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Darden Restaurants Inc · DEF 14A · For 9/20/00

Filed On 8/8/00 4:54pm ET · SEC File 1-13666 · Accession Number 912057-0-35335

  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 8/08/00  Darden Restaurants Inc            DEF 14A     9/20/00    1:38                                     Merrill Corp/FA

Definitive Proxy Solicitation Material · Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Definitive Proxy Solicitation Material                38    141K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) A. Additional Incentive Award A. Cash Or Stock Awards A. Individual Performance A. Objective Of The Plan B. Agent B. Corporate Performance B. Eligibility Board Compensation and Benefits B. Participation In Stock Matching C. Base Cash Award or Award C. Company Deposit And Delivery Of Restricted Stock C. Determination Of Amounts Of Award Committees of the Board C. Participation Darden Restaurants, Inc D. Board E. Change of Control F. Committee G. Common Stock General Information H. Company I. Consolidated Earnings J. Management Employee K. Original Deposit Loans to Executive Officers L. Participant M. Plan N. Plan Year O. Professional Employee P. Restricted Stock Q. Stock Matching R. Stock Matching Provisions S. Actively Employed Stock-Based Compensation Stock Ownership Guidelines and Stock Purchase/Loan Opportunity
1	1st Page
"	Darden Restaurants, Inc
7	General Information
10	Board Compensation and Benefits
"	Committees of the Board
19	Stock Ownership Guidelines and Stock Purchase/Loan Opportunity
21	Stock-Based Compensation
23	Loans to Executive Officers
28	A. Additional Incentive Award
"	B. Agent
"	C. Base Cash Award or Award
"	D. Board
"	E. Change of Control
"	F. Committee
"	G. Common Stock
"	H. Company
"	I. Consolidated Earnings
29	J. Management Employee
"	K. Original Deposit
"	L. Participant
"	M. Plan
"	N. Plan Year
"	O. Professional Employee
"	P. Restricted Stock
"	Q. Stock Matching
"	R. Stock Matching Provisions
"	S. Actively Employed
30	A. Objective Of The Plan
"	B. Eligibility
"	C. Participation
"	A. Individual Performance
31	B. Corporate Performance
"	C. Determination Of Amounts Of Award
"	A. Cash Or Stock Awards
"	B. Participation In Stock Matching
32	C. Company Deposit And Delivery Of Restricted Stock

DEF 14A 1st Page of 38 TOC Top Previous Next Bottom Just 1st

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

[Download Table]

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 Section240.14a-12

-----------------------------------------------------------------------
(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):

[Download Table]

/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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:
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2000 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT

DARDEN RESTAURANTS, INC.
5900 LAKE ELLENOR DRIVE, ORLANDO, FL 32809

August 8, 2000

To Our Stockholders:

You are cordially invited to attend the 2000 Annual Meeting of Stockholders,
which will be held at the Renaissance Orlando Resort, 6677 Sea Harbor Boulevard,
Orlando, Florida, on Wednesday, September 20, 2000, at 11:00 a.m. Eastern
Daylight Savings Time. All holders of the Company's outstanding common stock as
of July 24, 2000 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 12:00 noon.

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 follow the enclosed telephonic proxy instructions or the
enclosed internet proxy instructions or 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 yours,

/s/ Joe R. Lee
------------------------
Joe R. Lee
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER

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DARDEN RESTAURANTS, INC.

------------------------------------------------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 20, 2000

--------------------------------------------------------------------------------

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Darden
Restaurants, Inc. will be held on Wednesday, September 20, 2000, at 11:00 a.m.
Eastern Daylight Savings Time, at the Renaissance Orlando Resort,
6677 Sea Harbor Boulevard, Orlando, Florida, for the following purposes:

1. To elect twelve directors;

2. To approve the appointment of KPMG LLP to audit the consolidated
financial statements of Darden Restaurants, Inc. for the fiscal year
beginning May 29, 2000;

3. To consider and approve the Darden Restaurants, Inc. Management and
Professional Incentive Plan; and

4. To act upon any other business which may properly be brought before the
meeting.

The close of business on July 24, 2000 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/ Paula J. Shives
------------------------------

Paula J. Shives
SECRETARY

August 8, 2000

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DARDEN RESTAURANTS, INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
THURSDAY, SEPTEMBER 20, 2000

VOTING PROCEDURES

This Proxy Statement is being sent to holders of record at the close of
business on July 24, 2000, of the common stock, no par value (the "Common
Stock"), of Darden Restaurants, Inc., 5900 Lake Ellenor Drive, Orlando, FL 32809
(the "Company"). All such stockholders of record on July 24, 2000 are entitled
to vote at the Annual Meeting of Stockholders on September 20, 2000. This Proxy
Statement is designed to furnish information relating to the business to be
transacted at the meeting.

As of July 24, 2000, there were 121,897,247 shares of Common Stock
outstanding, excluding 44,292,590 shares held in the Company's Treasury
("Treasury Shares"). Each share of Common Stock entitles the holder to one vote.
The 44,292,590 Treasury Shares 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 8, 2000.

A proxy card is enclosed for your use. The proxy card contains instructions
for responding either by telephone, by the internet, or by mail. YOU ARE
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS TO EITHER FOLLOW THE INSTRUCTIONS
ON THE PROXY CARD FOR TELEPHONIC RESPONSE OR INTERNET RESPONSE OR SIGN, DATE AND
RETURN THE PROXY CARD IN THE ACCOMPANYING ENVELOPE, which is postage-paid if
mailed in the United States or Canada. PLEASE USE ONLY ONE OF THE THREE
AVAILABLE MEANS OF RESPONSE. IF YOU DIRECT YOUR VOTE BY TELEPHONE OR INTERNET,
PLEASE DO NOT RETURN THE PROXY CARD BY MAIL. Whether you respond by telephone,
internet or mail, please also indicate if you intend to attend the Annual
Meeting of Stockholders on September 20, 2000.

You have three choices on each matter to be voted upon at the Annual
Meeting. For the election of directors, 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 specifically identify. See "General Information" under Item No. 1.
Concerning the other items, 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 properly given and received prior to
the close of the meeting will be voted as indicated. If the Company receives a
proxy for which specific instructions are not provided, the proxy will be voted
FOR the election of all directors as nominated, FOR the approval of the
appointment of KPMG LLP as independent auditors, and FOR the approval of the
Darden Restaurants, Inc. Management and Professional Incentive Plan.

If a telephonic proxy, internet proxy or an executed proxy card is received
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 a proxy is received from 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

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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, present in person or by proxy at the Annual Meeting and entitled to vote,
will be necessary for the election of directors and the approval of the other
matters submitted to the stockholders 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 2000 Annual Report to Stockholders, which includes the
consolidated financial statements of the Company as of and for the fiscal year
ended May 28, 2000, 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
407-245-6565 (collect) and a copy will be sent to you.

Shares of Common Stock credited to the accounts of participants in the
Darden Savings Plan (the "DSP") 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 DSP, the proxy also serves as voting
instructions to the trustee of the DSP. The trustee of the DSP 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.

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CERTAIN OWNERS OF COMMON STOCK

As of May 28, 2000, 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 information received directly by the Company and on Schedule 13G
reports and subsequent amendments, if any, filed during fiscal 2000, are as
follows:

[Download Table]

PERCENT OF
COMMON
AMOUNT AND NATURE OF STOCK
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OUTSTANDING
------------------------------------ -------------------- -----------

The Prudential Insurance Company of America
751 Broad Street
Newark, New Jersey 07102..................... 17,451,141(1) 13.62%

American Express Retirement Services
733 Marquette Avenue
Minneapolis, Minnesota 55402................. 11,388,841(2) 9.32%

FMR Corp.
82 Devonshire Street
Boston, Massachusetts 02109.................. 8,941,484(3) 6.80%

Barclays Global Investors, N.A.
45 Fremont Street
San Francisco, California 94105.............. 7,015,133(4) 5.34%

------------------------

(1) As of December 31, 1999, this holder owned 17,451,141 shares or 13.62% of
the Common Stock of the Company. Of this amount, 56,100 shares were held for
the benefit of the holder's general account, and 17,395,041 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. As of December 31, 1999, such holder had sole power to vote
2,068,300 shares, shared voting power on 15,287,187 shares, sole dispositive
power on 2,068,300 shares, and shared dispositive power on 15,382,841
shares.

(2) As of May 28, 2000, 11,388,841 shares were held as trustee of the DSP. Such
holder had shared voting power and shared dispositive power on all such
shares.

(3) As of December 31, 1999, this holder owned 8,941,484 shares or 6.803% of the
Common Stock of the Company. Of this amount, all 8,941,484 shares were
beneficially owned by FMR Corp. or by certain of its affiliates and
wholly-owned subsidiaries acting as investment advisor to various investment
company mutual funds or as investment manager of various institutional
accounts. Such entities had sole power to vote 136,294 shares and sole
dispositive power on all 8,941,484 shares.

(4) As of December 31, 1999, this holder owned 7,015,133 shares or 5.34% of the
Common Stock of the Company. All such shares were beneficially owned by the
holder either directly or through its affiliates or subsidiaries. Such
entities had sole power to vote 6,250,665 shares and sole dispositive power
on all 7,015,133 shares.

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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
proxies received will be voted for such substitute nominees unless an
instruction to the contrary is included with the proxy.

INFORMATION CONCERNING NOMINEES

[Enlarge/Download Table]

Bradley D. Blum...................... Bradley D. Blum, age 46, is President of Olive Garden and an
Director since 1997 Executive Vice President of Darden Restaurants, Inc. Mr.
Blum joined General Mills, Inc. in 1978. He was named a
Director of Marketing in 1984 and became a Vice President 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 Olive
Garden and was named President of Olive Garden in December
of 1994. He was named Senior Vice President of the Company
in September of 1995 and Executive Vice President of the
Company in September of 1997, at which time he was also
elected to the Board of Directors.

Daniel B. Burke...................... Daniel B. Burke, age 71, retired in February, 1994 as
Director since 1995 President and Chief Executive Officer of Capital Cities/ABC,
Inc. (now ABC, Inc.), a broadcast and publishing 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 C.F. Hathaway & Co. and the Washington Post
Company.

Odie C. Donald....................... Odie C. Donald, age 50, is President of DIRECTV, Inc., the
Director since 1998 nation's leading satellite television service and a unit of
Hughes Electronics Corporation. Previously, he was Chief
Executive Officer--Caribbean and Atlantic Islands for Cable
and Wireless PLC and Group President--Customer Operations
for BellSouth Telecommunications, Inc. Mr. Donald joined
DIRECTV, Inc. in April 2000. He was honored by BLACK
ENTERPRISE MAGAZINE for his corporate achievements in 1993
and is a trustee of the Commerce Club of Atlanta.

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[Enlarge/Download Table]

Julius Erving, II.................... Julius Erving, II, age 50, is President of The Erving Group,
Director since 1998 Vice President of RDV Sports and Executive Vice President of
the Orlando Magic, a professional basketball team. Mr.
Erving spent 16 years as a player for the New York Nets and
the Philadelphia 76ers and was inducted into the Basketball
Hall of Fame in 1993. In 1985, he joined the Philadelphia
Coca-Cola Bottling Company. He has been a sports commentator
with the National Broadcasting Company and an owner of
Washington/Erving Motor Sports in North Carolina. For his
civic work, Mr. Erving received the Jackie Robinson Award
for American Black Achievement. Mr. Erving is a director of
Converse, Inc., The Sports Authority, Inc., and Saks
Incorporated.

Joe R. Lee........................... Joe R. Lee, age 59, is Chief Executive Officer and Chairman
Director since 1995 of the 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. He was named
Executive Vice President, Finance and International
Restaurants in 1991, and was elected a director in 1985 and
a Vice Chairman in 1992, with responsibility for various
consumer foods businesses and corporate staff functions. He
was named Chief Executive Officer of the Company in December
of 1994. Mr. Lee is a director of Tupperware Corporation.

Richard E. Rivera.................... Richard E. Rivera, age 53, was named President of Red
Director since 1997 Lobster Restaurants and Executive Vice President of Darden
Restaurants, Inc. in December 1997. Mr. Rivera began his
career with Steak and Ale Restaurants of America and has
held many leadership positions within the industry over the
past 25 years. Prior to joining Red Lobster, from 1994 to
1996, Mr. Rivera served as President and Chief Executive
Officer of RARE Hospitality International, Inc., owner of
LongHorn Steakhouse restaurants. Mr. Rivera is a director of
Mexican Restaurants, Inc., formerly known as Casa Ole
Restaurants.

Michael D. Rose...................... Michael D. Rose, age 58, is Chairman of Midaro Investments,
Director since 1995 Inc. Previously, he was Chairman of the Board of both
Harrah's Entertainment, Inc. and Promus Hotel Corporation,
which were created in 1995 from The Promus Companies
Incorporated. Mr. Rose joined Promus' predecessor company,
Holiday Corporation, in 1975, 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 assumed his present position in July 1998.
Mr. Rose is a director of First Tennessee National Corp.,
SteinMart, Inc., General Mills, Inc., Felcor Lodging Trust,
Inc., ResortQuest International and Nextera Enterprises,
Inc.

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[Enlarge/Download Table]

Hector de J. Ruiz.................... Hector de J. Ruiz, age 55, is President and Chief Operating
Director since 1999 Officer of Advanced Micro Devices in Austin, Texas.
Previously, he was Executive Vice President of Motorola,
Inc. and President of its Semiconductor Products Sector. Mr.
Ruiz joined Motorola in 1977 as Operations Manager in East
Kilbride, Scotland. In 1984, he was promoted to Vice
President and General Manager of the Memory Products
Division. He became Corporate Vice President and General
Manager of Integrated Circuit Wafer Manufacturing in 1987,
and became Corporate Vice President and Assistant General
Manager of the Microprocessor Products Group in 1988. He was
promoted to Senior Vice President in 1989. In 1991, he
became Senior Vice President and General Manager of the
Paging Products Group. Mr. Ruiz is a director of White Oaks
Semiconductor, the Semiconductor Industry Association, the
Texas R&D Coalition and the Austin 360 Technology Summit.

Maria A. Sastre...................... Maria A. Sastre, age 45, is Vice President--Total Guest
Director since 1998 Satisfaction Services for Royal Caribbean International, a
unit of Royal Caribbean Cruises Ltd., a global cruise line
company. Previously, she was Vice President--Latin America
and Miami for United Airlines. Ms. Sastre joined United
Airlines in 1992 as Director of Sales Planning--Latin
America. In 1994, she was named Director of International
Sales & Marketing for Asia, Europe and Latin America. She
previously held managerial positions at both Continental
Airlines and Eastern Airlines. She was appointed to her
present position in March 2000. Ms. Sastre is a director of
the United Way of Dade County, the New World Symphony and
the Beacon Council. She also serves on the Greater Miami
Chamber of Commerce, and the Greater Miami and the Beaches
Visitor and Convention Bureau.

Jack A. Smith........................ Jack A. Smith, age 65, is the past Chief Executive Officer
Director since 1995 and Chairman of the Board of 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
management positions with Sears, Roebuck & Co. and
Montgomery Ward Holding Corporation. He is a director of
Whitehall Jewellers, Inc. and Nova Southeastern University,
and is former Chairman of the National Sporting Goods
Association.

Blaine Sweatt, III................... Blaine Sweatt, III, age 52, is President, New Business
Director since 1995 Development and an Executive Vice President of the Company.
He joined the Red Lobster organization in 1976 and was named
Director of New Restaurant Concept Development in 1981. He
was named a Vice President of General Mills, Inc. in 1985
and a Senior Vice President in 1994. Mr. Sweatt led the
teams that developed the Olive Garden, Bahama Breeze and
Smokey Bones BBQ concepts, among others.

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[Enlarge/Download Table]

Rita P. Wilson....................... Rita P. Wilson, age 54, is President of Allstate Indemnity
Director since 2000 Company, a subsidiary of Allstate Insurance Company.
Ms. Wilson joined Allstate Insurance Company in 1974 and,
after holding various management positions, was named
Regional Vice President in 1983. Ms. Wilson was appointed
Vice President--Corporate Human Resource Administration in
1987, Territorial Vice President in 1988, and Senior Vice
President of Corporate Relations in 1990. She was promoted
to her present position in January 1999. Ms. Wilson is a
past recipient of the King Legacy Award and the Women in
International Industry National YWCA Award. She has been
named to EBONY MAGAZINE'S Best and Brightest in Corporate
America and Top 50 Black Executives lists. Ms. Wilson is a
director of Allstate Insurance Company.

THESE TWELVE (12) PERSONS WILL BE PLACED IN NOMINATION FOR ELECTION TO THE
BOARD OF DIRECTORS. THE SHARES REPRESENTED BY PROXY 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.

Effective upon election at the Annual Meeting on September 20, 2000, each
non-employee director will receive an annual retainer of $15,000 plus $1,000 for
each Board meeting attended, $700 for each committee meeting attended, or $1,000
for each committee meeting chaired. The non-employee directors' remuneration is
due and paid quarterly, unless the director elects deferral of the payment. Each
year, under the Company's Compensation Plan for Non-Employee Directors, 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 for any number
of years through the completion of Board service, 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 alternatives. A total of 50,000
shares of Common Stock are authorized for issuance under the Compensation Plan
for Non-Employee Directors.

In addition to the cash remuneration, under the Company's Stock Plan for
Non-Employee Directors, each non-employee director receives 3,000 shares of
restricted Common Stock annually upon election or re-election. The restrictions
on these shares lapse on the next year's annual meeting date. Alternatively, at
the direction of each director, the delivery of such shares will be deferred
until a subsequent annual meeting date or until completion of the director's
Board service. The equivalent of 1,000 shares of the annual restricted stock
award may be taken in cash.

Each non-employee director also receives a one-time stock option grant for
12,500 shares of Common Stock upon initial election to the Board and an option
to purchase 3,000 shares of Common Stock upon election or re-election to the
Board at each Annual Meeting of Stockholders. In addition, each director may
choose to receive options ("SRO's") determined to be of equal value to the cash
compensation for directors' fees. All such options have an exercise price equal
to the fair market value of the Common Stock on the date of grant and, except
for SRO's, are exercisable after three years. SRO's are exercisable after six
months. A total of 250,000 shares of Common Stock are authorized for issuance
under the Stock Plan for Non-Employee Directors.

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 28, 2000, the Board of Directors met or
took action four times and the various committees of the Board met or took
action a total of 14 times. Attendance at Board meetings and all committee
meetings averaged 91%. For the period of his or her Board service in fiscal
2000, each

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incumbent director standing for election attended a minimum of 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 2000 are
described below.

AUDIT COMMITTEE. The Audit Committee consists of six non-employee
directors: Jack A. Smith (Chair), Daniel B. Burke, Julius Erving, II, Hector de
J. Ruiz, Maria A. Sastre and Rita P. Wilson. The Audit Committee met three times
during fiscal 2000. The Audit Committee met again, on June 21, 2000 to
determine, among other matters, the recommendation to the Board of Directors
regarding the appointment of an independent auditor for shareholder vote at the
Annual Meeting on September 20, 2000. The Audit Committee also met on July 13,
2000, to review the Company's audited financial statements for fiscal 2000. 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 appointment of an independent auditor for the Company, the Audit Committee
reviews (i) the general scope of audit coverages; (ii) the fees charged by the
independent auditors; (iii) matters relating to internal controls; (iv) the
value of intangibles to be carried on the Company's financial statements; and
(v) the expenses of senior executives. For further details on actions of the
Audit Committee, please refer to the Report of the Audit Committee appearing
later in this Proxy Statement.

COMPENSATION COMMITTEE. The Compensation Committee consists of six
non-employee directors: Michael D. Rose (Chair), Daniel B. Burke, Odie C.
Donald, Maria A. Sastre, Jack A. Smith and Rita P. Wilson. The Compensation
Committee met five times during fiscal 2000. The Compensation Committee
administers the stock option and incentive plans of the Company, and in this
capacity it makes or reviews all option grants or awards under these plans. In
addition, the Compensation Committee makes recommendations to the Board with
respect to the compensation of the Chief Executive Officer and other senior
management serving on the Board, and reviews the compensation paid to other
corporate officers. The Compensation Committee also recommends the establishment
of policies dealing with various compensation and employee benefit plans for the
Company. See the Compensation Committee's report on executive compensation and
the section entitled "Board Compensation and Benefits", which details
compensation to be paid to non-employee directors effective on their election on
September 20, 2000, both contained in this Proxy Statement.

EXECUTIVE COMMITTEE. The Executive Committee consists of six directors: Joe
R. Lee (Chair), Daniel B. Burke, Julius Erving, II, Michael D. Rose, Hector de
J. Ruiz and Jack A. Smith. The Executive Committee did not meet in fiscal 2000.
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. The
Committee 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: Maria A. Sastre (Chair), Michael D. Rose, Hector de J. Ruiz and Rita
P. Wilson. The Finance Committee met twice during fiscal 2000. The Finance
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.

NOMINATING AND GOVERNANCE COMMITTEE. The Nominating and Governance
Committee consists of four non-employee directors: Daniel B. Burke (Chair), Odie
C. Donald, Julius Erving, II and Michael D. Rose. The Nominating and Governance
Committee met three times during fiscal 2000. In addition, the Nominating and
Governance Committee met on June 21, 2000 to nominate directors for election at
the Annual Meeting of Stockholders on September 20, 2000. The Nominating and
Governance Committee's duties include reviewing policies and procedures of the
Board of Directors, as well as proposing a slate of directors for election by
the stockholders at each annual meeting, and proposing candidates to fill
vacancies on the Board. The Committee conducts research to identify suitable
candidates for Board

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membership, seeking individuals who will make a substantial contribution to the
Company. The Committee 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. Aside from directors' fees and stock
ownership, a non-employee director may have no more than an insignificant
financial relationship with the Company, except that members of the Compensation
and the Nominating and Governance Committees may not have any such financial
relationship. 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.

PUBLIC RESPONSIBILITY COMMITTEE. The Public Responsibility Committee
consists of four non-employee directors: Odie C. Donald (Chair), Julius Erving,
II, Hector de J. Ruiz and Jack A. Smith. The Public Responsibility Committee met
once during fiscal 2000, and again, on June 21, 2000. The duties of the Public
Responsibility 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.

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SHARE OWNERSHIP OF DIRECTORS AND OFFICERS

Set forth in the following table is the beneficial ownership of Common Stock
as of May 28, 2000 for each director, each officer named in the Summary
Compensation Table appearing later in this Proxy Statement, and all directors
and 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.

[Enlarge/Download Table]

AMOUNT AND NATURE OF PERCENT OF COMMON
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) STOCK OUTSTANDING (2)
------------------------ ----------------------- ---------------------

Bradley D. Blum.................................. 549,764(3) *
Daniel B. Burke.................................. 30,499(4) *
Odie C. Donald................................... 4,088(4) *
Julius Erving, II................................ 25(4) *
Joe R. Lee....................................... 2,045,004(5)(6) 1.67%
Clarence Otis, Jr................................ 84,152 *
Richard E. Rivera................................ 389,784 *
Michael D. Rose.................................. 42,673(4) *
Hector de J. Ruiz................................ 7,227 *
Maria A. Sastre.................................. 8,929 *
Jack A. Smith.................................... 37,570(4) *
Blaine Sweatt, III............................... 657,062(5) *
Rita P. Wilson................................... 0 *
All Directors and Officers as a Group
(22 persons)................................... 5,113,926 4.10%

------------------------

(1) Includes the following shares subject to options exercisable within 60 days
of May 28, 2000: Bradley D. Blum, 345,763 shares; Daniel B. Burke, 12,157
shares; Odie C. Donald, 1,050 shares; Joe R. Lee, 1,500,418 shares; Richard
E. Rivera, 240,000 shares; Michael D. Rose, 26,408 shares; Maria A. Sastre,
4,929 shares; Jack A. Smith, 12,500 shares; Blaine Sweatt, III, 505,502
shares; and all Directors and Officers as a group, 3,643,910 shares. Also
includes restricted stock as of May 28, 2000 and the fiscal 2000 restricted
awards granted June 21, 2000, as follows: Bradley D. Blum, 88,554 shares;
Joe R. Lee, 62,740 shares; Clarence Otis, Jr., 34,738 shares; Richard E.
Rivera, 78,986 shares; Hector de J. Ruiz, 3,000 shares; Maria A. Sastre,
2,000 shares; Jack A. Smith, 3,000 shares; and Blaine Sweatt, III, 32,857
shares. Does not include the following deferred restricted stock: Daniel B.
Burke, 6,000 units; Odie C. Donald, 6,000 units; Julius Erving, II, 6,000
units; Michael D. Rose, 6,000 units; and Rita P. Wilson, 2,000 units.

(2) As of May 28, 2000, no director or named officer, except Joe R. Lee,
beneficially owned more than one percent of the outstanding Common Stock of
the Company.

(3) Includes 200 shares held in a trust for a family member.

(4) Includes the following shares held in the common stock fund of the
non-employee Director's deferred compensation plan: Daniel B. Burke, 38
shares; Odie C. Donald, 38 shares; Julius Erving, II, 25 shares; Jack A.
Smith, 9,321 shares; and Michael D. Rose, 1,311 shares. The director or
named officer does not have voting power with respect to the shares held by
such beneficial owner.

(5) Includes the following shares allocated to the DSP accounts of the named
officer as of May 28, 2000: Joe R. Lee, 962 shares; and Blaine Sweatt, III,
1,426 shares.

(6) Includes 800 shares owned by Joe R. Lee's wife.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Certain executive officers of the Company, including executive officers
nominated for re-election to the Board of Directors, participate in the 1998
Stock Purchase/Loan Program, described in the section entitled "Stock Ownership
Guidelines and Stock Purchase/Loan Opportunity" appearing later in this

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Proxy Statement. Specific information concerning outstanding loan balances for
certain executive officers is provided in the section entitled "Loans to
Executive Officers" appearing in this Proxy Statement in the Report of
Compensation Committee on Executive Compensation.

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 LLP ("KPMG"), an independent certified public
accounting firm, to audit the consolidated financial statements of the Company
for the fiscal year beginning May 29, 2000. 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 LLP
AS THE INDEPENDENT AUDITORS AND YOUR PROXY WILL BE SO VOTED UNLESS YOU SPECIFY
OTHERWISE.

Item No. 3

APPROVAL OF THE DARDEN RESTAURANTS, INC.
MANAGEMENT AND PROFESSIONAL INCENTIVE PLAN

HISTORICAL INFORMATION

The Darden Restaurants, Inc. Management and Professional Incentive Plan,
previously known as the Management Incentive Plan (the "MIP") was approved and
adopted by General Mills, Inc. ("General Mills") as the sole stockholder of the
Company on February 27, 1995, and became effective on the distribution of all of
the Common Stock of the Company to the stockholders of General Mills on May 28,
1995 (the "Distribution"). The MIP was amended by the Board of Directors of the
Company effective May 23, 1996 and June 21, 1999. In addition, pursuant to the
Omnibus Budget Reconciliation Act of 1993 (the "1993 Budget Act"), the MIP was
submitted to and approved by the Company's stockholders on September 19, 1996,
at the first annual meeting of stockholders following the Distribution. The 1993
Budget Act and corresponding Section 162(m) of the Internal Revenue Code (the
"Code") created new criteria for tax deductions by public corporations for
certain levels of executive compensation.

The Company uses the MIP to provide incentive bonuses to officers and other
management personnel. MIP bonuses are awarded in cash, restricted stock, or a
combination of the two. All restricted stock awarded under the MIP is issued
from Common Stock authorized under the Amended and Restated Stock Option and
Long-Term Incentive Plan of 1995, as approved at the Annual Meeting of
Stockholders on September 23, 1999 (the "1995 Plan"). At this time, no
additional shares of Common Stock are being authorized for issuance under the
MIP.

THE PROPOSED AMENDMENTS

On June 21, 2000, the Compensation Committee recommended and, subject to
approval at the Annual Meeting of Stockholders on September 20, 2000, the Board
of Directors approved the restatement and amendment of the MIP. The amendments,
if approved by the Company's stockholders, would accomplish the following:

- clarify provisions which establish continued deductibility, under
Section 162(m) of the Code, of all MIP incentive payments;

- identify performance measures available to the Compensation Committee in
establishing annual Company targets and ratings; and

- update and improve the format of the MIP through a restatement.

DEF 14A 15th Page of 38 TOC 1st Previous Next Bottom Just 15th

More specifically, the Company and the Board of Directors have approved a
new format for the MIP which provides direction to the Compensation Committee in
designing annual performance goals and objectives, establishes minimum Company
performance levels below which no MIP awards can be made, and defines a maximum
incentive that can be paid to any individual. In this regard, and in order to
continue to comply with Section 162(m) of the Code, the MIP will include:

- a requirement that positive consolidated earnings be achieved as a general
performance objective and a condition to all incentive awards;

- performance measures that may be used to establish annual Company
performance targets and ratings (such performance measures may include,
but are not limited to, earnings per share, return on capital, return on
sales, cash flow, market share, revenue growth, earnings growth, return on
gross investment, total shareholder return and operating profit);

- the establishment of a maximum of 0.2% of annual Company sales for cash
incentive awards paid to any single individual for a given year.

As in the past, the Compensation Committee will approve all annual
performance targets and bonuses to be paid under the MIP. The amended and
restated MIP, as approved and recommended by the Board of Directors, is attached
as APPENDIX A.

ADDITIONAL BACKGROUND INFORMATION AND PROVISIONS OF THE MIP

Payment of bonuses to executive officers and management of the Company is
determined by the Compensation Committee pursuant to the terms and conditions of
the MIP. Awards under the MIP are based on corporate performance, business unit
performance and personal performance. Generally, the corporate performance
rating has been based on percentage growth in earnings per share over the prior
year, the return on capital such earnings generated in the current year, and
sales growth. Business unit ratings have been based primarily on profit
performance, return on capital and sales growth, while market share performance
and other factors are also considered. Personal ratings have included such
factors as overall job performance, contribution to the strategic plan,
leadership development, workplace diversity, and involvement in industry, civic
and public affairs. Both business unit and personal ratings are heavily
dependent on achievement of financial objectives.

Based on current guidelines, corporate and business unit ratings can range
from 0 to 2.0. Personal ratings can range from 0 to 1.5 with an additional 0.2
incremental opportunity for the Company to recognize truly exceptional
performance in connection with its strategic initiatives. For executive
officers, the participant's target incentive participation rate (a percentage of
base salary that increases for positions of greater responsibility within the
Company) is multiplied both by the individual's performance rating and by the
corporate and, if applicable, business unit rating, typically weighted according
to the following guidelines to determine the cash incentive award:

[Download Table]

BUSINESS
CORPORATE POSITION UNIT POSITION
------------------ -------------

Senior Corporate Officer........................ 100% 0%
Restaurant Concept Presidents................... 20% 80%
Restaurant Concept Officers..................... 0% 100%
Corporate Staff Officers........................ 100% 0%

Under the MIP, incentive awards are made annually to key executives as
determined and approved by the Compensation Committee. Receipt of cash awards
under the MIP may be deferred in part to a subsequent date or to retirement.
Each year, if approved by the Compensation Committee, a MIP participant may
receive an award of restricted stock equal to the value of a designated
percentage of his MIP cash bonus. To be eligible to receive the restricted stock
award, the Participant must deposit and maintain with the Company
personally-owned shares of Common Stock. The restricted stock is awarded

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from shares authorized for issuance under the 1995 Plan. Beginning in fiscal
2000, awards made to officers under the stock matching program have vesting
schedules tied to the attainment of future performance goals, such as revenue
growth. The restricted shares vest for officers at the earlier of achievement of
the performance target or ten years. For other management personnel, restricted
shares vest in three years. In both cases, for the restricted shares to vest,
the participant's deposit shares must remain with the Company throughout the
required deposit period. Restricted shares also vest in full if there is a
Change in Control as defined in the MIP.

Cash incentives paid and restricted stock awarded in fiscal 2000 to the five
most highly compensated executive officers are set forth in the Summary
Compensation Table. Cash incentives were paid and restricted stock was awarded
under the MIP to the following groups during fiscal 2000:

[Download Table]

TOTAL MIP RESTRICTED
CASH INCENTIVE STOCK AWARDED
($) (# SHARES)
-------------- -------------

All current executive officers, as a group (14
officers)....................................... $ 4,354,464 138,232
All current non-employee directors, as a group.... $ 0 0
All employees who are not executive officers, as a
group........................................... $11,154,666 149,841

While the MIP, as amended and restated, would afford limited flexibility to
the Compensation Committee to vary the guidelines under which incentive awards
are made, no immediate changes are anticipated. Variations in the guidelines
would be introduced only at such time and in such fashion as the Compensation
Committee deems appropriate under existing market conditions to retain and
incent key executives and management of the Company.

THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR THE PROPOSAL TO APPROVE THE
MANAGEMENT AND PROFESSIONAL INCENTIVE PLAN, 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 as explained in this Proxy Statement. If 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.

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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.

[Enlarge/Download Table]

LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------------------------ ------------------------
OTHER ANNUAL RESTRICTED ALL OTHER
SALARY BONUS COMPENSATION STOCK AWARDS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($)(1) ($)(2)(3) (#)(4)(5) ($)(6)
--------------------------- ---- -------- --------- ------------- ------------ --------- -------------

J. R. LEE...................... 2000 738,557 1,107,800 28,846 553,900 275,000 483,595
Chairman of the Board and 1999 693,750 1,005,900 27,500 251,475 275,000 489,629
Chief Executive Officer 1998 599,038 449,300(4) 467 224,650 390,766 396,516

B. D. BLUM..................... 2000 493,461 592,200 745 296,100 140,000 165,065
President, 1999 438,845 526,600 830 131,650 124,480 139,829
Olive Garden 1998 348,076 399,000 243 1,195,691(7) 103,332 94,274

R. E. RIVERA................... 2000 525,000 630,000 0 315,000 100,000 190,590
President, 1999 504,326 459,500 43,688 114,875 100,000 109,400
Red Lobster 1998 234,890 234,900 445 1,258,725(8) 429,166(9) 236,066(10)

B. SWEATT, III................. 2000 391,826 198,423 11,538 99,212 100,000 116,418
President, 1999 366,826 396,200 0 99,050 110,000 186,291
New Business Division 1998 339,422 1,788,200(11) 137 303,964(11) 103,332 192,817

C. OTIS, JR.................... 2000 288,825 245,900 0 444,200(12) 40,000 60,455
Senior Vice President, 1999 259,807 208,200 0 52,050 35,000 50,868
Chief Financial Officer 1998 232,018 174,100 179 43,525 32,123 35,924

------------------------------
(1) Except where noted, the amounts relate to tax gross-ups for commissions paid
by the Company for the 1998 Stock Purchase/ Loan Program. For J. R. Lee in
1999 and 2000, these amounts relate to reimbursement for unused vacation.
For R. E. Rivera in 1999, this amount relates to tax gross-ups for
relocation expenses and non-deductible moving expenses. For B. Sweatt, III
in 2000, this amount relates to reimbursement for unused vacation.

(2) Except where noted, amounts under this column for fiscal 2000 are based on
the fair market value ($15.75) of Common Stock as of June 21, 2000, which
determined the value of restricted stock granted on that date under the MIP.
Under the MIP, participants must deposit with the Company personally-owned
shares of Common Stock for shares of restricted stock awarded and, for the
restricted stock to vest, a participant's shares must remain on deposit
until the end of the corresponding restricted period. Beginning with the
fiscal 2000 awards, restricted shares vest for officers at the earlier of
achievement of a performance target or ten years. Regular dividends are paid
on all restricted shares. Restricted stock immediately vests in the event of
a change of control. The number and aggregate value of restricted stock
holdings, including the 2000 award (valued at the fair market value of
$15.75 as of June 21, 2000) and all other awards (valued at the fair market
value of $18.7188 as of May 26, 2000) total: J. R. Lee--62,740 shares
($1,070,011); B. D. Blum--88,554 shares ($1,601,811); R. E. Rivera--78,986
shares ($1,419,147); B. Sweatt, III--32,857 shares ($596,343); and C. Otis,
Jr.--34,738 shares ($627,079).

(3) Amounts for fiscal 1999 are based on the value ($21.9375) of Common Stock as
of June 22, 1999, and amounts for fiscal 1998 are based on the value
($15.6563) of Common Stock as of June 23, 1998, which determine the value of
restricted stock granted on that date under the MIP.

(4) J. R. Lee elected to receive a portion of his 1998 bonus in SRO's. As a
result, he received 96,044 options in lieu of 50% of his bonus.

(5) The following officers participated in the 1998 Stock Purchase/Loan Program.
According to the terms of this program, the officer received two options for
every share of Common Stock purchased during a specified window period. J.
R. Lee received 44,722 options; B. D. Blum received 23,332 options; R. E.
Rivera received 29,166 options; B. Sweatt, III received 23,332 options; and
C. Otis, Jr. received 17,108 options. In 1999, B. D. Blum received an
additional 4,480 options as a result of an increase in his ownership
guidelines.

(6) For fiscal year 2000, these amounts relate to FlexComp, the Company's
nonqualified deferred compensation plan.

(7) For B. D. Blum, the Board approved a one-time award of 70,000 restricted
shares valued at $1,095,941 based on the fair market value ($15.6563) of
Common Stock on the date of grant, June 23, 1998. These shares vest 25% each
year over a four-year period.

(8) For R. E. Rivera, an award of 100,000 restricted shares was granted on the
date of hire. The amount of the award is based on the fair market value of
Common Stock ($12.00) on the date of grant (December 12, 1997). These shares
vest 25% each year over a period of four years.

(9) For R. E. Rivera, an award of 400,000 bonus replacement options were granted
as an employment bonus on the date of hire (December 12, 1997). The options
fully vest over a period of four years.

(10) R. E. Rivera was hired on December 12, 1997. As part of his employment
offer, he received a sign-on bonus of $235,000 of which he deferred payment
of $100,000.

(11) Pursuant to a performance agreement based on successful efforts in
developing the Bahama Breeze concept, B. Sweatt, III received a special
one-time bonus of $1,650,000 and 17,208 shares of restricted stock valued at
$269,413 (based on the fair market value of $15.6563 of the Company's stock
on the date of grant, June 23, 1998). During the development period of four
years, his MIP bonus had been reduced by 65%.

(12) C. Otis, Jr. received a one-time restricted stock grant of 20,000 shares
related to his promotion to Senior Vice President, Chief Financial Officer.
The restricted stock is valued at $321,250 (based on the fair market value
of $16.0625 on December 16, 1999) and vests 25% each year over a four-year
period.

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OPTION GRANTS IN LAST FISCAL YEAR

The following table summarizes awards of stock options in fiscal 2000 to the
executive officers named in the Summary Compensation Table.

[Enlarge/Download Table]

POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS (1) FOR OPTION TERM ($)(2)
-------------------------------------------------------- -----------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED EXERCISE
OPTIONS TO EMPLOYEES PRICE EXPIRATION
NAME GRANTED (#)(3) IN FISCAL YEAR ($/SHARE) DATE 5% ($) 10%($)
---- -------------- -------------- --------- ---------- ------------- -------------

J. R. Lee.............. 275,000 7.38% 21.9375 6/22/09 $3,793,981 $9,614,734
B. D. Blum............. 140,000 3.76% 21.9375 6/22/09 $1,931,481 $4,894,773
R. E. Rivera........... 100,000 2.68% 21.9375 6/22/09 $1,379,629 $3,496,267
B. Sweatt, III......... 100,000 2.68% 21.9375 6/22/09 $1,379,629 $3,496,267
C. Otis, Jr............ 40,000 1.07% 21.9375 6/22/09 $ 551,851 $1,398,506

------------------------

(1) All options are granted at the fair market value of the Common Stock on the
grant date (June 22, 1999) and generally expire ten years from the grant
date. All options vest immediately in the event of a change of control.

(2) These assumed values result from certain prescribed rates of stock price
appreciation. The actual value of these option grants is dependent on future
performance of the Common Stock and overall stock market conditions. There
is no assurance that the values reflected in this table will be achieved.

(3) These stock option grants under the 1995 Plan become exercisable according
to the following schedule: 50% on June 22, 2002 and 50% on June 22, 2003.

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STOCK OPTIONS

The following table summarizes the stock option exercises by the executive
officers named in the Summary Compensation Table during fiscal year 2000 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

[Enlarge/Download Table]

NUMBER OF SECURITIES
UNDERLYING UNEXERCISED OPTIONS
AT FISCAL YEAR END (#)
---------------------------------------------------------
SHARES
ACQUIRED VALUE CONVERSION PLAN (1) 1995 PLAN (2)
ON EXERCISE REALIZED --------------------------- ---------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------------- ---------- ----------- ------------- ----------- -------------

J. R. Lee............ 119,647 $1,850,855 717,155 -- 135,902 1,344,722

B. D. Blum........... 22,347 $ 229,973 149,197 -- 24,900 487,812

R. E. Rivera......... -- -- -- -- 240,000 389,166

B. Sweatt, III....... 63,384 $ 962,356 267,336 -- 26,500 473,332

C. Otis, Jr.......... -- -- -- -- -- 122,108

VALUE OF UNEXERCISED
IN-THE-MONEY OPTIONS
AT FISCAL YEAR END ($)(3)
---------------------------
NAME EXERCISABLE UNEXERCISABLE
---- ----------- -------------

J. R. Lee............ $6,834,884 $7,597,182
B. D. Blum........... $1,469,235 $2,319,379
R. E. Rivera......... $1,612,512 $1,577,219
B. Sweatt, III....... $2,487,155 $2,586,146
C. Otis, Jr.......... -- $ 537,833

------------------------------

(1) These options were granted as a result of the conversion in 1995 of General
Mills stock options previously granted to the named officers. 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, and one-third of the aggregate economic value of each stock option
grant was converted into newly issued stock options for Company Common
Stock. Both the price and number of General Mills stock options were
adjusted. General Mills stock options retained by the named officers are not
reported in this table. The aggregate 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 from the 1995 Plan.

(3) Value of all unexercised options equals the fair market value at May 26,
2000 ($18.7188) of the shares underlying in-the-money options, less the
exercise price, times the number of in-the-money options outstanding.

CHANGE IN CONTROL ARRANGEMENTS

As of May 28, 2000, the Company had management continuity agreements with 14
of its executive officers, including those named in the Summary Compensation
Table. The agreements provide 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.
The agreements also provide that the severance payment shall be reduced by an
amount necessary to ensure that the payments are not subject to any excise taxes
that might otherwise be payable under Section 4999 of 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 non-employee directors' compensation plans, the MIP, FlexComp 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 1995 Plan and the Stock Option and Long-Term Incentive
Conversion Plan all vest in full immediately upon a change of control, as
defined in those plans.

STOCK OWNERSHIP GUIDELINES AND STOCK PURCHASE/LOAN OPPORTUNITY

In June 1997, the Company adopted stock ownership guidelines for executive
management. Under the guidelines, the Chief Executive Officer is to own, after
seven years, Common Stock valued at a multiple of

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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 stock purchase/loan program (the "1998
Stock Purchase/Loan Program") under the 1995 Plan that awards two options for
every new share purchased, up to a maximum total share value equal to a
designated percentage of the 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. As of May 28, 2000, 63 current
officers have participated in the 1998 Stock Purchase/Loan Program. The program
has resulted in the purchase of a total of 225,743 shares by Company officers.

REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors (for purposes of this
report, the "Committee") is composed entirely of independent outside directors
(see the section entitled "Committees of the Board" in this Proxy Statement).
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 uses independent consultants to provide it
with background information to assist it in performing its duties. During fiscal
2000, the Committee engaged the services of two nationally known compensation
consulting firms to review and analyze the Company's compensation program. Those
firms advised the Committee that:

- The current program is sound in its focus on performance;

- The current program makes appropriate use of short and long-term
incentives; and

- The current program places greater emphasis on long-term incentives than
the pay programs of most of the Company's competitors, and as a result,
creates strong alignment of the interests of management with those of
stockholders.

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 contained in this Proxy Statement, 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, with potential incentive bonuses under the MIP. If individual and
corporate or unit performance is above average compared with 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
with the compensation peer group, then total cash compensation will also be
below average.

The peer group against which compensation and performance are compared is
comprised of publicly-traded chain restaurant companies with substantial
capitalization. Supplemental pay data is obtained from hospitality, retail and
other general industry companies.

The compensation peer group is a broader group than the S&P Restaurant Index
used in the Total Shareholder Return performance graph at the end of this Proxy
Statement. 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.

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The Company also encourages executives to exchange cash compensation for
stock-based compensation. This is discussed below in the section entitled
"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 the executive's pay relative to the compensation peer group. The
budgeted salary increase for all employees is also considered in determining
base salary increases for executive officers.

MANAGEMENT AND PROFESSIONAL INCENTIVE PLAN

Annual cash incentive awards are granted by the Committee to executive
officers under the MIP. Awards to key executives are based on the impact of the
individual's position on overall corporate results as measured by the position,
level and base salary of the individual and the degree to which the individual
can affect the results. Awards to executives who also serve as directors are
subject to Board approval. For further discussion of the MIP, see Item No. 3 in
this Proxy Statement.

For fiscal 2000, the Company's business plan established targets of 17.7%
growth in diluted earnings per share ("EPS") and 10.8% return on average capital
("ROC"). Pursuant to the terms and conditions of the MIP, the Committee met on
June 21, 2000, to evaluate the Company's performance and determine a corporate
rating. This rating is based upon diluted EPS growth and ROC actually achieved
for the 2000 fiscal year compared to the targets approved by the Committee at
the inception of the fiscal year. For fiscal 2000, the corporate ratings could
range from 0 to 2.0, with a rating of 1.30 if the targets were achieved. With an
EPS growth before net restructuring credit of 36% (diluted) and ROC of 12.3%,
the Company met the required level of performance for a 2.0 corporate rating.

For fiscal 2001, the Compensation Committee seeks to encourage continuation
of the momentum of significant improvement achieved in fiscal 2000. The fiscal
2001 targets require achievement of aggressive levels of EPS growth, ROC and
revenue growth.

STOCK-BASED COMPENSATION

The Committee and management believe that broad and deep employee stock
ownership effectively facilitates the building of stockholder wealth and aligns
the interests of employees with those of the stockholders. At the end of fiscal
2000, approximately 23.5% of the Company's outstanding shares were owned either
by the Employee Stock Ownership Plan portion of the DSP, or by 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.

The 1995 Plan enables the Company to attract and retain able employees by
the awarding of stock options, restricted stock and restricted stock units.
Awards are made to employees, including most restaurant managers and salaried
personnel meeting minimum service requirements, who are responsible for the
growth and sound development of the business of the Company.

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 employee's level of responsibility in the organization) and on their
individual performance. A total of 66 officers were granted options under this
program in fiscal 2000, and on June 21, 2000, options were granted to an
additional 3,426 employees. Stock option grants to the Chief Executive Officer
and other executive officers are periodically reviewed against option grants
made by other large restaurant, hospitality and retail companies in the
compensation peer group previously described.

The provisions of the 1995 Plan permit executives to exchange part of their
annual cash incentive payout for a grant of additional stock options, referred
to as SRO's. The size of the option grant is based

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Darden Restaurants Inc · DEF 14A · For 9/20/00

Filed On 8/8/00 4:54pm ET · SEC File 1-13666 · Accession Number 912057-0-35335

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