Exhibit 10.16
DINEEQUITY, INC.
EXECUTIVE SEVERANCE
AND
CHANGE IN CONTROL
POLICY
1. Purpose. The DineEquity, Inc. Executive Severance and
Change in Control Policy (“the Policy”) is established
effective October 13, 2008, to provide severance benefits under
specified circumstances to Executives (as defined below) of
DineEquity, Inc. or its wholly-owned subsidiaries (collectively the
“Company”) who are in a position to contribute
materially to the success of the Company. As consideration
for severance benefits under this Policy, the Executive shall
release the Company from any and all actions, suits, proceedings,
claims and demands related to employment with the Company and to
the termination by signing a waiver and release document in a form
provided by the Company. Such document shall include a statement
that benefits under this Policy are conditioned upon the
Company’s receipt of a signed release.
2. Administration . This Policy is administered by the Chief
Executive Officer of the Company. The Chief Executive Officer has
discretion and authority with respect to the administration,
interpretation and application of the Policy, except as expressly
limited by the terms of the Policy. The Chief Executive Officer
must receive approval from the Compensation Committee of the Board
of Directors (the “Committee”) in order to authorize
severance benefits outside of the terms of this Policy to the
employees covered by this Policy.
3. Participation. The Committee shall select the Executives who
are eligible for severance under this Policy (the
“Participants”). Executives who are eligible for
Severance under this Policy are listed by job title on Exhibit A,
which is attached hereto and incorporated by reference
herein. Additions to or deletions from the list of
Participants shall be reflected in an amendment to Exhibit A to
this Policy approved by the Committee. An Executive who is
entitled to severance benefits pursuant to a separate written
agreement with the Company shall not be eligible for severance
benefits under this Policy whether or not his or her position is
listed on Exhibit A.
4. Definitions.
a. Base Salary.
“Base Salary” means the fixed annual compensation
(excluding bonuses and other benefits) paid to an employee
regularly each pay period for performing assigned job
responsibilities.
b. Cause. “Cause” means, as determined
by the Company,
(i)
The willful failure by the Participant to substantially perform his
or her duties with the Company (other than any such failure
resulting from the Participant’s incapacity due to physical
or mental illness);
(ii)
The Participant’s willful misconduct that is demonstrably and
materially injurious to the Company, monetarily or
otherwise;
(iii)
The Participant’s commission of such acts of dishonesty,
fraud, misrepresentation or other acts of moral turpitude as would
prevent the effective performance of the Participant’s
duties; or
(iv)
The Participant’s conviction or plea of no contest to a
felony or a crime of moral turpitude.
c. Change in Control.
A “Change in
Control” shall be deemed to have occurred if:
(i)
any “person,” as such term is used in Sections 13(d)
and 14(d) of the Securities and Exchange Act of 1934, as amended,
(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
35% or more of the combined voting power of the Company’s
then outstanding securities;
(ii)
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 (i), (iii) or (iv) of this Section 4.c.) 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
(iii)
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
(iv).
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.
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d. Executive.
“Executive” means
an employee of the Company with the title of vice president or
higher.
e. Good Reason. A Participant shall have “Good
Reason” to effect a voluntary termination of his or her
employment in the event that the Company (i) breaches its
obligations to pay any salary, benefit or bonus due to him or her,
(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 Committee or the Board of Directors 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 90 days after the initial existence of the facts or
circumstances constituting Good Reason.
f. Severance Benefits.
“Severance
Benefits” means the benefits set forth in Section 5 of this
Policy.
g. Severance Benefits Subsequent to a
Change in Control. “Severance Benefits Subsequent
to a Change in Control” means the benefits set forth in
Section 6 of this Policy.
h. Years of Service.
“Years of Service” means the total of all
full
