1. | Elect as directors the 13 nominees named in the attached Proxy Statement; |
2. | Approve the 2011 Stock Compensation Plan; |
3. | Approve the 2011 Compensation Plan for Non-Employee Directors; |
4. | Cast an advisory vote on executive compensation; |
5. | Cast an advisory vote on the frequency of the advisory vote on executive compensation; |
6. | Ratify the appointment of KPMG LLP as General Mills independent registered public accounting firm for our fiscal year ending May 27, 2012; and |
7. | Transact any other business that properly comes before the meeting. |
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| Leadership. We believe that directors who have served as chief executive officers or senior executives are in a position to contribute practical insight into issues of business strategy and operations. They also have access to important sources of market intelligence, analysis and relationships that benefit the company. | |
| Industry experience. As a company that relies on the strengths of our branded products, we seek directors who are familiar with the consumer packaged goods industry, have global marketing and retail experience, and who have brand building expertise. | |
| Financial expertise. We believe that a strong understanding of finance and financial reporting processes is important for our directors. Our directors have significant capital markets experience, corporate finance expertise and financial reporting backgrounds. Each of our audit committee members is financially literate, and three of our directors qualify as audit committee financial experts. |
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| Public policy experience. Directors with governmental and policymaking experience play an increasingly important role on our board as our business becomes more heavily regulated and as our engagement with stakeholders continues to expand. | |
| Global perspective. A significant portion of the companys future growth depends on its success in markets outside of the United States. Directors with a global perspective help us make decisions on our strategic expansion into those markets. |
Bradbury H. Anderson Director since 2007
Bradbury H. Anderson, age 62, served as Vice Chairman of the Board of Best Buy Co., Inc., an electronics retailer, from 2002 until his retirement in June 2010. He was also Chief Executive Officer of Best Buy from 2002 until his retirement from that position in 2009. Mr. Anderson joined Best Buy in 1973. Prior to becoming Chief Executive Officer, he served as Executive Vice President from 1986 to 1991 and President and Chief Operating Officer from 1991 to 2002. |
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Mr. Anderson brings to the board over 30 years of valuable retail expertise, unique consumer insights and brand building experience. He also adds strong leadership capabilities, strategic planning experience and operating expertise. During his tenure at Best Buy, Mr. Anderson helped to build the company from a local electronics retailer into a Fortune 100 company with a very strong branded identity. | ||
R. Kerry Clark Director since 2009
R. Kerry Clark, age 59, served as Chairman and Chief Executive Officer of Cardinal Health, Inc., a provider of health care products and services, until his retirement in 2009. Mr. Clark joined Cardinal Health in 2006 as President and Chief Executive Officer and became Chairman in 2007. Prior to that, he had held various positions at The Procter & Gamble Company, a consumer products company, since 1974, including President of P&G Asia; President, Global Market Development and Business Operations; and from 2004 to 2006, Vice Chairman of the Board. He is a director of Textron, Inc. and Bausch & Lomb, Incorporated, and he was a director of Cardinal Health, Inc., from 2006 to 2009. |
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Mr. Clark brings to the board business leadership, corporate strategy and operating expertise, and a strong background in consumer packaged goods. In particular, he has extensive experience in launching new products, brand building, innovation, marketing, customers and sales channels. Mr. Clark also lends a global business perspective, based on his leadership of global business operations at Procter & Gamble. | ||
Paul Danos Director since 2004
Paul Danos, age 69, has been Dean and Laurence F. Whittemore Professor of Business Administration at Tuck School of Business at Dartmouth College since 1995. Prior to that, Mr. Danos held academic positions at the University of Michigan from 1974 to 1995, the University of Texas from 1971 to 1974 and the University of New Orleans from 1970 to 1971. He is a director of B.J.s Wholesale Club, Inc. As a scholar and educator, Mr. Danos brings to the board significant financial accounting expertise and a unique approach to examining issues. Mr. Danos has been involved in several decades of research and scholarship, most recently as a Dean at Dartmouth College and before that as the Arthur Andersen Professor of Accounting at the University of Michigan. Mr. Danos is also actively involved in corporate governance and risk assessment, as a member of the audit committee and the chair of the corporate governance committee at B.J.s Wholesale Club. He is one of our audit committees financial experts. |
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2
William T. Esrey Director since 1989
William T. Esrey, age 71, is Chairman of the Board of Spectra Energy Corp., a provider of natural gas infrastructure, and Chairman Emeritus of Sprint Nextel Corporation, a telecommunications company. Mr. Esrey served as Chairman of the Board for Sprint from 1990 to 2003 and Chief Executive Officer from 1985 to 2003. From 2003 until its sale in 2004, Mr. Esrey served as Chairman of Japan Telecom, one of the leaders in the telecommunications industry in Japan. As a former Chairman of the Board and Chief Executive Officer of Sprint Nextel Corporation, Mr. Esrey brings leadership, strategic planning, mergers and acquisitions and operating experience from a large, diversified company. During his tenure at Sprint, the company developed from a rural telephone company into a multibillion dollar international corporation. Mr. Esrey also served as managing director at the investment banking firm of Dillon Read & Co. and provides the board with significant capital markets and corporate finance expertise. He currently serves as our finance committee chair, and is one of the companys audit committee financial experts. |
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Raymond V. Gilmartin Director since 1997
Raymond V. Gilmartin, age 70, has been a Professor at the Harvard Business School since July 2006. He is the retired Chairman, President and Chief Executive Officer of Merck & Company, Inc., a pharmaceutical company, and served in that capacity from 1994 to 2005. He served as Special Advisor to the Executive Committee of the Board of Merck from 2005 to 2006. He previously served as Chairman, President and Chief Executive Officer of Becton Dickinson and Company, a medical technology company. Mr. Gilmartin is a director of Microsoft Corporation. |
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Mr. Gilmartin brings to the board strong leadership, strategic planning capabilities, new product innovation and branding experience, and international operating expertise from his time at Merck. As our Presiding Director, he draws on his management and boardroom experiences to foster active discussion and collaboration among the independent directors on the board, and to serve as an effective liaison with management. Mr. Gilmartin also provides direct access to the latest developments and scholarship concerning strategic business planning, based on his faculty position at the Harvard Business School. | ||
Judith Richards Hope Director since 1989
Judith Richards Hope, age 70, has been Distinguished Visitor from Practice and Professor of Law since 2005 and was an Adjunct Professor from 2002 to 2003 at Georgetown University Law Center. Ms. Hope was a partner at the law firm of Paul, Hastings, Janofsky & Walker from 1981 until 2003 and a Senior Advisor to the Paul, Hastings firm from 2004 to 2005. Ms. Hope is a director of Union Pacific Corporation. Ms. Hope brings considerable legal oversight, risk assessment and policymaking expertise to the board and the public responsibility committee. Ms. Hopes law practice extensively involved clients from regulated industries. She served as Vice Chair of the Presidents Commission on Organized Crime under President Ronald Reagan and as Associate Director of the White House Domestic Council under President Gerald Ford. Ms. Hope is also the chair of the audit committee at our company and at Union Pacific. |
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3
Heidi G. Miller Director since 1999
Heidi G. Miller, age 58, was appointed in June 2010 as President of JPMorgan International, a division of JPMorgan Chase & Co. which focuses on growth in emerging markets and expanding the banks global corporate bank. She served as Executive Vice President, ceo, Treasury & Security Services, of JPMorgan Chase from 2004 to 2010. From 2002 to 2004, Ms. Miller served as Executive Vice President and Chief Financial Officer of Bank One Corporation. Previously, she had been Chief Financial Officer of Citigroup Inc. Ms. Miller is a director of The Progressive Corporation. |
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Ms. Millers financial expertise, risk management skills and international business background are valuable assets to the board and the finance committee. After earning a doctorate in Latin American History at Yale University, Ms. Miller spent 13 years with the Latin America Division of Chemical Bank, serving most recently as managing director and head of the emerging markets structured finance group. As head of Treasury & Security Services at JPMorgan Chase, she led the successful launch of a variety of new products and the groups global expansion, particularly in Asia. | ||
Hilda Ochoa-Brillembourg Director since 2002
Hilda Ochoa-Brillembourg, age 67, is the founder and has been since 1987 the President and Chief Executive Officer and Chief Investment Officer of Strategic Investment Group and Director of Emerging Markets Investment Corporation, both investment advisory firms. From 1976 to 1987, she served in various capacities within the Pension Investment Division of the World Bank, including as its Chief Investment Officer from 1981 to 1987. Prior to joining the World Bank, she served as an independent consultant in the fields of economics and finance, a lecturer at the Universidad Catolica Andres Bello in Venezuela and as treasurer of the C.A. Luz Electricia de Venezuela in Caracas. Ms. Ochoa-Brillembourg is a director of McGraw-Hill Companies. |
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As President and Chief Executive Officer of the Strategic Investment Group, and as a former Chief Investment Officer for the World Bank, Ms. Ochoa-Brillembourg provides both a public and a private sector perspective on financial markets, financial services, corporate finance and accounting. From these roles, she has experience developing and reviewing risk management processes. She also contributes significant global policymaking and international experience, based on her service at the World Bank and the David Rockefeller Center for Latin American Studies. | ||
Steve Odland Director since 2004
Steve Odland, age 52, joined the faculty of the College of Business at Florida Atlantic University in 2011. Mr. Odland served as Chairman and Chief Executive Officer of Office Depot, Inc., an office merchandise retailer, from 2005 until 2010. From 2001 to 2005, he was Chairman and Chief Executive Officer of AutoZone, Inc., an auto parts retailer. Prior to that, he served as an executive with Ahold USA, an international food retailer, from 1998 to 2000, and as President of the Foodservice Division of Sara Lee Bakery from 1997 to 1998. He was employed by The Quaker Oats Company from 1981 to 1996. |
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Based on his tenure as Chairman and Chief Executive Officer at Office Depot and AutoZone, Mr. Odland brings business leadership and strategic planning skills, retail expertise and an operating background to the board. He provides valuable insights into consumer products marketing, brand building, food service business-to-business and international management from his executive roles in the food industry at Ahold, Quaker Oats and Sara Lee. Mr. Odland also lends expertise on corporate financial planning. | ||
4
Kendall J. Powell Director since 2006
Kendall J. Powell, age 57, is Chairman of the Board and Chief Executive Officer of General Mills. Mr. Powell joined General Mills in 1979 and served in a variety of positions before becoming a Vice President in 1990. He became President of the Yoplait division in 1996, President of the Big G cereal division in 1997, and Senior Vice President of General Mills in 1998. From 1999 to 2004, he served as Chief Executive Officer of Cereal Partners Worldwide (CPW), our joint venture with Nestlé. He returned from CPW in 2004 and was appointed Executive Vice President. Mr. Powell was appointed President and Chief Operating Officer of General Mills with overall global operating responsibility for the company in 2006, Chief Executive Officer in 2007 and Chairman of the Board in 2008. He is a director of Medtronic, Inc. |
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During Mr. Powells tenure as Chairman and Chief Executive Officer, the company has experienced successive years of strong sales, profit and earnings growth, coupled with strong returns to stockholders. Mr. Powell has served in a number of key marketing and operational roles in the companys U.S. Retail divisions. He also spent eleven years abroad focusing on our international operations, including five years as Chief Executive Officer of CPW. His career-long dedication to the company; wide-ranging familiarity with the business; experience with the strategies that drive growth, both in the U.S. and internationally; and his collaborative working style have positioned him well to serve as our Chairman of the Board. | ||
Michael D. Rose Director from 1985 to 2000 and since 2004
Michael D. Rose, age 69, has been Chairman of the Board of First Horizon National Corporation, a banking and financial services company, and its subsidiary, First Tennessee Bank National Association, since 2007. Since 1998, Mr. Rose has been a private investor and Chairman of Midaro Investments, Inc., a privately held investment firm. He served as Chairman of the Board of Gaylord Entertainment Company from 2001 to 2005. Mr. Rose is also a director of Darden Restaurants, Inc. and Gaylord Entertainment Company. He served as a director at SteinMart, Inc. from 1998 to 2006, and at FelCor Lodging Trust from 1998 to 2006. |
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Based on his service as chairman for a number of public companies, most recently at First Horizon and Gaylord Entertainment, Mr. Rose brings leadership, strategic planning and governance expertise to the board. His knowledge of retail and consumer issues, accumulated over years of leadership roles in consumer service and hospitality companies, has enriched board discussions on marketing and brand building strategies. Mr. Rose is also active in governance and compensation matters. He serves as chair of the compensation committee at our company and at Darden Restaurants. |
5
Robert L. Ryan Director since 2005
Robert L. Ryan, age 68, served as Senior Vice President and Chief Financial Officer of Medtronic, Inc., a medical technology company, from 1993 until his retirement in 2005. Mr. Ryan was Vice President, Finance, and Chief Financial Officer of Union Texas Petroleum Corp. from 1984 to 1993, Controller from 1983 to 1984 and Treasurer from 1982 to 1983. Prior to 1982, Mr. Ryan was Vice President at Citibank and was a management consultant for McKinsey & Company. Mr. Ryan is a director of Stanley Black & Decker, Inc. and Citigroup Inc. He was a director of UnitedHealth Group from 1996 to 2008, and of Hewlett-Packard Company from 2004 to March 2011. |
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As former Chief Financial Officer at Medtronic and Union Texas Petroleum, Mr. Ryan brings significant audit, financial reporting, corporate finance and risk management experience to the board, including experience overseeing the controller, global audit, tax and treasury functions at these public companies. He has a high level of understanding of the boards role and responsibilities based on his service on other public company boards. He is one of our audit committee financial experts. | ||
Dorothy A. Terrell Director since 1994
Dorothy A. Terrell, age 66, is the Managing Director of FirstCap Advisors, a venture capital and advisory services firm that she founded in October 2010. She was a limited partner of First Light Capital, a venture capital firm, from 2003 until October 2010. Ms. Terrell served as President and Chief Executive Officer of the Initiative for a Competitive Inner City, a non-profit organization focused on inner city business development, from 2005 until 2007, and as Senior Vice President, Worldwide Sales, and President, Platform & Services Group, of NMS Communications, a producer of hardware and software component products for telecommunications applications, from 1998 until 2002. She served in various executive management capacities at Sun Microsystems, Inc. from 1991 to 1997 and Digital Equipment Corporation from 1976 to 1991. Ms. Terrell is a director of Herman Miller, Inc. |
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During her leadership roles at FirstCap Advisors, First Light and at three premier technology companies, Ms. Terrell helped businesses reach profitability, and she brings a breadth of experience in e-commerce, international marketing, plant management, manufacturing and enterprise risk assessment to the boards strategic discussions. Ms. Terrells commitment to inner city business development and health care causes has positioned her to be an informed and effective chair for our public responsibility committee. |
6
| The board believes that a substantial majority of its members should be independent, non-employee directors. The board has established guidelines consistent with the current listing standards of the New York Stock Exchange for determining director independence. You can find these guidelines in Appendix A of this Proxy Statement. | |
| Director affiliations and transactions are regularly reviewed to ensure there are no conflicts or relationships that might impair a directors independence from the company, senior management and our independent registered public accounting firm. | |
| The board has reviewed transactions between the company and each of our non-employee directors, their immediate family members and affiliated entities within the last three fiscal years. The board determined that each of these transactions was conducted in the ordinary course of our business and did not create a material relationship between the company and any of the directors involved, according to our independence guidelines. | |
| Based on this review, the board has affirmatively determined that the following non-employee directors are independent under our guidelines and as defined by New York Stock Exchange listing standards: Bradbury H. Anderson, R. Kerry Clark, Paul Danos, William T. Esrey, Raymond V. Gilmartin, Judith Richards Hope, Heidi G. Miller, Hilda Ochoa-Brillembourg, Steve Odland, Michael D. Rose, Robert L. Ryan and Dorothy A. Terrell. The board has also determined that all board committees are composed entirely of independent, non-employee directors. |
| Our board of directors has adopted a written policy for reviewing and approving transactions between the company and its related persons, including directors, director nominees, executive officers, 5% stockholders and their immediate family members or affiliates. The policy applies to: |
| all financial transactions, arrangements or relationships involving over $100,000; | |
| in which the company, or one of its affiliates, is a participant; and | |
| in which a related person could have a direct or indirect interest |
| The policy does not apply to certain compensation payments which have been approved by the compensation committee or disclosed in the Proxy Statement; transactions that are available to all other stockholders or employees on the same terms; or transactions with an entity where the related persons interest is only as a director or a less than 10% owner. |
7
| The board has delegated to our corporate governance committee the authority to review potential or existing transactions. The corporate governance committee will only approve or ratify those transactions that are determined to be consistent with the best interests of the company and its stockholders, and that comply with applicable policies, codes of conduct and legal restrictions. | |
| The corporate governance committee reviewed and ratified a number of commercial and charitable transactions in fiscal 2011, including the following: Hilda Ochoa-Brillembourg, a General Mills director, is a director and minority owner of Emerging Markets Investors Corporation (EMI), and as a result, had an indirect interest in its affiliate, Emerging Markets Management LLC (EMM). Approximately $122.9 million of General Mills retirement plan assets are invested in an EMM fund named the Emerging Markets Investors Fund (the EMM Fund), and the EMM Fund received management fees of approximately $1,295,280 attributable to these investments during fiscal 2011. Based on her ownership interest in EMI, Ms. Ochoa-Brillembourg had a financial interest of approximately $136,000 in the management fees. In determining that these relationships are consistent with the best interests of the company and its stockholders, and do not impair her independence, the committee considered the following factors: |
| Our relationship with EMI pre-dates Ms. Ochoa-Brillembourgs election to our board of directors, and she was not involved in establishing the relationship with EMI. | |
| Ms. Ochoa-Brillembourg was not involved in the day-to-day operation of the EMM Fund. | |
| She never had any direct involvement in providing services to our benefit plans. | |
| The compensation paid to the EMM Fund was determined through arms-length negotiations and is customary in amount. | |
| The board has determined that her financial interest in the transaction did not impact her willingness or ability to act independently from management. |
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| The Chairman of the Board leads the board and oversees board meetings and the delivery of information necessary for the boards informed decision-making. The Chairman also serves as the principal liaison between the board and our management. | |
| The board determines whether the role of the Chairman and the Chief Executive Officer should be separated or combined based on its judgment as to the structure that best serves the interests of the company. Currently, the board believes that the positions of Chairman and Chief Executive Officer should be held by the same person as this combination has served and is serving the company well by providing unified leadership and direction. | |
| When the Chairman and Chief Executive Officer roles are combined, the chair of the corporate governance committee: |
| acts as the presiding director and presides at all board meetings at which the Chairman is not present, including executive sessions of the non-employee directors; | |
| serves as a liaison between the Chairman and the non-employee directors; | |
| approves board meeting agendas and consults with the Chairman on information provided to the board; | |
| approves meeting schedules to assure that there is sufficient time for discussions; | |
| calls meetings of the non-employee directors and sets agendas for executive sessions; and | |
| serves as board representative for consultation and direct communication with major stockholders on issues that the board determines may not be addressed by the Chairman or other board designees and as otherwise deemed appropriate by the board. |
9
| The audit committee annually reviews the companys enterprise risk management process and the comprehensive assessment of key financial, operational and regulatory risks identified by management, as well as mitigating practices. The audit committee then discusses the process and results with the full board. | |
| In addition, the board discusses risks related to the companys annual financial plan at the beginning of each fiscal year, its business strategy at the Boards annual strategic planning meeting and other topics as appropriate. | |
| Each committee conducts its own risk assessment and management activities throughout the year, some of which are highlighted under Board Committees and Their Functions, and reports its conclusions to the board. | |
| The board also encourages management to promote a corporate culture that integrates risk management into the companys corporate strategy and day-to-day business operations in a way that is consistent with the companys targeted risk profile. |
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Functions: |
Oversees integrity, adequacy and
effectiveness of internal controls, audits, and financial
reporting processes;
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|
Assesses and ensures the independence,
qualifications and performance of our independent registered
public accounting firm, selects the independent registered
public accounting firm for the annual audit and approves the
independent registered public accounting firms services
and fees;
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Meets with the independent registered
public accounting firm, without management present, to consult
with it and review the scope of its audit;
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Oversees the companys ethics and
compliance program to ensure compliance with applicable laws,
corporate policies and the companys Employee Code of
Conduct;
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Reviews and discusses with management
the companys annual risk assessment and the enterprise
risk management processes, policies and guidelines for
identifying, assessing and managing key financial and
operational risks;
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Reviews and approves our annual audited
financial statements before issuance, subject to the board of
directors approval; and
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Reviews the performance of the internal
audit function.
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Financial Experts: | The board of directors has unanimously determined that (i) all audit committee members are financially literate under the New York Stock Exchange listing standards and (ii) Mr. Danos, Mr. Esrey and Mr. Ryan qualify as audit committee financial experts within the meaning of SEC regulations and have accounting or related financial management expertise as required by the New York Stock Exchange listing standards. Each member also meets the independence standards for audit committee membership under the rules of the SEC. |
11
Functions: |
Reviews compensation policies for
executive officers and employees to ensure they provide
appropriate motivation for corporate performance and increased
stockholder value;
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|
Conducts performance reviews of the
Chief Executive Officer;
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Recommends compensation and equity
awards for the Chief Executive Officer and approves them for
other senior executives;
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Recommends the compensation and equity
awards for the non-employee directors;
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Reviews and discusses with management an
annual risk assessment of the compensation policies for
executive officers and employees; and
|
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Reviews and discusses with management
the Compensation Discussion and Analysis and recommends its
inclusion in the Proxy Statement.
|
Functions: |
Monitors and recommends changes in the
organization and procedures of the board, including committee
appointments and corporate governance policies;
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|
Develops policy on composition,
participation and size of the board as well as tenure and
retirement of directors;
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Recommends candidates for election to
the board and evaluates continuing service of incumbent
directors;
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Oversees the board self-evaluation
process; and
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Reviews and approves transactions
between General Mills and related persons.
|
Functions: |
Reviews financial policies and
performance objectives, including dividend policy;
|
|
Reviews changes in our capital
structure, including debt issuances, common stock sales, share
repurchases and stock splits;
|
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Reviews the annual business plan and
related financing implications; and
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Reviews financial risk management
strategies, including the use of derivatives.
|
Functions: |
Reviews public policy issues and social
trends affecting General Mills;
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Monitors our corporate citizenship
activities and sustainability programs;
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Evaluates our policies in the context of
emerging corporate social responsibility issues; and
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Reviews our policies governing political
contributions and our record of contributions.
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Fees |
||||||||||||||||||||
Earned or |
||||||||||||||||||||
Paid |
Stock |
Option |
All Other |
|||||||||||||||||
in
Cash(1) |
Awards(2) |
Awards(3) |
Compensation(4) |
Total |
||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
Bradbury H. Anderson
|
75,000 | 90,013 | 66,874 | | 231,887 | |||||||||||||||
R. Kerry Clark
|
83,750 | 90,013 | 66,874 | | 240,637 | |||||||||||||||
Paul Danos
|
80,000 | 90,013 | 66,874 | 30,249 | 267,136 | |||||||||||||||
William T. Esrey
|
90,000 | 90,013 | 66,874 | 49,077 | 295,964 | |||||||||||||||
Raymond V. Gilmartin
|
85,000 | 90,013 | 66,874 | 37,182 | 279,069 | |||||||||||||||
Judith Richards Hope
|
90,000 | 90,013 | 66,874 | 41,818 | 288,705 | |||||||||||||||
Heidi G. Miller
|
75,000 | 90,013 | 66,874 | 14,446 | 246,333 | |||||||||||||||
Hilda Ochoa-Brillembourg
|
75,000 | 90,013 | 66,874 | 36,273 | 268,160 | |||||||||||||||
Steve Odland
|
75,000 | 90,013 | 66,874 | 21,921 | 253,808 | |||||||||||||||
Lois E. Quam
|
37,500 | 90,013 | 66,874 | 22,750 | 217,137 | |||||||||||||||
Michael D. Rose
|
85,000 | 90,013 | 66,874 | 42,749 | 284,636 | |||||||||||||||
Robert L. Ryan
|
80,000 | 90,013 | 66,874 | 39,332 | 276,219 | |||||||||||||||
Dorothy A. Terrell
|
81,250 | 90,013 | 66,874 | 39,455 | 277,592 |
(1) | Includes the annual retainer and additional fees for directors who chair a board committee or who serve on the audit committee. Mr. Anderson received $18,750 of his fees in common stock (531 shares valued at the closing price of our common stock on the New York Stock Exchange on the retainer payment dates). Ms. Quam resigned from the board on January 24, 2011, and consequently forfeited the balance of her annual retainer. |
(2) | Includes the grant date fair value for 2,450 restricted stock units granted to each director upon re-election in fiscal 2011, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (FASB ASC Topic 718). For fiscal 2011, assumptions used to calculate these amounts are factored into Note 11 Stock Plans to the audited financial statements included in our annual report on Form 10-K for the fiscal year ended May 29, 2011. |
The grant date fair value is based on $36.74 per share, the closing price of our common stock on the New York Stock Exchange on the grant date, September 27, 2010. | |
At fiscal year end, each non-employee director held 2,450 restricted stock units, except for Mr. Anderson, Mr. Clark, Mr. Danos, Ms. Hope, Ms. Miller, Ms. Ochoa-Brillembourg, Mr. Odland and Mr. Rose, who each reinvested their dividends and held 2,506 restricted stock units. Ms. Quam forfeited all unvested stock awards at the time of her resignation from the board. | |
(3) | Includes the grant date fair value for 12,248 stock options granted to each director upon re-election in fiscal 2011, calculated in accordance with FASB ASC Topic 718. For fiscal 2011, assumptions used to calculate these amounts are factored into Note 11 Stock Plans to the audited financial statements included in our annual report on Form 10-K for the fiscal year ended May 29, 2011. |
The grant date fair value is based on a Black-Scholes model valuation of $5.46 per share. The following assumptions were used in the calculation: expected term of 9.5 years; dividend yield of 3.1% annually; a risk-free interest rate of 2.8%; and expected price volatility of 18.5%. |
16
At fiscal year end, the total number of stock options held by each non-employee director was as follows: Mr. Anderson 60,288; Mr. Clark 44,244; Mr. Danos 120,288; Mr. Esrey 180,288; Mr. Gilmartin 180,288; Ms. Hope 160,288; Ms. Miller 160,288; Ms. Ochoa-Brillembourg 160,288; Mr. Odland 120,288; Mr. Rose 140,288; Mr. Ryan 60,288; and Ms. Terrell 40,288. Ms. Quam forfeited all unvested option awards at the time of her resignation from the board. | |
(4) | All Other Compensation includes: |
Planned |
Charitable |
|||||||||||
Gift |
Matching |
|||||||||||
Program(5) |
Gifts |
Total |
||||||||||
Name | ($) | ($) | ($) | |||||||||
B. H. Anderson
|
| | | |||||||||
R. K. Clark
|
| | | |||||||||
P. Danos
|
25,249 | 5,000 | 30,249 | |||||||||
W. T. Esrey
|
27,127 | 21,950 | 49,077 | |||||||||
R. V. Gilmartin
|
26,182 | 11,000 | 37,182 | |||||||||
J. R. Hope
|
24,685 | 17,133 | 41,818 | |||||||||
H. G. Miller
|
14,446 | | 14,446 | |||||||||
H. Ochoa-Brillembourg
|
21,273 | 15,000 | 36,273 | |||||||||
S. Odland
|
12,587 | 9,334 | 21,921 | |||||||||
L. E. Quam
|
| 22,750 | 22,750 | |||||||||
M. D. Rose
|
25,249 | 17,500 | 42,749 | |||||||||
R. L. Ryan
|
24,332 | 15,000 | 39,332 | |||||||||
D. A. Terrell
|
20,455 | 19,000 | 39,455 |
(5) | Includes interest cost recognized in fiscal 2011 in connection with the Planned Gift Program. Calculations assume 5.80% discount rate at the end of fiscal 2011; benefit payment immediately upon death; and mortality rates based on RP2000 Combined Healthy Mortality Table, projected to 2010 with Scale AA. |
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Amount and Nature |
||||||||||||
of Beneficial Ownership | ||||||||||||
Exercisable |
Percent |
|||||||||||
Name of Beneficial Owner | Shares(1) | Options(2) | of Class | |||||||||
B. H. Anderson
|
19,687 | (3) | 60,288 | * | ||||||||
R. K. Clark
|
9,117 | 44,244 | * | |||||||||
P. Danos
|
17,749 | 120,288 | * | |||||||||
W. T. Esrey
|
80,843 | 180,288 | * | |||||||||
I. R. Friendly
|
187,724 | (4) | 746,000 | * | ||||||||
R. V. Gilmartin
|
82,885 | 180,288 | * | |||||||||
J. R. Hope
|
61,954 | 160,288 | * | |||||||||
H. G. Miller
|
29,404 | 160,288 | * | |||||||||
D. L. Mulligan
|
58,910 | (5) | 237,826 | * | ||||||||
H. Ochoa-Brillembourg
|
22,755 | 160,288 | * | |||||||||
S. Odland
|
17,763 | 120,288 | * | |||||||||
C. D. OLeary
|
87,707 | 816,100 | * | |||||||||
R. A. Palmore
|
26,406 | | ||||||||||
K. J. Powell
|
250,958 | 1,201,338 | * | |||||||||
M. D. Rose
|
60,610 | (6) | 140,288 | * | ||||||||
R. L. Ryan
|
14,610 | 60,288 | * | |||||||||
D. A. Terrell
|
42,565 | 40,288 | * | |||||||||
All directors, nominees and executive officers as a group
(25 persons)
|
1,661,933 | (7) | 7,127,880 | 1.3 | ||||||||
BlackRock, Inc.
|
38,616,774 | (8) | | 6.0 | ||||||||
State Street Corporation
|
40,826,761 | (9) | | 6.3 |
* | Indicates ownership of less than 1% of the total outstanding shares. | |
(1) | Includes: |
| Shares of our common stock directly owned; | |
| Shares of our common stock allocated to participant accounts under our 401(k) Plan; | |
| Restricted stock units that vest within 60 days of July 28, 2011, as to which the beneficial owner currently has no voting or investment power: 2,450 restricted stock units for each non-employee director, except for Mr. Anderson, Mr. Clark, Mr. Danos, Ms. Hope, Ms. Miller, Ms. Ochoa-Brillembourg, Mr. Odland and Mr. Rose, who each reinvested their dividends and held 2,506 restricted stock units; and 29,851 restricted stock units for all directors, nominees and executive officers as a group; and | |
| Stock units that have vested and been deferred, as to which the beneficial owner currently has no voting or investment power: 3,125 units for Mr. Anderson; 4,036 units for Mr. Clark; 15,243 units for Mr. Danos; 24,188 units for Mr. Esrey; 123,096 units for Mr. Friendly; 20,071 units for Mr. Gilmartin; 50,070 units for Ms. Hope; 12,136 units for Ms. Miller; 20,249 units for Ms. Ochoa-Brillembourg; |
18
15,256 units for Mr. Odland; 17,716 units for Mr. Rose; 11,110 units for Mr. Ryan; 33,635 units for Ms. Terrell; and 515,369 units for all directors, nominees and executive officers as a group. |
(2) | Includes options that were exercisable on July 28, 2011 and options that become exercisable within 60 days of July 28, 2011. |
(3) | Includes 2,800 shares held in individual trusts by either Mr. Anderson or his spouse, for which they serve as trustees. |
(4) | Includes 2,256 shares held in custodial accounts for Mr. Friendlys minor children and 16,238 shares held in a trust for the benefit of Mr. Friendlys spouse and minor children. Mr. Friendlys spouse serves as trustee of the trust. |
(5) | Includes 55,326 shares owned jointly by Mr. Mulligan and his spouse. |
(6) | Includes 20,388 shares held in a margin account and deemed to be pledged and 20,000 shares held by Midaro 2000, an investment fund controlled by Mr. Rose. |
(7) | Includes 244,230 shares held solely by, jointly by, or in trust for the benefit of family members. Also includes 20,000 shares held by Midaro 2000, an investment fund controlled by Mr. Rose. |
(8) | Based on information contained in a Schedule 13G/A that BlackRock, Inc. and its subsidiaries (Black Rock), at 40 East 52nd Street, New York, New York 10022, filed with the SEC on February 4, 2011. The filing indicated that as of December 31, 2010, BlackRock had sole investment power and sole voting power over all of these shares. |
(9) | Based on information contained in a Schedule 13G filed by State Street Corporation and its subsidiaries (State Street), at State Street Financial Center, One Lincoln Street, Boston, Massachusetts 02111, with the SEC on February 11, 2011. The filing indicated that as of December 31, 2010, State Street had shared investment power and shared voting power over all of these shares. State Street expressly disclaims beneficial ownership of all shares reported. |
19
| Rewards superior individual and company performance; | |
| Attracts and retains management talent capable of achieving consistently superior business results; and | |
| Aligns the interests of company managers with those of stockholders by linking a portion of their compensation directly to increases in stockholder value. |
| The 2011 Plan will maintain low rates of annual share usage over an extended term. The 2011 Plan requests the authorization of 40 million shares (or approximately 6.2% of outstanding shares), which the company expects to issue over the next three to four years, versus the 24 million shares over a two-year term in the 2009 Plan and the 20 million shares over a two-year term in the 2007 Stock Compensation Plan (the 2007 Plan). The number of shares requested reflects the companys intent to maintain moderate stock compensation share usage during the term of the 2011 Plan. |
20
| The 2011 Plan will not result in additional share dilution. General Mills intends to continue its long standing practice of opportunistically repurchasing shares of its common stock in excess of new shares issued under the companys stock compensation plans. General Mills has repurchased approximately 7% of its outstanding shares (in excess of 44 million shares) over the term of the expiring 2009 Plan. With planned future repurchases, we do not expect there to be dilution of company shares as a result of the adoption of the 2011 Plan. | |
| The 2011 Plan will provide for a pool of shares equal to 5% of the authorized shares, which the company may use to grant awards with no vesting period or vesting periods shorter than the standard four-year cliff vesting. We intend to grant these awards in international markets where four-year cliff vesting may not serve our retention needs. | |
| Terms of the 2011 Plan are otherwise nearly identical to the 2007 and 2009 Plans, which were approved by stockholders by wide vote margins (79% and 75%, respectively, of the votes cast). |
| The 2011 Plan limits the issuance of full value performance awards, restricted stock and restricted stock units to 30% of authorized shares. Any full value award settled in stock above that limit decreases the number of authorized shares by six shares for each share granted. | |
| Like the 2009 Plan, the 2011 Plan provides for performance awards. The compensation committee may issue performance awards that vest upon the accomplishment of performance goals over one year or multiple years. Applicable performance goals and performance periods will be established by the committee. Performance awards may be denominated in shares of the companys common stock or notionally represented by a monetary value. | |
| The 2011 Plan generally has a minimum four-year cliff vesting schedule for awards, and a prohibition on reusing shares that are cancelled under prior plans. | |
| The 2011 Plan has a double-trigger requirement for change of control vesting. The change of control must have been consummated, and the participant must have been involuntarily terminated other than for cause, death or disability, or must have voluntarily terminated with good reason within two years of the change of control. | |
| Awards issued under the 2011 Plan are subject to the companys clawback policy. If the company must restate its financial results, and an officers actions or omissions are a significant contributing factor to the cause of the restatement, then the compensation committee may use its discretion to adjust the officers future compensation, cancel outstanding awards or require repayment of gains realized during a period when inaccurate financial results were publicly reported without correction. | |
| The 2011 Plan incorporates a broad range of other compensation and governance practices to protect stockholders interests, such as a limit on restricted stock and restricted stock unit awards; no discounted options or stock appreciation rights; prohibition on repricing; no reload options or loans to pay for awards; dividends on restricted stock and restricted stock units payable only at vesting; no dividend rights on options or stock appreciation rights; no transfer of shares for consideration to third parties; and restrictive share counting provisions that prohibit counting of shares on a net basis for issuance of options and stock appreciation rights. | |
| Upon approval of the 2011 Plan, no further grants will be made from the 2009 Plan. Approximately 10.2 million shares remaining in the 2009 Plan will no longer be available for grant. All new stock grants will be made from the 2011 Plan. |
21
Plan Term:
|
September 26, 2011 through September 30, 2021, or until all shares are utilized, whichever occurs first | |
Eligible Participants: | Employees selected by the compensation committee (typically managers and above) | |
Only employees of General Mills and its subsidiaries and affiliates are eligible to receive awards under the 2011 Plan. The compensation committee determines which employees are eligible to participate. The primary recipients of awards under the 2011 Plan will be our officers, other key employees and managers. As of May 29, 2011, there were approximately 35,000 full- and part-time employees of General Mills and its subsidiaries, of which approximately 2,800 were officers, other key employees and managers. | ||
Shares Authorized: | 40 million shares of General Mills common stock | |
Shares Authorized as a Percentage of Outstanding Common Stock: | Approximately 6.2% of shares outstanding at July 28, 2011 | |
Recent Market Value per Share: | $37.29 closing sales price on the New York Stock Exchange at July 28, 2011 | |
Award Types: | (1) Non-qualified stock options, (2) restricted stock, (3) unrestricted stock, (4) restricted stock units, (5) stock appreciation rights and (6) performance awards. Other than options, which are always settled in shares of company stock, awards may be paid in cash or stock as determined by the compensation committee. | |
Awards under the 2011 Plan will be either performance-based and designed to comply with Section 162(m) of the Internal Revenue Code (the Code) or discretionary. Subject to the 2011 Plan limits, the compensation committee has the discretionary authority to determine the size of an award, if it will be tied to meeting performance-based requirements and if any performance awards, stock appreciation rights or restricted stock units will be settled in common stock or cash. In order for any participant to be awarded performance awards, restricted stock or restricted stock units based on performance in a fiscal year, the companys net earnings from continuing operations, excluding items identified and disclosed by the company as non-recurring or special costs for that fiscal year, must be greater than zero. | ||
Award Limits: | Performance awards, restricted stock and restricted stock units settled in shares of common stock are limited to 30% of the total number of shares available, subject to the share counting provisions below. | |
Awards in excess of 2 million shares or units in the aggregate may not be issued to any single participant per fiscal year. | ||
The total value of performance awards payable to any single participant for a fiscal year may not exceed $20 million. | ||
In no event will the total value of a performance award granted to any participant for any one performance period exceed the lesser of 0.5% of the companys net earnings for that period or the limits stated above. | ||
Share Counting: | Shares subject to stock options and stock appreciation rights will reduce the shares available for awards by one share for every one share granted. |
22
Performance awards, restricted stock and restricted stock units settled in shares of common stock reduce the shares available for awards by one share for every one share awarded, up to 30% of the total number of shares available; beyond that, they reduce the number of shares available for awards by six shares for every one share awarded. | ||
Awards settled in cash do not count against the pool of available shares. | ||
Shares tendered or withheld to pay taxes or an options exercise price are not available for re-issuance and count against the pool of available shares. | ||
Forfeited awards are not counted against the maximum. | ||
Cancelled, terminated, forfeited or expired shares under prior plans cannot be reissued under the 2011 Plan. | ||
Exercise of Stock Options and Stock Appreciation Rights: | The exercise price of stock options and stock appreciation rights granted under the 2011 Plan may not be less than the fair market value of our common stock on the date of grant, and the term may not be longer than 10 years and one month. | |
Vesting: | Determined by compensation committee, but generally not less than four years for stock options, stock appreciation rights, restricted stock and restricted stock units. Up to 5% of authorized shares may be granted with vesting periods shorter than four-year cliff vesting. | |
Restricted stock units earn dividend equivalents equal to regular dividends paid on our common stock, which are distributed only to the extent the underlying restricted stock units vest. | ||
Performance awards vest upon the accomplishment of performance goals over one year or multiple years. Applicable performance goals and performance periods will be established by the compensation committee. The committee may adjust the value of awards based on performance criteria or as it otherwise determines in its discretion to be appropriate. It may also require forfeiture of all or part of the performance award in the event that additional conditions are not met, for example, if the participant is terminated prior to the expiration of any service conditions. | ||
Deposits: | The compensation committee may require deposits of General Mills common stock owned by the participant as a condition to restricted stock and restricted stock unit awards. | |
Adjustments: | In the event of certain corporate transactions, including a special dividend, recapitalization, stock split, reverse stock split, combination of shares, reorganization, merger, consolidation, spin-off, repurchase or exchange of our common stock or similar event affecting our common stock, the number and kind of shares granted under the 2011 Plan will be adjusted appropriately. | |
Transferability: | Stock options and stock appreciation rights granted under the 2011 Plan are transferable only as provided by the rules of the compensation committee, by the participants last will and testament, or by the applicable laws of descent and distribution. Restricted stock, restricted stock units and performance awards may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of until the applicable restrictions lapse. | |
Change of Control: | Vesting of outstanding awards accelerates upon the consummation of a change of control and one of the following double-trigger vesting requirements: (1) involuntary termination other than for cause within 24 months of the change of control, (2) voluntary termination for good reason within 24 months of the change of control for certain senior executives, or (3) there is no adequate replacement award and/or the awards are not assumed. In addition, the compensation committee may cancel and settle stock options and stock appreciation rights for cash. |
23
Termination, Death and Retirement: | If a participant voluntarily resigns or is terminated for cause, vested stock options and stock appreciation rights will expire three months after the termination of the participants employment. If a participant dies while employed by us, outstanding stock options and stock appreciation rights will fully vest and may be exercised by the persons designated beneficiary, or in the absence of such designation, by the participants estate for the original term. Unless otherwise provided by the compensation committee at the time of grant, if a participant retires on or after age 55 with at least five years of service, or if a participant is involuntarily terminated when their age plus years of service with the company equals or exceeds 70, outstanding stock options and stock appreciation rights will continue to vest, and the participant may exercise stock options or stock appreciation rights according to their original terms. For senior vice presidents and above who are involuntarily terminated, but whose age plus years of service are less than 70, their stock options and stock appreciation rights will vest and remain exercisable for the lesser of one year or the original term. | |
Subject to certain exceptions, performance awards, restricted stock and restricted stock units will be forfeited if they are not vested when the participant terminates employment. If a participant dies while employed by us, performance awards, restricted stock and restricted stock units will fully vest. Unless otherwise provided by the compensation committee at the time of grant, if a participant retires on or after age 55 and five years of service, or if a participant is involuntarily terminated when their age plus years of service with the company equals or exceeds 70, performance awards, restricted stock and restricted stock units will fully vest. | ||
Administration: | The 2011 Plan will be administered by the compensation committee. The compensation committee will select employees who shall receive awards, determine the number of shares covered thereby, and establish the terms, conditions and other provisions of the awards. The compensation committee may interpret the 2011 Plan and establish, amend and rescind any rules relating to the 2011 Plan. The compensation committee may delegate all or part of its responsibilities. | |
Amendments: | Subject to approval of the board of directors, where required, the compensation committee may terminate, amend or suspend the 2011 Plan, provided that no action may be taken by the compensation committee or the board of directors (except those described earlier in the Adjustments section) without the approval of the stockholders to: (1) increase the number of shares that may be issued; (2) permit granting of stock options or stock appreciation rights having an exercise price less than fair market value; (3) permit the repricing of outstanding stock options or stock appreciation rights; or (4) amend individual limits on awards. |
24
25
| Attracts and retains qualified individuals to serve on the companys board of directors; and | |
| Awards stock options and restricted stock units payable in General Mills common stock in order to align the interests of non-employee directors with those of stockholders by providing that a portion of their compensation is linked directly to increases in stockholder value. |
| Overall design of the 2011 Directors Plan is substantially similar to the 2006 Directors Plan, which was approved by stockholders by 73.2% of the votes cast. The 2011 Directors Plan has the same number of authorized shares to be issued. | |
| The 2011 Directors Plan reflects compensation and governance best practices, such as no stock option repricing, no discounted options, no reload options, a limitation on the number of shares that can be utilized in a given year, a limitation on the total number of shares that can be granted as restricted stock units over the term of the Plan, no dividends on options, and the avoidance of expansive share-counting features. | |
| Upon approval of the 2011 Directors Plan, no further grants will be made under the 2006 Directors Plan. Approximately 253,428 unissued shares under the 2006 Directors Plan will be cancelled. All new stock grants will be made under the 2011 Directors Plan. |
Plan Term:
|
September 26, 2011 through September 30, 2016 | |
Eligible Participants: | Members of the board of directors who are not employees of the company or any of its subsidiaries, currently 12 individuals | |
Shares Authorized: | 1.4 million shares of General Mills common stock | |
Shares Authorized as a Percentage of Outstanding Common Stock: | Approximately 0.2% of shares outstanding at July 28, 2011 | |
Recent Market Value per Share: | $37.29 closing sales price on the New York Stock Exchange at July 28, 2011 | |
Award Types: | (1) Non-qualified stock options, (2) restricted stock units and (3) cash retainers | |
Each non-employee director will be granted a non-qualified option to purchase shares of company common stock on the effective date of the 2011 Directors Plan (or, on the date a non-employee director is first elected after the effective date of the Plan) and on each successive annual stockholders meeting date when the director is re-elected. |
26
On the effective date of the 2011 Directors Plan (or, on the date a non-employee director is first elected after the effective date of the Plan) and on each successive annual stockholders meeting date when he or she is re-elected, each non-employee director shall receive an award of restricted stock units. | ||
Each non-employee director will receive an annual retainer for serving on the board. Each non-employee director may elect to receive all or a portion of the retainer in the form of cash, deferred cash and/or common stock. | ||
Award Limits: | The maximum number of shares authorized to be issued in a single plan year is 320,000. | |
Share Counting: | Shares subject to stock options will reduce the shares available for awards by one share for every one share granted. | |
Restricted stock units settled in shares of common stock reduce the shares available for awards by one share for every one share awarded, up to 30% of the total number of shares available; beyond that, they reduce the number of shares available for awards by six shares for every one share awarded. | ||
Shares tendered or withheld to pay taxes or an options exercise price are not available for re-issuance and count against the pool of available shares. | ||
Forfeited awards are not counted against the maximum. | ||
Cancelled, terminated, forfeited or expired shares under prior plans cannot be reissued under the 2011 Directors Plan. | ||
Exercise of Stock Options: | The exercise price of stock options granted under the 2011 Directors Plan may not be less than the fair market value of our common stock on the date of grant, and the term may not be longer than 10 years. | |
Vesting: | Each option will vest and become exercisable on the annual meeting date following the grant date and will expire ten years from the grant date. Restricted stock units vest on the annual stockholders meeting date following the grant date, at which time the company delivers shares of its common stock to the non-employee director, unless the director elected to defer the award. Restricted stock units earn dividend equivalents equal to regular dividends paid on our common stock, which are distributed only to the extent the underlying restricted stock units vest. | |
Adjustments: | All stock awards will be subject to adjustment for corporate transactions that may otherwise cause a dilution or enlargement of the rights of participants. | |
Transferability: | Stock options granted under the 2011 Directors Plan are transferable only as provided by the rules of the compensation committee, by the participants last will and testament, or by the applicable laws of descent and distribution. Restricted stock units may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of until the applicable restrictions lapse. | |
Change of Control: | In the event of a change of control of the company, stock options will immediately vest and become exercisable, and restricted stock units will immediately vest. | |
Termination, Death and Retirement: | Stock options and restricted stock units will be forfeited to the company if the non-employee director terminates service on the board prior to vesting at the next annual meeting date. The balance of any retainer due to the director in that quarter shall also be forfeited. If a non-employee director dies prior to the vesting of stock options or restricted stock units at the next annual meeting date, those stock awards shall fully vest as of the date of his or her death. |
27
Administration: | The compensation committee will administer the 2011 Directors Plan. The committee will have the full power to interpret its terms and formulate additional details and regulations to carry out the provisions of the Plan. | |
Amendments: | The compensation committee may amend, modify or terminate the 2011 Directors Plan at any time; however, no action may be taken by the compensation committee or the board of directors (except for Adjustments as referenced above) without the approval of the stockholders to: (1) Increase the number of shares that may be issued under the Plan; (2) Permit granting of stock options at less than fair market value; (3) Permit the repricing of outstanding stock options; or (4) Amend the maximum shares that may be granted as awards to any participant. |
28
29
Number of |
||||||||||||
Securities |
||||||||||||
Remaining |
||||||||||||
Available for |
||||||||||||
Number of |
Future Issuance |
|||||||||||
Securities to |
Under Equity |
|||||||||||
be Issued upon |
Weighted-Average |
Compensation |
||||||||||
Exercise of |
Exercise Price of |
Plans (Excluding |
||||||||||
Outstanding Options, |
Outstanding Options, |
Securities Reflected |
||||||||||
Warrants and Rights |
Warrants and Rights |
in Column (a)) |
||||||||||
Plan Category | (a) | (b)(1) | (c) | |||||||||
Equity compensation plans approved by security holders
|
73,533,931 | (2) | $ | 27.09 | 16,942,290 | (4)(5) | ||||||
Equity compensation plans not approved by security holders
|
5,666,111 | (3) | $ | 23.62 | | |||||||
Total
|
79,200,042 | $ | 26.82 | 16,942,290 |
(1) | Weighted-average term of outstanding options is 4.78 years. |
(2) | Includes 62,226,807 stock options, 9,607,129 restricted stock units, and 1,699,995 restricted stock units that have vested and been deferred. We granted these awards under the following active stockholder-approved plans: 2009 Stock Compensation Plan, 2006 Compensation Plan for Non-Employee Directors, and the Executive Incentive Plan; and the following stockholder-approved plans which have been discontinued: 1990 Stock Plan for Non-Employee Directors, Stock Option and Long-Term Incentive Plan of 1993, 1995 Salary Replacement Stock Option Plan, 1996 Compensation Plan for Non-Employee Directors, 1998 Senior Management Stock Plan, 2001 Compensation Plan for Non-Employee Directors, 2003 Stock Compensation Plan, 2005 Stock Compensation Plan, and 2007 Stock Compensation Plan. No future awards may be granted under any of the discontinued plans. |
(3) | Includes 5,320,535 stock options and 345,576 restricted stock units that have vested and been deferred. These awards include stock options granted to a broad group of employees in fiscal 2000 and 2002, and grants in lieu of salary increases and certain other compensation and benefits. We granted these awards under our 1998 Employee Stock Plan, which provided for the issuance of stock options, restricted stock and restricted stock units to attract and retain employees, and to align their interests with those of stockholders. We discontinued the 1998 Employee Stock Plan in September 2003, and no future awards may be granted under that plan. |
(4) | Includes stock options, restricted stock, restricted stock units, stock appreciation rights and performance awards that we may award under our 2009 Stock Compensation Plan, which had 16,688,862 shares available for grant at fiscal year end. Also includes stock options and restricted stock units that we may award under our 2006 Compensation Plan for Non-Employee Directors, which had 253,428 shares available for grant at fiscal year end. Excludes shares that would be available under the current Executive Incentive Plan, based on company and individual performance subject to certain limits. |
(5) | The table above shows our outstanding equity awards as of fiscal year end. After fiscal year end, the company issued equity awards to its employees based on fiscal 2011 performance. A total of 3,932,214 options and 2,571,432 restricted stock units were issued under the 2009 Stock Compensation Plan to approximately 2,800 employees. Both the options and the restricted stock units had a four-year cliff vesting schedule; a small percentage of these awards had a five-year cliff vesting schedule for added retention value. The awards reduced the number of shares currently available under the 2009 Stock |
30
Compensation Plan. As of July 28, 2011, our outstanding equity awards and shares currently available were as follows: |
| 28,829,502 options have been outstanding for longer than six years, with a weighted average price of $23.0483 and a weighted average remaining term of 2.09; of this total, 14,033,546 options will expire within 18 months of the 2011 Annual Meeting; | |
| 41,956,822 options have been outstanding for less than six years with a weighted average price of $30.4069 and a weighted average remaining term of 6.91 years; | |
| 9,541,533 unvested restricted stock units are outstanding, of which 166,617 units will vest shortly after the 2011 Annual Meeting; and | |
| 10,186,911 shares remain available for issuance under the 2009 Stock Compensation Plan. |
31
32
| Performance-based (at risk) compensation lower than last year, consistent with performance. Consistent with our pay-for-performance philosophy, the annual incentive payouts and long-term incentive awards granted to named executive officers for fiscal 2011 performance were slightly below the median range of potential payout opportunity, consistent with financial performance that fell slightly below the median performance range established for our Corporate Performance Measures. While competitive and appropriate for fiscal 2011 results, this performance-based compensation was lower than the amounts paid for superior performance in fiscal 2010. |
Year-Over-Year Change in CEO Annual Incentive Payouts
|
||||||||||||
Fiscal Year |
Annual Incentive Cash Portion ($) |
Annual Incentive Restricted Stock Unit Match Portion ($) |
Total Incentive Earned ($) |
FY11 vs FY10 (% change) |
||||||||
2011
|
1,695,135 | 498,370 | 2,193,505 | 17% | ||||||||
2010
|
1,926,622 | 728,263 | 2,654,885 | |||||||||
Year-Over-Year Change in CEO Stock Awards
|
|||||||||
Fiscal Year
|
Restricted Stock Units Granted (# of shares) |
Stock Options Granted (# of shares) |
FY11 vs FY10 (% change) |
||||||
2011
|
76,051 | 357,525 | 20% | ||||||
2010
|
91,468 | 457,340 | |||||||
| Base salaries increased, but are still conservative relative to compensation peer group. At the beginning of fiscal 2011, base salaries for named executive officers were increased to a more competitive level following the completion of a competitive market compensation assessment of our compensation peer group by the independent consultant, and a superior fiscal 2010 in terms of individual and company performance. Even with these increases, the base salaries of our named executive officers are positioned at or below the market median for our compensation peer group. When combined with performance-based compensation opportunities, the total compensation paid to our named executive officers will vary from lower quartile positioning for lower quartile performance to upper quartile positioning for upper quartile performance relative to the compensation peer group. |
33
Year-Over-Year Change in CEO Base Salary Earnings
|
||||||
Fiscal Year
|
Base Salary Earnings ($) |
FY11 vs FY10 (% change) |
||||
2011
|
1,059,883 | +9% | ||||
2010
|
973,042 | |||||
| 98.5% stockholder support for our executive compensation program. General Mills has a long-standing practice of engagement and open communication with investors. The board of directors enhanced this practice by voluntarily providing stockholders with an advisory vote on executive compensation at the 2010 Annual Meeting. 98.5% of votes cast by stockholders endorsed our executive compensation philosophy, policies and practices. | |
| More stringent stock ownership requirements. Management reviewed the stock ownership requirements that have been in place since 1991, and, with the compensation committees approval, updated the policy to reflect best practices while maintaining aggressive minimum holding requirements for our executives versus our consumer packaged goods industry peer group and the broader industry. Minimum ownership requirements remain at ten times salary for the chief executive officer and five times salary for other named executive officers. As of fiscal 2011, executives are no longer able to consider the after-tax value of vested, unexercised stock option gains in the overall computation of executive stock ownership. Direct and family-owned shares of stock, deferred stock units, unvested restricted stock units, and stock units in the General Mills 401(k) continue to be included in the computation. All named executive officers greatly exceed these minimum stock ownership requirements. | |
| Further elimination of executive medical benefit. As reported in last years Proxy Statement, the company closed executive medical coverage to new participants as of December 2009. During fiscal 2011, further action was taken to terminate all executive medical plan coverage for current executives by the end of calendar 2011, transitioning them into the medical coverage provided to all U.S. salaried employees. Affected executives received compensation payments as part of this transition, including the named executive officers whose payments are included in this years compensation table disclosures. | |
| Compensation decisions made within context of current and accumulated compensation. Consistent with past practice, management prepared a detailed analysis of all compensation and benefits paid and accumulated by the named executive officers, referred to as tally sheets. These tally sheets were provided for the compensation committees review at every meeting during the fiscal year, so all compensation decisions were made with an overall understanding of the entire rewards package. | |
| Compensation programs reviewed for potential risks. As described under The Boards Role in Risk Management, during fiscal 2011, the compensation committee reviewed managements assessment of compensation risk, which was conducted with guidance from the committees independent compensation consultant. The committee concluded that General Mills compensation policies and practices are aligned with the interests of stockholders, appropriately reward pay for performance, and do not create risks that are reasonably likely to have a material adverse effect on the company. |
34
| Pay is Performance Based: Executive compensation at General Mills is tightly linked to company performance. As executives assume greater responsibility, a larger portion of their total compensation becomes dependent on company, business unit, and individual performance. Base salaries are targeted at or below the median of salaries paid by U.S. companies in the consumer packaged goods industry peer group. Annual and long-term incentive programs are designed to build to a total compensation package that will vary from lower quartile positioning for lower quartile performance to upper quartile positioning for upper quartile performance relative to the industry peer group. | |
| Stock Ownership is Emphasized: Broad and deep employee stock ownership aligns the interests of employees with those of stockholders. Programs have been created to encourage employees to build and maintain an ownership interest in the company. We have established specific stock ownership policies for employees in key management positions throughout the company. | |
| Compensation Opportunities must be Competitive: Competition for management talent in the food and consumer packaged goods industry is consistently intense. To ensure that executive compensation at General Mills remains competitive, the compensation committee, with the assistance of management and the independent compensation consultant, monitors the compensation practices of peer food and consumer packaged goods companies, as well as those of a broader group of leading industrial companies. In performing these analyses, peer group proxy data and two major survey sources are utilized: |
| Consumer Packaged Goods Peer Group Proxy Analysis: The independent compensation consultant compares our pay practices and levels for named executive officers with those disclosed in the annual proxy statements of the 13 major U.S. consumer packaged goods companies that are part of the consumer packaged goods industry peer group. |
| Consumer Packaged Goods Peer Group Surveys: Management participates in annual surveys conducted by Aon Hewitt and Towers Watson which provide specifics on the pay practices of companies in the consumer packaged goods industry, with which we compare our financial performance and often compete for executive talent. |
| Branded consumer packaged goods companies; | |
| Food industry competitors; | |
| Large-cap companies, typically with annual revenues in excess of $5 billion; | |
| Companies with similar business dynamics and challenges; and | |
| Direct competitors for industry talent. |
35
Companies in the Consumer Packaged Goods Industry Peer
Group
|
||||||
Campbell Soup Co.
|
H. J. Heinz Co. | PepsiCo, Inc. | ||||
Clorox Co.
|
The Hershey Co. | The Procter & Gamble Co. | ||||
The
Coca-Cola
Co.
|
Kellogg Co. | Sara Lee Corp. | ||||
Colgate-Palmolive Co.
|
Kimberly-Clark Corp. | Unilever NV* | ||||
ConAgra Foods, Inc.
|
Kraft Foods Inc. | |||||
Danone Inc.*
|
Nestlé SA* | |||||
* | Excluded from compensation comparisons due to lack of publicly available pay information. |
Companies in the Consumer Packaged Goods Industry Peer
Group
Sales, Market Capitalization and Total Assets |
|||||||||
In Millions
|
Sales* |
Market Capitalization** |
Total Assets* | ||||||
75th Percentile
|
$51,365 | $95,721 | $69,345 | ||||||
Median
|
17,655 | 34,245 | 15,856 | ||||||
25th Percentile
|
10,718 | 12,149 | 9,766 | ||||||
General Mills
|
$14,880 | $25,334 | $18,675 | ||||||
| Why General Mills chooses to pay each element; | |
| What each element is designed to reward; and | |
| How we determine the amount for each element. |
36
Element
|
Objective & Basis
|
Market Positioning | ||||
Base Salary
|
To provide fixed income based on:
Size, scope and complexity of the individuals role
Individuals current and historical performance
Relative position compared to market pay information
|
Compensation Peer Group Median or Below |
||||
Annual Incentive
|
To provide focus and rewards for achievement of annual
corporate and individual performance:
Corporate Performance Measures (25% each) Net sales growth Segment operating profit growth Earnings per share growth Return on average total capital improvement Individual Performance Measures Specific business goals Strategic projects or initiatives Organizational/diversity goals Leadership behaviors and impact Officers below the named executive officer level who are in key divisional roles also have unit performance measures incorporated into their annual incentive. Awards are made in cash and restricted stock unit matches that require an equivalent deposit of personally-owned shares. The restricted stock unit match can increase or decrease by up to 30% based on corporate performance. |
Performance Based:
Awards range from below to above median of the compensation peer group based on individual and corporate performance
Awards are well above median of the compensation peer group when corporate performance ranks in the top quartile of our industry peer group
|
||||
Long-term
Incentive |
To provide incentive for delivering long-term stockholder value and to retain executives.
Awards are made in restricted stock unit grants and stock option grants. Awards can increase or decrease by up to 30% based on corporate performance. |
Performance Based:
Awards range from below to above median of the compensation peer group based on corporate performance
Grants are well above median of the compensation peer group when corporate performance ranks in the top quartile of the industry peer group
|
||||
37
Element
|
Objective & Basis
|
Market Positioning | ||||
Retirement and Health Benefits
|
To provide competitive retirement security and health benefits.
General Mills named executive officers participate in most of the same benefit plans made available to the companys U.S.-based employees. They include:
Disability and life insurance
Pension Plan and Supplemental Retirement Plan (a restoration plan)
401(k) Plan and Supplemental Savings Plan with a company match that varies based on corporate performance
The Supplemental Retirement Plan and Supplemental Savings Plan are restoration plans providing non-qualified benefits that are identical to the broad-based plans but on income above the limits imposed by the Internal Revenue Code under the qualified plans. For more information on our retirement benefits, see Pension Benefits and Other Retirement Savings Plans.
Named executive officers also participate in an executive insurance plan that provides health and dental benefits. As of December 2009, executive medical coverage was closed to new participants, and at the end of calendar year 2011, coverage will be terminated for all active employees.
|
Compensation Peer Group Median | ||||
Perquisites
|
To provide competitive executive perquisites.
All of our named executive officers receive the following perquisites:
Company provided automobile
Reimbursement for a limited amount of financial counseling
For reasons of security and efficient time management, the compensation committee encourages the Chief Executive Officer to utilize corporate aircraft for personal use. Mr. Powell is required to reimburse the company for the annual cost of any personal use of corporate aircraft in excess of $100,000. He did not exceed this limit in fiscal 2011.
|
Compensation Peer Group Median or Below | ||||
38
Performance-Based (At Risk) Compensation: 88%
|
Performance-Based (At Risk) Compensation: 80% |
Estimated Performance Relative To Industry Peer
Group
|
Corporate Performance Rating |
||
General Mills performance at the median of peer group results:
|
1.30 to 1.50 rating | ||
General Mills performance above peer group median:
|
1.51 to 1.80 rating | ||
General Mills performance below peer group median:
|
0.00 to 1.29 rating | ||
39
Corporate Performance Measures
(as adjusted for items affecting comparability*) |
Fiscal 2011 Performance Results* |
||
Net Sales Growth
|
+2% | ||
Segment Operating Profit Growth
|
+4% | ||
Earnings Per Share Growth
|
+8% | ||
Return on Average Total Capital Improvement
|
0 bps | ||
* | In order to ensure that our ongoing performance is evaluated in a manner that reflects the year-over-year growth in underlying results, the fiscal 2011 performance results reflect adjustments for certain items affecting comparability. Net sales growth for the purpose of our Corporate Performance Measures is adjusted to exclude foreign currency translation and the effects of acquisitions and divestitures. These adjustments did not change our net sales growth from the growth reported in our annual report on Form 10-K for the fiscal year ended May 29, 2011 (10-K). Adjusted earnings per share growth excludes the impact of mark-to-market valuation of certain commodity positions and grain inventories, the effects of court decisions on uncertain tax matters and an enactment date tax charge related to health care reform legislation. See page 37 of our 10-K for a discussion of this measure and segment operating profit, and a reconciliation to the results as reported in accordance with generally accepted accounting principles. Return on average total capital improvement (ROC) as reported on page 38 of our 10-K was -10 basis points (bps). For the purpose of our Corporate Performance Measures, ROC was adjusted to 0 bps to reflect the effect of a settlement with the Internal Revenue Service concerning certain income tax adjustments for fiscal years 2002 to 2008. |
40
41
The bar chart illustrates the potential variability in Mr. Powells total direct compensation, depending on company performance. Mr. Powells total direct compensation remained below median in comparison to our compensation peer group. See the discussion under CEO Performance and Compensation. |
* | Includes Mr. Powells Salary and Non-Equity Incentive Plan Compensation, as quantified in the Summary Compensation Table, and Value of Stock and Option Awards, as quantified in Total Direct Compensation Earned for Fiscal Year Performance. |
42
Annual Incentive Cash Portion
|
||||||||||||||||||
Annual
Incentive Cash |
= | Salary | × |
Base Incentive Rate* |
× |
Corporate Performance Rating |
× |
Individual Performance Rating |
||||||||||
Annual Incentive Restricted Stock Unit Match
Portion
|
||||||||||||||||||
Annual
Incentive RSU |
= |
Annual Incentive Cash |
× | 30% | × |
Corporate Performance Rating Adjustment |
¸ |
Stock Price on Grant Date |
||||||||||
43
| An increase in base salary to $1,115,000 effective August 1, 2011. | |
| An annual incentive payout of $1,695,135 in cash and a 13,394 restricted stock unit match requiring a deposit of an equivalent number of personally-owned shares. In contrast to fiscal 2010, when there was a 26% increase in grant size due to superior performance, there was a 2% decrease in grant size in fiscal 2011 based on the 1.28 Corporate Performance Rating, which is slightly below the 1.30 to 1.50 range of Corporate Performance Ratings associated with estimated median performance for the consumer packaged goods industry peer group. |
44
| An annual long-term incentive award comprised of 71,505 restricted stock units and 357,525 stock options, reflecting a 2% decrease based on the Corporate Performance Rating of 1.28. | |
| A special one-time restricted stock unit award of 4,546 shares in conjunction with the termination of the executive medical plan. |
Element |
Compensation Philosophy
Target Positioning |
Fiscal 2011 CEO Compensation Market Positioning |
||||
Base Salary
|
Compensation Peer Group Median
|
Base salary at approximately the 25th percentile of the compensation peer group | ||||
Annual Incentive
|
Performance Based:
Awards range from below to above median based on performance. Awards are well above median when corporate performance ranks in the top quartile. |
Including both the cash and restricted stock unit match portions of the annual incentive, award was slightly below the median for the compensation peer group
Fiscal 2011 performance slightly below the median for the consumer packaged goods industry peer group |
||||
Long-term Incentive
|
Performance Based:
Awards range from below to above median based on performance. Awards are well above median when corporate performance ranks in the top quartile. |
Long-term incentive award below the 25th percentile for the compensation peer group
Fiscal 2011 performance slightly below the median for the consumer packaged goods industry peer group |
||||
45
Stock Ownership for Named Executive Officers
|
|||||||||
Name
|
Base Salary Multiple Requirement |
Shares Owned |
Base Salary Multiple |
||||||
Kendall J. Powell
|
10x | 701,752 | 24x | ||||||
Chairman and CEO
|
|||||||||
Donal L. Mulligan
|
5x | 182,954 | 12x | ||||||
EVP, CFO
|
|||||||||
Ian R. Friendly
|
5x | 340,212 | 23x | ||||||
EVP, COO, U.S. Retail
|
|||||||||
Christopher D. OLeary
|
5x | 239,156 | 16x | ||||||
EVP, COO, International
|
|||||||||
Roderick A. Palmore
|
5x | 205,873 | 13x | ||||||
EVP, GC and Secretary
|
|||||||||
46
47
48
(1) | We awarded bonuses based on our achievement of certain performance goals established at the beginning of each fiscal year. Accordingly, bonuses are disclosed under the Non-Equity Incentive Plan Compensation column of this table. | |
(2) | Includes the grant date fair value of (a) restricted stock units granted during fiscal 2011 as annual and long-term incentive awards and (b) 4,546 restricted stock units granted to each named executive officer on April 26, 2011, vesting 100% on April 26, 2016. The latter awards approximate the actuarial present value of the executive medical plan benefit that is being terminated for active employees at the end of calendar 2011, as calculated by a third-party actuary. | |
Excludes awards based on fiscal 2011 performance but granted after fiscal year end in June 2011. These awards are captured within the subsequent table, Total Direct Compensation Earned for Fiscal Year Performance. | ||
Grant date fair value is calculated in accordance with FASB ASC Topic 718. For fiscal 2011, assumptions used to calculate these amounts are factored into Note 11 Stock Plans of the audited financial statements included in our annual report on Form 10-K for the fiscal year ended May 29, 2011. | ||
The grant date fair value of each stock award granted in fiscal 2011 equals the closing price of our common stock on the New York Stock Exchange on the grant date. The values shown have not been adjusted to reflect that these units are subject to forfeiture. | ||
(3) | Includes the grant date fair value of options granted during fiscal 2011. Excludes awards based on fiscal 2011 performance but granted after fiscal year end in June 2011. These awards are captured within the subsequent table, Total Direct Compensation Earned for Fiscal Year Performance. | |
The grant date fair value of options granted in fiscal 2011 equals $4.08 per share based on our previous Black-Scholes option pricing model. The following assumptions were used in the calculation: expected term of 8.5 years; dividend yield of 3.0% annually; a risk-free interest rate of 2.9%; and expected price volatility of 18.5%. The values shown have not been adjusted to reflect that these options are subject to forfeiture. |
(4) | Includes the cash portion of the annual incentive award paid to our named executive officers under the Executive Incentive Plan. The annual incentive award was paid partially in cash and partially in restricted stock units, and was based on the achievement of certain individual and corporate performance goals for each fiscal year. The total annual incentive award earned for fiscal 2011 performance is set forth below. For more information on how the annual incentive award is calculated, see the Compensation Discussion and Analysis. |
Non-Equity |
||||||||||||
Incentive |
||||||||||||
Plan |
Value of RSU |
|||||||||||
Compensation |
Match |
Total |
||||||||||
Name | ($) | ($) | ($) | |||||||||
K. J. Powell
|
1,695,135 | 498,370 | 2,193,505 | |||||||||
D. L. Mulligan
|
625,536 | 183,908 | 809,444 | |||||||||
I. R. Friendly
|
621,666 | 182,770 | 804,436 | |||||||||
C. D. OLeary
|
625,159 | 183,797 | 808,956 | |||||||||
R. A. Palmore
|
507,788 | 149,290 | 657,078 |
(5) | Includes the annual increase in the actuarial present value of accumulated benefits under our Pension Plan and Supplemental Retirement Plan. There were no above market or preferential earnings on deferred compensation. |
49
(6) | All Other Compensation for fiscal 2011 includes the following amounts: |
Matching |
||||||||||||||||
Contributions |
Perquisites |
|||||||||||||||
on |
and |
|||||||||||||||
Retirement |
Tax |
Other |
||||||||||||||
Savings |
Reimburse- |
Personal |
||||||||||||||
Plans(7) |
ments(8) |
Benefits(9) |
Total |
|||||||||||||
Name | ($) | ($) | ($) | ($) | ||||||||||||
K. J. Powell
|
102,736 | 7,932 | 168,977 | 279,645 | ||||||||||||
D. L. Mulligan
|
41,672 | 501 | 61,751 | 103,924 | ||||||||||||
I. R. Friendly
|
45,597 | 2,686 | 68,743 | 117,026 | ||||||||||||
C. D. OLeary
|
42,415 | 706 | 58,294 | 101,415 | ||||||||||||
R. A. Palmore
|
37,844 | 1,236 | 59,935 | 99,015 |
(7) | Includes the companys fixed and variable matching contributions during fiscal 2011 to the Deferred Compensation Plan, which are made as if the named executive officer contributed these amounts to the 401(k) Plan and the Supplemental Savings Plan. For more information on the terms of the matching contributions, see Other Retirement Savings Plans. |
Matching |
||||||||||||||||
Contributions |
||||||||||||||||
Matching |
Matching |
on |
||||||||||||||
Contributions |
Contributions |
Supplemental |
||||||||||||||
on |
on |
Savings |
||||||||||||||
Deferred |
401(k) Plan |
Plan |
||||||||||||||
Compensation |
Contributions |
Contributions |
Total |
|||||||||||||
Name | ($) | ($) | ($) | ($) | ||||||||||||
K. J. Powell
|
6,618 | 7,350 | 88,768 | 102,736 | ||||||||||||
D. L. Mulligan
|
10,521 | 7,846 | 23,305 | 41,672 | ||||||||||||
I. R. Friendly
|
7,519 | 7,710 | 30,368 | 45,597 | ||||||||||||
C. D. OLeary
|
| 7,855 | 34,560 | 42,415 | ||||||||||||
R. A. Palmore
|
| 7,466 | 30,378 | 37,844 |
(8) | Includes reimbursements for tax liabilities accrued as a result of (a) spousal travel to business functions and (b) the receipt of welcome gifts at business functions. These reimbursements are a broad-based benefit available to other employees. | |
(9) | Includes the following perquisites and other personal benefits for fiscal 2011: |
Executive |
||||||||||||||||||||||||
Personal |
Personal Use of |
Financial |
Insurance |
|||||||||||||||||||||
Travel(10) |
Executive
Car(11) |
Counseling |
Plans(12) |
Other(13) |
Total |
|||||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||
K. J. Powell
|
109,753 | 9,018 | 15,000 | 35,206 | | 168,977 | ||||||||||||||||||
D. L. Mulligan
|
1,753 | 15,010 | 9,450 | 35,206 | 332 | 61,751 | ||||||||||||||||||
I. R. Friendly
|
4,614 | 12,773 | 16,000 | 35,206 | 150 | 68,743 | ||||||||||||||||||
C. D. OLeary
|
1,834 | 13,254 | 8,000 | 35,206 | | 58,294 | ||||||||||||||||||
R. A. Palmore
|
3,734 | 12,745 | 8,000 | 35,206 | 250 | 59,935 |
(10) | Includes incremental cost of travel, food and activities related to spousal attendance at business functions. This is a broad-based benefit available to other employees. | |
Also includes the incremental cost of personal use of corporate aircraft. We valued the incremental cost using a method that takes into account aircraft fuel expenses per flight hour and engine maintenance expenses per flight hour attributable to personal use; and to the extent attributable to personal use, any |
50
landing and parking fees; flight planning expenses; crew travel expenses; supplies and catering; excise taxes; and customs, foreign permit and similar fees. | ||
We have an Aircraft Time Sharing Agreement with Mr. Powell and a related policy that requires him to reimburse us for personal use of corporate aircraft to the extent that the cost of his personal use exceeds $100,000 in any fiscal year. | ||
(11) | Includes the annual taxable value of the vehicle according to Internal Revenue Service regulations plus the applicable Internal Revenue Service rate per mile to cover fuel and maintenance charges. | |
(12) | Includes premiums paid for executive medical coverage that exceed the cost of medical coverage made available to most full-time employees based in the United States. Effective in December 2009, executive medical coverage was closed to new participants, and at the end of calendar year 2011, coverage will be terminated for all active employees. | |
(13) | Includes the nominal cost of welcome gifts received at business functions. This is a broad-based benefit available to other employees. |
51
Estimated Possible Payouts |
All Other |
All Other |
||||||||||||||||||||||||||||
Under Non-Equity |
Stock |
Option |
||||||||||||||||||||||||||||
Incentive Plan Awards |
Awards: |
Awards: |
Grant Date |
|||||||||||||||||||||||||||
Significantly |
Number of |
Number of |
Exercise or |
Fair Value |
||||||||||||||||||||||||||
Below Intended |
Superior |
Shares of |
Securities |
Base Price |
of Stock |
|||||||||||||||||||||||||
Performance |
Performance |
Stock or |
Underlying |
of Option |
and Option |
|||||||||||||||||||||||||
1.00 |
1.80 |
Units |
Options |
Awards |
Awards |
|||||||||||||||||||||||||
Name | Grant Date | Award Type | ($) | ($) | (#) | (#) | ($/Sh) | ($) | ||||||||||||||||||||||
K. J. Powell
|
6/28/2010 | (1) | Cash | 1,261,261 | 2,432,432 | | | | | |||||||||||||||||||||
6/28/2010 | (2) | RSU | | | 19,473 | | | 728,290 | ||||||||||||||||||||||
6/28/2010 | (3) | RSU | | | 91,468 | | | 3,420,903 | ||||||||||||||||||||||
6/28/2010 | (4) | Options | | | | 457,340 | 37.40 | 1,865,947 | ||||||||||||||||||||||
4/26/2011 | (5) | Special RSU | | | 4,546 | | | 174,976 | ||||||||||||||||||||||
D. L. Mulligan
|
6/28/2010 | (1) | Cash | 456,120 | 879,660 | | | | | |||||||||||||||||||||
6/28/2010 | (2) | RSU | | | 7,090 | | | 265,166 | ||||||||||||||||||||||
6/28/2010 | (3) | RSU | | | 25,268 | | | 945,023 | ||||||||||||||||||||||
6/28/2010 | (4) | Options | | | | 126,337 | 37.40 | 515,455 | ||||||||||||||||||||||
4/26/2011 | (5) | Special RSU | | | 4,546 | | | 174,976 | ||||||||||||||||||||||
I. R. Friendly
|
6/28/2010 | (1) | Cash | 465,718 | 898,170 | | | | | |||||||||||||||||||||
6/28/2010 | (2) | RSU | | | 6,945 | | | 259,743 | ||||||||||||||||||||||
6/28/2010 | (3) | RSU | | | 25,268 | | | 945,023 | ||||||||||||||||||||||
6/28/2010 | (4) | Options | | | | 126,337 | 37.40 | 515,455 | ||||||||||||||||||||||
4/26/2011 | (5) | Special RSU | | | 4,546 | | | 174,976 | ||||||||||||||||||||||
C. D. OLeary
|
6/28/2010 | (1) | Cash | 455,845 | 879,130 | | | | | |||||||||||||||||||||
6/28/2010 | (2) | RSU | | | 6,630 | | | 247,962 | ||||||||||||||||||||||
6/28/2010 | (3) | RSU | | | 25,268 | | | 945,023 | ||||||||||||||||||||||
6/28/2010 | (4) | Options | | | | 126,337 | 37.40 | 515,455 | ||||||||||||||||||||||
4/26/2011 | (5) | Special RSU | | | 4,546 | | | 174,976 | ||||||||||||||||||||||
R. A. Palmore
|
6/28/2010 | (1) | Cash | 370,262 | 714,077 | | | | | |||||||||||||||||||||
6/28/2010 | (2) | RSU | | | 6,747 | | | 252,338 | ||||||||||||||||||||||
6/28/2010 | (3) | RSU | | | 27,796 | | | 1,039,570 | ||||||||||||||||||||||
6/28/2010 | (4) | Options | | | | 46,324 | 37.40 | 189,002 | ||||||||||||||||||||||
4/26/2011 | (5) | Special RSU | | | 4,546 | | | 174,976 |
(1) | Range of Annual Incentive Cash Awards for Fiscal 2011 Performance. Includes payouts of annual cash incentive awards for significantly below intended performance and superior performance in fiscal 2011 under the Executive Incentive Plan. Actual payouts are described in the Summary Compensation Table. | |
There is no specific target level of performance under our performance-based compensation plans, but a range of performance goals that correspond to a range of compensation payouts. Significantly below intended performance payout assumes performance at the bottom end of the median range in relation to the consumer packaged goods industry peer group, which translates to a Corporate Performance Rating of 1.00 and an Individual Performance Rating of 1.40. Maximum payout assumes superior performance, which translates to a Corporate Performance Rating of 1.80 and an Individual Performance Rating of 1.50. There is no minimum payout. However, if performance fell below the levels established for the 1.00 Corporate Performance Rating, total direct compensation similarly would fall below the level indicated in |
52
the above table, and long-term incentive award values would likely not deliver the estimated grant values. For more information on how incentive awards are calculated based on performance ratings, see the Compensation Discussion and Analysis. | ||
(2) | Restricted Stock Unit Matches for Fiscal 2010 Performance. Includes restricted stock units earned in fiscal 2010 but granted in fiscal 2011 under the Executive Incentive Plan. To be eligible to receive these restricted stock units, each named executive officer must put an equal number of personally-owned shares of General Mills stock on deposit until the end of the restriction period in order for the restricted stock units to vest. | |
(3) | Long-Term Incentive Restricted Stock Unit Awards for Fiscal 2010 Performance. Includes restricted stock units earned in fiscal 2010 but granted in fiscal 2011 under the 2009 Stock Compensation Plan. | |
(4) | Long-Term Incentive Option Awards for Fiscal 2010 Performance. Includes options earned in fiscal 2010 but granted in fiscal 2011 under the 2009 Stock Compensation Plan. | |
(5) | Special Awards. Includes 4,546 restricted stock units granted under the 2009 Stock Compensation Plan to each named executive officer on April 26, 2011, vesting 100% on April 26, 2016. These awards approximate the actuarial present value of the executive medical plan benefit that is being terminated for active employees at the end of calendar 2011, as calculated by a third-party actuary. |
Option Awards(2) | Stock Awards(2) | |||||||||||||||||||||||||||
Number of |
||||||||||||||||||||||||||||
Shares or |
Market Value |
|||||||||||||||||||||||||||
Number of Securities |
Units of |
of Shares or |
||||||||||||||||||||||||||
Underlying Unexercised |
Option |
Stock |
Units of Stock |
|||||||||||||||||||||||||
Options |
Exercise |
Option |
That Have |
That Have |
||||||||||||||||||||||||
(#) |
Price |
Expiration |
Not Vested |
Not Vested(3) |
||||||||||||||||||||||||
Name | Vesting Date(1) | Exercisable | Unexercisable | ($) | Date | (#) | ($) | |||||||||||||||||||||
K. J. Powell
|
6/25/2011 | | | | | 17,552 | 689,618 | |||||||||||||||||||||
6/25/2011 | | | | | 26,000 | 1,021,540 | ||||||||||||||||||||||
6/23/2012 | | | | | 20,608 | 809,688 | ||||||||||||||||||||||
6/23/2012 | | | | | 96,760 | 3,801,700 | ||||||||||||||||||||||
6/29/2013 | | | | | 26,076 | 1,024,526 | ||||||||||||||||||||||
6/29/2013 | | | | | 107,324 | 4,216,760 | ||||||||||||||||||||||
6/28/2014 | | | | | 19,473 | 765,094 | ||||||||||||||||||||||
6/28/2014 | | | | | 91,468 | 3,593,778 | ||||||||||||||||||||||
4/26/2016 | * | | | | | 4,546 | 178,612 | |||||||||||||||||||||
12/17/2005 | 125,800 | | 24.81 | 1/17/2012 | | | ||||||||||||||||||||||
12/16/2006 | 120,600 | | 21.93 | 1/16/2013 | | | ||||||||||||||||||||||
12/15/2007 | 111,188 | | 23.06 | 1/15/2014 | | | ||||||||||||||||||||||
12/13/2008 | 206,250 | | 23.49 | 1/13/2015 | | | ||||||||||||||||||||||
6/26/2010 | 312,250 | | 25.63 | 7/26/2016 | | | ||||||||||||||||||||||
6/25/2011 | | 325,000 | 29.40 | 7/25/2017 | | | ||||||||||||||||||||||
6/23/2012 | | 483,788 | 31.70 | 7/23/2018 | | |
53
Option Awards(2) | Stock Awards(2) | |||||||||||||||||||||||||||
Number of |
||||||||||||||||||||||||||||
Shares or |
Market Value |
|||||||||||||||||||||||||||
Number of Securities |
Units of |
of Shares or |
||||||||||||||||||||||||||
Underlying Unexercised |
Option |
Stock |
Units of Stock |
|||||||||||||||||||||||||
Options |
Exercise |
Option |
That Have |
That Have |
||||||||||||||||||||||||
(#) |
Price |
Expiration |
Not Vested |
Not Vested(3) |
||||||||||||||||||||||||
Name | Vesting Date(1) | Exercisable | Unexercisable | ($) | Date | (#) | ($) | |||||||||||||||||||||
6/29/2013 | | 536,612 | 27.92 | 7/29/2019 | | | ||||||||||||||||||||||
6/28/2014 | | 457,340 | 37.40 | 7/28/2020 | | | ||||||||||||||||||||||
D. L. Mulligan
|
6/25/2011 | | | | | 3,888 | 152,760 | |||||||||||||||||||||
6/25/2011 | | | | | 5,200 | 204,308 | ||||||||||||||||||||||
7/17/2011 | * | | | | | 30,000 | 1,178,700 | |||||||||||||||||||||
6/23/2012 | | | | | 21,768 | 855,265 | ||||||||||||||||||||||
6/23/2012 | | | | | 7,196 | 282,731 | ||||||||||||||||||||||
6/29/2013 | | | | | 9,332 | 366,654 | ||||||||||||||||||||||
6/29/2013 | | | | | 24,148 | 948,775 | ||||||||||||||||||||||
6/28/2014 | | | | | 7,090 | 278,566 | ||||||||||||||||||||||
6/28/2014 | | | | | 25,268 | 992,780 | ||||||||||||||||||||||
4/26/2016 | * | | | | | 4,546 | 178,612 | |||||||||||||||||||||
12/16/2006 | 35,400 | | 21.93 | 1/16/2013 | | | ||||||||||||||||||||||
12/16/2006 | 6,600 | | 21.93 | 1/16/2013 | | | ||||||||||||||||||||||
12/15/2007 | 36,376 | | 23.06 | 1/15/2014 | | | ||||||||||||||||||||||
12/15/2007 | 2,400 | | 23.06 | 1/15/2014 | | | ||||||||||||||||||||||
12/13/2008 | 34,650 | | 23.49 | 1/13/2015 | | | ||||||||||||||||||||||
6/26/2010 | 60,000 | | 25.63 | 7/26/2016 | | | ||||||||||||||||||||||
6/25/2011 | | 62,400 | 29.40 | 7/25/2017 | | | ||||||||||||||||||||||
6/23/2012 | | 108,840 | 31.70 | 7/23/2018 | | | ||||||||||||||||||||||
6/29/2013 | | 120,722 | 27.92 | 7/29/2019 | | | ||||||||||||||||||||||
6/28/2014 | | 126,337 | 37.40 | 7/28/2020 | | | ||||||||||||||||||||||
I. R. Friendly
|
6/25/2011 | | | | | 11,040 | 433,762 | |||||||||||||||||||||
6/25/2011 | | | | | 15,600 | 612,924 | ||||||||||||||||||||||
6/23/2012 | | | | | 25,396 | 997,809 | ||||||||||||||||||||||
6/23/2012 | | | | | 8,180 | 321,392 | ||||||||||||||||||||||
6/29/2013 | | | | | 9,320 | 366,183 | ||||||||||||||||||||||
6/29/2013 | | | | | 28,168 | 1,106,721 | ||||||||||||||||||||||
4/1/2015 | * | | | | | 20,000 | 785,800 | |||||||||||||||||||||
6/28/2014 | | | | | 6,945 | 272,869 | ||||||||||||||||||||||
6/28/2014 | | | | | 25,268 | 992,780 | ||||||||||||||||||||||
4/26/2016 | * | | | | | 4,546 | 178,612 | |||||||||||||||||||||
12/16/2006 | 128,000 | | 21.93 | 1/16/2013 | | | ||||||||||||||||||||||
12/15/2007 | 120,000 | | 23.06 | 1/15/2014 | | | ||||||||||||||||||||||
12/13/2008 | 115,500 | | 23.49 | 1/13/2015 | | | ||||||||||||||||||||||
6/26/2010 | 187,500 | | 25.63 | 7/26/2016 | | | ||||||||||||||||||||||
6/25/2011 | | 195,000 | 29.40 | 7/25/2017 | | | ||||||||||||||||||||||
6/23/2012 | | 126,976 | 31.70 | 7/23/2018 | | | ||||||||||||||||||||||
6/29/2013 | | 140,840 | 27.92 | 7/29/2019 | | | ||||||||||||||||||||||
6/28/2014 | | 126,337 | 37.40 | 7/28/2020 | | |
54
Option Awards(2) | Stock Awards(2) | |||||||||||||||||||||||||||
Number of |
||||||||||||||||||||||||||||
Shares or |
Market Value |
|||||||||||||||||||||||||||
Number of Securities |
Units of |
of Shares or |
||||||||||||||||||||||||||
Underlying Unexercised |
Option |
Stock |
Units of Stock |
|||||||||||||||||||||||||
Options |
Exercise |
Option |
That Have |
That Have |
||||||||||||||||||||||||
(#) |
Price |
Expiration |
Not Vested |
Not Vested(3) |
||||||||||||||||||||||||
Name | Vesting Date(1) | Exercisable | Unexercisable | ($) | Date | (#) | ($) | |||||||||||||||||||||
C. D. OLeary
|
6/25/2011 | | | | | 15,600 | 612,924 | |||||||||||||||||||||
6/25/2011 | | | | | 7,952 | 312,434 | ||||||||||||||||||||||
6/23/2012 | | | | | 25,396 | 997,809 | ||||||||||||||||||||||
6/23/2012 | | | | | 7,852 | 308,505 | ||||||||||||||||||||||
6/29/2013 | | | | | 8,896 | 349,524 | ||||||||||||||||||||||
6/29/2013 | | | | | 28,168 | 1,106,721 | ||||||||||||||||||||||
4/1/2015 | * | | | | | 20,000 | 785,800 | |||||||||||||||||||||
6/28/2014 | | | | | 6,630 | 260,493 | ||||||||||||||||||||||
6/28/2014 | | | | | 25,268 | 992,780 | ||||||||||||||||||||||
4/26/2016 | * | | | | | 4,546 | 178,612 | |||||||||||||||||||||
12/17/2005 | 80,000 | | 24.81 | 1/17/2012 | | | ||||||||||||||||||||||
12/16/2006 | 128,000 | | 21.93 | 1/16/2013 | | | ||||||||||||||||||||||
12/15/2007 | 120,000 | | 23.06 | 1/15/2014 | | | ||||||||||||||||||||||
12/13/2008 | 105,600 | | 23.49 | 1/13/2015 | | | ||||||||||||||||||||||
6/26/2010 | 187,500 | | 25.63 | 7/26/2016 | | | ||||||||||||||||||||||
6/25/2011 | | 195,000 | 29.40 | 7/25/2017 | | | ||||||||||||||||||||||
6/23/2012 | | 126,976 | 31.70 | 7/23/2018 | | | ||||||||||||||||||||||
6/29/2013 | | 140,840 | 27.92 | 7/29/2019 | | | ||||||||||||||||||||||
6/28/2014 | | 126,337 | 37.40 | 7/28/2020 | | | ||||||||||||||||||||||
R. A. Palmore
|
2/11/2012 | | | | | 40,000 | 1,571,600 | |||||||||||||||||||||
6/23/2012 | | | | | 5,540 | 217,667 | ||||||||||||||||||||||
6/23/2012 | | | | | 22,556 | 886,225 | ||||||||||||||||||||||
6/29/2013 | | | | | 9,012 | 354,081 | ||||||||||||||||||||||
6/29/2013 | | | | | 37,528 | 1,474,475 | ||||||||||||||||||||||
6/28/2014 | | | | | 27,796 | 1,092,105 | ||||||||||||||||||||||
6/28/2014 | | | | | 6,747 | 265,090 | ||||||||||||||||||||||
4/26/2016 | * | | | | | 4,546 | 178,612 | |||||||||||||||||||||
6/23/2012 | | 112,776 | 31.70 | 7/23/2018 | | | ||||||||||||||||||||||
6/29/2013 | | 62,544 | 27.92 | 7/29/2019 | | | ||||||||||||||||||||||
6/28/2014 | | 46,324 | 37.40 | 7/28/2020 | | |
(1) | Options and restricted stock units vest 100% four years after the grant date, except that the asterisked awards vest 100% five years after the grant date. | |
(2) | Excludes incentive awards earned in fiscal 2011 but granted in fiscal 2012. | |
(3) | Market value of unvested restricted stock units equals the closing price of our common stock on the New York Stock Exchange at fiscal year end ($39.29) multiplied by the number of units. |
55
Option Awards | Stock Awards | |||||||||||||||
Number of |
Number of |
|||||||||||||||
Shares |
Value |
Shares |
Value |
|||||||||||||
Acquired on |
Realized on |
Acquired on |
Realized on |
|||||||||||||
Exercise |
Exercise(1) |
Vesting(2) |
Vesting(3) |
|||||||||||||
Name | (#) | ($) | (#) | ($) | ||||||||||||
K. J. Powell
|
187,272 | 2,984,485 | 35,586 | 1,328,781 | ||||||||||||
D. L. Mulligan
|
40,000 | 567,800 | 8,542 | 318,958 | ||||||||||||
I. R. Friendly
|
160,000 | 2,038,550 | 21,712 | 810,726 | ||||||||||||
C. D. OLeary
|
249,760 | 3,917,962 | 20,290 | 757,629 | ||||||||||||
R. A. Palmore
|
| | | |
(1) | Value realized equals the closing price of our common stock on the New York Stock Exchange on the exercise date, less the exercise price, multiplied by the number of shares exercised. | |
(2) | Mr. Friendly deferred all shares acquired on vesting of his stock awards. For more information on the terms of deferral, see Nonqualified Deferred Compensation. | |
(3) | Value realized equals the closing price of our common stock on the New York Stock Exchange on the vesting date multiplied by the number of restricted stock units vested. |
| The General Mills Pension Plan (Pension Plan) is a tax-qualified plan available generally to non-union employees in the United States that provides benefits based on a formula that yields an annual amount payable over the participants life. | |
| The Supplemental Retirement Plan of General Mills, Inc. (Supplemental Retirement Plan) provides benefits based on the Pension Plan formula in excess of the Internal Revenue Code limits placed on annual benefit amounts and annual compensation under the Pension Plan. The Supplemental Retirement Plan also provides benefits based on the Pension Plan formula that is attributable to deferred compensation. |
Present Value of |
Payments |
|||||||||||||
Number of Years |
Accumulated |
During Last |
||||||||||||
Credited
Service(1) |
Benefit(2) |
Fiscal
Year(3) |
||||||||||||
Name | Plan Name | (#) | ($) | ($) | ||||||||||
K. J.
Powell(4)
|
Pension Plan | 31.7823 | 1,116,154 | | ||||||||||
Supplemental Retirement Plan | 31.7823 | 10,811,234 | | |||||||||||
D. L.
Mulligan(5)
|
Pension Plan | 12.7500 | 330,240 | | ||||||||||
Supplemental Retirement Plan | 12.7500 | 1,025,739 | | |||||||||||
I. R.
Friendly(6)
|
Pension Plan | 27.9861 | 745,813 | | ||||||||||
Supplemental Retirement Plan | 27.9861 | 3,172,022 | | |||||||||||
C. D.
OLeary(5)
|
Pension Plan | 13.5000 | 380,697 | | ||||||||||
Supplemental Retirement Plan | 13.5000 | 1,466,943 | | |||||||||||
R. A. Palmore(5)
|
Pension Plan | 3.3036 | 152,841 | | ||||||||||
Supplemental Retirement Plan | 3.3036 | 464,858 | |
(1) | Number of years of credited service equals number of years of actual service. |
56
(2) | Actuarial present value is based on assumptions and methods used to calculate the benefit obligation under standards established by the Financial Accounting Standards Board, including: |
| Discount rate equals 5.45% as of the end of fiscal 2011; | |
| Mortality rates based on the RP2000 Combined Healthy Mortality Table, projected to 2011 with Scale AA (post-retirement decrement only); | |
| Single life annuity payments; | |
| Age 62 (unreduced benefit retirement age), discounted to current age; and | |
| No pre-retirement decrements or future increases in pay, service or legislated limits. |
(3) | In accordance with Section 409A of the Internal Revenue Code, key employees, including the named executive officers, must wait six months from their termination date to begin payment of any Supplemental Retirement Plan benefit accrued after December 31, 2004 and to receive a distribution of their Supplemental Savings Plan account. | |
(4) | Named executive officer is eligible for early retirement under both the Pension Plan and the Supplemental Retirement Plan. | |
(5) | Named executive officer is not eligible for early retirement. | |
(6) | Named executive officer is not eligible for early retirement but currently qualifies for enhanced early retirement reductions under the Rule of 70, as described below, under both the Pension Plan and the Supplemental Retirement Plan. |
57
58
Executive |
Registrant |
Aggregate |
Aggregate |
Aggregate |
||||||||||||||||
Contributions |
Contributions |
Earnings |
Withdrawals/ |
Balance at |
||||||||||||||||
in Last
FY(1) |
in Last
FY(2) |
in Last FY |
Distributions(3) |
Last FYE |
||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
K. J. Powell
|
220,600 | 11,819 | 44,414 | 161,461 | 667,429 | |||||||||||||||
D. L. Mulligan
|
350,700 | 19,341 | 477,623 | | 2,179,732 | |||||||||||||||
I. R. Friendly
|
790,675 | 12,997 | 603,084 | 125,562 | 4,874,163 | |||||||||||||||
C. D. OLeary
|
| | | | | |||||||||||||||
R.A. Palmore
|
| | | | |
(1) | $220,600 of Mr. Powells contributions has been disclosed as base salary for fiscal 2011 in the Summary Compensation Table. Non-equity incentive awards reported in the Summary Compensation Table are deferred after fiscal year-end and do not appear in this column. | |
(2) | $6,618 of the registrants contributions for Mr. Powell, $10,521 of contributions for Mr. Mulligan and $7,519 of contributions for Mr. Friendly are included in their fiscal 2011 compensation in the Summary Compensation Table. The balance of the contributions were earned and included in prior fiscal years. | |
(3) | Includes dividends distributed on deferred stock units, in addition to any other withdrawals and distributions. |
59
Restricted Stock |
||||
Nature of Termination | Units | Stock Options | ||
Voluntary
|
Forfeit | Forfeit | ||
Involuntary for Cause
|
Forfeit | Forfeit | ||
Involuntary without Cause where Age + Years of Service < 70 Years | Fully vest | Fully vest for shorter of remainder of option term or one year, then forfeited | ||
Involuntary without Cause where Age + Years of Service ³ 70 Years | Fully vest | Normal vesting continues | ||
Retirement Normal and Early
|
Fully vest | Normal vesting continues | ||
Death
|
Fully vest | Fully vest | ||
Change of Control
|
Pre-June 2008 Fully vest | Pre-June 2008 Fully vest for one year, then revert to normal vesting; then if terminated within two years of change of control, fully vest for six months, then forfeited | ||
Post-June 2008 Double- trigger vesting |
Post-June 2008 Fully vest for one year, subject to double-trigger vesting |
60
| Certain acquisitions of 20% or more of the voting power of securities entitled to vote in the election of directors; | |
| Changes in a majority of the incumbent directors (incumbent directors include directors approved by a majority of the incumbents); | |
| Certain reorganizations, mergers, asset sales or other transactions that result in existing stockholders owning less than 60% of the companys outstanding voting securities; or | |
| A complete liquidation of the company. |
| Material diminishment of the executives position, authority, duties or responsibilities; | |
| Decrease in base salary, annual bonus and/or long-term incentive opportunity; | |
| Certain required relocations; or | |
| Failure to bind successors to the Severance Plan. |
61
Involuntary |
Change of |
|||||||
Not For Cause |
Control under |
|||||||
Benefit or Payment | Retirement | Termination | Death | Severance Plan | ||||
Prorated Bonus
|
Yes | Yes | Yes | Yes | ||||
Accrued Vacation Pay
|
Yes | Yes | Yes | Yes | ||||
Deferred Compensation Plan Contributions and Earnings
|
Yes | Yes | Yes |
Yes |
||||
Vested Benefits in the Pension Plan and Supplemental Retirement
Plan(1)
|
Yes | Yes | Yes | Yes | ||||
Vesting of Unvested Restricted Stock
Units(2)
|
Immediate | Immediate | Immediate |
Double Trigger for Post-June 2008 Grants |
||||
Vesting of Unvested Stock
Options(3)
|
Continued | Rule of 70 | Immediate |
Double Trigger for Post-June 2008 Grants |
||||
Medical
Benefits(4)
|
Continued | Continued 2 yrs | No | Continued 2 yrs | ||||
Spouse/Dependent Medical
Benefits(4)
|
Continued | Continued 2 yrs | Continued 6 mos | Continued 2 yrs | ||||
Pay Continuance
|
No |
2 Years Salary & Bonus |
No |
2 Years Salary & Bonus |
||||
Additional Pension
Benefit(5)
|
No | Rule of 75/Age 55+ | No | Rule of 75/Age 55+ | ||||
Outplacement Assistance
|
No | Yes | No | Yes | ||||
Financial
Counseling(6)
|
Yes | Rule of 70 | Yes | Rule of 70 | ||||
Company Car Purchase Option
|
Yes | Yes | No | No | ||||
Executive Survivor Income
Plan(7)
|
No | No | Yes | No | ||||
Office Space and Administrative Assistant
|
CEO Only | No | No | No | ||||
Excise Tax &
Gross-Up
|
No | No | No | Conditional |
(1) | None of the named executive officers except Mr. Powell was eligible for early retirement as of the last business day of fiscal 2011. | |
(2) | For vesting of unvested restricted stock units, the values included in the table below are based on the number of restricted stock units that would have vested if termination occurred on the last business day of fiscal 2011, multiplied by the closing price of our common stock on the New York Stock Exchange as of that date ($39.29). | |
(3) | For vesting of unvested stock options, the values included in the table below are based on the number of options that would have vested if termination occurred on the last business day of fiscal 2011, multiplied by the difference between the exercise price and the closing price of our common stock on the New York Stock Exchange as of that date ($39.29). | |
(4) | The values included in the table below assume that a retirement eligible officer, spouse and dependents will rely on retiree medical benefits if the officer is involuntarily terminated or terminated in connection |
62
with a change of control, and that the officers spouse and dependents will continue to rely on these benefits upon the officers death. Non-retirement eligible executives receive up to two years continued coverage if they are involuntarily terminated or terminated in connection with a change of control. | ||
(5) | Under the Rule of 75, if the sum of a named executive officers age and years of service is equal to or exceeds 75 and the officer is involuntarily terminated before early retirement eligibility, he or she receives a supplemental retirement benefit equal to the difference between the officers vested deferred pension benefit and a benefit determined under the early retirement provisions of the Pension Plan. Mr. Friendly was eligible for this benefit as of the last business day of fiscal 2011. | |
Under the Separation Pay and Benefits Program for Officers, if a participating officer is at least 55 years old on the date of an involuntary not for cause termination but is not yet fully vested in his or her pension benefits, then the Program provides for immediate vesting of pension benefits. This provision does not increase the benefits accrued under the Pension Plan. Mr. Palmore was eligible for this benefit as of the last business day of fiscal 2011. | ||
(6) | In cases of involuntary termination, one year of financial counseling is only available if the named executive officer is also retirement eligible, or if the named executive officers age plus years of service is equal to or exceeds 70. Of the named executive officers, only Mr. Powell and Mr. Friendly qualified as of the last business day of fiscal 2011. It is also available to a named executive officers spouse upon the officers death, whether or not the officer was retirement eligible. | |
(7) | No new participants have been accepted into the Executive Survivor Income Plan since September 1, 2000. All of the named executive officers except Mr. Mulligan and Mr. Palmore participate in the Plan, though executives such as Mr. Powell, who are early retirement eligible with long service, have de minimis benefits. |
Involuntary |
||||||||||||||||
Not For Cause |
Change of |
|||||||||||||||
Retirement |
Termination |
Death |
Control |
|||||||||||||
Name | ($) | ($) | ($) | ($) | ||||||||||||
K. J. Powell
|
18,290,721 | 24,135,532 | 30,681,077 | 38,167,392 | ||||||||||||
D. L. Mulligan
|
| 11,033,147 | 8,528,565 | 12,988,077 | ||||||||||||
I. R. Friendly
|
| 10,491,049 | 12,329,826 | 15,224,450 | ||||||||||||
C. D. OLeary
|
| 13,162,163 | 13,715,163 | 13,176,742 | ||||||||||||
R. A. Palmore
|
| 10,902,729 | 7,728,987 | 12,914,456 |
63
| Compensation should be tightly linked to company performance, with base salaries that are at or below the compensation peer group median and performance-based (at risk) compensation that varies significantly with company performance; | |
| Broad and deep stock ownership best aligns the interests of management with those of our investors; and | |
| Compensation must be competitive in order to attract and retain superior leaders who are consistently able to achieve corporate performance that is in the top tier of the consumer packaged goods industry. |
64
65
66
Fiscal Year |
||||||||
(In thousands) | ||||||||
2011 | 2010 | |||||||
Audit Fees
|
$ | 5,623 | $ | 4,868 | ||||
Audit-Related
Fees(1)
|
1,405 | 665 | ||||||
Tax
Fees(2)
|
67 | 78 | ||||||
All Other Fees
|
| | ||||||
Total
Fees(3)
|
$ | 7,095 | $ | 5,611 | ||||
(1) | Includes audit services for benefit plans and the General Mills Foundation, and due diligence services. | |
(2) | Includes expatriate tax services, tax return preparation, planning and compliance filings. | |
(3) | The increase in fees in fiscal 2011 was primarily related to due diligence for the Yoplait acquisition and changes in the timing of billings. |
67
Q. | How do I attend the 2011 Annual Meeting? What do I need to bring? | |
A. | To attend the 2011 Annual Meeting, you will need to bring an admission ticket, and you may be asked to provide valid photo identification. |
| If you are a registered stockholder, the top half of your proxy card or your Notice of Internet Availability of Proxy Materials is your admission ticket. | |
| If you hold your shares through a broker or otherwise in street name, please bring a copy of the Notice of Internet Availability of Proxy Materials or voting instruction form received from your broker, a brokerage statement reflecting ownership as of the record date July 28, 2011, a letter from your broker, or other evidence of General Mills stock ownership as of the record date. | |
| If you are an employee, you can show your employee badge. | |
| If you received your notice of the 2011 Annual Meeting by e-mail, you can print your e-mail. | |
| You can print an admission ticket by at www.proxyvote.com. You will need the 12-digit control number printed on your Notice of Internet Availability of Proxy Materials or your proxy card. |
If you are not a record date stockholder, you will be admitted to the 2011 Annual Meeting only if you have a legal proxy from a record date stockholder. | ||
Please note that cameras, recording equipment and other similar electronic devices, large bags and packages will not be allowed into the meeting and will need to be checked at the door. | ||
Q. | How do I receive a printed copy of proxy materials? | |
A. | To request a printed copy of the proxy materials, please call 800-579-1639, e-mail sendmaterial@proxyvote.com or visit www.proxyvote.com. To make your request, you will need the 12-digit control number printed on your Notice of Internet Availability of Proxy Materials or your proxy card. |
Q. | Who is entitled to vote? |
A. | Record holders of General Mills common stock at the close of business on July 28, 2011 may vote at the 2011 Annual Meeting. On July 28, 2011, 646,597,602 shares of common stock were outstanding and eligible to vote. The shares of common stock in our treasury on that date will not be voted. |
Q. | How do I vote? |
A. | If your shares are held in a brokerage account in your brokers name (street name), you should follow the voting directions provided by your broker or nominee. You may complete and mail a voting instruction card to your broker or nominee or, if your broker allows, submit voting instructions by telephone or the Internet. If you provide specific voting instructions by mail, telephone or the Internet, your broker or nominee will vote your shares as you have directed. You may also cast your vote in person at the 2011 Annual Meeting, but you must request a legal proxy from your broker or nominee. | |
If you are a stockholder of record or hold stock through the General Mills 401(k) Savings Plan, you may vote using any of the following methods: |
| Via the Internet, by going to the website www.proxyvote.com and following the instructions for Internet voting on the proxy card or Notice of Internet Availability of Proxy Materials that you received in the mail. You will need the 12-digit control number printed on your proxy card or Notice of Internet Availability of Proxy Materials. You may also access instructions for telephone voting on the website; | |
| If you received a printed copy of the proxy materials, by completing and mailing your proxy card, or if you reside in the United States or Canada, by dialing 800-690-6903 and following the instructions for |
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telephone voting on the proxy card that you received in the mail. You will need the 12-digit control number printed on your proxy card; |
| By casting your vote in person at the 2011 Annual Meeting. |
Telephone and Internet voting facilities for stockholders of record will close at 11:59 pm Eastern Daylight Time on Sunday, September 25, 2011. The telephone and Internet voting instruction deadline for 401(k) shares is Midnight Eastern Daylight Time on Thursday, September 22, 2011. | ||
If you return your signed proxy card or use Internet or telephone voting before the 2011 Annual Meeting, we will vote your shares as you direct. Except on Proposal Number 5, you have three choices on each director nominee and other matters to be voted upon. You may vote (or abstain) by choosing FOR, AGAINST or ABSTAIN. On Proposal Number 5, you have four choices on the frequency of future advisory votes on executive compensation. You may vote (or abstain) by choosing ONE YEAR, TWO YEARS, THREE YEARS or ABSTAIN. | ||
If you are a stockholder of record and you return a proxy card through the mail, Internet or telephone but do not specify how you want to vote your shares, we will vote them FOR the election of the 13 director nominees set forth in this Proxy Statement, FOR approval of the 2011 Stock Compensation Plan, FOR approval of the 2011 Compensation Plan for Non-Employee Directors, FOR the compensation paid to our named executive officers, for ONE YEAR on the frequency of future advisory votes on executive compensation, and FOR the ratification of the appointment of KPMG LLP as our independent registered public accounting firm. |
Q. | What if I change my mind after I vote my shares? |
A. | You can revoke your proxy at any time before it is voted at the 2011 Annual Meeting by: |
| Sending written notice of revocation to the Corporate Secretary, General Mills, Inc., P.O. Box 1113, Minneapolis, Minnesota 55440; | |
| Submitting a properly signed proxy with a later date; | |
| Voting by telephone or the Internet at a time following your prior telephone or Internet vote; or | |
| Voting in person at the 2011 Annual Meeting. |
You also may be represented by another person at the 2011 Annual Meeting by executing a proper proxy designating that person. | ||
Q. | How will my General Mills 401(k) Savings Plan shares be voted? | |
A. | If you hold shares of common stock through the General Mills 401(k) Savings Plan, you may direct State Street Bank and Trust, as the plan fiduciary, how to vote your shares. For shares which are not allocated to participant accounts or for shares for which no direction has been received, State Street will vote those shares in the same proportion as directed shares are voted. State Street may, in exercising its fiduciary responsibility, disregard the direction on behalf of the unallocated shares and shares for which no direction was received and vote in its discretion, if following such direction would be inconsistent with the Employee Retirement Income Security Act. For instructions received by phone or Internet, the deadline is Midnight Eastern Daylight Time on Thursday, September 22, 2011. Any instruction received by State Street regarding your vote shall be confidential. | |
Q. | What does it mean if I receive more than one proxy card or Notice of Internet Availability of Proxy Materials? | |
A. | It means you have multiple accounts at the transfer agent and/or with banks or stockbrokers. Please vote all of your accounts. If you would like to consolidate multiple accounts at our transfer agent, please contact Wells Fargo Shareowner Services at 800-670-4763. |
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Q. | What will happen if I do not vote my shares? | |
A. | If you do not vote according to the instructions described on your proxy card or Notice of Internet Availability of Proxy Materials, your shares will not be voted. If your shares are held in street name, your brokerage firm may vote your shares on those proposals where it has discretion to vote. | |
Q. | How many shares must be present to hold the 2011 Annual Meeting? | |
A. | At least one-half of General Mills outstanding common shares as of the record date must be present at the 2011 Annual Meeting in order to hold the Annual Meeting and conduct business. This is called a quorum. We will count your shares as present at the Annual Meeting if you: |
| Are present and vote in person at the Annual Meeting; or | |
| Have properly submitted a proxy card or a voter instruction form, or voted by telephone or the Internet on a timely basis. |
Q. | How many votes are needed to approve each item? | |
A. | All proposals require the affirmative vote of a majority of votes cast (excluding abstentions) by stockholders entitled to vote and represented at the 2011 Annual Meeting in person or by proxy. In addition, adoption of the 2011 Stock Compensation Plan and the 2011 Compensation Plan for Non-Employee Directors requires that the total number of shares that vote on the proposals represents a majority of the shares entitled to vote on the proposals. | |
If an incumbent director is not re-elected, the director must promptly offer his or her resignation to the board. The corporate governance committee will recommend to the board whether to accept or reject the resignation, and the board will disclose its decision and the rationale behind it within 90 days from the certification of the election results. | ||
If no option under Proposal Number 5, regarding the frequency of advisory votes on executive compensation, receives a majority of the votes cast, we will consider the option that receives the most votes to be the option preferred by stockholders. The board will consider our stockholders preference in determining how frequently future advisory votes on executive compensation will occur. | ||
Q. | How will voting on any other business be conducted? | |
A. | We do not know of any business to be considered at the 2011 Annual Meeting of Stockholders other than the proposals described in this Proxy Statement. If any other business is presented at the Annual Meeting, your signed proxy card gives authority to Kendall J. Powell and Roderick A. Palmore to vote on such matters in their discretion. | |
Q. | How are the votes counted? | |
A. | You are entitled to cast one vote for each share of common stock you own, and there is no cumulative voting. Although abstentions are counted as present at the 2011 Annual Meeting for purposes of determining whether there is a quorum under our By-laws, they are not treated as votes cast on a specific proposal. | |
If you hold your shares in street name and do not provide voting instructions to your broker, your broker will not vote your shares on any proposal on which your broker does not have discretionary authority to vote, including all proposals but Proposal Number 6 at the 2011 Annual Meeting. In this situation, a broker non-vote occurs. Shares that constitute broker non-votes will be counted as present at the Annual Meeting for the purpose of determining a quorum but will not be considered entitled to vote on the proposal in question. Broker non-votes effectively reduce the number of votes needed to approve the proposal. New York Stock Exchange rules permit brokers discretionary authority to vote on Proposal Number 6 at the 2011 Annual Meeting if they do not receive instructions from the street name holder of the shares. As a result, if you do not vote shares that are held for you in street name, your broker has authority to vote on your behalf with regard to Proposal Number 6. |
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We have a policy of confidential voting that applies to all stockholders, including our employee-stockholders; Broadridge Investor Communications Solutions will tabulate the votes received. | ||
Q. | Where do I find the voting results of the meeting? | |
A. | We will publish the voting results in a current report on Form 8-K, which is due to be filed with the SEC within four business days of the 2011 Annual Meeting. You can also go to our website at www.generalmills.com. | |
Q. | How do I submit a stockholder proposal? | |
A. | If you wish to submit a proposal for inclusion in our next Proxy Statement, we must receive the proposal on or before April 12, 2012. Please address your proposal to: Corporate Secretary, General Mills, Inc., P.O. Box 1113, Minneapolis, Minnesota 55440. | |
Under our By-laws, if you wish to nominate a director or bring other business before the stockholders at our 2012 Annual Meeting without including your proposal in our Proxy Statement: |
| You must notify the Corporate Secretary of General Mills in writing between May 29, 2012 and June 28, 2012; and | |
| Your notice must contain the specific information required in our By-laws. |
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| A director will not be considered independent if, within the preceding three years, |
| the director was an employee of, or an immediate family member of the director was an executive officer of, General Mills; | |
| the director or an immediate family member of the director has received during any 12-month period more than $120,000 in direct compensation from us (other than director fees and pension or other deferred compensation for prior service to us); | |
| an executive officer of General Mills was on the compensation committee of a company which, at the same time, employed the director or an immediate family member of the director as an executive officer; or | |
| the director is a current executive officer or employee of, or an immediate family member of the director is a current executive officer of, another company that does business with us and the annual payments derived from that business by either company accounts for at least (i) $1,000,000 or (ii) two percent, whichever is greater, of the consolidated gross revenues of such company. |
| A director will not be considered independent if: |
| the director or an immediate family member of the director is a current partner of our independent registered public accounting firm; | |
| the director is a current employee of our independent registered public accounting firm; | |
| an immediate family member of the director is a current employee of our independent registered public accounting firm and personally works on our audit; or | |
| the director or an immediate family member of the director was, within the preceding three years, a partner or employee of our independent registered public accounting firm and personally worked on our audit within that time. |
| The following commercial or charitable relationships are immaterial and will not, by themselves, impair a directors independence: |
| a director or an immediate family member of the director is an executive officer of another company which is indebted to us, or to which we are indebted, and the total amount of either companys indebtedness to the other is less than two percent of the total consolidated assets of the company he or she serves as an executive officer; | |
| a director or an immediate family member of the director serves as an officer, director or trustee of a tax exempt organization and our contributions to such organization are less than the greater of (i) $120,000 or (ii) two percent of the organizations consolidated gross revenues; | |
| a director or an immediate family member of the director is an executive officer or director of another company that does business with us and the annual payments derived from that business by either company accounts for less than (i) $1,000,000 or (ii) two percent, whichever is greater, of the consolidated gross revenues of such company and the individual is not directly responsible for or involved in the relationship; or | |
| a director or an immediate family member holds a less than 10 percent interest in any entity that has a relationship with us. |
| For relationships not covered by these guidelines, the determination of whether the relationship is material or not, and therefore whether the director would be independent or not, shall be made by the directors who satisfy the independence guidelines set forth above. We will explain in our proxy statement the basis for any determination by the board that a relationship is not material if the relationship does not satisfy one of the specific categories of immaterial relationships identified above. | |
| Audit Committee members may not accept, directly or indirectly, any consulting, advisory or other compensatory fee from us (other than director fees and pension or other deferred compensation for prior service to us). |
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1. | PURPOSE OF THE PLAN |
2. | EFFECTIVE DATE AND DURATION OF PLAN |
3. | ELIGIBLE PERSONS |
4. | AWARD TYPES |
(a) | Stock Option Awards. The Committee may award Participants options (Stock Options) to purchase a fixed number of shares of common stock ($.10 par value) of the Company (Common Stock). The grant of a Stock Option entitles the Participant to purchase shares of Common Stock at an Exercise Price established by the Committee which, unless the Stock Option is granted through the assumption of, or in substitution for, outstanding awards previously granted to individuals who become employees of the Company as a result of a merger, consolidation, acquisition or other transaction involving the Company (in which case the assumption or substitution shall be accomplished in a manner that permits the Award to be exempt from Code Section 409A), shall not be less than 100% of the Fair Market Value of the Common Stock on the date of grant, and may exceed the Fair Market Value on the grant date, at the Committees discretion. Fair Market Value shall equal the closing price on the New York Stock Exchange of the Companys Common Stock on the applicable date. | |
(b) | Stock Appreciation Rights. The Committee may also award Participants Stock Appreciation Rights. A Stock Appreciation Right is a right to receive, upon exercise of that right, an amount, which may be paid in cash, shares of Common Stock, or a combination thereof in the complete discretion of the Committee, equal to or less than the difference between the Fair Market Value of one share of Common Stock as of the date of exercise and the Fair Market Value of one share of Common Stock on the date of grant, unless the Stock Appreciation Right was granted through the assumption of, or in substitution for, outstanding awards previously granted to individuals who become employees of the Company as a result of a merger, consolidation, acquisition, or other transaction involving the Company (in which case the assumption or substitution shall be accomplished in a manner that permits the Award to be exempt from Code Section 409A). |
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(c) | Restricted Stock Awards. The Committee may grant Participants, subject to certain restrictions, shares of Common Stock (Restricted Stock) or the right to receive shares of Common Stock or cash (Restricted Stock Units). | |
(d) | Performance Awards. Performance Awards may be made by the Committee granting a right to either the value of a number of shares of Common Stock (Performance Share Units) or a monetary amount, which could be settled in such shares or in cash or a combination thereof (Performance Units), determined based on the extent to which applicable performance goals are achieved. |
5. | COMMON STOCK SUBJECT TO THE PLAN |
(a) | Maximum Shares Available for Delivery. Subject to Section 5(c), the maximum number of shares of Common Stock available for Awards to Participants under the Plan shall be 40,000,000. Stock Options and Stock Appreciation Rights awarded shall reduce the number of shares available for Awards by one share for every one share granted; provided that Stock Appreciation Rights that may be settled only in cash shall not reduce the number of shares available for Awards. Awards of Restricted Stock, Restricted Stock Units and Performance Awards settled in shares of Common Stock shall reduce the number of shares available for Awards by one share for every one share delivered, up to 30 percent of the total number of shares available; beyond that, Restricted Stock, Restricted Stock Units and Performance Awards settled in shares of Common Stock shall reduce the number of shares available for Awards by six shares for every one share delivered. Restricted Stock Units and Performance Awards that may be settled only in cash shall not reduce the number of shares available for Awards. |
(b) | Individual Limits. The number of shares of Common Stock subject to Stock Options and Stock Appreciation Rights or shares of Common Stock available for Restricted Stock, Restricted Stock Units and Performance Awards granted under the Plan to any single Participant shall not exceed, in |
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the aggregate, 2,000,000 shares and/or units per fiscal year. The maximum dollar value of Performance Awards payable to any single Participant shall be $20,000,000 per fiscal year. These per-Participant limits shall be construed and applied consistently with Code section 162(m) and the regulations thereunder. |
(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; (iv) the individual limits imposed under the Plan; and if applicable; (v) the Exercise Price of outstanding Options and Stock Appreciation Rights provided that the number of shares of Common Stock subject to any Stock Option or Stock Appreciation Right denominated in Common Stock shall always be a whole number. Any shares of Common Stock underlying Awards granted through the assumption of, or in substitution for, outstanding awards previously granted to individuals who become employees of the Company as a result of a corporate transaction involving the Company shall not, unless required by law or regulation, count against the reserve of available shares of Common Stock under the Plan. For purposes of this paragraph a corporate transaction includes, but is not limited to, any dividend (other than a cash dividend that is not an extraordinary cash 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, combination of shares, reorganization, merger, consolidation, acquisition, 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. Notwithstanding anything in this paragraph to the contrary, an adjustment to a Stock Option or Stock Appreciation Right under this paragraph shall be made in a manner that will not result in the grant of a new Stock Option or Stock Appreciation Right under Section 409A or cause the Stock Option or Stock Appreciation Right to fail to be exempt from 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 or Restricted 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) | Stock Deposit Requirements and other Restrictions. The Committee, in its discretion, may require as a condition to the grant of Awards, the deposit of Common Stock owned by the Participant receiving such grant, and the forfeiture of such grant, if such deposit is not made or maintained during the required holding period. Such shares of deposited Common Stock may not be otherwise sold 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 or Stock Appreciation Right, or attainment of any performance goal, shall be restricted in any manner. |
6. | STOCK OPTIONS AND STOCK APPRECIATION RIGHTS TERMS AND TYPE |
(a) | General. Stock Options granted under the Plan shall be Non-Qualified Stock Options governed by Section 83 of the Internal Revenue Code of 1986, as amended (the Code). The term of any Stock |
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Option and Stock Appreciation Right granted under the Plan shall be determined by the Committee, provided that said term shall not exceed 10 years and one month. |
(b) | No Reload Rights. Neither Stock Options nor Stock Appreciation Rights granted under this Plan shall contain any provision entitling the optionee or right-holder to the automatic grant of additional options or rights in connection with any exercise of the original option or right. | |
(c) | No Repricing. Subject to Section 5(c) and absent stockholder approval, the Exercise Price of an outstanding Stock Option may not be decreased after the grant date; the value of Common Stock used to determine the amount paid upon the exercise of a Stock Appreciation Right (i.e., the equivalent of an options exercise price) may not be decreased after the date of grant; no outstanding Stock Options or Stock Appreciation Rights may be surrendered to the Company as consideration or otherwise for the grant of a new Award with a lower exercise price; and no other modifications to any outstanding Stock Options or Stock Appreciation Rights may be made that would be treated as a repricing under the then applicable rules or listing requirements adopted by the New York Stock Exchange. |
7. | GRANT, EXERCISE AND VESTING OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS |
(a) | Grant. Subject to the limits otherwise imposed by the terms of this Plan, the Committee has discretionary authority to determine the size of a Stock Option or Stock Appreciation Right Award, which may be tied to meeting performance-based requirements. | |
(b) | Exercise. Except as provided in Sections 11 and 12 (Change of Control and Termination of Employment), each Stock Option or Stock Appreciation Right may be exercised only in accordance with the terms and conditions of the Stock Option grant or Stock Appreciation Right and during the periods as may be established by the Committee. A Participant exercising a Stock Option or Stock Appreciation Right 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. | |
(c) | Vesting. Stock Options and Stock Appreciation Rights shall not be exercisable unless vested. Subject to Sections 11 and 12 Stock Options and Stock Appreciation Rights shall be fully vested only after at least four years of the Participants continued service with the Company following the date of the grant. | |
(d) | Payment of Exercise Price. The Exercise Price for Stock Options shall be paid to the Company at the time of such exercise, subject to any applicable rule 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); | |
(iii) | by a combination of (i) and (ii) above; or | |
(iv) | by authorizing a third party broker to sell a sufficient number of shares of Common Stock acquired upon exercise of the Stock Option and remit to the Company such sales proceeds to pay the entire Exercise Price and any tax withholding resulting from the exercise. |
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8. | RESTRICTED STOCK AND RESTRICTED STOCK UNITS |
(a) | Discretionary. With respect to discretionary Awards of Restricted Stock and Restricted Stock Units, the Committee shall: |
(i) | Select Participants to whom Awards will be made; | |
(ii) | Subject to the otherwise applicable Plan limits, determine the number of shares of Restricted Stock or the number of Restricted Stock Units to be awarded to a Participant; | |
(iii) | Determine the length of the restricted period, which, other than as expressly allowed under the Plan, shall be no less than four years; | |
(iv) | Determine the purchase price, if any, to be paid by the Participant for Restricted Stock or Restricted Stock Units; | |
(v) | Determine whether Restricted Stock Unit Awards will be settled in shares of Common Stock, cash or a combination thereof; and | |
(vi) | Determine any restrictions other than those set forth in this Section. |
(b) | Performance-Based. With respect to Awards of performance-based Restricted Stock and Restricted Stock Units, the intent is to grant such Awards so as to satisfy the requirements for qualified performance-based compensation under Code Section 162(m). Performance-based Awards are subject to the following: |
(i) | The Committee has exclusive authority to determine which Participants may be awarded performance-based Restricted Stock and Restricted Stock Units and whether any Restricted Stock Unit Awards will be settled in shares of Common Stock, cash, or a combination thereof. | |
(ii) | In order for any Participant to be awarded Restricted Stock or Restricted Stock Units for a Performance Period (defined below), the net earnings from continuing operations excluding items identified and disclosed by the Company as non-recurring or special costs and after taxes (Net Earnings) of the Company for such Performance Period must be greater than zero. | |
(iii) | At the end of the Performance Period, if the Committee determines that the requirement of Section 8(b)(ii) has been met, each Participant eligible for a performance-based Award shall be deemed to have earned an Award equal in value to the Maximum Amount, or such lesser amount as the Committee shall determine in its discretion to be appropriate. The Committee may base this determination on performance-based criteria and in no case shall this have the effect of increasing an Award payable to any other Participant. For purposes of computing the value of Awards, each Restricted Stock or Restricted Stock Unit shall be deemed to have a value equivalent to the Fair Market Value of one share of Common Stock on the date the Award is granted. | |
(iv) | The total value and/or number of shares or units of the performance-based Restricted Stock or Restricted Stock Unit Award granted to any Participant for any one Performance Period shall not exceed the lesser of 0.5 percent of the Companys Net Earnings for that Performance Period (such amount is the Maximum Amount), or the number of shares of Common Stock available under Section 5(b) hereof. | |
(v) | The Committee shall determine the length of the restricted period which, other than as expressly allowed under the Plan, shall be no less than four years. | |
(vi) | Performance Period means a fiscal year of the Company, or such other period as the Committee may from time to time establish, which in no case shall be less than one year. |
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9. | PERFORMANCE AWARDS |
(a) | Grant. The Committee may grant Performance Awards which may be denominated in shares of Common Stock (Performance Share Units) or notionally represented by a monetary value, and which may be settled in shares of Common Stock, paid in cash, or a combination thereof (Performance Units). | |
(b) | Performance Goal. In order for any Participant to be granted a Performance Award for a Performance Period (defined below), the net earnings from continuing operations excluding items identified and disclosed by the Company as non-recurring or special costs and after taxes (Net Earnings) of the Company for such Performance Period must be greater than zero. | |
(c) | Grant Size. At the end of the Performance Period, if the Committee determines that the requirement of Section 9(b) has been met, each Participant eligible for a Performance Award shall be deemed to be granted an Award equal in value to the Maximum Amount, or such lesser amount as the Committee determines in its discretion to be appropriate. The Committee may base this determination on additional performance-based criteria and in no case shall this have the effect |
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of increasing an Award payable to any other Participant. For purposes of computing the grant value of Awards, each Performance Award denominated in shares of Common Stock (whether or not share settled) shall be deemed to have a value equivalent to the Fair Market Value of one share of Common Stock on the date the Award is granted. |
(d) | Additional Performance Conditions and Vesting. Awards granted under this Section 9 shall be subject to such other terms and conditions as the Committee, in its discretion, imposes in the relevant Award Agreement. These conditions may include service and/or performance requirements and goals over periods of one or more years that could result in the future forfeiture of all or part of the Performance Award granted hereunder in the event of the Participants termination of employment with the Company prior to the expiration of any service conditions, and/or said performance criteria or other conditions are not met in whole or in part within the designated period of time. This designated period of time shall be referred to as the Additional Performance Period. Except as provided in Sections 11(b), (c) and 12(c), Performance Awards shall not be paid other than on the date specified in the relevant Award Agreement after the end of the Additional Performance Period. | |
(e) | Maximum Amount. The total value of a Performance Award granted to any Participant for any one Performance Period shall not exceed the lesser of 0.5 percent of the Companys Net Earnings for that Performance Period (such amount is the Maximum Amount), or the dollar value limit on Performance Awards under Section 5(b). | |
(f) | Performance Period. Performance Period means the period as the Committee may from time to time establish, which is no case shall be less than one year. | |
(g) | Dividend Equivalents and Voting. At the discretion of the Committee, Performance Share Units may be credited with amounts equal to the sum of all dividends and other distributions paid by the Company during the prior quarter on that equivalent number of shares of Common Stock. Notwithstanding the previous sentence, any dividend equivalents or other distributions so credited shall be distributed (in either cash or shares of Common Stock, with or without interest or other earnings, as provided in the Award Agreement at the discretion of the Committee) to the Participant only if, when, and to the extent the conditions imposed on the attendant Performance Share Units are satisfied, and in an amount equal to the sum of all quarterly dividends and other distributions paid by the Company during the relevant Performance Period and/or Additional Performance Period on the equivalent number of shares of Common Stock which become payable. Such dividend equivalents or other distributions shall be payable at the same time as the attendant Performance Share Units to which they relate, as provided under the applicable terms of the Plan and Award Agreement. Dividend equivalents and other distributions that are not so vested shall be forfeited. Dividend equivalents shall not be credited in respect to Performance Units. Participants who receive either Performance Share Units or Performance Units shall have no rights as stockholders and in particular shall have no voting rights. |
10. | TAXES |
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11. | CHANGE OF CONTROL |
(a) | Each of the following (i) through (iv) constitutes a Change of Control: |
(i) | 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 (i), the following acquisitions shall not be deemed to result in a Change of 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 Persons beneficial ownership of the Outstanding 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 Voting Securities; or | |
(ii) | 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 Companys shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or | |
(iii) | Consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries (each, a Business Combination); 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 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 which as a result of such transaction owns the Company or all or substantially all of the Companys 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 Securities, (B) no Person (excluding any corporation resulting from such Business Combination or 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 |
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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 stockholders of the Company of a complete liquidation or dissolution of the Company. |
(b) | If, within two years after a Change of Control a Participant experiences an involuntary separation from service initiated by the Company for reasons other than cause (for this purpose cause shall have the same meaning as that term has in Section 4.2(b)(ii) of Plan B of the General Mills Separation Pay and Benefits Program for Officers), or a separation from service for good reason actually entitling the employee to certain separation benefits under Section 4.2(a)(ii) of Plan B of the General Mills Separation Pay and Benefits Program for Officers, the following applies: |
(i) | All of his or her then outstanding and unvested Stock Options and Stock Appreciation Rights shall fully vest immediately and remain exercisable for the one-year period beginning on the date of his or her separation from service or, if earlier, the end of the term of the Stock Option and Stock Appreciation Right. | |
(ii) | All shares of Restricted Stock and Restricted Stock Units shall fully vest and be settled immediately (subject to a proper deferral election made with respect to the Award). | |
(iii) | All Performance Awards shall fully vest immediately and shall be considered to be earned in full at target as if the applicable performance goals established for the Additional Performance Period have been achieved, and paid immediately (subject to a proper deferral election made with respect to the Award). | |
(iv) | If Awards are replaced pursuant to subsection (d) below, the protections and rights granted under this subsection (b) shall transfer and apply to such replacement awards. |
(c) | If, in the event of a Change of Control, and to the extent outstanding Awards are not assumed by a successor corporation (or affiliate thereto) or other successor entity or person, or replaced with an award or grant that solely in the discretionary judgment of the Committee, which shall be reasonable, preserves the existing value of outstanding Awards at the time of the Change of Control, then the following shall occur: |
(i) | Subject to the other provisions of this subsection (c), All Stock Options and Stock Appreciation Rights shall vest and become exercisable immediately upon the Change of Control event. | |
(ii) | The restrictions on all shares of Restricted Stock shall lapse and Restricted Stock Units shall vest immediately. | |
(iii) | All Performance Awards shall fully vest immediately and shall be considered to be earned in full at target as if the applicable performance goals established for the Additional Performance Period have been achieved. | |
(iv) | To the extent Code Section 409A applies, if the Change of Control constitutes a change in control event as described in IRS regulations or other guidance under Code |
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section 409A(a)(2)(A)(v), Participants Restricted Stock Units and Performance Awards shall be settled and paid upon the Change of Control in accordance with the requirements of Code Section 409A. |
(v) | If the Change of Control does not constitute a change in control event as described in IRS regulations or other guidance under Code section 409A(a)(2)(A)(v), Restricted Stock Units and Performance Awards that are not Section 409A Restricted Stock Units and/or not otherwise subject to Section 409A, and on which a deferral election was not made, shall be settled and paid upon the Change of Control. However, the Section 409A Restricted Stock Units, Performance Awards otherwise subject to Section 409A, or such Awards for which a proper deferral election was made, shall be settled in cash equal to either the Awards Fair Market Value at the time of the Change of Control, or its monetary value provided for above in (iii), as applicable, plus interest at a rate of Prime plus 1% from the Change of Control to the date of payment, which shall be the time the original restriction period would have closed, the Performance Award would have been originally payable, or the date elected pursuant to the proper deferral election, as applicable. |
(d) | If in the event of a Change of Control and to the extent outstanding Awards are assumed by any successor corporation, affiliate thereof, person or other entity, or are replaced with awards that, solely in the discretionary judgment of the Committee preserve the existing value of outstanding Awards at the time of the Change of Control and provide for vesting payout terms, and performance goals, as applicable, that are at least as favorable to Participants as vesting, payout terms and Performance Goals applicable to Awards, then all such Awards or such substitutes thereof shall remain outstanding and be governed by their respective terms, subject to Subsection 11(b) hereof. | |
(e) | With respect to any outstanding Awards as of the date of any 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. |
12. | TERMINATION OF EMPLOYMENT |
(a) | Resignation or Termination for Cause. If the Participants employment by the Company is terminated by either |
(i) | the voluntary resignation of the Participant, or | |
(ii) |
a Company discharge due to Participants illegal
activities, poor work performance, misconduct or violation of
the Companys Code of Conduct, policies or practices, |
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(b) | Other Termination. If the Participants employment by the Company terminates involuntarily at the initiation of the Company for any reason other than specified in Sections 11, 12 (a), (d) or (e), and upon the execution (without revoking) of an effective general legal release and such other documents as are satisfactory to the Company, the following rules shall apply: |
(i) | In the event that, at the time of such involuntary termination, the sum of the Participants age and years of service with the Company equals or exceeds 70, (A) the Participants outstanding Stock Options and Stock Appreciation Rights shall continue to become exercisable according to the schedule established at the time of grant unless otherwise provided in the applicable Award Agreement; (B) the restriction on all shares of Restricted Stock shall lapse and Restricted Stock Units shall vest and be paid (or deferred, as appropriate) immediately; and (C) any Performance Awards remaining outstanding during the Additional Performance Period shall fully vest and be payable according to the original terms of the Award with a value, if any, that otherwise would be earned under the applicable performance goals originally established under the Award Agreement based on actual performance (subject to a proper deferral election). Stock Options and Stock Appreciation Rights shall remain exercisable for the remaining full term of such Awards. | |
(ii) | In the event that, at the time of such involuntary termination, the sum of the Participants age and years of service with the Company is less than 70, (A) the Participants outstanding unexercisable Stock Options and Stock Appreciation Rights, and unvested Restricted Stock and Restricted Stock Units, shall become exercisable or vest and paid or deferred immediately, as the case may be, 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 Appreciation Rights, and Stock Options and Stock Appreciation Rights 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 and/or Stock Appreciation Right; and (B) the Participants Performance Awards remaining outstanding during the Additional Performance Period shall be payable according to the original terms of the Award with a value, if any, that otherwise would be earned under the applicable performance goals originally established under the Award Agreement based on actual performance, and shall vest at the end of the relevant Additional Performance Period in a pro-rata amount based on the full months of employment completed during the relevant Additional Performance Period originally established in the Award Agreement through the date of termination. All other Stock Options, Stock Appreciation Rights, shares of Restricted Stock, Restricted Stock Units and Performance Awards shall be forfeited as of the date of termination. Provided, however, that if the Participant is a Company Senior Vice President or above, the Participants outstanding Stock Options and Stock Appreciation Rights 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 and Stock Appreciation Rights 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 or Stock Appreciation Right; all shares of Restricted Stock and Restricted Stock Units shall fully vest as of the date of termination and be paid or deferred immediately; and any outstanding Performance Awards shall fully vest and be payable according to the original terms of the Award with a value, if any, that otherwise would be earned under the applicable performance goals originally established in the Award Agreement (subject to a proper deferral election). |
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(c) | Death. If a Participant dies while employed by the Company, any Stock Option or Stock Appreciation Right previously granted under this Plan shall fully vest and become exercisable upon death and may be exercised by the person designated as such Participants beneficiary or beneficiaries or, in the absence of such designation, by the Participants estate. Stock Options and Stock Appreciation Rights shall remain exercisable for the remaining full term of such Awards. A Participant who dies while employed by the Company during any applicable restricted period shall fully vest in such shares of Restricted Stock or Restricted Stock Units, effective as of the date of death, and such shares or cash shall be paid as of the first day of the month following death to the designated beneficiary or beneficiaries. If a Participant dies while employed by the Company during an Additional Performance Period, all Performance Awards shall fully vest and shall be considered to be earned in full at target as if the applicable performance goals have been achieved, and paid on the first day of the month following death to the designated beneficiary or beneficiaries. | |
(d) | Retirement. The Committee shall determine, at the time of grant, the treatment of Awards upon the retirement of the Participant. Unless other terms are specified in the original Award Agreement, if the termination of employment is due to a Participants retirement on or after age 55 and completion of five years of eligibility service under the General Mills Pension Plan, the Participant may, effective as of the date of employment termination as a retiree, exercise a Stock Option or Stock Appreciation Right pursuant to the original terms and conditions of such Awards; shall fully vest in, and be paid or have deferred, all shares of Restricted Stock or shares or cash attributable to Restricted Stock Units; and all Performance Awards shall fully vest and be payable according to the original terms of the Award with a value, if any, that otherwise would be earned under the applicable performance goals originally established in the Award Agreement based on actual performance (subject to a proper deferral election made with respect to the Award). However, the Restricted Stock Units without a proper deferral election that vest under this Section 12(d) shall be payable on the Participants separation from service (within the meaning of Section 409A) or in the case of a Participant who is a specified employee (within the meaning of Section 409A) shall be paid on the first day of the seventh month following the month of separation from service. |
(e) | Spin-offs and Other Divestitures. If the termination of employment is due to the divestiture, cessation, transfer, or spin-off of a line of business or other activity of the Company, the Committee, in its sole discretion, shall determine the conversion, vesting, or other treatment of all outstanding Awards under the Plan. Such treatment shall be consistent with Section 409A, and in particular will take into account whether a separation from service has o |