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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
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(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal year ended May 25, 1997
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED].
For the transition period from .............. to .............
Commission File Number 1-1185
GENERAL MILLS, INC.
(Exact name of registrant as specified in its charter)
Delaware 41-0274440
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Number One General Mills Boulevard
Minneapolis, MN 55426
(Mail: P.O. Box 1113) (Mail: 55440)
(Address of principal executive offices) (Zip Code)
(612) 540-2311
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, $.10 par value New York Stock Exchange
Chicago Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by Reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
Aggregate market value of Common Stock held by non-affiliates of the
Registrant, based on the closing price of $67.875 per share as reported on the
New York Stock Exchange on July 24, 1997: $10,857.7 million.
Number of shares of Common Stock outstanding as of July 24, 1997:
159,965,822 (including 103,953 shares set aside for the exchange of shares of
Ralcorp Holdings, Inc. and excluding 44,187,510 shares held in the treasury).
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Registrant's Proxy Statement dated August 11, 1997 are incorporated
by reference into Part III, and portions of Registrant's 1997 Annual Report
to Stockholders are incorporated by reference into Parts I, II and IV.
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<PAGE>
PART I
Item 1. Business
General Mills, Inc. was incorporated in Delaware in 1928. The Company is
engaged in the manufacture and marketing of consumer foods products. The terms
"General Mills," "Company" and "Registrant" mean General Mills, Inc. and its
subsidiaries unless the context indicates otherwise.
Recent Developments.
On January 31, 1997, the Company purchased the branded ready-to-eat cereal
and snack mix businesses of Ralcorp Holdings, Inc., including its CHEX and
COOKIE CRISP brands, for a total price of $570 million, payable in General Mills
common stock and through the assumption of Ralcorp debt. The transaction
included a Cincinnati, Ohio manufacturing facility, and trademark and technology
rights for the branded products in the Americas. See Note Two to Consolidated
Financial Statements appearing on page 23 of the Company's 1997 Annual Report to
Stockholders, incorporated herein by reference.
General Business.
The Company is a leading producer of packaged consumer foods and markets
its products primarily through its own sales organizations, supported by
advertising and other promotional activities. Such products are primarily
distributed directly to retail food chains, cooperatives, membership stores and
wholesalers. Certain food products, such as yogurt and some foodservice
products, are sold through distributors and brokers.
The packaged consumer foods market is highly competitive, with numerous
competitors of varying sizes. The principal methods of competition include
product quality, advertising, promotion and price. In most of its consumer foods
lines, described below, General Mills competes not only with other widely
advertised branded products, but also with generic products and private label
products, which are generally distributed at lower prices.
CEREALS. General Mills produces and sells a number of ready-to-eat cereals,
including such brands as: CHEERIOS, HONEY NUT CHEERIOS, FROSTED CHEERIOS, APPLE
CINNAMON CHEERIOS, MULTI-GRAIN CHEERIOS, WHEATIES, HONEY FROSTED WHEATIES,
CRISPY WHEATIES 'N RAISINS, LUCKY CHARMS, CORN TOTAL, WHEAT TOTAL, TOTAL RAISIN
BRAN, TRIX, GOLDEN GRAHAMS, KIX, BERRY BERRY KIX, FIBER ONE, REESE'S PEANUT
BUTTER PUFFS, COCOA PUFFS, CINNAMON TOAST CRUNCH, CLUSTERS, RAISIN NUT BRAN,
OATMEAL CRISP, TRIPLES and BASIC 4. In fiscal 1997, the Company introduced TEAM
CHEERIOS, FRENCH TOAST CRUNCH and BETTY CROCKER cereals and acquired the CHEX
and COOKIE CRISP cereal brands from Ralcorp Holdings, Inc.
DESSERTS, FLOUR AND BAKING MIXES. General Mills makes and sells a line of
dessert mixes under the BETTY CROCKER trademark, including SUPERMOIST layer
cakes, RICH & CREAMY and SOFT WHIPPED ready-to-spread frostings, SUPREME brownie
mixes, SUPREME dessert bars, muffin mixes, and SWEET REWARDS fat-free and
reduced-fat dessert mixes. The Company markets variety baking mixes under the
BISQUICK trademark, sells pouch mixes under the BETTY CROCKER name, and produces
family flour under the GOLD MEDAl brand, introduced in 1880, and regional brands
such as LA PINA, ROBIN HOOD and RED BAND. The Company also engages in grain
merchandising, produces flour for internal ingredient requirements and sells
flour to bakery, foodservice and manufacturing markets.
DINNER AND SIDE DISH PRODUCTS. General Mills manufactures a line of BETTY
CROCKER dry packaged dinner mixes under the HAMBURGER HELPER, TUNA HELPER, and
SKILLET CHICKEN HELPER trademarks. Also under the BETTY CROCKER trademark, the
Company sells dry packaged specialty potatoes, POTATO BUDS instant mashed
potatoes, SUDDENLY SALAD and BAC*O'S salad topping.
SNACK PRODUCTS AND BEVERAGES. General Mills markets POP SECRET microwave
popcorn; a line of grain snacks including NATURE VALLEY granola bars, DUNKAROOS
and newly introduced GOLDEN GRAHAMS TREATS; a line of fruit snacks including
FRUIT ROLL-UPS, FRUIT BY THE FOOT, GUSHERS, FRUIT STRING THING, BUGS BUNNY AND
TRIX SHAPES; a line of fat-free snack bars under the name SWEET REWARDS; a
recently acquired salty snack product called CHEX SNACK MIX and a savory snack
marketed under the name BUGLES. The Company also produces and sells a line of
single-serving fruit juice drinks marketed under the SQUEEZIT trademark and
SQUEEZIT 100, a 100% juice beverage.
YOGURT PRODUCTS. Yoplait USA manufactures and sells a line of yogurt,
including YOPLAIT ORIGINAL, YOPLAIT LIGHT, CUSTARD STYLE, TRIX, a layered yogurt
for children and YOPLAIT CRUNCHY LIGHT, a non-fat yogurt with an overcap of
crunchy toppings. Yoplait USA also markets frozen yogurt and novelties under a
licensing arrangement. The Colombo yogurt business manufactures and sells a
variety of refrigerated cup yogurt products under the COLOMBO brand name.
FOODSERVICE. The Foodservice division markets General Mills branded baking
mixes, cereals, snacks, refrigerated and soft frozen yogurt and custom products
to the commercial and non-commercial sectors, including schools, colleges,
hotels, restaurants and the healthcare industry.
INTERNATIONAL FOODS OPERATIONS. The International Foods organization of the
Company exports packaged food products and snack pellets throughout the world
and licenses food products for manufacture in Europe and the Asia/Pacific
region. General Mills Canada, Inc. manufactures and sells BIG G ready-to-eat
cereals in Canada. It also markets BETTY CROCKER dessert, baking and packaged
dinner mixes and snacks in Canada.
The Company has three international joint ventures. See Note Five to
Consolidated Financial Statements appearing on page 24 of the Company's 1997
Annual Report to Stockholders, incorporated herein by reference. Cereal Partners
Worldwide (CPW), the Company's joint venture with Nestle, S.A., through various
entities, competes in more than 60 countries and republics, including recent
expansion into Central Europe and Brazil. The following products were marketed
under the umbrella Nestle trademark in fiscal 1997: TRIO, CLUSTERS, NESQUICK,
MULTI-CHEERIOS, HONEY NUT CHEERIOS, GOLDEN GRAHAMS, CINI MINIS, CHOCAPIC, TRIX,
ESTRELITAS, GOLD, KIX, MILO, FIBRE 1, KANGUS, SPORTIES, FITNESS, SHREDDED WHEAT,
SHREDDIES, COUNTRY CORN FLAKES, APPLE PUFFS, HONEY STARS, KOKO KRUNCH, SNOW
FLAKES, ZUCOSOS and APPLE MINIS. CPW also manufactures private label cereals for
customers in the United Kingdom. The Company has a 50% equity interest in CPW.
Snack Ventures Europe (SVE), the Company's joint venture with PepsiCo,
Inc., manufactures and sells snack foods in Holland, France, Belgium, Spain,
Portugal, Greece, Estonia, Hungary, Russia and Slovakia. The Company has a 40.5%
equity interest in SVE.
International Dessert Partners L.L.C. (IDP), the Company's joint venture
with CPC International Inc., sells baking and dessert mixes in Brazil, Mexico,
Colombia, Argentina, and recently expanded its operations into Chile, Peru and
Uruguay. In fiscal 1997 IDP began manufacturing baking mixes in Uruguay. The
Company has a 50% equity interest in IDP.
General
TRADEMARKS AND PATENTS. The Company's products are marketed and businesses
operated under trademarks and service marks owned by or licensed to the Company.
Trademarks and service marks are vital to the Company's business. The most
significant trademarks and service marks of the Company are contained in the
business segment discussions above.
The Company considers that, taken as a whole, the rights under its various
patents, which expire from time to time, are a valuable asset, but the Company
does not believe that its businesses are materially dependent upon any single
patent or group of related patents. Outside its joint venture activities, the
Company's activities under licenses or other franchises or concessions are not
material.
RAW MATERIALS AND SUPPLIES. The principal raw materials used by General
Mills are cereal grains, sugar, fruits, other agricultural products, vegetable
oils, and plastic and paper for packaging materials. Although General Mills has
some long-term contracts, the majority of such raw materials are purchased on
the open market. Prices of most raw materials will probably increase over the
long term. Nonetheless, General Mills believes that it will be able to obtain an
adequate supply of needed ingredients and packaging materials. Occasionally and
where possible, General Mills makes advance purchases of items significant to
its business in order to ensure continuity of operations. The Company's
objective is to procure materials meeting both the Company's quality standards
and its production needs at the lowest total cost to the Company. The Company's
strategy is to buy these materials at price levels that allow a targeted profit
margin. Since commodities generally represent the largest variable cost in
manufacturing the Company's products, to the extent possible, the Company hedges
the risk associated with adverse price movements of grains, vegetable oils and
sugar using exchange-traded futures and options and forward cash contracts.
These tools enable the Company to manage the related commodity price risk over
periods of time that exceed the period of time in which the physical commodity
is available. Accordingly, the Company uses hedging to mitigate the risks
associated with adverse price movements and not to speculate in the marketplace.
See also Note Eight to Consolidated Financial Statements appearing on page 25 of
the Company's 1997 Annual Report to Stockholders, incorporated herein by
reference.
CAPITAL EXPENDITURES. During the three fiscal years ended May 25, 1997,
General Mills expended $448 million for capital expenditures, not including the
cost of acquired companies. The Company expects to spend approximately $190
million for such purposes in fiscal 1998.
RESEARCH AND DEVELOPMENT. The main research and development facilities are
located at the James Ford Bell Technical Center in Golden Valley (suburban
Minneapolis), Minnesota. With a staff of approximately 780, the Center is
responsible for most of the food research for the Company. Approximately
one-half of the staff hold degrees in various chemical, biological and
engineering sciences. Research and development expenditures (all
Company-sponsored) amounted to $61.4 million in fiscal 1997, $60.1 million in
fiscal 1996 and $59.8 million in fiscal 1995. General Mills' research and
development resources are focused on new product development, product
improvement, process design and improvement, packaging and exploratory research
in new business areas.
EMPLOYEES. At May 25, 1997, General Mills had approximately 10,200
employees.
ENVIRONMENTAL MATTERS. As of June 30, 1997, the Company has received
notices advising it that there have been releases or threatened releases of
hazardous substances or wastes at 12 sites, and alleging that the Company is
potentially responsible for cleaning up those sites and/or paying certain costs
in connection with those sites. These matters involve several different
procedural contexts, including litigation initiated by governmental authorities
and/or private parties, administrative proceedings commenced by regulatory
agencies, and demand letters issued by regulatory agencies and/or private
parties. The Company recognizes that its potential exposure with respect to any
of these sites may be joint and several, but has concluded that its probable
aggregate exposure is not material. This conclusion is based upon, among other
things, the Company's payments and/or accruals with respect to each site; the
number, ranking, and financial strength of other potentially responsible parties
identified at each of the sites; the status of the proceedings, including
various settlement agreements, consent decrees or court orders; allocations of
volumetric waste contributions and allocations of relative responsibility among
potentially responsible parties developed by regulatory agencies and by private
parties; remediation cost estimates prepared by governmental authorities or
private technical consultants; and the Company's historical experience in
negotiating and settling disputes with respect to similar sites.
Based on current facts and circumstances, General Mills believes that
neither the results of these proceedings nor its compliance in general with
environmental laws or regulations will have a material adverse effect upon the
capital expenditures, earnings or competitive position of the Company.
Segment Information. Reporting financial information relating to industry
segments of General Mills was discontinued as of May 28, 1995 with the
distribution of the restaurant business. For a description of the distribution,
see Note Three to Consolidated Financial Statements appearing on page 23 of the
Company's 1997 Annual Report to Stockholders, incorporated herein by reference.
Geographic financial information is found in Note Nineteen to Consolidated
Financial Statements appearing on page 33 of the Company's 1997 Annual Report to
Stockholders, incorporated herein by reference.
Executive Officers of the Registrant
The executive officers of the Company, together with their ages and
business experience, are set forth below.
Y. Marc Belton, age 38, is Vice President; President, New Ventures. Mr.
Belton joined the Company in 1983 and served in various food marketing
management positions. He was appointed a Vice President of the Company in 1991,
named President, Snacks in 1994 and named to his present position in 1997.
Edward K. Bixby, age 61, is Senior Vice President; President, Consumer
Foods Sales and Distribution. Mr. Bixby joined the Company in 1958 and served as
General Manager of several Consumer Foods divisions. Mr. Bixby was elected
Senior Vice President, General Manager, Grocery Products Sales Division in 1987,
named President, Consumer Foods Sales in 1989 and named to his present position
in 1994.
Peter J. Capell, age 40, is Vice President; President, Snacks. Mr. Capell
joined the Company in 1985 and served in various marketing and general
management positions. He was appointed a Vice President of the Company in 1996,
named Marketing Director, Cheerios Business Unit in 1996 and named to his
present position in 1997.
Randy G. Darcy, age 46, is Senior Vice President, Operations. Mr. Darcy
joined the Company in 1987, was named Vice President, Director of Manufacturing,
Technology and Operations in 1989 and was named to his present position in 1994.
Stephen R. Demeritt, age 53, is Executive Vice President of General Mills
and Chief Executive Officer of CPW, S.A., a joint venture of General Mills and
Nestle, S.A. Mr. Demeritt joined the Company in 1969 and was named a Marketing
Director in the Big G Division in 1976, appointed a Vice President of the
Company in 1983, named President of General Mills Canada, Inc. in 1986, elected
Senior Vice President of General Mills in 1992, and named Chief Executive
Officer of CPW, S.A. in 1993. He was named to his present position in 1996.
Jon L. Finley, age 43, is Senior Vice President; President, Gold Medal, a
division that includes Gold Medal and other family flour, Bisquick baking mix
and Betty Crocker desserts and baking mixes. Mr. Finley joined the Company in
1983 and was named President, Yoplait USA in 1991, appointed a Vice President of
the Company in 1991, elected Senior Vice President in 1994, named Senior Vice
President, New Business in 1995 and named to his present position in 1996.
Leslie M. Frecon, age 44, is Senior Vice President, Corporate Finance. Ms.
Frecon joined the Company in 1981 as Manager of Acquisitions and was named
Director of Acquisitions in 1983, Controller of Foodservice in 1989 and
Controller of Sperry in 1991. She was named a Vice President of the Company in
1991 and was elected to her present position in 1993.
Charles W. Gaillard, age 56, 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
responsibility for Big G, Consumer Food Sales and Yoplait. He earlier served as
Chief Executive Officer of CPW, S.A., a joint venture of the Company and Nestle,
S.A., and as President of Big G. 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.
Stephen J. Garthwaite, age 53, is Senior Vice President, Innovation and
Technology. Mr. Garthwaite joined the Company in 1982 as Vice President,
Director of Corporate Research and was named Vice President, Research and
Development for the Betty Crocker Division in 1986. He assumed the position of
Vice President, Research and Development for Consumer Foods in 1987, was elected
Senior Vice President, Research and Development in 1989, was named Senior Vice
President, Technology and Operations in 1990 and was named to his present
position in 1994.
Eric J. Larson, age 41, is Senior Vice President, Investor Relations. Mr.
Larson joined the Company in 1996 from Morgan Stanley & Co. where he had been a
partner and senior analyst covering packaged food, agri-business, foodservice,
tobacco and selected beverage companies since 1992. He previously worked as an
analyst covering consumer products companies at First Boston Corporation and
PaineWebber. Mr. Larson was named to his present position in 1996.
Siri S. Marshall, age 49, is Senior Vice President and General Counsel. Ms.
Marshall joined the Company in this position in 1994 from Avon Products, Inc.
where she held the positions of Senior Vice President, General Counsel and
Secretary from 1992 to 1994 and Vice President-Legal and Government Affairs and
Secretary from 1990 to 1992.
David D. Murphy, age 45, is Senior Vice President; President, International
Foods. Mr. Murphy joined the Company in 1976, and served as the head of several
divisions including Minnetonka, Betty Crocker Products and Big G. He was elected
a Senior Vice President in 1991, named President of General Mills Canada in 1993
and named to his present position in 1996.
Michael A. Peel, age 47, is Senior Vice President, Personnel. Mr. Peel
joined the Company in this position in 1991 from PepsiCo, Inc. where he was
Senior Vice President, Personnel, responsible for PepsiCo Worldwide Foods.
Kendall J. Powell, age 43, is Vice President; President, Yoplait-Colombo.
Mr. Powell joined the Company in 1979 and was appointed a Vice President of
General Mills and named Marketing Director of Cereal Partners U.K. in 1990. He
was named to his present position in 1995.
Jeffrey J. Rotsch, age 47, is Senior Vice President; President, Big G. Mr.
Rotsch joined the Company in 1974 and was named Vice President, Director of
Marketing for the Betty Crocker Division in 1987, Vice President, General
Manager for Betty Crocker main meals and side dishes in 1989, elected Senior
Vice President in 1993 and named to his present position in 1994.
Stephen W. Sanger, age 51, 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 business
units, including Yoplait USA and Big G. He was elected a Senior Vice President
in 1989, Executive Vice President in 1991, Vice Chairman in 1992 and President
in 1993.
Christina L. Steiner Shea, age 44, is Vice President; President, Betty
Crocker. Ms. Shea joined the Company in 1976 and was appointed a Vice President
in 1987. She was appointed Vice President, New Business Development for Yoplait
USA in 1991, Vice President, General Manager of Betty Crocker Products' Main
Meals and Side Dishes in 1992, and named to her present position in 1994.
Robert L. Stretmater, age 53, is Vice President; President, Foodservice.
Mr. Stretmater joined the Company in 1967 and was appointed a Vice President in
1987. He was appointed Vice President, Director of Marketing for the Gold Medal
Division in 1989, Vice President, Director of Marketing for Foodservice in 1996
and named to his present position in 1997.
Danny L. Strickland, age 49, is Senior Vice President, Research and
Development. Mr. Strickland joined the Company in this position in 1997 from
Johnson & Johnson where he held the position of Executive Vice President,
Worldwide Absorbent Products and Material Research from 1993 to 1997. Prior to
joining Johnson & Johnson he spent five years at Kraft General Foods as Vice
President of Technology.
Austin P. Sullivan, Jr., age 57, is Senior Vice President, Corporate
Relations. Mr. Sullivan joined the Company in 1976, was named a Vice President
in 1978, named Director of Public Affairs in 1979 and assumed responsibility for
Corporate Communications in 1993. He was named to his present position in 1994.
Kenneth L. Thome, age 49, is Senior Vice President, Financial Operations.
Mr. Thome joined the Company in 1969 and was named Vice President, Controller
for Convenience and International Foods Group in 1985, Vice President,
Controller for International Foods in 1989, Vice President, Director of
Information Systems in 1991 and was elected to his present position in 1993.
Raymond G. Viault, age 53, 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 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.
<PAGE>
Cautionary Statement Relevant to Forward-Looking Information for the Purpose of
"Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995
The Company and its representatives may from time to time make written or
oral forward-looking statements with respect to long-term goals of the Company,
including statements contained in the Company's filings with the Securities and
Exchange Commission and in its reports to stockholders.
The words or phrases "will likely result," "are expected to," "will
continue," "is anticipated," "estimate," "project" or similar expressions
identify "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from historical earnings and those presently anticipated or projected. The
Company wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. In connection
with the "safe harbor" provisions of the Private Securities Litigation Reform
Act of 1995, the Company is hereby identifying important factors that could
affect the Company's financial performance and could cause the Company's actual
results for future periods to differ materially from any opinions or statements
expressed with respect to future periods in any current statements.
Among the factors which have affected and may continue to affect operating
results are the following: (i) significant price competition by the largest
branded cereal manufacturers, including competitive promotional spending levels;
and (ii) high ingredient prices compared to historical levels. The Company's
operating results may also be affected by other external factors such as: the
effect of economic conditions; the impact of competitive products and pricing;
product development; actions of competitors other than as described above;
changes in laws and regulations, including changes in accounting standards;
customer demand; effectiveness of advertising and marketing spending or
programs; consumer perception of health-related issues; fluctuations in the cost
and availability of supply-chain resources; and foreign economic conditions,
including currency rate fluctuations.
The Company specifically declines to undertake any obligation to publicly
revise any forward-looking statements that have been made to reflect events or
circumstances after the date of such statements or to reflect the occurrence of
anticipated or unanticipated events.
Item 2. Properties.
The Company's principal executive offices and main research laboratory are
Company-owned and located in the Minneapolis, Minnesota metropolitan area.
General Mills operates numerous manufacturing facilities and maintains many
sales and administrative offices and warehouses, mainly in the United States.
Other facilities are operated in Canada.
General Mills operates eleven major consumer foods plants for the
production of cereal products, prepared mixes, convenience foods and other food
products. These facilities are located at Albuquerque, New Mexico; Buffalo, New
York; Cedar Rapids, Iowa; Chicago, Illinois area (3); Cincinnati, Ohio;
Covington, Georgia; Lodi, California; Toledo, Ohio; and Etobicoke, Canada. The
Company owns seven flour mills located at Avon, Iowa; Buffalo, New York; Great
Falls, Montana; Johnson City, Tennessee; Kansas City, Missouri; Vallejo,
California; and Vernon, California. The Company operates seven terminal grain
elevators and has country grain elevators in 29 locations, primarily in Idaho
and Montana.
General Mills also has nine other food and beverage production facilities
with total floor space of approximately 522,000 square feet, including 198,000
square feet of leased space. General Mills also owns or leases warehouse space
aggregating approximately 8,018,000 square feet, of which approximately
5,253,000 square feet are leased. A number of sales and administrative offices
are maintained in the United States and Canada, totaling 1,782,000 square feet.
Item 3. Legal Proceedings.
In management's opinion, there were no claims or litigation pending at May
25, 1997, the outcome of which could have a material adverse effect on the
consolidated financial position of the Company. See the information contained
under the section entitled "Environmental Matters," supra, for a discussion of
environmental matters in which the Company is involved.
Item 4. Submission of Matters to a Vote of Security Holders. -- Not applicable.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
The information relating to the market prices and dividends of the
Company's common stock contained in Note Twenty to Consolidated Financial
Statements appearing on page 33 of Registrant's 1997 Annual Report to
Stockholders is incorporated herein by reference. As of July 24, 1997, the
number of record holders of common stock was 43,364. The Company's common stock
($.10 par value) is listed on the New York and Chicago Stock Exchanges.
Item 6. Selected Financial Data.
The information for fiscal years 1993 through 1997 contained in the
Eleven-Year Financial Summary on page 34 of Registrant's 1997 Annual Report to
Stockholders is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation.
The information set forth in the section entitled "Management's Discussion
and Analysis" on pages 15 through 17 of Registrant's 1997 Annual Report to
Stockholders is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data.
The information on pages 18 through 33 of Registrant's 1997 Annual Report
to Stockholders is incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure. --Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The information contained in the sections entitled "Information Concerning
Nominees" and "Section 16(a) Beneficial Ownership Reporting Compliance"
contained in Registrant's definitive proxy materials dated August 11, 1997 is
incorporated herein by reference.
Item 11. Executive Compensation.
The information contained on pages 15 through 18 of Registrant's definitive
proxy materials dated August 11, 1997 is incorporated herein by reference. The
information appearing under the heading "Report of Compensation Committee on
Executive Compensation" is not incorporated herein.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information contained in the section entitled "Share Ownership of
Directors and Executive Officers" contained in Registrant's definitive proxy
materials dated August 11, 1997 is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions. -- Not applicable.
The Company's Annual Report on Form 10-K for the fiscal year ended May 25, 1997,
at the time of its filing with the Securities and Exchange Commission, shall
modify and supersede all prior documents filed pursuant to Sections 13, 14 and
15(d) of the 1934 Act for purposes of any offers or sales of any securities
after the date of such filing pursuant to any Registration Statement or
Prospectus filed pursuant to the Securities Act of 1933 which incorporates by
reference such Annual Report on Form 10-K.
<PAGE>
AUDITORS' REPORT
The Stockholders and the Board of Directors
General Mills, Inc.:
Under date of June 26, 1997, we reported on the consolidated balance sheets
of General Mills, Inc. and subsidiaries as of May 25, 1997 and May 26, 1996 and
the related consolidated statements of earnings and cash flows for each of the
fiscal years in the three-year period ended May 25, 1997, as contained in the
1997 annual report to stockholders. These consolidated financial statements and
our report thereon are incorporated by reference in the annual report on Form
10-K for the fiscal year ended May 25, 1997. In connection with our audits of
the aforementioned consolidated financial statements, we have also audited the
related financial statement schedule as listed in the accompanying index. This
financial statement schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion on this financial statement schedule
based on our audits.
In our opinion, such financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.
Our report covering the basic consolidated financial statements refers to
changes in the method of accounting in fiscal 1997 for impairment of long-lived
assets and for long-lived assets to be disposed of.
/s/ KPMG Peat Marwick LLP
Minneapolis, Minnesota
June 26, 1997
AUDITORS' CONSENT
The Board of Directors
General Mills, Inc.:
We consent to incorporation by reference in the Registration Statements
(Nos. 2-49637 and 333-00745) on Form S-3 and Registration Statements (Nos.
2-13460, 2-53523, 2-91987, 2-95574, 33-24504, 33-27628, 33-32059, 33-36892,
33-36893, 33-50337, 33-62729, 333-13089 and 333-32509) on Form S-8 of General
Mills, Inc. of our reports dated June 26, 1997, relating to the consolidated
balance sheets of General Mills, Inc. and subsidiaries as of May 25, 1997 and
May 26, 1996 and the related consolidated statements of earnings, cash flows and
related financial statement schedule for each of the fiscal years in the
three-year period ended May 25, 1997, which reports are included or incorporated
by reference in the May 25, 1997 annual report on Form 10-K of General Mills,
Inc.
Our report covering the basic consolidated financial statements refers to
changes in the method of accounting in fiscal 1997 for impairment of long-lived
assets and for long-lived assets to be disposed of.
/s/ KPMG Peat Marwick LLP
Minneapolis, Minnesota
August 18, 1997
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) 1. Financial Statements:
Consolidated Statements of Earnings for the Fiscal Years Ended May 25,
1997, May 26, 1996 and May 28, 1995 (incorporated herein by reference to
page 19 of the Registrant's 1997 Annual Report to Stockholders).
Consolidated Balance Sheets at May 25, 1997 and May 26 1996
(incorporated herein by reference to page 20 of the Registrant's 1997
Annual Report to Stockholders).
Consolidated Statements of Cash Flows for the Fiscal Years Ended May 25,
1997, May 26, 1996 and May 28, 1995 (incorporated herein by reference to
page 21 of the Registrant's 1997 Annual Report to Stockholders).
Notes to Consolidated Financial Statements (incorporated herein by
reference to pages 22 through 33 of the Registrant's 1997 Annual Report
to Stockholders).
2. Financial Statement Schedules:
For the Fiscal Years Ended May 25, 1997, May 26, 1996 and May 28, 1995:
II- Valuation and Qualifying Accounts
3. Exhibits:
Exhibit No. Description
----------- -----------
3.1 Registrant's Restated Certificate of Incorporation, as amended
to date (incorporated herein by reference to Exhibit 3.1 to
Registrant's Annual Report on Form 10-K for the fiscal year
ended May 28, 1995).
3.2 Registrant's By-Laws, as amended to date (incorporated herein by
reference to Exhibit 3 to Registrant's Report on Form 8-K dated
December 11, 1995).
4.1 Indenture between Registrant and Continental Illinois National
Bank and Trust Company of Chicago, as amended to date by
Supplemental Indentures Nos. 1 through 8.
4.2 Rights Agreement dated as of December 11, 1995 between
Registrant and Norwest Bank Minnesota, N.A. (incorporated herein
by reference to Exhibit 1 to Registrant's Report on Form 8-K
dated December 11, 1995).
4.3 Indenture between Registrant and First Trust of Illinois,
National Association dated February 1, 1996 (incorporated herein
by reference to Exhibit 4.1 to Registrant's Registration
Statement on Form S-3 effective February 23, 1996).
4.4 Indenture between Ralcorp Holdings, Inc. and The First National
Bank of Chicago, as supplemented to date by the First
Supplemental Indenture among Ralcorp Holdings, Inc., Registrant
and The First National Bank of Chicago (incorporated herein by
reference to Exhibit 4.1 to Registrant's Report on Form 8-K
dated January 31, 1997).
*10.1 Stock Option and Long-Term Incentive Plan of 1988, as amended to
date (incorporated herein by reference to Exhibit 10.1 to
Registrant's Annual Report on Form 10-K for the fiscal year
ended May 29, 1994).
* Items that are management contracts or compensatory plans or arrangements
required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K.
<PAGE>
Exhibit No. Description
----------- -----------
*10.2 Stock Option and Long-Term Incentive Plan of 1984, as amended to
date (incorporated herein by reference to Exhibit 10.2 to
Registrant's Annual Report on Form 10-K for the fiscal year
ended May 29, 1994).
10.3 Distribution Agreement with Darden Restaurants, Inc. dated May
12, 1995 (incorporated herein by reference to Exhibit 2 to
Registrant's Report on Form 8-K dated May 28, 1995).
*10.4 Executive Incentive Plan, as amended to date.
*10.5 Management Continuity Agreement (incorporated herein by
reference to Exhibit 4 to Registrant's Report on Form 8-K dated
December 11, 1995).
*10.6 Supplemental Retirement Plan, as amended to date (incorporated
herein by reference to Exhibit 10.6 to Registrant's Annual
Report on Form 10-K for the fiscal year ended May 29, 1994).
*10.7 Executive Survivor Income Plan, as amended to date (incorporated
herein by reference to Exhibit 10.7 to Registrant's Annual
Report on Form 10-K for the fiscal year ended May 26, 1996).
*10.8 Executive Health Plan, as amended to date (incorporated herein
by reference to Exhibit 10.8 to Registrant's Annual Report on
Form 10-K for the fiscal year ended May 26, 1996).
*10.9 Supplemental Savings Plan, as amended to date (incorporated
herein by reference to Exhibit 10.9 to Registrant's Annual
Report on Form 10-K for the fiscal year ended May 29, 1994).
*10.10 1996 Compensation Plan for Non-Employee Directors, as amended to
date.
*10.11 General Mills, Inc. 1995 Salary Replacement Stock Option Plan
(incorporated herein by reference to Exhibit 10.11 to
Registrant's Annual Report on Form 10-K for the fisca year
ended May 26, 1996).
*10.12 General Mills, Inc. Deferred Compensation Plan, as amended
to date (incorporated herein by reference to Exhibit 10 to
Registrant's Registration Statement on Form S-8 filed July 31,
1997).
*10.13 Supplemental Benefits Trust Agreement dated February 9, 1987, as
amended and restated as of September 26, 1988 (incorporated
herein by reference to Exhibit 10.13 to Registrant's Annual
Report on Form 10-K for the fiscal year ended May 29, 1994).
*10.14 Supplemental Benefits Trust Agreement dated September 26, 1988
(incorporated herein by reference to Exhibit 10.14 to
Registrant's Annual Report on Form 10-K for the fiscal year
ended May 29, 1994).
10.15 Agreements dated November 29, 1989 by and between General Mills,
Inc. and Nestle, S.A. (incorporated herein by reference to
Exhibit 10.15 to Registrant's Annual Report on Form 10-K for the
fiscal year ended May 28, 1995).
10.16 Protocol and Addendum No. 1 to Protocol of Cereal Partners
Worldwide (incorporated herein by reference to Exhibit 10.16 to
Registrant's Annual Report on Form 10-K for the fiscal year
ended May 26, 1996).
*10.17 1990 Salary Replacement Stock Option Plan, as amended to date
(incorporated herein by reference to Exhibit 10.18 to
Registrant's Annual Report on Form 10-K for the fiscal year
ended May 29, 1994).
10.18 Addendum No. 2 dated March 16, 1993 to Protocol of Cereal
Partners Worldwide (incorporated herein by reference to Exhibit
10.19 to Registrant's Annual Report on Form 10-K for the fiscal
year ended May 30, 1993).
10.19 Agreement dated July 31, 1992 by and between General Mills, Inc.
and PepsiCo, Inc. (incorporated herein by reference to Exhibit
10.20 to Registrant's Annual Report on Form 10-K for the fiscal
year ended May 30, 1993).
* Items that are management contracts or compensatory plans or arrangements
required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K.
<PAGE>
Exhibit No. Description
----------- -----------
*10.20 Stock Option and Long-Term Incentive Plan of 1993, as amended to
date.
10.21 Standstil Agreement with CPC International, Inc. dated
October 17, 1994 (incorporated herein by reference to Exhibit
10(a) to Registrant's Quarterly Report on Form 10-Q for the
period ended February 26, 1995).
10.22 Addendum No. 3 effective as of March 15, 1993 to Protocol of
Cereal Partners Worldwide (incorporated herein by reference to
Exhibit 10(b) to Registrant's Quarterly Report on Form 10-Q for
the period ended February 26, 1995).
11 Statement of Determination of Common Shares and Common Share
Equivalents (contained on page 15 of this Report).
12 Statement of Ratio of Earnings to Fixed Charges (contained on
page 16 of this Report).
13 1997 Annual Report to Stockholders (only those portions
expressly incorporated by reference herein shall be deemed filed
with the Commission).
21 List of Subsidiaries of General Mills, Inc.
23 Consent of KPMG Peat Marwick LLP (contained on page 8 of this
Report).
* Items that are management contracts or compensatory plans or arrangements
required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K.
(b) Reports on Form 8-K. -- Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
GENERAL MILLS, INC.
Dated: August 18, 1997
By: /s/ S. S. MARSHALL
S. S. Marshall
Senior Vice President and General Counsel
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ R.M. BRESSLER Director July 27, 1997
(Richard M. Bressler)
/s/ L. DE SIMONE Director July 25, 1997
(Livio D. DeSimone)
/s/ W.T. ESREY Director July 28, 1997
(William T. Esrey)
/s/ C. W. GAILLARD Director, July 28, 1997
(Charles W. Gaillard) President
/s/ JUDITH R. HOPE Director July 29, 1997
(Judith R. Hope)
/s/ KENNETH MACKE Director July 25, 1997
(Kenneth A. Macke)
/s/ M.D. ROSE Director July 29, 1997
(Michael D. Rose)
/s/ S.W. SANGER Chairman of the Board and July 23, 1997
(Stephen W. Sanger) Chief Executive Officer
/s/ A. MICHAEL SPENCE Director July 28, 1997
(A. Michael Spence)
<PAGE>
Signature Title Date
--------- ----- ----
/s/ D. A. TERRELL Director July 29, 1997
(Dorothy A. Terrell)
/s/ RAYMOND G. VIAULT Director July 23, 1997
(Raymond G. Viault) Vice Chairman
/s/ C. ANGUS WURTELE Director July 28, 1997
(C. Angus Wurtele)
/s/ KENNETH L. THOME Senior Vice President, August 12, 1997
(Kenneth L. Thome) Financial Operations
(Principal Accounting Officer)
<PAGE>
GENERAL MILLS, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(in millions)
Column A Column B Column C Column D Column E
- --------------------------- -------- -------- -------- --------
Additions
Balance at charged to Deductions Balance
beginning costs and from at end of
Description of period expenses reserves period
- ----------- --------- -------- -------- ------
Allowance for possible losses
on accounts receivable:
Year ended May 25, 1997.. $4.1 $ .6 $1.1 (a) $4.1
(.5)(b)
---- ---- ---- ----
Total................ $4.1 $ .6 $ .6 $4.1
==== ==== ==== ====
Year ended May 26, 1996.. $4.1 $ .1 $ .4 (a) $4.1
(.3)(b)
---- ---- ---- ----
Total................ $4.1 $ .1 $ .1 $4.1
==== ==== ==== ====
Year ended May 28, 1995.. $3.6 $1.0 $ .8 (a) $4.1
(.3)(b)
---- ---- ---- ----
Total.................... $3.6 $1.0 $ .5 $4.1
==== ==== ==== ====
Notes:
(a) Bad debt write-offs.
(b) Other adjustments and reclassifications.
<PAGE>
EXHIBIT 11
<TABLE>
<CAPTION>
GENERAL MILLS, INC.
STATEMENT OF DETERMINATION OF COMMON SHARES AND
COMMON SHARE EQUIVALENTS
(in millions)
Weighted average number of
common shares and common share
equivalents assumed outstanding
-------------------------------
For the Fiscal Years Ended
May 25, 1997 May 26, 1996 May 28, 1995
------------ ------------ ------------
<S> <C> <C> <C>
Weighted average number of common shares outstanding,
excluding common stock held in treasury (a)...... 158.2 158.9 158.0
Common share equivalents resulting from the assumed
exercise of certain stock options (b)............ 3.6 * 3.1 * 2.1 *
---- ---- ----
Total common shares and common share equivalents... 161.8 162.0 160.1
===== ===== =====
<FN>
_________________
Notes:
(a) Computed as the weighted average net shares outstanding on stock-exchange
trading days.
(b) Common share equivalents are computed by the "treasury stock" method. This
method first determines the number of shares issuable under stock options
that had an option price below the average market price for the period, and
then deducts the number of shares that could have been repurchased with the
proceeds of options exercised.
_________________
* Common share equivalents are not material. As a result, earnings per share
have been computed using the weighted average of common shares outstanding
of 158.2 million, 158.9 million and 158.0 million for fiscal 1997, 1996 and
1995, respectively.
</FN>
</TABLE>
<PAGE>
EXHIBIT 12
GENERAL MILLS, INC.
RATIO OF EARNINGS TO FIXED CHARGES
Fiscal Year Ended
--------------------------------------------
May 25, May 26, May 28, May 29, May 30,
1997 1996 1995 1994 1993
------- ------- ------- ------- -------
Ratio of Earnings to Fixed Charges. 6.54 6.94 4.10 6.18 8.62
For purposes of computing the ratio of earnings to fixed charges, earnings
represent pretax income from continuing operations, plus pretax earnings or
losses of joint ventures, plus fixed charges (net of capitalized interest).
Fixed charges represent interest (whether expensed or capitalized) and one-third
(the proportion deemed representative of the interest factor) of rents of
continuing operations.
<PAGE>
EXHIBIT INDEX
4.1 Indenture between Registrant and Continental Illinois National Bank and
Trust Company of Chicago, as amended to date by Supplemental Indenture
Nos. 1 through 8.
10.4 Executive Incentive Plan, as amended to date.
10.10 1996 Compensation Plan for Non-Employee Directors, as amended to date.
10.20 Stock Option and Long-Term Incentive Plan of 1993, as amended to date.
11 Statement of Determination of Common Shares and Common Share
Equivalents.
12 Statement of Ratio of Earnings to Fixed Charges.
13 1997 Annual Report to Stockholders (portions only).
21 List of Subsidiaries of General Mills, Inc.
23 Consent of KPMG Peat Marwick LLP.
27 Financial Data Schedule.
EXHIBIT 4.1
GENERAL MILLS, INC.
and
CONTINENTAL ILLINOIS NATIONAL BANK
AND TRUST COMPANY
OF CHICAGO,
Trustee
INDENTURE
Dated as of July 1, 1982
<PAGE>
TABLE OF CONTENTS*
------------------
Page
----
PARTIES .................................................... 1
RECITALS:
Purpose of Indenture .................................. 1
Compliance with legal requirements .................... 1
Purpose of and consideration for Indenture ............ 1
ARTICLE ONE.
DEFINITIONS.
SECTION 1.01. Certain terms defined; other terms
defined in the Trust Indenture Act of
1939, as amended, or by reference
therein defined in the Securities
Act of 1933, as amended, to have
meanings therein assigned ................... 1
Authenticating Agent .......................... 2
Authorized Newspaper .......................... 2
Board of Directors ............................ 2
Business Day .................................. 2
Company ....................................... 2
Coupon Debt Security .......................... 3
Debt Securities ............................... 3
Debt Security Register ........................ 3
Event of Default .............................. 3
Fully Registered Debt Security ................ 3
Holder ........................................ 3
Indenture ..................................... 3
Interest ...................................... 3
Officers' Certificate ......................... 4
Opinion of Counsel ............................ 4
Original Issue Discount Security .............. 4
Outstanding ................................... 4
Person ........................................ 5
Place of Payment .............................. 5
Principal Corporate Trust Office of the
Trustee ...................................... 5
Principal Property ............................ 5
Record Date ................................... 5
Redemption Price .............................. 6
Registered Coupon Debt Security ............... 6
Registered Debt Security ...................... 6
Registered Holder ............................. 6
<PAGE>
Page
----
Responsible Officer ........................... 6
Restricted Subsidiary ......................... 6
Shareholders' Ownership ....................... 6
Subsidiary .................................... 7
Trustee ....................................... 7
Trust Indenture Act of 1939 ................... 7
United States of America ...................... 7
Unregistered Debt Security .................... 7
Unrestricted Subsidiary ....................... 7
Value ......................................... 8
Yield to Maturity ............................. 8
ARTICLE TWO.
FORM, ISSUE, DESCRIPTION, EXECUTION, REGISTRATION, TRANSFER
AND EXCHANGE OF DEBT SECURITIES.
SECTION 2.01. Forms generally ............................... 9
SECTION 2.02. Issuable in series, terms of Debt Securities .. 10
SECTION 2.03. Denominations, authentication and dating ...... 12
<PAGE>
Page
----
SECTION 2.04. Execution and authentication of Debt
Securities ................................... 13
SECTION 2.05. Exchanges of Debt Securities .................. 14
Registration and transfer of Debt
Securities ................................... 14
Debt Securities to be endorsed or
accompanied by instruments of transfer ....... 15
Charges upon exchange or transfer of
Debt Securities .............................. 15
Restrictions on issue, transfer or
exchange at time of redemption ............... 15
SECTION 2.06. Temporary Debt Securities, if any ............. 16
SECTION 2.07. Mutilated, destroyed, lost or stolen
Debt Securities .............................. 17
SECTION 2.08. Cancellation of surrendered Debt
Securities ................................... 18
SECTION 2.09. Provisions of the Indenture and Debt
Securities for the sole benefit of the
parties and the Holders ...................... 19
SECTION 2.10. Interest Rights Preserved ..................... 19
ARTICLE THREE.
REDEMPTION OF DEBT SECURITIES.
SECTION 3.01. Application of Article Three ................. 19
SECTION 3.02. Giving of notice of redemption ............... 19
Selection of Debt Securities in case
less than all Debt Securities of a
series are to be redeemed ................... 19
Deposit of redemption price ................... 20
SECTION 3.03. Sinking Fund ................................. 21
SECTION 3.04. When Debt Securities called for redemption
become due and payable ...................... 23
Debt Securities redeemed in part ............. 24
ARTICLE FOUR
PARTICULAR COVENANTS OF THE COMPANY.
SECTION 4.01. Payment of principal of (and premium, if any)
and interest on Debt Securities ............. 24
<PAGE>
Page
----
SECTON 4.02. Maintenance of offices or agencies for
registration, transfer, exchange and
payment of Debt Securities ................... 24
SECTION 4.03. Limitations on liens ......................... 25
SECTION 4.04. Limitation on sale and leaseback ............. 27
SECTION 4.05. Limitation on transfers to Unrestricted
Subsidiaries ................................ 28
SECTION 4.06. Company to preserve franchises ............... 28
SECTION 4.07. Limitation on consolidation, merger and sale . 28
SECTION 4.08. Further assurances ........................... 28
SECTION 4.09. Annual certificate ........................... 28
SECTION 4.10. Appointment to fill a vacancy in the office
of Trustee ................................... 29
SECTION 4.11. (a) Duties of paying agent ................... 29
(b) Company as paying agent .................. 29
(c) Turnover to Trustee by paying agent
or Company ............................... 30
(d) Holding sums in trust .................... 30
ARTICLE FIVE.
HOLDER LISTS AND REPORTS BY THE COMPANY
AND THE TRUSTEE.
`
SECTION 5.01. Company to furnish Trustee information
as to names and addresses of Holders ........ 30
SECTION 5.02. (a) Trustee to preserve information as
to names and addresses of Holders ........ 30
(b) Trustee to make information as to
names and addresses of Holders
available to "applicants" or mail
communications to Holders in certain
circumstances ............................ 30
Procedure if Trustee elects not to
make in formation available to
"applicants" ............................. 30
<PAGE>
Page
----
(c) Company and Trustee not accountable
for disclosure of information ........... 32
SECTION 5.03. (a) Annual and other reports to be filed by
Company with Trustee .................... 32
(b) Additional information and reports to be
filed with Trustee and Securities and
Exchange Commission ..................... 32
(c) Summaries of information and reports to
be transmitted by Company to Holders .... 32
SECTION 5.04. (a) Trustee to transmit reports to Holders ... 33
(b) Trustee to transmit certain further
reports to Holders ...................... 34
(c) Holders to be mailed reports ............. 34
(d) Copies of reports to be filed with
stock exchanges and Securities and
Exchange Commission ..................... 34
ARTICLE SIX.
REMEDIES OF THE TRUSTEE AND HOLDERS
ON EVENT OF DEFAULT.
SECTION 6.01. Events of Default defined ..................... 35
Acceleration of maturity upon Even
of Default ................................... 36
Waiver of default and rescission of
declaration of maturity ....................... 37
Restoration of former position and rights ..... 38
SECTION 6.02. Covenant of Company to pay to Trustee upon
demand whole amount due on Debt Securities
on default in payment of interest or
principal (and premium, if any) .............. 38
Trustee may recover judgment for whole
amount due on Debt Securities on failure
of Company to pay ............................ 39
<PAGE>
Page
----
Filing of proof of claim by Trustee in
bankruptcy, reorganization, receivership,
or other judicial proceedings ............... 39
Rights of action and to assert claims
may be enforced by Trustee without
possession of Debt Securities .............. 40
Trustee may enforce rights vested in it
by indenture by appropriate judicial
proceedings ................................. 40
SECTION 6.03. Application of moneys collected by Trustee ... 40
SECTION 6.04. Limitation on suits by Holders ............... 41
SECTION 6.05. Remedies cumulative .......................... 42
Delay or omission in exercise of rights
not a waiver of default ..................... 42
SECTION 6.06. Rights of Holders of majority in
principal amount of Debt Securities
to direct Trustee and to waive defaults ..... 42
SECTION 6.07. Trustee to give notice of defaults known
to it, but may withhold in certain
circumstances ............................... 43
SECTION 6.08. Requirement of an undertaking to pay
costs in certain suits under this
Indenture or against the Trustee ............ 44
ARTICLE SEVEN.
CONCERNING THE TRUSTEE.
SECTION 7.01. Upon Event of Default occurring an
continuing, Trustee shall exercise such
powers vested in it, and use same degree
of care and skill in their exercise, as
a prudent person would use .................. 44
Trustee not relieved from liability for
negligence or willful misconduct except
as provided in this Section ................. 44
(a) Prior to Event of Default and after the
curing of all Events of Default which may
have occurred ............................ 45
<PAGE>
Page
----
(1) Trustee not liable except for
performance of duties specifically
set forth ............................. 45
(2) In absence of bad faith, Trustee
may conclusively rely on certificates
or opinions furnished it hereunder,
subject to duty to examine the same
if specifically required to be
furnished to it ....................... 45
(b) Trustee not liable for error of judgment
made in good faith by responsible officer
unless Trustee negligent ................. 45
(c) Trustee not liable for action or
non-action in accordance with direction
of holders of majority in principal
amount of Debt Securities ................ 45
Trustee not obligated to expand or risk its
funds or to incur financial liabilities
if it has reasonable grounds to believe
that repayment or indemnity is not
reasonably assured .......................... 45
SECTION 7.02. Except as otherwise provided in Section 7.01:
(a) Trustee may rely on documents believed
genuine and properly signed or
presented ................................ 46
| (b) Sufficient evidence by certain
instruments provided for ................. 46
(c) Trustee may act on Opinion of Counsel .... 46
(d) Trustee may require indemnity from
Holders .................................. 46
(e) Trustee not liable for action in
good faith believed to be authorized ..... 46
(f) Trustee not bound to investigate facts ... 46
(g) Trustee may act through agents ........... 47
SECTION 7.03. Trustee not liable for recitals in Indenture
or in Debt Securities ....................... 47
No representations by Trustee as to
validity of Indenture or of Debt
Securities .................................. 47
<PAGE>
Page
----
Trustee not accountable for use of
Debt Securities or proceeds ................. 47
SECTION 7.04. Trustee, paying agent or Debt Security
registrar may own Debt Securities ........... 47
SECTION 7.05. Moneys received by Trustee to be held
in trust; interest not payable except
by agreement ................................ 47
SECTION 7.06. Trustee entitled to compensation,
reimbursement and indemnity ................. 47
Obligations to Trustee to be secured
by lien prior to Debt Securities ............ 48
SECTION 7.07. Right of Trustee to rely on certificate
of officers of Company where no other
evidence specifically prescribed ............ 48
SECTION 7.08. (a) Trustee acquiring conflicting interest
to eliminate conflict or resign .......... 49
(b) Notice to Holders in case of failure
to comply with subsection (a) ............ 49
(c) Definition of convicting interest ........ 49
(d) Definition of certain terms .............. 53
(e) Calculation of percentages of securities . 54
SECTION 7.09. Requirements for eligibility of Trustee ...... 55
SECTION 7.10. (a) Resignation of Trustee 55
(b) Removal of Trustee by Company or by
court on Holder's application ............ 56
(c) Removal of Trustee by Holders of
majority in principal amount of Debt
Securities ............................... 56
(d) Time when resignation or removal of
Trustee effective ........................ 57
SECTION 7.11. Acceptance by successor to Trustee ........... 57
Successor to be qualified and eligible ....... 58
Mailing of notice of succession of a Trustee . 58
SECTION 7.12. Successor to Trustee by merger, conversion,
consolidation or succession to business ..... 58
<PAGE>
Page
----
SECTION 7.13. (a) Limitation on rights of Trustee as a
creditor to obtain payment of certain
claims within four months prior to
default or during default, or to
realize on property as such creditor
there after .............................. 59
(b) Certain creditor relationships excluded .. 59
(c) Definition of certain terms .............. 59
SECTION 7.14. Authenticating Agents ........................ 63
ARTICLE EIGHT
CONCERNING THE HOLDERS.
SECTION 8.01. Evidence of action by Holders ................ 65
SECTION 8.02. Proof of execution of instruments and of
holding of Debt Securities .................. 65
SECTION 8.03. Who may be deemed owners of Debt Securities .. 65
SECTION 8.04. Debt Securities owned by Company or
controlled or controlling companies
disregarded for certain purposes ............ 67
SECTION 8.05. Revocation of action by Holder; action by
Holder binds future Holders ................. 67
ARTICLE NINE.
HOLDERS MEETINGS.
SECTION 9.01. Purposes for which meetings may be called .... 68
SECTION 9.02. Manner of calling meetings ................... 68
SECTION 9.03. Call of meetings by Company or Holders ....... 68
SECTION 9.04. Who may attend and vote at meetings .......... 69
SECTION 9.05. Regulations may be made by Trustee ........... 69
Conduct of the meeting ....................... 69
Voting rights--quorum ........................ 69
Adjournment .................................. 70
SECTION 9.06. Manner of voting at meetings and record
to be kept .................................. 70
<PAGE>
Page
----
ARTICLE TEN.
SUPPLEMENTAL INDENTURES
SECTION 10.01. Purposes for which supplemental indentures
may be entered into without consent
of Holders .................................. 71
SECTION 10.02. Modification of Indenture with consent
of Holders of 66-2/3% in principal
amount of Debt Securities ................... 72
SECTION 10.03. Eject of supplemental indentures ............. 73
Opinion of Counsel ........................... 73
SECTION 10.04. Debt Securities may bear notation of
changes by supplemental indentures .......... 74
ARTICLE ELEVEN.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE.
SECTION 11.01. Consolidation and merger of Company and
sale or conveyance permitted ................ 74
Assumption of obligations of Company
by successor corporation or transferee ...... 74
SECTION 11.02. Rights and duties of successor corporation ... 75
Appropriate changes may be made in form
of Debt Securities .......................... 75
Company may merge or acquire properties
of other corporations ....................... 75
SECTION 11.03. Opinion of Counsel ........................... 75
ARTICLE TWELVE.
SATISFACTION AND DISCHARGE OR INDENTURE; UNCLAIMED MONEYS.
SECTION 12.01. Satisfaction and discharge of Indenture ...... 76
SECTION 12.02. Application by Trustee of funds deposited
for payment of Debt Securities .............. 77
SECTION 12.03. Repayment of moneys held by paying agent ..... 77
SECTION 12.04. Repayment of moneys held by Trustee .......... 77
<PAGE>
Page
----
ARTICLE THIRTEEN.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS.
SECTION 13.01. Incorporators, stockholders, officers and
directors of Company exempt from
individual liability ........................ 78
ARTICLE FOURTEEN.
MISCELLANEOUS PROVISIONS.
SECTION 14.01. Successors and assigns of Company bound
by Indenture ................................ 78
SECTION 14.02. Acts of board, committee or officer
of successor corporation valid .............. 78
SECTION 14.03. Surrender of powers by Company ............... 79
SECTION 14.04. Required notices or demands may be served
by mail ..................................... 79
SECTION 14.05. Notices to Holders, Waiver ................... 79
SECTION 14.06. Officers' Certificate and Opinion of
Counsel to be furnished upon applications
or demands by the Company ................... 80
Statements to be included in each
certificate or opinion with respect to
compliance with a condition or covenant ..... 80
SECTION 14.07. Payments due on holidays and non-banking
days ........................................ 81
SECTION 14.08. Provisions required by Trust Indenture Act
of 1939 to control .......................... 81
SECTION 14.09. New York Contract ............................ 81
SECTION 14.10. Indenture may be executed in counterparts .... 81
ACCEPTANCE OF TRUST BY TRUSTEE .............................. 81
TESTIMONIUM ................................................. 82
SIGNATURES AND SEALS ........................................ 82
ACKNOWLEDGEMENT OF COMPANY .................................. 83
ACKNOWLEDGEMENT OF TRUSTEE .................................. 84
*This Table of Contents, comprising pages i to xi, inclusive, is not, nor shall
it for any purpose be deemed to be part of the Indenture.
<PAGE>
THIS INDENTURE, dated as of the first day of July, 1982, between GENERAL
MILLS, INC., a corporation duly organized and existing under the laws of the
State of Delaware (hereinafter sometimes referred to as the "Company"), party of
the first part, and CONTINENTAL ILLINOIS NATIONAL BANK AND TRUST COMPANY, a
national banking association duly organized and existing under the laws of the
United States of America and authorized to accept and execute trusts, as Trustee
(hereinafter sometimes referred to as the "Trustee"), party of the second part,
WITNESSETH:
The Company has duly authorized the execution and delivery of this Indenture
to provide for the issuance from time to time of its unsecured debentures, notes
or other evidences of indebtedness to be issued in one or more series (herein
called the "Debt Securities"), as in this Indenture provided, up to such
principal amount or amounts as may from time to time be authorized in or
pursuant to one or more resolutions of the Finance Committee of the Board of
Directors.
AND WHEREAS,
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
Now, THEREFORE, THIS INDENTURE WITTNESSETH:
For and in consideration of the premises and the purchase of the Debt
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Debt Securities or of
series thereof, as follows:
ARTICLE ONE.
DEFINITIONS.
SECTION 1.01. The terms defined in this Section 1.01 (except as herein
otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section1.01. All other terms used in
this Indenture which are defined in the Trust Indenture Act of 1939, as amended,
or which are by reference therein defined in the Securities Act of 1933, as
amended, shall (except as herein otherwise expressly provided or unless the
context otherwise requires) have the meanings assigned to such terms in said
Trust Indenture Act or in said Securities Act as in force at the date of this
Indenture as originally executed. All accounting terms used herein and not
expressly defined shall have the meanings assigned to such terms in accordance
with generally accepted accounting principles, and the term "generally accepted
accounting principles" means such accounting principles as are generally
accepted at the time of any computation.
Authenticating Agent:
The term "Authenticating Agent" shall mean any agent or agents of the
Trustee which at the time shall be appointed and acting pursuant to Section
7.14.
Authorized Newspaper:
The term "Authorized Newspaper" shall mean a newspaper of general
circulation in the relevant area, printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays. Whenever successive weekly publications in an
Authorized Newspaper are authorized hereunder, they may be made (unless
otherwise expressly provided herein) on the same or different days of the week
and in the same or different Authorized Newspapers.
Board of Directors:
The term "Board of Directors" shall mean the Board of Directors of the
Company or the duly authorized Finance Committee of the Board of Directors, or
any other Committee of that Board duly authorized to act hereunder.
Business Day:
The term "Business Day" means any day other than a day on which banking
institutions in the City of Chicago, Illinois, or the applicable Place of
Payment are authorized or required by law to close.
Company:
The term "Company" shall mean General Mills, Inc. and, subject to the
provisions of Article Eleven, shall also include its successors and assigns.
Coupon Debt Security:
The term "Coupon Debt Security" shall mean any Debt Security authenticated
and delivered with one or more interest coupons appertaining thereto.
Debt Securities:
The term "Debt Securities" has the meaning stated in the first recital of
this Indenture and more particularly means any Debt Securities authenticated and
delivered under this Indenture.
Debt Security Register:
The term "Debt Security Register" has the meaning specified in Section 2.05.
Event of Default:
The term "Event of Default" shall mean any event specified in Section 6.01.
Fully Registered Debt Security:
The term "Fully Registered Debt Security" shall mean any Debt Security
registered as to principal and interest.
Holder:
The term "Holder", when used with respect to any Debt Security, shall mean
the bearer of an Unregistered Debt Security or a Registered Holder of a
Registered Debt Security, and, when used with respect to any coupon, shall mean
the bearer thereof.
Indenture:
The term "Indenture" shall mean this instrument as originally executed, or,
if amended or supplemented as herein provided, as so amended or supplemented, or
both, and shall include the form and terms of a particular series of Debt
Securities established as contemplated hereunder.
Interest:
The term "interest" when used with respect to an Original Issue Discount
Security which by its terms bears interest only after maturity, shall mean
interest payable after maturity.
Officers' Certificate:
The term "Officers' Certificate" shall mean a certificate signed by the
Chairman of the Board, a Vice Chairman, or a Vice President and by the
Controller, the Treasurer, an Assistant Controller, or Assistant Treasurer, or
any other accounting officer of the Company. Each such certificate shall include
the statements provided for in Section 14.06, if and to the extent required by
the provisions thereof.
Opinion of Counsel:
The term "Opinion of Counsel" shall mean an opinion in writing signed by
legal counsel, who shall be satisfactory to the Trustee and who may be an
employee of or of counsel to the Company or the Trustee or who may be any other
counsel acceptable to the Trustee. Each such opinion shall include the
statements provided for in Section 14.06, if and to the extent required by the
provisions thereof.
Original Issue Discount Security:
The term "Original Issue Discount Security" shall mean any Debt Security
which provides for an amount less than the principal amount thereof to be due
and payable upon a declaration of acceleration of the maturity thereof pursuant
to Section 6.01.
Outstanding:
The term "Outstanding", when used with reference to Debt Securities, shall,
subject to the provisions hereof, mean, as of any particular time, all Debt
Securities authenticated and delivered by the Trustee under this Indenture,
except:
(a) Debt Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(b) Debt Securities, or portions thereof, for the payment or redemption of
which moneys in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or shall have been set
aside and segregated in trust by the Company (if the Company shall act as its
own paying agent), provided that if such Debt Securities are to be redeemed
prior to the maturity thereof, notice of such redemption shall have been duly
given pursuant to this Indenture, or provision therefor satisfactory to the
Trustee shall have been made; and
(c) Debt Securities in lieu of or in substitution for which other Debt
Securities shall have been authenticated and delivered pursuant to the terms of
Section 2.06.
In determining whether the Holders of the requisite principal amount of
Outstanding Debt Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of an
Original Issue Discount Security that shall be deemed to be Outstanding for such
purposes shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon a declaration of acceleration
of the maturity thereof pursuant to Section 6.01.
Person:
The term "Person" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Place of Payment:
The term "Place of Payment" shall mean a city or any political subdivision
thereof designated as such pursuant to Section 2.02.
Principal Corporate Trust Office of the Trustee:
The term "Principal Corporate Trust Office of the Trustee" shall mean the
principal office of the Trustee at which at any particular time its corporate
trust business shall be administered, which, at the date of this Indenture, is
30 North LaSalle Street, Chicago, Illinois.
Principal Property:
The term "Principal Property" shall mean any flour mill, manufacturing
plant, packaging plant or research laboratory owned by the Company or any
Restricted Subsidiary (whether located on land owned or leased by the Company or
a Restricted Subsidiary) as of the date of this Indenture (and any future
additions or improvements thereto) and located within the United States of
America or Canada.
Record Date:
The term "record date" as used with respect to any semi-annual interest
payment date shall have the meaning specified pursuant to Section 2.02.
Redemption Price:
The term "Redemption Price" when used with respect to any Debt Security to
be redeemed, shall mean the price at which it is to be redeemed pursuant to this
Indenture.
Registered Coupon Debt Security:
The term "Registered Coupon Debt Security" shall mean any Coupon Debt
Security registered as to principal only.
Registered Debt Security:
The term "Registered Debt Security" shall mean any Debt Security registered
in the Debt Security Register.
Registered Holder:
The term "Registered Holder" when used with respect to a Registered Debt
Security, shall mean the person in whose name such Debt Security is registered
in the Debt Security Register.
Responsible Officer:
The term "responsible officer" when used with respect to the Trustee shall
mean the chairman of the board of directors, the vice chairman of the board of
directors, the chairman of the executive committee, the vice chairman of the
executive committee, the president, any vice president, the cashier, the
secretary, the treasurer, any trust officer, any assistant trust officer, any
assistant vice president, any assistant cashier, any assistant secretary, any
assistant treasurer, or any other officer or assistant officer of the Trustee
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of his knowledge of and familiarity with the
particular subject.
Restricted Subsidiary:
The term "Restricted Subsidiary" shall mean any Subsidiary other than an
Unrestricted Subsidiary.
Shareholders' Ownership:
The term "Shareholders' Ownership" shall mean the stockholders' equities of
the Company and its subsidiaries, determined in accordance with generally
accepted accounting principles.
Subsidiary:
The term "Subsidiary" shall mean (a) any corporation of which at least a
majority of the outstanding stock having by the terms thereof ordinary voting
power to elect a majority of the board of directors of such corporation,
irrespective of whether or not at the time stock of any other class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency, is at the time directly or indirectly owned or
controlled by the Company, and (b) any corporation of which at least a majority
of the outstanding stock of the character described in the foregoing clause (a)
shall at the time be owned or controlled, directly or indirectly, by the Company
and any Subsidiary or Subsidiaries as defined in the foregoing clause (a) or by
one or more such Subsidiaries.
Trustee:
The term "Trustee" shall mean Continental Illinois National Bank and Trust
Company of Chicago, Illinois and, subject to the provisions of Article Seven
hereof, shall also include its successors in the trust created by this
Indenture.
Trust Indenture Act of 1939:
The term "Trust Indenture Act of 1939" (except as herein otherwise expressly
provided) shall mean the Trust Indenture Act of 1939, as amended, as in force at
the date of this Indenture as originally executed.
United States of America:
The term "United States of America" shall mean the fifty States constituting
the United States of America as of the date of this Indenture.
Unregistered Debt Security:
The term "Unregistered Debt Security" shall mean any Coupon Debt Security,
or bearer Debt Security (including any temporary bearer Debt Security), not
registered as to principal.
Unrestricted Subsidiary:
The term "Unrestricted Subsidiary" shall mean:
(a) Any Subsidiary, the greater portion of the operating assets of which is
located, or the principal business of which is carried on, outside the United
States of America and Canada or any Subsidiary which, during the twelve most
recent calendar months (or such shorter period as shall have elapsed since its
organization) derived the major portion of its gross revenues from sources
outside the United States of America or Canada;
(b) Any Subsidiary, the principal business of which consists of the
financing or assisting in financing of dealers, distributors or other customers
to facilitate (i) the acquisition or disposition of products of the Company or
any Subsidiary or (ii) obtaining equipment or machinery used in connection with
such acquisition or disposition;
(c) Any Subsidiary, the principal business of which consists of the owning,
leasing, dealing in or development of real property;
(d) Any Subsidiary, substantially all the assets of which consist of
securities of an Unrestricted Subsidiary as defined in clauses (a) through (c)
hereof.
Value:
The term "Value" when used in connection with a sale and leaseback
transaction shall mean, at any date as of which the amount thereof is to be
determined, the total net amount of rent (discounted from the respective due
dates thereof at the rate of interest per annum borne by all series of the Debt
Securities compounded annually) required to be paid by the lessee under such
lease during the remaining term thereof. The net amount of rent required to be
paid under any such lease for any such period shall be the total amount of the
rent payable by the lessee with respect to such period, but may exclude amounts
required to be paid on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges. In the case of any lease which is
terminable by the lessee upon the payment of a penalty, such net amount shall
also include the amount of such penalty, but no rent shall be considered as
required to be paid under such lease subsequent to the first date upon which it
may be so terminated.
All accounting terms not otherwise defined herein shall have the meanings
assigned to them in accordance with generally accepted accounting principles.
Yield to Maturity:
The term "Yield to Maturity" shall mean the yield to maturity, calculated at
the time of issuance of a series of Debt Securities or, if applicable, at the
most recent redetermination of interest on such series and calculated in
accordance with accepted financial practice.
ARTICLE TWO.
FORMS, ISSUE, DESCRIPTION, EXECUTION, REGISTRATION, TRANSFER AND
EXCHANGE OF DEBT SECURITIES.
SECTION 2.01. The Debt Securities of each series and the coupons, if any,
appurtenant thereto shall be in substantially the form as shall be established
by or pursuant to a resolution of the Board of Directors or in one or more
indentures supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with any law or with any rules made pursuant thereto or with
any rules of any securities exchange or as may, consistently herewith, be
determined by the officers executing such Debt Securities and coupons, if any,
as evidenced by their execution of such Debt Securities and coupons, if any.
The definitive-Debt Securities and coupons, if any, may be engraved as a
whole or in part and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required to comply with any law or
with any rule or regulation made pursuant thereto, or, if not inconsistent with
the provisions of this Indenture, as the Company may deem appropriate or as may
be required to comply with any rule or regulation of any stock exchange on which
the Debt Securities may be listed, or to conform to usage.
The Trustee's certificate of authentication on all Debt Securities
authenticated by the Trustee shall be in substantially the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.
CONTINENTAL ILLINOIS NATIONAL
BANK AND TRUST COMPANY
OF CHICAGO
as Trustee
By______________________________
Authorized Officer
An Authenticating Agent's certificate of authentication on all Debt
Securities authenticated by the Authenticating Agent shall be in substantially
the following form:
AUTHENTICATING AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.
As Authenticating Agent for the
Trustee
By________________________________
Authorized Officer
Section 2.02. The Debt Securities may be issued in one or more series. There
shall be established in or pursuant to a resolution of the Board of Directors or
established in one or more indentures supplemental hereto, prior to the issuance
of Debt Securities of any series,
(1) the title of the Debt Securities of the series (which shall
distinguish the Debt Securities of the series from all other Debt
Securities);
(2) any limit upon the aggregate principal amount of the Debt
Securities of the series which may be authenticated and delivered under
this Indenture (except for Debt Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Debt
Securities of the series pursuant to Section 2.05, 2.06, 2.07, 3.04, or
10.04);
(3) the date or dates on which the principal and premium, if any, of
the Debt Securities of the series is payable;
(4) the rate or rates (or method by which determined) at which the
Debt Securities of the series shall bear interest, if any, the date or
dates from which such interest shall accrue, the interest payment dates on
which such interest shall be payable and, in the case of Registered Debt
Securities, the record dates for the determination of Holders to whom such
interest is payable;
(5) if an Original issue Discount Security, the Yield to Maturity;
(6) the place or places (the "Place of Payment") where the principal
of, and premium, if any, and any interest on Debt Securities of the series
shall be payable;
(7) the price or prices at which, the period or periods within which
and the terms and conditions upon which Debt Securities of the series may
be redeemed, in whole or in part, at the option of the Company, pursuant to
any sinking fund or otherwise;
(8) the obligation, if any, of the Company to redeem, purchase or
repay Debt Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the price or
prices at which and the period or periods within which and the terms and
conditions upon which Debt Securities of the series shall be redeemed,
purchased or repaid, in whole or in part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Debt Securities of the series shall be
issuable;
(10) if other than the principal amount thereof, the portion of the
principal amount of Debt Securities of the series which shall be payable
upon declaration of acceleration of the maturity thereof pursuant to
Section 6.01 or provable in bankruptcy pursuant to Section 6.02;
(11) any Events of Default with respect to the Debt Securities of a
particular series, if not set forth herein;
(12) whether the Debt Securities shall be issued in registered or
bearer form, with or without coupons; and
(13) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Debt Securities of any one series shall be substantially identical
except as to denomination and except that Debt Securities of any series may be
issuable as Registered Debt Securities or Unregistered Debt Securities, and
except as may otherwise be provided in or pursuant to such resolution of the
Board of Directors or in any such indenture supplemental hereto.
SECTION 2.03. The Debt Securities of each series shall be issuable in such
form and in such denominations as shall be specified as contemplated by Section
2.02. In the absence of any such specification with respect to the Debt
Securities of any series, the Debt Securities of such series shall be issuable
in denominations of $1,000 and any integral multiple thereof.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Debt Securities of any series executed by the
Company to the Trustee for authentication, provided that in the case of Coupon
Debt Securities, the appropriate coupons must be attached. Except as otherwise
provided in this Article Two, the Trustee shall thereupon authenticate, or cause
the Authenticating Agent to authenticate, and deliver said Debt Securities to or
upon the written order of the Company, signed by the Chairman of the Board, a
Vice Chairman or any Executive Vice President and by the Treasurer or any
Assistant Treasurer. In authenticating, or causing to be authenticated, such
Debt Securities and accepting the additional responsibilities under this
Indenture in relation to such Debt Securities, the Trustee and the
Authenticating Agent shall be entitled to receive, and (subject to Section 7.01)
shall be fully protected in relying upon:
(1) a copy of any resolution or resolutions of the Board of Directors
relating thereto and, if applicable, an appropriate record of any action
taken pursuant to such resolution, in each case certified by the Secretary
or an Assistant Secretary of the Company;
(2) an executed supplemental indenture, if any;
(3) an Officers' Certificate setting forth the form and terms of the
Debt Securities as required pursuant to Sections 2.01 and 2.02,
respectively; and
(4) an Opinion of Counsel prepared in accordance with Section 14.06
which shall also state:
(a) that the form of such Debt Securities has been established by
or pursuant to a resolution of the Board of Directors or by a
supplemental indenture as permitted by Section 2.01 in conformity with
the provisions of this Indenture;
(b) that the terms of such Debt Securities have been established
by or pursuant to a resolution of the Board of Directors or by a
supplemental indenture as permitted by Section 2.02 in conformity with
the provisions of this Indenture;
<PAGE>
(c) that such Debt Securities, when authenticated and delivered
by the Trustee or the Authenticating Agent and issued by the Company
in the manner and subject to any conditions specified in such Opinion
of Counsel, will constitute valid and legally binding obligations of
the Company, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting the enforcement of creditors'
rights and to general equity principles;
(d) that all laws and requirements in respect of the execution
and delivery by the Company of the Debt Securities have been complied
with and that authentication and delivery of the Debt Securities by
the Trustee or the Authenticating Agent will not violate the terms of
the Indenture; and
(e) such other matters as the Trustee may reasonably request.
The Trustee shall have the right to decline to authenticate and deliver, or
to cause the Authenticating Agent to decline to authenticate and deliver, any
Debt Securities under this Section if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken or if the Trustee in good
faith by its Board of Directors or trustees, executive committee, or a trust
committee of directors or trustees and/or vice presidents shall determine that
such action would expose the Trustee or the Authenticating Agent to personal
liability to existing Holders.
Each Debt Security shall be dated the date of its authentication.
SECTION 2.04. The Debt Securities and coupons, if any, shall be signed on
behalf of the Company by its Chairman of the Board or a Vice Chairman or a Vice
President and by its Secretary or Treasurer or an Assistant Secretary or
Assistant Treasurer under its corporate seal which may, but need not, be
attested by its Secretary or an Assistant Secretary. Each such signature of the
Chairman of the Board, a Vice Chairman, a Vice President, the Secretary, the
Treasurer, an Assistant Secretary or an Assistant Treasurer upon the Debt
Securities and coupons, if any, may be in the form of a facsimile signature of
the present or any future Chairman of the Board, Vice Chairman, Vice President,
Secretary, Treasurer, Assistant Secretary or Assistant Treasurer and may be
imprinted or otherwise reproduced on the Debt Securities and coupons, if any.
The seal of the Company may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted or otherwise reproduced on the Debt Securities and
coupons, if any.
Only such Debt Securities as shall bear thereon a certificate of
authentication duly executed by the Trustee or the Authenticating Agent shall be
entitled to the benefits of this Indenture or be valid or obligatory for any
purpose. No coupon shall be entitled to the benefits of this Indenture or become
valid or obligatory for any purpose until such certificate by the Trustee or the
Authenticating Agent shall have become duly executed on the Debt Security to
which such coupon is appurtenant. Such certificate by the Trustee or the
Authenticating Agent upon any Debt Security executed by the Company shall be
conclusive evidence that the Debt Security so authenticated has been duly
authenticated and delivered hereunder and that the Holder of such Debt Security
is entitled to the benefits of this Indenture.
In case any officer Company who shall have signed any of the Debt Securities
or coupons shall cease to be such officer before the Debt Securities so signed,
or the Debt Securities to which such coupon appertains, shall have been
authenticated and delivered by the Trustee or the Authenticating Agent, or
disposed of by the Company, such Debt Securities nevertheless may be
authenticated and delivered or disposed of as though such person had not ceased
to be such officer of the Company; and any Debt Security or coupon may be signed
on behalf of the Company by any person who, at the actual date of the execution
of such Debt Security or coupon, shall be a proper officer of the Company to
sign such Debt Security or coupon, although at the date of the execution of this
Indenture any such person was not such officer.
SECTION 2.05. Registered Debt Securities of any series may be exchanged for
a like aggregate principal amount and maturity of Registered Debt Securities of
the same series in other authorized denominations. Registered Debt Securities to
be exchanged shall be surrendered at the office or agency to be maintained by
the Company as provided in Section 4.02, and the Company shall execute and
register and the Trustee shall authenticate and deliver in exchange therefor the
Registered Debt Security or Registered Debt Securities which the Holder making
the exchange shall be entitled to receive.
The Company shall keep, at the office or agency to be maintained by the
Company as provided in Section 4.02, a register or registers (the "Debt Security
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Debt Securities which by their
terms are registrable and transfers of Registered Debt Securities as in this
Article Two provided. The Debt Security Register shall be in written form or in
any other form capable of being converted into written form within a reasonable
time. Upon surrender for registration of transfer of any Registered Debt
Security of any series at such office or agency, the Company shall execute and
the Trustee shall authenticate and deliver in the name of the transferee or
transferees a new Registered Debt Security or Registered Debt Securities of the
same series for a like aggregate principal amount and maturity.
Upon presentation for registration of any Unregistered Debt Security of any
series which by its terms is registrable as to principal at the office agency of
the Company for such purpose as provided in Section 4.02, such Debt Security
shall be registered as to principal in the name of the Holder thereof and such
registration shall be noted on such Debt Security. Any Debt Security so
registered shall be transferable on the Debt Security Register, upon
presentation of such Debt Security at such office or agency for similar notation
thereon, but such Debt Security may be discharged from registration by being in
like manner transferred to bearer, whereupon transferability by delivery shall
be restored. Unregistered Debt Securities shall continue to be subject to
successive registrations and discharges from registration at the option of the
Holders thereof.
Coupon Debt Securities shall be transferable by delivery except while
registered as to principal. Registration of any Coupon Debt Security shall not
affect the transferability by delivery of the coupons appertaining thereto,
which shall continue to be payable to bearer and transferable by delivery.
At the option of the Holder thereof, Coupon Debt Securities of any series
which by their terms are registrable as to principal and interest may be
exchanged for Fully Registered Debt Securities of such series of any authorized
denominations and of a like aggregate principal amount and stated maturity, upon
surrender of the Coupon Debt Securities to be exchanged at such office or agency
with all unmatured coupons and all matured coupons in default thereto
appertaining, and upon payment, if the Company shall so require, of the charges
hereinafter provided. At the option of the Holder thereof, Fully Registered Debt
Securities of any series, which by their terms provide for the issuance of
Coupon Debt Securities, may be exchanged for Coupon Debt Securities or Fully
Registered Debt Securities of such series, of any authorized denominations and
of a like aggregate principal amount and stated maturity, upon surrender of the
Debt Securities to be exchanged at such office agency, and upon payment if the
Company shall so require, of the charges hereinafter provided. Whenever any Debt
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee or Authenticating Agent shall authenticate and deliver, the Debt
Securities which the Holder making the exchange is entitled to receive.
All Debt Securities issued upon any registration of transfer or exchange of
Debt Securities shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the Debt
Securities surrendered upon such registration of transfer or exchange.
All Registered Debt Securities presented or surrendered for registration of
transfer, exchange, redemption or payment shall (if so required by the Company
or the Trustee) be duly endorsed by, or be accompanied by a written instrument
or instruments of transfer in form satisfactory to the Company and the Trustee
and duly executed by, the Holder or his attorney duly authorized in writing.
The Company may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any exchange,
registration of transfer or transfer of Debt Securities. No service charge shall
be made for any such transaction.
The Company shall not be required to issue, register the transfer of or
exchange (a) any Debt Securities for a period of 15 days next preceding any
mailing of notice of redemption of such Debt Securities to be redeemed or (b)
any Debt Securities selected, called or being called for redemption except, in
the case of any Debt Security to be redeemed in part, the portion thereof not to
be redeemed.
SECTION 2.06. Pending the preparation of definitive Debt Securities of any
series, the Company may execute and, where the form of definitive Debt
Securities provides for registration of the definitive Debt Securities, register
and the Trustee or the Authenticating Agent shall authenticate and deliver
temporary Debt Securities (printed, lithographed or typewritten). Temporary Debt
Securities may be of any authorized denomination and substantially in the form
of the definitive Debt Securities of such series, but with such omissions,
insertions and variations as may be appropriate for temporary Debt Securities,
all as may be determined by the Company. Temporary Debt Securities may be issued
without a recital of the specific redemption prices set forth in the form of
Debt Security hereinabove recited, and may contain such reference to any
provisions of this Indenture as may be appropriate. Every temporary Debt
Security shall be executed and, where the form of definitive Debt Securities
provides for registration of the definitive Debt Securities, registered by the
Company and be authenticated by the Trustee or the Authenticating Agent upon the
same conditions and in substantially the same manner, and with like effect, as
the definitive Debt Securities. Without unnecessary delay the Company shall
execute and, where the form of definitive Debt Securities provides for
registration of the definitive Debt Securities, register and shall furnish
definitive Debt Securities of such series and thereupon temporary Debt
Securities of such series may be surrendered in exchange therefor at the office
or agency to be maintained by the Company as provided in Section 4.02, and the
Trustee or the Authenticating Agent shall authenticate and deliver in exchange
for such temporary Debt Securities of such series a like aggregate principal
amount and maturity of definitive Debt Securities of the same series of
authorized denominations. Such exchange shall be made by the Company at its own
expense without any charge therefor. Until so exchanged, the temporary Debt
Securities of any series shall be entitled to the same benefits under this
Indenture as definitive Debt Securities of such series.
SECTION 2.07. In case any temporary or definitive Debt Security or any
coupon attached to any such Debt Security shall become mutilated or be
destroyed, lost or stolen, the Company in its discretion may execute and, in the
case of a Registered Debt Security, register, and upon its request the Trustee
or the Authenticating Agent shall authenticate and deliver (in the case of a
mutilated Debt Security or coupon, upon its surrender to the Trustee), a new
Debt Security of the same series, bearing a number not contemporaneously
outstanding, in exchange for or in lieu of and substitution for any such
mutilated, destroyed, lost or stolen Debt Security or the Coupon Debt Security
to which such mutilated, destroyed, lost or stolen coupon appertains. In every
case the applicant for a substitute Debt Security shall furnish to the Company
and to the Trustee such security or indemnity as may be required by them to save
each of them harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company and the Trustee evidence to their
satisfaction of the destruction, loss or theft of such Debt Security or coupon,
as the case may be, and of the ownership thereof. The Trustee or the
Authenticating Agent may authenticate any such substitute Debt Security and
deliver the same upon the written request or authorization of any officer of the
Company. Upon the issuance of any substitute Debt Security, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith. In case any Debt Security or coupon which has matured or is about to
mature shall become mutilated or be destroyed, lost or stolen, the Company may,
instead of issuing a substitute Debt Security, pay or authorize the payment of
such Debt Security or coupon (without surrender thereof except in the case of a
mutilated Debt Security or coupon) if the applicant for such payment shall
furnish to the Company and to the Trustee such security or indemnity as they may
require to save each of them harmless and, in case of destruction, loss or
theft, evidence to the satisfaction of the Company and the Trustee of the
destruction, loss or theft of such Debt Security or coupon and of the ownership
thereof.
Every substitute Debt Security (and appurtenant coupons) issued pursuant to
the provisions of this Section 2.07 by virtue of the fact that a Debt Security
or coupon was destroyed, lost or stolen shall constitute an additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Debt Security or coupon shall at any time be enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Debt Securities and coupons of that
series duly issued under this Indenture. All Debt Securities and coupons shall
be held and owned upon the express condition that, to the extent permitted by
law, the foregoing provisions are exclusive with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debt Securities or coupons and
shall preclude any and all other rights or remedies, notwithstanding any law or
statute now existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities or coupons
without their surrender.
SECTION 2.08. All Debt Securities surrendered for payment, redemption,
registration of transfer, or exchange, and all coupons surrendered for payment,
shall, if surrendered to the Company, the Authenticating Agent or any paying
agent, be delivered to the Trustee for cancellation, or, if surrendered to the
Trustee, be cancelled by it, and no Debt Securities or coupons shall be issued
in lieu thereof except as expressly permitted by any of the provisions of this
Indenture or such Debt Securities. Unless otherwise requested by the Company,
the Trustee shall destroy cancelled Debt Securities and coupons and deliver a
certificate of such destruction to the Company. If the Company shall acquire any
of the Debt Securities or coupons, however, such acquisition shall not operate
as a redemption or satisfaction of the indebtedness represented by such Debt
Securities or coupons unless and until the same are delivered or surrendered to
the Trustee for cancellation.
SECTION 2.09. Nothing in this Indenture or in the Debt Securities, expressed
or implied, shall give or be construed to give to any person other than the
parties hereto and the Holders any legal or equitable right, remedy or claim
under or in respect of this Indenture, or under any covenant, condition or
provision herein contained, all the covenants, conditions and provisions hereof
being for the sole benefit of the parties hereto and of the Holders.
SECTION 2.10. Interest Rights Preserved. Each Debt Security of any series
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Debt Security of such series shall carry all the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Debt
Security of such series, and each such Debt Security of such series shall be so
dated, or have attached thereto such coupons, that neither gain nor loss in
interest shall result from such transfer, exchange or substitution.
ARTICLE THREE.
REDEMPTION OF DEBT SECURITIES.
SECTION 3.01. The provisions of this Article shall be applicable to the Debt
Securities of any series which are redeemable before their maturity except as
otherwise specified as contemplated by Section 2.02 for Debt Securities of such
series. The Company may at its option redeem all or from time to time any part
of the Debt Securities of any series in accordance with their terms, at any time
prior to maturity.
SECTION 3.02. In case the Company shall desire to exercise such right to
redeem all or any part of the Debt Securities of any series in accordance with
their terms, it shall fix a date for redemption and shall give notice of such
redemption to the Holders of such series to be redeemed as a whole or in part in
the manner provided in Section 14.05, not less than 30 nor more than 60 days
prior to the date fixed for redemption. Any notice which is given in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not the Holder receives the notice. In any case, failure duly to give notice
in the manner provided in Section 14.05, or any defect in the notice, to the
Holder of any Debt Security of a series designated for redemption as a whole or
in part shall not affect the validity of the proceedings for the redemption of
any other Debt Security of such series.
Each such notice of redemption shall specify the date fixed for redemption
and the Redemption Price and shall state that payment of the Redemption Price of
the Debt Securities or portions thereof to be redeemed will be made at the
office or agency to be maintained by the Company as provided in Section ax.02
upon presentation and surrender of such Debt Securities and all unmatured
coupons appertaining thereto, that interest, if any, accrued to the date fixed
for redemption will be paid as specified in said notice, and that on and after
said date interest, if any, thereon or on the portions thereof to be redeemed
will cease to accrue. If less than all the Debt Securities of a series are to be
redeemed, the notice of redemption shall specify which of such Debt Securities
of that series are to be redeemed in whole or in part. In case any Debt Security
is to be redeemed in part only, the notice shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Debt Security, a new Debt
Security or Debt Securities of that series in principal amount equal to the
unredeemed portion thereof will be issued.
If less than all the Debt Securities of a series are to be redeemed, the
Company shall give the Trustee adequate notice (but in no event less than 50
days' notice unless the Trustee shall otherwise agree) in advance as to the
aggregate principal amount and maturity of Debt Securities of that series to be
redeemed, and thereupon the Trustee shall select in such manner as it shall deem
appropriate and fair, the Debt Securities of that series to be redeemed and
shall thereafter promptly notify the Company in writing of the Debt Securities
to be redeemed; provided, however, that no Debt Security of a denomination of
$1,000 shall be redeemed in part and Debt Securities may be redeemed in part
only in multiples of $1,000.
On or before the Business Day next preceding any date fixed for redemption,
the Company shall deposit with the Trustee or with a paying agent (or, if the
Company is acting as its own paying agent, segregate and hold in trust as
provided in Section 4.11) an amount of money sufficient to pay the Redemption
Price of, and accrued interest, if any, on all the Debt Securities of such
series or proportions thereof which are to be redeemed on the date fixed for
redemption.
SECTION 3.03. The provisions of this Section shall be applicable to any
sinking fund for the retirement of Debt Securities of a series except as
otherwise specified as contemplated by Section 2.02 for Debt Securities of such
series.
The minimum amount of any sinking fund payment provided for by the terms of
Debt Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Debt Securities of any series is herein referred to as an "optional
sinking fund payment."
In lieu of making all or any part of any mandatory sinking fund payment with
respect to any series of Debt Securities in cash, the Company may at its option
(a) deliver to the Trustee Debt Securities of that series theretofore purchased
or otherwise acquired by the Company, or (b) receive credit for the principal
amount of Debt Securities of that series which have been redeemed either at the
election of the Company pursuant to the terms of such Debt Securities or through
the application of permitted optional sinking fund payments pursuant to the
terms of such Debt Securities; provided that such Debt Securities have not been
previously so credited. Such Debt Securities shall be received and credited for
such purpose by the Trustee at the Redemption Price specified in such Debt
Securities for redemption through operation of the sinking fund and the amount
of such mandatory sinking fund payment shall be reduced accordingly. Not less
than 50 days prior to each sinking fund payment date for any series of Debt
Securities, the Company will deliver to the Trustee a certificate signed by the
Treasurer or any Assistant Treasurer of the Company specifying the amount of the
next ensuing sinking fund payment for that series pursuant to the terms of that
series, the portion thereof, if any, which is to be satisfied by payment of cash
and the portion thereof, if any, which is to be satisfied by delivering and
crediting Debt Securities of that series pursuant to this Section 3.03 (which
Debt Securities will accompany such certificate) and whether the Company intends
to exercise its right to make a permitted optional sinking fund payment with
respect to such series. Such certificate shall also state that no Event of
Default has occurred and is continuing with respect to such series. Such
certificate shall be irrevocable and upon its delivery the Company shall be
obligated to make the cash payment or payments therein referred to, if any, on
or before the next succeeding sinking fund payment date. In the case of the
failure of the Company to deliver such certificate (or to deliver the Debt
Securities specified in this paragraph), the sinking fund payment due on the
next succeeding sinking fund payment date for that series shall be paid entirely
in cash and shall be sufficient to redeem the principal amount of such Debt
Securities subject to a mandatory sinking fund payment without the option to
deliver or credit Debt Securities as provided in this Section 3.03 and without
the right to make any optional sinking fund payment with respect to such series.
Any sinking fund payment or payments (mandatory or optional) made in cash
plus any unused balance of any preceding sinking fund payments made in cash
which shall equal or exceed $100,000 (or a lesser sum if the Company shall so
request) with respect to the Debt Securities of any particular series shall be
applied by the Trustee on the sinking fund payment date on which such payment is
made (or, if such payment is made before a sinking fund payment date, on the
sinking fund payment date following the date of such payment) to the redemption
of such Debt Securities at the Redemption Price specified in such Debt
Securities for operation of the sinking fund together with accrued interest, if
any, to the date fixed for redemption. Any sinking fund moneys not so applied or
allocated by the Trustee to the redemption of Debt Securities shall be added to
the next cash sinking fund payment received by the Trustee for such series and,
together with such payment, shall be applied in accordance with the provisions
of this Section 3.03. Any and all sinking fund moneys with respect to the Debt
Securities of any particular series held by the Trustee on the last sinking fund
payment date with respect to Debt Securities of such series and not held for the
payment or redemption of particular Debt Securities shall be applied by the
Trustee, together with other moneys, if necessary, to be deposited sufficient
for the purpose, to the payment of the principal of the Debt Securities of that
series at maturity.
The Trustee shall select the Debt Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 3.02 and the
Company shall cause notice of the redemption thereof to be given in the manner
provided in Section 3.02 except that the notice of redemption shall also state
that the Debt Securities are being redeemed by operation of the sinking fund.
Such notice having been duly given, the redemption of such Debt Securities shall
be made upon the terms and in the manner stated in Section 3.04.
On or before each sinking fund payment date, the Company shall pay to the
Trustee in cash a sum equal to any interest accrued to the date fixed for
redemption of Debt Securities or portions thereof to be redeemed on such sinking
fund payment date pursuant to this Section 3.03.
The Trustee shall not redeem any Debt Securities of a series with sinking
fund moneys or give any notice of redemption of such Debt Securities by
operation of the sinking fund for such series during the continuance of a
default in payment of interest on such Debt Securities or of any Event of
Default (other than an Event of Default occurring as a consequence of this
paragraph) with respect to such Debt Securities, except that if the notice of
redemption of any such Debt Securities shall theretofore have been given in
accordance with the provisions hereof, the Trustee shall redeem such Debt
Securities if cash sufficient for that purpose shall be deposited with the
Trustee for that purpose in accordance with the terms of this Article. Except as
aforesaid, any moneys in the sinking fund for such series at the time when any
such default or Event of Default shall occur and any moneys thereafter paid into
such sinking fund shall, during the continuance of such default or Event of
Default, be held as security for the payment of such Debt Securities; provided,
however, that in case such Event of Default or default shall have been cured or
waived as provided herein, such moneys shall thereafter be applied on the next
sinking fund payment date for such Debt Securities on which such moneys may be
applied pursuant to the provisions of this Section 3.03.
SECTION 3.04. If the giving of notice of redemption shall have been
completed as above provided, the Debt Securities or portions of Debt Securities
specified in such notice shall become due and payable on the date and at the
place stated in such notice at the applicable Redemption Price, together with
interest, if any, accrued to the date fixed for redemption, and unless the
Company shall default in the payment of such Debt Securities at the Redemption
Price, together with interest, if any, accrued to said date, interest on the
Debt Securities or portions of Debt Securities so called for redemption shall
cease to accrue on and after said date. If any Debt Security called for
redemption shall not be so paid upon surrender thereof for redemption, the
principal (and premium, if any) shall, until paid, bear interest from the date
axed for redemption at the rate borne by the Debt Securities. On presentation
and surrender of such Debt Securities and all unmatured coupons appertaining
thereto at said Place of Payment in said notice specified, such Debt Securities
or the specified portions thereof shall be paid and redeemed by the Company at
the applicable Redemption Price, together with interest, if any, accrued thereon
to the date axed for redemption.
Upon presentation of any Debt Security which is redeemed in part only, the
Company shall execute and, in the case of Registered Debt Securities, register
and the Trustee or the Authenticating Agent shall authenticate and deliver, at
the expense of the Company, a new Debt Security or Debt Securities in an
authorized denomination or denominations and in the principal amount equal to
the unredeemed portion of the Debt Security so presented.
ARTICLE FOUR.
PARTICULAR COVENANTS OF THE COMPANY.
SECTION 4.01. The Company covenants and agrees for the benefit of the
Holders of each series of Debt Securities that it will duly and punctually pay
or cause to be paid the principal of and premium, if any, and interest on the
Debt Securities of that series at the places, at the respective times and in the
manner provided in such Debt Securities. Each installment of interest on
interest-bearing Registered Debt Securities of any series may be paid by mailing
checks for such interest payable to or upon the written order of the Holders of
such Registered Debt Securities entitled thereto as they shall appear on the
Debt Security Register. The interest on Coupon Debt Securities shall be payable
only upon presentation and surrender of the several coupons for such interest
installments as are evidenced thereby as they severally mature. The interest on
any temporary bearer Debt Securities shall be paid, as to the installments of
interest evidenced by coupons attached thereto, if any, only upon presentation
and surrender thereof, and, as to the other installments of interest, if any,
only upon presentation of such Debt Securities for notation thereon of the
payment of such interest. The interest on Registered Debt Securities shall be
payable only to or upon the written order of the Holders thereof.
SECTION 4.02. As long as any of the Debt Securities of a series remain
outstanding, the Company will maintain an office or agency in the City of New
York, New York, in the City of Chicago, Illinois, and in any other Place of
Payment, where the Debt Securities may be presented for exchange and
registration of transfer as in this Indenture provided, where notices and
demands to or upon the Company in respect of the Debt Securities of this
Indenture may be served and where the Debt Securities and any coupons
appurtenant thereto may be presented for payment. The Principal Corporate Trust
Office of the Trustee shall be said office or agency for all the aforesaid
purposes, unless the Company shall maintain some other office or agency for such
purposes and shall give the Trustee notice of the location thereof. In case the
Company shall fail to maintain such office or agency, presentations may be made
and notices and demands may be served at the Principal Corporate Trust Office of
the Trustee and, in such event, the Company hereby appoints the Trustee its
agent to receive all such presentations, notices and demands.
SECTION 4.03. SO long as any of the Debt Securities remain Outstanding and
unpaid, the Company will not create, assume or suffer to exist and will not
cause, suffer or permit any Restricted Subsidiary to create, assume or suffer to
exist, any mortgage, pledge or other lien or encumbrance of or upon any
Principal Property, or of or upon any indebtedness of, or equity securities of,
any Restricted Subsidiary, without making effective provision, and the Company
covenants that in any such case it will make or cause to be made effective
provision, whereby the Debt Securities of each series outstanding shall be
secured by such mortgage, pledge, lien or encumbrance equally and ratably with
any and all other obligations and indebtedness thereby secured so long as such
indebtedness is so secured; provided, that the foregoing covenant shall not
apply to any mortgage, pledge, lien or encumbrance of the following character.
(a) mortgages, pledges, liens or encumbrances on property included
within the foregoing covenant existing at the time of acquisition of such
property or to secure the payment of all or any part of the purchase price
thereof or to secure any indebtedness incurred at the time of, or within 90
days after, the acquisition of such property for the purpose of financing
all or any part of the purchase price thereof;
(b) mortgages, pledges, liens or encumbrances existing at the time
such corporation became or becomes a Restricted Subsidiary;
(c) mortgages, pledges, liens or encumbrances on property of a
corporation existing at the time such corporation was or is (i) merged into
or consolidated with the Company or a Restricted Subsidiary or (ii)
otherwise acquired by the Company or any Restricted Subsidiary;
(d) mortgages, pledges, liens or encumbrances executed by any
Restricted Subsidiary and exclusively securing indebtedness of such
Restricted Subsidiary held by the Company or any other Restricted
Subsidiary;
(e) liens or encumbrances arising by reason of any judgment, decree or
order of any court, so long as any appropriate legal proceedings which may
have been duly initiated for the review of such judgment, decree or order
shall not have been finally terminated or so long as the period within
which such proceedings may be initiated shall not have expired; liens for
taxes not yet due or which are being contested in good faith; or pledges or
deposits to secure payment of worker's compensation or other insurance;
good faith deposits in connection with tenders, contracts (other than
contracts for the payment of money) or leases; deposits to secure public or
statutory obligations; deposits to secure or in lieu of surety or appeal
bonds; or deposits as security for the payment of taxes;
(f) extensions, renewals or replacements, in whole or in part, of any
mortgage, pledge, lien or encumbrance referred to in the foregoing clauses
(a) to (e), inclusive, provided that the principal amount of indebtedness
secured thereby shall not exceed the principal amount of indebtedness so
secured at the time of such extension, renewal or replacement; and
(g) other mortgages, pledges, liens or encumbrances on property
included in the foregoing covenant, provided that the sum of the aggregate
indebtedness secured by such other mortgages, pledges, liens and
encumbrances (exclusive of indebtedness secured by mortgages, pledges,
liens and encumbrances permitted by clauses (a) through (f) hereof), and
the aggregate Value of sale and leaseback transactions permitted under
Section 4.04, shall not exceed an amount equal to 5% of Shareholders'
Ownership as of the end of the fiscal quarter of the Company last preceding
the date of the computation.
The Company covenants and agrees that if, upon any consolidation or merger
of the Company with or into any other corporation, or upon any sale or
conveyance of the properties and assets of the Company as an entirety or
substantially as an entirety to any other corporation, or upon any acquisition
by the Company of all or any part of the property of another corporation, any
Principal Property of the Company would thereupon become subject to any
mortgage, pledge, encumbrance or lien, the Company, prior to such consolidation,
merger, sale, conveyance or acquisition, will by indenture supplemental hereto
secure the Debt Securities of all series then outstanding (equally and ratably
with any other indebtedness of the Company then entitled to similar security) by
a direct lien on such Principal Property of the Company prior to all liens other
than any theretofore existing thereon.
In the event that the Company shall hereafter secure the Debt Securities
pursuant to the provisions of this Section 4.03, the Trustee is hereby
authorized to enter into an indenture or agreement supplemental hereto and to
take such action, if any, as it may deem advisable to enable it to enforce
effectively the rights of the Holders of the Debt Securities so secured.
Subject to the provisions of Section 7.01, the Trustee may receive an
Opinion of Counsel as conclusive evidence that such supplemental indenture or
action taken to secure the Debt Securities complies with the provisions of this
Section 4.03.
SECTION 4.04. The Company will not sell to anyone other than a Restricted
Subsidiary any Principal Property, or any substantial portion thereof, with the
intention of taking back a lease of such property except a lease for a temporary
period, not to exceed three years, by the end of which it is intended that the
use of such property by the Company or any Restricted Subsidiary will be
discontinued, and the Company will not permit any Restricted Subsidiary to sell
to anyone other than the Company or any other Restricted Subsidiary any
Principal Property, or any substantial portion thereof, with the intention of
taking back a lease of such property except a lease for a temporary period, not
to exceed three years, by the end of which it is intended that the use of such
property by any Restricted Subsidiary or the Company will be discontinued;
provided, however, that the Company may make or may permit a Restricted
Subsidiary to make such a sale if, in the alternative, either (a) the Company or
a Restricted Subsidiary would be permitted under Section 4.03 to permit a
mortgage, pledge, lien or encumbrance on a Principal Property securing
indebtedness equal in amount to the Value of such sale and leaseback transaction
without equally and ratably securing the Debt Securities; or (b) the net
proceeds of such sale (including any purchase money mortgages received in
connection with such sale) are at least equal to the fair value (as determined
by the Board of Directors) of such property and the Company, within 120 days
after the transfer of title to such property, applies an amount equal to the net
proceeds derived from such sale (including the amount of any such purchase money
mortgages) to the retirement of Debt Securities (in the manner, subject to the
restrictions and at the redemption prices then applicable to redemption of Debt
Securities at the option of the Company as specified in Sections 3.01 and 3.02)
or other indebtedness of the Company or a Restricted Subsidiary with a maturity
in excess of one year from the date of such sale and which is not subordinate in
right of payment to the payment of the Debt Securities.
SECTION 4.05. The Company will not, and it will not permit any Restricted
Subsidiary to, transfer any Principal Property to any Unrestricted Subsidiary,
unless the net proceeds of such transfer are at least equal to the fair value
(as determined by the Board of Directors) of the property transferred.
SECTION 4.06. So long as any of the Debt Securities remain outstanding and
unpaid the Company will at all times (except as otherwise provided or permitted
in this Section 4.06 or elsewhere in this Indenture) do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and franchises and the corporate existence and franchises of each
Restricted Subsidiary; provided, that nothing herein shall require the Company
to continue the corporate existence or franchises of any Restricted Subsidiary
if in the judgment of the Board of Directors it shall be necessary, advisable or
in the interest of the Company to discontinue the same.
SECTION 4.07. The Company will not consolidate or merge with or sell, convey
or lease all or substantially all of its property to any other corporation
except as permitted in Article Eleven.
SECTION 4.08. From time to time the Company will make, execute and deliver
to the Trustee or cause to be made, executed and delivered to the Trustee any
and all such further and other instruments and assurances as may be reasonably
necessary or proper to carry out the intention of or to facilitate the
performance of the terms of this Indenture or to secure the rights and remedies
hereunder of the Holders of the Debt Securities.
SECTION 4.09. On or before May 1, 1983, and on or before May 1 in each year
thereafter, the Company shall file with the Trustee a statement, signed by the
Chairman of the Board, Vice Chairman of the Board, or any Vice President and by
the Treasurer or any Assistant Treasurer or the Secretary or any Assistant
Secretary of the Company, stating that in the course of the performance by the
signers of their duties as such officers of the Company they would normally
obtain knowledge of any default by the Company in the performance or fulfillment
of any covenant, agreement or condition contained in this Indenture, stating
whether or not they have obtained knowledge of any such default, and, if so,
specifying each such default of which the signers have knowledge and the nature
and status thereof.
SECTION 4.10. The Company, whenever necessary to avoid or tell a vacancy in
the office Trustee, will appoint, in the manner provided in Section 7.10, a
Trustee, so that there shall at all times be a Trustee with respect to each
series of Debt Securities hereunder.
SECTION 4.11. (a) Whenever the Company shall appoint a paying agent (other
than the Trustee) with respect to the Debt Securities of any series it will
cause such paying agent to execute and deliver to the Trustee an instrument in
which such agent shall agree with the Trustee, subject to the provisions of this
Section 4.11,
(1) that it will hold all sums held by it as such agent for the
payment of the principal of (and premium, if any) or interest on the Debt
Securities of such series (whether such sums have been paid to it by the
Company or by any other obliger on the Debt Securities of such series) in
trust for the benefit of the respective Holders of the Debt Securities of
such series or of the Trustee, as the case may be, and will notify the
Trustee of the receipt of sums to be so held,
(2) that it will give the Trustee notice of any failure by the
Company (or by any other obliger on the Debt Securities of such series) to
make any payment of the principal of (and premium, if any) or interest on
the Debt Securities of such series when the same shall be due and payable,
and
(3) that it will at any time during the continuance of an Event of
Default, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held by it as such agent.
(b) If the Company shall act as its own paying agent, it will, on or before
each due date of the principal of (and premium, if any) or interest on the Debt
Securities of any series, set aside, segregate and hold in trust for the benefit
of the respective Holders of Debt Securities of such series or of the Trustee,
as the case may be, a sum sufficient to pay such principal (and premium, if any)
or interest so becoming due. The Company will promptly notify the Trustee of any
failure to take such action.
(c) Anything in this Section 4.11 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by it or any paying agent hereunder as
required by this Section 4.11, such sums to be held by the Trustee upon the
trusts herein contained.
(d) Anything in this Section 4.11 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 4.11 is subject to
the provisions of Sections 12.03 and 12.04.
ARTICLE FIVE.
HOLDER LISTS AND REPORTS BY THE COMPANY
AND THE TRUSTEE
SECTION 5.01. The Company covenants and agrees that it will furnish or cause
to be furnished to the Trustee semi-annually, not more than 15 days after each
record date for the payment of semi-annual interest on Registered Debt
Securities, and on dates to be determined pursuant to Section 2.02 for
non-interest bearing securities, a list, in such form as the Trustee may
reasonably require, containing all the information in the possession or control
of the Company as to the names and addresses of the Holders of the Debt
Securities of each series as of such record date or dates, and at such other
times as the Trustee may request in writing, within 30 days after receipt by the
Company of any such request, a list similar in form and in content as of a date
not more than 15 days prior to the time such list is furnished, provided that so
long as the Trustee is the registrar of the Debt Securities and all the Debt
Securities of any series are Fully Registered Debt Securities, no such list
shall be required to be furnished in respect of such series.
SECTION 5.02. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
Holders of each series of Debt Securities contained in the most recent list
furnished to it as provided in Section 5.01 and received by it in its capacity
as paying agent or registrar (if so acting). The Trustee may destroy any list
furnished to it as provided in Section 5.01 upon receipt of a new list so
furnished.
(b) In case three or more Holders of Debt Securities (hereinafter referred
to as "applicants") apply in writing to the Trustee and furnish to the Trustee
reasonable proof that each such applicant has owned a Debt Security of a
particular series for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders of Debt Securities of a particular series (in
which case the applicants must all hold Debt Securities of such series) or with
Holders of all Debt Securities with respect to their rights under this Indenture
or under such Debt Securities and is accompanied by a copy of the form of proxy
or other communication which such applicants propose to transmit, then the
Trustee shall, within five Business Days after the receipt of such application,
at its election, either
(1) afford such applicants access to all information preserved at
the time by the Trustee in accordance with the provisions of subsection
(a) of this Section 5.02, or
(2) inform such applicants as to the approximate number of Holders
of Debt Securities of such series or all Debt Securities, as the case may
be, whose names and addresses appear in the information preserved at the
time by the Trustee, in accordance with the provisions of subsection (a)
of this Section 5.02, and as to the approximate cost of mailing to such
Holders the form of proxy or other communication, if any, specified in
such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder of a Debt Security of such series or all Debt Securities, as
the case may be, whose name and address appear in the information preserved at
the time by the Trustee in accordance with the provisions of subsection (a) of
this Section 5.02 a copy of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provisions for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender the Trustee shall mail to such applicants and file with the
Securities and Exchange Commission, together with a copy of the material to be
mailed, a written statement to the effect that, in the opinion of the Trustee,
such mailing would be contrary to the best interests of the Holders of Debt
Securities of such series or all Debt Securities, as the case may be, or would
be in violation of applicable law. Such written statement shall specify the
basis of such opinion. If said Commission, after opportunity for a hearing upon
the objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, said Commission shall find, after
notice and opportunity for hearing, that all preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders of Debt Securities of a particular series (in
which case the applicants must all hold Debt Securities of such series) or with
Holders of all Debt Securities with respect to their rights under this Indenture
or under such Debt Securities and is accompanied by a copy of the form of proxy
or other communication which such applicants propose to transmit, then the
Trustee shall, within five Business Days after the receipt of such application,
at its election, either
(1) afford such applicants access to all information preserved at
the time by the Trustee in accordance with the provisions of subsection
(a) of this Section 5.02, or
(2) inform such applicants as to the approximate number of Holders
of Debt Securities of such series or all Debt Securities, as the case may
be, whose names and addresses appear in the information preserved at the
time by the Trustee, in accordance with the provisions of subsection (a)
of this Section 5.02, and as to the approximate cost of mailing to such
Holders the form of proxy or other communication, if any, specified in
such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder of a Debt Security of such series or all Debt Securities, as
the case may be, whose name and address appear in the information preserved at
the time by the Trustee in accordance with the provisions of subsection (a) of
this Section 5.02 a copy of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provisions for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender the Trustee shall mail to such applicants and file with the
Securities and Exchange Commission, together with a copy of the material to be
mailed, a written statement to the effect that, in the opinion of the Trustee,
such mailing would be contrary to the best interests of the Holders of Debt
Securities of such series or all Debt Securities, as the case may be, or would
be in violation of applicable law. Such written statement shall specify the
basis of such opinion. If said Commission, after opportunity for a hearing upon
the objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, said Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have
been met and shall enter an order so declaring, the Trustee shall mail copies of
such material to all such Holders with reasonable promptness after the entry of
such order and the renewal of such tender; otherwise the Trustee shall be
relieved of any obligation or duty to such applicants respecting their
application.
(c) Each and every Holder, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
paying agent shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders in accordance with the
provisions of subsection (b) of this Section 5.02, regardless of the source from
which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
said subsection (b).
SECTION 5.03. The Company covenants:
(a) to file with the Trustee, within 15 days after the Company is required
to file the same with the Securities and Exchange Commission, copies of the
annual reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as said Commission may from time to time
by rules and regulations prescribe) which the Company may be required to file
with said Commission pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934, or if the Company is not required to file information,
documents or reports pursuant to either of such sections, then to file with the
Trustee and said Commission, in accordance with rules and regulations prescribed
from time to time by said Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to section 13
of the Securities Exchange Act of 1934 in respect of a security listed and
registered on a national securities exchange as may be prescribed from time to
time in such rules and regulations;
(b) to file with the Trustee and the Securities and Exchange Commission, in
accordance with the rules and regulations prescribed from time to time by said
Commission, such additional information, documents and reports with respect to
compliance by the Company with the conditions and covenants provided for in this
Indenture as may be required from time to time by such rules and regulations;
and
(c) to transmit by mail to all Holders, in the manner and to the extent
provided in Section 5.04(c), within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required to be
filed by the Company pursuant to subsections (a) and (b) of this Section 5.03 as
may be required by rules and regulations prescribed from time to time by the
Securities and Exchange Commission.
SECTION 5.04. (a) On or before August l, 1983, and on or before August 1 in
every year thereafter so long as any Debt Securities are Outstanding, the
Trustee shall transmit to the Holders of each series, as provided in subsection
(c) of this Section 5.04, a brief report dated as of the preceding June 1 with
respect to:
(1) its eligibility under Section 7.09, and its qualifications under
Section 7.08, or in lieu thereof, if to the best of its knowledge it has
continued to be eligible and qualified under such Sections, a written
statement to such effect;
(2) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee as such which remain unpaid on the date of such Debt
Securities report, and for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Debt Securities, on any
property or funds held or collected by it as Trustee, except that the
Trustee shall not be required (but may elect) to report such advances if
such advances so remaining unpaid aggregate not more than one-half of one
per cent, of the principal amount of the Debt Securities for any series
Outstanding on the date of such report;
(3) the amount, interest rate, and maturity date of all other
indebtedness owing by the Company (or by any other obliger on the Debt
Securities) to the Trustee in its individual capacity on the date of such
report, with a brief description of any property held as collateral
security therefor, except an indebtedness based upon a creditor
relationship arising in any manner described in paragraph (2), (3), (4),
or (6) of subsection (b) of Section 7.13;
(4) the property and funds, if any, physically in the possession of
the Trustee as such on the date of such report;
(5) any additional issue of Debt Securities which it has not
previously reported; and
(6) any action taken by the Trustee in the performance of its duties
under this Indenture which it has not previously reported and which in its
opinion materially affects the Debt Securities, except action in respect
of a default, notice of which has been or is to be withheld by it in
accordance with provisions of Section 6.07.
(b) The Trustee shall transmit to the Holders, as provided in subsection (c)
of this Section 5.04, a brief report with respect to the character and amount of
any advances (and if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee as such since the date of
the last report transmitted pursuant to the provisions of subsection (a) of this
Section 5.04 (or if no such report has yet been so transmitted, since the date
of execution of this Indenture), for the reimbursement of which it claims or may
claim a lien or charge prior to that of the Debt Securities on property or funds
held or collected by it as Trustee, and which it has not previously reported
pursuant to this subsection, except that the Trustee shall not be required (but
may elect) to report such advances if such advances remaining unpaid at any time
aggregate ten percent or less of the principal amount of Debt Securities
Outstanding at such time, such report to be transmitted within 90 days from such
time.
(c) Reports pursuant to this Section 5.04 shall be transmitted by mail:
(1) to all Registered Holders of Debt Securities, as the names and
addresses of such Holders appear in the Debt Security Register;
(2) to those Holders of Debt Securities who have, within the two
years preceding such transmission, filed their names and addresses with
the Trustee for that purpose; and
(3) except in the case of reports pursuant to subsection (b) of this
Section 5.04, to each Holder whose name and address is preserved at the
time by the Trustee, as provided in Section 5.02(a).
(d) A copy of each such report shall, at the time of such transmission to
Holders, to be filed by the Trustee with each stock exchange upon which the Debt
Securities are listed and also with the Securities and Exchange Commission. The
Company agrees to notify the Trustee with respect to any series when and as the
Debt Securities of such series become listed on any stock exchange.
ARTICLE SIX.
REMEDIES OF THE TRUSTEE AND HOLDERS ON EVENT OF DEFAULT
SECTION 6.01. " Event of Default" whenever used herein with respect to Debt
Securities of any series means any of the following events (and such other
events as may be established with respect to Debt Securities of that series as
contemplated by Section 2.02), whatever the reason, which shall have occurred
and be continuing:
(a) default in the payment of any installment of interest upon any of
the Debt Securities of that series as and when the same shall become due
and payable, and continuance of such default for a period of 30 days; or
(b) default in the payment of the principal of (and premium, if any,
on) any Debt Security of that series as and when the same shall become due
and payable either at maturity, upon redemption, by declaration or
otherwise; or
(c) default in the payment or satisfaction of any sinking fund
installment, as and when the same shall become due and payable by the terms
of a Debt Security of that series; or
(d) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the Debt
Securities or in this Indenture (other than those set forth exclusively in
the terms of any particular series of Debt Securities established as
contemplated in this Indenture) contained for a period of 60 days after the
date on which written notice of such failure, requiring the Company to
remedy the same, shall have been given to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least twenty-five percent
in aggregate principal amount of the Debt Securities at the time
Outstanding; or
(e) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Company in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Company or for any
substantial part of its property or ordering the winding up or liquidation
of its affairs, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or
(f) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under
any such law, or consent to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Company or for any substantial part of its
property, or make any general assignment for the benefit of creditors.
If an Event of Default described in clause (a), (b) or (c) or established
pursuant to Section 2.02 with respect to Debt Securities of any series at the
time Outstanding occurs and is continuing, then and in each and every such case,
unless the principal of all the Debt Securities of such series shall have
already become due and payable, either the Trustee or the Holders of not less
than twenty-five percent, in aggregate principal amount of the Debt Securities
of all series affected then Outstanding, by notice in writing to the Company
(and to the Trustee if given by Holders), may declare the entire principal (or,
if the Debt Securities of such series are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms of such
series) of all the Debt Securities affected thereby and the interest accrued
thereon, if any, to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable. If
an Event of Default described in clause (d), (e) or (f) occurs and is
continuing, then and in each and every such case, unless the principal of all
the Debt Securities shall have already become due and payable, either the
Trustee or the Holders of not less than twenty-five percent in aggregate
principal amount of all the Debt Securities then Outstanding hereunder (treated
as one class), by notice in writing to the Company (and to the Trustee if given
by Holders), may declare the entire principal (or, if any Debt Securities are
Original Issue Discount Securities, such portion of the principal as may be
specified in the terms thereof) of all the Debt Securities then Outstanding and
interest accrued thereon, if any, to be due and payable immediately, and upon
any such declaration the same shall become immediately due and payable.
These provisions, however, are subject to the condition that if, at any time
after the principal amount (or, if the Debt Securities of such series are
Original Issue Discount Securities, such portion of the principal amount as may
be specified in the terms of such series) of the Debt Securities of any series
(or of all the Debt Securities, as the case may be) shall have been so declared
due and payable, and before any judgment or decree for the payment of the moneys
due shall have been obtained or entered as hereinafter provided, the Company
shall pay, or shall deposit with the Trustee a sum sufficient to pay, all
matured installments of interest upon all the Debt Securities of such series (or
of all the Debt Securities, as the case may be) and the principal of (and
premium, if any) on any and all Debt Securities of such series (or of all the
Debt Securities, as the case may be) which shall have become due otherwise than
by acceleration, (with interest upon such principal to the extent that payment
of such interest is enforceable under applicable law) upon any overdue
installments of interest at the same rate as the rate of interest specified in
the Debt Securities of such series, or, at the rates of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) specified in the
Debt Securities of such series (or at the rates of interest or Yields to
Maturity of all the Debt Securities, as the case may be), to the date of such
payment or deposit and such amount as shall be sufficient to cover reasonable
compensation to the Trustee, its agents and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee except as a result
of its negligence or bad faith, and if any and all defaults under this
Indenture, other than the nonpayment of the principal of Debt Securities of such
series (or of all the Debt Securities, as the case may be) which shall have
become due by declaration, shall have been remedied--then and in every such case
the Holders of a majority in aggregate principal amount of the Debt Securities
of such series (or, of all the Debt Securities, as the case may be) then
Outstanding, by written notice to the Company and to the Trustee, may waive all
defaults and rescind and annul such declaration and its consequences; but no
such waiver or rescission or annulment shall extend to or shall affect any
subsequent default or shall impair any right consequent thereon.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such waiver or rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company and the Trustee shall be restored respectively to their former positions
and rights hereunder, and all rights, remedies and powers of the Company, the
Trustee and the Holders shall continue as though no such proceedings had been
taken.
SECTION 6.02. The Company covenants that (1) in case default shall be made
in the payment of any installment of interest on any of the Debt Securities of
any series, as and when the same shall become due and payable, and such default
shall have continued for a period of 30 days, or (2) in case default shall be
made in the payment of the principal of (or premium, if any) on any of the Debt
Securities of any series when the same shall have become due and payable,
whether upon maturity or upon redemption or upon declaration or otherwise, or
(3) in case of default in the payment or satisfaction of any sinking fund
obligation, as and when the same shall become due and payable as in this
Indenture expressed then, upon demand of the Trustee, the Company shall pay to
the Trustee, for the benefit of the Holders of the Debt Securities of that
series, and the Holders of any coupons appurtenant thereto the whole amount that
then shall have become due and payable on all such Debt Securities and coupons
for principal (and premium, if any) and interest, with interest upon any overdue
principal (and premium, if any) and (to the extent that payment of such interest
is enforceable under applicable law) upon any overdue installments of interest
at the same rate as the rate of interest or Yield to Maturity (in the case of
Original Issue Discount Securities) specified in the Debt Securities of that
series and, in addition thereto, such further amount as shall be sufficient to
cover reasonable compensation to the Trustee, its agents and counsel, and all
other expenses and liabilities incurred, and all advances made, by the Trustee
except as a result of its negligence or bad faith.
In case the Company shall fail forthwith to pay such amount upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree and may enforce any such
judgment or final decree against the Company and collect in the manner provided
by law out of the property of the Company wherever situated the moneys adjudged
or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company under the Bankruptcy Reform Act of 1978 or any
other applicable bankruptcy, insolvency or similar law, or in case a receiver or
trustee shall have been appointed for the property of the Company, or in case of
any other judicial proceedings relative to the Company, or to the creditors or
property of the Company, the Trustee, irrespective of whether the principal of
any Debt Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective or whether the Trustee shall have made
any demand pursuant to the provisions of this Section 6.02, shall be entitled
and empowered, by intervention in such proceedings or otherwise, to file and
prove a claim or claims for the whole amount of principal and interest (or, if
the Debt Securities of any series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of that series)
owing and unpaid in respect of the Debt Securities of any series and to file
such other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for reasonable compensation to
the Trustee, its agents and counsel, and for reimbursement of all expenses
except as a result of its negligence or bad faith) and of the Holders allowed in
any judicial proceedings relative to the Company or to the creditors or property
of the Company, and to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Holders and of the Trustee on their behalf; and any
receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of the Holders to make payments to the Trustee and, in the
event that the Trustee shall consent to the making of payments directly to the
Holders, to pay to the Trustee such amount as shall be sufficient to cover
reasonable compensation to the Trustee, its agents and counsel, and all other
expenses and liabilities incurred, and all advances made, by the Trustee except
as a result of its negligence or bad faith.
All rights of action and to assert claims under this Indenture, or under any
of the Debt Securities, may be enforced by the Trustee without the possession of
any of the Debt Securities of such series or coupons appurtenant to such Debt
Securities, or the production thereof on any trial or other proceedings relative
thereto, and any such action or proceedings instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall be for the ratable benefit of the Holders of the Debt Securities
or coupons appurtenant to such Debt Securities in respect of which such action
was taken.
In case of a default hereunder the Trustee may in its discretion proceed to
protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or otherwise, and the Trustee may enforce any other
legal or equitable right vested in the Trustee by this Indenture or by law.
SECTION 6.03. Any moneys collected by the Trustee pursuant to Section 6.02
shall be applied in the order following, at the date or dates fixed by the
Trustee and, in case of the distribution of such moneys on account of principal
(and premium, if any) or interest, upon presentation of the several Debt
Securities in respect of which moneys have been collected and coupons
appurtenant to such Debt Securities and stamping (or otherwise noting) thereon
the payment if only partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses applicable to such series
of collection, reasonable compensation to the Trustee, its agents and
counsel, and all other expenses and liabilities incurred, and all advances
made, by the Trustee except as a result of its negligence or bed faith;
SECOND: In case the principal of the Debt Securities Outstanding in
respect of which moneys have been collected shale not have become due, to
the payment of interest on such Debt Securities, in the order of the
maturity of the installments of such interest, with interest (to the extent
that such interest has been collected by the Trustee) upon the overdue
installments of interest at the same rate as the rate of interest or Yield
to Maturity (in the case of Original Issue Discount Securities) specified
in such Debt Securities, such payments to be made ratably to the persons
entitled thereto;
THIRD: In case the principal of the Debt Securities Outstanding in
respect of which moneys have been collected shall have become due by
declaration or otherwise, to the payment of the whole amount then owing and
unpaid upon the Debt Securities of that series for principal (and premium,
if any) and interest, with interest upon the overdue principal (and
premium, if any) and (to the extent that such interest has been collected
by the Trustee) upon overdue installments of interest, at the same rate as
the rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in the Debt Securities of that series; and
in case such moneys shall be insufficient to pay in full the whole amount
so due and unpaid upon the Debt Securities of that series, then to the
payment of such principal (and premium, if any) and interest, without
preference or priority of principal (and premium, if any) over interest, or
of interest over principal (and premium, if any), or of any installment of
interest over any other installment of interest, or of any Debt Security of
that series over any other Debt Security of that series ratably to the
aggregate of such principal (and premium, if any) and interest; and
FOURTH: The remainder, if any, shall be paid to the Company, its
successors or assigns, or to whomsoever may be lawfully entitled to receive
the same, or as a court of competent jurisdiction may direct.
SECTION 6.04. No Holder of any Debt Securities of any series or of any
coupon appurtenant thereto shall have any right by virtue or by availing of any
provision of this Indenture to institute any action or proceeding at law or in
equity or in bankruptcy or otherwise upon or under or with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless such Holder previously shall have given to the Trustee
written notice of an Event of Default and unless also the Holders of not less
than twenty-five percent in aggregate principal amount of the Debt Securities of
that series then Outstanding shall have made written request upon the Trustee to
institute such action or proceedings in its own name as trustee hereunder and
shall have offered to the Trustee such reasonable security and indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity, shall have failed to institute any such action
or proceedings and no direction inconsistent with such written request shall
have been given to the Trustee pursuant to Section 6.06; it being understood and
intended and being expressly covenanted by the taker and Holder of every Debt
Security or coupon with every other taker and Holder and the Trustee that no one
or more Holders of Debt Securities or coupons appurtenant thereto shall have any
right in any manner whatever by virtue or by availing of any provision of this
Indenture to affect, disturb or prejudice the rights of any other Holder of such
Debt Security of that or any other series or coupons appertaining thereto, or to
obtain or seek to obtain priority over or preference to any other such Holder,
or to enforce any right under this Indenture except in the manner herein
provided and for the equal, ratable and common benefit of all Holders of Debt
Securities and coupons of the applicable series. For the protection and
enforcement of the provisions of this Section 6.04 each and every Holder of Debt
Securities and coupons and the Trustee shall be entitled to such relief as can
be given either at law or in equity.
Notwithstanding any other provision in this Indenture, however, the right of
any Holder of any Debt Security or coupon to receive payment of the principal of
(and premium, if any) and interest on SUP' Debt Security or coupon, on or after
the respective due dates expressed in such Debt Security (or, in the case of
redemption, on or after the date fixed for redemption), or to institute suit for
the enforcement of any such payment on or after such respective dates, shall not
be impaired or affected without the consent of such Holder.
SECTION 6.05. All powers and remedies given by this Article Six to the
Trustee or to the Holders of Debt Securities or coupons shall, to the extent
permitted by law, be deemed cumulative and not exclusive of any thereof or of
any other powers and remedies available to the Trustee or the Holders of the
Debt Securities or coupons, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture, and no delay or omission of the Trustee or of any Holder to exercise
any right or power accruing upon any default occurring and continuing as
aforesaid shall impair any such tight or power or shall be construed to be a
waiver of any such default or an acquiescence therein; and, subject to the
provisions of Section 6.04, every power and remedy given by this Article Six or
by law to the Trustee or to the Holders of Debt Securities or coupons may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Holders of Debt Securities or coupons, as the case may be.
SECTION 6.06. The Holders of a majority in aggregate principal amount of the
Debt Securities of any or all series affected (voting as one class) at the time
Outstanding shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee; provided, however, that such
direction shall not be otherwise than in accordance with law and the provisions
of this Indenture and the Trustee, subject to the provisions of Section 7.01,
shall have the right to decline to follow any such direction if the Trustee in
good faith shall by a responsible officer determine that the proceeding or other
action so directed would involve it in a personal liability, and provided
further, that the Trustee may decline any such direction which it deems unduly
prejudicial to any Holders not joining in such direction, and provided further,
that nothing in this Indenture contained shall impair the right of the Trustee
in its discretion to take any action deemed proper by the Trustee and which is
not inconsistent with such direction by the Holders. Subject to the provisions
of Section 6.01, the Holders of a majority in aggregate principal amount of the
Debt Securities of any series at the time Outstanding may on behalf of the
Holders of all of the Debt Securities of that series waive any past default
hereunder and its consequences, except a default in the payment of the principal
of (or premium, if any) or interest on any of the Debt Securities of that
series. In the case of any such waiver, the Company, the Trustee and the Holders
of the Debt Securities of that series shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend to
any subsequent or other default or impair any right consequent thereon.
SECTION 6.07. The Trustee shall, within 90 days after the occurrence of a
default with respect to the Debt Securities of any series, give to all Holders
of Debt Securities of that series, in the manner and to the extent provided in
Section 5.04(c), notice of all defaults with respect to that series known to the
Trustee, unless such defaults shall have been cured before the giving of such
notice (the term "default" or "defaults" for the purposes of this Section 6.07
being hereby defined to be any event or events, as the case may be, specified in
clauses (a), (b), (c), (d), (e) and (f) of Section 6.01, not including periods
of grace, if any, provided for therein and irrespective of the giving of written
notice specified in clause (d) thereof); provided, that, except in the case of
default in the payment of the principal of (or premium, if any) or interest on
any of the Debt Securities of such series or in the payment or satisfaction of
any sinking fund obligation with respect to such series, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or responsible
officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of the Debt Securities of such series.
SECTION 6.08. All parties to this Indenture agree, and each Holder of any
Debt Security or coupon by acceptance thereof shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Trustee for
any action taken or omitted by it as Trustee, the filing by any party litigant
(other than the Trustee) in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant (including the
Trustee) in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section 6.08 shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Holder or group of Holders of Debt Securities of any series
holding in the aggregate more than ten percent, of the principal amount of the
Debt Securities Outstanding, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
on any Debt Security or coupon on or after the due date thereof (or, in the case
of redemption, on or after the date fixed for redemption).
ARTICLE SEVEN.
CONCERNING THE TRUSTEE.
SECTION 7.01. With respect to the Holders of any series of Debt Securities
issued hereunder, the Trustee, prior to the occurrence of an Event of Default
with respect to the Debt Securities of a particular series and after the curing
or waiving of all Events of Default which may have occurred with respect to that
series, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants or obligations
shall be read into this Indenture against the Trustee. In case an Event of
Default with respect to Debt Securities of a series has occurred (which has not
been cured or waived) the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.
No provisions of this indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act,
or its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default with respect to the Debt
Securities of any series and after the curing of all Events of Default with
respect to such series which may have occurred:
(1) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture, and the Trustee shall
not be liable except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions which
by any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture;
(b) the Trustee shall not be liable for any error of judgment made in good
faith by a responsible officer, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Holders as provided in Section 6.06 relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Indenture.
No provision of this Indenture shall require the Trustee to expand or risk
its own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its rights or powers,
if there shall be reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
to it.
SECTION 7.02. Subject to the provisions of Section 7.01:
(a) the Trustee may rely and shall be protected in acting or refraining from
acting in reliance upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned herein
shall be sufficiently evidenced by an instrument signed in the name of the
Company by the Chairman of the Board, a Vice Chairman or a Vice President and
the Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer (unless other evidence in respect thereof be herein specifically
prescribed); and any resolution of the Board of Directors may be evidenced to
the Trustee by a copy thereof certified by the Secretary or an Assistant
Secretary of the Company;
(c) the Trustee may consult with counsel and any Opinion of Counsel shall be
full and complete authorization and protection in respect of any action taken,
omitted or suffered by it hereunder in good faith and in accordance with such
Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the Holders, pursuant to the provisions of this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred therein or
thereby;
(e) the Trustee shall not be liable for any action taken by it in good faith
and believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture;
(f) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally, or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys and
the Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder.
SECTION 7.03. The recitals contained herein and in the Debt Securities
(except in the certificates of authentication of the Trustee and the
Authenticating Agent) shall be taken as the statements of the Company, and the
Trustee and the Authenticating Agent assume no responsibility for the
correctness of the same. The Trustee and the Authenticating Agent make no
representations as to the validity or sufficiency of this Indenture or of any
Debt Securities or coupons; provided that neither the Trustee nor the
Authenticating Agent shall be relieved of its duty to authenticate Debt
Securities only as authorized by this Indenture. The Trustee and the
Authenticating Agent shall not be accountable for the use or application by the
Company of any of the Debt Securities or of the proceeds thereof.
SECTION 7.04. The Trustee or any Authenticating Agent or any paying agent or
Debt Security registrar, in its individual or any other capacity, may become the
owner or pledges of Debt Securities or coupons with the same rights it would
have if it were not a Trustee, Authenticating Agent, paying agent or Debt
Security registrar.
SECTION 7.05 Subject to the provisions of Section 12.04, all moneys received
by the Trustee shall, until used or applied as herein provided, be held in trust
for the purposes for which they were received, but need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any moneys received by it hereunder except such as it
may agree with the Company to pay thereon. So long as no Event of Default shall
have occurred and be continuing, all interest allowed on any such moneys shall
be paid from time to time upon the written order of the Company, signed by its
Chairman of the Board, a Vice Chairman, or a Vice President or its Treasurer or
an Assistant Treasurer.
SECTION 7.06. The Company covenants and agrees to pay to the Trustee from
time to time, and the Trustee shall be entitled to, reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) and, except as otherwise
expressly provided, the Company will pay or reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or made
by the Trustee in accordance with any of the provisions of this Indenture
(including, without limitation, the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its employ and
amounts paid by the Trustee to the Authenticating Agent pursuant to Section
7.14) except any such expense, disbursement or advance as may be attributable to
its negligence or bad faith. If any property other than cash shall at any time
be subject to the lien of this Indenture, the Trustee, if and to the extent
authorized by a receivership or bankruptcy court of competent jurisdiction or by
the supplemental instrument subjecting such property to such lien, shall be
entitled to make advances for the purpose of preserving such property or of
discharging tax liens or other prior liens or encumbrances thereon. The Company
also covenants to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on the
part of the Trustee, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim of liability in the premises. The obligations of the
Company under this Section 7.06 to compensate the Trustee and to pay or
reimburse the Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder. Such additional indebtedness shall be secured
by a lien prior to that of the Debt Securities upon all property and funds held
or collected by the Trustee as such, except funds held in trust for the benefit
of the holders of particular Debt Securities or coupons.
SECTION 7.07. Except as otherwise provided in Section 7.01, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
suffering any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence or
bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, a Vice
Chairman or a Vice President and by the Secretary or Treasurer or an Assistant
Secretary or an Assistant Treasurer of the Company and delivered to the Trustee
and such certificate, in the absence of negligence or bad faith on the part of
the Trustee, shall be full warrant to the Trustee for any action taken, suffered
or omitted by it under the provisions of this Indenture upon the faith thereof.
SECTION 7.08. (a) If the Trustee has or shall acquire any conflicting
interest, as defined in this Section 7.08, it shall, within 90 days after
ascertaining that it has such convicting interest, either eliminate such
convicting interest or resign in the manner and with the effect specified in
Section 7.10.
(b) In the event that the Trustee shall fail to comply with the provisions
of subsection (a) of this Section 7.08, the Trustee shall, within ten days after
the expiration of such 90-day period, transmit by mail notice of such failure to
all Holders of Debt Securities, in the manner and to the extent provided in
Section 5.04(c).
(c) For the purposes of this Section 7.08 the Trustee shall be deemed to
have a conflicting interest with respect to the Debt Securities of any series if
(1) the Trustee is trustee under this Indenture with respect to the
outstanding Debt Securities of any other series or is a trustee under
another indenture under which any other securities, or certificates of
interest or participation in any other securities, of the Company are
outstanding unless such other indenture is a collateral trust indenture
under which the only collateral consists of Debt Securities issued under
this Indenture, provided that there shall be excluded from the operation
of this paragraph this Indenture with respect to the Debt Securities of
any other series, any indenture or indentures under which other
securities, or certificates of interest or participation in other
securities, of the Company are outstanding if (i) this Indenture and such
other indenture or indentures are wholly unsecured and such other
indenture or indentures are hereafter qualified under the Trust Indenture
Act of 1939, unless the Securities and Exchange Commission shall have
found and declared by order pursuant to subsection (b) of Section 305 or
subsection (c) of Section 307 of the Trust Indenture Act of 1939 that
differences exist between the provisions of this Indenture and the
provisions of such other indenture or indentures which are so likely to
involve a material conflict of interest as to make it necessary in the
public interest or for the protection of investors to disqualify the
Trustee from acting as such under this Indenture or such other indenture
or indentures, or (ii) the Company shall have sustained the burden of
proving, on application to the Securities and Exchange Commission and
after opportunity for hearing thereon, that trusteeship under this
Indenture with respect to Debt Securities of such series and such other
series, or under this Indenture and such other indenture or indentures is
not so likely to involve a material conflict as to make it necessary in
the public interest or for the protection of investors to disqualify the
Trustee from acting as such under this Indenture with respect to Debt
Securities of such series and such other series, or under this Indenture
and one of such indentures;
(2) the Trustee or any of its directors or executive officers is an
obliger upon the Debt Securities issued under this Indenture or an
underwriter for the Company;
(3) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common control
with the Company or an underwriter for the Company;
(4) the Trustee or any of its directors or executive officers is a
director, officer, partner, employee, appointee, or representative of the
Company, or of an underwriter (other than the Trustee itself) for the
Company who is currently engaged in the business of underwriting, except
that (A) one individual may be a director and/or an executive officer of
the Trustee and a director and/or an executive officer of the Company, but
may not be at the same time an executive officer of both the Trustee and
the Company; (B) if and so long as the number of directors of the Trustee
in office is more than nine, one additional individual may be a director
and/or an executive officer of the Trustee and a director of the Company;
and (C) the Trustee may be designated by the Company or by any underwriter
for the Company to act in the capacity of transfer agent, registrar,
custodian, paying agent, fiscal agent, escrow agent, or depositary, or in
any other similar capacity, or, subject to the provisions of paragraph (1)
of this subsection (c), to act as trustee whether under an indenture or
otherwise;
(5) ten percent or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director, partner, or
executive officer thereof, or twenty percent or more of such voting
securities is beneficially owned, collectively, by any two or more of such
persons; or ten percent or more of the voting securities of the Trustee is
beneficially owned either by an underwriter for the Company or by any
director, partner, or executive officer thereof, or is beneficially owned,
collectively, by any two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default, (A) five percent or more
of the voting securities, or ten percent or more of any other class of
security, of the Company, not including the Debt Securities issued under
this Indenture and securities issued under any other indenture under which
the Trustee is also trustee, or (B) ten percent or more of any class of
security of an underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default, five percent or more of
the voting securities of any person who, to the knowledge of the Trustee,
owns ten percent or more of the voting securities of, or controls directly
or indirectly or is under direct or indirect common control with, the
Company;
(8) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default, ten percent or more of any
class of security of any person who, to the knowledge of the Trustee, owns
fifty percent or more of the voting securities of the Company; or
(9) the Trustee owns on May 15 in any calendar year, in the capacity
of executor, administrator, testamentary or inter vivos trustee, guardian,
committee or conservator, or in any other similar capacity, an aggregate
of twenty-five percent or more of the voting securities, or of any class
of security, of any person, the beneficial ownership of a specified
percentage of which would have constituted a conflicting interest under
paragraph (6), (7), or (8) of this subsection (c). As to any such
securities of which the Trustee acquired ownership through becoming
executor, administrator, or testamentary trustee of an estate which
included them, the provisions of the preceding sentence shall not apply,
for a period of two years from the date of such acquisition, to the extent
that such securities included in such estate do not exceed twenty-five
percent of such voting securities or twenty-five percent of any such class
of security. Promptly after May 15 in each calendar year, the Trustee
shall make a check of its holdings of such securities in any of the above
mentioned capacities as of such May 15. If the Company fails to make
payment in full of principal of or interest on any of the Debt Securities
when and as the same becomes due and payable, and such failure continues
for 30 days thereafter, the Trustee shall make a prompt check of its
holdings of such securities in any of the above date of the expiration of
such 30-day period, and after such date, notwithstanding the foregoing
provisions of this paragraph (9), all such securities so held by the
Trustee, with sole or joint control over such securities vested in it,
shall, but only so long as such failure shall continue, be considered as
though beneficially owned by the Trustee for the purposes of paragraphs
(6), (7), and (8) of this subsection (c).
The specification of percentages in paragraphs (5) to (9), inclusive, of
this subsection (c) shall not be construed as indicating that the ownership of
such percentages of the securities of a person is or is not necessary or
sufficient to constitute direct or indirect control for the purposes of
paragraph (3) or (7) of this subsection (c).
For the purposes of paragraphs (6), (7), (8), and (9) of this subsection (c)
only, (A) the terms "security" and "securities" shall include only such
securities as are generally known as corporate securities, but shall not include
any note or other evidence of indebtedness issued to evidence an obligation to
repay moneys lent to a person by one or more banks, trust companies or banking
firms, or any certificate of interest or participation in any such note or
evidence of indebtedness; (B) an obligation shall be deemed to be in default
when a default in payment of principal shall have continued for 30 days or more
and shall not have been cured; and (C) the Trustee shall not be deemed to be the
owner or holder of (i) any security which it holds as collateral security (as
trustee or otherwise) for an obligation which is not in default as defined in
clause (B) above, or (ii) any security which it holds as collateral security
under this Indenture, irrespective of any default hereunder, or (iii) any
security which it holds as agent for collection, or as custodian, escrow agent,
or depositary, or in any similar representative capacity.
Except as provided above, the word "security" or "securities" as used in
this Indenture shall mean any note, stock, treasury stock, bond, debenture,
evidence of indebtedness, certificate of interest or participation in any profit
sharing agreement, collateral-trust certificate, pre-organization certificate or
subscription, transferable share, investment contract, voting-trust certificate,
certificate of deposit for a security, fractional undivided interest in oil,
gas, or other mineral rights, or, in general, any interest or instrument
commonly known as a "security", or any certificate of interest or participation
in, temporary or interim certificate for, receipt for, guarantee of, or warrant
or right to subscribe to or purchase, any of the foregoing.
(d) For the purposes of this Section 7.08:
(1) The term "underwriter" when used with reference to the Company
shall mean every person who, within three years prior to the time as of
which the determination is made, has purchased from the Company with a
view to, or has offered or has sold for the Company in connection with,
the distribution of any security of the Company outstanding at such time,
or has participated or has had a direct or indirect participation in any
such undertaking, or has participated or has had a participation in the
direct or indirect underwriting of any such undertaking; but such term
shall not include a person whose interest was limited to a commission from
an underwriter or dealer not in excess of the usual and customary
distributors' or sellers' commission.
(2) The term "director" shall mean any director of a corporation or
any individual performing similar functions with respect to any
organization whether incorporated or unincorporated.
(3) The term "person" shall mean an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an
unincorporated organization, or a government or political subdivision
thereof. As used in this paragraph, the term "trust" shall include only a
trust where the interest or interests of the beneficiary or beneficiaries
are evidenced by a security.
(4) The term "voting security" shall mean any security presently
entitling the owner or holder thereof to vote in the direction or
management of the affairs of a person, or any security issued under or
pursuant to any trust, agreement or arrangement whereby a trustee or
trustees or agent or agents for the owner or holder of such security are
presently entitled to vote in the direction or management of the affairs
of a person.
(5) The term "Company" shall mean any obliger the Debt Securities.
(6) The term "executive officer" shall mean the president, every
vice president, every trust officer, the cashier, the secretary, and the
treasurer of a corporation, and any individual customarily performing
similar functions with respect to any organization whether incorporated or
unincorporated, but shall not include the chairman of the board of
directors.
(e) The percentages of voting securities and other securities specified in
this Section 7.08 shall be calculated in accordance with the following
provisions:
(1) A specified percentage of the voting securities of the Trustee,
the Company or any other person referred to in this Section 7.08 (each of
whom is referred to as a "person" in this subsection) means such amount of
the outstanding voting securities of such person as entitles the holder or
holders thereof to cast such specified percentage of the aggregate votes
which the holders of all the outstanding voting securities of such person
are entitled to cast in the direction or management of the affairs of such
person.
(2) A specified percentage of a class of security of a person means
such percentage of the aggregate amount of securities of the class
outstanding.
(3) The term "amount", when used in regard to securities, means the
principal amount if relating to evidences of indebtedness, the number of
shares if relating to capital shares, and the number of units if relating
to any other kind of security.
(4) The term "outstanding" means issued and not held by or for the
account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund relating
to another class of securities of the issuer, if the obligation
evidenced by such other class of securities is not in default as to
principal or interest or otherwise;
(iii) securities pledged by the issuer thereof as security for
an obligation of the issuer not in default as to principal or
interest or otherwise; and
(iv) securities held in escrow if placed in escrow by the
issuer thereof; provided, however, that any voting securities of an
issuer shall be deemed outstanding if any person other than the
issuer is entitled to exercise the voting rights thereof.
(5) A security shall be deemed to be of the same class as another
security if both securities confer upon the holder or holders thereof
substantially the same rights and privileges; provided, however, that, in
the case of secured evidences of indebtedness, all of which are issued
under a single indenture, differences in the interest rates or maturity
dates of various series thereof shall not be deemed sufficient to
constitute such series different classes; and provided further, that, in
the case of unsecured evidences of indebtedness, differences in the
interest rates or maturity dates thereof shall not be deemed sufficient to
constitute them securities of different classes, whether or not they are
issued under a single indenture.
SECTION 7.09. The Trustee hereunder shall at all times be a corporation
organized and doing business under the laws of the United States of America or
of any State or Territory or of the District of Columbia authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least ten million dollars and being subject to supervision or examination
by Federal, State, Territorial, or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 7.09 the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 7.09, the Trustee shall resign immediately in the manner and with the
effect specified in Section 7.10.
SECTION 7.10. (a) The Trustee, or any trustee or trustees hereafter
appointed, may at any time resign by giving written notice of resignation with
respect to one or more of all series of Debt Securities to the Company and to
Holders of Debt Securities of the applicable series in the manner and to the
extent provided in Section 14.05. Upon receiving such notice of resignation the
Company shall promptly appoint a successor trustee or trustees with respect to
the applicable series by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee. If no successor trustee
shall have been so appointed with respect to any series and have accepted
appointment within 60 days after the publication or mailing, as the case may be,
of such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee or any Holder
who has been a bona fide Holder of a Debt Security or Debt Securities of the
applicable series for at least six months may, subject to the provisions of
Section 6.08, on behalf of himself and all others similarly situated, petition
any such court for the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(b) In case at any time any of the following shall occur
(1) the Trustee shall fail to comply with the provisions of
subsection (a) of Section 7.08 with respect to any series of Debt
Securities after written request therefor by the Company or by any Holder
who has been a bona fide Holder of a Debt Security or Debt Securities of
that series for at least six months, or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.09 and shall fail to resign after written request
therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case, the
Company may remove the Trustee with respect to the applicable series of
Debt Securities and appoint a successor trustee for that series by written
instrument, in duplicate, executed by order of the Board of Directors, one
copy of which instrument shall be delivered to the Trustee so removed and
one copy to the successor trustee, or, subject to the provisions of
Section 6.08, any Holder who has been a bona fide Holder of a Debt
Security or Debt Securities of that series for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment
of a successor trustee with respect to that series. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the Debt
Securities of one or more series (each series voting as a class) or all series
at the time Outstanding may at any time remove the Trustee with respect to the
applicable series of Debt Securities or all series, as the case may be, and
nominate with respect to the applicable series of Debt Securities or all series,
as the case may be, a successor trustee by written notice of such action to the
Company and the successor trustee which shall be deemed appointed as successor
trustee with respect to the applicable series of Debt Securities or all series,
as the case may be, unless within ten days after such nomination the Company
objects thereto, in which case the Trustee so removed or any Holder of a Debt
Security of the applicable series (in the case of any such objection to a
nomination of a successor trustee with respect to such series) or any Holder (in
the case of any such objection to a nomination of a successor trustee with
respect to all series), upon the terms and conditions and otherwise as in
subsection (a) of this Section 7.10 provided, may petition any court of
competent jurisdiction for the appointment of a successor trustee with respect
to such series of Debt Securities or all series, as the case may be.
(d) Any resignation or removal of the Trustee and any appointment of a
successor trustee pursuant to any of the provisions of this Section 7.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 7.11.
SECTION 7.11. Any successor trustee appointed as provided in Section 7.10
shall execute, acknowledge and deliver to the Company and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee with respect to all or any
applicable series shall become effective and such successor trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations with respect to such series of its predecessor
hereunder, with like effect as if originally named as trustee for such series;
but nevertheless, on the written request of the Company or of the successor
trustee, the trustee ceasing to act shall, upon payment of any amounts then due
pursuant to the provisions of Section 7.06, execute and deliver an instrument
transferring to such successor trustee all of the rights and powers with respect
to such series of the trustee so ceasing to act. Upon request of any such
successor trustee, the Company shall execute any and all instruments in writing
for more fully and certainly vesting in and confirming to such successor trustee
all such rights and powers. Any trustee ceasing to act shall, nevertheless,
retain a lien upon all property or funds held or collected by such trustee to
secure any amounts then due it pursuant to In case of the appointment hereunder
of a successor trustee with respect to the Debt Securities of one or more (but
not all) series, the Company, the predecessor Trustee and each successor trustee
with respect to the Debt Securities of any applicable series shall execute and
deliver an indenture supplemental hereto which shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the predecessor Trustee with respect to the Debt Securities
of any series as to which the predecessor Trustee is not retiring shall continue
to be vested in the predecessor Trustee and shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such trustees co-trustees of the same trust and that each such
trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such trustee.
No successor trustee shall accept appointment as provided in this Section
7.11 unless at the time of such acceptance such successor trustee shall be
qualified under the provisions of Section 7.08 and eligible under the provisions
of Section 7.09.
Upon acceptance of appointment by a successor trustee as provided in this
Section 7.11, the Company shall give notice of the succession of such Trustee
hereunder to the Holders of Debt Securities of any applicable series in the
manner and to the extent provided in Section 14.05. If the Company fails to
publish or mail such notice, as the case may be, in the prescribed manner within
ten days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be so published or mailed, as the case may
be, at the expense of the Company.
SECTION 7.12. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be qualified under the provisions of Section 7.08 and eligible
under the provisions of Section 7.09, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
SECTION 7.13. (a) Subject to the provisions of subsection (b) of this
Section 7.13, if the Trustee shall be or shall become a creditor, directly or
indirectly, secured or unsecured, of the Company within four months prior to a
default, as defined in subsection (c) of this Section 7.13, or subsequent to
such a default, then, unless and until such default shall be cured, the Trustee
shall set apart and hold in a special account for the benefit of the Trustee
individually, the Holders of the Debt Securities and coupons, if any, and the
holders of other indenture securities (as defined in subsection (c) of this
Section 7.13):
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such four months' period and valid as
against the Company and its other creditors, except any such reduction
resulting from the receipt or disposition of any property described in
paragraph (2) of this subsection (a), or from the exercise of any right of
set-off which the Trustee could have exercised if a petition in bankruptcy
had been filed by or against the Company upon the date of such default;
and
(2) all property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such four
months' period, or an amount equal to the proceeds of any such property,
if disposed of, subject, however, to the rights, if any, of the Company
and its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on account of any such
claim by any person (other than the Company) who is liable thereon, and (ii) the
proceeds of the bona fide sale of any such claim by the Trustee to a third
person, and (iii) distributions made in cash, securities, or other property in
respect of claims filed against the Company in bankruptcy or receivership or in
proceedings for reorganization pursuant to the Bankruptcy Reform Act of 1978 or
applicable State law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the beginning
of such four months' period;
(C) to realize, for its own account, but only to the extent of the claim
hereinafter mentioned, upon any property held by it as security for any such
claim, if such claim was created after the beginning of such four months' period
and such property was received as security therefor simultaneously with the
creation thereof, and if the Trustee shall sustain the burden of proving that at
the time such property was so received the Trustee had no reasonable cause to
believe that a default as defined in subsection (c) of this Section 7.13 would
occur within four months; or
(D) to receive payment on any claim referred to in paragraph (B) or (C),
against the release of any property held as security for such claim as provided
in paragraph (B) or (C), as the case may be, to the extent of the fair value of
such property.
For the purposes of paragraphs (B), (C) and (D), property substituted after
the beginning of such four months' period for property held as security at the
time of such substitution shall, to the extent of the fair value of the property
released, have
the same status as the property released, and, to the extent that any claim
referred to in any of such paragraphs is created in renewal of or in
substitution for or for the purpose of repaying or refunding any preexisting
claim of the Trustee as such creditor, such claim shall have the same status as
such preexisting claim.
If the Trustee shall be required to account, the funds and property held in
such special account and the proceeds thereof shall be apportioned among the
Trustee, the Holders and the holders of other indenture securities, in such
manner that the Trustee, the Holders and the holders of other indenture
securities realize, as a result of payments from such special account and
payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Bankruptcy
Reform Act of 1978 or any successor statute or applicable State law, the same
percentage of their respective claims, figured before crediting to the claim of
the Trustee anything on account of the receipt by it from the Company of the
funds and property in such special account and before crediting to the
respective claims of the Trustee, the Holders and the holders of other indenture
securities dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Bankruptcy
Reform Act of 1978 or applicable State law, but after crediting thereon receipts
on account of the indebtedness represented by their respective claims from all
sources other than from such dividends and from the funds and property so held
in such special account. As used in this paragraph, with respect to any claim,
the term "dividends" shall include any distribution with respect to such claim,
in bankruptcy or receivership or in proceedings for reorganization pursuant to
the Bankruptcy Reform Act of 1978 or any successor statute or applicable State
law, whether such distribution is made in cash, securities, or other property,
but shall not include any such distribution with respect to the secured portion,
if any, of such claim. The court in which such bankruptcy, receivership, or
proceeding for reorganization is pending shall have jurisdiction (i) to
apportion between the Trustee, the Holders and the holders of other indenture
securities, in accordance with the provisions of this paragraph, the funds and
property held in such special account and the proceeds thereof, or (ii) in lieu
of such apportionment, in whole or in part, to give to the provisions of this
paragraph due consideration in determining the fairness of the distributions to
be made to the Trustee, the Holders and the holders of other indenture
securities with respect to their respective claims, in which event it shall not
be necessary to liquidate or to appraise the value of any securities or other
property held in such special account or as security for any such claim, or to
make a specific allocation of such distributions as between the secured and
unsecured portions of such claims, or otherwise to apply the provisions of this
paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the beginning of such
four months' period shall be subject to the provisions of this subsection (a) as
though such resignation or removal had not occurred. If any Trustee has resigned
or been removed prior to the beginning of such four months' period, it shall be
subject to the provisions of this subsection (a) if and only if the following
conditions exist:
(i) the receipt of property or reduction of claim which would
have given rise to the obligation to account, if such Trustee had
continued as Trustee, occurred after the beginning of such four
months' period; and
(ii) such receipt of property or reduction of claim occurred
within four months after such resignation or removal.
(b) There shall be excluded from the operation of subsection (a) of this
Section 7.13 a creditor relationship arising from
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of
preserving any property which shall at any time be subject to the lien of
this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advance and of the circumstances
surrounding the making thereof is given to the Holders at the time and in
the manner provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c) of this
Section 7.13;
(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve
Act, as amended, which is directly or indirectly a creditor of the
Company; or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within
the classification of self-liquidating paper as defined in subsection (c)
of this Section 7.13.
(c) As used in this Section 7.13:
(1) The term "default" shall mean any failure to make payment in
full of the principal of or interest upon any of the Debt Securities or
upon the other indenture securities when and as such principal or interest
becomes due and payable.
(2) The term "other indenture securities" shall mean securities
upon which the Company is an obliger (as defined in the Trust Indenture
Act of 1939) outstanding under any other indenture (A) under which the
Trustee is also trustee, (B) which contains provisions substantially
similar to the provisions of subsection (a) of this Section 7.13, and (C)
under which a default exists at the time of the apportionment of the funds
and property held in said special account.
(3) The term "cash transaction" shall mean any transaction in which
full payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand.
(4) The term "self-liquidating paper" shall mean any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacture, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation.
(5) The term "Company" shall mean any obliger upon the Debt
Securities.
SECTION 7.14. There may be one or more Authenticating Agents appointed by
the Trustee, with the consent of the Company, having power to act on behalf of
the Trustee and subject to its direction in the authentication and delivery of
Debt Securities of one or more series issued upon exchange or transfer thereof
as fully to all intents and purposes as though any such Authenticating Agent had
been expressly authorized to authenticate and deliver such Debt Securities. Any
such Authenticating Agent shall at all times be a corporation organized and
doing business under the laws of the United States of America or of any State or
Territory thereof or of the District of Columbia authorized under such laws to
act as Authenticating Agent, having a combined capital and surplus of at least
five million dollars and being subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually pursuant to law or the
requirements of such authority, then for the purposes of this Section 7.14 the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect herein specified in this Section.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate trust business
of any Authenticating Agent, shall be the successor of such Authenticating Agent
hereunder, if such successor corporation is otherwise eligible under this
Section 7.14, without the execution or filing of any paper or any further act on
the part of the parties hereto or such Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time, with
the consent of the Company, terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and to the
Company. Upon receiving such a notice of resignation or upon such a termination,
or in case at any time any Authenticating Agent shall cease to be eligible under
this Section 7.14, the Trustee may, and upon the request of the Company shall,
promptly appoint a successor Authenticating Agent eligible under this Section
7.14, shall give written notice of such appointment to the Company and shall
give notice of such appointment to the Holders of Debt Securities in the manner
and to the extent provided in Section 14.05. Any successor Authenticating Agent
upon acceptance of its appointment hereunder shall become vested with all
rights, powers, duties and responsibilities of its predecessor hereunder, with
like effect as if originally named as Authenticating Agent herein.
The Trustee agrees to pay to any Authenticating Agent from time to time
reasonable compensation for its services, and the Trustee shall be entitled to
be reimbursed for such payments, subject to Section 7.06. Any Authenticating
Agent shall have no responsibility or liability for any action taken by it as
such in accordance with the directions of the Trustee.
ARTICLE EIGHT.
CONCERNING THE HOLDERS.
SECTION 8.01. Whenever in this Indenture it is provided that the Holders of
a specified percentage in aggregate principal amount of the Debt Securities of
any or all series may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action the Holders of such
specified percentage have joined therein may be evidenced (a) by any instrument
or any number of substantially concurrent instruments of similar tenor executed
by Holders in person or by agent or proxy appointed in writing, or (b) by the
record of the Holders voting in favor thereof at any meeting of such Holders
duly called and held in accordance with the provisions of Article Nine, or (c)
by a combination of such instrument or instruments and any such record of such a
meeting of such Holders.
SECTION 8.02. Subject to the provisions of Sections 7.01, 7.02 and 9.05, the
fact and date of the execution of any instrument by a Holder of Debt Securities
or his agent or proxy may be proved by the certificate of any notary public or
other officer authorized to take acknowledgments of deeds to be recorded within
the United States of America or territories, commonwealths, or possessions
thereof that the person executing such instrument acknowledged to him the
execution thereof, or by an affidavit of a witness to such execution sworn to
before any such notary or other such officer, provided that the Trustee may
require such additional proof as it shall deem reasonable. Where such execution
is by or on behalf of any legal entity other than an individual, such
certificate or affidavit shall also constitute sufficient proof of the authority
of the person executing the same. The fact of the holding by any Holder of a
Debt Security of any series, and the identifying number of such Debt Security
and the date of his holding the same, may be proved by the production of such
Debt Security or by a certificate executed by any trust company, bank, banker or
recognized securities dealer satisfactory to the Trustee wherever situated, if
such certificate shall be deemed by the Trustee to be satisfactory. Each such
certificate shall be dated and shall state that on the date thereof a Debt
Security of such series bearing a specified identifying number was deposited
with or exhibited to such trust company, bank, banker or recognized securities
dealer by the person named in such certificate. Any such certificate may be
issued in respect of one or more Debt Securities of one or more series specified
therein. The holding by the person named in any such certificate of any Debt
Securities of any series specified therein shall be presumed to continue for a
period of one year from the date of such certificate unless at the time of any
determination of such holding (1) another certificate bearing a later date
issued in respect of the same Debt Securities shall be produced, or (2) the Debt
Security of such series specified in such certificate shall be produced by some
other person, or (3) the Debt Security of such series specified in such
certificate shall have ceased to be Outstanding. Subject to Sections 7.01, 7.02
and 9.05, the fact and date of the execution of any such instrument and the
amount and numbers of Debt Securities of any series held by the person so
executing such instrument and the amount and numbers of any Debt Security or
Debt Securities for such series may also be proven in accordance with such
reasonable rules and regulations as may be prescribed by the Trustee for such
series or in any other manner which the Trustee for such series may deem
sufficient.
In the case of Registered Debt Securities, the ownership of Debt Securities
shall be proved by the Debt Security Register or by a certificate of the
registrar thereof.
The record of any Holders' meeting shall be proved in the manner provided in
Section 9.06.
SECTION 8.03 Prior to due presentment for registration of transfer of any
Debt Security, the Company, the Trustee, any Authenticating Agent, any paying
agent and any Debt Security registrar may deem and treat the Holder of any
Unregistered Debt Security, and the Holder of any coupon and the person in whose
name any Unregistered Debt Security shall be registered upon the Debt Security
Register for that series as the absolute owner of such Debt Security or coupon
(whether or not such Debt Security or coupon shall be overdue and
notwithstanding any notation of ownership or other writing thereon made by
anyone other than the Company, any Debt Security registrar or the Trustee) for
the purpose of receiving payment of or on account thereof and for all other
purposes; and neither the Company nor the Trustee nor any Authenticating Agent
nor any paying agent nor any Debt Security registrar shall be affected by any
notice to the contrary. All such payments so made to any such person, or upon
his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for moneys payable upon any
such Debt Security.
SECTION 8.04. In determining whether the Holders of the requisite aggregate
principal amount of Debt Securities have concurred in any demand or request, the
giving of any notice, direction, consent or waiver or the taking of any other
action under this Indenture, Debt Securities which are owned by the Company or
by any person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company shall be disregarded and
deemed not to be Outstanding for the purpose of any such determination, except
that for the purpose of determining whether the Trustee shall be protected in
relying on any such demand, request, notice, direction, consent or waiver only
Debt Securities which the Trustee knows are so owned shall be so disregarded.
SECTION 8.05. At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 8.01, of the taking of any action by the Holders
of the percentage in aggregate principal amount of the Debt Securities of any or
all series, as the case may be, specified in this Indenture in connection with
such action, any Holder of a Debt Security which is shown by the evidence to be
included in the Debt Securities the Holders of which have joined in such action
may, by filing written notice with the Trustee at its office and upon proof of
holding as provided in Section 8.02, revoke such action so far as concerns such
Debt Security. Except as aforesaid any such action taken by the Holder of any
Debt Security shall be conclusive and binding upon such Holder and upon all
future Holders and owners of such Debt Security and of any Debt Security issued
in exchange or substitution therefor, irrespective of whether or not any
notation in regard thereto is made upon such Debt Security. Any action taken by
the Holders of the percentage in aggregate principal amount of the Debt
Securities specified in this indenture in connection with such action shall be
conclusively binding upon the Company, the Trustee and the Holders of all the
Debt Securities.
ARTICLE NINE.
HOLDERS' MEETINGS.
SECTION 9.01. A meeting of Holders of Debt Securities of any or all series
may be called at any time and from time to time pursuant to the provisions of
this Article Nine for any of the following purposes:
(1) to give any notice to the Company or to the Trustee, or to give
any directions to the Trustee, or to waive any default hereunder and its
consequences, or to take any other action authorized to be taken by
Holders pursuant to any of the provisions of Article Six;
(2) to remove the Trustee and appoint a successor trustee pursuant
to the provisions of Article Seven;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 10.02; or
(4) to take any other action authorized to be taken by or on behalf
of the Holders of any specified percentage in aggregate principal amount
of the Debt Securities of any or all series, as the case may be, under any
other provision of this indenture or under applicable law.
SECTION 9.02. The Trustee may at any time call a meeting of Holders of Debt
Securities of any or all series to take any action specified in Section 9.01,
such meeting to be held at such time and at such place as the Trustee shall
determine. Notice of every meeting of the Holders, setting forth the time and
the place of such meeting and in general terms the action proposed to be taken
at such meeting, shall be given to Holders of Debt Securities of each series
affected, in the manner and to the extent provided in Section 14.05, not less
than 20 nor more than 180 days prior to the date fixed for the meeting;
provided, however, that publication shall occur at least twice, with the first
publication to be not less than 20 nor more than 180 days prior to the date
fixed for the meeting.
SECTION 9.03. In case at any time the Company, pursuant to a resolution of
the Board of Directors, or the Holders of at least ten percent in aggregate
principal amount of the Debt Securities of any or all series then Outstanding,
shall have requested the Trustee in writing to call a meeting of Holders to take
any action authorized in Section 9.01, which request shall set forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within 20 days after
receipt of such request then the Company or the Holders of the percentage in
aggregate principal amount of the Debt Securities above specified may determine
the time and the place for such meeting and may call such meeting by mailing or
publishing notice thereof as provided in Section 9.02.
SECTION 9.04. To be entitled to vote at any meeting of Holders a Person
shall be a Holder of one or more Debt Securities of any or all series, as the
case may be, with respect to which such meeting is being held or a Person
appointed by an instrument in writing as proxy by such Holder. The only Persons
who shall be entitled to be present or to speak at any meeting of Holders shall
be the Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
SECTION 9.05. Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders in regard to proof of the holding of Debt Securities and of
the appointment of proxies in regard to the appointment and duties of inspectors
of votes, the submission and examination of proxies, certificates and other
evidence of the right to vote, and in regard to such other matters concerning
the conduct of the meeting as it shall think fit. Except as otherwise permitted
or required by any such regulations, the holding of Debt Securities shall be
proved in the manner specified in Section 8.02 and the appointment of any proxy
shall be proved in the manner specified in Section 8.02 or by having the
signature of the person executing the proxy witnessed or guaranteed by any bank,
banker or trust company satisfactory to the Trustee.
The Trustee shall, by an instrument in writing, appoint a temporary chairman
of the meeting, unless the meeting shall have been called by the Company or by
Holders as provided in Section 9.03, in which case the Company or the Holders
calling the meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent secretary of the
meeting shall be elected by majority vote of the meeting.
Subject to the provisions of Section 8.04, at any meeting each Holder of
Debt Securities with respect to which such meeting is being held or proxy shall
be entitled to one vote for each $1,000 principal amount (in the case of
Original Issue Discount Securities, such principal amount to be determined as
provided in the definition of "Outstanding") of Debt Securities held or
represented by each Holder, provided, however, that no vote shall be cast or
counted at any meeting in respect of any Debt Security challenged as not
Outstanding and ruled by the chairman of the meeting to be not Outstanding. The
chairman of the meeting shall have no right to vote except as a Holder or proxy.
At any meeting of Holders, the presence of persons holding or representing Debt
Securities in an aggregate principal amount sufficient to take action on any
business for the transaction of which such meeting was called shall constitute a
quorum.
Any meeting of Holders duly called pursuant to the provisions of Section
9.02 or 9.03 may be adjourned from time to time by vote of the Holders of a
majority in aggregate principal amount of the Debt Securities of any or all
series, as the case may be, represented at the meeting and entitled to vote,
whether or not a quorum be then present at such meeting, and the meeting may be
held as so adjourned without further notice.
SECTION 9.06. The vote upon any resolution submitted to any meeting of
Holders of Debt Securities with respect to which such meeting is being held or
represented by them shall be by written ballots on which shall be subscribed the
signatures of the Holders or proxies and the serial number or numbers and
principal amount of the Debt Securities of each series held or represented by
them. The permanent chairman of the meeting shall appoint two inspectors of
votes who shall count all votes cast at the meeting for or against any
resolution and who shall make and file with the secretary of the meeting their
verified written reports in duplicate of all votes cast at the meeting. A record
in duplicate of the proceedings of each meeting of Holders shall be prepared by
the secretary of the meeting and there shall be attached to said record the
original reports of the inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more persons having knowledge of the facts setting
forth a copy of the notice of the meeting and showing that said notice was given
as provided in Section 9.02. The record shall be signed and verified by the
permanent chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
ARTICLE TEN.
SUPPLEMENTAL INDENTURES.
SECTION 10.01. The Company, when authorized by a resolution of the Board of
Directors, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto (which shall conform to the
provisions of the
Trust Indenture Act of 1939 as in force at the date of execution of such
supplemental indenture) for one or more of the following purposes:
(a) to evidence the succession of another corporation to the Company, or
successive successions, and the assumption by the successor corporation of the
covenants, agreements and obligations of the Company pursuant to Article Eleven
hereof;
(b) to add to the covenants or agreements herein such further covenants,
restrictions, conditions or provisions as the Board of Directors and the Trustee
shall consider to be for the protection of the Holders of all or any series of
Debt Securities (and if such covenants are to be for the benefit of less than
all series of Debt Securities stating that such covenants are expressly being
included solely for the benefit of such series), and to make the occurrence, or
the occurrence and continuance, of a default in any of such additional
covenants, restrictions, conditions or provisions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture; provided, however, that in respect of any such
additional covenant, restriction, condition or provision such supplemental
indenture may provide for a particular period of grace after default (which
period may be shorter or longer than that allowed in the case of other defaults)
or may provide for an immediate enforcement upon such default or may limit the
remedies available to the Trustee upon such default or may limit the right of
the Holders of a majority in aggregate principal amount of the Debt Securities
to waive such default, and
(c) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee or to make such other provisions in regard to matters or
questions arising under this Indenture as shall not adversely affect the
interests of any Holder;
(d) to establish the form or terms of Debt Securities of any series as
permitted by Sections 2.01 and 2.02; and
(e) to evidence and provide for the acceptance of appointment hereunder by a
successor trustee with respect to the Debt Securities of one or more series and
to add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of Section
7.11.
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which affects the Trustee's own rights, duties, liabilities or immunities under
this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
10.01 may be executed by the Company and the Trustee without the consent of the
Holders of any of the Debt Securities at the time Outstanding.
SECTION 10.02. With the consent (evidenced as provided in Section 8.01) of
the Holders of not less than 662/3% in aggregate principal amount of the
Outstanding Debt Securities of all series issued under the Indenture which are
affected by the modification or amendment (voting as one class), the Company,
when authorized by a resolution of the Board of Directors, and the Trustee may
from time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act of 1939 as in force at the date of execution of such supplemental
indenture) for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders of the Debt
Securities of each such series, provided, however, that no such supplemental
indenture shall (i) extend the fixed maturity of any Debt Securities, or reduce
the principal amount thereof, or reduce the rate or extend the time of payment
of interest thereon, or reduce any premium payable upon the redemption thereof,
or reduce the amount of the principal of an Original Issue Discount Security
that would be due and payable upon an acceleration of the maturity thereof
without the consent of the Holder of each Debt Security so affected, or (ii)
change the aforesaid percentage of Debt Securities, the consent of the Holders
of which is required for any such supplemental indenture, without the consent of
the Holders of all Debt Securities affected then Outstanding.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Debt Securities, or which modifies
the rights of the Holders of Debt Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect rights under this
Indenture of the Holders of Debt Securities of any other series.
Upon the request of the Company, accompanied by a copy of a resolution of
the Board of Directors certified by the Secretary or an Assistant Secretary of
the Company authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Holders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion but shall not be obligated to enter into
such supplemental indenture.
It shall not be necessary for the Holders under this Section 10.02 to
consent to the particular form of any proposed supplemental indenture, but it
shall be sufficient if they consent to the substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 10.02, the
Company shall give notice, setting forth in general terms the substance of such
supplemental indenture, to all Holders of Debt Securities affected in the manner
and to the extent provided in Section 14.05. Any failure of the Company to give
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture.
SECTION 10.03. Upon the execution of any supplemental indenture pursuant to
the provisions of this Article Ten or of Section 4.03, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the Holders shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
The Trustee, subject to the provisions of Sections 7.01 and 7.02, may
receive an Opinion of Counsel as conclusive evidence that any such supplemental
indenture complies with the provisions of this Article Ten.
SECTION 10.04. Debt Securities authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article Ten may bear a notation in form approved by the Trustee for such series
as to any matter provided for in such supplemental indenture. New Debt
Securities so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any modification or amendment of this Indenture contained
in any such supplemental indenture may be prepared by the Company, authenticated
by the Trustee and delivered in exchange for the Debt Securities of that series
then Outstanding.
ARTICLE ELEVEN.
CONSOLIDATION, MERGER, OR CONVEYANCE.
SECTION 11.01. Subject to the provisions of Section 4.03, nothing contained
in this Indenture or in any of the Debt Securities shall prevent any
consolidation of the Company with, or merger of the Company into, any other
corporation or corporations (whether or not affiliated with the Company), or
successive consolidations or mergers to which the Company or its successor or
successors shall be a party or parties, or shall prevent any sale or conveyance
of the property of the Company as an entirety or substantially as an entirety to
any other corporation (whether or not affiliated with the Company) authorized to
acquire and operate the same; provided, however, and the Company hereby
covenants and agrees, that upon any such consolidation, merger, sale or
conveyance, the due and punctual payment of the principal of (and premium, if
any) and interest on all of the Debt Securities and any coupons appurtenant
thereto, according to their tenor, and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed or observed by the Company, shall be expressly assumed, by
supplemental indenture, satisfactory in form to the Trustee, executed and
delivered to the Trustee by the corporation formed by such consolidation (unless
the Company shall be the surviving corporation), or into which the Company shall
have been merged, or which shall have acquired such property. In the event of
the sale by the Company of its properties and assets as, or substantially as, an
entirety upon the terms and conditions of this Section and Section 4.03, the
Company shall be released from all its liabilities and obligations hereunder and
under the Debt Securities and coupons, if any.
SECTION 11.02. In case of any such consolidation, merger, sale or
conveyance, and following such an assumption by the successor corporation, such
successor corporation shall succeed to and be substituted for the Company, with
the same effect as if it had been named herein as the party of the first part.
Such successor corporation thereupon may cause to be signed, and may issue
either in its own name or in the name of the Company, any or all of the Debt
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Trustee; and, upon the order of such successor
corporation instead of the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee or the Authenticating
Agent shall authenticate and shall deliver any Debt Securities, together with
any coupons appurtenant thereto, which previously shall have been signed and
delivered by the officers Company to the Trustee for authentication and any Debt
Securities which such successor corporation thereafter shall cause to be signed
and delivered to the Trustee on its behalf for that purpose. All the Debt
Securities so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Debt Securities theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Debt
Securities had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale or conveyance such changes
in phraseology and form may be made in the Debt Securities thereafter to be
issued as may be appropriate.
Subject to the provisions of Section 4.03, nothing contained in this
Indenture or in any of the Debt Securities shall prevent the Company from
merging into itself any other corporation (whether or not affiliated with the
Company) or acquiring by purchase or otherwise all or any part of the property
of any other corporation (whether or not affiliated with the Company).
SECTION 11.03. The Company covenants and agrees that if it shall
consolidate, merge, sell, or convey its properties as an entirety or
substantially as an entirety, the Company will promptly furnish to the Trustee:
(1) an Officers' Certificate;
(2) an executed counterpart of any instrument or instruments
executed by the Company or the successor corporation in the performance of
such covenants; and
(3) an Opinion of Counsel.
Subject the provisions of Section 7.01, the Trustee may receive and be
entitled to rely on an Opinion of Counsel conforming to the requirements of
Section 14.06 as conclusive evidence that any such consolidation, merger, sale
or conveyance and any such supplemental indenture or other instrument or
instruments comply with the provisions of this Article Eleven.
ARTICLE TWELVE.
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS.
SECTION 12.01. If at any time (a) the Company shall have paid or caused to
be paid the principal of and interest on all the Debt Securities of any series
Outstanding, and any coupons appurtenant thereto, as and when the same shall
have become due and payable, or (b) the Company shall have delivered to the
Trustee for cancellation all the Debt Securities of any series theretofore
authenticated and all unmatured coupons appurtenant thereto (other than any Debt
Securities of that series (and appurtenant coupons) which shall have been
destroyed, lost or stolen and which shall have been replaced or paid as provided
in Section 2.07), or (c) (i) all the Debt Securities of any series and coupons
appurtenant to such Debt Securities not theretofore delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become
due and payable within one year or are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the giving of notice of
redemption, and (ii) the Company shall have irrevocably deposited or caused to
be deposited with the Trustee as trust funds the entire amount in cash (other
than moneys repaid by the Trustee or any paying agent to the Company in
accordance with Section 12.04 or moneys paid to any state pursuant to its
unclaimed property or similar laws) or direct obligations of the United States
or any agency thereof backed by the full faith and credit of the United States,
maturing as to principal and interest in such amounts and at such times as will
assure the availability of cash sufficient to pay at maturity or upon redemption
all Debt Securities of that series and all coupons appurtenant to such Debt
Securities not theretofore delivered to the Trustee for cancellation, including
principal (and premium, if any) and interest due or to become due to such date
of maturity or date fixed for redemption, as the case may be, and if in any such
case the Company shall also pay or cause to be paid all other sums payable
hereunder by the Company, then this Indenture shall cease to be of further
effect with respect to Debt Securities of such series and coupons appurtenant to
such Debt Securities (except as to (i) rights of registration of transfer and
exchange, and the Company's right of optional redemption (if any), (ii)
substitution of apparently mutilated, defaced, destroyed, lost or stolen Debt
Securities or coupons, (iii) rights of Holders to receive payments of principal
thereof and interest thereon upon the original stated due dates therefor (but
not upon acceleration), and remaining rights of the Holders to receive mandatory
sinking fund payments, if any, (iv) the rights, obligations and immunities of
the Trustee hereunder and (v) the rights of the Holders of such series as
beneficiaries hereof with respect to the property so deposited with the Trustee
payable to all or any of them) and the Trustee, on demand of and at the cost and
expense of the Company, shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture. Notwithstanding the satisfaction
and discharge of this Indenture, the Company agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred by the Trustee
in connection with this Indenture or the Debt Securities.
SECTION 12.02. All moneys deposited with the Trustee pursuant to Section
12.01 shall be held in trust and applied by it to the payment, either directly
or through any paying agent (including the Company acting as its own paying
agent), to the Holders of the particular Debt Securities of that series, and any
coupons appurtenant thereto, for the payment or redemption of which such moneys
have been deposited with the Trustee, of all sums due and to become due thereon
for principal and interest and premium, if any.
SECTION 12.03. In connection with the satisfaction and discharge of this
Indenture all moneys then held by any paying agent under the provisions of this
Indenture shall, upon demand of the Company, be repaid to it or paid to the
Trustee and thereupon such paying agent shall be released from all further
liability with respect to such moneys.
SECTION 12.04. Any moneys deposited with or paid to the Trustee pursuant to
any provision of this Indenture for payment of the principal of (and premium, if
any) or interest on Debt Securities or coupons and not applied but remaining
unclaimed by the Holders of Debt Securities or coupons for three years after the
date upon which the principal of (and premium, if any) or interest on such Debt
Securities or coupons, as the case may be, shall have become due and payable,
shall be repaid to the Company by the Trustee on demand; and the Holder of any
of the Debt Securities or coupons shall thereafter look only to the Company for
any payment which such Holder may be entitled to collect.
ARTICLE THIRTEEN.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS.
SECTION 13.01. NO recourse under or upon any obligation, covenant or
agreement of this Indenture, or of any Debt Security or coupon, or for any claim
based thereon or otherwise in respect thereof, shall be had against any
incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or of any successor corporation, either directly or
through the Company, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that this Indenture and the obligations issued hereunder
are solely corporate obligations, and that no such personal liability whatever
shall attach to, or is or shall be incurred by, the incorporators, stockholders,
officers or directors, as such, of the Company or of any successor corporation,
or any of them, because of the creation of the indebtedness hereby authorized,
or under or by reason of the obligations, covenants or agreements contained in
this Indenture or in any of the Debt Securities or coupons or implied therefrom;
and that any and all such personal liability, either at common law or in equity
or by constitution or statute, of, and any and all such rights and claims
against,
every such incorporator, stockholder, officer or director, as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Debt Securities or coupons or implied therefrom, are hereby expressly waived
and released as a condition of, and as a consideration for, the execution of
this Indenture and the issue of such Debt Securities and coupons.
ARTICLE FOURTEEN.
MISCELLANEOUS PROVISIONS.
SECTION 14.01. All the covenants, stipulations, promises and agreements in
this Indenture contained by or on behalf of the Company shall bind its
successors and assigns, whether so expressed or not.
SECTION 14.02. Any act or proceeding by any provision of this Indenture
authorized or required to be done or performed by any board, committee or
officer of the Company shall and may be done and performed with like force and
eject by the like board, committee or officer of any corporation that shall at
the time be the lawful sole successor of the Company.
SECTION 14.03. The Company by instrument in writing executed by authority of
the Board of Directors and delivered to the Trustee may surrender any of the
powers or rights reserved to the Company and thereupon such power or right so
surrendered shall terminate both as to the Company and as to any successor
corporation.
SECTION 14.04. Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the Holders
of Debt Securities to or on the Company may be given or served by being
deposited postage prepaid in a post office box addressed (until another address
is filed by the Company with the Trustee) as follows: (general Mills, Inc., P.O.
BOX 1113, Minneapolis, Minnesota 55440, Attention: Treasurer. Any notice,
direction, request or demand by any Holder to or upon the Trustee shall be
deemed to have been sufficiently given or made for all purposes if given or made
in writing at the Principal Corporate Trust Office of the Trustee.
SECTION 14.05. Where this Indenture or any of the Debt Securities provides
for notice to Holders of any event, (1) if any of the Debt Securities affected
by such event are Registered Debt Securities, such notice shall be sufficiently
given (unless otherwise herein or in such Debt Securities expressly provided) if
in writing and mailed, first-class, postage prepaid, to each Registered Holder
of such Debt Securities, at such Holder's address as it appears in the Debt
Security Register, not later than the latest date, and not earlier than the
earliest date prescribed for the giving of such notice and (2) if any of the
Debt Securities affected by such event are Unregistered Debt Securities, such
notice shall be sufficiently given (unless otherwise herein or in such Debt
Securities expressly provided) (a) to the Holders of Unregistered Debt
Securities who have filed their names and addresses pursuant to clause (ii) of
subparagraph (c) of Section 5.04(C), if in writing and mailed, first-class,
postage prepaid, to each such Unregistered Holder at such Holder's address as so
furnished to the Trustee, and (b) to all other Holders of Unregistered Debt
Securities, if published once in an Authorized Newspaper in each Place of
Payment provided for such Debt Securities pursuant to Section 2.02, in each
case, not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver
In case, by reason of the suspension of publication of any Authorized
Newspaper, or by reason of any other cause, it shall be impossible to make
publication of any notice in an Authorized Newspaper or Authorized Newspapers as
required by any Debt Security or this Indenture, then such method of publication
or notification as shall be made with the approval of the Trustee shall
constitute a sufficient publication of such notice.
In case, by reason of the suspension of regular mail service as a result of
a strike, work stoppage or otherwise, it shall be impractical to mail notice of
any event to the Holders of Debt Securities when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Trustee and the Company shall be
deemed to be a sufficient giving of such notice.
SECTION 14.06 Upon any application or demand by the Company to the Trustee
to take any action under any of the provisions of this Indenture, the Company
shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent have been complied with,
except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and delivered to
the Trustee with respect to compliance with a condition or covenant provided for
in this Indenture shall include (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (3) a statement that, in the opinion of such person, he or she has made
such examination or investigation as is necessary to enable such person to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and (4) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with.
SECTION 14.07. If the date of maturity of interest on or principal of the
Debt Securities or the date fixed for redemption of any Debt Security shall be
in the City of New York, New York, the City of Chicago, Illinois, or any other
Place of Payment a day on which banking institutions are authorized or obligated
by law to close, then payment of interest or principal (and premium, if any)
need not be made on such date, but may be made on the next succeeding day not in
said City of New York, New York, City of Chicago, Illinois, and Place of
Payment, respectively, a legal holiday or a day on which banking institutions
are authorized or obligated by law to close with the same force and effect as if
made on the date of maturity or the date fixed for redemption, and no interest
shall accrue for the period after such date.
SECTION 14.08. If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with another provision included in this Indenture
which is required to be included in this Indenture by any of Sections 310 to
317, inclusive, of the Trust Indenture Act of 1939, such required provision
shall control.
SECTION 14.09. This Indenture and each Debt Security issued hereunder shall
be deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with and governed by the laws of
said State.
SECTION 14.10. This Indenture may be executed in any number of counterparts,
each of which shall be an original; but such counterparts shall together
constitute but one and the same instrument.
CONTINENTAL ILLINOIS NATIONAL BANK AND TRUST COMPANY OF CHICAGO, the party
of the second part, hereby accepts the trust in this Indenture declared and
provided, upon the terms and conditions hereinabove set forth.
IN WITNESS WHEREOF, GENERAL MILLS, INC., the party of the first part, has
caused this Indenture to be signed, acknowledged and delivered by its Chairman
of the Board, Executive Vice President-Chief Financial Officer or Vice
President-Treasurer and its corporate seal to be affixed hereunto and the same
to be attested by its Secretary or an Assistant Secretary; and CONTINENTAL
ILLINOIS NATIONAL BANK AND TRUST COMPANY OF CHICAGO, the party of the second
part, has caused this Indenture to be signed, acknowledged and delivered by one
of its Vice Presidents,
and its seal to be affixed hereunto and the same to be attested by one of its
Trust Officers, all as of the day and year first written above.
GENERAL MILLS, INC.
(CORPORATE SEAL)
By: /s/ James L. Weaver
Vice President-Treasurer
Attest:
/s/ James M. Neville
CONTINENTAL ILLINOIS NATIONAL
BANK AND TRUST COMPANY
OF CHICAGO, as Trustee
(CORPORATE SEAL)
By: /s/ Richard L. LaVarnway
Second Vice President
Attest:
/s/ E.D. Butler
Trust Officer
STATE OF MINNESOTA } ss:
COUNTY OF HENNEPIN }
On the 9th day of August, in the year one thousand nine hundred eighty-two,
before me appeared James L. Weaver, to me personally known, who, being by me
duly sworn, did say that he resides at 4235 DuPont Ave. S., Minneapolis, Minn.;
that he is a Vice President-Treasurer of GENERAL MILLS, INC., one of the
corporations described in and which executed the above instrument; that he knows
the seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the Board of Directors of
said corporation, and that he signed his name thereto by like order.
/s/ IVY S. BERNHARDSON
Notary Public
STATE OF ILLINOIS } ss:
COUNTY OF COOK }
On the 4th day of August, in the year one thousand nine hundred eighty-two,
before me appeared Richard L. LaVarnway, to me personally known, who, being by
me duly sworn, did say that he resides at (Glendale Heights, Ill.; that he is a
Second Vice President of CONTINENTAL ILLINOIS NATIONAL BANK AND TRUST COMPANY OF
CHICAGO, one of the corporations described in and which executed the above
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation, and that he signed his name thereto
by like authority.
[NOTARIAL SEAL]
/s/ NANCY STEVENS
Notary Public
<PAGE>
GENERAL MILLS, INC.
SUPPLEMENTAL INDENTURE NO. 1
Dated as of July 27, 1982
Series of
Money Multiplier Notes (Zero Coupon) Due 1988
$100,000,000
Supplemental Indenture No. 1 dated as of July 27, 1982, between GENERAL
MILL,S, INC., a corporation organized and existing under the laws of the State
of Delaware (hereinafter sometimes referred to as the "Company"), and
CONTINENTAL ILLINOIS NATIONAL BANK AND TRUST COMPANY OF Chicano, a national
banking association duly organized and existing under the laws of the United
States of America (hereinafter sometimes referred to as the "Trustee"),
WITNESSETH:
The Company and the Trustee have executed and delivered an Indenture dated
as of July 1, 1982 (the "Indenture").
Section 10.01 of the Indenture provides for the Company, when authorized by
the Board of Directors, and the Trustee to enter into an indenture supplemental
to the Indenture to establish the form or terms of Debt Securities of any series
of Debt Securities as permitted by Section 2.02 of the Indenture.
Section 2.02 of the Indenture provides for Debt Securities of any series to
be established pursuant to an indenture supplemental to the Indenture.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the series of
Debt Securities provided for herein, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of such series of Debt
Securities, as follows:
ARTICLE ONE
RELATION TO INDENTURE; DEFINITIONS.
SECTION 1.01. This Supplemental Indenture No. 1 constitutes
an integral part of the Indenture.
SECTION 1.02. For all purposes of this Supplemental Indenture:
(1) Capitalized terms used herein without definition shall have the
meanings specified in the Indenture;
(2) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this
Supplemental Indenture No. 1; and
(3) The terms "hereof", "herein", "hereby", "hereto", "hereunder" and
"herewith" refer to this Supplemental Indenture.
ARTICLE TWO
THE SERIES OF NOTES
SECTION 2.01. There shall be a series of Debt Securities designated the
"Money Multiplier Notes (Zero Coupon) Due 1988" (the "Notes"). The Notes shall
be Original Issue Discount Securities and shall be limited to $100,000,000
aggregate principal amount. The initial public offering price of each Note shall
be 50% of its principal amount payable at maturity.
SECTION 2.02. The principal amount of the Notes shall be payable on
January 4, 1988.
SECTION 2.03. There shall be no periodic payments of interest on the Notes.
SECTION 2.04. The Yield to Maturity on the Notes shall be 13.30% per annum,
which Yield to Maturity shall be the rate of interest payable on any overdue
principal of the Notes pursuant to Section 6.02 of the indenture. Interest on
any such overdue principal shall be computed on the basis of a 360-day year of
twelve 30-day months.
SECTION 2.05. The Places of Payment for the Notes shall be the City of
Chicago, Illinois and the City of New York, New York. The Trustee and Morgan
Guaranty Trust Company of New York shall be the paying agents for the Notes.
SECTION 2.06. The Notes shall be subject to redemption at the option of the
Company at their principal amount at any time prior to maturity. The Company
shall have no obligation to redeem, purchase or repay the Notes pursuant to any
sinking fund.
SECTION 2.07. The Notes shall be issued in denominations of $1,000, $5,000,
$25,000 and $100,000. In addition, Notes in certain denominations in excess of
$100,000 shall be available to securities depositories registered as clearing
agencies under the Securities Exchange Act of 1934.
SECTION 2.08. The amount which shall be payable upon declaration of
acceleration of maturity pursuant to Section 6.01 of the Indenture or provable
in bankruptcy pursuant to Section 6.02 of the Indenture shall be the initial
public offering price of each Note plus the portion of the original issue
discount attributable ratably on a daily basis to the period from the date of
issue to the date of declaration. Upon payment of such amount following such
acceleration or bankruptcy, all of the Company's obligations it in respect of
payment of the principal of such Note shall terminate.
SECTION 2.09. The Notes shall be issued in bearer form, without coupon, and
shall be transferable by delivery. The Company, the Trustee and the
Authenticating Agent and co-paying agent may treat the bearer of a Note as the
Holder and absolute owner thereof without regard to any notice to the contrary.
SECTION 2.10. Notes of any authorized denomination shall be exchangeable for
a like aggregate principal amount of Notes of different authorized denominations
upon surrender of such Notes, with a request for such exchange, at the
designated office of the Trustee in the City of Chicago, Illinois or at the
designated office of the Authenticating Agent in the City of New York, New York.
SECTION 2.11. The Notes shall be in the form attached as Exhibit A hereto.
SECTION 2.12. The dates on which the Company shall provide information
regarding the Holders of the Notes to the Trustee pursuant to Section 5.01 of
the Indenture shall be June 15 and December 15 of every year, commencing on
December 15, 1982, for so long as any of the Notes are Outstanding. Such
information shall be current as of the previous June 1 or December 1, as the
case may be.
IN WITNESS WHEREOF, GENERAL MILLS, INC. has caused this Supplemental
Indenture No. 1 to be signed, acknowledged and delivered by its Chairman of the
Board, Executive Vice President-Chief Financial Officer or Vice
President-Treasurer and its corporate seal to be affixed hereunto and the same
to be attested by its Secretary or Assistant Secretary; and CONTINENTAL ILLINOIS
NATIONAL BANK AND TRUST COMPANY OF CHICAGO has caused this Supplemental
Indenture No. 1 to be signed, acknowledged and delivered by one of its Vice
Presidents, and its seal to be affixed hereunto and the same to be attested by
one of its Trust Officers, all as of the day and year first written above.
GENERAL MILLS, INC.
[CORPORATE SEAL]
By: /s/ JAMES L. WEAVER
Vice President-Treasurer
Attest:
/s/ JAMES M. NEVILLE
Secretary
CONTINENTAL ILLINOIS
NATIONAL BANK AND TRUST COMPANY
OF CHICAGO,
as Trustee
[CORPORATE SEAL]
By: /s/ RICHARD L. LAVARNWAY
Second Vice President
Attest:
/s/ E.D. BUTLER
Trust Officer
<PAGE>
GENERAL MILLS, INC.
SUPPLEMENTAL INDENTURE NO. 2
Dated as of August 23, 1982
Series of
12 5/8% Notes due August 15, 1985
$50,000,000
Supplemental Indenture No. 2 dated as of August 23, 1982, between
GENERAL MILLS, INC., a corporation organized and existing under the laws of the
State of Delaware (hereinafter sometimes referred to as the "Company"), and
CONTINENTAL ILLINOIS NATIONAL BANK AND TRUST COMPANY OF CHICAGO, a national
banking association duly organized and existing under the laws of the United
States of America (hereinafter sometimes referred to as the "Trustee"),
W I T N E S S E T H:
The Company and the Trustee have executed and delivered an Indenture
dated as of July 1, 1982 (the "Indenture").
Section 10.01 of the Indenture provides for the Company, when
authorized by the Board of Directors, and the Trustee to enter into an indenture
supplemental to the Indenture to establish the form or terms of Debt Securities
of any series of Debt Securities as permitted by Section 2.02 of the Indenture.
Section 2.02 of the Indenture provides for Debt Securities of any
Series to be established pursuant to an indenture supplemental to the Indenture.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the series
of Debt Securities provided for herein, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of such series of Debt
Securities, as follows:
ARTICLE ONE
Relation to Indenture; Definitions.
Section 1.01. This Supplemental Indenture No. 2 constitutes
an integral part of the Indenture.
Section 1.02. For all purposes of this Supplemental Indenture:
(1) Capitalized terms used herein without definition shall have the
meanings specified in the Indenture;
(2) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this
Supplemental Indenture No. 2; and
(3) The terms "hereof", "herein", "hereby", "hereto", "hereunder" and
"herewith" refer to this Supplemental Indenture.
ARTICLE TWO
The Series of Notes
Section 2.01. There shall be a series of Debt Securities designated the
"12 5/8% Notes due August 15, 1985" (the "Notes"). The Notes shall be limited to
$50,000,000 aggregate principal amount. The original issue date of the Notes
shall be August 24, 1982.
Section 2.02. The principal on the Notes shall be payable on August 15,
1985.
Section 2.03. The rate of interest on the Notes shall be 12 5/8% per
annum, which interest shall be payable semiannually on February 15 and August
15, for so long as the Notes are outstanding, commencing on February 15, 1983.
Interest payable on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months.
Section 2.04. The rate of interest payable on any overdue principal of
the Notes pursuant to Section 6.02 of the Indenture shall be 12 5/8% per annum.
Interest on any such overdue principal shall be computed on the basis of a
360-day year of twelve 30-day months.
Section 2.05. The Places of Payment for the Notes shall be the City of Chicago,
Illinois and the City of New York, New York. The Trustee and Morgan Guaranty
Trust Company of New York shall be the paying agents for the Notes.
Section 2.06. The Notes shall not be subject to redemption at any time
prior to maturity. The Company shall have no obligation to redeem, purchase or
repay the Notes pursuant to any sinking fund.
Section 2.07. The amount which shall be payable upon declaration of
acceleration of maturity pursuant to Section 6.01 of the Indenture or provable
in bankruptcy pursuant to Section 6.02 of the Indenture shall be the entire
principal amount of the Notes plus accrued interest thereon. Upon payment of
such amount following such acceleration or bankruptcy, all of the Company's
obligations in respect of payment of the principal of and interest on such Note
shall terminate.
Section 2.08. The Notes shall be issued in registered form, without
coupon, and shall be transferable as provided in Article Two of the Indenture.
Section 2.09. Notes of any authorized denomination shall be
exchangeable for a like aggregate principal amount of Notes of different
authorized denominations upon surrender of such Notes, with a request for such
exchange, at the designated office of the Trustee in the City of Chicago,
Illinois or at the designated office of the Authenticating Agent in the City of
New York, New York.
Section 2.10. The dates on which the Company shall provide information
regarding the Holders of the Notes to the Trustee pursuant to Section 5.01 of
the Indenture shall be February 15 and August 15 of every year, commencing on
February 15, 1983, for so long as any of the Notes are Outstanding. Such
information shall be current as of the previous January 31 or July 31, as the
case may be.
Section 2.11. Prior to due presentment for registration of transfer of
any Note, the Company, the Trustee, any Authenticating Agent, any paying agent
and any Debt Security registrar may deem and treat the Holder of such Note as
the absolute owner of such Note (whether or not such Note shall be overdue and
notwithstanding any notation of ownership or other writing thereon made by
anyone other than the Company, any Debt Security registrar or the Trustee) for
the purpose of receiving payment of or on account thereof and for all other
purposes; and neither the Company nor the Trustee nor any Authenticating Agent
nor any paying agent nor any Debt Securities registrar shall be affected by any
notice to the contrary. All such payments so made to any such person, or upon
such person's order, shall be valid, and, to the extent of the sum or sums so
paid, effectual to satisfy and discharge the liability for moneys payable upon
any such Note.
Section 2.12. The Notes shall be in the form attached as Exhibit A
hereto.
IN WITNESS WHEREOF, GENERAL MILLS, INC. has caused this Supplemental
Indenture No. 2 to be signed, acknowledged and delivered by its Chairman of the
Board, Executive Vice President-Treasurer-Chief Financial Officer or Vice
President-Treasurer and its corporate seal to be affixed hereunto and the same
to be attested by its Secretary or Assistant Secretary; and CONTINENTAL ILLINOIS
NATIONAL BANK AND TRUST COMPANY OF CHICAGO has caused this Supplemental
Indenture No. 2 to be signed, acknowledged and delivered by one of its Vice
Presidents, and its seal to be affixed hereunto and the same to be attested by
one of its Trust Officers, all as of the day and year first written above.
GENERAL MILLS, INC.
[CORPORATE SEAL]
By: /s/ JAMES L. WEAVER
Vice President-Treasurer
Attest:
/s/ JAMES M. NEVILLE
Secretary
CONTINENTAL ILLINOIS
NATIONAL BANK AND TRUST COMPANY
OF CHICAGO,
as Trustee
[CORPORATE SEAL]
By: /s/ RICHARD L. LAVARNWAY
Second Vice President
Attest:
/s/ E.D. BUTLER
Trust Officer
STATE OF MINNESOTA
ss.:
COUNTY OF HENNEPIN
On the 20th day of August, in the year one thousand nine hundred
eighty-two before me appeared J.L. Weaver to me personally known, who, being by
me duly sworn, did say that he resides at Minneapolis, Minnesota, that he is a
Vice President-Treasurer of GENERAL MILLS, INC., one of the corporations
described in and which executed the above instrument; that he knows the seal of
said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation, and that he signed his name thereto by like order.
/s/ IVY S. BERNHARDSON
NOTARY PUBLIC - MINNESOTA
HENNEPIN COUNTY
My Commission Expires Sept. 28, 1985
STATE OF NEW YORK
ss.:
COUNTY OF NEW YORK
On the 24th day of August, in the year one thousand nine hundred
eighty-two, before me appeared Richard L. LaVarnway to me personally known, who,
being by me duly sworn, did say that he resides at 42 Campbell Dr., Glendale
Heights, IL that he is a Vice President of CONTINENTAL ILLINOIS NATIONAL BANK
AND TRUST COMPANY OF CHICAGO, one of the corporations described in and which
executed the above instrument; that he knows the seal of said corporation; that
the seal affixed to said instrument is such corporate seal; the it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
/s/ DORIS J. BAILER
NOTARY PUBLIC, State of New York
No 24 - 0284525
Qualified in Kings County
Cert. filed in New York County
Commission Expires March 30, 1983
<PAGE>
GENERAL MILLS, INC.
SUPPLEMENTAL INDENTURE NO. 3
Dated as of October 18, 1982
Series of
10 3/8% Notes due October 15, 1984
$50,000,000
Supplemental Indenture No. 3 dated as of October 18, 1982, between
GENERAL MILLS, INC., a corporation organized and existing under the laws of the
State of Delaware (hereinafter sometimes referred to as the "Company"), and
CONTINENTAL ILLINOIS NATIONAL BANK AND TRUST COMPANY OF CHICAGO, a national
banking association duly organized and existing under the laws of the United
States of America (hereinafter sometimes referred to as the "Trustee"),
W I T N E S S E T H.:
The Company and the Trustee have executed and delivered an
Indenture dated as of July 1, 1982 (the "Indenture").
Section 10.01 of the Indenture provides for the Company, when
authorized by the Board of Directors, and the Trustee to enter into an indenture
supplemental to the Indenture to establish the form or terms of Debt Securities
of any series of Debt Securities as permitted by Section 2.02 of the Indenture.
Section 2.02 of the Indenture provides for Debt Securities of any
series to be established pursuant to an indenture supplemental to the Indenture.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE
WITNESSETH:
For and in consideration of the premises and the purchase of the
series of Debt Securities provided for herein, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders of such series of
Debt Securities, as follows:
ARTICLE ONE
Relation to Indenture; Definitions
Section 1.01. This Supplemental Indenture No. 3 constitutes
an integral part of the Indenture.
Section 1.02. For all purposes of this Supplemental Indenture:
(1) Capitalized terms used herein without definition shall have the
meanings specified in the Indenture;
(2) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this
Supplemental Indenture No. 3; and
(3) The terms "hereof", "herein", "hereby", "hereto", "hereunder"
and "herewith" refer to this Supplemental Indenture.
ARTICLE TWO
The Series of Notes
Section 2.01. There shall be a series of Debt Securities designated
the "10 3/8% Notes due October 15, 1984" (the "Notes"). The Notes shall be
limited to $50,000,000 aggregate principal amount. The original issue date of
the Notes shall be October 19, 1982.
Section 2.02. The principal on the Notes shall be payable on
October 15, 1984.
Section 2.03. The rate of interest on the Notes shall be 10 3/8%
per annum, payable on each Note from the April 15 or October 15, as the case may
be, next preceding the date of such Note to which interest on the Notes has been
paid or, if no interest has been paid on the Notes since the original issue
date, from October 15, 1982. Interest shall be payable semi-annually on April 15
and October 15 to the person in whose name each Note is registered at the close
of business on the last day of the month next preceding such April 15 or October
15, whether or not such day is a business day, for so long as the Notes are
outstanding, commencing on April 15, 1983. Interest payable on the Notes shall
be computed on the basis of a 360-day year of twelve 30-day months.
Section 2.04. The rate of interest payable on any overdue principal
of the Notes pursuant to Section 6.02 of the Indenture shall be 10 3/8% per
annum. Interest on any such overdue principal shall be computed on the basis of
a 360-day year of twelve 30-day months.
Section 2.05. The Places of Payment for the Notes
shall be the City of Chicago, Illinois and the City of New York,
New York. The Trustee and Morgan Guaranty Trust Company of New
York shall be the paying agents for the Notes.
Section 2.06. The Notes shall not be subject to redemption at any
time prior to maturity. The Company shall have no obligation to redeem, purchase
or repay the Notes pursuant to any sinking fund.
Section 2.07. The amount which shall be payable upon declaration of
acceleration of maturity pursuant to Section 6.01 of the Indenture or provable
in bankruptcy pursuant to Section 6.02 of the Indenture shall be the entire
principal amount of the Notes plus accrued interest thereon. Upon payment of
such amount following such acceleration or bankruptcy, all of the Company's
obligations in respect of payment of the principal of and interest on such Note
shall terminate.
Section 2.08. The Notes shall be issued in registered form, without
coupon, and shall be transferable as provided in Article Two of the Indenture.
Section 2.09. Notes of any authorized denomination shall be
exchangeable for a like aggregate principal amount of Notes of different
authorized denominations upon surrender of such Notes, with a request for such
exchange, at the designated office of the Trustee in the City of Chicago,
Illinois or at the designated office of the Authenticating Agent in the City of
New York, New York.
Section 2.10. The dates on which the Company shall provide
information regarding the Holders of the Notes to the Trustee pursuant to
Section 5.01 of the Indenture shall be April 15 and October 15 of every year,
commencing on April 15, 1983, for so long as any of the Notes are Outstanding.
Such information shall be current as of the previous March 31 or September 30,
as the case may be.
Section 2.11. Prior to due presentment for registration of transfer
of any Note, the Company, the Trustee, any Authenticating Agent, any paying
agent and any Debt Security registrar may deem and treat the Holder of such Note
as the absolute owner of such Note (whether or not such Note shall be overdue
and notwithstanding any notation of ownership or other writing thereon made by
anyone other than the Company, any Debt Security registrar or the Trustee) for
the purpose of receiving payment of or on account thereof and for all other
purposes; and neither the Company nor the Trustee nor any Authenticating Agent
nor any paying agent nor any Debt Security registrar shall be affected by any
notice to the contrary. All such payments so made to any such person, or upon
such person's order, shall be valid, and, to the extent of the sum or sums so
paid, effectual to satisfy and discharge the liability for moneys payable upon
any such Note.
Section 2.12. The Notes shall be in the form attached as Exhibit A
hereto.
IN WITNESS WHEREOF, GENERAL MILLS, INC. has caused this
Supplemental Indenture No. 3 to be signed, acknowledged and delivered by its
Chairman of the Board, Executive Vice President-Chief Financial Officer or Vice
President-Treasurer and its corporate seal to be affixed hereunto and the same
to be attested by its Secretary or Assistant Secretary; and CONTINENTAL ILLINOIS
NATIONAL BANK AND TRUST COMPANY OF CHICAGO has caused this Supplemental
Indenture No. 3 to be signed, acknowledged and delivered by one of its Vice
Presidents, and its seal to be affixed hereunto and the same to be attested by
one of its Trust Officers, all as of the day and year first written above.
GENERAL MILLS, INC.
[CORPORATE SEAL]
By: /s/ J.L. WEAVER
Attest: /s/ JAMES M. NEVILLE
Secretary
CONTINENTAL ILLINOIS
NATIONAL BANK AND TRUST COMPANY
OF CHICAGO,
as Trustee
[CORPORATE SEAL]
By: /s/ RICHARD L. LAVARNWAY
Second Vice President
Attest: /s/ L.M. HACKETT
2nd Vice President
STATE OF MINNESOTA
ss .:
COUNTY OF HENNEPIN
On the 14th day of October, in the year one thousand, nine hundred
eighty-two, before me appeared J.L. Weaver to me personally known, who, being by
me duly sown, did say that he resides at Minneapolis, Minnesota, that he is a
Vice President-Treasurer of GENERAL MILLS, INC., one of the corporations
described in and which executed the above instrument; that he knows the seal of
said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation, and that he signed his name thereto by like order.
IVY S. BERNHARDSON
NOTARY PUBLIC - MINNESOTA
HENNEPIN COUNTY
My Commission Expires Sept. 28, 1985
On the 18th day of October, in the year one thousand nine hundred
eighty-two, before me appeared Richard L. LaVarnway to me personally known, who,
being by me duly sworn, did say that he resides at 42 Campbell Dr., Glendale
Heights, IL that he is a 2nd Vice President of CONTINENTAL ILLINOIS NATIONAL
BANK AND TRUST COMPANY OF CHICAGO, one of the corporations described in and
which executed the above instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; the it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
DORIS J. BAILER
NOTARY PUBLIC, State of New York
No 24 - 0284525
Qualified in Kings County
Cert. filed in New York County
Commission Expires March 30, 1983
<PAGE>
GENERAL MILLS, INC.
SUPPLEMENTAL INDENTURE NO. 4
Dated as of July 8, 1987
A$100,000,000
14% Australian Dollar Notes Due July 27, 1990
Supplemental Indenture No. 4 dated as of July 8, 1987, between GENERAL
MILLS, INC., a corporation organized and existing under the laws of the State of
Delaware (hereinafter sometimes referred to as the "Company"), and CONTINENTAL
ILLINOIS NATIONAL BANK AND TRUST COMPANY OF CHICAGO, a national banking
association duly organized and existing under the laws of the United States of
America (hereinafter sometimes referred to as the "Trustee"),
W I T N E S S E T H:
The Company and the Trustee have executed and delivered an Indenture dated
as of July 1, 1982 (the "Indentures).
Section 10.01 of the Indenture provides for the Company, when authorized
by the Board of Directors, and the Trustee to enter into an indenture
supplemental to the Indenture to establish the form or terms of Debt Securities
of any series of Debt Securities as permitted by Sections 2.01 and 2.02 of the
Indenture and to cure any ambiguity or to correct or supplement any provision
contained in the Indenture or in any Supplemental Indenture which may be
defective or inconsistent with any other provision contained in the Indenture or
any Supplemental Indenture or to make such other provisions in regard to matters
or questions &rising under this Indenture as shall not adversely affect the
interest of any Holder.
Section 2.02 of the Indenture provides for Debt Securities of any Series to
be established pursuant to an indenture supplemental to the Indenture.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the series of
Debt Securities provided for herein, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of such series of Debt
Securities, as follows:
ARTICLE ONE
Relation to Indenture; Definitions.
Section 1.01. This Supplemental Indenture No. 4 constitutes
an integral part of the Indenture.
Section 1.02. For all purposes of this Supplemental Indenture:
(1) Capitalized teems used herein without definition shall have the
meanings specified in the Indenture;
(2) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this
Supplemental Indenture No. 4; and
(3) The terms "hereof", "herein", "hereby", "hereto", "hereunder" and
"herewith" refer to this Supplemental Indenture.
ARTICLE TWO
The Series of Notes
Section 2.01. There shall be a series of Debt Securities designated the
14% Australian Dollar Notes Due July 27, 1990 (the "Notes"). The Notes shall be
limited to One Hundred Million Australian Dollars (A$100,000,000) in aggregate
principal amount (except for the Notes authenticated and delivered upon
registration or transfer of, or in exchange for, or in lieu of other notes
pursuant to Sections 2.05, 2.06, 2.07, 3.04 or 10.04 of the Indenture). The
original issue date of the Notes shell be July 27, 1987.
Section 2.02. The principal of the Notes shall be payable on July 27,
1990.
Section 2.03. The rate of interest on the Notes shall be 14% per annum,
which interest shall be payable semi-annually on January 27 and July 27 for so
long as the Notes are outstanding, commencing on January 27, 1988. Interest
payable on the Notes shall be computed on the basis of 360-day year of twelve
30-day months. Interest shall accrue commencing on July 27, 1987. Interest so
payable shall be paid to the person in whose name the Notes are registered at
the close of business on the immediately preceding January 12 or July 12,
respectively.
Section 2.04. The rate of interest payable on any overdue principal of the
Notes pursuant to Section 6.02 of the Indenture shall be 14% per annum. Interest
on any such overdue principal shall be computed on the basis of a 360day year of
twelve 30-day months.
Section 2.05. The Place of Payment for the principal of the Notes shall be
Chicago, Illinois and New York, New York. Interest on the Notes will be paid by
check, draft, or wire, as specified. The Trustee shall be the paying agent for
the Notes.
Section 2.06. The Notes shall not be subject to redemption at any time
prior to maturity. The Company shall have no obligation to redeem, purchase or
repay the Notes pursuant to any sinking fund.
Section 2.07. The Notes shall be issued in registered form, without
coupons, in denominations of A$10,000 and integral multiples of A$10,000 in
excess thereof, and shall be transferable as provided in Article Two of the
Indenture.
Section 2.08. Notes of any authorized denomination shall be exchangeable
for a like aggregate principal amount of Notes of different authorized
denominations upon surrender of such Notes, with a request for such exchange, at
the designated office of the Trustee in the City of Chicago, Illinois.
Section 2.09. The principal of and interest on the Notes is payable by the
Company in Australian dollars. However, the Exchange Rate Agent wail convert &11
payments of principal of and interest on the Notes to U.S. dollars, unless the
Holder elects to receive such payments in Australian dollars as described below.
The U.S. dollar amount to be received by a Holder not electing to receive
Australian dollars will be based on the highest bid quotation received by the
Exchange Rate Agent from three recognized foreign exchange dealers (one of which
may be the Exchange Rate Agent) at approximately 11:00 a.m. New York City time
on the second Business Day preceding the applicable payment date for the
purchase by the quoting dealer of Australian dollars for U.S. dollars for
settlement on such payment date in the aggregate amount of Australian dollars
payable to all Holders receiving U.S. dollar payments (eg. Holders who have not
elected to receive Australian dollars) and at which the applicable dealer
commits to execute a contract. If such bid quotations are not available, payment
may be made in Australian dollars. All currency exchange costs will be borne by
the Holder by deductions from such payments. The Exchange Rate Agent shall be
appointed by the Company with the consent of the Trustee, which consent shall
not be unreasonably withheld.
Section 2.10. The Notes shell be in the form attached as Exhibit A hereto.
Section 2.11. All other terms in the Notes as set forth in Exhibit A.
Section 2.12. The term "Business Day" as defined in Section 1.01 of the
Indenture, for the purposes of this Series of Notes, shall mean a day which is
not a Saturday or a Sunday and which is neither & legal holiday nor a day on
which banking institutions are authorized or required by law or regulation to
close in Sydney, Australia; London, England; New York, New York; or Chicago,
Illinois. If a date fixed for payment of interest or principal of the Notes is
not a Business Day, then payment of interest or principal shall be made on the
next succeeding Business Day.
ARTICLE THREE
Amendments to the Indenture
Section 3.01. Section 2.02 of the Indenture is amended to
add the following subsection: "(14) if other than United States
dollars, the currency or currencies in which the Debt Securities
shall be issuable."
Section 3.02. The term "Business Day" in Article One, Section 1.01 of the
Indenture is amended to read as follows: "The term 'Business Day' means any day
other than a day on which banking institutions in the City of Chicago, Illinois,
or the applicable Place of Payment are authorized or required by law to close,
and as may be otherwise specified in a supplemental indenture establishing the
terms of & particular series of Debt Securities."
Section 3.03. Article Eight is amended to add the following as new Section
8.06: "Whenever this Indenture provides for (i) any action by, or the
determination of any of the rights of, Holders of Securities of any series in
which not all of such Debt Securities are denominated in the same coin or
currency, or (ii) any distribution to Holders of Debt Securities, unless
otherwise specified as contemplated by Section 3.01 for Debt Securities of such
series. any amount in respect of any Debt Security denominated in & coin or
currency other than United States dollars shall be treated for any such action
or distribution as that amount of United States dollars that could be obtained
for such amount on such reasonable basis of exchange and as of the record date
for such action, determination of rights or distribution (or, if there shall be
no applicable record date, such other date reasonably proximate to the date of
such action, determination of rights or distribution) as the Company may specify
in a written notice to the Trustee or, in absence of such written notice, as the
Trustee may determine."
IN WITNESS WHEREOF, GENERAL MILLS, INC. has caused this Supplemental
Indenture No. 4 to be signed, acknowledged and delivered by its Chairman of the
Board, Vice Chairman of the Board and Chief Financial Officer or Senior Vice
President-Treasurer and its corporate seal to be affixed hereto and the same to
be attested by its Secretary or an Assistant Secretary; and CONTINENTAL ILLINOIS
NATIONAL BANK AND TRUST COMPANY OF CHICAGO has caused this Supplemental
Indenture No. 4 to be signed, acknowledged and delivered by one of its Vice
Presidents, and its seal to be affixed hereunto and the same to be attested by
one of its Second Vice Presidents, all as of the day and year first written
above.
GENERAL MILLS, INC.
[CORPORATE SEAL]
By: /s/ D.E. KELBY
Name: D.E. Kelby
Title: Senior Vice President and
Treasurer
Attest: /s/ B.L. ROSENBERG
CONTINENTAL ILLINOIS
NATIONAL BANK AND TRUST COMPANY
OF CHICAGO,
as Trustee
[CORPORATE SEAL]
By: /s/ THOMAS H. RANSOM
Name: Thomas H. Ransom
Title: Vice President
Attest: /s/ LAWRENCE M. HACKETT
<PAGE>
GENERAL MILLS , INC.
SUPPLEMENTAL INDENTURE NO. 5
Dated as of April 1, 1989
Supplemental Indenture No. 5 dated as of April 1, 1989, between
GENERAL MILLS, INC., a corporation organized and existing under the laws of the
State of Delaware (hereinafter referred to as the "Company"), and CONTINENTAL
BANK N.A., a national banking association duly organized and existing under the
laws of the United States of America (hereinafter referred to as the "Trustee").
W I T N E S S E T H :
The Company and the Trustee have executed and delivered an
Indenture dated as of July 1, 1982 (the "Indenture").
The Company desires to amend the Indenture to provide for the
issuance of Debt Securities of a series on a continuous basis and with differing
terms and to expressly provide that the Debt Securities of such series may be
denominated in currencies other than the currency of the United States of
America or may provide that the amount of payments of principal of and any
premium or interest thereon may be determined with reference to an index.
Section 10.01 of the Indenture provides for the Company, when
authorized by the Board of Directors, and the Trustee to enter into an indenture
supplemental to the Indenture to amend such Indenture by creating such
provisions as shall not adversely affect the interests of any Holder.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE
WITNESSETH:
For and in consideration of the premises and the purchase of the
Debt Securities by the Holders thereof, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of Debt Securities or of
such series thereof, as follows:
ARTICLE ONE
RELATION TO INDENTURE; DEFINITIONS
SECTION 1.01. This Supplemental Indenture No. 5
constitutes an integral part of the Indenture.
SECTION 1.02. For all purposes of this Supplemental Indenture:
(1) Capitalized terms used herein without definition shall have the
meanings specified in the Indenture;
(2) All references herein to Articles and Sections, unless
otherwise specified, refer to the corresponding Articles and Sections of
this Supplemental Indenture No. 5; and
(3) The terms "hereof", "herein", "hereby", "hereto", "hereunder"
and "herewith" refer to this Supplemental Indenture.
ARTICLE TWO
PROVISIONS APPLICABLE EXCLUSIVELY TO
THE SERIES OF MEDIUM-TERM NOTES
SECTION 2.01. There shall be a series of Debt Securities designated
the "Medium-Term Notes" (the "Notes"). The Notes shall be limited to an
aggregate principal amount resulting in not more than U.S. $229,620,000 of
proceeds to the Company (or the equivalent thereof, determined as of the
respective dates of issuance of Notes, in any other currency or currencies) and
shall be issued at any time or from time to time.
SECTION 2.02. Each Note shall have the particular terms (which need
not be substantially identical to the terms of any other Notes) established in
accordance with or as contemplated by this Section 2.02. Each fixed rate Note
("Fixed Rate Note") shall be in substantially the form attached as Exhibit A
hereto, and each floating rate Note ("Floating Rate Note") shall be in
substantially the form attached as Exhibit B hereto.
Each of the Chairman of the Board, the President, the Chief
Financial Officer and the Treasurer (each an "Authorized Officer") may, at any
time and from time to time, on behalf of the Company, authorize the issuance of
Notes and in connection therewith establish, or, if all of the Notes of such
series may not be originally issued at one time, to the extent deemed
appropriate prescribe the manner of determining within any limitations
established by such Authorized Officer (subject in either case to the
limitations set forth in this Supplemental Indenture and the Indenture), the
following:
(1) the date or dates on which the principal and
premium, if any, of the Notes is payable;
(2) the rate or rates (or method by which determined) at which the
Notes shall bear interest, if any, the date or dates from which such
interest shall accrue, the interest payment dates on which such interest
shall be payable and, in the case of registered Notes, the record dates
for the determination of Holders to whom such interest is payable;
(3) if an Original Issue Discount Security, the Yield
to Maturity;
(4) the price or prices at which, the period or periods within which
and the terms and conditions upon which Notes may be redeemed, in whole or
in part, at the option of the Company, pursuant to any sinking fund or
otherwise;
(5) the obligation, if any, of the Company to redeem, purchase or
repay Notes pursuant to any sinking fund or analogous provisions or at the
option of a Holder thereof and the price or prices at which and the period
or periods within which and the terms and conditions upon which Notes
shall be redeemed, purchased or repaid, in whole or in part, pursuant to
such obligation;
(6) if other than denominations of $100,000 and integral multiples
of $1,000 in excess thereof (or, in the case of any Note denominated in
other than U.S. dollars, the amount of the Specified Currency (as defined
below) for such Note which is equivalent, at the noon buying rate in The
City of New York for cable transfers for such Specified Currency on the
first Business Day in The City of New York and the country issuing such
Specified Currency (or, in the case of European Currency Units, in
Brussels, Belgium) next preceding the date on which the Company accepts
the offer to purchase such Note, to U.S. $100,000 (rounded down to an
integral multiple of 10,000 units of such Specified Currency) and any
greater amount that is an integral multiple of 10,000 units of such
Specified Currency), the denominations in which Notes shall be issuable;
(7) if the amount of payments of principal of and any premium or
interest on the Notes may be determined with reference to an index, the
manner in which such amounts shall be determined;
(8) if other than the principal amount thereof, the portion of the
principal amount of Notes which shall be payable upon declaration of
acceleration of the maturity thereof pursuant to Section 6.01 of the
Indenture or provable in bankruptcy pursuant to Section 6.02 of the
Indenture;
(9) any Events of Default with respect to the Notes, if not set
forth in the Indenture;
(10) whether the Notes shall be issued in registered or bearer form,
with or without coupons;
(11) whether the Notes shall be issued in whole or in part in the
form of one or more Global Notes and, in such case, the Depositary for
such Global Note or Notes, which Depositary must be a clearing agency
registered under the Securities Exchange Act of 1934;
(12) if other than United States dollars, the currency or
currencies, including composite currencies, in which payment of the
principal of and any premium and interest on the Notes shall be payable
(the "Specified Currency"); and
(13) any other terms of the Notes (which terms shall not be
inconsistent with the provisions of this Supplemental Indenture or the
Indenture).
In connection with the Notes, the officers of the Company specified
in the Indenture may execute and deliver one or more Officers' Certificates
setting forth, or, if all of the Notes may not be originally issued at one time,
to the extent deemed appropriate describing the manner of determining, the
foregoing terms of the Notes, established or prescribed, as the case may be, in
accordance with the foregoing.
SECTION 2.03. The Places of Payment for the principal of the Notes
shall be the City of Chicago, Illinois and The City of New York, New York.
Interest, if any, on the Notes will be paid by check, draft or wire, as
specified in the terms thereof. The Trustee shall be the paying agent ("Paying
Agent") for the Notes.
SECTION 2.04. Unless otherwise provided in the terms of a
particular Note, definitive Notes of any authorized denomination shall be
exchangeable for a like aggregate principal amount of Notes denominated in the
same Specified Currency and bearing interest (if any) at the same rate or having
the same Yield to Maturity and Stated Maturity and of different authorized
denominations upon surrender of such Notes with a request for such exchange at
the designated office of the Trustee in the City of Chicago, Illinois or in the
Borough of Manhattan, The City of New York.
SECTION 2.05. Unless otherwise specified in a particular Note,
payments of principal of (and premium, if any) and interest on each Note will be
made in the applicable Specified Currency, provided, however, that payments of
principal (and premium, if any) and interest on Notes denominated in other than
U.S. dollars will nevertheless be made in U.S. dollars (i) at the option of the
Holders thereof under the procedures described in the two following paragraphs
and (ii) at the option of the Company in the case of imposition of exchange
controls or other circumstances beyond the control of the Company as described
below in this Section 2.05. If specified in a particular Note, the amount of
principal payable on such Note will be determined by reference to an index or
formula described therein.
Unless otherwise specified in the terms of a Note, and except as
provided in the next paragraph, payments of interest and principal (and premium,
if any) with respect to any Note denominated in other than U.S. dollars will be
made in U.S. dollars if the registered Holder of such Note on the relevant
Regular Record Date or at maturity, as the case may be, has transmitted a
written request for such payment in U.S. dollars to the Trustee at its Corporate
Trust Office or agency in the City of Chicago, Illinois or in The City of New
York, New York on or prior to such Regular Record Date or the date 15 days prior
to maturity, as the case may be. Such request may be in writing (mailed or hand
delivered) or by cable or telex or, if promptly confirmed in writing, by other
form of facsimile transmission. Any such request made with respect to any Note
by a registered Holder will remain in effect with respect to any further
payments of interest and principal (and premium, if any) with respect to such
Note payable to such Holder, unless such request is revoked on or prior to the
relevant Regular Record Date or the date 15 days prior to maturity, as the case
may be.
Unless otherwise provided in the applicable Officers' Certificate,
Continental Bank N.A. will be the Exchange Rate Agent (the "Exchange Rate
Agent") with respect to the Notes.
Unless otherwise indicated in the terms of a particular Note, the
"Regular Record Date" with respect to any Floating Rate Note shall be the date
15 calendar days prior to each Interest Payment Date, whether or not such date
shall be a Business Day, and the "Regular Record Date" with respect to any Fixed
Rate Note shall be the March 1 and September 1 next preceding the March 15 and
September 15 Interest Payment Dates.
Unless otherwise indicated in the terms of a particular Note and
except as provided below, interest will be payable, in the case of Floating Rate
Notes which reset weekly, on the third Wednesday of March, June, September and
December of each year: in the case of Floating Rate Notes which reset monthly,
on the third Wednesday of each month or on the third Wednesday of March, June,
September and December of each year (as respectively indicated in such Notes);
in the case of Floating Rate Notes which reset quarterly, on the third Wednesday
of March, June, September and December of each year; in the case of Floating
Rate Notes which reset semi-annually, on the third Wednesday of the two months
of each year specified in such Notes; and in the case of Floating Rate Notes
which reset annually, on the third Wednesday of the month specified in such
Notes (each an "Interest Payment Date"), and in each case, at maturity.
Payments of interest on any Fixed Rate Note or Floating Rate Note
with respect to any Interest Payment Date will include interest accrued to but
excluding such Interest Payment Date; provided, however, that if the Interest
Reset Dates (as defined in a particular Note) with respect to any Floating Rate
Note are weekly, interest payable on such Note on any Interest Payment Date,
other than interest payable on the date on which principal on such Note is
payable, will include interest accrued to but excluding the day following the
next preceding Regular Record Date.
With respect to a Floating Rate Note, accrued interest from the
date of issue or from the last date to which interest has been paid shall be
calculated by multiplying the face amount of such Floating Rate Note by an
accrued interest factor. Such accrued interest factor shall be computed by
adding the interest factor calculated for each day from the date of issue, or
from the last date to which interest has been paid, to but excluding the date
for which accrued interest is being calculated. The interest factor for a
Floating Rate Note (expressed as a decimal) for each such day shall be computed
either (i) by dividing the interest rate (expressed as a decimal) applicable to
such date by 360 or (ii) by the actual number of days in the year, as specified
in such Note. Interest on Fixed Rate Notes will be computed on the basis of a
360-day year of twelve 30-day months.
SECTION 2.06. For the purposes of the Notes and this Section 2.06,
the term "Agent Member" means a member of, or participant in, a Depositary; the
term "Depositary" means, with respect to Notes issuable or issued in whole or in
part in the form of one or more Global Notes, the Person designated as
Depositary by the Company pursuant to Section 2.02 hereof, and if at any time
there is more than one such Person, "Depositary" as used with respect to the
Notes shall mean the respective Depositary with respect to particular Notes; and
the term "Global Note" means a global certificate evidencing all or part of the
series of Notes, issued to the Depositary for the series or such portion of the
series, and registered in the name of such Depositary or its nominee.
Notwithstanding Section 2.05 of the Indenture, except as otherwise
specified as contemplated by Section 2.02 hereof, any Global Note shall be
exchangeable only as provided in this paragraph. A Global Note shall be
exchangeable pursuant to this Section if (x) the Depositary notifies the Company
that it is unwilling or unable to continue as Depositary for such Global Note or
if at any time the Depositary ceases to be a clearing agency registered under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (y) the
Company in its sole discretion determines that all Global Notes then outstanding
hereunder and under the Indenture shall be exchangeable for definitive Notes in
registered form or (z) an Event of Default with respect to the Notes represented
by such Global Note has occurred and is continuing. Any Global Note that is
exchangeable pursuant to the preceding sentence shall be exchangeable for
definitive Notes in registered form, bearing interest (if any) at the same rate
or pursuant to the same formula, having the same date of issuance, redemption
provisions, if any, Specified Currency, Stated Maturity and other terms and of
differing denominations aggregating a like amount. Such definitive Notes shall
be registered in the names of the owners of the beneficial interests in such
Global Note as such names are from time to time provided by the relevant
participants in the Depositary holding such Global Note (as such participants
are identified from time to time by such Depositary).
No Global Note may be transferred except as a whole by a nominee of
the Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor of the Depositary or a nominee of
such successor. Except as provided above, owners solely of beneficial interests
in a Global Note shall not be entitled to receive physical delivery of Notes in
definitive form and will not be considered the Holders thereof for any purpose
under the Indenture or this Supplemental Indenture.
Any Global Note that is exchangeable pursuant to the preceding
paragraph shall be exchangeable for Notes issuable in denominations of $100,000
and integral multiples of $1,000 in excess thereof and registered in such names
as the Depositary that is the Holder of such Global Note shall direct.
In the event that a Global Note is surrendered for redemption in
part pursuant to Section 3.04 of the Indenture, the Company shall execute, and
the Trustee shall authenticate and deliver to the Depositary for such Global
Note, without service charge, a new Global Note in a denomination equal to and
in exchange for the unredeemed portion of the principal of the Global Note so
surrendered.
The Trustee shall fix a record date for the purpose of determining
the Persons entitled to waive any past default hereunder or the Persons entitled
to consent to any indenture supplemental to the Indenture. If a record date is
fixed, the Holders on such record date, or their duly designated proxies, and
only such Persons, shall be entitled to waive any default hereunder, or to
retract any such waiver previously given, or to consent to such supplemental
indenture or to revoke any such consent previously given, as the case may be,
whether or not such Holders remain Holders after such record date. No such
waiver or consent shall be valid or effective for more than 90 days after such
record date.
The Agent Members shall have no rights under the Indenture or this
Supplemental Indenture with respect to any Global Note held on their behalf by a
Depositary, and such Depositary may be treated by the Company, the Trustee, and
any agent of the Company or the Trustee as the owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee, or any Agent of the Company or the Trustee, from
giving effect to any written certification, proxy or other authorization
furnished by a Depositary or impair, as between a Depositary and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a Holder of any Note, including without limitation the granting of
proxies or other authorization of participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action which
a Holder is entitled to give or take under the Indenture.
SECTION 2.07. In determining whether the Holders of the requisite
principal amount of the Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver under the Indenture, the
principal amount of a Note denominated in a foreign currency or currencies shall
be the U.S. dollar equivalent, determined on the date of original issuance of
such Note, of the principal amount (or, in the case of a Note which is an
Original Issue Discount Security, the U.S. dollar equivalent on the date of the
original issuance of such Note of the amount of the principal thereof that would
be due and payable as of the date of such determination upon a declaration of
acceleration of the maturity thereof pursuant to Section 6.01 of the Indenture)
of such Note; provided, however, that if such Holders are, pursuant to Section
6.06 of the Indenture, acting together with the Holders of other Debt Securities
as a single class in giving any such request, demand, authorization, direction,
notice, consent or waiver, the provisions of Section 8.06 of the Indenture shall
instead govern such a determination with respect to such Notes, the provisions
of this Section 2.07 notwithstanding.
SECTION 2.08. References in the Indenture to the "Yield to
Maturity" of Debt Securities shall be deemed, solely with respect to the Notes,
to refer to the respective yields to maturity, calculated at the respective
times of issuance of the particular Notes or, if applicable, at the respective
most recent redeterminations of interest on such respective Notes and calculated
in accordance with accepted financial practice. References in Article VI of the
Indenture to the "rate" or "rate of interest" of Debt Securities shall be
deemed, solely with respect to the Notes, to refer to the respective rates or
rates of interest of the particular Notes.
SECTION 2.09. Notwithstanding the provisions of Sections 2.03 and
14.06 of the Indenture, if all Notes are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate and the
Opinion of Counsel otherwise required pursuant to Section 14.06 or the written
order of the Company otherwise required pursuant to Section 2.03 at or prior to
the time of authentication of each Note if such documents are delivered at or
prior to the
SECTION 2.10. If any Debt Securities described in subsections (a),
(b) or (c)(i) of Section 12.01 of the Indenture are Notes which are denominated
in a currency or currencies other than United States dollars, then in order to
satisfy the deposit conditions in subsection (c)(ii) of Section 12.01 with
respect to any such Notes, the Company shall deposit or cause to be deposited as
specified in Section 12.01 the required amount in the currency or currencies in
which such Notes are denominated or in direct obligations of the sovereign
nation or sovereign nations issuing such currency or currencies and denominated
in such currency or currencies.
ARTICLE THREE
AMENDMENT TO INDENTURE
SECTION 3.01. Section 4.01 of the Indenture is hereby amended to
read in its entirety:
SECTION 4.01. The Company covenants and agrees for the benefit of the
Holders of each series of Debt Securities that it will duly and punctually pay
or cause to be paid the principal of and premium, if any, and interest on the
Debt Securities of that series at the places, at the respective times and in the
manner provided in such Debt Securities. Unless otherwise provided as
contemplated by Section 2.02 with respect to any series of Debt Securities, each
installment of interest on interest-bearing Registered Debt Securities of any
series may be paid by mailing checks for such interest payable to or upon the
written order of the Holders of such Registered Debt Securities entitled thereto
as they shall appear on the Debt Security Register. The interest on Coupon Debt
Securities shall be payable only upon presentation and surrender of the several
coupons for such interest installments as are evidenced thereby as they
severally mature. The interest on any temporary bearer Debt Securities shall be
paid, as to the installments of interest evidenced by coupons attached thereto,
if any, only upon presentation and surrender thereof, and, as to the other
installments of interest, if any, only upon presentation of such Debt Securities
for notation thereon of the payment of such interest. Unless otherwise provided
as contemplated by Section 2.02 with respect to any series of Debt Securities,
the interest on Registered Debt Securities shall be payable only to or upon the
written order of the Holders thereof."
IN WITNESS WHEREOF, GENERAL MILLS, INC. has caused this
Supplemental Indenture No. 5 to be signed, acknowledged and delivered by its
Chairman of the Board, President, Vice Chairman, Chief Financial and
Administrative Officer or Senior Vice President-Treasurer and its corporate seal
to be affixed hereunto and the same to be attested by its Secretary or Assistant
Secretary; and CONTINENTAL BANK N.A. has caused this Supplemental Indenture No.
5 to be signed, acknowledged and delivered by one of its Vice Presidents, and
its seal to be affixed hereunto and the same to be attested by one of its Trust
Officers, all as of the day and year first written above.
GENERAL MILLS, INC.
[CORPORATE SEAL]
By: /s/ D.E. KELBY
Title: Senior Vice President,
Treasurer
Attest: /s/ IVY S. BERNHARDSON
Assistant Secretary
CONTINENTAL BANK N.A.,
as Trustee
[CORPORATE SEAL]
By: /s/
Title: Vice President
Attest: /s/
Trust Officer
<PAGE>
GENERAL MILLS, INC.
SUPPLEMENTAL INDENTURE NO. 6
Dated as of November 8, 1990
Supplemental Indenture No. 6 dated as of November 8, 1990, between
GENERAL MILLS, INC., a corporation organized and existing under the laws of the
State of Delaware (hereinafter referred to as the "Company"), and CONTINENTAL
BANK N.A., a national banking association duly organized and existing under the
laws of the United States of America (hereinafter referred to as the "Trustee").
W I T N E S S E T H :
The Company and the Trustee have executed and delivered an Indenture
dated as of July 1, 1982 (the "Indenture").
The Company desires to amend the Indenture to provide for the issuance of
Debt Securities of a series on a continuous basis and with differing terms and
to expressly provide that the Debt Securities of such series may be denominated
in currencies other than the currency of the United States of America or may
provide that the amount of payments of principal of and any premium or interest
thereon may be determined with reference to an index.
Section 10.01 of the Indenture provides for the Company, when authorized
by the Board of Directors, and the Trustee to enter into an indenture
supplemental to the Indenture to amend such Indenture by creating such
provisions as shall not adversely affect the interests of any Holder.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Debt
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of Debt Securities or of such
series thereof, as follows:
ARTICLE ONE
RELATION TO INDENTURE; DEFINITIONS
SECTION 1.01. This Supplemental Indenture No. 6
constitutes an integral part of the Indenture.
SECTION 1.02. For all purposes of this Supplemental
Indenture:
(1)Capitalized terms used herein without definition shall have the
meanings specified in the Indenture;
(2)All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this
Supplemental Indenture No. 6; and
(3)The terms "hereof," "herein," "hereby," "hereto," "hereunder," and
"herewith" refer to this Supplemental Indenture.
ARTICLE TWO
PROVISIONS APPLICABLE EXCLUSIVELY TO
THE SERIES OF MEDIUM-TERM NOTES
SECTION 2.01. There shall be a series of Debt Securities designated the
"Medium-Term Notes - Series B" (the "Notes"). The Notes shall be limited to an
aggregate principal amount resulting in not more than U.S. $300,000,000 of
proceeds to the Company (or the equivalent thereof, determined as of the
respective dates of issuance of Notes, in any other currency or currencies) and
shall be issued at any time or from time to time.
SECTION 2.02. Each Note shall have the particular terms (which need not
be substantially identical to the terms of any other Notes) established in
accordance with or as contemplated by this Section 2.02. Each fixed rate Note
("Fixed Rate Note") shall be in substantially the form attached hereto as
Exhibit A; each floating rate Note ("Floating Rate Note") shall be in
substantially the form attached hereto as Exhibit B; and each indexed Note
("Indexed Note") shall be in substantially the form attached hereto as Exhibit
C.
Each of the Chairman of the Board, the President, the Chief Financial
Officer and the Treasurer (each an "Authorized Officer") may, at any time and
from time to time, on behalf of the Company, authorize the issuance of Notes and
in connection therewith establish, or, if all of the Notes of such series may
not be originally issued at one time, to the extent deemed appropriate prescribe
the manner of determining within any limitations established by such Authorized
Officer (subject in either case to the limitations set forth in this
Supplemental Indenture and the Indenture), the following:
(1) the date or dates on which the principal and premium,
if any, of the Notes is payable;
(2) the rate or rates (or method by which determined) at which the Notes
shall bear interest, if any, the date or dates from which such
interest shall accrue, the interest payment dates on which such
interest shall be payable and, in the case of registered Notes, the
record dates for the determination of Holders to whom such interest
is payable;
(3) if an Original Issue Discount Security, the Yield to
Maturity;
(4)the price or prices at which, the period or periods within which and
the terms and conditions upon which Notes may be redeemed, in whole
or in part, at the option of the Company, pursuant to any sinking
fund or otherwise;
(5)the obligation, if any, of the Company to redeem, purchase or repay
Notes pursuant to any sinking fund or analogous provisions or at the
option of a Holder thereof and the price or prices at which and the
period or periods within which and the terms and conditions upon
which Notes shall be redeemed, purchased or repaid, in whole or in
part, pursuant to such obligation;
(6)if other than denominations of $100,000 and integral multiples of
$1,000 in excess thereof (or, in the case of any Note denominated in
other than U.S. dollars, the amount of the Specified Currency (as
defined below) for such Note which is equivalent, at the noon buying
rate in The City of New York for cable transfers for such Specified
Currency on the first Business Day in The City of New York and the
country issuing such Specified Currency (or, in the case of European
Currency Units, in Luxemborg) next preceding the date on which the
Company accepts the offer to purchase such Note, to U.S. $100,000
(rounded down to an integral multiple of 10,000 units of such
Specified Currency) and any greater amount that is an integral
multiple of 10,000 units of such Specified Currency), the
denominations in which Notes shall be issuable;
(7)if the amount of payments of principal of and any premium or
interest on the Notes may be determined with reference to an index,
the manner in which such amounts shall be determined;
(8)if other than the principal amount thereof, the portion of the
principal amount of Notes which shall be payable upon declaration of
acceleration of the maturity thereof pursuant to Section 6.01 of the
Indenture or provable in bankruptcy pursuant to Section 6.02 of the
Indenture;
(9)any Events of Default with respect to the Notes, if not set forth in
the Indenture;
(10) whether the Notes shall be issued in registered or bearer form,
with or without coupons;
(11) whether the Notes shall be issued in whole or in part in the form
of one or more Global Notes and, in such case, the Depositary for
such Global Note or Notes, which Depositary must be a clearing agency
registered under the Securities Exchange Act of 1934, as amended (the
"Exchange Act");
(12) if other than United States dollars, the currency or currencies,
including composite currencies, in which payment of the principal of
and any premium and interest on the Notes shall be payable (the
"Specified Currency"); and
(13) any other terms of the Notes (which terms shall not be inconsistent
with the provisions of this Supplemental Indenture or the Indenture).
In connection with the Notes, the officers of the Company specified in
the Indenture may execute and deliver one or more Officers' Certificates setting
forth, or, if all of the Notes may not be originally issued at one time, to the
extent deemed appropriate describing the manner of determining, the foregoing
terms of the Notes, established or prescribed, as the case may be, in accordance
with the foregoing.
SECTION 2.03. The Places of Payment for the principal of the Notes shall
be the City of Chicago, Illinois and The City of New York, New York. Interest,
if any, on the Notes will be paid by check, draft or wire, as specified in the
terms thereof. The Trustee shall be the paying agent ("Paying Agent") for the
Notes.
SECTION 2.04. Unless otherwise provided in the terms of a particular
Note, definitive Notes of any authorized denomination shall be exchangeable for
a like aggregate principal amount of Notes denominated in the same Specified
Currency and bearing interest (if any) at the same rate or having the same Yield
to Maturity and Stated Maturity and of different authorized denominations upon
surrender of such Notes with a request for such exchange at the designated
office of the Trustee in the City of Chicago, Illinois or in the Borough of
Manhattan, The City of New York.
SECTION 2.05. Unless otherwise specified in a particular Note, payments
of principal of (and premium, if any) and interest on each Note will be made in
the applicable Specified Currency; provided, however, that payments of principal
(and premium, if any) and interest on Notes denominated in other than U.S.
dollars will nevertheless be made in U.S. dollars (i) at the option of the
Holders thereof under the procedures described in the two following paragraphs
and (ii) at the option of the Company in the case of imposition of exchange
controls or other circumstances beyond the control of the Company as described
below in this Section 2.05. If specified in a particular Note, the amount of
principal payable on such Note will be determined by reference to an index or
formula described therein.
Unless otherwise specified in the terms of a Note, and except as
provided in the next paragraph, payments of interest and principal (and premium,
if any) with respect to any Note denominated in other than U.S. dollars will be
made in U.S. dollars if the registered Holder of such Note on the relevant
Regular Record Date or at maturity, as the case may be, has transmitted a
written request for such payment in U.S. dollars to the Trustee at its Corporate
Trust Office or agency in the City of Chicago, Illinois or in The City of New
York, New York on or prior to such Regular Record Date or the date 15 days prior
to maturity, as the case may be. Such request may be in writing (mailed or hand
delivered) or by cable or telex or, if promptly confirmed in writing, by other
form of facsimile transmission. Any such request made with respect to any Note
by a registered Holder will remain in effect with respect to any further
payments of interest and principal (and premium, if any) with respect to such
Note payable to such Holder, unless such request is revoked on or prior to the
relevant Regular Record Date or the date 15 days prior to maturity, as the case
may be.
Unless otherwise provided in the applicable Officers' Certificate,
Continental Bank N.A. will be the Exchange Rate Agent (the "Exchange Rate
Agent") with respect to the Notes.
Unless otherwise indicated in the terms of a particular Note, the
"Regular Record Date" with respect to any Floating Rate Note shall be the date
15 calendar days prior to each Interest Payment Date, whether or not such date
shall be a Business Day, and the "Regular Record Date" with respect to any Fixed
Rate Note shall be the March 1 and September 1 next preceding the March 15 and
September 15 Interest Payment Dates.
Unless otherwise indicated in the terms of a particular Note and except
as provided below, interest will be payable, in the case of Floating Rate Notes
which reset weekly, on the third Wednesday of March, June, September and
December of each year; in the case of Floating Rate Notes which reset monthly,
on the third Wednesday of each month on the third Wednesday of March, June,
September and December of each year (as respectively indicated in such Notes);
in the case of Floating Rate Notes which reset quarterly, on the third Wednesday
of March, June, September and December of each year; in the case of Floating
Rate Notes which reset semi-annually, on the third Wednesday of the two months
of each year specified in such Notes; and in the case of Floating Rate Notes
which reset annually, on the third Wednesday of the month specified in such
Notes (each an "Interest Payment Date"), and in each case, at maturity.
Payments of interest on any Fixed Rate Note or Floating Rate Note with
respect to any Interest Payment Date will include interest accrued to but
excluding such Interest Payment Date; provided, however, that if the Interest
Reset Dates (as defined in a particular Note) with respect to any Floating Rate
Note are weekly, interest payable on such Note on any Interest Payment Date,
other than interest payable on the date on which principal on such Note is
payable, will include interest accrued to but excluding the day following the
next preceding Regular Record Date.
With respect to a Floating Rate Note, accrued interest from the date of
issue or from the last date to which interest has been paid shall be calculated
by multiplying the face amount of such Floating Rate Note by an accrued interest
factor. Such accrued interest factor shall be computed by adding the interest
factor calculated for each day from the date of issue, or from the last date to
which interest has been paid, to but excluding the date for which accrued
interest is being calculated. The interest factor for a Floating Rate Note
(expressed as a decimal) for each such day shall be computed either (i) by
dividing the interest rate (expressed as a decimal) applicable to such date by
360 or (ii) by the actual number of days in the year, as specified in such Note.
Interest on Fixed Rate Notes will be computed on the basis of a 360-day year of
twelve 30-day months.
SECTION 2.06. For the purposes of the Notes and this Section 2.06, the
term "Agent Member" means a member of, or participant in, a Depositary; the term
"Depositary" means, with respect to Notes issuable or issued in whole or in part
in the form of one or more Global Notes, the Person designated as Depositary by
the Company pursuant to Section 2.02 hereof, and if at any time there is more
than one such Person, "Depositary" as used with respect to the Notes shall mean
the respective Depositary with respect to particular Notes; and the term "Global
Note" means a global certificate evidencing all or part of the series of Notes,
issued to the Depositary for the series or such portion of the series, and
registered in the name of such Depositary or its nominee.
Notwithstanding Section 2.05 of the Indenture, except as otherwise
specified as contemplated by Section 2.02 hereof, any Global Note shall be
exchangeable only as provided in this paragraph. A Global Note shall be
exchangeable pursuant to this Section if (x) the Depositary notifies the Company
that it is unwilling or unable to continue as Depositary for such Global Note or
if at any time the Depositary ceases to be a clearing agency registered under
the Exchange Act, (y) the Company in its sole discretion determines that all
Global Notes then outstanding hereunder and under the Indenture shall be
exchangeable for definitive Notes in registered form or (z) an Event of Default
with respect to the Notes represented by such Global Note has occurred and is
continuing. Any Global Note that is exchangeable pursuant to the preceding
sentence shall be exchangeable for definitive Notes in registered form, bearing
interest (if any) at the same rate or pursuant to the same formula, having the
same date of issuance, redemption provisions, if any, Specified Currency, Stated
Maturity and other terms and of differing denominations aggregating a like
amount. Such definitive Notes shall be registered in the names of the owners of
the beneficial interests in such Global Note as such names are from time to time
provided by the relevant participants in the Depositary holding such Global Note
(as such participants are identified from time to time by such Depositary.)
No Global Note may be transferred except as a whole by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor of the Depositary or a nominee of
such successor. Except as provided above, owners solely of beneficial interests
in a Global Note shall not be entitled to receive physical delivery of Notes in
definitive form and will not be considered the Holders thereof for any purpose
under the Indenture or this Supplemental Indenture.
Any Global Note that is exchangeable pursuant to the preceding paragraph
shall be exchangeable for Notes issuable in denominations of $100,000 and
integral multiples of S1,000 in excess thereof and registered in such names as
the Depositary that is the Holder of such Global Note shall direct.
In the event that a Global Note is surrendered for redemption in part
pursuant to Section 3.04 of the Indenture, the Company shall execute, and the
Trustee shall authenticate and deliver to the Depositary for such Global Note,
without service charge, a new Global Note in a denomination equal to and in
exchange for the unredeemed portion of the principal of the Global Note so
surrendered.
The Trustee shall fix a record date for the purpose of determining the
Persons entitled to waive any past default hereunder or the Persons entitled to
consent to any indenture supplemental to the Indenture. If a record date is
fixed, the Holders on such record date, or their duly designated proxies, and
only such Persons, shall be entitled to waive any default hereunder, or to
retract any such waiver previously given, or to consent to such supplemental
indenture or to revoke any such consent previously given, as the case may be,
whether or not such Holders remain Holders after such record date. No such
waiver or consent shall be valid or effective for more than 90 days after such
record date.
The Agent Members shall have no rights under the Indenture or this
Supplemental Indenture with respect to any Global Note held on their behalf by a
Depositary, and such Depositary may be treated by the Company, the Trustee, and
any agent of the Company or the Trustee as the owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee, or any Agent of the Company or the Trustee, from
giving effect to any written certification, proxy or other authorization
furnished by a Depositary or impair, as between a Depositary and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a Holder of any Note, including without limitation the granting of
proxies or other authorization of participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action which
a Holder is entitled to give or take under the Indenture.
SECTION 2.07. In determining whether the Holders of the requisite
principal amount of the Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver under the Indenture, the
principal amount of a Note denominated in a foreign currency or currencies shall
be the U.S. dollar equivalent, determined on the date of original issuance of
such Note, of the principal amount (or, in the case of a Note which is an
Original Issue Discount Security, the U.S. dollar equivalent on the date of the
original issuance of such Note of the amount of the principal thereof that would
be due and payable as of the date of such determination upon a declaration of
acceleration of the maturity thereof pursuant to Section 6.01 of the Indenture)
of such Note; provided, however, that if such Holders are, pursuant to Section
6.06 of the Indenture, acting together with the Holders of other Debt Securities
as a single class in giving any such request, demand, authorization, direction,
notice, consent or waiver, the provisions of Section 8.06 of the Indenture shall
instead govern such a determination with respect to such Notes, the provisions
of this Section 2.07 notwithstanding.
SECTION 2.08. References in the Indenture to the "Yield to Maturity" of
Debt Securities shall be deemed, solely with respect to the Notes, to refer to
the respective yields to maturity, calculated at the respective times of
issuance of the particular Notes or, if applicable, at the respective most
recent redeterminations of interest on such respective Notes and calculated in
accordance with accepted financial practice. References in Article VI of the
Indenture to the "rate" or "rate of interest" of Debt Securities shall be
deemed, solely with respect to the Notes, to refer to the respective rates or
rates of interest of the particular Notes.
SECTION 2.09. Notwithstanding the provisions of Sections 2.03 and 14.06
of the Indenture, if all Notes are not to be originally issued at one time, it
shall not be necessary to deliver the Officers' Certificate and the Opinion of
Counsel otherwise required pursuant to Section 14.06 or the written order of the
Company otherwise required pursuant to Section 2.03 at or prior to the time of
authentication of each Note if such documents are delivered at or prior to the
time of authentication upon original issuance of the first Note to be issued.
SECTION 2.10. If any Debt Securities described in subsections (a), (b)
or (c) (i) of Section 12.01 of the Indenture are Notes which are denominated in
a currency or currencies other than United States dollars, then in order to
satisfy the deposit conditions in subsection (c) (ii) of Section 12.01 with
respect to any such Notes, the Company shall deposit or cause to be deposited as
specified in Section 12.01 the required amount in the currency or currencies in
which such Notes are denominated or in direct obligations of the sovereign
nation or sovereign nations issuing such currency or currencies and denominated
in such currency or currencies.
IN WITNESS WHEREOF, GENERAL MILLS, INC. has caused this Supplemental
Indenture No. 6 to be signed, acknowledged and delivered by its Chairman of the
Board, President, Vice Chairman, Chief Financial and Administrative Officer or
Senior Vice President-Treasurer and its corporate seal to be affixed hereunto
and the same to be attested by its Secretary or Assistant Secretary; and
CONTINENTAL BANK N.A. has caused this Supplemental Indenture No. 6 to be signed,
acknowledged and delivered by one of its Vice Presidents, and its seal to be
affixed hereunto and the same to be attested by one of its Trust Officers, all
as of the day and year first written above.
GENERAL MILLS, INC.
[CORPORATE SEAL]
By: /s/ D.E. Kelby
Vice Chairman, Chief
Financial and
Administrative Officer
Attest: /s/ B.R. Rosenberg
Assistant Secretary
CONTINENTAL BANK N.A.
as Trustee
[CORPORATE SEAL]
By: /s/ Richard L. LaVarnway
Vice President
Attest: /s/ Lawrence M. Hackett
Trust Officer
<PAGE>
GENERAL MILLS, INC.
SUPPLEMENTAL INDENTURE NO. 7
Dated as of February 19, 1992
Supplemental Indenture No. 7 dated as of February 19, 1992, between
GENERAL MILLS, INC., a corporation organized and existing under the laws of the
State of Delaware (hereinafter referred to as the "Company"), and CONTINENTAL
BANK N.A., a national banking association duly organized and existing under the
laws of the United States of America (hereinafter referred to as the "Trustee").
W I T N E S S E T H :
The Company and the Trustee have executed and delivered an Indenture
dated as of July 1, 1982 (the "Indenture").
The Company desires to amend the Indenture to provide for the issuance
of Debt Securities of a series on a continuous basis and with differing terms
and to expressly provide that the Debt Securities of such series may be
denominated in currencies other than the currency of the United States of
America or may provide that the amount of payments of principal of and any
premium or interest thereon may be determined with reference to an index.
Section 10.01 of the Indenture provides for the Company, when authorized
by the Board of Directors, and the Trustee to enter into an indenture
supplemental to the Indenture to amend such Indenture by creating such
provisions as shall not adversely affect the interests of any Holder.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Debt
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of Debt Securities or of such
series thereof, as follows:
ARTICLE ONE
RELATION TO INDENTURE; DEFINITIONS
SECTION 1.01. This Supplemental Indenture No. 7
constitutes an integral part of the Indenture.
SECTION 1.02. For all purposes of this Supplemental
Indenture:
(1)Capitalized terms used herein without definition shall have the
meanings specified in the Indenture;
(2)All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this
Supplemental Indenture No. 7; and
(3)The terms "hereof," "herein," "hereby," "hereto," "hereunder," and
"herewith" refer to this Supplemental Indenture.
ARTICLE TWO
PROVISIONS APPLICABLE EXCLUSIVELY TO
THE SERIES OF MEDIUM-TERM NOTES
SECTION 2.01. There shall be a series of Debt Securities designated the
"Medium-Term Notes - Series C" (the "Notes.). The Notes shall be limited to an
aggregate principal amount resulting in not more than U.S. $400,000,000 of
proceeds to the Company (or the equivalent thereof, determined as of the
respective dates of issuance of Notes, in any other currency or currencies) and
shall be issued at any time or from time to time.
SECTION 2.02. Each Note shall have the particular terms (which need not
be substantially identical to the terms of any other Notes) established in
accordance with or as contemplated by this Section 2.02. Each fixed rate Note
("Fixed Rate Note") shall be in substantially the form attached hereto as
Exhibit A-1; each fixed rate amortizing note ("Fixed Rate Amortizing Note")
shall be in substantially the form attached hereto as Exhibit A-2; each floating
rate Note ("Floating Rate Note") shall be in substantially the form attached
hereto as Exhibit B; and each indexed Note ("Indexed Note") shall be in
substantially the form attached hereto as Exhibit C.
Each of the Chairman of the Board, the President, the Chief Financial
Officer, the Executive Vice President-Finance and the Treasurer (each an
"Authorized Officer") may, at any time and from time to time, on behalf of the
Company, authorize the issuance of Notes and in connection therewith establish,
or, if all of the Notes of such series may not be originally issued at one time,
to the extent deemed appropriate by such Authorized Officer, prescribe the
manner of determining within any limitations established by such Authorized
Officer (subject in either case to the limitations set forth in this
Supplemental Indenture and the Indenture), the following:
(1) the date or dates on which the principal and premium,
if any, of the Notes is payable;
(2)the rate or rates (or method by which determined) at which the Notes
shall bear interest, if any, the date or dates from which such
interest shall accrue, the interest payment dates on which such
interest shall be payable and, in the case of registered Notes, the
record dates for the determination of Holders to whom such interest
is payable;
(3) if an Original Issue Discount Security, the Yield to
Maturity;
(4)the price or prices at which, the period or periods within which and
the terms and conditions upon which Notes may be redeemed, in whole
or in part, at the option of the Company, pursuant to any sinking
fund or otherwise;
(5)the obligation, if any, of the Company to redeem, purchase or repay
Notes pursuant to any sinking fund or analogous provisions or at the
option of a Holder thereof and the price or prices at which and the
period or periods within which and the terms and conditions upon
which Notes shall be redeemed, purchased or repaid, in whole or in
part, pursuant to such obligation;
(6)if other than denominations of $100,000 and integral multiples of
$1,000 in excess thereof (or, in the case of any Note denominated in
other than U.S. dollars, the amount of the Specified Currency (as
defined below) for such Note which is equivalent, at the noon buying
rate in The City of New York for cable transfers for such Specified
Currency on the first Business Day in The City of New York and the
country issuing such Specified Currency (or, in the case of European
Currency Units, in Luxemborg) next preceding the date on which the
Company accepts the offer to purchase such Note, to U.S. $100,000
(rounded down to an integral multiple of 10,000 units of such
Specified Currency) and any greater amount that is an integral
multiple of 10,000 units of such Specified Currency), the
denominations in which Notes shall be issuable;
(7)if the amount of payments of principal of and any premium or
interest on the Notes may be determined with reference to an index,
the manner in which such amounts shall be determined;
(8)if other than the principal amount thereof, the portion of the
principal amount of Notes which shall be payable upon declaration of
acceleration of the maturity thereof pursuant to Section 6.01 of the
Indenture or provable in bankruptcy pursuant to Section 6.02 of the
Indenture;
(9)any Events of Default with respect to the Notes, if not set forth in
the Indenture;
(10) whether the Notes shall be issued in registered or bearer form,
with or without coupons;
(11) whether the Notes shall be issued in whole or in part in the form
of one or more Global Notes and, in such case, the Depositary for
such Global Note or Notes, which Depositary must be a clearing agency
registered under the Securities Exchange Act of 1934, as amended (the
"Exchange Act");
(12) if other than United States dollars, the currency or currencies,
including composite currencies, in which payment of the principal of
and any premium and interest on the Notes shall be payable (the
"Specified Currency"); and
(13) any other terms of the Notes (which terms shall not be inconsistent
with the provisions of this Supplemental Indenture or the Indenture).
In connection with the Notes, the officers of the Company specified in
the Indenture may execute and deliver one or more Officers' Certificates setting
forth, or, if all of the Notes may not be originally issued at one time, to the
extent deemed appropriate by any such officer, describing the manner of
determining the foregoing terms of the Notes established or prescribed, as the
case may be, in accordance with the foregoing.
SECTION 2.03. The Places of Payment for the principal of the Notes shall
be the City of Chicago, Illinois and The City of New York, New York. Interest,
if any, on the Notes will be paid by check, draft or wire, as specified in the
terms thereof. The Trustee shall be the paying agent ("Paying Agent") for the
Notes.
SECTION 2.04. Unless otherwise provided in the terms of a particular
Note, definitive Notes of any authorized denomination shall be exchangeable for
a like aggregate principal amount of Notes denominated in the same Specified
Currency and bearing interest (if any) at the same rate or having the same Yield
to Maturity and Stated Maturity and of different authorized denominations upon
surrender of such Notes with a request for such exchange at the designated
office of the Trustee in the City of Chicago, Illinois or in the Borough of
Manhattan, The City of New York.
SECTION 2.05. Unless otherwise specified in a particular Note, payments
of principal of (and premium, if any) and interest on each Note will be made in
the applicable Specified Currency; provided, however, that payments of principal
(and premium, if any) and interest on Notes denominated in other than U.S.
dollars will nevertheless be made in U.S. dollars (i) at the option of the
Holders thereof under the procedures described in the two following paragraphs
and (ii) at the option of the Company in the case of imposition of exchange
controls or other circumstances beyond the control of the Company as described
below in this Section 2.05. If specified in a particular Note, the amount of
principal payable on such Note will be determined by reference to an index or
formula described therein.
Unless otherwise specified in the terms of a Note, and except as
provided in the next paragraph, payments of interest and principal (and premium,
if any) with respect to any Note denominated in other than U.S. dollars will be
made in U.S. dollars if the registered Holder of such Note on the relevant
Regular Record Date or at maturity, as the case may be, has transmitted a
written request for such payment in U.S. dollars to the Trustee at its Corporate
Trust Office or agency in the City of Chicago, Illinois or in The City of New
York, New York on or prior to such Regular Record Date or the date 15 days prior
to maturity, as the case may be. Such request may be in writing (mailed or hand
delivered) or by cable or telex or, if promptly confirmed in writing, by other
form of facsimile transmission. Any such request made with respect to any Note
by a registered Holder will remain in effect with respect to any further
payments of interest and principal (and premium, if any) with respect to such
Note payable to such Holder, unless such request is revoked on or prior to the
relevant Regular Record Date or the date 15 days prior to maturity, as the case
may be.
Unless otherwise provided in the applicable Officers' Certificate,
Continental Bank N.A. will be the Exchange Rate Agent (the "Exchange Rate
Agent") with respect to the Notes.
Unless otherwise indicated in the terms of a particular Note, the
"Regular Record Date" with respect to any Floating Rate Note shall be the date
15 calendar days prior to each Interest Payment Date, whether or not such date
shall be a Business Day, and the "Regular Record Dates" with respect to any
Fixed Rate Note shall be the March 1 and September 1 next preceding the March 15
and September 15 Interest Payment Dates.
Unless otherwise indicated in the terms of a particular Note and except
as provided below, interest will be payable, in the case of Floating Rate Notes
which reset weekly, on the third Wednesday of March, June, September and
December of each year; in the case of Floating Rate Notes which reset monthly,
on the third Wednesday of each month or on the third Wednesday of March, June,
September and December of each year (as respectively indicated in such Notes);
in the case of Floating Rate Notes which reset quarterly, on the third Wednesday
of March, June, September and December of each year; in the case of Floating
Rate Notes which reset semi-annually, on the third Wednesday of the two months
of each year specified in such Notes; and in the case of Floating Rate Notes
which reset annually, on the third Wednesday of the month specified in such
Notes (each an "Interest Payment Date"), and in each case, at maturity.
Payments of interest on any Fixed Rate Note or Floating Rate Note with
respect to any Interest Payment Date will include interest accrued to but
excluding such Interest Payment Date; provided, however, that if the Interest
Reset Dates (as defined in a particular Note) with respect to any Floating Rate
Note are weekly, interest payable on such Note on any Interest Payment Date,
other than interest payable on the date on which principal on such Note is
payable, will include interest accrued to but excluding the day following the
next preceding Regular Record Date.
With respect to a Floating Rate Note, accrued interest from the date of
issue or from the last date to which interest has been paid shall be calculated
by multiplying the face amount of such Floating Rate Note by an accrued interest
factor. Such accrued interest factor shall be computed by adding the interest
factor calculated for each day from the date of issue, or from the last date to
which interest has been paid, to but excluding the date for which accrued
interest is being calculated. The interest factor for a Floating Rate Note
(expressed as a decimal) for each such day shall be computed by dividing the
interest rate (expressed as a decimal) applicable to such date either (i) by 360
or (ii) by the actual number of days in the year, as specified in such Note.
Interest on Fixed Rate Notes will be computed on the basis of a 360-day year of
twelve 30-day months.
SECTION 2.06. For the purposes of the Notes and this Section 2.06, the
term "Agent Member" means a member of, or participant in, a Depositary; the term
"Depositary" means, with respect to Notes issuable or issued in whole or in part
in the form of one or more Global Notes, the Person designated as Depositary by
the Company pursuant to Section 2.02 hereof, and if at any time there is more
than one such Person, "Depositary" as used with respect to the Notes shall mean
the respective Depositary with respect to particular Notes; and the term "Global
Note" means a global certificate evidencing all or part of the series of Notes,
issued to the Depositary for the series or such portion of the series, and
registered in the name of such Depositary or its nominee.
Notwithstanding Section 2.05 of the Indenture, except as otherwise
specified as contemplated by Section 2.02 hereof, any Global Note shall be
exchangeable only as provided in this paragraph. A Global Note shall be
exchangeable pursuant to this Section if (x) the Depositary notifies the Company
that it is unwilling or unable to continue as Depositary for such Global Note or
if at any time the Depositary ceases to be a clearing agency registered under
the Exchange Act, (y) the Company in its sole discretion determines that all
Global Notes then outstanding hereunder and under the Indenture shall be
exchangeable for definitive Notes in registered form or (z) an Event of Default
with respect to the Notes represented by such Global Note has occurred and is
continuing. Any Global Note that is exchangeable pursuant to the preceding
sentence shall be exchangeable for definitive Notes in registered form, bearing
interest (if any) at the same rate or pursuant to the same formula, having the
same date of issuance, redemption provisions, if any, Specified Currency, Stated
Maturity and other terms and of differing denominations aggregating a like
amount. Such definitive Notes shall be registered in the names of the owners of
the beneficial interests in such Global Note as such names are from time to time
provided by the relevant participants in the Depositary holding such Global Note
(as such participants are identified from time to time by such Depositary.)
No Global Note may be transferred except as a whole by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor of the Depositary or a nominee of
such successor. Except as provided above, owners solely of beneficial interests
in a Global Note shall not be entitled to receive physical delivery of Notes in
definitive form and will not be considered the Holders thereof for any purpose
under the Indenture or this Supplemental Indenture.
Any Global Note that is exchangeable pursuant to the preceding paragraph
shall be exchangeable for Notes issuable in denominations of $100,000 and
integral multiples of $1,000 in excess thereof and registered in such names as
the Depositary that is the Holder of such Global Note shall direct.
In the event that a Global Note is surrendered for redemption in part
pursuant to Section 3.04 of the Indenture, the Company shall execute, and the
Trustee shall authenticate and deliver to the Depositary for such Global Note,
without service charge, a new Global Note in a denomination equal to and in
exchange for the unredeemed portion of the principal of the Global Note so
surrendered.
The Trustee shall fix a record date for the purpose of determining the
Persons entitled to waive any past default hereunder or the Persons entitled to
consent to any indenture supplemental to the Indenture. If a record date is
fixed, the Holders on such record date, or their duly designated proxies, and
only such Persons, shall be entitled to waive any default hereunder, or to
retract any such waiver previously given, or to consent to such supplemental
indenture or to revoke any such consent previously given, as the case may be,
whether or not such Holders remain Holders after such record date. No such
waiver or consent shall be valid or effective for more than DO days after such
record date unless prior to such time the Holders of the requisite principal
amount of the Outstanding Notes as specified in the Indenture shall have given
waivers or consents, as applicable.
The Agent Members shall have no rights under the Indenture or this
Supplemental Indenture with respect to any Global Note held on their behalf by a
Depositary, and such Depositary may be treated by the Company, the Trustee, and
any agent of the Company or the Trustee as the owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee, or any Agent of the Company or the Trustee, from
giving effect to any written certification, proxy or other authorization
furnished by a Depositary or impair, as between a Depositary and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a Holder of any Note, including without limitation the granting of
proxies or other authorization of participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action which
a Holder is entitled to give or take under the Indenture.
SECTION 2.07. In determining whether the Holders of the requisite
principal amount of the Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver under the Indenture, the
principal amount of a Note denominated in a foreign currency or currencies shall
be the U.S. dollar equivalent, determined on the date of original issuance of
such Note, of the principal amount (or, in the case of a Note which is an
Original Issue Discount Security, the U.S. dollar equivalent on the date of the
original issuance of such Note of the amount of the principal thereof that would
be due and payable as of the date of such determination upon a declaration of
acceleration of the maturity thereof pursuant to Section 6.01 of the Indenture)
of such Note; provided, however, that if such Holders are, pursuant to Section
6.06 of the Indenture, acting together with the Holders of other Debt Securities
as a single class in giving any such request, demand, authorization, direction,
notice, consent or waiver, the provisions of Section 6.06 of the Indenture shall
instead govern such a determination with respect to such Notes, the provisions
of this Section 2.07 notwithstanding.
SECTION 2.08. References in the Indenture to the "Yield to Maturity" of
Debt Securities shall be deemed, solely with respect to the Notes, to refer to
the respective yields to maturity, calculated at the respective times of
issuance of the particular Notes or, if applicable, at the respective most
recent redeterminations of interest on such respective Notes and calculated in
accordance with accepted financial practice. References in Article VI of the
Indenture to the "rate" or "rate of interest" of Debt Securities shall be
deemed, solely with respect to the Notes, to refer to the respective rates or
rates of interest of the particular Notes.
SECTION 2.09. Notwithstanding the provisions of Sections 2.03 and 14.06
of the Indenture, if all Notes are not to be originally issued at one time, it
shall not be necessary to deliver the Officers' Certificate and the Opinion of
Counsel otherwise required pursuant to Section 14.06 or the written order of the
Company otherwise required pursuant to Section 2.03 at or prior to the time of
authentication of each Note if such documents are delivered at or prior to the
time of authentication upon original issuance of the first Note to be issued.
SECTION 2.10. If any Debt Securities described in subsections (a), (b)
or (c) (i) of Section 12.01 of the Indenture are Notes which are denominated in
a currency or currencies other than United States dollars, then in order to
satisfy the deposit conditions in subsection (c) (ii) of Section 12.01 with
respect to any such Notes, the Company shall deposit or cause to be deposited as
specified in Section 12.01 the required amount in the currency or currencies in
which such Notes are denominated or in direct obligations of the sovereign
nation or sovereign nations issuing such currency or currencies and denominated
in such currency or currencies.
IN WITNESS WHEREOF, GENERAL MILLS, INC. has caused this Supplemental
Indenture No. 7 to be signed, acknowledged and delivered by its Chairman of the
Board, President, Vice Chairman, Chief Financial and Administrative Officer or
Senior Vice President-Treasurer and its corporate seal to be affixed hereunto
and the same to be attested by its Secretary or Assistant Secretary; and
CONTINENTAL BANK N.A. has caused this Supplemental Indenture No. 7 to be signed,
acknowledged and delivered by one of its Vice Presidents, and its seal to be
affixed hereunto and the same to be attested by one of its Trust Officers, all
as of the day and year first written above.
GENERAL MILLS, INC.
[CORPORATE SEAL]
By: /s/ D.E. KELBY
Attest /s/ IVY S. BERNHARDSON
Assistant Secretary
CONTINENTAL BANK N.A.
as Trustee
[CORPORATE SEAL]
By: /s/
Vice President
Attest: /s/ JOANNE M. MURPHY
Trust Officer
<PAGE>
GENERAL MILLS, INC.
SUPPLEMENTAL INDENTURE NO. 8
Dated as of January 8, 1993
Supplemental Indenture No. 8 dated as of January 8, 1993, between
GENERAL MILLS, INC., a corporation organized and existing under the laws of the
State of Delaware (hereinafter referred to as the "Company"), and CONTINENTAL
BANK, NATIONAL ASSOCIATION, a national banking association duly organized and
existing under the laws of the United States of America (hereinafter referred to
as the "Trustee").
W I T N E S S E T H :
The Company and the Trustee have executed and delivered an Indenture
dated as of July 1, 1982 (the "Indenture").
Section 10.01 of the Indenture provides for the Company, when authorized
by the Board of Directors, and the Trustee to enter into an indenture
supplemental to the Indenture to amend such Indenture by creating such
provisions as shall not adversely affect the interests of any Holder.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Debt
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of Debt Securities or of such
series thereof, as follows:
ARTICLE ONE
RELATION TO INDENTURE; DEFINITIONS
SECTION 1.01. This Supplemental Indenture No. 8
constitutes an integral part of the Indenture.
SECTION 1.02. For all purposes of this Supplemental
Indenture:
(1) Capitalized terms used herein without definition shall have the
meanings specified in the Indenture;
(2) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of
this Supplemental Indenture No. 8; and
(3) The terms "hereof," "herein," "hereby," "hereto," "hereunder,"
and "herewith" refer to this Supplemental Indenture.
ARTICLE TWO
PROVISIONS APPLICABLE EXCLUSIVELY TO
THE SERIES OF MEDIUM-TERM NOTES
SECTION 2.01. There shall be a series of Debt Securities designated the
"Medium-Term Notes - Series D" (the "Notes"). The Notes shall be limited to an
aggregate principal amount resulting in not more than U.S. $500,000,000 of
proceeds to the Company (or the equivalent thereof, determined as of the
respective dates of issuance of Notes, in any other currency or currencies) and
shall be issued at any time or from time to time.
SECTION 2.02. Each Note shall have the particular terms (which need not
be substantially identical to the terms of any other Notes) established in
accordance with or as contemplated by this Section 2.02. Each fixed rate Note
("Fixed Rate Note") shall be in substantially the form attached hereto as
Exhibit A; each fixed rate amortizing note ("Fixed Rate Amortizing Note") shall
be in substantially the form attached hereto as Exhibit B; each floating rate
Note ("Floating Rate Note") shall be in substantially the form attached hereto
as Exhibit C; and each indexed Note ("Indexed Note") shall be in substantially
the form attached hereto as Exhibit D.
Each of the Chairman of the Board, any Vice Chairman and the Treasurer
(each an "Authorized Officer") may, at any time and from time to time, on behalf
of the Company, authorize the issuance of Notes and in connection therewith
establish, or, if all of the Notes of such series may not be originally issued
at one time, to the extent deemed appropriate by such Authorized Officer,
prescribe the manner of determining within any limitations established by such
Authorized Officer (subject in either case to the limitations set forth in this
Supplemental Indenture and the Indenture), the following:
(1) the date or dates on which the principal and premium,
if any, of the Notes is payable;
(2) the rate or rates (or method by which determined) at which the Notes
shall bear interest, if any, the date or dates from which such
interest shall accrue, the interest payment dates on which such
interest shall be payable and, in the case of registered Notes, the
record dates for the determination of Holders to whom such interest
is payable;
(3) if an Original Issue Discount Security, the Yield to
Maturity;
(4) the price or prices at which, the period or periods within which and
the terms and conditions upon which Notes may be redeemed, in whole
or in part, at the option of the Company, pursuant to any sinking
fund or otherwise;
(5) the obligation, if any, of the Company to redeem, purchase or repay
Notes pursuant to any sinking fund or analogous provisions or at the
option of a Holder thereof and the price or prices at which and the
period or periods within which and the terms and conditions upon
which Notes shall be redeemed, purchased or repaid, in whole or in
part, pursuant to such obligation;
(6) if other than denominations of $1,000 and integral multiples thereof
(or, in the case of any Note denominated in other than U.S. dollars,
the amount of the Specified Currency (as defined below) for such
Note which is equivalent, at the noon buying rate in The City of New
York for cable transfers for such Specified Currency on the first
Business Day in The City of New York and the country issuing such
Specified Currency (or, in the case of European Currency Units, in
Luxembourg) next preceding the date on which the Company accepts the
offer to purchase such Note, to U.S. $1,000 (rounded down to an
integral multiple of 1,000 units of such Specified Currency) and any
greater amount that is an integral multiple of 1,000 units of such
Specified Currency), the denominations in which Notes shall be
issuable; provided, however. that all Notes denominated in amounts
of less than $100,000 (or, in the case of any Note denominated in
other than U.S. dollars, the equivalent amount of Specified
Currency) shall be issued solely in the form of one or more Global
Notes;
(7) if the amount of payments of principal of and any premium or
interest on the Notes may be determined with reference to an index,
the manner in which such amounts shall be determined;
(8) if other than the principal amount thereof, the portion of the
principal amount of Notes which shall be payable upon declaration of
acceleration of the maturity thereof pursuant to Section 6.01 of the
Indenture or provable in bankruptcy pursuant to Section 6.02 of the
Indenture;
(9) any Events of Default with respect to the Notes, if not set forth in
the Indenture;
(10)whether the Notes shall be issued in registered or bearer form,
with or without coupons;
(11)whether the Notes shall be issued in whole or in part in the form
of one or more Global Notes and, in such case, the Depositary for
such Global Note or Notes, which Depositary must be a clearing
agency registered under the Securities Exchange Act of 1934, as
amended (the "Exchange Act");
(12)if other than United States dollars, the currency or currencies,
including composite currencies, in which payment of the principal of
and any premium and interest on the Notes shall be payable (the
"Specified Currency");
(13)if the Notes are Amortizing Notes, repayment information with
respect to installments of principal and interest; and
(14)any other terms of the Notes (which terms shall not be inconsistent
with the provisions of this Supplemental Indenture or the
Indenture).
In connection with the Notes, the officers of the Company specified in
the Indenture may execute and deliver one or more Officers' Certificates setting
forth, or, if all of the Notes may not be originally issued at one time, to the
extent deemed appropriate by any such officer, describing the manner of
determining the foregoing terms of the Notes established or prescribed, as the
case may be, in accordance with the foregoing.
SECTION 2.03. The Places of Payment for the principal of the Notes shall
be the City of Chicago, Illinois and The City of New York, New York. Interest,
if any, on the Notes will be paid by check, draft or wire, as specified in the
terms thereof. The Trustee shall be the paying agent ("Paying Agent") for the
Notes.
SECTION 2.04. Unless otherwise provided in the terms of a particular
Note, definitive Notes of any authorized denomination shall be exchangeable for
a like aggregate principal amount of Notes denominated in the same Specified
Currency and bearing interest (if any) at the same rate or having the same Yield
to Maturity and Stated Maturity and of different authorized denominations upon
surrender of such Notes with a request for such exchange at the designated
office of the Trustee in the City of Chicago, Illinois or in the Borough of
Manhattan, The City of New York.
SECTION 2.05. Unless otherwise specified in a particular Note, payments
of principal of (and premium, if any) and interest on each Note will be made in
the applicable Specified Currency; provided, however, that payments of principal
(and premium, if any) and interest on Notes denominated in other than U.S.
dollars will nevertheless be made in U.S. dollars (i) at the option of the
Holders thereof under the procedures described in the two following paragraphs
and (ii) at the option of the Company in the case of imposition of exchange
controls or other circumstances beyond the control of the Company as described
below in this Section 2.05. If specified in a particular Note, the amount of
principal payable on such Note will be determined by reference to an index or
formula described therein.
Unless otherwise specified in the terms of a Note, and except as
provided in the next paragraph, payments of interest and principal (and premium,
if any) with respect to any Note denominated in other than U.S. dollars will be
made in U.S. dollars if the registered Holder of such Note on the relevant
Regular Record Date or at maturity, as the case may be, has transmitted a
written request for such payment in U.S. dollars to the Trustee at its Corporate
Trust Office or agency in the City of Chicago, Illinois or in The City of New
York, New York on or prior to such Regular Record Date or the date 15 days prior
to maturity, as the case may be. Such request may be in writing (mailed or hand
delivered) or by cable or telex or, if promptly confirmed in writing, by other
form of facsimile transmission. Any such request made with respect to any Note
by a registered Holder will remain in effect with respect to any further
payments of interest and principal (and premium, if any) with respect to such
Note payable to such Holder, unless such request is revoked on or prior to the
relevant Regular Record Date or the date 15 days prior to maturity, as the case
may be.
Unless otherwise provided in the applicable Officers' Certificate,
Continental Bank, National Association will be the Exchange Rate Agent (the
"Exchange Rate Agent") with respect to the Notes.
Unless otherwise indicated in the terms of a particular Note, the
"Regular Record Date" with respect to any Floating Rate Note shall be the date
15 calendar days prior to each Interest Payment Date, whether or not such date
shall be a Business Day, and the "Regular Record Dates" with respect to any
Fixed Rate Note shall be the March 1 and September 1 next preceding the March 15
and September 15 Interest Payment Dates.
Unless otherwise indicated in the terms of a particular Note and except
as provided below, interest will be payable, in the case of Floating Rate Notes
which reset daily or weekly, on the third Wednesday of March, June, September
and December of each year; in the case of Floating Rate Notes which reset
monthly, on the third Wednesday of each month or on the third Wednesday of
March, June, September and December of each year (as respectively indicated in
such Notes); in the case of Floating Rate Notes which reset quarterly, on the
third Wednesday of March, June, September and December of each year; in the case
of Floating Rate Notes which reset semi-annually, on the third Wednesday of the
two months of each year specified in such Notes; and in the case of Floating
Rate Notes which reset annually, on the third Wednesday of the month specified
in such Notes (each an "Interest Payment Date"), and in each case, at maturity.
Payments of interest on any Fixed Rate Note or Floating Rate Note with
respect to any Interest Payment Date will include interest accrued to but
excluding such Interest Payment Date; provided, however, that if the Interest
Reset Dates (as defined in a particular Note) with respect to any Floating Rate
Note are daily or weekly, interest payable on such Note on any Interest Payment
Date, other than interest payable on the date on which principal on such Note is
payable, will include interest accrued to but excluding the day following the
next preceding Regular Record Date.
With respect to a Floating Rate Note, accrued interest from the date of
issue or from the last date to which interest has been paid shall be calculated
by multiplying the face amount of such Floating Rate Note by an accrued interest
factor. Such accrued interest factor shall be computed by adding the interest
factor calculated for each day from the date of issue, or from the last date to
which interest has been paid, to but excluding the date for which accrued
interest is being calculated. The interest factor for a Floating Rate Note
(expressed as a decimal) for each such day shall be computed by dividing the
interest rate (expressed as a decimal) applicable to such date either (i) by 360
or (ii) by the actual number of days in the year, as specified in such Note.
Interest on Fixed Rate Notes will be computed on the basis of a 360-day year of
twelve 30-day months.
SECTION 2.06. For the purposes of the Notes and this Section 2.06, the
term "Agent Member" means a member of, or participant in, a Depositary; the term
"Depositary" means, with respect to Notes issuable or issued in whole or in part
in the form of one or more Global Notes, the Person designated as Depositary by
the Company pursuant to Section 2.02 hereof, and if at any time there is more
than one such Person, "Depositary" as used with respect to the Notes shall mean
the respective Depositary with respect to particular Notes; and the term "Global
Note" means a global certificate evidencing all or part of the series of Notes,
issued to the Depositary for the series or such portion of the series, and
registered in the name of such Depositary or its nominee.
Notwithstanding Section 2.05 of the Indenture, except as otherwise
specified as contemplated by Section 2.02 hereof, any Global Note shall be
exchangeable only as provided in this paragraph. A Global Note shall be
exchangeable pursuant to this Section if (x) the Depositary notifies the Company
that it is unwilling or unable to continue as Depositary for such Global Note or
if at any time the Depositary ceases to be a clearing agency registered under
the Exchange Act, (y) the Company in its sole discretion determines that all
Global Notes then outstanding hereunder and under the Indenture shall be
exchangeable for definitive Notes in registered form or (z) an Event of Default
with respect to the Notes represented by such Global Note has occurred and is
continuing. A Global Note shall only be exchangeable into Notes issuable in
denominations of $100,000 and integral multiples of $1,000 in excess thereof. No
Notes shall be issuable in denominations of less than $100,000. Any Global Note
that is exchangeable pursuant to the preceding sentences shall be exchangeable
for definitive Notes in registered form, bearing interest (if any) at the same
rate or pursuant to the same formula, having the same date of issuance,
redemption provisions, if any, Specified Currency, Stated Maturity and other
terms and of differing denominations aggregating a like amount. Such definitive
Notes shall be registered in the names of the owners of the beneficial interests
in such Global Note as such names are from time to time provided by the relevant
participants in the Depositary holding such Global Note (as such participants
are identified from time to time by such Depositary. )
No Global Note may be transferred except as a whole by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor of the Depositary or a nominee of
such successor. Except as provided above, owners solely of beneficial interests
in a Global Note shall not be entitled to receive physical delivery of Notes in
definitive form and will not be considered the Holders thereof for any purpose
under the Indenture or this Supplemental Indenture.
Any Global Note that is exchangeable pursuant to the preceding paragraph
shall be exchangeable for Notes issuable in denominations of $100,000 and
integral multiples of $1,000 in excess thereof and registered in such names as
the Depositary that is the Holder of such Global Note shall direct.
In the event that a Global Note is surrendered for redemption in part
pursuant to Section 3.04 of the Indenture, the Company shall execute, and the
Trustee shall authenticate and deliver to the Depositary for such Global Note,
without service charge, a new Global Note in a denomination equal to and in
exchange for the unredeemed portion of the principal of the Global Note so
surrendered.
The Trustee shall fix a record date for the purpose of determining the
Persons entitled to waive any past default hereunder or the Persons entitled to
consent to any indenture supplemental to the Indenture. If a record date is
fixed, the Holders on such record date, or their duly designated proxies, and
only such Persons, shall be entitled to waive any default hereunder, or to
retract any such waiver previously given, or to consent to such supplemental
indenture or to revoke any such consent previously given, as the case may be,
whether or not such Holders remain Holders after such record date. No such
waiver or consent shall be valid or effective for more than 90 days after such
record date unless prior to such time the Holders of the requisite principal
amount of the Outstanding Notes as specified in the Indenture shall have given
waivers or consents, as applicable.
The Agent Members shall have no rights under the Indenture or this
Supplemental Indenture with respect to any Global Note held on their behalf by a
Depositary, and such Depositary may be treated by the Company, the Trustee, and
any agent of the Company or the Trustee as the owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee, or any Agent of the Company or the Trustee, from
giving effect to any written certification, proxy or other authorization
furnished by a Depositary or impair, as between a Depositary and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a Holder of any Note, including without limitation the granting of
proxies or other authorization of participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action which
a Holder is entitled to give or take under the Indenture.
SECTION 2.07. In determining whether the Holders of the requisite
principal amount of the Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver under the Indenture, the
principal amount of a Note denominated in a foreign currency or currencies shall
be the U.S. dollar equivalent, determined on the date of original issuance of
such Note, of the principal amount (or, in the case of a Note which is an
Original Issue Discount Security, the U.S. dollar equivalent on the date of the
original issuance of such Note of the amount of the principal thereof that would
be due and payable as of the date of such determination upon a declaration of
acceleration of the maturity thereof pursuant to Section 6.01 of the Indenture)
of such Note; provided, however, that if such Holders are, pursuant to Section
6.06 of the Indenture, acting together with the Holders of other Debt Securities
as a single class in giving any such request, demand, authorization, direction,
notice, consent or waiver, the provisions of Section 6.06 of the Indenture shall
instead govern such a determination with respect to such Notes, the provisions
of this Section 2.07 notwithstanding.
SECTION 2.08. References in the Indenture to the "Yield to Maturity" of
Debt Securities shall be deemed, solely with respect to the Notes, to refer to
the respective yields to maturity, calculated at the respective times of
issuance of the particular Notes or, if applicable, at the respective most
recent redeterminations of interest on such respective Notes and calculated in
accordance with accepted financial practice. References in Article Vl of the
Indenture to the "rate" or "rate of interest" of Debt Securities shall be
deemed, solely with respect to the Notes, to refer to the respective rates or
rates of interest of the particular Notes.
SECTION 2.09. Notwithstanding the provisions of Sections 2.03 and 14.06
of the Indenture, if all Notes are not to be originally issued at one time, it
shall not be necessary to deliver the Officers' Certificate and the Opinion of
Counsel otherwise required pursuant to Section 14.06 or the written order of the
Company otherwise required pursuant to Section 2.03 at or prior to the time of
authentication of each Note if such documents are delivered at or prior to the
time of authentication upon original issuance of the first Note to be issued.
SECTION 2.10. If any Debt Securities described in subsections (a), (b)
or (c) (i) of Section 12.01 of the Indenture are Notes which are denominated in
a currency or currencies other than United States dollars, then in order to
satisfy the deposit conditions in subsection (c) (ii) of Section 12.01 with
respect to any such Notes, the Company shall deposit or cause to be deposited as
specified in Section 12.01 the required amount in the currency or currencies in
which such Notes are denominated or in direct obligations of the sovereign
nation or sovereign nations issuing such currency or currencies and denominated
in such currency or currencies.
IN WITNESS WHEREOF, GENERAL MILLS, INC. has caused this Supplemental
Indenture No. 8 to be signed, acknowledged and delivered by its Chairman of the
Board, Vice Chairman, Senior Vice President, Treasurer and its corporate seal to
be affixed hereunto and the same to be attested by its Secretary or Assistant
Secretary; and CONTINENTAL BANK, NATIONAL ASSOCIATION, has caused this
Supplemental Indenture No. 8 to be signed, acknowledged and delivered by one of
its Vice Presidents, and its seal to be affixed hereunto and the same to be
attested by one of its Trust Officers, all as of the day and year first written
above.
GENERAL MILLS, INC.
[CORPORATE SEAL]
By: /s/ D.E. KELBY
Senior Vice President,
Treasurer
Attest: /s/ IVY S. BERNHARDSON
Assistant Secretary
CONTINENTAL BANK N.A.
as Trustee
[CORPORATE SEAL]
By: /s/
Vice President
Attest: /s/ JOANNE M. MURPHY
Trust Officer
EXHIBIT 10.4
GENERAL MILLS, INC.
EXECUTIVE INCENTIVE PLAN
As Amended Through June 24, 1996
<PAGE>
GENERAL MILLS, INC.
EXECUTIVE INCENTIVE PLAN
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. 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:
.0 - .50 Unsatisfactory
.50 - .90 Improvement Needed
.90 - 1.20 Satisfactory
1.20 - 1.40 Superior
1.40 - 1.50 Outstanding & Exceptional
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 1.8 (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:
Corporate Unit
Portion Portion
Senior Corporate Officers 100% N/A
Operating General Managers 50% 50%
and Corporate Staff Officers
All Other Officers 25% 75%
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.
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:
Fair Market
Value of Shares
Level of to be Deposited
Stock Matching as % of Base Additional
Participation Cash Award Cash Award
------------- ---------- ----------
Full Participation 25% 0%
15% 6%
Partial Participation 10% 9%
5% 12%
No Participation
in Stock Matching 0% 15%
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 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 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.
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 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.
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.
07/97
PLANS.EXECINCE
EXHIBIT 10.10
GENERAL MILLS, INC.
1996 COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
As Amended Through December 9, 1996
<PAGE>
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 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 Stock Units ("Stock Units") 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 Stock Unit 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 Stock Units
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 Stock Units shall receive, upon distribution,
one share of Common Stock for each 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 receiving Stock Units
pursuant to this Part I, Section B. shall have the same rights, protections and
limitations as those provided participants receiving Stock Units pursuant to
Part III, Section B.3. and Section C.1. hereof.
C. PARTICIPATION
Each member of 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.
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 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 stockholders'
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
stockholders' 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. Periodically, 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.
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; provided, however, that for
compensation earned in Plan Years commencing after December 9,
1996, distributions must be made or commenced by the later of
(i) the date the participant attains age 70 and (ii) five
years after the director's retirement from the Board.
4. In the event of the termination of a participant from Board service
other than by retirement, the Committee may in its sole discretion
require that distribution of all amounts allocated to a
participant's deferred compensation account be accelerated and
distributed as of the first business day of the calendar year next
following termination.
5. 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 as to deferred cash compensation 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 cash 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 stockholders' 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, 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. DEFERRAL OF STOCK OPTION GAINS
Under the Plan, Participants may defer receipt of the net shares of
Common Stock to be issued upon the stock-for-stock exercise of an Option issued
hereunder, as well as dividend equivalents on the net shares.
1. Option Gain Deferral Election. A participant can elect to defer
receipt of Net Shares (defined below) of Common Stock resulting
from a stock-for-stock exercise of an exercisable Option issued to
the participant by completing and submitting to the Company an
irrevocable stock option deferral election at least six months in
advance of exercising the Option (which exercise must be done on or
prior to the expiration of the Option) and, on or prior to the
exercise date, delivering personally-owned shares equal in value to
the Option exercise price on the date of the exercise. "Net Shares"
means the difference between the number of shares of Common Stock
subject to the Option exercise and the number of shares of Common
Stock delivered to satisfy the Option exercise price. A participant
may not revoke an Option gain deferral election after it is
received by the Company. A participant may choose to defer receipt
of all or only a portion of the Net Shares to be received upon
exercise of an Option. If only a portion of the Net Shares is
deferred, the balance will be issued at the time of exercise.
2. Distribution of Deferred Common Stock. At the time of a
participant's election to defer receipt of Common Stock issuable
upon an Option exercise or upon the election to receive Stock Units
as provided in Part III, Section C.1. a participant must also
select a distribution date and a form of distribution. The
distribution date may be any date that is at least one year
subsequent to either the exercise date for the related Option or
the date of grant in the case of Stock Units granted under Part
III, Section C.1. but the distribution must be made or commenced by
the later of (i) the date the participant attains age 70 and (ii)
five year after the date of the director's retirement from the
Board.
A participant may elect to have deferred Common Stock distributed
in a single payment or in substantially equal annual installments
for a period not to exceed ten (10) years, or in another form
requested by the Participant, in writing, and approved by the
Committee. In the absence of an election, Common Stock issued in
respect of Stock Units 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. Common Stock issuable under a single Option grant or
pursuant to a single grant under Part III, Section C.1. shall have
the same distribution date and form of distribution.
Notwithstanding the above, the following provisions shall apply:
a. If an Option as to which a participant has made an Option gain
deferral election terminates prior to the exercise date
selected by the participant, or if the participant dies or
fails to deliver personally-owned shares in payment of the
exercise price, then the deferral election shall not become
effective.
b. In the event of the termination of a participant from Board
service other than by retirement, the Committee may, in its
sole discretion, require that distribution of all Stock Units
allocated to a participant's Deferred Stock Unit Accounts (as
defined in Part III, Section B.3.a. below) be accelerated and
distributed as of the first business day of the calendar year
next following the date of termination.
c. At the time elected by the participant for distribution of
Common Stock attributable to allocations under the
participant's Deferred Stock Unit Accounts, the Company shall
cause to be issued to the Participant, within three (3) days
of the date of distribution, shares of Common Stock equal to
the number of Stock Units credited to the Deferred Stock Unit
Account and cash equal to any dividend equivalent amounts
which had not been used to "purchase" additional Stock Units
as provided below. Prior to distribution and pursuant to any
rules the Committee may adopt, a Participant may authorize the
Company to withhold a portion of the shares of Common Stock to
be distributed for the payment of all federal, state, local
and foreign withholding taxes required to be collected in
respect of the distribution.
3. Deferred Stock Unit Accounts and Dividend Equivalents.
a. A deferred stock unit account ("Deferred Stock Unit Account")
will be established for each Option grant covered by a
participant election to defer the receipt of Common Stock
under Part III, Section B.1. above and, for each Net Share
deferred, a Stock Unit will be credited to the Deferred Stock
Unit Account as of the date of the Option exercise. A Deferred
Stock Unit Account will also be established each time a
participant elects to receive Stock Units pursuant to Part
III, Section C.1. hereof. Participants may make elections,
which shall become effective six months after they are made,
either to receive dividend equivalent cash amounts on Stock
Units currently or to have the amounts reinvested. If the
amounts are reinvested, on each dividend payment date for the
Company's Common Stock, the Company will credit each Deferred
Stock Unit Account with an amount equal to the dividends paid
by the Company on the number of shares of Common Stock equal
to the number of Stock Units in the Deferred Stock Unit
Account. Dividend equivalent amounts credited to each Deferred
Stock Unit Account shall be used to "purchase" additional
Stock Units for the Deferred Stock Unit Account at a price
equal to the mean of the high and low price of the Common
Stock on the New York Stock Exchange on the dividend date. No
fractional Stock Units will be credited. The Committee may, in
its sole discretion, direct either that all dividend
equivalent amounts be paid currently or all such amounts be
reinvented if, for any reason, such Committee believes it is
in the best interest of the Company to do so. If the
participant fails to make an election, the dividend equivalent
amounts shall be reinvested. Periodically, each participant
will receive a statement of the number of Stock Units in his
or her Deferred Stock Unit Account(s).
b. Participants who elect under the Plan to defer the receipt of
Common Stock issuable upon the exercise of Options or elect to
receive Stock Units under Part III, Section C.1. below will
have no rights as stockholders of the Company with respect to
allocations made to their Deferred Stock Unit Account(s),
except the right to receive dividend equivalent allocations
under Part III, Section B.3.a. above. Stock Units may not be
sold, transferred, assigned, pledged or otherwise encumbered
or disposed.
C. RESTRICTED STOCK AND STOCK UNITS
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)Stock
Units, subject to vesting as provided in subsection 2. Only
non-employee directors re-elected to the Board shall be entitled to
a grant under this Section III. C.1. of Restricted Stock or Stock
Units 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 Stock Units. A
participant's interest in the Restricted Stock and Stock Units
shall vest on the date of the annual stockholders' meeting next
following the date of the award of the Restricted Stock or Stock
Units (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
Stock Units vests, such Restricted Stock and Stock Units shall be
forfeited and all further rights of the non-employee director to or
with respect to such Restricted Stock or Stock Units shall
terminate. A participant who dies prior to the vesting of
Restricted Stock or Stock Units shall vest in a proportionate
number of shares of Restricted Stock or Stock Units, based on the
full months of service completed during the vesting period of the
Restricted Stock or Stock Units 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 Stock Units 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 Stock Units.
a. Each participant electing the award of Stock Units under Part
III, Section C.1. above must select a date of distribution and
form of distribution as provided under Part III, Section B.2.
The participant may also elect to have dividend equivalents
payable on Stock Units paid currently or reinvested in Stock
Units as provided under Part III, Section B.3.
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.
D. GENERAL PROVISIONS FOR DEFERRED CASH, OPTION GAINS AND RSU's
The following provisions shall apply to the deferral of cash
compensation described in Part II, Section C hereof, the deferral of receipt of
Common Stock issued upon exercise of Options described in Part III, Section B
hereof and the treatment of Stock Units granted under Part III, Section C
hereof.
1. A participant may, at any time prior or subsequent to the
commencement of benefit payments or distribution of Common Stock in
respect of Stock Units under this Plan, elect in writing to have
his or her form of distribution under this Plan changed to an
immediate single distribution which shall be made within one (1)
business day of receipt by the Company of such request in the case
of deferred cash and three (3) business days in the case of Common
Stock; provided that the cash amount or number of shares of Common
Stock subject to such single distribution shall be reduced by an
amount or number of shares of Common Stock equal to the product of
(X) the rate for 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 and (Y) either (i) as to a cash
distribution, 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 specified 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), or (ii) as to a distribution
of Common Stock in respect of Stock Units, the number of Stock
Units held on behalf of the participant multiplied by 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, on the Business Day preceding the
date of the request.
2. In the event of a severe financial hardship occasioned by an
emergency, including, but not limited to, illness, disability or
personal injury sustained by the participant or a member of the
participant's immediate family, a participant may apply to receive
a distribution, including a distribution of Common Stock in respect
of Stock Units, earlier than initially elected. The Committee may,
in its sole discretion, 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 distributions will be
accelerated only to the extent reasonably necessary to alleviate
the financial hardship.
3. If the death of a participant occurs before a full distribution of
deferred cash amounts or Common Stock in respect of Stock Units is
made, a single distribution shall be made to the beneficiary
designated by the participant to receive such amounts. This
distribution shall be made as soon as practical following
notification that death has occurred. In the absence of any such
designation, the distribution shall be made to the personal
representative, executor or administrator of the participant's
estate.
4. As to all previous and future Plan years, and subject to the last
sentence of the first paragraph of Part III, Section B.2. hereof, a
participant who (a) has elected a distribution date and
distribution in either a single distribution or substantially equal
installments and (b) is not within twelve (12) months of the date
that such deferred amount, deferred Common Stock or the first
installment thereof would be distributed under this Plan, shall be
permitted to make no more than two amendments to the initial
election to defer distributions such that his or her distribution
date is either in the same calendar year as the date of the
distribution which would have been made in the absence of such
election amendment(s) or is at least one year after the date of the
distribution which would have been made in the absence of such
election amendment(s). A participant satisfying the conditions set
forth in the preceding sentence may also amend such election so
that his or her form of distribution is changed to substantially
equal annual installments for a period not to exceed ten (10) years
or is changed to a single distribution.
5. Notwithstanding any other provision of this Plan to the contrary,
the Committee, by majority approval, may, in its sole discretion,
direct that distributions be made before such distributions 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
distributions that are or will be payable to such participants
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.
E. CHANGE OF CONTROL
Stock Options granted under the Plan will become immediately
exercisable, restrictions on the Restricted Stock will lapse and Common Stock
and dividend equivalents to be issued in respect of Stock Units 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 Committee. 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 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
As amended December 9, 1996
EXHIBIT 10.20
GENERAL MILLS, INC.
STOCK OPTION AND LONG-TERM INCENTIVE PLAN OF 1993
As Amended Through June 24, 1996
<PAGE>
GENERAL MILLS, INC.
STOCK OPTION AND LONG-TERM INCENTIVE PLAN OF 1993
1. PURPOSE OF THE PLAN
The purpose of the General Mills, Inc. Stock Option and Long-Term
Incentive Plan of 1993 (the "Plan") is to attract and retain able
employees by rewarding employees of General Mills, Inc., its
subsidiaries and affiliates (defined as entities in which General
Mills, Inc. owns an equity interest of 25% or more) (collectively,
the "Company") who are responsible for the growth and sound
development of the business of the Company, and to align the
interests of all employees with those of the stockholders of the
Company.
2. EFFECTIVE DATE, DURATION AND SUMMARY OF PLAN
A. Effective Date and Duration
This Plan shall become effective as of September 20, 1993,
subject to the approval of the stockholders of the Company at
the Annual Meeting on September 20, 1993. Awards may be made
under the Plan until October 1, 1998.
B. Summary of Option Provisions for Participants
The stock option that will be awarded to employees under this
Plan gives a right to an employee to purchase at a future date
shares of General Mills, Inc. common stock at a fixed price.
As an employee, you will receive an "option certificate" in
your own name, which will contain the term and other
conditions of the option grant. In general, each certificate
will state the number of shares of General Mills that you can
purchase from the Company, the price at which you can purchase
the shares, and the date you can make your purchase. You will
not have any taxable income when you receive the option
certificate.
The price at which you may buy the General Mills shares will
be equal to the market price of the Company shares on the New
York Stock Exchange as of the day the option was awarded to
you. If during the period that you must hold the option
certificate before you can use it, the price of General Mills
stock has risen, you will make a gain on exercising the option
certificate equal to the difference between the price shown on
the option certificate and the market price of General Mills
shares on the date you use your option to buy shares under the
terms of the option certificate. This gain is taxable to you.
You will never be obligated to buy shares of General Mills if
you do not wish to do so. After the necessary holding period
before you can use the certificate, you can continue to hold
the option certificate as an employee for up to ten years and
one month before making the decision whether or not to buy
shares of General Mills. After the full term of ten years and
one month, the rights under the certificate will lapse and
cannot then be used by the employee.
In general, you cannot sell or assign the option certificate
to any other person, and the specific provisions which cover
your rights in the option certificate are covered in the full
text of the Plan.
3. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Compensation Committee (the
"Committee"). The Committee shall be comprised solely of
non-employee, independent members of the Board of Directors (the
"Board") appointed in accordance with the Company's Certificate of
Incorporation. Subject to the provisions of Section 14, the Committee
shall have authority to adopt rules and regulations for carrying out
the purpose of the Plan, select the employees to whom Awards will be
made ("Participants"), determine the number of shares to be awarded
and the other terms and conditions of Awards in accordance with the
Plan provisions and interpret, construe and implement the provisions
of the Plan; provided that if at any time Rule 16b-3 or any successor
rule ("Rule 16b-3") under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), so permits, without adversely affecting the
ability of the Plan to comply with the conditions for exemption from
Section 16 of the 1934 Act (or any successor provisions) provided by
Rule 16b-3, the Committee may delegate its duties under the Plan in
whole or in part, on such terms and conditions, to the Chief
Executive Officer and to other senior officers of the Company;
provided further, that only the Committee may select and make other
decisions as to Awards to Participants who are subject to Section 16
of the 1934 Act and to other executives of the Company. The Committee
(or its permitted delegate) may correct any defect or supply any
omission or reconcile any inconsistency in any agreement relating to
any Award under the Plan in the manner and to the extent it deems
necessary. Decisions of the Committee (or its permitted delegate)
shall be final, conclusive and binding upon all parties, including
the Company, stockholders and Participants.
4. COMMON STOCK SUBJECT TO THE PLAN
The shares of common stock of the Company ($.10 par value) ("Common
Stock") to be issued upon exercise of a Stock Option, awarded as
Restricted Stock, or issued upon expiration of the restricted period
for Restricted Stock Units, may be made available from the authorized
but unissued Common Stock, shares of Common Stock held in the
Company's treasury, or Common Stock purchased by the Company on the
open market or otherwise. Approval of the Plan by the stockholders of
the Company shall constitute authorization to use such shares for the
Plan.
The Committee, in its discretion, may require as a condition to the
grant of Stock Options, Restricted Stock or Restricted Stock Units
(collectively, "Awards"), the deposit of Common Stock owned by the
Participant receiving such grant, and the forfeiture of such Awards,
if such deposit is not made or maintained during the required holding
period or the applicable restricted period. Such shares of deposited
Common Stock may not be otherwise sold, pledged or disposed of during
the applicable holding period or restricted period. The Committee may
also determine whether any shares issued upon exercise of a Stock
Option shall be restricted in any manner.
Subject to the provisions of the next succeeding paragraph, the
maximum aggregate number of shares of Common Stock authorized under
the Plan for which Awards may be granted under the Plan is 8,000,000;
provided that if during the term of the Plan the Company repurchases
shares of Common Stock, on the open market or otherwise and in
compliance with the rules and regulations of the Securities and
Exchange Commission, additional Awards may be granted equal to the
number of shares repurchased, subject that no more than 4,000,000
additional shares of Common Stock shall be authorized for Awards
hereunder; and provided further that the total number of shares of
Common Stock that shall be available for Restricted Stock and
Restricted Stock Unit Awards under the Plan shall be limited to 4% of
the total shares authorized for Award hereunder. 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.
6. PURCHASE PRICE OF STOCK OPTIONS
The purchase price for each share of Common Stock issuable under a
Stock Option shall not be less than 100% of the Fair Market Value of
the shares of Common Stock on the date of grant. "Fair Market Value"
as used in the Plan shall equal the mean of the high and low price of
the Common Stock on the New York Stock Exchange on the applicable
date.
7. STOCK OPTION TERM AND TYPE
The term of any Stock Option as determined by the Committee shall not
exceed 10 years and one month from the date of grant and shall expire
as of the close of business on the last day of the designated term,
unless terminated earlier under the provisions of the Plan. Stock
Option grants under the Plan shall be Non-Qualified Stock Options
governed by section 83 of the Internal Revenue Code of 1986, as
amended (the "Code").
8. EXERCISE OF STOCK OPTIONS
Except as provided in Sections 12 and 13 (Change of Control and
Termination of Employment), each Stock Option may be exercised only
after five years of the Participant's continued employment with the
Company.
An optionee exercising a Stock Option shall give notice to the
Company of such exercise and of the number of shares elected to be
purchased prior to 4:30 P.M. CST/CDT on the day of exercise, which
must be a business day at the executive offices of the Company. At
the time of purchase, the Participant shall tender the full purchase
price of the shares purchased. Until such payment has been made and a
certificate or certificates for the shares purchased has been issued
in the Participant's name, the Participant shall possess no
stockholder rights with respect to such shares. Payment of such
purchase price shall be made to the Company, subject to any
applicable rule or regulation adopted by the Committee:
(i) in cash (including check, draft, money order or wire
transfer made payable to the order of the Company);
(ii) through the delivery of shares of Common Stock owned by
the Participant; or
(iii) by a combination of (i) and (ii) above.
For determining the amount of the payment, Common Stock delivered
pursuant to (ii) or (iii) shall have a value equal to the Fair Market
Value of the Common Stock on the date of exercise.
9. RESTRICTED STOCK AND RESTRICTED STOCK UNITS
With respect to Awards of Restricted Stock and Restricted Stock
Units, the Committee shall:
(i) select Participants to whom Awards will be made,
provided that Restricted Stock Units may only be awarded
to those employees of the Company who are employed in a
country other than the United States;
(ii) determine the number of shares of Restricted Stock or
the number of Restricted Stock Units to be awarded;
(iii) determine the length of the restricted period, which
shall be no less than three years;
(iv) determine the purchase price, if any, to be paid by the
Participant for Restricted Stock or Restricted Stock
Units; and
(v) determine any restrictions other than those set forth in
this Section 9.
Any shares of Restricted Stock granted under the Plan may be
evidenced in such manner as the Committee deems appropriate,
including, without limitation, book-entry registration or
issuance of stock certificates, and may be held in escrow.
Subject to the restrictions set forth in this Section 9, each
Participant who receives Restricted Stock shall have all rights
as a stockholder with respect to such shares, including the
right to vote the shares and receive dividends and other
distributions.
Each Participant who receives Restricted Stock Units shall be
eligible to receive, at the expiration of the applicable
restricted period, one share of Common Stock for each Restricted
Stock Unit awarded, and the Company shall issue to and register
in the name of each such Participant a certificate for that
number of shares of Common Stock. Participants who receive
Restricted Stock Units shall have no rights as stockholders with
respect to such Restricted Stock Units until such time as share
certificates for Common Stock are issued to the Participants;
provided, however, that quarterly during the applicable
restricted period for all Restricted Stock Units awarded
hereunder, the Company shall pay to each such Participant an
amount equal to the sum of all dividends and other distributions
paid by the Company during the prior quarter on that equivalent
number of shares of Common Stock.
Subject to the provisions of Section 12, for awards of
Restricted Stock or Restricted Stock Units which have a deposit
requirement, a Participant will be eligible to vest only in
those shares of Restricted Stock or Restricted Stock Units for
which personally-owned shares are on deposit with the Company as
of the date the Participant's employment with the Company
terminates.
10. NON-TRANSFERABILITY
Except as otherwise provided in Section 9, no shares of Restricted
Stock and no Restricted Stock Units shall be sold, exchanged,
transferred, pledged, or otherwise disposed of during the restricted
period. No Stock Options granted under this Plan shall be
transferable by a Participant otherwise than (i) by the Participant's
last will and testament or (ii) by the applicable laws of descent and
distribution, and such Stock Options shall be exercised during the
Participant's lifetime only by the Participant or his or her guardian
or legal representative. Other than as set forth herein, no Award
under the Plan shall be subject to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, and any attempt
to do so shall be void.
11. WITHHOLDING TAXES
It shall be a condition to the obligation of the Company to deliver
shares upon the exercise of a Stock Option, the vesting of Restricted
Stock or Restricted Stock Units and the corresponding issuance of
shares of unrestricted Common Stock, that the Participant pay to the
Company cash in an amount equal to all federal, state, local and
foreign withholding taxes required to be collected in respect
thereof.
Notwithstanding the foregoing, to the extent permitted by law and
pursuant to such rules as the Committee may adopt, a Participant may
authorize the Company to satisfy any such withholding requirement by
directing the Company to withhold from any shares of Common Stock to
be issued, all or a portion of such number of shares as shall be
sufficient to satisfy the withholding obligation, provided that in
the case of the vesting of Restricted Stock or Restricted Stock
Units, the number of shares of Common Stock to be issued equals or
exceeds 500.
12. CHANGE OF CONTROL
Each outstanding 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 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 Participant's
outstanding Stock Options, except those granted to
Participants who are subject to Section 16 of the 1934 Act,
may be exercised until the expiration of the Stock Options
in accordance with their original terms.
B. Death
If a Participant should die while employed by the Company,
any Stock Option previously granted under this Plan may be
exercised by the person designated in such Participant's
last will and testament or, in the absence of such
designation, by the Participant's estate, to the full extent
that such Stock Option could have been exercised by such
Participant immediately prior to death. Further, with
respect to outstanding Stock Option grants which, as of the
date of death, are not yet exercisable, any such option
grant shall vest and become exercisable in a pro-rata
amount, based on the full months of employment completed
during the full vesting period of the Stock Option from the
date of grant to the date of death.
With respect to Stock Option grants which require the
deposit of owned Common Stock as a condition to obtaining
exercise rights, in the event a Participant should die while
employed by the Company, said Stock Options may be exercised
as provided in the first paragraph of this Section 13B,
subject to the following special conditions:
(i) any restrictions on the sale of shares issued in
respect of any such Stock Option shall cease; and
(ii) any owned Common Stock deposited by the Participant
pursuant to said grant shall be promptly returned to
the person designated in such Participant's last will
and testament or, in the absence of such designation,
to the Participant's estate, and all requirements
regarding deposit by the Participant shall be
terminated.
A Participant who dies during any applicable restricted
period shall vest in a proportionate number of shares of
Restricted Stock or Restricted Stock Units, effective as of
the date of death. Such proportionate vesting shall be
pro-rata, based on the number of full months of employment
completed during the restricted period prior to the date of
death, as a percentage of the applicable restricted period.
C. Retirement
The Committee shall determine, at the time of grant, the
treatment of the Stock Option upon the retirement of the
Participant. Unless other terms are specified in the
original Stock Option grant, if the termination of
employment is due to a Participant's retirement on or after
age 55, the Participant may exercise a Stock Option, subject
to the original terms and conditions of the Stock Option,
including any Stock Option granted under the Plan prior to
such retirement. With respect to Stock Option grants which
require the deposit of owned Common Stock as a condition to
obtaining rights, any restrictions on the sale of shares
issued in respect of any such Stock Option shall lapse at
the date of any such retirement.
A Participant who retires on or after the date he or she
attains age 65 shall fully vest in all shares of Restricted
Stock or Restricted Stock Units, effective as of the date of
retirement (unless any such award specifically provides
otherwise).
A Participant who takes early retirement (after age 55, but
prior to age 65) during any applicable restricted period may
elect either of the following alternatives with respect to
Restricted Stock or Restricted Stock Units (unless any such
award specifically provides otherwise):
(a) Leave owned shares on deposit with the Company and
vest in all shares of Restricted Stock or
Restricted Stock Units, effective as of the
earlier of the date the Participant attains age 65
or the termination date of the applicable
restricted period; or
(b) Withdraw owned shares and vest in a proportionate
number of shares of Restricted Stock or Restricted
Stock Units, effective as of the date the shares
on deposit are withdrawn. Such proportionate
vesting shall be pro-rata, based on the number of
full months of employment completed during the
restricted period prior to the date of early
retirement, as a percentage of the applicable
restricted period.
D. Spin-offs
If the termination of employment is due to the cessation,
transfer, or spin-off of a complete line of business of the
Company, the Committee, in its sole discretion, shall
determine the treatment of all outstanding Awards under the
Plan.
14. AMENDMENTS OF THE PLAN
The Plan may be terminated, modified, or amended by the Board of
Directors of the Company. The Committee may from time to time
prescribe, amend and rescind rules and regulations relating to the
Plan. Subject to the approval of the Board of Directors, the
Committee may at any time terminate, modify, or suspend the operation
of the Plan, provided that no action shall be taken by the Board of
Directors or the Committee without the approval of the stockholders
of the Company which would:
(i) materially increase the number of shares which may be
issued under the Plan;
(ii) materially increase the benefits accruing to Participants
under the Plan; or
(iii) materially modify the requirements as to eligibility for
participating in the Plan.
The Board of Directors shall have authority to cause the Company to
take any action related to the Plan which may be required to comply
with the provisions of the Securities Act of 1933, as amended, the
1934 Act, and the rules and regulations prescribed by the Securities
and Exchange Commission. Any such action shall be at the expense of
the Company.
No termination, modification, suspension, or amendment of the Plan
shall alter or impair the rights of any Participant pursuant to a
prior Award without the consent of the Participant. There is no
obligation for uniformity of treatment of Participants under the
Plan.
15. FOREIGN JURISDICTIONS
The Committee may adopt, amend, and terminate such arrangements, not
inconsistent with the intent of the Plan, as it may deem necessary or
desirable to make available tax or other benefits of the laws of any
foreign jurisdiction, to employees of the Company who are subject to
such laws and who receive Awards under the Plan.
16. NOTICE
All notices to the Company regarding the Plan shall be in writing,
effective as of actual receipt by the Company, and shall be sent to:
General Mills, Inc.
Number One General Mills Boulevard
Minneapolis, Minnesota 55426
Attention: Corporate Compensation
Effective September 20, 1993
As Amended June 27, 1994
As Amended February 26, 1996
(effective as of August 10, 1994)
As Amended June 24, 1996
EXHIBIT 11
<TABLE>
GENERAL MILLS, INC.
STATEMENT OF DETERMINATION OF COMMON SHARES AND
COMMON SHARE EQUIVALENTS
(in millions)
<CAPTION>
Weighted average number of
common shares and common share
equivalents assumed outstanding
For the Fiscal Years Ended
--------------------------
May 25, 1997 May 26, 1996 May 28, 1995
------------ ------------ ------------
<S> <C> <C> <C>
Weighted average number of common shares outstanding,
excluding common stock held in treasury (a)................ 158.2 158.9 158.0
Common share equivalents resulting from the assumed
exercise of certain stock options (b)...................... 3.6 * 3.1 * 2.1 *
---- ---- ----
Total common shares and common share equivalents.............. 161.8 162.0 160.1
===== ===== =====
<FN>
____________________
Notes:
(a) Computed as the weighted average net shares outstanding on stock-exchange
trading days.
(b) Common share equivalents are computed by the "treasury stock" method. This
method first determines the number of shares issuable under stock options
that had an option price below the average market price for the period, and
then deducts the number of shares that could have been repurchased with the
proceeds of options exercised.
____________________
* Common share equivalents are not material. As a result, earnings per share
have been computed using the weighted average of common shares outstanding
of 158.2 million, 158.9 million and 158.0 million for fiscal 1997, 1996 and
1995, respectively.
</FN>
</TABLE>
EXHIBIT 12
<TABLE>
<CAPTION>
GENERAL MILLS, INC.
RATIO OF EARNINGS TO FIXED CHARGES
Fiscal Year Ended
-----------------
May 25, May 26, May 28, May 29, May 30,
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges........ 6.54 6.94 4.10 6.18 8.62
</TABLE>
For purposes of computing the ratio of earnings to fixed charges, earnings
represent pretax income from continuing operations, plus pretax earnings or
losses of joint ventures, plus fixed charges (net of capitalized interest).
Fixed charges represent interest (whether expensed or capitalized) and one-third
(the proportion deemed representative of the interest factor) of rents of
continuing operations.
EXHIBIT 13
MANAGEMENT'S DISCUSSION AND ANALYSIS
General Mills' fundamental performance goal is to deliver good growth with high
returns. Specifically, our objective is to generate financial results that place
us within the top 10 percent of American public companies measured by the
combination of earnings per share growth and return on capital. In 1997, our
return on average total capital excluding unusual items was 24.6 percent, among
the very highest in U.S. industry. However, earnings of $3.00 per share before
unusual items were unchanged from the prior year and below our expectations.
Three primary factors hindered 1997 earnings progress. The most significant
of these was the impact of price declines implemented during the spring and
summer of 1996 in the U.S. ready-to-eat cereal market. In June 1996, our Big G
cereal business reduced prices an average 11 percent on brands accounting for 42
percent of volume, and at that time we indicated the impact on Big G's earnings
would cause General Mills' overall earnings per share progress in 1997 to fall
below our goal of 12 percent average annual growth. The second factor to affect
1997 earnings was lower-than-expected domestic unit volume growth in the last
half of the year. This shortfall was largely due to second-half volume declines
for Big G cereals, where reductions in marketing spending (made to partially
offset the price declines) interrupted momentum. Finally, 1997 earnings were
reduced approximately 5 cents per share as anticipated by the acquisition of the
Ralcorp branded cereal and snacks businesses completed on January 31.
We expect our earnings growth to resume in fiscal 1998 due to improving
trends we currently see in the U.S. cereal market. In July 1997, Big G increased
its cereal prices an average of 2.6 percent to partially offset component cost
inflation experienced over the past several years. Big G cereal prices remain
below those of four years ago. Our rate of earnings growth for the year will
depend in large part on the timing and rate of improvement in U.S. cereal
category growth. Over the longer term, we believe prospects for achieving our
goals of superior growth and returns remain excellent.
RESULTS OF OPERATIONS IN 1997 vs. 1996
For the year ended May 25, 1997, earnings before unusual items totaled $474.6
million, or $3.00 per share. These results were essentially flat compared with
the $476.4 million, or $3.00 per share, earned in the previous year. In the
first quarter of 1997, we adopted Statement of Financial Accounting Standards
(SFAS) No. 121, Accounting for the Impairment of Long-lived Assets, and recorded
a non-cash after-tax charge of $29.2 million ($48.4 million pre-tax), or 18
cents per share. Including this unusual item, fiscal 1997 earnings per share
totaled $2.82. Reported sales grew 4 percent to $5.61 billion despite the
approximately $100 million reduction in expected cereal sales.
Total domestic unit volume for established businesses grew 3 percent, and
including the acquired Ralcorp brands for the final four months of the year, the
total U.S. volume growth rate was more than 4 percent. Our growth momentum was
broadly based, with Betty Crocker dinner and side dish volume up 4 percent,
yogurt volume up 11 percent, and volumes for snacks and Big G cereals -
excluding the acquired Ralcorp brands - up 5 percent and 3 percent,
respectively. Betty Crocker desserts volume was down 2 percent from strong
prior-year levels. Market shares were even or up for nearly all of our major
retail businesses. In addition, foodservice operations posted a 4 percent volume
gain for the year.
For Big G cereals, 1997 unit volume including the acquired Chex and Cookie
Crisp brands was up 4 percent. However, total sales of $2.2 billion were
essentially flat due to the price decline, and earnings were lower as reductions
in marketing spending offset only a portion of the profit impact. Cereal
category volume grew 1 percent in all measured outlets during 1997. Big G's
pound market share grew slightly to 23.4 percent, and including the Chex and
Cookie Crisp brands our total cereal market share increased to over 26 percent.
International operations, including our proportionate
share of joint ventures, generated 7 percent unit volume growth. Canadian
operations posted a 10 percent volume gain and broad-based market share
progress. Cereal Partners Worldwide (CPW), our cereal joint venture with Nestle,
recorded a 15 percent volume gain for the 12 months ending in March 1997 that
are included in our fiscal year. Market shares were even or up in most
established CPW markets, and the venture continued to enter new markets,
including Argentina, Brazil and several eastern European countries. Snack
Ventures Europe (SVE), our snacks joint venture with PepsiCo, reported a 6
percent unit volume decline and lower sales compared with strong prior-year
levels that included heavy promotional activity in key markets. The
International Dessert Partners (IDP) joint venture in Latin America with CPC
International completed its first year of operations. Total international
earnings were below the prior year's, primarily due to year-one development
spending for IDP and SVE's key market volume declines.
Net interest expense totaled $100.5 million in 1997, compared with $101.4
million in 1996 and $101.2 million in 1995. We expect net interest expense to be
higher in fiscal 1998 due to increased borrowings associated with our Ralcorp
acquisition and our ongoing share repurchase program.
The 1997 effective income tax rate on earnings as reported was 36.4 percent.
Excluding unusual items (the adoption of SFAS No. 121 discussed above), the
effective tax rate was 36.6 percent. That compares with effective tax rates of
36.8 percent in 1996 and 36.5 percent in 1995.
Excluding the deflation in cereal prices discussed earlier, it is our view
that changes in the rate of inflation have not had a significant effect on
overall profitability from continuing operations in the three most recent years.
Management attempts to minimize the effects of inflation through appropriate
planning and operating practices.
Adoption of SFAS No. 128, "Earnings per Share" and No. 129, "Disclosure of
Information about Capital Structure" is required in fiscal 1998. There will be
no impact on our financial condition or results of operations due to the
adoption of these rules.
1996 COMPARED WITH 1995
Fiscal 1996 earnings of $476.4 million, or $3.00 per share, were up 28 percent
from the $371.3 million, or $2.35 per share, earned by continuing operations
before restructuring charges in 1995. Reported sales for fiscal 1996 increased 8
percent to $5.42 billion.
Our performance in 1996 reflected unit volume gains across the company's
domestic food businesses, continued productivity gains, and accelerating
international performance. In the United States, unit volume grew 7 percent. Big
G cereals led company performance, recording 10 percent unit volume growth that
more than recovered volume lost in 1995 during the oats-related business
disruption. Betty Crocker desserts volume grew 5 percent, Helper dinner mix
volume was up 16 percent, and our snack business posted a 2 percent volume
increase. Gold Medal flour, yogurt operations and the foodservice business also
achieved good volume gains. International results included overall unit volume
growth of 13 percent and a more than 50 percent improvement in earnings.
The fiscal 1995 earnings of $2.35 per share before restructuring charges
reflected the oats-related disruption experienced by Big G cereals during the
first quarter, as well as lower shipments of domestic snack products and the
one-time impact of strategic trade promotion changes. During fiscal 1995, we
spun off our restaurant operations as an independent public company and took key
actions to sharpen focus on our best growth and return opportunities in consumer
foods. Consumer foods restructuring charges in 1995 totaled $111.6 million after
tax, or 71 cents per share, and related primarily to elimination of our
least-efficient manufacturing capacity and realignment of the sales
organization. Including these charges, 1995 earnings for continuing operations
totaled $259.7 million, or $1.64 per share.
FINANCIAL CONDITION
It is our view that the most important measures of financial strength are the
ratios of cash flow to debt and fixed charge coverage. The cash flow to debt
ratio measures the amount of cash that the company generates each year as a
percentage of its total debt. The fixed charge coverage ratio measures the
number of times each year that the company earns enough to cover its fixed
charges. Fiscal 1997 fixed charge coverage of 6.9 times excluding unusual items
remains very strong. Cash flow to debt of 35 percent declined this year,
reflecting lower cereal earnings, and increased debt associated with the Ralcorp
transaction and our share repurchase activity. We expect this ratio to remain at
this level for 1998.
Our balance sheet reflects the impact of two recent transactions. At the end
of fiscal 1995, when we spun off our restaurant operations, stockholders' equity
was reduced by approximately $1.2 billion. In our acquisition of the branded
ready-to-eat cereal and snack mix businesses from Ralcorp Holdings, Inc., we
issued approximately $355 million in General Mills common stock (approximately
5.4 million shares) to Ralcorp shareholders and assumed about $215 million of
Ralcorp public debt and accrued interest. This acquisition has been accounted
for under the purchase method of accounting. Acquired goodwill totals
approximately $555 million, and will be amortized on a straight-line basis over
40 years. Please see Note Two to the consolidated financial statements for a
complete discussion of this acquisition.
The company's capital structure is shown in the accompanying table:
CAPITAL STRUCTURE
- --------------------------------------------------------------------------------
In Millions May 25, 1997 May 26, 1996
- --------------------------------------------------------------------------------
Notes payable $ 204.3 $ 141.6
Current portion of long-term debt 139.0 75.4
Long-term debt 1,530.4 1,220.9
Deferred income taxes - tax leases 143.7 157.5
- --------------------------------------------------------------------------------
Total debt 2,017.4 1,595.4
Debt adjustments:
Leases - debt equivalent 184.4 159.4
Marketable investment, at cost (132.7) (171.8)
Adjusted debt 2,069.1 1,583.0
Stockholders' equity 494.6 307.7
Total capital $2,563.7 $1,890.7
================================================================================
We intend to manage our businesses and financial ratios so as to maintain an
"A" bond rating, which allows access to financing at reasonable costs.
Currently, General Mills' publicly issued long-term debt carries ratings of "A2"
(Moody's Investors Services, Inc.) and "A+" (Standard and Poor's Corporation).
Our commercial paper has ratings of "P-1" (Moody's) and "A-1" (Standard and
Poor's) in the United States and "R-1 (middle)" in Canada from Dominion Bond
Rating Service.
We selectively use derivatives to hedge financial risks, primarily interest
rate volatility and foreign currency fluctuations. The derivatives are generally
treated as hedges for accounting purposes. We manage our debt structure through
both issuance of fixed and floating-rate debt, and the use of derivatives. The
debt equivalent of our leases and deferred income taxes related to tax leases
are both fixed-rate obligations. The accompanying table, when reviewed in
conjunction with the capital structure table, shows the composition of our debt
structure including the impact of derivatives.
DEBT STRUCTURE
- --------------------------------------------------------------------------------
Dollars in Millions May 25, 1997 May 26, 1996
- --------------------------------------------------------------------------------
Floating-rate debt $ 706.0 34% $ 280.3 18%
Fixed-rate debt 1,035.0 50 985.8 62
Leases - debt equivalent 184.4 9 159.4 10
Deferred income taxes -
tax leases 143.7 7 157.5 10
- --------------------------------------------------------------------------------
Total debt $2,069.1 100% $1,583.0 100%
================================================================================
Commercial paper is a continuing source of short-term financing. Bank credit
lines are maintained to ensure availability of short-term funds on an as-needed
basis. As of May 25, 1997, we had fee-paid credit lines of $700 million.
Our shelf registration statement permits issuance of up
to $500 million net proceeds in unsecured debt securities. The shelf
registration authorizes a medium-term note program that provides additional
flexibility in quickly accessing the debt markets.
Sources and uses of cash in the past three years are shown in the
accompanying table:
CASH SOURCES (USES)
- --------------------------------------------------------------------------------
In Millions 1997 1996 1995
- --------------------------------------------------------------------------------
From continuing
operations $ 594.1 $ 676.4 $ 457.4
From discontinued
operations (6.8) (16.6) 210.1
Fixed assets and
other investments,
net - continuing (231.8) (173.9) (231.6)
Change in marketable
securities 39.7 .9 27.4
Proceeds from disposition
of businesses 6.5 - 188.3
Investment activities, net
discontinued operations - - (357.5)
Increase (decrease) in
outstanding debt - net 221.9 (164.8) (312.6)
Financing activities -
discontinued operations - - 347.9
Common stock issued 60.5 38.0 24.3
Treasury stock purchases (361.8) (35.6) (57.7)
Dividends paid (320.7) (303.6) (297.2)
Other (9.4) (13.2) (13.6)
- --------------------------------------------------------------------------------
Increase (decrease)
in cash and
cash equivalents $ (7.8) $ 7.6 $ (14.8)
================================================================================
Continuing operations generated $82.3 million less cash in 1997 than in 1996,
primarily due to lower earnings from U.S. cereals and an increased impact from
the change in working capital.
Capital investment for fixed assets and joint venture development totaled
approximately $209 million in 1997, compared to $174 million in 1996. For fiscal
1998 through 2000, we expect our capital investment needs (including
joint-venture funding) to average about $225 million annually. As we meet our
earnings growth expectations, cash flow from operations after capital
investments should increase and would be available to support growth
initiatives, dividend growth and stock repurchase activity.
We conduct an ongoing share repurchase program with the goal of reducing
shares outstanding an average 1 to 2 percent annually. In 1997, we repurchased
6.2 million shares of common stock for about $362 million. This included
open-market purchases equivalent to approximately one half of the 5.4 million
shares issued in February in the Ralcorp transaction. Average shares outstanding
for 1997 were 158.2 million, down 700,000 shares from the prior year.
CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION
Forward-looking statements, based on management's current views and assumptions,
are made throughout this Management's Discussion and Analysis and elsewhere in
this report to shareholders. These statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical results and those presently anticipated or projected. Among the
factors that may affect operating results are the following: competitive
dynamics in the U.S. ready-to-eat cereal market, including competitive
promotional spending levels; actual unit volume growth achieved and product mix;
fluctuations in the cost and availability of supply-chain resources; general
economic conditions, including currency rate fluctuations; and the effect of
stock market conditions on our common stock repurchase activity. Our 1997 Form
10-K contains further discussion of these matters.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Stockholders and the Board of Directors of
General Mills, Inc.:
We have audited the accompanying consolidated balance sheets of General Mills,
Inc. and subsidiaries as of May 25, 1997 and May 26, 1996, and the related
consolidated statements of earnings and cash flows for each of the fiscal years
in the three-year period ended May 25, 1997. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of General
Mills, Inc. and subsidiaries as of May 25, 1997 and May 26, 1996, and the
results of their operations and their cash flows for each of the fiscal years in
the three-year period ended May 25, 1997 in conformity with generally accepted
accounting principles.
As discussed in Note Four to the consolidated financial statements, the
Company adopted the provisions of the Financial Accounting Standards Board's
Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, in fiscal 1997.
/s/ KPMG Peat Marwick LLP
Minneapolis, Minnesota
June 26, 1997
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF EARNINGS
- -----------------------------------------------------------------------------------------------------
In Millions, Except per Share Data, Fiscal Year Ended May 25, 1997 May 26, 1996 May 28, 1995
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Continuing Operations:
Sales $5,609.3 $5,416.0 $5,026.7
Costs and Expenses:
Cost of sales 2,328.4 2,241.0 2,123.0
Selling, general and administrative 2,239.2 2,128.3 2,008.3
Depreciation and amortization 182.8 186.7 191.4
Interest, net 100.5 101.4 101.2
Unusual items 48.4 - 183.2
- -----------------------------------------------------------------------------------------------------
Total Costs and Expenses 4,899.3 4,657.4 4,607.1
- -----------------------------------------------------------------------------------------------------
Earnings from Continuing Operations before Taxes
and Earnings (Losses) of Joint Ventures 710.0 758.6 419.6
Income Taxes 258.3 279.4 153.3
Earnings (Losses) from Joint Ventures (6.3) (2.8) (6.6)
- -----------------------------------------------------------------------------------------------------
Earnings from Continuing Operations 445.4 476.4 259.7
Discontinued Operations after Taxes - - 107.7
- -----------------------------------------------------------------------------------------------------
Net Earnings $ 445.4 $ 476.4 $ 367.4
=====================================================================================================
Earnings per Share:
Continuing operations $ 2.82 $ 3.00 $ 1.64
Discontinued operations - - .69
- -----------------------------------------------------------------------------------------------------
Net Earnings per Share $ 2.82 $ 3.00 $ 2.33
=====================================================================================================
Average Number of Common Shares 158.2 158.9 158.0
=====================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
- -----------------------------------------------------------------------------------------------------
In Millions May 25, 1997 May 26, 1996
----------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 12.8 $ 20.6
Receivables, less allowance for doubtful accounts of $4.1 in
both 1997 and 1996 419.1 337.8
Inventories 364.4 395.5
Prepaid expenses and other current assets 107.3 132.6
Deferred income taxes 107.7 108.6
- -----------------------------------------------------------------------------------------------------
Total Current Assets 1,011.3 995.1
Land, Buildings and Equipment, at cost 1,279.4 1,312.4
Other Assets 1,611.7 987.2
- -----------------------------------------------------------------------------------------------------
Total Assets $3,902.4 $3,294.7
=====================================================================================================
Liabilities and Equity
Current Liabilities:
Accounts payable $ 599.7 $ 590.7
Current portion of long-term debt 139.0 75.4
Notes payable 204.3 141.6
Accrued taxes 97.0 124.3
Accrued payroll 129.4 124.7
Other current liabilities 123.1 135.2
- -----------------------------------------------------------------------------------------------------
Total Current Liabilities 1,292.5 1,191.9
Long-term Debt 1,530.4 1,220.9
Deferred Income Taxes 272.1 250.0
Deferred Income Taxes - Tax Leases 143.7 157.5
Other Liabilities 169.1 166.7
- -----------------------------------------------------------------------------------------------------
Total Liabilities 3,407.8 2,987.0
- -----------------------------------------------------------------------------------------------------
Stockholders' Equity:
Cumulative preference stock, none issued - -
Common stock, 204.2 shares issued 578.0 384.3
Retained earnings 1,535.4 1,408.6
Less common stock in treasury, at cost, shares of 44.3 in 1997
and 45.2 in 1996 (1,501.9) (1,367.4)
Unearned compensation and other (58.0) (61.2)
Cumulative foreign currency adjustment (58.9) (56.6)
- -----------------------------------------------------------------------------------------------------
Total Stockholders' Equity 494.6 307.7
- -----------------------------------------------------------------------------------------------------
Total Liabilities and Equity $3,902.4 $3,294.7
=====================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
- ----------------------------------------------------------------------------------------------------------------------------
In Millions, Fiscal Year Ended May 25, 1997 May 26, 1996 May 28, 1995
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows - Operating Activities:
Earnings from continuing operations $ 445.4 $ 476.4 $ 259.7
Adjustments to reconcile earnings to cash flow:
Depreciation and amortization 182.8 186.7 191.4
Deferred income taxes 20.9 42.4 59.0
Change in current assets and liabilities, net of effects
from business acquired (86.4) (25.9) (227.8)
Unusual expenses 48.4 - 183.2
Other, net (17.0) (3.2) (8.1)
- ----------------------------------------------------------------------------------------------------------------------------
Cash provided by continuing operations 594.1 676.4 457.4
Cash provided (used) by discontinued operations (6.8) (16.6) 210.1
- ----------------------------------------------------------------------------------------------------------------------------
Net Cash Provided by Operating Activities 587.3 659.8 667.5
- ----------------------------------------------------------------------------------------------------------------------------
Consolidated Statements of Cash Flow
Cash Flows - Investment Activities:
Purchases of land, buildings and equipment (162.5) (128.8) (156.5)
Investments in businesses, intangibles and affiliates, net of dividends (42.0) (40.0) (48.8)
Purchases of marketable securities (8.0) (21.6) (21.7)
Proceeds from sale of marketable securities 47.7 22.5 49.1
Proceeds from disposal of land, buildings and equipment 2.6 6.2 1.2
Proceeds from disposition of businesses 6.5 - 188.3
Other, net (29.9) (11.3) (27.5)
Discontinued operations investment activities, net (primarily ne
restaurants) - - (357.5)
- ----------------------------------------------------------------------------------------------------------------------------
Net Cash Used by Investment Activities (185.6) (173.0) (373.4)
- ----------------------------------------------------------------------------------------------------------------------------
Cash Flows - Financing Activities:
Increase (decrease) in notes payable 312.7 (42.4) (330.4)
Issuance of long-term debt 76.2 42.3 135.0
Payment of long-term debt (167.0) (164.7) (117.2)
Common stock issued 60.5 38.0 24.3
Purchases of common stock for treasury (361.8) (35.6) (57.7)
Dividends paid (320.7) (303.6) (297.2)
Other, net (9.4) (13.2) (13.6)
Pre spin-off borrowings by Darden (Note Three) - - 347.9
- ----------------------------------------------------------------------------------------------------------------------------
Net Cash Used by Financing Activities (409.5) (479.2) (308.9)
- ----------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Cash and Cash Equivalents (7.8) 7.6 (14.8)
Cash and Cash Equivalents - Beginning of Year 20.6 13.0 27.8
- ----------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents - End of Year $ 12.8 $ 20.6 $ 13.0
============================================================================================================================
Cash Flow from Changes in Current Assets and Liabilities:
Receivables $ (80.0) $ (59.5) $ (11.9)
Inventories 45.0 (23.7) (52.7)
Prepaid expenses and other current assets 2.5 (6.3) (11.9)
Accounts payable (27.8) 93.2 (18.1)
Other current liabilities (26.1) (29.6) (133.2)
- ---------------------------------------------------------------------------------------------------------------------------
Change in Current Assets and Liabilities $ (86.4) $ (25.9) $(227.8)
===========================================================================================================================
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The preparation of the Consolidated Financial Statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
(A) Principles of Consolidation - The consolidated financial statements
include the following domestic and foreign operations: parent company and 100%
owned subsidiaries, and General Mills' investment in and share of net earnings
or losses of 20-50% owned companies.
Our fiscal year ends on the last Sunday in May. Years 1997, 1996 and 1995
each consisted of 52 weeks.
(B) Land, Buildings, Equipment and Depreciation - Buildings and equipment are
depreciated over estimated useful lives, primarily using the straight-line
method. Buildings are usually depreciated over 40 to 50 years and
equipment over three to 15 years. Accelerated depreciation methods are
generally used for income tax purposes.
When an item is sold or retired, the accounts are relieved of its cost and
related accumulated depreciation; the resulting gains and losses, if any, are
recognized.
(C) Inventories - Inventories are valued at the lower of
cost or market. Certain domestic inventories are valued using the LIFO method,
while other inventories are generally valued using the FIFO method.
(D) Intangible Assets - Goodwill represents the difference between the
purchase price of acquired companies and the related fair value of net assets
acquired and accounted for by the purchase method of accounting. Goodwill is
amortized on a straight-line basis over 40 years or less.
Intangible assets include an amount that offsets a minimum liability recorded
for a pension plan with assets less than accumulated benefits as required by
Financial Accounting Standard No. 87.
The costs of patents, copyrights and other intangible assets are amortized
evenly over their estimated useful lives. The Audit Committee of the Board of
Directors annually reviews goodwill and other intangibles. At its meeting on
February 24, 1997, the Audit Committee affirmed that the remaining amounts of
these assets have continuing value based upon a return on capital analysis.
(E) Recoverability of Long-Lived Assets - As discussed in Note Four, in 1997
we adopted Statement of Financial Accounting Standards No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of."
We review long-lived assets, including identifiable intangibles and
associated goodwill, for impairment when events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. An asset
is deemed impaired and written down to its fair value if expected associated
future cash flows are less than its carrying amount.
(F) Foreign Currency Translation - For most foreign operations, local
currencies are considered the functional currency. Assets and liabilities are
translated using the exchange rates in effect at the balance sheet date. Results
of operations are translated using the average exchange rates prevailing
throughout the period. Translation effects are accumulated in the foreign
currency adjustment in stockholders' equity.
(G) Financial Instruments - See Note Eight for a description of the
accounting policies related to financial instruments.
(H) Research and Development - All expenditures for research and development
are charged against earnings in the year incurred. The charges for 1997, 1996
and 1995 were $61.4 million, $60.1 million and $59.8 million, respectively.
(I) Advertising Costs - Advertising expense (including production and
communication costs) for 1997, 1996 and 1995 was $306.5 million, $319.7 million
and $323.7 million, respectively. Prepaid advertising costs (including
syndication properties) of $22.6 million and $24.2 million were reported as
assets at May 25, 1997 and May 26, 1996, respectively. We expense the production
costs of advertising the first time that the advertising takes place.
(J) Stock-based Compensation - We use the "intrinsic value-based method" for
measuring the cost of compensation paid in Company common stock. This method
defines our cost as the excess of the stock's market value at the time of the
grant over the amount that the employee is required to pay. Our stock option
plans require that the employee's payment (i.e., exercise price) is the market
value as of the grant date.
(K) Earnings per Share - Earnings per share has been determined by dividing
the appropriate earnings by the weighted average number of common shares
outstanding during the year. Common share equivalents were not material.
(L) Segment Information - We operate exclusively in the consumer foods
industry. On May 28, 1995 we spun off our restaurants segment. See Note Three.
(M) Statements of Cash Flows - For purposes of the statement of cash flows,
we consider all investments purchased with an original maturity of three months
or less to be cash equivalents.
(N) New Accounting Rules - In February 1997, the Financial Accounting
Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS)
No. 128, "Earnings per Share." This new standard requires dual presentation of
basic and diluted earnings per share (EPS) on the statement of earnings for all
entities with complex capital structures. Adoption of SFAS No. 128 is required
in our third quarter of 1998. Early adoption is not permitted. There will be no
impact on our financial condition or results of operations due to the adoption
of SFAS No. 128 and diluted EPS (including the effects of common stock
equivalents) will not be materially less than basic EPS.
SFASNo. 129, "Disclosure of Information about Capital Structure" was also
issued in February 1997. Our current disclosures regarding capital structure
will not be materially different under SFASNo. 129.
The Securities and Exchange Commission has adopted rules requiring expanded
disclosure of risks and policies concerning derivatives and market risk.
Adoption of these rules is required in our 1998. There will be no impact on our
financial condition or results of operations due to the adoption of these rules.
NOTE 2: ACQUISITION
On January 31, 1997, the Company acquired the branded ready-to-eat cereal and
snack mix businesses of Ralcorp Holdings, Inc., including its Chex and Cookie
Crisp brands. This acquisition included a Cincinnati, Ohio, manufacturing
facility that employs 240 people, and trademark and technology rights for the
branded products in the Americas. The purchase price of $570 million (subject to
a purchase price adjustment) involves a combination of the issuance of about
$355 million in General Mills common stock (approximately 5.4 million shares) to
Ralcorp shareholders and the assumption of about $215 million of Ralcorp public
debt and accrued interest. This acquisition has been accounted for under the
purchase method of accounting. The purchase price has been preliminarily
allocated based on estimated fair values at date of acquisition, pending final
determination of certain acquired balances. This preliminary allocation has
resulted in acquired goodwill of approximately $555 million, which is being
amortized on a straight-line basis over 40 years. The results of the acquired
businesses have been included in the consolidated financial statements since the
acquisition date. 1997 earnings were reduced approximately $.05 per share by the
acquisition.
The following unaudited pro forma information presents a summary of our
consolidated results of operations and the acquired branded ready-to-eat cereal
and snack mix businesses of Ralcorp as if the acquisition had occurred on May
29, 1995.
- ---------------------------------------------------------------
Fiscal Year
- ---------------------------------------------------------------
In Millions, Except per Share Data 1997 1996
- ---------------------------------------------------------------
Sales $5,892.0 $5,809.6
Net earnings 459.4 487.7
Net earnings per share 2.84 2.97
===============================================================
These unaudited pro forma results have been prepared for comparative purposes
only and include certain adjustments, such as additional amortization expense as
a result of goodwill and an increased interest expense on acquisition debt. They
do not purport to be indicative of the results of operations that actually would
have resulted had the combination occurred on May 29, 1995, or of future results
of operations of the consolidated entities.
NOTE 3: DISCONTINUED OPERATIONS
As of May 28, 1995, General Mills distributed to shareholders the common stock
of Darden Restaurants, Inc. (Darden). General Mills' shareholders received one
share of Darden for each share of General Mills common stock owned as of the
close of business on May 15, 1995. This distribution reduced stockholders'
equity by $1,218.7 million. Our former restaurant operations included in Darden
are presented as a part of discontinued operations for all periods presented.
On May 18, 1995, we sold our Gorton's frozen and canned seafood business to
Unilever United States, Inc. Gorton's is also included in discontinued
operations for all periods presented.
The results of the discontinued operations in 1995 are summarized as follows:
- ----------------------------------------------------------
In Millions 1995
- ----------------------------------------------------------
Total net sales $3,366.9
- ----------------------------------------------------------
Pre-tax earnings $ 80.0
Income taxes 17.9
- ----------------------------------------------------------
Net earnings - operations 62.1
Spin-off costs and other (7.7)
Gorton's sale and Red Lobster Japan
joint venture termination 53.3
- ----------------------------------------------------------
Discontinued operations, net $ 107.7
==========================================================
NOTE 4: UNUSUAL ITEMS
In 1997, we adopted Statement of Financial Accounting Standards (SFAS) No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of." The initial, non-cash charge upon adoption of SFAS 121 was
$48.4 million pre-tax, $29.2 million after tax ($.18 per share). The charge
represents a reduction in the carrying amounts of certain impaired assets to
their estimated fair value, determined on the basis of estimated cash flows or
net realizable value. The impairments relate to assets not currently in use,
assets significantly underutilized, and assets with limited planned future use.
In 1995, we recorded restructuring charges of $183.2 million pre-tax, $111.6
million after tax ($.71 per share) primarily related to shutting down and
scaling back production systems at four food manufacturing locations and
realignment of the sales organization. The charges included approximately $139
million in non-cash charges primarily related to asset write-offs and
approximately $44 million of cash charges, primarily related to disposal of
assets and severance costs. These restructuring activities were substantially
completed in 1996 and there has been no adjustment to the original reserve.
There is a remaining reserve of $9.1 million.
NOTE 5: INVESTMENTS IN JOINT VENTURES
We are involved in three joint ventures. We have a 50% equity interest in Cereal
Partners Worldwide (CPW), our joint venture with Nestle, S.A., which
manufactures and markets breakfast cereals outside North America. We have a
40.5% equity interest in Snack Ventures Europe (SVE), our joint venture with
PepsiCo, Inc., which manufactures and markets snack foods in continental Europe.
We have a 50% equity interest in International Dessert Partners (IDP), our joint
venture with CPC International Inc., which manufactures and markets baking mixes
and desserts in Latin America.
The joint ventures are reflected in our financial statements on an equity
accounting basis. We record our share of the earnings or (losses) of these joint
ventures. (The table that follows in this footnote reflects the joint ventures
on a 100% basis.) We also receive royalty income from these joint ventures,
incur various expenses (primarily research and development), and record the tax
impact of certain of the joint venture operations that are structured as
partnerships. Including all these factors, the effect on our net income related
to the joint ventures was a charge of $6.3 million, $2.8 million and $6.6
million in 1997, 1996 and 1995, respectively.
Our cumulative investment in these joint ventures (including our share of
earnings and losses) was $234.6 million, $229.8 million and $228.8 million at
the end of 1997, 1996 and 1995, respectively. We made aggregate investments in
the joint ventures of $46.5 million, $45.3 million and $51.6 million in 1997,
1996 and 1995, respectively. We received aggregate dividends from the joint
ventures of $7.5 million, $8.2 million and $7.3 million in 1997, 1996 and 1995,
respectively.
Summary combined financial information for the joint ventures on a 100% basis
follows. Since we record our share of CPW and IDP results on a two-month lag,
their information is included as of and for the twelve months ended March 31,
whereas the SVE information is consistent with our May year end.
COMBINED FINANCIAL INFORMATION -
JOINT VENTURES - 100% BASIS
- -------------------------------------------------------------------------------
Fiscal Year Ended
- -------------------------------------------------------------------------------
In Millions May 25, 1997 May 26, 1996 May 28, 1995
- -------------------------------------------------------------------------------
Sales $1,627.6 $1,599.5 $1,326.3
Gross Profit 843.5 838.1 686.2
Earnings (losses)
before Taxes (7.3) 12.1 .6
Earnings (losses)
after Taxes (24.7) (13.1) (18.9)
===============================================================================
In Millions May 25, 1997 May 26, 1996
- --------------------------------------------------------------------------------
Current Assets $419.6 $379.4
Non-current Assets 602.4 648.1
Current Liabilities 488.8 469.8
Non-current Liabilities 106.1 87.2
================================================================================
Our proportionate share of the sales of the joint ventures was $728.2
million, $705.7 million and $584.0 million for 1997, 1996 and 1995,
respectively.
NOTE 6: BALANCE SHEET INFORMATION
The components of certain balance sheet accounts are as follows:
In Millions May 25, 1997 May 26, 1996
- -----------------------------------------------------------------------
Land, Buildings and Equipment:
Land $ 17.5 $ 17.8
Buildings 526.7 516.2
Equipment 1,911.2 1,865.4
Construction in progress 116.2 108.6
- -----------------------------------------------------------------------
Total land, buildings
and equipment 2,571.6 2,508.0
Less accumulated depreciation (1,292.2) (1,195.6)
- -----------------------------------------------------------------------
Net land, buildings
and equipment $1,279.4 $1,312.4
=======================================================================
Other Assets:
Prepaid pension $ 402.5 $ 362.3
Marketable securities, at market 158.0 167.9
Investments in and
advances to affiliates 221.8 217.4
Net intangible assets,
primarily goodwill 655.2 110.3
Miscellaneous 174.2 129.3
- -----------------------------------------------------------------------
Total other assets $1,611.7 $ 987.2
=======================================================================
Accumulated amortization included in net intangible assets was $39.8 million
and $25.8 million at May 25, 1997 and May 26, 1996, respectively.
As of May 25, 1997, a comparison of cost and market values of our marketable
securities (all of which are debt securities and considered available-for-sale)
was as follows:
- --------------------------------------------------------------------------
Market Gross Gross
In Millions Cost Value Gain Loss
- --------------------------------------------------------------------------
In "Other Current Assets" $ 15.0 $ 15.0 $ - $ -
In "Other Assets" 117.7 158.0 40.3 -
- --------------------------------------------------------------------------
Total marketable securities $132.7 $173.0 $40.3 $ -
==========================================================================
Realized gains from sales of marketable securities were $.6 million, $3.8
million and $.7 million in 1997, 1996 and 1995, respectively. In addition,
realized losses from purchases of our related debt (see Note Ten) were $.9
million, $2.3 million and $1.6 million in 1997, 1996 and 1995, respectively. The
aggregate unrealized gains and losses on available-for-sale securities, net of
tax effects, are accumulated in the "unearned compensation and other" account
within stockholders' equity.
Scheduled maturities of our marketable securities are as follows:
In Millions Cost Market Value
- ---------------------------------------------------------
Under one year (current) $ 15.0 $ 15.0
From 1 to 3 years 22.4 22.5
From 4 to 7 years 21.4 21.5
Over 7 years 73.9 114.0
- ---------------------------------------------------------
Totals $132.7 $173.0
=========================================================
NOTE 7: INVENTORIES
The components of inventories are as follows:
- -------------------------------------------------------------------------
In Millions May 25, 1997 May 26, 1996
- -------------------------------------------------------------------------
Raw materials, work in
process and supplies $ 77.4 $ 77.6
Finished goods 270.5 255.1
Grain 64.0 118.5
Reserve for LIFO valuation method (47.5) (55.7)
- -------------------------------------------------------------------------
Total inventories $364.4 $395.5
=========================================================================
At May 25, 1997 and May 26, 1996, respectively, inventories of $208.5 million
and $209.2 million were valued at LIFO.The impact of LIFO accounting increased
1997 earnings by $.03 per share, and reduced 1996 and 1995 earnings by $.01 and
$.04 per share, respectively.
NOTE 8: FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
Most of our financial instruments are recorded on the balance sheet. A few
(known as "derivatives") are off-balance-sheet items. Derivatives are financial
instruments whose value is derived from one or more underlying financial
instruments. Examples of such underlying instruments are currencies, equities,
commodities and interest rates. The carrying amount and fair value (based on
current market quotes and interest rates) of our financial instruments at the
balance-sheet dates are as follows:
- ------------------------------------------------------------------------------
May 25, 1997 May 26, 1996
- ------------------------------------------------------------------------------
Carrying Fair Carrying Fair
In Millions Amount Value Amount Value
Assets:
Cash and
cash equivalents $ 12.8 $ 12.8 $ 20.6 $ 20.6
Receivables 419.1 419.1 337.8 337.8
Marketable securities 174.8 174.8 215.1 215.1
Liabilities:
Accounts payable 599.7 599.7 590.7 590.7
Debt 1,873.7 1,932.3 1,437.9 1,515.7
Derivatives relating to:
Marketable securities (1.8) (1.8) (2.8) (2.8)
Debt - 9.2 - 3.1
==============================================================================
Any derivative we enter into and hold is designated at inception as a hedge
of risks associated with specific assets, liabilities or future commitments and
is monitored to determine if it remains an effective hedge. The effectiveness of
the derivative as a hedge is based on changes in its market value being highly
correlated with changes in market value of the underlying hedged items. We do
not enter into or hold derivatives for trading or speculative purposes.
We use derivative instruments to reduce financial risk in three areas:
interest rates, foreign currency and commodities. The notional amounts of
derivatives do not represent actual amounts exchanged by the parties and, thus,
are not a measure of the exposure of the Company through its use of derivatives.
Interest rate swap and foreign exchange agreements are made with a diversified
group of highly rated financial institutions, whereas commodities agreements are
entered into through various regulated exchanges. We have credit exposure
associated with these agreements to the extent that the instruments have a
positive fair value, but we do not anticipate any losses. The Company does not
have a significant concentration of risk with any single party or group of
parties in any of its financial instruments.
(1) Interest Rate Risk Management - We use interest rate swaps to hedge
and/or lower financing costs, to adjust our floating- and fixed-rate debt
positions, and to lock in a positive interest rate spread between certain assets
and liabilities.
An interest rate swap used in conjunction with a debt financing may allow the
Company to create fixed or floating-rate financing at a lower cost than with a
stand-alone financing. Generally, under interest rate swaps, the Company agrees
with a counterparty to exchange the difference between fixed-rate and
floating-rate interest amounts calculated by reference to an agreed notional
principal amount.
The following table indicates the types of swaps used to hedge various assets
and liabilities and their weighted average interest rates. Average variable
rates are based on rates as of the end of the reporting period. The swap
contracts mature during time periods ranging from 1998 to 2008.
- ----------------------------------------------------------------------------
May 25, 1997 May 26, 1996
- ----------------------------------------------------------------------------
Dollars in Millions Asset Liability Asset Liability
- ----------------------------------------------------------------------------
Receive fixed swaps -
notional amount $ - $99.9 $ - $90.0
Average receive rate - 6.5% - 7.1%
Average pay rate - 5.4% - 5.1%
Pay fixed swaps -
notional amount $34.2 $16.5 $63.0 $21.3
Average receive rate 5.9% 5.6% 5.7% 5.4%
Average pay rate 8.9% 8.2% 8.9% 6.2%
============================================================================
The interest rate differential on interest rate swaps used to hedge existing
assets and liabilities is recognized as an adjustment of interest expense or
income over the term of the agreement.
The Company uses interest rate options and cap agreements primarily to reduce
the impact of interest rate changes on its floating-rate debt, as well as to
hedge the value of call options contained in long-term debt issued by the
Company in earlier periods. In return for an upfront payment, an interest rate
swap option grants the purchaser the right to receive (pay) the fixed rate
interest amount in an interest rate swap. In return for an upfront payment, a
cap agreement entitles the purchaser to receive the amount, if any, by which an
agreed upon floating rate index exceeds the cap interest rate. The following
table summarizes our option and cap agreements, all of which matured in 1997.
- --------------------------------------------------------------------------
May 25, 1997 May 26, 1996
- --------------------------------------------------------------------------
Notional Average Notional Average
Dollars in Millions Amount Rate Amount Rate
- --------------------------------------------------------------------------
Caps purchased -
receive floating $ - -% $200.0 7.0%
==========================================================================
The premiums paid/received for interest rate options and cap agreements are
included in other assets/liabilities and are amortized to interest expense over
the terms of the agreements. Amounts receivable or payable under the cap
agreements are recognized as yield adjustments over the life of the related
debt.
(2) Foreign-Currency Exposure - We are exposed to potential losses from
foreign currency fluctuations affecting net investments and earnings denominated
in foreign currencies. We selectively hedge the potential effect of these
foreign currency fluctuations related to operating activities and net
investments in foreign operations by entering into foreign exchange contracts
with highly rated financial institutions. Realized and unrealized gains and
losses on hedges of firm commitments are included in the cost basis of the asset
being hedged and are recognized as the asset is expensed through cost of goods
sold or depreciation. Realized and unrealized gains and losses on contracts that
hedge other operating activities are recognized currently in net earnings.
Realized and unrealized gains and losses on contracts that hedge net investments
are recognized in the cumulative foreign currency adjustment in stockholders'
equity.
The components of our net foreign investment exposure by geographic region
are as follows:
- -----------------------------------------------------------------
In Millions May 25, 1997 May 26, 1996
- -----------------------------------------------------------------
Europe $153.8 $156.7
North/South America 40.2 35.3
Asia 2.3 1.9
- -----------------------------------------------------------------
Total exposure $196.3 $193.9
=================================================================
At May 25, 1997, we had forward and option contracts maturing in 1998 to sell
$148.4 million of foreign currencies. The fair value of these contracts is based
on third-party quotes and was immaterial at May 25, 1997.
(3) Commodities - The Company uses an integrated set
of financial instruments in its purchasing cycle, including purchase orders,
noncancelable contracts, futures contracts, and futures options. Except as
described below, these instruments are all used to purchase ingredients for the
Company's internal needs, and to manage purchase prices and inventory values as
practical. All futures contracts and futures options are exchange-based
instruments with ready liquidity and determinable market values. Unrealized
gains and losses are recorded monthly and deferred until the physical
ingredients flow through cost of goods sold. The net gains and losses deferred
and expensed are immaterial. At May 25, 1997 and May 26, 1996, the aggregate
fair value of our ingredient derivatives position was $92.9 million and $66.9
million, respectively.
The Company also has a grain-merchandising operation, which uses cash
contracts, futures contracts and futures options. All futures contracts and
futures options are exchange-based instruments with ready liquidity and market
values. Neither results of operations nor the year-end positions from
grain-merchandising operations was material to the Company's overall results.
NOTE 9: NOTES PAYABLE
The components of notes payable and their respective weighted average interest
rates at the end of the periods are as follows:
- -------------------------------------------------------------------------------
May 25, 1997 May 26, 1996
- -------------------------------------------------------------------------------
Weighted Weighted
Average Average
Notes Interest Notes Interest
Dollars in Millions Payable Rate Payable Rate
- -------------------------------------------------------------------------------
U.S. commercial paper $379.0 5.5% $ 15.0 5.2%
Canadian
commercial paper 32.2 3.2 19.9 4.8
Financial institutions 273.1 5.1 281.7 5.4
Amounts reclassified
to long-term debt (480.0) - (175.0) -
- -------------------------------------------------------------------------------
Total notes payable $204.3 $141.6
===============================================================================
See Note Eight for a description of related interest rate derivative
instruments.
To ensure availability of funds, we maintain bank credit lines sufficient to
cover our outstanding short-term borrowings. As of May 25, 1997, we had $700.0
million fee-paid lines and $64.6 million uncommitted, no-fee lines available in
the U.S. and Canada. In addition, other foreign subsidiaries had no-fee lines of
$129.7 million, of which $71.9 million are unused.
We have a revolving credit agreement expiring in January 2002 that provides
for the fee-paid credit lines. This agreement provides us with the ability to
refinance short-term borrowings on a long-term basis, and therefore we have
reclassified a portion of our notes payable to long-term debt.
NOTE 10: LONG-TERM DEBT
- -----------------------------------------------------------------------------
In Millions May 25, 1997 May 26, 1996
- -----------------------------------------------------------------------------
Medium-term notes, 5.4% to 9.1%,
due 1997 to 2033 $ 877.9 $ 978.1
Zero coupon notes, yield 11.1%,
$279.0 due August 15, 2013 48.7 44.5
8.2% ESOP loan guaranty,
due through June 30, 2007 63.5 70.4
7.0% Notes due September 15, 2004 165.1 -
Zero coupon notes, yield 11.7%,
$64.2 due August 15, 2004 28.3 25.3
Notes payable, reclassified 480.0 175.0
Other 5.9 3.0
- -----------------------------------------------------------------------------
1,669.4 1,296.3
Less amounts due within one year (139.0) (75.4)
- -----------------------------------------------------------------------------
Total long-term debt $1,530.4 $1,220.9
=============================================================================
See Note Eight for a description of related interest rate derivative
instruments.
At May 25, 1997 our debt shelf registration permits the issuance of up to
$500.0 million net proceeds in unsecured debt securities to reduce short-term
debt and for other general corporate purposes, and includes a medium-term note
program that allows us to issue debt quickly for selected amounts, rates and
maturities.
In 1997, we issued $62.0 million of debt under our medium-term note program
with maturities varying from one to 12 years and interest rates from 5.6% to
7.5%. In 1996, $35.0 million of debt was issued under this program with
maturities from five to 12 years and interest rates from 5.2% to 7.2%.
The Company has guaranteed the debt of the Employee Stock Ownership Plan;
therefore, the loan is reflected on our consolidated balance sheets as long-term
debt with a related offset in stockholders' equity, "unearned compensation and
other."
The sinking fund and principal payments due on long-term debt are (in
millions) $139.0, $85.2, $90.5, $62.7 and $49.8 in 1998, 1999, 2000, 2001 and
2002, respectively. The notes payable that are reclassified under our revolving
credit agreement are not included in these principal payments.
Our marketable securities (see Note Six) include zero coupon U.S. Treasury
securities. These investments are intended to provide the funds for the payment
of principal and interest for the zero coupon notes due August 15, 2004, and
2013.
NOTE 11: STOCK PLANS
A total of 11,607,294 shares (including 6,224,050 shares for salary replacement
options, 158,449 shares for restricted stock, and 200,037 shares for
non-employee directors) are available for grant of options, restricted stock, or
restricted stock units under our 1993, 1995 and 1996 stock plans through October
1, 1998, September 30, 2000, and September 30, 2001, respectively. Options may
be granted at a price not less than 100 percent of the fair market value on the
date the option is granted. Options now outstanding include some granted under
the 1984, 1988 and 1990 option plans, under which no further rights may be
granted. All options expire within 10 years and one month after the date of
grant. The plans provide for full vesting of options upon completion of
specified service periods, or in the event there is a change of control.
Stock subject to a restricted period and a purchase price, if any, as
determined by the Compensation Committee of the Board of Directors may be
granted to key employees under the 1993 plan and the Executive Incentive Plan.
The 1988 plan also permitted such awards. Most of the employee restricted stock
awards require the employee to deposit personally owned shares (on a one-for-one
basis) with the
Company during the restricted period. The 1996 plan allows non-employee
directors to annually choose to receive either 500 shares of stock restricted
for one year or 500 restricted stock units convertible to common stock after his
or her term of service on the Board is completed. The 1990 plan also allowed
grants of restricted stock to directors. In 1997, 1996 and 1995 grants of
176,955, 132,092 and 131,150 shares of restricted stock and units, with weighted
average values at grant of $59.29, $54.32 and $54.51 per share, respectively,
were made. On May 25, 1997, a total of 445,209 restricted shares and units were
outstanding.
The 1988 plan permitted the granting of performance units corresponding to
stock options granted. The value of performance units was determined by return
on equity and growth in earnings per share measured against preset goals over
three-year performance periods. For seven years after a performance period
holders may elect to receive the value of performance units (with interest) as
an alternative to exercising corresponding stock options. On May 25, 1997, there
were 1,579,760 outstanding options with corresponding performance unit accounts.
The following table contains information on stock option activity:
- -----------------------------------------------------------------------
Weighted Weighted
Average Average
Exercise Exercise
Options Price Options Price
Exercisable Per Share Outstanding Per Share
- -----------------------------------------------------------------------
Balance at
May 29, 1994 10,278,466 $38.73 18,009,478 $49.52
Granted 4,063,100 55.11
Exercised (725,437) 32.31
Expired (574,714) 59.33
Spin-off
adjustment 1,202,369
- -----------------------------------------------------------------------
Balance at
May 28, 1995 12,576,580 33.37 21,974,796 41.60
Granted 4,127,602 52.55
Exercised (1,778,823) 25.87
Expired (730,343) 49.40
- -----------------------------------------------------------------------
Balance at
May 26, 1996 11,315,131 37.70 23,593,232 44.46
Granted 3,973,277 59.33
Exercised (2,335,956) 31.74
Expired (429,898) 51.84
- -----------------------------------------------------------------------
Balance at
May 25, 1997 11,949,600 $42.53 24,800,655 $47.91
=======================================================================
The following table provides information regarding exercisable and
outstanding options as of May 25, 1997.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
Weighted Weighted Weighted
Average Average Average
Range of Exercise Exercise Remaining
Exercise Price Options Price per Options Price per Contractual
per Share Exercisable Share Outstanding Share Life(years)
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Under $30 2,636,014 $24.21 2,636,014 $24.21 1.57
$30-$40 2,082,540 34.61 2,082,540 34.61 3.10
$40-$50 2,591,424 46.71 5,502,550 45.85 6.11
$50-$60 4,487,722 53.96 11,858,091 53.26 6.81
Over $60 151,900 60.13 2,721,460 61.87 9.42
- -----------------------------------------------------------------------------------
11,949,600 $42.53 24,800,655 $47.91 6.07
===================================================================================
</TABLE>
When the Restaurant operations were spun off, the number and exercise price
of options outstanding were adjusted to compensate for the market value of the
Darden shares distributed to our stockholders. This adjustment increased the
number of General Mills options outstanding at May 28, 1995 by 1,202,369 shares
and decreased the exercise price of the option shares outstanding by
approximately 17.7 percent
Stock-based compensation expense related to restricted stock for 1997, 1996
and 1995 was $4.8 million, $3.0 million and $5.0 million, respectively, using
the "intrinsic value-based method" of accounting for stock-based compensation
plans. Effective with 1997, we adopted the disclosure requirements of Statement
of Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based
Compensation." SFAS No. 123 allows either a fair value based method or an
intrinsic value-based method of accounting for such compensation plans. Had
compensation expense for our 1997 and 1996 stock option plan grants been
determined using the fair value based method, net earnings and earnings per
share would have been approximately $435.2 million and $2.75, and $470.3 million
and $2.96, respectively. These pro forma amounts are not likely to be
representative of the difference between the two methods in future years,
because most of our options require service over periods longer than two years
for full vesting. The weighted average fair values at grant date of the options
granted in 1997 and 1996 were estimated as $11.76 and $9.39, respectively, using
the Black-Scholes option-pricing model with the following weighted average
assumptions:
- ---------------------------------------------------------------
1997 1996
- ---------------------------------------------------------------
Risk-free interest rate 6.5% 6.1%
Expected life 7 years 7 years
Expected volatility 18% 18%
Expected dividend growth rate 8% 8%
===============================================================
The Black-Scholes model requires the input of highly subjective assumptions
and may not necessarily provide a reliable measure of fair value.
NOTE 12: STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
$.10 Par Value Common Stock
(One Billion Shares Authorized)
-------------------------------------- Cumulative
Issued Treasury Unearned Foreign
In Millions, Except -------------------------------------- Retained Compensation Currency
per Share Data Shares Amount Shares Amount Earnings and Other Adjustment Total
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at May 29, 1994 204.2 $251.0 (45.7) $(1,334.4) $2,457.9 $(160.2) $(63.1) $1,151.2
Unrealized gain, net of income taxes of
$14.0, on available-for-sale securities
at May 30, 1994 22.0 22.0
Net earnings 367.4 367.4
Cash dividends declared ($1.88 per share),
net of income taxes of $3.1 (294.1) (294.1)
Stock option, profit sharing and ESOP plans - 10.0 .4 17.2 27.2
Shares purchased via puts, or on open market (1.0) (57.7) (57.7)
Put option premium/settlements, net - (3.5) - 2.8 (.7)
Transfer of put options - 122.0 122.0
Unearned compensation related to restricted
stock awards (5.6) (5.6)
Earned compensation and other 11.0 11.0
Change in unrealized gain, net of income
taxes of $3.7, on available-for-sale
securities 5.8 5.8
Amount charged to gain on sale of
foreign operations 3.6 3.6
Translation adjustments, net of income tax
benefit of $.2 7.6 7.6
Transfer of equity components to Darden
prior to spin-off 69.1 10.1 79.2
Distribution of equity to stockholders
from spin-off of Restaurant operations (1,297.9) (1,297.9)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at May 28, 1995 204.2 379.5 (46.3) (1,372.1) 1,233.3 (57.9) (41.8) 141.0
Net earnings 476.4 476.4
Cash dividends declared ($1.91 per share),
net of income taxes of $2.5 (301.1) (301.1)
Stock option, profit sharing and ESOP plans - 4.6 1.7 40.3 44.9
Shares purchased on open market (.6) (35.6) (35.6)
Put option premium/settlements, net - .2 .2
Unearned compensation related to restricted
stock awards (6.5) (6.5)
Earned compensation and other 7.1 7.1
Change in unrealized gain, net of income
taxes of $2.0, on available-for-sale
securities (3.1) (3.1)
Minimum pension liability adjustment (.8) (.8)
Translation adjustments, net of income tax
benefit of $.2 (14.8) (14.8)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at May 26, 1996 204.2 384.3 (45.2) (1,367.4) 1,408.6 (61.2) (56.6) 307.7
Net earnings 445.4 445.4
Cash dividends declared ($2.03 per share),
net of income taxes of $2.1 (318.6) (318.6)
Shares issued in acquisition - 181.4 5.4 173.0 354.4
Stock option, profit sharing and ESOP plans - 9.3 1.7 57.4 66.7
Shares purchased via puts, or on open market (6.2) (368.0) (368.0)
Put and call option premium/settlements, net - 3.0 - 3.1 6.1
Unearned compensation related to restricted
stock awards (7.9) (7.9)
Earned compensation and other 13.1 13.1
Change in unrealized gain, net of income
taxes of $.1, on available-for-sale
securities (.1) (.1)
Minimum pension liability adjustment (1.9) (1.9)
Amount removed on disposition of
foreign operation 6.1 6.1
Translation adjustments (8.4) (8.4)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at May 25, 1997 204.2 $578.0 (44.3) $(1,501.9) $1,535.4 $(58.0) $(58.9) $ 494.6
====================================================================================================================================
<FN>
Cumulative preference stock of 5.0 million shares, without par value, is
authorized but unissued.
</FN>
</TABLE>
We have a shareholder rights plan that entitles each outstanding share of
common stock to one right. Each right entitles the holder to purchase one
one-hundredth of a share of cumulative preference stock (or, in certain
circumstances, common stock or other securities), exercisable upon the
occurrence of certain events. The rights are not transferable apart from the
common stock until a person or group has acquired 20 percent or more, or makes a
tender offer for 20 percent or more, of the common stock in which case each
right will entitle the holder (other than the acquiror) to receive, upon
exercise, common stock of either the Company or the acquiring company having a
market value equal to two times the exercise price of the right. The initial
exercise price is $240 per right. The rights are redeemable by the Board at any
time prior to the acquisition of 20 percent or more of the outstanding common
stock. The rights expire on February 1, 2006. At May 25, 1997, there were 159.9
million rights issued and outstanding.
The Board of Directors has authorized the repurchase, from time to time, of
common stock for our treasury, provided that the number of shares held in
treasury shall not exceed 60.0 million.
Through private transactions in fiscal 1997 and 1996 as a part of our stock
repurchase program, we issued put options that entitle the holder to sell shares
of our common stock to us, at a specified price, if the holder exercises the
option. In 1997 and 1996, we issued put options for 4.5 million and .2 million
shares for $7.4 million and $.2 million in premiums, respectively. As of May 25,
1997, put options for 2.5 million shares remain outstanding at exercise prices
ranging from $57.35 to $66.71 per share with exercise dates from May 1997 to
November 1997.
NOTE 13: INTEREST EXPENSE
The components of net interest expense are as follows:
- -------------------------------------------------------------------
Fiscal Year
- -------------------------------------------------------------------
In Millions 1997 1996 1995
- -------------------------------------------------------------------
Interest expense $115.7 $117.2 $150.0
Capitalized interest (1.1) (.6) (5.2)
Interest income (14.1) (15.2) (19.4)
- -------------------------------------------------------------------
Total interest expense,
net 100.5 101.4 125.4
Net interest allocated to
discontinued operations - - (24.2)
- -------------------------------------------------------------------
Interest expense, net $100.5 $101.4 $101.2
===================================================================
During 1997, 1996 and 1995, we paid interest (net of amount capitalized) of
$103.6 million, $103.8 million and $135.2 million, respectively. The interest
allocated to discontinued operations is net of capitalized interest credits of
$4.3 million in 1995.
NOTE 14: RETIREMENT PLANS
We have defined-benefit plans covering most employees. Benefits for salaried
employees are based on length of service and final average compensation. The
hourly plans include various monthly amounts for each year of credited service.
Our funding policy is consistent with the funding requirements of federal law
and regulations. Our principal plan covering salaried employees has a provision
that any excess pension assets would vest to plan participants if the plan is
terminated within five years of a change in control. Plan assets consist
principally of listed equity securities, corporate obligations and U.S.
government securities. Components of net pension income are as follows:
- -------------------------------------------------------------------
Fiscal Year
- -------------------------------------------------------------------
Expense (Income) in Millions 1997 1996 1995
- -------------------------------------------------------------------
Service cost -
benefits earned $ 14.3 $ 14.1 $ 13.5
Interest cost on projected
benefit obligation 59.0 56.7 55.1
Actual return on plan assets (168.7) (162.3) (106.9)
Net amortization and deferral 59.2 61.4 8.3
- -------------------------------------------------------------------
Net pension income $(36.2) $(30.1) $(30.0)
===================================================================
The weighted-average discount rate and rate of increase in future
compensation levels used in determining the actuarial present value of the
benefit obligations were 8.3% and 4.4% in 1997, and 8.1% and 4.5% in 1996,
respectively. The expected long-term rate of return on assets was 10.4%.
The funded status of the plans and the amount recognized on the consolidated
balance sheets (as determined as of May 31, 1997 and 1996) are as follows:
- -------------------------------------------------------------------------
May 25, 1997 May 26, 1996
- -------------------------------------------------------------------------
Assets Accu- Assets Accu-
Exceed mulated Exceed mulated
Accu- Benefits Accu- Benefits
mulated Exceed mulated Exceed
In Millions Benefits Assets Benefits Assets
- -------------------------------------------------------------------------
Actuarial present value
of benefit obligations:
Vested benefits $ 668.0 $ 20.2 $ 649.5 $ 17.7
Nonvested benefits 41.9 .8 41.3 .8
- -------------------------------------------------------------------------
Accumulated benefit
obligations 709.9 21.0 690.8 18.5
- -------------------------------------------------------------------------
Projected benefit
obligation 751.3 22.4 730.3 19.5
Plan assets at
fair value 1,184.1 - 1,067.7 -
- -------------------------------------------------------------------------
Plan assets in excess
of (less than) the
projected benefit
obligation 432.8 (22.4) 337.4 (19.5)
Unrecognized prior
service cost 39.3 2.2 31.9 2.3
Unrecognized
net loss 10.8 5.8 88.8 2.3
Recognition of
minimum liability - (10.0) - (7.9)
Unrecognized transition
(asset) liability (80.4) 3.4 (95.8) 4.3
- -------------------------------------------------------------------------
Prepaid (accrued)
pension cost $ 402.5 $(21.0) $ 362.3 $(18.5)
=========================================================================
The General Mills Savings Plan is a defined contribution plan that covers
our salaried and non-union employees. It had net assets of $768.2 million at May
25, 1997 and $689.0 million at May 26, 1996. This plan is a 401(k) savings plan
that includes several investment funds and an Employee Stock Ownership Plan
(ESOP). The ESOP's only assets are Company common stock and temporary cash
balances. Expense recognized in 1997, 1996 and 1995 was $3.2 million, $6.9
million and $5.4 million, respectively. The ESOP's share of this expense was
$2.7 million, $6.6 million and $5.0 million, respectively. The ESOP's expense is
calculated by the "shares allocated" method.
The ESOP uses Company common stock to convey benefits to employees and,
through increased stock owner-ship, to align employee interests with those of
shareholders. The Company matches a percentage of employee contributions with a
base match plus a variable year-end match that depends on annual results.
Employees receive the Company match in the form of common stock.
The ESOP originally purchased Company common stock principally with funds
borrowed from third parties (and guaranteed by the Company). The ESOP shares are
included in net shares outstanding for the purposes of calculating earnings per
share. The ESOP's third-party debt is described in Note Ten.
The Company treats cash dividends paid to the ESOP the same as other
dividends. Dividends received on leveraged shares (i.e., all shares originally
purchased with the debt proceeds) are used for debt service, while dividends
received on unleveraged shares are passed through to participants.
The Company's cash contribution to the ESOP is calculated so as to pay off
enough debt to release sufficient shares to make the Company match. The ESOP
uses the Company's cash contributions to the plan, plus the dividends received
on the ESOP's leveraged shares, to make principal and interest payments on the
ESOP's debt. As loan payments are made, shares become unencumbered by debt and
committed to be allocated. The ESOP allocates shares to individual employee
accounts on the basis of the match of employee payroll savings (contributions),
plus reinvested dividends received on previously allocated shares. In 1997, 1996
and 1995, the ESOP incurred interest expense of $5.7 million, $6.3 million and
$6.6 million, respectively. The ESOP used dividends of $8.1 million, $9.1
million and $6.2 million, along with Company contributions of $2.7 million, $6.7
million and $4.8 million to make interest and principal payments in the
respective years.
The number of shares of Company common stock in the ESOP are summarized as
follows:
- ----------------------------------------------------------------
Number of Shares May 25, 1997 May 26, 1996
- ----------------------------------------------------------------
Unreleased shares 2,164,000 2,415,000
Committed to be allocated 29,000 10,000
Allocated to participants 2,185,000 2,129,000
- ----------------------------------------------------------------
Total shares 4,378,000 4,554,000
================================================================
NOTE 15: OTHER POSTRETIREMENT BENEFITS
We sponsor plans that provide health care benefits to the majority of our
retirees. The salaried plan is contributory, with retiree contributions based on
years of service.
We fund plans for certain employees and retirees on an annual basis. In
1997, 1996 and 1995 we contributed $8.1 million, $14.0 million and $13.7
million, respectively. Plan assets consist principally of listed equity
securities and U.S. government securities.
Components of the postretirement health care expense are as follows:
- -------------------------------------------------------------------
Fiscal Year
- -------------------------------------------------------------------
Expense (Income) in Millions 1997 1996 1995
- -------------------------------------------------------------------
Service cost - benefits earned $ 4.6 $ 4.9 $ 4.5
Interest cost on accumulated
benefit obligation 14.2 14.2 14.3
Actual return on plan assets (27.4) (18.7) (15.1)
Net amortization and deferral 12.2 6.9 5.0
- -------------------------------------------------------------------
Net postretirement expense $ 3.6 $ 7.3 $ 8.7
===================================================================
The funded status of the plans and the amount recognized on our consolidated
balance sheets are as follows:
May 25, 1997 May 26, 1996
- -----------------------------------------------------------------------
Assets Accu- Assets Accu-
Exceed mulated Exceed mulated
Accu- Benefits Accu- Benefits
mulated Exceed mulated Exceed
In Millions Benefits Assets Benefits Assets
- -----------------------------------------------------------------------
Accumulated benefit
obligations:
Retirees $ 40.4 $ 54.8 $ 38.5 $ 55.7
Fully eligible active
employees 13.8 6.1 13.1 5.1
Other active
employees 33.2 34.0 38.3 38.5
- -----------------------------------------------------------------------
Accumulated
benefit obligations 87.4 94.9 89.9 99.3
Plan assets at
fair value 142.9 18.2 121.9 13.2
- -----------------------------------------------------------------------
Plan assets in excess
of (less than) accumu-
lated benefit obligations 55.5 (76.7) 32.0 (86.1)
Unrecognized prior
service credits - (11.5) (.1) (13.7)
Unrecognized net
(gain)loss (6.1) 12.2 14.3 23.8
- -----------------------------------------------------------------------
Prepaid (accrued) post-
retirement benefits $ 49.4 $ (76.0) $ 46.2 $(76.0)
=======================================================================
The discount rates used in determining the actuarial present value of the
benefit obligations were 8.3% and 8.1% in 1997 and 1996, respectively. The
expected long-term rate of return on assets was 10%.
The assumed health care cost trend-rate increase in the per capita charges
for benefits ranged from 5.6% to 8.6% for 1998 depending on the medical service
category. The rates gradually decrease to 4.4% to 5.7% for 2007 and remain at
that level thereafter. If the health care cost trend rate increased by one
percentage point in each future year, the aggregate of the service and interest
cost components of postretirement expense would increase for 1997 by $3.1
million and the accumulated benefit obligation as of May 25, 1997 would increase
by $25.0 million.
NOTE 16: PROFIT-SHARING PLAN
The Executive Incentive Plan provides incentives to key individuals who have the
greatest potential to contribute to current earnings and successful future
operations. These awards are approved by the Compensation Committee of the Board
of Directors, which consists solely of outside directors, and depend on profit
performance in relation to pre-established goals approved by the Committee.
Profit-sharing expense was $4.5 million, $7.0 million and $.9 million in 1997,
1996 and 1995, respectively.
NOTE 17: INCOME TAXES
The components of earnings from continuing operations before income taxes and
the income taxes thereon are as follows:
- -------------------------------------------------------------------
Fiscal Year
- -------------------------------------------------------------------
In Millions 1997 1996 1995
- -------------------------------------------------------------------
Earnings before income taxes:
U.S. $698.5 $744.0 $412.1
Foreign 11.5 14.6 7.5
- -------------------------------------------------------------------
Total earnings before
income taxes $710.0 $758.6 $419.6
===================================================================
Income taxes:
Current:
Federal $208.2 $206.5 $ 91.6
State and local 25.7 28.5 1.3
Foreign 3.5 2.0 1.4
- -------------------------------------------------------------------
Total current 237.4 237.0 94.3
- -------------------------------------------------------------------
Deferred:
Federal 17.1 33.7 50.6
State and local 3.9 7.1 11.1
Foreign (.1) 1.6 (2.7)
- -------------------------------------------------------------------
Total deferred 20.9 42.4 59.0
- -------------------------------------------------------------------
Total income taxes $258.3 $279.4 $153.3
===================================================================
During 1997 and 1996, net income tax benefits of $28.0 million and $25.0
million, respectively, were allocated to stockholders' equity. These benefits
were attributable to the exercise of employee stock options, dividends paid on
unallocated ESOP shares, translation adjustments and unrealized gain on
marketable securities.
During 1997, 1996 and 1995, we paid income taxes of $230.3 million, $194.0
million and $104.1 million, respectively.
In prior years we purchased certain income-tax items from other companies
through tax lease transactions. Total current income taxes charged to earnings
reflect the amounts attributable to operations and have not been materially
affected by these tax leases. Actual current taxes payable relating to 1997,
1996 and 1995 operations were increased by approximately $16 million, $15
million and $12 million, respectively, due to the current effect of tax leases.
These tax payments do not affect taxes for statement of earnings purposes since
they repay tax benefits realized in prior years. The repayment liability is
classified as "deferred income taxes - tax leases."
The following table reconciles the U.S. statutory income tax rate with the
effective income tax rate:
- --------------------------------------------------------------------
Fiscal Year
- --------------------------------------------------------------------
1997 1996 1995
- --------------------------------------------------------------------
U.S. statutory rate 35.0% 35.0% 35.0%
State and local income taxes,
net of federal tax benefits 2.7 3.0 3.6
Other, net (1.3) (1.2) (2.1)
- --------------------------------------------------------------------
Effective income tax rate 36.4% 36.8% 36.5%
====================================================================
The tax effects of temporary differences that give rise to deferred tax
assets and liabilities are as follows:
- ------------------------------------------------------------------------
In Millions May 25, 1997 May 26, 1996
- ------------------------------------------------------------------------
Accrued liabilities $ 90.5 $ 84.6
Unusual charges 6.6 12.5
Compensation and employee benefits 50.7 53.3
Disposition liabilities 11.3 15.4
Foreign tax loss carryforward 8.6 12.4
Other 25.7 9.0
- ------------------------------------------------------------------------
Gross deferred tax assets 193.4 187.2
- ------------------------------------------------------------------------
Depreciation 127.7 130.5
Prepaid pension asset 166.5 138.1
Intangible assets 10.2 11.3
Other 42.2 37.5
- ------------------------------------------------------------------------
Gross deferred tax liabilities 346.6 317.4
- ------------------------------------------------------------------------
Valuation allowance 11.2 11.2
- ------------------------------------------------------------------------
Net deferred tax liability $164.4 $141.4
========================================================================
As of May 25, 1997, we have foreign operating loss carryovers for tax
purposes of $22.6 million, which will expire as follows if not offset against
future taxable income: $11.0 million in 1998, $.1 million in 1999, $.1 million
in 2000, $11.0 million in 2001 and $.4 million in 2002.
We have not recognized a deferred tax liability for unremitted earnings of
$89.7 million for our foreign operations because we do not expect those earnings
to become taxable to us in the foreseeable future. A determination of the
potential liability is not practicable. If a portion were to be remitted, we
believe income tax credits would substantially offset any resulting tax
liability.
NOTE 18: LEASES AND OTHER COMMITMENTS
An analysis of rent expense by property leased follows:
- ----------------------------------------------------------------
Fiscal Year
- ----------------------------------------------------------------
In Millions 1997 1996 1995
- ----------------------------------------------------------------
Warehouse space $17.6 $14.9 $14.0
Equipment 7.1 7.3 8.7
Other 4.8 3.3 3.7
- ----------------------------------------------------------------
Total rent expense $29.5 $25.5 $26.4
- ----------------------------------------------------------------
Some leases require payment of property taxes, insurance and maintenance
costs in addition to the rent payments. Contingent and escalation rent in excess
of minimum rent payments and sublease income netted in rent expense were
insignificant.
Noncancelable future lease commitments are (in millions) $27.1 in 1998,
$26.5 in 1999, $24.9 in 2000, $23.1 in 2001, $18.1 in 2002 and $4.4 after 2002,
with a cumulative total of $124.1.
We are contingently liable under guaranties and comfort letters for $69.0
million. The guaranties and comfort letters are principally issued to support
borrowing arrangements, primarily for our joint ventures. General Mills remains
the primary guarantor on a number of Darden leases and certain other
obligations; however Darden has indemnified General Mills against any loss.
NOTE 19: GEOGRAPHIC INFORMATION
- --------------------------------------------------------------------------
Unallocated
Corporate Consolidated
In Millions U.S.A. Foreign Items (a) Total
- --------------------------------------------------------------------------
Sales
1997 $5,376.4 $ 232.9 $ - $5,609.3
1996 5,204.5 211.5 - 5,416.0
1995 4,840.7 186.0 - 5,026.7
- --------------------------------------------------------------------------
Operating Profits
1997 806.4(b) 24.1 (120.5) 710.0
1996 862.7 24.0 (128.1) 758.6
1995 504.0(c) 14.9(c) (99.3) 419.6
- --------------------------------------------------------------------------
Identifiable Assets
1997 3,106.8 306.5 489.1 3,902.4
1996 2,509.1 293.2 492.4 3,294.7
1995 2,531.9 300.6 525.7 3,358.2
==========================================================================
(a) Corporate expenses reported here include net interest expense and general
corporate expenses.
(b) U.S.A. operating profits are net of a charge of $48.4 million for the
unusual item described in Note Four.
(c) U.S.A. and Foreign operating profits are net of charges of $179.1 million
and $4.1 million, respectively, for the unusual items described in Note
Four.
The foreign sales above were made primarily by our Canadian subsidiary. Our
proportionate share of our joint ventures' sales (not shown above) was $728.2
million, $705.7 million and $584.0 million for 1997, 1996 and 1995,
respectively. The foreign operating profits above also exclude our share of the
results from our joint ventures.
NOTE 20: QUARTERLY DATA (UNAUDITED)
Summarized quarterly data for 1997 and 1996 follows:
<TABLE>
<CAPTION>
In Millions, Except First Quarter Second Quarter Third Quarter Fourth Quarter
per Share and --------------------------------------------------------------------------------------------------
Market Price Amounts 1997 1996 1997 1996 1997 1996 1997 1996
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales $ 1,315.6 $ 1,276.3 $ 1,560.1 $ 1,448.4 $ 1,289.6 $ 1,309.2 $ 1,444.0 $ 1,382.1
Gross profit (a) 779.8 750.7 900.7 852.3 741.3 776.1 859.1 795.9
Net earnings 97.7(b) 136.9 156.7 145.7 122.8 116.3 68.2(c) 77.5
Net earnings
per share .62 .86 1.00 .92 .78 .73 .42 .49
Dividends per share .50 .47 .50 .47 .50 .47 .53 .50
Market price of
common stock:
High 58 1/4 54 3/8 60 5/8 58 1/8 68 3/4 60 1/2 67 3/4 60
Low 52 50 54 3/8 50 7/8 60 7/8 52 5/8 57 3/4 53 1/2
=========================================================================================================================
<CAPTION>
In Millions, Except Total Year
per Share and --------------------
Market Price Amounts 1997 1996
- --------------------------------------------
<S> <C> <C>
Sales $ 5,609.3 $ 5,416.0
Gross profit (a) 3,280.9 3,175.0
Net earnings 445.4 476.4
Net earnings
per share 2.82 3.00
Dividends per share 2.03 1.91
Market price of
common stock:
High 68 3/4 60 1/2
Low 52 50
============================================
<FN>
(a) Before charges for depreciation.
(b) Includes an after-tax loss of $29.2 million ($.18 per share) in the first
quarter related to the adoption of Financial Accounting Standards No. 121.
(c) The earnings impacts of LIFO reserve adjustments were not material to any
quarter except the fourth quarter of 1997, when an after-tax credit of
$7.2 million ($.05 per share) was recorded.
</FN>
</TABLE>
ELEVEN YEAR FINANCIAL SUMMARY
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
May 25, May 26, May 28, May 29, May 30,
In Millions, Except per Share Data 1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Financial Results
Net earnings per share $ 2.82 $ 3.00 $ 2.33 $ 2.95 $ 3.10
Continuing operations earnings
per share 2.82 3.00 1.64 2.14 2.52
Return on average equity 111.0% 212.3% 52.0% 37.7% 39.1%
Dividends per share 2.03 1.91 1.88 1.88 1.68
Sales 5,609 5,416 5,027 5,327 5,138
Costs and expenses:
Cost of sales 2,328 2,241 2,123 2,012 2,003
Selling, general and administrative 2,239 2,128 2,008 2,351 2,191
Depreciation and amortization 183 187 192 174 153
Interest, net 101 101 101 79 56
Unusual expenses (income) 48 -- 183 147 36
Total costs and expenses 4,899 4,657 4,607 4,763 4,439
Earnings from continuing
operations before taxes and
earnings (losses) of joint ventures 710 759 420 564 699
Income taxes 259 280 153 217 276
Earnings (losses) of joint ventures (6) (3) (7) (7) (12)
Earnings from continuing operations 445 476 260 340 411
Discontinued operations after taxes -- -- 107 134 95
Accounting changes -- -- -- (4) --
Net earnings 445 476 367 470 506
Earnings from continuing
operations as a percent of sales 7.9% 8.8% 5.2% 6.4% 8.0%
Weighted average number of
common shares 158 159 158 159 163
Taxes (income, payroll,
property, etc.) per share 2.00 2.11 1.30 1.68 1.98
- -------------------------------------------------------------------------------------------------------
Financial Position
Total assets 3,902 3,295 3,358 4,804 4,310
Land, buildings and equipment, net 1,279 1,312 1,457 1,503 1,463
Working capital at year end (281) (197) (324) (630) (386)
Long-term debt, excluding
current portion 1,530 1,221 1,401 1,413 1,264
Stockholders' equity 495 308 141 1,151 1,219
Stockholders' equity per share 3.09 1.94 .89 7.26 7.59
- -------------------------------------------------------------------------------------------------------
Other Statistics
Total dividends 321 304 297 299 275
Gross capital expenditures 163 129 157 213 317
Research and development 61 60 60 59 56
Advertising media expenditures 306 320 324 292 283
Wages, salaries and employee
benefits 564 541 538 558 556
Number of employees (actual) 10,200 9,790 9,882 10,616 10,577
Accumulated LIFO reserve 48 56 53 43 47
Common stock price range (a):
High 68 3/4 60 1/2 63 3/4 68 3/4 74 1/8
Low 52 50 49 3/8 49 7/8 62
Close 64 1/4 58 1/4 60 5/8 54 1/2 65 1/4
=======================================================================================================
<FN>
(a) Prices shown prior to 1996 are before the spin-off described in Note Three.
The closing prices on May 26, 1995 of the two common stocks on a
when-issued basis were $49 7/8 for General Mills and $10 7/8 for Darden
Restaurants.
Note: Excluding return on equity, amounts presented in this summary have been
restated to a continuing operations basis.
</FN>
</TABLE>
EXHIBIT 21
<TABLE>
<CAPTION>
GENERAL MILLS, INC. SUBSIDIARIES
Percentage
Country or of Voting
State in Which Securities
Each Subsidiary Owned
Was Organized (Note 1)
<S> <C> <C>
COLOMBO DAIRY FOODS LTD. Ontario 100
COLOMBO, INC. Delaware 100
COLOMBO YOGURT SHOP, QUINCY MARKET, INC. Delaware 100
C.P.A. CEREAL PARTNERS HANDELSGESELLSCHAFT
m.b.H. (Note 10) Austria 50
C.P.D. CEREAL PARTNERS DEUTSCHLAND
VERWALTUNGSGESSELSCHAFT m.b.H (Note 2) Germany 50
CPW MEXICO S.A. de C.V. Mexico 50
CPW S.A. (Note 13) Switzerland 50
CPW-CI LIMITED Cayman Islands 50
FYL CORP. California 100
GENERAL MILLS CONTINENTAL, INC. (Note 11) Delaware 100
CEREAL PARTNERS L.L.C. Delaware 50
GENERAL MILLS DIRECT MARKETING, INC. Delaware 100
GENERAL MILLS EUROPE LIMITED England 100
C.P. HELLAS EEIG Greece 50
GENERAL MILLS FINANCE, INC. Delaware 100
GENERAL MILLS FRANCE S.A. France 100
GMSNACKS, SCA (Note 3) France 43.29
Snack Ventures Europe, SCA (Note 4) Belgium 40.49
Biscuiterie Nantaise-BN, S.A. France 100
S.A. de Bebidas Carbonicas (SABECA) Spain 100
Matutano, S.A. Portugal 100
Smiths Food Group B.V. The Netherlands 100
SVE Italia S.r.L. Italy 100
Tasty Foods S.A. Greece 100
GENERAL MILLS HOLDING B.V. (Note 5) The Netherlands 100
CEREAL PARTNERS FRANCE B.V. (Note 6) The Netherlands 100
GENERAL MILLS ESPANA B.V. (Note 7) The Netherlands 100
GENERAL MILLS HOLLAND B.V. The Netherlands 100
GENERAL MILLS INTERNATIONAL LIMITED (Note 11) Delaware 100
Bimaler S.A. Uruguay 50
Cereal Partners Czech Republic, s.r.o. Czech Republic 50
Cereal Partners Hungaria Ltd. Hungary 50
Cereal Partners L.L.C. Delaware 50
Cereal Partners Slovak Republic, s.r.o. Slovak Republic 50
CPW do Brasil Ltda. Brazil 50
General Mills Asia Pte. Ltd. Singapore 100
SVE (Hungary) Trading and Manufacturing Limited Hungary 40.5
GENERAL MILLS MAARSSEN B.V. The Netherlands 100
GENERAL MILLS MISSOURI, INC. Missouri 100
CHEX INC. Delaware 100
GENERAL MILLS OPERATIONS, INC. (Note 14) Delaware 100
GENERAL MILLS PRODUCTS CORP. Delaware 100
INMOBILIARIA SELENE, S.A. DE C.V. Mexico 100
GENERAL MILLS CANADA, INC. (Note 8) Canada 100
GENERAL MILLS SALES, INC. Delaware 100
INTERNATIONAL DESSERT PARTNERS L.L.C. Delaware 50
GOLD MEDAL INSURANCE CO. (Note 9) Minnesota 100
MILLS MEDIA, INC. Minnesota 100
NESTLE ASEAN PHILIPPINES, INC. (Note 12) The Philippines 30
POPCORN DISTRIBUTORS, INC. Delaware 100
TORUN-PACIFIC SP. Z O.O. Poland 50
YOPLAIT USA, INC. Delaware 100
</TABLE>
<PAGE>
Notes to list of subsidiaries:
1. Except where noted, the percentage of ownership refers to the total
ownership by the indicated parent corporation.
2. General Mills, Inc. also owns a 50% ownership interest in a partnership
organized under the laws of Germany.
3. General Mills Holland B.V. owns a 29.34% interest in GMSNACKS, SCA, General
Mills Holding B.V. owns a 26.25% interest in GMSNACKS, SCA, and General
Mills Products Corp. owns a 1.12% interest in GMSNACKS, SCA.
4. General Mills Holding B.V. owns a .01% interest in Snack Ventures Europe,
SCA.
5. General Mills Holding B.V. and General Mills, Inc. together own a 100%
interest in a Belgian partnership, General Mills Belgium, SNC, which also
has a 50% interest in a partnership organized under the laws of Portugal.
6. Cereal Partners France B.V., General Mills, Inc. and General Mills France
S.A. own a 100% interest in a French partnership, GMEAF SNC, which owns a
50% interest in a partnership organized under the laws of France.
7. General Mills Espana B.V. owns a 50% interest in a partnership organized
under the laws of Spain.
8. General Mills Canada, Inc. and General Mills Products Corp. together own a
100% interest in a Canadian partnership, General Mills North America
Affiliates, which owns a 50% interest in a partnership organized under the
laws of the United Kingdom.
9. Eighty-one percent of the voting securities are owned by General Mills,
Inc. and 19% of the voting securities are owned by General Mills Canada,
Inc.
10. General Mills, Inc. also owns a 50% ownership interest in a partnership
organized under the laws of Austria.
11. General Mills Continental, Inc. and General Mills International Limited
together own a 100% interest in a Chilean partnership, General Mills
Continental, Inc. y Compania, which owns a 50% interest in Cereales C.P.W.
Chile Limitada, a corporation organized under the laws of Chile; as well as
a 100% interest in a Mexican variable capital general partnership known as
General Mills International y Compania S. en N.C. de C.V.
12. The 30% ownership interest of General Mills, inc. is held in trust by
Nestle, S.A.
13. General Mills, Inc. also owns a 50% ownership interest in a partnership
organized under the laws of Switzerland.
14. General Mills Operations, Inc. also owns a 50% ownership interest in a
partnership organized under the laws of the state of Montana.
EXHIBIT 23
AUDITORS' CONSENT
The Board of Directors
General Mills, Inc.:
We consent to incorporation by reference in the Registration Statements (Nos.
2-49637 and 333-00745) on Form S-3 and Registration Statements (Nos. 2-13460,
2-53523, 2-91987, 2-95574, 33-24504, 33-27628, 33-32059, 33-36892, 33-36893,
33-50337, 33-62729, 333-13089 and 333-32509) on Form S-8 of General Mills, Inc.
of our reports dated June 26, 1997, relating to the consolidated balance sheets
of General Mills, Inc. and subsidiaries as of May 25, 1997 and May 26, 1996 and
the related consolidated statements of earnings, cash flows and related
financial statement schedule for each of the fiscal years in the three-year
period ended May 25, 1997, which reports are included or incorporated by
reference in the May 25, 1997 annual report on Form 10-K of General Mills, Inc.
Our report covering the basic consolidated financial statements refers to
changes in the method of accounting in fiscal 1997 for impairment of long-lived
assets and for long-lived assets to be disposed of.
/s/ KPMG Peat Marwick LLP
Minneapolis, Minnesota
August 18, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from our
Form 10-K for the fiscal year ended May 25, 1997, and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000040704
<NAME> General Mills, Inc.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-25-1997
<PERIOD-START> MAY-27-1996
<PERIOD-END> MAY-25-1997
<CASH> 12,800,000
<SECURITIES> 0
<RECEIVABLES> 423,200,000
<ALLOWANCES> (4,100,000)
<INVENTORY> 364,400,000
<CURRENT-ASSETS> 1,011,300,000
<PP&E> 2,571,600,000
<DEPRECIATION> (1,292,200,000)
<TOTAL-ASSETS> 3,902,400,000
<CURRENT-LIABILITIES> 1,292,500,000
<BONDS> 1,530,400,000
0
0
<COMMON> 578,000,000
<OTHER-SE> (83,400,000)
<TOTAL-LIABILITY-AND-EQUITY> 3,902,400,000
<SALES> 5,609,300,000
<TOTAL-REVENUES> 5,609,300,000
<CGS> 2,328,400,000
<TOTAL-COSTS> 2,328,400,000
<OTHER-EXPENSES> 182,800,000
<LOSS-PROVISION> 600,000
<INTEREST-EXPENSE> 100,500,000
<INCOME-PRETAX> 710,000,000
<INCOME-TAX> 258,300,000
<INCOME-CONTINUING> 445,400,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 445,400,000
<EPS-PRIMARY> 2.82
<EPS-DILUTED> 2.82
</TABLE>
