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Subsequent Events | 6 Months Ended
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Jul. 02, 2019
Subsequent Events |
Subsequent Events | 12. Subsequent Events ​ Dividend ​ On July 25, 2019, our Board declared a quarterly cash dividend of $0.36 per share to be paid on August 27, 2019 to the stockholders of record at the close of business on August 14, 2019. ​ Fox Restaurant Concepts LLC (“FRC”) Agreements ​ On July 30, 2019, we amended the previous agreements relating to our investment in North Italia and exercised our option to acquire North Italia (the “North Italia Acquisition”). In addition, we entered into a separate Membership Interest Purchase Agreement to acquire the remainder of FRC, including Flower Child and all other FRC brands (the “FRC Acquisition” and, together with the North Italia Acquisition, the “Acquisitions”). ​ The Acquisitions will be completed for $308 million in cash at closing. An additional $45 million will be due ratably over the next four years. Including $88 million previously invested in North Italia and Flower Child, total consideration is approximately $440 million. The cash due at closing will be funded by drawing on our New Facility, as described below, and cash on hand. Additionally, the FRC Acquisition includes a provision for contingent consideration based on achievement of revenue and profitability targets for the FRC brands other than North Italia and Flower Child with considerations made in the event we undergo a change in control or divest any FRC brand (other than North Italia and Flower Child). We will also be required to provide financing to FRC in an amount sufficient to support achievement of these targets during the five years after closing. ​ Our Board has unanimously approved the Acquisitions, which are expected to close around the end of the third quarter of fiscal 2019, subject to the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“Hart-Scott-Rodino Act”) and the satisfaction of the other closing conditions set forth in the applicable purchase agreement. The Acquisitions do not require approval by the Company’s shareholders. The agreements contain customary representations and warranties, as well as customary covenants and agreements of the parties, including customary indemnification provisions. The consummation of the Acquisitions is not subject to any financing condition, and each agreement provides the parties with certain termination rights in specified circumstances. ​ New Facility ​ On July 30, 2019, we entered into a Third Amended and Restated Loan Agreement (the “New Credit Agreement”), which amends and restates in its entirety our prior Second Amended and Restated Loan Agreement dated as of December 22, 2015, which had established the Facility. Among other things, the new credit agreement provides us with revolving loan commitments that total $400 million (of which $40 million may be used for the issuances of letters of credit) and which terminate on July 30, 2024 (the “New Facility”). The New Facility contains a commitment increase feature that could provide for an additional $200 million in available credit upon our request and the satisfaction of certain conditions. ​ The New Credit Agreement includes customary representations, warranties, negative and affirmative covenants (including two financial covenants: relating to maintenance of a maximum ratio of net adjusted debt to EBITDAR of 4.75 to 1.00 and a minimum ratio of EBITDAR to interest and rent expense of 1.90 to 1.00), as well as customary events of default that, if triggered, could result in acceleration of the maturity of the New Facility. Borrowings under the New Facility bear interest, at our option, at a rate equal to either: (i) the adjusted LIBO Rate (as customarily defined) (the “Adjusted LIBO Rate”) plus a margin that is based on our net adjusted leverage ratio, or (ii) the sum of (a) the highest of (1) the rate of interest last quoted by The Wall Street Journal as the prime rate in effect in the United States, (2) the greater of the rate calculated by the Federal Reserve Bank of New York as the effective federal funds rate or the rate that is published by the Federal Reserve Bank of New York as an overnight bank funding rate, in either case plus 0.5%, and (3) the one-month Adjusted LIBO Rate plus 1.0%, plus (b) a margin that is based on the Company’s net adjusted leverage ratio. Letters of credit issued under the New Facility bear fees that are equivalent to the interest rate margin that is applicable to revolving loans that bear interest at the adjusted LIBO Rate plus other customary fees charged by the issuing bank. Under the New Facility, the Company paid certain customary loan origination fees and will pay an unused fee on the unused portion of the New Facility that is also based on the Company’s net adjusted leverage ratio. ​ Our obligations under the New Facility continue to be unsecured. Certain of our material subsidiaries have guaranteed our obligations under the New Facility. The New Facility will be used for our general corporate purposes, including for the issuance of standby letters of credit to support our self-insurance programs, and to fund stock dividends and repurchases and the purchase price of permitted acquisitions. ​

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 855 -URI http://asc.fasb.org/topic&trid=2122774 + Details
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