Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, on November 2, 2016, Apogee Enterprises, Inc. (the Company) entered into a Second Amended and Restated Credit
Agreement (the Existing Agreement), dated as of November 2, 2016, among the Company, the Lenders from time to time parties to the Existing Agreement, Wells Fargo Bank, National Association, as administrative agent for the
Lenders, 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. The Existing Agreement created a committed,
revolving credit facility in the amount of $175 million (subject to increase under the Existing Agreement to an amount not exceeding $275 million) 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 decrease the available commitment.
On June 9, 2017, the Company
entered into Amendment No. 1 to the Existing Agreement (Amendment No. 1), dated as of June 9, 2017, by and among the Company, the Lenders (as defined therein), and Wells Fargo Bank, National Association, as administrative
agent for the Lenders, swingline lender and (with Comerica Bank) issuer of letters of credit.
Consistent with the Existing Agreement, under the Existing
Agreement, as amended by Amendment No. 1 (the Amended Agreement), the Company may elect the borrowings to bear interest at one of two rates. First, borrowings under the Amended Agreement may be made at an interest rate per annum
equal to the sum of the Applicable Margin (which is calculated based upon the Companys debt-to-EBITDA ratio) and the LIBOR Rate (as defined in the Amended Agreement). Second, 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) for an interest period of one month plus 1.00%) in effect from time to time.
Amendment No. 1 also amended the terms of the Existing Agreement in the following respects:
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The amount of the incremental loan commitments was increased to $160 million.
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The incremental loan commitments were exercised to increase the amount of the revolving credit facility to $335 million.
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The indebtedness covenant was amended to be less restrictive, with an increase in the permitted amount available to be drawn under letters of credit issued by one or more Lenders.
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No other provisions of the Existing Agreement were materially amended by Amendment No. 1.
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 a merger in connection with an otherwise
permitted disposition if, after giving effect to such merger, no Default or Event of Default would then exist, (iii) the Company or any subsidiary 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 apply any part of its property or assets to the purchase, redemption or other
retirement of, 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, Amendment No. 1 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 on Form 8-K filed with the Securities and Exchange Commission (the SEC) on November 4, 2016, and the Amendment No. 1, a copy of
which is filed as Exhibit 10.1 to this Current Report on Form 8-K and which are incorporated herein by reference.