Filed Pursuant to Rule 424(b)(5)
Registration No. 333-75808
PROSPECTUS SUPPLEMENT
NOVEMBER 15, 2002
(TO PROSPECTUS DATED FEBRUARY 11, 2002)
(GENERAL MILLS LOGO)
$135,000,000
GENERAL MILLS, INC.
3.901% NOTES DUE 2007
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We will pay interest on the notes semiannually on May 30 and November 30 of
each year beginning on May 30, 2003. The notes will mature on November 30, 2007.
We may redeem some or all of the notes at any time at the prices described under
the heading "Description of the Notes -- Redemption -- Optional Redemption."
The notes will not be listed on any securities exchange.
Concurrently with this offering, we are also offering and selling a series
of $350,000,000 aggregate principal amount of our 3 7/8% Notes due 2007. The
offerings are not contingent on each other.
INVESTING IN THE NOTES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE
S-7.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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PER NOTE TOTAL
-------- ------------
Public offering price (1)................................... 100.00% $135,000,000
Placement agents' fees...................................... 0.30% $ 405,000
Proceeds to General Mills, Inc. (before expenses)........... 99.70% $134,595,000
------------------
(1) The public offering price will include accrued interest, if any, from
November 20, 2002 if settlement occurs after that date.
------------------------------
The notes are being purchased by Core Bond Products LLC through Banc of
America Securities LLC, J.P. Morgan Securities Inc., Fleet Securities, Inc.,
HSBC Securities (USA) Inc. and Wachovia Securities, Inc. acting as our agents.
The agents have advised us that the purchaser intends to deposit the notes with
Core Investment Grade Bond Trust I, which is simultaneously offering a series of
pass-through trust certificates representing undivided beneficial interests in
the assets of the trust, which assets will include the notes as well as debt
securities of various other issuers. This prospectus supplement and the attached
prospectus relate only to us and our notes and not to Core Bond Products LLC,
Core Investment Grade Bond Trust I, the pass-through trust certificates or the
securities of any other issuer that may be deposited with the trust. We have
authorized the agents to deliver this prospectus supplement and the attached
prospectus to each initial purchaser of the pass-through trust certificates.
This prospectus supplement and the attached prospectus relate only to us and our
notes and do not relate to the trust or the pass-through trust certificates. You
should only rely on this prospectus supplement and the attached prospectus for a
description of us and our notes. See "Risk Factors" and "Plan of Distribution."
We expect to deliver the notes to the purchaser in book-entry form only
through the facilities of The Depository Trust Company on or about November 20,
2002.
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BANC OF AMERICA SECURITIES LLC JPMORGAN
------------------------------
FLEET SECURITIES, INC.
HSBC
WACHOVIA SECURITIES
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
About this Prospectus Supplement and the Attached
Prospectus................................................ S-3
Summary..................................................... S-4
Risk Factors................................................ S-7
Use of Proceeds............................................. S-9
Ratios of Earnings to Fixed Charges......................... S-9
Description of the Notes.................................... S-9
Plan of Distribution........................................ S-14
Validity of Notes........................................... S-15
Experts..................................................... S-15
Cautionary Statement Regarding Forward-Looking Statements... S-15
PROSPECTUS
General Mills, Inc. ........................................ 3
Ratios of Earnings to Fixed Charges......................... 4
Use of Proceeds............................................. 4
Description of Debt Securities We May Offer................. 4
Plan of Distribution........................................ 14
Validity of Debt Securities We May Offer.................... 15
Experts..................................................... 15
Where You Can Find More Information......................... 15
S-2
ABOUT THIS PROSPECTUS SUPPLEMENT AND THE ATTACHED PROSPECTUS
This document is a prospectus supplement and supplements the attached
prospectus, which is part of a registration statement that we have filed with
the SEC. This prospectus supplement contains the terms of this offering of
notes.
This prospectus supplement and the information incorporated by reference in
it may add to, update or change information in the attached prospectus. If
information in this prospectus supplement or the information incorporated by
reference in this prospectus supplement is inconsistent with the attached
prospectus, then this prospectus supplement or the information incorporated by
reference in this prospectus supplement will apply and will supersede the
information in the attached prospectus.
It is important for you to read and consider all of the information
contained in this prospectus supplement and the attached prospectus in making
your decision to invest in notes. You should also read and consider the
information in the documents we have referred you to in "Where You Can Find More
Information" in the attached prospectus.
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the attached prospectus. Neither we
nor the placement agents have authorized any other person to provide you with
different or additional information. If anyone provides you with different or
additional information, you should not rely on it. Neither we nor the placement
agents are making an offer to sell notes in any jurisdiction where the offer or
sale is not permitted. You should not assume that the information in this
prospectus supplement or the attached prospectus is accurate as of any date
other than the date on the front of the documents. Updated information will be
provided in the future as explained under "Where You Can Find More Information"
in the attached prospectus.
We have authorized the placement agents to deliver a copy of this
prospectus supplement and the attached prospectus to each initial purchaser of
the pass-through trust certificates to be issued by Core Investment Grade Bond
Trust I together with the prospectus relating to the offering and sale of the
trust's pass-through trust certificates. This prospectus supplement and the
attached prospectus relate only to us and our notes and not to Core Bond
Products LLC, Core Investment Grade Bond Trust I, the pass-through trust
certificates or the securities of any other issuer that may be deposited with
the trust. You should only rely on this prospectus supplement and the attached
prospectus for a description of us and our notes. The information that is
included or incorporated by reference in this prospectus supplement and the
attached prospectus is not, and shall not be deemed to be, a part of the
prospectus relating to the pass-through trust certificates in any respect.
All references in this prospectus supplement to "we," "us" or "our" are to
General Mills, Inc. and, unless the context suggests otherwise, its subsidiaries
and references in this prospectus supplement to the "agents" or the "placement
agents" are to Banc of America Securities LLC, J.P. Morgan Securities Inc.,
Fleet Securities, Inc., HSBC Securities (USA) Inc. and Wachovia Securities, Inc.
All references to "$," "dollars" and "U.S. dollars" in this prospectus
supplement and the attached prospectus are to United States dollars.
All references to "notes" in this prospectus supplement are to the 3.901%
Notes due 2007.
Trademarks and servicemarks in this prospectus supplement and the attached
prospectus are set forth in capital letters and are owned or licensed by us or
our subsidiaries.
S-3
SUMMARY
This section contains a general summary of the information contained or
incorporated by reference in this prospectus supplement. This 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 this
entire prospectus supplement and the attached prospectus, including the
information set forth under the heading "Risk Factors" in this prospectus
supplement. 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.
GENERAL MILLS, INC.
OUR BUSINESS
We are 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 Us" in the attached prospectus for details about
information incorporated by reference into this prospectus supplement.
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 and approximately 85% of our segment operating profit before
unusual items for the period. 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
S-4
refrigerated entrees, OLD EL PASO Mexican foods and dinner kits,
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 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 and approximately 12% of our segment operating profit
before unusual items for the period. We market mixes and unbaked, part-baked and
fully baked dough products 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 and approximately 3% of our segment operating profit
before unusual items for the period. In Canada, we market products in many
categories, including cereals, meals, refrigerated dough products, baking
products and snacks. Outside 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.
S-5
THE OFFERING
ISSUER........................ General Mills, Inc.
SECURITIES OFFERED............ $135,000,000 aggregate principal amount of
3.901% notes maturing November 30, 2007.
INTEREST...................... Interest will accrue on the notes from November
20, 2002 and will be payable on May 30 and
November 30 of each year, beginning on May 30,
2003.
RANKING....................... The notes will be our unsecured and
unsubordinated indebtedness and will rank
equally with all of our other unsecured and
unsubordinated indebtedness.
OPTIONAL REDEMPTION........... The notes will be redeemable as a whole at any
time or in part from time to time, at our
option, at a redemption price equal to the
greater of:
- the principal amount being redeemed; or
- the sum of the present values of the
remaining scheduled payments of principal
and interest on the notes being redeemed,
discounted to the redemption date on a
semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the
treasury rate (as defined below) plus 15
basis points and accrued interest to the
redemption date.
COVENANTS..................... We will issue the notes under an indenture
containing covenants that restrict our ability,
with significant exceptions, to:
- incur debt secured by liens; and
- engage in sale/leaseback transactions.
USE OF PROCEEDS............... We intend to use the net proceeds to repay a
portion of our short-term indebtedness incurred
in connection with the Pillsbury acquisition.
LONG-TERM SENIOR UNSECURED
DEBT RATINGS*................. Standard & Poor's: BBB+ (Outlook: Stable)
Moody's: Baa2 (Outlook: Stable)
Fitch: BBB+ (Outlook: Negative)
* Ratings are not a recommendation to purchase,
hold or sell the notes, inasmuch as the
ratings do not comment as to market price or
suitability for a particular investor. The
ratings are based on current information
furnished to the rating agencies by us and
information obtained by the rating agencies
from other sources. The ratings are only
accurate as of the date hereof and may be
changed, superseded or withdrawn at any time
as a result of changes in, or unavailability
of, such information, and, therefore, a
prospective purchaser should check the
current ratings before purchasing the notes.
S-6
RISK FACTORS
Your investment in the notes involves risks, not all of which are described
in this prospectus supplement. In consultation with your own financial and legal
advisers, you should carefully consider, among other matters, the following
discussion of risks before deciding to invest in the notes. You should also
review our disclosures under the heading "Cautionary Statement Regarding
Forward-Looking Statements" in this prospectus supplement.
FAILURE TO INTEGRATE THE PILLSBURY BUSINESSES SUCCESSFULLY COULD ADVERSELY
AFFECT OUR FINANCIAL PERFORMANCE AND IMPACT OUR ABILITY TO MAKE PAYMENT ON THE
NOTES.
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.
WE HAVE A SUBSTANTIAL AMOUNT OF INDEBTEDNESS, WHICH COULD ADVERSELY AFFECT OUR
FINANCIAL PERFORMANCE AND IMPACT OUR ABILITY TO MAKE PAYMENTS ON THE NOTES.
As of August 25, 2002, we had total debt and minority interest of
approximately $9.3 billion. The indenture for the notes 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 notes. 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, are subject to prevailing economic conditions and
to financial, business and other factors beyond our control.
THE NOTES ARE SUBORDINATED TO ANY SECURED OBLIGATIONS WE MAY HAVE OUTSTANDING
AND EFFECTIVELY SUBORDINATED TO THE OBLIGATIONS OF OUR SUBSIDIARIES.
Although the notes are unsubordinated obligations, they will be
subordinated to any secured obligations we may have, to the extent of the assets
that serve as security for those obligations. The notes 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 notes, or to make
any funds available to us, whether by paying dividends or otherwise, so that we
can do so. As of August 25, 2002, our subsidiaries had total debt of
approximately $160 million and
S-7
preferred minority obligations of approximately $300 million. Our subsidiaries
may incur additional obligations in the future.
THERE MAY NOT BE ANY SECONDARY TRADING MARKET FOR THE NOTES, WHICH MAY LIMIT
YOUR ABILITY TO RESELL THEM.
Upon issuance, the notes will not have an established trading market and
will not be listed on any securities exchange. We cannot assure you that a
secondary trading market for the notes will ever develop or, if one develops,
that it will be maintained or provide any significant liquidity. As a result, if
you decide to sell your notes there may be either no or only a limited number of
potential buyers. This, in turn, may affect the price you receive for your notes
or your ability to sell your notes at all.
The placement agents are not obligated to make a market in the notes. If
they elect to do so, they may discontinue that activity at any time.
IF YOU ARE ABLE TO RESELL YOUR NOTES, 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 notes, 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 notes;
- 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;
- the market for similar securities; and
- the time remaining to maturity of the notes.
As a result of these factors, you may only be able to sell your notes at
prices below those you believe to be appropriate, including prices below the
price you paid for them.
THE CREDIT RATINGS ASSIGNED TO THE NOTES HAVE A LIMITED PURPOSE AND MAY NOT
REFLECT ALL RISKS OF AN INVESTMENT IN THE NOTES.
Credit ratings are not recommendations to buy, sell or hold securities and
are subject to revision or withdrawal at any time by the assigning rating
agency. In addition, each rating should be evaluated independently of any other
rating.
The credit ratings assigned to the notes may not reflect the potential
impact of all risks related to any trading market for, or trading value of, the
notes. In addition, actual or anticipated changes in our credit ratings will
generally affect any trading market for, or trading value of, the notes.
A PURCHASER OF PASS-THROUGH TRUST CERTIFICATES SHOULD ONLY RELY ON THIS
PROSPECTUS SUPPLEMENT AND THE ATTACHED PROSPECTUS FOR A DESCRIPTION OF US AND
OUR NOTES AND SHOULD UNDERSTAND THAT OUR LIABILITIES AND OBLIGATIONS ARE LIMITED
SOLELY TO THE INFORMATION CONTAINED IN OR SPECIFICALLY INCORPORATED BY REFERENCE
IN THIS PROSPECTUS SUPPLEMENT AND THE ATTACHED PROSPECTUS AND TO OUR OBLIGATIONS
UNDER THE NOTES AND THE INDENTURE.
The placement agents have advised us that the purchaser intends to deposit
the notes with a trust that will issue a series of pass-through trust
certificates. However, you should understand that this prospectus supplement and
the attached prospectus relate only to us and our notes and not to Core Bond
Products LLC,
S-8
Core Investment Grade Bond Trust I, the pass-through trust certificates or the
securities of any other issuer that may be deposited with the trust. As a
result, you should only rely on this prospectus supplement and the attached
prospectus for a description of us and our notes. Moreover, the information that
is included or incorporated by reference in this prospectus supplement and the
attached prospectus is not, and shall not be deemed to be, a part of the
prospectus relating to the pass-through trust certificates in any respect.
You should also understand that we do not have and are not assuming any
liability or obligation with respect to the trust or its structure or actions,
the pass-through trust certificates or their issuance, offering or sale, the
registration statement and prospectus relating to the offering and sale of the
pass-through trust certificates or the actions or securities of any other issuer
that may have securities deposited with the trust. Our liabilities and
obligations are limited solely to the information contained in or specifically
incorporated by reference in this prospectus supplement and the attached
prospectus and to our obligations under the notes and the indenture.
USE OF PROCEEDS
The net proceeds of this offering, after deducting placement agents' fees
and expenses, are estimated to be approximately $134,420,000. The net proceeds
of our concurrent offering of 3 7/8% Notes due 2007, after deducting
underwriting discounts and expenses, are estimated to be approximately
$348,520,500. We intend to use the net proceeds of both offerings to repay a
portion of our short-term indebtedness that we incurred in connection with the
Pillsbury acquisition. At August 25, 2002, our commercial paper and other
short-term debt had a weighted average interest rate of approximately 2.00% and
a weighted average remaining maturity of approximately 29 days.
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 13-week periods ended in August 2001
and 2002 are as follows:
13 WEEKS ENDED
FISCAL YEARS ENDED IN MAY IN AUGUST
-------------------------------- ---------------
1998 1999 2000 2001 2002 2001 2002
---- ---- ---- ---- ---- ------ ------
5.63 6.67 6.25 5.29 2.50 6.03 2.69
We have computed our ratio of earnings to fixed charges 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.
DESCRIPTION OF THE NOTES
The following description of the particular terms of the notes supplements
and, to the extent inconsistent with, replaces the description of the general
terms and provisions of our debt securities under the heading "Description of
Debt Securities We May Offer" in the attached prospectus. You should read both
the following description and the one in the attached prospectus. The following
summary does not purport to be complete and is qualified in its entirety by
reference to the actual provisions of the notes and the indenture identified
below. The term "debt securities," as used in this prospectus supplement, refers
to all debt securities, including the notes, issued and issuable from time to
time under the indenture. Other terms used in this summary are defined in the
attached prospectus, the notes or the indenture; these terms have the meanings
given to them in those documents.
GENERAL
We will issue the notes under the indenture described in the attached
prospectus. The indenture is an agreement, dated February 1, 1996, between us
and U.S. Bank National Association, which acts as trustee. The indenture does
not limit the amount of debt securities we may issue.
S-9
We will issue the notes only in book-entry form, in denominations of $1,000
and integral multiples of $1,000. You will have to make initial settlement for
the global securities in immediately available funds. In certain limited
circumstances, we may issue certificated securities. See "-- Book-Entry Notes"
below. Principal of and interest on the notes will be payable, and the transfer
of notes will be registrable, through The Depository Trust Company, or DTC, as
described below.
The notes will mature on November 30, 2007. The notes will bear interest at
a rate of 3.901% per year, payable semiannually on May 30 and November 30,
beginning May 30, 2003, to the person in whose name a note is registered at the
close of business on the May 15 or November 15 that precedes the date on which
interest will be paid. Interest payments for the notes will include accrued
interest from and including November 20, 2002 or from and including the last
date in respect of which interest has been paid or provided for, as the case may
be, to, but excluding, the interest payment date or the date of maturity, as the
case may be. Interest payable at the maturity of the notes will be payable to
the registered holder of the note to whom the principal is payable. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
If any interest payment date falls on a day that is not a business day, the
interest payment will be postponed to the next day that is a business day, and
no interest on that payment will accrue for the period from and after the
interest payment date. If the maturity date of the notes falls on a day that is
not a business day, the payment of interest and principal may be made on the
next succeeding business day, and no interest on that payment will accrue for
the period from and after the maturity date. A "business day" is any Monday,
Tuesday, Wednesday, Thursday or Friday which is not a day on which banking
institutions in The City of New York are authorized or obligated by law or
executive order to close.
The notes, the indenture and the placement agency agreement are governed
by, and will be construed in accordance with, the laws of the State of New York
applicable to agreements made and to be performed wholly within the State of New
York.
In some circumstances, we may elect to discharge our obligations on the
notes through defeasance or covenant defeasance. See "Description of Debt
Securities We May Offer -- Defeasance" in the attached prospectus for more
information about what this means and how we may do this.
We may, without the consent of the holders of notes, issue additional notes
having the same ranking and the same interest rate, maturity and other terms as
the notes. Any additional notes having the same terms, together with the notes
in this offering, will constitute a single series of notes under the indenture.
No additional notes may be issued if an event of default has occurred with
respect to the notes.
RANKING
The notes will be our general unsecured obligations and will rank equally
with all of our other unsecured and unsubordinated indebtedness outstanding from
time to time. We have no indebtedness which is subordinated in right of payment
to the notes at the present time and we have no present intention to issue
indebtedness which is subordinated in right of payment to the notes. The notes
will be effectively subordinated to any secured obligations we may have, to the
extent of the assets that serve as security for those obligations, and to all
liabilities of our subsidiaries. As of August 25, 2002, our subsidiaries had
total debt of approximately $160 million and preferred minority obligations of
approximately $300 million. Our subsidiaries may incur additional obligations in
the future.
REDEMPTION
Except as set forth below, the notes cannot be redeemed by us or by the
holders prior to maturity. The notes will not be subject to, or entitled to the
benefit of, any sinking fund.
S-10
The notes may be redeemed, in whole at any time or in part from time to
time, at our option. The redemption price for the notes to be redeemed on any
redemption date will be equal to the greater of the following amounts:
- 100% of the principal amount of the notes being redeemed on the
redemption date; or
- the sum of the present values of the remaining scheduled payments of
principal and interest on the notes being redeemed on that redemption
date (not including any portion of any payments of interest accrued to
the redemption date) discounted to the redemption date on a semiannual
basis at the treasury rate (as defined below), as determined by the
reference treasury dealer (as defined below), plus 15 basis points;
plus accrued and unpaid interest on the notes to the redemption date.
Notwithstanding the foregoing, installments of interest on notes that are due
and payable on interest payment dates falling on or prior to a redemption date
will be payable on the interest payment date to the registered holders as of the
close of business on the relevant record date according to the notes and the
indenture. The redemption price will be calculated on the basis of a 360-day
year consisting of twelve 30-day months.
We will mail notice of any redemption at least 30 days but not more than 60
days before the redemption date to each registered holder of the notes to be
redeemed. Once notice of redemption is mailed, the notes called for redemption
will become due and payable on the redemption date and at the applicable
redemption price, plus accrued and unpaid interest to the redemption date.
"Treasury rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the comparable
treasury issue, assuming a price for the comparable treasury issue (expressed as
a percentage of its principal amount) equal to the comparable treasury price for
that redemption date.
"Comparable treasury issue" means the United States Treasury security
selected by the reference treasury dealer as having a maturity comparable to the
remaining term of the notes to be redeemed that would be utilized, at the time
of selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the notes.
"Comparable treasury price" means, with respect to any redemption date:
- the average of the reference treasury dealer quotations for that
redemption date, after excluding the highest and lowest of those
quotations; or
- if the trustee obtains fewer than three reference treasury dealer
quotations, the average of all those quotations; or
- if only one reference treasury dealer quotation is received, that
quotation.
"Reference treasury dealer" means:
- Banc of America Securities LLC and J.P. Morgan Securities Inc. (or their
respective associates which are primary treasury dealers), and their
respective successors; provided, however, that if either of Banc of
America Securities LLC or J.P. Morgan Securities Inc. shall cease to be a
primary U.S. government securities dealer in New York City (a "primary
treasury dealer"), we will substitute another primary treasury dealer;
and
- any other primary treasury dealer(s) selected by the trustee after
consultation with us.
"Reference treasury dealer quotation" means, with respect to each reference
treasury dealer and any redemption date, the average, as determined by the
trustee, of the bid and asked prices for the comparable treasury issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the trustee by that reference treasury dealer at 5:00 p.m. (New York
City time) on the third business day preceding the relevant redemption date.
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On and after the redemption date, interest will cease to accrue on the
notes or any portion of the notes called for redemption (unless we default in
the payment of the redemption price and accrued interest). On or before the
redemption date, we will deposit with a paying agent (or the trustee) money
sufficient to pay the redemption price of and accrued interest on the notes to
be redeemed on that date. If less than all of the notes are to be redeemed, the
notes to be redeemed shall be selected by lot by DTC, in the case of notes
represented by a global security, or by the trustee by a method the trustee
deems to be fair and appropriate, in the case of notes that are not represented
by a global security.
BOOK-ENTRY NOTES
We will issue the notes in the form of one or more fully registered global
securities registered in the name of DTC or a nominee of DTC, and deposit the
global securities with a custodian for DTC. You may hold a beneficial interest
in the global securities through DTC either directly as a participant in the DTC
system or indirectly through financial institutions that are participants in the
DTC system. Secondary market trading with respect to the notes will occur
between DTC participants in the ordinary way in accordance with DTC's rules and
will be settled in immediately available funds using DTC's Same-Day Funds
Settlement System.
So long as DTC or its nominee is the registered holder of the global
securities, DTC or its nominee will be the sole holder of the notes for purposes
of the indenture. As a result, to exercise any rights of a registered holder
under the indenture, you must rely on the procedures of DTC and, if you are not
a participant, on the procedures of the participant or participants through
which you own your interest in the notes.
The global security may not be transferred, except among DTC, its nominees
and their successors. The global securities will be exchangeable for
certificated notes only if:
- we notify the trustee that we wish to terminate the global security;
- an event of default on the notes has occurred and not been cured; or
- DTC notifies us that it is unwilling or unable to continue as a clearing
system for the global securities or it ceases to be a clearing agency
registered under the Exchange Act and, in either case, a successor
clearing system is not appointed by us within 90 days after receiving the
notice from DTC or becoming aware that DTC is no longer so registered.
If any of these events occurs, we will print and deliver certificated notes.
Certificated notes issued under these circumstances will be registered in the
names of the beneficial owners of the global securities as provided to the
trustee by the participants identified by DTC. Other than under these
circumstances, you will not be entitled to have the notes registered in your
name or to receive certificates in your name evidencing the notes. Therefore,
your ability to pledge a beneficial interest in the global security to persons
that do not participate in the DTC system, and to take other actions, may be
limited because you will not possess a physical certificate that represents your
interest.
PAYMENT AND TRANSFER
For so long as the notes are represented by global securities, we will make
payments of principal of and interest on the notes through the trustee to DTC.
If the global securities are exchanged for certificated notes, we will make
payments of principal at maturity in immediately available funds upon
presentation and surrender of the certificated note at the office or agency
maintained by us for this purpose in the Borough of Manhattan, The City of New
York, currently the corporate trust offices of U.S. Bank National Association,
100 Wall Street, New York, NY 10005. We will make payments of interest at
maturity to the person to whom we pay the principal. We will make any payments
of interest on an interest payment date other than the date of maturity by check
mailed to the address of the record date registered holder as it appears in the
security register; provided that, we will make any payments of interest on an
interest payment date other than the date of maturity to each record date
S-12
registered holder by wire transfer of immediately available funds if that
registered holder has delivered appropriate wire transfer instructions in
writing to the trustee not less than 15 days prior to the particular interest
payment date. Any wire transfer instructions received by the trustee shall
remain in effect until revoked by the registered holder.
Book-entry notes may be transferred or exchanged only through DTC.
Registration of transfer or exchange of notes in certificated form will be
made at the office or agency maintained by us for this purpose in the Borough of
Manhattan, The City of New York, currently the corporate trust office of U.S.
Bank National Association, 100 Wall Street, New York, NY 10005. There will be no
service charge for any registration of transfer or exchange of notes, but we may
require payment of a sum sufficient to cover any related tax or other
governmental charge (except in the case of some exchanges not involving any
transfer).
ABOUT THE DEPOSITORY
DTC has informed us that DTC is:
- a limited-purpose trust company organized under the New York Banking Law;
- a "banking organization" under the New York Banking Law;
- a member of the Federal Reserve System;
- a "clearing corporation" under the New York Uniform Commercial Code; and
- a "clearing agency" registered under Section 17A of the Securities
Exchange Act of 1934.
DTC was created to hold securities for its participants and facilitate the
clearance and settlement of securities transactions between its participants. It
does this through electronic book-entry changes in the accounts of its direct
participants, eliminating the need for physical movement of securities
certificates. DTC is owned by a number of its direct participants and by the New
York Stock Exchange, Inc., the American Stock Exchange LLC and the National
Association of Securities Dealers, Inc. Access to the DTC system is available
through its direct participants or through indirect participants that clear
through or maintain a custodial relationship with a direct participant, either
directly or indirectly. The rules applicable to DTC and its direct and indirect
participants are on file with the SEC.
Conveyance of notices and other communications from DTC to direct
participants, from direct participants to indirect participants and from direct
participants and indirect participants to beneficial owners are governed by
arrangements among them and are subject to statutory or regulatory requirements.
Neither DTC nor Cede & Co. will consent or vote with respect to global
securities. Under its usual procedures, DTC mails an omnibus proxy to a company
as soon as possible after a record date. The omnibus proxy assigns Cede & Co.'s
consenting or voting rights to those direct participants to whose accounts the
book-entry notes are credited on the record date (identified in a listing
attached to the omnibus proxy).
We will make payments on the global securities in immediately available
funds to Cede & Co. or any other nominee named by DTC. DTC's practice is to
credit direct participants' accounts on the applicable payment date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payment on that date. Payments by
participants to beneficial owners are governed by standing instructions and
customary practices and are subject to statutory and regulatory requirements. We
and the trustee are responsible only for making payments to DTC, DTC is
responsible for disbursing those payments to its direct participants and the
direct participants (and any indirect participants) are solely responsible for
disbursing those payments to the beneficial owners.
Unless we have issued certificated notes, any redemption notices will be
sent to Cede & Co.
DTC may discontinue providing its services as securities depository at any
time by giving reasonable notice to us or the trustee. If we do not obtain a
successor securities depository, we will print and deliver certificated notes.
S-13
We may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor securities depository). If we do so, we will print
and deliver certificated notes.
We have obtained the information in this section from sources that we
believe to be reliable, but neither we nor the placement agents take any
responsibility for its accuracy.
PLAN OF DISTRIBUTION
Subject to the terms and conditions of a placement agency agreement dated
the date of this prospectus supplement by and between us and Banc of America
Securities LLC, J.P. Morgan Securities Inc., Fleet Securities, Inc., HSBC
Securities (USA) Inc. and Wachovia Securities, Inc., as placement agents, we
have agreed to sell to, and each of the placement agents has agreed to solicit
offers to purchase from, Core Bond Products LLC, as depositor of the Core
Investment Grade Bond Trust I, the aggregate principal amount of notes specified
opposite its name below:
PRINCIPAL AMOUNT
PLACEMENT AGENT OF NOTES
--------------- ----------------
Banc of America Securities LLC.............................. $ 67,500,000
J.P. Morgan Securities Inc. ................................ 54,000,000
Fleet Securities, Inc. ..................................... 4,590,000
HSBC Securities (USA) Inc. ................................. 4,455,000
Wachovia Securities, Inc. .................................. 4,455,000
------------
Total................................................ $135,000,000
============
The placement agency agreement provides that the placement agents'
obligations are subject to the approval of various legal matters by counsel and
to other conditions. The placement agents are not obligated, under any
circumstance, to purchase notes from us as principal or otherwise.
We will pay the placement agent that solicited the offer a commission equal
to 0.30% of the principal amount of each note for which we have received an
offer to purchase that we have accepted or are required to accept under the
terms of the placement agency agreement.
We estimate our expenses in connection with the offering and sale of the
notes, excluding placement agents' fees, will total approximately $175,000.
Upon issuance, the notes will not have an established trading market and
will not be listed on any securities exchange. We cannot assure you that a
secondary trading market for the notes will ever develop or, if one develops,
that it will be maintained or provide any significant liquidity. From time to
time, the placement agents may make a market in the notes, but the placement
agents are not obligated to do so and may discontinue that activity at any time.
In the ordinary course of its business, each of the placement agents and
certain of their affiliates have engaged, and may in the future engage, in
investment and commercial banking transactions with us and our affiliates.
Because more than ten percent of the net proceeds of the offering may be paid to
members or affiliates of members of the National Association of Securities
Dealers, Inc. participating in the offering, this offering will be conducted in
compliance with Rule 2710(c)(8) of the Conduct Rules of the National Association
of Securities Dealers, Inc.
Concurrently with this offering, we are also offering and selling a series
of $350,000,000 aggregate principal amount of our 3 7/8% Notes due 2007. Banc of
America Securities LLC, J.P. Morgan Securities Inc. and other underwriters are
serving as underwriters with respect to that series of notes. The offerings are
not contingent on each other.
The placement agents have advised us that Core Bond Products LLC intends to
deposit the notes with Core Investment Grade Bond Trust I, a trust to be formed
pursuant to a trust agreement among Core Bond Products LLC, as depositor, The
Bank of New York, as trustee, and Banc of America Securities LLC, as
administrative agent, for the purpose of issuing a series of securities called
Pass-Through Trust Certificates,
S-14
Series 2002-1, which will represent undivided beneficial interests in the assets
of the trust. Those assets will include the notes as well as debt securities of
various other issuers.
We have authorized the placement agents to deliver a copy of this
prospectus supplement and the attached prospectus to each initial purchaser of
the pass-through trust certificates together with the prospectus relating to the
offering and sale of the trust's pass-through trust certificates. This
prospectus supplement and the attached prospectus relate only to us and our
notes and not to Core Bond Products LLC, Core Investment Grade Bond Trust I, the
pass-through trust certificates or the securities of any other issuer that may
be deposited with the trust. You should only rely on this prospectus supplement
and the attached prospectus for a description of us and our notes. The
information that is included or incorporated by reference in this prospectus
supplement and the attached prospectus is not, and shall not be deemed to be, a
part of the prospectus relating to the pass-through trust certificates in any
respect.
We have not been involved in the creation of the trust or the preparation
of the registration statement and related prospectus relating to the offering
and sale of the trust's pass-through trust certificates. We have no contract or
other arrangement with the trust, will not be involved in the distribution of
the pass-through trust certificates, are not a party to any arrangement with
respect to the trust (other than the placement agency agreement) and are not
partners, joint venturers or co-issuers with respect to the trust with any of
the placement agents, the purchaser of the notes, the trust or any other issuers
whose securities may be deposited with the trust. Accordingly, we do not have
and are not assuming any liability or obligation with respect to the trust or
its structure or actions, the pass-through trust certificates or their issuance,
offering or sale, the registration statement and prospectus relating to the
offering and sale of the pass-through trust certificates or the actions or
securities of any other issuer that may have securities deposited with the
trust. Our liabilities and obligations are limited solely to the information
contained in or specifically incorporated by reference in this prospectus
supplement and the attached prospectus and to our obligations under the notes
and the indenture.
Each of the placement agents is deemed to be an "underwriter" within the
meaning of the Securities Act. We have agreed to indemnify the placement agents
against certain liabilities, including liabilities under the Securities Act, or
to contribute to payments the placement agents may be required to make.
VALIDITY OF NOTES
Siri S. Marshall, our general counsel, will pass on the validity of the
notes for us. Ms. Marshall owns, directly or indirectly, 65,614 shares of our
common stock and has exercisable options to purchase additional shares of our
common stock. Davis Polk & Wardwell, New York, New York, will issue a legal
opinion as to certain matters for the placement agents.
EXPERTS
The consolidated financial statements and schedule of General Mills, Inc.
and 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 supplement in reliance upon the reports of KPMG
LLP, independent accountants, which reports are also incorporated by reference
in this prospectus supplement and upon the authority of KPMG LLP as experts in
accounting and auditing.
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 supplement, the
S-15
attached prospectus, the documents incorporated by reference in this prospectus
supplement, 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.
S-16
[GENERAL MILLS LOGO]
$8,000,000,000
GENERAL MILLS, INC.
DEBT SECURITIES
---------------
This prospectus is part of a registration statement that we filed with the
SEC using a shelf registration process. Under this shelf process, we may sell
the debt securities described in this prospectus in one or more offerings up to
a total dollar amount of $8,000,000,000.
This prospectus provides you with a general description of the debt
securities we may offer. Each time we sell debt securities, we will provide one
or more prospectus supplements containing specific information about the terms
of that offering. The prospectus supplements may also add, update or change
information contained in this prospectus.
We may sell these securities to or through underwriters, and also to other
purchasers or through agents. The names of the underwriters or agents will be in
any accompanying prospectus supplement.
You should read both this prospectus and any prospectus supplement together
with additional information described under the heading "Where You Can Find More
Information" on page 15.
This prospectus may not be used to carry out sales of securities unless
accompanied by a prospectus supplement.
---------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------
The date of this Prospectus is February 11, 2002.
TABLE OF CONTENTS
PAGE
----
General Mills, Inc. ........................................ 3
Ratios of Earnings to Fixed Charges......................... 4
Use of Proceeds............................................. 4
Description of Debt Securities We May Offer................. 4
Plan of Distribution........................................ 14
Validity of Debt Securities We May Offer.................... 15
Experts..................................................... 15
Where You Can Find More Information......................... 15
2
GENERAL MILLS, INC.
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.
On October 31, 2001, we completed the acquisition of the worldwide
businesses of The Pillsbury Company from Diageo plc. For fiscal 2001, on a pro
forma basis assuming the Pillsbury acquisition and related dispositions occurred
at the beginning of that fiscal year, we had pro forma sales of more than $13
billion worldwide, including our proportionate share of joint venture revenues.
Our brands hold leading positions in 14 major U.S. food categories and we market
more than 100 consumer brands, of which more than 30 generate annual U.S. retail
sales in excess of $100 million each.
Our primary product and service categories, our main brands, and the
contribution of each category to total pro forma fiscal 2001 sales (including
our proportionate share of our joint venture sales) are outlined below:
- Big G Cereals accounted for $2.6 billion in pro forma sales (approximately 19%
of total pro forma sales) and includes such well-known brands as CHEERIOS,
WHEATIES and TOTAL.
- The Meals Division accounted for $2.3 billion in pro forma sales
(approximately 17% of total pro forma sales) and includes 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 U.S. accounted for $1.7 billion in pro forma sales (approximately
13% of total pro forma sales) and includes a variety of PILLSBURY refrigerated
dough products for cookies, breads and rolls; PILLSBURY frozen waffles and
breakfast pastries; and TOTINO'S frozen pizza and snacks.
- Bakeries and Foodservice accounted for $1.7 billion in pro forma sales
(approximately 13% of total pro forma sales) and includes 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 like school cafeterias, restaurants and
convenience stores.
- Baking Products accounted for $1.0 billion in pro forma sales (approximately
7% of total pro forma sales) and includes lines of dessert, muffin and cookie
mixes under the BETTY CROCKER trademark; baking mix under the BISQUICK
trademark; and flour under the GOLD MEDAL trademark.
- Our Snacks Division had pro forma sales of $1.0 billion (approximately 7% of
total pro forma sales) and includes POP SECRET microwave popcorn; BUGLES, CHEX
and GARDETTO's snack mixes; and lines of grain snacks and fruit snacks.
- Yoplait-Colombo/Health Ventures accounted for $800 million in pro forma sales
(approximately 6% of total pro forma sales) and includes YOPLAIT and COLOMBO
yogurt; Small Planet Foods, a marketer of organic food products, and 8th
Continent, a soy product joint venture with DuPont.
- International Operations collectively accounted for $2.5 billion in pro forma
sales (approximately 18% of total pro forma sales) and includes Canada ($440
million), General Mills International ($1.0 billion), our share ($450 million)
of sales for Cereal Partners Worldwide, a 50/50 joint venture with Nestle and
our 40.5 percent share ($400 million) of Snack Ventures Europe, a joint
venture with PepsiCo.
General Mills was incorporated under the laws of the state of Delaware in
1928. On November 25, 2001, we employed approximately 27,000 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"
3
on page 15 for details about information incorporated by reference into this
prospectus.
RATIOS OF EARNINGS TO FIXED CHARGES
Our consolidated ratios of earnings to fixed charges for each of the fiscal
years ended May 1997 through 2001 and the 26-week periods ended November 26,
2000 and November 25, 2001 are as follows:
26 WEEKS
FISCAL YEARS ENDED ENDED
------------------------------------------ ---------------
MAY 25 MAY 31 MAY 30 MAY 28 MAY 27 NOV 26 NOV 25
1997 1998 1999 2000 2001 2000 2001
------ ------ ------ ------ ------ ------ ------
6.54 5.63 6.67 6.25 5.29 5.59 4.66
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.
USE OF PROCEEDS
Unless otherwise indicated in an accompanying prospectus supplement, the
net proceeds from the sale of the debt securities will be used for general
corporate purposes, which may include, among other things, working capital,
capital expenditures, the repurchase of shares of common stock, acquisitions and
the repayment of short-term borrowings or other indebtedness.
DESCRIPTION OF DEBT SECURITIES
WE MAY OFFER
As required by federal law for all bonds and notes of companies that are
publicly offered, the debt securities are governed by a document called the
indenture. The indenture is a contract, dated February 1, 1996, between us and
U.S. Bank National Association, which acts as trustee. The trustee has two main
roles:
1. The trustee can enforce your rights against us if we default. Defaults are
described under "What Is an Event of Default?" on page 13. There are some
limitations on the extent to which the trustee acts on your behalf, described
later on pages 13 and 14 under "Remedies If an Event of Default Occurs."
2. The trustee also performs administrative duties for us, such as sending you
interest payments, transferring your debt securities to a new buyer if you
sell and sending you notices.
The indenture contains the full legal text of the matters described in this
section. The indenture and the debt securities are governed by New York law. The
indenture is an exhibit to our registration statement. See "Where You Can Find
More Information" on page 15 for information on how to obtain a copy.
We may issue as many distinct series of debt securities under the indenture
as we wish. The indenture does not limit the amount of debt we may issue.
This section summarizes the material terms of the debt securities that are
common to all series, although the prospectus supplement that describes the
terms of each series of debt securities may also describe differences from the
material terms summarized here. Because this section is a summary, it does not
describe every aspect of the debt securities, and is subject to and qualified in
its entirety by reference to all the provisions of the indenture, including
definitions of some of the terms used in the indenture. In this prospectus, we
describe the meaning for only the more important terms. We also include
references in parentheses to some sections of the indenture. Whenever we refer
to particular sections or defined terms of the indenture in this prospectus or
in the prospectus supplement, those sections or defined terms are incorporated
by reference here or in the prospectus supplement. That means we can disclose
that information to you by referring you to those sections or defined terms in
the indenture. You must look to the indenture for the most complete description
of what we describe in summary form in this prospectus.
This summary also is subject to and qualified by the more detailed
description of the particular amounts, prices and terms of the debt securities
comprising the series described in the prospectus supplement. The prospectus
supplement relating to each series of debt
4
securities offered will be attached to the front of this prospectus. In some
instances, certain of the precise terms of debt securities you are offered may
be described in a further prospectus supplement, known as a pricing supplement.
We may issue the debt securities as original issue discount securities,
which will be offered and sold at a substantial discount below their stated
principal amount. (section 101) The prospectus supplement relating to those
original issue discount securities will describe federal income tax consequences
and other special considerations applicable to them. The debt securities may
also be issued as indexed securities or securities denominated in foreign
currencies or currency units, as described in more detail in the prospectus
supplement relating to those particular debt securities. The prospectus
supplement relating to specific debt securities will also describe any special
considerations and certain additional tax considerations applicable to those
debt securities.
In addition, the specific financial, legal and other terms particular to a
series of debt securities are described in the prospectus supplement relating to
the series.
TERMS
The prospectus supplement (including any separate pricing supplement)
relating to a series of debt securities being offered will describe the
following terms:
- the title of the offered debt securities;
- any limit on the aggregate principal amount of the offered debt securities;
- the purchase price of the offered debt securities;
- the date or dates on which the offered debt securities will be payable;
- the rate or rates, which may be fixed or variable, at which the offered debt
securities will bear interest, if any, and the date or dates from which that
interest will accrue;
- the dates on which interest, if any, on the offered debt securities will be
payable and the regular record dates for the interest payment dates;
- any mandatory or optional sinking funds or similar provisions or provisions
for redemption at the option of the issuer;
- the date, if any, after which and the price or prices at which the offered
debt securities may, in accordance with any optional or mandatory redemption
provisions, be redeemed and the other detailed terms and provisions of those
optional or mandatory redemption provisions;
- if other than denominations of $1,000 and any integral multiple thereof, the
denominations in which the offered debt securities will be issuable;
- if other than the principal amount of the offered debt securities, the portion
of the principal amount of the offered debt securities which will be payable
upon the declaration of acceleration of the maturity of the offered debt
securities;
- the currency of payment of principal, premium, if any, and interest on the
offered debt securities;
- any index used to determine the amount of payment of principal of, premium, if
any, and interest on the offered debt securities;
- whether the provisions described under "Defeasance" apply to the offered debt
securities;
- if the offered debt securities will be issuable only in the form of one or
more global securities as described under "Global Securities" on pages 6 and
7, the depository or its nominee with respect to the series of debt securities
and the circumstances under which a global security may be registered for
transfer or exchange in the name of a person other than the depository or the
nominee; and
- any other special feature of the offered debt securities.
LEGAL OWNERSHIP
STREET NAME AND OTHER INDIRECT HOLDERS
Investors who hold debt securities in accounts at banks or brokers will
generally not be recognized by us as the legal holders of debt
5
securities. This is called holding in "street name." Instead, we would recognize
as the direct holder only the bank or broker, or the financial institution the
bank or broker uses to hold its debt securities. These intermediary banks,
brokers and other financial institutions pass along principal, interest and
other payments on the debt securities, either because they agree to do so in the
agreements with their customers or because they are legally required to do so.
If you hold debt securities in street name, you should check with your own
institution to find out:
- How it handles securities payments and notices.
- Whether it imposes fees or charges.
- How it would handle voting if ever required.
- Whether and how you can instruct it to send you debt securities registered in
your own name so you can be a direct holder as described below.
- How it would pursue rights under the debt securities if there were a default
or other event triggering the need for direct holders to act to protect their
interests.
DIRECT HOLDERS
Our obligations, as well as the obligations of the trustee and those of any
third parties employed by us or the trustee, run only to persons or entities who
are the direct holders of debt securities, such as those who are registered as
holders of debt securities. As noted above, we do not have obligations to you if
you hold in street name or through other indirect means, either because you
choose to hold debt securities in that manner or because the debt securities are
issued in the form of global securities, as described below. For example, once
we make payment to the registered holder, we have no further responsibility for
the payment even if that registered holder is legally required to pass the
payment along to you as a street name customer but fails to do so.
GLOBAL SECURITIES
WHAT IS A GLOBAL SECURITY? A global security is a special type of
indirectly held security, as described above under "Street Name and Other
Indirect Holders." If we choose to issue debt securities in the form of global
securities, the ultimate beneficial owners can only be indirect holders. We do
this by requiring that a global security be registered in the name of a
financial institution we select and by requiring that the debt securities
included in the global security not be transferred to the name of any other
direct holder unless the special circumstances described below occur. The
financial institution that acts as the sole direct holder of the global security
is called the depositary.
Any person wishing to own a debt security included in the global security
must do so indirectly through an account with a broker, bank or other financial
institution that in turn has an account with the depositary. The prospectus
supplement indicates whether your series of debt securities will be issued only
in the form of global securities.
SPECIAL INVESTOR CONSIDERATIONS FOR GLOBAL SECURITIES. As an indirect
holder, an investor's rights relating to a global security will be governed by
the account rules of the investor's financial institution and of the depositary,
as well as general laws relating to securities transfers. We do not recognize
this type of investor as a direct holder of debt securities and instead deal
only with the depositary that holds the global security.
If you are an investor in debt securities that are issued only in the form
of global securities, you should be aware that:
- You ordinarily cannot get debt securities registered in your own name.
- You ordinarily cannot receive physical certificates for your interest in the
debt securities.
- You will be a street name holder and must look to your own bank or broker for
payments on the debt securities and protection of your legal rights relating
to the debt securities. See "Street Name and Other Indirect Holders" on page
5.
- You may not be able to sell interests in the debt securities to some insurance
companies and other institutions that are required by law
6
to own their securities in the form of physical certificates.
- The depositary's policies will govern payments, transfers, exchange and other
matters relating to your interest in the global security. We and the trustee
have no responsibility for any aspect of the depositary's actions or for its
records of ownership interests in the global security. We and the trustee also
do not supervise the depositary in any way.
- The depositary will require that interests in a global security be purchased
or sold within its system using immediate funds for settlement.
SPECIAL SITUATIONS WHEN A GLOBAL SECURITY WILL BE TERMINATED. In a few
special situations described later, the global security will terminate and
interests in it will be exchanged for physical certificates representing debt
securities. After that exchange, the choice of whether to hold debt securities
directly or in street name will be up to you. You must consult your own bank or
broker to find out how to have your interests in debt securities transferred to
your own name, so that you will be a direct holder. The rights of street name
investors and direct holders in the debt securities have been previously
described in the subsections entitled "Street Name and Other Indirect Holders"
on page 5 and "Direct Holders" on page 6.
The special situations for termination of a global security are:
- When the depositary notifies us that it is unwilling, unable or no longer
qualified to continue as depositary,
- When we notify the trustee that we wish to terminate the global security, or
- When an event of default on the debt securities has occurred and has not been
cured. Defaults are discussed later under "Events of Default" on pages 13 and
14.
The prospectus supplement may also list additional situations for terminating a
global security that would apply only to the particular series of debt
securities covered by the prospectus supplement. When a global security
terminates, the depositary, and not we or the trustee, is responsible for
determining the names of the institutions that will be the initial direct
holders. (sections 204 and 305)
IN THE REMAINDER OF THIS DESCRIPTION, "YOU" MEANS DIRECT HOLDERS AND NOT STREET
NAME OR OTHER INDIRECT HOLDERS OF DEBT SECURITIES. INDIRECT HOLDERS SHOULD READ
THE PREVIOUS SUBSECTION ON PAGE 5 ENTITLED "STREET NAME AND OTHER INDIRECT
HOLDERS."
OVERVIEW OF REMAINDER OF THIS DESCRIPTION
The remainder of this description summarizes:
- ADDITIONAL MECHANICS relevant to the debt securities under normal
circumstances, such as how you transfer ownership and where we make payments.
- Your rights in several SPECIAL SITUATIONS, such as if we merge with another
company or if we want to change a term of the debt securities.
- RESTRICTIVE COVENANTS contained in the indenture that limit our ability to
incur liens and other encumbrances on major properties and the voting stock of
some of our U.S. operating subsidiaries and our ability to enter into sale and
leaseback transactions. A particular series of debt securities may have
additional restrictive covenants.
- The circumstances under which we may effect DEFEASANCE of a particular series
of debt securities.
- Events of DEFAULT and your rights if we DEFAULT or experience other financial
difficulties.
- OUR RELATIONSHIP WITH THE TRUSTEE.
ADDITIONAL MECHANICS
FORM, EXCHANGE AND TRANSFER
The debt securities will be issued:
- only in fully registered form
- without interest coupons
7
- unless otherwise indicated in the prospectus supplement, in denominations that
are integral multiples of $1,000. (section 302)
You may have your debt securities broken into more debt securities of
smaller denominations or combined into fewer debt securities of larger
denominations, as long as the total principal amount is not changed. (section
305) This is called an exchange.
You may exchange or transfer debt securities at the office of the trustee.
The trustee acts as our agent for registering debt securities in the names of
direct holders and transferring debt securities. We may change this appointment
to another entity or perform it ourselves. The entity performing the role of
maintaining the list of registered direct holders is called the security
registrar. It will also perform transfers. (section 305)
You will not be required to pay a service charge to transfer or exchange
debt securities, but you may be required to pay for any tax or other
governmental charge associated with the exchange or transfer. The transfer or
exchange will only be made if the security registrar is satisfied with your
proof of ownership. (section 305)
If we have designated additional transfer agents, they are named in the
prospectus supplement. We may cancel the designation of any particular transfer
agent. We may also approve a change in the office through which any transfer
agent acts. (section 1002)
If the debt securities are redeemable and we redeem less than all of the
debt securities of a particular series, we may block the transfer or exchange of
debt securities during the period beginning 15 days before the day we mail the
notice of redemption and ending on the day of that mailing, in order to freeze
the list of holders to prepare the mailing. We may also refuse to register
transfers or exchanges of debt securities selected for redemption, except that
we will continue to permit transfers and exchanges of the unredeemed portion of
any debt security being partially redeemed. (section 305)
PAYMENT AND PAYING AGENTS
We will pay interest to you if you are a direct holder listed in the
trustee's records at the close of business on a particular day in advance of
each due date for interest, even if you no longer own the debt security on the
interest due date. That particular day, usually about two weeks in advance of
the interest due date, is called the regular record date and is stated in the
prospectus supplement. (section 307)
Holders buying and selling debt securities must work out between them how
to compensate for the fact that we will pay all the interest for an interest
period to the one who is the registered holder on the regular record date. The
most common manner is to adjust the sales price of the debt securities to pro
rate interest fairly between buyer and seller. This pro rated interest amount is
called accrued interest.
We will pay interest, principal and any other money due on the debt
securities at the corporate trust office of the trustee in New York City.
(section 1002) That office is currently located at 100 Wall Street, Suite 2000,
New York, NY 10005. You must make arrangements to have your payments picked up
at or wired from that office. We may also choose to pay interest by mailing
checks.
STREET NAME AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS FOR
INFORMATION ON HOW THEY WILL RECEIVE PAYMENTS.
We may also arrange for additional payment offices, and may cancel or
change these offices, including our use of the trustee's corporate trust office.
These offices are called paying agents. We may also choose to act as our own
paying agent. We must notify the trustee of changes in the paying agents for any
particular series of debt securities. (section 1002)
NOTICES
We and the trustee will send notices regarding the debt securities only to
direct holders, using their addresses as listed in the trustee's records.
(sections 101 and 106)
8
Regardless of who acts as paying agent, all money paid by us to a paying
agent that remains unclaimed at the end of two years after the amount is due to
direct holders will be repaid to us. After that two-year period, you may look
only to us for payment and not to the trustee or any other paying agent.
(section 1003)
SPECIAL SITUATIONS
MERGERS AND SIMILAR EVENTS
We are generally permitted under the indenture to consolidate or merge with
another company or firm. We are also permitted to sell or lease substantially
all of our assets to another firm. However, we may not take any of these actions
unless the following conditions, among others, are met:
- Where we merge out of existence or sell or lease substantially all our assets,
the other firm may not be organized under a foreign country's laws, that is,
it must be a corporation, partnership or trust organized under the laws of a
State or the District of Columbia or under federal law and it must agree to be
legally responsible for the debt securities. (section 801)
- The merger, sale of assets or other transaction must not bring about a default
on the debt securities, and we must not already be in default, unless the
merger or other transaction would cure the default. For purposes of this
no-default test, a default would include an event of default that has occurred
and not been cured. A default for this purpose would also include any event
that would be an event of default if the requirements for giving us notice of
our default or our default having to exist for a specific period of time were
disregarded. (section 801)
- It is possible that the merger, sale of assets or other transaction would
cause some of our property to become subject to a mortgage or other legal
mechanism giving lenders preferential rights in our property over other
lenders or over our general creditors if we fail to repay them. We have
promised to limit these preferential rights, called liens, as discussed later
under "Restrictive Covenants-Limitation on Liens on Major Property and U.S.
Operating Subsidiaries." If a merger or other transaction would create any
liens which are not permitted under the indenture, we must grant an equivalent
lien to the direct holders of the debt securities. (sections 801 and 1006)
- If we merge out of existence or sell substantially all our assets and the
other firm becomes the successor to General Mills and is legally responsible
for the debt securities, we will be relieved of our own responsibility for the
debt securities. (section 802)
MODIFICATION AND WAIVER
There are three types of changes we can make to the indenture and the debt
securities.
CHANGES REQUIRING YOUR APPROVAL. First, there are changes that cannot be
made to your debt securities without your specific approval. A list of these
follows:
- change the stated payment due date of the principal or interest on a debt
security;
- reduce any amounts due on a debt security;
- reduce the amount of principal payable upon acceleration of the maturity of a
debt security following a default;
- change the place or currency of payment on a debt security;
- impair your right to sue for payment;
- reduce the percentage of direct holders of debt securities whose consent is
needed to modify or amend the indenture;
- reduce the percentage of holders of debt securities whose consent is needed to
waive compliance with provisions of the indenture or to waive defaults;
- modify any other aspect of the provisions dealing with modification and waiver
of the indenture, except to increase the percentages required or provide that
other provisions of the indenture cannot be changed without the consent of any
direct holder affected by the change. (section 902)
CHANGES NOT REQUIRING APPROVAL. The second type of change does not require
any vote by holders of debt securities. This type is
9
limited to clarifications and certain other changes that would not adversely
affect direct holders of the debt securities. (section 901)
CHANGES REQUIRING A MAJORITY VOTE. Third, we need a vote by direct holders
of debt securities owning a majority of the principal amount of the particular
series affected to obtain a waiver of the restrictive covenants, including the
one described later under "Restrictive Covenants-Limitation on Liens on Major
Property and U.S. Operating Subsidiaries." (section 1008) We also need such a
majority vote to obtain a waiver of any past default, except a payment default
on principal or interest or concerning a provision of the indenture that can't
be changed without the consent of the direct holder. (section 513) In addition,
most other changes to the indenture and the debt securities also require a
majority vote of the direct holders. (section 902)
FURTHER DETAILS CONCERNING VOTING. When taking a vote, we will use the
following rules to decide how much principal amount to attribute to a debt
security:
- For original issue discount securities, we will use the principal amount that
would be due and payable on the voting date if the maturity of those debt
securities were accelerated to that date because of a default.
- For debt securities whose principal amount is not known, for example, because
it is based on an index, we will use a special rule for that debt security
determined by our board of directors or described in the prospectus
supplement.
- For debt securities denominated in one or more foreign currencies or currency
units, we will use the U.S. dollar equivalent.
Debt securities will not be considered outstanding, and therefore will not
be eligible to vote, if we have deposited or set aside money in trust for you
for their payment or redemption. Debt securities will also not be eligible to
vote if they have been fully defeased as described on page 12 under "Full
Defeasance." (section 101)
We will generally be entitled to set any day as a record date for the
purpose of determining the direct holders of outstanding debt securities that
are entitled to vote or take other action under the indenture. (section 301) In
some circumstances, the trustee will be entitled to set a record date for action
by holders.
STREET NAME AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS FOR
INFORMATION ON HOW APPROVAL MAY BE GRANTED OR DENIED IF WE WISH TO CHANGE THE
INDENTURE OR THE DEBT SECURITIES OR REQUEST A WAIVER.
RESTRICTIVE COVENANTS
LIMITATION ON LIENS ON MAJOR PROPERTY AND U.S. OPERATING SUBSIDIARIES
Some of our property may be subject to a mortgage or other legal mechanism
that gives our lenders preferential rights in that property over other lenders,
including you and the other direct holders of the debt securities, or over our
general creditors if we fail to pay them back. These preferential rights are
called liens. In the indenture, we promise not to create, issue, assume, incur
or guarantee any indebtedness for borrowed money that is secured by a mortgage,
pledge, lien, security interest or other encumbrance on
- any flour mill, manufacturing or packaging plant, or research laboratory
located in North America and owned by us or one of our current or future
United States or Canadian operating subsidiaries, or
- any stock or debt issued by one of our current or future United States or
Canadian operating subsidiaries
unless we also secure all the debt securities that are still outstanding under
the indenture equally with the indebtedness being secured. (section 1006) This
promise does not restrict our ability to sell or otherwise dispose of our
interests in any U.S. operating subsidiary.
These requirements do not apply to liens
- existing on February 1, 1996 and any extensions, renewals or replacements of
those liens;
- relating to the construction, improvement or purchase of a flour mill, plant
or laboratory;
10
- in favor of us or one of our U.S. or Canadian operating subsidiaries;
- in favor of governmental units for financing construction, improvement or
purchase of our property;
- existing on any property, stock or debt existing at the time we acquire it,
including liens on property, stock or debt of a U.S. operating subsidiary at
the time we acquire it;
- relating to the sale of our property;
- for work done on our property;
- relating to workers' compensation, unemployment insurance and similar
obligations;
- relating to litigation or legal judgments;
- for taxes, assessments or governmental charges not yet due; and
- consisting of easements or other restrictions, defects in title or
encumbrances on our real property.
We may also avoid securing the debt securities equally with the indebtedness
being secured if the amount of the indebtedness being secured plus the value of
any sale and lease back transactions, as described below, is 15% or less than
the amount of our consolidated total assets minus our consolidated non-interest
bearing current liabilities, as reflected on our consolidated balance sheet.
(section 1006)
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS
In the indenture, we also promise that we and our U.S. operating
subsidiaries will not enter into any "sale and leaseback transactions" on any of
our flourmills, manufacturing or packaging plants or research laboratories
located in North America (referred to in the indenture as "principal
properties") unless we satisfy some restrictions. A sale and leaseback
transaction involves our sale to a lender or other investor of a property of
ours and our lease back of the property from that party for more than three
years, or a sale of a property to, and its lease back for three or more years
from, another person who borrows the necessary funds from a lender or other
investor on the security of the property.
We may enter into a sale and leaseback transaction covering any of our
principal properties only if
1. it falls into the exceptions for liens described above under "Restrictive
Covenants -- Limitations on Liens on Major Property and U.S. Operating
Subsidiaries"; or
2. within 180 days after the property sale, we set aside for the retirement of
funded debt, meaning notes or bonds which mature at or may be extended to a
date more than 12 months after issuance, an amount equal to the greater of:
(a) the net proceeds of the sale of the principal property, or
(b) the fair market value of the principal property sold,
and in either case, minus
(1) the principal amount of any debt securities delivered to the trustee
for retirement within 120 days after the property sale, and
(2) the principal amount of any funded debt, other than debt securities,
voluntarily retired by us within 120 days after the property sale; or
3. the attributable value, as described below, of all sale and leaseback
transactions plus any indebtedness which we incur that, but for the exception
in the last paragraph of "Restrictive Covenants -- Limitations on Liens on
Major Property and U.S. Operating Subsidiaries" above, would have required us
to secure the debt securities equally with it, is 15% or less than the amount
of our consolidated total assets minus our consolidated non-interest bearing
current liabilities, as reflected on our consolidated balance sheet. (section
1007)
We determine the attributable value of a sale and leaseback transaction by
choosing the lesser of (1) and (2):
(1) sale price of X remaining portion of
leased property base term of lease
-----------------
base term of lease
(2) the total obligation of the lessee for rental payments during the remaining
portion of
11
the base term of the lease, discounted to present value at the highest
interest rate on any outstanding series of debt securities. The rental
payments in this calculation do not include amounts for property taxes,
maintenance, repairs, insurance, water rates and other items which are not
payments for the property itself. (section 101)
DEFEASANCE
The following discussion of full defeasance and covenant defeasance will
apply to your series of debt securities only if we choose to have them apply to
that series. If we do so choose, we will state that in the prospectus
supplement. (section 1301)
FULL DEFEASANCE. If there is a change in federal tax law, as described
below, we can legally release ourselves from any payment or other obligations on
the debt securities, called full defeasance, if we put in place the following
arrangements for you to be repaid:
- We must deposit in trust for your benefit and the benefit of all other direct
holders of the debt securities a combination of money and U.S. government or
U.S. government agency notes or bonds that will generate enough cash to make
interest, principal and any other payments on the debt securities on their
various due dates.
- There must be a change in current federal tax law or an IRS ruling that lets
us make the above deposit without causing you to be taxed on the debt
securities any differently than if we did not make the deposit and just repaid
the debt securities ourselves. Under current federal tax law, the deposit and
our legal release from the debt securities would be treated as though we took
back your debt securities and gave you your share of the cash and notes or
bonds deposited in trust. In that event, you could recognize gain or loss on
the debt securities you give back to us.
- We must deliver to the trustee a legal opinion of our counsel confirming the
tax law change described above.
If we ever did accomplish full defeasance, as described above, you would
have to rely solely on the trust deposit for repayment on the debt securities.
You could not look to us for repayment in the unlikely event of any shortfall.
Conversely, the trust deposit would most likely be protected from claims of our
lenders and other creditors if we ever become bankrupt or insolvent. (sections
1302 and 1304)
COVENANT DEFEASANCE. Under current federal tax law, we can make the same
type of deposit described above and be released from some of the restrictive
covenants in the debt securities. This is called covenant defeasance. In that
event, you would lose the protection of those restrictive covenants but would
gain the protection of having money and securities set aside in trust to repay
the debt securities. In order to achieve covenant defeasance, we must do the
following:
- We must deposit in trust for your benefit and the benefit of all other direct
holders of the debt securities a combination of money and U.S. government or
U.S. government agency notes or bonds that will generate enough cash to make
interest, principal and any other payments on the debt securities on their
various due dates.
- We must deliver to the trustee a legal opinion of our counsel confirming that
under current federal income tax law we may make the above deposit without
causing you to be taxed on the debt securities any differently than if we did
not make the deposit and just repaid the debt securities ourselves.
If we accomplish covenant defeasance, the following provisions among others
of the indenture and the debt securities would no longer apply:
- Our promises regarding conduct of our business previously described on pages
10 and 11 under "Restrictive Covenants" and any other covenants applicable to
the series of debt securities and described in the prospectus supplement.
- The condition regarding the treatment of liens when we merge or engage in
similar transactions, as described on page 9 under "Mergers and Similar
Events."
- The Events of Default relating to breach of covenants and acceleration of the
maturity of
12
other debt, described below under "What Is an Event of Default?"
If we accomplish covenant defeasance, you can still look to us for
repayment of the debt securities if there were a shortfall in the trust deposit.
In fact, if one of the remaining Events of Default occurred, such as our
bankruptcy, and the debt securities become immediately due and payable, there
may be a shortfall in the trust deposit. Depending on the event causing the
default, you may not be able to obtain payment of the shortfall. (sections 1303
and 1304)
DEFAULT AND RELATED MATTERS
EQUAL RANKING WITH OUR OTHER UNSECURED CREDITORS
The debt securities are not secured by any of our property or assets.
Accordingly, your ownership of debt securities means you are one of our
unsecured creditors. The debt securities are not subordinated to any of our
other unsecured debt obligations and therefore they rank equally with all our
other unsecured and unsubordinated indebtedness.
EVENTS OF DEFAULT
You will have special rights if an event of default occurs and is not
cured, as described later in this subsection.
WHAT IS AN EVENT OF DEFAULT? For each series of debt securities the term
"event of default" means any of the following:
- We do not pay interest on a debt security within 30 days of its due date.
- We do not pay the principal or any premium on a debt security on its due date.
- We do not deposit money into a separate custodial account, known as a sinking
fund, when such a deposit is due, if we agree to maintain a sinking fund.
- We remain in breach of the restrictive covenants described previously under
"Restrictive Covenants "or any other term of the indenture for 60 days after
we receive a notice of default stating we are in breach. The notice must be
sent by either the trustee or direct holders of at least 25% of the principal
amount of debt securities of the affected series.
- We file for bankruptcy or certain other events of bankruptcy, insolvency or
reorganization occur.
- Any other event of default described in the prospectus supplement occurs.
(section 501)
REMEDIES IF AN EVENT OF DEFAULT OCCURS. In the event of our bankruptcy,
insolvency or other similar proceeding, all of the debt securities of the
affected series will automatically be due and immediately payable. If a
non-bankruptcy event of default has occurred and has not been cured, the trustee
or the direct holders of not less than 25% in principal amount of the debt
securities of the affected series may declare the entire principal amount of all
the debt securities of that series to be due and immediately payable. This is
called a declaration of acceleration of maturity.
A declaration of acceleration of maturity may be canceled by the direct
holders of at least a majority in principal amount of the debt securities of the
affected series, if
- we pay or deposit with the trustee an amount sufficient to pay
- all overdue interest;
- principal and premium, if any, which has become due other than as a
result of the acceleration, plus any interest on that principal;
- interest on overdue interest, if that payment is lawful;
- amounts paid or advanced by the trustee and reasonable trustee
compensation and expenses; and
- all defaults on any restrictive covenants have been waived or cured. (section
502)
Except in cases of default, where the trustee has some special duties, the
trustee is not required to take any action under the indenture at the request of
any direct holders unless the holders offer the trustee reasonable protection
from expenses and liability, called an indemnity. (section 603) If reasonable
indemnity is provided, the direct holders of a majority in
13
principal amount of the outstanding debt securities of the relevant series may
direct the time, method and place of conducting any lawsuit or other formal
legal action seeking any remedy available to the trustee. These majority direct
holders may also direct the trustee in performing any other action under the
indenture. (section 512)
Before you may bypass the trustee and bring your own lawsuit or other
formal legal action or take other steps to enforce your rights or protect your
interests relating to the debt securities, the following must occur:
- You must give the trustee written notice that an event of default has occurred
and remains uncured.
- The direct holders of at least 25% in principal amount of all outstanding debt
securities of the relevant series must make a written request that the trustee
take action because of the default, and must offer reasonable indemnity to the
trustee against the cost and other liabilities of taking that action.
- The trustee must have not received from direct holders of a majority in
principal amount of the outstanding debt securities of that series a direction
inconsistent with the written notice.
- The trustee must have not taken action for 60 days after receipt of the above
notice and offer of indemnity. (section 507)
However, you are entitled at any time to bring a lawsuit for the payment of
money due on your debt security on or after its due date. (section 508)
STREET NAME AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS FOR
INFORMATION ON HOW TO GIVE NOTICE OR DIRECTION TO OR MAKE A REQUEST OF THE
TRUSTEE AND TO MAKE OR CANCEL A DECLARATION OF ACCELERATION.
We will provide to the trustee every year a written statement of certain of
our officers certifying that to their knowledge we are in compliance with the
indenture and the debt securities, or else specifying any default that we know
about. (section 1004)
OUR RELATIONSHIP WITH THE TRUSTEE
The trustee is also trustee under our July 1, 1982 indenture and acts as an
agent for the issuance of our U.S. commercial paper. U.S. Bank National
Association provides cash management and other banking and advisory services to
us in the normal course of business.
PLAN OF DISTRIBUTION
We may sell the debt securities to or through underwriters and also may
sell debt securities directly to other purchasers or through agents.
The distribution of the debt securities offered under the prospectus may
occur from time to time in one or more transactions at a fixed price or prices,
which may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
We may also determine the price or other terms of the debt securities
offered under this prospectus by use of an electronic auction. We will describe
in the related prospectus supplement how any such auction will determine the
price or any other terms, how potential investors may participate in the auction
and the nature of the underwriters' obligations.
In connection with the sale of debt securities, underwriters may receive
compensation from us or from purchasers of debt securities for whom they may act
as agents in the form of discounts, concessions or commissions. Underwriters may
sell debt securities to or through dealers, and those dealers may receive
compensation in the form of discounts, concessions, or commissions from the
underwriters and/or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers and agents that participate in the distribution of
debt securities offered under the prospectus may be underwriters as defined in
the Securities Act. Any underwriters or agents will be identified and their
compensation (including underwriting discount) will be described in the
prospectus supplement. The prospectus supplement will also describe the other
terms of the offering, including any discounts or concessions allowed or
reallowed or paid to
14
dealers and any securities exchanges on which the offered securities may be
listed.
We may have agreements with the underwriters, dealers and agents to
indemnify them against certain civil liabilities, including liabilities under
the Securities Act, or to contribute with respect to payments which the
underwriters, dealers or agents may be required to make as a result of those
certain liabilities.
VALIDITY OF DEBT SECURITIES
WE MAY OFFER
The validity of the debt securities will be passed upon for General Mills
by Elizabeth L. Wittenberg, Associate General Counsel. Ms. Wittenberg owns,
directly and indirectly, shares of General Mills common stock, and has
exercisable options to purchase additional shares of General Mills common stock
granted under General Mills option plans. Davis Polk & Wardwell will issue a
legal opinion as to certain matters for any agents, underwriters or dealers.
EXPERTS
The consolidated financial statements and schedules of General Mills and
its subsidiaries as of May 27, 2001 and May 28, 2000 and for each of the fiscal
years in the three-year period ended May 27, 2001 have been incorporated by
reference in this prospectus and in the registration statement in reliance upon
the reports of KPMG LLP, independent certified public accountants, which reports
are also incorporated by reference in this prospectus and upon the authority of
KPMG LLP as experts in accounting and auditing.
The combined financial statements of The Pillsbury Company, its
subsidiaries and its related entities, a business of Diageo plc, as of June 30,
2001 and 2000 and for each of the fiscal years in the three-year period ended
June 30, 2001 have been incorporated by reference in this prospectus and in the
registration statement in reliance upon the report of KPMG LLP, independent
certified public accountants, which report is also incorporated by reference in
this prospectus and upon the authority of KPMG LLP as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE
INFORMATION
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 web site at http://www.sec.gov. You may also read and
copy any document we file 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.
The SEC allows us to incorporate by reference the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is an
important part of this prospectus, and information that we file later with the
SEC will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until we sell all of the debt securities described in this prospectus:
- Annual Report on Form 10-K for the year ended May 27, 2001;
- Quarterly Reports on Form 10-Q for the quarters ended November 25, 2001 and
August 26, 2001;
- Current Report on Form 8-K filed on November 2, 2001, as amended by Current
Reports on Form 8-K/A filed on November 5, 2001, January 11, 2002 and January
29, 2002;
- Current Report on Form 8-K filed November 15, 2001; and
- Current Report on Form 8-K filed February 4, 2002.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Corporate Secretary
Number One General Mills Blvd.
Minneapolis, MN 55426
(763) 764-2167
15
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these debt securities in any state where the offer is not permitted.
You should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of those
documents.
16
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$135,000,000
(GENERAL MILLS LOGO)
GENERAL MILLS, INC.
3.901% NOTES DUE 2007
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PROSPECTUS SUPPLEMENT
November 15, 2002
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BANC OF AMERICA SECURITIES LLC
JPMORGAN
FLEET SECURITIES, INC
HSBC
WACHOVIA SECURITIES
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