Exhibit 10.2

 
DENNY'S CORPORATE LOGO [dennys.jpg]
Denny’s 2009 Long-Term Performance Incentive Program
 

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Program Concept
 
The Compensation and Incentives Committee of the Board of Directors has approved
the 2009 Long-Term Performance Incentive (LTPI) Program, an incentive
compensation program pursuant to and subject to the Denny’s Corporation 2008
Omnibus Incentive Plan.
 
Under the program, participants are granted a target number of performance
shares and a target cash award. From 0% to 200% of the target number of
performance shares and the target amount of cash may be earned based on the
results of Denny’s Total Shareholder Return (TSR), discussed further below. Once
earned, the performance shares convert to and are settled in shares of Denny’s
stock on a one-for-one basis.
 
The number of shares and the percentage of the cash target earned will be
contingent upon Denny’s TSR results as compared to its peers (refer to Peer
Group listed below).
 
Please refer to your individual award agreement for your target number of
performance shares and target cash award.
 
 
Eligibility
 
Vice Presidents and above are eligible for the 2009 performance long-term
incentive awards.  At the discretion of the Executive Committee, and with
approval by the Compensation Committee, certain Directors and Senior Directors
may be eligible for these awards based on individual performance and
contributions to the Company.
 
 
Performance Period & Vesting Schedule
 
The performance period will be the three-year fiscal period beginning January 1,
2009 and ending December 28, 2011.  Performance shares will vest and be earned
at the end of the performance period.  Participants will have no voting or
dividend rights until the shares are distributed. The cash award will also vest
and be earned at the end of the performance period.

Participants must be employed on the vesting date in order to vest in the award
(except in cases of death or disability, or otherwise as noted
below).  Termination for cause results in forfeiture of all unpaid awards,
including otherwise vested awards.

 
How Performance Is Measured
 
Performance will be measured based on the Total Shareholder Return (TSR) of
Denny’s stock compared to the Total Shareholder Returns of the stocks of Denny’s
Peer Group over the three-year performance period.  TSR combines share price
appreciation and dividends paid to show the total return to the
shareholder.  TSR will be calculated as follows:
 
TSR = (ending stock price – beginning stock price + reinvested dividends) /
beginning stock price
 
A 20-trading day average will be used to determine the beginning and ending
stock prices for Denny’s and its Peer Group.  Based on this definition, Denny’s
beginning stock price as of January 1, 2009 is $1.945.

Denny’s TSR performance ranking compared to its Peer Group determines the payout
level as shown below.
 

 
Denny’s TSR Performance Ranking vs. Peers
Payout as a % of Target
Below Threshold
< 25th %ile
0%
Threshold
25th %ile
50%
Target
50th %ile
100%
Maximum
90th %ile
200%

 
Note: Linear interpolation will be used to determine payouts which fall between
given points on this scale.

 
 
 

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Peer Group
 
Denny’s TSR will be measured against the TSR of the following twenty peer
companies:
 
Bob Evans Farms, Inc.
Brinker International
Buffalo Wild Wings Inc.
Burger King Holdings
California Pizza Kitchen Inc.
CKE Restaurants
Cracker Barrel Old Country Store Inc.
Darden Restaurants
DineEquity Inc.
Domino’s Pizza Inc.
Jack in the Box Inc.
O’Charley’s
Panera Bread Co.
Papa John’s International
Red Robin Gourmet Burgers
Ruby Tuesday, Inc.
Sonic Corp.
Steak ‘n’ Shake Co.
Texas Roadhouse Inc.
Wendy’s/Arby’s Group
 

Form and Timing of Payout, and Taxation
 
Participants will receive their earned shares and cash as soon as practicable
following the end of the performance period, but no later than January 31,
2012.   Participants will be taxed on the value of the vested shares and the
vested cash on the date of payout. All applicable federal, state, and local
taxes will be withheld from the payment due to the participant.  The closing
stock price of Denny’s stock on the last trading day preceding the date of
payout will be used to determine the taxable value of the shares.
 
It is intended that the payments under the LTPI Program shall either be exempt
from the application of, or comply with, the requirements of Section 409A of the
Internal Revenue Code.  The Program shall be construed in a manner that effects
such intent.  Nevertheless, the tax treatment of the Program is not warranted or
guaranteed.  Neither the Company, its affiliates nor their respective directors,
officers, employees or advisers (other than in his or her capacity as a
participant in the Program) shall be held liable for any taxes, interest,
penalties or other monetary amounts owed by any participant or other taxpayer as
a result of the LTPI Program.
 
 
Impact of Termination Events
 
Participation in the Plan does not constitute an offer or guarantee of
employment.  The table below shows the impact of various termination events and
a change in control:
 
Termination Event
Payout
Death or disability
· Termination due to death or disability prior to vesting will result in pro
rata vesting  of the amount earned, calculated  at the end of the quarter
following the termination due to death or disability, and paid out as soon as
administratively practicable thereafter.
· Termination due to death or disability occurring between the vesting and
payout dates will result in no change to the amount that would have been paid
had the termination event not occurred.
Termination for Cause
· Vested but unpaid and unvested awards will be forfeited.  No payout will occur
even if awards had vested.
Voluntary Termination (Resignation, Retirement)
· Vested but unpaid awards will be paid out in accordance with the regular
payout schedule.  Unvested awards will be forfeited.
Involuntary Termination Not for Cause
· Vested but unpaid awards will be paid out in accordance with the regular
payout schedule.  Unvested awards will be forfeited.
Change in Control
· Vested but unpaid awards will be paid out in accordance with the regular
payout schedule, but no later than the date of the Change in Control.  Unvested
awards will be deemed to be fully earned based on actual performance up to the
date of the Change in Control, and will be paid out as soon as practicable but
in no event sooner than 15 days or later than 60 days following the Change in
Control.

 
Impact on Other Plans
 
Awards are not considered pay for purposes of Denny’s retirement or welfare
plans. There will be no specific deferral opportunities under this plan.