STEVEN K. LUMPKIN
                         APPLEBEE'S INTERNATIONAL, INC.
                              EMPLOYMENT AGREEMENT

         This  Employment  Agreement  ("Agreement")  is  made  effective  as  of
August 7,  2002, by  and  between  Applebee's  International,  Inc., a  Delaware
corporation (the "Company"), and Steven K. Lumpkin (the "Executive").

         WHEREAS,  the Company believes it to be in its best interest to provide
for  continuity of management  and to provide  protection for its valuable trade
secrets and confidential information; and

         WHEREAS,  the Company desires to employ the Executive and the Executive
is willing to render his  services  to the  Company on the terms and  conditions
with respect to such employment hereinafter set forth.

         NOW,  THEREFORE,  in consideration of premises and the mutual terms and
conditions hereof, the Company and the Executive hereby agree as follows:

         1.  Employment.  The  Company  hereby  employs  the  Executive  and the
Executive  hereby  accepts  employment  with  the  Company  upon the  terms  and
conditions hereinafter set forth.

         2. Exclusive Services. The Executive shall devote all necessary working
time,  ability and  attention to the business of the Company  during the term of
this  Agreement  and shall not,  directly  or  indirectly,  render any  material
services to any business,  corporation, or organization whether for compensation
or otherwise,  without the prior  knowledge and written  consent of the Board of
Directors of the Company (hereinafter referred to as the "Board").

         3. Duties. The Executive is hereby employed as Executive Vice President
and Chief Financial  Officer of the Company and shall render his services at the
principal  business offices of the Company,  as such may be located from time to
time,  unless  otherwise  agreed in writing between the Board and the Executive.
The  Executive  shall have such  authority  and shall perform such duties as are
described in Exhibit A attached hereto.

         4. Term.  This  Agreement  shall have a term of  eighteen  (18)  months
commencing  as  of  August 7,  2002  and  is  subject to earlier  termination as
hereinafter provided.

         5.  Compensation.  As compensation for his services rendered under this
Agreement, the Executive shall be entitled to receive the following:

                  a. Base Salary.  The executive  shall be paid a base salary of
         at least $300,000 per year, payable in 26 equal bi-weekly  installments
         during the term of this Agreement,  prorated for any partial employment
         month. Such salary ("Base Salary") may be increased by the Board in its
         sole discretion.

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                  b. Additional  Compensation.  The Executive shall be paid such
         additional compensation and bonuses as may be determined and authorized
         in the sole discretion of the Board.  The Executive's  target bonus for
         2002 is 60% of his Base Salary.

         6.  Benefits.  In  addition  to  the  compensation  to be  paid  to the
Executive  pursuant to Section 5 hereof, the Executive shall further be entitled
to receive the following:

                  a.  Participation  in Employee  Plans.  The Executive shall be
         entitled  to  participate  in any health,  disability,  group term life
         insurance  plan, any pension,  retirement,  or profit sharing plan, any
         executive bonus plan, or any other perquisites and fringe benefits that
         may be extended generally from time to time to employees of the Company
         at the level of Executive Vice President.

                  b. Vacation.  The Executive  shall be entitled to a minimum of
         four (4) weeks vacation with full salary and benefits each year.  Under
         current  Company  policy (which may be changed at the discretion of the
         Company)  no cash or other  payment  will be due,  however,  for unused
         vacation and vacation may not be carried over from any calendar year to
         the next. Upon any termination of the  Executive's  employment,  earned
         but  unused  vacation  will be paid in  accordance  with the  Company's
         policy then in effect.

                  c.  Equity  Awards.   The  Executive   shall  be  entitled  to
         equity-based  compensation  awards that may be extended  generally from
         time to time to employees of the Company at the level of Executive Vice
         President,  as  approved  by  the  Board,  subject  to  the  terms  and
         conditions of the respective equity-based  compensation plans and award
         agreements and the provisions of this Agreement.

         7.  Reimbursement of Expenses.  Subject to such rules and procedures as
from time to time are specified by the Company,  the Company shall reimburse the
Executive  on a  monthly  basis for  reasonable  business  expenses  necessarily
incurred in the performance of his duties under this Agreement.

         8.Confidentiality/Trade  Secrets.  The Executive  acknowledges that his
position  with the Company is one of the highest  trust and  confidence  both by
reason of his position and by reason of his access to and contact with the trade
secrets and  confidential and proprietary  business  information of the Company.
Both during the term of this Agreement and thereafter,  the Executive  covenants
and agrees as follows:

                  a. He shall use his best efforts and exercise utmost diligence
         to  protect  and  safeguard  the trade  secrets  and  confidential  and
         proprietary  information  of the Company,  including but not limited to
         the identity of its  customers and  suppliers,  its  arrangements  with
         customers and suppliers, and its technical and financial data, records,
         compilations  of  information,  processes,  recipes and  specifications
         relating to its customers, suppliers, products and services;

                  b. He  shall  not  disclose  any of  such  trade  secrets  and
         confidential and proprietary information,  except as may be required in
         the course of his employment with the Company or by law; and

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<PAGE>

                  c. He  shall  not use,  directly  or  indirectly,  for his own
         benefit or for the  benefit of another,  any of such trade  secrets and
         confidential and proprietary information.

         All files, records,  documents,  drawings,  specifications,  memoranda,
notes,  or other  documents  relating to the  business of the  Company,  whether
prepared by the Executive or otherwise coming into his possession,  shall be the
exclusive  property of the Company and shall be delivered to the Company and not
retained by the Executive  upon  termination  of his  employment  for any reason
whatsoever or at any other time upon request of the Board.

         9. Discoveries.  The Executive  covenants and agrees that he will fully
inform the  Company of and  disclose to the  Company  all  inventions,  designs,
improvements,  discoveries, and processes ("Discoveries") that he has now or may
hereafter have during his employment with the Company and that pertain or relate
to the business of the Company or to any experimental work, products,  services,
or  processes  of the Company in  progress  or planned  for the future,  whether
conceived by the  Executive  alone or with others,  and whether or not conceived
during  regular  working  hours or in  conjunction  with the use of any  Company
assets.  All such  Discoveries  shall be the  exclusive  property of the Company
whether or not patent or trademark applications are filed thereon. The Executive
shall  assist  the  Company,  at any time  during  or after his  employment,  in
obtaining  patents on all such Discoveries  deemed patentable by the Company and
shall  execute  all  documents  and do all things  necessary  to obtain  letters
patent, vest the Company with full and exclusive title thereto,  and protect the
same against  infringement by others.  If such assistance  takes place after his
employment is terminated,  then the Executive shall be paid by the Company at an
hourly rate  determined  based on fifty percent (50%) of his existing  salary at
the date of termination divided by 2500 for any time actually spent in rendering
such assistance at the request of the Company.

         10. Non-Competition. The Executive covenants and agrees that during the
period  of his  employment  and for  additional  periods  after  termination  of
employment  as  provided  in Section 13 or 14, he shall not,  without  the prior
written consent of the Board, directly or indirectly, as an employee,  employer,
consultant, agent, principal, partner, shareholder, corporate officer, director,
or through any other kind of ownership  (other than  ownership of  securities of
publicly held corporations of which the Executive owns less than five percent 5%
of any  class of  outstanding  securities)  or in any  other  representative  or
individual  capacity,  engage in or render any services to any business in North
America  engaged  in the  casual  dining  restaurant  industry,  or in any other
segment of the restaurant industry in which the Company or any subsidiary of the
Company  may  become  involved  after the date  hereof  and prior to the date of
termination of Executive's  employment.  For purposes of this Agreement  "casual
dining  restaurant  industry"  consists of "sit down table service"  restaurants
serving  alcoholic  beverages,  with a per guest  average guest check within the
United States of under $20.00  (adjusted  upward each year to recognize  Company
menu price increases).

         11. Nonsolicitation. The Executive agrees that during the period of his
employment,  and for a period of two (2) years  following the effective  date of
the  termination  of the  Executive's  employment  for any reason,  he will not,
either  directly or  indirectly,  for himself or for any third party,  except as
otherwise agreed to in writing by the Company's Chief Executive Officer,  employ


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or hire any other  person  who is then  employed  by the  Company,  or  solicit,
induce,  recruit,  or cause any other person who is then employed by the Company
to terminate  his/her  employment  for the purpose of joining,  associating,  or
becoming  employed  with any business or activity  that is engaged in the casual
dining  restaurant  industry or any other segment of the restaurant  industry in
which the  Company  may become  involved  after the date hereof and prior to the
date of any termination of employment.

         12. Remedies for Breach of Covenants of the Executive.

                  a. The Company and the Executive specifically  acknowledge and
         agree that the  foregoing  covenants of the Executive in Sections 8, 9,
         10, and 11 are  reasonable  in  content  and scope and are given by the
         Executive  for adequate  consideration.  The Company and the  Executive
         further   acknowledge  and  agree  that,  if  any  court  of  competent
         jurisdiction  or other  appropriate  authority  shall disagree with the
         parties' foregoing  agreement as to reasonableness,  then such court or
         other  authority  shall reform or otherwise the foregoing  covenants as
         reason dictates.

                  b. The covenants set forth in Sections 8, 9, 10 and 11 of this
         Agreement,  as  provided  in Section  13 or 14,  shall  continue  to be
         binding upon the  Executive,  notwithstanding  the  termination  of his
         employment with the Company for any reason  whatsoever.  Such covenants
         shall be deemed and construed as separate agreements independent of any
         other provisions of this Agreement and any other agreement  between the
         Company  and the  Executive.  The  existence  of any  claim or cause of
         action by the Executive against the Company,  unless predicated on this
         Agreement,  shall not  constitute a defense to the  enforcement  by the
         Company of any or all such covenants.  It is expressly  agreed that the
         remedy at law for the breach of any such  covenant  is  inadequate  and
         injunctive  relief  and  specific  performance  shall be  available  to
         prevent the breach or any threatened breach thereof.

         13.  Termination.  This Agreement (other than Sections 8, 9, 10 and 11,
as provided in Section 13 or 14, shall  survive any  termination  hereof for any
reason, including non-renewal) may be terminated as follows:

                  a. Subject to earlier  termination  as provided  herein,  this
         Agreement will  automatically  renew on each anniversary date beginning
         at the end of its initial  term,  unless  either  party  gives  written
         notice of  non-renewal at least sixty (60) days prior to an anniversary
         date.  The first such renewal shall be for a thirty (30) month term and
         any subsequent  renewals will be for one-year  terms. If within the two
         (2) year period following  non-renewal the Executive ceases to continue
         in the employ of the Company,  the Company may elect to make  Severance
         Payments to the Executive under Section  13(g)(i),  (ii) and (vii) and,
         if so, the  provisions  of Section 10 shall survive and be in force for
         the  Severance  Payment  Period.  The Company must make an election and
         must  notify  the  Executive  of  such an  election  to  provide  these
         Severance  Payments within the first one hundred fifty (150) day period
         following non-renewal of this Agreement. If no such election is made by
         the  Company to make  Severance  Payments  within the first one hundred
         fifty (150) days following  non-renewal  and the Executive is no longer
         in the employ of the Company  and the Company did not offer  renewal of


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<PAGE>

         this  Agreement,  the  provisions  of  Section  10 will  be  terminated
         effective  one  hundred  fifty  (150)  days after  non-renewal  of this
         Agreement. If no such election is made by the Company to make Severance
         Payments  within  the first one  hundred  fifty  (150)  days  following
         non-renewal and the Executive is no longer in the employ of the Company
         and the non-renewal was caused by the  Executive's  election,  then the
         Company  shall have the  balance of the two (2) year  period  following
         non-renewal in which to elect to make Severance Payments.  In addition,
         if the Executive does not continue to offer his services to the Company
         (illness  notwithstanding) in his then capacity and consistent with his
         prior practice, for at least 120 days following a non-renewal caused by
         his  election,  the  provisions  of Section 10 shall  survive and be in
         force  during such one hundred  twenty  (120) days and for one (1) year
         thereafter,  and no Severance Payments of any kind shall be required of
         the Company.

                  b.  The  Company  may   terminate   this   Agreement  and  the
         Executive's  employment  hereunder at any time,  with or without Cause,
         upon written notice to the Executive.  The Executive may terminate this
         Agreement and his employment  hereunder,  at any time,  with or without
         Good Reason.  In the event of a termination  by the  Executive  without
         Good Reason the  provisions of Section 10 shall survive and be in force
         for 24 months.

                  c. In the event of termination  by the Company  without Cause,
         the effective  date thereof shall be stated in a written  notice to the
         Executive from the Board,  which shall not be earlier than 30 days from
         the date such  written  notice is delivered  to the  Executive.  In the
         event the Company effects a termination without Cause and Lloyd Hill is
         at that time no longer  Chief  Executive  Officer of the Company or the
         Executive no longer  reports  directly to Mr. Hill then,  the Executive
         shall be entitled to receive all Severance Payments under Section 13(g)
         and the  provisions of Section 10 shall survive and be in force for the
         Severance   Payment  Period.   In  the  event  the  Company  effects  a
         termination without Cause at a time when (i) Lloyd Hill continues to be
         Chief Executive  Officer and (ii) the Executive reports directly to Mr.
         Hill,  then the  provisions of Section 10 shall survive and be in force
         for 24 months and the  Executive  shall only be entitled to receive the
         amounts  described in subsections (i), (ii) and (vii) of Section 13(g),
         below.

                  d. In the event of termination by the Company with Cause,  the
         Executive  shall be entitled to receive  only his salary  through  such
         date of termination and any bonus amounts as may be payable pursuant to
         the terms of any written plans in which the Executive was a participant
         immediately  prior to the  effective  date of the  termination  and the
         provisions  of Section 10 shall  survive and be in force for 24 months.
         The Executive shall also be entitled to exercise his rights under COBRA
         at the Executive's expense.

                  e. The following shall constitute  "Cause":

                           (i) The  Executive  is  convicted  of -- or pleads no
                  contest / nolo contendre to -- any felony or any other serious
                  criminal offense; or

                           (ii) The Executive breaches any material provision of
                  this Agreement (other than as related to Sections 8, 9, 10 and
                  11  which  is  covered  by  Section   13(e)(iii)   below),  or
                  habitually neglects to perform his duties under this Agreement


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                  (other  than  for  reasons  related  to  illness,   injury  or
                  temporary  disability)  and  such  breach  or  neglect  is not
                  corrected in the Company's  good faith belief  within  fifteen
                  (15) business  days after  receipt of written  notice from the
                  Board of the Company; or

                           (iii) The Executive breaches any provision of Section
                  8,  9, 10 or 11,  and  such  breach  is not  corrected  in the
                  Company's  good faith  belief  within five (5)  business  days
                  after  receipt  of  written  notice  from the Chief  Executive
                  Officer; or

                           (iv) The Executive is determined to have violated any
                  applicable   local,   state  or  federal   law   relating   to
                  discrimination or harassment through egregious conduct; or

                           (v)  The  Executive   dies  or  becomes   permanently
                  disabled  from  continuing  to  provide  the level of  service
                  required under this Agreement.

                  f.  The  Executive  shall  have  "Good  Reason"  to  effect  a
         termination  in the  event  that  (a)  Lloyd  Hill is no  longer  Chief
         Executive Officer of the Company or (b) the Executive no longer reports
         directly to Mr. Hill,  and the Company (i) breaches its  obligations to
         pay any salary,  benefit or bonus due  hereunder  or, (ii) requires the
         Executive to relocate  more than 50 miles from the greater  Kansas City
         area, or (iii) substantially diminishes the functional responsibilities
         of the Executive (it being understood that structural changes,  such as
         a change in title or to whom the Executive  reports,  do not constitute
         changes  in  functional  responsibilities),  and in the event of any of
         (i), (ii) or (iii) the Executive has given written  notice to the Board
         as to the  details  of the basis for such  Good  Reason  within 30 days
         following the date on which the Executive alleges the event giving rise
         to such Good  Reason  occurred  and the Company has failed to provide a
         reasonable  cure within ten (10) days after its receipt of such notice.
         In the event of a termination  by the Executive  with Good Reason,  the
         Executive  will be entitled to all  Severance  Payments  under  Section
         13(g) and the  provisions  of Section 10 shall  survive and be in force
         for the Severance Payment Period.

                  g. The "Severance  Payments" consist of the following:  (i) an
         amount paid  monthly  equal to  one-twelfth  (1/12) of the  Executive's
         annual Base Salary at the current  effective  annual rate, paid for the
         Severance  Payment  Period;  (ii)  an  amount  paid  monthly  equal  to
         one-twelfth (1/12) of the greater of (y) the average of the Executive's
         actual bonus  attributable  to each of the  preceding  three (3) fiscal
         years or (z)  Executive's  target  bonus  amount for the fiscal year in
         which the  termination  occurred  multiplied by the average  percentage
         bonus  attainment of the Executive over the preceding  three (3) fiscal
         years, in either case paid for the Severance Payment Period;  (iii) the
         immediate  vesting of any unvested  stock options held by the Executive
         as of the day immediately  preceding the effective date of termination;
         (iv) with respect to all Restricted Share awards, all restrictions will
         immediately  be  removed  and  deemed  to have been  satisfied  and any


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<PAGE>

         vesting  periods  will  be   accelerated;   (v)  with  respect  to  all
         Performance  Share awards,  the Executive will receive,  at the time of
         the first  Severance  Payment,  a lump sum pro rata portion (based upon
         the  number of  complete  months  that have  passed in the  Performance
         Period as of the effective date of the  termination)  of the applicable
         Award Agreement as if all  performance  criteria were achieved at their
         Target  Levels (as defined in the  Performance  Share  Plan);  (vi) the
         continued  payment for the duration of the Severance Payment Period, of
         the  Company's  matching  portion  of  the  Executive's   Non-Qualified
         Deferred Compensation Plan (or such retirement arrangement,  if any, as
         may  replace  it);  and (vii) the payment by the Company of premiums on
         behalf of the  Executive,  for coverage  substantially  similar to that
         provided under the Company's group health and medical policies,  for so
         long as the  Executive  elects to continue  such  coverage,  but for no
         longer than the Severance Payment Period.

                  h. The "Severance Payment Period" is initially the twenty-four
         (24)  month  period   immediately   following  the  effective  date  of
         termination of the Executive's employment. The Severance Payment Period
         may be extended,  at the sole  discretion  of the  Company,  by written
         notice to the  Executive  within 30 days  after the  effective  date of
         termination  of  employment,  for  up to 12  additional  months  by the
         continued payment of the amounts under Section 13(g)(i) and (ii).

                  i. In the event of any  termination of the Executive,  whether
         by the  Executive or the Company and for any reason,  participation  by
         the Executive in all compensation and benefit plans of the Company will
         cease upon the  effective  termination  date and all unvested  bonuses,
         equity awards and other like items will  immediately  lapse,  except as
         specifically provided in subsection (g), above. All amounts owed by the
         Executive  to the  Company  for  any  reasons  whatsoever  will  become
         immediately  due and payable and the Company will have the right in its
         discretion  to collect  any or all such  amounts by offset  against any
         amounts due to the Executive from the Company whether or not under this
         Agreement. In addition, the Severance Payments hereunder are in lieu of
         and supercede any other severance or termination  benefits to which the
         Executive might otherwise be entitled, including any benefits under the
         Company's Severance Program for Salaried Associates.

         14. Termination After Change in Control.  If within 12 months following
a Change in Control,  as defined  below,  the  employment  of the  Executive  is
terminated by the Company or by the Executive,  for any reason whatsoever,  then
the provisions of Section 13 shall not apply and the following shall occur:

                  a. On the tenth  business day following the effective  date of
         such termination,  the Executive shall receive a lump sum payment equal
         to (A) the Executive's base salary in effect  immediately  prior to the
         change  in  control,  plus  the  greater  of  (i)  the  average  of the
         Executive's  actual bonus  attributable  to each of the preceding three
         (3) fiscal  years or (ii) the  Executive's  target bonus amount for the
         fiscal year in which the termination  occurs  multiplied by the average
         percentage  bonus  attainment of the Executive over the preceding three
         (3) fiscal years, (B) divided by twelve (12) and (C) multiplied by 24;

                  b. The  Company  shall (i) pay health  insurance  premiums  on
         behalf of the  Executive,  for coverage  substantially  similar to that
         provided under the Company's  group health  policy,  for so long as the
         Executive  elects to continue such  coverage,  and (ii) continue to pay
         the  Company's  matching  portion  of the  Executive's  Investment  For
         Retirement Agreement with the Company (or such retirement  arrangement,
         if any,  as may  replace  it),  in both cases for up to a maximum of 24
         months.

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<PAGE>

                  c. The immediate vesting of any unvested stock options held by
         the Executive as of the day immediately preceding the effective date of
         termination  and,  with respect to all  Restricted  Share  awards,  all
         restrictions  will  immediately  be  removed  and  deemed  to have been
         satisfied and any vesting periods will be accelerated, and with respect
         to all Performance Share awards, the Executive will receive on the 10th
         business day  following the  effective  date of such  termination a pro
         rata portion (based upon the number of complete months that have passed
         in the  Performance  Period as of the date of the Change in Control) of
         the  applicable  Award  Agreement as if all  performance  criteria were
         achieved at their Target Levels.

                  d.  Participation  by the  Executive in all  compensation  and
         benefit  plans of the  Company  will cease upon the  effective  date of
         termination  and all  unvested  bonuses,  equity  awards and other like
         items  will  immediately  lapse,  except as  specifically  provided  in
         subsection (c),  above. In addition,  all amounts owed by the Executive
         to the Company for any reasons  whatsoever will become  immediately due
         and payable and the Company  will have the right in its  discretion  to
         collect  any or all such  amounts by offset  against any amounts due to
         the Executive from the Company whether or not under this Agreement.

                  e.  The  Executive  shall  be  bound  by  the  non-competition
         provisions  of Section 10,  which shall remain in full force and effect
         for a period of 24 months  following the effective  date of Executive's
         termination.

                  f. In the event of a Change in  Control,  if the total  amount
         payable by the Company to the  Executive  pursuant  to this  Section 14
         (the "Section 14 Amount") would create an excess parachute payment,  as
         that term is defined in Section 280G of the Internal  Revenue Code (the
         "Code"),  then,  the Executive  shall be paid either (i) the Section 14
         Amount,  or (ii) the  Section 14 Amount  reduced to an amount  equal to
         one-dollar  ($1) less than the maximum  amount  allowed under the Code,
         whichever  amount  results  in the  greater  after-tax  payment  to the
         Executive.

         15. Definitions Related to Change in Control.

                  a.  "Change in Control"  means any one of the  following:  (i)
         Continuing  Directors no longer constitute at least 2/3 of the Board of
         Directors;  (ii) any  person or group of  persons  (as  defined in Rule
         13d-5 under the Securities  Exchange Act of 1934 (the "Exchange Act")),
         together with its affiliates,  become the beneficial  owner (as defined
         in Rule 13d-3  under the  Exchange  Act),  directly or  indirectly,  of
         thirty percent (30%) or more of the Company's then  outstanding  Common
         Stock or thirty  percent (30%) or more of the combined  voting power of
         the Company's  then  outstanding  securities  (calculated in accordance


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<PAGE>

         with Section 13(d)(3) or 14(d) of the Exchange Act) entitled  generally
         to vote for the election of the Company's  Directors;  (iii) the merger
         or consolidation of the Company with any other corporation, the sale of
         substantially  all of the assets of the Company or the  liquidation  or
         dissolution  of  the  Company,  unless,  in the  case  of a  merger  or
         consolidation,  the then  Continuing  Directors  in office  immediately
         prior to such merger or  consolidation  will constitute at least 2/3 of
         the Board of Directors of the surviving  corporation  of such merger or
         consolidation  and any  parent  (as such term is  defined in Rule 12b-2
         under the Exchange Act of such corporation; or (iv) at least 2/3 of the
         then  Continuing  Directors  in office  immediately  prior to any other
         action  proposed to be taken by the  Company's  stockholders  or by the
         Company's Board of Directors  determine that such proposed  action,  if
         taken,  would  constitute  a change in control of the  Company and such
         action is taken.

                  b.  "Continuing  Director" means any individual who either (i)
         was a member of the Company's Board of Directors on the date hereof, or
         (ii) was designated  (as of the day of initial  election as a Director)
         as  a  Continuing  Director  by  a  majority  of  the  then  Continuing
         Directors.

         16. Arbitration of Disputes.

                  a. Any  dispute or claim  arising  out of or  relating to this
         Agreement or any termination of the Executive's employment,  other than
         with  respect to Sections 8 through  12,  shall be settled by final and
         binding  arbitration  in the greater Kansas City  metropolitan  area in
         accordance  with  the  Commercial  Arbitration  rules  of the  American
         Arbitration  Association,  and judgment upon the award  rendered by the
         arbitrators may be entered in any court having jurisdiction thereof.

                  b.  In  the  event  that  the  Company   does  not  submit  to
         arbitration hereunder or submits to arbitration but seeks to nullify or
         reverse the effect of such  arbitration by alleging that arbitration is
         unenforceable  against it, the Company  shall pay all costs  (including
         expenses and attorneys'  fees) incurred by the Executive as a result of
         such action by the Company  and if the  Company is  successful  in such
         attempt, it shall bear all legal costs incurred by the Executive in any
         resulting  litigation  relating to this Agreement or any termination of
         the Executive's employment.

                  c. The fees and  expenses  of the  arbitration  panel shall be
         borne by the Company.

                  d. If the Company breaches its obligations hereunder following
         a Change in Control and the  Executive is successful in a claim brought
         by him in  arbitration  for damages or other relief against the Company
         related to such breach,  the Executive shall be entitled to an award of
         his costs (including  expenses and attorneys'  fees),  incurred in such
         arbitration.

         17. Mitigation. The Executive shall have no duty to attempt to mitigate
the level of benefits  payable by the Company to him  hereunder  and the Company
shall not be  entitled to set off against  the  amounts  payable  hereunder  any
amounts  received  by  the  Executive  from  any  other  source,  including  any
subsequent employer.

         18.  Notices.  Any notices to be given hereunder by either party to the
other may be  effected  either  by  personal  delivery  in  writing  or by mail,
registered or certified,  postage prepaid, with return receipt requested. Mailed
notices shall be addressed as follows:

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<PAGE>

                  a. If to the Company:

                                    Applebee's International, Inc.
                                    4551 West 107th Street, Suite 100
                                    Overland Park, Kansas  66207
                                    Attn:  General Counsel

                  b. If to the Executive:

                                    Steven K. Lumpkin
                                    6811 West 132nd Terrace
                                    Overland Park, KS  66209

Either party may change its address for notice by giving notice in accordance
with the terms of this Section 18.

         19. General Provisions.

                  a. Law  Governing.  This  Agreement  shall be  governed by and
         construed in accordance with the laws of the State of Kansas.

                  b. Invalid  Provisions.  If any provision of this Agreement is
         held to be illegal,  invalid,  or  unenforceable,  then such  provision
         shall be fully  severable  and this  Agreement  shall be construed  and
         enforced as if such illegal,  invalid,  or unenforceable  provision had
         never  comprised a part hereof;  and the  remaining  provisions  hereof
         shall  remain in full force and effect and shall not be affected by the
         illegal,  invalid,  or  unenforceable  provision  or by  its  severance
         herefrom.   Furthermore,   in  lieu  of  such  illegal,   invalid,   or
         unenforceable provision there shall be added automatically as a part of
         this  Agreement  a  provision  as  similar  in terms  to such  illegal,
         invalid,  or  unenforceable  provision  as may be possible and still be
         legal, valid or enforceable.

                  c.  Entire  Agreement.  This  Agreement  sets forth the entire
         understanding  of the parties and  supersedes  all prior  agreements or
         understandings,  whether  written or oral,  with respect to the subject
         matter  hereof  other than the  Indemnification  Agreement  between the
         Company  and  the  Executive  dated  May  1,  1995;  the  Nondisclosure
         Agreement  between the Company and the Executive dated May 1, 1995, and
         all  agreements,  acknowledgments,  designations  and directions of the
         Executive made or given under any Company  policy  statement or benefit
         program. No terms, conditions,  warranties,  other than those contained
         herein,  and no  amendments  or  modifications  hereto shall be binding
         unless made in writing and signed by the parties hereto.

                  d.  Binding  Effect.  This  Agreement  shall  extend to and be
         binding  upon and inure to the  benefit to the  parties  hereto,  their
         respective  heirs,   representatives,   successors  and  assigns.  This
         Agreement may not be assigned by the Executive,  but may be assigned by
         the Company to any person or entity that  succeeds to the  ownership or
         operation of the business in which the Executive is primarily  employed
         by the Company.

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<PAGE>

                  e.  Waiver.  The waiver by either  party hereto of a breach of
         any  term or  provision  of this  Agreement  shall  not  operate  or be
         construed as a waiver of a subsequent  breach of the same  provision by
         any  party or of the  breach  of any other  term or  provision  of this
         Agreement.

                  f. Titles. Titles of the paragraphs herein are used solely for
         convenience and shall not be used for  interpretation or construing any
         work, clause, paragraph, or provision of this Agreement.

                  g. Counterparts. This Agreement may be executed in two or more
         counterparts,  each of which  shall be  deemed an  original,  but which
         together shall constitute one and the same instrument.

         IN WITNESS  WHEREOF,  the Company and the Executive  have executed this
Agreement as of the date and year first above written.

         THIS AGREEMENT CONTAINS AN ARBITRATION CLAUSE.


EXECUTIVE:                              APPLEBEE'S INTERNATIONAL, INC.



                                        By:
-------------------------                  -------------------------------------
Steven K. Lumpkin                          Lloyd L. Hill
                                           Chairman and Chief Executive Officer


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<PAGE>



                     Exhibit A - Duties and Responsibilities


1.       Position:  Executive Vice President and Chief Financial Officer.

2.       Reports to:  Lloyd L. Hill, Chairman and CEO.

3.       Duties:  (a) member of Applebee's senior management team; (b) acting in
         the role of Chief Financial Officer; (c) Senior Advisor to the CEO  and
         Chairman.

4.       Responsibilities:  (a) Corporate  Controllership and Internal Reporting
         for all entities; (b) Tax  Management; (c) Internal Audit Services; (d)
         Treasury Services;  (e) Financial  operations  and  analysis;  and  (f)
         Investor Relations and External Reporting.



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