UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
Applebee's International, Inc.
------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.01 par share
------------------------------------------------------------------------------
(Title of Class of Securities)
0000853665
------------------------------------------------------------------------------
(CUSIP Number)
Norman J. Harrison
Breeden Capital Management LLC
100 Northfield Street
Greenwich, Connecticut 06830
(203) 618-0065
------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
September 29, 2006
------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g),
check the following box. [_]
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss.240.13d-7 for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 1 of 11 Pages
Exhibit Index: Page 10
CUSIP No. 0000853665 Page 2 of 11
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Breeden Capital Management LLC
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
3,900,000
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
-----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
3,900,000
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
0
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,900,000
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.24%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
--------------------------------------------------------------------------------
CUSIP No. 0000853665 Page 3 of 11
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Richard C. Breeden
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
3,900,000
SHARES ----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
-----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
3,900,000
PERSON ----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
0
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,900,000
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.24%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
--------------------------------------------------------------------------------
Page 4 of 11
ITEM 1. SECURITY AND ISSUER.
The title and class of equity security to which this Statement on
Schedule 13D relates is the common stock, par value $0.01 per share ("Common
Stock"), of Applebee's International, Inc., a Delaware corporation (the
"Company"). The mailing address of the Company's principal executive offices
is 4551 W. 107th Street, Overland Park, Kansas 66207.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement is being filed by and on behalf of Breeden Capital
Management LLC, a Delaware limited liability company (the "Advisor"), and
Richard C. Breeden, a citizen of the United States of America ("Mr. Breeden").
The Advisor and Mr. Breeden are herein sometimes referred to collectively as
the "Reporting Persons." The address of the principal office of each of the
Reporting Persons is 100 Northfield Street, Greenwich, Connecticut 06830.
This Statement relates to shares of Common Stock held for the
accounts of Breeden Partners L.P., a Delaware limited partnership (the
"Delaware Fund"); Breeden Partners (California) L.P., a Delaware limited
partnership (the "California Fund"); and Breeden Partners Holdco Ltd., a
Cayman Islands exempt limited company ("Holdco"). Breeden Capital Partners
LLC, a Delaware limited liability company (the "General Partner"), is the
general partner of each of the Delaware Fund and the California Fund. Breeden
Partners (Cayman) Ltd., a Cayman Islands exempt limited company ("BPC")
(together with Holdco, the "Offshore Investors Fund") is the feeder fund for
Holdco. The Delaware Fund, the California Fund and the Offshore Investors Fund
are herein sometimes referred to collectively as the "Funds."
The Advisor is principally involved in the business of providing
investment advisory and investment management services to the Funds and, among
other things, exercises all voting and other powers and privileges
attributable to any securities held for the accounts of the Funds. Mr. Breeden
is the Managing Member of each of the General Partner and the Advisor and the
Key Principal of the Offshore Investors Fund.
During the last five years, none of the Reporting Persons nor, to the
best of their knowledge, any of their officers and directors, has been (i)
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with respect to such
laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The 3,900,000 shares of Common Stock reported herein by the Reporting
Persons were acquired by the Reporting Persons for an aggregate purchase price
of approximately $77,675,620. The shares of Common Stock that are reported on
this Statement on Schedule 13D were acquired with investment capital of the
Funds.
Page 5 of 11
ITEM 4. PURPOSE OF TRANSACTION.
The Reporting Persons have acquired the Common Stock for investment
purposes because they believe that the shares of Common Stock are undervalued
in the marketplace. Purchases of the Common Stock have been made in the
Reporting Persons' ordinary course of business and were not made for the
purpose of acquiring control of the Company.
Except as set forth in this Item 4, none of the Reporting Persons has
any present plans or proposals that relate to or would result in any of the
actions specified in clauses (a) through (j) of the instructions to Item 4 of
Schedule 13D. Representatives of the Reporting Persons have had conversations
with the Company's management, including the Chief Executive Officer and Chief
Financial Officer. The Reporting Persons intend to continue to pursue
discussions with the Company's management and potentially with members of the
Company's board of directors. Discussions to date have related primarily to
the business, financial performance, operations, capital structure, governance
and future plans of the Company, as well as measures the Reporting Persons
believe may improve shareholder value for the benefit of all of the Company's
shareholders. The Reporting Persons intend to continue their discussions with
management, and, as a result of the Reporting Persons' ongoing review and
evaluation of the business, they may also communicate with the board of
directors and/or other shareholders from time to time with respect to
operational, strategic, financial or governance matters, including composition
of the Company's board of directors, or otherwise encourage actions that the
Reporting Persons believe in their judgment will enhance shareholder value.
Specifically, the Reporting Persons believe that management and/or
the board of directors, as appropriate, should devote significantly greater
effort to enhancing shareholder returns through actions including, without
limitation, re-franchising a substantial number of Company-owned and operated
restaurants, significantly reducing capital expenditures, disposing of
non-core assets including the Company's real estate holdings, and increasing
cash returned to shareholders. The Reporting Persons also intend to advocate
modifications of certain governance and executive compensation practices that
they believe are not in the best interests of shareholders and the creation of
shareholder value.
The Reporting Persons intend to review their investment in the
Company on a continuing basis. Depending on various factors including, without
limitation, the Company's financial position and strategic direction, the
outcome of the discussions referenced above, actions taken by the Company's
board of directors, other investment opportunities available to the Reporting
Persons, price levels of the shares, and conditions in the securities markets
and the economy in general, the Reporting Persons may in the future acquire
additional securities of the Company or dispose of some or all of the
securities of the Company beneficially owned by them, or take any other
actions with respect to their investment in the Company permitted by law,
including any or all of the actions set forth in paragraphs (a) through (j) of
Item 4 of Schedule 13D.
Page 6 of 11
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b) The responses of the Reporting Persons to Rows (7) through
(13) on the cover pages of this Statement on Schedule 13D are incorporated
herein by reference. As of the close of business on the date hereof, the
Delaware Fund owned 26,307 shares of Common Stock both beneficially and as
direct owner, representing approximately 0.04% of the outstanding shares of
Common Stock; the California Fund owned 2,453,648 shares of Common Stock both
beneficially and as direct owner, representing approximately 3.30% of the
outstanding shares of Common Stock; and Holdco owned 1,420,045 shares of
Common Stock both beneficially and as direct owner, representing approximately
1.91% of the outstanding shares of Common Stock. As of the date hereof, the
2,479,955 aggregate shares of Common Stock directly owned by the Delaware Fund
and the California Fund, which shares of Common Stock may be deemed to be
beneficially owned by the General Partner, represent approximately 3.33% of
the Company's outstanding shares of Common Stock. As of the date hereof, the
3,900,000 aggregate shares of Common Stock directly owned by the Delaware
Fund, the California Fund and Holdco, which shares of Common Stock may be
deemed to be beneficially owned by the Advisor and Mr. Breeden, represent
approximately 5.24% of the Company's outstanding shares of Common Stock. All
percentages set forth in this paragraph relating to beneficial ownership of
Common Stock are based upon 74,427,928 shares outstanding, which was the total
number of shares of Common Stock outstanding as of July 24, 2006 as reported
in the Company's Quarterly Report on Form 10-Q for the quarterly period ended
June 25, 2006.
For purposes of disclosing the number of shares of Common Stock
beneficially owned by each of the Reporting Persons, the Advisor, as the
investment manager for the Funds, and Mr. Breeden, as Managing Member of the
Advisor and the General Partner, and as the Key Principal of the Offshore
Investors Fund, may be deemed to own beneficially (as that term is defined in
Rule 13d-3 under the Securities Exchange Act of 1934) all shares of Common
Stock that are owned beneficially and directly by the Funds. Each of the
Advisor and Mr. Breeden disclaims beneficial ownership of such shares of
Common Stock for all other purposes.
(c) Except as set forth above or in the attached Schedule I, no
Reporting Person has effected any transaction in shares of Common Stock during
the 60 days preceding the date hereof.
(d) Not applicable.
(e) Not applicable.
Page 7 of 11
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Except as set forth herein, there are no contracts, understandings or
relationships among the persons named in Item 2 or between such persons and
any other person with respect to the Common Stock.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
EXHIBIT A. Agreement as to Joint Filing of Schedule 13D, dated
October 10, 2006, by and between the Advisor and Mr. Breeden
Page 8 of 11
SIGNATURES
After reasonable inquiry and to the best of each of the undersigned's
knowledge and belief, each of the undersigned certifies that the information
set forth in this statement is true, complete and correct.
Dated: October 10, 2006
BREEDEN CAPITAL MANAGEMENT LLC
By: /s/ Richard C. Breeden
----------------------------------
Richard C. Breeden
Managing Member
/s/ Richard C. Breeden
-------------------------------------
Richard C. Breeden
Page 9 of 11
Schedule I
TRANSACTIONS DURING THE PAST 60 DAYS BY THE REPORTING PERSONS
The following table sets forth all transactions with respect to
shares of Common Stock effected during the past 60 days by any of the
Reporting Persons. All such transactions were effected in the open market.
Shares Purchased for the Account of the California Fund
Price
Date Shares Purchased Per Share
-------------------------- ----------------------- ---------------
September 18, 2006 31,437 $22.03
September 21, 2006 105,002 $22.26
September 22, 2006 88,011 $22.02
September 25, 2006 7,482 $22.09
September 26, 2006 3,976 $22.08
September 27, 2006 3,458 $22.15
September 28, 2006 84,882 $22.26
September 29, 2006 140,715 $21.73
Shares Purchased for the Account of Holdco
Price
Date Shares Purchased Per Share
-------------------------- ---------------------- ---------------
September 18, 2006 18,195 $22.03
September 21, 2006 60,769 $22.26
September 22, 2006 50,936 $22.02
September 25, 2006 4,330 $22.09
September 26, 2006 2,301 $22.08
September 27, 2006 2,001 $22.15
September 28, 2006 49,125 $22.26
September 29, 2006 81,439 $21.73
Shares Purchased for the Account of the Delaware Fund
Price
Date Shares Purchased Per Share
-------------------------- ---------------------- ---------------
September 18, 2006 368 $22.03
September 21, 2006 1,229 $22.26
September 22, 2006 1,030 $22.02
September 25, 2006 88 $22.09
September 26, 2006 46 $22.08
September 27, 2006 41 $22.15
September 28, 2006 993 $22.26
September 29, 2006 1,646 $21.73
Page 10 of 11
EXHIBIT INDEX
Page No.
--------
EXHIBIT A. Agreement as to Joint Filing of Schedule 13D, dated
October 10, 2006, by and between the Advisor
and Mr. Breeden 11
Page 11 of 11
EXHIBIT A
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(k) of the Securities Exchange Act of
1934, as amended, the undersigned agree to the joint filing on behalf of each
of them of a Statement on Schedule 13D (including any and all amendments
thereto) with respect to the common stock of Applebee's International, Inc.
and further agree that this Joint Filing Agreement shall be included as an
Exhibit to such joint filing.
The undersigned further agrees that each party hereto is responsible
for timely filing of such statement on Schedule 13D and any amendments
thereto, and for the completeness and accuracy of the information concerning
such party contained therein, provided that no party is responsible for the
completeness and accuracy of the information concerning the other party,
unless such party knows or has reason to believe that such information is
inaccurate.
This Joint Filing Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original instrument, but
all of such counterparts together shall constitute but one agreement.
In evidence thereof the undersigned, being duly authorized, hereby
execute this Joint Filing Agreement this 10th day of October, 2006.
BREEDEN CAPITAL MANAGEMENT LLC
By: /s/ Richard C. Breeden
-------------------------------
Richard C. Breeden
Managing Member
/s/ Richard C. Breeden
----------------------------------
Richard C. Breeden