APPLEBEE'S INTERNATIONAL, INC.
                           STOCK OWNERSHIP GUIDELINES
Overview

         This  document  describes  the  Applebee's  International,   Inc.  (the
"Company")  Stock  Ownership  Guidelines  (the  "Guidelines").  The  Company has
developed these Guidelines to help assure that our leaders are also shareholders
of the Company. Because we believe in this principle, executives who achieve and
maintain  the  standards  set  forth  in these  Guidelines  are  eligible  for a
restricted stock award.

Participants

         The Company  requires all  "executives"  to participate in this program
and to become  owners of Company  common  stock.  Executives  are defined as the
following:

         Vice Presidents
         Senior Vice Presidents
         Executive Vice Presidents
         Senior Team Members (as designated from time to time)
         Presidents
         Chief Executive Officer

Stock ownership requirements

         All executives have a specified period of time (the "Target Date") from
either the date they were hired (if they were in an eligible position as of such
date) or the date they were promoted to an eligible position,  to hold shares of
Company  common stock valued at the following  multiple of base salary as of the
Target Date:

<TABLE>
<CAPTION>

----------------------------------------------- ------------------------------------ ---------------------------------
                    Title                               2003 Ownership Goal                2004 Ownership Goal
----------------------------------------------- ------------------------------------ ---------------------------------
<S>                                                     <C>                                <C>
Chairman                                                  3 x base salary                    4 x base salary
----------------------------------------------- ------------------------------------ ---------------------------------
CEO                                                       3 x base salary                    4 x base salary
----------------------------------------------- ------------------------------------ ---------------------------------
President                                                 2 x base salary                   3.5 x base salary
----------------------------------------------- ------------------------------------ ---------------------------------
COO                                                       2 x base salary                   3.5 x base salary
----------------------------------------------- ------------------------------------ ---------------------------------
Senior Team Members                                       2 x base salary                   3.0 x base salary
----------------------------------------------- ------------------------------------ ---------------------------------
Senior Vice Presidents                                   1.5 x base salary                  1.5 x base salary
----------------------------------------------- ------------------------------------ ---------------------------------
Vice Presidents                                           1 x base salary                    1 x base salary
----------------------------------------------- ------------------------------------ ---------------------------------
</TABLE>


         All  executives  hired or promoted into an eligible  position  prior to
February,  2004 have a Target  Date of the fifth  anniversary  of their  hire or
promotion date to reach the 2003 guidelines. These executives have a Target Date
of February,  2009 to meet the new 2004 ownership requirement.  Executives hired
or promoted to an eligible level after February,  2004 have a Target Date of the
fifth  anniversary  of  their  hire or  promotion  to meet  the  2004  ownership
requirements.  If an  executive  is  promoted to a new level prior to the Target
Date, he or she is required to meet the original ownership requirement as of the
original  Target  Date.  A new  Target  Date  of the  fifth  anniversary  of the
promotion is also created to meet the new  ownership  requirement  applicable to
the promotion.  If an individual  holds more than one title, he or she must meet
the highest applicable ownership requirement.

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Value of stock owned

         The shares owned by the  executive  are valued at the higher of (1) the
number of shares  owned as of the Target Date  multiplied  by the average of the
closing price of the common stock on the last day of each  calendar  quarter for
the four calendar quarters preceding the Target Date,  excluding the most recent
quarter  prior to the Target Date,  or (2) the aggregate of the closing price of
the  common  stock on each day a share  was  purchased  in the  open  market  or
pursuant to the exercise of an option (or received  pursuant to a Company grant)
multiplied by the number of shares  purchased (or received) that day (for shares
purchased  pursuant to a Company  employee  stock  purchase plan, the price used
will be the closing  price on the first day of the offering  period in which the
shares were  purchased).  Each quarter after the date of hire or promotion,  the
executive will receive a statement  setting forth,  to the Company's  knowledge,
the  number of shares  owned and their  value at that  time,  using the  formula
above. The Company has the sole discretion to determine  whether the executive's
form of  ownership  of any common  stock is  sufficient  for  purposes  of these
Guidelines.  The executive may then use this  information  as a guide in meeting
the required ownership amount as of the Target Date.

Correction of ownership statement

         If the  ownership  statement is incorrect in any way, the  executive is
required  to notify  the  Company  within  thirty  (30) days of  receipt  of the
statement.  Failure to correct a statement  may, in the sole  discretion  of the
Company, result in loss of an award pursuant to these Guidelines.

Restricted  stock award for meeting the required  ownership  amount prior to the
Target Date

         If,  by the  January 1 or July 1 after  the  third  anniversary  of the
executive's hire or promotion date (the "Grant Date"),  the executive has met or
exceeded the stock  ownership  requirements,  he or she will receive an award in
the form of restricted  stock  granted under the Company's  Amended and Restated
1995  Equity  Incentive  Plan (the "1995  Plan"),  equal in value to 50% of base
salary as of the Grant Date,  up to a maximum of $125,000.  The number of shares
granted  will be valued  based on the closing  price of the common  stock on the
Grant Date.  These  shares will be subject to a two year period of  restriction.
The executive will not be able to sell or otherwise  transfer these shares until
two years after the grant date.  The end of this two-year  period is referred to
as the  "Vesting  Date." If, as of the  Vesting  Date,  the  executive  is still
employed by the Company and  continues  to hold the amount of stock  required by
these  Guidelines,  the  restrictions  will lapse. If the executive is no longer
employed  by the  Company or no longer  meets the  ownership  requirements,  the
shares will be  forfeited.  If the executive is promoted to a new level prior to
the Vesting  Date,  he or she is only  required to meet the  original  ownership
requirement as of the Vesting Date.

     For purposes of determining whether the ownership  requirement is satisfied
as of the Vesting  Date,  the shares held on the Vesting  Date will be valued in
the same manner described above. Therefore,  the value of the shares could go up


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<PAGE>

or down  (regardless  of whether the  executive  purchases  or sells stock) from
their value as of the Grant Date.  Accordingly,  the executive must monitor this
amount to ensure he or she  continues to meet the ownership  requirements  as of
the Vesting  Date.  The Company will continue to send  quarterly  reports of the
number of shares owned and their value.

Effect of failure to meet the guidelines as of the Target Date

         If the ownership  requirements  are not met as of the Target Date,  the
executive will not be eligible to receive any stock options, performance shares,
restricted  stock or other stock  grants  until such time as he or she meets the
ownership  requirements.  If the  executive  is  promoted  to a new  level,  the
executive  will have  until  the new  Target  Date to meet the new  requirement.
During such time  period,  the  executive  is eligible to receive  grants if the
original requirement has been met.

Effect of promotion to new level

         At any time an  executive  is  promoted  to a new  level  which  has an
increased  ownership  requirement,  the  executive is only  required to meet the
original ownership  requirements in order to receive the restricted stock award.
The award is only made once, after meeting the original  ownership  requirement,
regardless of whether the executive later meets the increased guidelines.

         If between the date the  executive  is granted  restricted  stock after
achieving  the  ownership  requirement  and the Vesting Date of such grant,  the
executive is promoted to a position which has a greater  ownership  requirement,
the executive is only required to meet the original ownership  requirement as of
the Vesting Date for the restrictions to lapse.

         Executives  who are  promoted  to a new level will have a until the new
Target Date to meet the new  requirements in order to remain eligible to receive
equity  grants.  The original  requirement  must still be met as of the original
Target Date.

Impact of termination

         If, after the executive has received a restricted stock award but prior
to the Vesting Date, the executive is terminated  without cause,  the restricted
stock  will  vest  and  the  executive   will  receive  those  shares,   without
restriction.  If during such time period the executive is terminated  with cause
or the executive terminates his or her employment, the restricted stock award is
rescinded and returned to the Company.  Cause will be defined in the  restricted
stock award agreement.

         If after  receipt of a restricted  stock award but prior to the Vesting
Date, employment with the Company is terminated due to death or disability,  the
restricted  stock  award  will  immediately  vest and the  restrictions  will be
lifted.

         The impact of retirement is subject to the  provisions of the Executive
Retirement Plan.

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<PAGE>

Changes by Board of Directors

         The Board of Directors has the discretion to change these Guidelines at
any  time  or to  change  the  application  of the  Guidelines  to a  particular
executive.




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