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EX-10.1 - EX-10.1 - KORN FERRYd131460dex101.htm

 

 

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): June 15, 2016

 

 

KORN/FERRY INTERNATIONAL

(Exact Name of Registrant as Specified in Charter)

 

 

 

Delaware    001-14505    95-2623879

(State or Other Jurisdiction

of Incorporation)

  

(Commission

File Number)

  

(IRS Employer

Identification No.)

1900 Avenue of the Stars, Suite 2600

Los Angeles, California

   90067
(Address of Principal Executive Offices)    (Zip Code)

Registrant’s telephone number, including area code: (310) 552-1834

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

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 June 15, 2016, Korn/Ferry International (the “Company”) entered into a $400 million five-year senior secured credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”) as administrative agent, and other lender parties thereto. The Credit Agreement provides for a $125 million revolving credit facility and a $275 million term loan (the “Facilities”). The Credit Agreement also provides that, under certain circumstances, the Company may increase the aggregate principal amount of term loan commitments or revolving commitments by up to $250 million. The proceeds from the Facilities will be used to repay in full the obligations outstanding under the Company’s existing credit agreement, dated as of January 18, 2013, between the Company and Wells Fargo (the “Existing Credit Agreement”), and for working capital and other general corporate purposes. The obligations under the Credit Agreement are secured by substantially all of the assets of the Company and those of its subsidiaries that are guarantors under the Credit Agreement.

Amounts outstanding under the Credit Agreement accrue interest at a rate equal to either, at the Company’s election, LIBOR plus a margin of 1.25% to 2.00% per annum, or base rate plus a margin of 0.25% to 1.00%, in each case, depending on the Company’s consolidated total leverage ratio.

The term loan requires amortization in the form of quarterly scheduled principal payments as specified in the Credit Agreement.

The covenants of the Credit Agreement include customary negative covenants that, among other things, restrict the Company’s ability to incur additional indebtedness, grant liens and make certain acquisitions, investments, asset dispositions and restricted payments. In addition, the Credit Agreement contains certain financial covenants that require the Company to maintain a funded debt to EBITDA ratio not greater than 3.00 to 1.00, and an adjusted EBIT to interest expense ratio of at least 3.25 to 1.00.

The Credit Agreement includes customary events of default, and customary rights and remedies upon the occurrence of any event of default thereunder, including rights to accelerate the loans, terminate the commitments thereunder and realize upon the collateral securing the obligations under the Credit Agreement.

A copy of the Credit Agreement is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The foregoing description is qualified in its entirety by reference to the Credit Agreement.

The financial institutions party to the Credit Agreement and their respective affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage, and other financial and non-financial activities and services. Certain of these financial institutions and their respective affiliates were party to the Existing Credit Agreement and/or have provided, and may in the future provide, a variety of these services to the Company and to persons and entities with relationships with the Company, for which they received or will receive customary fees and expenses.

 

Item 1.02 Termination of a Material Definitive Agreement.

Effective June 15, 2016, the Company terminated the Existing Credit Agreement. The Company repaid all amounts due and outstanding under the Existing Credit Agreement at such time.

 

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

The information set forth under “Item 1.01—Entry into a Material Definitive Agreement” is incorporated herein by reference.


Item 9.01. Financial Statement and Exhibits.

 

(d) Exhibits.

 

Exhibit No.

  

Description

10.1    Credit Agreement, dated June 15, 2016, by and among, Wells Fargo Bank, National Association, as administrative agent and other lender parties thereto.


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.

 

    KORN/FERRY INTERNATIONAL
              (Registrant)
Date: June 17, 2016      
   

/s/ Robert Rozek

    (Signature)
    Name:   Robert Rozek
    Title:  

Executive Vice President, Chief Financial

Officer and Chief Corporate Officer