ex10_2.htm


    Exhibit
10.2


     

    
      

      Denny’s
2009 Long-Term Performance Incentive Program

       

        
          

        

      

      
         

      

      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.

      


       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      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.