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.
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2.
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EFFECTIVE DATE AND DURATION OF
PLAN
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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.
All officers of
the Company shall be “Participants” eligible to receive
Awards under the Plan.
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.
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5.
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AWARDS OF CASH BONUSES, RESTRICTED
STOCK AND RESTRICTED STOCK UNITS
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(a)
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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.
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(b)
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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 Participant’s Award. The Committee, in its
discretion, may require, as a condition to the grant of Restricted
Stock or Restricted Stock Units, the purchase and deposit of Common
Stock owned by the Participant receiving such grant and the
forfeiture of such grant if such deposit is not made or maintained
during a required holding period. Such shares of deposited Common
Stock may not be otherwise sold or disposed of during the
applicable holding period. For purpose of computing the value of
Awards, each Restricted Stock or Restricted Stock Unit shall be
deemed to have a value equivalent to the Fair Market Value of one
share of Common Stock on the Grant Date.
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(c)
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Maximum Amount
. Notwithstanding any
other provision of this Plan, in no event shall the total Awards
value earned by any Participant for any one Performance Period
exceed 0.5 percent of the Company’s Net Earnings for
that Performance Period (“Maximum Amount
”).
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(d)
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Profit Sharing Resolution
. All awards under this
Plan shall be subject to General Mills’ 1933 Shareholder
Resolution on Profit Sharing, as amended.
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(e)
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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 Company’s 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
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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.
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6.
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RESTRICTED STOCK AND RESTRICTED
STOCK UNITS
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(a)
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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”.
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(b)
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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.
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(c)
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Dividends and Cash Dividend
Equivalents . Subject to the restrictions set
forth in Section 5(b), each Participant who receives
Restricted Stock shall have all rights as a Stockholder with
respect to such shares, including the right to vote the shares and
receive dividends and other distributions. A Participant who is
credited with Restricted Stock Units shall have no rights as a
stockholder with respect to such Restricted Stock Units until such
time as share certificates for Common Stock are issued to the
Participant. During the Restricted Period, however, the Company
shall pay to the Participant, on a quarterly basis, an amount (the
“Cash Dividend Equivalent”) equal to the sum of all
cash dividends declared by General Mills with record dates during
the prior quarter with respect to that number of shares of Common
Stock equivalent to the number of Restricted Stock Units credited
to the Participant’s Restricted Stock Units Account as of the
applicable record date.
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(d)
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Grant Agreement
. Each Grant shall be
confirmed by, and be subject to, the terms of an applicable Grant
Agreement.
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(a)
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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
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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.
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(b)
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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:
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(i)
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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)
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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
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(iii)
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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.
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(c)
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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.
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8.
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TRANSFERABILITY OF
GRANTS
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Except as
otherwise provided by rules of the Committee, shares of Restricted
Stock, Restricted Stock Units and other rights of Participants
under this Plan shall not be transferable by a Participant
otherwise than by (i) the Participant’s last will and
testament or (ii) by the applicable laws of descent and
distribution.
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