APY Apergy Corporation

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 3, 2020

(281) 403-5772

(Registrant’s Telephone Number, Including Area Code)

Apergy Corporation

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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.  ☐

EXPLANATORY NOTE

On June 3, 2020 (the “Closing Date”), pursuant to that certain Agreement and Plan of Merger and Reorganization dated as of December 18, 2019 (the “Merger Agreement”), by and among ChampionX Corporation, a Delaware corporation (f/k/a Apergy Corporation, the “Company”), Athena Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Merger Sub”), Ecolab Inc., a Delaware corporation (“Ecolab”), and ChampionX Holding Inc., a Delaware corporation and a wholly owned subsidiary of Ecolab (“Newco”), the Company completed its Reverse Morris Trust acquisition of Ecolab’s upstream energy business (the “Newco Business”, and the transactions contemplated by the Merger Agreement, the “Transactions”). In connection with the Transactions, (i) on or before the Closing Date, Ecolab transferred the Newco Business to Newco and its subsidiaries (the “Reorganization”) and, thereafter, on the Closing Date, Ecolab distributed to certain stockholders of Ecolab (the “Distribution”) all of the shares of common stock, par value $0.01 per share, of Newco (the “Newco Common Stock”) pursuant to that certain Separation and Distribution Agreement, dated as of December 18, 2019, among the Company, Ecolab and Newco (the “Separation Agreement”), and (ii) following the Distribution, Merger Sub merged with and into Newco (the “Merger”), with Newco surviving the Merger as a wholly owned subsidiary of the Company.

The Apergy Credit Agreement provided for the incurrence of an additional $150 million of revolving commitments under the Apergy Credit Agreement (the “Revolver Increase”), upon the consummation of and in connection with the Merger. In addition, the Apergy Credit Agreement requires Newco and certain of its wholly-owned material domestic subsidiaries (the “Newco Joinder Parties”) to guarantee the obligations under the Apergy Credit Agreement (as well as certain cash management obligations and interest rate hedging or other swap agreements) and grant a security interest on substantially all of each Newco Joinder Party’s material assets immediately after the effectiveness of the Merger. On the Closing Date, the Revolver Increase became effective, and the Newco Joinder Parties executed joinder documentation to provide the required guarantees and collateral pursuant to the Apergy Credit Agreement.

The Apergy Credit Agreement is attached hereto as Exhibit 10.1 and is incorporated by reference into this Item 1.01.

Newco Credit Agreement

On the Closing Date, Newco entered into that certain Credit Agreement (the “ChampionX Credit Agreement”), by and among Newco, as borrower, the lenders party thereto and Bank of America, N.A., as administrative agent, pursuant to which the lenders provided a $537 million term loan facility (the “Term Loan Facility”) to Newco to fund a cash payment of approximately $527 million to Ecolab on the Closing Date. The Term Loan Facility matures on the earlier of (a) seven years after the Closing Date and (b) if any of the Company’s existing Senior Unsecured Notes (as defined in the ChampionX Credit Agreement) are still outstanding as of such date, January 30, 2026.

On the Closing Date, the Term Loan Facility was guaranteed by the Newco Joinder Parties, Apergy and the wholly-owned domestic material subsidiaries of Apergy which guarantee the obligations under the Apergy Credit Agreement (together with Newco, collectively, the “ChampionX Loan Parties”). All obligations under the ChampionX Credit Agreement, and the guarantees of those obligations, are secured by substantially all of the material assets of the ChampionX Loan Parties.

Amounts outstanding under the Term Loan Facility shall bear interest, at the option of Newco, at a rate equal to (a) LIBOR plus 5.0% for Eurocurrency Rate Loans or (b) the highest of (i) the Federal Funds Rate plus 1/2 of 1%, (ii) the “prime rate” quoted by Bank of America, N.A., (iii) LIBOR plus 1.00% and (iv) 1.00%, plus 4.0%.

Any voluntary prepayment of the Term Loan Facility which occurs within two years of the Closing Date is subject to a make-whole prepayment premium in the amount of the Applicable Premium (as defined in the ChampionX Credit Agreement) of the aggregate principal amount of the Term Facility prepaid.

ChampionX Loan Parties are subject to various affirmative and negative covenants and reporting obligations under the ChampionX Credit Facility. These include, among others, limitations on indebtedness, liens, sale and leaseback transactions, investments, fundamental changes, assets sales, restricted payments, affiliate transactions, and restricted debt payments. Events of default under the Term Loan Facility include non-payment of amounts due to the lenders, violation of covenants, materially incorrect representations, defaults under other material indebtedness, judgments and specified insolvency-related events, certain ERISA events, and invalidity of loan or collateral documents, subject to, in certain instances, specified thresholds, cure periods and exceptions.

The ChampionX Credit Agreement is attached hereto as Exhibit 10.2 and is incorporated by reference into this Item 1.01.

Whole shares of Company Common Stock in uncertificated form will be received by Newco stockholders. Under the terms of the Merger Agreement, fractional shares of Company Common Stock will not be issued. Instead, holders of shares of Newco Common Stock who would otherwise have been entitled to receive a fractional share of Company Common Stock (after aggregating all fractional shares of Company Common Stock issuable to such holder) will receive in cash the dollar amount (rounded to the nearest whole cent) determined by multiplying such fraction by the closing price of Company Common Stock on the New York Stock Exchange (the “NYSE”) on the last business day prior to the Effective Time. The amount received by such holders of shares of Newco Common Stock will be net of any required withholding taxes.

On the Closing Date, Merger Sub merged with and into Newco, with Newco surviving the Merger as a wholly owned subsidiary of the Company.

In connection with the Transactions, the Company, Ecolab, ChampionX LLC and Newco entered into certain additional agreements relating to, among other things, certain tax matters and the provision of certain transition services during a transition period following the consummation of the Merger. The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.01.

The Apergy Registration Statement sets forth certain additional information regarding Newco and the Transactions. The information contained in Items 1.01 and 5.02 of this Current Report on Form 8-K is incorporated by reference into this Item 2.01. In addition, the foregoing description of the Transactions is qualified in its entirety by reference to the Merger Agreement and the Separation Agreement, copies of which are attached as exhibits hereto and are incorporated by reference into this Item 2.01.

Each of the Ecolab designated directors will be entitled to receive the standard, pro-rated remuneration provided to the Company’s non-management directors. Listed below is the biographical information for the two new directors designated by Ecolab:

Heidi Alderman is the former Senior Vice President, Intermediates of BASF Corporation (a global chemical manufacturing company), a position she held from 2016 until her retirement in 2019. Prior to this role, Ms. Alderman held the positions of Senior Vice President, North American Petrochemicals from 2011 to 2016; Senior Vice President, North American Procurement from 2008 to 2011; Vice President, Functional Polymers from 2005 to 2008; and Business Director, Polymers from 2003 to 2005, all at BASF SE.

Ms. Alderman’s 39-year career in chemicals manufacturing brings a unique and valuable perspective to the Board. She also holds a bachelor’s degree in chemical engineering from Stevens Institute of Technology and a master’s degree in chemical engineering from Drexel University, providing a depth of expertise for the Company’s expanded business. Ms. Alderman has held various positions in business, operations, research, procurement, product and marketing management at BASF, Air Products and Chemicals Inc. and Rohm and Haas, in addition to completing the University of Pennsylvania Wharton Management Program in business administration, providing a global business management perspective to the Board.

Ms. Alderman has served on the Board of Olin Corporation since 2019 where she is a member of the Directors and Corporate Governance Committee.

Stuart Porter founded Denham Capital in 2004 and is a Managing Partner as well as Denman’s Chief Executive Officer and Chief Investment Officer. Mr. Porter holds a Bachelor of Arts from the University of Michigan and a Master of Business Administration from the University of Chicago Booth School of Business.

Mr. Porter brings three plus decades of experience evaluating, investing and advising companies all along the energy value chain. In his current and previous roles, he has overseen the management of 40 upstream, midstream and oilfield service companies representing in excess of $3.5 billion of invested capital. Additionally, Mr. Porter has significant global experience, managing offices in London and Perth Australia for Denham Capital as well as deploying investment capital across more than 25 portfolio companies in Africa, Australasia, and North and South America. In Mr. Porter’s previous roles as a founding partner of Sowood Capital Management LP and Vice President and Portfolio Manager at Harvard Management Company, Inc., Bacon Investments, at J. Aron, a division of Goldman Sachs, and at Cargill Mr. Porter oversaw both trading and investment portfolios in energy in both the public and private sectors.

Ms. Alderman will serve on the Compensation Committee and Mr. Porter will serve on the Audit Committee. Neither Ms. Alderman nor Mr. Porter has a direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

(e)

As previously disclosed in the Company’s Current Report on Form 8-K filed with the SEC on May 14, 2020, on May 12, 2020, at the Company’s 2020 Annual Meeting of Shareholders, shareholders approved the Company’s Amended and Restated 2018 Equity and Cash Incentive Plan (the “Restated Plan”). On the Closing Date, in connection with the consummation of the Merger, the Company amended the Restated Plan to reflect the change in the name of the Company from “Apergy Corporation” to “ChampionX Corporation” (the “Name Change”), as described in the Apergy Registration Statement. No substantive changes were made to the Restated Plan. The Restated Plan, as amended by such amendment, is attached hereto as Exhibit 10.3 and is incorporated by reference into this Item 5.02.

(d) Exhibits. See Exhibit Index, incorporated herein by reference.

A list of the schedules to the Tax Matters Agreement follows: