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                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

--------------------------------------------------------------------------------
                                    FORM 10-K
--------------------------------------------------------------------------------
(Mark One)
/X/     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934
                     For the fiscal year ended May 25, 2003

/ /     TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
        EXCHANGE ACT OF 1934

              For the transition period from ___ to ___ Commission
                              File Number: 1-13666

                            DARDEN RESTAURANTS, INC.
             (Exact name of registrant as specified in its charter)

        Florida                                          59-3305930
(State or other jurisdiction of             (IRS Employer Identification Number)
 incorporation or organization)

       5900 Lake Ellenor Drive                             32809
         Orlando, Florida                                (Zip Code)
(Address of principal executive offices)

                          (407) 245-4000 (Registrant's
                     telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:

                                                         Name of each exchange
        Title of each class                              on which registered
        -------------------                              ---------------------
   Common Stock, without par value                      New York Stock Exchange
         and Preferred Stock Purchase Rights

        Securities registered pursuant to Section 12(g) of the Act: None

     Indicate  by check mark  whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ____

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes X No ____

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated by Reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

     Aggregate  market  value of  Common  Stock  held by  non-affiliates  of the
Registrant,  based on the  closing  price of $21.33 per share as reported on the
New York Stock Exchange on November 22, 2002: $3,638,817,628.

     Number  of  shares  of  Common  Stock  outstanding  as of  July  28,  2003:
164,330,855 (excluding 98,079,127 shares held in the Company's treasury).

                       DOCUMENTS INCORPORATED BY REFERENCE
Portions  of  the  Registrant's  Proxy  Statement  dated  August  22,  2003  are
incorporated by reference into Part III, and portions of the Registrant's Annual
Report to Shareholders  for the fiscal year ended May 25, 2003 are  incorporated
by reference into Parts I, II and IV of this Report.


<PAGE>





                                     PART I

Item 1.  BUSINESS

Introduction

     Darden  Restaurants,  Inc.  is the  largest  publicly  held  casual  dining
restaurant  company in the  world1,  and served over 300  million  meals  during
fiscal 2003. As of May 25, 2003,  we operated  1,271  restaurants  in the United
States and Canada.  In the United States,  we operated  1,234  restaurants in 49
states (the exception  being Alaska),  including 642 Red  Lobster(R),  518 Olive
Garden(R),  34 Bahama  Breeze(R),  39 Smokey  Bones(R)  BBQ and one Seasons 52SM
restaurants. In Canada, we operated 37 restaurants, including 31 Red Lobster and
six Olive Garden  restaurants.  We own and operate all of our restaurants in the
United States and Canada, with no franchising.  Of our 1,271 restaurants and the
one Olive Garden Cafe open on May 25, 2003,  803 were located on owned sites and
469 were  located  on  leased  sites.  In  Japan,  we  licensed  33 Red  Lobster
restaurants  to  an  unaffiliated   Japanese   corporation   that  operates  the
restaurants under an Area Development and Franchise Agreement.

     Darden is a Florida  corporation  incorporated  in March  1995,  and is the
parent company of GMRI,  Inc.,  also a Florida  corporation.  GMRI and our other
subsidiaries own the operating  assets of the  restaurants.  GMRI was originally
incorporated in March 1968 as Red Lobster Inns of America, Inc.

     Our principal  executive offices and restaurant  support center are located
at 5900 Lake Ellenor Drive,  Orlando,  Florida 32809,  telephone (407) 245-4000.
Our corporate  website address is  www.darden.com  (or, for employees inside our
computer firewall, www.dardenusa.com).  We make our filed reports on Forms 10-K,
10-Q and 8-K, and Section 16 reports on Forms 3, 4 and 5, and all  amendments to
those  reports  available  free of  charge  on our  website  the same day as the
reports are filed with or furnished to the Securities  and Exchange  Commission.
Information  on our website is not deemed to be  incorporated  by reference into
this Form 10-K.  Unless the  context  indicates  otherwise,  all  references  to
Darden,   "we",   "our"  or  "us"  include  Darden,   GMRI  and  our  respective
subsidiaries.

Background

     We opened our first  restaurant,  a Red Lobster,  in  Lakeland,  Florida in
1968.  Red Lobster was founded by William B. Darden,  for whom we are named.  We
were acquired by General Mills,  Inc. in 1970. In May 1995, we became a separate
publicly  held company when General Mills  distributed  all  outstanding  Darden
stock to General Mills' stockholders.

     The number of Red Lobster and Olive Garden  restaurants  open at the end of
fiscal 2003  increased  by six and 28,  respectively,  as compared to the end of
fiscal 2002. Red Lobster has grown from six  restaurants in operation at the end
of fiscal 1970 to 673 units in North  America by the end of fiscal  2003.  Olive
Garden, an internally developed concept, opened its first restaurant in Orlando,
Florida  in fiscal  1983,  and by the end of  fiscal  2003 had  expanded  to 524
restaurants and one food court cafe in North America.

     Bahama Breeze is an internally developed concept with a Caribbean theme. In
fiscal 1996, Bahama Breeze opened its first restaurant in Orlando,  Florida.  At
the end of fiscal 2003, there were 34 Bahama Breeze restaurants.

     Smokey Bones is also an internally developed concept featuring barbeque and
other  American-style  favorites served in an inviting lodge setting.  The first
restaurant was opened in fiscal 2000 in Orlando,  Florida.  At the end of fiscal
2003, there were 39 Smokey Bones restaurants.

     In February  2003,  we opened a new test  restaurant  in  Orlando,  Florida
called  Seasons  52SM. It is a casually  sophisticated  fresh grill and wine bar
with  seasonally  inspired  menus  offering  fresh  ingredients  to create great
tasting, nutritionally balanced meals that are lower in calories than comparable
restaurant meals.

----------------------------------------
1Source:  Nation's  Restaurant News,  "Special  Report:  Top 100," June 30, 2003
(based on revenues from company- owned restaurants).

                                       2

<PAGE>


     The table  below  shows our  growth  and  lists the  number of  restaurants
operated by Red Lobster,  Olive Garden,  Bahama Breeze, Smokey Bones and Seasons
52 as of the end of each fiscal year since 1970.  The final  column in the table
lists our total sales for the years indicated.
<TABLE>
<CAPTION>

              Company-Operated Restaurants Open at Fiscal Year End

    Fiscal          Red         Olive       Bahama       Smokey      Seasons          Total            Total Company Sales
     Year         Lobster    Garden (1)     Breeze        Bones         52      Restaurants (1)(2)   ($ in Millions) (3)(4)
     ----         -------    ----------     ------        -----         --      ------------------   ----------------------
     <S>               <C>          <C>           <C>          <C>         <C>         <C>                   <C>

     1970                6                                                                 6                     3.5
     1971               24                                                                24                     9.1
     1972               47                                                                47                    27.1
     1973               70                                                                70                    48.0
     1974               97                                                                97                    72.6
     1975              137                                                               137                   108.5
     1976              174                                                               174                   174.1
     1977              210                                                               210                   229.2
     1978              236                                                               236                   291.4
     1979              244                                                               244                   337.5
     1980              260                                                               260                   397.6
     1981              291                                                               291                   528.4
     1982              328                                                               328                   614.3
     1983              360            1                                                  361                   718.5
     1984              368            2                                                  370                   782.3
     1985              372            4                                                  376                   842.2
     1986              401           14                                                  415                   917.3
     1987              433           52                                                  485                 1,097.7
     1988              443           92                                                  535                 1,300.8
     1989              490          145                                                  635                 1,621.5
     1990              521          208                                                  729                 1,927.7
     1991              568          272                                                  840                 2,212.3
     1992              619          341                                                  960                 2,542.0
     1993              638          400                                                1,038                 2,737.0
     1994              675          458                                                1,133                 2,963.0
     1995              715          477                                                1,192                 3,163.3
     1996              729          487            1                                   1,217                 3,191.8
     1997              703          477            2                                   1,182                 3,171.8
     1998              682          466            3                                   1,151                 3,261.6
     1999              669          464            6                                   1,139                 3,432.4
     2000              654          469           14            2                      1,139                 3,675.5
     2001              661          477           21            9                      1,168                 3,992.4
     2002              667          496           29           19                      1,211                 4,366.9
     2003              673          524           34           39          1           1,271                 4,655.0

----------------------------
<FN>

(1)  Does not include one Olive Garden Cafe restaurant.
(2)  Includes only Red Lobster,  Olive Garden,  Bahama Breeze,  Smokey Bones and
     Seasons 52 restaurants. Does not include other restaurant concepts operated
     by us in these years that are no longer owned or operated by us.
(3)  Includes  total  sales  from all of our  operations,  including  sales from
     restaurant  concepts  besides Red Lobster,  Olive  Garden,  Bahama  Breeze,
     Smokey Bones and Seasons 52 that are no longer owned or operated by us.
(4)  Emerging  Issues  Task Force  Issue 00-14  "Accounting  for  Certain  Sales
     Incentives"  requires  sales  incentives to be classified as a reduction of
     sales.  We adopted  Issue 00-14 in the fourth  quarter of fiscal 2002.  For
     purposes of this presentation, sales incentives have been reclassified as a
     reduction  of sales for fiscal 1998  through  2003.  Sales  incentives  for
     fiscal years prior to 1998 have not been reclassified.

</FN>
</TABLE>

                                       3

<PAGE>



Strategy

     The  restaurant  industry is generally  considered  to be comprised of four
segments: quick service,  midscale,  casual dining and fine dining. The industry
is highly  fragmented and includes many independent  operators and small chains.
We  believe  that  capable  operators  of strong  multi-unit  concepts  have the
opportunity  to increase  their share of the casual dining  segment.  We plan to
grow by increasing the number of  restaurants  in each of our existing  concepts
and by  developing  or  acquiring  additional  concepts  that  can  be  expanded
profitably.

     While we are a leader in the casual  dining  segment,  we know we cannot be
successful  without a clear sense of who we are. Our core purpose is "To nourish
and  delight  everyone we serve."  This core  purpose is  supported  by our core
values:

     o integrity and fairness;
     o respect and caring;
     o diversity;
     o always learning/always teaching;
     o being "of service";
     o teamwork; and
     o excellence.

     Our mission is to be "The best in casual dining,  now and for generations."
Three strategic imperatives or "building blocks" support our mission:

     o leadership development as a core competency;
     o service and hospitality excellence; and
     o culinary and beverage excellence.

     These strategic imperatives are supported by three key enablers:

     o brand management skills;
     o diversity competency; and
     o technology solutions.

     Continuing focus on our three building blocks,  supported by our commitment
to brand management,  diversity and technology, provides a strong foundation for
future growth.

Restaurant Concepts

Red Lobster

     Red  Lobster is the largest  casual  dining,  seafood-specialty  restaurant
operator in the United States. It offers an extensive menu featuring fresh fish,
shrimp,  crab, lobster,  scallops and other seafood in a casual atmosphere.  The
menu includes a variety of specialty seafood and non-seafood entrees, appetizers
and desserts.

     Dinner  entree  prices range from $8.99 to $27.99,  with certain fresh fish
and lobster  items  available at market  price.  Lunch entree  prices range from
$5.99 to $11.99,  and include side items and our signature Cheddar Bay biscuits.
During fiscal 2003,  the average check per person was between $16.00 and $17.00,
with  alcoholic  beverages  accounting  for about nine percent of Red  Lobster's
sales. Red Lobster maintains  approximately 135 different menus across its trade
areas to reflect  geographic  differences  in consumer  preferences,  prices and
selections, as well as a lower-priced children's menu.

     Fiscal 2003 was a record year in sales for Red Lobster, with total sales of
$2.433  billion.  Sales were 4.1 percent  above the previous  year,  and average
sales per  restaurant  for fiscal 2003 were $3.7 million - all record levels for
Red  Lobster.  As of the  end  of  fiscal  2003,  Red  Lobster  had  enjoyed  22
consecutive quarters of U.S. same-restaurant sales increases.  Nevertheless, Red
Lobster's  total sales in fiscal 2003 were lower than  expected.  Despite  lower
food and beverage costs as a percent of sales, Red Lobster experienced increased
expenses,  particularly

                                       4

<PAGE>

restaurant labor costs, restaurant expenses, selling, general and administrative
expenses  and  depreciation  as a  percent  of sales.  This led to a decline  in
operating profit during fiscal 2003 versus last year.

Olive Garden

     Olive  Garden is the  market  share  leader  among  casual  dining  Italian
restaurants  in the United  States.  Olive  Garden's  menu includes a variety of
authentic Italian foods featuring fresh  ingredients,  and an expanded wine list
that includes a broad selection of wines imported from Italy.  The menu includes
antipasti  (appetizers);  soups,  salad and garlic  breadsticks;  baked  pastas;
sauteed specialties with chicken,  seafood and fresh vegetables;  grilled meats;
and a variety of desserts. Olive Garden also uses coffee imported from Italy for
its espresso and cappuccino.

     Most dinner entree prices range from $7.75 to $17.95, and most lunch entree
prices range from $5.95 to $9.25. The price of each entree also includes as much
fresh salad or soup and breadsticks as a guest desires.  During fiscal 2003, the
average  check  per  person  was  $13.00 to  $14.00,  with  alcoholic  beverages
accounting  for  about  nine  percent  of Olive  Garden's  sales.  Olive  Garden
maintains  approximately 40 different dinner menus and 30 lunch menus across its
trade areas to reflect geographic  differences in consumer  preferences,  prices
and selections, as well as two lower-priced children's menus.

     Fiscal 2003 was a record  year for both sales and profits at Olive  Garden.
Olive Garden's total sales for fiscal 2003 were $1.990  billion,  up 6.8 percent
from the prior  year,  and its annual  average  sales per  restaurant  were $3.9
million,  both record levels.  Olive Garden had 35 consecutive  quarters of U.S.
same-restaurant  sales  increases as of the end of fiscal 2003.  Olive  Garden's
sales gains,  combined with lower food and beverage  expense,  restaurant  labor
costs and general and  administrative  expenses as a percent of sales, more than
offset  increased  restaurant  and  marketing  expenses  as a percent  of sales,
resulting in record annual operating profit during fiscal 2003.

Bahama Breeze

     Bahama  Breeze  is a  Caribbean-themed  restaurant  that  offers  guests  a
distinctive island dining experience. The first Bahama Breeze opened in 1996 and
met with strong positive consumer response.  We continued to test the concept by
opening a limited  number of  additional  restaurants  in each of the  following
years,  and began  national  expansion  of the concept in 1998.  In fiscal 2003,
sales  at  Bahama  Breeze   surpassed  $137  million  and  we  opened  five  new
restaurants,  bringing the total to 34 restaurants.  The concept continues to be
well  received by guests,  although its  financial  performance  has not met our
overall expectations,  and we are making changes that we anticipate will improve
its sales, financial performance and long-term potential.  These changes include
testing lunch operations,  creating a new dinner menu and slowing new restaurant
development (we plan to open four new Bahama Breeze  restaurants in fiscal 2004)
while  reducing  the size of the building  and the related  capital  investment.
However,  these  actions  are still in the test  phase and  results  will not be
available  until late in fiscal 2004.  We expect Bahama Breeze to continue to be
dilutive to earnings in fiscal 2004.

Smokey Bones

     Smokey Bones features  barbequed pork,  beef and chicken,  as well as other
authentic  American-style  favorites,  all served in a casual and inviting lodge
setting that includes sports viewing on televisions.  We opened the first Smokey
Bones in September  1999, and began national  expansion of the concept in fiscal
2002.  Sales  for  Smokey  Bones  were $93  million  in fiscal  2003.  There are
currently 39 Smokey Bones  restaurants,  and we plan to open 25 to 30 new Smokey
Bones  restaurants  in fiscal  2004.  We believe  that  Smokey  Bones has strong
expansion  potential and is capable of achieving future sales of $500 million or
more.

Recent and Planned Growth

     During fiscal 2003, we opened 65 new restaurants  (excluding the relocation
of  existing  restaurants  to new sites and the  rebuilding  of  restaurants  at
existing sites) and closed four restaurants.  This resulted in a net increase of
61 restaurants  in fiscal 2003  (assuming the re-opening of one restaurant  that
was  temporarily  closed  as of  the  end of  fiscal  2003).  We  plan  to  open
approximately 57 to 71 new Red Lobster,  Olive Garden,  Bahama Breeze and Smokey
Bones restaurants during fiscal 2004 (excluding  relocations and rebuilds).  Our
actual  and  projected  new  openings  by  concept  (excluding  relocations  and
rebuilds) are shown below.

                                       5

<PAGE>

<TABLE>
<CAPTION>

                                                              Actual New               Projected New
                                                          Restaurant Openings       Restaurant Openings
                                                            Fiscal 2003(1)              Fiscal 2004
                                                            --------------              -----------
         <S>                                                       <C>                      <C>
         Red Lobster................................                 11                        8-12
         Olive Garden...............................                 28                       20-25
         Bahama Breeze..............................                  5                           4
         Smokey Bones...............................                 20                       25-30
                                                                   ----                       -----
               Totals...............................                 64                      57-71
<FN>

         (1) Excludes one Seasons 52 test restaurant.
</FN>
</TABLE>

     Our objective is to continue to expand our current  portfolio of restaurant
concepts,  and to develop or acquire  additional  concepts  that can be expanded
profitably.  We are  currently  testing new ideas and  concepts,  and  expanding
Bahama  Breeze  and  Smokey  Bones  nationally  in light of  favorable  consumer
response.  We also evaluate potential  acquisition  candidates to assess whether
they would satisfy our strategic and financial  objectives.  At present, we have
not identified any specific acquisitions.

     We will continue to focus on improving  operational returns at Olive Garden
and Red Lobster,  and will limit new  restaurant  expansion of those concepts to
high  potential  sites that we believe can generate  significant  returns on our
investments.  Olive  Garden's  expansion  will  include its  recently  developed
"Tuscan  Farmhouse"  design, an outgrowth of our collaboration  with Rocca delle
Macie, a family-owned winery in Tuscany,  Italy. In addition,  we plan to expand
Bahama  Breeze and Smokey  Bones at a pace that we believe  will enable each new
restaurant  to capture the  concept's  full  potential.  The specific  number of
openings  will  depend  on many  factors,  such as the  success  of the  changes
discussed  above at Bahama  Breeze,  in addition to, in general,  our ability to
locate appropriate sites,  negotiate  acceptable purchase or lease terms, obtain
necessary local  governmental  permits,  complete  construction  and recruit and
train restaurant management and hourly personnel.

     We consider  location to be a critical factor in determining a restaurant's
long-term  success,  and we  devote  significant  effort  to the site  selection
process.  Prior to entering a market,  we conduct a thorough  study to determine
the optimal  number and placement of  restaurants.  Our site  selection  process
incorporates a variety of analytical  techniques to evaluate key factors.  These
factors include trade area  demographics,  such as target population density and
household  income levels;  competitive  influences in the trade area; the site's
visibility,  accessibility and traffic volume; and proximity to activity centers
such as shopping malls, hotel/motel complexes, offices and universities. Members
of senior management evaluate, inspect and approve each restaurant site prior to
its acquisition.  Constructing and opening a new restaurant  typically takes 120
to 180 days after the site is acquired and permits are obtained.

     The following table illustrates the approximate average capital investment,
size and dining  capacity of the 11 Red Lobster and 28 Olive Garden  restaurants
that were  opened  during  fiscal  2003  (excluding  relocations,  rebuilds  and
conversions of existing restaurants).
<TABLE>
<CAPTION>

                                                  Capital           Square        Dining        Dining
                                               Investment(1)       Feet(2)       Seats(3)     Tables(4)
         <S>                                      <C>                <C>           <C>            <C>
         Red Lobster (5)....................      $3,714,000         6,962         222            58
         Olive Garden (6)...................      $3,779,000         7,685         210            59
<FN>

(1)  Includes net present value of leases, but excludes working capital.
(2)  Includes all space under the roof, including the coolers and freezers,  but
     excludes gazebos, pavilions and porte cocheres.
(3)  Includes bar dining seats and patio seating, but excludes bar stools.
(4)  Includes patio dining tables.
(5)  Excludes two center city urban Red Lobster restaurants whose size is larger
     and cost is  significantly  higher than the average  and  therefore  is not
     representative of the typical restaurant.
(6)  Excludes  three  center city urban Olive Garden  restaurants  whose size is
     larger and cost is  significantly  higher than the average and therefore is
     not representative of the typical restaurant.
</FN>
</TABLE>

                                       6

<PAGE>


     For Bahama  Breeze,  we are in the  process  of  designing  a new  building
prototype with a lower capital investment and a simpler design that we expect to
use for the first time in fiscal 2004. For Smokey Bones, we continue to seek out
sites  where  existing  buildings  can be  converted  to Smokey  Bones,  and are
locating new units in prime casual dining trade areas that we believe will allow
us to realize  greater rates of return on investment  than were  generated  from
certain early sites in less desirable locations.

     We systematically  review the performance of our restaurants to ensure that
each one meets our standards.  When a restaurant falls below minimum  standards,
we conduct a thorough analysis to determine the causes, and implement  marketing
and operational plans to improve that restaurant's  performance.  If performance
does  not  improve  to  acceptable  levels,  the  restaurant  is  evaluated  for
relocation, closing or conversion to one of our other concepts.

     During  fiscal 2003,  we  permanently  closed four and  relocated  five Red
Lobster  restaurants in the United States.  During the same period, we relocated
three Olive Garden restaurants in the United States.

Restaurant Operations

     We believe  that  high-quality  restaurant  management  is  critical to our
long-term  success.  We  also  believe  that  our  leadership  position,  strong
success-oriented   culture  and  various  short-term  and  long-term   incentive
programs,  including stock options and restricted stock, help attract and retain
highly motivated restaurant managers.

     Our restaurant  management structure varies by concept and restaurant size.
Each restaurant is led by a general manager and one to four additional managers,
depending on the operating  complexity and sales volume of the restaurant.  Each
restaurant also employs  approximately 65 to 140 hourly employees,  most of whom
work part-time.  We issue detailed  operations  manuals  covering all aspects of
restaurant  operations,  as well as food and beverage  manuals  which detail the
preparation  procedures of our formulated  recipes.  The  restaurant  management
teams are  responsible  for the day-to-day  operation of each restaurant and for
ensuring compliance with our operating  standards.  At our two largest concepts,
Red Lobster and Olive Garden,  restaurant  general managers report to directors,
and each director is responsible  for seven to 14  restaurants.  Restaurants are
visited  regularly by all levels of supervision to help ensure strict  adherence
to all aspects of our standards.

     Each concept's vice president or director of training, together with senior
operations  executives,  is  responsible  for developing  and  maintaining  that
concept's  operations  training programs.  These efforts include a 12-to 15-week
training program for management  trainees,  and continuing  development programs
for  managers,  supervisors  and  directors.  The  emphasis of the  training and
development  programs  varies by restaurant  concept,  but includes  leadership,
restaurant  business  management  and  culinary  skills.  We also  use a  highly
structured  training  program  to  open  new  restaurants,  including  deploying
training teams experienced in all aspects of restaurant operations.  The opening
training teams  typically begin work one week prior to opening and remain at the
new  restaurant  one  week  following  the  opening.   They  are  redeployed  as
appropriate to enable a smooth transition to the restaurant's operating staff.

Quality Assurance

     Our Total  Quality  Department  helps ensure that all  restaurants  provide
safe,  high-quality  food in a clean  and  safe  environment.  Through  rigorous
physical  evaluation and testing at our North American  laboratories and through
"point source  inspection" by our international  team of Quality  Specialists in
several  foreign  countries,  we purchase only seafood that meets or exceeds our
specifications.  We use  independent  third  parties  to  inspect  and  evaluate
commodity  vendors.  In addition,  any commodity  supplier that produces a "high
risk"  product is subject to a minimum  annual food safety  evaluation by Darden
personnel.  We require our suppliers to maintain sound  manufacturing  practices
and operate with the comprehensive HACCP food safety programs in place.

     Since 1976, we have  maintained a  microbiological  laboratory to routinely
test seafood and other  commodities for quality and  microbiological  safety. In
addition,  Darden Total  Quality  Managers and third party  auditors  visit each
restaurant  periodically  throughout  the year to review  food  handling  and to
provide education and training in food safety and sanitation.  The Total Quality
managers  also serve as a liaison to regulatory  agencies on issues  relating to
food safety.

                                       7

<PAGE>

Purchasing and Distribution

     Our ability to ensure a consistent supply of high-quality food and supplies
at competitive prices to all of our restaurant concepts depends upon procurement
from reliable  sources.  Our purchasing staff sources,  negotiates and purchases
food and supplies from more than 2,000 suppliers in 45 countries. Suppliers must
meet strict quality control  standards in the  development,  harvest,  catch and
production of food products. Competitive bids, long-term contracts and long-term
vendor  relationships  are  routinely  used to manage  availability  and cost of
products.

     We believe  that our  seafood  purchasing  capabilities  are a  significant
competitive advantage.  Our purchasing staff travels routinely within the United
States and  internationally  to source more than 100  varieties  of  top-quality
seafood at competitive  prices.  We believe that we have  established  excellent
long-term relationships with key seafood vendors, and usually source our product
directly from  producers  (not brokers or  middlemen).  We operate a procurement
office in Singapore,  our only purchasing  office outside of Orlando,  to source
products  directly  from Asia.  While the supply of certain  seafood  species is
volatile,  we believe that we have the ability to identify  alternative  seafood
products and to adjust our menus as necessary. All other essential food products
are  available,  or can be made available  upon short notice,  from  alternative
qualified suppliers. Because of the relatively rapid turnover of perishable food
products, inventories in the restaurants have a modest aggregate dollar value in
relation  to  revenues.   Controlled   inventories  of  specified  products  are
distributed  to  all  restaurants  through  independent  national   distribution
companies.

Advertising and Marketing

     We believe that we have  developed  significant  marketing and  advertising
capabilities.  Our size  enables  us to be a dominant  advertiser  in the casual
dining  segment of the  restaurant  industry.  We  leverage  the  efficiency  of
national network television  advertising and supplement it with local television
advertising.  Our restaurants appeal to a broad spectrum of consumers and we use
advertising and product promotions to attract  customers.  We implement periodic
promotions  as  appropriate  to maintain and increase our sales and profits.  We
also rely on radio and  newspaper  advertising,  as well as newspaper and direct
mail couponing programs, as appropriate, to attract customers. We have developed
and consistently use sophisticated  consumer  marketing  research  techniques to
monitor customer satisfaction and evolving expectations.

Employees

     At the end of fiscal 2003, we employed  approximately  140,700 persons.  Of
these  employees,  approximately  1,300 were  corporate  or  restaurant  concept
personnel  located  in  our  restaurant  support  center  in  Orlando,  Florida,
approximately 5,850 were restaurant  management  personnel in the restaurants or
in field offices,  and the remainder were hourly  restaurant  personnel.  Of the
restaurant support center employees, approximately 60% were management personnel
and  the  balance  were  administrative  or  office  employees.   Our  operating
executives  have an  average  of more than 14 years of  experience  with us. The
restaurant general managers average 11 years with us. We believe that we provide
working  conditions and  compensation  that compare  favorably with those of our
competitors.  Most  employees,  other than  restaurant  management and corporate
management,  are paid on an hourly basis. None of our employees are covered by a
collective bargaining agreement. We consider our employee relations to be good.

Management Information Systems

     We strive for leadership in the restaurant  business by using technology as
a competitive  advantage.  Since 1975, computers located in the restaurants have
been used to assist in the management of the  restaurants.  We have  implemented
systems targeted at improved financial control, cost management,  enhanced guest
service and improved employee effectiveness.  Management information systems are
designed to be used across restaurant concepts,  yet are flexible enough to meet
the unique needs of each  restaurant  concept.  In fiscal 2002, we implemented a
suite of web-enabled  financial systems and a high-speed data network connecting
all  restaurants  to all current and  anticipated  future  applications.  During
fiscal 2003, we completed an upgrade of our human  resource  (including  payroll
and benefits) systems using web-enabled and fully integrated application suites.

                                       8

<PAGE>

     Restaurant  hardware and software  support is provided or coordinated  from
the restaurant support center in Orlando, Florida, seven days a week, 24 hours a
day. A communications  network sends and receives  critical business data to and
from  the  restaurants  throughout  the  day and  night,  providing  timely  and
extensive  information on business  activity in every  location.  The restaurant
support center houses our data center, which contains sufficient computing power
to  process  information  from all  restaurants  quickly  and  efficiently.  Our
information  is  processed in a secured  environment  to protect both the actual
data  and the  physical  assets.  We  guard  against  business  interruption  by
maintaining a disaster  recovery plan, which includes storing critical  business
information off-site,  testing the disaster recovery plan at a hot-site facility
and  providing  on-site  power  backup  via a  large  diesel  generator.  We use
internally developed proprietary  software, as well as purchased software,  with
proven, non-proprietary hardware. This allows processing power to be distributed
effectively to each of our restaurants.

     Our  management  believes its current  systems and the  upgrades  currently
underway will position us well to support  current needs and future  growth.  We
are committed to  maintaining  an industry  leadership  position in  information
systems  and  computing  technology.  We  use a  strategic  information  systems
planning  process that involves  senior  management  and is integrated  into our
overall business  planning.  Information  systems projects are prioritized based
upon strategic, financial, regulatory and other business advantage criteria.

Competition

     The restaurant  industry is intensely  competitive with respect to the type
and quality of food, price, service,  restaurant location,  personnel,  concept,
attractiveness  of facilities,  and  effectiveness  of advertising and marketing
programs.  The  restaurant  business  is often  affected  by changes in consumer
tastes;  national,  regional or local economic  conditions;  demographic trends;
traffic patterns;  the type, number and location of competing  restaurants;  and
consumers'  discretionary  purchasing  power. We compete within each market with
national and regional chains as well as locally-owned restaurants,  not only for
customers but also for management and hourly  personnel and suitable real estate
sites Restaurants also face growing  competition from the supermarket  industry,
which offers  "convenient meals" in the form of improved entrees and side dishes
from the deli section. We expect intense competition to continue in all of these
areas.

     Other factors  pertaining to our  competitive  position in the industry are
addressed   under  the  sections   entitled   "Purchasing   and   Distribution,"
"Advertising   and   Marketing,"    "Management    Information    Systems"   and
"Forward-Looking Statements" elsewhere in this report.

Trademarks and Related Agreements

     We regard our  Darden  Restaurants(R),  Red  Lobster(R),  Olive  Garden(R),
Bahama  Breeze(R),  Smokey  Bones(R) and Seasons 52SM service  marks,  and other
variations  of these service  marks,  as having  significant  value and as being
important in marketing the restaurants.  Our policy is to pursue registration of
our  important  service  marks  and  trademarks  and to  oppose  vigorously  any
infringement  of  them.  Generally,   with  appropriate  renewal  and  use,  the
registration of our service marks will continue indefinitely.

     Our only restaurant  operations outside of North America  historically have
been  conducted  through an Area  Development  and Franchise  Agreement with Red
Lobster  Japan  Co.,  Ltd.  (Red  Lobster  Japan),   an  unaffiliated   Japanese
corporation.  Red Lobster Japan operated 33 Red Lobster  restaurants in Japan as
of May 25, 2003. We do not have an ownership  interest in Red Lobster Japan, but
receive royalty income under the Franchise Agreement.  The amount of this income
is not material to our consolidated financial statements.

Seasonality

     Our sales volumes fluctuate seasonally.  During fiscal years 2003, 2002 and
2001,  our sales were highest in the spring,  lowest in the fall, and comparable
during  winter  and  summer.  Holidays,   severe  weather,  storms  and  similar
conditions may impact sales volumes seasonally in some operating regions.

                                       9

<PAGE>

Government Regulation

     We are  subject to various  federal,  state and local  laws  affecting  our
business.  Each of our restaurants  must comply with licensing  requirements and
regulations  by a number of  governmental  authorities,  which  include  health,
safety and fire agencies in the state or municipality in which the restaurant is
located.  The development  and operation of restaurants  depend on selecting and
acquiring suitable sites, which are subject to zoning, land use,  environmental,
traffic and other regulations.  To date, we have not been significantly affected
by any difficulty, delay or failure to obtain required licenses or approvals.

     Presently  about 9.6 percent of our sales are  attributable  to the sale of
alcoholic beverages.  Regulations governing their sale require licensure by each
site (in most  cases,  on an annual  basis),  and  licenses  may be  revoked  or
suspended  for cause at any time.  These  regulations  relate to many aspects of
restaurant operation,  including the minimum age of patrons and employees, hours
of operation, advertising, wholesale purchasing, inventory control and handling,
and storage and dispensing of alcoholic  beverages.  The failure of a restaurant
to obtain or retain  these  licenses  would  adversely  affect the  restaurant's
operations. We also are subject in certain states to "dram-shop" statutes, which
generally  provide an injured party with recourse against an establishment  that
serves alcoholic  beverages to an intoxicated  person, who then causes injury to
himself or a third  party.  We carry  liquor  liability  coverage as part of our
comprehensive general liability insurance.

     We also are subject to federal and state  minimum  wage laws and other laws
governing  such matters as overtime,  tip credits,  working  conditions,  safety
standards,  and hiring and  employment  practices.  Changes in these laws during
fiscal 2003 have not had a material effect on our operations.

     We currently are operating under a Tip Rate Alternative Commitment ("TRAC")
agreement with the Internal Revenue Service.  Through increased  educational and
other efforts in the restaurants,  the TRAC agreement  reduces the likelihood of
potential chain-wide employer-only FICA assessments for unreported tips.

     We are subject to federal and state  environmental  regulations,  but these
rules have not had a material  effect on our  operations.  During  fiscal  2003,
there were no material capital expenditures for environmental control facilities
and no material expenditures for this purpose are anticipated.

     Our  facilities  must  comply  with  the  applicable  requirements  of  the
Americans With Disabilities Act of 1990 ("ADA") and related state  accessibility
statutes.  Under the ADA and related  state  laws,  we must  provide  equivalent
service  to  disabled  persons,  and make  reasonable  accommodation  for  their
employment,  and when constructing or undertaking  significant remodeling of our
restaurants, we must make those facilities accessible.

Executive Officers

     Our executive officers as of August 22, 2003 are:

     Joe R. Lee, age 62, has been our Chief  Executive  Officer  since  December
1994 and  Chairman of the Board since April 1995.  Mr. Lee joined Red Lobster in
1967 as a member of its opening  management team, and was named its President in
1975. From 1970 to 1995, he held various  positions with General Mills,  Inc., a
manufacturer  and  marketer of consumer  food  products  and our former  parent,
including  Vice  Chairman,   with  responsibility  for  various  consumer  foods
businesses and corporate staff functions,  Chief Financial Officer and Executive
Vice President, Finance and International Restaurants.

     Richard E.  Rivera,  age 56,  has been our  President  and Chief  Operating
Officer since December 2002, our Vice Chairman from March 2002 to December 2002,
and a Director since December  1997. He was our Executive  Vice  President,  and
President of Red Lobster  Restaurants  from  December  1997 until March 2002. He
served as President and Chief Executive Officer of Chart House Restaurants, Inc.
from July 1997 until December 1997, as President and Chief Executive  Officer of
RARE  Hospitality   International,   Inc.,  the  owner  of  LongHorn  Steakhouse
restaurants,  from 1994 to 1997, and as President and Chief Executive Officer of
TGI  Friday's,  Inc.  from 1988 to 1994.  He began his  career  with Steak & Ale
Restaurants of America and has held various leadership positions in the industry
over the last 25 years,  including  as a  Director  of the  National  Restaurant
Association.

                                       10

<PAGE>


     Blaine  Sweatt,  III,  age  55,  has  been  our  President,   New  Business
Development  since February 1996 and Executive Vice President  since April 1995,
and a Director since 1995. He led teams that developed the Olive Garden,  Bahama
Breeze,  Smokey  Bones and  Seasons 52  concepts,  among  others.  He joined Red
Lobster in 1976 and was named Director of New Restaurant Concept  Development in
1981. From 1986 to 1989, he held various  positions with General Mills,  Inc., a
manufacturer and marketer of consumer food products and our former parent.

     Laurie B. Burns,  age 41, has been our Senior Vice  President and President
of Bahama Breeze since March 2003. She joined us in April 1999 as Vice President
of  Development  for Red  Lobster,  and  served as our  Senior  Vice  President,
Development  from September 2000 until March 2003. She was a private real estate
consultant  from October 1998 until  joining us in April 1999,  and was Regional
Vice  President  for  Development  for the Eastern  United  States at  Homestead
Village, an extended-stay hotel company, from 1995 to 1998.

     Linda  J.  Dimopoulos,  age 52,  has been  Chief  Financial  Officer  since
December  2002.  She  joined us in 1982,  and served as Senior  Vice  President,
Financial  Operations  of Red Lobster from 1993 to July 1998, as our Senior Vice
President,  Corporate Controller and Business Information Systems from July 1998
to December 1999, and as our Senior Vice President,  Chief  Information  Officer
from December 1999 until assuming her current position in December 2002.

     Stephen E. Helsel,  age 58, has been our Senior Vice  President,  Corporate
Controller  since December 1999. He joined us in 1973 as an accountant  with Red
Lobster,  and was named Vice  President,  Controller  of Red Lobster in 1989. He
served as our Vice President, Controller, Accounting Services from 1991 to 1996,
and as Senior Vice  President,  Information  Services  from 1996 until  December
1999.

     Daniel  M.  Lyons,  age 50,  has  been our  Senior  Vice  President,  Human
Resources  since January 1997. He joined us in 1993 as Senior Vice  President of
Personnel  for Olive Garden.  Prior to joining  Olive Garden,  he spent 18 years
with the Quaker Oats Company.

     Andrew H. Madsen,  age 47, has been our Senior Vice President and President
of Olive  Garden  since March 2002.  He joined us in December  1998 as Executive
Vice President of Marketing for Olive Garden. From 1997 until joining us, he was
President of International Master Publishers, Inc., a company that developed and
marketed consumer information products such as magazines and compact discs. From
1993  until  1997,  he  worked  at  James  River  (now  part of  Georgia-Pacific
Corporation,  a diversified paper and building products manufacturer),  where he
held various positions,  including Vice President/General  Manager for the Dixie
consumer  products unit. From 1980 to 1992, he worked at General Mills,  Inc., a
manufacturer and marketer of consumer food products and our former parent, where
he held progressively more responsible positions in consumer products marketing,
including Vice President of Marketing.

     Edna Morris,  age 51, has been our Senior Vice  President  and President of
Red Lobster since March 2002. She joined us in October 1998 and served from then
until March 2002 as Executive Vice President of Operations for Red Lobster. From
1992 until  joining us, she held various  positions  with  Advantica  Restaurant
Group,  Inc., the parent of Denny's and other  restaurant  companies,  including
President of Quincy's  Family  Steakhouse  from 1996 to 1998 and Executive  Vice
President during 1998.

     Barry  Moullet,  age 45, has been our Senior  Vice  President,  Purchasing,
Distribution  and Food  Safety  since  June  1999.  He joined us in July 1996 as
Senior Vice  President,  Purchasing  and  Distribution.  Prior to joining us, he
spent 15 years in the  purchasing  field in various  positions  with  Restaurant
Services,  Inc., a Burger King purchasing  co-operative,  Kentucky Fried Chicken
and the Pillsbury Company.

     Clarence Otis,  Jr., age 47, has been our Executive  Vice  President  since
March 2002 and  President of Smokey Bones BBQ since  December  2002.  He was our
Senior  Vice  President  from  December  1999 until  March  2002,  and our Chief
Financial  Officer from December 1999 until  December 2002. He joined us in 1995
as Vice  President  and  Treasurer.  He served  as our  Senior  Vice  President,
Investor Relations and Treasurer from July 1997 to July 1998, and as Senior Vice
President,  Finance and Treasurer from July 1998 until  December 1999.  Prior to
joining us, he was employed by Chemical Securities,  Inc., an investment banking
firm,  where he had been Managing  Director and Manager of Public  Finance since
1991.

                                       11

<PAGE>


     Paula J.  Shives,  age 52,  has been our  Senior  Vice  President,  General
Counsel and Secretary since June 1999. Prior to joining us, she served as Senior
Vice  President,  General Counsel and Secretary from 1995 to 1999, and Associate
General Counsel from 1985 to 1995 of Long John Silver's Restaurants, Inc.

     Richard J.  Walsh,  age 51, has been our Senior Vice  President,  Corporate
Relations since 1994. He joined General Mills,  Inc., our former parent, in 1984
as Manager of Government Affairs for Red Lobster. He served as Vice President of
Government and Community Relations for General Mills Restaurants, Inc. from 1987
until assuming his current position in December 1994.

Forward-Looking Statements

     Certain information included in this report and other materials filed or to
be filed by us with the Commission  (as well as information  included in oral or
written  statements  made by us or on our behalf),  may contain  forward-looking
statements about our future performance, plans and objectives,  long-term goals,
forecasts of market trends and other matters.  These statements may be contained
in our  filings  with the  Securities  and  Exchange  Commission,  in our  press
releases,  in other written  communications,  and in oral  statements made by or
with the approval of one of our  authorized  officers.  Words or phrases such as
"believe,"  "plan," "will likely result,"  "expect,"  "intend," "will continue,"
"is anticipated,"  "estimate," "project" and similar expressions are intended to
identify forward-looking statements.  These statements, and any other statements
that are not historical facts, are forward-looking statements within the meaning
of the Private Securities  Litigation Reform Act of 1995, as codified in Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934,  as  amended  from  time to time  (the  "Act").  These  forward-looking
statements include,  but are not limited to, projections  regarding:  our growth
plans and the number and type of new  restaurant  openings;  improved  financial
performance  at Bahama  Breeze as a result of changing the  prototype  and other
changes at that concept;  and our  expectation  to realize more of Smokey Bones'
full  potential  as a result  of  changes  in the  location  of units  and other
initiatives.

     In connection  with the "safe harbor"  provisions of the Act, we are filing
the following  cautionary  statements to identify important  factors,  risks and
uncertainties  that could  cause our actual  results to differ  materially  from
those  projected  in  forward-looking  statements  made by us, or on our behalf.
These cautionary statements are to be used as a reference in connection with any
forward-looking  statements.  The factors, risks and uncertainties identified in
these  cautionary  statements  are in addition to those  contained  in any other
cautionary statements, written or oral, which may be made or otherwise addressed
in  connection  with a  forward-looking  statement  or  contained  in any of our
subsequent filings with the Securities and Exchange Commission. Because of these
factors,  risks and uncertainties,  we caution against placing undue reliance on
forward-looking statements.  Although we believe that the assumptions underlying
our forward-looking  statements are reasonable,  any of the assumptions could be
incorrect,  and there can be no assurance  that the  forward-looking  statements
will prove to be accurate.  Forward-looking statements speak only as of the date
on which they are made. We do not  undertake any  obligation to modify or revise
any  forward-looking  statement  to  take  into  account  or  otherwise  reflect
subsequent   events,   or   circumstances   arising  after  the  date  that  the
forward-looking statement was made.

     The following  factors,  risks and  uncertainties,  have affected,  and may
continue to affect,  our operating  results and the environment  within which we
conduct our  business.  If our  projections  and estimates  regarding  these key
factors differ  materially from what actually  occurs,  our actual results could
vary  significantly  from  the  performance  projected  in  our  forward-looking
statements.

     Competition.  The  casual  dining  sector  of the  restaurant  industry  is
intensely competitive in pricing,  service,  location,  personnel,  and type and
quality of food.  We compete with  national,  regional  and local  organizations
primarily  through the quality,  variety and value perception of menu items. The
number  and  location  of  restaurants,   quality  and  efficiency  of  service,
attractiveness  of facilities and  effectiveness  of  advertising  and marketing
programs are also important factors. We anticipate that intense competition will
continue in all of these areas.

     Economic,  Market and Other  Conditions.  Certain  risks are endemic to the
restaurant and retail  industry in general.  A protracted  economic  slowdown or
worsening economy,  industry-wide cost pressures,  or weak consumer demand could
lead to  same-restaurant  sales  declines and suppress sales growth and profits.
The casual  dining sector of the  restaurant  industry is affected by changes in
national,  regional  and  local  economic  conditions;  the  seasonality  of our
business;  consumer  preferences,  including  changes in consumer tastes and the
level of consumer  acceptance of

                                       12

<PAGE>

our  restaurant  concepts;  consumer  spending  patterns;   demographic  trends;
weather;  traffic  patterns;  and the type,  number and  location  of  competing
restaurants.  Our ability to undertake new  restaurant  development,  as well as
improvements  and  additions  to existing  restaurants,  is affected by economic
conditions, including interest rates, and government policies impacting land and
construction costs and the cost and availability of borrowed funds.

     Price and  Availability  of Food,  Labor,  Utilities,  Insurance and Media;
Other  Costs.  Our  profitability   depends  significantly  on  our  ability  to
anticipate and react to changes in the price and  availability  of food;  labor;
utilities;  insurance  (including  workers'  compensation,   general  liability,
health, and directors and officer's liability insurance); advertising, media and
marketing;  employee  benefits;  and other  costs over which we may have  little
control.  The price and  availability  of  commodities,  including,  among other
things,  shrimp, lobster and other seafood, are subject to fluctuation and could
increase or decrease more than we expect.  We are subject to the general risk of
inflation, and possible shortages or interruptions in supply caused by inclement
weather or other  conditions that could adversely  affect the  availability  and
cost of the items we buy.  Restaurant  pre-opening  expenses  could be more than
expected,  and labor shortages,  increased  employee turnover and higher minimum
wage rates all could  raise our cost of doing  business.  Our  business  also is
subject  to  the  risk  of  litigation  by  employees,   consumers,   suppliers,
shareholders  or others  that may result in  additional  costs.  There can be no
assurance  that  management  will be able to anticipate  and react to these cost
issues  without a material  adverse effect on our  profitability  and results of
operations.

     Unfavorable Publicity Relating to Food Safety or Other Concerns. Multi-unit
restaurant  businesses  can be adversely  affected by publicity  resulting  from
complaints  or  litigation  alleging  poor  food  quality,  food-borne  illness,
personal injury,  adverse health effects including obesity, or other operational
concerns.  Negative  publicity may also result from actual or alleged violations
of dram shop laws that may impose  liability  on sellers of liquors when a third
party  is  injured  as a result  of  intoxication.  Regardless  of  whether  the
allegations are valid,  unfavorable  publicity relating to just one or a limited
number of restaurants  could taint public  perception of the entire brand.  Such
unfavorable publicity and overall consumer perceptions of food safety could have
a material adverse effect on our business.

     Importance of Locations.  The success of our  restaurants  depends in large
part on location. There can be no assurance that current locations will continue
to  be  attractive,   as  demographic  patterns  change.  Possible  declines  in
neighborhoods where restaurants are located, or economic conditions  surrounding
those neighborhoods, could result in reduced sales in those locations.

     Government  Regulation.  We are subject to various federal, state and local
laws affecting our business. The development and operation of restaurants depend
to a  significant  extent on the selection and  acquisition  of suitable  sites,
which  are  subject  to  zoning,  land  use,  environmental,  traffic  and other
regulations.  Restaurant operations are also subject to licensing and regulation
by state and local departments relating to health,  liquor licenses,  sanitation
and safety standards, federal and state labor laws (including applicable minimum
wage  requirements,  overtime,  working and safety  conditions,  and citizenship
requirements),  federal and state laws which prohibit  discrimination  and other
laws  regulating the design and operation of  facilities,  such as the Americans
With Disabilities Act of 1990. We cannot predict the effect on our operations of
these laws and  regulations  or the future  enactment of additional  legislation
regulating these and other areas.

     Growth Plans. There can be no assurance that we will be able to achieve our
growth objectives or that new restaurants opened or acquired will be profitable.
There are inherent  risks  involved with  expanding new concepts (such as Bahama
Breeze and Smokey Bones) that have not yet proved their long-term viability. The
opening and success of  restaurants  depends on various  factors,  including the
identification  and availability of suitable and economically  viable locations;
sales levels at existing  restaurants;  the  negotiation of acceptable  lease or
purchase terms for new locations;  obtaining all required  governmental permits,
including  zoning  approvals  and  liquor  licenses,  on a timely  basis;  other
regulatory   compliance;   the   availability   of   necessary   contracts   and
subcontractors  and the ability to meet construction  schedules;  our ability to
manage union activities such as picketing,  which could delay construction;  the
availability  of capital at affordable  cost to finance  growth;  changes in the
weather  or other  acts of God that  could  result in  construction  delays  and
adversely  affect the results of one or more  restaurants  for an  indeterminate
amount of time; our ability to hire and train  qualified  management  personnel;
and general economic and business conditions.

                                       13

<PAGE>

Item 2.  PROPERTIES

     As of May 25,  2003,  we  operated  1,271  restaurants  (including  673 Red
Lobster,  524 Olive Garden, 34 Bahama Breeze, 39 Smokey Bones and one Seasons 52
restaurants) and one Olive Garden Cafe in the following locations:
<TABLE>

         <S>                        <C>                       <C>                       <C>
         Alabama (20)               Iowa (14)                 Nevada (11)               South Dakota (3)
         Arizona (28)               Kansas (10)               New Hampshire (3)         Tennessee (29)
         Arkansas (11)              Kentucky (14)             New Jersey (27)           Texas (106)
         California (96)            Louisiana (8)             New Mexico (10)           Utah (12)
         Colorado (27)              Maine (3)                 New York (50)             Vermont (1)
         Connecticut (9)            Maryland (20)             North Carolina (27)       Virginia (42)
         Delaware (4)               Massachusetts (8)         North Dakota (4)          Washington (24)
         Florida (133)              Michigan (50)             Ohio (73)                 West Virginia (5)
         Georgia (50)               Minnesota (22)            Oklahoma (17)             Wisconsin (19)
         Hawaii (1)                 Mississippi (7)           Oregon (11)               Wyoming (2)
         Idaho (6)                  Missouri (29)             Pennsylvania (62)         Canada (37)
         Illinois (55)              Montana (2)               Rhode Island (2)
         Indiana (42)               Nebraska (8)              South Carolina (18)
</TABLE>

     Of our  1,271  restaurants  and the one Olive  Garden  Cafe open on May 25,
2003, 803 were located on owned sites and 469 were located on leased sites.  The
469 leases are classified as follows:

         Land-Only Leases (we own buildings and equipment).................. 352
         Ground and Building Leases...........................................59
         Space/In-Line/Other Leases...........................................58
                                                                            ----
                  Total......................................................469
                                                                             ===

     During fiscal 1999, we formed two  subsidiary  corporations,  each of which
elected to be taxed as a Real Estate  Investment  Trust  ("REIT") under Sections
856  through  860 of the  Internal  Revenue  Code.  These  elections  limit  the
activities  of both  corporations  to holding  certain real estate  assets.  The
formation of these two REITs is designed  primarily to assist us in managing our
real  estate  portfolio  and  possibly  to provide a vehicle  to access  capital
markets in the future.

     Both REITs are  non-public  REITs.  Through our  subsidiary  companies,  we
indirectly  own 100 percent of all voting stock and greater than 99.5 percent of
the total value of each REIT. For financial reporting  purposes,  both REITs are
included in our consolidated financial statements.

     We own or  lease  our  executive  offices,  culinary  center  and  training
facilities in Orlando,  Florida.  Except in limited  instances,  our  restaurant
sites and other facilities are not subject to mortgages or encumbrances securing
money  borrowed by us from outside  sources.  In our opinion,  our buildings and
equipment  generally  are in good  condition,  suitable  for their  purposes and
adequate for our current and foreseeable needs.

     See also Note 4 "Land,  Buildings  and  Equipment"  and Note 10 "Leases" of
Notes to Consolidated Financial Statements on pages 36 and 40, respectively,  of
the  Company's  2003  Annual  Report  to  Shareholders,  incorporated  herein by
reference.

Item 3.  LEGAL PROCEEDINGS

     From time to time, we are made a party to legal proceedings  arising in the
ordinary  course of business.  We do not believe that the results of these legal
proceedings, even if unfavorable to us, will have a materially adverse impact on
our financial position, results of operations or cash flows.

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Not applicable.

                                       14

<PAGE>

                                     PART II

Item 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The principal United States market on which our common shares are traded is
the New York Stock  Exchange.  As of July 28,  2003,  there  were  approximately
42,429 record  holders of our common  shares.  The  information  concerning  the
dividends  and high and low intraday  sales prices for our common  shares on the
New York Stock  Exchange for each full  quarterly  period during fiscal 2002 and
2003  contained  in Note 17,  "Quarterly  Data",  on page 47 of our 2003  Annual
Report to Shareholders is incorporated herein by reference. We have not sold any
securities  during  the last  three  years  that were not  registered  under the
Securities Act of 1933.

Item 6.  SELECTED FINANCIAL DATA

     The  information  for fiscal 1999 through 2003  contained in the  Five-Year
Financial  Summary  on page 48 of our 2003  Annual  Report  to  Shareholders  is
incorporated herein by reference.

Item 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     The information set forth in the section entitled "Management's  Discussion
and  Analysis of  Financial  Condition  and Results of  Operations"  on pages 18
through 25 of our 2003 Annual Report to Shareholders  is incorporated  herein by
reference.

Item 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The text under the heading "Quantitative and Qualitative  Disclosures About
Market Risk" contained within "Management's Discussion and Analysis of Financial
Condition  and Results of  Operations"  on page 24 of our 2003 Annual  Report to
Shareholders is incorporated herein by reference.

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The  Independent  Auditors'  Report,  Consolidated  Statements of Earnings,
Consolidated Balance Sheets, Consolidated Statements of Changes in Stockholders'
Equity and Accumulated Other Comprehensive  Income,  Consolidated  Statements of
Cash Flows, and Notes to Consolidated  Financial  Statements on pages 26 through
48 of our  2003  Annual  Report  to  Shareholders  are  incorporated  herein  by
reference.

Item 9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
         FINANCIAL DISCLOSURE

         Not applicable.

Item 9A.   CONTROLS AND PROCEDURES

     Under  the  supervision  and  with  the  participation  of our  management,
including  our Chief  Executive  Officer  and our Chief  Financial  Officer,  we
evaluated  the  effectiveness  of the design  and  operation  of our  disclosure
controls  and  procedures  (as defined in Rule  13a-15(e)  under the  Securities
Exchange Act of 1934 (the  "Exchange  Act")) as of May 25, 2003,  the end of the
period covered by this report.  Based on that  evaluation,  the Chief  Executive
Officer and Chief Financial Officer  concluded that our disclosure  controls and
procedures were effective as of May 25, 2003.

     During the fiscal  quarter  ended May 25, 2003,  there was no change in our
internal  control over financial  reporting (as defined in Rule 13a-15(f)  under
the Exchange  Act) that has  materially  affected,  or is  reasonably  likely to
materially affect, our internal control over financial reporting.

                                       15

<PAGE>

                                    PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The  information  contained in the sections  entitled  "Who Are This Year's
Nominees?" on pages 6 through 8, "What Board Committees Do You Have?" on pages 9
through 11, and "Section 16(a)  Beneficial  Ownership  Reporting  Compliance" on
page 31 of our definitive Proxy Statement dated August 22, 2003, is incorporated
herein by reference.  Information  regarding  executive officers is contained in
Part I above under the heading "Executive Officers."

     Our Board of Directors has determined that in its judgment,  Jack A. Smith,
the Chair of our Audit Committee,  is an "audit committee  financial  expert" in
accordance  with the  applicable  rules and  regulations  of the  Securities and
Exchange  Commission,  and  has  "accounting  or  related  financial  management
expertise" in accordance with the applicable  listing  standards of the New York
Stock Exchange. The Board also determined that Mr. Smith is independent, as that
term is used under applicable  rules of the Securities and Exchange  Commission,
the  listing  standards  of the New  York  Stock  Exchange,  and  our  Corporate
Governance Guidelines.

     We have adopted a Code of Business Conduct and Ethics that is applicable to
all of our employees.  Appendix A to that Code provides a special Code of Ethics
with  additional  provisions  that  apply to our  principal  executive  officer,
principal  financial officer,  principal  accounting officer or controller,  and
persons performing similar functions (the "Senior Financial Officers"). Appendix
B to the Code provides a Code of Business  Conduct and Ethics for members of our
Board of Directors.  These documents are posted on our internet website noted on
page two and are available free of charge.  We intend to disclose any amendments
to or waivers  from these  Codes for  directors,  executive  officers  or Senior
Financial Officers on our website.

Item 11.  EXECUTIVE COMPENSATION

     The  information  contained in the  sections  entitled  "How Are  Directors
Compensated?" on page 11, "Summary  Compensation  Table" on pages 18 through 19,
"Option  Grants in Last Fiscal Year" on page 20,  "Stock  Option  Exercises  and
Holdings" on page 21,  "Long-Term  Incentive Plans - Awards in Last Fiscal Year"
on page 20, "Do Executive  Officers  Currently  Participate in a Defined Benefit
Retirement Plan?" on page 22, "Do Executive Officers Currently  Participate in a
Non-Qualified  Deferred  Compensation  Plan?"  on page  22,  "Do  the  Executive
Officers Have Any  Change-in-Control  Arrangements?" on pages 22 through 23, and
"Compensation  Committee Interlocks and Insider Participation" on page 27 of our
definitive  Proxy  Statement  dated August 22, 2003, is  incorporated  herein by
reference.  The  information  appearing in the Proxy Statement under the heading
"Compensation   Committee  Report"  (except  under  the  heading   "Compensation
Committee Interlocks and Insider Participation") is not incorporated herein.

Item 12.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS

     The information  contained in the sections entitled "Security  Ownership of
Principal  Shareholders"  on pages 16 through  17, and  "Security  Ownership  of
Management"  on pages 14  through 15 of our  definitive  Proxy  Statement  dated
August 22, 2003, is incorporated herein by reference.

Equity Compensation Plan Information

     The following table gives  information  about our common shares that may be
issued as of May 25, 2003 under our 2002 Stock  Incentive  Plan  ("2002  Plan");
Stock Option and  Long-Term  Incentive  Plan of 1995 ("1995  Plan");  Restaurant
Management  and  Employee  Stock  Plan of 2000  ("2000  Plan");  Stock  Plan for
Directors ("Director Stock Plan");  Compensation Plan for Non-Employee Directors
("Director  Compensation Plan"); Stock Option and Long-Term Incentive Conversion
Plan ("Conversion Plan") and Employee Stock Purchase Plan ("ESPP").

                                       16

<PAGE>

<TABLE>
<CAPTION>


------------------------------- ---------------------------- ---------------------------- ----------------------------
                                (a)                          (b)                          (c)
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
<S>                             <C>                          <C>                          <C>
Plan category                   Number of securities to be   Weighted-average exercise    Number of securities
                                issued upon exercise of      price of outstanding         remaining available for
                                outstanding options,         options, warrants and        future issuance under
                                warrants and rights (3)      rights                       equity compensation plans
                                                                                          (excluding securities
                                                                                          reflected in column (a))
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
Equity compensation plans
approved by security holders
(1)                                              23,093,014                       $13.23               12,977,554 (4)
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
Equity compensation plans not
approved by security holders
(2)                                               3,628,709                       $16.87                1,760,163 (5)
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
Total                                            26,721,723                       $13.73                14,737,717
------------------------------- ---------------------------- ---------------------------- ----------------------------

-------------------------
<FN>

(1)  Includes the 2002 Plan,  1995 Plan,  Conversion Plan and ESPP.
(2)  Includes the 2000 Plan, Director Stock Plan and Director Compensation Plan.
(3)  Includes deferred  compensation  obligations that may be paid out in common
     stock.
(4)  In  addition  to grants of  options,  warrants  or rights,  includes  up to
     8,550,000 shares of common stock or other stock-based awards,  including up
     to 1,700,000 shares of restricted  stock, that may be issued under the 2002
     Plan, up to 273,007 shares of restricted stock that may be issued under the
     1995  Plan,  and up to  778,456  shares of common  stock that may be issued
     under the ESPP.
(5)  In addition to grants of options, warrants or rights, includes up to 29,296
     shares of  restricted  stock that may be issued under the 2000 Plan,  up to
     95,051  shares  of common  stock  that may be  issued  under  the  Director
     Compensation  Plan,  and up to 88,317  shares of common  stock  that may be
     issued under the Director Stock Plan.
</FN>
</TABLE>

The 2000 Plan

     The 2000 Plan provides for the issuance of up to 5,400,000 shares of common
stock out of our treasury.  The 2000 Plan allows us to award non-qualified stock
options,  restricted stock or restricted  stock units.  Only our employees other
than executive  officers are eligible to receive awards under the 2000 Plan. The
purpose of the 2000 Plan is to provide  incentives  and awards to employees  who
may be  responsible  for the  management,  growth and sound  development  of our
restaurants,  and to align the interests of employees  with the interests of our
shareholders. The 2000 Plan is administered by the Compensation Committee of the
Board of Directors.  The exercise price of a stock option granted under the 2000
Plan may not be less than the fair market value of the  underlying  stock on the
date of grant, and no option may have a term of more than ten years. The options
that are currently outstanding under the 2000 Plan generally vest over a one- to
four-year  period  beginning  on the date of grant and expire ten years from the
date of grant. Awards may be made under the 2000 Plan until January 1, 2004. The
2000 Plan was approved by our Board of Directors.

The Director Stock Plan

     The Director  Stock Plan provides for the issuance of up to 375,000  shares
of common stock out of our treasury as non-qualified  stock options,  restricted
stock or restricted stock units. Our non-employee directors are the only persons
eligible to receive  awards  under the Director  Stock Plan.  The purpose of the
Director  Stock  Plan  is to  provide  incentives  and  awards  to  non-employee
directors to align their interests with those of our shareholders.  The Director
Stock  Plan is  administered  by the  Compensation  Committee  of the  Board  of
Directors. The exercise price of a stock option granted under the Director Stock
Plan may not be less than the fair market value of the  underlying  stock on the
date of grant, and no option may have a term of more than ten years. The options
that are currently outstanding under the Director Stock Plan generally vest over
a one- to three-year  period beginning on the date of grant and expire ten years
from the date of grant.  The  restrictions  on restricted  stock and  restricted
stock units  granted under the plan  generally  lapse one year after the date of
grant.  Awards may be made under the Director  Stock Plan until January 1, 2004.
The Director Stock Plan was approved by our Board of Directors.

                                       17

<PAGE>

The Director Compensation Plan

     The Director  Compensation  Plan provides for the issuance of up to 105,981
shares of common  stock out of our  treasury.  The plan allows us to award cash,
deferred cash or common stock. Our  non-employee  directors are the only persons
eligible to receive awards under the plan. The purpose of the plan is to provide
incentives and awards to  non-employee  directors to align their  interests with
those  of our  shareholders.  The  plan  is  administered  by  the  Compensation
Committee of the Board of Directors and was approved by the Board.

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information contained in the sections entitled "Do We Provide Loans for
Executive  Officers to Meet Their Share  Ownership  Guidelines?" on page 23, and
"Are There Any Other  Relationships or Related  Transactions  Between Us and Our
Management?" on page 23 of our definitive Proxy Statement dated August 22, 2003,
is incorporated herein by reference.

Item 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

     The information contained in the section entitled "Independent Auditor Fees
and  Services" on page 29 of our  definitive  Proxy  Statement  dated August 22,
2003, is incorporated herein by reference.


                                     PART IV

Item 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)  1. Financial Statements:

     Consolidated  Statements  of  Earnings  for the fiscal  years ended May 25,
2003,  May 26, 2002 and, May 27, 2001  (incorporated  by reference to page 27 of
our 2003 Annual Report to Shareholders).

     Consolidated  Balance Sheets at May 25, 2003 and May 26, 2002 (incorporated
by reference to page 28 of our 2003 Annual Report to Shareholders).

     Consolidated  Statements of Changes in Stockholders' Equity and Accumulated
Other  Comprehensive  Income for the fiscal  years ended May 25,  2003,  May 26,
2002, and May 27, 2001  (incorporated by reference to page 29 of our 2003 Annual
Report to Shareholders).

     Consolidated  Statements  of Cash Flows for the fiscal  years ended May 25,
2003, May 26, 2002 and May 27, 2001 (incorporated by reference to page 30 of our
2003 Annual Report to Shareholders).

     Notes to Consolidated  Financial  Statements  (incorporated by reference to
pages 31 through 48 of our 2003 Annual Report to Shareholders).

     2.   Financial Statements Schedules:

     Not applicable.

     3.   Exhibits:

     Pursuant  to Item  601(b)(4)(iii)  of  Regulation  S-K,  copies of  certain
instruments  defining the rights of holders of certain of our long-term debt are
not  filed,  and in lieu  thereof,  we agree to  furnish  copies  thereof to the
Securities and Exchange Commission upon request.

                                       18

<PAGE>


   Exhibit Number                        Title

              3(a)  Articles of Incorporation  (incorporated herein by reference
                    to Exhibit  3(a) to our  Registration  Statement  on Form 10
                    effective May 5, 1995).

              3(b)  Bylaws as amended July 21, 2003.

              4(a)  Rights  Agreement  dated as of May 28,  1995  between us and
                    Wells Fargo Bank Minnesota,  National Association  (formerly
                    known as Norwest Bank  Minnesota,  N.A.), as amended May 23,
                    1996,  assigned  to  Wachovia  Bank,  National   Association
                    (formerly  known as First Union  National  Bank),  as Rights
                    Agent, as of September 29, 1997  (incorporated  by reference
                    to Exhibit  4(a) to our  Annual  Report on Form 10-K for the
                    fiscal year ended May 31, 1998).

              4(b)  Indenture dated as of January 1, 1996,  between us and Wells
                    Fargo Bank Minnesota,  National Association  (formerly known
                    as Norwest Bank Minnesota,  N.A.), as Trustee  (incorporated
                    herein by reference to our Current  Report on Form 8-K filed
                    February 9, 1996).

            *10(a)  Darden  Restaurants,  Inc.  Stock Option and Long-Term
                    Incentive   Plan  of  1995,   as  amended   March  19,  2003
                    (incorporated  herein by reference  to Exhibit  10(b) to our
                    Quarterly Report on Form 10-Q for the quarter ended February
                    23, 2003).

            *10(b)  Darden  Restaurants,  Inc. FlexComp Plan, as amended March
                    19, 2003 (incorporated  herein by reference to Exhibit 10(f)
                    to our  Quarterly  Report on Form 10-Q for the quarter ended
                    February 23, 2003).

            *10(c)  Darden  Restaurants,  Inc.  Stock  Option  and  Long-Term
                    Incentive  Conversion Plan, as amended  (incorporated herein
                    by reference to Exhibit  10(c) to our Annual  Report on Form
                    10-K for the fiscal year ended May 26, 1996).

            *10(d)  Supplemental Pension Plan of Darden Restaurants,  Inc.
                    (incorporated  herein by reference  to Exhibit  10(d) to our
                    Registration Statement on Form 10 effective May 5, 1995).

            *10(e)  Executive  Health  Plan of Darden  Restaurants,  Inc.
                    (incorporated  herein by reference  to Exhibit  10(e) to our
                    Registration Statement on Form 10 effective May 5, 1995).

            *10(f)  Darden Restaurants,  Inc. Stock Plan for Directors, as
                    amended June 19, 2003.

            *10(g)  Darden  Restaurants,   Inc.   Compensation  Plan  for
                    Non-Employee   Directors,   as   amended   March  19,   2003
                    (incorporated  herein by reference  to Exhibit  10(d) to our
                    Quarterly Report on Form 10-Q for the quarter ended February
                    23, 2003).

            *10(h)  Darden  Restaurants,  Inc.  Management  and  Professional
                    Incentive Plan, as amended June 19, 2003.

            *10(i)  Benefits  Trust  Agreement  dated as of  October 3, 1995,
                    between  us  and  Wells  Fargo  Bank   Minnesota,   National
                    Association  (formerly  known  as  Norwest  Bank  Minnesota,
                    N.A.),  as  Trustee  (incorporated  herein by  reference  to
                    Exhibit  10(i) to our  Annual  Report  on Form  10-K for the
                    fiscal year ended May 25, 1997).

            *10(j)  Form  of  Management  Continuity  Agreement,  as  amended,
                    between   us  and   certain   of  our   executive   officers
                    (incorporated  herein by reference  to Exhibit  10(j) to our
                    Annual Report on Form 10-K for the fiscal year ended May 25,
                    1997).

                                       19

<PAGE>


            *10(k)  Form   of   documents   for   our   Fiscal   1998   Stock
                    Purchase/Option  Award program,  including a  Non-Negotiable
                    Promissory Note and a Stock Pledge  Agreement  (incorporated
                    herein by reference to Exhibit 10(k) to our Annual Report on
                    Form 10-K for the fiscal year ended May 27, 2001).

            *10(l)  Darden  Restaurants,  Inc.  Restaurant  Management and
                    Employee Stock Plan of 2000, as amended June 19, 2003.

            *10(m)  Darden Restaurants, Inc. 2002 Stock Incentive Plan, as
                    amended March 19, 2003 (incorporated  herein by reference to
                    Exhibit 10(a) to our  Quarterly  Report on Form 10-Q for the
                    quarter ended February 23, 2003).

             10(n)  Credit  Agreement dated as of October 29, 1999, among Darden
                    Restaurants,  Inc. and the banks named therein (incorporated
                    herein by reference to Exhibit 10(a) to our Quarterly Report
                    on Form 10-Q for the quarter ended August 25, 2002).

             10(o)  First  Amendment  dated  as of  July  26,  2002,  to  Credit
                    Agreement  dated  as  of  October  29,  1999,  among  Darden
                    Restaurants, Inc. and the banks listed therein (incorporated
                    herein by reference to Exhibit 10(b) to our Quarterly Report
                    on Form 10-Q for the quarter ended August 25, 2002).

               12   Computation  of  Ratio  of  Consolidated  Earnings  to Fixed
                    Charges.

               13   Portions of 2003 Annual Report to Shareholders.

               21   Subsidiaries of Darden Restaurants, Inc.

               23   Independent Accountants' Consent.

               24   Powers of Attorney.

             31(a)  Certification   of  Chief  Executive   Officer  pursuant  to
                    Section 302 of the  Sarbanes-Oxley Act of 2002, dated August
                    22, 2003.

             31(b)  Certification   of  Chief  Financial   Officer  pursuant  to
                    Section 302 of the  Sarbanes-Oxley Act of 2002, dated August
                    22, 2003.

             32(a)  Certification   of  Chief  Executive   Officer  pursuant  to
                    Section 906 of the  Sarbanes-Oxley Act of 2002, dated August
                    22, 2003.

             32(b)  Certification   of  Chief  Financial   Officer  pursuant  to
                    Section 906 of the  Sarbanes-Oxley  Act of 2002 dated August
                    22, 2003.



*    Items that are management  contracts or compensatory  plans or arrangements
     required to be filed as an exhibit  pursuant to Item 14(c) of Form 10-K and
     Item 601(b)(10)(iii)(A) of Regulation S-K.

     We will  furnish  copies of any exhibit  listed above upon request upon the
     payment  of a  reasonable  fee to cover our  expenses  in  furnishing  such
     exhibit.

                                       20

<PAGE>


(b)  Reports on Form 8-K.

     During the fourth quarter covered by this report, we filed or furnished the
     following current reports on Form 8-K:

     (i)  Current  report on Form 8-K dated March 20,  2003,  reporting  certain
          financial results for the third quarter of fiscal 2003.
     (ii) Current  report on Form 8-K dated April 29,  2003,  announcing  fiscal
          April same-restaurant sales results.

     In  addition,  we filed or  furnished  the  following  reports  on Form 8-K
     subsequent to the close of the fourth quarter of fiscal 2003:

     (i)  Current report on Form 8-K dated June 19, 2003,  reporting fiscal 2003
          annual and fourth quarter earnings per diluted share.

                                       21

<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

         Dated:  August 22, 2003                   DARDEN RESTAURANTS, INC.

                                                    By:     /s/ Joe R. Lee
                                                   -----------------------------
                                                          Joe R. Lee
                                                    Chairman of the Board and
                                                    Chief Executive Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>

     Signature                          Title                                                    Date
<S>                                     <C>                                                      <C>

/s/ Joe R. Lee                          Director, Chairman of the Board and Chief                August 22, 2003
--------------------------------
    Joe R. Lee                          Executive Officer (Principal executive officer)

/s/ Linda J. Dimopoulos                 Senior Vice President and Chief Financial Officer        August 22, 2003
--------------------------------
    Linda J. Dimopoulos                 (Principal financial and accounting officer)

/s/ Leonard L. Berry*                   Director
--------------------------------
    Leonard L. Berry

/s/ Odie C. Donald*                     Director
--------------------------------
    Odie C. Donald

/s/ Julius Erving, II*                  Director
--------------------------------
    Julius Erving, II

/s/ David H. Hughes*                    Director
--------------------------------
    David H. Hughes

/s/ Cornelius McGillicuddy, III*  **    Director
--------------------------------
    Cornelius McGillicuddy, III

/s/ Richard E. Rivera*                  Director
--------------------------------
    Richard E. Rivera

/s/ Michael D. Rose*                    Director
--------------------------------
    Michael D. Rose

/s/ Maria A. Sastre*                    Director
--------------------------------
    Maria A. Sastre

/s/ Jack A. Smith*                      Director
--------------------------------
    Jack A. Smith


                                       22

<PAGE>


/s/ Blaine Sweatt, III*                 Director
--------------------------------
    Blaine Sweatt, III

/s/ Rita P. Wilson*                     Director
--------------------------------
    Rita P. Wilson

</TABLE>

*BY: /s/ Paula J. Shives
--------------------------------
         Paula J. Shives,
         Attorney-In-Fact
         August 22, 2003

**   Popularly known as Senator Connie Mack, III. Senator Mack signs legal
     documents, including this Form 10-K, under his legal name of Cornelius
     McGillicuddy, III.


                                       23

<PAGE>





                                  EXHIBIT INDEX

        Exhibit
        Number                                          Title

           3(a)     Articles of Incorporation  (incorporated herein by reference
                    to Exhibit  3(a) to our  Registration  Statement  on Form 10
                    effective May 5, 1995).

           3(b)     Bylaws as amended July 21, 2003.

           4(a)     Rights  Agreement  dated as of May 28,  1995  between us and
                    Wells Fargo Bank Minnesota,  National Association  (formerly
                    known as Norwest Bank  Minnesota,  N.A.), as amended May 23,
                    1996,  assigned  to  Wachovia  Bank,  National   Association
                    (formerly  known as First Union  National  Bank),  as Rights
                    Agent, as of September 29, 1997  (incorporated  by reference
                    to Exhibit  4(a) to our  Annual  Report on Form 10-K for the
                    fiscal year ended May 31, 1998).

           4(b)     Indenture dated as of January 1, 1996,  between us and Wells
                    Fargo Bank Minnesota,  National Association  (formerly known
                    as Norwest Bank Minnesota,  N.A.), as Trustee  (incorporated
                    herein by reference to our Current  Report on Form 8-K filed
                    February 9, 1996).

         *10(a)     Darden  Restaurants,  Inc.  Stock  Option  and  Long-Term
                    Incentive   Plan  of  1995,   as  amended   March  19,  2003
                    (incorporated  herein by reference  to Exhibit  10(b) to our
                    Quarterly Report on Form 10-Q for the quarter ended February
                    23, 2003).

         *10(b)     Darden  Restaurants,  Inc.  FlexComp  Plan as amended
                    March 19, 2003 (incorporated  herein by reference to Exhibit
                    10(f) to our  Quarterly  Report on Form 10-Q for the quarter
                    ended February 23, 2003). . * 10(c) Darden Restaurants, Inc.
                    Stock Option and  Long-Term  Incentive  Conversion  Plan, as
                    amended  (incorporated  herein by reference to Exhibit 10(c)
                    to our Annual  Report on Form 10-K for the fiscal year ended
                    May 26, 1996).

         *10(d)     Supplemental Pension Plan of Darden Restaurants,  Inc.
                    (incorporated  herein by reference  to Exhibit  10(d) to our
                    Registration Statement on Form 10 effective May 5, 1995).

         *10(e)     Executive  Health  Plan of Darden  Restaurants,  Inc.
                    (incorporated  herein by reference  to Exhibit  10(e) to our
                    Registration Statement on Form 10 effective May 5, 1995).

         *10(f)     Darden Restaurants,  Inc. Stock Plan for Directors, as
                    amended June 19, 2003.
         *10(g)     Darden  Restaurants,   Inc.   Compensation  Plan  for
                    Non-Employee   Directors,   as   amended   March  19,   2003
                    (incorporated  herein by reference  to Exhibit  10(d) to our
                    Quarterly Report on Form 10-Q for the quarter ended February
                    23, 2003).

         *10(h)     Darden  Restaurants,  Inc. Management and Professional
                    Incentive Plan, as amended June 19, 2003.

         *10(i)     Benefits  Trust  Agreement  dated as of  October 3, 1995,
                    between  us  and  Wells  Fargo  Bank   Minnesota,   National
                    Association  (formerly  known  as  Norwest  Bank  Minnesota,
                    N.A.),  as  Trustee  (incorporated  herein by  reference  to
                    Exhibit  10(i) to our  Annual  Report  on Form  10-K for the
                    fiscal year ended May 25, 1997).

                                       24

<PAGE>


         *10(j)     Form  of  Management  Continuity  Agreement,  as  amended,
                    between   us  and   certain   of  our   executive   officers
                    (incorporated  herein by reference  to Exhibit  10(j) to our
                    Annual Report on Form 10-K for the fiscal year ended May 25,
                    1997).

         *10(k)     Form   of   documents   for   our   Fiscal   1998   Stock
                    Purchase/Option  Award program,  including a  Non-Negotiable
                    Promissory Note and a Stock Pledge  Agreement  (incorporated
                    herein by reference to Exhibit 10(k) to our Annual Report on
                    Form 10-K for the fiscal year ended May 27, 2001).

         *10(l)     Darden  Restaurants,  Inc.  Restaurant  Management and
                    Employee Stock Plan of 2000, as amended June 19, 2003.

         *10(m)     Darden Restaurants, Inc. 2002 Stock Incentive Plan, as
                    amended March 19, 2003 (incorporated  herein by reference to
                    Exhibit 10(a) to our  Quarterly  Report on Form 10-Q for the
                    quarter ended February 23, 2003).

          10(n)     Credit  Agreement dated as of October 29, 1999, among Darden
                    Restaurants,  Inc. and the banks named therein (incorporated
                    herein by reference to Exhibit 10(a) to our Quarterly Report
                    on Form 10-Q for the quarter ended August 25, 2002).

          10(o)     First  Amendment  dated  as of  July  26,  2002,  to  Credit
                    Agreement  dated  as  of  October  29,  1999,  among  Darden
                    Restaurants, Inc. and the banks listed therein (incorporated
                    herein by reference to Exhibit 10(b) to our Quarterly Report
                    on Form 10-Q for the quarter ended August 25, 2002).

          12        Computation  of  Ratio  of  Consolidated  Earnings  to Fixed
                    Charges.

          13        Portions of 2003 Annual Report to Shareholders.

          21        Subsidiaries of Darden Restaurants, Inc.

          23        Independent Accountants' Consent.

          24        Powers of Attorney.

          31(a)     Certification   of  Chief  Executive   Officer  pursuant  to
                    Section 302 of the  Sarbanes-Oxley Act of 2002, dated August
                    22, 2003.

          31(b)     Certification   of  Chief  Financial   Officer  pursuant  to
                    Section 302 of the  Sarbanes-Oxley Act of 2002, dated August
                    22, 2003.

          32(a)     Certification   of  Chief  Executive   Officer  pursuant  to
                    Section 906 of the  Sarbanes-Oxley Act of 2002, dated August
                    22, 2003.

          32(b)     Certification   of  Chief  Financial   Officer  pursuant  to
                    Section 906 of the  Sarbanes-Oxley Act of 2002, dated August
                    22, 2003.



*    Items marked with an asterisk  are  management  contracts  or  compensatory
     plans or arrangements  required to be filed as an exhibit  pursuant to Item
     14 of Form 10-K and Item 601(b)(10)(iii)(A) of Regulation S-K.

                                       25

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3
<SEQUENCE>4
<FILENAME>bylaws.txt
<DESCRIPTION>EXHIBIT 3(B) - BYLAWS
<TEXT>
                                                                    Exhibit 3(b)

                                     BY-LAWS


                                       OF


                            DARDEN RESTAURANTS, INC.





<PAGE>


                                TABLE OF CONTENTS


                                    ARTICLE 1

                                  SHAREHOLDERS


SECTION 1.                 Place of Holding Meeting...........................1
SECTION 2.                 Quorum.............................................1
SECTION 3.                 Adjournment of Meetings............................1
SECTION 4.                 Annual Election of Directors.......................1
SECTION 5.                 Voting at Shareholders' Meetings...................2
SECTION 6.                 Notice of Shareholders' Meetings...................2
SECTION 7.                 Nomination of Directors............................3
SECTION 8.                 Notice of Business.................................3
SECTION 9.                 Organization.......................................4
SECTION 10.                Order of Business..................................4

                                   ARTICLE II

                                    DIRECTORS

SECTION 1.                 Organization.......................................4
SECTION 2.                 Election of Officers...............................4
SECTION 3.                 Regular Meetings...................................5
SECTION 4.                 Special Meetings; How Called, Notice...............5
SECTION 5.                 Number; Qualifications; Quorum; Term...............5
SECTION 6.                 Place of Meetings..................................6
SECTION 7.                 Vacancies..........................................6
SECTION 8.                 Resignation and Removal of Directors...............6
SECTION 9.                 Compensation of Directors..........................6
SECTION 10.                Committees.........................................6
SECTION 11.                Executive Committee; Powers........................7
SECTION 12.                Preferred Directors................................8


<PAGE>



                                   ARTICLE III

                                    OFFICERS

SECTION 1.                 Titles.............................................8
SECTION 2.                 Chairman...........................................8
SECTION 3.                 Vice Chairman......................................8
SECTION 4.                 President..........................................8
SECTION 5.                 Vice President(s)..................................8
SECTION 6.                 Secretary..........................................9
SECTION 7.                 Assistant Secretary................................9
SECTION 8.                 Resignation and Removal of Officers................9
SECTION 9.                 Salaries...........................................10

                                   ARTICLE IV

                                  CAPITAL STOCK

SECTION 1.                 Issue of Stock With or Without Certificates........10
SECTION 2.                 Transfer of Shares.................................10
SECTION 3.                 Lost Certificates..................................10
SECTION 4.                 Rules as to Issue of Shares........................11
SECTION 5.                 Holder of Record Deemed Holder in Fact.............11
SECTION 6.                 Closing of Transfer Books or Fixing Record Date....11

                                    ARTICLE V

                 CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.

SECTION 1.                 Contracts, Etc; How Executed.......................12
SECTION 2.                 Loans..............................................12
SECTION 3.                 Deposits...........................................12
SECTION 4.                 Checks, Drafts, Etc................................12
SECTION 5.                 Transaction of Business............................13


<PAGE>



                                   ARTICLE VI

                            MISCELLANEOUS PROVISIONS

SECTION 1.                 ...................................................13
                           (a) Fiscal year....................................13
                           (b) Staff and Divisional Titles....................13
SECTION 2.                 Notice and Waiver of Notice........................13
SECTION 3.                 Inspection of Books................................13
SECTION 4.                 Construction.......................................14
SECTION 5.                 Adjournment of Meetings............................14
SECTION 6.                 Indemnification....................................14
SECTION 7.                 Resolution of Board of Directors Providing for
                                Issuance of Preferred Shares..................15

                                   ARTICLE VII

                                   AMENDMENTS

SECTION 1.                 Amendment of Bylaws................................15


<PAGE>



                                     BYLAWS

                                       of

                            DARDEN RESTAURANTS, INC.


                                    ARTICLE 1

                                  SHAREHOLDERS



     SECTION 1. Place of Holding  Meeting:  Meetings of shareholders may be held
within or without the State of Florida,  and, unless otherwise determined by the
board of directors or the shareholders,  all meetings of the shareholders  shall
be held at the principal office of the corporation in the City of Orlando in the
State of Florida.  The place of meeting of the  shareholders for the election of
directors  shall not be changed  within  sixty (60) days next  before the day on
which the  election is to be held. A notice of any change shall be given to each
shareholder  entitled to vote,  at least twenty (20) days before the election is
held, in person or by letter mailed to such person at the last-known post office
address.

     SECTION 2. Quorum:  Any number of shareholders  together holding a majority
of the  votes  entitled  to be cast by a voting  group on a  particular  matter,
represented in person or by proxy at any meeting of shareholders,  constitutes a
quorum  of that  voting  group  for  action  on that  matter,  except  as may be
otherwise  provided by law, by the articles of incorporation or by these bylaws.
At any meeting of shareholders for the election of directors at which any voting
group shall have a separate  vote,  the absence of a quorum of any other  voting
group  shall not prevent the  election  of the  directors  to be elected by such
voting group.

     SECTION  3.  Adjournment  of  Meetings:  If less than a quorum  shall be in
attendance at the time for which the meeting shall have been called, the meeting
may be adjourned from time to time by a majority vote of the shares represented,
and who would be  entitled  to vote at the  meeting  if a quorum  were  present,
without any notice other than by  announcement  at the  meeting.  Any meeting at
which a quorum is present may also be adjourned,  in like manner, for such time,
or upon such call, as may be determined by vote. At any such  adjourned  meeting
at which a quorum may be present any business may be transacted which might have
been transacted at the meeting as originally called.

     SECTION 4. Annual Election of Directors: The annual meeting of shareholders
for the election of directors and the  transaction  of other  business  shall be
held on the  fourth  Monday of  September  in each year at 1:00  o'clock  in the
afternoon,  standard time,  unless, by resolution,  the board of directors fixes
another  date or time in the months of  September  or October for the holding of
such annual  meeting.  If the election of directors  shall not be had on the day
designated herein for the annual meeting or at an adjournment thereof, the board
of  directors  shall cause a meeting of the  shareholders  for the election of a
board of

                                       1

<PAGE>


directors to be held as soon thereafter as conveniently  may be. At such meeting
the  shareholders  may elect the directors and transact  other business with the
same force and effect as at an annual meeting duly called and held.

     After the first  election of  directors,  no share shall be voted on at any
election  which  shall  have been  transferred  on the books of the  corporation
within twenty (20) days next preceding such election,  except where the transfer
books of the corporation  shall have been closed or a date shall have been fixed
as a record date for the determination of the shareholders  entitled to vote, as
provided in Article IV, Section 6 of these bylaws.

     The  directors  elected  annually  shall hold office  until the next annual
election and until their  successors  are  respectively  elected and  qualified;
provided,  in the event that any voting  group has the right to elect  directors
separately as a voting group and such right shall have vested, such right may be
exercised as provided in the articles of incorporation of the corporation.

     The secretary  shall  prepare,  or cause to be prepared,  at least ten (10)
days before every election,  a complete list of  shareholders  entitled to vote,
arranged  in  alphabetical  order,  and such list shall be kept in a file at the
principal  office of the corporation for such ten (10) days, for the examination
of any  shareholder  at any time  during  usual  business  hours,  and  shall be
produced  and kept at the time and  place of  election  during  the  whole  time
thereof, subject to the inspection of any shareholder who may be present.

     SECTION 5. Voting at  Shareholders'  Meeting:  The board of directors shall
determine  the voting power of any Preferred  Shares in accordance  with Article
III of the articles of incorporation.  Unless otherwise provided in the articles
of  incorporation  or these bylaws and subject to the  provisions of the Florida
Business  Corporation Act (the "Florida Law"), each shareholder entitled to vote
shall have one (1) vote to each share of voting stock  registered in its name on
the books of the corporation.

     SECTION 6. Notice of Shareholders'  Meetings:  Written notice,  stating the
time and place of the meeting  and, in case of a special  meeting,  stating also
the  general  nature of the  business  to be  considered,  shall be given by the
secretary by mailing, or causing to be mailed, such notice,  postage prepaid, to
each  shareholder  entitled  to vote,  at the post  office  address  as the same
appears on the stock books of the  corporation,  or by delivering such notice to
such person personally, at least ten (10) days before the meeting.

     A written  waiver of such  notice  signed by the person  entitled  thereto,
whether before or after the time stated therein,  shall be deemed  equivalent to
notice.  Attendance of a person at a meeting shall constitute a waiver of notice
of such  meeting,  except  when the person  attends  the meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened.

                                       2

<PAGE>


     SECTION 7.  Nomination  of  Directors:  Only  persons who are  nominated in
accordance  with the  procedures  set forth in these bylaws shall be eligible to
serve  as  directors.  Nominations  of  persons  for  election  to the  board of
directors of the corporation may be made at a meeting of shareholders  (a) by or
at the  direction  of the board of directors  or (b) by any  shareholder  of the
corporation  who is a  shareholder  of  record  at the time of  giving of notice
provided for in this Section,  who shall be entitled to vote for the election of
directors at the meeting and who complies with the notice  procedures  set forth
in this Section. Such nominations,  other than those made by or at the direction
of the board of directors, shall be made pursuant to timely notice in writing to
the secretary of the corporation.  To be timely, a shareholder's notice shall be
delivered to or mailed and received at the  principal  executive  offices of the
corporation  not less than 120 calendar days prior to the first  anniversary  of
the preceding  year's annual meeting;  provided,  however,  that in the event no
annual  meeting was held in the previous year or the date of the annual  meeting
has been  changed by more than  thirty  days,  notice by the  shareholder  to be
timely must be so received  not later than the close of business on the later of
one  hundred  twenty  calendar  days in  advance of such  annual  meeting or ten
calendar days  following the day on which such notice of the date of the meeting
or such public  disclosure is first made.  Such  shareholder's  notice shall set
forth (a) as to each  person  whom the  shareholder  proposes  to  nominate  for
election or  reelection  as a director all  information  relating to such person
that is required to be  disclosed  in  solicitations  of proxies for election of
directors,  or is otherwise  required,  in each case pursuant to Regulation  14A
under the  Securities  Exchange Ace of 1934  (including  such  person's  written
consent to being named in the proxy  statement  as a nominee and to serving as a
director if elected);  and (b) as to the  shareholder  giving the notice (i) the
name and address, as they appear on the corporation's books, of such shareholder
and  (ii)  the  class  and  number  of  shares  of  the  corporation  which  are
beneficially owned by such shareholder.

     At the request of the board of directors, any person nominated by the board
of directors  for election as a director  shall  furnish to the secretary of the
corporation that information  required to be set forth in a shareholder's notice
of  nomination  which  pertains to the  nominee.  No person shall be eligible to
serve as a director of the corporation  unless  nominated in accordance with the
procedures set forth in this Section.  The chairman of the meeting shall, if the
facts  warrant,  determine and declare to the meeting that a nomination  was not
made in accordance  with the  procedures  prescribed by the bylaws,  and if such
person should so determine,  such person shall so declare to the meeting and the
defective  nomination  shall  be  disregarded.   Notwithstanding  the  foregoing
provisions of this Section,  a shareholder shall also comply with all applicable
requirements  of the  Securities  Exchange  Act  of  1934,  and  the  rules  and
regulations thereunder with respect to the matters set forth in this Section.

     SECTION 8. Notice of  Business:  At any meeting of the  shareholders,  only
such business  shall be conducted as shall have been brought  before the meeting
(a) by or at the  direction of the board of directors or (b) by any  shareholder
or the  corporation  who is a shareholder of record at the time of giving of the
notice  provided  for in this  Section,  who shall be  entitled  to vote at such
meeting and who complies with the notice  procedures  set forth in this Section.
For  business  to  be  properly  brought  before  a  shareholder  meeting  by  a
shareholder, the shareholder must have given timely notice thereof in writing to
the secretary of the corporation in accordance with the timeliness provisions of
Section 7 above. A  shareholder's  notice to the

                                       3

<PAGE>


secretary  shall set forth as to each matter the  shareholder  proposes to bring
before the meeting (a) a brief description of the business desired to be brought
before the meeting and the reasons for conducting  such business at the meeting,
(b) the name and  address,  as they appear on the  corporation's  books,  of the
shareholder  proposing such business,  (c) the class and number of shares of the
corporation which are beneficially owned by the shareholder and (d) any material
interest of the  shareholder in such business.  Notwithstanding  anything in the
bylaws to the contrary,  no business shall be conducted at a shareholder meeting
except in accordance with the procedures set forth in this Section. The chairman
of the meeting shall, if the facts warrant, determine and declare to the meeting
that business was not properly brought before the meeting and in accordance with
the  provisions  of the bylaws,  and if such person  should so  determine,  such
person  shall so declare  to the  meeting  and any such  business  not  properly
brought  before  the  meeting  shall  not  be  transacted.  Notwithstanding  the
foregoing  provisions of this Section,  a shareholder shall also comply with all
applicable  requirements  of the Securities  Exchange Act of 1934, and the rules
and  regulations  thereunder  with  respect  to the  matters  set  forth in this
Section.

     SECTION 9. Organization:  At each meeting of shareholders,  the chairman of
the board, if one shall have been elected, (or in the absence of the chairman or
if a chairman shall not been elected,  the  president)  shall act as chairman of
the  meeting.  The  secretary  (or in the  absence  or  inability  to act of the
secretary,  the person whom the chairman of the meeting shall appoint  secretary
of the  meeting)  shall act as  secretary  of the  meeting  and keep the minutes
thereof.

     SECTION 10.  Order of  Business:  The order of business at all  meetings of
shareholders,  as well as the rules  governing  such  meetings,  shall be solely
determined by the chairman of the meeting.

                                   ARTICLE II

                                   DIRECTORS

     SECTION 1. Organization:  The board of directors may hold a meeting for the
purpose of  organization  and the  transaction  of other business if a quorum by
present,  immediately before and/or after the annual meeting of the shareholders
and  immediately  before and/or after any special meeting at which directors are
elected.  Notice  of  such  meeting  need  not  be  given.  Such  organizational
meeting(s) may be held at any other time or place, which shall be specified in a
notice  given as  hereinafter  provided  for  special  meetings  of the board of
directors,  or in a  consent  and  waiver of  notice  thereof  signed by all the
directors.

     SECTION 2. Election of Officers: At such meeting the board of directors may
elect from among its number a chairman (or person having a similar title) of the
board of directors, one or more persons to serve as a vice chairman, a president
as well as one or more  corporate and company vice  presidents,  a secretary and
one or more  assistant  secretaries,  who need not be  directors.  Such officers
shall hold  office  until the next annual  election of officers  and until their
successors are respectively  elected and qualified,  unless removed by the board
of directors as provided in Section 8 of Article III.

                                       4

<PAGE>


     SECTION 3.  Regular  Meetings:  Regular  meetings of the board of directors
shall be held on such dates as are designated, from time to time, by resolutions
of the board, and shall be held at the principal office of the corporation or at
such other location as the board selects. Each regular meeting shall commence at
the time  designated  by the  chairman  of the board on at least  five (5) days'
written notice to each director when sent by mail and on at least three 93) days
notice when sent by private express  carrier or transmitted by telex,  facsimile
or similar means.

     SECTION 4. Special Meetings;  How Called;  Notice:  Special meetings of the
board of directors  may be called by the chairman of the board,  a vice chairman
of the board,  the  president or by any three (3) directors who are not salaried
officers or salaried  employees of the corporation.  Written notice of the time,
place and  purposes of each  special  meeting  shall be sent by private  express
carrier or transmitted by telex,  facsimile or similar means to each director at
least  twenty-four  (24)  hours  prior  to  such  meeting.  Notwithstanding  the
preceding,  any  meeting  of the  board of  directors  shall be a legal  meeting
without any notice thereof if all the members of the board shall be present,  or
if all absent members waive notice thereof.

     SECTION 5. Number; Qualifications; Quorum; Term:

     (a) The board of  directors  shall  consist of not less than three nor more
than fifteen (15) members.

     (b) Not more than six (6) of the members of the board of directors shall be
officers or employees of the  corporation,  but, solely for this provision,  the
chairman of the board shall not be deemed to be such an officer or employee.

     (c) Subject to the provisions of the articles of incorporation, as amended,
one-third  (1/3) of the total number of the directors (but in no event less than
two (2) directors)  shall  constitute a quorum for the  transaction of business.
The  affirmative  vote of a majority  of the  directors  present at a meeting at
which a quorum is constituted shall be the act of the board of directors, unless
the articles of incorporation shall require a vote of a greater number.

     (d) Except as otherwise  provided in these  by-laws,  directors  shall hold
office until the next  succeeding  annual  shareholders'  meeting and thereafter
until their successors are respectively elected and qualified.

     (e) Except as otherwise  provided in the articles of incorporation or these
bylaws, the number of directors may be altered from time to time by amendment to
subsection (a) above.

     SECTION 6. Place of Meetings:  The board of directors may hold its meetings
and keep the books of the  corporation  outside of the State of Florida,  at any
office of the corporation, or at any other place, as it may from time to time by
resolution determine.

                                       5

<PAGE>


     SECTION 7.  Vacancies:  Except as  otherwise  provided  in the  articles of
incorporation,  any  vacancy  in  the  board  of  directors  because  of  death,
resignation,  disqualification,  increase  in number of  directors  or any other
cause may be filled by a majority of the remaining directors, though less than a
quorum,  at any regular or special  meeting of the  directors.  Any such vacancy
resulting from any cause  whatsoever may also be filled by the  shareholders  at
the first annual  meeting  held after such  vacancy  shall occur or at a special
meeting thereof called for the purpose.

     SECTION 8.  Resignation  and  Removal of  Directors:  Any  director  of the
corporation  may resign at any time by giving  written notice to the chairman of
the board or to the secretary of the corporation.  Such  resignation  shall take
effect at the time specified therein.  Unless otherwise  specified therein,  the
acceptance of such resignation shall not be necessary to make it effective.

     SECTION 9. Compensation of Directors: The board of directors shall have the
authority to fix the compensation of directors. In addition, each director shall
be entitled to be reimbursed  by the  corporation  for all expenses  incurred in
attending  meetings of the board of directors or of any  committee of which such
person is a member.  Nothing herein contained shall be construed to preclude any
director  from  serving the  corporation  in any other  capacity  and  receiving
compensation for such services from the corporation;  provided,  that any person
who is  receiving a stated  compensation  as an officer of the  corporation  for
services  as such  officer  shall not receive any  additional  compensation  for
services as a director during such period. A director entitled to receive stated
compensation  for services as director,  who shall serve for only a portion of a
year,  shall be entitled to receive only that portion of the  director's  annual
stated compensation on which the period of such service during the year bears to
the entire year.  The annual  compensation  of  directors  shall be paid at such
times and in such installments as the board of directors may determine.

     SECTION 10. Committees:

     (a) The Board of Directors  shall designate an Executive  Committee,  Audit
Committee,  Compensation Committee and Nominating and Governance Committee,  and
one or more other committees as it may deem advisable,  each of which shall have
and may  exercise  the powers and  authority  of the Board of  Directors  to the
extent  provided  in the  charters  of each  committee  adopted  by the Board of
Directors in one or more resolutions.  The members of the committees,  who shall
be at least two in  number,  shall act only as a  committee  and the  individual
members  shall  have no power as such.  Unless the Board of  Directors  elects a
committee chairman,  each committee shall elect its own chairman,  and have full
power and  authority  to make rules for the conduct of its  business.  The Board
shall have the power at any time to change the  membership of  committees,  fill
vacancies, and to abolish committees.

     (b) The  members  of each  committee  shall  be  elected  by the  Board  of
Directors  and shall  serve  until the first  meeting of the Board of  Directors
after the annual meeting of shareholders  and until their successors are elected
and qualified or until the members'  earlier  resignation or removal.  Vacancies
may be filled by the Board of Directors  at any  meeting.  Except for the Audit,
Compensation and Nominating and Governance Committees, the Chairman

                                       6

<PAGE>


of the Board may  designate  one or more  directors as alternate  members of any
committee,  who may replace any absent or disqualified  member at any meeting of
the committee to serve for that committee meeting only.

     (c ) The Chairman of the Board or Chief  Executive  Officer,  the committee
chairman,  or a majority of any committee may call a meeting of that  committee,
except  that  only the  Chairman  of the  Board or Chief  Executive  Officer  or
chairman  of the  Executive  Committee  may  call  a  meeting  of the  Executive
Committee.  A quorum of any committee shall consist of a majority of its members
unless otherwise provided by resolution of the Board of Directors.  The majority
vote of a  quorum  shall  be  required  for the  transaction  of  business.  The
committee  may also take action by unanimous  written  consent of all  committee
members without a meeting. The secretary of the committee or the chairman of the
committee  shall give  notice of all  meetings of the  committee  by mailing the
notice to the members of the  committee  at least three days before each meeting
or by  telephoning  the members not later than one day before the  meeting.  The
notice shall state the time, date and place of the meeting. Any notice or waiver
of notice shall also satisfy the  requirements  of Article VI,  Section 2 below.
Each committee shall fix its other rules of procedure.

     (d) No committee of the Board shall have the power or authority to:

          (i) approve or recommend to shareholders actions or proposals required
by the Florida Business Corporation Act to be approved by shareholders;

          (ii)  fill  vacancies  on the  Board  of  Directors  or any  committee
thereof;

          (iii) adopt, amend or repeal the Bylaws;

          (iv)  authorize or approve the reacquisition of shares unless pursuant
to a general formula or method specified by the Board of Directors; or

          (v) authorize or approve the issuance or sale or contract for the sale
of shares,  or determine the designation and relative rights,  preferences,  and
limitations of a voting group except that the Board of Directors may authorize a
committee (or a senior  executive  officer of the  corporation)  to do so within
limits specifically prescribed by the Board of Directors.

     SECTION 11.  Executive  Committee;  Powers:  During the  intervals  between
meetings of the board of directors,  the executive committee shall have and may,
to the extent permitted under Florida Law,  exercise all the powers of the board
of directors in the  management of the business and affairs of the  corporation,
including  power to authorize  the  execution of any papers and to authorize the
seal of the  corporation  to be affixed to all papers  which may  require it, in
such  manner  as  such  committee  shall  deem  best  for the  interests  of the
corporation, in all cases in which specific directions shall not have been given
by the  board  of  directors.  A  majority  of  the  executive  committee  shall
constitute a quorum for the  transaction of business,  and the act of a majority
of those present at a meeting, at which a quorum is present, shall be the act of
the Executive Committee. The executive committee shall keep a record of its acts
and  proceedings

                                       7

<PAGE>

and make a report  thereof  from  time to time to the  Board of  Directors.  The
executive committee shall have such other duties and  responsibilities and shall
operate in the manner set forth in the charter of the  committee  adopted by the
Board.

     SECTION 12. Preferred  Directors:  Notwithstanding  anything else contained
herein,  whenever  the  holders of one or more  classes  or series of  Preferred
Shares shall have the right,  voting  separately as a class or series,  to elect
directors, the election, term of office, filing of vacancies,  removal and other
features of such directorships shall be governed by the terms of the resolutions
applicable thereto adopted by the board of directors pursuant to the articles of
incorporation,  and such  directors  so  elected  shall  not be  subject  to the
provisions of sections 5, 7 and 8 of this Article II unless  otherwise  provided
therein.

                                   ARTICLE III

                                    OFFICERS


     SECTION 1. Titles:  The corporate and company officers to be elected by the
board of  directors  shall be a chairman of the board of  directors  and, at the
election  of the  board of  directors,  one or more  persons  to serve as a vice
chairman, and a president,  who shall be directors, and one or more corporate or
company vice presidents, a secretary and one or more assistant secretaries,  who
need not be directors.  The board shall designate one of the corporate  officers
to serve as chief executive officer.

     SECTION 2. Chairman:  The chairman of the board of directors  shall preside
at all  meetings of the board and all meetings of the  shareholders,  as well as
all meetings of the executive committee. The chairman, upon being designated the
chief executive officer,  shall have supervisory  authority over the policies of
the  corporation  as well as the  management  and  control of the  business  and
affairs of the  corporation.  The chairman shall also exercise such other powers
as the board of directors  may from time to time direct or which may be required
by law.

     SECTION 3. Vice Chairman:  The officer or officers serving as vice chairman
shall have such duties and  responsibilities  relating to the  management of the
corporation as may be defined and designated by the chief  executive  officer or
the board of directors.

     SECTION 4.  President:  The  president  shall have  responsibility  for the
management  of the  operating  businesses  of the  corporation  and shall do and
perform all acts incident to the office of president or which are  authorized by
the chief  executive  officer,  the board of  directors or as may be required by
law.

     SECTION 5. Vice President(s): Each corporate vice president shall have such
designations and such powers and shall perform such duties as may be assigned by
the board of directors or the chief  executive  officer.  The board of directors
may designate one or more  corporate  vice  presidents to be a senior  executive
vice president,  executive vice  president,  senior vice president or group vice
president.

                                       8

<PAGE>

     Each corporate vice president shall have such designations and such powers,
and shall perform such duties, as may be assigned by the board of directors, the
chief executive officer or by a corporate vice president.

     SECTION 6. Secretary: The secretary shall:

     (a) keep the minutes of meetings of shareholders, of the board of directors
and of the executive committee in books provided for the purpose;

     (b) see that all notices are duly given in accordance  with the  provisions
of these bylaws or as required by law;

     (c) be  custodian  of the  records  and  have  charge  of the  seal  of the
corporation and see that it is affixed to all stock  certificates prior to their
issuance  and  to  all  documents  the  execution  of  which  on  behalf  of the
corporation  under its seal is duly authorized in accordance with the provisions
of these bylaws;

     (d) have charge of the stock books of the  corporation and keep or cause to
be kept the stock and  transfer  books in such manner as to show at any time the
amount of the stock of the  corporation  issued and  outstanding,  the manner in
which and the time when such  stock  was paid  for,  the  names,  alphabetically
arranged,  and the  addresses  of the holders of record  thereof,  the number of
shares  held by each,  and the time  when each  became  such  holder of  record;
exhibit or cause to be exhibited at all reasonable  times to any director,  upon
application, the original or duplicate stock ledger;

     (e) see that the books,  reports,  statements,  certificates  and all other
documents and records required by law are properly kept, executed and filed; and

     (f) in general, perform all duties incident to the office of secretary, and
such  other  duties  as from  time to  time  may be  assigned  by the  board  of
directors.

     SECTION  7.  Assistant  Secretary:  The  board of  directors  may  elect an
assistant secretary or more than one assistant secretary.  At the request of the
secretary,  or in the  absence or  disability  of the  secretary,  an  assistant
secretary  may perform  all the duties of the  secretary,  and,  when so acting,
shall have all the powers of, and be subject to all the  restrictions  upon, the
secretary.  Each  assistant  secretary  shall have such  other  powers and shall
perform such other duties as may be assigned by the board of directors.

     SECTION  8.  Resignation  and  Removal  of  Officers:  Any  officer  of the
corporation  may resign at any time by giving  written notice to the chairman of
the board or to the  secretary.  Such  resignation  shall take  effect  when the
notice is so delivered  unless the notice  specifies a later effective date, and
unless otherwise  specified therein the acceptance of such resignation shall not
be necessary to make it effective.

                                       9

<PAGE>

     Any officer may be removed for cause at any time by a majority of the board
of  directors  and any officer may be removed  summarily  without  cause by such
vote.

     SECTION 9.  Salaries:  The salaries of officers shall be fixed from time to
time by the board of directors  or the  executive  committee or other  committee
appointed by the board. The board of directors or the executive committee of the
board may authorize and empower the chief executive officer,  any vice chairman,
or any vice president of the corporation designated by the board of directors or
by  the  executive  committee  to  fix  the  salaries  of  all  officers  of the
corporation  who are not  directors  of the  corporation.  No  officer  shall be
prevented  from  receiving  a salary by reason of the fact that such  officer is
also a director of the corporation.

                                   ARTICLE IV

                                  CAPITAL STOCK

     SECTION  1.  Issue of Stock  With or  Without  Certificates:  The  board of
directors  may authorize the issue of some or all of the shares of any or all of
its classes or series without certificates. Certificates for those shares of the
capital stock of the corporation  that are represented by certificates  shall be
in such forms as shall be  approved  by the board of  directors.  Each holder of
shares represented by certificates shall be entitled to have the certificate for
such shares issued under the seal of the corporation,  signed by the chairman, a
vice  chairman or a vice  president  and also by the  secretary  or an assistant
secretary;  provided,  that where a certificate is  countersigned  by a transfer
agent, other than the corporation or its employee, or by a registrar, other than
the  corporation or its employee,  the corporate seal and any other signature on
such certificate may be a facsimile,  engraved,  stamped or printed. In case any
officer,  transfer agent or registrar of the  corporation who shall have signed,
or whose facsimile signature shall have been used on any such certificate, shall
cease to be such officer, transfer agent or registrar, whether because of death,
resignation,  or otherwise, before such certificate shall have been delivered by
the  corporation,  such  certificate  shall  nevertheless be deemed to have been
adopted by the corporation and may be issued and delivered as thought the person
who signed such  certificate or whose  facsimile  signature shall have been used
thereon had not ceased to be such officer, transfer agent or registrar.

     SECTION 2.  Transfer  of Shares:  The  shares of the  corporation  shall be
transferable  upon its books by the  holders  thereof in person or by their duly
authorized  attorneys or legal  representatives,  and upon such  transfer of any
shares  represented by certificates,  the old certificates for such shares shall
be  surrendered  to the  corporation  by the  delivery  thereof of the person in
charge of the shares and transfer books and ledgers,  or to such other person as
the board of directors may  designate,  by whom they shall be canceled,  and new
certificates (or an appropriate entry in respect of shares without certificates)
shall  thereupon be issued for the shares so transferred to the person  entitled
thereto.  A record shall be made of each transfer and whenever a transfer  shall
be made for collateral security, and not absolutely, it shall be so expressed in
the entry of the transfer.

     SECTION  3.  Lost   Certificates:   Any  person   claiming  a   certificate
representing  shares  to be  lost  or  destroyed  shall  make  an  affidavit  or
affirmation of that fact, and if requested

                                       10

<PAGE>

to do so by the board of directors or the  secretary  of the  corporation  shall
advertise  such fact in such manner as the board of directors  or the  secretary
may  require,  and  shall  give  to the  corporation,  its  transfer  agent  and
registrar,  if any, a bond of indemnity in such sum as the board of directors or
secretary  may  direct,  but not  less  than  double  the  value  of the  shares
represented by such certificate,  in form satisfactory to the board of directors
and to the transfer agent and registrar of the corporation,  if any, and with or
without sureties as the board of directors or secretary with the approval of the
transfer agent and registrar,  if any, may prescribe;  whereupon the chairman, a
vice chairman or a vice  president  and the secretary or an assistant  secretary
may  cause  to be  issued  a new  certificate  of the same  tenor  (or  cause an
appropriate entry to be made in respect of shares without  certificates) and for
the same number of shares as the one alleged to have been lost or destroyed.

     SECTION 4. Rules as to Issue of Shares:  The board of directors  shall make
such  rules and  regulations  as it may deem  expedient  concerning  the  issue,
transfer and  registration of shares of the  corporation.  It may appoint one or
more transfer agents and/or registrars of transfer,  and may require all to bear
the signature of either or both. Each and every person accepting shares from the
corporation  therein shall furnish the corporation  with a written  statement of
the  residence  or post  office  address  of that  person,  and in the  event of
changing such residence shall advise the corporation of such new address.

     SECTION 5. Holder of Record Deemed  Holder in Fact:  The board of directors
shall be  entitled  to treat the  holder of record of any share or shares as the
holder in fact  thereof,  and  accordingly  shall not be bound to recognize  any
equitable or other claim to, or interest in, such share or shares on the part of
any other person,  whether or not it shall have express or other notice thereof,
except as expressly provided by law.

     SECTION 6. Closing of Transfer  Books or Fixing  Record Date:  The board of
directors  shall  have the  power  to  close  the  share  transfer  books of the
corporation for a period not exceeding sixty (60) days preceding the date of any
meeting of  shareholders or the date for payment of any dividend or the date for
the allotment of rights or the date when any change or conversion or exchange of
capital stock shall go into effect;  provided, that in lieu of closing the share
transfer  books as aforesaid,  the board of directors may fix in advance a date,
not exceeding  sixty (60) days preceding the date of any meeting of shareholders
or the date for the payment of any  dividend,  or the date for the  allotment of
rights,  or the date when any change or  conversion or exchange of capital stock
shall go into effect, as a record date for the determination of the shareholders
entitled to notice of, and to vote at, any such meeting,  or entitled to receive
payment  of any  such  dividend,  or to any such  allotment  of  rights,  or the
exercise  the rights in respect of any such  change,  conversion  or exchange of
capital stock, and in such case only such  shareholders as shall be shareholders
of record on the date so fixed  shall be entitled to such notice of, and to vote
at, such meeting,  or to receive  payment of such  dividend,  or to receive such
allotment  of  rights,  or  to  exercise  such  rights,  as  the  case  may  be,
notwithstanding any transfer of any shares on the books of the corporation after
any such record date fixed as aforesaid.

                                       11

<PAGE>


                                    ARTICLE V

                 CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.

     SECTION 1.  Contracts,  Etc.; How Executed:  The board of directors or such
officer  or  person  to whom  such  power  shall be  delegated  by the  board of
directors by  resolution,  except as in these  bylaws  otherwise  provided,  may
authorize  any  officer  or  officers,  agent or  agents,  either  by name or by
designation of their respective  offices,  positions or class, to enter into any
contract or execute and deliver any  instrument  in the name of and on behalf of
the  corporation,  and such  authority  may be general or  confined  to specific
instances;  and, unless so authorized,  no officer, agent or employee shall have
any power or authority to bind the corporation by any contract or engagement, or
to pledge its credit or to render it liable  pecuniarily  for any  purpose or in
any amount.

     SECTION 2. Loans: No loans shall be contracted on behalf of the corporation
and no  negotiable  paper  shall be  issued in its name,  unless  and  except as
authorized by the vote of the board of directors or by such officer or person to
whom such power shall be delegated by the board of directors by resolution or by
these bylaws. When so authorized by the board of directors or by such officer or
person to whom such  power  shall be  delegated  by its  board of  directors  by
resolution  or by these  bylaws,  any  officer or agent of the  corporation  may
obtain loans and advances at any time for the corporation from any bank, banking
firm,  trust  company or other  institution,  or from any firm,  corporation  or
individual,  and for such  loans and  advances  may make,  execute  and  deliver
promissory  notes,  bonds or other evidences of indebtedness of the corporation,
and, when  authorized as aforesaid to give security for the payment of any loan,
advance,  indebtedness or liability of the corporation,  may pledge, hypothecate
or transfer any and all stocks,  securities and other  personal  property at any
time held by the  corporation,  and to that end endorse,  assign and deliver the
same,  but only to the  extent  and in the  manner  authorized  by the  board of
directors  or by these  bylaws.  Such  authority  may be general or  confined to
specific instances.

     SECTION 3. Deposits:  All funds of the corporation  shall be deposited from
time to time to the credit of the  corporation  with such banks,  banking firms,
trust companies or other depositaries as the board of directors may select or as
may be selected by any officer or officers,  agent or agents of the  corporation
to whom such power may be delegated  from time to time by the board of directors
or by these bylaws.

     SECTION 4. Checks, Drafts, Etc.: All checks, drafts or other orders for the
payment of money,  notes,  acceptances or other evidences of indebtedness issued
in the name of the  corporation,  shall be signed by such  officer or  officers,
agent or agents of the  corporation  and in such  manner as shall be  determined
from time to time by  resolution of the board of directors or by such officer or
person to whom such power of  determination  shall be  delegated by the board of
directors by  resolution  or by these  bylaws.  Endorsements  for deposit to the
credit of the  corporation  in any of its authorized  depositaries  may be made,
without any  countersignature,  by the chairman of the board, a vice chairman or
any vice president or by any other officer or agent of the corporation appointed
by any officer of the corporation to whom the board of directors, by

                                       12

<PAGE>

resolution,  shall have delegated such power of appointment,  or by hand-stamped
impression in the name of the corporation.

     SECTION 5.  Transaction of Business:  The  corporation,  or any division or
department  into which any of the business or operations of the  corporation may
have been divided,  may transact  business and execute  contracts  under its own
corporate name, its division or department name, a trademark or a trade name.

                                   ARTICLE VI

                            MISCELLANEOUS PROVISIONS


     SECTION 1.

     (a) Fiscal Year: The fiscal year of the corporation shall end with the last
Sunday of May of each year.

     (b) Staff and Divisional  Titles:  The chief executive officer may appoint,
at such  officer's  discretion,  such  persons  to hold the title of staff  vice
president,  divisional  president or divisional  vice president or other similar
designation.  Such persons  shall not be officers of the  corporation  and shall
retain such title at the sole discretion of the chief executive  officer who may
from time to time make or revoke such designation.

     SECTION 2. Notice and Waiver of Notice:  Whenever any notice is required by
these  bylaws to be given,  personal  notice to the  person is not meant  unless
expressly so stated; and any notice so required shall be deemed to be sufficient
if  given  by  depositing  the  same in a post  office  or post  box in a sealed
postpaid  wrapper,  addressed to the person entitled  thereto at the post office
address  as  shown  on the  transfer  books  of the  corporation,  in  case of a
shareholder,  and at the last known post office address in case of an officer or
director who is not a shareholder;  and such notice shall be deemed to have been
given on the day of such  deposit.  In the case of  notice  by  private  express
carrier,  telex,  facsimile  or  similar  means,  notice  shall be  deemed to be
sufficient  if  transmitted  or sent to the person  entitled to notice or to any
person at the  residence  or usual place of  business of the person  entitled to
notice who it is  reasonably  believed  will  convey  such  notice to the person
entitled  thereto;  and notice shall be deemed to have been given at the time of
receipt at such  residence  or place of business.  Any notice  required by these
bylaws may be given to the person entitled thereto  personally and attendance of
a person  at a meeting  shall  constitute  a waiver  of notice of such  meeting.
Whenever  notice is required to be given under these  bylaws,  a written  waiver
thereof,  signed by the person  entitled to notice,  whether before or after the
time stated therein, shall be deemed equivalent to notice.

     SECTION 3. Inspection of Books: The board of directors shall determine from
time to time  whether  and,  if  allowed,  when and under  what  conditions  and
regulations the accounts,  records and books of the corporation  (except such as
may, by statute,  be specifically open to inspection),  or any of them, shall be
open to the inspection of the shareholders, and the shareholders' rights in this
respect are and shall be restricted and limited accordingly.

                                       13

<PAGE>


     SECTION 4.  Construction:  All  references  herein in the  plural  shall be
construed  to include the  singular  and in the  singular  shall be construed to
include the plural, if the context so requires.

     SECTION 5. Adjournment of Meetings:  If less than a quorum shall be present
at any meeting of the board of directors of the corporation, or of the executive
committee of the board,  or other  committee,  the meeting may be adjourned from
time to time by a majority  vote of members  present,  without any notice  other
than by announcement at the meeting, until a quorum shall attend. Any meeting at
which a quorum is present may also be adjourned in like manner, for such time or
upon such call, as may be determined by vote. At any such  adjourned  meeting at
which a quorum may be present,  any business may be transacted  which might have
been  transacted  at the meeting  originally  held if a quorum had been  present
thereat.

     SECTION 6. Indemnification:

     (a) Each person (and the heirs, executors or administrators of such person)
who was or is a party or is threatened to be made a party to, or is involved in,
any threatened,  pending or completed action, suit or proceeding, whether civil,
criminal,  administrative  or  investigative,  whether  formal or  informal  and
whether or not such action,  suit or proceeding is brought by or in the right of
the  corporation,  by reason of the fact that such  person is or was a director,
officer,  employee  or  agent of the  corporation  or is or was  serving  at the
request of the corporation as a director,  officer, employee or agent of another
corporation,  partnership,  joint venture,  trust or other enterprise,  shall be
indemnified and held harmless by the corporation to the fullest extent permitted
by Florida Law.  The right to  indemnification  conferred in this Section  shall
also include the right to be paid by the  corporation  the expenses  incurred in
connection with any such  proceeding in advance of its final  disposition to the
fullest extend permitted by Florida Law. The right to indemnification  conferred
in this Section shall be a contract right.

     (b) The  corporation  may,  by action of its  Board of  Directors,  provide
indemnification to such of the directors,  officers, employees and agents of the
corporation  to such extent and to such effect as the Board of  Directors  shall
determine to be appropriate and permitted by Florida Law.

     (c) The corporation shall have power to purchase and maintain  insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation,  or is or was  serving  at the  request  of  the  corporation  as a
director, officer, employee or agent of another corporation,  partnership, joint
venture,  trust or other enterprise  against any liability asserted against such
person and  incurred by such person in any such  capacity or arising out of such
person's status as such,  whether or not the corporation would have the power to
indemnify him against such liability under Florida Law.

     (d) The  rights  and  authority  conferred  in this  Section  shall  not be
exclusive  of any other right which any person may  otherwise  have or hereafter
acquire.

                                       14

<PAGE>


     (e) Neither the amendment  nor repeal of this Section,  nor the adoption of
any provision of the Articles of Incorporation or the bylaws of the corporation,
nor, to the fullest extent  permitted by Florida Law, any  modification  of law,
shall  eliminate  or reduce the effect of this Section in respect of any acts or
omissions occurring prior to such amendment, repeal, adoption or modification.

     SECTION 7.  Resolution  of Board of  Directors  Providing  for  Issuance of
Preferred  Shares:  For purposes of these bylaws,  the articles of incorporation
shall be deemed to include  any  articles  of  amendment  filed and  recorded in
accordance with section 607.0602(4) of the Florida Law which, in accordance with
that section,  sets forth the resolution or resolutions  adopted by the board of
directors providing for the issuance of Preferred Shares or any series thereof.

                                   ARTICLE VII

                                   AMENDMENTS


     SECTION 1.  Amendment  of Bylaws:  All bylaws of the  corporation  shall be
subject to adoption, alteration, amendment or repeal as provided in, and subject
to the provisions of, the articles of incorporation.



Adopted March 29, 1995
Amended July 21, 2003


                                       15


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>directorstockplan.txt
<DESCRIPTION>EXHIBIT 10(F) - STOCK PLAN FOR DIRECTORS
<TEXT>

                                                                   Exhibit 10(f)

                            DARDEN RESTAURANTS, INC.

                            STOCK PLAN FOR DIRECTORS



     1. Purpose.  The purpose of the Darden  Restaurants,  Inc.  Stock Plan (the
"Plan") for  Directors is to increase the  proprietary  interest of Directors in
Darden Restaurants,  Inc. (the "Company") by granting them non-qualified options
to purchase  Common Stock of the Company  ("Common  Stock") and shares of Common
Stock subject to the restrictions  described herein that will promote  long-term
shareholder value through ownership of Common Stock.

     2.  Administration.  The Plan  shall be  administered  by the  Compensation
Committee  of the  Board of  Directors  of the  Company.  Grants of  options  to
purchase  Common Stock under the Plan and the amount and nature of the awards of
Common  Stock  shall  be made  automatically  or by the  Board of  Directors  as
provided in Section 4.  However,  subject to the express  provisions of the Plan
and applicable law, the Compensation Committee shall have full authority to: (i)
interpret the Plan; (ii)  promulgate such rules and regulations  with respect to
the Plan as it deems  desirable;  (iii)  amend the terms and  conditions  of any
award or award agreement,  provided, however, that, except as otherwise provided
in  Section 5 hereof,  the  Committee  shall  not  reprice,  adjust or amend the
exercise  price of options to purchase  Common  Stock of the Company  previously
awarded to any Director, whether through amendment, cancellation and replacement
grant, or any other means; (iv) determine whether, to what extent and under what
circumstances  shares of Common Stock payable with respect to an award under the
Plan shall be deferred either  automatically or at the election of the holder of
the award or the Committee;  and (v) make all other determinations  necessary or
appropriate for the administration of the Plan, and such determinations shall be
final and binding upon all persons having an interest in the Plan.

     3.  Participation.  Each  person who is a Director of the Company or any of
its  subsidiaries  at the  date of each  grant or award  shall  be  eligible  to
participate  in the Plan. A "Director" for purposes of this Plan is defined as a
person who has been  elected to the Board of  Directors  of the Company and does
not have an employee status with the Company.

     4. Awards under the Plan.  The number of shares of Common Stock  authorized
for grants  under the Plan is 375,000,  provided  that all such shares  shall be
issued from Common Stock held in the Company's treasury. In addition, all shares
of Common Stock  authorized,  but unissued under the predecessor  Stock Plan for
Directors effective May 28, 1995, as amended,  shall be available and authorized
for issuance  under this Plan. If any shares of Common Stock covered by an award
or to which an award  relates are not  purchased  or are  forfeited or otherwise
reacquired by the Company  (including  shares of Restricted  Stock, as described
below,  whether or not dividends have been paid on such shares),  or if an award
otherwise  terminates or is cancelled  without  delivery of any shares of Common
Stock,  then the number of shares of Common Stock counted  against the aggregate
number of shares  available  under the Plan with  respect to such award,  to the
extent of any such  forfeiture,  termination  or  cancellation,  shall  again be
available for granting awards under the Plan. In addition,  any shares of Common
Stock that are used by a participant in connection with the  satisfaction of tax
obligations  relating to an award, as described  below,  under the Plan shall be
available for granting awards under the Plan.

     (a) Non-qualified Stock Options

          (i)  Grant of  Options.  Each  person who  becomes a Director  for the
               first time after the effective  date of the Plan shall be awarded
               an option  ("Option") to purchase  12,500 shares of Common Stock,
               effective  as of the date  such  person  becomes a  Director.  In
               addition,  at the close of business on each annual  shareholders'
               meeting,  each Director  elected or re-elected to the Board shall
               be granted an Option to purchase  3,000  shares of Common  Stock.
               The written  agreement  evidencing such Options granted under the
               Plan shall be dated as of the applicable date of each grant.  All
               Options  granted  under  the Plan  shall be  non-qualified  stock
               options  governed by Section 83 of the  Internal  Revenue Code of
               1986, as amended.

<PAGE>


          (ii) Option  Exercise  Price.  The per  share  price to be paid by the
               Director at the time an Option is exercised  shall be 100% of the
               Fair Market Value of the Common Stock on the date of grant. "Fair
               Market  Value" shall equal the mean of the high and low price for
               the Common  Stock on the New York Stock  Exchange on the relevant
               date or, if the New York Stock  Exchange  is closed on that date,
               on the last  preceding  date on which the  Exchange  was open for
               trading.

          (iii)Term of Option.  Each Option shall expire ten (10) years from the
               date of grant.

          (iv) Exercise of Option.  Options shall be exercisable  only after one
               year from the date the Option is granted, except that (1) "SRO's"
               may be  exercised  after a period  of six  months or longer if so
               determined  by the Board of Directors at the date of the grant of
               the SRO and (2) the 12,500 Options granted to a Director upon his
               or her  first  election  to  the  Board  of  Directors  shall  be
               exercisable  only after three years from the date the Options are
               granted.

          (v)  Method of Exercise and Tax  Obligations.  Each notice of exercise
               shall be  accompanied  by the full  purchase  price of the shares
               being purchased.  Such payment may be made in cash, check, shares
               of Common  Stock  valued  using the Fair  Market  Value as of the
               exercise  date or a  combination  thereof.  The  Company may also
               require  payment  of the  amount of any  federal,  state or local
               withholding tax  attributable to the exercise of an Option or the
               delivery of shares of Common  Stock upon lapse of the  Restricted
               Period described below.

          (vi) Non-transferability.   An  Option  shall  be  non-assignable  and
               non-transferable  by a Director  other than by (1) the Director's
               last will and testament,  or (2) the  applicable  laws of descent
               and  distribution,  or (3) by gift  by a  Director  to a  "family
               member" defined by the Compensation Committee. Such Option may be
               exercised  only by such  Director or his or her guardian or legal
               representative  or the donee  family  member.  A  Director  shall
               forfeit  any  Option  assigned  or  transferred,  voluntarily  or
               involuntarily, other than as permitted under this subsection.

          (vii)Notwithstanding  anything contained herein to the contrary,  upon
               retirement  of a Director  or other  cessation  of service on the
               Board of  Directors,  the  Director's  Options  will  vest and be
               exercisable according to the following schedules.

               (1)  For a Director  with at least  five years of Board  service,
                    including  service on the  predecessor  General Mills,  Inc.
                    Board  of  Directors,  unvested  Options  granted  prior  to
                    September 1999 will continue to vest.  Once vested,  Options
                    will be exercisable for the full term of the Option.

               (2)  For a Director  with less than five years of Board  service,
                    including  service on the  predecessor  General Mills,  Inc.
                    Board of  Directors,  unvested  Options  will be  forfeited.
                    Options  granted  prior to  September  1999 that have vested
                    will  be  exercisable  for the  full  Option  term.  Options
                    granted beginning with and after the September 1999 grant if
                    vested,  must be exercised  within ninety days of the end of
                    Board service or, otherwise, will be forfeited.

     (b) Restricted Stock.

          (i)  Awards.  Each Director on the effective date of the Plan shall be
               granted  an  award  of  3,000  shares  of  ------  Common  Stock,
               restricted as described below ("Restricted  Stock"). At the close
               of business on each successive annual stockholders'  meeting date
               thereafter, each Director then elected or re-elected to the Board
               shall be granted an award of 3,000  shares of  Restricted  Stock.
               Notwithstanding  the foregoing,  prior to the date of each

                                       2

<PAGE>

               annual stockholders'  meeting,  with respect to any such award of
               Restricted  Stock to be made for such  upcoming  year, a Director
               may elect (1) on such terms and conditions as the Committee shall
               determine  (including  through the terms of the Compensation Plan
               for  Non-Employee  Directors),  to  defer  receipt  of all or any
               portion of the Common  Stock that  would  otherwise  be  received
               pursuant to his or her  Restricted  Stock award until a date that
               is on or after the  cessation of Board  service or (2) to receive
               the  equivalent  of 1,000 of the 3,000  shares of any  Restricted
               Stock award in cash based on the Fair Market  Value of the Common
               Stock  on the  date  of  such  stockholders'  meeting.  Any  such
               deferral  election shall result in the Restricted Stock not being
               issued to the  Director  and, in exchange,  the Director  will be
               credited with stock units,  representing the Company's obligation
               to pay  deferred  compensation  at a later  date  in the  form of
               unrestricted  Common Stock,  all on such terms and  conditions as
               the Committee shall determine (including through the terms of the
               Compensation Plan for Non-Employee Directors).

          (ii) Restricted  Period.  The  restrictions set forth shall apply from
               the date of each grant  until the earlier of the  following:  (1)
               the last day on which  the New York  Stock  Exchange  is open for
               trading immediately prior to the annual stockholders meeting next
               succeeding  the  grant  of  such  Restricted  Stock,  or (2)  the
               Director's death or disability (the "Restricted  Period").  Until
               the expiration of the Restricted  Period,  none of the Restricted
               Stock may be sold,  transferred,  assigned,  pledged or otherwise
               encumbered or disposed of, and all of the Restricted  Stock shall
               be  forfeited  and all further  rights of the Director to or with
               respect to such  Restricted  Stock  shall  terminate  without any
               obligation  on the part of the Company  unless the  Director  has
               remained a Director  throughout the Restricted  Period applicable
               to such Restricted Stock.

          (iii)Other  Terms  and  Conditions.  Any  shares of  Restricted  Stock
               granted  hereunder  may  be  evidenced  in  such  manner  as  the
               Committee  deems  appropriate,   including,  without  limitation,
               book-entry  registration or issuance of stock  certificates,  and
               may be held in escrow.  If  certificated,  each such  certificate
               shall  bear a legend  giving  notice  of the  restrictions.  Each
               Director  must also  endorse in blank and return to the Company a
               stock  power  for each  grant of  Restricted  Stock.  During  the
               Restricted  Period,  each Director  shall have all the rights and
               privileges of a shareholder with respect to the Restricted Stock,
               including  the right to vote the shares and to receive  dividends
               thereon.  At the  expiration of the  Restricted  Period,  a stock
               certificate  free of all restrictions for the number of shares of
               Restricted Stock so registered shall be delivered to the Director
               or his or her estate.

     (c) Stock Award.

          (i)  Awards.  At the  close of  business  on the  date of each  annual
               stockholders'  meeting  occurring after July 26, 2002, in lieu of
               the award of  Restricted  Stock  described in Section 4(b) above,
               each  Director  elected  or  re-elected  to  the  Board  at  such
               stockholders'  meeting  shall be granted  an award  equal to that
               number of shares of Common  Stock  having a Fair Market  Value on
               the date of grant equal to $100,000, rounded to the nearest whole
               share (the "Stock  Award").  Each  Director  who,  after July 26,
               2002, is appointed as a Director of the Company at any time other
               than at an annual  stockholders'  meeting shall be granted on the
               date of such  appointment  a prorated  Stock  Award equal to that
               number of shares of Common  Stock,  rounded to the nearest  whole
               share,  having a Fair Market  Value on the date of grant equal to
               $100,000 multiplied by a fraction,  the numerator of which is 365
               minus  the  number  of days in the  period  from  the date of the
               annual   stockholders'   meeting   immediately   preceding   such
               appointment to the date of such  appointment  and the denominator
               of which is 365. Notwithstanding the foregoing, prior to the date
               of each  annual  stockholders'  meeting  or the  date of any such
               appointment,  as the case  may be,  a  Director  may  elect  with
               respect to each such  Stock  Award to be granted on such date (1)
               on such terms and  conditions  as the Committee  shall  determine
               (including  through  the  terms  of  the  Compensation  Plan  for
               Non-

                                      3

<PAGE>

               Employee  Directors),  to defer  receipt of all or any portion of
               the Common Stock that would otherwise be received pursuant to his
               or her Stock Award until a date that is on or after the cessation
               of Board  service or (2) to receive 25% or 50% of the Stock Award
               in cash.  Any such deferral  election shall result in such shares
               of  Common  Stock  not  being  issued  to the  Director  and,  in
               exchange,  the  Director  will  be  credited  with  stock  units,
               representing   the   Company's   obligation   to   pay   deferred
               compensation at a later date in the form of  unrestricted  Common
               Stock,  all on such terms and  conditions as the Committee  shall
               determine  (including  through the terms of the Compensation Plan
               for Non-Employee Directors).

          (ii) Non-transferability.   From  the  date  of  grant  to  the  first
               anniversary  of the  date  of  grant  of  any  Stock  Award  (the
               "Non-transferability Period"), none of the shares of Common Stock
               subject to the Stock  Award may be sold,  transferred,  assigned,
               pledged or  otherwise  encumbered  or  disposed  of by a Director
               other than by (1) the Director's last will and testament,  or (2)
               the  applicable  laws of  descent  and  distribution.  During the
               Non-transferability  Period, any certificate  representing shares
               of Common  Stock that are  subject to a Stock  Award shall bear a
               legend  giving  notice  of the  restrictions  described  in  this
               Section 4(c)(ii).  During the  Non-transferability  Period,  each
               Director   shall  have  all  the  rights  and   privileges  of  a
               shareholder with respect to the shares of Common Stock subject to
               the Stock Award,  including  the right to vote such shares and to
               receive dividends thereon.

     (d) "SRO's".

          In addition to the awards  described  in  Sections  4(a),  (b) and (c)
          above,  the Board of  Directors  also shall grant  salary  replacement
          options  ("SRO's")  to one or more of the  Directors  pursuant  to the
          annual  decision of each  Director in lieu of all or part of an annual
          retainer or for  directors  fees for  attendance at Board or Committee
          meetings or other compensation for services as a Director. Such grants
          shall be made on the last day of each  fiscal  quarter of the  Company
          for compensation accrued during such quarter and be valued by the same
          formula as used by the  Compensation  Committee for awards of SRO's to
          employees of the Company. SRO's shall be treated as Options under this
          Plan for all other purposes.

     (e) Change of Control.

          The  Options  granted  hereunder  shall  become  exercisable  and  the
          restrictions on Restricted Stock and Stock Awards shall lapse upon the
          occurrence  of a "Change  of  Control."  Each of the  following  shall
          constitute a "Change of Control":

          (i)  if any person  (including a group as defined in Section  13(d)(3)
               of the 1934 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  Company's  Board of
               Directors; or

          (iii)the  stockholders of the Company  approve an agreement  providing
               for a  transaction  in  which  the  Company  will  cease to be an
               independent   publicly-owned  corporation  or  a  sale  or  other
               disposition  of all or  substantially  all of the  assets  of the
               Company occurs.

     5.  Adjustments.  In the  event  of a stock  dividend  or stock  split,  or
combination or other reduction in the number of issued shares of Common Stock, a
merger,  consolidation,  reorganization,  recapitalization,  sale or exchange of
substantially  all  assets  or  dissolution  of the  Company,  or  whenever  the
Committee  determines such  adjustments  are appropriate to prevent  dilution or
enlargement of the benefits or potential  benefits intended to be

                                       4

<PAGE>

made available under this Plan, then  appropriate  adjustments  shall be made in
the shares and number of shares of Common  Stock  subject to and  authorized  by
this  Plan and the  number  of  shares  of  Common  Stock  subject  to  Options,
Restricted Stock and Stock Awards previously  granted hereunder and the exercise
price of Options previously  granted hereunder,  in order to prevent dilution or
enlargement of the rights of the Directors under the Plan.

     6.  Amendment of the Plan.  The Board of Directors may suspend or terminate
the Plan or any  portion  thereof at any time,  and the Board of  Directors  may
amend the Plan from time to time as may be deemed to be in the best interests of
the  Company;  provided,   however,  that  no  such  amendment,   alteration  or
discontinuation  shall be made (a) that  would  impair  the rights of a Director
with respect to Options,  Restricted Stock or Stock Awards theretofore  awarded,
without such person's consent,  or (b) without the approval of the stockholders,
(i) if such  approval is  necessary  to comply with any legal,  tax or statutory
requirement,  including any approval  requirement  which is a  prerequisite  for
exemptive  relief from  Section 16 of the  Securities  Exchange Act of 1934 (the
"1934 Act") or (ii) would  materially  change the definition of persons eligible
to receive  awards under this Plan, or (c) unless such amendment is necessary to
comply with changes in the Internal  Revenue  Code of 1986,  as amended,  or the
Employment  Retirement  Income  Security  Act of  1974,  as  amended,  or  rules
promulgated thereunder.

     7.  Miscellaneous  Provisions.  Neither  the  Plan  nor  any  action  taken
hereunder  shall be  construed  as giving any Director any right to be nominated
for  re-election  to the Board.  The Plan shall be  governed  by the laws of the
state of Florida.

     8. Effective Date and Duration of Plan. The Plan shall be deemed  effective
as of the effective date of the  distribution  of Common Stock to the holders of
General  Mills,  Inc.  Common  Stock.  No awards shall be made  hereunder  after
September 30, 2005.

     9.  Section 16. With  respect to persons  subject to Section 16 of the 1934
Act,  transactions  under the Plan are  intended to comply  with all  applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent any
provision of the Plan or action by the Committee fails to so comply, it shall be
deemed null and void, to the extent permitted by law and deemed advisable by the
Committee.



As amended and restated July 26, 2002
As further amended March 19, 2003, effective as of July 26, 2002
As amended June 19, 2003


                                       5



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>6
<FILENAME>mip_plan.txt
<DESCRIPTION>EXHIBIT 10(H) MIP
<TEXT>
                                                                   Exhibit 10(h)


                            DARDEN RESTAURANTS, INC.

                           MANAGEMENT AND PROFESSIONAL

                                 INCENTIVE PLAN



<PAGE>




                                TABLE OF CONTENTS



PART I.       DEFINITIONS.....................................................1

     A.  Actively Employed....................................................1
     B.  Additional Incentive Award...........................................1
     C.  Agent................................................................1
     D.  Award................................................................1
     E.  Base Incentive Award.................................................1
     F.  Board................................................................1
     G.  Change of Control....................................................1
     H.  Committee............................................................1
     I.  Common Stock.........................................................2
     J.  Company..............................................................2
     K.  Consolidated Earnings................................................2
     L.  Management Employee..................................................2
     M.  Matching Restricted Stock ...........................................2
     N.  Original Deposit.....................................................2
     O.  Participant..........................................................2
     P.  Plan.................................................................2
     Q.  Plan Year............................................................2
     R.  Professional Employee................................................2
     S.  Stock Matching.......................................................2
     T.  Stock Matching Provisions............................................3

PART II. GENERAL PROVISIONS...................................................3

     A.  Objective Of The Plan................................................3
     B.  Eligibility..........................................................3
     C.  Participation........................................................3

PART III.     BASE INCENTIVE AWARDS...........................................3

     A.  Individual Performance...............................................3
     B.  Corporate Performance................................................4
     C.  Determination Of Amounts Of Award....................................4

PART IV. ADDITIONAL INCENTIVE AWARDS..........................................5

     A.  Cash Or Other Awards.................................................5
     B.  Participation In Stock Matching......................................5

PART V.  DEFERRAL OF CASH INCENTIVE AWARDS....................................6

PART VI. PLAN ADMINISTRATION..................................................7


                                       i

<PAGE>



                                     PART I

                                   DEFINITIONS

A.   Actively Employed

     The term  "Actively  Employed"  means  the  Participant  is deemed to be an
     active  employee of the  Company,  as  determined  in  accordance  with the
     Company's policies and procedures,  provided that the period during which a
     Participant  is "Actively  Employed"  will not include any leave of absence
     period,  except as  otherwise  determined  by the  Company's  policies  and
     procedures.

B.   Additional Incentive Award

     The term  "Additional  Incentive  Award" means a  Participant's  additional
     incentive award granted under Part IV of this Plan.

C.   Agent

     The term "Agent"  means the Company or such other  entity as the  Committee
     may designate to fulfill the responsibilities of "Agent" under this Plan.

D.   Award

     The term "Award" means any Base Incentive Award and/or Additional Incentive
     Award granted under this Plan.

E.   Base Incentive Award

     The term "Base Incentive Award" means a Participant's  base incentive award
     granted under Part III of this Plan.

F.   Board

     The term "Board" means the Board of Directors of the Company.

G.   Change of Control

     The term "Change of Control"  means the  occurrence of any of the following
     events:

     (i)  any person  (including  a group as defined in Section  13(d)(3) of the
          Securities Exchange Act of 1934) becoming, directly or indirectly, the
          beneficial  owner of  twenty  percent  (20%) or more of the  shares of
          stock of the Company  entitled to vote for the election of  directors;
     (ii) as a result of or in connection  with any cash tender offer,  exchange
          offer,  merger  or  other  business  combination,  sale of  assets  or
          contested election,  or combination of the foregoing,  the persons who
          were  directors of the Company just prior to such event shall cease to
          constitute a majority of the Company's  Board of Directors;  or
     (iii)the  stockholders of the Company approve an agreement  providing for a
          transaction  in which  the  Company  will  cease to be an  independent
          publicly-owned  corporation  or a sale or other  disposition of all or
          substantially all of the assets of the Company occurs.

H.   Committee

     The term "Committee" means the Compensation Committee of the Board.

                                       1

<PAGE>


I.   Common Stock

     The term "Common Stock" or "Stock" means the common stock of the Company.

J.   Company

     The term "Company" means Darden Restaurants, Inc. and its subsidiaries.

K.   Consolidated Earnings

     The term "Consolidated Earnings" means consolidated net income for the year
     for which an Award is made,  adjusted  to omit the  effects of unusual  and
     extraordinary items,  discontinued operations and the cumulative effects of
     changes in accounting principles,  all as shown on the audited consolidated
     statement of earnings of the Company and its subsidiaries and as determined
     in accordance with generally accepted accounting principles.

L.   Management Employee

     The term "Management  Employee" means any active key management employee of
     the Company or its  subsidiaries,  to the extent  designated  by the Senior
     Vice President,  Human  Resources,  including such members of the Board and
     the Chairman as are actively employed by the Company or its subsidiaries.

M.   Matching Restricted Stock

     The term "Matching  Restricted  Stock" means shares described in Part IV(B)
     of this Plan.

N.   Original Deposit

     The term "Original  Deposit" means shares deposited  pursuant to Part IV(B)
     of this Plan.

O.   Participant

     The term "Participant"  means an individual selected to be a Participant in
     accordance with Part II of this Plan.

P.   Plan

     The  term  "Plan"  means  the  Darden  Restaurants,   Inc.  Management  and
     Professional Incentive Plan, formerly known as the Darden Restaurants, Inc.
     Management Incentive Plan.

Q.   Plan Year

     The term "Plan Year" means the Company's fiscal year.

R.   Professional Employee

     The term  "Professional  Employee" means any  professional  employee to the
     extent designated by the Vice President, Compensation.

S.   Stock Matching

     The term  "Stock  Matching"  means  incentive  compensation  in the form of
     Common Stock made available by the Company on the condition the Participant
     deposits a specified amount of Common Stock with the Company.

                                       2

<PAGE>


T.   Stock Matching Provisions

     The term "Stock Matching Provisions" means the provisions set forth in Part
     IV(B) of this Plan.


                                     PART II

                               GENERAL PROVISIONS

A.   Objective Of The Plan

     It is the  intent  of the  Company  to  provide  financial  rewards  to key
     management  and   professional   employees  in  recognition  of  individual
     contributions  to the success of the Company  under the  provisions of this
     Plan. As such,  the  Committee  has designed  this Plan to accomplish  such
     objectives.  Participant  Awards will be based on the comparative impact of
     the Participant's  position to the overall corporate results as measured by
     the degree to which the  individual is able to affect  division/subsidiary,
     group and corporate results.

B.   Eligibility

     Any Management  Employee and any Professional  Employee will be eligible to
     participate  in  the  Plan.  Eligibility  will  not  carry  any  rights  to
     participation nor to any fixed Awards under the Plan.

C.   Participation

     As early as possible in each Plan Year, management will recommend a list of
     proposed  Participants  in the  Plan,  and  the  Committee  thereupon  will
     determine those who have been selected as Participants for the current Plan
     Year.   Participants  will  be  those  persons  holding  positions,   which
     significantly affect operating results,  while providing the opportunity to
     contribute  to  current  earnings  and the future  success of the  Company.
     During the year,  other  Participants  may be added because of promotion or
     for other reasons  warranting  their  inclusion,  and  Participants  may be
     excluded  from active  participation  because of demotion or other  reasons
     warranting  their  exclusion.  In order to receive an Award,  a Participant
     must be  Actively  Employed  as of the end of the Plan Year for which  such
     Award is made,  unless  the  Participant's  termination  is due to death or
     retirement on or after age 55 and 10 years of service during the Plan Year.
     In all events in which a Participant  is eligible to receive an Award,  the
     Award will be  prorated  based on the total days  employed  during the Plan
     Year in a position eligible for participation in the Plan.

                                    PART III

                              BASE INCENTIVE AWARDS

The size of a  Participant's  Base Incentive Award under this Plan will be based
on both  individual  and  corporate  performance,  relative  to  pre-established
performance objectives.

A.   Individual Performance

     Individual performance for the Plan Year will be determined as follows:

     1.   At the  beginning  of each Plan Year,  each  Participant  will develop
          written  objectives  for the  year,  which  are  directly  related  to
          specific job accountabilities.

     2.   The  individual  objectives  will be reviewed with each  Participant's
          supervisor  for  acceptance  and will  become  the  primary  basis for
          establishing the individual's  performance for the year. For the Chief
          Executive  Officer,  such  objectives will be reviewed and approved by
          the Committee.

                                       3

<PAGE>


     3.   Near the end of each Plan Year, each Participant will submit to his or
          her  supervisor,  a summary of  accomplishments  related to individual
          performance  during  the  year.  Based on this  information  and other
          information related to individual performance or job accountabilities,
          the supervisor will assess the individual's performance.

B.   Corporate Performance

     At the beginning of each Plan Year, the Committee will establish  corporate
     and/or unit  performance  targets,  and near the end of each Plan Year, the
     Committee will establish corporate and/or unit performance  ratings,  based
     on generally accepted  performance measures to be selected by the Committee
     such as, but not limited to, earnings per share,  return on cash, return on
     sales, cash flow, market share, revenue growth,  earnings growth, return on
     gross investment, total shareholder return and operating profits.

C.   Determination Of Amounts Of Award

     The Committee acting in its discretion,  subject to the maximum amounts set
     forth below,  will determine the amounts of Awards to Participants  for any
     Plan  Year.  Such  determinations,  except in the case of the Award for the
     Chairman of the Board, will be made after  considering the  recommendations
     of the Chairman and such other matters as the Committee will deem relevant.
     The Committee's  determination of Awards for any Plan Year shall be made no
     later than the 90th day of the Plan Year.  Any Award which is granted for a
     period of more than one Plan Year  shall be made no later than the 90th day
     of the first Plan Year.

     Notwithstanding  the foregoing,  the maximum Awards payable with respect to
     any Plan Year to any Participant  will not exceed two tenths of one percent
     (0.2%) of the  Company's  annual  sales for such year (as  reflected in the
     Company's  annual audited  financial  statements  for such year).  For this
     purpose,  the value of the Common  Stock,  restricted  stock or  restricted
     stock  units  that are part of any Award  will be based on the fair  market
     value of the  Common  Stock  subject  to the Award on the date the Award is
     made.  In all events,  however,  any Award in the form of cash shall not be
     paid,  and any  Award  in the form of  Common  Stock,  restricted  stock or
     restricted  stock  units  shall  be  forfeited,   unless  the  Company  has
     Consolidated  Earnings  for the Plan Year for  which the Award is  granted.
     Further,  an Award  based on a period of more than one year will be limited
     to the  aggregate  Consolidated  Earnings and sales of the Company for such
     period of years,  excluding any year which the Company has no  Consolidated
     Earnings.

     Any Award in the form of cash shall not be paid,  and any Award in the form
     of Common Stock,  restricted  stock or restricted  stock units shall remain
     subject to risk of forfeiture, until: (a) the Committee receives assurances
     from  both  the  Company's  Chief  Financial  Officer  and its  independent
     accountants  that the Company has  achieved  Consolidated  Earnings for the
     Plan  Year(s)  and that the  amount  of such  Award  does  not  exceed  the
     applicable  limitation under this Part III; and (b) the Committee certifies
     in writing to the Board that the  Consolidated  Earnings have been achieved
     and the applicable limitation has not been exceeded.

     Awards will be paid in cash,  Common Stock,  restricted stock or restricted
     stock units,  or any  combination  of the  foregoing,  as determined by the
     Senior Vice President,  Human Resources.  Any such Common Stock, restricted
     stock or  restricted  stock units shall be issued  pursuant to the terms of
     the Company's Stock Option and Long-Term Incentive Plan of 1995, Restaurant
     Management  and Employee Stock Plan of 2000,  2002 Stock  Incentive Plan or
     any successor plan or plans, each as may be amended from time to time.

                                       4

<PAGE>


                                     PART IV

                           ADDITIONAL INCENTIVE AWARDS

A.   Cash Or Other Awards

     Subject  to the terms and  conditions  of Part III of this Plan and,  where
     applicable,  to the Stock  Matching  Provisions,  a Management  Employee is
     eligible to receive an Additional  Incentive  Award in the form of cash, or
     if so  determined by the Senior Vice  President,  Human  Resources,  Common
     Stock,  restricted  stock or restricted  stock units, or any combination of
     the foregoing.  Any Additional Incentive Award, or any part thereof, may be
     made  subject to the Stock  Matching  Provisions  if so  determined  by the
     Senior Vice President, Human Resources.

B.   Participation In Stock Matching

     If an Additional  Incentive  Award,  or any part thereof,  is designated as
     being made subject to the Stock  Matching  Provisions,  then the  following
     provisions shall apply:

     1.   A Management Employee under age 55 as of the last day of the Plan Year
          who is selected to participate in the Stock Matching Provisions of the
          Plan  may do so by  depositing  shares  of  Common  Stock  based  on a
          percentage of his or her Base Incentive  Award,  which  percentage the
          Committee  will set on an annual basis.  Such  percentage  may vary by
          employee group and from year to year.

     2.   Participants  age 55 or over as of the last  day of the Plan  Year who
          are  selected  for  Stock  Matching  may  elect  full,  partial  or no
          participation  in the Stock Matching  Provisions,  with immediate cash
          payments  being  made in an amount  equal to 60% of the  amount of the
          Base Incentive Award  otherwise  eligible for Stock Matching for which
          the  employee  has  elected to receive  cash  payment in lieu of Stock
          Matching.

     3.   The Company will notify each Management  Employee who  participates in
          the  Stock  Matching  Provisions  of the  maximum  number of shares of
          Common Stock which he or she is  permitted to deposit  under the Plan,
          and each  Participant  may choose to deposit all or any portion of the
          number of shares  permitted  to be  deposited.  Participants  may make
          their  Original  Deposit  at any time after  they  receive  their Base
          Incentive Award, but, to participate in the Stock Matching  Provisions
          of this Plan,  Participants must deposit such shares with the Agent no
          later than the December 31  immediately  following the end of the Plan
          Year for which the Base Incentive Award has been paid.

     4.   Any Participant who dies, retires on or after attaining age 65, elects
          early  retirement  after  attaining age 55 and  completing 10 years of
          service,  or is permanently  disabled and unable to work as determined
          by the Senior Vice President,  Human  Resources,  either during a Plan
          Year or prior to the final date for  depositing  the Original  Deposit
          shares  for such Plan Year  (December  31),  will not be  eligible  to
          participate  in the  Stock  Matching  Provisions,  but  instead,  such
          Participant,  or the Participant's legal representative,  will receive
          an Additional  Incentive  Award in Stock or cash, as determined by the
          Senior Vice President, Human Resources, for the Plan Year in an amount
          equal to the amount otherwise eligible for Stock Matching.

     5.   On or before the December 31 immediately preceding the end of the Plan
          Year,   Participants  must  notify  the  Company  in  writing  of  the
          applicable participation alternatives elected under the Stock Matching
          Provisions.  Elections  regarding  Stock  Matching  participation  are
          effective for the current Plan Year.

     6.   As soon as practical  following the Original Deposit by a Participant,
          the Company will match these shares and either  deposit with the Agent
          for the Participant's  account matching Common Stock for each share of
          the Original Deposit or evidence the issuance of matching Common Stock

                                       5

<PAGE>

          for each share of the Original Deposit in book entry form as reflected
          on the master stockholder  records of the Company.  All such deposited
          Stock will be Matching  Restricted  Stock,  which will be delivered to
          the Participant  upon vesting.  Matching  Restricted  Stock shall have
          such  terms as may be  determined  from time to time  pursuant  to the
          terms of the  applicable  plan under  which such  Matching  Restricted
          Stock is issued; provided, however, that any Matching Restricted Stock
          granted prior to June 19, 2003 shall include the following terms:

               The  vesting  period  will be from one (1) to ten (10) years (the
               "Restricted  Period") as determined by the Committee,  and may be
               accelerated   based  on  performance  goals  established  by  the
               Committee. In the event of termination after attainment of age 55
               and 10 years  of  service  but  prior  to the  completion  of the
               Restricted  Period,  provided the  Participant  leaves his or her
               shares,  if any, on  deposit,  the  Participant  will vest in all
               corresponding  shares  of  Matching  Restricted  Stock  as of the
               earlier  of  attainment  of age 65 or the  end of the  Restricted
               Period. If the Company  terminates the  Participant's  employment
               involuntarily  and not for cause (as determined by the Committee)
               prior to the completion of the Restricted  Period, and the sum of
               the  Participant's  age and  years of  service  with the  Company
               equals or exceeds  seventy (70),  any shares that have not vested
               on the date of  termination of the  Participant's  employment but
               that  would  have  vested  within  two (2) years from the date of
               termination if the  Participant's  employment had continued shall
               become  immediately  vested  on the  date  of  the  Participant's
               termination  of  employment.  In the event the  Original  Deposit
               Stock is  withdrawn  or a  required  deposit  was not  made,  all
               Matching  Restricted  Stock will be forfeited to the Company.  If
               termination  of  employment  occurs prior to attainment of age 55
               and  completion  of 10 years of service or prior to the time that
               the sum of the  Participant's  age and years of service  with the
               Company  equals or exceeds  seventy (70), and prior to completion
               of the  Restricted  Period  (except  for  death),  such  Matching
               Restricted  Stock will be forfeited to the Company.  In the event
               of the death of a  Participant  prior to vesting in the  Matching
               Restricted Stock, a pro-rata portion of such shares will vest and
               be delivered to the Participant's beneficiary, based on the ratio
               of the number of months  during  which the shares were on deposit
               prior to the  Participant's  death to the number of months in the
               Restricted Period, with all remaining shares being forfeited.  In
               the event of the death of a Participant  prior to completion of a
               performance cycle, as established in accordance with the terms of
               a performance accelerated vesting schedule, a pro-rata portion of
               such  shares  will  vest and be  delivered  to the  Participant's
               beneficiary,  at the end of the performance  cycle,  based on the
               ratio of the number of months  during  which the  shares  were on
               deposit prior to the Participant's  death to the number of months
               completed in the  performance  cycle,  with all remaining  shares
               being forfeited.

     7.   A Participant may temporarily  withdraw all or a portion of the shares
          on deposit for all Plan Years (other than Matching  Restricted  Stock)
          in order to exercise Company stock options, subject to an equal number
          of shares of Common  Stock  being  immediately  re-deposited  with the
          Agent after such exercise.


                                     PART V

                        DEFERRAL OF CASH INCENTIVE AWARDS

Subject to rules adopted by the Committee,  a Participant may elect to defer all
or a portion of a cash Award during each calendar  year in  accordance  with the
terms and conditions of the Company's FlexComp Plan or any successor plan.

In order to defer all or a portion  of the cash  Award  for a  particular  bonus
period,  a  Participant  must make a valid  election  under the FlexComp Plan by
executing  and filing a deferral  election form with the Company sixty (60) days
prior to the end of the Plan Year.

                                       6

<PAGE>


                                     PART VI

                               PLAN ADMINISTRATION

This Plan will be  effective  in each  fiscal  year of the  Company  and will be
administered  by the  Committee and the  Committee  will have full  authority to
interpret the Plan.  Such  interpretations  of the  Committee  will be final and
binding  on  all  parties,   including  the   Participants,   survivors  of  the
Participants, and the Company.

The   Committee   will  have  the   authority   to   delegate   the  duties  and
responsibilities of administering the Plan,  maintaining  records,  issuing such
rules and regulations as it deems appropriate, and making the payments hereunder
to such employees or agents of the Company as it deems proper.

The Board,  or if specifically  delegated,  its delegate,  may amend,  modify or
terminate  the Plan at any  time,  provided,  however,  that no such  amendment,
modification  or termination  will adversely  affect any benefit earned (but not
necessarily  vested)  under  the Plan  prior to the  date of such  amendment  or
termination,  unless the Participant, or the Participant's beneficiary,  becomes
entitled  to an  amount  equal to or  greater  than the  value of the  adversely
affected portion of such benefit under another plan, program or practice adopted
by the  Company.  Notwithstanding  the above,  an  amendment,  modification,  or
termination  affecting  previously accrued benefits may not occur after a Change
of  Control  without  the  written  consent of a  majority  of the  Participants
determined as of the day before such Change of Control.

In the  event  the  Company  will  effect  one or  more  changes,  split-ups  or
combinations  of shares of Common Stock or one or more other like  transactions,
the Board or the Committee may make such adjustment,  upward or downward, in the
number of shares of Common  Stock to be deposited  by the  Participants  as will
appropriately reflect the effect of such transactions.

In the event the Company will  distribute  shares of a subsidiary of the Company
to its  stockholders  in a  spin-off  transaction,  the  shares  of stock of the
subsidiary  distributed to  Participants,  which are  attributable to Restricted
Stock, will be vested and delivered to the Participants  subject to any specific
instructions of the Committee.

Except as otherwise provided in this Plan, neither any benefit payable hereunder
nor the right to receive any future  benefit under the Plan may be  anticipated,
alienated, sold, transferred, assigned, pledged, encumbered, or subjected to any
charge  or  legal  process.  If any  attempt  is made to do so,  or if a  person
eligible  for  any  benefits  becomes  bankrupt,  the  Committee,  in  its  sole
discretion, may terminate the interest under the Plan of the person affected and
may cause the  interest  to be held or applied for the benefit of one or more of
the dependents of such person or may make any other disposition of such interest
that it deems appropriate.

All questions  pertaining to the  construction,  validity and effect of the Plan
will be determined  in accordance  with the laws of the State of Florida and the
laws of the United States.

Approved by sole stockholder on February 27, 1995, effective May 28, 1995
Amended May 23, 1996
Approved by shareholders September 19, 1996
Amended June 21, 1999
Amended June 21, 2000 effective as of June 1, 2000, subject to shareholder
        approval
Approved by shareholders September 20, 2000
Amended June 19, 2003

                                       7

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>7
<FILENAME>twothousand_plan.txt
<DESCRIPTION>EXHIBIT 10(L) - 2000 PLAN
<TEXT>
                                                                   Exhibit 10(l)
                                                                   -------------

                            DARDEN RESTAURANTS, INC.

              RESTAURANT MANAGEMENT AND EMPLOYEE STOCK PLAN OF 2000



1.   PURPOSE OF THE PLAN

     The  purpose of the Darden  Restaurants,  Inc.  Restaurant  Management  and
     Employee  Stock Plan of 2000 (the "Plan") is to assist Darden  Restaurants,
     Inc.,  its  subsidiaries  and  affiliates  (i.e.,  entities in which Darden
     Restaurants,  Inc. directly or indirectly owns an equity interest of 25% or
     more)  (collectively,  the  "Company")  in attracting  and  retaining  able
     employees,  including but not limited to restaurant  management  employees.
     The Plan is designed to provide  incentives and awards to employees who may
     be  responsible  for the  management,  growth and sound  development of the
     restaurants  of the Company,  and to align the interests of employees  with
     the interests of the Company's stockholders. The Plan allows the Company to
     award  "Stock  Options",  "Restricted  Stock" or  "Restricted  Stock Units"
     (hereinafter defined) to its employees in lieu of salary increases or other
     consideration,  compensation  or benefits,  as an incentive  award, or as a
     bonus,  including  but not limited to a  "sign-on"  award or bonus to a new
     employee at the time of his or her hiring.

2.   EFFECTIVE DATE, DURATION AND SUMMARY OF PLAN

     A.   Effective Date and Duration

          This Plan is effective as of January 1, 2000. Awards may be made under
          the Plan until January 1, 2004.

     B.   Summary of Stock Option Provisions for Participants

          The stock option  ("Stock  Option") that may be awarded to an employee
          under  this  Plan  gives  the  employee  a right  to  purchase  Darden
          Restaurants,  Inc.  "Common  Stock"  (hereinafter  defined) at a fixed
          price at a future date. An employee  will receive an option  agreement
          in his or her name.  The option  agreement  will  contain the term and
          other conditions of the option grant,  including any consideration the
          employee  will  forego or exchange  as a  condition  of the grant.  In
          general,  each  option  agreement  will  state the number of shares of
          Darden  Restaurants,  Inc. Common Stock that the employee can purchase
          from the Company, the price at which shares may be purchased,  and the
          last date upon which a purchase may be made. An award of Stock Options
          under this Plan will not result in any  taxable  income at the time of
          receipt of the award and the option agreement.

          The price at which  the  employee  may buy  Darden  Restaurants,  Inc.
          shares will be equal to the market price of the shares on the New York
          Stock  Exchange as of the day of the Stock Option award.  If the price
          of Darden  Restaurants,  Inc.  Common  Stock has risen  when the Stock
          Option  becomes  exercisable,  the  employee  will  be able to gain by
          exercising  the Stock  Option.  The gain  would  equal the  difference
          between the exercise price of the Stock Option and the market price of
          Darden  Restaurants,  Inc. shares on the date the employee buys shares
          under the terms of the option certificate.  This gain would be taxable
          to the employee at the time of exercise.

          The  employee  will never be obligated to buy shares of the Company if
          he or she does  not  wish to do so.  Once  the  Stock  Option  becomes
          exercisable,  the  employee can continue to hold it as an employee for
          its remaining  term before  making the decision  whether or not to buy
          shares of the Company. After the term of the Stock Option expires, the
          rights  under the Stock Option will lapse and it cannot be used by the
          employee.

<PAGE>


          In general, the employee cannot sell or assign the Stock Option to any
          other  person.   The  specific   provisions   covering   Stock  Option
          transferability  are  covered in Section 10 and other  portions of the
          Plan.

3.   ADMINISTRATION OF THE PLAN

     The Plan will be administered by the Compensation  Committee of the Company
     (the "Committee").  The Committee will be comprised solely of non-employee,
     independent  members of the Board of Directors of the Company (the "Board")
     appointed in accordance with the Company's  Articles of  Incorporation  and
     By-laws.  Subject to the express provisions of the Plan and applicable law,
     the Committee will have authority to: (i) adopt rules and  regulations  for
     carrying  out the purpose of the Plan;  (ii) select the  employees  to whom
     "Awards"  (hereinafter defined) will be made; (iii) determine the number of
     shares to be  awarded  and the  other  terms  and  conditions  of Awards in
     accordance  with the  provisions  of the  Plan;  (iv)  amend  the terms and
     conditions  of any Award or  agreement  relating  to any  Award,  provided,
     however,  that,  except as  otherwise  provided  in  Section 4 hereof,  the
     Committee  shall not reprice,  adjust or amend the exercise  price of Stock
     Options  previously  awarded  to  any  Participant  (hereinafter  defined),
     whether through amendment, cancellation and replacement grant, or any other
     means;  and (v)  interpret,  construe and implement  the  provisions of the
     Plan. In addition,  if at any time Rule 16b-3 or any successor  rule ("Rule
     16b-3")  under the  Securities  Exchange Act of 1934, as amended (the "1934
     Act"), so permits, the Committee may delegate its duties under the Plan, in
     whole  or in  part to the  Chief  Executive  Officer  and to  other  senior
     officers  of the Company if so doing will not  adversely  affect the Plan's
     exemption  from  Section 16 of the 1934 Act (or any  successor  provisions)
     provided by Rule 16b-3.  Notwithstanding the foregoing,  only the Committee
     may select  and make  other  decisions  as to Awards to  employees  who are
     executives  of the Company,  provided  that  officers and directors who are
     subject to reporting  obligations  under Section 16 of the 1934 Act are not
     eligible to receive Awards under this Plan. The Committee (or its permitted
     delegate)  may correct any defect or supply any omission or  reconcile  any
     inconsistency in any agreement  relating to any Award under the Plan in the
     manner and to the extent it deems necessary. Decisions of the Committee (or
     its permitted  delegate)  shall be final,  conclusive  and binding upon all
     parties, including the Company, stockholders and employees.

4.   COMMON STOCK SUBJECT TO THE PLAN

     Only the shares of common stock of the Company (without par value) ("Common
     Stock") held in the Company's  treasury may be  transferred to the employee
     upon  exercise  of  a  Stock  Option,   awarded  as  Restricted  Stock,  or
     transferred  upon expiration of the restricted  period for Restricted Stock
     Units.

     The Committee, in its discretion,  may require, as a condition to the grant
     of Stock Options, Restricted Stock or Restricted Stock Units (collectively,
     "Awards"), the deposit of Common Stock owned by the employee receiving such
     grant,  and, if the required  deposit is not made or maintained  during the
     required holding period or the applicable restricted period, the forfeiture
     of such Awards. Required deposits of Common Stock may not be sold, pledged,
     transferred or assigned during the applicable  holding period or restricted
     period.  The  Committee may also  determine  whether any shares issued upon
     exercise of a Stock Option will be restricted in any manner.

     Subject  to the  following  provisions  of  this  Section  4,  the  maximum
     aggregate  number of treasury shares of Common Stock  authorized  under the
     Plan and for which  Awards  may be  granted is five  million  four  hundred
     thousand  (5,400,000).  Upon the  expiration,  forfeiture,  termination  or
     cancellation, in whole or in part, of Restricted Stock Units or unexercised
     Stock Options,  or the forfeiture or other  reacquisition by the Company of
     shares  of  Restricted  Stock,  the  shares  of  Common  Stock  held in the
     Company's  treasury  and  previously   allocated  to  such  Stock  Options,
     Restricted  Stock or  Restricted  Stock Units will again be  available  for
     Awards  under the  Plan.  To the  extent  that any  shares of Common  Stock
     covered  by an Award  are not  delivered  to a  Participant  (as  hereafter
     defined)  or  beneficiary  because  such  shares  are used to  satisfy  the
     applicable tax withholding  obligation,  such shares shall not be deemed to
     have been  delivered  for  purposes of  determining  the maximum  number of
     shares of Common Stock available for delivery under the Plan. The number of
     shares subject to the Plan, the  outstanding  Awards and the exercise price
     per share of outstanding Stock Options may be appropriately adjusted by the
     Committee in the event that:

                                       2

<PAGE>


     (i)  the number of  outstanding  shares of Common  Stock will be changed by
          reason of split-ups,  spin-offs,  combinations or reclassifications of
          shares;

     (ii) any stock dividends are distributed to the holders of Common Stock;

     (iii)the Common Stock is converted  into or exchanged for other shares as a
          result of a merger or  consolidation  (including  a sale of assets) or
          other recapitalization,  or similar events occur that affect the value
          of the Common Stock; or

     (iv) the Committee determines such adjustments are appropriate to prevent a
          material dilution or material enlargement of the benefits or potential
          benefits intended to be made available under the Plan.

5.   ELIGIBLE PERSONS

     Only persons who are  employees of the Company shall be eligible to receive
     Awards under the Plan ("Participants"). No Award will be made to any member
     of the Committee,  any other non-employee  director of the Company,  or any
     officer or director  subject to the reporting  obligations of Section 16 of
     the 1934 Act.

6.   PURCHASE PRICE OF STOCK OPTION SHARES

     The  purchase  price for each share of Common  Stock that may be  purchased
     under a Stock Option will not be less than 100% of the "Fair Market  Value"
     (hereinafter  defined) of the shares of Common  Stock on the date of grant.
     "Fair Market Value",  as used in the Plan,  equals the mean of the high and
     low  prices  of the  Common  Stock on the New York  Stock  Exchange  on the
     applicable date.

7.   STOCK OPTION TERM AND TYPE

     The term of any Stock Option may not exceed ten (10) years from the date of
     grant and will  expire as of the close of  business  on the last day of the
     designated  term,  unless  terminated  earlier under the  provisions of the
     Plan.  All  Stock  Option  grants  under the Plan are  non-qualified  stock
     options  governed by Section 83 of the Internal  Revenue  Code of 1986,  as
     amended (the "Code").

8.   EXERCISE OF STOCK OPTIONS

     A.   Except as provided  in  Sections  12 and 13  ("Change of Control"  and
          "Termination  of  Employment"),  each Stock Option may be exercised no
          sooner from the date of grant than in increments  of one-fourth  after
          one year, one-fourth after two years, one-fourth after three years and
          one-fourth after four years,  subject to the  Participant's  continued
          employment with the Company and other terms and conditions  prescribed
          by the Committee. Notwithstanding the foregoing, the Committee (or its
          delegate)  may specify a longer  period  before a Stock  Option may be
          exercised.

     B.   A Participant  exercising a Stock Option must notify the Company prior
          to 5:00 P.M. EST/EDT on the day of exercise,  which must be a business
          day at the offices of the Company's  Restaurant  Support  Center.  The
          notification  of such exercise must include the number of shares to be
          purchased.  At the time of purchase,  the Participant  must tender the
          full purchase  price of the shares  purchased.  Until such payment has
          been made and a certificate (or certificates) for the shares purchased
          has been  issued  in the  Participant's  name,  the  Participant  will
          possess no stockholder rights with respect to such shares.  Payment of
          the purchase price will be made to the Company as follows,  subject to
          any applicable rules or regulations adopted by the Committee:

          (i)  in cash  (including  check,  draft,  money order or wire transfer
               payable to the order of the Company); or

                                       3

<PAGE>


          (ii) through  the  delivery  of shares of  Common  Stock  owned by the
               Participant; or

          (iii)to the  extent  permitted  by law and  pursuant  to any rules the
               Committee  may adopt,  by directing  the Company to withhold from
               any shares of Common Stock to be transferred to the  Participant,
               all or a portion of such shares; or

          (iv) by a combination of (i), (ii) or (iii) above.

          For purposes of determining the amount of a payment under  subsections
          (ii) or (iii),  above, the Common Stock will have a value equal to its
          Fair Market Value on the date of exercise.

9.   RESTRICTED STOCK AND RESTRICTED STOCK UNITS

     With respect to Awards of Restricted  Stock and Restricted Stock Units, the
     Committee will:

     (i)  select  Participants  to whom  Awards  will  be  made,  provided  that
          Restricted  Stock Units may only be awarded to Company  employees  who
          are employed outside the United States;

     (ii) determine  the number of shares of  Restricted  Stock or the number of
          Restricted Stock Units to be awarded;

     (iii)determine the length of the restricted  period,  which may not be less
          than one year, provided,  however, that effective for Restricted Stock
          granted  on or  after  June 1,  2000,  the  restricted  period  may be
          accelerated  to  less  than  one  year  based  on  performance   goals
          established by the Committee;

     (iv) determine  the   consideration,   if  any,  to  be  exchanged  by  the
          Participant  as  a  condition  to  a  grant  of  Restricted  Stock  or
          Restricted Stock Units; and

     (v)  determine  any  restrictions  in  addition  to those set forth in this
          Section 9.

     Any shares of  Restricted  Stock granted under the Plan may be evidenced in
     such  manner  as  the  Committee  deems  appropriate,   including,  without
     limitation,   by   book-entry   registration   or  by   issuance  of  stock
     certificates. Such shares may be held in escrow.

     Subject to the  restrictions  set forth in this Section 9, each Participant
     who receives  Restricted  Stock will have all rights as a stockholder  with
     respect to such shares,  including the right to vote the shares and receive
     dividends and other distributions.

     Each  Participant who receives  Restricted  Stock Units will be eligible to
     receive,  at the expiration of the applicable  restricted period, one share
     of Common Stock for each  Restricted  Stock Unit awarded.  The Company will
     transfer  the amount of Common  Stock from  treasury  shares and register a
     certificate in the name of each such Participant.  Participants who receive
     Restricted Stock Units will have no rights as stockholders  with respect to
     such  Restricted  Stock  Units  until such time as share  certificates  for
     Common Stock are transferred to the Participants. However, quarterly during
     the applicable  restricted  period for all  Restricted  Stock Units awarded
     under this Plan,  the Company will pay to each such  Participant  an amount
     equal  to the sum of all  dividends  and  other  distributions  paid by the
     Company  during  the prior  quarter  on an  equivalent  number of shares of
     Common Stock.

     Subject to the provisions of Section 12, for awards of Restricted  Stock or
     Restricted Stock Units that have a deposit requirement,  a Participant will
     be eligible to vest only in those shares of Restricted  Stock or Restricted
     Stock  Units for which  personally-owned  shares  are on  deposit  with the
     Company  as of the  date the  Participant's  employment  with  the  Company
     terminates.

                                       4

<PAGE>

     The total number of shares of Common  Stock  issued  through the vesting of
     Awards of Restricted Stock or Restricted Stock Units granted under the Plan
     will not exceed five percent (5%) of the total number of shares  authorized
     for this Plan.  No single  Participant  will receive  Awards of  Restricted
     Stock or  Restricted  Stock Units under the Plan if,  upon  vesting,  would
     exceed two percent  (2%) of the total number of shares  authorized  for the
     Plan.

10.  NON-TRANSFERABILITY

     Except as otherwise  provided in Section 9, no shares of  Restricted  Stock
     and no Restricted Stock Units may be sold, exchanged, transferred, pledged,
     or assigned  during the  restricted  period.  A  Participant  may not sell,
     exchange,  transfer,  pledge or assign any Stock Options awarded under this
     Plan except (i) by the  Participant's  last will and testament  through the
     executor or legal  representative of the deceased  Participant's  estate or
     (ii) by the applicable laws of descent and  distribution,  or (iii) by gift
     to a "family member",  as defined by the Committee,  from a Participant who
     is subject to the reporting  requirements of Section 16 of the 1934 Act and
     is eligible for retirement (age 55 with 10 years of service) at the time of
     the gift. Stock Options granted under this Plan may be exercised during the
     Participant's  lifetime only by the  Participant  or his or her guardian or
     legal  representative.  After death, such Stock Options may be exercised in
     accordance with Section 13B. Other than as set forth in this Plan, no Award
     under the Plan will be subject to anticipation, alienation, sale, transfer,
     assignment,  pledge, encumbrance or charge, and any attempt to the contrary
     will be void.

11.  WITHHOLDING TAXES

     As conditions precedent to the obligations of the Company to deliver shares
     of Common Stock upon the exercise of a Stock Option, and to transfer shares
     of  unrestricted  Common  Stock  from  the  treasury  upon the  vesting  of
     Restricted Stock or Restricted Stock Units, the Participant must pay to the
     Company cash in an amount equal to all required federal,  state,  local and
     foreign withholding taxes.

     Notwithstanding the foregoing,  to the extent permitted by law and pursuant
     to any rules the  Committee  may adopt,  a  Participant  may  authorize and
     direct the  Company  to satisfy  any such tax  withholding  requirement  by
     withholding  the number of shares  sufficient  to satisfy  the  withholding
     obligation from the Common Stock to be transferred to the Participant.

12.  CHANGE OF CONTROL

     Each outstanding Stock Option will become immediately and fully exercisable
     for a period of six (6) months  following  the date of any of the following
     occurrences (each called a "Change of Control"):

     (i)  if any person (including a group as defined in Section 13(d)(3) of the
          1934 Act) becomes,  directly or indirectly,  the  beneficial  owner of
          twenty percent (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 Company's Board of Directors; or

     (iii)the  stockholders of the Company approve an agreement  providing for a
          transaction  in which  the  Company  will  cease to be an  independent
          publicly-owned  corporation  or a sale or other  disposition of all or
          substantially all of the assets of the Company occurs.

     After such six-month period,  the normal option exercise  provisions of the
     Plan will govern.  If a  Participant  is  terminated  as an employee of the
     Company within two (2) years after any of the events specified in (i), (ii)
     or (iii),  his or her outstanding  Stock Options on the date of termination
     will become immediately exercisable for a period of three (3) months.

                                       5

<PAGE>


     For Stock Option grants that require the deposit of  employee-owned  Common
     Stock as a condition to obtaining rights and that are outstanding as of the
     date of any such  Change  of  Control,  (a) the  deposit  requirement  will
     terminate on the date of the Change of Control and deposited  stock will be
     promptly returned to the Participant,  and (b) any restrictions on the sale
     of shares issued upon the exercise of any such Stock Option will lapse.

     In the event of a Change of Control,  a Participant will vest in all shares
     of Restricted Stock and Restricted Stock Units effective on the date of the
     Change of  Control,  and any  matching  deposits  of Common  Stock  will be
     promptly returned to the Participant.

13.  TERMINATION OF EMPLOYMENT

     A.   Termination of Employment

          If the  Participant's  employment with the Company  terminates for any
          reason other than as  specified in this Section 13, the  Participant's
          Stock Options will terminate  three (3) months after such  termination
          and all shares of Restricted Stock and all Restricted Stock Units that
          are subject to restriction on the  termination  date will be forfeited
          by the  Participant  to the  Company.  In the  event  a  Participant's
          employment  with the Company is terminated for the  convenience of the
          Company,  as  determined  by the  Committee,  the  Committee  (or  its
          delegate),  in its (or its delegate's) sole  discretion,  may vest the
          Participant in all or any portion of outstanding  Stock Options (which
          shall  become  exercisable)  and/or  shares  of  Restricted  Stock  or
          Restricted  Stock Units awarded to such  Participant,  effective as of
          the date of such  termination  or according to any other schedule that
          the Committee (or its delegate) deems appropriate.

          In addition,  and  notwithstanding  the  foregoing  provisions of this
          Section 13A, effective for Stock Options granted on or after March 21,
          2001, if a Participant's employment with the Company is terminated for
          the  convenience  of the Company and for reasons  other than cause (as
          determined by the Committee),  and the Participant's  combined age and
          years of  service  with the  Company  equal at least 70 at the time of
          such termination, then the Participant's Stock Options that would have
          vested  within two years from the date of  termination  shall vest and
          become immediately exercisable, and shall expire on the earlier of (i)
          the expiration date of such Stock Options, or (ii) two years following
          the termination of employment.

     B.   Death

          If a Participant dies while employed by the Company,  any Stock Option
          previously  granted  under this Plan may be exercised by the following
          persons  to the full  extent  that such Stock  Option  could have been
          exercised by the Participant  immediately  prior to death:  (i) by the
          person (which may include any  individual,  corporation,  partnership,
          association or trust)  designated in the  Participant's  last will and
          testament or, (ii) in the absence of such designation, by the executor
          or administrator of the  Participant's  estate, or (iii) by the person
          to whom the Stock Option has been  transferred  to by such executor or
          administrator  pursuant to Section 10, or (iv) by the donee of a Stock
          Option made  pursuant to Section 10 (iii).  Outstanding  Stock  Option
          grants that are not otherwise exercisable as of the date of death will
          vest and become  exercisable in a pro-rata amount,  based on the ratio
          that the  number of full  months of  employment  completed  during the
          Stock Option's  vesting period,  from the date of grant to the date of
          death,  bears to the  number  of full  months  in the  Stock  Option's
          vesting period.

          If a Participant dies while employed by the Company,  his or her Stock
          Option grants conditioned on a deposit of employee-owned  Common Stock
          may be  exercised  as provided in the first  paragraph of this Section
          13B, subject to the following special conditions:

          (i)  any  restrictions  on the sale of shares issued upon the exercise
               of any such Stock Option will cease; and

                                       6

<PAGE>


          (ii) any employee-owned Common Stock deposited by the Participant as a
               condition to the Stock Option grant will be promptly  returned to
               the  person  (which  may  include  any  individual,  corporation,
               partnership,    association   or   trust)   designated   in   the
               Participant's  last will and testament or, in the absence of such
               designation,  to the Participant's  estate,  and all requirements
               regarding deposit by the Participant will terminate.

     A Participant who dies during any applicable restricted period will vest in
     a proportionate  number of shares of Restricted  Stock or Restricted  Stock
     Units, effective as of the date of death. The proportionate vesting will be
     based on the ratio that the number of full months of  employment  completed
     during the restricted period prior to the date of death bears to the number
     of full months in the applicable restricted period.

     C.   Retirement

          The Committee will determine, at the time of grant, the treatment of a
          Stock  Option upon the  retirement  of the  Participant.  Unless other
          terms are specified in the original Stock Option grant, and except for
          Stock Options  granted on or after March 21, 2001, a  Participant  who
          retires  from the Company at or after age 55, with 10 years of service
          with the  Company,  may  exercise  the Stock  Option  according to its
          original terms and conditions.  For Stock Option grants conditioned on
          the deposit of  employee-owned  Common Stock,  any restrictions on the
          sale of shares  issued upon the exercise of any such Stock Option will
          lapse on the date of retirement  of a  Participant  at or after age 55
          with 10 years of service with the Company. Effective for Stock Options
          granted on or after March 21,  2001,  if a  Participant  retires on or
          after reaching age 55 with 10 years of service with the Company,  then
          upon such  retirement,  such Stock Options shall fully vest and become
          immediately  exercisable  and  retain  the  same  Expiration  Date  as
          determined at the time of grant.

          A Participant  shall be fully vested in all shares of Restricted Stock
          or Restricted  Stock Units upon  attainment of age 65 (unless any such
          award specifically provides otherwise).

          Unless the applicable  Award  provides  otherwise,  a Participant  who
          retires at or after age 55 with 10 years of service  with the Company,
          but prior to age 65, during any applicable restricted period may elect
          either  of  the  following   alternatives   for  Restricted  Stock  or
          Restricted Stock Units:

          (a)  leave employee-owned  shares on deposit with the Company and vest
               in all shares of  Restricted  Stock or  Restricted  Stock  Units,
               effective as of the earlier of the date the  Participant  attains
               age 65 or the expiration of the applicable restricted period; or

          (b)  withdraw employee-owned shares and vest in a proportionate number
               of shares of Restricted Stock or Restricted Stock Units as of the
               date the  shares on  deposit  are  withdrawn.  The  proportionate
               vesting will be based on the ratio that the number of full months
               of employment completed during the restricted period prior to the
               date of  retirement  bears to the  number  of full  months in the
               applicable restricted period.

     D.   Spin-offs

          If  termination of employment is due to the  cessation,  transfer,  or
          spin-off of a complete line of business of the Company, the Committee,
          in its sole discretion, may determine the treatment of all outstanding
          Awards under the Plan.

     E.   Non-Competition

          Effective  for  Stock  Options  granted  on or after  June  21,  1999,
          recipients  of such Stock Options shall not, for a period of two years
          following  termination  of their  employment  with the Company for any
          reason whatsoever (including retirement),  directly or indirectly, (i)
          own, manage or operate, be employed by, or render consulting, advisory
          or other  services to, any  enterprise,  corporation  or business that
          owns or operates  casual  dining  restaurants,  anywhere in the United

                                       7

<PAGE>

          States or Canada  (a  "Competitor"),  or (ii)  solicit  or induce  any
          person who is an employee of the Company to own, manage or operate, be
          employed by, or render  consulting,  advisory or other  services to, a
          Competitor.  Notwithstanding  anything to the  contrary  contained  in
          paragraphs  A  through  D of this  Section  13,  upon  violation  by a
          Participant of the non-compete  provisions of this paragraph E, all of
          such  Participant's  outstanding  Stock  Options  will  expire  on the
          earlier of (i) the expiration date of the Stock Options, or (ii) three
          months  following  the date of  employment  with a Competitor or other
          prohibited competitive action.

14.  AMENDMENTS OF THE PLAN

     The Plan may be terminated,  modified, or amended by the Board of Directors
     of the Company or, subject to the  limitations of its delegated  authority,
     by the  Committee.  In  addition,  the  Committee  may  from  time  to time
     prescribe,  amend and rescind rules and  regulations  relating to the Plan.
     Subject to approval of the Board of  Directors,  the  Committee  may at any
     time  terminate  or suspend the  operation of the Plan,  provided  that the
     Committee may take no action without the approval of the Board of Directors
     of the Company that would:

     (i)  materially  increase the number of shares that may be issued under the
          Plan;

     (ii) materially  increase the benefits  accruing to Participants  under the
          Plan; or

     (iii)materially   modify   the   requirements   as   to   eligibility   for
          participating in the Plan.

     The Board of Directors will have authority to cause the Company to take any
     action  related  to the  Plan  that  may be  required  to  comply  with the
     provisions of the Securities Act of 1933, as amended, the 1934 Act, and the
     rules and regulations prescribed by the Securities and Exchange Commission.
     Any such action will be at the expense of the Company.

     Except as provided  for in the  preceding,  no  termination,  modification,
     suspension,  or  amendment  of the Plan shall alter or impair the rights of
     any  Participant  pursuant  to a prior  Award  without  the  consent of the
     Participant.  There  is  no  obligation  for  uniformity  of  treatment  of
     Participants under the Plan.

15.  FOREIGN JURISDICTIONS; GOVERNING LAW

     If not  inconsistent  with the intent of the Plan, the Committee may adopt,
     amend,  and  terminate  such  arrangements  as it  may  deem  necessary  or
     desirable to provide tax advantages or other benefits under the laws of any
     foreign jurisdiction to Participants subject to such laws.  Notwithstanding
     the foregoing,  the provisions of this Plan are to be construed  under, and
     governed by, the laws of the State of Florida.

16.  NOTICE

     All notices to the Company  regarding  the Plan must be in writing and will
     be effective  when actually  received by the Company.  Notices must be sent
     to:

                  Darden Restaurants, Inc.
                  5900 Lake Ellenor Dr.
                  Orlando, FL 32809
                  Attn:  General Counsel


As amended and restated July 26, 2002
As further amended March 19, 2003, effective as of July 26, 2002
As amended June 19, 2003


                                       8

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>8
<FILENAME>exhibit12_earningsratio.txt
<DESCRIPTION>EXHIBIT 12 - RATIO OF EARNINGS
<TEXT>
                                                                    EXHIBIT 12
                                                                    ----------

                            DARDEN RESTAURANTS, INC.
         COMPUTATION OF RATIO OF CONSOLIDATED EARNINGS TO FIXED CHARGES
                          (Dollar Amounts in Thousands)
<TABLE>
<CAPTION>

                                                                                     Fiscal Year Ended
 ----------------------------------------------------------------------------------------------------------------------
                                              May 25,         May 26,        May 27,         May 28,       May 30,
                                                2003           2002            2001           2000           1999
 ----------------------------------------------------------------------------------------------------------------------

<S>                                         <C>              <C>            <C>           <C>              <C>
 Consolidated Earnings from Operations
    before Income Taxes .................... $347,748         $363,309       $301,218       $273,907        $215,875
 Plus Fixed Charges:
    Gross Interest Expense..................   47,566           41,493         35,196         24,999          21,015
    40% of Restaurant and Equipment
        Minimum Rent Expense................   21,536           20,600         19,352         18,834          18,914
                                            ---------     ------------   ------------    -----------    ------------
              Total Fixed Charges...........  $69,102          $62,093        $54,548        $43,833         $39,929
 Less Capitalized Interest..................  (3,470)          (3,653)        (3,671)        (1,910)           (593)
                                            ---------     ------------   ------------    -----------    ------------
 Consolidated Earnings from Operations
    before Income Taxes Available to
    Cover Fixed Charges..................... $413,380         $421,749       $352,095       $315,830        $255,211
                                            =========     ============   ============    ===========    ============

 Ratio of Consolidated Earnings to Fixed
    Charges ................................     5.98             6.79           6.45           7.21            6.39
                                            =========     ============   ============    ===========    ============

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

</TABLE>




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>9
<FILENAME>fy03_mda.txt
<DESCRIPTION>EXHIBIT 13, MD&A
<TEXT>

                                                                      Exhibit 13
                                                                       ---------


MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS

This discussion and analysis should be read in conjunction with our consolidated
financial statements and related notes found elsewhere in this report.

As of May 25, 2003, Darden Restaurants,  Inc. operated 1,271 Red Lobster,  Olive
Garden,  Bahama  Breeze,  Smokey  Bones BBQ, and Seasons 52  restaurants  in the
United  States and Canada  and  licensed  33  restaurants  in Japan.  We own and
operate all of our restaurants in the U.S. and Canada, with no franchising.  Our
fiscal year ends on the last Sunday in May.  Fiscal  2003,  2002,  and 2001 each
consisted of 52 weeks of operation.

On March 21, 2002, our Board of Directors declared a three-for-two  split of our
common  stock.  The stock  split was  accomplished  through a 50  percent  stock
dividend,  which was  distributed on May 1, 2002 to stockholders of record as of
the close of business  on April 10,  2002.  All  applicable  references  in this
discussion  and  analysis  to number of shares  and per share  amounts of common
stock have been adjusted to reflect the stock split.

RESULTS OF OPERATIONS FOR FISCAL 2003, 2002, AND 2001

The following table sets forth selected  operating data as a percentage of sales
for the periods  indicated.  All  information  is derived from the  consolidated
statements of earnings for the periods indicated.
<TABLE>
<CAPTION>

                                                                                            Fiscal Years
-------------------------------------------------------------------------------------------------------------------
                                                                     2003             2002             2001
-------------------------------------------------------------------------------------------------------------------

<S>                                                                  <C>              <C>              <C>
Sales.........................................................       100.0%           100.0%           100.0%
Costs and expenses:
   Cost of sales:
     Food and beverage........................................        31.1             31.7             32.6
     Restaurant labor.........................................        31.9             31.5             31.6
     Restaurant expenses......................................        15.1             14.3             14.0
                                                                    ------             ----             ----
       Total cost of sales, excluding restaurant depreciation
          and amortization of 3.8%, 3.6%, and 3.5%,
          respectively........................................        78.1%            77.5%            78.2%
   Selling, general, and administrative.......................         9.4              9.6              9.8
   Depreciation and amortization..............................         4.1              3.8              3.7
   Interest, net..............................................         0.9              0.9              0.8
   Restructuring credit.......................................          --             (0.1)              --
                                                                  --------          --------        --------
             Total costs and expenses.........................        92.5%            91.7%            92.5%
                                                                    ------            ------          ------

Earnings before income taxes..................................         7.5              8.3              7.5
Income taxes..................................................         2.5              2.9              2.6
                                                                   -------           ------           ------

Net earnings..................................................         5.0%             5.4%             4.9%
                                                                     =====            ======          ======

-------------------------------------------------------------------------------------------------------------------
</TABLE>

SALES

Sales were $4.65 billion in fiscal 2003, $4.37 billion in fiscal 2002, and $3.99
billion in fiscal 2001.

The 6.6  percent  increase  in  sales  for  fiscal  2003  was  primarily  due to
same-restaurant   sales  increases  in  the  U.S.  and  a  net  increase  of  60
company-owned  restaurants since fiscal 2002. Total sales,  although higher than
the previous year,  were less than  anticipated due to lower than expected guest
counts for fiscal  2003.  Guest count  growth was  restrained  by a  competitive
environment that was more challenging than expected,  less effective advertising
than in fiscal 2002, and a more severe winter than normal.  Red Lobster sales of
$2.43 billion were 4.1 percent above last year. U.S.  same-restaurant  sales for
Red Lobster increased 2.7 percent due to a 3.1 percent increase in average check
and a 0.4 percent decrease in guest counts.  Average annual sales per restaurant
for Red Lobster were $3.7  million in fiscal  2003.  Olive Garden sales of $1.99
billion were 6.8 percent above last year. U.S.  same-restaurant  sales for Olive
Garden  increased 2.2 percent due to a 3.7 percent increase in average check and
a 1.5 percent decrease in guest counts.  Average annual sales per restaurant for
Olive Garden were $3.9 million in fiscal 2003. Red Lobster and Olive Garden have
enjoyed 22 and 35 consecutive quarters of U.S.  same-restaurant sales increases,
respectively.  Bahama  Breeze  generated  sales that  exceeded  $137 million and
opened five new  restaurants  during fiscal 2003. We continue to make changes to
Bahama Breeze that we anticipate will improve its sales,  financial performance,
and overall long-term potential. These changes include testing lunch operations,
creating a new dinner  menu,  and slowing new  restaurant  development  while we
reduce the size of these restaurants and our related capital

                                       1

<PAGE>

investment. Smokey Bones opened 20 new restaurants during fiscal 2003, more than
doubling the total number of Smokey Bones  restaurants open at the end of fiscal
2002. Sales for Smokey Bones in fiscal 2003 were $93 million.

The 9.4  percent  increase  in sales for fiscal  2002  versus the prior year was
primarily due to same-restaurant  sales increases in the U.S. and a net increase
of 43  company-owned  restaurants  since fiscal 2001. Red Lobster sales of $2.34
billion were 7.1 percent above fiscal 2001. U.S.  same-restaurant  sales for Red
Lobster increased 6.2 percent due to a 2.8 percent increase in average check and
a 3.4 percent increase in guest counts.  Average annual sales per restaurant for
Red  Lobster  were $3.5  million in fiscal  2002.  Olive  Garden  sales of $1.86
billion were 9.5 percent above fiscal 2001. U.S. same-restaurant sales for Olive
Garden  increased 6.3 percent due to a 3.1 percent increase in average check and
a 3.2 percent increase in guest counts.  Average annual sales per restaurant for
Olive Garden were $3.9 million in fiscal 2002.  Bahama  Breeze  opened eight new
restaurants during fiscal 2002 and generated sales of over $125 million.  Smokey
Bones opened ten new restaurants  during fiscal 2002 and generated sales of over
$42 million.

COSTS AND EXPENSES

Total costs and expenses  were $4.31  billion in fiscal 2003,  $4.00  billion in
fiscal  2002,  and $3.69  billion in fiscal  2001.  Total costs and  expenses in
fiscal 2003 were 92.5 percent of sales,  an increase  from 91.7 percent of sales
in fiscal 2002.  The  following  analysis of the  components  of total costs and
expenses is presented as a percent of sales.

Food and  beverage  costs as a percent  of sales  decreased  in fiscal  2003 and
fiscal 2002 primarily as a result of lower product cost,  pricing  changes,  and
changes in the mix of sales among our various restaurant  companies.  Restaurant
labor  increased in fiscal 2003  primarily  as a result of a modest  increase in
wage rates,  higher promotional  staffing levels and increased sales volatility,
which made it more difficult to predict staffing needs.  These factors were only
partially  offset by the impact of higher sales.  Restaurant  labor decreased in
fiscal 2002 primarily due to efficiencies resulting from higher sales.

Restaurant  expenses (which include lease,  property tax, credit card,  utility,
workers'  compensation,   insurance,  new  restaurant  pre-opening,   and  other
operating expenses) as a percent of sales increased in fiscal 2003 primarily due
to increased insurance,  new restaurant  pre-opening,  workers' compensation and
utility costs.  These cost increases were only partially offset by higher sales.
Restaurant expenses in fiscal 2002 were higher than fiscal 2001 primarily due to
increased workers'  compensation,  new restaurant  pre-opening,  credit card and
other  operating  expenses,  which were only  partially  offset by lower utility
expenses and higher sales volumes.

Selling, general, and administrative expenses as a percent of sales decreased in
fiscal 2003 primarily due to decreased  bonus costs and the favorable  impact of
higher sales.  These amounts were only partially  offset by increased  marketing
expense  incurred  in  response  to the  challenging  economic  and  competitive
environment.  Selling,  general, and administrative expenses in fiscal 2002 were
less than fiscal 2001  primarily  as a result of decreased  national  television
marketing  expenses  and the  favorable  impact of higher  sales in fiscal 2002.
These  amounts  were  partially  offset  by  our  fiscal  2002  donation  to the
restaurant  industry's  Dine Out for  America  benefit  and higher  fiscal  2002
donations to the Darden Restaurants, Inc. Foundation.

Depreciation  and  amortization  expense  increased  in  fiscal  2003  and  2002
primarily as a result of new  restaurant and remodel  activity,  which were only
partially offset by the favorable impact of higher sales.

Net  interest  expense in fiscal 2003 was  comparable  to fiscal 2002  primarily
because increased interest expense associated with higher average debt levels in
fiscal 2003 was offset by the favorable  impact of higher fiscal 2003 sales. Net
interest  expense  increased in fiscal 2002 primarily due to increased  interest
expense  associated  with higher  average debt levels,  which was only partially
offset by the impact of higher fiscal 2002 sales.

Pre-tax  restructuring credits of $0.4 million and $2.6 million were recorded in
fiscal  2003 and 2002,  respectively.  The  credits  resulted  from  lower  than
projected  costs of lease  terminations  in  connection  with  our  fiscal  1997
restructuring.  No restructuring  credit was recognized  during fiscal 2001. All
fiscal 1997 restructuring actions have been completed as of May 25, 2003.

INCOME TAXES

The  effective  income  tax  rates for  fiscal  2003,  2002,  and 2001 were 33.2
percent,  34.6  percent,  and 34.6 percent,  respectively.  The rate decrease in
fiscal 2003 was  primarily a result of ongoing tax  liability  adjustments  that
were made as a result of  information  that became  available in fiscal 2003 and
lower fiscal 2003 pre-tax  earnings.  The  comparability of fiscal 2002 and 2001
effective rates was primarily a result of increased tax expense  associated with
higher fiscal 2002 pre-tax  earnings which was offset by fiscal 2002  deductions
that were not available in fiscal 2001.

                                       2

<PAGE>


NET EARNINGS AND NET EARNINGS PER SHARE

Net  earnings  for  fiscal  2003 were $232  million  ($1.31 per  diluted  share)
compared  with net earnings  for fiscal 2002 of $238 million  ($1.30 per diluted
share) and net  earnings  for fiscal  2001 of $197  million  ($1.06 per  diluted
share).

Net earnings for fiscal 2003  decreased 2.3 percent and diluted net earnings per
share  increased  0.8  percent,  compared to fiscal  2002.  The  decrease in net
earnings  was  primarily  due  to  increases  in  restaurant  labor,  restaurant
expenses, and depreciation and amortization expenses,  which were only partially
offset by the impact of higher  sales.  The increase in diluted net earnings per
share is due to a  reduction  in the average  diluted  shares  outstanding  from
fiscal 2002 to fiscal 2003 because of our  continuing  repurchase  of our common
stock.

Net earnings and diluted net earnings per share for fiscal 2002  increased  20.7
percent and 22.6 percent, respectively, compared to fiscal 2001. The increase in
both net  earnings  and  diluted net  earnings  per share was  primarily  due to
increases  in sales at both Red Lobster and Olive  Garden and  decreases in food
and  beverage  costs and  restaurant  labor as a percent of sales.  Diluted  net
earnings  per share also  reflected a reduction  in the average  diluted  shares
outstanding due to our share repurchase activities.

SEASONALITY

Our sales volumes fluctuate seasonally.  During fiscal 2003, 2002, and 2001, our
sales were  highest in the spring,  lowest in the fall,  and  comparable  during
winter and summer. Holidays,  severe weather, storms, and similar conditions may
impact  sales  volumes  seasonally  in some  operating  regions.  Because of the
seasonality  of our  business,  results  for any  quarter  are  not  necessarily
indicative of the results that may be achieved for the full fiscal year.

IMPACT OF INFLATION

We do not believe  inflation had a significant  overall effect on our operations
during fiscal 2003, 2002, and 2001. We believe we have historically been able to
pass on  increased  operating  costs  through  menu  price  increases  and other
strategies.

CRITICAL ACCOUNTING POLICIES

We prepare our consolidated  financial  statements in conformity with accounting
principles  generally accepted in the United States of America.  The preparation
of these financial statements requires us to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent assets and liabilities at the date of the financial  statements,  and
the reported  amounts of revenues and expenses during the reporting  period (see
Note 1 to our consolidated  financial  statements).  Actual results could differ
from those estimates.

Critical accounting policies are those we believe are both most important to the
portrayal of our financial condition and operating results, and require our most
difficult,  subjective  or complex  judgments,  often as a result of the need to
make  estimates  about the  effect of  matters  that are  inherently  uncertain.
Judgments and  uncertainties  affecting the  application  of those  policies may
result in materially different amounts being reported under different conditions
or using different  assumptions.  We consider the following  policies to be most
critical in  understanding  the  judgments  that are involved in  preparing  our
consolidated financial statements.

Land, Buildings, and Equipment

Land,   buildings,   and  equipment  are  recorded  at  cost  less   accumulated
depreciation.  Building  components are depreciated  over estimated useful lives
ranging  from  seven to 40  years  using  the  straight-line  method.  Leasehold
improvements,  which are a component of buildings, are amortized over the lesser
of the lease term or the estimated  useful lives of the related assets using the
straight-line  method.  Equipment is  depreciated  over  estimated  useful lives
ranging from three to ten years also using the straight-line method. Accelerated
depreciation methods are generally used for income tax purposes.

Our accounting  policies  regarding land,  buildings,  and equipment,  including
leasehold  improvements,  include our judgments  regarding the estimated  useful
lives of these assets,  the residual  values to which the assets are depreciated
or amortized,  and the determination as to what constitutes  enhancing the value
of or increasing the life of existing assets.  These judgments and estimates may
produce materially  different amounts of reported  depreciation and amortization
expense if different  assumptions were used. As discussed  further below,  these
judgments  may also impact our need to  recognize  an  impairment  charge on the
carrying amount of these assets as the cash flows associated with the assets are
realized.

                                       3

<PAGE>

Impairment of Long-Lived Assets

Land, buildings,  and equipment and certain other assets,  including capitalized
software costs and liquor licenses,  are reviewed for impairment whenever events
or changes in  circumstances  indicate that the carrying  amount of an asset may
not be recoverable.  Recoverability of assets to be held and used is measured by
a comparison  of the carrying  amount of the assets to the future net cash flows
expected to be generated by the assets.  If these  assets are  determined  to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeds their fair value.  Fair value is generally
determined based on appraisals or sales prices of comparable assets.  Restaurant
sites and certain  other  assets to be disposed of are  reported at the lower of
their carrying amount or fair value,  less estimated  costs to sell.  Restaurant
sites and certain other assets to be disposed of are included in assets held for
disposal when certain  criteria are met. These criteria  include the requirement
that the  likelihood  of disposing of these assets  within one year is probable.
Those  assets  whose  disposal is not  probable  within one year remain in land,
buildings, and equipment until their disposal is probable within one year.

The judgments we make related to the expected useful lives of long-lived  assets
and our  ability to realize  undiscounted  cash flows in excess of the  carrying
amounts of these assets are affected by factors such as the ongoing  maintenance
and improvements of the assets,  changes in economic conditions,  and changes in
usage or operating performance. As we assess the ongoing expected cash flows and
carrying amounts of our long-lived assets,  significant adverse changes in these
factors could cause us to realize a material impairment charge.

Self-Insurance Reserves

We  self-insure  a  significant  portion of expected  losses  under our workers'
compensation,   employee  medical,  and  general  liability  programs.   Accrued
liabilities  have been recorded  based on our estimates of the ultimate costs to
settle incurred claims, both reported and not yet reported.

Our accounting policies regarding  self-insurance programs include our judgments
and  independent  actuarial  assumptions  regarding  economic  conditions,   the
frequency  or  severity  of claims  and claim  development  patterns,  and claim
reserve,  management,  and settlement practices.  Unanticipated changes in these
factors may produce materially different amounts of reported expense under these
programs.

Income Taxes

We  estimate  certain  components  of our  provision  for  income  taxes.  These
estimates include, among other items, effective rates for state and local income
taxes,  allowable  tax  credits  for items  such as taxes paid on  reported  tip
income, estimates related to depreciation and amortization expense allowable for
tax purposes, and the tax deductibility of certain other items.

Our estimates are based on the best  available  information  at the time that we
prepare the provision.  We generally file our annual income tax returns  several
months  after our fiscal  year-end.  Income tax  returns are subject to audit by
federal,  state,  and local  governments,  generally years after the returns are
filed.  These  returns  could be subject to material  adjustments  or  differing
interpretations of the tax laws.

LIQUIDITY AND CAPITAL RESOURCES

Cash flows  generated  from operating  activities  provide us with a significant
source of  liquidity.  Since  substantially  all our sales are for cash and cash
equivalents,  and accounts  payable are generally due in five to 30 days, we are
able to carry current  liabilities in excess of current  assets.  In addition to
cash flows from  operations,  we use a combination  of long-term and  short-term
borrowings to fund our capital needs.

We manage our business and our financial  ratios to maintain an investment grade
bond rating,  which allows access to financing at reasonable  costs.  Currently,
our publicly issued long-term debt carries "Baa1" (Moody's  Investors  Service),
"BBB+" (Standard & Poor's) and "BBB+" (Fitch) ratings.  Our commercial paper has
ratings of "P-2"  (Moody's  Investors  Service),  "A-2"  (Standard & Poor's) and
"F-2"  (Fitch).  These  ratings are only  accurate as of the date of this annual
report and have been  obtained  with the  understanding  that Moody's  Investors
Service,  Standard & Poor's,  and Fitch will  continue to monitor our credit and
make future  adjustments to these ratings to the extent  warranted.  The ratings
may be changed, superseded, or withdrawn at any time.

Our  commercial  paper  program  serves  as our  primary  source  of  short-term
financing.  As of May 25, 2003, there were no borrowings  outstanding  under the
program.  To support our  commercial  paper program,  we have a credit  facility
under a Credit  Agreement dated October 29, 1999, as amended,  with a consortium
of banks, including

                                       4

<PAGE>

Wachovia Bank, N.A., as  administrative  agent,  under which we can borrow up to
$300 million. The credit facility allows us to borrow at interest rates based on
the prime  rate,  LIBOR,  or a  competitively  bid rate among the members of the
lender consortium,  at our option, and on our credit rating. The credit facility
expires on  October  29,  2004,  and  contains  various  restrictive  covenants,
including a leverage test that  requires us to maintain a ratio of  consolidated
total debt to consolidated total  capitalization of less than 0.55 to 1.00 and a
limitation of $25 million on priority debt, subject to certain  exceptions.  The
credit  facility does not,  however,  contain a prohibition  on borrowing in the
event  of a  ratings  downgrade  or a  material  adverse  change.  None of these
covenants are expected to impact our liquidity or capital  resources.  As of May
25,  2003,  we were  in  compliance  with  all  covenants  and no  amounts  were
outstanding under the credit facility.

At May 25, 2003, our long-term debt consisted  principally  of: (1) $150 million
of unsecured  8.375 percent senior notes due in September 2005, (2) $150 million
of  unsecured  6.375  percent  notes due in February  2006,  (3) $150 million of
unsecured 5.75 percent  medium-term  notes due in March 2007, (4) $75 million of
unsecured 7.45 percent  medium-term notes due in April 2011, (5) $100 million of
unsecured  7.125 percent  debentures due in February 2016, and (6) an unsecured,
variable  rate,  $34  million  commercial  bank loan due in  December  2018 that
supports two loans from us to the Employee  Stock  Ownership Plan portion of the
Darden Savings Plan.  Through a shelf  registration  on file with the Securities
and Exchange  Commission (SEC), we may issue up to an additional $125 million of
unsecured  debt  securities  from  time to time.  The debt  securities  may bear
interest at either fixed or floating rates,  and may have maturity dates of nine
months or more after issuance.

A summary of our contractual  obligations  and commercial  commitments as of May
25, 2003, is as follows (in thousands):
<TABLE>
<CAPTION>

-------------------------- -------------------------------------------------------------------------------------------
                                                             Payments Due by Period
-------------------------- -------------------------------------------------------------------------------------------
-------------------------- --------------- ------------------ ----------------- ------------------- ------------------
<S>                          <C>               <C>                <C>               <C>                 <C>
       Contractual                             Less than            2-3                4-5               After 5
       Obligations             Total            1 Year             Years              Years               Years
-------------------------- --------------- ------------------ ----------------- ------------------- ------------------
-------------------------- --------------- ------------------ ----------------- ------------------- ------------------
Long-term debt (1)             $659,430        $     --           $300,000          $150,000            $209,430
-------------------------- --------------- ------------------ ----------------- ------------------- ------------------
-------------------------- --------------- ------------------ ----------------- ------------------- ------------------
Operating leases                327,921          55,938             97,192            72,170             102,621
-------------------------- --------------- ------------------ ----------------- ------------------- ------------------
-------------------------- --------------- ------------------ ----------------- ------------------- ------------------
Total contractual cash
      obligations              $987,351         $55,938           $397,192          $222,170            $312,051
-------------------------- --------------- ------------------ ----------------- ------------------- ------------------
</TABLE>

<TABLE>
<CAPTION>

-------------------------- -------------------------------------------------------------------------------------------
                                                   Amount of Commitment Expiration per Period
-------------------------- -------------------------------------------------------------------------------------------
-------------------------- --------------- ------------------ ------------------ ----------------- -------------------
<S>                       <C>                 <C>                <C>               <C>                <C>
                           Total Amounts
    Other Commercial         Committed         Less than             2-3               4-5               Over 5
       Commitments                              1 Year              Years             Years              Years
-------------------------- --------------- ------------------ ------------------ ----------------- -------------------
-------------------------- --------------- ------------------ ------------------ ----------------- -------------------
Trade letters of credit        $  8,301        $  8,301          $      --          $      --         $      --
-------------------------- --------------- ------------------ ------------------ ----------------- -------------------
-------------------------- --------------- ------------------ ------------------ ----------------- -------------------
Standby letters of
     credit (2)                  48,945          48,945                 --                 --                --
-------------------------- --------------- ------------------ ------------------ ----------------- -------------------
-------------------------- --------------- ------------------ ------------------ ----------------- -------------------
Guarantees (3)                    4,254             687              1,163              1,150             1,254
-------------------------- --------------- ------------------ ------------------ ----------------- -------------------
-------------------------- --------------- ------------------ ------------------ ----------------- -------------------
Other                             2,250           1,000              1,250                 --                --
-------------------------- --------------- ------------------ ------------------ ----------------- -------------------
-------------------------- --------------- ------------------ ------------------ ----------------- -------------------
Total commercial
     commitments                $63,750         $58,933             $2,413             $1,150            $1,254
-------------------------- --------------- ------------------ ------------------ ----------------- -------------------
<FN>

1)   Excludes issuance discount of $1,344.
2)   Includes letters of credit for $41,442 of workers' compensation and general
     liabilities accrued in our consolidated financial statements; also includes
     letters of credit  for $6,091 of lease  payments  included  in  contractual
     operating  lease  obligation  payments noted above.
3)   Consists solely of guarantees associated with sub-leased properties. We are
     not aware of any  non-performance  under these sub-lease  arrangements that
     would  result in us having to perform in  accordance  with the terms of the
     guarantees.
</FN>
</TABLE>

Our  fixed-charge  coverage ratio,  which measures the number of times each year
that we earn  enough to cover our fixed  charges,  amounted to 6.0 times and 6.8
times at May 25, 2003,  and May 26,  2002,  respectively.  Our adjusted  debt to
adjusted  total  capital  ratio  (which  includes  6.25  times the total  annual
restaurant  minimum rent ($48.1  million and $43.1  million for the fiscal years
ended May 25,  2003,  and May 26, 2002,  respectively)  and 3.00 times the total
annual restaurant  equipment minimum rent ($5.7 million and $8.4 million for the
fiscal years ended May 25, 2003 and May 26, 2002, respectively) as components of
adjusted debt and adjusted  total  capital) was 45 percent and 46 percent at May
25, 2003, and May 26, 2002,  respectively.  We use the lease-debt  equivalent in
our adjusted  debt to adjusted  total  capital ratio as we believe its inclusion
better represents the optimal

                                       5

<PAGE>


capital  structure that we target from period to period.  Based on these ratios,
we believe our financial  condition is strong.  The  composition  of our capital
structure is shown in the following table.
<TABLE>
<CAPTION>

(In millions, except ratios)                                                May 25, 2003          May 26, 2002
--------------------------------------------------------------------------------------------------------------------
CAPITAL STRUCTURE
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>                    <C>
Long-term debt                                                               $   658                $  662
Stockholders' equity                                                           1,196                 1,129
--------------------------------------------------------------------------------------------------------------------
Total capital                                                                 $1,854                $1,791
====================================================================================================================
ADJUSTMENTS TO CAPITAL
--------------------------------------------------------------------------------------------------------------------
Long-term debt                                                               $   658                $  662
Lease-debt equivalent                                                            318                   295
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Adjusted debt                                                                $   976                $  957
Stockholders' equity                                                           1,196                 1,129
--------------------------------------------------------------------------------------------------------------------
Adjusted total capital                                                        $2,172                $2,086
====================================================================================================================
====================================================================================================================
CAPITAL STRUCTURE RATIOS
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Debt to total capital ratio                                                       36%                   37%
Adjusted debt to adjusted total capital ratio                                     45%                   46%
====================================================================================================================
</TABLE>


Our Board of Directors  has  authorized  us to  repurchase  up to 115.4  million
shares of our common stock. Net cash flows used in financing activities included
our  repurchase  of 10.7 million  shares of our common stock for $213 million in
fiscal 2003  compared to 9.0 million  shares for $209 million in fiscal 2002 and
12.7 million shares for $177 million in fiscal 2001. As of May 25, 2003, a total
of 98.5  million  shares  have been  repurchased  under the  authorization.  The
repurchased  common stock is reflected as a reduction of  stockholders'  equity.
Net cash flows used in financing  activities  also  included  dividends  paid to
stockholders of $14 million,  $9 million,  and $9 million in fiscal 2003,  2002,
and 2001, respectively.

Net cash  flows  used in  investing  activities  included  capital  expenditures
incurred  principally for building new  restaurants,  replacing  equipment,  and
remodeling  existing  restaurants.  Capital  expenditures  were $423  million in
fiscal 2003, compared to $318 million in fiscal 2002, and $355 million in fiscal
2001.  The  increased  expenditures  in  fiscal  2003  resulted  primarily  from
increased  spending  associated with building more new restaurants and replacing
equipment.  The reduced  expenditures  in fiscal 2002 resulted  primarily from a
reduction in spending associated with building new restaurants. We estimate that
our fiscal 2004 capital expenditures will approximate $400 million.

Net cash flows provided by operating  activities for fiscal 2003 also included a
$20 million contribution to our defined benefit pension plans, which enabled the
plans to  maintain a fully  funded  status as of the plans'  February  28,  2003
annual  valuation  date. Our defined benefit and other  post-retirement  benefit
costs and liabilities  are calculated  using various  actuarial  assumptions and
methodologies prescribed under the Financial Accounting Standards Board's (FASB)
Statement  of  Financial   Accounting   Standards  (SFAS)  No.  87,  "Employers'
Accounting for Pensions" and No. 106, "Employers'  Accounting for Postretirement
Benefits Other Than Pensions".  We use certain  assumptions  including,  but not
limited to, the selection of a discount rate,  expected long-term rate of return
on plan assets,  and expected  health care cost trend rates. We set the discount
rate  assumption  annually  for each plan at its  valuation  date to reflect the
yield of high quality fixed-income debt instruments, with lives that approximate
the maturity of the plan  benefits.  As of May 25, 2003,  our discount  rate was
6.25 percent.  The expected  long-term  rate of return on plan assets and health
care cost trend rates are based upon several  factors,  including our historical
assumptions  compared  with  actual  results,  an  analysis  of  current  market
conditions,  asset allocations,  and the views of leading financial advisers and
economists.  Based on our recent analysis, we lowered our defined benefit plans'
expected  long-term  rate of return on plan  assets  for  fiscal  2004 from 10.4
percent  to 9.0  percent.  The change in our  defined  benefit  plans'  expected
long-term  rate of return on plan assets will  decrease  earnings  before income
taxes by  approximately  $2  million in fiscal  2004.  As of May 25,  2003,  our
expected  health care costs trend rates ranged from 12.0 percent to 13.0 percent
for fiscal 2004, depending on the medical service category.  The rates gradually
decrease to 5.0 percent through fiscal 2011 and remain at that level thereafter.

The  expected  long-term  rate of return  on plan  assets  component  of our net
periodic  benefit cost is calculated based on the  market-related  value of plan
assets.  Our target asset  allocation  is 35 percent U.S.  equities,  30 percent
high-quality,  long-duration  fixed-income securities,  15 percent international
equities,  10 percent private  equities,  and 10 percent real assets. We monitor
our actual asset allocation to ensure that it approximates our target allocation
and believe that our long-term asset allocation will continue to approximate our
target  allocation.  Our  historical  ten-year  rate of return  on plan  assets,
calculated using the geometric method average of returns,  is approximately  9.4
percent.

We have an  unrecognized  net actuarial  loss for the defined  benefit plans and
post-retirement  benefit plan as of May 25, 2003, of $80 million and $6 million,
respectively.  The  unrecognized  net actuarial loss  represents  changes in the

                                       6

<PAGE>

amount of the  projected  benefit  obligation  and plan  assets  resulting  from
differences in the assumptions used and actual  experience.  The amortization of
the  unrecognized  net actuarial  loss component of our fiscal 2004 net periodic
benefit cost for the defined benefit plans and  post-retirement  benefit plan is
expected to be approximately $4 million and $0.3 million, respectively.

We believe our defined benefit and post-retirement  benefit plan assumptions are
appropriate based upon the factors discussed above.  However,  other assumptions
could also be reasonably  applied that could differ from the assumptions used. A
quarter  percentage point change in the defined benefit plans' discount rate and
the expected  long-term rate of return on plan assets would increase or decrease
earnings before income taxes by $0.6 million and $0.4 million,  respectively.  A
quarter  percentage  point change in our  post-retirement  benefit plan discount
rate would increase or decrease  earnings  before income taxes by less than $0.1
million.  If the health care cost trend rates were to be  increased or decreased
by one percentage  point each future year, the aggregate of the service cost and
interest  cost  components  of net periodic  post-retirement  benefit cost would
change by $0.3 million.  These changes in  assumptions  would not  significantly
impact our funding requirements.

We are not aware of any  trends or  events  that  would  materially  affect  our
capital requirements or liquidity. We believe that our internal  cash-generating
capabilities and borrowings available under our shelf registration for unsecured
debt securities and short-term  commercial paper program should be sufficient to
finance our capital expenditures,  stock repurchase program, and other operating
activities through fiscal 2004.

FINANCIAL CONDITION

Our current assets of $326 million at May 25, 2003,  decreased from $443 million
at May 26, 2002. The decrease resulted primarily from decreases in cash and cash
equivalents  of $104  million and  short-term  investments  of $10 million  that
resulted  principally from the short-term  investment of proceeds  received from
the March 2002 medium-term debt issuance.

Other assets of $182 million at May 25, 2003, increased from $159 million at May
26,  2002,  primarily  as a result of the $20  million  funding  of our  defined
benefit pension plans during fiscal 2003.

Current liabilities of $640 million at May 25, 2003, increased from $601 million
at May 26, 2002,  primarily as a result of increases in accounts  payable of $16
million and unearned  revenues of $16 million.  The increase in accounts payable
is primarily due to the timing of our  inventory  purchases at the end of fiscal
2003. The increase in unearned  revenues is primarily due to an increase in gift
card sales during fiscal 2003.

Net non-current deferred income tax liabilities of $151 million at May 25, 2003,
increased  from $118 million at May 26,  2002,  primarily as a result of current
income tax deductions for certain capitalized  software costs,  smallwares,  and
equipment.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to a variety of market risks,  including fluctuations in interest
rates,  foreign currency  exchange rates, and commodity  prices.  To manage this
exposure,  we periodically  enter into interest rate, foreign currency exchange,
and commodity  instruments for other than trading purposes (see Notes 1 and 7 of
the Notes to Consolidated Financial Statements).

We use the  variance/covariance  method  to  measure  value at risk,  over  time
horizons ranging from one week to one year, at the 95 percent  confidence level.
As of May 25, 2003, our potential  losses in future net earnings  resulting from
changes in foreign currency  exchange rate instruments,  commodity  instruments,
and floating rate debt interest rate  exposures  were  approximately  $1 million
over a period of one year.  The value at risk from an increase in the fair value
of all of our  long-term  fixed  rate  debt,  over a  period  of one  year,  was
approximately  $24  million.  The fair  value of our  long-term  fixed rate debt
during fiscal 2003 averaged $681 million,  with a high of $706 million and a low
of $645  million.  Our interest rate risk  management  objective is to limit the
impact of interest  rate  changes on  earnings  and cash flows by  targeting  an
appropriate mix of variable and fixed rate debt.

FUTURE APPLICATION OF ACCOUNTING STANDARDS

In June 2001,  the FASB issued SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations".  SFAS No. 143 establishes accounting standards for the recognition
and  measurement of an asset  retirement  obligation  and our  associated  asset
retirement  cost. It also  provides  accounting  guidance for legal  obligations
associated with the retirement of tangible  long-lived  assets.  SFAS No. 143 is
effective for financial  statements issued for fiscal years

                                       7

<PAGE>

beginning  after June 15, 2002.  We adopted SFAS No. 143 in the first quarter of
fiscal 2004. Adoption of SFAS No. 143 did not materially impact our consolidated
financial statements.

In April 2003,  the FASB issued SFAS No. 149,  "Amendment  to  Statement  133 on
Derivative  Instruments  and  Hedging  Activities".  SFAS  No.  149  amends  and
clarifies the financial  accounting  and reporting for  derivative  instruments,
including certain derivative  instruments  embedded in other contracts,  and for
hedging  activities under SFAS No. 133,  "Accounting for Derivative  Instruments
and Hedging Activities".  This statement is effective for hedging  relationships
designated and contracts  entered into or modified  after June 30, 2003,  except
for the provisions that relate to SFAS No. 133 implementation issues, which will
continue to be applied in accordance with their  respective  dates.  Adoption of
SFAS No. 149 did not materially impact our consolidated financial statements.

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with  Characteristics of both Liabilities and Equity".  SFAS No. 150
establishes  accounting  standards for the  classification  and  measurement  of
certain  financial  instruments  with  characteristics  of both  liabilities and
equity.  It  requires  certain   financial   instruments  that  were  previously
classified as equity to be classified as assets or liabilities.  SFAS No. 150 is
effective for financial instruments entered into or modified after May 31, 2003,
and  otherwise  is  effective  at the  beginning  of the  first  interim  period
beginning  after June 15,  2003.  Adoption  of SFAS No. 150 is not  expected  to
materially impact our consolidated financial statements.

FORWARD-LOOKING STATEMENTS

Certain  statements  included in this report and other  materials filed or to be
filed by us with the SEC (as well as  information  included  in oral or  written
statements  made  or  to  be  made  by  us)  may  contain  statements  that  are
forward-looking within the meaning of Section 27A of the Securities Act of 1933,
as amended,  and Section 21E of the Securities Exchange Act of 1934, as amended.
Words  or  phrases  such  as  "believe",  "plan",  "will",  "expect",  "intend",
"estimate",  and  "project",  and similar  expressions  are intended to identify
forward-looking statements. All of these statements, and any other statements in
this report that are not  historical  facts,  are  forward-looking.  Examples of
forward-looking   statements  include,  but  are  not  limited  to,  projections
regarding  expected casual dining sales growth; the ability of the casual dining
segment to weather economic downturns;  demographic trends; our expansion plans,
capital  expenditures,  and business development  activities;  and our long-term
goals of increasing market share,  expanding  margins on incremental  sales, and
earnings  growth.  These  forward-looking  statements  are based on  assumptions
concerning important factors,  risks, and uncertainties that could significantly
affect  anticipated  results in the future  and,  accordingly,  could  cause the
actual results to differ materially from those expressed in the  forward-looking
statements. These factors, risks, and uncertainties include, but are not limited
to:

o    the  highly  competitive  nature  of the  restaurant  industry,  especially
     pricing, service, location, personnel, and type and quality of food;
o    economic,  market,  and other conditions,  including a protracted  economic
     slowdown or worsening economy,  industry-wide cost pressures, weak consumer
     demand,  changes  in  consumer  preferences,  demographic  trends,  weather
     conditions,  construction  costs, and the cost and availability of borrowed
     funds;
o    the price and availability of food, labor, utilities,  insurance and media,
     and other costs,  including  seafood  costs,  employee  benefits,  workers'
     compensation insurance, and the general impact of inflation;
o    unfavorable publicity relating to food safety or other concerns,  including
     litigation  alleging poor food  quality,  food-borne  illness,  or personal
     injury;
o    the availability of desirable restaurant locations;
o    government  regulations,  including  those  relating  to zoning,  land use,
     environmental matters, and liquor licenses; and
o    growth  plans,   including  real  estate   development   and   construction
     activities, the issuance and renewal of licenses and permits for restaurant
     development, and the availability of funds to finance growth.

                                       8

<PAGE>



REPORT OF MANAGEMENT RESPONSIBILITIES

The management of Darden  Restaurants,  Inc. is responsible for the fairness and
accuracy of the consolidated  financial statements.  The consolidated  financial
statements have been prepared in accordance with accounting principles generally
accepted in the United States of America,  using management's best estimates and
judgments where appropriate. The financial information throughout this report is
consistent with our consolidated financial statements.

Management  has  established  a  system  of  internal   controls  that  provides
reasonable  assurance that assets are adequately  safeguarded,  and transactions
are  recorded  accurately,   in  all  material  respects,   in  accordance  with
management's   authorization.   We  maintain  a  strong   audit   program   that
independently evaluates the adequacy and effectiveness of internal controls. Our
internal   controls   provide   for   appropriate   separation   of  duties  and
responsibilities, and there are documented policies regarding utilization of our
assets and proper  financial  reporting.  These  formally  stated and  regularly
communicated policies set high standards of ethical conduct for all employees.

The  Audit  Committee  of the Board of  Directors  meets at least  quarterly  to
determine that  management,  internal  auditors,  and  independent  auditors are
properly  discharging  their duties  regarding  internal  control and  financial
reporting. The independent auditors,  internal auditors, and employees have full
and free access to the Audit Committee at any time.

KPMG LLP,  independent  certified public accountants,  are retained to audit our
consolidated financial statements. Their report follows.

/s/ Joe R. Lee
----------------------
Joe R. Lee
Chairman of the Board and Chief Executive Officer


                                       9

<PAGE>




INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Darden Restaurants, Inc.

We  have  audited  the  accompanying   consolidated  balance  sheets  of  Darden
Restaurants, Inc. and subsidiaries as of May 25, 2003, and May 26, 2002, and the
related consolidated statements of earnings, changes in stockholders' equity and
accumulated other comprehensive  income, and cash flows for each of the years in
the  three-year  period  ended  May  25,  2003.  These  consolidated   financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of Darden Restaurants,
Inc. and  subsidiaries  as of May 25, 2003, and May 26, 2002, and the results of
their  operations  and their cash flows for each of the years in the  three-year
period ended May 25, 2003, in conformity  with accounting  principles  generally
accepted in the United States of America.

/s/ KPMG LLP
-------------------------
Orlando, Florida
June 17, 2003

                                       10

<PAGE>


<TABLE>
<CAPTION>


CONSOLIDATED STATEMENTS OF EARNINGS

                                                                                Fiscal Year Ended
--------------------------------------------------------------------------------------------------------------------
(In thousands, except per share data)                            May 25, 2003     May 26, 2002      May 27, 2001
--------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>               <C>              <C>
Sales                                                              $4,654,971        $4,366,911       $3,992,419
Costs and expenses:
   Cost of sales:
         Food and beverage                                          1,449,162         1,384,481        1,302,926
         Restaurant labor                                           1,485,046         1,373,416        1,261,837
         Restaurant expenses                                          700,182           625,710          559,670
--------------------------------------------------------------------------------------------------------------------
             Total cost of sales, excluding restaurant
               depreciation and amortization of $177,127,
               $155,837, and $138,229, respectively                $3,634,390        $3,383,607       $3,124,433
    Selling, general, and administrative                              439,376           420,149          389,240
    Depreciation and amortization                                     191,218           165,829          146,864
    Interest, net                                                      42,597            36,585           30,664
    Restructuring credit                                                 (358)           (2,568)              --
--------------------------------------------------------------------------------------------------------------------
                     Total costs and expenses                      $4,307,223        $4,003,602       $3,691,201
--------------------------------------------------------------------------------------------------------------------
Earnings before income taxes                                          347,748           363,309          301,218
Income taxes                                                          115,488           125,521          104,218
--------------------------------------------------------------------------------------------------------------------
Net earnings                                                       $  232,260        $  237,788       $   197,000
====================================================================================================================
Net earnings per share:
   Basic                                                           $     1.36        $     1.36       $     1.10
   Diluted                                                         $     1.31        $     1.30       $     1.06
====================================================================================================================
Average number of common shares outstanding:
   Basic                                                              170,300           174,700          179,600
   Diluted                                                            177,400           183,500          185,600
====================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.


                                       11

<PAGE>


<TABLE>
<CAPTION>

CONSOLIDATED BALANCE SHEETS

--------------------------------------------------------------------------------------------------------------------
(In thousands)                                                       May 25, 2003              May 26, 2002
--------------------------------------------------------------------------------------------------------------------
                            ASSETS
<S>                                                                  <C>                      <C>
Current assets:
   Cash and cash equivalents                                         $     48,630              $    152,875
   Short-term investments                                                      --                     9,904
   Receivables                                                             29,023                    29,089
   Inventories                                                            173,644                   172,413
   Assets held for disposal                                                    --                     3,868
   Prepaid expenses and other current assets                               25,126                    23,076
   Deferred income taxes                                                   49,206                    52,127
--------------------------------------------------------------------------------------------------------------------
     Total current assets                                             $   325,629               $   443,352
Land, buildings, and equipment                                          2,157,132                 1,926,947
Other assets                                                              181,872                   159,437
--------------------------------------------------------------------------------------------------------------------
            Total assets                                               $2,664,633                $2,529,736
====================================================================================================================
             LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                   $   175,991               $   160,064
   Accrued payroll                                                         85,975                    87,936
   Accrued income taxes                                                    67,975                    68,504
   Other accrued taxes                                                     35,069                    30,474
   Unearned revenues                                                       72,698                    56,632
   Other current liabilities                                              202,201                   197,404
--------------------------------------------------------------------------------------------------------------------
     Total current liabilities                                        $   639,909               $   601,014
Long-term debt                                                            658,086                   662,506
Deferred income taxes                                                     150,537                   117,709
Other liabilities                                                          19,910                    19,630
--------------------------------------------------------------------------------------------------------------------
            Total liabilities                                          $1,468,442                $1,400,859
--------------------------------------------------------------------------------------------------------------------
Stockholders' equity:
   Common stock and surplus, no par value.  Authorized
     500,000 shares; issued 261,463 and 258,426 shares,
     respectively; outstanding 164,950 and 172,135 shares,
     respectively                                                      $1,525,957                $1,474,054
   Preferred stock, no par value.  Authorized 25,000 shares;
     none issued and outstanding                                               --                        --
   Retained earnings                                                      979,443                   760,684
   Treasury stock, 96,513 and 86,291 shares,
     at cost, respectively                                             (1,254,293)               (1,044,915)
   Accumulated other comprehensive income                                 (10,489)                  (12,841)
   Unearned compensation                                                  (42,848)                  (46,108)
   Officer notes receivable                                                (1,579)                   (1,997)
--------------------------------------------------------------------------------------------------------------------
            Total stockholders' equity                                 $1,196,191                $1,128,877
--------------------------------------------------------------------------------------------------------------------
         Total liabilities and stockholders' equity                    $2,664,633                $2,529,736
====================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.


                                       12

<PAGE>


CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND ACCUMULATED OTHER
COMPREHENSIVE INCOME
<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------------------
                                      Common                           Accumulated
                                       Stock                              Other                   Officer      Total
                                        and     Retained    Treasury  Comprehensive  Unearned      Notes    Stockholders'
(In thousands, except per share       Surplus   Earnings     Stock       Income    Compensation  Receivable    Equity
data)
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
<S>                                <C>           <C>        <C>          <C>         <C>             <C>      <C>
Balance at May 28, 2000            $1,351,707    $344,579    $ (666,837) $(12,457)   $(56,522)       $(1,868)   $958,602
-------------------------------------------------------------------------------------------------------------------------
Comprehensive income:
   Net earnings                            --     197,000            --        --          --             --     197,000
   Other comprehensive income, foreign
      currency adjustment                  --         --             --      (645)         --             --        (645)
                                                                                                               ----------
         Total comprehensive income                                                                              196,355
Cash dividends declared ($0.053 per
   share)                                  --      (9,458)           --        --          --             --      (9,458)
Stock option exercises (4,670
   shares)                             33,158         --             --        --          --             --      33,158
Issuance of restricted stock (443
   shares), net of forfeiture
   adjustments                          3,986         --          1,035        --      (5,109)            --         (88)
Earned compensation                        --         --             --        --       4,164             --       4,164
ESOP note receivable repayments            --         --             --        --       8,145             --       8,145
Income tax benefits credited to
   equity                              15,287         --             --        --          --             --      15,287
Purchases of common stock for
   treasury (12,660 shares)                --         --       (176,511)       --          --             --    (176,511)
Issuance of treasury stock under
   Employee Stock Purchase Plan and
   other plans (336 shares)             1,661         --          2,059        --          --             --       3,720
Issuance of officer notes, net             --         --             --        --          --            (56)        (56)
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
Balance at May 27, 2001            $1,405,799    $532,121    $ (840,254) $(13,102)   $(49,322)       $(1,924) $1,033,318
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
Comprehensive income:
   Net earnings                            --     237,788            --        --          --             --     237,788
   Other comprehensive income:
       Foreign currency adjustment         --         --             --       169          --             --         169
       Change in fair value of
       derivatives, net of tax of $234     --         --             --       380          --             --         380
       Minimum pension liability
       adjustment, net of tax benefit
       of $177                             --         --             --      (288)         --             --        (288)
                                                                                                              -----------
        Total comprehensive income                                                                               238,049
Cash dividends declared ($0.053 per
   share)                                  --      (9,225)           --        --          --             --      (9,225)
Stock option exercises (4,310 shares)  34,742         --          1,364        --          --             --      36,106
Issuance of restricted stock (374
   shares), net of forfeiture
   adjustments                          5,666         --            815        --      (6,493)            --         (12)
Earned compensation                        --         --             --        --       4,392             --       4,392
ESOP note receivable repayments            --         --             --        --       5,315             --       5,315
Income tax benefits credited to
   equity                              24,989         --             --        --          --             --      24,989
Purchases of common stock for
   treasury (8,972 shares)                 --         --       (208,578)       --          --             --    (208,578)
Issuance of treasury stock under
   Employee Stock Purchase Plan
   and other plans (290 shares)         2,858         --          1,738        --          --             --       4,596
Issuance of officer notes, net             --         --             --        --          --            (73)        (73)
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
Balance at May 26, 2002            $1,474,054    $760,684   $(1,044,915) $(12,841)   $(46,108)       $(1,997) $1,128,877
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
Comprehensive income:
   Net earnings                            --     232,260           --         --          --             --     232,260
   Other comprehensive income:
       Foreign currency adjustment         --         --            --      2,579          --             --       2,579
       Change in fair value of
        derivatives, net of tax of $0      --         --            --          2          --             --           2
       Minimum pension liability
        adjustment, net of tax benefit
        of $141                            --         --            --       (229)         --             --        (229)
                                                                                                              -----------
       Total comprehensive income                                                                                234,612
Cash dividends declared ($0.080 per
   share)                                  --     (13,501)          --         --          --             --     (13,501)
Stock option exercises (3,133 shares)  27,261         --          1,652        --          --             --      28,913
Issuance of restricted stock (177
   shares), net of forfeiture
   adjustments                          4,429         --            600        --      (5,029)            --          --
Earned compensation                        --         --            --         --       3,579             --       3,579
ESOP note receivable repayments            --         --            --         --       4,710             --       4,710
Income tax benefits credited to
   equity                              16,385         --            --         --          --             --      16,385
Purchases of common stock for
   treasury (10,746 shares)                --         --       (213,311)       --          --             --    (213,311)
Issuance of treasury stock under
   Employee Stock Purchase Plan and
   other plans (280 shares)             3,828         --          1,681        --          --             --       5,509
Issuance of officer notes, net             --         --            --         --          --            418         418
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
Balance at May 25, 2003            $1,525,957    $979,443   $(1,254,293) $(10,489)   $(42,848)       $(1,579) $1,196,191
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements.

                                       13

<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                                Fiscal Year Ended
--------------------------------------------------------------------------------------------------------------------
(In thousands)                                                   May 25, 2003     May 26, 2002      May 27, 2001
--------------------------------------------------------------------------------------------------------------------
<S>                                                               <C>               <C>              <C>
Cash flows - operating activities
   Net earnings                                                    $ 232,260         $ 237,788        $ 197,000
   Adjustments to reconcile net earnings to cash flows:
     Depreciation and amortization                                   191,218           165,829          146,864
     Asset impairment charge                                           4,876                --               --
     Amortization of unearned compensation and loan costs              6,901             7,578            7,031
     Change in current assets and liabilities                         36,046            49,604           41,740
     Change in other liabilities                                         280              (619)            (642)
     Contribution to defined benefit pension plans                   (20,000)               --               --
     Loss on disposal of land, buildings, and equipment                2,456             1,803            1,559
     Change in cash surrender value of trust-owned life
          insurance                                                    2,441               743               --
     Deferred income taxes                                            35,749            22,800           11,750
     Income tax benefits credited to equity                           16,385            24,989           15,287
     Non-cash restructuring credit                                      (358)           (2,568)              --
     Non-cash compensation expense                                       758                --               --
     Other, net                                                          280               195              (19)
--------------------------------------------------------------------------------------------------------------------
         Net cash provided by operating activities                 $ 509,292         $ 508,142        $ 420,570
--------------------------------------------------------------------------------------------------------------------
Cash flows - investing activities
   Purchases of land, buildings, and equipment                      (423,273)         (318,392)        (355,139)
   Increase in other assets                                           (8,163)          (24,741)         (10,730)
   Purchase of trust-owned life insurance                             (6,000)          (31,500)              --
   Proceeds from disposal of land, buildings, and equipment
     (including assets held for disposal)                              7,047            10,741           13,492
   Proceeds from maturities of (purchases of) short-term
     investments                                                      10,000            (9,904)              --
--------------------------------------------------------------------------------------------------------------------
         Net cash used in investing activities                     $(420,389)        $(373,796)       $(352,377)
--------------------------------------------------------------------------------------------------------------------
Cash flows - financing activities
   Proceeds from issuance of common stock                             33,664            40,520           36,701
   Dividends paid                                                    (13,501)           (9,225)          (9,458)
   Purchases of treasury stock                                      (213,311)         (208,578)        (176,511)
   ESOP note receivable repayments                                     4,710             5,315            8,145
   Decrease in short-term debt                                            --           (12,000)        (103,000)
   Proceeds from issuance of long-term debt                               --           149,655          224,454
   Repayment of long-term debt                                        (4,710)           (7,962)         (10,658)
   Payment of loan costs                                                  --            (1,010)          (2,154)
--------------------------------------------------------------------------------------------------------------------
         Net cash used in financing activities                     $(193,148)        $ (43,285)       $ (32,481)
--------------------------------------------------------------------------------------------------------------------
(Decrease) increase in cash and cash equivalents                    (104,245)           91,061           35,712
Cash and cash equivalents - beginning of year                        152,875            61,814           26,102
--------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents - end of year                           $   48,630         $ 152,875        $  61,814
====================================================================================================================
Cash flows from changes in current assets and liabilities
   Receivables                                                            66             3,781           (4,908)
   Inventories                                                        (1,231)          (23,984)          (6,242)
   Prepaid expenses and other current assets                          (8,523)            1,987             (289)
   Accounts payable                                                   15,927             3,205           16,372
   Accrued payroll                                                    (1,961)            5,348            4,783
   Accrued income taxes                                                 (529)           20,806           14,442
   Other accrued taxes                                                 4,595             3,045            1,905
   Unearned revenues                                                  16,066            18,487           24,008
   Other current liabilities                                          11,636            16,929           (8,331)
--------------------------------------------------------------------------------------------------------------------
              Change in current assets and liabilities            $   36,046         $  49,604        $  41,740
====================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       14
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands, except per share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Operations and Principles of Consolidation
The  consolidated   financial   statements  include  the  operations  of  Darden
Restaurants,  Inc. and its wholly owned subsidiaries. We own and operate various
restaurant   concepts  located  in  the  United  States  and  Canada,   with  no
franchising.   We  also  license  33  restaurants  in  Japan.   All  significant
intercompany balances and transactions have been eliminated in consolidation.

Fiscal Year
Our fiscal year ends on the last Sunday in May. Fiscal 2003, 2002, and 2001 each
consisted of 52 weeks of operation.

Cash Equivalents
Cash equivalents  include highly liquid investments such as U.S. treasury bills,
taxable  municipal  bonds,  and money market  funds that have  maturity of three
months  or  less.  Amounts  receivable  from  credit  card  companies  are  also
considered cash  equivalents  because they are both short-term and highly liquid
in nature and are  typically  converted  to cash within  three days of the sales
transaction.

Short-Term Investments
Short-term  investments  included a U.S.  treasury bill that was classified as a
held-to-maturity security because we had the positive intent and ability to hold
the security to maturity.  The  security  was valued at  amortized  cost,  which
approximated fair value, and matured in September 2002.

Inventories
Inventories are valued at the lower of weighted-average cost or market.

Land, Buildings, and Equipment
Land,   buildings,   and  equipment  are  recorded  at  cost  less   accumulated
depreciation.  Building  components are depreciated  over estimated useful lives
ranging  from  seven to 40  years  using  the  straight-line  method.  Leasehold
improvements,  which are a component of buildings, are amortized over the lesser
of the lease term or the estimated  useful lives of the related assets using the
straight-line  method.  Equipment is  depreciated  over  estimated  useful lives
ranging from three to ten years also using the straight-line method. Accelerated
depreciation  methods are generally  used for income tax purposes.  Depreciation
and amortization expense associated with land, buildings, and equipment amounted
to  $184,963,   $162,784  and  $145,058,   in  fiscal  2003,   2002,  and  2001,
respectively. In fiscal 2003, 2002, and 2001, we had losses on disposal of land,
buildings, and equipment of $2,456, $1,803, and $1,559, respectively, which were
included in selling, general, and administrative expenses.

Capitalized Software Costs
Capitalized software,  which is a component of other assets, is recorded at cost
less  accumulated  amortization.  Capitalized  software is  amortized  using the
straight-line  method over  estimated  useful  lives  ranging  from three to ten
years.  The cost of  capitalized  software at May 25,  2003,  and May 26,  2002,
amounted to $44,018 and $38,621,  respectively.  Accumulated  amortization as of
May 25,  2003,  and May 26, 2002,  amounted to $9,963 and $5,006,  respectively.
Amortization  expense  associated with capitalized  software amounted to $6,255,
$3,045 and $1,806, in fiscal 2003, 2002, and 2001, respectively.

Trust-Owned Life Insurance
In August 2001, we caused a trust that we previously had established to purchase
life insurance policies covering certain of our officers and other key employees
(trust-owned  life  insurance  or  TOLI).  The  trust  is  the  owner  and  sole
beneficiary  of the TOLI  policies.  The  policies  were  purchased  to offset a
portion of our obligations under our non-qualified  deferred  compensation plan.
The cash  surrender  value of the  policies is included  in other  assets  while
changes  in  cash  surrender  value  are  included  in  selling,   general,  and
administrative expenses.

Liquor Licenses
The costs of obtaining non-transferable liquor licenses that are directly issued
by local  government  agencies for nominal  fees are  expensed as incurred.  The
costs of  purchasing  transferable  liquor  licenses  through  open  markets  in
jurisdictions   with  a  limited  number  of  authorized   liquor  licenses  are
capitalized. Annual liquor license renewal fees are expensed.

                                       15

<PAGE>


Impairment of Long-Lived Assets
Land, buildings,  and equipment and certain other assets,  including capitalized
software costs and liquor licenses,  are reviewed for impairment whenever events
or changes in  circumstances  indicate that the carrying  amount of an asset may
not be recoverable.  Recoverability of assets to be held and used is measured by
a comparison  of the carrying  amount of the assets to the future net cash flows
expected to be  generated  by the assets.  If such assets are  considered  to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeds their fair value.  Fair value is generally
determined  based on  appraisals or sales prices of  comparable  assets.  During
fiscal 2003,  we recorded an asset  impairment  charge of $4,876  related to the
decision  to relocate  and rebuild  certain  restaurants.  Restaurant  sites and
certain  other  assets  to be  disposed  of are  reported  at the lower of their
carrying amount or fair value,  less estimated costs to sell.  Restaurant  sites
and  certain  other  assets to be  disposed  of are  included in assets held for
disposal when certain  criteria are met. These criteria  include the requirement
that the  likelihood  of disposing of these assets  within one year is probable.
Those  assets  whose  disposal is not  probable  within one year remain in land,
buildings,  and  equipment  until their  disposal  is probable  within one year.
During  fiscal 2003, we recorded an asset  impairment  credit of $594 related to
assets sold that were previously  impaired.  All impairment amounts are included
in selling, general, and administrative expenses.

Self-Insurance Reserves
We  self-insure  a  significant  portion of expected  losses  under our workers'
compensation,   employee  medical,  and  general  liability  programs.   Accrued
liabilities  have been recorded  based on our estimates of the ultimate costs to
settle incurred claims, both reported and unreported.

Revenue Recognition
Revenue from restaurant sales is recognized when food and beverage  products are
sold.  Unearned revenues represent our liability for gift cards and certificates
that have been sold but not yet  redeemed  and are  recorded  at their  expected
redemption  value.  When  the gift  cards  and  certificates  are  redeemed,  we
recognize restaurant sales and reduce the deferred liability.

Income Taxes
We provide for federal and state income taxes  currently  payable as well as for
those deferred  because of temporary  differences  between  reporting income and
expenses for financial  statement  purposes versus tax purposes.  Federal income
tax credits are recorded as a reduction of income taxes. Deferred tax assets and
liabilities  are  recognized  for the future tax  consequences  attributable  to
differences  between the financial statement carrying amounts of existing assets
and  liabilities  and their  respective  tax  bases.  Deferred  tax  assets  and
liabilities  are measured  using enacted tax rates  expected to apply to taxable
income in the years in which  those  temporary  differences  are  expected to be
recovered  or settled.  The effect on deferred tax assets and  liabilities  of a
change in tax rates is  recognized  in income in the period  that  includes  the
enactment date.

Income tax benefits  credited to equity relate to tax benefits  associated  with
amounts  that are  deductible  for  income  tax  purposes  but do not affect net
earnings.  These benefits are principally  generated from employee  exercises of
non-qualified stock options and vesting of employee restricted stock awards.

Derivative Instruments and Hedging Activities
We account  for  derivative  financial  instruments  and hedging  activities  in
accordance with the Financial  Accounting  Standards Board's (FASB) Statement of
Financial  Accounting  Standards  (SFAS) No.  133,  "Accounting  for  Derivative
Instruments and Hedging  Activities"  and SFAS No. 138,  "Accounting for Certain
Derivative  Instruments  and Certain  Hedging  Activities - an Amendment of FASB
Statement  No. 133." SFAS No. 133 and SFAS No. 138 require  that all  derivative
instruments be recorded on the balance sheet at fair value. We use financial and
commodities  derivatives to manage interest rate and  commodities  pricing risks
inherent  in our  business  operations.  Our use of  derivative  instruments  is
currently  limited to interest rate hedges and  commodities  futures  contracts.
These  instruments  are structured as hedges of forecasted  transactions  or the
variability  of cash flow to be paid related to a recognized  asset or liability
(cash flow hedges).  No derivative  instruments  are entered into for trading or
speculative  purposes.  All  derivatives  are recognized on the balance sheet at
fair value. On the date the derivative contract is entered into, we document all
relationships  between  hedging  instruments  and hedged  items,  as well as our
risk-management  objective  and  strategy  for  undertaking  the  various  hedge
transactions.  This process includes linking all derivatives  designated as cash
flow hedges to specific assets and liabilities on the consolidated balance sheet
or to specific  forecasted  transactions.  We also formally assess,  both at the
hedge's  inception  and on an ongoing  basis,  whether the  derivatives  used in
hedging transactions are highly effective in offsetting changes in cash flows of
hedged items.

Changes in the fair value of derivatives  that are highly effective and that are
designated  and qualify as cash flow hedges are recorded in other  comprehensive
income  until  earnings  are  affected by the  variability  in cash flows of the

                                       16

<PAGE>

designated  hedged item.  Where  applicable,  we  discontinue  hedge  accounting
prospectively  when it is determined that the derivative is no longer  effective
in offsetting  changes in the cash flows of the hedged item or the derivative is
terminated. Any changes in the fair value of a derivative where hedge accounting
has been discontinued or is ineffective are recognized  immediately in earnings.
Cash flows related to derivatives are included in operating activities.

Pre-Opening Expenses
Non-capital expenditures associated with opening new restaurants are expensed as
incurred.

Advertising
Production costs of commercials and programming are charged to operations in the
fiscal year the  advertising  is first  aired.  The costs of other  advertising,
promotion, and marketing programs are charged to operations in the fiscal period
incurred.  Advertising expense amounted to $203,393,  $187,154, and $177,998, in
fiscal 2003, 2002 and 2001, respectively.

Stock-Based Compensation
SFAS No. 123, "Accounting for Stock-Based Compensation," encourages the use of a
fair-value  method of  accounting  for  stock-based  awards under which the fair
value of stock  options is determined on the date of grant and expensed over the
vesting  period.  As allowed by SFAS No. 123, we have elected to account for our
stock-based  compensation  plans under an intrinsic  value method that  requires
compensation  expense to be recorded only if, on the date of grant,  the current
market price of our common stock  exceeds the exercise  price the employee  must
pay for the stock. Our policy is to grant stock options at the fair market value
of our  underlying  stock at the date of  grant.  Accordingly,  no  compensation
expense has been  recognized  for stock  options  granted under any of our stock
plans because the exercise price of all options granted was equal to the current
market  value of our stock on the grant  date.  Had we  determined  compensation
expense  for our stock  options  based on the fair  value at the  grant  date as
prescribed under SFAS No. 123, our net earnings and net earnings per share would
have  been  reduced  to the pro  forma  amounts  indicated  below:

<TABLE>
<CAPTION>

                                                                   Fiscal  Year
--------------------------------------------------------------------------------------------------------------------
                                                                   2003                  2002                 2001
--------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>                     <C>               <C>
Net  earnings,  as  reported                                    $  232,260              $ 237,788         $ 197,000
  Add:  Stock-based compensation  expense  included in
        reported  net  earnings,  net of related tax effects         2,642                  2,695             2,565
  Deduct:  Total  stock-based  compensation  expense
        determined  under fair value  based  method for all
        awards,  net of related tax effects                        (19,801)               (18,386)          (15,023)
                                                               -----------------------------------------------------
  Pro forma                                                       $215,101              $ 222,097         $ 184,542
                                                               =====================================================
Basic net earnings per share
  As reported                                                   $     1.36              $    1.36          $   1.10
  Pro  forma                                                    $     1.26              $    1.27          $   1.03
  Diluted  net earnings  per share
  As  reported                                                  $     1.31              $    1.30          $   1.06
  Pro forma                                                     $     1.22              $    1.21          $   0.99
====================================================================================================================
</TABLE>

To determine  pro forma net  earnings,  reported net earnings have been adjusted
for compensation expense associated with stock options granted that are expected
to eventually vest.

Restricted  stock and  restricted  stock unit (RSU)  awards  are  recognized  as
unearned  compensation,  a component of stockholders'  equity, based on the fair
market value of our common stock on the award date.  These amounts are amortized
to compensation expense, using the straight-line method, over the vesting period
using  assumed  forfeiture  rates for  different  types of awards.  Compensation
expense is adjusted in future  periods if actual  forfeiture  rates  differ from
initial estimates.

Net Earnings Per Share
Basic net  earnings  per share are  computed  by  dividing  net  earnings by the
weighted-average  number of common shares  outstanding for the reporting period.
Diluted net earnings per share reflect the  potential  dilution that could occur
if  securities  or other  contracts  to issue  common  stock were  exercised  or
converted  into common stock.  Outstanding  stock options issued by us represent
the  only  dilutive  effect   reflected  in  diluted   weighted-average   shares
outstanding. Options do not impact the numerator of the diluted net earnings per
share computation.

Options to purchase  3,952,618 shares,  161,220 shares,  and 3,618,900 shares of
common  stock were  excluded  from the  calculation  of diluted net earnings per
share for fiscal 2003,  2002,  and 2001,  respectively,  because their  exercise
prices exceeded the average market price of common shares for the period.

                                       17

<PAGE>


Comprehensive Income
Comprehensive  income includes net earnings and other comprehensive income items
that are  excluded  from net  earnings  under  accounting  principles  generally
accepted  in the United  States of America.  Other  comprehensive  income  items
include  foreign  currency  translation  adjustments,  the effective  unrealized
portion of changes in the fair value of cash flow hedges, and amounts associated
with minimum pension liability adjustments.

Foreign Currency
The Canadian  dollar is the  functional  currency  for our  Canadian  restaurant
operations.   Assets  and  liabilities   denominated  in  Canadian  dollars  are
translated  into U.S.  dollars using the exchange rates in effect at the balance
sheet date.  Results of operations  are  translated  using the average  exchange
rates  prevailing  throughout  the  period.  Translation  gains and  losses  are
reported as a separate  component of accumulated other  comprehensive  income in
stockholders' equity. Gains (losses) from foreign currency  transactions,  which
amounted to ($105), $33, and $1, are included in the consolidated  statements of
earnings for fiscal 2003, 2002, and 2001 respectively.

Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires us to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements,  and the  reported  amounts  of  revenues  and  expenses  during the
reporting period. Actual results could differ from those estimates.

Segment Reporting
As of May 25, 2003, we operated 1,271 Red Lobster,  Olive Garden, Bahama Breeze,
Smokey Bones BBQ and Seasons 52 restaurants in North America as part of a single
operating segment.  The restaurants  operate  principally in the U.S. within the
casual dining industry,  providing  similar products to similar  customers.  The
restaurants  also  possess  similar  pricing  structures,  resulting  in similar
long-term expected financial performance characteristics. Revenues from external
customers are derived  principally  from food and beverage sales. We do not rely
on any major  customers as a source of revenue.  We believe we meet the criteria
for aggregating our operations into a single reporting segment.

Reclassifications
Certain  reclassifications,  including the reclassification of unearned revenues
from other current liabilities,  have been made to prior year amounts to conform
to current year presentation.

Adoption of New Accounting Standards
In August 2001,  FASB issued SFAS No. 144,  "Accounting  for the  Impairment  or
Disposal  of  Long-Lived   Assets."  SFAS  No.  144  supersedes  SFAS  No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of," and resolves significant implementation issues that had evolved
since the  issuance  of SFAS No.  121.  SFAS No. 144 also  establishes  a single
accounting  model for long-lived  assets to be disposed of by sale. SFAS No. 144
is effective for financial  statements  issued for fiscal years  beginning after
December 15, 2001, and its provisions are generally to be applied prospectively.
We adopted SFAS No. 144 in the first  quarter of fiscal  2003.  Adoption of SFAS
No. 144 did not materially impact our consolidated financial statements.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with  Exit or  Disposal  Activities."  SFAS No.  146  provides  guidance  on the
recognition  and  measurement of liabilities  for costs  associated with exit or
disposal  activities.  SFAS No. 146 is effective for exit or disposal activities
that are initiated after December 31, 2002. We adopted SFAS No. 146 in the third
quarter of fiscal 2003.  Adoption of SFAS No. 146 did not materially  impact our
consolidated financial statements.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure  Requirements for Guarantees,  including  Indirect  Guarantees of
Indebtedness of Others." Interpretation No. 45 supersedes Interpretation No. 34,
"Disclosure  of Indirect  Guarantees  of  Indebtedness  of Others," and provides
guidance on the  recognition  and  disclosures  to be made by a guarantor in its
interim and annual  financial  statements  about its  obligations  under certain
guarantees. The initial recognition and measurement provisions of Interpretation
No. 45 are effective for guarantees  issued or modified after December 31, 2002,
and are to be applied prospectively.  The disclosure  requirements are effective
for financial statements for interim or annual periods ending after December 15,
2002.  We adopted  Interpretation  No. 45 in the third  quarter of fiscal  2003.
Adoption of  Interpretation  No. 45 did not materially  impact our  consolidated
financial statements.

In November 2002, the FASB's Emerging  Issues Task Force (EITF)  discussed Issue
No.  02-16,  "Accounting  by a Reseller for Cash  Consideration  Received from a
Vendor."  Issue  No.  02-16  provides   guidance  on  the  recognition  of  cash
consideration received by a customer from a vendor. The consensus reached by the
EITF in November 2002 is

                                       18

<PAGE>

effective  for  fiscal  periods   beginning  after  December  15,  2002.  Income
statements for prior periods are required to be  reclassified to comply with the
consensus.  We adopted the  consensus  reached in Issue No.  02-16 in the fourth
quarter of fiscal 2003 and its provisions did not have a material  impact on our
consolidated financial statements.

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation-Transition  and  Disclosure."  SFAS No.  148 amends  SFAS No.  123,
"Accounting for Stock-Based  Compensation," and provides  alternative methods of
transition  for a voluntary  change to the fair value based method of accounting
for stock-based employee  compensation.  SFAS No. 148 also amends the disclosure
requirements of SFAS No. 123 to require more prominent and frequent  disclosures
in  financial  statements  about the effects of  stock-based  compensation.  The
transition  guidance  and  annual  disclosure  provisions  of  SFAS  No.148  are
effective for financial statements issued for fiscal years ending after December
15, 2002. The interim disclosure  provisions are effective for financial reports
containing financial statements for interim periods beginning after December 15,
2002. We adopted SFAS No. 148 in the fourth quarter of fiscal 2003.  Adoption of
the  disclosure  requirements  of SFAS No.  148 did not  materially  impact  our
consolidated financial statements.

Future Application of Accounting Standards
In June 2001,  the FASB issued SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations".  SFAS No. 143 establishes accounting standards for the recognition
and  measurement of an asset  retirement  obligation  and its  associated  asset
retirement  cost. It also  provides  accounting  guidance for legal  obligations
associated with the retirement of tangible  long-lived  assets.  SFAS No. 143 is
effective for financial  statements issued for fiscal years beginning after June
15, 2002. We adopted SFAS No. 143 in the first quarter of fiscal 2004.  Adoption
of SFAS No. 143 did not materially impact our consolidated financial statements.

In April 2003,  the FASB issued SFAS No. 149,  "Amendment  to  Statement  133 on
Derivative  Instruments  and  Hedging  Activities".  SFAS  No.  149  amends  and
clarifies the financial  accounting  and reporting for  derivative  instruments,
including  certain  derivative  instruments  embedded in other contracts and for
hedging  activities under SFAS No. 133,  "Accounting for Derivative  Instruments
and Hedging Activities".  This statement is effective for hedging  relationships
designated and contracts  entered into or modified  after June 30, 2003,  except
for the provisions that relate to SFAS No. 133 Implementation Issues, which will
continue to be applied in accordance with their  respective  dates.  Adoption of
SFAS No. 149 did not materially impact our consolidated financial statements.

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with  Characteristics of both Liabilities and Equity".  SFAS No. 150
establishes  accounting  standards for the  classification  and  measurement  of
certain  financial  instruments  with  characteristics  of both  liabilities and
equity.  It  requires  certain   financial   instruments  that  were  previously
classified as equity to be classified as assets or liabilities.  SFAS No. 150 is
effective for financial instruments entered into or modified after May 31, 2003,
and  otherwise  is  effective  at the  beginning  of the  first  interim  period
beginning  after June 15,  2003.  Adoption  of SFAS No. 150 is not  expected  to
materially impact our consolidated financial statements.

NOTE 2 - ACCOUNTS RECEIVABLE

Our accounts  receivable  is primarily  comprised of  receivables  from national
storage and  distribution  companies with which we contract to provide  services
that are billed to us on a per-case  basis.  In connection  with these services,
certain of our inventory  items are conveyed to these  storage and  distribution
companies  to  transfer  ownership  and risk of loss  prior to  delivery  of the
inventory to our  restaurants.  We reacquire  these items when the  inventory is
subsequently delivered to our restaurants.  These transactions do not impact the
consolidated  statements  of earnings.  Receivables  from  national  storage and
distribution  companies amounted to $19,628 and $21,083 at May 25, 2003, and May
26, 2002, respectively.  The allowance for doubtful accounts associated with our
receivables amounted to $330 at both May 25, 2003, and May 26, 2002.

NOTE 3 - RESTRUCTURING ACTIVITIES

In connection  with the closing of certain  restaurant  properties,  we recorded
restructuring  expenses of $70,900 in fiscal 1997. The restructuring  liability,
which is a component of other current liabilities, was established to accrue for
estimated carrying costs of buildings and equipment prior to disposal,  employee
severance costs, lease buy-out  provisions,  and other costs associated with the
restructuring  action.  All restaurant  closings and other activities under this
restructuring action were completed as of May 25, 2003.

During  fiscal 2003 and 2002, we  recognized  restructuring  credits of $358 and
$2,568,  respectively.  The fiscal  2003 and 2002  credits  resulted  from lease
terminations completed on more favorable terms than previously  anticipated.  No
restructuring  expense or credit was charged to operating  results during fiscal
2001.

                                       19

<PAGE>


As of May 25, 2003, $45,438 of carrying,  employee severance,  and lease buy-out
costs  associated with the 1997  restructuring  action had been paid and charged
against  the  restructuring  liability.  A summary  of  restructuring  liability
activity for fiscal 2003 and 2002 is as follows:
<TABLE>
<CAPTION>

                                                                                        Fiscal Year
---------------------------------------------------------------------------- ------------------ --------------------
                                                                                     2003               2002
---------------------------------------------------------------------------- ------------------ --------------------
<S>                                                                                <C>                <C>
Beginning balance                                                                  $ 1,946            $ 5,798
Non-cash adjustments:
     Restructuring credits                                                            (358)            (2,568)
Cash payments:
     Carrying costs and employee severance payments                                   (203)              (860)
     Lease payments including lease buy-outs, net                                   (1,385)              (424)
---------------------------------------------------------------------------- ------------------ --------------------
Ending balance                                                                  $       --            $ 1,946
============================================================================ ================== ====================
</TABLE>

NOTE 4 - LAND, BUILDINGS, AND EQUIPMENT

The components of land, buildings, and equipment are as follows:
<TABLE>
<CAPTION>

                                                                            May 25, 2003          May 26, 2002
--------------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>                   <C>
Land                                                                         $   505,444           $   471,072
Buildings                                                                      1,898,716             1,719,778
Equipment                                                                        922,592               830,404
Construction in progress                                                         195,078               123,987
--------------------------------------------------------------------------------------------------------------------
Total land, buildings, and equipment                                           3,521,830             3,145,241
Less accumulated depreciation                                                 (1,364,698)           (1,218,294)
--------------------------------------------------------------------------------------------------------------------
Net land, buildings, and equipment                                            $2,157,132            $1,926,947
====================================================================================================================
</TABLE>

NOTE 5 - OTHER ASSETS

The components of other assets are as follows:
<TABLE>
<CAPTION>

                                                                            May 25, 2003          May 26, 2002
--------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>                   <C>
Prepaid pension costs                                                          $  68,873             $  48,262
Capitalized software costs, net                                                   34,055                33,615
Trust-owned life insurance                                                        34,316                30,757
Liquor licenses                                                                   21,219                19,405
Prepaid interest and loan costs                                                   14,863                17,895
Miscellaneous                                                                      8,546                 9,503
--------------------------------------------------------------------------------------------------------------------
Total other assets                                                              $181,872              $159,437
====================================================================================================================
</TABLE>

NOTE 6 - LONG-TERM DEBT

The components of long-term debt are as follows:
<TABLE>
<CAPTION>

                                                                            May 25, 2003          May 26, 2002
--------------------------------------------------------------------------------------------------------------------
<C>                                                                           <C>                   <C>
8.375% senior notes due September 2005                                        $  150,000            $  150,000
6.375% notes due February 2006                                                   150,000               150,000
5.75% medium-term notes due March 2007                                           150,000               150,000
7.45% medium-term notes due April 2011                                            75,000                75,000
7.125% debentures due February 2016                                              100,000               100,000
ESOP loan with variable rate of interest (1.64% at May 25,
   2003) due December 2018                                                        34,430                39,140
--------------------------------------------------------------------------------------------------------------------
Total long-term debt                                                             659,430               664,140
Less issuance discount                                                            (1,344)               (1,634)
--------------------------------------------------------------------------------------------------------------------
Total long-term debt less issuance discount                                      658,086               662,506
Less current portion                                                                  --                    --
--------------------------------------------------------------------------------------------------------------------
Long-term debt, excluding current portion                                      $ 658,086             $ 662,506
====================================================================================================================
</TABLE>

                                       20

<PAGE>


In July 2000, we registered  $500,000 of debt securities with the Securities and
Exchange  Commission  (SEC)  using  a shelf  registration  process.  Under  this
process, we may offer, from time to time, up to $500,000 of debt securities.  In
September  2000, we issued  $150,000 of unsecured 8.375 percent senior notes due
in September 2005. The senior notes rank equally with all of our other unsecured
and unsubordinated  debt and are senior in right of payment to all of our future
subordinated debt.

In November 2000, we filed a prospectus  supplement  with the SEC to offer up to
$350,000  of  medium-term  notes  from  time  to  time  as  part  of  the  shelf
registration  process  referred to above.  In April 2001,  we issued  $75,000 of
unsecured  7.45 percent  medium-term  notes due in April 2011. In March 2002, we
issued $150,000 of unsecured 5.75 percent  medium-term  notes due in March 2007.
As of May 25,  2003,  our shelf  registration  provides  for the  issuance of an
additional $125,000 of unsecured debt securities.

In January  1996,  we issued  $150,000 of unsecured  6.375  percent notes due in
February 2006 and $100,000 of unsecured 7.125 percent debentures due in February
2016.  Concurrent with the issuance of the notes and debentures,  we terminated,
and  settled for cash,  interest-rate  swap  agreements  with  notional  amounts
totaling  $200,000,  which  hedged the  movement of interest  rates prior to the
issuance  of the  notes  and  debentures.  The  cash  paid  in  terminating  the
interest-rate  swap agreements is being  amortized to interest  expense over the
life of the notes and  debentures.  The effective  annual  interest rate is 7.57
percent for the notes and 7.82 percent for the debentures,  after  consideration
of loan costs, issuance discounts, and interest-rate swap termination costs.

We also  maintain  a credit  facility  that  expires  in  October  2004,  with a
consortium  of banks  under  which we can  borrow  up to  $300,000.  The  credit
facility  allows us to borrow at  interest  rates  that vary  based on the prime
rate,  LIBOR,  or a  competitively  bid rate  among the  members  of the  lender
consortium,  at our option.  The credit facility  supports our commercial  paper
borrowing program.  We are required to pay a facility fee of 15 basis points per
annum on the average daily amount of loan  commitments  by the  consortium.  The
amount of interest  and the annual  facility  fee are subject to change based on
our  maintenance of certain debt ratings and financial  ratios,  such as maximum
debt to capital ratios. Advances under the credit facility are unsecured. At May
25, 2003,  and May 26, 2002, no borrowings  were  outstanding  under this credit
facility.

The  aggregate  maturities  of long-term  debt for each of the five fiscal years
subsequent to May 25, 2003, and thereafter are $0 in 2004 through 2005, $300,000
in 2006, $150,000 in 2007, $0 in 2008, and $209,430 thereafter.

NOTE 7 - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

We use interest rate related  derivative  instruments  to manage our exposure on
debt instruments,  as well as commodities  derivatives to manage our exposure to
commodity price fluctuations.  By using these instruments,  we expose ourselves,
from time to time, to credit risk and market risk. Credit risk is the failure of
the counterparty to perform under the terms of the derivative contract. When the
fair value of a derivative contract is positive, the counterparty owes us, which
creates  credit  risk for us. We minimize  this  credit  risk by  entering  into
transactions with high quality counterparties. Market risk is the adverse effect
on the value of a financial  instrument  that  results from a change in interest
rates or commodity  prices.  We minimize  this market risk by  establishing  and
monitoring parameters that limit the types and degree of market risk that may be
undertaken.

Futures Contracts and Commodity Swaps
During  fiscal 2003 and 2002,  we entered into futures  contracts  and commodity
swaps to reduce the risk of natural gas and coffee  price  fluctuations.  To the
extent these  derivatives  are effective in offsetting  the  variability  of the
hedged cash flows,  changes in the  derivatives'  fair value are not included in
current earnings but are reported as other comprehensive  income.  These changes
in fair value are subsequently  reclassified  into earnings when the natural gas
and coffee are purchased and used by us in our operations. Net gains (losses) of
$941 and ($276) related to these  derivatives were recognized in earnings during
fiscal  2003 and  2002,  respectively.  It is  expected  that  $495 of net gains
related  to  these  contracts  at  May  25,  2003,  will  be  reclassified  from
accumulated  other  comprehensive   income  into  food  and  beverage  costs  or
restaurant  expenses during the next 12 months.  To the extent these derivatives
are not  effective,  changes in their fair value are  immediately  recognized in
current earnings.  Outstanding  derivatives are included in other current assets
or other current liabilities.

As of May 25,  2003,  the  maximum  length of time over which we are hedging our
exposure to the variability in future natural gas cash flows is 12 months. As of
May 25,  2003,  we are not hedging our  exposure  to the  variability  in future
coffee cash flows.  No gains or losses were  reclassified  into earnings  during
fiscal 2003 or 2002 as a result of the  discontinuance of natural gas and coffee
cash flow hedges.

                                       21

<PAGE>


Interest Rate Lock Agreement
During  fiscal 2002,  we entered into a treasury  interest  rate lock  agreement
(treasury  lock) to  hedge  the risk  that  the  cost of a  future  issuance  of
fixed-rate  debt may be adversely  affected by interest rate  fluctuations.  The
treasury lock,  which had a $75,000  notional  principal amount of indebtedness,
was used to hedge a portion of the interest payments associated with $150,000 of
debt  subsequently  issued in March 2002.  The treasury  lock was settled at the
time of the related debt  issuance  with a net gain of $267 being  recognized in
other comprehensive income. The net gain on the treasury lock is being amortized
into earnings as an adjustment to interest expense over the same period in which
the related  interest  costs on the new debt  issuance are being  recognized  in
earnings.  Amortization  of  $53  and  $14  was  recognized  in  earnings  as an
adjustment to interest expense during fiscal 2003 and 2002, respectively.  It is
expected  that $53 of this gain will be  recognized in earnings as an adjustment
to interest expense during the next 12 months.

Interest Rate Swaps
We had interest rate swaps with a notional amount of $200,000,  which we used to
convert  variable rates on our long-term  debt to fixed rates  effective May 30,
1995.  We  received  the  one-month  commercial  paper  interest  rate  and paid
fixed-rate interest ranging from 7.51 percent to 7.89 percent. The interest rate
swaps were settled during January 1996 at a cost to us of $27,670.  This cost is
being  recognized  as an  adjustment  to interest  expense  over the term of our
10-year, 6.375 percent notes and 20-year, 7.125 percent debentures (see Note 6).

NOTE 8 - FINANCIAL INSTRUMENTS

The fair values of cash equivalents,  accounts receivable,  and accounts payable
approximate  their  carrying  amounts  due to their short  duration.  Short-term
investments are carried at amortized cost, which approximates fair value.

The  carrying  value  and fair  value of  long-term  debt at May 25,  2003,  was
$658,086  and  $740,130,  respectively.  The  carrying  value and fair  value of
long-term  debt at May 26, 2002,  was $662,506 and $680,115,  respectively.  The
fair value of long-term debt is determined  based on market prices or, if market
prices  are not  available,  the  present  value of the  underlying  cash  flows
discounted at our incremental borrowing rates.

NOTE 9 - STOCKHOLDERS' EQUITY

Treasury Stock
Our Board of Directors  has  authorized  us to  repurchase  up to 115.4  million
shares of our  common  stock.  In fiscal  2003,  2002,  and 2001,  we  purchased
treasury stock totaling $213,311,  $208,578, and $176,511,  respectively.  As of
May 25,  2003, a total of 98.5 million  shares have been  repurchased  under the
authorization.  The  repurchased  common  stock is  reflected  as a reduction of
stockholders' equity.

Stock Purchase/Loan Program
We have share ownership  guidelines for our officers.  To assist them in meeting
these  guidelines,  we  implemented  the 1998 Stock  Purchase/Option  Award Loan
Program  (Loan  Program)  in  conjunction  with our Stock  Option and  Long-Term
Incentive  Plan of 1995.  The Loan  Program  provided  loans to our officers and
awarded two options for every new share  purchased,  up to a maximum total share
value equal to a designated percentage of the officer's base compensation. Loans
are full recourse and interest  bearing,  with a maximum  principal amount of 75
percent  of the value of the stock  purchased.  The stock  purchased  is held on
deposit with us until the loan is repaid.  The interest rate for loans under the
Loan Program is fixed and is equal to the  applicable  federal rate for mid-term
loans with  semi-annual  compounding for the month in which the loan originates.
Interest is payable on a weekly basis. Loan principal is payable in installments
with 25 percent, 25 percent,  and 50 percent of the total loan due at the end of
the fifth, sixth, and seventh years of the loan. Effective July 30, 2002, and in
compliance with the  Sarbanes-Oxley Act of 2002, we no longer issue new loans to
our executive-level  officers under the Loan Program. We account for outstanding
officer notes receivable as a reduction of stockholders' equity.

Stockholders' Rights Plan
Under  our  amended  Rights  Agreement,  each  share  of our  common  stock  has
associated with it two-thirds of a right to purchase one-hundredth of a share of
our Series A  Participating  Cumulative  Preferred  Stock at a purchase price of
$62.50,  subject to adjustment under certain  circumstances to prevent dilution.
The number of rights  associated with each share of our common stock reflects an
adjustment  resulting from our three-for-two stock split in May 2002. The rights
are  exercisable  when,  and are not  transferable  apart from our common  stock
until,  a person or group has  acquired  20 percent  or more,  or makes a tender
offer for 20 percent or more, of our common stock.  If the specified  percentage
of our common stock is then acquired,  each right will entitle the holder (other
than the acquiring company) to receive, upon exercise, common stock of either us
or the acquiring company having a value equal to two times the exercise price of
the right.  The rights are  redeemable  by our Board of Directors  under certain
circumstances and expire on May 24, 2005.

                                       22

<PAGE>


Stock Split
On March 21, 2002, our Board of Directors declared a three-for-two  split of our
common  stock.  The stock  split was  accomplished  through a 50  percent  stock
dividend,  which was  distributed on May 1, 2002 to stockholders of record as of
the close of business on April 10, 2002. In connection with the stock split, the
number of common shares  reserved for issuance or subject to issuance  under our
stock option,  stock grant, and other plans was proportionately  increased.  The
total number of common and preferred  shares  authorized  for issuance under our
Articles of Incorporation remained the same. All applicable references to number
of shares and per share  amounts of common stock in these  financial  statements
and notes have been adjusted to reflect the stock split.

Accumulated Other Comprehensive Income (Loss)
The components of accumulated other comprehensive income (loss) are as follows:
<TABLE>
<CAPTION>

                                                                          May 25, 2003        May 26, 2002
--------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                 <C>
Foreign currency translation adjustment                                         $(10,354)           $(12,933)
Unrealized gains on derivatives                                                      382                 380
Minimum pension liability adjustment                                                (517)               (288)
--------------------------------------------------------------------------------------------------------------------
Total accumulated other comprehensive income (loss)                             $(10,489)           $(12,841)
====================================================================================================================
</TABLE>

Reclassification  adjustments  associated  with  pre-tax net  derivative  income
(losses)  realized in net earnings for fiscal 2003,  2002,  and 2001 amounted to
$994, ($262), and $0, respectively.

NOTE 10 - LEASES

An analysis of rent expense incurred under operating leases is as follows:
<TABLE>
<CAPTION>

                                                                                   Fiscal Year
--------------------------------------------------------------------------------------------------------------------
                                                                     2003              2002              2001
--------------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>               <C>              <C>
Restaurant minimum rent                                             $48,121           $43,113          $40,007
Restaurant percentage rent                                            3,682             3,550            3,163
Restaurant equipment minimum rent                                     5,719             8,386            8,388
Restaurant rent averaging expense                                      (663)             (518)            (510)
Transportation equipment                                              2,665             2,481            2,320
Office equipment                                                      1,138             1,526            1,323
Office space                                                          1,713             1,387            1,020
Warehouse space                                                         303               237              227
--------------------------------------------------------------------------------------------------------------------
Total rent expense                                                  $62,678           $60,162          $55,938
====================================================================================================================
</TABLE>

Minimum rental  obligations are accounted for on a straight-line  basis over the
term of the lease. Percentage rent expense is generally based on sales levels or
changes in the  Consumer  Price Index.  Many of our leases have renewal  periods
totaling five to 20 years,  exercisable  at our option,  and require  payment of
property  taxes,  insurance,  and  maintenance  costs  in  addition  to the rent
payments.  The annual  non-cancelable  future lease  commitments for each of the
five fiscal years  subsequent to May 25, 2003,  and thereafter  are:  $55,938 in
2004,  $51,627 in 2005,  $45,565 in 2006,  $39,637 in 2007, $32,533 in 2008, and
$102,621 thereafter, for a cumulative total of $327,921.

NOTE 11 - INTEREST, NET

The components of interest, net, are as follows:
<TABLE>
<CAPTION>

                                                                                   Fiscal Year
--------------------------------------------------------------------------------------------------------------------
                                                                     2003                2002           2001
--------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>               <C>              <C>
Interest expense                                                     $47,566           $41,493          $35,196
Capitalized interest                                                  (3,470)           (3,653)          (3,671)
Interest income                                                       (1,499)           (1,255)            (861)
--------------------------------------------------------------------------------------------------------------------
Interest, net                                                        $42,597           $36,585          $30,664
====================================================================================================================
</TABLE>

Capitalized  interest was computed  using our average  borrowing  rate.  We paid
$38,682,  $31,027 and, $24,281,  for interest (excluding amounts capitalized) in
fiscal 2003, 2002, and 2001, respectively.

                                       23

<PAGE>


NOTE 12 - INCOME TAXES

The components of earnings before income taxes and the provision for income
taxes thereon are as follows:
<TABLE>
<CAPTION>

                                                                                   Fiscal Year
--------------------------------------------------------------------------------------------------------------------
                                                                     2003             2002              2001
--------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>              <C>              <C>
Earnings before income taxes:
       U.S.                                                        $ 345,496         $ 359,947        $ 296,160
       Canada                                                          2,252             3,362            5,058
--------------------------------------------------------------------------------------------------------------------
Earnings before income taxes                                       $ 347,748         $ 363,309        $ 301,218
--------------------------------------------------------------------------------------------------------------------
Income taxes:
   Current:
       Federal                                                    $   68,178        $   88,063       $   79,285
       State and local                                                11,396            14,582           13,049
       Canada                                                             24               133              134
--------------------------------------------------------------------------------------------------------------------
     Total current                                                $   79,598         $ 102,778       $   92,468
--------------------------------------------------------------------------------------------------------------------
   Deferred (principally U.S.)                                        35,890            22,743           11,750
--------------------------------------------------------------------------------------------------------------------
Total income taxes                                                 $ 115,488         $ 125,521        $ 104,218
====================================================================================================================
</TABLE>

During fiscal 2003,  2002,  and 2001, we paid income taxes of $65,398,  $56,839,
and $63,893, respectively.

The following table is a reconciliation of the U.S. statutory income tax rate to
the effective income tax rate included in the accompanying consolidated
statements of earnings:
<TABLE>
<CAPTION>

                                                                                   Fiscal Year
--------------------------------------------------------------------------------------------------------------------
                                                                     2003             2002              2001
--------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>               <C>              <C>
U.S. statutory rate                                                  35.0%             35.0%            35.0%
State and local income taxes, net of federal tax benefits             3.0               3.1              3.1
Benefit of federal income tax credits                                (4.5)             (3.9)            (4.1)
Other, net                                                           (0.3)              0.4              0.6
--------------------------------------------------------------------------------------------------------------------
Effective income tax rate                                            33.2%             34.6%            34.6%
====================================================================================================================
</TABLE>

The tax effects of temporary differences that give rise to deferred tax assets
and liabilities are as follows:
<TABLE>
<CAPTION>

                                                                            May 25, 2003          May 26, 2002
--------------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>                   <C>
Accrued liabilities                                                          $   12,616            $   19,052
Compensation and employee benefits                                               55,935                52,804
Asset disposition and restructuring liabilities                                   2,004                 2,584
Other                                                                             2,638                 2,392
--------------------------------------------------------------------------------------------------------------------
   Gross deferred tax assets                                                 $   73,193            $   76,832
--------------------------------------------------------------------------------------------------------------------
Buildings and equipment                                                        (116,148)              (93,752)
Prepaid pension costs                                                           (25,987)              (18,096)
Prepaid interest                                                                 (1,454)               (3,478)
Deferred rent and interest income                                               (13,117)              (12,496)
Capitalized software and other assets                                           (16,115)              (12,127)
Other                                                                            (1,703)               (2,465)
--------------------------------------------------------------------------------------------------------------------
   Gross deferred tax liabilities                                             $(174,524)           $ (142,414)
--------------------------------------------------------------------------------------------------------------------
         Net deferred tax liabilities                                         $(101,331)           $  (65,582)
====================================================================================================================
</TABLE>

A valuation allowance for deferred tax assets is provided when it is more likely
than not  that  some  portion  or all of the  deferred  tax  assets  will not be
realized.  Realization is dependent upon the generation of future taxable income
or the  reversal of deferred tax  liabilities  during the periods in which those
temporary  differences become deductible.  We consider the scheduled reversal of
deferred tax  liabilities,  projected  future taxable  income,  and tax planning
strategies in making this  assessment.  As of May 25, 2003, and May 26, 2002, no
valuation  allowance  has been  recognized  for deferred  tax assets  because we
believe that  sufficient  projected  future  taxable income will be generated to
fully utilize the benefits of these deductible amounts.

                                       24

<PAGE>


NOTE 13 - RETIREMENT PLANS

Defined Benefit Plans and Post-Retirement Benefit Plan
Substantially  all of our employees are eligible to  participate in a retirement
plan. We sponsor non-contributory defined benefit pension plans for our salaried
employees, in which benefits are based on various formulas that include years of
service and compensation factors, and for a group of hourly employees,  in which
a fixed  level of  benefits  is  provided.  Pension  plan  assets are  primarily
invested in U.S., international and private equities; long duration fixed income
securities  and real  assets.  Our policy is to fund,  at a minimum,  the amount
necessary on an actuarial  basis to provide for benefits in accordance  with the
requirements of the Employee Retirement Income Security Act of 1974, as amended.
We also sponsor a contributory post-retirement benefit plan that provides health
care  benefits to our  salaried  retirees.  During  fiscal  2003,  we funded the
defined benefit pension plans in the amount of $20,000. This funding allowed the
defined  benefit  pension  plans to  maintain  a fully  funded  status as of the
February 28, 2003 annual valuation date.

The  following  provides a  reconciliation  of the  changes in the plan  benefit
obligation,  fair value of plan assets, and the funded status of the plans as of
February 28, 2003 and 2002:
<TABLE>
<CAPTION>


                                                   Defined Benefit Plans (1)            Post-Retirement Benefit Plan
---------------------------------------------- -------------- -------------- ----- ------------------- ---------------
                                                      2003           2002                 2003              2002
---------------------------------------------- -------------- -------------- ----- ------------------- ---------------
---------------------------------------------- -------------- -------------- ----- ------------------- ---------------
<S>                                                <C>           <C>                <C>                  <C>
Change in Benefit Obligation:
Benefit obligation at beginning of period          $111,155       $  97,339          $   9,356            $  6,739
  Service cost                                        3,732           3,586                388                 291
  Interest cost                                       7,088           7,145                648                 500
  Participant contributions                              --              --                112                  91
  Benefits paid                                      (4,558)         (4,412)              (252)               (214)
  Actuarial loss                                     12,219           7,497              4,557               1,949
                                                  ---------     -----------           --------           ---------
Benefit obligation at end of period                $129,636        $111,155           $ 14,809            $  9,356
                                                   ========        ========           ========            ========

Change in Plan Assets:
Fair value at beginning of period                  $109,574        $120,042        $        --         $        --
  Actual return on plan assets                       (9,117)         (6,097)                --                  --
  Employer contributions                             20,063              41                140                 123
  Participant contributions                              --              --                112                  91
  Benefits paid                                      (4,558)         (4,412)              (252)               (214)
                                                 -----------     ----------           ---------          ---------
Fair value at end of period                        $115,962        $109,574        $         --        $        --
                                                   ========        ========        ============        ============

Reconciliation of the Plan's Funded Status:
Funded status at end of period                     $(13,675)     $   (1,581)          $(14,809)           $ (9,356)
  Unrecognized prior service cost                      (936)         (1,392)                29                  47
  Unrecognized actuarial loss                        79,805          47,762              6,089               1,579
  Contributions for March to May                         19              10                 35                  44
                                                 ----------   -------------          ---------         ------------
Prepaid (accrued) benefit costs                    $ 65,213       $  44,799          $  (8,656)           $ (7,686)
                                                   ========       =========          ==========           =========

Components of the Consolidated Balance
Sheets:
Prepaid benefit costs                              $ 68,873       $  48,262        $         --       $         --
Accrued benefit costs                                (4,496)         (3,929)            (8,656)             (7,686)
Accumulated other comprehensive income                  836             466                  --                 --
                                                  ---------    ------------        ------------        -------------
Net asset (liability) recognized                   $ 65,213       $  44,799          $  (8,656)           $ (7,686)
                                                   ========       =========          ==========           =========
<FN>


(1)      For plans with accumulated benefit obligations in excess of plan
         assets, the accumulated benefit obligation and fair value of plan
         assets were $4,515 and $0, respectively, as of February 28, 2003, and
         $3,939 and $0, respectively, as of February 28, 2002.

</FN>
</TABLE>

                                       25

<PAGE>


The following table presents the weighted-average  assumptions used to determine
the actuarial present value of the defined benefit plans and the post-retirement
benefit plan obligations:
<TABLE>
<CAPTION>

                                                         Defined Benefit Plans         Post-RetirementBenefit Plan
--------------------------------------------------- -------------- -------------- ------ ----------- --------------
                                                             2003           2002               2003           2002
--------------------------------------------------- -------------- -------------- ------ ----------- --------------
--------------------------------------------------- -------------- -------------- ------ ----------- --------------
<S>                                                        <C>            <C>                 <C>            <C>
Discount rate                                               6.25%          7.00%              6.25%          7.00%
Expected long-term rate of return on plan assets           10.40%         10.40%                N/A            N/A
Rate of future compensation increases                       3.75%          3.75%                N/A            N/A
--------------------------------------------------- -------------- -------------- ------ ----------- --------------
</TABLE>

We set the  discount  rate  assumption  annually  for each of the plans at their
valuation  dates  to  reflect  the  yield  of  high-quality   fixed-income  debt
instruments,  with lives that approximate the maturity of the plan benefits. The
expected  long-term  rate of return on plan  assets and  health  care cost trend
rates are based upon  several  factors,  including  our  historical  assumptions
compared with actual results,  an analysis of current market  conditions,  asset
allocations,  and the views of leading financial advisers and economists.  Based
on our recent  analysis,  we have lowered our defined  benefit  plans'  expected
long-term rate of return on plan assets for fiscal 2004 to 9.00 percent.

The  discount  rate  and  expected  return  on plan  assets  assumptions  have a
significant  effect on amounts  reported for defined  benefit  pension  plans. A
quarter  percentage point change in the defined benefit plans' discount rate and
the expected  long-term rate of return on plan assets would increase or decrease
earnings before income taxes by $610 and $360, respectively.

The assumed health care cost trend rate increase in the  per-capita  charges for
benefits ranged from 12.0 percent to 13.0 percent for fiscal 2004,  depending on
the  medical  service  category.  The rates  gradually  decrease  to 5.0 percent
through fiscal 2011 and remain at that level thereafter.

The  assumed  health  care cost trend rate has a  significant  effect on amounts
reported for retiree health care plans. A  one-percentage-point  variance in the
assumed  health care cost trend rate would increase or decrease the total of the
service and interest  cost  components of net periodic  post-retirement  benefit
cost by $207  and  $179,  respectively,  and  would  increase  or  decrease  the
accumulated   post-retirement   benefit   obligation   by  $3,013  and   $2,377,
respectively.

Components of net periodic benefit (income) cost are as follows:
<TABLE>
<CAPTION>

                                                         Defined Benefit Plans           Post-Retirement Benefit Plan
------------------------------------------------- ---------- ----------- ---------- --- --------- ---------- --------
                                                      2003      2002         2001          2003      2002     2001
------------------------------------------------- ---------- ----------- ---------- --- --------- ---------- --------
------------------------------------------------- ---------- ----------- ---------- --- --------- ---------- --------
<S>                                                 <C>       <C>         <C>           <C>        <C>       <C>
Service cost                                        $ 3,732   $  3,586    $ 3,488        $ 388      $  291    $ 246
Interest cost                                         7,088      7,145      6,255          648         500      447
Expected return on plan assets                      (12,739)   (12,416)   (11,589)          --          --       --
Amortization of unrecognized transition asset            --       (642)      (642)          --          --       --
Amortization of unrecognized prior service cost        (348)      (456)      (456)          18          18       18
Recognized net actuarial loss (gain)                  1,924      1,104        213           46          --      (18)

------------------------------------------------- ---------- ----------- ---------- --- --------- ---------- --------
Net periodic benefit (income) cost                  $  (343)  $ (1,679)   $(2,731)      $1,100      $  809    $ 693
================================================= ========== =========== ========== === ========= ========== ========
</TABLE>


Defined Contribution Plan
We have a defined contribution plan covering most employees age 21 and older. We
match  contributions for participants with at least one year of service at up to
six percent of compensation,  based on our performance.  The match ranges from a
minimum of $0.25 to $1.20 for each dollar  contributed by the  participant.  The
plan had net assets of $334,319 at May 25,  2003,  and $442,030 at May 26, 2002.
Expense  recognized  in fiscal  2003,  2002,  and 2001 was $1,732,  $1,593,  and
$3,358,  respectively.  Employees  classified as "highly  compensated" under the
Internal  Revenue  Code are  ineligible  to  participate  in this plan.  Amounts
payable to highly compensated employees under a separate, non-qualified deferred
compensation  plan  totaled  $69,653  and $66,241 as of May 25, 2003 and May 26,
2002, respectively. These amounts are included in other current liabilities.

The defined  contribution plan includes an Employee Stock Ownership Plan (ESOP).
This ESOP originally borrowed $50,000 from third parties, with guarantees by us,
and borrowed  $25,000 from us at a variable  interest  rate.  The $50,000  third
party  loan  was  refinanced  in 1997 by a  commercial  bank's  loan to us and a
corresponding  loan from us to the ESOP.  Compensation  expense is recognized as
contributions   are   accrued.   In  addition  to  matching   plan   participant
contributions,  our  contributions  to the  plan are  also  made to pay  certain
employee incentive bonuses. Fluctuations in our stock price impact the amount of
expense  to be  recognized.  Contributions  to  the  plan,  plus  the  dividends
accumulated  on allocated and  unallocated  shares held by the ESOP, are used to
pay  principal,  interest,  and expenses of the plan. As loan payments are made,
common stock is allocated to ESOP participants.  In fiscal 2003, 2002, and 2001,
the ESOP incurred interest expense of $697,  $1,258,  and $3,086,  respectively,
and used  dividends  received  of  $1,002,  $735,  and $415,  respectively,  and
contributions received from us of $4,266, $5,166, and $9,224,  respectively,  to
pay principal and interest on our debt.

                                       26

<PAGE>


The ESOP shares we own are included in average  common  shares  outstanding  for
purposes of calculating net earnings per share. At May 25, 2003, the ESOP's debt
to us had a balance of $34,430 with a variable rate of interest of 1.64 percent;
$17,530 of the  principal  balance  is due to be repaid no later  than  December
2007,  with the remaining  $16,900 due to be repaid no later than December 2014.
The number of our common  shares  within the ESOP at May 25, 2003,  approximates
12,157,000   shares,    representing   4,533,000   allocated   shares,   222,000
committed-to-be-released shares, and 7,402,000 suspense shares.

NOTE 14 - STOCK PLANS

We maintain four principal stock option and stock grant plans:  the Stock Option
and Long-Term Incentive Plan of 1995 (1995 Plan); the Restaurant  Management and
Employee  Stock Plan of 2000 (2000 Plan);  the 2002 Stock  Incentive  Plan (2002
Plan) and the Stock Plan for Directors  (Director Stock Plan).  All of the plans
are  administered by the Compensation  Committee of the Board of Directors.  The
1995  Plan  provides  for the  issuance  of up to  33,300,000  common  shares in
connection with the granting of non-qualified  stock options,  restricted stock,
or RSUs to key employees.  Up to 2,250,000  shares may be granted under the plan
as restricted  stock and RSUs.  The 2000 Plan provides for the issuance of up to
5,400,000  common shares out of our treasury in connection  with the granting of
non-qualified  stock  options  and  restricted  stock or RSUs to key  employees,
excluding  directors and executive  officers.  Restricted  stock and RSUs may be
granted under the plan for up to five percent of the shares authorized under the
plan.  The 2002 Plan provides for the issuance of up to 8,550,000  common shares
in connection with the granting of non-qualified stock options,  incentive stock
options,  stock appreciation rights, stock awards,  restricted stock, or RSUs to
key employees and non-employee  directors. Up to 1,700,000 shares may be granted
under the plan as restricted  stock and RSUs.  The Director  Stock Plan provides
for  the  issuance  of up to  375,000  common  shares  out  of our  treasury  in
connection with the granting of non-qualified stock options and restricted stock
and RSUs to non-employee  directors.  Under all of the 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 two to four years.  Restricted stock and RSUs granted under the 1995, 2000,
and 2002 Plans  generally vest over periods ranging from three to five years and
no sooner  than one year  from the date of  grant.  The  restricted  period  for
certain grants may be accelerated  based on performance goals established by the
Committee.

We also maintain the  Compensation  Plan for Non-Employee  Directors.  This plan
provides that non-employee  directors may elect to receive their annual retainer
and  meeting  fees in any  combination  of cash,  deferred  cash,  or our common
shares,  and  authorizes  the issuance of up to 105,981 common shares out of our
treasury for this  purpose.  The common shares  issuable  under the plan have an
aggregate  fair value equal to the value of the  foregone  retainer  and meeting
fees.

The per share weighted-average fair value of stock options granted during fiscal
2003, 2002, and 2001 was $9.01,  $6.05, and $4.48,  respectively.  These amounts
were  determined  using the Black  Scholes  option-pricing  model,  which values
options  based on the stock price at the grant date,  the  expected  life of the
option, the estimated volatility of the stock,  expected dividend payments,  and
the risk-free  interest rate over the expected life of the option.  The dividend
yield was calculated by dividing the current  annualized  dividend by the option
exercise  price  for  each  grant.   The  expected   volatility  was  determined
considering stock prices for the fiscal year the grant occurred and prior fiscal
years, as well as considering  industry  volatility data. The risk-free interest
rate was the rate available on zero coupon U.S.  government  obligations  with a
term equal to the remaining term for each grant. The expected life of the option
was estimated based on the exercise history from previous grants.

The  weighted-average  assumptions  used  in the  Black  Scholes  model  were as
follows:
<TABLE>
<CAPTION>


                                                                                  Stock Options
                                                                             Granted in Fiscal Year
--------------------------------------------------------------------------------------------------------------------
                                                                      2003            2002              2001
--------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>                <C>             <C>
Risk-free interest rate                                                4.37%              4.50%           7.00%
Expected volatility of stock                                           30.0%              30.0%           30.0%
Dividend yield                                                          0.2%               0.1%            0.1%
Expected option life                                                   6.0 years         6.0 years       6.0 years
====================================================================================================================
</TABLE>

                                       27

<PAGE>


Stock option activity during the periods indicated was as follows:
<TABLE>
<CAPTION>

                                                     Weighted-Average                           Weighted-Average
                                     Options          Exercise Price           Options           Exercise Price
                                   Exercisable           Per Share           Outstanding            Per Share
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
<S>                                   <C>                   <C>              <C>                     <C>
Balance at May 29, 2000                10,068,389            $  7.12          26,352,761              $  8.98
--------------------------------------------------------------------------------------------------------------------
Options granted                                                                5,375,727              $ 10.99
Options exercised                                                             (4,670,100)             $  7.00
Options cancelled                                                               (926,100)             $ 10.82
--------------------------------------------------------------------------------------------------------------------
Balance at May 27, 2001                12,222,339            $  7.62          26,132,288              $  9.68
--------------------------------------------------------------------------------------------------------------------
Options granted                                                                5,776,350              $ 17.36
Options exercised                                                             (4,310,327)             $  8.36
Options cancelled                                                               (675,776)             $ 13.49
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Balance at May 26, 2002                12,152,538            $  8.31          26,922,535              $ 11.44
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Options granted                                                                4,200,086              $ 25.99
Options exercised                                                             (3,132,894)             $  9.23
Options cancelled                                                             (1,298,094)             $ 16.86
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Balance at May 25, 2003                13,481,166            $  9.59          26,691,633              $ 13.73
--------------------------------------------------------------------------------------------------------------------
</TABLE>

The following table provides information regarding exercisable and outstanding
options as of May 25, 2003:
<TABLE>
<CAPTION>

                                                                                                     Weighted-
                                                Weighted-                           Weighted-         Average
         Range of                                Average                             Average         Remaining
         Exercise               Options          Exercise          Options          Exercise        Contractual
      Price Per Share         Exercisable    Price Per Share     Outstanding     Price Per Share    Life (Years)
--------------------------------------------------------------------------------------------------------------------
      <S>                      <C>              <C>               <C>               <C>                 <C>
      $ 4.00 - $10.00           7,089,174        $  6.99           7,090,672         $  6.99             2.5
      $10.01 - $15.00           5,904,902          12.03          10,492,834           11.96             5.8
      $15.01 - $20.00             432,208          16.85           5,133,444           17.03             8.2
        Over $20.00                54,882          25.39           3,974,683           26.16             9.1
--------------------------------------------------------------------------------------------------------------------
                               13,481,166        $  9.59          26,691,633          $13.73             5.9
====================================================================================================================
</TABLE>

We granted restricted stock and RSUs during fiscal 2003, 2002, and 2001 totaling
275,610,   428,280,   and   563,306   shares,   respectively.   The  per   share
weighted-average fair value of the awards granted in fiscal 2003, 2002, and 2001
was $26.53,  $17.10,  and $10.67,  respectively.  After giving  consideration to
assumed  forfeiture rates and subsequent  forfeiture  adjustments,  compensation
expense  recognized in net earnings for awards granted in fiscal 2003, 2002, and
2001 amounted to $3,579, $4,392, and $4,164, respectively.

NOTE 15 - EMPLOYEE STOCK PURCHASE PLAN

We maintain  the Darden  Restaurants  Employee  Stock  Purchase  Plan to provide
eligible  employees  who have  completed one year of service  (excluding  senior
officers  subject to Section  16(b) of the  Securities  Exchange Act of 1934) an
opportunity  to  purchase  shares  of  our  common  stock,  subject  to  certain
limitations. Under the plan, employees may elect to purchase shares at the lower
of 85 percent of the fair  market  value of our common  stock as of the first or
last trading days of each quarterly  participation  period.  During fiscal 2003,
2002,  and 2001,  employees  purchased  shares of  common  stock  under the plan
totaling 261,409,  284,576,  and 328,338,  respectively.  As of May 25, 2003, an
additional 778,456 shares are available for issuance.

No  compensation  expense has been  recognized for shares issued under the plan.
The impact of recognizing compensation expense for purchases made under the plan
in accordance with the fair value method  specified in SFAS No. 123 is less than
$800 and has no impact on reported basic or diluted net earnings per share.

NOTE 16 - COMMITMENTS AND CONTINGENCIES

We make trade commitments in the course of our normal operations.  As of May 25,
2003, and May 26, 2002, we were contingently liable for approximately $8,301 and
$9,786,  respectively,  under  outstanding  trade  letters  of credit  issued in
connection with purchase commitments.  These letters of credit have terms of one
month or less and are used to collateralize our obligations to third parties for
the purchase of inventories.

As collateral for performance on contracts and as credit guarantees to banks and
insurers,  we were contingently liable for guarantees of subsidiary  obligations
under standby  letters of credit.  As of May 25, 2003,  and May 26, 2002, we had
$41,442  and  $30,000,  respectively,  of standby  letters of credit  related to
workers'  compensation  and

                                       28

<PAGE>

general liabilities accrued in our consolidated financial statements.  As of May
25, 2003, and May 26, 2002, we had $7,503 and $8,608,  respectively,  of standby
letters of credit related to contractual  operating lease  obligations and other
payments.  All standby letters of credit are renewable  annually.  As of May 25,
2003,  and May 26, 2002, we had other  commercial  commitments of $2,250 and $0,
respectively.

As of May 25, 2003 and May 26, 2002, we had $4,254 and $5,463, respectively,  of
guarantees associated with third-party sublease or assignment obligations. These
amounts  represent the maximum  potential  amount of future  payments  under the
guarantees. The fair value of these potential payments discounted at our pre-tax
cost of capital at May 25, 2003 and May 26, 2002  amounted to $2,935 and $3,769,
respectively.  We did not accrue for the  guarantees,  as the  likelihood of the
third parties defaulting on the sublease or assignment  agreements was less than
probable. In the event of default by a third party, the indemnity and/or default
clauses in our sublease and assignment  agreements govern our ability to recover
from and pursue the third party for damages incurred as a result of its default.
We do not hold any third-party assets as collateral related to these sublease or
assignment  agreements,  except to the extent that the  sublease  or  assignment
allows us to repossess  the building and  personal  property.  These  guarantees
expire over their respective  lease terms,  which range from fiscal 2004 through
fiscal 2012.

We are involved in litigation arising from the normal course of business. In our
opinion,  this litigation is not expected to materially  impact our consolidated
financial statements.

NOTE 17 - QUARTERLY DATA (UNAUDITED)

The following  table  summarizes  unaudited  quarterly  data for fiscal 2003 and
2002:

<TABLE>
<CAPTION>

                                                                  Fiscal 2003 - Quarters Ended
--------------------------------------------------------------------------------------------------------------------
                                               Aug. 25       Nov. 24        Feb. 23        May 25        Total
--------------------------------------------------------------------------------------------------------------------
<S>                                           <C>           <C>            <C>           <C>           <C>
Sales                                         $1,174,565    $1,071,531     $1,181,383    $1,227,492    $4,654,971
Earnings before income taxes                     109,005        56,220         93,325        89,198       347,748
Net earnings                                      71,886        37,478         61,786        61,110       232,260
Net earnings per share:
   Basic                                            0.42          0.22           0.36          0.36          1.36
   Diluted                                          0.40          0.21           0.35          0.35          1.31
Dividends paid per share                              --          0.04             --          0.04          0.08
Stock price:
    High                                           27.83         26.13          22.96         20.27         27.83
    Low                                            19.17         17.96          16.46         16.70         16.46
====================================================================================================================
</TABLE>
<TABLE>
<CAPTION>


                                                                  Fiscal 2002 - Quarters Ended
--------------------------------------------------------------------------------------------------------------------
                                               Aug. 26       Nov. 25        Feb. 24        May 26        Total
--------------------------------------------------------------------------------------------------------------------
<S>                                           <C>           <C>           <C>            <C>           <C>
Sales                                         $1,073,410    $1,007,080    $1,124,472     $1,161,949    $4,366,911
Earnings before income taxes                      95,577        56,255       102,776        108,701       363,309
Net earnings                                      62,156        36,463        66,220         72,949       237,788
Net earnings per share:
   Basic                                            0.35          0.21          0.38           0.42          1.36
   Diluted                                          0.34          0.20          0.36           0.40          1.30
Dividends paid per share                              --        0.0265            --         0.0265         0.053
Stock price:
    High                                          21.667        21.653        28.660         29.767        29.767
    Low                                           16.400        15.400        20.007         23.733        15.400
====================================================================================================================
</TABLE>


                                       29


<PAGE>


Five-Year Financial Summary
(In thousands, except per share data)
<TABLE>
<CAPTION>

                                                                        Fiscal Year Ended
----------------------------------------------------------------------------------------------------------------------
                                                May 25,        May 26,       May 27,       May 28,        May 30,
Operating Results                                 2003           2002          2001          2000          1999
----------------------------------------------------------------------------------------------------------------------
<S>                                            <C>            <C>            <C>          <C>            <C>
Sales                                           $4,654,971     $4,366,911     $3,992,419   $3,675,461    $ 3,432,375
----------------------------------------------------------------------------------------------------------------------
Costs and expenses:
   Cost of sales:
     Food and beverage                           1,449,162      1,384,481      1,302,926    1,199,709      1,133,705
     Restaurant labor                            1,485,046      1,373,416      1,261,837    1,181,156      1,117,401
     Restaurant expenses                           700,182        625,710        559,670      510,727        485,708

----------------------------------------------------------------------------------------------------------------------
Total cost of sales, excluding restaurant
   depreciation and amortization (1)            $3,634,390     $3,383,607     $3,124,433   $2,891,592     $2,736,814
Selling, general, and administrative               439,376        420,149        389,240      363,041        343,280
Depreciation and amortization                      191,218        165,829        146,864      130,464        125,327
Interest, net                                       42,597         36,585         30,664       22,388         19,540
Restructuring and asset impairment
   credit, net                                        (358)        (2,568)            --       (5,931)        (8,461)
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Total costs and expenses                        $4,307,223     $4,003,602     $3,691,201   $3,401,554    $ 3,216,500
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Earnings before income taxes                       347,748        363,309        301,218      273,907        215,875
Income taxes                                       115,488        125,521        104,218       97,202         75,337
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Net earnings                                      $232,260    $   237,788      $ 197,000    $ 176,705      $ 140,538
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Net earnings per share:
   Basic                                        $     1.36        $  1.36        $  1.10     $   0.92       $   0.68
   Diluted                                      $     1.31        $  1.30        $  1.06     $   0.89       $   0.66

----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Average number of common shares
 outstanding, net of shares held
 in Treasury:
     Basic                                         170,300        174,700        179,600      192,800        206,000
     Diluted                                       177,400        183,500        185,600      197,800        212,100
======================================================================================================================
======================================================================================================================
Financial Position
Total assets                                    $2,664,633     $2,529,736     $2,216,534   $1,969,555    $ 1,888,560
Land, buildings, and equipment                   2,157,132      1,926,947      1,779,515    1,578,541      1,461,535
Working capital (deficit)                         (314,280)      (157,662)      (226,116)    (316,427)      (194,478)
Long-term debt                                     658,086        662,506        520,574      306,586        316,451
Stockholders' equity                             1,196,191      1,128,877      1,033,318      958,602        962,349
Stockholders' equity per outstanding share            7.25           6.56           5.87         5.23           4.86
======================================================================================================================
======================================================================================================================
Other Statistics
Cash flow from operations                      $   509,292      $ 508,142      $ 420,570    $ 342,626    $   357,942
Capital expenditures                               426,204        318,392        355,139      268,946        123,673
Dividends paid                                      13,501          9,225          9,458       10,134         10,857
Dividends paid per share                             0.080          0.053          0.053        0.053          0.053
Advertising expense                                203,393        187,950        177,998      165,590        162,934
Stock price:
   High                                              27.83         29.767         19.660       15.375         15.583
   Low                                               16.46         15.400         10.292        8.292          9.458
   Close                                       $     18.35      $  25.030       $ 19.267    $  12.583       $ 14.208

Number of employees                                140,700        133,200        128,900      122,300        116,700
Number of restaurants                                1,271          1,211          1,168        1,139          1,139
======================================================================================================================
<FN>

(1) Total cost of sales, excluding restaurant depreciation and amortization of
    $177,127, $155,837, $138,229, $123,477, and $119,140, respectively.

</FN>
</TABLE>

                                       30

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>10
<FILENAME>exhibit21_subsidiaries.txt
<DESCRIPTION>EXHIBIT 21 - SUBSIDIARIES
<TEXT>
                                                                      EXHIBIT 21
                                                                      ----------


                    SUBSIDIARIES OF DARDEN RESTAURANTS, INC.


As of May 25,  2003,  we had four  "significant  subsidiaries",  as  defined  in
Regulation S-X, Rule 1-02(w), identified as follows:

     GMRI,  Inc., a Florida  corporation,  doing business as Red Lobster,  Olive
     Garden, Bahama Breeze and Smokey Bones.

     GMRI Florida, Inc., a Florida corporation, owning a 99% limited partnership
     interest in GMRI Texas, L.P.

     GMRI  Texas,  L.P.,  a Texas  limited  partnership,  doing  business as Red
     Lobster, Olive Garden and Bahama Breeze.

     GMR Restaurants of Pennsylvania,  Inc., a Pennsylvania  corporation,  doing
     business as Red Lobster, Olive Garden and Smokey Bones.

We also had other direct and indirect  subsidiaries  as of May 25, 2003 but none
of these subsidiaries would constitute a "significant  subsidiary" as defined in
Regulation S-X, Rule 1-02(w).



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>11
<FILENAME>exhibit23_kpmgconsent.txt
<DESCRIPTION>EXHIBIT 23 - ACCOUNTANT'S CONSENT
<TEXT>

                                                                   EXHIBIT 23
                                                                   -----------


KPMG LLP

P.O. Box 31002
St. Petersburg, FL 33731-8902

P.O. Box 1439
Tampa, FL 33601-1439


                        INDEPENDENT ACCOUNTANTS' CONSENT


The Board of Directors
Darden Restaurants, Inc.:

     We consent to incorporation by reference in the Registration  Statements on
Form  S-3  (Nos.  33-93854  and  333-41350)  and on Form  S-8  (Nos.  333-57410,
333-91579,  333-69037, 333-105056 and 333-106278) of Darden Restaurants, Inc. of
our report dated June 17, 2003,  relating to the consolidated  balance sheets of
Darden  Restaurants,  Inc. and subsidiaries as of May 25, 2003 and May 26, 2002,
and the related  consolidated  statements of earnings,  changes in stockholders'
equity and accumulated other  comprehensive  income,  and cash flows for each of
the fiscal years in the  three-year  period ended May 25, 2003,  which report is
incorporated by reference to page 26 of the  Registrant's  2003 Annual Report to
Stockholders  filed as an exhibit to this  Annual  Report on Form 10-K of Darden
Restaurants, Inc.

                                                              /s/KPMG LLP

Orlando, Florida
August 21, 2003




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>12
<FILENAME>exhibit24_poa.txt
<DESCRIPTION>EXHIBIT 24 - POWER OF ATTORNEY
<TEXT>

                                                                     EXHIBIT 24
                                                                     ----------

                                POWER OF ATTORNEY

KNOW ALL BY THESE PRESENTS,  that the undersigned constitutes and appoints Paula
J. Shives, Joe R. Lee and Linda J. Dimopoulos, and each of them, his or her true
and lawful  attorneys-in-fact  and agents,  with full power of substitution  and
resubstitution,  for and in his or her  name,  place and  stead,  in any and all
capacities, to sign the Annual Report on Form 10-K for the fiscal year ended May
25,  2003,  and any and all  amendments  thereto and to file the same,  with all
exhibits  thereto,  and  other  documents  in  connection  therewith,  with  the
Securities and Exchange  Commission,  granting unto said  attorneys-in-fact  and
agents,  and each of them,  full power and  authority to do and perform each and
every  act and  thing  requisite  and  necessary  to be done  in and  about  the
premises,  as fully to all  intents  and  purposes  as might or could be done in
person,  hereby  ratifying and  confirming all that said  attorneys-in-fact  and
agents or any of them,  or their  substitute or  substitutes  may lawfully do or
cause to be done by virtue hereof.

     IN WITNESS WHEREOF, this Power of Attorney has been signed on this 18th day
of June, 2003, by the following persons.



       /s/ Leonard L. Berry                 /s/ Richard E. Rivera
       -----------------------------       ---------------------------
       Leonard L. Berry                         Richard E. Rivera



       /s/ Odie C. Donald                    /s/ Michael D. Rose
       -------------------------------      ---------------------------
       Odie C. Donald                           Michael D. Rose



       /s/ Julius Erving, II                 /s/ Maria A. Sastre
       -------------------------------      ---------------------------
       Julius Erving, II                         Maria A. Sastre



       /s/ David H. Hughes                    /s/ Jack A. Smith
       -------------------------------       --------------------------
       David H. Hughes                            Jack A. Smith



       /s/ Joe R. Lee                        /s/ Blaine Sweatt, III
       -------------------------------      ---------------------------
       Joe R. Lee                                Blaine Sweatt, III



       /s/ Cornelius McGillicuddy, III        /s/ Rita P. Wilson
       -------------------------------      ---------------------------
       Cornelius McGillicuddy, III                Rita P. Wilson





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>13
<FILENAME>exhibit31a_jl-socert.txt
<DESCRIPTION>EXHIBIT 31 - JOE LEE SARBANES OXLEY CERTIFICATION
<TEXT>
                                                                   EXHIBIT 31(a)
                                                                   -------------

                  CERTIFICATION PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002

I, Joe R. Lee, certify that:

1.   I have  reviewed  this  annual  report on Form 10-K of Darden  Restaurants,
     Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:


     (a)  Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     (b)  Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     (c)  Disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of this annual  report) that has materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's  auditors and the audit committee of registrant's board of
     directors (or persons performing the equivalent functions):

     (a)  All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     (b)  Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.


August 22, 2003


/s/ Joe R. Lee
--------------------------------------
Joe R. Lee
Chairman and Chief Executive Officer


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>14
<FILENAME>exhibit31b_ld-socert.txt
<DESCRIPTION>EXHIBIT 31B - LINDA D. SARBANES OXLEY CERT.
<TEXT>
                                                                   EXHIBIT 31(b)
                                                                   -------------

                  CERTIFICATION PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002


I, Linda J. Dimopoulos, certify that:

1.   I have  reviewed  this  annual  report on Form 10-K of Darden  Restaurants,
     Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:


     (a)  Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     (b)  Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     (c)  Disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of this annual  report) that has materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's  auditors and the audit committee of registrant's board of
     directors (or persons performing the equivalent functions):

     (a)  All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     (b)  Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.

August 22, 2003


/s/ Linda J. Dimopoulos
---------------------------------
Linda J. Dimopoulos
Senior Vice President and
Chief Financial Officer



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>15
<FILENAME>exhibit32a_jl-socert.txt
<DESCRIPTION>EXHIBIT 32B - JOE LEE SARBANES OXLEY CERT.
<TEXT>
                                                                   EXHIBIT 32(a)
                                                                   -------------

                            CERTIFICATION PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the Annual Report of Darden Restaurants,  Inc. ("Company") on
Form 10-K for the year  ended May 25,  2003,  as filed with the  Securities  and
Exchange  Commission on the date hereof ("Report"),  I, Joe R. Lee, Chairman and
Chief Executive Officer of the Company,  certify, pursuant to 18 U.S.C. ss.1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

          1.   The Report fully complies with the  requirements of Section 13(a)
               or 15(d) of the Securities Exchange Act of 1934; and

          2.   The information  contained in the Report fairly presents,  in all
               material  respects,   the  financial  condition  and  results  of
               operations of the Company.



                                    /s/ Joe R. Lee
                                    --------------------------------------------
                                    Joe R. Lee
                                    Chairman and Chief Executive Officer
                                    August 22, 2003


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>16
<FILENAME>exhibit32b_ld-socert.txt
<DESCRIPTION>EXHIBIT 32B - LINDA D. SARBANES OXLEY CERT.
<TEXT>
                                                                   EXHIBIT 32(b)
                                                                   -------------

                            CERTIFICATION PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Annual Report of Darden Restaurants,  Inc. ("Company") on
Form 10-K for the year  ended May 25,  2003,  as filed with the  Securities  and
Exchange  Commission  on the date  hereof  ("Report"),  I, Linda J.  Dimopoulos,
Senior Vice  President  and Chief  Financial  Officer of the  Company,  certify,
pursuant  to 18 U.S.C.  ss.1350,  as  adopted  pursuant  to  Section  906 of the
Sarbanes-Oxley Act of 2002, that:

          1.   The Report fully complies with the  requirements of Section 13(a)
               or 15(d) of the Securities Exchange Act of 1934; and

          2.   The information  contained in the Report fairly presents,  in all
               material  respects,   the  financial  condition  and  results  of
               operations of the Company.



                                                 /s/ Linda J. Dimopoulos
                                               --------------------------------
                                                 Linda J. Dimopoulos
                                                 Senior Vice President and
                                                 Chief Financial Officer
                                                 August 22, 2003



</TEXT>
</DOCUMENT>
</SUBMISSION>
