2006 Compensation Plan for
Non-Employee Directors
The General Mills,
Inc. 2006 Compensation Plan for Non-Employee Directors (the
“Plan”) is hereby amended and restated, effective
September 25, 2006, by General Mills, Inc. The amended and
restated Plan incorporates previously adopted amendments since it
was first adopted and adds provisions deemed necessary or advisable
to comply with Code section 409A and the regulations thereunder.
The purpose of the Plan is to provide a compensation program which
will attract and retain qualified individuals not employed by
General Mills, Inc. and its subsidiaries (the
“Company”) to serve on the Board of Directors of the
Company (the “Board”) and to further align the
interests of non-employee directors with those of the stockholders
by providing that a portion of compensation will be linked directly
to increases in stockholder value.
2. EFFECTIVE
DATE, DURATION OF PLAN
This Plan shall
become effective as of September 25, 2006 subject to the
approval of the Plan by the stockholders. The Plan will terminate
on September 30, 2011 or such earlier date as determined by
the Board or the Compensation Committee of the Board (the
“Committee”); provided that no such termination shall
affect rights earned or accrued under the Plan prior to the date of
termination.
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 11.
“
Code ” means the Internal Revenue Code of 1986, as
amended.
“
Committee ” has the meaning set forth in
Section 2.
“ Common
Stock ” means Company common stock ($.10 par
value).
“
Company ” means General Mills, Inc. and its
subsidiaries.
“
Deferred Compensation Account ” has the meaning set
forth in Section 6(d).
“
Election Form ” means a written form provided by the
Committee pursuant to which a Participant may elect the form and
timing of distributions with respect to his or her retainer, Stock
Units and dividend equivalents under the Plan.
“ Fair
Market Value ” means the average of the intraday high and
low price of the national market composite price of the Common
Stock on the applicable date. Notwithstanding this definition,
effective January 1, 2007, “ Fair Market Value
” means the closing price on the New York Stock Exchange of
the Common Stock on the applicable date.
“ Key
Employee ” means a Participant treated as a
“specified employee” as of his 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 or its affiliate’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.
“
Option ” has the meaning set forth in
Section 7(a).
“
Participant ” has the meaning set forth in
Section 4.
“
Plan ” means the General Mills, Inc. 2006 Compensation
Plan for Non-Employee Directors as set forth herein and as
amended.
“ Plan
Year ” has the meaning set forth in
Section 6(a).
“
Separation from Service ” or “ Separate from
Service ” means a “separation from service”
within the meaning of Code section 409A.
“ Stock
Unit Account ” has the meaning set forth in
Section 8(a).
“ Stock
Units ” has the meaning set forth in
Section 8(a).
Each member of the
Board who is not an employee of the Company at the date
compensation is earned or accrued shall be eligible to participate
in the Plan unless prohibited from participating by the terms of
their employment (a “Participant”).
5. COMMON
STOCK SUBJECT TO THE PLAN
(a)
General . The Common Stock to be issued under this Plan is
to be made available from the authorized but unissued Common Stock,
shares of Common Stock held in the treasury, or Common Stock
purchased on the open market or otherwise. Subject to the
provisions of the next succeeding paragraphs, the maximum aggregate
number of shares authorized to be issued under the Plan shall be
700,000 and the maximum number of shares authorized to be issued
under the Plan in a single Plan Year shall be 160,000.
Upon forfeiture or
termination of Stock Units prior to vesting, the shares of Common
Stock subject thereto shall again be available for awards under the
Plan.
(b)
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 a Stock Unit
Account; and (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 transaction. Notwithstanding
anything in this Section to the contrary, an adjustment to an
Option under this Section 5(b) shall be made in a manner that will
not result in the grant of a new Option under Code
Section 409A.
(a)
General . Each non-employee director shall be entitled to
receive a retainer with respect to each one-year board term,
beginning the day of each annual stockholders’ meeting and
ending the day before the succeeding annual stockholders’
meeting (the “Plan Year”) in an amount determined from
time to time by the Board. Retainers shall be earned and paid at
the end of each of the Company’s fiscal quarters.
(b)
Normal Payment Terms . The normal payment terms for
retainers are cash in a lump sum. In the absence of an affirmative
election to the contrary, the
retainer (or
the portion not subject to such elections) shall be paid 10
business days following the last day of each quarterly period
described above in (a).
(c)
Deferral Elections . Each Participant may elect an
alternative form (lump sum vs. installments) in which a retainer
may be delivered and the timing for such delivery, pursuant to the
terms of Section 9. Participants shall make such election by
filing an irrevocable Election Form with the Committee before the
calendar year in which a Plan Year begins. The election shall apply
to amounts earned in a quarterly period described in (a) above
that begins during the Plan Year. Notwithstanding the foregoing, in
the first year in which a non-employee director becomes eligible to
participate in the Plan, an election may be made with respect to
services to be performed subsequent to the election, to the extent
permitted under Code section 409A. Such an election must be made on
an Election Form within 30 days after the date the
non-employee director becomes eligible to participate in the
Plan.
(d)
Deferred Cash Alternative . For each Participant who
affirmatively elects to defer receipt of his or her retainers in
the form of deferred cash, the Company shall establish a separate
account (a “Deferred Compensation Account”) and credit
such deferred cash compensation into that Account as of the date
the amounts would otherwise be paid. A separate Deferred
Compensation Account shall be established for each Plan Year a
Participant makes such a deferral election. Earnings, gains and
losses shall be credited to each such Deferred Compensation 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. 401(k) 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. Distributions from a Deferred Compensation Account
shall be made in accordance with Section 9.
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
Company’s obligations as to Deferred Compensation Accounts
under the Plan and certain other deferred compensation plans of the
Company. In the event of a Change of Control, the Company shall be
obligated to immediately contribute such amounts to the trust as
may be necessary to fully fund all Deferred Compensation Accounts
payable under the Plan. Any Participant in the Plan shall have the
right to demand and secure specific performance of this provision.
All assets held in the trust remain subject only to the claims of
the Company’s general creditors whose claims against the
Company are not satisfied because of the Company’s bankruptcy
or insolvency (as those terms are defined in the trust agreement).
No Participant has any preferred claim on, or beneficial ownership
interest in, any assets of the trust before the assets are paid to
the Participant and all rights
created under
the trust, as under the Plan, are unsecured contractual claims of
the Participant against the Company.
(e)
Common Stock Alternative . Each Participant may
affirmatively elect to receive all or a specified percentage of his
or her retainers for a Plan Year in shares of Common Stock, which,
if elected, will be issued 10 business days following the last day
of each quarterly period during the Plan Year described above in
(a). Only whole numbers of shares will be issued, with any
fractional share amounts paid in cash. For purposes of computing
the number of shares earned each quarter during the Plan Year, the
value of each share shall be equal to the Fair Market Value on the
third Business Day preceding the last day of each quarter described
above in (a) during the Plan Year. For the purposes of this
Plan, “Business Day” shall mean a day on which the New
York Stock Exchange is open for trading.
(f)
Death . Notwithstanding any other provision of the Plan, if
a Participant dies during a Plan Year, the balance of the amount
due for the full quarter in which death occurs shall be payable in
full to the Participant’s estate, in cash, 60 days
following the date of death.
7.
NON-QUALIFIED STOCK OPTIONS
(a) Grant
of Options . Each non-employee director on the effective date
of the Plan (or, if first elected after the effective date of the
Plan, on the date the non-employee director first attends a Board
meeting) shall be awarded an op
|
