Item 1.01 Entry into a Material Definitive Agreement.

On September 21, 2021, RBC Bearings Incorporated (the "Company") and Roller Bearing Company of America, Inc. ("RBCA") entered into Amendment No. 2 (the "Amendment") to the Credit Agreement, dated as of April 24, 2015 (as amended by that certain Amendment No. 1 dated as of January 31, 2019 and as otherwise amended, restated, amended and restated or otherwise modified from time to time, the "Credit Agreement"), among RBCA, the Company, the subsidiary guarantors party thereto, the lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent for the lenders.

The Company entered into the Amendment in order to permit the Company's and RBCA's issuance of certain equity and debt securities in connection with the Company's financing of its pending acquisition of the Dodge Mechanical Power Transmission Business of ABB Asea Brown Boveri Ltd ("Dodge").

The Amendment is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference. The brief summary of the material provisions of the Amendment set forth above is qualified in its entirety by reference to the Amendment filed as an exhibit hereto.

Item 3.03. Material Modification to Rights of Security Holders.

On September 24, 2021, the Company issued 4,600,000 shares of a new class of its capital stock titled the "5.00% Series A Mandatory Convertible Preferred Stock" (the "Mandatory Convertible Preferred Stock") in a public offering (the "Mandatory Convertible Preferred Stock Offering") registered under the Securities Act of 1933, as amended (the "Securities Act"), including 600,000 shares issued pursuant to the full exercise of the option granted to the underwriters of the Mandatory Convertible Preferred Stock Offering to purchase additional shares solely to cover over-allotments. In connection with the issuance of Mandatory Convertible Preferred Stock, the Company filed a Certificate of Designations (the "Certificate of Designations") with the Secretary of State of the State of Delaware designating, establishing the terms of, and authorizing an aggregate of 4,600,000 shares of the Mandatory Convertible Preferred Stock.

The Mandatory Convertible Preferred Stock has a par value of $0.01 per share and a liquidation preference of $100 per share. The Mandatory Convertible Preferred Stock will rank senior to the Company's common stock, $0.01 par value per share (the "Common Stock"), with respect to the payment of dividends and the distribution of assets upon the Company's liquidation, dissolution or winding up. If the Company liquidates, dissolves or winds up, whether voluntarily or involuntarily, then, subject to the rights of any of the Company's creditors or holders of any outstanding liquidation senior stock, the holders of the Mandatory Convertible Preferred Stock will be entitled to receive payment for the liquidation preference of, and all accumulated and unpaid dividends on, their Mandatory Convertible Preferred Stock out of the Company's assets or funds legally available for distribution to its stockholders, before any such assets or funds are distributed to, or set aside for the benefit of, holders of the Common Stock or other junior stock.





                                     - 1 -

The Mandatory Convertible Preferred Stock will accumulate cumulative dividends at a rate per annum equal to 5.00% on the liquidation preference thereof, and will be payable when, as and if declared by the Company's board of directors, out of funds legally available for their payment to the extent paid in cash, quarterly in arrears on January 15, April 15, July 15 and October 15 of each year, beginning on January 15, 2022 and ending on, and including, October 15, 2024. Declared dividends on the Mandatory Convertible Preferred Stock will be payable, at the Company's election, in cash, shares of Common Stock or a combination of cash and shares of Common Stock. If the Company elect to pay any portion of a declared dividend in shares of Common Stock, then those shares will be valued at 97% of the average of the daily volume-weighted average price per share of Common Stock over the five consecutive trading days beginning on, and including, the sixth scheduled trading day immediately before the related dividend payment date. However, the number of shares of Common Stock that the Company will deliver as payment for any declared dividend will be limited to a maximum number equal to the total dollar amount of the declared dividend (including any portion thereof that the Company has not elected to pay in shares of Common Stock) divided by the "floor price," which initially is equal to $64.75 per share and is subject to customary anti-dilution adjustments. If the number of shares that the Company delivers is limited as a result of this provision, then the Company will, to the extent it is legally able to do so, declare and pay the related deficiency in cash.

In certain cases where the Company has not declared and paid accumulated dividends in full on the Mandatory Convertible Preferred Stock, then, subject to limited exceptions, the Company will be prohibited from declaring or paying dividends on or repurchasing any shares of Common Stock or other junior securities.

Unless previously converted or redeemed, each outstanding share of Mandatory Convertible Preferred Stock will automatically convert, for settlement on or about October 15, 2024, into between 0.4413 and 0.5405 shares of Common Stock, subject to customary anti-dilution adjustments (such amounts, as so adjusted, the "Minimum Conversion Rate" and the "Maximum Conversion Rate," respectively). The conversion rate that will apply to mandatory conversions will be determined based on the average of the daily volume-weighted average prices over the 20 consecutive trading days beginning on, and including, the 21st scheduled trading day immediately before October 15, 2024. The conversion rate applicable to mandatory conversions may in certain circumstances be increased to compensate holders of the Mandatory Convertible Preferred Stock (the "Preferred Stockholders") for certain unpaid accumulated dividends.

The Preferred Stockholders will have the right to convert all or any portion of their shares of Mandatory Convertible Preferred Stock at any time before the close of business on the mandatory conversion date. Early conversions that are not in connection with certain corporate events that constitute a "make-whole fundamental change" (as defined in the Certificate of Designations) will be settled at the Minimum Conversion Rate. In addition, the conversion rate applicable to such an early conversion may in certain circumstances be increased to compensate Preferred Stockholders for certain unpaid accumulated dividends.

If a make-whole fundamental change occurs, then Preferred Stockholders will, in certain circumstances, be entitled to convert their Mandatory Convertible Preferred Stock at an increased conversion rate for a specified period of time and receive an amount to compensate them for certain unpaid accumulated dividends and any remaining future scheduled dividend payments.





                                     - 2 -

The Company expects to use the net proceeds from the Mandatory Convertible Preferred Stock Offering and the Common Stock Offering (as defined below) to fund a portion of the cash purchase price for the pending acquisition of Dodge, to pay acquisition-related fees and expenses, and for other general corporate purposes. If the pending acquisition of Dodge has not closed as of the close of business on January 26, 2022, or if, before such time, the purchase agreement for such pending acquisition is terminated in accordance with its terms or the Company's board of directors determines, in its reasonable judgment, that the closing of the pending acquisition of Dodge will not occur, then the Company will have the right to redeem all, but not less than all, of the Mandatory Convertible Preferred Stock. If the average of the last reported sale prices per share of Common Stock for the five consecutive trading days ending on, and . . .

Item 5.03. Amendments to Articles of Incorporation or Bylaws.

The information set forth above in this Current Report under Item 3.03 is incorporated by reference into this Item 5.03.




Item 8.01. Other Events.

On September 24, 2021, the Company issued 3,450,000 shares of Common Stock in a public offering (the "Common Stock Offering") registered under the Securities Act, including 450,000 shares issued pursuant to the full exercise of the option granted to the underwriters of the Common Stock Offering to purchase additional shares.





                                     - 4 -

Item 9.01. Financial Statements and Exhibits.





Exhibits



Exhibit                                 Description
Number
  1.1        Underwriting Agreement, dated as of September 21, 2021, between RBC
           Bearings Incorporated and Goldman Sachs & Co. LLC, as representative
           of the underwriters named therein, relating to the issuance and sale
           of 5.00% Series A Mandatory Convertible Preferred Stock.
  1.2        Underwriting Agreement, dated as of September 21, 2021, between RBC
           Bearings Incorporated and Goldman Sachs & Co. LLC, as representative
           of the underwriters named therein, relating to the issuance and sale
           of common stock.
  3.1        Certificate of Designations relating to the 5.00% Series A Mandatory
           Convertible Preferred Stock.
  4.1        Form of certificate representing the 5.00% Series A Mandatory
           Convertible Preferred Stock (included as Exhibit A to Exhibit 3.1).
  5.1        Opinion of Kirkland & Ellis LLP.
  10.1       Amendment No. 2 to Credit Agreement, dated as of September 21, 2021,
           among Roller Bearing Company of America, Inc., RBC Bearings
           Incorporated, the lenders party thereto, and Wells Fargo Bank,
           National Association, as administrative agent for the lenders.
  23.1       Consent of Kirkland & Ellis LLP (included in Exhibit 5.1).
104        Cover page interactive data file (embedded within the inline XBRL
           document).




                                     - 5 -

© Edgar Online, source Glimpses