UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
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Check the appropriate box:
[_] Preliminary Proxy Statement [_] Soliciting Material Pursuant to
[_] Confidential, For Use of the SS.240.14a-11(c) or SS.240.14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
GENERAL MILLS, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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[LOGO] GENERAL MILLS NOTICE OF
2001 ANNUAL MEETING
OF STOCKHOLDERS
AND PROXY STATEMENT
MEETING DATE:
Monday, September 24, 2001
at 11:00 a.m. (CDT)
MEETING PLACE:
Children's Theatre Company
Minneapolis, Minnesota
(This page has been left blank intentionally.)
GENERAL MILLS, INC.
P.O. Box 1113
Minneapolis, MN 55440
STEPHEN W. SANGER
Chairman of the Board and
Chief Executive Officer
[LOGO] GENERAL MILLS
August 15, 2001
Dear Stockholder:
It is my pleasure to invite you to General Mills' 2001 Annual Meeting of
Stockholders. We will hold the meeting in the auditorium of the Children's
Theatre Company, 2400 Third Avenue South, Minneapolis, Minnesota, on Monday,
September 24, 2001, at 11:00 a.m. Central Daylight Time. During the meeting, we
will discuss each item of business described in this Notice of Annual Meeting of
Stockholders and Proxy Statement and give a current report on our business
operations. There also will be time for questions. We expect the meeting to
adjourn at about 12:15 p.m.
This booklet includes the Notice of Annual Meeting as well as Proxy Statement,
which provides information about General Mills in addition to describing the
business we will conduct at the meeting.
WE HOPE YOU WILL BE ABLE TO ATTEND THE ANNUAL MEETING. IF YOU NEED SPECIAL
ASSISTANCE AT THE MEETING BECAUSE OF A DISABILITY, PLEASE CONTACT THE COMPANY
SECRETARY AT THE ADDRESS ABOVE. WHETHER OR NOT YOU EXPECT TO ATTEND, PLEASE VOTE
YOUR PROXY BY TELEPHONE IF YOU RESIDE IN THE UNITED STATES OR CANADA, OR VIA THE
INTERNET (SEE THE INSTRUCTIONS ON THE PROXY CARD), OR SIGN AND MAIL THE PROXY
CARD IN THE ENCLOSED ENVELOPE SO YOUR SHARES WILL BE VOTED AT THE MEETING.
Sincerely,
/s/ S. W. Sanger
ii
TABLE OF CONTENTS
PAGE
Notice of 2001 Annual Meeting of Stockholders .............................. iv
Questions and Answers about the Annual Meeting and Voting .................. 1
Proposals You Are Asked to Vote On ......................................... 5
Information about Nominees for the Board of Directors ...................... 7
Corporate Governance at General Mills ...................................... 10
Board Committees and Their Functions ....................................... 12
Director Compensation and Benefits ......................................... 14
Stock Ownership of General Mills Directors and Officers .................... 15
Report of the Audit Committee .............................................. 16
Description of the General Mills, Inc. 2001 Compensation Plan for
Non-Employee Directors .................................................... 17
Stockholder Proposal on Genetic Engineering in Food Products ............... 19
Total Return to Stockholders ............................................... 21
Report of Compensation Committee on Executive Compensation ................. 22
Executive Compensation ..................................................... 25
Summary Compensation Table ............................................... 25
Option Grants in Last Fiscal Year ........................................ 26
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End
Option Values ........................................................... 27
Defined Benefit Retirement Plan .......................................... 27
Change of Control Arrangements ........................................... 28
Other Matters .............................................................. 28
Section 16(a): Beneficial Ownership Reporting Compliance ................. 28
Costs of Solicitation .................................................... 28
Delivery and Viewing of Proxy Materials .................................. 28
Annual Report ............................................................ 29
Appendices:
General Mills, Inc. Audit Committee Charter .............................. A-1
General Mills, Inc. 2001 Compensation Plan for Non-Employee Directors .... B-1
iii
GENERAL MILLS, INC.
P.O. Box 1113
Minneapolis, MN 55440
Siri S. Marshall
Secretary
[LOGO] GENERAL MILLS
NOTICE OF
2001 ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 24, 2001
August 15, 2001
Dear Stockholder:
The Annual Meeting of Stockholders of General Mills, Inc., will be held on
Monday, September 24, 2001, at 11:00 a.m., Central Daylight Time, in the
auditorium of the Children's Theatre Company, 2400 Third Avenue South,
Minneapolis, Minnesota. The purpose of the meeting is to:
1. Elect 11 directors;
2. Approve KPMG LLP as General Mills' independent auditors for fiscal year
2002;
3. Adopt the General Mills, Inc., 2001 Compensation Plan for Non-Employee
Directors;
4. Act on a stockholder proposal concerning genetically engineered food
products, if presented; and
5. Act on any other proper business of the meeting.
The record date for the annual meeting is July 26, 2001. If you held General
Mills stock at the close of business on that date, or, on that date still held
shares of Ralcorp Holdings, Inc. common stock that can be exchanged for General
Mills stock as a result of the Company's 1997 acquisition of the Ralcorp branded
cereal and snack businesses, you can vote at the annual meeting.
At the meeting, we also will report on General Mills' 2001 business results and
other matters of interest to stockholders.
Sincerely,
/s/ Siri S. Marshall
iv
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GENERAL MILLS, INC.
PROXY STATEMENT
FOR 2001 ANNUAL MEETING OF STOCKHOLDERS
MONDAY, SEPTEMBER 24, 2001
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
Q: WHY DID I RECEIVE THIS PROXY STATEMENT?
A: Because you are a General Mills stockholder as of the record date and are
entitled to vote at the 2001 Annual Meeting of Stockholders, or you own
unexchanged shares of common stock of Ralcorp Holdings, Inc., the Board of
Directors is soliciting your proxy to vote at the meeting.
This Proxy Statement summarizes the information you need to know to vote at
the annual meeting. You do not need to attend the annual meeting to vote
your shares. We first mailed the Proxy Statement and proxy card to
stockholders on or about August 15, 2001.
Q: WHAT AM I VOTING ON?
A: 1. The election of directors;
2. The approval of the appointment of our independent auditors for fiscal
year 2002; and
3. The adoption and approval of the General Mills, Inc. 2001 Compensation
Plan for Non-Employee Directors (the "Directors' Plan").
THE BOARD RECOMMENDS A VOTE FOR EACH OF THE NOMINEES TO THE BOARD OF
DIRECTORS, FOR THE APPOINTMENT OF KPMG LLP AS INDEPENDENT AUDITORS FOR
FISCAL YEAR 2002 AND FOR APPROVING THE DIRECTORS' PLAN.
4. A stockholder proposal concerning genetically engineered food
products, if presented.
THE BOARD RECOMMENDS A VOTE AGAINST THE STOCKHOLDER PROPOSAL.
Q: WHO IS ENTITLED TO VOTE?
A: Record holders of General Mills common stock at the close of business on
July 26, 2001, and holders of Ralcorp Holdings, Inc. common stock eligible
to be exchanged for General Mills common stock, may vote at the meeting. On
July 26, 2001, 284,856,362 shares of common stock, including 16,180 shares
of General Mills common stock set aside for the exchange of 56,036 shares
of Ralcorp Holdings, Inc. common stock, were outstanding. The shares of
common stock in the Company's treasury on that date will not be voted.
Q: HOW DO I VOTE?
A: If you are a stockholder of record or hold stock through the General Mills
VIP 401(k) Plan, you may vote using any of the following methods:
* Via the Internet, by going to the Web address
http://www.eproxy.com/gis/ and following the instructions for Internet
voting on the proxy card;
* If you reside in the United States and Canada, by dialing
1-800-240-6326 and following the instructions for telephone voting on
the proxy card;
* By completing and mailing your proxy card; or
* By casting your vote in person at the meeting.
Telephone and Internet voting facilities for stockholders of record will
close at noon EDT on Sunday, September 23, 2001.
If you return your signed proxy card or use Internet or telephone voting
before the annual meeting, we will vote your shares as you direct. You have
three choices on each matter to be voted upon. For the election of
directors, you may vote for 1) all of the nominees, 2) none of the nominees
or 3) all of the nominees except those you designate. See Item No. 1 on
page 5 and Information About Nominees for the Board of Directors beginning
on page 7. For the other items, you may vote (or abstain) by choosing FOR,
AGAINST or ABSTAIN.
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If you do not specify on your returned proxy card or through Internet or
telephone prompts how you want to vote your shares, we will vote them FOR
the election of all director nominees, FOR approval of the auditors, FOR
approval of the Directors' Plan and AGAINST the stockholder proposal.
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If your shares are held in a brokerage account in your broker's 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 via 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.
Ballots will be passed out during the meeting to anyone who wants to vote
in person at the meeting. If you hold your shares in street name, you must
request a legal proxy from your broker to vote in person at the meeting.
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 meeting by:
* Sending written notice of revocation to the Company Secretary;
* Submitting a properly signed proxy with a later date;
* Voting by telephone or via the Internet at a time following your prior
telephone or Internet vote; or
* Voting in person at the annual meeting.
You also may be represented by another person at the meeting by executing a
proper proxy designating that person.
Q: HOW WILL MY DIVIDEND REINVESTMENT PLAN AND GENERAL MILLS VIP 401(k) PLAN
SHARES BE VOTED?
A: We have added the shares of common stock held by participants in the
Company's dividend reinvestment plan (including shares acquired through
employee payroll deductions) to the participants' other holdings shown on
their proxy cards. If a stockholder has common stock in the General Mills
VIP 401(k) Plan, the proxy also serves as voting instructions to the plan
trustee. The plan trustee, Boston Safe Deposit and Trust Company, will vote
allocated shares of common stock for which it has not received direction,
as well as shares not allocated to individual participant accounts, in the
same proportion as directed shares are voted.
Q: WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?
A: It means you have multiple accounts at the transfer agent and/or with banks
or stockbrokers. Please vote all of your shares.
Q: WHAT WILL HAPPEN IF I DO NOT VOTE MY SHARES?
A: 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 MEETING?
A: At least half of General Mills' outstanding common shares (including those
shares set aside for the exchange of shares of Ralcorp Holdings, Inc.
common stock) as of the record date must be present at the meeting in order
to hold the meeting and conduct business. This is called a quorum. We will
count your shares as present at the meeting if you:
* Are present and vote in person at the meeting; or
* Have properly submitted a proxy card or voted over the telephone or
the Internet on a timely basis.
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Q: HOW MANY VOTES ARE NEEDED TO APPROVE EACH ITEM?
A: The vote of a plurality of the shares of common stock present or
represented and entitled to vote at the meeting is required for election as
a director. This means that, since stockholders will be electing 11
directors, the 11 nominees receiving the most votes will be elected.
Approvals of the appointment of the independent auditors, the Directors'
Plan and the stockholder proposal each require the affirmative vote of a
majority of shares entitled to vote and represented at the meeting in
person or by proxy.
Q: HOW WILL VOTING ON ANY OTHER BUSINESS BE CONDUCTED?
A: We do not know of any business to be considered at the 2001 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 Stephen W. Sanger, Stephen R. Demeritt and Raymond
G. Viault 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.
Although abstentions and proxies that withhold authority to vote on the
election of directors are counted as present or represented at the meeting
to determine whether there is a quorum under the Company's bylaws, they are
treated as shares not voted 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. In this situation, a broker non-vote occurs. Broker non-votes
effectively reduce the number of shares needed to approve a proposal. New
York Stock Exchange rules permit brokers discretionary authority to vote on
Proposals 1 through 3 at the annual meeting, if they do not receive
instructions from the street name holder of the shares. As a result, if you
do not vote your street name shares, your broker has authority to vote on
your behalf. Brokers will not have discretionary authority to vote on
Proposal 4 and will not vote on Proposal 4 unless they receive instructions
from the beneficial holder of shares held in street name.
The Company has a policy of confidential voting; Wells Fargo Bank Minnesota
tabulates the votes received.
Q: WHO MAY ATTEND THE ANNUAL MEETING?
A: All General Mills stockholders as of the close of business on July 26, 2001
may attend.
Q: WHERE DO I FIND THE VOTING RESULTS OF THE MEETING?
A: In January 2002, we expect to send each stockholder a midyear report
describing the results of the meeting. We also will publish the voting
results in our Form 10-Q for the second quarter of fiscal 2002, which we
will file with the Securities and Exchange Commission in January 2002. You
can also go to our Web site at: http://www.generalmills.com.
3
Q: WHO ARE THE LARGEST STOCKHOLDERS?
A: For the quarter ended March 31, 2001, Capital Research and Management
Company, 333 South Hope Street, 52nd Floor, Los Angeles, CA 90071, filed a
Form 13F with the SEC indicating that it held approximately 23,438,500
shares of General Mills common stock (8.2% of the outstanding common
stock). In its SEC filings, Capital Research and Management Company
indicates that the shares it holds are solely for investment purposes in
the ordinary course of business.
The Company does not know of any other holder of more than 5 percent of the
outstanding shares of General Mills common stock.
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 20, 2002. Please address
your proposal to: Company Secretary, General Mills, Inc., P.O. Box 1113,
Minneapolis, MN 55440.
Under our bylaws, if you wish to nominate a director or bring other
business before the stockholders at our 2002 annual meeting without having
your proposal included in our Proxy Statement:
* You must notify the Company Secretary of General Mills in writing
between May 26, 2002, and June 25, 2002.
* Your notice must contain the specific information required in our
bylaws.
Please note that these two requirements relate only to matters you wish to
bring before the stockholders at an annual meeting. They do not apply to
proposals that you wish to have included in our Proxy Statement.
If you would like a copy of our bylaws, we will send you one without
charge. Please write to the Company Secretary of General Mills at the
address shown above.
4
PROPOSALS YOU ARE ASKED TO VOTE ON
ITEM NO. 1
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ELECTION OF DIRECTORS
Eleven current directors are recommended for election to the Board of Directors
at the annual meeting. Detailed information on all of these nominees is provided
on pages 7 through 9. Directors are elected for a one-year term and serve until
the next annual meeting where their successors are elected, or, if earlier,
until their resignation or removal. If unforeseen circumstances (such as death
or disability) make it necessary for the Board of Directors to substitute
another person for any of the nominees, we will vote your shares for that other
person unless you instruct us otherwise on your proxy card.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH DIRECTOR
NOMINEE.
ITEM NO. 2
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APPROVAL OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The Audit Committee of the Board of Directors recommends to the Board and the
Board selects and hires the independent public accountants to audit the
Company's books, subject to ratification by the stockholders. The Audit
Committee recommends and the Board has selected KPMG LLP to audit the Company's
consolidated financial statements for the fiscal year beginning May 28, 2001.
KPMG has audited the books of the Company since 1928.
INDEPENDENT AUDITOR FEES
The aggregate fees billed to the Company for fiscal year ended May 27, 2001 by
KPMG LLP, the Company's principal accounting firm, are as follows:
IN THOUSANDS
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* Audit Fees $ 600
* Financial Information Systems Design and Implementation Fees $ 0
* All Other Fees (primarily audit and tax-related services) $1,300
The Audit Committee has considered whether performance of services other than
audit services is compatible with maintaining the independence of KPMG LLP.
Representatives of KPMG LLP will attend the annual meeting, where they will have
the opportunity to make a statement and answer questions. If the stockholders
were to fail to ratify the appointment of KPMG LLP, the Audit Committee would
reconsider its recommendation.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPOINTMENT OF
KPMG LLP AS INDEPENDENT AUDITORS FOR FISCAL YEAR 2002.
ITEM NO. 3
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ADOPTION OF THE GENERAL MILLS, INC. 2001 COMPENSATION PLAN FOR NON-EMPLOYEE
DIRECTORS
The General Mills, Inc. 2001 Compensation Plan for Non-Employee Directors
("Directors' Plan") is presented to the stockholders for their approval.
The Directors' Plan provides a compensation program to attract and retain
qualified individuals not employed by the Company to serve on its Board of
Directors. The Plan is intended to replace the General Mills, Inc. 1996
Compensation Plan for Non-Employee Directors, which terminates on September 30,
2001. More detailed information about the Directors' Plan can be found on pages
17 and 18.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ADOPTION OF
THE GENERAL MILLS, INC. 2001 COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS.
5
ITEM NO. 4
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STOCKHOLDER PROPOSAL ON LABELING GENETICALLY ENGINEERED FOOD PRODUCTS
The Camilla Madden Charitable Trust, c/o Adrian Dominican Sisters, Joan Inman,
c/o Harrington Investments, the Sisters of Mercy Regional Community of Detroit
and CHRISTUS Health have proposed that the Board of Directors adopt a policy to
label genetically engineered food products. More detailed information about the
proposal and the Board of Directors' response to it can be found on pages 19 and
20.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THE PROPOSAL.
IF YOU SIGN AND RETURN THE PROXY CARD, OR USE TELEPHONE OR INTERNET VOTING, BUT
DO NOT SPECIFY HOW YOU WANT TO VOTE YOUR SHARES ON ANY PARTICULAR MATTER, WE
WILL VOTE YOUR SHARES FOR THE ELECTION OF EACH DIRECTOR NOMINEE, FOR THE
APPOINTMENT OF KPMG LLP AS THE INDEPENDENT AUDITORS, FOR THE ADOPTION OF THE
DIRECTORS' PLAN FOR NON-EMPLOYEE DIRECTORS AND AGAINST THE STOCKHOLDER PROPOSAL.
OTHER BUSINESS
We do not know of any other matters to be presented at the meeting. If any other
matter is properly presented for a vote at the meeting, your shares will be
voted by the holders of the proxies using their best judgment.
6
INFORMATION ABOUT NOMINEES FOR THE BOARD OF DIRECTORS
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[PHOTO] STEPHEN R. DEMERITT Director since 1999
Stephen R. Demeritt, age 57, is Vice Chairman of the Company, with
responsibility for General Mills' worldwide cereal, snacks and yogurt
businesses, General Mills Canada, Consumer Insights and Advertising. He
has served as Vice Chairman since October 1999. Mr. Demeritt joined
General Mills in 1969 and served in a variety of consumer food
marketing positions. He was president of International Foods from 1991
to 1993 and from 1993 to 1999 was Chief Executive Officer of Cereal
Partners Worldwide, our global cereal joint venture with Nestle.
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[PHOTO] LIVIO D. DESIMONE Director since 1989
Livio D. DeSimone, age 65, is the retired Chairman of the Board and
Chief Executive Officer, Minnesota Mining and Manufacturing Company
(3M). Mr. DeSimone joined 3M in 1957 and served in various U.S. and
international capacities. Mr. DeSimone was elected an Executive Vice
President in 1981 and served as Chairman and Chief Executive Officer
from 1991 until his retirement in January 2001. Mr. DeSimone is a
director of Cargill Incorporated, Target Corporation, Vulcan Materials
Company, Milliken & Company and American Express Funds.
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[PHOTO] WILLIAM T. ESREY Director since 1989
William T. Esrey, age 61, is Chairman and Chief Executive Officer of
Sprint Corporation, a telecommunications company. Mr. Esrey has been
Chairman of Sprint since 1990 and Chief Executive Officer since 1985.
He is a director of Sprint, Duke Energy Corp. and Exxon Mobil
Corporation.
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[PHOTO] RAYMOND V. GILMARTIN Director since 1998
Raymond V. Gilmartin, age 60, has been Chairman of the Board, President
and Chief Executive Officer of Merck & Company, Inc., a pharmaceutical
company, since November 1994. He previously served as Chairman,
President and Chief Executive Officer of Becton Dickinson and Company.
Mr. Gilmartin is a director of Microsoft Corporation, the
Pharmaceutical Research and Manufacturers of America, Public Service
Enterprise Group, and a member of The Business Council and The Business
Roundtable.
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[PHOTO] JUDITH RICHARDS HOPE Director since 1989
Judith Richards Hope, age 60, is a partner in the law firm of Paul,
Hastings, Janofsky & Walker LLP, Los Angeles, California and
Washington, DC. Ms. Hope is a director of Union Pacific Corporation,
The Budd Company, and Russell Reynolds Associates. She also is Chairman
of the National Housing Partnership Foundation and a director of the
American Red Cross and of Harvard Medical International.
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[PHOTO] ROBERT L. JOHNSON Director since 1999
Robert L. Johnson, age 55, is founder and Chief Executive Officer of
Black Entertainment Television, a subsidiary of Viacom, Inc., which
produces and distributes entertainment, news, sports, music and
advertising through broadcast media, cable television and online
communications. He previously held positions with the National Cable
Television Association and the Corporation for Public Broadcasting. Mr.
Johnson is a director of US Airways and the Hilton Hotels Corporation.
He serves on the boards of the United Negro College Fund, the National
Cable Television Association and the American Film Institute. Mr.
Johnson also is a member of the Board of Governors for the Rock and
Roll Hall of Fame and the Brookings Institution.
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[PHOTO] HEIDI G. MILLER Director since 1999
Heidi G. Miller, age 48, is Vice Chairman, Marsh, Inc, a risk advice
and insurance brokerage subsidiary of Marsh & McLennan Companies, Inc.
Ms. Miller joined the company in January 2001. From March 2000 to
November 2000, she was Senior Vice President and Chief Financial
Officer of priceline.com. Prior to March 2000, Ms. Miller was Executive
Vice President and Chief Financial Officer of Citigroup Inc., which was
formed through the merger of Citibank and Travelers Group. She joined
Travelers Group in 1992 as Vice President of Planning and Analysis and
Assistant to the President and was promoted to Executive Vice President
and Chief Financial Officer in 1995. Ms. Miller is a trustee of
Princeton University and is a director of Merck & Company, Inc., Mead &
Co., Bank One Corporation and the NYU School of Medicine Foundation.
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[PHOTO] STEPHEN W. SANGER Director since 1992
Stephen W. Sanger, age 55, has been Chairman and Chief Executive
Officer of General Mills since 1995. Mr. Sanger joined the Company in
1974 and served as the head of several business units, including
Yoplait USA and Big G. He was elected a Senior Vice President in 1989,
an Executive Vice President in 1991, Vice Chairman in 1992 and
President in 1993. He is a director of Target Corporation and Donaldson
Company, Inc.
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[PHOTO] A. MICHAEL SPENCE Director since 1992
Dr. A. Michael Spence, age 57, is a professor emeritus at the Graduate
School of Business at Stanford University and served as its Dean from
1990 to August 1999. Dr. Spence served on the faculty at Harvard
University in both the Business School and the Faculty of Arts and
Sciences as professor of economics and business administration from
1975 to 1990. From 1984 to 1990, he served as the Dean of the Faculty
of Arts and Sciences at Harvard. He is a director of Nike, Inc., Siebel
Systems, Inc., Torstar, Exult, Inc., and Blue Martini Software, Inc.
Dr. Spence is a Fellow of the Econometric Society and the American
Academy of Arts and Sciences and is former Chairman of the National
Research Council Board on Science, Technology and Economic Policy.
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[PHOTO] DOROTHY A. TERRELL Director since 1994
Dorothy A. Terrell, age 56, is Senior Vice President, Worldwide Sales,
and President, Services Group, of NMS Communications, a producer of
hardware and software component products for telecommunications
applications. Ms. Terrell joined the company in 1998. She previously
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 Sears Roebuck and Company and Herman
Miller, Inc., and is on the board of the National Housing Partnership
Foundation.
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[PHOTO] RAYMOND G. VIAULT Director since 1996
Raymond G. Viault, age 57, is Vice Chairman of the Company with
responsibility for Betty Crocker Meals, General Mills Baking Products
and Foodservice. Mr. Viault is also responsible for leading General
Mills' integration effort in connection with the Pillsbury acquisition.
Mr. Viault joined the Company as Vice Chairman in 1996 from Philip
Morris, where he had been based in Zurich, Switzerland, serving since
1990 as President of Kraft Jacobs Suchard. Mr. Viault was with Kraft
General Foods a total of 20 years, serving in a variety of major
marketing and general management positions. Mr. Viault serves on the
Board of Overseers for the Columbia Graduate School of Business, the
board of trustees for Lawrenceville School and the board of directors
of TechnoServe and The United Way of Minneapolis.
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9
CORPORATE GOVERNANCE AT GENERAL MILLS
General Mills has a long-standing commitment to good corporate governance
practices. These practices provide an important framework within which the Board
and management can pursue the strategic objectives of the Company and ensure its
long-term vitality for the benefit of stockholders. Our corporate governance
principles and practices described below have evolved over many years, and they
will continue to be changed and supplemented as appropriate. Their unchanging,
fundamental premise, however, is the independent nature of the Board and its
overarching responsibility to the Company's stockholders.
BOARD COMPOSITION AND INDEPENDENCE
* The Board believes that a substantial majority of its members should be
independent, non-employee directors. Currently, 8 out of 11 directors are
independent outsiders.
* All Board committees except the Executive Committee are composed entirely
of independent, non-employee directors.
- Committee and committee chair assignments are reviewed regularly, and
assignments are rotated to ensure that each committee has an
appropriate mix of tenure and experience.
* All directors are elected annually.
* Overall Board composition guidelines require a breadth of experience from a
variety of industries and from professional disciplines such as finance,
academia, law and government, along with a diversity of gender, ethnicity,
age and geographic location. Final approval of director nominees is
determined by the full Board, based on recommendation of the Nominating
Committee.
* Well-defined selection criteria for individual directors stress
independence, integrity, experience and sound judgment in areas relevant to
the Company's businesses, a proven record of accomplishment, willingness to
speak one's mind and commit sufficient time to the Board, and the ability
to challenge and stimulate management.
* To ensure an appropriate balance between new perspectives and experienced
directors:
- Non-employee directors serve no more than 15 years and retire at age
70, or up to five years following normal retirement from their
principal organization, whichever first occurs.
- Non-employee directors are expected to offer their resignation
whenever their principal employment or affiliation changes after
joining the Board, and the Nominating Committee then decides whether
the director should continue to serve.
BOARD PERFORMANCE AND OPERATIONS
* Board meetings and background materials sent to directors focus on the
Company's key strategic, leadership and performance issues.
- Each year, the Board has formal reviews and discussions of the
Company's annual and longer-term strategic plans and the Company's
management development and succession plans.
- Focused discussions of individual businesses and key issues are held
throughout the year, and extended off-site sessions are held
periodically for in-depth reviews of key strategic themes. The Board
also regularly reviews the Company's performance compared to its
competitive peer companies.
- Committee responsibilities are detailed in their charters, and reports
of committee meetings are given to the full Board, which acts on their
recommendations, as appropriate.
* The agenda and content of Board and committee meetings are developed
through discussions between management and Board members.
* Executive sessions are held at each Board meeting, and at least once a
year, outside directors meet formally without the Chief Executive Officer
and other management directors. This session is led by the Chair of the
Compensation Committee and includes the CEO's annual performance and
compensation review and his performance objectives for the next fiscal
year. Additional meetings of non-employee directors may be held from time
to time, as appropriate.
10
* The Nominating Committee has responsibility for corporate governance and
Board organization and procedures. A formal evaluation of these areas is
conducted regularly, with a written evaluation from each Board member to
enhance Board effectiveness. Recommended changes are considered by the full
Board.
ALIGNMENT WITH STOCKHOLDER INTERESTS
* Each director is expected to represent the interests of all stockholders,
and not those of any particular stockholder or any single interest group.
* A substantial portion of director compensation is linked to the Company's
stock performance, and directors can elect to receive their entire Board
remuneration in stock and stock-related compensation. Directors are
expected to keep all of the net shares they receive as compensation until
they own shares equal in market value to at least five times their annual
cash retainer.
* The Board supports and oversees employee compensation programs that are
closely linked to business performance and emphasize equity ownership,
including stock ownership targets, for key management employees. For more
details, see the Compensation Committee Report on pages 22 through 24.
* Senior management meets regularly with major institutional investors and
stockholders, and reports to the Board on analyst and stockholder views of
the Company.
11
BOARD COMMITTEES AND THEIR FUNCTIONS
- --------------------------------------------------------------------------------
AUDIT COMMITTEE
Members: Five non-employee directors:
A. Michael Spence (Chair), Livio D. DeSimone, Raymond V. Gilmartin,
Robert L. Johnson, Dorothy A. Terrell. Each member is an independent
director as defined by New York Stock Exchange listing standards.
Number of Meetings in fiscal year 2001: Three
Functions: * Oversees integrity, adequacy and effectiveness of internal
controls, audits, compliance program and financial reporting
process
* Assesses and ensures the independence and evaluates the
performance of the independent auditors, and recommends
independent auditors for the annual audit, subject to Board
appointment and stockholder approval
* Meets separately without management present and with the
independent auditors to consult with the auditors and review the
scope of their audit
* Reviews the Company's annual risk assessment process and policy
compliance
* Reviews and approves the Company's annual audited financial
statements before issuance, subject to Board of Directors'
approval
Charter: A copy of the Audit Committee charter may be found in Appendix A to
this Proxy Statement.
- --------------------------------------------------------------------------------
COMPENSATION COMMITTEE
Members: Five non-employee directors:
Livio D. DeSimone (Chair), William T. Esrey, Raymond V. Gilmartin,
Heidi G. Miller, A. Michael Spence
Number of Meetings in fiscal year 2001: Two
Functions: * Reviews compensation policies of the Company to ensure they
provide appropriate motivation for corporate performance and
increased stockholder value; determines compensation policy for
executives
* Conducts performance review of the chairman; recommends
compensation of the Board members, including the chairman and the
management members of the Board, and approves compensation and
stock grants to other senior executives
- --------------------------------------------------------------------------------
EXECUTIVE COMMITTEE
Members: Seven directors:
Stephen W. Sanger (Chair), Stephen R. Demeritt, Livio D. DeSimone,
William T. Esrey, Judith Richards Hope, A. Michael Spence, Raymond G.
Viault
Number of Meetings in fiscal year 2001: None
Functions: * May take all action that could be taken by full Board, other than
those for which Delaware law requires full Board action
* May meet between regular Board meetings to take action necessary
for the Company to operate efficiently
- --------------------------------------------------------------------------------
12
- --------------------------------------------------------------------------------
FINANCE COMMITTEE
Members: Four non-employee directors:
William T. Esrey (Chair), Judith Richards Hope, Heidi G. Miller,
Dorothy A. Terrell
Number of Meetings in fiscal year 2001: One
Functions: * Reviews financial policies and performance objectives, including
dividend policy
* Reviews changes in the Company's capital structure, including
debt issuances, common stock sales, repurchases and stock splits
- --------------------------------------------------------------------------------
NOMINATING COMMITTEE
Members: Five non-employee directors:
Raymond V. Gilmartin (Chair), William T. Esrey, Judith Richards Hope,
Robert L. Johnson, A. Michael Spence
Number of Meetings in fiscal year 2001: None
Functions: * Recommends candidates for election to the Board
* Develops policy on composition, participation and size of Board
as well as tenure and retirement of directors
* Recommends changes in the organization and procedures of the
board, including corporate governance
The Nominating Committee will consider director candidates proposed by
stockholders. Candidates must be highly qualified and exhibit both willingness
and interest in serving on the Board. Candidates should represent the interests
of all stockholders and not those of a special interest group. A stockholder
wishing to nominate a candidate should forward the candidate's name and a
detailed background of the candidate's qualifications to the Secretary of the
Company, taking into consideration the criteria for new directors as described
on page 10.
- --------------------------------------------------------------------------------
PUBLIC RESPONSIBILITY COMMITTEE
Members: Five non-employee directors:
Judith Richards Hope (Chair), Livio D. DeSimone, Robert L. Johnson,
Heidi G. Miller, Dorothy A. Terrell
Number of Meetings in fiscal year 2001: None
Functions: * Reviews public policy and social trends affecting the Company
* Monitors the Company's corporate citizenship activities
* Evaluates Company policies to ensure they meet ethical
obligations to employees, consumers and society
- --------------------------------------------------------------------------------
During the fiscal year ended May 27, 2001, the Board of Directors met seven
times, including a special meeting, and various committees of the Board met a
total of six times. Director attendance at all Board and committee meetings
averaged 90 percent. Ms. Terrell attended 64 percent of all Board and committee
meetings. Her absences were due to business conflicts.
13
DIRECTOR COMPENSATION AND BENEFITS
General Mills structures director compensation to attract and retain qualified
non-employee directors and to further align the interests of directors with the
interests of stockholders by linking a portion of their compensation to stock
performance. Employee directors do not receive additional compensation for
serving on the Board. If they choose, non-employee directors can receive the
entire amount of their Board remuneration in stock and stock-related
compensation. Directors are expected to keep all of the net shares they receive
as Board compensation until they own shares equal in market value to at least
five times their annual cash retainer. The Company does not have a retirement
plan for its non-employee directors.
NEW COMPENSATION PLAN. The current compensation plan for non-employee directors
expires on September 30, 2001. Stockholders are being asked to adopt the 2001
Compensation Plan for Non-Employee Directors as a replacement for the current
plan. Under the 2001 Plan, there is no change in the type of awards, amount of
compensation or number of shares granted to non-employee directors. (See pages
17 and 18 for more detailed information).
ANNUAL RETAINER. In fiscal 2001, non-employee directors each received an annual
retainer of $50,000. The Company does not pay separate fees for meeting
attendance or chairmanships.
Directors can elect to have annual retainer amounts paid quarterly in cash or
Company common stock of equal value, or they can defer payment until a later
date. If payment is deferred, the deferred amount earns interest based on the
directors' selection from a group of funds offered to employees participating in
the Company's deferred compensation plan. One of these funds tracks the return
on the Company's common stock.
In fiscal 2001, L. D. DeSimone elected to receive all of his annual retainer in
common stock; W. T. Esrey, J. R. Hope, R. L. Johnson and D. A. Terrell received
cash payments; H. G. Miller, and A. M. Spence deferred cash payments; and R. V.
Gilmartin received 50 percent in common stock and 50 percent in cash.
STOCK UNITS. Each year they are elected to the Board, non-employee directors
receive 1,000 stock units. Stock units vest at the next annual stockholders'
meeting, and receipt of shares of common stock upon vesting can be deferred
until a later date. Stock units earn amounts equal to the dividend payments on
the Company's common stock. These amounts can be reinvested or paid to the
director.
STOCK OPTIONS. Non-employee directors also receive options to purchase 10,000
shares of Company common stock each time they are elected to the Board. The
per-share price the director pays at exercise is the market price of the common
stock on the date of the grant. The option becomes exercisable at the next
annual meeting and expires 10 years after grant.
OTHER BENEFITS. The Company also has a planned gift program for non-employee
directors that is funded by Company-paid life insurance policies on all
directors. Upon the death of a director, the Company donates $1 million to a
qualifying charity recommended by the director. The Company is then reimbursed
by life insurance proceeds. The cost of the program is not material to the
Company, and individual directors derive no financial benefit from the program
since the Company receives the entire charitable deduction. The Company also
pays the premiums on directors' and officers' liability and travel accident
insurance policies covering the directors.
14
STOCK OWNERSHIP OF GENERAL MILLS
DIRECTORS AND OFFICERS
The following table shows how much General Mills common stock was owned by each
nominee, director and those executive officers named in the Summary Compensation
Table on June 29, 2001. No nominee, director or executive officer owns more than
.75 percent of the total outstanding shares (including exercisable options). All
directors and executive officers as a group own 2.61 percent of the total
outstanding shares (including exercisable options).
DEFERRED STOCK EXERCISABLE
NAME SHARES (a) UNITS (b) TOTAL SHARES OPTIONS (c)
---------------------------------------------------------------------------------
S. R. Demeritt (d) 87,017 69,310 156,327 443,302
---------------------------------------------------------------------------------
L. D. DeSimone 36,077 -- 36,077 25,000
---------------------------------------------------------------------------------
W. T. Esrey 20,770 -- 20,770 25,000
---------------------------------------------------------------------------------
R. V. Gilmartin 8,210 -- 8,210 20,000
---------------------------------------------------------------------------------
J. R. Hope 18,980 -- 18,980 25,000
---------------------------------------------------------------------------------
R. L. Johnson 3,072 -- 3,072 15,000
---------------------------------------------------------------------------------
J. A. Lawrence 55,805 -- 55,805 30,750
---------------------------------------------------------------------------------
S. S. Marshall 59,154 1,636 60,790 219,382
---------------------------------------------------------------------------------
H. G. Miller 2,272 -- 2,272 10,000
---------------------------------------------------------------------------------
S. W. Sanger 98,444 199,359 297,803 2,055,464
---------------------------------------------------------------------------------
A. M. Spence 12,088 -- 12,088 31,076
---------------------------------------------------------------------------------
D. A. Terrell 8,184 -- 8,184 31,076
---------------------------------------------------------------------------------
R. G. Viault 38,256 4,980 43,236 385,750
---------------------------------------------------------------------------------
All directors and executive
officers as a group 1,628,563 (e) 6,579,690
---------------------------------------------------------------------------------
- --------------------------
(a) Amounts in this column include restricted stock and restricted stock units
as well as shares allocated to participant accounts under the Company VIP
401(k).
(b) Amounts reflect the deferral of common stock resulting from either a
stock-for-stock exercise of a stock option or vesting of restricted units
and any reinvestment of dividend equivalents. These units will be paid out
in common stock. Amounts for Mr. Viault also include share equivalents held
in a deferred compensation account tracking the value of the Company's
common stock, payable in cash.
(c) These amounts include options that become exercisable within 60 days of
June 29, 2001.
(d) Included in the shares for Mr. Demeritt are 1,840 shares owned by his
spouse, in which he disclaims any beneficial interest.
(e) Amount includes 538,511 deferred stock units, payable in stock or cash.
15
REPORT OF THE AUDIT COMMITTEE
The following is the report of the Audit Committee with respect to the Company's
audited financial statements for fiscal year ended May 27, 2001.
The Committee has reviewed and discussed the Company's audited financial
statements with management. The Committee is satisfied that the internal control
system is adequate and that the Company employs appropriate accounting and
auditing procedures.
The Committee has also discussed with KPMG LLP, the Company's independent
auditors, matters relating to the auditors' judgments about the quality, as well
as the acceptability, of the Company's accounting principles, as applied in its
financial reporting as required by Statement of Auditing Standards No. 61,
Communications with Audit Committees. In addition, the Committee has discussed
with KPMG their independence from management and the Company, as well as the
matters in the written disclosures received from its independent auditors and
required by Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees.
Based on the Committee's review and discussions referred to above, the Committee
recommended to the Company's Board of Directors that its audited financial
statements be included in the Company's Annual Report on Form 10-K for the
fiscal year ended May 27, 2001 for filing with the Securities and Exchange
Commission.
SUBMITTED BY THE AUDIT COMMITTEE:
A. Michael Spence, Chair
Livio D. DeSimone
Raymond V. Gilmartin
Robert L. Johnson
Dorothy A. Terrell
16
DESCRIPTION OF THE GENERAL MILLS, INC.
2001 COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
INTRODUCTION
Item No. 3 (see page 5 ) asks the stockholders to consider and approve a
proposal to adopt the 2001 Compensation Plan for Non-Employee Directors (the
"Directors' Plan"). The Directors' Plan provides non-employee directors of the
Company with a compensation program that will attract and retain qualified
individuals not employed by the Company to serve on the Board of Directors and
it further aligns the interests of non-employee directors with those of
stockholders by providing that a portion of their compensation be linked
directly to increases in stockholder value through issuance of stock options and
stock units that are payable in General Mills common stock.
On June 25, 2001, the Board of Directors approved the Directors' Plan and
recommended it for stockholder approval. Upon approval by the stockholders, the
Directors' Plan will replace the 1996 Compensation Plan for Non-Employee
Directors, which was previously approved by stockholders on September 30, 1996
and terminates on September 30, 2001. The effective date of the Directors' Plan
will be September 24, 2001, and it will terminate on September 30, 2006. Awards
under the 1996 Plan during fiscal 2001 to non-employee directors are included in
the Stock Ownership table on page 15.
Under the Directors' Plan, there is no change from the former plan in the type
of awards, amount of compensation or number of shares granted to non-employee
directors.
MATERIAL FEATURES OF THE DIRECTORS' PLAN
A summary of the major features of the Directors' Plan that follows is subject
to the full Plan text contained in Appendix B to this Proxy Statement.
PARTICIPATION. Participation in the Directors' Plan is limited to members of the
Board of Directors who are not employees of the Company or any of its
subsidiaries.
AUTHORIZED SHARES. Seven hundred thousand shares of the Company's common stock
are authorized to be issued under the Directors' Plan. All stock awards will be
subject to adjustment for corporate transactions that may cause a dilution or
enlargement of the rights of non-employee directors under the Plan.
ANNUAL RETAINER. Each non-employee director will receive compensation in the
form of an annual retainer for serving on the Board. Each non-employee director
may elect to receive all or a portion of this amount in the form of cash,
deferred cash and/or common stock.
STOCK OPTIONS. Each non-employee director will be granted a non-qualified option
to purchase 10,000 shares of common stock on the effective date of the
Director's Plan (or, on the date a non-employer director is first elected after
the effective date of the Directors' Plan) and on each successive annual
stockholders' meeting date. The per share price paid by the non-employee
director at the time an option is exercised shall equal the mean of the high and
low price of the common stock on the New York Stock Exchange on the date of
grant. Each option will vest and become exercisable on the next annual meeting
date and will expire ten years from the date of grant. Payment of the exercise
price may be made in cash, common stock or a combination thereof.
STOCK UNITS. On the effective date of the Directors' Plan (or, on the date a
non-employer director is first elected after the effective date of the
Directors' Plan) and on the close of business on each successive annual
stockholders' meeting date, each non-employee director shall receive an award of
1,000 restricted stock units, each representing the right to receive General
Mills common stock ("stock units"). Stock units may not be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of until the annual
stockholders' meeting date following the date of award. Each non-employee
director may elect to have an award distributed in a single amount or in
substantially equal installments over a period not to exceed ten years. Each
non-employee director will receive on the distribution date or dates elected,
one share of common stock for each stock unit awarded. On a quarterly basis, the
Company will
17
pay to each non-employee director holding a stock unit an amount equal to the
dividends and other distributions paid by the Company during the prior quarter
on an equivalent number of shares of common stock. Dividend equivalents payable
on stock units may be reinvested in stock units or paid out at the election of a
non-employee director.
TERMINATION, RETIREMENT AND DEATH. 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. If a non-employee director dies prior to the
vesting of stock units at the next annual meeting date, he or she shall vest in
a proportionate number of stock units, based on the full months of Board service
completed from the date of grant to the date of his or her death.
U.S. FEDERAL INCOME TAX CONSIDERATIONS.
STOCK OPTIONS. Stock options granted under the Directors' Plan will be
non-qualified options under Section 83 of the Internal Revenue Code of
1986, as amended. The grant of options will not result in taxable income to
the non-employee director or a tax deduction for the Company. The exercise
of an option will result in taxable ordinary income to the non-employee
director and a corresponding deduction to the Company, equal to the
difference between the fair market value of the shares on the date the
option was granted and its fair market value on the date the option was
exercised.
STOCK UNITS. Stock units granted under the Directors' Plan represent a
right to receive corresponding shares of the Company's common stock. The
grant of stock units will not result in taxable income to the non-employee
director or a tax deduction for the Company. At the time stock units vest
and are converted into a corresponding number of shares of the Company's
common stock, a non-employee director will recognize taxable ordinary
income and the Company will receive a corresponding deduction, equal to the
fair market value of the shares on the date such common stock is
distributed.
Non-employee directors are responsible for the payment of all federal,
state and local taxes, including those of any jurisdiction outside the
United States, in respect of awards under the Plan.
CHANGE OF CONTROL. In the event of a change of control of the Company, stock
options and stock units granted under the Directors' Plan will immediately vest,
stock options will become exercisable, and common stock and dividend equivalents
to be issued in respect of stock units will be immediately distributed. In
addition, a trust has been established to hold Company assets as a reserve for
the discharge of certain Company obligations under the Directors' Plan in the
event of a change of control.
ADMINISTRATION. The Compensation Committee of the Board of Directors (the
"Committee") will administer the Directors' Plan. The Committee is entirely
composed of non-employee directors who are intended to qualify as "non-employee"
directors as defined under Rule 16b-3 of the Securities and Exchange Act of
1934. The Committee will have full power to interpret the Plan, formulate
additional details and regulations for carrying out the Plan and full discretion
to amend or modify the Plan as it deems proper and in the best interests of the
Company, provided that after a change of control no amendment, modification of
or action to terminate the Directors' Plan may be made that would affect
compensation earned or accrued prior to such event without the written consent
of a majority of non-employee directors determined as of the day before a change
of control.
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR THE GENERAL MILLS, INC. 2001
COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS AND YOUR PROXY WILL BE SO VOTED
UNLESS OTHERWISE SPECIFIED.
18
STOCKHOLDER PROPOSAL ON GENETIC
ENGINEERING IN FOOD PRODUCTS
Item No. 4 (see page 6) asks the stockholders to consider a proposal of the
Camilla Madden Charitable Trust, c/o Adrian Dominican Sisters, 1257 East Siena
Heights Drive, Adrian, MI 49221-1793, owners of 62,400 shares, Joan Inman, c/o
Harrington Investments, 1001 Second Street, Suite 325, Napa, CA 94559, owner of
600 shares, CHRISTUS Health, 2600 North Loop West, Houston, TX 77092, owners of
2,500 shares and Sisters of Mercy Regional Community of Detroit, 29000 Eleven
Mile Road, Farmington Hills, MI 48336, owners of 3,000 shares, who have notified
the Company in writing that they intend to present the following resolution at
the annual meeting.
"RESOLVED: Shareholders request that unless long-term safety testing
demonstrates that genetically engineered (GE) crops, organisms, or products
thereof are not harmful to humans, animals, and the environment; the Board of
Directors adopt a policy to identify and label (where feasible) all food
products manufactured or sold by the company [under the company's brand names or
private labels] that may contain GE ingredients, and report to shareholders by
August 2002.
SUPPORTING STATEMENT
International markets for genetically engineered (GE) foods are threatened by
extensive resistance:
* Many of Europe's larger food retailers have committed to removing GE
ingredients from their store-brand products, as have some U.S.
retailers;
* In the UK, three fast-food giants -- McDonald's, Burger King, and KFC
-- are eliminating GE soy and corn ingredients from their menus;
* McCain Foods of Canada announced it would no longer accept genetically
engineered Bt potatoes for their brand-name products (11/99);
* Gerber Products Co. announced in July 1999 that it would not allow GE
corn or soybeans in any of their baby foods;
* Frito Lay, a division of Pepsico, asked farmers that supply corn for
Frito Lay chips to provide only non-genetically engineered corn
(1/2000);
* Since fall of 2000, hundreds of millions have been spent by food
companies in recalling food containing GE corn not approved for human
consumption;
* Once in effect, the Biosafety Protocol, approved by representatives of
more than 130 countries (1/2000), will require that genetically
engineered organisms (GEOs) intended for food, feed and processing
must be labeled "may contain" GEOs, and countries can decide whether
to import those commodities based on a scientific risk assessment.
There is scientific concern that genetically engineered agricultural products
may be harmful to humans, animals, or the environment:
* Some GE crops have been engineered to have higher levels of toxins,
such as Bacillus thuringiensis (Bt), to make them insect-resistant;
* Research has shown that Bt crops are building up Bt toxins in the
soil, thereby disturbing soil ecology and impacting beneficial
organisms and insects (12/1999, 5/2000);
* The National Academy of Sciences report, Genetically Modified
Pest-Protected Plants, recommends development of improved methods for
identifying potential allergens in genetically engineered
pest-protected plants. The report found the potential for gaps in
regulatory coverage (4/2000);
* Uncertainty about the ecological risks of genetically engineered crops
persists. (Science 12/15/2000);
In the U.S., a long tradition of citizens' "right to know" is expressed in laws
requiring nutritional labeling of foods:
* Focus groups conducted by the Food and Drug Administration in spring
2000 indicated strong public support for mandatory labeling;
* Over a dozen polls in the U.S. show that about 70-94% of people
surveyed want GE food to be labeled as such;
* GE crops may incorporate genes from animal species. Individuals
wishing to avoid them for religious or ethical reasons cannot unless
they are labeled;
19
* The European Union and Japan require labeling of GE foods, and
labeling has been proposed by governmental authorities in New Zealand,
South Korea and Australia."
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THE PROPOSAL
ON LABELING GENETICALLY ENGINEERED FOOD PRODUCTS FOR THE FOLLOWING REASONS:
Modern biotechnology holds much promise for society, for consumers and for the
world. It is already being used in agriculture to reduce the use of chemical
pesticides and for low-impact, low-tillage farming. It is viewed by
organizations dedicated to alleviating Third World food and nutrition deficits,
such as the Rockefeller Foundation and the Food and Agricultural Organization of
the United Nations, as an important tool in meeting the world's food needs. And
it has the clear potential to foster the development of food products that
confer additional health and nutrition benefits on consumers.
It is a fundamental commitment of General Mills that every food product we make
and sell is safe for human consumption. The U.S. Food and Drug Administration,
the Department of Agriculture and the Environmental Protection Agency have each
determined that food containing ingredients improved through modern
biotechnology is safe and is no different in any meaningful way from other
foods. The National Academy of Science has reached the same conclusion on three
occasions, and so have the national academies of several other countries and the
American Medical Association. The science supporting the safety of these foods
is overwhelming. In fact, many scientists feel these foods are safer than new
conventionally bred varieties.
The proposal asks the Company to 'identify and label (where feasible) all
products manufactured or sold by General Mills under the company's brand names
or private labels that may contain genetically engineered ingredients.' It
should be noted that the FDA already requires labeling of products containing
genetically engineered ingredients whenever such ingredients change the
nutritional composition of the product or are allergenic. Based on public
meetings and comments received, in January 2001, the FDA issued proposed
voluntary guidelines, which continue to add clarity to the FDA's labeling
requirements already in place for products of modern biotechnology. We support
these labeling policies. We also support the FDA's move to make mandatory its
review of all bioengineered ingredients. And we support the agency's initiatives
to resolve issues uniformly and take whatever steps are necessary to continue to
assure that any new food technology is safe for consumers and the environment
based on a comprehensive, balanced evaluation and sound science.
It is worth noting that the FDA is concerned that special labeling for foods
containing ingredients improved through modern biotechnology may be misleading
to consumers because many would interpret such a label as a warning when, in
fact, there is no scientific basis to suggest that such foods are in any
meaningful way different from their non-biotech counterparts. There is also the
practical difficulty of successfully segregating biotech from non-biotech crops
in North America. Instituting such a system would be very costly and result in
higher prices to consumers for no apparent benefit.
20
TOTAL RETURN TO STOCKHOLDERS
This line graph and table compare the cumulative total stockholder return for
holders of General Mills common stock with the cumulative total return of the
Standard & Poor's 500 Stock Index and the Standard & Poor's Food Index for the
last five-year period. The graph and table assume the investment of $100 in each
of General Mills' common stock and the specified indexes at the beginning of the
applicable period, and assume the reinvestment of all dividends.
[PLOT POINTS CHART]
MAY 96 MAY 97 MAY 98 MAY 99 MAY 00 MAY 01
------ ------ ------ ------ ------ ------
GENERAL MILLS 100 114 125 152 159 169
S & P Food 100 132 176 156 144 161
S & P 500 100 128 167 202 216 203
21
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
THE COMMITTEE'S RESPONSIBILITIES
The Compensation Committee of the Board (the "Committee") is responsible for
setting and administering the policies that govern executive compensation. The
Committee is composed entirely of independent, non-employee directors. Reports
of the Committee's actions and recommendations are presented to the full Board.
The purpose of this report is to summarize the philosophical principles,
specific program elements and other factors considered by the Committee in
making decisions about executive compensation.
COMPENSATION PHILOSOPHY
The Committee bases its compensation decisions on the following core principles:
* Pay is performance-based. Base salaries at General Mills are generally
lower than those at comparable companies in the food and consumer products
business sector, but they are coupled with an incentive system that pays
more with good performance and less for below-par performance.
* Stock ownership is emphasized. The Committee believes that broad and deep
employee stock ownership effectively aligns the interests of employees with
those of stockholders and provides a strong motivation to build stockholder
value. The Committee has established specific stock ownership objectives
for key management employees and has created programs that encourage all
employees to have an ownership interest in the Company.
* Compensation opportunities must be competitive to attract and retain
talented employees. Each year, the Committee evaluates Company performance,
actual compensation and share ownership, and compares them with data for
peer food and consumer product companies as well as a broader group of
leading industrial companies.
PROGRAM ELEMENTS
General Mills' executive compensation program comprises base salary, annual
incentive and long-term incentive compensation.
BASE SALARY. Base salaries for officers are generally lower than at comparable
companies due to our emphasis on performance-oriented incentive compensation and
because historically many of our executives received stock options in lieu of
salary increases under the Salary Replacement Stock Option Plan (described on
page 23). All salaried employees, including executives, are eligible for an
annual merit increase to their base salary based primarily on performance of
their job responsibilities and accomplishment of predetermined performance
objectives.
ANNUAL INCENTIVE. General Mills provides executives with an annual opportunity
to earn cash incentive awards through the Executive Incentive Plan (EIP). Under
the EIP, fiscal 2001 incentive amounts were determined by the Committee at the
end of the year based upon corporate, business unit and individual performance.
For each of the five most highly compensated officers, including the CEO, this
incentive amount was limited to a maximum amount established under the EIP, and
was adjusted downward from the maximum by the Compensation Committee according
to a schedule determined by the Committee at the start of the year.
In fiscal 2001, the schedule determining the corporate performance rating was
weighted 75 percent to the Company's earnings-per-share performance and 25
percent to key strategic growth and earnings quality objectives. Earnings
quality measurements included volume, productivity improvements, economic profit
and international earnings contribution. Strategic growth measurements were tied
to progress against key longer-term growth initiatives.
Based on the Company's fiscal 2001 earnings per share, earnings quality and
progress toward its strategic growth goals, including acquisitions, the
Committee determined that the corporate performance rating for fiscal 2001
should be 1.70.
Business unit ratings also were based 75 percent on financial performance and 25
percent on the quality of this financial performance and progress against
strategic growth priorities. Unit financial performance was measured by earnings
before interest and taxes, volume, productivity improvements and/or
cost-per-case targets.
Individual performance ratings were based upon each executive's achievement of
specific annual financial objectives as well as other factors like the quality
of the strategic plan, progress in organizational and management development,
and diversity.
22
For senior officers, cash incentive awards were determined by multiplying fiscal
year base salary by a base incentive rate (a percentage of salary that increases
with the level of responsibility), the individual performance rating and the
corporate performance rating. For officers in operating units, the corporate
rating was weighted with a business unit rating. The scale for corporate and
business unit ratings ranged from 0 to 1.80, with superior performance resulting
in ratings of 1.50 or higher. The scale for individual ratings ranged from 0 to
1.50. Executives were permitted to defer receipt of cash incentive awards earned
under the EIP to a subsequent date.
Under the EIP, in fiscal 2001 executives also were eligible to receive a
supplemental restricted stock matching award equal to 30 percent of the cash EIP
award. This award can be adjusted up or down by up to 25 percent of the award
according to a schedule based on the corporate rating. To receive this award,
the executive must place on deposit with the Company personally owned shares
equal in number to the number of shares awarded as restricted stock. The
restricted stock vests after four years, provided the owned shares remain on
deposit with the Company for the entire four-year period. Restricted shares
granted under the EIP are included in the Summary Compensation Table on page 25
under the Restricted Stock Award(s) column.
LONG-TERM INCENTIVE. General Mills provides executives with a long-term
incentive compensation opportunity through the 1998 Senior Management Stock
Plan. Each December, stock options are granted to officers and other selected
employees based upon their level of responsibility, ability to impact results
and individual performance. The size of regular stock option grants to the
executive officers, including the Chief Executive Officer, is periodically
reviewed against option grants made by other large food and consumer products
companies to their CEO and other senior executives. Our targeted level of stock
option grants ranks above the median range of option grants made by the
comparative organizations.
The table on page 26 summarizes the options granted in fiscal 2001 to all
employees and to the five named officers.
Also, we have periodically provided special stock option grants to all employees
not receiving regular stock option grants. General Mills made such grants to
eligible employees in fiscal years 1994, 1996 and 2000. These broad-based option
awards are designed to expand employee stock ownership and provide further
motivation throughout the Company to achieve corporate performance objectives.
In special circumstances, we make limited special grants of restricted stock to
certain key employees.
STOCK OWNERSHIP GRANTS. We also have used two additional programs to encourage
share ownership: deposit stock options and salary replacement stock options.
The deposit stock option program, introduced in 1987, offered executives a
supplemental stock option opportunity equal to their most recent incentive award
divided by the current stock price. To receive this grant, the executive placed
on deposit with the Company one share of owned stock for every two option shares
granted and left the shares on deposit for four years. A total of 334 employees
participated in this program in fiscal 2001, which was the last year of the
program.
The Salary Replacement Stock Option Plan gives executives and selected employees
the choice of exchanging their merit-related base salary increase for a
supplemental stock option grant. The size of the option grant is determined by
calculating the estimated present value of the foregone salary increase
(including pay-related compensation and benefits, such as annual incentive,
savings plan match and pension accrual) and dividing it by the estimated present
value of a stock option, assuming an 8 percent annual growth rate in the common
stock price. A total of 1,190 employees participated in this program in fiscal
2001; the table on page 26 includes stock options granted under this program to
the five named officers. We expect to discontinue this program after fiscal
2002.
CEO COMPENSATION AND PERFORMANCE
The compensation of the Company's Chief Executive Officer for fiscal 2001
consisted of base salary, annual incentive and stock options. The Committee
determined the level for each of these elements using methods consistent with
those used for other senior executives. When determining the CEO's merit
increase to base salary, individual incentive award and annual stock option
grant, the Committee evaluates his performance and reports on that evaluation to
the independent directors of the Board.
In determining Mr. Sanger's 2001 incentive amount, the Committee's analysis
began with the corporate performance rating used to determine the annual
incentive of other executive officers. Then the
23
Committee considered Mr. Sanger's personal performance against pre-established
objectives in numerous areas, including Company financial performance, growth,
innovation, productivity improvement, new ventures, organizational development,
diversity, and customer and stockholder relations.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Internal Revenue Code requires that the Company meet specific criteria,
including stockholder approval of certain stock and incentive plans, in order to
deduct, for federal income tax purposes, compensation over $1 million paid to
the five officers named in the Proxy Statement. The Company expects to meet the
requirements of the Code and receive a deduction for all compensation paid to
those executive officers in fiscal 2001.
CONCLUSION
The Committee is satisfied that the compensation and long-term incentive plans
provided to the officers of the Company are structured and operated to create
strong alignment with the long-term best interests of the Company and its
stockholders.
SUBMITTED BY THE COMPENSATION
COMMITTEE:
Livio D. DeSimone, Chair
William T. Esrey
Raymond V. Gilmartin
Heidi G. Miller
A. Michael Spence
24
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
- ------------------------------------------------------------------ -------------------------
RESTRICTED
OTHER ANNUAL STOCK ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARD(S) COMPENSATION
POSITION YEAR ($) ($) ($) ($)(a) OPTIONS(#) ($)(b)
- ---------------------------------- ---- ------- --------- ------------ ---------- ---------- ------------
S. W. SANGER 2001 696,150 1,261,100 97,102(c) 472,906 785,811 104,519
Chairman of the Board and 2000 696,150 1,264,600 -- 316,138 735,958 104,659
Chief Executive Officer 1999 687,863 1,052,400 -- 263,104 499,676 61,386
R. G. VIAULT 2001 550,000 701,300 -- 262,962 263,121 66,603
Vice Chairman 2000 533,334 753,825 -- --(d) 239,000 61,088
1999 500,000 603,800 -- 150,988 207,212 41,477
S. R. DEMERITT 2001 500,000 629,000 -- 235,836 266,073 50,728
Vice Chairman 2000 459,569 646,500 342,124(e) 161,557 208,418 135,614
1999 376,552 348,100 -- 87,059 148,832 153,875
J. A. LAWRENCE 2001 425,000 495,200 -- 185,671 183,121 45,450
Executive Vice President 2000 425,000 478,800 -- 119,730 158,392 37,291
and Chief Financial Officer 1999 247,917 276,700 -- 767,667(f) 300,000 12,396
S. S. MARSHALL 2001 320,000 315,500 -- 118,259 115,067 31,413
Senior Vice President, Corporate 2000 315,522 307,000 -- 913,351(g) 107,304 33,934
Affairs, General Counsel and 1999 282,009 273,300 -- 68,266 78,200 28,379
Secretary
- -----------------------
(a) The amounts in this column reflect the value of the restricted stock or
restricted stock units awarded annually under the Executive Incentive Plan
("EIP"), except as described in notes (f) and (g). Recipients must deposit
with the Company one personally owned share of common stock for each share
of restricted stock awarded. The restricted stock granted in 2001 vests in
four years and the restricted stock granted in 1999 and 2000 vests 50%
after three years and 50% after six years, in each case, provided the
participant's shares remain on deposit until the end of the restricted
period. Regular dividends are paid on the restricted stock. Restricted
stock under the EIP vests in the event of a change in control. At the end
of fiscal 2001, the number and value of the aggregate restricted
stockholdings for the named officers were:
S. W. Sanger 26,722 shares $1,131,411
R. G. Viault 11,208 474,547
S. R. Demeritt 11,548 488,944
J. A. Lawrence 24,724 1,046,813
S. S. Marshall 27,872 1,180,101
(b) The amounts for all officers, other than Mr. Demeritt, represent the
Company's matching contributions to retirement savings plans (tax-qualified
and supplemental) and, for certain officers, the Company's matching
allocations to the deferred compensation plan on behalf of the named
officers. Amounts for Mr. Demeritt include $92,249 in 2000 and $117,243 in
1999 relating to his foreign assignment at Cereal Partners Worldwide.
(c) This amount represents perquisites used by Mr. Sanger, including $73,658
for the personal use of the Company aircraft.
(d) Because Mr. Viault's age exceeds 55, in lieu of his restricted stock award
he may elect to receive an additional cash amount equal to 15% of his
annual cash bonus. His additional cash amount is reflected in the Bonus
column.
(e) This amount represents reimbursements made to Mr. Demeritt for incremental
taxes resulting from his foreign assignment.
(f) This amount includes the value of a restricted stock grant made to Mr.
Lawrence as a hiring bonus and to offset forfeitures or other losses
incurred as a result of leaving his prior employer. Regular dividends are
paid on shares of restricted stock.
(g) This amount includes the value of a special restricted stock grant made to
Ms. Marshall. Regular dividends are paid on shares of restricted stock.
25
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS(a) FOR OPTION TERM($)(b)
- ------------------------------------------------------------------------ ------------------------------------------
% OF TOTAL
OPTIONS
OPTIONS GRANTED TO EXERCISE
GRANTED EMPLOYEES IN PRICE EXPIRATION
NAME (#) FISCAL YEAR ($/SHARE) DATE 0%($)(c) 5%($) 10%($)
- ------------------ ---------- ------------ --------- ---------- -------- ---------- ----------
Sanger 525,000(d) 4.53% 40.47 1/18/2011 0 13,497,163 34,283,646
229,125(e) 1.98% 34.72 9/1/2010 0 5,053,673 12,836,502
31,686(f) 0.27% 38.19 7/26/2010 0 768,727 1,952,592
Viault 162,500(d) 1.40% 40.47 1/18/2011 0 4,177,741 10,611,605
96,125(e) 0.83% 34.72 9/1/2010 0 2,120,171 5,385,308
16,424(f) 0.14% 38.19 7/26/2010 0 398,459 1,012,099
Demeritt 162,500(d) 1.40% 40.47 1/18/2011 0 4,177,741 10,605,605
87,375(e) 0.75% 34.72 9/1/2010 0 1,927,178 4,895,098
16,198(f) 0.14% 38.19 7/26/2010 0 392,976 998,172
Lawrence 134,000(d) 1.16% 40.47 1/18/2011 0 3,445,029 8,750,493
37,125(e) 0.32% 34.72 9/1/2010 0 818,844 2,079,891
11,996(f) 0.10% 38.19 7/26/2010 0 291,032 739,232
Marshall 80,000(d) 0.69% 40.47 1/18/2011 0 2,056,734 5,224,175
27,375(e) .24% 34.72 9/1/2010 0 603,794 1,533,657
7,692(f) 0.07% 38.19 7/26/2010 0 186,614 474,006
All Stockholders NA NA NA NA 0 6,898,927,001(g) 17,518,431,480(g)
All Optionees 11,600,186 100% 38.07(h) (h) 0 280,545,134 712,594,277
As a % of All
Stockholders'
Potential Gain NA NA NA NA NA 4.1% 4.1%
- -----------------------
(a) All options are granted at the fair market value of the common stock on the
grant date and generally expire 10 years and one month from the grant date.
All options become fully exercisable for a period of one year after a
change of control. Options include the right to pay the exercise price in
cash or previously acquired common stock and the right to have shares
withheld by the Company to pay withholding tax obligations due upon
exercise.
(b) These assumed values result from using certain rates of stock price
appreciation prescribed under Securities and Exchange Commission rules and
are not intended to forecast possible future appreciation in the Company's
common stock. The actual value of these option grants is dependent on
future performance of the common stock and overall stock market conditions.
There is no assurance that the values reflected in this table will be
achieved.
(c) No gain to the optionees is possible without stock price appreciation,
which will benefit all stockholders commensurately. Without stock price
appreciation, there is no benefit to the optionee.
(d) This stock option grant under the 1998 Senior Management Stock Plan becomes
exercisable on December 18, 2004.
(e) Options granted under the 1995 Salary Replacement Stock Option Plan are
awarded in lieu of cash compensation to an executive. The option becomes
exercisable over a four-year period, beginning on the grant date.
(f) To encourage retention of common stock, this deposit stock option grant
under the 1998 Senior Management Stock Plan (which becomes exercisable four
years from the grant date) requires the deposit of one share of owned
common stock for every two option shares granted. The number of option
shares granted is equal to the executive's prior year cash incentive
payment divided by the stock price on June 1, 2000.
(g) For All Stockholders, the potential gain is calculated using an exercise
price of $38.07, representing the weighted average exercise price for all
options awarded in fiscal 2001, and the total amount of outstanding common
stock on May 27, 2001. The potential gain is measured over an option term
of 10 years and one month.
(h) Exercise price shown is a weighted average of all options awarded in fiscal
2001. Options expire on various dates through the year 2011.
26
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION VALUES
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES ACQUIRED VALUE OPTIONS AT 5/25/01(#) OPTIONS AT 5/25/01($)(a)
ON EXERCISE REALIZED ---------------------------- ----------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- --------- ----------- ------------- ----------- -------------
Sanger 43,152 1,943,156 1,762,757 2,703,220 27,969,183 17,064,942
Viault 133,500 1,940,089 264,285 903,716 2,693,839 5,883,966
Demeritt 27,503 2,055,025 363,241 766,736 5,177,206 4,754,148
Lawrence 0 0 18,025 623,488 65,483 3,534,522
Marshall 0 0 167,219 442,516 2,588,527 2,963,776
- -----------------------
(a) Value of unexercised options equals the fair market value of the shares
underlying in-the-money options at May 25, 2001 ($42.34), less the exercise
price, multiplied by the number of in-the-money options outstanding.
DEFINED BENEFIT RETIREMENT PLAN
FINAL AVERAGE EARNINGS 10 YEARS OF 15 YEARS OF 20 YEARS OF 25 YEARS OF 30 OR MORE YEARS OF
(AS DEFINED) SERVICE SERVICE SERVICE SERVICE SERVICE*
- ---------------------------------------------------------------------------------------------------------
$ 300,000 $ 50,000 $ 75,000 $100,000 $125,000 $ 150,000
500,000 83,333 125,000 166,666 208,333 250,000
600,000 100,000 150,000 200,000 250,000 300,000
700,000 116,666 175,000 233,333 291,666 350,000
800,000 133,333 200,000 266,666 333,333 400,000
900,000 150,000 225,000 300,000 375,000 450,000
1,000,000 166,666 250,000 333,333 416,666 500,000
1,100,000 183,333 275,000 366,666 458,333 550,000
1,200,000 200,000 300,000 400,000 500,000 600,000
1,300,000 216,666 325,000 433,333 541,666 650,000
1,400,000 233,333 350,000 466,666 583,333 700,000
1,500,000 250,000 375,000 500,000 625,000 750,000
1,600,000 266,666 400,000 533,333 666,666 800,000
1,700,000 283,333 425,000 566,666 708,333 850,000
1,800,000 300,000 450,000 600,000 750,000 900,000
1,900,000 316,666 475,000 633,333 791,666 950,000
2,000,000 333,333 500,000 666,666 833,333 1,000,000
2,100,000 350,000 525,000 700,000 875,000 1,050,000
- -----------------------
*No additional benefits accrue after 30 years of service.
The preceding table sets forth the pension benefits payable under the Company's
tax-qualified Retirement Income Plan (the "RIP") and Supplemental Retirement
Plan to the persons named in the Summary Compensation Table (see page 25),
showing the estimated annual aggregate benefits payable at normal retirement
(age 65) for various classifications of earnings and years of benefit service.
Because federal law limits the benefits that may be paid from a tax-qualified
retirement plan like the RIP, the Supplemental Retirement Plan provides for the
payment of additional amounts to certain executive officers (including the
officers named in the Summary Compensation Table) so that they will receive, in
the aggregate, the benefits they would have been entitled to receive had federal
law not imposed maximum limitations. This table is based on the maximum benefit
under the RIP of 50 percent of Final Average Earnings for a participant with 30
years of benefit service, less 50 percent of the employee's projected Social
Security benefit. Final Average Earnings is the average of the employee's five
highest years' remuneration. Such remuneration generally equals the salary and
bonus reported in the Summary Compensation Table plus the value of vested
restricted stock and stock units granted under the EIP. The effects of
integration with Social Security benefits have been excluded from the table,
because the amount of the reduction in benefits due to integration varies
depending on the participant's age at the time of retirement and changes in the
Social Security laws.
The officers listed in the Summary Compensation Table are credited,
respectively, with the following full years of benefit service under the RIP:
S. W. Sanger, 27 years; R. G. Viault, 5 years; S. R. Demeritt, 31 years; J.
A. Lawrence, 2 years; and S. S. Marshall, 6 years.
27
In addition, the Company has agreed to provide supplemental retirement benefits
to R. G. Viault to compensate for the difference, if any, between the pension
benefit he would have received from his previous employer's retirement plan and
the benefit he receives from the combination of his previous employer's plan and
the Company's plans.
CHANGE OF CONTROL ARRANGEMENTS
The Company has agreements with some of its executive officers providing for
guaranteed severance payments equal to three times the annual compensation of
the officer (salary plus cash incentive award) and continuation of health and
similar benefits for a three-year period if the officer is terminated within two
years after a change of control. These agreements also provide for a cash
payment of the amount necessary to insure that the foregoing payments are not
subject to reduction due to the imposition of excise taxes payable under Code
Section 4999 or any similar tax.
The Company has two nominally funded trusts to provide for payments under its
nonqualified deferred compensation plans, including the directors' compensation
plan, the EIP, the management continuity agreements and the Supplemental Savings
and Retirement Plans. Full funding is required in the event of a change of
control.
OTHER MATTERS
SECTION 16(a): BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on a review of reports filed with the SEC by General Mills directors and
executive officers regarding their ownership of and transactions in General
Mills common stock, and written representations from those officers and
directors, General Mills believes that each has filed timely and complete
reports under Section 16(a) of the Securities Exchange Act of 1934.
COSTS OF SOLICITATION
The Company will pay for preparation, printing and mailing this Proxy Statement.
We have engaged Georgeson Shareholder Communications Inc. to help us solicit
proxies from stockholders for a fee of $10,500 plus their out-of-pocket
expenses. Proxies may also be solicited personally or by telephone by regular
employees of the Company without additional compensation as well as by employees
of Georgeson. The Company will reimburse banks, brokers and other custodians,
nominees and fiduciaries for their costs of sending the proxy materials to our
beneficial owners.
DELIVERY AND VIEWING OF PROXY MATERIALS
DELIVERY OF PROXY MATERIALS. Securities and Exchange Commission rules now allow
us to deliver a single copy of an annual report and proxy statement to any
household at which two or more stockholders reside, if we believe the
stockholders are members of the same family. This rule benefits both you and the
Company. We believe it eliminates irritating duplicate mailings that
stockholders living at the same address receive and it reduces our printing and
mailing costs. This rule applies to any annual reports, proxy statements, proxy
statements combined with a prospectus or information statements.
Your household may have received a single set of proxy materials this year. If
you prefer to receive your own copy now or in future years, please request a
duplicate set by writing to Wells Fargo Bank Minnesota, N.A. Shareowner
Services, Attn: Admin/General Mills, P.O. Box 64854, St. Paul, MN 55164-0854.
Each stockholder will continue to receive a separate proxy card or voting
instruction card.
If a broker or other nominee holds your shares, you may continue to receive some
duplicate mailings. Certain brokers will eliminate duplicate account mailings by
allowing stockholders to consent to such elimination, or through implied consent
if a stockholder does not request continuation of duplicate mailings. Since not
all brokers and nominees may offer stockholders the opportunity this year to
eliminate duplicate mailings, you may need to contact your broker or nominee
directly to discontinue duplicate mailings from your broker to your household.
VIEWING OF PROXY MATERIALS VIA THE INTERNET. We are able to distribute the
Annual Report and Proxy Statement to General Mills stockholders in a fast and
efficient manner via the Internet. This reduces the
28
amount of paper delivered to a stockholder's address and eliminates the cost of
sending these documents by mail. Stockholders may elect to view all future
annual reports and proxy statements on the Internet instead of receiving them by
mail. If you choose to view these materials online, you will continue to receive
a proxy card in the mail. You may make this election when voting your proxy this
year: simply follow the instructions to vote via the Internet or go directly to
http://www.econsent.com/gis/ to register your consent. Your election to view
proxy materials online is perpetual unless you revoke it later. Future proxy
cards will contain the Internet website address and instructions to view the
materials. You will continue to have the option to vote your shares by
telephone, mail or via the Internet.
ANNUAL REPORT
The 2001 Annual Report to Stockholders, which includes the consolidated
financial statements of the Company for the fiscal year ended May 27, 2001, was
mailed on or about August 15, 2001, to all stockholders entitled to vote at the
annual meeting. If you have not received the Annual Report, please call
1-800-245-5703, and a copy will be sent to you without charge. You may also
request a free copy by writing to the Company Secretary, General Mills, Inc.,
P.O. Box 1113, Minneapolis, MN 55440.
YOUR VOTE IS IMPORTANT!
Please vote by phone, via the Internet or sign and promptly return your proxy
card in the enclosed envelope.
29
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APPENDIX A
GENERAL MILLS, INC.
AUDIT COMMITTEE CHARTER
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GENERAL MILLS, INC.
AUDIT COMMITTEE CHARTER
ORGANIZATION. The Audit Committee of General Mills, Inc. is a standing committee
of the Board of Directors. The Committee shall consist of not less than five,
nor more than seven members of the Board. The members shall be elected annually,
with one member designated by the Board to be the Chair, and shall not be
officers or employees of the Company or of any of its subsidiaries. Committee
members will be independent of management and free from material business
relationships that might interfere with the exercise of independent judgment as
Committee members. They will satisfy such other requirements, including
financial literacy, as may be specified by the rules of the New York Stock
Exchange or regulatory authorities.
The Committee shall meet at least three times annually and may, in its
discretion, delegate specific responsibilities to a subcommittee comprised of
one or more members of the Committee.
STATEMENT OF POLICY. The Audit Committee will assist the Board of Directors in
fulfilling its oversight responsibilities involving:
* The integrity of the Company's financial statements and financial reporting
process.
* The independence of the Company's independent auditors and the performance
of the independent audit.
* The adequacy of the Company's accounting processes and financial controls.
* Compliance with applicable laws and the Company's policy on business ethics
and conduct.
In so doing, it is the responsibility of the Committee to maintain free and open
means of communication among the directors, the independent auditors, the
internal auditors and the management of the Company. The Committee will report
to the Board all significant issues discussed by the Committee and all
recommendations that are to be acted upon by the full Board. The Committee shall
have the resources and authority necessary to discharge its responsibilities,
including the authority to retain special counsel and other experts or
consultants.
RESPONSIBILITIES. Specific responsibilities of the Audit Committee include:
1. To recommend to the Board the independent auditors for the annual audit of
the Company, evaluate the performance of the independent auditors, and, if
deemed appropriate, recommend that the Board replace the independent
auditors. Because the independent auditors are ultimately accountable to
the Board, the selection of the independent auditors shall be the
responsibility of the Board, and shall be ratified by the stockholders at
the annual meeting.
2. To review and approve the services to be provided by the independent
auditors for the coming year, including the scope of the annual audit of
the Company's financial statements, audit services for pension and benefit
plans, and significant non-audit services, as well as the related fees for
these services.
3. To meet separately with the independent auditors, with and without
management present, to discuss the results of their audits and
examinations, management's responses and other matters the Committee or the
independent auditors wish to discuss, and to review with the independent
auditors the matters required to be discussed under generally accepted
auditing standards relating to the conduct of the audit.
4. To receive at least annually from the independent auditors a written
statement delineating all relationships between the independent auditors
and the Company, to discuss with the independent auditors any relationships
or non-audit services that may impact their objectivity and independence,
and, if necessary, to take or recommend that the Board take appropriate
action to ensure the independence of the independent auditors.
5. To review with senior management, the internal auditors and the independent
auditors, the adequacy and effectiveness of the Company's accounting and
financial controls and processes to monitor and manage business and
financial risk and legal and ethical compliance.
A-1
6. To review with management and the independent auditors significant changes
proposed for the accounting policies of the Company, accounting, tax or
financial reporting proposals that have or may have a material effect on
the Company's financial situation and/or financial reports, and the
reasonableness of significant assumptions, accounting judgments or
estimates utilized by the Company in connection with its financial
statements.
7. To review and discuss with management and the independent auditors the
Company's audited financial statements, and to recommend to the Board that
the audited financial statements be included in the Company's annual report
on Form 10-K.
8. To review with management and the independent auditors the Company's
quarterly financial statements and other matters required to be discussed
with the Committee by the independent auditors under generally accepted
auditing standards. The Chair of the Committee may represent the entire
Committee for purposes of this review.
9. To approve any Committee report required to be included in the proxy
statement for the Company's annual meeting of stockholders.
10. To review and approve the audit plan, budget and staffing of the Company's
internal audit function for the coming year.
11. To review periodically the quality and depth of staffing in the Company's
auditing, accounting, and financial departments.
12. To review and reassess the adequacy of this charter annually and to
recommend any proposed changes to the Board for approval.
A-2
APPENDIX B
GENERAL MILLS, INC.
2001 COMPENSATION PLAN FOR
NON-EMPLOYEE DIRECTORS
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GENERAL MILLS, INC.
2001 COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
1. PURPOSE
The purpose of the General Mills, Inc. 2001 Compensation Plan for
Non-Employee Directors (the "Plan") is to provide a compensation program
which will attract and retain qualified individuals not employed by General
Mills, Inc. or its subsidiaries (the "Company") to serve on the Board of
Directors of the Company (the "Board") and to further align the interests
of non-employee directors with those of the stockholders by providing that
a portion of compensation will be linked directly to increases in
stockholder value.
2. EFFECTIVE DATE, DURATION OF PLAN
This Plan shall become effective as of September 24, 2001, subject to the
approval of the Plan by the stockholders. The Plan will terminate on
September 30, 2006 or such earlier date as determined by the Board or the
Compensation Committee of the Board (the "Committee"); provided that no
such termination shall affect rights earned or accrued under the Plan prior
to the date of termination.
3. PARTICIPATION
Each member of the Board who is not an employee of the Company at the date
compensation is earned or accrued shall be eligible to participate in the
Plan unless prohibited from participating by the terms of their employment.
4. COMMON STOCK SUBJECT TO THE PLAN
(a) General. The common stock to be issued under this Plan is Company
common stock ("Common Stock") ($.10 par value) to be made available
from the authorized but unissued Common Stock, shares of Common Stock
held in the treasury, or Common Stock purchased on the open market or
otherwise. Subject to the provisions of the next succeeding
paragraphs, the maximum aggregate number of shares authorized to be
issued under the Plan shall be 700,000.
If any Option (defined below) is exercised by tendering Common Stock,
either actually or by attestation, to the Company as full or partial
payment in connection with the exercise of an Option under the Plan,
only the number of shares of Common Stock issued net of the Common
Stock tendered shall be deemed delivered for purposes of determining
the maximum number of shares available for grants under the Plan. Upon
forfeiture or termination of Stock Units prior to vesting, the shares
of Common Stock subject thereto shall again be available for awards
under the Plan.
(b) Adjustments for Corporate Transactions. The Committee may determine
that a corporate transaction has occurred affecting the Common Stock
such that an adjustment or adjustments to outstanding awards is
required to preserve, or prevent enlargement of, the benefits or
potential benefits intended at the time of grant. For this purpose a
corporate transaction includes, but is not limited to, any dividend or
other distribution (whether in the form of cash, Common Stock,
securities of a subsidiary of the Company, other securities or other
property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Common Stock or other
securities of the Company, issuance of warrants or other rights to
purchase Common Stock or other securities of the Company, or other
similar corporate transaction. In the event of such a corporate
transaction, the Committee may, in such manner as the Committee deems
equitable, adjust (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; and (iii) the exercise price of outstanding
Options provided that the number of shares of Common Stock subject to
any option denominated in Common Stock shall always be a whole number.
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5. ANNUAL RETAINER
(a) General. Each non-employee director shall be entitled to receive an
annual retainer as shall be determined from time to time by the Board.
Each non-employee director of the Company shall elect by written
notice to the Company on or before each annual stockholders' meeting
how he or she shall participate in the compensation alternative
provisions of the Plan. Any combination of the alternatives -- Cash,
Deferred Cash and/or Common Stock -- may be elected, provided the
aggregate of the alternatives elected equals one hundred percent of
the non-employee director's compensation at the time of the election.
The election shall remain in effect for a one-year period, which shall
begin the day of the annual stockholders' meeting and terminate the
day before the succeeding annual stockholders' meeting (hereinafter
"Plan Year"). The Plan Year shall include four plan quarters
(hereinafter "Plan Quarters"). Plan Quarters shall correspond to the
Company's fiscal quarters. A director elected to the Board at a time
other than the annual stockholders' meeting may elect, by written
notice to the Company before such director's term begins, to
participate in the compensation alternatives for the remainder of that
Plan Year, and elections for succeeding years shall be on the same
basis as other directors. Periodically, the Company shall supply to
each participant an account statement of participation under the Plan.
(b) Cash Alternative. Each non-employee director who elects to receive
cash compensation under the Plan shall be paid all or the specified
percentage of his or her compensation for the Plan Year in cash, and
such cash payment shall be made as of the end of each Plan Quarter. If
a participant dies during a Plan Year, the balance of the amount due
to the date of the participant's death shall be payable in full to
such participant's designated beneficiary, or, if none, the estate as
soon as practicable following the date of death.
(c) Deferred Cash Alternative.
(i) Each non-employee director may elect to have all or a specified
percentage of his or her compensation for the Plan Year deferred
until the participant ceases to be a director.
(ii) For each director who has made this deferred cash election, the
Company shall establish a deferred compensation account and shall
credit such account for the compensation due. Interest shall be
credited to each such account based on the rate earned by the
fund or funds selected by the participant from among funds or
portfolios established under the General Mills, Inc. Savings Plan
or any other qualified benefit plan maintained by the Company
which the Minor Amendment Committee, or its delegate, in its
discretion, may from time to time establish.
(iii) Distribution of the participant's deferred compensation account
shall be at the time, and in the form of payment, elected by the
participant at the time of deferral. The distribution date may be
any date that is at least one year subsequent to the date of
deferral of such compensation, but the distribution must be made
or commenced by the later of (i) the date the participant attains
age 70 and (ii) five years after the director's retirement from
the Board.
A participant may elect to have the deferred compensation account
distributed in a single payment or in substantially equal annual
installments for a period not to exceed ten (10) years, or in
another form requested by the Participant, in writing, and
approved by the Committee.
(iv) In the event of the termination of a participant from Board
service other than by retirement, the Committee may in its sole
discretion require that distribution of all amounts allocated to
a participant's deferred compensation account be accelerated and
distributed as of the first business day of the calendar year
next following termination.
(v) The Company has established a Supplemental Benefits Trust with
Wells Fargo Bank Minnesota, N.A. as Trustee to hold assets of the
Company under certain circumstances as a reserve for the
discharge of the Company's obligations as to deferred cash
compensation under the Plan and certain other of deferred
compensation plans of the Company. In the
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event of a Change in Control as defined in Section 11 below, the
Company shall be obligated to immediately contribute such amounts
to the Trust as may be necessary to fully fund all cash benefits
payable under the Plan. Any participant of the Plan shall have
the right to demand and secure specific performance of this
provision. All assets held in the Trust remain subject only to
the claims of the Company's general creditors whose claims
against the Company are not satisfied because of the Company's
bankruptcy or insolvency (as those terms are defined in the Trust
Agreement). No participant has any preferred claim on, or
beneficial ownership interest in, any assets of the Trust before
the assets are paid to the participant and all rights created
under the Trust, as under the Plan, are unsecured contractual
claims of the participant against the Company.
(d) GMI Common Stock Alternative. Each participant may elect to receive
all or a specified percentage of his or her compensation in shares of
Common Stock, which will be issued at the end of each Plan Quarter.
The Company shall ensure that an adequate number of shares of Common
Stock are available for distribution to those participants making this
election. Only whole numbers of shares will be issued, with any
fractional share amounts paid in cash. For purposes of computing the
number of shares earned each Plan Quarter, the value of each share
shall be equal to the mean of the high and low price of shares of
Common Stock on the New York Stock Exchange on the third Business Day
preceding the last day of each Plan Quarter. For the purposes of this
Plan, "Business Day" shall mean a day on which the New York Stock
Exchange is open for trading. If a participant dies during a Plan
Year, the balance of the amount due to the date of the participant's
death shall be payable in full to the participant's designated
beneficiary, or, if none, to the participant's estate, in cash, as
soon as practicable following the date of death.
6. NON-QUALIFIED STOCK OPTIONS
(a) Grant of Options. Each non-employee director on the effective date of
the Plan (or, if first elected after the effective date of the Plan,
on the date the non-employee director is first elected) shall be
awarded an option (an "Option") to purchase 10,000 shares of Common
Stock. As of the close of business on each successive annual
stockholders' meeting date after the date of the original award, each
non-employee director re-elected to the Board shall be granted an
additional Option to purchase 10,000 shares of Common Stock. All
Options granted under the Plan shall be non-statutory options not
entitled to special tax treatment under Section 422 of the Internal
Revenue Code of 1986, as amended.
(b) Option Exercise Price. The per share price to be paid by the
non-employee director at the time an Option is exercised shall be 100%
of the Fair Market Value of the Common Stock on the date of grant.
"Fair Market Value" shall equal the mean of the high and low price for
the Common Stock on the New York Stock Exchange on the relevant date
or, if the New York Stock Exchange is closed on that date, on the last
preceding date on which the Exchange was open for trading.
(c) Term of Option. Each Option shall expire ten (10) years from the date
of grant.
(d) Exercise and Vesting of Option. Each Option will vest on the date of
the annual stockholders' meeting next following the date the Option is
granted. If, for any reason, a non-employee director ceases to serve
on the Board prior to the date an Option vests, such Option shall be
forfeited and all further rights of the non-employee director to or
with respect to such Option shall terminate. If a participant should
die during his or her term of service on the Board, any vested Option
may be exercised by the person designated in such participant's last
will and testament or, in the absence of such designation, by the
participant's estate and any unvested Options shall vest and become
exercisable in a proportionate amount, based on the full months of
service completed during the vesting period of the Option from the
date of grant to the date of death.
(e) Method of Exercise and Tax Obligations. A participant exercising an
Option shall give notice to the Company of such exercise and of the
number of shares elected to be purchased prior to 4:30 P.M. CST/CDT on
the day of exercise, which must be a business day at the executive
B-3
offices of the Company. The exercise price shall be paid to the
Company at the time of such exercise, subject to any applicable rule
or regulation adopted by the Committee:
(i) in cash (including check, draft, money order or wire transfer
made payable to the order of the Company);
(ii) through the tender of shares of Common Stock owned by the
participant (by either actual delivery or attestation); or
(iii) by a combination of (i) and (ii) above.
For determining the amount of the payment, Common Stock delivered
pursuant to (ii) or (iii) shall have a value equal to the Fair Market
Value of the Common Stock on the date of exercise. The Company may
also require payment of the amount of any federal, state or local
withholding tax attributable to the exercise of an Option or the
delivery of shares of Common Stock.
(f) Non-transferability. Except as provided by rule adopted by the
Committee, an Option shall be non-assignable and non-transferable by a
non-employee director other than by will or the laws of descent and
distribution. A non-employee director shall forfeit any Option
assigned or transferred, voluntarily or involuntarily, other than as
permitted under this subsection.
7. DEFERRAL OF STOCK OPTION GAINS
Under the Plan, Participants may defer receipt of the net shares of Common
Stock to be issued upon the stock-for-stock exercise of an Option issued
hereunder, as well as dividend equivalents on the net shares.
(a) Option Gain Deferral Election. A participant can elect to defer
receipt of Net Shares (defined below) of Common Stock resulting from a
stock-for-stock exercise of an exercisable Option issued to the
participant by completing and submitting to the Company an irrevocable
stock option deferral election at least six months in advance of
exercising the Option (which exercise must be done on or prior to the
expiration of the Option) and, on or prior to the exercise date,
delivering personally-owned shares equal in value to the Option
exercise price on the date of the exercise. "Net Shares" means the
difference between the number of shares of Common Stock subject to the
Option exercise and the number of shares of Common Stock delivered to
satisfy the Option exercise price. A participant may not revoke an
Option gain deferral election after it is received by the Company. A
participant may choose to defer receipt of all or only a portion of
the Net Shares to be received upon exercise of an Option. If only a
portion of the Net Shares is deferred, the balance will be issued at
the time of exercise.
(b) Distribution of Deferred Common Stock. At the time of a participant's
election to defer receipt of Common Stock issuable upon an Option
exercise or upon the award of Stock Units, as provided in Section
8(a), a participant must also select a distribution date and a form of
distribution. The distribution date may be any date that is at least
one year subsequent to either the exercise date for the related Option
or the date of grant in the case of Stock Units granted under Section
8(a) but the distribution must be made or commenced by the later of
(i) the date the participant attains age 70 and (ii) five years after
the date of the director's retirement from the Board.
A participant may elect to have deferred Common Stock distributed in a
single payment or in substantially equal annual installments for a
period not to exceed ten (10) years, or in another form requested by
the Participant, in writing, and approved by the Committee. In the
absence of an election, Common Stock issued in respect of Stock Units
shall be distributed in ten substantially equal annual installments
beginning on January 1 of each year following the year in which the
participant ceases to be a director. Common Stock issuable under a
single Option grant or pursuant to a single grant under Section 8(a)
shall have the same distribution date and form of distribution.
Notwithstanding the above, the following provisions shall apply:
(i) If an Option as to which a participant has made an Option gain
deferral election terminates prior to the exercise date selected
by the participant, or if the participant dies
B-4
or fails to deliver personally-owned shares in payment of the
exercise price, then the deferral election shall not become
effective.
(ii) In the event of the termination of a participant from Board
service other than by retirement, the Committee may, in its sole
discretion, require that distribution of all Stock Units
allocated to a participant's Deferred Stock Unit Accounts (as
defined in Section 7(c)(i) below) be accelerated and distributed
as of the first business day of the calendar year next following
the date of termination.
(iii) At the time elected by the participant for distribution of
Common Stock attributable to allocations under the participant's
Deferred Stock Unit Accounts, the Company shall cause to be
issued to the Participant, within three (3) days of the date of
distribution, shares of Common Stock equal to the number of Stock
Units credited to the Deferred Stock Unit Account and cash equal
to any dividend equivalent amounts which had not been used to
"purchase" additional Stock Units as provided below. Prior to
distribution and pursuant to any rules the Committee may adopt, a
Participant may authorize the Company to withhold a portion of
the shares of Common Stock to be distributed for the payment of
all federal, state, local and foreign withholding taxes required
to be collected in respect of the distribution.
(c) Deferred Stock Unit Accounts and Dividend Equivalents.
(i) A deferred stock unit account ("Deferred Stock Unit Account")
will be established for each Option grant covered by a
participant election to defer the receipt of Common Stock under
Section 7(a) above and, for each Net Share deferred, a Stock Unit
will be credited to the Deferred Stock Unit Account as of the
date of the Option exercise. A Deferred Stock Unit Account will
also be established each time a participant receives Stock Units
pursuant to Section 8(a) hereof. Participants may make an
election to receive dividend equivalents on Stock Units in cash
or reinvest such amount, and any change to such election shall
become effective six months after the date of the change. If the
amounts are reinvested, on each dividend payment date for the
Company's Common Stock, the Company will credit each Deferred
Stock Unit Account with an amount equal to the dividends paid by
the Company on the number of shares of Common Stock equal to the
number of Stock Units in the Deferred Stock Unit Account.
Dividend equivalent amounts credited to each Deferred Stock Unit
Account shall be used to "purchase" additional Stock Units for
the Deferred Stock Unit Account at a price equal to the mean of
the high and low price of the Common Stock on the New York Stock
Exchange on the dividend date. The Committee may, in its sole
discretion, direct either that all dividend equivalent amounts be
paid currently or all such amounts be reinvested if, for any
reason, such Committee believes it is in the best interest of the
Company to do so. If the participant fails to make an election,
the dividend equivalent amounts shall be reinvested.
Periodically, each participant will receive a statement of the
number of Stock Units in his or her Deferred Stock Unit
Account(s).
(ii) Participants who elect under the Plan to defer the receipt of
Common Stock issuable upon the exercise of Options or elect to
receive Stock Units under Section 8(a) below will have no rights
as stockholders of the Company with respect to allocations made
to their Deferred Stock Unit Account(s), except the right to
receive dividend equivalent allocations under Section 7(c)(i)
above. Stock Units may not be sold, transferred, assigned,
pledged or otherwise encumbered or disposed.
8. STOCK UNITS
(a) Awards. On the effective date of the Plan (or, if a non-employee
director is first elected after the effective date of the Plan, on the
date the non-employee director is first elected) and at the close of
business on each successive annual stockholders' meeting date, each
non-employee director shall be awarded the right to receive one
thousand (1,000) shares of Common Stock on a deferred basis ("Stock
Units"), subject to vesting as provided in Section 8(b). Only
non-employee directors re-elected to the Board shall be entitled to a
grant under this Section
B-5
8(a) of Stock Units awarded at the close of business on an annual
meeting date after the date of the original grant to the non-employee
director.
(b) Vesting of and Restrictions on Stock Units. A participant's interest
in the Stock Units shall vest on the date of the annual stockholders'
meeting next following the date of the award of the Stock Units (the
"Restricted Period"). If, for any reason, a non-employee director
ceases to serve on the Board prior to the date the non-employee
director's interest in a grant of Stock Units vests, such Stock Units
shall be forfeited and all further rights of the non-employee director
to or with respect to such Stock Units shall terminate. A participant
who dies prior to the vesting of Stock Units shall vest in a
proportionate number of shares of Stock Units, based on the full
months of service completed during the vesting period of the Stock
Units from the date of grant to the date of death. Stock Units may not
be sold, transferred, assigned, pledged or otherwise encumbered or
disposed until such time as share certificates for Common Stock are
issued to the participants.
(c) Distribution of Stock Units. Each participant receiving an award of
Stock Units under Section 8(a) above must select a date of
distribution and form of distribution as provided under Section 7(b)
above. The participant may also elect to have dividend equivalents
payable on Stock Units paid currently or reinvested in Stock Units as
provided under Section 7(c)(i).
(d) Other Terms and Conditions. The Company may require payment of the
amount of any federal, state or local withholding tax attributable to
the constructive or actual delivery of shares of Common Stock pursuant
to the terms of this Agreement.
9. GENERAL PROVISIONS FOR DEFERRED CASH, OPTION GAINS AND STOCK UNITS
The following provisions shall apply to the deferral of cash compensation
described in Section 5(c) hereof, the deferral of receipt of Common Stock
issued upon exercise of Options described in Section 7 hereof and the
treatment of Stock Units granted under Section 8 hereof.
(a) A participant may, at any time prior or subsequent to the commencement
of benefit payments or distribution of Common Stock in respect of
Stock Units under this Plan, elect in writing to have his or her form
of distribution under this Plan changed to an immediate single
distribution which shall be made within one (1) business day of
receipt by the Company of such request in the case of deferred cash
and three (3) business days in the case of Common Stock; provided that
the cash amount or number of shares of Common Stock subject to such
single distribution shall be reduced by an amount or number of shares
of Common Stock equal to the product of (X), the rate set forth in
Statistical Release H.15 (519), or any successor publication, as
published by the Board of Governors of the Federal Reserve System for
one-year U.S. Treasury notes under the heading "Treasury Constant
Maturities" for the first day of the calendar month in which the
request for a single sum distribution is received by the Company and
(Y) either (i) as to a cash distribution, the total single sum
distribution otherwise payable (based on the value of the account as
of the first day of the month in which the single sum amount is paid,
adjusted by a pro-rata portion of the specified rate of return for the
prior month in which the single sum is paid, determined by multiplying
the actual rate of return for such prior month by a fraction, the
numerator of which is the number of days in the month in which the
request is received prior to the date of payment, and the denominator
of which is the number of days in the month), or (ii) as to a
distribution of Common Stock in respect of Stock Units, the number of
Stock Units held on behalf of the participant multiplied by the mean
of the high and low price of shares of Common Stock on the New York
Stock Exchange on the date of the request or, if the date of the
request is not a Business Day, on the Business Day preceding the date
of the request.
(b) In the event of a severe financial hardship occasioned by an
emergency, including, but not limited to, illness, disability or
personal injury sustained by the participant or a member of the
participant's immediate family, a participant may apply to receive a
distribution, including a distribution of Common Stock in respect of
Stock Units, earlier than initially elected. The Committee may, in its
sole discretion, either approve or deny the request. The determination
made by the Committee will be final and binding on all parties. If the
request is granted, the
B-6
distributions will be accelerated only to the extent reasonably
necessary to alleviate the financial hardship.
(c) If the death of a participant occurs before a full distribution of
deferred cash amounts or Common Stock in respect of Stock Units is
made, a single distribution shall be made to the beneficiary
designated by the participant to receive such amounts. This
distribution shall be made as soon as practical following notification
that death has occurred. In the absence of any such designation, the
distribution shall be made to the personal representative, executor or
administrator of the participant's estate.
(d) As to all previous and future Plan years, and subject to the last
sentence of the first paragraph of Section 7(b) hereof, a participant
who is not within twelve (12) months of the date that such deferred
amount, deferred Common Stock or the first installment thereof would
be distributed under this Plan, shall be permitted to make no more
than two amendments to the initial election to defer distributions
such that his or her distribution date is either in the same calendar
year as the date of the distribution which would have been made in the
absence of such election amendment(s) or is at least one year after
the date of the distribution which would have been made in the absence
of such election amendment(s). A participant satisfying the conditions
set forth in the preceding sentence may also amend such election so
that his or her form of distribution is changed to substantially equal
annual installments for a period not to exceed ten (10) years or is
changed to a single distribution.
(e) Notwithstanding any other provision of this Plan to the contrary, the
Committee, by majority approval, may, in its sole discretion, direct
that distributions be made before such distributions are otherwise due
if, for any reason (including, but not limited to, a change in the tax
or revenue laws of the United States of America, a published ruling or
similar announcement issued by the Internal Revenue Service, a
regulation issued by the Secretary of the Treasury or his or her
delegate, or a decision by a court of competent jurisdiction involving
a participant or beneficiary), it believes that a participant or
beneficiary has recognized or will recognize income for federal income
tax purposes with respect to distributions that are or will be payable
to such participants under the Plan before they are paid to him. In
making this determination, the Committee shall take into account the
hardship that would be imposed on the participant or beneficiary by
the payment of federal income taxes under such circumstances.
10. CHANGE OF CONTROL
Options granted under the Plan will become immediately exercisable, and
Common Stock and dividend equivalents to be issued in respect of Stock
Units will be immediately distributed upon the occurrence of a "Change of
Control" as defined in Section 11.
11. ADMINISTRATION
The Plan shall be administered by the Committee. The Committee shall have
full power to interpret the Plan, formulate additional details and
regulations for carrying out the Plan and amend or modify the Plan as from
time to time it deems proper and in the best interests of the Company,
including amending the Plan to increase or decrease the size of annual
Option or Stock Unit grants made to non-employee directors, provided that
after a "Change of Control" no amendment, modification of or action to
terminate the Plan may be made which would affect compensation earned or
accrued prior to such amendment, modification or termination without the
written consent of a majority of participants determined as of the day
before a "Change of Control." Any decision or interpretation adopted by the
Committee shall be final and conclusive. A "Change of Control" means:
(a) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "1934 Act")) (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the 1934
Act) of voting securities of the Company where such acquisition causes
such Person to own 20% or more of the combined voting power of the
then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company
B-7
Voting Securities"); provided, however, that for purposes of this
subsection (1), the following acquisitions shall not be deemed to
result in a Change of Control: (i) any acquisition directly from the
Company, (ii) any acquisition by the Company, (iii) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained
by the Company or any corporation controlled by the Company or (iv)
any acquisition by any corporation pursuant to a transaction that
complies with clauses (i), (ii) and (iii) of subsection (3) below; and
provided, further, that if any Person's beneficial ownership of the
Outstanding Company Voting Securities reaches or exceeds 20% as a
result of a transaction described in clause (i) or (ii) above, and
such Person subsequently acquires beneficial ownership of additional
voting securities of the Company, such subsequent acquisition shall be
treated as an acquisition that causes such Person to own 20% or more
of the Outstanding Company Voting Securities; or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming
a director subsequent to the date hereof whose election, or nomination
for election by the Company's stockholders, 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
(c) The approval by the shareholders of the Company of a reorganization,
merger, consolidation, sale or other disposition of all or
substantially all of the assets of the Company ("Business
Combination") or, if consummation of such Business Combination is
subject, at the time of such approval by shareholders, to the consent
of any government or governmental agency, the obtaining of such
consent (either explicitly or implicitly by consummation); excluding,
however, such a Business Combination pursuant to which (i) all or
substantially all of the individuals and entities who were the
beneficial owners of the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 60% of, respectively, the then
outstanding shares of common stock and the combined voting power of
the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without
limitation, a corporation that as a result of such transaction owns
the Company or all or substantially all of the Company's assets either
directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such
Business combination of the Outstanding Company Voting Securities,
(ii) no Person (excluding any employee benefit plan (or related trust)
of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more
of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to
the Business Combination and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or
(d) Approval by the shareholders of the Company of a complete liquidation
or dissolution of the Company.
B-8
12. GOVERNING LAW
The validity, construction and effect of the Plan and any such actions
taken under or relating to the Plan shall be determined in accordance with
the laws of the State of Delaware and applicable Federal law.
13. NOTICES
Unless otherwise notified, all notices under this Plan shall be sent in
writing to the Company, attention Corporate Compensation, P.O. Box 1113,
Minneapolis, Minnesota 55440. All correspondence to the participants shall
be sent to the address which is their recorded address as listed on the
election forms.
B-9
NOTICE OF 2001 ANNUAL MEETING OF STOCKHOLDERS
AND
PROXY STATEMENT
GENERAL MILLS, INC.
[LOGO]
GENERAL MILLS, INC.
ANNUAL MEETING OF STOCKHOLDERS
MONDAY, SEPTEMBER 24, 2001
11:00 a.m. (CENTRAL DAYLIGHT TIME)
THE CHILDREN'S THEATRE COMPANY
2400 THIRD AVENUE SOUTH
MINNEAPOLIS, MN
- --------------------------------------------------------------------------------
[LOGO] GENERAL MILLS, INC. PROXY 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I appoint Stephen W. Sanger, Stephen R. Demeritt and Raymond G. Viault, together
and separately, as proxies to vote all shares of common stock that I have power
to vote at the annual meeting of stockholders to be held on September 24, 2001
at Minneapolis, Minnesota, and at any adjournment thereof, in accordance with
the instructions on the reverse side of this card and with the same effect as
though I were present in person and voting such shares. The proxies are
authorized in their discretion to vote upon such other business as may properly
come before the meeting and they may name others to take their place.
(CONTINUED, AND TO BE SIGNED AND DATED ON REVERSE SIDE)
----------------------
COMPANY #
CONTROL #
----------------------
THERE ARE THREE WAYS TO VOTE YOUR PROXY
VOTE BY PHONE
(FROM THE U.S. AND CANADA)
1-800-240-6326
Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a week.
Have your proxy card in hand when you call. You will be prompted to enter your
3-digit company number and a 7-digit control number, which are located above,
and then follow the simple instructions.
VOTE VIA INTERNET
http://www.eproxy.com/gis/
Use the Internet to vote your proxy 24 hours a day, 7 days a week. Have your
proxy card in hand when you access the web site. You will be prompted to enter
your 3-digit company number and a 7-digit control number, which are located
above, to create an electronic ballot.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we have provided.
Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned the proxy card. The
deadline for telephone or Internet voting is noon EDT, Sunday, September 23,
2001.
IF YOU VOTE BY PHONE OR INTERNET, PLEASE DO NOT MAIL YOUR PROXY CARD
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1, 2 AND 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES FOR
DIRECTOR
1. ELECTION OF 01 Stephen R. Demeritt 02 Livio D. DeSimone [ ] FOR all listed [ ] WITHHOLD
DIRECTORS: 03 William T. Esrey 04 Raymond V. Gilmartin nominees AUTHORITY
05 Judith R. Hope 06 Robert L. Johnson (except as to vote for all listed
07 Heidi G. Miller 08 Stephen W. Sanger marked below) nominees
09 A. Michael Spence 10 Dorothy A. Terrell
11 Raymond G. Viault
PLEASE FOLD HERE
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____________________________________________
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S), | |
WRITE THE NUMBER(S) OF THAT INDIVIDUAL(S) IN THE BOX PROVIDED TO THE RIGHT.) |____________________________________________|
2. APPROVAL OF APPOINTMENT OF KPMG LLP AS INDEPENDENT AUDITORS. [ ] For [ ] Against [ ] Abstain
3. APPROVAL OF GENERAL MILLS, INC. 2001 COMPENSATION PLAN FOR
NON-EMPLOYEE DIRECTORS. [ ] For [ ] Against [ ] Abstain
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 4.
4. STOCKHOLDER PROPOSAL CONCERNING GENETICALLY ENGINEERED FOOD PRODUCTS. [ ] For [ ] Against [ ] Abstain
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS MADE, IT WILL BE VOTED "FOR" ITEMS 1, 2 AND 3 AND "AGAINST" ITEM 4.
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SIGN-UP TODAY TO VIEW FUTURE PROXY STATEMENTS AND ANNUAL REPORTS VIA THE INTERNET, INSTEAD OF RECEIVING THEM BY MAIL.
TO REGISTER, FOLLOW INSTRUCTIONS FOR INTERNET VOTING OR REGISTER YOUR CONSENT DIRECTLY BY GOING TO
http://www.econsent.com/gis/.
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Address Change? Mark Box [ ] Indicate changes below: Dated ____________________________________
____________________________________________
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Signature(s) of Stockholder(s) in Box
PLEASE SIGN exactly as name appears at left.
Joint owners should each sign. Executors,
administrators, trustees, etc. should so
indicate when signing. If signer is a
corporation, please sign full name by duly
authorized officer.
[LOGO] GENERAL MILLS, INC. PROXY 2001
ANNUAL MEETING OF STOCKHOLDERS
MONDAY, SEPTEMBER 24, 2001
11:00 A.M. (CENTRAL DAYLIGHT TIME)
THE CHILDREN'S THEATRE COMPANY
2400 THIRD AVENUE SOUTH
MINNEAPOLIS, MN
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I appoint Stephen W. Sanger, Stephen R. Demeritt and Raymond G. Viault, together
and separately, as proxies to vote all shares of common stock that I have power
to vote at the annual meeting of stockholders to be held on September 24, 2001
at Minneapolis, Minnesota, and at any adjournment thereof, in accordance with
the instructions on the reverse side of this card and with the same effect as
though I were present in person and voting such shares. The proxies are
authorized in their discretion to vote upon such other business as may properly
come before the meeting and they may name others to take their place.
(CONTINUED, AND TO BE SIGNED AND DATED ON REVERSE SIDE)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1, 2 AND 3.
1. ELECTION OF 01 Stephen R. Demeritt 02 Livio D. DeSimone [ ] FOR all listed [ ] WITHHOLD
DIRECTORS: 03 William T. Esrey 04 Raymond V. Gilmartin nominees AUTHORITY
05 Judith R. Hope 06 Robert L. Johnson (except as to vote for all listed
07 Heidi G. Miller 08 Stephen W. Sanger marked below) nominees
09 A. Michael Spence 10 Dorothy A. Terrell
11 Raymond G. Viault
____________________________________________
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S), | |
WRITE THE NUMBER(S) OF THAT INDIVIDUAL(S) IN THE BOX PROVIDED TO THE RIGHT.) |____________________________________________|
2. APPROVAL OF APPOINTMENT OF KPMG LLP AS INDEPENDENT AUDITORS. [ ] For [ ] Against [ ] Abstain
3. APPROVAL OF GENERAL MILLS, INC. 2001 COMPENSATION PLAN FOR
NON-EMPLOYEE DIRECTORS. [ ] For [ ] Against [ ] Abstain
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 4.
4. STOCKHOLDER PROPOSAL CONCERNING GENETICALLY ENGINEERED FOOD PRODUCTS. [ ] For [ ] Against [ ] Abstain
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS MADE, IT WILL BE VOTED "FOR" ITEMS 1, 2 AND 3 AND "AGAINST" ITEM 4.
Dated ________________________________________
______________________________________________
______________________________________________
Signature(s) of Stockholder(s)
PLEASE SIGN exactly as name appears at left.
Joint owners should each sign. Executors,
administrators, trustees, etc. should so
indicate when signing. If signer is a
corporation, please sign full name by duly
authorized officer.
[LOGO] GENERAL MILLS, INC.
NOTICE OF 2001 ANNUAL MEETING OF STOCKHOLDERS
MONDAY, SEPTEMBER 24, 2001
August 15, 2001
Dear Stockholder:
The Annual Meeting of Stockholders of General Mills, Inc. will be held on
Monday, September 24, 2001, at 11:00 a.m., Central Daylight Time, in the
auditorium of the Children's Theatre Company, 2400 Third Avenue South,
Minneapolis, Minnesota for the following purposes:
1) To elect 11 directors;
2) To approve KPMG LLP as independent auditors for fiscal year 2002;
3) To adopt the General Mills, Inc. 2001 Compensation Plan for
Non-Employee Directors;
4) To act on a stockholder proposal concerning genetically engineered
food products, if presented; and
5) To act on any other proper business of the meeting.
RECORD DATE
July 26, 2001 has been fixed as the record date for determining stockholders who
are entitled to vote at the annual meeting. If you held General Mills common
stock on that date, or held shares of Ralcorp Holdings, Inc. common stock that
can be exchanged for General Mills stock as a result of the Company's 1997
acquisition of the Ralcorp branded cereal and snack businesses, you can vote at
the annual meeting.
DUPLICATE MAILINGS OF PROXY MATERIALS
Many stockholders have asked us to help eliminate the amount of duplicate
materials being delivered to their household. In May 2001, we sent a letter to
you asking whether you wanted to continue receiving more than one set of proxy
materials at your address. Since you did not object to receiving a single copy
of our Annual Report and Proxy Statement, only one copy of these materials has
been mailed to your address. Each General Mills stockholder residing at your
address, however, will receive a separate proxy card in its own envelope.
Stockholders who instructed us to continue sending a duplicate set of the Annual
Report and Proxy Statement have been mailed a complete set of materials.
Enclosed is a proxy card and voting instructions. Please review the Annual
Report and Proxy Statement that have been mailed to your household before voting
on the proposals set forth on the proxy card. You may vote by mail, telephone or
via the Internet as instructed on the card. Please contact Wells Fargo
Shareowner Services at 1-800-689-8788 or 651-450-4104 if you have not received
all the proxy cards for your household by September 3, 2001. If you would like
to receive a duplicate set of proxy materials, you may contact Wells Fargo
Shareowner Services directly.
Sincerely,
/s/ Siri S. Marshall
Siri S. Marshall, Secretary
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PLEASE NOTE THAT ONLY ONE COPY OF OUR ANNUAL REPORT AND PROXY STATEMENT HAS BEEN
MAILED, IN A SEPARATE ENVELOPE, TO YOUR HOUSEHOLD.
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[LOGO]
GENERAL MILLS, INC. * EXECUTIVE OFFICES
Number One General Mills Boulevard * Minneapolis, Minnesota
KATHLEEN M. CURRAN
Manager, Corporate
Secretary's Office
Telephone: (763) 764-5676
Facsimile: (763) 764-5011
August 15, 2001
Dear Stockholder:
On January 31, 1997, General Mills purchased the branded cereal and snack
food businesses of Ralcorp Holdings, Inc. and you, as a Ralcorp shareholder,
became entitled to receive General Mills common stock in exchange for your
Ralcorp stock.
Our records show that you have not yet exchanged your Ralcorp shares (these
are the green certificates) for General Mills shares. Until that exchange is
made, we cannot pay General Mills dividends to you. Since the Ralcorp
acquisition, we have paid $7.56 in dividends per General Mills share. Your
dividends are being held for you and will be paid at the time you exchange your
shares.
We encourage you to exchange your Ralcorp shares. If no exchange is made,
we are required by law to turn over the shares and accumulated dividends to the
state of last known address as unclaimed property, based on each state's escheat
schedule.
If you have questions about how to exchange your shares or you have lost
your letter of transmittal, please call Wells Fargo Shareowner Services
(formerly Norwest) at 1-800-380-1372. We look forward to serving your needs as a
General Mills stockholder.
Very truly yours,
/s/ Kathleen M. Curran
Kathleen M. Curran
MAILING ADDRESS: P.O. BOX 1113, MINNEAPOLIS, MINNESOTA 55440
PROXY BY PHONE
2001 PHONE VOTING SCRIPT
PROPOSAL BY PROPOSAL
SPEECH 1 Welcome. Please enter your three digit company
number located in the box in the upper right hand
corner of the proxy card.
IF NOT ENTERING AFTER ONE OR TWO PROMPTS,
Please enter the three digit company number now.
IF NOT ENTERING AFTER THREE PROMPTS,
I'm sorry. You are experiencing problems. Please
call again later or sign your proxy card and return
it in the postage-paid envelope.
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SPEECH 2 Please enter your seven digit NUMERIC Control Number
that is located in the box, directly under your
company number.
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SPEECH 2A IF INCORRECT CONTROL NUMBER HAS BEEN ENTERED,
I'm sorry. That was an incorrect control number.
Please reenter the seven digit numeric control
number now.
IF INCORRECTLY ENTERED THREE TIMES,
I'm sorry. The control numbers you entered were
invalid. Please call again later or sign your proxy
card and return it in the postage-paid envelope.
IF NOT ENTERING AFTER ONE OR TWO PROMPTS,
Please enter your seven digit control number now.
IF NOT ENTERING AFTER THREE PROMPTS,
I'm sorry. You are experiencing problems. Please
call again later or sign your proxy card and return
it in the postage-paid envelope.
WHEN CORRECTLY ENTERED, SYSTEM GOES TO SPEECH 3.
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SPEECH 3 To vote as the General Mills, Inc. Board recommends
on ALL proposals - Press 1 now. To vote on each
proposal separately, Press 0 now.
IF 1 IS PRESSED, SYSTEM GOES TO CLOSING A. IF 0 IS
PRESSED, SYSTEM GOES TO SPEECH 4.
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SPEECH 4 Proposal 1:
To vote for ALL Nominees, Press 1; to Withhold from
all Nominees, Press 9; To withhold from an
individual nominee, Press 0. Make your selection
now.
IF 1 IS PRESSED, SYSTEM GOES TO SPEECH 6. IF 9 IS
PRESSED, SYSTEM GOES TO SPEECH 6. IF 0 IS PRESSED,
SYSTEM GOES TO SPEECH 5.
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SPEECH 5 Enter the two digit number that appears next to the
nominee you DO NOT wish to vote for. Make your
selection now.
Press 1 to withhold from another Nominee or Press 0
if you have completed voting on Directors.
SUBSET: IF 1 - REPEAT SUBSET - "ENTER THE TWO....."
IF 0 - GO TO PROPOSAL 2, SPEECH 6.
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SPEECH 6 Proposal 2:
To vote FOR, Press 1; AGAINST, Press 9; Abstain,
Press 0. IF 1, 9 OR 0 PRESSED, GO TO SPEECH 7.
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SPEECH 7 Proposal 3:
To vote FOR, Press 1; AGAINST, Press 9; Abstain,
Press 0. IF 1,9 OR 0 PRESSED, GO TO SPEECH 8.
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SPEECH 8 Proposal 4:
To vote FOR, Press 1, AGAINST, Press 9, Abstain,
Press 0. AFTER COMPLETION - GO TO CLOSING B
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CLOSING A You have voted as the Board recommended. If this is
correct, Press 1; if incorrect, Press 0.
IF 1 IS PRESSED, GO TO SPEECH 9. IF 0 IS PRESSED, GO
TO SPEECH 10.
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CLOSING B Your votes have been cast as follows:
Proposal 1 - For All - Withhold All -
For All Except___
Proposal 2 - For, Against, Abstain
Proposal 3 - For, Against, Abstain
Proposal 4 - For, Against, Abstain
If this is correct, Press 1; if incorrect, Press 0.
IF 1 IS PRESSED, GO TO SPEECH 10. IF 0 IS PRESSED,
GO TO SPEECH 9.
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SPEECH 9 Your votes have been canceled. Please call again,
or mark, sign, date and return your proxy card in
the envelope provided. Good bye.
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SPEECH 10 Thank you for voting.
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[LOGO] General Mills
WELCOME TO GENERAL MILLS, INC.'S ELECTRONIC VOTING.
Access to this site is secured.
You will need the 3 digit company number and the 7 digit control number from the
top of the card you received by mail along with the Proxy Statement.
Please click on the proceed button below to continue to the secure voting site.
[Proceed]
[LOGO] General Mills
GENERAL MILLS, INC.'S ELECTRONIC VOTING
Please enter and submit the 3 digit company number and the 7 digit control
number from the top of the card you received by mail along with the Proxy
Statement.
Company number (3 digits):
/---------------------------------/
Control number (7 digits):
/---------------------------------/
[Submit]
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ADDITIONAL INFORMATION ABOUT GENERAL MILLS, INC. IS AVAILABLE AT OUR
CORPORATE PAGE.
If you encounter difficulties in voting electronically, please complete the card
you received with the Proxy Statement and mail it in the envelope provided to
you.
[LOGO] General Mills
GENERAL MILLS, INC.'S ELECTRONIC VOTING
The control number or the company number that you entered was not recognized.
Please use the Back button on your browser, enter the appropriate information
and click on the Proceed button.
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ADDITIONAL INFORMATION ABOUT GENERAL MILLS, INC. IS AVAILABLE AT OUR
CORPORATE PAGE.
If you encounter difficulties in voting electronically, please complete the card
you received with the Proxy Statement and mail it in the envelope provided to
you.
[LOGO] General Mills
GENERAL MILLS, INC.'S ELECTRONIC VOTING
Your identification number was recognized. Your name, address, and the number of
shares you owned as of the record date on the records of Wells Fargo Shareowner
Services, General Mills, Inc.'s transfer agent, appear below. If you own shares
in street name or through a broker, they will not appear in this listing.
- ---------------------------- ---------------------------- -------------------
Stockholder Source of Shares Number of Shares
- ---------------------------- ---------------------------- -------------------
Test Person COM 144.235
Somewhere Nice
Anywhere, Anystate 11111 RS 35,646.000
VIP 7,187.319
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The following online proxy card allows you to electronically authorize the
voting of these shares. Your vote will not be authorized until you have clicked
the SUBMIT YOUR VOTE button. Voting is explained in the Proxy Statement which
you received by mail.
[Proceed]
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ADDITIONAL INFORMATION ABOUT GENERAL MILLS, INC. IS AVAILABLE AT OUR
CORPORATE PAGE.
If you encounter difficulties in voting electronically, please complete the card
you received with the Proxy Statement and mail it in the envelope provided to
you.
[LOGO] General Mills
The following online proxy card allows you to electronically authorize the
voting of your shares. Your vote will not be authorized until you have clicked
the SUBMIT YOUR VOTE button. The items to be voted are explained in the Proxy
Statement which you received by mail.
GENERAL MILLS, INC.
ANNUAL MEETING OF STOCKHOLDERS
Monday, September 24, 2001
11:00 a.m. (Central Daylight Time)
The Children's Theatre Company
2400 Third Avenue South
Minneapolis, MN
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I appoint Stephen W. Sanger, Stephen R. Demeritt and Raymond G. Viault, together
and separately, as proxies to vote all shares of common stock that I have power
to vote at the annual meeting of stockholders to be held on September 24, 2001
at Minneapolis, Minnesota, and at any adjournment thereof, in accordance with
the instructions below and with the same effect as though I were present in
person and voting such shares. The proxies are authorized in their discretion to
vote upon such other business as may properly come before the meeting and they
may name others to take their place.
If you click on the "Submit Your Vote" button without direction on any matter,
the proxy will be voted "FOR" Items 1, 2 and 3 and "AGAINST" Item 4.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1, 2 AND 3.
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THE BOARD RECOMMENDS A VOTE "FOR" ALL NOMINEES FOR DIRECTOR.
1. Election of directors:
/ / FOR all nominees (except as noted below).
/ / WITHHOLD as to all nominees.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee(s),
click on the box next to the nominee's name below.)
/ / Stephen R. Demeritt
/ / Livio D. DeSimone
/ / William T. Esrey
/ / Raymond V. Gilmartin
/ / Judith R. Hope
/ / Robert L. Johnson
/ / Heidi G. Miller
/ / Stephen W. Sanger
/ / A. Michael Spence
/ / Dorothy A. Terrell
/ / Raymond G. Viault
THE BOARD RECOMMENDS A VOTE "FOR" PROPOSALS 2 AND 3.
2. Approval of appointment of KPMG LLP as independent auditors.
/ / FOR
/ / AGAINST
/ / ABSTAIN
3. Approval of General Mills, Inc. 2001 Compensation Plan for Non-Employee
Directors.
/ / FOR
/ / AGAINST
/ / ABSTAIN
THE BOARD RECOMMENDS A VOTE "AGAINST" PROPOSAL 4.
4. Stockholder proposal concerning genetically engineered food products.
/ / FOR
/ / AGAINST
/ / ABSTAIN
This proxy will be voted as directed. If no direction is made, it will be voted
"FOR" Items 1, 2 and 3 and "AGAINST" Item 4.
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If you are a joint owner of the shares being voted, by clicking the SUBMIT YOUR
VOTE button, you attest that all owners of such shares have consented to the
authorization of this proxy.
If you are holding the shares being voted as an executor, administrator,
trustee, guardian, or attorney-in-fact, or if you are an officer of a corporate
stockholder, by clicking the SUBMIT YOUR VOTE button, you attest that you have
the authority to authorize this proxy.
To submit your vote, click the button below.
(YOUR VOTE WILL NOT BE COUNTED UNTIL THE SUBMIT YOUR VOTE BUTTON IS CLICKED.)
[SUBMIT YOUR VOTE]
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ADDITIONAL INFORMATION ABOUT GENERAL MILLS, INC. IS AVAILABLE AT OUR
CORPORATE PAGE.
If you encounter difficulties in voting electronically, please complete the card
you received with the Proxy Statement and mail it in the envelope provided to
you.
[LOGO] General Mills
GENERAL MILLS, INC.'S ELECTRONIC PROXY
The submission of your electronic proxy is now complete, and is summarized
below.
ON ITEM 1 "ELECTION OF DIRECTORS" YOUR VOTE WAS:
FOR all nominees.
ON ITEM 2 "APPROVAL OF APPOINTMENT OF KPMG LLP AS INDEPENDENT AUDITORS" YOUR
VOTE WAS:
FOR.
ON ITEM 3 "APPROVAL OF GENERAL MILLS, INC. 2001 COMPENSATION PLAN FOR
NON-EMPLOYEE DIRECTORS." YOUR VOTE WAS:
FOR.
ON ITEM 4 "STOCKHOLDER PROPOSAL CONCERNING GENETICALLY ENGINEERED FOOD PRODUCTS"
YOUR VOTE WAS:
AGAINST.
If this IS NOT how you intended to vote, please use the back function of your
browser to return to the card and correct your vote.
If this IS how you intended to vote, your vote has been recorded and there is no
need to return your paper proxy card.
[Explanation About Participation in Electronic Consent Process for Delivery of
Future Proxy Materials Electronically and Link to Consent Web Site.]
Thank you for your attention.
Sincerely,
General Mills, Inc.
ADDITIONAL INFORMATION ABOUT GENERAL MILLS, INC. IS AVAILABLE AT OUR
CORPORATE PAGE.
If you encounter difficulties in voting electronically, please complete the card
you received with the Proxy Statement and mail it in the envelope provided to
you.