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JACK > SEC Filings for JACK > Form 8-K on 20-Mar-2014All Recent SEC Filings

Show all filings for JACK IN THE BOX INC /NEW/

Form 8-K for JACK IN THE BOX INC /NEW/


20-Mar-2014

Entry into a Material Definitive Agreement, Creation of a Direct Financ


Item 1.01 Entry into a Material Definitive Agreement.

On March 19, 2014, Jack in the Box Inc. (the "Company"), as borrower, entered into a second amended and restated credit agreement (the "New Credit Agreement") among the Company, Wells Fargo Bank, National Association, as administrative agent, and certain lender parties. The New Credit Agreement consists of a revolving credit facility of $600 million with a five-year maturity, and a term loan facility of $200 million with a five-year maturity.

The New Credit Agreement amends and restates the Company's existing amended and restated credit agreement dated as of November 5, 2012, as amended from time to time (the "Existing Credit Agreement"), increasing the size of the Company's revolving credit facility by $200 million. The Company borrowed the full $200 million available under the term loan facility (the "Term Loan Facility") under the New Credit Agreement and $220 million of the $600 million available under the revolving credit facility (the "Revolving Credit Facility") under the New Credit Agreement on March 19, 2014. Proceeds from the borrowings made on March 19, 2014, were used to repay all borrowings under the Existing Credit Agreement and to pay related transaction fees and expenses, including transaction fees and expenses associated with the credit facility established under the New Credit Agreement. In addition, approximately $23 million in outstanding letters of credit under the Existing Credit Agreement became outstanding under the New Credit Agreement at closing. Any future borrowings under the Revolving Credit Facility will be used for permitted share repurchases, permitted dividends, permitted acquisitions, ongoing working capital requirements and other general corporate purposes. To maintain availability of funds under the Revolving Credit Facility, undrawn amounts under the Revolving Credit Facility will accrue a commitment fee of between 20.0 basis points to 30.0 basis points per annum, based on the Company's leverage ratio. The Company's ability to borrow additional monies in the future under the Revolving Credit Facility is subject to certain conditions, including compliance with certain covenants and making certain representations and warranties.

The initial interest rates per annum applicable to loans under each of the Term Loan Facility and the Revolving Credit Facility are, at the Company's option, based on either (a) the applicable base rate (as defined in the New Credit Agreement) plus an initial margin of 75 basis points or (b) the LIBOR Rate (as defined in the New Credit Agreement) plus an initial margin of 175 basis points. From and after the date ten (10) business days after the required delivery of financial statements for the first full fiscal quarter after the closing date of the New Credit Agreement, the interest margins will be determined by the Company's leverage ratio on a quarterly basis in accordance with the applicable pricing grid, which provides for a range of base rate margins from 25 to 100 basis points and a range of LIBOR margins from 125 to 200 basis points. Interest payments under the Credit Agreement are due on the interest payment dates specified therein.

The Term Loan Facility requires amortization in the form of quarterly installments in the amount of $2.5 million per quarter for the first eight full fiscal quarters after the closing date of the New Credit Agreement, $3.75 million for the eight full fiscal quarters thereafter, $5 million for the final three fiscal quarters prior to the maturity date of the Term Loan Facility, and the balance due on such maturity date. The first such scheduled installment is required to be made on June 30, 2014. The maturity date of the Term Loan Facility is March 19, 2019. Each scheduled installment is subject to reduction based on voluntary and mandatory prepayments as set forth below. Outstanding loans under the Revolving Credit Facility will be payable in full on March 19, 2019.


The Company may make voluntary prepayments of the loans under the Term Loan Facility and the Revolving Credit Facility at any time without premium or penalty (excluding any applicable LIBOR breakage costs). Each optional prepayment of the Term Loan Facility will be applied to reduce the remaining scheduled quarterly principal installments of the Term Loan Facility (in either direct order of maturity, inverse order of maturity or on a pro rata basis, as directed by the Company).

The Company is required to make mandatory prepayments of the loans under the New Credit Agreement from asset sales, certain issuances of debt, and insurance and condemnation recoveries, subject in each case to certain exceptions and limitations specified in the New Credit Agreement. Each mandatory prepayment will be applied, first to reduce the remaining scheduled quarterly installments of the Term Loan Facility on a pro rata basis, and second, in certain cases, to reduce the commitment amount under the Revolving Credit Facility (and, to the extent required due to such commitment reduction, to prepay the loans, if any, under the Revolving Credit Facility).

The subsidiary Guarantors (as defined in the New Credit Agreement) have guaranteed the obligations of the Company under the New Credit Agreement and certain hedging and cash management obligations (collectively the "Obligations") pursuant to a separate amended and restated guaranty agreement executed in connection with the New Credit Agreement (the "Guaranty"). Any future direct and indirect subsidiaries of the Company, other than unrestricted subsidiaries (as defined in the New Credit Agreement) and other than foreign subsidiaries, also are required to guarantee the Obligations.

The Obligations are secured, with certain exceptions, by a pledge of one hundred percent of the equity interests issued by each domestic subsidiary owned by the Company, sixty-six percent of the voting equity interests issued by any first tier foreign subsidiary owned by the Company, one hundred percent of the non-voting equity interests issued by any first tier foreign subsidiary owned by the Company, and certain related collateral, pursuant to the terms of an amended and restated collateral agreement executed in connection with the New Credit Agreement (the "Collateral Agreement"). Each subsidiary Guarantor's obligations under the Guaranty are secured, with certain exceptions, by a pledge of one hundred percent of the equity interests issued by each domestic subsidiary owned by such subsidiary Guarantor, sixty-six percent of the voting equity interests issued by any first tier foreign subsidiary owned by such subsidiary Guarantor, one hundred percent of the non-voting equity interests issued by any first tier foreign subsidiary owned by such subsidiary Guarantor, and certain related collateral, pursuant to the terms of the Collateral Agreement. The subsidiary guarantees and the collateral under the Collateral Agreement are subject to release upon fulfillment of certain conditions specified in the New Credit . . .



Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The obligations of the Company and its subsidiaries under the New Credit Agreement and related loan documents constitute direct financial obligations that are material to the Company. As to such direct financial obligations, the information included in Item 1.01 of this Report is hereby incorporated by reference.



Item 7.01 Regulation FD Disclosure.

A copy of the Jack in the Box Inc. press released dated March 20, 2014, is attached to this report as Exhibit 99.1.



Item 9.01 Financial Statements and Exhibits.

(d)      Exhibits

Exhibit No.   Title
10.1          Second Amended and Restated Credit Agreement dated as of March 19, 2014,
              among Jack in the Box Inc., Wells Fargo Bank, National Association, as
              administrative agent, and the other lender and agent parties thereto

10.2          Amended and Restated Guaranty Agreement dated as of March 19, 2014,
              among Jack in the Box Inc., Wells Fargo Bank, National Association, as
              administrative agent, and the subsidiaries of Jack in the Box Inc. party
              thereto

10.3          Amended and Restated Collateral Agreement dated as of March 19, 2014,
              among Jack in the Box Inc., Wells Fargo Bank, National Association, as
              administrative agent, and the subsidiaries of Jack in the Box Inc. party
              thereto

99.1          Press Release dated March 20, 2014


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