Exhibit 10.9 to General Mills, Inc. Form 10-K for fiscal year ended May 27, 2007









EXHIBIT 10.9


 


GENERAL MILLS, INC.


1996 COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS


 







GENERAL MILLS, INC.

1996 COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS


PART I


GENERAL PROVISIONS


	
 

	
 


	
A.

	
PURPOSE





          The
purpose of the General Mills, Inc. 1996 Compensation Plan for Non-Employee
Directors (the “Plan”) is to provide a compensation program which will attract
and retain qualified individuals not employed by General Mills, Inc. or its
subsidiaries (the “Company”) to serve on the Board of Directors of the Company
(the “Board”) and to further align the interests of non-employee directors with
those of the stockholders by providing that a portion of compensation will be
linked directly to increases in stockholder value.


	
 

	
 


	
B.

	
EFFECTIVE DATE, DURATION OF PLAN AND TRANSITION
  RIGHTS





          This
Plan shall become effective as of September 30, 1996, subject to the approval
of the Plan by the stockholders. The Plan will terminate on September 30,
2001 or such earlier date as determined by the Board or the Compensation
Committee of the Board (the “Committee”); provided that no such termination
shall affect rights earned or accrued under the Plan prior to the date of
termination.


          This
Plan supersedes and replaces the General Mills, Inc. Compensation Plan for
Non-Employee Directors, effective as of January 1, 1979 (the “1979 Plan”), the
General Mills, Inc. Retirement Plan for Non-Employee Directors, effective as of
April 28, 1986 (the “1986 Plan”) and the General Mills Stock Plan for
Non-Employee Directors, effective as of September 17, 1990 (the “1990 Plan”).
Participant rights accrued as of September 30, 1996 under the 1979 Plan and the
1990 Plan shall remain in effect but no new rights or benefits shall accrue
pursuant to such plans. The 1986 Plan was terminated in February 1996.
Participants who have accrued rights under the 1986 Plan shall receive a one
time grant of Stock Units (“Stock Units”) representing the right to receive
shares of General Mills, Inc. Common Stock ($.10 per value) (“Common Stock”)
equal to the value as of September 30, 1996 of the participant’s accrued
benefit under the 1986 Plan. The value of each Stock Unit shall be deemed equal
to the mean of the high and low price of shares of Common Stock on the New York
Exchange on September 30, 1996. Common Stock issued in respect of Stock Units
granted in lieu of accrued benefits under the 1986 Plan shall be distributed
commencing on the director’s retirement from the Board, on the date or dates
elected by the director at least one year prior to the date of his or her
retirement from the Board. In the absence of such an election, such Common
Stock shall be issued in ten substantially equal annual installments on the
January 1 of each year following the year in which the participant ceases
to be a director. Each participant awarded Stock Units shall receive, upon
distribution, one share of Common Stock for each Stock Unit awarded, and the
Company shall issue to and register in the name of each such participant a
certificate for that number of shares of Common Stock. Participants receiving
Stock Units 






pursuant to this Part I, Section B shall have the same rights, protections and limitations as those provided
participants receiving Stock Units pursuant to Part III, Section B.3. and Section C.1. hereof.


	
 

	
 


	
C.

	
PARTICIPATION





          Each
member of the Board who is not an employee of the Company at the date
compensation is earned or accrued shall be eligible to participate in the Plan.


	
 

	
 


	
D.

	
COMMON STOCK SUBJECT TO THE PLAN





          Common
Stock to be issued under this Plan may be made available from the authorized
but unissued Common Stock, shares of Common Stock held in the treasury, or
Common Stock purchased on the open market or otherwise. Subject to the provisions
of the next succeeding paragraph, the maximum aggregate number of shares
authorized to be issued under the Plan shall be 250,000.


          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.


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PART II


ANNUAL RETAINER
AND MEETING FEES


	
 

	
 


	
A.

	
COMPENSATION STRUCTURE








	
 

	
 

	
 


	
 

	
1.

	
Each non-employee director shall be entitled to
  receive an annual retainer and meeting fees as shall be determined from time
  to time by the Board.


	
 

	
 

	
 


	
 

	
2.

	
Each non-employee director of the Company may elect
  by written notice to the Company on or before each annual stockholders’
  meeting to participate in the compensation alternative provisions of the
  Plan. Any combination of the alternatives -- Cash, Deferred Cash and/or
  Common Stock -- may be elected, provided the aggregate of the alternatives
  elected equals one hundred percent of the non-employee director’s compensation
  at the time of the election.


	
 

	
 

	
 


	
 

	
3.

	
The election shall remain in effect for a one-year
  period which shall begin the day of the annual stockholders’ meeting and
  terminate the day before the succeeding annual stockholders’ meeting
  (hereinafter “Plan Year”).


	
 

	
 

	
 


	
 

	
4.

	
The Plan Year shall include four plan quarters
  (hereinafter “Plan Quarters”). Plan Quarters shall correspond to the
  Company’s fiscal quarters.


	
 

	
 

	
 


	
 

	
5.

	
A director elected to the Board at a time other than
  the annual stockholders’ meeting may elect, by written notice to the Company
  before such director’s term begins, to participate in the compensation
  alternatives for the remainder of that Plan Year, and elections for
  succeeding years shall be on the same basis as other directors.


	
 

	
 

	
 


	
 

	
6.

	
Periodically, the Company shall supply to each
  participant an account statement of participation under the Plan.








	
 

	
 


	
B.

	
CASH ALTERNATIVE








	
 

	
 

	
 


	
 

	
1.

	
Each non-employee director who elects to participate
  under the cash compensation provision of the Plan shall be paid all or the
  specified percentage of his or her compensation for the Plan Year in cash,
  and such cash payment shall be made as of the end of each Plan Quarter.


	
 

	
 

	
 


	
 

	
2.

	
If a participant dies during a Plan Year, the
  balance of the amount due to the date of the participant’s death shall be
  payable in full to such participant’s designated beneficiary, or, if none,
  the estate as soon as practicable following the date of death.


	
 

	
 

	
 


	
C.

	
DEFERRED CASH ALTERNATIVE


	
 

	
 


	
 

	
1.

	
Each non-employee director may elect to have all or
  a specified percentage of his or her compensation for the Plan Year deferred
  until the participant ceases to be a director.





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2.

	
For each director who has made this deferred cash
  election, the Company shall establish a deferred compensation account and
  shall credit such account at the end of each plan quarter for the
  compensation due. Interest shall be credited to each such account monthly
  based on the following rates as specified by the Committee from time to time:








	
 

	
 

	
 

	
 


	
 

	
 

	
a.

	
the rate of return as from time to time earned by
  the Fixed Income Fund of the Voluntary Investment Plan of General Mills, Inc.
  (VIP); or


	
 

	
 

	
 

	
 


	
 

	
 

	
b.

	
the rate of return as from time to time earned by
  the Equity Fund of the VIP; or


	
 

	
 

	
 

	
 


	
 

	
 

	
c.

	
any other rates of return of other funds or
  portfolios established under a qualified benefit plan maintained by the
  Company which the Minor Amendment Committee, or its delegate, in its
  discretion, may from time to time establish.








	
 

	
 

	
 


	
 

	
3.

	
Distribution of the participant’s deferred
  compensation account shall be as follows:








	
 

	
 

	
 


	
 

	
a.

	
at the time, and in the form of payment, elected by
  the participant at the time of deferral; or


	
 

	
 

	
 


	
 

	
b.

	
in the absence of an election at the time of
  deferral, in ten substantially equal annual installments beginning on January
  1 of each year following the year in which the participant ceases to be a
  director; provided, however, that for compensation earned in Plan Years
  commencing after December 9, 1996, distributions must be made or commenced by
  the later of (i) the date the participant attains age 70 and (ii) five years
  after the director’s retirement from the Board.








	
 

	
 

	
 


	
 

	
4.

	
In the event of the termination of a participant
  from Board service other than by retirement, the Committee may in its sole
  discretion require that distribution of all amounts allocated to a
  participant’s deferred compensation account be accelerated and distributed as
  of the first business day of the calendar year next following termination.


	
 

	
 

	
 


	
 

	
5.

	
The Company has established a Supplemental Benefits
  Trust with Norwest Bank Minnesota, N.A. as Trustee to hold assets of the
  Company under certain circumstances as a reserve for the discharge of the
  Company’s obligations as to deferred cash compensation under the Plan and certain
  other plans of deferred compensation of the Company. In the event of a Change
  in Control as defined in Part IV hereinbelow, the Company shall be obligated
  to immediately contribute such amounts to the Trust as may be necessary to
  fully fund all cash benefits payable under the Plan. Any participant of the
  Plan shall have the right to demand and secure specific performance of this
  provision. All assets held in the trust remain subject 





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only to the claims of the Company’s general
  creditors whose claims against the Company are not satisfied because of the
  Company’s bankruptcy or insolvency (as those terms are defined in the Trust
  Agreement). No participant has any preferred claim on, or beneficial
  ownership interest in, any assets of the Trust before the assets are paid to
  the participant and all rights created under the Trust, as under the Plan,
  are unsecured contractual claims of the participant against the Company.








	
 

	
 


	
D.

	
GMI COMMON STOCK ALTERNATIVE








	
 

	
 

	
 


	
 

	
1.

	
Each participant may elect to receive all or a
  specified percentage of his or her compensation in shares of Common Stock,
  which will be issued at the end of each Plan Quarter.


	
 

	
 

	
 


	
 

	
2.

	
The Company shall ensure that an adequate number of
  shares of Common Stock are available for distribution to those participants
  making this election.


	
 

	
 

	
 


	
 

	
3.

	
Only whole numbers of shares will be issued, with
  any fractional share amounts paid in cash.


	
 

	
 

	
 


	
 

	
4.

	
For purposes of computing the number of shares
  earned each Plan Quarter, the value of each share shall be equal to the mean
  of the high and low price of shares of Common Stock on the New York Stock
  Exchange on the third Business Day preceding the last day of each Plan
  Quarter. For the purposes of this Plan, “Business Day” shall mean a day on
  which the New York Stock Exchange is open for trading.


	
 

	
 

	
 


	
 

	
5.

	
If a participant dies during a Plan Year, the
  balance of the amount due to the date of the participant’s death shall be
  payable in full to the participant’s designated beneficiary, or, if none, to
  the participant’s estate, in cash, as soon as practicable following the date
  of death.







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PART III


STOCK COMPENSATION


	
 

	
 


	
A.

	
NON-QUALIFIED STOCK OPTIONS








	
 

	
 

	
 


	
 

	
1.

	
Grant of Options. Each non-employee director on the effective date of the Plan (or, if first elected after
the effective date of the Plan, on the date the non-employee director is first elected) shall be awarded an option (an
“Option”) to purchase 2,500 shares of Common Stock. As of the close of business on each successive annual
stockholders’ meeting date after the date of the original award, each non-employee director re-elected to the Board shall be
granted an additional Option to purchase 2,500 shares of Common Stock (or, beginning September 27, 1999, an Option to purchase
5,000 shares of Common Stock). All Options granted under the Plan shall be non-statutory options not entitled to special tax
treatment under Section 422 of the Internal Revenue Code of 1986, as amended.







	
 

	
 

	
 


	
 

	
2.

	
Option Exercise Price. The per
  share price to be paid by the non-employee director at the time an Option is
  exercised shall be 100% of the Fair Market Value of the Common Stock on the
  date of grant. 


	
 

	
 

	
 


	
 

	
 

	
“Fair Market Value” shall equal the closing price
  for the Common Stock on the New York Stock Exchange on the relevant date or,
  if the New York Stock Exchange is closed on that date, on the last preceding
  date on which the Exchange was open for trading.


	
 

	
 

	
 


	
 

	
3.

	
Term of Option. Each Option shall
  expire ten (10) years from the date of grant.


	
 

	
 

	
 


	
 

	
4.

	
Exercise and Vesting of Option.
  Each Option will vest on the date of the annual stockholders’ meeting next
  following the date the Option is granted. If, for any reason, a non-employee
  director ceases to serve on the Board prior to the date an Option vests, such
  Option shall be forfeited and all further rights of the non-employee director
  to or with respect to such Option shall terminate. If a participant should
  die while employed by the Company, any vested Option 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 and any unvested
  Options shall vest and become exercisable in a proportionate amount, based on
  the full months of service completed during the vesting period of the Option
  from the date of grant to the date of death.


	
 

	
 

	
 


	
 

	
5.

	
Method of Exercise and Tax Obligations.
  Each notice of exercise shall be accompanied by the full purchase price of
  the shares being purchased. Such payment may be made in cash, check, shares
  of Common Stock valued using the Fair Market Value as of the exercise date or
  a combination thereof. The Company may also require payment of the amount of
  any federal, state or local withholding tax attributable to the exercise of
  an Option or the delivery of shares of Common Stock.


	
 

	
 

	
 


	
 

	
6.

	
Non-transferability. Except as
  provided by rule adopted by the Committee, an Option shall be non-assignable
  and non-transferable by a non-employee director other than by will or the
  laws of descent and distribution. A non-employee director shall forfeit any
  Option assigned or transferred, voluntarily or involuntarily, other than as
  permitted under this subsection.





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B.

	
DEFERRAL OF STOCK OPTION GAINS





          Under
the Plan, Participants may defer receipt of the net shares of Common Stock to
be issued upon the stock-for-stock exercise of an Option issued hereunder, as
well as dividend equivalents on the net shares.


	
 

	
 

	
 


	
 

	
1.

	
Option Gain Deferral Election. A
  participant can elect to defer receipt of Net Shares (defined below) of
  Common Stock resulting from a stock-for-stock exercise of an exercisable
  Option issued to the participant by completing and submitting to the Company
  an irrevocable stock option deferral election at least six months in advance
  of exercising the Option (which exercise must be done on or prior to the
  expiration of the Option) and, on or prior to the exercise date, delivering
  personally-owned shares equal in value to the Option exercise price on the
  date of the exercise. “Net Shares” means the difference between the number of
  shares of Common Stock subject to the Option exercise and the number of
  shares of Common Stock delivered to satisfy the Option exercise price. A
  participant may not revoke an Option gain deferral election after it is
  received by the Company. A participant may choose to defer receipt of all or
  only a portion of the Net Shares to be received upon exercise of an Option.
  If only a portion of the Net Shares is deferred, the balance will be issued
  at the time of exercise.


	
 

	
 

	
 


	
 

	
2.

	
Distribution of Deferred Common Stock.
  At the time of a participant’s election to defer receipt of Common Stock
  issuable upon an Option exercise or upon the election to receive Stock Units
  as provided in Part III, Section C.1. a participant must also select a
  distribution date and a form of distribution. The distribution date may be
  any date that is at least one year subsequent to either the exercise date for
  the related Option or the date of grant in the case of Stock Units granted
  under Part III, Section C.1. but the distribution must be made or commenced
  by the later of (i) the date the participant attains age 70 and (ii) five
  year after the date of the director’s retirement from the Board.


	
 

	
 

	
 


	
 

	
 

	
A participant may elect to have deferred Common Stock
  distributed in a single payment or in substantially equal annual installments
  for a period not to exceed ten (10) years, or in another form requested by
  the Participant, in writing, and approved by the Committee. In the absence of
  an election, Common Stock issued in respect of Stock Units shall be
  distributed in ten substantially equal annual installments beginning on
  January 1 of each year following the year in which the participant
  ceases to be a director. Common Stock issuable under a single Option grant or
  pursuant to a single grant under Part III, Section C.1. shall have the same
  distribution date and form of distribution. Notwithstanding the above, the
  following provisions shall apply:








	
 

	
 

	
 


	
 

	
a.

	
If an Option as to which a participant has made an Option
  gain deferral election terminates prior to the exercise date selected by the
  participant, or if the participant dies or fails to deliver personally-owned 





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shares in payment of the exercise price, then the
  deferral election shall not become effective.


	
 

	
 

	
 


	
 

	
b.

	
In the event of the termination of a participant
  from Board service other than by retirement, the Committee may, in its sole
  discretion, require that distribution of all Stock Units allocated to a
  participant’s Deferred Stock Unit Accounts (as defined in Part III, Section
  B.3.a. below) be accelerated and distributed as of the first business day of
  the calendar year next following the date of termination.


	
 

	
 

	
 


	
 

	
c.

	
At the time elected by the participant for
  distribution of Common Stock attributable to allocations under the
  participant’s Deferred Stock Unit Accounts, the Company shall cause to be
  issued to the Participant, within three (3) days of the date of distribution,
  shares of Common Stock equal to the number of Stock Units credited to the
  Deferred Stock Unit Account and cash equal to any dividend equivalent amounts
  which had not been used to “purchase” additional Stock Units as provided
  below. Prior to distribution and pursuant to any rules the Committee may
  adopt, a Participant may authorize the Company to withhold a portion of the
  shares of Common Stock to be distributed for the payment of all federal,
  state, local and foreign withholding taxes required to be collected in
  respect of the distribution.








	
 

	
 

	
 


	
 

	
3.

	
Deferred Stock Unit Accounts and Dividend
  Equivalents.








	
 

	
 

	
 


	
 

	
a.

	
A deferred stock unit account (“Deferred Stock Unit
  Account”) will be established for each Option grant covered by a participant
  election to defer the receipt of Common Stock under Part III, Section B.1.
  above and, for each Net Share deferred, a Stock Unit will be credited to the
  Deferred Stock Unit Account as of the date of the Option exercise. A Deferred
  Stock Unit Account will also be established each time a participant elects to
  receive Stock Units pursuant to Part III, Section C.1. hereof. Participants
  may make an election to receive dividend equivalents on Stock Units in cash
  or reinvest such amount, and any change to such election shall become
  effective six months after the date of the change. If the amounts are
  reinvested, on each dividend payment date for the Company’s Common Stock, the
  Company will credit each Deferred Stock Unit Account with an amount equal to
  the dividends paid by the Company on the number of shares of Common Stock
  equal to the number of Stock Units in the Deferred Stock Unit Account.
  Dividend equivalent amounts credited to each Deferred Stock Unit Account
  shall be used to “purchase” additional Stock Units for the Deferred Stock
  Unit Account at a price equal to the mean of the high and low price of the
  Common Stock on the New York Stock Exchange on the dividend date. No
  fractional Stock Units will be credited. The Committee may, in its sole
  discretion, direct either that all dividend equivalent amounts be paid
  currently or all such amounts 





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be reinvented if, for any reason, such Committee
  believes it is in the best interest of the Company to do so. If the
  participant fails to make an election, the dividend equivalent amounts shall
  be reinvested. Periodically, each participant will receive a statement of the
  number of Stock Units in his or her Deferred Stock Unit Account(s).


	
 

	
 

	
 


	
 

	
b.

	
Participants who elect under the Plan to defer the
  receipt of Common Stock issuable upon the exercise of Options or elect to
  receive Stock Units under Part III, Section C.1. below will have no rights as
  stockholders of the Company with respect to allocations made to their
  Deferred Stock Unit Account(s), except the right to receive dividend
  equivalent allocations under Part III, Section B.3.a. above. Stock Units may
  not be sold, transferred, assigned, pledged or otherwise encumbered or
  disposed.








	
 

	
 


	
C.

	
RESTRICTED STOCK AND STOCK UNITS








	
 

	
 

	
 


	
 

	
1.

	
Awards. Until September 27, 1999, on the effective date of the Plan (or, if a non-employee director is
first elected after the effective date of the Plan, on the date the non-employee director is first elected) and at the close of
business on each successive annual stockholders’ meeting date, each non-employee director may elect to receive either (i) an
award of five hundred (500) shares of Restricted Stock subject to vesting and restricted as described in subsection 2 hereof (the
“Restricted Stock”) or (ii) an award of five hundred (500) Stock Units, subject to vesting as provided in subsection 2.
Only non-employee directors re-elected to the Board shall be entitled to a grant under this Section III. C.1. of Restricted Stock
or Stock Units awarded at the close of business on an annual meeting date after the date of the original grant to the non-employee
director. Beginning September 27, 1999, only Stock Units and not Restricted Stock will be awarded under the Plan.


	
 

	
 

	
 


	
 

	
2.

	
Vesting of and Restrictions on Restricted Stock and Stock Units. A participant’s interest in the
Restricted Stock and Stock Units shall vest on the date of the annual stockholders’ meeting next following the date of the
award of the Restricted Stock or Stock Units (the “Restricted Period”). If, for any reason, a non-employee director
ceases to serve on the Board prior to the date the non-employee director’s interest in a grant of Restricted Stock or Stock
Units vests, such Restricted Stock and Stock Units shall be forfeited and all further rights of the non-employee director to or
with respect to such Restricted Stock or Stock Units shall terminate. A participant who dies prior to the vesting of Restricted
Stock or Stock Units shall vest in a proportionate number of shares of Restricted Stock or Stock Units, based on the full months
of service completed during the vesting period of the Restricted Stock or Stock Units from the date of grant to the date of death.
Restricted Stock may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed until the Restricted Period






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has expired and Stock Units may not be sold,
  transferred, assigned, pledged or otherwise encumbered or disposed until such
  time as share certificates for Common Stock are issued to the participants.


	
 

	
 

	
 


	
 

	
3.

	
Distribution of Stock Units.








	
 

	
 

	
 


	
 

	
a.

	
Each participant electing the award of Stock Units under
  Part III, Section C.1. above must select a date of distribution and form of
  distribution as provided under Part III, Section B.2. The participant may
  also elect to have dividend equivalents payable on Stock Units paid currently
  or reinvested in Stock Units as provided under Part III, Section B.3. 








	
 

	
 

	
 


	
 

	
4.

	
Other Terms and Conditions. Any
  shares of Restricted Stock granted under the Plan may be evidenced in such
  manner as the Committee deems appropriate, including, without limitation,
  book-entry registration or issuance of stock certificates, and may be held in
  escrow. Each participant granted 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. The Company may require
  payment of the amount of any federal, state or local withholding tax
  attributable to the constructive or actual delivery of shares of Common Stock
  pursuant to the terms of this Agreement.








	
 

	
 


	
D.

	
GENERAL PROVISIONS FOR DEFERRED CASH, OPTION GAINS
  AND RSU’s





          The
following provisions shall apply to the deferral of cash compensation described
in Part II, Section C hereof, the deferral of receipt of Common Stock issued
upon exercise of Options described in Part III, Section B hereof and the
treatment of Stock Units granted under Part III, Section C hereof.


	
 

	
 

	
 


	
 

	
1.

	
A participant may, at any time prior or subsequent
  to the commencement of benefit payments or distribution of Common Stock in
  respect of Stock Units under this Plan, elect in writing to have his or her
  form of distribution under this Plan changed to an immediate single
  distribution which shall be made within one (1) business day of receipt by
  the Company of such request in the case of deferred cash and three (3)
  business days in the case of Common Stock; provided that the cash amount or
  number of shares of Common Stock subject to such single distribution shall be
  reduced by an amount or number of shares of Common Stock equal to the product
  of (X) the rate for set forth in Statistical Release H.15(519), or any
  successor publication, as published by the Board of Governors of the Federal
  Reserve System for one-year U.S. Treasury notes under the heading “Treasury
  Constant Maturities” for the first day of the calendar month in which the
  request for a single sum distribution is received by the Company and (Y)
  either (i) as to a cash distribution, the total single sum distribution
  otherwise payable (based on the value of the account as of the first day of
  the month 





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in which the single sum amount is paid, adjusted by
  a pro-rata portion of the specified rate of return for the prior month in
  which the single sum is paid, determined by multiplying the actual rate of
  return for such prior month by a fraction, the numerator of which is the
  number of days in the month in which the request is received prior to the
  date of payment, and the denominator of which is the number of days in the
  month), or (ii) as to a distribution of Common Stock in respect of Stock Units,
  the number of Stock Units held on behalf of the participant multiplied by the
  mean of the high and low price of shares of Common Stock on the New York
  Stock Exchange on the date of the request or, if the date of the request is
  not a Business Day, on the Business Day preceding the date of the request.


	
 

	
 

	
 


	
 

	
2.

	
In the event of a severe financial hardship
  occasioned by an emergency, including, but not limited to, illness,
  disability or personal injury sustained by the participant or a member of the
  participant’s immediate family, a participant may apply to receive a
  distribution, including a distribution of Common Stock in respect of Stock
  Units, earlier than initially elected. The Committee may, in its sole
  discretion, either approve or deny the request. The determination made by the
  Committee will be final and binding on all parties. If the request is
  granted, the distributions will be accelerated only to the extent reasonably
  necessary to alleviate the financial hardship.


	
 

	
 

	
 


	
 

	
3.

	
If the death of a participant occurs before a full
  distribution of deferred cash amounts or Common Stock in respect of Stock
  Units is made, a single distribution shall be made to the beneficiary
  designated by the participant to receive such amounts. This distribution
  shall be made as soon as practical following notification that death has
  occurred. In the absence of any such designation, the distribution shall be
  made to the personal representative, executor or administrator of the
  participant’s estate.


	
 

	
 

	
 


	
 

	
4.

	
As to all previous and future Plan years, and
  subject to the last sentence of the first paragraph of Part III, Section B.2.
  hereof, a participant who (a) has elected a distribution date and
  distribution in either a single distribution or substantially equal
  installments and (b) is not within twelve (12) months of the date that
  such deferred amount, deferred Common Stock or the first installment thereof
  would be distributed under this Plan, shall be permitted to make no more than
  two amendments to the initial election to defer distributions such that his
  or her distribution date is either in the same calendar year as the date of
  the distribution which would have been made in the absence of such election
  amendment(s) or is at least one year after the date of the distribution which
  would have been made in the absence of such election amendment(s). A
  participant satisfying the conditions set forth in the preceding sentence may
  also amend such election so that his or her form of distribution is changed
  to substantially equal annual installments for a period not to exceed ten
  (10) years or is changed to a single distribution.





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5.

	
Notwithstanding any other provision of this Plan to
  the contrary, the Committee, by majority approval, may, in its sole
  discretion, direct that distributions be made before such distributions are
  otherwise due if, for any reason (including, but not limited to, a change in
  the tax or revenue laws of the United States of America, a published ruling
  or similar announcement issued by the Internal Revenue Service, a regulation
  issued by the Secretary of the Treasury or his or her delegate, or a decision
  by a court of competent jurisdiction involving a participant or beneficiary),
  it believes that a participant or beneficiary has recognized or will recognize
  income for federal income tax purposes with respect to distributions that are
  or will be payable to such participants under the Plan before they are paid
  to him. In making this determination, the Committee shall take into account
  the hardship that would be imposed on the participant or beneficiary by the
  payment of federal income taxes under such circumstances.







	
 

	
 


	
E.

	
CHANGE OF CONTROL





          Stock
Options granted under the Plan will become immediately exercisable,
restrictions on the Restricted Stock will lapse and Common Stock and dividend
equivalents to be issued in respect of Stock Units will be immediately
distributed upon the occurrence of a “Change of Control” as defined in Part IV
hereinbelow.



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PART IV


ADMINISTRATION


          The
Plan shall be administered by the Committee. The Committee shall have full
power to interpret the Plan, formulate additional details and regulations for
carrying out the Plan and amend or modify the Plan as from time to time it
deems proper and in the best interests of the Company, provided that after a
“Change in Control” no amendment, modification of or action to terminate the
Plan may be made which would affect compensation earned or accrued prior to
such amendment, modification or termination without the written consent of a
majority of participants determined as of the day before a “Change in Control.”
Any decision or interpretation adopted by the Committee shall be final and
conclusive. A “Change of Control” means:


	
 

	
 

	
 


	
 

	
1.

	
The acquisition by any individual, entity or group
  (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
  Exchange Act of 1934, as amended (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 Company Voting Securities”); provided,
  however, that for purposes of this subsection (1), 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 (3) below; and provided, further,
  that if any Person’s beneficial ownership of the Outstanding Company 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 Company Voting Securities; or


	
 

	
 

	
 


	
 

	
2.

	
Individuals who, as of the date hereof, constitute
  the Board (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 





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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


	
 

	
 

	
 


	
 

	
3.

	
The approval by the shareholders of the Company of a
  reorganization, merger, consolidation, 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 shareholders, 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 Company 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 Company 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


	
 

	
 

	
 


	
 

	
4.

	
Approval by the shareholders of the Company of a complete
  liquidation or dissolution of the Company.





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PART V


ADDITIONAL
PROVISIONS


	
 

	
 


	
A.

	
GOVERNING LAW





          The
validity, construction and effect of the Plan and any such actions taken under
or relating to the Plan shall be determined in accordance with the laws of the
State of Delaware and applicable Federal law.


	
 

	
 


	
B.

	
NOTICES





          Unless
otherwise notified, all notices under this Plan shall be sent in writing to the
Company, attention Corporate Compensation, P.O. Box 1113, Minneapolis, Minnesota
55440. All correspondence to the participants shall be sent to the address
which is their recorded address as listed on the election forms.









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