Human Capital & Careers

Applebee’s CFO Establishes Option Plan

Steve Lumpkin intends to diversify his holdings and minimize the market effect of stock sales.
Stephen TaubMarch 22, 2004

Applebee’s International Inc. announced that chief financial officer Steve Lumpkin has established a plan to manage the exercise and sale of certain non-qualified stock options.

Under SEC Rule 10b5-1, employees can adopt written plans to sell shares on a regular basis, regardless of any subsequent nonpublic information they may receive, or the price of the stock at the time of the sale. Such plans can be adopted only when employees are not in possession of material nonpublic information.

Under the plan, beginning in April 2004 Lumpkin will exercise a certain number of non-qualified stock options once each month if the closing price of Applebee’s common stock is a specified amount above the lowest exercise price of his vested non-qualified stock options.

Lumpkin currently holds vested non-qualified stock options to acquire 155,125 common shares. At the March 16, 2004 closing stock price, all exercisable non-qualified options would be included in the company’s diluted earnings per share. Under Applebee’s guidelines, Lumpkin is currently required to own at least three times his annual base salary in company stock. The company said he currently exceeds this guideline.

Lumpkin is adopting the plan to gradually diversify his holdings and to minimize the market effect of such sales by spreading them over a more extended period than the traditional trading window allows, stated the company.

Last month Oracle Corp. chief executive officer Larry Ellison and chief financial officer Jeff Henley also adopted prearranged plans to sell shares of their stock.

Under the Oracle plans, Ellison can sell up to 120 million shares over one year and Henley, up to 3 million shares over six months.

Last week Oracle Ellison sold 2 million shares, which he bought for $1.68 apiece, for between $11.38 and $11.87 per share. According to securities filings, Ellison also gave more than 900,000 shares to his wife, Melanie Craft, whom he married in December. He still directly retains more than 1.3 billion shares in the world’s second-largest software company.