EXHIBIT 10.3
GENERAL MILLS, INC.
1998 EMPLOYEE STOCK PLAN
As Amended Through May 17, 2002
GENERAL MILLS, INC.
1998 EMPLOYEE STOCK PLAN
1. PURPOSE OF THE PLAN
The purpose of the General Mills, Inc. 1998 Employee Stock Plan (the
"Plan") is to attract and retain able employees by rewarding employees
of General Mills, Inc., its subsidiaries and affiliates (defined as
entities in which General Mills, Inc. has a significant equity or other
interest) (collectively, the "Company") and to align the interests of
employees with those of the stockholders of the Company through
compensation that is based on the Company's stock. Grants may be made
to employees under the Plan in lieu of salary increases and certain
other compensation and benefits.
2. EFFECTIVE DATE AND DURATION OF PLAN
This Plan shall become effective as of September 28, 1998.
3. ELIGIBLE PERSONS
Only persons who are employees of the Company shall be eligible to
receive grants of Stock Options, Restricted Stock or Restricted Stock
Units (each defined below) and become "Participants" under the Plan.
4. AWARD TYPE
Under this Plan, the Compensation Committee of the Company's Board of
Directors (the "Committee") may award Participants options ("Stock
Options") to purchase common stock of the Company ($.10 par value)
("Common Stock"). The grant of a Stock Option entitles the Participant
to purchase shares of Common Stock at an "Exercise Price" established
by the Committee. The Exercise Price for each share of Common Stock
issuable under a Stock Option shall not be less than 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 of the Common
Stock on the New York Stock Exchange on the date of grant. The
Committee may also grant Participants shares of Common Stock or the
right to receive shares of Common Stock subject to certain restrictions
("Restricted Stock" or "Restricted Stock Units") (Stock Options,
Restricted Stock and Restricted Stock Units are sometimes referred to
as "Awards").
5. STOCK OPTION TERM AND TYPE
Stock Options granted under the Plan shall be Non-Qualified Stock
Options governed by Section 83 of the Internal Revenue Code of 1986, as
amended (the "Code"). The term of any Stock Option granted under the
Plan shall be determined by the Committee, provided that the term of a
Stock Option shall not exceed 10 years and one month.
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6. COMMON STOCK SUBJECT TO THE PLAN
a) Maximum Shares Available for Delivery. Subject to Section
6(b), the maximum number of shares of Common Stock available
for issuance to Participants under the Plan shall be
28,000,000.
In addition, any Common Stock covered by a Stock Option
granted under the Plan, which is forfeited, cancelled or
expires in whole or in part shall be deemed not to be
delivered for purposes of determining the maximum number of
shares of Common Stock available for grants under the Plan.
If any Stock Option 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 the Stock
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 Restricted Stock or Restricted 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 Stock
Options.
c) Limits on Distribution. Distribution of shares of Common Stock
or other amounts under the Plan shall be subject to the
following:
(i) The total number of shares of Common Stock that shall
be available for Restricted Stock and Restricted Stock
Unit Awards under the Plan shall be limited to 15% of
the total shares authorized for Awards hereunder.
(ii) Notwithstanding any other provision of the Plan, the
Company shall have no liability to deliver any shares
of Common Stock under the Plan or make any other
distribution of benefits under the Plan unless such
delivery or distribution would comply with all
applicable laws (including, without limitation, the
requirements of the Securities Act of
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1933), and the applicable requirements of any
securities exchange or similar entity.
(iii) To the extent that the Plan provides for issuance of
stock certificates to reflect the issuance of shares of
Common Stock or Restricted Stock, the issuance may be
effected on a non-certificated basis, to the extent not
prohibited by applicable law or the applicable rules of
any stock exchange.
d) The Committee, in its discretion, may require as a condition
to the grant of Awards, the deposit of Common Stock owned by
the Participant receiving such grant, and the forfeiture of
such grants, if such deposit is not made or maintained during
the required holding period. Such shares of deposited Common
Stock may not be otherwise sold or disposed of during the
applicable holding period or restricted period. The Committee
may also determine whether any shares issued upon exercise of
a Stock Option shall be restricted in any manner.
7. EXERCISE OF STOCK OPTIONS
a) Exercise. Except as provided in Sections 11 and 12 (Change of
Control and Termination of Employment), each Stock Option may
be exercised only in accordance with the terms and conditions
of the Stock Option grant and during the periods as may be
established by the Committee. Twenty percent of each Stock
Option granted under the Plan in lieu of salary increases and
certain other compensation and benefits may be exercised
immediately upon granting and, subject to the Participant's
continued employment with the Company, additional 20% portions
of such Stock Option shall become exercisable each year
thereafter. All other Stock Options granted hereunder may be
exercised only after three years of the Participant's
continued employment with the Company following the date of
the Stock Option grant.
A Participant exercising a Stock 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
offices of the Company.
b) Payment. 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.
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c) Deferrals. The Committee may permit or require Participants to
defer receipt of any Common Stock issuable upon exercise of a
Stock Option, subject to such rules and procedures as it may
establish, which may include provisions for the payment or
crediting of interest, or dividend equivalents, including
converting such credits into deferred Common Stock
equivalents.
8. RESTRICTED STOCK AND RESTRICTED STOCK UNITS
With respect to Awards of Restricted Stock and Restricted Stock Units,
the Committee shall:
a) select Participants to whom Awards will be made, provided that
Restricted Stock Units may only be awarded to those employees
of the Company who are employed in a country other than the
United States;
b) determine the number of shares of Restricted Stock or the
number of Restricted Stock Units to be awarded;
c) determine the length of the restricted period, which shall be
no less than one year;
d) determine the purchase price, if any, to be paid by the
Participant for Restricted Stock or Restricted Stock Units;
and
e) determine any restrictions other than those set forth in this
Section 8.
Subject to the restrictions set forth in this Section 8, each
Participant who receives Restricted Stock shall have all rights as a
stockholder with respect to such shares, including the right to vote
the shares and receive dividends and other distributions.
Each Participant who receives Restricted Stock Units shall be eligible
to receive, at the expiration of the applicable restricted period, one
share of Common Stock for each Restricted Stock Unit awarded, and the
Company shall issue to each such Participant that number of shares of
Common Stock. Participants who receive Restricted Stock Units shall
have no rights as stockholders with respect to such Restricted Stock
Units until such time as share certificates for Common Stock are issued
to the Participants; provided, however, that quarterly during the
applicable restricted period for all Restricted Stock Units awarded
hereunder, the Company shall pay to each such Participant an amount
equal to the sum of all dividends and other distributions paid by the
Company during the prior quarter on that equivalent number of shares of
Common Stock.
9. TRANSFERABILITY OF STOCK OPTIONS
Except as otherwise provided by rules of the Committee, no Stock
Options shall be transferable by a Participant otherwise than (i) by
the Participant's last will and testament or (ii) by the applicable
laws of descent and distribution, and such Stock Options shall be
exercised during the Participant's lifetime only by the Participant or
his or her guardian or legal representative. Except as otherwise
provided in Section 8, no shares of
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Restricted Stock and no Restricted Stock Units shall be sold,
exchanged, transferred, pledged or otherwise disposed of during the
restricted period.
10. TAXES
Whenever the Company issues Common Stock under the Plan, the Company
may require the recipient to remit to the Company an amount sufficient
to satisfy any Federal, state or local tax withholding requirements
prior to the delivery of such Common Stock, or, in the discretion of
the Committee, upon the election of the Participant, the Company may
withhold from the shares to be delivered shares sufficient to satisfy
all or a portion of such tax withholding requirements.
11. CHANGE OF CONTROL
Each outstanding Stock Option shall become immediately and fully
exercisable for a period of one (1) year following the date of the
following occurrences, each constituting a "Change of Control":
a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act), (a
"Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the 1934 Act) of voting securities of
the Company where such acquisition causes such Person to own
20% or more of the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding
Voting Securities"); provided, however, that for purposes of
this subsection (a), 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 (c)
below; and provided, further, that if any Person's beneficial
ownership of the Outstanding 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 Voting Securities; or
b) Individuals who, as of the date hereof, constitute the Board
of Directors (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by
the Company's shareholders, was approved by a vote of at least
of 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
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c) The approval by the shareholders of the Company of a
reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company ("Business Combination") or, if consummation of such
Business Combination is subject, at the time of such approval
by stockholders, 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 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 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 stockholders of the Company of a complete
liquidation or dissolution of the Company.
After such one (1) year period the normal Stock Option exercise
provisions of the Plan shall govern. Notwithstanding any other
provision of the Plan, but subject to Section 5, in the event a
Participant's employment with the Company is terminated within two (2)
years of any of the events specified in (a), (b), (c) or (d), all
outstanding Stock Options of such Participant at that date of
termination shall be exercisable for a period of six (6) months
beginning on the date of termination.
With respect to Stock Option grants outstanding as of the date of any
such Change of Control which require the deposit of owned Common Stock
as a condition to obtaining rights, the deposit requirement shall be
terminated as of the date of the Change of Control and any such
deposited stock shall be promptly returned to the Participant.
In the event of a Change of Control, a Participant shall vest in all
shares of Restricted Stock and Restricted Stock Units, effective as of
the date of such Change of Control, and any deposited shares of Common
Stock shall be promptly returned to the Participant.
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12. TERMINATION OF EMPLOYMENT
a) Resignation or Termination for Cause. If the Participant's
employment by the Company is terminated by either
(i) the voluntary resignation of the Participant, or
(ii) a Company discharge due to Participant's illegal
activities, poor work performance, misconduct or
violation of the Company's policies or practices,
then Participant's Stock Options shall terminate three months
after such termination (but in no event beyond the original
full term of the Stock Options) and no Stock Options shall
become exercisable after such termination, and all shares of
Restricted Stock and Restricted Stock Units which are subject
to restriction on the date of termination shall be forfeited.
b) Other Termination. If the Participant's employment by the
Company terminates for any reason other than specified in
Sections 11, 12 (a), (c), (d) or (e), the following rules
shall apply:
(i) In the event that, at the time of such termination,
the sum of the Participant's age and service with the
Company equals or exceeds 70, the Participant's
outstanding Stock Options shall continue to become
exercisable, and shares of Restricted Stock and
Restricted Stock Units subject to share deposit
requirements shall continue to vest, each according
to the schedule established at the time of grant,
unless otherwise provided in the applicable Award
agreement. Shares of Restricted Stock and Restricted
Stock Units not subject to share deposit requirements
shall fully vest as of the date of termination. Stock
Options shall remain exercisable for the remaining
full term of such Stock Options.
(ii) In the event that, at the time of such termination,
the sum of Participant's age and service with the
Company is less than 70, Participant's outstanding
unexercisable Stock Options and unvested Restricted
Stock and Restricted Stock Units shall become
exercisable or vest, as the case may be, as of the
date of termination, in a pro-rata amount based on
the full months of employment completed during the
full vesting period from the date of grant to the
date of termination with such newly-vested Stock
Options and Stock Options exercisable on the date of
termination remaining exercisable for the lesser of
one year from the date of termination and the
original full term of the Stock Option. All other
Stock Options, shares of Restricted Stock and
Restricted Stock Units shall be forfeited as of the
date of termination. Provided, however,
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that if the Participant is an executive officer of
the Company, the Participant's outstanding Stock
Options which, as of the date of termination are not
yet exercisable, shall become exercisable effective
as of the date of such termination and, with all
outstanding Stock Options already exercisable on the
date of termination, shall remain exercisable for the
lesser of one year following the date of termination
and the original full term of the Stock Option, and
all shares of Restricted Stock and Restricted Stock
Units shall vest as of the date of termination.
c) Death. If a Participant dies while employed by the Company,
any Stock Option previously granted under this Plan 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, to the full extent that such Stock
Option could have been exercised by such Participant
immediately prior to death. Any outstanding Stock Options
granted on or after June 1, 2002, which, as of the date of
death, are not yet exercisable, shall fully vest and become
exercisable upon death. Outstanding Stock Options granted
prior to June 1, 2002, which, as of the date of death, are not
yet exercisable, shall fully vest and become exercisable in a
pro-rata amount, based on the full months of employment
completed during the full vesting period of the Stock Option
from the date of grant to the date of death.
With respect to Stock Options which require the deposit of
owned Common Stock as a condition to obtaining exercise
rights, in the event a Participant dies while employed by the
Company, such Stock Options may be exercised as provided in
the first paragraph of this Section 12(c) and any owned Common
Stock deposited by the Participant pursuant to such grant
shall be promptly returned to the person designated in such
Participant's last will and testament or, in the absence of
such designation, to the Participant's estate, and all
requirements regarding deposit by the Participant shall be
terminated.
A Participant who dies during any applicable restricted
period, for Restricted Stock or Restricted Stock Units granted
on or after June 1, 2002, shall fully vest in such shares of
Restricted Stock or Restricted Stock Units, effective as the
date of death. A Participant who dies during any applicable
restricted period, for any Restricted Stock or Restricted
Stock Units granted prior to June 1, 2002, shall vest in a
proportionate number of such shares of Restricted Stock or
Restricted Stock Units, effective as of the date of death.
Such proportionate vesting shall be pro-rata, based on the
number of full months of employment completed during the
restricted period prior to the date of death, as a percentage
of the applicable restricted period.
d) Retirement. The Committee shall determine, at the time of
grant, the treatment of the Stock Options, Restricted Stock
and Restricted Stock Units upon the retirement of the
Participant. Unless other terms are specified in the original
Grant, if the termination of employment is due to a
Participant's retirement on or after age 55, the Participant
may exercise a Stock Option, subject to the original terms and
conditions of the Stock Option and shall fully vest in all
shares of Restricted Stock or Restricted Stock Units effective
as of the date of retirement (unless any such Award
specifically provides otherwise).
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e) Spin-offs. If the termination of employment is due to the
cessation, transfer, or spin-off of a complete line of
business of the Company, the Committee, in its sole
discretion, shall determine the treatment of all outstanding
Awards under the Plan.
13. ADMINISTRATION OF THE PLAN
a) Administration. The authority to control and manage the
operations and administration of the Plan shall be vested in
Committee in accordance with this Section 13.
b) Selection of Committee. The Committee shall be selected by the
Board, and shall consist of two or more members of the Board.
c) Powers of Committee. The authority to manage and control the
operations and administration of the Plan shall be vested in
the Committee, subject to the following:
(i) Subject to the provisions of the Plan, the Committee
will have the authority and discretion to select from
among the eligible Company employees those persons
who shall receive Awards, to determine the time or
times of receipt, to determine the types of Awards
and the number of shares covered by the Awards, to
establish the terms, conditions, performance
criteria, restrictions, and other provisions of such
Awards, and (subject to the restrictions imposed by
Section 14) to cancel or suspend Awards. In making
such determinations, the Committee may take into
account the nature of services rendered by the
individual, the individual's present and potential
contribution to the Company's success and such other
factors as the Committee deems relevant.
(ii) The Committee will have the authority and discretion
to establish terms and conditions of Awards as the
Committee determines to be necessary or appropriate
to conform to applicable requirements or practices of
jurisdictions outside of the United States.
(iii) The Committee will have the authority and discretion
to interpret the Plan, to establish, amend, and
rescind any rules and regulations relating to the
Plan, to determine the terms and provisions of any
agreements made pursuant to the Plan, and to make all
other determinations that may be necessary or
advisable for the administration of the Plan.
(iv) Any interpretation of the Plan by the Committee and
any decision made by it under the Plan is final and
binding.
d) Delegation by Committee. Except to the extent prohibited by
applicable law or the applicable rules of a stock exchange,
the Committee may allocate all or any portion of its
responsibilities and powers to any one or more of its members
and may delegate all or any part of its responsibilities and
powers to any person or persons selected by it. Any such
allocation or delegation may be revoked by the Committee at
any time.
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14. AMENDMENTS OF THE PLAN
The Committee may from time to time prescribe, amend and rescind rules
and regulations relating to the Plan. Subject to the approval of the
Board of Directors, where required, the Committee may at any time
terminate, amend, or suspend the operation of the Plan, provided that
no action shall be taken by the Committee to:
a) permit granting of Stock Options at less than Fair Market
Value; and
b) except as provided in Section 6, permit the repricing of
outstanding Stock Options.
No termination, modification, suspension, or amendment of the Plan
shall alter or impair the rights of any Participant pursuant to an
outstanding Award without the consent of the Participant. There is no
obligation for uniformity of treatment of Participants under the Plan.
15. FOREIGN JURISDICTIONS
The Committee may adopt, amend, and terminate such arrangements, not
inconsistent with the intent of the Plan, as it may deem necessary or
desirable to make available tax or other benefits of the laws of any
foreign jurisdiction, to employees of the Company who are subject to
such laws and who receive Awards under the Plan.
16. NOTICES
All notices to the Company regarding the Plan shall be in writing,
effective as of actual receipt by the Company, and shall be sent to:
General Mills, Inc.
Number One General Mills Boulevard
Minneapolis, Minnesota 55426
Attention: Corporate Compensation
Effective September 28, 1998
As Amended December 13, 1999
As Amended July 1, 2000
As Amended December 17, 2001
As Amended May 17, 2002
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