<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
DARDEN RESTAURANTS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
DARDEN RESTAURANTS, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
DARDEN RESTAURANTS, INC.
5900 LAKE ELLENOR DRIVE, ORLANDO, FL 32809
------------------------
1997 NOTICE OF ANNUAL MEETING
AND PROXY STATEMENT
---------------------
August 12, 1997
To Our Stockholders:
You are cordially invited to attend the 1997 Annual Meeting of Stockholders,
which will be held at the Renaissance Orlando Resort, 6677 Sea Harbor Drive,
Orlando, Florida, on Thursday, September 25, 1997, at 11:30 a.m. Eastern
Daylight Savings Time. All holders of the Company's outstanding common stock as
of July 28, 1997 are entitled to vote at the Annual Meeting.
Time will be set aside for discussion of each item of business described in
the accompanying Notice of Annual Meeting and Proxy Statement, and stockholders
will have an opportunity to ask questions. We plan to adjourn the meeting at
approximately 12:30 p.m. A report of the Annual Meeting will be included in the
mid-year report that will be mailed to all stockholders in January, 1998.
Should you decide to attend the Annual Meeting and need special assistance
because of a disability, please contact the Secretary of the Company at the
address above. Please complete, sign, date and return the proxy card in the
enclosed envelope in order to make certain that your shares will be represented
at the Annual Meeting.
Sincerely,
/s/ Joe R. Lee
Joe R. Lee
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
<PAGE>
DARDEN RESTAURANTS, INC.
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 25, 1997
---------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Darden
Restaurants, Inc. will be held on Thursday, September 25, 1997, at 11:30 a.m.,
Eastern Daylight Savings Time, at the Renaissance Orlando Resort, 6677 Sea
Harbor Drive, Orlando, Florida, for the following purposes:
1. To elect eight directors;
2. To approve the appointment of KPMG Peat Marwick LLP to audit the
consolidated financial statements of Darden Restaurants, Inc. for the fiscal
year beginning May 26, 1997; and
3. To act upon any other business which may properly be brought before the
meeting.
The close of business on July 28, 1997 has been fixed as the record date for
determining the stockholders entitled to notice of and to vote at the Annual
Meeting.
By Order of the Board of Directors
/s/ Clifford L. Whitehill
Clifford L. Whitehill
SECRETARY
August 12, 1997
<PAGE>
DARDEN RESTAURANTS, INC.
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
THURSDAY, SEPTEMBER 25, 1997
VOTING PROCEDURES
This Proxy Statement is being sent to holders of record at the close of
business on July 28, 1997 of the common stock, no par value (the "Common
Stock"), of Darden Restaurants, Inc., 5900 Lake Ellenor Drive, Orlando, FL 32809
(the "Company") entitled to vote at the Annual Meeting of Stockholders on
September 25, 1997, in order to furnish information relating to the business to
be transacted. All stockholders of record on July 28, 1997 are entitled to vote
at the meeting and, as of that date, there were 153,019,238 shares of Common
Stock outstanding (excluding 7,124,005 shares held in the Company's Treasury).
Each share of Common Stock entitles the holder to one vote. The 7,124,005 shares
of Common Stock held in the Company's treasury will not be voted and will not be
considered present at the meeting for purposes of determining a quorum and for
purposes of calculating the vote.
This Proxy Statement and the accompanying form of proxy are being first
mailed or given to stockholders on or about August 12, 1997.
A proxy card is enclosed for your use. YOU ARE SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS TO SIGN, DATE AND RETURN THE PROXY CARD IN THE ACCOMPANYING
ENVELOPE, which is postage-paid if mailed in the United States or Canada. Please
indicate on the proxy card if you intend to attend the Annual Meeting of
Stockholders on September 25, 1997.
You have three choices on each matter to be voted upon at the Annual
Meeting. For the election of directors, by checking the appropriate box on your
proxy card, you may (i) vote for all of the director nominees as a group; (ii)
withhold authority to vote for all director nominees as a group; or (iii) vote
for all director nominees as a group except those nominees you identify on the
appropriate line. See "General Information" under Item No. 1. Concerning the
other item, by checking the appropriate box, you may (i) vote "FOR" the item;
(ii) vote "AGAINST" the item; or (iii) "ABSTAIN" from voting on the item.
You may revoke your proxy at any time before it is actually voted at the
Annual Meeting by delivering written notice of revocation to the Secretary of
the Company, by submitting a subsequently dated proxy, or by attending the
meeting and withdrawing the proxy. You may also be represented by another person
present at the meeting by executing a form of proxy designating such person to
act on your behalf. Each unrevoked proxy card properly executed and received
prior to the close of the meeting will be voted as indicated. Where specific
instructions are not indicated, the proxy will be voted FOR the election of all
directors as nominated and FOR the approval of the appointment of KPMG Peat
Marwick LLP as independent auditors.
If an executed proxy card is returned and the stockholder has voted
"abstain" on any matter (or "withhold authority" as to the election of any
director), the shares represented by such proxy will be considered present at
the meeting for purposes of determining a quorum and for purposes of calculating
the vote, but will not be considered to have been voted in favor of such matter.
If an executed proxy is returned by a broker holding shares in street name which
indicates that the broker does not have discretionary authority as to certain
shares to vote on one or more matters, such shares will be considered present at
the meeting for purposes of determining a quorum, but will not be considered to
be represented at the meeting for purposes of calculating the vote with respect
to such matters. A majority of shares of Common Stock, represented at the Annual
Meeting in person or by proxy, will constitute a quorum. The affirmative vote of
a majority of the shares of Common Stock entitled to vote, present in person or
by
1
<PAGE>
proxy at the Annual Meeting, will be necessary for the election of directors and
the approval of the other matter herein submitted to the stockholders for
approval at the Annual Meeting.
The expense of preparing, printing and mailing this Proxy Statement will be
paid by the Company. The Company has engaged Georgeson & Company Inc. to assist
in the solicitation of proxies from stockholders at a fee of $8,500 plus
reimbursement of its out-of-pocket expenses. In addition to the use of the mail,
proxies may be solicited personally, by telephone or by facsimile by regular
employees of the Company without additional compensation, as well as by
employees of Georgeson & Company Inc. The Company will reimburse banks, brokers
and other custodians, nominees and fiduciaries for their costs in sending the
proxy materials to the beneficial owners of the Common Stock.
A copy of the 1997 Annual Report to Stockholders, which includes the
consolidated financial statements of the Company as of and for the fiscal year
ended May 25, 1997, is being included in the same mailing package as your proxy
material. If you did not receive the Annual Report, please call the Secretary at
407-245-5215 (collect) and a copy will be forwarded to you.
Shares of Common Stock credited to the accounts of participants in the
Company's Profit Sharing and Savings Plan ("PSSP") have been added to such
persons' other holdings on their proxy cards and, as to shares of Common Stock
which have been allocated to such person's account in the PSSP, the proxy also
serves as voting instructions to the trustee of the PSSP. The trustee of the
PSSP will vote allocated shares of Common Stock for which it has not received
direction, as well as unallocated shares held by the trustee, in the same
proportion as directed shares are voted.
CERTAIN OWNERS OF COMMON STOCK
As of May 25, 1997, the only persons known to the Company to own
beneficially (as defined by the Securities and Exchange Commission for proxy
statement purposes) more than 5% of the outstanding Common Stock of the Company,
based on Schedule 13G reports and subsequent amendments filed during fiscal
1997, are as follows:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF CLASS
OF BENEFICIAL OWNER OWNERSHIP PERCENT
- ---------------------------------------------------------------------------------- ------------------ -----------
<S> <C> <C>
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110 15,273,824(1) 9.6%
The Prudential Insurance Company of America
751 Broad Street
Newark, New Jersey 07102 17,734,406(2) 11.59%
</TABLE>
- ------------------------
(1) As of December 31, 1996, 12,876,819 shares were held as trustee of the PSSP,
and 2,397,005 shares were held as trustee for various personal trust
accounts and other Company employee benefit plans and index accounts. Such
holder had sole power to vote 1,449,753 of such shares, shared voting power
on 12,915,471 shares, sole dispositive power on 2,343,953 shares, and shared
dispositive power on 12,929,871 shares.
(2) As of April 30, 1997, 235,700 shares were held for the benefit of the
holder's general account, and 17,498,706 shares were held for the benefit of
the holder's clients by its separate accounts, externally managed accounts,
registered investment companies, subsidiaries and/or other affiliates. Such
holder had sole power to vote 2,812,197 shares, shared voting power on
14,826,959 shares, sole dispositive power on 2,812,197 shares, and shared
dispositive power on 14,922,209 shares.
2
<PAGE>
ITEM NO. 1
ELECTION OF DIRECTORS
GENERAL INFORMATION
Directors will hold office until the next Annual Meeting and until their
successors are duly chosen and qualify, or until their earlier resignation or
removal. The Nominating Committee of the Board of Directors has inquired of each
nominee, and each nominee has agreed to serve if elected. In the event that any
of these nominees should become unavailable for election, this Committee may
designate substitute nominees, in which event the shares represented by the
proxy cards returned will be voted for such substitute nominees unless an
instruction to the contrary is indicated on the proxy card.
INFORMATION CONCERNING NOMINEES
<TABLE>
<S> <C>
H. B. Atwater, Jr. H. B. Atwater, Jr., age 66, retired on June 1, 1995 as Chairman and
Director since 1995 Chief Executive Officer and as a director of General Mills, Inc.,
the former parent company of Darden Restaurants, Inc. Mr. Atwater
joined General Mills, Inc. in 1958 and he was elected President in
1977, Chief Executive Officer in 1981, and Chairman of the Board in
1982. Mr. Atwater is a director of Merck & Co., Inc. He is on the
Board of the Mayo Foundation.
Bradley D. Blum Bradley D. Blum, age 43, is President of The Olive Garden. Mr. Blum
Nominee joined General Mills in 1978. He was named Director of Marketing in
1984, responsible for Big G Cereals, and he became Vice President of
Big G New Enterprises in 1989. In 1990, he was named Vice President
of Marketing for Cereal Partners Worldwide, General Mills' joint
venture with Nestle, headquartered in Switzerland. He joined the
Company in 1994 as Senior Vice President of Marketing for The Olive
Garden and was named President of The Olive Garden in December of
1994. He was named Senior Vice President of the Company in September
of 1995.
Daniel B. Burke Daniel B. Burke, age 68, retired in February, 1994 as President and
Director since 1995 Chief Executive Officer of Capital Cities/ABC, Inc., a broadcasting
company, a position he had held since 1990. Mr. Burke joined Capital
Cities in 1961 as General Manager of WTEN-TV. He was elected
Executive Vice President and Director of Capital Cities in 1967 and
served as President of the Publishing Division from 1969 until his
election as President and Chief Operating Officer of Capital Cities
in 1972. Mr. Burke became President and Chief Operating Officer of
Capital Cities/ABC, Inc. in 1986 when Capital Cities completed its
acquisition of American Broadcasting Companies, Inc. Mr. Burke is a
director of Consolidated Rail Corporation, Morgan Stanley Dean
Witter Discovery, Rohm and Haas Company and the Washington Post
Company.
Joe R. Lee Joe R. Lee, age 56, is Chief Executive Officer and Chairman of the
Director since 1995 Board of the Company. Mr. Lee joined Red Lobster in 1967 as a member
of its opening management team, and was named its President in 1975.
He was elected a Vice President of General Mills, Inc. in 1976, a
Group Vice President in 1979, and an Executive Vice President in
1981, was named Executive Vice President, Finance and International
Restaurants in 1991, and was elected a Vice Chairman in 1992 with
responsibility for various consumer foods businesses and corporate
staff functions. Mr. Lee was elected a director of General Mills,
Inc. in 1985. He was named as the Chief Executive Officer of the
Company in
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
December of 1994. Mr. Lee serves on the Board of Directors of
Tupperware Corporation.
Betty Southard Murphy Betty Southard Murphy, age 64, has been a partner in the law firm of
Director since 1995 Baker & Hostetler since 1980, where she chairs the firm's employment
law and benefits practice group. She previously served as Chairman
and Member of the National Labor Relations Board from 1975 to 1979
and as Administrator of the Wage & Hour Division of the U.S.
Department of Labor from 1974 to 1975. She has had five additional
Presidential appointments to special commissions, including the
Commission on the Bicentennial of the U.S. Constitution. Ms. Murphy
is a trustee of The American University, Washington, D.C.
Michael D. Rose Michael D. Rose, age 55, is Chairman of the Board of The Promus
Director since 1995 Hotel Corporation. Promus Hotel Corporation was created when the
Promus Companies Incorporated split in 1995. Mr. Rose joined Promus'
predecessor company, Holiday Corporation, in 1975. He was elected
President in 1979 and held that position until 1984. He was elected
Chief Executive Officer in 1981 and held that position until 1994.
He was elected Chairman of the Board in 1984. In 1988, he resumed
the position of President, which he held until 1991. Mr. Rose is a
director of Ashland, Inc., First Tennessee National Corp.,
SteinMart, Inc. and General Mills, Inc.
Jack A. Smith Jack A. Smith, age 62, is Chairman and Chief Executive Officer of
Director since 1995 The Sports Authority, Inc., a chain of sporting goods stores, which
he founded in 1987. He previously served as Chief Operating Officer
of Herman's Sporting Goods, President and Chief Executive Officer of
Diana Shops, a national women's apparel chain, and held other
management positions with Sears, Roebuck & Co. and Montgomery Ward
Holding Corporation. He is a director of The Sports Authority, Inc.,
Marks Brothers Jewelers, Inc., the National Sporting Goods
Association and Nova Southeastern University.
Blaine Sweatt, III Blaine Sweatt, III, age 49, is President, New Business Division, for
Director since 1995 the Company. He joined the Red Lobster organization in 1976 and was
named Director of New Restaurant Concept Development in 1981. Mr.
Sweatt led the teams that developed The Olive Garden, China Coast
and Bahama Breeze concepts. He was named a Vice President of General
Mills, Inc. in 1985 and a Senior Vice President in 1994. He was
named an Executive Vice President of the Company in 1995.
</TABLE>
THESE EIGHT (8) PERSONS WILL BE PLACED IN NOMINATION FOR ELECTION TO THE
BOARD OF DIRECTORS. THE SHARES REPRESENTED BY THE PROXY CARDS RETURNED WILL BE
VOTED FOR THE ELECTION OF THESE NOMINEES UNLESS YOU SPECIFY OTHERWISE.
BOARD COMPENSATION AND BENEFITS
Employee directors do not receive additional compensation for serving on the
Board of Directors. Non-employee directors receive an annual retainer of $12,500
plus $1,000 for each Board meeting attended and $700 for each committee meeting
attended. The non-employee directors' remuneration is paid quarterly, unless
payment is deferred. Under the Company's Compensation Plan for Non-Employee
Directors, which has a total of 50,000 shares of Common Stock authorized, each
year the non-employee directors may elect to receive all or a portion of their
cash remuneration (i) in cash payments; (ii) in cash payments deferred until the
director retires, with such amounts earning interest; (iii) in Common Stock
having a market value equal to the remuneration due; or (iv) in a combination of
the foregoing
4
<PAGE>
alternatives. In addition to the cash remuneration, under the Company's Stock
Plan for Non-Employee Directors, which has a total of 250,000 shares authorized,
each such director receives 3,000 shares of restricted Common Stock annually
upon election or re-election, which restrictions lapse at the earlier of the
next year's annual meeting date or the director's retirement from the Board.
Each non-employee director also receives a one-time stock option grant for
12,500 shares of Common Stock upon election to the Board and an additional
option to purchase 3,000 shares of Common Stock upon election or re-election to
the Board. In addition, each director may choose to receive options determined
to be of equal value ("SRO's") to the cash compensation for directors' fees.
Such options have an exercise price equal to the fair market value of the Common
Stock on the date of grant and are exercisable after three years, except for
"SRO's", which are exercisable after six months. The Company also pays the
premiums on directors' and officers' liability and business travel accident
insurance policies covering the directors.
COMMITTEES OF THE BOARD
During the fiscal year ended May 25, 1997, the Board of Directors met and/or
took action three times and the various committees of the Board met and/or took
action a total of five times. Attendance at Board meetings and all committee
meetings averaged 91.4%. Each incumbent director standing for election attended
more than 75% of the Board meetings and the meetings of Board committees on
which the director served. The committees of the Board and their membership as
of the close of fiscal 1997 are described below.
AUDIT COMMITTEE. The Audit Committee consists of four non-employee
directors: H. B. Atwater, Jr. (Chair), John P. Birkelund, Betty Southard Murphy
and Jack A. Smith. The Audit Committee met once during fiscal 1997 and, again,
on June 17, 1997 to determine the recommendation to the Board of Directors
regarding the nomination of an independent auditor for shareholder vote at the
Annual Meeting on September 25, 1997. The Audit Committee meets separately with
representatives of the Company's independent auditors and with representatives
of senior management and the internal auditors. In addition to making
recommendations to the Board regarding the nomination of an independent auditor
for the Company, the Committee reviews (i) the general scope of audit coverages;
(ii) the fees charged by the independent auditors; (iii) matters relating to the
internal control systems; (iv) the value of intangibles; and (v) the expenses of
senior executives.
COMPENSATION COMMITTEE. The Compensation Committee consists of four
non-employee directors: Michael D. Rose (Chair), H. B. Atwater, Jr., Daniel B.
Burke and Jack A. Smith. The Compensation Committee met two times during fiscal
1997. The Committee administers the stock option and incentive plans of the
Company, and in this capacity it makes or recommends all option grants or awards
under these plans. In addition, the Committee makes recommendations to the Board
with respect to the compensation of the Chief Executive Officer and reviews the
compensation paid to other corporate officers. The Committee also recommends the
establishment of policies dealing with various compensation and employee benefit
plans for the Company. See page 11 for the Committee's report on executive
compensation.
EXECUTIVE COMMITTEE. The Executive Committee consists of five directors:
Joe R. Lee (Chair), H. B. Atwater, Jr., Daniel B. Burke, Michael D. Rose and
Jack A. Smith. The Executive Committee did not meet in fiscal 1997. Pursuant to
the Company's By-Laws, the Executive Committee has the authority to take all
actions that could be taken by the full Board of Directors. It may meet between
regularly scheduled Board meetings to take such action as is necessary for the
efficient operation of the Company.
FINANCE COMMITTEE. The Finance Committee consists of four non-employee
directors: John P. Birkelund (Chair), Betty Southard Murphy, Michael D. Rose and
Daniel B. Burke. The Finance Committee took one action by consent during fiscal
1997. The Committee reviews and makes recommendations relating to public
offerings of debt and equity securities, major borrowing commitments and other
significant financial transactions, including the dividend policy of the
Company.
5
<PAGE>
NOMINATING COMMITTEE. The Nominating Committee consists of four
non-employee directors: H. B. Atwater, Jr. (Chair), John P. Birkelund, Betty
Southard Murphy and Michael D. Rose. The Nominating Committee did not meet
during fiscal 1997, but took action by consent in July, 1997, to nominate
directors for election at the September 25, 1997 meeting of stockholders. The
Committee's duties include proposing a slate of directors for election by the
stockholders at each annual meeting and proposing candidates to fill vacancies
on the Board. It conducts research to identify suitable candidates for Board
membership and seeks individuals who will make a substantial contribution to the
Company. It will consider candidates proposed by stockholders. Generally,
candidates must be highly qualified and have a sincere desire to serve on the
Board. They should represent the interests of all stockholders and not those of
a special interest group. A stockholder wishing to nominate a candidate should
forward the candidate's name and a detailed background of the candidate's
qualifications to the Secretary of the Company. Pursuant to a shareholder
proposal of the National Electrical Benefit Fund under Rule 14(a)-8 of the
Securities and Exchange Commission's proxy regulations, which proposal has been
withdrawn, the Committee has adopted a policy which, in summary, states that an
outside director may only have an insignificant, i.e., less than 1%, financial
relationship with the Company (excluding directors' fees and stock ownership),
except that any member of the Compensation or Nominating Committees may not have
any such financial relationship.
PUBLIC RESPONSIBILITY COMMITTEE. The Public Responsibility Committee
consists of four non-employee directors: Betty Southard Murphy (Chair), H. B.
Atwater, Jr., John P. Birkelund and Daniel B. Burke. The Public Responsibility
Committee met once in fiscal 1997. The duties of the Committee are to review and
make recommendations regarding the Company's policies, programs and practices to
assure that they are consistent with social and legal obligations to employees,
consumers and society.
SHARE OWNERSHIP OF DIRECTORS AND OFFICERS
Set forth in the following table is the beneficial ownership of Common Stock
as of May 25, 1997 for each director, each executive officer named in the
Summary Compensation Table on page 8, and all directors and executive officers
as a group. Except as otherwise indicated, the named beneficial owner has sole
voting and investment power with respect to the shares held by such beneficial
owner.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF COMMON
BENEFICIAL STOCK OUTSTANDING
NAME OF BENEFICIAL OWNER OWNERSHIP(1) (*LESS THAN 1%)
- -------------------------------------------------- ---------------------- ---------------------
<S> <C> <C>
H. B. Atwater, Jr. ............................... 1,587,961(2) 1.04%
John P. Birkelund................................. 31,000 *
Bradley D. Blum................................... 226,065(3) *
Daniel B. Burke................................... 14,730 *
Joe R. Lee........................................ 1,227,377(4)(5) *
Betty Southard Murphy............................. 10,920(2) *
Jeffrey J. O'Hara................................. 499,426(4) *
Michael D. Rose................................... 13,833 *
Jack A. Smith..................................... 11,711(2) *
Blaine Sweatt, III................................ 414,445(4) *
Clifford L. Whitehill............................. 295,523 *
All Directors and Officers
as a Group (16 persons)......................... 4,743,964 3.10%
</TABLE>
(FOOTNOTES ON FOLLOWING PAGE)
6
<PAGE>
(FOOTNOTES FOR PRECEDING PAGE)
- ------------------------
(1) Includes the following shares subject to options exercisable within 60 days
of May 25, 1997: H. B. Atwater, Jr., 1,088,543 shares; Bradley D. Blum,
186,379 shares; Daniel B. Burke, 1,879 shares; Joe R. Lee, 885,605 shares;
Jeffrey J. O'Hara, 414,318 shares; Michael D. Rose, 1,879 shares; Blaine
Sweatt, III, 362,468 shares; Clifford L. Whitehill, 226,747 shares and all
Directors and Officers as a group, 3,541,586 shares. These numbers do not
include the following fiscal 1997 restricted stock awards granted June 17,
1997: Bradley D. Blum, 3,736 shares; Blaine Sweatt, III, 902 shares; and
Clifford L. Whitehill, 1,891 shares.
(2) Includes the following shares held in the common stock fund of the Company's
Compensation Plan for Non-Employee Directors: H. B. Atwater, Jr., 2,604
shares; Jack A. Smith, 4,711 shares, and Betty Southard Murphy, 1,725
shares. The director or named officer does not have voting power with
respect to the shares held by such beneficial owner.
(3) Includes 200 shares held in a trust for a family member.
(4) Includes the following shares allocated to the PSSP accounts of the named
officer as of May 25, 1997: Joe R. Lee, 953 shares; Jeffrey J. O'Hara, 1,941
shares; and Blaine Sweatt, III, 1,413 shares.
(5) Includes 800 shares owned by Joe R. Lee's wife.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During fiscal year 1997, the Company employed the law firm of Baker &
Hostetler in which director Betty Southard Murphy is a partner. In fiscal year
1997, the Company paid $173,365 in fees to Baker & Hostetler. This amount is not
considered material to the Company or to Baker & Hostetler.
ITEM NO. 2
APPROVAL OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The stockholders are asked to consider and approve the appointment by the
Board of Directors of KPMG Peat Marwick LLP ("KPMG"), an independent certified
public accounting firm, to audit the consolidated financial statements of the
Company for the fiscal year beginning May 26, 1997. KPMG has audited the
financial statements of the Company since 1995. Representatives of the firm will
attend the Annual Meeting, will have the opportunity to make a statement if they
desire, and will also be available to answer questions.
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR THE APPOINTMENT OF KPMG PEAT
MARWICK LLP AS THE INDEPENDENT AUDITORS AND YOUR PROXY WILL BE SO VOTED UNLESS
YOU SPECIFY OTHERWISE.
OTHER BUSINESS
The Company is not aware of any business to be acted upon at the Annual
Meeting other than that which is explained in this Proxy Statement. In the event
that any other business calling for a vote of the stockholders is properly
presented at the meeting, the holders of the proxies will vote your shares in
accordance with their best judgment.
7
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth the cash compensation and certain other
components of compensation for the last three fiscal years of the Chief
Executive Officer and the Company's four other most highly compensated executive
officers.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------ ------------------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL YEAR SALARY BONUS COMPENSATION AWARDS OPTIONS COMPENSATION
POSITION (1) ($) ($) ($) (2) ($) (3) (4) (#) (5) ($) (6)
- --------------------------------------------------- ---- ------- ------- ------------ ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
J. R. LEE.......................................... 1997 575,000 0 0 0 0 178,755
Chairman of the Board and 1996 575,000 140,500(7) 33,866 70,241 539,858 325,041
Chief Executive Officer 1995 438,734 0 0 0 149,314 81,172
J. J. O'HARA (8)................................... 1997 450,000 0 0 0 0 61,979
President and Chief 1996 444,231 189,300 0 47,317 350,000 99,442
Operating Officer 1995 321,154 190,200 0 47,543 82,009 71,110
B. D. BLUM......................................... 1997 261,537 134,500 0 33,625 0 40,083
President, 1996 233,750 115,100 19,985 28,764 144,900 65,397
The Olive Garden 1995 178,961 61,800 0 23,495 44,712 22,170
C. L.WHITEHILL..................................... 1997 239,000 68,100 0 17,025 0 141,097
Senior Vice President, 1996 239,000 100,400 1,661 25,098 71,100 97,124
General Counsel 1995 231,571 50,000 0 0 30,188 27,381
B. SWEATT, III..................................... 1997 266,153 32,500 0 8,125 0 45,409
President, 1996 256,538 41,200 0 10,293 186,500 71,054
New Business Division 1995 219,711 41,400 0 10,348 61,696 31,926
</TABLE>
- ------------------------
(1) Annual compensation and long-term compensation for fiscal 1995 were
determined solely by General Mills, Inc. ("General Mills") prior to May 29,
1995 (the "Distribution Date") when the Company become an independent New
York Stock Exchange corporation.
(2) These amounts relate to tax gross-ups for relocation expenses.
(3) Amounts under this column for fiscal 1997 are based on the fair market value
($9.00) of Common Stock as of June 17, 1997, which determined the value of
restricted stock granted on that date under the Darden Restaurants
Management Incentive Plan ("MIP"). Under the MIP, participants must deposit
with the Company, one personally-owned share of Common Stock for each share
of restricted stock awarded, which vests 100% in three years, provided the
participant's shares remain on deposit until the end of the corresponding
restricted period. Regular dividends are paid on all restricted shares.
Restricted stock immediately vests in the event of a change of control. The
number and value of aggregate restricted stock holdings including the 1997
award (valued at the fair market value of $9.00 as of June 17, 1997) and all
other awards (valued at the fair market value of $8.375 as of May 23, 1997)
total: J. R. Lee--23,603 shares ($197,675); J. J. O'Hara--21,749 shares
($182,148); B. D. Blum--35,304 shares ($298,006); C. L. Whitehill--4,027
shares ($34,908); and B. Sweatt, III-- 23,186 shares ($194,747).
(4) Amounts in this column for fiscal 1995 are based on the value ($10.6239) of
Common Stock as of the Distribution Date for Darden restricted stock issued
upon conversion of General Mills restricted stock. Amounts for fiscal 1996
are based on the value ($11.75) of Common Stock as of May 23, 1996, which
determined the value of restricted stock granted on that date under the MIP.
8
<PAGE>
(5) The above named officers were awarded double their annual number of stock
options in fiscal 1996. As a result, these officers were not granted stock
options in fiscal 1997. For the following officers, the amounts shown for
fiscal 1996 also include the following salary replacement option grants; B.
D. Blum--24,900; C. L. Whitehill--11,100; and B. Sweatt, III--26,500. For J.
R. Lee, the amount shown for fiscal 1996 includes a grant of 39,858 bonus
replacement (see also footnote 7). The stock option grants shown in this
column for 1995 represent stock options for Darden Common Stock granted
under the Company's Stock Option and Long-Term Incentive Conversion Plan
("Conversion Plan") as a result of the conversion of General Mills options
granted to the named officers in fiscal 1995.
(6) These amounts for fiscal 1997 include the following components: (1)
allocations relating to FlexComp, the Company's deferred compensation plan,
(2) reimbursement for unused vacation time, (3) an income imputation for
life insurance greater than $50,000, (4) reimbursement of relocation
expenses, (5) reimbursement for financial counseling, (6) an income
imputation for personal use of company plane, and (7) an income imputation
for personal use of company car. For the following officers, the amounts for
these components are: J. R. Lee--$147,793 (1) and $30,962 (2); J. J.
O'Hara--$61,979 (1); B. D. Blum--$38,375 (1) and $1,708 (4); C. L.
Whitehill--$72,767 (1), $9,192 (2), $31,346 (3), $10,601 (4), $5,000 (5),
$3,752 (6), and $8,439 (7); B. Sweat--$45,409 (1).
(7) The fiscal 1996 annual incentive for J. R. Lee was reduced by 50% in lieu of
a grant of 39,858 bonus replacement options.
(8) Mr. O'Hara resigned as a director and officer of the Company on June 20,
1997.
OPTION GRANTS IN LAST FISCAL YEAR
The five most highly compensated executive officers were awarded double
their annual number of stock options in fiscal 1996. As a result, these officers
were not granted stock options in fiscal 1997. (See footnote 5 to Summary
Compensation Table.)
9
<PAGE>
STOCK OPTIONS
The following table summarizes the stock option exercises by the executive
officers named in the Summary Compensation Table during fiscal year 1997 and the
value of the stock options held by such officers at the end of the fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING
UNEXERCISED OPTIONS AT FISCAL YEAR END ($)
---------------------------------------------------------
SHARES VALUE CONVERSION PLAN (1) 1995 PLAN (2)
ACQUIRED ON REALIZED --------------------------- ---------------------------
NAME EXERCISE # ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------- ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. R. Lee....... 0 0 740,717 229,987 39,858(4) 500,000
J. J. O'Hara.... 0 0 371,114 113,706 -- 350,000
B. D. Blum...... 0 0 157,797 55,662 9,960(5) 134,940
C. L.
Whitehill..... 6,393 $25,588.58 199,107 50,468 4,440(5) 66,660
B. Sweatt,
III........... 0 0 309,856 95,142 10,600(5) 175,900
<CAPTION>
IN-THE-MONEY OPTIONS
AT FISCAL YEAR END ($)(3)
---------------------------
NAME EXERCISABLE UNEXERCISABLE
- ---------------- ----------- -------------
<S> <C> <C>
J. R. Lee....... $930,873 $ --
J. J. O'Hara.... $454,959 $ --
B. D. Blum...... $146,093 $ --
C. L.
Whitehill..... $166,290 $ --
B. Sweatt,
III........... $492,083 $ --
</TABLE>
- ------------------------
(1) These options were granted as a result of the conversion of General Mills
stock options granted to the named officers in 1995. General Mills options
were adjusted so that two-thirds of the aggregate economic value of each
stock option grant was retained in adjusted General Mills stock options
(both the price and number of options were adjusted). General Mills stock
options retained by the named officers are not reported in this table. One
third of the aggregate economic value of each stock option grant was
converted into newly issued stock options for Company Common Stock. The
economic value at the date of conversion of each named officer's stock
option grants was neither increased nor decreased as a result of these
adjustments, other than small differences due to rounding of whole shares.
(2) These options were granted under the 1995 Plan.
(3) Value of all unexercised options equals the fair market value at May 23,
1997 ($8.375) of the shares underlying in-the-money options, less the
exercise price, times the number of in-the-money options outstanding.
(4) For J. R. Lee, the amount shown represents 39,858 bonus replacement options
granted in fiscal 1996 (see footnote 7 of the Summary Compensation Table).
(5) These salary replacement options, granted under the 1995 Plan, benefit the
Company by reducing the future cash compensation paid to the named officers,
with corresponding reductions in cash bonuses and similar effects on
benefits which are tied to base salary.
CHANGE IN CONTROL ARRANGEMENTS
At the end of fiscal 1997, the Company had management continuity agreements
with ten of its executive officers, including those named in the Summary
Compensation Table on page 8, providing for guaranteed severance payments equal
to three times the annual compensation of the officer (salary plus cash bonus
award) and continuation of health and similar benefits for a three-year period
if the officer is terminated without cause within two years after a change of
control. These agreements also provide that the severance payment shall be
reduced by an amount necessary to ensure that the foregoing payments are not
subject to any excise taxes that might otherwise be payable under Code Section
4999 of the Internal Revenue Code (the "Code") or any similar tax. The Company
also has entered into related trust agreements to provide for payment of amounts
under its non-qualified deferred compensation plans, including the directors'
compensation plans, the Management Incentive Plan and the management continuity
agreements. Full funding is required in the event of a change of control. To
date, only a nominal amount has been paid into each trust.
In addition, stock options, restricted stock and restricted stock units
issued under the Stock Option and Long-Term Incentive Plan of 1995 (the "1995
Plan") and the Stock Option and Long-Term Incentive Conversion Plan (the
"Conversion Plan") all immediately vest in full in the event of a Change of
Control, as defined in such Plans.
10
<PAGE>
STOCK OWNERSHIP GUIDELINES AND STOCK PURCHASE/LOAN OPPORTUNITY
On June 17, 1997, the Company adopted stock ownership guidelines for
executive management. The guideline for the Chief Executive Officer is to own
after seven years Company stock valued at a multiple of four times base salary.
Other officer guidelines range from a multiple of three times base salary to
one-half times base salary depending on the level of responsibility in the
organization. To assist the executive in meeting these guidelines, the Company
implemented a one-time stock purchase/loan program (the "1998 Stock
Purchase/Loan Program") under the 1995 Plan that matches two options for every
new share purchased up to a maximum total share value equal to a percentage of
such executive's base compensation. The loan is full recourse and interest
bearing with a maximum loan amount of 75% of the value of the stock purchased.
All stock purchased is held on deposit with the Company until the loan payment
requirements are met. In July of 1997 (fiscal 1998), 54 officers participated in
the 1998 Stock Purchase/ Loan Program, receiving two options for every share
purchased. The program resulted in the purchase of a total of 185,142 shares by
Company officers.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
composed entirely of independent outside directors (see page 5). The Committee
is responsible for setting and administering the policies that govern both
annual compensation and stock ownership programs. The Committee annually
certifies corporate performance objectives and evaluates the Company's corporate
performance for incentive plans.
From time to time the Committee will use outside, independent consultants to
provide it with background information in performing its duties. During fiscal
1996, the Committee engaged the services of two nationally known compensation
consulting firms to review and analyze the Company's pay program. Those firms
found that:
- The current program is sound in its focus on performance;
- The current program has a good mix of short and long-term incentives; and
- The current program places more emphasis on long-term incentives than the
Company's peers, and as a result, has strong alignment with stockholders.
A competitive analysis was not conducted in fiscal 1997.
The Company uses cash and stock-based compensation for three purposes: (1)
to focus executives on short and long-term business strategy; (2) to reward
individual, business unit and corporate performance; and (3) to align
executives' interests with those of stockholders. Ultimately, the goal is to
maximize the success of the Company. As detailed in the Summary Compensation
Table (see page 8), a significant portion of the Company's pay for executives is
variable and is linked to performance.
CASH COMPENSATION
The Company's goal for cash compensation is to pay competitive base
salaries, coupled with an annual incentive plan (the Management Incentive Plan).
If individual, as well as corporate and/or unit performance, is above average
compared to the compensation peer group described below, then total cash
compensation also will be above average within that group. Conversely, if
performance is below average compared to the compensation peer group, then total
cash compensation will also be below average.
The peer group against which compensation and performance are compared is
publicly-traded chain restaurant companies with substantial capitalization.
Supplemental pay data is obtained from hospitality, retail and other general
industry companies.
11
<PAGE>
The compensation peer group is a broader group than the S&P Restaurant Index
used in the Total Shareholder Return performance graph on page 15. The S&P
Restaurant Index is the only published index for purposes of such comparison,
but does not include all appropriate comparable companies for compensation
purposes.
The Company also encourages executives to trade-off cash compensation for
stock-based compensation. This is discussed below under "Stock-Based
Compensation".
BASE SALARY INCREASES
Base salary increases, if any, for executive officers are determined
annually by the Committee based on the individual performance of the executive
officer and where the executive's pay stands competitively compared to the
compensation peer group. The budgeted salary increase for all employees is also
considered in determining base salary increases for executive officers.
MANAGEMENT INCENTIVE PLAN
Annual cash incentive awards are granted by the Committee to executive
officers under the Management Incentive Plan based on the following factors:
corporate performance, business unit performance and individual performance.
Awards to key executives shall be based on the comparative impact of the
individual's position to the overall corporate results as measured by the
position level, base salary of the individual and the degree to which such
individual is able to affect the division, group or overall corporate result.
The Company set its business plan aggressively for fiscal 1997 with the goal
of achieving approximately 75th percentile performance measured against the
compensation peer group for both the Company and its business units. Pursuant to
the terms and conditions of the Management Incentive Plan, the Committee met on
June 17, 1997, to evaluate and determine a corporate rating for the Company.
This rating is based upon earnings per share growth and return on average
capital for the 1997 fiscal year compared to targets established by the
Committee at the inception of the fiscal year. For fiscal 1997, the corporate
ratings could range from 0.50 to 1.8 with top quartile performance represented
by a 1.5 or higher rating.
With an EPS growth of -53.3% and a ROC of 4.6%, the Company's results for
fiscal 1997 were disappointing. These results were due primarily to poor
performance at Red Lobster, offset to some extent by strong performance at The
Olive Garden and Bahama Breeze. As a result, the Committee determined that the
Company's corporate rating should be .60. This .60 corporate rating resulted in
the lowered bonus payments to all but one of the five most highly compensated
executive officers as reported in the Summary Compensation Table (see page 8).
For fiscal 1998, the Compensation Committee has set a target to achieve
significant improvement over fiscal 1997. Achievement of that target would
represent more than a 50% increase in EPS growth performance compared to fiscal
1997 results (before unusual items), and, if achieved, would result in a 75th
percentile incentive compensation level. For fiscal 1998, a range of 0.0 to 2.0
has been established for a corporate rating with target performance represented
by a 1.45 rating or greater.
STOCK-BASED COMPENSATION
The Committee and management believe that broad and deep employee stock
ownership effectively motivates the building of stockholder wealth and aligns
the interests of employees with those of the stockholders. At the end of fiscal
1997, approximately 19% of the Company's outstanding shares were either owned by
the Employee Stock Ownership Plan, or employees and non-employee members of the
Board of Directors, or were under options granted to employees and non-employee
members of the Board of Directors.
12
<PAGE>
The Committee uses the 1995 Plan to attract and retain able employees by the
awarding of stock options, restricted stock and restricted stock units. Such
employees are defined as those who are responsible for the growth and sound
development of the business of the Company. Awards under the 1995 Plan are
intended to align the interests of such employees with those of the
stockholders.
Regular stock options are granted by the Committee to the executive officers
and other employees based on their potential impact on corporate results (i.e.,
the person's level of responsibility in the organization) and on their
individual performance. A total of 51 employees were granted options under this
program in fiscal 1997, and on June 17, 1997, options were granted to 4,220
employees. The size of regular stock option grants to the Chief Executive
Officer and other executive officers is periodically reviewed against option
grants made by other large restaurant companies in the compensation peer group
previously described. The stock option grant made to executive officers in
fiscal 1996 was two times an annual competitive grant and was intended to cover
two years. Therefore, no grant was made to these executives in fiscal 1997.
Under the provisions of the 1995 Plan, the Company allows executives to
trade-off part of their annual cash incentive payout in return for an additional
stock option grant, referred to as a "bonus replacement option". The size of the
option grant is based on the value of the foregone incentive payout and the
present value of the projected stock option value. Executive officers may elect
to reduce their annual cash incentive payout by a maximum of 50% for a grant of
bonus replacement options.
The 1995 Plan also authorizes the Committee to make awards to selected
employees of restricted stock of up to 10% of the shares authorized under the
plan, and in that connection to determine the number of shares to be awarded,
the length of the restricted period, the purchase price, if any, to be paid by
the participant, and whether any other restrictions will be imposed with respect
to such awards.
The majority of restricted shares have been and will be granted as part of
the stock matching program for participants in the Management Incentive Plan,
described on page 12, requiring the participant to place on deposit one share of
Common Stock owned for each share of restricted stock awarded. The size of each
restricted stock award in that program is equal in value to 15% or 25%
(depending on position level) as specified under the 1995 Plan of the
participant's annual cash incentive award. If the deposit shares are withdrawn
prior to the end of the three-year vesting period, then the unvested restricted
stock award is forfeited.
The Summary Compensation Table on page 8 summarizes the options and
restricted stock awards granted in fiscal 1997 to the five most highly
compensated executive officers. Included in the totals are options granted as
bonus replacement options.
FLEX COMP BENEFITS
None of the Company's executive officers presently participate in a
retirement plan qualified under the Employee Retirement Income Security Act of
1974, as amended ("ERISA"). Instead, they participate in FlexComp, a
nonqualified deferred compensation arrangement. The Company's annual FlexComp
contribution equals 3% of the executive's eligible annual earnings plus an
additional percent of the executive's eligible annual earnings based on the
executive's age and years of service with the Company during which the officer
may have been a participant in an ERISA qualified retirement plan. FlexComp
participants elect to have their FlexComp contributions credited with rates of
return based on several investment alternatives. Therefore, the plan does not
have a guaranteed retirement benefit. The annual FlexComp contributions made by
the Company for the accounts of the five most highly compensated executive
officers are shown in the Other Annual Compensation column of the Summary
Compensation Table on page 8.
13
<PAGE>
CHIEF EXECUTIVE OFFICER COMPENSATION
The Chief Executive Officer's base salary was established by the
Compensation Committee of General Mills at $575,000 in May, 1995. This rate
remained for fiscal 1996 and fiscal 1997. This amount is lower than the
competitive size-adjusted market average.
The Committee met (without the Chief Executive Officer) on June 17, 1997, to
evaluate the Chief Executive Officer's performance for fiscal 1997 and their
evaluation was reported to the independent directors of the Board. For fiscal
1997, the Compensation Committee rating for J. R. Lee resulted in no bonus being
paid in fiscal 1997.
Also, no stock options were granted to Mr. Lee in fiscal 1997 because he
received an award of double his annual number of stock options in fiscal 1996.
LOANS TO EXECUTIVE OFFICERS
In July of 1997, each of the following executives listed in the Summary
Compensation Table (see page 8) received loans equaling up to 75% of the value
of the stock he purchased in connection with his participation in the 1998 Stock
Purchase/Loan Program (see page 11). Loans for all participants of the program
totalled $1,190,012. J. R. Lee received a loan in the amount of $154,291; B. D.
Blum received a loan in the amount of $79,839; C. L. Whitehill received a loan
in the amount of $34,189; and B. Sweatt, III received a loan in the amount of
$58,229.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Unless the conditions specified in the regulations under Section 162(m) of
the Internal Revenue Code are met, the Code limits the Company's ability to
deduct, for federal income tax purposes, certain compensation in excess of $1
million per year paid to persons named in the Summary Compensation Table. The
amount of compensation which was paid in fiscal 1997 to individual officers was
less than $1 million. The Company believes that it meets all other requirements
for deductibility of executive compensation and will monitor whether its plans
require any future amendments to continue to meet the deductibility requirements
of the tax law without compromising the flexibility needed to design effective
compensation plans that meet the Company's executive compensation goals as
described above.
SUMMARY
The Compensation Committee is satisfied that the compensation and long-term
incentive plans provided to the Chief Executive Officer and the other executive
officers of the Company are structured and operated so as to support the
Company's business strategy and to create strong linkage and alignment with the
long-term best interests of the Company and its stockholders. The Committee will
periodically reevaluate these programs to ensure they continue to do so.
COMPENSATION COMMITTEE
Michael D. Rose, Chair
Daniel B. Burke
Jack A. Smith
H. B. Atwater, Jr.
14
<PAGE>
COMPARISON OF TWO-YEAR TOTAL RETURN
BASED ON A $100 INVESTMENT ON THE DISTRIBUTION DATE (5/29/95)
<TABLE>
<CAPTION>
TOTAL RETURN INDEX MAY-95 AUG-95 NOV-95 FEB-96 MAY-96 AUG-96 NOV-96 FEB-97
- ------------------------------------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Darden Restaurants, Inc............ 100.00 95.40 103.81 114.19 108.75 74.04 79.04 65.09
S&P 500............................ 100.00 107.56 115.93 128.06 132.61 131.07 147.93 159.17
S&P Restaurant Index............... 100.00 101.61 119.33 138.20 132.12 126.92 128.37 122.68
<CAPTION>
TOTAL RETURN INDEX MAY-97
- ------------------------------------- ---------
<S> <C>
Darden Restaurants, Inc............ 77.15
S&P 500............................ 169.01
S&P Restaurant Index............... 137.87
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DARDEN S&P 500 S&P RESTAURANT INDEX
<S> <C> <C> <C>
May-95 $ 100.00 $ 100.00 $ 100.00
Aug-95 $ 95.40 $ 107.56 $ 101.61
Nov-95 $ 103.81 $ 115.93 $ 119.33
Feb-96 $ 114.19 $ 128.06 $ 138.20
May-96 $ 108.75 $ 132.61 $ 132.12
Aug-96 $ 74.04 $ 131.07 $ 126.92
Nov-96 $ 79.04 $ 147.93 $ 128.37
Feb-97 $ 65.09 $ 159.17 $ 122.68
May-97 $ 77.15 $ 169.01 $ 137.87
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's directors and executive officers, and persons who beneficially
own more than ten percent of the Company's Common Stock, are required under the
Securities Exchange Act of 1934 to file reports of ownership and changes in
ownership of the Company's Common Stock with the Securities and Exchange
Commission and the New York Stock Exchange. To the Company's knowledge, all
required reports were filed on a timely basis during fiscal 1997.
STOCKHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING
Any stockholder proposal intended to be presented for consideration at the
1998 Annual Meeting and to be included in the Company's proxy statement must be
received at the principal executive offices of the Company by the close of
business on April 14, 1998. Proposals should be sent to the attention of the
Secretary.
15
<PAGE>
STOCK TRANSFER AGENT
Effective September 29, 1997, First Union National Bank will become the
Transfer Agent and Registrar for the stock of Darden Restaurants, Inc. After
September 29, shareholder matters such as transfer of shares, stock transfer
requirements, missing stock certificates and changes of address, should be
directed to First Union at the following address and telephone number:
First Union National Bank
Shareholder Services Group
1525 W. WT Harris Blvd.; 3C3
Charlotte, NC 28288-1153
Telephone Numbers: (704) 590-0394, or toll free (800) 829-8432.
YOUR VOTE IS IMPORTANT!
Please sign and promptly return your proxy in the enclosed envelope.
16
<PAGE>
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS
MADE, IT WILL BE VOTED "FOR" ITEMS 1 AND 2.
<TABLE>
<C><S> <C><C>
THE DIRECTORS RECOMMEND A VOTE "FOR" ITEMS 1 AND
2.
1. Election of Directors H. B. Atwater, Jr.; Bradley D. Blum; Daniel B. Burke; Joe R. Lee; Betty Southard
Murphy; Michael D. Rose; Jack A. Smith; Blaine Sweatt
/ / FOR all listed nominees / / WITHHOLD AUTHORITY to vote for all listed nominees
/ / LISTED NOMINEES except the following (Instruction: To withhold authority to vote for any individual
nominee, write the name of such nominee(s) in the space provided.)
2. Approval of appointment of KPMG Peat Marwick LLP as independent auditor / / FOR / /
AGAINST / / ABSTAIN
Please indicate whether you will attend the Annual Meeting of Stockholders in Orlando on September 25,
1997.
/ / I plan to attend. / / I do not plan to attend.
</TABLE>
<PAGE>
DARDEN RESTAURANTS, INC.
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints J.R. Lee and C.L. Whitehill, and each of them, as proxies with full power of
substitution, to vote all shares of common stock which the undersigned has power to vote at the Annual Meeting of
Stockholders to be held at 11:30 a.m. EDT on September 25, 1997 at Orlando, Florida, and at any adjournment
thereof, in accordance with the instructions set forth herein and with the same effect as though the undersigned
were present in person and voting such shares. The proxies are authorized in their discretion to vote upon such
other business as may properly come before the meeting.
</TABLE>
Dated: _______________________________________
______________________________________________
(Signature)
______________________________________________
(Signature)
<PAGE>
PLEASE SIGN EXACTLY AS NAME APPEARS ABOVE. JOINT
OWNERS SHOULD EACH SIGN. EXECUTORS,
ADMINISTRATORS, TRUSTEES, ETC. SHOULD SO INDICATE
WHEN SIGNING. IF SIGNER IS A CORPORATION, PLEASE
SIGN FULL NAME BY DULY AUTHORIZED OFFICER.
<TABLE>
<S> <C>
</TABLE>
<PAGE>
DARDEN RESTAURANTS, INC.
ANNUAL MEETING
RENAISSANCE ORLANDO RESORT, 6677 SEA HARBOR DRIVE, ORLANDO, FLORIDA 32821
SEPTEMBER 25, 1997, 11:30 A.M. EASTERN DAYLIGHT SAVINGS TIME
DARDEN RESTAURANTS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints J.R. Lee and C.L. Whitehill, and each of
them, as proxies with full power of substitution, to vote all shares of common
stock which the undersigned has power to vote at the Annual Meeting of
Stockholders to be held at 11:30 a.m. EDT on September 25, 1997 at Orlando,
Florida, and at any adjournment thereof, in accordance with the instructions set
forth herein and with the same effect as though the undersigned were present in
person and voting such shares. The proxies are authorized in their discretion to
vote upon such other business as may properly come before the meeting.
Dated: _________________________________
(Signature)
________________________________________
(Signature)
________________________________________
Please sign exactly as name appears
above. Joint owners should each sign.
Executors, administrators, trustees,
etc. should so indicate when signing. If
signer is a corporation, please sign
full name by duly authorized officer.
<PAGE>
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS MADE, IT WILL BE VOTED
"FOR" ITEMS 1 AND 2.
THE DIRECTORS RECOMMEND A VOTE "FOR" ITEMS 1 AND 2
1. Election of Directors H. B. Atwater, Jr.; Bradley D. Blum; Daniel B. Burke;
Joe R. Lee; Betty Southard Murphy; Michael D. Rose; Jack A. Smith; Blaine
Sweatt
/ / FOR all listed nominees / / WITHHOLD AUTHORITY to vote for all listed
nominees
/ / LISTED NOMINEES except the following
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THE NAME OF SUCH NOMINEE(S) IN THE SPACE PROVIDED.)
________________________________________________________________________________
2. Approval of appointment of KPMG Peat Marwick LLP as independent auditors
/ / FOR / / AGAINST / / ABSTAIN
Please indicate whether you will attend the Annual Meeting of Stockholders
in Orlando on September 25, 1997.
/ / I plan to attend.
/ / I do not plan to attend.
