DARDEN RESTAURANTS, INC. FLEXCOMP PLAN
As Amended and Restated Effective January 1, 1998
DARDEN RESTAURANTS, INC. FLEXCOMP PLAN
ARTICLE I INTRODUCTION
Section 1.1 Purpose of Plan. Darden Restaurants, Inc. (formerly known as
"General Mills Restaurants, Inc.") hereby adopts the Darden Restaurants. Inc.
FlexComp Plan (the "Plan") for a select group of the key management and highly
compensated employees of the Company as a means of providing bonus income and a
method for sheltering a portion of an eligible individual's income from current
taxation by providing (i) current bonus income (referred to herein as "FlexComp
Awards") on an annual basis and providing a means by which an eligible
individual may elect to defer the payment of all or a portion of his or her
FlexComp Award for a period of one or more years, and (ii) a means by which an
eligible individual may elect to defer the payment of all or a portion of his or
her salary and/or applicable bonus (in addition to his FlexComp Awards) for a
period of one or more years. In addition, this Plan is intended to be a
successor Plan with respect to certain liabilities on behalf of certain
individuals who had deferred compensation accounts under the General Mills
Restaurants, Inc. FlexComp Plan, the General Mills, Inc. Deferred Compensation
Plan and/or the Supplemental Savings Plan of General Mills, Inc. immediately
prior to the Effective Date, which liabilities were transferred to this Plan as
a result of the spin-off of General Mills Restaurants, Inc. from General Mills,
Inc.
Section 1.2 Effective Date of Plan. This Plan is a successor plan to the
plans named below as of the Effective Date. This Plan is amended, effective
January 1, 1996, to allow for the deferral of salary and bonuses with respect to
eligible individuals. The original effective date of the predecessor plans, from
which liabilities are transferred to this Plan, are as follows:
(a) The original effective date of the General Mills Restaurants, Inc.
FlexComp Plan was June 1, 1994;
(b) The original effective date of the General Mills, Inc. Deferred
Compensation Plan was May 1, 1984; and
(c) The original effective date of the Supplemental Savings Plan of
General Mills, Inc. was July 25, 1983.
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ARTICLE II
DEFINITIONS
Section 2.1 Code shall mean the Internal Revenue Code of 1986, as amended
from time to time.
Section 2.2 Committee shall mean the Minor Amendment Committee of the Board
of Directors of the Company or its delegate.
Section 2.3 Company shall mean Darden Restaurants, Inc. and any of its
subsidiaries or affiliated business entities as shall be authorized to
participate in the Plan by the Board, or its delegate.
Section 2.4 Deferred Comp Participant shall mean a Participant who is
eligible under Section 3.3 to defer all or a portion of his or her compensation
(including salary and/or bonuses) as described in Section 4.4.
Section 2.5 DSP shall mean the Darden Savings Plan (formerly the "Profit
Sharing and Savings Plan for Darden Restaurants, Inc.).
Section 2.6 Effective Date shall mean May 29, 1995.
Section 2.7 FlexComp Award Participant shall mean a Participant who is
eligible under Section 3.2 for a FlexComp Award under Section 4.1 and deferral
of that award under Section 4.3.
Section 2.8 Management Incentive Plan shall mean the plan adopted by Darden
Restaurants, Inc. for key management employees.
Section 2.9 Minor Amendment Committee shall mean the Minor Amendment
Committee, appointed by the Board of Directors of Darden Restaurants, Inc.
Section 2.10 Participant shall mean any employee of the Company who meets
the eligibility requirements for a deferral under this Plan as set forth in
Article III.
Section 2.11 Plan Year shall mean the twelve-month period ending each May
31.
Section 2.12 Retirement Plan shall mean the Retirement Income Plan of
Darden Restaurants, Inc. (formerly the "Pension Plan for Salaried Employees of
General Mills Restaurants, Inc. ").
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Section 2.13 Supplemental Savings Plan shall mean the Supplemental Savings
Plan of General Mills, Inc. under which certain employees of General Mills, Inc.
or one of its affiliates had an account balance as of the Effective Date, which
liabilities were transferred to this Plan as of the Effective Date, or, with
respect to individuals who became employees of the Company after the Effective
Date, but before the one-year anniversary of the Effective Date, on said
one-year anniversary of the Effective Date.
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ARTICLE III
ELIGIBILITY FOR AWARDS AND DEFERRALS
Section 3.1 Participation. An individual shall be a Participant in this
Plan only if he or she satisfies any of the eligibility criteria set forth in
Section 3.2 or Section 3.3. Upon becoming a Participant under Section 3.2 or
Section 3.3, such an individual shall be permitted to participate solely for the
deferral and award provisions of this Plan for which he or she has satisfied the
eligibility criteria. Notwithstanding the foregoing, in no event may a
Participant defer any amounts under this Plan during a period when the
individual is receiving any amounts paid pursuant to a severance plan or
arrangement or a special service allowance maintained by the Company.
Section 3.2 FlexComp Award Participants. An individual who has completed
one year of service with the Company (including service with General Mills, Inc.
prior to the Effective Date) shall be eligible to become a FlexComp Award
Participant in the FlexComp Award feature of this Plan (including the deferral
of such Award) for a Plan Year, if such individual:
(a) is designated as eligible to participate hereunder by the Minor
Amendment Committee (or its designee);
(b) is a highly compensated employee (as defined in Code Section 414(q)
and the regulations and other guidance issued thereunder) for the
current DSP and Retirement Plan plan years (or, within the last two
plan years of the DSP and the Retirement Plan was a highly compensated
employee) or is employed at a salary which, on an annual basis, is
anticipated to exceed $80,000 (adjusted for increases in the cost of
living at the same time and in the same manner permitted under Code
Section 415(d));
(c) is either employed by the Company or receiving benefits under a
long-term disability income plan of the Company ("LTD Plan") on or
after June 1, 1994;
(d) is not an active participant in the Retirement Plan, the DSP, or any
other tax-qualified retirement plan sponsored or maintained by the
Company; and
(e) would be entitled to accrue benefits under the Retirement Plan and be
entitled to have contributions made under the DSP (or, if the
individual is receiving benefits from an LTD Plan, would be entitled
to accrue benefits under the Retirement Plan) if such plans did not
have restrictions on participation by highly compensated employees or
employees whose annualized salary as of his date of hire exceeds
$80,000 (as adjusted).
Section 3.3 Deferred Comp Participants. Effective January 1, 1996, an
individual shall be eligible to to become a Deferred Comp Participant in the
deferred compensation features of
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this Plan (other than those deferral features applicable to FlexComp Awards) for
any Plan Year, if he or she:
(a) is an officer;
(b) is a highly compensated employee (as defined in Code Section
414(q) and the regulations and other guidance issued thereunder)
under the DSP and the Retirement Plan for the DSP and Retirement
Plan plan years that occur within the Plan Year or was a highly
compensated employee during the preceding two plan years of the
DSP and the Retirement Plan or is employed at a salary which, on
an annual basis, is anticipated to exceed $80,000 (adjusted for
increases in the cost of living at the same time and in the same
manner permitted under Code Section 415(d)); or
(c) after having become eligible under (a) or (b) above for a prior
Plan Year, the individual would have been a highly compensated
employee under the DSP or the Retirement Plan for the DSP or
Retirement Plan plan year ending within the Plan's Plan Year (as
defined in Code Section 414(q) and the regulations and other
guidance issued thereunder) had the individual's compensation
included all amounts that the individual deferred under this Plan
other than deferrals, if any, of the FlexComp Awards.
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ARTICLE IV
FLEXCOMP AWARDS AND PLAN DEFERRALS
Section 4.1 Payment of Annual FlexComp Award. A FlexComp Award Participant
who: (i) as of the last day of a Plan Year, is actively employed by the Company
or receiving benefits under an LTD Plan; or (ii) terminates employment during a
Plan Year due to "retirement" (as that term is defined under the Retirement
Plan) or death, shall be paid any FlexComp Award that he or she may become
entitled to receive for the Plan Year (as determined under Section 4.2) in cash
as soon as practicable following the end of such Plan Year. A FlexComp Award
Participant who terminates during a Plan Year for any reason other than
"retirement" (as defined under the Retirement Plan) or death shall be paid any
FlexComp Award that he or she may become entitled to receive for the Plan Year
in cash as soon as practicable after the end of the Plan Year following his or
her termination of employment.
Section 4.2 Amount of Annual FlexComp Award. A FlexComp Award Participant
shall be entitled to an annual FlexComp Award, the amount of which shall be
determined under the following formula: ["X" (a DSP factor) plus the product of
"Y" (an age-based factor) and "Z" (a service-based factor)] times Current
Compensation. The determination of the appropriate factors and the definitions
of the relevant terms are set forth below:
(a) X, the DSP factor, is based on the Participant's lost DSP
matching contributions, and, equals:
(1) 3% for periods before October 1, 1997; and
(2) a variable amount, determined in the Company's discretion,
but which percentage shall be applied consistently to all
suchParticipants, between 1.5% and 6% for periods on
and after October 1, 1997.
(b) Y, the age-based factor is 1.085/\ (the Participant's age minus
30), with the Participants age being determined as of the last
day of the Plan Year, unless the Participant terminates during
the Plan Year for any reason other than "retirement" (as defined
under the Retirement Plan) or death, in which case the
Participant's age shall be determined as of his or her date of
termination.
(c) Z, the service-based factor is equal to 1.8 + (.02 x the
Participant's years of credited service under the Retirement Plan
(including years of service credited under the Pension Plan for
Hourly Employees of General Mills Restaurants, Inc., if such
service would have been included under the portability provisions
of the Retirement Plan had the Participant been an active
participant in the Retirement Plan at the time of the FlexComp
Award) and under the Retirement Income Plan of General Mills,
Inc. during periods when the Participant was entitled to accrue
benefits thereunder before first becoming eligible to participate
in this Plan).
(d) The product of Y and Z shall not be less than 2%, or greater than
20%.
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(e) The Participant's Current Compensation is determined solely for
the period during which the Participant was ineligible to accrue
benefits under the Retirement Plan or the Retirement Income Plan
of General Mills, Inc. and is the "Earnable Compensation" that
would have been recognized under the Retirement Plan for such
period, without regard to any limitations on compensation imposed
under the Code. Notwithstanding the preceding sentence, the
following special rules shall apply in determining Current
Compensation:
(1) Any annual incentive compensation that is based on fiscal
year performance shall be considered Current Compensation
for the Plan Year in which it accrues, and any incentive
compensation that is not based on fiscal year performance
shall be considered Current Compensation for the Plan Year
in which paid.
(2) In the case of a Participant who is totally and permanently
disabled and who is receiving long-term disability benefits
from an LTD Plan, Current Compensation shall include
"hypothetical earnings" based on the greater of (l) the
Participant's base salary rate at the time the disability
occurred, or (2) the Participant's eligible earnings for the
calendar year immediately prior to the onset of the
disability, but shall not include "hypothetical earnings"
for any period after the earlier of (A) the date the
Participant attains age 65, or (B) the date the Participant
is no longer eligible to receive benefits under an LTD Plan.
(3) Current Compensation shall not include any amounts paid
pursuant to a severance plan or arrangement or a special
service allowance.
(4) Any amounts attributable to sign-on bonuses or special
project bonuses shall not be considered Current Compensation
for purposes of determining the amount of any FlexComp Award
(although such amounts shall be included for determining an
individual's compensation for purposes of Section 3.3(c),
whether or not deferred).
(5) Current Compensation shall not include amounts paid prior to
the date of a Participant's first anniversary of employment,
unless such Participant was hired prior to November 1, 1994.
(f) In the event a Participant terminates employment with the Company
during the Plan Year for any reason other than "retirement" (as
defined under the Retirement Plan) or death, the Participant
shall be entitled to a FlexComp Award for the portion of the Plan
Year in which he or she is employed, based on his or her Current
Compensation for the partial Plan Year.
Section 4.3 Deferral of Annual FlexComp Award. Notwithstanding Section 4.1,
any FlexComp Award Participant may elect to defer up to 100% (in a whole
percentage) of any
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FlexComp Award that he or she may become entitled to receive for a Plan Year.
Any such election shall apply to the specified percentage of the Participant's
FlexComp Award for the Plan Year, provided the Participant completes and submits
to the Company a deferral election form no later than the December 31 within
such Plan Year. If a Participant will first become eligible to participate in
the FlexComp Plan after December 31 of a Plan Year but prior to the end of such
Plan Year, such Participant may make a deferral election conditioned on the
granting of a FlexComp Award for such Plan Year (a "Conditional Election"), if
made prior to December 31st of that Plan Year. Such Conditional Election shall
apply to the FlexComp Award, if any, made to the Participant for such Plan Year.
The Participant's deferral percentage election shall remain in effect with
respect to any FlexComp Awards for future Plan Years, until the Participant
changes such election by completing and submitting to the Company a new deferral
election form on or before any subsequent December 31. Any such new election
shall apply to the specified percentage of the Participant's FlexComp Award for
the Plan Year in which such December 31 falls and for future Plan Years until
the Participant next changes his or her election. Notwithstanding the foregoing,
the amount of any deferral may not exceed the gross amount of the Participant's
FlexComp Award reduced by any tax required to be withheld from such amounts
under Code Section 3101 (a) and (b) or any state or local statute. Further,
notwithstanding any prior deferral election, if the Participant terminates prior
to the date of any FlexComp Award, then any deferral election made with respect
to such FlexComp Award shall not become effective.
Section 4.4 Salary, Incentive, and Bonus Deferral Elections.
(a) Elections by Officers. A Deferred Comp Participant who is an officer
of the Company may make the following deferral elections:
(1) Base Compensation. Such Participant may make an initial
election to defer up to 15% (in a whole percentage) of his
or her base compensation by completing and submitting to the
Company a deferral election form no later than 30 days after
first becoming a Deferred Comp Participant. Such election
shall apply to the Participant's base compensation
attributable to services performed after the election and
before the beginning of the next calendar year. That initial
deferral election shall continue to apply with respect to
all future base compensation until the election is changed
by the Participant. The Participant may elect to modify any
deferral election of base compensation for the remainder of
any calendar year or any future year by providing written
notice to the Company at such time and in such manner as
determined by the Minor Amendment Committee (or its
delegate). Any such change shall be effective as soon as
practicable after the end of the week following the week
after the Company's receipt of the Participant's written
notice of change.
(2) Management Incentive Plan Bonus Deferral. Such Participant
may elect to defer up to 100% (in a whole percentage) of his
or her Management Incentive Plan incentive compensation by
completing and submitting to the Company a deferral election
form no later than the earlier of: (i) the
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date which is thirty (30) days after first becoming eligible
to participate in the Deferred Compensation feature, or (ii)
the sixtieth (60th) day preceding the end of the Company's
fiscal year. Such deferral election shall apply to all
future Management Incentive Plan incentive compensation
payments until changed for a future Plan Year by the
Participant in writing. A Participant may elect to change
his or her deferral election of incentive compensation by
providing written notice to the Company no later than the
sixtieth (60th) day immediately preceding the Company's
fiscal year for which such incentive compensation would
otherwise be payable. Notwithstanding the foregoing, the
amount of any deferral may not exceed the gross amount of
the Participant's incentive compensation reduced by any tax
required to be withheld from such amounts under Code Section
3101 (a) and (b) or any state or local statute. Further,
notwithstanding any prior deferral election, if the
Participant terminates prior to the date of any incentive
compensation award, then any deferral election made with
respect to such incentive compensation award shall not
become effective.
(b) Elections by All Other Participants. A Deferred Comp Participant who
is not an officer of the Company may make the following deferral
elections:
(1) Deferrals of Earnable Compensation. Such Participant may
elect to defer up to 15% (in a whole percentage) of his or
her "earnable compensation" (as such term is defined under
the DSP) by completing and submitting to the Company a
deferral election form no later than 30 days after first
becoming eligible to participate in the Deferred
Compensation feature. Such election shall apply to the
Participant's "earnable compensation" attributable to
services performed after the election and shall remain in
effect until changed by the Participant. A Participant may
change his or her deferral election of earnable compensation
for any future period by providing written notice to the
Company on such forms as prescribed by the Minor Amendment
Committee or its delegate. Any such change shall be
effective as soon as practicable after the end of the week
following the week after the Company's receipt of the
Participants written notice.
(2) Bonus for Operations. Such Participant may elect to defer up
to 15% (in a whole percentage) of his or her operations
bonus by completing and submitting to the Company a deferral
election form no later than the earlier of: (i) the date
which is thirty (30) days after first becoming eligible to
participate in the Deferred Compensation feature, or (ii)
the forty-fifth (45th) day preceding the end of the
applicable bonus period. Such deferral election shall apply
to all future operations bonuses until changed by the
Participant in writing. A Participant may elect to change
his or her deferral election of future operations bonuses by
providing written notice to the Company no later than the
forty-fifth (45th) day preceding the end of the next
applicable bonus period. Notwithstanding
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the foregoing, the amount of any deferral may not exceed the
gross amount of the Participant's operations bonus reduced
by any tax required to be withheld from such amounts under
Code Section 3101 (a) and (b) or any state or local statute.
Further, notwithstanding any prior deferral election, if the
Participant terminates prior to the date of any award of an
operations bonus, then any deferral election made with
respect to such bonus shall not become effective.
(3) Management Incentive Plan Bonus. Such Participant may elect
to defer up to 15% (in a whole percentage) of his or her
Management Incentive Plan bonus, provided the Participant
completes and submits to the Company a deferral election
form no later than the earlier of: (i) the date which is
thirty (30) days after first becoming eligible to
participate in the Deferred Compensation feature, or (ii)
the sixtieth (60th) day preceding the end of the applicable
bonus period. Such deferral election shall apply to all
future Management Incentive Plan bonuses until changed by
the Participant in writing. A Participant may elect to
change his or her deferral election of future Management
Incentive Plan bonuses by providing written notice to the
Company no later than the sixtieth (60th) day preceding the
end of the next applicable Plan Year. Notwithstanding the
foregoing, the amount of any deferral may not exceed the
gross amount of the Participant's Management Incentive Plan
bonus reduced by any tax required to be withheld from such
amounts under Code Section 3101 (a) and (b) or any state or
local statute. Further, notwithstanding any prior deferral
election, if the Participant terminates prior to the date of
any award of a Management Incentive Plan bonus, then any
deferral election made with respect to such bonus shall not
become effective.
(c) Special Bonuses. Effective with respect to bonuses awarded on or after
January 1, 1996, any Deferred Comp Participant may elect to defer up
to 100% (in a whole percentage) of: (i) any "sign-on bonus" that may
become payable to such Participant by completing and submitting to the
Company a deferral election form no later than his or her date of
hire, and (ii) any "special project bonus" that the Senior Vice
President of Personnel, in his or her sole discretion, may award to
such Participant by completing and submitting to the Company a
deferral election form within 30 days of receiving from the Company a
written communication regarding the goals and objectives that must be
attained in order to earn such special project bonus. Notwithstanding
the foregoing, the amount of any deferral under this subsection may
not exceed the gross amount of the applicable bonus reduced by any tax
required to be withheld from such amounts under Code sections 3101 (a)
and (b) or any state or local statute. Further, notwithstanding any
prior deferral election, if the Participant terminates prior to the
date of any award of a sign-on or special project bonus, then any
deferral election made with respect to such bonus shall not become
effective.
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(d) Bridge Period Benefit Amount and Restricted Stock Amount. In addition
to the deferral elections under subsections (a), (b) and (c), a
Deferred Comp Participant may elect to defer an amount of his or her
base compensation for calendar years 1998 and 1999, which amount is
equivalent to a specified percentage (in a whole percentage) of his or
her "Bridge Period Benefit Amount," provided, however, that such
election shall not be effective for base compensation earned prior to
September 1, 1998. The Participant's Bridge Period Benefit Amount
shall equal (i) the taxable amounts paid to the Participant under the
Darden Restaurants, Inc. Bridge Period Benefit Plan and the Darden
Restaurants, Inc. Bridge Period Retirement Plan, plus (ii) the amounts
realized by the Participant on his or her exercise of all or any
portion of the Stock Option granted under such plans prior to December
31, 1999. In addition, a Participant may elect to defer an amount of
his or her: (i) base compensation and Management Incentive Plan
incentive compensation award if the Participant is an officer of the
Company, (ii) earnable compensation, operations bonus and Management
Incentive Plan incentive compensation award if the Participant is not
an officer of the Company, and/or (iii) special bonuses, which amount
is equivalent to a specified percentage (in a whole percentage) of his
or her "Restricted Stock Amount." The Participant's Restricted Stock
Amount shall equal the value of the Participant's restricted stock
that vests in the year such base compensation, incentive compensation,
earnable compensation, or bonus is earned. Any such election under
this subsection (d) shall be made by completing and submitting to the
Company a deferral election form that shall apply to base compensation
or earnable compensation that would otherwise be payable at least 30
days after such form is submitted to the Company and to incentive
compensation and operations and special bonuses that are not
determinable prior to at least 30 days after such form is submitted to
the Company, pursuant to rules established by the Company. A
Participant may change his or her deferral election of base
compensation, earnable compensation and/or incentive compensation
(including operations and special bonuses) under this subsection (d)
by providing written notice to the Company. Any such change shall
apply to base compensation or earnable compensation that would
otherwise be payable as soon as practicable after the end of the week
following the week after the Company's receipt of the Participant's
written notice and to incentive compensation (including operations and
special bonuses) that is not determinable prior to at least 30 days
after the Company receives the Participant's written notice, pursuant
to rules established by the Company. Notwithstanding the foregoing,
the amount of any deferral under this subsection (d) may not exceed
the gross amount of the Bridge Period Benefit Amount and/or Restricted
Stock Amount reduced by any tax required to be withheld from such
amounts under Code Section 3101 (a) and (b) or any state or local
statute. Further, notwithstanding any prior deferral election, if the
Participant terminates prior to the effective date of any deferral
under this Section 4.3(d), then any deferral election made shall not
become effective.
Section 4.5 Short-Term Deferrals. Notwithstanding the foregoing provisions
of this Article IV, the Company may permit a Participant to elect to defer all
or part of the Participant's incentive compensation award, if any, to a date
certain selected by the Company within the taxable year it would otherwise be
paid, upon written notice to the Company received by December 31 of the
preceding calendar year. Interest shall be credited on such deferred amount at a
rate selected by the Company and shall be communicated to the Participant at the
same time the availability of any such short-term deferral opportunity is
communicated to Participants.
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ARTICLE V
ESTABLISHMENT OF ACCOUNTS AND CREDITS TO ACCOUNTS
Section 5.1 Deferred Accounts and Rates of Return on Deferred Accounts. A
deferred compensation account ("Deferred Account") shall be established on
behalf of each Participant with respect to whom an amount is deferred under
Section 4.4 of this Plan, including amounts transferred in accordance with
Appendix A. The amount of a Participant's deferrals under this Plan shall be
credited to such Participant's Deferred Account as soon as practicable after the
amount would otherwise have been paid in the absence of the deferral election.
Effective January 1, 1998, each Participant's Deferred Account shall be credited
daily with a "rate of return" on the total deferred amounts credited to the
Participant's Deferred Account and a Participant may make separate elections
with respect to "rates of return" for past and future deferrals. Such "rates of
return" are described in Section 5.3.
Section 5.2 FlexComp Accounts and Rates of Return on Amounts in FlexComp
Accounts. A deferred FlexComp Award account ("FlexComp Account") shall be
established on behalf of each Participant who elects to defer a percentage of
his or her FlexComp Awards. The amount of a Participant's deferred FlexComp
Awards shall be credited to such Participant's FlexComp Account as soon as
practicable after the amount would otherwise have been paid in the absence of a
deferral election. Effective January 1, 1998, each Participant's FlexComp
Account shall be credited daily with a "rate of return" on the total deferred
amounts credited to the Participant's FlexComp Account and a Participant may
make separate elections with respect to "rates of return" for past and future
deferrals. Such "rates of return" are described in Section 5.3.
Section 5.3 Rates of Return. The "rates of return" credited to a
Participant's accounts under Sections 5.1 and 5.2 shall be based upon the actual
investment performance of funds in the DSP, or at such other rates as may be
made available to the Participant from time to time pursuant to the provisions
of the Plan. Effective June 1, 1997, a Participant may elect to have the "rate
of return" credited to his or her accounts established or maintained under this
Plan reflect any of the following rates:
(a) the rate of return as from time to time earned by the Stable Capital
Fund of the DSP;
(b) the rate of return as from time to time earned by the Total Return
Fund of the DSP;
(c) the rate of return as from time to time earned by the Equity Fund of
the DSP;
(d) the rate of return as from time to time earned by the Foreign Fund of
the DSP;
(e) the rate of return as from time to time earned by the Small Capital
Stock of the DSP:
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(f) the rate of return as from time to time earned by the Darden Stock
Fund of the DSP; or
(g) any other rates of return of other funds or portfolios established
under a qualified benefit plan maintained by the Company which the
Committee may establish as an available rate of return under this
Plan.
The Committee may delete funds, on a prospective basis, by notifying all
Participants whose Accounts include rates of return based on such funds, in
advance, and soliciting elections for transfer to other rates of return then
available to such Participants.
Participants may elect to have any combination of the above "rates of
return" accrue on amounts in their accounts, from 1% to 100%, provided that the
sum of the percentages attributable to such rates equals 100%. A Participant may
change the "rate(s) of return" to be credited to his or her accounts, on a daily
basis, by notifying the Committee or its delegate, at such time and in such
manner as approved by the Committee or its delegate. Effective January 1, 1998,
each Participant's accounts will be credited daily with the "rate(s) of return"
elected by the Participant until the amount in each Participant's Accounts is
distributed to the Participant on the distribution date(s) elected by the
Participant. Each Participant shall receive a quarterly statement of the balance
of his or her accounts.
Section 5.4 Impact on Other Benefit Plans. The Company may maintain life
and/or disability plans under which benefits earned or payable are related to a
Participant's earnings. Any such benefits will generally be based upon the
earnings that a Participant would have earned in a given calendar year in the
absence of any deferral hereunder.
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ARTICLE VI
PAYMENT OF ACCOUNTS
Section 6.1 Hardship Distributions. At any time prior to the time an amount
is otherwise payable hereunder, an active Participant may request a distribution
of deferred amounts on account of the Participant's financial hardship, subject
to the following requirements:
(a) Such distribution shall be made, in the sole discretion of the Minor
Amendment Committee or its delegate, if the Participant has incurred
an unforeseeable emergency.
(b) For purposes of this plan, an "unforeseeable emergency" shall mean an
unanticipated emergency that is caused by an event beyond the control
of the Participant and that would result in severe financial hardship
to the Participant resulting from a sudden and unexpected illness or
accident of the Participant or of a Participant's dependent (as
defined in Code section 152(a)), loss of the Participant's property
due to casualty, or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the Participant's
control. The circumstances that will constitute an unforeseeable
emergency will depend upon the facts of each case and be based on the
information supplied by the Participant, in writing, on the form
provided by the Minor Amendment Committee or its delegate.
(c) Notwithstanding the foregoing, payment under this Section 6.1 may not
be made to the extent that such hardship is or may be relieved:
(i) through reimbursement or compensation by insurance or otherwise,
(ii) by liquidation of the participant's assets, to the extent the
liquidation of such assets would not itself cause severe
financial hardship, or
(iii) by cessation of deferrals under the Plan.
In addition to the foregoing, distributions under this Section 6.1
shall not be allowed for purposes of sending a child to college or the
Participant's desire to purchase a home or other residence. In all
events, distributions made on account of an unforeseeable emergency
are limited to the extent reasonably needed to satisfy the emergency
need.
(d) All distributions under this Section 6.1 shall be made as soon as
practicable after the Minor Amendment Committee or its delegate has
approved the distribution and that the requirements of this Section
6.1 have been met.
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Section 6.2 Payment of Deferred Amounts. At the time a Participant makes
his or her election to defer any amounts under this Plan, the Participant must
also elect a distribution date and a form of payment with respect to the
deferral of each of the amounts subject to any such election, in accordance with
subsections (a) and (b) and subject to subsection (c) below. A Participant who
has a Supplemental Savings Account transferred to this Plan pursuant to Appendix
A shall also elect a distribution date and form of payment with respect to his
or her Supplemental Savings Account, in accordance with subsections (a) and (b)
and subject to subsection (c) below. Each deferred amount under this Plan is
paid separately according to the Participant's deferred distribution date
election. Notwithstanding any Participant election to the contrary, all
distributions under this Plan shall be paid or commence to be paid as soon as
practicable after the January 1 coincident with or next following the
Participant's termination of employment or retirement from the Company.
(a) Distribution Date. The distribution date may be any date that is at
least one year subsequent to the date the compensation, bonus,
FlexComp Award or the Supplemental Savings Account (whichever is
applicable) would otherwise be payable, but shall not be later than
the date the Participant attains age 70.
(b) Form of Payment. The Participant may elect to have his or her deferred
amounts subject to such election, paid in:
(1) a single payment,
(2) substantially equal annual installments for a period not to
exceed ten (10) years,
(3) substantially equal annual installments for a period not to
exceed fifteen (15) years for deferral elections made prior to
December 31, 1985 (if so elected at the time of the original
deferral), or
(4) any other form of payment requested in writing by the Participant
and approved by the Minor Amendment Committee or its delegate,
with regard to amounts deferred under Article IV.
(c) Special Rules. Notwithstanding the above, the following provisions
shall apply:
(1) Except as provided in Subsection 7.2(c)(3), if a Participant
terminates employment for any reason other than Retirement or
death, the Committee or its delegate shall require that full
payment of all amounts deferred under this Plan be paid in the
form of a single lump sum cash payment as soon as practicable
after the January 1 coincident with or next following the
Participant's termination of employment.
(2) As to all future and previous deferrals, an active Participant
may request to amend his or her distribution date and/or form of
payment with respect to a deferral provided: (i) the initial
distribution date in the absence of
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such distribution election amendment is not within twelve (12)
months of the date of the amendment; (ii) his or her amended
distribution date is at least one year after the distribution
date in the absence of such distribution election amendment;
(iii) his or her amended form of payment is in substantially
equal annual installments for a period not to exceed ten (10)
years or a lump sum; and (iv) no modifications for distribution
dates and/or forms of payment are permitted with respect to any
deferrals after payment of such deferrals has commenced to be
paid. No more than two amendments to the Participant's initial
distribution election with respect to a particular deferral shall
be permitted. Any such amendment must be in writing and submitted
to the Committee for approval.
(3) Notwithstanding any other provision of this Plan to the contrary,
a Participant may, at any time prior or subsequent to the
distribution date selected by the Participant, request in writing
to the Committee to have his or her form of payment of any or all
amounts in his or her FlexComp Account, Deferred Compensation
Account, and/or Supplemental Savings Account changed to an
immediate lump-sum distribution, provided that the amount of any
such lump-sum distribution shall be reduced by an amount equal to
the product of (X) the total lump-sum distribution otherwise
payable (based on the value of the Participant's FlexComp
Account, Deferred Compensation Account, or Supplemental Savings
Account, as the case may be) as of the first day of the month in
which the lump-sum amount is paid, adjusted by a pro-rata portion
of the rate of return for the prior month in which the lump-sum
is paid, determined by multiplying the actual rate of return for
such prior month by a fraction, the numerator of which is the
number of days in the month in which the request is received
prior to the date of payment, and the denominator of which is the
number of days in the month, and (Y) the rate set forth in
Statistical Release H.I 5(519). or any successor publication, as
published by the Board of Governors of the Federal Reserve System
for one-year U.S. Treasury notes under the heading "Treasury
Constant Maturities" for the first day of the calendar month in
which the written request for an immediate lump-sum distribution
is approved by the Committee. Any such lump sum distribution
shall be paid within one (1) business day of approval by the
Committee of such request.
Section 6.3 Death of a Participant. If a Participant dies before the full
distribution of his or her accounts under this Article VI, a lump sum payment of
the remaining distribution amount shall be made to the beneficiary designated by
the Participant. This payment shall be made as soon as practicable after the
Committee receives notification of the Participant's death. In the absence of
any such designation, payment shall be made to the personal representative,
executor or administrator of the Participant's estate.
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ARTICLE VII
ADMINISTRATION OF THE PLAN
Section 7.1 Committee. This Plan shall be administered by the Committee.
The Committee shall act by affirmative vote of a majority of its members at a
meeting or in writing without a meeting. The Committee shall appoint a secretary
who may be but need not be one of its own members. The secretary shall keep
complete records of the administration of the Plan. The Committee may authorize
each and any one of its members to perform routine acts and to sign documents on
its behalf.
Section 7.2 Plan Administration. The Committee may appoint such persons or
establish such subcommittees, employ such attorneys, agents, accountants or
investment advisors necessary or desirable to advise or assist it in the
performance of its duties hereunder, and the Committee may rely upon their
respective written opinions or certifications. Administration of the Plan shall
consist of interpreting and carrying out the provisions of the Plan in the
discretion of the Committee. The Committee shall, in its discretion, determine
the eligibility of employees to participate in the different features of the
Plan, their rights while Participants in the Plan and the nature and amounts of
benefits to be received therefrom. The Committee shall, in its discretion,
decide any disputes which may arise under the Plan. The Committee may provide
rules and regulations for the administration of the Plan consistent with its
terms and provisions. Any construction or interpretation of the Plan and any
determination of fact in administering the Plan made in good faith by the
Committee shall be final and conclusive for all Plan purposes.
Section 7.3 Claims Procedure.
(a) The Minor Amendment Committee or its delegate shall prescribe a form
for the presentation of claims under the terms of this Plan.
(b) Upon presentation to the Minor Amendment Committee or its delegate of
a claim on the prescribed form, the Minor Amendment Committee or its
delegate shall make a determination of the validity thereof. If the
determination is adverse to the claimant, the Minor Amendment
Committee or its delegate shall furnish to the claimant within a
reasonable period of time after the receipt of the claim a written
notice setting forth the following:
(1) The specific reason or reasons for the denial;
(2) Specific reference to pertinent provisions of this Plan on which
the denial is based;
(3) A description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why
such material or information is necessary; and
(4) An explanation of this Plan's claim review procedure.
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(c) If a claim is denied, the claimant may appeal such denial to the Minor
Amendment Committee or its delegate for a full and fair review of the
adverse determination. The claimant's request for review must be in
writing and be made to the Minor Amendment Committee or its delegate
within 60 days after receipt by the claimant of the written
notification required under subsection (b) above. The claimant or his
or her duly authorized representative may submit issues and comments
in writing which shall be given full consideration by the Minor
Amendment Committee or its delegate in its review.
(d) The Minor Amendment Committee or its delegate may, in its sole
discretion, conduct a hearing. A request for a hearing will be given
full consideration. At such hearing, the claimant shall be entitled to
appear and present evidence and be represented by counsel.
(e) A decision on a request for review shall be made by the Minor
Amendment Committee or its delegate not later than 60 days after
receipt of the request; provided, however, in the event of a hearing
or other special circumstances, such decision shall be made not later
than 120 days after receipt of such request.
(f) The Minor Amendment Committee's or its delegate's decision on review
shall state in writing the specific reasons and references to this
Plan provisions on which it is based. Such decision shall be
immediately provided to the claimant. In the event the claimant
disagrees with the findings of the Minor Amendment Committee or its
delegate, the matter shall be referred to arbitration in accordance
with Section 7.6 hereof.
(g) The Minor Amendment Committee or its delegate may allocate its
responsibilities among its several members, except that all matters
involving the hearing of and decision on claims and the review of the
determination of benefits shall be made by the full Minor Amendment
Committee or its delegate. No member of the Minor Amendment Committee
or its delegate shall participate in any matter relating solely to
himself or herself.
Section 7.4 Non-Assignabilitv. The interests herein and the right to
receive distributions from a Participant's accounts under this Plan may not be
anticipated, alienated, sold, transferred, assigned, pledged, encumbered, or
subjected to any charge or legal process, and if any attempt is made to do so,
or a Participant becomes bankrupt, the interests of the Participant under this
Plan in his or her accounts may be terminated by the Minor Amendment Committee
or its delegate, which, in its sole discretion, may cause the same to be held or
applied for the benefit of one or more of the dependents of such Participant or
make any other disposition of such interests that it deems appropriate.
Section 7.5 Amendments to Plan. Darden Restaurants, Inc. reserves the right
to suspend, amend or otherwise modify or terminate this Plan at any time,
without notice. Such action shall be taken by the Board of Directors of Darden
Restaurants, Inc. or its delegate, in
18
writing. However, this Plan may not be suspended, amended, otherwise modified,
or terminated after a Change in Control without the written consent of a
majority of Participants determined as of the day before such Change in Control
occurs. A "Change in Control" shall mean the occurrence of any of the following
events:
(a) any person (including a group as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934) becomes the beneficial owner,
directly or indirectly, of twenty percent (20%) or more of the shares
of Darden Restaurants, Inc. entitled to vote for the election of
directors;
(b) as a result of or in connection with any cash tender offer, exchange
offer, merger or other business combination, sales of assets or
contested election, or combination of the foregoing, the persons who
were directors of Darden Restaurants, Inc. just before such event
shall cease to constitute a majority of Darden Restaurants, Inc.'s
Board of Directors; or
(c) the shareholders of Darden Restaurants, Inc. approve an agreement
providing for a transaction in which Darden Restaurants, Inc. will
cease to be an independent publicly-owned corporation or a sale or
other disposition of all or substantially all of the assets of Darden
Restaurants, Inc. occurs.
Notwithstanding any other provision of this Plan to the contrary, the Minor
Amendment Committee or its delegate may, in its sole discretion, direct that
payments be made before such payments are otherwise due if, for any reason
(including, but not limited to a change in the tax or revenue laws of the United
States of America, a published ruling or similar announcement issued by the
Internal Revenue Service, a regulation issued by the Secretary of the Treasury
or his delegate, or a decision by a court of competent jurisdiction involving a
Participant or Beneficiary), such Committee believes that Participants or their
Beneficiaries have recognized or will recognize income for federal income tax
purposes with respect to amounts that are or will be payable to such
Participants under this Plan before such amounts are scheduled to be paid. In
making this determination, the Minor Amendment Committee or its delegate shall
take into account the hardship that would be imposed on Participants or their
Beneficiaries by the payment of federal income taxes under such circumstances.
Section 7.6 Arbitration. Subject to the completion of the claims procedure
described in Section 7.3, any controversy or claim arising out of or relating to
this Plan, or any alleged breach of the terms or conditions contained herein,
shall be settled by arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (the "AAA") as such rules may be
modified herein.
(a) An award rendered in connection with an arbitration pursuant to this
Section 7.6 shall be final and binding and judgment upon such an award
may be entered and enforced in any court of competent jurisdiction.
(b) The forum for arbitration under this Plan shall be Orlando, Florida
and the governing law for such arbitration shall be the laws of the
State of Florida.
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(c) Arbitration under this Section 7.6 shall be conducted by a single
arbitrator selected jointly by Darden Restaurants, Inc. and the
Participant or Beneficiary, as applicable (the "Complainant"). If
within thirty (30) days after a demand for arbitration is made, Darden
Restaurants, Inc. and the Complainant are unable to agree on a single
arbitrator, three arbitrators shall be appointed to conduct the
arbitration. Each party shall select one arbitrator and those two
arbitrators shall then select a third neutral arbitrator within thirty
(30) days after their appointment. In connection with the selection of
the third arbitrator, consideration shall be given to familiarity with
executive compensation plans and experience in dispute resolution
between parties, as a judge or otherwise. If the arbitrators selected
by the parties cannot agree on the third arbitrator, they shall
discuss the qualifications of such third arbitrator with the AAA
before selection of such arbitrator, which selection shall be in
accordance with the Commercial Arbitration Rules of the AAA.
(d) If an arbitrator cannot continue to serve, a successor to an
arbitrator selected by a party shall be also selected by the same
party, and a successor to a neutral arbitrator shall be selected as
specified in subsection (c) of this Section. A full rehearing will be
held only if the neutral arbitrator is unable to continue to serve or
if the remaining arbitrators unanimously agree that such a rehearing
is appropriate.
(e) The arbitrator or arbitrators shall be guided, but not bound, by the
Federal Rules of Evidence and by the procedural rules, including
discovery provisions, of the Federal Rules of Civil Procedure. Any
discovery shall be limited to information directly relevant to the
controversy or claim in arbitration.
(f) The parties shall each be responsible for their own costs and
expenses, except for the fees and expenses of the arbitrators, which
shall be shared equally by Darden Restaurants, Inc. and the
Complainant.
Section 7.7 Plan Unfunded. Nothing in this Plan shall be interpreted or
construed to require the Company in any manner to fund any obligation to the
Participants, terminated Participants or beneficiaries hereunder. Nothing
contained in this Plan nor any action taken hereunder shall create, or be
construed to create, a trust of any kind, or a fiduciary relationship between
the Company and the Participants, terminated Participants, beneficiaries, or any
other persons. Any funds which may be accumulated in order to meet any
obligation under this Plan shall for all purposes continue to be a part of the
general assets of the Company; provided, however, that the Company may establish
a trust to hold funds intended to provide benefits hereunder so long as the
assets of such trust become subject to the claims of the general creditors of
the Company in the event of bankruptcy or insolvency of the Company. To the
extent that any Participant, terminated Participant, or Beneficiary acquires a
right to receive payments from the Company under this Plan, such rights shall be
no greater than the rights of any unsecured general creditor of the Company.
20
Section 7.8 Applicable Law. All questions pertaining to the construction,
validity and effect of this Plan shall be determined in accordance with the laws
of the State of Florida, to the extent not preempted by Federal law.
Section 7.9 Limitation of Rights. This Plan is a voluntary undertaking on
the part of the Company. Neither the establishment of this Plan nor the payment
of any benefits hereunder, nor any action of the Company or the Minor Amendment
Committee or its delegate shall be held or construed to be a contract of
employment between the Company and any eligible employee or to confer upon any
person any legal right to be continued in the employ of the Company. The Company
expressly reserves the right to discharge, discipline or otherwise terminate the
employment of any eligible employee at any time. Participation in this Plan
gives no right or claim to any benefits beyond those which are expressly
provided herein and all rights and claims hereunder are limited as set forth in
this Plan.
Section 7.10 Severability. In the event any provision of this Plan shall be
held illegal or invalid, or would serve to invalidate this Plan, that provision
shall be deemed to be null and void, and this Plan shall be construed as if it
did not contain that provision.
Section 7.11 Headings and Number. The headings to the Articles and Sections
of this Plan are inserted for reference only, and are not to be taken as
limiting or extending the provisions hereof.
Section 7.12 Incapacity. If the Minor Amendment Committee or its delegate
determines that a Participant, a terminated Participant, or any Beneficiary
under this Plan (each of which shall be referred to as the "Recipient") is
unable to care for his or her affairs because of illness, accident, or mental or
physical incapacity, or because the Recipient is a minor, the Minor Amendment
Committee or its delegate may direct that any benefit payment due the Recipient
be paid to his or her duly appointed legal representative, or, if no such
representative is appointed, to the Recipient's spouse, child, parent, or other
blood relative, or to a person with whom the Recipient resides or who has
incurred expense on behalf of the Recipient. Any such payment so made shall be a
complete discharge of the liabilities of this Plan with respect to the
Recipient.
Section 7.13 Binding Effect and Release. All persons accepting benefits
under this Plan shall be deemed to have consented to the terms of this Plan. Any
final payment or distribution to any person entitled to benefits under this Plan
shall be in full satisfaction of all claims against this Plan, the Minor
Amendment Committee or its delegate, and the Company arising by virtue of this
Plan.
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APPENDIX A
SUPPLEMENTAL SAVINGS ACCOUNTS
Eligibility for Supplemental Savings Account. An individual who was
employed by the Company on the Distribution Date and who had an account balance
under the terms of the Supplemental Savings Plan as of such date, shall have a
Supplemental Savings Plan Account established hereunder to the extent such
liability is transferred to this Plan as of the one-year anniversary of the
Distribution Date.
No Forfeitures of Supplemental Savings Account. All amounts credited to a
Participant's Supplemental Savings Account under the Plan shall be fully vested.
22