UNITED STATESd18rn0p25nwr6d.cloudfront.net/CIK-0000852772/b1124df5...Denny’s Corporation, or...

UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 27, 2017

Commission File Number 0-18051DENNY’S CORPORATION

(Exact name of registrant as specified in its charter)

Delaware 13-3487402(State or other jurisdiction of (I.R.S. Employerincorporation or organization Identification No.)

203 East Main StreetSpartanburg, South Carolina 29319-0001

(Address of principal executive offices)(Zip Code)

(864) 597-8000(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days.

Yes þ No ¨ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to besubmitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submitand post such files).

Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerginggrowth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2of the Exchange Act.

Large accelerated filer þ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨ Emerging growth company ¨

(Do not check if a smallerreporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes ¨ No þ

As of October 27, 2017 , 65,282,790 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.

TABLE OF CONTENTS

PagePART I - FINANCIAL INFORMATION

Item 1. Financial Statements Condensed Consolidated Balance Sheets (Unaudited) 3Condensed Consolidated Statements of Income (Unaudited) 4Condensed Consolidated Statements of Comprehensive Income (Unaudited) 5Condensed Consolidated Statement of Shareholders' Deficit (Unaudited) 6Condensed Consolidated Statements of Cash Flows (Unaudited) 7Notes to Condensed Consolidated Financial Statements (Unaudited) 8

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 19Item 3. Quantitative and Qualitative Disclosures About Market Risk 28Item 4. Controls and Procedures 28

PART II - OTHER INFORMATION Item 1. Legal Proceedings 28Item 1A. Risk Factors 28Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 29Item 6. Exhibits 30Signatures 31

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Denny’s Corporation and SubsidiariesCondensed Consolidated Balance Sheets

(Unaudited)

September 27, 2017 December 28, 2016

(In thousands)

Assets

Current assets:

Cash and cash equivalents $ 1,663 $ 2,592

Receivables 17,423 19,841

Inventories 2,998 3,046

Assets held for sale — 1,020

Prepaid and other current assets 8,573 9,408

Total current assets 30,657 35,907

Property, net of accumulated depreciation of $243,107 and $255,185, respectively 138,049 133,102

Goodwill 37,821 35,233

Intangible assets, net 56,075 54,493

Deferred financing costs, net 1,491 1,936

Deferred income taxes 17,966 17,683

Other noncurrent assets 27,167 27,797

Total assets $ 309,226 $ 306,151

Liabilities

Current liabilities:

Current maturities of capital lease obligations $ 3,289 $ 3,285

Accounts payable 19,002 25,289

Other current liabilities 53,748 64,796

Total current liabilities 76,039 93,370

Long-term liabilities:

Long-term debt, less current maturities 261,800 218,500

Capital lease obligations, less current maturities 26,296 23,806

Liability for insurance claims, less current portion 13,584 14,853

Other noncurrent liabilities 29,104 26,734

Total long-term liabilities 330,784 283,893

Total liabilities 406,823 377,263

Commitments and contingencies Shareholders' equity (deficit)

Common stock $0.01 par value; shares authorized - 135,000; September 27, 2017: 107,554 shares issued and65,685 shares outstanding; December 28, 2016: 107,115 shares issued and 71,358 shares outstanding $ 1,076 $ 1,071

Paid-in capital 591,773 577,951

Deficit (347,976) (382,843)

Accumulated other comprehensive loss, net of tax (3,323) (1,407)

Shareholders’ equity before treasury stock 241,550 194,772

Treasury stock, at cost, 41,869 and 35,757 shares, respectively (339,147) (265,884)

Total shareholders' deficit (97,597) (71,112)

Total liabilities and shareholders' deficit $ 309,226 $ 306,151

See accompanying notes

3

Denny’s Corporation and SubsidiariesCondensed Consolidated Statements of Income

(Unaudited)

Quarter Ended Three Quarters Ended

September 27, 2017 September 28, 2016 September 27, 2017 September 28, 2016

(In thousands, except per share amounts)

Revenue:

Company restaurant sales $ 97,915 $ 93,122 $ 290,049 $ 272,718

Franchise and license revenue 34,469 35,264 103,621 104,625

Total operating revenue 132,384 128,386 393,670 377,343

Costs of company restaurant sales:

Product costs 24,896 22,819 72,798 67,253

Payroll and benefits 37,332 35,999 113,221 104,548

Occupancy 5,054 4,928 15,291 14,721

Other operating expenses 14,040 13,372 39,544 37,544

Total costs of company restaurant sales 81,322 77,118 240,854 224,066

Costs of franchise and license revenue 9,493 10,275 29,483 31,037

General and administrative expenses 16,446 17,558 50,536 50,691

Depreciation and amortization 5,958 5,609 17,493 16,207

Operating (gains), losses and other charges, net 630 249 3,459 24,365

Total operating costs and expenses, net 113,849 110,809 341,825 346,366

Operating income 18,535 17,577 51,845 30,977

Interest expense, net 4,067 3,117 11,348 8,905

Other nonoperating income, net (286) (543) (1,053) (635)

Net income before income taxes 14,754 15,003 41,550 22,707

Provision for income taxes 5,429 5,277 15,103 14,579

Net income $ 9,325 $ 9,726 $ 26,447 $ 8,128

Basic net income per share $ 0.14 $ 0.13 $ 0.38 $ 0.11

Diluted net income per share $ 0.13 $ 0.13 $ 0.37 $ 0.10

Basic weighted average shares outstanding 66,873 74,851 69,095 76,214

Diluted weighted average shares outstanding 69,210 76,791 71,377 78,052


4

Denny’s Corporation and SubsidiariesCondensed Consolidated Statements of Comprehensive Income

(Unaudited)



(In thousands)

Net income $ 9,325 $ 9,726 $ 26,447 $ 8,128

Other comprehensive income, net of tax: Minimum pension liability adjustment, net of tax of

$9, $8, $27 and $2,168 14 13 42 21,851Recognition of unrealized gain (loss) on hedge

transactions, net of tax of $133, $20, $(1,249) and$(5,034) 209 32 (1,958) (7,882)

Other comprehensive income (loss) 223 45 (1,916) 13,969

Total comprehensive income $ 9,548 $ 9,771 $ 24,531 $ 22,097


5

Denny’s Corporation and SubsidiariesCondensed Consolidated Statement of Shareholders’ Deficit

(Unaudited)

Common Stock Treasury Stock

Paid-inCapital

Deficit

AccumulatedOther

ComprehensiveLoss, Net

Total

Shareholders’Deficit Shares Amount Shares Amount

(In thousands)

Balance, December 28, 2016 107,115 $ 1,071 (35,757) $(265,884) $ 577,951 $(382,843) $ (1,407) $ (71,112)

Cumulative effect adjustment — — — — 551 8,420 — 8,971

Net income — — — — — 26,447 — 26,447

Other comprehensive loss — — — — — — (1,916) (1,916)

Share-based compensation on equity classified awards — — — — 6,219 — — 6,219

Purchase of treasury stock — — (5,558) (66,379) — — — (66,379)

Equity forward contract settlement — — (554) (6,884) 6,884 — — —Issuance of common stock for share-basedcompensation 398 4 — — (4) — — —

Exercise of common stock options 41 1 — — 172 — — 173

Balance, September 27, 2017 107,554 $ 1,076 (41,869) $(339,147) $ 591,773 $(347,976) $ (3,323) $ (97,597)


6

Denny’s Corporation and SubsidiariesCondensed Consolidated Statements of Cash Flows

(Unaudited)

Three Quarters Ended

September 27, 2017 September 28, 2016

(In thousands)

Cash flows from operating activities:

Net income $ 26,447 $ 8,128

Adjustments to reconcile net income to cash flows provided by operating activities:

Depreciation and amortization 17,493 16,207

Operating (gains), losses and other charges, net 3,459 24,365

Amortization of deferred financing costs 446 445

(Gain) loss on early extinguishments of debt and leases 68 (3)

Deferred income tax expense 9,936 8,942

Share-based compensation 6,546 5,625

Changes in assets and liabilities:

Decrease (increase) in assets:

Receivables 3,279 2,582

Inventories (55) 108

Other current assets 834 6,662

Other assets (5,068) (1,800)

Increase (decrease) in liabilities:

Accounts payable (5,121) (83)

Accrued salaries and vacations (9,094) (11,006)

Accrued taxes 1,474 1,647

Other accrued liabilities (4,834) (16,627)

Other noncurrent liabilities (2,285) (2,060)

Net cash flows provided by operating activities 43,525 43,132

Cash flows from investing activities:

Capital expenditures (13,558) (14,615)

Acquisition of restaurants and real estate (10,043) (12,956)

Proceeds from disposition of property 2,318 1,921

Collections on notes receivable 3,773 1,151

Issuance of notes receivable (2,278) (1,394)

Net cash flows used in investing activities (19,788) (25,893)

Cash flows from financing activities:

Revolver borrowings 105,900 38,000

Revolver payments (62,600) (30,000)

Long-term debt payments (2,467) (2,378)

Proceeds from exercise of stock options 173 492

Purchase of treasury stock (65,951) (19,137)

Net bank overdrafts 279 (4,361)

Net cash flows used in financing activities (24,666) (17,384)

Decrease in cash and cash equivalents (929) (145)

Cash and cash equivalents at beginning of period 2,592 1,671

Cash and cash equivalents at end of period $ 1,663 $ 1,526


7

Denny’s Corporation and SubsidiariesNotes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1. Introduction and Basis of Presentation

Denny’s Corporation, or Denny’s or the Company, is one of America’s largest full-service restaurant chains based on number of restaurants. At September 27,2017 , the Denny's brand consisted of 1,725 restaurants, 1,551 of which were franchised/licensed restaurants and 174 of which were company operated.

Our unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission.Therefore, certain information and notes normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles("GAAP") have been condensed or omitted. In our opinion, all adjustments considered necessary for a fair presentation of the interim periods presented have beenincluded. Such adjustments are of a normal and recurring nature. The preparation of these financial statements requires us to make estimates and judgments thataffect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Actual results may differ fromthese estimates under different assumptions or conditions; however, we believe that our estimates, including those for the above-described items, are reasonable.

These interim condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto for the yearended December 28, 2016 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained inour Annual Report on Form 10-K for the fiscal year ended December 28, 2016 . The results of operations for the interim periods presented are not necessarilyindicative of the results for the entire fiscal year ending December 27, 2017 .

Note 2. Summary of Significant Accounting Policies Newly Adopted Accounting Standards

Effective December 29, 2016, we adopted Accounting Standards Update (“ASU”) 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements toEmployee Share-Based Payment Accounting”. The new guidance simplifies several aspects of the accounting for share-based payment transactions, including therecognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election forforfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on thestatement of cash flows.

As required by the guidance, excess tax benefits recognized on share-based compensation expense are reflected on a prospective basis in our condensedconsolidated statements of income as a component of the provision for income taxes rather than paid-in capital. The cumulative-effect adjustment to retainedearnings from previously unrecognized excess tax benefits resulted in an $8.8 million increase in deferred tax assets and a decrease to opening deficit.

In addition, we have elected to account for forfeitures as they occur. The cumulative-effect adjustment to retained earnings from previously estimated forfeituresresulted in a $0.4 million increase to opening deficit, a $0.2 million increase in deferred tax assets and a $0.6 million increase to additional paid-in capital. Asallowed by the update, on a retrospective basis, cash flows related to excess tax benefits recognized on stock-based compensation expense are classified asoperating activities in the condensed consolidated statements of cash flows. There was no material impact on the prior periods retrospectively adjusted. Cash paidon employees’ behalf related to shares withheld for tax purposes continues to be classified as financing activites.

In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Testfor Goodwill Impairment”. The new guidance simplifies the subsequent measurement of goodwill by eliminating the second step of the two-step impairmenttest. Impairment is measured based on the excess of a reporting unit's carrying amount over its fair value. A qualitative assessment may still be completed first foran entity to determine if a quantitative impairment test is necessary. We early adopted ASU 2017-04 as of March 29, 2017 on a prospective basis. The adoption ofthis guidance did not have any impact on our consolidated financial statements.

8

Accounting Standards to be Adopted

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The new guidance clarifies the principles used to recognizerevenue for all entities and requires companies to recognize revenue when it transfers goods or service to a customer in an amount that reflects the consideration towhich a company expects to be entitled. The FASB has subsequently amended this guidance by issuing additional ASUs that provide clarification and furtherguidance around areas identified as potential implementation issues, including principal versus agent considerations, licensing and identifying performanceobligations, assessing collectability, presentation of sales taxes received from customers, noncash consideration, contract modification and clarification of using thefull retrospective approach upon adoption. All of the standards are effective for annual and interim periods beginning after December 15, 2017 (our fiscal 2018).The guidance allows for either a retrospective or cumulative effect transition method with early application permitted.

The guidance is not expected to impact the recognition of company restaurant sales or royalties from franchised restaurants. Upon adoption, initial franchise fees,which are currently recognized upon the opening of a franchise restaurant, are expected to be deferred and recognized over the term of the underlying franchiseagreement. The effect of the required deferral of initial franchise fees received in a given year will be mitigated by the recognition of revenue from feesretrospectively deferred from prior years. During the year ended December 28, 2016 , we recognized revenue related to initial franchise fees of $2.7 million .

The new guidance will also impact our advertising arrangements with franchisees. Currently we record advertising expense net of contributions from franchisees toour advertising programs, including local co-operatives. Under the new guidance, we would include franchisee contributions to and expenditures from ouradvertising programs on a gross basis within the consolidated statements of income. While this change will materially impact the gross amount of reportedfranchise and license revenue and costs of franchise and license revenue, the impact would be an offsetting increase to both revenue and expense such that therewill not be a significant, if any, impact on operating income and net income. During the year ended December 28, 2016 , contributions from franchisees to ouradvertising programs, including local co-operatives, were $76.5 million .

Gift card breakage will also be impacted by the new guidance. Currently we record breakage income as a benefit to our advertising fund or reduction to otheroperating expenses, depending on where the gift cards were sold, and breakage is recognized when the likelihood of redemption is remote. Upon adoption, gift cardbreakage income will be presented within revenue and breakage will be recognized proportionately as redemptions occur. During the year ended December 28,2016 , we recognized breakage of $0.3 million .

We are currently evaluating the impact this guidance will have on our consolidated financial statements related to other transactions with our franchisees and theeffect it will have on our disclosures. We preliminarily expect to use the modified retrospective method of adoption. However, the adoption method is subject tochange as we continue to evaluate the impact of the standard.

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets andFinancial Liabilities”. The new guidance requires equity investments (except those accounted for under the equity method of accounting, or those that result inconsolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit pricenotion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities bymeasurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptionsused to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. ASU 2016-01 is effective for annual andinterim periods beginning after December 15, 2017 (our fiscal 2018) with early adoption permitted. We are currently evaluating the impact the adoption of thisguidance will have on our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”, which provides guidance for accounting for leases. The new guidance requires companiesto recognize the assets and liabilities for the rights and obligations created by leased assets. The accounting guidance for lessors is largely unchanged. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018 (our fiscal 2019) with early adoption permitted. The guidance will be adoptedusing a modified retrospective approach. Based on a preliminary assessment, we expect the adoption will result in a significant increase in the assets and liabilitieson our consolidated balance sheets, as most of our operating lease commitments will be recognized as operating lease liabilities and right-of-use assets. We arecontinuing our evaluation, which may identify additional impacts this standard will have on our consolidated financial statements and related disclosures.

9

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. Thenew guidance replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requiresconsideration of a broader range of reasonable and supportable information to inform financial statement users of credit loss estimates. ASU 2016-13 is effectivefor annual and interim periods beginning after December 15, 2019 (our fiscal 2020) with early adoption permitted for annual and interim periods beginning afterDecember 15, 2018 (our fiscal 2019). We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensusof the Emerging Issues Task Force)”. The new guidance addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice.ASU 2016-15 is effective for annual and interim periods beginning after December 15, 2017 (our fiscal 2018) with early adoption permitted. The guidance is to beapplied using a retrospective transition method to each period presented. We do not expect the adoption of this guidance to have a material impact on ourconsolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”. The new guidance clarifies thedefinition of a business. ASU 2017-01 is effective for annual and interim periods beginning after December 15, 2017 (our fiscal 2018) with early adoptionpermitted. The guidance is to be applied prospectively. We do not expect the adoption of this guidance to have a material impact on our consolidated financialstatements.

In March 2017, the FASB issued ASU 2017-07, “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost andNet Periodic Postretirement Benefit Cost”. The new guidance requires an entity to report the service cost component in the same line on the income statement asother compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to bepresented in the income statement separately from the service cost component and outside the subtotal of income from operations, if one is presented. If a separateline item is not used, the line item used in the income statement must be disclosed. ASU 2017-07 is effective for annual and interim periods beginning afterDecember 15, 2017 (our fiscal 2018) with early adoption permitted. The guidance is to be applied prospectively. We do not expect the adoption of this guidance tohave a material impact on our consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting”. The new update providesguidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. ASU 2017-09 iseffective for annual and interim periods beginning after December 15, 2017 (our fiscal 2018) with early adoption permitted. The guidance is to be appliedprospectively. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities". The newupdate better aligns an entity’s risk management activities and financial reporting for hedging relationships, simplifies the hedge accounting requirements, andimproves the disclosures of hedging arrangements. ASU 2017-12 is effective for annual and interim periods beginning after December 15, 2018 (our fiscal 2019)with early adoption permitted. The amended presentation and disclosure guidance is to be applied on a prospective basis. Adjustments to the measurement ofineffectiveness should be recorded through a cumulative effect adjustment as of the beginning of the adoption period. We do not expect the adoption of thisguidance to have a material impact on our consolidated financial statements.

We reviewed all other newly issued accounting pronouncements and concluded that they are either not applicable to our business or are not expected to have amaterial effect on our consolidated financial statements as a result of future adoption.

10

Note 3. Receivables Receivables were comprised of the following:


(In thousands)

Current assets:

Receivables:

Trade accounts receivable from franchisees $ 11,471 $ 10,513

Financing receivables from franchisees 2,228 2,804

Vendor receivables 1,844 3,865

Credit card receivables 1,505 1,678

Other 656 1,261

Allowance for doubtful accounts (281) (280)

Total current receivables, net $ 17,423 $ 19,841

Noncurrent assets (included as a component of other noncurrent assets):

Financing receivables from franchisees $ 479 $ 732

During the three quarters ended September 27, 2017 , we wrote-off $0.2 million of financing receivables from a franchisee. Also, during the three quarters endedSeptember 27, 2017 , we recorded $0.4 million of insurance receivables related to hurricane damages incurred during the period, which are included as acomponent of other receivables in the above table.

Note 4. Goodwill and Other Intangible Assets

The following table reflects the changes in carrying amounts of goodwill.

(In thousands)Balance, December 28, 2016 $ 35,233Additions related to acquisition 2,573Adjustments related to the sale of restaurants 15

Balance, September 27, 2017 $ 37,821

Other intangible assets were comprised of the following:


Gross Carrying

Amount AccumulatedAmortization

Gross CarryingAmount

AccumulatedAmortization

(In thousands)

Intangible assets with indefinite lives:

Trade names $ 44,076 $ — $ 44,076 $ —

Liquor licenses 166 — 166 —

Intangible assets with definite lives:

Franchise and license agreements — — 190 186

Reacquired franchise rights 14,363 2,530 11,498 1,251

Intangible assets $ 58,605 $ 2,530 $ 55,930 $ 1,437

11

During the three quarters ended September 27, 2017 , we acquired seven franchised restaurants and one former franchised restaurant, which was being remodeledand subsequently opened in the fourth quarter of fiscal 2017, for $6.5 million , of which $2.9 million was allocated to reacquired franchise rights, $1.0 million toproperty and $2.6 million to goodwill. In addition, we recorded $1.9 million of capital leases in connection with the acquired franchised restaurants. We accountfor the acquisition of franchised restaurants using the acquisition method of accounting for business combinations. The purchase price allocations were based onLevel 3 fair value estimates.

Note 5. Other Current Liabilities Other current liabilities consisted of the following:


(In thousands)

Accrued payroll $ 18,321 $ 27,056

Accrued insurance, primarily current portion of liability for insurance claims 6,481 6,651

Accrued taxes 8,880 7,407

Accrued advertising 6,066 8,051

Gift cards 4,537 5,474

Other 9,463 10,157

Other current liabilities $ 53,748 $ 64,796

Note 6. Operating (Gains), Losses and Other Charges, Net

Operating (gains), losses and other charges, net are comprised of the following:



(In thousands)

Pension settlement loss $ — $ — $ — $ 24,297

Software implementation costs 1,001 — 4,669 —Gains on sales of assets and other,

net (411) (77) (1,646) (764)

Restructuring charges and exit costs 40 326 436 832Operating (gains), losses and

other charges, net $ 630 $ 249 $ 3,459 $ 24,365

Software implementation costs of $4.7 million for the three quarters ended September 27, 2017 were the result of our investment in a new cloud-based EnterpriseResource Planning system. Gains on sales of assets and other, net of $1.6 million for the three quarters ended September 27, 2017 primarily related to real estatesold to franchisees. The pre-tax pension settlement loss of $24.3 million related to the completion of the liquidation of the Advantica Pension Plan during the threequarters ended September 28, 2016 . Gains on sales of assets and other, net of $0.8 million for the three quarters ended September 28, 2016 primarily related torestaurants sold to franchisees.

12

Restructuring charges and exit costs were comprised of the following:



(In thousands)

Exit costs $ 40 $ 154 $ 366 $ 269Severance and other restructuring

charges — 172 70 563Total restructuring charges and

exit costs $ 40 $ 326 $ 436 $ 832

The components of the change in accrued exit cost liabilities are as follows:

(In thousands)

Balance, December 28, 2016 $ 1,896Exit costs (1) 366Payments, net of sublease receipts (1,067)Interest accretion 69

Balance, September 27, 2017 1,264Less current portion included in other current liabilities 309

Long-term portion included in other noncurrent liabilities $ 955

(1) Included as a component of operating (gains), losses and other charges, net.

As of September 27, 2017 and December 28, 2016 , we had accrued severance and other restructuring charges of less than $0.1 million and $0.4 million ,respectively. The balance as of September 27, 2017 is expected to be paid during the next 12 months.

Note 7. Fair Value of Financial Instruments

Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis Financial assets and liabilities measured at fair value on a recurring basis are summarized below:

Total

Quoted Prices inActive Markets for

IdenticalAssets/Liabilities

(Level 1)

SignificantOther

ObservableInputs

(Level 2)

SignificantUnobservable Inputs

(Level 3) ValuationTechnique

(In thousands )

Fair value measurements as of September 27, 2017: Deferred compensation plan investments (1) $ 12,036 $ 12,036 $ — $ — market approach

Interest rate swaps, net (2) (3,962) — (3,962) — income approach

Total $ 8,074 $ 12,036 $ (3,962) $ —

Fair value measurements as of December 28, 2016:

Deferred compensation plan investments (1) $ 11,248 $ 11,248 $ — $ — market approach

Interest rate swaps (2) (756) — (756) — income approach

Total $ 10,492 $ 11,248 $ (756) $ —

(1) The fair values of our deferred compensation plan investments are based on the closing market prices of the elected investments.(2) The fair values of our interest rate swaps are based upon Level 2 inputs, which include valuation models as reported by our counterparties. The key inputs for the valuation models are

quoted market prices, interest rates and forward yield curves. See Note 8 for details on the interest rate swaps.

13

Those assets and liabilities measured at fair value on a nonrecurring basis are summarized below:

Significant OtherObservable

Inputs(Level 2)

ImpairmentCharges Valuation Technique

(In thousands)

Fair value measurements as of December 28, 2016: Assets held for sale (1) $ 1,020 $ 1,098 market approach

(1) As of December 28, 2016, assets were classified as assets held for sale and were written down to their fair value. The fair value of assets held for sale was based upon Level 2 inputs,which included sales agreements.

Note 8. Long-Term Debt

Denny's Corporation and certain of its subsidiaries have a credit facility consisting of a five-year $325 million senior secured revolver (with a $30 million letter ofcredit sublimit). As of September 27, 2017 , we had outstanding revolver loans of $261.8 million and outstanding letters of credit under the senior secured revolverof $21.5 million . These balances resulted in availability of $41.7 million under the revolving facility. Prior to considering the impact of our interest rate swaps,described below, the weighted-average interest rate on outstanding revolver loans was 3.27% and 2.45% as of September 27, 2017 and December 28, 2016 ,respectively. Taking into consideration our interest rate swaps, the weighted-average interest rate of outstanding revolver loans was 3.22% and 2.74% as ofSeptember 27, 2017 and December 28, 2016 , respectively.

A commitment fee is paid on the unused portion of the revolving credit facility and was 0.30% as of September 27, 2017 . Borrowings under the credit facility beara tiered interest rate, which is based on the Company’s consolidated leverage ratio and was set at LIBOR plus 200 basis points as of September 27, 2017 . Thematurity date for the credit facility is March 30, 2020 .

The credit facility is available for working capital, capital expenditures and other general corporate purposes. The credit facility is guaranteed by the Company andits material subsidiaries and is secured by assets of the Company and its subsidiaries, including the stock of the Company's subsidiaries. It includes negativecovenants that are usual for facilities and transactions of this type. The credit facility also includes certain financial covenants with respect to a maximumconsolidated leverage ratio and a minimum consolidated fixed charge coverage ratio. We were in compliance with all financial covenants as of September 27, 2017.

Subsequent to the end of the quarter, we refinanced our credit facility. See Note 16.

Interest Rate Hedges

We have interest rate swaps to hedge a portion of the cash flows of our floating rate debt. We designated the interest rate swaps as cash flow hedges of ourexposure to variability in future cash flows attributable to payments of LIBOR due on specific notional debt obligations.

Based on the interest rate as determined by our consolidated leverage ratio in effect as of September 27, 2017 , under the terms of the swaps, we will pay thefollowing fixed rates on the notional amounts noted:

Period Covered Notional Amount Fixed Rate

(In thousands) March 31, 2015 - March 29, 2018 $ 120,000 3.13%

March 29, 2018 - March 31, 2025 170,000 4.44%

April 1, 2025 - March 31, 2026 50,000 4.46%

As of September 27, 2017 , the fair value of the interest rate swaps was a net liability of $4.0 million , which is comprised of assets of $0.1 million recorded as acomponent of other noncurrent assets and liabilities of $4.1 million recorded as a component of other noncurrent liabilities in our Condensed Consolidated BalanceSheets. See Note 14 for the amounts recorded in accumulated other comprehensive loss related to the interest rate swaps.

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Note 9. Defined Benefit Plans

During the second quarter of 2016, we completed the liquidation of the Advantica Pension Plan (the “Pension Plan”). Accordingly, we made a final contribution of$9.5 million to the Pension Plan. The resulting $67.7 million in Pension Plan assets were used to make lump sum payments and purchase annuity contracts, whichare administered by a third-party provider. In addition, during the quarter, we recognized a pre-tax settlement loss of $24.3 million related to the liquidation,reflecting the recognition of unamortized actuarial losses that were recorded in accumulated other comprehensive income.

The components of net periodic benefit cost were as follows:



(In thousands)

Pension Plan: Service cost $ — $ — $ — $ 105

Net periodic benefit cost $ — $ — $ — $ 105

Other Defined Benefit Plans: Interest cost $ 20 $ 23 $ 62 $ 69

Amortization of net loss 23 21 69 64

Net periodic benefit cost $ 43 $ 44 $ 131 $ 133

We made contributions of $0.2 million and $0.1 million to our other defined benefit plans during the three quarters ended September 27, 2017 and September 28,2016 , respectively. We expect to contribute less than $0.1 million to our other defined benefit plans over the remainder of fiscal 2017 .

Additional minimum pension liability, net of tax, of $0.9 million related to our other defined benefit plans is reported as a component of accumulated othercomprehensive loss in our Condensed Consolidated Statement of Shareholders’ Equity as of both September 27, 2017 and December 28, 2016 , respectively.

Note 10. Share-Based Compensation

Refer to Note 2 for the impact of the adoption of ASU 2016-09. Total share-based compensation cost included as a component of net income was as follows:



(In thousands)

Performance share awards $ 2,246 $ 1,862 $ 6,090 $ 5,284Restricted stock units for board

members 247 (87) 456 341

Total share-based compensation $ 2,493 $ 1,775 $ 6,546 $ 5,625

15

Performance Share Awards During the three quarters ended September 27, 2017 , we granted certain employees approximately 0.3 million performance shares that vest based on the totalshareholder return (“TSR”) of our common stock compared to the TSRs of a group of peer companies and 0.3 million performance shares that vest based on ourAdjusted EBITDA growth rate, as defined under the terms of the award. As the TSR based performance shares contain a market condition, a Monte Carlovaluation was used to determine the grant date fair value of $13.05 per share. The performance shares based on the Adjusted EBITDA growth rate have a grantdate fair value of $12.17 per share, the market value of our common stock on the date of grant. The awards granted to our named executive officers also contain aperformance condition based on the attainment of an operating measure for the fiscal year ended December 27, 2017 . The performance period for theseperformance shares is the three year fiscal period beginning December 29, 2016 and ending December 25, 2019. They will vest and be earned (from 0% to 150%of the target award for each such increment) at the end of the performance period.

During the three quarters ended September 27, 2017 , we made payments of $3.9 million in cash and issued 0.4 million shares of common stock related toperformance share awards. As of September 27, 2017 , we had approximately $10.5 million of unrecognized compensation cost related to all unvested performance share awards outstanding,which is expected to be recognized over a weighted average of 1.8 years . Restricted Stock Units for Board Members

During the three quarters ended September 27, 2017 , we granted approximately 0.1 million deferred stock units (which are equity classified) with a weightedaverage grant date fair value of $12.04 per unit to non-employee members of our Board of Directors. The deferred stock units vest after a one year service period.A director may elect to convert these awards into shares of common stock either on a specific date in the future (while still serving as a member of our Board ofDirectors) or upon termination as a member of our Board of Directors. Also during the three quarters ended September 27, 2017 , we made cash payments of $0.5million related to the replacement cash awards issued in 2016 related to the canceled deferred stock units awards. As of September 27, 2017 , we hadapproximately $0.7 million of unrecognized compensation cost related to all unvested restricted stock unit awards outstanding, which is expected to be recognizedover a weighted average of 0.9 years . Note 11. Income Taxes

The effective income tax rate was 36.8% for the quarter ended September 27, 2017 and 36.3% for the three quarters ended September 27, 2017 compared to 35.2%and 64.2% , respectively, for the prior year periods. Refer to Note 2 for the impact of the adoption of ASU 2016-09. For the 2016 periods, the difference in theoverall effective rate from the U.S. statutory rate was primarily due to the Pension Plan liquidation, foreign tax credits and certain discrete items. During the threequarters ended September 28, 2016 , we amended prior years’ U.S. tax returns in order to maximize a foreign tax credit in lieu of a foreign tax deduction. Thiscreated a benefit to the effective tax rate of 4.8% for the quarter and 4.6% year-to-date. In addition, during the three quarters ended September 28, 2016 , certaindiscrete items created an increase to the effective tax rate of 4.3% for the quarter and 4.7% year-to-date.

In addition to the items noted above, the 2016 year-to-date rate of 64.2% was also impacted by the recognition of a $2.1 million tax benefit related to the $24.3million pre-tax settlement loss on the Pension Plan liquidation. This benefit was at a rate lower than the effective tax rate due to the previous recognition of anapproximate $7.2 million tax benefit recognized with the reversal of our valuation allowance in 2011. Excluding the impact of the Pension Plan liquidation, oureffective income tax rate would have been 35.6% for the three quarters ended September 28, 2016 .

16

Note 12. Net Income Per Share The amounts used for the basic and diluted net income per share calculations are summarized below:



(In thousands, except for per share amounts)

Net income $ 9,325 $ 9,726 $ 26,447 $ 8,128

Weighted average shares

outstanding - basic 66,873 74,851 69,095 76,214Effect of dilutive share-based

compensation awards 2,337 1,940 2,282 1,838Weighted average shares

outstanding - diluted 69,210 76,791 71,377 78,052

Basic net income per share $ 0.14 $ 0.13 $ 0.38 $ 0.11

Diluted net income per share $ 0.13 $ 0.13 $ 0.37 $ 0.10

Anti-dilutive share-based

compensation awards 606 — 606 —

Note 13. Supplemental Cash Flow Information



(In thousands)

Income taxes paid, net $ 5,039 $ 1,140

Interest paid $ 10,547 $ 8,197

Noncash investing and financing activities:

Property acquisition payable $ 500 $ —

Issuance of common stock, pursuant to share-based compensation plans $ 4,961 $ 3,597

Execution of capital leases $ 4,959 $ 7,180

Treasury stock payable $ 741 $ 695

Notes received in connection with disposition of property $ 1,750 $ —

Note 14. Shareholders' Equity

Share Repurchase Our credit facility permits the purchase of Denny’s stock and the payment of cash dividends subject to certain limitations. In May 2016, our Board of Directorsapproved a share repurchase program authorizing us to repurchase up to $100 million of our common stock (in addition to prior authorizations). Under thisprogram, we may, from time to time, purchase shares in the open market (including pre-arranged stock trading plans in accordance with the guidelines specified inRule 10b5-1 under the Securities Exchange Act of 1934, as amended) or in privately negotiated transactions, subject to market and business conditions.

17

In November 2016, as part of our previously authorized share repurchase programs, we entered into a variable term, capped accelerated share repurchase (the“ASR”) agreement with MUFG Securities EMEA plc (“MUFG”), to repurchase an aggregate of $25 million of our common stock. Pursuant to the terms of theASR agreement, we paid $25 million in cash and received approximately 1.5 million shares of our common stock (which represents the minimum shares to bedelivered based on the cap price) and recorded $18.1 million of treasury stock related to these shares. The remaining balance of $6.9 million was recorded asadditional paid-in capital in shareholders' equity as of December 28, 2016 as an equity forward contract.

During the three quarters ended September 27, 2017 , we settled the ASR agreement with MUFG. As a result, we received final delivery of an additional 0.5million shares of our common stock, bringing the total number of shares repurchased pursuant to the ASR agreement to 2.0 million . The total number of sharesrepurchased was based on a combined discounted volume-weighted average price (“VWAP”) of $12.36 per share, which was determined based on the average ofthe daily VWAP of our common stock, less a fixed discount, over the term of the ASR agreement. As a result of settling the ASR agreement, we recorded $6.9million of treasury stock related to the settlement of the equity forward contract related to the ASR agreement.

In addition to the settlement of the ASR agreement, during the three quarters ended September 27, 2017 , we repurchased 5.6 million shares of our common stockfor approximately $66.4 million . This brings the total amount repurchased under the May 2016 repurchase program to 7.2 million shares of our common stock forapproximately $87.2 million , leaving approximately $12.8 million that can be used to repurchase our common stock under this program as of September 27, 2017 .

Repurchased shares are included as treasury stock in our Condensed Consolidated Balance Sheets and our Condensed Consolidated Statement of Shareholders'Equity.

Subsequent to the end of the quarter, the Board of Directors of Denny’s Corporation approved a new share repurchase program. See Note 16.

Accumulated Other Comprehensive Loss

The components of the change in accumulated other comprehensive loss were as follows:

Pensions Derivatives Accumulated OtherComprehensive Loss

(In thousands)

Balance as of December 28, 2016 $ (945) $ (462) $ (1,407)

Amortization of net loss (1) 69 — 69

Net change in fair value of derivatives — (3,091) (3,091)

Reclassification of derivatives to interest expense (2) — (116) (116)

Income tax (expense) benefit related to items of other comprehensive loss (27) 1,249 1,222

Balance as of September 27, 2017 $ (903) $ (2,420) $ (3,323)

(1) Before-tax amount related to our Other Defined Benefit Plans that was reclassified from accumulated other comprehensive loss and included as a component of pension expensewithin general and administrative expenses in our Condensed Consolidated Statements of Income during the three quarters ended September 27, 2017 . See Note 9 for additionaldetails.

(2) Amounts reclassified from accumulated other comprehensive loss into income, represent payments made to the counterparty for the effective portions of the interest rate swaps.These amounts are included as a component of interest expense in our Condensed Consolidated Statements of Income. We expect to reclassify approximately $1.0 million fromaccumulated other comprehensive loss related to our interest rate swaps during the next twelve months. See Note 8 for additional details.

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Note 15. Commitments and Contingencies

We have guarantees related to certain franchisee loans. Payments under these guarantees would result from the inability of a franchisee to fund required paymentswhen due. Through September 27, 2017 , no events had occurred that caused us to make payments under these guarantees. There were $6.0 million and $7.9million of loans outstanding under these programs as of September 27, 2017 and December 28, 2016 , respectively. As of September 27, 2017 , the maximumamounts payable under the loan guarantees was $1.2 million . As a result of these guarantees, we have recorded liabilities of less than $0.1 million as of bothSeptember 27, 2017 and December 28, 2016 , which are included as a component of other noncurrent liabilities in our Condensed Consolidated Balance Sheets andother nonoperating expense in our Condensed Consolidated Statements of Income.

There are various claims and pending legal actions against or indirectly involving us, incidental to and arising out of the ordinary course of the business. In theopinion of management, based upon information currently available, the ultimate liability with respect to these proceedings and claims will not materially affectthe Company's consolidated results of operations or financial position.

Note 16. Subsequent Events

Share Repurchase Program

On October 27, 2017, the Board of Directors of Denny’s Corporation approved a new share repurchase program authorizing the Company to repurchase anadditional $200 million of its common stock, in addition to repurchases previously authorized. As of October 27, 2017, the Company had approximately $7.6million remaining available in its current $100 million share stock repurchase program announced in May 2016.

Refinancing of Credit Facility

On October 26, 2017, Denny's Corporation and certain of its subsidiaries refinanced our credit facility (the "Old Credit Facility") and entered into a new five-year $400 million senior secured revolver (with a $30 million letter of credit sublimit) (the “New Credit Facility”). The New Credit Facility includes an accordionfeature that would allow us to increase the size of the revolver to $450 million . A commitment fee, initially set at 0.30% , is paid on the unused portion of therevolving credit facility. Borrowings under the credit facility bear a tiered interest rate, which is based on the Company’s consolidated leverage ratio and wasinitially set at LIBOR plus 200 basis points. The maturity date for the credit facility is October 26, 2022 .

The New Credit Facility was used to refinance the Old Credit Facility and will also be available for working capital, capital expenditures and other generalcorporate purposes. The New Credit Facility is guaranteed by the Company and its material subsidiaries and is secured by assets of the Company and itssubsidiaries, including the stock of the Company's subsidiaries. It includes negative covenants that are usual for facilities and transactions of this type. The NewCredit Facility also includes certain financial covenants with respect to a maximum consolidated leverage ratio and a minimum consolidated fixed charge coverageratio.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statementsreflect our best judgment based on factors currently known and are intended to speak only as of the date such statements are made. Forward-looking statementsinvolve risks, uncertainties, and other factors which may cause our actual performance to be materially different from the performance indicated or implied by suchstatements. You should consider our forward-looking statements in light of the risks discussed under Part I, Item 1A, “Risk Factors” in our most recent AnnualReport on Form 10-K, as well as our consolidated financial statements, related notes, and the other financial information appearing elsewhere in this report and ourother filings with the United States Securities and Exchange Commission. While we may elect to update forward-looking statements at some point in the future, weexpressly disclaim any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as requiredby law.

19

Statements of Income The following table contains information derived from our Condensed Consolidated Statements of Income expressed as a percentage of total operating revenues,except as noted below. Percentages may not add due to rounding.



(Dollars in thousands)

Revenue:

Company restaurant sales $ 97,915 74.0 % $ 93,122 72.5 % $ 290,049 73.7 % $ 272,718 72.3 %

Franchise and license revenue 34,469 26.0 % 35,264 27.5 % 103,621 26.3 % 104,625 27.7 %

Total operating revenue 132,384 100.0 % 128,386 100.0 % 393,670 100.0 % 377,343 100.0 %

Costs of company restaurant sales (a): Product costs 24,896 25.4 % 22,819 24.5 % 72,798 25.1 % 67,253 24.7 %

Payroll and benefits 37,332 38.1 % 35,999 38.7 % 113,221 39.0 % 104,548 38.3 %

Occupancy 5,054 5.2 % 4,928 5.3 % 15,291 5.3 % 14,721 5.4 %

Other operating expenses 14,040 14.3 % 13,372 14.4 % 39,544 13.6 % 37,544 13.8 %

Total costs of company restaurant sales 81,322 83.1 % 77,118 82.8 % 240,854 83.0 % 224,066 82.2 %

Costs of franchise and license revenue (a) 9,493 27.5 % 10,275 29.1 % 29,483 28.5 % 31,037 29.7 %

General and administrative expenses 16,446 12.4 % 17,558 13.7 % 50,536 12.8 % 50,691 13.4 %

Depreciation and amortization 5,958 4.5 % 5,609 4.4 % 17,493 4.4 % 16,207 4.3 %Operating (gains), losses and other charges,

net 630 0.5 % 249 0.2 % 3,459 0.9 % 24,365 6.5 %

Total operating costs and expenses, net 113,849 86.0 % 110,809 86.3 % 341,825 86.8 % 346,366 91.8 %

Operating income 18,535 14.0 % 17,577 13.7 % 51,845 13.2 % 30,977 8.2 %

Interest expense, net 4,067 3.1 % 3,117 2.4 % 11,348 2.9 % 8,905 2.4 %

Other nonoperating income, net (286) (0.2)% (543) (0.4)% (1,053) (0.3)% (635) (0.2)%

Net income before income taxes 14,754 11.1 % 15,003 11.7 % 41,550 10.6 % 22,707 6.0 %

Provision for income taxes 5,429 4.1 % 5,277 4.1 % 15,103 3.8 % 14,579 3.9 %

Net income $ 9,325 7.0 % $ 9,726 7.6 % $ 26,447 6.7 % $ 8,128 2.2 %

Other Data:

Company average unit sales $ 577 $ 573 $ 1,706 $ 1,689

Franchise average unit sales $ 403 $ 396 $ 1,188 $ 1,174

Company equivalent units (b) 170 163 170 161

Franchise equivalent units (b) 1,550 1,560 1,557 1,554

Company same-store sales increase (c)(d) 0.6% 1.0% 0.6% 1.5% Domestic franchise same-store

sales increase (c)(d) 0.6% 1.0% 0.7% 0.9%

(a) Costs of company restaurant sales percentages are as a percentage of company restaurant sales. Costs of franchise and license revenue percentages are as a percentage offranchise and license revenue. All other percentages are as a percentage of total operating revenue.

(b) Equivalent units are calculated as the weighted average number of units outstanding during a defined time period.(c) Same-store sales include sales from restaurants that were open the same period in the prior year.(d) Prior year amounts have not been restated for 2017 comparable units.

20

Unit Activity


September 27, 2017 September 28, 2016 September 27, 2017 September 28, 2016Company restaurants, beginning of

period 172 162 169 164

Units opened 1 — 2 1

Units acquired from franchisees 1 6 7 9

Units sold to franchisees — — (4) (6)

Units closed — — — —

End of period 174 168 174 168

Franchised and licensed restaurants,beginning of period 1,552 1,558 1,564 1,546

Units opened 8 13 23 37

Units purchased from Company — — 4 6

Units acquired by Company (1) (6) (7) (9)

Units closed (8) (5) (33) (20)

End of period 1,551 1,560 1,551 1,560

Total restaurants, end of period 1,725 1,728 1,725 1,728

Company Restaurant Operations During the quarter ended September 27, 2017 , company restaurant sales increased $4.8 million , or 5.1% , primarily resulting from a seven equivalent unitincrease in company restaurants and a 0.6% increase in company same-store sales as compared to the prior year period. During the three quarters ended September27, 2017 , company restaurant sales increased $17.3 million , or 6.4% , primarily resulting from a nine equivalent unit increase in company restaurants and a 0.6%increase in company same-store sales as compared to the prior year period. Total costs of company restaurant sales as a percentage of company restaurant sales increased to 83.1% for the quarter and 83.0% year-to-date from 82.8% and82.2% , respectively, in the prior year periods.

Product costs were 25.4% for the quarter and 25.1% year-to-date compared to 24.5% and 24.7% , respectively, in the prior year periods. The increase for thequarter was primarily due to increased commodity costs.

Payroll and benefits were 38.1% for the quarter and 39.0% year-to-date compared to 38.7% and 38.3% , respectively, in the prior year periods. The decrease for thequarter was primarily due to a 1.1 percentage point decrease in workers' compensation costs, as the current quarter included $1.3 million in favorable workers'compensation experience compared to $0.3 million of favorable workers' compensation experience in the prior year period. The increase year-to-date wasprimarily due to a 0.7 percentage point increase in labor costs resulting from minimum wage increases and a 0.1 percentage point increase in workers'compensation costs. The three quarters ended September 27, 2017 included $1.6 million in favorable workers' compensation experience, as compared to $1.9million of favorable workers' compensation experience in the prior year period.

Occupancy costs were 5.2% for the quarter and 5.3% year-to-date compared to 5.3% and 5.4% , respectively, in the prior year periods. The decreases wereprimarily related to the increases in capital leases.

21

Other operating expenses were comprised of the following amounts and percentages of company restaurant sales:




Utilities $ 3,767 3.8% $ 3,429 3.7% $ 9,873 3.4% $ 9,232 3.4%

Repairs and maintenance 1,642 1.7% 1,559 1.7% 4,972 1.7% 4,893 1.8%

Marketing 3,740 3.8% 3,500 3.8% 10,982 3.8% 10,123 3.7%

Other direct costs 4,891 5.0% 4,884 5.2% 13,717 4.7% 13,296 4.9%

Other operating expenses $ 14,040 14.3% $ 13,372 14.4% $ 39,544 13.6% $ 37,544 13.8%

Franchise Operations Franchise and license revenue and costs of franchise and license revenue were comprised of the following amounts and percentages of franchise and licenserevenue for the periods indicated:




Royalties $ 25,174 73.0% $ 25,039 71.0% $ 75,056 72.4% $ 73,694 70.4%

Initial fees 507 1.5% 757 2.1% 1,579 1.5% 2,081 2.0%

Occupancy revenue 8,788 25.5% 9,468 26.8% 26,986 26.0% 28,850 27.6%

Franchise and license revenue $ 34,469 100.0% $ 35,264 100.0% $ 103,621 100.0% $ 104,625 100.0%

Occupancy costs $ 6,343 18.4% $ 7,023 19.9% $ 19,420 18.7% $ 21,373 20.4%

Other direct costs 3,150 9.1% 3,252 9.2% 10,063 9.7% 9,664 9.2%

Costs of franchise and license revenue $ 9,493 27.5% $ 10,275 29.1% $ 29,483 28.5% $ 31,037 29.7%

During the quarter ended September 27, 2017 , royalties increase d $0.1 million , or 0.5% , primarily resulting from a 0.6% increase in domestic same-store salesand a higher average royalty rate as compared to the prior year period, partially offset by a 10 equivalent unit decrease in franchised and licensed restaurants.During the three quarters ended September 27, 2017 , royalties increase d $1.4 million , or 1.8% , primarily resulting from a higher average royalty rate ascompared to the prior year period, a three equivalent unit increase in franchised and licensed restaurants and a 0.7% increase in domestic same-store sales. Initialfees decrease d $0.3 million for the quarter and $0.5 million year-to-date as a higher number of restaurants were opened by franchisees during the prior yearperiods. The decrease in occupancy revenue of $0.7 million , or 7.2% , for the quarter and $1.9 million , or 6.5% , year-to-date was primarily the result of leaseexpirations.

Costs of franchise and license revenue decrease d $0.8 million , or 7.6% , for the quarter and decrease d $1.6 million , or 5.0% , year-to-date. Occupancy costsdecrease d $0.7 million , or 9.7% , for the quarter and $2.0 million , or 9.1% , year-to-date, primarily resulting from lease expirations. Other direct costs decrease d$0.1 million , or 3.1% , for the quarter and increased $0.4 million , or 4.1% , year-to-date. The increase for the year-to-date period primarily resulted fromincreased franchise administration costs. As a result, costs of franchise and license revenue as a percentage of franchise and license revenue decrease d to 27.5%for the quarter from 29.1% for the prior year quarter and decrease d to 28.5% year-to-date from 29.7% for the prior year period.

Other Operating Costs and Expenses

Other operating costs and expenses such as general and administrative expenses and depreciation and amortization expense relate to both company and franchiseoperations.

22

General and administrative expenses were comprised of the following:



(In thousands)

Share-based compensation $ 2,493 $ 1,775 $ 6,546 $ 5,625Other general and administrative

expenses 13,953 15,783 43,990 45,066Total general and administrative

expenses $ 16,446 $ 17,558 $ 50,536 $ 50,691

Other general and administrative expenses decrease d by $1.8 million for the quarter and $1.1 million year-to-date. The decrease for the quarter primarily resultedfrom a $1.1 million reduction in professional fees, a $0.5 million decrease in incentive compensation and $0.3 million related to market valuation changes in ournon-qualified deferred compensation plan liabilities. The decrease for the year-to-date period primarily resulted from a $2.2 million decrease in incentivecompensation. This decrease was partially offset by a $0.7 million increase in investments in personnel and a $0.5 million increase related to market valuationchanges in our non-qualified deferred compensation plan liabilities. Offsetting gains on the underlying non-qualified deferred plan investments are included as acomponent of other non-operating income, net. Share-based compensation increase d by $0.7 million for the quarter and $0.9 million year-to-date due in part to thecancellation of equity awards and subsequent issuance of cash awards to non-employee members of our Board of Directors in the 2016 period. Additionally, share-based compensation was impacted by the election to account for forfeitures as they occur, which was effective beginning in fiscal 2017. There have been no actualforfeitures during fiscal 2017.

Depreciation and amortization was comprised of the following:



(In thousands)Depreciation of property and

equipment $ 4,261 $ 4,289 $ 12,711 $ 12,568

Amortization of capital lease assets 1,021 941 3,011 2,629Amortization of intangible and other

assets 676 379 1,771 1,010Total depreciation and

amortization expense $ 5,958 $ 5,609 $ 17,493 $ 16,207

The increase in amortization of intangible and other assets is primarily due to the increase in reacquired franchise rights related to acquisitions of franchisedrestaurants during the current and prior year. Operating (gains), losses and other charges, net were comprised of the following:



(In thousands)

Pension settlement loss $ — $ — $ — $ 24,297

Software implementation costs 1,001 — 4,669 —Gains on sales of assets and

other, net (411) (77) (1,646) (764)Restructuring charges and exit

costs 40 326 436 832Operating (gains), losses and

other charges, net $ 630 $ 249 $ 3,459 $ 24,365

23

Software implementation costs of $4.7 million for the three quarters ended September 27, 2017 were the result of our investment in a new cloud-based EnterpriseResource Planning system. We expect to recognize additional costs of approximately $0.5 million during the remainder of 2017 to complete the implementation.Gains on sales of assets and other, net of $1.6 million for the three quarters ended September 27, 2017 primarily related to real estate sold to franchisees. The pre-tax pension settlement loss of $24.3 million related to the completion of the Pension Plan liquidation during the three quarters ended September 28, 2016 . Gainson sales of assets and other, net of $0.8 million for the three quarters ended September 28, 2016 primarily related to restaurants sold to franchisees.

Restructuring charges and exit costs were comprised of the following:



(In thousands)

Exit costs $ 40 $ 154 $ 366 $ 269Severance and other restructuring

charges — 172 70 563

Total restructuring and exit costs $ 40 $ 326 $ 436 $ 832

Operating income was income of $18.5 million for the quarter and $51.8 million year-to-date compared with $17.6 million and $31.0 million , respectively, forthe prior year periods. The 2016 year-to-date period was significantly impacted by the $24.3 million pre-tax settlement loss related to the Pension Plan liquidation.

Interest expense, net was comprised of the following:



(In thousands)

Interest on credit facilities $ 2,078 $ 1,158 $ 5,333 $ 3,352

Interest on interest rate swaps (30) 193 116 614

Interest on capital lease liabilities 1,470 1,287 4,286 3,389

Letters of credit and other fees 303 304 886 895

Interest income (21) (73) (85) (100)

Total cash interest 3,800 2,869 10,536 8,150Amortization of deferred financing

costs 149 149 446 445

Interest accretion on other liabilities 118 99 366 310

Total interest expense, net $ 4,067 $ 3,117 $ 11,348 $ 8,905

Interest expense, net increase d by $1.0 million for the quarter and $2.4 million year-to-date primarily due to the increased balance of our credit facility and anincrease in capital leases.

Other nonoperating income, net was $0.3 million for the quarter and $1.1 million year-to-date compared to $0.5 million and $0.6 million , respectively, for theprior year periods. The nonoperating income was primarily the result of gains on deferred compensation plan investments.

The provision for income taxes was $5.4 million for the quarter and $15.1 million year-to-date compared to $5.3 million and $14.6 million , respectively, for theprior year periods. The effective tax rate was 36.8% for the quarter and 36.3% year-to-date compared to 35.2% and 64.2% , respectively, for the prior year periods.Refer to Note 2 to our unaudited condensed consolidated financial statements set forth in Part I, Item 1 of this report for the impact of the adoption of ASU 2016-09. We expect the 2017 fiscal year effective tax rate to be between 35% and 37%. The annual effective tax rate cannot be determined until the end of the fiscalyear; therefore, the actual rate could differ from our current estimates.

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For the 2016 periods, the difference in the overall effective rate from the U.S. statutory rate was primarily due to the Pension Plan liquidation, foreign tax creditsand certain discrete items. During the three quarters ended September 28, 2016, we amended prior years’ U.S. tax returns in order to maximize a foreign tax creditin lieu of a foreign tax deduction. This created a benefit to the effective tax rate of 4.8% for the quarter and 4.6% year-to-date. In addition, during the three quartersended September 28, 2016, certain discrete items created an increase to the effective tax rate of 4.3% for the quarter and 4.7% year-to-date.

In addition to the items noted above, the 2016 rates were also impacted by the recognition of a $2.1 million tax benefit related to the $24.3 million pre-taxsettlement loss on the Pension Plan liquidation. This benefit was at a rate lower than the effective tax rate due to the previous recognition of an approximate $7.2million tax benefit in connection with the reversal of our valuation allowance in 2011. Excluding the impact of the Pension Plan liquidation, our effective incometax rate would have been 35.6% for the three quarters ended September 28, 2016.

Net income was $9.3 million for the quarter and $26.4 million year-to-date compared with $9.7 million and $8.1 million , respectively, for the prior year periods.The 2016 periods were significantly impacted by the $24.3 million pre-tax settlement loss related to the Pension Plan liquidation.

Impact of Recent Hurricanes

During the quarter ended September 27, 2017 , Hurricanes Harvey, Irma and Maria impacted approximately 25 company and 195 franchised locations in Texas,Florida, Georgia, South Carolina and Puerto Rico. However, for the quarter ended September 27, 2017 , we estimate that the overall impact to our condensedconsolidated financial statements was insignificant. During the quarter, we recorded $0.4 million in expected insurance recoveries receivable and approximately$0.1 million of losses related to fixed asset impairments and inventory write-offs. Due to significant damages to one company unit in Texas and franchisedrestaurants in Puerto Rico, we estimate lost company sales and royalties during the fourth quarter of 2017 of up to $0.4 million and $0.2 million, respectively. Anyinsurance proceeds related to lost income due to business interruption will be recorded when we settle our insurance claims.

Liquidity and Capital Resources

Our primary sources of liquidity and capital resources are cash generated from operations and borrowings under our credit facility (as described below). Principaluses of cash are operating expenses, capital expenditures and the repurchase of shares of our common stock. The following table presents a summary of our sources and uses of cash and cash equivalents for the periods indicated:



(In thousands)

Net cash provided by operating activities $ 43,525 $ 43,132

Net cash used in investing activities (19,788) (25,893)

Net cash used in financing activities (24,666) (17,384)

Decrease in cash and cash equivalents $ (929) $ (145)

Net cash flows provided by operating activities were $43.5 million for the three quarters ended September 27, 2017 compared to $43.1 million for the threequarters ended September 28, 2016 . The slight increase in cash flows provided by operating activities was primarily due to the funding of our pension liabilityduring the three quarters ended September 28, 2016 , partially offset by increased tax payments during the current year. We believe that our estimated cash flowsfrom operations for 2017 , combined with our capacity for additional borrowings under our credit facility, will enable us to meet our anticipated cash requirementsand fund capital expenditures over the next 12 months.

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Net cash flows used in investing activities were $19.8 million for the three quarters ended September 27, 2017 . These cash flows were primarily comprised ofcapital expenditures of $13.6 million and acquisitions of restaurants and real estate of $10.0 million. Cash flows for acquisitions include $4.0 million of real estateassociated with relocating two high-performing company restaurants due to the impending loss of property control and $6.0 million for the reacquisition of sevenfranchised restaurants and one former franchised restaurant, which was being remodeled and opened in the fourth quarter of fiscal 2017.

Our principal capital requirements have been largely associated with the following:



(In thousands)

Facilities $ 5,243 $ 5,615

New construction 5,208 2,958

Remodeling 1,521 4,714

Information technology 338 803

Other 1,248 525

Capital expenditures (excluding acquisitions) $ 13,558 $ 14,615

Capital expenditures and acquisitions for fiscal 2017 are expected to be approximately $32 to $34 million, including the relocation of two high-performingcompany restaurants due to the impending loss of property control, the above mentioned acquisitions of real estate and franchised restaurants and additionalacquisitions of franchised restaurants anticipated to close in the fourth quarter of fiscal 2017. Cash flows used in financing activities were $24.7 million for the three quarters ended September 27, 2017 , which included cash payments for stock repurchasesof $66.0 million , partially offset by net long-term debt borrowings of $40.8 million.

Our working capital deficit was $45.4 million at September 27, 2017 compared to $57.5 million at December 28, 2016 . The decrease in working capital deficitwas primarily related to the payout of accrued incentive compensation during the three quarters ended September 27, 2017 . We are able to operate with asubstantial working capital deficit because (1) restaurant operations and most food service operations are conducted primarily on a cash (and cash equivalent) basiswith a low level of accounts receivable, (2) rapid turnover allows a limited investment in inventories, and (3) accounts payable for food, beverages and suppliesusually become due after the receipt of cash from the related sales.

Credit Facility

As of September 27, 2017 , we had outstanding revolver loans of $261.8 million and outstanding letters of credit under the senior secured revolver of $21.5 million. These balances resulted in availability of $41.7 million under the revolving facility. Prior to considering the impact of our interest rate swaps, described below,the weighted-average interest rate on outstanding revolver loans was 3.27% as of September 27, 2017 . Taking into consideration our interest rate swaps, theweighted-average interest rate of outstanding revolver loans was 3.22% as of September 27, 2017 .

A commitment fee is paid on the unused portion of the revolving credit facility and was 0.30% as of September 27, 2017 . Borrowings under the credit facility beara tiered interest rate, which is based on the Company’s consolidated leverage ratio and was set at LIBOR plus 200 basis points as of September 27, 2017 . Thematurity date for the credit facility is March 30, 2020 .

The credit facility is available for working capital, capital expenditures and other general corporate purposes. The credit facility is guaranteed by the Company andits material subsidiaries and is secured by assets of the Company and its subsidiaries, including the stock of the Company's subsidiaries. It includes negativecovenants that are usual for facilities and transactions of this type. The credit facility also includes certain financial covenants with respect to a maximumconsolidated leverage ratio and a minimum consolidated fixed charge coverage ratio. We were in compliance with all financial covenants as of September 27, 2017.

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Refinancing of Credit Facility

On October 26, 2017, Denny's Corporation and certain of its subsidiaries refinanced our credit facility (the "Old Credit Facility") and entered into a new five-year $400 million senior secured revolver (with a $30 million letter of credit sublimit) (the “New Credit Facility”). The New Credit Facility includes an accordionfeature that would allow us to increase the size of the revolver to $450 million . A commitment fee, initially set at 0.30% , is paid on the unused portion of therevolving credit facility. Borrowings under the credit facility bear a tiered interest rate, which is based on the Company’s consolidated leverage ratio and wasinitially set at LIBOR plus 200 basis points. The maturity date for the credit facility is October 26, 2022.

The New Credit Facility was used to refinance the Old Credit Facility and will also be available for working capital, capital expenditures and other generalcorporate purposes. The New Credit Facility is guaranteed by the Company and its material subsidiaries and is secured by assets of the Company and itssubsidiaries, including the stock of the Company's subsidiaries. It includes negative covenants that are usual for facilities and transactions of this type. The NewCredit Facility also includes certain financial covenants with respect to a maximum consolidated leverage ratio and a minimum consolidated fixed charge coverageratio.

Interest Rate Hedges

We have interest rate swaps to hedge a portion of the cash flows of our floating rate debt. We designated the interest rate swaps as cash flow hedges of ourexposure to variability in future cash flows attributable to payments of LIBOR due on specific notional debt obligations.

Based on the interest rate as determined by our consolidated leverage ratio in effect as of September 27, 2017 , under the terms of the swaps, we will pay thefollowing fixed rates on the notional amounts noted:

Period Covered Notional Amount Fixed Rate

(In thousands) March 31, 2015 - March 29, 2018 $ 120,000 3.13%

March 29, 2018 - March 31, 2025 170,000 4.44%

April 1, 2025 - March 31, 2026 50,000 4.46%

As of September 27, 2017 , the fair value of the interest rate swaps was a net liability of $4.0 million , which is comprised of assets of $0.1 million recorded as acomponent of other noncurrent assets and liabilities of $4.1 million recorded as a component of other noncurrent liabilities in our Condensed Consolidated BalanceSheets.

Implementation of New Accounting Standards

With the exception of the details noted below, information regarding the implementation of new accounting standards is incorporated by reference from Note 2 toour unaudited condensed consolidated financial statements set forth in Part I, Item 1 of this report.

In regards to the adoption of ASU 2014-09, we are currently reviewing our franchise agreements to obtain the data necessary to implement the guidance, butbelieve the deferral of initial franchise fees will be in the range of $19 million to $21 million. This amount will be recorded as a cumulative effect adjustment toretained earnings and deferred revenue upon adoption at the beginning of fiscal 2018 and will be amortized into revenue over the remaining life of the relatedfranchise agreements.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

As of September 27, 2017 , the swaps effectively increased our ratio of fixed rate debt from approximately 10% of total debt to approximately 51% of total debt.We expect to reclassify approximately $1.0 million from accumulated other comprehensive loss related to our interest rate swaps during the next twelve months.This amount will be included as a component of interest expense in our Condensed Consolidated Statements of Income. For additional information related to ourinterest rate swaps, including changes in the fair value, refer to Notes 7, 8 and 14 to our unaudited condensed consolidated financial statements in Part I, Item 1 ofthis report. Based on the levels of borrowings under the credit facility at September 27, 2017 , if interest rates changed by 100 basis points, our annual cash flow and incomebefore taxes would change by approximately $1.4 million. This computation is determined by considering the impact of hypothetical interest rates on the variablerate portion of the credit facility at September 27, 2017 , taking into consideration the interest rate swaps. However, the nature and amount of our borrowings mayvary as a result of future business requirements, market conditions and other factors.

With the exception of the items noted above, there have been no material changes in our quantitative and qualitative market risks since the prior reporting period. Item 4. Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management conducted an evaluation (under thesupervision and with the participation of our President and Chief Executive Officer, John C. Miller, and our Executive Vice President, Chief AdministrativeOfficer and Chief Financial Officer, F. Mark Wolfinger) as of the end of the period covered by this Quarterly Report on Form 10-Q, of the effectiveness of ourdisclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act. Based on that evaluation, Messrs. Miller and Wolfinger each concludedthat our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed in the reports that we file orsubmit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission'srules and forms and (ii) is accumulated and communicated to our management, including Messrs. Miller and Wolfinger, as appropriate to allow timely decisionsregarding required disclosure.

During the first quarter of 2017, we implemented a new human resources and payroll system as well as new lease administration software. During the secondquarter of 2017, we introduced additional functionality and enhancements related to the new human resources and payroll system. During the third quarter of 2017,we implemented a new financial management system. These new systems resulted in significant changes to certain of our processes and procedures for internalcontrol over financial reporting. We assessed the control design during implementation and are in the process of conducting post-implementation monitoring andtesting to ensure the effectiveness of internal controls over financial reporting. There were no other changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) of theExchange Act that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control overfinancial reporting. PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Information regarding legal proceedings is incorporated by reference from Note 15 to our unaudited condensed consolidated financial statements set forth in Part I,Item 1 of this report.

Item 1A. Risk Factors

There have been no material changes in the risk factors set forth in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year endedDecember 28, 2016 .

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Purchases of Equity Securities by the Issuer The table below provides information concerning repurchases of shares of our common stock during the quarter ended September 27, 2017 .

Period

Total Number ofShares Purchased

Average Price PaidPer Share (1)

Total Number ofShares Purchased as

Part of PubliclyAnnounced Programs

(2)

Approximate DollarValue of Shares that

May Yet be PurchasedUnder the Programs (2)

(In thousands, except per share amounts)

June 29, 2017 - July 26, 2017 852 $ 11.57 852 $ 32,579

July 27, 2017 - August 23, 2017 745 11.99 745 $ 23,633

August 24, 2017 - September 27, 2017 915 11.83 915 $ 12,791

Total 2,512 $ 11.79 2,512

(1) Average price paid per share excludes commissions.(2) On May 26, 2016, we announced that our Board of Directors approved a new share repurchase program, authorizing us to repurchase up to an additional $100 million of our

common stock (in addition to prior authorizations). Such repurchases may take place from time to time on the open market (including pre-arranged stock trading plans inaccordance with the guidelines specified in Rule 10b5-1 under the Exchange Act) or in privately negotiated transactions, subject to market and business conditions. During thequarter ended September 27, 2017 , we purchased 2,512,130 shares of our common stock for an aggregate consideration of approximately $29.7 million , pursuant to the sharerepurchase program. On October 27, 2017, the Board of Directors of Denny’s Corporation approved a new share repurchase program authorizing the Company to repurchase anadditional $200 million of its common stock, in addition to repurchases previously authorized. As of October 27, 2017, the Company has approximately $7.6 million remainingavailable in its current $100 million share stock repurchase program announced in May 2016.

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Item 6. Exhibits The following are included as exhibits to this report:

Exhibit No. Description 10.1

Third Amendment to Second Amended and Restated Credit Agreement dated July 31, 2017 among Denny's Inc., as the Borrower, Denny'sCorporation, as Parent, and each of the Subsidiaries of Parent party thereto, as Guarantors, and Wells Fargo Bank, National Association, asAdministrative Agent on behalf of the Lenders (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Denny'sCorporation for the quarter ended June 28, 2017).

10.2 Denny's Corporation Amended and Restated Executive and Key Employee Severance Pay Plan. 31.1

Certification of John C. Miller, President and Chief Executive Officer of Denny's Corporation, pursuant to Rule 13a-14(a), as adopted pursuantto Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of F. Mark Wolfinger, Executive Vice President, Chief Administrative Officer and Chief Financial Officer of Denny's Corporation,pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certification of John C. Miller, President and Chief Executive Officer of Denny's Corporation, and F. Mark Wolfinger, Executive VicePresident, Chief Administrative Officer and Chief Financial Officer of Denny's Corporation, pursuant to 18 U.S.C. Section 1350, as adoptedpursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS XBRL Instance Document 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document

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https://content.edgar-online.com/ExternalLink/EDGAR/0000852772-17-000081.html?hash=9b8e890e0ff38b39d80c00845db55b636b3ecf8aa1a28570c9fd1f84a1a32fae&dest=Q22017EX101_HTM




SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersignedthereunto duly authorized.

DENNY'S CORPORATION Date: November 1, 2017 By: /s/ F. Mark Wolfinger F. Mark Wolfinger

Executive Vice President,Chief Administrative Officer andChief Financial Officer

Date: November 1, 2017 By: /s/ Jay C. Gilmore Jay C. Gilmore

Vice President,Chief Accounting Officer andCorporate Controller

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Exhibit 10.2

DENNY'S CORPORATIONAMENDED AND RESTATED

EXECUTIVE AND KEY EMPLOYEE SEVERANCE PAY PLAN

DENNY’S CORPORATIONAMENDED AND RESTATED

EXECUTIVE AND KEY EMPLOYEE SEVERANCE PAY PLAN

ARTICLE 1

PURPOSE AND TERM

1.1 Purpose . Denny’s Corporation (the “Company”) established this Denny’s Corporation Amended and RestatedExecutive and Key Employee Severance Pay Plan (the “Plan”) in order to provide transitional income to certain executive officersand key employees who are involuntarily terminated under certain conditions. The Plan supersedes all prior written or unwrittenseverance pay plans, notice pay plans, practices or programs offered to or established for participants by the Company except forindividual employment contracts, change in control agreements or other similar arrangements providing severance pay or similarbenefits. The Plan is intended to be a “welfare plan,” but not a “pension plan,” as defined in ERISA Sections 3(1) and 3(2),respectively, and the Company intends that the Plan comply with all applicable provisions of ERISA.

1.2 Term . The Plan shall generally be effective as of the Effective Date, subject to amendment from time to time inaccordance with Section 7.2. The Plan shall continue until terminated pursuant to Article 7 of the Plan.

ARTICLE 2DEFINITIONS

As used herein, the following words and phrases shall have the following meanings: 2.1 “Affiliate” means Denny’s, Inc. and any other corporation or entity (including, but not limited to, a partnership or a

limited liability company) that is affiliated with the Company through stock or equity ownership or otherwise, and is designated asan Affiliate for purposes of this Plan by the Committee.

2.2 “Base Salary” means the amount a Participant is entitled to receive as wages or salary on an annualized basis as ineffect from time to time, without reduction for any pre-tax contributions to benefit plans. Base Salary does not include bonuses,commissions, overtime pay or income from stock options, stock grants or other incentive compensation.

2.3 “Board” means the Board of Directors of the Company.

2.4 “Cause” as a reason for a Participant’s termination of employment shall mean any of the following acts by theParticipant, as determined by the Board: gross neglect of duty; prolonged absence from duty without the consent of the Company;intentionally engaging in any activity that is in conflict with or adverse to the business or other interests of the Company; willfulmisconduct, misfeasance or malfeasance of duty which is reasonably determined to be

1

detrimental to the Company; conviction of, or plea of guilty or nolo contendere, to any crime involving the personal enrichment ofthe Participant at the expense of the Company or shareholders of the Company; conviction of a felony or the conviction of any crimeinvolving dishonesty or moral turpitude.

2.5 “Change in Control” means the occurrence of any of the following events:

(a) any person becomes a “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly,of securities of the Company (not including in the securities beneficially owned by such Person any securities acquireddirectly from the Company or its Affiliates, other than in connection with the acquisition by the Company or its Affiliates ofa business) representing 30% or more of either the then outstanding Shares of Stock or the combined voting power of theCompany’s then outstanding securities; or

(b) The following individuals cease for any reason to constitute at least two-thirds (2/3) of the number of directorsthen serving on the Board: individuals who, on the Effective Date hereof, constitute the Board and any new director (otherthan a director whose initial assumption of office is in connection with an actual or threatened election contest, including butnot limited to a consent solicitation, relating to the election of directors of the Company (as such terms are used in Rule 14A-11 of the 1934 Act) whose appointment or election by the Board or nomination of election by the Company’s stockholderswas approved by a vote of at least two-thirds (2/3) of the Company’s directors then still in office who either were directors onthe Effective Date of the Plan, or whose appointment, election, or nomination for election was previously approved); or

(c) the consummation of a merger or consolidation with any other entity, other than (i) a merger or consolidationwhich would result in (A) the voting securities of the Company then outstanding immediately prior to such merger orconsolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of thesurviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securitiesunder an employee benefit plan of the Company, greater than 65% of the combined voting power of the voting securities ofthe Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, and(B) individuals described in Section 2.1(f)(ii) above constitute more than one-half of the members of the board of directors ofthe surviving entity or ultimate parent thereof; or (ii) a merger or consolidation effected to implement a recapitalization of theCompany (or similar transaction) in which no Person is or becomes the beneficial owner, directly or indirectly, of securitiesof the Company (not including in the securities beneficially owned by such Person any securities acquired directly from theCompany or its Affiliates, other than in connection with the acquisition by the Company or its Affiliates of a business)representing 30% or more of either the then outstanding shares of the Company or the combined voting power of theCompany’s then outstanding securities; or (iii) a merger or consolidation following which the record holders of the votingsecurities of the Company immediately prior to such transaction or series of

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integrated transactions continue to have substantially the same proportionate ownership in an entity which owns all orsubstantially all of the assets of the Company immediately following such transaction or series of integrated transactions; or

(d) the consummation of (i) a plan of complete liquidation or dissolution of the Company; or (ii) an agreement forthe sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition bythe Company of all or substantially all of the Company’s assets to an entity, greater than 65% of the combined voting powerof the voting securities of which are owned by Persons in substantially the same proportions as their ownership of theCompany immediately prior to such sale or disposition; or

Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred unless the circumstancesgiving rise to such Change in Control qualify as a “change in control event” under Code Section 409A and applicableregulations.

Furthermore, notwithstanding the foregoing, a Change in Control will not be deemed to have occurred by reason of adistribution of the voting securities of any of the Company's Subsidiaries to the stockholders of the Company, or by means ofan initial public offering of such securities.

2.6 “Change in Control Severance Benefits” means the benefits payable in accordance with Sections 4.2 and 4.4 of thePlan.

2.7 “Code” means the Internal Revenue Code of 1986, as amended from time to time, and includes a reference to theunderlying proposed or final regulations.

2.8 “Committee” means the Compensation and Incentives Committee of the Board.

2.9 “Company” means Denny’s Corporation, or its successor as provided in Section 8.7.

2.10 “Disability” shall mean any physical or mental condition which would qualify a Participant for a disability benefitunder the long-term disability plan maintained by the Company and applicable to that particular Participant, or if no such disabilityplan exists, “Disability” means Permanent and Total Disability as defined in Section 22(e)(3) of the Code.

2.11 “Effective Date” means January 29, 2008. The Plan was amended and restated effective as of January 25, 2011, andagain amended and restated effective as of September 18, 2013.

2.12 “Employee” means any regular, full-time or part-time employee of the Company or any Affiliate. Where the contextrequires in connection with a Participant who is employed directly by an Affiliate, the term “Company” as used herein includes suchAffiliate.

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2.13 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

2.14 “Good Reason” means, as a reason for a Participant’s resignation from employment, the occurrence of any of thefollowing without the consent of the Participant:

(a) the assignment to the Participant of duties materially inconsistent with, or a material diminution in, theParticipant’s authority, duties or responsibilities,

(b) a material reduction by the Company or an Affiliate in the Participant’s Base Salary or Target Annual Bonus(other than an overall reduction in salaries or target annual bonuses of 10% or less that affects substantially all of theCompany’s full-time employees),

(c) a material change in the geographic location at which the Participant is required to perform (it being agreed that arequired relocation of more than 50 miles shall be material), or

(d) the continuing material breach by the Company or an Affiliate of any employment agreement between theParticipant and the Company or an Affiliate after the expiration of any applicable period for cure.

(e) any failure by the Company to comply with and satisfy Section 9.7 of this Agreement.

A termination by the Participant shall not constitute termination for Good Reason unless the Participant shall firsthave delivered to the Company, not later than 90 days after the initial occurrence of an event deemed to give rise to a right toterminate for Good Reason, written notice setting forth with specificity the occurrence of such event, and there shall havepassed a reasonable time (not less than 30 days) within which the Company may take action to correct, rescind or otherwisesubstantially reverse the occurrence supporting termination for Good Reason as identified by the Participant.

2.15 “Participant” means any Employee designated by the Committee as a participant in the Plan.

2.16 “Plan” means this Denny’s Corporation Executive and Key Employee Severance Pay Plan.

2.17 “Regular Severance Benefits” means the benefits payable in accordance with Sections 4.2 and 4.4 of the Plan.

2.18 “Target Annual Bonus” means, with respect to any Participant, the Participant’s target bonus opportunity under theannual corporate incentive plan applicable to the Participant.

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2.19 “Termination Date” means the date of the termination of a Participant’s employment with the Company asdetermined in accordance with Article 6.

2.20 “Tier I Participant” means any Employee designated by the Committee as a Tier I Participant in the Plan andidentified as such in the records of the Plan maintained by the Company at any time during the term of the Plan.

2.21 Tier II Participant” means any Employee designated by the Committee as a Tier II Participant in the Plan andidentified as such in the records of the Plan maintained by the Company at any time during the term of the Plan.

ARTICLE 3ELIGIBILITY

3.1 Participation . The Committee or the Board shall designate from time to time those Employees or classes of Employeeswho are Participants in the Plan. In the event the Committee or the Board designates certain Participants by job title, position,function or responsibilities, an Employee who is appointed to such a position after the Effective Date of this Plan shall be aParticipant upon the date he or she begins his or her duties in such position, unless otherwise determined by the Committee or theBoard. Effective as of September 18, 2013, the Company’s Chief Executive Officer and all of its Executive Vice Presidents aredesignated as Tier I Participants, and all of the Company’s Senior Vice Presidents and Vice Presidents are designated as Tier IIParticipants. The list of Participants may be amended by the Committee or the Board at any time prior to a Change in Control to addor remove individual Participants or classes of Participants; provided, however, that the removal of individual Participants or classesof Participants from the Plan shall not be effective for at least 12 months after notification to the Participants of such Committee orBoard action. If a Change in Control occurs during such 12-month period, any such action to remove individual Participants orclasses of Participants shall be null and void.

3.2 Duration of Participation . Subject to Article 4 and Article 7, an Employee shall cease to be a Participant in the Plan if(i) his or her employment is terminated under circumstances in which he or she is not entitled to Severance Benefits under the termsof this Plan, or (ii) prior to a Change in Control, he or she is removed as a Participant or ceases to be among the class of employeesdesignated by the Committee or the Board as Participants. Notwithstanding the foregoing, a Participant who has terminatedemployment and is entitled to Severance Benefits under Article 4 shall remain a Participant in the Plan until the full amount of theRegular Severance Benefits or Change in Control Severance Benefits, as applicable, and any other amounts payable under the Planhave been paid to the Participant.

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ARTICLE 4SEVERANCE BENEFITS

4.1 Right to Change in Control Severance Benefits .

(a) A Participant shall be entitled to receive from the Company Change in Control Severance Benefits in theamount provided in Section 4.3 if, within the two-year period following a Change in Control, (i) the Participant’semployment with the Company or any Affiliate is terminated by the Company without Cause (other than by reason of theParticipant’s death or Disability) or (ii) the Participant’s employment is terminated by the Participant for Good Reason withina period of 180 days after the occurrence of the event giving rise to Good Reason.

(b) If a Change in Control occurs and (i) a Participant’s employment with the Company or any Affiliate wasterminated by the Company without Cause (other than by reason of the Participant’s death or Disability) prior to the date ofthe Change in Control or (ii) an action was taken with respect to the Participant prior to the date of the Change in Control thatwould have constituted Good Reason if taken after a Change in Control, and the Participant can reasonably demonstrate thatsuch termination or action, as applicable, occurred at the request of a third party who had taken steps reasonably calculated toeffect the Change in Control, then the termination or action, as applicable, will be treated for all purposes of this Plan ashaving occurred immediately following the Change in Control and such former Participant shall be entitled to the benefits ofthe Plan accordingly.

(c) Notwithstanding anything to the contrary, no Change in Control Severance Benefits shall be provided to aParticipant unless the Participant has executed and not revoked a Separation Agreement and General Release in substantiallythe form attached hereto as Exhibit A (the “Release”) within the time period set forth in the Release.

4.2 Right to Regular Severance Benefits .

(a) A Participant shall be entitled to receive from the Company Regular Severance Benefits in the amount providedin Section 4.4 if (i) the Participant’s employment with the Company or any Affiliate is terminated (a) by the Companywithout Cause (other than by reason of the Participant’s death or Disability) or (b) by the Participant for Good Reason withina period of 180 days after the occurrence of the event giving rise to Good Reason, and (ii) the Participant’s termination ofemployment does not occur within the two-year period following a Change in Control and the Participant is not otherwiseentitled to receive Change in Control Severance Benefits pursuant to Section 4.1.

(b) Notwithstanding anything to the contrary, no Regular Severance Benefits shall be provided to a Participantunless the Participant has executed and not revoked a Separation Agreement and General Release in substantially the formattached hereto as

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Exhibit A (the “Release”) within the time period set forth in the Release. Any installment payments under Section 4.4(a)(i)that would otherwise be payable prior to the effectiveness of the Release shall be accumulated and paid with the nextinstallment payment that is otherwise due following the effectiveness of the Release. In addition, with respect to anyParticipant who serves on the Company’s Board of Directors, no Regular Severance Benefits shall be provided to suchParticipant unless and until the Participant resigns as a member of the Board of Directors.

4.3 Amount of Change in Control Severance Benefits . If a Participant’s employment is terminated in circumstancesentitling him or her to Change in Control Severance Benefits as provided in Section 4.1, then:

(a) the Company shall pay to the Participant in a single lump sum cash payment on the 60th day after the TerminationDate (or such later date as may be required by Section 8.2), the aggregate of the following amounts (for purposes of Section409A of the Code, each installment shall be deemed to be a separate payment):

(i) a pro rata bonus equal to the product of (A) the higher of Participant’s Target Annual Bonus for the yearin which the Change in Control occurs or Participant’s Target Annual Bonus for the year in which the TerminationDate occurs, and (B) a fraction, the numerator of which is the number of days in the current fiscal year through theTermination Date, and the denominator of which is 365;

(ii) a severance payment equal to two times, in the case of Tier I Participants, or one times, in the case ofTier II Participants, the sum of (x) the Participant’s Base Salary (at the highest rate in effect for any period withinthree years prior to the Termination Date) and (y) the higher of Participant’s Target Annual Bonus for the year inwhich the Change in Control occurs or Participant’s Target Annual Bonus for the year in which the Termination Dateoccurs; and

(iii) with respect to Tier I Participants only, a payment equal to the full cost to provide certain group healthbenefits sponsored by the Company and maintained by the Tier I Participant on the Termination Date. The amountpayable under this Section 4.3(a)(iii) shall be calculated based on the monthly cost (including any portion of the costpaid by the employee) to provide the same level of coverage of such group health benefits maintained by the Tier IParticipant as of the Termination Date for 24 months. For purposes of this Section 4.3(a)(iii): (i) group health benefitsmeans any of the following: group medical, dental, vision, and/or prescription drug benefits, and (ii) if the grouphealth benefits are provided pursuant to an insurance contract issued by an insurance carrier to the Company, the costof such benefits shall be determined based on the monthly premium charged to the Company for such coverage on theTermination Date or, if the group health benefits are self-insured by the Company, the cost of such benefits will bethe “applicable premium” determined in accordance with Code

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Section 4980B(f)(4) and the regulations issued thereunder for such for the year in which the Termination Date occurs.The Tier I Participant will be entitled to make an election to continue group health benefits in accordance with theterms of the various group health plans.

(b) with respect to Tier II Participants only, if the Tier II Participant elects to continue participation in any group

medical, dental, vision and/or prescription drug plan benefits to which the Tier II Participant and/or the Tier II Participant’seligible dependents would be entitled under Section 4980B of the Internal Revenue Code (COBRA), then for a period not toexceed twelve (12) months the Company shall pay the excess of (i) the COBRA cost of such coverage over (ii) the amountthat the Participant would have had to pay for such coverage if he had remained employed during such period and paid theactive employee rate for such coverage, provided, however, that if the Participant becomes eligible to receive group healthbenefits under a program of a subsequent employer or otherwise (including coverage available to the Participant’s spouse),the Company’s obligation to pay any portion of the cost of health coverage as described herein shall cease, except asotherwise provided by law;

(c) with respect to Tier I Participants only, for 12 months following the Termination Date, the Participant shall beeligible for up to $20,000 of outplacement services payable by the Company directly to a provider or providers selected bythe Participant, provided, however, that the Participant must provide written notification to the Company within six monthsfollowing the Termination Date of his or her intention to utilize such outplacement services. With respect to Tier IIParticipants only, the Participant shall be eligible for outplacement services payable by the Company in accordance withCompany policy in effect as of the Termination Date. The benefits provided under this Section 4.3(c) in any one calendaryear shall not affect the amount of benefits provided in any other calendar year; the Company’s payment for such benefitsshall be made on or before December 31 of the year following the year in which the expense was incurred; and theParticipant’s rights to such benefits shall not be subject to liquidation or exchange for another benefit;

(d) all of the Participant’s equity or incentive awards outstanding on the Termination Date shall be governedby the plans under which they were granted and the agreements evidencing such awards; and

(e) to the extent not theretofore paid or provided, the Company shall timely pay or provide to the Participant BaseSalary through the Termination Date, any accrued vacation pay to the extent not theretofore paid, and any other amounts orbenefits required to be paid or provided or which the Participant is eligible to receive under any plan, program, policy orpractice or contract or agreement of the Company and its affiliated companies.

4.4 Amount of Regular Severance Benefits . If a Participant’s employment is terminated in circumstances entitling him orher to Regular Severance Benefits as provided in

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Section 4.2, then:

(a) the Company shall pay to the Participant, at the time or times specified below (or such later date as may berequired by Section 8.2), the following amounts (for purposes of Section 409A of the Code, each installment shall be deemedto be a separate payment:

(i) the Company shall continue to pay Base Salary to the Participant for a number of months following theTermination Date and execution of the Release, in accordance with the Company’s normal payroll practices, equal tothe following: (i) 12 months, in the case of all Tier I Participants and those Tier II Participants who as of theTermination Date have been employed by the Company for at least two years, or (ii) six months, in the case of Tier IIParticipants who as of the Termination Date have been employed by the Company for less than two years;

(ii) the Company shall pay to the Participant, at the same time annual bonus awards are payable to theCompany’s other executive officers, a pro rata annual bonus, in an amount equal to the product of (A) Participant’sannual bonus which he or she would have earned for the year in which the Termination Date occurs, determinedbased on the Company’s actual performance for the full fiscal year (and disregarding for this purpose any individualperformance metrics), and (B) a fraction, the numerator of which is the number of days in the current fiscal yearthrough the Termination Date, and the denominator of which is 365; and

(iii) with respect to Tier I Participants only, the Company shall pay to the Tier I Participant for a period of12 months following the Termination Date and execution of the Release, monthly payments equal to the full monthlycost to provide certain group health benefits sponsored by the Company and maintained by the Tier I Participant onthe Termination Date. The amount payable under this Section 4.4(a)(iii) shall be calculated based on the monthly cost(including any portion of the cost paid by the employee) to provide the same level of coverage of such group healthbenefits maintained by the Tier I Participant as of the Termination Date. For purposes of this Section 4.4(a)(iii): (i)group health benefits means any of the following: group medical, dental, vision, and/or prescription drug benefits, and(ii) if the group health benefits are provided pursuant to an insurance contract issued by an insurance carrier to theCompany, the cost of such benefits shall be determined based on the monthly premium charged to the Company forsuch coverage on the Termination Date or, if the group health benefits are self-insured by the Company, the cost ofsuch benefits will be the “applicable premium” determined in accordance with Code Section 4980B(f)(4) and theregulations issued thereunder for such for the year in which the Termination Date occurs. The Tier I Participant willbe entitled to make an election to continue group health benefits in accordance with the terms of the various grouphealth plans; and

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(iv) with respect to Tier II Participants only, If the Tier II Participant elects to continue participation in anygroup medical, dental, vision and/or prescription drug plan benefits to which the Tier II Participant and/or the Tier IIParticipant’s eligible dependents would be entitled under Section 4980B of the Internal Revenue Code (COBRA),then for a period not to exceed the number of months the Tier II Participant is entitled to receive Base Salarycontinuation from the Company under Section 4.4(a)(i) above, the Company shall pay the excess of (i) the COBRAcost of such coverage over (ii) the amount that the Tier II Participant would have had to pay for such coverage if hehad remained employed during such period and paid the active employee rate for such coverage, provided, however,that if the Tier II Participant becomes eligible to receive group health benefits under a program of a subsequentemployer or otherwise (including coverage available to the Tier II Participant’s spouse), the Company’s obligation topay any portion of the cost of health coverage as described herein shall cease, except as otherwise provided by law.

(b) with respect to Tier I Participants only, for 12 months following the Termination Date, the Participant shallbe eligible for up to $20,000 of outplacement services payable by the Company directly to a provider or providers selected bythe Participant, provided, however, that the Participant must provide written notification to the Company within six monthsfollowing the Termination Date of his or her intention to utilize such outplacement services. With respect to Tier IIParticipants only, the Participant shall be eligible for outplacement services payable by the Company in accordance withCompany policy in effect as of the Termination Date. The benefits provided under this Section 4.3(c) in any one calendaryear shall not affect the amount of benefits provided in any other calendar year; the Company’s payment for such benefitsshall be made on or before December 31 of the year following the year in which the expense was incurred; and theParticipant’s rights to such benefits shall not be subject to liquidation or exchange for another benefit;

(c) all of the Participant’s equity or incentive awards outstanding on the Termination Date shall be governed by theplans under which they were granted and the agreements evidencing such awards; and

(d) to the extent not theretofore paid or provided, the Company shall timely pay or provide to the Participant BaseSalary through the Termination Date, any accrued vacation pay to the extent not theretofore paid, and any other amounts orbenefits required to be paid or provided or which the Participant is eligible to receive under any plan, program, policy orpractice or contract or agreement of the Company and its affiliated companies.

4.5 Non-Duplication of Benefits . In the event that a Participant becomes entitled to receive benefits under this Plan andany such benefit duplicates a benefit that would otherwise be provided under any other plan, program, arrangement or agreement asa result of the Participant’s

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termination of employment, then the Participant shall be entitled to receive the greater of the benefit available under the Plan, on theone hand, and the benefit available under such other plan, program, arrangement or agreement, on the other.

4.6 Full Settlement; No Mitigation . The Company’s obligation to make the payments provided for under this Plan andotherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim,right or action which the Company may have against the Participant or others. In no event shall the Participant be obligated to seekother employment or take any other action by way of mitigation of the amounts payable to the Participant under any of theprovisions of this Agreement and such amounts shall not be reduced whether or not the Participant obtains other employment.

ARTICLE 5

EFFECT OF SECTIONS 280G AND 4999 OF THE CODE 5.1 Mandatory Reduction of Payments in Certain Events .

(a) Anything in this Plan to the contrary notwithstanding, in the event it shall be determined that any payment ordistribution by the Company to or for the benefit of a Participant (whether paid or payable or distributed or distributable pursuant tothe terms of this Plan or otherwise) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code (the"Excise Tax"), then, prior to the making of any Payment to the Participant, a calculation shall be made comparing (i) the net benefitto the Participant of the Payment after payment of the Excise Tax, to (ii) the net benefit to the Participant if the Payment had beenlimited to the extent necessary to avoid being subject to the Excise Tax. If the amount calculated under (i) above is less than theamount calculated under (ii) above, then the Payment shall be limited to the extent necessary to avoid being subject to the ExciseTax (the "Reduced Amount"). In that event, the Participant shall direct which Payments are to be modified or reduced.

(b) The determination of whether an Excise Tax would be imposed, the amount of such Excise Tax, and thecalculation of the amounts referred to Section 5.1(a)(i) and (ii) above shall be made by an independent, nationally recognizedaccounting firm or compensation consulting firm mutually acceptable to the Company and the Participant (the "DeterminationFirm") which shall provide detailed supporting calculations. Any determination by the Determination Firm shall be binding upon theCompany and the Participant. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initialdetermination by the Determination Firm hereunder, it is possible that Payments which the Participant was entitled to, but did notreceive pursuant to Section 5.1(a), could have been made without the imposition of the Excise Tax ("Underpayment"). In such event,the Determination Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall bepromptly paid by the Company to or for the benefit of the Participant.

(c) In the event that the provisions of Code Section 280G and 4999 or any successor provisions are repealedwithout succession, this Article 5 shall be of no further force or effect.

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ARTICLE 6TERMINATION OF EMPLOYMENT

6.1 Written Notice Required . Any purported termination of employment, whether by the Company or by the Participant,shall be communicated by written notice to the other (a “Notice of Termination”).

6.2 Termination Date . In the case of the Participant's death, the Participant's Termination Date shall be his or her date ofdeath. In all other cases, the Participant's Termination Date shall be the date of receipt of the Notice of Termination or any later datespecified therein within 60 days after receipt of the Notice of Termination.

ARTICLE 7DURATION, AMENDMENT AND TERMINATION, CLAIMS

7.1 Duration . The Plan shall become effective as of the Effective Date, and shall continue until terminated by the

Committee or the Board. Subject to Section 7.2, the Committee or the Board may terminate the Plan as of any date that is at least 12months after the date of the Committee or the Board’s action. If any Participants become entitled to any payments or benefitshereunder during such 12-month period, this Plan shall continue in full force and effect and shall not terminate or expire with respectto such Participants until after all such Participants have received such payments and benefits in full.

7.2 Amendment and Termination . Subject to the following sentence, the Plan may be amended from time to time in anyrespect by the Committee or the Board; provided, however, that any amendment that would adversely affect the rights or potentialrights of Participants shall not be effective for at least 12 months after the date of the Committee or the Board’s action; and, providedfurther, in the event that a Change in Control occurs within 12 months following an amendment to the Plan that would adverselyaffect the rights or potential rights of Participants, the amendment will not be effective. In anticipation of or in connection with orwithin three years following a Change in Control, the Plan shall not be subject to amendment, change, substitution, deletion,revocation or termination in any respect which adversely affects the rights of Participants without the consent of each Participant soaffected. For the avoidance of doubt, removal of a Participant as a Participant (other than as a result of the Participant ceasing to bean Employee), a decrease in the Participant’s Tier Level or any other reduction in payments or benefits shall be deemed to be anamendment of the Plan which adversely affects the rights of the Participant.

7.3 Form of Amendment . The form of any amendment or termination of the Plan shall be a written instrument signed by aduly authorized officer or officers of the Company, certifying that the amendment or termination has been approved by theCommittee or the Board. Subject to Sections 7.1 and 7.2 above (i) an amendment of the Plan in accordance with the terms hereofshall automatically effect a corresponding amendment to all Participants’ rights and benefits hereunder, and (ii) a termination of thePlan shall in accordance with the terms hereof

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automatically effect a termination of all Participants’ rights and benefits hereunder.

7.4 Claims Procedure .

(a) A Participant may file a claim with respect to amounts asserted to be due hereunder by filing a written claimwith the Committee specifying the nature of such claim in detail. The Committee shall notify the claimant within 60 days as towhether the claim is allowed or denied, unless the claimant receives written notice from the Committee prior to the end of the 60 dayperiod stating that special circumstances require an extension of time for a decision on the claim, in which case the period shall beextended by an additional 60 days. Notice of the Committee's decision shall be in writing, sent by mail to the Participant's lastknown address and, if the claim is denied, such notice shall (i) state the specific reasons for denial, (ii) refer to the specific provisionsof the Plan upon which such denial is based, and (iii) if applicable, describe any additional information or material necessary toperfect the claim, an explanation of why such information or material is necessary, and an explanation of the review procedure inSection 7.4(b).

(b) A claimant is entitled to request a review of any denial of his claim under Section 7.4(a). The request for reviewmust be submitted to the Committee in writing within 60 days of mailing by the Committee of notice of the denial. Absent a requestfor review within the 60 day period, the claim will be deemed conclusively denied. The claimant or his representative shall beentitled to review all pertinent documents, and to submit issues and comments orally and in writing to the Committee. The reviewshall be conducted by the Committee, which shall afford the claimant a hearing and which shall render a decision in writing within60 days of a request for a review, provided that, if the Committee determines prior to the end of such 60 day review period thatspecial circumstances require an extension of time for the review and decision of the denial, the period for review and decision onthe denial shall be extended by an additional 60 days. The claimant shall receive written notice of the Committee's review decision,together with specific reasons for the decision and reference to the pertinent provisions of the Plan.

ARTICLE 8CODE SECTION 409A

8.1 Notwithstanding anything in this Plan to the contrary, to the extent that any amount or benefit that would constitutenon-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributablehereunder by reason of a Participant’s termination of employment, such amount or benefit will not be payable or distributable to theParticipant by reason of such circumstance unless (i) the circumstances giving rise to such termination of employment meet anydescription or definition of “separation from service” in Section 409A of the Code and applicable regulations (without giving effectto any elective provisions that may be available under such definition), or (ii) the payment or distribution of such amount or benefitwould be exempt from the application of Section 409A of the Code by reason of the short-term deferral exemption or otherwise.This provision does not prohibit the vesting of any amount upon a termination of employment, however defined. If this provisionprevents the payment or distribution of any amount or benefit, such payment or

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distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “separationfrom service” or such later date as may be required by Section 8.2 below.

8.2 Notwithstanding anything in this Plan to the contrary, if any amount or benefit that would constitute non-exempt“deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable under this Plan byreason of a Participant’s separation from service during a period in which he is a Specified Employee (as defined below), then,subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relationsorder), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes):

(a) if the payment or distribution is payable in a lump sum, the Participant’s right to receive payment or distributionof such non-exempt deferred compensation will be delayed until the earlier of the Participant’s death or the first day of the seventhmonth following the Participant’s separation from service; and

(b) if the payment or distribution is payable over time, the amount of such non-exempt deferred compensation thatwould otherwise be payable during the six-month period immediately following the Participant’s separation from service will beaccumulated and the Participant’s right to receive payment or distribution of such accumulated amount will be delayed until theearlier of the Participant’s death or the first day of the seventh month following the Participant’s separation from service, whereuponthe accumulated amount will be paid or distributed to the Participant and the normal payment or distribution schedule for anyremaining payments or distributions will resume.

For purposes of this Agreement, the term “Specified Employee” has the meaning given such term in Code Section 409A andthe final regulations thereunder (“Final 409A Regulations”), provided, however , that, as permitted in the Final 409A Regulations,the Company’s Specified Employees and its application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall bedetermined in accordance with rules adopted by the Board of Directors, which shall be applied consistently with respect to allnonqualified deferred compensation arrangements of the Company, including this Plan.

ARTICLE 9MISCELLANEOUS

9.1 Legal Fees and Expenses. The Company shall reimburse all legal fees and related expenses (including the costs of

experts, evidence and counsel) reasonably and in good faith incurred by a Participant if the Participant prevails on a material issuewith respect to his or her claim for relief in an action by the Participant to obtain or enforce any right or benefit provided by thisPlan. If a Participant is entitled to recover fees and expenses under this Section 9.1, the reimbursement of an eligible expense shallbe made within 10 business days after delivery of the Participant’s respective written requests for payment accompanied with suchevidence of fees

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and expenses incurred as the Company reasonably may require, but in no event later than March 15 of the year after the year inwhich such rights are established.

9.2 Employment Status . This Plan does not constitute a contract of employment or impose on the Participant or theCompany any obligation to retain the Participant as an Employee, to change the status of the Participant’s employment, or to changethe Company’s policies regarding termination of employment.

9.3 Nature of Plan and Benefits . Participants and any other person who may have rights hereunder shall be mereunsecured general creditors of the Company with respect to a Severance Benefits due hereunder, and all amounts (other than fullyinsured benefits) shall be payable from the general assets of the Company.

9.4 Withholding of Taxes . The Company may withhold from any amount payable or benefit provided under this Plan suchFederal, state, local, foreign and other taxes as are required to be withheld pursuant to any applicable law or regulation.

9.5 No Effect on Other Benefits . Severance Benefits shall not be counted as compensation for purposes of determiningbenefits under other benefit plans, programs, policies and agreements, except to the extent expressly provided therein or herein.

9.6 Validity and Severability . The invalidity or unenforceability of any provision of the Plan shall not affect the validity orenforceability of any other provision of the Plan, which shall remain in full force and effect, and any prohibition or unenforceabilityin any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

9.7 Successors . This Plan shall bind any successor of or to the Company, its assets or its businesses (whether direct orindirect, by purchase, merger, consolidation or otherwise), in the same manner and to the same extent that the Company would beobligated under this Plan if no succession had taken place. In the case of any transaction in which a successor would not by theforegoing provision or by operation of law be bound by this Plan, the Company shall require such successor expressly andunconditionally to assume and agree to perform the Company’s obligations under this Plan, in the same manner and to the sameextent that the Company would be required to perform if no such succession had taken place. The term “Company,” as used in thisPlan, shall mean the Company as hereinbefore defined and any successor or assignee to the business or assets which by reasonhereof becomes bound by this Plan.

9.8 Assignment . This Plan shall inure to the benefit of and shall be enforceable by a Participant’s personal or legalrepresentatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If a Participant should die while anyamount is still payable to the Participant under this Plan had the Participant continued to live, all such amounts, unless otherwiseprovided herein, shall be paid in accordance with the terms of this Plan to the Participant’s estate. A Participant’s rights under thisPlan shall not otherwise be transferable or subject to lien or attachment.

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9.9 Enforcement . This Plan is intended to constitute an enforceable contract between the Company and each Participantsubject to the terms hereof.

9.10 Governing Law . To the extent not preempted by ERISA, the validity, interpretation, construction and performance ofthe Plan shall in all respects be governed by the laws of Delaware, without reference to principles of conflict of law.

9.11 Arbitration . Any dispute or controversy arising under or in connection with this Plan that cannot be mutuallyresolved by the Company and a Participant and their respective advisors and representatives shall be settled exclusively byarbitration in Atlanta, Georgia in accordance with the rules of the American Arbitration Association before one arbitrator ofexemplary qualifications and stature, who shall be selected jointly by an individual to be designated by the Company and anindividual to be selected by the Participant, or if such two individuals cannot agree on the selection of the arbitrator, who shall beselected by the American Arbitration Association. The Company shall reimburse the Participant’s reasonable legal fees if he prevailson a material issue in arbitration.

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EXHIBIT A

SEPARATION AGREEMENT AND GENERAL RELEASE

(Date Given to Employee)

This Separation Agreement and General Release (this "Agreement") is entered into by and between Denny's Corporation (togetherwith its subsidiaries and affiliates, the "Company") and the undersigned employee ("Employee").

Notice to Employee:

Under the Denny's Corporation Amended and Restated Executive and Key Employee Severance Pay Plan (the "Plan"), you areeligible to receive severance pay if you agree to waive, to the extent permitted by law, all of your potential claims against theCompany and agree to the other terms in this Separation Agreement. This means that you cannot sue or pursue any other claimagainst the Company as provided for in this release. PLEASE READ THIS DOCUMENT CAREFULLY BEFORE YOU SIGNIT. ALSO, YOU ARE ADVISED TO CONSULT AN ATTORNEY OR OTHER REPRESENTATIVE BEFORE SIGNINGTHIS DOCUMENT. YOU HAVE TWENTY-ONE (21) DAYS TO THINK ABOUT WHETHER YOU WANT TO SIGNTHIS DOCUMENT AND TO CONSULT WHOMEVER YOU WISH.

1. In consideration for signing this Separation Agreement and General Release, you are entitled to receive severance pay andbenefits under the Plan.

2. IF YOU SIGN THIS AGREEMENT, YOU ARE PERMANENTLY WAIVING AND RELEASING (GIVING UP) YOURRIGHT TO SUE THE COMPANY FOR ANY REASON PROVIDED HEREIN. YOUR WAIVER AND RELEASE WILLINCLUDE ANY RIGHTS YOU HAVE TO SUE THE COMPANY UNDER THE AGE DISCRIMINATION IN EMPLOYMENTACT, TITLE VII OF THE CIVIL RIGHTS ACT, THE AMERICANS WITH DISABILITIES ACT, STATE WRONGFULTERMINATION LAWS, AND ALL OTHER LAWS AND REGULATIONS DESCRIBED BELOW.

3. You will be waiving and releasing all claims which have arisen, whether known or unknown, that are based on acts or eventsthat have occurred up until the date you sign this Agreement.

4. Because this waiver and release involves your legal rights, you are advised to speak with an attorney before signing thisAgreement. You have twenty-one (21) days from the date listed at the top of this page to make your decision. If you have not signedthis Agreement by the end of the twenty-first (21st) day after the date listed above, you will be ineligible to receive any severancepay.

5. In addition, you will have seven (7) days from the date you sign this Agreement to revoke it. This means that if you changeyour mind for any reason after signing the Agreement, you can revoke it if you notify the Company within seven (7) days. You mustnotify the Company in

1

writing and the notice must be received by the Company within seven (7) days of the date you sign this Agreement. This Agreementwill become effective on the eighth (8th) day after you sign it (the “Effective Date”). Any revocation of this Agreement must bemade in writing and delivered within the seven-day revocation period to: Senior Vice-President of Human Resources, Denny'sCorporation, 203 East Main Street, Spartanburg, SC 29319.

Part I Release of Claims and Covenant Not to Sue.

In consideration of the severance pay from the Company set forth above, the receipt and sufficiency of which are herebyacknowledged, Employee, on behalf of himself and his or her heirs, executors, administrators, agents, and successors in interest,and/or assigns, hereby UNCONDITIONALLY RELEASES AND DISCHARGES the Company, its predecessors, successors,subsidiaries, parent corporations, assigns, joint ventures, and affiliated companies, and their respective agents, legal representatives,shareholders, attorneys, employees, officers, directors, insurers and reinsurers, and employee benefit plans (and the trustees,administrators, fiduciaries, agents, representatives, insurers and reinsurers of such plans) (collectively, the “Releasees”) from ALLCLAIMS, LIABILITIES, DEMANDS AND CAUSES OF ACTION, whether known or unknown, fixed or contingent, that he or shemay have or claim to have against Company or any of the Releasees for any reason as of the Effective Date (as defined above) to themaximum extent allowed by law. Except as provided in Part IV below, Employee further hereby AGREES NOT TO FILE ALAWSUIT or other legal claim or charge or to assert any claim against any of the Releasees that is covered by this Release ofClaims. This Release and Covenant Not To Sue includes, but is not limited to, claims arising under federal, state or local lawsprohibiting employment discrimination, claims arising under severance plans and contracts, and claims growing out of any legalrestrictions on the Company’s rights to terminate its employees or to take any other employment action, whether statutory,contractual or arising under common law or case law. Employee specifically acknowledges and agrees that he or she is releasing anyand all rights under federal, state and local employment laws including, without limitation, the Age Discrimination in EmploymentAct of 1967 (“ADEA”), as amended, 29 U.S.C. § 621, et seq ., the Civil Rights Act of 1964 (“Title VII”), as amended, 42 U.S.C. §2000e, et seq ., 42 U.S.C. § 1981, as amended, the Americans With Disabilities Act (“ADA”), as amended, 42 U.S.C. § 12101 et seq., the Rehabilitation Act of 1973, as amended, as amended, 29 U.S.C. § 701, et seq ., the Employee Retirement Income Security Actof 1974 (“ERISA”), as amended, 29 U.S.C. § 301 et seq ., the Worker Adjustment and Retraining Notification Act (“WARN”), 29U.S.C. § 2101, et seq ., the Family and Medical Leave Act of 1993 (“FMLA”), as amended, 29 U.S.C. § 2601 et seq ., the EmployeePolygraph Protection Act of 1988, 29 U.S.C. § 2001, et seq ., all other state and federal code sections and legal principles, including,without limitation, claims for defamation and slander.

Employee represents and warrants that he or she does not have any complaint, claim or action pending against Company or any ofthe Releasees.

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Part II Restrictions on Employee's Conduct.

(a) General. Employee understands and agrees that the purpose of the provisions of this Part II is to protect thelegitimate business interests of the Company, as more fully described below, and is not intended to impair or infringe uponEmployee's right to work or earn a living. Employee hereby acknowledges and agrees (i) that Employee has received good andvaluable consideration for the post-employment restrictions set forth in this Part II in the form of the compensation and benefitsprovided for in the Plan, and (ii) that the post-employment restrictions set forth in this Part II are reasonable and that they do not, andwill not, unduly impair Employee's ability to earn a living. The Company conducts its restaurant business through franchisees andDFO, LLC is restricted in hiring persons from franchisees. For avoidance of doubt and potential liability to Company, the partiesagree that Employee will not solicit anyone who works for a Person party to a franchise agreement with DFO, LLC (such Person isreferred to as a “Franchisee.”)

(b) Definitions. The following capitalized terms used in this Part IIshall have the following meanings:

"Competitive Services" means the partial or total ownership, management or operation of any restaurant or restaurant chainwithin the family dining segment, including, without limitation, the provision of consulting or advising services to any Person (asdefined herein) engaged in the ownership, management or operation of any restaurant or restaurant chain in the family diningsegment or the full-service breakfast segment, whether such services are paid or unpaid.

"Confidential Information" means all information regarding the Company, its activities, businesses or customers that is thesubject of reasonable efforts by the Company to maintain its confidentiality and that is not generally disclosed by practice orauthority to persons not employed by the Company, but that does not rise to the level of a Trade Secret (as defined herein)."Confidential Information" shall include, but is not limited to, financial plans and data concerning the Company; managementplanning information; business plans; operational methods; market studies; marketing plans or strategies; product developmenttechniques or plans; customer lists; customer files, data and financial information, details of customer contracts; current andanticipated customer requirements; identifying and other information pertaining to business referral sources; past, current andplanned research and development; business acquisition plans; and new personnel acquisition plans. "Confidential Information" shallnot include information that has become generally available to the public by the act of one who has the right to disclose suchinformation without violating any right or privilege of the Company. This definition shall not limit any definition of "confidentialinformation" or "trade secrets" or any equivalent term under state or federal law.

"Person" means any individual or any corporation, partnership, joint venture, limited liability company, association or otherentity or enterprise.

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"Principal or Representative" means a principal, owner, partner, shareholder, joint venturer, investor, member, trustee,director, officer, manager, employee, agent, representative or consultant.

"Protected Employees" means any then-current employees of the Company or any of its Franchisees who were employed bythe Company or any Franchisee at any time during Employee’s employment.

"Restricted Territory" means the United States of America.

"Restrictive Covenants" means the restrictive covenants contained in Part II of this Agreement.

"Separation Date" means the date of Employee's termination of employment for any reason whatsoever.

“Trade Secrets” means all information regarding the Company, its activities, businesses or customers, without regard toform, including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method,a technique, a drawing, a process, financial data, financial plans, product plans, distribution lists or a list of actual or potentialcustomers, advertisers or suppliers, which is not commonly known by or available to the public and which information: (A) deriveseconomic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by,other persons who can obtain economic value from its disclosure or use; and (B) is the subject of efforts that are reasonable underthe circumstances to maintain its secrecy. Without limiting the foregoing, Trade Secret means any item of confidential informationthat constitutes a “trade secret(s)” under applicable common law or statutory law.

(c) Restrictive Covenants.

(i) Restriction on Disclosure and Use of Confidential Information and Trade Secrets. Employee herebyagrees that Employee shall not, directly or indirectly, at any time reveal, divulge, or disclose to any Person not expressly authorizedby the Company any Confidential Information, and Employee shall not, directly or indirectly, at any time use or make use of anyConfidential Information in connection with any business activity other than that of the Company. At all times after the SeparationDate, Employee shall not, directly or indirectly, transmit or disclose any Trade Secret to any Person other than the Company, andshall not make use of any such Trade Secret, directly or indirectly, for himself or for any Person other than the Company. The Partiesacknowledge and agree that this Agreement is not intended to, and does not, alter either the Company’s rights or Employee’sobligations under any state or federal statutory or common law regarding trade secrets and unfair trade practices. Anything herein tothe contrary notwithstanding, Employee shall not be restricted from disclosing or using Confidential Information that is required tobe disclosed by law, court order or other legal process; provided , however , that, except as protected by Part IV below, in the eventdisclosure is required by law, Employee shall provide the Company with at least five (5) days written notice of such requirementprior to any such disclosure.

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(i) Nonsolicitation of Protected Employees. Employee agrees that during the twelve (12) monthperiod following the Separation Date, Employee shall not, directly or indirectly, on Employee's own behalf or on behalf ofany other Person, solicit or induce or attempt to solicit or induce any Protected Employee to terminate his or her employmentrelationship with the Company or any Franchisee or to enter into employment with any other Person.

(ii) Noncompetition with the Company. Employee hereby agrees that, during the twelve (12)month period following the Separation Date, Employee will not, without prior written consent of the Company, directly orindirectly, engage in, sell or otherwise provide Competitive Services within the Restricted Territory in a capacity that is thesame as or substantially similar to the capacity in which he or she was engaged by Company, whether on his or her behalf oras a Principal or Representative of any other Person; provided , however , that the provisions of this Agreement shall not bedeemed to prohibit the ownership by Employee of not more than five percent (5%) of any class of securities of anycorporation having a class of securities registered pursuant to the Securities Exchange Act of 1934, as amended.

(d) Enforcement of Restrictive Covenants.

(i) Rights and Remedies Upon Breach. In the event Employee breaches, or threatens to commita breach of, any of the provisions of the Restrictive Covenants, the Company shall have the right and remedy to enjoinEmployee, preliminarily and permanently, from violating or threatening to violate the Restrictive Covenants and to have theRestrictive Covenants specifically enforced by any court or tribunal of competent jurisdiction, it being agreed that any breachor threatened breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damageswould not provide an adequate remedy to the Company. Such right and remedy shall be independent of any others andseverally enforceable, and shall be in addition to, and not in lieu of, any other rights and remedies available to the Companyat law or in equity. Without limiting the foregoing sentence, in the event Employee breaches any of the provisions of theRestrictive Covenants, (i) Employee shall cease to have any rights to payments and benefits under the Plan, (ii) all paymentsand benefits thereunder to Employee shall cease, and (iii) Employee shall repay to the Company any payments or benefitsunder the Plan that had already been provided to Employee prior to such breach, including both cash payments and the valueof benefits continuation (calculated pursuant to Section 2.01 of the Plan).

(ii) Severability of Covenants. Employee acknowledges and agrees that the RestrictiveCovenants are reasonable and valid in time and scope and in all other respects. The covenants set forth in Part II of thisAgreement shall be considered and construed as separate and independent covenants. Should any part or provision of anycovenant be held invalid, void or unenforceable, such invalidity, voidness or unenforceability shall not render invalid, void orunenforceable any other part or provision of this Agreement.

(iii) Reformation. If any portion of any of the Restrictive Covenants is found to be invalid orunenforceable because its duration, the territory, the definition of activities or the definition of information covered isconsidered to be invalid or unreasonable in scope, the invalid or unreasonable term shall be redefined, or a new enforceableterm provided, such that

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the intent of the parties in agreeing to the provisions of Part II of this Agreement will not be impaired and the provision in questionshall be enforceable to the fullest extent of the applicable laws.

(e) Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the lawsof the State of South Carolina, without regard to principles of conflicts of laws. Employee hereby irrevocably consents to theexclusive jurisdiction of the state and federal courts of the State of South Carolina, which shall have jurisdiction to hear anddetermine any claim, cause of action or controversy arising from or relating to this Agreement.

Part III Non-Disparagement.

Employee hereby agrees that he or she shall not disparage, criticize or otherwise publish or communicate any statements oropinions that are derogatory to or could otherwise harm the business or reputation of the Company or any Franchisee, subject to PartIV below.

Part IV Exclusions.

Neither the Release of Claims and Covenant Not to Sue in Part I, the Restrictions in Part II, the Non-Disparagementobligation in Part III, nor anything else in this Agreement limits Employee’s rights to (a) initiate communications directly with,cooperate with, provide relevant information or testimony to, respond to any inquiry from, or otherwise assist in an investigation bythe Securities and Exchange Commission, the Equal Employment Opportunity Commission (“EEOC”), or any other governmentalor regulatory body or official(s) regarding a possible violation of any applicable law, rule or regulation, or (b) file a charge with theEEOC or state fair employment practices agency. Further, nothing in this Agreement requires Employee to notify the Company ofany activity protected by this paragraph.

Employee acknowledges and agrees, however, that, to the fullest extent permitted by law, Employee is waiving and releasing anyclaim or right to recover from the Company any monetary damages or any other form of personal relief based on any claim, charge,complaint or action against the Company covered by the Release of Claims set forth above. Nothing in this Agreement is intended toor shall prevent, impede or interfere with Employee’s non-waivable right to receive and fully retain a monetary award from agovernment-administered whistleblower award program for providing information directly to a government agency.

Defend Trade Secrets Act: Federal law provides certain protections to individuals who disclose a trade secret to their attorney, acourt, or a government official in certain, confidential circumstances. Specifically, federal law provides that an individual shall notbe held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret where the disclosureis made (a) in confidence to a federal, state, or local government official, either directly or indirectly, or to any attorney; or (b) solelyfor the purpose of reporting or investigating a suspected violation of law; or (c) where the disclosure is made in a complaint or otherdocument filed in lawsuit or other proceeding, if such filing is made under seal. Federal law also provides that an individual whofiles a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorneyof the

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individual and use the trade secret information in the court proceeding, if the individual (a) files any document containing a tradesecret under seal; and (b) does not disclose the trade secret, except pursuant to a court order. Nothing in this Agreement is intendedto limit any rights under such federal law.

Part V Return of Property.

Employee agrees to return immediately and warrants that he or she has returned before executing or receiving paymentpursuant to this Agreement, all documents, materials and other things in his or her possession or control relating to the Company, orthat have been in his or her possession or control at the time of or since the termination of his or her employment with the Company,without retaining any copies, summaries, abstracts, excerpts, portions, replicas or other representations thereof. Employee likewiserepresents and warrants that the Company has returned all of Employee’s personal property and that any such property is no longerin possession of the Company.

This Agreement has been executed voluntarily by the parties. The parties acknowledge that they have read this Agreementcarefully, that they have had a full and reasonable opportunity to consider this Agreement, and that they have not beenpressured or in any way coerced, threatened or intimidated into its execution.

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SIGNATURE BY EMPLOYEE

I acknowledge that I have been advised to consult with an attorney prior to signing this Agreement. I further acknowledge that theconsideration for signing this Agreement is a benefit to which I otherwise would not have been entitled had I not signed thisAgreement.

I have read this entire document and I understand and agree to each of its terms. SPECIFICALLY, I AGREE THAT BY SIGNINGTHIS DOCUMENT, I AM WAIVING MY RIGHTS TO SUE THE COMPANY AS SET FORTH ABOVE IN PART I. I alsounderstand that this is the entire Agreement between the Company and me regarding severance pay and the termination of myemployment and that no other agreements or promises about those matters, written or oral will be enforceable.

_________________________________ ____________________________(Signature of Employee) (Date Signed)

_________________________________ ____________________________(Print Employee Name) (Witness)

ACCEPTANCE BY THE COMPANY

The Company hereby enters into and accepts this Agreement as set forth above.

DENNY'S CORPORATIONBy: Name: Title:

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Exhibit 31.1

CERTIFICATION I, John C. Miller, certify that: 1. I have reviewed this report on Form 10-Q of Denny’s Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant andhave:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly duringthe period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles; c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter(the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’sinternal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’sauditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls overfinancial reporting.

Date: November 1, 2017 By: /s/ John C Miller John C. Miller President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION I, F. Mark Wolfinger, certify that: 1. I have reviewed this report on Form 10-Q of Denny’s Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange ActRules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant andhave:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly duringthe period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles; c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter(the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’sinternal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’sauditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls overfinancial reporting.

Date: November 1, 2017 By: /s/ F. Mark Wolfinger F. Mark Wolfinger Executive Vice President, Chief Administrative Officer and Chief Financial Officer

Exhibit 32.1

CERTIFICATION John C. MillerPresident and Chief Executive Officer of Denny’s Corporation and F. Mark WolfingerExecutive Vice President, Chief Administrative Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350,As Adopted Pursuant toSection 906 of the Sarbanes-Oxley Act of 2002 In connection with the Quarterly Report of Denny’s Corporation (the “Company”) on Form 10-Q for the period ended September 27, 2017 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, John C. Miller, President and Chief Executive Officer of the Company, and I, F. MarkWolfinger, Executive Vice President, Chief Administrative Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: 1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 1, 2017 By: /s/ John C. Miller John C. Miller President and Chief Executive Officer

Date: November 1, 2017 By: /s/ F. Mark Wolfinger F. Mark Wolfinger Executive Vice President, Chief Administrative Officer and Chief Financial Officer A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature thatappears in typed form within the electronic version of this written statement required by Section 906, has been provided to Denny’s Corporation and will beretained by Denny’s Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

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