Document:

EX-10.3

Exhibit 10.3

GENERAL MILLS, INC.

1998 SENIOR MANAGEMENT STOCK PLAN

	1.	 	PURPOSE OF THE PLAN
	 
	 	 	The purpose of the General Mills, Inc. 1998 Senior Management Stock Plan (the “Plan”) is
to attract and retain able employees by rewarding employees of General Mills, Inc., its
subsidiaries and affiliates (defined as entities in which General Mills, Inc. has a
significant equity or other interest) (collectively, the “Company”) who are responsible
for the growth and sound development of the business of the Company, and to align the
interests of employees with those of the stockholders of the Company.
	 
	2.	 	EFFECTIVE DATE AND DURATION OF PLAN
	 
	 	 	This Plan shall become effective as of September 28, 1998, subject to the approval of
the stockholders of the Company at the Annual Meeting on September 28, 1998. No Awards
were made under the Plan after September 22, 2003.
	 
	3.	 	ELIGIBLE PERSONS
	 
	 	 	Only persons who are employees of the Company shall be eligible to receive grants of
Stock Options (defined below) under the Plan. The Compensation Committee of the
Company’s Board of Directors (the “Committee”) shall administer the Plan, in accordance
with Section 12, and shall exercise the power to determine and designate, from time to
time, from among the employees, those who will be granted Stock Options under the Plan
and become “Participants” in the Plan.
	 
	4.	 	AWARD TYPE
	 
	 	 	Under this Plan, the Committee may award Participants options (“Stock Options”) to
purchase common stock of the Company ($.10 par value) (“Common Stock”). The grant of a
Stock Option entitles the Participant to purchase a fixed number of shares of Common
Stock at an “Exercise Price” established by the Committee. The Exercise Price for each
share of Common Stock issuable under a Stock Option shall not be less than 100% of the
Fair Market Value of the Common Stock on the date of grant. “Fair Market Value” shall
equal the closing price of the Common Stock on the New York Stock Exchange on the date
of grant.
	 
	5.	 	STOCK OPTION TERM AND TYPE
	 
	 	 	Stock Options granted under the Plan may be either Non-Qualified Stock Options governed
by Section 83 of the Internal Revenue Code of 1986, as amended (the “Code”) or Incentive
Stock Options described in Section 422(b)

 

 

	 	 	of the Code. The term of any Stock Option granted under the Plan shall be determined by
the Committee, provided that the term of a Non-Qualified Stock Option shall not exceed
10 years and one month and the term of an Incentive Stock Option shall not exceed 10
years. The maximum number of shares that may be issued by Incentive Stock Options
granted under the Plan is 15,000,000.

	6.	 	COMMON STOCK SUBJECT TO THE PLAN

	 	a)	 	Maximum Shares Available for Delivery. Subject to Section
6(c), the maximum number of shares of Common Stock available for issuance to
Participants under the Plan shall be equal to the sum of:

	 	(i)	 	12,600,000;
	 
	 	(ii)	 	2,400,000, being the number of shares of Common Stock still
available for grants under the Company’s 1993 Stock Option and Long-Term
Incentive Plan as of the effective date of this Plan; and
	 
	 	(iii)	 	any shares of Common Stock subject to Stock Options granted
under any prior stockholder — approved plan of the Company adopted prior to
the effective date of this Plan which are forfeited, expire or are cancelled
without the delivery of Common Stock.

	 	 	 	In addition, any Common Stock covered by a Stock Option granted under the Plan,
which is forfeited, cancelled or expires in whole or in part shall be deemed not to
be delivered for purposes of determining the maximum number of shares of Common
Stock available for grants under the Plan.
	 
	 	 	 	Further, if any Stock Option is exercised by tendering Common Stock, either actually
or by attestation, to the Company as full or partial payment in connection with the
exercise of the Stock Option under the Plan, only the number of shares of Common
Stock issued net of the Common Stock tendered shall be deemed delivered for purposes
of determining the maximum number of shares available for grants under the Plan.

	 	b)	 	Other Share Limits. The number of shares of Common Stock
subject to Stock Options granted under the Plan to any one Participant shall not
exceed 5,000,000.
	 
	 	c)	 	Adjustments for Corporate Transactions. If a corporate
transaction has occurred affecting the Common Stock such that an adjustment to
outstanding awards is required to preserve (or prevent enlargement of) the benefits
or potential benefits intended at the time of grant, then in such manner as the
Committee deems equitable, an appropriate adjustment shall be made to (i) the
number and kind of shares which may be awarded under the Plan; (ii) the number and
kind of shares subject to outstanding awards; (iii) the number of shares credited
to an account; 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.

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

	 	(i)	 	Notwithstanding any other provision of the Plan, the Company
shall have no liability to deliver any shares of Common Stock under the Plan or
make any other distribution of benefits under the Plan unless such delivery or
distribution would comply with all applicable laws (including, without
limitation, the requirements of the Securities Act of 1933), and the applicable
requirements of any securities exchange or similar entity.
	 
	 	(ii)	 	To the extent that the Plan provides for issuance of stock
certificates to reflect the issuance of shares of Common Stock, the issuance
may be effected on a non-certificated basis, to the extent not prohibited by
applicable law or the applicable rules of any stock exchange.

	 	e)	 	The Committee, in its discretion, may require as a condition to the
grant of Stock Options, the deposit of Common Stock owned by the Participant
receiving such grant, and the forfeiture of such grants, if such deposit is not
made or maintained during the required holding period. Such shares of deposited
Common Stock may not be otherwise sold, pledged or disposed of during the
applicable holding period or restricted period. The Committee may also determine
whether any shares issued upon exercise of a Stock Option shall be restricted in
any manner.

	7.	 	EXERCISE OF STOCK OPTIONS

	 	a)	 	Exercise. Except as provided in Sections 10 and 11 (Change of
Control and Termination of Employment), each Stock Option may be exercised only in
accordance with the terms and conditions of the Stock Option grant and during the
periods as may be established by the Committee, and only after three years of the
Participant’s continued employment with the Company following the date of the Stock
Option grant.
	 
	 	 	 	A Participant exercising a Stock Option shall give notice to the Company of such
exercise and of the number of shares elected to be purchased prior to 4:30 P.M.
CST/CDT on the day of exercise, which must be a business day at the executive
offices of the Company.
	 
	 	b)	 	Payment. The Exercise Price shall be paid to the Company at
the time of such exercise, subject to any applicable rule or regulation adopted by
the Committee:

	 	(i)	 	in cash (including check, draft, money order or wire transfer
made payable to the order of the Company);

 

 

	 	(ii)	 	through the tender of shares of Common Stock owned by the
Participant (by either actual delivery or attestation); or
	 
	 	(iii)	 	by a combination of (i) and (ii) above.

	 	 	 	For determining the amount of the payment, Common Stock delivered pursuant to (ii)
or (iii) shall have a value equal to the Fair Market Value of the Common Stock on
the date of exercise.

	 	c)	 	Deferrals. Prior to January 1, 2005, the Committee may permit
or require Participants to defer receipt of any Common Stock issuable upon exercise
of a Stock Option, subject to such rules and procedures as it may establish, which
may include provisions for the payment or crediting of interest, or dividend
equivalents, including converting such credits into deferred Common Stock
equivalents. Stock option gains may not be deferred after December 31, 2004.

	8.	 	TRANSFERABILITY OF STOCK OPTIONS
	 
	 	 	Except as otherwise provided by rules of the Committee, no Stock Options shall be
transferable by a Participant otherwise than (i) by the Participant’s last will and
testament or (ii) by the applicable laws of descent and distribution, and such Stock
Options shall be exercised during the Participant’s lifetime only by the Participant or
his or her guardian or legal representative.
	 
	9.	 	TAXES
	 
	 	 	Whenever the Company issues Common Stock under the Plan, the Company may require the
recipient to remit to the Company an amount sufficient to satisfy any Federal, state or
local tax withholding requirements prior to the delivery of such Common Stock, or, in
the discretion of the Committee, upon the election of the Participant, the Company may
withhold from the shares to be delivered shares sufficient to satisfy all or a portion
of such tax withholding requirements.

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

	 	a)	 	The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the 1934 Act), (a “Person”) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of
voting securities of the Company where such acquisition causes such Person to own
20% or more of the combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of directors (the
“Outstanding Voting Securities”);
provided, however, that for purposes of this subsection (a), the following
acquisitions shall not be deemed to result in a Change of Control: (i) any

 

 

	 	 	 	acquisition directly from the Company, (ii) any acquisition by the Company, (iii)
any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (iv) any
acquisition by any corporation pursuant to a transaction that complies with clauses
(i), (ii) and (iii) of subsection (c) below; and provided, further, that if any
Person’s beneficial ownership of the Outstanding Voting Securities reaches or
exceeds 20% as a result of a transaction described in clause (i) or (ii) above, and
such Person subsequently acquires beneficial ownership of additional voting
securities of the Company, such subsequent acquisition shall be treated as an
acquisition that causes such Person to own 20% or more of the Outstanding Voting
Securities; or

	 	b)	 	Individuals who, as of the date hereof, constitute the Board of
Directors (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company’s shareholders, was approved by a vote of at least of a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by or
on behalf of a Person other than the Board; or
	 
	 	c)	 	The approval by the shareholders of the Company of a reorganization,
merger or consolidation or sale or other disposition of all or substantially all of
the assets of the Company (“Business Combination”) or, if consummation of such
Business Combination is subject, at the time of such approval by stockholders, to
the consent of any government or governmental agency, the obtaining of such consent
(either explicitly or implicitly by consummation); excluding, however, such a
Business Combination pursuant to which (i) all or substantially all of the
individuals and entities who were the beneficial owners of the Outstanding Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 60% of, respectively, the then outstanding shares
of common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case may
be, of the corporation resulting from such Business Combination (including, without
limitation, a corporation that as a result of such transaction owns the Company or
all or substantially all of the Company’s assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Voting
Securities, (ii) no Person (excluding any employee benefit plan (or related trust)
of the Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting securities
of such corporation except to the extent that such ownership existed prior to the
Business Combination and (iii) at least a majority of the members of the
board of directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the

 

 

	 	 	 	execution of the initial
agreement, or of the action of the Board, providing for such Business Combination;
or

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

	 	 	After such one (1) year period the normal Stock Option exercise provisions of the Plan
shall govern. Notwithstanding any other provision of the Plan, but subject to Section
5, in the event a Participant’s employment with the Company is terminated within two (2)
years of any of the events specified in (a), (b), (c) or (d), all outstanding Stock
Options of such Participant at that date of termination shall be exercisable for a
period of six (6) months beginning on the date of termination.
	 
	 	 	With respect to Stock Option grants outstanding as of the date of any such Change of
Control which require the deposit of owned Common Stock as a condition to obtaining
rights, the deposit requirement shall be terminated as of the date of the Change of
Control and any such deposited stock shall be promptly returned to the Participant.

	11.	 	TERMINATION OF EMPLOYMENT

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

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

	 	 	 	then Participant’s Stock Options shall terminate three months after such termination
(but in no event beyond the original full term of the Stock Options) and no Stock
Options shall become exercisable after such termination.

	 	b)	 	Other Termination. If the Participant’s employment by the
Company terminates for any reason other than specified in Sections 10, 11 (a), (c),
(d) or (e), the following rules shall apply:

	 	(i)	 	In the event that, at the time of such termination, the sum of
the Participant’s age and service with the Company equals or exceeds 70, the
Participant’s outstanding Stock Options shall continue to become exercisable in
accordance with the schedules established at the time of grant. Stock Options
shall remain exercisable for the remaining full term of such Stock Options.
	 
	 	(ii)	 	In the event that, at the time of such termination, the sum of
Participant’s age and service with the Company is less than 70, Participant’s
outstanding unexercisable Stock Options shall become
exercisable as of the date of termination, in a pro-rata amount based

 

 

	 	 	 	on the
full months of employment completed during the full vesting period from the
date of grant to the date of termination with such newly-vested Stock Options
and Stock Options exercisable on the date of termination remaining exercisable
for the lesser of one year from the date of termination and the original full
term of the Stock Option. All other Stock Options shall be forfeited as of
the date of termination. Provided, however, that if the Participant is an
executive officer of the Company, the Participant’s outstanding Stock Options
which, as of the date of termination are not yet exercisable, shall become
exercisable effective as of the date of such termination and, with all
outstanding Stock Options already exercisable on the date of termination,
shall remain exercisable for the lesser of one year following the date of
termination and the original full term of the Stock Option.

	 	c)	 	Death. If a Participant dies while employed by the Company,
any Stock Option previously granted under this Plan may be exercised by the person
designated in such Participant’s last will and testament or, in the absence of such
designation, by the Participant’s estate, to the full extent that such Stock Option
could have been exercised by such Participant immediately prior to death. Any
outstanding Stock Options granted on or after June 1, 2002, which, as of the date
of death, are not yet exercisable, shall fully vest and become exercisable upon a
Participant’s death. Any outstanding Stock Option granted prior to June 1, 2002
shall vest and become exercisable in a pro-rata amount, based on the full months of
employment completed during the full vesting period of the Stock Option from the
date of grant to the date of death.
	 
	 	 	 	With respect to Stock Options which require the deposit of owned Common Stock as a
condition to obtaining exercise rights, in the event a Participant dies while
employed by the Company, such Stock Options may be exercised as provided in the
first paragraph of this Section 11(c) and any owned Common Stock deposited by the
Participant pursuant to such grant shall be promptly returned to the person
designated in such Participant’s last will and testament or, in the absence of such
designation, to the Participant’s estate, and all requirements regarding deposit by
the Participant shall be terminated.
	 
	 	d)	 	Retirement. The Committee shall determine, at the time of
grant, the treatment of the Stock Option upon the retirement of the Participant.
Unless other terms are specified in the original Stock Option grant, if the
termination of employment is due to a Participant’s retirement on or after age 55,
the Participant may exercise a Stock Option, subject to the original terms and
conditions of the Stock Option.
	 
	 	e)	 	Spin-offs. If the termination of employment is due to the
cessation, transfer, or spin-off of a complete line of business of the Company, the
Committee, in its sole discretion, shall determine the treatment of all outstanding
Stock Options under the Plan.

 

 

	12.	 	ADMINISTRATION OF THE PLAN

	 	a)	 	Administration. The authority to control and manage the
operations and administration of the Plan shall be vested in Committee in
accordance with this Section 12.
	 
	 	b)	 	Selection of Committee. The Committee shall be selected by the
Board, and shall consist of two or more members of the Board.
	 
	 	c)	 	Powers of Committee. The authority to manage and control the
operations and administration of the Plan shall be vested in the Committee, subject
to the following:

	 	(i)	 	Subject to the provisions of the Plan, the Committee will have
the authority and discretion to select from among the eligible Company
employees those persons who shall receive Stock Options, to determine the time
or times of receipt, to determine the types of grants (including status as
Non-Qualified or Incentive Stock Options) and the number of shares covered by
the grants, to establish the terms, conditions, performance criteria,
restrictions, and other provisions of such grants, and (subject to the
restrictions imposed by Section 13) to cancel or suspend grants. In making
such determinations, the Committee may take into account the nature of services
rendered by the individual, the individual’s present and potential contribution
to the Company’s success and such other factors as the Committee deems
relevant.
	 
	 	(ii)	 	The Committee will have the authority and discretion to
establish terms and conditions of awards as the Committee determines to be
necessary or appropriate to conform to applicable requirements or practices of
jurisdictions outside of the United States.
	 
	 	(iii)	 	The Committee will have the authority and discretion to
interpret the Plan, to establish, amend, and rescind any rules and regulations
relating to the Plan, to determine the terms and provisions of any agreements
made pursuant to the Plan, and to make all other determinations that may be
necessary or advisable for the administration of the Plan.
	 
	 	(iv)	 	Any interpretation of the Plan by the Committee and any
decision made by it under the Plan is final and binding.

	 	d)	 	Delegation by Committee. Except to the extent prohibited by
applicable law or the applicable rules of a stock exchange, the Committee may
allocate all or any portion of its responsibilities and powers to any one or more
of its members and may delegate all or any part of its responsibilities and powers
to any person or persons selected by it. Any such allocation or delegation may be
revoked by the Committee at any time.

	13.	 	AMENDMENTS OF THE PLAN
	 
	 	 	The Committee may from time to time prescribe, amend and rescind rules and regulations
relating to the Plan. Subject to the approval of the Board of
Directors, where required, the Committee may at any time terminate, amend,

 

 

	 	 	or suspend
the operation of the Plan, provided that no action shall be taken by the Board of
Directors or the Committee without the approval of the stockholders of the Company which
would:

	 	(i)	 	materially increase the number of shares which may be issued
under the Plan;
	 
	 	(ii)	 	permit granting of Stock Options at less than Fair Market
Value;
	 
	 	(iii)	 	except as provided in Section 6, permit the repricing of
outstanding Stock Options; and
	 
	 	(iv)	 	amend the maximum shares set forth in Section 6(b) which may be
annually granted as Stock Options to any single Participant.

	 	 	No termination, modification, suspension, or amendment of the Plan shall alter or impair
the rights of any Participant pursuant to an outstanding Stock Option without the
consent of the Participant. There is no obligation for uniformity of treatment of
Participants under the Plan.
	 
	14.	 	FOREIGN JURISDICTIONS
	 
	 	 	The Committee may adopt, amend, and terminate such arrangements, not inconsistent with
the intent of the Plan, as it may deem necessary or desirable to make available tax or
other benefits of the laws of any foreign jurisdiction, to employees of the Company who
are subject to such laws and who receive Stock Options under the Plan.
	 
	15.	 	NOTICE
	 
	 	 	All notices to the Company regarding the Plan shall be in writing, effective as of
actual receipt by the Company, and shall be sent to:

General Mills, Inc.

Number One General Mills Boulevard

Minneapolis, Minnesota 55426

Attention: Corporate CompensationEX-10.4

Exhibit 10.4

GENERAL MILLS, INC.

2001 COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS

This amends the General Mills, Inc. 2001 Compensation Plan for Non-Employee Directors for Internal
Revenue Code §409A. This amendment is part of the Plan as amended from time to time, and is
effective as of January 1, 2005.

409A Appendix

Notwithstanding any other provision of the Plan to the contrary, the following terms and provisions
apply to the Plan, its operations and Participants, effective as of January 1, 2005 with respect to
amounts subject to Code §409A. Capitalized terms have the meaning given to them either in the main
body of the Plan document or as defined in this Appendix. Provisions of the Plan not otherwise
dealt with in this Appendix continue to apply and be in effect, to the extent not inconsistent with
Code §409A.

Paragraph 1. Purpose. The purpose and intent of this 409A Appendix is to amend the terms
of the Plan to comply with §409A of the Internal Revenue Code and the rules and regulations issued
pursuant thereto with respect to amounts subject to §409A. To the extent that such requirements
are applicable, this Plan is intended to comply with the requirements of §409A and shall be
interpreted and administered in accordance with that intent. If any provision of the Plan or this
Appendix would otherwise conflict with or frustrate this intent, that provision will be interpreted
and deemed amended so as to avoid the conflict. Further, for purposes of the limitations on
nonqualified deferred compensation under §409A, each payment under this Plan shall be treated as a
separate payment of compensation for purposes of applying the §409A deferral election rules and the
exclusion from §409A for certain “short-term deferral” amounts. Certain awards made under this
Plan which were earned and vested (within the meaning of §409A) before January 1, 2005 are intended
to be grandfathered from §409A and remain governed by federal tax law applicable to deferred
compensation as it existed in effect prior to §409A. Accordingly, changes to the Plan after
October 3, 2004 shall not modify the rights of Participants with respect to deferred amounts that
were earned and vested on or before December 31, 2004. It is further intended that no “material
modification” be made to the Plan, as that term is used in Treasury Regulations governing §409A,
whether by this amendment or otherwise.

Paragraph 2. Retainers. Participants may elect the method in which retainers are paid
(lump sum vs. installments), whether such retainers are paid in the form of cash or shares of
Common Stock, and the timing of such payment (i.e., immediate upon vesting or deferred) by filing
an irrevocable Election Form with the Company before the calendar year in which a Plan Year begins.
Such election shall be made in conformance with Paragraph 5, below and will apply to amounts
earned during a Plan Year. Retainers become vested, and are paid at the end of each of the
Company’s

 

 

fiscal quarters. In the absence of an affirmative election to the contrary, retainers (or the
portion not subject to such election) shall be paid 10 business days following the last day of each
fiscal quarter. Notwithstanding the foregoing, in the first year in which a non-employee director
becomes eligible to participate in the Plan, an election may be made with respect to compensation
for services to be performed subsequent to the election, to the extent permitted under §409A. Such
an election must be made on an Election Form within 30 days after the date the non-employee
director first becomes eligible to participate in the Plan.

For each Participant who affirmatively elects to defer receipt of his or her retainers, the Company
shall establish a separate account (a “Deferred Retainer Account”) and credit such deferred
compensation into that Account as of the date the amounts would otherwise be paid. A separate
Deferred Retainer Account shall be established for each Plan Year a Participant makes such a
deferral election.

Each Participant may affirmatively elect to receive all or a specified percentage of his or her
retainers for a Plan Year in shares of Common Stock, which, if elected, will be issued 10 business
days following the last day for each quarterly period during the Plan Year, or the distribution
date chosen on the Election Form, as applicable. 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 quarter during the Plan Year, the value of each share shall be equal to the Fair Market Value
on the third Business Day preceding the last day of each quarterly period during the Plan Year.
For the purposes of this Plan, “Business Day” shall mean a day on which the New York Stock Exchange
is open for trading.

Paragraph 3. No Further Option Gain Deferrals. Stock option gains may not be deferred
after December 31, 2004. Accounts credited with such gains prior to January 1, 2005 are
“grandfathered” and subject to the same rules and terms in effect under the Plan at that time.

Paragraph 4. Stock Units. Each Participant receiving an award of Stock Units may elect
the time and form (whether or not to defer receipt, and lump sum vs. installments) of distribution
of Common Stock attributable to such Stock Units, pursuant to the terms of Paragraph 5. A separate
Stock Unit Account shall be established for each Plan Year a Participant makes such a deferral
election. If no affirmative election is made, all Stock Units shall be paid in shares of Common
Stock 10 days following vesting.

The Participant may also elect to have dividend equivalents payable on Stock Units paid currently
in cash or reinvested in Stock Units. If the amounts are reinvested, on each dividend payment date
for the Common Stock, the Company will credit each Stock Unit Account with an amount equal to the
dividends that would have been paid had the Stock Units been actual shares of Common Stock, which
shall be used to “purchase” additional Stock Units at a price equal to the Fair Market Value on the
dividend date. Such additional Stock Units shall be distributed at the same time and in
the same form

-2-

 

 as the rest of the Stock Unit Account balance. If the Participant fails to make an
election, the dividend equivalent amounts shall be paid in cash currently.

In order to make an election under this Paragraph 4 with respect to Stock Units awarded for a Plan
Year, a Participant shall file an irrevocable Election Form with the Company before the calendar
year in which the Plan Year begins. Notwithstanding the foregoing, in the first year in which a
non-employee director becomes eligible to participate in the Plan, an election may be made with
respect to compensation for services to be performed subsequent to the election, to the extent
permitted under §409A. Such an election must be made on an Election Form within 30 days after the
date the non-employee director first becomes eligible to participate in the Plan.

Paragraph 5. Distributions. Section 9 of the main Plan document is nullified and
inoperative, as of January 1, 2005 with respect to amounts subject to §409A. The following
distribution provisions shall apply to Deferred Retainer Accounts and Stock Unit Accounts:

     (a) Timing. Distributions from Deferred Retainer Accounts shall normally commence at
Separation from Service, however, a Participant may affirmatively elect a specified date for
commencement, provided said date is not later than the Participant’s 70th birthday. The
same rule applies to Stock Units which have been deferred beyond their vesting period. An election
as to the timing of payment commencement shall be made in accordance with Paragraphs 2 and 4.

     Notwithstanding the above or any other provision of this Plan, distributions may not be made
to a Key Employee upon a Separation from Service before the date which is six months after the date
of the Key Employee’s Separation from Service (or, if earlier, the date of death of the Key
Employee). Any payments that would otherwise be made during this period of delay shall be
accumulated and paid on the first day of the seventh month following the Participant’s Separation
from Service (or, if earlier, the first day of the month after the Participant’s death).

     (b) Form of Distribution. Distributions shall normally be made in a lump sum.
However, a Participant may affirmatively elect to receive substantially equal annual installments
over a period of up to 10 years. Such elections shall be made in accordance with Paragraphs 2 and
4.

     (c) Manner of Distribution. Amounts credited to Deferred Retainer Accounts shall be
paid in cash or in Common Stock, as elected by a Participant on an Election Form. Amounts credited
to Stock Unit Accounts shall be paid in Common Stock based on the number of Stock Units credited to
the Stock Unit Account and paid in cash equal to any dividend equivalent amounts which had not been
used to “purchase” additional Stock Units.

     (d) Distribution Upon Death. Notwithstanding any elections by a Participant or
provisions of the Plan to the contrary, if a Participant dies before full distribution of a

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Deferred Retainer Account or Stock Unit Account, such accounts shall be distributed to the
Participant’s estate in a lump sum 60 days following the date of death.

     (e) Permitted Payment Delay To Avoid Violations of Law. Notwithstanding any provision
of this Plan to the contrary, any distribution to a Participant under the Plan shall be delayed
upon the Committee’s reasonable anticipation that the making of the payment would violate Federal
securities laws or other applicable law; provided, that any payment delayed pursuant to this
Paragraph 5(e) shall ultimately be paid in accordance with §409A.

     (f) Payment Acceleration. Generally, payments may not be accelerated. However, if
amounts deferred under the Plan must be included in a Participant’s income under §409A prior to the
scheduled distribution of such amounts, distribution of such amount shall be made immediately to
the Participant.

Paragraph 6. Change of Control. Notwithstanding any elections by a Participant or
provisions of the Plan to the contrary (e.g., Section 10 of the main Plan document), upon the
occurrence of a Change of Control, all Options and Stock Units shall fully and immediately vest,
and shall be exercisable or paid pursuant to the terms of the Plan that are otherwise applicable.
If the Change of Control is also a “change in control” as defined under Code §409A(a)(2)(A)(v) and
official guidance thereunder, all Stock Unit Accounts shall be distributed in a single payment 30
days following such Change of Control.

Paragraph 7. Plan Termination. Upon termination of the Plan, distribution of Deferred
Retainer Accounts and Stock Unit Accounts shall be made as described in Paragraph 5, unless the
Committee determines in its sole discretion that all such amounts shall be distributed upon plan
termination in accordance with the requirements under Code §409A. Upon termination of the Plan, no
further deferrals of retainers, Stock Units or dividend equivalent amounts shall be permitted;
however, earnings, gains and losses shall continue to be credited to the Deferred Retainer Account
balances until the Deferred Retainer Account balances are fully distributed.

Paragraph 8. Definitions. As used in this Appendix the following terms have the meanings
set forth below:

     “Election Form” means a written form provided by the Committee pursuant to which a
Participant may elect the form and timing of distributions with respect to his or her retainer,
Stock Units and dividend equivalents under the Plan.

     “Fair Market Value” means the average of the intraday high and low price of the
national market composite price of the Common Stock on the applicable date. Notwithstanding this
definition, effective January 1, 2007, “Fair Market Value” means the closing price on the
New York Stock Exchange of the Common Stock on the applicable date.

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     “Key Employee” means a Participant treated as a “specified employee” as of his
Separation from Service under Code §409A(a)(2)(B)(i), i.e., a key employee (as defined in Code
§416(i) without regard to paragraph (5) thereof) of the Company or its affiliates if the Company’s
or its affiliate’s stock is publicly traded on an established securities market or otherwise. Key
Employees shall be determined in accordance with Code §409A using a December 31 identification
date. A listing of Key Employees as of an identification date shall be effective for the 12-month
period beginning on the April 1 following the identification date.

     “Plan Years” means the one-year Board terms, beginning the day of each annual
stockholders’ meeting and ending the day before the succeeding annual stockholders’ meeting.

     “Separation from Service” or “Separate from Service” means a “separation from
service” within the meaning of Code §409A.

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