EXHIBIT 10.9
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the
4th day of December, 1995 (the "Effective Date"), between IHOP CORP., a Delaware
corporation (the "Company"), and XXXXXX X. XXXXXXXX (the "Employee").
WHEREAS, the Board of Directors of the Company (the "Board") has
approved and authorized the entry into this Agreement with the Employee; and
WHEREAS, the parties desire to enter into this Agreement setting forth
the terms and conditions for the employment relationship of the Employee with
the Company.
NOW, THEREFORE, in consideration of the promises and mutual covenants
and agreements herein contained and intending to be legally bound hereby, the
Company and the Employee hereby agree as follows:
1. Employment. The Employee is employed as Executive Vice
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President-Operations and Chief Operating Officer of the Company from the
Effective Date through the Term of this Agreement (as defined in Section 2
hereof). In this capacity, the Employee shall have such duties and
responsibilities as may be designated to him by the Board from time to time and
as are not inconsistent with the Employee's position with the Company, including
the performance of duties with respect to any subsidiaries of the Company, as
may be designated by the Board. During the Employee's period of employment
hereunder, the Employee shall be based in the principal offices of the Company
in Southern California, and shall not be required to relocate outside of
Southern California to perform services hereunder, except for travel as
reasonably required in the performance of his duties hereunder.
2. Term. The "initial term" of this Agreement shall be for the
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period commencing on the Effective Date and ending on the second anniversary of
the Effective Date; provided, however, that on the second anniversary of the
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Effective Date, and on each subsequent anniversary date thereafter, the term of
this Agreement shall automatically be extended for one additional year unless,
not later than 90 days prior to such applicable anniversary date, the Company or
the Employee shall give notice not to extend this Agreement; and provided
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further, however, that, if a Change in Control (as defined in Section 11(g))
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occurs prior to the expiration of the Term of this Agreement, this Agreement
shall remain in full force and effect and shall not expire prior to the last day
of the 24th month following the date of such Change in Control. The "Term of
this Agreement" or "Term" shall mean, for purposes of this Agreement, both the
"initial term" (as hereinbefore described) and any additional term (created
by extension, as described
above), and the Term of this Agreement shall not be affected by the Employee's
termination of employment.
3. Salary. Subject to the further provisions of this Agreement,
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the Company shall pay the Employee during the Term of this Agreement a salary
at an annual rate equal to $250,000, with such salary to be increased at such
times, if any, and in such amounts as determined by the Board, which increases
shall be consistent with the historical business practices of the Company and
the salary adjustments for other senior executives of the Company. Such salary
shall be payable by the Company to the Employee not less frequently than monthly
and shall not be decreased at any time during the Term of this Agreement.
Participation in deferred compensation, discretionary bonus, retirement, and
other employee benefit plans and in fringe benefits shall not reduce the salary
payable to the Employee under this Section.
4. Participation in Bonus, Retirement and Employee Benefit Plans.
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The Employee shall be entitled to participate equitably with other senior
executives in any plan of the Company relating to bonuses, stock options, stock
purchases, pension, thrift, profit sharing, life insurance, medical coverage,
education, or other retirement or employee benefits that the Company has adopted
or may adopt for the benefit of its senior executives. For purposes of the
Company's Executive Incentive Plan, Employee's target bonus will be 50% of his
base pay.
5. Hiring Incentives.
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(a). Upon the Effective Date, or as soon as practicable
thereafter, Employee shall receive a restricted stock award in the amount of
13,030 shares of IHOP Corp. common stock. Such restricted stock award shall be
subject to the terms of the IHOP Corp. 1991 Stock Incentive Plan, as amended,
and a Restricted Stock Award Agreement setting forth, among other things, the
conditions for release of the restrictions on the shares.
(b). Upon the Effective Date, or as soon as practicable
thereafter, Employee shall be paid a Sign-On Bonus in the amount of
$75,000.00, less all applicable withholdings and taxes.
(c). Upon the Effective Date, or as soon as practicable
thereafter, Employee shall receive an option to purchase a total of 50,000
shares of IHOP Corp. common stock. Such stock option shall be subject to the
terms of the IHOP Corp. 1991 Stock Incentive Plan, as amended, and a Stock
Option Agreement setting forth, among other things, the option exercise vesting
schedule and option exercise price.
(d). The Company agrees to loan Employee, interest free, a
sum equal to ten percent (10%) of the purchase price of his new home, up to a
maximum of $80,000 (the Home Loan). The Home Loan will be due upon the
earliest to occur of:
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(i) 36 months after the loan is made; or
(ii) immediately upon the termination (for any
reason) of Employee's employment with the Company. Employee agrees to execute
a promissory note evidencing the Home Loan on a form satisfactory to Company at
the time the Home Loan is made.
6. Fringe Benefits; Automobile. The Employee shall be entitled to
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receive all other fringe benefits which are now or may be provided to the
Company's senior executives. In addition, the Company shall provide the Employee
during the Term of this Agreement with a car allowance of $1,000 per month, plus
reimbursement of all automobile expenses such as gasoline, maintenance,
insurance and vehicle registration, in accordance with the Company's general
policy on providing cars to senior executives. Notwithstanding the foregoing,
the benefits provided under this Section 6 shall cease upon the Employee's Date
of Termination (as defined in Section 11(d)).
7. Vacations. The Employee shall be entitled to an annual paid
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vacation as determined in accordance with the Company's general policy for
senior executives.
8. Business Expenses. During such time as the Employee is
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rendering services hereunder, the Employee shall be entitled to incur and be
reimbursed for all reasonable business expenses and be provided allowances as
are furnished to the Company's most senior executives under the Company's then
current policies. The Company agrees that it will reimburse the Employee for
all such expenses upon the presentation by the Employee, from time to time, of
an itemized account of such expenditures, setting forth the date, the purposes
or which incurred, and the amounts thereof, together with such receipts showing
payments in conformity with the Company's established policies. Reimbursement
shall be made within a reasonable period after the Employee's submission of an
itemized account.
9. Insurance and Indemnity. The Employee shall be added as an
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additional named insured under all appropriate insurance policies now in force
or hereafter obtained covering any officers or directors of the Company. The
Company shall indemnify and hold the Employee harmless from any cost, expense
or liability arising out of or relating to any acts or decisions made by the
Employee on behalf of or in the course of performing services for the Company to
the same extent the Company indemnifies and holds harmless other senior
executive officers and directors of the Company and in accordance with the
Company's established policies.
10. Legal and Accounting Advice. The Employee shall be entitled to
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reimbursement by the Company for expenses incurred by him for personal legal,
accounting, investment or estate planning services in an amount to be determined
by the Board, but in no event greater than $5,000 annually (or a pro rata
portion of such amount for any period of
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employment less than a full year); provided, however, that no reimbursement
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shall be made for any such expenses incurred by the Employee after such
Employee's Date of Termination.
11. Termination.
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(a) Disability. If, as a result of the Employee's
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incapacity due to physical or mental illness, he shall have been absent from the
full-time performance of his duties with the Company for 90 consecutive days or
180 days within any 12-month period, his employment may be terminated by the
Company for "Disability."
(b) Cause. Subject to the notice provisions set forth
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below, the Company may terminate the Employee's employment for "Cause" at any
time. "Cause" shall mean termination upon: (1) the willful failure by the
Employee to substantially perform his duties with the Company (other than any
such failure resulting from his incapacity due to physical or mental illness),
after a written demand for substantial performance is delivered to him by the
Board, which demand specifically identifies the manner in which the Board
believes that he has not substantially performed his duties; (2) the Employee's
willful misconduct that is demonstrably and materially injurious to the Company,
monetarily or otherwise; or (3) the Employee's commission of such acts of
dishonesty, fraud, misrepresentation or other acts of moral turpitude as would
prevent the effective performance of his duties. For purposes of this
subsection (b), no act, or failure to act, on the Employee's part shall be
deemed "willful" unless done, or omitted to be done, by him not in good faith
and without the reasonable belief that his action or omission was in the best
interest of the Company. Notwithstanding the foregoing, the Employee shall not
be deemed to have been terminated for Cause unless and until there shall have
been delivered to him 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 him and an opportunity for him, together
with his counsel, to be heard before such members of the Board), finding that he
has engaged in the conduct set forth above in this subsection (b) and specifying
the particulars thereof in detail.
(c) Notice of Termination. Any termination of the
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Employee's employment by the Company or by the Employee shall be communicated by
written Notice of Termination to the other party hereto in accordance with
Section 15. "Notice of Termination" shall mean a notice that indicates the
specific termination provision in this Agreement relied upon and sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for the
termination of the Employee's employment under the provision so indicated.
(d) Date of Termination. "Date of Termination" shall mean:
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(1) if the Employee's employment is terminated by his death, the date of his
death; (2) if the Employee's employment is terminated for Disability, 30 days
after Notice of Termination is given; and (3) if the Employee's employment is
terminated for any other reason, the date specified in the Notice of
Termination.
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(e) Dispute Concerning Termination. If within the later of:
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(i) Fifteen (15) days after Notice of Termination is
given, or
(ii) Fifteen (15) days prior to the Date of
Termination (as determined without regard to this Section 11(e), the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning a termination by the Employee for Good Reason (as defined in
Section 11(h)) following a Change in Control (as defined in Section 11(g)), the
Date of Termination shall be the earlier of the expiration date of the
Agreement, or the date on which the dispute is finally resolved, either by
mutual written agreement of the parties or by a final judgment, order or decree
of a court of competent jurisdiction (which is not appealable or with respect to
which the time for appeal therefrom has expired and no appeal has been
perfected); provided, however, that the Date of Termination shall be extended by
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a notice of dispute only if such notice is given in good faith and the party
giving such notice pursues the resolution of such dispute with reasonable
diligence.
(f) Compensation During Dispute. If a purported termination
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by the Employee for Good Reason occurs following a Change in Control and during
the Term of this Agreement, and such termination is disputed in accordance with
Section 11(e) hereof, the Company shall continue to pay the Employee the full
compensation in effect when the notice giving rise to the dispute was given
(including, but not limited to, salary) and continue the Employee as a
participant in all compensation, benefit and insurance plans in which the
Employee was participating when the notice giving rise to the dispute was given,
until the dispute is finally resolved in accordance with Section 11(e) hereof
or, if earlier, the expiration date of the Agreement. Amounts paid under this
Section 11(f) are in addition to all other amounts due under this Agreement
(other than those due under Section 12(b) hereof) and shall not be offset
against or reduce any other amounts payable under this Agreement.
(g) Change in Control. A "Change in Control" shall be
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deemed to have occurred if the conditions set forth in any one of the following
paragraphs shall have been satisfied:
(i) any "person" (as such term is used in Sections
14(d) and 15(d) of the Securities 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 the 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 25% or more
of the combined voting power of the Company's then outstanding securities; or
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(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 subparagraph (i), (iii) or (iv) of
this Section 11(g)) whose election by the Board or nomination for election by
the Company's stockholders was approved by a vote of at least 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 a majority thereof; or
(iii) the stockholders of the Company approve 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 the Company's assets.
(h) Good Reason. At any time following a Change in Control,
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the Employee may terminate his employment hereunder for "Good Reason." "Good
Reason" shall mean the occurrence (without the Employee's express written
consent) of any material breach of this Agreement, including, without
limitation, any one of the following acts by the Company, or failures by the
Company to act, unless, in the case of any act or failure to act described in
subsections (i), (iv), (v), (vi) or (vii) below, such act or failure to act is
corrected prior to the Date of Termination specified in the Notice of
Termination given in respect thereof:
(i) the assignment to the Employee of any duties
inconsistent with the Employee's status as a senior executive of the Company or
a substantially adverse alteration in the nature or status of the Employee's
responsibilities from those in effect immediately prior to the Change in
Control;
(ii) a reduction by the Company in the Employee's
annual base salary as in effect on the date hereof or as the same may be
increased from time to time;
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(iii) the relocation of the Company's principal
offices to a location outside Southern California (or, if different, the
metropolitan area in which such offices are located immediately prior to the
Change in Control) or the Company's requiring the Employee to be based anywhere
other than the Company's principal executive offices, except for required travel
on the Company's business to an extent substantially consistent with the
Employee's present business travel obligations;
(iv) the failure by the Company to pay to the
Employee any portion of the Employee's current compensation, or to pay to the
Employee any portion of an installment of deferred compensation under any
deferred compensation program of the Company, within seven days of the date such
compensation is due;
(v) the failure by the Company to continue in effect
any compensation plan in which the Employee participates immediately prior to
the Change in Control which is material to the Employee's total compensation,
unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the failure by the
Company to continue the Employee's participation therein (or in such substitute
or alternative plan) on a basis not materially less favorable, both in terms of
the amount of benefits provided and the level of the Employee's participation
relative to other participants, as existed immediately prior to the Change in
Control;
(vi) the failure by the Company to continue to
provide the Employee with benefits substantially similar to those enjoyed by the
Employee under any of the Company's pension, life insurance, medical, health and
accident, or disability plans in which the Employee was participating
immediately prior to the Change in Control; or the taking of any action by the
Company which would directly or indirectly materially reduce any of such
benefits or deprive the Employee of any material fringe benefit enjoyed by the
Employee immediately prior to the Change in Control;
(vii) any purported termination of the Employee's
employment which is not effected pursuant to a Notice of Termination satisfying
the requirements of this Agreement; for purposes of this Agreement, no such
purported termination shall be effective; or
(viii) any failure by the Company to comply with and
satisfy Section 13(b) of this Agreement.
(i) The Employee's right to terminate the Employee's
employment for Good Reason shall not be affected by the Employee's incapacity
due to physical or mental illness. The Employee's continued employment shall
not constitute consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason hereunder.
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(i) Voluntary Termination. The Employee may
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terminate his employment hereunder ("Voluntary Termination") upon a material
breach of this Agreement by the Company, unless the Company shall fully correct
such breach within 30 days of the Employee's Notice of Termination given in
respect thereof.
12. Compensation Upon Termination or During Disability. The
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Employee shall be entitled to the following benefits during a period of
disability, or upon termination of his employment, as the case may be, provided
that such period or termination occurs during the Term of this Agreement:
(a) During any period that the Employee fails to perform his
full-time duties with the Company as a result of incapacity due to physical or
mental illness, he shall continue to receive his base salary at the rate in
effect at the commencement of any such period, together with all compensation
payable to him under the Company's disability plan or program or other similar
plan during such period, until his employment is terminated pursuant to Section
11 hereof. Thereafter, or in the event the Employee's employment shall be
terminated by reason of his death, his benefits shall be determined under the
Company's retirement, insurance and other compensation programs then in effect
in accordance with the terms of such programs.
(b) If at any time the Employee's employment shall be
terminated: (i) by the Company for Cause or Disability or (ii) by him for any
reason (other than in a Voluntary Termination or for Good Reason following the
occurrence of a Change in Control), the Company shall pay him his full base
salary through the Date of Termination at the rate in effect at the time Notice
of Termination is given, plus all other amounts to which he is entitled through
the Date of Termination under any compensation plan of the Company at the time
such payments are due, and the Company shall have no further obligations to him
under this Agreement.
(c) If the Employee's employment should be terminated: (1)
by reason of his death, (2) by the Company other than for Cause or Disability or
(3) by the Employee in a Voluntary Termination, he shall be entitled to the
benefits provided below:
(i) the Company shall pay to the Employee or the
appropriate payee (as determined in accordance with Section 13(c)) (A) his full
base salary through the Date of Termination at the rate in effect at the time
Notice of Termination is given; plus (B)(x) in the case of death or a Voluntary
Termination all salary and bonus payments that would have been payable to the
Employee pursuant to this Agreement for the remaining Term of this Agreement, or
(y) in all other cases, all salary and bonus payments that would have been
payable to the Employee had the Employee continued to be employed for a period
of 12 months, assuming for the purpose of such payments that his salary for such
remaining period is equal to his salary at the Date of Termination and that his
annual bonus for such remaining Term is equal to the average of the annual
bonuses paid to him by the Company with respect to the three fiscal years ended
immediately prior to the fiscal year in which the Date of termination occurs;
plus (C) all other
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amounts to which he is entitled under any compensation plan of the Company, in
cash in a lump sum no later than the 15th day following the Date of Termination;
(ii) for a 12-month period after the Date of
Termination, the Company shall arrange to provide the Employee with life,
disability, accident and health insurance benefits substantially similar to
those which the Employee and his covered family members are receiving
immediately prior to the Notice of Termination (without giving effect to any
reduction in such benefits subsequent to a Change in Control); provided,
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however, that such continued benefits shall be reduced to the extent comparable
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benefits are actually received by or made available to the Employee without cost
during the 12-month period following the Employee's termination of employment
(and the Employee agrees that he shall promptly report any such benefits
actually received to the Company); and
(iii) the Company shall continue in effect for the
benefit of the Employee all insurance or other provisions for indemnification
and defense of officers or directors of the Company which are in effect on the
date the Notice of Termination is sent to the Employee with respect to all of
his acts and omissions while an officer or director as fully and completely as
if such termination had not occurred, and until the final expiration or running
of all periods of limitation against actions which may be applicable to such
acts or omissions.
(d) If the Employee's employment should be terminated by the
Employee for Good Reason following a Change in Control, he shall be entitled to
the benefits provided below:
(i) the Company shall pay to the Employee or the
appropriate payee (as determined in accordance with Section 13(c)) (A) his full
base salary through the Date of Termination at the rate in effect at the time
Notice of Termination is given; plus (B)(x) in the case of death or a Voluntary
Termination all salary and bonus payments that would have been payable to the
Employee pursuant to this Agreement for the remaining Term of this Agreement, or
(y) in all other cases, all salary and bonus payments that would have been
payable to the Employee had the Employee continued to be employed for a period
of 24 months, assuming for the purpose of such payments that his salary for such
remaining period is equal to his salary at the Date of Termination and that his
annual bonus for such remaining Term is equal to the average of the annual
bonuses paid to him by the Company with respect to the three fiscal years ended
immediately prior to the fiscal year in which the Date of termination occurs;
plus (C) all other amounts to which he is entitled under any compensation plan
of the Company, in cash in a lump sum no later than the 15th day following the
Date of Termination;
(ii) for a 24-month period after the Date of
Termination, the Company shall arrange to provide the Employee with life,
disability, accident and health insurance benefits substantially similar to
those which the Employee and his covered family members are receiving
immediately prior to the Notice of Termination (without giving effect to
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any reduction in such benefits subsequent to a Change in Control); provided,
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however, that such continued benefits shall be reduced to the extent comparable
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benefits are actually received by or made available to the Employee without cost
during the 24-month period following the Employee's termination of employment
(and the Employee agrees that he shall promptly report any such benefits
actually received to the Company); and
(iii) the Company shall continue in effect for the
benefit of the Employee all insurance or other provisions for indemnification
and defense of officers or directors of the Company which are in effect on the
date the Notice of Termination is sent to the Employee with respect to all of
his acts and omissions while an officer or director as fully and completely as
if such termination had not occurred, and until the final expiration or running
of all periods of limitation against actions which may be applicable to such
acts or omissions.
(e) Notwithstanding any other provisions of this Agreement,
in the event that any payment or benefit received or to be received by the
Employee in connection with the termination of the Employee's employment
(whether such benefit is pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company, and all such payments and
benefits being hereinafter called "Total Payments") would not be deductible
(in whole or part), by the Company as a result of the application of Section
280G of the Internal Revenue Code of 1986, as amended ("Code"), then, to the
extent necessary to make the nondeductible portion of the Total Payments
deductible, (i) the cash payments under this Agreement shall first be reduced
(if necessary, to zero), and (ii) all other non-cash payments under this
Agreement shall next be reduced (if necessary, to zero).
(f) If it is established as described in the preceding
subsection (d) that the aggregate benefits paid to or for the Employee's
benefit are in an amount that would result in any portion of such "parachute
payments" not being deductible by reason of Section 280G of the Code, then the
Employee shall have an obligation to pay the Company upon demand an amount equal
to the sum of: (i) the excess of the aggregate "parachute payments" paid to or
for the Employee's benefit over the aggregate "parachute payments" that could
have been paid to or for the Employee's benefit without any portion of such
"parachute payments" not being deductible by reason of Section 280G of the Code;
and (ii) interest on the amount set forth in clause (i) of this sentence at the
rate provided in Section 1274(b)(2)(B) of the Code from the date of the
Employee's receipt of such excess until the date of such payment.
(g) The Employee shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise.
(h) If the employment of the Employee is terminated by the
Company without Cause or the Employee's employment is terminated by the Employee
under conditions entitling him to payment hereunder and the Company fails to
make timely payment of the amounts then owed to the Employee under this
Agreement, the Employee shall be entitled to
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interest on such amounts at the rate of 1% above the prime rate (defined as the
base rate on corporate loans at large U.S. money center commercial banks as
published by the Wall Street Journal), compounded monthly, for the period from
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the date such amounts were otherwise due until payment is made to the Employee
(which interest shall be in addition to all rights which the Employee is
otherwise entitled to under this Agreement).
13. Assignment.
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(a) This Agreement is personal to each of the parties
hereto. No party may assign or delegate any rights or obligations hereunder
without first obtaining the written consent of the other party hereto, except
that this Agreement shall be binding upon and inure to the benefit of any
successor corporation to the Company.
(b) The Company shall require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes this Agreement by operation of law, or otherwise.
(c) This Agreement shall inure to the benefit of and be
enforceable by the Employee and his personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Employee should die while any amount would still be payable to
him hereunder had he continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
his devisee, legatee or other designee or, if there is no such designee, to his
estate.
14. (a) Confidential Information. During the Term of this
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Agreement and thereafter, the Employee shall not, except as may be required to
perform his duties hereunder or as required by applicable law, disclose to
others for use, whether directly or indirectly, any Confidential Information
regarding the Company. "Confidential Information" shall mean information about
the Company, its subsidiaries and affiliates, and their respective clients and
customers that is not available to the general public and that was learned by
the Employee in the course of his employment by the Company, including (without
limitation) any data, formulae, information, proprietary knowledge, trade
secrets and client and customer lists and all papers, resumes, records and the
documents containing such Confidential Information. The Employee acknowledges
that such Confidential Information is specialized, unique in nature and of great
value to the Company, and that such information gives the Company a competitive
advantage. Upon the termination of his employment, the Employee will promptly
deliver to the Company all documents (and all copies thereof) containing any
Confidential Information.
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(b) Noncompetition. The Employee agrees that during the
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Term of this Agreement, and for a period of one year thereafter, he will not,
directly or indirectly, without the prior written consent of the Company,
provide consultative service with or without pay, own, manage, operate, join,
control, participate in, or be connected as a stockholder, partner, or otherwise
with any business, individual, partner, firm, corporation, or other entity which
is then in competition with the Company or any present affiliate of the Company;
provided, however, that the "beneficial ownership" by the Employee, either
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individually or as a member of a "group," as such terms are used in Rule 13d of
the General Rules and Regulations under the Exchange Act, of not more than 1% of
the voting stock of any publicly held corporation shall not be a violation of
this Agreement. It is further expressly agreed that the Company will or would
suffer irreparable injury if the Employee were to compete with the Company or
any subsidiary or affiliate of the Company in violation of this Agreement and
that the Company would by reason of such competition be entitled to injunctive
relief in a court of appropriate jurisdiction, and the Employee further consents
and stipulates to the entry of such injunctive relief in such a court
prohibiting the Employee from competing with the Company or any subsidiary or
affiliate of the Company in violation of this Agreement.
(c) Right to Company Materials. The Employee agrees that
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all styles, designs, recipes, lists, materials, books, files, reports,
correspondence, records, and other documents ("Company Material") used,
prepared, or made available to the Employee, shall be and shall remain the
property of the Company. Upon the termination of his employment or the
expiration of this Agreement, all Company Materials shall be returned
immediately to the Company, and Employee shall not make or retain any copies
thereof.
(d) Antisolicitation. The Employee promises and agrees that
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during the Term of this Agreement, and for a period of one year thereafter, he
will not influence or attempt to influence customers, franchisees, landlords, or
suppliers of the Company or any of its present or future subsidiaries or
affiliates, either directly or indirectly, to divert their business to any
individual, partnership, firm, corporation or other entity then in competition
with the business of the Company, or any subsidiary or affiliate of the Company.
15. Notice. For the purpose of this Agreement, notices and all
------
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth below, or to such other
addresses as either party may have furnished to the other in writing in
accordance herewith, except that notice of a change of address shall be
effective only upon actual receipt:
Company: IHOP Corp.
000 Xxxxx Xxxxx Xxxx.
Xxxxxxxx, Xxxxxxxxxx 00000-0000
to the attention of the Board;
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with a copy to: the Secretary of the Company
Employee: Xxxxxx X. Xxxxxxxx
000 Xxxxx Xxxxx Xxxxxxxxx
Xxxxxxxx Xxxxxxxxxx 00000.
15. Amendments or Additions. No amendments or additions to this
-----------------------
Agreement shall be binding unless in writing and signed by both parties hereto.
16. Section Headings. The section headings used in this Agreement
----------------
are included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.
17. Severability. The provisions of this Agreement shall be deemed
------------
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
18. Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be deemed to be an original, but both of which together will
constitute one and the same instrument.
19. Arbitration. Any dispute or controversy arising under or in
-----------
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators in Los Angeles, California, in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction; provided, however, that the Employee shall be entitled to seek
-------- -------
specific performance of his right to be paid until the Date of Termination
during the pendency of any dispute or controversy arising under or in connection
with this Agreement.
20. Attorneys' Fees. The Company shall pay to the Employee all
---------------
out-of-pocket expenses, including attorneys' fees, incurred by the Employee in
connection with any claim, legal action or proceeding involving this Agreement
in which the Employee prevails in whole or in part, whether brought by the
Employee or by or on behalf of the Company or by another party. The Company
shall pay prejudgment interest on any money judgment obtained by the Employee
calculated at 3% above the prime rate (defined as the base rate on corporate
loans at large U.S. money center commercial banks as published by the Wall
----
Street Journal), from the date that payment(s) to the Employee should have been
------ -------
made under this Agreement.
21. Miscellaneous. No provision of this Agreement may be modified,
-------------
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Employee and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any
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condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not expressly set forth in this
Agreement and this agreement shall supersede any prior understanding or
agreement either written or oral, will respect to the subject matter hereto. The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of California without regard to its
conflicts of law principles. All references to sections of the Exchange Act or
the Code shall be deemed also to refer to any successor provisions to such
sections.
Any payments provided for hereunder shall be paid net of any applicable
withholding required under federal, state or local law. The obligations of the
Company under Section 12 and Section 21 and the obligations of the Employee
under Section 14 and Section 21 shall survive the expiration of the Term of this
Agreement.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement on the date first indicated above.
IHOP CORP.:
ATTEST:
/s/ Xxxxxx Xxxx-Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------- -------------------------------
Xxxxxx Xxxx-Xxxxxx Xxxxxxx X. Xxxxxx
Assistant Secretary President
EMPLOYEE:
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxx
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