<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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4) Date Filed:
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<PAGE>
[LOGO]
August 22, 1996
To Our Stockholders:
You are cordially invited to attend the 1996 Annual Meeting of Stockholders,
which will be held in the auditorium of the Children's Theatre Company, 2400
Third Avenue South, Minneapolis, Minnesota, on Monday, September 30, 1996, at
11:00 a.m. Central Daylight Time. All holders of the Company's outstanding
common stock as of August 1, 1996 are entitled to vote at the Annual Meeting.
Time will be set aside for discussion of each item of business described in
the accompanying Notice of Annual Meeting and Proxy Statement. A current report
on the business operations of the Company will be presented at the meeting and
stockholders will have an opportunity to ask questions. We plan to adjourn the
meeting at approximately 12:15 p.m., but members of senior management will
remain to answer any additional questions you may have. Also, a report of the
Annual Meeting will be included in the mid-year report that is mailed to all
stockholders in January.
WE HOPE YOU WILL BE ABLE TO ATTEND THE ANNUAL MEETING. IF YOU NEED SPECIAL
ASSISTANCE AT THE MEETING BECAUSE OF A DISABILITY, PLEASE CONTACT THE SECRETARY
OF THE COMPANY AT THE ADDRESS ABOVE. WHETHER OR NOT YOU EXPECT TO ATTEND, YOU
ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD IN THE ENCLOSED
ENVELOPE IN ORDER TO MAKE CERTAIN THAT YOUR SHARES WILL BE REPRESENTED AT THE
ANNUAL MEETING.
Sincerely,
/s/ STEPHEN W. SANGER
Stephen W. Sanger
Chairman of the Board and
Chief Executive Officer
<PAGE>
GENERAL MILLS, INC.
- - ------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS -- SEPTEMBER 30, 1996
- - --------------------------------------------------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of General Mills,
Inc. will be held on Monday, September 30, 1996, at 11:00 a.m., Central Daylight
Savings Time, in the auditorium of the Children's Theatre Company, 2400 Third
Avenue South, Minneapolis, Minnesota, for the following purposes:
1. To elect 12 directors;
2. To approve the selection of KPMG Peat Marwick LLP to audit the consolidated
financial statements of General Mills, Inc. for the fiscal year beginning
May 27, 1996;
3. To consider and act upon the General Mills, Inc. Stock Option and Long-Term
Incentive Plan of 1993, as amended, for the purpose of meeting certain
Internal Revenue Code provisions;
4. To consider and act upon the General Mills, Inc. Executive Incentive Plan,
as amended, for the purpose of meeting certain Internal Revenue Code
provisions;
5. To consider and act on the General Mills, Inc. 1996 Compensation Plan for
Non-Employee Directors;
6. If presented, to consider and act upon one stockholder proposal relating to
cumulative voting; and
7. To act upon any other business that may properly be brought before the
meeting.
The close of business on August 1, 1996 has been fixed as the record date for
determining the stockholders entitled to notice of and to vote at the Annual
Meeting.
By Order of the Board of Directors,
SIRI S. MARSHALL
Secretary
August 22, 1996
<PAGE>
GENERAL MILLS, INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
MONDAY, SEPTEMBER 30, 1996
VOTING PROCEDURES
This Proxy Statement is being sent beginning on August 22, 1996, to all holders
of the common stock (the "Common Stock") of General Mills, Inc., P.O. Box 1113,
Minneapolis, MN 55440 (the "Company") entitled to vote at the Annual Meeting of
Stockholders on September 30, 1996, in order to furnish information relating to
the business to be transacted. Stockholders of record at the close of business
on August 1, 1996 are entitled to vote at the meeting. As of that date, there
were 157,157,501 shares of Common Stock outstanding. Each share of Common Stock
entitles the holder to one vote. The 46,995,831 shares of Common Stock held in
the Company's treasury will not be voted.
A proxy card is enclosed for your use. YOU ARE SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS TO SIGN, DATE AND RETURN THE PROXY CARD IN THE ACCOMPANYING
ENVELOPE, which is postage-paid if mailed in the United States or Canada.
You have three choices on each matter to be voted upon at the Annual
Meeting. For the election of directors, by checking the appropriate box on your
proxy card you may: (i) vote for all of the director nominees as a group; (ii)
withhold authority to vote for all director nominees as a group; or (iii) vote
for all director nominees as a group except those nominees you identify on the
appropriate line. See "General Information" under Item No. 1. Concerning the
other items, by checking the appropriate box you may: (i) vote "FOR" the item;
(ii) vote "AGAINST" the item; or (iii) "ABSTAIN" from voting on the item.
You may revoke your proxy at any time before it is actually voted at the
Annual Meeting by delivering written notice of revocation to the Secretary of
the Company, by submitting a subsequently dated proxy, or by attending the
meeting and withdrawing the proxy. You may also be represented by another person
present at the meeting through executing a form of proxy designating such person
to act on your behalf. Each unrevoked proxy card properly executed and received
prior to the close of the meeting will be voted as indicated. Where specific
instructions are not indicated, the proxy will be voted FOR (i) the election of
all directors as nominated; (ii) the approval of the selection of KPMG Peat
Marwick LLP as independent auditors; (iii) the General Mills, Inc. Stock Option
and Long-Term Incentive Plan of 1993, as amended; (iv) the General Mills, Inc.
Executive Incentive Plan, as amended; and (v) the adoption of the General Mills,
Inc. 1996 Compensation Plan for Non-Employee Directors; and AGAINST the
stockholder proposal relating to cumulative voting. The approval of KPMG Peat
Marwick LLP as independent auditors and approval of the stockholder proposal
related to cumulative voting each require the affirmative vote of a majority of
the shares represented and entitled to vote at the meeting. The affirmative vote
of the holders of two-thirds of the Common Stock present or represented and
voting at the Annual Meeting is required for approval or adoption of the
compensation plans. Abstentions and broker non-votes will be counted as present
or represented at the Annual Meeting for purposes of determining whether a
quorum exists. However, abstentions and broker non-votes with respect to any
specific matter will be treated as shares not voted for purposes of determining
whether the requisite vote has been obtained, and therefore will have no effect
on the outcome of the vote on any such matter.
The expense of preparing, printing and mailing this Proxy Statement will be
paid by the Company. The Company has engaged Georgeson & Company Inc. to assist
in the solicitation of proxies from stockholders at a fee of $10,500 plus
reimbursement of its out-of-pocket expenses. In addition to the use of the mail,
proxies may be solicited personally or by telephone by regular employees of the
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Company without additional compensation, as well as by employees of Georgeson &
Company Inc. The Company will reimburse banks, brokers and other custodians,
nominees and fiduciaries for their costs in sending the proxy materials to the
beneficial owners of the Common Stock.
A copy of the 1996 Annual Report to Stockholders, which includes the
consolidated financial statements of the Company for the fiscal year ended May
26, 1996, was mailed on or about August 17, 1996 to all stockholders entitled to
vote at the Annual Meeting. If upon receipt of your proxy material you have not
received the Annual Report, please call 1-800-245-5703 and a copy will be
forwarded to you.
Shares of Common Stock credited to the accounts of participants in the
Company's dividend reinvestment plan (including the employee payroll deduction
stock purchase plan) have been added to such persons' other holdings on their
proxy cards. If a stockholder is a participant in the Company's Voluntary
Investment Plan ("VIP") and shares of Common Stock have been allocated to such
person's VIP account, the proxy also serves as voting instructions to the VIP
trustee. The VIP trustee also votes allocated shares of Common Stock for which
it has not received direction, as well as unallocated shares held by the
trustee, in the same proportion as directed shares are voted.
CERTAIN OWNERS OF COMMON STOCK
State Street Bank and Trust Company, Boston, Massachusetts, has advised the
Company that as of June 30, 1996, it held 8,783,229 shares of Common Stock
(5.54% of the then outstanding Common Stock) and (i) 6,462,263 shares were held
in its capacity as trustee of the VIP and 2,320,966 shares were held in its
capacity as trustee for various personal trust accounts, other employee benefit
plans and index accounts; and (ii) it had sole power to vote 1,509,545 of such
shares, shared voting power on 7,092,284 shares, sole dispositive power on
1,532,724 shares and shared dispositive power on 7,250,505 shares. The Company
knows of no other holder with more than five percent of the outstanding Common
Stock.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission and
the New York Stock Exchange. Executive officers and directors are required by
SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file. Based on a review of the copies of such forms furnished to the
Company and written representations from the Company's executive officers and
directors, all reports were filed on a timely basis except that one report of a
sale of shares by Edward K. Bixby was inadvertently filed late.
ITEM NO. 1
ELECTION OF DIRECTORS
GENERAL INFORMATION
Directors will hold office until the next Annual Meeting and until their
successors are duly chosen and qualify, or until their earlier resignation or
removal. The Board of Directors has inquired of each nominee and has ascertained
that each will serve if elected. In the event that any of these nominees should
become unavailable for election, the Board of Directors may designate substitute
nominees, in which event the shares represented by the proxy cards returned will
be voted for such substitute nominees unless an instruction to the contrary is
indicated on the proxy card.
The Board of Directors has a tenure policy that non-employee directors serve
on the Board for no more than 15 years after first election, subject to
retirement at age 70 or at the end of five years from such director's normal
retirement from his or her principal organization, whichever comes first. In
accordance with this policy, George Putnam, a director of the Company since
1981, is retiring from the Board and is not standing for re-election.
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BOARD COMPENSATION AND BENEFITS
Employee directors do not receive additional compensation for serving on the
Board of Directors. As of February 1996, non-employee directors receive an
annual retainer of $35,000 plus $1,000 for each Board and committee meeting
attended. Under the current Compensation Plan for Non-Employee Directors,
non-employee directors may elect to receive all or a portion of their
remuneration on a quarterly basis: (i) in cash; (ii) in cash deferred until the
director retires, with such amounts earning interest; or (iii) in Common Stock
with a market value equal to the remuneration due. In 1996 L. D. DeSimone, M. D.
Rose and C. A. Wurtele elected to receive all of their remuneration in Common
Stock; W. T. Esrey, G. Putnam and D. A. Terrell received cash payments; R. M.
Bressler and J. R. Hope deferred cash payments; A. M. Spence received 25% in
Common Stock, 15% in cash and 60% in deferred cash and K. A. Macke received 50%
in Common Stock and 50% in cash. Under the existing Stock Plan for Non-Employee
Directors, each such director received a stock option grant for 2,500 shares
upon first election to the Board and an annual grant of restricted stock, which
for fiscal 1996 was 486 shares of restricted stock. The restrictions lapse at
the later of the next year's annual meeting date or the director's termination
of service on the Board. The current Compensation Plan for Non-Employee
Directors and Stock Plan for Non-Employee Directors are proposed to be replaced
with a new 1996 Compensation Plan for Non-Employee Directors, as described in
Item No. 5 (See pages 12-14). The Retirement Plan for Non-Employee Directors has
been terminated and, assuming stockholder approval, accrued pension benefits
under that plan to existing non-employee directors will be replaced by a
one-time grant of restricted stock units under the proposed 1996 Compensation
Plan for Non-Employee Directors.
The Compensation Committee of the Board of Directors has adopted stock
ownership guidelines for non-employee directors, pursuant to which non-employee
directors are expected to build and maintain Company stockholdings to equal in
market value at least five times the annual cash retainer. Newer directors,
having not yet achieved this five times retainer guideline, are expected to
retain all Company stock or stock units that the non-employee director receives
as compensation for Board service, net of stock or stock units equal in value to
the taxes paid on such compensation.
As part of its overall program to promote charitable giving, the Company has
established a directors' planned gift program funded by life insurance policies
on all directors. Upon the death of an individual director, the Company will
donate $1 million to one or more qualifying charitable organizations recommended
by the individual director and the Company will be reimbursed by life insurance
proceeds. Individual directors derive no financial benefit from this program
since all charitable deductions accrue solely to the Company. The program does
not result in any material cost to the Company. The Company also pays the
premiums on directors' and officers' liability and travel accident insurance
policies covering the directors.
COMMITTEES OF THE BOARD
During the fiscal year ended May 26, 1996, the Board of Directors met six times
and various committees of the Board met a total of ten times. Attendance at
Board meetings and all committee meetings averaged 96%. Each director attended
more than 75% of the Board meetings and the meetings of Board committees on
which the director served.
AUDIT COMMITTEE. The Audit Committee consists of six non-employee
directors: Michael D. Rose (Chair), Richard M. Bressler, William T. Esrey,
Judith Richards Hope, A. Michael Spence and C. Angus Wurtele. The Audit
Committee met twice during fiscal 1996. It meets separately with representatives
of the Company's independent auditors, with representatives of senior management
and with the internal auditors. Subsequent to the end of fiscal 1996 an
additional meeting was held to review the results of the fiscal year audit. The
Committee reviews: (i) the general scope of audit coverages; (ii) the fees
charged by the independent auditors; (iii) matters relating to the internal
control systems; (iv) the value of goodwill and other intangibles; and (v) the
expenses of senior executives.
COMPENSATION COMMITTEE. The Compensation Committee consists of five
non-employee directors: Richard M. Bressler (Chair), Livio D. DeSimone, Kenneth
A. Macke, George Putnam and
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Michael D. Rose. The Compensation Committee met four times during fiscal 1996.
The Committee administers the stock option and long-term incentive plans and the
Executive Incentive Plan, and in this capacity it makes or recommends all option
grants or awards to Company officers and executives. In addition, the Committee
makes recommendations to the Board with respect to the compensation of the
Chairman of the Board and approves the compensation paid to other senior
executives. The Committee also recommends the establishment of policies dealing
with various compensation, pension and profit-sharing plans for the Company and
its subsidiaries. See pages 15-18 for its report on executive compensation.
EXECUTIVE COMMITTEE. The Executive Committee consists of nine directors:
Stephen W. Sanger (Chair), Richard M. Bressler, Livio D. DeSimone, William T.
Esrey, Charles W. Gaillard, Kenneth A. Macke, Michael D. Rose, George Putnam and
Raymond G. Viault. The Executive Committee did not meet in fiscal 1996. Pursuant
to the By-Laws, the Committee has the authority to take all actions that could
be taken by the full Board of Directors. It may meet between regularly scheduled
meetings to take such action as is necessary for the efficient operation of the
Company.
FINANCE COMMITTEE. The Finance Committee consists of six non-employee
directors: George Putnam (Chair), Livio D. DeSimone, William T. Esrey, A.
Michael Spence, Dorothy A. Terrell and C. Angus Wurtele. The Finance Committee
met twice during fiscal 1996. It reviews and makes recommendations relating to
public offerings of debt and equity securities, major borrowing commitments and
other significant financial strategies, including the dividend policy of the
Company.
NOMINATING COMMITTEE. The Nominating Committee consists of six non-employee
directors: William T. Esrey (Chair), Richard M. Bressler, Judith Richards Hope,
Kenneth A. Macke, Michael D. Rose and A. Michael Spence. The Nominating
Committee met once during fiscal 1996. The Committee's duties include proposing
a slate of directors for election by the stockholders at each annual meeting and
proposing candidates to fill vacancies on the Board based on the particular
qualifications it determines to be appropriate for a vacancy. It conducts
research to identify suitable candidates for Board membership, and seeks
individuals who will make a substantial contribution to the Company. It will
consider candidates proposed by stockholders. Generally, candidates must be
highly qualified and be both willing and expressly interested in serving on the
Board. Candidates should represent the interests of all stockholders and not
those of a special interest group. A stockholder wishing to nominate a candidate
should forward the candidate's name and a detailed background of the candidate's
qualifications to the Secretary of the Company.
PUBLIC RESPONSIBILITY COMMITTEE. The Public Responsibility Committee
consists of six non-employee directors: C. Angus Wurtele (Chair), Livio D.
DeSimone, Judith Richards Hope, Kenneth A. Macke, George Putnam and Dorothy A.
Terrell. The Public Responsibility Committee met once in fiscal 1996. The duties
of the Committee are to review and make recommendations regarding the Company's
policies, programs and practices in relation to public issues of significance to
the Company. In addition, it reviews and makes recommendations regarding trends
in the political and social environment that may affect the operations of the
Company.
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SHARE OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
Set forth in the following table is the beneficial ownership of Common Stock as
of July 31, 1996 for all directors as of the date of this Proxy Statement, each
of the executive officers named in the Summary Compensation Table and all
directors and executive officers as a group, including shares allocated to
participant accounts under the VIP as of July 31, 1996. No director or executive
officer owns more than 0.30% of the total outstanding shares (including
exercisable options). All directors and executive officers as a group own 2.25%
of the total outstanding shares (including exercisable options).
<TABLE>
<CAPTION>
NAME SHARES (a)
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<S> <C>
R. M. Bressler................................................ 10,260
S. R. Demeritt................................................ 24,284
L. D. DeSimone................................................ 7,305
W. T. Esrey................................................... 4,373
C. W. Gaillard................................................ 72,273(b)
J. R. Hope.................................................... 4,924
K. A. Macke................................................... 4,857
S. S. Marshall................................................ 23,023
<CAPTION>
NAME SHARES (a)
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<S> <C>
G. Putnam..................................................... 82,916
M. D. Rose.................................................... 7,062(c)
S. W. Sanger.................................................. 36,716
A. M. Spence.................................................. 2,474
D. A. Terrell................................................. 1,097
R. G. Viault.................................................. 23,306
C. A. Wurtele................................................. 19,310
All directors and executive officers as a group............... 639,677
</TABLE>
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(a) The amounts shown do not include the following shares that may be
acquired pursuant to outstanding exercisable options: S. R. Demeritt,
217,251 shares; C. W. Gaillard, 377,333 shares; S. S. Marshall, 2,380
shares; S. W. Sanger, 342,308 shares; and all other listed persons except
R.G. Viault and R. M. Bressler, 3,038 shares each; and all directors and
executive officers as a group, 2,608,039 shares. (b) Included in the shares
for Mr. Gaillard are 648 shares owned by members of his family, in which he
disclaims any beneficial interest. (c) Included in the shares for Mr. Rose
are 600 shares owned by or held in trust for members of his family, in which
he disclaims any beneficial interest.
INFORMATION CONCERNING NOMINEES
<TABLE>
<S> <C>
RICHARD M. BRESSLER Director since
1984
Richard M. Bressler, age 65, is the retired Chairman of the Board
of El Paso Natural Gas Company. He joined Burlington Northern Inc.
as President and Chief Execu-
tive Officer in 1980 and retired from that position in 1990. He
[PHOTO] previously served as a General Mills director in 1978-79. Mr.
Bressler is also a director of H. F. Ahmanson & Company and
Rockwell International Corporation.
- - --------------------------------------------------------------------------------
LIVIO D. DESIMONE Director
since 1989
Livio D. DeSimone, age 60, is Chairman of the Board and Chief
Executive Officer, Minnesota Mining and Manufacturing Company
(3M). Mr. DeSimone joined 3M in
1957 and has served in various U.S. and international capacities.
[PHOTO] Mr. DeSimone was elected an Executive Vice President in 1981 and
named Chairman and Chief Executive Officer in 1991. He is a
director of 3M, Cargill, Incorporated, Dayton Hudson Corporation
and Vulcan Materials Company.
</TABLE>
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<TABLE>
<S> <C>
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WILLIAM T. ESREY Director
since 1989
William T. Esrey, age 56, is Chairman and Chief Executive Officer
of Sprint Corporation. He has been Chief Executive Officer of the
company since 1985. Prior to
joining the company in 1980 as Executive Vice President-Corporate
[PHOTO] Planning, he was with Dillon, Read & Co. Inc., where he served
from 1970-79 as a managing director. Mr. Esrey is a director of
Sprint, The Equitable Life Assurance Society of the United States,
Everen Capital Corporation and Panhandle Eastern Corporation.
- - --------------------------------------------------------------------------------
CHARLES W. GAILLARD Director since
1993
Charles W. Gaillard, age 55, was elected President of General
Mills, effective May 28, 1995, with responsibility for all
domestic marketing divisions. He was
previously Vice Chairman of General Mills, Inc. with
[PHOTO] responsibility for Big G, Consumer Food Sales and Yoplait. He
earlier served as Chief Executive Officer of Cereal Partners
Worldwide, a joint venture of the Company and Nestle, S.A. Mr.
Gaillard joined General Mills in 1966 and has served in various
food marketing management positions. He was elected a Senior Vice
President in 1985 and Executive Vice President in 1989.
- - --------------------------------------------------------------------------------
JUDITH RICHARDS HOPE Director since
1989
Judith Richards Hope, age 55, is a senior partner of the law firm
of Paul, Hastings, Janofsky & Walker, Los Angeles, California and
Washington, D.C. She has been a
partner with the firm since 1981. Ms. Hope is a director of The
[PHOTO] Budd Company, Union Pacific Corporation and Zurich Reinsurance
Center Holdings, Inc. She is also a member of the Harvard
Corporation (The President and Fellows of Harvard College), a
trustee of the National Housing Partnership Foundation, a trustee
of the U.S. Supreme Court Historical Society and a member of the
Council on Foreign Relations.
- - --------------------------------------------------------------------------------
KENNETH A. MACKE Director since
1991
Kenneth A. Macke, age 58, is the retired Chairman of the Board,
Chief Executive Officer and Chairman of the Executive Committee of
Dayton Hudson Corporation
(DHC). He joined Dayton's as a merchandise trainee and advanced
[PHOTO] through various management positions at Dayton's and Target. He
served as President of DHC from 1981 to 1984. He was elected Chief
Operating Officer of DHC in 1982, Chief Executive Officer in 1983,
Chairman of the Board in 1984 and Chairman of the Executive
Committee in 1985. He is a director of Carlson Companies, Inc.,
First Bank System, Inc. and Unisys Corporation. He is also the
general partner of Macke Partners, a private venture capital firm.
</TABLE>
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<TABLE>
<S> <C>
- - --------------------------------------------------------------------------------
MICHAEL D. ROSE Director
since 1985
Michael D. Rose, age 54, is Chairman of the Board of both Harrah's
Entertainment, Inc. and Promus Hotel Corporation. With 18 casinos
in nine U.S. States and
New Zealand, Harrah's is the most geographically diversified
[PHOTO] casino company in North America. Promus hotel brands are Embassy
Suites, Hampton Inn, Homewood Suites and Hampton Inn & Suites. The
two corporations were created when The Promus Companies,
Incorporated split in 1995. Rose joined Promus' predecessor
company, Holiday Corporation, in 1974 and subsequently held
positions at Holiday and Promus of President (1979-84 and
1988-91), Chief Executive Officer (1981-94) and Chairman
(1984-1995). Mr. Rose is a director of Ashland, Inc., Darden
Restaurants, Inc. and First Tennessee National Corp.
- - --------------------------------------------------------------------------------
STEPHEN W. SANGER Director since
1992
Stephen W. Sanger, age 50, is Chairman and Chief Executive Officer
of General Mills, Inc., a position to which he was elected
effective May 28, 1995. Mr. Sanger
joined the Company in 1974 and served as the head of several
[PHOTO] business units, including Yoplait USA and Big G. He was elected a
Senior Vice President in 1989, an Executive Vice President in
1991, Vice Chairman in 1992 and President in 1993. He is a
director of Dayton Hudson Corporation and Donaldson Company, Inc.
- - --------------------------------------------------------------------------------
A. MICHAEL SPENCE Director since
1992
Dr. A. Michael Spence, age 52, has been Dean of the Graduate
School of Business at Stanford University since 1990. Dean Spence
served on the faculty at Harvard
University in both the Business School and the Faculty of Arts and
[PHOTO] Sciences as professor of economics and business administration
from 1975 to 1990. From 1984 to 1990 he served as the Dean of the
Faculty of Arts and Sciences at Harvard. Dean Spence is a director
of BankAmerica Corporation, Nike, Inc., Sun Microsystems, Inc. and
Verifone, Inc. He is a Fellow of the Econometric Society and is
Chairman of the National Research Council Board on Science,
Technology and Economic Policy.
- - --------------------------------------------------------------------------------
DOROTHY A. TERRELL Director since
1994
Dorothy A. Terrell, age 51, is President of SunExpress, Inc. and a
corporate executive officer of Sun Microsystems, Inc., positions
she has held since 1991. SunEx-
press is Sun's aftermarketing company dedicated to providing
[PHOTO] information, products and services needed to enhance and expand
existing network computing environments. She previously served in
various management capacities at Digital Equipment Corporation
from 1976 to 1991, including management of DEC's high-density
interconnect and multichip module operations. Ms. Terrell is a
member of the board of directors of the Massachusetts Technology
Development Corporation, National Housing Partnership Foundation
and Sears, Roebuck and Company.
</TABLE>
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<TABLE>
<S> <C>
- - --------------------------------------------------------------------------------
RAYMOND G. VIAULT Director since February
1996
Raymond G. Viault, age 52, is Vice Chairman of the Company, with
overall responsibility for all international operations and
business development, as well as for all
financial activities of the Company. Mr. Viault joined the Company
[PHOTO] in January 1996 from Philip Morris, where he had been based in
Zurich, Switzerland, serving since 1990 as President of Kraft
Jacobs Suchard. Mr. Viault had been with Kraft General Foods a
total of 20 years, serving in a variety of major marketing and
general management positions.
- - --------------------------------------------------------------------------------
C. ANGUS WURTELE Director since
1985
C. Angus Wurtele, age 61, is Chairman of the Board of The Valspar
Corporation. Mr. Wurtele joined Minnesota Paints, Inc. (which
later merged with Valspar) as a
Vice President in 1962. He was named Executive Vice President of
[PHOTO] Minnesota Paints in 1965 and President and Chief Executive Officer
later that year. In 1970, Mr. Wurtele became President and Chief
Executive Officer of Valspar. Mr. Wurtele has held his present
position as Chairman since 1973 and served as Chief Executive
Officer from 1970 through 1995. Mr. Wurtele is a director of Bemis
Company, Donaldson Company, IDS Mutual Funds Group, as well as the
National Paint & Coatings Association. He is a member of the
Advisory Council of the Graduate School of Business of Stanford
University, the American Business Conference and the Minnesota
Business Partnership.
</TABLE>
- - ------------------------
THESE TWELVE (12) PERSONS WILL BE PLACED IN NOMINATION FOR ELECTION TO THE
BOARD OF DIRECTORS. THE SHARES REPRESENTED BY THE PROXY CARDS RETURNED WILL BE
VOTED FOR THE ELECTION OF THESE NOMINEES UNLESS OTHERWISE SPECIFIED.
ITEM NO. 2
APPROVAL OF THE APPOINTMENT OF INDEPENDENT AUDITORS
Stockholders are asked to consider and approve the appointment of KPMG Peat
Marwick LLP ("KPMG"), an independent certified public accounting firm, to audit
the consolidated financial statements of the Company for the fiscal year
beginning May 27, 1996. KPMG has audited the books of the Company since 1928.
During fiscal 1996, KPMG provided General Mills with audit and other services,
with fees totaling approximately $3,200,000. Representatives of the firm will
attend the Annual Meeting and have the opportunity to make a statement if they
desire, and will also be available to answer questions.
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR THE APPOINTMENT OF KPMG PEAT
MARWICK LLP AS THE INDEPENDENT AUDITORS AND YOUR PROXY WILL BE SO VOTED UNLESS
OTHERWISE SPECIFIED.
8
<PAGE>
ITEM NO. 3
STOCK OPTION AND LONG-TERM INCENTIVE PLAN OF 1993, AS AMENDED
Stockholders are asked to consider and vote upon a proposal to approve the Stock
Option and Long-Term Incentive Plan of 1993 (the "1993 Plan") as amended. On
June 24, 1996, the Board of Directors adopted the 1993 Plan, as amended, and
recommended it for stockholder approval. The 1993 Plan was originally adopted
and approved by stockholders with a 93.7% favorable vote to help attract and
retain competitively superior employees and to promote long-term growth and
profitability by further aligning employee and stockholder interests.
The amendments to the 1993 Plan do not materially change the basic terms of
the 1993 Plan or increase the number of shares authorized to be granted.
Stockholder approval of the 1993 Plan with these amendments is required to
ensure that certain awards granted under the 1993 Plan will be fully tax
deductible pursuant to Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code").
The amendments to the 1993 Plan are as follows:
(1) A cap of 10% of the authorized shares is imposed on the number of stock
options awarded to any single participant under the 1993 Plan. The
purpose of this amendment and the approval of the 1993 Plan by the
stockholders at this time is to ensure the tax deductibility of certain
awards granted under the 1993 Plan by qualifying such awards as
"performance-based" compensation within the meaning of the Code. In 1993,
the Code was amended to deny the tax deductibility of compensation paid
to the five most highly-compensated executive officers to the extent that
such compensation exceeds $1 million in any one year for any such
officer, unless such compensation qualifies as "performance-based"
compensation under the tax rules; and
(2) Changes are made to conform the 1993 Plan to the updated language used
in the 1995 Salary Replacement Stock Option Plan, approved by the
stockholders in September 1995. These changes conform the definition of
change of control and the language governing adjustments in the event of
stock splits or other corporate events.
SUMMARY OF EXISTING TERMS OF THE 1993 PLAN
The summary of the principal features of the 1993 Plan that follows is subject
to the specific provisions contained in the official text set forth in Appendix
A to this Proxy Statement.
COMMON STOCK AND AWARDS UNDER THE 1993 PLAN. The number of shares of Common
Stock for which stock options, restricted stock and restricted stock units
(applicable to employees of foreign operations only) (collectively, "Awards")
may be granted under the 1993 Plan is 12,000,000, of which 4,000,000 are made
available as a result of the Company's stock repurchases. Awards may be made
under the 1993 Plan until October 1, 1998. All employees with three or more
years of service with the Company, and other employees as expressly approved by
the Compensation Committee of the Board (the "Committee"), are eligible to
receive awards under the 1993 Plan. Awards granted to the Company's executive
officers in fiscal 1996 under the 1993 Plan are shown on the table at page 20.
In the event of a stock split or stock dividend, reorganization or other
similar event affecting the price of Common Stock, the number of shares subject
to the 1993 Plan, the number of shares then subject to Awards and the price per
share payable on exercise of stock options may be appropriately adjusted by the
Committee.
STOCK OPTIONS. The term of the stock options granted under the 1993 Plan
may not exceed ten years plus one month after the date of grant, and may be for
shorter periods at the discretion of the Committee. Options terminate three
months after termination of employment except in the event of the participant's
death or retirement. A stock option may be exercised at such times as may be
established by the Committee at the time of grant, provided that (except as
specifically provided in the
9
<PAGE>
1993 Plan) no stock option may become exercisable less than five years from the
date of grant. The Committee may set the purchase price for a stock option at
not less than 100 percent of the fair market value of the Common Stock at the
grant date.
Outstanding stock options become fully exercisable for one year following a
"Change of Control" (as defined in Section 12 of the 1993 Plan) and, if a
participant is terminated within two years after such an event, such
participant's outstanding stock options at the date of termination will become
fully exercisable for six months.
A stock option may only be exercised upon full payment to the Company of the
option price (i) in cash; (ii) through the delivery of shares of Common Stock
owned by the participant; or (iii) by a combination of cash and Common Stock.
The Common Stock so delivered will have a value for determining payment equal to
the mean of the high and low price of the Common Stock on the New York Stock
Exchange on the exercise date.
RESTRICTED STOCK AND RESTRICTED STOCK UNITS. The 1993 Plan authorizes the
Committee to make awards of restricted stock to any employees or restricted
stock units ("RSU's") to employees of foreign operations, to determine the
number of shares to be awarded (subject to the aggregate limitation of 4% of the
total shares authorized under the 1993 Plan for all Awards), and to establish
the length of the restricted period (provided that no such period shall be less
than three years), the purchase price, if any, to be paid by the participant,
and whether any other restrictions will be imposed. Regular dividends are paid
on restricted stock and dividend equivalents are paid with respect to the RSU's.
Restricted stock and RSU's may vest (in whole or on a pro-rata basis) prior to
the completion of the restricted period in the event of retirement, death,
"Change of Control" or certain terminations of employment, as described in the
1993 Plan.
TAX CONSEQUENCES. Stock option grants under the 1993 Plan are non-qualified
stock options governed by Code Section 83. Generally, no federal income tax is
payable by a participant upon the grant of a stock option. Under current tax
law, if a participant exercises a non-qualified stock option, he or she will be
taxed on the difference between the fair market value of the Common Stock on the
exercise date and the option price. The Company will be entitled to a
corresponding deduction on its income tax return. Participants are responsible
for the payment of all federal, state and local withholding taxes in respect of
the exercise of a stock option or vesting of another Award, and to the extent
permitted by law and Committee rules, participants may authorize the Company to
withhold shares to be issued from a restricted stock award (provided the number
of shares to be issued equals or exceeds 500) or stock option exercise in
satisfaction of the withholding obligation.
AWARDS. Awards of stock options under the 1993 Plan in fiscal 1996 to the
five most highly compensated executive officers are set forth on the table on
page 21. No restricted stock or RSU's were granted in fiscal 1996 under the 1993
Plan to the five most highly compensated executive officers. Awards were made to
the following groups during fiscal 1996 under the 1993 Plan:
<TABLE>
<CAPTION>
STOCK
OPTIONS RESTRICTED STOCK RSU'S
----------- ------------------------ ----------------------
# # $ # $
----------- --------- ------------- --------- -----------
<S> <C> <C> <C> <C> <C>
All current executive officers, as a group......... 837,654 4,250 $ 222,859 0 N/A
All employees who are not executive officers, as a
group............................................. 2,005,796 109,676 $ 6,240,758 5,436 $ 311,918
</TABLE>
ADMINISTRATION. The 1993 Plan is administered by the Committee. The Board
of Directors may terminate, modify or amend the 1993 Plan provided that no such
modification without the approval of the stockholders shall: (i) materially
increase the number of shares which may be issued under the 1993 Plan; (ii)
materially increase the benefits accruing to participants under the 1993 Plan;
or (iii) materially modify the requirements as to eligibility for participating
in the 1993 Plan.
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR THE STOCK OPTION AND
LONG-TERM INCENTIVE PLAN OF 1993 AS AMENDED AND YOUR PROXY WILL BE SO VOTED
UNLESS YOU SPECIFY OTHERWISE.
10
<PAGE>
ITEM NO. 4
AMENDMENTS TO THE GENERAL MILLS, INC. EXECUTIVE INCENTIVE PLAN
The stockholders are asked to consider and vote upon a proposal to approve the
General Mills, Inc. Executive Incentive Plan (the "EIP") as amended. On June 24,
1996, the Board of Directors approved the EIP, as amended, and recommended it
for stockholder approval. The purpose of the EIP is to provide financial rewards
to key executives in recognition of their individual contributions to the
success of the Company.
The amendments to the EIP do not change the type of awards made under the
Plan or materially change the basic terms of the EIP. Stockholder approval of
the EIP, as amended, is required to ensure that certain awards granted under the
EIP will be fully tax deductible pursuant to Section 162(m) of the Code.
The amendments to the EIP are as follows:
(1) A requirement is added that the Compensation Committee of the Board (the
"Committee") establish a maximum amount of Eligible Base Salary Earnings
to be considered in calculating Base Cash Awards for the Top Five
Officers, a Target Incentive Percent for the Top Five Officers and a
rating schedule for the Corporate Rating based upon earnings per share
and return on capital performance. The purpose of this amendment is to
ensure the tax deductibility of certain awards granted under the EIP to
the five most highly-compensated officers by qualifying such awards as
"performance-based" compensation under the Code, see page 9 and
(2) Changes are made to conform the EIP to the updated language used in the
1995 Salary Replacement Stock Option Plan, approved by the stockholders
in September 1995. These changes conform the definition of change of
control and the language governing adjustments in the event of stock
splits or other corporate events.
SUMMARY OF EXISTING TERMS OF THE EIP
A summary of the principal features of the awards under the EIP is found in the
Committee report on page 16 and the full text of the EIP is found in Appendix B.
The following discussion of the EIP is subject to the specific provisions set
forth in Appendix B.
Awards under the EIP have been made pursuant to the terms of a stockholder
resolution originally adopted in 1933, and amended in 1957 and 1968 by the
stockholders (the "1933 resolution"). The 1933 resolution authorizes payment of
annual incentive awards to officers and employees subject to a maximum amount
set by formula for any one fiscal year. The formula provides an aggregate
outside limit of 5% of the Company's earnings before tax (excluding
extraordinary items), after adjusting such earnings by adding back any
deductions for covered incentive awards actually accrued during such fiscal
year; provided that such amount cannot be greater than 10% of the amount by
which such earnings as adjusted exceed 10% of the Company's total stockholders'
equity as of the beginning of such fiscal year.
Each active key management employee is eligible to receive an annual award
under the EIP. Participants are those persons holding positions which most
significantly affect operating results and provide the greatest opportunity to
contribute to current earnings and the future success of the Company. The size
of a participant's base cash incentive award will not exceed the amount
determined by the following formula:
(Eligible Base Salary Earnings) x (Target Incentive Percent) x
(Individual Performance Rating) x (Corporate/Unit Composite Rating) =
(Base Cash Award)
11
<PAGE>
EIP participants are also eligible for awards of restricted stock or
restricted stock units ("RSU's") with a value equal to 25% of the participant's
cash incentive award subject to the participant depositing personally owned
shares (see page 16). Participation in the EIP and all awards to executive
officers are determined by the Committee, which also administers the plan.
Subject to the terms and conditions of the EIP, the Committee may prescribe,
amend and rescind rules and regulations relating to the EIP; however, no
amendment, modification or termination which would affect accrued benefits may
occur after a "Change of Control" (as defined in Part V of the EIP) without the
written consent of a majority of the participants determined as of the day
before such "Change in Control." All restricted stock and restricted stock units
vest and would be delivered to the participant in the event of a "Change in
Control."
AWARDS. Awards under the EIP in fiscal 1996 to the five most highly
compensated executive officers are set forth on the Summary Compensation Table
on page 20. Awards were made to the following groups during fiscal 1996 under
the EIP:
<TABLE>
<CAPTION>
BONUS RESTRICTED STOCK RSU'S
------------- ---------------------- ----------------------
$ # $ # $
------------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C>
All current executive officers, as a group........... $ 5,009,640 16,290 $ 934,720 1,814 $ 104,087
All employees who are not executive officers, as a
group............................................... $ 3,352,080 12,384 $ 710,594 1,198 $ 68,741
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR THE EXECUTIVE INCENTIVE PLAN
AS AMENDED AND YOUR PROXY WILL BE SO VOTED UNLESS YOU SPECIFY OTHERWISE.
ITEM NO. 5
GENERAL MILLS, INC. 1996 COMPENSATION PLAN FOR
NON-EMPLOYEE DIRECTORS
The stockholders are asked to consider and vote upon a proposal to adopt the
General Mills, Inc. 1996 Compensation Plan for Non-Employee Directors (the
"Directors' Plan"). On June 24, 1996, the Board of Directors adopted the
Directors' Plan, subject to stockholder approval. The Directors' Plan is
intended to replace the General Mills, Inc. Retirement Plan for Non-Employee
Directors, which was terminated in February 1996, as well as the presently
existing General Mills, Inc. Compensation Plan for Non-Employee Directors and
the General Mills, Inc. Stock Plan for Non-Employee Directors.
The purpose of the Directors' Plan is to provide a compensation program that
will attract and retain qualified individuals not employed by the Company to
serve as directors and to further align the interests of non-employee directors
with those of the stockholders by providing that a portion of their compensation
will be linked directly to increases in stockholder value.
Participation in the Directors' Plan is limited to members of the Board of
Directors who are not employees of the Company or any of its subsidiaries. The
effective date of the Directors' Plan will be September 30, 1996. The Directors'
Plan will terminate on September 30, 2001, unless earlier terminated by the
Board of Directors.
The summary of the principal features of the Directors' Plan that follows is
subject to the specific provisions in the official text as set forth in Appendix
C to this Proxy Statement.
ANNUAL RETAINER AND MEETING FEES. The Directors' Plan provides that each
non-employee director will receive compensation in the form of an annual
retainer and meeting fees for serving on the Board. (See "Board Compensation and
Benefits" on page 3). Each non-employee director may elect to receive some or
all of this amount in the form of cash, deferred cash and/or Common Stock.
AUTHORIZED SHARES. The Directors' Plan authorizes 250,000 shares of Common
Stock to be issued pursuant to its provisions. Awards of stock options,
restricted stock and restricted stock units will be subject to an appropriate
adjustment in the event of an action which may otherwise cause a dilution or
enlargement of the rights of the non-employee directors under the plan.
12
<PAGE>
STOCK OPTIONS. The Directors' Plan provides that each non-employee director
will be granted a non-qualified option to purchase 2,500 shares of Common Stock
on the effective date of the Directors' Plan (or, if a non-employee director is
first elected after the effective date of the Directors' Plan, on the date the
non-employee director is first elected) and on each successive annual
stockholders' meeting date. The per share price to be paid by the non-employee
director at the time an option is exercised shall be the mean of the high and
the low price of the Common Stock on the New York Stock Exchange on the date of
the grant. Each option will vest and become exercisable on the next annual
meeting date and will expire ten years from the date of the grant. Payment of
the exercise price may be made in cash, Common Stock or a combination thereof.
RESTRICTED STOCK AND RESTRICTED STOCK UNITS. The Directors' Plan also
provides that, on the effective date of the Plan (or, if a non-employee director
is first elected after the effective date of the Directors' Plan, on the date
the non-employee director is first elected) and on the close of business on each
successive annual stockholders' meeting date, each non-employee director may
elect to receive either (i) an award of five hundred (500) shares of restricted
stock ("Restricted Stock"), or (ii) an award of five hundred units representing
the deferred right to receive Common Stock ("RSU's"). Neither Restricted Stock
nor RSU's may be sold, transferred, assigned, pledged or otherwise encumbered or
disposed of until the next annual meeting date and such award will be forfeited
to the Company if the non-employee director terminates service on the Board
prior to the next annual meeting date. Upon election to receive RSU's, each
non-employee director may elect to have his or her award distributed in a single
allotment or in substantially equal annual installments over a period of ten
years from the January 1 following the year in which the participant ceases to
be a director. Each participant awarded RSU's will receive, on the date or dates
elected, one share of Common Stock for each RSU awarded. Quarterly, prior to the
issuance of Common Stock for RSU's awarded under the Directors' Plan, the
Company will pay to each participant holding RSU's an amount equal to the
dividends and other distributions paid by the Company during the prior quarter
on an equivalent number of shares of Common Stock.
TRANSITION BENEFITS. The General Mills, Inc. Retirement Plan for
Non-Employee Directors (the "Retirement Plan") was terminated in February, 1996.
Non-employee directors who accrued rights under the Retirement Plan will receive
a one time grant of RSU's representing the deferred right to receive Common
Stock equal in value to the present value of the non-employee director's accrued
benefit as of September 30, 1996 under the Retirement Plan. The value of each
RSU shall be deemed equal to the mean of the high and the low price of the
Common Stock on the New York Stock Exchange on that date. It is estimated that
approximately 21,000 RSU's representing 21,000 shares of Common Stock will be
utilized for this purpose. Common Stock issued in connection with RSU's granted
pursuant to this transition benefit will be distributed commencing on the
director's retirement from the Board on the date or dates of distribution
elected by the participant or, in the absence of an election, in ten
substantially equal annual installments on the January 1 of each year following
the year in which the non-employee director ceases to be a director. Each
participant awarded RSU's will receive one share of Common Stock for each RSU
awarded and dividend equivalents shall be paid quarterly.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS. The stock options granted under
the Directors' Plan will be non-qualified options under Section 83 of the Code.
The grant of options will not result in taxable income to the director or a tax
deduction for the Company. The exercise of an option will result in taxable
ordinary income to the director and a corresponding deduction to the Company, in
each case equal to the difference between the fair market value of the shares on
the date the option was granted and their fair market value on the date the
option was exercised. Participants are responsible for the payment of all
federal, state and local taxes in respect of awards under the Directors' Plan.
CHANGE OF CONTROL. Stock options granted under the Directors' Plan will
become exercisable, restrictions on the Restricted Stock will lapse and Common
Stock will be immediately distributed in respect of RSU's awarded upon the
occurrence of a "Change in Control" as defined in Part IV of the
13
<PAGE>
Directors' Plan. In addition, a trust has been established to hold assets of the
Company as a reserve for the discharge of certain obligations of the Company's
under the Directors' Plan in the case of such a "Change in Control."
ADMINISTRATION. The Directors' Plan will be administered by the
Compensation Committee (the "Committee") of the Board. The Committee will have
full power to interpret the Directors' Plan, formulate additional details and
regulations for carrying out the Directors' Plan and amend or modify the
Directors' Plan as from time to time it deems proper and in the best interests
of the Company, provided that after a "Change in Control" no amendment,
modification of or action to terminate the Directors' Plan may be made which
would affect compensation earned or accrued prior to such amendment,
modification or termination without the written consent of a majority of
participants determined as of the day before a "Change in Control."
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR THE GENERAL MILLS, INC. 1996
COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS AND YOUR PROXY WILL BE SO VOTED
UNLESS OTHERWISE SPECIFIED.
ITEM NO. 6
STOCKHOLDER RESOLUTION ON CUMULATIVE VOTING
John J. Gilbert and Margaret R. Gilbert, owners of 766 shares, both of 29 East
64th Street, New York, New York 10021, who state that they are co-trustees under
the will of Minnie D. Gilbert for 500 shares of Common Stock and under the will
of Samuel Rosenthal for 800 shares of Common Stock, have notified the Company in
writing that they intend to present the following resolution at the Annual
Meeting:
"RESOLVED: That the stockholders of General Mills, Inc., assembled
in annual meeting in person and by proxy, hereby request the Board
of Directors to take the steps necessary to provide for cumulative
voting in the election of directors, which means each stockholder
shall be entitled to as many votes as shall equal the number of
shares he or she owns multiplied by the number of directors to be
elected, and he or she may cast all of such votes for a single
candidate, or any two or more of them as he or she may see fit."
The statement of the stockholders in support of the resolution is as
follows:
"Continued strong support along the lines we suggest were shown at the 1994
annual meeting when 20%, 3,414 owners of 23,842,590 shares, were cast in favor
of this proposal. The vote against included 8,686 unmarked proxies."
"Our former vice chairman, Mark H. Willes, left the company to go to the
Times Mirror Company in Los Angeles, which has cumulative voting."
"A California law provides that all state pension holdings and state college
funds, invested in shares must be voted in favor of cumulative voting proposals,
showing increasing recognition of the importance of this democratic means of
electing directors."
"The National Bank Act provides for cumulative voting. In many cases
companies get around it by forming holding companies without cumulative voting.
Banking authorities have the right to request the capability of directors to be
on banking boards. In many cases authorities come in after and say the director
or directors were not qualified. We were delighted to see the SEC has finally
taken action to prevent bad directors from being on public companies. The SEC
should have hearings to prevent such persons becoming directors before they harm
investors."
"We think cumulative voting is the answer to find new directors for various
committees. Some recommendations have been made to carry out the CERES 10
points. The 11th should be, in our opinion, having cumulative voting and ending
staggered boards.
14
<PAGE>
"Many successful corporations have cumulative voting. For example, Penzoil
defeated Texaco in that famous case. Ingersoll-Rand also having cumulative
voting won two awards. FORTUNE magazine ranked it second in its industry as
'America's Most Admired Corporations' and the WALL STREET TRANSCRIPT noted 'on
almost any criteria used to evaluate management, Ingersoll-Rand excels.' In 1994
and 1995 they raised their dividend."
"Lockheed-Martin, as well as VWR Corporation now have a provision that if
anyone has 40% of the shares cumulative voting applies, it applies at the latter
company."
"In 1995 American Premier adopted cumulative voting. Allegheny Power System
tried to take away cumulative voting, as well as put in a stagger system, and
stockholders defeated it, showing stockholders are interested in their rights."
"If you agree, please mark your proxy for; otherwise, it is automatically
cast against it, unless you have marked to abstain."
RESOLVED, THAT THE BOARD OF DIRECTORS FAVORS A VOTE AGAINST THE ADOPTION OF
THE STOCKHOLDER RESOLUTION ON CUMULATIVE VOTING FOR THE FOLLOWING REASONS:
The Board of Directors continues to believe that in order to be effective, each
member must feel a responsibility to represent all stockholders. Cumulative
voting is undesirable because it is directed toward the election of one or more
directors by a special group of stockholders. Directors so elected might be
principally concerned with representing and acting in the interest of the
special group that elected them rather than in the interest of the stockholders
as a whole. Cumulative voting also introduces the possibility of partisanship
among Board members which could destroy the ability of the Board to work
together. These factors could operate to the disadvantage of the Company and its
stockholders.
The present method of electing directors, where each director is elected by
majority vote of the stockholders as a whole, permits the directors to
administer the affairs of the Company for the benefit of all stockholders. We
believe that each director should serve on the Board only if the majority of the
stockholders elect the director to hold that position.
An examination of the past performance and the achievements of the
management team selected by the Board of Directors supports the present method
of electing the Board, and the Board of Directors is confident that this method
will continue to work as successfully in the future as it has in the past, for
the benefit of all stockholders.
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE AGAINST THIS STOCKHOLDER PROPOSAL
AND YOUR PROXY WILL BE SO VOTED UNLESS YOU SPECIFY OTHERWISE.
OTHER BUSINESS
The Company is not aware of any business to be acted upon at the Annual Meeting
other than that which is in this Proxy Statement. In the event that any other
business requiring a stockholder vote is properly presented at the meeting, the
holders of the proxies will vote your shares in accordance with their best
judgment.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
composed entirely of independent outside directors (see pages 3-4). The
Committee is responsible for setting and administering the policies that govern
both annual compensation and stock ownership programs. The Committee annually
evaluates General Mills' corporate performance, actual compensation and share
ownership compared with large consumer products companies, as well as a broader
group of leading industrial companies.
The compensation programs of the Company are based on performance. Base
salaries are generally lower than comparable companies in the consumer products
business sector, coupled with a highly
15
<PAGE>
leveraged incentive system that will pay more with good performance and less
with below par performance. The Committee and management believe that broad and
deep employee stock ownership effectively motivates the building of stockholder
wealth and aligns the interests of employees with those of the stockholders. The
Committee has set specific stock ownership objectives for key management
employees and established programs that encourage all employees to have some
ownership interest in the Company.
EXECUTIVE INCENTIVE PLAN DESCRIPTION
Awards under the Executive Incentive Plan ("EIP") are made annually to key
management employees and are based on the following factors: corporate
performance, business unit performance and personal performance. The corporate
performance rating is based on the Company's percentage growth in earnings per
share over the prior year and its return on capital. The Committee believes that
these two factors are the primary determinants of share price over time. For
historical performance on these two measures, please refer to the inside front
cover of the 1996 Annual Report. Business unit ratings are based primarily on
profit performance while market share performance, new product development,
workplace diversity progress and other factors are also considered. Personal
ratings are based on each executive's accomplishments versus agreed upon annual
objectives and include such qualitative factors as the quality of the strategic
plan, progress in organizational and management development, as well as
industry, public affairs and civic involvement.
Corporate and business unit ratings can range from 0 to 1.80 with top
quartile performance represented by a 1.50 or higher rating. Personal ratings
can range from 0 to 1.50. For senior executive officers, the participant's
target incentive rate (a percentage of base salary that increases for positions
of greater responsibility within the Company) is multiplied both by the
individual's performance rating and by the corporate rating to determine the
cash incentive award. Both business unit and personal ratings are heavily
dependent on the achievement of financial objectives.
Under the stock matching provisions of the EIP each participant may deposit
with the Company shares of Common Stock having a value equal to 25% of the
participant's cash incentive award. The Company issues one share of restricted
Common Stock for each share that the participant originally deposits. The
restricted shares vest 50% at three years and 50% at six years, provided the
participant's shares remain on deposit with the Company. A participant may elect
to receive the dividends paid on all stock held in the participant's account or
reinvest such dividends in Common Stock. Shares granted under the EIP are
included in the Summary Compensation Table on page 20 under the "Restricted
Stock Awards" heading. Cash incentive awards under the EIP are included in that
table under the "Bonus" heading.
Receipt of cash incentive awards under the EIP may be deferred to a
subsequent date or to retirement. Participants age 55 or older may elect not to
participate in the stock matching provisions of the EIP and to receive an
additional cash award equal to 15% of the cash incentive award, or they may
participate on a partial basis, depositing shares having a value of 5%, 10% or
15% of the cash incentive award, receiving in those circumstances 12%, 9% or 6%,
respectively, as an additional cash award. A participant under age 55 who elects
not to deposit shares does not receive an additional cash award.
PERFORMANCE EVALUATION
The Committee meets without the Chief Executive Officer to evaluate his
performance and reports on that evaluation to the independent directors of the
Board.
In view of the strong results for fiscal 1996, the Committee determined that
the corporate rating should be 1.80 on a scale of 0 to 1.80 and that the
personal performance rating for the Chief Executive Officer should be 1.50 on a
scale of 0 to 1.50. Personal performance ratings for other executive officers
were also at or near the top of the scale for fiscal 1996. These performance
ratings were based on earnings per share growth before unusual items of 28% and
return on capital before unusual items of 28.7% in fiscal 1996. The incentive
payments made to the five reporting officers are described in the
16
<PAGE>
Summary Compensation Table on page 20. Four of the five reporting officers
listed in the table elected to receive a stock option grant in lieu of a merit
increase in fiscal 1996. The fifth was not eligible for this grant in fiscal
1996.
STOCK OWNERSHIP PROGRAMS
The stockholders approved the Stock Option and Long-Term Incentive Plan in 1993
(the "1993 Plan") and the 1995 Salary Replacement Stock Option Plan in 1995 with
favorable votes of 93.7% and 91.3% respectively. The table on page 21 summarizes
the options granted in fiscal 1996 to all employees and to the top five
executive officers. Included in the totals are options granted under three
different programs: regular stock options, deposit stock options, and options in
lieu of a merit increase in base salary.
Regular stock options are granted to the named officers and other employees
based on their potential impact on corporate results (i.e. the person's level of
responsibility in the organization) and on their individual performance. A total
of 9,501 employees were granted options on 4,127,602 shares under that program
in fiscal 1996. The size of regular stock option grants to the Chief Executive
Officer and other executive officers is periodically reviewed against option
grants made by other large consumer products companies to their CEO and other
senior executives. The Company's option grants rank in size above the median
range of option grants made by the comparative organizations, because of (i) the
payment of generally lower base salaries (described above), and (ii) the
Company's emphasis on employee stock ownership and reliance on option grants as
the fundamental means of long-term incentive compensation, both of which are
intended to maximize personal performance of Company managers and align their
interests with shareholders.
The deposit stock option program was introduced in 1987 to encourage
increased stock ownership. The size of this option grant (number of shares times
the fair market value of the Common Stock on the date of grant) is equal to the
executive's prior year incentive award. For the option to become fully
exercisable, the optionee must place on deposit with the Company one share of
owned Common Stock for every two option shares granted and leave the shares on
deposit until five years from the grant date.
The salary replacement option program enables an executive to receive stock
options as an alternative to eligibility for a merit increase. A total of 774
employees participated in this program in fiscal 1996. The size of an executive
officer's merit increase is determined on the basis of his or her
accomplishments against pre-established annual goals and reflected in the
individual performance rating discussed above. The size of the option grant is
based on the estimated present value of the merit increase and pay-related
benefits (e.g. annual incentive, savings plan match, pension, etc.) foregone
over the term of the option and the present value of the projected stock option
value, assuming an 8.0% annual growth rate in the Common Stock.
PERFORMANCE UNITS
The Company discontinued granting performance units in 1993. Some vested
performance units that were granted under the 1984 and 1988 plans remain
outstanding. Performance units are payable in cash and an optionee may withdraw
them as an alternative to the exercise of regular stock options. The exercise of
an option or withdrawal of the corresponding performance units cancels the other
on a one-for-one basis. As of August 1, 1996, only the 1991 and 1992 performance
units had a value in excess of the value of the stock option available for
exercise as an alternative to the performance units.
RESTRICTED STOCK
The 1993 Plan authorizes the Committee to make awards to selected employees of
restricted stock or restricted stock units (for employees of foreign operations)
of up to 4% of the shares authorized under the plan, and in that connection to
determine the number of shares to be awarded, the length of the restricted
period, the purchase price, if any, to be paid by the participant, and whether
any other restrictions will be imposed in respect of such awards.
17
<PAGE>
The majority of restricted shares have been and will be granted as part of
the stock matching program for participants in the Company's management
incentive plans (not including the executive officers of the Company whose
restricted stock awards are issued under the EIP, described above), requiring
the participant to place on deposit one share of Common Stock owned for each
share of restricted stock awarded. The size of each restricted stock award in
these programs is equal in value to 15% of the participant's regular cash
incentive award.
SUMMARY
The Committee is satisfied that the compensation and long-term incentive plans
provided to the executive officers of the Company are structured and operated so
as to create strong linkage and alignment with the long-term best interests of
the Company and its stockholders.
COMPENSATION COMMITTEE
Richard M. Bressler, Chair
Livio D. DeSimone
Kenneth A. Macke
George Putnam
Michael D. Rose
18
<PAGE>
TOTAL RETURN TO STOCKHOLDERS
Set forth below are line graphs comparing the annual percentage in cumulative
total shareholder return for holders of General Mills Common Stock with the
cumulative total return of the Standard & Poor's 500 Stock Index and the
Standard & Poor's Food Index.
COMPARISON OF CUMULATIVE TOTAL RETURN ON $100 INVESTED IN
GENERAL MILLS COMMON STOCK IN MAY 1990 VS. S&P 500
AND S&P FOOD INDICES.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TOTAL RETURN INDEX GENERAL MILLS S&P FOOD S&P 500
<S> <C> <C> <C>
May 91 100 100 100
May 92 112 106 114
May 93 118 111 127
May 94 102 110 132
May 95 117 135 156
May 96 141 165 207
</TABLE>
COMPARISON OF CUMULATIVE TOTAL RETURN ON $100 INVESTED IN
GENERAL MILLS COMMON STOCK FROM MAY 1995 THROUGH MAY 1996 VS. S&P 500
AND S&P FOOD INDICES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TOTAL RETURN INDEX GENERAL MILLS S&P FOOD S&P 500
<S> <C> <C> <C>
May-95 100 100 100
May-96 121 123 133
</TABLE>
On May 28, 1995, the Company spun off its restaurant operations (as Darden
Restaurants, Inc.) to its stockholders. The lower chart is presented to show the
Company's performance solely as a consumer foods company since the date of the
restaurant spin-off.
19
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
--------------------------------
ANNUAL COMPENSATION AWARDS
- - -------------------------------------------------------------------------------- --------------------------------
RESTRICTED
OTHER ANNUAL STOCK ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARD(S) OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($) ($)(1) (#) ($)(2)
- - ------------------------------ ---- ----------- ------------- ------------ ---------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
S. W. SANGER 1996 600,000 810,000 -- 202,551 224,800 33,699
Chairman of the Board and 1995 472,917 0 -- -- 124,811(3) 12,997
Chief Executive Officer 1994 398,125 147,700 -- 36,908 285,482(3) 19,595
C. W. GAILLARD 1996 475,000 707,940 -- 0 129,196 28,712
President 1995 364,792 72,000 -- 17,967 108,375(3) 98,040
1994 304,587 231,923 -- 57,975 131,245(3) 103,742
R. G. VIAULT 1996 189,423 437,300(4) 1,304,553(5) 100,000 8,333
Vice Chairman 1995 -- -- -- -- -- --
1994 -- -- -- -- -- --
S. R. DEMERITT 1996 290,344 236,100 14,663(6) 58,987 44,806 163,166
Executive Vice President 1995 254,188 183,000 23,119(6) 37,170 40,622(3) 72,033
1994 246,667 89,000 23,009(6) 22,210 34,105(3) 99,651
S. S. MARSHALL 1996 250,000 353,100(7) 63,233 39,542 7,343
Senior Vice President, 1995 146,795 296,800(7) -- 1,272,779(8) 27,540(3) 0
General Counsel, Secretary 1994 -- -- -- 0
</TABLE>
- - ------------------------
(1) The amounts in this column reflect the value of the restricted stock or
RSU's awarded annually under the EIP, except as described in notes (5) and
(8). Recipients must deposit with the Company one personally-owned share of
Common Stock for each share of restricted stock awarded. The restricted
shares vest 50% at three years and 50% at six years, provided the
participant's shares remain on deposit until the end of the restricted
period. Regular dividends are paid on the restricted shares. Restricted
stock under the EIP vests in the event of a change in control. At the end of
fiscal 1996, the number and value of the aggregate restricted stockholdings
for the named officers were:
<TABLE>
<S> <C> <C>
S. W. Sanger 4,050 shares $ 235,659
C. W. Gaillard 5,761 $ 335,218
R. G. Viault 23,033 $1,340,233
S. R. Demeritt 3,245 $ 188,818
S. S. Marshall 20,762 $1,208,089
</TABLE>
(2) The amounts for all officers, other than Mr. Gaillard and Mr. Demeritt, are
the Company's contributions or allocations relating to defined contribution
(savings) plans (tax-qualified and supplemental) on behalf of the named
officers. The amounts for Mr. Gaillard also include $85,586 in 1994 relating
to his overseas assignment with Cereal Partners Worldwide which ended
January 1, 1994. The amounts for Mr. Demeritt also include $139,234 in 1996,
$57,926 in 1995 and $88,997 in 1994 relating to his foreign assignments in
Canada and Cereal Partners Worldwide.
(3) The number and exercise price of these stock options were adjusted for the
Darden Restaurants, Inc. distribution to Company stockholders effective May
28, 1995, pursuant to the terms of the applicable plans, to preserve the
value of the benefits granted under such plans as a result of the
distribution.
(4) Mr. Viault became an employee of the Company effective January 15, 1996.
This amount includes a hiring bonus of $200,000.
(5) This amount includes the value of Company restricted stock granted to Mr.
Viault to compensate him for restricted stock, non-vested stock option gains
and other compensation forfeited as a result of leaving his prior employer.
The restricted stock vests in 1997.
20
<PAGE>
(6) This amount represents the "above-market" portion of the earnings on
deferred compensation credited and paid to Mr. Demeritt each year based on
the three-year performance of the Canada Foods division. Under the Company's
Deferred Compensation Plan, election of such a crediting rate was available
only to eligible key managers with respect to the business operation for
which they are responsible. This program is no longer offered.
(7) Ms. Marshall became a Company employee effective October 31, 1994. The
fiscal 1996 amount includes a deferred hiring bonus of $100,000; the fiscal
1995 amount includes a hiring bonus of $150,000.
(8) This amount includes the value of Company restricted stock granted to Ms.
Marshall to compensate her for restricted stock, non-vested stock options
and pension benefits lost as a result of leaving her former employer.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS (1) FOR OPTION TERM ($)(2)
- - ---------------------------------------------------------------------------- -----------------------------------------------
% OF TOTAL
OPTIONS
GRANTED TO
OPTIONS EMPLOYEES EXERCISE
GRANTED IN FISCAL PRICE EXPIRATION 0%
NAME (#) YEAR ($/SHARE) DATE ($)(3) 5% ($) 10% ($)
- - ---------------------- ------------ ---------- ----------- ---------- ------ ----------------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Sanger 200,000(4) 4.85% 52.44 7/26/05 0 6,662,659 16,923,383
24,800(5) 0.60% 52.31 10/18/05 0 824,122 2,093,297
Gaillard 100,000(4) 2.42% 52.44 7/26/05 0 3,331,330 8,461,691
27,900(5) 0.68% 52.31 10/18/05 0 927,137 2,354,959
1,296(6) 0.03% 55.56 1/11/06 0 45,743 116,188
Viault 100,000(7) 2.42% 54.06 2/15/06 0 3,434,242 8,723,094
Demeritt 25,000(4) 0.61% 52.44 7/26/05 0 832,832 2,115,423
16,900(5) 0.41% 52.31 10/18/05 0 561,599 1,426,481
2,906(6) 0.07% 55.56 1/11/06 0 102,568 260,527
Marshall 25,000(4) 0.61% 52.44 7/26/05 0 832,832 2,115,423
11,900(5) 0.29% 52.31 10/18/05 0 395,445 1,004,445
2,642(6) 0.06% 55.56 1/11/06 0 93,250 236,859
All Stockholders NA NA NA NA 0 5,326,698,597(8) 13,530,003,040(8)
All Optionees 4,127,602 100% 52.55(9) (9) 0 137,792,457 349,997,574
As a % of All
Stockholders Gain NA NA NA NA NA 2.6% 2.6%
</TABLE>
- - ------------------------
(1) All options are granted at the fair market value of the Common Stock on the
grant date and generally expire 10 years and one month from the grant date.
All options vest in the event of a change of control. Options include the
right to pay the exercise price in cash or previously-acquired Common Stock
and the right to have shares withheld by the Company to pay withholding tax
obligations due in conjunction with the exercise.
(2) These assumed values result from certain prescribed rates of stock price
appreciation. The actual value of these option grants is dependent on future
performance of the Common Stock and overall stock market conditions. There
is no assurance that the values reflected in this table will be achieved.
The Company did not use an alternative formula for a grant date valuation,
as it is not aware of any formula which will determine with reasonable
accuracy a present value based on future unknown or volatile factors.
21
<PAGE>
(3) No gain to the optionees is possible without stock price appreciation, which
will benefit all stockholders commensurately. Zero percent stock price
appreciation will result in zero dollars for the optionee.
(4) This stock option grant under the 1993 Plan becomes exercisable on June 26,
2000.
(5) This option, granted under the 1990 Salary Replacement Stock Option Plan,
benefits the Company by reducing the cash compensation paid to executives,
with corresponding reductions in cash bonuses, lower pension accruals and
similar effects on other benefits which are tied to base salary. It further
increases the percentage of key employee compensation and benefits tied to
stock ownership, in keeping with the Company's philosophy to more closely
align stockholder and employee interests. This option becomes exercisable
over a four-year period beginning on the grant date.
(6) To encourage retention of Common Stock, this deposit stock option grant
under the 1993 Plan (which becomes exercisable five years from the grant
date) requires the deposit of one share of owned Common Stock for every two
option shares granted. The number of option shares granted is equal to the
value of the executive's prior year cash incentive payment.
(7) This grant was made to Mr. Viault upon his employment as Vice Chairman and
will vest five years from the grant date.
(8) "All Stockholders" value is calculated from $52.55, the weighted average
exercise price for all options awarded in fiscal 1996, based on the
outstanding shares of Common Stock on May 26, 1996.
(9) Exercise price shown is a weighted average of all options awarded in fiscal
1996. Options expire on various dates through the year 2006.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES ACQUIRED VALUE OPTIONS AT 5/26/96 (#) OPTIONS AT 5/26/96 ($)(1)
ON EXERCISE REALIZED -------------------------- --------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - --------- ----------------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Sanger 0 0 298,555 654,852 6,709,555 5,710,422
Gaillard 34,030 1,193,691 333,580 381,661 7,311,301 3,354,519
Viault 0 0 0 100,000 0 412,750
Demeritt 0 0 192,944 132,317 4,824,160 972,444
Marshall 0 0 2,390 64,702 13,988 539,510
</TABLE>
- - ------------------------
(1) Value of unexercised options equals fair market value of the shares
underlying in-the-money options at May 26, 1996 ($58.1875), less the
exercise price, times the number of in-the-money options outstanding.
22
<PAGE>
DEFINED BENEFIT RETIREMENT PLANS
<TABLE>
<CAPTION>
30 OR MORE
FINAL AVERAGE 10 YEARS OF 15 YEARS OF 20 YEARS OF 25 YEARS OF YEARS OF
EARNINGS (AS DEFINED) SERVICE SERVICE SERVICE SERVICE SERVICE*
- - ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 100,000 $ 16,666 $ 25,000 $ 33,333 $ 41,666 $ 50,000
300,000 50,000 5,000 10,000 25,000 50,000
500,000 83,333 25,000 66,666 08,333 50,000
600,000 100,000 150,000 200,000 250,000 300,000
700,000 116,666 175,000 233,333 291,666 350,000
800,000 133,333 200,000 266,666 333,333 400,000
900,000 150,000 225,000 300,000 375,000 450,000
1,000,000 166,666 250,000 333,333 416,666 500,000
1,100,000 183,333 275,000 366,666 458,333 550,000
1,200,000 200,000 300,000 400,000 500,000 600,000
1,300,000 216,666 325,000 433,333 541,666 650,000
1,400,000 233,333 350,000 466,666 583,333 700,000
1,500,000 250,000 375,000 500,000 625,000 750,000
1,600,000 266,666 400,000 533,333 666,666 800,000
1,700,000 283,333 425,000 566,666 708,333 850,000
</TABLE>
- - ------------------------
* No additional benefits accrue after 30 years of service.
The table above sets forth the pension benefits payable under the Company's
Retirement Income Plan (the "RIP") to the persons named in the Summary
Compensation Table, showing the estimated annual aggregate benefits payable at
normal retirement (age 65) for various classifications of earnings and years of
benefit service. This table is based on the maximum benefit under the RIP of 50%
of Final Average Earnings for a participant with 30 years of benefit service,
less 50% of the employee's projected Social Security benefit. Final Average
Earnings is the average of the employee's five highest consecutive years'
remuneration. Such remuneration generally equals the salary and bonus reported
in the Summary Compensation Table plus the value of vested Common Stock granted
under the EIP. The effects of integration with Social Security benefits have
been excluded from the table, because the amount of the reduction in benefits
due to integration varies depending on the participant's age at the time of
retirement and changes in the Social Security laws. The table does not reflect
any limitations on benefits imposed by federal law. The Company's Supplemental
Retirement Plan provides for the payment of additional amounts to certain
executive officers (including certain officers named in the Summary Compensation
Table) so that they will receive in the aggregate, the benefits they would have
been entitled to receive had federal law not imposed maximum limitations.
The officers listed in the Summary Compensation Table are credited,
respectively, with the following full years of benefit service under the RIP: S.
W. Sanger, 22 years; S. R. Demeritt, 26 years; C. W. Gaillard, 30 years; S. S.
Marshall, 1 year; and R. G. Viault, 0 years.
In addition, the Company has agreed to provide supplemental retirement
benefits to R. G. Viault to compensate for the difference, if any, between the
pension benefit he would have received from his previous employer's retirement
plan and the benefit he receives from the combination of his previous employer's
plan and the Company's plans.
CHANGE IN CONTROL ARRANGEMENTS
The Company maintains management continuity agreements with its executive
officers providing for guaranteed severance payments equal to three times the
annual compensation of the officer (salary plus cash incentive award) and
continuation of health and similar benefits for a three-year period if the
officer is terminated within two years after a change of control. These
agreements also provide for a cash payment of the amount necessary to insure
that the foregoing payments are not subject to reduction due to the imposition
of excise taxes payable under Code Section 4999 or any similar tax.
23
<PAGE>
The Company has two nominally-funded trusts to provide for payments under
its non-qualified deferred compensation plans, including the directors'
compensation plan, the EIP, the management continuity agreements and the
Supplemental Savings and Retirement Plans. Full funding is required in the event
of a change of control.
STOCKHOLDER PROPOSALS FOR THE 1997 ANNUAL MEETING
Any stockholder proposal intended to be presented at the 1997 Annual Meeting and
included in the Company's proxy statement must be received at the principal
executive offices of the Company by the close of business on April 25, 1997.
Proposals should be sent to the attention of the Secretary.
YOUR VOTE IS IMPORTANT!
Please sign and promptly return your proxy card in the enclosed envelope.
24
<PAGE>
APPENDIX A
GENERAL MILLS, INC.
STOCK OPTION AND LONG-TERM INCENTIVE PLAN OF 1993, AS AMENDED
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
A-1
<PAGE>
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. The number of
shares of Common Stock subject to Stock Options granted under this Plan to any
one Participant shall not exceed 10% of the total number of shares of Common
Stock which may be issued under this Plan. 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, the shares of
Common Stock subject thereto shall again be available for Awards under the Plan.
In the event that the Committee determines that any dividend or other
distribution (whether in the form of cash, Common Stock, securities of a
subsidiary of the Company, other securities or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase or exchange of Common
Stock or other securities of the Company, issuance of warrants or other rights
to purchase Common Stock or other securities of the Company, or other similar
corporate transaction or event affects the Common Stock such that an adjustment
is determined by the Committee to be appropriate to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the Committee may, in its sole discretion and in such
manner as it may deem equitable, adjust any or all of (i) the number of shares
of Common Stock subject to the Plan, (ii) the number of shares of Common Stock
subject to outstanding Awards, and (iii) the grant or exercise price with
respect to any Option and, if deemed appropriate, make provision for a cash
payment to the holder of an outstanding Option; provided, that the number of
shares of Common Stock subject to any Award shall always be a whole number.
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.
A-2
<PAGE>
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
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<PAGE>
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 Option shall become immediately and fully exercisable for a
period of one (1) year following the date of the following occurrences, each
constituting a "Change of Control":
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act), (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
1934 Act) of voting securities of the Company where such acquisition causes
such Person to own 20% or more of the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Voting Securities"); provided,
however, that for purposes of this subsection (a), the following
acquisitions shall not be deemed to result in a Change of Control: (i) any
acquisition directly from the Company, (ii) any acquisition by the Company,
(iii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company or (iv) any acquisition by any corporation pursuant to a transaction
that complies with clauses (i), (ii) and (iii) of subsection (c) below; and
provided, further, that if any Person's beneficial ownership of the
Outstanding Voting Securities reaches or exceeds 20% as a result of a
transaction described in clause (i) or (ii) above, and such Person
subsequently acquires beneficial ownership of additional voting securities
of the Company, such subsequent acquisition shall be treated as an
acquisition that causes such Person to own 20% or more of the Outstanding
Voting Securities; or
(b) Individuals who, as of the date hereof, constitute the Board of
Directors (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, was approved by a
vote of at least of a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member
of the Incumbent Board, but excluding, for this purpose, any such individual
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<PAGE>
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board; or
(c) The approval by the shareholders of the Company of a reorganization,
merger or consolidation or sale or other disposition of all or substantially
all of the assets of the Company ("Business Combination") or, if
consummation of such Business Combination is subject, at the time of such
approval by stockholders, to the consent of any government or governmental
agency, the obtaining of such consent (either explicitly or implicitly by
consummation); excluding, however, such a Business Combination pursuant to
which (i) all or substantially all of the individuals and entities who were
the beneficial owners of the Outstanding Voting Securities immediately prior
to such Business Combination beneficially own, directly or indirectly, more
than 60% of, respectively, the then outstanding shares of Common Stock and
the combined voting power of the then outstanding voting securities entitled
to vote generally in the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including, without
limitation, a corporation that as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly
or through one or more subsidiaries) in substantially the same proportions
as their ownership, immediately prior to such Business Combination of the
Outstanding Voting Securities, (ii) no Person (excluding any employee
benefit plan (or related trust) of the Company or such corporation resulting
from such Business Combination) beneficially owns, directly or indirectly,
20% or more of, respectively, the then outstanding shares of common stock of
the corporation resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of such corporation
except to the extent that such ownership existed prior to the Business
Combination and (iii) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or
(d) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
After such one (1) year 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
(a), (b), (c) or (d), all outstanding Options at that date of termination shall
become immediately exercisable for a period of six (6) months, subject to the
provisions of Section 7.
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
A-5
<PAGE>
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.
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<PAGE>
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
As Amended through June 24, 1996
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<PAGE>
APPENDIX B
GENERAL MILLS, INC.
EXECUTIVE INCENTIVE PLAN, AS AMENDED
PART I
GENERAL PROVISIONS
A. OBJECTIVE OF THE PLAN
It is the intent of General Mills, Inc. (the "Company") to provide financial
rewards to key executives in recognition of individual contributions to the
success of the Company under the provisions of this Executive Incentive Plan
(the "Plan").
Participant awards shall be based on the comparative impact of the position
to the overall corporate results as measured by the position level, salary of
the participant, and the degree to which the individual contributes to
division/subsidiary and corporate results.
B. ELIGIBILITY
Any active key management employee of the Company or any of its
subsidiaries, including such members of the Board of Directors (the "Board") and
the Chairman of the Board (the "Chairman") as are actively employed by the
Company or its subsidiaries, shall be eligible to participate in the Plan.
Eligibility shall not carry any rights to participation nor to any fixed awards
under the Plan.
Employees on a commission basis, those who are members of any other Company
incentive compensation plan, except the Stock Option and Long-Term Incentive
Plans of General Mills, Inc., and persons acting in a consulting capacity shall
not be eligible.
C. PARTICIPATION
Within 90 days after the beginning of each fiscal year of the Company (the
"Plan Year"), management shall recommend from those eligible a list of proposed
participants in the Plan, and the Compensation Committee of the Board (the
"Committee") shall determine the participants for the current Plan Year.
Participants shall be those persons holding positions which most significantly
affect operating results and provide the greatest opportunity to contribute to
current earnings and the future success of the Company. During the year, by
action of the Committee, other participants may be added because of promotion or
for other reasons warranting their inclusion, or participants may be removed
from active participation because of demotion or other reasons warranting their
exclusion.
PART II
BASE CASH AWARDS
The size of a participant's base cash incentive award ("Base Cash Award")
under this Plan shall not exceed the amount determined by the following formula:
(Eligible Base Salary Earnings) x (Target Incentive Percent) x
(Individual Performance Rating) x (Corporate/Unit Composite Rating) =
(Base Cash Award)
A. ELIGIBLE BASE SALARY EARNINGS
The Eligible Base Salary Earnings is the total amount of regular base pay
actually paid to a Plan participant during the portion of the year the
participant is covered by the Plan. Within 90 days after the beginning of the
Plan Year, the Committee shall establish in writing the maximum amount of
Eligible Base Salary Earnings to be considered in computing Base Cash Awards for
the Chief Executive Officer and the four most highly compensated officers other
than the Chief Executive Officer (the "Top Five Officers"). Base Cash Awards for
the Top Five Officers shall be determined using the lesser of (1) the maximum
amount or (2) actual Eligible Base Salary Earnings.
B-1
<PAGE>
B. TARGET INCENTIVE PERCENT
The Target Incentive Percent for all participants other than the Top Five
Officers shall be determined by the Senior Vice President, Personnel using the
following guidelines:
1. For participants in evaluated jobs, the Target Incentive Percent
will be determined based on job level at the time participation in the Plan
commences. Persons transferred to a higher or lower job level during a Plan
Year will have their Target Incentive Percent revised as of the effective
date of the change in position.
2. For participants in unevaluated jobs, the Target Incentive Percent
shall be established in a manner consistent with the Target Incentive
Percent established for evaluated jobs.
3. The Target Incentive Percent for the Top Five Officers shall be
established in writing by the Committee within 90 days after the beginning
of each Plan Year.
C. INDIVIDUAL PERFORMANCE RATING
Individual performance for the Plan Year will be determined as follows:
1. At the beginning of each Plan Year, each participant will develop
written objectives for the year which are directly related to specific job
accountabilities.
2. The individual objectives will be reviewed with each participant's
manager for acceptance and will become the primary basis for establishing
the Individual Performance Rating for the year. For the Chief Executive
Officer, such objectives will be reviewed and approved by the Committee.
Within 90 days after the beginning of each Plan Year, the Committee shall
establish the maximum Individual Performance Rating for participants, which
shall not exceed 1.50.
3. Near the end of each Plan Year, each participant will submit to his
or her manager, a Summary of Accomplishments related to individual
performance during the year. Based on this information and other information
related to individual performance or job accountabilities, the manager will
assign an individual rating from the following range:
<TABLE>
<C> <S>
.0 - .49 Unsatisfactory
.50 - .89 Improvement Needed
.90 - 1.19 Satisfactory
1.20 -
1.39 Superior
1.40 -
1.50 Outstanding & Exceptional
</TABLE>
D. UNIT/CORPORATE PERFORMANCE RATING
1. UNIT RATING. Near the end of the Plan Year, each unit manager will
submit to his or her superior, a Unit Achievement Summary, which outlines
the performance of his or her respective unit during the Plan Year and
relates directly to the annual program, the Company's long-range plans and
other key operating objectives. This Unit Achievement Summary will be used,
along with other information related to unit performance, in establishing a
unit rating with a range of .0 (Unacceptable) to 1.80 (Outstanding and
Exceptional).
2. CORPORATE RATING. Within 90 days after the beginning of each Plan
Year, the Committee shall establish, in writing, a rating schedule based
upon the Company's growth in Earnings Per Share and the Company's Return on
Capital for the Plan Year. Based on this schedule, the Committee will, at
the end of each Plan Year, affirm the performance achieved and establish the
corporate rating for the year.
3. UNIT/CORPORATE WEIGHTINGS. The ratings established in 1. and 2.
above shall be weighted based on job level according to the following
guidelines:
<TABLE>
<CAPTION>
CORPORATE
PORTION UNIT PORTION
------------- ------------
<S> <C> <C>
Senior Corporate Officers 100% N/A
Operating General Managers and Corporate Staff Officers 50% 50%
All Other Officers 25% 75%
</TABLE>
Within 90 days after the beginning of each Plan Year, individual
participants will be notified of any change in the specific unit/corporate
weighting that would apply for the Plan Year.
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<PAGE>
E. REVIEW AND APPROVAL OF RATINGS
All individual and unit ratings will be determined by the participant's
manager and reviewed and approved by one additional level of management. In
addition, the Chief Executive Officer shall review and approve all ratings prior
to their submission to the Committee.
The final ratings and incentive award amounts shall be reviewed and approved
by the Committee which shall have full authority and discretion to set all final
Base Cash Awards. The Base Cash Award for the Top Five Officers cannot exceed
the amount calculated in accordance with the corporate rating schedule, the
maximum earnings and the Target Incentive Percent established by the Committee
at the beginning of the Plan Year. The Committee may reduce, but not increase,
any Base Cash Award for the Top Five Officers.
All awards under this Plan for corporate officers and that portion of the
award related to corporate performance of all other participants (including
amounts attributable to stock matching under Part III) shall be subject to the
1933 Shareholder Resolution on Profit Sharing, as amended (the "1933
Resolution"). All other awards, if any, under this Plan shall be considered
ordinary bonuses under the terms and conditions of the 1933 Resolution.
PART III
STOCK MATCHING PROVISIONS
A. ALTERNATIVES FOR PARTICIPATION IN STOCK MATCHING
Subject to the provisions set forth below (the "Stock Matching Provisions"),
participants under age 55 are eligible to receive additional incentive
compensation in the form of common stock of General Mills, Inc. ("Common Stock")
contributed by the Company ("Stock Matching"), and participants age 55 or over
may elect to receive all or a portion of their additional incentive compensation
in the form of Stock Matching and/or an "Additional Cash Award."
1. Participants under age 55 as of the last day of the Plan Year are
eligible to participate in the Stock Matching Provisions of the Plan by
depositing shares of Common Stock with a Fair Market Value equal to 25% of
their Base Cash Award.
2. Participants age 55 or over as of the last day of the Plan Year may
elect full, partial, or no participation in the Stock Matching Provisions
according to the following schedule:
<TABLE>
<CAPTION>
FAIR MARKET
VALUE OF
SHARES TO BE
DEPOSITED AS % ADDITIONAL CASH
LEVEL OF STOCK MATCHING PARTICIPATION OF BASE CASH AWARD AWARD
- - ------------------------------------------ ----------------------- ---------------
<S> <C> <C>
Full Participation 25% 0%
15% 6%
Partial Participation 10% 9%
5% 12%
No Participation in Stock Matching 0% 15%
</TABLE>
3. On or before the December 31 immediately preceding the end of the
Plan Year, participants must notify the Company in writing of the applicable
participation alternatives elected under the Stock Matching Provisions.
Elections regarding Stock Matching participation are effective for the
current Plan Year. Dividends may be paid to the participant or reinvested,
at the election of the participant, under the Company's Automatic Dividend
Reinvestment Plan.
4. Notwithstanding the foregoing, in lieu of the award of Common Stock,
the Committee may award units representing the right to receive Common Stock
("Restricted Stock Units"), or make other arrangements, not inconsistent
with the intent of the Plan and subject to the limitations provided herein,
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 are selected to be
participants.
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
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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.
B. PARTICIPATION IN STOCK MATCHING
1. The Company shall notify each participant who participates in the Stock
Matching Provisions of the maximum number of shares of Common Stock which they
are permitted to deposit under the Plan, and participants may choose to deposit
all or any portion of the number of shares so permitted to be deposited (the
"Original Deposit"). Participants can make their Original Deposit at any time
after they receive their Base Cash Award, but participants must deposit such
shares with the Company (the "Agent") no later than the December 1 immediately
following the end of the Plan Year.
2. Any participant who dies, retires on or after age 65, elects early
retirement after age 55, or is permanently disabled and unable to work as
determined by the Corporate Medical Director, either during a Plan Year or prior
to the final date for depositing the Original Deposit shares for such Plan Year
(December 1), shall not be eligible to participate in the Stock Matching
Provisions, but instead, such participant, or the participant's legal
representative, shall receive an Additional Cash Award for the Plan Year in an
amount equal to twenty-five percent (25%) of any Base Cash Award paid or payable
for that Plan Year.
C. DISTRIBUTIONS AND WITHDRAWALS
1. RESTRICTED STOCK. As soon as practical following the Original
Deposit by a participant, the Company shall match these shares and
deposit with the Agent for the participant's account one share of Common
Stock for each share of the Original Deposit. The shares deposited by the
Company shall vest and be delivered to the participant fifty percent (50%)
after year three and fifty percent (50%) after year six, provided the
participant's Original Deposit has been left on deposit through the
three-year and six-year periods and all other provisions of the Plan have
been met (the "Restricted Stock").
2. TEMPORARY WITHDRAWAL FOR OPTION EXERCISE. A participant may
temporarily withdraw all or a portion of the shares on deposit for all
Plan Years (other than Restricted Stock) in order to exercise Company stock
options, subject to an equal number of shares of Common Stock being promptly
redeposited with the Agent after such exercise.
3. MAXIMUM SHARES. Subject to the provisions in III.C.4. hereof, and
subject to the limitations contained in the 1933 Resolution, the maximum
value, at the time of the award, of the shares for which Restricted Stock
may be granted under the Plan in respect of any fiscal year is one and one
quarter percent (1.25%) of the earnings before taxes on income (excluding
extraordinary items) of the Company for such fiscal year; provided, however,
that in no event shall such maximum value be greater than two and one-half
percent (2.5%) of the amount, if any, by which such earnings exceed ten
percent (10%) of total stockholders' equity of the Company as of the
beginning of such fiscal year.
4. SHARE ADJUSTMENT. In the event that the Committee determines that
any dividend or other distribution (whether in the form of cash, Common
Stock, securities of a subsidiary of the Company, other securities or other
property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Common Stock or other securities of the Company,
issuance of warrants or other rights to purchase Common Stock or other
securities of the Company, or other similar corporate transaction or event
affects the Common Stock such that an adjustment is determined by the
Committee to be appropriate to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan,
then the Committee may, in its sole discretion and in such manner as it may
deem equitable, adjust any or all of the number of shares of Common Stock
subject to outstanding restricted stock awards under the Plan, provided that
the number of shares of Common Stock subject to any award denominated in
Common Stock shall always be a
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<PAGE>
whole number. In any such event the Committee may also make such adjustment,
upward or downward, in the number of shares of Common Stock to be deposited
by the participants as shall appropriately reflect the effect of such
transactions.
5. SHARE PRICE. The value of the shares of Common Stock which are
required for deposit shall be equal to one hundred percent (100%) of the
Fair Market Value of the shares as of the first business day of June of such
year of deposit. "Fair Market Value," for purposes of the Plan, shall equal
the mean of the high and low price of the Common Stock on the New York Stock
Exchange on such date.
D. DEFINITION OF PLAN YEAR
For stock matching purposes, the Plan Year shall be defined as the period
beginning June 1 and ending May 31 of the following year.
E. VESTING AND DELIVERY OF RESTRICTED STOCK
1. THREE-YEAR VESTING. The requirement for shares to be on deposit for
three years shall be considered to have been fulfilled if such shares are
left on deposit with the Agent until the first business day of June of the
third year following the year of deposit for such Plan Year, on which date
the three-year vesting shall occur (except as otherwise provided in Section
F of Part III). Delivery of the shares will be made as soon as reasonably
practicable after the end of the Plan Year.
2. SIX-YEAR VESTING. The six-year vesting requirement shall be
considered to have been fulfilled as of the first business day of June,
three years after the third-year vesting and delivery for the Plan Year,
provided the Original Deposit has been left on deposit with the Agent until
the first business day of June of the sixth-year following the year of
deposit for such Plan Year, on which date the six-year vesting shall occur
(except as otherwise provided in Section F of Part III). Delivery of the
shares will be made as soon as reasonably practicable after the end of the
Plan Year.
F. RESTRICTED STOCK VESTING AND DELIVERY UNDER SPECIAL CONDITIONS
1. NORMAL RETIREMENT, LATE RETIREMENT OR PERMANENT DISABILITY FOR
WORK. Vesting and delivery of all Restricted Stock shall be made to a
participant who retires on or after age 65 or who is permanently disabled
and unable to work (as determined by the Corporate Medical Director) while a
participant under the Plan.
2. EARLY RETIREMENT. (a) A participant taking early retirement (after
age 55) may elect to leave stock on deposit until the participant reaches
age 65, or, if earlier, the fulfillment of the three-year and/or six-year
vesting requirements of Section E. of Part III.
(b) When the participant attains age 65, if the participant has left the
original stock on deposit, all Restricted Stock shall vest and be delivered,
unless such Restricted Stock shall have vested and have been delivered at an
earlier date pursuant to Section E. of Part III.
(c) In the event that the participant elects to withdraw the Original
Deposit from the account prior to age 65, and before the three-year or
six-year vesting dates, the participant shall vest in a proportionate number
of shares of such Restricted Stock. Such proportionate vesting shall be the
percentage of the three-year or six-year period, as the case may be, which
has already expired.
3. DEATH. The heirs or estate of any participant who dies before the
three-year or six-year vesting shall vest in a proportionate number of
shares of Restricted Stock. Such proportionate vesting shall be the pro-rata
share, based on full months, of the three-year or six-year period, as the
case may be, which has already expired.
4. VOLUNTARY RESIGNATION. No participant in a Plan Year who resigns
voluntarily (unless for the convenience of the Company) shall vest in
Restricted Stock.
5. CHANGE OF CONTROL. All Restricted Stock and Restricted Stock Units
shall vest and be delivered to the participant if there is a Change of
Control as provided in Part V.
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G. ASSIGNMENT OF PARTICIPANT'S ACCOUNTS
Participants' interests in the Original Deposit or the Restricted Stock may
not be sold, pledged, assigned or transferred in any manner, other than by will
or the laws of descent and distribution, so long as such shares are held by the
Agent, and any such sale, pledge, assignment or other transfer shall be null and
void.
PART IV
DEFERRAL OF PAYMENT OF CASH INCENTIVE AWARDS
A participant may elect to defer all or a portion of a Base Cash Award and
any additional cash award received (collectively "Cash Award") during each
calendar year from and after January 1, 1982 in accordance with the terms and
conditions of the General Mills, Inc. Deferred Compensation Plan.
In order to defer all or a portion of the Cash Award for a particular
calendar year, a participant must make a valid election by executing and filing
a Deferral Election Form with the Company on or before the December 31
immediately preceding the end of the Plan Year. If a participant elects to defer
all or a portion of the Cash Award for a particular year, the participant shall
automatically become a participant in the General Mills, Inc. Deferred
Compensation Plan, and any amounts so deferred shall be subject to the
provisions of such plan.
PART V
PLAN ADMINISTRATION
This Plan shall be effective in each fiscal year of the Company and shall be
administered by the Committee and the Committee shall have full authority to
interpret the Plan. Such interpretations of the Committee shall be final and
binding on all parties, including the participants, survivors of the
participant, and the Company.
The Committee shall have the authority to delegate the duties and
responsibilities of administering the 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, but only to the
extent such delegation does not adversely affect the ability of the Plan to
comply with the conditions for exemption from Section 16 of the Securities
Exchange Act of 1934 (or any successor provisions).
The Board, or if specifically delegated, its delegate, may amend, modify or
terminate the Plan at any time, provided, however, that no such amendment,
modification or termination shall adversely affect any accrued benefit under the
Plan to which a participant, or the participant's beneficiary, is entitled prior
to the date of such amendment or termination, unless the participant, or the
participant's beneficiary, becomes entitled to an amount equal to the 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 Plan prior to such amendment,
modification or termination may occur after a Change of Control without the
written consent of a majority of the participants determined as of the day
before such Change of Control.
A Change of Control shall mean the occurrence of any of the following
events:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "1934 Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the 1934 Act) of voting
securities of the Company where such acquisition causes such Person to own
20% or more of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however,
that for purposes of this subsection (a), the following acquisitions shall
not be deemed to result in a Change of Control: (i) any acquisition directly
from the Company, (ii) any acquisition by the Company, (iii) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company or (iv) any
acquisition by any corporation pursuant to a transaction that complies with
clauses (i), (ii) and (iii) of subsection (c) below; and provided, further,
that if any Person's beneficial ownership of the Outstanding Company Voting
Securities reaches or exceeds 20% as a result of a transaction described in
clause (i) or (ii) above, and such Person subsequently acquires beneficial
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ownership of additional voting securities of the Company, such subsequent
acquisition shall be treated as an acquisition that causes such Person to
own 20% or more of the Outstanding Company Voting Securities; or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of
the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by
the Company's shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect
to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the Board; or
(c) The approval by the shareholders of the Company of a reorganization,
merger or consolidation or sale or other disposition of all or substantially
all of the assets of the Company ("Business Combination") or, if
consummation of such Business Combination is subject, at the time of such
approval by shareholders, to the consent of any government or governmental
agency, the obtaining of such consent (either explicitly or implicitly by
consummation); excluding, however, such a Business Combination pursuant to
which (i) all or substantially all of the individuals and entities who were
the beneficial owners of the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 60% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation that as a result of such
transaction owns the Company or all or substantially all of the Company's
assets either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such Business
combination of the Outstanding Company Voting Securities, (ii) no Person
(excluding any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such
ownership existed prior to the Business Combination and (iii) at least a
majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent Board
at the time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination; or
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
Each participant 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 vesting of Restricted Stock, 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, a participant 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.
Neither any benefit payable hereunder nor the right to receive any future
benefit under the 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 Plan of the person affected may be terminated
by the 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.
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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.
All questions pertaining to the construction, validity and effect of the
Plan shall be determined in accordance with the laws of the United States and
the laws of the State of Minnesota.
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APPENDIX C
GENERAL MILLS, INC.
1996 COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
PART I
GENERAL PROVISIONS
A. PURPOSE
The purpose of the General Mills, Inc. 1996 Compensation Plan for
Non-Employee Directors (the "Plan") is to provide a compensation program which
will attract and retain qualified individuals not employed by General Mills,
Inc. or its subsidiaries (the "Company") to serve on the Board of Directors of
the Company (the "Board") and to further align the interests of non-employee
directors with those of the stockholders by providing that a portion of
compensation will be linked directly to increases in stockholder value.
B. EFFECTIVE DATE, DURATION OF PLAN AND TRANSITION RIGHTS
This Plan shall become effective as of September 30, 1996, subject to the
approval of the Plan by the stockholders. The Plan will terminate on September
30, 2001 or such earlier date as determined by the Board of Directors (the
"Board") or the Compensation Committee of the Board (the "Committee"); provided
that no such termination shall affect rights earned or accrued under the Plan
prior to the date of termination.
This Plan supersedes and replaces the General Mills, Inc. Compensation Plan
for Non-Employee Directors, effective as of January 1, 1979 (the "1979 Plan"),
the General Mills, Inc. Retirement Plan for Non-Employee Directors, effective as
of April 28, 1986 (the "1986 Plan") and the General Mills Stock Plan for
Non-Employee Directors, effective as of September 17, 1990 (the "1990 Plan").
Participant rights accrued as of September 30, 1996 under the 1979 Plan and the
1990 Plan shall remain in effect but no new rights or benefits shall accrue
pursuant to such plans. The 1986 Plan was terminated in February 1996.
Participants who have accrued rights under the 1986 Plan shall receive a one
time grant of Restricted Stock Units ("RSU's") representing the right to receive
shares of General Mills, Inc. Common Stock ($.10 per value) ("Common Stock")
equal to the value as of September 30, 1996 of the participant's accrued benefit
under the 1986 Plan. The value of each RSU shall be deemed equal to the mean of
the high and low price of shares of Common Stock on the New York Exchange on
September 30, 1996. Common Stock issued in respect of RSU's granted in lieu of
accrued benefits under the 1986 Plan shall be distributed commencing on the
director's retirement from the Board, on the date or dates elected by the
director at least one year prior to the date of his or her retirement from the
Board. In the absence of such an election, such Common Stock shall be issued in
ten substantially equal annual installments on the January 1 of each year
following the year in which the participant ceases to be a director. Each
participant awarded RSU's shall receive, upon distribution, one share of Common
Stock for each RSU 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. RSU's may not be sold, transferred, assigned, pledged or otherwise
encumbered or disposed. Participants who receive RSU's shall have no rights as
stockholders with respect to such RSU's until such time as share certificates
for Common Stock are issued to the participants; provided, however, that
quarterly, prior to the receipt of Common Stock in respect of the RSU's 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 an equivalent number of shares of Common Stock. Participants
receiving RSU's pursuant to this provision shall be entitled to the same rights
and protections as those provided participants receiving RSU's pursuant to Part
III, Section B.1, in particular the rights and protections described herein at
Part III, Section B.3.c,d,e,f and g.
C. PARTICIPATION
Each member of the Board of Directors of the Company (the "Board") who is
not an employee of the Company at the date compensation is earned or accrued
shall be eligible to participate in the Plan.
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D. COMMON STOCK SUBJECT TO THE PLAN
Common Stock to be issued under this Plan 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. Subject to
the provisions of the next succeeding paragraph, the maximum aggregate number of
shares authorized to be issued under the Plan shall be 250,000.
In the event that the Committee determines that any dividend or other
distribution (whether in the form of cash, Common Stock, securities of a
subsidiary of the Company, other securities or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase or exchange of Common
Stock or other securities of the Company, issuance of warrants or other rights
to purchase Common Stock or other securities of the Company or other similar
corporate transaction or event affects the Common Stock such that an adjustment
is determined by the Committee to be appropriate to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the Committee may, in its sole discretion and in such
manner as it may deem equitable, adjust any or all of (i) the number of shares
of Common Stock subject to the Plan, (ii) the number of shares of Common Stock
subject to outstanding awards under the Plan, and (iii) the grant or exercise
price with respect to any option and, if deemed appropriate, make provision for
a cash payment to the holder of an outstanding option; PROVIDED, that the number
of shares of Common Stock subject to any option denominated in Common Stock
shall always be a whole number.
PART II
ANNUAL RETAINER AND MEETING FEES
A. COMPENSATION STRUCTURE
1. Each non-employee director shall be entitled to receive an annual
retainer and meeting fees as shall be determined from time to time by the Board.
2. Each non-employee director of the Company may elect by written notice to
the Company on or before each annual stockholder meeting to participate in the
compensation alternative provisions of the Plan. Any combination of the
alternatives -- Cash, Deferred Cash and/or Common Stock -- may be elected,
provided the aggregate of the alternatives elected equals one hundred percent of
the non-employee director's compensation at the time of the election.
3. The election shall remain in effect for a one-year period which shall
begin the day of the annual stockholders' meeting and terminate the day before
the succeeding annual stockholders meeting (hereinafter "Plan Year").
4. The Plan Year shall include four plan quarters (hereinafter "Plan
Quarters"). Plan Quarters shall correspond to the Company's fiscal quarters.
5. A director elected to the Board at a time other than the annual
stockholder meeting may elect, by written notice to the Company before such
director's term begins, to participate in the compensation alternatives for the
remainder of that Plan Year, and elections for succeeding years shall be on the
same basis as other directors.
6. As soon as possible after the end of each Plan Year, the Company shall
supply to each participant an account statement of participation under the Plan.
B. CASH ALTERNATIVE
1. Each non-employee director who elects to participate under the cash
compensation provision of the Plan shall be paid all or the specified percentage
of his or her compensation for the Plan Year in cash, and such cash payment
shall be made as of the end of each Plan Quarter.
2. If a participant dies during a Plan Year, the balance of the amount due
to the date of the participant's death shall be payable in full to such
participant's designated beneficiary, or, if none, the estate as soon as
practicable following the date of death.
C. DEFERRED CASH ALTERNATIVE
1. Each non-employee director may elect to have all or a specified
percentage of his or her compensation for the Plan Year deferred until the
participant ceases to be a director.
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2. For each director who has made this deferred cash election, the Company
shall establish a deferred compensation account and shall credit such account at
the end of each plan quarter for the compensation due. Interest shall be
credited to each such account monthly based on the following rates as specified
by the Committee from time to time:
a. the rate of return as from time to time earned by the Fixed Income
Fund of the Voluntary Investment Plan of General Mills, Inc. (VIP); or
b. the rate of return as from time to time earned by the Equity Fund of
the VIP; or
c. any other rates of return of other funds or portfolios established
under a qualified benefit plan maintained by the Company which the Minor
Amendment Committee, or its delegate, in its discretion, may from time to
time establish.
3. Distribution of the participant's deferred compensation account shall be
as follows:
a. at the time, and in the form of payment, elected by the participant
at the time of deferral; or
b. in the absence of an election at the time of deferral, in ten
substantially equal annual installments beginning on January 1 of each year
following the year in which the participant ceases to be a director; or
c. if a participant makes a written request before payments have
commenced, and such request is approved by the Minor Amendment Committee,
payments may be made in some other lesser number of substantially equal
annual installments or in a single sum paid on a date prior to the otherwise
scheduled payment commencement date.
Each installment or lump sum payment shall also include interest on the
outstanding account balance to the first of the month in which the distribution
occurs.
4. A participant may, at any time prior or subsequent to the commencement
of benefit payments under this provision, elect in writing to have his or her
form of payment of any or all deferred 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 single sum amount
is paid, adjusted by a pro-rata portion of the rate of return for the prior
month in which the single sum is paid, determined by multiplying the actual rate
of return for such prior month by a fraction, the numerator of which is the
number of days in the month in which the request is received 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.
5. In the event of a severe financial hardship, a participant may apply to
receive a distribution of his or her account earlier than initially elected. The
Senior Vice President, Personnel will review the request and make a
recommendation to the Minor Amendment Committee which, by majority action, shall
either approve or deny the request. The determination made by the Committee will
be final and binding on all parties. If the request is granted, the Committee
will accelerate payments only to the extent reasonably necessary to alleviate
the financial hardship.
6. If a participant dies prior to payment in full of all amounts deferred
under the Plan, the balance of the amount due shall be payable in full to the
participant's designated beneficiary, or, if none, the estate, as soon as
practicable following the date of death.
7. Notwithstanding any other provision of this Plan to the contrary, the
Committee, by majority approval, 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 or her 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
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amounts that are or will be payable to him under the Plan before they are paid
to him. In making this determination, the 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.
8. The Company has established a Supplemental Benefits Trust with Norwest
Bank Minnesota, 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 Part IV hereinbelow, 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. 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.
D. GMI COMMON STOCK ALTERNATIVE
1. Each participant may elect to receive all or a specified percentage of
his or her compensation in shares of Common Stock, which will be issued at the
end of each Plan Quarter.
2. The Company shall ensure that an adequate number of shares of Common
Stock are available for distribution to those participants making this election.
3. Only whole numbers of shares will be issued, with any fractional share
amounts paid in cash.
4. For purposes of computing the number of shares earned each Plan Quarter,
the value of each share shall be equal to the mean of the high and low price of
shares of Common Stock on the New York Stock Exchange on the third Business Day
preceding the last day of each Plan Quarter. For the purposes of this Plan,
"Business Day" shall mean a day on which the New York Stock Exchange is open for
trading.
5. If a participant dies during a Plan Year, the balance of the amount due
to the date of the participant's death shall be payable in full to the
participant's designated beneficiary, or, if none, to the participant's estate,
in cash, as soon as practicable following the date of death.
PART III
STOCK COMPENSATION
A. NON-QUALIFIED STOCK OPTIONS
1. GRANT OF OPTIONS. Each non-employee director on the effective date of
the Plan (or, if first elected after the effective date of the Plan, on the date
the non-employee director is first elected) shall be awarded an option (an
"Option") to purchase 2,500 shares of Common Stock. As of the close of business
on each successive annual stockholders' meeting date after the date of the
original award, each non-employee director re-elected to the Board shall be
granted an additional Option to purchase 2,500 shares of Common Stock. All
Options granted under the Plan shall be non-statutory options not entitled to
special tax treatment under Section 422 of the Internal Revenue Code of 1986, as
amended.
2. OPTION EXERCISE PRICE. The per share price to be paid by the
non-employee director at the time an Option is exercised shall be 100% of the
Fair Market Value of the Common Stock on the date of grant. "Fair Market Value"
shall equal the mean of the high and low price for the Common Stock on the New
York Stock Exchange on the relevant date or, if the New York Stock Exchange is
closed on that date, on the last preceding date on which the Exchange was open
for trading.
3. TERM OF OPTION. Each Option shall expire ten (10) years from the date
of grant.
4. EXERCISE AND VESTING OF OPTION. Each Option will vest on the date of
the annual stockholder's meeting next following the date the Option is granted.
If, for any reason, a non-employee director ceases to serve on the Board prior
to the date an Option vests, such Option shall be forfeited and all further
rights of the non-employee director to or with respect to such Option shall
terminate. If a participant should die while employed by the Company, any vested
Option may be exercised by the person designated in such participant's last will
and testament or, in the absence of such designation,
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by the participant's estate and any unvested options shall vest and become
exercisable in a proportionate amount, based on the full months of service
completed during the vesting period of the Option from the date of grant to the
date of death.
5. METHOD OF EXERCISE AND TAX OBLIGATIONS. Each notice of exercise shall
be accompanied by the full purchase price of the shares being purchased. Such
payment may be made in cash, check, shares of Common Stock valued using the Fair
Market Value as of the exercise date or a combination thereof. The Company may
also require payment of the amount of any federal, state or local withholding
tax attributable to the exercise of an Option or the delivery of shares of
Common Stock.
6. NON-TRANSFERABILITY. An Option shall be non-assignable and
non-transferable by a non-employee director other than by will or the laws of
descent and distribution. A non-employee director shall forfeit any Option
assigned or transferred, voluntarily or involuntarily, other than as permitted
under this subsection.
B. RESTRICTED STOCK AND RSU'S
1. AWARDS. On the effective date of the Plan (or, if a non-employee
director is first elected after the effective date of the Plan, on the date the
non-employee director is first elected) and at the close of business on each
successive annual stockholders' meeting date, each non-employee director may
elect to receive either (i) an award of five hundred (500) shares of Restricted
Stock subject to vesting and restricted as described in subsection 2 hereof (the
"Restricted Stock") or (ii) an award of five hundred (500) RSU's, subject to
vesting and restricted as provided in subsection 2 hereof and the receipt of
which shall be deferred as provided in subsection 3 hereof. Only non-employee
directors re-elected to the Board shall be entitled to a grant of Restricted
Stock or RSU's awarded at the close of business on an annual meeting date after
the date of the original grant to the non-employee director.
2. VESTING OF AND RESTRICTIONS ON RESTRICTED STOCK AND RSU'S. A
participant's interest in the Restricted Stock and RSU's shall vest on the date
of the annual stockholders' meeting next following the date of the award of the
Restricted Stock or RSU's (the "Restricted Period"). If, for any reason, a
non-employee director ceases to serve on the Board prior to the date the
non-employee director's interest in a grant of Restricted Stock or RSU's vests,
such Restricted Stock and RSU's shall be forfeited and all further rights of the
non-employee director to or with respect to such Restricted Stock or RSU's shall
terminate. A participant who dies prior to the vesting of Restricted Stock or
RSU's shall vest in a proportionate number of shares of Restricted Stock or
RSUs, based on the full months of service completed during the vesting period of
the Restricted Stock or RSU's from the date of grant to the date of death.
Restricted Stock may not be sold, transferred, assigned, pledged or otherwise
encumbered or disposed until the Restricted Period has expired and RSU's may not
be sold, transferred, assigned, pledged or otherwise encumbered or disposed
until such time as share certificates for Common Stock are issued to the
participants.
3. DISTRIBUTION OF RSU'S.
a. Each participant electing the award of RSU's shall, on the date or
dates of distribution elected by the participant, receive and have issued in
his or her name one share of Common Stock for each RSU awarded and the
related RSU's shall terminate. The date of distribution for such Common
Stock shall be determined in accordance with subsection b hereof.
Participants who receive RSU's shall have no rights as stockholders with
respect to such RSU's until share certificates for Common Stock are issued
to the participants; provided, however, that quarterly, prior to the receipt
of Common Stock issued in connection with RSU's 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 an equivalent number of shares of Common Stock.
b. Upon election to receive RSU's, the non-employee director shall by
written notice to the Company elect to have his or her Common Stock issued
in a single allotment or in substantially equal annual installments over a
period not to exceed ten (10) years from January 1 following the year in
which the participant ceases to be a director. Except as provided herein at
subsections c,d,e,f or g, distributions of Common Stock in respect of RSU's
may not be commenced until the
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participant ceases to be a director. In the absence of an election, Common
Stock issued in respect of RSU's shall be distributed in ten substantially
equal annual installments beginning on January 1 of each year following the
year in which the participant ceases to be a director.
c. If a participant makes a written request before distributions have
commenced, and the Minor Amendment Committee in its sole and complete
discretion determines that compliance with such request is in the best
interest of the Company, distributions of Common Stock may be made in some
other lesser number of substantially equal annual installments or in a
single distribution made on a date prior to the otherwise scheduled
commencement date.
d. A participant may, at any time prior or subsequent to the issuance
of Common Stock in respect of RSU's, elect in writing to have his or her
method of distribution changed to an immediate single sum distribution of
some or all of the Common Stock to be distributed in respect of RSU's which
Common Stock shall be distributed within three (3) business days of receipt
by the Company of such request; provided that the number of shares of Common
Stock to be issued shall be reduced by the number of shares the value of
which will equal to the product of (X) the number of shares of Common Stock
requested to be distributed, (Y) the mean of the high and low price of
shares of Common Stock on the New York Stock Exchange on the date of the
request or, if the date of the request is not a Business Day (as defined
herein at Part II, Section D.4), on the Business Day preceding the date of
the request, and (Z) 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.
Only whole numbers of shares will be issued, with any fractional share
amounts paid in cash.
e. In the event of a severe financial hardship, a participant may apply
to receive a distribution of Common Stock in respect of RSU's earlier than
initially elected. The Senior Vice President, Personnel will review the
request and make a recommendation to the Minor Amendment Committee which, by
majority action, shall either approve or deny the request. The determination
made by the Committee will be final and binding on all parties. If the
request is granted, the Committee will accelerate payments only to the
extent reasonably necessary to alleviate the financial hardship.
f. If a participant dies prior to the issuance of Common Stock in
respect of vested RSU's awarded under the Plan, the balance of the Common
Stock to be issued in respect of such RSU's shall be distributed in full to
the participant's designated beneficiary, or, if none, the estate, as soon
as possible following the date of death.
g. Nothwithstanding any other provision of this Plan to the contrary,
the Committee, by majority approval, 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 or her 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 RSU's that have been awarded
under the Plan. In making this determination, the 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.
4. OTHER TERMS AND CONDITIONS. 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. Each participant granted
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. The Company may require payment of the amount of any federal,
state or local withholding tax attributable to the constructive or actual
delivery of shares of Common Stock pursuant to the terms of this Agreement.
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C. CHANGE OF CONTROL
Stock Options granted under the Plan will become immediately exercisable,
restrictions on the Restricted Stock will lapse and Common Stock to be issued in
respect of RSU's will be immediately distributed upon the occurrence of a
"Change of Control" as defined in Part IV hereinbelow.
PART IV
ADMINISTRATION
The Plan shall be administered by the Compensation Committee (hereinafter
the "Committee") of the Board of Directors of the Company. The Committee shall
have full power to interpret the Plan, formulate additional details and
regulations for carrying out the Plan and amend or modify the Plan as from time
to time it deems proper and in the best interests of the Company, provided that
after a "Change in Control" no amendment, modification of or action to terminate
the Plan may be made which would affect compensation earned or accrued prior to
such amendment, modification or termination without the written consent of a
majority of participants determined as of the day before a "Change in Control."
Any decision or interpretation adopted by the Committee shall be final and
conclusive. A "Change of Control" means:
1. The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "1934 Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the 1934 Act) of voting
securities of the Company where such acquisition causes such Person to own
20% or more of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however,
that for purposes of this subsection (1), the following acquisitions shall
not be deemed to result in a Change of Control: (i) any acquisition directly
from the Company, (ii) any acquisition by the Company, (iii) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company or (iv) any
acquisition by any corporation pursuant to a transaction that complies with
clauses (i), (ii) and (iii) of subsection (3) below; and provided, further,
that if any Person's beneficial ownership of the Outstanding Company Voting
Securities reaches or exceeds 20% as a result of a transaction described in
clause (i) or (ii) above, and such Person subsequently acquires beneficial
ownership of additional voting securities of the Company, such subsequent
acquisition shall be treated as an acquisition that causes such Person to
own 20% or more of the Outstanding Company Voting Securities; or
2. Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of
the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by
the Company's shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect
to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the Board; or
3. The approval by the shareholders of the Company of a reorganization,
merger, consolidation, sale or other disposition of all or substantially all
of the assets of the Company ("Business Combination") or, if consummation of
such Business Combination is subject, at the time of such approval by
shareholders, to the consent of any government or governmental agency, the
obtaining of such consent (either explicitly or implicitly by consummation);
excluding, however, such a Business Combination pursuant to which (i) all or
substantially all of the individuals and entities who were the beneficial
owners of the Outstanding Company Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more
than 60% of, respectively, the then outstanding shares of common stock and
the combined voting power of the then outstanding voting securities entitled
to vote generally in the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including, without
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limitation, a corporation that as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly
or through one or more subsidiaries) in substantially the same proportions
as their ownership, immediately prior to such Business combination of the
Outstanding Company Voting Securities, (ii) no Person (excluding any
employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares of
common stock of the corporation resulting from such Business Combination or
the combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination and (iii) at least a majority of the members of the
board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution
of the initial agreement, or of the action of the Board, providing for such
Business Combination; or
4. Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
PART V
ADDITIONAL PROVISIONS
A. GOVERNING LAW
The validity, construction and effect of the Plan and any such actions taken
under or relating to the Plan shall be determined in accordance with the laws of
the State of Delaware and applicable Federal law.
B. NOTICES
Unless otherwise notified, all notices under this Plan shall be sent in
writing to the Company, attention Corporate Compensation, P.O. Box 1113,
Minneapolis, Minnesota 55440. All correspondence to the participants shall be
sent to the address which is their recorded address as listed on the election
forms.
Effective as of September 30, 1996
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NOTICE OF 1996 ANNUAL MEETING
AND
PROXY STATEMENT
GENERAL MILLS, INC.
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General Mills, Inc.
[LOGO] THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS PROXY
1996
<S><C>
The undersigned hereby appoints S.W. Sanger and C. W. Gaillard, and each of them, as proxies with full power of substitution, to
vote all shares of common stock which the undersigned has power to vote at the Annual Meeting of Stockholders to be held on
September 30, 1996 at Minneapolis, Minnesota, and at any adjournment thereof, in accordance with the instructions set forth herein
and with the same effect as though the undersigned were present in person and voting such shares. The proxies are authorized in
their discretion to vote upon such other business as may properly come before the meeting.
THE DIRECTORS RECOMMEND A VOTE "FOR" ITEMS 1 THROUGH 5
1. Election of Directors
R.M. Bressler; L.D. DeSimone; W.T. Esrey; C.W. Gaillard; J.R. Hope; K.A. Macke; M.D. Rose; S.W. Sanger; A.M. Spence; D.A.
Terrell; R. G. Viault; C.A. Wurtele
/ / FOR all listed nominees / / WITHHOLD AUTHORITY to vote for all listed nominees
/ / LISTED NOMINEES except the following: (Instruction: To withhold authority to vote for any individual nominee,
write the name of such nominee(s) on the line below.)
2. Approval of appointment of KPMG Peat Marwick as independent auditors
/ / FOR / / AGAINST / / ABSTAIN
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3. Approval of General Mills, Inc. Stock Option and Long-Term Incentive Plan of 1993, as amended
/ / FOR / / AGAINST / / ABSTAIN
4. Approval of General Mills, Inc. Executive Incentive Plan, as amended
/ / FOR / / AGAINST / / ABSTAIN
5. Approval of General Mills, Inc. 1996 Compensation Plan for Non-Employee Directors
/ / FOR / / AGAINST / / ABSTAIN
THE DIRECTORS RECOMMEND A VOTE "AGAINST" ITEM 6
6. Stockholder proposal concerning cumulative voting
/ / FOR / / AGAINST / / ABSTAIN
This proxy will be voted as directed. If no direction is made, it will be voted "FOR" Items 1 through 5 and "AGAINST" Item 6.
PLEASE SIGN exactly as name appears above. Dated: _________________________, 1996
Joint owners should each sign. Executors,
administrators, trustees, etc. should so --------------------------------------
indicate when signing. If signer is a Signature(s) of Stockholder(s)
corporation, please sign full name by duly
authorized officer. --------------------------------------
Signature if held jointly
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