herein by reference.
ITEM 2. PROPERTIES.
The Company's principal executive offices and main
research laboratory are Company-owned and located in the
Minneapolis, Minnesota metropolitan area. General Mills
operates numerous manufacturing facilities and maintains
many sales and administrative offices and warehouses mainly
in the United States. Other facilities are also operated in
Canada.
General Mills operates ten major consumer foods plants for
the production of cereal products, prepared mixes,
convenience foods and other food products. These facilities
are located at Albuquerque, New Mexico; Buffalo, New York;
Cedar Rapids, Iowa; Chicago, Illinois (2); Covington,
Georgia; Lodi, California; St. Charles, Illinois; Toledo,
Ohio; and Etobicoke, Canada. The Company owns seven flour
mills located at Avon, Iowa; Buffalo, New York; Great Falls,
Montana; Johnson City, Tennessee; Kansas City, Missouri;
Vallejo, California; and Vernon, California. The Company
operates seven terminal grain elevators and has country
grain elevators in 27 locations, primarily in Idaho and
Montana.
General Mills also has seven seafood processing facilities
and ten other food and beverage production facilities with
total floor space of approximately 771,000 square feet,
including 212,000 square feet of leased space. General
Mills also owns or leases warehouse space aggregating
approximately 6,388,000 square feet, of which approximately
3,772,000 square feet are leased. A number of sales and
administrative offices are maintained in the United States
and Canada, totaling 1,528,000 square feet.
The Company operates 1,158 restaurants, including 675 RED
LOBSTER, 458 THE OLIVE GARDEN and 25 CHINA COAST
restaurants, in the following locations:
Alabama (17) Iowa (7) Nevada (8) South Dakota (3)
Arizona (21) Kansas (10) New Hampshire (3) Tennessee (24)
Arkansas (8) Kentucky (13) New Jersey (22) Texas (110)
California (116) Louisiana (10) New Mexico (6) Utah (8)
Colorado (20) Maine (5) New York (40) Vermont (1)
Connecticut (10) Maryland (14) North Carolina (23) Virginia (31)
Delaware (4) Massachusetts (4) North Dakota (4) Washington (16)
Florida (121) Michigan (46) Ohio (65) West Virginia (3)
Georgia (36) Minnesota (18) Oklahoma (13) Wisconsin (20)
Hawaii (2) Mississippi (4) Oregon (10) Wyoming (1)
Idaho (2) Missouri (26) Pennsylvania (42)
Illinois (49) Montana (2) Rhode Island (3)
Indiana (38) Nebraska (6) South Carolina (14) Canada (79)
The Company is also engaged in a partnership which
operates 48 RED LOBSTER restaurants in Japan.
ITEM 3. LEGAL PROCEEDINGS.
In management's opinion, there were no claims or
litigation pending at June 30, 1994, the outcome of which
could have a significant effect on the consolidated
financial position of General Mills, Inc. and its
subsidiaries. The Company has received several state
consumer class action lawsuits in connection with the
improper substitution by an independent contractor of an
unapproved pesticide to treat some of the Company's stored
oat supplies during fiscal 1994. The Federal Food and Drug
Administration and the Environmental Protection Agency have
stated that there is no health issue associated with this
matter. The Company believes the cases to be without merit,
and any cost to the Company is not expected to be material.
See the information contained under the section entitled
"Environmental Matters," supra, for a discussion of
environmental matters in which the Company is involved.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS. - Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
The information relating to the market prices and
dividends of the Company's common stock contained in Note
Nineteen to Consolidated Financial Statements appearing on
page 32 of Registrant's 1994 Annual Report to Stockholders,
is incorporated herein by reference. As of July 22, 1994,
the number of record holders of common stock was 45,694.
The Company's common stock ($.10 par value) is listed on the
New York and Midwest Stock Exchanges.
ITEM 6. SELECTED FINANCIAL DATA.
The information for fiscal years 1990 through 1994
contained in the Eleven-Year Financial Summary As Reported
and the Financial Data for Continuing Operations on page 33
of Registrant's 1994 Annual Report to Stockholders, is
incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION.
The information set forth in the section entitled
"Management Discussion of Results of Operations and
Financial Condition" on pages 17 through 19 of Registrant's
1994 Annual Report to Stockholders, is incorporated herein
by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information on pages 20 through 32 of Registrant's
1994 Annual Report to Stockholders, is incorporated herein
by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE. - Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT.
The information contained in the sections entitled
"Information Concerning Nominees" and "Compliance with
Section 16(a) of the Securities Exchange Act of 1934"
contained in Registrant's definitive proxy materials dated
August 19, 1994, is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION.
The information contained in the section entitled "Board
Compensation and Benefits" and pages 23 through 29 of
Registrant's definitive proxy materials dated August 19,
1994 are incorporated herein by reference. The information
appearing under the heading "Report of Compensation
Committee on Executive Compensation" is not incorporated
herein.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT.
The information contained in the section entitled "Share
Ownership of Directors and Executive Officers" contained in
Registrant's definitive proxy materials dated August 19,
1994 is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. -
Not Applicable.
The Company's Annual Report on Form 10-K for the fiscal year
ended May 29, 1994, at the time of its filing with the
Securities and Exchange Commission, shall modify and
supersede all prior documents filed pursuant to Sections 13,
14 and 15(d) of the 1934 Act for purposes of any offers or
sales of any securities after the date of such filing
pursuant to any Registration Statement or Prospectus filed
pursuant to the Securities Act of 1933 which incorporates by
reference such Annual Report on Form 10-K.
AUDITORS' REPORT
The Stockholders and the Board of Directors
General Mills, Inc.:
Under date of July 29, 1994, we reported on the
consolidated balance sheets of General Mills, Inc. and
subsidiaries as of May 29, 1994 and May 30, 1993 and the
related consolidated statements of earnings and cash flows
for each of the fiscal years in the three-year period ended
May 29, 1994, as contained in the 1994 annual report to
stockholders. These consolidated financial statements and
our report thereon are incorporated by reference in the
annual report on Form 10-K for the fiscal year ended May 29,
1994. In connection with our audits of the aforementioned
consolidated financial statements, we have also audited the
related financial statement schedules as listed in the
accompanying index. These financial statement schedules are
the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statement schedules based on our audits.
In our opinion, such financial statement schedules, when
considered in relation to the basic consolidated financial
statements taken as a whole, present fairly, in all material
respects, the information set forth therein.
Our report covering the basic consolidated financial
statements refers to changes in the method of accounting for
postemployment benefits and for income taxes.
KPMG Peat Marwick
Minneapolis, Minnesota
July 29, 1994
AUDITORS' CONSENT
The Board of Directors
General Mills, Inc.:
We consent to incorporation by reference in the
Registration Statements (Nos. 2-49637, 2-91893, 33-15323, 33-
37474, 33-39927 and 33-56032) on Form S-3 and Registration
Statements (Nos. 2-13460, 2-53523, 2-66320, 2-91987, 2-
95574, 33-24504, 33-27628, 33-32059, 33-36892, 33-36893, 33-
51070 and 33-50337) on Form S-8 of General Mills, Inc. of
our reports dated July 29, 1994, relating to the
consolidated balance sheets of General Mills, Inc. and
subsidiaries as of May 29, 1994 and May 30, 1993 and the
related consolidated statements of earnings, cash flows and
related financial statement schedules for each of the fiscal
years in the three-year period ended May 29, 1994, which
reports are included or incorporated by reference in the May
29, 1994 annual report on Form 10-K of General Mills, Inc.
Our report covering the basic consolidated financial
statements refers to changes in the method of accounting for
postemployment benefits and for income taxes.
KPMG Peat Marwick
Minneapolis, Minnesota
August 22, 1994
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K.
(A) 1. FINANCIAL STATEMENTS:
Consolidated Statements of Earnings for the Fiscal
Years Ended May 29, 1994, May 30, 1993 and May 31, 1992
(incorporated herein by reference to page 21 of the
Registrant's 1994 Annual Report to Stockholders).
Consolidated Balance Sheets at May 29, 1994 and May 30,
1993 (incorporated herein by reference to page 22 of
the Registrant's 1994 Annual Report to Stockholders).
Consolidated Statements of Cash Flows for the Fiscal
Years Ended May 29, 1994, May 30, 1993 and May 31, 1992
(incorporated herein by reference to page 23 of the
Registrant's 1994 Annual Report to Stockholders).
Notes to Consolidated Financial Statements
(incorporated herein by reference to pages 24 through
32 of the Registrant's 1994 Annual Report to
Stockholders).
2. FINANCIAL STATEMENT SCHEDULES:
For the Fiscal Years Ended May 29, 1994, May 30, 1993
and May 31, 1992:
V - Property, Plant and Equipment
VI - Accumulated Depreciation, Depletion and Amortization
of Property, Plant and Equipment
VIII - Valuation and Qualifying Accounts
IX - Short-Term Borrowings
X - Supplementary Income Statement Information
3. EXHIBITS:
3.1 - Copy of Registrant's Restated Certificate of
Incorporation, as amended to date (incorporated
herein by reference to Exhibit 3.1 to Registrant's
Annual Report on Form 10-K for the fiscal year ended
May 31, 1992).
3.2 - Copy of Registrant's By-Laws, as amended to date.
4 - Copy of Indenture between Registrant and Continental
Illinois National Bank and Trust Company of Chicago,
as amended to date by Supplemental Indentures Nos. 1
through 8 (incorporated herein by reference to Exhibit 4
to Registrant's Annual Report on Form 10-K for the
fiscal year ended May 31, 1992 and to Exhibit 4(b) to
Registrant's Current Report on Form 8-K filed
January 8, 1993).
*10.1 - Copy of Stock Option and Long-Term Incentive Plan of
1988, as amended to date.
*10.2 - Copy of Stock Option and Long-Term Incentive Plan of
1984, as amended to date.
*10.3 - Copy of Stock Option and Long-Term Incentive Plan of
1980, as amended to date (incorporated herein by
reference to Exhibit 10.3 to Registrant's Annual
Report on Form 10-K for the fiscal year ended May 31,
1992).
*10.4 - Copy of Executive Incentive Plan, as amended to date
(incorporated herein by reference to Exhibit 10.4 to
Registrant's Annual Report on Form 10-K for the fiscal
year ended May 30, 1993).
*10.5 - Copy of Management Continuity Agreement, as amended to date.
*10.6 - Copy of Supplemental Retirement Plan, as amended to date.
*10.7 - Copy of Executive Survivor Income Plan, as amended to date
(incorporated herein by reference to Exhibit 10.8 to
Registrant's Annual Report on Form 10-K for the fiscal
year ended May 26, 1991).
*10.8 - Copy of Executive Health Plan, as amended to date
(incorporated herein by reference to Exhibit 10.9 to
Registrant's Annual Report on Form 10-K for the fiscal
year ended May 26, 1991).
*10.9 - Copy of Supplemental Savings Plan, as amended to date.
10.10 - Copy of Compensation Plan for Non-Employee Directors,
as amended to date (incorporated herein by reference
to Exhibit 10.10 to Registrant's Annual Report on
Form 10-K for the fiscal year ended May 31, 1992).
10.11 - Copy of Retirement Plan for Non-Employee Directors,
as amended to date (incorporated herein by reference
to Exhibit 10.11 to Registrant's Annual Report on
Form 10-K for the fiscal year ended May 30, 1993).
*10.12 - Copy of Deferred Compensation Plan, as amended to date
(incorporated herein by reference to Exhibit 10.12 to
Registrant's Annual Report on Form 10-K for the fiscal
year ended May 30, 1993).
*10.13 - Copy of Supplemental Benefits Trust Agreement dated
February 9, 1987, as amended and restated as of
September 26, 1988.
*10.14 - Copy of Supplemental Benefits Trust Agreement dated
September 26, 1988.
10.15 - Agreements dated November 29, 1989 by and between
General Mills, Inc. and Nestle, S.A. (incorporated
herein by reference to Exhibit 10.16 to Registrant's
Annual Report on Form 10-K for the fiscal year ended
May 27, 1990).
10.16 - Copy of Protocol and Addendum No. 1 to Protocol of
Cereal Partners Worldwide (incorporated herein by
reference to Exhibit 10.17 to Registrant's Annual
Report on Form 10-K for the fiscal year ended
May 26, 1991).
10.17 - Copy of Stock Plan for Non-Employee Directors, as
amended to date (incorporated herein by reference
to Exhibit 10.17 to Registrant's Annual Report on
Form 10-K for the fiscal year ended May 31, 1992).
*10.18 - Copy of 1990 Salary Replacement Stock Option Plan,
as amended to date.
10.19 - Copy of Addendum No. 2 dated March 16, 1993 to
Protocol of Cereal Partners Worldwide (incorporated
herein by reference to Exhibit 10.19 to Registrant's
Annual Report on Form 10-K for the fiscal year ended
May 30, 1993).
10.20 - Copy of Agreement dated July 31, 1992 by and between
General Mills, Inc. and PepsiCo, Inc.(incorporated
herein by reference to Exhibit 10.20 to Registrant's
Annual Report on Form 10-K for the fiscal year ended
May 30, 1993).
*10.21 - Copy of Stock Option and Long-Term Incentive Plan of
1993, as amended to date.
11 - Statement of Determination of Common Shares and Common
Share Equivalents (contained on page 19 of this Report).
12 - Statement of Ratio of Earnings to Fixed Charges
(contained on page 20 of this Report).
13 - 1994 Annual Report to Stockholders (only those portions
expressly incorporated by reference herein shall be
deemed filed with the Commission).
21 - List of Subsidiaries of General Mills, Inc.
23 - Consent of KPMG Peat Marwick (contained on page 9 of
this Report).
(B) REPORTS ON FORM 8-K. - Not applicable.
* Items that are management contracts or compensatory plans or arrangements
required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
GENERAL MILLS, INC.
Dated: August 22, 1994
By: /s/ C. L. WHITEHILL
C. L. Whitehill
Senior Vice President,
General Counsel and Secretary
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF
OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
/s/ H.B. ATWATER, JR. Chairman of the Board and August 2, 1994
(H.B. Atwater, Jr.) Chief Executive Officer
/s/ R.M. BRESSLER Director August 3, 1994
(Richard M. Bressler)
/s/ L. DE SIMONE Director August 4, 1994
(Livio D. DeSimone)
/s/ W.T. ESREY Director August 2, 1994
(William T. Esrey)
/s/ C. W. GAILLARD Director, August 2, 1994
(Charles W. Gaillard) Vice Chairman
/s/ JUDITH R. HOPE Director August 2, 1994
Judith R. Hope)
/s/ JOE R. LEE Director, August 9, 1994
(Joe R. Lee) Vice Chairman
/s/ KENNETH MACKE Director August 2, 1994
(Kenneth A. Macke)
/s/ GEORGE PUTNAM Director August 3, 1994
(George Putnam)
/s/ M.D. ROSE Director August 3, 1994
(Michael D. Rose)
/s/ S.W. SANGER Director, August 16, 1994
(Stephen W. Sanger) President
/s/ A. MICHAEL SPENCE Director August 8, 1994
(A. Michael Spence)
/s/ Mark H. WILLES Director, August 8, 1994
(Mark H. Willes) Vice Chairman
/s/ C. ANGUS WURTELE Director August 4, 1994
(C. Angus Wurtele)
/s/ KENNETH L. THOME Senior Vice President, August 3, 1994
(Kenneth L. Thome) Financial Operations
<TABLE>
<CAPTION>
GENERAL MILLS, INC. AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
(in millions)
Column A Column B Column C Column D Column E Column F
Other
Balance at changes Balance
beginning Additions add at end of
Description of period at cost Retirements(a) (deduct)(b) period
<S> <C> <C> <C> <C> <C>
Year ended
May 29, 1994:
Land $ 302.3 $ 60.1 $ .7 $ (.8) $ 360.9
Buildings 1,452.6 216.5 9.5 (4.0) 1,655.6
Equipment 2,048.1 419.3 94.1 .5 2,373.8
Construction in 436.5 (136.4) _ (.6) 299.5
progress
Total $4,239.5 $559.5 $104.3 $ (4.9) $4,689.8
Year ended
May 30, 1993:
Land $ 253.9 $ 58.7 $ 9.7 $ (.6) $ 302.3
Buildings 1,302.2 218.3 66.4 (1.5) 1,452.6
Equipment 1,903.2 308.4 167.1 3.6 2,048.1
Construction in 450.0 38.4 55.5 3.6 436.5
progress
Total $3,909.3 $623.8 $298.7 $ 5.1 $4,239.5
Year ended
May 31, 1992:
Land $ 215.2 $ 41.2 $ 1.6 $ (.9) $ 253.9
Buildings 1,116.6 198.0 10.2 (2.2) 1,302.2
Equipment 1,701.6 307.8 107.3 1.1 1,903.2
Construction in 303.7 148.3 2.0 - 450.0
progress
Total $3,337.1 $695.3 $121.1 $ (2.0) $3,909.3
<FN>
Notes:
(a) Gross book value retired or sold. Fiscal 1993 includes assets
contributed to Snack Ventures Europe.
(b) Includes changes in dollar value of foreign assets due to foreign
currency translation and the fiscal 1994 Colombo yogurt acquisition.
</FN>
</TABLE>
<PAGE>
<TABLE>
GENERAL MILLS, INC. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
(in millions)
<CAPTION>
Column A Column B Column C Column D Column E Column F
Additions Other
Balance at charged to changes Balance
beginning costs and Retirements add at end of
Description of period expenses(a) (b) (deduct)(c) period
<S> <C> <C> <C> <C> <C>
Year ended
May 29, 1994:
Buildings $ 366.7 $ 74.0 $ 4.6 $(1.9) $ 434.2
Equipment 1,013.2 223.8 71.0 (3.0) 1,163.0
Total $1,379.9 $297.8 $ 75.6 $(4.9) $1,597.2
Year ended
May 30, 1993:
Buildings $ 336.8 $ 64.1 $ 35.1 $ .9 $ 366.7
Equipment 923.9 206.7 120.6 3.2 1,013.2
Total $1,260.7 $270.8 $155.7 $ 4.1 $1,379.9
Year ended
May 31, 1992:
Buildings $ 289.1 $ 54.4 $ 7.0 $ .3 $ 336.8
Equipment 806.7 187.6 72.0 1.6 923.9
Total $1,095.8 $242.0 $ 79.0 $ 1.9 $1,260.7
<FN>
Notes:
(a) See Note One (B) of Notes to Consolidated Financial Statements
contained in the Registrant's 1994 Annual Report to Stockholders.
(b) Accumulated depreciation removed due to retirement or sale.
Fiscal 1993 includes accumulated depreciation related to assets
contributed to Snack Ventures Europe.
(c) Changes in dollar value of foreign assets due to changes in foreign
currency translation.
</FN>
</TABLE>
<PAGE>
<TABLE>
GENERAL MILLS, INC. AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
(in millions)
<CAPTION>
Column A Column B Column C Column D Column E
Additions
Balance at charged to Deductions Balance
beginning costs and from at end of
Description of period expenses reserves period
Allowance for possible
losses on accounts
receivable:
<S> <C> <C> <C> <C>
Year ended May 29, 1994 $4.3 $ .8 $ .9 (a) $4.4
(.2)(b)
Total $4.3 $ .8 $ .7 $4.4
Year ended May 30, 1993 $6.4 $ .9 $2.5 (a) $4.3
.5 (b)
Total $6.4 $ .9 $3.0 $4.3
Year ended May 31, 1992 $6.0 $ 1.9 $1.6 (a) $6.4
(.1)(b)
Total $6.0 $ 1.9 $1.5 $6.4
<FN>
Notes:
(a) Bad debt write-offs.
(b) Other adjustments and reclassifications.
</FN>
</TABLE>
<TABLE>
GENERAL MILLS, INC. AND SUBSIDIARIES
SCHEDULE IX - SHORT-TERM BORROWINGS
(in millions)
<CAPTION>
Column A Column B Column C Column D Column E Column F
Maximum Weighted
Weighted amount daily
Balance at average outstanding Average average
end interest (at any amount interest
Category of short-term of period rate month end) outstanding* rate
borrowings
<S> <C> <C> <C> <C> <C>
Year ended May 29, 1994:
Banks** $250.3 4.5% $312.3 $172.4 3.8%
U.S. commercial paper** 89.2 4.1 164.3 334.7 3.3
Canadian commercial paper 83.3 5.7 91.7 77.0 4.3
Other 10.5 3.5 10.5 .4 3.5
Year ended May 30, 1993:
Banks** $208.2 4.6% $247.2 $206.9 4.3%
U.S. commercial paper** 55.5 3.1 74.8 107.2 3.2
Canadian commercial paper 75.9 5.0 82.8 78.9 6.1
Year ended May 31, 1992:
Banks** $ 66.2 9.2% $154.3 $106.6 6.1%
U.S. commercial paper** _ _ _ 68.9 4.9
Canadian commercial paper 103.1 6.9 112.9 67.6 8.0
<FN>
* Determined by dividing total of daily balances outstanding
by 364 days for fiscal 1994 and 1993, and 371 days for
fiscal 1992, excluding any reclassifications.
**Short-term borrowings of $250.0 million, $200.0 million and
$150.0 million were reclassified to long-term at May 29,
1994, May 30, 1993 and May 31, 1992, respectively, as the
Company's revolving credit agreement (See Note Seven of
Notes to Consolidated Financial Statements contained in the
Registrant's 1994 Annual Report to Stockholders) provides
the Company with the ability to refinance short-term
borrowings. If the reclassifications had not been made,
the maximum amount of bank debt outstanding would have been
$312.3 million, $312.0 million and $194.4 million during
the years ended May 29, 1994, May 30, 1993 and May 31,
1992, respectively, and the maximum amount of U.S.
commercial paper outstanding would have been $381.2
million, $255.5 million and $131.5 million during the years
ended May 29, 1994, May 30, 1993 and May 31, 1992,
respectively.
</FN>
</TABLE>
<TABLE>
GENERAL MILLS, INC. AND SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
(in millions)
<CAPTION>
For the Fiscal Years Ended
May 29, 1994 May 30, 1993 May 31, 1992
<S> <C> <C> <C>
Maintenance and repairs $218.3 $205.4 $209.0
Depreciation and amortization
of intangible assets, preoperating
costs and similar deferrals * * *
Taxes, other than payroll and
income taxes * * *
Royalties * * *
Advertising media expenditures 409.5 395.4 426.8
<FN>
*Less than 1% of total sales.
</FN>
</TABLE>
<TABLE>
EXHIBIT 11
GENERAL MILLS, INC.
STATEMENT OF DETERMINATION OF COMMON SHARES AND
COMMON SHARE EQUIVALENTS
(in millions)
<CAPTION>
Weighted average number of
common shares and common share
equivalents assumed outstanding
For the Fiscal Years Ended
May 29, 1994 May 30, 1993 May 31, 1992
<S> <C> <C> <C>
Weighted average number of
common shares outstanding,
excluding common stock held
in treasury (a) 159.1 163.1 165.7
Common share equivalents
resulting from the assumed
exercise of certain stock
options (b) 2.4 * 3.3 * 3.3 *
Total common shares and common
share equivalents 161.5 166.4 169.0
<FN>
Notes:
(a) Beginning balance of common stock is adjusted for changes in the number
of shares outstanding, weighted monthly by the elapsed portion of the
period during which the shares were outstanding.
(b) Common share equivalents are computed by the "treasury stock" method.
Share amounts represent the dilutive effect of outstanding stock options
which have an option price below the average market price for the period
concerned.
* Common share equivalents are not material. As a result,
earnings per share have been computed using the weighted
average of common shares outstanding of 159.1 million,
163.1 million and 165.7 million for fiscal 1994, 1993 and
1992, respectively.
</FN>
</TABLE>
<TABLE>
EXHIBIT 12
GENERAL MILLS, INC.
RATIO OF EARNINGS TO FIXED CHARGES
<CAPTION>
Fiscal Year Ended
May 29, May 30, May 31, May 26, May 27,
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Ratio of Earnings
to Fixed Charges 6.16 7.79 8.58 7.82 7.66
</TABLE>
For purposes of computing the ratio of earnings to fixed charges,
earnings represent pretax income from continuing operations plus fixed
charges (net of capitalized interest). Fixed charges represent interest
(whether expensed or capitalized) and one-third (the proportion deemed
representative of the interest factor) of rents of continuing operations.
EXHIBIT INDEX
3.2 - Copy of Registrant's By-Laws, as amended to date.
10.1 - Copy of Stock Option and Long-Term Incentive Plan of 1988,
as amended to date.
10.2 - Copy of Stock Option and Long-Term Incentive Plan of 1984,
as amended to date.
10.5 - Copy of Management Continuity Agreement, as amended to date.
10.6 - Copy of Supplemental Retirement Plan, as amended to date.
10.9 - Copy of Supplemental Savings Plan, as amended to date.
10.13 - Copy of Supplemental Benefits Trust Agreement dated February 9,
1987, as amended and restated as of September 26, 1988.
10.14 - Copy of Supplemental Benefits Trust Agreement dated
September 26, 1988.
10.18 - Copy of 1990 Salary Replacement Stock Option Plan, as amended
to date.
10.21 - Copy of Stock Option and Long-Term Incentive Plan of 1993, as
amended to date.
11 - Statement of Determination of Common Shares and Common Share
Equivalents.
12 - Statement of Ratio of Earnings to Fixed Charges.
13 - 1994 Annual Report to Stockholders (only those portions expressly
incorporated by reference herein shall be deemed filed with the
Commission).
21 - List of Subsidiaries of General Mills, Inc.
23 - Consent of KPMG Peat Marwick.
EXHIBIT 10.18
GENERAL MILLS, INC.
1990 SALARY REPLACEMENT
STOCK OPTION PLAN
As Amended Through June 27, 1994
GENERAL MILLS, INC.
1990 SALARY REPLACEMENT STOCK OPTION PLAN
1. PURPOSE OF THE PLAN
The purpose of the General Mills, Inc. 1990 Salary
Replacement Stock Option Plan (the "Plan") is to give key
employees of General Mills, Inc. (the "Company") and its
subsidiaries who are primarily responsible for the
management of the business of the Company the opportunity to
receive stock option grants in lieu of salary increases,
and, as to employees who are not subject to Section 16 of
the 1934 Act (each as hereinafter defined), an opportunity
to receive stock option grants in lieu of certain other
compensation and employee benefits thereby encouraging focus
on the growth and profitability of the Company and its
Common Stock.
2. EFFECTIVE DATE OF PLAN
This Plan shall become effective as of September 17,
1990, subject to the approval of the stockholders of the
Company at the Annual Meeting on September 17, 1990.
3. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Compensation
Committee (the "Committee"). The Committee shall be made up
of non-management members of the Board of Directors (the
"Board") appointed in accordance with the Company's
Certificate of Incorporation. The Committee shall have
authority to adopt rules and regulations for carrying out
the purpose of the Plan, select the employees to whom grants
will be made ("Optionees"), the number of shares to be
optioned and interpret, construe and implement the
provisions of the Plan; provided that if at any time Rule
16b-3 or any successor rule ("Rule 16b-3") under the
Securities Exchange Act of 1934, as amended (the "1934
Act"), so permits without adversely affecting the ability of
the Plan to comply with the conditions for exemption from
Section 16 of the 1934 Act (or any successor provisions)
provided by Rule 16b-3, the Committee may delegate the
administration of the Plan in whole or in part, on such
terms and conditions, and to such person or persons as it
may determine in its discretion, as it relates to persons
not subject to Section 16 of the 1934 Act, or any successor
provision. Decisions of the Committee (or its delegate as
permitted herein) shall be final, conclusive and binding
upon all parties, including the Company, stockholders and
Optionees.
4. COMMON STOCK SUBJECT TO THE PLAN
The shares of "Common Stock" of the Company ($.10 par
value) to be issued upon the exercise of a non-qualified
option to purchase Common Stock granted hereunder (an
"Option") may be made available from the authorized but
unissued Common Stock, shares of Common Stock held in the
treasury, or Common Stock purchased on the open market or
otherwise.
Approval of the Plan by the stockholders of the Company
shall constitute authorization to use such shares for the
Plan, subject to the discretion of the Board or as such
discretion may be delegated to the Committee.
Subject to the provisions of the next succeeding
paragraph, the maximum aggregate number of shares originally
authorized under the Plan for which Options could be granted
under the Plan shall was 3,000,000 shares. As of June 1,
1992, and subject to the provisions of the next succeeding
paragraph, there remain 4,493,000 shares authorized to be
issued under the Plan (as adjusted for stock splits). If an
Option granted under the Plan is terminated without having
been exercised in full, the unpurchased or forfeited shares
or rights to receive shares shall become available for grant
to other employees.
The number of shares of Common Stock subject to the
Plan, the outstanding Salary Stock Options, and the exercise
price per share of outstanding Options may be appropriately
adjusted by the Committee in the event that:
(i) the number of outstanding shares of
Common Stock of the Company shall be changed
by reason of split-ups, combinations or
reclassifications of shares;
(ii) any stock dividends are distributed to the
holders of Common Stock of the Company; or
(iii) the Common Stock of the Company is converted
into or exchanged for other shares as a result
of any merger or consolidation (including a
sale of assets) or other recapitalization.
5. ELIGIBLE PERSONS
Only persons who are officers or key employees of the
Company or a subsidiary shall be eligible to receive grants
under the Plan. No grant shall be made to any member of the
Committee or any other non-employee director.
6. PURCHASE PRICE OF SALARY STOCK OPTIONS
The purchase price for each share of Common Stock issuable
under an Option shall not be less than 100 percent of the
Fair Market Value of the Shares of Common Stock of the
Company subject to such option on the date of grant. "Fair
Market Value" as used in the Plan shall equal the mean of
the high and low price of the Common Stock on the New York
Stock Exchange on the applicable date.
7. OPTION TERM
The term of each Option grant as determined by the Committee
shall not exceed ten (10) years and one (1) month from the
date of that grant and shall expire as of the last day of
the designated term, unless terminated earlier under the
provisions of the Plan.
8. OPTION TYPE
Option grants will be Non-Qualified Stock Options governed
by Section 83 of the Internal Revenue Code of 1986, as
amended (the "Code") or any successor provision.
9. NON-TRANSFERABILITY OF OPTIONS
No Option granted under this Plan shall be transferable by
the Optionee otherwise than by the Optionee's Last Will and
Testament or by the laws of descent and distribution. An
Optionee shall forfeit any Option assigned or transferred,
voluntarily or involuntarily, other than as permitted under
this Section. Each Option shall be exercised during the
Optionee's lifetime only by the Optionee or his or her
guardian or legal representative.
10. EXERCISE OF OPTIONS
Except as provided in Sections 12, 13 and 14, each
Option shall be vested and may be exercised in accordance
with such terms and conditions as may be determined by the
Committee for grants to officers or executives and by the
Chief Executive Officer of the Company for grants to other
management participants.
Subject to the provision of this Section 10, each
Option may be exercised in whole or, from time to time, in
part with respect to the number of then exercisable shares
in any sequence desired by the Optionee without regard to
the date of grant of stock options under other plans of the
Company.
An Optionee exercising an Option shall give notice to
the Company of such exercise and of the number of shares
elected to be purchased prior to 4:30 P.M. CST/CDT on the
day of exercise, which must be a business day at the
executive offices of the Company. At the time of purchase,
the Optionee shall tender the full purchase price of the
shares purchased. Until such payment has been made and a
certificate or certificates for the shares purchased has
been issued in the Optionee's name, the Optionee shall
possess no stockholder rights with respect to any such
shares. Payment of such purchase price shall be made to the
Company, subject to any applicable rule or regulation
adopted by the Committee:
(i) in cash (including check, draft, money
order or wire transfer made payable to the
order of the Company);
(ii) through the delivery of shares of Common
Stock owned by the Optionee; or
(iii) by a combination of (i) and (ii) above.
For determining the payment, Common Stock delivered
pursuant to (ii) or (iii) shall have a value equal to the
Fair Market Value of the Common Stock on the date of
exercise.
11. WITHHOLDING TAXES ON OPTION EXERCISE
Each Optionee shall deliver to the Company cash in an
amount equal to all federal, state and local withholding
taxes required to be collected by the Company in respect of
the exercise of an Option, and until such payment is made,
the Company may, in its discretion, retain all or a portion
of the shares to be issued.
Notwithstanding the foregoing, to the extent permitted
by law and pursuant to such rules as the Committee may
adopt, an Optionee may authorize the Company to satisfy any
such withholding requirement by directing the Company to
withhold from any shares to be issued such number of shares
as shall be sufficient to satisfy the withholding
obligation.
12. EXERCISE OF OPTIONS IN EVENT OF CERTAIN CHANGES OF
CONTROL
Each outstanding Option shall become immediately and
fully exercisable for a period of six (6) months following
the date of the following occurrences, each constituting a
"Change of Control":
(i) if any person (including a group as
defined in Section 13(d)(3) of the 1934 Act)
becomes, directly or indirectly, the
beneficial owner of twenty (20) percent or
more of the shares of the Company entitled to
vote for the election of directors;
(ii) as a result of or in connection with any
cash tender offer, exchange offer, merger or
other business combination, sale of assets or
contested election, or combination of the
foregoing, the persons who were Directors of
the Company just prior to such event cease to
constitute a majority of the Company's Board
of Directors; or
(iii) the stockholders of the Company approve an
agreement providing for a transaction in which
the Company will cease to be an independent
publicly-owned corporation or a sale or other
disposition of all or substantially all of the
assets of the Company occurs.
After such six (6) month period the normal option
exercise provisions of the Plan shall govern. In the event
an Optionee is terminated as an employee of the Company or a
Subsidiary within two (2) years of any of the events
specified in (i), (ii) or (iii), all outstanding Stock
Options at that date of termination shall become immediately
exercisable for a period of three (3) months.
13. TERMINATION OF EMPLOYMENT OR LEAVE OF ABSENCE OF AN
OPTIONEE
(a) Normal Termination
If the Optionee's employment by the Company or a
subsidiary terminates for any reason other than as specified
in subsections (b), (c), (d) or (e), the Options shall
terminate three (3) months after such termination. If the
employment by the Company or a subsidiary of an Optionee,
other than an Optionee subject to Section 16 of the 1934
Act, is terminated for the convenience of the Company, as
determined by the Committee, and, at the time of termination
the sum of the Optionee's age and service with the Company
equals or exceeds 70, the Committee, in its sole discretion,
may permit any Option previously granted to the Optionee
under the Plan to be exercised to the full extent that such
Option could have been exercised by such Optionee
immediately prior to the Optionee's termination and may
permit such Option to remain exercisable until the
expiration of the Option in accordance with its original
term.
(b) Death
If the termination of employment is due to the
Optionee's death, the Options may be exercised as provided
in Section 14.
(c) Retirement
If the termination of employment is due to the
Optionee's retirement, the Optionee thereafter may exercise
an Option within the period remaining under the original
term of the Option.
(d) Spin-offs
If the termination of employment is due to the
cessation, transfer, or spin-off of a complete line of
business of the Company, the Committee, in its sole
discretion, may determine that all outstanding Options
granted more than one (1) year prior to the date of such
termination shall immediately become exercisable for a
period of three (3) years after the date of such
termination, subject to the provisions of Section 7.
(e) Leave of Absence
Unless the Committee shall otherwise determine, if an
Optionee is placed on an unpaid leave of absence, such
Optionee's Options shall terminate at the expiration of the
unpaid leave of absence.
If an Optionee is placed on an unpaid leave of absence,
retires during such leave, and the Committee had decided not
to terminate the Optionee's right to exercise an Option at
the date of the inception of said leave of absence, then
such Optionee may exercise an Option in accordance with
subsection (c).
14. DEATH OF OPTIONEE
If an Optionee should die while employed by the Company
or a subsidiary or after retirement, any Option previously
granted to the Optionee under this Plan may be exercised by
the person designated in such Optionee's Last Will and
Testament or, in the absence of such designation, by the
Optionee's estate, to the full extent that such Option could
have been exercised by such Optionee immediately prior to
the Optionee's death, subject to the original term of the
Option.
15. AMENDMENTS TO THE PLAN
The Plan may be terminated, modified, or amended by the
Board of Directors of the Company.
Subject to the approval of the Board of Directors, the
Committee may at any time terminate, modify or suspend the
operation of the Plan, provided that no such amendment,
alteration or discontinuation shall be made without the
approval of the stockholders of the Company:
(i) if such approval is necessary to comply with
any legal, tax or regulatory requirement,
including any approval requirement which is a
prerequisite for exemptive relief from Section
16(b) of the 1934 Act; or
(ii) to materially increase the number of shares
which may be issued under the Plan or materially
modify the requirements as to eligibility for
participating in the Plan.
The Board of Directors shall have authority to cause
the Company to take any action related to the Plan which may
be required to comply with the provisions of the Securities
Act of 1933, as amended, the 1934 Act, and the rules and
regulations prescribed by the Securities and Exchange
Commission. Any such action shall be at the expense of the
Company.
No termination, modification, suspension or amendment
of the Plan shall alter or impair the rights of any Optionee
pursuant to a prior grant, without the consent of the
Optionee.
16. FOREIGN JURISDICTIONS
The Committee may adopt, amend, and terminate such
arrangements, not inconsistent with the intent of the Plan,
as it may deem necessary or desirable to make available tax
or other benefits of laws of any foreign jurisdiction, to
key employees of the Company who are subject to such laws
and who are eligible to receive Option grants under the
Plan.
17. DURATION OF THE PLAN
Grants may be made under the Plan until September 30,
1995.
18. NOTICE
All notices and communications to the Company shall be
in writing, effective as of actual receipt by the Company,
and shall be sent to:
General Mills, Inc.
Number One General Mills Boulevard
Minneapolis, Minnesota 55426
Attention: Corporate Compensation
If by Telex: 170360 Gen Mills
If by Facsimile: (612) 540-4925
19. SECTION 16 OFFICERS
With respect to persons subject to Section 16 of the
1934 Act, transactions under the Plan are intended to
comply with all applicable conditions of Rule 16b-3 or its
successors under the 1934 Act. To the extent any
provision of the Plan or action by the Committee fails to
so comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Committee.
Effective as of September 17, 1990
As amended effective June 1, 1992
As amended effective June 27, 1994
EXHIBIT 10.21
GENERAL MILLS, INC.
STOCK OPTION AND LONG-TERM INCENTIVE PLAN OF 1993
As Amended Through June 27, 1994
GENERAL MILLS, INC.
STOCK OPTION AND LONG-TERM INCENTIVE PLAN OF 1993
1. PURPOSE OF THE PLAN
The purpose of the General Mills, Inc. Stock Option
and Long-Term Incentive Plan of 1993 (the "Plan") is
to attract and retain able employees by rewarding
employees of General Mills, Inc., its subsidiaries and
affiliates (defined as entities in which General
Mills, Inc. owns an equity interest of 25% or more)
(collectively, the "Company") who are responsible for
the growth and sound development of the business of
the Company, and to align the interests of all
employees with those of the stockholders of the
Company.
2. EFFECTIVE DATE, DURATION AND SUMMARY OF PLAN
A. Effective Date and Duration
This Plan shall become effective as of September
20, 1993, subject to the approval of the
stockholders of the Company at the Annual Meeting
on September 20, 1993. Awards may be made under
the Plan until October 1, 1998.
B. Summary of Option Provisions for Participants
The stock option that will be awarded to
employees under this Plan gives a right to an
employee to purchase at a future date shares of
General Mills, Inc. common stock at a fixed
price. As an employee, you will receive an
"option certificate" in your own name, which will
contain the term and other conditions of the
option grant. In general, each certificate will
state the number of shares of General Mills that
you can purchase from the Company, the price at
which you can purchase the shares, and the date
you can make your purchase. You will not have
any taxable income when you receive the option
certificate.
The price at which you may buy the General Mills
shares will be equal to the market price of the
Company shares on the New York Stock Exchange as
of the day the option was awarded to you. If
during the period that you must hold the option
certificate before you can use it, the price of
General Mills stock has risen, you will make a
gain on exercising the option certificate equal
to the difference between the price shown on the
option certificate and the market price of
General Mills shares on the date you use your
option to buy shares under the terms of the
option certificate. This gain is taxable to you.
You will never be obligated to buy shares of
General Mills if you do not wish to do so. After
the necessary holding period before you can use
the certificate, you can continue to hold the
option certificate as an employee for up to ten
years and one month before making the decision
whether or not to buy shares of General Mills.
After the full term of ten years and one month,
the rights under the certificate will lapse and
cannot then be used by the employee.
In general, you cannot sell or assign the option
certificate to any other person, and the specific
provisions which cover your rights in the option
certificate are covered in the full text of the
Plan.
3. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Compensation
Committee (the "Committee"). The Committee shall be
comprised solely of non-employee, independent members
of the Board of Directors (the "Board") appointed in
accordance with the Company's Certificate of
Incorporation. Subject to the provisions of Section
14, the Committee shall have authority to adopt rules
and regulations for carrying out the purpose of the
Plan, select the employees to whom Awards will be made
("Participants"), determine the number of shares to be
awarded and the other terms and conditions of Awards
in accordance with the Plan provisions and interpret,
construe and implement the provisions of the Plan;
provided that if at any time Rule 16b-3 or any
successor rule ("Rule 16b-3") under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), so
permits, without adversely affecting the ability of
the Plan to comply with the conditions for exemption
from Section 16 of the 1934 Act (or any successor
provisions) provided by Rule 16b-3, the Committee may
delegate its duties under the Plan in whole or in
part, on such terms and conditions, to the Chief
Executive Officer and to other senior officers of the
Company; provided further, that only the Committee may
select and make other decisions as to Awards to
Participants who are subject to Section 16 of the 1934
Act and to other executives of the Company. The
Committee (or its permitted delegate) may correct any
defect or supply any omission or reconcile any
inconsistency in any agreement relating to any Award
under the Plan in the manner and to the extent it
deems necessary. Decisions of the Committee (or its
permitted delegate) shall be final, conclusive and
binding upon all parties, including the Company,
stockholders and Participants.
4. COMMON STOCK SUBJECT TO THE PLAN
The shares of common stock of the Company ($.10 par
value) ("Common Stock") to be issued upon exercise of
a Stock Option, awarded as Restricted Stock, or issued
upon expiration of the restricted period for
Restricted Stock Units, may be made available from the
authorized but unissued Common Stock, shares of Common
Stock held in the Company's treasury, or Common Stock
purchased by the Company on the open market or
otherwise. Approval of the Plan by the stockholders
of the Company shall constitute authorization to use
such shares for the Plan.
The Committee, in its discretion, may require as a
condition to the grant of Stock Options, Restricted
Stock or Restricted Stock Units (collectively,
"Awards"), the deposit of Common Stock owned by the
Participant receiving such grant, and the forfeiture
of such Awards, if such deposit is not made or
maintained during the required holding period or the
applicable restricted period. Such shares of
deposited Common Stock may not be otherwise sold,
pledged or disposed of during the applicable holding
period or restricted period. The Committee may also
determine whether any shares issued upon exercise of a
Stock Option shall be restricted in any manner.
Subject to the provisions of the next succeeding
paragraph, the maximum aggregate number of shares of
Common Stock authorized under the Plan for which
Awards may be granted under the Plan is 8,000,000;
provided that if during the term of the Plan the
Company repurchases shares of Common Stock, on the
open market or otherwise and in compliance with the
rules and regulations of the Securities and Exchange
Commission, additional Awards may be granted equal to
the number of shares repurchased, subject that no more
than 4,000,000 additional shares of Common Stock shall
be authorized for Awards hereunder; and provided
further that the total number of shares of Common
Stock that shall be available for Restricted Stock and
Restricted Stock Unit Awards under the Plan shall be
limited to 4% of the total shares authorized for Award
hereunder. Upon the expiration, forfeiture,
termination or cancellation, in whole or in part, of
unexercised Stock Options, or forfeiture of Restricted
Stock or Restricted Stock Units on which no dividends
or dividend equivalents have been paid, the shares of
Common Stock subject thereto shall again be available
for Awards under the Plan.
The number of shares subject to the Plan, the
outstanding Awards and the exercise price per share of
outstanding Stock Options may be appropriately
adjusted by the Committee in the event that:
(i) the number of outstanding shares of
Common Stock shall be changed by reason of
split-ups, spin-offs, combinations or
reclassifications of shares;
(ii) any stock dividends are distributed
to the holders of Common Stock; or
(iii) the Common Stock is converted into
or exchanged for other shares as a result of
any merger or consolidation (including a sale
of assets) or other recapitalization, or
other similar events occur which affect the
value of the Common Stock.
5. ELIGIBLE PERSONS
Only persons who are employees of the Company and,
except as expressly approved by the Committee, having
three or more years of service, shall be eligible to
receive Awards under the Plan ("Participants"). No
Award shall be made to any member of the Committee or
any other non-employee director of the Company.
6. PURCHASE PRICE OF STOCK OPTIONS
The purchase price for each share of Common Stock
issuable under a Stock Option shall not be less than
100% of the Fair Market Value of the shares of Common
Stock on the date of grant. "Fair Market Value" as
used in the Plan shall equal the mean of the high and
low price of the Common Stock on the New York Stock
Exchange on the applicable date.
7. STOCK OPTION TERM AND TYPE
The term of any Stock Option as determined by the
Committee shall not exceed 10 years and one month from
the date of grant and shall expire as of the close of
business on the last day of the designated term,
unless terminated earlier under the provisions of the
Plan. Stock Option grants under the Plan shall be Non-
Qualified Stock Options governed by section 83 of the
Internal Revenue Code of 1986, as amended (the
"Code").
8. EXERCISE OF STOCK OPTIONS
Except as provided in Sections 12 and 13 (Change of
Control and Termination of Employment), each Stock
Option may be exercised only after five years of the
Participant's continued employment with the Company.
An optionee exercising a Stock Option shall give
notice to the Company of such exercise and of the
number of shares elected to be purchased prior to 4:30
P.M. CST/CDT on the day of exercise, which must be a
business day at the executive offices of the Company.
At the time of purchase, the Participant shall tender
the full purchase price of the shares purchased.
Until such payment has been made and a certificate or
certificates for the shares purchased has been issued
in the Participant's name, the Participant shall
possess no stockholder rights with respect to such
shares. Payment of such purchase price shall be made
to the Company, subject to any applicable rule or
regulation adopted by the Committee:
(i) in cash (including check, draft, money
order or wire transfer made payable to the
order of the Company);
(ii) through the delivery of shares of
Common Stock owned by the Participant; or
(iii) by a combination of (i) and (ii) above.
For determining the amount of the payment, Common
Stock delivered pursuant to (ii) or (iii) shall have a
value equal to the Fair Market Value of the Common
Stock on the date of exercise.
9. RESTRICTED STOCK AND RESTRICTED STOCK UNITS
With respect to Awards of Restricted Stock and
Restricted Stock Units, the Committee shall:
(i) select Participants to whom Awards will be
made, provided that Restricted Stock Units
may only be awarded to those employees of the
Company who are employed in a country other
than the United States;
(ii) determine the number of shares of Restricted
Stock or the number of Restricted Stock Units
to be awarded;
(iii) determine the length of the restricted
period, which shall be no less than three
years;
(iv) determine the purchase price, if any, to be
paid by the Participant for Restricted Stock
or Restricted Stock Units; and
(v) determine any restrictions other than those
set forth in this Section 9.
Any shares of Restricted Stock granted under the
Plan may be evidenced in such manner as the
Committee deems appropriate, including, without
limitation, book-entry registration or issuance of
stock certificates, and may be held in escrow.
Subject to the restrictions set forth in this
Section 9, each Participant who receives Restricted
Stock shall have all rights as a stockholder with
respect to such shares, including the right to vote
the shares and receive dividends and other
distributions.
Each Participant who receives Restricted Stock
Units shall be eligible to receive, at the
expiration of the applicable restricted period, one
share of Common Stock for each Restricted Stock
Unit awarded, and the Company shall issue to and
register in the name of each such Participant a
certificate for that number of shares of Common
Stock. Participants who receive Restricted Stock
Units shall have no rights as stockholders with
respect to such Restricted Stock Units until such
time as share certificates for Common Stock are
issued to the Participants; provided, however, that
quarterly during the applicable restricted period
for all Restricted Stock Units awarded hereunder,
the Company shall pay to each such Participant an
amount equal to the sum of all dividends and other
distributions paid by the Company during the prior
quarter on that equivalent number of shares of
Common Stock.
Subject to the provisions of Section 12, for awards
of Restricted Stock or Restricted Stock Units which
have a deposit requirement, a Participant will be
eligible to vest only in those shares of Restricted
Stock or Restricted Stock Units for which
personally-owned shares are on deposit with the
Company as of the date the Participant's employment
with the Company terminates.
10. NON-TRANSFERABILITY
Except as otherwise provided in Section 9, no shares
of Restricted Stock and no Restricted Stock Units
shall be sold, exchanged, transferred, pledged, or
otherwise disposed of during the restricted period.
No Stock Options granted under this Plan shall be
transferable by a Participant otherwise than (i) by
the Participant's last will and testament or (ii) by
the applicable laws of descent and distribution, and
such Stock Options shall be exercised during the
Participant's lifetime only by the Participant or his
or her guardian or legal representative. Other than
as set forth herein, no Award under the Plan shall be
subject to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, and any
attempt to do so shall be void.
11. WITHHOLDING TAXES
It shall be a condition to the obligation of the
Company to deliver shares upon the exercise of a Stock
Option, the vesting of Restricted Stock or Restricted
Stock Units and the corresponding issuance of shares
of unrestricted Common Stock, that the Participant pay
to the Company cash in an amount equal to all federal,
state, local and foreign withholding taxes required to
be collected in respect thereof.
Notwithstanding the foregoing, to the extent permitted
by law and pursuant to such rules as the Committee may
adopt, a Participant may authorize the Company to
satisfy any such withholding requirement by directing
the Company to withhold from any shares of Common
Stock to be issued, all or a portion of such number of
shares as shall be sufficient to satisfy the
withholding obligation, provided that in the case of
the vesting of Restricted Stock or Restricted Stock
Units, the number of shares of Common Stock to be
issued equals or exceeds 500.
12. CHANGE OF CONTROL
Each outstanding Stock Option shall become immediately
and fully exercisable for a period of 6 months
following the date of the following occurrences, each
constituting a "Change of Control":
(i) if any person (including a group as
defined in Section 13(d)(3) of the 1934 Act)
becomes, directly or indirectly, the
beneficial owner of 20% or more of the shares
of the Company entitled to vote for the
election of directors;
(ii) as a result of or in connection with any
cash tender offer, exchange offer, merger or
other business combination, sale of assets or
contested election, or combination of the
foregoing, the persons who were directors of
the Company just prior to such event cease to
constitute a majority of the Company's Board
of Directors; or
(iii) the stockholders of the Company approve an
agreement providing for a transaction in which
the Company will cease to be an independent
publicly-owned corporation or a sale or other
disposition of all or substantially all of the
assets of the Company occurs.
After such 6-month period the normal option exercise
provisions of the Plan shall govern. In the event a
Participant is terminated as an employee of the
Company within 2 years after any of the events
specified in (i), (ii) or (iii), his or her
outstanding Stock Options at that date of termination
shall become immediately exercisable for a period of 3
months.
With respect to Stock Option grants outstanding as of
the date of any such Change of Control which require
the deposit of owned Common Stock as a condition to
obtaining rights: (a) said deposit requirement shall
be terminated as of the date of the Change of Control
and any such deposited stock shall be promptly
returned to the Participant; and (b) any restrictions
on the sale of shares issued in respect of any such
Stock Option shall lapse.
In the event of a Change of Control, a Participant
shall vest in all shares of Restricted Stock and
Restricted Stock Units, effective as of the date of
such Change of Control, and any deposited shares of
Common Stock shall be promptly returned to the
Participant.
13. TERMINATION OF EMPLOYMENT
A. Termination of Employment
If the Participant's employment by the Company
terminates for any reason other than as
specified herein or in subsections B, C or D,
the Participant's Stock Options shall terminate
3 months after such termination and all shares
of Restricted Stock and all Restricted Stock
Units which are subject to restriction as of
said termination date shall be forfeited by the
Participant to the Company. In the event a
Participant's employment with the Company is
terminated for the convenience of the Company,
as determined by the Committee, the Committee,
in its sole discretion, may vest such
Participant in all or any portion of outstanding
Stock Options (which shall become exercisable)
and/or shares of Restricted Stock or Restricted
Stock Units awarded to such Participant,
effective as of the date of such termination and
if, at the time of such termination the sum of
the Participant's age and service with the
Company equals or exceeds 70, the Committee, in
its sole discretion, may also extend the period
during which such Participant's outstanding
Stock Options, except those granted to
Participants who are subject to Section 16 of
the 1934 Act, may be exercised until the
expiration of the Stock Options in accordance
with their original terms.
B. Death
If a Participant should die while employed by
the Company, any Stock Option previously granted
under this Plan may be exercised by the person
designated in such Participant's last will and
testament or, in the absence of such
designation, by the Participant's estate, to the
full extent that such Stock Option could have
been exercised by such Participant immediately
prior to death. Further, with respect to
outstanding Stock Option grants which, as of the
date of death, are not yet exercisable, any such
option grant shall vest and become exercisable
in a pro-rata amount, based on the full months
of employment completed during the full vesting
period of the Stock Option from the date of
grant to the date of death.
With respect to Stock Option grants which
require the deposit of owned Common Stock as a
condition to obtaining exercise rights, in the
event a Participant should die while employed by
the Company, said Stock Options may be exercised
as provided in the first paragraph of this
Section 13B, subject to the following special
conditions:
(i) any restrictions on the sale of shares
issued in respect of any such Stock Option
shall cease; and
(ii) any owned Common Stock deposited by the
Participant pursuant to said grant shall be
promptly returned to the person designated
in such Participant's last will and
testament or, in the absence of such
designation, to the Participant's estate,
and all requirements regarding deposit by
the Participant shall be terminated.
A Participant who dies during any applicable
restricted period shall vest in a proportionate
number of shares of Restricted Stock or
Restricted Stock Units, effective as of the date
of death. Such proportionate vesting shall be
pro-rata, based on the number of full months of
employment completed during the restricted
period prior to the date of death, as a
percentage of the applicable restricted period.
C. Retirement
The Committee shall determine, at the time of
grant, the treatment of the Stock Option upon
the retirement of the Participant. Unless other
terms are specified in the original Stock Option
grant, if the termination of employment is due
to a Participant's retirement on or after age
55, the Participant may exercise a Stock Option,
subject to the original terms and conditions of
the Stock Option, including any Stock Option
granted under the Plan prior to such retirement.
With respect to Stock Option grants which
require the deposit of owned Common Stock as a
condition to obtaining rights, any restrictions
on the sale of shares issued in respect of any
such Stock Option shall lapse at the date of any
such retirement.
A Participant who retires on or after the date
he or she attains age 65 shall fully vest in all
shares of Restricted Stock or Restricted Stock
Units, effective as of the date of retirement
(unless any such award specifically provides
otherwise).
A Participant who takes early retirement (after
age 55, but prior to age 65) during any
applicable restricted period may elect either of
the following alternatives with respect to
Restricted Stock or Restricted Stock Units
(unless any such award specifically provides
otherwise):
(a) Leave owned shares on deposit with the
Company and vest in all shares of
Restricted Stock or Restricted Stock
Units, effective as of the earlier of the
date the Participant attains age 65 or
the termination date of the applicable
restricted period; or
(b) Withdraw owned shares and vest in a
proportionate number of shares of
Restricted Stock or Restricted Stock
Units, effective as of the date the
shares on deposit are withdrawn. Such
proportionate vesting shall be pro-rata,
based on the number of full months of
employment completed during the
restricted period prior to the date of
early retirement, as a percentage of the
applicable restricted period.
D. Spin-offs
If the termination of employment is due to the
cessation, transfer, or spin-off of a complete
line of business of the Company, the Committee,
in its sole discretion, shall determine the
treatment of all outstanding Awards under the
Plan.
14. AMENDMENTS OF THE PLAN
The Plan may be terminated, modified, or amended by
the Board of Directors of the Company. The Committee
may from time to time prescribe, amend and rescind
rules and regulations relating to the Plan. Subject
to the approval of the Board of Directors, the
Committee may at any time terminate, modify, or
suspend the operation of the Plan, provided that no
action shall be taken by the Board of Directors or the
Committee without the approval of the stockholders of
the Company which would:
(i) materially increase the number of shares
which may be issued under the Plan;
(ii) materially increase the benefits accruing
to Participants under the Plan; or
(iii) materially modify the requirements as to
eligibility for participating in the Plan.
The Board of Directors shall have authority to cause
the Company to take any action related to the Plan
which may be required to comply with the provisions of
the Securities Act of 1933, as amended, the 1934 Act,
and the rules and regulations prescribed by the
Securities and Exchange Commission. Any such action
shall be at the expense of the Company.
No termination, modification, suspension, or amendment
of the Plan shall alter or impair the rights of any
Participant pursuant to a prior Award without the
consent of the Participant. There is no obligation
for uniformity of treatment of Participants under the
Plan.
15. FOREIGN JURISDICTIONS
The Committee may adopt, amend, and terminate such
arrangements, not inconsistent with the intent of the
Plan, as it may deem necessary or desirable to make
available tax or other benefits of the laws of any
foreign jurisdiction, to employees of the Company who
are subject to such laws and who receive Awards under
the Plan.
16. NOTICE
All notices to the Company regarding the Plan shall be
in writing, effective as of actual receipt by the
Company, and shall be sent to:
General Mills, Inc.
Number One General Mills Boulevard
Minneapolis, Minnesota 55426
Attention: Corporate Compensation
Effective September 20, 1993
As Amended June 27, 1994
EXHIBIT 11
<TABLE>
GENERAL MILLS, INC.
STATEMENT OF DETERMINATION OF COMMON SHARES AND
COMMON SHARE EQUIVALENTS
(in millions)
<CAPTION>
Weighted average number of
common shares and common share
equivalents assumed outstanding
For the Fiscal Years Ended
May 29, 1994 May 30, 1993 May 31, 1992
<S> <C> <C> <C>
Weighted average number of common
shares outstanding, excluding
common stock held in treasury (a) 159.1 163.1 165.7
Common share equivalents resulting
from the assumed exercise of certain
stock options (b) 2.4 * 3.3 * 3.3 *
Total common shares and common share
equivalents 161.5 166.4 169.0
<FN>
Notes:
(a) Beginning balance of common stock is adjusted for changes in the number
of shares outstanding, weighted monthly by the elapsed portion of the
period during which the shares were outstanding.
(b) Common share equivalents are computed by the "treasury stock" method.
Share amounts represent the dilutive effect of outstanding stock options
which have an option price below the average market price for the period
concerned.
* Common share equivalents are not material. As a result, earnings
per share have been computed using the weighted average of common
shares outstanding of 159.1 million, 163.1 million and 165.7 million
for fiscal 1994, 1993 and 1992, respectively.
</FN>
</TABLE>
EXHIBIT 12
<TABLE>
GENERAL MILLS, INC.
RATIO OF EARNINGS TO FIXED CHARGES
<CAPTION>
Fiscal Year Ended
May 29, May 30, May 31, May 26, May 27,
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges. . . . 6.16 7.79 8.58 7.82 7.66
</TABLE>
For purposes of computing the ratio of earnings to fixed charges,
earnings represent pretax income from continuing operations plus fixed
charges (net of capitalized interest). Fixed charges represent interest
(whether expensed or capitalized) and one-third (the proportion deemed
representative of the interest factor) of rents of continuing operations.
EXHIBIT 13
MANAGEMENT DISCUSSION OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
General Mills' financial goal is to achieve
performance that places us in the top 10 percent
of major American companies, ranked by the
combination of growth in earnings per share and
return on capital. Over the past five years, our
earnings per share have grown at a 13 percent
compound rate and our after-tax return on capital
has averaged 21 percent, both before unusual
items. Meeting our financial objectives is the
key to providing superior returns to shareholders.
Results of Operations
In 1994, sales rose 5 percent to $8.52 billion.
Earnings per share from continuing operations were
$2.95 compared to $3.10 in 1993. After-tax
earnings were $469.7 million compared to $506.1
million a year ago. Results for 1994 include an
unusual after-tax charge of $87.1 million, or 55
cents per share, to cover estimated costs
associated with the actions of an independent
licensed contractor who made an improper pesticide
substitution in treating some of our oat supplies.
See note two to the consolidated financial
statements for further discussion. We voluntarily
suspended production and shipments of oat-
containing products for a period of time during
the first quarter of 1995 while resolving this
issue; therefore, there will be a negative impact
on 1995 first-quarter volume and earnings. There
was an unusual net after-tax charge in 1993 of
$57.3 million, or 35 cents per share, primarily
for restructuring actions at consumer foods
manufacturing facilities as well as selected
restaurant unit closings.
Segment operating results are summarized in note
eighteen to the consolidated financial statements
on page 32.
Consumer Foods' sales grew 3 percent in 1994 to
$5.55 billion with domestic packaged foods unit
volume increasing 3 percent. Operating profits
decreased 1 percent excluding unusual items from
both years. In 1994, there was an unusual charge
of $146.9 million related to the improper
pesticide application as noted above. Included in
operating profits for 1993 were unusual items
totaling $33.4 million for increasing
manufacturing productivity, and our share of
streamlining and tax-reorganization costs
associated with the formation of Snack Ventures
Europe (SVE), our joint venture with PepsiCo Foods
International. Including the unusual items,
operating profits for 1994 decreased to $653.1
million.
Big G's 1994 operating profit decline reflected
the year-long cereal market promotional escalation
and the fourth-quarter impact of our pricing and
promotional actions. In a departure from recent
cereal industry practices, the Company announced
actions in April 1994 to reduce spending on
inefficient cereal couponing and price promotion,
and to reduce prices on our largest cereal brands
by an average of 11 percent. These actions were
designed to deliver consumer value more directly
and efficiently, and are anticipated to have
positive profit impact in 1995, but are expected
to be volume and market share neutral.
Yoplait yogurt, Betty Crocker Products, Gorton's
seafood and Canada Foods posted double-digit
operating profit gains for the year. SVE showed
an excellent increase in operating profits and
volume, and expanded beyond its original six
European markets in Italy.
CPW, our cereal joint venture with Nestle,
continued to demonstrate progress in existing
markets and expanded operations to Belgium,
Switzerland, Austria, Greece and Chile during the
year. Consumer Foods' operating profits include a
loss of $30.3 million in 1994 and $30.6 million in
1993 for General Mills' share of CPW's losses.
The developmental spending burden for CPW is
expected to moderate as initial operations in
European markets approach profitability in 1995.
In 1993, Consumer Foods' sales and operating
profits grew 3 percent and 11 percent (excluding
unusual items), respectively, led by Betty Crocker
Products, Big G cereals, Yoplait yogurt,
Foodservice, Gorton's seafood and Canada Foods.
Restaurants' sales grew 8 percent in 1994 to $2.96
billion. An operating profit gain of 3 percent
before unusual items in the prior year was
achieved despite disappointing results at The
Olive Garden and the effects of unprecedented
harsh winter weather. A net total of 115 new
restaurants were opened in North America. Red
Lobster's profits increased strongly as new menu
items, improved service and a new decor package
favorably influenced results. The Olive Garden's
profits were lower, due to a decline in average
unit sales that resulted primarily from not
updating the successful concept soon enough to
meet changing consumer expectations. China Coast
commenced broader market expansion in 1994.
Twenty new units were opened during the year with
plans calling for faster expansion during 1995.
Including the unusual items for last year,
operating profits increased 21 percent.
In 1993, Restaurants' sales and operating profits
before unusual items increased 8 percent and 11
percent, respectively. Results reflected good
gains by The Olive Garden and good overall
performance by Red Lobster. Together, The Olive
Garden and Red Lobster added 112 new units in
North America. Results for Canadian restaurants
improved versus the prior year, but still trailed
expectations. A charge of $30.6 million was
recorded in 1993 for closing 31 Red Lobster and
The Olive Garden units in the United States and
Canada. Including the charge, operating profits
decreased 5 percent.
Interest expense in 1994 was $115.6 million, an
increase of $27.3 million from the prior year due
to borrowing to fund purchases of common shares
for treasury. The 1993 interest expense of $88.3
million was $12.4 million greater than 1992
primarily due to funding purchases of common
shares for treasury. Interest income of $14.7
million in 1993 was $3.0 million less than the
prior year reflecting lower rates.
The effective tax rates in 1994 and 1993 were 37.6
percent and 40.0 percent, respectively. Excluding
the unusual items in both years, the rates were
38.1 percent and 38.2 percent in 1994 and 1993,
respectively. The federal tax law changes in 1993
did not have a significant impact on 1994, but are
expected to have a slight negative impact in the
future.
It is management's view that changes in the rate
of inflation have not had a significant effect on
profitability from continuing operations over the
three most recent years. Management attempts to
minimize the effects of inflation through
appropriate planning and operating practices.
The Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt
and Equity Securities," in May 1993. The American
Institute of Certified Public Accountants issued
Statement of Position 93-7, "Reporting on
Advertising Costs," in December 1993. Neither of
these statements will have a significant impact on
the Company when adopted.
Financial Condition
The Company intends to manage its businesses and
financial ratios so as to maintain a strong "A"
bond rating, which allows access to financing at
reasonable costs. Currently, General Mills'
publicly issued long-term debt carries "A1"
(Moody's Investors Services, Inc.) and "A+"
(Standard & Poor's Corporation) ratings. Our
commercial paper has ratings of "P-1" (Moody's)
and "A-1" (Standard & Poor's) in the United States
and "R-1 (middle)" in Canada from Dominion Bond
Rating Service.
General Mills' financial condition remains strong.
As important measures of financial strength, the
Company focuses on the cash flow to debt and fixed
charge coverage ratios, which were 46 percent and
6.2 times, respectively, in 1994. The purchase of
2.4 million shares of common stock for our
treasury increased debt and reduced equity by
$145.7 million, contributing to a debt to capital
ratio of 65 percent.
The composition of the Company's capital structure
is shown in the accompanying table.
<TABLE>
Capital Structure
<CAPTION>
May 29, May 30,
In Millions 1994 1993
<S> <C> <C>
Notes payable $ 433.3 $ 339.6
Current portion of long-term
debt 115.2 64.3
Long-term debt 1,417.2 1,268.3
Deferred income taxes - tax
leases 189.8 195.6
Total debt 2,155.5 1,867.8
Debt adjustments:
Leases - debt equivalent 434.4 428.8
Domestic cash equivalents - (109.4)
Marketable investments (196.1) (137.0)
Adjusted debt 2,393.8 2,050.2
Common stock subject to
put options 122.0 -
Stockholders' equity 1,151.2 1,218.5
Total capital $3,667.0 $3,268.7
</TABLE>
We selectively use derivatives to hedge financial
risks, primarily interest rate volatility and
foreign currency fluctuations. The derivatives
are generally treated as hedges for accounting
purposes. We manage our debt structure through
both issuance of fixed and floating-rate debt as
well as the use of derivatives. The debt
equivalent of our leases and deferred income taxes
related to tax leases are both fixed-rate
obligations. The table below, when reviewed in
conjunction with the capital structure table,
shows the composition of our debt structure
including the impact of derivatives.
<TABLE>
Debt Structure
<CAPTION>
In Millions May 29, 1994 May 30, 1993
<S> <C> <C> <C> <C>
Floating-rate debt $ 733.4 31% $ 534.9 26%
Fixed-rate debt 1,036.2 43 890.9 43
Leases - debt equivalent 434.4 18 428.8 21
Deferred income taxes - tax
leases 189.8 8 195.6 10
Total debt $2,393.8 100% $2,050.2 100%
</TABLE>
Commercial paper has historically been our primary
source of short-term financing. Bank credit lines
are maintained to ensure availability of short-
term funds on an as-needed basis. In June 1994,
our fee-paid credit lines were increased from
$500.0 million to $650.0 million.
Our shelf registration statement permits issuance
of up to $222.1 million net proceeds in unsecured
debt securities. The shelf registration
authorizes a medium-term note program that
provides additional flexibility in accessing the
debt markets.
Sources and uses of cash in the past three years
are shown in the accompanying table.
<TABLE>
Cash Sources (Uses)
<CAPTION>
In Millions 1994 1993 1992
<S> <C> <C> <C>
From operations $ 830.7 $ 859.9 $ 771.6
Fixed assets and other
investments-net (732.1) (714.4) (725.7)
From dispositions of
businesses - - 77.7
Change in marketable
investments (50.1) (69.7) -
Increase in outstanding
debt-net 287.7 585.7 91.0
Common stock issued 13.3 32.3 39.3
Treasury stock purchases (145.7) (420.2) (40.1)
Dividends paid (299.4) (274.8) (245.2)
Other (4.2) (7.4) (7.9)
Decrease in cash
and cash equivalents $ (99.8) $ (8.6) $ (39.3)
</TABLE>
Operations generated $29.2 million less cash in
1994 than in the previous year primarily due to an
increase in inventory levels. We purchased
various marketable investments to take advantage
of interest rate spreads.
Capital expenditures in 1995 are estimated to be
approximately $525 million; an additional $50
million capital investment is anticipated for our
joint ventures, principally CPW. In July 1994,
the Company purchased 976,000 shares of common
stock for $56.4 million as privately placed put
options were exercised. The unusual item recorded
in 1994 will be substantially included in 1995 as
cash outflow. As a result, the Company is
anticipating a net cash outflow in 1995 and will
borrow either short- or long-term, depending on
market conditions.
INDEPENDENT AUDITORS' REPORT
The Stockholders and the Board of Directors of
General Mills, Inc.:
We have audited the accompanying consolidated balance sheets of
General Mills, Inc. and subsidiaries as of May 29, 1994 and
May 30, 1993, and the related consolidated statements of earnings
and cash flows for each of the fiscal years in the three-year
period ended May 29, 1994. These consolidated financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of General Mills, Inc. and subsidiaries as of May 29,
1994 and May 30, 1993, and the results of their operations and
their cash flows for each of the fiscal years in the three-year
period ended May 29, 1994 in conformity with generally accepted
accounting principles.
As discussed in notes thirteen and fifteen to the consolidated
financial statements, the Company adopted the provisions of the
Financial Accounting Standards Board's Statements of Financial
Accounting Standards No. 112, Employers' Accounting for
Postemployment Benefits, and No. 109, Accounting for Income
Taxes, in fiscal 1994.
KPMG PEAT MARWICK
Minneapolis, Minnesota
July 29, 1994
<TABLE>
CONSOLIDATED STATEMENTS OF EARNINGS
<CAPTION>
Fiscal Year Ended
May 29, May 30, May 31,
In Millions, Except per Share Data 1994 1993 1992
<S> <C> <C> <C>
Continuing Operations:
Sales $8,516.9 $8,134.6 $7,777.8
Costs and Expenses:
Cost of sales 4,458.2 4,297.6 4,123.2
Selling, general and administrative 2,755.5 2,578.2 2,516.3
Depreciation and amortization 303.8 274.2 247.4
Interest, net 99.2 73.6 58.2
Unusual expenses (income) 146.9 67.0 (11.8)
Total Costs and Expenses 7,763.6 7,290.6 6,933.3
Earnings from Continuing Operations
before Taxes 753.3 844.0 844.5
Income Taxes 283.6 337.9 338.9
Earnings from Continuing Operations 469.7 506.1 505.6
Discontinued Operations after Taxes - - (10.0)
Cumulative Effect to May 31, 1993
of Accounting Changes .2 - -
Net Earnings $ 469.9 $ 506.1 $ 495.6
Earnings per Share:
Continuing operations $ 2.95 $ 3.10 $ 3.05
Discontinued operations - - (.06)
Cumulative effect of accounting changes - - -
Net Earnings per Share $ 2.95 $ 3.10 $ 2.99
Average Number of Common Shares 159.1 163.1 165.7
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
May 29, May 30,
In Millions 1994 1993
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ .2 $ 100.0
Receivables, less allowance for doubtful
accounts of $4.4 in 1994 and $4.3 in 1993 309.7 287.4
Inventories 488.3 439.0
Prepaid expenses and other current assets 110.6 108.2
Deferred income taxes 220.4 142.3
Total Current Assets 1,129.2 1,076.9
Land, Buildings and Equipment, at cost 3,092.6 2,859.6
Other Assets 976.5 714.3
Total Assets $5,198.3 $4,650.8
Liabilities and Equity
Current Liabilities:
Accounts payable $ 650.4 $ 617.0
Current portion of long-term debt 115.2 64.3
Notes payable 433.3 339.6
Accrued taxes 178.3 139.7
Accrued payroll 165.6 158.8
Other current liabilities 289.3 239.4
Total Current Liabilities 1,832.1 1,558.8
Long-term Debt 1,417.2 1,268.3
Deferred Income Taxes 297.4 262.0
Deferred Income Taxes -- Tax Leases 189.8 195.6
Other Liabilities 188.6 147.6
Total Liabilities 3,925.1 3,432.3
Common Stock Subject to Put Options 122.0 -
Stockholders' Equity:
Cumulative preference stock, none issued - -
Common stock, 204.2 shares issued 251.0 358.7
Retained earnings 2,457.9 2,284.5
Less common stock in treasury, at cost,
shares of 45.7 in 1994 and 43.7 in 1993 (1,334.4) (1,196.4)
Unearned compensation and other (160.2) (167.5)
Cumulative foreign currency adjustment (63.1) (60.8)
Total Stockholders' Equity 1,151.2 1,218.5
Total Liabilities and Equity $5,198.3 $4,650.8
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Fiscal Year Ended
May 29, May 30, May 31,
In Millions 1994 1993 1992
<S> <C> <C> <C>
Cash Flows - Operating Activities:
Earnings from continuing operations $469.9 $506.1 $505.6
Adjustments to reconcile earnings to cash flow:
Depreciation and amortization 303.8 274.2 247.4
Deferred income taxes (27.8) 40.8 13.5
Change in current assets and liabilities, net
of effects from business acquired (72.0) 2.5 20.0
Unusual expenses 146.9 57.3 -
Other, net 15.2 (15.0) 3.9
Cash provided by continuing operations 836.0 865.9 790.4
Cash used by discontinued operations (5.3) (6.0) (18.8)
Net Cash Provided by Operating Activities 830.7 859.9 771.6
Cash Flows - Investment Activities:
Purchases of land, buildings and equipment (559.5) (623.8) (695.3)
Investments in businesses, intangibles and
affiliates, net of dividends (140.8) (55.8) (30.6)
Purchases of marketable investments (83.8) (82.8) (6.9)
Proceeds from sale of marketable investments 33.7 13.1 6.9
Proceeds from disposal of land, buildings and
equipment 7.2 5.2 8.1
Proceeds from dispositions - - 77.7
Other, net (39.0) (40.0) (7.9)
Net Cash Used by Investment Activities (782.2) (784.1) (648.0)
Cash Flows - Financing Activities:
Increase in notes payable 93.2 207.6 150.3
Issuance of long-term debt 273.6 422.6 188.7
Payment of long-term debt (79.1) (44.5) (248.0)
Common stock issued 13.3 32.3 39.3
Purchases of common stock for treasury (145.7) (420.2) (40.1)
Dividends paid (299.4) (274.8) (245.2)
Other, net (4.2) (7.4) (7.9)
Net Cash Used by Financing Activities (148.3) (84.4) (162.9)
Decrease in Cash and Cash Equivalents (99.8) (8.6) (39.3)
Cash and Cash Equivalents - Beginning of Year 100.0 .5 39.8
Reclassification of Marketable Investment - 108.1 -
Cash and Cash Equivalents - End of Year $ .2 $100.0 $ .5
Cash Flow from Changes in Current Assets
and Liabilities:
Receivables $(17.3) $(44.7) $ 2.1
Inventories (111.0) 28.7 .6
Prepaid expenses and other current assets (5.1) 4.6 (8.9)
Accounts payable 33.2 9.0 54.5
Other current liabilities 28.2 4.9 (28.3)
Change in Current Assets and Liabilities $(72.0) $ 2.5 $ 20.0
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note One: Summary of Significant Accounting Policies
A. Principles of Consolidation
The consolidated financial statements include the following
domestic and foreign operations: parent company and 100% owned
subsidiaries, and General Mills' investment in and share of net
earnings or losses of 20-50% owned companies.
Our fiscal year ends on the last Sunday in May. Years 1994 and
1993 each consisted of 52 weeks and 1992 consisted of 53 weeks.
B. Land, Buildings, Equipment and Depreciation
Buildings and equipment are depreciated over estimated useful
lives ranging from three to 50 years, primarily using the
straight-line method. Accelerated depreciation methods are
generally used for income tax purposes.
When an item is sold or retired, the accounts are relieved of
its cost and related accumulated depreciation; the resulting
gains and losses, if any, are recognized.
C. Inventories
Inventories are valued at the lower of cost or market. Certain
domestic inventories are valued using the LIFO method, while
other inventories are generally valued using the FIFO method.
D. Intangible Assets
Goodwill represents the difference between purchase prices of
acquired companies and the related fair values of net assets
acquired and accounted for by the purchase method of accounting.
Goodwill acquired after October 1970 is amortized on a straight-
line basis over 40 years or less.
Intangible assets include an amount that offsets a minimum
liability recorded for a pension plan with assets less than
accumulated benefits as required by Financial Accounting
Standard No. 87.
The costs of patents, copyrights and other intangible assets
are amortized evenly over their estimated useful lives.
The Audit Committee of the Board of Directors annually reviews
goodwill and other intangibles. At its meeting on April 25,
1994, the Board of Directors affirmed that the remaining amounts
of these assets have continuing value.
E. Research and Development
All expenditures for research and development are charged against
earnings in the year incurred. The charges for 1994, 1993 and 1992
were $63.6 million, $60.1 million and $62.1 million, respectively.
F. Earnings per Share
Earnings per share has been determined by dividing the appropriate
earnings by the weighted average number of common shares outstanding
during the year. Common share equivalents were not material.
G. Foreign Currency Translation
For most foreign operations, local currencies are considered the
functional currency. Assets and liabilities are translated using
the exchange rates in effect at the balance sheet date. Results of
operations are translated using the average exchange rates
prevailing throughout the period. Translation effects are
accumulated in the foreign currency adjustment in stockholders'
equity.
Gains and losses from foreign currency transactions are generally
included in net earnings for the period.
H. Interest Rate Swap Agreements
Any interest rate differential on an interest rate swap is
recognized as an adjustment of interest expense or income over
the term of the agreement. We enter into these agreements with a
diversified group of highly-rated financial institutions. We are
exposed to credit loss in the event of nonperformance by the
other parties to these agreements. However, we do not anticipate
any losses.
The fair value of interest rate swaps is the estimated amount we
would receive or pay to replace the swap agreements, taking into
consideration current interest rates. This estimated amount was
immaterial at May 29, 1994.
I. Statements of Cash Flows
For purposes of the statement of cash flows, we consider all
investments purchased with a maturity of three months or less to be
cash equivalents.
Note Two: Unusual Items
In 1994, we recorded an after-tax charge of $87.1 million ($.55 per
share) to cover estimated costs associated with the actions of an
independent licensed contractor who made an improper substitution of
a pesticide in treating some of our oat supplies, a portion of which
were used in production. While the substitution presented no
consumer health or safety issues, the pesticide had not been
registered for use on oats and thus its application represented a FDA
regulatory violation. Due to a lengthy government approval process
for registration, the affected finished oat-products inventory would
be past the Company's freshness standard dates. Therefore, the
charge includes costs associated with disposition of the finished oat
products and oats inventory as well as other related expenses.
Several consumer class action lawsuits have been filed in connection
with this matter. The Company believes these lawsuits are without
merit and will not have any material impact on the financial
condition of the Company.
We recorded restructuring charges in 1993 related primarily to
restaurant closings in the U.S. and Canada, costs for increasing
Consumer Foods manufacturing productivity and efficiency, and our
share of streamlining and tax reorganization costs associated with
the formation of Snack Ventures Europe. These charges resulted in a
reduction in net earnings of $57.3 million ($.35 per share). These
actions were substantially completed in 1994.
In 1992, we recognized a gain on the sale of the stock of our
Spanish frozen food subsidiary, Preparados y Congelados Alimenticios,
S.A. (PYCASA) and also recorded charges primarily related to
restructuring of Betty Crocker packaged mixes production, European
food operations, and Consumer Foods national sales organization, and
the call of our 9 3/8% sinking fund debentures. These transactions
resulted in no net effect on earnings.
Note Three: Foreign Exchange
We selectively hedge the potential effect of foreign currency
fluctuations related to operating activities and net investments in
foreign operations by entering into foreign exchange contracts with
major financial institutions. Realized and unrealized gains and
losses on contracts that hedge operating activities are recognized
currently in net earnings. Realized and unrealized gains and losses
on contracts that hedge net investments are recognized in the
foreign currency adjustment in stockholders' equity.
The components of our net foreign investment exposure by
geographic region are as follows:
<TABLE>
<CAPTION>
May 29, May 30,
In Millions 1994 1993
<S> <C> <C>
Europe $118.3 $103.9
North/South America 43.3 41.7
Asia 12.1 13.0
Total exposure 173.7 158.6
After-tax hedges (30.2) (134.1)
Net exposure $143.5 $ 24.5
</TABLE>
At May 29, 1994, we had forward contracts maturing in 1995 to sell
$59.5 million and purchase $7.5 million of foreign currencies. We
also had foreign currency put options expiring in 1995 of $26.8
million. The fair value of these contracts is based on third-party
quotes and is immaterial at May 29, 1994.
Note Four: Acquisition and Investments
We purchased the Colombo yogurt business for approximately $75.0
million from a U.S. subsidiary of Bongrain S.A. effective December
1993. Colombo has a refrigerated yogurt business in the Northeast
and is a leading producer of soft frozen yogurt, as well as premium
hard pack frozen yogurt. The transaction did not have any material
effect on our 1994 earnings.
During 1994 and 1993, we made capital contributions and advances of
$48.3 million and $66.1 million, respectively, to Cereal Partners
Worldwide (CPW), our joint venture with Nestle, S.A.
In 1993, we entered into a joint venture, Snack Ventures Europe
(SVE), with PepsiCo Foods International to merge six existing
Continental European snack operations (three from each company) into
one company to develop, manufacture and market snack foods. We own
40.5 percent of SVE. The merger was effective July 1992. We
reclassified the net individual assets and liabilities of our
operations to investment in affiliates and excluded the noncash
transaction from our statement of cash flows.
Note Five: Inventories
The components of inventories are as follows:
<TABLE>
<CAPTION>
May 29, May 30,
In Millions 1994 1993
<S> <C> <C>
Raw materials, work in process and supplies $245.0 $206.2
Finished goods 249.3 252.6
Grain 47.0 40.5
Reserve for LIFO valuation method (53.0) (60.3)
Total inventories $488.3 $439.0
</TABLE>
At May 29, 1994 and May 30, 1993, respectively, inventories of
$245.1 million and $244.5 million were valued at LIFO.
Note Six: Balance Sheet Information
The components of certain balance sheet items are as follows:
<TABLE>
<CAPTION>
May 29, May 30,
In Millions 1994 1993
<S> <C> <C>
Land, Buildings and Equipment:
Land $ 360.9 $ 302.3
Buildings 1,655.6 1,452.6
Equipment 2,373.8 2,048.1
Construction in progress 299.5 436.5
Total land, buildings and equipment 4,689.8 4,239.5
Less accumulated depreciation (1,597.2) (1,379.9)
Net land, buildings and equipment $3,092.6 $2,859.6
Other Assets:
Prepaid pension $ 288.0 $ 257.4
Marketable investments, at cost 196.1 137.0
Investments in and advances to affiliates 188.3 163.9
Intangible assets 157.3 70.6
Miscellaneous 146.8 85.4
Total other assets $ 976.5 $ 714.3
</TABLE>
Based on quoted market prices, the fair value of the marketable
investments was $231.4 million at May 29, 1994 and $186.9
million at May 30, 1993.
We have interest rate and currency swap agreements related to
marketable investments that convert fixed interest rates to
variable interest rates and foreign currencies to U.S. dollars
on a notional amount of $81.9 million. These agreements mature
from December 1994 to January 2001.
Note Seven: Notes Payable
The components of notes payable are as follows:
<TABLE>
<CAPTION>
May 29, May 30,
In Millions 1994 1993
<S> <C> <C>
U.S. commercial paper $339.2 $255.5
Canadian commercial paper 83.3 75.9
Financial institutions 260.8 208.2
Amount reclassified to long-term debt (250.0) (200.0)
Total notes payable $433.3 $339.6
</TABLE>
To ensure availability of funds, we maintain bank credit lines
sufficient to cover our outstanding commercial paper. As of
May 29, 1994, we had $500.0 million fee-paid lines and $179.4
million uncommitted, no-fee lines available in the U.S. and Canada.
In addition, other foreign subsidiaries had unused credit lines of
$37.1 million.
We have a revolving credit agreement expiring in 1999 that
provides for the fee-paid credit lines. This agreement provides
us with the ability to refinance short-term borrowings on a long-
term basis, and therefore we have reclassified a portion of our
notes payable to long-term debt.
We occasionally enter into swap agreements to lock in interest
rates on notes payable that may result in fixed rates higher than
short-term rates. At May 29, 1994 we had interest rate swap
agreements on a notional amount of $145.0 million that convert an
average interest rate of 2.8% to an average interest rate of
5.7%. These agreements mature from June 1994 to August 1994. At
May 30, 1993 we had interest rate swap agreements on a notional
amount of $169.0 million that converted an average interest rate
of 3.3% to an average interest rate of 7.9%.
We purchased and sold interest rate cap agreements, expiring in
May 1995, on a notional amount of $200.0 million with strike
rates of 5.0% and 6.5%, respectively. These agreements limit our
exposure to an increase in short-term interest rates. If rates
are between 5.0-6.5%, our rate is limited to 5.0%; if rates are
greater than 6.5%, our rate will be 150 basis points less than
market rates until the agreements expire.
Note Eight: Long-term Debt
<TABLE>
<CAPTION>
May 29, May 30,
In Millions 1994 1993
<S> <C> <C>
4.3% to 9.1% medium-term notes,
due 1994 to 2033 $1,080.3 $ 918.3
Zero coupon notes, yield 11.1%, $327.0
due August 15, 2013 41.4 47.1
ESOP loan guaranty, variable rate (3.7% at
May 29, 1994), due December 31, 2007 50.0 50.0
8.3% ESOP loan guaranty,
due through June 30, 2007 78.3 82.0
Zero coupon notes, yield 11.7%, $64.4
due August 15, 2004 20.2 18.0
Notes payable, reclassified 250.0 200.0
Other 12.2 17.2
1,532.4 1,332.6
Less amounts due within one year (115.2) (64.3)
Total long-term debt $1,417.2 $1,268.3
</TABLE>
Our shelf registration statement permits the issuance of up to
$222.1 million net proceeds in unsecured debt securities to
reduce short-term debt and for other general corporate purposes.
This registration includes a medium-term note program that
allows us to issue debt quickly for various amounts and at
various rates and maturities.
In 1994, we issued $217.9 million of debt under our medium-
term note program with maturities from one to 40 years and
interest rates from 4.3% to 7.3%. In 1993, $366.7 million of
debt was issued under this program with maturities from one to
30 years and interest rates from 3.5% to 8.6%.
We had interest rate swap agreements that convert an average
interest rate of 5.5% to an average interest rate of 3.2% on
$162.9 million notional amount of medium-term notes. These
agreements mature from October 1994 to January 1999. In 1994,
we sold a swap option that gives the holder the right, if
exercised, to receive a fixed payment of 6.8% and pay a floating
rate based on commercial paper on a notional amount of $21.3
million from February 1995 until February 1997. At May 30, 1993
we had interest rate swap agreements that converted an average
interest rate of 5.4% to an average interest rate of 2.9% on
$120.0 million notional amount of medium-term notes.
In 1992, we called our 9 3/8% sinking fund debentures due
March 1, 2009 (see note two). This transaction resulted in a
decrease in net earnings of $3.5 million ($.02 per share).
The Company has guaranteed the debt of the Employee Stock
Ownership Plans; therefore, the loans are reflected on our
consolidated balance sheets as long-term debt with a related
offset in stockholders' equity, "Unearned compensation and
other."
Based on borrowing rates currently available for debt with
similar terms and average maturities, the fair value of our long-
term debt, excluding current portion, was $1,476.4 million at
May 29, 1994 and $1,413.4 million at May 30, 1993.
The sinking fund and principal payments due on long-term debt
are (in millions) $115.2, $72.0, $94.2, $101.0 and $99.7 in
years ending 1995, 1996, 1997, 1998 and 1999, respectively. The
notes payable that are reclassified under our revolving credit
agreement are not included in these principal payments.
Our marketable investments include zero coupon U.S. Treasury
securities. These investments are intended to provide the funds
for the payment of principal and interest for the zero coupon
notes due August 15, 2013 and 2004.
Note Nine: Stock Options
The following table contains information on stock options:
<TABLE>
<CAPTION>
Average Option
Shares Price per Share
<S> <C> <C>
Granted
1994 4,868,098 $63.22
1993 3,384,144 66.64
1992 2,574,008 58.29
Exercised
1994 562,714 $31.08
1993 1,962,063 22.90
1992 1,026,760 19.64
Expired
1994 459,800 $62.56
1993 288,907 61.63
1992 175,804 39.12
Outstanding at year end
1994 18,009,478 $49.52
1993 14,163,894 44.50
1992 13,030,720 35.88
Exercisable at year end
1994 10,278,466 $38.73
1993 9,488,948 36.23
1992 8,938,384 28.71
</TABLE>
A total of 10,622,403 shares (including 2,535,750 shares for
salary replacement options and 321,164 shares for restricted
stock) are available for grants of options or restricted stock to
employees under our 1990 and 1993 stock plans through October 1,
1998. An additional 3,083,400 shares are available for grants on
a one-for-one basis as common stock shares are repurchased by the
Company. The options may be granted at a price not less than
100% of fair market value on the date the option is granted.
Options now outstanding include some granted under the 1980, 1984
and 1988 option plans, under which no further options or other
rights may be granted. All options expire within 10 years plus
one month after the date of grant. The plans provide for full
vesting of the option in the event there is a change of control.
The 1993 plan permits awards of restricted stock to key
employees subject to a restricted period and a purchase price, if
any, to be paid by the employee as determined by the Compensation
Committee of the Board of Directors. Most of the restricted
stock awards require the employee to deposit personally owned
shares (on a one-for-one basis) with the Company during the
restricted period. In 1994, grants of 95,685 shares of
restricted stock were made and on May 29, 1994, there were
188,822 of such shares outstanding.
The 1988 plan also permitted the granting of performance units
corresponding to stock options granted. The value of performance
units will be determined by return on equity and growth in
earnings per share measured against preset goals over three-year
performance periods. For seven years after a performance period,
holders may elect to receive the value of performance units (with
interest) as an alternative to exercising corresponding stock
options. On May 29, 1994, there were 2,894,984 outstanding
options with corresponding performance units or performance unit
accounts.
A total of 52,300 shares are available for grants of options and
restricted stock to non-employee directors until September 30, 1995
under a separate 1990 stock plan. Each newly elected non-employee
director is granted an option to purchase 2,500 shares at fair market
value on the date of grant. Options expire 10 years after the date
of grant. Each year 400 shares of restricted stock will be awarded
to each non-employee director, restricted until the later of the
expiration of one year or completion of service on the Board of Directors.
Note Ten: Stockholders' Equity and Put Options
<TABLE>
<CAPTION>
$.10 Par Value Common Stock Cumulative
(One Billion Shares Authorized) Unearned Foreign
In Millions, Except Issued Treasury Retained Compensation Currency
per Share Data Shares Amount Shares Amount Earnings and Other Adjustment Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at May 26, 1991 204.2 $320.2 (39.1) $ (777.4) $1,795.5 $(177.6) $(47.2) $1,113.5
Net earnings 495.6 495.6
Cash dividends declared
($1.48 per share), net
of income taxes of $3.1 (242.1) (242.1)
Stock option, profit
sharing and ESOP plans 23.4 1.1 21.5 44.9
Shares purchased on open
market (.7) (47.0) (47.0)
Unearned compensation related
to restricted stock awards (4.3) (4.3)
Earned compensation 9.6 9.6
Translation adjustments, net
of income taxes of $.7 (6.7) (6.7)
Amount charged to gain on
sale of foreign operation 7.4 7.4
Balance at May 31, 1992 204.2 343.6 (38.7) (802.9) 2,049.0 (172.3) (46.5) 1,370.9
Net earnings 506.1 506.1
Cash dividends declared ($1.68
per share), net of income
taxes of $4.2 (270.6) (270.6)
Stock option, profit sharing
and ESOP plans 15.1 1.3 19.7 34.8
Shares purchased on open
market (6.3) (413.2) (413.2)
Unearned compensation related
to restricted stock awards (3.2) (3.2)
Earned compensation 9.6 9.6
Minimum pension liability
adjustment (1.6) (1.6)
Translation adjustments, net
of income tax benefit of $2.0 (14.3) (14.3)
Balance at May 30, 1993 204.2 358.7 (43.7) (1,196.4) 2,284.5 (167.5) (60.8) 1,218.5
Net earnings 469.9 469.9
Cash dividends declared ($1.88
per share), net of income
taxes of $2.9 (296.5) (296.5)
Stock option, profit sharing
and ESOP plans 8.0 .4 7.5 15.5
Shares purchased on open market (2.4) (145.7) (145.7)
Put option premium 6.3 .2 6.5
Transfer of put options (122.0) (122.0)
Unearned compensation related
to restricted stock awards (3.9) (3.9)
Earned compensation 9.6 9.6
Minimum pension liability
adjustment 1.6 1.6
Translation adjustments, net
of income taxes of $4.2 (2.3) (2.3)
Balance at May 29, 1994 204.2 $251.0 (45.7) $(1,334.4) $2,457.9 $(160.2) $(63.1) $1,151.2
</TABLE>
Cumulative preference stock of 5.0 million shares, without par value,
is authorized but unissued.
We have a shareholder rights plan that entitles each
outstanding share of common stock to one-fourth of a right.
Each right entitles the holder to purchase one one-hundredth
of a share of cumulative preference stock (or, in certain
circumstances, common stock or other securities), exercisable
upon the occurrence of certain events. The rights are not
transferable apart from the common stock until a person or
group has acquired 20% or more, or makes a tender offer for
20% or more, of the common stock. If the Company is then
acquired in a merger or other business combination
transaction, each right will entitle the holder (other than
the acquiring company) to receive, upon exercise, common stock
of either the Company or the acquiring company having a value
equal to two times the exercise price of the right. The
rights are redeemable by the Board in certain circumstances
and expire on March 7, 1996. At May 29, 1994, there were 39.6
million rights issued and outstanding.
The Board of Directors has authorized the repurchase, from
time to time, of common stock for our treasury, provided that
the number of shares held in treasury shall not exceed 60.0
million.
Through private placements, we issued put options that
entitle the holder to sell shares of our common stock to us,
at a specified price, if the holder exercises the option. In
1994, we issued put options for 2.6 million shares for $6.5
million in premiums. As of May 29, 1994, put options for 2.2
million shares remain outstanding at strike prices ranging
from $50.00 to $59.99 per share with exercise dates from July
1994 to March 1995. The amount related to our potential
obligation has been transferred from stockholders' equity to
"Common Stock Subject to Put Options."
Note Eleven: Interest Expense
The components of net interest expense are as follows:
<TABLE>
<CAPTION>
Fiscal Year
In Millions 1994 1993 1992
<S> <C> <C> <C>
Interest expense $121.7 $99.8 $89.5
Capitalized interest (6.1) (11.5) (13.6)
Interest income (16.4) (14.7) (17.7)
Interest expense, net $ 99.2 $73.6 $58.2
</TABLE>
During 1994, 1993 and 1992, we paid interest (net of amount
capitalized) of $99.0 million, $77.0 million and $70.7 million,
respectively.
Note Twelve: Retirement Plans
We have defined benefit plans covering most employees. Benefits
for salaried employees are based on length of service and final
average compensation. The hourly plans include various monthly
amounts for each year of credited service. Our funding policy
is consistent with the funding requirements of federal law and
regulations. Our principal plan covering salaried employees has
a provision that any excess pension assets would be vested in
plan participants if the plan is terminated within five years of
a change in control. Plan assets consist principally of listed
equity securities and corporate obligations, and U.S. government
securities.
Components of net pension income are as follows:
<TABLE>
<CAPTION>
Fiscal Year
Expense (Income) in Millions 1994 1993 1992
<S> <C> <C> <C>
Service cost--benefits earned $ 19.1 $ 14.7 $ 14.2
Interest cost on projected benefit obligation 57.8 52.6 51.2
Actual return on plan assets (50.5) (136.6) (75.0)
Net amortization and deferral (47.0) 38.3 (26.1)
Net pension expense (income) $(20.6) $(31.0) $(35.7)
</TABLE>
The weighted-average discount rate and rate of increase in future
compensation levels used in determining the actuarial present value
of the benefit obligations were 8.8% and 4.6% in 1994, and 8.5% and
5.1% in 1993, respectively. The expected long-term rate of return
on assets was 10.4%.
The funded status of the plans and the amount recognized on the
consolidated balance sheets (as determined as of May 31, 1994
and 1993) are as follows:
<TABLE>
<CAPTION>
May 29, 1994 May 30, 1993
Assets Accumulated Assets Accumulated
Exceed Benefits Exceed Benefits
Accumulated Exceed Accumulated Exceed
In Millions Benefits Assets Benefits Assets
<S> <C> <C> <C> <C>
Actuarial present value of
benefit obligations:
Vested benefits $572.7 $ 24.1 $545.5 $ 12.1
Nonvested benefits 55.9 3.3 55.0 2.3
Accumulated benefit obligations 628.6 27.4 600.5 14.4
Projected benefit obligation 688.4 30.3 680.9 18.8
Plan assets at fair value 920.8 10.7 921.6 -
Plan assets in excess of
(less than) the projected
benefit obligation 232.4 (19.6) 240.7 (18.8)
Unrecognized prior service cost 31.4 2.9 40.1 .3
Unrecognized net loss 148.1 10.7 125.3 6.0
Recognition of minimum liability - (10.1) - (10.7)
Unrecognized transition (asset)
liability (130.6) 6.2 (148.7) 8.8
Prepaid (accrued) pension cost $281.3 $ (9.9) $257.4 $(14.4)
</TABLE>
We have defined contribution plans covering salaried and non-
union employees. Contributions are determined by matching a
percentage of employee contributions. Such plans had net assets
of $665.3 million at May 31, 1994. Expense recognized in 1994,
1993 and 1992 was $6.7 million, $9.6 million and $12.7 million,
respectively.
Within our defined contribution plans we have Employee Stock
Ownership Plans (ESOPs). These ESOPs borrowed funds guaranteed
by the Company with terms described in the long-term debt
footnote, as well as originally borrowed $35.0 million from the
Company at a variable interest rate. At May 29, 1994, the
interest rate was 4.6% with outstanding amounts of $21.0 million
due December 2014 and $7.2 million with sinking fund payments to
June 2015. Compensation expense is recognized as contributions
are accrued. Our contributions to the plans, plus the dividends
accumulated on the common stock held by the ESOPs, are used to
pay principal, interest and expenses of the plans. As loan
payments are made, common stock is allocated to ESOP
participants. In 1994, 1993 and 1992, the ESOPs incurred
interest expense of $9.0 million, $9.6 million and $11.3 million,
respectively, and used dividends received of $8.9 million, $8.2
million and $7.8 million and contributions received from the
Company of $7.4 million, $7.4 million and $7.1 million,
respectively, to pay principal and interest on their debt.
Note Thirteen: Other Postretirement and Postemployment Benefits
We sponsor several plans that provide health care benefits to
the majority of our retirees. The salaried plan is
contributory with retiree contributions based on years of
service.
We fund plans for certain employees and retirees on an annual
basis. In 1994, 1993 and 1992 we contributed $38.3 million,
$30.6 million and $4.2 million, respectively. Plan assets
consist principally of listed equity securities and U.S.
government securities.
Components of the postretirement health care expense are as
follows:
<TABLE>
<CAPTION>
Fiscal Year
Expense (Income) in Millions 1994 1993 1992
<S> <C> <C> <C>
Service cost--benefits earned $ 5.6 $ 3.6 $3.5
Interest cost on accumulated benefit obligation 14.0 11.0 9.7
Actual return on plan assets (1.5) (3.9) (3.0)
Net amortization and deferral (4.5) (1.0) (1.2)
Net postretirement expense $13.6 $ 9.7 $9.0
</TABLE>
The funded status of the plans and the amount recognized on our consolidated
balance sheets are as follows:
<TABLE>
<CAPTION>
May 29, 1994 May 30, 1993
Assets Accumulated Accumulated
Exceed Benefits Benefits
Accumulated Exceed Exceed
In Millions Benefits Assets Assets
<S> <C> <C> <C>
Accumulated benefit obligations:
Retirees $ 36.3 $48.7 $ 80.0
Fully eligible active employees 12.7 8.0 19.3
Other active employees 27.0 48.5 70.4
Accumulated benefit obligations 76.0 105.2 169.7
Plan assets at fair value 89.3 7.4 60.8
Accumulated benefit obligations in excess
of (less than) plan assets (13.3) 97.8 108.9
Unrecognized prior service cost .1 12.2 14.3
Unrecognized net loss (28.1) (27.7) (51.1)
Accrued (prepaid) postretirement benefits $(41.3) $82.3 $ 72.1
</TABLE>
The discount rates used in determining the actuarial present value of the
benefit obligations were 8.8% and 8.5% in 1994 and 1993, respectively.
The expected long-term rate of return on assets was 10%.
The health care cost trend rate increase in the per capita charges for
benefits ranged from 6.2% to 9.8% for 1995 depending on the medical service
category. The rates gradually decrease to 4.4% to 5.7% for 2007 and remain
at that level thereafter. If the health care cost trend rate increased by
one percentage point in each future year, the aggregate of the service and
interest cost components of postretirement expense would increase for 1994
by $3.1 million and the accumulated benefit obligation as of May 29, 1994
would increase by $24.6 million.
In 1994, we adopted Statement of Financial Accounting
Standards (SFAS) No. 112, "Employers' Accounting for
Postemployment Benefits." The cumulative effect as of May 31,
1993 of changing to the accrual basis for severance and
disability costs was a decrease in net earnings of $17.3
million ($.11 per share).
Note Fourteen: Profit-sharing Plans
We have profit-sharing plans to provide incentives to key
individuals who have the greatest potential to contribute to
current earnings and successful future operations. These plans
were approved by the Board of Directors upon recommendation of
the Compensation Committee. The awards under these plans depend
on profit performance in relation to pre-established goals. The
plans are administered by the Compensation Committee, which
consists solely of outside directors. Profit-sharing expense,
including performance unit accruals, was $1.7 million, $7.3
million and $8.8 million in 1994, 1993 and 1992, respectively.
Note Fifteen: Income Taxes
We adopted SFAS No. 109, "Accounting for Income Taxes" as of
May 31, 1993. The adoption of SFAS 109 changed our method of
accounting for income taxes from the deferred method to the
asset and liability method. Deferred income taxes reflect the
differences between assets and liabilities recognized for
financial reporting purposes and amounts recognized for tax
purposes measured using the current enacted tax rates. The
cumulative effect of adoption was an increase in net earnings of
$17.5 million ($.11 per share).
The components of earnings before income taxes and the income
taxes thereon are as follows:
<TABLE>
<CAPTION>
Fiscal Year
In Millions 1994 1993 1992
<S> <C> <C> <C>
Earnings (loss) before income taxes:
U.S. $746.4 $887.2 $818.3
Foreign 6.9 (43.2) 26.2
Total earnings before income taxes $753.3 $844.0 $844.5
Income taxes:
Current:
Federal $246.5 $243.1 $254.0
State and local 60.9 60.2 55.1
Foreign 4.0 (6.2) 16.3
Total current 311.4 297.1 325.4
Deferred (principally U.S.) (27.8) 40.8 13.5
Total income taxes $283.6 $337.9 $338.9
</TABLE>
During 1994, income tax benefits of $3.5 million were allocated
to stockholders' equity. These benefits were attributable to
the exercise of employee stock options, dividends paid on
unallocated ESOP shares and translation adjustments.
During 1994, 1993 and 1992, we paid income taxes of $273.8
million, $268.3 million and $326.4 million, respectively.
In prior years we purchased certain income tax items from other
companies through tax lease transactions. Total current income
taxes charged to earnings reflect the amounts attributable to
operations and have not been materially affected by these tax
leases. Actual current taxes payable on 1994, 1993 and 1992
operations were increased by approximately $10 million, $10
million and $8 million, respectively, due to the effect of tax
leases. These tax payments do not affect taxes for statement of
earnings purposes since they repay tax benefits realized in
prior years. The repayment liability is classified as "Deferred
Income Taxes - Tax Leases."
The following table reconciles the U.S. statutory income tax
rate with the effective income tax rate:
<TABLE>
<CAPTION>
Fiscal Year
1994 1993 1992
<S> <C> <C> <C>
U.S. statutory rate 35.0% 34.0% 34.0%
State and local income taxes, net of
federal tax benefits 5.0 5.2 4.9
Other, net (2.4) .8 1.2
Effective income tax rate 37.6% 40.0% 40.1%
</TABLE>
The tax effects of temporary differences that give rise to
deferred tax assets and liabilities at May 29, 1994 are as
follows:
<TABLE>
<CAPTION>
In Millions
<S> <C>
Accrued liabilities $129.1
Unusual charge for oats 59.8
Compensation and employee benefits 59.6
Disposition liabilities 37.5
Foreign tax loss carryforward 16.2
Other 13.6
Gross deferred tax assets 315.8
Depreciation 219.5
Prepaid pension asset 112.0
Intangible assets 12.7
Other 37.5
Gross deferred tax liabilities 381.7
Valuation allowance 11.1
Net deferred tax liability $ 77.0
</TABLE>
As of May 29, 1994, we have foreign operating loss carryovers
for tax purposes of $40.9 million, which will expire as follows
if not offset against future taxable income: $11.0 million in
1998, $9.3 million in 1999, $10.9 million in 2000 and $9.7
million in 2001.
We have not recognized a deferred tax liability for unremitted
earnings of $60.1 million for our foreign operations because we
do not expect those earnings to become taxable to us in the
foreseeable future. A determination of the potential liability
is not practicable. If a portion were to be remitted, we
believe income tax credits would substantially offset any
resulting tax liability.
Note Sixteen: Leases and Other Commitments
An analysis of rent expense by property leased follows:
<TABLE>
<CAPTION>
Fiscal Year
In Millions 1994 1993 1992
<S> <C> <C> <C>
Restaurant space $41.2 $39.5 $33.9
Warehouse space 13.8 13.0 12.6
Equipment 10.6 10.6 8.3
Other 3.9 5.5 5.4
Total rent expense $69.5 $68.6 $60.2
</TABLE>
Some leases require payment of property taxes, insurance and
maintenance costs in addition to the rent payments. Contingent
and escalation rent in excess of minimum rent payments and
sublease income netted in rent expense were insignificant.
Noncancelable future lease commitments are (in millions) $60.6
in 1995, $56.2 in 1996, $52.0 in 1997, $46.9 in 1998, $43.6 in
1999 and $236.5 after 1999, with a cumulative total of $495.8.
We are contingently liable under guarantees and comfort
letters for $88.5 million. The guarantees and comfort
letters are issued to support borrowing arrangements,
primarily for our joint ventures.
Note Seventeen: Discontinued Operations
We recorded a net after-tax charge related to previously discontinued
operations of $10.0 million ($.06 per share) in 1992. This charge
primarily related to a lease adjustment with the
R. H. Macy Company, which is operating under bankruptcy law
protection.
Note Eighteen: Segment Information
<TABLE>
<CAPTION>
Unallocated
Consumer Corporate Consolidated
In Millions Foods Restaurants Items (a) Total
<S> <C> <C> <C> <C>
Sales
1994 $5,553.9 $2,963.0 $8,516.9
1993 5,397.2 2,737.4 8,134.6
1992 5,233.8 2,544.0 7,777.8
Operating Profits
1994 653.1(b) 219.4 $(119.2) 753.3
1993 772.6(c) 181.4(c) (110.0) 844.0
1992 744.3(d) 190.8 (90.6) 844.5
Identifiable Assets
1994 2,820.8 1,834.9 542.6 5,198.3
1993 2,576.4 1,605.0 469.4 4,650.8
1992 2,481.2 1,419.3 404.5 4,305.0
Capital Expenditures
1994 207.7 343.3 8.5 559.5
1993 321.6 301.2 1.0 623.8
1992 397.1 297.0 1.2 695.3
Depreciation and Amortization
1994 176.6 125.4 1.8 303.8
1993 155.8 116.8 1.6 274.2
1992 142.2 101.0 4.2 247.4
</TABLE>
<TABLE>
<CAPTION>
Unallocated
Corporate Consolidated
U.S.A. Foreign Items (a) Total
<S> <C> <C> <C> <C>
Sales
1994 $8,172.1 $344.8 $8,516.9
1993 7,719.4 415.2 8,134.6
1992 7,039.6 738.2 7,777.8
Operating Profits
1994 875.6(b) (3.1) $(119.2) 753.3
1993 997.1(c) (43.1)(c) (110.0) 844.0
1992 896.3(d) 38.8 (d) (90.6) 844.5
Identifiable Assets
1994 4,297.6 358.1 542.6 5,198.3
1993 3,828.3 353.1 469.4 4,650.8
1992 3,452.2 448.3 404.5 4,305.0
<FN>
(a) Corporate expenses reported here include net interest expense
and general corporate expenses.
(b) Consumer Foods operating profits include a charge of $146.9
million for unusual items described in note two.
(c) Consumer Foods and Restaurants operating profits include a
charge of $33.4 million and $30.6 million, respectively,
(U.S.A. $35.5 million; Foreign $28.5 million) for unusual
items.
(d) Consumer Foods operating profits include a net gain of $17.5
million (U.S.A. $20.5 million loss; Foreign $38.0 million
gain) for unusual items.
</FN>
</TABLE>
<TABLE>
Note Nineteen: Quarterly Data (unaudited)
Summarized quarterly data for 1994 and 1993 follows:
<CAPTION>
First Second Third
In Millions, Except per Share Quarter Quarter Quarter
and Market Price Amounts 1994 1993 1994 1993 1994 1993
<S> <C> <C> <C> <C> <C> <C>
Sales $2,089.8 2,019.6 $2,182.2 $2,096.9 $2,101.4 $2,010.7
Gross profit (a) 1,011.7 977.3 1,055.1 1,016.6 994.6 941.4
Earnings from operations 165.6 159.6 140.7 138.1 145.0 140.9(b)
Earnings per share from operations 1.04 .97 .88 .85 .91 .86
Cumulative effect of accounting changes .2 - - - - -
Net earnings 165.8 159.6 140.7 138.1 145.0 140.9
Net earnings per share 1.04 .97 .88 .85 .91 .86
Dividends per share .47 .42 .47 .42 .47 .42
Market price of common stock:
High 68 3/4 71 1/8 67 3/4 73 7/8 63 72 1/2
Low 56 7/8 62 59 5/8 64 1/2 55 1/2 65
</TABLE>
<TABLE>
<CAPTION>
Fourth Total
In Millions, Except per Share Quarter Year
and Market Price Amounts 1994 1993 1994 1993
<S> <C> <C> <C> <C>
Sales $2,143.5 $2,007.4 $8,516.9 $8,134.6
Gross profit (a) 997.3 901.7 4,058.7 3,837.0
Earnings from operations 18.4(c) 67.5(d) 469.7 506.1
Earnings per share from operations .12 .42 2.95 3.10
Cumulative effect of accounting changes - - .2 -
Net earnings 18.4 67.5 469.9 506.1
Net earnings per share .12 .42 2.95 3.10
Dividends per share .47 .42 1.88 1.68
Market price of common stock:
High 57 74 1/8 68 3/4 74 1/8
Low 49 7/8 64 1/8 49 7/8 62
<FN>
(a) Before charges for depreciation.
(b) Includes an after-tax loss of $8.7 million ($.05 per share) for a restructuring charge for SVE.
(c) Includes an after-tax loss of $87.1 million ($.55 per share) related to the improper treatment of oat supplies.
(d) Includes an after-tax loss of $47.0 million ($.29 per share) for restructuring charges related to restaurant closings and
Consumer Foods manufacturing costs.
</FN>
</TABLE>
ELEVEN YEAR FINANCIAL SUMMARY AS REPORTED
<TABLE>
<CAPTION>
May 29, May 30, May 31, May 26, May 27,
In Millions, Except per Share Data 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Financial Results
Earnings (loss) per share (a) $ 2.95 $ 3.10 $ 2.99 $ 2.87 $ 2.32
Return on average equity 37.7% 39.1% 39.9% 49.2% 49.5%
Dividends per share (a) 1.88 1.68 1.48 1.28 1.10
Sales 8,516.9 8,134.6 7,777.8 7,153.2 6,448.3
Costs and expenses:
Cost of sales 4,458.2 4,297.6 4,123.2 3,722.1 3,485.1
Selling, general and administrative 2,902.4 2,645.2 2,504.5 2,386.0 2,138.0
Depreciation and amortization 303.8 274.2 247.4 218.4 180.1
Interest 99.2 73.6 58.2 61.1 32.4
Earnings before income taxes 753.3(b) 844.0(c) 844.5 765.6 612.7
Net earnings (loss) 469.9 506.1 495.6 472.7 381.4
Net earnings (loss) as a percent of sales 5.5% 6.2% 6.4% 6.6% 5.9%
Weighted average no. of common shares(a) 159.1 163.1 165.7 164.5 164.4
Taxes (income, payroll, property, etc.)
per share (a) 2.98 3.14 3.09 2.77 2.29
Financial Position
Total assets 5,198.3 4,650.8 4,305.0 3,901.8 3,289.5
Land, buildings and equipment, net 3,092.6 2,859.6 2,648.6 2,241.3 1,934.5
Working capital at year end (702.9) (481.9) (337.1) (190.1) (263.1)
Long-term debt, excluding current portion 1,417.2 1,268.3 920.5 879.0 688.5
Stockholders' equity 1,151.2 1,218.5 1,370.9 1,113.5 809.7
Stockholders' equity per share (a) 7.26 7.59 8.28 6.74 4.96
Other Statistics
Cash provided by operations 836.0 865.9 790.4 548.6 657.1
Total dividends 299.4 274.8 245.2 210.6 180.8
Gross capital expenditures 559.5 623.8 695.3 554.6 540.0
Research and development 63.6 60.1 62.1 57.0 48.2
Advertising media expenditures 409.5 395.4 426.8 419.6 394.9
Wages, salaries and employee benefits 1,490.0 1,433.2 1,398.5 1,331.6 1,171.5
Number of employees 125,670 121,290 111,501 108,077 97,238
Accumulated LIFO reserve 53.0 60.3 67.0 75.9 71.4
Common stock price range (a) 68 3/4 74 1/8 75 7/8 60 7/8 39 5/8
49 7/8 62 54 1/4 37 7/8 31 3/8
<FN>
(a) Year 1990 has been adjusted for the two-for-one stock split in
November 1990.
(b) Includes pretax unusual expense of $146.9 million.
(c) Includes pretax restructuring charge of $67.0 million.
</FN>
</TABLE>
FINANCIAL DATA FOR CONTINUING OPERATIONS
<TABLE>
<CAPTION>
Fiscal Year Ended
In Millions, Except May 29, May 30, May 31, May 26, May 27,
per Share Data 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Sales $8,516.9 $8,134.6 $7,777.8 $7,153.2 $6,448.3
Earnings after taxes 469.7 506.1 505.6 464.2 373.7
Earnings per share 2.95 3.10 3.05 2.82 2.27
</TABLE>
EXHIBIT 21
GENERAL MILLS, INC. SUBSIDIARIES
<TABLE>
<CAPTION>
Percentage
Country or of Voting
State in Which Securities
Each Subsidiary Owned
Was Organized (Note 1)
<S> <C> <C>
ALTCARE CORPORATION Minnesota 50
Elder Homestead Corporation Minnesota 50
CMHC, INC. Delaware 100
COLOMBO DAIRY FOODS LTD. Ontario 100
COLOMBO, INC. Delaware 100
COLOMBO YOGURT SHOP, QUINCY MARKET, INC. Delaware 100
C.P.A. CEREAL PARTNERS HANDELSGESELLSCHAFT
m.b.H. (Note 12) Austria 50
C.P.D. CEREAL PARTNERS DEUTSCHLAND
VERWALTUNGSGESSELSCHAFT m.b.H (Note 2) Germany 50
CPW MEXICO S.A. de C.V. Mexico 50
CPW S.A. (Note 15) Switzerland 50
FYL CORP. California 100
GENERAL MILLS CONTINENTAL, INC. (Note 13) Delaware 100
GENERAL MILLS EUROPE LIMITED England 100
C.P. HELLES EEIG Greece 50
GENERAL MILLS FINANCE, INC. Delaware 100
GENERAL MILLS FRANCE S.A. France 100
GMSNACKS, SCA (Note 3) France 43.29
Snack Ventures Europe, SCA (Note 4) Belgium 40.49
Biscuiterie Nantaise-BN, S.A. France 100
Laprovar Sociedade de Productos
Alimentares, S.A. Portugal 100
Smiths Food Group B.V. The Netherlands 100
Tasty Foods S.A. Greece 100
GENERAL MILLS HOLDING B.V. (Note 5) The Netherlands 100
CEREAL PARTNERS FRANCE B.V. (Note 6) The Netherlands 100
GENERAL MILLS HOLLAND B.V. (Note 7) The Netherlands 100
GMR Japan, Inc. Japan 100
SMITHS FOOD GROUP DEUTSCHLAND B.V. The Netherlands 100
SMITHS FOOD GROUP ESPANA B.V. (Note 8) The Netherlands 100
GENERAL MILLS MAARSSEN B.V. The Netherlands 100
GENERAL MILLS PRODUCTS CORP. Delaware 100
GENERAL MILLS INTERNATIONAL LIMITED (Note 13) Delaware 100
INDUSTRIA HARINERA GUATEMALTECA, S.A. Guatemala 50
Programacion y Computacion, S.A.
("PROCOMSA") Guatemala 99.8
Triticus S.A. Guatemala 99.8
INMOBILIARIA SELENE, S.A. DE C.V. Mexico 100
TORONTO MACARONI & IMPORTED FOODS LIMITED Ontario 100
General Mills Canada, Inc. (Note 9) Canada 100
893643 Ontario, Inc. Ontario 100
GMR of Alberta, Inc. Alberta 100
Industria del Maiz, S.A. Guatemala 50
GENERAL MILLS RESTAURANTS, INC. (Note 10) Florida 100
GOLD MEDAL INSURANCE CO. (Note 11) Minnesota 100
GRANDES MOLINOS DE VENEZUELA, S.A Venezuela 16.1
MILLS SYNDICATED PROPERTIES, INC. Minnesota 100
NESTLE ASEAN PHILIPPINES, INC. (Note 14) The Philippines 30
YOPLAIT USA, INC. Delaware 100
</TABLE>
Notes to list of subsidiaries:
1. Except where noted, the percentage of ownership refers to the
total ownership by the indicated parent corporation.
2. General Mills, Inc. also owns a 50% ownership interest in a
partnership organized under the laws of Germany.
3. General Mills Holland B.V. owns a 29.34% interest in
GMSNACKS, SCA, General Mills Holding B.V. owns a 26.25%
interest in GMSNACKS, SCA, and General Mills Products Corp.
owns a 1.12% interest in GMSNACKS, SCA.
4. General Mills Holding B.V. owns a .01% interest in Snack
Ventures Europe, SCA.
5. General Mills Holding B.V. and General Mills, Inc. together
own a 100% interest in a Belgian partnership, General Mills
Belgium, SNC, which also has a 50% interest in a partnership
organized under the laws of Portugal.
6. Cereal Partners France B.V., General Mills, Inc. and General
Mills France S.A. own a 100% interest in a French
partnership, GMEAF SNC, which owns a 50% interest in a
partnership organized under the laws of France.
7. General Mills Holland B.V. owns a 19% ownership interest in a
partnership organized under the laws of Japan.
8. Smiths Food Group Espana B.V. owns a 50% interest in a
partnership organized under the laws of Spain.
9. General Mills Canada, Inc. and General Mills Products Corp.
together own a 100% interest in a Canadian partnership,
General Mills North America Affiliates, which owns a 50%
interest in a partnership organized under the laws of the
United Kingdom.
10.General Mills Restaurants, Inc. ("GMRI") owns and operates
full-service specialty seafood and Italian restaurants. In
order to comply with certain state laws, GMRI has 43 wholly-
owned domestic subsidiaries; 2 domestic subsidiaries in which
it has a 97% ownership interest; 1 domestic subsidiary in
which it has a 50% ownership interest; and 13 domestic
subsidiaries in which it has a 49% ownership interest.
11.Eighty-one percent of the voting securities are owned by
General Mills, Inc. and 19% of the voting securities are
owned by General Mills Canada, Inc.
12.General Mills, Inc. also owns a 50% ownership interest in a
partnership organized under the laws of Austria.
13.General Mills Continental, Inc. and General Mills
International Limited together own a 100% interest in a
Chilean partnership, General Mills Continental, Inc. y
Compania, which owns a 50% interest in Cereales C.P.W. Chile
Limitada, a corporation organized under the laws of Chile.
14.The 30% ownership interest of General Mills, inc. is held in
trust by Nestle, S.A.
15.General Mills, Inc. also owns a 50% ownership interest in a
partnership organized under the laws of Switzerland.
EXHIBIT 23
AUDITORS' CONSENT
The Board of Directors
General Mills, Inc.:
We consent to incorporation by reference in the Registration
Statements (Nos. 2-49637, 2-91893, 33-15323, 33-37474, 33-39927
and 33-56032) on Form S-3 and Registration Statements (Nos. 2-
13460, 2-53523, 2-66320, 2-91987, 2-95574, 33-24504, 33-27628, 33-
32059, 33-36892, 33-36893, 33-51070 and 33-50337) on Form S-8 of
General Mills, Inc. of our reports dated July 29, 1994, relating
to the consolidated balance sheets of General Mills, Inc. and
subsidiaries as of May 29, 1994 and May 30, 1993 and the related
consolidated statements of earnings, cash flows and related
financial statement schedules for each of the fiscal years in the
three-year period ended May 29, 1994, which reports are included
or incorporated by reference in the May 29, 1994 annual report on
Form 10-K of General Mills, Inc.
Our report covering the basic consolidated financial statements
refers to changes in the method of accounting for postemployment
benefits and for income taxes.
KPMG Peat Marwick
Minneapolis, Minnesota
August 22, 1994
