Document:

EXHIBIT 10.12

                               GENERAL MILLS, INC.

                           DEFERRED COMPENSATION PLAN

                As Amended and Restated Effective January 1, 2001

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                               GENERAL MILLS, INC.

                           DEFERRED COMPENSATION PLAN

1.       PURPOSE OF PLAN

         General Mills, Inc. (the "Company") hereby establishes a Deferred
         Compensation Plan (the "Plan") for a select group of the key management
         and highly compensated employees of the Company and its affiliates as a
         means of sheltering a portion of income from current taxation while
         accumulating resources for future investments or retirement. Under the
         Plan, Participants may defer cash incentives, common stock issued under
         the Company's stock option plans, and restricted stock units issued
         under the Company's various stock plans granting restricted stock, as
         they may be amended from time to time. In addition, Participants may
         "defer" shares of General Mills, Inc. common stock ("Common Stock")
         attributable to restricted stock issued under the Company's various
         stock plans granting restricted stock, as they may be amended from time
         to time, by cancellation of such shares in exchange for deferred
         restricted stock units under this Plan. As to deferred cash incentives,
         Participants shall earn a "rate of return" on the deferred amounts
         which track the investment return achieved under the General Mills VIP
         401(k) Plan ("VIP") and/or rates equivalent to investment results of
         other funds or portfolios as may be made available from time to time
         pursuant to the provisions of the Plan. As to stock options,
         Participants may defer receipt of the net shares of Common Stock
         resulting from a Participant's stock-for-stock option exercise and
         dividend equivalents on the net shares. As to deferrals related to
         restricted stock and restricted stock units, Participants may defer the
         receipt of shares of Common Stock attributable to such grants and to
         dividend equivalents on such shares. Under current tax law, amounts
         properly deferred and the "rate of return" or earnings credited to such
         amounts are not taxable (except for FICA taxation, as required) as
         income until they are distributed to the Participants. Under current
         tax law, distributions from this Plan will be taxed as ordinary income
         in the year in which they are received.

2.       ELIGIBILITY

         An individual is a Participant in the Plan if such individual (i) is a
         Participant in the various stock plans granting restricted stock, as
         they may be amended from time to time, (ii) has been selected by
         management to participate in "Compensation Plus," or (iii) has an
         individual agreement, approved by the Minor Amendment Committee, which
         provides for participation in this Plan and has elected to defer
         compensation or receipt of Common Stock pursuant to the provisions of
         any of these programs or the agreement. Former employees of the Company
         who have retired from the Company may also participate if they would
         have been eligible to participate at the time they retired from the
         Company.

3.       PLAN ADMINISTRATION

         (i)      Minor Amendment Committee. Except as provided below, this Plan
                  shall be administered by the Minor Amendment Committee (the
                  "Minor Amendment Committee"). The Minor Amendment Committee
                  shall act by affirmative vote of a majority of its members at
                  a meeting or in writing without a meeting. The Minor Amendment
                  Committee shall appoint a secretary who may be but need not be
                  one of its own members. The

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                  secretary shall keep complete records of the administration of
                  the Plan. The Minor Amendment Committee may authorize each and
                  any one of its members to perform routine acts and to sign
                  documents on its behalf. To the extent necessary to maintain
                  any exemption under Rule 16b-3 or any successor rule ("Rule
                  16b-3") under the Securities Exchange Act of 1934 as to
                  certain officers of the Company, certain portions of this Plan
                  shall be administered by the Compensation Committee.

         (ii)     Plan Administration. The Minor Amendment Committee may appoint
                  such persons or establish such subcommittees, employ such
                  attorneys, agents, accountants or investment advisors
                  necessary or desirable to advise or assist it in the
                  performance of its duties hereunder, and the Minor Amendment
                  Committee may rely upon their respective written opinions or
                  certifications.

                  Administration of the Plan shall consist of interpreting and
                  carrying out the provisions of the Plan. The Minor Amendment
                  Committee shall, in its discretion, determine the eligibility
                  of employees to participate in the Plan, their rights while
                  Participants in the Plan and the nature and amount of benefits
                  to be received therefrom. The Minor Amendment Committee shall,
                  in its discretion, decide any disputes which may arise under
                  the Plan. The Minor Amendment Committee may provide rules and
                  regulations for the administration of the Plan consistent with
                  its terms and provisions. Any construction or interpretation
                  of the Plan and any determination of fact in administering the
                  Plan made in good faith by the Minor Amendment Committee shall
                  be final and conclusive for all Plan purposes.

         (iii)    Claims Procedure.

                  (a)    The Minor Amendment Committee shall prescribe a form
                         for the presentation of claims under the terms of the
                         Plan.

                  (b)    Upon presentation to the Minor Amendment Committee of a
                         claim on the prescribed form, the Minor Amendment
                         Committee shall make a determination of the validity
                         thereof. If the determination is adverse to the
                         claimant, the Minor Amendment Committee shall furnish
                         to the claimant within a reasonable period of time
                         after the receipt of the claim a written notice setting
                         forth the following:

                         (1)   The specific reason or reasons for the denial;

                         (2)   Specific reference to pertinent provisions of the
                               Plan on which the denial is based;

                         (3)   A description of any additional material or
                               information necessary for the claimant to perfect
                               the claim and an explanation of why such material
                               or information is necessary; and

                         (4)   An explanation of the Plan's claim review
                               procedure.

                  (c)    In the event of a denial of a claim, the claimant may
                         appeal such denial to the Minor Amendment Committee for
                         a full and fair review of the adverse determination.
                         The claimant's request for review must

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                         be in writing and be made to the Minor Amendment
                         Committee within 60 days after receipt by the
                         claimant of the written notification required under
                         subsection (b) above. The claimant or his or her duly
                         authorized representative may submit issues and
                         comments in writing which shall be given full
                         consideration by the Minor Amendment Committee in its
                         review.

                  (d)    The Minor Amendment Committee may, in its sole
                         discretion, conduct a hearing. A request for a hearing
                         will be given full consideration. At such hearing, the
                         claimant shall be entitled to appear and present
                         evidence and be represented by counsel.

                  (e)    A decision on a request for review shall be made by the
                         Minor Amendment Committee not later than 60 days after
                         receipt of the request; provided, however, in the event
                         of a hearing or other special circumstances, such
                         decision shall be made not later than 120 days after
                         receipt of such request.

                  (f)    The Minor Amendment Committee's decision on review
                         shall state in writing the specific reasons and
                         references to the Plan provisions on which it is based.
                         Such decision shall be immediately provided to the
                         claimant. In the event the claimant disagrees with the
                         findings of the Minor Amendment Committee, the matter
                         shall be referred to arbitration in accordance with
                         Section 14 hereof.

                  (g)    The Minor Amendment Committee may allocate its
                         responsibilities among its several members, except that
                         all matters involving the hearing of and decision on
                         claims and the review of the determination of benefits
                         shall be made by the full Minor Amendment Committee. No
                         member of the Minor Amendment Committee shall
                         participate in any matter relating solely to himself or
                         herself.

4.       DEFERRAL AND PAYMENT OF COMPENSATION

         (i)      Cash Incentive Deferral Election. A Participant can elect to
                  defer cash incentive compensation by completing and submitting
                  to the Company a cash deferral election form by December 31 of
                  each year. Such election shall apply to the Participant's cash
                  incentive compensation, if any, to be paid in the next
                  calendar year. A Participant's cash incentive deferral
                  election may apply to:

                  (a)    100% of the cash incentive compensation,

                  (b)    any amount in excess of a specified dollar amount,

                  (c)    any amount up to a specified dollar amount, or

                  (d)    a specified percentage (in whole numbers) of the cash
                         incentive compensation.

         (ii)     Stock 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
                  stock option issued to the

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                  Participant by completing and submitting to the Company an
                  irrevocable stock option deferral election at least six months
                  in advance of exercising the stock option (which exercise must
                  be done on or prior to the expiration of the stock 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. At the time of the deferral
                  election, the Participant can also choose to use some of the
                  shares subject to the stock option to satisfy any FICA,
                  Medicare or any other taxes due upon the stock option
                  exercise. "Net Shares" means the difference between the number
                  of shares of Common Stock subject to the stock option exercise
                  and the number of shares of Common Stock delivered to satisfy
                  the stock option exercise price less any shares used to
                  satisfy FICA, Medicare or any other taxes due upon the stock
                  option exercise. A Participant may not revoke a stock 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 a
                  stock option. If only a portion of the Net Shares is deferred,
                  the balance will be issued at the time of exercise.

         (iii)    Restricted Stock/Restricted Stock Unit Deferral Election. A
                  Participant can elect to defer receipt of the shares of Common
                  Stock of the Company attributable to nonvested restricted
                  stock or restricted stock units under the Company's restricted
                  stock plan(s) by completing and submitting to the Company an
                  irrevocable restricted stock deferral election within the
                  period specified by the Minor Amendment Committee on the
                  applicable deferral election form and prior to the date such
                  restricted stock or restricted stock units become vested as
                  determined under the Company's various stock plans granting
                  restricted stock, as they may be amended from time to time. A
                  Participant may not revoke a restricted stock/restricted stock
                  unit deferral election after it is received by the Company. A
                  Participant may choose to defer receipt of all or only a
                  portion of the shares of Common Stock attributable to
                  nonvested restricted stock or the restricted stock units that
                  have been granted to the Participant by the Company. Any
                  election to defer receipt of shares of Common Stock
                  attributable to restricted stock shall result in the
                  restricted stock being cancelled and replaced with the mere
                  promise of the Company to pay deferred compensation (in the
                  form of deferred restricted stock units) pursuant to the terms
                  of the Plan.

         (iv)     Distribution of Deferred Cash Incentive and Common Stock. At
                  the time of a Participant's deferral election, 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: (1) in the case of cash
                  incentive compensation, the date the cash incentive would
                  otherwise be payable; (2) in the case of stock option gain
                  deferrals, the exercise date for the related stock option; and
                  (3) in the case of deferrals related to restricted stock or
                  restricted stock units, the date such restricted stock or
                  restricted stock units are otherwise vested under the terms of
                  the Company's various stock plans granting restricted stock,
                  as they may be amended from time to time; provided that, in
                  all cases, the Participant's deferral election must provide
                  that distribution shall be made or commenced no later than the
                  date the Participant attains age 70.

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                  A Participant may elect to have deferred cash amounts paid or
                  Common Stock distributed, as the case may be, in a single
                  payment or in substantially equal annual installments for a
                  period not to exceed ten (10) years, or up to fifteen (15)
                  years for elections made until December 31, 1985, or in
                  another form requested by the Participant, in writing, and
                  approved by the Minor Amendment Committee. Common Stock
                  issuable under a single stock option grant or a single
                  restricted stock or restricted stock unit grant shall have the
                  same distribution date and form of distribution.
                  Notwithstanding the above, the following provisions shall
                  apply:

                  (a)    If the employment of a Participant terminates for any
                         reason other than retirement prior to the date any cash
                         incentive compensation award would otherwise have been
                         made, then any cash deferral election made with respect
                         to such incentive compensation award shall not become
                         effective.

                  (b)    If a stock option, as to which a Participant has made a
                         stock 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.

                  (c)    In the event of the termination of employment of a
                         Participant other than by retirement, the Minor
                         Amendment Committee may, with sole and complete
                         discretion, if it determines that such distribution is
                         in the best interest of the Company, require that
                         distribution of all cash and Stock Units (as defined in
                         Section 8(i) below) allocated to a Participant's
                         Deferred Cash Accounts or Deferred Stock Unit Accounts
                         (as defined in Section 8(i) below) be accelerated and
                         distributed as of the first business day of the
                         calendar year next following the date of termination.

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

                  (e)    A Participant may, at any time prior or subsequent to
                         the commencement of cash benefit payments under this
                         Plan, elect in writing to have his or her form of
                         payment of any or all amounts due under this Plan
                         changed to an immediate lump-sum distribution

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                         which  shall be paid within one (1) business day of
                         receipt by the Company of such request; provided that
                         the amount of any such lump-sum distribution shall be
                         reduced by an amount equal to the product of (X) the
                         total lump-sum distribution otherwise payable (based on
                         the value of the account as of the first day of the
                         month in which the lump-sum amount is paid, adjusted by
                         a pro-rata portion of the rate of return for the prior
                         month in which the lump-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), and (Y) 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 lump-sum distribution is received by the Company.

                  (f)    A Participant may, at any time prior or subsequent to
                         the commencement of distribution of Common Stock under
                         this Plan, elect to have his or her form of
                         distribution of any or all distributions of Common
                         Stock to be made under this Plan changed to an
                         immediate single distribution which shall be made
                         within three (3) days of receipt by the Company of such
                         request; provided, that the number of shares of Common
                         Stock to be distributed in the single distribution
                         shall be reduced by the number of shares equal in value
                         to the product of (X) the number of Stock Units
                         allocated to the Participant's Deferred Stock Unit
                         Account, (Y) the mean of the high and low price of the
                         shares of Common Stock on the New York Stock Exchange
                         on the date of the request, and (Z) 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 Common Stock distribution is
                         received by the Company. Only whole numbers of shares
                         will be issued, with any fractional share amounts and
                         dividend equivalents not used to "purchase" additional
                         Stock Units paid in cash.

                  (g)    At the time elected by the Participant for distribution
                         of Common Stock attributable to allocations under the
                         Participant's Deferred Stock Unit Account, the Company
                         shall issue 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.

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         (v)      Rabbi Trust. The Company has established a Supplemental
                  Benefits Trust with Norwest Bank Minneapolis, 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 compensation under the Plan and certain other plans
                  of deferred compensation of the Company. In the event of a
                  "Change in Control" (as defined in Section 12 below), the
                  Company shall be obligated to immediately contribute such
                  amounts to the Trust as may be necessary to fully fund all
                  cash benefits payable under the Plan. Any Participant in 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.

         (vi)     Common Stock Distribution. In the event of a Change of
                  Control, shares of Common Stock and cash attributable to Stock
                  Units and dividend equivalents credited to each Participant's
                  Deferred Stock Unit Account shall be immediately distributed
                  to the Participant.

5.       DEFERRED CASH ACCOUNTS AND INVESTMENT RETURNS ON AMOUNTS IN DEFERRED
         ACCOUNTS

         A deferred cash incentive compensation account ("Deferred Cash
         Account") will be established on behalf of each Participant electing to
         defer cash incentive compensation under Section 4(i) above, and the
         amount of deferred cash incentive compensation will be credited to each
         Participant's Deferred Cash Account as of the first of the month
         coincident with or next following the month in which the deferral
         becomes effective. Each Participant's Deferred Cash Account will be
         credited monthly with a "rate of return" on the total deferred cash
         incentive amount accruing as of the first of the month coincident with
         or next following the date deferred cash incentive compensation is
         credited to the Participant's Deferred Cash Account. Such "rate of
         return" shall be based upon the actual investment performance of funds
         in the VIP, or at such other rates as may be made available to
         Participants from time to time pursuant to the provisions of the Plan.
         A Participant may elect to have the "rate of return" credited to his or
         her Deferred Cash Account at any of the following rates:

                  (a)    the rate of return as from time to time earned by the
                         Fixed Income Fund of the VIP;

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

                  (c)    any other rates of return of other funds or portfolios
                         established under a qualified benefit plan maintained
                         by the Company which the Minor Amendment Committee may
                         establish as an available rate of return under this
                         Plan.

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         Participants may elect to have any combination of the above "rates of
         return" accrue on amounts in their Deferred Cash Account, from 1% to
         100%, provided that the sum of the percentages attributable to such
         rates with respect to each account equals 100%. A Participant may
         change the "rate(s) of return" to be credited to his or her Deferred
         Cash Account as of the first day of any month by notifying the Company,
         in writing, of such election by the last business day of the preceding
         month.

         Each Participant's Deferred Cash Account will be credited monthly with
         the "rate(s) of return" elected by the Participant until the amount in
         each Participant's Deferred Cash Account is distributed to the
         Participant on the distribution date(s) elected by the Participant.
         Each Participant shall receive a periodic statement of the balance of
         his or her Deferred Cash Account.

6.       COMPANY CONTRIBUTIONS TO DEFERRED CASH ACCOUNTS

         As of the first of the month coincident with or next following the
         month in which a deferral is made hereunder, each Participant's
         Deferred Cash Account will be credited with hypothetical interest in an
         amount equal to 2 1/2% of the Participant's deferred cash incentive
         compensation, or such amount as will otherwise equal the value of the
         "Base Allocation" (as that term is defined in the VIP) which would have
         been allocated to the Participant if the Participant had contributed
         such deferred cash incentive compensation amount to the VIP. In
         addition, as soon as practicable following the end of each fiscal year,
         each Participant's Deferred Cash Account may be credited with
         hypothetical interest in an amount not to exceed 2 1/2% of the
         Participant's deferred cash incentive compensation, or such amount as
         will otherwise equal the value of the "Variable Allocation" (as that
         term is defined in the VIP) which would have been allocated to the
         Participant if the Participant had contributed such deferred cash
         incentive compensation amount to the VIP. Company contributions under
         this Section 6 shall not be made as to deferrals which were included in
         a Participant's earnable compensation under the General Mills
         International Retirement Plan.

7.       SHORT-TERM DEFERRALS

         Notwithstanding the foregoing provisions of the Plan, the Company may
         also permit Participants to elect to defer all or part of cash
         incentive compensation, if any, to a date certain selected by the
         Company within the taxable year it would otherwise be paid, upon
         written notice to the Company received by December 31 of the preceding
         calendar year. Interest shall be credited on such deferred cash amount
         at a rate selected by the Company and communicated to the Participants
         at the same time the availability of any such short-term deferral
         opportunity is communicated to Participants.

8.       DEFERRED STOCK UNIT ACCOUNTS AND DIVIDEND EQUIVALENTS

         (i)      A deferred stock unit account ("Deferred Stock Unit Account")
                  will be established for each stock option grant covered by a
                  Participant election to defer the receipt of Common Stock
                  under Section 4(ii) above and, for each Net Share deferred, a
                  Stock Unit ("Stock Unit") will be credited to the Deferred
                  Stock Unit Account as of the date of the stock option
                  exercise. In addition, a Deferred Stock Unit Account will be
                  established for each grant of restricted stock or restricted
                  stock units covered by a Participant election to defer under
                  Section 4(iii) above and, for each share of

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                  Common Stock of the Company attributable to deferred
                  restricted stock or restricted stock units, a deferred Stock
                  Unit will be credited to the Participant's Deferred Stock Unit
                  Account. Participants may make elections, which shall become
                  effective six months after they are made, either to receive
                  dividend equivalent cash amounts on Stock Units currently or
                  to have the amounts reinvested. 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 hypothetically "purchase" additional Stock Units for
                  the Deferred Stock Unit Account at a price equal to the mean
                  of the high and low price of the Common Stock on the New York
                  Stock Exchange on the dividend date. No fractional Stock Units
                  will be credited. The Minor Amendment 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. Each Participant will receive a periodic statement
                  of the number of Stock Units in his or her Deferred Stock Unit
                  Account(s).

         (ii)     The Plan governs the deferral of receipt of Common Stock
                  issuable upon the exercise of stock options of the Company.
                  The stock options are governed by the stock option plan under
                  which they are granted. The Plan also governs the deferral of
                  restricted stock and restricted stock units issued by the
                  Company. The restricted stock and restricted stock units are
                  governed by the Company's policy(ies) for granting restricted
                  stock and restricted stock units under the Company's various
                  stock plans granting restricted stock, as they may be amended
                  from time to time. No stock options, restricted stock,
                  restricted stock units, or shares of Common Stock are
                  authorized to be issued under the Plan. Participants who elect
                  under the Plan to defer the receipt of Common Stock issuable
                  upon the exercise of stock options and Participants who elect
                  under the Plan to defer shares of Common Stock attributable to
                  restricted stock or the receipt of restricted stock units 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 8(i) above.

         (iii)    In the event that the Compensation Committee determines that
                  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
                  transaction or event affects the Common Stock such that an
                  adjustment to the Participants' allocations to their Deferred
                  Stock Unit Account(s) is appropriate to prevent reduction or
                  enlargement of the benefits or potential benefits intended to
                  be made available under the Plan, then the Compensation
                  Committee may, in its

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                  sole discretion and in such manner as it may deem equitable,
                  adjust the Stock Units allocated to Participants' Deferred
                  Stock Unit Account(s).

9.       FINANCIAL HARDSHIP PAYMENTS

         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 related to allocations of Stock Units
         under his or her Deferred Stock Unit Accounts earlier than initially
         elected. Subject to Section 3(i), the Minor Amendment Committee may, in
         its sole discretion, either approve or deny the request. The
         determination made by the Minor Amendment 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.

10.      DEATH OF A PARTICIPANT

         If the death of a Participant occurs before a full distribution of the
         Participant's Deferred Cash Account(s) or Deferred Stock Unit
         Account(s) 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.

11.      IMPACT ON OTHER BENEFIT PLANS

         The Company may maintain life, disability, retirement and/or savings
         plans under which benefits earned or payable are related to earnings of
         a Participant.

         Life and disability plan benefits will generally be based upon the
         earnings that a Participant would have earned in a given calendar year
         in the absence of any deferral hereunder.

         Retirement benefits under a qualified pension plan maintained by the
         Company or an affiliate will be based upon earnings actually paid to a
         Participant during any given Plan year. If a person terminates
         employment with a right to a vested benefit under a qualified plan
         maintained by the Company or an affiliate, and if the actual income for
         pension purposes was reduced because of a cash deferral under this
         Plan, the Company will provide a supplemental pension equal to the
         difference between the actual benefit payable from the pension plan and
         the benefit that such Participant would have been received had income
         not been deferred. If such a supplemental benefit is due, such benefit
         would be subject to all of the provisions and in accordance with the
         terms and conditions of the Supplemental Retirement Plan of General
         Mills, Inc. This supplemental retirement benefit will not apply to
         Participants who terminate before becoming vested under the qualified
         pension plan.

12.      NON-ASSIGNABILITY OF INTERESTS

         The interests herein and the right to receive distributions under this
         Plan may not be anticipated, alienated, sold, transferred, assigned,
         pledged, encumbered, or

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         subjected to any charge or legal process, and if any attempt is made to
         do so, or a Participant becomes bankrupt, the interests of the
         Participant under the Plan may be terminated by the Minor Amendment
         Committee, which, in its sole discretion, may cause the same to be held
         or applied for the benefit of one or more of the dependents of such
         Participant or make any other disposition of such interests that it
         deems appropriate. Notwithstanding the foregoing, in the event a
         Participant has received an overpayment from the Supplemental
         Retirement Plan of General Mills, Inc. and has failed to repay such
         amounts upon written demand of the Company, the Company shall be
         authorized and empowered, at the discretion of the Company, to deduct
         such amount from the Participant's Deferred Cash Account(s).

13.      AMENDMENTS TO PLAN

         The Company, or if specifically delegated, its delegate, reserves the
         right to suspend, amend or otherwise modify or terminate this Plan at
         any time, without notice. However, this Plan may not be suspended,
         amended, otherwise modified, or terminated after a Change in Control
         without the written consent of a majority of Participants determined as
         of the day before such Change in Control occurs. A "Change in Control"
         means:

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

                  (ii)   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

                                       11
<PAGE>

                         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

                  (iii)  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 shareholders, to the
                         consent of any government or governmental agency, the
                         obtaining of such consent (either explicitly or
                         implicitly by consummation); excluding, however, such a
                         Business Combination pursuant to which (a) 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, (b) 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 (c) 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

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

         Notwithstanding any other provision of this Plan to the contrary and
         except as provided in Section 3(i), the Minor Amendment Committee may,
         in its sole discretion, direct that distributions be made before such
         distributions are otherwise due to be made 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 delegate, or a decision
         by a court of competent jurisdiction involving a Participant or
         beneficiary), such Committee believes that Participants or their
         beneficiaries have recognized or

                                       12
<PAGE>

         will recognize income for federal income tax purposes with respect to
         distributions that are or will be distributed to such Participants
         under the Plan before such distributions are scheduled to be paid. In
         making this determination, the Minor Amendment Committee shall take
         into account the hardship that would be imposed on Participants or
         their beneficiaries by the payment of federal income taxes under such
         circumstances.

14.        ARBITRATION

         (i)      Any controversy or claim arising out of or relating to this
                  Plan, or any alleged breach of the terms or conditions
                  contained herein, shall be settled by arbitration in
                  accordance with the Commercial Arbitration Rules of the
                  American Arbitration Association (the "AAA") as such rules may
                  be modified herein.

         (ii)     An award rendered in connection with an arbitration pursuant
                  to this Section shall be final and binding and judgment upon
                  such an award may be entered and enforced in any court of
                  competent jurisdiction.

         (iii)    The forum for arbitration under this Plan shall be
                  Minneapolis, Minnesota and the governing law for such
                  arbitration shall be laws of the State of Minnesota.

         (iv)     Arbitration under this Section shall be conducted by a single
                  arbitrator selected jointly by the Company and the Participant
                  or Beneficiary, as applicable (the "Complainant"). If within
                  thirty (30) days after a demand for arbitration is made, the
                  Company and the Complainant are unable to agree on a single
                  arbitrator, three arbitrators shall be appointed. Each party
                  shall select one arbitrator and those two arbitrators shall
                  then select a third neutral arbitrator within thirty (30) days
                  after their appointment. In connection with the selection of
                  the third arbitrator, consideration shall be given to
                  familiarity with executive compensation plans and experience
                  in dispute resolution between parties, as a judge or
                  otherwise. If the arbitrators selected by the parties cannot
                  agree on the third arbitrator, they shall discuss the
                  qualifications of such third arbitrator with the AAA prior to
                  selection of such arbitrator, which selection shall be in
                  accordance with the Commercial Arbitration Rules of the AAA.

         (v)      If an arbitrator cannot continue to serve, a successor to an
                  arbitrator selected by a party shall be also selected by the
                  same party, and a successor to a neutral arbitrator shall be
                  selected as specified in subsection (d) of this Section. A
                  full rehearing will be held only if the neutral arbitrator is
                  unable to continue to serve or if the remaining arbitrators
                  unanimously agree that such a rehearing is appropriate.

         (vi)     The arbitrator or arbitrators shall be guided, but not bound,
                  by the Federal Rules of Evidence and by the procedural rules,
                  including discovery provisions, of the Federal Rules of Civil
                  Procedure. Any discovery shall be limited to information
                  directly relevant to the controversy or claim in arbitration.

         (vii)    The parties shall each be responsible for their own costs and
                  expenses, except for the fees and expenses of the arbitrators,
                  which shall be shared equally by the Company and the
                  Complainant.

                                       13
<PAGE>

15.      EFFECTIVE DATE AND PLAN YEAR

         This Plan became effective as of May 1, 1984. It shall operate on a
         calendar year basis thereafter. The Plan was amended and restated
         effective as of January 1, 1986; and amended as of February 9, 1987;
         July 1, 1987; June 21, 1990; April 29, 1991; May 1, 1991; November 15,
         1991; December 15, 1992, December 1, 1994, January 1, 1995, June 3,
         1996, November 7, 1996, March 31, 1998 and December 1, 1999. The Plan
         has been amended and restated effective as of January 1, 2001.

                                       14EXHIBIT 10.16

                      PROTOCOL OF CEREAL PARTNERS WORLDWIDE

      FIRST. General Mills and Nestle have identified a common area of interest
in developing together the business of breakfast cereals outside of North
America and Japan, starting in Europe.

      SECOND. General Mills is a diversified consumer foods and restaurant
business that has developed a strong, successful breakfast cereal business in
North America. It recently captured the number one position with Cheerios brand.

      THIRD. Nestle, a diversified food business, has operations in over 60
countries, and amongst its portfolio of branded leading food products has been
traditionally selling in most countries outside North America and the U.K.,
infant weaning cereals where it enjoys leadership. Nestle has recently entered
the breakfast cereal market in Europe and some selected countries overseas.

      FOURTH. Both companies recognize the following:

       (a)    Potential growth opportunities above average in many countries
              outside North America and particularly in Europe.

       (b)    Both companies, apart from non-significant exceptions, do not
              compete directly in the food business on a geographical basis.

       (c)    General Mills' long-standing successful breakfast cereal
              technological and marketing know-how with strong product brands in
              North America which can be globalised.

       (d)    Nestle's long-standing and successful worldwide manufacturing and
              marketing organisation, selling top quality food products under
              the strong Nestle endorsement name; also its recent entry into
              breakfast cereals.

       (e)    Strong and dedicated R&D activities of both companies in the areas
              of food and nutrition.

       FIFTH. General Mills has been offered the possibility on a strictly
confidential basis by RHM to make a private bid for the cereals business, part
of which was recently acquired in the U.K. from RJR Nabisco. General Mills will
endeavor to obtain permission from RHM to share with Nestle available data and
other information pertaining to the possible acquisition.

       Both companies will decide within an estimated 3 to 4 weeks period to
make or not a bid if they agree on an acceptable price

<PAGE>

range, in which case the purchase will be done and the RHM cereal business would
be integrated in the joint venture "Cereals Partners Europe."

       However, it is agreed that if the acquisition from RHM does not
materialize, this should not in any circumstances impinge on the agreement
concerning the contemplated joint venture.

       THEREFORE, in order to successfully exploit their complementary natures,
the companies intend to enter into a general agreement covering the following:

      1. Establishment of a worldwide cereal joint venture ("JV") covering all
countries in the world with the exception of the USA, Puerto Rico, U.S.
territories, Canada and Japan.

       (a)    As a first step, the JV will enter Europe (EEC and EFTA countries
              including possible ventures in countries of Eastern Europe
              currently outside these territories).

       (b)    As subsequent steps, the JV will enter other countries or
              territories sequentially as feasible.

       (c)    The partners will discuss an approach for Japan.

       (d)    The exact form of cooperation between General Mills and Nestle in
              the following countries where Nestle has already a breakfast
              cereals business commitment will be further agreed upon between
              the two parties: Malaysia, India, Chile, Zimbabwe and Tunisia.

      2. Purposes of the joint venture:

       (a)    To become a significant player in the fast growing worldwide
              breakfast cereal business, and

       (b)    To exploit the strength and complementary nature of both partners
              to successfully build a viable, sizeable business against strong
              competitors.

      3. Nature of agreement:

       (a)    A 50/50 JV by combining the respective knowledge and know-how
              related to the business to facilitate the efficient manufacturing,
              marketing and selling of breakfast cereals.

       (b)    The JV shall be organised as mutually agreed based upon business
              considerations and other matters including legal and tax.

<PAGE>

       (c)    The JV shall be physically separated from the main flow of both
              partners, with a management fully responsible and accountable for
              its operations and reporting to a board as defined below.

       (d)    The defined field of the business is the following:

              Breakfast cereals, defined as all family, child and adult
              ready-to-eat and hot cereals excluding infant weaning cereals
              defined as dry or wet cereal-based products intended for infants
              and children not more than 3 years of age normally prepared as
              paps diluted in liquids. Excluded unless agreed upon at a later
              date are grain-based products presented in the form of snack bars
              and the like.

       (e)    The parties shall share equally in the initial and on-going
              investment required by the JV.

       (f)    All acquisitions in the defined product range and territory
              originating from one of the partners shall be offered to the other
              partner to be part of the JV or shared equally by both parties. If
              the partner being offered does not want or is unable to accept for
              reasons other than price, then that party will exclude itself from
              entering the breakfast cereal market in that country.

4.     Nature of Board of Directors:

       General Mills and Nestle agree to establish a supervisory Board in order
       to coordinate business activities, set the policies and authorize
       strategies, plans and budgets proposed by the CEO and resolve possible
       conflicts.

       The Board shall consist of an even number of members not to exceed six.
       General Mills and Nestle shall each be entitled to elect one half of the
       members. In the event a member resigns or becomes unable to serve, the
       parties agree that before taking any further action, a new member will be
       elected within 90 days by the party whose member has resigned. Neither
       the CEO nor any JV employee shall be a Board member.

       Each party will appoint a Co-Chairman of the Board. The Co-Chairmen will
       alternate in chairing the Board meetings. Minutes shall be kept for all
       Board meetings and be approved by the Board.

       The meetings of the Board shall be held at such times and such places as
       may from time to time be decided by the

<PAGE>

       Board; however, it should meet initially at least three times a year.

       Each member may be accompanied at Board meetings by any special advisor
       deemed necessary.

       All possible conflicts should be solved in earnest and good faith for the
       exclusive benefit of the JV. However, in case of a necessary arbitration,
       the Board will submit the matter to the CEO's of both companies. A
       detailed arbitration procedure will be established by both companies in
       common agreement.

       The Board will elect the Key Executives of the JV and determine their
       conditions of employment.

       The Board will also review and approve:

       (a)    Establishment of overall strategic objectives.

       (b)    Long-term plans of the JV.

       (c)    Capital, finance and operating budgets.

       (d)    Research and Development budget plans to be farmed out to the
              parties.

       (e)    Acquisitions and divestments.

       (f)    Application of trademarks - brands - their utilization by the JV.

       (g)    Bonuses and long-term incentive programmes.

       (h)    Yearly results and proposed use of cash and profits.

5.     Nature of Management:

       It will be a responsibility of the JV management to define business
       objectives, strategies, long and short term plans and budgets to be
       approved by the Board. The execution of such plans within certain
       boundaries set by the Board will be the sole responsibility of the JV
       management.

       To initially form the JV, the Board will select a CEO with the proper
       qualifications to manage the European business and who may be proposed by
       either JV partner. The partner who did not propose the selected CEO
       candidate will propose the CFO candidate to be selected. General Mills
       will propose to the Board marketing and technical management candidates
       fully qualified in the cereal business. Nestle will propose to the Board
       sales, distribution and manufacturing

<PAGE>

       candidates who are fully qualified. It is contemplated that the marketing
       staff will include people from each partner.

EUROPEAN OPERATIONS

       In order to begin JV operations starting in Europe, General Mills will
provide its long-standing breakfast cereal technological and marketing know-how
and strong product brand names to the JV at no cost. Likewise Nestle will
provide its strong Nestle endorsement name, its breakfast cereal brand names and
its marketing and technological know-how to the JV at no cost.

       Initially, the European operations of the JV will comprise the present
Nestle manufacturing operations for breakfast cereals as well as such facilities
as may be acquired by the JV from RHM. In principle, initially the JV will
preferably use Nestle's selling and physical distribution organization within
Europe unless other alternatives are more suitable. For this purpose the JV will
enter into an agreement with Nestle to purchase the physical distribution
service at cost. The selling service will be purchased at cost plus an
appropriate sales incentive.

       Existing Nestle breakfast cereals' European fixed assets shall be
transferred to the JV at true asset value. If agreement on true asset value
cannot be reached by the parties, Peat Marwick Main & Co. will evaluate the
assets independently and both parties will accept their valuation. If other
related Nestle fixed assets needed for the JV cannot be physically separated for
JV ownership, the JV will enter into an arm's length agreement with Nestle on a
fiscally acceptable cost basis.

       Products supplied by either party to the JV will be invoiced at a
fiscally acceptable cost plus basis.

BRANDS

       It is the intention to use Nestle as the endorsement for all products.
General Mills' and Nestle's strong product brand names will be used and agreed
upon according to what is in the best interest of the JV. Visual properties of
both company brands would be harmonised while respecting individual logos, etc.

       In view of the exclusive arrangement of Nestle with EuroDisney, the JV
would use such licensed characters as appropriate within the agreement signed by
Nestle and Disney.

EXPORTS

       Exports made to other than European countries will be the subject of
future agreements between the parties.

<PAGE>

ACCOUNTING MATTERS

       The JV will establish accounting systems and procedures to meet its and
the partners' needs.

       The JV will reimburse the partners for services other than those
mentioned in the second paragraph of the European Operations section on page 4
hereof, provided to the JV on a fiscally acceptable cost basis; e.g., legal,
accounting, product development, technical resources, market research, etc.

       The partners recognize the need for flexibility to minimize taxes and
fiscally required payments of each party shall be balanced.

PRESS RELEASE

       Both parties will conform to the wording and schedule of agreed-to press
releases.

DURATION

       1.  This agreement is intended to be perpetual.

       2.  Neither partner may sell or assign its interest to a third party.

FURTHER AGREEMENTS - To be executed with this Protocol

       1.  The Confidentiality Agreement covering exchange of technical
           information between General Mills and Nestle necessary to agree upon
           and form the JV (Annex "A").

       2.  Agreement by Nestle covering non-disclosure of RHM information
           ("Annex B").

       3.  Agreements by Nestle and General Mills not to engage in any activity
           which is directly or indirectly an attempt to take-over the other
           party (Annex "C").

FORMAL JOINT VENTURE AGREEMENT

       This Agreement is to be executed on or before January 15, 1990.

AGREEMENTS SUBSIDIARY TO THE JOINT VENTURE AGREEMENT

       1.  Agreements providing for the transfer of technology (patents and
           know-how) relating to breakfast cereals from the partners to the JV.
           Such agreements will provide that neither the JV nor Nestle may use
           breakfast cereal technology in the USA, its territories, Canada or
           Japan.

<PAGE>

       2.  Agreements by both partners on the use of trademarks covering
           "Nestle" as an endorsement and the use of product brands presently
           used by Nestle on breakfast cereals and reciprocally General Mills'
           trademarks defined as product brands used by the latter in North
           America and elsewhere.

       3.  R&D general agreements between both partners whereby future know how
           of the partners relating to breakfast cereals will be shared in
           common for all subsequent R&D projects.

Executed this 21 day of November, 1989.

NESTLE S.A.                               GENERAL MILLS, INC.

By  /s/ Camillo Pagano                    By  /s/ H. B. Atwater, Jr.
  -----------------------------             ------------------------------------
                                             Chairman and Chief Executive
                                             Officer

<PAGE>

                                     ANNEX C
                    OUTLINE OF MUTUAL "STANDSTILL" AGREEMENTS

        Each party will agree not to acquire or offer to acquire the stock or
assets of the other party, nor engage in a proxy contest to gain control of the
other party, whether alone or in concert with others.

        These agreements will extend for the longer of: ten years from the date
of the agreements; or ten years from the date the JV is dissolved or the
structure of the JV is materially changed.

<PAGE>

                              ADDENDUM NO. 1 TO THE
                      PROTOCOL OF CEREAL PARTNERS WORLDWIDE

       THIS ADDENDUM NO. 1 is to the Protocol of Cereal Partners Worldwide
between General Mills, Inc. and Nestle S.A. (the "Partners"), executed on the
21st day of November, 1989. Upon execution hereof this Addendum shall become an
integral part of the Protocol, and the parties hereto agree that the Protocol,
this Addendum, and any subsequent addendums hereto shall constitute the Formal
Joint Venture Agreement contemplated to be executed by the parties on or before
January 15, 1990.

FORMATION OF MANAGEMENT COMPANY

        The Partners agree that a management company shall be legally formed
under the laws of Switzerland with a physical location in the Canton of Vaud.
The name of this Swiss company may possibly be "CEREAL PARTNERS WORLDWIDE" or
"CPW" or the translation in French of "CEREAL PARTNERS WORLDWIDE" ("CPW"). CPW
is to be incorporated on or before June 1, 1990.

CEREAL BUSINESSES IN GERMANY, FRANCE, SPAIN AND PORTUGAL

        It is agreed that the present Nestle cereal businesses in Germany,
France, Spain and Portugal are to be transferred to the responsibility of the JV
on June 1, 1990 under the various "Subsidiary Agreements" referred to hereafter
in this Addendum. Notwithstanding that the legal structure of the JV in France,
Spain and Portugal is being studied at this time, CPW will have full operational
authority and responsibility for the above cereal businesses beginning June 1,
1990.

SUBSIDIARY AGREEMENTS FOR GERMANY, FRANCE, SPAIN AND PORTUGAL

        To most efficiently begin the JV operations in Germany, France, Spain
and Portugal on June 1, 1990, it is anticipated that some or all of the
following agreements in some form will be necessary:

        1. Co-pack Agreements

        2. Distribution Agreements

        3. Technology and Trademark License Agreements

        4. Management Agreements

       The preceding agreements, all to be effective June 1, 1990, shall be
between Nestle S.A. or General Mills, Inc. and the affiliated companies or
entities of the JV, e.g., CPW and whatever legal entities are formed for the
cereal businesses of

<PAGE>

Germany, France, Spain and Portugal, and subsidiary companies of Nestle S.A. or
General Mills, Inc. located in these countries.

        Notwithstanding that the JV will become operational on June 1, 1990
under the preceding agreements, General Mills, Inc. also agrees that upon
written notice from Nestle S.A., the existing Nestle S.A. breakfast cereals'
European fixed assets shall be transferred to the JV in accordance with the
provisions of the third paragraph of EUROPEAN OPERATIONS of the Protocol.

ARBITRATION

        Any "material dispute" which may arise between Nestle S.A. and General
Mills, Inc. concerning any aspect of the JV, the Protocol, or any matter related
thereto, including, but not limited to the interpretation, the implementation,
or the termination of the JV, shall be submitted for mediation and resolution to
the respective chief executive officer of General Mills, Inc. and Nestle S.A. A
"material dispute" shall mean any disagreement or impasse or failure to take any
action by Nestle S.A. or General Mills, Inc., or any of the companies or
entities associated with the JV, which will have a substantial negative
consequence in the operation of the JV. If such a "material dispute" is not
resolved within 60 days after submission to the chief executive officers of
General Mills, Inc. and Nestle S.A., the dispute, including a decision as to
whether or not the dispute is material, shall be resolved by arbitration
pursuant to the Rules of Conciliation and Arbitration of the International
Chamber of Commerce, which arbitration shall take place in the City of London.
Notwithstanding such rules, it is agreed that the arbitrators shall be three in
number, one of whom shall be chosen by Nestle S.A., the second by General Mills,
Inc., and the third shall be chosen by the two arbitrators designated by Nestle
S.A. and General Mills, Inc. The arbitration proceedings shall be conducted in
the English language, but documents shall be submitted in the language of the
original with translations thereof being provided to the arbitrators. Judgment
by the International Chamber of Commerce shall be final and not subject to any
appeal, and the award thereof, if necessary, may be entered into any court of
competent jurisdiction of any country.

TERMINATION

        The JV envisioned and delineated by the Protocol shall continue until
December 31, 2040, unless terminated by the mutual written consent of General
Mills, Inc. and Nestle S.A. prior thereto, or by the provisions under
LIQUIDATION. Notwithstanding the date of December 31, 2040, the JV shall be
automatically extended for additional consecutive 10-year periods, subject that
either Nestle S.A. or General Mills, Inc., by written notice to the other at
least three years prior to December 31, 2040, or any

<PAGE>

renewal date, gives notice that the JV shall not be continued or renewed.

MATERIAL BREACH

        In addition to the JV terminating pursuant to the provisions of
TERMINATION, the JV may also terminate upon a "material breach" by Nestle S.A.
or General Mills, Inc., or any affiliated company or entity carrying out any
aspect of the JV which is not cured. A "material breach" shall be defined in the
same manner as a "material dispute," and if there is disagreement as to whether
or not a "material breach" has occurred, this matter shall be resolved or
arbitrated in accordance with the provisions of ARBITRATION. In the event that
any entity or party to the JV wishes to assert that a material breach has
occurred, written notice thereof shall be given to the chief executive officer
of either Nestle S.A. or General Mills, Inc., and the notified party shall be
given a period of 60 days in which to cure or rectify such material breach. If
it is impossible to rectify or cure such material breach within the said 60 day
period, it shall nevertheless be deemed to have been rectified or cured if the
notified party provides a financial bond or other financial guaranty which will
assure that the costs of curing or rectifying the "material breach" will be met.

MATERIAL CHANGE OF CIRCUMSTANCES

   A "material change of circumstances" shall be deemed to be an event or events
which, absent termination of the JV, will cause a material inequity to occur to
Nestle S.A. or General Mills, Inc., or any affiliated entity or company thereof,
not including a JV entity (the "affected party"). A material change of
circumstances would be one which was not contemplated by the parties hereto to
occur as of the date hereof and which will have the consequence of materially
changing the manner in which the JV is to be conducted or in the
characteristics, including the corporate structure, of either Nestle S.A. or
General Mills, Inc. If a material change of circumstances has occurred, Nestle
S.A. or General Mills, Inc. as the "affected party," that is the party not
incurring the material change of circumstances, shall have the right to purchase
the other party's interest in the JV at an equitable price subject that all
other relationships between the parties (e.g., licenses) also are resolved on an
equitable basis. In the event that Nestle S.A. and General Mills, Inc. are not
in agreement that an event has occurred which constitutes a "material change of
circumstances," or there is not agreement as to the price at which one party may
purchase the other party's interest in the JV or the settlement of other rights,
such disagreement shall be subject to ARBITRATION as herein provided.

LIQUIDATION

       In the event that the JV is to be terminated under any of the provisions
of the Protocol, Nestle S.A. and General Mills,

<PAGE>

Inc. will negotiate in the utmost good faith a termination of the companies and
entities comprising the JV under the following principles:

       1.     If the businesses of the JV, or any part thereof, are to be
              discontinued, the assets thereof shall be applied first to the
              payment of the associated liabilities, then to the expenses of
              such liquidation, and any net remainder shall be distributed
              equally to Nestle S.A. or General Mills, Inc., or the assigns
              thereof.

       2.     Intellectual property transferred or licensed to the company or
              entity which is to be liquidated shall be reassigned or
              transferred to the entity which was the transferor of the
              intellectual property.

       3.     Intellectual property that has been developed solely by any
              company or entity of the JV, or is the sole and exclusive property
              of such entity or company under contract, shall be distributed to
              Nestle S.A. and General Mills, Inc. (or the assigns thereof) in
              shares that are as equal as practical under the circumstances,
              taking into account the fair value of such intellectual property.
              It is agreed that if either Nestle S.A. or General Mills, Inc.
              pursuant to this provision receives the exclusive title or right
              to such intellectual property, such party will grant to the other
              party of the JV an irrevocable, royalty-free license without
              limitation as to term, with full rights to sublicense to any
              company or entity which is directly or indirectly owned or
              controlled by Nestle S.A. or General Mills, Inc.

       4.     In the event that the parties are unable to agree upon the manner
              in which any of the preceding principles of termination are to be
              effected or resolved, the matter shall be submitted for resolution
              pursuant to ARBITRATION as herein provided.

              EXECUTED THIS 9th day of February, 1990.

                                          NESTLE S.A.

                                          By  /s/ Ramon Masip
                                            ------------------------------------

                                          Its Executive Vice President
                                             -----------------------------------

                                          GENERAL MILLS, INC.

                                          By  /s/ Mark H. Willes
                                            ------------------------------------

                                          Its   President
                                             -----------------------------------

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