EXHIBIT 10.2

 

GENERAL MILLS, INC.

 

1998 EMPLOYEE STOCK PLAN

 

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GENERAL MILLS, INC.

 

1998 EMPLOYEE STOCK PLAN

 

 

 

1.

PURPOSE OF THE PLAN

 

The purpose of the General Mills, Inc. 1998 Employee Stock Plan (the “Plan”) is
to attract and retain able employees 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 through compensation that is based on the Company’s
stock. Grants may be made to employees under the Plan in lieu of salary
increases and certain other compensation and benefits.

 

 

 

2.

EFFECTIVE DATE AND DURATION OF PLAN

 

This Plan shall become effective as of September 28, 1998.

 

 

 

3.

ELIGIBLE PERSONS

 

Only persons who are employees of the Company shall be eligible to receive
grants of Stock Options, Restricted Stock or Restricted Stock Units (each
defined below) and become “Participants” under the Plan.

 

 

 

4.

AWARD TYPE

 

Under this Plan, the Compensation Committee of the Company’s Board of Directors
(the “Committee”) may award Participants options (“Stock Options”) to purchase
common stock of the Company ($.10 par value) (“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. The Exercise Price for each share
of Common Stock issuable under a Stock Option shall not be less than 100% of the
Fair Market Value of the Common Stock on the date of grant. “Fair Market Value”
shall equal the closing price of the Common Stock on the New York Stock Exchange
on the date of grant. The Committee may also grant Participants shares of Common
Stock or the right to receive shares of Common Stock subject to certain
restrictions (“Restricted Stock” or “Restricted Stock Units”) (Stock Options,
Restricted Stock and Restricted Stock Units are sometimes referred to as
“Awards”).

 

 

 

5.

STOCK OPTION TERM AND TYPE

 

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 granted under the Plan shall be determined
by the Committee, provided that the term of a Stock Option shall not exceed 10
years and one month.

 

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6.

COMMON STOCK SUBJECT TO THE PLAN

 

 

a)

Maximum Shares Available for Delivery. Subject to Section 6(b), the maximum
number of shares of Common Stock available for issuance to Participants under
the Plan shall be 28,000,000.

 

In addition, any Common Stock covered by a Stock Option granted under the Plan,
which is forfeited, cancelled or expires in whole or in part shall be deemed not
to be delivered for purposes of determining the maximum number of shares of
Common Stock available for grants under the Plan.

 

If any Stock Option is exercised by tendering Common Stock, either actually or
by attestation, to the Company as full or partial payment in connection with the
exercise of the Stock Option under the Plan, only the number of shares of Common
Stock issued net of the Common Stock tendered shall be deemed delivered for
purposes of determining the maximum number of shares available for grants under
the Plan. Upon forfeiture or termination of Restricted Stock or Restricted 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 an
account; and, if applicable, (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 transactions. Notwithstanding anything in this paragraph to the
contrary, an adjustment to an Option under this paragraph shall be made in a
manner that will not result in a new grant of an Option under Code Section 409A.

 

 

c)

Limits on Distribution. Distribution of shares of Common Stock or other amounts
under the Plan shall be subject to the following:

 

 

(i)

The total number of shares of Common Stock that shall be available for
Restricted Stock and Restricted Stock Unit Awards under the Plan shall be
limited to 15% of the total shares authorized for Awards hereunder.

 

 

(ii)

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.

 

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(iii)

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.

 

 

d)

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 grants, 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 shall be restricted in any manner.

 

 

 

7.

EXERCISE OF STOCK OPTIONS

 

 

a)

Exercise. Except as provided in Sections 11 and 12 (Change of Control and
Termination of Employment), each Stock Option may be exercised only in
accordance with the terms and conditions of the Stock Option grant and during
the periods as may be established by the Committee. Twenty percent of each Stock
Option granted under the Plan in lieu of salary increases and certain other
compensation and benefits may be exercised immediately upon granting and,
subject to the Participant’s continued employment with the Company, additional
20% portions of such Stock Option shall become exercisable each year thereafter.
All other Stock Options granted hereunder may be exercised only after three
years of the Participant’s continued employment with the Company following the
date of the Stock Option grant.

 

A Participant exercising a Stock Option 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.

 

 

b)

Payment. The Exercise Price 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); or

 

 

(iii)

by a combination of (i) and (ii) above.

 

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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.

 

 

c)

Deferrals. The Committee may permit or require Participants to defer receipt of
any Common Stock issuable upon exercise of a Stock Option, subject to such rules
and procedures as it may establish, which may include provisions for the payment
or crediting of interest, or dividend equivalents, including converting such
credits into deferred Common Stock equivalents.

 

 

 

8.

RESTRICTED STOCK AND RESTRICTED STOCK UNITS

 

With respect to Awards of Restricted Stock and Restricted Stock Units, the
Committee shall:

 

 

a)

select Participants to whom Awards will be made, provided that Restricted Stock
Units may only be awarded to those employees of the Company who are employed in
a country other than the United States;

 

 

b)

determine the number of shares of Restricted Stock or the number of Restricted
Stock Units to be awarded;

 

 

c)

determine the length of the restricted period, which shall be no less than one
year;

 

 

d)

determine the purchase price, if any, to be paid by the Participant for
Restricted Stock or Restricted Stock Units; and

 

 

e)

determine any restrictions other than those set forth in this Section 8.

 

Subject to the restrictions set forth in this Section 8, 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.

 

Each Participant who receives Restricted Stock Units shall be eligible to
receive, at the expiration of the applicable restricted period, 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. 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; provided, however, that quarterly during
the applicable restricted period for all Restricted Stock Units awarded
hereunder, the Company shall pay 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.

 

 

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9.

TRANSFERABILITY OF STOCK OPTIONS

 

Except as otherwise provided by rules of the Committee, no Stock Options 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 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 Section 8, no shares of Restricted Stock and no Restricted
Stock Units shall be sold, exchanged, transferred, pledged or otherwise disposed
of during the restricted period.

 

 

 

10.

TAXES

 

Whenever the Company issues Common Stock under the Plan, the Company may require
the recipient to remit to the Company an amount sufficient to satisfy any
Federal, state or local tax withholding requirements prior to the delivery of
such Common Stock, or, in the discretion of the Committee, upon the election of
the Participant, the Company may withhold from the shares to be delivered shares
sufficient to satisfy all or a portion of such tax withholding requirements.

 

 

 

11.

CHANGE OF CONTROL

 

Each outstanding Stock Option shall become immediately and fully exercisable for
a period of one (1) year following the date of the following occurrences, each
constituting a “Change of Control”:

 

 

a)

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 (a), the following acquisitions shall not be deemed
to result in a Change of Control: (i) any acquisition directly from the Company,
(ii) any acquisition by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (iv) any acquisition by any corporation
pursuant to a transaction that complies with clauses (i), (ii) and (iii) of
subsection (c) 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 (i) or (ii) 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

 

 

b)

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 of 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

 

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c)

The approval by the shareholders of the Company of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of the Company (“Business Combination”) or, if consummation of such
Business Combination is subject, at the time of such approval by stockholders,
to the consent of any government or governmental agency, the obtaining of such
consent (either explicitly or implicitly by consummation); excluding, however,
such a Business Combination pursuant to which (i) 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 that 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 Voting Securities, (ii) no Person (excluding 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 (iii) 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

 

 

d)

approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.

 

After such one (1) year period the normal Stock Option exercise provisions of
the Plan shall govern. Notwithstanding any other provision of the Plan, but
subject to Section 5, in the event a Participant’s employment with the Company
is terminated within two (2) years of any of the events specified in (a), (b),
(c) or (d), all outstanding Stock Options of such Participant at that date of
termination shall be exercisable for a period of six (6) months beginning on the
date of termination.

 

With respect to Stock Option grants outstanding as of the date of any such
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 and any such deposited stock shall be promptly returned
to the Participant.

 

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In the event of a Change of Control, a Participant shall vest in all shares of
Restricted Stock and Restricted Stock Units, effective as of the date of such
Change of Control, and any deposited shares of Common Stock shall be promptly
returned to the Participant.

 

 

 

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 policies or practices,

 

then Participant’s Stock Options shall terminate three months after such
termination (but in no event beyond the original full term of the Stock Options)
and no Stock Options shall become exercisable after such termination, and all
shares of Restricted Stock and Restricted Stock Units which are subject to
restriction on the date of termination shall be forfeited.

 

 

b)

Other Termination. If the Participant’s employment by the Company terminates for
any reason other than specified in Sections 11, 12 (a), (c), (d) or (e), the
following rules shall apply:

 

 

(i)

In the event that, at the time of such termination, the sum of the Participant’s
age and service with the Company equals or exceeds 70, the following shall
apply:

 

 

(A)

The Participant’s outstanding Stock Options shall continue to become exercisable
(and remain exercisable), and shares of Restricted Stock and Restricted Stock
Units subject to share deposit requirements shall continue to vest, each
according to the schedule established at the time of grant, unless otherwise
provided in the applicable Award agreement.

 

 

(B)

Shares of Restricted Stock and Restricted Stock Units not subject to share
deposit requirements or attributable to a Participant whose termination of
employment is on or after August 1, 2003, shall fully vest.

 

 

(ii)

In the event that, at the time of such termination, the sum of Participant’s age
and service with the Company is less than 70, Participant’s outstanding
unexercisable Stock Options and unvested Restricted Stock and Restricted Stock
Units shall become exercisable or vest, as the case may be, as of the date of

 

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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 Options 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. All
other Stock Options, shares of Restricted Stock and Restricted Stock Units shall
be forfeited as of the date of termination. Provided, however, that if the
Participant is an executive officer of the Company, the Participant’s
outstanding Stock Options 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 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, and all shares of Restricted Stock and Restricted Stock Units shall vest
as of the date of termination.

 

 

c)

Death. If a Participant dies while employed by the Company, any Stock Option
previously granted under this Plan may be exercised by the person designated in
such Participant’s last will and testament or, in the absence of such
designation, by the Participant’s estate, to the full extent that such Stock
Option could have been exercised by such Participant immediately prior to death.
Any outstanding Stock Options granted on or after June 1, 2002, which, as of the
date of death, are not yet exercisable, shall fully vest and become exercisable
upon death. Outstanding Stock Options granted prior to June 1, 2002, which, as
of the date of death, are not yet exercisable, shall fully vest and become
exercisable in a pro-rata amount, based on the full months of employment
completed during the full vesting period of the Stock Option from the date of
grant to the date of death.

 

With respect to Stock Options which require the deposit of owned Common Stock as
a condition to obtaining exercise rights, in the event a Participant dies while
employed by the Company, such Stock Options may be exercised as provided in the
first paragraph of this Section 12(c) and any owned Common Stock deposited by
the Participant pursuant to such grant shall be promptly returned to the person
designated in such Participant’s last will and testament or, in the absence of
such designation, to the Participant’s estate, and all requirements regarding
deposit by the Participant shall be terminated.

 

A Participant who dies during any applicable restricted period, for Restricted
Stock or Restricted Stock Units granted on or after June 1, 2002, shall fully
vest in such shares of Restricted Stock or Restricted Stock Units, effective as
the date of death. A Participant who dies during any applicable restricted
period, for any Restricted Stock or Restricted Stock Units granted prior to
June 1, 2002, shall vest in a proportionate number of such shares of Restricted
Stock or Restricted Stock Units, effective as of the date of death. Such
proportionate vesting shall be pro-rata, based on the number of full months of
employment completed during the restricted period prior to the date of death, as
a percentage of the applicable restricted period.

 

 

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d)

Retirement. The Committee shall determine, at the time of grant, the treatment
of the Stock Options, Restricted Stock and Restricted Stock Units upon the
retirement of the Participant. Unless other terms are specified in the original
Grant, if the termination of employment is due to a Participant’s retirement on
or after age 55, the Participant may exercise a Stock Option, subject to the
original terms and conditions of the Stock Option and shall fully vest in all
shares of Restricted Stock or Restricted Stock Units effective as of the date of
retirement (unless any such Award specifically provides otherwise).

 

 

e)

Spin-offs. If the termination of employment is due to the cessation, transfer,
or spin-off of a complete line of business of the Company, the Committee, in its
sole discretion, shall determine the treatment of all outstanding Awards under
the Plan.

 

 

 

13.

ADMINISTRATION OF THE PLAN

 

 

a)

Administration. The authority to control and manage the operations and
administration of the Plan shall be vested in Committee in accordance with this
Section 13.

 

 

b)

Selection of Committee. The Committee shall be selected by the Board, and shall
consist of two or more members of the Board.

 

 

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 covered by the Awards, to establish
the terms, conditions, performance criteria, restrictions, and other provisions
of such Awards, 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.

 

 

(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, to
establish, amend, and rescind any rules and regulations relating to the Plan, to
determine the terms and provisions of any agreements made pursuant to the Plan,
and to make all other determinations that may be necessary or advisable for the
administration of the Plan.

 

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(iv)

Any interpretation of the Plan by the Committee and any decision made by it
under the Plan is final and binding.

 

 

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.

 

 

 

14.

AMENDMENTS OF THE PLAN

 

The Committee may from time to time prescribe, amend and rescind rules and
regulations 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
Committee to:

 

 

a)

permit granting of Stock Options at less than Fair Market Value; and

 

 

b)

except as provided in Section 6, permit the repricing of outstanding Stock
Options.

 

No termination, modification, suspension, or amendment of the Plan shall alter
or impair the rights of any Participant pursuant to an outstanding Award without
the consent of the Participant. There is no obligation for uniformity of
treatment of Participants 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.

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:

 

General Mills, Inc.

Number One General Mills Boulevard

Minneapolis, Minnesota 55426

Attention: Corporate Compensation

 

 

 

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