DineEquity, Inc. Officer Incentive Plan
Exhibit 10.2
DineEquity, Inc.
Officer Incentive Plan
Objectives
International House of Pancakes, LLC (IHOP), Applebees Services, Inc. (Applebees) and DineEquity, Inc. (DineEquity and together with IHOP and Applebees, the Company) have established this Officer Incentive Plan (the Plan) to reward eligible employees whose performance meets or exceeds the Companys expectations, to provide incentives for future excellent performance that will contribute to the Companys success and profitability, and to serve as a means by which eligible employees may share in the Companys financial success. The Plan shall continue until terminated by the Compensation Committee (the Committee).
Eligibility
All full-time officers (other than executive officers) employed by the Company and approved by the Chairman & Chief Executive Officer shall be eligible to participate in the Plan. All executive officers employed by the Company and approved by the Committee also shall be eligible to participate in the Plan. Participants must be actively employed with the Company, or one of its subsidiaries through the end of the Plan Year in order to be eligible for any benefit under this Plan.
Except as otherwise specifically provided in the Plan, participants who terminate employment for any reason before the end of the Plan Year shall not be entitled to any benefits under this Plan. The Companys Plan Year is based on its fiscal year. The last day worked is the last day an employee is considered active. In the case of termination, for the purpose of bonus eligibility, vacation or personal time cannot be used to extend the last day worked.
New Hires/Re-Hires
For participants who begin work with the Company following the commencement of a Plan Year, any incentive will be paid on a prorated basis. The prorated percentage will be determined based on when the employee begins work. If the employee begins work during the first full work week of the month, the employee will be credited for a whole month worked. However, if the employee begins work after the first full work week of the month, he/she will not be entitled to receive an incentive for that month. New hires or re-hires with an effective date on or after October 1st of a Plan Year will not be eligible for an incentive for such Plan Year.
Promotions
Promotion from one eligible position to another: When an employee is promoted from one eligible position to another, that months incentive in which the promotion occurs will be based on the prior position providing that the promotion occurred after the first week of the month. When a promotion during the first full work week of the month, that months incentive will be based on the new position.
The base salary as of the last day of the fiscal year will be used for all calculations even though the applicable percentage may have changed during the Plan Year (the Base Salary).
Transfer from one entity to another entity: When an employee of any Company (Old Company) is transferred to a bonus eligible position for another Company (New Company), that months incentive in which the transfer occurs will be based on the performance objectives based on the employees position with the Old Company provided that the transfer occurred after the first full work week of the month. When a transfer to another Company occurs during the first full work week of the month, that months incentive will be based on the performance objectives based on the employees position with the New Company.
The base salary as of the last day of the fiscal year will be used for all calculations even though the applicable percentage may have changed during the Plan Year.
Short-Term or Long-Term Disability, Workers Compensation and other Leaves of Absence
Any participant on leave of absence or otherwise not actively working during the incentive period may be eligible for a prorated incentive excluding the period on leave. The date the leave is effective and the date ending leave will be used to calculate the number of whole months worked in the incentive period.
Termination Due to Death or Retirement
In the event of an employees death or retirement, any incentive earned will be prorated for the incentive period based upon the actual number of whole months worked and paid simultaneously with the normal distribution of incentives. If the death or retirement of the participant occurs during the first full work week of the month, credit will be for a full month worked. For the purposes of the Plan, retirement occurs when employment ends and at a time when the employees age plus years of service is equal to, or greater than, seventy.
Plan Description
The Plan is an annual incentive plan. For all participants, the Plan is based on the financial performance of IHOP, Applebees and/or DineEquity (as determined by the Committee at the end of the annual incentive period) and on the achievement of specific individual business objectives (IBOs) of the participants.
Level of Incentive
The target and maximum incentive payouts shall be expressed as a percentage of Base Salary. The incentive award payouts shall be determined by the Committee and may differ for each participant.
Financial Objectives
Subject to the terms of the Plan, the Committee, in its sole discretion, shall establish and set forth in writing for the applicable Plan Year (i) the performance goals for each participant, (ii) the target incentive for each participant, and (iii) the formula or payout matrix for each participant.
Individual Business Objectives (IBOs)
If required by the Committee, for each Plan Year, each participant in the Plan shall set IBOs in conjunction with his or her immediate supervisor each year. During this process, challenging, measurable objectives that significantly impact the Company performance are to be mutually determined and approved by the Chairman and Chief Executive Officer. No participant will have more than three IBOs without approval by the Chairman & Chief Executive Officer. After the fiscal year, a percentage of achievement is then established by the immediate supervisor and approved by the Chairman & Chief Executive Officer. This amount is used to determine the IBO portion of the annual payout; provided, however, the IBO performance will not be paid if the Companys Financial Objectives threshold is not met, as determined by the Committee.
In the event there is a significant change in IBOs for an employee due to a change in job or function, annual IBO achievement will be determined by the employees supervisors during the year and reviewed by Human Resources, as necessary.
Payment Distribution
Incentive payouts will be calculated based on the results of Companys financial performance, completion of personal IBOs, and full-time active employment with the Company and distributed within 2 ½ months following the close of the Plan Year. No incentive shall be deemed to be earned under this Plan until the amount of the incentive (if any) has been determined by the Committee. Payouts will be paid in a separate check from the regular payroll check, and are subject to supplemental withholding deductions. No payout shall be made to an employee who is terminated for cause after the close of the Plan Year but prior to the distribution of payment.
Plan Administration
The Committee is the administrator of the Plan and has sole discretionary authority to interpret the Plan and to decide all questions and disputes under the Plan, including but not limited to all questions regarding eligibility for benefits. The Committees decision shall be final and binding on all persons. The Committee may delegate its Plan administration duties to the DineEquity Inc. Compensation Department.
This Plan Document and its provisions regulate all plan guidelines and participant eligibility. Any exception must be submitted in writing to the DineEquity, Inc. Compensation Department and must be approved by the Chairman & Chief Executive Officer.
No Guarantee of Employment
The Plan and this plan document do not constitute or imply an employment contract, and participants accrue no interest, right or benefit whatsoever except as specifically set forth in this document.
Modification of the Plan
The Committee reserves the right to modify, terminate or make exceptions to the Plan in its sole discretion at any time without prior notice. The Plan will be reviewed on an annual basis or at other appropriate intervals as determined in the Committees sole discretion, allowing for updates or revisions to be considered. The Plan and this plan document do not constitute or imply an employment contract, and participants accrue no interest, right or any benefit in the Plan, except as specifically set forth in this document.