Exhibit 10.1
GENERAL MILLS, INC.
2009 STOCK COMPENSATION PLAN
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 Company’s 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 Committee’s discretion. “Fair Market
Value” shall equal the closing price on the New York Stock Exchange of the
Company’s 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 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

 

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      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 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.

 

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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 Participant’s 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;     (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;

 

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  (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 Company’s 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 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.

 

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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 Participant’s 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 Company’s 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 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

 

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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 Person’s 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 Company’s 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 Company’s 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.

 

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  (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 Participant’s 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 Participant’s 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 Award’s 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.     (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.

 

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12. TERMINATION OF EMPLOYMENT

  (a)   Resignation or Termination for Cause. If the Participant’s employment by
the Company is terminated by either

  (i)   the voluntary resignation of the Participant, or     (ii)   a Company
discharge due to Participant’s illegal activities, poor work performance,
misconduct or violation of the Company’s Code of Conduct, policies or practices,

      then the Participant’s 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 Participant’s 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 Participant’s age and years of service with the Company equals or exceeds
70, (A) the Participant’s 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
Participant’s age and years of service with the Company is less than 70, (A) the
Participant’s 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 Participant’s 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
Participant’s 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).

      Notwithstanding the foregoing, any Section 409A Restricted Stock Units
that vest under this Section 12(b) shall be paid on the Participant’s 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 Participant’s beneficiary or
beneficiaries or, in the absence of such designation, by the Participant’s
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

 

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      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 Participant’s 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 Participant’s 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 Award’s 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 Participant’s 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 the
individual, the individual’s present and potential contribution to the Company’s
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

 

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      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 Participant’s 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
Participant’s 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.
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 Participant’s 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 Participant’s 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.

 

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17. NON-ALIENATION OF RIGHTS AND BENEFITS.
Subject to Section 16 and the rights of the Company established under the Plan’s
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 Participant’s 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:
Attention: Corporate Compensation
General Mills, Inc.
Number One General Mills Boulevard
Minneapolis, MN 55426
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 Plan’s term.