2005 DEFERRED COMPENSATION
PLAN
General Mills,
Inc. (the “Company”) originally established the General
Mills, Inc. Deferred Compensation Plan for a select group of the
key management and highly compensated employees of the Company and
its affiliates as a means of deferring a portion of income from
current taxation while accumulating resources for future
investments or retirement. Under the Deferred Compensation Plan,
Participants could defer cash incentives, General Mills, Inc.
common stock (“Common Stock”) issued under the
Company’s stock option plans, and restricted stock and
restricted stock units issued under the Company’s various
stock plans granting restricted stock.
The General
Mills, Inc. Deferred Compensation Plan is hereby amended and
restated effective January 1, 2005, as the “General
Mills, Inc. 2005 Deferred Compensation Plan” (the
“Plan”), with respect to deferrals made or deferrals
that are earned or vested after 2004. The Plan’s purpose is
to continue to permit eligible employees to defer receipt of
certain compensation pursuant to the terms and provisions set forth
below.
As of
January 1, 2005, all deferrals earned and vested (within the
meaning of section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) and regulations thereunder) prior
to 2005 under the Deferred Compensation Plan will be governed by
the “General Mills, Inc. Deferred Compensation Plan
(Grandfathered)”.
This Plan is
intended (1) to comply with Code section 409A and official
guidance issued thereunder, and (2) to be “a plan which
is unfunded and is maintained by an employer primarily for the
purpose of providing deferred compensation for a select group of
management or highly compensated employees” within the
meaning of sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.
Notwithstanding any other provision of this Plan, this Plan shall
be interpreted, operated and administered in a manner consistent
with these intentions.
Wherever used
in this Plan, the following terms have the meanings set forth
below:
“
Board ” means the Board of Directors of the
Company.
“
Change of Control ” has the meaning set forth in
Section 13.
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“
Code ” means the Internal Revenue Code of 1986, as
amended.
“
Common Stock ” means Company common stock.
“
Company ” means General Mills, Inc.
“
Deferred Cash Account ” has the meaning set forth in
Section 6.
“
Deferred Stock Unit Account ” has the meaning set
forth in Section 8(i).
“
Election Form ” means a written form provided by the
Company pursuant to which a Participant may elect to defer his or
her cash incentive compensation, receipt of shares of Common Stock
attributable to grants of restricted stock or restricted stock
units and/or dividend equivalents, as well as electing the form and
timing of distributions with respect to such deferrals.
“ Key
Employee ” means a Participant treated as a
“specified employee” as of his or her Separation from
Service under Code section 409A(a)(2)(B)(i); i.e., a key employee
(as defined in Code section 416(i) without regard to paragraph
(5) thereof) of the Company or its affiliates if the
Company’s stock is publicly traded on an established
securities market or otherwise. Key Employees shall be determined
in accordance with Code section 409A using a December 31
identification date. A listing of Key Employees as of an
identification date shall be effective for the 12-month period
beginning on the April 1 following the identification
date.
“
Minor Amendment Committee ” has the meaning set forth
in Section 4(i).
“
Participant ” has the meaning set forth in
Section 3.
“
Separation from Service ” or “ Separate from
Service ” means a “separation from service”
within the meaning of Code section 409A; provided, however, for
purposes of this determination, a reasonably anticipated permanent
reduction in the level of bona fide services to less than 21% of
the average level of bona fide services provided in the immediately
preceding 36 months shall be deemed to be a Separation from
Service.
An individual
is a Participant in the Plan if, on or after January 1, 2005,
such individual (i) is a Participant in the Executive
Incentive Plan, as it may be amended from time to time,
(ii) has been selected by management to participate in
“Compensation Plus,” or (iii) has an individual
agreement, approved by the Minor Amendment Committee, which
provides for participation in this Plan, and has elected to defer
compensation or receipt of Common Stock pursuant to the provisions
of any of these programs or the agreement. Former employees of the
Company who have retired from the Company may also participate if
they would have been eligible to participate at the time they
retired from the Company. Notwithstanding the foregoing, the Minor
Amendment Committee may exclude
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from
participation employees or groups of employees of the Company who
would otherwise be eligible under this Plan.
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(i)
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Minor Amendment Committee
. Except as provided
below, this Plan shall be administered by the Minor Amendment
Committee (the “Minor Amendment Committee”), which
shall act by affirmative vote of a majority of its members. The
Minor Amendment Committee shall appoint a secretary who may be but
need not be one of its own members. The secretary shall keep
complete records of the administration of the Plan. The Minor
Amendment Committee may authorize each and any one of its members
to perform routine acts and to sign documents on its behalf. To the
extent necessary to maintain any exemption under Rule 16b-3 or
any successor rule (“Rule 16b-3”) under the
Securities Exchange Act of 1934 as to certain officers of the
Company, the Compensation Committee of the Board shall administer
certain portions of this Plan.
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(ii)
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Plan Administration
. Administration of the
Plan shall consist of interpreting and carrying out the provisions
of the Plan. The Minor Amendment Committee shall have the full
authority and discretion to make, amend, interpret, and enforce all
appropriate rules and regulations for the administration of this
Plan and decide or resolve any and all questions, including
interpretations of this Plan, as may arise in connection with this
Plan. Any such action taken by the Minor Amendment Committee shall
be final and conclusive on any party. To the extent the Minor
Amendment Committee has been granted discretionary authority under
the Plan, the Minor Amendment Committee’s prior exercise of
such authority shall not obligate it to exercise its authority in a
like fashion thereafter. The Minor Amendment Committee shall be
entitled to rely conclusively upon all tables, valuations,
certificates, opinions and reports furnished by any actuary,
accountant, controller, counsel or other person employed or engaged
by the Company with respect to the Plan. The Minor Amendment
Committee may, from time to time, employ agents and delegate to
such agents, including employees of the Company, such
administrative or other duties as it sees fit.
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(iii)
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Claims Procedure
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(a)
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Filing a Claim
. A Participant or his
authorized representative may file a claim for benefits under the
Plan. Any claim must be in writing and submitted to the Vice
President, Compensation and Benefits at such address as may be
specified from time to time. Claimants will be notified in writing
of approved claims, which will be processed as claimed. A claim is
considered approved only if its approval is communicated in writing
to a claimant.
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(b)
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Denial of Claim
. In the case of the
denial of a claim respecting benefits paid or payable with respect
to a Participant, a written notice will be furnished to the
claimant within 90 days of the date on which the claim is
received by the Vice President, Compensation and Benefits. If
special circumstances (such as for a hearing) require a longer
period, the claimant will be notified in writing, prior to the
expiration of the 90-day period, of the reasons for an extension of
time; provided, however, that no extensions will be permitted
beyond 90 days after the expiration of the initial 90-day
period.
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(c)
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Reasons for Denial
. A denial or partial
denial of a claim will be dated and signed by the Vice President,
Compensation and Benefits and will clearly set forth:
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(i)
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the
specific reason or reasons for the denial;
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(ii)
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specific reference to pertinent Plan
provisions on which the denial is based;
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(iii)
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a
description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such
material or information is necessary; and
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(iv)
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an
explanation of the procedure for review of the denied or partially
denied claim set forth below, including the claimant’s right
to bring a civil action under ERISA section 502(a) following an
adverse benefit determination on review.
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(d)
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Review of Denial
. Upon denial of a
claim, in whole or in part, a claimant or his duly authorized
representative will have the right to submit a written request to
the Minor Amendment Committee for a full and fair review of the
denied claim by filing a written notice of appeal with the Minor
Amendment Committee within 60 days of the receipt by the
claimant of written notice of the denial of the claim. A claimant
or the claimant’s authorized representative will have, upon
request and free of charge, reasonable access to, and copies of,
all documents, records, and other information relevant to the
claimant’s claim for benefits and may submit issues and
comments in writing. The review will take into account all
comments, documents, records, and other information submitted by
the claimant relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit
determination.
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If
the claimant fails to file a request for review within 60 days
of the denial notification, the claim will be deemed abandoned and
the claimant precluded from reasserting it. If the claimant does
file a request for review, his request must include a description
of the issues and evidence he deems relevant. Failure to raise
issues or present evidence on review will preclude those issues or
evidence from being presented in any subsequent proceeding or
judicial review of the claim.
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(e)
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Decision Upon Review
. The Minor Amendment
Committee will provide a prompt written decision on review. If the
claim is denied on review, the decision shall set forth:
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(i)
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the
specific reason or reasons for the adverse
determination;
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(ii)
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specific reference to pertinent Plan
provisions on which the adverse determination is based;
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(iii)
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a
statement that the claimant is entitled to receive, upon request
and free of charge, reasonable access to, and copies of, all
documents, records, and other information relevant to the
claimant’s claim for benefits; and
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(iv)
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a
statement describing any voluntary appeal procedures offered by the
Plan and the claimant’s right to obtain the information about
such procedures, as well as a statement of the claimant’s
right to bring an action under ERISA section 502(a).
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A decision will
be rendered no more than 60 days after the Minor Amendment
Committee’s receipt of the request for review, except that
such period may be extended for an additional 60 days if the
Minor Amendment Committee determines that special circumstances
(such as for a hearing) require such extension. If an extension of
time is required, written notice of the extension will be furnished
to the claimant before the end of the initial 60-day
period.
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(f)
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Finality of Determinations;
Exhaustion of Remedies . To the extent permitted by law,
decisions reached under the claims procedures set forth in this
Section shall be final and binding on all parties. No legal action
for benefits under the Plan shall be brought unless and until the
claimant has exhausted his remedies under this Section. In any such
legal action, the claimant may only present evidence and theories
which the claimant presented during the claims procedure. Any
claims which the claimant does not in good faith pursue through the
review stage of the procedure shall be treated as having been
irrevocably waived. Judicial review of a claimant’s denied
claim shall be limited to a determination of
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whether the
denial was an abuse of discretion based on the evidence and
theories the claimant presented during the claims
procedure.
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(g)
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Limitations Period
. Any suit or legal
action initiated by a claimant under the Plan must be brought by
the claimant no later than six months following a final decision on
the claim for benefits by the Minor Amendment Committee. The six
months limitation on suits for benefits will apply in any forum
where a claimant initiates such suit or legal action.
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5.
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DEFERRAL AND PAYMENT OF
COMPENSATION
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(i)
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Cash Incentive Deferral
Election .
In order to elect to defer cash incentive compensation earned
during a calendar year, a Participant shall file an irrevocable
Election Form before the beginning of such calendar year.
Notwithstanding the foregoing, (1) if the Company determines
that a cash incentive compensation award qualifies as
“performance-based compensation” under Code section
409A, a Participant may elect to defer a portion of the cash
incentive compensation award by filing an irrevocable Election Form
at such later time up until the date six months before the end of
the performance period as permitted by the Company, and (2) in
the first year in which an employee becomes eligible to participate
in the Plan, an irrevocable deferral election on a cash incentive
compensation award may be made with respect to services to be
performed subsequent to the election within 30 days after the
date the employee becomes eligible to participate in the Plan to
the extent permitted under Code section 409A.
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A
Participant’s cash incentive compensation award deferral
election may apply to:
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(a)
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100% of the cash incentive
compensation award,
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(b)
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any
amount in excess of a specified dollar amount of the cash incentive
compensation award,
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(c)
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any
amount up to a specified dollar amount of the cash incentive
compensation award, or
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(d)
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a
specified percentage (in whole numbers) of the cash incentive
compensation award.
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For purposes of
this Plan, the term “cash incentive compensation” shall
be deemed to include all amounts of cash compensation, whether or
not otherwise classified as incentive compensation, as permitted to
be deferred under this Plan by the Minor Amendment
Committee.
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(ii)
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Restricted Stock/Restricted Stock
Unit Deferral Election . A Participant can elect to defer
receipt of shares of Common Stock (or cash, if applicable)
attributable to grants of restricted stock or restricted stock
units under the Company’s restricted stock plan(s) by
completing and submitting to the Company an irrevocable Election
Form. A Participant may not revoke such an election after it is
received by the Company. In order to elect to defer receipt of
shares of Common Stock (or cash, if applicable) attributable to
grants of restricted stock or restricted stock units, a Participant
shall file an irrevocable Election Form before the beginning of the
calendar year in which the grant occurs. Notwithstanding the
foregoing, (1) if the Company determines that a grant of
restricted stock or restricted stock units qualifies as
“performance-based compensation” under Code section
409A, a Participant may elect to defer receipt of a portion of the
shares of Common Stock (or cash, if applicable) attributable to
such grants by filing an irrevocable Election Form at such later
time up until the date six months before the end of the performance
period which triggers the grant, as permitted by the Company, and
(2) in the year in which an employee first becomes eligible to
participate in this Plan, an irrevocable deferral election may be
made with respect to grants of restricted stock or restricted stock
units with respect to services to be performed subsequent to the
election. Such election must be made within 30 days after the
date the employee first becomes eligible to participate in the Plan
to the extent permitted under Code section 409A.
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(iii)
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Distribution of Deferred Cash
Incentive and Common Stock .
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(a)
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Cash incentive compensation that is
deferred under this Plan, plus any earnings thereon, shall be paid
in cash. Stock Units shall be paid in shares of Common Stock unless
the terms of the award provided for cash settlement, in which case
such Stock Units, plus any earnings thereon, shall be paid in
cash.
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(b)
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At
the time a Participant files his or her Election Form, he or she
must select (i) whether to receive his or her distribution of
amounts deferred under the Election Form upon a Separation from
Service or upon a specified distribution date, and (ii) a form
of distribution (in a single lump-sum payment or in substantially
equal annual installments for a period not to exceed ten
(10) years for such amounts). Notwithstanding any other
provision of the Plan, Participants must elect a specified
distribution date after December 1, 2005.
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(1)
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If
a Participant elects distribution upon a Separation from Service,
such distribution shall be made (or commence) as soon as
practicable following his or her Separation from Service; provided,
however, that such distribution shall be made no later than 90 days
following such Separation from Service.
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Notwithstanding the foregoing,
distributions may not be made to a Key Employee upon a Separation
from Service before the date which is six months after the date of
the Key Employee’s Separation from Service (or, if earlier,
the date of death of the Key Employee). If a Participant’s
distribution is delayed under this provision, the distribution
shall be made paid on the first day of the seventh month following
the Participant’s Separation from Service (or, if earlier,
the first day of the mon
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