Exhibit 10.1
SEPARATION AGREEMENT AND
GENERAL RELEASE OF ALL CLAIMS
THIS SEPARATION AGREEMENT AND
GENERAL RELEASE OF ALL CLAIMS (this “ Agreement
”) is made and entered into as of this 5th day of September,
2008, by and between Thomas G. Conforti, an individual (the “
Executive ”), and DineEquity, Inc., f/k/a IHOP
Corp., a Delaware corporation (the “ Company
”).
WHEREAS, Executive and the Company,
are parties to that certain Employment Agreement, effective as of
December 9, 2006 (the “ Employment Agreement
”), pursuant to which Executive is employed by the Company as
its Chief Financial Officer;
WHEREAS, Executive and the Company
now desire to terminate their employment relationship and to
resolve amicably, fully and finally all matters between them,
including, but in no way limited to, those matters relating to the
employment relationship between them and the termination of that
relationship;
WHEREAS, the Company has agreed to
provide Executive with certain additional rights and benefits (as
described below) in exchange for Executive’s full release of
any and all claims that Executive may have against the Company
and/or any of the “Released Parties” (as that term is
defined herein) as provided herein, Executive’s cooperation
in certain matters relating to the business of the Company and the
Released Parties as provided herein, and all of the other
covenants, promises and terms contained in this Agreement;
and
WHEREAS, the Board of Directors of
the Company has approved Executive’s separation from service
pursuant to the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of
the recitals above and the mutual promises and obligations
contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are expressly acknowledged, it is
agreed as follows:
1. Executive hereby resigns from his employment and
any and all offices, directorships and other positions with the
Company, as well as each subsidiary or affiliate of the Company as
set forth in the resignation letter appended as Attachment
A hereto, and the Company hereby accepts such resignation,
effective September 5, 2008 (the “ Separation
Date ”). Executive agrees to remain available after
the Separation Date, in accordance with Paragraph 18 hereof, for
purposes of effectuating a smooth transition of his
responsibilities to a successor (and/or interim successor) without
additional compensation or benefits other than as specifically
provided in this Agreement or as Executive and the Company may
otherwise agree. Executive acknowledges and agrees that he
will have no further duties or responsibilities and no further
authority on behalf of the Company or its affiliates after the
Separation Date, other than as specifically set forth
herein.
2. The Company will issue a press release
contemporaneously with Executive’s resignation hereunder that
is consistent with the text of Attachment B hereto,
and Executive agrees to provide his reasonable cooperation and
assistance to the Company in issuing any such press release or
other announcements concerning his departure consistent with
Attachment B.
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3. The Company will pay to Executive his full base
salary, at the rate in effect on the Separation Date, along with
all accrued, unused vacation in accordance with Company policy,
through the Separation Date, regardless of whether Executive signs
this Agreement (the “Accrued Obligations”). For
avoidance of doubt, the parties acknowledge that Executive
currently has 240 hours of accrued, unused vacation as of the date
hereof.
4. In consideration of Executive’s release of
all claims and his other covenants and agreements contained herein,
and provided that this Agreement has been executed by Executive by
the twenty-second (22 nd ) day following the date of
presentation hereof and has not been revoked by Executive as of the
eighth (8 th ) calendar day following Executive’s
execution of this Agreement, and further provided that Executive
has not breached this Agreement in any material respect, the
Company shall provide Executive with the following separation
benefits:
(a)
The Company shall pay Executive the
following cash payments, which, subject to Paragraph 6 hereof,
shall be payable as soon as practicable in a lump sum following the
“Effective Date” (as that term is defined in Paragraph
9 hereof), but in no event earlier than the Separation Date, and in
no event later than 15 days following the Separation
Date:
(i)
The Company shall pay Executive a
cash payment equal to $435,000.00, which represents twelve (12)
months of base salary at Executive’s salary rate in effect as
of the date hereof, less all applicable Federal, state, and/or
local taxes and all other authorized payroll deductions;
and
(ii)
The Company shall also pay Executive
a cash payment equal to $289,430.00, which represents the average
of the annual bonuses paid by the Company to Executive with respect
to the three (3) fiscal years ended immediately prior to the
Separation Date, less all applicable federal, state, and/or local
taxes and all other authorized payroll deductions.
(b)
For twelve (12) months following the
Separation Date (the “ Welfare Benefit Continuation
Period ”), the Company shall, at the Company’s
expense and in accordance with the Company’s established
payment practices, provide Executive with continued life,
disability, accident and health insurance benefits (which includes,
for avoidance of doubt, the Exec-U-Care plan that covers medical
expenses for Executive and his family members covered thereunder as
of the date of this Agreement that are not otherwise covered under
a group health plan) substantially similar to those which Executive
and his covered family members are receiving immediately prior to
the Separation Date; provided , however , that such
continued benefits shall be reduced to the extent comparable
benefits are actually received by or made available to Executive
without cost during such 12-month period; and provided ,
further, that Executive shall promptly report to the Company
any such benefits actually received. The coverage period for
purposes of the group health continuation requirements of
Section 4980B (“ COBRA ”) of the Internal
Revenue Code of 1986, as amended (the “ Code ”)
shall commence as of the Separation
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Date, and shall run concurrently
with the Welfare Benefit Continuation Period, and Executive
acknowledges that, with respect to benefits covered by COBRA, such
benefit continuation shall be deemed to satisfy the obligations of
the Company to provide continuation of benefits under COBRA for the
Welfare Benefit Continuation Period and that the Company may
satisfy such obligation by paying any applicable COBRA premiums or
causing such premiums to be paid.
(c)
The Company shall provide Executive
with a cash payment equal of $10,200.00, less applicable
withholding, representing twelve (12) months of automobile
allowance, at the rate currently in effect for chief-level officers
under the Company’s executive perquisites policy;
provided , however , that all expenses for gas, car
washes, maintenance, insurance, registration, and other operating
expenses shall be Executive’s sole responsibility.
(d)
The Company shall make available to
Executive for a period of up to 18 months following the Effective
Date, at the Company’s expense, executive-level outplacement
assistance benefits through Right Management or another
outplacement firm of Executive’s choice, provided that
such benefits shall be capped at $12,000.00 and will be paid by the
Company directly to the provider.
(e)
Subject to Executive’s
continued compliance in all material respects with the terms of
this Agreement, effective as of the Effective Date of this
Agreement, the remaining unvested portion (consisting of 6,375
restricted shares) of the 8,500 restricted shares of common stock,
$0.01 par value, of the Company, granted to Executive pursuant to
the Restricted Stock Award Agreement dated August 27, 2007
(the “ Grant Agreemen t”, and the shares granted
thereunder, the “ Restricted Share Grant ”)
under the IHOP Corp. 2001 Stock Incentive Plan (the “
Plan ”), shall become immediately vested and the
restrictions thereon will lapse. The Restricted Share Grant
shall otherwise continue to be subject to such other terms and
conditions as are contained in the Plan and the Grant
Agreement.
(f)
Subject to Executive’s
continued compliance in all material respects with the terms of
this Agreement, effective as of December 31, 2008,
the Company shall issue and pay out to Executive, in the form
of common stock, the target amount of 5,000 shares of common
stock, $0.01 par value, of the Company, granted to Executive
pursuant to the Performance Shares Award Agreement dated
January 1, 2006 for the three (3)-year period ending
December 31, 2008 (the “ Performance Share
Agreement ”, and the shares granted thereunder, the
“ Cycle 3 LTIP Grant ”) under the Terms and
Conditions of Performance Share Awards Issued Pursuant to the
Deferred Stock Provisions of the Plan (the “ Terms and
Conditions ”) and the Plan. Such shares shall be
issued and paid out to Executive irrespective of whether the
performance goals set forth in the
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Performance Share Agreement (and if
applicable, the Terms and Conditions and the Plan) are or have been
attained. The Cycle 3 LTIP Grant shall otherwise continue to
be subject to such terms and conditions as are contained in the
Terms and Conditions, the Plan and the Performance Share
Agreement.
(g)
Except as otherwise provided herein,
all other stock options, deferred stock, performance shares, and
restricted stock or any other equity grants held by Executive, to
the extent not already vested as of the date immediately prior to
the Separation Date, shall lapse and terminate immediately
thereon.
(h)
The Company shall continue in effect
for the benefit of Executive all insurance or other provisions for
indemnification and defense of officers and directors of the
Company which are in effect as of the Separation Date with respect
to all of Executive’s acts and omissions while an officer or
director until the final expiration or running of all periods of
limitation against legal actions which may be applicable to such
acts or omissions.
(i)
The Company shall reimburse
Executive for his reasonable and documented attorneys’ fees
and expenses, up to a maximum of $7,500.00, incurred prior to
September 15, 2008 in connection with negotiating this
Agreement. Such documentation shall be submitted by Executive
within 60 days following the Effective Date, and the Company shall
make such reimbursement payments not later than 30 days following
the date on which Executive submits such documentation.
(j)
Executive hereby acknowledges and
agrees that, except for the Accrued Obligations, he shall not be
eligible to receive any payments or other consideration under this
Agreement until after the Effective Date. For avoidance of
doubt, Executive acknowledges and agrees that if he does not sign
this Agreement with respect to the release provisions of Paragraphs
7, 8 and 9 hereof, or if he revokes or breaches this Agreement, he
will have no right to receive any of the payments or benefits under
this Agreement, and the Company shall have no further obligation to
him hereunder (with the exception of the Accrued Obligations, which
will be paid to him whether or not he signs this
Agreement).
5. As of the Effective Date, the payments and
benefits provided hereunder are in lieu of any severance payment or
severance benefits under the Employment Agreement or any Company
severance plan or any other Company plan, policy, program or
arrangement whatsoever, whether written or unwritten, formal or
informal, Executive’s rights to any severance compensation or
severance benefits from the Company, other than as set forth
herein, shall cease as of the Separation Date, and
Executive’s active participation in any other Company plan,
policy, program or arrangement whatsoever, whether written or
unwritten, formal or informal, shall cease as of the Separation
Date and Executive’s rights and benefits thereunder shall be
governed in accordance with the terms of such plan, policy, program
or arrangement.
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6. The payments and benefits under this Agreement
are not intended to constitute non-compliant “nonqualified
deferred compensation” within the meaning of
Section 409A of the Code and the Treasury Regulations relating
thereto, and the parties intend that Executive shall not be subject
to the payment of additional taxes and interest under
Section 409A of the Code. In furtherance of this intent,
and notwithstanding anything to the contrary in this Agreement,
this Agreement shall be interpreted, operated, and administered in
a manner consistent with these intentions, and the payment of
consideration, compensation, and benefits pursuant to this
Agreement shall be interpreted and administered in a manner
intended to avoid the imposition of additional taxes under
Section 409A of the Code.
(a)
Notwithstanding any provision to the
contrary in this Agreement, no payment or distribution under this
Agreement which constitutes an item of deferred compensation under
Section 409A of the Code and becomes payable by reason of
Executive’s termination of employment with the Company will
be made to Executive unless Executive’s termination of
employment constitutes a “separation from service” (as
such term is defined in Treasury Regulations issued under
Section 409A of the Code).
(b)
In addition, no such payment or
distribution will be made to Executive prior to the earlier of
(i) the expiration of the six (6)-month period (the “
Six-Month Delay ”) measured from the date of
Executive’s “separation from service” (as such
term is defined in Treasury Regulations issued under
Section 409A of the Code) or (ii) the date of
Executive’s death, if Executive is deemed at the time of such
separation from service to be a “key employee” within
the meaning of that term under Section 416(i) of the Code
and to the extent such delayed commencement is otherwise required
in order to avoid a prohibited distribution under
Section 409A(a)(2) of the Code. All payments and
benefits which had been delayed pursuant to the immediately
preceding sentence shall be paid to Executive in a lump sum upon
expiration of such six-month period (or, if earlier, upon the
Executive’s death).
(c)
Notwithstanding the foregoing
provisions, to the extent permitted under Section 409A, any
separate payment or benefit under this Agreement or otherwise shall
not be “deferred compensation” subject to
Section 409A and the Six-Month Delay to the extent provided in
the exceptions in Treasury Regulation
Section 1.409A-1(b)(4) and (b)(9) and any other
applicable exception or provision under Section 409A. Further,
each individual installment payment that becomes payable under this
Agreement shall be a ̶
