The Denny’s Corporation 2021 Omnibus Incentive Plan (the “2021 Omnibus Plan”) is used to grant share-based compensation to selected employees, officers and directors of Denny’s and its affiliates. However, we reserve the right to pay discretionary bonuses, or other types of compensation, outside of this plan. At December 25, 2024, there were 0.9 million shares available for grant under the 2021 Omnibus Plan.


	Fiscal Year Ended
	December 25, 2024		December 27, 2023		December 28, 2022
	(In thousands)

Employee share awards	$	9,792	$	7,991	$	10,470
Restricted stock units for board members	886		889		930
Total share-based compensation	$	10,678	$	8,880	$	11,400

The income tax benefits recognized as a component of the provision for income taxes in our Consolidated Statements of Income related to share-based compensation expense were $2.8 million, $2.3 million and $2.9 million during the years ended December 25, 2024, December 27, 2023 and December 28, 2022, respectively.

Employee share awards consist of performance share units (“PSUs”) and restricted stock units ("RSUs") (which are equity classified). The number of shares that are ultimately issued is dependent upon the level of obtainment of the market and performance conditions. The following table summarizes the employee share awards activity during the year ended December 25, 2024:


	Units	Weighted Average Grant Date Fair Value
	(In thousands)
Outstanding, beginning of year	1,990	$	15.90
Granted	1,432	$	12.55
Converted	(524)	$	17.57
Performance shares adjustment	(478)	$	18.35
Forfeited	(307)	$	13.59
Outstanding, end of year	2,113	$	13.00
Convertible, end of year	461	$	11.76

During the year ended December 25, 2024, we granted certain employees 0.6 million performance share units ("PSUs") with a weighted average grant date fair value of $15.48 per share that vest based on the total shareholder return (“TSR”) of our common stock compared to the TSRs of a group of peer companies. As the TSR based PSUs contain a market condition, a Monte Carlo valuation was used to determine the grant date fair value. The performance period for these PSUs is the three year fiscal period beginning December 28, 2023 and ending December 30, 2026. The PSUs will vest and be earned at the end of the performance period at which point the relative TSR achievement percentage will be applied to the vested units (from 0% to 200% of the target award).

We also granted certain employees 0.8 million restricted stock units (“RSUs”) with a weighted average grant date fair value of $10.13 per share. These RSUs generally vest evenly over the three-year fiscal period beginning December 28, 2023 and ending December 30, 2026. We recognize compensation cost associated with these RSU awards on a straight-line basis over the entire performance period of the award.

The following table presents the weighted-average assumptions used in the Monte Carlo simulations to determine the fair value of PSU awards at the grant date, along with the related weighted-average grant date fair value of PSU awards:


	December 25, 2024	December 27, 2023	December 28, 2022
Risk-free interest rate	4.14%	3.75%	1.96%
Expected term (in years)	3.0	3.0	2.8
Expected volatility	39.2%	69.7%	66.0%
Expected dividend yield	0.0%	0.0%	0.0%
Grant date fair value per unit	$15.48	$18.39	$21.05

The risk-free interest rate was based on U.S. Treasury bond yield with a term equal to the expected life assumed at the date of grant. The expected term represents the period of time the awards are expected to be outstanding. Expected volatility was based on historical volatility of the Company. The expected dividend yield is based on the Company’s history and expectations of dividend payouts at the time of grant.

We made payments of $0.3 million, $0.1 million and $0.4 million during 2024, 2023 and 2022, respectively, related to converted performance and restricted share units. Payments relate to the payment of payroll taxes. The fair value of units converted was $5.7 million, $8.6 million and $13.8 million during 2024, 2023 and 2022, respectively. As of December 25, 2024, we had $13.9 million of unrecognized compensation cost related to unvested employee share awards, which is expected to be recognized over a weighted average of 1.8 years.

During the year ended December 25, 2024, we granted 0.1 million RSUs (which are equity classified) with a weighted average grant date fair value of $8.09 per unit to non-employee members of our Board of Directors. The RSUs vest after a one-year service period. A director may elect to convert these awards into shares of common stock on a specific date in the future (while still serving as a member of our Board of Directors), upon termination as a member of our Board of Directors, or in three equal annual installments commencing after termination of service as a member of our Board of Directors.