Exhibit 10.2
EMPLOYMENT
AGREEMENT
This Employment Agreement
(“Agreement”) is made effective as of November 1,
2008 by and between DineEquity, Inc. f/k/a IHOP Corp., a
Delaware corporation (the “ Company ”), and
Richard Celio (the “ Executive ”).
WHEREAS, the Company believes it to be in its best
interest to provide for continuity of management and to provide
protection for its valuable trade secrets and confidential
information; and
WHEREAS, the Company desires to employ the Executive and
the Executive is willing to render services to the Company on the
terms and conditions with respect to such employment hereinafter
set forth.
NOW, THEREFORE,
in consideration of premises and the
mutual terms and conditions hereof, the Company and the Executive
hereby agree as follows:
1.
Employment
. The Company hereby employs the Executive
and the Executive hereby accepts employment with the Company upon
the terms and conditions hereinafter set forth.
2.
Exclusive
Services . The Executive shall devote all necessary
working time, ability and attention to the business of the Company
during the term of this Agreement and shall not, directly or
indirectly, render any material services to any business,
corporation, or organization whether for compensation or otherwise,
without the prior knowledge and written consent of the Board of
Directors of the Company (hereinafter referred to as the
“Board”). During the Employment Period, the
Executive may (A) serve on corporate, civic or
charitable boards or committees, (B) deliver lectures, fulfill
speaking engagements or teach at educational institutions and
(C) manage personal investments, so long as such activities do
not significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Company in
accordance with this Agreement and any service on public company
boards of directors is approved in advance by the Board. It is
expressly understood and agreed that to the extent that any such
activities have been conducted by the Executive prior to the
effective date of this Agreement, the continued conduct of such
activities (or the conduct of activities similar in nature and
scope thereto) subsequent to the effective date of this Agreement
shall not thereafter be deemed to interfere with the performance of
the Executive’s responsibilities to the Company.
3.
Duties
. The Executive is hereby employed as the
Chief Restaurant Support Officer of the Company and shall render
services at the principal business offices of the Company, as such
may be located from time to time, unless otherwise agreed in
writing between the Board and the Executive. The Executive
shall have such authority and shall perform such duties as are
described in Exhibit A attached hereto.
4.
Term
. This Agreement shall have an initial term
of three (3) years commencing as of November 1,
2008. This Agreement will automatically renew at the end of
the initial term and at the end of each subsequent term, for a
subsequent term of one (1) year unless either party gives
written notice of non-renewal to the other at least ninety (90)
days prior to the expiration of
the then current term. Such notice may be
given for any or no reason. This Agreement is subject
to earlier termination as hereinafter provided.
5.
Compensation
. As compensation for services rendered
under this Agreement, the Executive shall be entitled to receive
the following:
a.
Base Salary
. The executive shall be paid a base salary
of at least $410,000 per year, payable in 24 equal semi-monthly
installments during the term of this Agreement, prorated for any
partial employment month. Such base salary (“ Base
Salary ”) shall be reviewed by the Compensation Committee
of the Board (the “Compensation Committee”) no less
frequently than annually. The Base Salary may be increased by
the Compensation Committee in its discretion, subject to
ratification by the Board. The Base Salary may not be
decreased, except in the event of an across the board salary
reduction approved by the Board affecting employees of the Company
at the Chief Officer Level (as defined in Section 6(a),
below).
b.
Additional
Compensation . The Executive shall be paid such
additional compensation and bonuses as may be determined and
authorized in the discretion of the Compensation Committee, subject
to ratification by the Board. The Executive’s target
bonus, to be payable under the Company’s annual incentive
plan, shall be 75% of the Executive’s Base Salary.
6.
Benefits
. In addition to the compensation to be
paid to the Executive pursuant to Section 5 hereof, the
Executive shall further be entitled to receive the
following:
a.
Participation in Employee
Plans .
The Executive shall be
entitled to participate in any health, disability, group term life
insurance plan, any pension, retirement, or profit sharing plan,
any executive bonus plan, long term incentive plan, deferred
compensation plan or any other perquisites and fringe benefits that
may be extended generally from time to time to employees of the
Company at the Chief Officer Level. For purposes of this
Agreement, employees of the Company at the “ Chief Officer
Level ” shall mean the CEO, the Chief Financial Officer,
the Chief Restaurant Support Officer and such other employees of
the Company as may from time to time be designated as being at the
Chief Officer Level by the Board.
b.
Vacation
. The Executive shall be entitled to
vacation as in accordance with the Company’s Vacation Policy
for Restaurant Support Center and Field Office
Employees.
c.
Equity Awards
. The Executive shall be entitled to
equity-based compensation awards that may be extended generally
from time to time to employees of the Company at the Chief Officer
Level, as approved by the Compensation Committee or the Board,
subject to the terms and conditions of the respective equity-based
compensation plans and award agreements and the provisions of this
Agreement.
7.
Reimbursement of
Expenses . Subject to such rules and procedures
as from time to time are specified by the Company, the Company
shall reimburse the Executive on a monthly
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 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,
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 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 throu
