Document:

APPLEBEE'S INTERNATIONAL, INC.

                           1995 EQUITY INCENTIVE PLAN

                                    SECTION 1

                              PURPOSE AND DURATION

     1.1  Effective  Date.  This Plan  permits the grant of  Nonqualified  Stock
Options,  Incentive Stock Options, SARs, Restricted Stock, Performance Units and
Performance  Shares.  This Plan shall become effective upon the affirmative vote
of the  holders of a majority  of the Shares  which are  present in person or by
proxy and entitled to vote at the 1995 Annual Meeting of Stockholders.

     1.2 Purpose of this Plan. This Plan is intended to attract,  motivate,  and
retain (a)  employees of the Company and its  Affiliates,  (b)  consultants  who
provide  significant  services  to the  Company  and  its  Affiliates,  and  (c)
directors  of the  Company  who are  employees  of neither  the  Company nor any
Affiliate.  This Plan also is  designed  to further  the  growth  and  financial
success of the  Company and its  Affiliates  by aligning  the  interests  of the
Participants, through the ownership of Shares and through other incentives, with
the interests of the Company's stockholders.

                                    SECTION 2

                                   DEFINITIONS

     The following words and phrases shall have the following  meanings unless a
different meaning is plainly required by the context:

     "1934 Act" means the Securities Exchange Act of 1934, as amended. Reference
to a specific  section of the 1934 Act or  regulation  thereunder  shall include
such section or regulation, any valid regulation promulgated under such section,
and any comparable  provision of any future legislation or regulation  amending,
supplementing or superseding such section or regulation.

     "Affiliate" means any corporation or any other entity  (including,  but not
limited to, partnerships and joint ventures) controlling, controlled by or under
common control with the Company.

     "Affiliated  SAR" means an SAR that is granted in connection with a related
Option,  and that  automatically will be deemed to be exercised at the same time
that the related Option is exercised.

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     "Award" means,  individually  or  collectively,  a grant under this Plan of
Nonqualified  Stock Options,  Incentive Stock Options,  SARs,  Restricted Stock,
Performance Units or Performance Shares.

     "Award  Agreement" means the written  agreement setting forth the terms and
provisions applicable to each Award granted under this Plan.

     "Board"  or  "Board of  Directors"  means  the  Board of  Directors  of the
Company.

     "Change in Control" shall have the meaning assigned to such term in Section
13.2.

     "Code" means the Internal Revenue Code of 1986, as amended.  Reference to a
specific section of the Code or regulation thereunder shall include such section
or regulation,  any valid  regulation  promulgated  under such section,  and any
comparable   provision  of  any  future  legislation  or  regulation   amending,
supplementing or superseding such section or regulation.

     "Committee" means the committee appointed by the Board (pursuant to Section
3.1) to administer this Plan.

     "Company" means Applebee's International, Inc., a Delaware corporation, and
any successor thereto. With respect to the definitions of the Performance Goals,
the  Committee  in its  sole  discretion  may  determine  that  "Company"  means
Applebee's International and its consolidated subsidiaries.

     "Consultant" means any consultant,  independent  contractor or other person
who provides significant  services to the Company or its Affiliates,  but who is
neither an Employee nor a Director.

     "Director"  means any  individual who is a member of the Board of Directors
of the Company.

     "Disability"  means a permanent and total disability  within the meaning of
Code section 22(e)(3),  provided that in the case of Awards other than Incentive
Stock  Options,  the Committee in its sole  discretion  may determine  whether a
permanent  and  total   disability   exists  in  accordance   with  uniform  and
non-discriminatory standards adopted by the Committee from time to time.

     "Earnings Per Share" means as to any Fiscal Year,  the Company's Net Income
or a business unit's Pro Forma Net Income,  divided by a weighted average number
of Shares outstanding and dilutive equivalent Shares deemed outstanding.

     "Employee"  means any employee of the Company or of an  Affiliate,  whether
such  employee  is so  employed  at the time this Plan is  adopted or becomes so
employed subsequent to the adoption of this Plan.

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     "ERISA"  means the Employee  Retirement  Income  Security  Act of 1974,  as
amended. Reference to a specific section of ERISA or regulation thereunder shall
include such section or regulation,  any valid regulation promulgated under such
section,  and any comparable  provision of any future  legislation or regulation
amending, supplementing or superseding such section or regulation.

     "Exercise  Price"  means the price at which a Share may be  purchased  by a
Participant pursuant to the exercise of an Option.

     "Fair Market  Value" means the last quoted per share selling price at which
Shares  are traded on any given  date,  or if no Shares are traded on such date,
the most recent prior date on which Shares were traded,  as reported in The Wall
Street  Journal.  Notwithstanding  the preceding,  for federal,  state and local
income tax  reporting  purposes,  fair market value shall be  determined  by the
Committee  (or its delegate) in  accordance  with uniform and  nondiscriminatory
standards adopted by it from time to time.

     "Fiscal Year" means the fiscal year of the Company.

     "Freestanding SAR" means a SAR that is granted independently of any Option.

     "Grant Date" means,  with respect to an Award,  the date that the Award was
granted.

     "Incentive  Stock  Option"  means an Option  to  purchase  Shares  which is
designated as an Incentive Stock Option and is intended to meet the requirements
of section 422 of the Code.

     "Individual  MBOs" means as to a Participant,  the objective and measurable
goals set by a "management by objectives"  process and approved by the Committee
(in its sole discretion).

     "Net  Income"  means as to any Fiscal  Year,  the income after taxes of the
Company for the Fiscal Year  determined in accordance  with  generally  accepted
accounting  principles;  provided,  however,  that prior to the Fiscal Year, the
Committee shall determine  whether any significant  item(s) shall be included or
excluded  from  the  calculation  of Net  Income  with  respect  to one or  more
Participants.

     "Nonemployee  Director"  means a  Director  who is not an  employee  of the
Company or of any Affiliate.

     "Nonqualified Stock Option" means an Option to purchase Shares which is not
an Incentive Stock Option.

     "Option" means an Incentive Stock Option or a Nonqualified Stock Option.

     "Participant" means an Employee, Consultant or Nonemployee Director who has
an outstanding Award.

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     "Performance  Goals" means the goal(s) (or combined goal(s))  determined by
the Committee (in its sole  discretion)  to be applicable to a Participant  with
respect to an Award.  As  determined by the  Committee,  the  Performance  Goals
applicable to an Award may provide for a targeted level or levels of achievement
using  one or more of the  following  measures:  (a)  Earnings  Per  Share,  (b)
Individual  MBOs,  (c) Net  Income,  (d) Pro Forma  Net  Income,  (e)  Return on
Designated  Assets,  (f) Return on  Revenues,  and (g)  Satisfaction  MBOs.  The
Performance  Goals may differ from  Participant to Participant and from Award to
Award.

     "Performance  Period"  shall  have the  meaning  assigned  to such  term in
Section 8.3.

     "Performance  Share" means an Award  granted to a  Participant  pursuant to
Section 8.

     "Performance  Unit"  means an Award  granted to a  Participant  pursuant to
Section 8.

     "Period of  Restriction"  means the period  during  which the  transfer  of
Shares of  Restricted  Stock are subject to  restrictions  and,  therefore,  the
Shares are subject to a substantial  risk of forfeiture.  As provided in Section
7, such  restrictions  may be based on the passage of time,  the  achievement of
target levels of  performance or the occurrence of other events as determined by
the Committee in its sole discretion.

     "Plan" means the Applebee's International, Inc. 1995 Equity Incentive Plan,
as set forth in this instrument and as hereafter amended from time to time.

     "Pro Forma Net Income"  means as to any business  unit for any Fiscal Year,
the portion of Company's Net Income  allocable to such business unit;  provided,
however, that prior to such Fiscal Year, the Committee shall determine the basis
on which such allocation shall be made.

     "Restricted  Stock"  means an Award  granted to a  Participant  pursuant to
Section 7.

     "Retirement" means, in the case of an Employee, a Termination of Service by
reason of the  Employee's  retirement  at or after  age  sixty-five  (65).  With
respect to a  Consultant,  no  Termination  of Service  shall be deemed to be on
account of "Retirement".  With respect to a Nonemployee  Director,  "Retirement"
means termination of service on the Board at or after age seventy (70).

     "Return on  Designated  Assets"  means as to any Fiscal  Year,  (a) the Pro
Forma Net Income of a business  unit,  divided by the average of  beginning  and
ending  business unit designated  assets,  or (b) the Net Income of the Company,
divided by the average of beginning and ending designated corporate assets.

     "Return on Revenues"  means as to any Fiscal Year, the percentage  equal to
the Company's Net Income or the business unit's Pro Forma Net Income, divided by
the Company's or the business unit's Annual Revenue.

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     "Rule  16b-3"  means Rule  16b-3  promulgated  under the 1934 Act,  and any
future regulation amending, supplementing or superseding such regulation.

     "Satisfaction  MBOs"  means  as  to  any  Participant,  the  objective  and
measurable  individual  goals set by a "management  by  objectives"  process and
approved by the Committee, which goals relate to the satisfaction of external or
internal requirements.

     "Section 16 Person"  means a person  who,  with  respect to the Shares,  is
subject to section 16 of the 1934 Act.

     "Shares" means the shares of common stock of the Company.

     "Stock  Appreciation  Right" or "SAR" means an Award,  granted  alone or in
connection  with a related  Option,  that is  designated  as a SAR  pursuant  to
Section 7.

     "Subsidiary"  means any  corporation in an unbroken  chain of  corporations
beginning  with the  Company  if each of the  corporations  other  than the last
corporation in the unbroken chain then owns stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

     "Tandem  SAR"  means an SAR that is granted  in  connection  with a related
Option,  the exercise of which shall require forfeiture of the right to purchase
an equal  number  of  Shares  under  the  related  Option  (and  when a Share is
purchased under the Option, the SAR shall be canceled to the same extent).

     "Termination of Service" means (a) in the case of an Employee,  a cessation
of the employee-employer  relationship between an employee and the Company or an
Affiliate  for any  reason,  including,  but not  limited  to,  a  cessation  by
resignation,  discharge, death, Disability,  Retirement or the disaffiliation of
an Affiliate,  but excluding any such  cessation  where there is a  simultaneous
reemployment  by  the  Company  or an  Affiliate,  and  (b)  in  the  case  of a
Consultant, a cessation of the service relationship between a Consultant and the
Company  or an  Affiliate  for any  reason,  including,  but not  limited  to, a
cessation by resignation,  discharge, death, Disability or the disaffiliation of
an Affiliate,  but excluding any such  cessation  where there is a  simultaneous
reengagement of the Consultant by the Company or an Affiliate.

                                    SECTION 3

                                 ADMINISTRATION

     3.1 The Committee.  This Plan shall be administered  by the Committee.  The
Committee  shall consist of not less than two (2) Directors.  The members of the
Committee  shall be  appointed  from  time to time by,  and  shall  serve at the
pleasure of, the Board of Directors.  The Committee shall be comprised solely of
Directors who both are (a)  "non-employee  directors"  under Rule 16b-3, and (b)
"outside directors" under section 162(m) of the Code.

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     3.2  Authority of the  Committee.  It shall be the duty of the Committee to
administer this Plan in accordance with its provisions. The Committee shall have
all powers and discretion  necessary or appropriate to administer  this Plan and
to  control  its  operation,  including,  but not  limited  to, the power to (a)
determine which Employees and Consultants shall be granted Awards, (b) prescribe
the terms and  conditions  of the  Awards  (other  than the  Options  granted to
Directors  pursuant to Section 9), (c) interpret  this Plan and the Awards,  (d)
adopt rules for the administration,  interpretation and application of this Plan
as are consistent therewith, and (e) interpret, amend or revoke any such rules.

     3.3 Delegation by the Committee.  The Committee, in its sole discretion and
on such terms and conditions as it may provide,  may delegate all or any part of
its authority and powers under this Plan to one or more directors or officers of
the  Company;  provided,  however,  that  the  Committee  may not  delegate  its
authority  and powers (a) with respect to Section 16 Persons,  or (b) in any way
which would  jeopardize  this Plan's  qualification  under section 162(m) of the
Code or Rule 16b-3.

     3.4 Nonemployee Director Options. Notwithstanding any contrary provision of
this  Section 3, the Board  shall  administer  Section 9 of this  Plan,  and the
Committee shall exercise no discretion with respect to Section 9. In the Board's
administration  of Section 9 and the Options  granted to Nonemployee  Directors,
the Board  shall have all  authority  and  discretion  otherwise  granted to the
Committee with respect to the administration of this Plan.

     3.5  Decisions  Binding.  All  determinations  and  decisions  made  by the
Committee,  the Board and any delegate of the Committee  pursuant to Section 3.3
shall be final,  conclusive,  and binding on all persons, and shall be given the
maximum deference permitted by law.

                                    SECTION 4

                           SHARES SUBJECT TO THIS PLAN

     4.1 Number of Shares. Subject to adjustment as provided in Section 4.3, the
total  number of Shares  available  for grant  under  this Plan shall not exceed
2,000,000.  Shares granted under this Plan may be either authorized but unissued
Shares or treasury Shares, or any combination thereof.

     4.2  Lapsed  Awards.  If an Award is  settled  in  cash,  or is  cancelled,
terminates,  expires  or  lapses  for any  reason  (with  the  exception  of the
termination  of a  Tandem  SAR  upon  exercise  of the  related  Option,  or the
termination of a related Option upon exercise of the corresponding  Tandem SAR),
any Shares subject to such Award thereafter shall be available to be the subject
of an Award.

     4.3  Adjustments  in  Awards  and  Authorized  Shares.  In the event of any
merger,    reorganization,    consolidation,    recapitalization,    separation,
liquidation,  stock dividend, stock split, Share combination, or other change in
the corporate structure of the Company affecting the Shares, the Committee shall

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adjust the number and class of Shares  which may be  delivered  under this Plan,
the number,  class and price of Shares  subject to outstanding  Awards,  and the
numerical  limits of Sections  4.1, 5.1, 6.1, 7.1 and 8.1, in such manner as the
Committee  (in  its  sole  discretion)   shall  determine  to  be  advisable  or
appropriate to prevent the dilution or diminution of such Awards. In the case of
Options  granted to Nonemployee  Directors  pursuant to Section 9, the foregoing
adjustments  shall be made by the Board with respect to Options granted and that
may  be  granted   thereafter   from  time  to  time   pursuant  to  Section  9.
Notwithstanding the preceding,  the number of Shares subject to any Award always
shall be a whole number.

                                    SECTION 5

                                  STOCK OPTIONS

     5.1 Grant of  Options.  Subject to the terms and  provisions  of this Plan,
Options may be granted to Employees and Consultants at any time and from time to
time as determined by the Committee in its sole  discretion.  The Committee,  in
its sole  discretion,  shall  determine  the  number of Shares  subject  to each
Option; provided,  however, that during any Fiscal Year, no Participant shall be
granted  Options  covering  more than 100,000  Shares.  The  Committee may grant
Incentive Stock Options, Nonqualified Stock Options, or any combination thereof.

     5.2 Award  Agreement.  Each Option shall be evidenced by an Award Agreement
that shall specify the Exercise Price,  the expiration  date of the Option,  the
number of Shares to which the Option pertains, any conditions to exercise of the
Option  and such  other  terms  and  conditions  as the  Committee,  in its sole
discretion,  shall determine. The Award Agreement also shall specify whether the
Option is intended  to be an  Incentive  Stock  Option or a  Nonqualified  Stock
Option.

     5.3  Exercise  Price.  Subject to the  provisions  of this Section 5.3, the
Exercise  Price for each Option shall be determined by the Committee in its sole
discretion.

          5.3.1 Nonqualified Stock Options.  In the case of a Nonqualified Stock
     Option,  the  Exercise  Price  shall be not less than one  hundred  percent
     (100%) of the Fair Market Value of a Share on the Grant Date.

          5.3.2  Incentive  Stock  Options.  In the case of an  Incentive  Stock
     Option,  the  Exercise  Price  shall be not less than one  hundred  percent
     (100%) of the Fair  Market  Value of a Share on the Grant  Date;  provided,
     however,  that if on the Grant Date,  the Employee  (together  with persons
     whose stock  ownership is  attributed  to the Employee  pursuant to section
     424(d)  of the  Code)  owns  stock  possessing  more  than 10% of the total
     combined  voting power of all classes of stock of the Company or any of its
     Subsidiaries,  the  Exercise  Price  shall be not less than one hundred ten
     percent (110%) of the Fair Market Value of a Share on the Grant Date.

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          5.3.3 Substitute  Options.  Notwithstanding the provisions of Sections
     5.3.1 and 5.3.2, in the event that the Company or an Affiliate  consummates
     a  transaction   described  in  section  424(a)  of  the  Code  (e.g.,  the
     acquisition  of property or stock from an unrelated  corporation),  persons
     who become  Employees or Consultants on account of such  transaction may be
     granted Options in substitution for options granted by such former employer
     or recipient  of  services.  If such  substitute  Options are granted,  the
     Committee, in its sole discretion and consistent with section 424(a) of the
     Code,  may determine  that such  substitute  Options shall have an exercise
     price less than one hundred  (100%) of the Fair Market  Value of the Shares
     on the Grant Date.

          5.4 Expiration of Options.

          5.4.1 Expiration  Dates.  Each Option shall terminate upon the earlier
     of the first to occur of the following events:

               (a) The date for termination of the Option set forth in the Award
          Agreement; or

               (b) The expiration of ten (10) years from the Grant Date; or

               (c)  The  expiration  of  one  (1)  year  from  the  date  of the
          Optionee's  Termination  of  Service  for  a  reason  other  than  the
          Optionee's  death,  Disability  or  Retirement  (except as provided in
          Section 5.8.2 regarding Incentive Stock Options); or

               (d) The  expiration  of  three  (3)  years  from  the date of the
          Optionee's  Termination of Service by reason of Disability  (except as
          provided in Section 5.8.2 regarding Incentive Stock Options) or death;
          or

               (e) The  expiration  of  three  (3)  years  from  the date of the
          Optionee's  Retirement  (except as provided in Section 5.8.2 regarding
          Incentive Stock Options).

          5.4.2  Committee  Discretion.  Subject to the limits of Section 5.4.1,
     the  Committee,  in its sole  discretion,  (a) shall  provide in each Award
     Agreement when each Option expires and becomes unexercisable,  and (b) may,
     after an Option is granted,  extend the maximum term of the Option (subject
     to Section 5.8.4 regarding Incentive Stock Options).

     5.5  Exercisability  of Options.  Options  granted under this Plan shall be
exercisable at such times and be subject to such  restrictions and conditions as
the  Committee  shall  determine  in its sole  discretion.  After an  Option  is
granted,   the   Committee,   in  its  sole   discretion,   may  accelerate  the
exercisability of the Option.

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     5.6 Payment.  Options shall be exercised by the Participant's delivery of a
written  notice of exercise to the  Secretary of the Company (or its  designee),
setting  forth the  number of Shares  with  respect to which the Option is to be
exercised, accompanied by full payment for the Shares.

     Upon the exercise of any Option, the Exercise Price shall be payable to the
Company  in  full  in  cash  or its  equivalent.  The  Committee,  in  its  sole
discretion, also may permit exercise (a) by tendering previously acquired Shares
having an aggregate Fair Market Value at the time of exercise equal to the total
Exercise  Price,  or (b) by any other  means  which the  Committee,  in its sole
discretion,  determines (i) to provide legal  consideration for the Shares,  and
(ii) to be consistent with the purposes of this Plan.

     As soon as practicable after receipt of a written  notification of exercise
and full  payment for the Shares  purchased,  the Company  shall  deliver to the
Participant (or the Participant's  designated broker), Share certificates (which
may be in book entry form) representing such Shares.

     5.7  Restrictions on Share  Transferability.  The Committee may impose such
restrictions on any Shares acquired  pursuant to the exercise of an Option as it
may deem  advisable or appropriate in its sole  discretion,  including,  but not
limited to,  restrictions  related to applicable  Federal  securities  laws, the
requirements of any national securities exchange or system upon which Shares are
then listed or traded, and any blue sky or state securities laws.

     5.8 Certain Additional Provisions for Incentive Stock Options.

          5.8.1  Exercisability.  The aggregate Fair Market Value (determined on
     the Grant  Date(s)) of the Shares  with  respect to which  Incentive  Stock
     Options  are  exercisable  for the first  time by any  Employee  during any
     calendar year (under all plans of the Company and its  Subsidiaries)  shall
     not exceed $100,000.

          5.8.2  Termination  of  Service.  No  Incentive  Stock  Option  may be
     exercised more than three (3) months after the Participant's Termination of
     Service  for any reason  other  than  Disability  or death,  unless (a) the
     Participant  dies  during  such  three-month  period,  and  (b)  the  Award
     Agreement or the  Committee  permits  later  exercise.  No Incentive  Stock
     Option  may be  exercised  more than one (1) year  after the  Participant's
     termination  of  employment  on  account  of  Disability,  unless  (a)  the
     Participant dies during such one-year  period,  and (b) the Award Agreement
     or the Committee permits later exercise.

          5.8.3 Company and  Subsidiaries  Only.  Incentive Stock Options may be
     granted only to persons who are employees of the Company or a Subsidiary on
     the Grant Date.

          5.8.4 Expiration. No Incentive Stock Option may be exercised after the
     expiration of ten (10) years from the Grant Date; provided,  however,  that
     if the Option is granted to an Employee who, together with persons whose

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     stock ownership is attributed to the Employee pursuant to section 424(d) of
     the Code, owns stock  possessing more than 10% of the total combined voting
     power of all  classes of stock of the  Company or any of its  Subsidiaries,
     the Option may not be exercised after the expiration of five (5) years from
     the Grant Date.

                                    SECTION 6

                            STOCK APPRECIATION RIGHTS

     6.1 Grant of SARs. Subject to the terms and conditions of this Plan, an SAR
may be granted to Employees and Consultants at any time and from time to time as
shall be determined by the Committee, in its sole discretion.  The Committee may
grant  Affiliated  SARs,  Freestanding  SARs,  Tandem SARs,  or any  combination
thereof.

          6.1.1 Number of Shares.  The Committee shall have complete  discretion
     to determine the number of SARs granted to any  Participant,  provided that
     during any Fiscal Year, no Participant  shall be granted SARs covering more
     than 100,000 Shares.

          6.1.2  Exercise Price and Other Terms.  The Committee,  subject to the
     provisions of this Plan,  shall have  complete  discretion to determine the
     terms and  conditions of SARs granted under this Plan;  provided,  however,
     that the exercise  price of a  Freestanding  SAR shall be not less than one
     hundred  percent  (100%) of the Fair  Market  Value of a Share on the Grant
     Date.  The  exercise  price of Tandem or  Affiliated  SARs shall  equal the
     Exercise Price of the related Option.

     6.2 Exercise of Tandem SARs.  Tandem SARs may be exercised  for all or part
of the Shares  subject to the related  Option upon the surrender of the right to
exercise  the  equivalent  portion of the  related  Option.  A Tandem SAR may be
exercised  only with respect to the Shares for which its related  Option is then
exercisable.  With  respect  to a  Tandem  SAR  granted  in  connection  with an
Incentive  Stock  Option:  (a) the  Tandem  SAR shall  expire no later  than the
expiration of the underlying Incentive Stock Option; (b) the value of the payout
with  respect to the Tandem  SAR shall be for no more than one  hundred  percent
(100%) of the difference between the Exercise Price of the underlying  Incentive
Stock Option and the Fair Market Value of the Shares  subject to the  underlying
Incentive  Stock  Option at the time the  Tandem SAR is  exercised;  and (c) the
Tandem SAR shall be  exercisable  only when the Fair Market  Value of the Shares
subject  to the  Incentive  Stock  Option  exceeds  the  Exercise  Price  of the
Incentive Stock Option.

     6.3 Exercise of Affiliated  SARs.  An Affiliated  SAR shall be deemed to be
exercised  upon the exercise of the related  Option.  The deemed  exercise of an
Affiliated SAR shall not necessitate a reduction in the number of Shares subject
to the related Option.

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<PAGE>

     6.4 Exercise of Freestanding  SARs.  Freestanding SARs shall be exercisable
on such terms and conditions as the  Committee,  in its sole  discretion,  shall
determine.

     6.5 SAR Agreement.  Each SAR grant shall be evidenced by an Award Agreement
that shall specify the exercise  price,  the term of the SAR, the  conditions of
exercise,  and such other terms and  conditions  as the  Committee,  in its sole
discretion, shall determine.

     6.6  Expiration  of SARs.  An SAR granted under this Plan shall expire upon
the date determined by the Committee,  in its sole  discretion,  as set forth in
the Award Agreement.  Notwithstanding the foregoing, the terms and provisions of
Section 5.4 also shall apply to SARs.

     6.7 Payment of SAR Amount.  Upon exercise of an SAR, a Participant shall be
entitled  to  receive  payment  from the  Company  in an  amount  determined  by
multiplying:

          (a) The positive  difference  between the Fair Market Value of a Share
     on the date of exercise over the exercise price; by

          (b) The number of Shares with respect to which the SAR is exercised.

     At the sole discretion of the Committee,  the payment upon SAR exercise may
be in cash, in Shares of equivalent value, or in any combination thereof.

                                    SECTION 7

                                RESTRICTED STOCK

     7.1 Grant of Restricted Stock.  Subject to the terms and provisions of this
Plan,  the  Committee,  at any time and from time to time,  may grant  Shares of
Restricted  Stock to Employees and Consultants in such amounts as the Committee,
in its sole discretion,  shall determine. The Committee, in its sole discretion,
shall  determine  the  number  of  Shares  to be  granted  to each  Participant;
provided,  however,  that during any Fiscal Year, no  Participant  shall receive
more than 100,000 Shares of Restricted Stock.

     7.2 Restricted  Stock  Agreement.  Each Award of Restricted  Stock shall be
evidenced by an Award  Agreement  that shall specify the Period of  Restriction,
the  number of Shares  granted,  and such  other  terms  and  conditions  as the
Committee, in its sole discretion, shall determine. Unless the Committee, in its
sole discretion,  determines otherwise, Shares of Restricted Stock shall be held
by the  Company  as  escrow  agent  until  the end of the  applicable  Period of
Restriction.

                                       11
<PAGE>

     7.3  Transferability.  Except as  provided  in this  Section  7,  Shares of
Restricted  Stock may not be sold,  transferred,  gifted,  bequeathed,  pledged,
assigned, or otherwise alienated or hypothecated,  voluntarily or involuntarily,
until the end of the applicable Period of Restriction.

     7.4 Other Restrictions.  The Committee, in its sole discretion,  may impose
such other  restrictions on Shares of Restricted  Stock as it may deem advisable
or appropriate in accordance with this Section 7.4.

          7.4.1 General  Restrictions.  The Committee may set restrictions based
     upon (a) the achievement of specific performance objectives  (Company-wide,
     divisional or individual), (b) applicable Federal or state securities laws,
     or (c) any other basis determined by the Committee in its sole discretion.

          7.4.2  Section  162(m)  Performance  Restrictions.   For  purposes  of
     qualifying grants of Restricted Stock as  "performance-based  compensation"
     under section 162(m) of the Code, the  Committee,  in its sole  discretion,
     may set restrictions  based upon the achievement of Performance  Goals. The
     Performance  Goals  shall be set by the  Committee  on or before the latest
     date   permissible   to  enable   the   Restricted   Stock  to  qualify  as
     "performance-based  compensation"  under  section  162(m) of the  Code.  In
     granting  Restricted  Stock that is intended to qualify  under Code section
     162(m),  the Committee shall follow any procedures  determined by it in its
     sole discretion from time to time to be necessary, advisable or appropriate
     to ensure  qualification  of the Restricted Stock under Code section 162(m)
     (e.g., in determining the Performance Goals).

          7.4.3 Legend on Certificates.  The Committee,  in its sole discretion,
     may  legend  the  certificates   representing   Restricted  Stock  to  give
     appropriate  notice of such  restrictions.  For example,  the Committee may
     determine that some or all certificates  representing  Shares of Restricted
     Stock shall bear the following legend:

               "THE SALE OR OTHER TRANSFER OF THE SHARES OF STOCK REPRESENTED BY
               THIS CERTIFICATE, WHETHER VOLUNTARY, INVOLUNTARY, OR BY OPERATION
               OF LAW,  IS SUBJECT TO CERTAIN  RESTRICTIONS  ON  TRANSFER AS SET
               FORTH IN THE APPLEBEE'S INTERNATIONAL, INC. 1995 EQUITY INCENTIVE
               PLAN, AND IN A RESTRICTED  STOCK  AGREEMENT.  A COPY OF THIS PLAN
               AND SUCH  RESTRICTED  STOCK  AGREEMENT  MAY BE OBTAINED  FROM THE
               SECRETARY OF APPLEBEE'S INTERNATIONAL, INC."

     7.5 Removal of Restrictions.  Except as otherwise  provided in this Section
7, Shares of Restricted  Stock covered by each Restricted Stock grant made under
this Plan shall be released from escrow as soon as practicable after the end of

                                       12
<PAGE>
the applicable Period of Restriction. The Committee, in its sole discretion, may
accelerate  the time at which  any  restrictions  shall  lapse  and  remove  any
restrictions;  provided,  however,  that the  Period  of  Restriction  on Shares
granted to a Section 16 Person may not lapse until at least six (6) months after
the Grant Date (or such shorter period as may be permissible  while  maintaining
compliance  with  Rule  16b-3).  After  the  end of  the  applicable  Period  of
Restriction,  the  Participant  shall be  entitled to have any legend or legends
under Section 7.4.3  removed from his or her Share  certificate,  and the Shares
shall be freely transferable by the Participant.

     7.6 Voting Rights.  During the Period of Restriction,  Participants holding
Shares of  Restricted  Stock  granted  hereunder may exercise full voting rights
with respect to those Shares,  unless the applicable  Award  Agreement  provides
otherwise.

     7.7 Dividends and Other  Distributions.  During the Period of  Restriction,
Participants holding Shares of Restricted Stock shall be entitled to receive all
dividends  and other  distributions  paid with  respect  to such  Shares  unless
otherwise  provided in the applicable Award Agreement.  If any such dividends or
distributions  are paid in  Shares,  the  Shares  shall be  subject  to the same
restrictions on  transferability  and forfeitability as the Shares of Restricted
Stock with respect to which they were paid.

     7.8 Return of  Restricted  Stock to  Company.  On the date set forth in the
applicable Award Agreement, the Restricted Stock for which restrictions have not
lapsed shall revert to the Company and  thereafter  shall be available for grant
under this Plan.

                                    SECTION 8

                    PERFORMANCE UNITS AND PERFORMANCE SHARES

     8.1 Grant of Performance  Units/Shares.  Performance  Units and Performance
Shares may be granted to Employees and  Consultants at any time and from time to
time, as shall be  determined  by the  Committee,  in its sole  discretion.  The
Committee   shall  have  complete   discretion  in  determining  the  number  of
Performance Units and Performance Shares granted to each Participant;  provided,
however,  that  during  any  Fiscal  Year,  (a)  no  Participant  shall  receive
Performance  Units having an initial  value  greater than  $250,000,  and (b) no
Participant shall receive more than 100,000 Performance Shares.

     8.2 Value of Performance Units/Shares.  Each Performance Unit shall have an
initial value that is  established by the Committee on or before the Grant Date.
Each  Performance  Share  shall have an initial  value  equal to the Fair Market
Value of a Share on the Grant Date.

                                       13
<PAGE>

     8.3  Performance  Objectives  and  Other  Terms.  The  Committee  shall set
performance  objectives in its sole discretion which, depending on the extent to
which they are met, will determine the number or value of  Performance  Units or
Performance Shares, or both, that will be paid out to the Participants. The time
period during which the  performance  objectives must be met shall be called the
"Performance  Period".  Performance  Periods  of Awards  granted  to  Section 16
Persons  shall,  in all cases,  exceed six (6) months in length (or such shorter
period as may be permissible while maintaining compliance with Rule 16b-3). Each
Award of Performance Units or Performance  Shares shall be evidenced by an Award
Agreement that shall specify the  Performance  Period,  and such other terms and
conditions as the Committee, in its sole discretion, shall determine.

          8.3.1   General   Performance   Objectives.   The  Committee  may  set
     performance  objectives  based upon (a) the  achievement  of  Company-wide,
     divisional or individual goals, (b) applicable  Federal or state securities
     laws, or (c) any other basis determined by the Committee in its discretion.

          8.3.2  Section  162(m)   Performance   Objectives.   For  purposes  of
     qualifying   grants  of  Performance   Units  or   Performance   Shares  as
     "performance-based  compensation"  under  section  162(m) of the Code,  the
     Committee,  in its sole  discretion,  may  determine  that the  performance
     objectives  applicable to Performance  Units or Performance  Shares, as the
     case may be, shall be based on the  achievement of Performance  Goals.  The
     Performance  Goals  shall be set by the  Committee  on or before the latest
     date permissible to enable the Performance Units or Performance  Shares, as
     the case may be,  to  qualify  as  "performance-based  compensation"  under
     section  162(m) of the Code. In granting  Performance  Units or Performance
     Shares  which are  intended  to qualify  under  Code  section  162(m),  the
     Committee shall follow any procedures determined by it from time to time to
     be necessary or appropriate in its sole discretion to ensure  qualification
     of the Performance  Units or Performance  Shares, as the case may be, under
     Code section 162(m) (e.g., in determining the Performance Goals).

     8.4 Earning of Performance  Units/Shares.  After the applicable Performance
Period has ended, the holder of Performance Units or Performance Shares shall be
entitled to receive a payout of the number of  Performance  Units or Performance
Shares,  as the case may be,  earned  by the  Participant  over the  Performance
Period,  to be determined as a function of the extent to which the corresponding
performance objectives have been achieved. After the grant of a Performance Unit
or Performance Share, the Committee, in its sole discretion, may reduce or waive
any  performance  objectives for such  Performance  Unit or  Performance  Share;
provided,  however,  that  Performance  Periods of Awards  granted to Section 16
Persons shall not be less than six (6) months (or such shorter  period as may be
permissible while maintaining compliance with Rule 16b-3).

     8.5 Form and  Timing of  Payment of  Performance  Units/Shares.  Payment of
earned  Performance  Units  or  Performance  Shares  shall  be  made  as soon as
practicable after the end of the applicable  Performance  Period. The Committee,

                                       14
<PAGE>
in its sole discretion,  may pay earned  Performance Units or Performance Shares
in the form of cash, in Shares (which have an aggregate  Fair Market Value equal
to the value of the earned Performance Units or Performance  Shares, as the case
may be, at the end of the applicable  Performance Period), or in any combination
thereof.

     8.6  Cancellation of Performance  Units/Shares.  On the earlier of date set
forth in the Award Agreement or the Participant's  Termination of Service (other
than by death,  Disability  or, with  respect to an Employee,  Retirement),  all
unearned or unvested  Performance Units or Performance Shares shall be forfeited
to the Company,  and thereafter shall be available for grant under this Plan. In
the event of a Participant's death,  Disability or, with respect to an Employee,
Retirement, prior to the end of a Performance Period, the Committee shall reduce
his or her Performance Units or Performance Shares  proportionately based on the
date of such Termination of Service.

                                    SECTION 9

                                DIRECTOR OPTIONS

         The provisions of this Section 9 are applicable only to Options granted
to Nonemployee Directors.  The provisions of Section 5 are applicable to Options
granted to  Employees  and  Consultants  (and to the extent  provided in Section
9.2.6, to Director Options).

         9.1      Granting of Options.

                  9.1.1 Nonemployee  Director Grants. Each Nonemployee  Director
         shall  receive an annual  grant of Director  Options to purchase  5,000
         shares of Stock. Such amount shall automatically  increase (i) by 2,000
         shares in the event that Net Income  for the  Fiscal  Year  immediately
         preceding  the  year in which  the  Director  Option  is  granted  (the
         "Measurement  Year")  exceeded  by at least 20% the Net  Income for the
         Fiscal Year immediately preceding the Measurement Year, and (ii) by 100
         shares for each  additional  increment of 1% above 20% by which the Net
         Income for the Measurement  Year exceeded the Net Income for the Fiscal
         Year immediately  preceding the Measurement Year. In no event shall the
         number of Director  Options  granted in any Fiscal  Year  exceed  9,000
         shares.

                  9.1.2 Employee Director Grants.  Employee Directors shall only
         receive  Options  in  their  capacity  as  Employees  and not in  their
         capacity as Directors.

                  9.1.3 Date of Grant.  All Director Options shall be granted at
         the annual meeting of the Board.

         9.2      Terms of Options.

                  9.2.1 Option  Agreement.  Each Option granted pursuant to this
         Section 9 shall be evidenced by a written stock option  agreement which
         shall be executed by the Optionee and the Company.

                  9.2.2  Exercise  Price.  The  Exercise  Price  for the  Shares
         subject to each Option granted pursuant to this Section 9 shall be 100%
         of the Fair Market Value of such Shares on the Grant Date.

                  9.2.3 Exercisability.  Each Option granted pursuant to Section
         9.1.1 shall become immediately  exercisable on the first anniversary of
         the Grant Date.  Notwithstanding the preceding, once an optionee ceases
         to be a Director,  his or her Options which are not  exercisable  shall
         not become exercisable thereafter.

                                       15
<PAGE>

                  9.2.4 Expiration of Options.  Each Option shall terminate upon
         the first to occur of the following events:

                  (a) The expiration of ten (10) years from the Grant Date; or

                  (b)  The  expiration  of one (1)  year  from  the  date of the
         Optionee's termination of service as a Director for any reason.

                  9.2.5 Not Incentive Stock Options. Options granted pursuant to
         this Section 9 shall not be designated as Incentive Stock Options.

                  9.2.6  Other   Terms.   All   provisions   of  this  Plan  not
         inconsistent  with this  Section 9 shall  apply to  Options  granted to
         Nonemployee Directors; provided, however, that Section 5.2 (relating to
         the Committee's  discretion to set the terms and conditions of Options)
         shall be inapplicable with respect to Nonemployee Directors.

                                   SECTION 10

                                  MISCELLANEOUS

     10.1  Deferrals.  The  Committee,  in its  sole  discretion,  may  permit a
Participant  to defer  receipt of the payment of cash or the  delivery of Shares
that  would  otherwise  be due to such  Participant  under  an  Award.  Any such
deferral  election  shall be subject to such  rules and  procedures  as shall be
determined by the Committee in its sole discretion.

     10.2 No  Effect on  Employment  or  Service.  Nothing  in this  Plan  shall
interfere  with or limit in any way the right of the  Company to  terminate  any
Participant's  employment  or service at any time,  with or without  cause.  For
purposes  of this Plan,  transfer of  employment  of a  Participant  between the
Company and any of its Affiliates (or between  Affiliates) shall not be deemed a
Termination of Service.  Employment with the Company and its Affiliates is on an
at-will  basis  only,  unless  otherwise  provided by an  applicable  employment
agreement between the Participant and the Company or its Affiliate,  as the case
may be.

     10.3  Participation.  No Employee or Consultant  shall have the right to be
selected to receive an Award under this Plan, or, having been so selected, to be
selected to receive a future Award.

     10.4 Indemnification. Each person who is or shall have been a member of the
Committee,  or of the  Board,  shall be  indemnified  and held  harmless  by the
Company  against and from (a) any loss,  cost,  liability or expense  (including
attorneys'  fees) that may be imposed upon or reasonably  incurred by him or her
in connection  with or resulting from any claim,  action,  suit or proceeding to
which he or she may be a party or in which he or she may be  involved  by reason
of any action  taken or  failure to act under this Plan or any Award  Agreement,
and (b) from any and all amounts paid by him or her in settlement thereof,  with
the Company's prior written  approval,  or paid by him or her in satisfaction of
any judgment in any such claim,  action,  suit or proceeding against him or her;
provided,  however, that he or she shall give the Company an opportunity, at its
own expense, to handle and defend the same before he or she undertakes to handle
and defend it on his or her own behalf.  The foregoing right of  indemnification
shall not be  exclusive  of any other  rights of  indemnification  to which such
persons may be entitled  under the Company's  Certificate  of  Incorporation  or
Bylaws,  by contract,  as a matter of law or otherwise,  or under any power that
the Company may have to indemnify them or hold them harmless.

                                       16
<PAGE>

     10.5  Successors.  All  obligations  of the Company  under this Plan,  with
respect to Awards  granted  hereunder,  shall be binding on any successor to the
Company,  whether the  existence of such  successor is the result of a direct or
indirect purchase,  merger,  consolidation or otherwise, of all or substantially
all of the business or assets of the Company.

     10.6 Beneficiary Designations. If permitted by the Committee, a Participant
under this Plan may name a beneficiary or  beneficiaries  to whom any vested but
unpaid Award shall be paid in the event of the  Participant's  death.  Each such
designation shall revoke all prior  designations by the Participant and shall be
effective only if given in a form and manner acceptable to the Committee. In the
absence of any such  designation,  any vested benefits  remaining  unpaid at the
Participant's  death shall be paid to the  Participant's  estate and, subject to
the terms of this Plan and of the applicable  Award  Agreement,  any unexercised
vested  Award  may  be  exercised  by  the  administrator  or  executor  of  the
Participant's estate.

     10.7  Transferability.  No  Award  granted  under  this  Plan  may be sold,
transferred,  pledged,  assigned, or otherwise alienated or hypothecated,  other
than by will, by the laws of descent and distribution,  or to the limited extent
provided in Section 10.6;  provided,  however,  that an Award granted under this
Plan may be transferred to a holder's family members,  to trusts created for the
benefit of the holder or the holder's family members, or to charitable entities.

     10.8 No Rights as  Stockholder.  Except to the limited  extent  provided in
Sections 7.6 and 7.7, no Participant  (nor any  beneficiary  thereof) shall have
any of the rights or privileges of a stockholder  of the Company with respect to
any Shares issuable pursuant to an Award (or the exercise  thereof),  unless and
until certificates  representing such Shares shall have been issued, recorded on
the records of the Company or its transfer  agents or registrars,  and delivered
to the Participant (or his or her beneficiary).

                                   SECTION 11

                      AMENDMENT, TERMINATION, AND DURATION

     11.1  Amendment,  Suspension,  or  Termination.  The  Board,  in  its  sole
discretion,  may amend or terminate this Plan, or any part thereof,  at any time
and for any reason;  provided,  however,  that if and to the extent  required to
maintain this Plan's qualification under Rule 16b-3, any such amendment shall be
subject to stockholder approval; further provided,  however, that as required by
Rule 16b-3, the provisions of Section 9 regarding the manner for determining the
amount,  exercise  price,  and timing of Director  Options  shall in no event be
amended more than once every six (6) months,  other than to comport with changes
in the Code or ERISA.  (ERISA  currently  is  inapplicable  to this  Plan.)  The
amendment, suspension or termination of this Plan shall not, without the consent
of the  Participant,  alter or impair any rights or obligations  under any Award
theretofore  granted to such  Participant.  No Award may be  granted  during any
period of suspension or after termination of this Plan.

     11.2  Duration of this Plan.  This Plan shall become  effective on the date
specified  herein,  and subject to Section 11.1  (regarding the Board's right to
amend or  terminate  this Plan),  shall remain in effect  thereafter;  provided,
however,  that without further stockholder  approval,  no Incentive Stock Option
may be granted under this Plan after the tenth anniversary of the effective date
of this Plan.

                                       17
<PAGE>

                                   SECTION 12

                                 TAX WITHHOLDING

     12.1 Withholding Requirements.  Prior to the delivery of any Shares or cash
pursuant to an Award (or the exercise thereof), the Company shall have the power
and the right to deduct or withhold,  or require a  Participant  to remit to the
Company,  an amount  sufficient  to  satisfy  Federal,  state  and  local  taxes
(including  the  Participant's  FICA  obligation)  required to be withheld  with
respect to such Award (or the exercise thereof).

     12.2 Withholding  Arrangements.  The Committee,  in its sole discretion and
pursuant to such  procedures  as it may specify from time to time,  may permit a
Participant to satisfy such tax withholding obligation,  in whole or in part, by
(a) electing to have the Company withhold otherwise  deliverable  Shares, or (b)
delivering  to the Company  Shares then owned by the  Participant  having a Fair
Market  Value  equal to the amount  required to be  withheld.  The amount of the
withholding requirement shall be deemed to include any amount that the Committee
agrees may be withheld at the time any such election is made,  not to exceed the
amount  determined by using the maximum federal,  state or local marginal income
tax rates  applicable to the  Participant  with respect to the Award on the date
that the amount of tax to be withheld is to be determined. The Fair Market Value
of the Shares to be withheld or  delivered  shall be  determined  as of the date
that the taxes are required to be withheld.

                                   SECTION 13

                                CHANGE IN CONTROL

     13.1 Change in Control. In the event of a Change in Control of the Company,
all  Awards  granted  under  this Plan that  then are  outstanding  and not then
exercisable or are subject to restrictions, shall, unless otherwise provided for
in the Agreements applicable thereto,  become immediately  exercisable,  and all
restrictions  shall be removed,  as of the first date that the Change in Control
has been deemed to have  occurred,  and shall  remain as such for the  remaining
life of the Award as provided  herein and within the  provisions  of the related
Agreements.

     13.2 Definition. For purposes of Section 13.1 above, a Change in Control of
the Company shall be deemed to have occurred if the  conditions set forth in any
one or more of the following  shall have been  satisfied,  unless such condition
shall  have  received  prior  approval  of a  majority  vote  of the  Continuing
Directors,  as  defined  below,  indicating  that  Section  13.1 shall not apply
thereto:

          (a) any "person",  as such term is used in Sections 13(d) and 14(d) of
          the  Exchange  Act  (other  than the  Company,  any  trustee  or other
          fiduciary  holding  securities  under an employee  benefit plan of the
          Company or any  corporation  owned,  directly  or  indirectly,  by the
          stockholders of the Company in  substantially  the same proportions as
          their  ownership  of  stock  of  the  Company),   is  or  becomes  the
          "beneficial  owner" (as defined in Rule 13d-3 under the Exchange Act),
          directly or  indirectly,  of  securities  of the Company  representing
          thirty  percent  (30%)  or more of the  combined  voting  power of the
          Company's then outstanding securities;

                                       18
<PAGE>

          (b) during  any period of two  consecutive  years (not  including  any
          period  prior  to  the  Effective  Date  of  this  Plan),  individuals
          ("Existing  Directors") who at the beginning of such period constitute
          the Board of Directors,  and any new director (an "Approved Director")
          (other than a director  designated by a person who has entered into an
          agreement  with the  Company  to  effect a  transaction  described  in
          paragraph  (a), (b) or (c) of this Section 13.2) whose election by the
          Board  of  Directors  or  nomination  for  election  by the  Company's
          shareholders was approved by a vote of a least two-thirds (2/3) of the
          directors  then  still in office  who  either  were  directors  at the
          beginning of the period or whose  election or nomination  for election
          previously was so approved (Existing  Directors together with Approved
          Directors constituting "Continuing  Directors"),  cease for any reason
          to constitute at least a majority of the Board of Directors; or

          (c) the  stockholders of the Company approve a merger or consolidation
          of the  Company  with any  other  person,  other  than (i) a merger or
          consolidation  which  would  result in the  voting  securities  of the
          Company outstanding  immediately prior thereto continuing to represent
          (either by remaining  outstanding  or by being  converted  into voting
          securities for the surviving  entity) more than fifty percent (50%) of
          the combined  voting power of the voting  securities of the Company or
          such surviving  entity  outstanding  immediately  after such merger or
          consolidation,  or (ii) a merger in which no  "person"  (as defined in
          Section  13.2(a))  acquires  more  than  thirty  percent  (30%) of the
          combined voting power of the Company's then outstanding securities; or

          (d)  the  stockholders  of the  Company  approve  a plan  of  complete
          liquidation of the Company or an agreement for the sale or disposition
          by the Company of all or substantially all of the Company's assets (or
          any transaction having a similar effect).

                                   SECTION 14

                               LEGAL CONSTRUCTION

     14.1 Gender and Number.  Except where  otherwise  indicated by the context,
any masculine term used herein also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.

     14.2  Severability.  In the event any  provision of this Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining  parts of this Plan, and this Plan shall be construed and enforced
as if the illegal or invalid provision had not been included.

                                       19
<PAGE>

     14.3  Requirements  of Law.  The grant of Awards and the issuance of Shares
under this Plan shall be subject to all applicable  laws, rules and regulations,
and to such  approvals  by any  governmental  agencies  or  national  securities
exchanges as may be required from time to time.

     14.4 Securities Law Compliance.  With respect to Section 16 Persons, Awards
under this Plan are intended to comply with all  applicable  conditions  of Rule
16b-3.  To the extent any provision of this Plan,  Award  Agreement or action by
the  Committee  fails to so  comply,  it shall be deemed  null and void,  to the
extent  permitted by law and deemed advisable or appropriate by the Committee in
its sole discretion.

     14.5 Governing Law. This Plan and all Award  Agreements  shall be construed
in  accordance  with and governed by the laws of the State of Kansas  (excluding
its conflict of laws provisions).

     14.6 Captions.  Captions are provided  herein for  convenience of reference
only, and shall not serve as a basis for  interpretation or construction of this
Plan.

                                       20
<PAGE>

                                 AMENDMENT NO. 3

                           1995 EQUITY INCENTIVE PLAN

The following  amendment to the 1995 Equity  Incentive  Plan was approved by the
Stockholders  of  Applebee's  International,  Inc.  at their  Annual  Meeting of
Stockholders held on May 14, 1997:

"That Section 4.1 of the Plan be amended so that the number of shares authorized
under the Plan is increased to 2,300,000 shares."

IN WITNESS  WHEREOF,  I, as Secretary of Applebee's  International,  Inc. and as
Secretary of the aforesaid  Annual Meeting of  Stockholders,  have executed this
amendment this 14th day of May, 1997.

Robert T. Steinkamp
Secretary

<PAGE>

                                 AMENDMENT NO. 4

                           1995 EQUITY INCENTIVE PLAN

         THE FOLLOWING  AMENDMENT to the 1995 Equity Incentive Plan (the "Plan")
was adopted by the Executive  Compensation Committee on December 16, 1998 and by
the Board of Directors on December 17, 1998 at their  regular  meetings  held on
those dates,  to be  effective as to all grants made  pursuant to the Plan on or
after said December 17, 1998:

         "The  Amendment  to  Section  2 of the  Plan  adopted  by the  Board of
         Directors as of March 14, 1996 be, and the same hereby is,  deleted and
         canceled,  so that the definition of the term "Retirement"  shall be as
         set forth in the Plan as originally adopted."

         IN WITNESS  WHEREOF,  the Plan has been  amended as of this 17th day of
December, 1998.

                                            APPLEBEE'S INTERNATIONAL, INC.

                                            By:  /s/ Lloyd L. Hill
                                            Lloyd L. Hill, President/CEO

<PAGE>

                                  Amendments to
                           1995 Equity Incentive Plan

         Section  4.1 of the Plan  shall be amended so that the number of shares
authorized under the Plan is increased to 3,600,000 shares.

         Note: The following amendments will be effective for options granted in
1999,  so that the first  Measurement  Year will be 1998 and the first base year
will be 1997.

         Section 9 of the Plan shall be amended as follows:

                                    SECTION 9

                                DIRECTOR OPTIONS

         The provisions of this Section 9 are applicable only to Options granted
to Nonemployee Directors.  The provisions of Section 5 are applicable to Options
granted to  Employees  and  Consultants  (and to the extent  provided in Section
9.2.6, to Director Options).

         9.1      Granting of Options.

                  9.1.1 Nonemployee  Director Grants. Each Nonemployee  Director
         shall  receive an annual  grant of Director  Options to purchase  5,000
         shares of Stock. Such amount would  automatically  increase if Earnings
         Per Share for the Fiscal Year  immediately  preceding the year in which
         the director  option is granted (the  "Measurement  Year") exceeded the
         Earnings  Per Share  for the  Fiscal  Year  immediately  preceding  the
         Measurement  Year by  more  than  15%.  The  Board  of  Directors  will
         determine the formula by which the base grant would increase each year.
         In no event  shall  the  number of  Director  Options  granted  to each
         Nonemployee Director in any Fiscal Year exceed 9,000 shares.

                  9.1.2 Employee Director Grants.  Employee Directors shall only
         receive  Options  in  their  capacity  as  Employees  and not in  their
         capacity as Directors.

                  9.1.3 Date of Grant.  All Director Options shall be granted at
         the annual meeting of the Board.

         9.2      Terms of Options.

                  9.2.1 Option  Agreement.  Each Option granted pursuant to this
         Section 9 shall be evidenced by a written stock option  agreement which
         shall be executed by the Optionee and the Company.

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<PAGE>

                  9.2.2  Exercise  Price.  The  Exercise  Price  for the  Shares
         subject to each Option granted pursuant to this Section 9 shall be 100%
         of the Fair Market Value of such Shares on the Grant Date.

                  9.2.3 Exercisability.  Each Option granted pursuant to Section
         9.1.1 shall become immediately  exercisable on the first anniversary of
         the Grant Date.  Notwithstanding the preceding, once an optionee ceases
         to be a Director,  his or her Options which are not  exercisable  shall
         not become exercisable thereafter.

                  9.2.4 Expiration of Options.  Each Option shall terminate upon
         the first to occur of the following events:

                  (a)      The expiration of ten (10) years from the Grant Date;
         or

                  (b)      The  expiration  of one (1) year from the date of the
         Optionee's  termination  of service as a Director for any reason.

                  9.2.5 Not Incentive Stock Options. Options granted pursuant to
         this Section 9 shall not be designated as Incentive Stock Options.

                  9.2.6  Other   Terms.   All   provisions   of  this  Plan  not
         inconsistent  with this  Section 9 shall  apply to  Options  granted to
         Nonemployee Directors; provided, however, that Section 5.2 (relating to
         the Committee's  discretion to set the terms and conditions of Options)
         shall be inapplicable with respect to Nonemployee Directors.

* * * * *

         The  definition of "Earnings Per Share" under the Plan shall be amended
to read as follows:

         "Earnings  Per Share" means as to any Fiscal Year,  the  Company's  Net
Income or a  business  unit's  Pro Forma Net  Income,  divided  by the  weighted
average number of Shares  outstanding  for such Fiscal Year (basic  Earnings Per
Share as opposed to diluted  Earnings  Per Share),  rounded to the nearest  cent
($0.01).  The weighted average number of shares  outstanding for any Fiscal Year
will be determined by disregarding any stock  repurchases by the Company and the
Net Income or Pro Forma Net Income will be adjusted to reflect the net impact of
any debt service attributable to funds borrowed to effect any stock repurchases.
For these purposes, all funds used to effect stock repurchases will be deemed to
have been  borrowed,  and at an  interest  rate equal to the lowest  cost of the
Company's then existing borrowed funds."APPLEBEE'S INTERNATIONAL, INC.

                  1999 MANAGEMENT AND EXECUTIVE INCENTIVE PLAN

                                    PREAMBLE

         This Applebee's International,  Inc. Management and Executive Incentive
Plan (the "Plan") is an unfunded bonus and deferred compensation arrangement for
a select group of management or highly  compensated  personnel,  effective as of
January 1, 1999.

                                    ARTICLE I

                                   DEFINITIONS

          "Base  Salary"  means  the  weighted   average  base  salary  for  the
Participant for the year in question as approved by the Committee.

          "Beneficiary"  means the person or entity  designated by a Participant
on  the  most  recently  dated  Beneficiary  Designation  Form  signed  by  such
Participant and delivered to the Committee.

          "Beneficiary  Designation  Form"  means  the  form  designated  by the
Committee from time to time as the document to be used by Participants to select
a person or entity to receive any payments due such  Participant in the event of
such Participant's death prior to the date of such payment.

          "Board" means the Board of Directors of the Company.

          "Bonus" means each  Participant's  individual  bonus for any specified
period of time calculated pursuant to Section 2.02.

          "Bonus   Percentage"   means  the  percentage  of  Base  Salary  of  a
Participant used to determine a Bonus payment.

          "Change in Control"  means an event  constituting  a Change in Control
under the Equity Incentive Plan.

          "Committee"  means the Committee that administers the Equity Incentive
Plan.

          "Company" means Applebee's International, Inc., a Delaware corporation
and its corporate successors.

          "Disability"  means mental or physical  disability (i) of at least six
months  which in the  determination  of a  physician  selected  by the  Company,
prevents a Participant  from engaging in the principal  duties of his employment
or (ii) has qualified the individual for coverage under the Company's  long-term
disability insurance.

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<PAGE>

          "Employee in Good Standing" means a full-time  employee of the Company
or a Subsidiary who:

                  (i) has not been on probation,  received a written  warning of
         performance or disciplinary  deficiencies,  or been  suspended,  at any
         time during the preceding 12 months; or

                  (ii)  has  not  failed  to  perform  adequately  any  duty  or
         responsibility during the period in question.

          "Equity Incentive Plan" means the Applebee's International,  Inc. 1995
Equity Incentive Plan, as amended from time to time.

          "Fiscal year" or "year" (unless otherwise  specified) means the Fiscal
year of the Company as now  constituted  or as it may be changed  hereafter from
time to time.

          "GAAP" means  generally  accepted  accounting  principles  used in the
United States.

          "Participant"  means an employee of the Company,  or of a  Subsidiary,
designated by the Committee for participation in the benefits of the Plan.

          "Plan" means this 1999  Management and Executive  Incentive Plan as it
may be amended from time to time.

         "Retirement" means retirement at or after attaining age 65.

          "Satisfactory Separation" means the termination of employment with the
Company and its Subsidiaries in instances where:

                   (i)     the termination results from the death, Disability or
                           Retirement of the Participant; or

                   (ii)    as otherwise  determined by the Committee in its sole
                           discretion.

         "Subsidiary" means any corporation or any other entity (including,  but
not limited to, partnerships and joint ventures) controlling,  controlled by, or
under common control with the Company.

          "Target" means the measurement of financial performance of the Company
selected  by  the  Committee  to be  used  to  determine  the  applicable  Bonus
Percentage.

          "Threshold  Level" is the level of  achievement of the Target at which
Bonus Percentages begin and below which no Bonus is paid.

                                       2
<PAGE>

                                   ARTICLE II

          DESIGNATION OF PARTICIPANTS AND CALCULATION OF BONUS AMOUNTS

Section 2.01  Committee  Designations.  The Committee  shall  determine for each
Fiscal year:

         (a)      The  name,  employee  level,  and  Bonus  Percentages  of each
                  Participant for such Fiscal year;

         (b)      The Target and Threshold Level for such Fiscal year; and

         (c)      The  percentage of the Bonus,  if any, that will be payable at
                  the discretion of the Chief  Executive  Officer based upon the
                  achievement of departmental or individual  goals or objectives
                  and  the   individuals  or  employee   levels  to  which  such
                  discretionary bonus percentage shall be applicable.

Section 2.02  Calculation  of Bonus.  Bonuses shall be calculated by multiplying
the Participant's  Base Salary times the applicable Bonus Percentage  determined
by reference to the achievement of the Target, all as determined with respect to
the period in question.

Section 2.03 Payment of Bonus.

         (a)      At  the  end  of  each  Fiscal  year,  the  Target  and  Bonus
                  calculations  shall be made on a full Fiscal year basis.  Each
                  Participant will then receive the amount of such Participant's
                  Bonus  calculated  on a full Fiscal year basis and  reflecting
                  the  application  of the  discretion  of the  Chief  Executive
                  Officer  assigned  by the  Committee  under  Section  2.01(c),
                  above, if any.

         (b)      Bonuses will be paid as soon as  practicable  after the end of
                  the year.

         (c)      Upon a Participant's  election in accordance with policies and
                  procedures  established by the Committee from time to time, up
                  to fifty  percent  (50%) of the  amount of such  Participant's
                  Bonus may be paid  pursuant  to the Equity  Incentive  Plan in
                  Shares (as defined in the Equity  Incentive Plan), as an Award
                  of Restricted  Stock under  Section 7 of the Equity  Incentive
                  Plan in lieu of the payment of such  percentage  of such Bonus
                  pursuant to this Plan. The  restrictions are determined in the
                  discretion of the  Committee.  The number of Shares payable to
                  the  Participant  shall be  subject to the  maximum  aggregate
                  number  of Shares  permitted  under  Section  7 of the  Equity
                  Incentive Plan and shall be  determined,  in the discretion of
                  the Committee as announced to Participants  from time to time,
                  by  dividing  the cash  value of that  part of the Bonus to be
                  paid in Shares by a percentage  (whether  equal to,  lesser or
                  greater  than 100  percent  (100%)) of Fair  Market  Value (as
                  defined in the Equity  Incentive  Plan) on the date such Bonus
                  is payable to the  Participant  or pursuant to a formula based
                  on the closing price, or a percentage of the closing price, of
                  Shares on one or more days preceding such date.

                                       3
<PAGE>

                                  ARTICLE III

                        QUALIFICATION; EMPLOYMENT STATUS

Section  3.01  Qualification.  In order for a  Participant  to be  qualified  to
receive a Bonus  payment  hereunder,  the  Participant  must meet the  following
qualifications:

         (a)      Be an Employee in Good  Standing on the date the Bonus payment
                  is to be paid; or

         (b)      Have been an  Employee  in Good  Standing as of the end of the
                  fiscal year in question but have  terminated  employment  with
                  the Company through a Satisfactory  Separation between the end
                  of such  fiscal  year and the date the Bonus  payment is to be
                  paid for such fiscal year.

         (c)      A Participant  having  terminated  employment with the Company
                  through a  Satisfactory  Separation  shall be entitled only to
                  receive  the Bonus  calculated  through  the end of the fiscal
                  year  at  which  the  Participant  was  an  Employee  in  Good
                  Standing.

Section 3.02 Employment Status Changes. Unless specifically determined otherwise
by the Committee:

         (a)      In the event that a person  first  becomes an  employee of the
                  Company at an employment  level eligible for  participation in
                  the Plan at any time other than the first day of a year,  such
                  person's  bonus  shall be prorated  based on the weeks  worked
                  during the year; and

         (b)      In the event a Participant  changes from one employment  level
                  within the Plan to another  employment level within or outside
                  of the Plan,  such change shall be deemed  effective as of the
                  first day of the first week beginning after the effective date
                  of such change, and any Bonus for an employment level shall be
                  prorated  according to the number of weeks the Participant was
                  employed in such employment level.

                                   ARTICLE IV

                          ADMINISTRATION; MISCELLANEOUS

Section 4.01 Books and Records: Expenses. The books and records to be maintained
for the purpose of the Plan shall be maintained by the officers and employees of
the Company at its expense  and  subject to the  supervision  and control of the
Committee.  All calculations and financial  accounting  matters relevant to this
Plan shall,  except as otherwise  directed by the  Committee,  be  determined in
accordance  with GAAP. All expenses of  administering  the Plan shall be paid by
the  Company  from the  general  funds of the  Company  and shall not be charged
against any Participant account.

                                       4
<PAGE>

Section  4.02  Attachment.  To the  extent  permitted  by law,  the right of any
Participant or any Beneficiary in any benefit or to any payment  hereunder shall
not be subject in any manner to  attachment or other legal process for the debts
of such Participant or Beneficiary; and any such benefit or payment shall not be
subject to anticipation, alienation, sale, transfer, assignment or encumbrance.

Section 4.03 No  Liability.  No member of the Board or of the  Committee  and no
officer or employee of the Company  shall be liable to any person for any action
taken or omitted  in  connection  with the  administration  of this Plan  unless
attributable  to his own fraud or willful  misconduct;  nor shall the Company be
liable to any person for any such action unless attributable to fraud or willful
misconduct on the part of a director, officer or employee of the Company.

Section 4.04 No Fiduciary Relationship. Nothing contained herein shall be deemed
to  create a trust of any kind or  create  any  fiduciary  relationship.  To the
extent  that any person  acquires a right to receive  payments  from the Company
under this Plan,  such right shall be no greater than the right of any unsecured
general creditor of the Company.

Section 4.05  Beneficiaries.  Each Participant shall have the right to designate
Beneficiaries who are to succeed to his/her contingent right to receive payments
hereunder in the event of his/her death.  In case of a failure of designation or
the death of a designated  Beneficiary without a designated successor,  payments
shall be made to the Participant's estate.  Beneficiaries may be changed without
the consent of any prior Beneficiaries.

Section 4.06 Amendment. The Plan may be amended in whole or in part from time to
time by the Board of Directors of the Company.

Section 4.07 Notice. Notice of every such amendment shall be given in writing to
each Participant and Beneficiary.

Section 4.08 No Guarantee of Employment. Nothing contained in this Plan shall be
deemed to give any  Participant  the right to be  retained in the service of the
Company  or to  interfere  with  the  right  of the  Company  to  discharge  any
Participant,  for or without cause, at any time,  regardless of the effect which
such discharge shall have upon such individual as a Participant in the Plan.

Section 4.09 Governing Law. This Plan shall be construed in accordance  with the
laws of the State of Kansas.

Section 4.10  Interpretation of Plan. The Committee shall have sole and absolute
discretion and authority to interpret all provisions of this Plan and to resolve
all  questions  arising  under  this  Plan;  including,   but  not  limited  to,
determining  whether any person is eligible under this Plan,  whether any person
shall receive any payments pursuant to this Plan, and the amount of any payments
to  be  made  pursuant  to  this  Plan.   Any   interpretation,   resolution  or
determination of the Committee shall be final and binding upon all concerned and
shall not be subject to review.

                                       5
<PAGE>

Section  4.11  Rights  Non-transferable.  Any right to receive  payments  in the
future pursuant to this Plan shall not be transferable by the Participant  other
than pursuant to a Beneficiary Designation Form.

Section  4.12  Change in  Control.  In the event  there is a Change in  Control,
Bonuses shall be determined and paid hereunder for the Fiscal year in which such
Change in Control occurs by  calculating as nearly as practical the  achievement
of the Target as if the Change in Control had not occurred.

Section 4.13  Withholding.  Prior to the delivery of any Shares or cash pursuant
to this  Plan,  the  Company  shall  have the  power  and the right to deduct or
withhold or require a Participant to remit to the Company,  an amount sufficient
to satisfy  Federal,  state and local taxes  (including the  Participant's  FICA
obligation) required to be withheld with respect to such delivery.

                                       6

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