Exhibit 10(a)
DARDEN RESTAURANTS, INC.
2002 STOCK INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
This Non-Qualified Stock Option Agreement is between Darden Restaurants,
Inc., a Florida corporation (the "Company"), and you, the person named in the
attached Notice of Stock Option Grant (the "Notice"). This Agreement is
effective as of the date of grant set forth in the attached Notice (the "Grant
Date").
The Company desires to provide you with an opportunity to purchase shares
of the Company's Common Stock, no par value (the "Common Stock"), as provided in
this Agreement in order to carry out the purpose of the Company's 2002 Stock
Incentive Plan (the "Plan").
Accordingly, for good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Company and you hereby agree as follows:
1. Grant of Option.
The Company hereby grants to you, effective as of the Grant Date, the right
and option (the "Option") to purchase all or any part of the aggregate number of
shares of Common Stock set forth in the attached Notice, on the terms and
conditions contained in this Agreement and in accordance with the terms of the
Plan. The Option is not intended to be an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
2. Exercise Price.
The per share purchase price of the shares subject to the Option shall be
the purchase price per share set forth in the attached Notice.
3. Term of Option and Exercisability.
The term of the Option shall be for a period of ten years from the Grant
Date, terminating at the close of business on the expiration date set forth in
the attached Notice (the "Expiration Date") or such shorter period as is
prescribed in Sections 5 and 6 of this Agreement. The Option shall become
exercisable, or vest, on the date or dates set forth in the attached Notice,
subject to the provisions of Sections 4, 5 and 6 of this Agreement. To the
extent the Option is exercisable, you may exercise it in whole or in part, at
any time, or from time to time, prior to the termination of the Option.
4. Change of Control.
Notwithstanding the vesting provisions contained in Section 3 above, but
subject to the other terms and conditions contained in this Agreement, from and
after a Change of Control (as defined below) the following provisions shall
apply:
(a) If you are employed by the Company or an Affiliate of the Company, the
Option shall become immediately exercisable in full for a period of six months
following the date of the Change of Control. After this six-month period, the
vesting provisions contained in Section 3 above and in the attached Notice will
govern with respect to any unexercised portion of the Option. However, if your
employment with the Company or an Affiliate of the Company is terminated within
two years after a Change of Control, the Option shall become immediately
exercisable in full and the Option shall expire on the earlier of (i) the
Expiration Date set forth in the Notice and (ii) the date that is three months
after the date of your termination of employment.
(b) If you are serving on the Board of Directors of the Company but are not
an employee of the Company or an Affiliate of the Company (a "Non-Employee
Director"), the Option shall become immediately exercisable in full and the
Option shall expire on the Expiration Date set forth in the Notice.
(c) For purposes of this Agreement, "Change of Control" shall mean any of
the following events:
(i) any person (including a group as defined in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended) 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 consummation of a transaction in which the Company ceases to
be an independent publicly-owned corporation or the consummation of a sale
or other disposition of all or substantially all of the assets of the
Company.
5. Effect of Termination of Employment or End of Board Service.
(a) If you cease to be employed by the Company or an Affiliate of the
Company and the Option is not a Salary Replacement Option or a Bonus Replacement
Option as indicated in the Notice, any portion of the Option that was not vested
on the date of your termination of employment shall be forfeited and any portion
of the Option that was vested on the date of your termination of employment may
be exercised until the earlier of (x) the Expiration Date set forth in the
Notice and (y) the date that is three months after the date of your termination
of employment, except that:
(i) if the Company or an Affiliate of the Company terminates your
employment involuntarily and not for cause (as determined by the Committee
administering the Plan), and your combined age and years of service with
the Company or an Affiliate of the Company equal at least 70, then any
portion of the Option that has not vested on the date of your termination
of employment but that would have vested within two years from the date of
termination if your employment had continued shall become immediately
exercisable and the Option may be exercised until the earlier of
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(x) the Expiration Date set forth in the Notice and (y) the date that is
two years after the date of your termination of employment;
(ii) if you retire on or after age 55 with 10 years of service with
the Company or an Affiliate of the Company, the Option shall become
immediately exercisable in full and may be exercised until the Expiration
Date set forth in the Notice; or
(iii) if you die while employed by the Company or an Affiliate of the
Company, any portion of the Option that has not vested as of the date of
your death shall vest on a pro rata basis and become immediately
exercisable, based on the number of full months of employment completed
from the Grant Date to the date of your death, and the Option may be
exercised until the Expiration Date set forth in the Notice. The Option may
be exercised by your personal representative or the administrators of your
estate or by any Person or Persons to whom the Option has been transferred
by will or the applicable laws of descent and distribution.
(b) If you cease to be employed by the Company or an Affiliate of the
Company and the Option is a Salary Replacement Option or a Bonus Replacement
Option as indicated in the Notice, the Option shall become immediately
exercisable in full and may be exercised until the earlier of (x) the Expiration
Date set forth in the Notice and (y) the date that is three months after the
date of your termination of employment, except that:
(i) if the Company or an Affiliate of the Company terminates your
employment involuntarily and not for cause (as determined by the Committee
administering the Plan), and your combined age and years of service with
the Company or an Affiliate of the Company equal at least 70, then the
Option shall become immediately exercisable in full and may be exercised
until the earlier of (x) the Expiration Date set forth in the Notice and
(y) the date that is two years after the date of your termination of
employment;
(ii) if you retire on or after age 55 with 10 years of service with
the Company or an Affiliate of the Company, the Option shall become
immediately exercisable in full and may be exercised until the Expiration
Date set forth in the Notice; or
(iii) if you die while employed by the Company or an Affiliate of the
Company, the Option shall become immediately exercisable in full and may be
exercised until the Expiration Date set forth in the Notice. The Option may
be exercised by your personal representative or the administrators of your
estate or by any Person or Persons to whom the Option has been transferred
by will or the applicable laws of descent and distribution.
(c) If you are a Non-Employee Director and you cease to serve on the Board
of Directors, any portion of the Option that was not vested on your last day of
Board service shall be forfeited and any portion of the Option that was vested
on your last day of Board service may be exercised until the earlier of (x) the
Expiration Date set forth in the Notice and (y) the date that is three months
after your last day of Board service, except that:
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(i) if you have served on the Company's Board of Directors for at
least five years, any portion of the Option that was not vested on your
last day of Board service shall be forfeited and any portion of the Option
that was vested on your last day of Board service may be exercised until
the Expiration Date set forth in the Notice;
(ii) if you die while serving on the Company's Board of Directors, any
portion of the Option that was not vested on your last day of Board service
shall be forfeited and any portion of the Option that was vested on your
last day of Board service may be exercised until the Expiration Date set
forth in the Notice. The Option may be exercised by your personal
representative or the administrators of your estate or by any Person or
Persons to whom the Option has been transferred by will or the applicable
laws of descent and distribution; or
(iii) if the Option is a Salary Replacement Option as indicated in the
Notice, the Option shall continue to vest on the dates set forth in the
Notice and may be exercised until the Expiration Date set forth in the
Notice notwithstanding the cessation of your service on the Board of
Directors for any reason, including your death.
6. Non-Competition.
Notwithstanding the provisions of Section 5 of this Agreement, if, within
two years following your termination of employment with the Company or an
Affiliate of the Company for any reason (including retirement), you directly or
indirectly (a) own, manage or operate, become or are employed by, or provide
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 (b) you solicit or induce any person who is
an employee of the Company or an Affiliate of the Company to own, manage or
operate, become employed by, or provide consulting, advisory or other services
to a Competitor, then your Option will expire on the earlier of (i) the
Expiration Date set forth in the Notice or (ii) on the date that is three months
after the date you commenced employment with the Competitor or took the
competitive action described above.
7. Method of Exercising Option.
(a) Subject to the terms and conditions of this Agreement, you may exercise
your Option by following the procedures established by the Company from time to
time. In addition, you may exercise your Option by written notice to the Company
as provided in Section 10(i) of this Agreement that states (i) your election to
exercise the Option, (ii) the Grant Date of the Option, (iii) the purchase price
of the shares, (iv) the number of shares as to which the Option is being
exercised, (v) the manner of payment and (vi) the manner of payment for any
income tax withholding amount. The notice shall be signed by you or the Person
or Persons exercising the Option. The notice shall be accompanied by payment in
full of the exercise price for all shares designated in the notice. To the
extent that the Option is exercised after your death, the notice of exercise
shall also be accompanied by appropriate proof of the right of such Person or
Persons to exercise the Option.
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(b) Payment of the exercise price shall be made to the Company through one
or a combination of the following methods:
(i) cash, in United States currency (including check, draft, money
order or wire transfer made payable to the Company); or
(ii) delivery (either actual delivery or by attestation) of shares of
Common Stock acquired by you more than six months prior to the date of
exercise having a Fair Market Value on the date of exercise equal to the
Option exercise price. You shall represent and warrant in writing that you
are the owner of the shares so delivered, free and clear of all liens,
encumbrances, security interests and restrictions, and you shall duly
endorse in blank all certificates delivered to the Company.
8. Taxes.
(a) You acknowledge that you will consult with your personal tax adviser
regarding the income tax consequences of exercising the Option or any other
matters related to this Agreement. If you are employed by the Company or an
Affiliate of the Company, in order to comply with all applicable federal, state,
local or foreign income tax laws or regulations, the Company may take such
action as it deems appropriate to ensure that all applicable federal, state,
local or foreign payroll, withholding, income or other taxes, which are your
sole and absolute responsibility, are withheld or collected from you.
(b) In accordance with the terms of the Plan, and such rules as may be
adopted by the Committee administering the Plan, you may elect to satisfy any
applicable tax withholding obligations arising from the exercise of the Option
by (i) delivering cash (including check, draft, money order or wire transfer
made payable to the order of the Company), (ii) having the Company withhold a
portion of the shares of Common Stock otherwise to be delivered upon exercise of
the Option having a Fair Market Value equal to the amount of such taxes or (iii)
delivering to the Company shares of Common Stock having a Fair Market Value
equal to the amount of such taxes. The Company will not deliver any fractional
share of Common Stock but will pay, in lieu thereof, the Fair Market Value of
such fractional share. Your election must be made on or before the date that the
amount of tax to be withheld is determined.
9. Adjustments.
In the event that the Committee administering the Plan shall determine that
any dividend or other distribution (whether in the form of cash, shares of
Common Stock, other securities or other property), recapitalization, stock
split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase or exchange of shares or other securities of
the Company, issuance of warrants or other rights to purchase shares or other
securities of the Company or other similar corporate transaction or event
affects the shares covered by the Option such that an adjustment is determined
by the Committee administering the Plan to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under this Agreement, then the Committee administering the Plan
shall, in such manner as it may deem equitable, in its sole discretion, adjust
any or all of the number and type of the shares covered by the Option and the
exercise price of the Option.
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10. General Provisions.
(a) Interpretations. This Agreement is subject in all respects to the terms
of the Plan. A copy of the Plan is available upon your request. Terms used
herein which are defined in the Plan shall have the respective meanings given to
such terms in the Plan, unless otherwise defined herein. In the event that any
provision of this Agreement is inconsistent with the terms of the Plan, the
terms of the Plan shall govern. Any question of administration or interpretation
arising under this Agreement shall be determined by the Committee administering
the Plan, and such determination shall be final, conclusive and binding upon all
parties in interest.
(b) No Rights as a Shareholder. Neither you nor your legal representatives
shall have any of the rights and privileges of a shareholder of the Company with
respect to the shares of Common Stock subject to the Option unless and until
such shares are issued upon exercise of the Option.
(c) No Right to Employment or Board Service. Nothing in this Agreement or
the Plan shall be construed as giving you the right to be retained as an
employee of the Company or any Affiliate of the Company or to continue to serve
on the Company's Board of Directors. In addition, the Company or an Affiliate of
the Company may at any time dismiss you from employment, free from any liability
or any claim under this Agreement, unless otherwise expressly provided in this
Agreement.
(d) Option Not Transferable. Except as otherwise provided by the Plan or by
the Committee administering the Plan, the Option shall not be transferable other
than by will or by the laws of descent and distribution and the Option shall be
exercisable during your lifetime only by you or, if permissible under applicable
law, by your guardian or legal representative. The Option may not be pledged,
alienated, attached or otherwise encumbered, and any purported pledge,
alienation, attachment or encumbrance of the Option shall be void and
unenforceable against the Company or any Affiliate of the Company.
(e) Reservation of Shares. The Company shall at all times during the term
of the Option reserve and keep available such number of shares of Common Stock
as will be sufficient to satisfy the requirements of this Agreement.
(f) Securities Matters. The Company shall not be required to deliver any
shares of Common Stock until the requirements of any federal or state securities
or other laws, rules or regulations (including the rules of any securities
exchange) as may be determined by the Company to be applicable are satisfied.
(g) Headings. Headings are given to the sections and subsections of this
Agreement solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of this Agreement or any provision hereof.
(h) Governing Law. The internal law, and not the law of conflicts, of the
State of Florida will govern all questions concerning the validity, construction
and effect of this Agreement.
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(i) Notices. You should send all written notices regarding this Agreement
or the Plan to the Company at the following address:
Darden Restaurants, Inc.
Supervisor, Stock Compensation Plans
5500 Lake Ellenor Drive
Orlando, FL 32809
(j) Notice of Stock Option Grant. This Non-Qualified Stock Option Agreement
is attached to and made part of a Notice of Stock Option Grant and shall have no
force or effect unless such Notice is duly executed and delivered by the Company
to you.
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