Exhibit 10.21 to General Mills, Inc. Form 10-K for fiscal year ended May 27, 2007









EXHIBIT 10.21


 


GENERAL MILLS, INC.


2001 COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS


 









GENERAL MILLS, INC.

2001 COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS


	
 

	
 


	
1.

	
PURPOSE





          The
purpose of the General Mills, Inc. 2001 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.


	
 

	
 


	
2.

	
EFFECTIVE
  DATE, DURATION OF PLAN





          This
Plan shall become effective as of September 24, 2001, subject to the approval
of the Plan by the stockholders. The Plan will terminate on September 30,
2006 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.


	
 

	
 


	
3.

	
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
unless prohibited from participating by the terms of their employment.


	
 

	
 


	
4.

	
COMMON STOCK
  SUBJECT TO THE PLAN





          a)
General. The common stock to be issued under this Plan is Company common
stock (“Common Stock”) ($.10 par value) to be made available from the
authorized but unissued Common Stock, shares of Common Stock held in the
treasury, or Common Stock purchased on the open market or otherwise. Subject to
the provisions of the next succeeding paragraphs, the maximum aggregate number
of shares authorized to be issued under the Plan shall be 700,000.


If any Option
(defined below) 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 an 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 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.


	
 

	
 


	
5.

	
ANNUAL
  RETAINER





          a)
General. Each non-employee director shall be entitled to receive an
annual retainer as shall be determined from time to time by the Board. Each
non-employee director of the Company shall elect by written notice to the
Company on or before each annual stockholders’ meeting how he or she shall
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. 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”). The Plan
Year shall include four plan quarters (hereinafter “Plan Quarters”). Plan
quarters shall correspond to the Company’s fiscal quarters. 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 first attendance at a
Board meeting, 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. Periodically, the Company shall supply to each
participant an account statement of participation under the Plan.


          b)
Cash Alternative. Each non-employee director who elects to receive cash
compensation under 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. 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 


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participant’s designated beneficiary, or, if none, the estate as soon as practicable following the date of
death.


          c) Deferred Cash Alternative.


	
 

	
 

	
 

	
 


	
 

	
 

	
(i)

	
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.


	
 

	
 

	
 

	
 


	
 

	
 

	
(ii)

	
For each director who has made this deferred cash election, the Company shall establish a deferred compensation
account for the compensation due. Interest shall be credited to each such account based on the rate earned by the fund or funds
selected by the participant from among funds or portfolios established under the General Mills, Inc. Savings Plan or any other
qualified benefit plan maintained by the Company which the Minor Amendment Committee, or its delegate, in its discretion, may from
time to time establish.


	
 

	
 

	
 

	
 


	
 

	
 

	
(iii)

	
Distribution of the participant’s deferred compensation account shall be at the time, and in the form of
payment, elected by the participant at the time of deferral. The distribution date may be any date that is at least one year
subsequent to the date of deferral of such compensation, but the distribution 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.


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
A participant may elect to have the deferred compensation account 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.


	
 

	
 

	
 

	
 


	
 

	
 

	
(iv)

	
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.


	
 

	
 

	
 

	
 


	
 

	
 

	
(v)

	
The Company has established a Supplemental Benefits Trust with Wells Fargo Bank Minnesota, N.A. as Trustee to hold
assets of the Company under certain circumstances as a reserve for the discharge of the Company’s obligations as to deferred
cash compensation under the Plan and certain other of deferred compensation plans of the Company. In the event of a Change in
Control as defined in Section 11 below, the Company shall be obligated to immediately contribute such amounts to the Trust as
may be necessary to fully fund 





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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 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. 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. The Company shall ensure
that an adequate number of shares of Common Stock are available for
distribution to those participants making this election. Only whole numbers of
shares will be issued, with any fractional share amounts paid in cash. For
purposes of computing the number of shares earned each 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.
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.


	
 

	
 


	
6.

	
NON-QUALIFIED
  STOCK OPTIONS





          a)
Grant of Options. Each non-employee director on the effective date of
the Plan (or, if first elected after the effective date of the Plan, on the
date the non-employee director first attends a Board meeting) shall be awarded
an option (an “Option”) to purchase 10,000 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 10,000 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.


          b)
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.


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


          d)
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 during his or her term of service on the Board, 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 for Options granted on or after June 1, 2002, any
unvested Options shall fully vest and become exercisable upon death. For
Options granted prior to June 1, 2002, any unvested Options shall vest and
become exercisable upon death 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.


          e)
Method of Exercise and Tax Obligations. A participant exercising an
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.
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.


	
 

	
 

	
 

	
 


	
 

	
 

	
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. 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.





          f)
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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7.

	
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.


          a)
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.


          b)
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 award of Stock Units, as provided in Section 8(a), 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 Section 8(a) but the distribution must be made or commenced
by the later of (i) the date the participant attains age 70 and (ii) five years
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 Section 8(a) shall have the same distribution date and form of
distribution. Notwithstanding the above, the following provisions shall apply:


	
 

	
 

	
 

	
 


	
 

	
 

	
(i)

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





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(ii)

	
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 Section 7(c)(i) below) be accelerated and
  distributed as of the first business day of the calendar year next following
  the date of termination.


	
 

	
 

	
 

	
 


	
 

	
 

	
(iii)

	
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.





          c)
Deferred Stock Unit Accounts and Dividend Equivalents.


	
 

	
 

	
 

	
 


	
 

	
 

	
(i)

	
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 Section 7(a) 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 receives Stock Units pursuant to Section
  8(a) 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. The Committee may, in its sole discretion, direct either that
  all dividend equivalent amounts be paid currently or all such amounts be
  reinvested 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. 





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Periodically,
  each participant will receive a statement of the number of Stock Units in his
  or her Deferred Stock Unit Account(s).


	
 

	
 

	
 

	
 


	
 

	
 

	
(ii)

	
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 Section 8(a)
  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 Section 7(c)(i) above. Stock
  Units may not be sold, transferred, assigned, pledged or otherwise encumbered
  or disposed.


	
 

	
 

	
 

	
 


	
8.

	
STOCK UNITS





          a)
Awards. 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 first attends a Board meeting) and at the close of
business on each successive annual stockholders’ meeting date, each
non-employee director shall be awarded the right to receive one thousand
(1,000) shares of Common Stock on a deferred basis (“Stock Units”), subject to
vesting as provided in Section 8(b). The maximum aggregate number of shares
authorized to be issued under the Plan upon vesting of Stock Unit awards shall
be 80,000. Only non-employee directors re-elected to the Board shall be
entitled to a grant under this Section 8(a) of Stock Units awarded at the close
of business on an annual meeting date after the date of the original grant to
the non-employee directors. 


          b)
Vesting of and Restrictions on Stock Units. A participant’s interest in
the Stock Units shall vest on the date of the annual stockholders’ meeting next
following the date of the award of the 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 Stock Units
vests, such Stock Units shall be forfeited and all further rights of the
non-employee director to or with respect to such Stock Units shall terminate. A
participant who dies prior to the vesting of Stock Units granted on or after
June 1, 2002 shall fully vest in such Stock Units, effective as of the date of
death. A participant who dies prior to the vesting of Stock Units granted prior
to June 1, 2002 shall vest in a proportionate number of shares of Stock Units,
based on the full months of service completed during the vesting period of the
Stock Units from the date of grant to the date of death. 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.


          c)
Distribution of Stock Units. Each participant receiving an award of
Stock Units under Section 8(a) above must select a date of distribution and
form of distribution as provided under Section 7(b) above. The participant may
also elect to have dividend equivalents payable on Stock Units paid currently
or reinvested in Stock Units as provided under Section 7(c)(i). 


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          d)
Other Terms and Conditions. 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.


	
 

	
 


	
9.

	
GENERAL
  PROVISIONS FOR DEFERRED CASH, OPTION GAINS AND STOCK UNITS





          The
following provisions shall apply to the deferral of cash compensation described
in Section 5(c) hereof, the deferral of receipt of Common Stock issued upon
exercise of Options described in Section 7 hereof and the treatment of Stock
Units granted under Section 8 hereof.


          a)
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 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 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.


          b)
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.


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          c)
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.


          d)
As to all previous and future Plan years, and subject to the last sentence of
the first paragraph of Section 7(b) hereof, a participant who 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.


          e)
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.


	
 

	
 


	
10.

	
CHANGE OF
  CONTROL





          Options
granted under the Plan will become immediately exercisable, 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 Section 11.


	
 

	
 


	
11.

	
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 


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the best
interests of the Company, including amending the Plan to increase or decrease
the size of annual Option or Stock Unit grants made to non-employee directors,
provided that after a “Change of 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 of Control.” Any decision or interpretation adopted by the Committee
shall be final and conclusive. A “Change of Control” means:


          a)
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


          b)
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 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


          c)
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 


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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


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


	
 

	
 


	
12.

	
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.


	
 

	
 


	
13.

	
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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