Red Lobster 2012 Annual Report Download - page 67

Notes to Consolidated Financial Statements
Darden
Darden Restaurants, Inc. 2012 Annual Report 63
`NOTE 18
STOCK-BASED COMPENSATION
We maintain two active stock option and stock grant plans under which new
awards may still be issued, known as the Darden Restaurants, Inc. 2002 Stock
Incentive Plan (2002 Plan) and the RARE Hospitality International, Inc. Amended
and Restated 2002 Long-Term Incentive Plan (RARE Plan). We also have four
other stock option and stock grant plans under which we no longer can grant
new awards, although awards outstanding under the plans may still vest and be
exercised in accordance with their terms: the Stock Plan for Directors (Director
Stock฀Plan);฀the฀Director฀Compensation฀Plan;฀the฀Stock฀Option฀and฀Long-Term฀
Incentive Plan of 1995 (1995 Plan) and the Restaurant Management and
Employee Stock Plan of 2000 (2000 Plan). All of the plans are administered by
the Compensation Committee of the Board of Directors. The 2002 Plan provides
for the issuance of up to 18.3 million common shares in connection with the
granting of non-qualified stock options, incentive stock options, stock appreciation
rights, restricted stock, restricted stock units (RSUs), stock awards and other
stock-based awards including performance stock units and Darden stock units
to key employees and non-employee directors. The RARE Plan provides for the
issuance of up to 3.9 million common shares in connection with the granting
of non-qualified stock options, incentive stock options and restricted stock to
employees. Awards under the RARE Plan are only permitted to be granted to
employees who were employed by RARE as of the date of acquisition and continued
their employment with the Company. The Director Stock Plan provided for the
issuance of up to 0.375 million common shares out of our treasury in connection
with the granting of non-qualified stock options, restricted stock and RSUs to
non-employee directors. No new awards could be granted under the Director
Stock Plan after September 30, 2000. The Director Compensation Plan provided
for the issuance of 0.1 million common shares out of our treasury to non-
employee directors of the Board. No new awards may be granted under the
Director Compensation Plan after September 30, 2005. The 1995 Plan provided
for the issuance of up to 33.3 million common shares in connection with the
granting of non-qualified stock options, restricted stock or RSUs to key employees.
The 2000 Plan provided for the issuance of up to 5.4 million shares of common
stock out of our treasury as non-qualified stock options, restricted stock or RSUs.
Under all of these plans, stock options are granted at a price equal to the fair
value of the shares at the date of grant for terms not exceeding ten years and
have various vesting periods at the discretion of the Compensation Committee.
Outstanding options generally vest over one to four years. Restricted stock and
RSUs granted under the 1995 Plan, the 2000 Plan and the 2002 Plan generally
vest over periods ranging from three to five years and no sooner than one year
from the date of grant. Performance Stock Units granted under the 2002 Plan
generally vest over a three-year period, and vested amounts may range from
0.0 to 150.0 percent of targeted amounts depending on the achievement of certain
sales and diluted net earnings per share performance measures. Darden stock
units granted under the 2002 Plan generally vest over a five-year period, with no
performance vesting feature.
On December 15, 2005, the Board of Directors approved the Director
Compensation Program, effective as of October 1, 2005, for Non-Employee
Directors. The Director Compensation Program provides for payments to non-
employee directors of: (a) an annual retainer and meeting fees for special Board
meetings฀and฀committee฀meetings;฀(b)฀an฀additional฀annual฀retainer฀for฀the฀Lead฀
Director฀and฀committee฀chairs;฀and฀(c)฀an฀annual฀award฀of฀common฀stock฀with฀
a fair value of $0.1 million on the date of grant upon election or re-election to
the Board. Directors may elect to have their cash compensation paid in any
combination of current or deferred cash, common stock or salary replacement
options. Deferred cash compensation may be invested on a tax-deferred basis
in the same manner as deferrals under our non-qualified deferred compensation
plan. Prior to the date of grant, directors may elect to have their annual stock
award paid in the form of common stock or cash, or a combination thereof, or
deferred. To the extent directors elect to receive cash or cash settled awards,
the value of the awards are carried as a liability on our consolidated balance sheet
at fair value until such time as it is settled. All stock options and other stock or
stock-based awards that are part of the compensation paid or deferred pursuant
to the Director Compensation Program are awarded under the 2002 Plan.
Stock-based compensation expense included in continuing operations was
as follows:
Fiscal Year
(in millions) 2012 2011 2010
Stock options $19.0 $20.7 $20.2
Restricted stock/restricted stock units 4.3 9.9 10.2
Darden stock units 17.1 17.1 13.1
Performance stock units 12.6 15.6 6.8
Employee stock purchase plan 1.8 1.9 1.8
Director compensation program/other 1.3 1.4 1.4
$56.1 $66.6 $53.5