EXHIBIT 10.4

AMENDED AND RESTATED

GENERAL MILLS, INC.

EXECUTIVE INCENTIVE PLAN

AS AMENDED THROUGH JUNE 1, 2001

AMENDED AND RESTATED

GENERAL MILLS, INC.

EXECUTIVE INCENTIVE PLAN

1. PURPOSE OF THE PLAN

The purpose of the General Mills, Inc., Executive Incentive Plan (the "Plan") is to provide financial rewards to key executives of General Mills, Inc. ("General Mills"), its subsidiaries and affiliates (defined as entities in which General Mills, Inc., has a significant equity or other interest) (collectively with General Mills, the "Company") in recognition of their contributions to the success of the Company, and to align the interests of such executives with the interests of the stockholders of the Company.

2. EFFECTIVE DATE

This Plan, as amended and restated herein, shall become effective as of September 25, 2000, subject to the approval of the stockholders of General Mills at the Annual Meeting of Stockholders on that date. This Plan is a successor to and replaces the Executive Incentive Plan, amended and approved by stockholders on September 30, 1996. Definitions used in the Plan can be found in Section 16.

3. ELIGIBLE PERSONS

All officers of the Company shall be "Participants" eligible to receive Awards under the Plan.

4. AWARD TYPE

Under this Plan, the Committee may award Participants Cash Bonuses and the right to receive shares of Common Stock subject to certain restrictions ("Restricted Stock" or "Restricted Stock Units"). Cash bonuses, Restricted Stock and Restricted Stock Units are sometimes referred to as "Awards."

5. AWARDS OF CASH BONUSES, RESTRICTED STOCK AND RESTRICTED STOCK UNITS

(a) Performance Goal. In order for any Participant to receive an Award for a Performance Period, the Net Earnings of the Company must be greater than zero.

(b) Grants. At the end of the Performance Period, if the Committee certifies that the requirement of Section 5(a) has been met, each Participant shall be deemed to have earned Awards equal in value to the Maximum Amount, or such lesser amount as the Committee shall determine in its discretion to be appropriate. Such Awards

shall consist of Cash Bonuses, Restricted Stock or Restricted Stock Units, or a combination thereof, as determined by the Committee, subject to the limitation that Restricted Stock and Restricted Stock Units may not constitute more than 50 percent of each Participant's Award. The Committee, in its discretion, may require, as a condition to the grant of Restricted Stock or Restricted Stock Units, the purchase and deposit of Common Stock owned by the Participant receiving such grant and the forfeiture of such grant if such deposit is not made or maintained during a required holding period. Such shares of deposited Common Stock may not be otherwise sold or disposed of during the applicable holding period. For purpose of computing the value of Awards, each Restricted Stock or Restricted Stock Unit shall be deemed to have a value equivalent to the Fair Market Value of one share of Common Stock on the Grant Date.

(c) Delivery of Awards. As soon as practicable following the end of the Performance Period, the Company shall cause Common Stock to be issued on an unrestricted basis in respect of Restricted Stock and all Restricted Stock Units earned by a Participant and shall pay each Participant all Cash Bonuses earned by the Participant, except to the extent the Participant elects to defer receipt of such Restricted Stock, Restricted Stock Units or Cash Bonuses pursuant to the General Mills, Inc., Deferred Compensation Plan.

(d) Maximum Amount. Notwithstanding any other provision of this Plan, in no event shall the total Awards value earned by any Participant for any one Performance Period exceed 0.5 percent of the Company's Net Earnings for that Performance Period (such amount, the "Maximum Amount").

(e) Profit Sharing Resolution. All awards under this Plan shall be subject to General Mills' 1933 Shareholder Resolution on Profit Sharing, as amended.

6. RESTRICTED STOCK AND RESTRICTED STOCK UNITS

(a) Vesting. Subject to the provisions of Sections 10 and 11, the Vesting Date for Restricted Stock and Restricted Stock Units shall be a date set forth in the applicable Grant Agreement but which may not be earlier than 180 days after the applicable Grant Date. The period between the applicable Grant Date and the Vesting Date is referred to as the "Restricted Period."

(b) Common Stock Issuance. As soon as reasonably practicable after the Vesting Date for a Grant, General Mills shall issue to the Participant a number of shares of Common Stock equal to the number of shares of Restricted Stock or Restricted Stock Units that vested on such Vesting Date, except to the extent the Participant has elected to defer receipt of the Common Stock pursuant to the General Mills, Inc., Deferred Compensation Plan.

(c) Dividends and Cash Dividend Equivalents. Subject to the restrictions set forth in Section 5(b), each Participant who receives Restricted Stock shall have all rights as

a Stockholder with respect to such shares, including the right to vote the shares and receive dividends and other distributions. A Participant who is credited with Restricted Stock Units shall have no rights as a stockholder with respect to such Restricted Stock Units until such time as share certificates for Common Stock are issued to the Participant. During the Restricted Period, however, the Company shall pay to the Participant, on a quarterly basis, an amount (the "Cash Dividend Equivalent") equal to the sum of all cash dividends declared by General Mills with record dates during the prior quarter with respect to that number of shares of Common Stock equivalent to the number of Restricted Stock Units credited to the Participant's Restricted Stock Units Account as of the applicable record date.

(d) Grant Agreement. Each Grant shall be confirmed by, and be subject to, the terms of an applicable Grant Agreement.

7. COMMON STOCK

(a) 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 shares of Restricted Stock or Restricted Stock Units 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 noncash dividend or other noncash distribution (whether in the form of 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 any other similar corporate transaction. In the event of such a corporate transaction, the Committee may, in such manner as it deems equitable, adjust the number and kinds of shares represented by outstanding Restricted Stock and Restricted Stock Units.

(b) Limits on Distribution. Notwithstanding any other provision of the Plan, the Company shall have no obligation to deliver any shares of Common Stock under the Plan unless all of the following conditions have been fulfilled:

(i) Listing or approval for listing upon notice of issuance, of such shares on the New York Stock Exchange; or such other securities exchange as may at the time be the principal market for the Common Stock, if applicable;

(ii) Any registration or other qualification of such shares of General Mills under any state or federal law or regulation, or the maintaining in effect of any such registration or other qualification that the Committee shall, in its absolute discretion upon the advice of counsel, deem necessary or advisable; and

(iii) Obtaining any other consent, approval or permit from any state, federal or foreign governmental agency which the Committee shall, in its absolute discretion after receiving the advice of counsel, determine to be necessary or advisable.

(c) Noncertificated Issuance of Shares. To the extent that the Plan provides for issuance of stock certificates to reflect the issuance of shares of Common Stock or Restricted Stock, the issuance may be effected on a noncertificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange.

8. TRANSFERABILITY OF GRANTS

Except as otherwise provided by rules of the Committee, shares of Restricted Stock, Restricted Stock Units and other rights of Participants under this Plan shall not be transferable by a Participant otherwise than by (i) the Participant's last will and testament or (ii) by the applicable laws of descent and distribution.

9. TAXES

Whenever General Mills 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 cash payments and shares to be delivered cash and shares, respectively, sufficient to satisfy all or a portion of such tax-withholding requirements.

10. CHANGE OF CONTROL

(a) Upon a Change of Control:

(i) All shares of Restricted Stock and Restricted Stock Units shall immediately vest and Common Stock free of restrictions shall be distributed to Participants, effective as of the date of the Change of Control, and

(ii) The Committee may make such additional adjustments and/or settlements of outstanding Grants for the Performance Period within which the Change of Control occurs as it deems appropriate and consistent with the Plan's purposes.

(b) "Change of Control" means the occurrence of any of the following events:

(i) 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 General Mills where such acquisition causes

such Person to own 20 percent or more of the combined voting power of the then outstanding voting securities of General Mills entitled to vote generally in the election of directors (the "Outstanding Voting Securities"); provided, however, that for purposes of this subsection (i), the following acquisitions shall not be deemed to result in a Change of Control: (w) any acquisition directly from General Mills, (x) any acquisition by the Company, (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by General Mills or any corporation controlled by General Mills or (z) any acquisition by any corporation pursuant to a transaction that complies with clauses (x), (y) and (z) of subsection (iii) below; and provided, further, that if any Person's beneficial ownership of the Outstanding Voting Securities reaches or exceeds 20 percent as a result of a transaction described in clause (w) or (x) above, and such Person subsequently acquires beneficial ownership of additional voting securities of General Mills, such subsequent acquisition shall be treated as an acquisition that causes such Person to own 20 percent or more of the Outstanding Voting Securities; or

(ii) Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the shareholders of General Mills, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(iii) The approval by the shareholders of General Mills of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of General Mills ("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 (x) 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 percent 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 General Mills or all or substantially all of the assets of General Mills 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, (y) no Person (excluding any employee benefit plan, or related trust, of General Mills or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20 percent 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 (z) 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

(iv) Approval by the stockholders of General Mills of a complete liquidation or dissolution of General Mills.

11. TERMINATION OF EMPLOYMENT

The following rules regarding the effect of a Participant's termination of employment on his or her Restricted Stock or Restricted Stock Units shall apply unless otherwise determined by the Committee.

(a) If the Participant's employment by the Company is terminated by either:

(i) the voluntary resignation of the Participant or

(ii) a Company discharge due to Participant's illegal activities, poor work performance, misconduct or violation of the Company's policies or practices,

the Participant's shares of Restricted Stock or Restricted Stock Units, which are unvested on the date of termination, shall be forfeited.

(b) If the Participant's employment by the Company is terminated for any reason other than specified in Section 11(a), (c), (d) or (e), the following rules shall apply:

(i) In the event that, at the time of such termination, the sum of Participant's age and service with the Company equals or exceeds 70, the Participant's Restricted Stock and Restricted Stock Units shall continue to vest according to the schedule established at the time of grant, unless otherwise provided in the Grant Agreement.

(ii) In the event that, at the time of termination, the sum of Participant's age and service with the Company is less than 70, Restricted Stock and Restricted Stock Units shall vest in a pro-rata amount based on full months of employment completed during the Restricted Period from the date of grant to termination, and the Participant's remaining Restricted Stock and Restricted Stock Units shall be forfeited; except if the Participant is an executive officer of the Company, all Restricted Stock and Restricted Stock Units shall fully vest as of the date of termination.

(c) Death. A Participant who dies during the Restricted Period for any Restricted Stock or Restricted Stock Units shall vest in a proportionate number of such shares of Restricted Stock or Restricted Stock Units, effective as of the date of death. Such proportionate vesting shall be prorata, based on the number of full months of employment completed during the Restricted Period prior to the date of death, as a percentage of the applicable Restricted Period.

(d) Retirement. The Committee shall determine, at the time of a Grant, the treatment of the Restricted Stock or Restricted Stock Units upon the retirement of the Participant during the Restricted Period. Unless other terms are specified in the original Grant or the Grant Agreement, if the termination of employment is due to a Participant's retirement on or after age 55, the Participant shall fully vest in all Restricted Stock or Restricted Stock Units effective as of the date of retirement.

(e) Spin-offs. If the termination of employment during the Restricted Period for any Restricted Stock or Restricted Stock Units 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 such Restricted Stock and Restricted Stock Units.

12. ADMINISTRATION OF THE PLAN

(a) Administration. The authority to control and manage the operations and administration of the Plan shall be vested in the Committee in accordance with this Section 12, subject to the following:

(i) Subject to the provisions of the Plan, the Committee shall have the authority and discretion to select from among the eligible Company employees those persons who shall receive Awards, to determine the time or times of receipt, to determine the types of Awards and the Target Amounts covered by the grants, to establish the terms, conditions, 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 shall 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 the United States.

(iii) The Committee shall 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 shall be final and binding.

(b) Delegation by Committee. Except to the extent prohibited by applicable law or the applicable rules of a stock exchange, the Committee may delegate 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, 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 or the Committee without the approval of the stockholders of General Mills which would amend the Maximum Amount, set forth in Section 5(d), that may be granted 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 Grant without the consent of the Participant. There is no obligation for uniformity of treatment of Participants under the Plan.

14. FOREIGN JURISDICTIONS

It is intended that in lieu of awarding Restricted Stock, the Committee may grant Restricted Stock Units to employees of the Company who are subject to the laws of foreign jurisdictions and entitled to receive Awards under the Plan. In addition, the Committee may adopt, amend and terminate 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 Grants 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

16. DEFINITIONS

For purposes of this Plan, the following terms shall have the meanings set forth below.

"1934 ACT" means the Securities Exchange Act of 1934.

"AWARD" is defined in Section 4.

"BOARD" means the Board of Directors of General Mills.

"BUSINESS COMBINATION" is defined in Section 10(b)(iii).

"CASH DIVIDEND EQUIVALENT" is defined in Section 6(c).

"CHANGE OF CONTROL" is defined in Section 10(b).

"COMMITTEE" means the Compensation Committee of the Board, or such other committee as the Board may from time to time select, provided that the Committee must at all times be composed of two or more members of the Board, each of whom qualifies as an "outside director" within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended.

"CASH BONUSES" means cash payments to Participants under this Plan.

"COMMON STOCK" means the common stock, par value $0.10 per share, of General Mills.

"COMPANY" is defined in Section 1.

"FAIR MARKET VALUE" of a share of Common Stock as of any given date means, except as otherwise determined by the Committee, the mean of the highest and lowest reported sales prices during regular trading hours on that date (or, if there are no such reported sales on that date, on the last date prior to such date on which there were such sales) of the Common Stock on the New York Stock Exchange.

"GENERAL MILLS" is defined in Section 1.

"GRANT" means a grant to an eligible employee of the opportunity to earn Awards under this Plan for any Performance Period pursuant to
Section 5(b), including the awarding of Restricted Stock and crediting of Restricted Stock Units to a Restricted Stock Units Account.

"GRANT AGREEMENT" is defined in Section 6(d).

"GRANT DATE" is the first business day after the end of the applicable Performance Period.

"INCUMBENT BOARD" is defined in Section 10(b)(ii).

"MAXIMUM AMOUNT" is defined in Section 5(d).

"NET EARNINGS" means the Company's earnings from continuing operations before unusual items and after taxes.

"OUTSTANDING VOTING SECURITIES" is defined in Section 10(b)(i).

"PARTICIPANT" is defined in Section 3.

"PERFORMANCE PERIOD" means a fiscal year of the Company, or such other period as the Committee may from time to time establish.

"PERSON" is defined in Section 10(b)(i).

"PLAN" is defined in Section 1.

"RESTRICTED PERIOD" is defined in Section 6(a).

"RESTRICTED STOCK" is defined in Section 4.

"RESTRICTED STOCK UNIT" IS DEFINED IN SECTION 4.

"VESTING DATE" means the date on which Restricted Stock or Restricted Stock Units vest, pursuant to Sections 6, 10, or 11.

Effective September 25, 2000
Amended June 1, 2001

EXHIBIT 10.5

Privileged and Confidential

MANAGEMENT CONTINUITY AGREEMENT

THIS AGREEMENT is entered into by and between General Mills, Inc., a Delaware corporation (the "Company"), and ______________ (the "Executive"), as of the 11th day of December, 1995.

The Board of Directors of the Company (the "Board"), has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined below) of the Company. The Board believes it is essential to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the Executive's full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Executive with compensation and benefit arrangements upon a Change of Control which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are competitive with those of other corporations. Therefore, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. Certain Definitions. (a) The "Effective Date" shall mean the first date during the Change of Control Period (as defined in Section 1(b)) on which a Change of Control (as defined in Section 2) occurs. Anything in this Agreement to the contrary notwithstanding, if a Change of Control occurs and if the Executive's employment with the Company is terminated prior to the date on which the Change of Control occurs, and if it is reasonably demonstrated by the Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or
(ii) otherwise arose in connection with or anticipation of a Change of Control, then for all purposes of this Agreement the "Effective Date" shall mean the date immediately prior to the date of such termination of employment.

(b) The "Change of Control Period" shall mean the period commencing on the date hereof and ending on the third anniversary of the date hereof; provided, however, that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof shall be hereinafter referred to as the "Renewal Date"), unless previously terminated, the Change of Control Period shall be automatically extended so as to terminate three years from such Renewal Date, unless at least 60 days prior to the Renewal Date the Company shall give notice to the Executive that the Change of Control Period shall not be so extended.

2. Change of Control. For the purpose of this Agreement, a "Change of Control" shall mean:

(a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "1934 Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of 20% or more of either
(i) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute 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 which complies with clauses (i), (ii) and
(iii) of subsection (c) of this Section 2; and provided, further, that if any Person's beneficial ownership of the Outstanding Company Voting Securities reaches or exceeds 20% as a result of a transaction described in clause (i) or
(ii) above, and such Person subsequently acquires beneficial ownership of additional voting securities of the Company, such subsequent acquisition shall be treated as an acquisition that causes such Person to own 20% or more of the Outstanding Company Voting Securities; or

(b) Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(c) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Voting Securities, as the case may be, (ii) no Person

(excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(d) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

3. Employment Period. The Company hereby agrees to continue the Executive in its employ, and the Executive hereby agrees to remain in the employ of the Company, subject to the terms and conditions of this Agreement, for the period commencing on the Effective Date and ending on the second anniversary of such date (the "Employment Period").

4. Terms of Employment. (a) Position and Duties. (i) During the Employment Period, (A) the Executive's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 120-day period immediately preceding the Effective Date and (B) the Executive's services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location less than 35 miles from such location.

(ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive's reasonable best efforts to perform faithfully and efficiently such responsibilities.

(b) Compensation. (i) Base Salary. During the Employment Period, the Executive shall receive an annual base salary ("Annual Base Salary"), which shall be paid at a monthly rate, at least equal to twelve times the highest monthly base salary paid or payable, including any base salary or portion thereof which has been earned but deferred, to the Executive by the Company and its affiliated companies in respect of the twelve-month period immediately preceding the month in which the Effective Date occurs. During the Employment Period, the Annual Base Salary shall be reviewed no more than 12 months after the last salary increase awarded to the Executive prior to the Effective Date and thereafter at least annually. Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement. Annual Base Salary shall not be reduced after any such increase and the term Annual Base Salary as utilized in this Agreement shall refer to Annual Base Salary as so increased. As used in this Agreement, the term

"affiliated companies" shall include any company controlled by, controlling or under common control with the Company.

(ii) Annual Bonus. In addition to Annual Base Salary, the Executive shall be awarded, for each fiscal year ending during the Employment Period, an annual bonus (the "Annual Bonus") in cash at least equal to the average of the Executive's bonuses paid under the Company's Executive Incentive Plan, or any comparable bonus under any predecessor or successor plan, for the last three full fiscal years prior to the Effective Date (annualized in the event that the Executive was not employed by the Company for the whole of such fiscal year) (the "Average Annual Bonus"). Each such Annual Bonus shall be paid no later than the end of the third month of the fiscal year next following the fiscal year for which the Annual Bonus is awarded, unless and to the extent that the Executive shall elect to defer the receipt of all or a portion of such Annual Bonus.

(iii) Incentive, Savings and Retirement Plans. During the Employment Period, the Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with incentive opportunities (measured with respect to both regular and special incentive opportunities, to the extent, if any, that such distinction is applicable), savings opportunities and retirement benefit opportunities, in each case, less favorable, in the aggregate, than the most favorable of those provided by the Company and its affiliated companies for the Executive under such plans, practices, policies and programs as in effect at any time during the 120-day period immediately preceding the Effective Date or if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company and its affiliated companies.

(iv) Welfare Benefit Plans. During the Employment Period, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its affiliated companies (including, without limitation, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to other peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with benefits which are less favorable, in the aggregate, than the most favorable of such plans, practices, policies and programs in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company and its affiliated companies.

(v) Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the most favorable policies, practices and procedures of the Company and its affiliated companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if

more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(vi) Fringe Benefits. During the Employment Period, the Executive shall be entitled to fringe benefits, including, without limitation, tax and financial planning services, payment of club dues, and, if applicable, use of an automobile and payment of related expenses, in accordance with the most favorable plans, practices, programs and policies of the Company and its affiliated companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(vii) Office and Support Staff. During the Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to exclusive personal secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Executive by the Company and its affiliated companies at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(viii) Vacation. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and its affiliated companies as in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

5. Termination of Employment.(a) Death or Disability. The Executive's employment shall terminate automatically upon the Executive's death during the Employment Period. If the Company determines in good faith that the Disability of the Executive has occurred during the Employment Period (pursuant to the definition of Disability set forth below), it may give to the Executive written notice in accordance with Section 12(b) of this Agreement of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 30th days after receipt of such notice by the Executive (the "Disability Effective Date"), provided that, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" shall mean the absence of the Executive from the Executive's duties with the Company on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive's legal representative.

(b) Cause. The Company may terminate the Executive's employment during the Employment Period for Cause. For purposes of this Agreement, "Cause" shall mean:

(i) the willful and continued failure of the Executive to perform substantially the Executive's duties with the Company or one of its affiliates (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Executive by the Board or the Chief Executive Officer of the Company which specifically identifies the manner in which the Board or Chief Executive Officer believes that the Executive has not substantially performed the Executive's duties, or

(ii) the willful engaging by the Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company.

For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive's action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. The cessation of employment of the Executive shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Executive is guilty of the conduct described in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail.

(c) Good Reason. The Executive's employment may be terminated by the Executive for Good Reason. For purposes of this Agreement, "Good Reason" shall mean:

(i) the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or any other action by the Company which results in a diminution in such position, authority or duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

(ii) any failure by the Company to comply with any of the provisions of Section 4(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

(iii) the Company's requiring the Executive to be based at any office or location other than as provided in Section 4(a)(i)(B) hereof or the Company's requiring the Executive to travel on Company business to a substantially greater extent than required immediately prior to the Effective Date;

(iv) any purported termination by the Company of the Executive's employment otherwise than as expressly permitted by this Agreement; or

(v) any failure by the Company to comply with and satisfy
Section 12(c) of this Agreement.

For purposes of this Section 5(c), any good faith determination of "Good Reason" made by the Executive shall be conclusive.

(d) Notice of Termination. Any termination by the Company for Cause, or by the Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 13(b) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than thirty days after the giving of such notice). The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive's or the Company's rights hereunder.

(e) Date of Termination. "Date of Termination" means (i) if the Executive's employment is terminated by the Company for Cause, or by the Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii) if the Executive's employment is terminated by the Company other than for Cause or Disability, the Date of Termination shall be the date on which the Company notifies the Executive of such termination and (iii) if the Executive's employment is terminated by reason of death of Disability, the Date of Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be.

6. Obligations of the Company upon Termination. (a) Good Reason; Other Than for Cause, Death or Disability. If, during the Employment Period, the Company shall terminate the Executive's employment other than for Cause or Disability or the Executive shall terminate employment for Good Reason:

(i) the Company shall pay to the Executive in a lump sum in cash within 30 days after the Date of Termination the aggregate of the following amounts:

A. the sum of (1) the Executive's Annual Base Salary through the Date of Termination to the extent not theretofore paid; and (2) the product of (x) the higher of (A) the Average Annual Bonus (or, in the case of a new Executive who has not yet received one full year's bonus, an amount equal to the Executive's maximum annual bonus that could be payable under the Executive Incentive Plan for the fiscal year that includes the Effective Date) or (B) the Executive's annual bonus for the last fiscal year (such higher amount being referred to as the "Higher Annual Bonus") and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365; (the sum of the amounts described in clauses (1) and
(2) shall be hereinafter referred to as the "Accrued Obligations"); and

B. the amount equal to the product of (1) three and
(2) the sum of (x) the Executive's Annual Base Salary and (y) the Higher Annual Bonus; and

C. an amount equal to the excess of (a) the actuarial equivalent (utilizing actuarial assumptions no less favorable to the Executive than the most favorable in effect under the Company's qualified defined benefit retirement plan (the "Retirement Plan") and any excess or supplemental retirement plan in which the Executive participates (together, the "SERP"), at any time since the day immediately prior to the Effective Date) of the benefit under the Retirement Plan and the SERP which the Executive would receive if the Executive's employment continued for three years after the Date of Termination assuming for this purpose that all accrued benefits are fully vested, and, assuming that the Executive's compensation in each of the three years is that required by
Section 4(b)(i) and Section 4(b)(ii), over (b) the actuarial equivalent of the Executive's actual benefit (paid or payable), if any, under the Retirement Plan and the SERP as of the Date of Termination;

(ii) until the earlier to occur of (A) the date three years after the Executive's Date of Termination, or (B) the first day of the first month next following the Executive's 65th birthday, the Company shall continue benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 4(b)(iv) of this Agreement if the Executive's employment had not been terminated or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies and their families, provided, however, that if the Executive becomes reemployed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the medical and other welfare benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility; and further subject that if at the Date of

Termination the Executive would not qualify for post-retirement benefits under the plans and programs then in effect for the reason that the Executive had not reached age 55, the Executive shall nevertheless be entitled to such benefits equal to the benefits the Executive would have received if the Executive was age 55 at the Date of Termination. For purposes of determining eligibility (but not the time of commencement of benefits) of the Executive for retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed until three years after the Date of Termination and to have retired on the last day of such period;

(iii) the Company shall, at its sole expense as incurred, provide the Executive with outplacement services the scope and provider of which shall be selected by the Executive in his or her sole discretion; and

(iv) to the extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy or practice of contract or agreement of the Company and its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the "Other Benefits").

(b) Death. If the Executive's employment is terminated by reason of the Executive's death during the Employment Period, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive's estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination.

(c) Disability. If the Executive's employment is terminated by reason of the Executive's Disability during the Employment Period, this Agreement shall terminate without further obligations to the Executive, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination.

(d) Cause; Other than for Good Reason. If the Executive's employment shall be terminated for Cause during the Employment Period, or if the Executive voluntarily terminates employment during the Employment Period, excluding a termination for Good Reason, this Agreement shall terminate without further obligations to the Executive, other than for Accrued Obligations and the timely payment or provision of Other Benefits. In such case, all Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination.

(e) By the Company more than two years after the Effective Date. If the Company shall terminate the Executive's employment for any reason other than for Cause or Disability at any date that is more than two years after the Effective Date, the Executive shall be entitled to receive the benefits specified under clauses (i), (ii),

(iii) and (iv) of paragraph (a) of Section 6, except that the word "three" in subclause B. of clause (i) and the words "three years" in subclause C. of clause
(i) and clause (ii) shall be replaced with "one" and "one year," respectively.

(f) By the Executive during the Window Period. Anything in this Agreement to the contrary notwithstanding, a termination by the Executive for any reason during the 30-day period immediately following the first anniversary of the Effective Date shall be deemed to be a termination for Good Reason for all purposes of this Agreement, and the Executive shall be entitled to receive the benefits specified in paragraph (a) of Section 6, except that the word "three" shall be replaced with the word "two" in each place where it appears in said paragraph (a) of Section 6.

7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any plan, program, policy or practice provided by the Company or any of its affiliated companies and for which the Executive may qualify, nor, subject to Section
13(f), shall anything herein limit or otherwise affect such rights as the Executive may have under any contract or agreement with the Company or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement.

8. Full Settlement. The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. The Company agrees to pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company, the Executive or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code").

9. Certain Additional Payments by the Company.

(a) Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 9) (a "Payment") would be subject to the excise tax imposed by Code Section 4999 or any interest or penalties are incurred by the Executive with respect to such excise tax

(such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

(b) Subject to the provisions of Section 9(c), all determinations required to be made under this Section 9, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by KPMG Peat Marwick LLP or such other certified public accounting firm as may be designated by the Executive (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, the Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 9, shall be paid by the Company to the Executive within five days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Code Section 4999 at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 9(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.

(c) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after the Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which he or she gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:

(i) give the Company any information reasonably requested by the Company relating to such claim,

(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company,

(iii) cooperate with the Company in good faith in order to effectively contest such claim, and

(iv) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 9(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 9(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company's complying with the requirements of Section 9(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 9(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be

forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

10. Confidential Information. The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive's employment by the Company or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive's employment with the Company, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. In no event shall an asserted violation of the provisions of this Section 10 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement.

11. Supplemental Trust. The Company has established a Supplemental Benefits Trust with Norwest Bank Minnesota, N.A. as Trustee to hold assets of the Company under certain circumstances as a reserve for the discharge of the Company's obligations under this Agreement and certain plans of deferred compensation of the Company. In the event of a Change of Control as defined in
Section 1 hereof, the Company shall be obligated to immediately contribute such amounts to the Trust as may be necessary to fully fund all benefits that may become payable under Sections 6(a), 6(e) or 9 of the Agreement. Executives shall have the right to demand and secure specific performance of this provision. All assets held in the Trust remain subject only to the claims of the Company's general creditors whose claims against the Company are not satisfied because of the Company's bankruptcy or insolvency (as those terms are defined in the Trust Agreement). The Executive does not have any preferred claim on, or beneficial ownership interest in, any assets of the Trust before the assets are paid to the Executive and all rights created under the Trust, as under this Agreement, are unsecured contractual claims of the Executive against the Company.

In the event the funding of the Trust described in the preceding paragraph does not occur, upon written demand by the Executive given at any time after a Change of Control occurs, the Company shall deposit in trust with an institutional trustee (the "Trustee") designated by the Executive in such demand amounts which may become payable to the Executive pursuant to Sections 6(a), 6(b) or 9 with irrevocable instructions to pay amounts to the Executive when due in accordance with the terms of this Agreement. All fees, expenses and other charges of the Trustee shall be paid by the Company. The Trustee shall be entitled to rely conclusively on the Executive's written statement as to the fact that payments are due under this Agreement and the amount of such payments. If the Trustee is not notified that payments are due under this Agreement within two years and 60 days after receipt of a deposit hereunder, all amounts deposited with the Trustees and earnings with respect thereto shall be delivered to the Company on demand.

12. Successors. (a) This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives.

(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

13. Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Company:    General Mills, Inc.
                      Number One General Mills Boulevard
                      Minneapolis, Minnesota 55426
                      Attention: General Counsel

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

(d) The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

(e) The Executive's or the Company's failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

(f) The Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between the Executive and the Company, the employment of the Executive by the Company is "at will" and, subject to Section 1(a) hereof, prior to the Effective Date, the Executive's employment and/or this Agreement may be terminated by either the Executive or the Company at any time prior to the Effective Date, in which case the Executive shall have no further rights under this Agreement. From and after the Effective Date this Agreement shall supersede any other agreement between the parties with respect to the subject matter hereof.

IN WITNESS WHEREOF, the Executive has hereunto set his or her hand and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name on its behalf, all as of the date first above written.

GENERAL MILLS, INC.

EXHIBIT 10.12

GENERAL MILLS, INC.

DEFERRED COMPENSATION PLAN

As Amended and Restated Effective January 1, 2001

GENERAL MILLS, INC.

DEFERRED COMPENSATION PLAN

1. PURPOSE OF PLAN

General Mills, Inc. (the "Company") hereby establishes a Deferred Compensation Plan (the "Plan") for a select group of the key management and highly compensated employees of the Company and its affiliates as a means of sheltering a portion of income from current taxation while accumulating resources for future investments or retirement. Under the Plan, Participants may defer cash incentives, common stock issued under the Company's stock option plans, and restricted stock units issued under the Company's various stock plans granting restricted stock, as they may be amended from time to time. In addition, Participants may "defer" shares of General Mills, Inc. common stock ("Common Stock") attributable to restricted stock issued under the Company's various stock plans granting restricted stock, as they may be amended from time to time, by cancellation of such shares in exchange for deferred restricted stock units under this Plan. As to deferred cash incentives, Participants shall earn a "rate of return" on the deferred amounts which track the investment return achieved under the General Mills VIP
401(k) Plan ("VIP") and/or rates equivalent to investment results of other funds or portfolios as may be made available from time to time pursuant to the provisions of the Plan. As to stock options, Participants may defer receipt of the net shares of Common Stock resulting from a Participant's stock-for-stock option exercise and dividend equivalents on the net shares. As to deferrals related to restricted stock and restricted stock units, Participants may defer the receipt of shares of Common Stock attributable to such grants and to dividend equivalents on such shares. Under current tax law, amounts properly deferred and the "rate of return" or earnings credited to such amounts are not taxable (except for FICA taxation, as required) as income until they are distributed to the Participants. Under current tax law, distributions from this Plan will be taxed as ordinary income in the year in which they are received.

2. ELIGIBILITY

An individual is a Participant in the Plan if such individual (i) is a Participant in the various stock plans granting restricted stock, as they may be amended from time to time, (ii) has been selected by management to participate in "Compensation Plus," or (iii) has an individual agreement, approved by the Minor Amendment Committee, which provides for participation in this Plan and has elected to defer compensation or receipt of Common Stock pursuant to the provisions of any of these programs or the agreement. Former employees of the Company who have retired from the Company may also participate if they would have been eligible to participate at the time they retired from the Company.

3. PLAN ADMINISTRATION

(i) Minor Amendment Committee. Except as provided below, this Plan shall be administered by the Minor Amendment Committee (the "Minor Amendment Committee"). The Minor Amendment Committee shall act by affirmative vote of a majority of its members at a meeting or in writing without a meeting. The Minor Amendment Committee shall appoint a secretary who may be but need not be one of its own members. The

secretary shall keep complete records of the administration of the Plan. The Minor Amendment Committee may authorize each and any one of its members to perform routine acts and to sign documents on its behalf. To the extent necessary to maintain any exemption under Rule 16b-3 or any successor rule ("Rule 16b-3") under the Securities Exchange Act of 1934 as to certain officers of the Company, certain portions of this Plan shall be administered by the Compensation Committee.

(ii) Plan Administration. The Minor Amendment Committee may appoint such persons or establish such subcommittees, employ such attorneys, agents, accountants or investment advisors necessary or desirable to advise or assist it in the performance of its duties hereunder, and the Minor Amendment Committee may rely upon their respective written opinions or certifications.

Administration of the Plan shall consist of interpreting and carrying out the provisions of the Plan. The Minor Amendment Committee shall, in its discretion, determine the eligibility of employees to participate in the Plan, their rights while Participants in the Plan and the nature and amount of benefits to be received therefrom. The Minor Amendment Committee shall, in its discretion, decide any disputes which may arise under the Plan. The Minor Amendment Committee may provide rules and regulations for the administration of the Plan consistent with its terms and provisions. Any construction or interpretation of the Plan and any determination of fact in administering the Plan made in good faith by the Minor Amendment Committee shall be final and conclusive for all Plan purposes.

(iii) Claims Procedure.

(a) The Minor Amendment Committee shall prescribe a form for the presentation of claims under the terms of the Plan.

(b) Upon presentation to the Minor Amendment Committee of a claim on the prescribed form, the Minor Amendment Committee shall make a determination of the validity thereof. If the determination is adverse to the claimant, the Minor Amendment Committee shall furnish to the claimant within a reasonable period of time after the receipt of the claim a written notice setting forth the following:

(1) The specific reason or reasons for the denial;

(2) Specific reference to pertinent provisions of the Plan on which the denial is based;

(3) A description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and

(4) An explanation of the Plan's claim review procedure.

(c) In the event of a denial of a claim, the claimant may appeal such denial to the Minor Amendment Committee for a full and fair review of the adverse determination. The claimant's request for review must

be in writing and be made to the Minor Amendment Committee within 60 days after receipt by the claimant of the written notification required under subsection (b) above. The claimant or his or her duly authorized representative may submit issues and comments in writing which shall be given full consideration by the Minor Amendment Committee in its review.

(d) The Minor Amendment Committee may, in its sole discretion, conduct a hearing. A request for a hearing will be given full consideration. At such hearing, the claimant shall be entitled to appear and present evidence and be represented by counsel.

(e) A decision on a request for review shall be made by the Minor Amendment Committee not later than 60 days after receipt of the request; provided, however, in the event of a hearing or other special circumstances, such decision shall be made not later than 120 days after receipt of such request.

(f) The Minor Amendment Committee's decision on review shall state in writing the specific reasons and references to the Plan provisions on which it is based. Such decision shall be immediately provided to the claimant. In the event the claimant disagrees with the findings of the Minor Amendment Committee, the matter shall be referred to arbitration in accordance with
Section 14 hereof.

(g) The Minor Amendment Committee may allocate its responsibilities among its several members, except that all matters involving the hearing of and decision on claims and the review of the determination of benefits shall be made by the full Minor Amendment Committee. No member of the Minor Amendment Committee shall participate in any matter relating solely to himself or herself.

4. DEFERRAL AND PAYMENT OF COMPENSATION

(i) Cash Incentive Deferral Election. A Participant can elect to defer cash incentive compensation by completing and submitting to the Company a cash deferral election form by December 31 of each year. Such election shall apply to the Participant's cash incentive compensation, if any, to be paid in the next calendar year. A Participant's cash incentive deferral election may apply to:

(a) 100% of the cash incentive compensation,

(b) any amount in excess of a specified dollar amount,

(c) any amount up to a specified dollar amount, or

(d) a specified percentage (in whole numbers) of the cash incentive compensation.

(ii) Stock Option Gain Deferral Election. A Participant can elect to defer receipt of Net Shares (defined below) of Common Stock resulting from a stock-for-stock exercise of an exercisable stock option issued to the

Participant by completing and submitting to the Company an irrevocable stock option deferral election at least six months in advance of exercising the stock option (which exercise must be done on or prior to the expiration of the stock option) and, on or prior to the exercise date, delivering personally-owned shares equal in value to the option exercise price on the date of the exercise. At the time of the deferral election, the Participant can also choose to use some of the shares subject to the stock option to satisfy any FICA, Medicare or any other taxes due upon the stock option exercise. "Net Shares" means the difference between the number of shares of Common Stock subject to the stock option exercise and the number of shares of Common Stock delivered to satisfy the stock option exercise price less any shares used to satisfy FICA, Medicare or any other taxes due upon the stock option exercise. A Participant may not revoke a stock option gain deferral election after it is received by the Company. A Participant may choose to defer receipt of all or only a portion of the Net Shares to be received upon exercise of a stock option. If only a portion of the Net Shares is deferred, the balance will be issued at the time of exercise.

(iii) Restricted Stock/Restricted Stock Unit Deferral Election. A Participant can elect to defer receipt of the shares of Common Stock of the Company attributable to nonvested restricted stock or restricted stock units under the Company's restricted stock plan(s) by completing and submitting to the Company an irrevocable restricted stock deferral election within the period specified by the Minor Amendment Committee on the applicable deferral election form and prior to the date such restricted stock or restricted stock units become vested as determined under the Company's various stock plans granting restricted stock, as they may be amended from time to time. A Participant may not revoke a restricted stock/restricted stock unit deferral election after it is received by the Company. A Participant may choose to defer receipt of all or only a portion of the shares of Common Stock attributable to nonvested restricted stock or the restricted stock units that have been granted to the Participant by the Company. Any election to defer receipt of shares of Common Stock attributable to restricted stock shall result in the restricted stock being cancelled and replaced with the mere promise of the Company to pay deferred compensation (in the form of deferred restricted stock units) pursuant to the terms of the Plan.

(iv) Distribution of Deferred Cash Incentive and Common Stock. At the time of a Participant's deferral election, a Participant must also select a distribution date and a form of distribution. The distribution date may be any date that is at least one year subsequent to: (1) in the case of cash incentive compensation, the date the cash incentive would otherwise be payable; (2) in the case of stock option gain deferrals, the exercise date for the related stock option; and
(3) in the case of deferrals related to restricted stock or restricted stock units, the date such restricted stock or restricted stock units are otherwise vested under the terms of the Company's various stock plans granting restricted stock, as they may be amended from time to time; provided that, in all cases, the Participant's deferral election must provide that distribution shall be made or commenced no later than the date the Participant attains age 70.

A Participant may elect to have deferred cash amounts paid or Common Stock distributed, as the case may be, in a single payment or in substantially equal annual installments for a period not to exceed ten (10) years, or up to fifteen (15) years for elections made until December 31, 1985, or in another form requested by the Participant, in writing, and approved by the Minor Amendment Committee. Common Stock issuable under a single stock option grant or a single restricted stock or restricted stock unit grant shall have the same distribution date and form of distribution. Notwithstanding the above, the following provisions shall apply:

(a) If the employment of a Participant terminates for any reason other than retirement prior to the date any cash incentive compensation award would otherwise have been made, then any cash deferral election made with respect to such incentive compensation award shall not become effective.

(b) If a stock option, as to which a Participant has made a stock option gain deferral election, terminates prior to the exercise date selected by the Participant, or if the Participant dies or fails to deliver personally-owned shares in payment of the exercise price, then the deferral election shall not become effective.

(c) In the event of the termination of employment of a Participant other than by retirement, the Minor Amendment Committee may, with sole and complete discretion, if it determines that such distribution is in the best interest of the Company, require that distribution of all cash and Stock Units (as defined in
Section 8(i) below) allocated to a Participant's Deferred Cash Accounts or Deferred Stock Unit Accounts (as defined in Section 8(i) below) be accelerated and distributed as of the first business day of the calendar year next following the date of termination.

(d) As to all previous and future Plan years, a Participant who (A) has elected a distribution date and distribution in either a single distribution or substantially equal installments and (B) is not within twelve (12) months of the date that such deferred amount, deferred Common Stock or the first installment thereof would be distributed under this Plan, shall be permitted to make no more than two amendments to the initial election to defer distributions such that his or her distribution date is either in the same calendar year as the date of the distribution which would have been made in the absence of such election amendment(s) or is at least one year after the date of the distribution which would have been made in the absence of such election amendment(s). A Participant satisfying the conditions set forth in the preceding sentence may also amend such election so that his or her form of distribution is changed to substantially equal annual installments for a period not to exceed ten (10) years or is changed to a single distribution.

(e) A Participant may, at any time prior or subsequent to the commencement of cash benefit payments under this Plan, elect in writing to have his or her form of payment of any or all amounts due under this Plan changed to an immediate lump-sum distribution

which shall be paid within one (1) business day of receipt by the Company of such request; provided that the amount of any such lump-sum distribution shall be reduced by an amount equal to the product of (X) the total lump-sum distribution otherwise payable (based on the value of the account as of the first day of the month in which the lump-sum amount is paid, adjusted by a pro-rata portion of the rate of return for the prior month in which the lump-sum is paid, determined by multiplying the actual rate of return for such prior month by a fraction, the numerator of which is the number of days in the month in which the request is received prior to the date of payment, and the denominator of which is the number of days in the month), and (Y) the rate set forth in Statistical Release H.15(519), or any successor publication, as published by the Board of Governors of the Federal Reserve System for one-year U.S. Treasury notes under the heading "Treasury Constant Maturities" for the first day of the calendar month in which the request for a lump-sum distribution is received by the Company.

(f) A Participant may, at any time prior or subsequent to the commencement of distribution of Common Stock under this Plan, elect to have his or her form of distribution of any or all distributions of Common Stock to be made under this Plan changed to an immediate single distribution which shall be made within three (3) days of receipt by the Company of such request; provided, that the number of shares of Common Stock to be distributed in the single distribution shall be reduced by the number of shares equal in value to the product of (X) the number of Stock Units allocated to the Participant's Deferred Stock Unit Account, (Y) the mean of the high and low price of the shares of Common Stock on the New York Stock Exchange on the date of the request, and (Z) the rate set forth in Statistical Release H.15(519), or any successor publication as published by the Board of Governors of the Federal Reserve System for one-year U.S. Treasury notes under the heading "Treasury Constant Maturities" for the first day of the calendar month in which the request for a single Common Stock distribution is received by the Company. Only whole numbers of shares will be issued, with any fractional share amounts and dividend equivalents not used to "purchase" additional Stock Units paid in cash.

(g) At the time elected by the Participant for distribution of Common Stock attributable to allocations under the Participant's Deferred Stock Unit Account, the Company shall issue to the Participant, within three (3) days of the date of distribution, shares of Common Stock equal to the number of Stock Units credited to the Deferred Stock Unit Account and cash equal to any dividend equivalent amounts which had not been used to "purchase" additional Stock Units as provided below. Prior to distribution and pursuant to any rules the Committee may adopt, a Participant may authorize the Company to withhold a portion of the shares of Common Stock to be distributed for the payment of all federal, state, local and foreign withholding taxes required to be collected in respect of the distribution.

(v) Rabbi Trust. The Company has established a Supplemental Benefits Trust with Norwest Bank Minneapolis, N.A. as Trustee to hold assets of the Company under certain circumstances as a reserve for the discharge of the Company's obligations as to deferred compensation under the Plan and certain other plans of deferred compensation of the Company. In the event of a "Change in Control" (as defined in Section 12 below), the Company shall be obligated to immediately contribute such amounts to the Trust as may be necessary to fully fund all cash benefits payable under the Plan. Any Participant in the Plan shall have the right to demand and secure specific performance of this provision. All assets held in the Trust remain subject only to the claims of the Company's general creditors whose claims against the Company are not satisfied because of the Company's bankruptcy or insolvency (as those terms are defined in the Trust Agreement). No Participant has any preferred claim on, or beneficial ownership interest in, any assets of the Trust before the assets are paid to the Participant and all rights created under the Trust, as under the Plan, are unsecured contractual claims of the Participant against the Company.

(vi) Common Stock Distribution. In the event of a Change of Control, shares of Common Stock and cash attributable to Stock Units and dividend equivalents credited to each Participant's Deferred Stock Unit Account shall be immediately distributed to the Participant.

5. DEFERRED CASH ACCOUNTS AND INVESTMENT RETURNS ON AMOUNTS IN DEFERRED ACCOUNTS

A deferred cash incentive compensation account ("Deferred Cash Account") will be established on behalf of each Participant electing to defer cash incentive compensation under Section 4(i) above, and the amount of deferred cash incentive compensation will be credited to each Participant's Deferred Cash Account as of the first of the month coincident with or next following the month in which the deferral becomes effective. Each Participant's Deferred Cash Account will be credited monthly with a "rate of return" on the total deferred cash incentive amount accruing as of the first of the month coincident with or next following the date deferred cash incentive compensation is credited to the Participant's Deferred Cash Account. Such "rate of return" shall be based upon the actual investment performance of funds in the VIP, or at such other rates as may be made available to Participants from time to time pursuant to the provisions of the Plan. A Participant may elect to have the "rate of return" credited to his or her Deferred Cash Account at any of the following rates:

(a) the rate of return as from time to time earned by the Fixed Income Fund of the VIP;

(b) the rate of return as from time to time earned by the Equity Fund of the VIP; or

(c) any other rates of return of other funds or portfolios established under a qualified benefit plan maintained by the Company which the Minor Amendment Committee may establish as an available rate of return under this Plan.

Participants may elect to have any combination of the above "rates of return" accrue on amounts in their Deferred Cash Account, from 1% to 100%, provided that the sum of the percentages attributable to such rates with respect to each account equals 100%. A Participant may change the "rate(s) of return" to be credited to his or her Deferred Cash Account as of the first day of any month by notifying the Company, in writing, of such election by the last business day of the preceding month.

Each Participant's Deferred Cash Account will be credited monthly with the "rate(s) of return" elected by the Participant until the amount in each Participant's Deferred Cash Account is distributed to the Participant on the distribution date(s) elected by the Participant. Each Participant shall receive a periodic statement of the balance of his or her Deferred Cash Account.

6. COMPANY CONTRIBUTIONS TO DEFERRED CASH ACCOUNTS

As of the first of the month coincident with or next following the month in which a deferral is made hereunder, each Participant's Deferred Cash Account will be credited with hypothetical interest in an amount equal to 2 1/2% of the Participant's deferred cash incentive compensation, or such amount as will otherwise equal the value of the "Base Allocation" (as that term is defined in the VIP) which would have been allocated to the Participant if the Participant had contributed such deferred cash incentive compensation amount to the VIP. In addition, as soon as practicable following the end of each fiscal year, each Participant's Deferred Cash Account may be credited with hypothetical interest in an amount not to exceed 2 1/2% of the Participant's deferred cash incentive compensation, or such amount as will otherwise equal the value of the "Variable Allocation" (as that term is defined in the VIP) which would have been allocated to the Participant if the Participant had contributed such deferred cash incentive compensation amount to the VIP. Company contributions under this Section 6 shall not be made as to deferrals which were included in a Participant's earnable compensation under the General Mills International Retirement Plan.

7. SHORT-TERM DEFERRALS

Notwithstanding the foregoing provisions of the Plan, the Company may also permit Participants to elect to defer all or part of cash incentive compensation, if any, to a date certain selected by the Company within the taxable year it would otherwise be paid, upon written notice to the Company received by December 31 of the preceding calendar year. Interest shall be credited on such deferred cash amount at a rate selected by the Company and communicated to the Participants at the same time the availability of any such short-term deferral opportunity is communicated to Participants.

8. DEFERRED STOCK UNIT ACCOUNTS AND DIVIDEND EQUIVALENTS

(i) A deferred stock unit account ("Deferred Stock Unit Account") will be established for each stock option grant covered by a Participant election to defer the receipt of Common Stock under Section 4(ii) above and, for each Net Share deferred, a Stock Unit ("Stock Unit") will be credited to the Deferred Stock Unit Account as of the date of the stock option exercise. In addition, a Deferred Stock Unit Account will be established for each grant of restricted stock or restricted stock units covered by a Participant election to defer under
Section 4(iii) above and, for each share of

Common Stock of the Company attributable to deferred restricted stock or restricted stock units, a deferred Stock Unit will be credited to the Participant's Deferred Stock Unit Account. Participants may make elections, which shall become effective six months after they are made, either to receive dividend equivalent cash amounts on Stock Units currently or to have the amounts reinvested. If the amounts are reinvested, on each dividend payment date for the Company's Common Stock, the Company will credit each Deferred Stock Unit Account with an amount equal to the dividends paid by the Company on the number of shares of Common Stock equal to the number of Stock Units in the Deferred Stock Unit Account. Dividend equivalent amounts credited to each Deferred Stock Unit Account shall be used to hypothetically "purchase" additional Stock Units for the Deferred Stock Unit Account at a price equal to the mean of the high and low price of the Common Stock on the New York Stock Exchange on the dividend date. No fractional Stock Units will be credited. The Minor Amendment Committee may, in its sole discretion, direct either that all dividend equivalent amounts be paid currently or all such amounts be reinvested if, for any reason, such Committee believes it is in the best interest of the Company to do so. If the Participant fails to make an election, the dividend equivalent amounts shall be reinvested. Each Participant will receive a periodic statement of the number of Stock Units in his or her Deferred Stock Unit Account(s).

(ii) The Plan governs the deferral of receipt of Common Stock issuable upon the exercise of stock options of the Company. The stock options are governed by the stock option plan under which they are granted. The Plan also governs the deferral of restricted stock and restricted stock units issued by the Company. The restricted stock and restricted stock units are governed by the Company's policy(ies) for granting restricted stock and restricted stock units under the Company's various stock plans granting restricted stock, as they may be amended from time to time. No stock options, restricted stock, restricted stock units, or shares of Common Stock are authorized to be issued under the Plan. Participants who elect under the Plan to defer the receipt of Common Stock issuable upon the exercise of stock options and Participants who elect under the Plan to defer shares of Common Stock attributable to restricted stock or the receipt of restricted stock units will have no rights as stockholders of the Company with respect to allocations made to their Deferred Stock Unit Account(s) except the right to receive dividend equivalent allocations under Section 8(i) above.

(iii) In the event that the Compensation Committee determines that any dividend or other distribution (whether in the form of cash, Common Stock, securities of a subsidiary of the Company, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, or other similar corporate transaction or event affects the Common Stock such that an adjustment to the Participants' allocations to their Deferred Stock Unit Account(s) is appropriate to prevent reduction or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Compensation Committee may, in its

sole discretion and in such manner as it may deem equitable, adjust the Stock Units allocated to Participants' Deferred Stock Unit Account(s).

9. FINANCIAL HARDSHIP PAYMENTS

In the event of a severe financial hardship occasioned by an emergency, including, but not limited to, illness, disability or personal injury sustained by the Participant or a member of the Participant's immediate family, a Participant may apply to receive a distribution, including a distribution of Common Stock related to allocations of Stock Units under his or her Deferred Stock Unit Accounts earlier than initially elected. Subject to Section 3(i), the Minor Amendment Committee may, in its sole discretion, either approve or deny the request. The determination made by the Minor Amendment Committee will be final and binding on all parties. If the request is granted, the distributions will be accelerated only to the extent reasonably necessary to alleviate the financial hardship.

10. DEATH OF A PARTICIPANT

If the death of a Participant occurs before a full distribution of the Participant's Deferred Cash Account(s) or Deferred Stock Unit Account(s) is made, a single distribution shall be made to the beneficiary designated by the Participant to receive such amounts. This distribution shall be made as soon as practical following notification that death has occurred. In the absence of any such designation, the distribution shall be made to the personal representative, executor or administrator of the Participant's estate.

11. IMPACT ON OTHER BENEFIT PLANS

The Company may maintain life, disability, retirement and/or savings plans under which benefits earned or payable are related to earnings of a Participant.

Life and disability plan benefits will generally be based upon the earnings that a Participant would have earned in a given calendar year in the absence of any deferral hereunder.

Retirement benefits under a qualified pension plan maintained by the Company or an affiliate will be based upon earnings actually paid to a Participant during any given Plan year. If a person terminates employment with a right to a vested benefit under a qualified plan maintained by the Company or an affiliate, and if the actual income for pension purposes was reduced because of a cash deferral under this Plan, the Company will provide a supplemental pension equal to the difference between the actual benefit payable from the pension plan and the benefit that such Participant would have been received had income not been deferred. If such a supplemental benefit is due, such benefit would be subject to all of the provisions and in accordance with the terms and conditions of the Supplemental Retirement Plan of General Mills, Inc. This supplemental retirement benefit will not apply to Participants who terminate before becoming vested under the qualified pension plan.

12. NON-ASSIGNABILITY OF INTERESTS

The interests herein and the right to receive distributions under this Plan may not be anticipated, alienated, sold, transferred, assigned, pledged, encumbered, or

subjected to any charge or legal process, and if any attempt is made to do so, or a Participant becomes bankrupt, the interests of the Participant under the Plan may be terminated by the Minor Amendment Committee, which, in its sole discretion, may cause the same to be held or applied for the benefit of one or more of the dependents of such Participant or make any other disposition of such interests that it deems appropriate. Notwithstanding the foregoing, in the event a Participant has received an overpayment from the Supplemental Retirement Plan of General Mills, Inc. and has failed to repay such amounts upon written demand of the Company, the Company shall be authorized and empowered, at the discretion of the Company, to deduct such amount from the Participant's Deferred Cash Account(s).

13. AMENDMENTS TO PLAN

The Company, or if specifically delegated, its delegate, reserves the right to suspend, amend or otherwise modify or terminate this Plan at any time, without notice. However, this Plan may not be suspended, amended, otherwise modified, or terminated after a Change in Control without the written consent of a majority of Participants determined as of the day before such Change in Control occurs. A "Change in Control" means:

(i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "1934 Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of voting securities of the Company where such acquisition causes such Person to own 20% or more of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not be deemed to result in a Change in Control: (a) any acquisition directly from the Company, (b) any acquisition by the Company, (c) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (d) any acquisition by any corporation pursuant to a transaction that complies with clauses (a), (b), and
(c) of subsection (iii) below; and provided, further, that if any Person's beneficial ownership of the Outstanding Company Voting Securities reaches or exceeds 20% as a result of a transaction described in clause (a) or (b) above, and such Person subsequently acquires beneficial ownership of additional voting securities of the Company, such subsequent acquisition shall be treated as an acquisition that causes such Person to own 20% or more of the Outstanding Company Voting Securities; or

(ii) Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such

individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(iii) The approval by the shareholders of the Company of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company ("Business Combination") or, if consummation of such Business Combination is subject, at the time of such approval by shareholders, to the consent of any government or governmental agency, the obtaining of such consent (either explicitly or implicitly by consummation); excluding, however, such a Business Combination pursuant to which (a) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business combination of the Outstanding Company Voting Securities, (b) 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 (c) 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

(iv) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

Notwithstanding any other provision of this Plan to the contrary and except as provided in Section 3(i), the Minor Amendment Committee may, in its sole discretion, direct that distributions be made before such distributions are otherwise due to be made if, for any reason (including, but not limited to a change in the tax or revenue laws of the United States of America, a published ruling or similar announcement issued by the Internal Revenue Service, a regulation issued by the Secretary of the Treasury or his delegate, or a decision by a court of competent jurisdiction involving a Participant or beneficiary), such Committee believes that Participants or their beneficiaries have recognized or

will recognize income for federal income tax purposes with respect to distributions that are or will be distributed to such Participants under the Plan before such distributions are scheduled to be paid. In making this determination, the Minor Amendment Committee shall take into account the hardship that would be imposed on Participants or their beneficiaries by the payment of federal income taxes under such circumstances.

14. ARBITRATION

(i) Any controversy or claim arising out of or relating to this Plan, or any alleged breach of the terms or conditions contained herein, shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the "AAA") as such rules may be modified herein.

(ii) An award rendered in connection with an arbitration pursuant to this Section shall be final and binding and judgment upon such an award may be entered and enforced in any court of competent jurisdiction.

(iii) The forum for arbitration under this Plan shall be Minneapolis, Minnesota and the governing law for such arbitration shall be laws of the State of Minnesota.

(iv) Arbitration under this Section shall be conducted by a single arbitrator selected jointly by the Company and the Participant or Beneficiary, as applicable (the "Complainant"). If within thirty (30) days after a demand for arbitration is made, the Company and the Complainant are unable to agree on a single arbitrator, three arbitrators shall be appointed. Each party shall select one arbitrator and those two arbitrators shall then select a third neutral arbitrator within thirty (30) days after their appointment. In connection with the selection of the third arbitrator, consideration shall be given to familiarity with executive compensation plans and experience in dispute resolution between parties, as a judge or otherwise. If the arbitrators selected by the parties cannot agree on the third arbitrator, they shall discuss the qualifications of such third arbitrator with the AAA prior to selection of such arbitrator, which selection shall be in accordance with the Commercial Arbitration Rules of the AAA.

(v) If an arbitrator cannot continue to serve, a successor to an arbitrator selected by a party shall be also selected by the same party, and a successor to a neutral arbitrator shall be selected as specified in subsection (d) of this Section. A full rehearing will be held only if the neutral arbitrator is unable to continue to serve or if the remaining arbitrators unanimously agree that such a rehearing is appropriate.

(vi) The arbitrator or arbitrators shall be guided, but not bound, by the Federal Rules of Evidence and by the procedural rules, including discovery provisions, of the Federal Rules of Civil Procedure. Any discovery shall be limited to information directly relevant to the controversy or claim in arbitration.

(vii) The parties shall each be responsible for their own costs and expenses, except for the fees and expenses of the arbitrators, which shall be shared equally by the Company and the Complainant.

15. EFFECTIVE DATE AND PLAN YEAR

This Plan became effective as of May 1, 1984. It shall operate on a calendar year basis thereafter. The Plan was amended and restated effective as of January 1, 1986; and amended as of February 9, 1987; July 1, 1987; June 21, 1990; April 29, 1991; May 1, 1991; November 15, 1991; December 15, 1992, December 1, 1994, January 1, 1995, June 3, 1996, November 7, 1996, March 31, 1998 and December 1, 1999. The Plan has been amended and restated effective as of January 1, 2001.

EXHIBIT 10.16

PROTOCOL OF CEREAL PARTNERS WORLDWIDE

FIRST. General Mills and Nestle have identified a common area of interest in developing together the business of breakfast cereals outside of North America and Japan, starting in Europe.

SECOND. General Mills is a diversified consumer foods and restaurant business that has developed a strong, successful breakfast cereal business in North America. It recently captured the number one position with Cheerios brand.

THIRD. Nestle, a diversified food business, has operations in over 60 countries, and amongst its portfolio of branded leading food products has been traditionally selling in most countries outside North America and the U.K., infant weaning cereals where it enjoys leadership. Nestle has recently entered the breakfast cereal market in Europe and some selected countries overseas.

FOURTH. Both companies recognize the following:

(a) Potential growth opportunities above average in many countries outside North America and particularly in Europe.

(b) Both companies, apart from non-significant exceptions, do not compete directly in the food business on a geographical basis.

(c) General Mills' long-standing successful breakfast cereal technological and marketing know-how with strong product brands in North America which can be globalised.

(d) Nestle's long-standing and successful worldwide manufacturing and marketing organisation, selling top quality food products under the strong Nestle endorsement name; also its recent entry into breakfast cereals.

(e) Strong and dedicated R&D activities of both companies in the areas of food and nutrition.

FIFTH. General Mills has been offered the possibility on a strictly confidential basis by RHM to make a private bid for the cereals business, part of which was recently acquired in the U.K. from RJR Nabisco. General Mills will endeavor to obtain permission from RHM to share with Nestle available data and other information pertaining to the possible acquisition.

Both companies will decide within an estimated 3 to 4 weeks period to make or not a bid if they agree on an acceptable price

range, in which case the purchase will be done and the RHM cereal business would be integrated in the joint venture "Cereals Partners Europe."

However, it is agreed that if the acquisition from RHM does not materialize, this should not in any circumstances impinge on the agreement concerning the contemplated joint venture.

THEREFORE, in order to successfully exploit their complementary natures, the companies intend to enter into a general agreement covering the following:

1. Establishment of a worldwide cereal joint venture ("JV") covering all countries in the world with the exception of the USA, Puerto Rico, U.S. territories, Canada and Japan.

(a) As a first step, the JV will enter Europe (EEC and EFTA countries including possible ventures in countries of Eastern Europe currently outside these territories).

(b) As subsequent steps, the JV will enter other countries or territories sequentially as feasible.

(c) The partners will discuss an approach for Japan.

(d) The exact form of cooperation between General Mills and Nestle in the following countries where Nestle has already a breakfast cereals business commitment will be further agreed upon between the two parties: Malaysia, India, Chile, Zimbabwe and Tunisia.

2. Purposes of the joint venture:

(a) To become a significant player in the fast growing worldwide breakfast cereal business, and

(b) To exploit the strength and complementary nature of both partners to successfully build a viable, sizeable business against strong competitors.

3. Nature of agreement:

(a) A 50/50 JV by combining the respective knowledge and know-how related to the business to facilitate the efficient manufacturing, marketing and selling of breakfast cereals.

(b) The JV shall be organised as mutually agreed based upon business considerations and other matters including legal and tax.

(c) The JV shall be physically separated from the main flow of both partners, with a management fully responsible and accountable for its operations and reporting to a board as defined below.

(d) The defined field of the business is the following:

Breakfast cereals, defined as all family, child and adult ready-to-eat and hot cereals excluding infant weaning cereals defined as dry or wet cereal-based products intended for infants and children not more than 3 years of age normally prepared as paps diluted in liquids. Excluded unless agreed upon at a later date are grain-based products presented in the form of snack bars and the like.

(e) The parties shall share equally in the initial and on-going investment required by the JV.

(f) All acquisitions in the defined product range and territory originating from one of the partners shall be offered to the other partner to be part of the JV or shared equally by both parties. If the partner being offered does not want or is unable to accept for reasons other than price, then that party will exclude itself from entering the breakfast cereal market in that country.

4. Nature of Board of Directors:

General Mills and Nestle agree to establish a supervisory Board in order to coordinate business activities, set the policies and authorize strategies, plans and budgets proposed by the CEO and resolve possible conflicts.

The Board shall consist of an even number of members not to exceed six. General Mills and Nestle shall each be entitled to elect one half of the members. In the event a member resigns or becomes unable to serve, the parties agree that before taking any further action, a new member will be elected within 90 days by the party whose member has resigned. Neither the CEO nor any JV employee shall be a Board member.

Each party will appoint a Co-Chairman of the Board. The Co-Chairmen will alternate in chairing the Board meetings. Minutes shall be kept for all Board meetings and be approved by the Board.

The meetings of the Board shall be held at such times and such places as may from time to time be decided by the

Board; however, it should meet initially at least three times a year.

Each member may be accompanied at Board meetings by any special advisor deemed necessary.

All possible conflicts should be solved in earnest and good faith for the exclusive benefit of the JV. However, in case of a necessary arbitration, the Board will submit the matter to the CEO's of both companies. A detailed arbitration procedure will be established by both companies in common agreement.

The Board will elect the Key Executives of the JV and determine their conditions of employment.

The Board will also review and approve:

(a) Establishment of overall strategic objectives.

(b) Long-term plans of the JV.

(c) Capital, finance and operating budgets.

(d) Research and Development budget plans to be farmed out to the parties.

(e) Acquisitions and divestments.

(f) Application of trademarks - brands - their utilization by the JV.

(g) Bonuses and long-term incentive programmes.

(h) Yearly results and proposed use of cash and profits.

5. Nature of Management:

It will be a responsibility of the JV management to define business objectives, strategies, long and short term plans and budgets to be approved by the Board. The execution of such plans within certain boundaries set by the Board will be the sole responsibility of the JV management.

To initially form the JV, the Board will select a CEO with the proper qualifications to manage the European business and who may be proposed by either JV partner. The partner who did not propose the selected CEO candidate will propose the CFO candidate to be selected. General Mills will propose to the Board marketing and technical management candidates fully qualified in the cereal business. Nestle will propose to the Board sales, distribution and manufacturing

candidates who are fully qualified. It is contemplated that the marketing staff will include people from each partner.

EUROPEAN OPERATIONS

In order to begin JV operations starting in Europe, General Mills will provide its long-standing breakfast cereal technological and marketing know-how and strong product brand names to the JV at no cost. Likewise Nestle will provide its strong Nestle endorsement name, its breakfast cereal brand names and its marketing and technological know-how to the JV at no cost.

Initially, the European operations of the JV will comprise the present Nestle manufacturing operations for breakfast cereals as well as such facilities as may be acquired by the JV from RHM. In principle, initially the JV will preferably use Nestle's selling and physical distribution organization within Europe unless other alternatives are more suitable. For this purpose the JV will enter into an agreement with Nestle to purchase the physical distribution service at cost. The selling service will be purchased at cost plus an appropriate sales incentive.

Existing Nestle breakfast cereals' European fixed assets shall be transferred to the JV at true asset value. If agreement on true asset value cannot be reached by the parties, Peat Marwick Main & Co. will evaluate the assets independently and both parties will accept their valuation. If other related Nestle fixed assets needed for the JV cannot be physically separated for JV ownership, the JV will enter into an arm's length agreement with Nestle on a fiscally acceptable cost basis.

Products supplied by either party to the JV will be invoiced at a fiscally acceptable cost plus basis.

BRANDS

It is the intention to use Nestle as the endorsement for all products. General Mills' and Nestle's strong product brand names will be used and agreed upon according to what is in the best interest of the JV. Visual properties of both company brands would be harmonised while respecting individual logos, etc.

In view of the exclusive arrangement of Nestle with EuroDisney, the JV would use such licensed characters as appropriate within the agreement signed by Nestle and Disney.

EXPORTS

Exports made to other than European countries will be the subject of future agreements between the parties.

ACCOUNTING MATTERS

The JV will establish accounting systems and procedures to meet its and the partners' needs.

The JV will reimburse the partners for services other than those mentioned in the second paragraph of the European Operations section on page 4 hereof, provided to the JV on a fiscally acceptable cost basis; e.g., legal, accounting, product development, technical resources, market research, etc.

The partners recognize the need for flexibility to minimize taxes and fiscally required payments of each party shall be balanced.

PRESS RELEASE

Both parties will conform to the wording and schedule of agreed-to press releases.

DURATION

1. This agreement is intended to be perpetual.

2. Neither partner may sell or assign its interest to a third party.

FURTHER AGREEMENTS - To be executed with this Protocol

1. The Confidentiality Agreement covering exchange of technical information between General Mills and Nestle necessary to agree upon and form the JV (Annex "A").

2. Agreement by Nestle covering non-disclosure of RHM information ("Annex B").

3. Agreements by Nestle and General Mills not to engage in any activity which is directly or indirectly an attempt to take-over the other party (Annex "C").

FORMAL JOINT VENTURE AGREEMENT

This Agreement is to be executed on or before January 15, 1990.

AGREEMENTS SUBSIDIARY TO THE JOINT VENTURE AGREEMENT

1. Agreements providing for the transfer of technology (patents and know-how) relating to breakfast cereals from the partners to the JV. Such agreements will provide that neither the JV nor Nestle may use breakfast cereal technology in the USA, its territories, Canada or Japan.

2. Agreements by both partners on the use of trademarks covering "Nestle" as an endorsement and the use of product brands presently used by Nestle on breakfast cereals and reciprocally General Mills' trademarks defined as product brands used by the latter in North America and elsewhere.

3. R&D general agreements between both partners whereby future know how of the partners relating to breakfast cereals will be shared in common for all subsequent R&D projects.

Executed this 21 day of November, 1989.

NESTLE S.A.                               GENERAL MILLS, INC.

By  /s/ Camillo Pagano                    By  /s/ H. B. Atwater, Jr.
  -----------------------------             ------------------------------------
                                             Chairman and Chief Executive
                                             Officer

ANNEX C
OUTLINE OF MUTUAL "STANDSTILL" AGREEMENTS

Each party will agree not to acquire or offer to acquire the stock or assets of the other party, nor engage in a proxy contest to gain control of the other party, whether alone or in concert with others.

These agreements will extend for the longer of: ten years from the date of the agreements; or ten years from the date the JV is dissolved or the structure of the JV is materially changed.

ADDENDUM NO. 1 TO THE
PROTOCOL OF CEREAL PARTNERS WORLDWIDE

THIS ADDENDUM NO. 1 is to the Protocol of Cereal Partners Worldwide between General Mills, Inc. and Nestle S.A. (the "Partners"), executed on the 21st day of November, 1989. Upon execution hereof this Addendum shall become an integral part of the Protocol, and the parties hereto agree that the Protocol, this Addendum, and any subsequent addendums hereto shall constitute the Formal Joint Venture Agreement contemplated to be executed by the parties on or before January 15, 1990.

FORMATION OF MANAGEMENT COMPANY

The Partners agree that a management company shall be legally formed under the laws of Switzerland with a physical location in the Canton of Vaud. The name of this Swiss company may possibly be "CEREAL PARTNERS WORLDWIDE" or "CPW" or the translation in French of "CEREAL PARTNERS WORLDWIDE" ("CPW"). CPW is to be incorporated on or before June 1, 1990.

CEREAL BUSINESSES IN GERMANY, FRANCE, SPAIN AND PORTUGAL

It is agreed that the present Nestle cereal businesses in Germany, France, Spain and Portugal are to be transferred to the responsibility of the JV on June 1, 1990 under the various "Subsidiary Agreements" referred to hereafter in this Addendum. Notwithstanding that the legal structure of the JV in France, Spain and Portugal is being studied at this time, CPW will have full operational authority and responsibility for the above cereal businesses beginning June 1, 1990.

SUBSIDIARY AGREEMENTS FOR GERMANY, FRANCE, SPAIN AND PORTUGAL

To most efficiently begin the JV operations in Germany, France, Spain and Portugal on June 1, 1990, it is anticipated that some or all of the following agreements in some form will be necessary:

1. Co-pack Agreements

2. Distribution Agreements

3. Technology and Trademark License Agreements

4. Management Agreements

The preceding agreements, all to be effective June 1, 1990, shall be between Nestle S.A. or General Mills, Inc. and the affiliated companies or entities of the JV, e.g., CPW and whatever legal entities are formed for the cereal businesses of

Germany, France, Spain and Portugal, and subsidiary companies of Nestle S.A. or General Mills, Inc. located in these countries.

Notwithstanding that the JV will become operational on June 1, 1990 under the preceding agreements, General Mills, Inc. also agrees that upon written notice from Nestle S.A., the existing Nestle S.A. breakfast cereals' European fixed assets shall be transferred to the JV in accordance with the provisions of the third paragraph of EUROPEAN OPERATIONS of the Protocol.

ARBITRATION

Any "material dispute" which may arise between Nestle S.A. and General Mills, Inc. concerning any aspect of the JV, the Protocol, or any matter related thereto, including, but not limited to the interpretation, the implementation, or the termination of the JV, shall be submitted for mediation and resolution to the respective chief executive officer of General Mills, Inc. and Nestle S.A. A "material dispute" shall mean any disagreement or impasse or failure to take any action by Nestle S.A. or General Mills, Inc., or any of the companies or entities associated with the JV, which will have a substantial negative consequence in the operation of the JV. If such a "material dispute" is not resolved within 60 days after submission to the chief executive officers of General Mills, Inc. and Nestle S.A., the dispute, including a decision as to whether or not the dispute is material, shall be resolved by arbitration pursuant to the Rules of Conciliation and Arbitration of the International Chamber of Commerce, which arbitration shall take place in the City of London. Notwithstanding such rules, it is agreed that the arbitrators shall be three in number, one of whom shall be chosen by Nestle S.A., the second by General Mills, Inc., and the third shall be chosen by the two arbitrators designated by Nestle S.A. and General Mills, Inc. The arbitration proceedings shall be conducted in the English language, but documents shall be submitted in the language of the original with translations thereof being provided to the arbitrators. Judgment by the International Chamber of Commerce shall be final and not subject to any appeal, and the award thereof, if necessary, may be entered into any court of competent jurisdiction of any country.

TERMINATION

The JV envisioned and delineated by the Protocol shall continue until December 31, 2040, unless terminated by the mutual written consent of General Mills, Inc. and Nestle S.A. prior thereto, or by the provisions under LIQUIDATION. Notwithstanding the date of December 31, 2040, the JV shall be automatically extended for additional consecutive 10-year periods, subject that either Nestle S.A. or General Mills, Inc., by written notice to the other at least three years prior to December 31, 2040, or any

renewal date, gives notice that the JV shall not be continued or renewed.

MATERIAL BREACH

In addition to the JV terminating pursuant to the provisions of TERMINATION, the JV may also terminate upon a "material breach" by Nestle S.A. or General Mills, Inc., or any affiliated company or entity carrying out any aspect of the JV which is not cured. A "material breach" shall be defined in the same manner as a "material dispute," and if there is disagreement as to whether or not a "material breach" has occurred, this matter shall be resolved or arbitrated in accordance with the provisions of ARBITRATION. In the event that any entity or party to the JV wishes to assert that a material breach has occurred, written notice thereof shall be given to the chief executive officer of either Nestle S.A. or General Mills, Inc., and the notified party shall be given a period of 60 days in which to cure or rectify such material breach. If it is impossible to rectify or cure such material breach within the said 60 day period, it shall nevertheless be deemed to have been rectified or cured if the notified party provides a financial bond or other financial guaranty which will assure that the costs of curing or rectifying the "material breach" will be met.

MATERIAL CHANGE OF CIRCUMSTANCES

A "material change of circumstances" shall be deemed to be an event or events which, absent termination of the JV, will cause a material inequity to occur to Nestle S.A. or General Mills, Inc., or any affiliated entity or company thereof, not including a JV entity (the "affected party"). A material change of circumstances would be one which was not contemplated by the parties hereto to occur as of the date hereof and which will have the consequence of materially changing the manner in which the JV is to be conducted or in the characteristics, including the corporate structure, of either Nestle S.A. or General Mills, Inc. If a material change of circumstances has occurred, Nestle S.A. or General Mills, Inc. as the "affected party," that is the party not incurring the material change of circumstances, shall have the right to purchase the other party's interest in the JV at an equitable price subject that all other relationships between the parties (e.g., licenses) also are resolved on an equitable basis. In the event that Nestle S.A. and General Mills, Inc. are not in agreement that an event has occurred which constitutes a "material change of circumstances," or there is not agreement as to the price at which one party may purchase the other party's interest in the JV or the settlement of other rights, such disagreement shall be subject to ARBITRATION as herein provided.

LIQUIDATION

In the event that the JV is to be terminated under any of the provisions of the Protocol, Nestle S.A. and General Mills,

Inc. will negotiate in the utmost good faith a termination of the companies and entities comprising the JV under the following principles:

1. If the businesses of the JV, or any part thereof, are to be discontinued, the assets thereof shall be applied first to the payment of the associated liabilities, then to the expenses of such liquidation, and any net remainder shall be distributed equally to Nestle S.A. or General Mills, Inc., or the assigns thereof.

2. Intellectual property transferred or licensed to the company or entity which is to be liquidated shall be reassigned or transferred to the entity which was the transferor of the intellectual property.

3. Intellectual property that has been developed solely by any company or entity of the JV, or is the sole and exclusive property of such entity or company under contract, shall be distributed to Nestle S.A. and General Mills, Inc. (or the assigns thereof) in shares that are as equal as practical under the circumstances, taking into account the fair value of such intellectual property. It is agreed that if either Nestle S.A. or General Mills, Inc. pursuant to this provision receives the exclusive title or right to such intellectual property, such party will grant to the other party of the JV an irrevocable, royalty-free license without limitation as to term, with full rights to sublicense to any company or entity which is directly or indirectly owned or controlled by Nestle S.A. or General Mills, Inc.

4. In the event that the parties are unable to agree upon the manner in which any of the preceding principles of termination are to be effected or resolved, the matter shall be submitted for resolution pursuant to ARBITRATION as herein provided.

EXECUTED THIS 9th day of February, 1990.

NESTLE S.A.

By  /s/ Ramon Masip
  ------------------------------------

Its Executive Vice President
   -----------------------------------

GENERAL MILLS, INC.

By  /s/ Mark H. Willes
  ------------------------------------

Its   President
   -----------------------------------