Exhibit 10.18 to General Mills, Inc. Form 10-K dated May 29, 2005









Exhibit 10.18  










GENERAL MILLS, INC. 



1990  SALARY REPLACEMENT  



STOCK OPTION PLAN 























































As Amended Through June
27, 1994 














GENERAL MILLS, INC. 



1990 SALARY REPLACEMENT STOCK OPTION PLAN 



    1.       
PURPOSE OF THE PLAN 



	 	  	  	  	  	        The purpose of the
General Mills, Inc. 1990 Salary Replacement Stock Option Plan (the “Plan”) is to give key employees of General Mills,
Inc. (the “Company”) and its subsidiaries who are primarily responsible for the management of the business of the
Company the opportunity to receive stock option grants in lieu of salary increases, and, as to employees who are not subject to
Section 16 of the 1934 Act (each as hereinafter defined), an opportunity to receive stock option grants in lieu of certain other
compensation and employee benefits thereby encouraging focus on the growth and profitability of the Company and its Common Stock.








    2.       
EFFECTIVE DATE OF PLAN 



	 	  	  	  	  	        This Plan shall
become effective as of September 17, 1990, subject to the approval of the stockholders of the Company at the Annual Meeting on
September 17, 1990. 







    3.       
ADMINISTRATION OF THE PLAN 



	 	  	  	  	  	        The Plan shall be
administered by the Compensation Committee (the “Committee”). The Committee shall be made up of non-management members
of the Board of Directors (the “Board”) appointed in accordance with the Company’s Certificate of Incorporation.
The Committee shall have authority to adopt rules and regulations for carrying out the purpose of the Plan, select the employees
to whom grants will be made (“Optionees”), the number of shares to be optioned and interpret, construe and implement the
provisions of the Plan; provided that if at any time Rule 16b-3 or any successor rule (“Rule 16b-3”) under the
Securities Exchange Act of 1934, as amended (the “1934 Act”), so permits without adversely affecting the ability of the
Plan to comply with the conditions for exemption from Section 16 of the 1934 Act (or any successor provisions) provided by Rule
16b-3, the Committee may delegate the administration of the Plan in whole or in part, on such terms and conditions, and to such
person or persons as it may determine in its discretion, as it relates to persons not subject to Section 16 of the 1934 Act, or
any successor provision. Decisions of the Committee (or its delegate as permitted herein) shall be final, conclusive and binding
upon all parties, including the Company, stockholders and Optionees. 





































    4.       
COMMON STOCK SUBJECT TO THE PLAN 



	 	  	  	  	  	        The shares of
“Common Stock” of the Company ($.10 par value) to be issued upon the exercise of a non-qualified option to purchase
Common Stock granted hereunder (an “Option”) 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. 







	 	  	  	  	  	        Approval of the
Plan by the stockholders of the Company shall constitute authorization to use such shares for the Plan, subject to the discretion
of the Board or as such discretion may be delegated to the Committee. 







	  	  	  	  	  	        Subject to the
provisions of the next succeeding paragraph, the maximum aggregate number of shares originally authorized under the Plan for which
Options could be granted under the Plan shall was 3,000,000 shares. As of June 1, 1992, and subject to the provisions of the next
succeeding paragraph, there remain 4,493,000 shares authorized to be issued under the Plan (as adjusted for stock splits). If an
Option granted under the Plan is terminated without having been exercised in full, the unpurchased or forfeited shares or rights
to receive shares shall become available for grant to other employees. 







	 	  	  	  	  	        The number of
shares of Common Stock subject to the Plan, the outstanding Salary Stock Options, and the exercise price per share of outstanding
Options may be appropriately adjusted by the Committee in the event that: 







          	(i) 	  	
               the number of outstanding shares of Common Stock of the Company shall be changed
               by reason of split-ups, combinations or reclassifications of shares; 



               




          	(ii) 	  	
               any stock dividends are distributed to the holders of Common Stock of the
          Company; or 



               



          	(iii) 	  	
               the Common Stock of the Company is converted into or exchanged for other shares
               as a result of any merger or consolidation (including a sale of assets) or other
               recapitalization. 



               



         5.       
          ELIGIBLE PERSONS 



	 	  	  	  	  	
Only persons who are officers or key employees of the Company or a subsidiary shall be eligible
to receive grants under the Plan. No grant shall be made to any member of the Committee or
any other non-employee director. 






         6.       
          PURCHASE PRICE OF SALARY STOCK OPTIONS 



	 	  	  	  	  	
The purchase price for each share of Common Stock issuable under an Option shall not be less
than 100 percent of the Fair Market Value of the Shares of Common Stock of the Company
subject to such option on the date of grant. “Fair Market Value” as used in the
Plan shall equal the mean of the high and low  






































	 	  	  	  	  	price of the Common Stock on the New York Stock Exchange on the
applicable date. 






         7.       
          OPTION TERM 



	 	  	  	  	  	
The term of each Option grant as determined by the Committee shall not exceed ten (10) years
and one (1) month from the date of that grant and shall expire as of the last day of the
designated term, unless terminated earlier under the provisions of the Plan. 






         8.       
          OPTION TYPE 



	 	  	  	  	  	
Option grants will be Non-Qualified Stock Options governed by Section 83 of the Internal Revenue
Code of 1986, as amended (the “Code”) or any successor provision. 






         9.       
          NON-TRANSFERABILITY OF OPTIONS 



	 	  	  	  	  	
No Option granted under this Plan shall be transferable by the Optionee otherwise than by the
Optionee’s Last Will and Testament or by the laws of descent and distribution. An
Optionee shall forfeit any Option assigned or transferred, voluntarily or involuntarily,
other than as permitted under this Section. Each Option shall be exercised during the
Optionee’s lifetime only by the Optionee or his or her guardian or legal
representative. 






         10.     
          EXERCISE OF OPTIONS 



	 	  	  	  	  	        
Except as provided in Sections 12, 13 and 14, each Option shall be vested and may be exercised in
accordance with such terms and conditions as may be determined by the Committee for grants
to officers or executives and by the Chief Executive Officer of the Company for grants to
other management participants. 







	 	  	  	  	  	        
Subject to the provision of this Section 10, each Option may be exercised in whole or, from time
to time, in part with respect to the number of then exercisable shares in any sequence
desired by the Optionee without regard to the date of grant of stock options under other
plans of the Company. 







	 	  	  	  	  	        
An Optionee 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. At the
time of purchase, the Optionee shall tender the full purchase price of the shares
purchased. Until such payment has been made and a certificate or certificates for the
shares purchased has been issued in the Optionee’s name, the Optionee shall possess
no stockholder rights with respect to any such shares. Payment of such purchase price
shall be made to the Company, 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 delivery of shares of Common Stock owned by the Optionee; or 



               






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



               





	 	  	  	  	  	        
For determining 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. 







         11.     
          WITHHOLDING TAXES ON OPTION EXERCISE 



	 	  	  	  	  	        
Each Optionee shall deliver to the Company cash in an amount equal to all federal, state and
local withholding taxes required to be collected by the Company in respect of the exercise
of an Option, and until such payment is made, the Company may, in its discretion, retain
all or a portion of the shares to be issued. 







	 	  	  	  	  	        
Notwithstanding the foregoing, to the extent permitted by law and pursuant to such rules as the Committee
may adopt, an Optionee may authorize the Company to satisfy any such withholding
requirement by directing the Company to withhold from any shares to be issued such number
of shares as shall be sufficient to satisfy the withholding obligation. 







         12.     
          EXERCISE OF OPTIONS IN EVENT OF CERTAIN CHANGES OF CONTROL 



	 	  	  	  	  	        
Each outstanding Option shall become immediately and fully exercisable for a period of six (6)
months following the date of the following occurrences, each constituting a “Change
of Control”: 








          	(i) 	  	
               if any person (including a group as defined in Section 13(d)(3) of the 1934
          Act) becomes, directly or indirectly, the beneficial owner of twenty (20)
          percent or more of the shares of the Company entitled to vote for the election
          of directors;  



               



          	(ii) 	  	
               as a result of or in connection with any cash tender offer, exchange offer,
               merger or other business combination, sale of assets or contested election, or
               combination of the foregoing, the persons who were Directors of the Company just
               prior to such event cease to constitute a majority of the Company’s Board
               of Directors; or  



               



          	(iii) 	  	
                the stockholders of the Company approve an agreement providing for a transaction
               in which the Company will cease to be an independent publicly-owned corporation
               or a sale or other disposition of all or substantially all of the assets of the
               Company occurs.  



               




	 	  	  	  	  	        
After such six (6) month period the normal option exercise provisions of the Plan shall govern.
In the event an Optionee is terminated as an employee of the 





































	 	  	  	  	  	Company or a Subsidiary within two (2) years of any of the events
specified in (i), (ii) or (iii), all outstanding Stock Options at that date of termination shall become immediately exercisable
for a period of three (3) months. 








         13.     
          TERMINATION OF EMPLOYMENT OR LEAVE OF ABSENCE OF AN OPTIONEE 




       (a)  
Normal Termination 



	 	  	  	  	  	        
If the Optionee’s employment by the Company or a subsidiary terminates for any reason
other than as specified in subsections (b), (c), (d) or (e), the Options shall terminate
three (3) months after such termination. If the employment by the Company or a subsidiary
of an Optionee, other than an Optionee subject to Section 16 of the 1934 Act, is
terminated for the convenience of the Company, as determined by the Committee, and, at the
time of termination the sum of the Optionee’s age and service with the Company equals
or exceeds 70, the Committee, in its sole discretion, may permit any Option previously
granted to the Optionee under the Plan to be exercised to the full extent that such Option
could have been exercised by such Optionee immediately prior to the Optionee’s
termination and may permit such Option to remain exercisable until the expiration of the
Option in accordance with its original term. 








       (b)  
Death 



	 	  	  	  	  	        
If the termination of employment is due to the Optionee’s death, the Options may be
exercised as provided in Section 14.










       (c)  
Retirement 



	 	  	  	  	  	        
If the termination of employment is due to the Optionee’s retirement, the Optionee
thereafter may exercise an Option within the period remaining under the original term of
the Option. 









       (d)  
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, may determine that
all outstanding Options granted more than one (1) year prior to the date of such
termination shall immediately become exercisable for a period of three (3) years after the
date of such termination, subject to the provisions of Section 7. 









       (e)  
Leave of Absence 



	 	  	  	  	  	        
Unless the Committee shall otherwise determine, if an Optionee is placed on an unpaid leave of
absence, such Optionee’s Options shall terminate at the expiration of the unpaid
leave of absence. 









	 	  	  	  	  	        
If an Optionee is placed on an unpaid leave of absence, retires during such leave, and the
Committee had decided not to terminate the Optionee’s right to  





































	 	  	  	  	  	exercise an Option at the date of the inception of said leave of
absence, then such Optionee may exercise an Option in accordance with subsection (c).








         14.       
          DEATH OF OPTIONEE 



	 	  	  	  	  	        
If an Optionee should die while employed by the Company or a subsidiary or after retirement,
any Option previously granted to the Optionee under this Plan may be exercised by the
person designated in such Optionee’s Last Will and Testament or, in the absence of
such designation, by the Optionee’s estate, to the full extent that such Option could
have been exercised by such Optionee immediately prior to the Optionee’s death,
subject to the original term of the Option. 







         15.       
          AMENDMENTS TO THE PLAN 



	 	  	  	  	  	        
The Plan may be terminated, modified, or amended by the Board of Directors of the Company.







	 	  	  	  	  	        
Subject to the approval of the Board of Directors, the Committee may at any time terminate, modify
or suspend the operation of the Plan, provided that no such amendment, alteration or
discontinuation shall be made without the approval of the stockholders of the Company: 











          	(i) 	  	
               if such approval is necessary to comply with any legal, tax or regulatory
          requirement, including any approval requirement which is a prerequisite for
          exemptive relief from Section 16(b) of the 1934 Act; or 



               




          	(ii) 	  	
                to materially increase the number of shares which may be issued under the Plan
               or materially modify the requirements as to eligibility for participating in the
               Plan. 



               



	 	  	  	  	  	        
The Board of Directors shall have authority to cause the Company to take any action related to
the Plan which may be required to comply with the provisions of the Securities Act of
1933, as amended, the 1934 Act, and the rules and regulations prescribed by the Securities
and Exchange Commission. Any such action shall be at the expense of the Company. 







	 	  	  	  	  	        
No termination, modification, suspension or amendment of the Plan shall alter or impair the
rights of any Optionee pursuant to a prior grant, without the consent of the Optionee. 







         16.       
          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 laws of any foreign jurisdiction, to key employees of the Company who are
subject to such laws and who are eligible to receive Option grants under the Plan. 







































         17.       
          DURATION OF THE PLAN 




	 	  	  	  	  	        
Grants may be made under the Plan until September 30, 1995.  












         18.       
          NOTICE 




	 	  	  	  	  	        
All notices and communications to the Company 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 

If by Telex:  170360 Gen Mills 

If by Facsimile:  (612) 540-4925 






         19.       
          SECTION 16 OFFICERS 



	 	  	  	  	  	        
With respect to persons subject to Section 16 of the 1934 Act, transactions under the Plan are
intended to comply with all applicable conditions of Rule 16b-3 or its successors under
the 1934 Act. To the extent any provision of the Plan or action by the Committee fails to
so comply, it shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee. 







	  	
Effective as of September 17, 1990 

As amended effective June 1, 1992 

As amended effective June 27,
1994