DENNY'S Corp (Form: 8-K, Received: 05/14/2020 16:12:29)

EXECUTION VERSION CID #: 000016249 SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT THIS SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of May 13, 2020, is by and among DENNY’S, INC., a Florida corporation (“Denny’s” or the “Borrower”), DENNY’S CORPORATION, a Delaware corporation (“Parent”), each of those Subsidiaries of Parent party hereto (Parent and such Subsidiaries, each a “Guarantor” and collectively, the “Guarantors”), WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent on behalf of the Lenders under the Credit Agreement (as hereinafter defined) (in such capacity, the “Administrative Agent”), and the Lenders party hereto. W I T N E S S E T H WHEREAS, the Borrower, the Parent, the other Guarantors, certain banks and financial institutions from time to time party thereto (the “Lenders”) and the Administrative Agent are parties to that certain Third Amended and Restated Credit Agreement dated as of October 26, 2017 (as amended, modified, extended, restated, replaced, or supplemented from time to time, the “Credit Agreement”; capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement); WHEREAS, the Loan Parties have requested that the Lenders make certain amendments to the Credit Agreement as set forth herein; and WHEREAS, the Lenders party hereto have agreed to amend the Credit Agreement, in each case, subject to the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I AMENDMENTS TO CREDIT AGREEMENT 1.1 Amendment to the definition of “Applicable Rate”. The definition of “Applicable Rate” in Section 1.01 of the Credit Agreement is hereby amended by inserting the following new sentence at the end thereof: Notwithstanding the foregoing, from the Second Amendment Effective Date until the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(a) for the fiscal quarter ending of the Parent on or about June 30, 2021, the Applicable Rate shall be equal to (i) 3.00% with respect to Eurodollar Rate Loans, (ii) 3.00% with respect to standby Letter of Credit Fees, (iii) 3.00% with respect to commercial Letter of Credit Fees, (iv) 2.00% with respect to Base Rate Loans and (v) 0.40% with respect to the Commitment Fee, and thereafter the Pricing Tier shall be determined by reference to the Consolidated Leverage Ratio as of the last day of the most recently ended fiscal quarter of the Parent as set forth in the Compliance Certificate delivered pursuant to Section 6.02(a) for such fiscal quarter. 1.2 Amendment to the definition of “Bail-In Action”. The definition of “Bail-In Action” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows: CHAR1\1726095v7

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution. 1.3 Amendment to the definition of “Bail-In Legislation”. The definition of “Bail-In Legislation” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows: “Bail-In Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings). 1.4 Amendment to the definition of “Base Rate”. The definition of “Base Rate” in Section 1.1 of the Credit Agreement is hereby amended by deleting the reference to “the Eurodollar Rate plus 1.00%” in clause (c) thereof and replacing it with the following: LIBOR for an Interest Period of one month plus 1.00% (provided that clause (c) shall not be applicable during any period in which LIBOR is unavailable or unascertainable) 1.5 Amendment to the definition of “Consolidated Leverage Ratio”. The definition of “Consolidated Leverage Ratio” in Section 1.1 of the Credit Agreement is hereby amended by inserting the following new sentence at the end thereof: Notwithstanding the foregoing, for purposes of calculating the Consolidated Leverage Ratio to determine compliance with Section 7.10(a) as of the end of the fiscal quarters of the Parent ending on or about March 31, 2021, June 30, 2021 and September 29, 2021, Consolidated EBITDA included in clause (b) above shall be calculated as (x) in the case of the fiscal quarter ending on or about March 31, 2021, actual Consolidated EBITDA for such fiscal quarter divided by 21.2%, (y) in the case of the fiscal quarter ending on or about June 30, 2021, actual Consolidated EBITDA for the period of two (2) consecutive fiscal quarters then ending divided by 48.1%, and (z) in the case of the fiscal quarter ending on or about September 29, 2021, actual Consolidated EBITDA for the period of three (3) consecutive fiscal quarters then ending divided by 73.6%. 1.6 Amendment to the definition of “Eurodollar Rate”. The definition of “Eurodollar Rate” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows: “Eurodollar Rate” means a rate per annum determined by the Administrative Agent pursuant to the following formula: Eurodollar Rate = LIBOR 1.00-Eurodollar Reserve Percentage CHAR1\1726095v7 2

1.7 Amendment to the definition of “Eurodollar Rate Loan”. The definition of “Eurodollar Rate Loan” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows: “Eurodollar Rate Loan” means a Loan that bears interest at a rate based on clause (a) of the definition of “LIBOR”. 1.8 Amendment to the definition of “Write-Down and Conversion Powers”. The definition of “Write-Down and Conversion Powers” in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety to read as follows: “Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers. 1.9 Amendment to Section 1.01. Section 1.01 of the Credit Agreement is hereby amended by inserting the following definitions in the appropriate alphabetical order therein: “Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution. “Consolidated Cash on Hand” means, as of any date of determination, the sum of the amount of cash and Permitted Investments of the Loan Parties and their Subsidiaries on a consolidated basis (it being understood that such amount shall exclude in any event any cash and Permitted Investments identified as “restricted” on the balance sheets of the Parent and its Subsidiaries (other than cash or Permitted Investments restricted in favor of the Administrative Agent) or otherwise subject to a security interest in favor of any other Person (other than security interests under the Loan Documents)). “LIBOR” means: (a) for any interest rate calculation with respect to a Eurodollar Rate Loan, the rate of interest per annum determined on the basis of the rate for deposits in Dollars for a period equal to the applicable Interest Period as published by the ICE Benchmark Administration Limited, a United Kingdom company, or a comparable or successor quoting service approved by the Administrative Agent, at approximately 11:00 a.m. (London time) two (2) London Banking Days prior to the first day of the applicable Interest Period. If, for any reason, such rate is not so published then “LIBOR” shall be determined by the Administrative Agent to be the arithmetic average of the rate per annum at which deposits in Dollars would be offered by first class banks in the London interbank market to the Administrative Agent at approximately 11:00 a.m. (London time) two (2) London Banking Days prior to the first day of the applicable Interest Period for a period equal to such Interest Period, and CHAR1\1726095v7 3

(b) for any interest rate calculation with respect to a Base Rate Loan, the rate of interest per annum determined on the basis of the rate for deposits in Dollars for an Interest Period equal to one month (commencing on the date of determination of such interest rate) as published by ICE Benchmark Administration Limited, a United Kingdom company, or a comparable or successor quoting service approved by the Administrative Agent, at approximately 11:00 a.m. (London time) on such date of determination, or, if such date is not a Business Day, then the immediately preceding Business Day. If, for any reason, such rate is not so published then “LIBOR” for such Base Rate Loan shall be determined by the Administrative Agent to be the arithmetic average of the rate per annum at which deposits in Dollars would be offered by first class banks in the London interbank market to the Administrative Agent at approximately 11:00 a.m. (London time) on such date of determination for a period equal to one month commencing on such date of determination. Each calculation by the Administrative Agent of LIBOR shall be conclusive and binding for all purposes, absent manifest error. Notwithstanding the foregoing, in no event shall LIBOR be less than 0%. “Liquidity” means, as of any date of determination, an amount equal to the sum of (a) the aggregate borrowing availability under the Revolving Credit Facility as of such date plus (b) Consolidated Cash on Hand as of such date. “Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority. “Second Amendment Effective Date” means May 13, 2020. “UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms. “UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution. 1.10 Amendment to Article I. Article I of the Credit Agreement is hereby amended by inserting the following new Section 1.08 at the end thereof: 1.08 Divisions. For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its Equity Interests at such time. 1.11 Amendment to Section 2.15(a)(iv). The last sentence in Section 2.15(a)(iv) of the Credit Agreement is hereby amended and restated in its entirety to read as follows: CHAR1\1726095v7 4

Subject to Section 10.22, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation. 1.12 Amendment to Section 5.05(c). Section 5.05(c) of the Credit Agreement is hereby amended by inserting the following proviso at the end thereof: ; provided that, for purposes of this Section 5.05(c), only from the Second Amendment Effective Date until the date in which the Loan Parties are required to deliver the financial statements and Compliance Certificate for the fiscal quarter of the Parent ending on or about June 30, 2021 pursuant to Section 6.01(b) and Section 6.02(a) respectively, the impacts of the COVID- 19 pandemic on the business, assets, operations, properties, condition (financial or otherwise), liabilities or material agreements of Parent and its Subsidiaries that (x) occurred prior to the Second Amendment Effective Date and (y) were disclosed in writing to the Administrative Agent and the Lenders prior to the Second Amendment Effective Date shall be disregarded (to the extent the scope of such impacts are not greater than so disclosed). 1.13 Amendment to Section 5.23. Section 5.23 of the Credit Agreement is hereby amended and restated in its entirety to read as follows: Section 5.23 Affected Financial Institutions. No Loan Party is an Affected Financial Institution. 1.14 Amendment to Section 6.01. Section 6.01 of the Credit Agreement is hereby amended by deleting the text “and” appearing at the end of paragraph (b) thereof, replacing “.” at the end of paragraph (c) thereof with the text “; and”, and inserting the following new clause (d) at the end thereof: (d) Monthly Reports. (i) From the Second Amendment Effective Date through March 31, 2021, as soon as practicable and in any event within eight (8) Business Days after the end of each fiscal month, (x) a summary of same-store sales for such month and (y) a report of restaurant closures and openings for such month, in each case, for the restaurants of (A) the Loan Parties and their Subsidiaries and (B) franchisees of the Loan Parties, in form and detail consistent with in the customary public filings of the Parent; and (ii) from the Second Amendment Effective Date through May 26, 2021, as soon as practicable and in any event within eight (8) Business Days after the end of each fiscal month, a calculation of Liquidity and demonstrating compliance with Section 7.10(c) as of the end of such month, in form and detail reasonably acceptable to the Administrative Agent. 1.15 Amendment to Section 7.03. Section 7.03 of the Credit Agreement is hereby amended by inserting the following proviso at the end thereof: ; provided further that no Investments shall be permitted to be made under clauses (d) (other than Investments resulting from any Restricted Payments made pursuant to Section 7.05(a)(i)), (f) (other than Investments in an aggregate amount not to exceed $250,000), (g), (h) and (i) of this Section 7.03 during the period commencing on the Second Amendment Effective Date ending on date in which the Loan Parties demonstrate compliance with the financial covenants set forth in Section 7.10 for the fiscal quarter of the Parent ending on or about CHAR1\1726095v7 5

June 30, 2021 as determined based on the Compliance Certificate provided by the Loan Parties pursuant to Section 6.02(a) for such fiscal quarter (other than Investments consisting of Guarantees by any Loan Party of obligations (including, without limitation, Operating Lease obligations and Capital Lease Obligations) of franchisees or licensees or the Purchasing Coop (to the extent the Purchasing Coop is acting on behalf of franchisees or licensees), consistent with past practices and on usual and customary terms for transactions of this type, in an amount not to exceed $10,000,000 for the Loan Parties and their Subsidiaries during such period). 1.16 Amendment to Section 7.05(a). Section 7.05(a) of the Credit Agreement is hereby amended by inserting the following proviso at the end thereof: ; provided further that no Restricted Payments shall be permitted to be made under clauses (ii), (iii) and (iv) of this Section 7.05(a) during the period commencing on the Second Amendment Effective Date ending on date in which the Loan Parties demonstrate compliance with the financial covenants set forth in Section 7.10 for the fiscal quarter of the Parent ending on or about June 30, 2021 as determined based on the Compliance Certificate provided by the Loan Parties pursuant to Section 6.02(a) for such fiscal quarter. 1.17 Amendment to Section 7.10(a). Section 7.10(a) of the Credit Agreement is hereby amended and restated in its entirety to read as follows: (a) Consolidated Leverage Ratio. As of the last day of (i) the fiscal quarter ending on or about March 31, 2021, permit the Consolidated Leverage Ratio to be greater than 4.50 to 1.00, (ii) the fiscal quarter ending on or about June 30, 2021, permit the Consolidated Leverage Ratio to be greater than 4.25 to 1.00 and (iii) the fiscal quarter ending on or about September 29, 2021 and each other fiscal quarter, permit the Consolidated Leverage Ratio to be greater than 4.00 to 1.00, in each case, for the respective Measurement Period. Notwithstanding the foregoing, the covenant in this Section 7.10(a) shall not be tested as of the end of the fiscal quarters ending on or about June 24, 2020, September 23, 2020 and December 30, 2020 (but otherwise shall be deemed to be in effect with respect to each such fiscal quarter end for all provisions under this Agreement and the other Loan Documents that refer to compliance or pro forma compliance with Section 7.10). 1.18 Amendment to Section 7.10(b). Section 7.10(b) of the Credit Agreement is hereby amended and restated in its entirety to read as follows: (b) Consolidated Fixed Charge Coverage Ratio. As of the last day of any fiscal quarter, permit the Consolidated Fixed Charge Coverage Ratio for the applicable Measurement Period to be less than 1.50 to 1.00. Notwithstanding the foregoing, (i) the covenant in this Section 7.10(b) shall not be tested as of the end of the fiscal quarters ending on or about June 24, 2020, September 23, 2020 and December 30, 2020 (but otherwise shall be deemed to be in effect with respect to each such fiscal quarter end for all provisions under this Agreement and the other Loan Documents that refer to compliance or pro forma compliance with Section 7.10), (ii) for the Fiscal Quarter ending on or about March 31, 2021, the Consolidated Fixed Charge Coverage Ratio shall be determined for only the single fiscal quarter of the Parent then ended (rather than the period of four (4) consecutive fiscal quarters of the Parent then ended), (iii) for the fiscal quarter ending on or about June 30, 2021, the Consolidated Fixed Charge Coverage Ratio shall be determined for only the period of the two (2) consecutive fiscal quarters of the Parent then ended (rather than the period of four (4) consecutive fiscal quarters of the Parent then ended) and (iv) for the fiscal quarter ending on or about September 29, 2021, the Consolidated Fixed Charge Coverage Ratio shall be determined for only the period of the three (3) consecutive fiscal quarters CHAR1\1726095v7 6

of the Parent then ended (rather than the period of four (4) consecutive fiscal quarters of the Parent then ended). 1.19 Amendment to Section 7.10. Section 7.10 of the Credit Agreement is hereby amended by inserting the following new clause (c) at the end thereof: (c) Minimum Liquidity. As of the last day of any fiscal month ending during the period commencing on the Second Amendment Effective Date and ending on May 26, 2021, permit Liquidity to be less than the corresponding amount specified below for such fiscal month: Period Minimum Liquidity Second Amendment Effective Date through $60,000,000 September 23, 2020 September 24, 2020 through November 18, $65,000,000 2020 November 19, 2020 through May 26, 2021 $70,000,000 1.20 Amendment to Article VII. Article VII of the Credit Agreement is hereby amended by inserting the following new Section 7.19 at the end thereof: Section 7.19 Consolidated Capital Expenditures. During the period commencing on the Second Amendment Effecting Date and ending on March 31, 2021, make any Consolidated Capital Expenditures in an amount that exceeds $10,000,000 in the aggregate for the Loan Parties and their Subsidiaries during such period (provided that any exchange of property permitted under Section 7.04(c) shall not otherwise be restricted by this Section 7.19). 1.21 Amendment to Section 10.22. Section 10.22 of the Credit Agreement is hereby amended and restated in its entirety to read as follows: 10.22 Acknowledgement and Consent to Bail-In of Affected Financial Institutions. Solely to the extent any Lender or L/C Issuer that is an Affected Financial Institution is a party to this Agreement and notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender or L/C Issuer that is an Affected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by: (a) the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and (b) the effects of any Bail-In Action on any such liability, including, if applicable: (i) a reduction in full or in part or cancellation of any such liability; (ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or CHAR1\1726095v7 7

(iii) the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of the applicable Resolution Authority. 1.22 Amendment to Article X. Article X of the Credit Agreement is hereby amended by inserting the following new Section 10.23 after Section 10.22 as follows: 10.23 Acknowledgement Regarding Any Supported QFCs. To the extent that the Loan Documents provide support, through a guarantee or otherwise, for Hedge Agreements or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and, each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the FDIC under the Federal Deposit Insurance Act and Title II of the Dodd- Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States): (a) In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support. (b) As used in this Section 10.23, the following terms have the following meanings: “BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party. “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b). CHAR1\1726095v7 8

“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable. “QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D). ARTICLE II LIMITED WAIVER 2.1 Limited Waiver. Effective as of the Second Amendment Effective Date, and subject to the terms and conditions set forth herein and in reliance upon the representations and warranties set forth herein, each Lender party hereto hereby waives compliance by the Loan Parties with Section 7.10 of the Credit Agreement, solely for the fiscal quarters of the Parent ending on or about June 24, 2020, September 23, 2020 and December 30, 2020 (and for this purpose such waiver shall be interpreted as if the Loan Parties were not required to comply with Section 7.10 of the Credit Agreement for the fiscal quarters of the Parent ending on or about June 24, 2020, September 23, 2020 and December 30, 2020). The foregoing waiver is a one-time waiver and applies only to the specified circumstances and does not modify or otherwise affect the Loan Parties’ obligations to comply with such provisions of the Credit Agreement or any other provision of the Loan Documents in any other instance. The foregoing limited waiver shall not be deemed or otherwise construed to constitute a waiver of any other provision or to prejudice any right, power or remedy which the Administrative Agent or any Lender may not have or may have in the future under or in connection with the Credit Agreement or any other Loan Document, all of which rights, powers and remedies are hereby expressly reserved by the Administrative Agent and the Lenders. The agreements and consents set forth in this Section 2 are limited to the extent specifically set forth above and no other terms, covenants or provisions of the Credit Agreement or the other Loan Documents are intended to be affected hereby. ARTICLE III CONDITIONS 3.1 Closing Conditions. This Amendment shall be deemed effective as of the date set forth above (the “Second Amendment Effective Date”) upon satisfaction of the following conditions (in form and substance reasonably acceptable to the Administrative Agent): (a) Executed Amendment. The Administrative Agent shall have received a copy of this Amendment duly executed by each of the Loan Parties, the Administrative Agent and the Required Lenders. (b) Fees and Out of Pocket Costs. The Administrative Agent shall have received amendment fees for the account of each Lender consenting to this Amendment and the Borrower shall have paid any and all reasonable out-of-pocket costs incurred by the Administrative Agent (including the fees and expenses Moore & Van Allen PLLC as legal counsel to the Administrative Agent) and all other fees and amounts required to be paid to the Administrative Agent, in each case in connection with the negotiation, preparation, execution and delivery of this Amendment. CHAR1\1726095v7 9

ARTICLE IV MISCELLANEOUS 4.1 Amended Terms. On and after the date hereof, all references to the Credit Agreement in each of the Loan Documents shall hereafter mean the Credit Agreement as amended by this Amendment. Except as specifically amended hereby or otherwise agreed, the Credit Agreement is hereby ratified and confirmed and shall remain in full force and effect according to its terms. 4.2 Representations and Warranties of the Loan Parties. Each of the Loan Parties represents and warrants as follows: (a) Each Loan Party has all requisite power and authority and has taken all necessary corporate and other action to authorize the execution, delivery and performance of this Amendment in accordance with its terms. (b) This Amendment has been duly executed and delivered by the duly authorized officers of each Loan Party that is a party hereto and constitutes a legal, valid and binding obligation of each Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms. (c) No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required for the execution, delivery, performance, validity or enforceability of this Amendment. (d) The representations and warranties set forth in Article V of the Credit Agreement and in any other Loan Document (as amended hereby) are true and correct in all material respects as of the date hereof (except for (i) those which expressly relate to an earlier date, which shall be true and correct in all material respects as of such earlier date, (ii) those that are qualified by materiality or reference to Material Adverse Effect, which are true and correct in all respects and (iii) those contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent financial statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Credit Agreement). (e) No event has occurred and is continuing which constitutes a Default or an Event of Default. (f) The Collateral Documents continue to create a valid security interest in, and Lien upon, the Collateral, in favor of the Administrative Agent, for the benefit of the Lenders, which security interests and Liens are perfected in accordance with the terms of the Collateral Documents and prior to all Liens other than Permitted Liens. (g) Each Guarantor affirms all of its obligations under the Loan Documents and agrees that this Amendment and all documents executed in connection herewith do not operate to reduce or discharge its obligations under the Credit Agreement or the other Loan Documents. (h) The Obligations of the Loan Parties are not reduced or modified by this Amendment and are not subject to any offsets, defenses or counterclaims. 4.3 Reaffirmation of Obligations. Each Loan Party hereby ratifies the Credit Agreement and each other Loan Document to which it is a party and acknowledges and reaffirms (a) that it is bound by all terms of the Credit Agreement and each other Loan Document to which it is a party applicable to it CHAR1\1726095v7 10

and (b) that it is responsible for the observance and full performance of its respective obligations under the Loan Documents. 4.4 Release. The Borrower and each of the other Loan Parties hereby releases and forever discharges the Administrative Agent, each Lender, the L/C Issuer and their respective predecessors, successors, assigns, attorneys and Related Parties (each and every of the foregoing, a “Lender Party”) from any and all claims, counterclaims, demands, damages, debts, suits, liabilities, actions and causes of action of any nature whatsoever, in each case to the extent arising in connection with any of the Loan Documents through the date hereof, whether arising at law or in equity, whether known or unknown, whether liability be direct or indirect, liquidated or unliquidated, whether absolute or contingent, foreseen or unforeseen, and whether or not heretofore asserted, which any Loan Party may have or claim to have against any Lender Party. 4.5 Loan Document. This Amendment shall constitute a Loan Document under the terms of the Credit Agreement. 4.6 Expenses. The Borrower agrees to pay all reasonable costs and expenses of Administrative Agent in connection with the preparation, execution and delivery of this Amendment, including without limitation the reasonable fees and expenses of the Administrative Agent’s legal counsel. 4.7 Entirety. This Amendment and the other Loan Documents embody the entire agreement among the parties hereto and supersede all prior agreements and understandings, oral or written, if any, relating to the subject matter hereof. 4.8 Counterparts; Telecopy. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Delivery of an executed counterpart to this Amendment by telecopy or other electronic means shall be as delivery of a manually executed counterpart of this Amendment. 4.9 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 4.10 Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns. 4.11 Consent to Jurisdiction; Service of Process; Waiver of Jury Trial. The jurisdiction, services of process and waiver of jury trial provisions set forth in Sections 10.14 and 10.15 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis. [Signature pages to follow] CHAR1\1726095v7 11

CITIZENS BANK, N.A. By: ______________________________________ ____ __ __ __ __ __ ____ Name: Aaron MuccinoMuccino Title: AVP DENNY’S, INC. SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT

FIFTH THIRD BANK, NATIONAL ASSOCIATION By: ___________________________________ Name: Greg McGinley Title: Authorized Signatory DENNY’S, INC. SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT

BANK OF THE WEST By: ___________________________________ Name: James Gibson Title: Director DENNY’S, INC. SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT

MUFG UNION BANK, N.A. By: ___________________________________ Name: Christine Howatt Title: Authorized Signatory DENNY’S, INC. SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT

DENNY’S CORPORATION REPORTS RESULTS FOR FIRST QUARTER 2020

SPARTANBURG, S.C., May 14, 2020 - Denny’s Corporation (NASDAQ: DENN), franchisor and operator of one of America's largest franchised full-service restaurant chains, today reported results for its first quarter ended March 25, 2020 and provided a business update on the impact of the COVID-19 pandemic on the Company’s operations.

John Miller, Chief Executive Officer, stated, “While the Denny's brand had a positive start to the year delivering solid sales results through February, the dramatic and sudden impact of COVID-19 and related restrictive government mandates weighed on the final weeks of the fiscal first quarter. Despite this unprecedented challenge, we and our franchise partners adapted quickly with a primary focus on further protecting our guests, restaurant teams, employees, and suppliers through enhanced health and safety training and protocols. As restaurant operations were being limited to off-premise sales channels, we implemented streamlined menus, 'Dine-Thru' curbside service programs, and shareable family meal packs in a matter of days. I am especially proud of how well our seasoned management team and network of franchisees are working together in these extremely difficult times with an enduring resolve to continue safely serving our guests and the communities in which we live."

Miller continued, "At the same time, we have fortified our balance sheet, made disciplined cost savings decisions, and worked aggressively on multiple fronts to secure various forms of financial relief for our franchisees. As we look ahead, we are well-positioned to reopen dining rooms, focus on recovery, and create value for our stakeholders."

First Quarter 2020 Highlights


•	Total Operating Revenue was $96.7 million.


•	Domestic system-wide same-store sales** decreased 6.3%.


•	Completed 13 remodels, including 12 at franchised restaurants.


•	Operating Income was $18.0 million.


•	Franchise Operating Margin* was $25.2 million, or 46.4% of franchise and license revenue, and Company Restaurant Operating Margin* was $6.2 million, or 14.6% of company restaurant sales.


•	Net Income was $9.0 million, or $0.16 per diluted share.


•	Adjusted Net Income* was $9.9 million, or $0.17 per diluted share.


•	Adjusted EBITDA* was $15.7 million.


•	Adjusted Free Cash Flow* was $9.0 million.


•	Repurchased $34.2 million of common stock.

COVID-19 Business Update

Domestic and international operations of Denny's Corporation (the "Company") and its franchisees have been significantly disrupted by the global COVID-19 pandemic due to related federal, state and local government responses that include "stay at home" directives and mandated dining room closures. The Company remains focused on the safety and wellbeing of its guests, restaurant teams, franchisees, employees, and suppliers. Retraining materials and communications have been distributed to the entire system of restaurants, reinforcing strict food safety procedures, handwashing and personal hygiene standards, and enhanced daily deep cleaning protocols. These enhanced health and safety measures were developed in anticipation of dine-in service restrictions starting to ease and as Denny’s restaurants prepare for new social-distancing standards in their dining rooms. The Company has remained in close contact with public health officials and government agencies to ensure all public health concerns are appropriately addressed.

The Company has also worked closely with its suppliers to address contingency plans and has not experienced any significant supply chain issues.

Current Trends

Domestic system-wide same-store sales** have sequentially improved over the last few weeks of April, as compared to the equivalent weeks of 2019, from the low of -80% experienced in the final week of the first fiscal quarter, which ended on March 25, 2020. The following table presents second quarter weekly results compared to the equivalent fiscal weeks in 2019:

Second Quarter 2020 Weekly Domestic System-Wide Same-Store Sales^**



Week Ended 4/1	Week Ended 4/8	Week Ended 4/15	Week Ended 4/22	Week Ended 4/29	Week Ended 5/6
-79%	-78%	-76%	-72%	-72%	-68%

Average unit volumes of off-premise sales have more than doubled from February 2020 to April 2020, supported by temporarily waived delivery fees, new “Dine-Thru” curbside service programs, and recently launched shareable family meal packs. Pick-up sales in April 2020 accounted for 57% of total sales, while delivery sales accounted for 39%.

As of May 13, 2020, 82% of domestic Denny's restaurants were operating, most with take-out and delivery options, streamlined menus, and reduced operating hours, which impacted same-store sales** results. Currently, 312 Denny's restaurants remain temporarily closed, including 272 domestic franchise restaurants and 40 international franchise restaurants. Additionally, with easing restrictions for dine-in service, 521 Denny's restaurants have reopened dining rooms with capacity limitations in 21 states. As dining room restrictions continue to ease and sales begin to improve, some labor inefficiencies and increased cleaning and supply costs are anticipated as Company operated restaurants adjust to improved sales volumes and enhanced health and safety protocols.

Franchisee Support

As previously disclosed, direct financial relief to Denny’s franchise partners has included: deferral of remodels until further notice, deferral of royalty and advertising fees for week 11 of the 2020 fiscal year, abatement of such fees for weeks 12 and 13 of the 2020 fiscal year, and a 12-week lease deferral for franchisees operating in properties owned by the Company.

Additionally, the Company has secured rent relief in the form of abatements or deferrals for approximately 75% of the leases in which the Company is a lessee, including those instances in which the Company subleases to franchisees and will be extending the same relief as a pass through.

Furthermore, the Company has worked closely with key vendors and primary third-party franchise lenders to help secure additional relief on behalf of franchisees. Denny’s franchisees are pursuing available forms of relief under recent federal stimulus programs, and franchisees representing over 82% of total domestic franchise restaurants have received funding under the Paycheck Protection Program, with another 7% approved and awaiting funding.

Cost Savings Initiatives and Capital Allocation

The Company has implemented cost savings measures, including suspended travel, canceled in-person field meetings, placed holds on all open corporate and field positions, significantly reduced restaurant level staffing across the company portfolio, meaningfully reduced compensation for the Board of Directors and multiple levels of management, and furloughed over 25% of the employees at its corporate office. The Company is also analyzing whether federal tax credits available in connection with the COVID-19 pandemic apply to wages paid to retained employees during the crisis. In addition, the Company suspended share repurchases as of February 27, 2020, and terminated its 10b5-1 Plan effective March 16, 2020, in light of uncertain market conditions arising from the COVID-19 pandemic.

Prior to the end of the quarter ended March 25, 2020, the Company borrowed $40.5 million under its existing credit facility to provide enhanced financial flexibility in light of uncertain market conditions arising from the COVID-19 pandemic. As of March 25, 2020, the Company had approximately $39.2 million of cash and cash equivalents, outstanding borrowings under its credit facility of $318 million, and availability of $62.7 million.

For the quarter ended March 25, 2020, the Company was in compliance with its financial covenants related to its credit facility, but projected that it would not be in compliance with certain financial covenants beginning for the quarter ending June 24, 2020. Subsequent to the quarter ended March 25, 2020, the Company and certain of its subsidiaries entered into a second amendment to the current credit agreement (the "Second Amendment") dated as of May 13, 2020 (the "Effective Date") which amends the current credit agreement dated as of October 26, 2017.

The Second Amendment temporarily waives certain financial covenants. The consolidated fixed charge coverage ratio is waived until the fiscal quarter ending March 31, 2021, at which point the covenant level will revert to a minimum of 1.50x. The consolidated leverage ratio covenant is waived until the fiscal quarter ending March 31, 2021, at which point the covenant level will increase from 4.00x to 4.50x, stepping down to 4.25x in the second fiscal quarter of 2021 and 4.00x in the third fiscal quarter of 2021 and thereafter. Effective May 13, 2020, the Second Amendment adds a monthly minimum liquidity covenant, defined as the sum of unrestricted cash and revolver availability. We project that we will be in compliance with the financial covenants, as amended, over the next twelve months.

Commencing with the Second Amendment until the date of delivery of our financial statements for the fiscal quarter ending June 30, 2021, the interest rate of the Amended Credit Agreement shall be increased to LIBOR plus 3.00%. During this period, the Company will be prohibited from paying dividends and making stock repurchases and other general investments. Additionally, capital expenditures will be restricted to $10 million in the aggregate, beginning on the Effective Date through the fiscal quarter ending March 31, 2021.

First Quarter Results

Denny’s total operating revenue was $96.7 million compared to $151.4 million in the prior year quarter. Franchise and license revenue was $54.4 million compared to $52.9 million in the prior year quarter. Company restaurant sales were $42.3 million compared to $98.5 million in the prior year quarter. These changes were primarily due to the Company's refranchising and development strategy which was substantially complete by the end of 2019, the early impact of COVID-19 on sales, and the related abatement of royalty and advertising fees during the last two weeks of the quarter.

Franchise Operating Margin* was $25.2 million, or 46.4% of franchise and license revenue, compared to $25.8 million, or 48.8%, in the prior year quarter. This margin rate decrease was primarily driven by the royalty abatement and a $1 million bad debt allowance on franchise related receivables due to COVID-19, partially offset by an increase in occupancy revenue from additional leases and subleases to franchisees as a result of our refranchising and development strategy in 2019.

Company Restaurant Operating Margin* was $6.2 million, or 14.6% of company restaurant sales, compared to $14.4 million, or 14.6%, in the prior year quarter. The margin rate was flat compared to the prior year quarter, as an increase in occupancy related expenses from refranchising restaurants where the Company owns the real estate as well as an increase in general liability costs primarily due to higher property insurance costs were generally offset by a decrease in other operating costs.

Total general and administrative expenses were $7.7 million, compared to $18.8 million in the prior year quarter. This change was due to a reduction in share-based compensation expense, market valuation changes in the Company's deferred compensation plan liabilities, a decrease in performance-based incentive compensation, and the rationalization of certain business costs in connection with our refranchising and development strategy.

Interest expense, net was $4.0 million, compared to $5.4 million in the prior year quarter, primarily due to lower interest rates, lower average credit facility borrowings, and a reduction in financing leases. Denny’s ended the quarter with $334.1 million of total debt outstanding, including $318.0 million of borrowings under its credit facility.

The provision for income taxes was $2.3 million, reflecting an effective tax rate of 20.5%. Approximately $0.2 million in cash taxes was paid during the quarter.

Net income was $9.0 million, or $0.16 per diluted share, compared to $15.5 million, or $0.24 per diluted share, in the prior year quarter. Adjusted Net Income Per Share* was $0.17 compared to $0.13 in the prior year quarter.

Adjusted Free Cash Flow* and Capital Allocation

Denny’s generated $9.0 million of Adjusted Free Cash Flow* in the quarter after investing $2.8 million in cash capital expenditures, including maintenance capital and remodels.

During the quarter, the Company allocated $34.2 million to share repurchases before suspending share repurchases as of February 27, 2020.

Business Outlook

On March 16, 2020, the Company announced that it had withdrawn its guidance for the fiscal year ending on December 30, 2020. Given the dynamic and evolving impact of the COVID-19 pandemic on the Company's operations and substantial uncertainty about future performance, the Company cannot reasonably provide an updated business outlook at this time.


*	Please refer to the Reconciliation of Net Income to Non-GAAP Financial Measures, as well as the Reconciliation of Operating Income to Non-GAAP Financial Measures included in the following tables.

** Same-store sales include sales at company restaurants and non-consolidated franchised and licensed restaurants that were open the same period in the prior year. Total operating revenue is limited to company restaurant sales and royalties, advertising revenue, fees and occupancy revenue from non-consolidated franchised and licensed restaurants. Accordingly, domestic franchise same-store sales and domestic system-wide same-store sales should be considered as a supplement to, not a substitute for, the Company's results as reported under GAAP.

Conference Call and Webcast Information

Denny’s will provide further commentary on the results for the first quarter ended March 25, 2020 on its quarterly investor conference call today, Tuesday, May 14, 2020 at 4:30 p.m. Eastern Time. Interested parties are invited to listen to a live broadcast of the conference call accessible through the investor relations section of Denny’s website at investor.dennys.com. A replay of the call may be accessed at the same location later in the day and will remain available for 30 days.

About Denny’s

Denny's Corporation is the franchisor and operator of one of America's largest franchised full-service restaurant chains, based on the number of restaurants. As of March 25, 2020, Denny’s had 1,695 franchised, licensed, and company restaurants around the world including 147 restaurants in Canada, Puerto Rico, Mexico, the Philippines, New Zealand, Honduras, the United Arab Emirates, Costa Rica, Guam, Guatemala, the United Kingdom, El Salvador, Indonesia, and Aruba. For further information on Denny's, including news releases, links to SEC filings, and other financial information, please visit the Denny's investor relations website at investor.dennys.com.

The Company urges caution in considering its current trends and any outlook on earnings disclosed in this press release. In addition, certain matters discussed in this release may constitute forward-looking statements. These forward-looking statements, which reflect its best judgment based on factors currently known, are intended to speak only as of the date such statements are made and involve risks, uncertainties, and other factors that may cause the actual performance of Denny’s Corporation, its subsidiaries, and underlying restaurants to be materially different from the performance indicated or implied by such statements. Words such as “expect”, “anticipate”, “believe”, “intend”, “plan”, “hope”, and variations of such words and similar expressions are intended to identify such forward-looking statements. Except as may be required by law, the Company expressly disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events. Factors that could cause actual performance to differ materially from the performance indicated by these forward-looking statements include, among others: the rapidly evolving COVID-19 pandemic and related containment measures, including the potential for further operational disruption from government mandates affecting restaurants; economic, public health and political conditions that impact consumer confidence and spending, including COVID-19; competitive pressures from within the restaurant industry; the level of success of our operating initiatives and advertising and promotional efforts; adverse publicity; health concerns arising from food-related pandemics, outbreaks of flu viruses, such as avian flu, or other diseases; changes in business strategy or development plans; terms and availability of capital; regional weather conditions; overall changes in the general economy (including with regard to energy costs), particularly at the retail level; political environment (including acts of war and terrorism); and other factors from time to time set forth in the Company’s SEC reports and other filings, including but not limited to the discussion in Management’s Discussion and Analysis and the risks identified in Item 1A. Risk Factors contained in the Company’s Annual Report on Form 10-K for the year ended December 25, 2019 (and in the Company’s subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K).

Investor Contact:

Curt Nichols

877-784-7167

Media Contact:

Hadas Streit, Allison+Partners

646-428-0629



DENNY’S CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited)

(In thousands)				3/25/20			12/25/19
Assets
	Current assets
		Cash and cash equivalents		$	39,218		$	3,372
		Investments		5,165			3,649
		Receivables, net		15,136			27,488
		Assets held for sale		—			1,925
		Other current assets		12,065			16,299
			Total current assets	71,584			52,733
	Property, net			97,077			97,626
	Financing lease right-of-use assets, net			11,205			11,720
	Operating lease right-of-use assets, net			152,952			158,550
	Goodwill			36,884			36,832
	Intangible assets, net			53,270			53,956
	Deferred income taxes, net			28,999			14,718
	Other noncurrent assets, net			32,162			34,252
			Total assets	$	484,133		$	460,387

Liabilities
	Current liabilities
		Current finance lease liabilities		$	1,637		$	1,674
		Current operating lease liabilities		16,403			16,344
		Accounts payable		12,009			20,256
		Other current liabilities		35,989			57,307
			Total current liabilities	66,038			95,581
	Long-term liabilities
		Long-term debt		318,000			240,000
		Noncurrent finance lease liabilities		14,413			14,779
		Noncurrent operating lease liabilities		149,239			152,750
		Other		136,935			95,341
			Total long-term liabilities	618,587			502,870
			Total liabilities	684,625			598,451

Shareholders' deficit
		Common stock		1,097			1,094
		Paid-in capital		599,401			603,980
		Deficit		(180,385		)	(189,398		)
		Accumulated other comprehensive loss, net of tax		(66,632		)	(33,960		)
		Treasury stock		(553,973		)	(519,780		)
			Total shareholders' deficit	(200,492		)	(138,064		)
			Total liabilities and shareholders' deficit	$	484,133		$	460,387

Debt Balances
(In thousands)				3/25/20			12/25/19
Credit facility revolver due 2022				$	318,000		$	240,000
Finance lease liabilities				16,050			16,453
	Total debt			$	334,050		$	256,453



DENNY’S CORPORATION
Condensed Consolidated Statements of Income
(Unaudited)

			Quarter Ended
(In thousands, except per share amounts)			3/25/20			3/27/19
Revenue:
	Company restaurant sales		$	42,291		$	98,545
	Franchise and license revenue		54,404			52,866
		Total operating revenue	96,695			151,411
Costs of company restaurant sales, excluding depreciation and amortization			36,118			84,113
Costs of franchise and license revenue, excluding depreciation and amortization			29,170			27,058
General and administrative expenses			7,742			18,811
Depreciation and amortization			4,146			6,233
Operating (gains), losses and other charges, net			1,473			(8,935		)
		Total operating costs and expenses, net	78,649			127,280
Operating income			18,046			24,131
Interest expense, net			3,951			5,407
Other nonoperating expense (income), net			2,763			(1,423		)
Income before income taxes			11,332			20,147
Provision for income taxes			2,319			4,657
Net income			$	9,013		$	15,490


Basic net income per share			$	0.16		$	0.25
Diluted net income per share			$	0.16		$	0.24

Basic weighted average shares outstanding			56,300			61,651
Diluted weighted average shares outstanding			58,106			63,683

Comprehensive (loss) income			$	(23,659	)	$	3,337

General and Administrative Expenses			Quarter Ended
(In thousands)			3/25/20			3/27/19
Corporate administrative expenses			$	11,781		$	12,868
Share-based compensation			(1,537		)	2,253
Incentive compensation			14			2,539
Deferred compensation valuation adjustments			(2,516		)	1,151
	Total general and administrative expenses		$	7,742		$	18,811



DENNY’S CORPORATION
Reconciliation of Net Income to Non-GAAP Financial Measures
(Unaudited)

The Company believes that, in addition to GAAP measures, certain other non-GAAP financial measures are appropriate indicators to assist in the evaluation of operating performance on a period-to-period basis. The Company uses Adjusted EBITDA, Adjusted Free Cash Flow, Adjusted Net Income and Adjusted Net Income Per Share internally as performance measures for planning purposes, including the preparation of annual operating budgets, and for compensation purposes, including bonuses for certain employees. Adjusted EBITDA is also used to evaluate the ability to service debt because the excluded charges do not have an impact on prospective debt servicing capability and these adjustments are contemplated in our credit facility for the computation of our debt covenant ratios. We define Adjusted Free Cash Flow for a given period as Adjusted EBITDA less the cash portion of interest expense net of interest income, capital expenditures, and cash taxes. Management believes that the presentation of Adjusted Free Cash Flow provides useful information to investors because it represents a liquidity measure used to evaluate, among other things, operating effectiveness and is used in decisions regarding the allocation of resources. However, each of these non-GAAP financial measures should be considered as a supplement to, not a substitute for, operating income, net income or other financial performance and liquidity measures prepared in accordance with U.S. generally accepted accounting principles.



	Quarter Ended
(In thousands, except per share amounts)	3/25/20			3/27/19
Net income	$	9,013		$	15,490
Provision for income taxes	2,319			4,657
Operating (gains), losses and other charges, net	1,473			(8,935		)
Other nonoperating (income) expense, net	2,763			(1,423		)
Share-based compensation	(1,537		)	2,253
Deferred compensation plan valuation adjustments	(2,516		)	1,151
Interest expense, net	3,951			5,407
Depreciation and amortization	4,146			6,233
Cash payments for restructuring charges and exit costs	(684		)	(751		)
Cash payments for share-based compensation	(3,211		)	(3,531		)
Adjusted EBITDA	$	15,717		$	20,551

Cash interest expense, net	(3,720		)	(5,148		)
Cash paid for income taxes, net	(224		)	(367		)
Cash paid for capital expenditures	(2,818		)	(7,815		)
Adjusted Free Cash Flow	$	8,955		$	7,221

	Quarter Ended
(In thousands, except per share amounts)	3/25/20			3/27/19
Net income	$	9,013		$	15,490
Gains on sales of assets and other, net	(1,070		)	(9,475		)
Impairment charges	2,181			—
Tax effect ⁽¹⁾	(228		)	2,448
Adjusted Net Income	$	9,896		$	8,463

Diluted weighted average shares outstanding	58,106			63,683

Diluted Net Income Per Share	$	0.16		$	0.24
Adjustments Per Share	$	0.01		$	(0.11	)
Adjusted Net Income Per Share	$	0.17		$	0.13



(1)	Tax adjustments for the three months ended March 25, 2020 are calculated using the Company's year-to-date effective rate of 20.5%. Tax adjustments for the three months ended March 27, 2019 are calculated using an effective tax rate of 25.8%.



DENNY’S CORPORATION
Reconciliation of Operating Income to Non-GAAP Financial Measures
(Unaudited)

The Company believes that, in addition to GAAP measures, certain other non-GAAP financial measures are appropriate indicators to assist in the evaluation of restaurant-level operating efficiency and performance of ongoing restaurant-level operations. The Company uses Total Operating Margin, Company Restaurant Operating Margin and Franchise Operating Margin internally as performance measures for planning purposes, including the preparation of annual operating budgets, and these three non-GAAP measures are used to evaluate operating effectiveness.

We define Total Operating Margin as operating income excluding the following three items: general and administrative expenses, depreciation and amortization, and operating (gains), losses and other charges, net. We present Total Operating Margin as a percent of total operating revenue. We exclude general and administrative expenses, which includes primarily non-restaurant-level costs associated with support of company and franchised restaurants and other activities at our corporate office. We exclude depreciation and amortization expense, substantially all of which is related to company restaurant-level assets, because such expenses represent historical sunk costs which do not reflect current cash outlays for the restaurants. We exclude special items, included within operating (gains), losses and other charges, net, to provide investors with a clearer perspective of the Company’s ongoing operating performance and a more relevant comparison to prior period results.

Total Operating Margin is the total of Company Restaurant Operating Margin and Franchise Operating Margin. We define Company Restaurant Operating Margin as company restaurant sales less costs of company restaurant sales (which include product costs, company restaurant level payroll and benefits, occupancy costs, and other operating costs including utilities, repairs and maintenance, marketing and other expenses) and present it as a percent of company restaurant sales. We define Franchise Operating Margin as franchise and license revenue (which includes franchise royalties and other non-food and beverage revenue streams such as initial franchise fees, advertising revenue and occupancy revenue) less costs of franchise and license revenue and present it as a percent of franchise and license revenue.

These non-GAAP financial measures provide a meaningful comparison between periods and enable investors to focus on the performance of restaurant-level operations by excluding revenues and costs unrelated to food and beverage sales in addition to corporate general and administrative expense, depreciation and amortization, and other gains and charges. However, each of these non-GAAP financial measures should be considered as a supplement to, not a substitute for, operating income, net income or other financial performance measures prepared in accordance with U.S. generally accepted accounting principles. Total Operating Margin, Company Restaurant Operating Margin and Franchise Operating Margin do not accrue directly to the benefit of shareholders because of the aforementioned excluded costs, and are not indicative of the overall results for the Company.



	Quarter Ended
(In thousands)	3/25/20		3/27/19
Operating income	$	18,046	$	24,131
General and administrative expenses	7,742		18,811
Depreciation and amortization	4,146		6,233
Operating (gains), losses and other charges, net	1,473		(8,935		)
Total Operating Margin	$	31,407	$	40,240

Total Operating Margin consists of:
Company Restaurant Operating Margin ⁽¹⁾	$	6,173	$	14,432
Franchise Operating Margin ⁽²⁾	25,234		25,808
Total Operating Margin	$	31,407	$	40,240



(1)	Company Restaurant Operating Margin is calculated as operating income plus general and administrative expenses; depreciation and amortization; operating (gains), losses and other charges; and costs of franchise and license revenue; less franchise and license revenue.
(2)	Franchise Operating Margin is calculated as operating income plus general and administrative expenses; depreciation and amortization; operating (gains), losses and other charges; and costs of company restaurant sales; less company restaurant sales.



DENNY’S CORPORATION
Operating Margins
(Unaudited)

				Quarter Ended
(In thousands)				3/25/20				3/27/19
Company restaurant operations: ⁽¹⁾
	Company restaurant sales			$	42,291	100.0	%	$	98,545		100.0	%
	Costs of company restaurant sales:
		Product costs		10,130		24.0	%	23,905			24.3	%
		Payroll and benefits		17,106		40.4	%	39,832			40.4	%
		Occupancy		3,163		7.5	%	5,784			5.9	%
		Other operating costs:
			Utilities	1,436		3.4	%	3,372			3.4	%
			Repairs and maintenance	789		1.9	%	1,888			1.9	%
			Marketing	1,119		2.6	%	3,707			3.8	%
			Other direct costs	2,375		5.6	%	5,625			5.7	%
	Total costs of company restaurant sales			$	36,118	85.4	%	$	84,113		85.4	%
	Company restaurant operating margin (non-GAAP) ⁽²⁾			$	6,173	14.6	%	$	14,432		14.6	%

Franchise operations: ⁽³⁾
	Franchise and license revenue:
	Royalties			$	23,847	43.8	%	$	25,240		47.7	%
	Advertising revenue			17,526		32.2	%	18,942			35.8	%
	Initial and other fees			1,697		3.1	%	1,139			2.2	%
	Occupancy revenue			11,334		20.8	%	7,545			14.3	%
	Total franchise and license revenue			$	54,404	100.0	%	$	52,866		100.0	%

	Costs of franchise and license revenue:
	Advertising costs			$	17,526	32.2	%	$	18,942		35.8	%
	Occupancy costs			7,409		13.6	%	5,249			9.9	%
	Other direct costs			4,235		7.8	%	2,867			5.4	%
	Total costs of franchise and license revenue			$	29,170	53.6	%	$	27,058		51.2	%
	Franchise operating margin (non-GAAP) ⁽²⁾			$	25,234	46.4	%	$	25,808		48.8	%

Total operating revenue ⁽⁴⁾				$	96,695	100.0	%	$	151,411		100.0	%
Total costs of operating revenue ⁽⁴⁾				65,288		67.5	%	111,171			73.4	%
Total operating margin (non-GAAP) ⁽⁴⁾⁽²⁾				$	31,407	32.5	%	$	40,240		26.6	%

Other operating expenses: ⁽⁴⁾⁽²⁾
	General and administrative expenses			$	7,742	8.0	%	$	18,811		12.4	%
	Depreciation and amortization			4,146		4.3	%	6,233			4.1	%
	Operating (gains), losses and other charges, net			1,473		1.5	%	(8,935		)	(5.9	)%
	Total other operating expenses			$	13,361	13.8	%	$	16,109		10.6	%

Operating income ⁽⁴⁾				$	18,046	18.7	%	$	24,131		15.9	%

(1)		As a percentage of company restaurant sales.
(2)		Other operating expenses such as general and administrative expenses and depreciation and amortization relate to both company and franchise operations and are not allocated to costs of company restaurant sales and costs of franchise and license revenue. As such, operating margin is considered a non-GAAP financial measure. Operating margin should be considered as a supplement to, not as a substitute for, operating income, net income or other financial measures prepared in accordance with U.S. generally accepted accounting principles.
(3)		As a percentage of franchise and license revenue.
(4)		As a percentage of total operating revenue.



DENNY’S CORPORATION
Statistical Data
(Unaudited)

Changes in Same-Store Sales ⁽¹⁾			Quarter Ended
(increase (decrease) vs. prior year)			3/25/20			3/27/19
	Company Restaurants		(9.4		)%	1.5		%
	Domestic Franchised Restaurants		(6.0		)%	1.2		%
	Domestic System-wide Restaurants		(6.3		)%	1.3		%

Average Unit Sales			Quarter Ended
(In thousands)			3/25/20			3/27/19
	Company Restaurants		$	627		$	582
	Franchised Restaurants		$	384		$	402

						Franchised
Restaurant Unit Activity			Company			& Licensed			Total
Ending Units December 25, 2019			68			1,635			1,703
	Units Opened		—			8			8
	Units Refranchised		—			—			—
	Units Closed		(1		)	(15		)	(16	)
		Net Change	(1		)	(7		)	(8	)
Ending Units March 25, 2020			67			1,628			1,695

Equivalent Units
	Year-to-Date 2020		67			1,631			1,698
	Year-to-Date 2019		169			1,534			1,703
		Net Change	(102		)	97			(5	)

(1)		Same-store sales include sales at company restaurants and non-consolidated franchised and licensed restaurants that were open the same period in the prior year. Total operating revenue is limited to company restaurant sales and royalties, advertising revenue, fees and occupancy revenue from non-consolidated franchised and licensed restaurants. Accordingly, domestic franchise same-store sales and domestic system-wide same-store sales should be considered as a supplement to, not a substitute for, our results as reported under GAAP.



Delaware	0-18051	13-3487402
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
$.01 Par Value, Common Stock	DENN	The Nasdaq Stock Market LLC



Exhibit number	Description
10.1	Second Amendment to Third Amended and Restated Credit Agreement dated May 13, 2020 among Denny's Inc., as the Borrower, Denny's Corporation, as Parent, and each of the Subsidiaries of Parent party thereto, as Guarantors, and Wells Fargo Bank, National Association, as Administrative Agent on behalf of the Lenders.
99.1	Press release issued by Denny's Corporation on May 14, 2020.
104	Cover Page Interactive Data File (formatted as Inline XBRL).



	Denny's Corporation


Date: May 14, 2020	/s/ Robert P. Verostek
	Robert P. Verostek
	Senior Vice President and
	Chief Financial Officer