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INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the
Securities Exchange Act of 1934 (Amendment
(Amendment No. )
Filed by the Registrant x
Filed by a Party other than the Registrant ¨
Check the appropriate box:
| ||
¨Confidential, | ||
xDefinitive Proxy Statement | ||
¨ Definitive Additional Materials | ||||
¨ Soliciting Material Under Rule 14a-12 | ||||
APOGEE ENTERPRISES, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x No fee required.
¨ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
| 1. | Title of each class of securities to which transaction applies: |
| Aggregate number of securities to which transaction applies: |
| Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
| Proposed maximum aggregate value of transaction: |
| Total fee paid: |
¨ Fee paid previously with preliminary materials:
| Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the |
| Amount previously paid: |
| Form, Schedule or Registration Statement No.: |
| Filing Party: |
| Date Filed: |
May 8, 20029, 2003
Dear Shareholder:
You are cordially invited to attend the 20022003 Annual Meeting of Shareholders of Apogee Enterprises, Inc. to be held in the Lutheran BrotherhoodThrivent Financial Building Auditorium, 625 Fourth Avenue South, Minneapolis, Minnesota, commencing at 10:00 a.m. Central Daylight Time on Tuesday, June 18, 2002.17, 2003.
The Secretary'sSecretary’s formal notice of the meeting and the proxy statement appear on the following pages and describe the matters to come before the meeting. During the meeting, time will be provided for a review of the activities of the past year and items of general interest about the Company.Apogee.
As a convenience to shareholders unable to attend the annual meeting in person, we also will be webcasting the meeting. To view the meeting via webcast, go to the Company'sour web site athttp://www.apog.comand click on the "investor relations"“investor relations” button, followed by the webcast link at the top of that page. Please plan to be aton the web site at least 15 minutes prior to the meeting so that you have sufficient time to register and to download and install any necessary software.
We hope that you will be able to attend the meeting in person, and we look forward to seeing you. Even if you plan to attend the meeting in person, we urge you to vote your shares by marking your votes on the enclosed proxy card, signing and dating it, and mailing it in the enclosed postage-paid envelope as promptly as possible. You also may vote your shares by telephone or Internet as directed on the enclosed proxy card. Telephone and Internet voting facilities for shareholders of record will be available 24 hours a day, and will close at 5:00 p.m. Eastern Daylight Time (4:00 p.m. Central Daylight Time) on June 17, 2002.16, 2003. If you do attend the meeting in person, you may at that time revoke any proxy previously given and vote in person, if desired.
Sincerely,
Russell Huffer
Chairman, President and
Chief Executive Officer
APOGEE ENTERPRISES, INC.
7900 Xerxes Avenue South
Suite 1800
Minneapolis, MN 55431-1159
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on June 18, 2002
17, 2003
NOTICE IS HEREBY GIVEN that the 20022003 Annual Meeting of Shareholders of Apogee Enterprises, Inc. (the "Company") will be held in the Lutheran BrotherhoodThrivent Financial Building Auditorium, 625 Fourth Avenue South, Minneapolis, Minnesota, commencing at 10:00 a.m. Central Daylight Time on Tuesday, June 18, 200217, 2003 for the following purposes:
| 1. | To elect three Class II directors for three-year terms ending in the year 2006; |
| 2. | To consider and act upon a proposal to amend the Amended and Restated 1987 Apogee Enterprises, Inc. Partnership Plan; |
| 3. | To ratify the appointment of Deloitte & Touche LLP as our independent auditors for the fiscal year ending February 28, 2004; and |
| 4. | To transact such other business as may properly be brought before the meeting. |
The Board of Directors has fixed April 24, 200223, 2003, as the record date for the meeting. Only shareholders of record at the close of business on that date are entitled to receive notice of and to vote at the meeting.
As a convenience to shareholders unable to attend the annual meeting in person, we also will be webcasting the meeting. To view the meeting via webcast, go to the Company'sour web site athttp://www.apog.comand click on the "investor relations"“investor relations” button, followed by the webcast link at the top of that page. Please plan to be aton the web site at least 15 minutes prior to the meeting so that you have sufficient time to register and to download and install any necessary software.
Your vote is important to ensure a quorum at the meeting. Even if you own only a few shares, and whether or not you expect to be present at the meeting, we urgently request that you to mark, date, sign and mail the enclosed proxy card in the postage-paid envelope provided or vote your shares by telephone or Internet as directed on the enclosed proxy card. Telephone and Internet voting facilities for shareholders of record will be available 24 hours a day, and will close at 5:00 p.m. Eastern Daylight Time (4:00 p.m. Central Daylight Time) on June 17, 2002. The16, 2003. You may revoke your proxy may be revoked by you at any time prior to the meeting and delivery of your proxy will not affect your right to vote in person if you attend the meeting.
By Order of the Board of Directors,
Patricia A. Beithon
General Counsel and Secretary
Minneapolis, Minnesota
May 8, 20029, 2003
APOGEE ENTERPRISES, INC.
PROXY STATEMENT
The enclosed proxy is being solicited on behalf
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Audit Fees, Financial Information Systems Design and Implementation Fees and All Other Fees | 26 | |
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PROPOSAL 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS | 26 | |
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A-1 |
ii
PROXY STATEMENT
2003 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 17, 2003
The Board of Directors of Apogee Enterprises, Inc. (the "Company")is soliciting proxies for use at our 2002 Annual Meetingannual meeting of Shareholdersshareholders to be held on June 18, 2002. The cost17, 2003, and at any adjournment of soliciting proxiesthe meeting. This proxy statement and the enclosed proxy card are first being mailed or given to shareholders on or about May 14, 2003.
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
What is the purpose of the meeting?
At our annual meeting, shareholders will be paid byact upon the Company. In additionmatters outlined in the Notice of Annual Meeting of Shareholders. These include the election of directors, approval of an amendment to solicitation by mail, somethe Amended and Restated 1987 Apogee Enterprises, Inc. Partnership Plan and ratification of the appointment of our officersindependent auditors. Also, management will report on our performance during the last fiscal year and regular employees may solicitrespond to questions from shareholders.
Who is entitled to vote at the returnmeeting?
The Board of proxies by telephone, telegram, facsimile or personal interview but will receive no special compensationDirectors has set April 23, 2003, as the record date for these services. Additionally, we may request brokerage houses and custodians, nominees and fiduciaries to forward soliciting materials to their principals, in which case we will reimburse them for their reasonable out-of-pocket expenses.
Only shareholdersthe annual meeting. If you were a shareholder of record at the close of business on April 24, 2002 will be23, 2003, you are entitled to notice of and to vote at the annual meeting. A
As of the record date, 27,457,625 shares of common stock, par value $.33-1/3, were issued and outstanding and, therefore, eligible to vote at the annual meeting.
Holders of our common stock are entitled to one vote per share. Therefore, a total of 27,457,625 votes are entitled to be cast at the meeting. There is no cumulative voting.
How many shares must be present to hold the meeting?
In accordance with our bylaws, shares equal to at least a majority of the voting power of the outstanding shares of our common stock as of the record date must be present at the meeting in order to hold the meeting and conduct business. This is called a quorum. Shares are counted as present at the meeting if:
| Ÿ | you are present and vote in person at the meeting; or |
| Ÿ | you have properly submitted a proxy by mail, telephone or Internet. |
If you are a shareholder executingof record, you can give a proxy retainsto be voted at the right to revoke the proxy by noticemeeting in writing to the Secretaryany of the Company at any time priorfollowing ways:
| Ÿ | by telephone, by calling a toll-free number; |
| Ÿ | electronically, using the Internet; or |
| Ÿ | by completing, signing and mailing the enclosed proxy card. |
The telephone and Internet voting procedures have been set up for your convenience. The procedures have been designed to its use, by filingauthenticate your identity, to allow you to give voting instructions, and to confirm that those instructions have been recorded properly. If you are a duly executed proxy bearing a later date with the Secretaryshareholder of the Company, by submitting a newrecord and you would like to submit your proxy by telephone or throughInternet, please refer to the Internet or by revokingspecific instructions provided on the enclosed proxy atcard. If you wish to vote using a paper format, please return your signed proxy card before the annual meeting and votingmeeting.
If you hold your shares in person. Proxiesstreet name, you must vote your shares in the accompanying form which aremanner prescribed by your broker or other nominee. Your broker or other nominee has enclosed or otherwise provided a voting instruction card for you to use in directing the broker or nominee how to vote your shares.
If you properly executed,execute, duly returnedreturn and do not revokedrevoke your proxy, it will be voted in the manner specified. you specify.
What is the difference between a shareholder of record and a “street name” holder?
If your shares are registered directly in your name, you are considered the shareholder of record with respect to those shares.
If your shares are held in a stock brokerage account or by a bank, trust or other nominee, then the broker, bank, trust or other nominee is considered to be the shareholder of record with respect to those shares. However, you still are considered the beneficial owner of those shares, and your shares are said to be held in “street name.” Street name holders generally cannot vote their shares directly and must instead instruct the broker, bank, trust or other nominee how to vote their shares using the method described on page 1 under “How do I vote my shares?”
How do I vote if my shares are held in the 401(k) retirement plan, employee stock purchase plan or other plans of Apogee?
If you hold any shares in our 401(k) retirement plan, employee stock purchase plan or other plans of Apogee, your completed proxy card or telephone or Internet proxy vote will serve as voting instructions to the plan trustee. However, your voting instructions must be received at least one day prior to the annual meeting in order to count. In accordance with the terms of our 401(k) retirement plan, the trustee will vote all of the shares held in the plan in the same proportion as the actual proxy votes submitted by plan participants at least one day prior to the annual meeting. If you are a participant in our employee stock purchase plan, the plan custodiancannot vote your shares unless it receives timely instructions from you.
What does it mean if I receive more than one proxy card?
If you receive more than one proxy card, it means that you hold shares registered in more than one account. To ensure that all of your shares are voted, sign and return each proxy card or, if you submit your proxy vote by telephone or Internet, vote once for each proxy card you receive.
You may prefer to hold your shares in more than one account, and you are welcome to do so. However, some multiple accounts are unintentional and will occur if one stock purchase is made with a middle initial and a subsequent purchase is made without a middle initial. Please contact our Investor Relations Department at IR@apog.com, (952) 896-2422 (phone) or (952) 896-2400 (fax) for information on how to merge accounts.
Can I vote my shares in person at the meeting?
If you are a shareholder of record, you may vote your shares in person at the meeting by completing a ballot at the meeting. Even if you currently plan to attend the meeting, we recommend that you also submit your proxy as described above so that your vote will be counted if you later decide not to attend the meeting.
If you are a street name holder, you may vote your shares in person at the meeting only if you obtain a signed letter or other proxy from your broker or other nominee giving you the right to vote the shares at the meeting.
If you are a participant in our 401(k) retirement plan, employee stock purchase plan or other plans of Apogee, you may submit a proxy vote as described above, but you may not vote your plan shares in person at the meeting.
What vote is properly executed but does not specify anyrequired for the election of directors or all choices on it, the proxy willfor a proposal to be voted as follows: (a) in favorapproved?
The affirmative vote of a majority of the shares of our common stock present in person or by proxy and entitled to vote at the annual meeting is required for the election as Class I directors of the three nominees described in this proxy statement; (b) in favor ofeach director and for the approval of the Apogee Enterprises, Inc. 2002 Omnibus Stock Incentive Plan; (c) in favor of the approval of the Apogee Enterprises, Inc. Executive Management Incentive Plan; (d) in favor of the ratification of the appointment of Deloitte & Touche LLP as independent auditors of the Company; and (e) in the discretion of the persons named in the proxy, as to such other matters as may properly come before the meeting and as to which we did not have knowledge prior to February 19, 2002.each proposal.
You may either vote “FOR” or “WITHHOLD” authority to vote for each nominee for the Board of Directors. You may vote “FOR,” “AGAINST” or “ABSTAIN” on the other proposals.
If an executedyou submit your proxy is returned and the shareholder has voted "withhold"but abstain from voting or "abstain" on any matter, the shares represented by such proxy will be considered present at the meeting for purposes of determining a quorum and for purposes of calculating the vote with respect to such matter, but will not be considered to have been voted in favor of the matter. If an executed proxy is returned by a broker holding shares in street name which indicates that the broker does not have discretionarywithhold authority as to specified shares to vote on one or more matters, suchyour shares will be counted as present at the meeting for the purpose of determining a quorum. Your shares also will be counted as present at the meeting for the purpose of calculating the vote on the particular matter with respect to which you abstained from voting or withheld authority to vote.
If you abstain from voting on a proposal, your abstention has the same effect as a vote against that proposal. If you withhold authority to vote for one or more of the directors, this has the same effect as a vote against those directors.
If you hold your shares in street name and do not provide voting instructions to your broker, your shares will be considered representedto be “broker non-votes” and will not be voted on any proposal on which your broker does not have discretionary authority to vote. Shares that constitute broker non-votes will be counted as present at the meeting for purposesthe purpose of determining a quorum but not be represented at the meeting for purposes of calculating the vote with respect to such matter or matters. This effectively reduces the number of shares needed to approve such matter or matters.
Our address
How does the Board of Directors recommend that I vote?
The Board of Directors recommends a vote:
| Ÿ | FOR all of the nominees for director; |
| Ÿ | FOR the proposal to amend the Amended and Restated 1987 Apogee Enterprises, Inc. Partnership Plan; and |
| Ÿ | FOR the ratification of the appointment of Deloitte & Touche LLP as our independent auditors for the fiscal year ending February 28, 2004. |
What if I do not specify how I want my shares voted?
If you submit a signed proxy card or submit your proxy by telephone or Internet and do not specify how you want to vote your shares, we will vote your shares:
| Ÿ | FOR all of the nominees for director; |
| Ÿ | FOR the proposal to amend the Amended and Restated 1987 Apogee Enterprises, Inc. Partnership Plan; |
| Ÿ | FOR the ratification of the appointment of Deloitte & Touche LLP as our independent auditors for the fiscal year ending February 28, 2004; and |
| Ÿ | in the discretion of the persons named in the proxy on any other matters that properly come before the meeting and as to which we did not have knowledge prior to February 18, 2003. |
Can I change my vote after submitting my proxy or voting instructions?
Yes. If you are a shareholder of record, you may revoke your proxy and change your vote at any time before your proxy is 7900 Xerxes Avenue South, Suite 1800, Minneapolis, Minnesota 55431-1159. Ourvoted at the annual meeting, in any of the following ways:
| Ÿ | by sending a written notice of revocation to our Secretary; |
| Ÿ | by submitting a later-dated proxy to our Secretary; |
| Ÿ | by submitting a later-dated proxy by telephone or Internet; or |
| Ÿ | by voting in person at the meeting. |
If you hold your shares in street name, you should contact your broker or other nominee for information on how to revoke your voting instructions and provide new voting instructions.
If you hold shares in our 401(k) retirement plan, employee stock purchase plan or other plans of Apogee, you may revoke your proxy and change your vote at any time but not less than one day before the annual meeting, in any of the following ways:
| Ÿ | by sending a written notice of revocation to the plan trustee or plan custodian; |
| Ÿ | by submitting a later-dated proxy or voting instruction to the plan trustee or plan custodian; or |
| Ÿ | by submitting a later-dated proxy or voting instructions by telephone or Internet. |
Will my vote be kept confidential?
Yes. We have procedures to ensure that, regardless of whether shareholders vote by mail, telephone, number is (952) 835-1874. The mailingInternet or in person, (1) all proxies, ballots and voting tabulations that identify shareholders are kept permanently confidential, except as disclosure may be required by federal or state law or expressly permitted by a shareholder; and (2) voting tabulations are performed by an independent third party.
You may be asked to present valid picture identification, such as a driver’s license or passport, before being admitted to the meeting. If you hold your shares in street name, you may also be asked to present proof of this proxyownership to be admitted to the meeting. A recent brokerage statement and formor letter from your broker or other nominee are examples of proof of ownership.
Who pays for the cost of proxy preparation and solicitation?
We pay for the cost of proxy preparation and solicitation, including the reasonable charges and expenses of brokers and other nominees for forwarding proxy materials to the beneficial owners of the shares.
We are soliciting proxies primarily by mail. In addition, some of our officers and regular employees may solicit the return of proxies by telephone, facsimile, personal interview, e-mail or telegram. These individuals will commence on or about May 14, 2002.receive no additional compensation for these services.
The following table sets forth information concerning beneficial ownership of our common stock
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS At April 24, 2002, 28,339,814 shares of our common stock, par value $.331/3, were issued and outstanding. Each share is entitled to one vote. of the Company by persons who are known byto us to own more than five percent of our common stock outstanding as of March 31, 2002,April 23, 2003, except as noted below. Unless otherwise indicated, the named holders have sole voting and investment power with respect to the shares beneficially owned by them.
| Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership (#) | % of Class | ||
|---|---|---|---|---|
| Putnam Investments, LLC(1) One Post Office Square Boston, MA 02109 | 2,487,760 | 8.8 | ||
Dimensional Fund Advisors Inc.(2) 1299 Ocean Avenue, 11th Floor Santa Monica, CA 90401 | 2,287,866 | 8.1 | ||
Trust of Russell H. Baumgardner(6/6/86)(3) 607 Mountain Links Drive Henderson, NV 89012 | 1,978,645 | 7.0 | ||
State Street Bank and Trust Company(4) 225 Franklin Street Boston, MA 02110 | 1,514,893 | 5.3 |
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership (#) | % of Common Stock Outstanding | ||
Putnam LLC, d/b/a Putnam Investments(1) | 2,736,396 | 10.0 | ||
Trust of Russell H. Baumgardner(6/6/86)(2) | 1,773,388 | 6.5 | ||
Dimensional Fund Advisors Inc.(3) | 1,753,366 | 6.4 | ||
State Street Bank and Trust Company(4) | 1,496,998 | 5.5 |
2
| (1) | We have relied upon the information supplied by Putnam LLC, d/b/a Putnam Investments, in a Schedule 13G furnished to us reporting information as of December 31, 2002. Putnam serves as the sub-advisor and the investment manager of various mutual funds that hold the shares of our common stock in the ordinary course of business. In these capacities, Putnam exercises shared investment power over various institutional accounts that held, in the aggregate, 2,736,396 shares of our common stock as of December 31, 2002. Of the shares reported, Putnam has shared voting power with respect to 810,300 shares and shared investment power with respect to 2,736,396 shares. |
| (2) | We have relied upon the information regarding the Russell H. Baumgardner Trust dated June 6, 1986 supplied by the trustees of the Trust and our transfer agent as of April 23, 2003. The 1,773,388 shares held by the Trust are also deemed to be beneficially owned by Messrs. Donald W. Goldfus, O. Walter Johnson and Laurence J. Niederhofer, who serve as trustees of the Trust, because as trustees, they share voting and investment power over the shares. If the shares held by the Trust were included in the holdings of Messrs. Goldfus, Johnson and Niederhofer, these individuals’ common stock holdings would be as follows: Mr. Goldfus, 2,445,780 (8.9%), Mr. Johnson, 1,773,388 (6.5%), and Mr. Niederhofer, 2,235,608 (8.1%). |
| (3) | We have relied upon the information supplied by Dimensional Fund Advisors Inc. in a Schedule 13G furnished to us reporting information as of December 31, 2002. Dimensional serves as the investment advisor to four investment companies and the investment manager to other commingled group trusts and separate accounts that hold the shares of our common stock in the ordinary course of business. In these capacities, Dimensional possesses sole voting and investment power over, in the aggregate, 1,753,366 shares of our common stock held by such group trusts and separate accounts as of December 31, 2002. Dimensional disclaims beneficial ownership of the shares. |
| (4) | We have relied upon the information supplied by State Street Bank and Trust Company in a Schedule 13G furnished to us reporting information as of December 31, 2002. State Street serves as trustee for our retirement plan that holds the shares of our common stock in the ordinary course of business. In this capacity, State Street exercises sole voting power with respect to 554,133 shares, shared voting power with respect 895,165 shares, sole investment power with respect to 1,496,898 shares and shared investment power with respect to 100 shares. |
Our executive officers and directors are encouraged to own Apogee common stock to further align their interests with those of our shareholders. We established voluntary stock ownership guidelines for our executive officers in 2001 and for our directors in 2002. The guidelines encourage share ownership by our executive officers and directors in an amount having a market value of a multiple of the individual’s annual base salary, in the case of our executive officers, or annual retainer, in the case of our directors, to be achieved within five years of becoming an executive officer or director. The following table sets forth the number of shares of our common stock beneficially owned Amount and Nature of Beneficial Ownership Name of Beneficial Owner Shares of Common Stock Held (#)(1) Shares Underlying Options Exercisable Within 60 Days (#)(2) Phantom Stock Units (#)(3) Total (#) % of Common Stock Outstanding Bernard P. Aldrich 1,000 20,574 4,618 26,192 * Patricia A. Beithon 81,908 21,250 — 103,158 * Michael B. Clauer 60,060 44,344 — 104,404 * Joseph T. Deckman 145,827 143,250 — 289,077 1.0 Robert L. Edwards 10,000 — — 10,000 * Donald W. Goldfus 495,992 (4)(5) 176,574 — 672,566 2.4 Barbara B. Grogan 4,132 28,574 — 32,706 * Harry A. Hammerly 18,287 38,954 — 57,241 * J. Patrick Horner 10,773 24,574 15,043 50,390 * Russell Huffer 212,736 (6) 281,525 — 494,261 1.8 James L. Martineau 237,964 20,574 — 258,538 * Stephen C. Mitchell 8,132 28,574 — 36,706 * Laurence J. Niederhofer 420,914 (5)(7) 41,306 — 462,220 1.7 Ray C. Richelsen — 16,574 2,331 18,905 * Michael E. Shannon 2,000 28,574 13,239 43,813 * Larry D. Stordahl 84,852 (8) 95,000 — 179,852 * All directors and executive officers 1,853,789 (5) 1,047,572 35,231 2,936,592 10.3business. In this capacity, State Street exercises sole voting power with respect to 593,337 shares, shared voting power with respect to 895,956 shares, sole investment power with respect to 1,514,793 shares and shared investment power with respect to 100 shares.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERSat March 31, 2002as of April 23, 2003, by each of our directors, each of ourdirector nominees and executive officers named in the Summary Compensation Table included in this Proxy Statementon page 16 under the caption "Executive Compensation" below,“Executive Compensation,” and by all of our directors and executive officers as a group. Amount and Nature of Beneficial Ownership Name Number of
Shares Held
(#)(1) Options
Exercisable
Within 60 Days
(#)(1) Phantom
Stock
Units (#)(2) Total (#) % of
Outstanding
Shares Bernard P. Aldrich 1,000 12,000 762 13,762 (3 ) Patricia A. Beithon 40,990 10,000 — 50,990 (3 ) Michael B. Clauer 14,265 20,000 — 34,265 (3 ) Joseph T. Deckman 114,560 130,000 — 244,560 (3 ) Donald W. Goldfus 630,555 (4)(5) 168,000 — 798,555 2.8 Barbara B. Grogan 3,455 20,000 — 23,455 (3 ) Harry A. Hammerly 16,967 30,380 — 47,347 (3 ) J. Patrick Horner 10,757 16,000 13,798 40,555 (3 ) Russell Huffer 122,614 297,500 — 420,114 1.5 James L. Martineau 235,173 12,000 — 247,173 (3 ) Stephen C. Mitchell 7,455 20,000 — 27,455 (3 ) Laurence J. Niederhofer 426,981 (5)(6) 32,732 — 459,713 1.6 Ray C. Richelsen — 8,000 — 8,000 (3 ) Michael E. Shannon 2,000 20,000 11,330 33,330 (3 ) Larry D. Stordahl 44,667 (7) 60,000 — 104,667 (3 ) All Directors and Executive Officers as a Group (17 persons) 1,694,757 882,987 25,890 2,603,634 8.9
as a group (18 persons) (1)* Indicates less than 1%. (1) Unless otherwise indicated, the individuals listed in the table have sole voting and investment power with respect to the shares owned by them. The number of shares indicated includes shares issued pursuant to our 1987 Partnership Plan, our employee stock purchase plan, our 401(k) savings plan and our defined contribution pension plan. The number of stock options indicated are exercisable currently or within 60 days of March 31, 2002.(2)Phantom stock units, each representing the value of one share of our common stock, are attributable to accounts in our Deferred Compensation Plan for Non-Employee Directors. The participants in the plan do not have voting or investment power with respect to these units.(3)Less than 1%.(4)Includes 120,000 shares held by Mr. Goldfus' wife, as to which he disclaims beneficial ownership.(5)Shares held by the Russell H. Baumgardner Trust dated June 6, 1986 are deemed to be beneficially owned by Messrs. Goldfus and Niederhofer because they share voting and investment power with respect to the shares owned by them. The number of shares indicated includes shares issued to the named individual pursuant to our Amended and Restated 1987 Partnership Plan, our employee stock purchase plan and our 401(k) retirement plan.(2) Includes shares underlying stock options exercisable currently or within 60 days of April 23, 2003. (3) Phantom stock units, each representing the value of one share of our common stock, are attributable to accounts in our Deferred Compensation Plan for Non-Employee Directors. The participants in the plan do not have voting or investment power with respect to these units. (4) Includes 120,000 shares held by Mr. Goldfus’ wife, as to which he disclaims beneficial ownership. (5) Excludes shares held by the Russell H. Baumgardner Trust dated June 6, 1986, which are deemed to be beneficially owned by Messrs. Goldfus and Niederhofer because they share voting and investment power as
trustees of the Trust. As of March 31, 2002, 1,978,645April 23, 2003, 1,773,388 shares were held by the Trust. If these shares were included in thisthe table, the number of shares held by each of Messrs. Goldfus and Niederhofer would be increased by 1,978,645,1,773,388, and the percent of outstanding shares would be as follows: Mr. Goldfus, 9.7%8.9%; Mr. Niederhofer, 8.6%8.1%; and all directors and executive officers as a group, 15.7%16.5%.
3
| (6) | Includes 53,910 shares held by Mr. Huffer’s wife, as to which he disclaims beneficial ownership. |
| (7) | Includes 60,448 shares held by Mr. Niederhofer’s wife, as to which he disclaims beneficial ownership. |
| (8) | Includes 500 shares held by Mr. Stordahl’s wife, as to which he disclaims beneficial ownership. |
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and Our We have no reason to expect that any of the nominees will fail to be a candidate at the annual meeting and, therefore, do not have in mind any substitute or substitutes for any of the nominees. If any of the nominees should be unable to serve as a director, The (7)Includes 500 shares held by Mr. Stordahl's wife, as to which he disclaims beneficial ownership.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEspecifiedexecutive officers and persons who own more than 10% of a registered class of equityour securities of the Company to file initial reports of ownership of those securities on Form 3 and reports of changes in ownership on Form 4 or Form 5 with the Securities and Exchange Commission. Specific due dates for these reports have been established by the Securities and Exchange Commission, and we are required to disclose in this proxy statement any failure to timely file the required reports by these dates. Based solely on our review of the copies of these reports received by us orand written representations from reporting persons,our directors and executive officers, we believe that duringour executive officers and directors complied with all Section 16(a) filing requirements for the fiscal year ended March 2, 2002, all Section 16(a) filing requirements applicable1, 2003, except for our directors who participated in our Deferred Compensation Plan for Non-Employee Directors. Pursuant to our officers,the terms of the plan, phantom stock units are allocated monthly to bookkeeping accounts established for participating directors under the Deferred Compensation Plan, in lieu of the directors’ annual retainer and greater-than-10% shareholders were compliedmeeting fees, and additional phantom stock units are allocated in connection with in a timely manner.the reinvestment of quarterly dividend equivalents. Directors do not have any control over the timing of the allocation of these units. We elected to report these transactions at one time at the end of the fiscal year rather than within two business days of each allocation, which has been required since August 29, 2002. Accordingly, Mr. Aldrich filed 11 late reports, Mr. Horner filed two late reports, Mr. Richelsen filed 11 late reports and Mr. Shannon filed eight late reports.ItemPROPOSAL 1: ELECTION OF DIRECTORSArticlesarticles of Incorporationincorporation provide that the Board of Directors will be divided into three classes of directors of as nearly equal size as possible andpossible. Our articles further provide that the total number of directors will be determined exclusively by the Board.Board of Directors. The term of each class of director is three years, and the term of one class expires each year in rotation. Currently, there are 1112 directors. TheAt this year’s annual meeting, the terms of our Class II directors will expire. Messrs. Hammerly and Niederhofer, who currently serve as Class II directors with terms expiring at the upcoming annual meeting, will retire at the upcoming annual meeting. In connection with their retirements, our Board of Directors has determined to decrease the number of directors in Class II from five to three. The number of directors in Class I will remain at three, and the number of directors consisting of Barbara B. Grogan, J. Patrick Hornerin Class III will remain at four. Messrs. Aldrich, Edwards and Stephen C. Mitchell, expire atHuffer are the 2002 Annual Meeting of Shareholders. Ms. Grogan and Messrs. Horner and Mitchellcurrent Class II directors who have been membersnominated for re-election to the Board. Mr. Edwards was appointed as a Class II director by the Board on October 31, 2002, effective as of January 16, 2003. Each of the Board since 1996, 1999 and 1996, respectively, and were last electednominees has agreed to the Board at the 1999 Annual Meeting of Shareholders.serve as a director if elected. The terms of the Class II and Class III directors expire at the 2003 and 2004 Annual Meetings of Shareholders, respectively. The affirmative vote of a majority of the shares of common stock of the Company present in person or by proxy and entitled to voteelected at the annual meeting is necessary to elect each nominee.will serve until the 2006 Annual Meeting of Shareholders or until their successors are elected and qualified.(which event is not anticipated), proxies will be voted for a substitute nominee or nominees in accordance with the best judgment of the person or persons acting under the proxies.following table sets forth informationBoard of Directors recommends that you vote FOR the three Class II nominees for director. Unless authority for one or more of the nominees is withheld, proxies will be voted FOR the election of each of Messrs. Aldrich, Edwards and Huffer for a three-year term expiring at the 2006 Annual Meeting of Shareholders. The affirmative vote of the holders of a majority of the shares of our common stock present in person or by proxy and entitled to vote at the annual meeting is required to elect each nominee.
The nominees for election as to each nominee fordirectors and the office of director, as well as for all other directors whose terms of office will continue after the annual meeting have provided the following information about themselves.
Name and Principal Occupation | Age | Director Since | Term Expires | |||
Bernard P. Aldrich (Class II) | 53 | 1999 | 2003 | |||
Robert L. Edwards (Class II) | 47 | 2003 | 2003 | |||
Russell Huffer (Class II) | 53 | 1998 | 2003 | |||
Donald W. Goldfus (Class III) | 69 | 1964 | 2004 | |||
James L. Martineau (Class III) | 62 | 1973 | 2004 |
Name and Principal Occupation Age Director Since Term Expires Ray C. Richelsen (Class III) 61 2000 2004 Michael E. Shannon (Class III) 66 1998 2004 Barbara B. Grogan (Class I) 55 1996 2005 J. Patrick Horner (Class I) 53 1999 2005 Stephen C. Mitchell (Class I) 59 1996 2005
Retired Executive Vice President, Transportation, Graphics and Safety Markets of 3M Company, an industrial, consumer and health care products manufacturer, a position he held from 1999 to 2000. Executive Vice President, Transportation, Safety and Chemical Markets of 3M Company from 1998 to 1999. Various senior management positions with 3M from 1975 through 1998 and other positions with 3M from 1963 to 1974. Mr. Richelsen is also a director of Banta Corporation.
President of MEShannon & Associates, Inc., a consulting firm specializing in corporate finance and investments, since 2000. Chairman of Ecolab Inc., a developer and marketer of premium cleaning, sanitizing and maintenance products and services, from 1996 through 1999. Chief Administrative Officer of Ecolab from 1992 through 1999 and Chief Financial Officer of Ecolab from 1984 through 1999. Mr. Shannon is also a director of CenterPoint Energy, Inc., Clorox Company and NACCO Industries, Inc.
Chairperson and President of Western Industrial Contractors, a construction company specializing in machinery erection and installation, since 1982. Ms. Grogan is also a director of Deluxe Corporation and Pentair, Inc.
Chairman of The Horner Group, an information technology consulting firm, since 1997. President and a director of Management Support Technologies, the lead consulting unit of Condor Technology Solutions, an information technology services company, from 1997 through 1998. Senior Vice President of Intersolv Corporation, an information technology services company, from 1995 to 1997. President, Chief Operating Officer and a director of Perot Systems Corporation, an information technology services company from 1988 to 1992.
President and Chief Operating Officer of The Knight Group, LLC, a privately held professional services company, since 2001. President and Chief Operating Officer of Lester B. Knight & Associates, also a privately held professional services company, from 1975 to 2001.
INFORMATION REGARDING THE BOARD OF DIRECTORS
The Board of Directors conducts its business through meetings of the Board and four standing committees: Audit, Compensation, Corporate Governance and Finance. Each committee member identified below has served on the indicated committee since the 2002 Annual Meeting of Shareholders, is held.
| Name and Principal Occupation | Age | Director Since | Term Expires | |||
|---|---|---|---|---|---|---|
| Barbara B. Grogan (Class I) Chairman of the Board and President, Western Industrial Contractors, a construction company specializing in machinery erection and installation, since 1982. Ms. Grogan is also a director of Deluxe Corporation and Pentair, Inc. Committees: Audit and Corporate Governance | 54 | 1996 | 2002 |
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J. Patrick Horner (Class I) Chairman of The Horner Group, an information technology consulting firm, since 1997. President and a director of Management Support Technologies, the lead consulting unit of Condor Technology Solutions, an information technology services company, from 1997 through 1998. Senior Vice President of Intersolv Corporation, also an information technology services company, from 1995 to 1997. Prior to joining Intersolv, Mr. Horner held various positions related to information technology services, including five years as President and Chief Operating Officer and a director of Perot Systems Corporation. Committees: Audit and Finance | 52 | 1999 | 2002 | |||
Stephen C. Mitchell (Class I) President and Chief Operating Officer of The Knight Group, LLC, a privately held, professional services company, since 2001. President and Chief Operating Officer of Lester B. Knight & Associates, also a privately held, professional services company, from 1975 to 2001. Committees: Compensation and Corporate Governance | 58 | 1996 | 2002 | |||
Bernard P. Aldrich (Class II) President and Chief Executive Officer of Rimage Corporation, a leading designer and manufacturer of on-demand publishing and duplicating systems for CD-recordable and DVD-recordable media, since December 1996. President of several manufacturing companies controlled by Activar, Inc., an industrial plastics and construction supply company, from January 1995 to December 1996. Mr. Aldrich is also a director of Rimage Corporation. Committees: Audit and Compensation | 52 | 1999 | 2003 | |||
Harry A. Hammerly (Class II) Retired Executive Vice President, International Operations, of 3M Company, an industrial, consumer and health care products manufacturer, a position he held from 1991 to 1995. Prior to that, various senior management positions with 3M since 1973 and other positions with 3M since 1955. Mr. Hammerly is also a director of Milacron, Inc. and BMC Industries, Inc. Committee: Audit | 68 | 1994 | 2003 | |||
Russell Huffer (Class II) Chairman of the Board of Directors of the Company since June 1999 and Chief Executive Officer and President of the Company since January 1998. Prior to 1998, various senior management positions with the Company or our subsidiaries since 1986. Mr. Huffer is also a director of Hutchinson Technology Incorporated. | 52 | 1998 | 2003 | |||
Laurence J. Niederhofer (Class II) Retired Chief Executive Officer of the Company's Wausau Architectural Products Group, a position he held from 1968 to 1993. Committees: Corporate Governance and Finance | 69 | 1964 | 2003 | |||
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Donald W. Goldfus (Class III) Retired Chairman of the Board of Directors of the Company, a position he held from 1988 to June 1999. Chief Executive Officer of the Company from 1986 to January 1998. President of the Company from 1995 to January 1998. Prior to that, various senior management positions with the Company. Mr. Goldfus is also a director of G&K Services, Inc. and Lifetouch, Inc. Committee: Corporate Governance | 68 | 1964 | 2004 | |||
James L. Martineau (Class III) Retired Executive Vice President of the Company, a position he held from 1996 to 1998. Prior to that, various senior management positions with the Company since 1971. Mr. Martineau is also a director of Pinnacle Entertainment, Inc. Committee: Finance | 61 | 1973 | 2004 | |||
Ray C. Richelsen (Class III) Retired Executive Vice President, Transportation, Graphics and Safety Markets of 3M Company, an industrial, consumer and health care products manufacturer, a position he held from 1999 to 2000. Various senior management positions with 3M from 1975 through 1998 and other positions with 3M from 1963 to 1974. Mr. Richelsen is also a director of Banta Corporation and Rogers Group, Inc. Committee: Compensation | 60 | 2000 | 2004 | |||
Michael E. Shannon (Class III) President of MEShannon & Associates, Inc., a consulting firm specializing in corporate finance and investments, since 2000. Chairman of the Board of Ecolab Inc., a developer and marketer of premium cleaning, sanitizing and maintenance products and services, from 1996 through 1999. Chief Administrative Officer of Ecolab from August 1992 through 1999, Chief Financial Officer of Ecolab from 1984 through 1999. Mr. Shannon is also a director of Minnesota Life Insurance Company, Clorox Company, Pressure Systems, Inc. and RPSI, Inc. Committees: Compensation, Corporate Governance and Finance | 65 | 1998 | 2004 |
with the exception of Mr. Edwards, who was appointed to the Audit and Finance Committees in January 2003. Each committee member will continue to serve on the indicated committee through the 2003 Annual Meeting of Shareholders. The Board of Directors held five meetings during the last fiscal year. The Company has standing Audit, Compensation, Corporate Governance and Finance Committees. The members of the various committees for fiscal 2002 are noted in the previous table. Each member has served on the listed committee since the 2001 Annual Meeting of Shareholders and will continue to serve on the listed committee through the 2002 Annual Meeting of Shareholders. Each director attended more than 75% of the total meetings of the Board and Board committees ofon which the Board of which they were membersdirector served during fiscal 2002.2003.
The Audit Committee is responsible for providing oversight of the financial functions of the Company, including financial reporting and both internal and external auditing efforts (including recommendation of the independent auditors to the Board of Directors), our program to ensure ethical business practices, our system of financial controls and our risk management program. The Audit Committee operates under a written charter. The Audit Committee met eight times during fiscal 2002.
Audit Committee | ||||
Members: | Bernard P. Aldrich Robert L. Edwards Barbara B. Grogan | J. Patrick Horner Michael E. Shannon | ||
The Audit Committee oversees Apogee’s financial reporting process (including our system of financial controls and internal and external auditing efforts), oversees our program to ensure ethical business practices, and assesses and establishes policies and procedures to manage our business and financial risk. The Audit Committee also appoints our independent auditors. The Audit Committee met ten times during fiscal 2003. | ||||
Compensation Committee | ||||
Members: | Bernard P. Aldrich Stephen C. Mitchell | Ray C. Richelsen Michael E. Shannon | ||
The Compensation Committee determines the salary and other compensation of all of our elected officers and senior management. The Compensation Committee also administers our 2002 Omnibus Stock Incentive Plan, 1997 Omnibus Stock Incentive Plan, 1987 Stock Option Plan, Amended and Restated 1987 Partnership Plan and Executive Management Incentive Plan. The Compensation Committee met five times during fiscal 2003. | ||||
Corporate Governance Committee | ||||
Members: | Donald W. Goldfus Barbara B. Grogan Stephen C. Mitchell | Laurence J. Niederhofer Michael E. Shannon | ||
The Corporate Governance Committee periodically assesses the organization’s adherence to our mission and principles, reviews our organizational structure and succession plans, makes recommendations to the Board regarding the composition and responsibilities of Board committees, determines the compensation for directors and annually conducts a review of the performance of Board committees and the Board as a whole. Members of the Corporate Governance Committee also annually review and evaluate the performance of the Chief Executive Officer. In addition, the Corporate Governance Committee recommends new director nominees to the Board and will consider qualified nominees recommended by shareholders. Any recommendations for nominees for the 2004 election of directors should be submitted in writing to our Secretary at the address indicated on the Notice of Annual Meeting of Shareholders no later than February 18, 2004. Recommendations must include the information specified in our bylaws, which will enable the Corporate Governance Committee to evaluate the qualifications of the recommended nominee. You may request a copy of our bylaws by contacting our Secretary at the address indicated on the Notice of Annual Meeting of Shareholders. The Corporate Governance Committee met three times during fiscal 2003. | ||||
The Compensation Committee determines the salary and other compensation of all of our elected officers and senior management. The Compensation Committee also administers our 1997 Omnibus Stock Incentive Plan and the 1987 Partnership Plan and will administer our 2002 Omnibus Stock Incentive Plan
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and our Executive Management Incentive Plan, if such plans are approved by the shareholders. The Compensation Committee met three times during fiscal 2002.
The Finance Committee reviews significant policies and proposals of management and makes recommendations to the Board with respect to our financial condition and long-range financial objectives, our debt ratio and other financial coverage ratios, appropriate debt limits, the timing and adequacy of proposed financing vehicles, quarterly dividend declarations and the impact of proposed significant transactions on our annual capital budget and financial condition. The Finance Committee met five times during fiscal 2002.
Finance Committee | ||||
Members: | Robert L. Edwards Harry A. Hammerly J. Patrick Horner | James L. Martineau Laurence J. Niederhofer | ||
The Finance Committee reviews significant policies and proposals of management and makes recommendations to the Board of Directors with respect to our financial condition and long-range financial objectives, our debt ratio and other financial coverage ratios, appropriate debt limits, the timing and adequacy of proposed financing vehicles, quarterly dividend declarations, the impact of proposed significant transactions on our annual capital budget and financial condition, and oversees our risk-related insurance program. The Finance Committee met three times during fiscal 2003. | ||||
The Corporate Governance Committee periodically assesses the organization's adherence to our mission and principles, reviews our organizational structure and succession plans, makes recommendations to the Board regarding the composition and responsibilities of Board committees and annually conducts a review of the performance of individual directors and the Board as a whole. Members of the Corporate Governance Committee also annually review and evaluate the performance of the Chief Executive Officer. The Corporate Governance Committee also recommends new director nominees to the Board and will consider qualified nominees recommended by shareholders. Any recommendations for nominees for the 2003 election of directors should be submitted in writing to the Secretary of the Company at the address indicated on the Notice of Annual Meeting of Shareholders no later than February 18, 2003. Recommendations must include the information specified in our Bylaws, which will enable the Corporate Governance Committee to evaluate the qualifications of the recommended nominee. The Corporate Governance Committee met three times during fiscal 2002.
Director Compensation of Directors
Annual Retainer
Our non-employee directors receive an annual retainer of $18,000, plus a fee of $1,000 for each meeting of the Board of Directors or its committees attended.attended either in person or by telephone. The meeting fee for a committeethe chair of the Audit Committee is $2,500 for each Audit Committee meeting chaired. The meeting fee for the chair of the Compensation, Corporate Governance and Finance Committees is $1,500 for each such committee meeting chaired. In the past, non-employeeNon-employee directors also have received automatic, annual stock option grants to purchase 4,000 shares of our common stock under the 1997 Omnibus Stock Incentive Plan. These stock options vest in full six months after the date of grant and have an exercise price equal to the fair market value of our common stock on the date of grant. The table captioned "Security Ownership of Directors and Executive Officers" on page 3 includes the options granted to the non-employee directors in fiscal 2002. The per share exercise price of the options granted in fiscal year 2002 is $10.94.
If the 2002 Omnibus Stock Incentive Plan proposed in Item 2 of this Proxy Statement is approved by shareholders, all future stock option grants for non-employee directors will be granted under the 2002 Omnibus Stock Incentive Plan, and no additional grants will be made under the 1997 Omnibus Stock Incentive Plan. The 2002 Omnibus Stock Incentive Plan provides that, commencing with the 2002 annual meeting, non-employee directors will be awardedreceive both an automatic fixed grant of options to purchase 4,000 shares of our common stock and a variable, dollar-denominated stock option grant such that the total number of shares subject to both types of options will provide our non-employee directors with total dollar-denominated, equity-based compensation equal to the dollar-denominated, equity-based compensation received by non-employee directors in the fiftieth50th percentile of a comparator group of public companies. TheHowever, the total number of shares subject to both types of options granted in any one year may not exceed 10,000 shares per non-employee director. These stock options vest in full six months after the date of grant and have an exercise price of such options will be equal to the fair market value of our common stock on the date of grant,grant. The table captioned “Security Ownership of Directors and Executive Officers” on page 6 includes the options will vest in full six months after the date of grant. For more details regarding the proposed 2002 Omnibus Stock Incentive Plan and the awards to be granted to the non-employee directors under that plan, please see Item 2in fiscal 2003. The per share exercise price of this Proxy Statement.the options granted in fiscal 2003 is $13.10.
Employee Stock Purchase Plan
Non-employee directors also may elect to participate in our Employee Stock Purchase Plan. Underemployee stock purchase plan. During fiscal 2003, under the plan, participants maycould purchase our common stock by contributing up to $200 per week, with the CompanyApogee contributing an amount equal to 15% of each participant'sparticipant’s weekly contribution. We amended our employee stock purchase plan effective as of May 1, 2003 to increase the amounts participants could contribute to the plan to $500 per week. For fiscal 2002, the Company2003, we contributed an aggregate of $2,760$2,880 to the Employee Stock Purchase Planemployee stock purchase plan for the benefit of all non-employee directors as a group.
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Deferred Compensation Plan
Non-employee directors also may elect to participate in our Deferred Compensation Plan for Non-Employee Directors. This plan was adopted by the Board of Directors in October 1998 and approved at the 1999 Annual Meeting of Shareholders to encourage the non-employee directors to continue to make contributions to the growth and profits of the CompanyApogee and to increase their ownership of shares of our common stock, thereby aligning their interests in the long-term success of the CompanyApogee with that of our other shareholders. Under the plan, participants may defer a portion of their annual retainer and meeting fees into deferred stock accounts. We will match 10% of the elected deferral. Each participating director will receivereceives a credit of shares of our common stock in an amount equal to the amount deferred divided by the fair market value of one share as of the crediting date. These accounts will also beare credited, on each dividend paymentas of the crediting date, inwith an amount equal to the dividend paid on one share of our common stock multiplied by the number of shares credited to each account. Participating directors may elect to receive the amounts credited to their accounts at a fixed date, at age 70 or following death or retirement from the Board of Directors. The amounts will be paid out in the form of shares of our common stock (plus cash in lieu of fractional
shares) either in a lump sum or in installments, and either at a fixed date, at age 70 or following death or retirement from the Board.participating director’s election. This plan is an unfunded, book-entry, "phantom“phantom stock unit"unit” plan as to which no trust or other vehicle has been established to hold any shares of our common stock. For fiscal 2002,2003, we accruedmatched an aggregate of $7,100 for the Company's 10% matching contribution$8,575 in deferrals made by all non-employee directors as a group to the Deferred Compensation Plan for Non-Employee Directors for the benefit of all non-employee directors as a group.Directors.
Until
Consulting Agreement with James L. Martineau
From July 1,1998 until July 2001, we were party to a consulting agreement effective as of July 1, 1998, with Mr. Martineau, a non-employee director, under which Mr. Martineau provided consulting and advisory services to the Company.Apogee. Mr. Martineau'sMartineau’s agreement covered three one-year terms ending July 1, 2001, and provided for the payment to Mr. Martineau of a fee of $250,000 per year, plus certain out-of-pocket expenses and other benefits, including the acceleration to July 1, 1998 of the vesting of a number of previously granted stock options, a payment of $227,200 (payable over three years) to compensate Mr. Martineau for the reduction in value of a number of stock options previously granted to him resulting from his resignation as Executive Vice President of the Company effective as of July 1, 1998, and the reimbursement of medical expenses to Mr. Martineau under our existing medical plans. Mr. Martineau agreed not to compete with the Company during the term of the consulting agreement.2001. We did not renew thisthe consulting agreement in fiscal 2002. However, pursuant to the terms of the consulting agreement, in fiscal 2003, Mr. Martineau received reimbursement of health insurance premiums paid by Mr. Martineau totaling $12,018.
Consulting Agreement with Donald W. Goldfus
We also have entered into a consulting agreement, effective as of June 28, 1999, with Mr. Goldfus, a non-employee director, under which Mr. Goldfus provides consulting and advisory services to the Company.us. Mr. Goldfus'Goldfus’s agreement will remain in effect so long as Mr. Goldfus is a member of our Board of Directors. Under the agreement, Mr. Goldfus has agreed to provide up to 10 hours of consulting services per month to the Companyus in exchange for reimbursement of certain out-of-pocket expenses, office space and related expenses.expenses (which in fiscal 2003 totaled $11,294 for rent and office expenses, $780 for parking expenses, $2,263 for office moving expenses and $2,136 for other covered expenses). For each day during the term of the agreement that Mr. Goldfus provides services to the Companyus in excess of that 10 hours, Mr. Goldfus will receive an additional fee of $1,000 per day. During fiscal 2002, the Company2003, we did not pay Mr. Goldfus any consulting fees. Mr. Goldfus has agreed not to compete with the Companyus during the term of this consulting agreement.
RecommendationEXECUTIVE COMPENSATION
The Board of Directors recommends that you vote FOR the three Class I nominees for director. Unless authority for one or more of the nominees is withheld, proxies will be voted FOR the election of each of Ms. Grogan and Messrs. Horner and Mitchell for a three-year term expiring at the 2005 Annual Meeting of Shareholders.
Compensation Committee Report
Overview and Philosophy
The compensation of executive officers is determined by the Compensation Committee of the Board of Directors. is responsible for:
| Ÿ | establishing compensation programs that comply with our compensation philosophy; |
| Ÿ | determining the compensation of Apogee’s executive officers and other members of senior management; |
| Ÿ | administering Apogee’s omnibus stock incentive plans; and |
| Ÿ | administering Apogee’s individual cash incentive plans for executive officers and other members of senior management. |
The Committee is comprised entirely of non-employee directors.operates under a written charter, which we annually review. To assist in performing itsour duties and to enhance itsour objectivity and independence, the Committee has authority to and periodically obtains advice and recommendations offrom an outside compensation consultant and reviews independent compensation data from other companies of similar size and complexity.
The Committee is composed entirely of non-employee directors, all of whom are independent in accordance with current NASDAQ listing standards. During fiscal 2003, the members of the Committee were Messrs. Aldrich, Mitchell, Richelsen and Shannon.
Philosophy
In establishing our objectives for executive compensation, the Committee desires to preserve the entrepreneurial style that we believe forms a strong component of Apogee’s history, culture and competitive advantage and to emphasize long-term business development and creation of shareholder value. Therefore, a significant portion of total compensation is performance-based.
The objectives of our executive compensation program are to:
| Ÿ | Promote the achievement of strategic objectives that the Board believes will lead to long-term growth in shareholder value; |
| Ÿ | Attract and retain high-performing executive officers by rewarding outstanding performance and offering total compensation that is competitive with that offered by similarly situated companies; and |
| Ÿ | Align the interests of executive officers with those of Apogee and our shareholders by making incentive compensation largely dependent upon the achievement by our business units or Apogee as a whole of specified performance goals. |
In fiscal year 2002,2003, with the assistance of an independent outside compensation consultant, the Committee performed a comprehensive analysis of executive compensation using independent compensation data from companies of similar size and complexity, and reviewed the Company'sour executive compensation system and practices. The Committee concluded that no major changes to the Company'sour compensation system or practices were required in order to enable the Committeemanagement to properly to perform itstheir functions for the Company.
In administering the executive compensation plans, the Committee desires to preserve the entrepreneurial style that it believes forms a strong component of the Company's history, culture and competitive advantage and to emphasize long-term business development and creation of shareholder value. Therefore, a significant portion of total compensation is performance-based.
The objectives of the executive compensation policies are to:
Base Salary
Base
The Committee annually reviews the base salaries are reviewed annually.of our executive officers. In determining an executive's annualexecutive officer’s base salary, the Committee takes into account the executive'sexecutive officer’s level of responsibility, experience and performance in relation to that of the CompanyApogee and similar companies. Base salaries generally are generally targeted to be at the median of executive base salaries for companies of similar size and complexity. Based on the results of the independent compensation survey commissioned by the Committee in fiscal 2002,2003, the base salaries of our executive officers for fiscal 20022003 generally were generally nearsomewhat above the average base salaries of executive officers in similar positions for comparable companies. It is the Committee’s policy to bring the base salaries back to the 50th percentile over time.
Annual Incentives
Executives
Executive Management Incentive Plan
At the 2002 Annual Meeting, our shareholders approved the Executive Management Incentive Plan (the “Executive MIP”), an incentive compensation program in which our executive officers may participate, at the discretion of the Committee. The Executive MIP provides participating executive officers with annual incentive awards based on the attainment of one or more predetermined, objective performance goals during a particular fiscal year. These goals are established by the Committee no later than 90 days after the beginning of a fiscal year. The goals may apply to the individual officers participating in the Executive MIP, an identifiable business unit or Apogee as a whole, or any combination thereof, and must be based on one or more of the following business criteria:
| Ÿ | earnings (whether before or after taxes); |
| Ÿ | cash flow (including free cash flow and cash flow from operating, investing or financing activities or any combination of these measures); |
| Ÿ | earnings per share (basic or diluted); and |
| Ÿ | total shareholder return or profitability, or both, as measured by one or more of the following accounting ratios: return on revenue, return on assets, return on equity, return on invested capital and return on investments. |
For our chief executive officer, the target and potential range of annual bonus awards under the Executive MIP may be between zero and 150% of the chief executive officer’s annual base compensation. For our executive vice presidents, chief financial officer and general counsel, the target and potential range may be between zero and
100% of the participant’s annual base compensation. For other participants, the Committee has discretion to establish targets and ranges. The maximum bonus that may be paid to any participant pursuant to the Executive MIP in any fiscal year is $1,500,000. The Committee has complete discretionary authority to reduce the amount of a bonus that otherwise would be payable to any participant under the Executive MIP. The incentive award is payable in the form of cash or stock. Participants are entitled to defer part or all of an annual bonus payment under Apogee’s deferred compensation plans.
For fiscal 2003, only Mr. Huffer participated in the Executive MIP, and all annual incentive awards granted to Mr. Huffer for fiscal 2003 were made under the Executive MIP. See “Chief Executive Officer Compensation” on page 15.
Individual Cash Bonus Plans
Executive officers who are not selected by the Committee to participate in the Executive MIP during a particular fiscal year may earn annual incentive compensation under individualized cash bonus plans. At the beginning of each fiscal year, the Committee develops the plan for the Company's Chairman, President and Chief Executive Officer, and reviews and approves plans presented by the Chief Executive Officerchief executive officer for the other executive officers. Each plan contains specific financial objectives, such as business unit and/or Company profitability, the profitability of Apogee as a whole, and return on invested capital, and may include specific objectives for business, organizationorganizational and personal development. For fiscal 2003, the objectives set focused primarily on savings from Six Sigma activities, employee safety metrics and revenue growth. The Committee then evaluates each executive officer with respect to his or her financial targets and non-financial performance objectives. The Committee'sCommittee’s policy is to pay a bonus to an executive officer only when the financial performance thresholds applicable to that executive officer have been met. The Committee also may reward executivesexecutive officers for meeting thetheir non-financial objectives. Exceeding all of the annual financial and non-financial objectives usually provides the executive officer with
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the opportunity to earn total cash compensation (base salary and annual incentives) in the upper quartile of that paid by companies of similar size and complexity. For fiscal 2002,2003, the range of bonus payments to executivesexecutive officers as a percentage of base pay ranged from 19%33% to 124%76%.
If the Executive Management Incentive Plan proposed in Item 3 of this Proxy Statement is approved by the shareholders, it will replace the annual incentive plans for those executive officers who participate in the Executive Management Incentive Plan. For fiscal 2003, only Mr. Huffer has been designated to participate in the Executive Management Incentive Plan, if approved by the shareholders. In that case, any annual incentive awards granted to Mr. Huffer for fiscal 2003 will be made under the Executive Management Incentive Plan.
Long-Term Incentives
Partnership Plan.Plan
To further align the interests of executive officers with those of our shareholders, eligible employees, including our executive officers, selected by the Committee also may participate in the Company'sour Amended and Restated 1987 Partnership Plan. AtUnder the Partnership Plan, prior to the beginning of each fiscal year, each participant may voluntarilyelect to defer up to 50% of his or herany annual incentive compensation (either cash or shares of our common stock) that may be earned by the participant with respect to that fiscal year, for a period of time selected by the participant (but that generally must be at least five years from the date of deferral). There is no maximum dollar limit on the amount that may be deferred each year. The deferred cash amounts are invested in shares of Companyour common stock understock. Although all shares in the Partnership Plan. The Company matchesparticipant’s account vest immediately, they are restricted in that they are held in trust for the benefit of the participant during the deferral period and may not be transferred by the participant during the deferral period.
We match 100% of the deferred amount in the form of restricted shares of Companyour common stock. The amount contributed by the participant vests immediately, but therestricted shares are restricted and are held in trust and deferred for a period of time selected by the participant (generally at least five years from the date of deferral). In fiscal 2002, the amount deferred by any individual was limited to $100,000. At the 2001 Annual Meeting of Shareholders, our shareholders approved an amendment to the Partnership Plan that eliminated this $100,000 limit on amounts deferred for fiscal years beginning after 2002.
The Company match is made in the form of restricted stock that vestsvest in equal, annual increments over periods ranging from one to 10 years, as determined by the Committee. In the table entitled "Summary“Summary Compensation Table" below,Table” on page 16, the deferred amount and the Companyour match are shown in the column labeled "Restricted“Restricted Stock Awards."” No other restricted stock grants have been made to executive officers in the three-year period covered by the Summary Compensation Table.
The Partnership Plan is described in more detail in Proposal 2 set forth in this proxy statement.
Stock Incentive Plan.Plans Executives
Executive officers are also eligible to receive grants under the Company'sour omnibus stock incentive plan, which is administered byplans. Stock options granted to our chief executive officer are based on the Committee. Nearly allBoard’s evaluation of his performance against certain agreed upon objectives. For other officers, grants are related to performance and the competitiveness of the total compensation package.
During fiscal 2003, stock option grants prior to fiscal 1999executive officers were made under the Company's 1987 Stock Option Plan. This plan expired by its terms on April 25, 1997, and no additional grants may be made thereunder. Option grants since that date have been made under the Company's shareholder-approvedboth our 1997 Omnibus Stock Incentive Plan. However, as of April 24, 2002, only 249,359 shares were available for future stock option grants under the 1997 Plan. In order for the Company to continue to award stock options as long-term incentives to key managementPlan and other employees, on April 11, 2002, the Committee recommended, and the Board of Directors adopted, the Company's 2002 Omnibus Stock Incentive Plan. This plan is being presented for approval by the shareholders at the 2002 Annual Meeting of Shareholders as Item 2 of this Proxy Statement. If Item 2 is approved by the shareholders, stock option grants to executives will be made under both theour 2002 Omnibus Stock Incentive Plan, both of which were shareholder-approved and are administered by the Committee.
Under both the 1997 and the 1997 Omnibus Stock Incentive Plan until such time as2002 plans, the shares authorized for issuance underexercise price of any options granted must equal or exceed the 1997 Omnibus Stock Incentive Plan have been exhausted. Thereafter, stock option grants to executives will be made under the 2002 Omnibus Stock Incentive Plan.
Under any of these stock incentive plans, option grants may be made only at or above current market pricesprice of our common stock so thaton the date the option is granted. As a result, the value of the options to the executive rewards will accrueofficers increases only as shareholder value increases. The options granted under the 1987 Stock Option Plan typically vested at a rate of 25% per year beginning on the grant's first anniversary, although some grants made in fiscal 1997 vested entirely from 32 to 48 months after grant. Options granted under the 1997 Omnibus Stock Incentive Planplan typically vest incrementally over three to five years from the grant date. Options granted under the 2002 plan typically vest incrementally over two to five years from the grant date. The table below entitled "Option“Option Grants in Last Fiscal 2002"
10
Year” on page 18 indicates option grants made during fiscal 20022003 to the executive officers named in the Summary Compensation Table. Option grants have generally been made to a broad base of participants that includes employees at various levels of management, both at the corporate office and at the business units.
Chief Executive Officer Compensation
Mr. Huffer assumed the position of Chief Executive Officer in January 1998. His base salary was adjustedincreased by the Committee in April 2001May 2002 to $580,000 to reflect his successful performance and make his salary more competitive with$600,000. Annually, the salaries ofBoard analyzes our chief executive officers of comparable companies.officer against agreed-upon objectives. This evaluation is a primary criterion used by the Committee in determining the appropriate pay level for our chief executive officer. His base salary leaves Mr. Huffer slightly belowat the median base pay level for chief executive officers of similar companies, as determined by the recent survey commissioned from our independent outside compensation consultant.companies. As previously noted, Mr. Huffer participated in the Executive MIP for fiscal 2003, and he met or exceeded all of the financial and non-financial performance targets established at the beginning of fiscal 20022003 for determination of his annual incentive bonus award.award under the Executive MIP. For fiscal 2003, the performance targets established were based on earnings per share and return on invested capital. Accordingly, the Committee awarded Mr. Huffer a bonus of $722,000$452,896 under his annual incentive plan.the Executive MIP. The sum of Mr. Huffer'sHuffer’s base salary and annual incentive bonus is in the topthird quartile of compensation for similar officers in comparable companies as determined by the independent compensation consultant market survey. Prior to fiscal 2002,2003, Mr. Huffer elected to defer under our Partnership Plan 50% of any potential bonus received under the 1987 Partnership Plan (subjectannual incentive compensation earned by him with respect to the $100,000 limitation for fiscal 2002). Therefore, the accompanying Summary Compensation Table reflects a cash bonus of $622,000.2003. The deferred portion of Mr. Huffer'sHuffer’s bonus, as well as the Companyour match described above under “Partnership Plan,” are reported in the Restricted Stock Award column in that table.the Summary Compensation Table, with the remainder of his annual incentive compensation reported in the Bonus column of the Summary Compensation Table.
In fiscal 2002,
Mr. Huffer was granted stock options in April 2002 and June 2002 to purchase 80,000an aggregate of 8,010 and 71,990 shares of the Company'sour common stock, at $8.60respectively. The exercise price of the April option grant is $12.84 per share, and the exercise price of the June option grant is $13.10 per share, in each case representing the fair market value of our common stock on the date of grant. The Committee determined that this grant would be appropriate based on Mr. Huffer's successful performance and the desire of the Committee to provide a total compensation package competitive with chief executive officers of similar companies. ThisApril option was granted under the terms of the 1997 Omnibus Stock Incentive Plan. In April 2002, Mr. Huffer was granted stock options to purchase 8,010 shares of our common stock at $12.84 per share,Plan, and the fair market value of our common stock on the date of grant. ThisJune option was granted under the terms of the 19972002 Omnibus Stock Incentive Plan. During the second quarter of fiscal 2003, the Committee intends to grant Mr. Huffer an option for approximately 71,990 additional shares at the fair market value of our common stock on the date of grant. This option, if granted, will be granted under the terms of our 1997 Omnibus Stock Incentive Plan or our 2002 Omnibus Stock Incentive Plan, if approved, as determined by the Committee. The Committee determined that these two grants would bewere appropriate, when combined with the annual bonus targets established for Mr. Huffer for fiscal 2003, to providebased on the Board’s annual evaluation of Mr. Huffer with the right incentives to lead the Company to achieve necessary improvements in operating and financialagainst his agreed upon performance which the Board is expecting in fiscal 2003.objectives. In making these decisions,grants, the Committee took into consideration that Mr. Huffer will only receive benefitsbenefit from this grantthe options if he achieves significant improvements for the Company,Apogee, and that Mr. Huffer'sHuffer’s total compensation will be competitive with chief executive officers of similar companies.
§Section 162(m) Policy
The Committee believes that compensation provided to the Company's Chief Executive Officer in fiscal 2002 will exceed $1,000,000, as determined in accordance with Section 162(m) of the U.S. Internal Revenue Code, as a result of the payment in fiscal 2002 of compensation deferred by the Chief Executive Officer in prior fiscal years.
Under Section 162(m) of the U.S. Internal Revenue Code, we must meet specified requirements related to Companyour performance and shareholder approval of certain compensation arrangements in order for the Companyus to fully deduct compensation in excess of $1,000,000 paid to any executive officer named in the Summary Compensation Table. The Committee believes that certainExecutive MIP was approved by shareholders in 2002 and includes specific performance criteria; therefore, annual incentive awards granted under the Executive MIP are deemed to meet the requirements of Section 162(m) for deducting compensation received by the Chief Executive Officer in fiscal 2002 in excess of the $1,000,000 limit will not be fully deductible by the Company. The cost of the lost deduction is not material to the Company. If the Executive Management
11
Incentive Plan proposed in Item 3 of this Proxy Statement is approved by the shareholders, then the Committee expects that all compensation received by the Chief Executive Officer in fiscal 2003 in excess of the $1,000,000 limit will be fully deductible by the Company.$1,000,000. The Committee reservesintends to continue its practice of paying competitive compensation to attract and retain executive officers to manage our business in the rightbest interests of Apogee and our shareholders, and we therefore may choose to provide nondeductiblenon-deductible compensation to our executive officers if it deems itwe deem such compensation to be in the best interests of the CompanyApogee and our shareholders.
The Committee believes the executive compensation policies and actions reported above reflect decisions which are consistent with the overall beliefs and objectives of Apogee.
Compensation Committee of the Company.Board of Directors of Apogee
Michael E. Shannon, ChairBernard P. AldrichStephen C. MitchellRay C. Richelsen
Michael E. Shannon, Chair | Stephen C. Mitchell | |||||
Bernard P. Aldrich | Ray C. Richelsen |
The following table sets forth, with respect to our Chief Executive Officer and our four other most highly compensated executive officers, their cash and non-cash compensation for services to the Companyus in all capacities for each of the last three fiscal years.
Name and Principal Position | Fiscal Year | Annual Compensation | Long-Term Compensation | ||||||||||||||||||||||
($) | |||||||||||||||||||||||||
Bonus ($)(1) | Restricted | Securities | |||||||||||||||||||||||
All Other | |||||||||||||||||||||||||
Russell Huffer Chairman, President and | 2003 2002 | 597,231 575,539 471,346 | 226,448 622,000 510,000 | 452,896 285,330 344,000 | 80,000 80,000 125,000 | 84,952 113,311 48,135 | |||||||||||||||||||
Michael B. Clauer Executive Vice President and | 2003 2002 | 313,315 309,554 78,886 | 94,410 166,846 34,000 | 188,820 285,330 116,960 | 30,000 30,000 50,000 | 25,177 16,319 9,130 | |||||||||||||||||||
Joseph T. Deckman Executive Vice President of Apogee and President of Harmon Glass Company | 2003 2002 | 312,131 309,208 289,923 | 71,276 68,171 189,080 | 142,552 194,526 344,000 | 33,000 30,000 30,000 | 27,131 39,808 24,187 | |||||||||||||||||||
Larry D. Stordahl Executive Vice President | 2003 2002 | 268,254 265,471 248,683 | 77,087 129,136 149,248 | 154,174 285,330 344,000 | 30,000 30,000 30,000 | 26,755 123,528 18,929 | |||||||||||||||||||
Patricia A. Beithon General Counsel and | 2003 2002 | 236,908 220,281 186,058 | 73,185 105,016 92,500 | 146,370 285,330 318,200 | 20,000 10,000 10,000 | 23,252 8,465 4,218 | |||||||||||||||||||
| (1) | The bonus amounts shown reflect only the cash portion of the annual bonus awarded in each fiscal year. For individuals in the Amended and Restated 1987 Partnership Plan, the remaining bonus amounts were deferred and are shown in the Restricted Stock Awards column, as further detailed below in note 2 to this table. |
| (2) | Restricted stock awards are made pursuant to the Amended and Restated 1987 Partnership Plan. Under the Partnership Plan, participants are given the opportunity to voluntarily defer up to 50% of their annual incentive compensation. The deferred amount is invested in shares of our common stock. The purchase price for the shares is the lesser of (a) the fair market value per share at the date of the participant’s election to defer and (b) the fair market value per share at the date the participant’s incentive compensation award is approved by the Compensation Committee. We match 100% of a participant’s deferred amount in the form of restricted stock, awarding the participant that number of shares of restricted stock that is equal to the number of shares purchased with the participant’s deferred amount. The individual’s deferred amount vests |
immediately; however, the shares are held in trust and generally restricted for a period of not less than five years. The Company'sOur match is vestedvests in equal, annual installments over periods of up to 10 years, as determined by the Compensation
12
Committee. All shares issued pursuant to the Amended and Restated 1987 Partnership Plan are eligible to receive all declared dividends.
The value of each executive officer'sofficer’s restricted stock awards, as shown in the Restricted Stock Awards column, is calculated by multiplying the closing market price of our common stock on the respective dates of grant of the restricted stock awards by the number of shares awarded. The dates of grant for fiscal 2003, 2002 2001 and 20002001 were April 10, 2003, April 10, 2002 and April 11, 2001, and April 12, 2000, respectively. Because the closing market price of our common stock on the date of grant of the awards may be higher than the actual purchase price for the shares, as described above, the value shown in the Restricted Stock Awards column may be higher than the aggregate of the participant'sparticipant’s deferred amount and the value of the Companyour match.
For each officer listed in the Summary Compensation Table, the total number of restricted shares held in trust pursuant to deferrals and matching awards under the Partnership Plan at the end of fiscal 20022003 and the dollar value of those shares as of March 2, 2002,1, 2003, the last day of fiscal 2002,2003, are listed below. The value of the shares is calculated by multiplying the number of shares in each account by the closing price of our common stock on the NasdaqNASDAQ National Market on March 1, 2002February 28, 2003 ($11.30)8.17), the last trading day of fiscal 2002.2003.
| | | Shares Acquired with: | | |||||
|---|---|---|---|---|---|---|---|---|
| Officer | Years of Participation (#) | Deferred Amount (#) | Company Match (#) | Aggregate Value ($) | ||||
| Russell Huffer | 14 | 37,866 | 45,304 | 748,530 | ||||
| Michael B. Clauer | 2 | 6,918 | 6,800 | 123,462 | ||||
| Joseph T. Deckman | 5 | 62,011 | 51,091 | 1,017,918 | ||||
| Larry D. Stordahl | 3 | 20,345 | 20,000 | 363,105 | ||||
| Patricia A. Beithon | 2 | 18,818 | 18,500 | 335,862 | ||||
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Shares Acquired with: | ||||||||
Officer | Years of Participation (#) | Deferred Amount (#) | Company Match (#) | Aggregate Value ($) | ||||
Russell Huffer | 15 | 41,220 | 49,395 | 740,325 | ||||
Michael B. Clauer | 3 | 18,097 | 17,231 | 288,630 | ||||
Joseph T. Deckman | 6 | 69,850 | 52,077 | 996,144 | ||||
Larry D. Stordahl | 4 | 31,575 | 28,254 | 488,803 | ||||
Patricia A. Beithon | 3 | 30,042 | 27,761 | 472,251 | ||||
| (3) | Represents the following amounts paid under (a) our 401(k) retirement plan and (b) our employee stock purchase plan, both of which are applicable to executive officers on the same basis as all eligible employees, and (c) contributions and interest related to the Executive Supplemental Plan (also called the “Restoration Plan”), which is designed to allocate to executive officers amounts not eligible for contributions under the qualified plans because of limitations imposed by the Internal Revenue Code: for Mr. Huffer, (a) $11,772, (b) $1,620 and (c) $71,560; for Mr. Clauer, (a) $8,417, (b) $810 and (c) $15,950; for Mr. Deckman, (a) $8,941, (b) $1,620 and (c) $16,570; for Mr. Stordahl, (a) $9,077, (b) $1,620 and (c) $16,059; and for Ms. Beithon, (a) $9,107, (b) $1,620 and (c) $12,525. The fiscal 2002 amounts for Messrs. Huffer and Stordahl also include $79,782 and $109,545, respectively, for relocation expenses. The fiscal 2002 and 2001 amounts for Mr. Clauer include $12,794 and $9,130, respectively, for commuting expenses. |
| (4) | Mr. Clauer joined us in November 2000. |
Stock Options The following tables summarize option grants and exercises during fiscal Individual Grants Name Number of Securities Underlying Options Granted (#) % of Total Options Granted to Employees in Fiscal Year Exercise Price ($/Share)(1) Expiration Date Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term 5% ($) 10% ($) Russell Huffer 8,010(2) 71,990(3) 1.5 13.8 12.84 13.10 4/10/12 6/18/12 64,681 593,091 163,914 1,503,009 Michael B. Clauer 10,516(2) 19,484(3) 2.0 3.7 12.84 13.10 4/10/12 6/18/12 84,917 160,519 215,196 406,787 Joseph T. Deckman 10,899(2) 22,101(3) 2.1 4.2 12.84 13.10 4/10/12 6/18/12 88,010 182,080 223,033 461,425 Larry D. Stordahl 10,611(2) 19,389(3) 2.0 3.7 12.84 13.10 4/10/12 6/18/12 85,684 159,737 217,140 404,804 Patricia A. Beithon 19,447(2) 553(3) 3.7 0.1 12.84 13.10 4/10/12 6/18/12 157,035 4,556 397,957 11,546 Name Shares Acquired on Exercise (#) Value Realized ($)(1) Number of Securities Underlying Unexercised Options at Fiscal Year-End (#) Exercisable/Unexercisable Value of Unexercised In-the-Money Options at Fiscal Year-End ($) Exercisable/Unexercisable(2) Russell Huffer 107,225 815,815 190,275/222,500 0/209,844 Michael B. Clauer 3,156 26,875 29,344/77,500 51,497/58,938 Joseph T. Deckman 15,000 117,655 115,000/75,500 0/50,363 Larry D. Stordahl — — 67,500/72,500 50,363/50,363 Patricia A. Beithon — — 11,250/33,750 16,788/16,788 20022003 to or by the executive officers named in the Summary Compensation Table and the value of options held by these executive officers at the end of fiscal 2002.2003. No stock appreciation rights have been granted to, or were held by, any of the named executive officers as of March 2, 2002.1, 2003.
Option Grants in Last Fiscal 2002
Year Individual Grants Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term Number of
Securities
Underlying
Options
Granted (#) % of Total
Options
Granted to
Employees in
Fiscal Year Name Exercise or
Base Price
($/Share)(1) Expiration
Date 5% ($) 10% ($) Russell Huffer 80,000 (2) 15.5 8.60 4/11/11 432,676 1,096,493 Michael B. Clauer 30,000 (2) 5.8 8.60 4/11/11 162,254 411,185 Joseph T. Deckman 30,000 (2) 5.8 8.60 4/11/11 162,254 411,185 Larry D. Stordahl 30,000 (2) 5.8 8.60 4/11/11 162,254 411,185 Patricia A. Beithon 10,000 (2) 1.9 8.60 4/11/11 54,085 137,062 (1)The exercise price for all stock option grants is the fair market value of our common stock on the date of the grant.(2)Each of these options was granted on April 11, 2001. Each option vests in equal, annual increments on the first four anniversaries of the date of grant.(1) The exercise price for all stock option grants is the fair market value of our common stock on the date of the grant. (2) Each of these options was granted on April 10, 2002. Each option vests in equal, annual installments on the first four anniversaries of the date of grant. (3) Each of these options was granted on June 18, 2002. Each option vests in equal, annual installments on the first four anniversaries of the date of grant.
Aggregated Option Exercises in Last Fiscal 2002Year and Fiscal Year-End Option ValuesName Shares
Acquired on
Exercise (#) Value
Realized
($)(1) Number of
Securities Underlying
Unexercised Options
at March 2, 2002 (#)
Exercisable/Unexercisable Value of Unexercised
In-the-Money Options
at March 2, 2002 ($)
Exercisable/Unexercisable(2)Russell Huffer — — 215,000/225,000 202,734/824,203 Michael B. Clauer — — 12,500/67,500 68,594/286,781 Joseph T. Deckman 37,500 313,008 100,000/72,500 0/226,969 Larry D. Stordahl — — 40,000/70,000 48,656/226,969 Patricia A. Beithon — — 5,000/20,000 23,688/83,125 (1)The value realized is determined by subtracting the exercise price per share from the fair market value of our common stock on the date of exercise.(2)The value of the unexercised options is determined by multiplying the number of shares underlying the options by the difference between the exercise price of the options and the fair market value of our common stock as of March 1, 2002, the last trading day of fiscal 2002 ($11.30 per share).14Equity Compensation PlansThe following table summarizes, with respect to our equity compensation plans, the number of shares of our common stock to be issued upon exercise of outstanding options, warrants and other rights to acquire shares, the weighted-average exercise price of these outstanding options, warrants and rights and the number of shares remaining available for future issuance under our equity compensation plans as of March 2, 2002.Plan Category (a)
Number of Securities to Be Issued upon Exercise of Outstanding Options, Warrants and Rights (#) (b)
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($) (c)
Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (#)Equity compensation plans previously approved by security holders 2,466,879 10.46 1,499,093
Equity compensation plans not previously approved by security holders
None
Not Applicable
Not Applicable
Total
2,466,879
10.46
1,499,093 (1) The value realized is determined by subtracting the exercise price per share from the fair market value of our common stock on the date of exercise.
| (2) | The value of the unexercised options is determined by subtracting the exercise price of the options from the fair market value of our common stock as of February 28, 2003, the last trading day of fiscal 2003 ($8.17 per share). |
We adopted our Officer'sOfficer’s Supplemental Executive Retirement Plan, or "SERP,"“SERP,” effective for the calendar year 1998. The SERP is a non-qualified retirement compensation plan.plan in which each of the executive officers named in the Summary Compensation Table participates. Federal laws limit the amount of compensation that we may consider when determining benefits payable under tax-qualified retirement plans. The SERP was approved in order to provide additional retirement benefits to selected officers and management employees in excess of the benefits that can and are being provided under our other tax-qualified and non-qualified retirement plans for the purpose of providing an incentive to remain with the Company.Apogee. The SERP provides for the payment of monthly benefits at "normal“normal retirement date"date” (age 65). The benefits are determined by multiplying (a) two percent of the participant'sparticipant’s average monthly compensation for the participant’s five highest consecutive, completed calendar years of annual compensation (including salary, bonus and certain other compensation as reported on a Form W-2) during the last 10 years of employment by (b) the participant'sparticipant’s credited years of service to Apogee. If the Company,participant has less than five consecutive, completed calendar years of service, then the benefits will be based on final average monthly compensation, which amount iswill be determined by dividing (x) the participant’s aggregate compensation for all of the participant’s consecutive, completed years of service by (y) the number of months in the consecutive, completed years of service. In either case, the benefits are then offset by Social Security benefits and benefits to be received by the participant under defined contribution pension plans from contributions made by the Company.us. For purposes of this calculation,these calculations, the maximum number of years of service that will be credited to any participant is 20 years. The SERP is an unfunded obligation of the Company,Apogee, and participants in the SERP are unsecured creditors of the Company.Apogee.
The following table shows the estimated annual benefits payable to participants under the SERP upon reaching normal retirement age. The benefits in this table are computed as a single life annuity starting on the first day of the calendar month following the month in which the participant would attain age 65, offset
15
by the estimated sum of the annuity value of Companyour contributions to the defined contribution plans and the Executive Supplemental Plan (described below) and the participant'sparticipant’s Social Security benefits.
| | Estimated Annual Benefits Based on Credited Years of Service Indicated ($) (2)(3) | |||
|---|---|---|---|---|
| Final Average Compensation ($) (1) | ||||
| 10 | 20 | |||
| 200,000 | 11,000 | 33,000 | ||
| 400,000 | 40,000 | 85,000 | ||
| 600,000 | 69,000 | 137,000 | ||
| 800,000 | 98,000 | 189,000 | ||
| 1,000,000 | 128,000 | 241,000 | ||
| 1,200,000 | 157,000 | 294,000 | ||
| 1,400,000 | 186,000 | 346,000 | ||
| 1,600,000 | 215,000 | 398,000 | ||
| 1,800,000 | 244,000 | 450,000 | ||
Estimated Annual Benefits – Officer’s Supplemental Executive Retirement Plan
Years of Service ($) | ||||
Final Average Compensation ($) | 10 | 20 | ||
200,000 | 11,000 | 33,000 | ||
400,000 | 40,000 | 85,000 | ||
600,000 | 69,000 | 137,000 | ||
800,000 | 98,000 | 189,000 | ||
1,000,000 | 128,000 | 241,000 | ||
1,200,000 | 157,000 | 294,000 | ||
1,400,000 | 186,000 | 346,000 | ||
1,600,000 | 215,000 | 398,000 | ||
1,800,000 | 244,000 | 450,000 | ||
The executive officers named in the Summary Compensation Table have credited years of service under the SERP as follows: RussellMr. Huffer, 1516 years; Michael B.Mr. Clauer, one year; Joseph T.two years; Mr. Deckman, seveneight years; Larry D.Mr. Stordahl, threefour years; and Patricia A.Ms. Beithon, twothree years.
We adopted our Executive Supplemental Plan, which we refer to as the "Restoration“Restoration Plan,"” effective for calendar year 1998. The Restoration Plan is a non-qualified retirement plan. It was approved in order to provide additional retirement benefits to executive and senior officers in excess of benefits that can and are being provided
under our other tax-qualified retirement plans for the purpose of providing an incentive to remain with the Company.Apogee. The Restoration Plan provides benefits to selected individuals whose contributions to the tax-qualified retirement plans are restricted by the Internal Revenue Code. The Internal Revenue Code, which limits compensation that may be considered for qualified pension plan purposes. The Restoration Plan is designed to provide participants with retirement benefits on a non-qualified basis, so that the total Company-providedApogee-provided retirement benefits under our tax-qualified retirement plans and the Restoration Plan will be equal to the benefits participants would have received under our tax-qualified retirement and deferred compensation plans if the limitations of the Code did not apply and if the definition of compensation in the defined contribution pension plan included incentive compensation. if:
| Ÿ | the limitations of the Internal Revenue Code did not apply; and |
| Ÿ | the definition of compensation in the defined contribution pension plan included incentive compensation. |
The Restoration Plan is an unfunded obligation of the Company,Apogee, and participants are unsecured creditors of the Company.Apogee.
16
Employment Agreements Employment Agreement Effective as of July 16, 2002, Mr. Deckman entered into an employment agreement with Apogee providing for his continued services through July 17, 2004. Under the agreement, he will serve as Executive Vice President of Apogee and as President of Harmon Glass Company, our wholly owned subsidiary, for a term ending on July 17, 2004. The agreement provides for an annual base salary of $313,300 and entitles Mr. Deckman to participate in all Apogee employee benefit plans or programs to the extent that he is eligible under such plans. During the term of the agreement, and so long as Mr. Huffer is our Chairman or Chief Executive Officer, Mr. Huffer will: The employment agreement also entitles Mr. Deckman to an annual bonus based on financial and non-financial objectives and to a special bonus for fiscal 2003 related to managing discontinued operations. In the event his employment is terminated by Apogee without “cause” or voluntarily by him for “good reason” (as such terms are defined in the employment agreement), Mr. Deckman will continue to receive his base salary until July 17, 2004; receive a lump-sum severance payment equal to 52 weeks of his base salary, which payment is in addition to any severance payments he would receive under his separate severance agreement (described below under “Severance Agreements”); continue to receive medical benefits for up to 12 months after termination of employment; and receive outplacement assistance up to a maximum amount of $10,000. In addition, all of Mr. Deckman’s non-vested stock options will be terminated and he will be paid the net value of such options in cash, and all non-vested “Pool B” shares allocated to him under the Partnership Plan will be forfeited and he will be paid the net present value of such shares in cash. If a “triggering event” (defined in the agreement to include certain transactions involving our Auto Glass business segment) occurs, all of Mr. Deckman’s non-vested stock options will be terminated and he will be paid the net value of such options in cash; all non-vested “Pool B” shares allocated to him under the Partnership Plan will be forfeited and he will be paid the net present value of such shares in cash; and a pro-rated portion of any bonuses that he otherwise would have received will be paid to Mr. Deckman. If Mr. Deckman does not become an employee of the entity or business operating the business subject to the triggering event, he will be entitled to continue to receive his base salary until July 17, 2004, and the same benefits as if his employment had been terminated by him for “good reason.”Change in Controland Change-in-Control ArrangementsŸ annually recommend to the Compensation Committee that Mr. Deckman (a) be granted the number of stock options comparable to our other Executive Vice Presidents, (b) remain a participant in the Partnership Plan, and (c) remain a participant in the Supplemental Executive Retirement Plan; and Ÿ recommend to our Board of Directors that Mr. Deckman’s severance agreement (described below under “Severance Agreements”) not be terminated pursuant to certain sections of that agreement.
Severance Agreements
Each of the executive officers named in the Summary Compensation Table is a party to a severance agreement with the Companyus designed to retain the executive officer and provide for continuity of management in the event of an actual or threatened change in control of the CompanyApogee (as "change“change in control"control” is defined in the agreements). The agreements provide that, in the event of a change in control, each executive officer would have specific rights and receive specified benefits if the executive officer is terminated without cause or the executive officer voluntarily terminates his or her employment for "good reason"“good reason” (as defined in the agreements), within two years after the change in control, or if the executive officer voluntarily terminates his or her employment for any reason during the thirteenth month following a change in control. In these circumstances, the executive officer will receive a severance payment equal to two times the executive'sexecutive officer’s annual salary plus the executive'sexecutive’s targeted annual bonus (as calculated under the terms of the agreements). Options granted under our 1987 Stock Option Plan, and 1997 Omnibus Stock Incentive Plan, 2002 Omnibus Stock Incentive Plan and agreements relating to the Companyour match under our Amended and Restated 1987 Partnership Plan, also provide for payment or immediate vesting of awards in the event of a change in control of the Company.Apogee.
We also have entered into a consulting agreement with Mr. Goldfus and, until July 1, 2001, were party to a consulting agreement with Mr. Martineau, as described above in "Compensation of Directors."
Certain Transactions
In the ordinary course of business, the Company and our subsidiaries enter into transactions with other business entities in which one or more of our directors and nominees for director may serve as executive officers, partners or shareholders. The terms of all such transactions were negotiated at arms' length and resulted in terms as fair to the Company and our subsidiaries as could have been obtained from third parties, and none of our directors or nominees for director has a material interest in any such transaction.
17
The line graph below compares the cumulative total shareholder return on our common stock for the last five fiscal years with cumulative total return on the S&PStandard & Poor’s Small Cap 600 Index and the peer group index described below. This graph assumes a $100 investment in each of Apogee, the Company, the S&PStandard & Poor’s Small Cap 600 Index and the peer group composite index at the close of trading on March 2, 1997,February 27, 1998, and also assumes the reinvestment of all dividends.
Comparative Stock Performance
Comparison of Five-Year Cumulative Total Return
Returns
March 3, 19971, 1998 to March 2, 2002February 28, 2003
For the fiscal year ended March 2, 2002,1, 2003, our primary business activities included architectural glass products and services (approximately 60% of net sales), large-scale optical technologies (approximately 8% of net sales) and automotive replacement glass and services (approximately 32%30% of net sales) and large-scale optical technologies (approximately 10% of net sales). We are not aware of any competitors, public or private, that are similar to us in size and scope of business activities. Most of our direct competitors are either privately owned or divisions of larger, publicly owned companies.
The peer group
represented in the line graph above consists of all public companies with market capitalization of $500 million or less as of March 2, 20021, 2003 that are known by us to be engaged in some aspect of glass and/or aluminum products or services for construction and/or automotive end markets. The companies included in this peer group are Butler Manufacturing Corporation, Donnelly Corporation, International Aluminum Corporation and Southwall Technologies. Prior to fiscal 2002,2003, Donnelly Corporation and SunSource, Inc. (previously Sun Distributors) had been included in our peer group. Donnelly Corporation and SunSource, Inc. hashave been removed due to the fact that it wasthey were acquired by another companyother companies during our fiscal yearyears ended March 1, 2003 and March 2, 2002, respectively, and isare no longer a public reporting company.companies.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Compensation Committee Interlocks and Insider Participation
During fiscal 2003, the following individuals served as members of our Compensation Committee: Bernard P. Aldrich, Stephen C. Mitchell, Ray C. Richelsen and Michael E. Shannon. None of these directors ever has served as an officer or employee of Apogee or any of our subsidiaries. During fiscal 2003, none of our executive officers served as a director or member of the compensation committee (or other committee performing similar functions) of any other entity of which an executive officer served on our Board of Directors or any Board committee.
In the ordinary course of business, we and our subsidiaries enter into transactions with other business entities in which one or more of our directors and nominees for director may serve as executive officers, partners or shareholders. The terms of all such transactions were negotiated at arms’ length and resulted in terms as fair to us and our subsidiaries as could have been obtained from third parties, and none of our directors or nominees for director has a material interest in any such transaction.
ItemPROPOSAL 2: APPROVAL OF AMENDMENT TO
THE AMENDED AND RESTATED 1987 APOGEE ENTERPRISES, INC.2002 OMNIBUS STOCK INCENTIVE PARTNERSHIP PLAN
Reasons for ApprovalProposed Amendment and Vote Required
On April 11, 2002, the Board of Directors adopted the
The Amended and Restated 1987 Apogee Enterprises, Inc. 2002 Omnibus Stock IncentivePartnership Plan (or "Plan"), subject to approvalwas adopted by the shareholders of the Company.us and our subsidiaries in 1987. The purpose of the Planplan is to aid in attracting and retaining management personnel and non-employee directors capable of providing strategic direction to the Company and assuring our future success, to offer these individuals and other employees incentives to put forth maximum efforts for the successincrease long-term ownership of our businesscommon stock by the key employees of Apogee and our subsidiaries, to foster and motivate exceptional work performance and teamwork among key employees, and to afford them an opportunityprovide our key employees with supplemental retirement benefits and long-term financial security. The plan allows participants to acquire a proprietary interestdefer up to 50% of their annual incentive compensation. Deferred amounts are invested in shares of our common stock. We match 100% of the amount deferred by participants in the Company, thereby aligning their interests with thoseform of shares of our shareholders.common stock.
The Plan authorizes the grant of stock options and several other types of stock-based awards. The
On April 10, 2003, our Board of Directors approved an amendment to the Partnership Plan, subject to shareholder approval, to increase the number of shares eligible for issuance under the plan from 3,200,000 to 4,000,000 shares, an increase of 800,000 shares. The Board, as well as our senior management, believes that stock options and other stock-based awards have been, and will continueit is important to be, a very important factor in attracting and retaining talented employees and non-employee directors. In addition, the Board of Directors believes that because stock-based compensation alignsalign the interests of our employees and non-employee directors with the interests of our shareholders, and we should encouragebelieve that encouraging share ownership by our employees through the plan is a key means to achieve this goal. Furthermore, we believe that the plan enhances our ability to attract and directors to own equity inretain employees, enhances employee loyalty and increases the Company. Stock incentive awards enhancefocus of our employees on the creation of shareholder value by increasing our employees' loyalty to the Company and providing increased motivation for them to contribute to our future success.
If the Plan is approved by shareholders, no future grants of awards will be made under our 1997 Omnibus Stock Incentive Plan other than grants of incentive stock options, which may be made only to eligible participants who are part-time or full-time employees of the Company or our subsidiaries, until all shares available for granting incentive stock options under the 1997 Omnibus Stock Incentive Plan are exhausted.value. As of April 24, 2002, 249,35923, 2003, we had approximately 51,518 shares were available for granting future awards of incentive stock options under that plan.
Approval of the Plan requires the affirmative vote of the holders of a majority of the shares of common stock of the Company present in person or by proxy and entitled to vote at the annual meeting.
Summary of the Plan
The following summary describes the material terms of the Plan. A copy of the Plan is attached to this proxy statement as Exhibit A. You should refer to Exhibit A for all the terms of the Plan.
Shares Authorized. The Plan will authorize the issuance of an aggregate of 1,800,000 shares of our common stock. Not more than 1,440,000 shares will be available for granting incentive stock options under the Plan, and not more than 360,000 shares will be available for granting restricted stock, restricted stock units and performance awards under the Plan. The total number of shares authorized for issuance under the Plan represent 6.4% of the shares of our common stock issued and outstanding on April 24, 2002. The closing price per share of our common stock on April 24, 2002, as reported on the Nasdaq National Market System, was $13.44.plan.
If any shares of common stock subject to an award under the Plan or to which an award relates are not purchased or are forfeited, or if any award terminates without the delivery of shares, those shares will be available for granting future awards under the Plan. In addition, if any shares are delivered to the Company by a Plan participant as payment of the purchase price relating to an award or to pay the participant's tax withholding obligations, then only the number of shares issued net of the shares tendered to the Company will be deemed issued for purposes of determining the maximum number of shares available for granting of future awards (other than incentive stock options) under the Plan.
Eligibility. Any employee, officer, director, consultant or independent contractor providing services to the Company or any of our affiliatesThe plan is eligible to receive awards under the Plan. However, non-employee directors may be granted awards under the Plan onlydescribed in limited circumstances described
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below under "Non-Employee Director Awards." As of April 24, 2002, approximately 5,300 employees were eligible to participate in the Plan.
Plan Administration. The Plan will be administered by a committee of our Board of Directors composed of a number of directors that is no less than the number required to permit stock options granted under the Plan to qualify under Section 162(m) of the Internal Revenue Code of 1986 (the "Code") and Rule 16b-3 promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"). Currently, these provisions require that at least two directors serve on the committee. Each director serving on the committee must be a "non-employee director" within the meaning of Rule 16b-3 and an "outside director" within the meaning of Section 162(m).greater detail below.
The committee will have the authority to establish rules for the administration of the Plan, to select the individuals to whom awards are granted, to determine the types of awards to be granted and the number of shares of common stock covered by the awards, and to set the vesting and other terms and conditions of awards. The committee may accelerate the vesting of awards. The committee also has the authority to determine whether the payment of any amounts received under any award may be deferred for federal income tax purposes.
The committee may delegate to one or more officers who are also directors of the Company or any of our affiliates the right to grant awards under the Plan with respect to individuals who are not subject to Section 16(b) of the Exchange Act or in a manner that would cause the Plan not to comply with the requirements of Section 162(m) of the Code.
Types and Terms of Awards. The Plan will permit the granting of (a) stock options, including "incentive stock options" meeting the requirements of Section 422 of the Code, and "non-qualified stock options" that do not meet such requirements, (b) stock appreciation rights, or "SARs," (c) restricted stock and restricted stock units, (d) performance awards and (e) other awards valued in whole or in part by reference to or otherwise based upon our common stock ("other stock-based awards"). Awards may be granted for no cash consideration or for such minimal cash consideration as may be required by applicable law. Awards may provide that upon the grant or exercise thereof the holder will receive shares of common stock, cash or any combination thereof, as the committee determines.
The exercise price per share under any stock option, the grant price of any SAR, and the purchase price of any security that may be purchased under any other stock-based award will not be less than 100% of the fair market value of our common stock on the date of grant. Awards granted under the Plan may not have a term longer than 10 years. No person may be granted any award or awards under the Plan, the value of which is based solely on an increase in the value of our common stock after the date of grant, for more than 500,000 shares of common stock in the aggregate in any calendar year.
Stock Options. Options may be exercised by payment of the exercise price, either in cash or, at the discretion of the committee, in whole or in part by tendering previously owned shares of our common stock or other consideration having a fair market value on the date of exercise equal to the exercise price. Determinations of fair market value under the Plan will be made in accordance with methods and procedures established by the committee. If not otherwise determined by the committee, the fair market value of the common stock on a given date will be the closing price of the common stock as reported by the Nasdaq National Market on that date or, if the Nasdaq National Market is not open for trading on that date, on the next date when it is open for trading.
The Plan provides that the committee may grant "reload" options, either separately or together with another option. Pursuant to a reload option, a participant who exercises an option by tendering shares of our common stock (or who pays the amount of tax required to be withheld upon such exercise by tendering shares), would be granted a new option, having an exercise price equal to the fair market value on the date of grant of the reload option, to purchase a number of shares not exceeding the number of shares tendered to exercise the option and pay withholding taxes. The term of the reload option may not be longer than the
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remaining term of the original option. Only one reload option may be granted with respect to any option granted under the Plan.
SARs. The holder of an SAR will be entitled to receive the excess of the fair market value (calculated as of the exercise date or, if the committee so determines, as of any time during a specified period before or after the exercise date) of a specified number of shares over the grant price of the SAR.
Restricted Stock and Restricted Stock Units. Holders of restricted stock units will have the right, subject to any restrictions imposed by the committee, to receive shares of common stock (or a cash payment equal to the fair market value of the shares) at some future date. The holder of restricted stock may have all of the rights of our shareholders (including the right to vote the shares subject to the restricted stock award and to receive any dividends with respect to the stock), or these rights may be restricted. Restricted stock may not be transferred by the holder until the restrictions established by the committee have lapsed. Upon termination of the holder's employment during the restriction period, restricted stock and restricted stock units are forfeited, unless the committee determines otherwise.
Performance Awards. Performance awards will provide their holders the right to receive payments, in whole or in part, upon the achievement of goals established by the committee during performance periods established by the committee. A performance award granted under the Plan may be denominated or payable in cash, shares of common stock or restricted stock, restricted stock units, other securities, other awards or other property.
Other Stock-Based Awards. The committee also is authorized to grant other types of awards that are denominated or payable in or otherwise related to our common stock. The Plan provides that the committee shall establish the terms and conditions of such awards.
Non-Employee Director Awards. If the Plan is approved by the shareholders, future grants of stock options to non-employee directors will be made only under the Plan, and no additional awards will be granted to non-employee directors under our 1997 Omnibus Stock Incentive Plan. Non-employee directors may not be granted any awards under the Plan other than stock options granted under the terms and conditions described below, and the authority of the committee with respect to granting awards to non-employee directors will be limited to ministerial and non-discretionary matters.
Under the Plan, commencing with the 2002 Annual Meeting of Shareholders, each non-employee director automatically will be granted an option to purchase 4,000 shares of our common stock on the date of the non-employee director's election or reelection to the Board of Directors and on the date of each other annual meeting of shareholders as to which the non-employee director is in office, so long as the director's term of office as a director is not expiring on that date. In addition to this automatic fixed option grant, each non-employee director will be granted an additional option to purchase a number of shares of our common stock such that, when combined with the fixed grant, the total number of shares subject to the two options will equal an amount of shares that will provide the non-employee director with dollar-denominated, equity-based compensation equal to the dollar-denominated, equity-based compensation received by non-employee directors in the fiftieth percentile of a comparator group of public companies selected by the committee with the assistance of an independent consulting firm expert in such matters. The comparator group will be reviewed by the committee on an annual basis. For purposes of determining the number of options to be granted, each option will be valued at 33% of the fair market value of one share of our common stock as of the date of grant of the option.
As an example, assuming the dollar-denominated, equity-based compensation received by non-employee directors in the fiftieth percentile of the comparator group is $40,000 and the fair market value of our common stock on the date of the annual meeting of shareholders is $13.00, then:
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form of a fixed option to purchase 4,000 shares and an additional option to purchase 5,324 shares (determined by subtracting 4,000 from 9,324); and
Notwithstanding the foregoing, under the Plan, non-employee directors may not be granted options to purchase more than 10,000 shares of our common stock, in the aggregate, in any fiscal year.
Stock options granted to non-employee directors will have an exercise price equal to 100% of the fair market value of our common stock on the date of grant. All stock options granted to non-employee directors will be non-qualified stock options, will become exercisable in full six months after the date of grant, and will terminate on the tenth anniversary of the date of grant. The options will be subject to all other terms and conditions set forth in the Plan and in the form of non-qualified stock option agreement used by the Company from time to time.
Transferability. In general, no award and no right under any award granted under the Stock Plan will be transferable by its recipient otherwise than by will or by the laws of descent and distribution.
Withholding Obligations. Under the Plan, the committee may permit participants receiving or exercising awards to surrender previously owned shares of our common stock to satisfy federal, state or local withholding tax obligations.
Adjustments; No Option Repricing. In the event of any dividend or other distribution, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares of common stock or other securities of the Company, issuance of warrants or other rights to purchase shares of common stock or other securities of the Company, or other similar corporate transaction affecting the shares of common stock, the committee will, if deemed appropriate in order to prevent the diminution or enlargement of any benefits resulting from an award under the Plan, adjust the number of shares subject to the award and the exercise price and other provisions of the award. Except for these adjustments, no option may be amended to reduce its initial exercise price, and no option may be canceled and replaced with an option or options having a lower exercise price.
Amendments. The Board of Directors may amend, alter or discontinue the Plan at any time. However, shareholder approval must be obtained for any amendment that requires the approval of shareholders under any rules or regulations of the Nasdaq National Market or any other securities exchange or the National Association of Securities Dealers, Inc. that are applicable to the Company, or that would cause the Company to be unable to grant incentive stock options under the Plan, or that would cause Rule 16b-3 of the Exchange Act or Section 162(m) of the Code to become unavailable with respect to the Plan.
Effective Date; Term. The Plan will become effective immediately upon approval by our shareholders. Awards under the Plan will only be granted during a 10-year period beginning on the effective date of the Plan. However, any award granted may extend beyond this 10-year period.
Federal Income Tax Consequences
The following is a summary of the principal U.S. federal income tax consequences generally applicable to awards under the Plan.
Options and SARs. The grant of an option or SAR is not expected to result in any taxable income for the recipient. The holder of an incentive stock option generally will have no taxable income upon exercising the incentive stock option (except that an alternative minimum tax and possibly a payroll tax liability may result), and the Company will not be entitled to a tax deduction when an incentive stock option is exercised but may incur a payroll tax liability.
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Upon exercising a non-qualified stock option, the optionholder must recognize ordinary income equal to the excess of the fair market value of the shares of common stock acquired on the date of exercise over the exercise price, and the Company will be entitled at that time to a tax deduction for the same amount. Upon the exercise of an SAR, the amount of any cash received and the fair market value on the exercise date of any shares of common stock received are taxable to the recipient as ordinary income, and are deductible by the Company.
The tax consequence to an optionholder upon a disposition of shares acquired through the exercise of an option will depend on how long the shares have been held and upon whether the shares were acquired by exercising an incentive stock option or by exercising a non-qualified stock option or SAR. Generally, there will be no tax consequences to the Company in connection with the disposition of shares acquired under an option. However, the Company may be entitled to a tax deduction in the case of a disposition of shares acquired under an incentive stock option before the applicable incentive stock option holding periods set forth in the Code have been satisfied.
Other Awards. For other awards granted under the Plan that are payable in cash or shares of common stock and that are either transferable or not subject to substantial risk of forfeiture, the holder of such an award must recognize ordinary income equal to the excess of (a) the cash or the fair market value of the shares of common stock received (determined as of the date of such receipt) over (b) the amount (if any) paid for the shares of common stock by the holder of the award. In this case, the Company will be entitled at that time to a deduction for the same amount if and to the extent that amount satisfies general rules concerning deductibility of compensation.
For an award that is payable in shares of common stock that are restricted as to transferability and subject to substantial risk of forfeiture, unless a special election is made pursuant to the Code, the holder of the award must recognize ordinary income equal to the excess of (x) the fair market value of the shares of common stock received (determined as of the first time the shares became transferable or not subject to substantial risk of forfeiture, whichever occurs earlier) over (y) the amount (if any) paid for the shares of common stock by the holder. In this case, the Company will be entitled at that time to a tax deduction for the same amount if and to the extent that amount is deductible.
Special Rules. Special rules may apply in the case of individuals subject to Section 16(b) of the Exchange Act. In particular, unless a special election is made pursuant to the Code, shares received pursuant to the exercise of a stock option or SAR may be treated as restricted as to transferability and subject to a substantial risk of forfeiture for a period of up to six months after the date of exercise. Accordingly, the amount of any ordinary income recognized, and the amount of the Company's tax deduction, are determined as of the end of such period.
Recommendation
The Board of Directors recommends that you vote FOR the proposal to approveamend the Amended and Restated 1987 Partnership Plan. Proxies will be voted FOR the proposal unless otherwise specified.
Item 3: APPROVAL OF THE APOGEE ENTERPRISES, INC.EXECUTIVE MANAGEMENT INCENTIVE PLAN
Reasons for Approval and Vote Required
Section 162(m) of the Internal Revenue Code generally limits to $1,000,000 the amount that we are allowed each year to deduct for the compensation paid to our Chief Executive Officer and our other four most highly compensated executive officers. However, qualified "performance-based compensation" is not subject to the $1,000,000 deduction limit. In general, to qualify as performance-based compensation, the following requirements need to be satisfied:
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On April 11, 2002, the Board of Directors adopted the Apogee Enterprises, Inc. Executive Management Incentive Plan (or "Executive MIP"), subject to approval by the shareholders. The Executive MIP is designed to provide a competitive incentive compensation opportunity in order to attract and retain key executives. The Company is seeking shareholder approval of the Executive MIP in order to qualify compensation paid under the Executive MIP as "performance-based compensation," as defined in Section 162(m) of the Code. The Executive MIP is intended to provide the executive officers of the Company with a direct financial incentive to make significant contributions to the achievement of the annual strategic and financial goals of the Company. The Executive MIP is designed to reward participants only if specific, objective, predetermined performance goals are achieved during a fiscal year.
If the Executive MIP is approved by the shareholders, all payments under the Executive MIP will be deductible under Section 162(m) of the Code for the next five fiscal years. The Board of Directors recommends that you vote in favor of this proposal in order to maximize the tax benefits available to the Company under the Code. If the proposal is not approved, no awards will be made under the Executive MIP.
Approval of the Executive MIP requires the affirmative vote of the holders of a majority of the shares of our common stock present in person or by proxy and entitled to vote at the annual meeting.meeting is required for the approval of the proposal.
Summary of the Partnership Plan
The following summary describes the material terms of the Executive MIP. A copy of the Executive MIP is attached to this proxy statement as Exhibit B. You should refer to Exhibit B for all the terms of the Executive MIP.
Eligibility.Administration Participation
The Partnership Plan is administered by the Board of Directors or a committee designated by the board consisting of three or more “disinterested persons,” as determined in accordance with the Executive MIP is limited to our executive officers. AsSecurities Exchange Act of 1934. Currently, the date of this Proxy Statement, we had a total of seven executive officers. The Compensation Committee of the Board of Directors will have discretion to include or exclude any particular executive officer inadministers the Executive MIP.
Administration.Partnership Plan. The Executive MIP is administered by the Compensation Committee, which consists solely of two or more "outside directors" within the meaning of Section 162(m) of the Code. The Compensation Committee has the authority to determineinterpret the amount of bonusesplan, to prescribe, amend and rescind the rules and regulations relating to the plan, to delegate these responsibilities as allowed under the Executive MIPplan or in accordance with applicable law, as the Committee deems desirable, and to establish the terms and conditions of the bonus awards. The Compensation Committee also has the authority to establish rulesmake all other determinations necessary or advisable for the administration of the Executive MIP,plan.
Eligible Employees
Our employees and its determinationsour subsidiaries’ employees who participate in and interpretations are bindingeligible to receive compensation under our incentive compensation policies generally are eligible to participate in the Partnership Plan. As of March 1, 2003, approximately 90 employees were eligible to participate in the plan. The Compensation Committee designates Partnership Plan participants from this group based on all interested parties. Underselection criteria established by the Executive MIP,Committee for that fiscal year. As of March 1, 2003, a total of 27 current employees were participants in the plan.
Participant Deferrals
The Partnership Plan allows participants to defer up to 50% of the annual incentive compensation that may be earned by the participant for any fiscal year. Participants must designate their deferral percentage prior to the beginning of each fiscal year. A trust fund is then established for each participant in the plan. Following the award of incentive compensation to a participant who has elected to defer a portion of this compensation under the Partnership Plan, we deposit into the participant’s trust fund either (a) cash equal to the amount of incentive compensation deferred by the participant, which is then used to purchase shares of the our common stock, or (b) a number of shares of our common stock equivalent to the deferred amount, divided by the purchase price for the shares. The purchase price for the shares is the lesser of the fair market value per share at the date of the participant’s election to defer, or the fair market value per share at the date the participant’s incentive compensation award is approved by the Compensation Committee is requiredCommittee.
Amounts deferred by participants vest immediately but may not be distributed to certifyparticipants for a period of five years from the date of deferral, except in the event of the participant’s death or disability (as defined in the plan). At the time they designate their deferral percentage, participants also must elect a timeline for distribution that commences after expiration of the applicable performance goals have been met priorfive-year period. Distributions may only be made in shares of common stock, and may be made in a lump sum or in a series of installments, subject to payment of any bonuses to participants.rules established by the Committee.
Apogee Match
Determination
We match 100% of Bonus Amount; Maximum Bonus. The Executive MIP will entitlethe amount deferred by each participant by awarding to receiveeach participant a bonus payment afternumber of shares of our common stock equal to the endnumber purchased with the participant’s deferral amount for any year. The shares awarded by us are restricted. Participants may not sell, transfer, pledge, hypothecate, encumber, grant a lien in or otherwise dispose of a fiscal year if the applicable performance goals to paymentall or any of the bonus have been satisfied. Bonuses are payable solelyrestricted shares held in the forma participant’s name. The restricted shares vest in equal annual increments over a period of cash or stock. Participants will be entitledup to elect to defer part or all of an annual bonus payment under the Company's deferred compensation plans.
The right to receive a bonus will be10 years, as determined solely based on the attainment of one or more specific, objective, predetermined performance goals selected by the Compensation Committee no later than 90 days afterat the beginning of a fiscal year. The annual performance goals may apply to the individual
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executive officer, an identifiable business unittime of the Company,participant’s election to defer. The restricted shares are eligible to receive all declared dividends, and participants may vote the Company asrestricted shares during the restriction period. The restricted shares are subject to a whole, or any combination thereof. risk of forfeiture upon the occurrence of certain events designated by the Committee.
Fiscal 2003 Partnership Plan Awards
The performance goals will be based solely on one or morefollowing table indicates the aggregate number of the following business criteria:
For the Company's Chief Executive Officer, the target and potential range of annual bonus award will be between zero and 150% of the Chief Executive Officer's annual base compensation. For the Company's executive vice presidents, chief financial officer and general counsel, the target and potential range will be between zero and 100% of the participant's annual base compensation. For other participants, the Compensation Committee will establish targets and ranges at its discretion. The maximum bonus that may be paid to any participantrestricted shares acquired pursuant to the Executive MIP in any fiscal year may not exceed $1,500,000. The Compensation Committee has complete discretionary authoritydeferred amounts and awarded pursuant to reduce the amount of a bonus that otherwise would be payable to any participantour match under the Executive MIP.
2003 Executive MIP Bonuses. The amount of the bonuses to be received by eligible participantsPartnership Plan for fiscal 2003, for each of our executive officers named in the Summary Compensation Table, for all current executive officers as a group and for all non-executive employees as a group. The deferred amounts and our match for each of our named executive officers also are not determinable at thisdisclosed in the column entitled “Restricted Stock Awards” in the Summary Compensation Table.
Name | Dollar Value($) | Number of Restricted Shares | ||
Russell Huffer | 452,896 | 49,496 | ||
Michael B. Clauer | 188,820 | 20,636 | ||
Joseph T. Deckman | 142,552 | 15,580 | ||
Larry D. Stordahl | 154,174 | 16,850 | ||
Patricia A. Beithon | 146,370 | 15,996 | ||
Executive Officers as a Group (7 persons) | 1,215,432 | 132,834 | ||
Non-Executive Officer Employees as a Group (20 persons) | 1,377,127 | 150,504 |
Equity Compensation Plan Information
The following table summarizes, with respect to our equity compensation plans, the number of shares of our common stock to be issued upon exercise of outstanding options, warrants and other rights to acquire shares, the weighted-average exercise price of these outstanding options, warrants and rights and the number of shares remaining available for future issuance under our equity compensation plans as of March 1, 2003.
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights(1) | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column)(2) | |||
Equity compensation plans approved by security holders | 2,672,859 | $11.15 | 2,495,501 | |||
Equity compensation plans not approved by security holders | None | Not Applicable | None | |||
Total | 2,672,859 | $11.15 | 2,495,501 |
| (1) | Includes shares underlying options granted under our 2002 Omnibus Stock Incentive Plan, our 1997 Omnibus Stock Incentive Plan and our 1987 Stock Option Plan. |
| (2) | Of these shares, 348,056 are available for issuance under our Amended and Restated 1987 Partnership Plan, 1,568,384 are available for grant under our 2002 Omnibus Stock Incentive Plan, 388,484 are available for grant under our 1997 Omnibus Stock Incentive Plan and 190,577 are available for grant under our Non-Employee Director Deferred Compensation Plan. The 1,568,384 and 388,484 shares available for grant under the 2002 Omnibus Stock Incentive Plan and the 1997 Omnibus Stock Incentive Plan, respectively, may become the subject of future awards in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards or other stock-based awards, except that not more than 960,000 shares are available for granting restricted stock, restricted stock units and performance awards under both of these plans. |
AUDIT COMMITTEE REPORT AND PAYMENT OF FEES TO AUDITORS
The Audit Committee oversees Apogee’s financial reporting process (including our system of financial controls and internal and external auditing efforts), oversees our program to ensure ethical business practices, and assesses and establishes policies and procedures to manage our business and financial risk. The Committee also appoints our independent auditors. The Committee operates under a written charter, which we annually review, and has authority to retain independent counsel and other external advisors from time becauseto time to help us fulfill our oversight duties.
In performing our functions, the bonus amounts payable, if any, will depend upon achievementCommittee acts only in an oversight capacity. In our oversight role, we rely on the work and assurances of Apogee’s management, which has the primary responsibility for Apogee’s financial statements and reports, of our internal auditors and of our independent auditors which, in its report, expresses an opinion on the conformity of our annual financial statements to generally accepted accounting principles. We retained Deloitte & Touche LLP as our independent auditors to audit our financial statements for the fiscal year ended March 1, 2003. We retained PricewaterhouseCoopers LLP to provide internal audit services to us beginning in the second quarter of fiscal 2003.
The Committee is composed entirely of non-employee directors, all of whom are independent in accordance with current NASDAQ listing standards and the rules of the fiscal 2003 performance goals established by the Compensation Committee. Because the performance objectives may vary from yearSecurities and Exchange Commission. Each Committee member is able to yearunderstand fundamental financial statements, and we have no assurance that the Compensationat least one Committee would have selected the same objectives for fiscal 2002 as it may select formember has past experience in accounting or related financial management experience. During fiscal 2003, the amounts of any bonuses that would have been payable to eligible participants had the Executive MIP been in effect for fiscal 2002 also are indeterminable.
Term; Amendment; Termination. If approved by our shareholders, the Executive MIP will be deemed effective as of March 3, 2002, the first day of fiscal 2003. However, no payments will be made under the Plan until after shareholder approval is obtained. The Compensation Committee may amend, alter or discontinue the Executive MIP at any time in its sole discretion, except that, without approvalmembers of the shareholdersCommittee were Ms. Grogan and Messrs. Aldrich, Edwards, Horner and Shannon.
The Committee has reviewed and discussed the audited financial statements with management and the independent auditors, including significant accounting judgments and estimates applied by Apogee in our financial statements and the reasonableness thereof. Management represented to the Committee that our financial statements were prepared in accordance with generally accepted accounting principles and that our financial statements fairly present, in all material respects, the financial condition and results of operations of Apogee.
The Committee discussed with the independent auditors the matters required to be discussed underStatement on Auditing Standards No. 61, as amended byStatement on Auditing Standards No. 90 (Communications with Audit Committees). In addition, the Committee received and discussed with the independent auditors the written disclosures and letter required byIndependence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), relating to the independence of the Company,independent auditors. The Committee considered whether the independent auditors’ provision of non-audit services to Apogee during fiscal 2003 is compatible with the auditors’ independence and concluded that the independent auditors are independent from Apogee and our management.
The Committee also discussed with the independent auditors certain non-audit services provided from 1998 through November 2002 by a partner of an affiliate of the independent auditors located in the United Kingdom as the creditors’ committee/court-approved liquidator of an insolvent, inactive subsidiary of Apogee that filed for voluntary liquidation in March 1998. These services were provided to the creditors’ committee and the court and not to Apogee. In November 2002, in connection with the partner’s planned retirement, the court approved the appointment of a new liquidator who is not affiliated with the independent auditors. The Committee concluded that the independent auditors’ independence was not impaired by these activities.
Based on the review and discussions referred to above, the Committee may not make any amendments or other modifications that, absent approval of the shareholders, would cause any compensation paid pursuantrecommended to any award under the Executive MIP no longer to qualify as "performance-based compensation" within the meaning of Section 162(m) of the Code. The Executive MIP will terminate by its terms on March 3, 2007, and no annual bonus awards may be granted under the Executive MIP after that date.
Federal Income Tax Consequences
The following is a summary of the principal U.S. federal income tax consequences generally applicable to bonuses that may be paid under the Executive MIP.
No taxable income should result for any participant at the time the annual performance criteria and formula for determining potential bonus amounts are determined. Bonus payments made to the participants after achievement of the annual performance goals set forth in the agreement will be taxable to the participant as ordinary income. Subject to general tax law considerations concerning reasonable compensation, and assuming that compensation paid under the Executive MIP will qualify as "performance-based compensation" within the meaning of Section 162(m) of the Code, the Company will be entitled to a tax deduction for that same amount at the time a participant recognizes ordinary income.
25
Recommendation
Theour Board of Directors recommends that you vote FORour audited financial statements be included in our Annual Report on Form 10-K for the proposalfiscal year ended March 1, 2003, for filing with the Securities and Exchange Commission. The Committee appointed Deloitte & Touche LLP to approveserve as our independent auditors for fiscal 2004.
Audit Committee of the Executive MIP. Proxies will be voted FOR the proposal unless otherwise specified.Board of Directors of Apogee
Barbara B. Grogan,Chair | J. Patrick Horner | |||||
Bernard P. Aldrich | Michael E. Shannon | |||||
Robert L. Edwards |
Audit Fees, Financial Information Systems Design and Implementation Fees and All Other Fees
We incurred the fees shown in the following table for professional services provided by Deloitte & Touche LLP for fiscal 2003.
Fiscal 2003 | |||
Audit Fees(1) | $ | 420,000 | |
Financial Information System Design and Implementation Fees |
| -0- | |
All Other Fees(2) |
| 90,000 | |
Total | $ | 510,000 | |
| (1) | Audit fees consisted of audit work performed in preparation of our annual financial statements and review of the quarterly financial statements included in our quarterly reports on Form 10-Q for fiscal 2003. |
| (2) | All other fees consisted primarily of audits of our employee benefit plans, preparation of tax returns, tax consulting, tax related valuation services and other accounting consultations. |
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services Provided by Our Independent Auditor
Consistent with SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting compensation and overseeing the work of our independent auditor. In recognition of this responsibility, the Audit Committee established a policy to require pre-approval of all audit and permissible non-audit services provided by our independent auditor. As permitted by SEC regulations, the Audit Committee delegated the authority to pre-approve services provided by our independent auditor to the Chair of the Audit Committee, who will report any pre-approval decisions to the Audit Committee at its next scheduled meeting.
Item 4:PROPOSAL 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Audit Committee has appointed Deloitte & Touche LLP as our independent auditors for the fiscal year ending February 28, 2004. Deloitte & Touche LLP served as our independent auditors for fiscal year ended March 1, 2003, and reports to the Audit Committee.
On April 11, 2002, we determined not to re-engage our former independent auditors, Arthur Andersen LLP, and to appoint Deloitte & Touche LLP as our new independent auditors (subject to the completion of their customary new client acceptance procedures which have now been completed). Such dismissal was effective upon completion of the audit of our consolidated financial statements for our fiscal year ended March 2, 2002. The decision not to re-engage Arthur Andersen and to retain Deloitte & Touche LLP was approved by our Board of Directors upon the recommendation of our Audit Committee. While it is not required to do so, the Board of Directors is submitting the selection of Deloitte & Touche LLP to serve as our independent auditors for the fiscal year ending March 1, 2003 for ratification in order to ascertain the views of the shareholders on this appointment. If the selection is not ratified, the Board of Directors will reconsider its selection. Ratification of the selection will require the affirmative vote of a majority of the shares of our common stock represented in person or by proxy and entitled to vote at the annual meeting.
The reports of Arthur Andersen LLP on theour financial statements of the Company for the past two fiscal years ended March 2, 2002 and March 3, 2001 do not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. In connection with its audits for the two most recent fiscal years and through April 11, 2002, (a) there have been no disagreements with Arthur Andersen LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure which disagreements, if not resolved to the satisfaction of Arthur Andersen LLP, would have caused them to make reference thereto in their report on the financial statements for such years, and (b) we believe that during the two most recent fiscal years and through April 11, 2002, there have been no "reportable“reportable events,"” as defined in Item 304(a)(1)(v) of Regulation S-K of the Securities and Exchange Commission.
We have not, during
During the Company's two most recent fiscal years orended March 2, 2002 and March 3, 2001 and through the interim period throughended April 11, 2002, consultedwe did not consult with Deloitte & Touche LLP regarding (1)either (x) the application of accounting principles to a specified transaction, either completed or proposed,proposed; or the type of audit opinion that might be
rendered on the Company'sour financial statements, andas a result of which either a written opinion was provided to us or oral advice was provided that Deloitte & Touche LLP concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issues, or (2)(y) any matter that was either the subject of a disagreement with Arthur Andersen LLP or a reportable event.
We reported the change in accountants on a Form 8-K filed with the Securities and Exchange Commission on April 18, 2002. The Form 8-K contained a letter from Arthur Andersen LLP, addressed to the Securities and Exchange Commission, stating that it agreed with the comments in clause (a) above and was not in a position to agree or disagree with the comments in the remainder of the above statements.
While it is not required to do so, the Board of Directors is submitting the appointment of Deloitte & Touche LLP to serve as our independent auditors for the fiscal year ending February 28, 2004 to our shareholders for ratification in order to ascertain the views of our shareholders on this appointment. If the appointment is not ratified, the Audit Committee will reconsider its appointment.
A representative of Arthur AndersenDeloitte & Touche LLP will be present at the annual meeting2003 Annual Meeting of Shareholders and will be afforded the opportunity to make a statement and respond to questions. We anticipate that a representative
The Audit Committee of Deloitte & Touche LLP will also be present at the annual meeting.
Recommendation
The Board of Directors recommendrecommends that you vote FOR the proposal to ratify the appointment of Deloitte & Touche LLP as our independent auditors for the fiscal year ending March 1, 2003.February 28, 2004. Proxies will be voted FOR the proposal unless otherwise specified.
26
AUDIT COMMITTEE REPORT
Ratification of the appointment will require the affirmative vote of a majority of the shares of our common stock represented in person or by proxy and entitled to vote at the annual meeting.
The Audit Committee is composed of four outside directors, each of whom is able to understand fundamental financial statements and at least one of whom has past experience in accounting or related financial management experience. The members of the Audit Committee are Ms. Grogan and Messrs. Aldrich, Hammerly and Horner.
The following is the report of the Audit Committee with respect to the Company's audited financial statements for the fiscal year ended March 2, 2002.
In connection with the Company's consolidated financial statements for the fiscal year ended March 2, 2002, the Audit Committee has:
Based on the review and discussions referred to above, the Committee recommended to the Company's Board of Directors that the Company's audited financial statements be included in the Company's Annual Report on Form 10-K for the fiscal year ended March 2, 2002 for filing with the Securities and Exchange Commission.
In performing all of these functions, the Audit Committee acts only in an oversight capacity. In its oversight role, the Committee relies on the work and assurances of the Company's management, which has the primary responsibility for financial statements and reports, and of the independent auditors, who, in their report, express an opinion on the conformity of the Company's annual financial statements to generally accepted accounting principles.
27
Audit Fees, Financial Information Systems Design and Implementation Fees, and All Other Fees
The following table presents fees for professional audit services provided by Arthur Andersen LLP for the audit of the Company's consolidated financial statement for the year ended March 2, 2002, and fees billed for other services rendered by Arthur Andersen LLP.
| Audit fees, excluding audited related services | $ | 285,000 | ||||
| Financial information systems design and implementation services | -0- | |||||
| All other fees: | ||||||
| Audit related fees: | ||||||
| Internal audit services | $ | 429,000 | ||||
| Statutory audit, benefit plans and other audit fees | 113,000 | |||||
| Non-audit related fees(1) | ||||||
| Research and development expense tax consulting | 237,096 | |||||
| Miscellaneous tax compliance and tax consulting | 255,370 | |||||
| Total all other fees | $ | 1,034,000 | ||||
The Audit Committee, after a review and discussion with Arthur Andersen LLP of the preceding information, determined that the provision of these services was compatible with maintaining Arthur Andersen LLP's independence.
The Company has elected to discontinue using Arthur Andersen LLP for audit services and has decided that the Company, in the future, will have two different accounting firms audit our annual financial statements and provide internal audit services, respectively. The Company has retained Deloitte & Touche LLP to provide audit services with respect to the Company's annual financial statements, as described in Item 3 of this proxy statement, and PricewaterhouseCoopers LLP to provide internal audit services, with the transition of the internal audit work to occur in the second quarter of fiscal 2003.
Barbara B. Grogan, ChairBernard P. AldrichHarry A. HammerlyJ. Patrick Horner
28
SHAREHOLDER PROPOSALS FOR THE NEXT2004 ANNUAL MEETING
Any shareholder wishing to have a proposal considered for submission at the 20032004 Annual Meeting of Shareholders must submit the proposal in writing to theour Secretary of the Company at the address indicated aboveon the Notice of Annual Meeting of Shareholders in accordance with all applicable rules and regulations of the Securities and Exchange Commission no later than January 8, 2003.15, 2004.
Under our Bylaws,bylaws, a shareholder proposal not included in our proxy statement for the 20032004 Annual Meeting of Shareholders is untimely and may not be presented in any manner at the 20032004 Annual Meeting of Shareholders unless the shareholder wishing to make the proposal follows the notice procedures set forth in our Bylaws,bylaws, including delivering notice of the proposal in writing to theour Secretary of the Company at the address indicated on the first page of this proxy statement, notno later than February 18, 2003.2004.
The Company's
Our Annual Report to Shareholders for the fiscal year ended March 2, 2002 is being mailed with this proxy statement. Shareholders who wish to obtain1, 2003, which includes a copy of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission, for the fiscal year ended March 2, 2002,1, 2003, is being mailed with this proxy statement. Shareholders who wish to obtain additional copies of our Annual Report on Form 10-K may do so without charge by contacting the Companyus through one of the following methods:
Internet: | www.apog.com | |
E-mail: | IR@apog.com | |
Telephone: | (952) 896-2422 | |
Fax: | (952) 896-2400 | |
Mail: | Investor Relations | |
Apogee Enterprises, Inc. | ||
7900 Xerxes Avenue South, Suite 1800 | ||
Minneapolis, Minnesota 55431-1159 |
Management does not intend to present any matters at the meeting other than those disclosed in this proxy statement, and we are not presently aware of any matter that may be presented at the meeting by others. However, if other matters properly come before the meeting, it is the intention of the persons named in the enclosed form of proxy to vote on those matters in accordance with their best judgment.
By Order of the Board of Directors,
Patricia A. Beithon
General Counsel and Secretary
Dated: May 8, 20029, 2003
29
APOGEE ENTERPRISES, INC.2002 OMNIBUS STOCK INCENTIVE
PARTNERSHIP PLAN
Section 1. Purpose.
The purpose
This instrument is a combined deferred compensation (funded in trust) and restricted stock plan (the “Plan”) adopted by Apogee Enterprises, Inc. and its subsidiaries, Harmon Glass Company, Harmon Glass of theFlorida, Inc., Wausau Metals Corporation, Viracon, Inc., and W.S.A., Inc. for a select group of management or highly compensated personnel. This Plan is designed to promoteprovide key executives of such corporations with an increased ownership in Apogee Enterprises, Inc., foster and motivate exceptional work performance and teamwork among such executives, and provide supplemental retirement benefits and long-term financial security.
ARTICLE I
DEFINITIONS
1.01 “Administrator” means the interests of the Company and its shareholders by aiding the Company in attracting and retaining management personnel and Non-Employee Directors capable of providing strategic direction to, and assuring the future success of, the Company, to offer such personnel and directors and other employees, as determinedAdministrator appointed by the Committee from time to time, incentives to put forth maximum efforts for the successBoard of the Company's businessDirectors, and an opportunity to acquire a proprietary interest in the Company, thereby aligning the interests of such personnel and directors with the Company's shareholders.
Section 2. Definitions.
As used in the Plan, the following terms shall have the meanings set forth below:
(a) "Affiliate" shall mean (i) any entity that, directly or indirectly through one or more intermediaries, is controlled by the Company and (ii) any entity in which the Company has a significant equity interest, in each case as determined byif none, then the Committee.
(b) "Award"
1.02 “Apogee” depending on the context in which used means Apogee Enterprises, Inc. and/or its Subsidiaries who are a party to this Plan; provided, however, this definition shall meannot be construed or interpreted to allow assets held in Trust for the benefit of a Participant (employee) of Apogee Enterprises, Inc. to be subject to claims of general creditors of any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance AwardSubsidiary, nor shall assets held in the Trust on behalf of a Participant (employee) of any Subsidiary be subject to claims of general creditors of Apogee Enterprises, Inc. or Other Stock-Based Award grantedany other Subsidiary. (See Article VI).
1.03 “Apogee Company” means any Apogee corporation in the singular, whether Apogee Enterprises, Inc. or any Subsidiary that is a party to this Plan.
1.04 “Beneficiary” means the person, persons or trust last designated by the Participant to receive the benefits provided under this Plan. Such designation shall be made pursuant to Article VIII of the Plan.
(c) "Award Agreement" shall mean any written agreement, contract or other instrument or document evidencing any Award granted under the Plan.
(d) "Board1.05 “Board of Directors" shall meanDirectors” means the Board of Directors of the Company.Apogee Enterprises, Inc.
(e) "Code"
1.06 “Committee” means the Plan compensation committee of the Board of Directors.
1.07 “Common Stock” means common stock of Apogee Enterprises, Inc.
1.08 “Deferred Compensation Account” means the Trust Fund account of a Participant as provided in Section 6.03.
1.09 “Disability” means mental or physical disability, which, in the opinion of the Committee, based on medical evidence satisfactory to the Committee, prevents a Participant from engaging in the principal duties of his or her employment.
1.10 “Early Retirement” means voluntary separation from employment of a Participant from Apogee which has been approved by the Committee at or after such Participant has attained age 50 and prior to age 65. Early Retirement shall meannot be available to any Participant unless and until such Participant has 15 years of Service with Apogee. Early Retirement is not and shall not be defined or interpreted as Termination of Employment or Retirement.
1.11 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended. This agreement qualifies as a plan which is unfunded and which is maintained by an employer primarily for the
purpose of providing deferred compensation for a select group of management or highly compensated employees.
1.12 “Fair Market Value” means the daily closing price of Common Stock as reported in the Wall Street Journal.
1.13 “Financial Hardship” means an immediate, severe financial need of a Participant, resulting from an event not reasonably foreseeable by the Participant, which cannot be met by the Participant from other resources reasonably available to the Participant from insurance or reimbursement, liquidation of assets to the extent that would not itself cause severe financial hardship or succession deferrals under the Plan. Such events would arise, for example, from a serious illness, injury or accident of the Participant or a dependent member of Participant’s family, loss of property due to casualty or similar severe, extraordinary and unforeseeable circumstances beyond the control of Participant detrimentally affecting the health or welfare of the Participant or a dependent member of Participant’s family. The Committee shall determine when Financial Hardship occurs and its determination shall be final and not subject to review or challenge by a Participant.
1.14 “Fiscal Year” means the annual period ending on the Saturday closest to the last day of February or such Fiscal Year of Apogee as it may be changed hereafter from time to time.
1.15 “Grantor” means Apogee or the Committee, acting on behalf of Apogee.
1.16 “Incentive Compensation” means compensation awarded to an employee of Apogee at the end of the Fiscal Year pursuant to the Incentive Plan.
1.17 “Incentive Plan” means the Incentive Compensation arrangement as adopted by Apogee on a year to year basis, prior to the end of a Fiscal Year, and as revised from time to time, which provides for Incentive Compensation to selected management or highly compensated employees of Apogee, on a company by company basis, on the attainment of defined financial and developmental goals during the course of that Fiscal Year, if said employee remains in the employ of Apogee at the end of that Fiscal Year.
1.18 “Participant” means a person employed by Apogee who (i) is a participant in and eligible to receive compensation under the Incentive Plan, (ii) has been specifically selected by the Committee to participate in the Partnership Plan, and (iii) has elected to defer such compensation under this Plan, or a person, and who prior to the time of Retirement, Early Retirement, death, Disability or Termination of Employment, had elected to defer such compensation under this Plan and who retains, or whose Beneficiaries retain, benefits under the Plan and in accordance with its terms.
1.19 “Plan” means this Partnership Plan, as it may be amended from time to time.
1.20 “Pool A” means that portion of the Incentive Compensation awarded by Apogee to the Participant which Participant has elected to defer and which, pursuant to this Plan, Apogee as Grantor shall contribute to the Trust.
1.21 “Pool B” means shares of Common Stock purchased or issued by Apogee in the Participant’s name, which shares in number shall be equal to the number of shares resulting from and computed pursuant to Participant’s election to defer under Pool A. Pool B shares so issued are and shall be designated as “Restricted Stock”.
1.22 “Restricted Stock” means Pool B stock in the Participant’s name that is or is meant to be nontransferable, forfeitable, and imprinted with a restrictive legend.
1.23 “Retirement” means a Participant’s retirement at or after attaining age 65.
1.24 “Subsidiary” means a corporation, of which Apogee Enterprises, Inc. owns at least fifty percent (50%) of the shares having voting power in the election of directors.
1.25 “Termination of Employment” means a Participant’s termination of employment with Apogee whether voluntary or involuntary. Termination of Employment does not include Retirement or Early Retirement.
1.26 “Trust” means the entity created by the Deferred Compensation Trust Agreement (the “Trust Agreement”) of even date which Apogee has adopted and executed pursuant to this Plan, together with all amendments and exhibits thereto.
1.27 “Trustee” means the entity, person or persons individually signing the Trust Agreement as Trustee or any successor to such Trustee (see Section 6.01 hereof and Article IX of the Trust Agreement).
1.28 “Trust Fund” means the fund held by the Trustee pursuant to the terms of the Trust, including individual Trust Fund accounts and Vintage Accounts established for each Participant.
1.29 “Unrestricted Stock” means Common Stock issued in the name of a Participant that is freely transferable and not subject to substantial risk of forfeiture.
1.30 “Vintage Account” means a subaccount of a Participant’s Trust Fund account established by the Trustee for the purpose of identifying and segregating increases and decreases to such account by Fiscal Year contribution of Pool A shares to which such increases or decreases relate. Such increases or decreases may be caused by, but are not limited to cash or property dividends, stock splits, stock purchases, reorganizations, mergers, distributions and the like.
ARTICLE II
SELECTION OF PLAN PARTICIPANTS AND DISQUALIFICATION
2.01Selection of Participant. The Committee will establish the criteria for Participation in the Plan and make Incentive Compensation awards to Participants. No person shall be entitled to benefits under the Plan except as awarded by the Committee in its sole discretion, with or without receiving recommendations from Apogee. Notwithstanding the foregoing, it is anticipated that the Board of Directors and the respective boards of directors of each Subsidiary shall provide such recommendations to the Committee.
Any Pool A or Pool B Incentive Compensation awarded to Participants under this Plan shall be deemed null and void from the inception of such award if this Plan is not approved by the shareholders of each Apogee Company within six (6) months of the date adopted by the last Apogee Company board of directors to adopt and approve this Plan. In such case the Common Stock, in Trust or in the form of Restricted Stock shall be returned to Apogee and any Pool A consideration, paid or foregone, shall be remitted to the Participant.
2.02Disqualification of Participants. In any instance where a Participant engages in acts or omissions including, but not limited to, (i) willful and substantial misconduct in the discharge of a Participant’s duties as an officer or employee, or (ii) reckless failure or refusal to perform substantial and clear duties of employment, or (iii) criminal misconduct of the Participant, having the foreseeable likelihood or effect of causing a material loss of or damage to the properties, business or reputation of Apogee, or, (iv) conferring an unauthorized and substantial pecuniary benefit upon the Participant or a designee of a Participant at the expense of Apogee, such acts or omissions may give rise to a finding by the Committee of a “Disqualification”. In order for a Disqualification to become effective, the finding of the Committee must be ratified by not less than fifty percent (50%) of a quorum of the Board of Directors and not less than fifty percent (50%) of a quorum of the board of directors of the Apogee Company by whom the Participant is employed. If any Participant subject to Disqualification is a member of the Board of Directors or any Apogee board of directors, such Participant shall not cast a vote on any motion for Disqualification. In the event that a finding of Disqualification is ratified, the maximum distribution to the Participant from that Participant’s Pool A Trust Fund account(s) shall be the lesser of the Fair Market Value
of such stock on the date of Disqualification or the original amount of Incentive Compensation deferred by Participant in any Fiscal Year. Such distribution shall be made in Common Stock. Any Common Stock or other property remaining in Participant’s Trust Fund subsequent to a Disqualification distribution shall immediately revert to Apogee for cancellation or incorporation to Apogee’s general assets, as applicable. Any and all Restricted Stock in the Participant’s name shall immediately be forfeited to Apogee without consideration.
ARTICLE III
PARTICIPANT’S ELECTION TO DEFER COMPENSATION
For any Fiscal Year, any Participant may elect to defer (i) not greater than one-half, or (ii) any percentage less than one-half of the compensation that may become payable to the Participant under the Incentive Plan. The election shall be made in writing on the form set forth in Exhibit C, designating the percentage or amount of the compensation that may be due under the Incentive Plan which is to be deferred, signed by the Participant and delivered to the Committee prior to the commencement of the Fiscal Year with respect to which such compensation is to be earned and deferred. If an individual is first employed by Apogee during the Fiscal Year and is eligible for compensation under the Incentive Plan, that individual shall make the election to defer prior to the first day of employment. The election to defer under the Plan, once made, is irrevocable. The percentage or amount of the compensation that may be due under the Incentive Plan which is to be deferred shall cause the Committee to contribute an equivalent amount of cash or shares of Common Stock to the Trust on behalf of the Participant, such contribution constituting Pool A. Concurrently with the contribution to the Trust, Apogee shall cause to have issued shares of Restricted Stock in the name of the Participant designated as Pool B, which shares in number shall be equal at the time of issuance to the number of shares contributed to the Participant’s Pool A Trust Fund for that Fiscal Year. Participant’s Pool A Trust Fund shall be administered by the Trustee. Participant’s Pool B Restricted Stock shall be escrowed with the Administrator. Within a reasonable time after the Committee’s determination of the Participant’s Incentive Compensation, Apogee shall transfer the Pool A shares or cash equivalent (to purchase an equivalent number of Pool A shares) to the Trustee to the credit of the Participant’s Trust Fund.
ARTICLE IV
SAVINGS CLAUSE
This Plan is intended to conform to the provisions of Sections 83, 402, 404, 451, and 671 through 677 of the Internal Revenue Code of 1986, as amended from time(“IRC” or the “Code”), with the provisions of Rule 16b-3 of the Securities Exchange Act of 1934, as amended, and all administrative and judicial interpretations thereof. As such this Plan shall be interpreted consistently with those laws and interpretations, shall not be interpreted to time,permit any action inconsistent with those laws or interpretations, and any regulations promulgated thereunder.provision herein inconsistent with those Laws or interpretations is hereby amended to make it consistent while still preserving, as nearly as possible, the original meaning of the amended provision.
(f) "Committee"
ARTICLE V
ADMINISTRATION
5.01Compensation Committee. The Plan shall meanbe administered by a Plan Compensation committee composed of either (i) the Board of Directors, designateda majority of which are Disinterested Persons and a majority of the directors acting on Plan matters are Disinterested Persons, or (ii) by a committee of three or more persons, all of whom are Disinterested Persons. “Disinterested Persons” shall be interpreted as that term as defined in Rule 16b-3 of the Securities Exchange Act of 1934. No member of the Committee while serving as such Boardshall be eligible for participation in the Plan. The Committee may appoint an Administrator who shall have the authority to manage and administer this Plan between meetings of the Committee and to carry out the resolutions of the Committee. All actions of the Administrator shall be subject to the Committee’s review and approval.
5.02Powers. The Committee shall have the exclusive and final authority to interpret the Plan, which shall consist of members appointed from timeprescribe, amend, and rescind the rules and regulations relating to time by the Board of Directors and shall be comprised of not less than such number of directors as shall be required to permit the Plan, to satisfydelegate such responsibilities or duties as are allowable under the requirementsPlan or by law as it deems desirable, and make all other determinations necessary or advisable for the administration of Rule 16b-3. Eachthe Plan. A majority of the members of the Committee shall constitute a quorum and all determinations of the Committee will be made by a majority of the quorum. Any determination by the Committee under the Plan may be made without notice of and without convening a meeting if evidenced by one or more writings signed by all of the Committee members.
5.03No Liability. In administering the Plan, neither the Committee nor any member of the Committee nor any person to whom the Committee may delegate any duty or power in connection with administering the Plan shall be liable, except as provided in the Securities Act of 1933, as amended, for any action, failure to act or loss except for its or his or her own gross negligence or willful misconduct, nor for the payment of any benefit or other amount under the Plan. No member of the Committee shall be personally liable under any contract, agreement, bond or other instrument made or executed by such member or in his or her behalf as a "nonemployee director"member of the Committee, nor for the neglect, omission or wrong-doing of any other member of the Committee.
ARTICLE VI
POOL A: DEFERRED COMPENSATION ACCOUNT
6.01Establishment of Trust. Upon execution of this Plan and concurrently upon the establishment of the Deferred Compensation Trust Agreement (which is attached hereto and incorporated by reference herein as Exhibit A), Apogee shall contribute to the Trust the sum of $1.00. The Trust shall be irrevocable and shall administer Participant Pool A Trust Funds received by it in either cash or in Common Stock from Apogee. All contributions so received, and any income therefrom, shall be held, managed and administered by the Trustee as a single Trust. The Trust Agreement provides that the Trustee shall discharge its responsibilities for the investment, management and control of the Trust assets solely in the interest of the Participants and Beneficiaries of the Plan. All investments of the Trust assets shall be made in Common Stock; provided, however, that the Trustee may maintain such portion of the Trust assets in cash or forms of short-term liquid investments as it deems in the best interests of the Trust, provided that the Trust remains primarily invested in Common Stock. The property of the Trust will be held in the individual name of the Trustee. Any, shares in the Trust will be voted by the Trustee in its discretion unless a Participant instructs the Trustee regarding the manner in which such shares credited to the Participant’s Trust Fund shall be voted.
6.02Deposits to Trust. Following the award of Incentive Compensation to a Participant who has elected to defer a portion of such compensation under this Plan, and as soon thereafter as may be reasonably practicable, Apogee shall deposit with the Trustee (for the benefit of the Participant’s Trust Fund) shares of Common Stock, or cash to purchase such stock, for which the purchase price per share is equal to the lesser of:
(a) the Fair Market Value per share at the date of the Participant’s election to defer, or
(b) the Fair Market Value per share at the date the Participant’s Incentive Compensation award is approved by the Committee.
The number of shares to be deposited with the Trust shall be computed by dividing the amount of Participant’s Incentive Compensation award that was deferred by the aforementioned per share purchase price. Cash deposited with the Trust shall be sufficient to purchase the number of shares otherwise required to be deposited with the Trust. No fractional shares shall be issued; provided, however, that computed fractional shares below fifty percent (50%) shall be rounded to a lower non-fractional number, and fractional amounts in excess of forty-nine percent (49%) shall be rounded to the next whole number.
Each Apogee Company shall contribute the amount or Common Stock shares due to the Trust on behalf of Participants employed by it. Each Apogee Company shall pay, pro rata by its number of Participants, any and all administrative charges for opening and maintaining Trust Fund accounts for Participants and for brokerage commissions, if any, on purchases of Pool A and Pool B Common Stock.
6.03Participant Trust Fund. The Trustee shall establish a Trust Fund account and Vintage Account for each Participant of each Apogee Company, which accounts will be maintained by the Trustee for each deposit made by Apogee under the Plan, and any charges or credits, including dividends and fees payable by the Trust. The Trust Fund accounts and Vintage Accounts shall be kept in the names of the individual Participants and each Beneficiary of a deceased Participant. The Trust shall issue annual and final statements to each Participant showing deposits, earnings, charges and credits to each of the Participant’s Trust Fund account(s) and Vintage Account(s) (see 6.05 “Interest of Participant”).
6.04Trust Fund Accounting. The Trustee shall credit each Participant’s Trust Fund account(s) and respective Vintage Account(s) with (i) the number of shares of Common Stock awarded to the Participant, or Common Stock or other shares purchased with cash and cash dividends, (ii) cash or stock dividends, and (iii) warrants or any other property received with respect to the stock in such account. Separate Vintage Accounts shall be established as subaccounts to all Participant Trust Fund accounts for each, and segregated by, Fiscal Year for which Pool A Incentive Compensation was contributed by Apogee. Each Vintage account shall be debited or credited, as applicable, for additional shares purchased by the Trustee on the Participant’s behalf, as a result of earnings in respect to stock noted in the Vintage Account, or for shares distributed from the Trust as a result of insolvency (see Section 6.06) or the occurrence of a predetermined event of distribution. Examples of such earnings or distributions include cash, stock, or property dividends, stock splits, warrants, options, reorganization, merger, exchange, insolvency, and the like. Distributions shall include or result from payments to Participants, forfeitures upon Disqualification, and the distribution of Trust assets by the Trustee to creditors of a respective Apogee Company. (See Section 6.05). To the extent Apogee incurs taxable income in respect to cash dividends declared and paid on Participant Pool A shares, Apogee shall have the right to require payment of such tax by the Trust, pursuant to appropriate written instruction to the Trustee, and Participant Trust Fund accounts and Vintage Accounts shall be charged accordingly. Common Stock purchased with cash dividends paid on such stock in Participant Trust Fund accounts and Vintage Accounts will vest in the Participant as of the date the Common Stock on which the dividend was paid vests.
6.05Interest of Participant. Any funds deposited with, earned by or related to Participant Trust Fund accounts shall be and continue to be at all times part of the general assets of the respective Apogee Company depositing such funds, subject to the claims of its unsecured general creditors. In the event a Participant becomes an employee of any other Apogee Company, the Trustee shall establish a separate Trust Fund account and Vintage Account(s) for deposits made to the Trust by that company on behalf of the Participant. Assets of the Trust are not intended to serve as security for payment of Participant Trust Funds under the Plan if an Apogee Company is or becomes insolvent. All rights created under the Plan and the Trust shall be and are mere unsecured contractual rights of a Participant against the Apogee Company from whom the Participant was awarded Incentive Compensation in a particular Fiscal Year. The Participant’s right to receive payments of deferred compensation under the Trust is and shall be no greater than the right of an unsecured general creditor of the applicable Apogee Company. No right, benefit or payment under this Plan shall be subject to attachment or other legal process for the debts of a Participant or any Beneficiary, and shall not be subject to anticipation, transfer, sale, assignment or encumbrance. No person, other than Participant (or Participant’s Beneficiaries in the event of death) shall have any claim against Apogee by virtue of the provisions of the Plan.
6.06Insolvency. The Trustee shall be and is prohibited from making any payments to a Participant or any Beneficiary, whose Trust Fund was established and funded by a specific Apogee Company, upon or subsequent to notification in writing that such Apogee Company is unable to pay its debts as they mature or that it is subject as a debtor to a pending proceeding under the Bankruptcy Code. Under any such circumstances, the Trustee shall deliver any property held by the Trust on behalf of Participants of the insolvent Apogee Company if, and only if, a court of competent jurisdiction so directs in order to satisfy creditor claims of that Company. The Trustee shall have the right to seek and retain legal
counsel to determine the competent jurisdiction of the court directing delivery of Trust assets and, if appropriate, may challenge such jurisdiction or the legality of such court’s order in the name of the Trust in any court.
6.07Distribution of Deferred Compensation Fund.
(a) Events of Distribution. Distribution of the respective Vintage Accounts of a Participant’s Trust Fund shall not occur earlier than the 15th day of the final month of the fifth (5th) Fiscal Year following the Fiscal Year for which the Vintage account was or should have been established (the “Base Period”); provided, however, that distributions prior to the end of the Base Period shall be allowed in the event of death or Disability. If a Participant elects distribution of the Trust Fund(s) and Vintage Account(s) held by the Trustee in a series of annual installment distributions, the Committee, in its sole discretion, may vary the time and manner of making such installment distributions. The Committee’s discretion shall include the authority to distribute yearly distributions in lump sum, or over a shorter o longer period as the Committee may find appropriate.
(b) Alternative Distribution Methods. Subject to the provisions of paragraph (a) above and the additional requirement set forth below with respect to Financial Hardship, a Participant may elect to receive distribution of his or her Trust Fund(s) and Vintage Account(s), such distribution election including (i) a lump sum on a date certain or upon the occurrence of Retirement, Termination of Employment (subsequent to the base period), Disability, or death, or (ii) annual installments commencing on a date certain or upon the occurrence of Retirement, Termination of Employment (subsequent to the Base Period), Disability or death. A Participant shall elect the manner of distribution on the form attached hereto as Exhibit C, which is incorporated by reference herein, executed and delivered to the Committee at the time the Participant makes his or her election to defer compensation for that Fiscal Year under the Plan. In the event of Financial Hardship, the distribution shall not exceed the amount determined by the Committee, in its sole discretion, to meet the immediate need of the Participant on account of the Financial Hardship.
(c) Yearly Installment Distributions. In the event of installment distribution, each yearly installment shall be transferred on the fifteenth (15th) day of the final month of the Fiscal Year in an amount equal to the balance credited (in shares of Common Stock) to the Participant’s Trust Fund(s) and Vintage Account(s) on the date on which the yearly distribution is to be made, divided by the remaining number of distributions to be made.
6.08Shares Subject to Plan. Apogee hereby authorizes Two Hundred Fifty Thousand (250,000) shares of Common Stock to be issued or purchased and designated as Pool A Common Stock pursuant to this Plan. Any Pool A shares that are returned to Apogee by Disqualification may be added to the number of shares available under the Plan for the purpose of funding Pool A.
ARTICLE VII
POOL B: RESTRICTED STOCK
7.01Issuance and Ownership. In the event that a Participant elects to defer Incentive Compensation as provided in Article III hereof, then concurrently upon funding of the Pool A Trust, Apogee shall purchase or cause to have issued an equivalent number of shares of Common Stock in the name of the Participant as provided in and determined by Section 7.02.
7.02Designation. Common Stock transferred to a Participant as provided in Section 7.01 shall be and hereby is designated as Pool B Restricted Stock, subject to limitations on transferability of the shares, substantial risk of forfeiture, and legending as described in this Article VII.
7.03IRC ss.83. A Participant may not elect to be taxed in the year Pool B Restricted Stock is received on the difference between the Fair Market Value of such stock and the Participant’s basis in such stock, without the express written consent of the Committee.
7.04Restriction on Transfer of Shares. Except as to Participant’s vested interest in and to the Restricted Stock as provided hereinafter (Unrestricted Stock), a Participant or any Beneficiary of a Participant shall not sell, transfer, pledge, hypothecate, encumber, grant a lien in, or otherwise dispose of (or enter into a binding agreement to sell, pledge, hypothecate, encumber, grant a lien in, or otherwise dispose of) all or any of the Restricted Stock in the name of the Participant or any Beneficiary. Any stock which is no longer subject to Section 7.05, shall be freely transferable and considered Unrestricted Stock; provided, however, that transfer of the shares shall be made only in accord with applicable federal and state securities laws.
7.05Legend and Stop Order Transfer.
(a) Legend. Apogee shall imprint the following legend upon each of the certificates representing Restricted Stock heretofore or hereafter issued in the name of a Participant or a Beneficiary of a Participant on the books of Apogee Enterprises, Inc. and such legend shall be and remain upon such certificates, as well as any reissuance thereof, unless and until removed pursuant to the reissuance of certificates upon vesting of the Participant’s unrestricted right to own and transfer such shares:
“The securities represented by this certificate are subject to a Restricted Stock Agreement by and between Apogee Enterprises, Inc. and the registered owner of such securities, and may not be sold, transferred, pledged, hypothecated, encumbered, liened, or otherwise disposed of unless in compliance with the terms of such Restricted Stock Agreement, a copy of which is on file at the principal office of Apogee Enterprises, Inc.”
(b) Stop Transfer Order. A stop transfer order shall be placed with Apogee Enterprises, Inc., as well as any transfer agent appointed by it, preventing transfer of any Restricted Stock of a Participant or a Participant’s Beneficiary, pending removal of the restrictions on transfer as set forth in this Article VII.
(c) Removal of Legend. The legend endorsed on a Participant’s Restricted Stock certificate or instrument evidencing Participant’s shares shall be removed, and Apogee shall cause to have issued a certificate or instrument without such legend, if the Participant or a Beneficiary of a Participant becomes vested in and to such Restricted Stock, such that the Restricted Stock is no longer subject to restrictions on transfer and substantial risk of forfeiture. In the event that less than all of the shares represented by the Restricted Stock certificate vest on a given date, and upon the written request of a Participant or a Beneficiary of a Participant, Apogee shall issue an unlegended certificate evidencing the Unrestricted Stock and shall issue a new Restricted Stock certificate evidencing the remaining Restricted Stock, all in exchange for the original Restricted Stock certificate, which certificate shall be cancelled and retired.
7.06Risk of Forfeiture. The Committee may establish, in its sole discretion, events by which a Participant would forfeit his or her entire interest in Restricted Stock. Such events may include, but are not limited to:
(a) Forfeiture of remaining Restricted Stock in the event the Participant does not remain in the employ of Apogee for the entire vesting period established by the Restricted Stock Agreement described in Section 7.07.
(b) Forfeiture of Restricted Stock of a Participant in the event that the Participant violates a condition established in connection with his or her Early Retirement or Termination
of Employment with Apogee not to engage in competition with Apogee for a certain time period and within a stated geographic area.
A forfeiture is not and shall not be interpreted to be a Disqualification (Section 2.02). In the meaningevent of Rule 16b-3a forfeiture of Restricted Stock, a Participant shall offer (or be deemed to have offered automatically) to Apogee all, and not less than all, of such Participant’s Restricted Stock at a price equal to the lesser of the Participant’s “tax basis” in the Restricted Stock or the Fair Market Value of such Stock on the date of forfeiture. The offer shall be made as soon as practicable after Participant’s receipt of the Committee’s written determination that an "outside director"event of forfeiture has occurred. The terms of the purchase shall be cash in exchange for the Restricted Stock at the time of closing.
7.07Vesting. Except as otherwise provided in this Plan, a Participant shall become vested in his or her Restricted Stock only in accord with the terms and conditions agreed to by the Committee and the individual Participant, pursuant to the “Restricted Stock Agreement” executed by the Parties concurrently with the transfer of the Participant’s Restricted Stock, which Agreement is attached hereto and incorporated by reference herein as Exhibit B. All Restricted Stock transferred to the Participant within a particular Fiscal Year shall vest in accordance with the meaningvesting schedule established by and contained in or attached to the Restricted Stock Agreement; provided, however, that the Committee may, in its sole discretion, establish vesting schedules for Participant Restricted Stock which differ from vesting schedules established for any other Participant in the Plan or which differ from any other vesting schedule established for a particular Participant in another Fiscal Year.
If any of the following events occur while a Participant is fully employed by any Apogee Company, or Participant is subject to an agreement not to engage in competition with any Apogee Company, then all Restricted Stock in the name of Participant shall immediately become Unrestricted Stock:
(a) Death of Participant.
(b) Total permanent Disability of Participant.
(c) Retirement of the Participant after achieving age 65, such Retirement not to include Early Retirement.
7.08Escrow. Restricted Stock issued and outstanding in the name of any Participant shall be retained in a bank safe deposit box under the control of the Plan Administrator.
7.09 Voting. Restricted Stock may be voted by the Participant as if such shares were not so restricted and, except as provided herein, shall have and hold all the benefits, rights, duties and obligations of a shareholder of Common Stock.
7.10Earnings on Shares. Participants shall be entitled to receive any and all cash dividends, stock dividends, warrants or any other property or benefits received with respect to ownership of his or her Restricted Stock. Shares issued to Participants as a result of such share ownership shall, however, be Restricted Stock subject to the provisions of this Plan and the respective Restricted Stock Agreement to which such stock relates, including the vesting schedule or schedules established by the Committee.
7.11Recording. No transfer of Restricted Stock shall be recognized by Apogee Enterprises, Inc. until it is duly entered upon its books and records and t once a transfer is recorded upon the books and records of Apogee Enterprises, Inc., the effective date of the transfer shall be the date of the actual transfer and such ownership shall “relate back” to such date. Transfers of Restricted Stock that are prohibited by this Agreement shall be void and such transfers shall not be recognized by Apogee Enterprises, Inc. and shall not be entered upon its books and records.
7.12Shares Subject to Plan. Apogee hereby authorizes Two Hundred Fifty Thousand (250,000) shares of Common Stock to be issued or purchased and designated as Pool B Restricted Stock pursuant to
this Plan. Any Restricted Stock awarded to Participants that are returned to Apogee by forfeiture or disqualification may be added to the number of shares available under the Plan for the purpose of funding Pool B.
ARTICLE VIII
DESIGNATION OF BENEFICIARY
A Participant may designate one or more Beneficiaries who are to succeed the Participant’s rights under Pool A and Pool B of the Plan in the event of Participant’s death. A designation of Beneficiary may be made only in writing on the form attached hereto as Exhibit D signed by the Participant and filed with the Committee and the Trustee. Beneficiaries may be changed with or without the consent of any prior Beneficiary. In the case of a failure of designation, or the death of a Beneficiary without a designated successor surviving, distribution shall be made to the estate of a Participant.
ARTICLE IX
EFFECT OF PLAN
Neither the adoption of this Plan nor the participation of an employee in the Plan shall affect the existing employment relationship of Participant with any Apogee Company, which employment shall remain terminable at the will of such company or the Participant unless provided for to the contrary in a separate, written agreement by and between the Apogee Company and a Participant.
ARTICLE X
DILUTION OR REORGANIZATION
10.01Dilution. In the event that additional shares of Common Stock are issued pursuant to a stock split, stock dividend, reclassification or the like, the number of shares of Common Stock held by the Trust in the Trust Fund(s) and Vintage Account(s) on behalf of the Participant, or by a Participant as Restricted Stock, shall be increased proportionately. In the event that Common Stock from time to time issued and outstanding is reduced by a combination of shares, the number of shares of Common Stock held by the Trust or the Participant shall be reduced proportionately.
10.02Reorganization. In the event that any Apogee Company is reorganized or is succeeded by another corporation in a reorganization, merger, consolidation, acquisition of property or stock, separation or liquidation, or the like, Apogee shall require, as part of the terms of the agreement or instrument which evidences such event or events, that all of the obligations of Apogee under this Plan will be assumed as if such event or events had not occurred. Under no circumstances will the event or events described herein diminish the right of Participants or the Trustee to enforce the provisions of this Plan.
ARTICLE XI
MISCELLANEOUS
11.01Relation Between Trust and Plan. This Plan and the Trust are par of a single integrated Deferred Compensation Agreement and shall be construed with reference to the other. In the event of any conflict between the terms of this Plan and the Trust, such conflicts shall be resolved in favor of the Trust.
11.02Relation Between Restricted Stock Agreement and Plan. This Plan and the Restricted Stock Agreement are part of a single integrated instrument and shall be construed with reference to the other. In the event of any conflict between the terms of this Plan and the Restricted Stock Agreement, such conflict shall be resolved in favor of the Plan.
11.03Headings. All article or section headings herein, or any exhibits or collateral instruments hereto, have absolutely no legal significance and are to be used solely for the convenience of reference. In the event of any conflict between such headings and the text of this Plan, its exhibits, or collateral documents, such conflict shall be resolved in the favor of the text.
11.04 Counterparts. This Plan may be executed in an original and any number of counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one Plan.
11.05Construction, Binding Effect and Amendment of Plan. This Plan shall be governed by and construed in accordance with the law of the State of Minnesota. The Plan shall be binding upon and inure to the benefit of Apogee, its successors and assigns and the Participants and their heirs and personal representatives. The Plan may be amended by the Committee from time to time, effective upon written notice to Participants, provided (a) no amendment may be made to Section 6.05 of the Plan, (b) no amendment may reduce any Participant’s rights or benefits hereunder in any manner with respect to Pool A compensation deferred prior to the amendment, and (c) no amendment may terminate the Plan with respect to Pool A compensation deferred prior to the amendment.
In addition, any amendment to the Plan shall be approved by the shareholders of each respective Apogee Company that is a party to this Plan, if such amendment would:
(a) materially increase the benefits accruing to Participants under the Plan; or
(b) materially increase the number of securities which may be issued under the Plan; or
(c) materially modify the requirements as to eligibility for participation in the Plan.
ARTICLE XII
EFFECTIVE DATE OF PLAN
This Plan shall be effective from the latest date that the Plan is approved by the board of directors of each Apogee Company that is a party to this Plan and adopted by the shareholders of such Companies in accordance with 17 C.F.R. 240.16b-3.
APOGEE ENTERPRISES, INC. | ||
By | /s/ DONALD W. GOLDFUS | |
Donald W. Goldfus, its President and Chief Executive Officer | ||
HARMON GLASS COMPANY | ||
By | /s/ LARRY C. ANDERSON | |
Larry C. Anderson, its President | ||
HARMON GLASS OF FLORIDA, INC. | ||
By | /s/ RICHARD D. INMAN | |
Richard D. Inman, its President | ||
WAUSAU METAL CORPORATION | ||
By | /s/ LAURENCE J. NIEDERHOFER | |
Laurence J. Niederhofer, its Chief Executive Officer | ||
VIRACON, INC. | ||
By | /s/ JAMES L. MARTINEAU | |
James L. Martineau, its President | ||
W.S.A., INC. | ||
By | /s/ GERALD K. ANDERSON | |
Gerald K. Anderson, its President | ||
AMENDMENT NO. 1
TO
APOGEE ENTERPRISES, INC.
PARTNERSHIP PLAN
THIS AMENDMENT to the Apogee Enterprises, Inc. Partnership Plan (the “Plan”) is executed to be effective the 31st day of January, 1989.
WITNESSETH:
WHEREAS, Apogee Enterprises, Inc. and selected wholly owned subsidiaries (collectively “Apogee”) have adopted the Plan to provide key executives with initial or increased ownership interests in Apogee; and
WHEREAS, the Plan does not specify the period during which the Pool B Restricted Stock (as that term is defined in the Plan) is recognized as earned for financial accounting purposes; and
WHEREAS, Apogee desires to amend the Plan to provide that the Pool B Restricted Stock is recognized as earned for financial accounting purposes during the fiscal year in which the bonus giving rise to the issuance or purchase of the Pool B Restricted Stock is earned and deferred.
NOW, THEREFORE, the following amendment is hereby made to the Plan:
1. Clarification of “Service Period” for Financial Accounting Purposes. For purposes of clarifying the Plan service period for financial accounting purposes, such period is and shall hereafter be the period in which the bonus giving rise to the issuance or purchase of the Pool B Restricted Stock is earned and deferred,, a new paragraph shall be added at the end of Section 162(m)7.07 of the Code. The CommitteePlan:
“Notwithstanding anything contained herein to the contrary, the Plan service period for financial accounting purposes hereunder shall be deemed to be the fiscal year with respect to which a Participant elects to defer bonus compensation amounts under Article III of this Plan.”
2. No other Amendment. Other than as specifically set forth herein, no further amendment or modification is made to the Plan.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed on the date first above written.
APOGEE ENTERPRISES, | ||
By: | /s/ WILLIAM G. GARDNER | |
Its: | Treasurer | |
HARMON GLASS CORPORATION | ||
By: | /s/ WILLIAM G. GARDNER | |
Its: | Secretary/Treasurer | |
HARMON GLASS OF FLORIDA INC. | ||
By: | /s/ WILLIAM G. GARDNER | |
Its: | Secretary/Treasurer | |
WAUSAU METAL CORPORATION | ||||||||
By: | /s/ WILLIAM G. GARDNER | |||||||
Its: | Treasurer | |||||||
VIRACON, INC. | ||||||||
By: | /s/ WILLIAM G. GARDNER | |||||||
Its: | Treasurer | |||||||
W.S.A., INC. | ||||||||
By: | /s/ WILLIAM G. GARDNER | |||||||
Its: | Treasurer | |||||||
ATTEST: | ||||||||
/s/ WILLIAM G. GARDNER | ||||||||
Asst. Secretary Apogee Enterprises, Inc. | ||||||||
AMENDMENT NO. 2 TO APOGEE ENTERPRISES, INC.
PARTNERSHIP PLAN
This Amendment to the Apogee Enterprises, Inc. Partnership Plan (as amended to date, the “Plan”) is made and entered as of April 24, 1992. All terms used in this Amendment shall have the same meaning as in the Plan.
The Plan is amended as set forth below.
1. Section 6.08 of the Plan is amended in its entirety to read as follows:
6.08.Shares Subject to Plan. Apogee hereby authorizes Five Hundred Fifty Thousand (550,000) shares* of Common Stock to be issued or purchased and designated as Pool A Common Stock pursuant to this Plan. Any Pool A shares that are returned to Apogee by Disqualification may be added to the number of shares available under the Plan for the purpose of funding Pool A.
2. Section 7.12 of the Plan is amended in its entirety to read as follows:
7.12.Shares Subject to Plan. Apogee hereby authorizes Five Hundred Fifty Thousand (550,000) shares* of Common Stock to be issued or purchased and designated as Pool B Restricted Stock pursuant to the Plan. Any Restricted Stock awarded to Participants that are returned to Apogee by forfeiture or disqualification may be added to the number of shares available under the Plan for the purpose of funding Pool B.
3. This Amendment shall be effective only upon approval by the shareholders of the Company.
Except as specifically amended hereby, the Plan shall continue in full force and effect in accordance with the terms thereof.
APOGEE ENTERPRISES, INC. | ||
By | ||
Chairman, Compensation Committee | ||
* Increased to 1,100,000 shares pursuant to 2-for-1 stock split in February 1997.
AMENDMENT NO. 3 TO PARTNERSHIP PLAN
RESOLUTIONS TO BE ADOPTED BY
THE COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS OF
APOGEE ENTERPRISES, INC.
WHEREAS, the Board of Directors and shareholders of this corporation have previously approved and adopted the Apogee Enterprises, Inc. Partnership Plan (as amended to date, the “Plan”). All capitalized and undefined terms used herein shall have the meanings given to them in the Plan;
WHEREAS, Section 11.05 of the Plan provides that it may be amended at any time in certain respects by the Compensation Committee of the Board of Directors untilof this corporation, such time as the Board of Directors designates another committeeamendment to act as the Committee.
(g) "Company" shall mean Apogee Enterprises, Inc., a Minnesota corporation, and any successor corporation.
(h) "Director" shall mean a member of the Board of Directors.
(i) "Eligible Person" shall mean any employee, officer, Director, consultant or independent contractor providing servicesbe effective upon written notice to the Company or any Affiliate whoParticipants thereunder; and
WHEREAS, the Compensation Committee determineshas now decided that it is appropriate to be an Eligible Person. Except as otherwise set forth in Section 7 ofamend the Plan to permit a Non-Employee Director shall not be an Eligible Person.
(j) "Exchange Act" shall meanParticipant, at the Securities and Exchange Act of 1934, as amended.
(k) "Fair Market Value" shall mean, with respect to any property (including, without limitation, any Shares or other securities), the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee. Notwithstanding the foregoing, unless otherwise determined by the Committee, the Fair Market Value of Shares on a given date for purposes of the Plan shall be the closing sale price of the Shares as reported on the NASDAQ National
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Market on such date or, if such Market is not open for trading on such date, on the day closest to such date when such Market is open for trading.
(l) "Fixed Grant" shall mean the grant of an annual, 4,000 Share Option to each Non-Employee Director pursuant to Section 7(b) of the Plan.
(m) "Incentive Stock Option" shall mean an option granted under Section 6(a) of the Plan that is intended to meet the requirements of Section 422 of the Code or any successor provision.
(n) "Non-Employee Director" shall mean a director who is not also an employee of the Company or an Affiliate.
(o) "Non-Qualified Stock Option" shall mean an option granted under Section 6(a) of the Plan that is not intended to be an Incentive Stock Option, including a Reload Option and all Options granted pursuant to Section 7 of the Plan.
(p) "Option" shall mean an Incentive Stock Option or a Non-Qualified Stock Option.
(q) "Other Stock-Based Award" shall mean any right granted under Section 6(e) of the Plan.
(r) "Participant" shall mean an Eligible Person designated to be granted an Award under the Plan.
(s) "Performance Award" shall mean any right granted under Section 6(d) of the Plan.
(t) "Person" shall mean any individual, corporation, partnership, association or trust.
(u) "Plan" shall mean this Apogee Enterprises, Inc. 2002 Omnibus Stock Incentive Plan, as amended from time to time.
(v) "Reload Option" shall mean a Non-Qualified Stock Option granted under Section 6(a)(iv) of the Plan.
(w) "Restricted Stock" shall mean any Share granted under Section 6(c) of the Plan.
(x) "Restricted Stock Unit" shall mean any unit granted under Section 6(c) of the Plan evidencing the right to receive a Share (or a cash payment equal to the Fair Market Value of a Share) at some future date.
(y) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities and Exchange Commission under the Exchange Act or any successor rule or regulation.
(z) "Shares" shall meanwhich shares of Common Stock $.331/3 par value, of the Company or such other securities or property as may become subject to Awards pursuant to an adjustment made under Section 4(c) of the Plan.
(aa) "Stock Appreciation Right" shall mean any right granted under Section 6(b) of the Plan.
(bb) "Variable Grant" shall mean the grant of an annual, variable Share Option to each Non-Employee Director pursuant to Section 7(b) of the Plan.
(cc) "1997 Plan" shall mean the Apogee Enterprises, Inc. 1997 Omnibus Stock Incentive Plan, as amended from time to time.
Section 3. Administration.
(a) Power and Authority of the Committee. The Plan shall be administered by the Committee;provided, however, that Section 7 of the Plan shall not be administered by the Committee but rather by the Board of Directors subject to the provisions and restrictions of Section 7. Subject to the express provisions of the Plan and to applicable law, and except with respect to Section 7 of the Plan, the Committee shall
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have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to each Participant under the Plan; (iii) determine the number of Shares to be covered by (or with respect to which payments, rights or other matters are to be calculated in connection with) each Award; (iv) determine the terms and conditions of any Awarddistributed from such Participant’s Trust Fund accounts or Award Agreement; (v) amend the terms and conditions of any Award or Award Agreement and accelerate the exercisability of Options or the lapse of restrictions relating to Restricted Stock, Restricted Stock Units or other Awards; (vi) determine whether, to what extent and under what circumstances Awards may be exercised in cash, Shares, other securities, other Awards or other property, or canceled, forfeited or suspended; (vii) determine whether, to what extent and under what circumstances cash, Shares, other securities, other Awards, other property and other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder thereof or the Committee; (viii) interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan; (ix) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (x) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon any Participant, any holder or beneficiary of any Award and any employee of the Company or any Affiliate.
(b) Delegation. The Committee may delegate its powers and duties under the Plan to one or more officers of the Company or any Affiliate or a committee of such officers, subject to such terms, conditions and limitations as the Committee may establish in its sole discretion;provided, however, that the Committee shall not delegate its powers and duties under the Plan (i) with regard to officers or directors of the Company or any Affiliate who are subject to Section 16 of the Exchange Act or (ii) in such a manner as would cause the Plan not to comply with the requirements of Section 162(m) of the Code.
(c) Power and Authority of the Board of Directors. Notwithstanding anything to the contrary contained herein, the Board of Directors may, at any time and from time to time, without any further action of the Committee, exercise the powers and duties of the Committee under the Plan with regard to any Person who is not an officer or director of the Company or any Affiliate who is subject to Section 16 of the Exchange Act.
Section 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in Section 4(c), the aggregate number of Shares which may be issued under all Awards under the Plan shall be 1,800,000 Shares. If any Shares covered by an Award or to which an Award relates are not purchased or are forfeited, or if an Award otherwise terminates without delivery of any Shares, then the number of Shares counted against the aggregate number of Shares available under the Plan with respect to such Award, to the extent of any such forfeiture or termination, shall again be available for granting Awards under the Plan.
(b) Accounting for Awards. For purposes of this Section 4, if an Award entitles the holder thereof to receive or purchase Shares, the number of Shares covered by such Award or to which such Award relates shall be counted on the date of grant of such Award against the aggregate number of Shares available for granting Awards under the Plan. Any Shares that are used by a Participant as full or partial payment to the Company of the purchase price relating to an Award,Vintage Accounts or, in connection with the satisfaction of tax obligations relating to an Award, including Shares tendered in connection with the exercise of a Reload Option, shall again be available for granting Awards (other than Incentive Stock Options) under the Plan.
(c) Adjustments. In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase
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or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company or other similar corporate transaction or event affects the Shares such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and type of Shares (or other securities or other property) which thereafter may be made the subject of Awards, (ii) the number and type of Shares (or other securities or other property) subject to outstanding Awards and (iii) the purchase or exercise price with respect to any Award;provided, however, that the number of Shares covered by any Award or to which such Award relates shall always be a whole number.
(d) Incentive Stock Options Limitations. The number of Shares available for granting Incentive Stock Options under the Plan shall not exceed 1,440,000 Shares, subject to adjustment as provided in the Plan and Section 422 or 424 of the Code or any successor provision.
(e) Restricted Stock, Restricted Stock Units and Performance Award Limitations. The number of Shares available for granting Restricted Stock, Restricted Stock Units and Performance Awards under the Plan shall not exceed 360,000 Shares, subject to adjustment as provided in the Plan.
(f) Non-Employee Director Award Limitations. No Non-Employee Director may be granted any Award or Awards under the Plan for more than 10,000 Shares in the aggregate in any calendar year.
(g) General Award Limitations. No Eligible Person may be granted any Award or Awards under the Plan, the value of which Awards is based solely on an increase in the value of the Shares after the date of grant of such Awards, for more than 500,000 Shares in the aggregate in any calendar year. The foregoing annual limitation specifically includes the grant of any Awards representing "qualified performance-based compensation" within the meaning of Section 162(m) of the Code.
Section 5. Eligibility.
Any Eligible Person, including any Eligible Person who is an officer or Director of the Company (but not a Non-Employee Director) or any Affiliate, shall be eligible to be designated a Participant. In determining which Eligible Persons shall receive an Award and the terms of any Award, the Committee may take into account the nature of the services rendered by the respective Eligible Persons, their present and potential contributions to the success of the Company or such other factors as the Committee, in its discretion, shall deem relevant. Notwithstanding the foregoing, an Incentive Stock Option may only be granted to full or part-time employees (which term as used herein includes, without limitation, officers and directors who are also employees), and an Incentive Stock Option shall not be granted to an employee of an Affiliate unless such Affiliate is also a "subsidiary corporation" of the Company within the meaning of Section 424(f) of the Code or any successor provision. Non-Employee Directors shall be eligible to receive Awards of Non-Qualified Stock Options under the Plan only as provided in Section 7 of the Plan.
Section 6. Awards.
(a) Options. The Committee is hereby authorized to grant Options to Participants with the following terms and conditions and with such additional terms and conditions not inconsistent with the provisions of the Plan as the Committee shall determine:
(i) Exercise Price. The purchase price per Share purchasable under an Option shall be determined by the Committee;provided, however, that such purchase price shall not be less than 100% of the Fair Market Value of a Share on the date of grant of such Option.
(ii) Option Term. The term of each Option shall be fixed by the Committee; provided that, under all circumstances, no Option shall be granted for a term in excess of 10 years.
(iii) Time and Method of Exercise. The Committee shall determine the time or times at which an Option may be exercised in whole or in part and the method or methods by which, and the form or forms (including, without limitation, cash, Shares, other securities, other Awards or other property, or
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any combination thereof, having a Fair Market Value on the exercise date equal to the relevant exercise price) in which, payment of the exercise price with respect thereto may be made or deemed to have been made.
(iv) Reload Options. The Committee may grant Options ("Reload Options"), separately or together with another Option, pursuant to which, subject to the terms and conditions established by the Committee, the Participant would be granted a new Option when the payment of the exercise price of a previously granted Option is made by the delivery of Shares owned by the Participant pursuant to Section 6(a)(iii) hereof, and/or when Shares are tendered or withheld as payment of the amount to be withheld under applicable income tax laws in connection with the exercise of an Option, which new Option would be an Option to purchase the number of Shares not exceeding the sum of (A) the number of Shares so provided as consideration upon the exercise of the previously granted Option to which such Reload Option relates and (B) the number of Shares, if any, tendered or withheld as payment of the amount to be withheld under applicable tax laws in connection with the exercise of the Option to which such Reload Option relates pursuant to the relevant provisions of the Plan or agreement relating to such Option. Reload Options may be granted with respect to Options previously granted under the Plan or may be granted in connection with any Option granted under the Plan at the time of such grant. Such Reload Options shall have a per share exercise price equal to the Fair Market Value of one Share as of the date of grant of the Reload Option, and shall have a term not to exceed the remaining term of the Option with respect to which the Reload Option was granted. Reload Options may granted only with respect to Non-Qualified Stock Options. No Reload Option may be granted with respect to the exercise of any other Reload Option under this Plan. Reload Options may be granted only to Participants who are Eligible Persons on the date of grant of a Reload Option. No Reload Option may be exercised less than six months after the date of grant of such Reload Option. Any Reload Option shall be subject to availability of sufficient Shares for grant under the Plan. Shares surrendered as part or all of the exercise price of the Option to which it relates that have been owned by the optionee less than six months will not be counted for purposes of determining the number of Shares that may be purchased pursuant to a Reload Option.
(b) Stock Appreciation Rights. The Committee is hereby authorized to grant Stock Appreciation Rights to Participants subject to the terms of the Plan and any applicable Award Agreement. A Stock Appreciation Right granted under the Plan shall confer on the holder thereof a right to receive upon exercise thereof the excess of (i) the Fair Market Value of one Share on the date of exercise (or, if the Committee shall so determine, at any time during a specified period before or after the date of exercise) over (ii) the grant price of the Stock Appreciation Right as specified by the Committee, which price shall not be less than 100% of the Fair Market Value of one Share on the date of grant of the Stock Appreciation Right. Subject to the terms of the Plan and any applicable Award Agreement, the grant price, term, methods of exercise, dates of exercise, methods of settlement and any other terms and conditions of any Stock Appreciation Right shall be as determined by the Committee. The Committee may impose such conditions or restrictions on the exercise of any Stock Appreciation Right as it may deem appropriate.
(c) Restricted Stock and Restricted Stock Units. The Committee is hereby authorized to grant Awards of Restricted Stock and Restricted Stock Units to Participants with the following terms and conditions and with such additional terms and conditions not inconsistent with the provisions of the Plan as the Committee shall determine:
(i) Restrictions. Shares of Restricted Stock and Restricted Stock Units shall be subject to such restrictions as the Committee may impose (including, without limitation, any limitation on the right to vote a Share of Restricted Stock or the right to receive any dividend or other right or property with respect thereto), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise as the Committee may deem appropriate.
(ii) Stock Certificates. Any Restricted Stock granted under the Plan shall be evidenced by issuance of a stock certificate or certificates, which certificate or certificates shall be held by the
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Company. Such certificate or certificates shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock. In the case of Restricted Stock, Units, no Shares shall be issued at the time such Awards are granted.
(iii) Forfeiture; Delivery of Shares. Except as otherwise determined by the Committee,released from escrow upon termination of employment (as determined under criteria established by the Committee) during the applicable restriction period, all Shares of Restricted Stock and all Restricted Stock Units at such time subject to restriction shall be forfeited and reacquired by the Company;provided, however, that the Committee may, when it finds that a waiver would be in the best interest of the Company, waive in whole or in part any or all remaining restrictions with respect to Shares of Restricted Stock or Restricted Stock Units. Any Share representing Restricted Stock that is no longer subject to restrictions shall be delivered to the holder thereof promptly after the applicable restrictions lapse or are waived. Upon the lapse or waiver of restrictions and the restricted period relatingthereon, to Restricted Stock Units evidencing the rightelect either to receive Shares, such Shares shall be issued and delivered to the holders of the Restricted Stock Units.
(d) Performance Awards. The Committee is hereby authorized to grant Performance Awards to Participants subject to the terms of the Plan and any applicable Award Agreement. A Performance Award granted under the Plan (i) may be denominated or payable in cash, Shares (including, without limitation, Restricted Stock and Restricted Stock Units), other securities, other Awards or other property and (ii) shall confer on the holder thereof the right to receive payments, in whole or in part, upon the achievementhave Apogee withhold a portion of such performance goals during such performance periods as the Committee shall establish. Subjectshares or (ii) deliver to the termsApogee previously owned shares of the Plan and any applicable Award Agreement, the performance goals to be achieved during any performance period, the length of any performance period, the amount of any Performance Award granted, the amount of any payment or transfer to be made pursuant to any Performance Award and any other terms and conditions of any Performance Award shall be determined by the Committee.
(e) Other Stock-Based Awards. The Committee is hereby authorized to grant to Participants such other Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares), as are deemed by the Committee to be consistent with the purpose of the Plan;provided, however, that such grants must comply with Rule 16b-3 and applicable law. Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine the terms and conditions of such Awards. Shares or other securities delivered pursuant to a purchase right granted under this Section 6(e) shall be purchased for such consideration, which may be paid by such method or methods and in such form or forms (including, without limitation, cash, Shares, other securities, other Awards or other property or any combination thereof), as the Committee shall determine, the value of which consideration, as established by the Committee, shall not be less than 100% of the Fair Market Value of such Shares or other securities as of the date such purchase right is granted.
(f) General. Except as otherwise specified with respect to Awards to Non-Employee Directors pursuant to Section 7 of the Plan:
(i) No Cash Consideration for Awards. Awards shall be granted for no cash consideration or for such minimal cash consideration as may be required by applicable law.
(ii) Awards May Be Granted Separately or Together. Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with or in substitution for any other Award or any award granted under any plan of the Company or any Affiliate other than the Plan. Awards granted in addition to or in tandem with other Awards or in addition to or in tandem with awards granted under any such other plan of the Company or any Affiliate may be granted either at the same time as or at a different time from the grant of such other Awards or awards.
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(iii) Forms of Payment under Awards. Subject to the terms of the Plan and of any applicable Award Agreement, payments or transfers to be made by the Company or an Affiliate upon the grant, exercise or payment of an Award may be made in such form or forms as the Committee shall determine (including, without limitation, cash, Shares, other securities, other Awards or other property or any combination thereof), and may be made in a single payment or transfer, in installments or on a deferred basis,Apogee Common Stock, in each case, in accordance with rulesto pay all applicable federal and procedures establishedstate taxes owed by the Committee. Such rules and procedures may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments.
(iv) Limits on Transfer of Awards. No Award and no right under any such Award shall be transferable by a Participant otherwise than by will or by the laws of descent and distribution;provided, however, that, if so determined by the Committee, a Participant may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of the Participant and receive any property distributable with respect to any Award upon the death of the Participant. Each Award or right under any Award shall be exercisable during the Participant's lifetime only by the Participant or, if permissible under applicable law, by the Participant's guardian or legal representative. No Award or right under any such Award may be pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation, attachment or encumbrance thereof shall be void and unenforceable against the Company or any Affiliate.
(v) Term of Awards. The term of each Award shall be for such period as may be determined by the Committee;provided that, under all circumstances, no Award shall be granted for a term in excess of 10 years from the date of grant.
(vi) Restrictions; Securities Exchange Listing. All certificates for Shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations and other requirements of the Securities and Exchange Commission and any applicable federal or state securities laws, and the Committee may cause a legend or legends to be placed on any such certificates to make appropriate reference to such restrictions. If the Shares or other securities are traded on a securities exchange, the Company shall not be required to deliver any Shares or other securities covered by an Award unless and until such Shares or other securities have been admitted for trading on such securities exchange.
(vii) Prohibition on Option Repricing. Except as provided in Section 4(c) hereof, no Option may be amended to reduce its initial exercise price and no Option shall be canceled and replaced with an Option or Options having a lower exercise price.
(viii) Transfers of Participants to Non-Affiliates. Except as may otherwise be provided by the Committee, in the event that a Participant's employment with the Company or an Affiliate is terminated through the transfer of employment of such Participant to an entity which the Committee has determined is not an Affiliate, the Award Agreement shall provide that: (i) all Awards that are not vested on the date of such transfer shall immediately be forfeited, and (ii) all Awards that are vested on such date may be exercised for a period not to exceed three months after such date.
Section 7. Awards to Non-Employee Directors.
(a) Eligibility. If the Plan is approved by the shareholders of the Company at the 2002 Annual Meeting of Shareholders, Options shall be granted automatically under the plan to each Non-Employee Director under the terms and conditions contained in this Section 7. The authority of the Committee under this Section 7 shall be limited to ministerial and non-discretionary matters. Notwithstanding anything to the contrary in the 1997 Plan, if the Plan is approved by the Company's shareholders, no further automatic grants of options shall be made to Non-Employee Directors under the 1997 Plan, and all such grants to Non-Employee Directors shall be made solely under the Plan.
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(b) Annual Fixed and Variable Option Grants. Each Non-Employee Director shall be granted an Option to purchase 4,000 Shares (the "Fixed Grant") (i) on the date of such Non-Employee Director's election or reelection to the Board of Directors and (ii) on the date of each other annual meeting of shareholders as to which such Non-Employee Director is in office and whose term of office as a director is not expiring on such date, in each case, commencing with the 2002 Annual Meeting of Shareholders. In addition to the Fixed Grant, on the same date as the Fixed Grant is made, each Non-Employee Director shall also be granted an additional Option (the "Variable Grant") to purchase a number of Shares such that, when combined with the Fixed Grant, the total number of Shares subject to the two Options shall equal an amount of Shares that will provide the Non-Employee Director with dollar-denominated, equity-based compensation equal to the dollar-denominated, equity-based compensation received by non-employee directors in the fiftieth percentile of a comparator group of public companies selected by the Committee (the "Comparator Group") with the assistance of an independent consulting firm expert in such matters (the "Consultant"), and reviewed with the Committee on an annual basis. The method of determining the annual Variable Grant shall be as follows:
1. The Committee, with the assistance of the Consultant, shall first determine the dollar-denominated value of the equity-based compensation received by non-employee directors in the fiftieth percentile of the Comparator Group for the most recent fiscal period for such Group (the "Comparator Equity Value");
2. The Committee shall then divide the Comparator Equity Value by 33% of the Fair Market Value of one Share to determine the aggregate number of Shares covered by Options to be issued to each Non-Employee Director for such period, subject to Section 4(f) above (the "Total Option Shares"); and
3. The Committee shall then subtract the Fixed Grant from the Total Option Shares; the resulting amount shall be the number of Shares subject to the Variable Grant to be made to each Non-Employee Director for such period.
(c) General Terms of Option Grants. The exercise price of each Option granted to a Non-Employee Director pursuant to this Section 7 shall be equal to 100 percent of the Fair Market Value per Share on the date of grant. All such Options shall be Non-Qualified Stock Options, shall become exercisable six months after the date of grant, and shall terminate on the tenth anniversary of the date of grant, unless previously exercised or terminated. All such Options shall be subject to the terms and conditions of Sections 6(a) and 10 of the Plan and to other standard terms and conditions contained in the form of Non-Qualified Stock Option Agreement used by the Company from time to time.
(d) Exercise of Non-Employee Director Options. Non-Qualified Stock Options granted to Non-Employee Directors may be exercised in whole or in part from time to time by serving written notice of exercise on the Company at its principal executive offices, to the attention of the Company's Secretary. The notice shall state the number of Shares as to which the Option is being exercised and be accompanied by payment of the purchase price. A Non-Employee Director may, at such Director's election, pay the purchase price by check payable to the Company, in Shares, or in any combination thereof having a Fair Market Value on the exercise date equal to the applicable exercise price.
(e) Amendments to Section 7. The provisions of this Section 7 may not be amended more often than once every six months other than to comply with changes in the Code or the rules and regulations promulgated under the Code.
Section 8. Amendment and Termination; Adjustments.
Except to the extent prohibited by applicable law and unless otherwise expressly provided in an Award Agreement or in the Plan:
(a) Amendments to the Plan. The Board of Directors of the Company may amend, alter, suspend, discontinue or terminate the Plan;provided, however, that, notwithstanding any other provision of the Plan
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or any Award Agreement, without the approval of the shareholders of the Company, no such amendment, alteration, suspension, discontinuation or termination shall be made that, absent such approval:
(i) would cause Rule 16b-3 or Section 162(m) of the Code to become unavailable with respect to the Plan;shares of Common Stock to be so distributed or released from escrow.
(ii) would violate
NOW, THEREFOR, BE IT RESOLVED, that the rules or regulationsPlan is hereby amended to add a new Section 11.06 of the NASDAQ National Market, any other securities exchange orPlan in the National Association of Securities Dealers, Inc. that are applicable to the Company; or
(iii) would cause the Companyform attached hereto as Exhibit A, such amendment to be unable, undereffective upon the Code,written notice thereof to grant Incentive Stock Options underall Participants.
FURTHER RESOLVED, that the Plan.
(b) Amendments to Awards. The Committee may waive any conditions of or rightsofficers of the Company under any outstanding Award, prospectively or retroactively. The Committee may not amend, alter, suspend, discontinue or terminate any outstanding Award, prospectively or retroactively, without the consent of the Participant or holder or beneficiary thereof, except as otherwise herein provided or in the Award Agreement. Notwithstanding the foregoing, the Committee shall not waive any conditions or rights, or otherwise amend or modify any outstanding Award in such a manner asCorporation are hereby authorized and directed to cause written notice of such Award notamendment to constitute "qualified performance-based compensation" withinbe delivered to all Participants as soon as possible after the meaning of Section 162(m) of the Code.date hereof.
(c) Correction of Defects, Omissions and Inconsistencies. The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem desirable to carry the Plan into effect.
Section 9.Dated: January 10, 1997.
/s/ HARRY A. HAMMERLY | ||
Harry A. Hammerly | ||
/s/ STEPHEN C. MITCHELL | ||
Stephen C. Mitchell | ||
/s/ D. EUGENE NUGENT | ||
D. Eugene Nugent | ||
EXHIBIT A
11.06 Income Tax Withholding; Tax Bonuses.
(a)Withholding. In order to comply with all applicable federal or state income tax laws or regulations, the CompanyApogee may take such action as it deems appropriate to ensure that all applicable federal or state payroll, withholding, income or other taxes, which are the sole and absolute responsibility of a Participant under the Plan, are withheld or collected from such Participant. In order to assist a Participant in paying all or a portion of the federal and state taxes to be withheld or collected upon exercise either (i) a distribution from any Trust Fund accounts and/or receiptVintage Accounts of (orsuch Participant or (ii) the release from escrow of shares of Restricted Stock by the Plan Administrator upon the lapse of restrictions relating to) an Award,with respect to such shares, the Committee, in its absolute discretion and subject to such additional terms and conditions as it may adopt, mayshall permit the Participant to satisfy such tax obligation by either (i) electing to have the CompanyApogee withhold a portion of the Sharesshares otherwise to be delivered to Participant upon exercisesuch distribution or receipt of (or the lapse of restrictions relating to) such Award withrelease having a Fair Market Value on the date of such distribution or release equal to the amount of such taxes, or (ii) delivering to the Company SharesApogee shares of Common Stock, other than Sharesthe shares issuable to Participant upon exercisesuch distribution or receipt of (or the lapse of restrictions relating to) such Awardrelease, with a Fair Market Value on the date of such distribution or release equal to the amount of such taxes. The election, if any, must be made on or before the date that the amount of tax to be withheld is determined.
AMENDMENT NO. 4 TO APOGEE ENTERPRISES, INC.
Section 10. General Provisions.PARTNERSHIP PLAN
(a) No Rights
This Amendment to Awards. No Eligible Person, Participant or other Personthe Apogee Enterprises, Inc. Partnership Plan (as amended to date, the “Plan”) is made and entered as of January 9, 1998. All terms used in this Amendment shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Eligible Persons, Participants or holders or beneficiaries of Awards undersame meaning as in the Plan.
The terms and conditions of Awards need not be the same with respect to any Participant or with respect to different Participants.Plan is amended as set forth below.
(b) Delegation. The Committee may delegate to one or more officers of the Company or any Affiliate or a committee of such officers the authority, subject to such terms and limitations as the Committee shall determine, to grant Awards to Eligible Persons who are not officers or directors of the Company for purposes of
1. Section 16 of the Exchange Act.
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(c) Award Agreements. No Participant will have rights under an Award granted to such Participant unless and until an Award Agreement shall have been duly executed on behalf of the Company and, if requested by the Company, signed by the Participant.
(d) No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases.
(e) No Right to Employment. The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Company or any Affiliate, nor will it affect in any way the right of the Company or an Affiliate to terminate such employment at any time, with or without cause. In addition, the Company or an Affiliate may at any time dismiss a Participant from employment free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award Agreement. Nothing in this Plan shall confer on any person any legal or equitable right against the Company or any Affiliate, directly or indirectly, or give rise to any cause of action at law or in equity against the Company or an Affiliate. The Awards granted hereunder shall not form any part of the wages or salary of any Eligible Person for purposes of severance pay or termination indemnities, irrespective of the reason for termination of employment. Under no circumstances shall any person ceasing to be an employee of the Company or any Affiliate be entitled to any compensation for any loss of any right or benefit under the Plan which such employee might otherwise have enjoyed but for termination of employment, whether such compensation is claimed by way of damages for wrongful or unfair dismissal, breach of contract or otherwise. By participating in the Plan, each Participant and each Non-Employee Director shall be deemed to have accepted all the conditions6.08 of the Plan and the terms and conditionsis amended in its entirety to read as follows:
One Million Six Hundred Thousand (1,600,000) shares of any rules and regulations adopted by the Committee and shall be fully bound thereby.
(f) Governing Law. The validity, construction and effect of the Plan or any Award, and any rules and regulations relatingCommon Stock to the Plan or any Award, shall be determined in accordance with the laws of the State of Minnesota.
(g) Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan or any Award under any law deemed applicable by the Committee (or, in the case of grants under Section 7 of the Plan, the Board of Directors), such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee (or, in the case of grants under Section 7 of the Plan, the Board of Directors), materially altering the purpose or intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction or Award, and the remainder of the Plan or any such Award shall remain in full force and effect.
(h) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Affiliate.
(i) No Fractional Shares. No fractional Shares shall be issued or deliveredpurchased and designated as Pool A Common Stock pursuant to the Plan or any Award, and the Committee shall determine whether cash shallthis Plan. Any Pool A shares that are returned to Apogee by Disqualification may be paid in lieu of any fractional Shares or whether such fractional Shares or any rights thereto shall be canceled, terminated or otherwise eliminated.
(j) Headings. Headings are givenadded to the Sections and subsectionsnumber of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.
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(k) Other Benefits. No compensation or benefit awarded to or realized by any Participantshares available under the Plan shall be included for the purpose of computing such Participant's compensation under any compensation-based retirement, disability, or similar plan of the Company unless required by law or otherwise provided by such other plan.
Section 11. Section 16(b) Compliance.funding Pool A.
The Plan is intended to comply in all respects with Rule 16b-3 or any successor provision, as in effect from time to time, and in all events the Plan shall be construed in accordance with the requirements of Rule 16b-3. If any Plan provision does not comply with Rule 16b-3 as hereafter amended or interpreted, the provision shall be deemed inoperative. The Board of Directors, in its absolute discretion, may bifurcate the Plan so as to restrict, limit or condition the use of any provision
2. Section 7.12 of the Plan is amended in its entirety to participants whoread as follows:
7.12.Shares Subject to Plan. Apogee hereby authorizes One Million Six Hundred Thousand (1,600,000) shares of Common Stock to be issued or purchased and designated as Pool B Restricted Stock pursuant to the Plan. Any Restricted Stock awarded to Participants that are officersreturned to Apogee by forfeiture or directors subjectdisqualification may be added to Section 16the number of the Exchange Act without so restricting, limiting or conditioningshares available under the Plan with respect to other participants.
Section 12. Effective Datefor the purpose of the Plan.funding Pool B.
The Plan
3. This Amendment shall be effective as of June 18, 2002, subject to approval of the Company's shareholders on such date or within one year thereafter.
Section 13. Term of the Plan.
Awards shall only be granted under the Plan during a 10-year period beginning on the effective date of the Plan. However, unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award theretofore granted may extend beyond the end of such 10-year period, and the authority of the Committee provided for hereunder with respect to the Plan and any Awards, and the authority of the Board to amend the Plan, shall extend beyond the termination of the Plan.
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EXHIBIT BAPOGEE ENTERPRISES, INC.EXECUTIVE MANAGEMENT INCENTIVE PLAN
Section 1. Establishment; Purpose
(a) Establishment. On April 11, 2002, the Board of Directors of Apogee Enterprises, Inc., a Minnesota corporation (the "Company"), upon recommendation by the Compensation Committee of the Company's Board of Directors, approved an incentive plan for executive officers as described herein, which plan shall be known as the "Apogee Enterprises, Inc. Executive Management Incentive Plan" (the "Plan"). The Plan shall be submitted for approval by the shareholders of the Company.
Except as specifically amended hereby, the Plan shall continue in full force and effect in accordance with the terms thereof.
APOGEE ENTERPRISES, INC. | ||
By | /s/ STEPHEN C. MITCHELL | |
Chairman, Compensation Committee | ||
AMENDMENT NO. 5 TO APOGEE ENTERPRISES, INC.
PARTNERSHIP PLAN
This Amendment to the Apogee Enterprises, Inc. Partnership Plan (as amended to date, the “Plan”) is made and entered into as of January 18, 2001.
1. On January 18, 2001, following the recommendation of the Compensation Committee of the Board of Directors (the “Compensation Committee”) of Apogee Enterprises, Inc. (the “Company”), the Board of Directors of the Company adopted the following resolutions to amend the Plan in the manner described below:
WHEREAS, the Compensation Committee, after completing a study of the Company’s overall compensation program with the assistance of an outside consultant, has concluded that the absolute $100,000 limitation on annual deferrals of bonus compensation into the Plan is no longer appropriate for the Company; and
WHEREAS, to be effective under the terms of the Plan, such an amendment requires the approval of the Company’s shareholders; and
WHEREAS, the Board of Directors of the Company, after considering the recommendation of the Compensation Committee, and noting that removal of such limitation will further the important goal of enabling key employees to obtain more shares of Company stock through the Plan and thereby further align their interests with those of the public shareholders, believes such amendment to be in the best interests of the Company and its shareholders.
NOW, THEREFORE, BE IT RESOLVED, that, subject to the requisite approval of the Company’s shareholders, the first sentence of Article III of the Partnership Plan is hereby amended, effective as of the time immediately following such shareholder approval, to delete the all of the following, which currently appears after the semi-colon following clause (ii) thereof: “provided, however, that the maximum that can be deferred hereunder for a Fiscal Year is $100,000.”
FURTHER RESOLVED, that the officers of the Company are hereby authorized and directed to take any and all such actions as are necessary or appropriate, including preparation of appropriate proxy statement materials, to cause such amendment to be brought before the shareholders for their consideration at the Company's 2002Company’s 2001 Annual MeetingMeeting.”
2. This Amendment shall constitute an amendment in accordance with the terms of Shareholders. The PlanSection 11.05 of the Plan.
3. This Amendment shall be effective as of March 3, 2002, subjectthe date on which the shareholders of the Company approve this Amendment.
4. Except as specifically amended hereby, the Plan shall continue in full force and effect in accordance with the terms thereof.
APOGEE ENTERPRISES, INC. | ||
By | /s/ STEPHEN C. MITCHELL | |
Name: | Stephen C. Mitchell | |
Title: | Compensation Committee Member | |
AMENDMENT NO. 6 TO APOGEE ENTERPRISES, INC.
PARTNERSHIP PLAN
This Amendment to the Apogee Enterprises, Inc. Partnership Plan (as amended to date, the “Plan”) is made and entered into as of January 17, 2002. All terms used in this Amendment shall have the same meaning as in the Plan.
The Plan is amended as follows:
1. Section 6.08 of the Plan is amended effective upon written notice to Participants in its entirety to read as follows:
6.08Shares Subject to Plan. Apogee hereby authorizes One Million Seven Hundred Fifty Thousand (1,750,000) shares of Common Stock to be issued or purchased and designated as Pool A Common Stock pursuant to this Plan. Any Pool A shares that are returned to Apogee by Disqualification may be added to the number of shares available under the Plan for the purpose of funding Pool A.
2. Section 7.12 of the Plan is amended effective upon written notice to Participants in its entirety to read as follows:
7.12Shares Subject to Plan. Apogee hereby authorizes One Million Four Hundred Fifty Thousand (1,450,000) shares of Common Stock to be issued or purchased and designated as Pool B Restricted Stock pursuant to this Plan. Any Restricted Stock awarded to Participants that are returned to Apogee by forfeiture or disqualification may be added to the number of shares available under the Plan for the purpose of funding Pool B.
Except as specifically amended hereby, the Plan shall continue in full force and effect in accordance with the terms thereof.
APOGEE ENTERPRISES, INC. | ||
By: | /s/ MICHAEL E. SHANNON | |
Chairman, Compensation Committee | ||
AMENDMENT NO. 7 TO APOGEE ENTERPRISES, INC.
PARTNERSHIP PLAN
This Amendment to the Apogee Enterprises, Inc. Partnership Plan (as amended to date, the “Plan”) is made and entered into as of April 10, 2003. All terms used in this Amendment shall have the same meaning as in the Plan.
The Plan is amended as follows:
1. Section 6.08 of the Plan is amended effective upon written notice to Participants in its entirety to read as follows:
6.08Shares Subject to Plan. Apogee hereby authorizes One Million Seven Hundred Seventy Five Thousand (1,775,000) shares of Common Stock to be issued or purchased and designated as Pool A Common Stock pursuant to this Plan. Any Pool A shares that are returned to Apogee by Disqualification may be added to the number of shares available under the Plan for the purpose of funding Pool A.
2. Section 7.12 of the Plan is amended effective upon written notice to Participants in its entirety to read as follows:
7.12Shares Subject to Plan. Apogee hereby authorizes One Million Four Hundred Twenty Five Thousand (1,425,000) shares of Common Stock to be issued or purchased and designated as Pool B Restricted Stock pursuant to this Plan. Any Restricted Stock awarded to Participants that are returned to Apogee by forfeiture or disqualification may be added to the number of shares available under the Plan for the purpose of funding Pool B.
Except as specifically amended hereby, the Plan shall continue in full force and effect in accordance with the terms thereof.
APOGEE ENTERPRISES, INC. | ||
By: | /s/ MICHAEL E. SHANNON | |
Chairman, Compensation Committee | ||
AMENDMENT NO. 8 TO APOGEE ENTERPRISES, INC.
PARTNERSHIP PLAN
This Amendment to the Apogee Enterprises, Inc. Partnership Plan (as amended to date, the “Plan”) is made and entered as of April 10, 2003. All terms used in this Amendment shall have the same meaning as in the Plan.
The Plan is amended as set forth below.
1. Section 6.08 of the Plan is amended in its entirety to read as follows:
6.08.Shares Subject to Plan. Apogee hereby authorizes Two Million One Hundred Seventy Five Thousand (2,175,000) shares of Common Stock to be issued or purchased and designated as Pool A Common Stock pursuant to this Plan. Any Pool A shares that are returned to Apogee by Disqualification may be added to the number of shares available under the Plan for the purpose of funding Pool A.
2. Section 7.12 of the Plan is amended in its entirety to read as follows:
7.12.Shares Subject to Plan. Apogee hereby authorizes One Million Eight Hundred Twenty Five Thousand (1,825,000) shares of Common Stock to be issued or purchased and designated as Pool B Restricted Stock pursuant to the Plan. Any Restricted Stock awarded to Participants that are returned to Apogee by forfeiture or disqualification may be added to the number of shares available under the Plan for the purpose of funding Pool B.
3. This Amendment shall be effective only upon approval by the shareholders of the Company, and no payments shall be made pursuant to the Plan until after the Plan has been approved by the shareholders of the Company.
(b) Purpose. The purpose of the Plan is to provide a direct financial incentive for executive officers of the Company to make a significant contribution to the annual strategic and financial goals of the Company.
Section 2. Administration
(a) Composition of the Committee. The Plan shall be administered by the Compensation Committee of the Company's Board of Directors, or a sub-committee thereof (the "Committee"). To the extent required by Section 162(m) of the Internal Revenue Code of 1986,Except as specifically amended (the "Code"), the Committee administeringhereby, the Plan shall be composed solely of two or more "outside directors" within the meaning of Section 162(m) of the Code.
(b) Powercontinue in full force and Authority of the Committee. The Committee shall have full power and authority, subject to all the applicable provisions of the Plan (including but not limited to the requirements of Section 2(d) of the Plan) and applicable law, to (i) establish, amend, suspend, terminate or waive such rules and regulations and appoint such agents as it deems necessary or advisable for the proper administration of the Plan, (ii) construe, interpret and administer the Plan and any instrument or agreement relating to, or any Annual Bonus Award (as defined below in Section 3(b)) made under, the Plan, and (iii) make all other determinations and take all other actions necessary or advisable for the administration of the Plan. Unless otherwise expressly provided in the Plan, each determination made and each action taken by the Committee pursuant to the Plan or any instrument or agreement relating to, or Annual Bonus Award made under, the Plan shall be within the sole discretion of the Committee, may be made at any time and shall be final, binding and conclusive for all purposes on all persons, including, but not limited to, holders of Annual Bonus Awards, and their legal representatives and beneficiaries, and employees of the Company or of any "Affiliate" of the Company. For purposes of the Plan and any instrument or agreement relating to, or any Annual Bonus Award made under, the Plan, the term "Affiliate" shall mean any entity that, directly or indirectly through one or more intermediaries, is controlled by the Company and any entity in which the Company has a significant equity interest, in each case as determined by the Committee in its sole discretion.
(c) Delegation. The Committee may delegate its powers and duties under the Plan to one or more executive officers of the Company or any Affiliate or a committee of such executive officers, subject to such terms, conditions and limitations as the Committee may establish in its sole discretion;provided, however, that the Committee shall not delegate its power to (a) amend the Plan as provided in Section 8 hereof or (b) make determinations regarding Performance-Based Awards (as defined below in Section 2(d)).
(d) Qualified Performance-Based Compensation. From time to time, the Committee may designate an Annual Bonus Award as an award of "qualified performance-based compensation" within the meaning
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of Section 162(m) of the Code (hereinafter referred to as a "Performance-Based Award"). Notwithstanding any other provision of the Plan to the contrary, the following additional requirements shall apply to all Performance-Based Awards made to any Participant (as defined below in Section 3(b)) under the Plan:
(i) Any Performance-Based Award shall be null and void and have no effect whatsoever unless the Plan shall have been approved by the shareholders of the Company at the Company's 2002 Annual Meeting of Shareholders.
(ii) The right to receive a Performance-Based Award shall be determined solely on account of the attainment of one or more pre-established, objective performance goals selected by the Committee in connection with the grant of the Performance-Based Award. Such performance goals may apply to the Participant individually, an identifiable business unit of the Company or the Company as a whole. The performance goals shall be based solely on one or more of the following business criteria:
The foregoing shall constitute the sole business criteria upon which the performance goals under this Plan shall be based.
(iii) The target and range of a Participant's possible awards established by the Committee shall be between zero and 150% of the Participant's annual base compensation for the Chief Executive Officer. The target and range of a Participant's possible awards established by the Committee shall be between zero and 100% of the Participant's annual base compensation for each of the Executive Vice Presidents, the Chief Financial Officer and the General Counsel. For other Participants, the Committee shall establish such targets and ranges. The maximum bonus which may be paid to any Participant pursuant to any Performance-Based Award with respect to any fiscal year shall not exceed $1,500,000.
(iv) For a Performance-Based Award, the Committee shall, not later than 90 days after the beginning of each fiscal year of the company:
(v) Following the close of each fiscal year and prior to payment of any amount to any Participant under the Plan, the Committee must certify in writing as to the attainment of all factors (including the performance factors for a Participant) upon which any payments to a Participant for that fiscal year are to be based.
(vi) Each of the foregoing provisions, and all of the other terms and conditions of the Plan as it applies to any Performance-Based Award, shall be interpreted in such a fashion so as to qualify all compensation paid thereunder as "qualified performance-based compensation" within the meaning of Section 162(m) of the Code.
Section 3. Eligibility and Participation
(a) Eligibility. The Plan is maintained by the Company for its executive officers. In order to be eligible to participate in the Plan, an executive officer of the Company or any of its Affiliates must be
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selected by the Committee. In determining the executive officers who will participate in the Plan, the Committee may take into account the nature of the services rendered by such executive officers, their present and potential contributions to the success of the Company and such other factors as the Committee, in its sole discretion, shall deem relevant. A director of the Company or of an Affiliate who is not also an employee of the Company or an Affiliate, and all members of the Committee, shall not be eligible to participate in the Plan.
(b) Participation. The Committee shall determine the employees eligible to be granted an annual bonus award (an "Annual Bonus Award"). The provisions of the Annual Bonus Awards need not be the same with respect to any recipient of an Annual Bonus Award (the "Participant") or with respect to different Participants. The Committee's decision to approve an Annual Bonus Award to an employee in any year shall not require the Committee to approve a similar Annual Bonus Award or any Annual Bonus Award at all to that employee or any other employee or person at any future date. The Company and the Committee shall not have any obligation for uniformity of treatment of any person, including, but not limited to, Participants and their legal representatives and beneficiaries and employees of the Company or of any Affiliate of the Company.
(c) Bonus Award Agreement. Any employee selected for participation by the Committee shall, as a condition of participation, execute and return to the Committee a written agreement setting forth the terms and conditions of the Annual Bonus Award (the "Bonus Award Agreement"). A separate Bonus Award Agreement will be entered into between the Company and each Participant for each Annual Bonus Award.
(d) Employment. In the absence of any specific agreement to the contrary, no Annual Bonus Award to a Participant under the Plan shall affect any right of the Company, or of any Affiliate of the Company, to terminate, with or without cause, the Participant's employment with the Company or any Affiliate at any time. Neither the establishment of the Plan, nor the granting of any Annual Bonus Award hereunder, shall give any Participant: (i) any rights to remain employed by the Company or any Affiliate; (ii) any benefits not specifically provided for herein or in any Annual Bonus Award granted hereunder; or (iii) any rights to prevent the Company or any Affiliate from modifying, amending or terminating any of its other benefit plans of any nature whatsoever.
Section 4. Annual Bonus Awards
(a) General. The Committee shall determine the amount of the bonus to be paid to a Participant pursuant to each Annual Bonus Award, the time or times when Annual Bonus Awards will be made, and all other terms and conditions of each Annual Bonus Award. Each Annual Bonus Award shall be subject to the terms and conditions of the Plan and the applicable Bonus Award Agreement. Annual Bonus Awards may be granted singly or in combination, or in addition to, in tandem with or in substitution for any grants or rights under any other employee or compensation plan of the Company or of any Affiliate. Bonus Award Agreements may provide that more or less than 100% of the target Annual Bonus Award granted thereunder may be earned upon satisfaction of the conditions provided for therein, subject to the terms and conditions of the Plan. All or part of an Annual Bonus Award may be subject to conditions and forfeiture provisions established by the Committee and set forth in the Bonus Award Agreement, which may include, but are not limited to, continuous service with the Company or an Affiliate.
(b) Payment of Annual Bonus Awards. Any bonus paid pursuant to an Annual Bonus Award shall be paid solely in the form of cash or stock. The Committee shall determine whether the Annual Bonus Award is paid in the form of cash or stock. Payment of any such bonuses may be made, subject to any deferred compensation election which may be permitted pursuant to any deferred compensation plan, at such times, with such restrictions and conditions as the Committee, in its sole discretion, may determine at the time of grant of the Annual Bonus Awards.
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(c) Discretionary Reduction. The Committee shall retain sole and full discretion to reduce, in whole or in part, the amount of any award otherwise payable to any Participant under this Plan.
Section 5. Termination of Employment
Each Bonus Award Agreement shall include provisions governing the disposition of an Annual Bonus Award in the event of the retirement, disability, death or other termination of a Participant's employment with the Company or an Affiliate.
Section 6. Nontransferability
Except as otherwise determined by the Committee or set forth in the applicable Bonus Award Agreement, no right under any Annual Bonus Award shall be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of during the time in which the requirement of continued employment or attainment of performance objectives has not been achieved.
Section 7. Taxes
In order to comply with all applicable federal or state income, social security, payroll, withholding or other tax laws or regulations, the Company may take such action, and may require a Participant to take such action, as it deems appropriate to ensure that all applicable federal or state income, social security, payroll, withholding or other taxes, which are the sole and absolute responsibility of the Participant, are withheld or collected from such Participant.
Section 8. Amendment and Termination
(a) Term of Plan. Unless the Plan shall have been discontinued or terminated as provided in Section 8(b) hereof, no Annual Bonus Awards shall be granted under the Plan after March 3, 2007, and no Annual Bonus Awards shall be paid except with respect to the Company's fiscal year ending not later than March 3, 2007. No Annual Bonus Awards may be granted after such termination, but termination of the Plan shall not alter or impair any rights or obligations under any Annual Bonus Award theretofore granted (including the payment of such Annual Bonus Award within the time period permitted by the Code, as the same may be amended from time to time), without the consent of the Participant or holder or beneficiary thereof, except as otherwise provided in the Bonus Award Agreement.
(b) Amendments to and Termination of Plan. Except to the extent prohibited by applicable law and unless otherwise expressly provided in the Plan or a Bonus Award Agreement, the Committee may amend, alter, suspend, discontinue or terminate the Plan;provided, however, that notwithstanding any other provision of the Plan or any Bonus Award Agreement, without the approval of the shareholders of the Company, no such amendment, alteration, suspension, discontinuation or termination shall be made that, absent such approval, would cause any compensation paid pursuant to any Performance-Based Award granted pursuant to the Plan no longer to qualify as "qualified performance-based compensation" within the meaning of Section 162(m) of the Code.
(c) Correction of Defects, Omissions and Inconsistencies. Except to the extent prohibited by applicable law and unless otherwise expressly provided in the Plan or a Bonus Award Agreement, the Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan, any Annual Bonus Award or any Bonus Award Agreement in the manner and to the extent it shall deem desirable to carry the Plan into effect.
Section 9. Miscellaneous
(a) Governing Law. The Plan and any Bonus Award Agreement shall be governed by and construed in accordance with the internal laws, and not the laws of conflicts, of the State of Minnesota.terms thereof.
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(b) Severability. If any provision of the Plan, any Annual Bonus Award or any Bonus Award Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan, any Annual Bonus Award or any Bonus Award Agreement under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan, the Annual Bonus Award or the Bonus Award Agreement, such provision shall be stricken as to such jurisdiction, and the remainder of the Plan, any such Annual Bonus Award or any such Bonus Award Agreement shall remain in full force and effect.
(c) No Trust or Fund Created. Neither the Plan nor any Annual Bonus Award or Bonus Award Agreement shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other person. To the extent that any person acquires a right to receive payments from the Company or any Affiliate pursuant to an Annual Bonus Award, such right shall be no greater than the right of any unsecured general creditor of the Company or of any Affiliate.
(d) Nature of Payments. Any and all cash or stock payments pursuant to any Annual Bonus Award granted hereunder shall constitute special incentive payments to the Participant, and such payments shall not be taken into account in computing the amount of the Participant's salary or compensation for purposes of determining any pension, retirement, death or other benefits under (i) any pension, retirement, profit sharing, bonus, life insurance or other employee benefit plan of the Company or any Affiliate or (ii) any agreement between the Company (or any Affiliate) and the Participant, except to the extent that such plan or agreement expressly provides to the contrary.
(e) Headings. Headings are given to the Sections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.
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APOGEE | ||||||
By: |
| |||||
Chairman, Compensation Committee | ||||||
- DETACH PROXY CARD HERE IF YOU ARE NOT VOTING BY TELEPHONE OR INTERNET -
Please date, sign and mail your Proxy Card as soon as possible!
Annual Meeting of ShareholdersAPOGEE ENTERPRISES, INC.June 18, 2002
APOGEE ENTERPRISES, INC.
June 17, 2003
APOGEE ENTERPRISES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints RUSSELL HUFFER, MICHAEL B. CLAUER and PATRICIA A. BEITHON as Proxies, each with the power to appoint his or her substitute, and hereby authorizes any one of them to represent and to vote, as designated on the reverse, all of the shares of Common Stock of Apogee Enterprises, Inc. ("Apogee"(“Apogee”) held of record by the undersigned on April 24, 2002,23, 2003, at theAnnual Meeting of Shareholdersof Apogee to be held onJune 18, 200217, 2003, or any adjournment thereof, and hereby revokes all former Proxies.
This Proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder.If no direction is made, this proxy will be voted FOR Proposals 1, 2 3 and 4.3.
If you are a participant in the Apogee Employee Stock Purchase Plan, this card directs U.S. Bancorp Piper Jaffray Inc., as the Plan Custodian,Administrator, to authorize the Bank of New York as the Proxy Agent, to vote, as designated on the reverse, all of the shares of Apogee Common Stock held of record in your Plan account. The Plan CustodianProxy Agent cannot vote your shares unless it receives timely direction from you.
If you are a participant in the Apogee Retirement Plan and/or the Apogee 401(k) Retirement Plan, this card directs State Street Bank and Trust Company, as Trustee for each of the Plans,Plan to vote, as designated on the reverse, all of the shares of Apogee Common Stock held of record in your Plan account(s).account. The Trustee will vote with regard to each Plan, shares of Apogee Common Stock for which it has not received direction in the same proportion as directed shares are voted.
(Continued,continued and to be signed on reverse side)
APOGEE ENTERPRISES, INC.
P.O. BOX 11342
NEW YORK, N.Y. 10203-0342
To change your address, please mark this box. o¨
APOGEE ENTERPRISES, INC. | Three Alternate Ways to Vote Your Proxy VOTE BY TELEPHONE OR INTERNET 24 Hours a Day – 7 Days a Week Save Your Company Money – It’s Fast and Convenient |
TELEPHONE | INTERNET | |||||||
1-866-388-1535 | https://www.proxyvotenow.com/apo | |||||||
Ÿ Use any touch-tone telephone. | Ÿ Go to the website address listed above. | Ÿ Mark, sign and date your Proxy Card. | ||||||
Ÿ Have your Proxy Form in hand. | OR | Ÿ Have your Proxy Form in hand. | OR | Ÿ Detach card from Proxy Form. | ||||
Ÿ Enter the Control Number located in the box below | Ÿ Enter the Control Number located in the box below | Ÿ Return the card in the postage-paid envelope provided. | ||||||
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CONTROL NUMBER FOR
TELEPHONE OR INTERNET VOTING
1-866-388-1535 CALL TOLL-FREE TO VOTE | Please note that votes submitted by telephone and Internet must be received by 5:00 p.m. Eastern Daylight Time (4:00 p.m. Central Daylight Time) on June 16, 2003. If you choose to vote your shares by telephone or Internet,there is no need to mail your proxy card.Please reference the reverse of the Proxy Card for further details. |
Ú DETACH PROXY CARD HERE IF YOU ARE NOT VOTING BY TELEPHONE OR INTERNET Ú
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. | x Votes must be indicated (x) in Black or Blue ink. |
| 1. | ELECTION OF DIRECTORS: |
FOR all nominees | ¨ | WITHHOLD AUTHORITY to vote | ¨ | *EXCEPTIONS | ¨ | |||||||
listed below | for all nominees listed below | |||||||||||
Nominees: | 01 – BERNARD P. ALDRICH, 02 – ROBERT L. EDWARDS and 03 – RUSSELL HUFFER | |||||||||||
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the “Exceptions” box and write that nominee’s name in the space provided below). | ||||||||||||
*Exceptions | ||||||||||||
FOR | AGAINST | ABSTAIN | ||||||
2. | PROPOSAL TO AMEND THE AMENDED ANDRESTATED 1987 APOGEE ENTERPRISES, INC. PARTNERSHIP PLAN: | ¨ | ¨ | ¨ | ||||
3. | PROPOSAL TO RATIFY THE APPOINTMENT OFDELOITTE & TOUCHE LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY: | ¨ | ¨ | ¨ | ||||
4. | In their discretion, the Proxies are authorized to vote upon such other business as may properly be brought before the meeting. |
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS¨ I agree to be held on June 18, 2002APOGEE ENTERPRISES, INC. PROXY STATEMENTSECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERSSECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERSSECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEItem 1: ELECTION OF DIRECTORSEXECUTIVE COMPENSATIONOption Grants in Fiscal 2002Aggregated Option Exercises in Fiscal 2002access future proxy statements and Fiscal Year-End Option Valuesannual reports over the internet.COMPARATIVE STOCK PERFORMANCEItem 2: APPROVAL OF THE APOGEE ENTERPRISES, INC. 2002 OMNIBUS STOCK INCENTIVE PLANItem 3: APPROVAL OF THE APOGEE ENTERPRISES, INC. EXECUTIVE MANAGEMENT INCENTIVE PLANItem 4: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORSAUDIT COMMITTEE REPORTSHAREHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETINGANNUAL REPORT TO SHAREHOLDERSOTHER MATTERSEXHIBIT A APOGEE ENTERPRISES, INC. 2002 OMNIBUS STOCK INCENTIVE PLANEXHIBIT B APOGEE ENTERPRISES, INC. EXECUTIVE MANAGEMENT INCENTIVE PLAN
Note: | Please sign exactly as your name appears to the left. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person. | |
Date | Share Owner sign here | Co-Owner sign here | ||