Form 8-K for Applebee's International, Inc.
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) January 9, 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)
Registrant's telephone number, including area code (913) 967-4000
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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.
The information set forth below under Item 5.02 of this Form 8-K regarding
the employment agreements between Applebee's International, Inc. (the "Company")
and Mr. Dave Goebel and Mr. Steve Lumpkin is incorporated into this Item 1.01 by
reference.
The Employment Agreements between the Company and Mr. Goebel and Mr.
Lumpkin are attached hereto as Exhibits 10.1 and 10.2, respectively, and are
incorporated herein by reference.
Item 1.02. Termination of a Material Definitive Agreement.
As a result of his new Employment Agreement described in Item 5.02 below,
the prior Employment Agreement between the Company and Mr. Lumpkin dated August
7, 2002 terminated as of January 9, 2006.
Item 5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
On January 9, 2006, the Board of Directors of the Company announced plans
to separate the Chairman and Chief Executive Officer positions and implement the
Company's leadership succession plan. Following the role separation, which will
take place this summer, Mr. Lloyd Hill, Chief Executive Officer of the Company,
will continue to serve as Chairman of the Board and a new CEO will be named.
In preparation for the transition, effective immediately, Mr. Dave Goebel,
President and Chief Operating Officer, will assume responsibility for all
management, operations and financial functions that now report to Mr. Hill. In
his expanded role as the Company's principal executive officer, Mr. Goebel will
continue to report to Mr. Hill.
In connection with his new responsibilities, Mr. Goebel and the Company
entered into a three year Employment Agreement effective January 9, 2006. The
three year term commenced January 3, 2006 and the Employment Agreement
automatically renews for additional one year terms unless either party gives 60
days notice of non-renewal.
Mr. Goebel will receive an initial base salary of $550,000, which may be
increased by the Board of Directors in its sole discretion. Mr. Goebel will be
paid such additional compensation and bonuses as may be determined in the sole
discretion of the Board. His target bonus for fiscal 2006 is 100% of his base
salary. Mr. Goebel is also entitled to participate in such other benefit plans
of the Company that are generally available to employees at his level and to
receive such equity-based compensation awards as may be approved by the Board.
In the event of a termination by the Company without cause or by Mr. Goebel
for good reason (each as defined in the Employment Agreement), he will receive
monthly severance payments, for a period of 24 months (the "Severance Payment
Period"), equal to 1/12 of his base salary and 1/12 of the greater of the
average of his actual bonus for the preceding three fiscal years or his target
bonus for the fiscal year in which termination occurred, multiplied by the
average percentage of bonus attainment over the preceding three fiscal years.
All outstanding
stock options and stock appreciation rights will fully vest and all restrictions
will be removed from any restricted stock grants. He would also be entitled to
payment under the Company's FlexPerks benefit for the year of termination and
would receive continued payment for the Severance Payment Period of the
Company's matching portion of his Non-Qualified Deferred Compensation Plan or
other retirement arrangement. Mr. Goebel would be subject to certain
non-competition and non-solicitation obligations through the Severance Payment
Period.
If Mr. Goebel does not continue as an employee following an expiration of
the Employment Agreement, the Company may elect to make the severance payments
described above for the Severance Payment Period, which the Company may extend
for an additional 12 months in its sole discretion. Mr. Goebel would be subject
to the non-competition and non-solicitation obligations for the Severance
Payment Period.
If Mr. Goebel's employment is terminated for any reason following a change
in control (as defined in the Employment Agreement), he would be entitled to a
lump sum payment equal to (i) two times the sum of his base salary plus (ii) the
greater of (A) the average of his actual bonus for the preceding three fiscal
years or (B) his target bonus amount for the fiscal year in which termination
occurs, multiplied by the average percentage bonus attainment over the preceding
three fiscal years. He would also be entitled to the other equity vesting and
benefit payments described above and would be subject to a 24-month
non-competition obligation.
The Company also entered into a new Employment Agreement, effective January
9, 2006, with Mr. Steve Lumpkin, superceding his prior employment agreement. The
terms of Mr. Lumpkin's Employment Agreement are substantially the same as Mr.
Goebel's except that Mr. Lumpkin's initial base salary is $475,000 and his
target bonus for fiscal 2006 is 85% of his base salary. Mr. Lumpkin will also
receive a grant on January 11, 2006 under the Company's Amended and Restated
1995 Equity Incentive Plan and form executive Non-Qualified Stock Option Award
Agreement of options to purchase 150,000 shares of common stock. The options
vest five years from the date of grant and have a term of 7 years.
The Company also announced that Mr. Goebel was appointed as a member of the
Board of Directors, effective January 9, 2006. Mr. Goebel fills a vacancy
created by an increase in the number of members of the Board of Directors from
10 to 12, approved by the Board of Directors at its December 2005 meeting. Mr.
Goebel will serve as Class I director with a term expiring at the 2008 Annual
Meeting of Stockholders. In accordance with the Company's Bylaws, Mr. Goebel
will be nominated at the 2006 Annual Meeting of Stockholders for election as a
Class I director with a term expiring at the 2008 Annual Meeting of
Stockholders.
Mr. Goebel, 55, 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. 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.
The Company also announced that the second vacancy created by the increase
in the number of Board members will be filled by Mr. Rogelio Rebolledo,
president and chief executive officer of PBG (Pepsi Bottling Group) Mexico. Mr.
Rebolledo will be nominated for election by the stockholders in May at the 2006
Annual Meeting of Stockholders to serve as a Class II director with a term
expiring at the 2009 Annual Meeting of Stockholders.
Prior to his position with PBG, which he assumed in January 2004, Mr.
Rebolledo served as President and CEO of Frito-Lay International. He retired at
the end of 2003 from Frito-Lay after 28 years of service. While at Frito-Lay, he
led the company's expansion throughout Latin America, Asia and Australia. Mr.
Rebolledo is a Mexican national, with a bachelor's degree in chemical
engineering from the National University of Mexico and an MBA from the
University of Iowa. There have been no related party transactions between the
Company and Mr. Rebolledo.
The Company's press release regarding these matters is attached hereto as
Exhibit 99.1 and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(c) EXHIBITS. The following exhibits are filed herewith:
10.1 Employment Agreement dated as of January 9, 2006 by and between
the Company and Mr. Dave Goebel.
10.2 Employment Agreement dated as of January 9, 2006 by and between
the Company and Mr. Steve Lumpkin.
99.1 Press release of Applebee's International, Inc., dated January 9,
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: January 9, 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
10.1 Employment Agreement dated as of January 9, 2006 by and between
the Company and Mr. Dave Goebel.
10.2 Employment Agreement dated as of January 9, 2006 by and between
the Company and Mr. Steve Lumpkin.
99.1 Press release of Applebee's International, Inc., dated January 9,
2006.