Exhibit 10(b)
DARDEN RESTAURANTS, INC.
STOCK OPTION AND LONG-TERM INCENTIVE PLAN OF 1995
1. PURPOSE OF THE PLAN
The purpose of the Darden Restaurants, Inc. Amended and Restated Stock
Option and Long-Term Incentive Plan of 1995 (the "Plan") is to attract and
retain able employees by rewarding employees of Darden Restaurants, Inc.,
its subsidiaries and affiliates (defined as entities in which Darden
Restaurants, Inc. owns an equity interest of 25% or more) (collectively,
the "Company") who are responsible for the growth and sound development of
the business of the Company, and to align the interests of all employees
with those of the stockholders of the Company and to compensate certain
management employees of the Company by granting stock options in lieu of
salary increases or other compensation or employee benefits.
2. EFFECTIVE DATE, DURATION AND SUMMARY OF PLAN
A. Effective Date and Duration
This Plan shall become effective as of the effective date of the
distribution of Darden Restaurants, Inc. Common Stock to the holders
of General Mills, Inc. common stock. Awards may be made under the Plan
until September 30, 2004.
B. Summary of Option Provisions for Participants
The stock option that will be awarded to employees under this Plan
gives a right to an employee to purchase at a future date shares of
Darden Restaurants, Inc. Common Stock at a fixed price. As an
employee, you will receive an "option agreement" in your own name,
which will contain the term and other conditions of the option grant.
In general, each option agreement will state the number of shares of
Darden Restaurants, Inc. Common Stock that you can purchase from the
Company, the price at which you can purchase the shares, and the last
date you can make your purchase. You will not have any taxable income
when you receive the option agreement.
The price at which you may buy the Darden Restaurants, Inc. shares
will be equal to the market price of the Company shares on the New
York Stock Exchange as of the day the option was awarded to you. If
after the period that you must hold the option before you can exercise
such option the price of Darden Restaurants, Inc. Common Stock has
risen, you will be able to make a gain on exercising the option equal
to the difference between the exercise price of the option and the
market price of Darden Restaurants, Inc. shares on the date you use
your option to buy shares under the terms of the option certificate.
This gain will be taxable to you at the time of exercise.
You will never be obligated to buy shares of the Company if you do not
wish to do so. After the required holding period before you can
exercise the option, you can continue to hold the option as an
employee for the remaining years of the option before making the
decision whether or not to buy shares of the Company. Thereafter, the
rights under the option will lapse and cannot be used by the employee.
Generally you cannot sell or assign the option to any other person and
the specific provisions which cover your rights in the option are
covered in the full text of the Plan.
3. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Compensation Committee (the
"Committee"). The Committee shall be comprised solely of non-employee,
independent members of the Board of Directors (the "Board") appointed in
accordance with the Company's Articles of Incorporation. Subject to the
express provisions of the Plan and applicable law, the Committee shall have
authority to: (i) adopt rules and regulations for carrying out the purpose
of the Plan; (ii) select the employees to whom Awards will be made
("Participants"); (iii) determine the number of shares to be awarded and
the other terms and conditions of Awards in accordance with the Plan
provisions; (iv) amend the terms and conditions of any Award or agreement
relating to any Award, provided, however, that, except as otherwise
provided in Section 4 hereof, the Committee shall not reprice, adjust or
amend the exercise price of Stock Options previously awarded to any
Participant, whether through amendment, cancellation and replacement grant,
or any other means; and (v) interpret, construe and implement the
provisions of the Plan; provided that if at any time Rule 16b-3 or any
successor rule ("Rule 16b-3") under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), so permits, without adversely affecting the
ability of the Plan to comply with the conditions for exemption from
Section 16 of the 1934 Act (or any successor provisions) provided by Rule
16b-3, the Committee may delegate its duties under the Plan in whole or in
part, on such terms and conditions, to the Chief Executive Officer and to
other senior officers of the Company; provided further, that only the
Committee may select and make other decisions as to Awards to Participants
who are subject to Section 16 of the 1934 Act and to other executives of
the Company. The Committee (or its permitted delegate) may correct any
defect or supply any omission or reconcile any inconsistency in any
agreement relating to any Award under the Plan in the manner and to the
extent it deems necessary. Decisions of the Committee (or its permitted
delegate) shall be final, conclusive and binding upon all parties,
including the Company, stockholders and Participants.
4. COMMON STOCK SUBJECT TO THE PLAN
The shares of common stock of the Company (without par value) ("Common
Stock") to be issued upon exercise of a Stock Option, awarded as Restricted
Stock, or issued upon expiration of the restricted period for Restricted
Stock Units, may be made available from the authorized but unissued Common
Stock, shares of Common Stock held in the Company's treasury, or Common
Stock purchased by the Company on the open market or otherwise. Approval of
the Plan by the sole shareholder of the Company shall constitute
authorization to use such shares for the Plan.
The Committee, in its discretion, may require as a condition to the grant
of Stock Options, Restricted Stock or Restricted Stock Units (collectively,
"Awards"), the deposit of Common Stock owned by the Participant receiving
such grant, and the forfeiture of such Awards, if such deposit is not made
or maintained during the required holding period or the applicable
restricted period. Such shares of deposited Common Stock may not be
otherwise sold, pledged or disposed of during the applicable holding period
or restricted period. The Committee may also determine whether any shares
issued upon exercise of a Stock Option shall be restricted in any manner.
The maximum aggregate number of shares of Common Stock authorized under the
Plan for which Awards may be granted under the Plan is 33,300,000. Upon the
expiration, forfeiture, termination or cancellation, in whole or in part,
of unexercised Stock Options, or forfeiture of Restricted Stock or
Restricted Stock Units on which no dividends or dividend equivalents have
been paid, the shares of Common Stock subject thereto shall again be
available for Awards under the Plan.
The number of shares subject to the Plan, the outstanding Awards and the
exercise price per share of outstanding Stock Options may be appropriately
adjusted by the Committee in the event that:
(i) the number of outstanding shares of Common Stock shall be changed by
reason of split-ups, spin-offs, combinations or reclassifications of
shares;
(ii) any stock dividends are distributed to the holders of Common Stock;
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(iii) the Common Stock is converted into or exchanged for other shares as a
result of any merger or consolidation (including a sale of assets) or other
recapitalization, or other similar events occur which affect the value of
the Common Stock; or
(iv) the Committee determines such adjustments are appropriate to prevent
dilution or enlargement of the benefits or potential benefits intended to
be made available under the Plan.
5. ELIGIBLE PERSONS
Only persons who are employees of the Company shall be eligible to receive
Awards under the Plan ("Participants"). No Award shall be made to any
member of the Committee or any other non-employee director of the Company.
6. PURCHASE PRICE OF STOCK OPTIONS
The purchase price for each share of Common Stock issuable under a Stock
Option shall not be less than 100% of the Fair Market Value of the shares
of Common Stock on the date of grant. "Fair Market Value" as used in the
Plan shall equal the mean of the high and low price of the Common Stock on
the New York Stock Exchange on the applicable date.
7. STOCK OPTION TERM AND TYPE
The term of any Stock Option as determined by the Committee shall not
exceed 10 years from the date of grant and shall expire as of the close of
business on the last day of the designated term, unless terminated earlier
under the provisions of the Plan. All Stock Option grants under the Plan
shall be non-qualified stock options governed by Section 83 of the Internal
Revenue Code of 1986, as amended (the "Code").
8. EXERCISE OF STOCK OPTIONS
A. Of the 33,300,000 shares of Common Stock authorized for issuance
hereunder, not less than 4,500,000 shall be issued only as salary
replacement Stock Options ("SRO's") in lieu of salary increases,
compensation or other employee benefits, subject that SRO's granted to
directors pursuant to the Stock Plan for Directors (as amended) shall
also be included within such 4,500,000 shares of Common Stock. Except
as provided in Sections 12 and 13, each Stock Option issued as an SRO
may be exercised as determined by the Committee in its discretion.
B. Except as provided in Sections 12 and 13 (Change of Control and
Termination of Employment), each Stock Option, other than an SRO, may
be exercised from the date of grant no sooner than in increments of
one-third after two years, one-third after three years and one-third
after four years, subject to the Participant's continued employment
with the Company and in accordance with other terms and conditions
prescribed by the Committee which may specify a longer period before
an option may be exercised.
C. The number of shares of Common Stock subject to Stock Options,
excluding SRO's, granted under the Plan to any single Participant
shall not exceed 450,000 shares in each of the last four fiscal years
of the Plan determined on a prospective and retroactive cumulative
basis.
D. A Participant exercising a Stock Option shall give notice to the
Company of such exercise and of the number of shares elected to be
purchased prior to 5:00 P.M. EST/EDT on the day of exercise, which
must be a business day at the executive offices of the Company. At the
time of purchase, the Participant shall tender the full purchase price
of the shares purchased. Until such payment has been made and a
certificate or certificates for the shares purchased has been issued
in the Participant's name, the Participant shall possess no
stockholder rights with respect to such shares. Payment of such
purchase price shall be made to the Company, subject to any applicable
rule or regulation adopted by the Committee:
(i) in cash (including check, draft, money order or wire transfer
made payable to the order of the Company);
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(ii) through the delivery of shares of Common Stock owned by the
Participant; or
(iii) by a combination of (i) and (ii) above.
For determining the amount of the payment, Common Stock delivered
pursuant to (ii) or (iii) shall have a value equal to the Fair Market
Value of the Common Stock on the date of exercise.
9. RESTRICTED STOCK AND RESTRICTED STOCK UNITS
With respect to Awards of Restricted Stock and Restricted Stock Units, the
Committee shall:
(i) select Participants to whom Awards will be made, provided that
Restricted Stock Units may only be awarded to those employees of the
Company who are employed in a country other than the United States;
(ii) determine the number of shares of Restricted Stock or the number of
Restricted Stock Units to be awarded;
(iii)determine the length of the restricted period, which shall be no less
than one year, provided, however, that effective for Restricted Stock
granted on or after June 1, 2000, the restricted period may be
accelerated to less than one year based on performance goals
established by the Committee;
(iv) determine the purchase price, if any, to be paid by the Participant
for Restricted Stock or Restricted Stock Units; and
(v) determine any restrictions other than those set forth in this Section
9.
Any shares of Restricted Stock granted under the Plan may be evidenced in
such manner as the Committee deems appropriate, including, without
limitation, book-entry registration or issuance of stock certificates, and
may be held in escrow.
Subject to the restrictions set forth in this Section 9, each Participant
who receives Restricted Stock shall have all rights as a stockholder with
respect to such shares, including the right to vote the shares and receive
dividends and other distributions.
Each Participant who receives Restricted Stock Units shall be eligible to
receive, at the expiration of the applicable restricted period, one share
of Common Stock for each Restricted Stock Unit awarded, and the Company
shall issue to and register in the name of each such Participant a
certificate for that number of shares of Common Stock. Participants who
receive Restricted Stock Units shall have no rights as stockholders with
respect to such Restricted Stock Units until such time as share
certificates for Common Stock are issued to the Participants; provided,
however, that quarterly during the applicable restricted period for all
Restricted Stock Units awarded hereunder, the Company shall pay to each
such Participant an amount equal to the sum of all dividends and other
distributions paid by the Company during the prior quarter on that
equivalent number of shares of Common Stock.
Subject to the provisions of Section 12, for awards of Restricted Stock or
Restricted Stock Units which have a deposit requirement, a Participant will
be eligible to vest only in those shares of Restricted Stock or Restricted
Stock Units for which personally-owned shares are on deposit with the
Company as of the date the Participant's employment with the Company
terminates.
The total number of shares of Common Stock issued upon vesting of
Restricted Stock or Restricted Stock Units granted under the Plan shall not
exceed 2,250,000 of the total number of shares of Common Stock which may be
issued under this Plan, and no single Participant shall receive under the
Plan Restricted Stock or Restricted Stock Units which, upon vesting, would
exceed 2% of the total number of shares of Common Stock which may be issued
under the Plan.
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10. NON-TRANSFERABILITY
Except as otherwise provided in Section 9, no shares of Restricted Stock
and no Restricted Stock Units shall be sold, exchanged, transferred,
pledged, or otherwise disposed of during the restricted period. No Stock
Options granted under this Plan shall be transferable by a Participant
otherwise than (i) by the Participant's last will and testament or (ii) by
the applicable laws of descent and distribution, or (iii) by gift by a
Participant who is subject to Section 16 of the 1934 Act and is eligible
for retirement (age 55 with 10 years of service) to a "family member"
defined by the Committee. Such Stock Options shall be exercised during the
Participant's lifetime only by the Participant or his or her guardian or
legal representative or the donee family member. After death, such Stock
Option may be exercised in accordance with Section 13B. Other than as set
forth herein, no Award under the Plan shall be subject to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge, and
any attempt to do so shall be void.
11. WITHHOLDING TAXES
It shall be a condition to the obligation of the Company to deliver shares
upon the exercise of a Stock Option, the vesting of Restricted Stock or
Restricted Stock Units and the corresponding issuance of shares of
unrestricted Common Stock, that the Participant pay to the Company cash in
an amount equal to all federal, state, local and foreign withholding taxes
required to be collected in respect thereof.
Notwithstanding the foregoing, to the extent permitted by law and pursuant
to such rules as the Committee may adopt, a Participant may authorize the
Company to satisfy any such withholding requirement by directing the
Company to withhold from any shares of Common Stock to be issued, all or a
portion of such number of shares as shall be sufficient to satisfy the
withholding obligation.
12. CHANGE OF CONTROL
Each outstanding Stock Option shall become immediately and fully
exercisable for a period of 6 months following the date of the following
occurrences, each constituting a "Change of Control":
(i) if any person (including a group as defined in Section 13(d)(3) of the
1934 Act) becomes, directly or indirectly, the beneficial owner of 20%
or more of the shares of the Company entitled to vote for the election
of directors;
(ii) as a result of or in connection with any cash tender offer, exchange
offer, merger or other business combination, sale of assets or
contested election, or combination of the foregoing, the persons who
were directors of the Company just prior to such event cease to
constitute a majority of the Company's Board of Directors; or
(iii)the stockholders of the Company approve an agreement providing for a
transaction in which the Company will cease to be an independent
publicly-owned corporation or a sale or other disposition of all or
substantially all of the assets of the Company occurs.
After such 6-month period the normal option exercise provisions of the Plan
shall govern. In the event a Participant is terminated as an employee of
the Company within 2 years after any of the events specified in (i), (ii)
or (iii), his or her outstanding Stock Options at that date of termination
shall become immediately exercisable for a period of 3 months.
With respect to Stock Option grants outstanding as of the date of any such
Change of Control which require the deposit of owned Common Stock as a
condition to obtaining rights: (a) said deposit requirement shall be
terminated as of the date of the Change of Control and any such deposited
stock shall be promptly returned to the Participant; and (b) any
restrictions on the sale of shares issued in respect of any such Stock
Option shall lapse.
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In the event of a Change of Control, a Participant shall vest in all shares
of Restricted Stock and Restricted Stock Units, effective as of the date of
such Change of Control, and any deposited shares of Common Stock shall be
promptly returned to the Participant.
13. TERMINATION OF EMPLOYMENT
A. Termination of Employment
If the Participant's employment by the Company terminates for any
reason other than as specified herein or in subsections B, C or D, the
Participant's Stock Options shall terminate 3 months after such
termination and all shares of Restricted Stock and all Restricted
Stock Units which are subject to restriction as of said termination
date shall be forfeited by the Participant to the Company. In the
event a Participant's employment with the Company is terminated for
the convenience of the Company, as determined by the Committee, the
Committee, in its sole discretion, may vest such Participant in all or
any portion of outstanding Stock Options (which shall become
exercisable) and/or shares of Restricted Stock or Restricted Stock
Units awarded to such Participant, effective as of the date of such
termination.
In addition, and notwithstanding the foregoing provisions of this
Section 13A, effective for Stock Options granted on or after March 21,
2001, if a Participant's employment with the Company is terminated for
the convenience of the Company and for reasons other than cause (as
determined by the Committee), and the Participant's combined age and
years of service with the Company equal at least 70 at the time of
such termination, then the Participant's Stock Options that would have
vested within two years from the date of termination shall vest and
become immediately exercisable, and shall expire on the earlier of (i)
the expiration date of such Stock Options, or (ii) two years following
the termination of employment.
B. Death
If a Participant should die while employed by the Company, any Stock
Option previously granted under this Plan may be exercised (i) by the
person (which may include any individual, corporation, partnership,
association or trust) designated in such Participant's last will and
testament or, (ii) in the absence of such designation, by the
Participant's estate, or (iii) by the donee of a Stock Option made
pursuant to Section 10 (iii), to the full extent that such Stock
Option could have been exercised by such Participant immediately prior
to death. Further, with respect to outstanding Stock Option grants
which, as of the date of death, are not yet exercisable, any such
option grant shall vest and become exercisable in a pro-rata amount,
based on the full months of employment completed during the full
vesting period of the Stock Option from the date of grant to the date
of death.
With respect to Stock Option grants which require the deposit of owned
Common Stock as a condition to obtaining exercise rights, in the event
a Participant should die while employed by the Company, said Stock
Options may be exercised as provided in the first paragraph of this
Section 13B, subject to the following special conditions:
(i) any restrictions on the sale of shares issued in respect of any
such Stock Option shall cease; and
(ii) any owned Common Stock deposited by the Participant pursuant to
said grant shall be promptly returned to the person (which may
include any individual, corporation, partnership, association or
trust) designated in such Participant's last will and testament
or, in the absence of such designation, to the Participant's
estate, and all requirements regarding deposit by the Participant
shall be terminated.
A Participant who dies during any applicable restricted period shall
vest in a proportionate number of shares of Restricted Stock or
Restricted Stock Units, effective as of the date of death. Such
proportionate vesting shall be pro-rata, based on the number of full
months of employment completed during the restricted period prior to
the date of death, as a percentage of the applicable restricted
period.
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C. Retirement
The Committee shall determine, at the time of grant, the treatment of
the Stock Option upon the retirement of the Participant. Unless other
terms are specified in the original Stock Option grant, and except for
Stock Options granted on or after March 21, 2001, if the termination
of employment is due to a Participant's retirement on or after age 55
with 10 years of service with the Company, the Participant may
exercise a Stock Option, subject to the original terms and conditions
of the Stock Option. With respect to Stock Option grants which require
the deposit of owned Common Stock as a condition to obtaining rights,
any restrictions on the sale of shares issued in respect of any such
Stock Option shall lapse at the date of any such retirement. Effective
for Stock Options granted on or after March 21, 2001, if a Participant
retires on or after reaching age 55 with 10 years of service with the
Company, then upon such retirement, such Stock Options shall fully
vest and become immediately exercisable and retain the same Expiration
Date as determined at the time of grant.
A Participant shall be fully vested in all shares of Restricted Stock
or Restricted Stock Units upon attainment of age 65 (unless any such
award specifically provides otherwise).
A Participant who takes early retirement (after age 55 with 10 years
of service with the Company, but prior to age 65) during any
applicable restricted period may elect either of the following
alternatives with respect to Restricted Stock or Restricted Stock
Units (unless any such award specifically provides otherwise):
(a) Leave owned shares on deposit with the Company and vest in all
shares of Restricted Stock or Restricted Stock Units, effective
as of the earlier of the date the Participant attains age 65 or
the termination date of the applicable restricted period; or
(b) Withdraw owned shares and vest in a proportionate number of
shares of Restricted Stock or Restricted Stock Units, effective
as of the date the shares on deposit are withdrawn. Such
proportionate vesting shall be pro-rata, based on the number of
full months of employment completed during the restricted period
prior to the date of early retirement, as a percentage of the
applicable restricted period.
D. Spin-offs
If the termination of employment is due to the cessation, transfer, or
spin-off of a complete line of business of the Company, the Committee,
in its sole discretion, shall determine the treatment of all
outstanding Awards under the Plan.
E. Non-Competition
Effective for Stock Options granted on or after June 21, 1999,
recipients of such Stock Options shall not, for a period of two years
following termination of their employment with the Company for any
reason whatsoever (including retirement), directly or indirectly, (i)
own, manage or operate, be employed by, or render consulting, advisory
or other services to, any enterprise, corporation or business that
owns or operates casual dining restaurants, anywhere in the United
States or Canada (a "Competitor"), or (ii) solicit or induce any
person who is an employee of the Company to own, manage or operate, be
employed by, or render consulting, advisory or other services to, a
Competitor. Notwithstanding anything to the contrary contained in
paragraphs A through D of this Section 13, upon violation by a
Participant of the non-compete provisions of this paragraph E, all of
such Participant's outstanding Stock Options will expire on the
earlier of (i) the expiration date of the Stock Options, or (ii) three
months following the date of employment with a Competitor or other
prohibited competitive action.
14. AMENDMENTS OF THE PLAN
The Plan may be terminated, modified, or amended by the Board of Directors
of the Company. The Committee may from time to time prescribe, amend and
rescind rules and regulations relating to the Plan. Subject to the approval
of the Board of Directors, the Committee may at any time terminate, modify,
or suspend the operation
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of the Plan, provided that no action shall be taken by the Board of
Directors or the Committee without the approval of the stockholders of the
Company which would:
(i) materially increase the number of shares which may be issued under the
Plan;
(ii) materially increase the benefits accruing to Participants under the
Plan; or
(iii)materially modify the requirements as to eligibility for participating
in the Plan.
The Board of Directors shall have authority to cause the Company to take
any action related to the Plan which may be required to comply with the
provisions of the Securities Act of 1933, as amended, the 1934 Act, and the
rules and regulations prescribed by the Securities and Exchange Commission.
Any such action shall be at the expense of the Company.
No termination, modification, suspension, or amendment of the Plan shall
alter or impair the rights of any Participant pursuant to a prior Award
without the consent of the Participant. There is no obligation for
uniformity of treatment of Participants under the Plan.
15. FOREIGN JURISDICTIONS
The Committee may adopt, amend, and terminate such arrangements, not
inconsistent with the intent of the Plan, as it may deem necessary or
desirable to make available tax or other benefits of the laws of any
foreign jurisdiction, to employees of the Company who are subject to such
laws and who receive Awards under the Plan.
16. NOTICE
All notices to the Company regarding the Plan shall be in writing,
effective as of actual receipt by the Company, and shall be sent to:
Darden Restaurants, Inc.
5900 Lake Ellenor Dr.
Orlando, FL 32809
Attn: General Counsel
As amended and restated July 26, 2002
As further amended March 19, 2003, effective as of July 26, 2002
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