Hire Date: Your start date as Chief Marketing Officer will be Monday, July 15, 2002. The existing consulting contract between you and IHOP Corp. dated April 22, 2002 will terminate as of Friday, July 12, 2002 and your monthly compensation thereunder will be prorated for1/2 month's work.
Salary: As we discussed, your annual base salary will be $275,000. As of April 1, 2003, your salary will become $300,000 provided your performance up to that time meets expectations.
Bonus: You will participate in the Company's 2002 Executive Incentive Plan with a target bonus of 35% of your base salary. As outlined in the enclosed Plan, bonuses are based on both Company and individual performance. We will agree on Individual Business Objectives for the balance of the year once you are on board. A portion of your bonus is based on EPS which will be calculated in the same manner for all Executive Team members. Your first year's bonus, if earned, will be prorated for the number of complete months worked and payable after board approval in March, 2003. As discussed below, we will be reviewing IHOP's Executive Compensation package in detail, to include the bonus program, within the next 12 months. Should it be determined that an increased bonus % is warranted at that time, the difference between the new bonus rate and 35% will be awarded to you retroactive to your start date of July 15, 2002.
Signing Bonus: You will be given a signing bonus of $10,000 payable upon date of hire.
Benefits: You will participate in the Company's health, dental, life and retirement benefit plans, subject to the terms, conditions, and limitations contained in the applicable plan documents and policies (see attached). As requested, until your family moves to California, we will pay you $479/month to cover the costs of health insurance you are currently enrolled in. This will be in lieu of health insurance benefits offered through IHOP Corp.
Stock Options: Upon hire, you will receive a stock option grant of 20,000 shares based on the stock price in effect on your hire date. Thereafter, you will be eligible to participate in IHOP Corp.'s stock option plans as determined by the Board of Directors.
Car Allowance: You will receive a car allowance of $700 per month plus reimbursement of all automobile expenses, such as gasoline, maintenance, insurance, and vehicle registration.
Professional Services Allowance: As an executive you are entitled to a reimbursement of up to $10,000 annually for such expenses as unreimbursed medical bills, gym membership, investment, tax, or legal counseling, etc. Please see the attached list for details of the expenses covered under this policy. Your first year's benefit under this plan will be prorated for the number of complete months worked.
