x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED August 29, 2010 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______ TO _______ |
Delaware | 41-0274440 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
Number One General Mills Boulevard | ||
Minneapolis, Minnesota | 55426 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer x | Accelerated filer o |
Non-accelerated o (Do not check if a smaller reporting company) | Smaller reporting company o |
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32
Item 1.
Financial Statements
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)
Quarter Ended
Aug. 29,
Aug. 30,
2010
2009
$
3,533.1
$
3,482.4
2,008.8
2,041.6
762.9
748.7
1.0
(0.8
)
760.4
692.9
90.3
91.9
670.1
601.0
223.0
203.2
26.5
24.2
473.6
422.0
1.5
1.4
$
472.1
$
420.6
$
0.73
$
0.64
$
0.70
$
0.62
$
0.28
$
0.24
Table of Contents
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except Par Value)
Table of Contents
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)
$.10 Par Value Common Stock
(One Billion Shares Authorized)
Issued
Treasury
Accumulated
Additional
Other
Par
Paid-In
Retained
Comprehensive
Noncontrolling
Shares
Amount
Capital
Shares
Amount
Earnings
Income (Loss)
Interests
Total
754.6
$
75.5
$
1,212.1
(98.6
)
$
(2,473.1
)
$
7,235.6
$
(877.8
)
$
244.2
$
5,416.5
1,530.5
4.5
1,535.0
(609.1
)
0.2
(608.9
)
926.1
(643.7
)
(643.7
)
53.3
21.8
549.7
603.0
(21.3
)
(691.8
)
(691.8
)
(65.6
)
(65.6
)
(3.8
)
(3.8
)
107.3
107.3
754.6
75.5
1,307.1
(98.1
)
(2,615.2
)
8,122.4
(1,486.9
)
245.1
5,648.0
472.1
1.5
473.6
96.0
0.7
96.7
570.3
(184.1
)
(184.1
)
14.9
5.7
150.9
165.8
(21.4
)
(788.4
)
(788.4
)
(77.4
)
(77.4
)
(0.7
)
(0.7
)
37.9
37.9
754.6
$
75.5
$
1,282.5
(113.8
)
$
(3,252.7
)
$
8,410.4
$
(1,390.9
)
$
246.6
$
5,371.4
Table of Contents
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions)
Quarter Ended
Aug. 29,
Aug. 30,
2010
2009
$
473.6
$
422.0
111.3
111.1
(26.5
)
(24.2
)
37.9
37.5
22.4
12.5
(35.0
)
(14.7
)
21.5
16.8
(2.4
)
(2.2
)
18.3
(1.8
)
(1.0
)
(0.7
)
(406.1
)
(298.8
)
(36.4
)
17.6
177.6
275.1
(132.6
)
(126.3
)
(1.9
)
0.8
1.8
5.7
12.5
2.7
(120.2
)
(117.1
)
299.0
101.4
500.0
(1.8
)
(2.1
)
88.1
75.4
35.0
14.7
(788.4
)
(233.9
)
(184.1
)
(156.2
)
(5.1
)
(57.3
)
(200.7
)
23.7
4.5
23.8
(38.2
)
673.2
749.8
$
697.0
$
711.6
$
(121.1
)
$
(181.0
)
(316.0
)
(297.4
)
(6.0
)
94.5
76.1
44.1
(39.1
)
41.0
$
(406.1
)
$
(298.8
)
Table of Contents
Table of Contents
Bakeries and
Joint
In Millions
U.S. Retail
International
Foodservice
Ventures
Total
$
5,098.3
$
122.0
$
923.0
$
449.5
$
6,592.8
2.8
17.9
20.7
$
5,098.3
$
124.8
$
923.0
$
467.4
$
6,613.5
Joint
In Millions
U.S. Retail
International
Ventures
Total
$
3,206.6
$
445.3
$
63.1
$
3,715.0
(0.9
)
13.1
0.5
12.7
$
3,205.7
$
458.4
$
63.6
$
3,727.7
Aug. 29,
May 30,
In Millions
2010
2010
$
288.2
$
247.5
1,360.0
1,131.4
158.6
107.4
(141.6
)
(142.3
)
$
1,665.2
$
1,344.0
Table of Contents
Cost
Market Value
Gross Gains
Gross Losses
Aug. 29,
May 30,
Aug. 29,
May 30,
Aug. 29,
May 30,
Aug. 29,
May 30,
In Millions
2010
2010
2010
2010
2010
2010
2010
2010
$
11.6
$
11.8
$
11.8
$
11.9
$
0.2
$
0.1
$
$
6.5
6.1
14.0
15.5
7.6
9.4
0.1
$
18.1
$
17.9
$
25.8
$
27.4
$
7.8
$
9.5
$
0.1
$
Available for Sale
Market
In Millions
Cost
Value
$
5.2
$
5.2
0.4
0.4
4.9
5.0
1.1
1.2
6.5
14.0
$
18.1
$
25.8
Table of Contents
Quarter Ended
Aug. 29,
Aug. 30,
In Millions
2010
2009
$
40.1
$
(28.7
)
7.2
26.5
24.6
(12.6
)
$
71.9
$
(14.8
)
Table of Contents
Aug. 29,
May 30,
In Millions
2010
2010
$
2,155.6
$
2,155.6
4.8
%
4.8
%
0.3
%
0.3
%
$
1,600.0
$
1,600.0
0.3
%
0.3
%
7.3
%
7.3
%
In Millions
Pay Floating
Pay Fixed
$
17.6
$
1,603.4
850.0
534.6
750.0
$
2,155.6
$
1,600.0
Table of Contents
Unadjusted quoted prices in active markets for identical assets or liabilities.
Observable inputs other than quoted prices included in Level 1, such as quoted
prices for similar assets or liabilities in active markets or quoted prices for identical
assets or liabilities in inactive markets.
Unobservable inputs reflecting managements assumptions about the inputs used in
pricing the asset or liability.
Fair Values of Assets
Fair Values of Liabilities
In Millions
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
$
$
11.7
$
$
11.7
$
$
$
$
6.4
6.4
(13.3
)
(13.3
)
18.1
18.1
(13.3
)
(13.3
)
117.1
117.1
(154.3
)
(154.3
)
6.0
6.0
(1.1
)
(1.1
)
8.2
7.7
15.9
(3.7
)
(3.7
)
8.2
130.8
139.0
(159.1
)
(159.1
)
14.0
11.8
25.8
58.2
58.2
(24.5
)
(24.5
)
14.0
70.0
84.0
(24.5
)
(24.5
)
$
22.2
$
218.9
$
$
241.1
$
$
(196.9
)
$
$
(196.9
)
(a)
These contracts and investments are recorded as other assets or as other liabilities, as
appropriate, based on whether in a gain or loss position. Certain marketable investments are
recorded as cash and cash equivalents.
(b)
Based on LIBOR and swap rates.
(c)
These contracts are recorded as prepaid expenses and other current assets or as other current
liabilities, as appropriate, based on whether in a gain or loss position.
(d)
Based on observable market transactions of spot currency rates and forward currency prices.
(e)
Based on prices of futures exchanges and recently reported transactions in the marketplace.
(f)
Based on prices of common stock and bond matrix pricing.
Table of Contents
Interest Rate
Foreign Exchange
Commodity
Contracts
Contracts
Equity Contracts
Contracts
Total
Quarter Ended
Quarter Ended
Quarter Ended
Quarter Ended
Quarter Ended
Aug. 29,
Aug. 30,
Aug. 29,
Aug. 30,
Aug. 29,
Aug. 30,
Aug. 29,
Aug. 30,
Aug. 29,
Aug. 30,
In Millions
2010
2009
2010
2009
2010
2009
2010
2009
2010
2009
$
$
0.4
$
(7.4
)
$
(2.0
)
$
$
$
$
$
(7.4
)
$
(1.6
)
(loss) reclassified from
AOCI into earnings (a) (b)
(3.3
)
(3.8
)
(5.6
)
3.3
(8.9
)
(0.5
)
recognized in earnings (c) (d)
0.3
(0.2
)
0.3
(0.2
)
(4.2
)
2.5
(3.6
)
0.1
(28.7
)
(7.8
)
(26.1
)
(a)
Effective portion.
(b)
Gain (loss) reclassified from AOCI into earnings is reported in interest, net for interest
rate swaps and in cost of sales and SG&A expenses for foreign exchange contracts.
(c)
All gain (loss) recognized in earnings is related to the ineffective portion of the hedging
relationship. No amounts were reported as a result of being excluded from the assessment of
hedge effectiveness.
(d)
Loss recognized in earnings is reported in SG&A expenses for foreign exchange contracts.
(e)
Gain (loss) recognized in earnings is reported in interest, net for interest rate contracts,
in cost of sales for commodity contracts, and in SG&A expenses for equity contracts and
foreign exchange contracts.
Table of Contents
Aug. 29,
May 30,
In Millions
2010
2010
$
1,239.4
$
973.0
10.3
100.1
77.1
$
1,349.8
$
1,050.1
Table of Contents
Quarter Ended
Quarter Ended
Aug. 29, 2010
Aug. 30, 2009
In Millions
Pretax
Tax
Net
Pretax
Tax
Net
$
472.1
$
420.6
1.5
1.4
$
473.6
$
422.0
$
82.1
$
$
82.1
$
38.6
$
$
38.6
(2.0
)
0.7
(1.3
)
0.3
(0.1
)
0.2
(7.4
)
0.1
(7.3
)
(1.6
)
(0.2
)
(1.8
)
8.9
(3.4
)
5.5
0.5
(0.2
)
0.3
27.3
(10.3
)
17.0
4.6
(1.8
)
2.8
108.9
(12.9
)
96.0
42.4
(2.3
)
40.1
0.7
0.7
0.2
0.2
$
109.6
$
(12.9
)
$
96.7
$
42.6
$
(2.3
)
$
40.3
$
570.3
$
462.3
Aug. 29,
May 30,
In Millions
2010
2010
$
277.0
$
194.9
4.3
5.6
(30.7
)
(28.9
)
(1,609.3
)
(1,611.0
)
(32.2
)
(47.5
)
$
(1,390.9
)
$
(1,486.9
)
Table of Contents
Quarter Ended
Aug. 29,
Aug. 30,
In Millions
2010
2009
$
56.6
$
59.0
Quarter Ended
Aug. 29,
Aug. 30,
In Millions
2010
2009
$
88.3
$
75.4
$
70.0
$
36.3
Quarter Ended
Aug. 29,
Aug. 30,
2010
2009
$
4.08
$
$3.18
3.0
%
3.7
%
8.5 years
8.5 years
18.5
%
18.9
%
3.0
%
3.4
%
Table of Contents
Weighted-
Weighted-
Average
Aggregate
Average
Remaining
Intrinsic
Options
Exercise
Contractual
Value
(Thousands)
Price
Term (Years)
(Millions)
81,104.6
$
25.17
5,073.8
37.40
(4,431.0
)
21.04
(18.1
)
28.14
81,729.3
$
26.15
4.85
$
812.2
53,229.5
$
23.57
3.13
$
662.2
Equity Classified
Liability Classified
Share-
Weighted-
Share-
Weighted-
Cash-Settled
Weighted-
Settled
Average
Settled
Average
Share-Based
Average
Units
Grant-Date
Units
Grant-Date
Units
Grant-Date
(Thousands)
Fair Value
(Thousands)
Fair Value
(Thousands)
Fair Value
10,209.8
$
28.49
424.3
$
28.64
3,703.7
$
29.65
2,133.6
37.38
111.4
37.40
1,200.7
37.40
(2,596.4
)
26.10
(71.5
)
28.99
(76.9
)
31.48
(105.3
)
31.25
(24.8
)
28.10
(92.7
)
30.32
9,641.7
$
31.06
439.4
$
30.83
4,734.8
$
31.57
Table of Contents
Quarter Ended
Aug. 29,
Aug. 30,
In Millions, Except per Share Data
2010
2009
$
472.1
$
420.6
647.3
653.0
17.8
14.6
6.8
5.2
671.9
672.8
$
0.73
$
0.64
$
0.70
$
0.62
(a)
Incremental shares from stock options and restricted stock units are computed by the treasury
stock method. Stock options and restricted stock units excluded from our computation of
diluted EPS because they were not dilutive were as follows:
Quarter Ended
Aug. 29,
Aug. 30,
In Millions
2010
2009
5.1
20.8
Quarter Ended
Aug. 29,
Aug. 30,
Expense (Income), in Millions
2010
2009
$
93.8
$
95.3
(2.1
)
(1.1
)
(1.4
)
(2.3
)
$
90.3
$
91.9
Table of Contents
Defined Benefit
Other Postretirement
Postemployment
Pension Plans
Benefit Plans
Benefit Plans
Quarter Ended
Quarter Ended
Quarter Ended
Aug. 29,
Aug. 30,
Aug. 29,
Aug. 30,
Aug. 29,
Aug. 30,
In Millions
2010
2009
2010
2009
2010
2009
$
25.4
$
17.7
$
4.6
$
3.2
$
2.0
$
1.8
57.6
57.6
15.0
15.4
1.3
1.4
(102.2
)
(99.8
)
(8.3
)
(7.3
)
20.4
2.0
3.6
0.5
0.5
0.2
2.3
1.7
(0.1
)
(0.4
)
0.6
0.6
2.0
2.5
$
3.5
$
(20.8
)
$
14.8
$
11.4
$
6.4
$
6.5
Table of Contents
Quarter Ended
Aug. 29,
Aug. 30,
In Millions
2010
2009
$
2,446.6
$
2,399.6
659.8
656.9
426.7
425.9
$
3,533.1
$
3,482.4
$
614.6
$
634.3
62.0
62.9
72.5
65.2
749.1
762.4
(12.3
)
70.3
1.0
(0.8
)
$
760.4
$
692.9
Table of Contents
Item 2.
Managements Discussion and Analysis of Financial Condition and Results of Operations.
First Quarter of Fiscal 2011 vs.
Bakeries and
Combined
First Quarter of Fiscal 2010
U.S. Retail
International
Foodservice
Segments
1 pt
4 pts
3 pts
2 pts
1 pt
Flat
-3 pts
Flat
NA
-4 pts
Flat
-1 pt
2 pts
Flat
Flat
1 pt
(a)
Measured in tons based on the stated weight of our product shipments.
Table of Contents
Quarter Ended
Aug. 29,
2010
4
%
3
(3
)
4
5
(6
)
15
2
%
Table of Contents
Quarter Ended
Aug. 29,
2010
(2
) %
6
11
(19
)
Flat
Quarter Ended
Aug. 29,
2010
1
%
15
(3
)
Flat
Table of Contents
Aug. 29,
May 30,
In Millions
2010
2010
$
1,349.8
$
1,050.1
107.3
107.3
5,771.6
5,268.5
7,228.7
6,425.9
246.6
245.1
5,124.8
5,402.9
$
12,600.1
$
12,073.9
Table of Contents
Table of Contents
Quarter Ended
Aug. 29,
Aug. 30,
Per Share Data
2010
2009
$
0.70
$
0.62
(0.06
)
0.02
$
0.64
$
0.64
(a)
Net (gain) loss from mark-to-market valuation of certain commodity positions and grain
inventories.
Table of Contents
Table of Contents
Item 3.
Quantitative and Qualitative Disclosures About Market Risk.
Item 4.
Controls and Procedures.
Item 1A.
Risk Factors.
Table of Contents
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.
Total
Number
Average
Total Number of
Maximum Number of
of Shares
Price
Shares Purchased as
Shares that may yet be
Purchased
Paid Per
Part of a Publicly
Purchased Under the
Period
(a)
Share
Announced Program (b)
Program (b)
June 27, 2010
13,298,571
$
37.60
13,298,571
(c
)
July 25, 2010
5,241,912
35.93
5,241,912
94,758,088
August 29, 2010
2,840,700
35.21
2,840,700
91,917,388
21,381,183
$
36.87
21,381,183
91,917,388
(a)
These shares were purchased in the open market.
(b)
On June 28, 2010, our Board of Directors approved and we announced an authorization for the
repurchase of up to 100,000,000 shares of our common stock. Purchases can be made in the open
market or in privately negotiated transactions, including the use of call options and other
derivative instruments, Rule 10b5-1 trading plans, and accelerated repurchase programs. The
Board did not specify an expiration date for the authorization.
(c)
Purchases made prior to June 28, 2010 were made pursuant to an authorization adopted by our
Board of Directors on December 11, 2006, and that authorization was terminated on June 28,
2010.
Table of Contents
Item 6.
Exhibits.
10.1
1998 Senior Management Stock Plan.
10.2
2001 Compensation Plan for Non-Employee Directors.
10.3
2003 Stock Compensation Plan.
10.4
2005 Stock Compensation Plan.
10.5
2006 Compensation Plan for Non-Employee Directors.
10.6
2007 Stock Compensation Plan.
10.7
2009 Stock Compensation Plan.
10.8
Executive Incentive Plan.
12.1
Computation of Ratio of Earnings to Fixed Charges
31.1
Certification of Chief Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
31.2
Certification of Chief Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
32.1
Certification of Chief Executive Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
32.2
Certification of Chief Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
101
Financial Statements from the Quarterly Report on Form 10-Q
of the Company for the quarter ended August 29, 2010,
formatted in Extensible Business Reporting Language: (i)
the Consolidated Balance Sheets, (ii) the Consolidated
Statements of Earnings, (iii) the Consolidated Statements
of Total Equity and Comprehensive Income, (iv) the
Consolidated Statements of Cash Flows, and (v) the Notes to
Consolidated Financial Statements.
Table of Contents
GENERAL MILLS, INC.
Date September 22, 2010
/s/ Roderick A. Palmore
Roderick A. Palmore
Executive Vice President,
General Counsel and Secretary
Date September 22, 2010
/s/ Richard O. Lund
Richard O. Lund
Vice President, Controller
(Principal Accounting Officer)
Table of Contents
Exhibit No.
Description
1998 Senior Management Stock Plan.
2001 Compensation Plan for Non-Employee Directors.
2003 Stock Compensation Plan.
2005 Stock Compensation Plan.
2006 Compensation Plan for Non-Employee Directors.
2007 Stock Compensation Plan.
2009 Stock Compensation Plan.
Executive Incentive Plan.
Computation of Ratio of Earnings to Fixed Charges
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Financial Statements from the Quarterly Report on Form 10-Q of the Company for the quarter ended
August 29, 2010, formatted in Extensible
Business Reporting Language: (i) the Consolidated Balance Sheets, (ii) the
Consolidated Statements of Earnings, (iii) the Consolidated Statements of
Total Equity and Comprehensive Income, (iv) the Consolidated Statements of
Cash Flows, and (v) the Notes to Consolidated Financial
Statements.
1. | PURPOSE OF THE PLAN | |
The purpose of the General Mills, Inc. 1998 Senior Management Stock Plan (the Plan) is to attract and retain able employees by rewarding employees of General Mills, Inc., its subsidiaries and affiliates (defined as entities in which General Mills, Inc. has a significant equity or other interest) (collectively, the Company) who are responsible for the growth and sound development of the business of the Company, and to align the interests of employees with those of the stockholders of the Company. | ||
2. | EFFECTIVE DATE AND DURATION OF PLAN | |
This Plan shall become effective as of September 28, 1998, subject to the approval of the stockholders of the Company at the Annual Meeting on September 28, 1998. No Awards were made under the Plan after September 22, 2003. | ||
3. | ELIGIBLE PERSONS | |
Only persons who are employees of the Company shall be eligible to receive grants of Stock Options (defined below) under the Plan. The Compensation Committee of the Companys Board of Directors (the Committee) shall administer the Plan, in accordance with Section 12, and shall exercise the power to determine and designate, from time to time, from among the employees, those who will be granted Stock Options under the Plan and become Participants in the Plan. | ||
4. | AWARD TYPE | |
Under this Plan, the Committee may award Participants options (Stock Options) to purchase common stock of the Company ($.10 par value) (Common Stock). The grant of a Stock Option entitles the Participant to purchase a fixed number of shares of Common Stock at an Exercise Price established by the Committee. The Exercise Price for each share of Common Stock issuable under a Stock Option shall not be less than 100% of the Fair Market Value of the Common Stock on the date of grant. Fair Market Value shall equal the closing price of the Common Stock on the New York Stock Exchange on the date of grant. | ||
5. | STOCK OPTION TERM AND TYPE | |
Stock Options granted under the Plan may be either Non-Qualified Stock Options governed by Section 83 of the Internal Revenue Code of 1986, as amended (the Code) or Incentive Stock Options described in Section 422(b) of the Code. The term of any Stock Option granted under the Plan shall be determined by the Committee, provided that the term of a Non-Qualified Stock Option shall not exceed 10 years and one month and the term of an Incentive Stock Option shall not exceed 10 years. The maximum number of shares that may be issued by Incentive Stock Options granted under the Plan is 15,000,000. | ||
6. | COMMON STOCK SUBJECT TO THE PLAN |
a) | Maximum Shares Available for Delivery . Subject to Section 6(c), the maximum number of shares of Common Stock available for issuance to Participants under the Plan shall be equal to the sum of: |
(i) | 12,600,000; |
(ii) | 2,400,000, being the number of shares of Common Stock still available for grants under the Companys 1993 Stock Option and Long-Term Incentive Plan as of the effective date of this Plan; and | ||
(iii) | any shares of Common Stock subject to Stock Options granted under any prior stockholder approved plan of the Company adopted prior to the effective date of this Plan which are forfeited, expire or are cancelled without the delivery of Common Stock. |
In addition, any Common Stock covered by a Stock Option granted under the Plan, which is forfeited, cancelled or expires in whole or in part shall be deemed not to be delivered for purposes of determining the maximum number of shares of Common Stock available for grants under the Plan. | |||
Further, if any Stock Option is exercised by tendering Common Stock, either actually or by attestation, to the Company as full or partial payment in connection with the exercise of the Stock Option under the Plan, only the number of shares of Common Stock issued net of the Common Stock tendered shall be deemed delivered for purposes of determining the maximum number of shares available for grants under the Plan. | |||
b) | Other Share Limits . The number of shares of Common Stock subject to Stock Options granted under the Plan to any one Participant shall not exceed 5,000,000. | ||
c) | Adjustments for Corporate Transactions . If a corporate transaction has occurred affecting the Common Stock such that an adjustment to outstanding awards is required to preserve (or prevent enlargement of) the benefits or potential benefits intended at the time of grant, then in such manner as the Committee deems equitable, an appropriate adjustment shall be made to (i) the number and kind of shares which may be awarded under the Plan; (ii) the number and kind of shares subject to outstanding awards; (iii) the number of shares credited to an account; and, if applicable, (iv) the exercise price of outstanding Options; provided that the number of shares of Common Stock subject to any Option denominated in Common Stock shall always be a whole number. For this purpose a corporate transaction includes, but is not limited to, any dividend or other distribution (whether in the form of cash, Common Stock, securities of a subsidiary of the Company, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, or other similar corporate transactions. Notwithstanding anything in this paragraph to the contrary, an adjustment to an Option under this paragraph shall be made in a manner that will not result in a new grant of an Option under Code Section 409A. | ||
d) | Limits on Distribution . Distribution of shares of Common Stock or other amounts under the Plan shall be subject to the following: |
(i) | Notwithstanding any other provision of the Plan, the Company shall have no liability to deliver any shares of Common Stock under the Plan or make any other distribution of benefits under the Plan unless such delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act of 1933), and the applicable requirements of any securities exchange or similar entity. | ||
(ii) | To the extent that the Plan provides for issuance of stock certificates to reflect the issuance of shares of Common Stock, the issuance may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange. |
e) | The Committee, in its discretion, may require as a condition to the grant of Stock Options, the deposit of Common Stock owned by the Participant receiving such grant, and the forfeiture of such grants, if such deposit is not made or maintained during the required holding period. Such shares of deposited Common Stock may not be otherwise sold, pledged or disposed of during the applicable holding period or restricted period. The Committee may also determine whether any shares issued upon exercise of a Stock Option shall be restricted in any manner. |
7. | EXERCISE OF STOCK OPTIONS |
a) | Exercise . Except as provided in Sections 10 and 11 (Change of Control and Termination of Employment), each Stock Option may be exercised only in accordance with the terms and conditions of the Stock Option grant and during the periods as may be established by the Committee, and only after three years of the Participants continued employment with the Company following the date of the Stock Option grant. | ||
A Participant exercising a Stock Option shall give notice to the Company of such exercise and of the number of shares elected to be purchased prior to 4:30 P.M. CST/CDT on the day of exercise, which must be a business day at the executive offices of the Company. | |||
b) | Payment . The Exercise Price shall be paid to the Company at the time of such exercise, subject to any applicable rule or regulation adopted by the Committee: |
(i) | in cash (including check, draft, money order or wire transfer made payable to the order of the Company); | ||
(ii) | through the tender of shares of Common Stock owned by the Participant (by either actual delivery or attestation); or | ||
(iii) | by a combination of (i) and (ii) above. |
For determining the amount of the payment, Common Stock delivered pursuant to (ii) or (iii) shall have a value equal to the Fair Market Value of the Common Stock on the date of exercise. | |||
c) | Deferrals . Prior to January 1, 2005, the Committee may permit or require Participants to defer receipt of any Common Stock issuable upon exercise of a Stock Option, subject to such rules and procedures as it may establish, which may include provisions for the payment or crediting of interest, or dividend equivalents, including converting such credits into deferred Common Stock equivalents. Stock option gains may not be deferred after December 31, 2004. |
8. | TRANSFERABILITY OF STOCK OPTIONS | |
Except as otherwise provided by rules of the Committee, no Stock Options shall be transferable by a Participant otherwise than (i) by the Participants last will and testament or (ii) by the applicable laws of descent and distribution, and such Stock Options shall be exercised during the Participants lifetime only by the Participant or his or her guardian or legal representative. | ||
9. | TAXES | |
Whenever the Company issues Common Stock under the Plan, the Company may require the recipient to remit to the Company an amount sufficient to satisfy any Federal, state or local tax withholding requirements prior to the delivery of such Common Stock, or, in the discretion of the Committee, upon the election of the Participant, the Company may withhold from the shares to be delivered shares sufficient to satisfy all or a portion of such tax withholding requirements. | ||
10. | CHANGE OF CONTROL | |
Each outstanding Stock Option shall become immediately and fully exercisable for a period of one (1) year following the date of the following occurrences, each constituting a Change of Control: |
a) | The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act), (a Person) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the |
1934 Act) of voting securities of the Company where such acquisition causes such Person to own 20% or more of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the Outstanding Voting Securities); provided, however, that for purposes of this subsection (a), the following acquisitions shall not be deemed to result in a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction that complies with clauses (i), (ii) and (iii) of subsection (c) below; and provided, further, that if any Persons beneficial ownership of the Outstanding Voting Securities reaches or exceeds 20% as a result of a transaction described in clause (i) or (ii) above, and such Person subsequently acquires beneficial ownership of additional voting securities of the Company, such subsequent acquisition shall be treated as an acquisition that causes such Person to own 20% or more of the Outstanding Voting Securities; or | |||
b) | Individuals who, as of the date hereof, constitute the Board of Directors (the Incumbent Board) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Companys shareholders, was approved by a vote of at least of a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or | ||
c) | The approval by the shareholders of the Company of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (Business Combination) or, if consummation of such Business Combination is subject, at the time of such approval by stockholders, to the consent of any government or governmental agency, the obtaining of such consent (either explicitly or implicitly by consummation); excluding, however, such a Business Combination pursuant to which (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that as a result of such transaction owns the Company or all or substantially all of the Companys assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Voting Securities, (ii) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or | ||
d) | approval by the stockholders of the Company of a complete liquidation or dissolution of the Company. |
After such one (1) year period the normal Stock Option exercise provisions of the Plan shall govern. Notwithstanding any other provision of the Plan, but subject to Section 5, in the event a Participants employment with the Company is terminated within two (2) years of any of the events specified in (a), (b), (c) or (d), all outstanding Stock Options of such Participant at that date of termination shall be exercisable for a period of six (6) months beginning on the date of termination. | ||
With respect to Stock Option grants outstanding as of the date of any such Change of Control which require the deposit of owned Common Stock as a condition to obtaining rights, the deposit requirement shall be terminated as of the date of the Change of Control and any such deposited stock shall be promptly returned to the Participant. |
11. | TERMINATION OF EMPLOYMENT |
a) | Resignation or Termination for Cause . If the Participants employment by the Company is terminated by either |
(i) | the voluntary resignation of the Participant, or | ||
(ii) | a Company discharge due to Participants illegal activities, poor work performance, misconduct or violation of the Companys policies or practices, |
then Participants Stock Options shall terminate three months after such termination (but in no event beyond the original full term of the Stock Options) and no Stock Options shall become exercisable after such termination. | |||
b) | Other Termination . If the Participants employment by the Company terminates for any reason other than specified in Sections 10, 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 the Participants age and service with the Company equals or exceeds 70, the Participants outstanding Stock Options shall continue to become exercisable in accordance with the schedules established at the time of grant. Stock Options shall remain exercisable for the remaining full term of such Stock Options. | ||
(ii) | In the event that, at the time of such termination, the sum of Participants age and service with the Company is less than 70, Participants outstanding unexercisable Stock Options shall become exercisable as of the date of termination, in a pro-rata amount based on the full months of employment completed during the full vesting period from the date of grant to the date of termination with such newly-vested Stock Options and Stock Options exercisable on the date of termination remaining exercisable for the lesser of one year from the date of termination and the original full term of the Stock Option. All other Stock Options shall be forfeited as of the date of termination. Provided, however, that if the Participant is an executive officer of the Company, the Participants outstanding Stock Options which, as of the date of termination are not yet exercisable, shall become exercisable effective as of the date of such termination and, with all outstanding Stock Options already exercisable on the date of termination, shall remain exercisable for the lesser of one year following the date of termination and the original full term of the Stock Option. |
c) | Death . If a Participant dies while employed by the Company, any Stock Option previously granted under this Plan may be exercised by the person(s) authorized in accordance with Section 12(e) of this Plan. Any outstanding Stock Options granted on or after June 1, 2002, which, as of the date of death, are not yet exercisable, shall fully vest and together with all other previously vested outstanding Stock Options shall be exercisable upon a Participants death for the remaining full term of the Options. Any outstanding Stock Options granted prior to June 1, 2002 shall vest and become exercisable in a pro-rata amount, based on the full months of employment completed during the full vesting period of the Stock Options from the date of grant to the date of death for the remaining full term of the Options. | ||
d) | Retirement . The Committee shall determine, at the time of grant, the treatment of the Stock Option upon the retirement of the Participant. Unless other terms are specified in the original Stock Option grant, if the termination of employment is due to a Participants retirement on or after age 55, the Participant may exercise a Stock Option, subject to the original terms and conditions of the Stock Option. | ||
e) | Spin-offs . If the termination of employment is due to the cessation, transfer, or spin-off of a complete line of business of the Company, the Committee, in its sole discretion, shall determine the treatment of all outstanding Stock Options under the Plan. |
12. | ADMINISTRATION OF THE PLAN |
a) | Administration . The authority to control and manage the operations and administration of the Plan shall be vested in Committee in accordance with this Section 12. | ||
b) | Selection of Committee . The Committee shall be selected by the Board, and shall consist of two or more members of the Board. | ||
c) | Powers of Committee . The authority to manage and control the operations and administration of the Plan shall be vested in the Committee, subject to the following: |
(i) | Subject to the provisions of the Plan, the Committee will have the authority and discretion to select from among the eligible Company employees those persons who shall receive Stock Options, to determine the time or times of receipt, to determine the types of grants (including status as Non-Qualified or Incentive Stock Options) and the number of shares covered by the grants, to establish the terms, conditions, performance criteria, restrictions, and other provisions of such grants, and (subject to the restrictions imposed by Section 13) to cancel or suspend grants. In making such determinations, the Committee may take into account the nature of services rendered by the individual, the individuals present and potential contribution to the Companys success and such other factors as the Committee deems relevant. | ||
(ii) | The Committee will have the authority and discretion to establish terms and conditions of awards as the Committee determines to be necessary or appropriate to conform to applicable requirements or practices of jurisdictions outside of the United States. | ||
(iii) | The Committee will have the authority and discretion to interpret the Plan, to establish, amend, and rescind any rules and regulations relating to the Plan, to determine the terms and provisions of any agreements made pursuant to the Plan, and to make all other determinations that may be necessary or advisable for the administration of the Plan. | ||
(iv) | Any interpretation of the Plan by the Committee and any decision made by it under the Plan is final and binding. |
d) | Delegation by Committee . Except to the extent prohibited by applicable law or the applicable rules of a stock exchange, the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it. Any such allocation or delegation may be revoked by the Committee at any time. | ||
e) | Designation of Beneficiary . Each Participant to whom an Award has been made under the Plan may designate a beneficiary or beneficiaries to exercise any Award which under the terms of the Plan and the relevant Award Agreement may become exercisable on or after the Participants death. At any time, and from time to time, any such designation may be changed or cancelled by the Participant without the consent of any such beneficiary. Any such designation, change or cancellation must be on a form provided for that purpose by the Committee and shall not be effective until received by the Committee. Such form may establish other rules as the Committee deems appropriate. If no beneficiary has been properly designated by a deceased Participant, or if all the designated beneficiaries have predeceased the Participant, the beneficiary shall be the Participants estate. If the Participant designates more than one beneficiary, any payments under the Plan to such beneficiaries shall be made in equal shares designated by the Participant. |
13. | AMENDMENTS OF THE PLAN | |
The Committee may from time to time prescribe, amend and rescind rules and regulations relating to the Plan. Subject to the approval of the Board of Directors, where required, the Committee may at any time terminate, amend, or suspend the operation of the Plan, provided that no action shall be taken by the Board of Directors or the Committee without the approval of the stockholders of the Company which would: |
(i) | materially increase the number of shares which may be issued under the Plan; | ||
(ii) | permit granting of Stock Options at less than Fair Market Value; | ||
(iii) | except as provided in Section 6, permit the repricing of outstanding Stock Options; and | ||
(iv) | amend the maximum shares set forth in Section 6(b) which may be annually granted as Stock Options to any single Participant. |
No termination, modification, suspension, or amendment of the Plan shall alter or impair the rights of any Participant pursuant to an outstanding Stock Option without the consent of the Participant. There is no obligation for uniformity of treatment of Participants under the Plan. | ||
14. | FOREIGN JURISDICTIONS | |
The Committee may adopt, amend, and terminate such arrangements, not inconsistent with the intent of the Plan, as it may deem necessary or desirable to make available tax or other benefits of the laws of any foreign jurisdiction, to employees of the Company who are subject to such laws and who receive Stock Options under the Plan. | ||
15. | NOTICE | |
All notices to the Company regarding the Plan shall be in writing, effective as of actual receipt by the Company, and shall be sent to: |
General Mills, Inc.
Number One General Mills Boulevard Minneapolis, Minnesota 55426 Attention: Corporate Compensation |
(i) | Each non-employee director may elect to have all or a specified percentage of his or her compensation for the Plan Year deferred until the participant ceases to be a director. | ||
(ii) | For each director who has made this deferred cash election, the Company shall establish a deferred compensation account for the compensation due. Interest shall be credited to each such account based on the rate earned by the fund or funds selected by the participant from among funds or portfolios established under the General Mills, Inc. Savings Plan or any other qualified benefit plan maintained by the Company which the Minor Amendment Committee, or its delegate, in its discretion, may from time to time establish. | ||
(iii) | Distribution of the participants deferred compensation account shall be at the time, and in the form of payment, elected by the participant at the time of deferral. The distribution date may be any date that is at least one year subsequent to the date of deferral of such compensation, but the distribution must be made or commenced by the later of (i) the date the participant attains age 70 and (ii) five years after the directors retirement from the Board. | ||
A participant may elect to have the deferred compensation account distributed in a single payment or in substantially equal annual installments for a period not to exceed ten (10) years, or in another form requested by the Participant, in writing, and approved by the Committee. | |||
(iv) | In the event of the termination of a participant from Board service other than by retirement, the Committee may in its sole discretion require that distribution of all amounts allocated to a participants deferred compensation account be accelerated and distributed as of the first business day of the calendar year next following termination. | ||
(v) | The Company has established a Supplemental Benefits Trust with Wells Fargo Bank Minnesota, N.A. as Trustee to hold assets of the Company under certain circumstances as a reserve for the discharge of the Companys obligations as to deferred cash compensation under the Plan and certain other of deferred compensation plans of the Company. In the event of a Change in Control as defined in Section 11 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 of the Plan shall have the right to demand and secure specific performance of this provision. All assets held in the Trust remain subject only to the claims of the Companys general creditors whose claims against the Company are not satisfied because of the Companys 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. |
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(i) | in cash (including check, draft, money order or wire transfer made payable to the order of the Company); | ||
(ii) | through the tender of shares of Common Stock owned by the participant (by either actual delivery or attestation); or | ||
(iii) | by a combination of (i) and (ii) above. |
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(i) | If an Option as to which a participant has made an Option gain deferral election terminates prior to the exercise date selected by the participant, or if the participant dies or fails to deliver personally-owned shares in payment of the exercise price, then the deferral election shall not become effective. | ||
(ii) | In the event of the termination of a participant from Board service other than by retirement, the Committee may, in its sole discretion, require that distribution of all Stock Units allocated to a participants Deferred Stock Unit Accounts (as defined in Section 7(c)(i) below) be accelerated and distributed as of the first business day of the calendar year next following the date of termination. | ||
(iii) | At the time elected by the participant for distribution of Common Stock attributable to allocations under the participants Deferred Stock Unit Accounts, the Company shall cause to be issued to the Participant, within three (3) days of the date of distribution, shares of Common Stock equal to the number of Stock Units credited to the Deferred Stock Unit Account and cash equal to any dividend equivalent amounts which had not been used to purchase additional Stock Units as provided below. Prior to distribution and pursuant to any rules the Committee may adopt, a Participant may authorize the Company to withhold a portion of the shares of Common Stock to be distributed for the payment of all federal, state, local and foreign withholding taxes required to be collected in respect of the distribution. |
(i) | A deferred stock unit account (Deferred Stock Unit Account) will be established for each Option grant covered by a participant election to defer the receipt of Common Stock under Section 7(a) above and, for each Net Share deferred, a Stock Unit will be credited to the Deferred Stock Unit |
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Account as of the date of the Option exercise. A Deferred Stock Unit Account will also be established each time a participant receives Stock Units pursuant to Section 8(a) hereof. Participants may make an election to receive dividend equivalents on Stock Units in cash or reinvest such amount, and any change to such election shall become effective six months after the date of the change. If the amounts are reinvested, on each dividend payment date for the Companys Common Stock, the Company will credit each Deferred Stock Unit Account with an amount equal to the dividends paid by the Company on the number of shares of Common Stock equal to the number of Stock Units in the Deferred Stock Unit Account. Dividend equivalent amounts credited to each Deferred Stock Unit Account shall be used to purchase additional Stock Units for the Deferred Stock Unit Account at a price equal to the mean of the high and low price of the Common Stock on the New York Stock Exchange on the dividend date. The 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. Periodically, each participant will receive a statement of the number of Stock Units in his or her Deferred Stock Unit Account(s). | |||
(ii) | Participants who elect under the Plan to defer the receipt of Common Stock issuable upon the exercise of Options or elect to receive Stock Units under Section 8(a) below will have no rights as stockholders of the Company with respect to allocations made to their Deferred Stock Unit Account(s), except the right to receive dividend equivalent allocations under Section 7(c)(i) above. Stock Units may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed. |
9. | GENERAL PROVISIONS FOR DEFERRED CASH, OPTION GAINS AND STOCK UNITS |
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1. | PURPOSE OF THE PLAN | |
The purpose of the General Mills, Inc. 2003 Stock Compensation Plan (the Plan) is to attract and retain able individuals by rewarding employees of General Mills, Inc., its subsidiaries and affiliates (defined as entities in which General Mills, Inc. has a significant equity or other interest) (collectively, the Company) and to align the interests of employees with those of the stockholders of the Company. | ||
2. | EFFECTIVE DATE AND DURATION OF PLAN | |
This Plan shall become effective as of October 1, 2003, subject to the approval of the stockholders of the Company at the Annual Meeting on September 22, 2003. Awards may be made under the Plan until December 31, 2005. | ||
3. | ELIGIBLE PERSONS | |
Only persons who are employees of the Company shall be eligible to receive grants of Stock Options, Restricted Stock, Restricted Stock Units or Recognition Awards (each defined below) and become Participants under the Plan. The Compensation Committee of the Companys Board of Directors (the Committee) shall exercise the discretionary power to determine from time to time the employees of the Company who are eligible to participate in this Plan. | ||
4. | AWARD TYPES |
(a) | Stock Option Awards . Under this Plan, the Committee may award Participants options (Stock Options) to purchase common stock of the Company ($.10 par value) (Common Stock). The grant of a Stock Option entitles the Participant to purchase a fixed number of shares of Common Stock at an Exercise Price established by the Committee. | ||
(b) | Stock Option Exercise Price . The Exercise Price for each share of Common Stock issuable under a Stock Option shall not be less than 100% of the Fair Market Value of the Common Stock on the date of grant, and may exceed the Fair Market Value on the grant date, at the Committees discretion. Fair Market Value shall equal the closing price of the Common Stock on the New York Stock Exchange on the date of grant. | ||
(c) | Restricted Stock Awards . The Committee may also grant Participants shares of Common Stock or the right to receive shares of Common Stock subject to certain restrictions (Restricted Stock or Restricted Stock Units). | ||
(d) | Recognition Awards . The Committee hereby authorizes the Corporate Secretary to approve and distribute Common Stock to Participants as a bonus or reward, subject to Section 13(d) and Committee ratification of such Awards in accordance with Section 20. No Participant may receive as Recognition Award(s) more than 20 shares in the aggregate, in any calendar year. | ||
(e) | Awards . Stock Options, Restricted Stock, Restricted Stock Units and Recognition Awards, as defined above, are sometimes referred to as Awards. |
To the extent that such requirements are applicable, this Plan is intended to comply with the requirements of section 409A of the Internal Revenue Code of 1986 and shall be interpreted and administered in accordance with that intent. If any provision of the Plan would otherwise conflict with or frustrate this intent, that provision will be interpreted and deemed amended so as to avoid the conflict. Further, for purposes of the limitations on nonqualified deferred compensation under section 409A, each payment of compensation under this Plan shall be treated as a separate payment of compensation for purposes of applying the section 409A deferral election rules and the exclusion from section 409A for certain short-term deferral amounts. Certain Awards made under this Plan which were earned and vested (within the meaning of section 409A) before January 1, 2005 are intended to be grandfathered from section 409A and remain governed by federal tax law applicable to deferred compensation as it existed in effect prior to Section 409A. Accordingly, changes to the Plan after October 3, 2004 shall not modify the rights of Participants with respect to |
deferred amounts that were earned and vested on or before December 31, 2004. It is further intended that no material modification be made to the Plan, as that term is used in Treasury Regulations governing section 409A, whether by this amendment and restatement or otherwise. | ||
5. | COMMON STOCK SUBJECT TO THE PLAN |
(a) | Maximum Shares Available for Delivery . Subject to Section 5(c), the maximum number of shares of Common Stock available for issuance to Participants under the Plan shall be 15,000,000. | ||
In addition, any Common Stock covered by a Stock Option granted under the Plan, which is forfeited, cancelled or expires in whole or in part shall be deemed not to be delivered for purposes of determining the maximum number of shares of Common Stock available for grants under the Plan. | |||
If any Stock Option is exercised by tendering Common Stock, either actually or by attestation, to the Company as full or partial payment in connection with the exercise of the Stock Option under the Plan, or if the tax withholding requirements are satisfied through such tender, only the number of shares of Common Stock issued net of the Common Stock tendered shall be deemed delivered for purposes of determining the maximum number of shares available for grants under the Plan. Upon forfeiture or termination of Restricted Stock or Restricted Stock Units prior to vesting, the shares of Common Stock subject thereto shall again be available for Awards under the Plan. | |||
(b) | Individual Share Limits . The number of shares of Common Stock subject to Stock Options or available for Restricted Stock, Restricted Stock Unit or Recognition Awards granted under the Plan to any single Participant over the duration of the Plan shall not exceed 10 percent of the total number of shares available under the Plan. | ||
(c) | Adjustments for Corporate Transactions . If a corporate transaction has occurred affecting the Common Stock such that an adjustment to outstanding awards is required to preserve (or prevent enlargement of) the benefits or potential benefits intended at the time of grant, then in such manner as the Committee deems equitable, an appropriate adjustment shall be made to (i) the number and kind of shares which may be awarded under the Plan; (ii) the number and kind of shares subject to outstanding awards; (iii) the number of shares credited to an account; and, if applicable, (iv) the exercise price of outstanding Options; provided that the number of shares of Common Stock subject to any Option denominated in Common Stock shall always be a whole number. For this purpose a corporate transaction includes, but is not limited to, any dividend or other distribution (whether in the form of cash, Common Stock, securities of a subsidiary of the Company, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, or other similar corporate transactions. Notwithstanding anything in this paragraph to the contrary, an adjustment to an Option under this paragraph shall be made in a manner that will not result in a new grant of an Option under Code Section 409A. | ||
(d) | Limits on Distribution . Distribution of shares of Common Stock or other amounts under the Plan shall be subject to the following: |
(i) | The total number of shares of Common Stock that shall be available for Restricted Stock, Restricted Stock Unit and Recognition Awards under the Plan shall be limited to 25% of the total shares authorized for Awards hereunder. | ||
(ii) | Notwithstanding any other provision of the Plan, the Company shall have no liability to deliver any shares of Common Stock under the Plan or make any other distribution of benefits under the Plan unless such delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act of 1933), and the applicable requirements of any securities exchange or similar entity. | ||
(iii) | 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 non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange. |
(e) | Stock Deposit Requirements and other Restrictions . The Committee, in its discretion, may require as a condition to the grant of Awards, the deposit of Common Stock owned by the Participant receiving such grant, and the forfeiture of such grants, if such deposit is not made or maintained during the required holding period. Such shares of deposited Common Stock may not be otherwise sold or disposed of during the applicable holding period or |
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restricted period. The Committee may also determine whether any shares issued upon exercise of a Stock Option shall be restricted in any manner. |
6. | STOCK OPTION TERM AND TYPE |
(a) | General . Stock Options granted under the Plan shall be Non-Qualified Stock Options governed by Section 83 of the Internal Revenue Code of 1986, as amended (the Code). The term of any Stock Option granted under the Plan shall be determined by the Committee, provided that the term of a Stock Option shall not exceed 10 years and one month. | ||
(b) | No Reload Rights . Stock Options granted under this Plan shall not contain any provision entitling the optionee to the automatic grant of additional options in connection with any exercise of the original option. | ||
(c) | No Repricing . Subject to Section 5(c), outstanding Stock Options granted under this Plan shall under no circumstances be repriced. |
7. | GRANT, EXERCISE AND VESTING OF STOCK OPTIONS |
(a) | Grant . Subject to the limits otherwise imposed by the terms of this Plan, the Committee has discretionary authority to determine the size of a Stock Option grant, which may be tied to meeting performance-based requirements. | ||
(b) | Exercise . Except as provided in Sections 11 and 12 (Change of Control and Termination of Employment), each Stock Option may be exercised only in accordance with the terms and conditions of the Stock Option grant and during the periods as may be established by the Committee. A Participant exercising a Stock Option shall give notice to the Company of such exercise and of the number of shares elected to be purchased prior to 4:30 P.M. CST/CDT on the day of exercise, which must be a business day at the executive offices of the Company. | ||
(c) | Vesting . Stock Options shall not be exercisable unless vested. Subject to Sections 11 and 12 Stock Options shall be fully vested only after four years of the Participants continued employment with the Company following the date of the Stock Option grant. | ||
(d) | Payment . The Exercise Price shall be paid to the Company at the time of such exercise, subject to any applicable rule or regulation adopted by the Committee: |
(i) | in cash (including check, draft, money order or wire transfer made payable to the order of the Company); | ||
(ii) | through the tender of shares of Common Stock owned by the Participant (by either actual delivery or attestation); or | ||
(iii) | by a combination of (i) and (ii) above. |
For determining the amount of the payment, Common Stock delivered pursuant to (ii) or (iii) shall have a value equal to the Fair Market Value of the Common Stock on the date of exercise. | |||
(e) | Deferrals . Prior to January 1, 2005, the Committee may permit or require Participants to defer receipt of any Common Stock issuable upon exercise of a Stock Option, subject to such rules and procedures as it may establish, which may include provisions for the payment or crediting of interest, or dividend equivalents, including converting such credits into deferred Common Stock equivalents. Stock Option gains may not be deferred after December 31, 2004. |
8. | RESTRICTED STOCK AND RESTRICTED STOCK UNITS | |
Restricted Stock and Restricted Stock Units may be awarded on either a discretionary or performance-based method. |
(a) | Discretionary Awards . With respect to discretionary Awards of Restricted Stock and Restricted Stock Units, the Committee shall: |
(i) | Select Participants to whom Awards will be made; |
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(ii) | Determine the number of shares of Restricted Stock or the number of Restricted Stock Units to be awarded to a Participant; | ||
(iii) | Determine the length of the restricted period, which shall be no less than four years; | ||
(iv) | Determine the purchase price, if any, to be paid by the Participant for Restricted Stock or Restricted Stock Units; and | ||
(v) | Determine any restrictions other than those set forth in this Section 8. |
(b) | Performance-Based Awards . With respect to Awards of performance-based Restricted Stock and Restricted Stock Units, the intent is to grant such Awards so as to satisfy the requirements for qualified performance-based compensation under Internal Revenue Code section 162(m). Performance-based Awards are subject to the following: |
(i) | The Committee has exclusive authority to determine which Participants may be awarded performance-based Restricted Stock and Restricted Stock Units. | ||
(ii) | In order for any Participant to be awarded Restricted Stock or Restricted Stock Units for a Performance Period (defined below), the net earnings from continuing operations excluding items identified and disclosed by the Company as non-recurring or special costs and after taxes (Net Earnings) of the Company for such Performance Period must be greater than zero. | ||
(iii) | At the end of the Performance Period, if the Committee determines that the requirement of Section 8(b)(ii) has been met, each Participant eligible for a performance-based Award shall be deemed to have earned an Award equal in value to the Maximum Amount, or such lesser amount as the Committee shall determine in its discretion to be appropriate. The Committee may base this determination of grant size on performance-based criteria and in no case shall this have the effect of increasing an Award payable to any other Participant. For purposes 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 date the Award is granted. | ||
(iv) | In addition to the limitation on the number of shares of Common Stock available for Awards under section 5(b) hereof, in no event shall the total value of the performance-based Restricted Stock or Restricted Stock Unit Award granted to any Participant for any one Performance Period exceed 0.5 percent of the Companys Net Earnings for that Performance Period (such amount is the Maximum Amount). | ||
(v) | The Committee shall determine the length of the restricted period which, subject to Sections 11 and 12, shall be no less than four years. | ||
(vi) | Performance Period means a fiscal year of the Company, or such other period as the Committee may from time to time establish. |
Subject to the restrictions set forth in this Section 8, each Participant who receives Restricted Stock shall have all rights as a stockholder with respect to such shares, including the right to vote the shares and receive dividends and other distributions. | ||
Each Participant who receives Restricted Stock Units shall be eligible to receive, at the expiration of the applicable restricted period, one share of Common Stock for each Restricted Stock Unit awarded, and the Company shall issue to each such Participant that number of shares of Common Stock. Participants who receive Restricted Stock Units shall have no rights as stockholders with respect to such Restricted Stock Units until such time as share certificates for Common Stock are issued to the Participants; provided, however, that quarterly during the applicable restricted period for all Restricted Stock Units awarded hereunder, the Company shall pay to each such Participant an amount equal to the sum of all dividends and other distributions paid by the Company during the prior quarter on that equivalent number of shares of Common Stock. | ||
The Committee may permit Participants to defer receipt of any Common Stock issuable upon the lapse of any restriction of Restricted Stock or Restricted Stock Units, subject to such rules and procedures as it may establish. In particular, the |
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Committee shall establish rules relating to such deferrals intended to comply with the requirements of Code section 409A, including without limitation, the time when a deferral election can be made, the period of the deferral, and the events that would result in payment of the deferred amount. | ||
9. | TRANSFERABILITY OF AWARDS | |
Except as otherwise provided by rules of the Committee, no Stock Options shall be transferable by a Participant otherwise than (i) by the Participants last will and testament or (ii) by the applicable laws of descent and distribution, and such Stock Options shall be exercised during the Participants lifetime only by the Participant or his or her guardian or legal representative. Except as otherwise provided in Section 8, no shares of Restricted Stock and no Restricted Stock Units shall be sold, exchanged, transferred, pledged or otherwise disposed of during the restricted period. | ||
10. | TAXES | |
Whenever the Company issues Common Stock under the Plan, the Company may require the recipient to remit to the Company an amount sufficient to satisfy any Federal, state or local tax withholding requirements prior to the delivery of such Common Stock, or, in the discretion of the Committee, upon the election of the Participant, the Company may withhold from the shares to be delivered shares sufficient to satisfy all or a portion of such tax withholding requirements. | ||
11. | CHANGE OF CONTROL | |
Each outstanding Stock Option shall become immediately and fully exercisable for a period of one (1) year following the date of the following occurrences, each constituting a Change of Control: |
(a) | The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act), (a Person) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of voting securities of the Company where such acquisition causes such Person to own 20% or more of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the Outstanding Voting Securities); provided, however, that for purposes of this subsection (a), the following acquisitions shall not be deemed to result in a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction that complies with clauses (i), (ii) and (iii) of subsection (c) below; and provided, further, that if any Persons beneficial ownership of the Outstanding Voting Securities reaches or exceeds 20% as a result of a transaction described in clause (i) or (ii) above, and such Person subsequently acquires beneficial ownership of additional voting securities of the Company, such subsequent acquisition shall be treated as an acquisition that causes such Person to own 20% or more of the Outstanding Voting Securities; or | ||
(b) | Individuals who, as of the date hereof, constitute the Board of Directors (the Incumbent Board) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Companys shareholders, was approved by a vote of at least of a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or | ||
(c) | The approval by the shareholders of the Company of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (Business Combination) or, if consummation of such Business Combination is subject, at the time of such approval by stockholders, to the consent of any government or governmental agency, the obtaining of such consent (either explicitly or implicitly by consummation); excluding, however, such a Business Combination pursuant to which (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that as a result of such transaction owns the Company or all or substantially all of the Companys 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 |
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Outstanding Voting Securities, (ii) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or | |||
(d) | Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company. |
After such one (1) year period the normal Stock Option exercise provisions of the Plan shall govern. Notwithstanding any other provision of the Plan, but subject to Section 6, in the event a Participants employment with the Company is terminated within two (2) years of any of the events specified in (a), (b), (c) or (d), all outstanding Stock Options of such Participant at that date of termination shall be exercisable for a period of six (6) months beginning on the date of termination. | ||
With respect to Stock Option grants outstanding as of the date of any such Change of Control which require the deposit of owned Common Stock as a condition to obtaining rights, the deposit requirement shall be terminated as of the date of the Change of Control. | ||
In the event of a Change of Control, a Participant shall fully vest in all shares of Restricted Stock and Restricted Stock Units, effective as of the date of such Change of Control. If the Change of Control constitutes a change in control event as described in IRS regulations or other guidance under Code section 409A(a)(2)(A)(v), Participants Restricted Stock Units shall be settled upon the Change of Control. If the Change of Control does not constitute a change in control event as described in IRS regulations or other guidance under Code section 409A(a)(2)(A)(v), Restricted Stock Units that are not Section 409A Restricted Stock Units and on which a deferral election was not made shall be settled upon the Change of Control. However, the Section 409A Restricted Stock Units, or Restricted Stock Units for which a proper deferral election was made, shall be settled on the date the original restriction period would have closed, or the date elected pursuant to the proper deferral election, as applicable. | ||
12. | TERMINATION OF EMPLOYMENT |
(a) | Resignation or Termination for Cause . If the Participants employment by the Company is terminated by either |
(i) | the voluntary resignation of the Participant, or | ||
(ii) | a Company discharge due to Participants illegal activities, poor work performance, misconduct or violation of the Companys Code of Conduct, policies or practices, |
then Participants Stock Options shall terminate three months after such termination (but in no event beyond the original full term of the Stock Options) and no Stock Options shall become exercisable after such termination, and all shares of Restricted Stock and Restricted Stock Units which are subject to restriction and not vested on the date of termination shall be forfeited. | |||
(b) | Other Termination . If the Participants employment by the Company terminates for any reason other than specified in Sections 11, 12 (a), (c), (d) or (e), the following rules shall apply: |
(i) | In the event that, at the time of such termination, the sum of the Participants age and service with the Company equals or exceeds 70, the Participants outstanding Stock Options shall continue to become exercisable according to the schedule established at the time of grant unless otherwise provided in the applicable Award agreement, and all shares of Restricted Stock and Restricted Stock Units shall fully vest and be paid (or deferred, as appropriate) immediately. Stock Options shall remain exercisable for the remaining full term of such Stock Options. | ||
(ii) | In the event that, at the time of such termination, the sum of the Participants age and service with the Company is less than 70, Participants outstanding unexercisable Stock Options and unvested Restricted Stock and Restricted Stock Units shall become exercisable or vest, as the case may be, and be paid (or deferred, as appropriate) immediately as of the date of termination, in a pro-rata |
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amount based on the full months of employment completed during the full vesting period from the date of grant to the date of termination with such newly-vested Stock Options and Stock Options exercisable on the date of termination remaining exercisable for the lesser of one year from the date of termination and the original full term of the Stock Option. All other Stock Options, shares of Restricted Stock and Restricted Stock Units shall be forfeited as of the date of termination. Provided, however, that if the Participant is an executive officer of the Company, the Participants outstanding Stock Options which, as of the date of termination are not yet exercisable, shall become exercisable effective as of the date of such termination and, with all outstanding Stock Options already exercisable on the date of termination, shall remain exercisable for the lesser of one year following the date of termination and the original full term of the Stock Option, and all shares of Restricted Stock and Restricted Stock Units shall fully vest as of the date of termination and be paid (or deferred, as appropriate) immediately. | |||
Notwithstanding the foregoing, any Section 409A Restricted Stock Units that vest under this Section 12(b) shall be paid on the Participants separation from service (within the meaning of Code section 409A), or in the case of a Participant who is a specified employee (within the meaning of Code section 409A) shall be paid on the first day of the seventh month following the month of separation from service. |
(c) | Death . If a Participant dies while employed by the Company, any Stock Option previously granted under this Plan shall fully vest and become exercisable upon death and together with all other outstanding Stock Options may be exercised by the person(s) authorized in accordance with Section 13(e) of this Plan. Such Stock Options shall be exercisable for the remaining full term of such Awards. | ||
A Participant who dies while employed by the Company during any applicable restricted period shall fully vest in Awards of Restricted Stock or Restricted Stock Units, effective as of the date of death, and such shares shall be paid to the person(s) designated under the terms of Section 13(e) of this Plan. | |||
(d) | Retirement . The Committee shall determine, at the time of grant, the treatment of the Stock Options, Restricted Stock and Restricted Stock Units upon the retirement of the Participant. Unless other terms are specified in the original Grant, if the termination of employment is due to a Participants retirement on or after age 55, the Participant may exercise a Stock Option, subject to the original terms and conditions of the Stock Option, and shall fully vest in and be paid or have deferred, all shares of Restricted Stock or Restricted Stock Units effective as of the date of retirement (unless any such Award specifically provides otherwise). However, the Restricted Stock Units without a proper deferral election that vest under this Section 12(d) shall be payable on the Participants separation from service (within the meaning of Code section 409A) or in the case of a Participant who is a specified employee (within the meaning of Code section 409A) shall be paid on the first day of the seventh month following the month of separation from service. | ||
A Restricted Stock Unit that could vest upon retirement under this Section 12(d) at any time within the Awards restricted period shall be referred to as a Section 409A Restricted Stock Unit. | |||
(e) | Spin-offs . If the termination of employment is due to the cessation, transfer, or spin-off of a complete line of business of the Company, the Committee, in its sole discretion, shall determine the treatment of all outstanding Awards under the Plan. Such treatment will be consistent with Code section 409A, and in particular will take into account whether a separation from service has occurred within the meaning of section 409A. |
13. | 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 13. | ||
(b) | Selection of Committee . The Committee shall be selected by the Board, and shall consist of two or more members of the Board. | ||
(c) | Powers of Committee . The authority to manage and control the operations and administration of the Plan shall be vested in the Committee, subject to the following: |
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(i) | Subject to the provisions of the Plan, the Committee will have the authority and discretion to select from among the eligible Company employees those persons who shall receive Awards, to determine the time or times of receipt, to determine the types of Awards and the number of shares covered by the Awards, to establish the terms, conditions, performance criteria, restrictions, and other provisions of such Awards, and (subject to the restrictions imposed by Section 14) to cancel or suspend Awards. In making such determinations, the Committee may take into account the nature of services rendered by the individual, the individuals present and potential contribution to the Companys success and such other factors as the Committee deems relevant. | ||
(ii) | The Committee will have the authority and discretion to establish terms and conditions of Awards as the Committee determines to be necessary or appropriate to conform to applicable requirements or practices of jurisdictions outside of the United States. | ||
(iii) | The Committee will have the authority and discretion to interpret the Plan, to establish, amend, and rescind any rules and regulations relating to the Plan, to determine the terms and provisions of any agreements made pursuant to the Plan, and to make all other determinations that may be necessary or advisable for the administration of the Plan. | ||
(iv) | Any interpretation of the Plan by the Committee and any decision made by it under the Plan is final and binding. |
(d) | Delegation by Committee . Except to the extent prohibited by applicable law or the applicable rules of a stock exchange, the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it. Any such allocation or delegation may be revoked by the Committee at any time. | ||
(e) | Designation of Beneficiary . Each Participant to whom an Award has been made under the Plan may designate a beneficiary or beneficiaries to exercise any Award or to receive any payment which under the terms of the Plan and the relevant Award Agreement may become exercisable or payable on or after the Participants death. At any time, and from time to time, any such designation may be changed or cancelled by the Participant without the consent of any such beneficiary. Any such designation, change or cancellation must be on a form provided for that purpose by the Committee and shall not be effective until received by the Committee. Such form may establish other rules as the Committee deems appropriate. If no beneficiary has been properly designated by a deceased Participant, or if all the designated beneficiaries have predeceased the Participant, the beneficiary shall be the Participants estate. If the Participant designates more than one beneficiary, any Stock Options shall be divided among beneficiaries equally, and any payments under the Plan to such beneficiaries shall be made in equal shares, unless the Participant has expressly designated otherwise, in which case Stock Options shall be divided, and the payments shall be made, in the portions designated by the Participant. |
14. | AMENDMENTS OF THE PLAN | |
The Committee may from time to time prescribe, amend and rescind rules and regulations relating to the Plan. Subject to the approval of the Board of Directors, where required, the Committee may at any time terminate, amend, or suspend the operation of the Plan, provided that no action shall be taken by the Board of Directors or the Committee without the approval of the stockholders which would: |
(a) | except as provided in Section 5(c) materially increase the number of shares which may be issued under the 2003 Plan; | ||
(b) | permit granting of Stock Options at less than Fair Market Value; | ||
(c) | except as provided in Section 5(c), permit the repricing of outstanding Stock Options; or | ||
(d) | amend the maximum shares set forth in Section 5(b) which 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 Award without the consent of the Participant. There is no obligation for uniformity of treatment of Participants under the Plan. |
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15. | FOREIGN JURISDICTIONS | |
The Committee may adopt, amend, and terminate such arrangements, not inconsistent with the intent of the Plan, as it may deem necessary or desirable to make available tax or other benefits of the laws of any foreign jurisdiction, to employees of the Company who are subject to such laws and who receive Awards under the Plan. | ||
16. | NON-ALIENATION OF RIGHTS AND BENEFITS | |
Subject to Section 9, no right or benefit under the Plan shall be subject to alienation, sale, assignment, pledge, or encumbrance and any attempt to do so shall be void. No right or benefit under the Plan be subject to the debts, contacts, liabilities or torts of the person entitled to such rights or benefits. | ||
17. | LIMITATION OF LIABILITY OR OBLIGATION OF THE COMPANY. | |
Nothing in the Plan shall be construed: |
(a) | to give any employee of the Company any right to be granted any Award other than at the sole discretion of the Plan Committee; | ||
(b) | to give any Participant any rights whatsoever with respect to shares of Common Stock except as specifically provided in the Plan; | ||
(c) | to limit in any way the right of the Company or any Subsidiary to terminate, change or modify, with or without cause, the employment of any Participant at any time; or | ||
(d) | to be evidence of any agreement or understanding, express or implied, that the company or any Subsidiary will employ any Participant in any particular position at any particular rate of compensation or for any particular period of time. |
Payments and other benefits received by a Participant under an Award shall not be deemed part of a Participants regular, recurring compensation for purposes of any termination, indemnity or severance pay laws and shall not be included in, nor have any effect on, the determination of benefits under any other employee benefit plan, contract or similar arrangement provided by the Company or any Subsidiary, unless expressly so provided by such other plan, contract or arrangement. | ||
18. | NO LOANS | |
The Company shall not lend money to any Participant to finance a transaction under this Plan. | ||
19. | NOTICES | |
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 |
20. | RECOGNITION AWARDS | |
The Committee hereby authorizes the distribution of up to 10,000 shares of Common Stock as Recognition Awards in any calendar year during the duration of the Plan. A Company officer may identify employees of the Company who have made special contributions to the business and/or performance of the Company and request that the Corporate Secretary deliver Recognition Awards to such Participants in recognition of such contributions. Each year, the Committee shall review the grants of Recognition Awards made in the prior year. Recognition Award shares may be fully vested upon grant or subject to such vesting conditions as the Committee may authorize. |
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1. | PURPOSE OF THE PLAN | |
The purpose of the General Mills, Inc. 2005 Stock Compensation Plan (the Plan) is to attract and retain able individuals by rewarding employees of General Mills, Inc., its subsidiaries and affiliates (defined as entities in which General Mills, Inc. has a significant equity or other interest) (collectively, the Company) and to align the interests of employees with those of the stockholders of the Company. | ||
2. | EFFECTIVE DATE AND DURATION OF PLAN | |
This Plan shall become effective as of September 26, 2005, subject to the approval of the stockholders of the Company at the Annual Meeting on September 26, 2005. Awards may be made under the Plan until December 31, 2007. | ||
3. | ELIGIBLE PERSONS | |
Only persons who are employees of the Company shall be eligible to receive grants of Stock Options, Restricted Stock or Restricted Stock Units (each defined below) and become Participants under the Plan. The Compensation Committee of the Companys Board of Directors (the Committee) shall exercise the discretionary power to determine from time to time the employees of the Company who are eligible to participate in this Plan. | ||
4. | AWARD TYPES |
(a) | Stock Option Awards. Under this Plan, the Committee may award Participants options (Stock Options) to purchase common stock of the Company ($.10 par value) (Common Stock). The grant of a Stock Option entitles the Participant to purchase a fixed number of shares of Common Stock at an Exercise Price established by the Committee. | ||
(b) | Stock Option Exercise Price. The Exercise Price for each share of Common Stock issuable under a Stock Option shall not be less than 100% of the Fair Market Value of the Common Stock on the date of grant, and may exceed the Fair Market Value on the grant date, at the Committees discretion. Fair Market Value shall equal the closing price of the Common Stock on the New York Stock Exchange on the applicable date. | ||
(c) | Restricted Stock Awards. The Committee may also grant Participants shares of Common Stock or the right to receive shares of Common Stock subject to certain restrictions (Restricted Stock or Restricted Stock Units) (Stock Options, Restricted Stock and Restricted Stock Units are sometimes referred to as Awards). |
5. | COMMON STOCK SUBJECT TO THE PLAN |
(a) | Maximum Shares Available for Delivery. Subject to Section 5(c), the maximum number of shares of Common Stock available for issuance to Participants under the Plan shall be 15,000,000. The Company will repurchase a number of shares of Common Stock at least equal to the number of shares of Common Stock issued under this Plan. | ||
In addition, any Common Stock covered by a Stock Option granted under the Plan which is forfeited prior to the end of the vesting period shall be deemed not to be delivered for purposes of determining the maximum number of shares of Common Stock available for grants under the Plan. If (i) any Stock Option that is exercised through the delivery of Common Stock in satisfaction of the exercise price, and (ii) withholding tax requirements arising upon exercise of any Stock Option are satisfied through the withholding of Common Stock otherwise deliverable in connection with such exercise, the full number of shares of Common Stock underlying any such Stock Option that is exercised shall count against the maximum number of shares available for grants under the Plan. | |||
Upon forfeiture or termination of Restricted Stock or Restricted Stock Units prior to vesting, the shares of Common Stock subject thereto shall again be available for Awards under the Plan. | |||
(b) | Individual Share Limits. The number of shares of Common Stock subject to Stock Options or available for Restricted Stock or Restricted Stock Unit Awards granted under the Plan to any single Participant over the duration of the Plan shall not exceed 10% of the original number of shares available under the Plan. | ||
(c) | Adjustments for Corporate Transactions. If a corporate transaction has occurred affecting the Common Stock such that an adjustment to outstanding awards is required to preserve (or prevent enlargement of) the benefits or potential benefits intended at the time of grant, then in such manner as the Committee deems equitable, an appropriate adjustment shall be made to (i) the number and kind of shares which may be awarded under the Plan; (ii) the number and kind of shares subject to outstanding awards; (iii) the number of shares credited to an account; and, if applicable, (iv) the exercise price of outstanding Options; provided that the number of shares of Common Stock subject to any Option denominated in Common Stock shall always be a whole number. For this purpose a corporate transaction includes, but is not limited to, any dividend or other distribution (whether in the form of cash, Common Stock, securities of a subsidiary of the Company, other securities or other property), |
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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 transactions. Notwithstanding anything in this paragraph to the contrary, an adjustment to an Option under this paragraph shall be made in a manner that will not result in a new grant of an Option under Code Section 409A. | |||
(d) | Limits on Distribution. Distribution of shares of Common Stock or other amounts under the Plan shall be subject to the following: |
(i) | The total number of shares of Common Stock that shall be available for Restricted Stock and Restricted Stock Unit Awards under the Plan shall be limited to 25% of the total shares authorized for Awards hereunder. | ||
(ii) | Notwithstanding any other provision of the Plan, the Company shall have no liability to deliver any shares of Common Stock under the Plan or make any other distribution of benefits under the Plan unless such delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act of 1933), and the applicable requirements of any securities exchange or similar entity. | ||
(iii) | 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 non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange. |
(e) | Stock Deposit Requirements and other Restrictions. The Committee, in its discretion, may require as a condition to the grant of Awards, the deposit of Common Stock owned by the Participant receiving such grant, and the forfeiture of such grants, if such deposit is not made or maintained during the required holding period. Such shares of deposited Common Stock may not be otherwise sold or disposed of during the applicable holding period or restricted period. The Committee may also determine whether any shares issued upon exercise of a Stock Option shall be restricted in any manner. |
6. | STOCK OPTION TERM AND TYPE |
(a) | General. Stock Options granted under the Plan shall be Non-Qualified Stock Options governed by Section 83 of the Internal Revenue Code of 1986, as amended (the Code). The term of any Stock Option granted under the Plan shall be determined by the Committee, provided that the term of a Stock Option shall not exceed 10 years and one month. | ||
(b) | No Reload Rights. Stock Options granted under this Plan shall not contain any provision entitling the optionee to the automatic grant of additional options in connection with any exercise of the original option. | ||
(c) | No Repricing. Subject to Section 5(c), outstanding Stock Options granted under this Plan shall under no circumstances be repriced. |
7. | GRANT, EXERCISE AND VESTING OF STOCK OPTIONS |
(a) | Grant. Subject to the limits otherwise imposed by the terms of this Plan, the Committee has discretionary authority to determine the size of a Stock Option grant, which may be tied to meeting performance-based requirements. | ||
(b) | Exercise. Except as provided in Sections 11 and 12 (Change of Control and Termination of Employment), each Stock Option may be exercised only in accordance with the terms and conditions of the Stock Option grant and during the periods as may be established by the Committee. A Participant exercising a Stock Option shall give notice to the Company of such exercise and of the number of shares elected to be purchased prior to 4:30 P.M. CST/CDT on the day of exercise, which must be a business day at the executive offices of the Company. | ||
(c) | Vesting. Stock Options shall not be exercisable unless vested. Subject to Sections 11 and 12 Stock Options shall be fully vested only after four years of the Participants continued employment with the Company following the date of the Stock Option grant. | ||
(d) | Payment. The Exercise Price shall be paid to the Company at the time of such exercise, subject to any applicable rule or regulation adopted by the Committee: |
(i) | in cash (including check, draft, money order or wire transfer made payable to the order of the Company); | ||
(ii) | through the tender of shares of Common Stock owned by the Participant (by either actual delivery or attestation); or | ||
(iii) | by a combination of (i) and (ii) above. |
For determining the amount of the payment, Common Stock delivered pursuant to (ii) or (iii) shall have a value equal to the Fair Market Value of the Common Stock on the date of exercise. |
8. | RESTRICTED STOCK AND RESTRICTED STOCK UNITS | |
Restricted Stock and Restricted Stock Units may be awarded on either a discretionary or performance-based method. |
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(a) | Discretionary Awards. With respect to discretionary Awards of Restricted Stock and Restricted Stock Units, the Committee shall |
(i) | Select Participants to whom Awards will be made; | ||
(ii) | Determine the number of shares of Restricted Stock or the number of Restricted Stock Units to be awarded to a Participant; | ||
(iii) | Determine the length of the restricted period, which shall be no less than four years; | ||
(iv) | Determine the purchase price, if any, to be paid by the Participant for Restricted Stock or Restricted Stock Units; and | ||
(v) | Determine any restrictions other than those set forth in this Section 8. |
(b) | Performance-Based Awards. With respect to Awards of performance-based Restricted Stock and Restricted Stock Units, the intent is to grant such Awards so as to satisfy the requirements for qualified performance-based compensation under Internal Revenue Code section 162(m). Performance-based Awards are subject to the following: |
(i) | The Committee has exclusive authority to determine which Participants may be awarded performance-based Restricted Stock and Restricted Stock Units. | ||
(ii) | In order for any Participant to be awarded Restricted Stock or Restricted Stock Units for a Performance Period (defined below), the net earnings from continuing operations excluding items identified and disclosed by the Company as non-recurring or special costs and after taxes (Net Earnings) of the Company for such Performance Period must be greater than zero. | ||
(iii) | At the end of the Performance Period, if the Committee determines that the requirement of Section 8(b)(ii) has been met, each Participant eligible for a performance-based Award shall be deemed to have earned an Award equal in value to the Maximum Amount, or such lesser amount as the Committee shall determine in its discretion to be appropriate. The Committee may base this determination of grant size on performance-based criteria and in no case shall this have the effect of increasing an Award payable to another Participant. For purposes 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 date the Award is granted. | ||
(iv) | In addition to the limitation on the number of shares of Common Stock available for Awards under section 5(b) hereof, in no event shall the total value of the performance-based Restricted Stock or Restricted Stock Unit Award granted to any Participant for any one Performance Period exceed 0.5% of the Companys Net Earnings for that Performance Period (such amount is the Maximum Amount). | ||
(v) | The Committee shall determine the length of the restricted period which, subject to Sections 11 and 12, shall be no less than four years. | ||
(vi) | Performance Period means a fiscal year of the Company, or such other period as the Committee may from time to time establish. |
Subject to the restrictions set forth in this Section 8, each Participant who receives Restricted Stock shall have all rights as a stockholder with respect to such shares, including the right to vote the shares and receive dividends and other distributions. | ||
Each Participant who receives Restricted Stock Units shall be eligible to receive, at the expiration of the applicable restricted period, one share of Common Stock for each Restricted Stock Unit awarded, and the Company shall issue to each such Participant that number of shares of Common Stock. Participants who receive Restricted Stock Units shall have no rights as stockholders with respect to such Restricted Stock Units until such time as share certificates for Common Stock are issued to the Participants; provided, however, that quarterly during the applicable restricted period for all Restricted Stock Units awarded hereunder, the Company shall pay to each such Participant an amount equal to the sum of all dividends and other distributions paid by the Company during the prior quarter on that equivalent number of shares of Common Stock. | ||
The Committee may in its discretion permit a Participant to defer receipt of any Common Stock issuable upon the lapse of any restriction of Restricted Stock or Restricted Stock Units, subject to such rules and procedures as it may establish. In particular, the Committee shall establish rules relating to such deferrals intended to comply with the requirements of Internal Revenue Code §409A, including without limitation, the time when a deferral election can be made, the period of the deferral, and the events that would result in payment of the deferred amount. | ||
9. | TRANSFERABILITY OF AWARDS | |
Except as otherwise provided by rules of the Committee, no Stock Options shall be transferable by a Participant otherwise than (i) by the Participants last will and testament or (ii) by the applicable laws of descent and distribution, and such Stock Options shall be exercised during the Participants lifetime only by the Participant or his or her guardian or legal representative. Except as otherwise provided in Section 8, no shares of Restricted Stock and no Restricted Stock Units shall be sold, exchanged, transferred, pledged or otherwise disposed of during the restricted period. |
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10. | TAXES | |
Whenever the Company issues Common Stock under the Plan, the Company may require the recipient to remit to the Company an amount sufficient to satisfy any Federal, state or local tax withholding requirements prior to the delivery of such Common Stock, or the Company may in its discretion withhold from the shares to be delivered shares sufficient to satisfy all or a portion of such tax withholding requirements. | ||
11. | CHANGE OF CONTROL | |
Each outstanding Stock Option shall become immediately and fully exercisable for a period of one (1) year following the date of the following occurrences, each constituting a Change of Control: |
(a) | The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act), (a Person) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of voting securities of the Company where such acquisition causes such Person to own 20% or more of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the Outstanding Voting Securities); provided, however, that for purposes of this subsection (a), the following acquisitions shall not be deemed to result in a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction that complies with clauses (i), (ii) and (iii) of subsection (c) below; and provided, further, that if any Persons beneficial ownership of the Outstanding Voting Securities reaches or exceeds 20% as a result of a transaction described in clause (i) or (ii) above, and such Person subsequently acquires beneficial ownership of additional voting securities of the Company, such subsequent acquisition shall be treated as an acquisition that causes such Person to own 20% or more of the Outstanding Voting Securities; or | ||
(b) | Individuals who, as of the date hereof, constitute the Board of Directors (the Incumbent Board) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Companys 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 was a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or | ||
(c) | The approval by the shareholders of the Company of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (Business Combination) or, if consummation of such Business Combination is subject, at the time of such approval by stockholders, to the consent of any government or governmental agency, the obtaining of such consent (either explicitly or implicitly by consummation); excluding, however, such a Business Combination pursuant to which (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that as a result of such transaction owns the Company or all or substantially all of the Companys assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Voting Securities, (ii) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or | ||
(d) | Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company. |
After such one (1) year period the normal Stock Option exercise provisions of the Plan shall govern. Notwithstanding any other provision of the Plan, but subject to Section 6, in the event a Participants employment with the Company is terminated within two (2) years of any of the events specified in (a), (b), (c) or (d), all outstanding Stock Options of such Participant at that date of termination shall be exercisable for a period of six (6) months beginning on the date of termination. | ||
With respect to Stock Option grants outstanding as of the date of any such Change of Control which require the deposit of owned Common Stock as a condition to obtaining rights, the deposit requirement shall be terminated as of the date of the Change of Control. | ||
In the event of a Change of Control, a Participant shall fully vest in all shares of Restricted Stock and Restricted Stock Units, effective as of the date of such Change of Control. If the Change of Control constitutes a change in control event as described in IRS regulations or other guidance under Code section 409A(a)(2)(A)(v), Participants Restricted Stock Units shall be settled upon |
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the Change of Control. If the Change of Control does not constitute a change in control event as described in IRS regulations or other guidance under Code section 409A(a)(2)(A)(v), Restricted Stock Units that are not Section 409A Restricted Stock Units and on which a deferral election was not made shall be settled upon the Change of Control. However, the Section 409A Restricted Stock Units, or Restricted Stock Units for which a proper deferral election was made, shall be settled on the date the original restriction period would have closed, or the date elected pursuant to the proper deferral election, as applicable. | ||
12. | TERMINATION OF EMPLOYMENT |
(a) | Resignation or Termination for Cause. If the Participants employment by the Company is terminated by either |
(i) | the voluntary resignation of the Participant, or | ||
(ii) | a Company discharge due to Participants illegal activities, poor work performance, misconduct or violation of the Companys Code of Conduct, policies or practices, |
then Participants Stock Options shall terminate three months after such termination (but in no event beyond the original full term of the Stock Options) and no Stock Options shall become exercisable after such termination, and all shares of Restricted Stock and Restricted Stock Units which are subject to restriction and not vested on the date of termination shall be forfeited. |
(b) | Other Termination. If the Participants employment by the Company terminates for any reason other than specified in Sections 11, 12 (a), (c), (d) or (e), the following rules shall apply: |
(i) | In the event that, at the time of such termination, the sum of the Participants age and service with the Company equals or exceeds 70, the Participants outstanding Stock Options shall continue to become exercisable according to the schedule established at the time of grant unless otherwise provided in the applicable Award agreement, and all shares of Restricted Stock and Restricted Stock Units shall fully vest and be paid (or deferred, as appropriate) immediately. Stock Options shall remain exercisable for the remaining full term of such Stock Options. | ||
(ii) | In the event that, at the time of such termination, the sum of Participants age and service with the Company is less than 70, Participants outstanding unexercisable Stock Options and unvested Restricted Stock and Restricted Stock Units shall become exercisable or vest, as the case may be, and be paid (or deferred, as appropriate) immediately as of the date of termination, in a pro-rata amount based on the full months of employment completed during the full vesting period from the date of grant to the date of termination with such newly-vested Stock Options and Stock Options exercisable on the date of termination remaining exercisable for the lesser of one year from the date of termination and the original full term of the Stock Option. All other Stock Options, shares of Restricted Stock and Restricted Stock Units shall be forfeited as of the date of termination. Provided, however, that if the Participant is an executive officer of the Company, the Participants outstanding Stock Options which, as of the date of termination are not yet exercisable, shall become exercisable effective as of the date of such termination and, with all outstanding Stock Options already exercisable on the date of termination, shall remain exercisable for the lesser of one year following the date of termination and the original full term of the Stock Option, and all shares of Restricted Stock and Restricted Stock Units shall fully vest as of the date of termination and be paid (or deferred, as appropriate) immediately. |
Notwithstanding the foregoing, any Section 409A Restricted Stock Units that vest under this Section 12(b) shall be paid on the Participants separation from service (within the meaning of Code section 409A), or in the case of a Participant who is a specified employee (within the meaning of Code section 409A) shall be paid on the first day of the seventh month following the month of separation from service. |
(c) | Death . If a Participant dies while employed by the Company, any Stock Option previously granted under this Plan shall fully vest and become exercisable upon death and together with all other outstanding Stock Options may be exercised by the person(s) authorized in accordance with Section 13(f) of this Plan. Such Stock Options shall be exercisable for the remaining full term of such Awards. | ||
A Participant who dies while employed by the Company during any applicable restricted period shall fully vest in Awards of Restricted Stock or Restricted Stock Units, effective as of the date of death, and such shares shall be paid to the person(s) designated under the terms of Section 13(f) of this Plan. | |||
(d) | Retirement. The Committee shall determine, at the time of grant, the treatment of the Stock Options, Restricted Stock and Restricted Stock Units upon the retirement of the Participant. Unless other terms are specified in the original Grant, if the termination of employment is due to a Participants retirement on or after age 55, the Participant may exercise a Stock Option, subject to the original terms and conditions of the Stock Option and shall fully vest in and be paid or have deferred all shares of Restricted Stock or Restricted Stock Units effective as of the date of retirement (unless any such Award specifically provides otherwise). However, the Restricted Stock Units without a proper deferral election that vest under this Section 12(d) shall be payable on the Participants separation from service (within the meaning of Code section 409A) or in the case of a Participant who is a specified employee (within the meaning of Code section 409A) shall be paid on the first day of the seventh month following the month of separation from service. |
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A Restricted Stock Unit that could vest upon retirement under this Section 12(d) at any time within the Awards restricted period shall be referred to as a Section 409A Restricted Stock Unit. | |||
(e) | Spin-offs. If the termination of employment is due to the cessation, transfer, or spin-off of a complete line of business of the Company, the Committee, in its sole discretion, shall determine the treatment of all outstanding Awards under the Plan. Such treatment shall be consistent with Code section 409A, and in particular will take into account whether a separation from service has occurred within the meaning of section 409A. |
13. | 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 13. | ||
(b) | Selection of Committee. The Committee shall be selected by the Board, and shall consist of two or more members of the Board. | ||
(c) | Powers of Committee. The authority to manage and control the operations and administration of the Plan shall be vested in the Committee, subject to the following: |
(i) | Subject to the provisions of the Plan, the Committee will have the authority and discretion to select from among the eligible Company employees those persons who shall receive Awards, to determine the time or times of receipt, to determine the types of Awards and the number of shares covered by the Awards, to establish the terms, conditions, performance criteria, restrictions, and other provisions of such Awards, and (subject to the restrictions imposed by Section 14) to cancel or suspend Awards. In making such determinations, the Committee may take into account the nature of services rendered by the individual, the individuals present and potential contribution to the Companys success and such other factors as the Committee deems relevant. | ||
(ii) | The Committee will have the authority and discretion to establish terms and conditions of Awards as the Committee determines to be necessary or appropriate to conform to applicable requirements or practices of jurisdictions outside of the United States. | ||
(iii) | The Committee will have the authority and discretion to interpret the Plan, to establish, amend, and rescind any rules and regulations relating to the Plan, to determine the terms and provisions of any agreements made pursuant to the Plan, and to make all other determinations that may be necessary or advisable for the administration of the Plan. | ||
(iv) | Any interpretation of the Plan by the Committee and any decision made by it under the Plan is final and binding. | ||
(v) | The Plan shall at all times be managed and operated in accordance with applicable laws. |
(d) | Delegation by Committee. Except to the extent prohibited by applicable law or the applicable rules of a stock exchange, the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it. Any such allocation or delegation may be revoked by the Committee at any time. | ||
(e) | Code section 409A. To the extent that such requirements are applicable, this Plan is intended to comply with the requirements of section 409A of the Internal Revenue Code of 1986 and shall be interpreted and administered in accordance with that intent. If any provision of the Plan would otherwise conflict with or frustrate this intent, that provision will be interpreted and deemed amended so as to avoid the conflict. Further, for purposes of the limitations on nonqualified deferred compensation under section 409A, each payment of compensation under this Plan shall be treated as a separate payment of compensation for purposes of applying the section 409A deferral election rules and the exclusion from section 409A for certain short-term deferral amounts. | ||
(f) | Designation of Beneficiary . Each Participant to whom an Award has been made under the Plan may designate a beneficiary or beneficiaries to exercise any Award or to receive any payment which under the terms of the Plan and the relevant Award Agreement may become exercisable or payable on or after the Participants death. At any time, and from time to time, any such designation may be changed or cancelled by the Participant without the consent of any such beneficiary. Any such designation, change or cancellation must be on a form provided for that purpose by the Committee and shall not be effective until received by the Committee. Such form may establish other rules as the Committee deems appropriate. If no beneficiary has been properly designated by a deceased Participant, or if all the designated beneficiaries have predeceased the Participant, the beneficiary shall be the Participants estate. If the Participant designates more than one beneficiary, any Stock Options shall be divided among beneficiaries equally, and any payments under the Plan to such beneficiaries shall be made in equal shares, unless the Participant has expressly designated otherwise, in which case Stock Options shall be divided, and the payments shall be made, in the portions designated by the Participant. |
14. | AMENDMENTS OF THE PLAN | |
The Committee may from time to time prescribe, amend and rescind rules and regulations relating to the Plan. Subject to the approval of the Board of Directors, where required, the Committee may at any time terminate, amend, or suspend the operation of |
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the Plan, provided that no action shall be taken by the Board of Directors or the Committee without the approval of the stockholders which would |
(a) | except as provided in Section 5(c), materially increase the number of shares which may be issued under the Plan; | ||
(b) | permit granting of Stock Options at less than Fair Market Value; | ||
(c) | except as provided in Section 5(c), permit the repricing of outstanding Stock Options; or | ||
(d) | amend the maximum shares set forth in Section 5(b) which 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 Award without the consent of the Participant. There is no obligation for uniformity of treatment of Participants under the Plan. | ||
15. | FOREIGN JURISDICTIONS | |
The Committee may adopt, amend, and terminate such arrangements, not inconsistent with the intent of the Plan, as it may deem necessary or desirable to make available tax or other benefits of the laws of any foreign jurisdiction, to employees of the Company who are subject to such laws and who receive Awards under the Plan. | ||
16. | NON-ALIENATION OF RIGHTS AND BENEFITS | |
Subject to Section 9, no right or benefit under the Plan shall be subject to alienation, sale, assignment, pledge, or encumbrance and any attempt to do so shall be void. No right or benefit under the Plan shall be subject to the debts, contacts, liabilities or torts of the person entitled to such rights or benefits. | ||
17. | LIMITATION OF LIABILITY OR OBLIGATION OF THE COMPANY | |
Nothing in the Plan shall be construed |
(a) | to give any employee of the Company any right to be granted any Award other than at the sole discretion of the Committee; | ||
(b) | to give any Participant any rights whatsoever with respect to shares of Common Stock except as specifically provided in the Plan; | ||
(c) | to limit in any way the right of the Company or any Subsidiary to terminate, change or modify, with or without cause, the employment of any Participant at any time; or | ||
(d) | to be evidence of any agreement or understanding, express or implied, that the Company or any Subsidiary will employ any Participant in any particular position at any particular rate of compensation or for any particular period of time. |
Payments and other benefits received by a Participant under an Award shall not be deemed part of a Participants regular, recurring compensation for purposes of any termination, indemnity or severance pay laws and shall not be included in, nor have any effect on, the determination of benefits under any other employee benefit plan, contract or similar arrangement provided by the Company or any Subsidiary, unless expressly so provided by such other plan, contract or arrangement. | ||
18. | NO LOANS | |
The Company shall not lend money to any Participant to finance a transaction under this Plan. | ||
19. | NOTICES | |
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: |
Attention: Corporate Compensation
General Mills, Inc. Number One General Mills Boulevard Minneapolis, MN 55426 |
20. | RECOGNITION AWARDS | |
Up to 10,000 shares of Common Stock may be awarded as Recognition Awards in any calendar year during the duration of the Plan. A Company officer may identify employees of the Company who have made special contributions to the business and/or performance of the Company and request that the Corporate Secretary deliver Recognition Awards to such Participants in recognition of such contributions. Each year, the Committee shall review the grants of Recognition Awards made in the prior year. Recognition Award shares may be fully vested upon grant or subject to such vesting conditions as the Committee may authorize. |
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1. | PURPOSE OF THE PLAN | |
The purpose of the General Mills, Inc. 2007 Stock Compensation Plan (the Plan) is to attract and retain able individuals by rewarding employees of General Mills, Inc., its subsidiaries and affiliates (defined as entities in which General Mills, Inc. has a significant equity or other interest) (collectively, the Company) and to align the interests of employees with those of the stockholders of the Company. The Company shall include any successors to General Mills, Inc. or any future parent corporations or similar entities. | ||
2. | EFFECTIVE DATE AND DURATION OF PLAN | |
This Plan shall become effective as of September 24, 2007, subject to the approval of the stockholders of the Company at the Annual Meeting on September 24, 2007. Awards may be made under the Plan until December 31, 2009. | ||
3. | ELIGIBLE PERSONS | |
Only persons who are employees of the Company shall be eligible to receive grants of Stock Options, Restricted Stock, Restricted Stock Units, and/or Stock Appreciation Rights (each defined below) and become Participants under the Plan. The Compensation Committee of the Companys Board of Directors (the Committee) shall exercise the discretionary authority to determine from time to time the employees of the Company who are eligible to participate in this Plan. | ||
4. | AWARD TYPES |
(a) | Stock Option Awards. Under this Plan, the Committee may award Participants options (Stock Options) to purchase a fixed number of shares of common stock ($.10 par value) of the Company (Common Stock). The grant of a Stock Option entitles the Participant to purchase shares of Common Stock at an Exercise Price established by the Committee which shall not be less than 100% of the Fair Market Value of the Common Stock on the date of grant, and may exceed the Fair Market Value on the grant date, at the Committees discretion. Fair Market Value shall equal the closing price on the New York Stock Exchange of the Companys Common Stock on the applicable date. | ||
(b) | Restricted Stock Awards. The Committee may grant Participants, subject to certain restrictions, shares of Common Stock (Restricted Stock) or the right to receive shares of Common Stock or cash (Restricted Stock Units). | ||
(c) | Stock Appreciation Rights. The Committee may also award Participants Stock Appreciation Rights. A Stock Appreciation Right is a right to receive, upon exercise of that right, an amount, which may be paid in cash, shares of Common Stock, or a combination thereof in the complete discretion of the Committee, equal to the difference between the Fair Market Value of one share of Common Stock as of the date of exercise and the Fair Market Value of one share of Common Stock on the date of grant. |
Stock Options, Restricted Stock, Restricted Stock Units and Stock Appreciation Rights are sometimes referred to as Awards. To the extent any Award is subject to section 409A of the Internal Revenue Code of 1986, as amended (Code section 409A), the terms and administration of such Award shall comply therewith and IRS guidance thereunder. If any provision of the Plan would otherwise conflict with or frustrate this intent, that provision will be interpreted and deemed amended so as to avoid the conflict. Further, for purposes of the limitations on nonqualified deferred compensation under section 409A, each payment of compensation under this Plan shall be treated as a separate payment of compensation for purposes of applying the section 409A deferral election rules and the exclusion from section 409A for certain short-term deferral amounts. | ||
5. | COMMON STOCK SUBJECT TO THE PLAN |
(a) | Maximum Shares Available for Delivery. Subject to Section 5(c), the maximum number of shares of Common Stock available for Awards to Participants under the Plan shall be 10,000,000. Stock Options and Stock Appreciation Rights awarded shall reduce the number of shares available for Awards by one share for every one share granted; provided that Stock Appreciation Rights that may be settled only in cash shall not reduce the number of shares available for Awards. Awards of Restricted Stock and Restricted Stock Units settled in shares of Common Stock shall reduce the number of shares available for Award by one share for every one share awarded, up to 25 percent of the total number of shares available; beyond that, Restricted Stock and Restricted Stock Units settled in shares of Common Stock shall reduce the number of shares available for Award by five shares for every one share awarded. Restricted Stock Units that may be settled only in cash shall not reduce the number of shares available for Awards. |
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The Company will repurchase a number of shares of Common Stock in the public market at least equal to the number of shares of Common Stock issued under this Plan. | |||
In addition, any Common Stock covered by a Stock Option or Stock Appreciation Right granted under the Plan which is forfeited prior to the end of the vesting period shall be deemed not to be granted for purposes of determining the maximum number of shares of Common Stock available for Awards under the Plan. In the event a Stock Appreciation Right is settled for cash, the number of shares deducted against the maximum number of shares provided in Section 5(a) shall be restored and again be available for Awards. However, if (i) any Stock Option or Stock Appreciation Right that is exercised through the delivery of Common Stock in satisfaction of the Exercise Price, and (ii) withholding tax requirements arising upon exercise of any Stock Option or Stock Appreciation Right are satisfied through the withholding of Common Stock otherwise deliverable in connection with such exercise, the full number of shares of Common Stock underlying any such Stock Option or Stock Appreciation Right, or portion thereof being so issued shall count against the maximum number of shares available for grants under the Plan. | |||
Upon forfeiture or termination of Restricted Stock or Restricted Stock Units prior to vesting, the shares of Common Stock subject thereto shall again be available for Awards under the Plan. | |||
(b) | Individual Share Limits. The number of shares of Common Stock subject to Stock Options and Stock Appreciation Rights or shares of Common Stock available for Restricted Stock or Restricted Stock Unit Awards granted under the Plan to any single Participant shall not exceed, in the aggregate, 1,000,000 shares and/or units per fiscal year. This per-Participant limit shall be construed and applied consistently with Code section 162(m) and the regulations thereunder. | ||
(c) | Adjustments for Corporate Transactions. If a corporate transaction has occurred affecting the Common Stock such that an adjustment to outstanding Awards is required to preserve (or prevent enlargement of) the benefits or potential benefits intended at the time of grant, then in such manner as the Committee deems equitable, an appropriate adjustment shall be made to (i) the number and kind of shares which may be awarded under the Plan; (ii) the number and kind of shares subject to outstanding Awards; (iii) the number of shares credited to an account; (iv) the share limits imposed under the Plan; and if applicable; (v) the Exercise Price of outstanding Options and Stock Appreciation Rights provided that the number of shares of Common Stock subject to any Option or Stock Appreciation Right denominated in Common Stock shall always be a whole number. For this purpose a corporate transaction includes, but is not limited to, any dividend or other distribution (whether in the form of cash, Common Stock, securities of a subsidiary of the Company, other securities or other property), recapitalization, stock split, reverse stock split, combination of shares, 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. Notwithstanding anything in this paragraph to the contrary, an adjustment to an Option or Stock Appreciation Right under this paragraph shall be made in a manner that will not result in the grant of a new Option or Stock Appreciation Right under Code section 409A. | ||
(d) | Limits on Distribution. Distribution of shares of Common Stock or other amounts under the Plan shall be subject to the following: |
(i) | Notwithstanding any other provision of the Plan, the Company shall have no liability to deliver any shares of Common Stock under the Plan or make any other distribution of benefits under the Plan unless such delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act of 1933), and the applicable requirements of any securities exchange or similar entity. | ||
(ii) | To the extent that the Plan provides for issuance of stock certificates to reflect the issuance of shares of Common Stock or Restricted Stock, the issuance may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange. |
(e) | Stock Deposit Requirements and other Restrictions. The Committee, in its discretion, may require as a condition to the grant of Awards, the 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 the required holding period. Such shares of deposited Common Stock may not be otherwise sold or disposed of during the applicable holding period or restricted period. The Committee may also determine whether any shares issued upon exercise of a Stock Option or Stock Appreciation Right shall be restricted in any manner. |
6. | STOCK OPTIONS AND STOCK APPRECIATION RIGHTS TERMS AND TYPE |
(a) | General. Stock Options granted under the Plan shall be Non-Qualified Stock Options governed by Section 83 of the Internal Revenue Code of 1986, as amended (the Code). The term of any Stock Option and Stock Appreciation Right granted under the Plan shall be determined by the Committee, provided that said term shall not exceed 10 years and one month. |
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(b) | No Reload Rights. Neither Stock Options nor Stock Appreciation Rights granted under this Plan shall contain any provision entitling the optionee or right-holder to the automatic grant of additional options or rights in connection with any exercise of the original option or right. | ||
(c) | No Repricing. Subject to Section 5(c), outstanding Stock Options and Stock Appreciation Rights granted under this Plan shall under no circumstances be repriced. |
7. | GRANT, EXERCISE AND VESTING OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS |
(a) | Grant. Subject to the limits otherwise imposed by the terms of this Plan, the Committee has discretionary authority to determine the size of a Stock Option or Stock Appreciation Right Award, which may be tied to meeting performance-based requirements. | ||
(b) | Exercise. Except as provided in Sections 11 and 12 (Change of Control and Termination of Employment), each Stock Option or Stock Appreciation Right may be exercised only in accordance with the terms and conditions of the Stock Option grant or Stock Appreciation Right and during the periods as may be established by the Committee. A Participant exercising a Stock Option or Stock Appreciation Right shall give notice to the Company of such exercise and of the number of shares elected to be purchased prior to 4:30 P.M. CST/CDT on the day of exercise, which must be a business day at the executive offices of the Company. | ||
(c) | Vesting. Stock Options and Stock Appreciation Rights shall not be exercisable unless vested. Subject to Sections 11 and 12 Stock Options and Stock Appreciation Rights shall be fully vested only after four years of the Participants continued employment with the Company following the date of the grant. | ||
(d) | Payment of Exercise Price. The Exercise Price for Stock Options shall be paid to the Company at the time of such exercise, subject to any applicable rule or regulation adopted by the Committee: |
(i) | in cash (including check, draft, money order or wire transfer made payable to the order of the Company); | ||
(ii) | through the tender of shares of Common Stock owned by the Participant (by either actual delivery or attestation); | ||
(iii) | by a combination of (i) and (ii) above; or | ||
(iv) | by authorizing a third party broker to sell a sufficient number of shares of Common Stock acquired upon exercise of the Stock Option and remit to the Company such sales proceeds to pay the entire Exercise Price and any tax withholding resulting from the exercise. |
For determining the amount of the payment, Common Stock delivered pursuant to (ii) or (iii) shall have a value equal to the Fair Market Value of the Common Stock on the date of exercise. |
8. | RESTRICTED STOCK AND RESTRICTED STOCK UNITS | |
Restricted Stock and Restricted Stock Units may be awarded on either a discretionary or performance-based method. |
(a) | Discretionary Awards. With respect to discretionary Awards of Restricted Stock and Restricted Stock Units, the Committee shall: |
(i) | Select Participants to whom Awards will be made; | ||
(ii) | Subject to the otherwise applicable Plan limits, determine the number of shares of Restricted Stock or the number of Restricted Stock Units to be awarded to a Participant; | ||
(iii) | Determine the length of the restricted period, which shall be no less than four years; | ||
(iv) | Determine the purchase price, if any, to be paid by the Participant for Restricted Stock or Restricted Stock Units; | ||
(v) | Determine whether Restricted Stock Unit Awards will be settled in shares of Common Stock or cash; and | ||
(vi) | Determine any restrictions other than those set forth in this Section. |
(b) | Performance-Based Awards. With respect to Awards of performance-based Restricted Stock and Restricted Stock Units, the intent is to grant such Awards so as to satisfy the requirements for qualified performance-based compensation under Code Section 162(m). Performance-based Awards are subject to the following: |
(i) | The Committee has exclusive authority to determine which Participants may be awarded performance-based Restricted Stock and Restricted Stock Units and whether any Restricted Stock Unit Awards will be settled in shares of Common Stock, cash, or a combination thereof. | ||
(ii) | In order for any Participant to be awarded Restricted Stock or Restricted Stock Units for a Performance Period (defined below), the net earnings from continuing operations excluding items identified and disclosed by the |
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Company as non-recurring or special costs and after taxes (Net Earnings) of the Company for such Performance Period must be greater than zero. |
(iii) | At the end of the Performance Period, if the Committee determines that the requirement of Section 8(b)(ii) has been met, each Participant eligible for a performance-based Award shall be deemed to have earned an Award equal in value to the Maximum Amount, or such lesser amount as the Committee shall determine in its discretion to be appropriate. The Committee may base this determination of grant size on performance-based criteria and in no case shall this have the effect of increasing an Award payable to any other Participant. For purposes 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 date the Award is granted. | ||
(iv) | In addition to the limitation on the number of shares of Common Stock available for Awards under section 5(b) hereof, in no event shall the total value of the performance-based Restricted Stock or Restricted Stock Unit Award granted to any Participant for any one Performance Period exceed 0.5 percent of the Companys Net Earnings for that Performance Period (such amount is the Maximum Amount). | ||
(v) | The Committee shall determine the length of the restricted period which, subject to Sections 11 and 12, shall be no less than four years. | ||
(vi) | Performance Period means a fiscal year of the Company, or such other period as the Committee may from time to time establish. |
Subject to the restrictions set forth in this Section, each Participant who receives Restricted Stock shall have all rights as a stockholder with respect to such shares, including the right to vote the shares and receive dividends and other distributions. | ||
Each Participant who is awarded Restricted Stock Units that are settled in shares of Common Stock shall be eligible to receive, at the expiration of the applicable restricted period (or such later time as provided herein), one share of Common Stock for each Restricted Stock Unit awarded, and the Company shall issue to each such Participant that number of shares of Common Stock. Each Participant who is awarded Restricted Stock Units that are settled in cash shall receive an amount equal to the Fair Market Value of a share of Common Stock on the date the applicable restricted period ends, multiplied by the number of Units awarded. Participants who receive Restricted Stock Units shall have no rights as stockholders with respect to such Restricted Stock Units until such time as share certificates for Common Stock are issued to the Participants (if applicable); provided, however, that as of the first day of each quarter, during the applicable restricted period for all Restricted Stock Units awarded hereunder, the Company shall pay to each such Participant an amount equal to the sum of all dividends and other distributions paid by the Company during the prior quarter on that equivalent number of shares of Common Stock. | ||
The Committee may in its discretion permit a Participant to defer receipt of any Common Stock or cash issuable upon the lapse of any restriction of Restricted Stock or Restricted Stock Units, subject to such rules and procedures as it may establish. In particular, the Committee shall establish rules relating to such deferrals intended to comply with the requirements of Code section 409A, including without limitation, the time when a deferral election can be made, the period of the deferral, and the events that would result in payment of the deferred amount. | ||
9. | TRANSFERABILITY OF AWARDS | |
Except as otherwise provided by rules of the Committee, no Stock Options or Stock Appreciation Right shall be transferable by a Participant otherwise than (i) by the Participants last will and testament or (ii) by the applicable laws of descent and distribution, and such Stock Options or Stock Appreciation Right shall be exercised during the Participants lifetime only by the Participant or his or her guardian or legal representative. Except as otherwise provided in Section 8, no shares of Restricted Stock and no Restricted Stock Units shall be sold, exchanged, transferred, pledged or otherwise disposed of during the restricted period. | ||
10. | TAXES | |
The Company has the right to withhold amounts from Awards to satisfy tax obligations as it deems appropriate. Whenever the Company issues Common Stock under the Plan, unless it decides to satisfy the withholding obligations through additional withholding on salary or other wages, it may require the recipient to remit to the Company an amount sufficient to satisfy any Federal, state, local or foreign tax withholding requirements prior to the delivery of such Common Stock, or the Company may in its discretion withhold from the shares to be delivered shares sufficient to satisfy all or a portion of such tax withholding requirements; provided however, except as otherwise provided by the Committee, that the total tax withholding where shares are used to satisfy such tax obligations shall not exceed the Companys minimum statutory withholding obligations (based on minimum statutory withholding rates for Federal, state and foreign tax purposes, including payroll taxes, that are applicable to such supplemental taxable income). |
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11. | CHANGE OF CONTROL |
(a) | Each of the following (i) through (iv) constitutes a Change of Control: |
(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 the Company where such acquisition causes such Person to own 20% or more of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the Outstanding Voting Securities); provided, however, that for purposes of this subsection (i), the following acquisitions shall not be deemed to result in a Change of 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 Persons beneficial ownership of the Outstanding 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 Voting Securities; or | ||
(ii) | Individuals who, as of the date hereof, constitute the Board of Directors (the Incumbent Board) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Companys 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) | Consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries (each, a Business Combination ); 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 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 Companys 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 Securities, (B) 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 (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 stockholders of the Company of a complete liquidation or dissolution of the Company. |
(b) | If, within two years after a Change of Control a Participant experiences an involuntary separation from service initiated by the Company for reasons other than cause (for this purpose cause shall have the same meaning as that term has in Section 4.2(b)(ii) of Plan B of the General Mills Separation Pay and Benefits Program for Officers), or a separation from service for good reason actually entitling the employee to certain separation benefits under Section 4.2(a)(ii) of Plan B of the General Mills Separation Pay and Benefits Program for Officers, the following applies: |
(i) | All of his or her outstanding Stock Options and Stock Appreciation Rights shall fully vest immediately and remain exercisable for the one-year period beginning on the date of his or her separation from service. | ||
(ii) | All shares of Restricted Stock and Restricted Stock Units shall fully vest and be settled immediately (subject to a proper deferral election made with respect to the Award); provided, however, that any Section 409A Restricted Stock Units (not subject to a proper deferral election) shall be settled on the Participants separation from service (within the meaning of Code section 409A) or in the case of a Participant who is a specified employee (within the |
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meaning of Code section 409A) on the first day of the seventh month following the month of the Participants separation from service. |
(c) | If, pending a Change of Control, the Committee determines the Common Stock will cease to exist without an adequate replacement security that preserves Participants economic rights and positions, then, by action of the Committee, the following shall occur: |
(i) | All Stock Options and Stock Appreciation Rights shall become exercisable immediately prior to the consummation of the Change of Control in such manner as is deemed fair and equitable by the Committee. | ||
(ii) | The restrictions on all shares of Restricted Stock shall lapse and Restricted Stock Units shall vest immediately prior to consummation of the Change of Control. | ||
(iii) | If the Change of Control constitutes a change in control event as described in IRS regulations or other guidance under Code section 409A(a)(2)(A)(v), Participants Restricted Stock Units shall be settled upon the Change of Control. | ||
(iv) | If the Change of Control does not constitute a change in control event as described in IRS regulations or other guidance under Code section 409A(a)(2)(A)(v), Restricted Stock Units that are not Section 409A Restricted Stock Units and on which a deferral election was not made shall be settled upon the Change of Control. However, the Section 409A Restricted Stock Units, or Restricted Stock Units for which a proper deferral election was made, shall be settled in cash equal to the Fair Market Value of the Restricted Stock Units at the time of the Change of Control, plus interest at a rate of Prime plus 1% from the Change of Control to the date of payment, which shall be the time the original restriction period would have closed, or the date elected pursuant to the proper deferral election, as applicable. |
(d) | With respect to any outstanding Awards as of the date of any Change of Control which require the deposit of owned Common Stock as a condition to obtaining rights, the deposit requirement shall be terminated as of the date of the Change of Control. |
12. | TERMINATION OF EMPLOYMENT |
(a) | Resignation or Termination for Cause. If the Participants employment by the Company is terminated by either |
(i) | the voluntary resignation of the Participant, or | ||
(ii) | a Company discharge due to Participants illegal activities, poor work performance, misconduct or violation of the Companys Code of Conduct, policies or practices, |
then the Participants Stock Options and Stock Appreciation Rights shall terminate three months after such termination (but in no event beyond the original full term of the Stock Options or Stock Appreciation Rights) and no Stock Options or Stock Appreciation Rights shall become exercisable after such termination, and all shares of Restricted Stock and Restricted Stock Units which are subject to restriction on the date of termination shall be forfeited. |
(b) | Other Termination. If the Participants employment by the Company terminates involuntarily at the initiation of the Company for any reason other than specified in Sections 11, 12 (a), (d) or (e), the following rules shall apply: |
(i) | In the event that, at the time of such involuntary termination, the sum of the Participants age and years of service with the Company equals or exceeds 70, the Participants outstanding Stock Options and Stock Appreciation Rights shall continue to become exercisable according to the schedule established at the time of grant unless otherwise provided in the applicable Award agreement, the restriction on all shares of Restricted Stock shall lapse and Restricted Stock Units shall vest and be paid (or deferred, as appropriate) immediately. Stock Options and Stock Appreciation Rights shall remain exercisable for the remaining full term of such Awards. | ||
(ii) | In the event that, at the time of such involuntary termination, the sum of the Participants age and years of service with the Company is less than 70, the Participants outstanding unexercisable Stock Options and Stock Appreciation Rights, and unvested Restricted Stock and Restricted Stock Units, shall become exercisable or vest and paid or deferred immediately, as the case may be, as of the date of termination, in a pro-rata amount based on the full months of employment completed during the full vesting period from the date of grant to the date of termination with such newly-vested Stock Options and Stock Appreciation Rights, and Stock Options and Stock Appreciation Rights exercisable on the date of termination, remaining exercisable for the lesser of one year from the date of termination and the original full term of the Stock Option and/or Stock Appreciation Right. All other Stock Options, Stock Appreciation Rights, shares of Restricted Stock and Restricted Stock Units shall be forfeited as of the date of termination. Provided, however, that if the Participant is an executive officer of the Company, the Participants outstanding Stock Options and Stock Appreciation Rights which, as of the date of termination are not yet exercisable, shall become exercisable effective as of the date of such termination and, with all outstanding |
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Stock Options and Stock Appreciation Rights already exercisable on the date of termination, shall remain exercisable for the lesser of one year following the date of termination and the original full term of the Stock Option or Stock Appreciation Right, and all shares of Restricted Stock and Restricted Stock Units shall vest as of the date of termination and be paid or deferred immediately. |
Notwithstanding the foregoing, any Section 409A Restricted Stock Units that vest under this Section 12(b) shall be paid on the Participants separation from service (within the meaning of Code section 409A), or in the case of a Participant who is a specified employee (within the meaning of Code section 409A) shall be paid on the first day of the seventh month following the month of separation from service. |
(c) | Death . If a Participant dies while employed by the Company, any Stock Option or Stock Appreciation Right previously granted under this Plan shall fully vest and become exercisable upon death and together with all other outstanding Stock Options may be exercised by the person(s) authorized in accordance with Section 13(e) of this Plan. Such Stock Options shall be exercisable for the remaining full term of such Awards. | ||
A Participant who dies while employed by the Company during any applicable restricted period shall fully vest in Awards of Restricted Stock or Restricted Stock Units, effective as of the date of death, and such shares shall be paid as of the first day of the month following death to the person(s) designated under the terms of Section 13(e) of this Plan. | |||
(d) | Retirement. The Committee shall determine, at the time of grant, the treatment of Awards upon the retirement of the Participant. Unless other terms are specified in the original Award, if the termination of employment is due to a Participants retirement on or after age 55 and completion of five years of eligibility service under the General Mills Pension Plan, the Participant may exercise a Stock Option or Stock Appreciation Right pursuant to the original terms and conditions of such Awards, and shall fully vest in, and be paid or have deferred, all shares of Restricted Stock or shares or cash attributable to Restricted Stock Units effective as of the date of employment termination as a retiree. However, the Restricted Stock Units without a proper deferral election that vest under this Section 12(d) shall be payable on the Participants separation from service (within the meaning of Code section 409A) or in the case of a Participant who is a specified employee (within the meaning of Code section 409A) shall be paid on the first day of the seventh month following the month of separation from service. | ||
A Restricted Stock Unit that could vest upon retirement under this Section 12(d) at any time within the Awards restricted period shall be referred to as a Section 409A Restricted Stock Unit. | |||
Notwithstanding the above, the terms of this Section 12(d) shall not apply to a Participant who, prior to a Change of Control, is terminated for cause as described in Section 12(a)(ii); said Participant shall be treated as provided in Section 12(a). | |||
(e) | Spin-offs. If the termination of employment is due to the cessation, transfer, or spin-off of a complete line of business of the Company, the Committee, in its sole discretion, shall determine the vesting treatment of all outstanding Awards under the Plan. Such treatment shall be consistent with Code section 409A, and in particular will take into account whether a separation from service has occurred within the meaning of section 409A. |
13. | 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. | ||
(b) | Selection of Committee. The Committee shall be selected by the Board, and shall consist of two or more outside, disinterested members of the Board who, in the judgment of the Board, are qualified to administer the Plan as contemplated by Rule 16b-3 of the Securities and Exchange Act of 1934 (or any successor rule), Code section 162(m) and the regulations thereunder (or any successors thereto), and any rules and regulations of a stock exchange on which Common Stock is traded. | ||
(c) | Powers of Committee. The authority to manage and control the operations and administration of the Plan shall be vested in the Committee, subject to the following: |
(i) | Subject to the provisions of the Plan, the Committee will have the authority and discretion to select from among the eligible Company employees those persons who shall receive Awards, to determine the time or times of receipt, to determine the types of Awards and the number of shares covered by the Awards, to establish the terms, conditions, performance criteria, restrictions, and other provisions of such Awards, and (subject to the restrictions imposed by Section 14) to cancel or suspend Awards. In making such determinations, the Committee may take into account the nature of services rendered by the individual, the individuals present and potential contribution to the Companys success and such other factors as the Committee deems relevant. |
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(ii) | The Committee will have the authority and discretion to establish terms and conditions of Awards as the Committee determines to be necessary or appropriate to conform to applicable requirements or practices of jurisdictions outside of the United States. | ||
(iii) | The Committee will have the authority and discretion to interpret the Plan, to establish, amend, and rescind any rules and regulations relating to the Plan, to determine the terms and provisions of any agreements made pursuant to the Plan, and to make all other determinations that may be necessary or advisable for the administration of the Plan. | ||
(iv) | Any interpretation of the Plan by the Committee and any decision made by it under the Plan is final and binding. |
(d) | Delegation by Committee. Except to the extent prohibited by applicable law or the applicable rules of a stock exchange, the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it. Any such allocation or delegation may be revoked by the Committee at any time. | ||
(e) | Designation of Beneficiary . Each Participant to whom an Award has been made under the Plan may designate a beneficiary or beneficiaries to exercise any Award or to receive any payment which under the terms of the Plan and the relevant Award Agreement may become exercisable or payable on or after the Participants death. At any time, and from time to time, any such designation may be changed or cancelled by the Participant without the consent of any such beneficiary. Any such designation, change or cancellation must be on a form provided for that purpose by the Committee and shall not be effective until received by the Committee. Such form may establish other rules as the Committee deems appropriate. If no beneficiary has been properly designated by a deceased Participant, or if all the designated beneficiaries have predeceased the Participant, the beneficiary shall be the Participants estate. If the Participant designates more than one beneficiary, any Stock Options or Stock Appreciation Rights shall be divided among beneficiaries equally, and any payments under the Plan to such beneficiaries shall be made in equal shares, unless the Participant has expressly designated otherwise, in which case Stock Options or Stock Appreciation Rights shall be divided, and the payments shall be made, in the portions designated by the Participant. |
14. | AMENDMENTS OF THE PLAN | |
The Committee may from time to time prescribe, amend and rescind rules and regulations relating to the Plan. Subject to the approval of the Board of Directors, where required, the Committee may at any time terminate, amend, or suspend the operation of the Plan, provided that no action shall be taken by the Board of Directors or the Committee without the approval of the stockholders which would: |
(a) | except as provided in Section 5(c), materially increase the number of shares which may be issued under the Plan; | ||
(b) | permit granting of Stock Options or Stock Appreciation Rights at less than Fair Market Value; | ||
(c) | except as provided in Section 5(c), permit the repricing of outstanding Stock Options or Stock Appreciation Rights; or | ||
(d) | amend the maximum shares set forth in Section 5(b) which 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 Award, in any material respect, without the consent of the Participant. There is no obligation for uniformity of treatment of Participants under the Plan. | ||
15. | FOREIGN JURISDICTIONS | |
The Committee may adopt, amend, and terminate such arrangements, not inconsistent with the intent of the Plan, as it may deem necessary or desirable to make available tax or other benefits of the laws of any foreign jurisdiction, to employees of the Company who are subject to such laws and who receive Awards under the Plan. | ||
16. | NON-ALIENATION OF RIGHTS AND BENEFITS. | |
Subject to Section 9 and the rights of the Company established under the Plans terms, no right or benefit under the Plan shall be subject to alienation, sale, assignment, pledge, or encumbrance and any attempt to do so shall be void. No right or benefit under the Plan be subject to the debts, contracts, liabilities or torts of the person entitled to such rights or benefits. | ||
17. | LIMITATION OF LIABILITY OR OBLIGATION OF THE COMPANY. | |
Nothing in the Plan shall be construed |
(a) | to give any employee of the Company any right to be granted any Award other than at the sole discretion of the Committee; |
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(b) | to give any Participant any rights whatsoever with respect to shares of Common Stock except as specifically provided in the Plan; | ||
(c) | to limit in any way the right of the Company or any Subsidiary to terminate, change or modify, with or without cause, the employment of any Participant at any time; or | ||
(d) | to be evidence of any agreement or understanding, express or implied, that the Company or any Subsidiary will employ any Participant in any particular position at any particular rate of compensation or for any particular period of time. |
Payments and other benefits received by a Participant under an Award shall not be deemed part of a Participants regular, recurring compensation for purposes of any termination, indemnity or severance pay laws and shall not be included in, nor have any effect on, the determination of benefits under any other employee benefit plan, contract or similar arrangement provided by the Company or any Subsidiary, unless expressly so provided by such other plan, contract or arrangement. | ||
18. | NO LOANS | |
The Company shall not lend money to any Participant to finance a transaction under this Plan. | ||
19. | NOTICES | |
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: |
20. | RECOGNITION AWARDS | |
Notwithstanding any other provision of the Plan to the contrary, the Committee is given the discretionary authority to award up to a total of 10,000 unrestricted shares of Common Stock during each calendar year to selected employees as a bonus or reward (Recognition Awards). Under this paragraph no employee shall receive over 100 shares of Common Stock as Recognition Awards over the duration of the Plans term. |
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1. | PURPOSE OF THE PLAN | |
The purpose of the General Mills, Inc. 2009 Stock Compensation Plan (the Plan) is to attract and retain able individuals by rewarding employees of General Mills, Inc., its subsidiaries and affiliates (defined as entities in which General Mills, Inc. has a significant equity or other interest, collectively, the Company) and to align the interests of employees with those of the stockholders of the Company. The Company shall include any successors to General Mills, Inc. or any future parent corporations or similar entities. | ||
2. | EFFECTIVE DATE AND DURATION OF PLAN | |
This Plan shall become effective as of September 21, 2009, subject to the approval of the stockholders of the Company at the Annual Meeting on September 21, 2009. Awards may be made under the Plan until December 31, 2011. | ||
3. | ELIGIBLE PERSONS | |
Only persons who are employees of the Company shall be eligible to receive grants of Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, and/or Performance Awards (each defined below) and become Participants under the Plan. The Compensation Committee of the Companys Board of Directors (the Committee) shall exercise the discretionary authority to determine from time to time the employees of the Company who are eligible to participate in this Plan. | ||
4. | AWARD TYPES |
(a) | Stock Option Awards. The Committee may award Participants options (Stock Options) to purchase a fixed number of shares of common stock ($.10 par value) of the Company (Common Stock). The grant of a Stock Option entitles the Participant to purchase shares of Common Stock at an Exercise Price established by the Committee which shall not be less than 100% of the Fair Market Value of the Common Stock on the date of grant, and may exceed the Fair Market Value on the grant date, at the Committees discretion. Fair Market Value shall equal the closing price on the New York Stock Exchange of the Companys Common Stock on the applicable date. | ||
(b) | Stock Appreciation Rights. The Committee may also award Participants Stock Appreciation Rights. A Stock Appreciation Right is a right to receive, upon exercise of that right, an amount, which may be paid in cash, shares of Common Stock, or a combination thereof in the complete discretion of the Committee, equal to the difference between the Fair Market Value of one share of Common Stock as of the date of exercise and the Fair Market Value of one share of Common Stock on the date of grant. | ||
(c) | Restricted Stock Awards. The Committee may grant Participants, subject to certain restrictions, shares of Common Stock (Restricted Stock) or the right to receive shares of Common Stock or cash (Restricted Stock Units). | ||
(d) | Performance Awards. Performance Awards may be made by the Committee granting a right to either the value of a number of shares of Common Stock (Performance Share Units) or a monetary amount, which could be settled in such shares or in cash or a combination thereof (Performance Units), determined based on the extent to which applicable performance goals are achieved. |
Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units and Performance Awards are sometimes referred to as Awards. To the extent any Award is subject to section 409A of the Internal Revenue Code of 1986, as amended (Section 409A), the terms and administration of such Award shall comply therewith and IRS guidance thereunder. If any provision of the Plan would otherwise conflict with or frustrate this intent, that provision will be interpreted and deemed amended so as to avoid the conflict. Further, for purposes of the limitations on nonqualified deferred compensation under Section 409A, each payment of compensation under this Plan shall be treated as a separate payment of compensation for purposes of applying the Section 409A deferral election rules and the exclusion from Section 409A for certain short-term deferral amounts. | ||
5. | COMMON STOCK SUBJECT TO THE PLAN |
(a) | Maximum Shares Available for Delivery. Subject to Section 5(c), the maximum number of shares of Common Stock available for Awards to Participants under the Plan shall be 12,000,000. Stock Options and Stock Appreciation Rights awarded shall reduce the number of shares available for Awards by one share for every one share granted; provided that Stock |
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Appreciation Rights that may be settled only in cash shall not reduce the number of shares available for Awards. Awards of Restricted Stock, Restricted Stock Units and Performance Awards settled in shares of Common Stock shall reduce the number of shares available for Awards by one share for every one share awarded, up to 30 percent of the total number of shares available; beyond that, Restricted Stock, Restricted Stock Units and Performance Awards settled in shares of Common Stock shall reduce the number of shares available for Awards by five shares for every one share awarded. Restricted Stock Units and Performance Awards that may be settled only in cash shall not reduce the number of shares available for Awards. |
In addition, any Common Stock covered by a Stock Option or Stock Appreciation Right granted under the Plan which is forfeited prior to the end of the vesting period shall be deemed not to be granted for purposes of determining the maximum number of shares of Common Stock available for Awards under the Plan. In the event a Stock Appreciation Right is settled for cash, the number of shares deducted against the maximum number of shares provided in Section 5(a) shall be restored and again be available for Awards. However, if (i) any Stock Option or Stock Appreciation Right that is exercised through the delivery of Common Stock in satisfaction of the Exercise Price, and (ii) withholding tax requirements arising upon exercise of any Stock Option or Stock Appreciation Right are satisfied through the withholding of Common Stock otherwise deliverable in connection with such exercise, the full number of shares of Common Stock underlying any such Stock Option or Stock Appreciation Right, or portion thereof being so issued shall count against the maximum number of shares available for grants under the Plan. | |||
Upon forfeiture or termination of Restricted Stock, Restricted Stock Units and Performance Awards prior to vesting, the shares of Common Stock subject thereto shall again be available for Awards under the Plan. | |||
The Company will repurchase a number of shares of Common Stock in the public market at least equal to the number of shares of Common Stock issued under this Plan. | |||
(b) | Individual Limits. The number of shares of Common Stock subject to Stock Options and Stock Appreciation Rights or shares of Common Stock available for Restricted Stock, Restricted Stock Units and Performance Awards granted under the Plan to any single Participant shall not exceed, in the aggregate, 1,000,000 shares and/or units per fiscal year. The maximum dollar value of Performance Awards payable to any single Participant shall be $20,000,000 per fiscal year. These per-Participant limits shall be construed and applied consistently with Code section 162(m) and the regulations thereunder. | ||
(c) | Adjustments for Corporate Transactions. If a corporate transaction has occurred affecting the Common Stock such that an adjustment to outstanding Awards is required to preserve (or prevent enlargement of) the benefits or potential benefits intended at the time of grant, then in such manner as the Committee deems equitable, an appropriate adjustment shall be made to (i) the number and kind of shares which may be awarded under the Plan; (ii) the number and kind of shares subject to outstanding Awards; (iii) the number of shares credited to an account; (iv) the individual limits imposed under the Plan; and if applicable; (v) the Exercise Price of outstanding Options and Stock Appreciation Rights provided that the number of shares of Common Stock subject to any Stock Option or Stock Appreciation Right denominated in Common Stock shall always be a whole number. For this purpose a corporate transaction includes, but is not limited to, any dividend or other distribution (whether in the form of cash, Common Stock, securities of a subsidiary of the Company, other securities or other property), recapitalization, stock split, reverse stock split, combination of shares, 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. Notwithstanding anything in this paragraph to the contrary, an adjustment to a Stock Option or Stock Appreciation Right under this paragraph shall be made in a manner that will not result in the grant of a new Stock Option or Stock Appreciation Right under Section 409A. | ||
(d) | Limits on Distribution. Distribution of shares of Common Stock or other amounts under the Plan shall be subject to the following: |
(i) | Notwithstanding any other provision of the Plan, the Company shall have no liability to deliver any shares of Common Stock under the Plan or make any other distribution of benefits under the Plan unless such delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act of 1933), and the applicable requirements of any securities exchange or similar entity. | ||
(ii) | To the extent that the Plan provides for issuance of stock certificates to reflect the issuance of shares of Common Stock or Restricted Stock, the issuance may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange. |
(e) | Stock Deposit Requirements and other Restrictions. The Committee, in its discretion, may require as a condition to the grant of Awards, the 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 the required holding period. Such shares of deposited Common Stock may not |
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be otherwise sold or disposed of during the applicable holding period or restricted period. The Committee may also determine whether any shares issued upon exercise of a Stock Option or Stock Appreciation Right, or attainment of any performance goal, shall be restricted in any manner. |
6. | STOCK OPTIONS AND STOCK APPRECIATION RIGHTS TERMS AND TYPE |
(a) | General. Stock Options granted under the Plan shall be Non-Qualified Stock Options governed by Section 83 of the Internal Revenue Code of 1986, as amended (the Code). The term of any Stock Option and Stock Appreciation Right granted under the Plan shall be determined by the Committee, provided that said term shall not exceed 10 years and one month. | ||
(b) | No Reload Rights. Neither Stock Options nor Stock Appreciation Rights granted under this Plan shall contain any provision entitling the optionee or right-holder to the automatic grant of additional options or rights in connection with any exercise of the original option or right. | ||
(c) | No Repricing. Subject to Section 5(c), outstanding Stock Options and Stock Appreciation Rights granted under this Plan shall under no circumstances be repriced. |
7. | GRANT, EXERCISE AND VESTING OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS |
(a) | Grant. Subject to the limits otherwise imposed by the terms of this Plan, the Committee has discretionary authority to determine the size of a Stock Option or Stock Appreciation Right Award, which may be tied to meeting performance-based requirements. | ||
(b) | Exercise. Except as provided in Sections 11 and 12 (Change of Control and Termination of Employment), each Stock Option or Stock Appreciation Right may be exercised only in accordance with the terms and conditions of the Stock Option grant or Stock Appreciation Right and during the periods as may be established by the Committee. A Participant exercising a Stock Option or Stock Appreciation Right shall give notice to the Company of such exercise and of the number of shares elected to be purchased prior to 4:30 P.M. CST/CDT on the day of exercise, which must be a business day at the executive offices of the Company. | ||
(c) | Vesting. Stock Options and Stock Appreciation Rights shall not be exercisable unless vested. Subject to Sections 11 and 12 Stock Options and Stock Appreciation Rights shall be fully vested only after four years of the Participants continued employment with the Company following the date of the grant. | ||
(d) | Payment of Exercise Price. The Exercise Price for Stock Options shall be paid to the Company at the time of such exercise, subject to any applicable rule or regulation adopted by the Committee: |
(i) | in cash (including check, draft, money order or wire transfer made payable to the order of the Company); | ||
(ii) | through the tender of shares of Common Stock owned by the Participant (by either actual delivery or attestation); | ||
(iii) | by a combination of (i) and (ii) above; or | ||
(iv) | by authorizing a third party broker to sell a sufficient number of shares of Common Stock acquired upon exercise of the Stock Option and remit to the Company such sales proceeds to pay the entire Exercise Price and any tax withholding resulting from the exercise. |
For determining the amount of the payment, Common Stock delivered pursuant to (ii) or (iii) shall have a value equal to the Fair Market Value of the Common Stock on the date of exercise. |
8. | RESTRICTED STOCK AND RESTRICTED STOCK UNITS | |
Restricted Stock and Restricted Stock Units may be awarded on either a discretionary or performance-based method. |
(a) | Discretionary. With respect to discretionary Awards of Restricted Stock and Restricted Stock Units, the Committee shall: |
(i) | Select Participants to whom Awards will be made; | ||
(ii) | Subject to the otherwise applicable Plan limits, determine the number of shares of Restricted Stock or the number of Restricted Stock Units to be awarded to a Participant; |
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(iii) | Determine the length of the restricted period, which shall be no less than four years; | ||
(iv) | Determine the purchase price, if any, to be paid by the Participant for Restricted Stock or Restricted Stock Units; | ||
(v) | Determine whether Restricted Stock Unit Awards will be settled in shares of Common Stock, cash or a combination thereof; and | ||
(vi) | Determine any restrictions other than those set forth in this Section. |
(b) | Performance-Based. With respect to Awards of performance-based Restricted Stock and Restricted Stock Units, the intent is to grant such Awards so as to satisfy the requirements for qualified performance-based compensation under Code Section 162(m). Performance-based Awards are subject to the following: |
(i) | The Committee has exclusive authority to determine which Participants may be awarded performance-based Restricted Stock and Restricted Stock Units and whether any Restricted Stock Unit Awards will be settled in shares of Common Stock, cash, or a combination thereof. | ||
(ii) | In order for any Participant to be awarded Restricted Stock or Restricted Stock Units for a Performance Period (defined below), the net earnings from continuing operations excluding items identified and disclosed by the Company as non-recurring or special costs and after taxes (Net Earnings) of the Company for such Performance Period must be greater than zero. | ||
(iii) | At the end of the Performance Period, if the Committee determines that the requirement of Section 8(b)(ii) has been met, each Participant eligible for a performance-based Award shall be deemed to have earned an Award equal in value to the Maximum Amount, or such lesser amount as the Committee shall determine in its discretion to be appropriate. The Committee may base this determination on performance-based criteria and in no case shall this have the effect of increasing an Award payable to any other Participant. For purposes 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 date the Award is granted. | ||
(iv) | In addition to the limitation on the number of shares of Common Stock available for Awards under section 5(b) hereof, in no event shall the total value of the performance-based Restricted Stock or Restricted Stock Unit Award granted to any Participant for any one Performance Period exceed 0.5 percent of the Companys Net Earnings for that Performance Period (such amount is the Maximum Amount). | ||
(v) | The Committee shall determine the length of the restricted period which, subject to Sections 11 and 12, shall be no less than four years. | ||
(vi) | Performance Period means a fiscal year of the Company, or such other period as the Committee may from time to time establish. |
Subject to the restrictions set forth in this Section, each Participant who receives Restricted Stock shall have certain rights as a stockholder with respect to such shares, as set forth in the applicable Award Agreement. Each Participant who is awarded Restricted Stock Units that are settled in shares of Common Stock shall be eligible to receive, at the expiration of the applicable restricted period (or such later time as provided herein), one share of Common Stock for each Restricted Stock Unit awarded, and the Company shall issue to each such Participant that number of shares of Common Stock. Each Participant who is awarded Restricted Stock Units that are settled in cash shall receive an amount equal to the Fair Market Value of a share of Common Stock on the date the applicable restricted period ends, multiplied by the number of Units awarded. Participants who receive Restricted Stock Units shall have no rights as stockholders with respect to such Restricted Stock Units until such time as share certificates for Common Stock are issued to the Participants (if applicable); provided, however, that as of the first day of each quarter, during the applicable restricted period for all Restricted Stock Units awarded hereunder, the Company may credit to each such Participant an amount equal to the sum of all dividends and other distributions paid by the Company during the prior quarter on that equivalent number of shares of Common Stock. Notwithstanding any provisions of this Section or the Plan to the contrary, any dividends or other distributions paid on Restricted Stock, or any dividend equivalents or other distributions credited in respect to Restricted Stock Units, shall be distributed (in either cash or shares of Common Stock, with or without interest or other earnings, as provided in the Award Agreement at the discretion of the Committee) to the Participant only if, when, and to the extent the restrictions imposed on the attendant Restricted Stock or Restricted Stock Units lapse, and in an amount equal to the sum of all quarterly dividends and other distributions paid by the Company during the applicable restricted period on the equivalent number of shares of Common Stock which become unrestricted. Such dividends, dividend equivalents, or other distributions shall be payable at the same time as the attendant Restricted Stock or Restricted Stock Units to which they relate, as provided under the applicable terms |
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of the Plan and relevant Award Agreements. Dividends, dividend equivalents, and other distributions that are not so vested shall be forfeited. |
The Committee may in its discretion permit a Participant to defer receipt of any Common Stock or cash issuable upon the lapse of any restriction of Restricted Stock or Restricted Stock Units, subject to such rules and procedures as it may establish. In particular, the Committee shall establish rules relating to such deferrals intended to comply with the requirements of Code section 409A, including without limitation, the time when a deferral election can be made, the period of the deferral, and the events that would result in payment of the deferred amount. | ||
9. | PERFORMANCE AWARDS |
(a) | Grant. The Committee may grant Performance Awards which may be denominated in shares of Common Stock (Performance Share Units) or notionally represented by a monetary value, and which may be settled in shares of Common Stock, paid in cash, or a combination thereof (Performance Units). | ||
(b) | Performance Goal. In order for any Participant to be granted a Performance Award for a Performance Period (defined below), the net earnings from continuing operations excluding items identified and disclosed by the Company as non-recurring or special costs and after taxes (Net Earnings) of the Company for such Performance Period must be greater than zero. | ||
(c) | Grant Size. At the end of the Performance Period, if the Committee determines that the requirement of Section 9(b) has been met, each Participant eligible for a Performance Award shall be deemed to be granted an Award equal in value to the Maximum Amount, or such lesser amount as the Committee determines in its discretion to be appropriate. The Committee may base this determination on additional performance-based criteria and in no case shall this have the effect of increasing an Award payable to any other Participant. For purposes of computing the grant value of Awards, each Performance Award denominated in shares of Common Stock (whether or not share settled) shall be deemed to have a value equivalent to the Fair Market Value of one share of Common Stock on the date the Award is granted. | ||
(d) | Additional Performance Conditions and Vesting. Awards granted under this Section 9 shall be subject to such other terms and conditions as the Committee, in its discretion, imposes in the relevant Award Agreement. These conditions may include service and/or performance requirements and goals over periods of one or more years that could result in the future forfeiture of all or part of the Performance Award granted hereunder in the event of the Participants termination of employment with the Company prior to the expiration of any service conditions, and/or said performance criteria or other conditions are not met in whole or in part within the designated period of time. This designated period of time shall be referred to as the Additional Performance Period. Except as provided in Sections 11(b), (c) and 12(c), Performance Awards shall not be paid other than on the date specified in the relevant Award Agreement after the end of the Additional Performance Period. | ||
(e) | Maximum Amount. In addition to the limitation on the dollar value of Performance Awards and the number of shares of Common Stock available for Awards under Section 5(b), in no event shall the total value of a Performance Award granted to any Participant for any one Performance Period exceed 0.5 percent of the Companys Net Earnings for that Performance Period (such amount is the Maximum Amount). | ||
(f) | Performance Period. Performance Period means the period as the Committee may from time to time establish. | ||
(g) | Dividend Equivalents and Voting. At the discretion of the Committee, Performance Share Units may be credited with amounts equal to the sum of all dividends and other distributions paid by the Company during the prior quarter on that equivalent number of shares of Common Stock. Notwithstanding the previous sentence, any dividend equivalents or other distributions so credited shall be distributed (in either cash or shares of Common Stock, with or without interest or other earnings, as provided in the Award Agreement at the discretion of the Committee) to the Participant only if, when, and to the extent the conditions imposed on the attendant Performance Share Units are satisfied, and in an amount equal to the sum of all quarterly dividends and other distributions paid by the Company during the relevant Performance Period and/or Additional Performance Period on the equivalent number of shares of Common Stock which become payable. Such dividend equivalents or other distributions shall be payable at the same time as the attendant Performance Share Units to which they relate, as provided under the applicable terms of the Plan and Award Agreement. Dividend equivalents and other distributions that are not so vested shall be forfeited. Dividend equivalents shall not be credited in respect to Performance Units. Participants who receive either Performance Share Units or Performance Units shall have no rights as stockholders and in particular shall have no voting rights. |
The Committee may in its discretion permit a Participant to defer receipt of any Common Stock or cash issuable under a Performance Award subject to such rules and procedures as it may establish. In particular, the Committee shall establish rules relating to such deferrals intended to comply with the requirements of Code section 409A, including without limitation, the time |
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when a deferral election can be made, the period of the deferral, and the events that would result in payment of the deferred amount. |
10. | TAXES | |
The Company has the right to withhold amounts from Awards to satisfy tax obligations as it deems appropriate. Whenever the Company issues Common Stock under the Plan, unless it decides to satisfy the withholding obligations through additional withholding on salary or other wages, it may require the recipient to remit to the Company an amount sufficient to satisfy any Federal, state, local or foreign tax withholding requirements prior to the delivery of such Common Stock, or the Company may in its discretion withhold from the shares to be delivered shares sufficient to satisfy all or a portion of such tax withholding requirements. | ||
11. | CHANGE OF CONTROL |
(a) | Each of the following (i) through (iv) constitutes a Change of Control: |
(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 the Company where such acquisition causes such Person to own 20% or more of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the Outstanding Voting Securities); provided, however, that for purposes of this subsection (i), the following acquisitions shall not be deemed to result in a Change of 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 Persons beneficial ownership of the Outstanding 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 Voting Securities; or | ||
(ii) | Individuals who, as of the date hereof, constitute the Board of Directors (the Incumbent Board) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Companys 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) | Consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries (each, a Business Combination); 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 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 Companys 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 Securities, (B) 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 (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 stockholders of the Company of a complete liquidation or dissolution of the Company. |
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(b) | If, within two years after a Change of Control a Participant experiences an involuntary separation from service initiated by the Company for reasons other than cause (for this purpose cause shall have the same meaning as that term has in Section 4.2(b)(ii) of Plan B of the General Mills Separation Pay and Benefits Program for Officers), or a separation from service for good reason actually entitling the employee to certain separation benefits under Section 4.2(a)(ii) of Plan B of the General Mills Separation Pay and Benefits Program for Officers, the following applies: |
(i) | All of his or her outstanding Stock Options and Stock Appreciation Rights shall fully vest immediately and remain exercisable for the one-year period beginning on the date of his or her separation from service. | ||
(ii) | All shares of Restricted Stock and Restricted Stock Units shall fully vest and be settled immediately (subject to a proper deferral election made with respect to the Award). | ||
(iii) | All Performance Awards shall fully vest immediately and shall be considered to be earned in full at target as if the applicable performance goals established for the Additional Performance Period have been achieved, and paid immediately (subject to a proper deferral election made with respect to the Award). | ||
(iv) | If Awards are replaced pursuant to subsection (d) below, the protections and rights granted under this subsection (b) shall transfer and apply to such replacement awards. |
Notwithstanding the above, any Restricted Stock Units or Performance Awards subject to Section 409A (not subject to a proper deferral election) shall be settled on the Participants separation from service (within the meaning of Section 409A) or in the case of a Participant who is a specified employee (within the meaning of Section 409A) on the first day of the seventh month following the month of the Participants separation from service. | |||
(c) | If, in the event of a Change of Control, and to the extent outstanding Awards are not assumed by a successor corporation (or affiliate thereto) or other successor entity or person, or replaced with an award or grant that, solely in the discretionary judgment of the Committee preserves the existing value of outstanding Awards at the time of the Change of Control, then, by action of the Committee, the following shall occur: |
(i) | Subject to the other provisions of this subsection (c), All Stock Options and Stock Appreciation Rights shall vest and become exercisable immediately upon the Change of Control event. | ||
(ii) | The restrictions on all shares of Restricted Stock shall lapse and Restricted Stock Units shall vest immediately. | ||
(iii) | All Performance Awards shall fully vest immediately and shall be considered to be earned in full at target as if the applicable performance goals established for the Additional Performance Period have been achieved. | ||
(iv) | If the Change of Control constitutes a change in control event as described in IRS regulations or other guidance under Code section 409A(a)(2)(A)(v), Participants Restricted Stock Units and Performance Awards shall be settled and paid upon the Change of Control. | ||
(v) | If the Change of Control does not constitute a change in control event as described in IRS regulations or other guidance under Code section 409A(a)(2)(A)(v), Restricted Stock Units and Performance Awards that are not Section 409A Restricted Stock Units and/or not otherwise subject to Section 409A, and on which a deferral election was not made, shall be settled and paid upon the Change of Control. However, the Section 409A Restricted Stock Units, Performance Awards otherwise subject to Section 409A, or such Awards for which a proper deferral election was made, shall be settled in cash equal to either the Awards Fair Market Value at the time of the Change of Control, or its monetary value provided for above in (iii), as applicable, plus interest at a rate of Prime plus 1% from the Change of Control to the date of payment, which shall be the time the original restriction period would have closed, the Performance Award would have been originally payable, or the date elected pursuant to the proper deferral election, as applicable. |
In the discretion of the Committee and notwithstanding subsection (c)(i) above or any other Plan provision, outstanding Stock Options and Stock Appreciation Rights (both exercisable and unexercisable) may be cancelled at the time of the Change of Control in exchange for cash, property, or a combination thereof that is determined by the Committee to be at least equal to the excess (if any) of the value of the consideration that would be received in such Change of Control by the holders of Common Stock, over the exercise price for such Awards. For purposes of clarification, by operation of this provision Stock Options and Stock Appreciation Rights that would not yield a gain at the time of the Change of Control under the aforementioned equation are subject to cancellation without consideration. Furthermore, the Committee is under no obligation to treat Awards and/or Participants uniformly and has the discretionary authority to treat Awards and Participants disparately. |
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(d) | If in the event of a Change of Control and to the extent outstanding Awards are assumed by any successor corporation, affiliate thereof, person or other entity, or are replaced with awards that, solely in the discretionary judgment of the Committee preserve the existing value of outstanding Awards at the time of the Change of Control and provide for vesting payout terms, and performance goals, as applicable, that are at least as favorable to Participants as vesting, payout terms and Performance Goals applicable to Awards, then all such Awards or such substitutes thereof shall remain outstanding and be governed by their respective terms. | ||
(e) | With respect to any outstanding Awards as of the date of any Change of Control which require the deposit of owned Common Stock as a condition to obtaining rights, the deposit requirement shall be terminated as of the date of the Change of Control. |
12. | TERMINATION OF EMPLOYMENT |
(a) | Resignation or Termination for Cause. If the Participants employment by the Company is terminated by either |
(i) | the voluntary resignation of the Participant, or | ||
(ii) | a Company discharge due to Participants illegal activities, poor work performance, misconduct or violation of the Companys Code of Conduct, policies or practices, |
then the Participants Stock Options and Stock Appreciation Rights shall terminate three months after such termination (but in no event beyond the original full term of the Stock Options or Stock Appreciation Rights) and no Stock Options or Stock Appreciation Rights shall become exercisable after such termination, and all shares of Restricted Stock, Restricted Stock Units which are subject to restriction on the date of termination, and all outstanding Performance Awards, shall be cancelled and forfeited. | |||
(b) | Other Termination. If the Participants employment by the Company terminates involuntarily at the initiation of the Company for any reason other than specified in Sections 11, 12 (a), (d) or (e), the following rules shall apply: |
(i) | In the event that, at the time of such involuntary termination, the sum of the Participants age and years of service with the Company equals or exceeds 70, (A) the Participants outstanding Stock Options and Stock Appreciation Rights shall continue to become exercisable according to the schedule established at the time of grant unless otherwise provided in the applicable Award Agreement; (B) the restriction on all shares of Restricted Stock shall lapse and Restricted Stock Units shall vest and be paid (or deferred, as appropriate) immediately; and (C) any Performance Awards remaining outstanding during the Additional Performance Period shall fully vest and be payable according to the original terms of the Award with a value, if any, that otherwise would be earned under the applicable performance goals originally established under the Award Agreement based on actual performance (subject to a proper deferral election). Stock Options and Stock Appreciation Rights shall remain exercisable for the remaining full term of such Awards. | ||
(ii) | In the event that, at the time of such involuntary termination, the sum of the Participants age and years of service with the Company is less than 70, (A) the Participants outstanding unexercisable Stock Options and Stock Appreciation Rights, and unvested Restricted Stock and Restricted Stock Units, shall become exercisable or vest and paid or deferred immediately, as the case may be, as of the date of termination, in a pro-rata amount based on the full months of employment completed during the full vesting period from the date of grant to the date of termination with such newly-vested Stock Options and Stock Appreciation Rights, and Stock Options and Stock Appreciation Rights exercisable on the date of termination, remaining exercisable for the lesser of one year from the date of termination and the original full term of the Stock Option and/or Stock Appreciation Right; and (B) the Participants Performance Awards remaining outstanding during the Additional Performance Period shall be payable according to the original terms of the Award with a value, if any, that otherwise would be earned under the applicable performance goals originally established under the Award Agreement based on actual performance, and shall vest at the end of the relevant Additional Performance Period in a pro-rata amount based on the full months of employment completed during the relevant Additional Performance Period originally established in the Award Agreement through the date of termination. All other Stock Options, Stock Appreciation Rights, shares of Restricted Stock, Restricted Stock Units and Performance Awards shall be forfeited as of the date of termination. Provided, however, that if the Participant is a Company Senior Vice President or above, the Participants outstanding Stock Options and Stock Appreciation Rights which, as of the date of termination are not yet exercisable, shall become exercisable effective as of the date of such termination and, with all outstanding Stock Options and Stock Appreciation Rights already exercisable on the date of termination, shall remain exercisable for the lesser of one year following the date of termination and the original full term of the Stock Option or Stock Appreciation Right; all shares of Restricted Stock and Restricted Stock Units shall fully vest as of the date of termination and be paid or deferred immediately; and any outstanding Performance Awards shall fully vest and be payable according to the original terms of the Award with a value, if any, that otherwise would be earned under the applicable performance goals originally established in the Award Agreement (subject to a proper deferral election). |
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Notwithstanding the foregoing, any Section 409A Restricted Stock Units that vest under this Section 12(b) shall be paid on the Participants separation from service (within the meaning of Code section 409A), or in the case of a Participant who is a specified employee (within the meaning of Code section 409A) shall be paid on the first day of the seventh month following the month of separation from service. | |||
(c) | Death. If a Participant dies while employed by the Company, any Stock Option or Stock Appreciation Right previously granted under this Plan shall fully vest and become exercisable upon death and may be exercised by the person designated as such Participants beneficiary or beneficiaries or, in the absence of such designation, by the Participants estate. Stock Options and Stock Appreciation Rights shall remain exercisable for the remaining full term of such Awards. A Participant who dies while employed by the Company during any applicable restricted period shall fully vest in such shares of Restricted Stock or Restricted Stock Units, effective as of the date of death, and such shares or cash shall be paid as of the first day of the month following death to the designated beneficiary or beneficiaries. If a Participant dies while employed by the Company during an Additional Performance Period, all Performance Awards shall fully vest and shall be considered to be earned in full at target as if the applicable performance goals have been achieved, and paid on the first day of the month following death to the designated beneficiary or beneficiaries. | ||
(d) | Retirement. The Committee shall determine, at the time of grant, the treatment of Awards upon the retirement of the Participant. Unless other terms are specified in the original Award Agreement, if the termination of employment is due to a Participants retirement on or after age 55 and completion of five years of eligibility service under the General Mills Pension Plan, the Participant may, effective as of the date of employment termination as a retiree, exercise a Stock Option or Stock Appreciation Right pursuant to the original terms and conditions of such Awards; shall fully vest in, and be paid or have deferred, all shares of Restricted Stock or shares or cash attributable to Restricted Stock Units; and all Performance Awards shall fully vest and be payable according to the original terms of the Award with a value, if any, that otherwise would be earned under the applicable performance goals originally established in the Award Agreement based on actual performance (subject to a proper deferral election made with respect to the Award). However, the Restricted Stock Units without a proper deferral election that vest under this Section 12(d) shall be payable on the Participants separation from service (within the meaning of Section 409A) or in the case of a Participant who is a specified employee (within the meaning of Section 409A) shall be paid on the first day of the seventh month following the month of separation from service. | ||
A Restricted Stock Unit that could vest upon retirement under this Section 12(d) at any time within the Awards restricted period shall be referred to as a Section 409A Restricted Stock Unit. | |||
Notwithstanding the above, the terms of this Section 12(d) shall not apply to a Participant who, prior to a Change of Control, is terminated for cause as described in Section 12(a)(ii); said Participant shall be treated as provided in Section 12(a). | |||
(e) | Spin-offs and Other Divestitures. If the termination of employment is due to the divestiture, cessation, transfer, or spin-off of a line of business or other activity of the Company, the Committee, in its sole discretion, shall determine the conversion, vesting, or other treatment of all outstanding Awards under the Plan. Such treatment shall be consistent with Section 409A, and in particular will take into account whether a separation from service has occurred within the meaning of Section 409A. |
13. | 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. | ||
(b) | Selection of Committee. The Committee shall be selected by the Board, and shall consist of two or more outside, disinterested members of the Board who, in the judgment of the Board, are qualified to administer the Plan as contemplated by Rule 16b-3 of the Securities and Exchange Act of 1934 (or any successor rule), Code section 162(m) and the regulations thereunder (or any successors thereto), and any rules and regulations of a stock exchange on which Common Stock is traded. | ||
(c) | Powers of Committee. The authority to manage and control the operations and administration of the Plan shall be vested in the Committee, subject to the following: |
(i) | Subject to the provisions of the Plan, the Committee will have the authority and discretion to select from among the eligible Company employees those persons who shall receive Awards, to determine the time or times of receipt, to determine the types of Awards and the number of shares or amounts covered by the Awards, to establish the terms, conditions, performance criteria, performance period, restrictions, and other provisions of such Awards, to specify that the Participants rights, payments, and benefits with respect to Awards shall be subject to adjustment, reduction, cancellation, forfeiture, or recoupment under certain circumstances, and (subject to the restrictions imposed by Section 14) to cancel or suspend Awards. In making such determinations, the Committee may take into account the nature of services rendered by |
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the individual, the individuals present and potential contribution to the Companys success and such other factors as the Committee deems relevant. Such terms and conditions may be evidenced by an agreement (Award Agreement), which need not require execution by the Participant, in which case acceptance of the Award shall constitute agreement by the Participant with all its terms, conditions, limitations and forfeiture provisions. |
(ii) | The Committee will have the authority and discretion to establish terms and conditions of Awards as the Committee determines to be necessary or appropriate to conform to applicable requirements or practices of jurisdictions outside of the United States. | ||
(iii) | The Committee will have the authority and discretion to interpret the Plan and Award Agreements, to establish, modify, and rescind any rules relating to the Plan, to determine the terms and provisions of any Award Agreements made pursuant to the Plan, to correct any technical defect(s) or omission(s) in connection with the Plan or Award Agreement, reconcile any technical inconsistencies in connection with the Plan or Award Agreement, and to make all other determinations that may be necessary or advisable for the administration of the Plan. | ||
(iv) | Any interpretation of the Plan or Award Agreements by the Committee and any decision made by it under the Plan or Award Agreements is final and binding. | ||
(v) | The Committee will have exclusive authority and discretion to decide how outstanding Awards will be treated, and is empowered to make all elections among possible options, consistent with Sections 11(c) and (d). |
(d) | Delegation by Committee. Except to the extent prohibited by applicable law or the applicable rules of a stock exchange, the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it. Any such allocation or delegation may be revoked by the Committee at any time. | ||
(e) | Designation of Beneficiary. Each Participant to whom an Award has been made under the Plan may designate a beneficiary or beneficiaries to exercise any Award or to receive any payment which under the terms of the Plan and the relevant Award Agreement may become exercisable or payable on or after the Participants death. At any time, and from time to time, any such designation may be changed or cancelled by the Participant without the consent of any such beneficiary. Any such designation, change or cancellation must be on a form provided for that purpose by the Committee and shall not be effective until received by the Committee. Such form may establish other rules as the Committee deems appropriate. If no beneficiary has been designated by a deceased Participant, or if all the designated beneficiaries have predeceased the Participant, the beneficiary shall be the Participants estate. If the Participant designates more than one beneficiary, any payments under the Plan to such beneficiaries shall be made in equal shares unless the Participant has expressly designated otherwise, in which case the payments shall be made in the shares designated by the Participant. |
14. | AMENDMENTS OF THE PLAN | |
The Committee may from time to time prescribe, amend and rescind rules relating to the Plan. Subject to the approval of the Board of Directors, where required, the Committee may at any time terminate, amend, or suspend the operation of the Plan, provided that no action shall be taken by the Board of Directors or the Committee without the approval of the stockholders which would: |
(a) | except as provided in Section 5(c), materially increase the number of shares which may be issued under the Plan; | ||
(b) | permit granting of Stock Options or Stock Appreciation Rights at less than Fair Market Value; | ||
(c) | except as provided in Section 5(c), permit the repricing of outstanding Stock Options or Stock Appreciation Rights; or | ||
(d) | amend the individual limits on awards set forth in Section 5(b) which 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 Award, in any material respect, without the consent of the Participant. There is no obligation for uniformity of treatment of Participants or Awards under the Plan. | ||
15. | FOREIGN JURISDICTIONS | |
The Committee may adopt, amend, and terminate such arrangements, not inconsistent with the intent of the Plan, as it may deem necessary or desirable to make available tax or other benefits of the laws of any foreign jurisdiction, to employees of the Company who are subject to such laws and who receive Awards under the Plan. |
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16. | TRANSFERABILITY OF AWARDS | |
Except as otherwise provided by rules of the Committee, no Stock Options or Stock Appreciation Right shall be transferable by a Participant otherwise than (i) by the Participants last will and testament or (ii) by the applicable laws of descent and distribution, and such Stock Options or Stock Appreciation Right shall be exercised during the Participants lifetime only by the Participant or his or her guardian or legal representative. Except as otherwise provided in Sections 8 or 9, no shares of Restricted Stock, no Restricted Stock Units and no Performance Awards shall be sold, exchanged, transferred, pledged or otherwise disposed of during the restricted period. | ||
17. | NON-ALIENATION OF RIGHTS AND BENEFITS. | |
Subject to Section 16 and the rights of the Company established under the Plans terms, no right or benefit under the Plan shall be subject to alienation, sale, assignment, pledge, or encumbrance and any attempt to do so shall be void. No right or benefit under the Plan be subject to the debts, contracts, liabilities or torts of the person entitled to such rights or benefits. | ||
18. | LIMITATION OF LIABILITY OR OBLIGATION OF THE COMPANY. | |
Nothing in the Plan shall be construed |
(a) | to give any employee of the Company any right to be granted any Award other than at the sole discretion of the Committee; | ||
(b) | to give any Participant any rights whatsoever with respect to shares of Common Stock except as specifically provided in the Plan; | ||
(c) | to limit in any way the right of the Company or any Subsidiary to terminate, change or modify, with or without cause, the employment of any Participant at any time; or | ||
(d) | to be evidence of any agreement or understanding, express or implied, that the Company or any Subsidiary will employ any Participant in any particular position at any particular rate of compensation or for any particular period of time. |
Payments and other benefits received by a Participant under an Award shall not be deemed part of a Participants regular, recurring compensation for purposes of any termination, indemnity or severance pay laws and shall not be included in, nor have any effect on, the determination of benefits under any other employee benefit plan, contract or similar arrangement provided by the Company or any Subsidiary, unless expressly so provided by such other plan, contract or arrangement. | ||
19. | NO LOANS | |
The Company shall not lend money to any Participant to finance a transaction under this Plan. | ||
20. | NOTICES | |
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: |
21. | RECOGNITION AWARDS | |
Notwithstanding any other provision of the Plan to the contrary, the Committee is given the discretionary authority to award up to a total of 10,000 unrestricted shares of Common Stock during each calendar year to selected employees as a bonus or reward (Recognition Awards). Under this paragraph no employee shall receive over 100 shares of Common Stock as Recognition Awards over the duration of the Plans term. |
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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. Awards under this Plan are intended to constitute qualified performance-based compensation for purposes of Internal Revenue Code section 162(m), and the Plan shall be construed consistently therewith. | ||
2. | EFFECTIVE DATE AND DURATION OF PLAN | |
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. Awards may be made under the Plan until September 25, 2010. | ||
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. To the extent that such requirements are applicable, this Plan is intended to comply with the requirements of section 409A of the Internal Revenue Code first effective as of January 1, 2005 and shall be interpreted and administered in accordance with that intent. If any provision of the Plan would otherwise conflict with or frustrate this intent, that provision will be interpreted and deemed amended so as to avoid the conflict. Further, for purposes of the limitations on nonqualified deferred compensation under section 409A, each payment of compensation under this Plan shall be treated as a separate payment of compensation for purposes of applying the section 409A deferral election rules and the exclusion from section 409A for certain short-term deferral amounts. Certain awards made under this Plan which were earned and vested (within the meaning of section 409A) before January 1, 2005 are intended to be grandfathered from section 409A and remain governed by federal tax law applicable to deferred compensation as it existed in effect prior to section 409A. Accordingly, changes to the Plan after October 3, 2004 shall not modify the rights of participants with respect to deferred amounts that were earned and vested on or before December 31, 2004. | ||
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; provided, however, that the exercise of such discretion with respect to any Participant shall not have the effect of increasing an Award payable to any other Participant. 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 Participants 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) | 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 Companys Net Earnings for that Performance Period (Maximum Amount ). | ||
(d) | Profit Sharing Resolution . All awards under this Plan shall be subject to General Mills 1933 Shareholder Resolution on Profit Sharing, as amended. | ||
(e) | Special Rule for Calendar Year Performance . Notwithstanding any other provision in the Plan to the contrary, cash incentive awards where the amount is determined based on calendar year performance shall be paid in a lump sum on the March 15 immediately following the end of such calendar year. Cash incentive awards where the amount is determined based on the Companys fiscal year performance (June 1 through May 31) shall be paid in a lump sum on the August 15 immediately following the end of such fiscal year. If applicable under the Plan, awards of restricted stock or restricted stock units are payable at the times set forth in the Plan document and/or award agreement. The intent of these provisions is to ensure that all such payments are actually made within the short term deferral period described in Treasury Regulations §1.409A-1(b)(4) and that such amounts are not treated as a deferral of compensation under Code §409A. |
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 . Within 60 days 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 Participants 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 . If a corporate transaction has occurred affecting the Common Stock such that an adjustment to outstanding awards is required to preserve (or prevent enlargement of) the benefits or potential benefits intended at the time of grant, then in such manner as the Committee deems equitable, an appropriate adjustment shall be made to (i) the number and kind of shares which may be awarded under the Plan; (ii) the number and kind of shares subject to outstanding awards; (iii) the number of shares credited to an account; and, if applicable, (iv) the exercise price of outstanding Options; provided that the number of shares of Common Stock subject to any Option denominated in Common Stock shall always be a whole number. For this purpose a corporate transaction includes, but is not limited to, any dividend or other distribution (whether in the form of cash, Common Stock, securities of a subsidiary of the Company, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, or other similar corporate transactions. | ||
(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; |
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(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 Participants 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, 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 shall immediately vest in full and Common Stock free of restrictions shall be delivered to Participants, effective as of the date of the Change of Control. | ||
(ii) | If the Change of Control constitutes a change in control event as described in IRS regulations or other guidance under Code section 409A(a)(2)(A)(v), Participants Restricted Stock Units shall fully vest and be settled upon such Change of Control. | ||
(iii) | If the Change of Control does not constitute a change in control event as described in IRS regulations or other guidance under Code section 409A(a)(2)(A)(v), Restricted Stock Units that are not section 409A Restricted Stock Units and on which a deferral election was not made shall fully vest and be settled upon such Change of Control. However, the section 409A Restricted Stock Units, or Restricted Stock Units for which a proper deferral election was made, shall fully vest upon a Change of Control and be settled on the date the original restriction period would have closed, or the date elected pursuant to the proper deferral election, as applicable. | ||
(iv) | The Committee may make such additional adjustments and/or settlements of outstanding Awards for the Performance Period within which the Change of Control occurs as it deems appropriate and consistent with the Plans purposes; provided, however, that any such additional adjustments and/or settlements shall be in compliance with section 409A. |
(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 |
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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 Persons 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 consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of General Mills (Business Combination); 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 Participants termination of employment on his or her Restricted Stock or Restricted Stock Units shall apply unless otherwise determined by the Committee. |
(a) | If the Participants employment by the Company is terminated by either: |
(i) | the voluntary resignation of the Participant or | ||
(ii) | a Company discharge due to Participants illegal activities, poor work performance, misconduct or violation of the Companys policies or practices, |
the Participants shares of Restricted Stock or Restricted Stock Units, which are unvested on the date of termination, shall be forfeited. | |||
(b) | If the Participants 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: |
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(i) | In the event that, at the time of such termination, the sum of Participants age and service with the Company equals or exceeds 70, the Participants Restricted Stock and Restricted Stock Units shall fully vest and shall be paid (or deferred, as appropriate), immediately unless otherwise provided in the Grant Agreement. | ||
(ii) | In the event that, at the time of such termination, the sum of Participants 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 of employment and be paid (or deferred, as appropriate), immediately, and the Participants 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. |
Any section 409A Restricted Stock Units that vest under this provision shall be paid on the Participants separation from service (within the meaning of Code section 409A), or in the case of a Participant who is a specified employee (within the meaning of Code section 409A) shall be paid on the first day of the seventh month following the month of separation from service. | |||
(c) | Death . A Participant who dies during the Restricted Period for any Restricted Stock or Restricted Stock Units granted on or after June 1, 2002 shall fully vest in, and have settled, such shares of Restricted Stock or Restricted Stock Units, effective as of the date of death. A Participant who dies during the Restricted Period, for any Restricted Stock or Restricted Stock Units granted prior to June 1, 2002, shall vest in, and have settled, 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 pro-rata, based on the number of full months of employment completed during the Restricted Period prior to the date of death, as a percentage of the applicable Restricted Period. All vested Awards pursuant to this paragraph shall be paid to the person(s) designated under the terms of Section 12(c) of this Plan. | ||
(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 Participants separation from service (within the meaning of Code section 409A) on or after age 55, the Participant shall fully vest in, and be paid, all Restricted Stock or Restricted Stock Units effective as of the date of the separation from service (within the meaning of Code section 409A). Notwithstanding the previous sentence, in the case of a Participant who is a specified employee (within the meaning of Code section 409A) any Restricted Stock Units (not subject to a proper deferral election) shall be paid on the first day of the seventh month following the month of separation of service. | ||
Restricted Stock Units that could vest upon retirement under this Section 11(d) at any time within the Awards Restricted Period shall be referred to as a Section 409A Restricted Stock Unit. | |||
(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. Such treatment will be consistent with Code section 409A, and in particular will take into account whether a separation from service has occurred within the meaning of section 409A. |
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 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 individuals present and potential contribution to the Companys success and such other factors as the Committee deems relevant. |
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(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. | ||
(c) | Designation of Beneficiary . Each Participant to whom an Award has been made under the Plan may designate a beneficiary or beneficiaries to receive any payment which under the terms of the Plan and the relevant Award Agreement may become payable on or after the Participants death. At any time, and from time to time, any such designation may be changed or cancelled by the Participant without the consent of any such beneficiary. Any such designation, change or cancellation must be on a form provided for that purpose by the Committee and shall not be effective until received by the Committee. Such form may establish other rules as the Committee deems appropriate. If no beneficiary has been properly designated by a deceased Participant, or if all the designated beneficiaries have predeceased the Participant, the beneficiary shall be the Participants estate. If the Participant designates more than one beneficiary, any payments under the Plan to such beneficiaries shall be made in equal shares, unless the Participant has expressly designated otherwise, in which case the payments shall be made in the shares designated by the Participant. |
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 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: |
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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 equals the closing price of the Common Stock on the New York Stock Exchange on the applicable date. | ||
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(c). | ||
Net Earnings means the Companys 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. |
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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. |
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Quarter Ended | Fiscal Year Ended | |||||||||||||||||||||||||||
Aug. 29, | Aug. 30, | May 30, | May 31, | May 25, | May 27, | May 28, | ||||||||||||||||||||||
In Millions, Except Ratios | 2010 | 2009 | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||||
Earnings before income taxes and
after-tax earnings from joint ventures
|
$ | 670.1 | $ | 601.0 | $ | 2,204.5 | $ | 1,942.2 | $ | 1,829.5 | $ | 1,696.2 | $ | 1,621.1 | ||||||||||||||
Distributed income of equity investees
|
21.5 | 16.8 | 88.0 | 68.5 | 108.7 | 45.2 | 77.4 | |||||||||||||||||||||
Plus: Fixed charges (1)
|
106.4 | 102.8 | 423.1 | 463.4 | 494.6 | 496.8 | 462.8 | |||||||||||||||||||||
Plus: Amortization of capitalized
interest, net of interest capitalized
|
1.4 | (0.4 | ) | 0.7 | (2.2 | ) | (2.0 | ) | | 1.7 | ||||||||||||||||||
Earnings available to cover fixed
charges
|
$ | 799.4 | $ | 720.2 | $ | 2,716.3 | $ | 2,471.9 | $ | 2,430.8 | $ | 2,238.2 | $ | 2,163.0 | ||||||||||||||
Ratio of earnings to fixed charges
|
7.51 | 6.71 | 6.42 | 5.33 | 4.91 | 4.51 | 4.67 | |||||||||||||||||||||
(1) Fixed charges:
|
||||||||||||||||||||||||||||
Interest expense
|
$ | 93.8 | $ | 95.3 | $ | 374.5 | $ | 409.5 | $ | 432.0 | $ | 396.6 | $ | 367.0 | ||||||||||||||
Preferred distributions to
noncontrolling interests
|
0.8 | 0.8 | 2.6 | 7.2 | 22.0 | 63.8 | 60.5 | |||||||||||||||||||||
Rentals (1/3)
|
11.8 | 11.2 | 46.0 | 46.7 | 40.6 | 36.4 | 35.3 | |||||||||||||||||||||
Total fixed charges
|
$ | 106.4 | $ | 107.3 | $ | 423.1 | $ | 463.4 | $ | 494.6 | $ | 496.8 | $ | 462.8 | ||||||||||||||
1. | I have reviewed this Quarterly Report on Form 10-Q of General Mills, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: September 22, 2010
|
||
|
||
/s/ Kendall J. Powell
|
||
|
||
Chairman of the Board and
|
||
Chief Executive Officer
|
1. | I have reviewed this Quarterly Report on Form 10-Q of General Mills, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: September 22, 2010
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||
|
||
/s/ Donal L. Mulligan
|
||
|
||
Executive Vice President and
|
||
Chief Financial Officer
|
(1) | the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended August 29, 2010 (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: September 22, 2010
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||
|
||
/s/ Kendall J. Powell
|
||
|
||
Chairman of the Board and
|
||
Chief Executive Officer
|
(1) | the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended August 29, 2010 (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: September 22, 2010
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/s/ Donal L. Mulligan
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||
|
||
Executive Vice President and
|
||
Chief Financial Officer
|