Exhibit 10(i)
Special Project Incentive Program - C5
Effective Date: May 27, 2002, as amended effective as of January 1, 2005
Blaine Sweatt
Purpose
This Special Project is based on the development of C5, a new restaurant concept
by Darden Restaurants, Inc. (the "Company").
In recognition of the exceptional level of effort and commitment required of the
New Business team to effectively develop the new concept, and the potential to
significantly impact shareholder value, the New Business Development team will
be placed on a Special Project Incentive as provided for within the Darden
Restaurants, Inc. Management and Professional Incentive Plan ("MIP").
The Term of Special Project
The C5 project will be in effect for a defined period beginning on the Effective
Date and continuing through FY06 (the "Period").
Components of the C5 Incentive Determination
1. During the project period, the participant's annual incentive will be
calculated according to the normal MIP formula (earned salary x NIP x
individual rating x company rating), based on the individual rating
assigned to the participant, and the unit rating for Darden.
2. Each participant is provided a one-time opportunity to elect their
participation level in the Special Project Incentive. The participant may
elect to forego, and place at risk, a percentage of the five (5) MIP annual
incentives otherwise payable during the Period, until completion or
termination of the C5 project. The participant may elect to forego 0%, 50%,
or 100% of the participant's annual MIP incentive.
3. Upon successful completion of the Special Project, the Special Project
Incentive will be recalculated using a 2.0 company rating. The following
shows the example calculation for a single year.
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Example : Blaine Sweatt None Mid Max
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A. Annual Salary $420,000 $420,000 $420,000
B. Annual Bonus @ 45% NIP x 1.2 x 1.4 $317,500 $317,500 $317,500
C. Elected % of annual MIP given up 0% 50% 100%
D. Elected $ of annual MIP given up $0 $158,750 $317,500
Formula: B x C
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UPON SUCCESSFUL COMPLETION:
E. Recalculated Incentive (company rating of 2.0) $0 $226,800 $453,600
Formula: D / 1.4 x 2.0
F. Special Project Incentive (one year) $0 $453,600 $907,200
Formula: E x 2
G. Gain $0 $294,850 $589,700
Formula: F-D
H. Match % 0% 186% 186%
Formula: (F-D) / D
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4. Successful completion of the project will be determined solely by the Board
of Directors of Darden Restaurants through approval of the C5 concept for
expansion. The approval/expansion decision is not subject to review by
arbitration or otherwise as to whether the decision is reasonable or based
on any other factor, e.g. overall performance of the company, capital
considerations, etc. The Compensation Committee of the Board of Directors
will conduct an initial review of the success of the project no later than
June 2006.
5. Subject to the "Eligibility" provisions below, if, at the end of the
Period, there has been a successful completion of the project, as
determined solely by the Board of Directors approval of the C5 concept for
expansion, the Special Project Incentive amounts will be paid out as soon
as practicable after such determination is made at double the recalculated
Special Project Incentive amount.
6. If, at the end of the Period, the C5 project is discontinued or terminated
by the Company or the Board of Directors of Darden Restaurants for any
reason, all Special Project Incentive amounts will be forfeited in their
entirety.
7. Subject to the "Eligibility" provisions below, if, at the end of the
Period, the Board of Directors has not determined that the project has been
successfully completed, and the C5 project is not discontinued or
terminated, the Compensation Committee may approve a payment to the
participant of fifty percent (50%) of the amount otherwise payable under
paragraph 5 as if there had been a successful completion of the project.
Any such payment shall be made no later than July 31, 2006. The participant
shall have no right to any payment under this paragraph 7 and if the
Compensation Committee determines, in its sole discretion, to make any such
payment, the payment will be in satisfaction of all rights or entitlements
to which the participant might otherwise be entitled under this Special
Project Incentive Program.
Eligibility
To be eligible for the Special Project Incentive payout, the participant must be
an active employee of Darden Restaurants, Inc. at the end of the Period and at
that time the Compensation Committee determines that an amount is payable.
Participants have no vested rights to payments until and unless the Board of
Directors declares the project successfully completed or the Compensation
Committee determines that an amount is otherwise payable.
Participants will continue to be eligible for the C5 Special Project Incentive
bonus until the earliest of the following occurs:
>> The C5 bonus is paid to the participant; or
>> The C5 project is discontinued or terminated by the Company or the
Board of Directors for any reason; or
>> The end of FY06.
If a participant undertakes work on another Special Project, other than C5, and
is therefore simultaneously involved in two or more Special Project assignments,
the participant's opportunity under this program will be not reduced.
A participant who directly or indirectly, becomes an employee, officer,
director, manager, consultant or who otherwise becomes affiliated with or
provides services to any employer, entity, enterprise or company which directly
competes with the Company's restaurant business will forfeit all rights or
entitlements to the Special Project Incentive.
FlexComp Awards
Earnable compensation defines the wages used for calculating the participant's
FlexComp awards. If either the C5 Special Project Incentive or the discretionary
payment described in paragraph 7 is paid to the participant, earnable
compensation for FlexComp award purposes will be based solely on the elected
amount of annual MIP given up by the participant. The FlexComp
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Award will be calculated and paid in the fiscal year in which the amount under
this agreement is ultimately paid.
Restricted Stock Awards
Each year, participants will be eligible for a Restricted Stock Award at their
normal restricted stock level. The actual Restricted Stock Award granted will be
reduced by the number of shares equal to the shares given up under the former
Restricted Stock Matching (RSM) program in order to participate in this C5
Special Project Incentive agreement. The calculation of this number of shares
will occur as follows: MIP award actually given up X the former RSM Percentage
(50%) / the Darden common stock price on the date of grant = the number of
shares by which the participant's Restricted Stock Award will be reduced. If any
portion of the C5 Special Project Incentive is paid under paragraphs 5 or 7 to
the participant, the participant will be eligible to receive a Restricted Stock
Award equal to 50% of the amount paid hereunder. The Company reserves the right
to substitute cash, stock equivalents, or other form of current compensation of
comparable value for the Restricted Stock Awards.
Ownership of Concept
All ownership of the concept, including designs, trademarks and all intellectual
or other property, shall be vested in and owned by the company at all times,
whether or not the concept is determined to be successful or otherwise.
Additional Conditions
The terms and conditions stated in this document do not constitute a contract of
employment nor a guarantee of future benefits except as specifically stated. In
addition, this Special Project Incentive - C5 is subject to the terms,
conditions, and limitations of the MIP and is not intended to supercede such
terms, conditions, and limitations. Without limiting the generality of the
foregoing, no payment will be made under the terms of this Special Project
Incentive - C5 unless the requirements of Part (III)(C) of the MIP are met and
any such payment will be limited in accordance with the terms of Part (III)(C)
of the MIP. Any dispute or disagreement concerning this agreement shall be
governed by and construed in accordance with the laws of the State of Florida,
without regard to the conflicts of laws provisions thereof, and will be subject
to binding arbitration in Orlando, Florida in accordance with the rules and
regulations of the American Arbitration Association.
By signing below, the participant acknowledges that this amended and restated
agreement is in complete substitution for the agreement dated May 27, 2002 and
that the participant is not entitled to any other amounts or interests under
this or any predecessor Special Project Incentive Program, other than as stated
herein. The participant further agrees and understands that this agreement
constitutes the entire agreement between the parties with respect to the matters
dealt with herein, and supersedes all previous proposals, negotiations,
representations, commitments, writings, agreements, documents and all other
communications between the parties, both oral and written, with respect to such
matters.
/s/ Blaine Sweatt /s/ Dan Lyons 6/16/06
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Blaine Sweatt Date Dan Lyons Date
President, New Business Division Senior Vice President, Human Resources
/s/ Jack Snow 6/16/06
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Jack Snow Date
Senior Vice President,
Compensation & Benefits
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