Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is made effective as of September 12,
2011 by and between DineEquity, Inc. f/k/a IHOP Corp., a Delaware corporation
(the “Company”), and Tom Emrey (the “Executive”).

 

WHEREAS, the Company desires to employ Executive on the terms and conditions set
forth in this Agreement; and

 

WHEREAS, the Executive is willing to render services to the Company on the terms
and conditions set forth in this Agreement.

 

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 Financial
Officer (hereinafter referred to as the “CFO”) 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 September 12, 2011.  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 the then current term. Such notice may be given for any or no
reason.   This Agreement is subject to earlier termination as hereinafter
provided.

 

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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 $455,000 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 seventy-five (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 basis for reasonable business expenses incurred in
the performance of the Executive’s duties under this Agreement.

 

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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.   The Executive will hold in trust for the sole right and
benefit of the Company, and will transfer, convey, release and assign to the
Company all of the Executives’ right, title, and interest, if any, in and to any
and all Discoveries, whether or not patentable or registrable under copyright or
similar laws, that the Executive  has solely or jointly conceived or developed
or reduced to practice, or caused to be conceived or developed or reduced to
practice, during the period of time that the Executive is employed with the
Company.

 

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Notwithstanding the foregoing, the Executive does not hereby assign and is not
required to offer assign to the Company any invention that fully qualified under
California Labor Code Section 2870, which provides:

 

(a) Any provision in an employment agreement which provides that an employee
shall assign, or offer to assign, any of his or her rights in an invention to
his or her employer shall not apply to an invention that the employee developed
entirely on his or her own time without using the employer’s equipment,
supplies, facilities, or trade secret information except for those inventions
that either:

 

(1) Relate at the time of conception or reduction to practice of the invention
to the employer’s business, or actual or demonstrably anticipated research or
development of the employer; or

 

(2) Result from any work performed by the employee for the employer.

 

(b) To the extent a provision in an employment agreement purports to require an
employee to assign an invention otherwise excluded from being required to be
assigned under subdivision (a), the provision is against the public policy of
this state and is unenforceable.

 

The Executive will assist the Company, or its designee, at the Company’s
expense, in every proper way to secure and enforce the Company’s rights in the
Discoveries as set forth above and any copyrights, patents, mask work rights or
other intellectual property rights relating thereto in any and all countries,
including the disclosure to the Company of all pertinent information and data
with respect thereto, the execution of all applications, specifications, oaths,
assignments and all other instruments which the Company shall deem necessary in
order to apply for, obtain and maintain such rights and in order to assign and
convey to the Company, its successors, assigns and nominees the sole and
exclusive rights, title and interest in and to such Discoveries, and any
copyrights, patents, mask work rights or other intellectual property rights
relating thereto.  The Executive will execute or cause to be executed, when it
is in the Executive’s power to do so, any such instrument or papers shall
continue after the termination of my employment.  If the Company is unable
because of the Executive’s mental or physical incapacity or for any other reason
to secure the Executive’s signature to apply for or to pursue any application
for any United States or foreign patents or copyright registrations covering
Discoveries assigned to the Company as set forth above, then the Executive
hereby irrevocably designates and appoints the Company and its duly authorized
officers and agents as the Executive’s agent and attorney in fact, to act for
and in the Executive’s behalf and stead to execute and file any such
applications and to do all other lawfully permitted acts to further the
prosecution and issuance of letters patent or copyright registrations thereon
with the same legal force and effect as if executed by the Executive.

 

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,

 

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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.           Non-Solicitation.  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, 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

 

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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 and
(ii) the Executive shall be entitled to receive 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.  In addition, subject to the Executive’s entering into and not
revoking the General Release (the “Release”) set forth in Exhibit B attached
hereto (i) the Executive shall be entitled to receive all Severance Payments
under Section 13(f), (ii) any unvested stock options, stock appreciation rights,
and any other equity-based awards subject to service or time vesting conditions
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, (iii) any unvested equity-based awards
subject to any performance-based 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 and shall be paid based on actual performance during the applicable
performance period through the date of the Executive’s termination of
employment, and (iv) 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.  The Severance Payment under
Section 13(f) shall be made to the Executive on the eighth (8th) day after the
delivery and non-revocation of the Release, but in no event later than the  the
fifteenth (15th) day of the third month following the end of the Executive’s
taxable year in which Executive’s employment terminates.

 

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

 

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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”:

 

(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, (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

 

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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 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, 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 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.           Change in Control and Termination Thereafter.  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 and subject to the
Executive’s entering into and not revoking the Release , 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.  Such payment
shall be made to the Executive on the eighth (8th) day after the delivery and
non-revocation of the

 

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Release, but in no event later than the fifteenth (15th) day of the third month
following the end of the Executive’s taxable year in which Executive’s
employment terminates.

 

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 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 non-solicitation provisions
of Section 11, which shall remain in full force and effect for a period of 24
months following the effective date of the 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

 

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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 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 16,
“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

 

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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 “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

 

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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:

 

a. If to the Company:

 

DineEquity, Inc.

450 N. Brand Boulevard

Glendale, CA 91410

Attn: General Counsel

 

b. If to the Executive:

 

Tom Emrey

450 Kenneth Road

Glendale, California 91202

 

Either party may change its address for notice by giving notice in accordance
with the terms of this Section 19.

 

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 here from.  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

 

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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 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 13 and Subsection a. 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 the 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 the 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 the 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

 

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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 subsection h. (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 the 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 the Executive that would not be
required to be delayed if the premiums therefore were paid by Executive, the
Executive shall pay the full cost of premiums for such welfare benefits during
the Delay Period and the Company shall pay the Executive an amount equal to the
amount of such premiums paid by the Executive during the Delay Period promptly
after its conclusion.

 

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.:

 

 

 

 

 

 

/s/ Tom Emrey

 

By:

/s/ John Jakubek

 

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Exhibit A – Executive’s Authorities and Duties

 

During the Employment Period, (A) the Executive shall serve as Chief Financial
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.

 

Executive will lead all aspects of the Finance function. He will be expected to:

 

·                                          Maintain the company’s fiscal
integrity.

·                                          Build and direct a first-class
finance team utilizing the requisite systems and processes to support both
corporate and business unit activities. This will include selection,
development, appraisal, and compensation of all finance employees.

·                                          Oversee a forward-looking financial
planning and analysis capability throughout the corporation, with regular
communication between operating leaders and the finance team.

·                                          Provide strong oversight of financial
controls, measurements, and systems.

·                                          Serve as a key participant/principal
thinker in charting and implementing the company’s strategic plan, including
continued domestic and international growth.

·                                          Partner with the Chief Executive
Officer and other senior officers of the Executive Team.

·                                          In concert with the Chief Executive
Officer and Executive Team, act as a catalyst for the cultural change necessary
to support the change initiatives of the company.

·                                          Develop and prioritize capitalization
strategies and manage the overall balance sheet.

·                                          Interface with the Institutional and
Capital Markets.

·                                          Interface with the Audit Committee on
a required basis and as needed, the Board of Directors.

·                                          Partner with the CEO for regular
interaction with Wall Street.

·                                          Provide support to the franchisees in
each business unit (i.e., analytics, financing, etc.).

 

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Exhibit B – General Release

 

1.     General Release by Executive.   In consideration of the benefits provided
under Section 13 or 14, as applicable of the Employment Agreement by and between
Tom Emrey (“Executive”)and DineEquity, Inc. f/k/a IHOP Corp., a Delaware
corporation, and subject to Section 2 below, Executive hereby releases and
discharges forever the Company, and each of its divisions, affiliates and
subsidiaries, and each of their present and former directors, officers,
employees, trustees, agents, attorneys, administrators, plans, plan
administrators, insurers, parent corporations, subsidiaries, divisions, related
and affiliated companies and entities, shareholders, members, representatives,
predecessors, successors and assigns, and all persons acting by, through, under
or in concert with them (hereinafter collectively referred to as the “Executive
Released Parties”), from and against all liabilities, claims, demands, liens,
causes of action, charges, suits, complaints, grievances, contracts, agreements,
promises, obligations, costs, losses, damages, injuries, attorneys’ fees, and
other legal responsibilities (collectively referred to as “Claims”), of any form
whatsoever, including, but not limited to, any claims in law, equity, contract,
tort, or any claims under the California Labor Code, the California Civil Code,
the California Business and Professions Code, the California Fair Employment and
Housing Act, Title VII of the Civil Rights Act of 1964, as amended, the
Americans With Disabilities Act, the Age Discrimination in Employment Act
(“ADEA”), as amended by the Older Workers Benefit Protection Act of 1990 (29
U.S.C. §§ 621, et seq.), the Sarbanes-Oxley Act of 2002, the Employee Retirement
Income Security Act of 1974, or any other local ordinance or federal or state
statute, regulation or constitution, whether known or unknown, unforeseen,
unanticipated, unsuspected or latent, which Executive or Executive’s successors
in interest now own or hold, or have at any time heretofore owned or held, or
may at any time own or hold by reason of any matter or thing arising from any
cause whatsoever prior to the date of execution of this Agreement, and without
limiting the generality of the foregoing, from all claims, demands and causes of
action based upon, relating to, or arising out of:  (a) Executive’s employment
relationship with the Company and/or any of the Executive Released Parties and
the termination of that relationship; (b) Executive’s relationship as a
shareholder, optionholder or holder of any interest whatsoever in any of the
Executive Released Parties; (c) Executive’s relationship with any of the
Executive Released Parties as a member of any boards of directors; and (d) any
other type of relationship (business or otherwise) between Executive and any of
the Executive Released Parties.

 

2.     Exclusions from General Release.           Notwithstanding the generality
of Section 1, Executive does not release the following claims and rights:

 

(a)                                  Executive’s rights under this Agreement;

 

(b)                                 Executive’s rights as a shareholder and
option holder in the Company

 

(c)                                  any claims for unemployment compensation or
any state disability insurance benefits pursuant to the terms of applicable
state law;

 

(d)                                 claims to continued participation in certain
of the Company’s group benefit plans pursuant to the terms and conditions of the
federal law

 

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known as COBRA or the comparable California law known as Cal-COBRA;

 

(e)                                  any rights vested prior to the date of
Executive’s termination of employment to benefits under any Company-sponsored
retirement or welfare benefit plan;

 

(f)                                    Executive’s rights, if any, to indemnity
and/or advancement of expenses pursuant to applicable state law, the Company’s
articles, bylaws or other corporate governance documents, and/or to the
protections of any director’ and officers’ liability policies of the Company or
any of its affiliates; and

 

(g)                                 any other right that may not be released by
private agreement.

 

a.                                       (collectively, the “Executive
Unreleased Claims”).

 

3.     Rights Under the ADEA.            Without limiting the scope of the
foregoing release of Claims in any way, Executive certifies that this release
constitutes a knowing and voluntary waiver of any and all rights or claims that
exist or that Executive has or may claim to have under ADEA.  This release does
not govern any rights or claims that might arise under the ADEA after the date
this Agreement is signed by the parties.  Executive acknowledges that:  (a) the
consideration provided pursuant to this Agreement is in addition to any
consideration that he would otherwise be entitled to receive; (b) he has been
and is hereby advised in writing to consult with an attorney prior to signing
this Agreement; (c) he has been provided a full and ample opportunity to review
this Agreement, including a period of at least twenty-one (21) days within which
to consider it; (d) to the extent that Executive takes less than twenty-one (21)
days to consider this Agreement prior to execution, Executive acknowledges that
he had sufficient time to consider this Agreement with counsel and that he
expressly, voluntarily and knowingly waives any additional time; and
(e) Executive is aware of his right to revoke this Agreement at any time within
the seven (7)-day period following the date on which he executes the Agreement
and that the Agreement shall not become effective or enforceable until the
calendar day immediately following the expiration of the seven (7)-day
revocation period (the “Effective Date”).  Executive further understands that he
shall relinquish any right he has to the consideration specified in this
Agreement if he exercises his right to revoke it, and shall instead receive only
such consideration as provided in his Employment Agreement.  Notice of
revocation must be made in writing and must be received by the Senior Vice
President, Human Resources of the Company, no later than 5:00 p.m. (Pacific
Time) on the seventh (7th) calendar day immediately following the date on which
Executive executes this Agreement.

 

4.     Unknown Claims.        It is further understood and agreed that Executive
waives all rights under Section 1542 of the California Civil Code and/or any
statute or common law principle of similar effect in any jurisdiction with
respect to any Claims other than the Executive Unreleased Claims.  Section 1542
reads as follows:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT

 

B-2

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TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.”

 

Notwithstanding the provisions of Section 1542 or any statute or common law
principle of similar effect in any jurisdiction, and for the purpose of
implementing a full and complete release and discharge of all claims, Executive
expressly acknowledges that this Agreement is intended to include in its effect,
without limitation, all claims which Executive does not know or suspect to exist
in Executive’s favor at the time of execution hereof, and that the general
release agreed upon contemplates the extinguishment of any such claims.

 

5.     Covenant Not To Sue.   Executive represents and covenants that he has not
filed, initiated or caused to be filed or initiated, any Claim, charge, suit,
complaint, grievance, action or cause of action against the Company or any of
the Executive Released Parties.  Except to the extent that such waiver is
precluded by law, Executive further promises and agrees that he will not file,
initiate, or cause to be filed or initiated any Claim, charge, suit, complaint,
grievance, action, or cause of action based upon, arising out of, or relating to
any Claim, demand, or cause of action released herein, nor shall Executive
participate, assist or cooperate in any Claim, charge, suit, complaint,
grievance, action or proceeding regarding any of the Executive Released Parties,
whether before a court or administrative agency or otherwise, unless required to
do so by law.  The parties acknowledge that this Agreement will not prevent the
Executive from filing a charge with the Equal Employment Opportunity Commission
(or similar state agency) or participating in any investigation conducted by the
Equal Employment Opportunity Commission (or similar state agency); provided,
however, that Executive acknowledges and agrees that any Claims by Executive, or
brought on his behalf, for personal relief in connection with such a charge or
investigation (such as reinstatement or monetary damages) would be and hereby
are barred.

 

6.     No Assignment.   Executive represents and warrants that he has made no
assignment or other transfer, and covenants that he will make no assignment or
other transfer, of any interest in any Claim which he may have against the
Executive Released Parties, or any of them.

 

7.     Indemnification of Executive Released Parties.   Executive agrees to
indemnify and hold harmless the Executive Released Parties, and each of them,
against any loss, claim, demand, damage, expenses, or any other liability
whatsoever, including reasonable attorneys’ fees and costs resulting from: 
(a) any breach of this release by Executive or Executive’s successors in
interest; (b) any assignment or transfer, or attempted assignment or transfer,
of any Claims released hereunder; or (c) any action or proceeding brought by
Executive or Executive’s successors in interest, or any other, if such action or
proceeding arises out of, is based upon, or is related to any Claims, demands,
or causes of action released herein; provided, however, that this
indemnification provision shall not apply to any challenge by Executive of the
release of claims under the ADEA, Title VII, or similar discrimination laws, and
any right of the Release Parties to recover attorneys’ fees and/or expenses for
such breach shall be governed by applicable law.  It is the intention of the
parties that this indemnity does not require payment as a condition precedent to
recovery by any of the Executive Released Parties under this indemnity.

 

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8.     Non-Disparagement by Executive.   Executive agrees not to publish or
disseminate, directly or indirectly, any statements, whether written or oral, or
other verbal or non-verbal communications that clearly communicate an
affirmative or negative response to a question or statement, that are or could
be harmful to or reflect negatively on any of the Executive Released Parties
and/or their businesses, or that are otherwise disparaging of any of the
Executive Released Parties and/or their businesses, or any of their past or
present or future officers, directors, employees, advisors, or agents in their
capacity as such, or any of their policies, procedures, practices,
decision-making, conduct, professionalism or compliance with standards.  For
avoidance of doubt, statements by Executive, which Executive reasonably and in
good faith believes to be accurate and truthful, made to the Company, or its
subsidiaries, affiliates or representatives pursuant to Executive’s obligations
under Section 10 hereof shall not be deemed a violation of this Section 8.

 

9.     Cooperation.   Executive agrees to cooperate fully with the Company and
its subsidiaries and affiliates in transitioning his duties in response to
reasonable requests for information about the business of the Company or its
subsidiaries or affiliates or Executive’s involvement and participation therein;
the defense or prosecution of any claims or actions now in existence or which
may be brought in the future against or on behalf of the Company or its
subsidiaries or affiliates which relate to event or occurrences that transpired
while Executive was employed by the Company; and in connection with any
investigation or review by any federal, state or local regulatory,
quasi-regulatory or self-governing authority (including, without limitation, the
Securities and Exchange Commission) as any such investigation or review relates
to events or occurrences that transpired while Executive was employed by the
Company.  Executive’s full cooperation shall include, but not be limited to,
being available to meet and speak with officers or employees of the Company
and/or its counsel at reasonable times and locations, executing accurate and
truthful documents, appearing at the Company’s request as a witness at
depositions, trials or other proceedings without the necessity of a subpoena,
and taking such other actions as may reasonably be requested by of the Company
and/or its counsel to effectuate the foregoing.  In requesting such services,
the Company will consider other commitments that Executive may have at the time
of the request, and Executive’s availability and obligations under this
Section shall in all instances reasonably be subject to Executive’s other
commitments.  The Company agrees to reimburse Executive for any reasonable,
out-of-pocket travel, hotel and meal expenses incurred in connection with
Executive’s performance of obligations pursuant to this Section for which
Executive has obtained prior, written approval from the Company, and the Company
shall pay Executive $200.00 per hour for any services performed by Executive at
the request of the Company pursuant to this Section 9.

 

10.   Truthful Testimony; Notice of Request for Testimony.   Nothing in this
Agreement is intended to or shall preclude either party from providing testimony
that such party reasonably and in good faith believes to be truthful in response
to a valid subpoena, court order, regulatory request or other judicial,
administrative or legal process or otherwise as required by law.  Executive
shall notify the Company in writing as promptly as practicable after receiving
any such request of the anticipated testimony and at least ten (10) days prior
to providing such testimony (or, if such notice is not possible under the
circumstances, with as much prior notice as is possible) to afford the Company a
reasonable opportunity to challenge the subpoena, court order or similar legal
process.  Moreover, nothing in this Agreement shall be construed or applied so
as to limit any person from providing candid statements that such party

 

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reasonably and in good faith believes to be truthful to any governmental or
regulatory body or any self-regulatory organization.

 

DATE

 

EXECUTIVE

 

 

 

 

 

 

 

 

 

 

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