Apogee Enterprises (APOG) 8-K Entry into a Material Definitive Agreement

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report: June 25, 2019 (Date of earliest event reported)

APOGEE ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

Commission File Number:0-6365

Minnesota	41-0919654
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

4400 West 78th Street – Suite 520

Minneapolis, Minnesota 55435

(Address of principal executive offices, including zip code)

(952)835-1874

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form8-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))

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.33 1/3 Par Value	APOG	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act (17 CFR 230.405) or Rule 12b-2 of the Exchange Act (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  ☐.

Item 1.01 Entry into a Material Definitive Agreement.

As previously disclosed, in November 2016, Apogee Enterprises, Inc. (the “Company”) entered into a Second Amended and Restated Credit Agreement (as amended, the “Existing Agreement”), dated as of November 2, 2016, among the Company, the Lenders from time to time party to the Existing Agreement, Wells Fargo Bank, National Association, as administrative agent for the Lenders and as swingline lender, Wells Fargo Bank, National Association and U.S. Bank National Association as issuers of letters of credit, and U.S. Bank National Association as Syndication Agent. The Existing Agreement was amended on June 9, 2017 by Amendment No. 1 to the Existing Agreement (“Amendment No. 1”), by and among the Company, the Lenders (as defined therein), and Wells Fargo Bank, National Association, as administrative agent for the Lenders and swingline lender, and Wells Fargo Bank, National Association and U.S. Bank National Association as issuers of letters of credit.

The Existing Agreement created a committed, revolving credit facility in the amount of $335 million, inclusive of the exercised incremental loan commitments thereunder, with a maturity date of November 2, 2021. The credit facility included a letter of credit facility in the amount of up to $70 million, the outstanding amounts of which decreased the available commitment.

On June 25, 2019, the Company amended and restated the Existing Agreement by entering into a Third Amended and Restated Credit Agreement (the “Amended Agreement”), dated as of June 25, 2019, among the Company, the Lenders from time to time party to the Amended Agreement, Wells Fargo Bank, National Association, as administrative agent for the Lenders and as swingline lender, Wells Fargo Bank, National Association and U.S. Bank National Association as issuers of letters of credit, and U.S. Bank National Association as Syndication Agent.

Consistent with the Existing Agreement, under the Amended Agreement, the Company may elect the revolving loan borrowings and term loan borrowings to bear interest at one of two rates. First, such borrowings under the Amended Agreement may be made at an interest rate per annum equal to the sum of the Applicable Margin (which is determined based upon the Company’sdebt-to-EBITDA ratio) and the LIBOR Rate (as defined in the Amended Agreement). Second, such borrowings under the Amended Agreement may be made at an interest rate per annum equal to the sum of the Applicable Margin and the Base Rate (which is a rate per annum equal to the greatest of (i) the interest rate announced by the Wall Street Journal as the “Prime Rate” in the United States, (ii) the sum of 0.50% per annum and the federal funds rate in effect on such day, and (iii) LIBOR (as defined in the Amended Agreement) plus 1.00%) in effect from time to time.

The Amended Agreement also amended the terms of the Existing Agreement in the following respects:

• A new term loan facility was added in the amount of $150 million.

• The amount of the revolving credit facility was decreased to $235 million.

• The amount of the letter of credit subfacility was increased to $80 million.

• The maturity of the revolving credit facility was extended to June 25, 2024, five years from the date of the Amended Agreement. The Existing Agreement would have expired on November 2, 2021.

• The maturity of the term loan facility is June 23, 2020.

• The Company may elect the swingline loans to bear interest at one of two rates (i) an interest rate per annum equal to the sum of the Applicable Margin and the Base Rate, or (ii) an interest rate per annum equal to the sum of the Applicable Margin and the LIBOR Market Index Rate (as defined in the Amended Agreement).

• The permitted Leverage Ratio (as defined in the Amended Agreement) was increased, solely during an Acquisition Holiday (as defined in the Amended Agreement), to 3.75 to 1.0.

• The Incremental Loans provisions were amended to increase the total aggregate principal amount of additional loans allowed to $190 million.

• Several other covenants and related definitions were amended to be less restrictive, including a change to the definition of EBITDA, a change to the definition of “Material Subsidiary,” a change to the determination of subsidiary guarantors, an increase in the amount of certain types of permitted liens, an increase in the amount of certain types of permitted indebtedness, an increase in the types of permitted affiliate transactions, and an increase of the dollar threshold for certain events of default.

• Certain covenants regarding anti-terrorism laws, sanctions, anti-money laundering laws, anti-corruption laws, margin stock holdings, and ERISA were amended to be more restrictive and consistent with commercial lending best practices.

No other provisions of the Existing Agreement were materially amended by the Amended Agreement.

Consistent with the Existing Agreement, the Amended Agreement provides that the Company may not be a party to any merger, consolidation or share exchange, or sell, transfer, lease or otherwise dispose of all or any substantial part of its assets or property, or in any event sell or discount any of its notes or accounts receivable, or permit any subsidiary to do so; provided, however, that the foregoing restriction does not apply to or operate to prevent (i) the Company being a party to any merger where the Company is the surviving person if, after giving effect to such merger, no Default or Event of Default (both as defined in the Amended Agreement) would then exist, (ii) any subsidiary merging into the Company, being a party to any merger that does not involve the Company where such subsidiary is the surviving person, or being party to an otherwise permitted merger if, after giving effect to such merger, no Default or Event of Default would then exist, (iii) the Company or any subsidiary from selling its inventory in the ordinary course of its business, (iv) any dissolution of an inactive subsidiary that would not have a Material Adverse Effect (as defined in the Amended Agreement), if, after giving effect to such dissolution, no Default or Event of Default would then exist, and (v) any Like-Kind Exchange (as defined in the Amended Agreement).

Consistent with the Existing Agreement, the Amended Agreement places certain limitations on the payment of cash dividends. It provides that the Company may not declare any dividends (other than dividends payable in capital stock of the Company) on any shares of any class of its capital stock, or set apart any sum for the payment of any dividends on, or make any other distribution by reduction of capital or otherwise in respect of, any shares of any class of capital stock of the Company, unless, immediately after giving effect to such action, there shall not have occurred any Default or Event of Default that is continuing.

Amounts due under the Amended Agreement may be accelerated upon an Event of Default, such as a breach of a representation or covenant or the occurrence of bankruptcy, if not otherwise waived or cured.

Wells Fargo Bank, National Association and certain lenders that are parties to the Agreement have provided, from time to time, and may continue to provide, commercial banking, transfer agent, financial and other services to the Company, including letters of credit, depository and account processing services, for which the Company has paid and intends to pay customary fees.

The foregoing description of the Existing Agreement and Amended Agreement is not complete and is qualified in its entirety by reference to the Existing Agreement, a copy of which was filed as Exhibit 10.1 to the Current Report onForm 8-K filed with the Securities and Exchange Commission (the “SEC”) on November 4, 2016, and Amendment No. 1, a copy of which was filed as Exhibit 10.1 to the Current Report onForm 8-K filed with the SEC on June 14, 2017, and the Amended Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report onForm 8-K and which are incorporated herein by reference.

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

As described under Item 1.01 of this Current Reporton Form 8-K, on June 25, 2019, the Company entered into the Third Amended and Restated Credit Agreement, dated as of June 25, 2019, by and among the Company, the Lenders from time to time party to the Amended Agreement, Wells Fargo Bank, National Association, as administrative agent for the Lenders and as swingline lender, and Wells Fargo Bank, National Association and U.S. Bank National Association as issuers of letters of credit, and U.S. Bank National Association as syndication agent. As of June 25, 2019, the date of this Current Report, the Company had outstanding borrowings of $121 million under the revolving credit facility and outstanding borrowings of $150 million under the term loan facility. The information provided in Item 1.01 of this Current Report on Form8-K is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

10.1 Third Amended and Restated Credit Agreement, dated as of June  25, 2019, by and among Apogee Enterprises, Inc., as the Borrower, the Lenders referred to therein, Wells Fargo Bank, National Association, as Administrative Agent, Swingline Lender and Issuing Lender, and U.S. Bank National Association, as Syndication Agent and Issuing Lender.*

* Filed herewith.

SIGNATURE

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.

APOGEE ENTERPRISES, INC.
By:	/s/ Patricia A. Beithon
	Patricia A. Beithon
	General Counsel and Secretary

Date: June 28, 2019