|                                                          |                                   |
|---------------------------------------------------------------|----------------------------------------|
| Delaware                                                      | 13-3487402                             |
| (State or other jurisdiction ofincorporation or organization) | (I.R.S. employeridentification number) |
|                                                          |                                   |
| 203 East Main Street                                          |
| Spartanburg, South Carolina 29319-9966                        |
| (Address of principal executive offices)                      |
| (Zip Code)                                                    |

|            Title of each class          | Name of each exchange on which registered |
|-----------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------|
| $.01 Par Value, Common Stock                                                                                                      | The Nasdaq Stock Market                   |

| Large accelerated filer | o      | Accelerated filer | þ | Non-accelerated filer                        | o      | Smaller reporting company | o      |
|-------------------------|--------|-------------------|--------|----------------------------------------------|--------|---------------------------|--------|
|                    |   |              |   | (Do not check if a smallerreporting company) |   |                      |   |

----

|                                             |                                                                                                                                                      | Page   |
|--------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|  PART I                                |                                                                                                                                                      |
|                                             |                                                                                                                                                      |   |
|                                             |  Item 1.      Business                                                                                                           | 1      |
|                                             |                                                                                                                                                      |   |
|                                             |  Item 1A.   Risk Factors                                                                                                                   | 5      |
|                                             |                                                                                                                                                      |   |
|                                             |  Item 1B.   Unresolved Staff Comments                                                                                                      | 9      |
|                                             |                                                                                                                                                      |   |
|                                             |  Item 2.      Properties                                                                                                         | 10     |
|                                             |                                                                                                                                                      |   |
|                                             |  Item 3.      Legal Proceedings                                                                                                  | 11     |
|                                             |                                                                                                                                                      |   |
|                                             | Item 4.       Reserved                                                                                                      | 11     |
|                                             |                                                                                                                                                      |
|  PART II                                    |                                                                                                                                                      |
|                                             |                                                                                                                                                      |   |
|                                             |  Item 5.      Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 11     |
|                                             |                                                                                                                                                      |   |
|                                             |  Item 6.      Selected Financial Data                                                                                            | 14     |
|                                             |                                                                                                                                                      |   |
|                                             |  Item 7.      Management’s Discussion and Analysis of Financial Condition and Results of Operations                   | 15     |
|                                             |                                                                                                                                                      |   |
|                                             |  Item 7A.   Quantitative and Qualitative Disclosures About Market Risk                                                                | 27     |
|                                             |                                                                                                                                                      |   |
|                                             |  Item 8.      Financial Statements and Supplementary Data                                                                   | 27     |
|                                             |                                                                                                                                                      |   |
|                                             |  Item 9.      Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                          | 27     |
|                                             |                                                                                                                                                      |   |
|                                             |  Item 9A.   Controls and Procedures                                                                                                        | 28     |
|                                             |                                                                                                                                                      |   |
|                                             |  Item 9B.    Other Information                                                                                                        | 30     |
|                                             |                                                                                                                                                      |
|  PART III                                   |                                                                                                                                                      |
|                                             |                                                                                                                                                      |   |
|                                             |  Item 10.    Directors, Executive Officers and Corporate Governance                                                                   | 30     |
|                                             |                                                                                                                                                      |   |
|                                             |  Item 11.    Executive Compensation                                                                                                        | 30     |
|                                             |                                                                                                                                                      |   |
|                                             |  Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                           | 30     |
|                                             |                                                                                                                                                      |   |
|                                             |  Item 13.    Certain Relationships and Related Transactions, and Director Independence                                                | 30     |
|                                             |                                                                                                                                                      |   |
|                                             |  Item 14.    Principal Accounting Fees and Services                                                                                   | 30     |
|                                             |                                                                                                                                                      |
|  PART IV                                    |                                                                                                                                                      |
|                                             |                                                                                                                                                      |   |
|                                             |  Item 15.    Exhibits and Financial Statement Schedules                                                                               | 30     |
|                                             |                                                                                                                                                      |
|  Index to Consolidated Financial Statements | F-1                                                                                                                                                       |
|                                             |                                                                                                                                                      |
|  Signatures                                 |                                                                                                                                                      |

----

PART I

Item 1.     Business

----

|                                                     |   | 2010   |    |   | 2009   |   |    | 2008   |   |   | 2007    |   |   | 2006   |    |
|----------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|
| Company-owned restaurants, beginning of period           |   |   | 233     |   |   |   | 315     |   |   |   | 394     |   |   |   | 521     |   |   |   | 543 |   |
| Units opened                                             |   |   | 24      |   |   |   | 1       |   |   |   | 3       |   |   |   | 5       |   |   |   | 3 |   |
| Units relocated                                          |   |   | 1       |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Units acquired from franchisees                          |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 1       |   |   |   | 1 |   |
| Units sold to franchisees                                |   |   | (24     | )      |   |   | (81     | )      |   |   | (79     | )      |   |   | (130    | ) |   |   | — |   |
| Units closed (including units relocated)                 |   |   | (2      | )      |   |   | (2      | )      |   |   | (3      | )      |   |   | (3      | ) |   |   | (26 | ) |
| End of period                                            |   |   | 232     |   |   |   | 233     |   |   |   | 315     |   |   |   | 394     |   |   |   | 521 |   |
|                                                     |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Franchised and licensed restaurants, beginning of period |   |   | 1,318   |   |   |   | 1,226   |   |   |   | 1,152   |   |   |   | 1,024   |   |   |   | 1,035 |   |
| Units opened                                             |   |   | 112     |   |   |   | 39      |   |   |   | 31      |   |   |   | 18      |   |   |   | 17 |   |
| Units relocated                                          |   |   | 4       |   |   |   | 3       |   |   |   | 1       |   |   |   | 4       |   |   |   | 1 |   |
| Units acquired by Company                                |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (1      | ) |   |   | (1 | ) |
| Units purchased from Company                             |   |   | 24      |   |   |   | 81      |   |   |   | 79      |   |   |   | 130     |   |   |   | — |   |
| Units closed (including units relocated)                 |   |   | (32     | )      |   |   | (31     | )      |   |   | (37     | )      |   |   | (23     | ) |   |   | (28 | ) |
| End of period                                            |   |   | 1,426   |   |   |   | 1,318   |   |   |   | 1,226   |   |   |   | 1,152   |   |   |   | 1,024 |   |
| Total restaurants, end of period                         |   |   | 1,658   |   |   |   | 1,551   |   |   |   | 1,541   |   |   |   | 1,546   |   |   |   | 1,545 |   |

|                |   | Franchisees |   |   | Percentage of Franchisees |   |   | Restaurants |   |   | Percentage of Restaurants |   |
|--------------------------|--------|-------------|--------|--------|---------------------------|--------|--------|-------------|--------|--------|---------------------------|--------|
| One                      |   |        | 93     |   |                      |   | 35.0   | %           |   |   | 93                        |   |   |   | 6.5 | % |
| Two to five              |   |        | 111    |   |                      |   | 41.7   | %           |   |   | 325                       |   |   |   | 22.8 | % |
| Six to ten               |   |        | 31     |   |                      |   | 11.7   | %           |   |   | 224                       |   |   |   | 15.7 | % |
| Eleven to fifteen        |   |        | 11     |   |                      |   | 4.1    | %           |   |   | 143                       |   |   |   | 10.0 | % |
| Sixteen to thirty        |   |        | 12     |   |                      |   | 4.5    | %           |   |   | 269                       |   |   |   | 18.9 | % |
| Thirty-one and over |   |        | 8      |   |                      |   | 3.0    | %           |   |   | 372                       |   |   |   | 26.1 | % |
| Total                    |   |        | 266    |   |                      |   | 100.0  | %           |   |   | 1,426                     |   |   |   | 100.0 | % |

----

| • | demographics;                                  |
|---------|------------------------------------------------|
| • | traffic patterns;                              |
| • | visibility;                                    |
| • | building constraints;                          |
| • | competition;                                   |
| • | environmental restrictions; and                |
| • | proximity to high-traffic consumer activities. |

----

----

|  Name        |   | Age    |   | Current Principal Occupation or Employment and Five-Year Employment History                                                                                                                                                                                                                                                                                                                                                          |
|-------------------|--------|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Frances L. Allen  |   | 48     |   | Executive Vice President and Chief Marketing Officer of Denny's (July, 2010-present); Chief Marketing Officer of Dunkin' Donuts, USA (2007-2009); Vice President, Marketing of Sony Ericsson Mobile Communication (2004-2007).                                                                                                                                                                                                       |
|              |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| John C. Miller    |   | 55     |   | Chief Executive Officer and President of Denny’s (February, 2011-present); Chief Executive Officer and President of Taco Bueno Restaurants, Inc. (an operator and franchisor of quick service Mexican eateries) (2005 - February, 2011);  President of Romano's Macaroni Grill (1997-2004).                                                                                                                          |
|              |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Robert Rodriguez  |   | 58     |   | Executive Vice President and Chief Operating Officer of Denny's (September, 2010-present); President and Chief Operating Officer of Pick Up Stix (a multi-divisional franchise company in the Asian quick casual segment) (2008-2010); President of Dunkin' Donuts (2004-2008).                                                                                                                                                      |
|              |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| F. Mark Wolfinger |   | 55     |   | Executive Vice President and Chief Administrative Officer of Denny’s (April, 2008-present); Executive Vice President, Growth Initiatives of Denny's (October, 2006-April, 2008); Chief Financial Officer of Denny’s (2005-present); Senior Vice President of Denny's (2005-October, 2006); Executive Vice President and Chief Financial Officer of Danka Business Systems (a document imaging company) (1998-2005). |

Item 1A.     Risk Factors

----

| • | consumer tastes;                                              |
|---------|---------------------------------------------------------------|
| • | consumer spending habits;                                     |
| • | global, national, regional and local economic conditions; and |
| • | demographic trends.                                           |

| • | traffic patterns;                                       |
|---------|---------------------------------------------------------|
| • | demographic considerations; and                         |
| • | the type, number and location of competing restaurants. |

| • | poor food quality;                         |
|---------|--------------------------------------------|
| • | food-related illness;                      |
| • | injury; and                                |
| • | other health concerns or operating issues. |

| • | inflation;                                                                                                                                                    |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | increased food costs;                                                                                                                                         |
| • | increased energy costs;                                                                                                                                       |
| • | labor and employee benefits costs (including increases in minimum hourly wage and employment tax rates and health care and workers’ compensation cost); |
| • | regional weather conditions; and                                                                                                                              |
| • | the availability of experienced management and hourly employees.                                                                                              |

| • | prevailing economic conditions;             |
|---------|---------------------------------------------|
| • | energy costs, especially gasoline prices;   |
| • | levels of employment;                       |
| • | salaries and wage rates;                    |
| • | consumer confidence; and                    |
| • | consumer perception of economic conditions. |

----

| • | costs and availability of capital for the Company and/or franchisees;      |
|---------|----------------------------------------------------------------------------|
| • | competition for restaurant sites;                                          |
| • | negotiation of favorable purchase or lease terms for restaurant sites;     |
| • | inability to obtain all required governmental approvals and permits;       |
| • | developed restaurants not achieving the expected revenue or cash flow; and |
| • | general economic conditions.                                               |

| • | restaurant location;                                         |
|---------|--------------------------------------------------------------|
| • | number and location of competing restaurants;                |
| • | food quality and value;                                      |
| • | training, courtesy and hospitality standards;                |
| • | availability of and quality of staff;                        |
| • | dietary trends, including nutritional content;               |
| • | quality and speed of service;                                |
| • | attractiveness and repair and maintenance of facilities; and |
| • | the effectiveness of marketing and advertising programs.     |

----

| • | health;                                                                                |
|---------|----------------------------------------------------------------------------------------|
| • | sanitation;                                                                            |
| • | land use, sign restrictions and environmental matters;                                 |
| • | safety;                                                                                |
| • | the sale of alcoholic beverages; and                                                   |
| • | hiring and employment practices, including minimum wage laws and fair labor standards. |

| • | make it more difficult for us to satisfy our obligations with respect to our indebtedness;                                                                                                                                                                                                                 |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | require us to continue to dedicate a substantial portion of our cash flow from operations to pay interest and principal on our indebtedness, which would reduce the availability of our cash flow to fund future working capital, capital expenditures, acquisitions and other general corporate purposes; |
| • | increase our vulnerability to general adverse economic and industry conditions;                                                                                                                                                                                                                            |
| • | limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;                                                                                                                                                                                       |
| • | restrict us from making strategic acquisitions or pursuing business opportunities;                                                                                                                                                                                                                         |
| • | place us at a competitive disadvantage compared to our competitors that may have less indebtedness; and                                                                                                                                                                                                    |
| • | limit our ability to borrow additional funds.                                                                                                                                                                                                                                                              |

----

| • | incur additional indebtedness;                                                   |
|---------|----------------------------------------------------------------------------------|
| • | pay dividends or make distributions or certain other restricted payments;        |
| • | make certain investments;                                                        |
| • | create dividend or other payment restrictions affecting restricted subsidiaries; |
| • | issue or sell capital stock of restricted subsidiaries;                          |
| • | guarantee indebtedness;                                                          |
| • | enter into transactions with stockholders or affiliates;                         |
| • | create liens;                                                                    |
| • | sell assets and use the proceeds thereof;                                        |
| • | engage in sale-leaseback transactions; and                                       |
| • | enter into certain mergers and consolidations.                                   |

Item 1B.     Unresolved Staff Comments

----

Item 2.     Properties

|                       |   | 2010          |    |   | 2009                  |   |
|----------------------------|--------|---------------|---------|--------|-----------------------|--------|
| State/Country              |   | Company-Owned |    |   | Franchised / Licensed |   |   | Total |   |   | Company-Owned |   |   | Franchised / Licensed |   |   | Total |   |
| Alabama                    |   |          | — |   |                  |   | 4 |   |   |   | 4 |   |   |   | — |   |   |   | 3 |   |   |   | 3 |   |
| Alaska                |   |          | — |   |                  |   | 3 |   |   |   | 3 |   |   |   | — |   |   |   | 3 |   |   |   | 3 |   |
| Arizona               |   |          | 10      |   |                  |   | 68 |   |   |   | 78 |   |   |   | 18 |   |   |   | 58 |   |   |   | 76 |   |
| Arkansas              |   |          | — |   |                  |   | 9 |   |   |   | 9 |   |   |   | — |   |   |   | 9 |   |   |   | 9 |   |
| California            |   |          | 74      |   |                  |   | 346 |   |   |   | 420 |   |   |   | 80 |   |   |   | 328 |   |   |   | 408 |   |
| Colorado              |   |          | 8       |   |                  |   | 19 |   |   |   | 27 |   |   |   | 7 |   |   |   | 19 |   |   |   | 26 |   |
| Connecticut           |   |          | — |   |                  |   | 8 |   |   |   | 8 |   |   |   | — |   |   |   | 8 |   |   |   | 8 |   |
| Delaware              |   |          | 1       |   |                  |   | — |   |   |   | 1 |   |   |   | 1 |   |   |   | — |   |   |   | 1 |   |
| District of Columbia  |   |          | — |   |                  |   | 1 |   |   |   | 1 |   |   |   | — |   |   |   | 1 |   |   |   | 1 |   |
| Florida               |   |          | 22      |   |                  |   | 136 |   |   |   | 158 |   |   |   | 22 |   |   |   | 132 |   |   |   | 154 |   |
| Georgia               |   |          | 1       |   |                  |   | 15 |   |   |   | 16 |   |   |   | — |   |   |   | 14 |   |   |   | 14 |   |
| Hawaii                |   |          | 6       |   |                  |   | 3 |   |   |   | 9 |   |   |   | 5 |   |   |   | 3 |   |   |   | 8 |   |
| Idaho                 |   |          | — |   |                  |   | 9 |   |   |   | 9 |   |   |   | — |   |   |   | 7 |   |   |   | 7 |   |
| Illinois              |   |          | 19      |   |                  |   | 38 |   |   |   | 57 |   |   |   | 17 |   |   |   | 35 |   |   |   | 52 |   |
| Indiana               |   |          | 1       |   |                  |   | 36 |   |   |   | 37 |   |   |   | 1 |   |   |   | 32 |   |   |   | 33 |   |
| Iowa                  |   |          | — |   |                  |   | 3 |   |   |   | 3 |   |   |   | — |   |   |   | 1 |   |   |   | 1 |   |
| Kansas                |   |          | — |   |                  |   | 8 |   |   |   | 8 |   |   |   | — |   |   |   | 8 |   |   |   | 8 |   |
| Kentucky              |   |          | 8       |   |                  |   | 7 |   |   |   | 15 |   |   |   | 6 |   |   |   | 6 |   |   |   | 12 |   |
| Louisiana             |   |          | 1       |   |                  |   | 2 |   |   |   | 3 |   |   |   | 1 |   |   |   | 1 |   |   |   | 2 |   |
| Maine                 |   |          | — |   |                  |   | 6 |   |   |   | 6 |   |   |   | — |   |   |   | 6 |   |   |   | 6 |   |
| Maryland              |   |          | 3       |   |                  |   | 21 |   |   |   | 24 |   |   |   | 3 |   |   |   | 20 |   |   |   | 23 |   |
| Massachusetts         |   |          | — |   |                  |   | 6 |   |   |   | 6 |   |   |   | — |   |   |   | 6 |   |   |   | 6 |   |
| Michigan              |   |          | 6       |   |                  |   | 16 |   |   |   | 22 |   |   |   | 9 |   |   |   | 13 |   |   |   | 22 |   |
| Minnesota             |   |          | — |   |                  |   | 13 |   |   |   | 13 |   |   |   | — |   |   |   | 14 |   |   |   | 14 |   |
| Mississippi           |   |          | — |   |                  |   | 2 |   |   |   | 2 |   |   |   | — |   |   |   | 1 |   |   |   | 1 |   |
| Missouri              |   |          | 7       |   |                  |   | 32 |   |   |   | 39 |   |   |   | 4 |   |   |   | 30 |   |   |   | 34 |   |
| Montana               |   |          | — |   |                  |   | 5 |   |   |   | 5 |   |   |   | — |   |   |   | 4 |   |   |   | 4 |   |
| Nebraska              |   |          | — |   |                  |   | 3 |   |   |   | 3 |   |   |   | — |   |   |   | 1 |   |   |   | 1 |   |
| Nevada                |   |          | 8       |   |                  |   | 24 |   |   |   | 32 |   |   |   | 8 |   |   |   | 22 |   |   |   | 30 |   |
| New Hampshire         |   |          | — |   |                  |   | 3 |   |   |   | 3 |   |   |   | — |   |   |   | 3 |   |   |   | 3 |   |
| New Jersey            |   |          | 3       |   |                  |   | 5 |   |   |   | 8 |   |   |   | 2 |   |   |   | 8 |   |   |   | 10 |   |
| New Mexico            |   |          | — |   |                  |   | 26 |   |   |   | 26 |   |   |   | — |   |   |   | 24 |   |   |   | 24 |   |
| New York              |   |          | 1       |   |                  |   | 48 |   |   |   | 49 |   |   |   | 1 |   |   |   | 42 |   |   |   | 43 |   |
| North Carolina        |   |          | — |   |                  |   | 20 |   |   |   | 20 |   |   |   | — |   |   |   | 19 |   |   |   | 19 |   |
| North Dakota          |   |          | — |   |                  |   | 4 |   |   |   | 4 |   |   |   | — |   |   |   | 4 |   |   |   | 4 |   |
| Ohio                  |   |          | 3       |   |                  |   | 35 |   |   |   | 38 |   |   |   | 4 |   |   |   | 28 |   |   |   | 32 |   |
| Oklahoma              |   |          | — |   |                  |   | 16 |   |   |   | 16 |   |   |   | — |   |   |   | 13 |   |   |   | 13 |   |
| Oregon                |   |          | — |   |                  |   | 24 |   |   |   | 24 |   |   |   | — |   |   |   | 24 |   |   |   | 24 |   |
| Pennsylvania          |   |          | 18      |   |                  |   | 22 |   |   |   | 40 |   |   |   | 17 |   |   |   | 19 |   |   |   | 36 |   |
| Rhode Island          |   |          | — |   |                  |   | 2 |   |   |   | 2 |   |   |   | — |   |   |   | 2 |   |   |   | 2 |   |
| South Carolina        |   |          | — |   |                  |   | 16 |   |   |   | 16 |   |   |   | — |   |   |   | 14 |   |   |   | 14 |   |
| South Dakota          |   |          | — |   |                  |   | 3 |   |   |   | 3 |   |   |   | — |   |   |   | 2 |   |   |   | 2 |   |
| Tennessee             |   |          | 2       |   |                  |   | 4 |   |   |   | 6 |   |   |   | 1 |   |   |   | 3 |   |   |   | 4 |   |
| Texas                 |   |          | 19      |   |                  |   | 157 |   |   |   | 176 |   |   |   | 20 |   |   |   | 140 |   |   |   | 160 |   |
| Utah                  |   |          | — |   |                  |   | 23 |   |   |   | 23 |   |   |   | — |   |   |   | 21 |   |   |   | 21 |   |
| Vermont               |   |          | — |   |                  |   | 2 |   |   |   | 2 |   |   |   | — |   |   |   | 2 |   |   |   | 2 |   |
| Virginia              |   |          | 10      |   |                  |   | 20 |   |   |   | 30 |   |   |   | 6 |   |   |   | 19 |   |   |   | 25 |   |
| Washington            |   |          | — |   |                  |   | 46 |   |   |   | 46 |   |   |   | — |   |   |   | 50 |   |   |   | 50 |   |
| West Virginia         |   |          | — |   |                  |   | 2 |   |   |   | 2 |   |   |   | — |   |   |   | 2 |   |   |   | 2 |   |
| Wisconsin             |   |          | — |   |                  |   | 18 |   |   |   | 18 |   |   |   | — |   |   |   | 17 |   |   |   | 17 |   |
| Wyoming                    |   |          | 1       |   |                  |   | — |   |   |   | 1 |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Guam                  |   |          | — |   |                  |   | 2 |   |   |   | 2 |   |   |   | — |   |   |   | 2 |   |   |   | 2 |   |
| Puerto Rico           |   |          | — |   |                  |   | 11 |   |   |   | 11 |   |   |   | — |   |   |   | 11 |   |   |   | 11 |   |
| Canada                |   |          | — |   |                  |   | 58 |   |   |   | 58 |   |   |   | — |   |   |   | 49 |   |   |   | 49 |   |
| Other International   |   |          | — |   |                  |   | 16 |   |   |   | 16 |   |   |   | — |   |   |   | 15 |   |   |   | 15 |   |
| Total                 |   |          | 232     |   |                  |   | 1,426 |   |   |   | 1,658 |   |   |   | 233 |   |   |   | 1,318 |   |   |   | 1,551 |   |

----

|                               |   | Company-Owned Units |   |   | Franchised Units |   |    | Total  |   |
|------------------------------------|--------|--------------------------|--------|--------|------------------|--------|---------|--------|--------|
| Own land and building         |   |                     | 51     |   |             |   | 41      |   |   |   | 92 |   |
| Lease land and own building   |   |                     | 16     |   |             |   | — |   |   |   | 16 |   |
| Lease both land and building  |   |                     | 165    |   |             |   | 374     |   |   |   | 539 |   |
|                               |   |                     | 232    |   |             |   | 415     |   |   |   | 647 |   |

Item 3.     Legal Proceedings

Item 4.     Reserved

PART II

Item 5.     Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

|                 |   | High   |   |   | Low    |   |
|----------------------|--------|--------|--------|--------|--------|--------|
| 2010                 |   |   |   |   |   |   |
| First quarter   |   | $      | 3.99   |   |   | $      | 2.16 |   |
| Second quarter  |   |   | 3.99   |   |   |   | 2.45 |   |
| Third quarter   |   |   | 2.98   |   |   |   | 2.29 |   |
| Fourth quarter  |   |   | 3.84   |   |   |   | 2.93 |   |
|                 |   |   |   |   |   |   |   |   |
| 2009                 |   |   |   |   |   |   |   |   |
| First quarter   |   | $      | 2.23   |   |   | $      | 1.15 |   |
| Second quarter  |   |   | 3.10   |   |   |   | 1.60 |   |
| Third quarter   |   |   | 2.87   |   |   |   | 2.07 |   |
| Fourth quarter  |   |   | 3.02   |   |   |   | 2.14 |   |

| · | a $10 million amount that can be used immediately or from time to time during the term of the facility subject to a reduction for the use of such amount for certain investments and capital expenditures;  |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | starting in 2011, an annual aggregate amount equal to $0.05 times the number of outstanding shares of Common Stock, that may not be carried forward to a future year if unused; and |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | starting in 2011, an annual amount based on Excess Cash Flow, as defined by the Credit Agreement, with the percentage available for any dividend or stock repurchase either set at 50% or 75% of said Excess Cash Flow based on achievement of certain financial ratios with the amount carried forward to future years if unused. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Period                       |   |  Total Number of Shares Purchased   |   |   |    Average Price Paid Per Share |   |   | Total Number of Shares Purchased as Part of Publicly Announced Programs (1)(2) |   |   | Maximum Number of Shares that May Yet be Purchased Under the Program (2) |   |
|------------------------------|--------|------------------------------------------|--------|--------|-------------------------------------------|--------|--------|--------------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------------------|--------|
|                         |   | (In thousands, except per share amounts) |   |   |
| December 2010                |   |                                     | 1,037  |   |                                      | $      | 3.72   |                                                                           |   |   | 1,037                                                                         |   |   |   | 1,963 |   |
|    Total 2010 |   |                                     | 1,037  |   |                                      | $      | 3.72   |                                                                           |   |   | 1,037                                                                         |   |   |   | 1,963 |   |

| (1) | On November 9, 2010, we announced that our Board of Directors had approved the repurchase of 3 million shares of Common Stock, which may take place from time to time on the open market (including in pre-arranged stock trading plans in accordance with the guidelines specified in Rule 10b5-1 under the Securities Exchange Act of 1934) or through negotiated transactions, subject to market and business conditions. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | As of December 29, 2010, we had purchased 1,036,800 share of Common Stock, for aggregate consideration of approximately $3.9 million, pursuant to the share repurchase program, leaving an additional 1,963,200 shares remaining authorized for purchase under the program. Our share repurchase program expires December 31, 2011.                                                                                               |

| Plan category                                                                      |   | Number of securities to be issued upon exercise of outstanding options, warrants and rights |      |   | Weighted-average exercise price of outstanding options, warrants and rights |   |   | Number of securities remaining available for future issuance under equity compensation plans |   |
|------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|-----------|--------|-----------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------|--------|
| Equity compensation plans approved by     security holders     |   |                                                                                        | 7,190,216 | (1)    |                                                                        | $      | 2.74   |                                                                                         |   |   | 2,390,014 | (2) |
| Equity compensation plans not approved by     security holders |   |                                                                                        | 650,000   | (3)    |                                                                        |   | 3.20   |                                                                                         |   |   | 850,000 | (4) |
| Total                                                                              |   |                                                                                        | 7,840,216 |   |                                                                        | $      | 2.76   |                                                                                         |   |   | 3,240,014 |   |

| (1)    | Includes shares issuable pursuant to the grant or exercise of awards under the Denny’s Corporation 2008 Omnibus Incentive Plan (the “2008 Omnibus Plan”), the Denny’s Corporation Amended and Restated 2004 Omnibus Incentive Plan (the “2004 Omnibus Plan”), the Denny’s Inc. Omnibus Incentive Compensation Plan for Executives, the Advantica Stock Option Plan and the Advantica Restaurant Group Director Stock Option Plan (collectively, the "Denny's Incentive Plans"). |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (2)    | Includes shares of Common Stock available for issuance as awards of stock options, restricted stock, restricted stock units, deferred stock units and performance awards, under the 2008 Omnibus Plan and the 2004 Omnibus Plan.                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (3)    | Includes shares issuable pursuant to the grant or exercise of employment inducement awards of stock options and restricted stock units granted outside of the Denny's Incentive Plans in accordance with NASDAQ Listing Rule 5635(c)(4).                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (4)    | Includes shares of Common Stock available for issuance as awards of stock options and restricted stock units outside of the Denny's Incentive Plans in accordance with NASDAQ Listing Rule 5635(c)(4).                                                                                                                                                                                                                                                                                                                    |

----

|              |   | Russell 2000® Index (1) |   |   | Peer Group (2) |   |   | Denny's Corporation |   |
|-------------------|--------|------------------------------|--------|--------|----------------|--------|--------|---------------------|--------|
| December 28, 2005 |   | $                            | 100.00 |   |           | $      | 100.00 |                |   | $ | 100.00 |   |
| December 27, 2006 |   | $                            | 118.35 |   |           | $      | 113.12 |                |   | $ | 116.88 |   |
| December 26, 2007 |   | $                            | 116.52 |   |           | $      | 81.07  |                |   | $ | 93.05 |   |
| December 31, 2008 |   | $                            | 77.14  |   |           | $      | 62.23  |                |   | $ | 49.38 |   |
| December 30, 2009 |   | $                            | 98.11  |   |           | $      | 78.99  |                |   | $ | 54.34 |   |
| December 29, 2010 |   | $                            | 124.45 |   |           | $      | 105.40 |                |   | $ | 88.82 |   |

| (1)    | The Russell 2000 Index is a broad equity market index of 2,000 companies that measures the performance of the small-cap segment of the U.S. equity universe. As of December 31, 2010, the average market capitalization of companies within the index was approximately $1.3 billion with the median market capitalization being approximately $0.5 billion.                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (2)    | The peer group consists of 17 public companies that operate in the restaurant industry. The peer group includes the following companies: Bob Evans Farms, Inc. (BOBE), Buffalo Wild Wings, Inc. (BWLD), Cracker Barrel Old Country Store, Inc. (CBRL), O’Charleys Inc. (CHUX), California Pizza Kitchen, Inc. (CPKI), Domino’s Pizza, Inc. (DPZ), Darden Restaurants, Inc. (DRI), Brinker International, Inc. (EAT), DineEquity, Inc. (DIN), Jack In The Box Inc. (JACK), Panera Bread Company (PNRA), Papa John’s International, Inc. (PZZA), Red Robin Gourmet Burgers, Inc. (RRGB), Ruby Tuesday, Inc. (RT), Sonic Corp. (SONC), Texas Roadhouse, Inc. (TXRH) and Wendy’s/Arby’s Group, Inc. (WEN). |

----

Item 6.     Selected Financial Data

|                                                                                         |   | Fiscal Year Ended                                  |    |
|----------------------------------------------------------------------------------------------|--------|----------------------------------------------------|---------|
|                                                                                         |   | December 29, 2010                                  |    |   | December 30, 2009 |   |   | December 31, 2008 (a) |   |   | December 26, 2007 |   |   | December 27, 2006 |   |
|                                                                                         |   | (In millions, except ratios and per share amounts) |    |
| Statement of Operations Data:                                                                |   |                                               |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating revenue                                                                       |   | $                                                  | 548.5   |   |   | $ | 608.1 |   |   | $ | 760.3 |   |   | $ | 939.4 |   |   | $ | 994.0 |   |
| Operating income                                                                             |   |                                               | 55.2    |   |   |   | 72.4 |   |   |   | 60.9 |   |   |   | 79.8 |   |   |   | 110.5 |   |
| Income from continuing operations before cumulative effect of change in accounting principle |   |                                               | 22.7    |   |   |   | 41.6 |   |   |   | 12.7 |   |   |   | 29.5 |   |   |   | 28.5 |   |
| Cumulative effect of change in accounting principle, net of tax                              |   |                                               | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 0.2 |   |
| Income from continuing operations                                                       |   |                                               | 22.7    |   |   |   | 41.6 |   |   |   | 12.7 |   |   |   | 29.5 |   |   |   | 28.7 |   |
|                                                                                         |   |                                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic net income per share:                                                             |   |                                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic net income before cumulative effect of change in accounting principle, net of tax |   | $                                                  | 0.23    |   |   | $ | 0.43 |   |   | $ | 0.13 |   |   | $ | 0.31 |   |   | $ | 0.31 |   |
| Cumulative effect of change in accounting principle, net of tax                              |   |                                               | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 0.00 |   |
| Basic net income per share from continuing operations                                   |   | $                                                  | 0.23    |   |   | $ | 0.43 |   |   | $ | 0.13 |   |   | $ | 0.31 |   |   | $ | 0.31 |   |
|                                                                                         |   |                                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted net income per share:                                                           |   |                                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted net income before cumulative effect of change in accounting principle, net of tax    |   | $                                                  | 0.22    |   |   | $ | 0.42 |   |   | $ | 0.13 |   |   | $ | 0.30 |   |   | $ | 0.29 |   |
| Cumulative of effect of change in accounting principle, net of tax                           |   |                                               | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 0.00 |   |
| Diluted net income per share from continuing operations                                 |   | $                                                  | 0.22    |   |   | $ | 0.42 |   |   | $ | 0.13 |   |   | $ | 0.30 |   |   | $ | 0.30 |   |
|                                                                                         |   |                                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash dividends per common share (b)                                                          |   |                                               | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
|                                                                                         |   |                                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance Sheet Data (at end of period):                                                       |   |                                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current assets                                                                               |   | $                                                  | 62.5    |   |   | $ | 58.3 |   |   | $ | 53.5 |   |   | $ | 57.9 |   |   | $ | 63.2 |   |
| Working capital deficit (c)                                                                  |   |                                               | (27.8   | ) |   |   | (33.8 | ) |   |   | (53.7 | ) |   |   | (73.6 | ) |   |   | (72.6 | ) |
| Net property and equipment                                                              |   |                                               | 129.5   |   |   |   | 131.5 |   |   |   | 160.0 |   |   |   | 184.6 |   |   |   | 236.3 |   |
| Total assets                                                                            |   |                                               | 311.2   |   |   |   | 312.6 |   |   |   | 341.8 |   |   |   | 373.9 |   |   |   | 442.7 |   |
| Long-term debt, excluding current portion                                               |   |                                               | 253.1   |   |   |   | 274.0 |   |   |   | 322.7 |   |   |   | 346.8 |   |   |   | 440.7 |   |

| (a)    | The fiscal year ended December 31, 2008 includes 53 weeks of operations as compared with 52 weeks for all other years presented. We estimate that the additional, or 53rd, week added approximately $14.3 million of operating revenue in 2008.                                                      |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                      |
| (b)    | Our previous bank facilities have prohibited, our current bank facility significantly limits and our previous public debt indentures significantly limited, distributions and dividends on Denny’s Corporation’s common equity securities. See Part II Item 5.                                |
|   |                                                                                                                                                                                                                                                                                                      |
| (c)    | A negative working capital position is not unusual for a restaurant operating company. The decrease in working capital deficit from December 26, 2007 to December 29, 2010 is primarily due to the sale of company-owned restaurants to franchisees during 2007, 2008, 2009 and 2010. |

----

Item 7.     Management’s Discussion and Analysis of Financial Condition and Results of Operations

| · | Company restaurant sales have decreased from $648.3 million in 2008 to $423.9 million in 2010 primarily as a result of the sale of restaurants to franchisees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | The decline in company restaurant revenues is partially offset by increased royalty income derived from the growth in the franchise restaurant base resulting from both traditional development and the conversion of restaurants. As a result, royalty income, which is included as a component of franchise and license revenue, has increased from $70.1 million in 2008 to $73.0 million in 2010.                                                                                                                                                                                                                                                          |
| · | The resulting net reduction in total revenue related to our FGI is generally recovered by the benefits of a lower cost structure related to franchise and license revenues, a decrease in depreciation and amortization from the sale of restaurant related assets to franchisees (from $39.8 million in 2008 to $29.6 million in 2010) and a reduction in interest expense resulting from the use of proceeds to reduce debt (from $35.5 million in 2008 to $25.8 million in 2010).                                                                                                                                                                                     |
| · | Initial franchise fees, included as a component of franchise and license revenue, are generally recognized in the period in which a restaurant is sold to a franchisee or when a new unit is opened. These initial fees are completely dependent on the number of restaurants sold to or opened by franchisees during a particular period, and as a result, can cause fluctuations in our total franchise and license revenue from year to year.                                                                                                                                                                                                                    |
| · | Occupancy revenues, also included as a component of franchise and license revenue, result from leasing or subleasing restaurants to franchisees. As a result of our FGI, occupancy revenues have increased from $37.0 million in 2008 to $44.8 million in 2010. Additionally, when a restaurant is sold and leased or subleased to a franchisee, the occupancy costs related to these restaurants moves from costs of company restaurant sales to costs of franchise and license revenue to match the related occupancy revenue. Occupancy costs related to franchise units has increased from $28.5 million in 2008 to $34.4 million in 2010.  |
| · | Gains on sales of assets are primarily dependent on the number of restaurants sold to franchisees during a particular period, and as a result, can cause fluctuations in net income from year to year. As we near the completion of our FGI, gains on sales of assets will continue to decrease.                                                                                                                                                                                                                                                                                                                                                                    |

----

----

|                                                             | Fiscal Year Ended      |    |
|------------------------------------------------------------------|------------------------|---------|
|                                                             | December 29, 2010      |    |   | December 30, 2009 |   |   | December 31, 2008 |   |
|                                                             | (Dollars in thousands) |    |
| Revenue:                                                    |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Company restaurant sales (a)                                | $                      | 423,936 |   | 77.3 | % |   | $ | 488,948 |   |   | 80.4 | % |   | $ | 648,264 |   |   | 85.3 | % |
| Franchise and license revenue (b)                           |                   | 124,530 |   | 22.7 | % |   |   | 119,155 |   |   | 19.6 | % |   |   | 112,007 |   |   | 14.7 | % |
| Total operating revenue                                     |                   | 548,466 |   | 100.0 | % |   |   | 608,103 |   |   | 100.0 | % |   |   | 760,271 |   |   | 100.0 | % |
|                                                             |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs of company restaurant sales (c):                      |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Product costs                                               |                   | 101,470 |   | 23.9 | % |   |   | 114,861 |   |   | 23.5 | % |   |   | 157,545 |   |   | 24.3 | % |
| Payroll and benefits                                        |                   | 172,533 |   | 40.7 | % |   |   | 197,612 |   |   | 40.4 | % |   |   | 271,933 |   |   | 41.9 | % |
| Occupancy                                                   |                   | 27,967  |   | 6.6 | % |   |   | 31,937 |   |   | 6.5 | % |   |   | 40,415 |   |   | 6.2 | % |
| Other operating expenses                                    |                   | 64,029  |   | 15.1 | % |   |   | 73,496 |   |   | 15.0 | % |   |   | 100,182 |   |   | 15.5 | % |
| Total costs of company restaurant sales                          |                   | 365,999 |   | 86.3 | % |   |   | 417,906 |   |   | 85.5 | % |   |   | 570,075 |   |   | 87.9 | % |
|                                                             |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs of franchise and license revenue (c)                  |                   | 46,987  |   | 37.7 | % |   |   | 42,626 |   |   | 35.8 | % |   |   | 34,933 |   |   | 31.2 | % |
|                                                             |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| General and administrative expenses                         |                   | 55,619  |   | 10.1 | % |   |   | 57,282 |   |   | 9.4 | % |   |   | 60,970 |   |   | 8.0 | % |
| Depreciation and amortization                               |                   | 29,637  |   | 5.4 | % |   |   | 32,343 |   |   | 5.3 | % |   |   | 39,766 |   |   | 5.2 | % |
| Operating (gains), losses and other charges, net                 |                   | (4,944  | ) | (0.9 | %) |   |   | (14,483 | ) |   | (2.4 | %) |   |   | (6,384 | ) |   | (0.8 | %) |
| Total operating costs and expenses                               |                   | 493,298 |   | 89.9 | % |   |   | 535,674 |   |   | 88.1 | % |   |   | 699,360 |   |   | 92.0 | % |
| Operating income                                            |                   | 55,168  |   | 10.1 | % |   |   | 72,429 |   |   | 11.9 | % |   |   | 60,911 |   |   | 8.0 | % |
| Other expenses:                                             |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense, net                                       |                   | 25,792  |   | 4.7 | % |   |   | 32,600 |   |   | 5.4 | % |   |   | 35,457 |   |   | 4.7 | % |
| Other nonoperating expense (income), net                    |                   | 5,282   |   | 1.0 | % |   |   | (3,125 | ) |   | (0.5 | %) |   |   | 9,190 |   |   | 1.2 | % |
| Total other expenses, net                                   |                   | 31,074  |   | 5.7 | % |   |   | 29,475 |   |   | 4.8 | % |   |   | 44,647 |   |   | 5.9 | % |
| Net income before income taxes                                   |                   | 24,094  |   | 4.4 | % |   |   | 42,954 |   |   | 7.1 | % |   |   | 16,264 |   |   | 2.1 | % |
| Provision for income taxes                                       |                   | 1,381   |   | 0.3 | % |   |   | 1,400 |   |   | 0.2 | % |   |   | 3,522 |   |   | 0.5 | % |
| Net income                                                       | $                      | 22,713  |   | 4.1 | % |   | $ | 41,554 |   |   | 6.8 | % |   | $ | 12,742 |   |   | 1.7 | % |
|                                                             |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Data:                                                      |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Company-owned average unit sales                                 | $                      | 1,813   |   |   |   |   | $ | 1,810 |   |   |   |   |   | $ | 1,813 |   |   |   |   |
| Franchise average unit sales                                     | $                      | 1,361   |   |   |   |   | $ | 1,396 |   |   |   |   |   | $ | 1,490 |   |   |   |   |
| Company-owned equivalent units (d)                               |                   | 234     |   |   |   |   |   | 270 |   |   |   |   |   |   | 357 |   |   |   |   |
| Franchise equivalent units (d)                                   |                   | 1,349   |   |   |   |   |   | 1,274 |   |   |   |   |   |   | 1,186 |   |   |   |   |
| Same-store sales decrease (company-owned) (e)(f)                 |                   | (3.6    | %) |   |   |   |   | (3.7 | %) |   |   |   |   |   | (1.4 | %) |   |   |   |
| Guest check average (decrease) increase (f)                 |                   | (1.7    | %) |   |   |   |   | 1.0 | % |   |   |   |   |   | 5.9 | % |   |   |   |
| Guest count decrease (f)                                         |                   | (1.9    | %) |   |   |   |   | (4.6 | %) |   |   |   |   |   | (6.9 | %) |   |   |   |
| Same-store sales decrease (franchised and licensed units) (e)(f) |                   | (3.7    | %) |   |   |   |   | (5.2 | %) |   |   |   |   |   | (4.6 | %) |   |   |   |

| (a)    | We estimate that the additional, or 53rd, week added approximately $12.1 million of company restaurant sales in 2008.                                                                                                                                                         |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                          |
| (b)    | We estimate that the additional, or 53rd, week added approximately $2.2 million of franchise and license revenue in 2008, consisting of $1.5 million of royalties and $0.7 million of occupancy revenue.                                                                 |
|   |                                                                                                                                                                                                                                                                          |
| (c)    | 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 of franchise and license revenue. All other percentages are as a percentage of total operating revenue. |
|   |                                                                                                                                                                                                                                                                          |
| (d)    | Equivalent units are calculated as the weighted-average number of units outstanding during the defined time period.                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                          |
| (e)    | Same-store sales include sales from restaurants that were open the same period in the prior year. For purposes of calculating same-store sales, the 53rd week of 2008 was compared to the 1st week of 2008.                                                                   |
|   |                                                                                                                                                                                                                                                                          |
| (f)    | Prior year amounts have not been restated for 2010 comparable units.                                                                                                                                                                                                          |

----

|                                                     |   | Fiscal Year Ended |      |
|----------------------------------------------------------|--------|-------------------|-----------|
|                                                     |   | December 29, 2010 |      |   | December 30, 2009 |   |
| Company-owned restaurants, beginning of period           |   |              | 233       |   |   |   | 315 |   |
| Units opened                                             |   |              | 24        |   |   |   | 1 |   |
| Units relocated                                          |   |              | 1         |   |   |   | — |   |
| Units sold to franchisees                                |   |              |  (24 | ) |   |   |  (81 | ) |
| Units closed (including units relocated)                 |   |              | (2        | ) |   |   | (2 | ) |
| End of period                                            |   |              | 232       |   |   |   | 233 |   |
|                                                     |   |              |      |   |   |   |   |   |
| Franchised and licensed restaurants, beginning of period |   |              | 1,318     |   |   |   | 1,226 |   |
| Units opened                                             |   |              | 112       |   |   |   | 39 |   |
| Units relocated                                          |   |              | 4         |   |   |   | 3 |   |
| Units purchased from Company                             |   |              |  24  |   |   |   |  81 |   |
| Units closed (including units relocated)                 |   |              | (32       | ) |   |   | (31 | ) |
| End of period                                            |   |              | 1,426     |   |   |   | 1,318 |   |
| Total restaurants, end of period                         |   |              | 1,658     |   |   |   | 1,551 |   |

|                           |   | Fiscal Year Ended      |   |
|--------------------------------|--------|------------------------|--------|
|                           |   | December 29, 2010      |   |   | December 30, 2009 |   |
|                           |   | (Dollars in thousands) |   |
| Utilities                 |   | $                      | 18,221 |   |   |   | 4.3 | % |   | $ | 23,083 |   |   |   | 4.7 | % |
| Repairs and maintenance   |   |                   | 7,428  |   |   |   | 1.8 | % |   |   | 9,909 |   |   |   | 2.0 | % |
| Marketing                 |   |                   | 17,376 |   |   |   | 4.1 | % |   |   | 20,082 |   |   |   | 4.1 | % |
| Legal settlement costs         |   |                   | 446    |   |   |   | 0.1 | % |   |   | 412 |   |   |   | 0.1 | % |
| Other direct costs        |   |                   | 20,558 |   |   |   | 4.8 | % |   |   | 20,010 |   |   |   | 4.1 | % |
| Other operating expenses  |   | $                      | 64,029 |   |   |   | 15.1 | % |   | $ | 73,496 |   |   |   | 15.0 | % |

|                                         |   | Fiscal Year Ended           |    |
|----------------------------------------------|--------|-----------------------------|---------|
|                                         |   | December 29, 2010           |    |   | December 30, 2009 |   |
|                                         |   | (Dollars in thousands) |    |
| Royalties                          |   | $                           | 73,034  |   |   |   | 58.6 | % |   | $ | 70,743 |   |   |   | 59.4 | % |
| Initial and other fees                       |   |                        | 6,721   |   |   |   | 5.4 | % |   |   | 4,910 |   |   |   |  4.1 | % |
| Occupancy revenue                       |   |                        | 44,775  |   |   |   | 36.0 | % |   |   | 43,502 |   |   |   | 36.5 | % |
| Franchise and license revenue           |   |                        | 124,530 |   |   |   | 100.0 | % |   |   | 119,155 |   |   |   | 100.0 | % |
|                                         |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Occupancy costs                         |   |                        | 34,373  |   |   |   | 27.6 | % |   |   | 33,658 |   |   |   | 28.3 | % |
| Other direct costs                      |   |                        | 12,614  |   |   |   | 10.1 | % |   |   | 8,968 |   |   |   | 7.5 | % |
| Costs of franchise and license revenue  |   | $                           | 46,987  |   |   |   | 37.7 | % |   | $ | 42,626 |   |   |   | 35.8 | % |

----

|                                            |   | Fiscal Year Ended |   |
|-------------------------------------------------|--------|-------------------|--------|
|                                            |   | December 29, 2010 |   |   | December 30, 2009 |   |
|                                            |   | (In thousands)    |   |
| Share-based compensation                   |   | $                 | 2,840  |   |   | $ | 4,671 |   |
| General and administrative expenses        |   |              | 52,779 |   |   |   | 52,611 |   |
| Total general and administrative expenses  |   | $                 | 55,619 |   |   | $ | 57,282 |   |

|                                         |   | Fiscal Year Ended |   |
|----------------------------------------------|--------|-------------------|--------|
|                                         |   | December 29, 2010 |   |   | December 30, 2009 |   |
|                                         |   | (In thousands)    |   |
| Depreciation of property and equipment  |   | $                 | 21,716 |   |   | $ | 24,240 |   |
| Amortization of capital lease assets    |   |              | 2,814  |   |   |   | 2,723 |   |
| Amortization of intangible assets       |   |              | 5,107  |   |   |   | 5,380 |   |
| Total depreciation and amortization     |   | $                 | 29,637 |   |   | $ | 32,343 |   |

|                                             |   | Fiscal Year Ended |   |
|--------------------------------------------------|--------|-------------------|--------|
|                                             |   | December 29, 2010 |   |   | December 30, 2009 |   |
|                                             |   | (In thousands)    |   |
| Gains on sales of assets and other, net          |   | $                 | (9,481 | ) |   | $ | (19,429 | ) |
| Restructuring charges and exit costs             |   |              | 4,162  |   |   |   | 3,960 |   |
| Impairment charges                               |   |              | 375    |   |   |   | 986 |   |
| Operating (gains), losses and other charges, net |   | $                 | (4,944 | ) |   | $ | (14,483 | ) |

----

|                                                 |   | Fiscal Year Ended |   |
|------------------------------------------------------|--------|-------------------|--------|
|                                                 |   | December 29, 2010 |   |   | December 30, 2009 |   |
|                                                 |   | (In thousands)    |   |
| Exit costs                                           |   | $                 | 1,247  |   |   | $ | 698 |   |
| Severance and other restructuring charges  |   |              | 2,915  |   |   |   | 3,262 |   |
| Total restructuring and exist costs                  |   | $                 | 4,162  |   |   | $ | 3,960 |   |

|                                           |   | Fiscal Year Ended |   |
|------------------------------------------------|--------|-------------------|--------|
|                                           |   | December 29, 2010 |   |   | December 30, 2009 |   |
|                                           |   | (In thousands)    |   |
| Interest on senior notes                  |   | $                 | 13,565 |   |   | $ | 17,452 |   |
| Interest on credit facilities             |   |              | 5,406  |   |   |   | 8,101 |   |
| Interest on capital lease liabilities     |   |              | 3,911  |   |   |   | 3,785 |   |
| Letters of credit and other fees          |   |              | 1,703  |   |   |   | 1,695 |   |
| Interest income                           |   |              | (1,480 | ) |   |   | (1,721 | ) |
| Total cash interest                       |   |              | 23,105 |   |   |   | 29,312 |   |
| Amortization of deferred financing costs  |   |              | 1,045  |   |   |   | 1,077 |   |
| Amortization of debt discount                  |   |              | 160    |   |   |   | — |   |
| Interest accretion on other liabilities   |   |              | 1,482  |   |   |   | 2,211 |   |
| Total interest expense, net               |   | $                 | 25,792 |   |   | $ | 32,600 |   |

----

|                                                     |   |   Fiscal Year Ended |      |
|----------------------------------------------------------|--------|-------------------------------|-----------|
|                                                     |   |  December 30, 2009       |      |  December 31, 2008 |   |
| Company-owned restaurants, beginning of period           |   |                          | 315       |   |   |   | 394 |   |
| Units opened                                             |   |                          | 1         |   |   |   | 3 |   |
| Units sold to franchisees                                |   |                          |  (81 | ) |   |   |  (79 | ) |
| Units closed                                             |   |                          | (2        | ) |   |   | (3 | ) |
| End of period                                            |   |                          | 233       |   |   |   | 315 |   |
|                                                     |   |                          |      |   |   |   |   |   |
| Franchised and licensed restaurants, beginning of period |   |                          | 1,226     |   |   |   | 1,152 |   |
| Units opened                                             |   |                          | 39        |   |   |   | 31 |   |
| Units relocated                                          |   |                          | 3         |   |   |   | 1 |   |
| Units purchased from Company                             |   |                          |  81  |   |   |   |  79 |   |
| Units closed (including units relocated)                 |   |                          | (31       | ) |   |   | (37 | ) |
| End of period                                            |   |                          | 1,318     |   |   |   | 1,226 |   |
| Total restaurants, end of period                         |   |                          | 1,551     |   |   |   | 1,541 |   |

|                           |   | Fiscal Year Ended      |   |
|--------------------------------|--------|------------------------|--------|
|                           |   | December 30, 2009      |   |   | December 31, 2008 |   |
|                           |   | (Dollars in thousands) |   |
| Utilities                 |   | $                      | 23,083 |   |   |   | 4.7 | % |   | $ | 33,160 |   |   |   | 5.1 | % |
| Repairs and maintenance   |   |                   | 9,909  |   |   |   | 2.0 | % |   |   | 14,592 |   |   |   | 2.3 | % |
| Marketing                 |   |                   | 20,082 |   |   |   | 4.1 | % |   |   | 23,243 |   |   |   | 3.6 | % |
| Legal settlement costs         |   |                   | 412    |   |   |   | 0.1 | % |   |   | 2,283 |   |   |   | 0.4 | % |
| Other direct costs        |   |                   | 20,010 |   |   |   | 4.1 | % |   |   | 26,904 |   |   |   | 4.2 | % |
| Other operating expenses  |   | $                      | 73,496 |   |   |   | 15.0 | % |   | $ | 100,182 |   |   |   | 15.5 | % |

|                                         |   | Fiscal Year Ended           |    |
|----------------------------------------------|--------|-----------------------------|---------|
|                                         |   | December 30, 2009           |    |   | December 31, 2008 |   |
|                                         |   | (Dollars in thousands) |    |
| Royalties                          |   | $                           | 70,743  |   |   |   | 59.4 | % |   | $ | 70,081 |   |   |   | 62.6 | % |
| Initial and other fees                       |   |                        | 4,910   |   |   |   |  4.1 | % |   |   | 4,949 |   |   |   |  4.4 | % |
| Occupancy revenue                       |   |                        | 43,502  |   |   |   | 36.5 | % |   |   | 36,977 |   |   |   | 33.0 | % |
| Franchise and license revenue                |   |                        | 119,155 |   |   |   | 100.0 | % |   |   | 112,007 |   |   |   | 100.0 | % |
|                                         |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Occupancy costs                         |   |                        | 33,658  |   |   |   | 28.3 | % |   |   | 28,451 |   |   |   | 25.4 | % |
| Other direct costs                      |   |                        | 8,968   |   |   |   | 7.5 | % |   |   | 6,482 |   |   |   | 5.8 | % |
| Costs of franchise and license revenue  |   | $                           | 42,626  |   |   |   | 35.8 | % |   | $ | 34,933 |   |   |   | 31.2 | % |

----

|                                            |   | Fiscal Year Ended |   |
|-------------------------------------------------|--------|-------------------|--------|
|                                            |   | December 30, 2009 |   |   | December 31, 2008 |   |
|                                            |   | (In thousands)    |   |
| Share-based compensation                   |   | $                 | 4,671  |   |   | $ | 4,117 |   |
| General and administrative expenses        |   |              | 52,611 |   |   |   | 56,853 |   |
| Total general and administrative expenses  |   | $                 | 57,282 |   |   | $ | 60,970 |   |

|                                         |   | Fiscal Year Ended |   |
|----------------------------------------------|--------|-------------------|--------|
|                                         |   | December 30, 2009 |   |   | December 31,  2008 |   |
|                                         |   | (In thousands)    |   |
| Depreciation of property and equipment  |   | $                 | 24,240 |   |   | $ | 30,609 |   |
| Amortization of capital lease assets    |   |              | 2,723  |   |   |   | 3,420 |   |
| Amortization of intangible assets       |   |              | 5,380  |   |   |   | 5,737 |   |
| Total depreciation and amortization     |   | $                 | 32,343 |   |   | $ | 39,766 |   |

|                                             |   | Fiscal Year Ended |    |
|--------------------------------------------------|--------|-------------------|---------|
|                                             |   | December 30, 2009 |    |   | December 31, 2008 |   |
|                                             |   | (In thousands)    |    |
| Gains on sales of assets and other, net          |   | $                 | (19,429 | ) |   | $ | (18,701 | ) |
| Restructuring charges and exit costs             |   |              | 3,960   |   |   |   | 9,022 |   |
| Impairment charges                               |   |              | 986     |   |   |   | 3,295 |   |
| Operating (gains), losses and other charges, net |   | $                 | (14,483 | ) |   | $ | (6,384 | ) |

----

|                                                 |   | Fiscal Year Ended |   |
|------------------------------------------------------|--------|-------------------|--------|
|                                                 |   | December 30, 2009 |   |   | December 31, 2008 |   |
|                                                 |   | (In thousands)    |   |
| Exit costs                                           |   | $                 | 698    |   |   | $ | 3,435 |   |
| Severance and other restructuring charges  |   |              | 3,262  |   |   |   | 5,587 |   |
| Total restructuring and exist costs                  |   | $                 | 3,960  |   |   | $ | 9,022 |   |

|                                           |   | Fiscal Year Ended |   |
|------------------------------------------------|--------|-------------------|--------|
|                                           |   | December 30, 2009 |   |   | December 31, 2008 |   |
|                                           |   | (In thousands)    |   |
| Interest on senior notes                  |   | $                 | 17,452 |   |   | $ | 17,740 |   |
| Interest on credit facilities             |   |              | 8,101  |   |   |   | 9,278 |   |
| Interest on capital lease liabilities     |   |              | 3,785  |   |   |   | 3,804 |   |
| Letters of credit and other fees          |   |              | 1,695  |   |   |   | 2,019 |   |
| Interest income                           |   |              | (1,721 | ) |   |   | (1,289 | ) |
| Total cash interest                       |   |              | 29,312 |   |   |   | 31,552 |   |
| Amortization of deferred financing costs  |   |              | 1,077  |   |   |   | 1,100 |   |
| Interest accretion on other liabilities   |   |              | 2,211  |   |   |   | 2,805 |   |
| Total interest expense, net               |   | $                 | 32,600 |   |   | $ | 35,457 |   |

----

|                                                     |   | Fiscal Year Ended |    |
|----------------------------------------------------------|--------|-------------------|---------|
|                                                     |   | December 29, 2010 |    |   | December 30, 2009 |   |
|                                                     |   | (In thousands)    |    |
| Net cash provided by operating activities                |   | $                 | 38,255  |   |   | $ | 33,261 |   |
| Net cash provided by (used in) investing activities |   |              | (5,280  | ) |   |   | 23,763 |   |
| Net cash used in financing activities                    |   |              | (30,426 | ) |   |   | (51,541 | ) |
| Net increase in cash and cash equivalents           |   | $                 | 2,549   |   |   | $ | 5,483 |   |

|                       |   | Fiscal Year Ended |   |
|----------------------------|--------|-------------------|--------|
|                       |   | December 29, 2010 |   |   | December 30, 2009 |   |
|                       |   | (In thousands)    |   |
| Facilities                 |   | $                 | 5,299  |   |   | $ | 6,733 |   |
| New construction      |   |              | 16,287 |   |   |   | 4,604 |   |
| Remodeling                 |   |              | 3,527  |   |   |   | 4,130 |   |
| Information technology     |   |              | 1,310  |   |   |   | 467 |   |
| Strategic initiatives      |   |              | 193    |   |   |   | 1,065 |   |
| Other                      |   |              | 765    |   |   |   | 1,408 |   |
| Total capital expenditures |   | $                 | 27,381 |   |   | $ | 18,407 |   |

----

|                                                                                                                                |   | December 29, 2010 |    |    | December 30, 2009 |   |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|---------|---------|-------------------|--------|
|                                                                                                                                |   | (In thousands)    |    |
| New Credit Facility:                                                                                                                |   |              |    |    |              |   |
| Revolver loans outstanding due September 30, 2015                                                                                   |   | $                 | — |    |              | $      | — |   |
| Term loans due September 30, 2016                                                                                                   |   |              | 240,000 |    |              |   | — |   |
| Old Credit Facility (repaid during the year ended December 29, 2010):                                                          |   |              |    |    |              |   |   |   |
| Revolver loans outstanding due December 15, 2011                                                                                    |   |              | — |    |              |   | — |   |
| Term loans due March 31, 2012                                                                                                       |   |              | — |    |              |   | 80,000 |   |
| Notes and debentures (repaid during the year ended December 29, 2010):                                                              |   |              |    |    |              |   |   |   |
| 10% Senior Notes due October 1, 2012, interest payable semi-annually                                                                |   |              | — |    |              |   | 175,000 |   |
| Other notes payable, maturing 1/1/2013, payable in monthly installments     with an interest rate of 9.17% |   |              | 181     |    |              |   | 257 |   |
| Capital lease obligations                                                                                                           |   |              | 23,097  |    |              |   | 23,409 |   |
|    Total long-term debt                                                                                                   |   |              | 263,278 |    |              |   | 278,666 |   |
| Unamortized discount                                                                                                                |   |              | (3,455  | )  |              |   | — |   |
|    Total long-term debt, net                                                                                              |   |              | 259,823 |    |              |   |   |   |
| Less current maturities and mandatory prepayments                                                                                   |   |              | 6,692   |    |              |   | 4,625 |   |
| Noncurrent portion of long-term debt                                                                                                |   | $                 | 253,131 |    |              | $      | 274,041 |   |

|                                                                  |   | Payments Due by Period |    |
|-----------------------------------------------------------------------|--------|------------------------|---------|
|                                                                  |   | Total                  |    |   | Less than 1 Year |   |   | 1-2 Years |   |   | 3-4 Years |   |   | 5 Years and Thereafter |   |
|                                                                  |   | (In thousands)         |    |
| Long-term debt                                                   |   | $                      | 240,181 |   |   | $ | 2,583 |   |   | $ | 5,098 |   |   | $ | 5,000 |   |   | $ | 227,500 |   |
| Capital lease obligations (a)                                    |   |                   | 37,600  |   |   |   | 7,675 |   |   |   | 12,999 |   |   |   | 7,965 |   |   |   | 8,961 |   |
| Operating lease obligations                                      |   |                   | 270,144 |   |   |   | 38,731 |   |   |   | 66,331 |   |   |   | 52,106 |   |   |   | 112,976 |   |
| Interest obligations (a)                                              |   |                   | 87,149  |   |   |   | 15,552 |   |   |   | 30,596 |   |   |   | 29,941 |   |   |   | 11,060 |   |
| Pension and other defined contribution planobligations (b)  |   |                   | 2,167   |   |   |   | 2,167 |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Purchase obligations (c)                                         |   |                   | 162,450 |   |   |   | 134,058 |   |   |   | 11,955 |   |   |   | 11,955 |   |   |   | 4,482 |   |
| Total                                                            |   | $                      | 799,691 |   |   | $ | 200,766 |   |   | $ | 126,979 |   |   | $ | 106,967 |   |   | $ | 364,979 |   |

| (a)    | Interest obligations represent payments related to our long-term debt outstanding at December 29, 2010. For long-term debt with variable rates, we have used the rate applicable at December 29, 2010 to project interest over the periods presented in the table above. The capital lease obligation amounts above are inclusive of interest.                                                                                                                                                                             |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (b)    | Pension and other defined contribution plan obligations are estimates based on facts and circumstances at December 29, 2010. Amounts cannot currently be estimated for more than one year.                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (c)    | Purchase obligations include amounts payable under purchase contracts for food and non-food products. Many of these agreements do not obligate us to purchase any specific volumes and include provisions that would allow us to cancel such agreements with appropriate notice. For agreements with cancellation provisions, amounts included in the table above represent our estimate of purchase obligations during the periods presented if we were to cancel these contracts with appropriate notice. |

----

----

Item 7A.     Quantitative and Qualitative Disclosures About Market Risk

Item 8.     Financial Statements and Supplementary Data

Item 9.     Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

----

Item 9A.     Controls and Procedures

----

----

Item 9B.     Other Information

PART III

Item 10.     Directors, Executive Officers and Corporate Governance

Item 11.     Executive Compensation

Item 12.     Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13.     Certain Relationships and Related Transactions, and Director Independence

Item 14.     Principal Accounting Fees and Services

PART IV

Item 15.     Exhibits and Financial Statement Schedules

|  Exhibit No. |  Description                                                                                                                                                                                                                                                                                                                                                                  |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *3.1              | Restated Certificate of Incorporation of Denny’s Corporation dated March 3, 2003, as amended by Certificate of Amendment to Restated Certificate of Incorporation to Increase Authorized Capitalization dated August 25, 2004 (incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K of Denny’s Corporation for the year ended December 29, 2004) |
|              |                                                                                                                                                                                                                                                                                                                                                                               |
| *3.2              | By-Laws of Denny’s Corporation, as effective as of November 11, 2009 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K of Denny’s Corporation filed with the Commission on November 16, 2009)                                                                                                                                               |
|              |                                                                                                                                                                                                                                                                                                                                                                               |
| *4.1              | 10% Senior Notes due 2012 Indenture dated as of October 5, 2004 between Denny’s Holdings, Inc., as Issuer, Denny’s Corporation, as Guarantor, and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.3 to the Quarterly Report on Form 10-Q of Denny’s Corporation for the quarter ended September 29, 2004)                     |
|              |                                                                                                                                                                                                                                                                                                                                                                               |
| *4.2              | Form of 10% Senior Note due 2012 and annexed Guarantee (included in Exhibit 4.1 hereto)                                                                                                                                                                                                                                                                                            |
|              |                                                                                                                                                                                                                                                                                                                                                                               |
| +*10.1            | Advantica Restaurant Group Director Stock Option Plan, as amended through January 24, 2001 (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Denny’s Corporation (then known as Advantica) filed with the Commission on May 14, 2001)                                                                                                       |
|              |                                                                                                                                                                                                                                                                                                                                                                               |
| +*10.2            | Advantica Stock Option Plan as amended through November 28, 2001 (incorporated by reference to Exhibit 10.19 to the Annual Report on Form 10-K of Denny’s Corporation (then known as Advantica) for the year ended December 26, 2001)                                                                                                                                        |

----

| Exhibit No.  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| +*10.3       | Denny’s, Inc. Omnibus Incentive Compensation Plan for Executives (incorporated by reference to Exhibit 99 to the Registration Statement on Form S-8 of Denny’s Corporation (No. 333-103220) filed with the Commission on February 14, 2003)                                                                                                                                                                                                                                                                                                        |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| +*10.4  | Description of amendments to the Denny’s, Inc. Omnibus Incentive Compensation Plan for Executives, the Advantica Stock Option Plan and the Advantica Restaurant Group Director Stock Option Plan (incorporated by reference to Exhibit 10.7 to the Quarterly Report on Form 10-Q of Denny’s Corporation for the quarter ended September 29, 2004)                                                                                                                                                                                                  |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| +*10.5       | Form of stock option agreement to be used under the Denny’s Corporation 2004 Omnibus Incentive Plan (incorporated by reference to Exhibit 99.2 to the Registration Statement on Form S-8 of Denny’s Corporation (File No. 333-120093) filed with the Commission on October 29, 2004)                                                                                                                                                                                                                                                               |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| +*10.6       | Form of deferred stock unit award certificate to be used under the Denny’s Corporation 2004 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.27 to the Annual Report on Form 10-K of Denny’s Corporation for the year ended December 29, 2004)                                                                                                                                                                                                                                                                                      |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| +*10.7       | Amended and Restated Employment Agreement dated May 1, 2009 between Denny’s Corporation, Denny’s Inc. and Nelson J. Marchioli  (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Denny’s Corporation filed with the Commission on May 7, 2009)                                                                                                                                                                                                                                                       |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| +*10.8       | Employment Offer Letter dated August 16, 2005 between Denny’s Corporation and F. Mark Wolfinger (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Denny’s Corporation for the quarter ended September 28, 2005)                                                                                                                                                                                                                                                                                                   |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| +*10.9       | Employment Offer Letter dated July 19, 2010 between Denny’s Corporation and Frances L. Allen (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q of Denny’s Corporation for the quarter ended September 29, 2010).                                                                                                                                                                                                                                                                                                     |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| +*10.10      | Employment Offer Letter dated August 20, 2010 between Denny’s Corporation and Robert Rodriguez (incorporated by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q of Denny’s Corporation for the quarter ended September 29, 2010).                                                                                                                                                                                                                                                                                                   |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| *10.11       | Amended and Restated Credit Agreement dated as of December 15, 2006, among Denny’s Inc. and Denny’s Realty, LLC, as Borrowers, Denny’s Corporation, Denny’s Holdings, Inc., and DFO, LLC, as Guarantors, the Lenders named therein, Bank of America, N.A., as Administrative Agent and Collateral Agent, and Banc of America Securities LLC as Sole Lead Arranger and Sole Bookrunner (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Denny's Corporation for the quarter ended September 30, 2009) |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| *10.12       | Amended and Restated Guarantee and Collateral Agreement dated as of December 15, 2006, among Denny’s Inc., Denny’s Realty, LLC, Denny’s Corporation, Denny’s Holdings, Inc., DFO, LLC, each other Subsidiary Loan Party referenced therein and Bank of America, N.A., as Collateral Agent (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of Denny's Corporation for the quarter ended September 30, 2009)                                                                                             |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| *10.13       | Amendment No. 1 dated as of March 8, 2007 to the Amended and Restated Credit Agreement dated as of December 15, 2006 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K of Denny’s Corporation filed with the Commission on March 14, 2007)                                                                                                                                                                                                                                                                               |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| *10.14       | Supplemental Indenture dated as of September 9, 2010 to 10% Senior Notes due 2012 Indenture dated as of October 5, 2004 between Denny’s Holdings, Inc. as Issuer, Denny’s Corporation, as Guarantor, and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Denny’s Corporation for the quarter ended September 29, 2010).                                                                                                                                        |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| *10.15       | Second Amended and Restated Credit Agreement dated as of September 30, 2010 among Denny’s, Inc. and Denny’s Realty, LLC as Borrowers, Denny’s Corporation, Denny’s Holdings, Inc., and DFO, LLC, as Guarantors, Bank of America, N.A., as Administrative Agent and L/C Issuer, certain other lenders and Wells Fargo Bank, N.A. as Syndication Agent (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of Denny’s Corporation for the quarter ended September 29, 2010).                           |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| *10.16       | Second Amended and Restated Guarantee and Collateral Agreement dated as of September 30, 2010 among Denny’s, Inc. and Denny’s Realty, LLC, Denny’s Corporation, Denny’s Holdings, Inc., DFO, LLC, and Bank of America, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q of Denny’s Corporation for the quarter ended September 29, 2010).                                                                                                                           |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| +*10.17      | Award certificate evidencing restricted stock unit award to F. Mark Wolfinger, effective July 9, 2007 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Denny’s Corporation filed with the Commission on July 12, 2007)                                                                                                                                                                                                                                                                                                    |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| +*10.18      | Denny's Corporation Amended and Restated Executive Severance Pay Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| +*10.19      | Denny's Corporation 2008 Omnibus Incentive Plan (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K of Denny's Corporation filed with the Commission on May 27, 2008)                                                                                                                                                                                                                                                                                                                                                                 |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| +*10.20      | Amendment to the Denny’s Corporation 2008 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q of Denny’s Corporation for the quarter ended April 1, 2009)                                                                                                                                                                                                                                                                                                                                       |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| +*10.21      | Denny's Corporation Amended and Restated 2004 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of Denny's Corporation for the quarter ended June 25, 2008)                                                                                                                                                                                                                                                                                                                                               |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| +*10.22      | Form of 2008 Performance-Based Restricted Stock Unit Award Certificate (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Denny's Corporation for the quarter ended September 24, 2008)                                                                                                                                                                                                                                                                                                                                        |

----

| Exhibit No. | Description                                                                                                                                                                                                                                                                                                                                       |
|-------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| +*10.23     | 2008 Performance Restricted Stock Unit Program Description (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of Denny's Corporation for the quarter ended September 24, 2008)                                                                                                                                            |
|        |                                                                                                                                                                                                                                                                                                                                                   |
| +*10.24     | Form of 2009 Long-Term Performance Incentive Program Performance Shares and Target Cash Opportunity Award Certificate (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Denny’s Corporation for the quarter ended April 1, 2009)                                                                                |
|        |                                                                                                                                                                                                                                                                                                                                                   |
| +*10.25     | Written Description of Denny’s 2009 Long-Term Performance Incentive Program (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of Denny’s Corporation for the quarter ended April 1, 2009)                                                                                                               |
|        |                                                                                                                                                                                                                                                                                                                                                   |
| +*10.26     | Form of the 2010 Long-Term Performance Incentive Program Performance Shares and Target Cash Opportunity Award Certificate (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Denny’s Corporation for the quarter ended March 31, 2010).                                                                          |
|        |                                                                                                                                                                                                                                                                                                                                                   |
| +*10.27     | Written Description of the Denny's 2010 Long-Term Performance Incentive Program (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of Denny’s Corporation for the quarter ended March 31, 2010).                                                                                                                    |
|        |                                                                                                                                                                                                                                                                                                                                                   |
| +10.28      | Form of Stock Option Award Agreement                                                                                                                                                                                                                                                                                                                   |
|        |                                                                                                                                                                                                                                                                                                                                                   |
| +10.29      | Form of Performance-Based Restricted Stock Unit Award Certificate                                                                                                                                                                                                                                                                                      |
|        |                                                                                                                                                                                                                                                                                                                                                   |
| +10.30      | Denny's Corporate Incentive Plan (incorporated by reference to Exhibit 10.30 to the Annual Report on Form 10-K of Denny’s Corporation for the year ended December 30, 2009)                                                                                                                                                                      |
|        |                                                                                                                                                                                                                                                                                                                                                   |
| 10.31       | First Amendment to the Second Amended and Restated Credit Agreement, dated as of March 1, 2011, among Denny's Inc. and Denny's Realty, LLC as the Borrowers, Denny's Corporation and DFO, LLC as Guarantors, each lender from time to time party hereto, and Bank of America, N.A., as Administrative Agent and L/C Issuer.                            |
|        |                                                                                                                                                                                                                                                                                                                                                   |
| 21.1        | Subsidiaries of Denny’s                                                                                                                                                                                                                                                                                                                          |
|        |                                                                                                                                                                                                                                                                                                                                                   |
| 23.1        | Consent of KPMG LLP                                                                                                                                                                                                                                                                                                                                    |
|        |                                                                                                                                                                                                                                                                                                                                                   |
| 31.1        | Certification of John C. Miller, President and Chief Executive Officer of Denny’s Corporation, pursuant to Rule 13a-14(a), as adopted pursuant to 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        | Statement of John C. Miller, President and Chief Executive Officer of Denny’s Corporation, and F. Mark Wolfinger, Executive Vice President, Chief Administrative Officer and Chief Financial Officer of Denny’s Corporation, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |

| + | Denotes management contracts or compensatory plans or arrangements. |
|---|---------------------------------------------------------------------|

----

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

|                                                                                                                                                        |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                        | Page   |
| Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements                                                                | F-2    |
| Consolidated Statements of Operations for each of the Three Fiscal Years in the Period Ended December 29, 2010                                         | F-3    |
| Consolidated Balance Sheets as of December 29, 2010 and December 30, 2009                                                                                   | F-4    |
| Consolidated Statements of Shareholders’ Deficit and Comprehensive Loss for each of the Three Fiscal Years in the Period Ended December 29, 2010 | F-5    |
| Consolidated Statements of Cash Flows for each of the Three Fiscal Years in the Period Ended December 29, 2010                                              | F-6    |
| Notes to Consolidated Financial Statements                                                                                                                  | F-7    |

----

----

|                                             |   | Fiscal Year Ended                        |    |
|--------------------------------------------------|--------|------------------------------------------|---------|
|                                             |   | December 29, 2010                        |    |   | December 30, 2009 |   |   | December 31, 2008 |   |
|                                             |   | (In thousands, except per share amounts) |    |
| Revenue:                                         |   |                                     |    |   |   |   |   |   |   |
| Company restaurant sales                         |   | $                                        | 423,936 |   |   | $ | 488,948 |   |   | $ | 648,264 |   |
| Franchise and license revenue                    |   |                                     | 124,530 |   |   |   | 119,155 |   |   |   | 112,007 |   |
| Total operating revenue                          |   |                                     | 548,466 |   |   |   | 608,103 |   |   |   | 760,271 |   |
| Costs of company restaurant sales:               |   |                                     |    |   |   |   |   |   |   |   |   |   |
| Product costs                                    |   |                                     | 101,470 |   |   |   | 114,861 |   |   |   | 157,545 |   |
| Payroll and benefits                             |   |                                     | 172,533 |   |   |   | 197,612 |   |   |   | 271,933 |   |
| Occupancy                                        |   |                                     | 27,967  |   |   |   | 31,937 |   |   |   | 40,415 |   |
| Other operating expenses                         |   |                                     | 64,029  |   |   |   | 73,496 |   |   |   | 100,182 |   |
| Total costs of company restaurant sales          |   |                                     | 365,999 |   |   |   | 417,906 |   |   |   | 570,075 |   |
| Costs of franchise and license revenue           |   |                                     | 46,987  |   |   |   | 42,626 |   |   |   | 34,933 |   |
| General and administrative expenses              |   |                                     | 55,619  |   |   |   | 57,282 |   |   |   | 60,970 |   |
| Depreciation and amortization                    |   |                                     | 29,637  |   |   |   | 32,343 |   |   |   | 39,766 |   |
| Operating (gains), losses and other charges, net |   |                                     | (4,944  | ) |   |   | (14,483 | ) |   |   | (6,384 | ) |
| Total operating costs and expenses               |   |                                     | 493,298 |   |   |   | 535,674 |   |   |   | 699,360 |   |
| Operating income                                 |   |                                     | 55,168  |   |   |   | 72,429 |   |   |   | 60,911 |   |
| Other expenses:                                  |   |                                     |    |   |   |   |   |   |   |   |   |   |
| Interest expense, net                            |   |                                     | 25,792  |   |   |   | 32,600 |   |   |   | 35,457 |   |
| Other nonoperating (income) expense, net         |   |                                     | 5,282   |   |   |   | (3,125 | ) |   |   | 9,190 |   |
| Total other expenses, net                        |   |                                     | 31,074  |   |   |   | 29,475 |   |   |   | 44,647 |   |
| Net income before income taxes                   |   |                                     | 24,094  |   |   |   | 42,954 |   |   |   | 16,264 |   |
| Provision for income taxes                       |   |                                     | 1,381   |   |   |   | 1,400 |   |   |   | 3,522 |   |
| Net income                                       |   | $                                        | 22,713  |   |   | $ | 41,554 |   |   | $ | 12,742 |   |
|                                             |   |                                     |    |   |   |   |   |   |   |   |   |   |
| Net income per share:                            |   |                                     |    |   |   |   |   |   |   |   |   |   |
| Basic                                            |   | $                                        | 0.23    |   |   | $ | 0.43 |   |   | $ | 0.13 |   |
| Diluted                                          |   | $                                        | 0.22    |   |   | $ | 0.42 |   |   | $ | 0.13 |   |
|                                             |   |                                     |    |   |   |   |   |   |   |   |   |   |
| Weighted-average shares outstanding:             |   |                                     |    |   |   |   |   |   |   |   |   |   |
| Basic                                            |   |                                     | 98,902  |   |   |   | 96,318 |   |   |   | 95,230 |   |
| Diluted                                          |   |                                     | 101,391 |   |   |   | 98,499 |   |   |   | 98,842 |   |

----

|                                                                                                                         |   | December 29, 2010 |     |   | December 30, 2009 |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|----------|--------|-------------------|--------|
|                                                                                                                         |   | (In thousands)    |     |
| Assets                                                                                                                       |   |              |     |   |              |   |
| Current Assets:                                                                                                              |   |              |     |   |              |   |
| Cash and cash equivalents                                                                                                    |   | $                 | 29,074   |   |              | $      | 26,525 |   |
| Receivables, less allowance for doubtful accounts of $207 and $171, respectively                                             |   |              | 17,280   |   |              |   | 18,106 |   |
| Inventories                                                                                                                  |   |              | 4,037    |   |              |   | 4,165 |   |
| Assets held for sale                                                                                                         |   |              | 1,933    |   |              |   | — |   |
| Prepaid and other current assets                                                                                             |   |              | 10,162   |   |              |   | 9,549 |   |
| Total Current Assets                                                                                                         |   |              | 62,486   |   |              |   | 58,345 |   |
|                                                                                                                         |   |              |     |   |              |   |   |   |
| Property, net of accumulated depreciation of $247,492 and $258,695, respectively                                             |   |              | 129,518  |   |              |   | 131,484 |   |
|                                                                                                                         |   |              |     |   |              |   |   |   |
| Other Assets:                                                                                                                |   |              |     |   |              |   |   |   |
| Goodwill                                                                                                                     |   |              | 31,308   |   |              |   | 32,440 |   |
| Intangible assets, net                                                                                                       |   |              | 52,054   |   |              |   | 55,110 |   |
| Deferred financing costs, net                                                                                                |   |              | 5,286    |   |              |   | 2,676 |   |
| Other noncurrent assets                                                                                                      |   |              | 30,554   |   |              |   | 32,572 |   |
| Total Assets                                                                                                                 |   | $                 | 311,206  |   |              | $      | 312,627 |   |
|                                                                                                                         |   |              |     |   |              |   |   |   |
| Liabilities                                                                                                                  |   |              |     |   |              |   |   |   |
| Current Liabilities:                                                                                                         |   |              |     |   |              |   |   |   |
| Current maturities of notes and debentures                                                                                   |   | $                 | 2,583    |   |              | $      | 900 |   |
| Current maturities of capital lease obligations                                                                              |   |              | 4,109    |   |              |   | 3,725 |   |
| Accounts payable                                                                                                             |   |              | 25,957   |   |              |   | 22,842 |   |
| Other current liabilities                                                                                                    |   |              | 57,685   |   |              |   | 64,641 |   |
| Total Current Liabilities                                                                                                    |   |              | 90,334   |   |              |   | 92,108 |   |
|                                                                                                                         |   |              |     |   |              |   |   |   |
| Long-Term Liabilities:                                                                                                       |   |              |     |   |              |   |   |   |
| Notes and debentures, less current maturities, net of discount of $3,455 and $0, respectively                                |   |              | 234,143  |   |              |   | 254,357 |   |
| Capital lease obligations, less current maturities                                                                           |   |              | 18,988   |   |              |   | 19,684 |   |
| Liability for insurance claims, less current portion                                                                         |   |              | 18,810   |   |              |   | 21,687 |   |
| Deferred income taxes                                                                                                        |   |              | 13,339   |   |              |   | 13,016 |   |
| Other noncurrent liabilities and deferred credits                                                                            |   |              | 39,304   |   |              |   | 39,273 |   |
| Total Long-Term Liabilities                                                                                                  |   |              | 324,584  |   |              |   | 348,017 |   |
| Total Liabilities                                                                                                            |   |              | 414,918  |   |              |   | 440,125 |   |
|                                                                                                                         |   |              |     |   |              |   |   |   |
| Commitments and contingencies                                                                                                |   |              |     |   |              |   |   |   |
|                                                                                                                         |   |              |     |   |              |   |   |   |
| Shareholders' Deficit                                                                                                        |   |              |     |   |              |   |   |   |
| Common stock $0.01 par value; shares authorized - 135,000; issued and outstanding: 2010 – 100,073; 2009 – 96,613 |   |              | 1,001    |   |              |   | 966 |   |
| Paid-in capital                                                                                                              |   |              | 548,490  |   |              |   | 542,576 |   |
| Deficit                                                                                                                      |   |              | (630,114 | )      |              |   | (652,827 | ) |
| Accumulated other comprehensive loss, net of tax                                                                             |   |              | (19,199  | )      |              |   | (18,213 | ) |
|                                                                                                                         |   |              | (99,822  | )      |              |   | (127,498 | ) |
| Treasury stock, at cost, 1,037 and 0 shares, respectively                                                                    |   |              | (3,890   | )      |              |   | — |   |
| Total Shareholders' Deficit                                                                                                  |   |              | (103,712 | )      |              |   | (127,498 | ) |
| Total Liabilities and Shareholders' Deficit                                                                                  |   | $                 | 311,206  |   |              | $      | 312,627 |   |

----

|                                                                    |   | Common Stock         |    |   | Treasury Stock |   |    |  Paid-in |   |   |          |    |   | AccumulatedOtherComprehensive |          |   | TotalShareholders’ |   |
|-------------------------------------------------------------------------|--------|----------------------|---------|--------|----------------|--------|---------|---------------|--------|--------|---------------|---------|--------|-------------------------------|---------------|--------|--------------------------|--------|
|                                                                    |   | Shares               |    |   | Amount         |   |    | Shares        |   |   | Amount        |    |   | Capital                       |          |   | (Deficit)                |   |   | Loss, Net |   |   | Deficit |   |
|                                                                    |   |  (In thousands) |    |
| Balance, December 26, 2007                                              |   |                 | 94,626  |   |           | $      | 946     |          |   |   | —       |    |   | $                             | —       |   |                     | $      | 533,612 |   |   | $ | (707,123 | ) |   | $ | (13,144 | ) |   | $ | (185,709 | ) |
| Comprehensive income:                                                   |   |                 |    |   |           |   |    |          |   |   |          |    |   |                          |          |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                              |   |                 | — |   |           |   | — |          |   |   | —       |    |   |                          | —       |   |                     |   | — |   |   |   | 12,742 |   |   |   | — |   |   |   | 12,742 |   |
| Amortization of unrealized loss on hedged transactions, net of tax |   |                 | — |   |           |   | — |          |   |   | —       |    |   |                          | —       |   |                     |   | — |   |   |   | — |   |   |   | 1,166 |   |   |   | 1,166 |   |
| Minimum pension liability adjustment, net of tax                        |   |                 | — |   |           |   | — |          |   |   | —       |    |   |                          | —       |   |                     |   | — |   |   |   | — |   |   |   | (12,943 | ) |   |   | (12,943 | ) |
| Comprehensive income                                                    |   |                 | — |   |           |   | — |          |   |   | —       |    |   |                          | —       |   |                     |   | — |   |   |   | 12,742 |   |   |   | (11,777 | ) |   |   | 965 |   |
| Share-based compensation on equity classified awards                    |   |                 | — |   |           |   | — |          |   |   | —       |    |   |                          | —       |   |                     |   | 4,025 |   |   |   | — |   |   |   | — |   |   |   | 4,025 |   |
| Issuance of common stock for share-based compensation                   |   |                 | 385     |   |           |   | 4       |          |   |   | —       |    |   |                          | —       |   |                     |   | 286 |   |   |   | — |   |   |   | — |   |   |   | 290 |   |
| Exercise of common stock options                                        |   |                 | 702     |   |           |   | 7       |          |   |   |  — |    |   |                          |  — |   |                     |   | 988 |   |   |   | — |   |   |   | — |   |   |   | 995 |   |
| Balance, December 31, 2008                                              |   |                 | 95,713  |   |           |   | 957     |          |   |   | —       |    |   |                          | —       |   |                     |   | 538,911 |   |   |   | (694,381 | ) |   |   | (24,921 | ) |   |   | (179,434 | ) |
| Comprehensive income:                                                   |   |                 |    |   |           |   |    |          |   |   |          |    |   |                          |          |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                              |   |                 | — |   |           |   | — |          |   |   | —       |    |   |                          | —       |   |                     |   | — |   |   |   | 41,554 |   |   |   | — |   |   |   | 41,554 |   |
| Amortization of unrealized loss on hedged transactions, net of tax |   |                 | — |   |           |   | — |          |   |   | —       |    |   |                          | —       |   |                     |   | — |   |   |   | — |   |   |   | 1,020 |   |   |   | 1,020 |   |
| Minimum pension liability adjustment, net of tax                        |   |                 | — |   |           |   | — |          |   |   | —       |    |   |                          | —       |   |                     |   | — |   |   |   | — |   |   |   | 5,688 |   |   |   | 5,688 |   |
| Comprehensive income                                                    |   |                 | — |   |           |   | — |          |   |   | —       |    |   |                          | —       |   |                     |   | — |   |   |   | 41,554 |   |   |   | 6,708 |   |   |   | 48,262 |   |
| Share-based compensation on equity classified awards                    |   |                 | — |   |           |   | — |          |   |   | —       |    |   |                          | —       |   |                     |   | 3,567 |   |   |   | — |   |   |   | — |   |   |   | 3,567 |   |
| Issuance of common stock for share-based compensation                   |   |                 | 806     |   |           |   | 8       |          |   |   | —       |    |   |                          | —       |   |                     |   | (8 | ) |   |   | — |   |   |   | — |   |   |   | — |   |
| Exercise of common stock options                                        |   |                 | 94      |   |           |   | 1       |          |   |   | —       |    |   |                          | —       |   |                     |   | 106 |   |   |   | — |   |   |   | — |   |   |   | 107 |   |
| Balance, December 30, 2009                                              |   |                 | 96,613  |   |           |   | 966     |          |   |   | —       |    |   |                          | —       |   |                     |   | 542,576 |   |   |   | (652,827 | ) |   |   | (18,213 | ) |   |   | (127,498 | ) |
| Comprehensive income:                                                   |   |                 |    |   |           |   |    |          |   |   |          |    |   |                          |          |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                              |   |                 | — |   |           |   | — |          |   |   | —       |    |   |                          | —       |   |                     |   | — |   |   |   | 22,713 |   |   |   | — |   |   |   | 22,713 |   |
| Amortization of unrealized loss on hedged transactions, net of tax |   |                 | — |   |           |   | — |          |   |   | —       |    |   |                          | —       |   |                     |   | — |   |   |   | — |   |   |   | 167 |   |   |   | 167 |   |
| Minimum pension liability adjustment, net of tax                        |   |                 | — |   |           |   | — |          |   |   | —       |    |   |                          | —       |   |                     |   | — |   |   |   | — |   |   |   | (1,153 | ) |   |   | (1,153 | ) |
| Comprehensive income                                                    |   |                 | — |   |           |   | — |          |   |   | —       |    |   |                          | —       |   |                     |   | — |   |   |   | 22,713 |   |   |   | (986 | ) |   |   | 21,727 |   |
| Share-based compensation on equity classified awards                    |   |                 | — |   |           |   | — |          |   |   | —       |    |   |                          | —       |   |                     |   | 1,922 |   |   |   | — |   |   |   | — |   |   |   | 1,922 |   |
| Purchase of treasury stock                                              |   |                 | — |   |           |   | — |          |   |   | (1,037        | )  |   |                          | (3,890        | )      |                     |   | — |   |   |   | — |   |   |   | — |   |   |   | (3,890 | ) |
| Issuance of common stock for share-based compensation                   |   |                 | 573     |   |           |   | 6       |          |   |   | —       |    |   |                          | —       |   |                     |   | (6 | ) |   |   | — |   |   |   | — |   |   |   | — |   |
| Exercise of common stock options                                        |   |                 | 2,887   |   |           |   | 29      |          |   |   | —       |    |   |                          | —       |   |                     |   | 3,998 |   |   |   | — |   |   |   | — |   |   |   | 4,027 |   |
| Balance, December 29, 2010                                              |   |                 | 100,073 |   |           | $      | 1,001   |          |   |   | (1,037        | )  |   | $                             | (3,890        | )      |                     | $      | 548,490 |   |   | $ | (630,114 | ) |   | $ | (19,199 | ) |   | $ | (103,712 | ) |

----

|                                                                                |   | Fiscal Year Ended |     |
|-------------------------------------------------------------------------------------|--------|-------------------|----------|
|                                                                                |   | December 29, 2010 |     |   | December 30, 2009 |   |   | December 31, 2008 |   |
|                                                                                |   | (In thousands)    |     |
| Cash Flows from Operating Activities:                                               |   |              |     |   |   |   |   |   |   |
| Net income                                                                          |   | $                 | 22,713   |   |   | $ | 41,554 |   |   | $ | 12,742 |   |
| Adjustments to reconcile net income to cash flows provided by operating activities: |   |              |     |   |   |   |   |   |   |   |   |   |
| Depreciation and amortization                                                       |   |              | 29,637   |   |   |   | 32,343 |   |   |   | 39,766 |   |
| Operating (gains), losses and other charges, net                                    |   |              | (4,944   | ) |   |   | (14,483 | ) |   |   | (6,384 | ) |
| Amortization of deferred financing costs                                            |   |              | 1,045    |   |   |   | 1,077 |   |   |   | 1,100 |   |
| Amortization of debt discount                                                       |   |              | 160      |   |   |   | — |   |   |   | — |   |
| Loss on early extinguishment of debt                                                |   |              | 4,755    |   |   |   |   109 |   |   |   |   6 |   |
| (Gain) loss on interest rate swap                                              |   |              | 167      |   |   |   | (2,241 | ) |   |   | 5,351 |   |
| Deferred income tax expense                                                         |   |              | 324      |   |   |   | 671 |   |   |   |   2,757 |   |
| Share-based compensation                                                            |   |              | 2,840    |   |   |   | 4,671 |   |   |   | 4,117 |   |
| Changes in assets and liabilities, net of effects of acquisitions and dispositions: |   |              |     |   |   |   |   |   |   |   |   |   |
| Decrease (increase) in assets:                                                      |   |              |     |   |   |   |   |   |   |   |   |   |
| Receivables                                                                         |   |              | (1,713   | ) |   |   | (736 | ) |   |   | (727 | ) |
| Inventories                                                                         |   |              | 128      |   |   |   | 1,290 |   |   |   | 1,030 |   |
| Other current assets                                                                |   |              | (634     | ) |   |   | (17 | ) |   |   | (5 | ) |
| Other assets                                                                        |   |              | (2,534   | ) |   |   | (3,486 | ) |   |   | (2,148 | ) |
| Increase (decrease) in liabilities:                                                 |   |              |     |   |   |   |   |   |   |   |   |   |
| Accounts payable                                                                    |   |              | 1,366    |   |   |   | (1,366 | ) |   |   | (14,838 | ) |
| Accrued salaries and vacations                                                      |   |              | (5,983   | ) |   |   | (3,946 | ) |   |   | (6,408 | ) |
| Accrued taxes                                                                       |   |              | (429     | ) |   |   | (893 | ) |   |   | (861 | ) |
| Other accrued liabilities                                                           |   |              | (4,108   | ) |   |   | (13,323 | ) |   |   | (5,406 | ) |
| Other noncurrent liabilities and deferred credits                                   |   |              | (4,535   | ) |   |   | (7,963 | ) |   |   | (9,609 | ) |
| Net cash flows provided by operating activities                                     |   |              | 38,255   |   |   |   | 33,261 |   |   |   | 20,483 |   |
|                                                                                |   |              |     |   |   |   |   |   |   |   |   |   |
| Cash Flows from Investing Activities:                                               |   |              |     |   |   |   |   |   |   |   |   |   |
| Purchase of property                                                                |   |              | (27,381  | ) |   |   | (18,407 | ) |   |   | (27,880 | ) |
| Proceeds from disposition of property                                               |   |              | 18,680   |   |   |   | 40,658 |   |   |   | 37,541 |   |
| Collections on notes receivable                                                     |   |              | 3,421    |   |   |   |  1,512 |   |   |   |  — |   |
| Net cash flows provided by (used in) investing activities                      |   |              | (5,280   | ) |   |   | 23,763 |   |   |   | 9,661 |   |
|                                                                                |   |              |     |   |   |   |   |   |   |   |   |   |
| Cash Flows from Financing Activities:                                               |   |              |     |   |   |   |   |   |   |   |   |   |
| Net borrowings under credit agreement                                               |   |              | 246,250  |   |   |   | — |   |   |   | — |   |
| Long-term debt payments                                                             |   |              | (268,769 | ) |   |   | (50,452 | ) |   |   | (30,200 | ) |
| Debt transaction costs                                                              |   |              | (2,695   | ) |   |   | — |   |   |   | — |   |
| Deferred financing costs                                                            |   |              | (5,342   | ) |   |   | — |   |   |   | — |   |
| Purchase of treasury stock                                                          |   |              | (3,890   | ) |   |   | — |   |   |   | — |   |
| Proceeds from exercise of stock options                                             |   |              | 4,027    |   |   |   | 107 |   |   |   | 995 |   |
| Tax withholding on share-based payments                                             |   |              | (455     | ) |   |   | (253 | ) |   |   | — |   |
| Net bank overdrafts                                                                 |   |              | 448      |   |   |   |  (943 | ) |   |   |  (1,462 | ) |
| Net cash flows used in financing activities                                         |   |              | (30,426  | ) |   |   | (51,541 | ) |   |   | (30,667 | ) |
|                                                                                |   |              |     |   |   |   |   |   |   |   |   |   |
| Increase (decrease) in cash and cash equivalents                                    |   |              | 2,549    |   |   |   | 5,483 |   |   |   | (523 | ) |
|                                                                                |   |              |     |   |   |   |   |   |   |   |   |   |
| Cash and Cash Equivalents at:                                                       |   |              |     |   |   |   |   |   |   |   |   |   |
| Beginning of year                                                                   |   |              | 26,525   |   |   |   | 21,042 |   |   |   | 21,565 |   |
| End of year                                                                         |   | $                 | 29,074   |   |   | $ | 26,525 |   |   | $ | 21,042 |   |

----

|                                                     |   | 2010   |      |   | 2009   |   |
|----------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Company-owned restaurants, beginning of period           |   |   | 233       |   |   |   | 315 |   |
| Units opened                                             |   |   | 24        |   |   |   | 1 |   |
| Units relocated                                          |   |   | 1         |   |   |   | — |   |
| Units sold to franchisees                                |   |   |  (24 | )      |   |   |  (81 | ) |
| Units closed (including units relocated)                 |   |   | (2        | )      |   |   | (2 | ) |
| End of period                                            |   |   | 232       |   |   |   | 233 |   |
|                                                     |   |   |      |   |   |   |   |   |
| Franchised and licensed restaurants, beginning of period |   |   | 1,318     |   |   |   | 1,226 |   |
| Units opened                                             |   |   | 112       |   |   |   | 39 |   |
| Units relocated                                          |   |   | 4         |   |   |   | 3 |   |
| Units purchased from Company                             |   |   | 24        |   |   |   |  81 |   |
| Units closed (including units relocated)                 |   |   | (32       | )      |   |   | (31 | ) |
| End of period                                            |   |   | 1,426     |   |   |   | 1,318 |   |
| Total restaurants, end of period                         |   |   | 1,658     |   |   |   | 1,551 |   |

----

----

----

|                           |   | Fiscal Year Ended |   |
|--------------------------------|--------|-------------------|--------|
|                           |   | December 29, 2010 |   |   | December 30, 2009 |   |   | December 31, 2008 |   |
|                           |   |              |   |   |   |   |   |   |   |   |   |   |
| Dividend yield                 |   |              | 0.0    | % |   |   | 0.0 | % |   |   | 0.0 | % |
| Expected volatility            |   |              | 60.3   | % |   |   | 57.5 | % |   |   | 50.1 | % |
| Risk-free interest rate        |   |              | 2.2    | % |   |   | 1.8 | % |   |   | 2.7 | % |
| Weighted average expected term |   | 4.7 years         |   |   | 4.6 years |   |   | 4.6 years |   |

----

----

|                                                                                             |   | December 29, 2010 |   |   | December 30, 2009 |   |
|--------------------------------------------------------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                                                                                             |   | (In thousands)    |   |
| Current assets:                                                                                  |   |              |   |   |              |   |
| Receivables:                                                                                     |   |              |   |   |              |   |
| Trade accounts receivable from franchisees                                                       |   | $                 | 11,538 |   |              | $      | 8,415 |   |
| Notes receivable from franchisees and third parties                                              |   |              | 1,020  |   |              |   | 3,565 |   |
| Vendor receivables                                                                               |   |              | 2,571  |   |              |   | 2,566 |   |
| Credit card receivables                                                                          |   |              | 1,206  |   |              |   | 1,231 |   |
| Other                                                                                            |   |              | 1,152  |   |              |   | 2,500 |   |
| Allowance for doubtful accounts                                                                  |   |              | (207   | )      |              |   | (171 | ) |
|                                                                                             |   | $                 | 17,280 |   |              | $      | 18,106 |   |
| Direct financing lease receivables (included as a component of prepaid and other current assets) |   | $                 | 74     |   |              | $      | 79 |   |
|                                                                                             |   |              |   |   |              |   |   |   |
| Noncurrent assets (included as a component of other noncurrent assets):                     |   |              |   |   |              |   |   |   |
| Notes receivable from franchisees and third parties                                              |   | $                 | 1,329  |   |              | $      | 2,005 |   |
| Direct financing lease receivables                                                               |   |              | 5,119  |   |              |   | 6,459 |   |
|                                                                                             |   | $                 | 6,448  |   |              | $      | 8,464 |   |

|                                                               |   | December 29, 2010 |    |   | December 30, 2009 |   |
|--------------------------------------------------------------------|--------|-------------------|---------|--------|-------------------|--------|
|                                                               |   | (In thousands)    |    |
| Land                                                               |   | $                 | 27,328  |   |              | $      | 28,966 |   |
| Buildings and leasehold improvements                               |   |              | 232,583 |   |              |   | 243,832 |   |
| Other property and equipment                                       |   |              | 87,718  |   |              |   | 89,822 |   |
| Total property owned                                               |   |              | 347,629 |   |              |   | 362,620 |   |
| Less accumulated depreciation                                      |   |              | 230,928 |   |              |   | 243,387 |   |
| Property owned, net                                                |   |              | 116,701 |   |              |   | 119,233 |   |
| Buildings, vehicles, and other equipment held under capital leases |   |              | 29,381  |   |              |   | 27,559 |   |
| Less accumulated amortization                                      |   |              | 16,564  |   |              |   | 15,308 |   |
| Property held under capital leases, net                            |   |              | 12,817  |   |              |   | 12,251 |   |
| Total property, net                                                |   | $                 | 129,518 |   |              | $      | 131,484 |   |

----

|                                                           |   | December 29, 2010 |   |   | December 30, 2009 |   |
|----------------------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                                                           |   | (In thousands)    |   |
| Land                                                           |   | $                 | 11,677 |   |              | $      | 10,973 |   |
| Buildings and leasehold improvements                           |   |              | 38,853 |   |              |   | 34,821 |   |
| Total property owned, leased to franchisees               |   |              | 50,530 |   |              |   |  45,794 |   |
| Less accumulated depreciation                                  |   |              | 34,398 |   |              |   | 30,672 |   |
| Property owned, leased to franchisees, net                |   |              | 16,132 |   |              |   | 15,122 |   |
| Buildings held under capital leases, leased to franchisees     |   |              | 15,644 |   |              |   | 15,227 |   |
| Less accumulated amortization                                  |   |              | 10,047 |   |              |   | 9,360 |   |
| Property held under capital leases, leased to franchisees, net |   |              | 5,597  |   |              |   | 5,867 |   |
| Total property leased to franchisees, net                      |   | $                 | 21,729 |   |              | $      | 20,989 |   |

|                                           |   | December 29, 2010 |   |   | December 30, 2009 |   |
|------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                                           |   | (In thousands)    |   |
| Balance, beginning of year                     |   | $                 | 32,440 |   |              | $      | 34,609 |   |
| Write-offs associated with sale of restaurants |   |              | (982   | )      |              |   | (2,169 | ) |
| Reclassification to assets held for sale       |   |              | (150   | )      |              |   | — |   |
| Balance, end of year                           |   | $                 | 31,308 |   |              | $      | 32,440 |   |

|                                     |   | December 29, 2010     |   |   | December 30, 2009        |   |
|------------------------------------------|--------|-----------------------|--------|--------|--------------------------|--------|
|                                     |   | Gross Carrying Amount |   |   | Accumulated Amortization |   |   | Gross Carrying Amount |   |   | Accumulated Amortization |   |
|                                     |   | (In thousands)        |   |
| Goodwill                                 |   | $                     | 31,308 |   |                     | $      | — |   |   | $ | 32,440 |   |   | $ | — |   |
|                                     |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Intangible assets with indefinite lives: |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Trade names                              |   | $                     | 42,493 |   |                     | $      | — |   |   | $ | 42,454 |   |   | $ | — |   |
| Liquor licenses                          |   |                  | 164    |   |                     |   | — |   |   |   | 176 |   |   |   | — |   |
| Intangible assets with definite lives:   |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Franchise and license agreements         |   |                  | 46,088 |   |                     |   | 36,769 |   |   |   | 50,787 |   |   |   | 38,397 |   |
| Foreign license agreements               |   |                  | 241    |   |                     |   | 163 |   |   |   | 241 |   |   |   | 151 |   |
| Intangible assets                        |   | $                     | 88,986 |   |                     | $      | 36,932 |   |   | $ | 93,658 |   |   | $ | 38,548 |   |
|                                     |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Other assets with definite lives:        |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Software development costs               |   | $                     | 33,673 |   |                     | $      | 30,426 |   |   | $ | 32,806 |   |   | $ | 28,401 |   |

|   |   | (In thousands) |   |
|--------|--------|---------------------|--------|
| 2011   |   | $                   | 2,626  |   |
| 2012   |   |                | 2,262  |   |
| 2013   |   |                | 1,953  |   |
| 2014   |   |                | 1,398  |   |
| 2015   |   |                | 834    |   |

----

|                                                                           |   | December 29, 2010 |   |   | December 30, 2009 |   |
|--------------------------------------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                                                                           |   | (In thousands)    |   |
| Accrued salaries and vacation                                                  |   | $                 | 16,056 |   |              | $      | 21,453 |   |
| Accrued insurance, primarily current portion of liability for insurance claims |   |              | 9,603  |   |              |   | 10,814 |   |
| Accrued taxes                                                                  |   |              | 7,525  |   |              |   | 7,953 |   |
| Accrued interest                                                               |   |              | 4,152  |   |              |   | 4,845 |   |
| Restructuring charges and exit costs                                           |   |              | 1,508  |   |              |   | 2,901 |   |
| Accrued advertising                                                            |   |              | 5,471  |   |              |   | 3,697 |   |
| Other                                                                          |   |              | 13,370 |   |              |   | 12,978 |   |
| Other current liabilities                                                      |   | $                 | 57,685 |   |              | $      | 64,641 |   |

|                                             |   | Fiscal Year Ended |   |
|--------------------------------------------------|--------|-------------------|--------|
|                                             |   | December 29, 2010 |   |   | December 30, 2009 |   |   | December 31, 2008 |   |
|                                             |   | (In thousands)    |   |
| Gains on sales of assets and other, net          |   | $                 | (9,481 | ) |   | $ | (19,429 | ) |   | $ | (18,701 | ) |
| Restructuring charges and exit costs             |   |              | 4,162  |   |   |   | 3,960 |   |   |   | 9,022 |   |
| Impairment charges                               |   |              | 375    |   |   |   | 986 |   |   |   | 3,295 |   |
| Operating (gains), losses and other charges, net |   | $                 | (4,944 | ) |   | $ | (14,483 | ) |   | $ | (6,384 | ) |

|                                                                       |   | Fiscal Year Ended |    |
|----------------------------------------------------------------------------|--------|-------------------|---------|
|                                                                       |   | December 29, 2010 |    |   | December 30, 2009 |   |   | December 31, 2008 |   |
|                                                                       |   | Net Proceeds      |    |   | Gains |   |   | Net Proceeds |   |   | Gains |   |   | Net Proceeds |   |   | Gains |   |
|                                                                       |   | (In thousands)    |    |
| Sales of restaurant operations and related real estate to franchisees |   | $                 | 9,758   |   |   | $ | 3,766 |   |   | $ | 30,309 |   |   | $ | 12,498 |   |   | $ | 35,520 |   |   | $ | 15,224 |   |
| Sales of other real estate assets                                          |   |              | 9,142   |   |   |   | 5,592 |   |   |   | 14,014 |   |   |   | 6,695 |   |   |   | 4,691 |   |   |   | 3,354 |   |
| Recognition of deferred gains                                              |   |              | — |   |   |   | 123 |   |   |   | — |   |   |   | 236 |   |   |   | — |   |   |   | 123 |   |
| Total                                                                      |   | $                 | 18,900  |   |   | $ | 9,481 |   |   | $ | 44,323 |   |   | $ | 19,429 |   |   | $ | 40,211 |   |   | $ | 18,701 |   |

|                                       |   | Fiscal Year Ended |   |
|--------------------------------------------|--------|-------------------|--------|
|                                       |   | December 29, 2010 |   |   | December 30, 2009 |   |   | December 31, 2008 |   |
|                                       |   | (In thousands)    |   |
| Exit costs                                 |   | $                 | 1,247  |   |   | $ | 698 |   |   | $ | 3,435 |   |
| Severance and other restructuring charges  |   |              | 2,915  |   |   |   | 3,262 |   |   |   | 5,587 |   |
| Total restructuring charges and exit costs |   | $                 | 4,162  |   |   | $ | 3,960 |   |   | $ | 9,022 |   |

----

|                                                       |   | December 29, 2010 |   |   | December 30, 2009 |   |
|------------------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                                                       |   | (In thousands)    |   |
| Balance, beginning of year                                 |   | $                 | 6,555  |   |              | $      | 9,239 |   |
| Provisions for units closed during the year (1)            |   |              | 755    |   |              |   | 683 |   |
| Changes in estimates of accrued exit costs, net (1)        |   |              | 492    |   |              |   | 15 |   |
| Payments, net of sublease receipts                         |   |              | (3,275 | )      |              |   | (4,098 | ) |
| Reclassification of certain lease liabilities, net         |   |              | (136   | )      |              |   | — |   |
| Interest accretion                                         |   |              | 557    |   |              |   | 716 |   |
| Balance, end of year                                       |   |              | 4,948  |   |              |   | 6,555 |   |
| Less current portion included in other current liabilities |   |              | 1,400  |   |              |   | 2,003 |   |
| Long-term portion included in other noncurrent liabilities |   | $                 | 3,548  |   |              | $      | 4,552 |   |

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

|                                   |   | (In thousands) |   |
|----------------------------------------|--------|---------------------|--------|
| 2011                                   |   | $                   | 1,606  |   |
| 2012                                   |   |                | 1,116  |   |
| 2013                                   |   |                | 757    |   |
| 2014                                   |   |                | 630    |   |
| 2015                                   |   |                | 341    |   |
| Thereafter                             |   |                | 1,197  |   |
| Total                                  |   |                | 5,647  |   |
| Less imputed interest                  |   |                | 699    |   |
| Present value of exit cost liabilities |   | $                   | 4,948  |   |

|                                                       |   | December 29, 2010 |   |   | December 30, 2009 |   |
|------------------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                                                       |   | (In thousands)    |   |
| Total minimum rents receivable                             |   | $                 | 17,969 |   |              | $      | 23,981 |   |
| Estimated residual value of leased property (unguaranteed) |   |              | 1,900  |   |              |   | 2,300 |   |
|                                                       |   |              | 19,869 |   |              |   | 26,281 |   |
| Less unearned income                                       |   |              | 14,676 |   |              |   | 19,743 |   |
| Net investment in direct financing leases receivable       |   | $                 | 5,193  |   |              | $      | 6,538 |   |

----

|                                       |   | Commitments    |   |   | Lease Receipts |   |
|--------------------------------------------|--------|----------------|--------|--------|----------------|--------|
|                                       |   | Capital        |   |   | Operating      |   |   | Direct Financing |   |   | Operating |   |
|                                       |   | (In thousands) |   |
| 2011                                       |   | $              | 7,675  |   |           | $      | 38,731 |   |   | $ | 1,061 |   |   | $ | 34,119 |   |
| 2012                                       |   |           | 7,112  |   |           |   | 35,319 |   |   |   | 1,061 |   |   |   | 32,455 |   |
| 2013                                       |   |           | 5,887  |   |           |   | 31,012 |   |   |   | 1,061 |   |   |   | 30,638 |   |
| 2014                                       |   |           | 4,748  |   |           |   | 27,940 |   |   |   | 1,061 |   |   |   | 28,843 |   |
| 2015                                       |   |           | 3,217  |   |           |   | 24,166 |   |   |   | 1,061 |   |   |   | 25,855 |   |
| Thereafter                                 |   |           | 8,961  |   |           |   | 112,976 |   |   |   | 12,664 |   |   |   | 150,387 |   |
| Total                                      |   |           | 37,600 |   |           | $      | 270,144 |   |   | $ | 17,969 |   |   | $ | 302,297 |   |
| Less imputed interest                      |   |           | 14,503 |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Present value of capital lease obligations |   | $              | 23,097 |   |           |   |   |   |   |   |   |   |   |   |   |   |

|                 |   | Fiscal Year Ended |   |
|----------------------|--------|-------------------|--------|
|                 |   | December 29, 2010 |   |   | December 30, 2009 |   |   | December 31, 2008 |   |
|                 |   | (In thousands)    |   |
| Rent expense:   |   |              |   |   |   |   |   |   |   |   |   |   |
| Base rents           |   | $                 | 42,575 |   |   | $ | 43,585 |   |   | $ | 43,405 |   |
| Contingent rents     |   |              | 4,374  |   |   |   | 4,657 |   |   |   | 5,884 |   |
| Total rental expense |   | $                 | 46,949 |   |   | $ | 48,242 |   |   | $ | 49,289 |   |
| Rental income:       |   |              |   |   |   |   |   |   |   |   |   |   |
| Base rents           |   | $                 | 35,882 |   |   | $ | 34,265 |   |   | $ |  28,705 |   |
| Contingent rents     |   |              | 2,660  |   |   |   | 3,299 |   |   |   |  3,660 |   |
| Total rental income  |   | $                 | 38,542 |   |   | $ |  37,564 |   |   | $ |  32,365 |   |
| Net rent expense:    |   |              |   |   |   |   |   |   |   |   |   |   |
| Base rents           |   | $                 | 6,693  |   |   | $ |  9,320 |   |   | $ |  14,700 |   |
| Contingent rents     |   |              | 1,714  |   |   |   |  1,358 |   |   |   |  2,224 |   |
| Net rental expense   |   | $                 | 8,407  |   |   | $ | 10,678 |   |   | $ |  16,924 |   |

|                                         |   | Fair Value Measurements as of December 29, 2010 |
|----------------------------------------------|--------|-------------------------------------------------|
|                                         |   | Total                                           |   |   | Quoted Prices in Active Markets for Identical Assets/Liabilities(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   | Valuation Technique |
|                                         |   | (In thousands)                                  |   |   |
| Deferred compensation plan investments  |   | $                                               | 5,926 |   |   | $ | 5,926 |   |   | $ | — |   |   | $ | — |   | market approach |
| Total                                        |   | $                                               | 5,926 |   |   | $ | 5,926 |   |   | $ | — |   |   | $ | — |   |   |

|                                         |   | Fair Value Measurements as of December 30, 2009 |
|----------------------------------------------|--------|-------------------------------------------------|
|                                         |   | Total                                           |   |   | Quoted Prices in Active Markets for Identical Assets/Liabilities(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   | Valuation Technique |
|                                         |   | (In thousands)                                  |   |   |
| Deferred compensation plan investments  |   | $                                               | 5,721 |   |   | $ | 5,721 |   |   | $ | — |   |   | $ | — |   | market approach |
| Total                                        |   | $                                               | 5,721 |   |   | $ | 5,721 |   |   | $ | — |   |   | $ | — |   |   |

----

|                                               |   | December 29, 2010 |    |   | December 30, 2009 |   |
|----------------------------------------------------|--------|-------------------|---------|--------|-------------------|--------|
|                                               |   | (In thousands)    |    |
| Book value:                                        |   |              |    |   |              |   |
| Fixed rate long-term debt                          |   | $                 | 181     |   |              | $      | 175,257 |   |
| Variable rate long-term debt                       |   |              | 240,000 |   |              |   | 80,000 |   |
| Long term debt excluding capital lease obligations |   | $                 | 240,181 |   |              | $      | 255,257 |   |
|                                               |   |              |    |   |              |   |   |   |
| Estimate fair value:                               |   |              |    |   |              |   |   |   |
| Fixed rate long-term debt                          |   | $                 | 181     |   |              | $      | 179,194 |   |
| Variable rate long-term debt                       |   |              | 243,000 |   |              |   | 80,000 |   |
| Long term debt excluding capital lease obligations |   | $                 | 243,181 |   |              | $      | 259,194 |   |

|                                                                                                                                |   | December 29, 2010 |    |    | December 30, 2009 |   |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|---------|---------|-------------------|--------|
|                                                                                                                                |   | (In thousands)    |    |
| New Credit Facility:                                                                                                                |   |              |    |    |              |   |
| Revolver loans outstanding due September 30, 2015                                                                                   |   | $                 | — |    |              | $      | — |   |
| Term loans due September 30, 2016                                                                                                   |   |              | 240,000 |    |              |   | — |   |
| Old Credit Facility (repaid during the year ended December 29, 2010):                                                          |   |              |    |    |              |   |   |   |
| Revolver loans outstanding due December 15, 2011                                                                                    |   |              | — |    |              |   | — |   |
| Term loans due March 31, 2012                                                                                                       |   |              | — |    |              |   | 80,000 |   |
| Notes and debentures (repaid during the year ended December 29, 2010):                                                              |   |              |    |    |              |   |   |   |
| 10% Senior Notes due October 1, 2012, interest payable semi-annually                                                                |   |              | — |    |              |   | 175,000 |   |
| Other notes payable, maturing 1/1/2013, payable in monthly installments     with an interest rate of 9.17% |   |              | 181     |    |              |   | 257 |   |
| Capital lease obligations                                                                                                           |   |              | 23,097  |    |              |   | 23,409 |   |
|    Total long-term debt                                                                                                   |   |              | 263,278 |    |              |   | 278,666 |   |
| Unamortized discount                                                                                                                |   |              | (3,455  | )  |              |   | — |   |
|    Total long-term debt, net                                                                                              |   |              | 259,823 |    |              |   |   |   |
| Less current maturities and mandatory prepayments                                                                                   |   |              | 6,692   |    |              |   | 4,625 |   |
| Noncurrent portion of long-term debt                                                                                                |   | $                 | 253,131 |    |              | $      | 274,041 |   |

|                                                      |   | (In thousands) |    |
|-----------------------------------------------------------|--------|----------------|---------|
| 2011                                                      |   | $              | 2,583   |   |
| 2012                                                      |   |           | 2,590   |   |
| 2013                                                      |   |           | 2,508   |   |
| 2014                                                      |   |           | 2,500   |   |
| 2015 and thereafter                                       |   |           | 230,000 |   |
| Total long-term debt, excluding capital lease obligations |   | $              | 240,181 |   |

----

----

|                                                                                        |   | (In thousands) |    |
|---------------------------------------------------------------------------------------------|--------|----------------|---------|
| Fair value of the interest rate swap, December 31, 2008                                     |   | $              | (4,545  | ) |
| Change in the fair value of the interest rate swap (recorded in other nonoperating expense) |   |           | 3,261   |   |
| Termination of a portion of the swap                                                        |   |           | 1,284   |   |
| Fair value of the interest rate swap, December 30, 2009                                     |   | $              | — |   |

|                                                                                                                             |   | December 29, 2010 |    |   | December 30, 2009 |   |   | December 31, 2008 |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|---------|--------|-------------------|--------|--------|-------------------|--------|
|                                                                                                                             |   | (In thousands)    |    |
| Realized gains (losses):                                                                                                         |   |              |    |   |              |   |   |              |   |
| Interest rate swap - included as a component of interest expense                                                                 |   | $                 | — |   |              | $      | (3,930 | )                 |   | $ | (1,402 | ) |
| Natural gas contracts - included as a component of utility expense, which is included in other operating expenses |   | $                 | — |   |              | $      | (1,484 | )                 |   | $ | (556 | ) |
|                                                                                                                             |   |              |    |   |              |   |   |              |   |   |   |   |
| Unrealized gains (losses) included as a component of nonoperating expense:                                                       |   |              |    |   |              |   |   |              |   |   |   |   |
| Interest rate swap                                                                                                               |   | $                 | (167    | )      |              | $      | 2,241  |              |   | $ | (5,351 | ) |
| Natural gas contracts                                                                                                            |   | $                 | — |   |              | $      | 811    |              |   | $ | (811 | )  |

----

|                                           |   | Pension Plan      |    |   | Other Defined Benefit Plans |   |
|------------------------------------------------|--------|-------------------|---------|--------|-----------------------------|--------|
|                                           |   | December 29, 2010 |    |   | December 30, 2009           |   |   | December 29, 2010 |   |   | December 30, 2009 |   |
|                                           |   | (In thousands)    |    |
| Change in Benefit Obligation:                  |   |              |    |   |                        |   |   |   |   |   |   |   |
| Benefit obligation at beginning of year        |   | $                 | 58,830  |   |                        | $      | 57,298 |   |   | $ | 2,424 |   |   | $ | 2,553 |   |
| Service cost                                   |   |              | 375     |   |                        |   | 390 |   |   |   | — |   |   |   | — |   |
| Interest cost                                  |   |              | 3,431   |   |                        |   | 3,452 |   |   |   | 139 |   |   |   | 151 |   |
| Actuarial losses (gains)                       |   |              | 3,838   |   |                        |   | 1,018 |   |   |   | 125 |   |   |   | 98 |   |
| Settlement loss                                |   |              | — |   |                        |   | — |   |   |   | — |   |   |   | 16 |   |
| Benefits paid                                  |   |              | (3,349  | )      |                        |   | (3,328 | ) |   |   | (195 | ) |   |   | (394 | ) |
| Benefit obligation at end of year              |   | $                 | 63,125  |   |                        | $      | 58,830 |   |   | $ | 2,493 |   |   | $ | 2,424 |   |
| Accumulated benefit obligation                 |   | $                 | 63,125  |   |                        | $      |  58,830 |   |   | $ | 2,493 |   |   | $ | 2,424 |   |
|                                           |   |              |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Change in Plan Assets:                         |   |              |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Fair value of plan assets at beginning of year |   | $                 | 51,128  |   |                        | $      | 44,451 |   |   | $ | — |   |   | $ | — |   |
| Actual return on plan assets                   |   |              | 5,801   |   |                        |   | 8,933 |   |   |   | — |   |   |   | — |   |
| Employer contributions                         |   |              | — |   |                        |   | 1,072 |   |   |   | 195 |   |   |   | 394 |   |
| Benefits paid                                  |   |              | (3,349  | )      |                        |   | (3,328 | ) |   |   | (195 | ) |   |   | (394 | ) |
| Fair value of plan assets at end of year       |   | $                 | 53,580  |   |                        | $      | 51,128 |   |   | $ | — |   |   | $ | — |   |
|                                           |   |              |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Reconciliation of Funded Status:               |   |              |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Funded status                                  |   | $                 | (9,545  | )      |                        | $      | (7,702 | ) |   | $ | (2,493 | ) |   | $ | (2,424 | ) |

|                                                   |   | Pension Plan      |    |   | Other Defined Benefit Plans |   |
|--------------------------------------------------------|--------|-------------------|---------|--------|-----------------------------|--------|
|                                                   |   | December 29, 2010 |    |   | December 30, 2009           |   |   | December 29, 2010 |   |   | December 30, 2009 |   |
|                                                   |   | (In thousands)    |    |
| Other current liabilities                         |   | $                 | — |   |                        | $      | — |   |   | $ | (302 | ) |   | $ | (221 | ) |
| Other noncurrent liabilities and deferred credits |   |              | (9,545  | )      |                        |   | (7,702 | ) |   |   | (2,191 | ) |   |   | (2,203 | ) |
| Net amount recognized                             |   | $                 | (9,545  | )      |                        | $      | (7,702 | ) |   | $ | (2,493 | ) |   | $ | (2,424 | ) |

|                                                |   | Pension Plan      |    |   | Other Defined Benefit Plans |   |
|-----------------------------------------------------|--------|-------------------|---------|--------|-----------------------------|--------|
|                                                |   | December 29, 2010 |    |   | December 30, 2009           |   |   | December 29, 2010 |   |   | December 30, 2009 |   |
|                                                |   | (In thousands)    |    |
| Net loss                                            |   | $                 | (18,599 | )      |                        |   | (17,549 | ) |   |   | (600 | ) |   |   | (496 | ) |
| Accumulated other comprehensive loss                |   | $                 | (18,599 | )      |                        |   | (17,549 | ) |   |   | (600 | ) |   |   | (496 | ) |
| Cumulative employer contributions in excess of cost |   |              | 9,054   |   |                        |   | 9,847 |   |   |   | (1,893 | ) |   |   | (1,928 | ) |
| Net amount recognized                               |   | $                 | (9,545  | )      |                        |   | (7,702 | ) |   |   | (2,493 | ) |   |   | (2,424 | ) |

----

|                                     |   | Fiscal Year Ended |    |
|------------------------------------------|--------|-------------------|---------|
|                                     |   | December 29, 2010 |    |   | December 30, 2009 |   |
|                                     |   | (In thousands)    |    |
| Pension Plan:                            |   |              |    |   |   |   |
| Balance, beginning of year               |   | $                 | (17,549 | ) |   | $ | (23,307 | ) |
| Benefit obligation actuarial gain (loss) |   |              | (3,838  | ) |   |   | (1,018 | ) |
| Net gain (loss)                          |   |              | 1,873   |   |   |   | 5,469 |   |
| Amortization of net loss                 |   |              | 915     |   |   |   | 1,307 |   |
| Balance, end of year                     |   | $                 | (18,599 | ) |   | $ | (17,549 | ) |
|                                     |   |              |    |   |   |   |   |   |
| Other Defined Benefit Plans:             |   |              |    |   |   |   |   |   |
| Balance, beginning of year               |   | $                 | (497    | ) |   | $ | (427 | ) |
| Benefit obligation actuarial gain (loss) |   |              | (125    | ) |   |   | (98 | ) |
| Net gain (loss)                          |   |              | — |   |   |   | 13 |   |
| Amortization of net loss                 |   |              | 22      |   |   |   | 15 |   |
| Balance, end of year                     |   | $                 | (600    | ) |   | $ | (497 | ) |

|                                   |   | Fiscal Year Ended |    |
|----------------------------------------|--------|-------------------|---------|
|                                   |   | December 29, 2010 |    |   | December 30, 2009 |   |   | December 31, 2008 |   |
|                                   |   | (In thousands)    |    |
| Pension Plan:                          |   |              |    |   |   |   |   |   |   |   |   |   |
| Service cost                           |   | $                 | 375     |   |   | $ | 390 |   |   | $ | 350 |   |
| Interest cost                          |   |              | 3,431   |   |   |   | 3,452 |   |   |   | 3,388 |   |
| Expected return on plan assets         |   |              | (3,928  | ) |   |   | (3,464 | ) |   |   | (3,877 | ) |
| Amortization of net loss               |   |              | 915     |   |   |   | 1,307 |   |   |   | 601 |   |
| Net periodic benefit cost              |   | $                 | 793     |   |   | $ | 1,685 |   |   | $ | 462 |   |
|                                   |   |              |    |   |   |   |   |   |   |   |   |   |
| Other comprehensive (income) loss |   | $                 | 1,050   |   |   | $ | (5,758 | ) |   | $ | 12,982 |   |
|                                   |   |              |    |   |   |   |   |   |   |   |   |   |
| Other Defined Benefit Plans:           |   |              |    |   |   |   |   |   |   |   |   |   |
| Service cost                           |   | $                 | — |   |   | $ | — |   |   | $ | — |   |
| Interest cost                          |   |              | 138     |   |   |   | 151 |   |   |   | 194 |   |
| Amortization of net loss               |   |              | 22      |   |   |   | 15 |   |   |   | 19 |   |
| Settlement loss recognized             |   |              | — |   |   |   | 29 |   |   |   | 58 |   |
| Net periodic benefit cost              |   | $                 | 160     |   |   | $ | 195 |   |   | $ | 271 |   |
|                                   |   |              |    |   |   |   |   |   |   |   |   |   |
| Other comprehensive (income) loss      |   | $                 | 103     |   |   | $ | 70 |   |   | $ | (39 | ) |

|             |   | December 29, 2010 |   |   | December 30, 2009 |   |
|------------------|--------|-------------------|--------|--------|-------------------|--------|
| Discount rate    |   |              | 5.42   | %      |              |   | 5.99 | % |
| Measurement date |   | 12/29/10          |   |   | 12/30/09          |   |

----

|                                        |   | December 29, 2010 |   |   | December 30, 2009 |   |   | December 31, 2008 |   |
|---------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|--------|-------------------|--------|
| Discount rate                               |   |              | 5.99   | %      |              |   | 6.19   | %                 |   |   | 6.57 | % |
| Rate of increase in compensation levels     |   | N/A               |   |   | N/A               |   |   | N/A               |   |
| Expected long-term rate of return on assets |   |              | 8.00   | %      |              |   | 8.00   | %                 |   |   | 8.00 | % |
| Measurement date                       |   | 12/29/10          |   |   | 12/30/09          |   |   | 12/31/08          |   |

|                        |   | Fair Value Measurements as of December 29, 2010 |   |
|-----------------------------|--------|-------------------------------------------------|--------|
| Asset Category              |   | Total                                           |   |   | Quoted Prices in Active Markets for Identical Assets/Liabilities(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
|                        |   | (In thousands)                                  |   |
| Cash equivalents       |   | $                                               | 690    |   |   | $ | — |   |   | $ | 690 |   |   | $ | — |   |
| Equity securities:          |   |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. large-cap (a)          |   |                                            | 14,368 |   |   |   | 14,368 |   |   |   | — |   |   |   | — |   |
| U.S. mid-cap (b)            |   |                                            | 4,240  |   |   |   | 4,240 |   |   |   | — |   |   |   | — |   |
| U.S. small-cap (c)          |   |                                            | 1,055  |   |   |   | 1,055 |   |   |   | — |   |   |   | — |   |
| International large-cap     |   |                                            | 8,542  |   |   |   | 8,542 |   |   |   | — |   |   |   | — |   |
| Fixed income securities:    |   |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasuries             |   |                                            | 2,397  |   |   |   | 2,397 |   |   |   | — |   |   |   | — |   |
| Corporate bonds (d)         |   |                                            | 18,878 |   |   |   | 18,878 |   |   |   | — |   |   |   | — |   |
| Other types of investments: |   |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commingled funds (e)        |   |                                            | 3,410  |   |   |   | — |   |   |   | 3,410 |   |   |   | — |   |
| Total                       |   | $                                               | 53,580 |   |   | $ | 49,480 |   |   | $ | 4,100 |   |   | $ | — |   |

| (a)       | The majority of this category represents a fund with the objective of approximating the return of the S&P 500 Index.  The remaining securities include both a large-value fund and a large-growth fund investing in diverse industries. |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b)       | This category includes both a mid-growth fund with the objective of outperforming the Russell Mid Cap Growth Index and a mid-value fund investing in diverse industries.                                                                                        |
| (c)       | This category includes both a small-value fund and a small-growth fund investing in diverse industries.                                                                                                                                                         |
| (d)  | This category includes intermediate and long-term investment grade bonds from diverse industries.                                                                                                                                                               |
| (e)       | This category represents a fund of well diversified hedged mutual funds with the objective of providing a low-volatility means to access equity-like returns.                                                                                                   |

----

|                        |   | Fair Value Measurements as of December 30, 2009 |   |
|-----------------------------|--------|-------------------------------------------------|--------|
| Asset Category              |   | Total                                           |   |   | Quoted Prices in Active Markets for Identical Assets/Liabilities(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
|                        |   | (In thousands)                                  |   |
| Cash equivalents       |   | $                                               | 1,033  |   |   | $ | — |   |   | $ | 1,033 |   |   | $ | — |   |
| Equity securities:          |   |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. large-cap (a)          |   |                                            | 13,600 |   |   |   | 13,600 |   |   |   | — |   |   |   | — |   |
| U.S. mid-cap (b)            |   |                                            | 4,004  |   |   |   | 4,004 |   |   |   | — |   |   |   | — |   |
| U.S. small-cap (c)          |   |                                            | 1,005  |   |   |   | 1,005 |   |   |   | — |   |   |   | — |   |
| International large-cap     |   |                                            | 8,161  |   |   |   | 8,161 |   |   |   | — |   |   |   | — |   |
| Fixed income securities:    |   |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasuries             |   |                                            | 4,579  |   |   |   | 4,579 |   |   |   | — |   |   |   | — |   |
| Corporate bonds (d)         |   |                                            | 15,657 |   |   |   | 15,657 |   |   |   | — |   |   |   | — |   |
| Other types of investments: |   |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commingled funds (e)        |   |                                            | 3,089  |   |   |   | — |   |   |   | 3,089 |   |   |   | — |   |
| Total                       |   | $                                               | 51,128 |   |   | $ | 47,006 |   |   | $ | 4,122 |   |   | $ | — |   |

| (a)       | The majority of this category represents a fund with the objective of approximating the return of the S&P 500 Index.  The remaining securities include both a large-value fund and a large-growth fund investing in diverse industries. |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b)       | This category includes both a mid-growth fund with the objective of outperforming the Russell Mid Cap Growth Index and a mid-value fund investing in diverse industries.                                                                                        |
| (c)       | This category includes both a small-value fund and a small-growth fund investing in diverse industries.                                                                                                                                                         |
| (d)  | This category includes intermediate and long-term investment grade bonds from diverse industries.                                                                                                                                                               |
| (e)       | This category represents a fund of well diversified hedged mutual funds with the objective of providing a low-volatility means to access equity-like returns.                                                                                                   |

| ● | Equity Securities and Fixed Income Securities: Valued at the net asset value (“NAV”) of shares held by the pension plan at year-end. The NAV is a quoted price in an active market.                                                                                                                  |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                  |
| ● | Cash Equivalents and Commingled Funds: Valuation determined by the trustee of the money market funds and commingled funds based on the fair value of the underlying securities within the fund, which represent the NAV, a practical expedient to fair value, of the units held by the pension plan at year-end. |

|              |   | Pension Plan   |   |   | Other Defined Benefit Plans |   |
|-------------------|--------|----------------|--------|--------|-----------------------------|--------|
|              |   | (In thousands) |   |
| 2011              |   | $              | 3,307  |   |                        | $      | 302 |   |
| 2012              |   |           | 3,309  |   |                        |   | 204 |   |
| 2013              |   |           | 3,349  |   |                        |   | 252 |   |
| 2014              |   |           | 3,360  |   |                        |   | 206 |   |
| 2015              |   |           | 3,414  |   |                        |   | 182 |   |
| 2016 through 2020 |   |           | 19,338 |   |                        |   | 1,052 |   |

----

|                                            |   | December 29, 2010 |    |   | December 30, 2009 |   |
|-------------------------------------------------|--------|-------------------|---------|--------|-------------------|--------|
|                                            |   | (In thousands)    |    |
| Additional minimum pension liability (Note 13)  |   | $                 | (19,199 | )      |              | $      | (18,046 | ) |
| Unrealized loss on interest rate swap (Note 12) |   |              | — |   |              |   | (167 | ) |
| Accumulated other comprehensive loss            |   | $                 | (19,199 | )      |              | $      | (18,213 | ) |

|                       |   | Fiscal Year Ended |    |
|----------------------------|--------|-------------------|---------|
|                       |   | December 29, 2010 |    |   | December 30, 2009 |   |   | December 31, 2008 |   |
|                       |   | (In thousands)    |    |
| Current:                   |   |              |    |   |   |   |   |   |   |   |   |   |
| Federal                    |   | $                 | — |   |   | $ | (897 | ) |   | $ | (542 | ) |
| State, foreign and other   |   |              | 1,058   |   |   |   | 1,626 |   |   |   | 1,307 |   |
|                       |   |              | 1,058   |   |   |   | 729 |   |   |   | 765 |   |
| Deferred:                  |   |              |    |   |   |   |   |   |   |   |   |   |
| Federal                    |   |              | 235     |   |   |   | 525 |   |   |   | 2,408 |   |
| State, foreign and other   |   |              | 88      |   |   |   | 146 |   |   |   | 349 |   |
|                       |   |              | 323     |   |   |   | 671 |   |   |   | 2,757 |   |
| Provision for income taxes |   | $                 | 1,381   |   |   | $ | 1,400 |   |   | $ | 3,522 |   |

|                                                                                                                                                                                                 |   | December 29, 2010 |   |    | December 30, 2009 |   |    | December 31, 2008 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|---------|-------------------|--------|---------|-------------------|--------|
| Statutory provision (benefit) rate                                                                                                                                                                   |   |              | 35     | %       |              |   | 35      | %                 |   |   | 35 | % |
| State, foreign, and other taxes, net of federal    income tax benefit                                                                                                                      |   |              | 3      |    |              |   | 3       |              |   |   | 5 |   |
| Wage addback (deductions) on income tax credits    earned (expired), net                                                                                                                   |   |              | (9     | )       |              |   | — |              |   |   | (2 | ) |
| Portion of net operating losses, temporary    differences and unused income tax credits    resulting from the establishment or reduction    in the valuation allowance |   |              | (24    | )  |              |   | (35     | )                 |   |   | (19 | ) |
| Other                                                                                                                                                                                                |   |              | 1      |    |              |   | — |              |   |   | 3 |   |
| Effective tax rate                                                                                                                                                                                   |   |              | 6      | %       |              |   | 3       | %                 |   |   | 22 | % |

----

|                                                      |   | December 29, 2010 |     |   | December 30, 2009 |   |
|-----------------------------------------------------------|--------|-------------------|----------|--------|-------------------|--------|
|                                                      |   | (In thousands)    |     |
| Deferred tax assets:                                      |   |              |     |   |              |   |
| Lease liabilities                                         |   | $                 | 265      |   |              | $      | 569 |   |
| Self-insurance accruals                                   |   |              | 10,676   |   |              |   | 12,408 |   |
| Capitalized leases                                        |   |              | 4,111    |   |              |   | 4,463 |   |
| Closed store liabilities                                  |   |              | 2,752    |   |              |   | 3,545 |   |
| Fixed assets                                              |   |              | 17,758   |   |              |   | 22,767 |   |
| Pension, other retirement and compensation plans          |   |              | 16,587   |   |              |   | 17,243 |   |
| Other accruals                                            |   |              | 1,673    |   |              |   | 1,047 |   |
| Future deductions on expired wage based credits           |   |              | 2,500    |   |              |   | 3,618 |   |
| Alternative minimum tax credit carryforwards              |   |              | 12,376   |   |              |   | 12,307 |   |
| General business credit carryforwards - state and federal |   |              | 35,456   |   |              |   | 38,887 |   |
| Net operating loss carryforwards - state                  |   |              | 26,186   |   |              |   | 28,574 |   |
| Net operating loss carryforwards - federal                |   |              | 8,964    |   |              |   | 7,302 |   |
| Total deferred tax assets before valuation allowance      |   |              | 139,304  |   |              |   | 152,730 |   |
| Less: valuation allowance                                 |   |              | (126,621 | )      |              |   | (138,951 | ) |
| Deferred tax assets                                       |   |              | 12,683   |   |              |   | 13,779 |   |
| Deferred tax liabilities:                                 |   |              |     |   |              |   |   |   |
| Intangible assets                                         |   |              | (26,023  | )      |              |   | (26,795 | ) |
| Total deferred tax liabilities                            |   |              | (26,023  | )      |              |   | (26,795 | ) |
| Net deferred tax liability                                |   | $                 | (13,340  | )      |              | $      | (13,016 | ) |

|                                                              |   | Fiscal Year Ended |          |
|-------------------------------------------------------------------|--------|-------------------|---------------|
|                                                              |   | December 29, 2010 |          |   | December 30, 2009 |   |
|                                                              |   | (In thousands)    |          |
| Balance, beginning of year                                        |   | $                 | 1,513         |   |   | $ | 1,271 |   |
| Increases attributable to tax positions taken during a prior year |   |              |  — |   |   |   | 242 |   |
| Lapse of statute of limitations                                   |   |              | (1,513        | ) |   |   | — |   |
| Balance, end of year                                              |   | $                 | —       |   |   | $ | 1,513 |   |

----

|                                                                                       |   | Fiscal Year Ended |   |
|--------------------------------------------------------------------------------------------|--------|-------------------|--------|
|                                                                                       |   | December 29, 2010 |   |   | December 30, 2009 |   |   | December 31, 2008 |   |
|                                                                                       |   |              |   |   |   |   |   |   |   |
| Share-based compensation related to liability classified restricted stock units  |   | $                 | 918    |   |   | $ | 1,104 |   |   | $ | 92 |   |
| Share-based compensation related to equity classified awards:                              |   |              |   |   |   |   |   |   |   |   |   |   |
| Stock options                                                                              |   | $                 | 1,072  |   |   | $ | 1,567 |   |   | $ | 1,817 |   |
| Restricted stock units                                                                     |   |              | 533    |   |   |   | 1,687 |   |   |   | 1,980 |   |
| Board deferred stock units                                                                 |   |              | 317    |   |   |   | 313 |   |   |   | 228 |   |
| Total share-based compensation related to equity classified awards                         |   |              | 1,922  |   |   |   | 3,567 |   |   |   | 4,025 |   |
| Total share-based compensation                                                             |   | $                 | 2,840  |   |   | $ | 4,671 |   |   | $ | 4,117 |   |

|                           |   | Options        |    |   | Weighted-Average Exercise Price |   |    | Weighted-Average Remaining Contractual Life |   |   | Aggregate Intrinsic Value |   |
|--------------------------------|--------|----------------|---------|--------|---------------------------------|--------|---------|---------------------------------------------|--------|--------|---------------------------|--------|
|                           |   | (In thousands) |    |   |                            |   |    |                                        |   |   | (In thousands)            |   |
| Outstanding, beginning of year |   |           | 8,302   |   |                            | $      | 2.34    |                                        |   |   |                      |   |   |   |
| Granted                        |   |           | 825     |   |                            |   | 2.56    |                                        |   |   |                      |   |   |   |
| Exercised                      |   |           | (2,887  | )      |                            |   | 1.40    |                                        |   |   |                      |   |   |   |
| Forfeited                      |   |           | (327    | )      |                            |   | 3.82    |                                        |   |   |                      |   |   |   |
| Expired                        |   |           | — |   |                            |   | — |                                        |   |   |                      |   |   |   |
| Outstanding, end of year  |   |           | 5,913   |   |                            |   | 2.76    |                                        |   |   | 4.28                      |   |   | $ | 5,812 |   |
| Exercisable, end of year       |   |           | 4,019   |   |                            |   | 3.00    |                                        |   |   | 3.04                      |   |   | $ | 3,414 |   |

----

|                           |   | Units          |   |   | Weighted-Average Grant DateFair Value |   |
|--------------------------------|--------|----------------|--------|--------|---------------------------------------|--------|
|                           |   | (In thousands) |   |
| Outstanding, beginning of year |   |           | 2,009  |   |                                  | $      | 3.47 |   |
| Granted                        |   |           | 619    |   |                                  |   | 2.29 |   |
| Vested                         |   |           | (908   | )      |                                  |   | 3.54 |   |
| Forfeited                      |   |           | (270   | )      |                                  |   | 3.47 |   |
| Outstanding, end of year       |   |           | 1,450  |   |                                  |   | 2.92 |   |

----

----

|                                                                                                                           |   | Fiscal Year Ended                   |    |
|--------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|---------|
|                                                                                                                           |   | December 29, 2010                        |    |   | December 30, 2009 |   |   | December 31, 2008 |   |
|                                                                                                                           |   | (In thousands, except per share amounts) |    |
| Numerator:                                                                                                                     |   |                                     |    |   |   |   |   |   |   |
| Numerator for basic and diluted net income per share - net income                                                              |   | $                                        | 22,713  |   |   | $ | 41,554 |   |   | $ | 12,742 |   |
| Denominator:                                                                                                              |   |                                     |    |   |   |   |   |   |   |   |   |   |
| Denominator for basic net income per share - weighted-average shares                                                      |   |                                     | 98,902  |   |   |   | 96,318 |   |   |   | 95,230 |   |
| Effect of dilutive securities:                                                                                            |   |                                     |    |   |   |   |   |   |   |   |   |   |
| Options                                                                                                                        |   |                                     | 1,302   |   |   |   | 1,274 |   |   |   | 2,141 |   |
| Restricted stock units and awards                                                                                              |   |                                     | 1,187   |   |   |   | 907 |   |   |   | 1,471 |   |
| Denominator for diluted net income per share - adjusted weighted-average shares and assumed conversions of dilutive securities |   |                                     | 101,391 |   |   |   | 98,499 |   |   |   | 98,842 |   |
|                                                                                                                           |   |                                     |    |   |   |   |   |   |   |   |   |   |
| Basic net income per share                                                                                                     |   | $                                        | 0.23    |   |   | $ | 0.43 |   |   | $ | 0.13 |   |
| Diluted net income per share                                                                                                   |   | $                                        | 0.22    |   |   | $ | 0.42 |   |   | $ | 0.13 |   |
|                                                                                                                           |   |                                     |    |   |   |   |   |   |   |   |   |   |
| Stock options excluded (1)                                                                                                |   |                                     | 2,238   |   |   |   | 5,606 |   |   |   | 3,413 |   |
| Restricted stock units and awards excluded (1)                                                                                 |   |                                     | 450     |   |   |   | 352 |   |   |   | — |   |

| (1) | Excluded from diluted weighted-average shares outstanding as the impact would be antidilutive. |
|-----|------------------------------------------------------------------------------------------------|

----

|                          |   | Purchase Obligations |    |
|-------------------------------|--------|----------------------|---------|
|                          |   | (In thousands)       |    |
|  Payments due by period: |   |                 |    |   |
|  Less than 1 year        |   | $                    | 134,058 |   |
|  1-2 years               |   |                 | 11,955  |   |
|  3-4 years               |   |                 | 11,955  |   |
|  5 years and thereafter  |   |                 | 4,482   |   |
|  Total                   |   | $                    | 162,450 |   |

|                                                                 |   | Fiscal Year Ended |   |
|----------------------------------------------------------------------|--------|------------------------|--------|
|                                                                 |   | December 29, 2010      |   |   | December 30, 2009 |   |   | December 31, 2008 |   |
|                                                                 |   | (In thousands)         |   |
| Income taxes paid, net                                               |   | $                      | 850    |   |   | $ | 610 |   |   | $ | 1,067 |   |
| Interest paid                                                        |   | $                      | 25,277 |   |   | $ | 31,133 |   |   | $ | 34,858 |   |
|                                                                 |   |                   |   |   |   |   |   |   |   |   |   |   |
| Noncash investing activities:                                        |   |                   |   |   |   |   |   |   |   |   |   |   |
| Notes received in connection with disposition of property            |   | $                      | 200    |   |   | $ | 3,665 |   |   | $ | 2,670 |   |
| Accrued purchase of property                                         |   | $                      | 1,953  |   |   | $ | 908 |   |   | $ | 1,011 |   |
| Execution of direct financing leases                                 |   | $                      | 526    |   |   | $ | 2,950 |   |   | $ | 4,287 |   |
| Cancellation of direct financing leases                              |   | $                      | 469    |   |   | $ | — |   |   | $ | — |   |
|                                                                 |   |                   |   |   |   |   |   |   |   |   |   |   |
| Noncash financing activities:                                        |   |                   |   |   |   |   |   |   |   |   |   |   |
| Issuance of common stock, pursuant to share-based compensation plans |   | $                      | 1,511  |   |   | $ | 1,823 |   |   | $ | 1,268 |   |
| Execution of capital leases                                          |   | $                      | 3,480  |   |   | $ | 1,766 |   |   | $ | 5,242 |   |
| Accrued deferred financing costs                                     |   | $                      | 255    |   |   | $ | — |   |   | $ | — |   |

----

|                                     |   | Fiscal Year Ended December 29, 2010 |    |
|------------------------------------------|--------|------------------------------------------|---------|
|                                     |   | First Quarter                       |    |   | Second Quarter |   |   | Third Quarter |   |   | Fourth Quarter |   |
|                                     |   | (In thousands, except per share data)    |    |
| Company restaurant sales                 |   | $                                        | 107,783 |   |   | $ | 105,301 |   |   | $ | 107,171 |   |   | $ | 103,681 |   |
| Franchise and licensing revenue          |   |                                     | 29,789  |   |   |   | 29,776 |   |   |   | 32,761 |   |   |   | 32,204 |   |
| Total operating revenue             |   |                                     | 137,572 |   |   |   | 135,077 |   |   |   | 139,932 |   |   |   | 135,885 |   |
| Total operating costs and expenses  |   |                                     | 126,369 |   |   |   | 122,173 |   |   |   | 122,997 |   |   |   | 121,759 |   |
| Operating income                    |   | $                                        | 11,203  |   |   | $ | 12,904 |   |   | $ | 16,935 |   |   | $ | 14,126 |   |
|                                     |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                               |   | $                                        | 4,588   |   |   | $ | 5,458 |   |   | $ | 9,934 |   |   | $ | 2,733 |   |
|                                     |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic net income per share (a)      |   | $                                        | 0.05    |   |   | $ | 0.05 |   |   | $ | 0.10 |   |   | $ | 0.03 |   |
| Diluted net income per share (a)         |   | $                                        | 0.05    |   |   | $ | 0.05 |   |   | $ | 0.10 |   |   | $ | 0.03 |   |

| (a) | Per share amounts do not necessarily sum to the total year amounts due to changes in shares outstanding and rounding. |
|-----|-----------------------------------------------------------------------------------------------------------------------|

|                                     |   | Fiscal Year Ended December 30, 2009 |    |
|------------------------------------------|--------|------------------------------------------|---------|
|                                     |   | First Quarter                       |    |   | Second Quarter |   |   | Third Quarter |   |   | Fourth Quarter |   |
|                                     |   | (In thousands, except per share data)    |    |
| Company restaurant sales                 |   | $                                        | 135,576 |   |   | $ | 125,500 |   |   | $ | 116,579 |   |   | $ | 111,293 |   |
| Franchise and licensing revenue          |   |                                     | 30,184  |   |   |   | 30,313 |   |   |   | 29,485 |   |   |   | 29,173 |   |
| Total operating revenue             |   |                                     | 165,760 |   |   |   | 155,813 |   |   |   | 146,064 |   |   |   | 140,466 |   |
| Total operating costs and expenses  |   |                                     | 153,840 |   |   |   | 138,367 |   |   |   | 127,429 |   |   |   | 116,038 |   |
| Operating income                    |   | $                                        | 11,920  |   |   | $ | 17,446 |   |   | $ | 18,635 |   |   | $ | 24,428 |   |
|                                     |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                               |   | $                                        | 4,307   |   |   | $ | 9,336 |   |   | $ | 10,033 |   |   | $ | 17,878 |   |
|                                     |   |                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic net income per share (a)      |   | $                                        | 0.04    |   |   | $ | 0.10 |   |   | $ | 0.10 |   |   | $ | 0.19 |   |
| Diluted net income per share (a)         |   | $                                        | 0.04    |   |   | $ | 0.09 |   |   | $ | 0.10 |   |   | $ | 0.18 |   |

| (a) | Per share amounts do not necessarily sum to the total year amounts due to changes in shares outstanding and rounding. |
|-----|-----------------------------------------------------------------------------------------------------------------------|

----

SIGNATURES

|   |                                                                             |
|--------|----------------------------------------------------------------------------------|
|   | DENNY'S CORPORATION                                                              |
|   |                                                                             |
| BY:    | /s/  F. Mark Wolfinger                                                      |
|   | F. Mark Wolfinger                                                                |
|   | Executive Vice President,Chief Administrative Officer andChief Financial Officer |

|                              |                                                                                        |           |
|-----------------------------------|---------------------------------------------------------------------------------------------|----------------|
| Signature                         | Title                                                                                       | Date           |
|                              |                                                                                        |           |
| /s/  John C. Miller          | Chief Executive Officer, President and Director                                        | March 11, 2011 |
| (John C. Miller)                  | (Principal Executive Officer)                                                               |           |
|                              |                                                                                        |           |
|  /s/  F. Mark Wolfinger | Executive Vice President, Chief Administrative Officer,Chief Financial Officer and Director | March 11, 2011 |
| (F. Mark Wolfinger)               | (Principal Financial Officer)                                                               |           |
|                              |                                                                                        |           |
| /s/  Jay C. Gilmore          | Vice President, Chief Accounting Officer and Corporate Controller                      | March 11, 2011 |
| (Jay C. Gilmore)                  | (Principal Accounting Officer)                                                              |           |
|                              |                                                                                        |           |
| /s/  Debra Smithart-Oglesby  | Director and Chair of the Board of Directors                                                | March 11, 2011 |
| (Debra Smithart-Oglesby)          |                                                                                        |           |
|                              |                                                                                        |           |
| /s/  Gregg R. Dedrick        | Director                                                                                    | March 11, 2011 |
| (Gregg R. Dedrick)                |                                                                                        |           |
|                              |                                                                                        |           |
| /s/  Brenda J. Lauderback    | Director                                                                                    | March 11, 2011 |
| (Brenda J. Lauderback)            |                                                                                        |           |
|                              |                                                                                        |           |
| /s/  Robert E. Marks         | Director                                                                                    | March 11, 2011 |
| (Robert E. Marks)                 |                                                                                        |           |
|                              |                                                                                        |           |
| /s/  Louis P. Neeb           | Director                                                                                    | March 11, 2011 |
| (Louis P. Neeb)                   |                                                                                        |           |
|                              |                                                                                        |           |
| /s/  Donald C. Robinson      | Director                                                                                    | March 11, 2011 |
| (Donald C. Robinson)              |                                                                                        |           |
|                              |                                                                                        |           |
| /s/  Donald R. Shepherd      | Director                                                                                    | March 11, 2011 |
| (Donald R. Shepherd)              |                                                                                        |           |
|                              |                                                                                        |           |
| /s/  Laysha Ward             | Director                                                                                    | March 11, 2011 |
| (Laysha Ward)                     |                                                                                        |           |