UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 14, 2006
Denny's Corporation
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(Exact name of registrant as specified in its charter)
Delaware 0-18051 13-3487402
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
203 East Main Street, Spartanburg, SC 29319-0001
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (864) 597-8000
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(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240-13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On March 14, 2006, the Compensation and Incentives Committee of the Board of
Directors of Denny's Corporation (the "Company") approved and adopted the
Denny's 2006 Corporate Incentive Program (the "2006 Incentive Program"), an
incentive compensation arrangement for substantially all of Denny's, Inc.
employees, including its executive officers. Under the 2006 Incentive Program,
which is offered pursuant to the Denny's Corporation 2004 Omnibus Incentive
Compensation Plan (the "Denny's 2004 Omnibus Plan"), a participant is eligible
to earn a target bonus award ("Target Award") equal to a percentage of his or
her base salary, depending on the group classification assigned to such
participant. For the executive officers, the Target Awards range from 65% of
base salary for senior vice presidents to 100% of base salary for the chief
executive officer.
Target Awards are earned by participants based on the achievement of certain
pre-established quarterly and annual performance goals, and the amount of actual
bonus earned may range from 50% of the Target Award, if certain threshold goals
are met, to 100% of the Target Award, if all targeted goals are met. Performance
goals are based on the following seven (7) performance categories: (i) Company
Same Store Sales ("CSSS"), under which participants earn 10% of their Target
Awards, payable on a quarterly basis, if Denny's attains targeted CSSS; (ii)
Franchise Same Store Sales ("FSSS"), under which participants earn 10% of their
Target Awards, payable on a quarterly basis, if Denny's attains targeted FSSS;
(iii) Company Store Customer Count ("CSCC"), under which participants earn 15%
of their Target Awards, payable on a quarterly basis, if Denny's attains
targeted CSCC; (iv) EBITDA (i.e., earnings before interest, taxes, depreciation
and amortization), under which participants receive 20% of their Target Award,
payable on an annual basis, if Denny's achieves targeted EBITDA; (v) EBITDA
Margin Percentage, under which participants earn 10% of their Target Award,
payable on an annual basis, if Denny's achieves the targeted EBITDA Margin
Percentage; (vi) Cash Flow, under which participants earn 10% of their Target
Award, payable on an annual basis, if Denny's achieves targeted Cash Flow; and
(vii) Department Objectives, which are set for each department based on stated
criteria for up to five objectives, and under which participants receive 25% of
their Target Awards, payable on an annual basis, if the Department Objectives
are achieved.
In addition, participants in the 2006 Incentive Program are eligible to share in
an Over-Performance Payout ("OP Payout"), which is a bonus pool that will be
created if Denny's exceeds targeted EBITDA for the year. The amount of the OP
Payout will be equal to 25% of the amount by which EBITDA for the year exceeds
targeted EBITDA. Each participant will receive a pro rata percentage of any OP
Payout, based on the amount of the participant's Target Award earned for the
year, not to exceed 100% of the participant's Target Award otherwise earned for
the year.
Additionally, on March 14, 2006, the Compensation and Incentives Committee of
the Board of Directors of the Company approved and adopted a long-term growth
incentive program (the "LTGI Program") in which selected members of management,
including the Company's executive officers, will participate. Under the LTGI
Program, which is offered pursuant to the Denny's 2004 Omnibus Plan, performance
shares and performance units can be earned at 0% to 200% of target depending on
achievement of goals for 2006 systemwide revenues and cash flow available to pay
debt. The performance shares and units vest 100% if the participant is still
employed on the date of payout, which will occur in early 2009. Target awards
will be one-half in performance shares and one-half in performance units. Earned
performance shares are to be paid in shares of common stock of the Company with
the performance units being paid in cash. Pro rata amounts can be earned for
certain qualifying employment terminations occurring prior to payout date.
One-half of the shares earned must be held by participants until termination of
their employment from the Company. For executive officers, LTGI Program awards
will range from 55% of base salary for senior officers to 85% for the chief
executive officer.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Denny's Corporation
Date: March 20, 2006 /s/ F. Mark Wolfinger
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F. Mark Wolfinger
Senior Vice President
and Chief Financial Officer