8-K

 

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): May 25, 2010

CKE Restaurants, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

Delaware	1-11313	33-0602639
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
6307 Carpinteria Ave., Ste. A, Carpinteria, California		93013
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: (805) 745-7500

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:

[  ]  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 May 25, 2010, CKE Restaurants, Inc., a Delaware corporation (the "Company") entered into an amendment to the Company’s existing senior credit facility to exclude, from the calculation of consolidated EBITDA for purposes of determining the Company’s compliance with the leverage ratio that the Company shall not permit to be exceeded, for periods prior to the last day of the second fiscal quarter of fiscal year 2011, an amount, not to exceed $21,000,000 in the aggregate, equal to (i) fees and costs, including termination fees, incurred in connection with the previously proposed acquisition of the Company by affiliates of Thomas H. Lee Partners, L.P., and (ii) fees and costs incurred in connection with the currently proposed acquisition of the Company by affiliates of Apollo Management VII, L.P. For purposes of the credit facility, "leverage ratio" means the ratio of (a) consolidated total debt of the Company and its subsidiaries to (b) the consolidated EBITDA of the Company and its subsidiarie s for the four consecutive fiscal quarters most recently ended on or prior to such date.

The foregoing description of the amendment does not purport to be complete and is qualified in its entirety by the full text of the amendment, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

Item 2.02 Results of Operations and Financial Condition.

On May 26, 2010, the Company issued a press release announcing the Company's same-store sales for the four weeks and fiscal quarter ended May 17, 2010, and approximate consolidated revenues from company-operated restaurants for the four weeks and fiscal quarter ended May 17, 2010, and providing comments on cost trends for its company-operated restaurants and interest expense for the fiscal quarter ended May 17, 2010. The press release is attached as Exhibit 99.1 hereto.

In accordance with General Instruction B.2 of Form 8-K, the information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed "filed" for the purposes of Section 18 of the Securities and Exchange Act of 1934 or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

10.1 Fourth Amendment to Seventh Amended and Restated Credit Agreement, dated as of May 25, 2010, by and among CKE Restaurants, Inc., BNP Paribas, a bank organized under the laws of France acting through its Chicago branch, as Administrative Agent, and the subsidiaries of CKE Restaurants, Inc.

99.1 Press release, dated May 26, 2010, issued by CKE Restaurants, Inc.

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.

	CKE Restaurants, Inc.
June 1, 2010	By:	/s/ Theodore Abajian
		Name: Theodore Abajian
		Title: Executive Vice President and Chief Financial Officer

Exhibit Index

Exhibit No.	Description
10.1	Fourth Amendment to Seventh Amended and Restated Credit Agreement, dated as of May 25, 2010, by and among CKE Restaurants, Inc., BNP Paribas, a bank organized under the laws of France acting through its Chicago branch, as Administrative Agent, and the subsidiaries of CKE Restaurants, Inc.
99.1	Press release, dated May 26, 2010, issued by CKE Restaurants, Inc.

EX-10.1

CKE RESTAURANTS, INC.
FOURTH AMENDMENT TO
SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT

This FOURTH AMENDMENT TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is dated as of May 25, 2010 and entered into by and among CKE RESTAURANTS, INC. (“Borrower”), and BNP PARIBAS, as administrative agent for the Lenders (in such capacity, “Administrative Agent”), and solely for purposes of Section 3 hereof, the undersigned Subsidiaries of the Borrower (the “Subsidiary Guarantors”). Reference is made to the Seventh Amended and Restated Credit Agreement dated as of March 27, 2007, as amended by the First Amendment dated as of May 3, 2007, the Second Amendment dated as of August 27, 2007 and the Third Amendment dated as of March 7, 2008 (as so amended, the “Credit Agreement”), among Borrower, the Lenders party thereto and Administrative Agent. Capitalized terms used herein without definition shall have the same meanings as set forth in the Credit Agreement.

RECITALS

WHEREAS, Borrower and Requisite Lenders desire to amend the Credit Agreement to make certain modifications set forth below.

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto hereby agree as follows:

SECTION 1. AMENDMENTS TO CREDIT AGREEMENT

Section 1.1 of the Credit Agreement is hereby amended by inserting the following in the definition of “Consolidated EBITDA”, immediately before the period at the end thereof

“plus (viii), only for purposes of determining compliance with Section 7.1(a) for periods prior to the last day of the second fiscal quarter of the fiscal year 2011, to the extent deducted in the calculation of Consolidated Net Income for such period and not exceeding $21,000,000 in the aggregate, (A) termination fees and other costs incurred in connection with the termination of the proposed acquisition of the Borrower by affiliates of Thomas H. Lee Partners, L.P., (B) fees and costs incurred in connection with the proposed acquisition of the Borrower by affiliates of Thomas H. Lee Partners, L.P. and (C) fees and costs incurred in connection with the proposed acquisition of Borrower by affiliates of Apollo Management VII, L.P.”

The foregoing amendment will be given retroactive effect and, to the extent any Event of Default exists as of the Fourth Amendment Effective Date which would no longer exist after giving effect to such amendment, such Event of Default is hereby retroactively waived.

SECTION 2. REPRESENTATIONS AND WARRANTIES

In order to induce Lenders to consent to, and Administrative Agent to enter into, this Amendment, Borrower represents and warrants to each Lender and Administrative Agent that the following statements are true, correct and complete as of the Fourth amendment Effective Date (as defined below):

A. Corporate Power and Authority. Each of Borrower and each Subsidiary Guarantor has all requisite corporate power and authority to enter into this Amendment and to carry out the transactions contemplated by, and perform its obligations under, the Credit Agreement as amended by this Amendment (the “Amended Agreement”).

B. Due Authorization. The execution and delivery of this Amendment and the performance of the Amended Agreement have been duly authorized by all necessary corporate action on the part of Borrower and each Subsidiary Guarantor.

C. No Conflict. The execution and delivery by Borrower and each Subsidiary Guarantor of this Amendment and the performance by Borrower of the Amended Agreement do not and will not (i) violate any provision of any law or any governmental rule or regulation applicable to Borrower or Subsidiary Guarantors, the by-laws, partnership agreement, limited liability company agreement or other similar organizational document, as applicable, of Borrower or Subsidiary Guarantors or any order, judgment or decree of any court or other agency of government binding on Borrower or Subsidiary Guarantors, (ii) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any material indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which Borrower or any Subsidiary Guarantor is a party, (iii) result in or require the creation or imposition of any Lien upon any of the properties or assets of Borrower or Subsidiary Guarantors (other than Liens created under any of the Loan Documents in favor of Administrative Agent on behalf of Lenders and other Liens permitted under the Amended Agreement), or (iv) require any approval of stockholders or any approval or consent of any Person under any material indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which Borrower or any Subsidiary Guarantor is a party which has not been obtained, except for with respect to the foregoing clauses (i) , (ii) and (iv) above, such violations, conflicts, breaches, defaults or failures to obtain approvals or consents which could not reasonably be expected to have a Material Adverse Effect.

D. Governmental Consents. The execution and delivery by each of Borrower and each Subsidiary Guarantor of this Amendment and the performance by Borrower of the Amended Agreement do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any governmental authority.

E. Binding Obligation. This Amendment and the Amended Agreement have been duly executed and delivered by each of Borrower and each Subsidiary Guarantor and are the legally valid and binding obligations of each of Borrower and each Subsidiary Guarantor, enforceable against Borrower and each Subsidiary Guarantor in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

F. Absence of Default. No event has occurred and is continuing that, after giving effect to this Amendment, would constitute a Default or an Event of Default.

SECTION 3. CONDITIONS TO EFFECTIVENESS

This Amendment shall become effective and binding upon the parties hereto only upon the satisfaction of the following conditions precedent (the date such conditions are satisfied is hereafter referred to as the “Fourth amendment Effective Date”):

A. Amendment. Administrative Agent shall have executed this Amendment and received a counterpart of this Amendment that bears the signature of Borrower, and Administrative Agent shall have received consents to this Amendment and Administrative Agent’s execution of this Amendment from Required Lenders

B. Completion of Proceedings. All corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incidental thereto shall be reasonably satisfactory in form and substance to Administrative Agent and such counsel, and Administrative Agent and such counsel shall have received all such counterpart originals or certified copies of such documents as Administrative Agent may reasonably request.

SECTION 4. MISCELLANEOUS

A. Reference to and Effect on the Credit Agreement and the Other Loan Documents.

(i) On and after the effective date of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import referring to the Credit Agreement and each reference in the other Loan Documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement as amended hereby.

(ii) Except as specifically amended by this Amendment, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed.

(iii) The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of Administrative Agent or any Lender under the Credit Agreement or any of the other Loan Documents.

B. Fees and Expenses Borrower acknowledges that all reasonable costs, fees and expenses as described in subsection 10.1 of the Credit Agreement incurred by Administrative Agent and its counsel with respect to this Amendment and the documents and transactions contemplated hereby shall be for the account of the Borrower.

C. Headings. Section and subsection headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose or be given any substantive effect.

D. Applicable Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS, WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW TO THE EXTENT SUCH PRINCIPLES WOULD REQUIRE THE APPLICATION FO THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF ILLINOIS.

E. Counterparts; Effectiveness. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document.

[Remainder of this page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the date first above written.

BORROWER:

CKE RESTAURANTS, INC.

By: /s/ Theodore Abajian
Name: Theodore Abajian
Title: Executive Vice President and Chief Financial Officer







ADMINISTRATIVE AGENT:

BNP PARIBAS, in its own capacity and on behalf of Required Lenders

By: /s/ Brian L. Bains
Name: Brian L. Bains
Title: Vice President

By: /s/ Paul J. Carona
Name: Paul J. Carona
Title: Director

Contact: Investor Relations
CKE Restaurants, Inc.
805-745-7750

CKE RESTAURANTS^®, INC. REPORTS PERIOD FOUR SAME-STORE SALES

CARPINTERIA, Calif. – May 26, 2010 – CKE Restaurants, Inc. (NYSE: CKR) announced today period four company-operated same-store sales for the period ended May 17, 2010, for Carl’s Jr.^® and Hardee’s^®.

Brand	Period 4		First Quarter
	FY 2011	FY 2010	FY 2011	FY 2010
Carl’s Jr.	-5.2%	-6.2%	-6.1%	-5.1%
Hardee’s	0.6%	0.0%	-1.2%	+2.5%
Blended	-2.6%	-3.5%	-3.9%	-1.8%

“Both Carl’s Jr. and Hardee’s same-store sales improved from the third period and from the comparable period of the prior year” said Andrew F. Puzder, Chief Executive Officer. “While Carl’s Jr. continued to be negatively impacted by the poor economic conditions and high unemployment rates in our core California market, for Hardee’s, period 4 marks the third consecutive period of positive same-store sales results. Regardless of when the overall economy turns around, we remain steadfastly focused on protecting our brand image for the long run while trying to grow same-store sales in the short run. Given the state of the economy, I’m proud of our profitability and we will continue to focus on the excellent value-for-the money of our premium products and new initiatives to improve same-store sales and increase market share.

“One example of the adoption of these initiatives at our Carl’s Jr. locations is the introduction of the Teriyaki Chicken Sandwich, which includes a charbroiled chicken breast, sweet-and-savory teriyaki glaze, charbroiled Dole^® pineapple, Swiss cheese, lettuce, red onion, tomato and mayonnaise, all on a honey-wheat bun.”

Period Four Revenue Trends
For period four, consolidated revenue from company-operated restaurants (exclusive of all franchise-related revenue and royalties) was approximately as follows:

Brand	Period 4				First Quarter
($ in millions)	FY 2011		FY 2010		FY 2011		FY 2010
Carl’s Jr.	$	44.9	$	46.8	$	182.3	$	192.1
Hardee’s	$	38.1	$	38.1	$	148.6	$	151.0
Total	$	83.0	$	84.9	$	330.9	$	343.1

For period four, trailing-13 period average unit volume from company-operated restaurants was as follows:

Brand	Period 4
($ in thousands)	FY 2011		FY 2010
Carl’s Jr.	$	1,412	$	1,507
Hardee’s	$	1,001	$	1,010
Blended	$	1,194	$	1,238

As has been the practice, the Company is providing general insight on selected items for the first quarter of fiscal 2011. However, investors should be aware that the Company has yet to complete its review of the cost components for the full quarter, and that there may be other material trends or items which could adversely or positively impact operating expenses or the Company’s business in general.

“On a consolidated basis, fiscal 2011 first quarter restaurant level margin as a percentage of company-operated restaurants revenue is anticipated to decrease to 16.3 percent to 16.6 percent as compared to the first quarter of fiscal 2010, when consolidated restaurant level margin was 19.9 percent,” said Ted Abajian, Executive Vice President and Chief Financial Officer.

“We anticipate food and packaging costs as a percentage of company-operated restaurants revenue to be 100 to 110 basis points higher than our results for the first quarter of fiscal 2010. In the prior year first quarter, food and packaging costs on a consolidated basis were 28.7 percent of company-operated restaurants revenue.

“We expect labor and employee benefit costs as a percentage of company-operated restaurants revenue to be 125 to 135 basis points higher than our results for the first quarter of fiscal 2010. In the prior year first quarter, labor and employee benefit costs on a consolidated basis, were 28.4 percent of company-operated restaurants revenue.

“We anticipate consolidated occupancy and other costs as a percentage of company-operated restaurants revenue for the first quarter will be approximately 105 to 115 basis points higher than the results reported in the first quarter of fiscal 2010 primarily due to an increase in depreciation expense of approximately 70 basis points related to our ongoing remodel program and the deleveraging impact of our blended same-store sales decline during the first quarter of fiscal 2011. In the prior year first quarter, occupancy and other costs on a consolidated basis, were 23.0 percent of company-operated restaurants revenue.

“The Company expects interest expense for the first quarter to be approximately $5.0 million. This figure includes interest paid on the Company’s term loan and revolving credit facility, as well as an estimated $1.4 million unfavorable adjustment to mark-to-market the Company’s interest rate swap agreements.”

Safe Harbor Disclosure
Matters discussed in this press release contain forward-looking statements relating to the Company’s strategic initiatives to protect its brand image, grow same-store sales, and increase market share, which are based on management’s current beliefs and assumptions. Such statements are subject to risks and uncertainties that are often difficult to predict and beyond the Company’s control. Factors that could cause the Company’s results to differ materially from those described include, but are not limited to, the Company’s ability to compete with other restaurants, delicatessens, supermarkets and convenience stores for customers, employees, restaurant locations and franchisees; the effect of restrictive covenants in the Company’s credit facility on the Company’s business; changes in consumer preferences, perceptions and spending patterns; the ability of the Company’s key suppliers to continue to deliver quality products to the Company at moderate prices; the Company’s ability to successfully enter new markets and complete remodels of existing restaurants; changes in economic conditions which may affect the Company’s business and stock price; the Company’s ability to attract and retain key personnel; the Company’s franchisees’ willingness to participate in the Company’s strategy; the operational and financial success of the Company’s franchisees; changes in the price or availability of commodities; the effect of the media’s reports regarding food-borne illnesses, food tampering and other health-related issues on the Company’s reputation and its ability to obtain products; the seasonality of the Company’s operations; the Company’s ability to hire and retain qualified personnel and the effect of higher labor costs; increased insurance and/or self-insurance costs; the Company’s ability to comply with existing and future health, employment, environmental and other government regulations; the completion and timing of the proposed merger; and other factors as discussed in the Company’s filings with the Securities and Exchange Commission.

Forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law or the rules of the New York Stock Exchange.

CKE Restaurants, Inc.
Headquartered in Carpinteria, Calif., CKE Restaurants, Inc. is publicly traded on the New York Stock Exchange under the symbol “CKR.” As of the end of its fiscal 2010, CKE Restaurants, Inc., through its subsidiaries, had a total of 3,141 franchised, licensed or company-operated restaurants in 42 states and in 16 countries, including 1,224 Carl’s Jr. restaurants and 1,905 Hardee’s restaurants. For more information about CKE Restaurants, please visit www.ckr.com.

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