EXHIBIT 10(h)
MANAGEMENT AND PROFESSIONAL INCENTIVE PLAN
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TABLE OF CONTENTS
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PART I. DEFINITIONS.....................................................1
A. Additional Incentive Award...........................................1
B. Agent................................................................1
C. Base Cash Award or Award.............................................1
D. Board................................................................1
E. Change of Control....................................................1
F. Committee............................................................1
G. Common Stock.........................................................1
H. Company..............................................................1
I. Consolidated Earnings................................................1
J. Management Employee..................................................2
K. Original Deposit.....................................................2
L. Participant..........................................................2
M. Plan.................................................................2
N. Plan Year............................................................2
O. Professional Employee................................................2
P. Restricted Stock.....................................................2
Q. Stock Matching.......................................................2
R. Stock Matching Provisions............................................2
S. Actively Employed....................................................2
PART II. GENERAL PROVISIONS...................................................3
A. Objective Of The Plan................................................3
B. Eligibility..........................................................3
C. Participation........................................................3
PART III. BASE CASH AWARDS................................................3
A. Individual Performance...............................................3
B. Corporate Performance................................................4
C. Determination Of Amounts Of Award....................................4
PART IV. ADDITIONAL INCENTIVE AWARDS..........................................4
A. Cash Or Stock Awards.................................................4
B. Participation In Stock Matching......................................4
C. Company Deposit And Delivery Of Restricted Stock.....................5
PART V. DEFERRAL OF CASH INCENTIVE AWARDS....................................6
PART VI. PLAN ADMINISTRATION..................................................6
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PART I
DEFINITIONS
A. Additional Incentive Award
The term "Additional Incentive Award" means a Participant's additional
Award granted under Part IV of this Plan.
B. Agent
The term "Agent" means the Company or such other entity as the
Committee may designate to fulfill the responsibilities of "Agent"
under this Plan.
C. Base Cash Award or Award
The terms "Base Cash Award" or "Award" mean a Participant's base cash
incentive award under this Plan.
D. Board
The term "Board" means the Board of Directors of the Company.
E. Change of Control
The term "Change of Control" means the occurrence of 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) 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;
(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 shall cease to constitute a majority of the
Company's Board of Directors; or
(iii) the stockholders of the Company approve an agreement providing
for a transaction in which the Company will cease to be an
independent publicly-owned corporation or a sale or other
disposition of all or substantially all of the assets of the
Company occurs.
F. Committee
The term "Committee" means the Compensation Committee of the Board.
G. Common Stock
The term "Common Stock" or "Stock" means the common stock of the
Company.
H. Company
The term "Company" means Darden Restaurants, Inc. and its subsidiaries.
I. Consolidated Earnings
The term "Consolidated Earnings" means consolidated net income for the
year for which an Award is made, adjusted to omit the effects of
unusual and extraordinary items, discontinued operations and the
cumulative effects of changes in accounting principles, all as shown on
the audited consolidated statement of earnings of the Company and its
subsidiaries and as determined in accordance with generally accepted
accounting principles.
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J. Management Employee
The term "Management Employee" means any active key management employee
of the Company or its subsidiaries, to the extent designated by the
Senior Vice President, Human Resources, including such members of the
Board and the Chairman as are actively employed by the Company or its
subsidiaries.
K. Original Deposit
The term "Original Deposit" means shares deposited pursuant to Part
IV(B) of this Plan.
L. Participant
The term "Participant" means an individual selected to be a Participant
in accordance with Part II of this Plan.
M. Plan
The term "Plan" means the Darden Restaurants, Inc. Management and
Professional Incentive Plan, formerly known as the Darden Restaurants,
Inc. Management Incentive Plan.
N. Plan Year
The term "Plan Year" means the Company's fiscal year.
O. Professional Employee
The term "Professional Employee" means any professional employee to the
extent designated by the Vice President, Compensation.
P. Restricted Stock
The term "Restricted Stock" means shares described in Part IV(C)(1) of
this Plan.
Q. Stock Matching
The term "Stock Matching" means incentive compensation in the form of
Common Stock made available by the Company on the condition the
Participant deposits a specified amount of Common Stock with the
Company.
R. Stock Matching Provisions
The term "Stock Matching Provisions" means the provisions set forth in
Part IV of this Plan.
S. Actively Employed
The term "Actively Employed" means the Participant is deemed to be an
active employee of the Company, as determined in accordance with the
Company's policies and procedures, provided that the period during
which a Participant is "Actively Employed" will not include any leave
of absence period, except as otherwise determined by the Company's
policies and procedures.
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PART II
GENERAL PROVISIONS
A. Objective Of The Plan
It is the intent of the Company to provide financial rewards to key
management and professional employees in recognition of individual
contributions to the success of the Company under the provisions of
this Plan. As such, the Committee has designed this Plan to accomplish
such objectives.
Participant awards will be based on the comparative impact of the
Participant's position to the overall corporate results as measured by
the degree to which the individual is able to affect
division/subsidiary, group and corporate results.
B. Eligibility
Any Management Employee and any Professional Employee will be eligible
to participate in the Plan. Eligibility will not carry any rights to
participation nor to any fixed awards under the Plan.
C. Participation
As early as possible in each Plan Year, management will recommend a
list of proposed Participants in the Plan, and the Committee thereupon
will determine those who have been selected as Participants for the
current Plan Year. Participants will be those persons holding
positions, which significantly affect operating results, while
providing the 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, and Participants may be excluded from active participation
because of demotion or other reasons warranting their exclusion. In
order to receive an award, a Participant must be Actively Employed as
of the end of the Plan Year for which such award is made, unless the
Participant's termination is due to death or retirement on or after age
55 and 10 years of service, during the Plan Year. In all events in
which a Participant is eligible to receive an award, the award will be
prorated based on the total days employed during the Plan Year in a
position eligible for participation in the Plan.
PART III
BASE CASH AWARDS
The size of a Participant's Base Cash Award under this Plan will be based on
both individual and corporate performance, relative to pre-established
performance objectives.
A. Individual Performance
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's performance
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
assess the individual's performance.
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B. Corporate Performance
At the beginning of each Plan Year, the Committee will establish
corporate and/or unit performance targets, and near the end of each
Plan Year, the Committee will establish corporate and/or unit
performance ratings, based on generally accepted performance measures
to be selected by the Committee such as, but not limited to, earnings
per share, return on cash, return on sales, cash flow, market share,
revenue growth, earnings growth, return on gross investment, total
shareholder return and operating profits.
C. Determination Of Amounts Of Award
The Committee acting in its discretion, subject to the maximum amounts
set forth below will determine the amounts of Awards to Participants.
Such determinations, except in the case of the Award for the Chairman
of the Board, will be made after considering the recommendations of the
Chairman and such other matters as the Committee will deem relevant.
Notwithstanding the foregoing, the maximum Award payable with respect
to any taxable year of the Company to any Participant will not exceed
two tenths of one percent (0.2%) of the Company's annual Sales for such
year (as reflected by the Company's annual audited financial statements
for such year); provided, however, that no Award will be paid for any
such year in which the Company has no Consolidated Earnings (as
reflected by the Company's audited financial statements). For these
purposes, the amount of any Award will include any Additional Incentive
Awards made pursuant to Part IV of this Plan at the value of such
Additional Incentive Award as of the date of grant, regardless of
whether vested. Further, an Award based on a period of more than one
year will be limited to the aggregate Consolidated Earnings and Sales
of the Company for such period of years, excluding any year which the
Company has no Consolidated Earnings.
Awards may be made at any time following the end of the taxable year;
provided, however, that no Awards will be made until: (a) the Committee
receives assurances from both the Corporation's Chief Financial Officer
and its independent accountants that the Company has achieved
Consolidated Earnings for the taxable year(s) and that the amount of
such Award does not exceed the applicable limitation under this Part
III; and (b) the Committee certifies in writing to the Board that the
Consolidated Earnings have been achieved and such limitation has not
been exceeded. Awards will be paid in cash or Common Stock, as so
determined by the Senior Vice President, Human Resources. For purposes
of making these determinations, the value of the Common Stock component
of any Award will be its fair market value on the date of grant.
PART IV
ADDITIONAL INCENTIVE AWARDS
A. Cash Or Stock Awards
Subject, where applicable, to the Stock Matching Provisions, a
Management Employee is eligible to receive an Additional Incentive
Award in the form of cash, or if so determined by the Senior Vice
President, Human Resources, Stock or Stock Matching pursuant to the
terms of the Company's Amended and Restated Stock Option and Long-Term
Incentive Plan of 1995, or any successor plan.
B. Participation In Stock Matching
1. A Management Employee under age 55 as of the last day of the
Plan Year who is selected to participate in the Stock Matching
Provisions of the Plan may do so by depositing shares of
Common Stock based on a percentage of his Base Cash Award,
which percentage the Committee will set on an annual basis.
Such percentage may vary by employee group and from year to
year.
2. Participants age 55 or over as of the last day of the Plan
Year who are selected for Stock Matching may elect full,
partial, or no participation in the Stock Matching Provisions,
with immediate cash
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payments being made in an amount equal to 60% of the amount
of the Base Cash Award otherwise eligible for Stock Matching
for which the employee has elected to receive cash payment
in lieu of Stock Matching.
3. The Company will notify each Management Employee who
participates in the Stock Matching Provisions of the maximum
number of shares of Common Stock, which he or she is permitted
to deposit under the Plan, and each Participant may choose to
deposit all or any portion of the number of shares, permitted
to be deposited. Participants may make their Original Deposit
at any time after they receive their Base Cash Award, but, to
participate in the Stock Matching Provisions of this Plan,
Participants must deposit such shares with the Agent no later
than the December 31 immediately following the end of the Plan
Year for which the Base Cash Award has been paid.
4. Any Participant who dies, retires on or after attaining age
65, elects early retirement after attaining age 55 and
completing 10 years of service, or is permanently disabled and
unable to work as determined by the Senior Vice President,
Human Resources, either during a Plan Year or prior to the
final date for depositing the Original Deposit shares for such
Plan Year (December 31), will not be eligible to participate
in the Stock Matching Provisions, but instead, such
Participant, or the Participant's legal representative, will
receive an Additional Incentive Award in Stock or Cash, as
determined by the Senior Vice President, Human Resources, for
the Plan Year in an amount equal to the amount otherwise
eligible for Stock Matching.
5. 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.
C. Company Deposit And Delivery Of Restricted Stock
1. Restricted Stock
As soon as practical following the Original Deposit by a
Participant, the Company will match these shares and either
deposit with the Agent for the Participant's account matching
Common Stock for each share of the Original Deposit or
evidence the issuance of matching 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 shall
similarly deposit shares of Common Stock awarded pursuant to
paragraph A above that are not subject to Stock Matching. All
such deposited Stock will be Restricted Stock, which will be
delivered to the Participant upon vesting. The vesting period
will be from one (1) to ten (10) years (the "Restricted
Period") as determined by the Committee, and may be
accelerated based on performance goals established by the
Committee. In the event of termination after attainment of age
55 and 10 years of service or when the sum of the
Participant's age and service with the Company equals or
exceeds seventy (70), but prior to the completion of the
Restricted Period, provided the Participant leaves his or her
shares, if any, on deposit, the Participant will vest in all
corresponding shares of Restricted Stock as of the earlier of
attainment of age 65 or the end of the Restricted Period. In
the event the Original Deposit Stock is withdrawn or a
required deposit was not made, all Restricted Stock will be
forfeited to the Company. If termination of employment occurs
prior to attainment of age 55 and completion of 10 years of
service or prior to the time that the sum of the Participant's
age and service with the Company equals or exceeds seventy
(70), and prior to completion of the Restricted Period (except
for death), such Restricted Stock will be forfeited to the
Company. In the event of the death of a Participant prior to
vesting in the Restricted Stock, a pro-rata portion of such
shares will vest and be delivered to the Participant's
beneficiary, based on the ratio of the number of months during
which the shares were on deposit prior to the Participant's
death to the number of months in the Restricted Period, with
all remaining shares being forfeited. In the event of the
death of a Participant prior to completion of a performance
cycle, as established in accordance with the terms of a
performance accelerated vesting schedule, a pro-rata portion
of such shares will vest
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and be delivered to the Participant's beneficiary, at the
end of the performance cycle, based on the ratio of the
number of months during which the shares were on deposit
prior to the Participant's death to the number of months
completed in the performance cycle, with all remaining
shares being forfeited.
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 immediately
re-deposited with the Agent after such exercise.
PART V
DEFERRAL OF CASH INCENTIVE AWARDS
Subject to rules adopted by the Committee, a Participant may elect to defer all
or a portion of a Cash Award during each calendar year in accordance with the
terms and conditions of the Company's FlexComp Plan or any successor plan.
In order to defer all or a portion of the Cash Award for a particular bonus
period, a Participant must make a valid election under the FlexComp Plan by
executing and filing a deferral election form with the Company sixty (60) days
prior to the end of the plan year.
PART VI
PLAN ADMINISTRATION
This Plan will be effective in each fiscal year of the Company and will be
administered by the Committee and the Committee will have full authority to
interpret the Plan. Such interpretations of the Committee will be final and
binding on all parties, including the Participants, survivors of the
Participants, and the Company.
The Committee will 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 will adversely affect any benefit earned (but not
necessarily vested) under the Plan prior to the date of such amendment or
termination, unless the Participant, or the Participant's beneficiary, becomes
entitled to an amount equal to or greater than the value of the adversely
affected portion of such benefit under another plan, program or practice adopted
by the Company. Notwithstanding the above, an amendment, modification, or
termination affecting previously accrued benefits may not 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.
In the event the Company will 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 will
appropriately reflect the effect of such transactions.
In the event the Company will 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, will be vested and delivered to the Participants subject to any specific
instructions of the Committee.
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Except as otherwise provided in this Plan, 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. If any attempt is made to do so, or if a person
eligible for any benefits becomes bankrupt, the Committee, in its sole
discretion, may terminate the interest under the Plan of the person affected and
may cause the interest to be held or applied for the benefit of one or more of
the dependents of such person or may make any other disposition of such interest
that it deems appropriate.
All questions pertaining to the construction, validity and effect of the Plan
will be determined in accordance with the laws of the State of Florida and the
laws of the United States.
Effective as of June 1, 2000.
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