SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 8, 2004
GENERAL MILLS, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-1185 41-0274440
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(State of Incorporation) (Commission (I.R.S. Employer
File Number) Identification No.)
Number One General Mills Boulevard
Minneapolis, Minnesota 55426
(Mail: P.O. Box 1113) (Mail: 55440)
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (763) 764-7600
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4 (c))
ITEM 1.01. ENTRY INTO MATERIAL DEFINITIVE AGREEMENT.
On October 8, 2004, General Mills, Inc. (the
"Company") completed a series of concurrent transactions as previously
disclosed in the two Prospectus Supplements dated October 4, 2004,
which were filed with the Securities and Exchange Commission on October
6, 2004. These transactions included: (a) the offering by Diageo US
Limited of shares of common stock of the Company ("Common Stock"), (b)
the offering by Lehman Brothers Holdings Inc. ("Lehman Brothers") of
its 6 1/4% Exchangeable Notes due 2007 (the "PIES"), which are
mandatorily exchangeable for shares of Common Stock, and (c) the sale
by a wholly-owned subsidiary of the Company to an affiliate of Lehman
Brothers (the "Investor") of 835,000 Series B-1 Preferred Membership
Interests (the "Series B-1 Membership Interests") in General Mills
Cereals, LLC ("GMC") held by such subsidiary.
In connection with the issuance by Lehman Brothers of
the PIES, the Company, Lehman Brothers and a separate affiliate of
Lehman Brothers entered into a Forward Purchase Contract (the "Forward
Contract"), pursuant to which the Company is obligated to deliver to
such affiliate between approximately 14.3 million and 17.1 million
shares of Common Stock, subject to adjustment under certain
circumstances. These shares will generally be deliverable by the
Company in October 2007, in exchange for $750 million in cash or, in
certain circumstances, securities of an affiliate of Lehman Brothers.
As noted above, a wholly-owned subsidiary of General
Mills sold 835,000 Series B-1 Membership Interests to the Investor in
exchange for $835 million. In connection with this sale, on October 8,
2004, GMC and its existing members entered into a Third Amended and
Restated Limited Liability Company Agreement of GMC (the "LLC
Agreement"), setting forth, among other things, the terms of Series B-1
Membership Interests and the rights of the Investor and the other
members, which consist of RBDB, Inc., a third party investor ("RBDB")
that acquired 150,000 Class A Membership Interests in GMC (the "Class A
Membership Interests") in May 2002 in exchange for $150 million, as
well as four wholly-owned subsidiaries of the Company.
Under the terms of the LLC Agreement, the Class A
Membership Interests held by RBDB receive quarterly preferred
distributions at a floating rate equal to (i) the sum of three-month
LIBOR plus 90 basis points, divided by (ii) 0.965. The LLC Agreement
requires that the rate of the distributions on the Class A Membership
Interests be adjusted by agreement between RDBD and GMC every five
years, beginning in June 2007. If GMC and the investors fail to
mutually agree on a new rate of referred distributions, GMC must
remarket the Class A Membership Interests to set a new distribution
rate. Upon a failed remarketing, the rate over LIBOR will be increased
by 75 basis points until the next scheduled remarketing date. GMC,
through its managing member, may elect to re-
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purchase all of the Class A Membership Interests at any time for an
amount equal to the holder's capital account, plus any applicable make
whole amount. Under certain circumstances, GMC also may be required to
be dissolved and liquidated, including, without limitation, the
bankruptcy of GMC or its subsidiaries, failure to deliver the preferred
distributions, failure to comply with portfolio requirements, breaches
of certain covenants, lowering of the Company's senior debt rating
below either Baa3 by Moody's or BBB- by Standard & Poor's and a failed
attempt to remarket the Class A Membership Interests as a result of a
breach of GMC's obligations to assist in such remarketing. In the event
of a liquidation of GMC, each member of GMC would receive the amount
of their then capital account balance. The managing member may avoid
liquidation in most circumstances by exercising an option to purchase
the Class A Membership Interests.
The Series B-1 Membership Interests are entitled to
receive quarterly preferred distributions at a fixed rate of 4.5% per
year, which is scheduled to be reset to a new fixed rate through a
remarketing in October 2007. Beginning in October 2007, the managing
member of GMC may elect to repurchase the Series B-1 Membership
Interests for an amount equal to the Investor's then capital account
balance plus any applicable whole amount.
Upon the occurrence of certain exchange events (as
described below), the Series B-1 Membership Interests will be exchanged
for shares of perpetual preferred stock of the Company. An exchange
will occur upon the senior unsecured debt rating of the Company falling
below either Ba3 as rated by Moody's Investors Service, Inc. or BB- as
rated by Standard & Poor's or Fitch, Inc., a bankruptcy or liquidation
of the Company, a default on any senior indebtedness of the Company
resulting in an acceleration of indebtedness having an outstanding
principal balance in excess of $50 million, the Company failing to pay
a dividend on its common stock in any fiscal quarter, or a liquidating
event under the LLC Agreement.
If GMC fails to make a required distribution to the
holders of Series B-1 Membership Interests when due, the Company will
be restricted from paying any dividend (other than dividends in the
form of shares of common stock) or other distributions on shares of its
common or preferred stock, and may not repurchase or redeem shares of
its common or preferred stock, until all such accrued and undistributed
distributions are paid to the holders of the Series B-1 Membership
Interests. If the required distributions on the Series B-1 Membership
Interests remain undistributed for six quarterly distribution periods,
the managing member will form a nine-member board of directors to
manage GMC. Under these circumstances, the holder of the Series B-1
Membership Interests will have the right appoint one director. Upon the
payment of the required distributions, the board of directors will be
dissolved.
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Currently, all interests in GMC, other than the
Series B-1 Membership Interests and 150,000 Class A Membership
Interests, but including all managing member interests, are held by
wholly-owned subsidiaries of the Company.
As noted above, if GMC fails to make a required
distribution to the holders of the Series B-1 Membership Interests when
due, the Company would generally be restricted from making dividends on
and repurchases of its capital stock. This restriction is set forth in
a Dividend Restriction Agreement, dated as of October 8, 2004, which
the Company executed and delivered to Wells Fargo Bank, National
Association, as paying agent on the Common Stock.
ITEM 2.01. COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
The disclosure set forth in Item 1.01 above relating
to the sale of Series B Membership Interests in GMC in incorporated
herein by reference.
ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES.
The disclosure set forth in Item 1.01 above relating
to the Forward Purchase Contract for the sale of Common Stock is
incorporated herein by reference.
ITEM 3.03. MATERIAL MODIFICATION OF RIGHTS OF SECURITY HOLDERS.
The disclosure set forth in Item 1.01 above relating
to the Dividend Restriction Agreement is incorporated herein by
reference.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Dated: October 14, 2004
GENERAL MILLS, INC.
By: /s/ Siri S. Marshall
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Name: Siri S. Marshall
Title: Senior Vice President, Corporate
Affairs, General Counsel and
Secretary
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