SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
GENERAL MILLS, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
<PAGE>
1998 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
GENERAL MILLS
P.O. BOX 1113, MINNEAPOLIS, MN 55440
August 14, 1998
To Our Stockholders:
The 1998 annual meeting of stockholders will be held in the auditorium of
the Children's Theatre Company, 2400 Third Avenue South, Minneapolis, Minnesota,
on Monday, September 28, 1998, at 11:00 a.m. Central Daylight Time. If you hold
the Company's common stock on July 30, 1998 or still hold shares of Ralcorp
Holdings, Inc. common stock that can be exchanged for General Mills common stock
as a result of the acquisition of the Ralcorp branded cereal and snack
businesses by the Company in 1997, you can vote at the annual meeting.
During the annual meeting we will discuss each item of business described
in this Notice of Annual Meeting and Proxy Statement, and give a current report
on the Company's business operations. There will also be time for questions. We
expect the meeting to adjourn at about 12:15 p.m.
WE HOPE YOU WILL BE ABLE TO ATTEND THE ANNUAL MEETING. IF YOU NEED SPECIAL
ASSISTANCE AT THE MEETING BECAUSE OF A DISABILITY, PLEASE CONTACT THE SECRETARY
OF THE COMPANY AT THE ADDRESS ABOVE. WHETHER OR NOT YOU EXPECT TO ATTEND, PLEASE
VOTE YOUR PROXY BY TELEPHONE OR VIA THE INTERNET, AS DESCRIBED IN THE
INSTRUCTIONS ON THE PROXY CARD, OR SIGN AND RETURN THE PROXY CARD IN THE
ENCLOSED ENVELOPE SO YOUR SHARES WILL BE VOTED AT THE ANNUAL MEETING.
Sincerely,
/s/ Stephen W. Sanger
Stephen W. Sanger
Chairman of the Board and
Chief Executive Officer
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
PAGE
Notice of Annual Meeting of Stockholders............................................iii
Proxy Statement...................................................................... 1
Election of Directors (Item No. 1)................................................... 3
Board Compensation and Benefits...................................................... 3
Committees of the Board.............................................................. 4
Share Ownership of Directors and Executive Officers.................................. 6
Information Concerning Nominees...................................................... 7
Approval of the Appointment of Independent Auditors (Item No. 2)..................... 9
Adoption of General Mills, Inc. 1998 Senior Management Stock Plan (Item No. 3).......10
Stockholder Resolution on Cumulative Voting (Item No. 4).............................13
Stockholder Resolution on Charitable Contributions (Item No. 5)......................14
Other Business.......................................................................15
Report of Compensation Committee on Executive Compensation...........................15
Total Return to Stockholders.........................................................19
Summary Compensation Table...........................................................20
Option Grants in Last Fiscal Year....................................................21
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values....22
Defined Benefit Retirement Plan......................................................22
Change of Control Arrangements.......................................................23
Stockholder Proposals for 1999 Annual Meeting........................................23
Appendix A..........................................................................A-1
</TABLE>
<PAGE>
GENERAL MILLS, INC.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS -- SEPTEMBER 28, 1998
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The annual meeting of stockholders of General Mills, Inc. will be held on
Monday, September 28, 1998, at 11:00 a.m., Central Daylight Time, in the
auditorium of the Children's Theatre Company, 2400 Third Avenue South,
Minneapolis, Minnesota. The purpose of the meeting is to:
1. Elect 13 directors;
2. Approve KPMG Peat Marwick LLP as General Mills' independent auditors for
fiscal 1999;
3. Act on the proposed 1998 Senior Management Stock Plan;
4. If presented, act on a stockholder proposal regarding cumulative voting;
5. If presented, act on a stockholder proposal concerning charitable
contributions; and
6. Act on any other proper business of the meeting.
The record date for the annual meeting is July 30, 1998. Only stockholders of
record at the close of business on that date and holders of Ralcorp Holdings,
Inc. common stock who are entitled to exchange their Ralcorp shares for General
Mills common stock but have not yet done so can vote at the meeting.
By Order of the Board of Directors,
IVY S. BERNHARDSON
Secretary
August 14, 1998
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(This page has been left blank intentionally.)
<PAGE>
GENERAL MILLS, INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
MONDAY, SEPTEMBER 28, 1998
VOTING PROCEDURES
THE BOARD OF DIRECTORS IS SOLICITING PROXIES TO BE USED AT THE 1998 ANNUAL
MEETING. THIS PROXY STATEMENT AND THE FORM OF PROXY WILL BE MAILED TO
STOCKHOLDERS BEGINNING AUGUST 14, 1998.
WHO CAN VOTE
Record holders of General Mills common stock on July 30, 1998 and holders of
Ralcorp Holdings, Inc. common stock eligible for exchange to General Mills
common stock may vote at the meeting. On July 30, 1998, 152,912,269 shares of
common stock, including 55,821 shares of General Mills common stock set aside
for the exchange of 354,402 shares of Ralcorp Holdings, Inc. common stock, were
outstanding. The shares of common stock in the Company's treasury on that date
will not be voted.
HOW YOU CAN VOTE
This year there are three voting methods:
(1) Via the Internet, by going to the web address
http://norwest.eproxy.com/qis/ and following the instructions for
Internet voting on the proxy card;
(2) Over the telephone, by dialing 1-800-240-6326 and following the
instructions for telephone voting on the proxy card; or
(3) By completing and mailing your proxy card.
If you return your signed proxy or use Internet or telephone voting before
the annual meeting, we will vote your shares as you direct. You have three
choices on each matter to be voted upon. For the election of directors, you may
vote for (1) all of the nominees, (2) none of the nominees or (3) all of the
nominees except those you designate. See "General Information" under Item No. 1.
For each of the other items, you may vote "FOR," "AGAINST" or "ABSTAIN" from
voting.
IF YOU DO NOT SPECIFY ON YOUR PROXY CARD OR THROUGH INTERNET OR TELEPHONE
PROMPTS HOW YOU WANT TO VOTE YOUR SHARES, WE WILL VOTE THEM "FOR" THE ELECTION
OF ALL DIRECTOR NOMINEES, "FOR" APPROVAL OF THE AUDITORS AND ADOPTION OF THE
1998 SENIOR MANAGEMENT STOCK PLAN AND "AGAINST" THE STOCKHOLDER PROPOSALS.
HOW YOU MAY REVOKE OR CHANGE YOUR VOTE
You can revoke your proxy at any time before it is voted at the meeting by:
* sending written notice of revocation to the Secretary;
* submitting another proper proxy by telephone, Internet or paper
ballot, after the revoked proxy; or
* attending the annual meeting and voting in person.
You may also be represented by another person at the meeting by executing a
proper proxy designating that person.
VOTES REQUIRED/VOTING PROCEDURE
You are entitled to cast one vote for each share of common stock you own. The
election of each director nominee, and each of the other items submitted for a
vote of the stockholders, must be approved by a
<PAGE>
majority of shares entitled to vote and represented at the meeting in person or
by proxy. Although abstentions and broker non-votes (described below) are
counted as present or represented at the meeting in order to determine whether
there is a quorum, they are treated as shares not voted in determining the
outcome of a specific matter and therefore have no effect on the outcome of that
matter. Proxies submitted by brokers that do not indicate a vote for some of the
proposals because the brokers don't have discretionary voting authority and
haven't received instructions from the beneficial owners on how to vote on those
proposals are called "broker non-votes." The Company has a policy of
confidential voting; Norwest Bank Minnesota tabulates the votes received.
AUTOMATIC DIVIDEND REINVESTMENT PLAN AND SAVINGS PLAN
Shares of common stock held by participants in the Company's dividend
reinvestment plan (including employee payroll deduction) have been added to the
participants' other holdings on their proxy cards. If a stockholder is a
participant in the Company's Savings Plan and has common stock in a Savings Plan
account, the proxy also serves as voting instructions to the Savings Plan
trustee. The Savings Plan trustee, Boston Safe Deposit and Trust Company, votes
allocated shares of common stock for which it has not received direction, as
well as shares not allocated to individual participant accounts, in the same
proportion as directed shares are voted.
CERTAIN OWNERS OF COMMON STOCK
The Company does not know of any holder with more than five percent of the
outstanding common stock, except that, for the quarter ended March 31, 1998, The
Capital Research and Management Group, 333 South Hope Street, 52nd Floor, Los
Angeles, CA 90071, filed a Form 13F with the Securities and Exchange Commission
(the "SEC") indicating that it held approximately 9,705,000 shares of common
stock (6.15% of the outstanding common stock) and Putnam Investments, Inc., One
Post Office Square, Boston, Massachusetts 02109, filed a Form 13F with the SEC
indicating that it held 8,123,186 shares of common stock (5.14% of the
outstanding common stock).
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on Company records and written representations from the Company's
executive officers and directors, each has filed reports under Section 16(a) of
the Securities Exchange Act of 1934 on time.
COSTS OF SOLICITATION
The Company will pay for preparation, printing and mailing this proxy statement.
We have engaged Georgeson & Company Inc. to help us solicit proxies from
stockholders for a fee of $12,500 plus their out-of-pocket expenses. Proxies may
also be solicited personally or by telephone by regular employees of the Company
without additional compensation, as well as by employees of Georgeson. The
Company will reimburse banks, brokers and other custodians, nominees and
fiduciaries for their costs of sending the proxy materials to our beneficial
owners.
ANNUAL REPORT
The 1998 Annual Report to Stockholders, which includes the consolidated
financial statements of the Company for the fiscal year ended May 31, 1998, was
mailed on or about August 14, 1998 to all stockholders entitled to vote at the
annual meeting. If you have not received the annual report, please call
1-800-245-5703 and a copy will be sent to you.
<PAGE>
ITEM NO. 1
ELECTION OF DIRECTORS
GENERAL
Thirteen directors will be elected at the annual meeting. Directors are elected
for a one-year term and serve until the next annual meeting where their
successors are elected, or, if earlier, until their resignation or removal. If
unforseen circumstances (such as death or disability) make it necessary for the
Board of Directors to substitute another person for any of the nominees, we will
vote your shares for that other person, unless you tell us not to on your proxy
card.
It is the Board of Directors' policy that non-employee directors serve on
the Board for no more than 15 years and retire at age 70 or five years after
normal retirement from their principal organization, whichever comes first.
BOARD COMPENSATION AND BENEFITS
General Mills structures director compensation to attract and retain qualified
non-employee directors, and to further align the interests of those directors
with the interests of stockholders by linking a portion of their compensation to
stock performance. If they choose to, directors can receive the entire amount of
their board remuneration in stock and stock-related compensation. Directors are
expected to keep all of the stock they receive as board compensation, net of any
stock used to pay taxes on such compensation, until they own shares equal in
market value to at least five times their annual cash retainer. The Company does
not have a retirement plan for its non-employee directors. Employee directors do
not receive additional compensation for serving on the board.
The Company has a planned gift program for directors which is funded by
life insurance policies on all directors. Upon the death of a director, the
Company donates $1 million to a qualifying charity recommended by the director.
The Company is then reimbursed by life insurance proceeds. The cost of the
program is not material to the Company and individual directors derive no
financial benefit from the program since the Company receives the entire
charitable deduction. The Company also pays the premiums on directors' and
officers' liability and travel accident insurance policies covering the
directors.
MEETING FEES
Non-employee directors receive the following fees for their service on the
board:
Annual Retainer................... $35,000
Fee for Each Board Meeting........ 1,000
Fee for Each Committee Meeting.... 1,000
Directors can elect to have these amounts paid quarterly in cash or in
Company common stock having a market value equal to the payment, or defer
payment until a later date. If deferred, the deferred amount earns interest
based on the director's selection from among the funds offered to employees
participating in the Company's deferred compensation plan. One of the fund rates
tracks the return on the Company's common stock.
In fiscal 1998, L. D. DeSimone and M. D. Rose elected to receive all of
their remuneration in common stock; W. T. Esrey, J. R. Hope, A. M. Spence and D.
A. Terrell received cash payments; R. M. Bressler, K. A. Macke and C. A. Wurtele
deferred cash payments and R. V. Gilmartin received 50% in common stock and 50%
in cash.
<PAGE>
RESTRICTED STOCK
Each year they are elected to the board, non-employee directors receive 500
shares of restricted common stock which cannot be sold or transferred until the
next annual meeting and are forfeited if the director leaves the board before
the end of the restricted period. Directors may elect to defer receiving the
common stock issuable at the end of the restricted period by choosing to receive
restricted stock units instead of restricted stock. Stock units earn amounts
equal to the dividend payments on the Company's common stock. These amounts can
be reinvested or paid to the director.
STOCK OPTIONS
Non-employee directors also receive options to purchase 2,500 shares of common
stock each time they are elected. The per share price the director pays at
exercise is the market price of the common stock on the date of the grant. The
options become exercisable at the next annual meeting and expire ten years after
grant.
COMMITTEES OF THE BOARD
During the fiscal year ended May 31, 1998, the board of directors met six times
and various committees of the board met a total of eight times. Director
attendance at board meetings and all committee meetings averaged 92%. All the
directors attended 75% or more of the board meetings and the meetings of board
committees on which the director serves.
AUDIT COMMITTEE
Number of Members: Six non-employee directors
Members: Michael D. Rose (Chair), Richard M. Bressler, William T. Esrey,
Judith Richards Hope, A. Michael Spence, C. Angus Wurtele
Number of Meetings in 1998: Three
Functions: * Oversees internal controls, audits, compliance program and
financial reporting
* Recommends independent accountants, subject to shareholder
approval, and ensures their independence
* Consults with these accountants and reviews and approves the
scope of their audit
* Reviews the Company's use of derivative instruments
COMPENSATION COMMITTEE
Number of Members: Four non-employee directors
Members: Richard M. Bressler (Chair), Livio D. DeSimone, Kenneth A. Macke,
Michael D. Rose
Number of Meetings in 1998: Two
Functions: * Reviews compensation policies of the Company to ensure they
provide appropriate motivation for corporate performance and
increased shareholder value; determines compensation policy for
executives
* Conducts performance review of the chairman; recommends
compensation of the board members including the chairman and the
management members of the board and approves compensation and
stock grants to other senior executives
EXECUTIVE COMMITTEE
Number of Members: Eight
Members: Stephen W. Sanger (Chair), Richard M. Bressler, Livio D. DeSimone,
William T. Esrey, Charles W. Gaillard, Kenneth A. Macke, Michael D.
Rose, Raymond G. Viault
Number of Meetings in 1998: None
Functions: * May take all action that could be taken by full board
* May meet between regular board meetings to take action necessary
for the Company to operate efficiently
<PAGE>
FINANCE COMMITTEE
Number of Members: Five non-employee directors
Members: William T. Esrey (Chair), Livio D. DeSimone, A. Michael Spence,
Dorothy A. Terrell, C. Angus Wurtele
Number of Meetings in 1998: Two
Functions: * Reviews financial policies and performance objectives, including
dividend policy
* Reviews changes in the Company's capital structure, including
debt issuances, common stock sales, repurchases and stock splits
NOMINATING COMMITTEE
Number of Members: Six non-employee directors
Members: Kenneth A. Macke (Chair), Richard M. Bressler, William T. Esrey,
Judith Richards Hope, Michael D. Rose, A. Michael Spence
Number of Meetings in 1998: One
Functions: * Recommends candidates for election to the board
* Develops policy on composition, participation and size of board;
tenure and retirement of directors
* Recommends changes in the organization and procedures of the
board, including corporate governance
The Nominating Committee will consider director candidates proposed by
stockholders. Candidates must be highly qualified and be both willing and
expressly interested in serving on the board. Candidates should represent the
interests of all stockholders and not those of a special interest group. A
stockholder wishing to nominate a candidate should forward the candidate's
name and a detailed background of the candidate's qualifications to the
Secretary of the Company.
PUBLIC RESPONSIBILITY COMMITTEE
Number of Members: Five non-employee directors
Members: C. Angus Wurtele (Chair), Livio D. DeSimone, Judith Richards Hope,
Kenneth A. Macke, Dorothy A. Terrell
Number of Meetings in 1998: None
Functions: * Reviews public policy and social trends affecting the Company
* Monitors the Company's corporate citizenship activities
* Evaluates Company policies to ensure they meet ethical
obligations to employees, consumers and society
OTHER INFORMATION
During fiscal 1998, the Company employed the firm of Paul, Hastings, Janofsky &
Walker LLP, for which director Judith Richards Hope is senior counsel, for
certain patent matters handled by a partner of that firm. Fees of approximately
$10,600 were paid to the firm.
<PAGE>
SHARE OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The table below shows how much General Mills common stock each director and
executive officer named in the Summary Compensation Table owned on June 30,
1998. It includes restricted stock and restricted stock units as well as shares
allocated to participant accounts under the Savings Plan. No director or
executive officer owns more than .30% of the total outstanding shares (including
exercisable options). All directors and executive officers as a group own 1.92%
of the total outstanding shares (including exercisable options).
NAME SHARES(a) NAME SHARES(a)
- ---- -------- ---- --------
R. M. Bressler........... 15,102(b) S. S. Marshall........... 17,191
S. R. Demeritt........... 42,628 M. D. Rose............... 8,979(d)
L. D. DeSimone........... 11,628 S. W. Sanger............. 78,899
W. T. Esrey.............. 7,304 A. M. Spence............. 4,508
C. W. Gaillard........... 71,028(c) D. A. Terrell............ 2,556
R. V. Gilmartin.......... 1,636 R. G. Viault............. 15,734
J. R. Hope............... 7,855 C. A. Wurtele............ 24,515(b)
K. A. Macke.............. 7,586(b)
All directors and executive officers as a group.......................580,825
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(a) In addition, the following shares may be acquired within 60 days pursuant to
exercisable options: R. M. Bressler, 2,500 shares; S. R. Demeritt, 218,869
shares; C. W. Gaillard, 408,659 shares; S. S. Marshall, 9,320 shares; S. W.
Sanger, 397,870 shares; R. G. Viault, 22,480 shares and all other listed
persons 5,538 shares each except R. V. Gilmartin who has no exercisable
options; and all directors and executive officers as a group, 2,440,607
shares.
(b) In addition to the shares listed the following directors have share
equivalents in a deferred compensation account tracking the value of the
Company's common stock as follows: R. M. Bressler, 910, K. A. Macke, 155,
and C. A. Wurtele, 297.
(c) Included in the shares for Mr. Gaillard are 684 shares owned by members of
his family, in which he disclaims any beneficial interest.
(d) Included in the shares for Mr. Rose are 600 shares owned by or held in trust
for members of his family, in which he disclaims any beneficial interest.
<PAGE>
INFORMATION CONCERNING NOMINEES
[PHOTO]
RICHARD M. BRESSLER Director since 1984
Richard M. Bressler, age 67, is the retired Chairman of the Board of El Paso
Natural Gas Company. He joined Burlington Northern Inc. as President and Chief
Executive Officer in 1980 and retired from that position in 1990. He previously
served as a General Mills director in 1978-79. Mr. Bressler is also a director
of H. F. Ahmanson & Company and Rockwell International Corporation.
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[PHOTO]
LIVIO D. DESIMONE Director since 1989
Livio D. DeSimone, age 62, is Chairman of the Board and Chief Executive Officer,
Minnesota Mining and Manufacturing Company (3M). Mr. DeSimone joined 3M in 1957
and has served in various U.S. and international capacities. Mr. DeSimone was
elected an Executive Vice President in 1981 and named Chairman and Chief
Executive Officer in 1991. He is a director of 3M, Cargill Incorporated, Dayton
Hudson Corporation and Vulcan Materials Company.
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[PHOTO]
WILLIAM T. ESREY Director since 1989
William T. Esrey, age 58, is Chairman and Chief Executive Officer of Sprint
Corporation. Mr. Esrey has been Chairman of Sprint since 1990 and Chief
Executive Officer since 1985. Mr. Esrey is a director of Sprint, The Equitable
Life Assurance Society of the United States, Everen Capital Corporation, Exxon
and Duke Energy Corp.
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[PHOTO]
CHARLES W. GAILLARD Director since 1993
Charles W. Gaillard, age 57, has been President of General Mills since 1995. Mr.
Gaillard joined General Mills in 1966 and advanced through various food
marketing management positions, becoming Executive Vice President in 1989 and
Vice Chairman in 1993. From 1989 to 1993 he was Chief Executive Officer of
Cereal Partners Worldwide, a joint venture of the Company and Nestl|fe, S.A. Mr.
Gaillard is a director of Whitman Corporation. He also serves as a member of the
Industry Productivity Council of the Grocery Manufacturers of America, is on the
Board of Overseers for The Carlson School of Management of the University of
Minnesota and is Vice President of the Minnesota Orchestral Association Board.
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[PHOTO]
RAYMOND V. GILMARTIN Director since February 1998
Raymond V. Gilmartin, age 57, has been Chairman of the Board, President and
Chief Executive Officer of Merck & Company, Inc. (pharmaceuticals) since
November 1994. He previously served as Chairman, President and Chief Executive
Officer of Becton Dickinson and Company. He is Chairman of the Pharmaceutical
Research and Manufacturers of America, a director of the Public Service
Enterprise Group, and a member of The Business Council and The Business
Roundtable.
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<PAGE>
[PHOTO]
JUDITH RICHARDS HOPE Director since 1989
Judith Richards Hope, age 57, is senior counsel to the law firm of Paul,
Hastings, Janofsky & Walker LLP, Los Angeles, California and Washington, DC. Ms.
Hope is also a director of Union Pacific Corporation and Zurich Holding Company
of America, Inc. She is a Member of the Harvard Corporation (The President and
Fellows of Harvard College) and President of the International Law Institute.
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[PHOTO]
KENNETH A. MACKE Director since 1991
Kenneth A. Macke, age 60, is the retired Chairman and Chief Executive Officer of
Dayton Hudson Corporation (DHC). He joined Dayton's in 1961 and advanced through
various management positions at Dayton's and Target. He served as President of
DHC from 1981 to 1984. He was elected Chief Operating Officer of DHC in 1982,
Chief Executive Officer in 1983 and Chairman of the Board in 1984. He is a
director of Fingerhut Companies, Inc., Carlson Companies, Inc., Select Comfort,
Inc. and Unisys Corporation. He is also the general partner of Macke Partners, a
private venture capital firm.
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[PHOTO]
MICHAEL D. ROSE Director since 1985
Michael D. Rose, age 56, served as Chairman of the Board of Promus Hotel
Corporation (lodging) from April 1995 until his retirement in December 1997. Mr.
Rose joined Promus' predecessor company, Holiday Inns Inc., in 1974 and
subsequently held executive positions at Holiday and Promus, serving as Chief
Executive Officer of Holiday from 1981 to 1990, and as Chief Executive Officer
of Promus from 1990 to 1994. He also served as Chairman of the Board of Harrah's
Entertainment Inc. from 1995 to December 1996. Mr. Rose is a director of
Ashland, Inc., Darden Restaurants, Inc., Felcor Suites Hotels, Inc., First
Tennessee National Corp., Promus Hotel Corporation, ResortQuest International,
Inc. and Stein Mart, Inc.
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[PHOTO]
STEPHEN W. SANGER Director since 1992
Stephen W. Sanger, age 52, has been Chairman and Chief Executive Officer of
General Mills since 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, an Executive Vice President in 1991,
Vice Chairman in 1992 and President in 1993. He is a director of Dayton Hudson
Corporation and Donaldson Company, Inc.
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[PHOTO]
A. MICHAEL SPENCE Director since 1992
Dr. A. Michael Spence, age 54, has been Dean of the Graduate School of Business
at Stanford University since 1990. Dean Spence served on the faculty at Harvard
University in both the Business School and the Faculty of Arts and Sciences as
professor of economics and business administration from 1975 to 1990. From 1984
to 1990 he served as the Dean of the Faculty of Arts and Sciences at Harvard.
Dean Spence is a director of BankAmerica Corporation, Nike, Inc., Sun
Microsystems, Inc. and Siebel Systems, Inc. He is a Fellow of the Econometric
Society and is former Chairman of the National Research Council Board on
Science, Technology and Economic Policy.
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<PAGE>
[PHOTO]
DOROTHY A. TERRELL Director since 1994
Dorothy A. Terrell, age 53, is Senior Vice President, Corporate Operations and
President, Services Group of Natural MicroSystems Corporation, a producer of
hardware and software component products for telecommunications applications.
She joined the company in 1998. She previously served in various executive
management capacities at Sun Microsystems, Inc. from 1991 to 1997 and Digital
Equipment Corporation from 1976 to 1991. Ms. Terrell is a director of Sears
Roebuck and Company, Herman Miller, Inc., and is on the board of the
Massachusetts Technology Development Corporation and the National Housing
Partnership Foundation.
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[PHOTO]
RAYMOND G. VIAULT Director since 1996
Raymond G. Viault, age 54, is Vice Chairman of the Company, with overall
responsibility for international operations, global convenience foods, business
development and financial activities. 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. Mr. Viault is a director of Willis Corroon plc. He
also serves on the Board of Overseers for the Columbia Graduate School of
Business and the board of the United Way of Minneapolis.
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[PHOTO]
C. ANGUS WURTELE Director since 1985
C. Angus Wurtele, age 63, is the retired Chairman of the Board of The Valspar
Corporation (paints and coatings producer), a position he held since 1973. He
served as Valspar's Chief Executive Officer from 1973 through 1995. Mr. Wurtele
is a director of Valspar, Bemis Company, Inc. and IDS Mutual Funds Group. He is
also a director of The Bush Foundation.
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IF YOU SIGN AND RETURN THE PROXY FORM AND DO NOT SPECIFY OTHERWISE, OR VOTE
AS THE GENERAL MILLS BOARD RECOMMENDS USING TELEPHONE OR INTERNET VOTING, WE
WILL VOTE YOUR SHARES FOR THE ELECTION OF THE THIRTEEN NOMINEES LISTED ABOVE.
ITEM NO. 2
APPROVAL OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The Audit Committee of the board of directors selects and hires independent
public accountants to audit the Company's books, subject to ratification by the
stockholders. The Audit Committee recommends KPMG Peat Marwick LLP to audit the
Company's consolidated financial statements for the fiscal year beginning June
1, 1998. Peat Marwick has audited the books of the Company since 1928. During
fiscal 1998, General Mills paid Peat Marwick $1,665,000 for audit and other
services. Representatives of the firm will be at the annual meeting, where they
will have an opportunity to make a statement and answer questions.
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR THE APPOINTMENT OF KPMG PEAT
MARWICK LLP AS AUDITORS. IF YOU SIGN AND RETURN THE PROXY FORM AND DO NOT
SPECIFY OTHERWISE, OR VOTE AS THE GENERAL MILLS BOARD RECOMMENDS USING TELEPHONE
OR INTERNET VOTING, WE WILL VOTE YOUR SHARES TO APPROVE THE APPOINTMENT OF KPMG
PEAT MARWICK LLP AS THE INDEPENDENT AUDITORS.
<PAGE>
ITEM NO. 3
ADOPTION OF GENERAL MILLS, INC. 1998 SENIOR MANAGEMENT STOCK PLAN
The stockholders are asked to consider and vote upon a proposal to adopt the
1998 Senior Management Stock Plan (the "1998 Plan"). The summary of major
features of the 1998 Plan that follows is subject to the specific provisions in
the full text of the 1998 Plan set forth as Appendix A to this Proxy Statement.
PURPOSE
The Stock Option and Long-Term Incentive Plan of 1993 (the "1993 Plan") will
expire by its terms on October 1, 1998. On June 22, 1998, the Board of Directors
adopted the 1998 Plan, subject to stockholder approval, to help attract and
retain competitively superior employees and promote long-term Company growth and
profitability by further aligning employee and stockholder interests.
Through the 1998 Plan, the Company will make periodic stock option grants
to its senior executives and other selected participants. The purpose of these
stock options is to further align executive and shareholder interests, to ensure
a tight link between executive compensation and increases in Company stock
value, and to lead to increased individual and aggregate executive stock
ownership.
KEY TERMS
<TABLE>
<S> <C>
PLAN TERM: September 28, 1998 -- October 1, 2003
ELIGIBLE PARTICIPANTS: Employees selected by the Compensation Committee
SHARES AUTHORIZED: (1) 6,300,000, plus
(2) 1,200,000, which remain available on September 28, 1998 for
issuance under the 1993 Plan, plus
(3) any shares subject to stock options which are forfeited under the
1998 Plan or other shareholder-approved stock plans of the
Company.
SHARES AUTHORIZED AS A
PERCENT OF OUTSTANDING
COMMON STOCK: 4.9%
AWARD TYPES: (1) Non-Qualified Stock Options with a term no longer than 10 years
and one month, and
(2) Incentive Stock Options with a term no longer than 10 years (limit
7,500,000 shares)
SHARE LIMITS PER PERSON: Stock Options covering no more than 2,500,000 shares may be issued to
any single Participant under the 1998 Plan
VESTING: Determined by Compensation Committee, but not less than 3 years
DEPOSITS: The Compensation Committee may require deposits of Common Stock
owned by the Participant as a condition to grants under the Plan.
NOT PERMITTED WITHOUT (1) To increase number of shares authorized under Plan;
SHAREHOLDER APPROVAL: (2) To grant stock options at a price below fair market value;
(3) To authorize repricing of stock options; and
(4) To change per person share limit.
</TABLE>
ELIGIBILITY
Only employees of the Company and its subsidiaries and affiliates are eligible
to receive stock options under the 1998 Plan. The Compensation Committee will
determine which employees will be "Participants" in the Plan. It is intended
that the primary recipients of grants under the 1998 Plan will be the Company's
officers and other key employees.
<PAGE>
ADJUSTMENTS
In the event of a stock dividend, recapitalization, stock split, reorganization,
merger, spin-off, repurchase or exchange of the Company's common stock ($.10 par
value) ("Common Stock") or similar event affecting the Common Stock, the
Compensation Committee may, in its discretion, adjust the number and kind of
shares granted under the 1998 Plan, the number and kind of shares subject to
outstanding stock options and the exercise price of outstanding stock options.
EXERCISE
The exercise price of stock options granted under the 1998 Plan may not be less
than the fair market value of the Common Stock on the date of grant and the
option term must not be longer than 10 years and one month for Non-Qualified
Stock Options and 10 years for Incentive Stock Options. The Compensation
Committee will determine at the time of grant when each stock option becomes
exercisable, provided that no stock option may be exercised less than three
years from the date of grant. Payment of the exercise price of a stock option
may be in cash, Common Stock owned by the Participant or by a combination of
cash and Common Stock. The Company may require, prior to issuing Common Stock
under the Plan, that the Participant remit an amount in cash or Common Stock
sufficient to satisfy tax withholding requirements.
TRANSFERABILITY
Stock options granted under the 1998 Plan are transferable only as provided by
the rules of the Compensation Committee, by the Participant's last will and
testament, and by the applicable laws of descent and distribution.
CHANGE OF CONTROL
Stock options granted under the 1998 Plan will become exercisable upon the
occurrence of a "Change of Control" as defined in Section 10 of the 1998 Plan.
TERMINATION, DEATH AND RETIREMENT
Subject to certain exceptions, stock options will terminate three months after
the termination of Participant's employment. If a Participant dies while
employed by the Company, outstanding stock options granted to the Participant
may be exercised by the person designated in the Participant's will, or in the
absence of such designation, by the Participant's estate, to the full extent the
stock option could have been exercised immediately prior to death. A pro-rata
portion of stock options not exercisable on the date of death shall become
exercisable. Unless otherwise provided by the Compensation Committee at the time
of grant, if a Participant retires, the Participant may thereafter exercise
stock options according to their original terms.
ADMINISTRATION
The 1998 Plan will be administered by the Compensation Committee. The
Compensation Committee will select employees of the Company who shall receive
stock options, determine the number of shares covered by the grants and
establish the terms, conditions and other provisions of the grants. The
Compensation Committee may interpret the 1998 Plan and establish, amend and
rescind any rules relating to the 1998 Plan. The Compensation Committee may
delegate all or part of its responsibilities to anyone it selects.
<PAGE>
AMENDMENTS
Subject to approval of the Board of Directors, where required, the Compensation
Committee may terminate, amend or suspend the 1998 Plan, provided that no action
may be taken by the Compensation Committee or the Board of Directors without the
approval of the stockholders to:
(i) materially increase the number of shares which may be issued under
the Plan;
(ii) permit granting of stock options at less than fair market value;
(iii) except as in the case of a corporate transaction affecting the
common stock, permit the repricing of outstanding stock options; and
(iv) amend the maximum shares set forth which may be granted as stock
options to any Participant.
TAX CONSEQUENCES
Stock Option grants under the 1998 Plan may be either Non-Qualified Stock
Options governed by Section 83 of the Internal Revenue Code of 1986, as amended
(the "Code") or Incentive Stock Options described in Section 422(b) of the Code.
Generally, no federal income tax is payable by a Participant upon the grant of a
stock option.
Under current tax law, if a Participant exercises a Non-Qualified Stock
Option, he or she will be taxed on the difference between the fair market value
of the Common Stock on the exercise date and the option price. The Company will
be entitled to a corresponding deduction on its income tax return. If an
Incentive Stock Option is exercised by a Participant who satisfies certain
employment requirements at the time of exercise, the Participant will not be
deemed to have received any income subject to tax at that time, although the
excess of the fair market value of the Common Stock acquired on the date of
exercise over the exercise price will be an item of tax preference for purposes
of the alternative minimum tax. Section 422 of the Code provides that if the
Common Stock is held at least one year after the exercise date and two years
after the date of grant, the Participant will realize a long term capital gain
or loss upon a subsequent sale, measured as the difference between the exercise
price and the sales price. If Common Stock acquired upon the exercise of an
Incentive Stock Option is not held for one year, a "disqualifying disposition"
results, at which time the Participant is deemed to have received an amount of
ordinary income equal to the lesser of (a) the excess of the fair market value
of the Common Stock on the date of exercise over the exercise price or (b) the
excess of the amount realized on the disposition of the shares over the exercise
price. If the amount realized on the "disqualifying disposition" of the Common
Stock exceeds the fair market value on the date of exercise, the gain on the
excess of the ordinary income portion will be treated as capital gain. Any loss
on the disposition of Common Stock acquired through the exercise of an Incentive
Stock Option is a capital loss. No income tax deduction will be allowed to the
Company with respect to shares of Common Stock purchased by a Participant
through the exercise of an Incentive Stock Option, provided there is no
"disqualifying disposition" as described above. In the event of a "disqualifying
disposition," the Company is entitled to a tax deduction equal to the amount of
ordinary income recognized by the Participant.
OTHER INFORMATION
For a discussion of the Company's executive compensation policy, employee stock
program and new reward system please refer to the Report of the Compensation
Committee on page 15.
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR THE 1998 SENIOR MANAGEMENT
STOCK PLAN. IF YOU SIGN AND RETURN THE PROXY FORM AND DO NOT SPECIFY OTHERWISE,
OR VOTE AS THE GENERAL MILLS BOARD RECOMMENDS USING TELEPHONE OR INTERNET
VOTING, WE WILL VOTE YOUR SHARES TO APPROVE THE ADOPTION OF THE 1998 SENIOR
MANAGEMENT STOCK PLAN.
<PAGE>
ITEM NO. 4
STOCKHOLDER RESOLUTION ON CUMULATIVE VOTING
John J. Gilbert, owner of 770 shares, and Margaret R. Gilbert and John J.
Gilbert, both of 29 East 64th Street, New York, New York 10021, who state that
they are co-trustees under various wills for 439 shares, have notified the
Company in writing that they intend to present the following resolution at the
Annual Meeting:
"RESOLVED: That the stockholders of General Mills, Inc., assembled in
annual meeting in person and by proxy, hereby request the Board of
Directors to take the steps necessary to provide for cumulative voting in
the election of directors, which means each stockholder shall be entitled
to as many votes as shall equal the number of shares he or she owns
multiplied by the number of directors to be elected, and he or she may cast
all of such votes for a single candidate, or any two or more of them as he
or she may see fit."
The statement of the stockholders in support of the resolution is as
follows:
"Continued very strong support along the lines we suggest were shown at the
last annual meeting when 27.2%, 2,247 owners of 32,983,570 shares, were cast in
favor of this proposal. The vote against included 3,076 unmarked proxies.
"California law still requires that unless stockholders have voted not to
have cumulative voting they do have it. Ohio has the same provision.
"The National Bank Act provides for cumulative voting. In many cases
companies get around it by forming holding companies without cumulative voting.
Banking and other authorities should question the capability of directors to be
on boards. In many cases authorities come in after and say the director or
directors were not qualified. We were delighted to see the SEC has finally taken
action to prevent bad directors from being on boards of public companies. The
SEC should have hearings to prevent such persons becoming directors before they
harm investors.
"The recent banking failures throughout the world shows the importance of
cumulative voting and to get better directors on the board.
"Many successful corporations have cumulative voting. Pennzoil defeated
Texaco in that famous case. Texaco's recent problems might have also been
prevented with cumulative voting, getting directors on the board to prevent such
things. Ingersoll-Rand having cumulative voting, won two awards.
"Another good example is Union Pacific, having troubles with freight
shipments which were backed up for months. Merger with Southern Pacific is
excuse. Last year, Union Pacific took away cumulative voting.
"Lockheed-Martin, as well as VWR Corporation have a provision that if
anyone has 40% or more of the shares cumulative voting applies.
"In 1995 American Premier adopted cumulative voting. Alleghany Power System
tried to take away cumulative voting and put in a stagger system, and
stockholders defeated it, showing stockholders are interested in their rights.
Very successful Hewlett Packard has cumulative voting.
"If you agree, please mark your proxy for this resolution; otherwise it is
automatically cast against it, unless you have marked to abstain."
RESOLVED, THAT THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE
ADOPTION OF THE STOCKHOLDER RESOLUTION ON CUMULATIVE VOTING FOR THE FOLLOWING
REASONS:
The Board of Directors believes that the adoption of cumulative voting
could hurt the Company rather than help it become more successful. General Mills
has consistently maintained a strong, independent Board of Directors, with each
member elected annually. Directors are chosen for their accomplishment,
commitment, integrity and diversity of background and experience. Cumulative
voting can create "special interest" directors who may focus on representing the
interests of their constituencies
<PAGE>
rather than the stockholders as a whole. Cumulative voting at General Mills
could permit a stockholder or group of holders owning substantially less than a
majority of the Company's stock to elect their own director. Having a special
interest director on the Board could alter the proper balance, diversity and
independence of the Board and inhibit its discussions and decision-making,
shifting the Board's attention away from the Company's strategic plans to the
director's single interest agenda.
Even advocates for cumulative voting acknowledge that it will not be a
useful tool to enhance shareholder value at every company. Because of our strong
commitment to corporate governance and focus on financial performance goals,
General Mills would not benefit from cumulative voting and could be harmed by
its adoption.
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE AGAINST THIS STOCKHOLDER
PROPOSAL. IF YOU SIGN AND RETURN YOUR PROXY FORM AND DO NOT SPECIFY OTHERWISE,
OR VOTE AS THE GENERAL MILLS BOARD RECOMMENDS USING TELEPHONE OR INTERNET
VOTING, WE WILL VOTE YOUR SHARES AGAINST THE PROPOSAL.
ITEM NO. 5
STOCKHOLDER RESOLUTION ON CHARITABLE CONTRIBUTIONS
Helen G. and Charles Kleinbrook, owners of 25 shares, both of 8201 Hazelton,
Dearborn Heights, Michigan 48127-1548 have notified the Company in writing that
they intend to present the following resolution at the Annual Meeting:
"Whereas, corporate charitable contributions should serve to enhance
shareholder value.
"Whereas, the company makes contributions to groups that engage in
controversial activities.
"Whereas, support of these groups has resulted in consumer boycotts of the
company's products and services. These boycotts have possibly negatively
impacted sales, earnings, and ultimately shareholder value.
"THEREFORE, BE IT RESOLVED: That the Shareholders request the Board of
Directors of the corporation to refrain from making any charitable
contributions. Money normally allocated for such purposes could be
distributed in a special "charitable" dividend payable to the individual
owners of the company. It could be suggested they give it to the charity of
their choice."
The statement of the stockholders in support of the resolution is as
follows:
"Charitable giving is most beneficial to society when it is done by
individuals and not by corporate entities or the federal government.
Shareholders entrust their money to General Mills to get a good return, not to
see it given to someone else's favorite charity. Gifts to the
abortion-performing group, Planned Parenthood, or groups promoting same sex
marriages can produce large amounts of bad will toward the company. Let's hear
it for choice -- the choice of individual shareholders to decide where their
money should be given.
RESOLVED, THAT THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE
SHAREHOLDER PROPOSAL REQUESTING THAT THE BOARD OF DIRECTORS REFRAIN FROM MAKING
CHARITABLE CONTRIBUTIONS FOR THE FOLLOWING REASONS:
General Mills' long-term record of charitable giving, combined with
widespread employee volunteerism, is vital to the Company's well-earned
reputation as a socially responsible company among investors, consumers and
employees.
Each year the General Mills Foundation receives over 2000 requests for
donations and contributions. The Foundation evaluates the requests against its
established policies and strategic objectives. These objectives include:
improving quality of life in the communities with Company facilities and
employees, supporting employee and retiree volunteerism and enhancing the
Company's image and reputation as an excellent corporate citizen. In addition we
have a small corporate budget for contributions that do not meet the strategic
objectives or criteria of the Foundation, but provide an identified corporate
benefit. On a regular basis, we also make product donations to food bank
networks across the country. Our record of giving and corporate citizenship has
generated significant goodwill
<PAGE>
toward the Company and its products, and we have been nationally recognized for
our charitable activities. Our reputation for corporate citizenship is also an
important factor in attracting and retaining the most qualified employees.
Despite the Kleinbrooks' claim that boycotts may have hurt company sales,
the Company is not aware of any boycott of its products, either related to
Foundation contributions or otherwise, that has had any measurable effect on our
sales or earnings.
Charitable giving is one of many ways the Company builds shareholder value.
Foundation contributions improve the communities where our employees live,
create recognition for our Company and its products, and help us attract top
people. Refraining from making these contributions would erode, not enhance, the
value of the Company to shareholders.
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE AGAINST THIS STOCKHOLDER
PROPOSAL. IF YOU SIGN AND RETURN YOUR PROXY FORM AND DO NOT SPECIFY OTHERWISE,
OR VOTE AS THE GENERAL MILLS BOARD RECOMMENDS USING TELEPHONE OR INTERNET
VOTING, WE WILL VOTE YOUR SHARES AGAINST THE PROPOSAL.
OTHER BUSINESS
We do not know of any other matters to be presented at the meeting. If any other
matter is properly presented for a vote at the meeting, your shares will be
voted by the holders of the proxies using their best judgment.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
INTRODUCTION
The Compensation Committee is responsible for setting and administering the
Company's executive compensation policy.
The Committee bases the Company's compensation programs on performance.
Base salaries are generally lower than those at comparable companies in the
consumer products business sector, but they are coupled with an incentive system
that pays more with good performance and less for below par performance. The
Committee also believes that broad and deep employee stock ownership effectively
motivates the building of stockholder wealth and aligns the interests of
employees with those of stockholders. The Committee has established specific
stock ownership objectives for key management employees and has created programs
that encourage all employees to have an ownership interest in the Company.
Each year, the Committee evaluates Company performance, actual compensation
and share ownership, compared with both large consumer product companies and a
broader group of leading industrial companies.
PROGRAM ELEMENTS
General Mills' executive compensation program is made up of base salary, annual
incentive and long-term incentive compensation. The incentive compensation has
two parts: an annual incentive compensation program and a stock compensation
plan. The Company also provides several innovative programs to encourage
long-term stock ownership.
BASE SALARY
Base salaries for executives are generally lower than at comparable companies
because of the Company's emphasis on performance-oriented incentive compensation
and because executives are eligible to participate in the Salary Replacement
Stock Option Plan (described below). All salaried employees, including
executives, are eligible for an annual merit increase to their base salary
determined primarily by performance of their job responsibilities and
accomplishment of pre-determined performance objectives.
ANNUAL INCENTIVE
The Company provides executives with an annual opportunity to earn cash
incentive awards through the Executive Incentive Plan (EIP), which was last
approved by shareholders in 1996. Awards are based
<PAGE>
upon corporate, business unit and individual performance. The corporate
performance rating is directly tied to the Company's earnings per share and
return on capital performance during the fiscal year. Historical performance on
these two measures is summarized inside the front cover of the 1998 annual
report.
Business unit ratings are based primarily on profit, market share, and
volume performance of the business unit. Factors such as new product
development, diversity, and progress on strategic goals are also considered as
appropriate. Individual performance ratings are based on each executive's
achievement of specific annual financial objectives, as well as other factors
like the quality of the strategic plan and progress in organization and
management development.
For senior officers, cash incentive awards are determined by multiplying a
target incentive rate (a percentage of salary that increases with the level of
responsibility) by the individual performance rating and by the corporate
performance rating. For other executive officers, the corporate rating may be
weighted with a business unit rating. Corporate and business unit ratings can
range from 0 to 1.80, with top quartile performance resulting in ratings of 1.50
or higher. Individual ratings can range from 0 to 1.50. Receipt of cash
incentive awards under the EIP may be deferred to a subsequent date or to
retirement.
Under the EIP, executives are also eligible to receive a supplemental
restricted stock matching award equal to 25% of the cash EIP award. To receive
this award, the executive must place on deposit with the Company
personally-owned shares equal in number to the number of shares awarded as
restricted stock. The restricted shares vest 50% after three years and 50% after
six years, provided the owned shares remain on deposit with the Company for the
entire six-year period. Restricted shares granted under the EIP are included in
the Summary Compensation Table on page 20 under the "Restricted Stock Awards"
heading.
LONG-TERM INCENTIVE
The Company provides executives with a long-term incentive compensation
opportunity through the 1993 Stock Option and Long-Term Incentive Plan (approved
by stockholders with a 93.7% favorable vote) and, if approved, the 1998 Senior
Management Stock Plan. Each December, stock options are granted to officers and
other selected employees based upon their level of responsibility in the
Company, ability to impact results, and individual performance. The size of
regular stock option grants to the executive officers, including the Chief
Executive Officer, is periodically reviewed against option grants made by other
large consumer products companies to their CEO and other senior executives. The
Company's option grants rank in size above the median range of option grants
made by the comparative organizations, because of (i) the payment of generally
lower base salaries (described above), and (ii) the Company's emphasis on
employee stock ownership and reliance on option grants as the fundamental means
of long-term incentive compensation, both of which are intended to maximize
personal performance of Company managers and align their interests with
shareholders. The table on page 21 summarizes the options granted in fiscal 1998
to all employees and to the five named officers.
Also, the Company has periodically provided special all-employee stock
options, which are granted to all employees not receiving regular stock option
grants. The Company made such grants to eligible employees in 1993 and 1995.
These broad-based option awards are designed to expand employee stock ownership
and provide further motivation throughout the Company to achieve corporate
performance objectives. In special circumstances, the Company makes limited
special grants of restricted stock to certain key employees.
Anticipating the expiration of the 1993 Plan in October 1998, on June 22,
1998, the Board of Directors adopted the 1998 Employee Stock Plan (the "1998
Employee Plan"). Under the 1998 Employee Plan, up to three million shares of
Common Stock are available for issuance as stock options and restricted stock.
Grants of restricted stock are limited to 15% of the total number of shares
authorized to be issued under the 1998 Employee Plan. All of the Company's
employees are eligible to participate in the 1998 Employee Plan and the Company
anticipates making at least one Company-wide stock option grant under it.
<PAGE>
STOCK OWNERSHIP GRANTS
The stock matching feature of the EIP is designed to encourage additional
longer-term stock ownership by Company executive officers. The Company also
provides two additional programs to encourage additional share ownership:
deposit stock options and salary replacement stock options.
The deposit stock option program, introduced in 1987, offers executives a
supplemental stock option opportunity equal to the most recent incentive award
divided by the current stock price. To receive this grant, the optionee must
place on deposit with the Company one share of owned stock for every two option
shares granted and leave the shares on deposit with the Company for five years.
A total of 252 employees participated in this program in fiscal 1998.
The Salary Replacement Stock Option Plan, which was approved by
shareholders in 1995 with a 91.3% favorable vote, provides executives and
certain selected employees with the choice of exchanging their merit-related
base salary increases for a supplemental stock option grant. The size of the
option grant is determined by calculating the estimated present value of the
foregone salary increase (including pay-related compensation and benefits such
as annual incentive, savings plan match and pension accrual), and dividing it by
the estimated present value of a stock option, assuming an 8% annual growth rate
in the common stock. A total of 897 employees participated in this program in
fiscal 1998; the table on page 21 includes stock options granted under this
program to the five named officers.
PERFORMANCE UNITS
The Company discontinued grants of performance units in 1993. Performance units
were granted in conjunction with stock options and were valued based upon
three-year earnings per share and return on equity performance. Vested
performance units are payable in cash and an optionee may withdraw them as an
alternative to the exercise of regular stock options. The exercise of a stock
option or withdrawal of a corresponding performance unit cancels the other on a
one-for-one basis. As of July 31, 1998, only the 1992 performance units had a
value in excess of the value of their corresponding stock option.
CEO COMPENSATION AND PERFORMANCE
The compensation of the Chief Executive Officer for fiscal 1998 consisted of
base salary, annual incentive and stock options. The Committee determined the
level for each of these elements using methods consistent with those used for
other senior executives. When determining the CEO's merit increase to base
salary, individual incentive rating and annual stock option grant, the Committee
meets without him to evaluate his performance and reports on that evaluation to
the independent directors of the board.
The Committee determined that, based on the Company's earnings per share
increase of 10% and return on capital of 23.5%, the two factors that go into the
rating analysis, the corporate performance rating for fiscal 1998 should be a
1.65. In determining Mr. Sanger's annual incentive amount, the Committee
considered the Company's financial, strategic and operating performance for the
year, as well as Mr. Sanger's personal performance against pre-established
objectives in numerous areas including Company financial performance, growth,
innovation, productivity improvement, new ventures, corporate culture,
diversity, and customer and shareholder relations.
CHANGES TO EXECUTIVE COMPENSATION BEGINNING IN FISCAL 1999
The Compensation Committee has approved a series of revisions to the Company's
executive compensation program for fiscal year 1999 and beyond. The revisions
further strengthen the link between levels of executive compensation and the
Company's most important short-term financial and long-term strategic goals.
The Executive Incentive Plan has been revised to place greater emphasis on
meeting pre-established earnings growth goals, while also achieving key
strategic growth and earnings quality objectives. The number of business unit
ratings will be substantially reduced to include only key operating units;
executives within other units and departments will have their incentives based
entirely on individual and corporate performance. Lastly, the size of stock
option and salary replacement stock option grants will be significantly
influenced by the corporate performance rating from the prior fiscal year.
<PAGE>
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Internal Revenue Code requires that the Company meet specific criteria,
including shareholder approval of certain stock and incentive plans, in order to
deduct for federal income tax purposes compensation over $1 million paid to the
proxy-named officers. The Company expects to meet the requirements of the Code
and receive a deduction for all compensation paid to those executive officers.
CONCLUSION
The Committee is satisfied that the compensation and long-term incentive plans
provided to the officers of the Company are structured and operated to create
strong alignment with the long-term best interests of the Company and its
stockholders.
COMPENSATION COMMITTEE
Richard M. Bressler, Chair
Livio D. DeSimone
Kenneth A. Macke
Michael D. Rose
<PAGE>
TOTAL RETURN TO STOCKHOLDERS
These are line graphs comparing the annual percentage in cumulative total
shareholder return for General Mills common stock, the Standard & Poor's 500
Stock Index and the Standard & Poor's Food Index for both the last 5 years and
the last 10 years.
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
TOTAL RETURN INDEX MAY 93 MAY 94 MAY 95 MAY 96 MAY 97 MAY 98
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
General Mills 100 86 99 120 137 150
- -------------------------------------------------------------------------------
S&P Food 100 99 122 150 195 263
- -------------------------------------------------------------------------------
S&P 500 100 104 123 163 208 272
- -------------------------------------------------------------------------------
</TABLE>
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
TOTAL RETURN INDEX 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
General Mills 100 153 182 278 312 328 283 325 393 448 491
- ------------------------------------------------------------------------------------------------------------------
S&P Food 100 150 174 223 235 247 244 300 369 481 649
- ------------------------------------------------------------------------------------------------------------------
S&P 500 100 131 150 165 188 209 219 258 342 435 569
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------
ANNUAL COMPENSATION AWARDS
- --------------------------------------------------------------------------------- ---------------------------
OTHER RESTRICTED
ANNUAL STOCK ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARD(S) COMPENSATION
POSITION YEAR ($) ($) ($) ($)(a) OPTIONS (#) ($)(b)
- -------------------------- ------ ------------ ----------- -------------- ------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
S. W. SANGER 1998 655,500(c) 960,400 -- 240,082 208,004 48,989
Chairman of the Board and 1997 624,750(c) 437,300 -- 109,270 269,586 22,398
Chief Executive Officer 1996 600,000 810,000 -- 202,551 224,800 33,699
C. W. GAILLARD 1998 525,000 707,710 -- -- 115,150 43,428
President 1997 525,000 405,700 -- -- 170,466 33,304
1996 475,000 707,940 -- -- 129,196 28,712
R. G. VIAULT 1998 500,000 586,100 -- 146,503 97,548 35,913
Vice Chairman 1997 500,000 540,000(d) -- 134,995 106,720 18,459
1996 189,423 437,300 -- 1,304,553(e) 100,000 8,333
S. R. DEMERITT 1998 373,931 345,600 -- 86,413 60,996 149,303
Executive Vice President 1997 339,091 268,200 -- 67,061 72,498 176,856
1996 290,344 236,100 14,663(f) 58,987 44,806 163,166
S. S. MARSHALL 1998 271,125 255,000 -- 63,811 32,336 17,939
Senior Vice president and 1997 256,000 145,900 -- 35,465 55,164 12,820
General Counsel 1996 250,000 353,100(g) -- 63,233 39,542 7,343
</TABLE>
- ---------------------
(a) The amounts in this column reflect the value of the restricted stock or
RSUs awarded annually under the EIP, except as described in note (e).
Recipients must deposit with the Company one personally-owned share of
Common Stock for each share of restricted stock awarded. The restricted
shares vest 50% at three years and 50% at six years, provided the
participant's shares remain on deposit until the end of the restricted
period. Regular dividends are paid on the restricted shares. Restricted
stock under the EIP vests in the event of a change in control. At the end
of fiscal 1998, the number and value of the aggregate restricted
stockholdings for the named officers were:
S. W. Sanger 7,031 shares $483,601
C. W. Gaillard 2,816 $193,688
R. G. Viault 3,196 $219,825
S. D. Demeritt 3,860 $265,496
S. S. Marshall 9,080 $624,534
(b) The amounts for all officers, other than Mr. Demeritt, are the Company's
contributions or allocations relating to defined contribution (savings)
plans (tax-qualified and supplemental) on behalf of the named officers. The
amounts for Mr. Demeritt include $119,771 in 1998, $160,844 in 1997, and
$139,234 in 1996 relating to his foreign assignment in Cereal Partners
Worldwide.
(c) Because his base salary is below the minimum salary range for his position,
Mr. Sanger was required under the 1995 Salary Replacement Stock Option Plan
to receive a portion of his 1997 and 1998 merit salary increases in cash as
well as stock options.
(d) Mr. Viault became an employee of the Company effective January 15, 1996.
The fiscal 1997 amount includes a deferred hiring bonus of $192,000; the
fiscal 1996 amount includes a hiring bonus of $200,000.
(e) This amount includes the value of Company restricted stock granted to Mr.
Viault to compensate him for restricted stock, non-vested stock option
gains, and other compensation forfeited as a result of leaving his prior
employer.
(f) This amount represents the "above-market" portion of the earnings on
deferred compensation credited and paid to Mr. Demeritt each year based on
the three-year performance of the Canada Foods division. Under the
Company's Deferred Compensation Plan, election of such a crediting rate was
available only to eligible key managers with respect to the business
operation for which they are responsible. This program is no longer
offered.
(g) This amount includes a deferred hiring bonus for Ms. Marshall of $100,000.
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS (a) FOR OPTION TERM ($) (b)
- ----------------------------------------------------------------------------- ------------------------------------------
% OF TOTAL
OPTIONS
OPTIONS GRANTED TO EXERCISE
GRANTED EMPLOYEES IN PRICE EXPIRATION 0%
NAME (#) FISCAL YEAR ($/SHARE) DATE ($)(c) 5% ($) 10% ($)
- ----------------- ------------ -------------- ---------- ------------ ---- --------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Sanger 175,000(d) 5.49% 75.81 1/8/08 0 8,428,180 21,407,865
26,000(e) 0.80% 69.56 9/1/07 0 1,148,915 2,918,283
7,004(f) 0.22% 64.50 7/23/07 0 286,986 728,954
Gaillard 70,000(d) 2.20% 75.81 1/8/08 0 3,371,272 8,563,146
39,500(e) 1.22% 69.56 9/1/07 0 1,745,467 4,433,545
5,650(f) 0.17% 64.50 7/23/07 0 231,506 588,034
Viault 60,000(d) 1.88% 75.81 1/8/08 0 2,889,662 7,339,840
28,900(e) 0.89% 69.56 9/1/07 0 1,277,063 3,243,784
8,650(f) 0.27% 64.50 7/23/07 0 354,348 900,057
Demeritt 40,000(d) 1.26% 75.81 1/8/08 0 1,926,441 4,893,226
16,700(e) 0.52% 69.56 9/1/07 0 737,957 1,874,436
4,296(f) 0.13% 64.50 7/23/07 0 176,027 447,114
Marshall 30,000(d) 0.94% 75.81 1/8/08 0 1,444,831 3,669,920
2,336(f) 0.07% 64.50 7/23/07 0 95,717 243,124
All Stockholders NA NA NA NA 0 7,186,046,521(g) 18,245,804,990(g)
All Optionees 3,185,783 100% 73.10(h) (h) 0 147,940,976 375,775,159
As a % of All
Stockholders Gain NA NA NA NA NA 2.1% 2.1%
</TABLE>
- ---------------------
(a) All options are granted at the fair market value of the Common Stock on the
grant date and generally expire 10 years and one month from the grant date.
All options vest in the event of a change of control. Options include the
right to pay the exercise price in cash or previously-acquired Common Stock
and the right to have shares withheld by the Company to pay withholding tax
obligations due in conjunction with the exercise.
(b) These assumed values result from certain prescribed rates of stock price
appreciation. The actual value of these option grants is dependent on
future performance of the Common Stock and overall stock market conditions.
There is no assurance that the values reflected in this table will be
achieved. The Company did not use an alternative formula for a grant date
valuation, as it is not aware of any formula which will determine with
reasonable accuracy a present value based on future unknown or volatile
factors.
(c) No gain to the optionees is possible without stock price appreciation,
which will benefit all stockholders commensurately. Without stock price
appreciation, there will be no benefit to the optionee.
(d) This stock option grant under the 1993 Plan becomes exercisable on December
8, 2002.
(e) This option, granted under the 1995 Salary Replacement Stock Option Plan,
benefits the Company by reducing the cash compensation paid to executives,
with corresponding reductions in cash bonuses, lower pension accruals and
similar effects on other benefits which are tied to base salary. It further
increases the percentage of key employee compensation and benefits tied to
stock ownership, in keeping with the Company's philosophy to more closely
align stockholder and employee interests. This option becomes exercisable
over a four-year period beginning on the grant date.
(f) To encourage retention of Common Stock, this deposit stock option grant
under the 1993 Plan (which becomes exercisable five years from the grant
date) requires the deposit of one share of owned Common Stock for every two
option shares granted. The number of option shares granted is equal to the
value of the executive's prior year cash incentive payment.
<PAGE>
(g) "All Stockholders" value is calculated from $73.10, the weighted average
exercise price for all options awarded in fiscal 1998, based on the
outstanding shares of Common Stock on May 31, 1998.
(h) Exercise price shown is a weighted average of all options awarded in fiscal
1998. Options expire on various dates through the year 2008.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES ACQUIRED VALUE OPTIONS AT 5/31/98 (#) OPTIONS AT 5/31/98 ($)(a)
ON EXERCISE REALIZED ----------------------------- ----------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------- ------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Sanger 51,168 3,847,779 392,670 965,473 8,847,127 12,680,452
Gaillard 10,345 1,443,821 400,759 503,880 8,826,673 6,600,900
Viault 0 0 16,700 287,568 94,472 2,405,915
Demeritt 15,493 1,215,118 215,529 186,730 5,258,516 1,870,074
Marshall 0 0 9,320 145,262 136,465 1,668,986
</TABLE>
- ---------------------
(a) Value of unexercised options equals fair market value of the shares
underlying in-the-money options at May 31, 1998 ($68.7813), less the
exercise price, times the number of in-the-money options outstanding.
DEFINED BENEFIT RETIREMENT PLAN
<TABLE>
<CAPTION>
FINAL AVERAGE EARNINGS 10 YEARS OF 15 YEARS OF 20 YEARS OF 25 YEARS OF 30 OR MORE YEARS OF
(AS DEFINED) SERVICE SERVICE SERVICE SERVICE SERVICE*
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 300,000 $ 50,000 $ 75,000 $100,000 $125,000 $ 150,000
500,000 83,333 125,000 166,666 208,333 250,000
600,000 100,000 150,000 200,000 250,000 300,000
700,000 116,666 175,000 233,333 291,666 350,000
800,000 133,333 200,000 266,666 333,333 400,000
900,000 150,000 225,000 300,000 375,000 450,000
1,000,000 166,666 250,000 333,333 416,666 500,000
1,100,000 183,333 275,000 366,666 458,333 550,000
1,200,000 200,000 300,000 400,000 500,000 600,000
1,300,000 216,666 325,000 433,333 541,666 650,000
1,400,000 233,333 350,000 466,666 583,333 700,000
1,500,000 250,000 375,000 500,000 625,000 750,000
1,600,000 266,666 400,000 533,333 666,666 800,000
1,700,000 283,333 425,000 566,666 708,333 850,000
1,800,000 300,000 450,000 600,000 750,000 900,000
1,900,000 316,666 475,000 633,333 791,666 950,000
2,000,000 333,333 500,000 666,666 833,333 1,000,000
</TABLE>
- ---------------------
* No additional benefits accrue after 30 years of service.
The table above sets forth the pension benefits payable under the Company's
Retirement Income Plan (the "RIP") to the persons named in the Summary
Compensation Table, showing the estimated annual aggregate benefits payable at
normal retirement (age 65) for various classifications of earnings and years of
benefit service. This table is based on the maximum benefit under the RIP of 50%
of Final Average Earnings for a participant with 30 years of benefit service,
less 50% of the employee's projected Social Security benefit. Final Average
Earnings is the average of the employee's five highest consecutive years'
remuneration. Such remuneration generally equals the salary and bonus reported
in the Summary Compensation Table plus the value of vested common stock granted
under the EIP. The effects of integration with Social Security benefits have
been excluded from the table, because the amount of the reduction in benefits
due to integration varies depending on the participant's age at the time of
retirement and changes in the Social Security laws. The table does not reflect
any limitations on benefits
<PAGE>
imposed by federal law. The Company's Supplemental Retirement Plan provides for
the payment of additional amounts to certain executive officers (including the
officers named in the Summary Compensation Table) so that they will receive, in
the aggregate, the benefits they would have been entitled to receive had federal
law not imposed maximum limitations.
The officers listed in the Summary Compensation Table are credited,
respectively, with the following full years of benefit service under the RIP: S.
W. Sanger, 24 years; S. R. Demeritt, 28 years; C. W. Gaillard, 32 years; S. S.
Marshall, 3 years; and R. G. Viault, 2 years.
In addition, the Company has agreed to provide supplemental retirement
benefits to R. G. Viault to compensate for the difference, if any, between the
pension benefit he would have received from his previous employer's retirement
plan and the benefit he receives from the combination of his previous employer's
plan and the Company's plans.
CHANGE OF CONTROL ARRANGEMENTS
The Company has agreements with some of its executive officers providing for
guaranteed severance payments equal to three times the annual compensation of
the officer (salary plus cash incentive award) and continuation of health and
similar benefits for a three-year period if the officer is terminated within two
years after a change of control. These agreements also provide for a cash
payment of the amount necessary to insure that the foregoing payments are not
subject to reduction due to the imposition of excise taxes payable under Code
Section 4999 or any similar tax.
The Company has two nominally-funded trusts to provide for payments under
its non-qualified deferred compensation plans, including the directors'
compensation plan, the EIP, the management continuity agreements and the
Supplemental Savings and Retirement Plans. Full funding is required in the event
of a change of control.
STOCKHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING
If you wish to submit proposals to be included in our 1999 proxy statement,
they must be received by us on or before April 16, 1999. Please address your
proposals to: Secretary, General Mills, Inc., P.O. Box 1113, Minneapolis,
Minnesota 55440.
Under our By-laws, if you wish to nominate a director or bring other
business before the stockholders:
* You must notify the Secretary in writing between June 30, 1999 and
July 30, 1999.
* Your notice must contain the specific information required in our
By-laws.
Please note that these requirements relate only to matters you wish to
bring before the stockholders at an annual meeting. They do not apply to
proposals that you wish to have included in our proxy statement.
If you would like a copy of our By-laws, we will send you one without
charge. Please write to the Secretary of General Mills.
YOUR VOTE IS IMPORTANT!
Please vote by phone or via the Internet or sign and promptly return your
proxy card in the enclosed envelope.
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
APPENDIX A
GENERAL MILLS, INC.
1998 SENIOR MANAGEMENT STOCK PLAN
1. PURPOSE OF THE PLAN
The purpose of the General Mills, Inc. 1998 Senior Management Stock Plan
(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. has a significant equity or other
interest) (collectively, the "Company") who are responsible for the growth
and sound development of the business of the Company, and to align the
interests of employees with those of the stockholders of the Company.
2. EFFECTIVE DATE AND DURATION OF PLAN
This Plan shall become effective as of September 28, 1998, subject to the
approval of the stockholders of the Company at the Annual Meeting on
September 28, 1998. Awards may be made under the Plan until October 1,
2003.
3. ELIGIBLE PERSONS
Only persons who are employees of the Company shall be eligible to receive
grants of Stock Options (defined below) under the Plan. The Compensation
Committee of the Company's Board of Directors (the "Committee") shall
administer the Plan, in accordance with Section 12, and shall exercise the
power to determine and designate, from time to time, from among the
employees, those who will be granted Stock Options under the Plan and
become "Participants" in the Plan.
4. AWARD TYPE
Under this Plan, the Committee may award Participants options ("Stock
Options") to purchase common stock of the Company ($.10 par value)("Common
Stock"). The grant of a Stock Option entitles the Participant to purchase
shares of Common Stock at an "Exercise Price" established by the
Committee. The Exercise 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 Common Stock on the date of grant. "Fair Market Value" shall equal
the mean of the high and low price of the Common Stock on the New York
Stock Exchange on the date of grant.
5. STOCK OPTION TERM AND TYPE
Stock Options granted under the Plan may be either Non-Qualified Stock
Options governed by Section 83 of the Internal Revenue Code of 1986, as
amended (the "Code") or Incentive Stock Options described in Section
422(b) of the Code. The term of any Stock Option granted under the Plan
shall be determined by the Committee, provided that the term of a
Non-Qualified Stock Option shall not exceed 10 years and one month and the
term of an Incentive Stock Option shall not exceed 10 years. The maximum
number of shares that may be issued by Incentive Stock Options granted
under the Plan is 7,500,000.
6. COMMON STOCK SUBJECT TO THE PLAN
a) MAXIMUM SHARES AVAILABLE FOR DELIVERY. Subject to Section 6(c), the
maximum number of shares of Common Stock available for issuance to
Participants under the Plan shall be equal to the sum of:
(i) 6,300,000;
(ii) 1,200,000, being the number of shares of Common Stock still
available for grants under the Company's 1993 Stock Option and
Long-Term Incentive Plan as of the effective date of this
Plan; and
(iii) any shares of Common Stock subject to Stock Options granted
under any prior stockholder -- approved plan of the Company
adopted prior to the effective date of this Plan which are
forfeited, expire or are cancelled without the delivery of
Common Stock.
<PAGE>
In addition, any Common Stock covered by a Stock Option granted
under the Plan, which is forfeited, cancelled or expires in whole or
in part shall be deemed not to be delivered for purposes of
determining the maximum number of shares of Common Stock available
for grants under the Plan.
Further, if any Stock Option is exercised by tendering Common Stock,
either actually or by attestation, to the Company as full or partial
payment in connection with the exercise of the Stock Option under
the Plan, only the number of shares of Common Stock issued net of
the Common Stock tendered shall be deemed delivered for purposes of
determining the maximum number of shares available for grants under
the Plan.
b) OTHER SHARE LIMITS. The number of shares of Common Stock subject to
Stock Options granted under the Plan to any one Participant shall
not exceed 2,500,000.
c) ADJUSTMENTS FOR CORPORATE TRANSACTIONS. The Committee may determine
that a corporate transaction has occurred affecting the Common Stock
such that an adjustment or adjustments to outstanding Stock Options
is required to preserve (or prevent enlargement of) the benefits or
potential benefits intended at the time of grant. For this purpose a
corporate transaction includes, but is not limited to, 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. In the event of such a corporate
transaction, the Committee may, in such manner as the Committee
deems equitable, adjust (i) the number and kind of shares which may
be awarded under the Plan; (ii) the number and kind of shares
subject to outstanding Stock Options; and (iii) the exercise price
of outstanding Stock Options.
d) LIMITS ON DISTRIBUTION. Distribution of shares of Common Stock or
other amounts under the Plan shall be subject to the following:
(i) Notwithstanding any other provision of the Plan, the Company
shall have no liability to deliver any shares of Common Stock
under the Plan or make any other distribution of benefits
under the Plan unless such delivery or distribution would
comply with all applicable laws (including, without
limitation, the requirements of the Securities Act of 1933),
and the applicable requirements of any securities exchange or
similar entity.
(ii) To the extent that the Plan provides for issuance of stock
certificates to reflect the issuance of shares of Common
Stock, the issuance may be effected on a non-certificated
basis, to the extent not prohibited by applicable law or the
applicable rules of any stock exchange.
e) The Committee, in its discretion, may require as a condition to the
grant of Stock Options, the deposit of Common Stock owned by the
Participant receiving such grant, and the forfeiture of such grants,
if such deposit is not made or maintained during the required
holding 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.
7. EXERCISE OF STOCK OPTIONS
a) EXERCISE. Except as provided in Sections 10 and 11 (Change of
Control and Termination of Employment), each Stock Option may be
exercised only in accordance with the terms and conditions of the
Stock Option grant and during the periods as may be established by
the Committee, and only after three years of the Participant's
continued employment with the Company following the date of the
Stock Option grant.
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.
<PAGE>
b) PAYMENT. The Exercise Price shall be paid to the Company at the time
of such exercise, 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 tender of shares of Common Stock owned by the
Participant (by either actual delivery or attestation); 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.
c) DEFERRALS. The Committee may permit or require Participants to defer
receipt of any Common Stock issuable upon exercise of a Stock
Option, subject to such rules and procedures as it may establish,
which may include provisions for the payment or crediting of
interest, or dividend equivalents, including converting such credits
into deferred Common Stock equivalents.
8. TRANSFERABILITY OF STOCK OPTIONS
Except as otherwise provided by rules of the Committee, no Stock Options
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.
9. TAXES
Whenever the Company issues Common Stock under the Plan, the Company may
require the recipient to remit to the Company an amount sufficient to
satisfy any Federal, state or local tax withholding requirements prior to
the delivery of such Common Stock, or, in the discretion of the Committee,
upon the election of the Participant, the Company may withhold from the
shares to be delivered shares sufficient to satisfy all or a portion of
such tax withholding requirements.
10. CHANGE OF CONTROL
Each outstanding Stock 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
<PAGE>
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 Stock Option exercise provisions
of the Plan shall govern. Notwithstanding any other provision of the Plan,
but subject to Section 5, in the event a Participant's employment with the
Company is terminated within two (2) years of any of the events specified
in (a), (b), (c) or (d), all outstanding Stock Options of such Participant
at that date of termination shall be exercisable for a period of six (6)
months beginning on the date of termination.
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, the 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.
11. TERMINATION OF EMPLOYMENT
a) TERMINATION OF EMPLOYMENT. If the Participant's employment by the
Company terminates for any reason other than as specified herein, in
Section 10, or in subsections (b), (c) or (d), the Participant's
Stock Options shall terminate 3 months after such termination. 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), 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 refrain from imposing the 3 month termination
period and permit such Participant's outstanding Stock Options, to
be exercised until the expiration of the Stock Options in accordance
with their original terms.
<PAGE>
b) DEATH. If a Participant dies 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. With respect to
outstanding Stock Options which, as of the date of death, are not
yet exercisable, any such Stock Option 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 Options which require the deposit of owned
Common Stock as a condition to obtaining exercise rights, in the
event a Participant dies while employed by the Company, such Stock
Options may be exercised as provided in the first paragraph of this
Section 11(b) and any owned Common Stock deposited by the
Participant pursuant to such 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.
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.
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 Stock Options under the Plan.
12. ADMINISTRATION OF THE PLAN
a) ADMINISTRATION. The authority to control and manage the operations
and administration of the Plan shall be vested in Committee in
accordance with this Section 12.
b) SELECTION OF COMMITTEE. The Committee shall be selected by the
Board, and shall consist of two or more members of the Board.
c) POWERS OF COMMITTEE. The authority to manage and control the
operations and administration of the Plan shall be vested in the
Committee, subject to the following:
(i) Subject to the provisions of the Plan, the Committee will have
the authority and discretion to select from among the eligible
Company employees those persons who shall receive Stock
Options, to determine the time or times of receipt, to
determine the types of grants (including status as
Non-Qualified or Incentive Stock Options) and the number of
shares covered by the grants, to establish the terms,
conditions, performance criteria, restrictions, and other
provisions of such grants, and (subject to the restrictions
imposed by Section 13) to cancel or suspend grants. In making
such determinations, the Committee may take into account the
nature of services rendered by the individual, the
individual's present and potential contribution to the
Company's success and such other factors as the Committee
deems relevant.
(ii) The Committee will have the authority and discretion to
establish terms and conditions of awards as the Committee
determines to be necessary or appropriate to conform to
applicable requirements or practices of jurisdictions outside
of the United States.
(iii) The Committee will have the authority and discretion to
interpret the Plan, to establish, amend, and rescind any rules
and regulations relating to the Plan, to determine the terms
and provisions of any agreements made pursuant to the Plan,
and to make all other determinations that may be necessary or
advisable for the administration of the Plan.
(iv) Any interpretation of the Plan by the Committee and any
decision made by it under the Plan is final and binding.
<PAGE>
d) Delegation by Committee. Except to the extent prohibited by
applicable law or the applicable rules of a stock exchange, the
Committee may allocate all or any portion of its responsibilities
and powers to any one or more of its members and may delegate all or
any part of its responsibilities and powers to any person or persons
selected by it. Any such allocation or delegation may be revoked by
the Committee at any time.
13. AMENDMENTS OF THE PLAN
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, where required, the Committee may at any time terminate, amend,
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) permit granting of Stock Options at less than Fair Market Value;
(iii) except as provided in Section 6, permit the repricing of outstanding
Stock Options; and
(iv) amend the maximum shares set forth in Section 6(b) which may be
granted as Stock Options to any single Participant.
No termination, modification, suspension, or amendment of the Plan shall
alter or impair the rights of any Participant pursuant to an outstanding
Stock Option without the consent of the Participant. There is no
obligation for uniformity of treatment of Participants under the Plan.
14. 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 Stock Options under the Plan.
15. 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 28, 1998
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
NOTICE OF 1998 ANNUAL MEETING
AND
PROXY STATEMENT
GENERAL MILLS, INC.
<PAGE>
[LOGO] GENERAL MILLS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS PROXY
1998
I appoint S.W. Sanger, C.W. Gaillard and R.G. Viault, together and separately,
as proxies to vote all shares of common stock which I have power to vote at the
annual meeting of stockholders to be held on September 28, 1998 at Minneapolis,
Minnesota, and at any adjournment thereof, in accordance with the instructions
on the reverse side of this card and with the same effect as though I were
present in person and voting such shares. The proxies are authorized in their
discretion to vote upon such other business as may properly come before the
meeting and they may name others to take their place.
(CONTINUED, AND TO BE SIGNED AND DATED ON REVERSE SIDE)
[LOGO]
<PAGE>
---------------------------
| COMPANY # |
| CONTROL # |
---------------------------
THERE ARE THREE WAYS TO VOTE YOUR PROXY
VOTE BY PHONE
1-800-240-6326
Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a week.
Have your proxy card in hand when you call. You will be prompted to enter your
3-digit company number and a 7-digit control number, which are located above,
and then follow the simple instructions.
VOTE VIA INTERNET
HTTP://NORWEST.EPROXY.COM/QIS/
Use the Internet to vote your proxy 24 hours a day, 7 days a week. Have your
proxy card in hand when you access the web site. You will be prompted to enter
your 3-digit company number and a 7-digit control number, which are located
above, to create an electronic ballot.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we have provided.
THE DIRECTORS RECOMMEND A VOTE "FOR" ITEMS 1 THROUGH 3
1. ELECTION OF 01 R.M. Bressler 02 L.D. DeSimone 03 W.T. Esrey
DIRECTORS: 04 C.W. Gaillard 05 R.V. Gilmartin 06 J.R. Hope
07 K.A. Macke 08 M.D. Rose 09 S.W. Sanger
10 A.M. Spence 11 D.A. Terrell 12 R.G. Viault
13 C.A. Wurtele
[ ] FOR all listed nominees [ ] WITHHOLD AUTHORITY to vote for
all listed nominees
(Instructions: To withhold authority to vote for any individual nominee, write
the number(s) in the box provided to the right.) [ ]
2. APPROVAL OF APPOINTMENT OF KPMG PEAT MARWICK LLP AS INDEPENDENT AUDITORS
[ ] For [ ] Against [ ] Abstain
3. ADOPTION OF THE GENERAL MILLS, INC. 1998 SENIOR MANAGEMENT STOCK PLAN
[ ] For [ ] Against [ ] Abstain
THE DIRECTORS RECOMMEND A VOTE "AGAINST" ITEMS 4 AND 5
4. STOCKHOLDER PROPOSAL ON CUMULATIVE VOTING
[ ] For [ ] Against [ ] Abstain
5. STOCKHOLDER PROPOSAL ON CHARITABLE CONTRIBUTIONS
[ ] For [ ] Against [ ] Abstain
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS MADE, IT WILL BE VOTED
"FOR" ITEMS 1 THROUGH 3 AND "AGAINST" ITEMS 4 AND 5.
Dated_________________________________________
----------------------------------------------
| |
| |
| |
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Signature(s) of Stockholder(s) in Box
PLEASE SIGN exactly as name appears at left.
Joint owners should each sign. Executors,
administrators, trustees, etc. should so
indicate when signing. If signer is a
corporation, please sign full name by duly
authorized officer.
Address Change? Mark Box [ ] Indicate change at left.
Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned the proxy card. The
deadline for telephone or Internet voting is noon EDT, one business day prior to
the annual meeting.
<PAGE>
[LOGO] GENERAL MILLS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS PROXY
1998
I appoint S.W. Sanger, C.W. Gaillard and R.G. Viault, together and separately,
as proxies to vote all shares of common stock which I have power to vote at the
annual meeting of stockholders to be held on September 28, 1998 at Minneapolis,
Minnesota, and at any adjournment thereof, in accordance with the instructions
on the reverse side of this card and with the same effect as though I were
present in person and voting such shares. The proxies are authorized in their
discretion to vote upon such other business as may properly come before the
meeting and they may name others to take their place.
(CONTINUED, AND TO BE SIGNED AND DATED ON REVERSE SIDE)
<PAGE>
THE DIRECTORS RECOMMEND A VOTE "FOR" ITEMS 1 THROUGH 3
1. ELECTION OF 01 R.M. Bressler 02 L.D. DeSimone 03 W.T. Esrey
DIRECTORS: 04 C.W. Gaillard 05 R.V. Gilmartin 06 J.R. Hope
07 K.A. Macke 08 M.D. Rose 09 S.W. Sanger
10 A.M. Spence 11 D.A. Terrell 12 R.G. Viault
13 C.A. Wurtele
[ ] FOR all listed nominees [ ] WITHHOLD AUTHORITY to vote for
all listed nominees
(Instructions: To withhold authority to vote for any individual nominee, write
the number(s) in the box provided to the right.) [ ]
2. APPROVAL OF APPOINTMENT OF KPMG PEAT MARWICK LLP AS INDEPENDENT AUDITORS
[ ] For [ ] Against [ ] Abstain
3. ADOPTION OF THE GENERAL MILLS, INC. 1998 SENIOR MANAGEMENT STOCK PLAN
[ ] For [ ] Against [ ] Abstain
THE DIRECTORS RECOMMEND A VOTE "AGAINST" ITEMS 4 AND 5
4. STOCKHOLDER PROPOSAL ON CUMULATIVE VOTING
[ ] For [ ] Against [ ] Abstain
5. STOCKHOLDER PROPOSAL ON CHARITABLE CONTRIBUTIONS
[ ] For [ ] Against [ ] Abstain
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS MADE, IT WILL BE VOTED
"FOR" ITEMS 1 THROUGH 3 AND "AGAINST" ITEMS 4 AND 5.
Dated_________________________________________
----------------------------------------------
| |
| |
| |
----------------------------------------------
Signature(s) of Stockholder(s) in Box
PLEASE SIGN exactly as name appears at left.
Joint owners should each sign. Executors,
administrators, trustees, etc. should so
indicate when signing. If signer is a
corporation, please sign full name by duly
authorized officer.
<PAGE>
PHONE VOTING SCRIPT
- --------------------------- ----------------------------------------------------
Speech 1 Welcome. Please enter the three digit Company
Number located in the box on the upper right hand
corner of the proxy card.
- --------------------------- ----------------------------------------------------
System If invalid number is entered, go to Speech 2; if
nothing entered after 3 seconds, go to Speech 4;
otherwise go to Speech 6.
- --------------------------- ----------------------------------------------------
Speech 2 I'm sorry, that was an incorrect company number.
Please re-enter the three-digit company number now.
- --------------------------- ----------------------------------------------------
System If invalid number is entered, go to Speech 3; if
nothing entered after 3 seconds, go to Speech 4;
otherwise go to Speech 6.
- --------------------------- ----------------------------------------------------
Speech 3 I'm sorry, the company numbers you entered were
invalid. Please call again later or sign your proxy
card and return it in the postage paid envelope.
- --------------------------- ----------------------------------------------------
System Disconnect
- --------------------------- ----------------------------------------------------
Speech 4 Please enter the three digit company number now.
- --------------------------- ----------------------------------------------------
System If invalid number is entered, go to Speech 2; if
nothing entered after 3 seconds, go to Speech 5;
otherwise go to Speech 6.
- --------------------------- ----------------------------------------------------
Speech 5 I'm sorry you are experiencing problems. Please
call again later or sign your proxy card and return
it in the postage paid envelope.
- --------------------------- ----------------------------------------------------
System Disconnect
- --------------------------- ----------------------------------------------------
Speech 6 Please enter your seven digit NUMERICAL Control
Number that is located in the box, directly under
your Company Number.
- --------------------------- ----------------------------------------------------
System If invalid number is entered, go to Speech 7; if
nothing entered after 3 seconds, go to Speech 9;
otherwise go to Speech 10.
- --------------------------- ----------------------------------------------------
Speech 7 I'm sorry, that was an incorrect Control Number.
Please re-enter the seven-digit NUMERICAL Control
Number now.
- --------------------------- ----------------------------------------------------
System If invalid number is entered, go to Speech 8; if
nothing entered after 3 seconds, go to Speech 9;
otherwise go to Speech 10.
- --------------------------- ----------------------------------------------------
Speech 8 I'm sorry, the Control Numbers you entered were
invalid. Please call again later or sign your proxy
card and return it in the postage paid envelope.
- --------------------------- ----------------------------------------------------
System Disconnect
- --------------------------- ----------------------------------------------------
Speech 9 Please enter your seven-digit Control Number now.
- --------------------------- ----------------------------------------------------
System If invalid number is entered, go to Speech 8; if
nothing entered after 3 seconds, go to Speech 5;
otherwise go to Speech 10.
- --------------------------- ----------------------------------------------------
<PAGE>
- --------------------------- ----------------------------------------------------
Speech 10 To vote as the General Mills Board recommends on ALL
proposals - Press 1 now.
- --------------------------- ----------------------------------------------------
System Wait two seconds, If 1 is pressed - system goes to
Closing A; If no entry is made, System goes to
Speech 11.
- --------------------------- ----------------------------------------------------
Speech 11 To vote on each proposal separately, Press 0 now.
- --------------------------- ----------------------------------------------------
System If "1" is entered, go to Closing A; if any other
number is entered, go to Speech 12.
- --------------------------- ----------------------------------------------------
Speech 12 Proposal 1:
To vote for ALL Nominees, Press 1; to Withhold for
all Nominees, Press 9; To withhold for an individual
nominee, Press 0.
Make your selection now.
- --------------------------- ----------------------------------------------------
System System waits 3 seconds.
If selection 1 or 9 is made, go to Speech 13. If 0
is selected, go to Subset 12A.
- --------------------------- ----------------------------------------------------
Speech 12A Enter the two digit number that appears next to the
nominee you DO NOT wish to vote for.
System waits three seconds - If no selection, go to
Speech 13.
Press 1 to withhold from another Nominee or Press 0
if you have completed voting on Directors.
Subset: If 1 - repeat Subset - "Enter the two...."
If 0 - go to Proposal 2, Speech 13.
- --------------------------- ----------------------------------------------------
Speech 13 Proposal 2:
To vote FOR, Press 1; AGAINST, Press 9; Abstain,
Press 0.
System waits 3 seconds - if no selection - go to
Speech 14.
- --------------------------- ----------------------------------------------------
Speech 14 Proposal 3:
To vote FOR, Press 1; AGAINST, Press 9; Abstain,
Press 0.
System waits 3 seconds - if no selection - go to
next Proposal
- --------------------------- ----------------------------------------------------
System And so forth for each proposal - after completion -
Go to Closing B
- --------------------------- ----------------------------------------------------
Closing A You voted as the Board recommended. If this is
correct, Press 1; if incorrect, Press 0.
If 1 is pressed - go to Speech 15. If 0 is pressed
- go to Speech 16.
- --------------------------- ----------------------------------------------------
<PAGE>
- --------------------------- ----------------------------------------------------
Closing B You voted as follows:
Proposal 1 - (For All - Withhold All - Withhold
Nominee number____)
Proposal 2 - (For, Against, Abstain)
and so on.
If this is correct, Press 1 now; if incorrect, Press
0.
If 1 is pressed, go to Speech 15. If 0 is pressed,
go to Speech 16.
- --------------------------- ----------------------------------------------------
Speech 15 Thank you for voting.
- --------------------------- ----------------------------------------------------
Speech 16 Your votes have been canceled. Please try again, or
sign, mark and return your proxy in the envelope
provided. Thank you.
- --------------------------- ----------------------------------------------------
PROXY.PhoneVotingScript
<PAGE>
General Mills
Welcome to General Mills Electronic Voting.
Access to this site is secured. You will need the 7 digit control number and the
3 digit company number from the top of the card you received by mail along with
the Proxy Statement dated August 14, 1998.
Continue to the voting site.
<PAGE>
General Mills
General Mills Electronic Voting
Please enter and submit the 7 digit control number and the 3 digit company
number from the top of the card you received by mail along with the Proxy
Statement dated August 14, 1998.
company number (3 digits):
/---------------------------------/
control number (7 digits):
/---------------------------------/
Submit
invalid
- ------------------------------------------------------------------------
If you encounter difficulties in voting electronically, please complete the card
you received with the Proxy Statement dated August 14, 1998, and mail it in the
envelope provided to you.
<PAGE>
General Mills
The control number or the company number that you entered was not recognized.
Please refer to your card and try again.
Return to the login page.
- ------------------------------------------------------------------------
If you encounter difficulties in voting electronically, please complete the card
you received with the Proxy Statement dated August 14, 1998, and mail it in the
envelope provided to you.
<PAGE>
General Mills
General Mills Electronic Proxy
Your identification number was recognized. Your name, address, and the number of
shares you owned as of the record date on the records of Norwest Bank Minnesota,
General Mills' transfer agent, appear below. If you own shares in street name or
through a broker, they will not appear in this listing.
- ------------------------ ------------------------------------ ----------------
Stockholder Source of Shares Number of Shares
- ------------------------ ------------------------------------ ----------------
Holdings of record 150.0000
General Mills shares reserved for
exchange of Ralcorp Shares 100.0000
Bob Jones
115 7th ST
Springfield MO, 67152 401(K) 50.5300
VIP 1000.0000
Restricted 300.0000
- ------------------------ ------------------------------------ ----------------
The following online proxy card allows you to electronically authorize the
voting of these shares. Your vote will not be authorized until you have clicked
the Submit Proxy button. Voting is explained in the Proxy Statement dated August
14, 1998, which you received by mail.
CONTINUE TO THE PROXY CARD.
- ------------------------------------------------------------------------
If you encounter difficulties in voting electronically, please complete the card
you received with the Proxy Statement dated August 14, 1998, and mail it in the
envelope provided to you.
<PAGE>
General Mills
The following online proxy card allows you to electronically authorize the
voting of your shares. Your vote will not be authorized until you have clicked
the Submit Proxy button. The items to be voted are explained in the Proxy
Statement dated August 14, 1998, which you received by mail.
General Mills, Inc.
This Proxy is Solicited on behalf of the Board of Directors
I appoint S.W. Sanger, C.W. Gaillard and R.G. Viault, together and separately,
as proxies to vote all shares of common stock which I have power to vote at the
annual meeting of stockholders to be held on September 28, 1998 at Minneapolis,
Minnesota, and at any adjounment thereof, in accordance with the following
instructions and with the same effect as though I were present in person and
voting such shares. The proxies are authorized in their discretion to vote upon
such other business as may properly come before the meeting and they may name
others to take their place.
This proxy will be voted as you direct. If you make no indications on this proxy
and click on the "Submit Proxy" button, it will be voted "For" Items 1 through
3, and "Against" Items 4 and 5.
THE DIRECTORS RECOMMEND A VOTE "FOR" ITEMS 1 THROUGH 3
1. Election of directors:
/ / For all nominees (except those marked below).
/ / Withhold Authority to vote for all nominees.
(INSTRUCTION: To withhold authority for any individual nominee, click on the box
next to the nominee's name below.)
/ / R.M. Bressler
/ / L.D. DeSimone
/ / W.T. Esrey
/ / C.W. Gaillard
/ / R.V. Gilmartin
/ / J.R. Hope
/ / K.A. Macke
/ / M.D. Rose
/ / S.W. Sanger
/ / A.M. Spence
/ / D.A. Terrell
/ / R.G. Viault
/ / C.A. Wurtele
<PAGE>
2. Approval of appointment of KPMG Peat Marwick LLP as independent auditors
/ / For
/ / Against
/ / Abstain
3. Adoption of the General Mills, Inc. 1998 Senior Management Stock Plan
/ / For
/ / Against
/ / Abstain
THE DIRECTORS RECOMMEND A VOTE "AGAINST" ITEMS 4 AND 5
4. Stockholder proposal on cumulative voting
/ / For
/ / Against
/ / Abstain
5. Stockholder proposal on charitable contributions
/ / For
/ / Against
/ / Abstain
If you are a joint owner of the shares being voted, by clicking the Submit Proxy
button, you attest that all owners of such shares have consented to the
authorization of this proxy.
If you are holding the shares being voted as an executor, administrator,
trustee, guardian, or attorney-in-fact, or if you are an officer of a corporate
stockholder, by clicking the Submit Proxy button, you attest that you have the
authority to authorize this proxy.
To authorize your vote, click the "Submit Proxy" button.
Submit Proxy
- ------------------------------------------------------------------------
If you encounter difficulties in voting electronically, please complete the card
you received with the Proxy Statement dated August 14, 1998, and mail it in the
envelope provided to you.
<PAGE>
General Mills
General Mills Electronic Proxy
The submission of your electronic proxy is now complete, and is summarized
below.
On item 1 "Election of Directors" your vote was:
For all nominees.
On item 2 "Approval of appointment of KPMG Peat Marwick LLP as independent
auditors" your vote was:
For.
On item 3 "Adoption of the General Mills, Inc. 1998 Senior Management Stock
Plan" your vote was:
For.
On item 4 "Stockholder proposal on cumulative voting" your vote was:
Against.
On item 5 "Stockholder proposal on charitable contributions" your vote was:
Against.
If this is not how you intended to vote, please use the back function of your
browser to return to the card and correct your vote. If this is how you intended
to vote, your vote has been recorded and there is no need to return your paper
proxy card.
Thank you for your attention.
Sincerely,
General Mills, Inc.
<PAGE>
GENERAL MILLS, INC. * EXECUTIVE OFFICES
Number One General Mills Boulevard * Minneapolis, Minnesota
IVY S. BERNHARDSON
Vice President, Corporate Secretary
Associate General Counsel
Telephone: (612) 540-7365
Facsimile: (612) 540-2268
August 14, 1998
Dear Stockholder:
On January 31, 1997, General Mills purchased the branded cereal and snack
food businesses of Ralcorp Holdings, Inc. and you, as a Ralcorp shareholder,
became entitled to receive General Mills common stock in exchange for your old
Ralcorp stock.
Our records show that you have not yet exchanged your Ralcorp shares
(these are the green certificates) for General Mills shares. Until that
exchange is made, we cannot pay General Mills dividends to you. Since the
Ralcorp acquisition, we have paid $3.18 in dividends per General Mills share.
Your dividends are being held for you and will be paid at the time you exchange
your shares.
We encourage you to exchange your Ralcorp shares. If you have questions
about how to do this or have lost your letter of transmittal, please call
Norwest Bank Minnesota at 1-800-380-1372. We look forward to serving your needs
as a General Mills stockholder.
Very truly yours,
/s/ Ivy Bernhardson
Ivy Bernhardson
Mailing Address: P.O. Box 1113, Minneapolis, Minnesota 55440
