AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 23, 2003
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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GENERAL MILLS, INC.
(Exact name of registrant as specified in its charter)
Delaware 41-0274440
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)
organization)
NUMBER ONE GENERAL MILLS BOULEVARD
MINNEAPOLIS, MINNESOTA 55426
(763) 764-7600
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
SIRI S. MARSHALL, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
GENERAL MILLS, INC.
NUMBER ONE GENERAL MILLS BOULEVARD
MINNEAPOLIS, MINNESOTA 55426
(763) 764-7230
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPY TO:
JONATHAN ABRAM, ESQ.
DORSEY & WHITNEY LLP
SUITE 1500
50 SOUTH SIXTH STREET
MINNEAPOLIS, MN 55402
(612) 343-7962
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) UNIT(2) PRICE(2) REGISTRATION FEE
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Zero Coupon Convertible Senior Debentures Due
2022.............................................. $2,233,305,000 $722.50 $1,613,562,862 $148,450
Common Stock, $0.10 par value(3).................... (4) -- -- (5)
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(1) The Zero Coupon Convertible Senior Debentures Due 2002 were issued at an
original price of $671.65 per $1,000 principal amount at maturity, which
represents an aggregate initial issue price of $1,499,999,303 and an
aggregate principal amount at maturity of $2,233,305,000.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based on the average of the bid and asked prices of
the Debentures on January 21, 2003.
(3) This Registration Statement also relates to rights to purchase shares of the
Registrant's Series B Preference Shares (the "Rights") which are attached to
all shares of common stock. Until the occurrence of certain prescribed
events, the Rights are not exercisable, are evidenced by the certificates
for the common stock and will be transferable along with and only with the
common stock. The value attributable to the Rights, if any, is reflected in
the value of the common stock.
(4) Includes 29,090,807 shares of common stock issuable upon conversion of the
Debentures at the conversion rate of 13.0259 shares per $1,000 principal
amount at maturity and, pursuant to Rule 416, such indeterminate number of
shares as may become issuable as a result of antidilution adjustments.
(5) Under Rule 457(i), there is no additional filing fee with respect to the
shares of common stock issuable upon conversion of the Debentures because no
additional consideration will be received in connection with the exercise of
the conversion privilege.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE SEC, ACTING PURSUANT TO SUCH SECTION 8(a), MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING SECURITYHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
REQUIRED.
SUBJECT TO COMPLETION, DATED JANUARY 23, 2003
PROSPECTUS
(GENERAL MILLS LOGO)
$2,233,305,000
PRINCIPAL AMOUNT AT MATURITY
GENERAL MILLS, INC.
ZERO COUPON CONVERTIBLE SENIOR DEBENTURES DUE 2022
AND COMMON STOCK ISSUABLE UPON CONVERSION OF THE DEBENTURES
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This prospectus covers resales from time to time by selling securityholders
of our Zero Coupon Convertible Senior Debentures Due October 28, 2022 and the
shares of our common stock issuable upon conversion of the Debentures. We issued
the Debentures in a private placement in October 2002 at an issue price of
$671.65 per $1,000 principal amount at maturity.
We will not generally pay interest on the Debentures prior to maturity. The
issue price represents a yield to maturity of 2.00% per annum, assuming
contingent cash interest does not accrue. We will pay contingent cash interest
during any six-month period beginning on or after October 28, 2005 that follows
a period in which the average trading price of the Debentures is above specified
levels.
Each Debenture will be convertible, at your option, into shares of our
common stock, par value $.10 per share, initially at a conversion rate of
13.0259 shares of common stock per $1,000 principal amount at maturity, which is
equivalent to an initial conversion price of $51.56 per share, subject to
adjustment as described in this prospectus, (1) if the sale price of our common
stock issuable upon conversion of the Debentures reaches specified thresholds;
(2) during any period in which our senior unsecured credit rating is below a
specified level; (3) if the Debentures are called for redemption; (4) if there
is an event of default with respect to the Debentures; or (5) if specified
corporate transactions have occurred. Upon conversion, we will have the right to
deliver, in lieu of our common stock, cash or a combination of cash and shares
of our common stock. Shares of our common stock are traded on the New York Stock
Exchange under the symbol "GIS." The last reported sale price of our common
stock on January 22, 2003 was $46.80 per share.
We may redeem some or all of the Debentures for cash on or after October
28, 2005. You may require us to repurchase all or a portion of your Debentures
on October 28, 2005, 2007, 2012 and 2017 or, subject to specified exceptions,
upon a change of control event. In either repurchase at your option, we may
choose to pay the repurchase price in cash or shares of our common stock or a
combination of cash and shares of our common stock.
Under the terms of the indenture, we and each holder of the Debentures have
agreed, for United States federal income tax purposes, to treat the Debentures
as indebtedness that is subject to the regulations governing contingent payment
debt instruments. See "United States Federal Income Tax Considerations."
INVESTING IN THE DEBENTURES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 9.
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We will not receive any of the proceeds from the sale of the Debentures or
the underlying shares of common stock by any of the selling securityholders. The
selling securityholders may sell the Debentures or common stock either directly
or through underwriters, broker-dealers or agents and in one or more
transactions at market prices prevailing at the time of sale or at negotiated
prices.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is , 2003.
TABLE OF CONTENTS
Incorporation of Certain Documents by
Reference............................ 1
Cautionary Statement Regarding Forward-
Looking Statements................... 2
Summary................................ 3
Risk Factors........................... 9
Use of Proceeds........................ 11
Ratios of Earnings to Fixed Charges.... 11
Price Range of Common Stock............ 12
Dividend Policy........................ 12
Description of the Debentures.......... 13
Description of Capital Stock........... 31
United States Federal Income Tax
Considerations....................... 34
State and Other Tax Considerations..... 39
Selling Securityholders................ 40
Plan of Distribution................... 46
Validity of Securities................. 48
Experts................................ 48
Where You Can Find More Information
About General Mills.................. 48
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All references in this prospectus to "General Mills", "we", "us" and "our"
are to General Mills, Inc., and not to its subsidiaries.
All references in this prospectus to "$", "U.S. Dollars" and "dollars" are
to United States dollars.
Trademarks and servicemarks in this prospectus are set forth in capital
letters and are owned or licensed by us or our subsidiaries.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We have filed the following documents with the SEC, and these documents are
incorporated in this prospectus by reference:
- Annual Report on Form 10-K for the year ended May 26, 2002;
- Quarterly Report on Form 10-Q for the quarter ended August 25, 2002;
- Current Report on Form 8-K filed on August 14, 2002;
- Current Reports on Form 8-K (two) filed on September 18, 2002;
- Current Report on Form 8-K filed on October 7, 2002;
- Current Reports on Form 8-K (three) filed on October 23, 2002;
- Current Reports on Form 8-K (two) filed on November 12, 2002;
- Current Reports on Form 8-K (two) filed on November 20, 2002;
- Current Reports on Form 8-K filed on December 12, 2002;
- Quarterly Report on Form 10-Q for the quarter ended November 24, 2002;
and
- Current Report on Form 8-K filed on January 6, 2003.
All documents that we file with the SEC under Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this prospectus until the end of the
offering of the Debentures and the underlying shares of common stock will be
incorporated by reference and be a part of this prospectus from their respective
filing dates. Any statement contained in a document incorporated by reference in
this prospectus shall be deemed to be modified or superseded for purposes of
this prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is incorporated by reference in this
prospectus modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
You may request a copy of these filings at no cost, by writing or
telephoning General Mills at the following address and phone number: General
Mills, Inc., Number One General Mills Boulevard, Minneapolis, MN 55426,
Attention: Corporate Secretary, (763) 764-2167.
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
We and our representatives may from time to time make written or oral
forward-looking statements with respect to our annual or long-term goals,
including statements contained in this prospectus, the documents incorporated by
reference in this prospectus, our filings with the SEC and our reports to
stockholders.
The words or phrases "will likely result," "are expected to," "will
continue," "is anticipated," "estimate," "project" or similar expressions
identify "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are subject to risks
and uncertainties that could cause actual results to differ materially from
historical earnings and those currently anticipated or projected. We caution
readers not to place undue reliance on any of our forward-looking statements,
which speak only as of the date made.
In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, we are identifying important factors that could
affect our financial performance and could cause our actual results for future
periods to differ materially from any opinions or statements expressed with
respect to future periods in any current statements.
Our future results could be affected by a variety of factors, such as:
- competitive dynamics in the U.S. ready-to-eat cereal market, including
pricing and promotional spending levels by competitors;
- economic conditions, including changes in inflation rates or interest
rates;
- product development;
- acquisitions or dispositions of businesses or assets;
- actions of competitors other than as described above;
- changes in capital structure;
- changes in laws and regulations, including changes in accounting
standards;
- customer demand;
- effectiveness of advertising and marketing spending or programs;
- consumer perception of health-related issues;
- fluctuations in the cost and availability of supply chain resources; and
- foreign economic conditions, including currency rate fluctuations.
Our predictions about future volume and earnings could be affected by
difficulties resulting from the Pillsbury acquisition, such as:
- integration problems;
- failure to achieve anticipated synergies;
- difficulty consolidating manufacturing capacity;
- unanticipated liabilities;
- inexperience in new business lines and geographic operating locations;
and
- changes in the competitive environment.
We specifically decline to undertake any obligation to publicly revise any
forward-looking statements that have been made to reflect events or
circumstances after the date of those statements or to reflect the occurrence of
anticipated or unanticipated events.
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SUMMARY
This summary contains a general summary of the information contained in
this prospectus. The summary may not contain all of the information that is
important to you. You should carefully consider the information contained in and
incorporated by reference in the entire prospectus, including the information
set forth under the heading "Risk Factors" in this prospectus. Our fiscal year
ends on the last Sunday in May. All references to our fiscal years are to our
fiscal years ending on the last Sunday in May of each such period.
OUR BUSINESS
General Mills is a leading manufacturer and marketer of packaged consumer
foods. We market our products primarily through our own sales organizations,
supported by advertising and other promotional activities. We primarily
distribute our products directly to retail food chains, cooperatives, membership
stores and wholesalers. Certain food products, such as yogurt and some
foodservice and refrigerated products, are sold through distributors and
brokers.
We were incorporated under the laws of the State of Delaware in 1928. On
May 26, 2002, we employed approximately 29,900 persons worldwide. Our principal
executive offices are located at Number One General Mills Boulevard,
Minneapolis, Minnesota 55426; telephone number (763) 764-7600. See "Where You
Can Find More Information About General Mills" for details about information
incorporated by reference into this prospectus.
BUSINESS SEGMENTS
On October 31, 2001, we completed the acquisition of the worldwide
businesses of The Pillsbury Company from Diageo plc. Following the acquisition
of The Pillsbury Company, we restructured our management organization and
aggregated our businesses into three reportable segments:
- U.S. Retail;
- Bakeries and Foodservice; and
- International.
U.S. Retail consists of cereals, meals, refrigerated and frozen dough
products, baking products, snacks, yogurt and health venture activities. The
Bakeries and Foodservice segment consists of products marketed to retail and
wholesale bakeries and offered to the commercial and non-commercial foodservice
sectors throughout the United States and Canada, such as restaurants and school
cafeterias. The International segment is made up of retail business outside the
United States and foodservice business outside of the United States and Canada.
Our primary product and service categories and our main brands are outlined
below:
U.S. RETAIL
The U.S. Retail segment accounted for approximately 77% of our total fiscal
2002 net sales. Our principal product categories in the U.S. Retail segment are:
- Big G Cereals. We produce and sell a number of ready-to-eat cereals,
including such well-known brands as CHEERIOS, WHEATIES and TOTAL.
- Meals. We manufacture and sell several lines of convenient dinner
products, including BETTY CROCKER dry packaged dinner mixes, specialty
potatoes and instant mashed potatoes, LLOYD's refrigerated entrees, OLD
EL PASO Mexican foods, PROGRESSO soups, and GREEN GIANT canned and frozen
vegetables and meal starters.
- Pillsbury USA. We manufacture and sell refrigerated and frozen dough
products, frozen breakfast products and snack products, including a
variety of PILLSBURY refrigerated and frozen dough
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products for cookies, breads and rolls; PILLSBURY frozen waffles and
breakfast pastries; and TOTINO'S frozen pizza and snacks.
- Baking Products. We make and sell a line of dessert, muffin and baking
mixes under the BETTY CROCKER trademark; baking mix under the BISQUICK
trademark; and flour under the GOLD MEDAL trademark.
- Snacks. We market POP SECRET microwave popcorn; lines of grain snacks
and fruit snacks, CHEX and GARDETTO's snack mixes; and BUGLES snacks.
- Yoplait-Colombo/Health Ventures. We manufacture and sell yogurt
products, such as YOPLAIT and COLOMBO yogurt, including YOPLAIT WHIPS!, a
mousse-like yogurt and YOPLAIT NOURICHE, a meal replacement yogurt drink,
both introduced in fiscal 2002. We also market organic food products
under our CASCADIAN FARM and MUIR GLEN trademarks.
BAKERIES AND FOODSERVICE
Bakeries and Foodservice accounted for approximately 13% of our total
fiscal 2002 net sales. We market mixes and unbaked, par-baked and fully baked
dough products marketed to bakeries, together with branded products and custom
products that are offered to commercial and non-commercial foodservice sectors
such as school cafeterias, restaurants and convenience stores.
INTERNATIONAL
International operations accounted for approximately 10% of our total
fiscal 2002 net sales. In Canada, we market products in many categories,
including cereals, meals, refrigerated dough products, baking products and
snacks. Outside of North America, we offer numerous local brands in addition to
such internationally recognized brands as HAAGEN-DAZS ice cream, OLD EL PASO
Mexican foods, GREEN GIANT vegetables, PILLSBURY dough products and mixes, BETTY
CROCKER mixes and BUGLES snacks. We also sell mixes and dough products to bakery
and foodservice customers outside of the United States and Canada.
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THE OFFERING
Issuer........................ General Mills, Inc.
Debentures.................... $2,233,305,000 aggregate principal amount at
maturity of Zero Coupon Convertible Senior
Debentures Due October 28, 2022.
Issue Price................... The Debentures were issued at a price of
$671.65 per $1,000 principal amount at
maturity, plus accrued original issue discount,
if any, from October 28, 2002. This original
issue discount accrues daily at a rate of 2.00%
per year beginning on October 28, 2002,
calculated on a semiannual bond equivalent
basis, using a 360-day year composed of twelve
30-day months.
Ranking....................... The Debentures are general unsecured
obligations of General Mills and rank equal in
right of payment with all other existing and
future unsecured and unsubordinated obligations
of General Mills. The Debentures are not
guaranteed by any of our subsidiaries and,
accordingly, the Debentures are effectively
subordinated to the indebtedness and other
liabilities of our subsidiaries, including
trade creditors.
Maturity Date................. October 28, 2022.
Yield to Maturity............. 2.00% per year computed on a semiannual bond
equivalent basis, using a 360-day year composed
of twelve 30-day months, assuming no contingent
cash interest accrues.
Interest...................... We will not generally pay cash interest on the
Debentures, except as set forth below under
"Contingent Cash Interest."
Contingent Cash Interest...... We will pay contingent cash interest to the
holders of Debentures during the six-month
periods from April 28 to October 27 and from
October 28 to April 27, as appropriate,
commencing with the six-month period beginning
October 28, 2005, if the average trading price
of a Debenture for the five trading days ending
on the second trading day immediately preceding
the beginning of the relevant six-month period
exceeds 120% of the accreted value of such
Debenture. Notwithstanding the foregoing, if we
declare a dividend on our common stock for
which the record date falls prior to the first
day of a six-month period but the payment date
falls within such six-month period, then the
five trading day measuring period for
determining the trading price will be the five
trading days preceding such record date.
The amount of contingent cash interest payable
per $1,000 principal amount at maturity of
Debentures in respect of any six-month period
will equal the greater of (i) 15% of the
product of (x) the sum of the regular cash
dividends paid by us per share on our common
stock during the applicable six-month period
multiplied by (y) the number of shares of
common stock issuable upon conversion of $1,000
principal amount at maturity of Debentures at
the then applicable conversion rate or (ii)
$1.50. However, the amount of contingent
interest may not exceed $2.50 per $1,000
principal amount at maturity of Debentures for
any six-month period.
United States Federal Income
Tax Considerations............ Pursuant to the indenture, we and each holder
of a Debenture agree, for United States federal
income tax purposes, to treat the
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Debentures as debt instruments that are subject
to regulations that govern contingent payment
debt instruments. Under these regulations, even
if we do not pay any contingent interest on the
Debentures, a beneficial owner of the
Debentures who is a U.S. Holder, as defined
below under "United States Federal Income Tax
Considerations -- Tax Consequences to United
States Holders," will be required to include
interest at the rate described below in its
gross income for U.S. federal income tax
purposes, regardless of whether the owner uses
the cash or accrual method of tax accounting.
This interest, also referred to as tax original
issue discount, will accrue at a rate equal to
6.73% per year, computed on a semi-annual bond
equivalent basis, which represents the yield at
which we would issue fixed-rate nonconvertible
debt securities with no contingent payments,
but with terms otherwise similar to the
Debentures. The rate at which the tax original
discount will accrue for U.S. federal income
tax purposes will exceed the Debentures' yield
to maturity of 2.00%.
Each holder of Debentures will recognize a gain
or loss on the sale, exchange, conversion or
redemption of a Debenture in an amount equal to
the difference between the amount realized,
including the fair market value of any common
stock received upon conversion or redemption,
and the holder's adjusted tax basis in the
Debentures. Any gain recognized by a holder on
the sale, exchange, conversion or redemption of
a Debenture generally will be ordinary interest
income; any loss will be ordinary loss to the
extent of the interest previously included in
income, and thereafter capital loss. See
"United States Federal Income Tax
Considerations."
Conversion Rights............. Holders may convert their Debentures prior to
the close of business on October 28, 2022, (1)
if the sale price of our common stock issuable
upon conversion of the Debentures reaches
specified thresholds; (2) during any period in
which our senior unsecured credit rating is
below a specified level; (3) if the Debentures
are called for redemption; (4) if there is an
event of default with respect to the
Debentures; or (5) if specified corporate
transactions have occurred. See "Description of
Debentures -- Conversion Rights." Debentures
called for redemption may be surrendered for
conversion until the close of business on the
business day prior to the redemption date.
For each $1,000 principal amount at maturity of
Debentures surrendered for conversion, a holder
will receive 13.0259 shares of our common
stock. This represents an initial conversion
price of $51.56 per share of common stock. Upon
a conversion, we may choose to deliver, in lieu
of shares of our common stock, cash or a
combination of cash and shares of our common
stock. The conversion rate may be adjusted for
certain reasons, but will not be adjusted for
original issue discount or accrued and unpaid
contingent cash interest, if any. Upon
conversion, holders will not receive any cash
payment representing original issue discount or
contingent cash interest, if any. Instead,
accrued original issue discount and contingent
cash interest, if any, will be deemed paid by
the common stock received by holders on
conversion.
6
Payment at Maturity........... Each holder of $1,000 principal amount at
maturity of the Debentures will be entitled to
receive $1,000 at maturity, plus accrued and
unpaid contingent cash interest, if any.
Sinking Fund.................. None.
Optional Redemption by
General Mills................. We may not redeem the Debentures prior to
October 28, 2005. We may redeem some or all of
the Debentures for cash on or after October 28,
2005, upon at least 30 days but not more than
60 days notice by mail to holders of Debentures
at the redemption prices set forth under
"Description of the Debentures -- Optional
Redemption by Us."
Repurchase Right of Holders... Each holder of the Debentures may require us to
repurchase all or a portion of its Debentures
on October 28, 2005, 2007, 2012 and 2017 at a
price equal to the issue price of the
Debentures plus accrued original issue discount
and accrued and unpaid contingent cash
interest, if any, to the date of repurchase. We
may choose to pay the purchase price in cash,
common stock, or a combination of cash and
shares of our common stock. If we elect to pay
the repurchase price with shares of our common
stock or a combination of cash and our common
stock, we must notify holders not less than 30
business days prior to the repurchase date. If
we elect to pay all or a portion of the
repurchase price in common stock, the shares of
common stock will be valued at 100% of the
average sale price for the five trading days
ending on the third trading day prior to the
repurchase date.
Change of Control Put......... Upon a change of control of General Mills, you
may require us, subject to certain conditions,
to repurchase all or a portion of your
Debentures. We will pay a purchase price equal
to the issue price of the Debentures plus
accrued original issue discount and accrued and
unpaid contingent cash interest, if any, to the
date of repurchase. We may choose to pay the
repurchase price in cash, common stock, or a
combination of cash and shares of our common
stock. If we elect to pay all or a portion of
the repurchase price in common stock, the
shares of our common stock will be valued at
100% of the average sale price of our common
stock for five trading days ending on the third
trading day prior to the repurchase date.
Events of Default............. If there is an event of default under the
Debentures, the issue price of the Debentures,
plus accrued original issue discount and
accrued and unpaid contingent cash interest, if
any, may be declared immediately due and
payable. These amounts automatically become due
and payable if an event of default relating to
certain events of our bankruptcy, insolvency or
reorganization occurs.
Use of Proceeds............... We will not receive any proceeds from the sale
by any selling securityholder of the Debentures
or the underlying common stock.
Form, Denomination and
Registration.................. The Debentures have been issued in fully
registered form, in denominations of $1,000
principal amount at maturity and
7
integral multiples of $1,000. The Debentures
are represented by global Debentures, deposited
with the trustee as custodian for The
Depository Trust Company and registered in the
name of Cede & Co., DTC's nominee. Beneficial
interests in the global Debentures are shown
on, and any transfers are effected only
through, records maintained by DTC and its
participants. See "Description of the
Debentures -- Form, Denomination and
Registration."
Trading....................... We do not intend to list the Debentures on any
national securities exchange. The Debentures
issued in the initial placement are eligible
for trading in the PORTAL market. Debentures
resold using this prospectus, however, will no
longer be eligible for trading in the PORTAL
system.
NYSE Symbol for our
Common Stock.................. Our common stock is traded on the New York
Stock Exchange under the symbol "GIS."
DIAGEO CALL OPTION
Simultaneously with the initial placement of the Debentures, we separately
entered into agreements with Diageo plc pursuant to which Diageo granted us call
options during a three year period ending on October 28, 2005 to purchase from
it up to approximately 29.1 million shares, subject to adjustment, of our common
stock held by Diageo, which equals the number of shares initially issuable upon
conversion of the Debentures. The exercise price for the call options is $51.56
per share of common stock. We paid Diageo approximately $89.3 million from our
current cash in consideration for the grant of the call options.
We may exercise the call options no earlier than May 1, 2003, and we may
not exercise the call options prior to November 1, 2003 if we are required to
pay Diageo a contingent purchase price adjustment under the terms of our
Pillsbury acquisition. We also may not exercise the call options during the
period Diageo continues to account for its investment in our common stock as an
associate under UK generally accepted accounting principles, except during the
final month of the term of the call options. In general, Diageo may account for
its equity investment in us as an associate so long as it continues to hold at
least 20% of our outstanding common stock. While Diageo continues to account for
its investment in our common stock as an associate, we may exercise the call
options to purchase up to five million shares of our common stock (so long as
such purchase would not cause Diageo to own less than 20% of our outstanding
common stock) at any time after either May 1 or November 1, 2003 until
expiration of the call options. Subject to the foregoing, the call options are
exercisable in whole or part from time to time, except during the final month of
the term of the call options. Any exercise of a call option during the final
month of the option's term must be made for the entire balance of shares covered
by the call options but not yet purchased.
The shares covered by the call options represent approximately 36.8% of the
shares of our common stock held by Diageo, which were acquired in connection
with our purchase of Pillsbury from Diageo. Diageo has agreed with us that it
will not offer, sell contract to sell or otherwise dispose of any shares of our
common stock covered by the call options during the term of the options. Under
our shareholders agreement with it, Diageo is further precluded from selling
shares of our common stock from December 1, 2002 to July 1, 2003. Diageo will
otherwise remain the record and beneficial owner of the shares throughout the
term of the call options. We have agreed to indemnify Diageo against certain
liabilities in connection with the call option and the initial placement of the
Debentures.
8
RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. The risks and uncertainties described below are not the
only ones facing our company. Additional risks and uncertainties not presently
known to us or that we currently deem immaterial may also impair our business
operations.
If any of the following risks actually occurs, our business, financial
condition or results of operations could be materially adversely affected. In
that case, the trading price of the Debentures and our common stock could
decline substantially.
This prospectus also contains forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from those
anticipated in the forward-looking statements as a result of a number of
factors, including the risks described below and elsewhere in this prospectus.
You should also review our disclosures set forth under the heading "Cautionary
Statement Regarding Forward-Looking Statements" in this prospectus.
FAILURE TO INTEGRATE THE PILLSBURY BUSINESSES SUCCESSFULLY COULD ADVERSELY
AFFECT OUR FINANCIAL PERFORMANCE AND IMPACT OUR ABILITY TO MAKE PAYMENT ON THE
DEBENTURES.
We acquired the Pillsbury Company from Diageo plc on October 31, 2001. Our
acquisition of Pillsbury involves a number of risks, including difficulty in
successfully integrating the Pillsbury businesses, the risk that the acquired
businesses will not achieve the results we expect, our limited experience with
the operation of new business lines, exposure to unanticipated events or
liabilities and potential disruption of our business. As a result, we cannot
assure you that our acquisition of Pillsbury will generate the business
opportunities and synergies that we anticipate.
If we are unable to integrate the Pillsbury businesses successfully, we may
not realize anticipated cost savings and revenue growth, which may negatively
impact our profitability and cash flows. The occurrence of any of the other
events referred to above, or other unforeseen developments in connection with
the acquisition and integration of Pillsbury, could materially and adversely
affect our results of operations.
THERE MAY BE NO PUBLIC MARKET FOR THE DEBENTURES.
There is no existing trading market for the Debentures. Although the
initial purchasers in the private placement of the Debentures have advised us
that they currently intend to make a market in the Debentures, they are not
obligated to do so and may discontinue their market-making activities at any
time without notice. Consequently, we cannot assure you that any market for the
Debentures will develop, or if one does develop, that it will be maintained. If
an active market for the Debentures fails to develop or be sustained, the
trading price of the Debentures could decline. We do not intend to apply for
listing of the Debentures on any securities exchange or any automated quotation
system.
IF YOU ARE ABLE TO RESELL YOUR DEBENTURES, MANY FACTORS MAY AFFECT THE PRICE YOU
RECEIVE, WHICH MAY BE LOWER THAN YOU BELIEVE TO BE APPROPRIATE.
If you are able to resell your Debentures, the price you receive will
depend on many factors that may vary over time, including:
- the number of potential buyers;
- the level of liquidity of the Debentures;
- our ratings published by major credit rating agencies;
- our financial performance;
- the amount of indebtedness we have outstanding;
- the level, direction and volatility of market interest rates generally;
9
- the market for similar securities;
- the redemption and repayment features of the Debentures to be sold; and
- the time remaining to the maturity of your Debentures.
As a result of these factors, you may only be able to sell your Debentures
at prices below those you believe to be appropriate, including prices below the
price you paid for them.
WE HAVE A SUBSTANTIAL AMOUNT OF INDEBTEDNESS, WHICH COULD ADVERSELY AFFECT OUR
FINANCIAL PERFORMANCE AND IMPACT OUR ABILITY TO MAKE PAYMENTS ON THE DEBENTURES.
We have a substantial amount of indebtedness. The indenture for the
Debentures and our other agreements under which we have issued indebtedness do
not prevent us from incurring additional unsecured indebtedness in the future.
Our level of indebtedness could have important consequences to the holders
of the Debentures. For example, it:
- may limit our ability to obtain additional financing for working capital,
capital expenditures or general corporate purposes, particularly if the
ratings assigned to our debt securities by rating organizations were
revised downward;
- will require us to dedicate a substantial portion of our cash flow from
operations to the payment of principal and interest on our debt, reducing
the funds available to us for other purposes including expansion through
acquisitions, capital expenditures, marketing spending and expansion of
our product offerings; and
- may limit our flexibility to adjust to changing business and market
conditions and make us more vulnerable to a downturn in general economic
conditions as compared to our competitors.
Our ability to make scheduled payments or to refinance our obligations with
respect to our indebtedness will depend on our financial and operating
performance, which, in turn, is subject to prevailing economic conditions and to
financial, business and other factors beyond our control.
THE DEBENTURES ARE EFFECTIVELY SUBORDINATED TO ANY SECURED OBLIGATIONS WE MAY
HAVE OUTSTANDING AND TO THE OBLIGATIONS OF OUR SUBSIDIARIES.
Although the Debentures are unsubordinated obligations, they are
effectively subordinated to any secured obligations we may have, to the extent
of the assets that serve as security for those obligations. The Debentures are
also effectively subordinated to all liabilities of our subsidiaries, to the
extent of their assets, since they are separate and distinct legal entities with
no obligation to pay any amounts due under our indebtedness, including the
Debentures, or to make any funds available to us, whether by paying dividends or
otherwise, so that we can do so. While we do not currently have any material
secured obligations or material subsidiary liabilities, we may incur them in the
future.
YOU SHOULD CONSIDER THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF OWNING
THE DEBENTURES.
Under the indenture, we have agreed, and by acceptance of a beneficial
interest in the Debentures each beneficial owner of the Debentures is deemed to
have agreed, among other things, to treat the Debentures for United States
federal income tax purposes as indebtedness that is subject to regulations
governing contingent payment debt instruments. The discussion below assumes that
the Debentures will be so treated. However, the tax characterization of the
Debentures is uncertain and thus no assurance can be given that the Internal
Revenue Service will not assert that the Debentures should be treated
differently. An alternative characterization by the IRS could affect the amount,
timing and character of income, gain or loss in respect of an investment in the
Debentures.
In general, beneficial owners of the Debentures who are U.S. Holders, as
defined below under "United States Federal Income Tax Considerations -- Tax
Consequences to United States Holders," will
10
be required to accrue interest income on the Debentures in the manner described
herein, regardless of whether the owner uses the cash or accrual method of tax
accounting. These beneficial owners will be required, in general, to accrue
interest based on the rate at which we would issue a fixed-rate nonconvertible
debt instrument with no contingent payments, but otherwise with terms and
conditions similar to the Debentures. Accordingly, these beneficial owners will
generally be required to include interest in taxable income at a rate in excess
of the Debentures' yield to maturity.
Upon a sale, exchange, conversion or redemption of a Debenture, each
beneficial owner will recognize gain or loss equal to the difference between the
amount realized by that beneficial owner and the beneficial owner's adjusted tax
basis in the Debentures. In general, in the case of a conversion or redemption
of a Debenture where we elect to pay in common stock, the amount realized by the
beneficial owner will include the fair market value of the stock received. Any
gain on a sale, exchange, conversion or redemption of a Debenture will be
treated as ordinary interest income.
You should consult your own tax advisor regarding the United States
federal, state, local, foreign or other tax consequences of acquiring, owning
and disposing of the Debentures. A summary of the United States federal income
tax consequences of ownership of the Debentures is described in this prospectus
under the heading "United States Federal Income Tax Considerations."
WE EXPECT THAT THE TRADING VALUE OF THE DEBENTURES WILL BE SIGNIFICANTLY
AFFECTED BY THE PRICE OF OUR COMMON STOCK.
The market price of the Debentures is expected to be significantly affected
by the market price of our common stock. This may result in greater volatility
in the trading value of the Debentures than would be expected for nonconvertible
debt securities we issue.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the Debentures or the
shares of common stock offered by this prospectus.
RATIOS OF EARNINGS TO FIXED CHARGES
Our consolidated ratios of earnings to fixed charges for each of the fiscal
years ended May 1998 through 2002 and the 26-week periods ended November 25,
2001 and November 24, 2002 are as follows:
FISCAL YEARS ENDED 26 WEEKS ENDED
------------------------------------------ ---------------
MAY 31 MAY 30 MAY 28 MAY 27 MAY 26 NOV 25 NOV 24
1998 1999 2000 2001 2002 2001 2002
------ ------ ------ ------ ------ ------ ------
5.63 6.67 6.25 5.29 2.50 4.66 3.18
The ratio of earnings to fixed charges has been computed by dividing income
before income taxes plus fixed charges (net of capitalized interest) by fixed
charges. Fixed charges consist of interest expense before reduction for
capitalized interest and one-third of rental expense, which is considered to be
representative of an interest factor.
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PRICE RANGE OF COMMON STOCK
Our common stock, which trades under the symbol "GIS," is listed on the New
York Stock Exchange. The following table presents, for the periods indicated,
the high and low closing sales prices per share of our common stock as reported
on the New York Stock Exchange.
HIGH LOW
------ ------
FISCAL YEAR ENDED MAY 28, 2000
First Quarter............................................. $43.13 $39.31
Second Quarter............................................ 43.94 37.38
Third Quarter............................................. 38.56 29.38
Fourth Quarter............................................ 41.38 30.31
FISCAL YEAR ENDED MAY 27, 2001
First Quarter............................................. $41.75 $32.13
Second Quarter............................................ 43.44 31.38
Third Quarter............................................. 45.40 38.75
Fourth Quarter............................................ 46.35 37.26
FISCAL YEAR ENDED MAY 26, 2002
First Quarter............................................. $45.36 $42.05
Second Quarter............................................ 51.16 42.50
Third Quarter............................................. 52.86 43.22
Fourth Quarter............................................ 50.39 41.61
FISCAL YEAR ENDED MAY 25, 2003
First Quarter............................................. $45.58 $37.38
Second Quarter............................................ 45.96 40.14
Third Quarter (through January 22, 2003).................. 48.00 43.19
On January 22, 2003, the last reported sale price for our common stock on
the New York Stock Exchange was $46.80 per share.
DIVIDEND POLICY
Dividends paid to shareholders totaled $358 million, $312 million and $329
million in fiscal years 2002, 2001 and 2000, respectively. Consistent with our
financial objectives, we expect to continue paying dividends at the current rate
per share for the foreseeable future.
The payment of future dividends is subject to the discretion of our board
of directors which will consider, among other factors, our operating results,
overall financial condition and capital requirements, as well as general
business conditions.
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DESCRIPTION OF THE DEBENTURES
We issued the Debentures under an indenture, dated as of October 28, 2002,
between us and BNY Midwest Trust Company, as trustee. Initially, the trustee
will also act as paying agent, conversion agent and calculation agent for the
Debentures.
The following description is only a summary of the material provisions of
the Debentures and the indenture. We urge you to read these documents in their
entirety because they, and not this description, define your rights as holders
of the Debentures.
GENERAL TERMS OF THE DEBENTURES
The Debentures offered hereby:
- are limited to $2,233,305,000 in aggregate principal amount at maturity;
- were issued at a discount from their principal amount at maturity, at an
initial price to investors of $671.65 per $1,000 principal amount at
maturity of the Debentures;
- bear no cash interest except for contingent cash interest which may be
payable as set forth below under "-- Contingent Cash Interest;"
- have a yield to maturity of 2.00% per year (assuming no contingent cash
interest accrues) computed on a semiannual bond equivalent basis, using a
360-day year composed of twelve 30-day months;
- bear contingent interest in cash during any six-month period beginning on
or after October 28, 2005 that follows a period in which the average
trading price of the Debentures is above specified levels, as set forth
below under "-- Contingent Cash Interest;"
- are general unsecured obligations of General Mills, ranking equally with
all of our other obligations that are unsecured and unsubordinated; as
indebtedness of General Mills, the Debentures are effectively
subordinated to all indebtedness and liabilities of our subsidiaries;
- are convertible into our common stock initially at a conversion rate of
13.0259 shares per $1,000 principal amount at maturity of Debentures
(equivalent to an initial conversion price of $51.56 per share), subject
to the conditions and adjustments as described under "-- Conversion
Rights;"
- are redeemable at our option in whole or in part for cash beginning on
October 28, 2005 upon the terms set forth under "-- Optional Redemption
by Us;"
- are subject to repurchase by us at your option on October 28, 2005, 2007,
2012 and 2017 or upon a change of control of General Mills, upon the
terms and at the repurchase prices set forth below under "-- Repurchase
of Debentures at the Option of Holders -- Optional Put;" and
- are due on October 28, 2022, unless earlier converted, redeemed by us at
our option or repurchased by us at your option.
The indenture does not contain any financial covenants and does not
restrict us from paying dividends, incurring additional indebtedness or issuing
or repurchasing our other securities. The indenture also does not protect you in
the event of a highly leveraged transaction or a change of control of General
Mills, except to the extent described under "-- Repurchase of Debentures at the
Option of Holders -- Change of Control Put" and "-- Conversion Rights --
Conversion Rights Upon Occurrence of Certain Corporate Transactions" below.
No sinking fund is provided for the Debentures and the Debentures are not
subject to defeasance. The Debentures are issued only in registered form,
without coupons, in denominations of $1,000 principal amount at maturity and
integral multiples of $1,000.
You may present definitive Debentures for conversion, registration of
transfer and exchange at our office or agency in New York City, which will
initially be the corporate trust office of the trustee currently
13
located at 101 Barclay Street, Bondmaster Operations 7E, New York, New York
10041. For information regarding conversion, registration of transfer and
exchange of global Debentures, see "-- Form, Denomination and Registration." No
service charge will be made for any registration of transfer or exchange of
Debentures, but we may require payment of a sum sufficient to cover any tax or
other governmental charge payable as a result of any transfer or exchange.
We will make all payments at maturity on global Debentures to The
Depository Trust Company, or DTC, in immediately available funds.
CONTINGENT INTEREST
We will pay contingent cash interest to the holders of Debentures during
the six-month periods from April 28 to October 27 and from October 28 to April
27, as appropriate, commencing with the six-month period beginning October 28,
2005, if the average trading price of a Debenture for the five trading days
ending on the second trading day immediately preceding the beginning of the
relevant six-month period exceeds 120% of the Accreted Value of the Debentures.
Notwithstanding the foregoing, if we declare a dividend on our common stock for
which the record date falls prior to the first day of a six-month period but the
payment date falls within such six-month period, then the five trading day
measuring period for determining the trading price will be the five trading days
preceding such record date. The "Accreted Value" of a Debenture, at any time of
determination, equals the original issue price plus accrued original issue
discount.
The "trading price" of the Debentures on any date of determination means
the average of the secondary market bid quotations per Debenture obtained by us
or the calculation agent for $10,000,000 principal amount at maturity of the
Debentures at approximately 3:30 p.m., New York City time, on the determination
date from three independent nationally recognized securities dealers we select.
However, if at least three bids cannot reasonably be obtained by us or the
calculation agent, but two bids are obtained, then the average of the two bids
will be used, and if only one bid can reasonably be obtained by us or the
calculation agent, this one bid will be used. If either we or the calculation
agent cannot reasonably obtain at least one bid for $10,000,000 principal amount
at maturity of the Debentures from a nationally recognized securities dealer or,
in our reasonable judgment, the bid quotations are not indicative of the
secondary market value of the Debentures, then the trading price of the
Debentures will equal (a) the then-applicable conversion rate of the Debentures
multiplied by (b) the sale price of our common stock on the determination date.
The "sale price" of our common stock on any date means the closing per
share sale price (or if no closing sale price is reported, the average of the
bid and ask prices or, if more than one in either case, the average of the
average bid and the average ask prices) on that date as reported on the New York
Stock Exchange or, if our common stock is not listed on the New York Stock
Exchange, then as reported on the principal U.S. securities exchange in which
our common stock is traded or by the Nasdaq system, as the case may be.
The amount of contingent interest payable per $1,000 principal amount at
maturity of Debentures in respect of any six-month period will equal the greater
of (i) 15% of the product of (x) the sum of the regular cash dividends paid by
us per share on our common stock during the applicable six-month period
multiplied by (y) the number of shares of common stock issuable upon conversion
of $1,000 principal amount at maturity of Debentures at the then applicable
conversion rate or (ii) $1.50. However, the amount of contingent interest may
not exceed $2.50 per $1,000 principal amount at maturity of Debentures for any
six-month period.
"Regular cash dividends" mean quarterly or other periodic cash dividends
that (1) have not been declared extraordinary dividends by our board of
directors and (2) do not constitute extraordinary cash dividends as defined
below under "Conversion Rights -- Conversion Rate Adjustments."
14
In the event contingent interest is payable, we will disseminate a press
release through Dow Jones & Company, Inc. or Bloomberg Business News containing
this information or publish the information on our Web site or through such
other public medium as we may use at that time.
Contingent cash interest, if any, will accrue and be payable to holders of
Debentures as of the 15th day preceding the last day of the relevant six-month
period. The payments will be paid on the last day of the relevant six-month
period.
There are two exceptions to the preceding paragraph:
- In general, we will not pay accrued and unpaid contingent cash interest
on any Debentures that are converted into our common stock. Instead,
accrued contingent cash interest will be deemed paid by the common stock
received by holders on conversion. If a holder of Debentures converts
after a record date for a contingent cash interest payment but prior to
the corresponding interest payment date, the holder will receive on that
interest payment date accrued and unpaid contingent cash interest on
those Debentures, notwithstanding the holder's conversion of those
Debentures prior to that interest payment date, because that holder will
have been the holder of record on the corresponding record date. However,
at the time that holder surrenders Debentures for conversion, the holder
must pay to us an amount equal to the contingent cash interest that has
accrued and that will be paid on the related interest payment date. The
preceding sentence does not apply, however, to a holder that converts
Debentures that are called by us for redemption after a record date for a
contingent cash interest payment but prior to the corresponding interest
payment date. Accordingly, if we elect to redeem Debentures on a date
that is after a record date but prior to the corresponding interest
payment date, and prior to each redemption date a holder of Debentures
selected for redemption chooses to convert those Debentures, the holder
will not be required to pay us, at the time that holder surrenders those
Debentures for conversion, the amount of contingent cash interest it will
receive on the contingent cash interest payment date.
- We will pay contingent cash interest to a person other than the holder of
record on the record date if we elect to redeem, or holders elect to
require us to repurchase, the Debentures on a date that is after a record
date but on or prior to the corresponding interest payment date. In this
instance, we will pay accrued and unpaid contingent cash interest on the
Debentures being redeemed to, but not including, the redemption date or
the repurchase date, as the case may be, to the same person to whom we
will pay the principal of those Debentures.
Except as provided below, we will pay contingent cash interest on:
- global Debentures to DTC in immediately available funds;
- any definitive Debentures having an aggregate principal amount at
maturity of $5,000,000 or less by check mailed to the holders of those
Debentures; and
- any definitive Debentures having an aggregate principal amount at
maturity of more than $5,000,000 by wire transfer in immediately
available funds if requested by the holders of those Debentures.
At maturity we will pay contingent cash interest on any definitive
Debentures at our office or agency in New York City, which initially will be the
corporate trust office of the trustee, BNY Midwest Trust Company.
CONVERSION RIGHTS
GENERAL
You may convert all or any portion of any outstanding Debentures into our
common stock, subject to the conditions described below, initially at a
conversion rate of 13.0259 shares per $1,000 principal amount at maturity of the
Debentures (equal to an initial conversion price of $51.56). Any Debentures
called for
15
redemption must be surrendered for conversion prior to the close of business on
the business day prior to the redemption date.
The conversion rate is subject to adjustment as described below. We will
not issue fractional shares of common stock upon conversion of the Debentures.
Instead, we will pay the cash value of such fractional shares based upon the
sale price of our common stock on the business day immediately preceding the
conversion date. You may convert Debentures only in denominations of $1,000
principal amount at maturity and integral multiples of $1,000.
Upon determination that securityholders are or will be entitled to convert
their Debentures into shares of common stock in accordance with the following
provisions, we will issue a press release and publish such information on our
website as soon as practicable.
Holders may surrender Debentures for conversion into our common stock until
the close of business on October 28, 2022 only under the following
circumstances:
Conversion Rights Based on Common Stock Price. Commencing after November
24, 2002, holders may surrender their Debentures for conversion into shares of
common stock in any fiscal quarter (and only during such fiscal quarter), if, as
of the last day of the immediately preceding fiscal quarter, the sale price of
our common stock for at least 20 trading days in a period of 30 consecutive
trading days ending on the last trading day of such fiscal quarter is more than
a specified percentage (beginning at 125% and declining 0.25% per six-month
period thereafter to 115% on October 28, 2022) of the accreted conversion price
per share of common stock on the last day of such fiscal quarter (the
"conversion trigger price"). The accreted conversion price per share as of any
day will equal the sum of the original issue price of a Debenture plus the
accreted original issue discount to that day, with that amount divided by the
number of shares of common stock issuable upon the conversion of $1,000
principal amount at maturity of Debentures on that day. The conversion trigger
price on October 28, 2022 will be $88.29.
"Trading day" means a day during which trading in securities generally
occurs on the NYSE or, if the common stock is not listed for trading on the
NYSE, on the principal other national or regional securities exchange on which
the common stock is then listed or, if the common stock is not listed for
trading on a national or regional securities exchange, on the National
Association of Securities Dealers Automated Quotation system or, if the common
stock is not quoted on the National Association of Securities Dealers Automated
Quotation System, on the principal other market on which the common stock is
then traded.
Conversion Rights Based on Credit Ratings Downgrade. Holders may also
surrender a Debenture for conversion during any period in which the senior
unsecured credit rating assigned to us is both Ba3 or lower by Moody's Investor
Services, Inc. and BB- or lower by Standard & Poor's Ratings Group, or we are no
longer rated by those two ratings services or our ratings are suspended by both
ratings services.
Conversion Rights Upon Notice of Redemption. A holder may surrender for
conversion, in accordance with the conversion rights provided herein, a
Debenture called for redemption at any time prior to the close of business on
the business day prior to the redemption date, even if it is not otherwise
convertible at such time. A Debenture for which a holder has delivered a
purchase notice or change in control purchase notice as described below
requiring us to purchase the Debenture may be surrendered for conversion only if
the notice is withdrawn in accordance with the indenture.
Conversion upon an Event of Default. If an event of default under the
Debentures has occurred with respect to the Debentures, the Debentures may be
surrendered for conversion at any time during the continuance of the event of
default. The Debentures will cease to be convertible pursuant to this paragraph
following the cure or waiver of the event of default.
Conversion Rights Upon Occurrence of Certain Corporate Transactions. If we
are party to a consolidation, merger or binding share exchange pursuant to which
our shares of common stock will be converted into cash, securities or other
property, the Debentures may be surrendered for conversion at any time during
the period that commences on the date which is 15 days prior to the anticipated
effective date
16
of the transaction and ends on, and does not include, the date which is 15 days
after the actual date of the transaction. At the effective time of the
transaction, the right to convert a Debenture into shares of common stock will
be changed into a right to convert it into the kind and amount of cash,
securities or other property of us or another person which the holder would have
received if the holder had converted the holder's Debentures immediately prior
to the transaction. If the transaction also constitutes a "change of control",
as defined below, the holder can require us to repurchase all or a portion of
its Debentures as described under "-- Repurchase of Debentures at the Option of
Holders -- Change of Control Put."
If we elect to make (1) a distribution described in the fourth clause of
the first paragraph under "-- Conversion Rate Adjustments" below or (2) a
distribution of cash to all holders of our common stock, which distribution has
a per share value equal to more than 15% of the sale price of our shares of
common stock on the day immediately preceding the declaration date for the
distribution, we will be required to give notice to the holders of Debentures at
least 20 days prior to the ex-dividend date for the distribution. Upon the
giving of the notice, the Debentures may be surrendered for conversion at any
time until the close of business on the business day immediately preceding the
ex-dividend date for the distribution or until we announce that the distribution
will not take place. No adjustment to the conversion rate or the ability of a
holder of a Debenture to convert will be made if we provide that holders of
Debentures will participate in the transaction without conversion or in certain
other cases.
Upon conversion, we may choose to deliver, in lieu of our common stock,
cash or a combination of cash and shares of our common stock as described below.
Conversion Prior to Maturity: If we choose to satisfy all or any portion of
our obligation (the "conversion obligation") in cash, we will notify you through
the trustee of the dollar amount to be satisfied in cash (which must be
expressed either as 100% of the conversion obligation or as a fixed dollar
amount) at any time on or before the date that is two business days following
receipt of your notice of conversion ("cash settlement notice period"). If we
timely elect to pay cash for any portion of the shares otherwise issuable to
you, you may retract the conversion notice at any time during the two business
day period beginning on the day after the final day of the cash settlement
notice period ("conversion retraction period"); no such retraction can be made
(and a conversion notice shall be irrevocable) if we do not elect to deliver
cash in lieu of shares (other than cash in lieu of fractional shares). If the
conversion notice has not been retracted, then settlement (in cash and/or
shares) will occur on the business day following the final day of the 5 trading
day period beginning on the day after the final day of the conversion retraction
period (the "cash settlement averaging period"). Settlement amounts will be
computed as follows:
- If we elect to satisfy the entire conversion obligation in shares, we
will deliver to you a number of shares equal to (i) the aggregate
principal amount at maturity of Debentures to be converted divided by
1,000, multiplied by (ii) the conversion rate.
- If we elect to satisfy the entire conversion obligation in cash, we will
deliver to you cash in an amount equal to the product of:
- a number equal to (i) the aggregate principal amount at maturity of
Debentures to be converted divided by 1,000, multiplied by (ii) the
conversion rate, and
- the average closing price of our common stock during the cash settlement
averaging period.
- If we elect to satisfy a fixed portion (other than 100%) of the
conversion obligation in cash, we will deliver to you such cash amount
("cash amount") and a number of shares equal to the greater of (i) zero
and (ii) the excess, if any, of the number of shares calculated as set
forth in the first bullet of this paragraph over the number of shares
equal to the sum, for each day of the cash settlement averaging period,
of (x) 20% of the cash amount, divided by (y) the closing price of our
common stock.
If you have exercised your right to require us to repurchase your
Debentures as described under "-- Repurchase of Debentures at the Option of
Holders," you may convert your Debentures as provided above only if you withdraw
your repurchase or change of control repurchase notice and convert your
17
Debentures prior to the close of business on the business day immediately
preceding the applicable repurchase date.
Conversion Upon Notice of Redemption or Maturity: If we choose to satisfy
all or any portion of the conversion obligation in cash, we will notify you
through the trustee of the dollar amount to be satisfied in cash (which must be
expressed either as 100% of the conversion obligation or as a fixed dollar
amount) at any time on or before the date that is 20 days prior to maturity or
redemption. Settlement amounts will be computed in the same manner as set forth
above under "Conversion Prior to Maturity" except that the "cash settlement
averaging period" shall be the 5 trading day period beginning on the day after
the maturity date or redemption date, as the case may be. Settlement (in cash
and/or shares) will occur on the business day following the final day of such
cash settlement averaging period.
CONVERSION PROCEDURES
By delivering to the holder the number of shares issuable upon conversion,
together with a cash payment in lieu of any fractional shares, we will satisfy
our obligation with respect to the Debentures. That is, accrued original issue
discount and any accrued and unpaid contingent cash interest will be deemed to
be paid in full rather than canceled, extinguished or forfeited. We will not
adjust the conversion rate to account for any accrued original issue discount or
accrued and unpaid contingent cash interest, if any.
You will not be required to pay any taxes or duties relating to the
issuance or delivery of our common stock if you exercise your conversion rights,
but you will be required to pay any tax or duty which may be payable relating to
any transfer involved in the issuance or delivery of the common stock in a name
other than your own. Certificates representing shares of common stock will be
issued or delivered only after all applicable taxes and duties, if any, payable
by you have been paid.
We and each holder of a Debenture also agree that delivery to the holder of
the full number of shares of common stock into which the Debenture is
convertible, together with any cash payment of such holder's fractional shares,
will be treated as a payment (in an amount equal to the sum of the then fair
market value of such shares and such cash payment, if any) on the Debenture for
purposes of the regulations governing contingent payment debt instruments. See
"United States Federal Income Tax Considerations."
To convert interests in a global Debenture, you must deliver to DTC the
appropriate instruction form for conversion pursuant to DTC's conversion
program.
To convert a definitive Debenture, you must:
- complete the conversion notice on the back of the Debentures (or a
facsimile thereof);
- deliver the completed conversion notice and the Debentures to be
converted to the specified office of the conversion agent; pay all funds
required, if any, relating to contingent cash interest on the Debentures
to be converted to which you are not entitled, as described in
"-- Contingent Cash Interest;" provided that if the cash settlement
notice period or, if we elect to pay all or a portion in cash, the cash
settlement averaging period, end on or subsequent to the payment date for
any contingent cash interest immediately following the date you deliver a
notice of conversion, we will refund all such funds to you upon delivery
of the shares of common stock or cash owed to you pursuant to your
conversion of Debentures; and
- pay all taxes or duties, if any, as described in the preceding paragraph.
The conversion date will be the date on which all of the foregoing
requirements have been satisfied and the cash settlement notice period and, if
we elect to pay all or a portion in cash, the cash settlement averaging period
have expired. The Debentures will be deemed to have been converted immediately
prior to the close of business on the conversion date. A certificate for the
number of shares of common stock into which the Debentures are converted (and
cash in lieu of any fractional shares) will be delivered to you as soon as
practicable on or after the conversion date.
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CONVERSION RATE ADJUSTMENTS
We will adjust the conversion rate if any of the following events occur:
(1) we issue common stock as a dividend or distribution on our common
stock;
(2) we issue to all holders of common stock certain rights or warrants
to purchase our common stock, entitling them to purchase or subscribe for
our common stock at less than the then-current market price of our common
stock;
(3) we subdivide or combine our common stock;
(4) we distribute to all holders of our common stock capital stock,
evidences of indebtedness or assets, including securities but excluding:
- rights or warrants listed in (2) above;
- dividends or distributions listed in (1) above; and
- cash distributions listed in (5) below;
(5) we distribute cash (an "extraordinary cash dividend"), excluding
any dividend or distribution in connection with our liquidation,
dissolution or winding up or any quarterly cash dividend on our common
stock to the extent that the aggregate cash dividend per share of common
stock in any quarter does not exceed the greater of:
- the amount per share of common stock of the next preceding quarterly
cash dividend on the common stock to the extent that the preceding
quarterly dividend did not require an adjustment of the conversion
rate pursuant to this clause (5), as adjusted to reflect subdivisions
or combinations of the common stock; and
- 3.75% of the average of the last reported sale price of the common
stock during the ten trading days immediately prior to the declaration
date of the dividend.
If an adjustment is required to be made under this clause (5) as a
result of a distribution that is a quarterly dividend, the adjustment would
be based upon the amount by which the distribution exceeds the amount of
the quarterly cash dividend permitted to be excluded pursuant to this
clause (5). If an adjustment is required to be made under this clause (5)
as a result of a distribution that is not a quarterly dividend, the
adjustment would be based upon the full amount of the distribution;
(6) we or one of our subsidiaries make a payment in respect of a
tender offer or exchange offer for our common stock to the extent that the
cash and value of any other consideration included in the payment per share
of common stock exceeds the current market price per share of common stock
on the trading day next succeeding the last date on which tenders or
exchanges may be made pursuant to such tender or exchange offer; and
(7) someone other than us or one of our subsidiaries makes a payment
in respect of a tender offer or exchange offer in which, as of the closing
date of the offer, our board of directors is not recommending rejection of
the offer. The adjustment referred to in this clause (7) will be made only
if:
- the tender offer or exchange offer is for an amount that increases the
offeror's ownership of common stock to more than 25% of the total
shares of common stock outstanding; and
- the cash and value of any other consideration included in the payment
per share of common stock exceeds the current market price per share
of common stock on the business day next succeeding the last date on
which tenders or exchanges may be made pursuant to the tender or
exchange offer.
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However, the adjustment referred to in this clause (7) will generally
not be made if, as of the closing of the offer, the offering documents
disclose a plan or an intention to cause us to engage in a consolidation or
merger or a sale of all or substantially all of our assets.
To the extent that we have a rights plan in effect upon conversion of the
Debentures into common stock, you will receive, in addition to the common stock,
the rights under the rights plan whether or not the rights have separated from
the common stock at the time of conversion, subject to limited exceptions.
In the event of:
- any reclassification of our common stock;
- a consolidation, merger, binding share exchange or combination involving
us; or
- a sale or conveyance to another person or entity of all or substantially
all of our property or assets;
in which holders of common stock would be entitled to receive stock, other
securities, other property, assets or cash for their common stock, upon
conversion of your Debentures you will be entitled to receive the same type of
consideration which you would have been entitled to receive if you had converted
the Debentures into our common stock immediately prior to any of these events.
You may in certain situations be deemed to have received a distribution
subject to United States federal income tax as a dividend in the event of any
taxable distribution to holders of common stock or in certain other situations
requiring a conversion rate adjustment. See "United States Federal Income Tax
Considerations."
To the extent permitted by law, we may, from time to time, increase the
conversion rate for a period of at least 20 days if our board of directors has
made a determination that this increase would be in our best interests. Any such
determination by our board will be conclusive. We would give holders at least 15
days notice of any increase in the conversion rate. In addition, we may increase
the conversion rate if our board of directors deems it advisable to avoid or
diminish any income tax to holders of common stock resulting from any stock
distribution.
We will not be required to make an adjustment in the conversion rate unless
the adjustment would require a change of at least one percent in the conversion
rate. However, we will carry forward any adjustments that are less than one
percent of the conversion rate. Except as described above in this section, we
will not adjust the conversion rate for any issuance of our common stock or
convertible or exchangeable securities or rights to purchase our common stock or
convertible or exchangeable securities.
PAYMENT AT MATURITY
Each holder of $1,000 original principal amount at maturity of the
Debentures will be entitled to receive $1,000 at maturity, plus accrued and
unpaid contingent cash interest, if any.
OPTIONAL REDEMPTION BY US
Prior to October 28, 2005, the Debentures will not be redeemable at our
option. Beginning on October 28, 2005, we may redeem the Debentures for cash at
any time as a whole, or from time to time in part, at a redemption price equal
to the issue price of the Debentures redeemed, plus accrued original issue
discount and accrued and unpaid contingent cash interest, if any, to the
redemption date.
We will give at least 30 days but not more than 60 days notice of
redemption by mail to holders of Debentures. Debentures or portions of
Debentures called for redemption will be convertible by the holder until the
close of business on the business day prior to the redemption date.
20
The table below shows redemption prices of the Debentures, exclusive of any
contingent cash interest, at October 28, 2005, at each following October 28
prior to maturity, and the price at maturity on October 28, 2022. The prices
reflect the issue price plus accrued original issue discount calculated through
each date.
The redemption price of a Debenture redeemed between these dates would
include additional original issue discount accrued from the immediately
preceding date in the table to the actual redemption date.
DEBENTURE ACCRUED
ORIGINAL ORIGINAL ISSUE REDEMPTION
REDEMPTION DATE ISSUE PRICE DISCOUNT PRICE
--------------- ----------- -------------- ----------
October 28, 2005.................................. $671.65 $ 41.32 $ 712.97
October 28, 2006.................................. $671.65 $ 55.65 $ 727.30
October 28, 2007.................................. $671.65 $ 70.27 $ 741.92
October 28, 2008.................................. $671.65 $ 85.19 $ 756.84
October 28, 2009.................................. $671.65 $100.40 $ 772.05
October 28, 2010.................................. $671.65 $115.92 $ 787.57
October 28, 2011.................................. $671.65 $131.75 $ 803.40
October 28, 2012.................................. $671.65 $147.89 $ 819.54
October 28, 2013.................................. $671.65 $164.37 $ 836.02
October 28, 2014.................................. $671.65 $181.17 $ 852.82
October 28, 2015.................................. $671.65 $198.31 $ 869.96
October 28, 2016.................................. $671.65 $215.80 $ 887.45
October 28, 2017.................................. $671.65 $233.64 $ 905.29
October 28, 2018.................................. $671.65 $251.83 $ 923.48
October 28, 2019.................................. $671.65 $270.40 $ 942.05
October 28, 2020.................................. $671.65 $289.33 $ 960.98
October 28, 2021.................................. $671.65 $308.65 $ 980.30
October 28, 2022 (maturing)....................... $671.65 $328.35 $1,000.00
If we do not redeem all of the Debentures, the trustee will select the
Debentures to be redeemed in principal amount at maturity of $1,000 or integral
multiples of $1,000 by lot or on a pro rata basis. If any Debentures are to be
redeemed in part only, we will issue a new Debenture or Debentures with a
principal amount at maturity equal to the unredeemed principal portion thereof.
If a portion of your Debentures is selected for partial redemption and you
convert a portion of your Debentures, the converted portion will be deemed to be
taken from the portion selected for redemption.
REPURCHASE OF DEBENTURES AT THE OPTION OF HOLDERS
OPTIONAL PUT
On October 28, 2005, 2007, 2012 and 2017, holders may require us to
repurchase any outstanding Debentures for which the holder has properly
delivered and not withdrawn a written repurchase notice, subject to certain
additional conditions, at a purchase price equal to the issue price of those
Debentures plus accrued original issue discount and contingent cash interest, if
any, to the repurchase date. The repurchase price of a Debenture, exclusive of
any contingent cash interest, as of each of the repurchase dates will be:
- $712.97 per Debenture on October 28, 2005;
- $741.92 per Debenture on October 28, 2007;
- $819.54 per Debenture on October 28, 2012; and
- $905.29 per Debenture on October 28, 2017.
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Holders may submit their Debentures for repurchase to the paying agent at
any time from the opening of business on the date that is 20 business days prior
to the repurchase date until the close of business on the third business day
prior to the repurchase date.
Instead of paying the purchase price in cash, we may pay the purchase price
in common stock, cash or a combination of common stock and cash, at our option.
The number of shares of common stock a holder will receive will equal the
relevant amount of the purchase price divided by 100% of the average of the sale
prices of our common stock for the five trading days immediately preceding and
including the third day prior to the repurchase date; provided that in no event
will we issue more than 30 million shares of our common stock, subject to the
same adjustments as set forth under "-- Conversion Rate Adjustments," and we
will satisfy any remainder of the purchase price in cash. However, we may not
pay the purchase price in common stock or a combination of common stock and cash
unless we satisfy certain conditions prior to the repurchase date as provided in
the indenture, including:
- registration of the shares of our common stock to be issued upon
repurchase under the Securities Act and the Exchange Act, if required;
- qualification of the shares of our common stock to be issued upon
repurchase under applicable state securities laws, if necessary, or the
availability of an exemption therefrom; and
- listing of our common stock on a United States national securities
exchange or quotation thereof in an inter-dealer quotation system of any
registered United States national securities association.
We will be required to give notice at least 30 business days prior to each
repurchase date to all holders at their addresses shown in the register of the
registrar and to beneficial owners as required by applicable law stating, among
other things, the procedures that holders must follow to require us to
repurchase their Debentures as described below and whether the purchase price
will be paid in cash or common stock, or a combination with a portion payable in
cash or common stock.
Because the sale price of our common stock will be determined prior to the
applicable repurchase date, holders of Debentures bear the market risk that our
common stock will decline in value between the date the sale price is calculated
and the repurchase date.
The repurchase notice given by each holder electing to require us to
repurchase Debentures must be given so as to be received by the paying agent no
later than the close of business on the third business day prior to the
repurchase date and must state:
- the certificate numbers of the holders' Debentures to be delivered for
repurchase;
- the portion of the principal amount at maturity of Debentures to be
repurchased, which must be $1,000 or an integral multiple of $1,000; and
- that the Debentures are to be repurchased by us pursuant to the
applicable provisions of the Debentures.
A holder may withdraw any repurchase notice by delivering a written notice
of withdrawal to the paying agent prior to the close of business on business day
immediately preceding the repurchase date. The notice of withdrawal must state:
- the principal amount at maturity of Debentures being withdrawn;
- the certificate numbers of the Debentures being withdrawn; and
- the principal amount at maturity, if any, of the Debentures that remain
subject to the repurchase notice.
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In connection with any repurchase, we will, to the extent applicable:
- comply with the provisions of Rule 13e-4, Rule 14e-1 and any other tender
offer rules under the Exchange Act which may then be applicable; and
- file Schedule TO or any other required schedule under the Exchange Act.
Our obligation to pay the purchase price for Debentures for which a
repurchase notice has been delivered and not validly withdrawn is conditioned
upon the holder delivering the Debentures, together with necessary endorsements,
to the paying agent at any time after delivery of the repurchase notice. We will
cause the purchase price for the Debentures to be paid promptly following the
later of the repurchase date or the time of delivery of the Debentures, together
with such endorsements.
If the paying agent holds money or common stock sufficient to pay the
purchase price of the Debentures for which a repurchase notice has been given on
the business day following the repurchase date in accordance with the terms of
the indenture, then, immediately after the repurchase date, the Debentures will
cease to be outstanding and original issue discount and contingent cash
interest, if any, on the Debentures will cease to accrue, whether or not the
Debentures are delivered to the paying agent. Thereafter, all other rights of
the holder shall terminate, other than the right to receive the purchase price
upon delivery of the Debentures.
Our ability to repurchase Debentures for cash may be limited by
restrictions on our ability to obtain funds for such repurchase through
dividends from our subsidiaries and the terms of our then existing borrowing
agreements.
CHANGE OF CONTROL PUT
If a change of control, as described below, occurs, you will have the right
(subject to certain exceptions set forth below) to require us to repurchase all
of your Debentures not previously called for redemption, or any portion of those
Debentures that is equal to $1,000 in principal amount at maturity or integral
multiples thereof, at a purchase price equal to the issue price of all
Debentures you require us to repurchase plus accrued original issue discount and
accrued and unpaid contingent cash interest, if any, on those Debentures to the
repurchase date. Notwithstanding the foregoing, we may be required to offer to
repurchase our other senior debt on a pro rata basis with the Debentures, upon a
change of control, if similar change of control offers are or will be required
by our other senior debt.
Instead of paying the purchase price in cash, we may pay the purchase price
in our common stock or, in the case of a merger in which we are not the
surviving corporation, common stock, ordinary shares or American Depositary
Shares of the surviving corporation or its direct or indirect parent
corporation, cash or a combination of the applicable securities and cash, at our
option; provided that in no event will we issue more than 30 million shares of
our common stock, subject to the same adjustments as set forth under
"-- Conversion Rate Adjustments", and we will satisfy any remainder of the
purchase price in cash. The number of shares of the applicable common stock or
securities a holder will receive will equal the relevant amount of the purchase
price divided by 100% of the average of the sale prices of the applicable common
stock or securities for the five trading days immediately preceding and
including the third day prior to the repurchase date. However, we may not pay
the purchase price in the applicable common stock or securities or a combination
of the applicable common stock or securities and cash, unless we satisfy certain
conditions prior to the repurchase date as provided in the indenture, including:
- registration of the shares of the applicable common stock or securities
to be issued upon repurchase under the Securities Act and the Exchange
Act, if required;
- qualification of the shares of the applicable common stock or securities
to be issued upon repurchase under applicable state securities laws, if
necessary, or the availability of an exemption therefrom; and
23
- listing of the applicable common stock or securities on a United States
national securities exchange or quotation thereof in an inter-dealer
quotation system of any registered United States national securities
association.
Within 30 days after the occurrence of a change of control, we are required
to give you notice of the occurrence of the change of control and of your
resulting repurchase right and whether the purchase price will be paid in cash,
the applicable common stock or securities, or a combination with a portion
payable in cash or the applicable common stock or securities. The repurchase
date will be 30 days after the date on which we give notice of a change of
control. To exercise the repurchase right, you must deliver, prior to the close
of business on the business day immediately preceding the repurchase date,
written notice to the paying agent of your exercise of your repurchase right,
together with the Debentures with respect to which your right is being
exercised. You may withdraw this notice by delivering to the paying agent a
notice of withdrawal prior to the close of business on the business day
immediately preceding the repurchase date.
Because the sale price of the applicable common stock or securities will be
determined prior to the applicable repurchase date, holders of Debentures bear
the market risk that the applicable common stock or securities will decline in
value between the date the sale price is calculated and the repurchase date.
A "change of control" will be deemed to have occurred at such time after
the original issuance of the Debentures when any of the following has occurred:
- the acquisition by any person, including any syndicate or group deemed to
be a "person" under Section 13(d)(3) of the Exchange Act of beneficial
ownership, directly or indirectly, through a purchase, merger or other
acquisition transaction or series of purchase, merger or other
acquisition transactions, of shares of our capital stock entitling that
person to exercise 50% or more of the total voting power of all shares of
our capital stock entitled to vote generally in elections of directors,
other than any acquisition by us, any of our subsidiaries or any of our
employee benefit plans (except that any of those persons shall be deemed
to have beneficial ownership of all securities it has the right to
acquire, whether the right is currently exercisable or is exercisable
only upon the occurrence of a subsequent condition); or
- the first day on which a majority of the members of our board of
directors are not continuing directors; or
- our consolidation or merger with or into any other person, any merger of
another person into us, or any conveyance, transfer, sale, lease or other
disposition of all or substantially all of our properties and assets to
another person, other than:
- any transaction:
(1) that does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of our capital stock; and
(2) pursuant to which holders of our capital stock immediately prior to
the transaction have the entitlement to exercise, directly or
indirectly, 50% or more of the total voting power of all shares of
capital stock entitled to vote generally in elections of directors of
the continuing or surviving person immediately after giving effect to
such issuance; and
- any merger, share exchange, transfer of assets or similar transaction
solely for the purpose of changing our jurisdiction of incorporation and
resulting in a reclassification, conversion or exchange of outstanding
shares of common stock, if at all, solely into shares of common stock,
ordinary shares or American Depositary Shares of the surviving entity or
a direct or indirect parent of the surviving corporation.
However, notwithstanding the foregoing, you will not have the right to
require us to repurchase your Debentures if 100% of the consideration in the
transaction or transactions (other than cash payments for fractional shares and
cash payments made in respect of dissenters' appraisal rights) constituting a
change of control consists of shares of common stock, ordinary shares or
American Depositary Shares traded or to
24
be traded immediately following a change of control on a national securities
exchange or the Nasdaq National Market, and, as a result of the transaction or
transactions, the Debentures become convertible into that common stock, ordinary
shares or American Depositary Shares (and any rights attached thereto).
Beneficial ownership shall be determined in accordance with Rule 13d-3
promulgated by the SEC under the Exchange Act. The term "person" includes any
syndicate or group that would be deemed to be a "person" under Section 13(d)(3)
of the Exchange Act.
Rule 13e-4 under the Exchange Act requires the dissemination of certain
information to securityholders if an issuer tender offer occurs and may apply if
the repurchase option becomes available to holders of the Debentures. We will
comply with this rule and file Schedule TO (or any similar schedule) to the
extent applicable at that time.
The definition of change of control includes a phrase relating to the
conveyance, transfer, sale, lease or disposition of "all or substantially all"
of our assets. There is no precise, established definition of the phrase
"substantially all" under applicable law. Accordingly, your ability to require
us to repurchase your debentures as a result of a conveyance, transfer, sale,
lease or other disposition of less than all our assets may be uncertain.
If the paying agent holds money or common stock sufficient to pay the
purchase price of the Debentures which holders have elected to require us to
repurchase on the business day following the repurchase date in accordance with
the terms of the indenture, then, immediately after the repurchase date, those
Debentures will cease to be outstanding and original issue discount and
contingent cash interest, if any, on the Debentures will cease to accrue,
whether or not the Debentures are delivered to the paying agent. Thereafter, all
other rights of the holder shall terminate, other than the right to receive the
purchase price upon delivery of the Debentures.
The foregoing provisions would not necessarily protect holders of the
Debentures if highly leveraged or other transactions involving us occur that may
affect holders adversely. We could, in the future, enter into certain
transactions, including certain recapitalizations, that would not constitute a
change of control with respect to the change of control purchase feature of the
Debentures but that would increase the amount of our or our subsidiaries'
outstanding indebtedness.
Our ability to repurchase Debentures for cash upon the occurrence of a
change of control is subject to important limitations. Our ability to repurchase
the Debentures for cash may be limited by restrictions on our ability to obtain
funds for such repurchase through dividends from our subsidiaries and the terms
of our then existing borrowing agreements. In addition, the occurrence of a
change of control could cause an event of default under, or be prohibited or
limited by the terms of, our other senior debt. We cannot assure you that we
would have the financial resources, or would be able to arrange financing, to
pay the purchase price in cash for all the Debentures that might be delivered by
holders of Debentures seeking to exercise the repurchase right.
The change of control purchase feature of the Debentures may in certain
circumstances make more difficult or discourage a takeover of our company. The
change of control purchase feature, however, is not the result of our knowledge
of any specific effort:
- to accumulate shares of our common stock;
- to obtain control of us by means of a merger, tender offer solicitation
or otherwise; or
- by management to adopt a series of anti-takeover provisions.
Instead, the change of control purchase feature is a standard term
contained in securities similar to the Debentures.
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MERGER AND SALES OF ASSETS
The indenture provides that we may not consolidate with or merge into any
other person or convey, transfer, sell, lease or otherwise dispose of all or
substantially all of its properties and assets to another person unless, among
other things:
- the resulting, surviving or transferee person is a corporation organized
and existing under the laws of the United States, any state thereof, the
District of Columbia;
- such corporation (if other than us) assumes all our obligations under the
Debentures and the indenture; and
- we are not, or such successor is not, then or immediately thereafter in
default under the indenture.
The occurrence of certain of the foregoing transactions could constitute a
change of control.
This covenant includes a phrase relating to the conveyance, transfer, sale,
lease or disposition of "all or substantially all" of our assets. There is no
precise, established definition of the phrase "substantially all" under
applicable law. Accordingly, there may be uncertainty as to whether a
conveyance, transfer, sale, lease or other disposition of less than all our
assets is subject to this covenant.
EVENTS OF DEFAULT
Each of the following constitutes an event of default under the indenture:
- default in our obligation to convert Debentures into shares of our common
stock upon exercise of a holder's conversion right;
- default in our obligation to repurchase Debentures at the option of
holders;
- default in our obligation to redeem Debentures after we have exercised
our redemption option;
- default in our obligation to pay the principal amount at maturity of the
Debentures at maturity, or the issue price and accrued original issue
discount on the Debentures when due and payable;
- default in our obligation to pay any contingent cash interest, if any,
when due and payable, and continuance of such default for a period of 30
days;
- our failure to perform or observe any other term, covenant or agreement
contained in the Debentures or the indenture for a period of 60 days
after written notice of such failure, provided that such notice requiring
us to remedy the same shall have been given to us by the trustee or to us
and the trustee by the holders of at least 25% in aggregate principal
amount at maturity of the Debentures then outstanding;
- a failure to pay when due at maturity or a default that results in the
acceleration of maturity of any indebtedness for borrowed money of
General Mills or our designated subsidiaries in an aggregate amount of
$50 million or more, unless the acceleration is rescinded, stayed or
annulled within 30 days after written notice of default is given to us by
the trustee or holders of not less than 25% in aggregate principal amount
at maturity of the Debentures then outstanding; and
- certain events of bankruptcy, insolvency or reorganization with respect
to us or any of our subsidiaries that is a designated subsidiary or any
group of two or more subsidiaries that, taken as a whole, would
constitute a designated subsidiary.
A "designated subsidiary" means any existing or future, direct or indirect,
subsidiary of General Mills whose assets constitute 15% or more of the total
assets of General Mills on a consolidated basis.
The indenture provides that the trustee will, within 90 days of the
occurrence of a default, give to the registered holders of the Debentures notice
of all uncured defaults known to it. The trustee may withhold such notice if it,
in good faith, determines that the withholding of such notice is in the best
interest of the registered holders, except in the case of a default under any of
the first five bullets above.
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If certain events of default specified in the last bullet point above have
occurred and are continuing, then automatically the issue price of the
Debentures plus accrued original issue discount and accrued and unpaid
contingent cash interest, if any, through such date will become immediately due
and payable. If any other event of default has occurred and is continuing (the
default not having been cured or waived as provided under "Modification and
Waiver" below), the trustee or the holders of at least 25% in aggregate
principal amount at maturity of the Debentures then outstanding may declare the
Debentures due and payable at their issue price plus accrued original issue
discount and accrued and unpaid contingent cash interest, if any, and thereupon
the trustee may, at its discretion, proceed to protect and enforce the rights of
the holders of Debentures by appropriate judicial proceedings. Such declaration
may be rescinded or annulled with the written consent of the holders of a
majority in aggregate principal amount at maturity of the Debentures then
outstanding upon the conditions provided in the indenture.
The indenture contains a provision entitling the trustee, subject to the
duty of the trustee during default to act with the required standard of care, to
be indemnified by the holders of Debentures before proceeding to exercise any
right or power under the indenture at the request of the holders. The indenture
provides that the holders of a majority in aggregate principal amount at
maturity of the Debentures then outstanding, through their written consent, may
direct the time, method and place of conducting any proceeding for any remedy
available to the trustee or exercising any trust or power conferred upon the
trustee.
We will be required to furnish annually to the trustee a statement as to
the fulfillment of our obligations under the indenture.
MODIFICATION AND WAIVER
CHANGES REQUIRING APPROVAL OF EACH AFFECTED HOLDER
The indenture (including the terms and conditions of the Debentures) cannot
be modified or amended without the written consent or the affirmative vote of
the holder of each Debenture affected by such change to:
- change the maturity of any Debenture or the payment date of any
installment of contingent cash interest payable on any Debentures;
- reduce the principal amount at maturity of, or any contingent cash
interest on, redemption price, purchase price or change of control
purchase price for, any Debenture;
- impair or adversely affect the conversion rights of any holder of
Debentures;
- reduce the value of our common stock to which reference is made in
determining whether an interest adjustment will be made on the
Debentures, or change the method by which this value is calculated;
- change the currency of payment of the Debentures or contingent cash
interest thereon;
- alter the manner of calculation or rate of accrual of contingent cash
interest on any Debenture or extend the time for payment of any such
amount;
- impair the right to institute suit for the enforcement of any payment on
or with respect to, or conversion of, any Debenture;
- modify our obligation to maintain an office or agency in New York City;
- except as otherwise permitted or contemplated by provisions concerning
corporate reorganizations, adversely affect the repurchase option of
holders or the conversion rights of holders of the Debentures;
- modify the redemption provisions of the indenture in a manner adverse to
the holders of Debentures;
27
- reduce the percentage in aggregate principal amount at maturity of
Debentures outstanding necessary to modify or amend the indenture or to
waive any past default; or
- reduce the percentage in aggregate principal amount at maturity of
Debentures outstanding required for any other waiver under the indenture.
CHANGES REQUIRING MAJORITY APPROVAL
The indenture (including the terms and conditions of the Debentures) may be
modified or amended, subject to the provisions described above, with the written
consent of the holders of at least a majority in aggregate principal amount at
maturity of the Debentures at the time outstanding.
CHANGES REQUIRING NO APPROVAL
The indenture (including the terms and conditions of the Debentures) may be
modified or amended by us and the trustee, without the consent of the holder of
any Debenture, for the purposes of, among other things:
- adding to our covenants for the benefit of the holders of Debentures;
- surrendering any right or power conferred upon us;
- adding additional dates on which you may require us to repurchase your
Debentures;
- providing for conversion rights of holders of Debentures if any
reclassification or change of our common stock or any consolidation,
merger or sale of all or substantially all of our assets occurs;
- providing for the assumption of our obligations to the holders of
Debentures in the case of a merger, consolidation, conveyance, transfer
or lease;
- increasing the conversion rate, provided that the increase will not
adversely affect the interests of the holders of Debentures;
- complying with the requirements of the SEC in order to effect or maintain
the qualification of the indenture under the Trust Indenture Act of 1939,
as amended;
- making any changes or modifications necessary in connection with the
registration of the Debentures under the Securities Act as contemplated
in the registration rights agreement; provided that the change or
modification does not, in the good faith opinion of our board of
directors and the trustee, adversely affect the interests of the holders
of Debentures in any material respect;
- curing any ambiguity or correcting or supplementing any defective
provision contained in the indenture; provided that the modification or
amendment does not, in the good faith opinion of our board of directors
and the trustee, adversely affect the interests of the holders of
Debentures in any material respect; or
- adding or modifying any other provisions with respect to matters or
questions arising under the indenture which we and the trustee may deem
necessary or desirable and which will not adversely affect the interests
of the holders of Debentures.
FORM, DENOMINATION AND REGISTRATION
Denomination and Registration. The Debentures will be issued in fully
registered form, without coupons, in denominations of $1,000 principal amount at
maturity and integral multiples of $1,000.
Global Debentures; Book-Entry Form. The Debentures are evidenced by global
Debentures deposited with the trustee as custodian for DTC, and registered in
the name of Cede & Co. as DTC's nominee.
Record ownership of the global Debentures may be transferred, in whole or
in part, only to another nominee of DTC or to a successor of DTC or its nominee,
except as set forth below. A holder may hold its interests in the global
Debentures directly through DTC if the holder is a participant in DTC, or
28
indirectly through organizations which are direct DTC participants if the holder
is not a participant in DTC. Transfers between direct DTC participants will be
effected in the ordinary way in accordance with DTC's rules and will be settled
in same-day funds. Holders may also beneficially own interests in the global
Debentures held by DTC through certain banks, brokers, dealers, trust companies
and other parties that clear through or maintain a custodial relationship with a
direct DTC participant, either directly or indirectly.
So long as Cede & Co., as nominee of DTC, is the registered owner of the
global Debentures, Cede & Co. for all purposes will be considered the sole
holder of the global Debentures. Except as provided below, owners of beneficial
interests in the global Debentures:
- will not be entitled to have certificates registered in their names;
- will not receive or be entitled to receive physical delivery of
certificates in definitive form; and
- will not be considered holders of the global Debentures.
The laws of some states require that certain persons take physical delivery
of securities in definitive form. Consequently, the ability of an owner of a
beneficial interest in a global security to transfer the beneficial interest in
the global security to such persons may be limited.
We will wire, through the facilities of the trustee, payments of principal,
issue price, accrued original issue discount and contingent cash interest on the
global Debentures to Cede & Co., the nominee of DTC, as the registered owner of
the global Debentures. None of us, the trustee and any paying agent will have
any responsibility or be liable for paying amounts due on the global Debentures
to owners of beneficial interests in the global Debentures.
It is DTC's current practice, upon receipt of any payment of principal,
issue price, accrued original issue discount and contingent cash interest on the
global Debentures, to credit participants' accounts on the payment date in
amounts proportionate to their respective beneficial interests in the Debentures
represented by the global Debentures, as shown on the records of DTC, unless DTC
believes that it will not receive payment on the payment date. Payments by DTC
participants to owners of beneficial interests in Debentures represented by the
global Debentures held through DTC participants will be the responsibility of
DTC participants, as is now the case with securities held for the accounts of
customers registered in "street name."
If you would like to convert your Debentures into common stock pursuant to
the terms of the Debentures, you should contact your broker or other direct or
indirect DTC participant to obtain information on procedures, including proper
forms and cut-off times, for submitting those requests.
Because DTC can only act on behalf of DTC participants, who in turn act on
behalf of indirect DTC participants and other banks, your ability to pledge your
interest in the Debentures represented by global Debentures to persons or
entities that do not participate in the DTC system, or otherwise take actions in
respect of such interest, may be affected by the lack of a physical certificate.
Neither we nor the trustee (nor any registrar, paying agent or conversion
agent under the indenture) will have any responsibility for the performance by
DTC or direct or indirect DTC participants of their obligations under the rules
and procedures governing their operations. DTC has advised us that it will take
any action permitted to be taken by a holder of Debentures, including, without
limitation, the presentation of Debentures for conversion as described below,
only at the direction of one or more direct DTC participants to whose account
with DTC interests in the global Debentures are credited and only for the
principal amount at maturity of the Debentures for which directions have been
given.
DTC has advised us as follows: DTC is a limited purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the Uniform
Commercial Code and a "clearing agency" registered pursuant to the provisions of
Section 17A of the Exchange Act, as amended. DTC was created to hold securities
for DTC participants and to facilitate the clearance and settlement of
securities transactions between DTC
29
participants through electronic book-entry changes to the accounts of its
participants, thereby eliminating the need for physical movement of
certificates. Participants include securities brokers and dealers, banks, trust
companies and clearing corporations and may include certain other organizations,
such as the initial purchasers of the Debentures. Certain DTC participants or
their representatives, together with other entities, own DTC. Indirect access to
the DTC system is available to others such as banks, brokers, dealers and trust
companies that clear through, or maintain a custodial relationship with, a
participant, either directly or indirectly.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the global Debentures among DTC participants, it is
under no obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. If DTC is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed by
us within 90 days, we will cause Debentures to be issued in definitive form in
exchange for the global Debentures. None of General Mills, the trustee or any of
their respective agents will have any responsibility for the performance by DTC
or direct or indirect DTC participants of their obligations under the rules and
procedures governing their operations, including maintaining, supervising or
reviewing the records relating to or payments made on account of beneficial
ownership interests in global Debentures.
According to DTC, the foregoing information with respect to DTC has been
provided to its participants and other members of the financial community for
information purposes only and is not intended to serve as a representation,
warranty or contract modification of any kind.
GOVERNING LAW
The indenture and the Debentures are governed by, and construed in
accordance with, the laws of the State of New York.
INFORMATION CONCERNING THE TRUSTEE
BNY Midwest Trust Company, as trustee under the indenture, has been
appointed by us as paying agent, conversion agent, calculation agent, registrar
and custodian with regard to the Debentures. Wells Fargo Bank Minnesota, N.A. is
the transfer agent and registrar for our common stock. The trustee or its
affiliates may from time to time in the future provide banking and other
services to us in exchange for a fee.
CALCULATIONS IN RESPECT OF DEBENTURES
We or our agents will be responsible for making all calculations called for
under the Debentures. These calculations include, but are not limited to,
determination of the market prices of the Debentures and of our common stock and
amounts of contingent cash interest payments, if any, on the Debentures. We or
our agents will make all these calculations in good faith and, absent manifest
error, our and their calculations will be final and binding on holders of
Debentures. We or our agents will provide a schedule of these calculations to
the trustee, and the trustee is entitled to conclusively rely upon the accuracy
of these calculations without independent verification.
30
DESCRIPTION OF CAPITAL STOCK
CAPITAL STOCK
The following description of certain terms of our capital stock does not
purport to be complete and is qualified in its entirety by reference to our
Restated Certificate of Incorporation incorporated herein by reference. See
"Where You Can Find More information About General Mills".
Our Restated Certificate of Incorporation currently authorizes the issuance
of one billion shares of our common stock, par value $0.10 per share, and five
million shares of Cumulative Preference Stock, without par value, issuable in
series (the "Preference Stock"). Our board of directors is authorized to approve
the issuance of one or more series of Preference Stock without further
authorization of our stockholders and to fix the number of shares, the
designations, the relative rights and the limitations of any such series.
No shares of Preference Stock are currently outstanding, but we have
reserved for issuance 2,000,000 shares of our Series B Participating Cumulative
Preference Stock (the "Series B Preference Shares") issuable upon exercise of
the preference share purchase rights described below. Our board, without
stockholder approval, could authorize the issuance of Preference Stock with
voting, conversion and other rights that could adversely affect the voting power
and other rights of holders of our common stock or other series of Preference
Stock or that could have the effect of delaying, deferring or preventing a
change in our control. A summary of the preference share purchase rights, which
are attached to and trade with the common stock, is set forth under "-- Series B
Preference Share Purchase Rights".
The holders of our common stock are entitled to receive dividends when and
as declared by our board of directors out of funds legally available therefor,
provided that if any shares of Preference Stock are at the time outstanding, the
payment of dividends on common stock or other distributions (including purchases
of common stock) may be subject to the declaration and payment of full
cumulative dividends, and the absence of arrearages in any mandatory sinking
fund, on outstanding shares of Preference Stock.
The holders of common stock are entitled to one vote for each share on all
matters voted on by stockholders, including election of directors.
The holders of common stock do not have any conversion, redemption or
preemptive rights. In the event of our dissolution, liquidation or winding up,
holders of our common stock are entitled to share ratably in any assets
remaining after the satisfaction in full of the prior rights of creditors,
including holders of our indebtedness, and the aggregate liquidation preference
of any Preference Stock then outstanding.
All outstanding shares of our common stock are fully paid and
nonassessable.
The transfer agent for our common stock is Wells Fargo Bank Minnesota,
N.A., 161 North Concord Exchange, P.O. Box 64854, St. Paul, Minnesota 55164. Our
stockholders may contact Wells Fargo by telephone toll-free at (800) 870-4763 or
through e-mail at stocktransfer@WellsFargo.com.
SERIES B PREFERENCE SHARE PURCHASE RIGHTS
On December 11, 1995, our board of directors declared a dividend of one
preference share purchase right (a "Right") for each outstanding share of our
common stock. The dividend was paid on February 1, 1996 to stockholders of
record on January 10, 1996 (the "Record Date"). The following description of the
Rights, issued pursuant to the Rights Agreement dated as of December 11, 1995
between us and Wells Fargo Bank Minnesota, N.A. (formerly known as Norwest Bank
Minnesota, N.A.) (the "Rights Agent"), gives effect to the two-for-one common
stock split paid on November 8, 1999 and separately describes Amendment No. 1 to
the Rights Agreement (the "First Amendment"), which was entered into as of July
16, 2000 between us and the Rights Agent in connection with the acquisition of
Pillsbury.
31
RIGHTS AGREEMENT
Each Right entitles the registered holder to purchase from us one
two-hundredth of a Series B Preference Share at a price of $120 per one
two-hundredth of a Series B Preference Share (the "Purchase Price"), subject to
adjustment.
Until the earlier to occur of (1) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired beneficial ownership of 20% or more of the outstanding
shares of our common stock or (2) 10 business days (or such later date as may be
determined by action of our board of directors prior to such time as any person
or group of affiliated persons becomes an Acquiring Person) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 20% or more of the outstanding shares of our
common stock (the earlier of such dates being called the "Distribution Date"),
the Rights will be evidenced, with respect to any of the common share
certificates outstanding as of the Record Date, by such common share certificate
with a copy of a Summary of Rights attached to the certificate.
The Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with and
only with the shares of our common stock. Until the Distribution Date (or
earlier redemption or expiration of the Rights), new common share certificates
issued after the Record Date upon transfer or new issuance of shares of our
common stock will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration of
the Rights), the surrender for transfer of any certificates for shares of our
common stock outstanding as of the Record Date, even without such notation or a
copy of the Summary of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the shares of our common stock
represented by such certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the shares of our common stock as of the close of business
on the Distribution Date and such separate Right Certificates alone will
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on February 1, 2006, unless that expiration date is extended or unless
the Rights are earlier redeemed or exchanged by us, in each case, as described
below.
The Purchase Price payable, and the number of Series B Preference Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (1) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Series B
Preference Shares, (2) upon the grant to holders of the Series B Preference
Shares of certain rights or warrants to subscribe for or purchase Series B
Preference Shares at a price, or securities convertible into Series B Preference
Shares with a conversion price, less than the then-current market price of the
Series B Preference Shares or (3) upon the distribution to holders of the Series
B Preference Shares of evidences of indebtedness or assets (excluding regular
periodic cash dividends paid out of earnings or retained earnings or dividends
payable in Series B Preference Shares) or of subscription rights or warrants
(other than those referred to above).
The number of outstanding Rights and the number of one two-hundredths of a
Series B Preference Share issuable upon exercise of each Right are also subject
to adjustment in the event of a stock split of the shares of common stock or a
stock dividend on the shares of common stock payable in common shares or
subdivisions, consolidations or combinations of the shares of common stock
occurring, in any such case, prior to the Distribution Date.
Series B Preference Shares purchasable upon exercise of the Rights will not
be redeemable. Each Series B Preference Share will be entitled to a minimum
preferential quarterly dividend payment of $10 per share but will be entitled to
an aggregate dividend of 200 times the dividend declared per share of common
stock. In the event of liquidation, the holders of the Series B Preference
Shares will be entitled
32
to a minimum preferential liquidation payment of $100 per share but will be
entitled to an aggregate payment of 200 times the payment made per common share.
Each Series B Preference Share will have 200 votes, voting together with the
shares of common stock. Finally, in the event of any merger, consolidation or
other transaction in which shares of common stock are exchanged, each Series B
Preference Share will be entitled to receive 200 times the amount received per
share of common stock. These rights are protected by customary antidilution
provisions.
Because of the nature of the Series B Preference Shares' dividend,
liquidation and voting rights, the value of the one two-hundredth interest in a
Series B Preference Share purchasable upon exercise of each Right should
approximate the value of one share of common stock.
In the event that we are acquired in a merger or other business combination
transaction or 50% or more of our consolidated assets or earning power are sold
after a person or group has become an Acquiring Person, proper provision will be
made so that each holder of a Right will thereafter have the right to receive,
upon the exercise thereof at the then current exercise price of the Right, that
number of shares of common stock of the acquiring company which at the time of
such transaction will have a market value of two times the exercise price of the
Right. In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, proper provision shall be made so that each holder
of a Right, other than Rights beneficially owned by the Acquiring Person (which
will thereafter be void), will thereafter have the right to receive upon
exercise that number of shares of common stock having a market value at the time
of such occurrence of two times the exercise price of the Right.
At any time after any person or group of affiliated or associated persons
becomes an Acquiring Person and prior to the acquisition by such person or group
of 50% or more of the outstanding shares of common stock, our Board of Directors
may exchange the Rights (other than Rights owned by such person or group which
will have become void), in whole or in part, at an exchange ratio of one share
of common stock, or one two-hundredth of a Series B Preference Share, per Right
(subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Series B Preference Shares will be issued
(other than fractions which are integral multiples of one two-hundredth of a
Series B Preference Share, which may, at our election, be evidenced by
depositary receipts) and in lieu thereof, an adjustment in cash will be made
based on the market price of the Series B Preference Shares on the last trading
day prior to the date of exercise.
At any time prior to the time any person or group of affiliated or
associated persons becomes an Acquiring Person, our board of directors may
redeem the Rights in whole, but not in part, at a price of $.005 per Right (the
"Redemption Price"). The redemption of the Rights may be made effective at such
time, on such basis and with such conditions as our board of directors in its
sole discretion may establish. Immediately upon any redemption of the Rights,
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by our board without the consent of
the holders of the Rights, including an amendment to lower certain thresholds
described above to not less than the greater of (1) the sum of .001% and the
largest percentage of the outstanding shares of common stock then known to us to
be beneficially owned by any person or group of affiliated or associated persons
and (2) 10%, except that from and after such time as any person or group of
affiliated or associated persons becomes an Acquiring Person, no such amendment
may adversely affect the interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of shares of our capital stock, including, without
limitation, the right to vote or to receive dividends.
FIRST AMENDMENT TO RIGHTS AGREEMENT
We amended the Rights Agreement (which was evidenced in writing by the
First Amendment) in connection with the merger agreement, providing, among other
things, that neither Diageo plc nor any members of the Diageo plc stockholder
group would become an Acquiring Person as a result of the acquisition of
Pillsbury or related transactions.
33
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
THIS SUMMARY OF UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS IS FOR
GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. THIS SECTION DOES NOT PURPORT TO
DEAL WITH ALL ASPECTS OF FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO YOUR
INVESTMENT IN THE DEBENTURES. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR REGARDING
THE APPLICATION OF UNITED STATES FEDERAL INCOME TAX LAWS TO YOUR PARTICULAR
SITUATION AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER THE UNITED STATES
FEDERAL ESTATE OR GIFT TAX RULES OR UNDER THE LAWS OF ANY STATE, LOCAL, FOREIGN
OR OTHER TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.
The following discussion is a summary of the material U.S. federal income
tax consequences of the purchase, ownership and disposition of the Debentures
that are being offered pursuant to this prospectus. It is based on the opinion
of Siri S. Marshall, General Counsel of General Mills. This summary applies to
you only if you hold your Debenture as a capital asset for U.S. federal income
tax purposes. This summary does not apply to you if you are a member of a class
of holders subject to special tax rules, such as:
- a dealer in securities or currencies;
- a trader in securities that elects to use a mark-to-market method of
accounting for its securities holdings;
- a bank or other financial institution;
- an insurance company;
- a tax-exempt organization;
- a partnership or other pass-through entity;
- a person that owns Debentures that are a hedge or that are hedged against
interest rate risks;
- a person that owns Debentures as part of a straddle or conversion
transaction for U.S. federal income tax purposes; or
- a U.S. Holder (as defined below) whose functional currency for tax
purposes is not the U.S. dollar.
This summary is based on the Internal Revenue Code of 1986, as amended (the
"Code"), its legislative history, existing and proposed Treasury regulations,
published rulings of the Internal Revenue Service ("IRS") and court decisions,
all as currently in effect. These laws are subject to change, possibly on a
retroactive basis, and to differing interpretations. No statutory,
administrative or judicial authority directly addresses the treatment of
instruments identical to the Debentures for U.S. federal income tax purposes. We
have not requested, nor do we plan to request, any rulings from the IRS with
respect to any of the U.S. federal income tax consequences discussed below.
Accordingly, we can give no assurance that the IRS will not take positions
contrary to those described below.
We urge prospective investors in the Debentures to consult their own tax
advisors with respect to the tax consequences to them of the purchase, ownership
and disposition of the Debentures and the common stock in light of their own
particular circumstances, including the tax consequences under state, local,
foreign and other tax laws and the possible effects of changes in U.S. federal
income or other tax laws.
CLASSIFICATION OF THE DEBENTURES
Pursuant to the terms of the indenture, we and each holder of a Debenture
agree, for U.S. federal income tax purposes (in the absence of an administrative
determination or judicial ruling to the contrary), to treat the Debentures as
indebtedness that is subject to the regulations governing contingent payment
debt instruments. The remainder of this discussion assumes that the Debentures
will be treated accordingly.
We can give no assurance that the IRS will not assert that the Debentures
should be treated in a different manner. Such an alternative characterization
could affect the amount, timing and character of income, gain or loss in respect
of an investment in the Debentures.
34
TAX CONSEQUENCES TO UNITED STATES HOLDERS
This section applies to U.S. Holders. You are a U.S. Holder if you are a
beneficial owner of a Debenture and you are:
- an individual who is a citizen or resident of the U.S.;
- a corporation (or any entity treated as a corporation for U.S. federal
income tax purposes) organized under the laws of the U.S. or any
political subdivision thereof;
- an estate if its income is subject to U.S. federal income tax regardless
of its source; or
- a trust if a U.S. court can exercise primary supervision over the trust's
administration and one or more U.S. persons are authorized to control all
substantial decisions of the trust.
A beneficial owner of a Debenture that is a Non-U.S. Holder (as defined in
"Tax Consequences to Non-U.S. Holders" below) should refer to "Tax Consequences
to Non-U.S. Holders" below.
INTEREST ACCRUALS ON THE DEBENTURES
Under the rules governing contingent payment debt instruments, you will be
required to accrue interest income on the Debentures in the amounts described
below, regardless of whether you use the cash or accrual method of tax
accounting. Accordingly, you will generally be required to include interest in
taxable income in each year despite the fact that no interest may actually be
paid on the Debentures.
You must accrue an amount of ordinary interest income, as original issue
discount for U.S. federal income tax purposes, for each accrual period prior to
and including the maturity date of a Debenture that equals:
- the product of (i) the adjusted issue price (as defined below) of the
Debenture as of the beginning of the accrual period, and (ii) the
comparable yield to maturity (as defined below) of the Debenture,
adjusted for the length of the accrual period;
- divided by the number of days in the accrual period; and
- multiplied by the number of days during the accrual period that you held
the Debenture.
The issue price of a Debenture is the first price at which a substantial
amount of the Debentures is sold to the public, excluding sales to bond houses,
brokers or similar persons or organizations acting in the capacity of
underwriters, placement agents or wholesalers. The adjusted issue price of a
Debenture is its issue price increased by any interest income previously
accrued, determined without regard to any adjustments to interest accruals
described below, and decreased by the projected amounts of any payments that
were scheduled to have been made in accordance with our schedule of projected
payments, as described below (whether or not such payments were actually made in
the scheduled amounts).
The term "comparable yield," as defined in the regulations dealing with
contingent payment debt instruments, means the annual yield that we would pay,
as of the initial issue date, on a fixed rate nonconvertible debt security with
no contingent payments, but with terms and conditions otherwise comparable to
those of the Debentures (including the amount of discount, if any). We have
determined that the comparable yield for the Debentures is 6.73%, compounded
semiannually, which is higher than the stated yield of the Debentures.
We are required to provide to you, solely for U.S. federal income tax
purposes, a schedule of the projected amounts of payments on the Debentures.
This projected payment schedule must produce the comparable yield. The projected
payment schedule includes estimates for payments of contingent interest and an
estimate for a payment at maturity taking into account the conversion feature.
You may obtain a copy of the projected payment schedule from General Mills by
submitting a written request for such information to: General Mills, Number One
General Mills Boulevard, Minneapolis, Minnesota 55426, Attention: Treasurer.
35
For U.S. federal income tax purposes, you must use the comparable yield and
projected payment schedule in determining your interest accruals, and the
adjustments to interest accruals described below, with respect to the
Debentures, unless you timely disclose and justify the use of other estimates to
the IRS. If you determine your own comparable yield or projected payment
schedule, you must also establish that our comparable yield or projected payment
schedule is unreasonable. You should consult your own tax advisor if you intend
to use a comparable yield or projected payment schedule different from our
comparable yield or projected payment schedule.
THE COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE ARE NOT DETERMINED FOR
ANY PURPOSE OTHER THAN FOR THE DETERMINATION OF YOUR INTEREST ACCRUALS AND
ADJUSTMENTS TO INTEREST ACCRUALS WITH RESPECT TO THE DEBENTURES FOR U.S. FEDERAL
INCOME TAX PURPOSES. THE COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE DO NOT
CONSTITUTE A PROJECTION OR REPRESENTATION REGARDING THE ACTUAL AMOUNTS PAYABLE
TO HOLDERS OF THE DEBENTURES.
ADJUSTMENTS TO INTEREST ACCRUALS ON THE DEBENTURES
If you receive actual payments with respect to a Debenture in a taxable
year that in the aggregate exceed the total amount of the projected payments for
that taxable year, you will incur a "net positive adjustment" equal to the
amount of this excess. You will be required to treat the net positive adjustment
as additional interest income for the taxable year. For this purpose, the
payments received in a taxable year include the fair market value of property
(including our common stock) received with respect to a Debenture in that year.
If you receive actual payments with respect to a Debenture in a taxable
year that in the aggregate are less than the amount of the projected payments
for that taxable year, you will incur a "net negative adjustment" equal to the
amount of the deficit. This adjustment will:
(a) reduce your interest income on the Debentures for that taxable
year;
(b) to the extent of any excess after the application of (a), give
rise to an ordinary loss to the extent of your interest income on the
Debenture during prior taxable years, reduced to the extent that interest
income was offset by prior net negative adjustments; and
(c) to the extent of any further excess, reduce interest income in
respect of the Debentures in subsequent taxable years, and to the extent
not so applied, reduce the amount realized on a sale, exchange or
retirement of the Debentures.
SALE, EXCHANGE, CONVERSION OR REDEMPTION OF THE DEBENTURES
Generally, the sale, exchange or conversion of a Debenture, or the
redemption of a Debenture for cash, will result in taxable gain or loss to you.
As described above, our calculation of the comparable yield and the
projected payment schedule for the Debentures includes the receipt of stock upon
conversion as a contingent payment with respect to the Debentures. Accordingly,
we intend to treat your receipt of our common stock upon the conversion or
redemption of a Debenture where we elect to pay in common stock as a contingent
payment. As described above, you are generally bound by our determination of the
comparable yield and schedule of projected payments. Under this treatment, a
conversion or redemption of a Debenture where we elect to pay in common stock
will also result in taxable gain or loss to you.
The amount of gain or loss on a taxable sale, exchange, conversion or
redemption will be equal to the difference between:
(a) the amount of cash plus the fair market value of any other
property received by you, including the fair market value of any common
stock received; and
(b) your adjusted tax basis in the Debenture. Your adjusted tax basis
in a Debenture generally will be equal to your original purchase price for
the Debenture, increased by any interest income
36
previously accrued by you (determined without regard to any adjustments to
interest accruals described above) and decreased by the amount of any
projected payments previously scheduled to be made on the Debenture to you
(without regard to the actual amount paid).
Gain recognized upon a sale, exchange, conversion or redemption of a
Debenture will generally be treated as ordinary interest income; any loss will
be ordinary loss to the extent of the excess of interest previously included in
income over the total negative adjustments previously taken into account as
ordinary loss, and thereafter, capital loss (which will be long-term if the
Debenture is held for more than one year). The deductibility of net capital
losses by individuals and corporations is subject to limitations.
Your tax basis in our common stock received upon a conversion or a
redemption of a Debenture where we elect to pay in common stock will equal the
then current fair market value of such common stock. Your holding period for the
common stock received will commence on the day immediately following the date of
conversion or repurchase of a Debenture.
CONSTRUCTIVE DIVIDENDS
If at any time we make a distribution of property to our stockholders that
would be taxable to the stockholders as a dividend for U.S. federal income tax
purposes and, in accordance with the anti-dilution provisions of the Debentures,
the conversion rate of the Debentures is increased, this increase may be deemed
to be the payment of a taxable dividend to you in certain circumstances.
For example, an increase in the conversion rate in the event of
distribution of our evidences of indebtedness or our assets or an increase in
the event of an extraordinary cash dividend will generally result in deemed
dividend treatment to you. However, in general, an increase in the conversion
rate in the event of stock dividends or the distribution of rights to subscribe
for common stock will not be so treated.
TAX CONSEQUENCES TO NON-U.S. HOLDERS
This section describes the U.S. federal income tax consequences of the
purchase, ownership and disposition of Debentures by a Non-U.S. Holder. You are
a Non-U.S. Holder if you are the beneficial owner of a Debenture and are not a
U.S. Holder as defined above. If you are a U.S. Holder, this section does not
apply to you.
PAYMENTS MADE WITH RESPECT TO THE DEBENTURES
We intend to treat payments of contingent interest made to a Non-U.S.
Holder as subject to U.S. federal withholding tax if the amount of such
contingent interest is based on the amount of dividends paid on our common
stock. Non-U.S. Holders will accordingly be subject to 30% withholding on
payments of such contingent interest, subject to reduction by an applicable
treaty or upon receipt by us of an IRS Form W-8ECI from a Non-U.S. Holder
claiming that the payments are effectively connected with the conduct of a U.S.
trade or business. If you are a Non-U.S. Holder that is subject to this
withholding tax you should consult your own tax advisor regarding whether you
can obtain a refund for all or a portion of the withholding tax.
Payments on the Debentures other than payments of contingent interest based
on dividends on our common stock, including contingent cash interest, a payment
in our actively traded common stock upon conversion or redemption of the
Debentures and any gain realized on a sale or exchange of a Debenture (other
than gain attributable to accrued contingent interest based on dividends on our
common stock), will not generally be subject to U.S. federal income or
withholding tax, provided that:
(a) you do not actually or constructively own 10% or more of the total
combined voting power of all classes of our stock entitled to vote;
(b) you are not a controlled foreign corporation that is related to us
through stock ownership; and
37
(c) we or another U.S. payor does not have actual knowledge or reason
to know that you are a U.S. person and you fulfill IRS certification
requirements.
The certification requirements referred to in item (c) above will generally
be fulfilled if we or another U.S. payor receive from you an IRS Form W-8BEN
upon which you certify, under penalties of perjury, that you are not a U.S.
person, if we or another U.S. payor receive from an appropriate intermediary a
completed IRS Form W-8IMY, or if we or another U.S. payor receive other
appropriate certification from certain types of financial institutions that hold
customers' securities in the ordinary course of their trade or business.
Payments on the Debentures that are "effectively connected" with your
conduct of a trade or business within the U.S. (and, if required by an
applicable tax treaty, that are attributable to a permanent establishment that
you maintain in the U.S.) will not generally be subject to U.S. federal
withholding tax, provided that you have furnished to us or another payor a valid
IRS Form W-8ECI upon which you represent, under penalties of perjury, that:
(a) you are not a U.S. person; and
(b) the payments are effectively connected with your conduct of a
trade or business within the U.S. and includible in your gross income.
"Effectively connected" interest and gains will generally be taxed in the
same manner as described above under "Tax Consequences to United States
Holders." In addition, a Non-U.S. Holder that is a corporation may be subject to
a branch profits tax equal to 30% (or a lower applicable tax treaty rate) of its
effectively connected earnings and profits, subject to certain adjustments.
CONSTRUCTIVE DIVIDENDS
The conversion rate of the Debentures is subject to adjustment in certain
circumstances, which could give rise to a deemed distribution to Non-U.S.
Holders of the Debentures, as described above in "Tax Consequences to United
States Holders -- Constructive Dividends." In that event, the deemed
distribution would constitute a dividend for U.S. federal income tax purposes to
the extent of our current or accumulated earnings and profits. Any such
dividends will generally be subject to U.S. withholding tax at a 30% rate,
subject to reduction by an applicable treaty or upon receipt of a Form W-8ECI
from a Non-U.S. Holder claiming that the deemed dividends are effectively
connected with the conduct of a U.S. trade or business. If you are a Non-U.S.
Holder that is subject to this withholding tax you should consult your own tax
advisor regarding whether you may be able to obtain a refund for all or a
portion of the withholding tax.
BACKUP WITHHOLDING AND INFORMATION REPORTING
U.S. HOLDERS
In general, if you are a noncorporate U.S. Holder, we and other payors are
required to report to the IRS all payments of principal and interest on and any
constructive distribution with respect to your Debenture, including amounts
accruing under the rules for contingent payment debt instruments as described
above. In addition, we and other payors are required to report to the IRS any
payment of proceeds of the sale of your Debentures before maturity within the
U.S. Backup withholding will apply to any payments if you fail to provide us or
another U.S. payor with an accurate taxpayer identification number, or you are
notified by the IRS that you have failed to report all interest and dividends
required to be shown on your federal income tax returns.
The amount of any backup withholding from a payment to you will be allowed
as a credit against your U.S. federal income tax liability and may entitle you
to a refund, provided that you have furnished the required information to the
IRS.
38
NON-U.S. HOLDERS
If you are a Non-U.S. Holder, we and other payors may be required to file
information returns with the IRS in connection with payments on the Debentures
and payments of the proceeds from a sale or other disposition of the Debentures.
A Non-U.S. Holder may be subject to U.S. backup withholding tax on these
payments unless the Non-U.S. Holder complies with certification procedures to
establish that it is not a U.S. person. The certification procedures required to
claim an exemption from withholding tax on payments on the Debentures described
above under "Tax Consequences to Non-U.S. Holders -- Payments Made With Respect
to the Debentures" will generally satisfy the certification requirements
necessary to avoid the backup withholding tax as well.
The amount of any backup withholding from a payment to you will be allowed
as a credit against your U.S. federal income tax liability and may entitle you
to a refund, provided that you have furnished the required information to the
IRS.
STATE AND OTHER TAX CONSIDERATIONS
In addition to the United States federal income tax consequences described
in "United States Federal Income Tax Considerations," above, potential investors
should consider the state, local and foreign tax consequences of acquiring,
owning and disposing of the Debentures. State, local and foreign tax laws may
differ substantially from the corresponding United States federal law, and the
discussion above does not purport to describe any aspect of the tax laws of any
state or other jurisdiction. Therefore, prospective investors should consult
their own tax advisors with respect to the various tax consequences of
investments in the Debentures.
39
SELLING SECURITYHOLDERS
The Debentures were originally issued to and resold by Banc of America
Securities LLC, Morgan Stanley & Co. Incorporated, Barclays Bank PLC, Deutsche
Bank Securities Inc., J.P. Morgan Securities Inc., Salomon Smith Barney Inc.,
UBS Warburg LLC, Blaylock & Partners, L.P. and The Williams Capital Group, L.P.
in transactions exempt from the registration requirements of the Securities Act
to persons reasonably believed by them to be "qualified institutional buyers,"
as defined by Rule 144A under the Securities Act. The selling securityholders
may from time to time offer and sell pursuant to this prospectus any or all of
the Debentures and the common stock into which the Debentures are convertible.
When we refer to the "selling securityholders" in this prospectus, we mean those
persons listed in the table below, as well as their transferees, pledgees,
donees or successors.
The tables below sets forth the name of each selling securityholder, the
principal amount of Debentures at maturity that each selling securityholder may
offer pursuant to this prospectus and the number of shares of common stock into
which the Debentures are convertible. Unless set forth below, none of the
selling securityholders has had within the past three years any material
relationship with us or any of our predecessors on affiliates.
We have prepared the table based on information given to us by the selling
securityholders on or before January 22, 2003. Because the selling
securityholders may offer, pursuant to this prospectus, all or some portion of
the Debentures or common stock listed below, no estimate can be given as to the
amount of Debentures or common stock that will be held by the selling
securityholders upon consummation of any sales. In addition, the selling
securityholders listed in the table may have sold or transferred, in
transactions exempt from the registration requirements of the Securities Act,
some or all of their Debentures since the date as of which the information in
the table is presented.
Information about the selling securityholders may change over time. Any
changed information will be set forth in prospectus supplements if and when
necessary.
AGGREGATE NUMBER OF
PRINCIPAL AMOUNT SHARES OF
AT MATURITY OF PERCENTAGE OF COMMON STOCK PERCENTAGE OF
DEBENTURES THAT DEBENTURES THAT MAY COMMON STOCK
NAME MAY BE SOLD OUTSTANDING BE SOLD(1) OUTSTANDING(2)
---- ---------------- ------------- ------------ --------------
Abritex Master Fund L.P. ............. 24,000,000 1.07% 312,622 *
AIG DKR SoundShore Holdings Ltd. ..... 10,126,000 * 131,900 *
AIG DKR SoundShore Opportunity Holding
Fund Ltd. .......................... 11,521,000 * 150,071 *
AIG DKR SoundShore Strategic Holding
Fund Ltd. .......................... 4,954,000 * 64,530 *
AIG/National Union Fire Insurance..... 800,000 * 10,421 *
Akela Capital Master Fund, Ltd. ...... 7,500,000 * 97,694 *
Aloha Airlines Non-Pilots Pension
Trust............................... 230,000 * 2,996 *
Aloha Pilots Retirement Trust......... 125,000 * 1,628 *
Alpha U.S. Sub Fund VIII, LLC......... 1,650,000 * 21,493 *
AM Investment D Fund, Ltd. ........... 6,330,000 * 82,454 *
AM Investment E Fund, Ltd. ........... 34,288,000 1.54% 446,632 *
American Fidelity Assurance Company... 1,150,000 * 14,980 *
Amerisure Mutual Insurance............ 770,000 * 10,030 *
Argent LowLev Convertible Fund LLC.... 500,000 * 6,513 *
Aristeia International Limited........ 11,700,000 * 152,403 *
Aristeia Trading LLC.................. 3,300,000 * 42,985 *
Arkansas PERS......................... 2,550,000 * 33,216 *
Attorneys Title Insurance Fund........ 150,000 * 1,954 *
Aventis Pension Master Trust.......... 500,000 * 6,513 *
40
AGGREGATE NUMBER OF
PRINCIPAL AMOUNT SHARES OF
AT MATURITY OF PERCENTAGE OF COMMON STOCK PERCENTAGE OF
DEBENTURES THAT DEBENTURES THAT MAY COMMON STOCK
NAME MAY BE SOLD OUTSTANDING BE SOLD(1) OUTSTANDING(2)
---- ---------------- ------------- ------------ --------------
B.G.I. Global Investors c/o Forest
Investment Mgmt. LLC................ 375,000 * 4,885 *
Banc of American Securities LLC....... 31,420,000 1.41% 409,274 *
Bancroft Convertible Fund, Inc. ...... 2,900,000 * 37,775 *
Bank Austria Cayman Islands, Ltd. .... 6,250,000 * 81,412 *
Bay County PERS....................... 425,000 * 5,536 *
Black Diamond Convertible Offshore
LDC................................. 5,440,000 * 70,861 *
Black Diamond Offshore Ltd. .......... 2,734,000 * 35,613 *
Blue Cross Blue Shield of Delaware,
Inc. ............................... 330,000 * 4,299 *
BNP Paribas Equity Strategies, SNC.... 10,692,000 * 139,273 *
Boilermaker -- Blacksmith Pension
Trust (Calamos Investments)......... 2,750,000 * 35,821 *
Boilermakers Blacksmith Pension Trust
(Froley, Revy Investment Co.)....... 3,200,000 * 41,683 *
C & H Sugar Company Inc. ............. 290,000 * 3,778 *
CALAMOS Convertible Fund -- CALAMOS
Investment Trust.................... 21,800,000 * 283,965 *
CALAMOS Convertible Growth and Income
Fund -- CALAMOS Investment Trust.... 20,000,000 * 260,518 *
CALAMOS Convertible Portfolio --
CALAMOS Advisors Trust.............. 340,000 * 4,429 *
CALAMOS Global Convertible Fund --
CALAMOS Investment Trust............ 900,000 * 11,723 *
Canyon Capital Arbitrage Master Fund,
Ltd. ............................... 7,500,000 * 97,694 *
Canyon Value Realization Fund
(Cayman), Ltd. ..................... 11,250,000 * 146,541 *
Canyon Value Realization Fund, LP..... 5,000,000 * 65,130 *
Canyon Value Realization MAC 18,
Ltd. ............................... 1,250,000 * 16,282 *
CareFirst BlueChoice, Inc. ........... 175,000 * 2,280 *
CareFirst of Maryland, Inc. .......... 475,000 * 6,187 *
Chrysler Corporation Master Retirement
Trust............................... 8,790,000 * 114,498 *
City of Albany Pension Plan........... 290,000 * 3,778 *
City of Birmingham Retirement and
Relief System....................... 1,900,000 * 24,749 *
City of Knoxville Pension System...... 400,000 * 5,210 *
Clinton Multistrategy Master Fund
Ltd. ............................... 14,000,000 * 182,363 *
Clinton Riverside Portfolio Ltd. ..... 14,500,000 * 188,876 *
Cooper Neff Convertible Strategies
(Cayman) Master Fund, L.P. ......... 5,922,000 * 77,139 *
Credit Suisse First Boston............ 9,500,000 * 123,746 *
CreditSuisse First Boston Europe
Ltd. ............................... 120,000,000 5.37% 1,563,108 *
Deephaven Domestic Convertible Trading
Ltd. ............................... 68,000,000 3.04% 885,761 *
Delta Air Lines Master Trust c/o
Oaktree Capital Mgmt, LLC........... 2,060,000 * 26,833 *
41
AGGREGATE NUMBER OF
PRINCIPAL AMOUNT SHARES OF
AT MATURITY OF PERCENTAGE OF COMMON STOCK PERCENTAGE OF
DEBENTURES THAT DEBENTURES THAT MAY COMMON STOCK
NAME MAY BE SOLD OUTSTANDING BE SOLD(1) OUTSTANDING(2)
---- ---------------- ------------- ------------ --------------
Delta Airlines Master Trust (Calamos
Investments)........................ 1,585,000 * 20,646 *
Delta Airlines Master Trust (Froley,
Revy Investment Co.)................ 3,000,000 * 39,078 *
Delta Pilots D & S Trust (c/o Oaktree
Capital Mgmt, LLC).................. 1,210,000 * 15,761 *
Delta Pilots Disability and
Survivorship Trust.................. 850,000 * 11,072 *
Dorinco Reinsurance Company........... 1,100,000 * 14,328 *
Double Black Diamond Offshore LDC..... 13,593,000 * 177,061 *
Drury University (Calamos
Investments)........................ 80,000 * 1,042 *
Drury University (Froley, Revy
Investment Co.)..................... 58,000 * 756 *
Duke Endowment........................ 635,000 * 8,271 *
Ellsworth Convertible Growth and
Income Fund, Inc. .................. 2,900,000 * 37,775 *
F.R. Convt. Sec. Fn................... 400,000 * 5,210 *
Forest Fulcrum Fund LLP............... 747,000 * 9,730 *
Forest Global Convertible Fund Series
A-S................................. 273,000 * 3,556 *
Forest Multi-Strategy Master Fund SPC,
on behalf of Series F, Multi-St
Segregated Portfolio................ 309,000 * 4,025 *
FreeState Health Plan, Inc. .......... 125,000 * 1,628 *
Gaia Offshore Master Fund Ltd. ....... 12,250,000 * 159,567 *
Genesee County Employees' Retirement
System.............................. 750,000 * 9,769 *
Goldman Sachs & Company............... 3,255,000 * 42,399 *
Grace Brothers Management LLC......... 6,000,000 * 78,155 *
Greek Catholic Union of the USA....... 110,000 * 1,433 *
Group Hospitalization and Medical
Services, Inc. ..................... 525,000 * 6,839 *
Hawaiian Airlines Employees Pension
Plan-IAM............................ 95,000 * 1,237 *
Hawaiian Airlines Pension Plan for
Salaried Employees.................. 15,000 * 195 *
Hawaiian Airlines Pilots Retirement
Plan................................ 210,000 * 2,735 *
HealthNow New York, Inc. ............. 325,000 * 4,233 *
Highbridge International LLC.......... 253,000,000 11.33% 3,295,553 *
Hillboom Foundation................... 95,000 * 1,237 *
Innovest Finanzdienstle............... 1,500,000 * 19,539 *
Jackson County Employees' Retirement
System.............................. 225,000 * 2,931 *
KBC Financial Products (Cayman
Islands) Ltd. ...................... 54,000,000 2.42% 703,399 *
KBC Financial Products USA, Inc. ..... 17,050,000 * 222,092 *
Kettering Medical Center Funded
Depreciation Account................ 155,000 * 2,019 *
Knoxville Utilities Board Retirement
System.............................. 260,000 * 3,387 *
42
AGGREGATE NUMBER OF
PRINCIPAL AMOUNT SHARES OF
AT MATURITY OF PERCENTAGE OF COMMON STOCK PERCENTAGE OF
DEBENTURES THAT DEBENTURES THAT MAY COMMON STOCK
NAME MAY BE SOLD OUTSTANDING BE SOLD(1) OUTSTANDING(2)
---- ---------------- ------------- ------------ --------------
LLT Limited........................... 479,000 * 6,239 *
Louisiana CCRF........................ 625,000 * 8,141 *
Louisiana Workers Compensation #2..... 210,000 * 2,735 *
Louisiana Workers' Compensation
Corporation......................... 700,000 * 9,118 *
Lyxor Master Fund c/o Forest
Investment Mgmt. LLC................ 1,437,000 * 18,718 *
LYXOR/AM Investment Fund, Ltd. ....... 5,275,000 * 68,712 *
Macomb County Employees' Retirement
System.............................. 400,000 * 5,210 *
McMahan Securities Co. L.P. .......... 2,500,000 * 32,565 *
Microsoft Corporation................. 3,325,000 * 43,311 *
MLQA Convertible Securities Arbitrage,
Ltd. ............................... 10,000,000 * 130,259 *
Motion Picture Industry Health Plan --
Active Member Fund.................. 605,000 * 7,881 *
Motion Picture Industry Health Plan --
Retiree Member Fund................. 375,000 * 4,885 *
Nicholas Applegate NACM
Investment Grade Convertible........ 30,000 * 391 *
NORCAL Mutual Insurance Company....... 625,000 * 8,141 *
OCM Convertible Trust................. 5,965,000 * 77,699 *
Partner Reinsurance Company Ltd. ..... 1,925,000 * 25,075 *
Physicians' Reciprocal Insurers
Account #7.......................... 2,350,000 * 30,611 *
Port Authority of Allegheny County
Retirement and Disability Allowance
Plan for he Employees Represented by
Local 85 of the Amalgamated Transit
Union............................... 900,000 * 11,723 *
Prisma Foundation..................... 155,000 * 2,019 *
Prudential Insurance Company of
America............................. 215,000 * 2,801 *
Public Employees' Retirement
Association of Colorado............. 2,000,000 * 26,052 *
Qwest Occupational Halth Trust........ 695,000 * 9,053 *
Ram Trading Ltd. ..................... 10,000,000 * 130,259 *
Ramius, LP............................ 375,000 * 4,885 *
RBC Alternative Assets LP c/o Forest
Investment Mgmt. LLC................ 287,000 * 3,738 *
RCG Baldwin, LP....................... 875,000 * 11,398 *
RCG Halifax Master Fund, Ltd. ........ 2,500,000 * 32,565 *
RCG Latitude Master Fund, Ltd. ....... 8,125,000 * 105,835 *
RCG Multi Strategy A/C LP............. 6,250,000 * 81,412 *
Relay II Holdings c/o Forest
Investment Mgmt. LLC................ 383,000 * 4,989 *
Royal Bank of Canada.................. 35,000,000 1.57% 455,907 *
SAM Investments LDC................... 100,000,000 4.48% 1,302,590 *
SCI Endowment Care Common Trust
Fund -- National Fiduciary
Services............................ 400,000 * 5,210 *
43
AGGREGATE NUMBER OF
PRINCIPAL AMOUNT SHARES OF
AT MATURITY OF PERCENTAGE OF COMMON STOCK PERCENTAGE OF
DEBENTURES THAT DEBENTURES THAT MAY COMMON STOCK
NAME MAY BE SOLD OUTSTANDING BE SOLD(1) OUTSTANDING(2)
---- ---------------- ------------- ------------ --------------
SCI Endowment Care Common Trust
Fund -- Suntrust.................... 135,000 * 1,758 *
Southdown Pension Plan................ 250,000 * 3,256 *
Southern Farm Bureau Life Insurance
(Calamos Investments)............... 950,000 * 12,375 *
Southern Farm Bureau Life Insurance
Company (Froley, Revy Investment
Co.)................................ 1,500,000 * 19,539 *
Sphinx Convertible Arbitrage c/o
Forest Investment Mgmt. LLC......... 97,000 * 1,264 *
Sphinx Convertible Arbitrage Fund
SPC................................. 350,000 * 4,559 *
SPT................................... 2,300,000 * 29,960 *
Stanley Dean Witter Convertible
Securities Trust.................... 2,300,000 * 29,960 *
State Employees' Retirement Fund of
The State of Delaware............... 2,550,000 * 33,216 *
State of Oregon/Equity................ 11,200,000 * 145,890 *
State of Oregon/SAIF Corporation...... 7,200,000 * 93,786 *
Sturgeon Limited...................... 1,386,000 * 18,054 *
Sunrise Partners Limited
Partnership......................... 17,000,000 * 221,440 *
SuttonBrook Capital Portfolio LP...... 30,000,000 1.34% 390,777 *
Teachers Insurance and Annuity
Association......................... 37,000,000 1.66% 481,958 *
The California Wellness Foundation.... 830,000 * 10,811 *
The Cockrell Foundation............... 150,000 * 1,954 *
The Dow Chemical Company Employees'
Retirement Plan..................... 5,300,000 * 69,037 *
TO Securities (USA) Inc. ............. 44,500,000 1.99% 579,653 *
Tribeca Investments Ltd. ............. 3,500,000 * 45,591 *
Union Carbide Retirement Account...... 2,400,000 * 31,262 *
Worldwide Transactions Ltd. .......... 733,000 * 9,548 *
WPG Convertible Arbitrage Overseas
Master Fund LP...................... 2,000,000 * 26,052 *
WPG MSA Convertible Arbitrage Fund.... 1,000,000 * 13,026 *
XAVEX Convertible Arbitrage #5........ 625,000 * 8,141 *
XAVEX Convertible Arbitrage 2 Fund.... 200,000 * 2,605 *
Zurich Master Hedge Fund c/o Forest
Investment Mgmt. LLC................ 613,000 * 7,985 *
All other holders..................... 972,563,000 43.55% 12,668,508 3.44%
------------- ------ ---------- ----
2,233,305,000 100.00% 29,090,808 7.89%
============= ====== ========== ====
---------------
* Less than 1%
(1) Assumes conversion of all of the holder's Debentures at a conversion rate of
13.0259 shares of common stock per $1,000 principal amount at maturity of
the Debentures. This conversion rate is subject to adjustment as described
under "Description of the Debentures -- Conversion Rights." As a result, the
number of shares of common stock issuable upon conversion of the Debentures
may increase or decrease in the future. Excludes shares of common stock that
may be issued by us upon the repurchase of the Debentures by us at the
option of the holder. In addition, excludes fractional shares. Holders will
receive a cash adjustment for any fractional share amount resulting from
44
conversion of the Debentures, as described under "Description of the
Debentures -- Conversion Rights."
(2) Calculated based on 368,766,826 shares of common stock outstanding as of
December 17, 2002. In calculating this amount for each holder, we treated as
outstanding the number of shares of common stock issuable upon conversion of
all of that holder's Debentures, but we did not assume conversion of any
other holder's Debentures.
(3) Information about other selling securityholders will be set forth in
prospectus supplements, if required.
(4) Assumes that any other holders of Debentures, or any future transferees,
pledgees, donees or successors of or from any such other holders of
Debentures, do not beneficially own any common stock other than the common
stock issuable upon conversion of the Debentures at the initial conversion
rate.
45
PLAN OF DISTRIBUTION
We are registering the Debentures and the underlying shares of common stock
covered by this prospectus to permit holders to conduct public secondary trading
of these securities from time to time after the date of this prospectus. We will
not receive any of the proceeds from the offering of Debentures or the
underlying shares of common stock by the selling securityholders.
The selling securityholders may sell all or a portion of the Debentures and
the common stock into which the Debentures are convertible:
- directly to purchasers; or
- through underwriters, broker-dealers or agents, who may receive
compensation in the form of discounts, commissions or concessions from
the selling securityholders or from the purchasers of the Debentures and
common stock for whom they may act as agent.
The Debentures and the common stock into which the Debentures are
convertible may be sold from time to time in one or more transactions at:
- fixed prices, which may be changed;
- prevailing market prices at the time of sale;
- varying prices determined at the time of sale; or
- negotiated prices.
These prices will be determined by the holders of the securities or by
agreement between these holders and underwriters or dealers who may receive fees
or commissions in connection with the sale. The aggregate proceeds to the
selling securityholders from the sale of the Debentures or shares of common
stock offered by them hereby will be the purchase price of the Debentures or
shares of common stock less discounts and commissions, if any.
The sales may be effected in transactions, which may involve block
transactions:
- on any national securities exchange or quotation service on which the
Debentures and common stock may be listed or quoted at the time of sale;
- in the over-the-counter market;
- in transactions other than on any national securities exchange or
quotation service or in the over-the-counter market; or
- through the writing of options.
In connection with sales of the Debentures and the common stock into which
the Debentures are convertible or otherwise, the selling securityholders may
enter into hedging transactions with broker-dealers. These broker-dealers may in
turn engage in short sales of the Debentures and the shares of common stock in
the course of hedging their positions.
The selling securityholders may also sell short the Debentures and shares
of common stock into which the Debentures are convertible and deliver the
Debentures and the common stock into which the Debentures are convertible to
close out short positions, or loan or pledge Debentures and shares of common
stock into which the Debentures are convertible to broker-dealers that in turn
may sell the Debentures and shares of common stock.
To our knowledge, there are currently no plans, arrangements or
understandings between the selling securityholders and any underwriter,
broker-dealer or agent regarding the sale of the Debentures and the common stock
into which the Debentures are convertible by the selling securityholders.
Selling securityholders may ultimately not sell all, and conceivably may not
sell any, of the Debentures and shares of common stock offered by them under
this prospectus. In addition, any securities covered by this prospectus which
qualify for sale under Rule 144 or Rule 144A of the Securities Act may be sold
under
46
Rule 144 or Rule 144A rather than under this prospectus. We cannot assure you
that a selling securityholder will not transfer, devise or gift the Debentures
and the common stock into which the Debentures are convertible by other means
not described in this prospectus.
The selling securityholders and any underwriters, broker-dealers or agents
that participate with the selling securityholders in a the sale of the
Debentures or the common stock into which the Debentures are convertible may be
deemed to be "underwriters" within the meaning of the Securities Act. In this
case, any discounts, commissions, concessions or profit they earn on the resale
of the Debentures or the shares of common stock may be deemed to be underwriting
commissions or discounts under the Securities Act. Selling securityholders who
are "underwriters" within the meaning of Section 2(11) of the Securities Act
will be subject to the prospectus delivery requirements of the Securities Act.
The selling securityholders have acknowledged that they understand their
obligations to comply with the provisions of the Exchange Act and the rules
thereunder relating to stock manipulation, particularly Regulation M.
We entered into a resale registration rights agreement for the benefit of
the holders of the Debentures to register the resale of their Debentures and
common stock under the federal securities laws under specific circumstances and
at specific times. The registration rights agreement provides for cross-
indemnification of the selling securityholders and us and their and our
respective directors, officers and controlling persons against specific
liabilities in connection with the offer and sale of the Debentures and the
common stock, including liabilities under the Securities Act. We have agreed,
among other things, to bear all expenses, other than underwriting discounts and
selling commissions, in connection with the registration and sale of the
Debentures and common stock covered by this prospectus.
Under the registration rights agreement, we have agreed to use our best
efforts to keep the shelf registration statement of which this prospectus is a
part effective until the earliest of:
- two years after the last date of original issuance of any of the
Debentures;
- the date when the holders of the Debentures and the common stock issuable
upon conversion, redemption or repurchase of the Debentures are able to
sell their securities immediately without restriction pursuant to the
volume limitation provisions of Rule 144 under the Securities Act; and
- the date when all of the Debentures and the common stock issuable upon
conversion of the Debentures of those holders that complete and deliver
in a timely manner a selling securityholder election and questionnaire
are registered under the shelf registration statement and disposed of in
accordance with the shelf registration statement.
We may suspend the holder's use of the prospectus for a period not to
exceed 45 days in any 90-day period, and not to exceed an aggregate of 90 days
in any 360-day period, if:
- the prospectus would, in our judgment, contain a material misstatement or
omission as a result of an event that has occurred and is continuing; and
- we determine in good faith that the disclosure of this material
non-public information could be seriously detrimental to us and our
subsidiaries.
However, if the disclosure relates to a previously undisclosed proposed or
pending material business transaction, the disclosure of which we determine in
good faith would be reasonably likely to impede our ability to consummate the
transaction, we may extend the suspension period from 45 days to 60 days. We
need not specify the nature of the event giving rise to a suspension in any
notice to holders of the Debentures of the existence of such a suspension. Each
holder, by its acceptance of the Debentures, agrees to hold any communication by
us in response to a notice of a proposed sale in confidence.
The outstanding shares of our common stock are listed for trading on the
New York Stock Exchange.
47
VALIDITY OF SECURITIES
The validity of the Debentures and the shares of common stock issuable upon
conversion of the Debentures will be passed upon for General Mills by Siri S.
Marshall, General Counsel. Ms. Marshall owns, directly or indirectly, 65,614
shares of common stock, and has exercisable options to purchase additional
shares of common stock.
EXPERTS
The consolidated financial statements and schedule of General Mills and its
subsidiaries as of May 26, 2002 and May 27, 2001 and for each of the fiscal
years in the three-year period ended May 26, 2002, have been incorporated by
reference in this prospectus and in the registration statement in reliance upon
the reports of KPMG LLP, independent accountants, incorporated by reference
herein and upon the authority of said firm and experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION ABOUT GENERAL MILLS
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public through
the Internet at the SEC's website at http://www.sec.gov. You may also read and
copy any document in our files at the SEC's public reference room at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference room.
We have filed with the SEC a registration statement on Form S-3 to register
the securities covered hereby. This prospectus is a part of that registration
statement. As permitted by SEC rules, this prospectus does not contain all of
the information included or incorporated in the registration statement. The full
registration statement can be obtained from the SEC as indicated above.
You should rely only on the information provided in this prospectus and in
our filings under the Exchange Act incorporated herein by reference. We have not
authorized anyone to provide you with different information. You should not
assume that the information in this prospectus or any document incorporated by
reference is accurate as of any date other than that on the front cover of the
applicable documents.
Our principal executive offices are located at Number One General Mills
Boulevard, Minneapolis, MN 55440. Our telephone number is (763) 764-2167.
48
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth expenses payable by the Registrant in
connection with the offering described in this registration statement (other
than any underwriting discounts and commissions). All of such expenses, except
for the SEC registration fee, are estimates.
SEC registration fee........................................ $148,450
Legal fees and expenses..................................... 20,000
Printing.................................................... 20,000
Accountants' fees and expenses.............................. 5,000
Blue Sky fees and expenses.................................. 1,000
Trustee's fees and expenses................................. 10,500
Miscellaneous expenses...................................... 15,050
--------
Total............................................. $220,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under provisions of the By-laws of General Mills, each person who is or was
a director or officer of General Mills shall be indemnified by General Mills as
of right to the full extent permitted or authorized by Section 145 of the
General Corporation Law of Delaware.
Under Section 145 of the Delaware General Corporation Law, the directors of
officers of General Mills are entitled, under certain circumstances, to be
indemnified by it against all expenses and liabilities incurred by or imposed
upon them as a result of suits brought against them as such directors and
officers, if they act in good faith and in a manner they reasonably believe to
be in or not opposed to the best interests of General Mills, and, with respect
to any criminal action or proceeding, have no reasonable cause to believe their
conduct was unlawful, except that no indemnification shall be made against
expenses in respect of any claim, issue or matter as to which they shall have
been adjudged to be liable to General Mills, unless and only to the extent that
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, they are fairly and reasonably entitled to indemnity
for such expenses which such court shall deem proper. Any such indemnification
may be made by General Mills only as authorized in each specific case upon a
determination by the stockholders, independent legal counsel, a majority of the
disinterested directors or a committee of disinterested directors that
indemnification is proper in the circumstances because the indemnitee has met
the applicable statutory standard of conduct.
General Mills maintains standard policies of directors' and officers'
liability insurance.
The Securities and Exchange Commission has taken the position that insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted by a company to its directors and officers, such indemnification is
against public policy as expressed in such Act and is therefore unenforceable.
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ITEM 16. LIST OF EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
3.1 Restated Certificate of Incorporation of General Mills
(incorporated by reference to Exhibit 3.1 to our Annual
Report on Form 10-K for the fiscal year ended May 26, 2002).
3.2 Restated Bylaws of General Mills (incorporated by reference
to Exhibit 3.2 to our Annual Report on Form 10-K for the
fiscal year ended May 30, 1999).
4.1 Form of Zero Coupon Convertible Senior Debenture Due 2022
(incorporated by reference to Exhibit 4.1 to our Current
Report on Form 8-K filed November 12, 2002).
4.2 Indenture dated as of October 28, 2002 between General Mills
and BNY Midwest Trust Company (incorporated by reference to
Exhibit 4.2 to our Current Report on Form 8-K filed November
12, 2002).
4.3 Resale Registration Rights Agreement, dated as of October
28, 2002, among General Mills, Banc of America Securities
LLC and Morgan Stanley & Co. Incorporated, as
Representatives of the several Initial Purchasers
(incorporated by reference to Exhibit 4.3 to our Current
Report on Form 8-K filed November 12, 2002).
4.4 Rights Agreement, dated as of December 11, 1995, between
General Mills and Wells Fargo Bank Minnesota, N.A. (formerly
Norwest Bank Minnesota, N.A.), as Rights Agent (incorporated
by reference to Exhibit 1 to our Form 8-A Registration
Statement filed January 2, 1996).
4.5 Amendment No. 1, dated as of July 16, 2000, to the Rights
Agreement, dated as of December 11, 1995, between General
Mills and Wells Fargo Bank Minnesota, N.A. (formerly Norwest
Bank Minnesota, N.A.) (incorporated by reference to Exhibit
3 to our Form 8A/A Registration Statement filed July 25,
2000).
5.1* Opinion of Siri S. Marshall, General Counsel of General
Mills.
8.1* Opinion of Siri S. Marshall, General Counsel of General
Mills, as to tax matters (included in Exhibit 5.1).
12.1 Computation of Ratio of Earnings to Fixed Charges
(incorporated by reference to Exhibit 12 to our Quarterly
Report on Form 10-Q for the quarter ended November 24,
2002).
23.1* Consent of Siri S. Marshall (included in Exhibit 5.1).
23.2* Consent of KPMG LLP.
24.1* Power of Attorney.
25.1* Statement of Eligibility of Trustee on Form T-1 of BNY
Midwest Trust Company.
---------------
* Filed herewith.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in the
II-2
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to its articles, bylaws or otherwise, the Registrant has
been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, General Mills
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunder duly
authorized, in the City of Golden Valley (Minneapolis), State of Minnesota, on
the 23rd day of January, 2003.
GENERAL MILLS, INC.
By /s/ JAMES A. LAWRENCE
------------------------------------
James A. Lawrence
Executive Vice President, Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated:
SIGNATURE TITLE
--------- -----
Stephen W. Sanger Chairman of the Board and )
Chief Executive Officer )
Stephen R. Demeritt Director, Vice Chairman )
Livio D. DeSimone Director )
William T. Esrey Director ) /s/ SIRI S. MARSHALL
------------------------------
Siri S. Marshall
Attorney-in-fact
January 23, 2003
Raymond V. Gilmartin Director )
Robert L. Johnson Director )
John Keenan Director )
A. Michael Spense Director )
Dorothy A. Terrell Director )
Raymond G. Viault Director, Vice Chairman )
James A. Lawrence /s/ JAMES A. LAWRENCE January 23, 2003
------------------------------
Executive Vice President,
Chief Financial Officer
Kenneth L. Thome /s/ KENNETH L. THOME January 23, 2003
------------------------------
Senior Vice President,
Financial Operations
(Principal Accounting Officer)
II-4
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------
3.1 Restated Certificate of Incorporation of General Mills
(incorporated by reference to Exhibit 3.1 to our Annual
Report on Form 10-K for the fiscal year ended May 26, 2002).
3.2 Restated Bylaws of General Mills (incorporated by reference
to Exhibit 3.2 to our Annual Report on Form 10-K for the
fiscal year ended May 30, 1999).
4.1 Form of Zero Coupon Convertible Senior Debenture Due 2022
(incorporated by reference to Exhibit 4.1 to our Current
Report on Form 8-K filed November 12, 2002).
4.2 Indenture dated as of October 28, 2002 between General Mills
and BNY Midwest Trust Company (incorporated by reference to
Exhibit 4.2 to our Current Report on Form 8-K filed November
12, 2002).
4.3 Resale Registration Rights Agreement, dated as of October
28, 2002, among General Mills, Banc of America Securities
LLC and Morgan Stanley & Co. Incorporated, as
Representatives of the several Initial Purchasers
(incorporated by reference to Exhibit 4.3 to our Current
Report on Form 8-K filed November 12, 2002).
4.4 Rights Agreement, dated as of December 11, 1995, between
General Mills and Wells Fargo Bank Minnesota, N.A. (formerly
Norwest Bank Minnesota, N.A.), as Rights Agent (incorporated
by reference to Exhibit 1 to our Form 8-A Registration
Statement filed January 2, 1996).
4.5 Amendment No. 1, dated as of July 16, 2000, to the Rights
Agreement, dated as of December 11, 1995, between General
Mills and Wells Fargo Bank Minnesota, N.A. (formerly Norwest
Bank Minnesota, N.A.) (incorporated by reference to Exhibit
3 to our Form 8A/A Registration Statement filed July 25,
2000).
5.1* Opinion of Siri S. Marshall, General Counsel of General
Mills.
8.1* Opinion of Siri S. Marshall, General Counsel of General
Mills, as to tax matters (included in Exhibit 5.1).
12.1 Computation of Ratio of Earnings to Fixed Charges
(incorporated by reference to Exhibit 12 to our Quarterly
Report on Form 10-Q for the quarter ended November 24,
2002).
23.1* Consent of Siri S. Marshall (included in Exhibit 5.1).
23.2* Consent of KPMG LLP.
24.1* Power of Attorney.
25.1* Statement of Eligibility of Trustee on Form T-1 of BNY
Midwest Trust Company.
---------------
* Filed herewith.
II-5