DEFERRED COMPENSATION
PLAN
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1.
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HISTORY AND
PURPOSE
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General Mills, Inc. (the
“Company”) 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 sheltering 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, common stock issued under the Company’s stock
option plans, and restricted stock units issued under the
Company’s various stock plans granting restricted
stock.
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This amended and restated version of
the General Mills, Inc. Deferred Compensation Plan, the General
Mills, Inc. Deferred Compensation Plan (Grandfathered) (the
“Plan”) applies exclusively to amounts earned and
vested (within the meaning of section 409A of the Internal Revenue
Code (the “Code”) and regulations thereunder) before
January 1, 2005, and is intended to be grandfathered from Code
section 409A. No new deferrals may be made under this Plan after
December 31, 2004. Deferrals made after 2004 are subject to
the General Mills, Inc. 2005 Deferred Compensation Plan. It is
further intended that no “material modification” be
made to the Plan, as that term is used in Treasury Regulations
governing §409A, whether by this amendment and restatement or
otherwise.
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In
addition, this Plan is intended to be a successor plan with respect
to certain liabilities on behalf of certain individuals who had
deferred compensation accounts under the Nonqualified Deferred Plan
for Pillsbury Management and the Pillsbury Deferred Compensation
Program for Officers on U.S. Assignment immediately before
April 1, 2002, which liabilities were transferred to the
General Mills, Inc. Deferred Compensation Plan as a result of the
merger of The Pillsbury Company and General Mills, Inc.
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2.
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ELIGIBILITY
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An
individual is a Participant in the Plan if, prior to
January 1, 2005, such individual (i) was a Participant in
the Executive Incentive Plan, as it was amended from time to time,
(ii) was selected by management to participate in
“Compensation Plus,” or (iii) had an individual
agreement, approved by the Minor Amendment Committee, which
provides for participation in this Plan, and elected to defer
compensation or receipt of Common Stock pursuant to the provisions
of any of these programs or the agreement. Notwithstanding the
foregoing, the Minor Amendment Committee had the discretionary
authority to exclude from participation employees or groups of
employees of the Company who would otherwise have been eligible
under this Plan. No new Participants shall become eligible under
this Plan after December 31, 2004.
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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, 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 of Directors (the “Committee”)
shall administer certain portions of this Plan.
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(ii)
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Plan Administration
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Administration of the Plan shall
consist of interpreting and carrying out the provisions of the
Plan. The Minor Amendment Committee is endowed with the
discretionary authority to interpret the terms of the Plan,
determine the eligibility of employees to participate in the Plan,
the rights of Participants in the Plan, the nature and amount of
benefits to be received therefrom, and decide any disputes that may
arise under the Plan. The Minor Amendment Committee may provide
rules and regulations for the administration of the Plan consistent
with its terms and provisions. Any construction or interpretation
of the Plan and any determination of fact in administering the Plan
made in good faith by the Minor Amendment Committee shall be final
and conclusive for all Plan purposes.
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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 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
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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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4.
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DEFERRAL AND PAYMENT OF
COMPENSATION
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No
deferrals may be made after December 31, 2004 under this Plan.
Amounts that were deferred, and earned and vested (within the
meaning of Code section 409A and regulations thereunder) prior to
January 1, 2005 are subject to the following terms:
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(i)
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Cash Incentive Deferral
Election . A
Participant can elect to defer cash incentive compensation by
completing and submitting to the Company a cash deferral election
form by December 31 of each year. Such election shall apply to
the Participant’s cash incentive compensation, if any, to be
paid in the next calendar year. A Participant’s cash
incentive deferral election may apply to:
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(a)
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100% of the cash incentive
compensation,
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(b)
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any
amount in excess of a specified dollar amount,
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(c)
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any
amount up to a specified dollar amount, or
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(d)
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a
specified percentage (in whole numbers) of the cash incentive
compensation.
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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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Stock Option Gain Deferral
Election . A
Participant can elect to defer receipt of Net Shares (defined
below) of Common Stock resulting from a stock-for-stock exercise of
an exercisable stock option issued to the Participant by completing
and submitting to the Company an irrevocable stock option deferral
election at least six months in advance of exercising the stock
option (which exercise must be done on or prior to the expiration
of the stock option) and, on or prior to the exercise date,
delivering personally-owned shares equal in value to the option
exercise price on the date of the exercise. At the time of the
deferral election, the Participant can also choose to use some of
the shares subject to the stock option to satisfy any FICA,
Medicare or any other taxes due upon the exercise. “Net
Shares” means the difference between the number of shares of
Common Stock subject to the stock option exercise and the number of
shares of Common Stock delivered to satisfy the exercise price less
any shares used to satisfy FICA, Medicare or any other taxes due
upon the exercise. A Participant may not revoke a stock option gain
deferral election after it is received by the Company. A
Participant may choose to defer receipt of all or only a portion of
the Net Shares to be received upon
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exercise of a stock option. If only
a portion of the Net Shares is deferred, the balance will be issued
at the time of exercise.
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(iii)
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Restricted Stock/Restricted Stock
Unit Deferral Election . A Participant can elect to defer
receipt of the shares of Common Stock of the Company attributable
to nonvested restricted stock or restricted stock units under the
Company’s restricted stock plan(s) by completing and
submitting to the Company an irrevocable restricted stock deferral
election within the period specified by the Minor Amendment
Committee on the applicable deferral election form and prior to the
date such restricted stock or restricted stock units become vested
as determined under the Company’s various stock plans
granting restricted stock, as they may be amended from time to
time. A Participant may not revoke a restricted stock or restricted
stock unit deferral election after it is received by the Company. A
Participant may choose to defer receipt of all or only a portion of
the shares of Common Stock attributable to nonvested restricted
stock or the restricted stock units that have been granted to the
Participant by the Company. Any election to defer receipt of shares
of Common Stock attributable to restricted stock shall result in
the restricted stock being cancelled and replaced with the promise
of the Company to pay deferred compensation (in the form of
deferred restricted stock units) pursuant to the terms of the
Plan.
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(iv)
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Distribution of Deferred Cash
Incentive and Common Stock . Cash incentive compensation that
is deferred under this Plan, plus any earnings thereon, shall be
paid in cash. Stock option gain deferrals and any restricted stock
and restricted stock unit deferrals shall be paid in shares of
General Mills common stock. At the time of a Participant’s
deferral election, a Participant must also select a distribution
date and a form of distribution (i.e., lump sum vs. installments).
The distribution date may be any date that is at least one year
following: (1) in the case of cash incentive compensation, the
date the cash incentive would otherwise be payable; (2) in the
case of stock option gain deferrals, the exercise date for the
related stock option; and (3) in the case of deferrals related
to restricted stock or restricted stock units, the date such
restricted stock or restricted stock units are otherwise vested
under the terms of the Company’s various stock plans granting
restricted stock, as they may be amended from time to time;
provided that, in all cases, the Participant’s deferral
election must provide that distribution shall be made or commenced
no later than the date the Participant attains age 70.
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A
Participant may elect to have deferred cash amounts paid or Common
Stock distributed, as the case may be, in a single payment or in
substantially equal annual installments for a period not to exceed
ten (10) years, or up to fifteen (15) years for elections
made until December 31, 1985, or in another form requested by
the Participant, in writing, and approved by the Minor Amendment
Committee. Common Stock issuable under a single stock option grant
or a single restricted stock or restricted stock unit grant shall
have the same distribution date and form of distribution.
Notwithstanding the above, the following provisions shall
apply:
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(a)
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If
the employment of a Participant terminates for any reason other
than retirement at or after age 55 prior to the date any cash
incentive compensation award would otherwise have been made, then
any
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cash deferral election made with
respect to such incentive compensation award shall not become
effective.
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(b)
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If
a stock option, as to which a Participant has made a stock option
gain deferral election, terminates prior to the exercise date
selected by the Participant, or if the Participant dies or fails to
deliver personally-owned shares in payment of the exercise price,
then the deferral election shall not become effective.
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(c)
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In
the event of the voluntary resignation of a Participant
(other
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