UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): September 29, 2004
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 jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
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 September 29, 2004, Denny's Holdings, Inc. ("Denny's Holdings"), a
wholly owned subsidiary of Denny's Corporation (the "Company"), and the Company
entered into a Purchase Agreement (the "Purchase Agreement") with the Initial
Purchasers UBS Securities LLC, Goldman, Sachs & Co. and Banc of America
Securities LLC (collectively, the "Initial Purchasers") to issue and sell in a
private placement, for resale under Rule 144A and Regulation S of the Securities
Act of 1933, as amended (the "Securities Act"), $175 million aggregate principal
amount of unsecured 10% Senior Notes Due 2012 of Denny's Holdings (the "New
Notes"). The New Notes are irrevocably, fully and unconditionally guaranteed on
a senior basis by the Company. The maturity date of the New Notes is October 1,
2012.
On October 5, 2004, Denny's Holdings issued and sold the New Notes to
the Initial Purchasers, and the following agreements were entered into in
connection with the closing of such issuance and sale: (i) Denny's Holdings, the
Company and U.S. Bank National Association, as trustee (the "Trustee"), entered
into an Indenture (the "Indenture") governing the New Notes; (ii) Denny's
Holdings executed the New Notes; (iii) the Company executed the Guarantee of the
New Notes (the "Guarantee"), and (iv) Denny's Holdings, the Company and the
Initial Purchasers entered into a Registration Rights Agreement with respect to
the New Notes (the "Registration Rights Agreement").
The New Notes have not been registered under the Securities Act. The
New Notes are subject to restrictions on transfer and may only be offered or
sold in transactions exempt from or not subject to the registration requirements
of the Securities Act.
Material terms and conditions of the New Notes, the Guarantee and the
Indenture are described in Item 2.03 of this Current Report on Form 8-K.
Pursuant to the Registration Rights Agreement, the Company and Denny's
Holding agreed to register with the Commission exchange notes (the "Exchange
Notes"), having substantially identical terms as the New Notes, as part of an
offer to exchange freely tradable Exchange Notes for the notes. The Company and
Denny's Holdings agreed to file a registration statement for the Exchange Notes
no later than 90 days after October 5, 2004 and use their reasonable best
efforts to cause that registration statement to be declared effective within 180
days after October 5, 2004 and to consummate the exchange offer within 210 days
after October 5, 2004. The Company and Denny's Holdings have also agreed, in
specified circumstances, to file a shelf registration statement to cover resales
of the New Notes. The Company and Denny's Holdings may be required to pay
liquidated damages if they fail to comply with the registration and exchange
requirements set forth in the Registration Rights Agreement.
As reported in a Current Report on Form 8-K filed with the Commission
on September 22, 2004, on September 21, 2004, the operating subsidiaries of the
Company, Denny's, Inc. and Denny's Realty, Inc., entered into new senior secured
credit facilities in an aggregate principal amount of $420 million, consisting
of a $320 million first lien facility (the "New First Lien Facility") and a $120
million second lien facility (the "Second Lien Facility," and together with the
New First Lien Facility, the "New Credit Facilities"). UBS Securities LLC, one
of the Initial Purchasers, acts as Syndication Agent, Joint Lead Arranger and
Joint Bookrunner and a lender under both the credit agreement providing for the
New First Lien Facility (the "New First Lien Facility Agreement") and the credit
agreement providing for the Second Lien Facility (the "Second Lien Facility
Agreement"). Banc of America Securities LLC, one of the Initial Purchasers, acts
as the Joint Lead Arranger and Joint Bookrunner and a lender under both the New
First Lien Facility Agreement and the Second Lien Facility Agreement. Bank of
America, N.A., an affiliate of Banc of America Securities LLC, acts as
Administrative Agent under both the New First Lien Facility Agreement and the
Second Lien Facility Agreement, and acts as Collateral Agent under the guarantee
and collateral agreements entered into in connection with each of the New First
Lien Facility Agreement and the Second Lien Facility Agreement.
U.S. Bank National Association, the Trustee under the Indenture, is
also the trustee under the indenture governing the 12 3/4% Senior Notes due 2007
issued by the Company and Denny's Holdings (the "12 3/4% Notes") and under the
indenture governing the 11 1/4% Senior Notes Due 2007 issued by the Company (the
"11 1/4% Notes").
UBS Investment Bank, an affiliate of UBS Securities LLC, and Goldman,
Sachs & Co., an Initial Purchaser, are acting as Dealer Managers and
Solicitation Agents with respect to the Company's previously announced tender
offers for the 11 1/4% Notes and the 12 3/4% Notes further described below.
For additional information, see Item 7.01 of the Current Report on Form
8-K.
The information contained in this Current Report on Form 8-K, including
the exhibit hereto, does not constitute an offer to sell or the solicitation of
an offer to buy the securities described herein, nor shall there be any sale of
these securities in any state or jurisdiction in which such an offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities law of any such jurisdiction. The New Notes
and the Exchange Notes have not been registered under the Securities Act or the
securities or blue sky laws of any jurisdiction and, unless registered, may not
be offered or sold except pursuant to an applicable exemption from the
registration requirements of the Securities Act and applicable securities laws
of any other jurisdiction.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant.
As discussed in Item 1.01 of this Current Report on Form 8-K, on
October 5, 2004, Denny's Holdings completed the sale of $175 million aggregate
principal amount of its New Notes. The New Notes are irrevocably, fully and
unconditionally guaranteed on a senior basis by the Company pursuant to the
Guarantee. The Company is not subject to the restrictive covenants in the
Indenture. Denny's Holdings is restricted from paying dividends and making
distributions to the Company under the terms of the Indenture.
The New Notes will mature on October 1, 2012 and will bear interest at
the rate of 10% per year from and including the issue date, payable
semi-annually, in arrears on April 1 and October 1 of each year, commencing
April 1, 2005. The New Notes are general, unsecured senior obligations of
Denny's Holdings, and rank: (i) equal in right of payment to all of the existing
and future indebtedness and other obligations of Denny's Holdings that are not,
by their terms, expressly subordinated in right of payment to the New Notes;
(ii) senior in right of payment to all of the existing and future subordinated
indebtedness of Denny's Holdings; and (iii) effectively subordinated to all of
the existing and future secured debt of Denny's Holdings to the extent of the
value of the assets securing such debt and structurally subordinated to all
indebtedness and other liabilities of the subsidiaries of Denny's Holdings,
including the New Credit Facilities.
Denny's Holdings may redeem the New Notes for cash, in whole or in
part, at its option at any time on or after October 1, 2008, at redemption
prices equal to 100% of the principal amount plus a premium declining ratably to
par, together with accrued and unpaid interest and liquidated damages, if any,
to the redemption date. In addition, at any time on or before October 1, 2007,
Denny's Holdings may, at its option and subject to certain requirements, use the
cash proceeds from one or more qualified equity offerings by the Company to
redeem up to 35% of the aggregate principal amount of the New Notes issued under
the Indenture at a redemption price equal to 110% of the principal amount,
together with accrued and unpaid interest and liquidated damages, if any,
thereon to the redemption date. If a change of control (as defined in the
Indenture) occurs, Denny's Holdings will be required to make an offer to
purchase the New Notes at 101% of the principal amount, together with accrued
and unpaid interest and liquidated damages, if any, to, but not including, the
change of control purchase date.
In addition to the terms of the New Notes described above, the
Indenture contains covenants, which are subject to limitations and exceptions,
limiting the ability of Denny's Holdings and its subsidiaries (but not the
Company) to, among other things: (i) incur additional indebtedness; (ii) pay
dividends or make distributions or certain other restricted payments; (iii) make
certain investments; (iv) create liens on its assets to secure debt; (v) enter
into sale and leaseback transactions; (vi) enter into transactions with
affiliates; (vii) merge or consolidate with another company; (viii) sell, lease
or otherwise dispose of all or substantially all of its assets; (ix) enter into
new lines of business; and (x) guarantee indebtedness.
The Indenture also provides that, if an event of default occurs and is
continuing, either the Trustee or the holders of at least 25% in aggregate
principal amount of the New Notes then outstanding may declare all principal,
accrued interest and liquidated damages, if any, immediately due and payable,
except that an event of default resulting from certain events of bankruptcy,
insolvency or reorganization in respect of Denny's Holdings or certain of its
subsidiaries will automatically cause all principal, accrued interest and
liquidated damages, if any, to become immediately due and payable. Events of
default include: (i) failure to pay any installment of interest (or liquidated
damages, if any) on the New Notes when due and payable and the continuance of
any such failure for 30 days; (ii) failure to pay principal, or premium, if any,
on the New Notes when due and payable; (iii) failure to observe or perform any
other covenant or agreement contained in the New Notes or the Indenture and,
subject to certain exceptions, the continuance of such failure for a period of
30 days after notice to Denny's Holdings, (iv) certain events of bankruptcy,
insolvency or reorganization in respect of Denny's Holdings or certain of its
subsidiaries; (v) certain defaults in indebtedness with an aggregate amount
outstanding in excess of $20 million; and (vi) final unsatisfied judgments not
covered by insurance aggregating in excess of $10 million, at any one time
rendered against Denny's Holdings us or any of its subsidiaries and not stayed,
bonded or discharged within 60 days.
Pursuant to the Guarantee, the Company has irrevocably, fully and
unconditionally guaranteed on a senior basis the following obligations: (i) the
due and punctual payment of the principal of, premium, if any, and interest and
liquidated damages, if any, on the New Notes, the due and punctual payment of
interest on the overdue principal and premium, if any, and interest on any
interest on the New Notes, and the due and punctual performance of all other
obligations of Denny's Holdings to the holders of the New Notes or the Trustee.
For additional information, Item 7.01 of the Current Report on Form
8-K.
Item 3.03. Material Modification to Rights of Security Holders.
As reported in a Current Report on Form 8-K filed with the Commission
on September 22, 2004, in connection with the previously announced cash tender
offers and consent solicitations by the Company for any and all of the
outstanding 12 3/4% Notes and for any and all of the outstanding 11 1/4% Notes,
which commenced on September 7, 2004, the Company received the requisite
consents from the holders of the 12 3/4% Notes and the 11 1/4% Notes to approve
certain amendments (the "Amendments") to the indentures under which the 12 3/4%
Notes and the 11 1/4% Notes were issued. The Amendments eliminate substantially
all of the restrictive covenants and related events of default in the respective
indentures and, in each case, reduce the minimum notice period for the
redemption of the 12 3/4% Notes and the 11 1/4% Notes from 30 days to three
days. As previously disclosed, the Amendments to the indenture governing the 12
3/4% Notes became operative and binding on the holders of the 12 3/4% Notes as
of September 21, 2004.
The Amendments to the indenture governing the 11 1/4% Notes set forth
in the 11 1/4% Senior Notes due 2008 Supplemental Indenture dated as of
September 21, 2004 between the Company (f/k/a Advantica Restaurant Group, Inc.),
as Issuer, and U.S. Bank National Association (successor to First Trust National
Association), as Trustee, became operative and binding on the holders of the 11
1/4% Notes as of October 5, 2004, in connection with the closing of the sale of
the New Notes and the Company's acceptance of 11 1/4% Notes tendered pursuant to
the tender offer.
For additional information, see Items 2.03 and 7.01 of the Current
Report on Form 8-K.
Item 7.01. Regulation FD Disclosure.
The Company also today paid for $284,980,908 aggregate principal amount
of the 11 1/4% Notes tendered by holders (and for which consents were received)
prior to 5:00 p.m. on the September 20, 2004 consent date, pursuant to a
previously announced tender offer and consent solicitation, for total
consideration of $303,504,667 (including tender consideration of 103.75% and a
consent fee of 0.25% of the principal amount, plus accrued and unpaid interest
to date). In accordance with the terms of the tender offer and consent
solicitation for the 11 1/4% Notes, amendments to the indenture governing the 11
1/4% Notes at the same time became operative and binding on the remaining
holders of the 11 1/4% Notes. Those amendments eliminate substantially all of
the restrictive covenants and related events of default in the indenture
governing the 11 1/4% Notes and reduce the minimum notice period for the
redemption of the 11 1/4% Notes from 30 days to 3 days. The Company also paid
for $888,674 aggregate principal amount of the 11 1/4% Notes tendered by holders
after 5:00 p.m. on the September 20, 2004 consent date and prior to the
expiration of the tender offer at midnight on October 4, 2004, for total
consideration of $944,216 (including tender consideration of 103.75%, plus
accrued and unpaid interest to date). As a result of the foregoing, $58,050,042
aggregate principal amount of the 11 1/4% Notes remains outstanding, subject to
the notice of redemption described below.
As contemplated by the tender offer and consent solicitation for the 11
1/4% Notes, on October 5, 2004, the Company issued a notice of redemption with
respect to the remaining 11 1/4% Notes as of a redemption date of October 8,
2004. In accordance with the indenture governing the 11 1/4% Notes, the
redemption price on that date will be 103.75% of the principal amount of such
notes, plus accrued and unpaid interest to the redemption date. Upon redemption
of such notes on the redemption date, no 11 1/4% Notes will remain outstanding.
The Company also today paid for $8,085,000 aggregate principal amount
of the 12 3/4% Notes tendered by holders after 5:00 p.m. on the September 20,
2004 consent date and prior to the expiration of the tender offer for the 12
3/4% Notes at midnight on October 4, 2004, pursuant to a previously announced
tender offer and consent solicitation, for total consideration of $8,614,736
(including tender consideration of 106.375%, plus accrued and unpaid interest to
date). This is in addition to the $75,125,000 aggregate principal amount of 12
3/4% Notes previously tendered (and for which consents were received) prior to
5:00 p.m. on the September 20, 2004 consent date, which, as previously
announced, the Company paid for on September 21, 2004. In accordance with the
indenture governing the 12 3/4% Notes and the notice of redemption issued on
September 21, 2004, the Company and Denny's Holdings also today redeemed the
remaining 12 3/4% Notes for total consideration of $30,323,657 (including the
redemption price of 106.375%, plus accrued and unpaid interest to date). As a
result of the completion of the tender offer for the 12 3/4% Notes and this
redemption, no 12 3/4% Notes remain outstanding.
The information furnished in this Item 7.01 shall not be deemed "filed"
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or otherwise subject to the liabilities of that section.
Such information may only be incorporated by reference in another filing under
the Exchange Act or the Securities Act of 1933, as amended, if such subsequent
filing specifically references such information.
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
By:
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Rhonda J. Parish
Executive Vice President, General Counsel
and Secretary
Date: October 5, 2004