Pricing Supplement No. 13 Filing under Rule 424(b)(3) with respect to
Dated January 6, 1994 Registration Statement No. 33-56032
(To Prospectus dated January 7, 1993 and
Prospectus Supplement dated January 8, 1993)
$500,000,000
GENERAL MILLS, INC.
MEDIUM-TERM NOTES, SERIES D
Principal amount: $15,000,000
Amount Payable at Maturity: Indexed Principal Amount (as
defined below)
Stated Maturity: January 6, 1999
Specified Currency: U.S. Dollars
Interest Payment Period and
Interest Rate Reset Period: N/A
Interest Payment Dates: N/A
Interest Period: N/A
Interest Reset Dates: N/A
Interest Determination Dates: N/A
Minimum Rate: N/A
Applicable Exchange Rate (if any): N/A
Issue price (as a percentage of
principal amount): 100%
Selling Agent's Commission (%): .02%
Agent's Fee: $3,000
Purchasing Agent's discount
or commission (%): N/A
Net proceeds to the Company: $14,997,000
Settlement date (original issue date): January 6, 1994
Redemption Commencement Date (if any): N/A
Redemption prices (if any): N/A
Calculation Agent: Bankers Trust Company
"N/A" as used herein means "Not Applicable." "A/S" as used
herein means "as stated in the Prospectus Supplement referred to
above."
The following description of the particular terms of the Notes
offered by this Pricing Supplement supplements, and to the extent
inconsistent therewith replaces, the descriptions of the general
terms and provisions of the Debt Securities and Notes set forth in
the accompanying Prospectus and Prospectus Supplement (together,
the "Prospectus") to which descriptions reference is hereby made.
Capitalized terms not otherwise defined herein which are defined in
the Prospectus have the meanings set forth therein.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF
THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN, AND S&P SHALL HAVE
NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN.
S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE RESULTS TO BE
OBTAINED BY THE ISSUER, INVESTOR, HOLDER OF THIS NOTE, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE S&P INDEX OR ANY DATA INCLUDED
THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY
DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR USE WITH RESPECT TO THE S&P 500 INDEX OR ANY
DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN
NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE,
INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN
IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
1. Payment Of Indexed Principal Amount
The Indexed Principal Amount will be payable on the Stated
Maturity; provided, however, that if any such payment date is not a
"Business Day" (as such term is defined in the accompanying
Prospectus Supplement), payment will be made on the next succeeding
Business Day.
2. Market Disruption Events
If, in the opinion of the Calculation Agent, a Market Disruption
Event has occurred and is continuing on any Valuation Date, then
such Valuation Date shall be postponed to the next Index Business
Day on which there is no Market Disruption Event; provided,
however, that if
(a) only one of the Valuation Dates has occurred prior to
the fourth Index Business Day immediately prior to the Stated
Maturity, then the other Valuation Dates shall be the fourth,
third, second and first Index Business Days immediately prior
to the Stated Maturity;
(b) only two of the Valuation Dates have occurred prior to
the third Index Business Day immediately prior to the Stated
Maturity, then the other Valuation Dates shall be the third,
second and first Index Business Days immediately prior to the
Stated Maturity;
(c) only three of the Valuation Dates have occurred prior
the second Index Business Day immediately prior to the Stated
Maturity, then the Other Valuation Dates shall be the second
and first Index Business Days immediately prior to the Stated
Maturity;
(d) only four of the Valuation Dates have occurred prior the
first Index Business Day immediately prior to the Stated
Maturity, then the last Valuation Date shall be the first Index
Business Day immediately prior to the Stated Maturity; and
(e) no such Valuation Dates have occurred on or prior to the
fifth Index Business Day prior to the Settlement Date, the
relevant Indexed Principal Amount shall be calculated as if the
fifth, fourth, third, second and first Index Business Days
prior to the Stated Maturity were such Valuation Dates.
3. Discontinuance or Modification of Index
(a) If the Index is not calculated and published by S&P but
is calculated and reported by another person or party
acceptable to the Calculation Agent (the "Third Party"), the
Indexed Principal Amount relating to this Note may nevertheless
be calculated by the Calculation Agent by reference to the
relevant closing level of the Index.
(b) If after the Settlement Date, S&P or the Third Party
makes a material change (in the opinion of the Calculation
Agent) in the formula or the method of calculating the Index,
the Calculation Agent shall, using the formula and method of
calculating the Index in effect immediately prior to such
change, make such calculations as may be required to determine
any Indexed Principal Amount.
(c) If, at any time, S&P or the Third Party should cease
calculation and dissemination of the Index, either temporarily
or permanently, and should not provide a successor index, the
Calculation Agent shall, using the formula and method of
calculating the Index in effect of the date the Index was last
so calculated (subject to paragraph (b) above), make such
calculations as shall be required to determine any Indexed
Principal Amount.
4. Definitions
"Index" means the S&P 500 Composite Stock Price Index
calculated by Standard & Poor's Corporation ("S&P").
"Index Business Day" means a day other than a Saturday or
Sunday on which the New York Stock Exchange, the American Stock
Exchange, National Association of Securities Dealers Automated
Quotation ("NASDAQ"), the Chicago Mercantile Exchange, the New
York Futures Exchange, the Chicago Board of Options, and any
other exchange on which securities comprising a component of
the Index are listed, are open for securities trading.
"Indexed Principal Amount" means an amount in U.S. Dollars
calculated by the Calculation Agent equal to the sum of (a) the
Principal Amount and (b) an amount equal to the Principal
Amount multiplied by the Index Return. The Indexed Principal
Amount shall not be less than the Principal Amount.
"Index Return" means the positive number expressed as a
percentage rate calculated by the Calculation Agent on the
Valuation Date in accordance with the following formula:
( Index(m) - Index(o) )
( ---------------------- ) x 125.25%
( Index(o) )
where,
"Index(o)" means 471.31; and
"Index(m)" means the arithmetic mean of the closing levels of the
Index as announced by S&P on the Valuation Dates as determined
by the Calculation Agent.
"Market Disruption Event" means the suspension or material
limitation of trading in (a) a material number of the
securities from time to time comprising the component
securities of the Index, (b) securities generally on any of the
New York Stock Exchange, American Stock Exchange or NASDAQ, (c)
futures contracts, if any, related to the Index traded on the
Chicago Mercantile Exchange or the New York Futures Exchange,
or (d) options contracts, if any, related to the Index traded
on the Chicago Board of Options Exchange. However, (i) a
limitation on the hours and number of days of trading will not
constitute a Market Disruption Event if it results from an
announced change in the regular business hours of the relevant
exchange and (ii) a limitation on trading imposed during the
course of a day by reason of movements in price otherwise
exceeding levels permitted by the relevant exchange will
constitute a Market Disruption Event.
"U.S. Dollar" and "$" mean the lawful currency of the United
States of America.
"Valuation Date" means each of the tenth, ninth, eighth,
seventh and sixth Index Business Days prior to the Stated
Maturity.
5. United States Taxation
The following summary of certain United States Federal income
tax consequences of the purchase, ownership and disposition of the
Notes is based upon laws, regulations, rulings and decisions now in
effect (or, in the case of certain regulations, in proposed form),
all of which are subject to change (including changes in effective
dates) or possible differing interpretations. The discussion below
deals only with Notes held as capital assets by U.S. Holders and
does not purport to deal with persons in special tax situations.
It also does not deal with holders other than original purchasers
(except where otherwise specifically noted). Persons considering
the purchase of the Notes should consult their own tax advisors
concerning the application of United States Federal income tax laws
to their particular situations as well as any consequences of the
purchase, ownership and disposition of the Notes arising under the
laws of any other taxing jurisdiction.
As used herein the term "U.S. Holder" means a beneficial owner
of a Note that is for United States Federal income tax purposes (i)
a corporation, partnership or other entity created or organized in
or under the laws of the United States or of any political
subdivision thereof, (ii) an estate or trust the income of which is
subject to United States Federal income taxation regardless of its
source, or (iii) any other person whose income or gain in respect
of a Note is effectively connected with the conduct of a United
States trade or business.
General
There are no regulations (except the Proposed Regulations as
described below), published rulings or judicial decisions involving
the characterization, for United States Federal income tax
purposes, of securities with terms substantially the same as the
Notes. Although not entirely free from doubt, the Company believes
that under current law each Note should be treated as a debt
instrument of the Company for United States Federal income tax
purposes. The discussion below is based upon the assumption that
each Note will be treated as a debt instrument of the Company for
United States Federal income tax purposes.
U.S. Holders
Under general principles of current United States Federal income
tax law, payments of interest on a Note generally will be taxable
to a U.S. Holder as ordinary interest income at the time such
payments are accrued or are received (in accordance with the U.S.
Holder's regular method of tax accounting). Under this analysis, a
U.S. Holder would not recognize any income, gain or loss prior to
the Stated Maturity Date or earlier disposition of a Note. The
amount payable at maturity with respect to a Note in excess of the
Principal Amount (the "Additional Interest Amount"), if any, would
be treated as contingent interest and generally would be includable
in income by a U.S. Holder as ordinary interest on the date the
amount payable at maturity is accrued (i.e., determined) or when
such amount is received (in accordance with the U.S. Holder's
regular method of tax accounting).
Upon the sale, exchange or retirement of a Note, a U.S. Holder
generally would recognize taxable gain or loss equal to the
difference between the amount realized on the sale, exchange or
retirement and such U.S. Holder's tax basis in the Note. Such gain
or loss generally should be capital gain or loss and should be long-
term capital gain or loss if the Note were held by the U.S. Holder
for more than one year.
However, in 1991, the Treasury Department issued proposed
regulations (the "Existing Proposed Regulations") under the
original issue discount provisions of the Code concerning
contingent payment debt obligations which, if applicable to the
Notes, would bifurcate a Note into a debt instrument and a right
based upon the value of the S&P 500 Composite Stock Price Index.
The Existing Proposed Regulations contain a retroactive effective
date of February 20, 1991. Thus, if the Existing Proposed Regulations
are adopted in their current form such regulations would apply to
the Notes and would cause the timing and character of income, gain
or loss reported on a Note to differ from the timing and character
of income, gain or loss on a Note had the Existing Proposed Regulations
not applied.
The Existing Proposed Regulations would treat a Note as
consisting of two separate instruments: (i) the fixed payment
(i.e., the debt instrument), consisting of the right to receive the
Principal Amount (the "Fixed Payment"), and (ii) the contingent
payment, consisting of the right to receive the Additional Interest
Amount (the "Contingent Payment"). A Note's original issue price
would be allocated between the Fixed Payment and the Contingent
Payment in accordance with their relative fair market values.
Under the Existing Proposed Regulations, the Fixed Payment would
be treated for United States Federal income tax purposes, as a
separate debt obligation issued at an original issue discount. A
U.S. Holder (whether a cash or accrual method taxpayer) would be
required to include the original issue discount on a Note in gross
income (using a constant yield method) over the Note's term in
advance of receipt of the cash payments attributable to such
income. The original issue discount required to be included in
income with respect to a Note would be equal to the difference
between the Note's Principal Amount and the amount of the Note's
original issue price allocated to the Fixed Payment. If the
Existing Proposed Regulations are ultimately adopted in their
current form and, thus, are applied to the Notes, then the amount
of original issue discount on a Note would be $234.40 per
$1,000 Principal Amount. Under the Existing Proposed
Regulations, a U.S. Holder that disposes of a Note prior to its
maturity would generally recognize a taxable gain or loss, with
respect to the Fixed Payment in an amount equal to the difference
(if any) between the portion of the sales proceeds allocated to
such Fixed Payment (in accordance with the relative fair market
values of the Fixed Payment and the Contingent Payment) and such
U.S. Holder's adjusted tax basis in the Fixed Payment. A U.S.
Holder's adjusted tax basis in the Fixed Payment generally would
equal the portion of such U.S. Holder's initial investment in the
Note that is allocated to the Fixed Payment (in accordance with the
relative fair market values of the Fixed Payment and the Contingent
Payment), increased by the amount of original issue discount
previously included by such U.S. Holder with respect to the Fixed
Payment.
Under the Existing Proposed Regulations, the Contingent Payment
would be treated separately from the Fixed Payment and taxed "in
accordance with [its] economic substance." Although not entirely
free from doubt, the Company believes that if the Existing Proposed
Regulations were applied, under an "economic substance" analysis,
the Contingent Payment would most likely be treated as an
"unlisted" cash settlement option (an "S&P Right") on the S&P 500
Index. A U.S. Holder would recognize taxable gain or loss with
respect to the S&P Right only upon its sale, exchange, expiration
or payment at maturity. The gain or loss with respect to the S&P
Right would generally be measured by the difference between the
amount realized with respect to the S&P Right and its tax basis. A
U.S. Holder's tax basis in the S&P Right generally would be the
portion of the U.S. Holder's initial investment in the Note that is
allocated to the Contingent Payment (in accordance with the
relative fair market values of the Fixed Payment and the Contingent
Payment). Such gain or loss on the S&P Right would generally be
long-term capital gain or loss if the Note were held by the U.S.
Holder for more than one year.
There is no assurance that the Existing Proposed Regulations
will be adopted, or if adopted, adopted in their current form. In
addition, on January 19, 1993, the Treasury Department issued
proposed regulations (the "1993 Proposed Regulations"), concerning
contingent payment debt obligations, which would have replaced the
Existing Proposed Regulations and which would have provided for a
set of rules with respect to the timing and character of income
recognition on the Notes that differs from the rules contained in
the Existing Proposed Regulations with respect to the timing and
character of income recognition. The 1993 Proposed Regulations,
which would have applied to debt instruments issued 60 days or more
after the date the 1993 Proposed Regulations became final,
generally provided for several alternative timing methods which
would have required annual interest accruals to reflect either a
market yield for the debt instrument, determined as of the issue
date, or a reasonable estimate of the performance of contingencies.
The amount of interest deemed to accrue in a taxable year pursuant
to such methods would have been currently includable in income by a
U.S. Holder, with subsequent adjustments to the extent that the
estimate of income was incorrect. In addition, under the 1993
Proposed Regulations, any gain recognized by a U.S. Holder on the
sale, exchange or retirement of a Note would have been treated
entirely as ordinary interest income and any loss recognized on the
sale, exchange or retirement of a Note would have been treated
entirely as a capital loss. However, on January 22, 1993, the
United States Government's Office of Management and Budget
announced that certain proposed regulations which had not yet been
published in the Federal Register, including the 1993 Proposed
Regulations, had been withdrawn. It is unclear whether the 1993
Proposed Regulations will be reproposed or, if reproposed, what
effect, if any, such regulations would have on the Notes. Based
upon the foregoing, the continued viability of the Existing
Proposed Regulations is uncertain. It should also be noted that
proposed Treasury regulations are not binding upon either the IRS
or taxpayers prior to becoming effective as temporary or final
regulations. Prospective investors in the Notes are urged to
consult their own tax advisors regarding the application of the
Existing Proposed Regulations to their investment in the Notes, if
any, and the effect of possible changes to the Existing Proposed
Regulations.
Other
Notes are not traded on any recognized or designated investment
exchange. Notes may not be suitable for some private investors.
As of the date of this Pricing Supplement, the aggregate initial
public offering price (or its equivalent in other currencies) of
the Debt Securities (as defined in the Prospectus) which have been
sold (including the Notes to which this Pricing Supplement relates)
is $225,000,000.
BT SECURITIES CORPORATION
NORTH CAROLINA
The Commissioner of Insurance of the State of North Carolina
has not approved or disapproved this offering nor has the
Commissioner passed upon the accuracy or adequacy of this
Prospectus.
