BOX 8-K
Box Inc (BOX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
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| Item 1.01 | Entry into a Material Definitive Agreement. |
On December 19, 2024, Box, Inc., a Delaware corporation (the “Company”) entered into Amendment No. 1 to the Amended and Restated Credit Agreement dated as of June 30, 2023 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), between the Company and Wells Fargo Bank, National Association. The amendment, among other changes, (a) decreases the revolving commitments from an aggregate principal amount of up to $150 million to $75 million, and (b) amends the conditions that prevent early maturity of the revolving loan facility so that the maturity date is the earlier of (i) June 30, 2028, (ii) October 16, 2025, except to the extent that the Company’s liquidity (as determined in accordance with the Credit Agreement) is greater than or equal to the outstanding principal amount of the Company’s existing convertible senior notes due January 2026 as of such date; and (iii) February 11, 2028, but only in the event that any of the Company’s Series A Convertible Preferred Stock remains outstanding as of such date.
As of December 19, 2024, there were no revolving loans and $11 million of letters of credit outstanding under the Credit Agreement.
Additional details of the Credit Agreement were previously disclosed in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 3, 2023, and are incorporated herein by reference.
The foregoing description of the amendment does not purport to be complete and is qualified in its entirety by the terms and conditions of the amendment, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information related to the Credit Agreement set forth in Item 1.01 above is incorporated herein by reference.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On December 18, 2024 (the “Grant Date”), the Board of Directors (the “Board”) of the Company, upon the recommendation of the Compensation Committee of the Board (the “Compensation Committee”), approved the grant of awards of performance-based restricted stock units (“PSUs”) covering a total of 600,000 shares of the Company’s Class A common stock to Aaron Levie, the Company’s Chief Executive Officer. The PSUs were granted under the Company’s Amended and Restated 2015 Equity Incentive Plan (the “2015 Plan”).
As the Company enters into the new era of intelligent content management, driven by the rapid acceleration of AI, the Board believes it is crucial to provide meaningful incentives for Mr. Levie to continue leading and driving the growth of the Company’s business. The Board believes that tying the PSUs to achievement of stock price goals would further motivate Mr. Levie and align his interests with stockholder interests in driving the long-term value of the Company’s stock. In making this decision, the Compensation Committee, in consultation with its independent compensation consultant, Compensia, considered several factors. These factors included Mr. Levie’s lack of unvested ownership interests at the time of grant, attributable to his decision to decline to receive time-based or performance-based equity grants in all but one year since the Company’s initial public offering in 2015. The Compensation Committee also considered market data among chief executive officers in the Company’s compensation peer group, Mr. Levie’s past and expected future contributions to the Company, and the Board’s desire to provide meaningful incentives for Mr. Levie to continue to serve in his position and to lead the Company through its next phase of growth.
The PSUs are eligible to vest based on the Company’s stock price achievement over a performance period that ends on the fourth anniversary of the Grant Date. The total number of PSUs is divided into three equal tranches with each tranche subject to both a stock price achievement price hurdle and a minimum vesting requirement, each as shown in the table below. Achievement of a stock price hurdle is based on the average closing price of the Company’s Class A common stock over a 45 trading-day period. Once both the stock price hurdle for a tranche and the minimum vesting requirement for such tranche are achieved, the number of PSUs in that tranche will vest and the vested PSUs will be settled through the issuance of shares of Class A common stock on the Company’s next regular quarterly vesting date (March 20, June 20, September 20, and December 20).
The following table presents how many PSUs would be eligible to vest per tranche.
| Price Hurdle |
Minimum Vesting Period | PSUs Eligible to Vest | ||||||
| $40.00 |
1 year | 200,000 | ||||||
| $50.00 |
2 years | 200,000 | ||||||
| $60.00 |
3 years | 200,000 | ||||||
| Total |
600,000 | |||||||
If the average closing price of the Company’s Class A common stock fails to reach the price hurdle for a tranche during the performance period or if Mr. Levie terminates service to the Company prior to vesting in the PSUs in a tranche, the PSUs in such tranche will be forfeited. The price hurdles and number of shares of the Company’s Class A common stock underlying the PSUs will be adjusted to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications, or similar event as required by the terms of the 2015 Plan.
In the event of a change in control (as defined in the 2015 Plan) of the Company following the Grant Date but before the end of the performance period, the PSUs may be eligible to vest in additional amounts if the per share transaction price in the change in control (treating that price as if it were the 45 trading-day average closing price) is at or above the threshold price hurdle of $40.00 per share but below an additional price hurdle that has not previously been achieved, in which case an additional amount of PSUs based on an amount interpolated between the price hurdles will become eligible to vest (subject to minimum time vest requirements) immediately prior to the closing of the change in control. Any portion of the PSUs that has not become eligible to vest prior to the closing of the change in control for which a stock price hurdle has not been achieved will immediately terminate and be forfeited to the Company.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit No. |
Description | |
| 10.1 | Amendment No. 1 to Amended and Restated Credit Agreement, dated as of December 19, 2024, by and between Box, Inc. and Wells Fargo Bank, National Association. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
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.
| Dated: December 20, 2024 | BOX, INC. | |||||
| By: | /s/ David Leeb | |||||
| David Leeb | ||||||
| Chief Legal Officer and Corporate Secretary | ||||||
Exhibit 10.1
Execution Version
AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of December 19, 2024, is entered into by and between BOX, INC., a Delaware corporation (the “Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Lender”), with respect to the following:
A. The Borrower and the Lender have previously entered into that certain Amended and Restated Credit Agreement dated as of June 30, 2023 (as amended, restated or otherwise modified and in effect prior to the date hereof, the “Existing Credit Agreement” and as the same may be supplemented, amended, modified, amended and restated or replaced in writing from time to time and in effect from time to time, including, but not limited to, by this Amendment, the “Credit Agreement”).
B. The Borrower has requested certain amendments to the Existing Credit Agreement.
C. The Lender is willing to grant such request on the terms and subject to the conditions set forth in this Amendment.
NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto agree as follows:
1. Definitions. Except as otherwise defined in this Amendment, terms defined in the Credit Agreement are used herein as defined therein.
2. Amendments. On the terms and subject to the conditions of this Amendment, as of the Amendment No. 1 Effective Date:
(a) The definition of “Commitment” in Section 1.01 of the Existing Credit Agreement is hereby amended and restated in its entirety as follows:
“Commitment”: The commitment of the Lender to make Loans to the Borrower pursuant to Section 2.01(a). The amount of the Lender’s Commitment as of the Amendment No. 1 Effective Date is $75,000,000.
(b) The definition of “Liquidity Condition” in Section 1.01 of the Existing Credit Agreement is hereby amended and restated in its entirety as follows:
“Liquidity Condition”: As of the date of determination, Borrower’s Liquidity is greater than or equal to the outstanding principal amount of the Existing Convertible Notes as of such date.
(c) Section 1.01 of the Existing Credit Agreement is hereby amended so as to include the following defined term in such section in its alphabetically appropriate place:
“Amendment No. 1 Effective Date”: As defined in the Amendment No. 1 to Amended and Restated Credit Agreement, dated as of December 19, 2024, by and among the Borrower and the Lender.
3. Reaffirmation. Notwithstanding the effectiveness of this Amendment, each Security Document, each other Loan Document, and all guarantees, pledges, grants, security interests and other agreements thereunder shall continue to be in full force and effect and the Borrower hereby reaffirms each Security Document, each other Loan Document, and all guarantees, pledges, grants, security interests and other agreements thereunder. This Amendment shall not be a novation. This Amendment shall not release, limit nor impair in any way any security interests or liens (or the priority thereof) held by the Lender against any assets of any Loan Party, arising under any Security Document or any other Loan Document.
4. Representations and Warranties. The Borrower represents and warrants to the Lender as to itself and each of its Subsidiaries (if any), that (a) the representations and warranties contained in Article V of the Credit Agreement and in the other Loan Documents are true, correct and complete in all material respects (or, in the case of any such representation or warranty already qualified by materiality or reference to Material Adverse Effect, in all respects) on and as of the date hereof as though made on and as of the date hereof, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties were true, correct and complete in all material respects (or, in the case of any such representation or warranty already qualified by materiality or reference to Material Adverse Effect, in all respects) on and as of such earlier date and (b) no Event of Default or Potential Event of Default has occurred and is continuing.
5. Conditions Precedent to the Effectiveness of this Amendment. The effectiveness of the provisions of Section 2 of this Amendment is conditioned upon, and such provisions shall not be effective until, satisfaction of the conditions set forth below (the first date on which such conditions have been satisfied being referred to herein as the “Amendment No. 1 Effective Date”):
(a) The Lender shall have received the following, each in form and substance satisfactory to the Lender in its sole discretion:
(i) executed copies of this Agreement; and
(ii) an amended and restated Note.
(b) The Lender shall have received all fees and other amounts due and payable on or prior to the Amendment No. 1 Effective Date, including, to the extent invoiced at least two (2) Business Days prior to the Amendment No. 1 Effective Date, reimbursement or payment of all reasonable and documented out-of-pocket costs and expenses required to be reimbursed or paid by the Borrower under any Loan Document.
6. Miscellaneous.
(a) The Borrower acknowledges that all reasonable and documented out-of-pocket costs and expenses of the Lender (including reasonable and documented out-of- pocket attorneys’ fees and costs) in connection with the preparation, negotiation, execution and delivery of this Amendment and the related Loan Documents will be paid by the Borrower in accordance with Section 8.05 of the Credit Agreement.
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(b) References in the Credit Agreement (including references to the Credit Agreement as amended hereby) to “this Agreement” (and indirect references such as “hereunder”, “hereby”, “herein” and “hereof”) shall be deemed to be references to the Credit Agreement as amended hereby.
(c) This Amendment shall constitute a Loan Document for purposes of the Credit Agreement and the other Loan Documents, and except as specifically modified by this Amendment, the Credit Agreement and the other Loan Documents shall remain unchanged and unwaived and shall remain in full force and effect and are hereby ratified and confirmed.
(d) The execution, delivery and performance of this Amendment shall not constitute a forbearance, waiver, consent or amendment of any other provision of, or operate as a forbearance or waiver of any right, power or remedy of the Lender under the Credit Agreement or any of the other Loan Documents, all of which are ratified and reaffirmed in all respects and shall continue in full force and effect.
(e) This Amendment shall be governed by, and construed in accordance with, the laws of the State of California without giving effect to its choice of law principles which would result in the application of the law of another jurisdiction.
(f) This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Amendment by facsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Amendment. This Amendment may be executed in any number of identical counterparts, any set of which signed by all the parties hereto shall be deemed to constitute a complete, executed original for all purposes. Transmission by facsimile, “pdf” or similar electronic copy of an executed counterpart of this Amendment shall be deemed to constitute due and sufficient delivery of such counterpart. Any party hereto may request an original counterpart of any party delivering such electronic counterpart. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Amendment or any document to be signed in connection with this Amendment and the transactions contemplated hereby shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other state laws based on the Uniform Electronic Transactions Act, and the parties to this Amendment consent to conduct the transactions contemplated hereunder by electronic means.
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(g) This Amendment, the Credit Agreement and the other Loan Documents embody the entire agreement and understanding by and among the parties hereto and thereto relating to the subject matter hereof and thereof and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof and thereof.
(h) In case any one or more of the provisions contained in this Amendment should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. Section headings in this Amendment are included for convenience of reference only and shall not be given any substantive effect.
(i) This Amendment is a Loan Document as defined in the Credit Agreement, and the expense reimbursement, indemnification, waiver of jury trial, consent to jurisdiction and other provisions of the Credit Agreement generally applicable to Loan Documents are applicable hereto and incorporated herein by this reference and this Amendment shall be interpreted, construed and enforced as if all such provisions were set forth in full in this Amendment.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first above written.
| BOX, INC. | ||
| By: | /s/ Dylan Smith | |
| Name: | Dylan Smith | |
| Title: | CFO | |
[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]
| WELLS FARGO BANK, NATIONAL ASSOCIATION | ||
| By: | /s/ Wendy Wong | |
| Name: | Wendy Wong | |
| Title: | Director, Relationship Management | |
[Signature Page to Amendment No. 1 to Amended and Restated Credit Agreement]