General Mills (GIS)

Long-Term Incentive Awards – Performance Adjusted

In alignment with the Company’s overriding objective to achieve performance which is consistently superior to its performance peer group, a significant portion of the named executive officers’ pay opportunity is provided through long-term incentive awards granted under the 2005 Stock Compensation Plan. Awards are granted annually in June after fiscal year end. The size of the awards is periodically benchmarked against the long-term incentive awards made by other large food and consumer products companies to executives holding comparable positions, and each named executive officer’s standard award can be increased or decreased by as much as 30% based on the Corporate Performance Rating for that fiscal year. In fiscal 2007, 75% of the value of the long-term annual incentive award was delivered in stock options, and 25% of the value was awarded in restricted stock units. The Compensation Committee believes that providing a higher percentage of long-term

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awards in stock options motivates executives to increase stockholder value consistently over multiple years, since this pay opportunity can only be realized when stockholder return is enhanced. In fiscal 2007, all employees eligible for stock compensation received their maximum long-term incentive grant value based on the 1.80 Corporate Performance Rating. The specific long-term incentive awards for the five named executive officers are included in the narrative accompanying the Alternative Summary Compensation Table.

The restricted stock units issued as long-term incentive awards are subject to four-year cliff vesting. They earn dividend equivalents equal to regular dividends paid on our common stock.

The options issued as long-term incentive awards are also subject to four-year cliff vesting. The exercise price per share equals the fair market value of our common stock on the New York Stock Exchange on the grant date. The options generally expire 10 years and one month from the grant date. They include the right to pay the exercise price in cash or previously acquired common stock and the right to have shares withheld by the Company to pay withholding tax obligations due upon exercise.

Significant Compensation Actions Since the Beginning of Fiscal 2007

In addition to the compensation decisions described above, the Board of Directors has taken the following actions since the beginning of fiscal 2007 that impact the named executive officers’ compensation arrangements: