EXHIBIT 10.5
MANAGEMENT CONTINUITY AGREEMENT
THIS MANAGEMENT CONTINUITY AGREEMENT, previously referred to
as an "Executive Protection Agreement" (the "Agreement")
between General Mills, Inc., a Delaware corporation (the
"Corporation"), and <name of officer> (the "Executive"),
originally entered into as of June 24, 1986 (the "date hereof")
is hereby amended as of April 24, 1989.
WITNESSETH:
WHEREAS, the Corporation wishes to attract and retain well-
qualified executive and key personnel and to assure both itself
and the Executive of continuity of management in the event of
any Change of Control (as defined in Section 2) of the
Corporation;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is hereby agreed by and between
the Corporation and the Executive as follows:
1. Operation of Agreement. The "Effective Date" of this
Agreement shall be the date during the Contract Period (as
defined in Section 3) on which a Change of Control occurs.
2. Change of Control. For the purpose of this Agreement, a
"Change of Control" shall mean an event during the Contract
Period required to be reported in response to Item 1(a) of the
Current Report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15(d) of the Securities and Exchange
Act of 1934 (the "Exchange Act"); provided that, without
limitation, such a "Change of Control" shall be deemed to have
occurred if: (i) a third person, including a "group" as
defined in Section 13(d)(3) of the Exchange Act, becomes the
beneficial owner, directly or indirectly, of 20% or more of the
combined voting power of the Corporation's outstanding voting
securities ordinarily having the right to vote for the election
of directors of the Corporation; or (ii) individuals who
constitute the Board of Directors of the Corporation as of the
date hereof (the "Incumbent Board") cease for any reason to
constitute at least two-thirds thereof, provided that any
person becoming a director subsequent to the date hereof whose
election, or nomination for election by the Corporation's
stockholders, was approved by a vote of at least three-quarters
of the directors comprising the Incumbent Board shall be, for
purposes of this clause (ii), considered as though such persons
were a member of the Incumbent Board.
3. Contract Period. The "Contract Period" is the period
commencing on the date hereof and ending on the earlier to
occur of (i) the second anniversary of such date, or (ii) the
first day of the month next following the Executive's 65th
birthday; provided, however, that commencing on the date one
year after the date hereof, and on each annual anniversary of
such date (the date one year after the date hereof, and each
annual anniversary of such date, is hereinafter referred to as
the "Renewal Date"), the Contract Period shall be automatically
extended so as to terminate on the earlier of (i) two years
from such Renewal Date or (ii) the first day of the month next
following the Executive's 65th birthday, unless at least 60
days prior to the Renewal Date the Corporation shall give
notice that the Contract Period shall not be so extended
subject however that any failure of the Corporation to extend
the Contract Period shall not limit or reduce in any manner the
rights and benefits of the Executive contained in this
Agreement if a Change of Control has occurred during a Contract
Period and, in such event, the rights and benefits of the
Executive shall continue in full force and effect
notwithstanding that a Contract Period may have ended.
4. Certain Definitions.
(a) Cause. The Executive's employment may be terminated
for Cause if a majority of the Board of Directors, after the
Executive shall have been afforded a reasonable opportunity to
appear in person before the Board of Directors and to present
such evidence as the Executive deems appropriate, determines
that Cause exists. For purposes of this Agreement, "Cause"
means (i) an act or acts of fraud or misappropriation on the
Executive's part which result in or are intended to result in
his personal enrichment at the expense of the Corporation, (ii)
conviction of a felony, or (iii) a physical or mental
disability which materially interferes with the capacity of the
Executive in fulfilling his or her responsibilities and which
will qualify the Executive for disability benefits from a
company-sponsored plan.
(b) Good Reason. For purposes of this Agreement, "Good
Reason" means
(i) without the express written consent of the
Executive (A) the assignment to the Executive of any
duties inconsistent in any substantial respect with the
Executive's position, authority or responsibilities as
in effect during the 90-day period immediately
preceding the Effective Date of this Agreement, or (B)
any other substantial adverse change in such position
(including titles), authority, or responsibilities;
(ii) any failure by the Corporation to furnish the
Executive with compensation and benefits at a level
equal to or exceeding those received by the Executive
from the Corporation during the 90-day period preceding
the Effective Date of this Agreement, including a
failure by the Corporation to maintain its policy of
paying retirement and supplemental savings plan
benefits which would be payable under the General Mills
Retirement Plan but for the limits imposed by the
Employee Retirement Income Security Act of 1974, as may
be amended ("ERISA"), other than an insubstantial and
inadvertent failure remedied by the Corporation
promptly after receipt of notice thereof given by the
Executive;
(iii) the Corporation's requiring the Executive to be
based or to perform services at any office or location
other than that at which the Executive is based at the
Effective Date of this Agreement, except for travel
reasonably required in the performance of the
Executive's responsibilities;
(iv) any failure by the Corporation to obtain the
assumption and agreement to perform this Agreement by a
successor as contemplated by Section 10(b); or
(v) any failure by the Corporation to deposit
amounts which may become payable to the Executive to
the Trustee as contemplated by Section 8.
For purposes of this Section 4(b), any determination of
"Good Reason" made by the Executive shall be conclusive.
(c) Notice of Termination. Any termination by the
Corporation for Cause or by the Executive for Good Reason or
otherwise shall be communicated by Notice of Termination to the
other party hereto given in accordance with Section 10(b). For
purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination
provision in this Agreement relief upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment
under the provision so indicated (provided, however, that any
Notice of Termination given by (i) the Executive at least six
months but no more than two years after the Effective Date, or
(ii) by the Corporation more than two years after the Effective
Date, need not set forth any such basis for termination) and
(iii) if the termination date is other than the date of receipt
of such notice, specifies the termination date (which date
shall be not more than 15 days after the giving of such
notice).
(d) Date of Termination. "Date of Termination" means
the date of receipt of the Notice of Termination or any later
date specified therein, as the case may be.
5. Obligations of the Corporation upon Termination.
(a) Good Reason and other than for Cause Subject to the
limitations of Section 5(c), if:
(i) within two years after the Effective Date of
this Agreement, the Corporation shall terminate the
Executive's employment for any reason other than for
Cause; or
(ii) at least six months but no more than two years
after the Effective Date of this Agreement, the
Executive shall terminate employment for any reason in
his sole discretion; or
(iii) within two years after the Effective Date of
this Agreement, the Executive shall terminate his
employment for Good Reason:
(I) the Corporation shall pay to the
Executive in a lump sum in cash within 20
days after the Date of Termination the
aggregate of the amounts determined
pursuant to the following clauses (A), (B)
and (C) inclusive plus the continuation of
the benefits specified in Clause (D), as
follows:
(A) if not theretofore paid, the
Executive's Base Salary through the
Date of Termination at the rate in
effect at the time the Notice of
Termination was given, plus a bonus,
determined in accordance with the
provisions of the following clause
(B)(ii), for that fraction of the
fiscal year completed as of the date
the Notice of Termination was given;
and
(B) three times the sum of (i) the
Executive's annual base salary at the
rate in effect at the time the Notice
of Termination was given and (ii) an
amount equal to the highest bonus paid
to the Executive in any of the
preceding three fiscal years; and
(C) In the event that the Executive
becomes entitled to any or all of the
specified payments under clauses (A),
(B) or (D) of this Section 5(a)(I) or
under Section 5(b), if any of such
payments or benefits will be subject to
the tax imposed by section 4999 of the
Internal Revenue Code of 1986, as may
be amended (the "Code"), and/or any
similar tax that may hereafter be
imposed by the federal or any state or
local government (the "Excise Tax"),
the Corporation shall pay to the
Executive, at the time of receipt of
such payments or benefits, an
additional amount (the "Gross-Up
Payment") so that the net amount
retained by the Executive, after
deduction of any Excise Tax on the
Total Payments (as hereinafter defined)
and any federal, state and local income
tax and Excise Tax upon the payment
provided for by this clause, shall be
equal to the Total Payments.
For purposes of determining whether any of such payments or
benefits will be subject to the Excise Tax and the amount of
such Excise Tax:
(x) Any other payments or benefits
received or to be received by the
Executive in connection with a Change
of Control of the Corporation or the
Executive's termination of employment
(whether pursuant to the terms of this
Agreement or any other plan, stock
option, restricted stock, stock
performance units, or any other
benefits or arrangement or agreement
with the Corporation, or any person
whose actions result in a Change of
Control of the Corporation, or any
person affiliated with the Corporation
or such person) (which together with
the payments or benefits under Section
5(a)I or Section 5(b) constitute the
"Total Payments") shall be treated as
"parachute payments" within the
meaning of section 280G(b)(2) of the
Code, and all "excess parachute
payments" within the meaning of
section 280G(b)(1) of the Code shall
be treated as subject to the Excise
Tax unless, in the opinion of tax
counsel selected by the Corporation
and reasonably acceptable to the
Executive, such other payments or
benefits (in whole or in part) do not
constitute parachute payments, or such
excess parachute payments (in whole or
in part) represent reasonable
compensation for services actually
rendered within the meaning of section
280G(b)(4) of the Code in excess of
the base amount within the meaning of
section 280G(b)(3) of the Code, or are
otherwise not subject to the Excise
Tax;
(y) The amount of the Total Payments
which shall be treated as subject to
the Excise Tax shall be equal to the
lesser of (1) the total amount of the
Total Payments, or (2) the amount of
excess parachute payments within the
meaning of section 280G(b)(1) (after
applying subclause (x) above; and
(z) The value of any non-cash
benefits or any deferred payment or
benefit shall be determined by the
Corporation's independent public
accountants in accordance with the
principles of sections 280G(d)(3) and
(4) of the Code.
For purposes of determining the amount of the Gross-Up Payment,
the Executive shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation in the
calendar year in which the Gross-Up Payment is to be made and
state and local income taxes at the highest marginal rate of
taxation in the state and locality of the Executive's residence
on the Date of Termination, net of the maximum reduction in
federal income taxes which could be obtained from deduction of
such state and local taxes. In the event that the Excise Tax
is subsequently determined to be less than the amount taken
into account hereunder at the time of termination of the
Executive's employment, the Executive shall repay to the
Corporation at the time that the amount of such reduction in
Excise Tax is finally determined, the portion of the Gross-Up
Payment attributable to such reduction (plus the portion of the
Gross-Up Payment attributable to the Excise Tax and federal and
state and local income tax imposed on the Gross-Up Payment
being repaid by the Executive if such repayment results in a
reduction in Excise Tax and/or a federal and state and local
income tax deduction) plus interest on the amount of such
repayment at the rate provided in section 1274(b)(2)(B) of the
Code. In the event that the Excise Tax is determined to exceed
the amount taken into account hereunder at the time of the
termination of the Executive's employment (including by reason
of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the
Corporation shall make an additional Gross-Up Payment in
respect of such excess (plus any interest payable with respect
to such excess) at the time that the amount of such excess is
finally determined.
(D) until the earlier to occur of (i)
the date three years following the
Date of Termination,or (ii) the first
day of the first month next following
the Executive's 65th birthday (the
period of time from the Date of
Termination until the earlier of (i)
or (ii) is hereinafter referred to as
the "Unexpired Period," the
Corporation shall continue to provide
all benefits which the Executive
and/or his spouse is or would have
been entitled to receive under all
present and post-retirement medical,
dental, vision, disability, executive
life, group life, accidental death and
other programs of the Corporation,
including additional benefit service
under the applicable General Mills
retirement plan equal to the
"Unexpired Period," in each case on a
basis providing the Executive or his
spouse with benefits at least equal to
those provided by the Corporation for
the Executive under such plans and
programs in effect at any time during
the 90-day period immediately
preceding the Effective Date of this
Agreement, subject that if an
Executive is terminated under the
provisions of Section 5(a) or Section
5(b), and at the Date of Termination
the Executive would not qualify for
post-retirement benefits under the
plans and programs then in effect
during such 90-day period for the
reason that the Executive has not
reached his 55th birthday, the
Executive shall nevertheless be
entitled to such benefits equal to the
benefits such Executive would have
received if the Executive was of the
age of 55 at the Date of Termination;
and (ii) the Executive and/or his
spouse, as the case may be, shall
receive supplemental periodic payments
equal to retirement and savings plan
benefits which would be payable under
the applicable General Mills
retirement plan but for limits imposed
by ERISA, calculated as if the
Executive (a) had been employed to the
end of the Unexpired Period; (b) had
retired at the age he would have
attained at the end of the Unexpired
Period; and (c) had earnings to the
end of the Unexpired Period at a rate
equal to the rate of Executive's total
compensation for the calendar year
prior to the effective date of this
Agreement.
(b) By the Corporation more than two years after the
Effective Date. If the Corporation shall terminate the
Executive's employment for any reason other than Cause at any
date which is more than two years after the Effective Date, the
Executive shall be entitled to receive the benefits specified
under Clauses (A), (B), (C) and (D) of Section 5(a)(I) except
that the words "three times" in Clause (B), "three years" and
"thirty-six" in Clause (B) shall be substituted by "one times",
"one year" and "twelve" respectively.
6. Non-exclusivity of Rights. Nothing in this Agreement
shall prevent or limit the Executive's continuing or future
participation in any benefit, bonus, incentive deferred
compensation or other plan or program provided by the
Corporation or any of its affiliated companies and for which
the Executive may qualify, nor shall anything herein limit or
otherwise affect such rights as the Executive may have under
any employment, stock option, performance units or other
agreements with the Corporation or any of its affiliated
companies. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan or
program of the Corporation or any of its affiliated companies
at or subsequent to the Date of Termination shall be payable in
accordance with such plan or program.
7. Full Settlement. The Corporation's obligation to make
the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any
circumstances, including, without limitation, any setoff,
counterclaim, recoupment, defense or other right which the
Corporation may have against the Executive or others or by any
amounts received by Executive from others. In no event shall
the Executive be obligated to seek other employment by way of
mitigation of the amounts payable to the Executive under any of
the provisions of this Agreement. The Corporation agrees to
pay, to the full extent permitted by law, all legal fees and
expenses which the Executive may reasonably incur as a result
of any contest (regardless of the outcome thereof) by the
Corporation or others of the validity or enforceability of, or
liability under any provision of this Agreement or any
guarantee of performance thereof, in each case plus interest,
compounded monthly, on the total unpaid amount determined to be
payable under this Agreement, such interest to be calculated on
the basis of the "Prime Rate" as reported in the WALL STREET
JOURNAL during the period of such nonpayment plus 5%.
8. Trustee. The Corporation has established a
Supplemental Benefits Trust with Norwest Bank Minnesota, N.A.
as Trustee to hold assets of the Corporation under certain
circumstances as a reserve for the discharge of the
Corporation's obligations under this Agreement and certain
plans of deferred compensation of the Corporation. In the
event of a Change of Control as defined in Section 2 hereof,
the Corporation shall be obligated to immediately contribute
such amounts to the Trust as may be necessary to fully fund all
benefits payable under the Agreement. Executives shall have
the right to demand and secure specific performance of this
provision. All assets held in the Trust remain subject only to
the claims of the Corporation's general creditors whose claims
against the Corporation are not satisfied because of the
Corporation's bankruptcy or insolvency (as those terms are
defined in the Trust Agreement). The Executive does not have
any preferred claim on, or beneficial ownership interest in,
any assets of the Trust before the assets are paid to the
Executive and all rights created under the Trust, as under this
Agreement, are unsecured contractual claims of the Executive
against the Corporation.
In the event the funding of the Trust described in the
preceding paragraph does not occur, upon written demand by the
Executive given at any time after a Change of Control occurs,
the Corporation shall deposit in trust with an institutional
trustee (the "Trustee") designated by the Executive in such
demand amounts which may become payable to the Executive
pursuant to Section 5(a) or Section 5(b) with irrevocable
instructions to pay amounts to the Executive when due in
accordance with the terms of this Agreement. All charges of
the Trustee shall be paid by the Corporation. The Trustee
shall be entitled to rely conclusively on the Executive's
written statement as to the fact that payments are due under
this Agreement and the amount of such payments. If the Trustee
is not notified that payments are due under this Agreement
within two years and 60 days after receipt of a deposit
hereunder, all amounts deposited with the Trustees and earnings
with respect thereto shall be delivered to the Corporation on
demand.
9. Successors. (a) This Agreement is personal to the
Executive and without the prior written consent of the
Corporation shall not be assignable by the Executive otherwise
than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by
the Executive's legal representatives, heirs and legatees.
(b) This Agreement shall inure to the benefit of and be
binding upon the Corporation and its successors. The
Corporation shall require any successor to all or substantially
all of the business and/or assets of the Corporation, whether
directly or indirectly, by purchase, merger, consolidation,
acquisition of stock, or otherwise, by an agreement in form and
substance satisfactory to the Executive, expressly to assume
and agree to perform this Agreement in the same manner and to
the same extent as the Corporation would be required to perform
if no such succession had taken place.
10. Miscellaneous. (a) This Agreement shall be governed by
and construed in accordance with the laws of the State of
Minnesota, without reference to principles of conflict of laws.
The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may
not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective
successors and legal representatives. Any dispute,
disagreement or controversy shall be arbitrated in Minneapolis,
Minnesota as provided for in Minnesota Statutes 572.08 et seq.
under the rules, regulations and procedures of the American
Arbitration Association.
(b) All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the
other party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive:
<name and address>
If to the Corporation:
General Mills, Inc.
Number One General Mills Boulevard
Minneapolis, Minnesota 55426
Attn: General Counsel
or to such other address as either party shall have furnished
to the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the
addressee.
(c) The invalidity or unenforceability of any provision
of this Agreement shall be severable and not affect the
validity or enforceability of any other provision of this
Agreement.
(d) The Corporation may withhold from any amounts
payable under this Agreement such Federal, state or local taxes
as shall be required to be withheld pursuant to any applicable
law or regulation.
(e) This Agreement contains the entire understanding
with the Executive with respect to the subject matter hereof.
(f) The employment of Executive by the Corporation may
be terminated by either the Executive or the Corporation at any
time and for any reason. Nothing contained in the Agreement
shall affect such rights to terminate, provided, however, that
nothing in this Section 10(f) shall prevent the Executive from
receiving any amounts payable pursuant to Section 5(a) or
Section 5(b) of this Agreement in the event of a termination
described in such Section 5(a) or 5(b).
IN WITNESS WHEREOF, the Executive has hereunto set his hand
and, pursuant to the authorization from its Board of Directors,
the Corporation has caused these presents to be executed in its
name on its behalf, and its corporate seal to be hereunder
affixed and attested by its secretary or assistant secretary,
all as of the day and year first above written.
GENERAL MILLS, INC.
______________________________ By____________________________
Executive
Its___________________________
ATTEST:
______________________________
_______________ Secretary
(Seal)