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) August 25, 2006
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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 1.01. Entry into a Material Definitive Agreement.
(a) In connection with Mr. Lloyd Hill retiring and becoming the
non-executive Chairman of the Board as described under Item 5.02 below, the
Executive Compensation Committee of Applebee's International, Inc. (the
"Company") authorized the following non-employee director compensation for Mr.
Hill: annual cash compensation of $292,500; personal use of the Company airplane
in the amount of $45,000, computed using the incremental cost method or such
other method as may be mandated; $2,500 cash allowance for an annual physical;
and approximately 10 hours a week of administrative assistance. Mr. Hill will
not receive any other compensation for his services to the Company.
The Executive Compensation Committee also approved a new Personal Use of
Corporate Aircraft Non-Executive Chairman policy. This policy provides that the
Non-Executive Chairman may use the Company aircraft at the sole discretion of
the Executive Compensation Committee. The Committee annually will review and
determine the allowed amount of personal use. The initial amount is $45,000
computed using the incremental cost method or such other method as may be
mandated. Actual use less than or in excess of this will be paid or offset
against the Non-Executive Chairman's cash compensation. All non-aircraft related
expenses associated with personal use must be paid by the Non-Executive
Chairman. The policy is attached as Exhibit 10.1 hereto and incorporated herein
by reference.
Upon the effective date of Mr. Hill's retirement, as set forth in Item 5.02
below, under the Company's Executive Retirement Plan, Mr. Hill will receive (i)
continued group health coverage under a plan sponsored by the Company at Mr.
Hill's expense, (ii) continued vesting of options and restricted stock and
continued exercisability of options with respect to options and restricted stock
issued after January 1, 2004, (iii) payment of a prorated bonus for the year of
retirement, (iv) the right to elect an extended payout for deferred
compensation, and (v) continued participation in certain benefits of the
Company's perquisites plan for officers. In exchange, Mr. Hill will sign a
release of claims and agree not to compete with the Company or solicit employees
during the time he receives retirement benefits and for one year thereafter.
Violation of this noncompetition and nonsolicitation agreement would end all
vesting of options and restricted stock and terminate all other retirement
benefits.
(b) In connection with naming Mr. Dave Goebel as Chief Executive Officer of
the Company, as described in Item 5.02 below, the Executive Compensation
Committee approved the following changes to Mr. Goebel's compensation: base
salary will be increased from $550,000 to $650,000; cash bonus potential will
increase from 100% to 105%; the annual stock appreciation rights to be granted
will increase from 139,000 to 256,500 shares; and the annual restricted stock to
be granted will increase from 23,500 to 43,500 shares. The stock appreciation
rights and restricted stock are granted in equal quarterly installments.
(c) On August 25, 2006, the Executive Compensation Committee of the Company
approved a new Severance Plan for Officers of the Company, effective as of
September 1, 2006 (the "Severance Plan"). The Severance Plan is intended to
provide severance benefits to employees of the Company who are classified as
Officers at the time of their termination of employment.
The Severance Plan provides for payment of severance benefits to Officers
whose employment was terminated involuntarily by the Company, as described in
the Severance Plan, including a reduction of the work force, a reorganization or
restructuring, or changes in operating requirements.
Benefits under the Severance Plan include (1) continued salary at the same
rate as in effect immediately prior to termination for fifty-two weeks (the
"Salary Continuation"), (2) payment by the Company of fifty percent of the cost
of continued group health benefits coverage for the period of time that benefit
is available under the severance plan for the lowest paid salaried employees or
until the Officer becomes employed by another employer or re-employed by the
Company, whichever occurs first, and (3) beginning the month following the end
of the payment by the Company of the cost of continued group health benefits
coverage and ending upon the earlier of employment of the Officer by any
employer or the end of Salary Continuation, receipt of an additional cash
benefit equal to fifty percent of the monthly cost of continued group health
benefits coverage plus a tax gross up based on assumed tax rates regardless of
whether the Officer elects continuation of group health benefits coverage upon
termination of employment.
An Officer will not receive any benefits after December 31st of the second
calendar year following the calendar year in which the termination occurs nor
will such benefits exceed two times the lesser of: (1) the Officer's W-2 wages
for the calendar year preceding the calendar year in which his or her
termination occurred; or (2) the maximum amount that may be taken into account
under a qualified retirement plan pursuant to Internal Revenue Code Section
401(a)(17) ($220,000 for 2006) for the year in which the termination occurred.
The Salary Continuation will be reduced by any benefits from the Company
due to termination of employment other than those provided under the Severance
Plan, and by any amount from any subsequent employer received by the Officer
during the time the Officer is receiving benefits under the Severance Plan.
The foregoing description of the Severance Plan does not purport to be
complete and is qualified in its entirety by reference to the Severance Plan,
which is filed as Exhibit 10.2 hereto and is incorporated herein by reference.
Item 5.02. Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers.
On August 25, 2006, Mr. Lloyd Hill retired as Chief Executive Officer with
the Company, effective September 5, 2006. He will continue to serve as the
non-executive Chairman of the Board.
Also on August 25, 2006, the Board of Directors of the Company named Mr.
Dave Goebel, currently President and Chief Operating Officer, as the Company's
new Chief Executive Officer, effective September 5, 2006. Mr. Goebel will remain
as President but no longer have the title Chief Operating Officer.
Mr. Goebel, 56, was employed by the Company in February 2001 as Senior Vice
President of Franchise Operations and was promoted to the position of Executive
Vice President of Operations in December 2002. In January 2004, Mr. Goebel was
promoted to Chief Operating Officer. In January 2005 he was also named
President. In January 2006, Mr. Goebel was named to the Board of Directors and
he assumed additional responsibilities including serving as principal executive
officer. Prior to joining the Company, Mr. Goebel headed a management company
that provided consulting and strategic planning services to various businesses
from April 1998 to February 2001. Prior to 1998, he was a franchise principal
with an early developer group of the Boston Market concept. Mr. Goebel's
business experience also includes positions as Vice President of Business
Development for Rent-a-Center (a subsidiary of Thorn, EMI) and Vice President of
Operations for Ground Round restaurants.
Mr. Goebel and the Company previously entered into a three year Employment
Agreement effective January 9, 2006. See the Company's Form 8-K filed January 9,
2006 for a description of the Employment Agreement. A description of changes to
Mr. Goebel's compensation in connection with his new responsibilities is set
forth in Item 1.01, above and is incorporated into this Item 5.02 by reference.
The Company's press release regarding these matters is attached hereto as
Exhibit 99.1 and incorporated herein by reference.
Item 5.03 Amendment to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
Effective August 25, 2006, the Board of Directors approved Amended and
Restated Bylaws for the Company. These Amended and Restated Bylaws incorporated
all previous amendments and updated and revised a number of provisions to
reflect current practices of the Company and the board. In addition, as
described below, certain substantive changes were made to the manner in which
stockholders may bring matters before a stockholder meeting, including the
nomination of directors and certain other provisions related to meetings of
stockholders and the board of directors. The following discussion is qualified
by reference to the Amended and Restated Bylaws which are attached as Exhibit
3.1 hereto.
Article II - Meetings of Stockholders.
1. Sections 1 and 2 were revised to eliminate certain historical
references which are no longer necessary, leaving the Board of
Directors with the flexibility to set the time, date and place of
meetings.
2. Section 2 was also amended to reference the ability under Delaware law
to hold an annual meeting by remote communication. Sections 3, 4 and 5
were amended to acknowledge the ability to provide notice and stock
lists through electronic means.
3. Section 5 was amended to allow the chief executive officer or chairman
of the board to call special meetings of the stockholders and to
eliminate the ability of the president and of stockholders owning a
majority of stock to request a special meeting.
4. Section 7 was added to provide an advance notice requirement for
stockholders to bring matters before Company stockholder meetings.
Under Article II, Section 7 of the Bylaws, any stockholder proposal,
including, without limitation, a notice of intention to nominate an
individual for election to the Board, must be delivered to the
corporate secretary of the Company not less than 120 days nor more
than 165 days prior to the date on which the Company first mailed its
proxy materials for the prior year's annual meeting of stockholders;
provided however, that in the event that the date of the annual
meeting is advanced by more than 30 days or delayed (other than as a
result of adjournment) by more than 30 days from the anniversary of
the previous year's annual meeting, notice by the stockholder to be
timely must be delivered not later than the close of business on the
later of the 60th day prior to such annual meeting or the tenth day
following the date on which public announcement of the date of such
meeting is first made. The notice must contain the information
specified in the Bylaws. Previously, the bylaws only required director
nominations to be provided within a specified time. The previous
director nomination provision has been combined with this provision so
that all notice requirements are the same.
5. Section 9 has been amended to revise and clarify the stockholder vote
required. All proposals, other than the election of directors, are
approved if the votes cast in favor exceed the votes cast against.
Abstentions will no longer be counted as votes against a proposal.
6. Section 10 has been revised to acknowledge the ability of stockholders
to deliver proxies in electronic form.
Article III - Directors.
1. As previously mentioned, the director nomination provision in Section
1 has been deleted and combined with the advance notice provision in
Article II.
2. Section 2 has been revised to provide that a director who fills a
vacancy will serve for the remaining portion of the term of the
director whose place he is taking. Previously, this Section required
that such director be brought before the stockholders at the next
annual meeting.
3. Sections dealing with the time and place of board meetings and notice
of meetings have been amended to provide more flexibility for the time
of meetings, to delete historical references to a meeting of all
directors being fixed by a vote of stockholders, and to shorten the
notice necessary to call special meetings. A provision has been added
to note that committee business is conducted in the same manner as
board business.
Article IV - Notices.
1. The notice provisions have been revised to acknowledge the ability to
provide notice by electronic means and to clarify the ability to waive
notice.
Article V - Officers.
1. Section 4 regarding compensation of officers has been revised to
reflect the responsibilities of the Executive Compensation Committee
to set compensation for executive officers.
2. Other provisions have been revised to provide that the chief executive
officer has the same powers as the president of the Company. A
specific designation for the chief executive officer has also been
added.
3. Certain other revisions have been made to combine and stream-line the
specified duties of the officers of the Company.
Article VI - Certificates for Shares; Record Date; Registered Stockholders.
1. A revision was made to Section 1 to delete an historical reference
regarding uncertificated stock. Clarifications were made as to the
form of stock certificates.
Article VII - General Provisions.
1. The previous Section 3 regarding the presentation of an annual
statement was deleted.
2. Section 6 has been added to acknowledge the use of electronic means to
deliver written materials.
Item 9.01. Financial Statements and Exhibits.
(c) EXHIBITS. The following exhibits are filed herewith:
3.1 Amended and Restated Bylaws of Applebee's International, Inc.
10.1 Personal Use of Corporate Aircraft Non-Executive Chairman
10.2 Severance Plan for Officers.
99.1 Press release of Applebee's International, Inc., dated
August 28, 2006.
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: August 29, 2006
APPLEBEE'S INTERNATIONAL, INC.
By: /s/ Steven K. Lumpkin
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Steven K. Lumpkin
Executive Vice President and
Chief Financial Officer
Exhibit Index
Exhibit
Number Description
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3.1 Amended and Restated Bylaws of Applebee's International, Inc.
10.1 Personal Use of Corporate Aircraft Non-Executive Chairman.
10.2 Severance Plan for Officers.
99.1 Press release of Applebee's International, Inc., dated
August 28, 2006.