Document:

Exhibit 10.3

 

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
Michael Archer (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 President, Applebee’s Business Unit and shall render
services at the principal business offices of Applebee’s Business Unit, 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 

 

 

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 $550,000 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 

 

11

 

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.

 

12

 

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:

  	
   

  
				

 

13

 

Exhibit A — Executive’s
Authorities and Duties

 

During the Employment Period, (A) the Executive shall serve as President,
Applebee’s Business Unit, 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 Applebee’s Business Unit
offices in Lenexa, Kansas.

 

14Exhibit 10.4

 

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
Julia A. Stewart (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 Executive Officer (hereinafter referred to as
the “CEO”) 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 

 

 

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 $875,000 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
100% 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 

 

2

 

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.

 

3

 

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 36 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, 

 

4

 

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 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, (iv)
any unvested equity-based awards subject to any performance-based vesting
conditions held by the Executive 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 (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”:

 

5

 

(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 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 

 

6

 

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 two (2) 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 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.  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. 
Immediately prior to the occurrence of a Change in Control, as defined
below, any unvested stock options, stock appreciation rights, and other
equity-based awards held by the Executive will vest, all unvested Restricted
Share awards held by the Executive will vest 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.  In addition, if within
24 months following a Change in Control, 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 three (3) 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 

 

7

 

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 36 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.                                       The
Executive shall be bound by the nonsolicitation provisions of Section 11,
which shall remain in full force and effect for a period of 36  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
consolidation or (B) a merger or consolidation effected to implement a
recapitalization of the 

 

8

 

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 “Affiliate” means the Company’s successors, any Person whose actions
result in a Change in 

 

9

 

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:

 

10

 

	
  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 

 

11

 

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.

 

12

 

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:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
				

 

13

 

Exhibit A – Executive’s Authorities and
Duties

 

During the Employment
Period, (A) the Executive shall serve as Chief Executive Officer of the
Company, reporting directly to the Board of Directors of the Company, as a
member of the Board and as Chairman of the Board, 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.

 

The Chief Executive
Officer shall report directly to the Board. 
All other officers of the Company shall report directly to the Chief
Executive Officer.

 

14

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