EXHIBIT 10(h)
DARDEN RESTAURANTS, INC.
MANAGEMENT INCENTIVE PLAN
(as amended May 23, 1996)
PART I
GENERAL PROVISIONS
A. OBJECTIVE OF THE PLAN
It is the intent of Darden Restaurants, Inc. (the "Company") to provide
financial rewards to key executives in recognition of individual
contributions to the success of the Company under the provisions of
this Management Incentive Plan (the "Plan").
Participant awards shall be based on the comparative impact of the
position to the overall corporate results as measured by the position
level, salary of the Participant, and the degree to which the
individual is able to affect division/subsidiary, group and corporate
results.
B. ELIGIBILITY
Any active key management employee of the Company or any of its
subsidiaries, including such members of the Board and the Chairman as
are actively employed by the Company or its subsidiaries, shall be
eligible to participate in the Plan. Eligibility shall not carry any
rights to participation nor to any fixed awards under the Plan.
Employees on a commission basis, those who are members of any other
company incentive compensation plan, except the Stock Option and
Long-Term Incentive Plans of the Company, and persons acting in a
consulting capacity shall not be eligible.
C. PARTICIPATION
As early as possible in each fiscal year (the "Plan Year"), management
shall recommend from those eligible a list of proposed Participants in
the Plan, and the Compensation Committee of the Board of Directors (the
"Committee") thereupon shall determine and cause to be notified those
who have been selected as Participants for the current Plan Year.
Participants shall be those persons holding positions which most
significantly affect operating results and provide the greatest
opportunity to contribute to current earnings and the future success of
the Company. During the year, other Participants may be added because
of promotion or for other reasons warranting their inclusion, or
Participants may be excluded from active participation because of
demotion or other reasons warranting their exclusion.
PART II
BASE CASH AWARDS
The size of a Participant's base cash incentive award ("Base Cash
Award") under this Plan shall be preliminarily determined by the
following formula:
(Eligible Base Salary Earnings) x (Target Incentive Percent) x
(Individual Performance Rating) x (Corporate/Unit Composite Rating) =
(Base Cash Award)
A. ELIGIBLE BASE SALARY EARNINGS
The Eligible Base Salary Earnings is the total amount of regular base
pay actually paid to a Plan Participant during the portion of the year
the Participant is covered by the Plan.
B. TARGET INCENTIVE PERCENT
The Target Incentive Percent shall be determined by the Senior Vice
President-Personnel using the following guidelines:
The Target Incentive Percent will be determined based on job level at
the time participation in the Plan commences. Persons transferred to a
higher or lower job level during a Plan Year will have their Target
Incentive Percent revised as of the effective date of the change in
position.
C. INDIVIDUAL PERFORMANCE RATING
Individual performance for the Plan Year will be determined as follows:
1. At the beginning of each Plan Year, each Participant will
develop written objectives for the year which are directly
related to specific job accountabilities.
2. The individual objectives will be reviewed with each
Participant's supervisor for acceptance and will become the
primary basis for establishing the Individual Performance
Rating for the year. For the Chief Executive Officer, such
objectives will be reviewed and approved by the Committee.
3. Near the end of each Plan Year, each Participant will submit to
his or her supervisor, a Summary of Accomplishments related to
individual performance during the year. Based on this
information and other information related to individual
performance or job accountabilities, the supervisor will assign
an individual rating from the following range:
0.00 - .50 Unsatisfactory Performance
.50 - .90 Objectives Partially Met
.90 - 1.20 Objectives Met
1.20 - 1.40 Superior Performance
1.40 - 1.80 Outstanding & Exceptional Performance
D. UNIT/CORPORATE PERFORMANCE RATING
1. Unit Rating
Near the end of the Plan Year, each Participant will submit to his or
her supervisor, a Unit Achievement Summary, which outlines the
performance of his or her respective unit during the Plan Year and
relates directly to annual program, the Company's long-range plans and
other key operating objectives. This Unit Achievement Summary will be
used, along with other information related to unit performance, in
establishing a unit rating with a range of .0 (Unsatisfactory) to 1.8
(Outstanding and Exceptional Performance) in the same manner or ratings
for Individual Performance Ratings.
2. Corporate Rating
At the beginning of each Plan Year, the Committee shall establish a
rating schedule based upon the Company's growth in Earnings Per Share
(Pre-LIFO) and the Company's Return on Capital for the Plan Year. Based
on this schedule, the Committee will, at the end of each Plan Year,
establish a corporate rating for the year. Individual and unit ratings
will be recommended by the Participant's manager and reviewed by one
additional level of management. All individual and unit ratings for
Plan Participants will be submitted to the Company's Incentive
Committee for review and approval.
3. Unit/Corporate Weightings
The ratings established in 1. and 2. above shall be weighted based on
job level according to the following schedule:
Corporate Unit
Portion Portion
Senior Corporate Officers 100% 0%
Vice Chairman 40% 60%
Restaurant Concept Presidents 25% 75%
Restaurant Concept Officers 0% 100%
Corporate Staff Officers 100% 0%
E. REVIEW AND APPROVAL OF RATINGS
All individual and unit ratings will be determined by the Participant's
manager and reviewed and approved by one additional level of
management. In addition, the Incentive Committee shall review and
approve all ratings prior to their submissions to the Committee.
The final ratings and incentive award amounts shall be reviewed and
approved by the Committee which shall have full authority and
discretion to set all final Base Cash Awards.
PART III
STOCK MATCHING PROVISIONS
A. ALTERNATIVES FOR PARTICIPATION IN STOCK MATCHING
Subject to the provisions set forth below (the "Stock Matching
Provisions"), Participants under age 55 are eligible to receive
additional incentive compensation in the form of common stock of the
Company ("Common Stock") contributed by the Company ("Stock Matching")
under the terms of the Company's Stock Option and Long-Term Incentive
Plans, and Participants age 55 or over may elect to receive all or a
portion of their additional incentive compensation in the form of Stock
Matching and/or an "Additional Cash Award."
1. Participants under age 55 as of the last day of the Plan Year are
eligible to participate in the Stock Matching Provisions of the
Plan by depositing shares of Common Stock with a Fair Market
Value equal to either 15% or 25% of their Base Cash Award,
depending on job level.
2. Participants age 55 or over as of the last day of the Plan Year
may elect full, partial, or no participation in the Stock
Matching Provisions according to the following schedule:
25% Match 15% Match
------------------------------ -----------------------------
Fair Market Fair Market
Level of Value of Value of
Stock Shares to be Additional Shares to be Additional
Matching Deposited as % Cash Award Deposited as % Cash Award
Participation of Base Cash of Base Cash
Award Award
Full 25% 0% 15% 0%
Participation 15% 6% 9% 3%
Partial 10% 9% 6% 5%
Participation 5% 12% 3% 7%
No 0% 15% 0% 9%
Participation
in Stock
Matching
3. On or before the December 31 immediately preceding the end of the
Plan Year, Participants must notify the Company in writing of the
applicable participation alternatives elected under the Stock
Matching Provisions. Elections regarding Stock Matching
participation are effective for the current Plan Year.
B. PARTICIPATION IN STOCK MATCHING
1. The Company shall notify each Participant who participates in the
Stock Matching Provisions of the maximum number of shares of
Common Stock which they are permitted to deposit under the Plan,
and Participants may choose to deposit all or any portion of the
number of shares so permitted to be deposited (the "Original
Deposit"). Participants can make their Original Deposit at any
time after they receive their Base Cash Award, but Participants
must deposit such shares with the Company (the "Agent") no later
than the December 1 immediately following the end of the Plan
Year.
2. Any Participant who dies, retires on or after age 65, elects
early retirement after age 55, or is permanently disabled and
unable to work as determined by the Committee, either during a
Plan Year or prior to the final date for depositing the Original
Deposit shares for such Plan Year (December 1), shall not be
eligible to participate in the Stock Matching Provisions, but
instead, such Participant, or the Participant's legal
representative, shall receive an Additional Cash Award for the
Plan Year in an amount equal to fifteen percent (15%) or
twenty-five percent (25%) of any Base Cash Award paid or payable
for that Plan Year.
C. DISTRIBUTIONS AND WITHDRAWALS
1. Restricted Stock
As soon as practical following the Original Deposit by a Participant,
the Company shall, under the terms of the Company's Stock Option and
Long Term Incentive Plans, match these shares and either deposit with
the Agent for the Participant's account one share of Common Stock for
each share of the Original Deposit or evidence issuance of one share of
Common Stock for each share of the Original Deposit in book entry form
as reflected on the master stockholder records of the Company. The
Company matching shares (the "Restricted Stock") shall vest and be
delivered to the Participant in accordance with the terms of the plan
under which they are issued and as determined by the Committee.
2. Temporary Withdrawal for Option Exercise
A Participant may temporarily withdraw all or a portion of the shares
on deposit for all Plan Years (other than Restricted Stock) in order to
exercise Company stock options, subject to an equal number of shares of
Common Stock being promptly redeposited with the Agent after such
exercise.
D. DEFINITION OF PLAN YEAR
For stock matching purposes, the Plan Year shall be defined as the
Company's fiscal year.
PART IV
DEFERRAL OF PAYMENT OF CASH INCENTIVE AWARDS
Subject to rules adopted by the Committee, a Participant may elect to defer all
or a portion of a Base Cash Award and any additional cash award received
(collectively "Cash Award") during each calendar year in accordance with the
terms and conditions of the Company's FlexComp Plan.
In order to defer all or a portion of the Cash Award for a particular calendar
year, a Participant must make a valid election by executing and filing a
Deferral Election Form with the Company on or before the December 31 immediately
preceding the end of the Plan Year.
PART V
PLAN ADMINISTRATION
This Plan shall be effective in each fiscal year of the Company and shall be
administered by the Committee and the Committee shall have full authority to
interpret the Plan. Such interpretations of the Committee shall be final and
binding on all parties, including the Participants, survivors of the
Participant, and the Company.
The Committee shall have the authority to delegate the duties and
responsibilities of administering the Plan, maintaining records, issuing such
rules and regulations as it deems appropriate, and making the payments hereunder
to such employees or agents of the Company as it deems proper.
The Board, or if specifically delegated, its delegate, may amend, modify or
terminate the Plan at any time, provided, however, that no such amendment,
modification or termination shall adversely affect any accrued benefit under the
Plan to which a Participant, or the Participant's beneficiary, is entitled prior
to the date of such amendment or termination, unless the Participant, or the
Participant's beneficiary, becomes entitled to an amount equal to the value of
such benefit under another plan, program or practice adopted by the Company.
Notwithstanding the above, no amendment, modification, or termination which
would affect benefits accrued under this Plan prior to such amendment,
modification or termination may occur after a Change of Control without the
written consent of a majority of the Participants determined as of the day
before such Change of Control.
A Change of 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) becoming, directly or
indirectly, the beneficial owner of twenty percent (20%) or
more of the shares of stock of the Company 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, sale of
assets or contested election, or combination of the foregoing,
the persons who were directors of the Company just prior to
such event shall cease to constitute a majority of the
Company's Board of Directors; or
(c) 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.
In the event the Company shall effect one or more changes, split-ups or
combinations of shares of Common Stock or one or more other like transactions,
the Board or the Committee may make such adjustment, upward or downward, in the
number of shares of Common Stock to be deposited by the Participants as shall
appropriately reflect the effect of such transactions.
In the event the Company shall distribute shares of a subsidiary of the Company
to its stockholders in a spin-off transaction, the shares of stock of the
subsidiary distributed to Participants which are attributable to Restricted
Stock shall be vested and delivered to the Participants subject to any specific
instructions of the Committee.
Neither any benefit payable hereunder nor the right to receive any future
benefit under the Plan may 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 person eligible for any benefits becomes
bankrupt, the interest under the Plan of the person affected may be terminated
by the Committee 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 person or make
any other disposition of such benefits that it deems appropriate.
All questions pertaining to the construction, validity and effect of the Plan
shall be determined in accordance with the laws of the United States and the
laws of the State of Florida.
Effective as of May 28, 1995