8-KLeadership ChangesExhibits & Filings

DARDEN RESTAURANTS INC 8-K Report, Executive Changes (Dec 24, 2013)

Filed December 24, 2013For Securities:DRI

Summary

This Form 8-K filing by Darden Restaurants, Inc. (DRI) details compensation arrangements for Brad Richmond, who is slated to become Chief Financial and Administrative Officer of Red Lobster should it be spun off or sold. These arrangements are directly tied to the previously announced strategic review of the Red Lobster business unit. The agreement outlines significant financial incentives for Mr. Richmond, including a substantial base salary, bonus targets, a signing bonus, and long-term incentive awards. The terms are structured to encourage his continued leadership within Red Lobster, regardless of whether it becomes a separate entity via spin-off or is sold to a third party. The compensation package reflects the potential for a significant organizational change and aims to retain key talent during this transition period.

Key Highlights

  • 1Darden Restaurants entered into an agreement with Brad Richmond, who is designated to become the Chief Financial and Administrative Officer of Red Lobster.
  • 2The agreement is contingent upon the completion of a spin-off or sale of the Red Lobster business within 12 months.
  • 3Mr. Richmond is set to receive an initial base salary of $580,000 and a bonus target of 60% of base salary if a spin-off occurs.
  • 4A signing bonus of $250,000 is included, applicable if either a spin-off or sale is completed within the 12-month timeframe.
  • 5Significant long-term incentive awards are provided, with a first annual award of $1,500,000 and a one-time special award target of $1,000,000 in Red Lobster.
  • 6Severance provisions are detailed for Mr. Richmond if he serves as a senior executive of Red Lobster post-sale and is terminated without cause or resigns for good reason within two years.
  • 7The Company will attempt to place Mr. Richmond in a comparable position within Darden if a senior executive role with the buyer is not offered or if he does not commence employment with the buyer, with specific severance if no comparable role is found.

Frequently Asked Questions

The main purpose of this filing is to disclose the compensation and employment agreement reached with Brad Richmond, who is designated to lead Red Lobster's finance and administration functions should the business be spun off or sold. This agreement is a direct consequence of Darden Restaurants' review of the Red Lobster segment.

Mr. Richmond is eligible for a $580,000 base salary, a 60% bonus target, a $250,000 signing bonus, and substantial long-term incentive awards totaling $1,500,000 for the first annual award and a $1,000,000 target for a special long-term incentive award, all dependent on the completion of the Red Lobster transaction within 12 months.

If Red Lobster is sold within 12 months, Mr. Richmond will receive the signing bonus. He also has severance protections if he continues as a senior executive of Red Lobster post-sale and is terminated without cause or resigns for good reason within two years. If he is not offered a comparable role with the buyer, Darden will seek to place him in a comparable role within Darden, with specific severance provisions if this is not possible.

Yes, many of the benefits are subject to the execution of a standard release agreement. Additionally, the definitions of 'cause' and 'good reason' are based on the terms previously established in the Company's Management Continuity Agreement (MCA).