EXHIBIT 10.4
GENERAL MILLS, INC.
EXECUTIVE INCENTIVE PLAN
As Amended Through June 1, 1995
GENERAL MILLS, INC.
EXECUTIVE INCENTIVE PLAN
PART I
GENERAL PROVISIONS
A. OBJECTIVE OF THE PLAN
It is the intent of General Mills, Inc. (the "Company") to provide
financial rewards to key executives in recognition of individual
contributions to the success of the Company under the provisions of
this Executive Incentive Plan (the "Plan").
Participant awards shall be based on the comparative impact of the
position to the overall corporate results as measured by the
position level, salary of the Participant, and the degree to which
the individual impacts division/ subsidiary, group and corporate
results.
B. ELIGIBILITY
Any active key management employee of the Company or any of its
subsidiaries, including such members of the Board and the Chairman
as are actively employed by the Company or its subsidiaries, shall
be eligible to participate in the Plan. Eligibility shall not carry
any rights to participation nor to any fixed awards under the Plan.
Employees on a commission basis, those who are members of any other
Company incentive compensation plan, except the Stock Option and
Long-Term Incentive Plans of General Mills, Inc., and persons acting
in a consulting capacity shall not be eligible.
C. PARTICIPATION
As early as possible in each fiscal year (the "Plan Year"),
management shall recommend from those eligible a list of proposed
Participants in the Plan, and the Compensation Committee of the
Board of Directors (the "Committee") thereupon shall determine and
cause to be notified those who have been selected as Participants
for the current Plan Year. Participants shall be those persons
holding positions which most significantly affect operating results
and provide the greatest opportunity to contribute to current
earnings and the future success of the Company. During the year,
other Participants may be added because of promotion or for other
reasons warranting their inclusion, or Participants may be excluded
from active participation because of demotion or other reasons
warranting their exclusion.
PART II
BASE CASH AWARDS
The size of a Participant's base cash incentive award ("Base Cash
Award") under this Plan shall be preliminarily determined by the
following formula:
(Eligible Base Salary Earnings) x (Target Incentive Percent) x
(Individual Performance Rating) x (Corporate/Unit Composite Rating) =
(Base Cash Award)
A. ELIGIBLE BASE SALARY EARNINGS
The Eligible Base Salary Earnings is the total amount of regular
base pay actually paid to a Plan Participant during the portion of
the year the Participant is covered by the Plan.
B. TARGET INCENTIVE PERCENT
The Target Incentive Percent shall be determined by the Senior Vice
President - Personnel using the following guidelines:
1. For Participants in evaluated jobs, the Target Incentive
Percent will be determined based on job level at the time
participation in the Plan commences. Persons transferred to
a higher or lower job level during a Plan Year will have
their Target Incentive Percent revised as of the effective
date of the change in position.
2. For Participants in unevaluated jobs, the Target Incentive
Percent shall be established in a manner consistent with the
Target Incentive Percent established for evaluated jobs.
C. INDIVIDUAL PERFORMANCE RATING
Individual performance for the Plan Year will be determined as
follows:
1. At the beginning of each Plan Year, each Participant will
develop written objectives for the year which are directly
related to specific job accountabilities.
2. The individual objectives will be reviewed with each
Participant's superior for acceptance and will become the
primary basis for establishing the Individual Performance
Rating for the year. For the Chief Executive Officer, such
objectives will be reviewed and approved by the Committee.
3. Near the end of each Plan Year, each Participant will submit
to his or her superior, a Summary of Accomplishments related
to individual performance during the year. Based on this
information and other information related to individual
performance or job accountabilities, the superior will
assign an individual rating from the following range:
.0 - .50 Unsatisfactory
.50 - .90 Improvement Needed
.90 - 1.20 Satisfactory
1.20 - 1.40 Superior
1.40 - 1.50 Outstanding & Exceptional
D. UNIT/CORPORATE PERFORMANCE RATING
1. Unit Rating
Near the end of the Plan Year, each Participant will submit
to his or her superior, a Unit Achievement Summary, which
outlines the performance of his or her respective unit
during the Plan Year and relates directly to annual program,
the Company's long-range plans and other key operating
objectives. This Unit Achievement Summary will be used,
along with other information related to unit performance, in
establishing a unit rating with a range of .0 (Unacceptable)
to 1.8 (Outstanding and Exceptional).
2. Corporate Rating
At the beginning of each Plan Year, the Committee shall
establish a rating schedule based upon the Company's growth
in Earnings Per Share (Pre-LIFO) and the Company's Return on
Capital for the Plan Year. Based on this schedule, the
Committee will, at the end of each Plan Year, establish a
corporate rating for the year.
Individual and unit ratings will be recommended by the
Participant's manager and reviewed by one additional level
of management. All individual and unit ratings for Plan
Participants will be submitted to the Company's Incentive
Committee for review and approval.
3. Unit/Corporate Weightings
The ratings established in 1. and 2. above shall be weighted
based on job level according to the following schedule:
Corporate Unit
Portion Portion
Senior Corporate Officers 100% N/A
Operating General Managers 50% 50%
and Corporate Staff Officers
All Other Officers 25% 75%
E. REVIEW AND APPROVAL OF RATINGS
All individual and unit ratings will be determined by the
Participant's manager and reviewed and approved by one
additional level of management. In addition, the Incentive
Committee shall review and approve all ratings prior to their
submissions to the Committee.
The final ratings and incentive award amounts shall be reviewed
and approved by the Committee which shall have full authority
and discretion to set all final Base Cash Awards.
All awards under this Plan for corporate officers and that
portion of the award related to corporate performance of all
other Participants (including amounts attributable to stock
matching under Part III) shall be subject to the 1933
Shareholder Resolution on Profit Sharing, as amended. All other
awards, if any, under this Plan shall be considered ordinary
bonuses under the terms and conditions of the 1933 Resolution.
PART III
STOCK MATCHING PROVISIONS
A. ALTERNATIVES FOR PARTICIPATION IN STOCK MATCHING
Subject to the provisions set forth below (the "Stock Matching
Provisions"), Participants under age 55 are eligible to receive
additional incentive compensation in the form of common stock of
General Mills, Inc. ("Common Stock") contributed by the Company
("Stock Matching"), and Participants age 55 or over may elect to
receive all or a portion of their additional incentive compensation
in the form of Stock Matching and/or an "Additional Cash Award."
1. Participants under age 55 as of the last day of the Plan
Year are eligible to participate in the Stock Matching
Provisions of the Plan by depositing shares of Common Stock
with a Fair Market Value equal to 25% of their Base Cash
Award.
2. Participants age 55 or over as of the last day of the Plan
Year may elect full, partial, or no participation in the
Stock Matching Provisions according to the following
schedule:
Fair Market
Value of Shares
Level of to be Deposited
Stock Matching as % of Base Additional
Participation Cash Award Cash Award
Full Participation 25% 0%
15% 6%
Partial Participation 10% 9%
5% 12%
No Participation
in Stock Matching 0% 15%
3. On or before the December 31 immediately preceding the end of
the Plan Year, Participants must notify the Company in writing
of the applicable participation alternatives elected under the
Stock Matching Provisions. Elections regarding Stock Matching
participation are effective for the current Plan Year.
Dividends may be paid to the Participant or reinvested, at the
election of the Participant, under the Company's Automatic
Dividend Reinvestment Plan.
B. PARTICIPATION IN STOCK MATCHING
1. The Company shall notify each Participant who participates in
the Stock Matching Provisions of the maximum number of shares
of Common Stock which they are permitted to deposit under the
Plan, and Participants may choose to deposit all or any
portion of the number of shares so permitted to be deposited
(the "Original Deposit"). Participants can make their
Original Deposit at any time after they receive their Base
Cash Award, but Participants must deposit such shares with the
Company (the "Agent") no later than the December 1 immediately
following the end of the Plan Year.
2. Any Participant who dies, retires on or after age 65, elects
early retirement after age 55, or is permanently disabled and
unable to work as determined by the Corporate Medical
Director, either during a Plan Year or prior to the final date
for depositing the Original Deposit shares for such Plan Year
(December 1), shall not be eligible to participate in the
Stock Matching Provisions, but instead, such Participant, or
the Participant's legal representative, shall receive an
Additional Cash Award for the Plan Year in an amount equal to
twenty-five percent (25%) of any Base Cash Award paid or
payable for that Plan Year.
C. DISTRIBUTIONS AND WITHDRAWALS
1. Restricted Stock
As soon as practical following the Original Deposit by a
Participant, the Company shall match these shares and deposit
with the Agent for the Participant's account one share of
Common Stock for each share of the Original Deposit. The
shares deposited by the Company shall vest and be delivered to
the Participant fifty percent (50%) after year three and fifty
percent (50%) after year six, provided the Participant's
Original Deposit has been left on deposit through the three-
year and six-year periods and all other provisions of the Plan
have been met (the "Restricted Stock").
2. Temporary Withdrawal for Option Exercise
A Participant may temporarily withdraw all or a portion of the
shares on deposit for all Plan Years (other than Restricted
Stock) in order to exercise Company stock options, subject to
an equal number of shares of Common Stock being promptly
redeposited with the Agent after such exercise.
3. Maximum Shares
Subject to the provisions in III.C.4. hereof, and subject to
the limitations contained in the 1933 Shareholder Resolution on
Profit Sharing, as amended, the maximum value, at the time of
the award, of the shares for which Restricted Stock may be
granted under the Plan in respect of any fiscal year is one and
one quarter percent (1.25%) of the earnings before taxes on
income (excluding extraordinary items) of the Company for such
fiscal year; provided, however, that in no event shall such
maximum value be greater than two and one-half percent (2.5%)
of the amount, if any, by which such earnings exceed ten
percent (10%) of total stockholders' equity of the Company as
of the beginning of such fiscal year.
4. Share Adjustment
The number of shares subject to the Plan and the outstanding
Restricted Stock may be appropriately adjusted by the Committee
in the event that:
(i) the number of outstanding shares of Common Stock
of the Company shall be changed by reason of split-ups,
combinations or reclassifications of shares;
(ii) any stock dividends are distributed to the holders
of Common Stock of the Company; or
(iii) the Common Stock of the Company is converted into
or exchanged for other shares as a result of any merger
or consolidation (including a sale of assets) or other
recapitalization.
5. Share Price
The value of the shares of Common Stock which are required for
deposit shall be equal to one hundred percent (100%) of the
Fair Market Value of the shares as of the first business day of
June of such year of deposit. "Fair Market Value," for the
purpose of the Plan, shall equal the mean of the high and low
price of the Common Stock on the New York Stock Exchange on
such date.
D. DEFINITION OF PLAN YEAR
For stock matching purposes, the Plan Year shall be defined as the
period beginning June 1 and ending May 31 of the following year.
E. VESTING AND DELIVERY OF RESTRICTED STOCK
1. Three-Year Vesting
The requirement for shares to be on deposit for three years
shall be considered to have been fulfilled if such shares are
left on deposit with the Agent until the first business day of
June of the third year following the year of deposit for such
Plan Year, on which date the three-year vesting shall occur
(except as otherwise provided in Section F of Part III).
Delivery of the shares will be made at the time the Base Cash
Awards are distributed at the end of June.
2. Six-Year Vesting
The six-year vesting requirement shall be considered to have
been fulfilled as of the first business day of June, three
years after the third-year vesting and delivery for the Plan
Year, provided the Original Deposit has been left on deposit
with the Agent until the first business day of June of the
sixth-year following the year of deposit for such Plan Year, on
which date the six-year vesting shall occur (except as
otherwise provided in Section F of Part III). Delivery of the
shares will be made at the time the Base Cash Awards are
distributed at the end of June.
F. RESTRICTED STOCK VESTING AND DELIVERY UNDER SPECIAL CONDITIONS
1. Normal Retirement, Late Retirement or Permanent Disability for
Work
Vesting and delivery of all Restricted Stock shall be made to a
Participant who retires on or after age 65 or who is
permanently disabled and unable to work (as determined by the
Corporate Medical Director) while a Participant under the Plan.
2. Early Retirement
(a) A Participant taking early retirement (after age 55) may
elect to leave stock on deposit until the Participant
reaches age 65, or, if earlier, the fulfillment of the
three-year and/or six-year vesting requirements of
Section E. of Part III.
(b) When the Participant attains age 65, if the Participant has
left the original stock on deposit, all Restricted Stock
shall vest and be delivered, unless such Restricted Stock
shall have vested and have been delivered at an earlier
date pursuant to Section E. of Part III.
(c) In the event that the Participant elects to withdraw the
Original Deposit from the account prior to age 65, and
before the three-year or six-year vesting dates, the
Participant shall vest in a proportionate number of shares
of such Restricted Stock. Such proportionate vesting shall
be the percentage of the three-year or six-year period, as
the case may be, which has already expired.
3. Death
The heirs or estate of any Participant who dies before the
three-year or six-year vesting shall vest in a proportionate
number of shares of Restricted Stock. Such proportionate
vesting shall be the pro-rata share, based on full months, of
the three-year or six-year period, as the case may be, which
has already expired.
4. Voluntary Resignation
No Participant in a Plan Year who resigns voluntarily (unless
for the convenience of the Company) shall vest in Restricted
Stock.
5. Change of Control
All Restricted Stock shall vest and be delivered to the
Participant if there is a change of control as provided in
Part V.
G. ASSIGNMENT OF PARTICIPANT'S ACCOUNTS
Participants' interests in the Original Deposit or the Restricted
Stock may not be sold, pledged, assigned or transferred in any
manner, other than by will or the laws of descent and distribution,
so long as such shares are held by the Agent, and any such sale,
pledge, assignment or other transfer shall be null and void.
PART IV
DEFERRAL OF PAYMENT OF CASH INCENTIVE AWARDS
A Participant may elect to defer all or a portion of a Base Cash Award
and any additional cash award received (collectively "Cash Award")
during each calendar year from and after January 1, 1982 in accordance
with the terms and conditions of the General Mills, Inc. Deferred
Compensation Plan.
In order to defer all or a portion of the Cash Award for a particular
calendar year, a Participant must make a valid election by executing
and filing a Deferral Election Form with the Company on or before the
December 31 immediately preceding the end of the Plan Year. If a
Participant elects to defer all or a portion of the Cash Award for a
particular year, the Participant shall automatically become a
participant in the General Mills, Inc. Deferred Compensation Plan, and
any amounts so deferred shall be subject to the provisions of such
plan.
PART V
PLAN ADMINISTRATION
This Plan shall be effective in each fiscal year of the Company and
shall be administered by the Committee and the Committee shall have
full authority to interpret the Plan. Such interpretations of the
Committee shall be final and binding on all parties, including the
Participants, survivors of the Participant, and the Company.
The Committee shall have the authority to delegate the duties and
responsibilities of administering the Plan, maintaining records,
issuing such rules and regulations as it deems appropriate, and making
the payments hereunder to such employees or agents of the Company as it
deems proper, but only to the extent such delegation does not adversely
affect the ability of the Plan to comply with the conditions for
exemption from Section 16 of the Securities Exchange Act of 1934 (or
any successor provisions).
The Board, or if specifically delegated, its delegate, may amend,
modify or terminate the Plan at any time, provided, however, that no
such amendment, modification or termination shall adversely affect any
accrued benefit under the Plan to which a Participant, or the
Participant's beneficiary, is entitled prior to the date of such
amendment or termination, unless the Participant, or the Participant's
beneficiary, becomes entitled to an amount equal to the value of such
benefit under another plan, program or practice adopted by the Company.
Notwithstanding the above, no amendment, modification, or termination
which would affect benefits accrued under this Plan prior to such
amendment, modification or termination may occur after a Change of
Control without the written consent of a majority of the Participants
determined as of the day before such Change of Control.
A Change of Control shall mean the occurrence of any of the following
events:
(a) any person (including a group as defined in Section 13(d)(3)
of the Securities Exchange Act of 1934) becoming, directly or
indirectly, the beneficial owner of twenty percent (20%) or
more of the shares of stock of General Mills, Inc. entitled to
vote for the election of directors;
(b) as a result of or in connection with any cash tender offer,
exchange offer, merger or other business combination, sale of
assets or contested election, or combination of the foregoing,
the persons who were directors of the Company just prior to
such event shall cease to constitute a majority of the
Company's Board of Directors; or
(c) the stockholders of the Company approve an agreement providing
for a transaction in which the Company will cease to be an
independent publicly-owned corporation or a sale or other
disposition of all or substantially all of the assets of the
Company occurs.
In the event the Company shall effect one or more changes, split-ups
or combinations of shares of Common Stock or one or more other like
transactions, the Board or the Committee may make such adjustment,
upward or downward, in the number of shares of Common Stock to be
deposited by the Participants as shall appropriately reflect the
effect of such transactions.
In the event the Company shall distribute shares of a subsidiary of
the Company to its stockholders in a spin-off transaction, the shares
of stock of the subsidiary distributed to
Participants which are attributable to Restricted Stock shall be
vested and delivered to the Participants subject to any specific
instructions of the Committee.
Neither any benefit payable hereunder nor the right to receive any
future benefit under the Plan may be anticipated, alienated, sold,
transferred, assigned, pledged, encumbered, or subjected to any charge
or legal process, and if any attempt is made to do so, or a person
eligible for any benefits becomes bankrupt, the interest under the
Plan of the person affected may be terminated by the Committee which,
in its sole discretion, may cause the same to be held or applied for
the benefit of one or more of the dependents of such person or make
any other disposition of such benefits that it deems appropriate.
With respect to persons subject to Section 16 of the Securities
Exchange Act of 1934 ("1934 Act"), transactions under the Plan are
intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the 1934 Act. To the extent any provision of the
Plan or action by the Committee fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed advisable by
the Committee.
All questions pertaining to the construction, validity and effect of
the Plan shall be determined in accordance with the laws of the United
States and the laws of the State of Minnesota.