UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest
event reported) March 14, 2007
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APPLEBEE'S INTERNATIONAL, INC.
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(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 000-17962 43-1461763
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
4551 W. 107th Street, Overland Park, Kansas 66207
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(Address of principal executive offices) (Zip Code)
(913) 967-4000
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(Registrant's telephone number, including area code)
None
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act 17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(a) On March 14, 2007, the Executive Compensation Committee of Applebee's
International, Inc. (the "Company") approved the fiscal 2006 cash bonuses to be
paid to the Chief Executive Officer, Chief Financial Officer and the other
senior executive officers of the Company whose compensation will be shown in the
Company's proxy statement (the "Named Executive Officers") under the Company's
existing cash bonus plans. Based on the achievement of previously identified
performance targets, the Committee agreed that the cash bonus for 2006 would be
paid out at 43.6 percent of target for these senior officers (actual amounts
listed after their titles): Dave Goebel, President and CEO - $288,218; Steve
Lumpkin, CFO - $176,035; Stan Sword, Chief People Officer - $99,190; and Carin
Stutz, Executive Vice President, Operations - $88,493. The Company ties 100
percent of the Named Executive Officers' cash bonuses to company performance.
The Committee used performance measures focused on profitability and expanding
restaurant operations in international countries in determining the cash bonus
for Rohan St. George, President-International Division at $183,128.
(b) The Committee revised the Personal Use of Corporate Aircraft policy to
eliminate non-business travel on Company aircraft by executives and employees,
except in cases of medical emergency or extreme hardship. Board members are not
eligible for personal travel on Company aircraft. The revised policy is attached
as Exhibit 10.1 hereto and incorporated herein by reference.
(c) On March 14, 2007, the Executive Compensation Committee, in accordance
with the recommendation of the Hay Group ("Hay"), the independent compensation
consultants retained by the Committee, approved adding the role of Chief
Strategy Officer to Mr. Lumpkin's current title of Chief Financial Officer in
order to better reflect the additional accountabilities and scope of his
position. In addition to serving as CFO, Mr. Lumpkin also oversees the Company's
International operations and Supply Chain Management function and oversees key
strategic initiatives for the Company. The compensation structure for the Chief
Financial and Strategy Officer has been adjusted accordingly, based on
benchmarking by Hay to competitive market data for roles of similar nature and
size.
(d) On March 14, 2007, the Executive Compensation Committee approved the
fiscal 2007 base salary, cash bonus target potential, and other incentive
compensation for the Named Executive Officers as follows:
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Performance
Stock Vested
Cash Bonus Target Appreciation Time-Vested Restricted
Name Base Salary Potential(1) Rights(2) Restricted Stock(3) Stock(4)
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David L. Goebel(5) $650,000 105% of base salary 122,000 42,000 53,000
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Steven L. Lumpkin $525,000 100% of base salary 86,250 29,750 37,450
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Stanley M. Sword $358,800 65% of base salary 29,000 10,000 12,500
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Carin R. Stutz $335,000 65% of base salary 32,000 11,000 14,000
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Rohan St. George $294,000 50% of base salary 9,375 6,250 5,000
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(1) The performance measures for the 2007 annual cash bonus have been revised
to include return on invested capital (ROIC) in addition to the previously
approved measures of: earnings per share (EPS), guest preference,
restaurant operating profit (ROP), traffic growth and employee retention.
(2) Granted pursuant to the Company's Amended and Restated 1995 Equity
Incentive Plan (the "Plan"). Upon exercise, executives will receive the
number of shares of common stock equal in value to the difference between
the fair market value on the grant date and the fair market value on the
date of exercise. Only the number of shares of common stock delivered as
payment of such appreciation will count against the shares available for
issuance under the Plan. The stock appreciation rights are granted in equal
quarterly installments during fiscal 2007, if the executive continues in
his or her position, on March 14, and the first business day of June,
September and December, 2007 and vest on March 1, 2011. For Messrs. Sword
and St. George, pursuant to the Company's executive share ownership
guidelines, incentive stock options are substituted for stock appreciation
rights up to the qualified limit of $100,000 in face value of awards.
(3) Granted in equal quarterly installments on March 14, and the first business
day of June, September and December, 2007, if the executive continues in
his or her position, pursuant to the Plan. The restricted stock is subject
to a four-year restriction period ending on March 1, 2011.
(4) Granted in equal quarterly installments on March 14, and the first business
day of June, September and December, 2007, if the executive continues in
his or her position, pursuant to the Plan. Certain specified percentages of
the restricted stock vest on March 1, 2011, if the Company's total
shareholder return reaches certain levels in relation to the total
shareholder return of the Bears Stearns Index which includes twenty-six
restaurant companies. The form of performance-vested restricted stock award
agreement is attached as Exhibit 10.2 hereto and incorporated herein by
reference.
(5) The Committee accepted Mr. Goebel's recommendation that he forego any base
salary increase for 2007.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
10.1 Revised Personal Use of Corporate Aircraft Policy
10.2 Form of Performance Vested Restricted Stock Award Agreement
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: March 20, 2007
APPLEBEE'S INTERNATIONAL, INC.
By: /s/ Steven K. Lumpkin
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Steven K. Lumpkin
Executive Vice President and
Chief Financial and Strategy Officer
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EXHIBIT INDEX
Exhibit
Number Description
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10.1 Revised Personal Use of Corporate Aircraft Policy
10.2 Form of Performance Vested Restricted Stock Award Agreement
4