serparationagreement.htm


    SEPARATION
      AGREEMENT

    (AND
      RELEASE OF CLAIMS)

    


    


    


    This
      Agreement is made the 8th day of August, 2007, by and between Denny’s, Inc. (the
“Company”) and you, Margaret L. Jenkins, regarding your separation of employment
      with the Company under the following terms and conditions.

    


    For
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, including the mutual promises and representations of the Company
      and you as set forth in this Agreement, the parties agree as
      follows:

    


    
      	
              1.  

            	
              Separation
                of Employment.  As of Friday, August 3, 2007 (the
                “Notification Date”), you are hereby notified that you will stop
                performing services on August 31, 2007 (the “Separation Date”), and that
                your employment therefore will terminate on that date and that you
                will cease to be an employee of the Company for all
                purposes.

            


    

    


    
      	
              2.  

            	
              Payment
                by Company.  You will be paid through August 31, 2007 in
                accordance with the normal biweekly payroll schedule.  In
                addition, the Company will pay you a single lump sum severance payment
                in
                the amount of $ 1,338,150, which represents 200% of your current
                base pay;
                200% of your annual target bonus (65% of your base salary); and 200%
                of
                your car allowance.  This payment will be made to you as soon as
                administratively feasible upon the expiration of your Separation
                Date and
                the expiration of the seven (7)-day revocation period, but in no
                event
                later than March 15, 2008.

            


    

    


    
      	
              3.  

            	
              Vacation
                Pay.  You will be paid for any vacation hours which you have
                earned but not used.  This payment will occur as soon as
                administratively possible after your Separation
                Date.

            


    

    


    
      	
              4.  

            	
              Career
                Continuation Assistance.  To help you transition to a new
                career, you will be provided with outplacement services for a period
                of
                eighteen (18) months by a transition services firm mutually agreed
                to by
                you and the Company.  To begin these services, you will need to
                contact Jill Van Pelt at (864)597-8879 within thirty (30) days of
                your
                Separation Date.  This benefit is available in this form only
                and is not transferable to any other benefit or
                cash.

            


    

    


    
      	
              5.  

            	
              Stock
                Options.  Subject to approval by the Board of Directors of
                Denny’s Corporation, as of the later of your Separation Date or the date
                of approval by the Board of Directors, you shall immediately become
                one
                hundred percent (100%) vested in, and eligible to exercise, all stock
                options that have been granted to you by the Company.  You will
                have the right to exercise any or all of such vested options (except
                for
                the stock options awarded to you on November 10, 2004 at an exercise
                price
                of $2.42, the “$2.42 Stock Options”) for the lesser of thirty-six (36)
                months or the remaining term of such option grant.  The $2.42
                Stock Options will be exercisable by you pursuant to the terms of
                the
                applicable underlying stock option agreement, as amended by the written
                elections with respect to such options’ exercise dates that were made by
                you to ensure that such options complied with Section 409A of the
                Internal
                Revenue Code (“Section 409A”), which are set forth below (as further
                updated to comply with the final regulations under Section
                409A):

            


    

    


    a.
The
      $2.42 Stock Options that vested
      before 2005
      (for which no 19(c) election
      was required):  Exercise in conformance
      with the original term for post-termination exercise that is stated in your
      stock option agreement, which is within 60 days after
      termination;

    


    b.  The
      $2.42 Stock Options that vested in 2005:  Per your 19(c) election
      form filed in 2005, the elected year of exercise (2009) would be accelerated
      by
      your termination; because you are a “specified employee” of the Company (as
      defined in Code section 409A(a)(2)(B)(i)), we are required to delay your first
      permitted day of option exercise until March 1, 2008 (6 months after your
      termination); you will be allowed to exercise this option on any day between
      March 1, 2008 and December 31, 2008; and

    


    c.  The
      $2.42 Stock Options that vested in 2006:  Per your 19(c) election,
      you had elected to exercise options on 90,000 shares, divided among three
      different years of exercise, 2007, 2008 and 2009.  No change is made
      in your election with respect to the 30,000 shares that you elected to exercise
      in 2007, because by the terms of your election, your service termination does
      not change that elected year of exercise.  However, in the case of the
      options you elected to exercise in 2008 and 2009, your permitted exercise
      period, which is changed because of your termination of service, is now any
      day
      between March 1, 2008 and December 31, 2008.

    


    
      	
              6.  

            	
              Medical,
                Dental & Vision Benefits.  The COBRA provision of the
                federal law allows you to remain in the Company’s group plan for medical,
                dental, and vision benefits for up to eighteen (18) months with coverage
                retroactive to your Separation Date.  After your Separation
                Date, you will receive information about the COBRA continuation of
                coverage option, including the necessary election forms, at your
                home
                address.  You must complete and return the election forms within
                sixty (60) days of your Separation Date to elect COBRA
                benefits.  COBRA premiums are generally 102% of the full benefit
                cost (employee and employer portions).  In an effort to offset
                this expense and to enhance this benefit, the Company will extend
                the
                eighteen (18) months of continued coverage to twenty-four (24) months
                and
                make a one-time payment to you equal to the difference of the full
                COBRA
                premiums and the amount you would pay for these benefits as an active
                employee.  This payment will be made at the time of your lump
                sum severance payment and will be taxed accordingly.  This
                payment will be calculated as
                follows:

            


    

    


    (Full
      COBRA premium – current active employee premiums) x 24 months = one-time
      payment

    


    
      	
              7.  

            	
              Other
                Health and Welfare Benefits.  Your basic group life
                insurance, basic accidental death and dismemberment insurance, and
                any
                supplemental life insurance coverage that you have elected for 2007
                will
                end thirty (30) days following your Separation Date.  If you
                wish to convert your coverage to a term life policy, you will need
                to
                contact the Company’s Group Benefits department at (864)597-8433 as soon
                as possible, and in any event, within the thirty (30) day period
                following
                your Separation Date.  All other benefits, including your
                long-term disability coverage, will end at 12:00 midnight on your
                Separation Date.

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              8.  

            	
              Denny’s
                Deferred Compensation Plan.  Contributions to your Denny’s
                Deferred Compensation Plan account will cease as of your Separation
                Date.  As a key employee of the Company, and as required by
                Section 409A, the payout of your Deferred Compensation Plan account
                balance must be delayed until six (6) months after your Separation
                Date.  Generally, after this six (6)-month period, you will
                receive your account balance in accordance with your payment schedule
                election.  For federal income tax purposes, Plan distributions
                are taxed as ordinary income in the year received, and they are subject
                to
                income tax withholding at the tax rate applicable in the year of
                receipt.  Distributions from the Plan may also be subject to
                state income taxes.  Please call the Plan’s administrator, The
                Newport Group, at (407)333-2905 for additional information or to
                discuss
                your options for distribution.

            


    

    


    
      	
              9.  

            	
              Company
                Property.  All Company property, such as credit cards,
                building access cards, files, computer disks, manuals, laptop computers,
                etc. must be returned before payment of any severance
                pay.

            


    

    


    
      	
              10.  

            	
              Parking
                Garage Access Card.  Your Company-provided Access Card for
                the Kennedy Street Parking Garage must be returned before payment
                of any
                severance pay.

            


    

    


    
      	
              11.  

            	
              Complete
                Release.  You understand that the benefits described in this
                Agreement are not automatically payable to every employee.  You
                have had a reasonable opportunity to carefully review and consider
                the
                benefits available to you as part of this Agreement and acknowledge
                that
                this reasonable opportunity for consideration is twenty-one (21)
                days from
                your Notification Date.  You acknowledge that you have been
                encouraged to consult with an attorney of your own choosing before
                signing
                this Agreement.  You understand the consequences of agreeing to
                the terms of this Agreement and accepting enhanced severance
                benefits.  You enter into this Agreement knowingly and
                voluntarily.  No person has pressured you or used duress to
                affect your decision.  You do not need more time to
                deliberate.

            


    

    


    
      	
              a.  

            	
              Release
                of Claims.  After careful deliberation and an opportunity to
                consult with an attorney, you certify that you are not aware of any
                facts
                or circumstances that would support a claim of discrimination against
                Denny’s, Inc. on the basis of race, color, religion, sex, national origin,
                age, disability or other protected status.  You are also not
                aware of any reason to believe Denny’s, Inc.’s offer is
                unfair.  For and in consideration of the benefits payable under
                this Agreement, you hereby irrevocably and unconditionally release,
                acquit
                and forever discharge Denny’s, Inc. and each of its stockholders,
                predecessors, successors, assigns, agents, directors, officers, employees,
                representatives, divisions, subsidiaries, affiliates (and agents,
                directors, officers, employees, representatives and attorneys of
                such
                divisions, subsidiaries and affiliates), and all persons acting by,
                through, under or in concert with any of them (collectively “Releasees”),
                from any and all charges, complaints, claims, liabilities, obligations,
                promises, agreements, controversies, damages, actions, causes of
                action,
                suits, rights, demands, costs, losses, debts, and expenses of any
                nature
                whatsoever, known or unknown, suspected or unsuspected, including,
                but not
                limited to, rights arising out of alleged violations or breaches
                of any
                contracts, express or implied, or any tort, or any legal restrictions
                on
                Denny’s, Inc.’s right to terminate employees, or any federal, state or
                other governmental statute, regulation, or ordinance, including,
                without
                limitation: (1) Title VII of the Civil Rights Act of 1964, as amended
                by the Civil Rights Act of 1991, (race, color, religion, sex, and
                national
                origin discrimination); (2) the Americans with Disabilities Act
                (disability discrimination); (3) 42 U.S.C. § 1981 (discrimination);
                (4) the Age Discrimination in Employment Act (age discrimination);
                (5) the Older Workers Benefit Protection Act (age discrimination);
                (6) the Equal Pay Act (wage discrimination); (7) the Employee
                Retirement Income Security Act (“ERISA”); (8) Section 503 of the
                Rehabilitation Act of 1973; (9) the False Claims Act (including the
                qui
                tam provision thereof); (10) the Occupational Safety and Health Act;
                (11)
                the Consolidated Omnibus Budget Reconciliation Act of 1986; (12)
                intentional or negligent infliction of emotional distress or “outrage”;
                (13) defamation; (14) interference with employment and/or
                contractual relations; (15) wrongful discharge; (16) invasion of
                privacy; and (17) breach of contract, express or implied (including
                breach
                of employment contract), (collectively “Claim” or “Claims”), which I now
                have, own or hold, or claim to have, own or hold, or which I at any
                time
                heretofore had, owned or held, or claimed to have, owned or held,
                against
                each or any of the Releasees at any time up to and including the
                later of
                your Separation Date or the date on which you sign this
                Agreement.  Without waiving any prospective or retrospective
                rights under the Family and Medical Leave Act (“FMLA”), you admit that you
                have received from Denny’s, Inc. all rights and benefits, if any,
                potentially due you pursuant to the FMLA.  It is your intent to
                release all claims which you can legally release but no more than
                that.

            


    

    


    
      	
              b.  

            	
              Waiver
                of Rights Under State Law.  You further acknowledge and
                agree that your release of claims pursuant to this Agreement covers
                any
                and all rights and benefits that you have or may have in the future,
                whether known or unknown, and you waive any and all rights under
                the laws
                of any State (expressly including, but not limited to, Section 1542
                if the
                California Civil Code) which provides as follows (or which is
                substantially similar in wording or
                effect):

            


    

    


    A
      general
      release does not extend to claims which the creditor does not know or suspect
      to
      exist in his favor at the time of executing this Agreement, which if known
      by
      him must have materially affected his settlement with the Debtor.

    


    
      	
              c.  

            	
              Covenant
                Not to Sue and Indemnification.  Except as prohibited by
                law, in consideration for the pay and benefits agreed to herein,
                you agree
                not to sue any of the Releasees on any of the released Claims or
                join as a
                party with others who may sue on any such Claims.  You hereby agree
                to indemnify and hold each and all of the Releasees harmless from
                and
                against any and all loss, costs, damages, or expenses, including,
                without
                limitation, attorneys’ fees incurred by Releasees, or any of them, arising
                out of any breach of this Agreement by you or the fact that any
                representation made herein by you was false when
                made.

            


    

    


    
      	
              d.  

            	
              No
                Claims.  You represent that you have not filed, or assigned
                to others the right to file, any complaints, charges or lawsuits
                against
                any of the Releasees with any governmental agency or any court, and
                that
                you will not file, assign to others the right to file, or make any
                further
                claims against the Releasees at any time hereafter for actions taken
                up to
                and including the later of your Separation Date or the date you sign
                this
                Agreement.  You further agree that neither you nor any person or
                organization on your behalf has filed, or assigned others the right
                to
                file, nor are there pending, any complaints, charges, or lawsuits
                against
                the Releasees with any federal, state or local governmental agency
                or
                court.  If you file, maintain or participate in any claim or
                action, in any court or agency, based wholly or partially upon Claims
                you
                have released or waived as part of this Agreement, you agree to pay
                all
                expenses and costs (including reasonable attorneys’ fees) incurred by
                Denny’s, Inc. and those associated with Denny’s, Inc. in defense of such
                Claims.

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              e.  

            	
              Age
                Discrimination in Employment Act.  You hereby acknowledge
                and agree that this Agreement and the termination of your employment
                and
                all actions taken in connection therewith are in compliance with
                the Age
                Discrimination in Employment Act (“ADEA”) and the Older Workers Benefit
                Protection Act (“OWBPA”).  By executing this Agreement, you
                acknowledge and agree that:  (a)  you understand the
                terms of this Agreement; (b) you are waiving your right to assert
                claims
                against Denny’s, Inc. and the Releasees under the ADEA; (c) you are
                waiving claims you now have or may have against Denny’s, Inc. and the
                Releasees through the later of your Separation Date or the date of
                the
                execution of this Agreement, but are not waiving rights or claims
                that may
                arise after the later of your Separation Date or the date this Agreement
                is executed; (d) you are receiving money and/or other valuable
                consideration to which you are not otherwise entitled to receive;
                (e) you
                have been advised to consult with an attorney prior to executing
                this
                Agreement; (f) you have had up to twenty-one (21) days to consider
                this
                Agreement before executing it; and, (g) you have seven (7) days after
                executing this Agreement to revoke its
                acceptance.

            


    

    


    
      	
              f.  

            	
              No
                Knowledge of Illegal Activity.  You acknowledge that you
                have no knowledge of any actions or inactions by any of the Releasees
                or
                by you that you believe could possibly constitute a basis for a claimed
                violation of any federal, state, or local law, any common law or
                any rule
                promulgated by an administrative
                body.

            


    

    


    
      	
              g.  

            	
              No
                Other Representations.  You represent and acknowledge that
                in executing this Agreement, you do not rely, and have not relied,
                upon
                any representation or statement not set forth herein made by any
                of the
                Releasees or by any of the Releasees’ agents, representatives, or
                attorneys with regard to the subject matter, basis or effect of this
                Agreement or otherwise.

            


    

    


    
      	
              12.  

            	
              Confidentiality.  You
                agree not to discuss, disclose or publicize the nature or reason
                for your
                separation or the contents of this Agreement, including the amount
                of
                monetary payments, except where reasonable business needs warrant
                disclosure.  You further agree to preserve the confidentiality
                of any and all trade secrets and other confidential information of
                the
                Company and its affiliates.  Furthermore, you acknowledge and
                understand that the Company has disclosed Confidential Information
                which,
                for purposes of this Agreement, is defined as information which is
                not
                generally known in the business or community in which the Company
                is
                engaged or may become engaged or which would logically be considered
                confidential or proprietary or which would do the Company harm if
                divulged.  Such Confidential Information includes, but is not
                limited to, knowledge concerning the Company’s trade secrets, business
                methods and procedures or employee pay and human resource
                data.  You will treat all such Confidential Information as
                having been entrusted to you solely for use in your capacity as an
                employee of the Company and will not divulge such information in
                any way
                to persons inside or outside the Company before or after your Separation
                Date.  Likewise, the Company agrees, to the best of our ability
                and unless required otherwise by law, not to discuss the nature or
                reason
                for your separation and to provide dates of your employment and position
                title only in response to any inquiries for
                references.

            


    

    


    
      	
              13.  

            	
              Claims
                or Litigation.  You agree, without additional compensation,
                to cooperate with the Company and/or its attorneys in connection
                with any
                claim or litigated matter where your assistance is reasonably required
                or
                desired.

            


    

    


    
      	
              14.  

            	
              Non-Compete
                and No Solicitation.  The parties agree that in your
                position as Senior Vice-President and Chief Marketing Officer of
                the
                Company and as a member of the Management Committee, you had broad
                supervisory and management responsibility for the Company’s marketing
                function and knowledge of its strategic
                direction.  Consequently, in consideration for the sums being
                paid to you hereunder, you agree not to--whether as director, employee,
                or
                consultant--work or consult with or for any business in the United
                States
                that competes directly with the Company, (a “Company Competitor”) for a
                period equal to the number of months you are receiving severance
                benefits
                (24 months following your Separation Date).   A Company
                Competitor shall include restaurants or restaurant chains within
                the
                family dining segment and shall specifically include, without limitation,
                IHOP, Shoney’s, Cracker Barrel, Bob Evans and any and all other similar
                local, regional, and national chain restaurants.
For
                a
                period of twenty-four (24) months following your Separation Date,
                you
                further agree that you will not solicit any employee of the Company
                in
                order to induce, entice or influence the employee to terminate his
                or her
                employment with the Company or any of its subsidiaries in order to
                work
                for you, your new employer or any company in which you or your family
                members have an economic interest.

            


    

    


    
      	
              15.  

            	
              No
                Admission of Liability.  Neither this Agreement nor the
                furnishing of any consideration hereunder shall be deemed for any
                purpose
                to be an admission by any person or entity of liability or responsibility
                for any wrongdoing.

            


    

    


    
      	
              16.  

            	
              Compliance
                with Agreement.  You acknowledge that the various promises
                and payments made by the Company to you under this Agreement are
                expressly
                conditioned upon your own compliance with the Agreement, and that
                your
                failure to comply discharges the Company from any further obligations
                under the Agreement (in addition to all other remedies available
                to the
                Company).

            


    

    


    
      	
              17.  

            	
              Understanding;
                Complete Agreement; Governing Law.  You acknowledge that you
                have been given an opportunity and encouraged by the Company to have
                whomever you see fit review this Agreement, that you understand it,
                and
                that you have signed it voluntarily.  This Agreement supersedes
                all prior verbal and written communications between the Company and
                you
                concerning your separation from employment, may not be modified except
                in
                writing signed by you and the Company, and is binding upon you and
                the
                Company and our respective heirs, successors and assigns.  Any
                legal action regarding this Agreement must be filed in South Carolina
                and
                South Carolina law shall apply.

            


    

    


    
      	
              18.  

            	
              Expiration
                of Terms.  The terms contained in this Agreement will expire
                on August 24, 2007, twenty-one (21) days following your Notification
                Date,
                unless it is signed and returned to the Company prior to that expiration
                date.

            


    

    


    
      	
              19.  

            	
              Right
                to Revoke.  This Agreement may be revoked by you for a
                period of seven (7) business days after you sign it.  (If the
                seventh day is a Saturday or Sunday, or national holiday, you will
                have
                until the next business day.)  The Agreement will not become
                effective or enforceable until the seven (7)-day revocation period
                has
                expired, and you acknowledge that notwithstanding anything to the
                contrary
                in this Agreement, the Company shall not be required to make severance
                payments to you under this Agreement unless and until this seven
                (7)-day
                period has passed without your revocation.  If you decide to
                revoke your signature within the seven (7) days, you must do so in
                writing
                delivered to me by personal delivery or certified mail, return receipt
                requested, postmarked within the seven (7)-day period, expressly
                stating
                that you are revoking your
                signature.

            


    

    


    IN
      WITNESS WHEREOF, the parties have executed this Agreement on the date and year
      first written above.

    


    
      	 	DENNY'S
              INC.	 
	 	 	 	 
	
              Date:
                August 8,
                2007

            	
              By:
                

            	/s/ Rhonda
              J. Parish	 
	 	 	 	 
	 	By:	/s/
              Margaret
              L. Jenkins