Exhibit 10
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DARDEN RESTAURANTS, INC.
DIRECTOR
COMPENSATION PROGRAM
EFFECTIVE AS OF OCTOBER 1, 2005
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TABLE OF CONTENTS
Page
ARTICLE I. GENERAL
PROVISIONS................................................1
Section 1.
Purpose......................................................1
Section 2.
Effective Date and Duration of the Program...................1
Section 3.
Definitions..................................................1
Section 4.
Common Stock Awards under the Program........................3
Section 5.
Eligibility..................................................3
Section 6.
Elections....................................................4
Section 7.
Account Statements...........................................4
Section 8.
Payment Upon Death...........................................4
Section 9.
Unfunded Program.............................................4
Section 10.
Section 16..................................................4
Section 11.
Notices.....................................................5
Section 12.
Administration..............................................5
Section 13. No
Right to Directorship....................................5
Section 14.
Governing Law...............................................5
Section 15.
Amendment, Suspension or Termination of the Program.........5
Section 16. No
Guarantee of Tax Consequences............................5
ARTICLE II. CASH COMPENSATION -- CASH
ELECTION...............................5
ARTICLE III. CASH COMPENSATION -- DEFERRAL
ELECTION..........................6
Section 1.
Deferral Election............................................6
Section 2.
Deferred Cash Compensation Account...........................6
Section 3.
Account Distributions........................................6
Section 4.
Hardship Distributions.......................................7
Section 5.
Distributions Upon Approval of the Committee.................8
ARTICLE IV. CASH COMPENSATION -- COMMON
STOCK AND SRO ELECTIONS..............8
Section 1.
Common Stock Election........................................8
Section 2.
Shares Available.............................................9
Section 3.
Computation of Shares........................................9
Section 4.
SRO's........................................................9
ARTICLE V. STOCK
COMPENSATION................................................9
Section 1.
Awards under Stock Plan......................................9
Section 2.
Non-qualified Stock Options..................................9
Section 3.
Annual Stock Awards..........................................10
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ARTICLE VI. DEFERRAL OF ANNUAL STOCK
AWARD...................................11
Section 1.
Purpose and Effect...........................................11
Section 2. Stock
Units and Deferred Stock Unit Accounts.................11
Section 3. Stock
Deferral...............................................12
Section 4.
Payment of Deferred Amounts..................................12
Section 5.
Effect on Annual Stock Awards................................13
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DARDEN RESTAURANTS, INC.
DIRECTOR COMPENSATION PROGRAM
ARTICLE I.
General Provisions
Section
1. Purpose. It is the intent of the Company to provide a
compensation program for its Directors which will attract and retain highly
qualified individuals to serve in this capacity, to compensate its Directors
through various cash and stock-based
arrangements and to
provide Directors with
opportunities for stock ownership in the
Company, thereby
aligning the interest
of Directors with the Company's
shareholders. This
Program sets forth the terms
and conditions pursuant to which Compensation for Directors shall be paid or
deferred. All Stock Compensation,
Stock Units, shares of
Common Stock and SRO's
that are part of the Compensation
paid or deferred
pursuant to this Program are
awarded pursuant to the terms of the
applicable
Stock Plan and any
applicable
Award Agreement. Notwithstanding any provision to the contrary in
this program
document, each provision in this program
document shall be interpreted to permit
the deferral of compensation in accordance
with Section 409A of the Code and any
provision that would conflict with such requirements shall not be valid or
enforceable.
Section 2.
Effective Date and Duration of the Program. The Program shall
be
deemed effective as of October 1, 2005 and shall
continue in full force and
effect until suspended or terminated by the
Committee pursuant to
Section 15 of
Article I.
Section 3.
Definitions. As used
in the Program, the
following terms shall
have the meanings set forth below:
(a) "Annual
Stock Award" shall have the meaning assigned to it in Section 3
of Article V.
(b) "Award
Agreement" shall mean any written agreement, contract or other
instrument or document evidencing an award granted under the Stock
Plan. Each
Award Agreement shall be subject to the applicable
terms and conditions
of the
Stock Plan under which such Award
Agreement was granted
and any other terms and
conditions (not inconsistent with such
Stock Plan) determined by the Committee.
(c) "Board"
shall mean the Board of Directors of the Company.
(d) "Cash
Compensation" shall mean the annual retainer and meeting fees
for
each regular or special Board meeting and any committee meeting attended.
Pursuant to the terms set forth
herein, Directors may elect to have the Cash
Compensation otherwise payable to them paid
in any combination of cash, deferred
cash, Common Stock and SRO's as set forth
in Article II, Article III and Article
IV.
(e) "Change of
Control," unless
otherwise defined in an Award Agreement,
shall mean any of the following events:
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(i) any person
(including a group as
defined in Section
13(d)(3) of
the Exchange
Act) becomes, directly or indirectly, the beneficial owner of
20% or more of
the shares of the Company entitled to vote for the
election
of
Directors;
(ii) as a result of or
in connection
with any cash tender offer,
exchange
offer, merger or other business
combination,
sale of assets or
contested
election, or
combination of the foregoing, the persons who were
Directors
of the Company
just prior to such
event cease to
constitute a
majority of the
Board; or
(iii) the consummation of a transaction in which the Company ceases
to
be an
independent
publicly-owned corporation or the consummation of a sale
or other
disposition
of all or substantially all of the assets of the
Company.
(f) "Code"
shall mean the
Internal Revenue Code
of 1986, as amended
from
time to time, and any regulations or other official guidance promulgated
thereunder.
(g) "Committee"
shall mean the Compensation Committee of the Board.
(h) "Common
Stock" shall mean the common stock, without par value, of the
Company.
(i) "Company"
shall mean Darden Restaurants, Inc., a Florida corporation.
(j)
"Compensation" shall mean Cash Compensation and Stock
Compensation,
collectively.
(k) "Deferral
Participant" shall mean a person who is eligible hereunder to
make a deferral election under Article III or Article VI. A person who has
become a Deferral Participant shall be
considered to continue as a "participant"
within the meaning of the Program (even if such person subsequently becomes
ineligible to make deferrals under Article III or Article VI)
until the date of
the Deferral Participant's death or, if earlier, the date when the Deferral
Participant no longer satisfies the eligibility requirements in Section 5 of
Article I and the Deferral Participant has
received a distribution of all of the
Deferral Participant's Deferred Cash Compensation Account and Deferred Stock
Unit Account.
(l) "Deferred
Cash Compensation Account" shall mean the bookkeeping account
established for each Deferral Participant in accordance with Section 2 of
Article III.
(m) "Deferred Stock Unit Account" shall mean the bookkeeping account
established for each Deferral Participant in accordance with Section 2 of
Article VI.
(n) A "Director"
for purposes of the Program is defined as a person who has
been elected to the Board and who is not an
employee of the Company or any
subsidiary of the Company.
(o) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(p) "Fair Market
Value" shall have the meaning assigned to it in the Stock
Plan.
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(q) "Non-transferability Period" shall have the meaning
assigned to it in
Section 3(b) of Article V.
(r) "Option"
shall mean a non-qualified option that is not intended to meet
the requirements of Sections 422 or 423 of
the Code or any successor provision.
(s) "Program" shall mean this Darden Restaurants, Inc. Director
Compensation Program, as amended from time
to time.
(t) "Program
Quarters" shall mean
the quarterly periods that correspond to
the Company's fiscal quarters.
(u) "Program
Year" shall mean the
one-year period which
begins the day of
the annual shareholders meeting in September and
terminates the day before the
next succeeding annual shareholders
meeting.
(v) "SRO's"
shall mean salary replacement options.
(w) "Stock
Compensation"
shall mean the Options
and Annual Stock
Awards
awarded to each Director pursuant to
Article V.
(x) "Stock
Deferral" shall have
the meaning assigned to it in Section 1 of
Article VI.
(y) "Stock
Plan" shall mean the Company's shareholder-approved equity
compensation plan in effect from time to time
pursuant to which the
Company is
authorized to grant stock and stock-based
awards to Directors,
as such plan may
be amended from time to time. On the effective date of the Program, the Stock
Plan is the Darden Restaurants, Inc. 2002
Stock Incentive Plan.
(z) "Stock Unit" shall mean one of the units credited to Deferral
Participants' Deferred Stock Unit
Accounts.
(aa)
"Unforeseeable
Emergency"
shall have the meaning
assigned to it in
Section 4(b) of Article III.
Section
4. Common Stock Awards under the Program. On and after the
effective date of the Program, all Stock Compensation, Stock Units, shares of
Common Stock and SRO's that are part of the Compensation paid or deferred
pursuant to the terms of the Program shall
be awarded and issued
under, and in
accordance with, the terms of the
applicable Stock Plan and any applicable Award
Agreement.
Section 5.
Eligibility. Each
person who is a Director of the Company shall
be eligible to participate in the Program and to make deferrals pursuant to
Article III and Article VI. A person who ceases to be a
Director shall not
be
eligible to make deferrals pursuant to
Article III and Article VI.
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Section 6. Elections.
(a) Cash Compensation
Election. In accordance with the terms of
Article II,
Article III and
Article IV, each Director may elect by written
notice to the
Company to participate in the Cash Compensation alternative
provisions of
the Program. Any
combination
of the alternatives - cash,
deferred
cash, Common Stock and/or SRO's - may be elected,
provided the
aggregate of the
alternatives
elected equals 100% of
the Director's
Cash
Compensation
otherwise payable. A Director elected to the
Board after the
annual
shareholder
meeting may elect, by written notice to the Company
before such
Director's term begins, to participate in the Cash Compensation
alternatives
for the remainder of that Program
Year, and elections for
succeeding
Program Years shall be on the same basis as other Directors.
Any
election by a
Director shall remain
in effect for the entire Program Year
to which such
election applies. In addition, if a Director fails to submit
an election in a
timely manner with respect to a subsequent Program Year, a
Director's Cash
Compensation for a Program Year shall be paid in cash.
(b) Annual Stock Award Deferral Election. In accordance with the
terms
of Article VI,
each Director may elect by written notice to the Company to
make a deferral
election with respect
to an Annual Stock Award. A Director
first elected to the
Board after the annual shareholder meeting may elect,
by written
notice to the Company
before such Director's
term begins,
to
make a deferral
election with respect
to the prorated Annual
Stock Award,
and elections for succeeding Program Years shall be on the same
basis as
other
Directors.
If a Director
fails to submit a
deferral election in
a
timely manner
with respect to a subsequent Program Year, any election
with
respect to the
prior Program Year shall remain in effect.
Section 7.
Account Statements.
As soon as possible
after the end of
each
Program Year, the Company shall supply to
each participant an account statement
of participation under the Program.
Section 8.
Payment Upon Death. If
a participant
dies prior to payment
in
full of all amounts due under the
Program, the balance of the amount due
shall
be paid in full in a single sum payment to such participant's designated
beneficiary, or, if none (or if there is no
valid beneficiary
designation
on
file with the Company), the participant's estate as soon as possible
following
death.
Section 9.
Unfunded Program. The Program shall be unfunded and
shall not
create (or be construed to create) a trust or a
separate fund or funds. The
Program shall not establish any fiduciary
relationship
between the Company
and
any participant or other person. To the extent any person holds any
rights by
virtue of an award under the Program, such right shall be no greater
than the
right of an unsecured general creditor of
the Company.
Section 10.
Section 16. With
respect to persons
subject to Section 16
of
the Exchange Act, transactions under the
Program are intended to comply with all
applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To
the extent any provision of the Program or action
by the Board or the Committee
fails to so comply, it shall be deemed null
and void, to the extent permitted by
law and deemed advisable by the Board or
the Committee.
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Section 11.
Notices. Unless otherwise notified, all notices under the
Program shall be sent in writing to the Company, attention the Supervisor,
Management Stock Plans, 5900 Lake Ellenor Dr., Orlando, FL 32809. All
correspondence to the participants shall be sent to the address which
is their
last known address as on file with the
Company.
Section
12. Administration. The Program shall be administered by the
Committee. The Committee shall have full authority and
complete discretion
to
interpret the Program, to promulgate such rules and
regulations with respect to
the Program as it deems desirable and to
make all other determinations necessary
or appropriate for the administration of the Program,
and such determinations
shall be final and binding upon all persons
having an interest in the Program.
Section
13. No Right to
Directorship.
Neither the Program
nor any action
taken hereunder shall be construed as
giving any Director any right to continue
to serve as a Director or any right to be nominated for re-election to the
Board.
Section 14.
Governing Law. The Program shall be governed by the laws of the
State of Florida.
Section 15.
Amendment,
Suspension
or Termination of the Program. The
Committee may suspend or terminate the Program or any portion
thereof at any
time, and the Committee may amend the
Program from time to time as may be deemed
to be in the best interests of the Company; provided, however, that no such
amendment, suspension or termination shall be made (a) which would
impair the
rights of a participant with respect to
Compensation theretofore earned, without
such participant's consent, or (b) which would require
shareholder
approval
under the Code or the rules or regulations of the Securities and Exchange
Commission (including any approval requirement which is a prerequisite for
exemptive relief from Section 16 of the Exchange Act), the New York Stock
Exchange, any other securities exchange or the National Association of
Securities Dealers, Inc. that are applicable to the Company, without such
shareholder approval, or (c) after a Change of Control,
which would affect
the
Compensation earned prior to such amendment,
suspension or
termination without
the written consent of a majority of participants determined as of the day
before a Change of Control. Not
