E. Debt

In 1996, the company established a five-year, $300,000,000 revolving credit facility to provide for direct borrowings and also support the issuance of short-term promissory notes. Under the terms of the credit agreement, interest on borrowings is at floating rates (average outstanding rate of 5.8 percent at December 28, 1997), and the company is required to pay a facility fee of .07 percent on used and unused portions of the facility. The agreement also contains certain covenants, including a financial covenant that requires the company to maintain common shareholders' equity of $850,000,000. At December 28, 1997 and December 29, 1996, there were approximately $296,394,000 and zero borrowings outstanding under the facility, respectively, and the company was in compliance with all covenants. Interest expense incurred under the revolving credit facility was approximately $552,000 and zero during 1997 and 1996, respectively.

In the first quarter of 1996, the company retired approximately $50,222,000 in debt outstanding, the only long-term debt then outstanding, bearing interest at 10.1 percent.