SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): November 7, 2022
The Hackett Group, Inc.
(Exact name of registrant as specified in its charter)
(Address of principal executive offices)
(Registrants telephone number, including area code)
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):
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, par value $.001 per share
NASDAQ Stock Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of
1933 (17 CFR § 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR § 240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Entry into a Material Definitive Agreement.
On November 7, 2022, The Hackett Group, Inc. (the Company) entered into a third amended and restated credit agreement (the
Credit Agreement) with Bank of America, N.A., as administrative agent, and the lenders party thereto, pursuant to which the lenders agreed to amend and restate the Second Amended and Restated Credit Agreement, dated May 9, 2016,
with Bank of America, N.A., as lender, in order to extend the maturity date of the revolving credit facility and provide the Company with an additional $55 million in borrowing capacity, for an aggregate amount of up to
$100 million from time to time pursuant to a revolving line of credit (the Credit Facility). As of November 7, 2022, there were no outstanding balances under the Credit Facility. The Credit Facility matures on
November 7, 2027.
The obligations of the Company under the Credit Agreement are guaranteed by existing and future material domestic
subsidiaries of the Company (the Guarantors) and are secured by substantially all of the existing and future property and assets of the Company and the Guarantors.
The interest rates per annum applicable to loans under the Credit Facility will be, at the Companys option, equal to either a base rate
or a Bloomberg Short-Term Bank Yield Index (BSBY) rate, in each case, plus an applicable margin percentage. The applicable margin percentage is determined from time to time under the Credit Agreement based on a consolidated leverage
ratio, and ranges from 1.50% to 2.25% per annum in the case of BSBY rate advances, and 0.75% to 1.50% per annum in the case of base rate advances. The initial applicable margin percentage is 1.75% per annum in the case of BSBY rate advances, and
1.00% per annum in the case of base rate advances. A commitment fee is also payable on unused commitments of the Credit Facility, and varies between 0.125% and 0.50% per annum depending on a consolidated leverage ratio, with the initial level being
0.250% per annum.
The Credit Agreement contains customary representations, warranties, indemnities and affirmative and negative
covenants. The negative covenants include, among others, certain limitations on the ability to: incur liens and indebtedness; consummate mergers, consolidations or asset sales; make guarantees and investments; and pay dividends or distributions in
respect of the Companys shares. In addition, the Credit Agreement contains financial covenants that require the Company to maintain, on a consolidated basis (i) a consolidated fixed charge coverage ratio of at least 1.50 to 1.00, and
(ii) a consolidated leverage ratio of not more than 3.50 to 1.00, in each case as calculated in accordance with the Credit Agreement.
The Credit Agreement also includes customary events of default, including, among others, the failure to make payments under the Credit
Facility when due, bankruptcy, certain judgments, breaches of representations and warranties, breaches of covenants and the occurrence of certain events, including cross default to other indebtedness of the Company and its subsidiaries.
The preceding description of the Credit Agreement is a summary and is qualified in its entirety by the Credit Agreement, a copy of which is
filed as Exhibit 10.1 hereto and is incorporated by reference herein.
Results of Operations and Financial Condition.
On November 8, 2022, the Company issued a press release setting forth its consolidated financial results for the third fiscal quarter
ended September 30, 2022. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein.
contained in Item 2.02 of this current report on Form
as well as Exhibit 99.1, is being furnished to the Securities and Exchange Commission (the SEC) and shall not be deemed filed
with the SEC nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended.
Creation of a Direct Financial Obligation or an Obligation under an
of a Registrant.
The disclosure contained in Item 1.01 is incorporated herein by reference.
press release referred to above also announced that the Companys Board of Directors approved an additional $120 million to its share repurchase plan authorization and the Company plans to launch a modified Dutch auction tender
offer on November 9, 2022 to purchase up to $120 million in value of its common stock, at a price ranging from $20.50 to $23.50.
Information Regarding the Tender Offer
The tender offer described above has not yet commenced, and there can be no assurances that the
Company will commence the tender offer on the terms described or at all. On the commencement date of the tender offer, the Company will file a tender offer statement on Schedule TO, including an offer to purchase, letter of transmittal and other
tender offer materials, with the SEC. The tender offer will only be made pursuant to the offer to purchase, the related letter of transmittal and the other tender offer materials filed as part of the Schedule TO. When available, shareholders should
read carefully the offer to purchase, the related letter of transmittal and other tender offer materials because they will contain important information, including the terms and conditions of the tender offer. Once the tender offer commences,
shareholders will be able to obtain a free copy of the tender offer statement on Schedule TO, the offer to purchase, letter of transmittal and other documents that the Company will be filing with the SEC at the SECs website at www.sec.gov or
from the Companys information agent for the tender offer.
Financial Statements and Exhibits.
Third Amended and Restated Credit Agreement, dated November 7, 2022, among The Hackett Group, Inc., the material domestic subsidiaries of The Hackett Group, Inc. named on the signature pages thereto and Bank of America, N.A.,
as administrative agent, and the lenders party thereto
Press Release of The Hackett Group, Inc., dated November 8, 2022
Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document)
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.
THE HACKETT GROUP, INC.
Date: November 8, 2022
Robert A. Ramirez
Executive Vice President, Finance and Chief Financial Officer
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of November 7, 2022
THE HACKETT GROUP,
as the Borrower,
THE SUBSIDIARIES OF THE BORROWER PARTY HERETO,
as the Guarantors,
as Administrative Agent, Swingline Lender and an L/C Issuer,
THE OTHER L/C ISSUERS PARTY HERETO,
THE LENDERS PARTY
BOFA SECURITIES, INC.,
as Sole Lead Arranger and Sole Bookrunner
TABLE OF CONTENTS
DEFINITIONS AND ACCOUNTING TERMS
Other Interpretive Provisions
Times of Day
Letter of Credit Amounts
REVOLVING COMMITMENTS AND CREDIT EXTENSIONS
Borrowings, Conversions and Continuations of Loans
Letters of Credit
Termination or Reduction of Revolving Commitments
Repayment of Loans
Interest and Default Rate
Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate
Evidence of Debt
Payments Generally; Administrative Agents Clawback
Sharing of Payments by Lenders
Extension of Maturity Date
Increase in Revolving Facility
TAXES, YIELD PROTECTION AND ILLEGALITY
Inability to Determine Rates
Compensation for Losses
Mitigation Obligations; Replacement of Lenders
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
Conditions of Restatement
Conditions to all Credit Extensions
REPRESENTATIONS AND WARRANTIES
Existence, Qualification and Power
Authorization; No Contravention
Governmental Authorization; Other Consents
TABLE OF CONTENTS
Financial Statements; No Material Adverse Effect
Ownership of Property
Margin Regulations; Investment Company Act
Compliance with Laws
Subsidiaries; Equity Interests; Loan Parties
Intellectual Property; Licenses, Etc.
Sanctions Concerns and Anti-Corruption Laws
Certificates; Other Information
Payment of Obligations
Preservation of Existence, Etc.
Maintenance of Properties
Maintenance of Insurance
Compliance with Laws
Books and Records
Use of Proceeds
Covenant to Guarantee Obligations
Covenant to Give Security
Deposit Accounts and Controlled Accounts
Anti-Corruption Laws; Sanctions
Change in Nature of Business
Transactions with Affiliates
Use of Proceeds
TABLE OF CONTENTS
Amendments of Organization Documents; Fiscal Year; Legal Name, State of Formation and Form of Entity
Account Control Agreements; Additional Bank Accounts
Sale and Leaseback Transactions
EVENTS OF DEFAULT AND REMEDIES
Events of Default
Remedies upon Event of Default
Application of Funds
Appointment and Authority
Rights as a Lender
Reliance by Administrative Agent
Delegation of Duties
Resignation of Administrative Agent
on Administrative Agent, the Arranger and the Other Lenders
No Other Duties, Etc.
Administrative Agent May File Proofs of Claim; Credit Bidding
Collateral and Guaranty Matters
Secured Cash Management Agreements and Secured Hedge Agreements
Certain ERISA Matters
Recovery of Erroneous Payments
Rights of Lenders
Stay of Acceleration
Condition of Borrower
Appointment of Borrower
Right of Contribution
Notices; Effectiveness; Electronic Communications
No Waiver; Cumulative Remedies; Enforcement
Expenses; Indemnity; Damage Waiver
Payments Set Aside
TABLE OF CONTENTS
Successors and Assigns
Treatment of Certain Information; Confidentiality
Right of Setoff
Interest Rate Limitation
Survival of Representations and Warranties
Replacement of Lenders
Governing Law; Jurisdiction; Etc.
Waiver of Jury Trial
No Advisory or Fiduciary Responsibility
Electronic Execution; Electronic Records; Counterparts
USA Patriot Act Notice
Acknowledgement and Consent to
of Affected Financial Institutions
Amendment and Restatement
Release of Certain Guarantors
Acknowledgement Regarding Any Supported QFCs
BORROWER PREPARED SCHEDULES
Subsidiaries, Joint Ventures, Partnerships and Other Equity Investments
ADMINISTRATIVE AGENT PREPARED SCHEDULES
Certain Addresses for Notices
Initial Revolving Commitments and Applicable Percentages
Existing Letters of Credit
Letter of Credit Commitments
Form of Administrative Questionnaire
Form of Assignment and Assumption
Form of Compliance Certificate
Form of Joinder Agreement
Form of Loan Notice
Form of Permitted Acquisition Certificate
Form of Revolving Note
Form of Secured Party Designation Notice
Form of Solvency Certificate
Form of Swingline Loan Notice
Form of Officers Certificate
Forms of U.S. Tax Compliance Certificates
Form of Authorization to Share Insurance Information
Form of Notice of Loan Prepayment
THIRD AMENDED AND RESTATED
THIRD AMENDED AND RESTATED
) is entered into as of November 7, 2022, among
THE HACKETT GROUP, INC.
, a Florida corporation (the
the Guarantors (defined herein), the Lenders (defined herein),
BANK OF AMERICA, N.A.
, as Administrative Agent, a Lender, Swingline Lender and an L/C Issuer, and the other L/C Issuers from time to time party hereto, and amends and restates
that certain Second Amended and Restated Credit Agreement among the Borrower and Bank of America dated May 9, 2016 (as amended, the
Existing Credit Agreement
, under the Existing Credit Agreement, Bank of America has made available to the Borrower a revolving credit facility with a
letter of credit
, the Borrower has requested that the Existing
Credit Agreement be amended and restated to extend the maturity date of the revolving credit facility and make certain other changes as set forth herein, and the Lenders, the Swingline Lender and each L/C Issuer has agreed to make such amendments to
the Existing Credit Agreement and make such loans and other financial accommodations to the Borrower on the terms and subject to the conditions set forth herein.
, the Lenders, the Swingline Lender and each L/C Issuer have agreed to make such loans and other financial accommodations to the
Loan Parties on the terms and subject to the conditions set forth herein.
, in consideration of the mutual covenants
and agreements herein contained, the parties hereto covenant and agree as follows:
DEFINITIONS AND ACCOUNTING TERMS
As used in this Agreement, the following terms shall have the meanings set forth below:
means the acquisition, whether through a single transaction or a series of related transactions, of
(a) a controlling equity interest or other controlling ownership interest in another Person (including the purchase of an option, warrant or convertible or similar type security to acquire such a controlling interest at the time it becomes
exercisable by the holder thereof), whether by purchase of such equity or other ownership interest or upon the exercise of an option or warrant for, or conversion of securities into, such equity or other ownership interest, or (b) assets of
another Person which constitute all or substantially all of the assets of such Person or of a division, line of business or other business unit of such Person.
has the meaning set forth in
Additional Secured Obligations
means (a) all obligations arising under Secured Cash Management Agreements and
Secured Hedge Agreements and (b) all costs and expenses incurred in connection with enforcement and collection of the foregoing, including the fees, charges and disbursements
of counsel, in each case whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including
interest, expenses and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such
interest, expenses and fees are allowed claims in such proceeding;
that Additional Secured Obligations of a Guarantor shall exclude any Excluded Swap Obligations with respect to such Guarantor.
means Bank of America in its capacity as administrative agent under any of the Loan Documents,
or any successor administrative agent.
means the Administrative Agents address and, as appropriate, account as set forth on
), or such other address or account as the Administrative Agent may from time to time notify the Borrower
and the Lenders.
means an Administrative Questionnaire in substantially the form
or any other form approved by the Administrative Agent.
means (a) any EEA Financial Institution or (b) any UK Financial Institution.
means, with respect to a specified Person, another Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
means the Revolving Commitments of all the Lenders.
means this Third
Amended and Restated Credit Agreement, including all schedules, exhibits and annexes hereto.
means each of Euros and Sterling, to the extent such currencies are readily available and free transferable and convertible into Dollars.
means, as to any Person, all applicable Laws binding upon such Person or to which such a Person is
means, at any time, (a) with respect to the Revolving
Facility, a Lender that has a Revolving Commitment with respect to the Revolving Facility or holds a Revolving Loan under the Revolving Facility at such time, (b) with respect to the Letter of Credit Sublimit, (i) the L/C Issuer
and (ii) if any Letters of Credit have been issued pursuant to
, the Lenders and (c) with respect to the Swingline Sublimit, (i) the Swingline Lender and (ii) if any Swingline Loans are
outstanding pursuant to
), the Lenders.
respect of the Revolving Facility, with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of the Revolving Facility represented by such Lenders Revolving Commitment at such time, subject to adjustment
as provided in
. If the Revolving Commitment of all of the Lenders to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to
, or if the Revolving Commitments have expired, then the Applicable Percentage of each Lender in respect of the Revolving Facility shall be determined based on the Applicable Percentage of such Lender most
recently in effect, giving effect to any subsequent assignments and to any Lenders status as a Defaulting Lender at the time
of determination. The Applicable Percentage of each Lender in respect of the Revolving Facility is set forth opposite the name of such Lender on
) or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.
means, for any
day, the rate per annum set forth below opposite the applicable Level then in effect (based on the Consolidated Leverage Ratio), it being understood that the Applicable Rate for (a) Revolving Loans that are Base Rate Loans shall be the
percentage set forth under the column Base Rate, (b) Revolving Loans that are BSBY Rate Loans shall be the percentage set forth under the column BSBY Rate & Letter of Credit Fee, (c) the Letter of Credit
Fee shall be the percentage set forth under the column BSBY Rate & Letter of Credit Fee, and (d) the Commitment Fee shall be the percentage set forth under the column Commitment Fee:
BSBY Rate & Letter
of Credit Fee
1.00:1.00 but < 1.75:1.00
1.75:1 but < 2.50:1.00
Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Leverage Ratio
shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to
, that if a Compliance Certificate is not
delivered when due in accordance with
), then, upon the request of the Required Lenders, Pricing Level 4 shall apply, in each case as of the first Business Day after the date on which such Compliance
Certificate was required to have been delivered and in each case shall remain in effect until the first Business Day following the date on which such Compliance Certificate is delivered.
Notwithstanding anything to the contrary contained in this definition except as provided in clause (ii), (i) the determination of the
Applicable Rate for any period shall be subject to the provisions of
) and (ii) subject to the preceding paragraph, the initial Applicable Rate on and after the Restatement Date shall be set at
Pricing Level 2 until the first Business Day immediately following the date a Compliance Certificate for the fiscal quarter ended December 31, 2022 is delivered pursuant to
) to the Administrative
The Applicable Rate set forth above shall be increased as, and to the extent, required by
means any Fund that is administered or managed by
(a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
means BofA Securities, Inc., in its capacity as sole lead arranger and sole bookrunner.
Assignment and Assumption
means an assignment and assumption entered into by a Lender and an Eligible Assignee (with
the consent of any party whose consent is required by
)), and accepted by the Administrative Agent, in substantially the form of
or any other form (including an electronic
documentation form generated by use of an electronic platform) approved by the Administrative Agent.
means, on any date, (a) in respect
of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic Lease Obligation, the capitalized
amount of the remaining lease or similar payments under the relevant lease or other applicable agreement or instrument that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease or other
agreement or instrument were accounted for as a Capitalized Lease, (c) all Synthetic Debt of such Person, (d) in respect of any Securitization Transaction, the outstanding principal amount of such financing, after taking into account
reserve accounts and making appropriate adjustments, determined by the Administrative Agent in its reasonable judgment and (e) in respect of any Sale and Leaseback Transaction, the present value (discounted in accordance with GAAP at the debt
rate implied in the applicable lease) of the obligations of the lessee for rental payments during the term of such lease.
Audited Financial Statements
means the audited Consolidated balance sheet of the Borrower and its Subsidiaries for
the fiscal year ended December 31, 2021, and the related Consolidated statements of income or operations, Shareholders Equity and cash flows for such fiscal year of the Borrower
and its Subsidiaries, including the notes thereto.
Authorization to Share Insurance Information
means the authorization substantially in the form of
(or such other form as required by each of the Loan Partys insurance companies).
means the period from and including the Restatement Date to the earliest of (i) the Maturity Date, (ii) the date of termination of the Revolving Commitment pursuant to
(iii) the date of termination of the Revolving Commitment of the Lender to make Loans and of the obligation to make L/C Credit Extensions pursuant to
means, at any date of determination, the sum of (i) the aggregate principal amount of
Revolving Loans available to be borrowed under
(ii) unencumbered cash, Cash Equivalents and other readily marketable securities of the Loan Parties reasonably acceptable to the Administrative
Agent, in each case subject to no Liens or restrictions, other than Permitted Liens of the type described in
means the exercise of any Write-Down and Conversion Powers by the applicable
Resolution Authority in respect of any liability of an Affected Financial Institution.
means, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, rule, regulation or
requirement for such EEA Member Country from time to time which is described in the EU
Legislation Schedule, and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act
2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than
through liquidation, administration or other insolvency proceedings).
Bank of America
means Bank of America,
N.A. and its successors.
means for any day a fluctuating rate of interest per annum equal to the
highest of (a) the Federal Funds Rate
0.50%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its prime rate, and (c) the BSBY Rate
0.75%, subject to
the interest rate floors set forth therein;
that if the Base Rate shall be less than 0.00%, such rate shall be deemed to be 0.00% for purposes of this Agreement. The prime
rate is a rate set by Bank of America based upon various factors including Bank of Americas costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate. Any change in such prime rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change. If the Base Rate is being used as
an alternate rate of interest pursuant to
hereof, then the Base Rate shall be the greater of
) and (
) above and shall be determined without reference to
Base Rate Loan
means a Loan that bears interest based on the Base Rate.
Beneficial Ownership Certification
means a certification regarding beneficial ownership required by the Beneficial
Beneficial Ownership Regulation
means 31 C.F.R. § 1010.230.
means any of (a) an employee benefit plan (as defined in ERISA) that is subject to
Title I of ERISA, (b) a plan as defined in and subject to Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or
Section 4975 of the Code) the assets of any such employee benefit plan or plan.
of a party means an affiliate (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
means Bloomberg Index Services Limited.
means the board of directors or equivalent governing
The above information was disclosed in a filing to the SEC. To see the filing, click here.
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