Exhibit 10.2

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is made effective as of November 1, 2008
by and between DineEquity, Inc. f/k/a IHOP Corp., a Delaware corporation (the
“Company”), and Richard Celio (the “Executive”).

 

WHEREAS, the Company believes it to be in its best interest to provide for
continuity of management and to provide protection for its valuable trade
secrets and confidential information; and

 

WHEREAS, the Company desires to employ the Executive and the Executive is
willing to render services to the Company on the terms and conditions with
respect to such employment hereinafter set forth.

 

NOW, THEREFORE, in consideration of premises and the mutual terms and conditions
hereof, the Company and the Executive hereby agree as follows:

 

1.             Employment.  The Company hereby employs the Executive and the
Executive hereby accepts employment with the Company upon the terms and
conditions hereinafter set forth.

 

2.             Exclusive Services.  The Executive shall devote all necessary
working time, ability and attention to the business of the Company during the
term of this Agreement and shall not, directly or indirectly, render any
material services to any business, corporation, or organization whether for
compensation or otherwise, without the prior knowledge and written consent of
the Board of Directors of the Company (hereinafter referred to as the “Board”). 
During the Employment Period, the Executive may  (A) serve on corporate, civic
or charitable boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (C) manage personal
investments, so long as such activities do not significantly interfere with the
performance of the Executive’s responsibilities as an employee of the Company in
accordance with this Agreement and any service on public company boards of
directors is approved in advance by the Board. It is expressly understood and
agreed that to the extent that any such activities have been conducted by the
Executive prior to the effective date of this Agreement, the continued conduct
of such activities (or the conduct of activities similar in nature and scope
thereto) subsequent to the effective date of this Agreement shall not thereafter
be deemed to interfere with the performance of the Executive’s responsibilities
to the Company.

 

3.             Duties.  The Executive is hereby employed as the Chief Restaurant
Support Officer of the Company and shall render services at the principal
business offices of the Company, as such may be located from time to time,
unless otherwise agreed in writing between the Board and the Executive.  The
Executive shall have such authority and shall perform such duties as are
described in Exhibit A attached hereto.

 

4.             Term.  This Agreement shall have an initial term of three
(3) years commencing as of November 1, 2008.  This Agreement will automatically
renew at the end of the initial term and at the end of each subsequent term, for
a subsequent term of one (1) year unless either party gives written notice of
non-renewal to the other at least ninety (90) days prior to the expiration of

 

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the then current term.  Such notice may be given for any or no reason.   This
Agreement is subject to earlier termination as hereinafter provided.

 

5.             Compensation.  As compensation for services rendered under this
Agreement, the Executive shall be entitled to receive the following:

 

a.             Base Salary.  The executive shall be paid a base salary of at
least $410,000 per year, payable in 24 equal semi-monthly installments during
the term of this Agreement, prorated for any partial employment month.  Such
base salary (“Base Salary”) shall be reviewed by the Compensation Committee of
the Board (the “Compensation Committee”) no less frequently than annually.  The
Base Salary may be increased by the Compensation Committee in its discretion,
subject to ratification by the Board.  The Base Salary may not be decreased,
except in the event of an across the board salary reduction approved by the
Board affecting employees of the Company at the Chief Officer Level (as defined
in Section 6(a), below).

 

b.             Additional Compensation.  The Executive shall be paid such
additional compensation and bonuses as may be determined and authorized in the
discretion of the Compensation Committee, subject to ratification by the Board. 
The Executive’s target bonus, to be payable under the Company’s annual incentive
plan, shall be 75% of the Executive’s Base Salary.

 

6.             Benefits.  In addition to the compensation to be paid to the
Executive pursuant to Section 5 hereof, the Executive shall further be entitled
to receive the following:

 

a.             Participation in Employee Plans.  The Executive shall be entitled
to participate in any health, disability, group term life insurance plan, any
pension, retirement, or profit sharing plan, any executive bonus plan, long term
incentive plan, deferred compensation plan or any other perquisites and fringe
benefits that may be extended generally from time to time to employees of the
Company at the Chief Officer Level.  For purposes of this Agreement, employees
of the Company at the “Chief Officer Level” shall mean the CEO, the Chief
Financial Officer, the Chief Restaurant Support Officer and such other employees
of the Company as may from time to time be designated as being at the Chief
Officer Level by the Board.

 

b.             Vacation.  The Executive shall be entitled to vacation as in
accordance with the Company’s Vacation Policy for Restaurant Support Center and
Field Office Employees.

 

c.             Equity Awards.  The Executive shall be entitled to equity-based
compensation awards that may be extended generally from time to time to
employees of the Company at the Chief Officer Level, as approved by the
Compensation Committee or the Board, subject to the terms and conditions of the
respective equity-based compensation plans and award agreements and the
provisions of this Agreement.

 

7.             Reimbursement of Expenses.  Subject to such rules and procedures
as from time to time are specified by the Company, the Company shall reimburse
the Executive on a monthly

 

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basis for reasonable business expenses incurred in the performance of the
Executive’s duties under this Agreement.

 

8.             Confidentiality/Trade Secrets.  The Executive acknowledges that
the Executive’s position with the Company is one of the highest trust and
confidence both by reason of the Executive’s position and by reason of the
Executive’s access to and contact with the trade secrets and confidential and
proprietary business information of the Company.  Both during the term of this
Agreement and thereafter, the Executive covenants and agrees as follows:

 

a.             The Executive shall use best efforts and exercise reasonable
diligence to protect and safeguard the trade secrets and confidential and
proprietary information of the Company, including but not limited to any
non-public strategies, business plans, marketing and advertising plans, the
identity of its customers and suppliers, its arrangements with customers and
suppliers, and its technical and financial data, records, compilations of
information, processes, recipes and specifications relating to its customers,
suppliers, products and services;

 

b.             The Executive shall not disclose any of such trade secrets and
confidential and proprietary information, except as may be required in the
course of the Executive’s employment with the Company or by law; and

 

c.             The Executive shall not use, directly or indirectly, for the
Executive’s own benefit or for the benefit of another, any of such trade secrets
and confidential and proprietary information.

 

All original and any copies of files, records, documents, emails, drawings,
specifications, memoranda, notes, or other documents relating to the business of
the Company, including printed, electronic or digital copies thereof, whether
prepared by the Executive or otherwise coming into the Executive’s possession,
shall be the exclusive property of the Company and shall be delivered to the
Company and not retained by the Executive upon termination of the Executive’s
employment for any reason whatsoever or at any other time upon request of the
Company’s General Counsel or the Board.

 

9.             Discoveries.  The Executive covenants and agrees to fully inform
the Company of and disclose to the Company all inventions, designs,
improvements, discoveries, and processes (“Discoveries”) that the Executive has
now or may hereafter have during the Executive’s employment with the Company and
that pertain or relate to the business of the Company, including but not limited
to the operation and franchising of restaurants, or to any experimental work,
products, services, or processes of the Company in progress or planned for the
future, whether conceived by the Executive alone or with others, and whether or
not conceived during regular working hours or in conjunction with the use of any
Company assets.  All such Discoveries shall be the exclusive property of the
Company whether or not patent or trademark applications are filed thereon.  The
Executive shall assist the Company, at any time during or after the Executive’s
employment, in obtaining patents on all such Discoveries deemed patentable by
the Company and shall execute all documents and do all things necessary to
obtain letters patent, vest the Company with full and exclusive title thereto,
and protect the same against infringement by others, all at the expense of the
Company.

 

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10.           Non-Competition.  The Executive covenants and agrees that during
the period of the Executive’s employment, the Executive shall not, without the
prior written consent of the CEO or the Board, directly or indirectly, as an
employee, employer, consultant, agent, principal, partner, shareholder,
corporate officer, director, or through any other kind of ownership (other than
ownership of securities of publicly held corporations of which the Executive
owns less than five percent 5% of any class of outstanding securities) or in any
other representative or individual capacity, engage in or render any services to
any business in North America engaged in the casual dining restaurant industry,
the family dining restaurant industry, or in any other segment of the restaurant
industry in which the Company or any subsidiary of the Company may become
involved after the date hereof and prior to the date of termination of the
Executive’s employment.  For purposes of this Agreement “casual dining
restaurant industry” consists of “sit down table service” restaurants serving
alcoholic beverages, with a per guest average guest check within the United
States of under $20.00 (adjusted upward each year to recognize Company menu
price increases). For purposes of this Agreement “family dining restaurant
industry” consists of “sit down table service” restaurants, with a per guest
average guest check within the United States of under $15.00 (adjusted upward
each year to recognize Company menu price increases).

 

11.           Nonsolicitation.  The Executive agrees that during the period of
the Executive’s employment, and for a period of 24 months following the
effective date of the termination of the Executive’s employment for any reason
prior to a Change in Control and 24 months following the effective date of the
termination after a Change in Control, the Executive will not, either directly
or indirectly, for the Executive or for any third party, except as otherwise
agreed to in writing by the then CEO, solicit, induce, recruit, or cause any
other person who is then employed by the Company to terminate his/her employment
for the purpose of joining, associating, or becoming employed with any business
or activity that is engaged in the casual dining restaurant industry, the family
dining restaurant industry or any other segment of the restaurant industry in
which the Company may become involved after the date hereof and prior to the
date of any termination of employment.

 

12.           Remedies for Breach of Covenants of the Executive.

 

a.             The Company and the Executive specifically acknowledge and agree
that the foregoing covenants of the Executive in Sections 8, 9, 10 and 11 are
reasonable in content and scope and are given by the Executive for adequate
consideration.  The Company and the Executive further acknowledge and agree
that, if any court of competent jurisdiction or other appropriate authority
shall disagree with the parties’ foregoing agreement as to reasonableness, then
such court or other authority shall reform or otherwise the foregoing covenants
as reason dictates.

 

b.             The covenants set forth in Sections 8, 9, and 11 of this
Agreement, as provided in Section 13 or 14, shall continue to be binding upon
the Executive, notwithstanding the termination of the Executive’s employment
with the Company for any reason whatsoever.  Such covenants shall be deemed and
construed as separate agreements independent of any other provisions of this
Agreement and any other agreement between the Company and the Executive.  The
existence of any claim or cause of action by the Executive against the Company,
unless predicated on this Agreement,

 

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shall not constitute a defense to the enforcement by the Company of any or all
such covenants.  It is expressly agreed that the remedy at law for the breach of
any such covenant is inadequate and injunctive relief and specific performance
shall be available to prevent the breach or any threatened breach thereof.

 

c.             If the Executive breaches any of the covenants set forth in
Sections 8, 9, 10 and 11 of this Agreement, the Executive shall reimburse the
Company for (i) any equity-based compensation received by the Executive from the
Company during the twelve (12) month period preceding the breach, and (ii) any
profits realized from the sale of securities of the Company during such twelve
(12) month period.

 

13.           Termination.  This Agreement (other than Sections 8, 9, and 11, as
provided in Section 13 or 14, which shall survive any termination hereof for any
reason, including the expiration hereof due to non-renewal (an “Expiration”))
may be terminated as follows:

 

a.             The Company may terminate this Agreement and the Executive’s
employment hereunder at any time, with or without Cause, upon written notice to
the Executive.  The Executive may terminate this Agreement and the Executive’s
employment hereunder, at any time, with or without Good Reason.

 

b.             In the event of termination by the Company without Cause or by
the Executive for Good Reason, (i) the effective date thereof shall be stated in
a written notice to the Executive from the Board, which shall not be earlier
than 30 days from the date such written notice is delivered to the Executive,
(ii) the Executive shall be entitled to receive all Severance Payments under
Section 13(f), (iii) any unvested stock options, stock appreciation rights, and
any other equity-based awards subject to service or time vesting conditions held
by the Executive that would have vested during the twelve (12) month period
following the Executive’s termination will vest as of the day immediately
preceding the effective date of termination, (iv) any unvested equity-based
awards subject to any performance-based vesting conditions held by the Executive
will vest on a pro rata basis, based on the number of days of the Executive’s
employment during the applicable performance period, as of the day immediately
preceding the effective date of termination and shall be paid based on actual
performance during the applicable performance period through the date of the
Executive’s termination of employment, and (v) any stock options or stock
appreciation rights held by the Executive shall remain exercisable until the
earlier of 24 months after the date of termination or their original expiration
date.

 

c.             In the event of termination by the Company with Cause, the
Executive shall be entitled to receive only the Executive’s salary through such
date of termination, the reimbursement of properly documented reasonable
business expenses incurred through such date of termination, and any bonus
amounts as may be payable pursuant to the terms of any written plans in which
the Executive was a participant immediately prior to the effective date of the
termination.  The Executive shall also be entitled to exercise the Executive’s
rights under COBRA at the Executive’s expense.

 

d.             The following shall constitute “Cause”:

 

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(i)            The willful failure by the Executive to substantially perform the
Executive’s duties with the Company (other than any such failure resulting from
the Executive’s incapacity due to physical or mental illness), after a written
demand for substantial performance is delivered to the Executive by the Board,
which demand specifically identifies the manner in which the Board believes that
the Executive has not substantially performed the Executive’s duties; or

 

(ii)           The Executive’s willful misconduct that is demonstrably and
materially injurious to the Company, monetarily or otherwise; or

 

(iii)          The Executive’s commission of such acts of dishonesty, fraud,
misrepresentation or other acts of moral turpitude as would prevent the
effective performance of the Executive’s duties; or

 

(iv)          The Executive’s conviction or plea of no contest to a felony or a
crime of moral turpitude.

 

For purposes of this subsection d., no act, or failure to act, on the
Executive’s part shall be deemed “willful” unless done, or omitted to be done,
by the Executive not in good faith and without the reasonable belief that the
Executive’s action or omission was in the best interest of the Company. 
Notwithstanding the foregoing, the Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of a
majority of the non-employee members of the Board at a meeting of such members
(after reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive’s counsel, to be heard before such members of the
Board), finding that the Executive has engaged in the conduct set forth above in
this subsection d. and specifying the particulars thereof in detail.

 

e.             The Executive shall have “Good Reason” to effect a termination in
the event that the Company (i) breaches its obligations to pay any salary,
benefit or bonus due hereunder, or (ii) requires the Executive to relocate more
than 50 miles from the Company’s headquarters [or other current location if not
now located at headquarters], (iii) assigns to the Executive any duties
inconsistent with the Executive’s position with the Company or significantly and
adversely alters the nature or status of the Executive’s responsibilities or the
conditions of the Executive’s employment, or (iv) reduces the Executive’s base
salary and/or bonus opportunity, except for across-the-board reductions
similarly affecting all management personnel of the Company and all management
personnel of any corporation or other entity which is in control of the Company;
and in the event of any of (i), (ii), (iii) or (iv), the Executive has given
written notice to the Board as to the details of the basis for such Good Reason
within thirty (30) days following the date on which the Executive alleges the
event giving rise to such Good Reason occurred, the Company has failed to
provide a reasonable cure within thirty (30) days after its receipt of such
notice and the effective date of the termination for Good Reason occurs within
180 days after the initial existence of the facts or circumstances

 

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constituting Good Reason.  In the event of a termination by the Executive with
Good Reason, the Executive will be entitled to all Severance Payments under
Section 13(f).

 

f.              The “Severance Payments” consist of the following and, subject
to subsection h. of Section 20, shall be paid as follows:  (i) an amount paid on
the tenth business day following the effective date of such termination in one
lump sum equal to one (1) times the sum of (A) the Executive’s annual Base
Salary, at the then current effective annual rate, plus (B) the average of the
Executive’s actual bonus attributable to each of the preceding three (3) fiscal
years; (ii) the reimbursement of properly documented reasonable business
expenses incurred through the date of termination which shall be paid on the
tenth business day following the effective date of such termination; and
(iii) the payment by the Company of premiums on behalf of the Executive, for
coverage substantially similar to that provided under the Company’s health,
disability and group term life insurance plans, at the same cost to the
Executive as was effective immediately prior to termination, and for so long as
the Executive elects to continue such coverage up to a 12 month period.  To the
extent that substantially similar health and welfare benefits become available
to the Executive from a subsequent employer, the Company will set off against
the benefits payable hereunder any benefits received by the Executive from any
other source.  The Executive agrees to notify the Company within 30 days after
substantially similar health and welfare benefits become available to her from a
subsequent employer.

 

g.             In the event of any termination of the Executive other than by
the Executive for Good Reason or by the Company without Cause, participation by
the Executive in all compensation and benefit plans of the Company will cease
upon the effective termination date and all unvested bonuses, equity awards and
other like items will immediately lapse.  In the event of any termination of the
Executive, all amounts owed by the Executive to the Company for any reasons
whatsoever will become immediately due and payable and the Company will transfer
to the Executive any term life insurance policy maintained by the Company for
the Executive’s benefit.

 

14.           Termination After Change in Control.  If within 24 months
following a Change in Control, as defined below, the employment of the Executive
is terminated by the Company without Cause or by the Executive for Good Reason
then the provisions of Section 13 shall not apply and the following shall occur:

 

a.             Subject to subsection h. of Section 20, on the tenth business day
following the effective date of such termination, the Executive shall receive
the following: (i) a lump sum payment equal to two (2) times the sum of (A) the
Executive’s Base Salary in effect immediately prior to the change in control,
plus (B) the average of the Executive’s actual bonus attributable to each of the
preceding three (3) fiscal years; and (ii) an amount paid in one lump sum equal
to the Executive’s prorated bonus for the then current fiscal year based on
actual performance prior to the date of termination.

 

b.             The Company shall pay premiums on behalf of the Executive, for
coverage substantially similar to that provided under the Company’s health,
disability and group term life insurance plans, at the same cost to the
Executive as was effective immediately prior to termination, and for so long as
the Executive elects to continue such coverage up to a 24

 

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month period.  To the extent that substantially similar health and welfare
benefits become available to the Executive from a subsequent employer, the
Company will set off against the benefits payable hereunder any benefits
received by the Executive from any other source.

 

c.             Any unvested stock options, stock appreciation rights, and other
equity-based awards held by the Executive will vest as of the day immediately
preceding the effective date of termination, all unvested Restricted Share
awards held by the Executive will vest as of the day immediately preceding the
effective date of termination and all restrictions will immediately be removed
and deemed to have been satisfied, and any stock options or stock appreciation
rights held by the Executive shall remain exercisable until the earlier of 24
months after the date of termination or their original expiration date.

 

d.             The Executive shall be bound by the nonsolicitation provisions of
Section 11, which shall remain in full force and effect for a period of 24
months following the effective date of Executive’s termination.

 

15.           Definition of Change in Control.  A “Change in Control” shall be
deemed to have occurred if:

 

a.             any “person,” as such term is used in Sections 13(d) and 14(d) of
the “Exchange Act (other than the Company; any trustee or other fiduciary
holding securities under an employee benefit plan of the Company; or any company
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of Stock of the Company)
is or becomes after the Effective Date the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such person any
securities acquired directly from the Company or its affiliates) representing
40% or more of the combined voting power of the Company’s then outstanding
securities; or

 

b.             during any period of two consecutive years (not including any
period prior to the Effective Date), individuals who at the beginning of such
period constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in subsections a., c. or d. of this Section 15
whose election by the Board or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds ( 2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute at least a majority thereof; or

 

c.             the consummation of a merger or consolidation of the Company with
any other corporation, other than (A) a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity), in combination with
the ownership of any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, at least 75% of the combined voting power
of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or

 

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consolidation or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no person
acquires more than 50% of the combined voting power of the Company’s then
outstanding securities; or

 

d.             the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets;

 

provided, that with respect to any non-qualified deferred compensation that
becomes payable on account of the Change in Control, the transaction or event
described in subsection a., b., c. or d. also constitutes a “change in control
event,” as defined in Treasury Regulation §1.409A-3(i)(5) if required in order
for the payment not to violate Section 409A of the Code..

 

16.           Parachute Payment Matters.

 

Notwithstanding any other provision of this Agreement, if by reason of
Section 280G of the Code any payment or benefit received or to be received by
the Executive in connection with a Change in Control or the termination of the
Executive’s employment (whether payable pursuant to the terms of this Agreement
(“Contract Payments”) or any other plan, arrangements or agreement with the
Company or an Affiliate (as defined below) (collectively with the Contract
Payments, “Total Payments”)) would not be deductible (in whole or part) by the
Company, an Affiliate or other person making such payment or providing such
benefit, then the Contract Payments shall be reduced and, if Contract Payments
are reduced to zero, other Total Payments shall be reduced until no portion of
the Total Payments is not deductible by reason of Section 280G of the Code,
provided, however, that no such reduction shall be made unless the net after-tax
benefit received by the Executive after such reduction would exceed the net
after-tax benefit received by the Executive if no such reduction was made.  The
foregoing determination and all determinations under this Section 16 shall be
made by the Accountants (as defined below).  For purposes of this section, “net
after-tax benefit” shall mean (i) the Total Payments that would constitute
“parachute payments” within the meaning of Section 280G of the Code, less
(ii) the amount of all federal, state and local income taxes payable with
respect to such payments calculated at the maximum marginal income tax rate for
each year in which the foregoing shall be paid to the Executive (based on the
rate in effect for such year as set forth in the Code as in effect at the time
of the first payment of the foregoing), less (iii) the amount of excise taxes
imposed with respect to the payments and benefits described in (i) above by
Section 4999 of the Code.  For purposes of the foregoing determinations, (a) no
portion of the Total Payments the receipt or enjoyment of which the Executive
shall have effectively waived in writing prior to the date of payment of any
Contract Payment shall be taken into account; (b) no portion of the Total
Payments shall be taken into account which in the opinion of the Accountants
does not constitute a “parachute payment” within the meaning of
Section 280G(b)(2) of the Code (without regard to subsection (A)(ii) thereof);
(c) the Contract Payments (and, thereafter, other Total Payments) shall be
reduced only to the extent necessary so that the Total Payments in their
entirety constitute reasonable compensation for services actually rendered
within the meaning of Section 280G(b)(4) of the Code, in the opinion of the
Accountants;  and (d) the value of any non-cash benefit or any deferred payment
or benefit included in the Total Payments shall be determined by the Accountants
in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. 
For purposes of this Section 16, the term

 

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“Affiliate” means the Company’s successors, any Person whose actions result in a
Change in Control or any company affiliated (or which, as a result of the
completion of the transactions causing a Change in Control shall become
affiliated) with the Company within the meaning of Section 1504 of the Code and
“Accountants” shall mean the Company’s independent certified public accountants
serving immediately prior to the Change in Control, unless the Accountants are
also serving as accountant or auditor for the individual, entity or group
effecting the Change in Control, in which case the Company shall appoint another
nationally recognized public accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accountants
hereunder).  For purposes of making the determinations and calculations required
herein, the Accountants may make reasonable assumptions and approximations
concerning applicable taxes and may rely on reasonable, good faith
interpretations concerning the application of Sections 280G and 4999 of the
Code, provided that the Accountant’s determinations must be made on the basis
of  “substantial authority” (within the meaning of Section 6662 of the Code). 
All fees and expenses of the Accountants shall be borne solely by the Company.

 

17.           Arbitration of Disputes.

 

a.             Any dispute or claim arising out of or relating to this Agreement
or any termination of the Executive’s employment, other than with respect to
Sections 8 through 12, shall be settled by final and binding arbitration in the
greater Los Angeles metropolitan area in accordance with the Commercial
Arbitration rules of the American Arbitration Association, and judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.

 

b.             Except as provided by applicable law, the fees and expenses of
the arbitration panel shall be shared equally by the Executive and the Company.

 

c.             Except as provided by applicable law, the prevailing party in any
arbitration brought hereunder shall be entitled to an award of its costs
(including expenses and attorneys’ fees), incurred in such arbitration.

 

18.           No Mitigation.  The Executive shall have no duty to attempt to
mitigate the level of benefits payable by the Company to the Executive
hereunder, by seeking other employment or otherwise.  To the extent that
substantially similar health and welfare benefits become available to the
Executive from a subsequent employer, the Company will discontinue the
Executive’s coverage; otherwise, the Company shall not be entitled to set off
against the amounts payable hereunder any amounts received by the Executive from
any other source, including any subsequent employer.

 

19.           Notices.  Any notices to be given hereunder by either party to the
other may be effected either by personal delivery in writing or by mail,
registered or certified, postage prepaid, with return receipt requested.  Mailed
notices shall be addressed as follows:

 

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a.             If to the Company:

 

DineEquity, Inc.

450 N. Brand Boulevard

Glendale, CA 91410

Attn:  General Counsel

 

b.             If to the Executive:

 

 

Either party may change its address for notice by giving notice in accordance
with the terms of this Section 18.

 

20.           General Provisions.

 

a.             Law Governing.  This Agreement shall be governed by and construed
in accordance with the laws of the State of California.

 

b.             Invalid Provisions.  If any provision of this Agreement is held
to be illegal, invalid, or unenforceable, then such provision shall be fully
severable and this Agreement shall be construed and enforced as if such illegal,
invalid, or unenforceable provision had never comprised a part hereof; and the
remaining provisions hereof shall remain in full force and effect and shall not
be affected by the illegal, invalid, or unenforceable provision or by its
severance herefrom.  Furthermore, in lieu of such illegal, invalid, or
unenforceable provision there shall be added automatically as a part of this
Agreement a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and still be legal, valid or
enforceable.

 

c.             Entire Agreement.  This Agreement sets forth the entire
understanding of the parties and supersedes all prior agreements or
understandings, whether written or oral, with respect to the subject matter
hereof and all agreements, acknowledgments, designations and directions of the
Executive made or given under any Company policy statement or benefit program. 
No terms, conditions, warranties, other than those contained herein, and no
amendments or modifications hereto shall be binding unless made in writing and
signed by the parties hereto.

 

d.             Binding Effect.  This Agreement shall extend to and be binding
upon and inure to the benefit to the parties hereto, their respective heirs,
representatives, successors and assigns.  This Agreement may not be assigned by
the Executive, but may be assigned by the Company to any person or entity that
succeeds to the ownership or operation of the business in which the Executive is
primarily employed by the Company.

 

e.             Waiver.  The waiver by either party hereto of a breach of any
term or provision of this Agreement shall not operate or be construed as a
waiver of a subsequent

 

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breach of the same provision by any party or of the breach of any other term or
provision of this Agreement.

 

f.              Titles.  Titles of the paragraphs herein are used solely for
convenience and shall not be used for interpretation or construing any work,
clause, paragraph, or provision of this Agreement.

 

g.             Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument.

 

h.             Compliance with IRC Section 409A.   The following provisions
shall apply to this Agreement with respect to Section 409A of the Code:

 

(i)            The lump sum cash severances payments which are payable under
clause (i) of subsection f. of Section 14 and under subsection a. of Section 14
are intended to satisfy the short-term deferral exemption under Treasury
Regulation Section 1.409A-1(b)(4) and shall be made not later than the last day
of the applicable two and one-half month period with respect to such payment,
within the meaning of Treasury Regulation Section 1.409A-1(b)(4).

 

(ii)  If any provision of this Agreement (or of any award of compensation,
including equity compensation or benefits) would cause Executive to incur any
additional tax or interest under Section 409A of the Code or any regulations or
Treasury guidance promulgated thereunder, the Company shall, after consulting
with Executive, reform such provision to comply with Section 409A of the Code,
provided that the Company agrees to maintain, to the maximum extent practicable,
the original intent and economic benefit Executive of the applicable provision
without violating the provisions of Section 409A of the Code.

 

(III)  NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN THIS SUBSECTION H., IF
EXECUTIVE IS DEEMED ON THE TERMINATION DATE TO BE A “SPECIFIED EMPLOYEE” WITHIN
THE MEANING OF THAT TERM UNDER SECTION 409A(A)(2)(B) OF THE CODE, THEN WITH
REGARD TO ANY PAYMENT OR THE PROVISION OF ANY BENEFIT THAT IS REQUIRED TO BE
DELAYED IN COMPLIANCE WITH SECTION 409A(A)(2)(B) OF THE CODE SUCH PAYMENT OR
BENEFIT SHALL NOT BE MADE OR PROVIDED (SUBJECT TO THE LAST SENTENCE HEREOF)
PRIOR TO THE EARLIER OF (A) THE EXPIRATION OF THE SIX (6)-MONTH PERIOD MEASURED
FROM THE DATE OF THE EXECUTIVE’S “SEPARATION FROM SERVICE” (AS SUCH TERM IS
DEFINED UNDER SECTION 409A OF THE CODE) OR (B) THE DATE OF THE EXECUTIVE’S DEATH
(THE “DELAY PERIOD”).  UPON THE EXPIRATION OF THE DELAY PERIOD, ALL PAYMENTS AND
BENEFITS DELAYED PURSUANT TO THIS SECTION (WHETHER THEY WOULD HAVE OTHERWISE
BEEN PAYABLE IN A SINGLE SUM OR IN INSTALLMENTS IN THE ABSENCE OF SUCH DELAY)
SHALL BE PAID OR REIMBURSED EXECUTIVE IN A LUMP SUM, AND ANY REMAINING PAYMENTS
AND BENEFITS DUE UNDER THIS AGREEMENT SHALL BE PAID OR PROVIDED IN ACCORDANCE
WITH THE NORMAL PAYMENT DATES SPECIFIED FOR THEM HEREIN.  NOTWITHSTANDING THE
FOREGOING, TO THE EXTENT THAT THE FOREGOING APPLIES TO THE PROVISION OF ANY
ONGOING WELFARE BENEFITS TO EXECUTIVE THAT WOULD NOT BE REQUIRED TO BE DELAYED
IF THE PREMIUMS THEREFORE WERE PAID BY EXECUTIVE, EXECUTIVE SHALL PAY THE FULL
COST OF PREMIUMS FOR SUCH WELFARE BENEFITS DURING THE DELAY PERIOD AND THE
COMPANY SHALL PAY EXECUTIVE AN AMOUNT EQUAL TO THE AMOUNT OF SUCH PREMIUMS PAID
BY EXECUTIVE DURING THE DELAY PERIOD PROMPTLY AFTER ITS CONCLUSION.

 

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IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement
as of the date and year first above written.

 

THIS AGREEMENT CONTAINS AN ARBITRATION CLAUSE.

 

 

EXECUTIVE:

 

DineEquity, Inc..:

 

 

 

 

 

 

 

 

By:

 

Richard Celio

 

Julia A. Stewart

 

 

Chief Executive Officer

 

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Exhibit A – Executive’s Authorities and Duties

 

During the Employment Period, (A) the Executive shall serve as Chief Restaurant
Support Officer of the Company, reporting directly to the CEO, with duties,
authorities and responsibilities commensurate with such title and office and
(B) the Executive’s services shall be performed at the Company’s headquarters
Glendale, California.

 

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