<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[X] Definitive Proxy Statement RULE 14C-5(D)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) 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):
(4) Proposed maximum aggregate value of transaction:
(5) 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 Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
[LOGO OF APOGEE ENTERPRISES, INC. APPEARS HERE]
May 17, 1995
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders to be
held in the Lutheran Brotherhood Building Auditorium, 625 Fourth Avenue South,
Minneapolis, Minnesota, commencing at 10:00 a.m. on Tuesday, June 20, 1995.
The Secretary'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.
We hope that you will be able to attend the meeting in person, and we look
forward to seeing you. Please mark, date and sign the enclosed proxy and return
it in the accompanying envelope as quickly as possible, even if you plan to
attend the meeting. You may vote in person at that time if you so desire.
Sincerely,
/s/ Donald W. Goldfus
Donald W. Goldfus
Chairman of the Board and Chief
Executive Officer
<PAGE>
APOGEE ENTERPRISES, INC.
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 20, 1995
Notice is hereby given that the Annual Meeting of Shareholders of APOGEE
ENTERPRISES, INC. will be held in the Lutheran Brotherhood Building Auditorium,
625 Fourth Avenue South, Minneapolis, Minnesota, commencing at 10:00 a.m. on
Tuesday, June 20, 1995 for the following purposes:
1. To elect three directors for a three-year term;
2. To approve proposed amendments to the 1987 Stock Option Plan;
3. To ratify the appointment of KPMG Peat Marwick LLP as independent
auditors for the fiscal year ending March 2, 1996; and
4. To transact such other business as may properly be brought before the
meeting.
The Board of Directors has fixed April 28, 1995 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 vote at the meeting.
YOUR PROXY 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, YOU ARE
URGENTLY REQUESTED TO DATE, SIGN AND MAIL THE ENCLOSED PROXY IN THE POSTAGE-
PAID ENVELOPE PROVIDED. THE PROXY MAY BE REVOKED BY YOU AT ANY TIME AND GIVING
OF YOUR PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE
MEETING.
By Order of the Board of Directors,
/s/ William G. Gardner
William G. Gardner
Secretary
Minneapolis, Minnesota
May 17, 1995
<PAGE>
PROXY STATEMENT
GENERAL INFORMATION
The enclosed proxy is being solicited on behalf of the Board of Directors of
Apogee Enterprises, Inc. (the "Company") for use at the Annual Meeting of
Shareholders to be held on June 20, 1995. Only shareholders of record at the
close of business on April 28, 1995 will be entitled to vote at the meeting. A
shareholder executing a proxy retains the right to revoke it by notice in
writing to the Secretary of the Company at any time prior to its use. Proxies
in the accompanying form which are properly executed, duly returned and not
revoked will be voted in the manner specified. If a proxy is properly executed
but does not specify any or all choices on it, the proxy will be voted as
follows: (i) in favor of the election as Class III directors of all of the
nominees described herein; (ii) in favor of the adoption of the proposed
amendments to the 1987 Stock Option Plan; (iii) in favor of the appointment of
KPMG Peat Marwick LLP as independent auditors of the Company; and (iv) in the
discretion of the persons named in the proxy, as to such other matters as may
properly come before the meeting.
If an executed proxy is returned and the shareholder has voted "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, but will not be considered to have been voted in favor of
such matter. If an executed proxy is returned by a broker holding shares in
street name which indicates that the broker does not have discretionary
authority as to certain shares to vote on one or more matters, such shares will
be considered present at the meeting for purposes of determining a quorum, but
will not be considered to be represented at the meeting for purposes of
calculating the vote with respect to such matter.
The address of the Company is Suite 1800, 7900 Xerxes Avenue South,
Minneapolis, Minnesota 55431-1159. The telephone number is (612) 835-1874. The
mailing of this proxy statement and form of proxy to shareholders will commence
on or about May 17, 1995.
SHAREHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
Any shareholder wishing to have a proposal considered for submission at the
1996 annual meeting must submit the proposal in writing to the Secretary of the
Company at the address indicated above in accordance with all applicable rules
and regulations of the SEC no later than January 17, 1996.
1
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS
At April 28, 1995, there were 13,463,137 shares of common stock, par value
$.33 1/3, issued and outstanding. Each share is entitled to one vote. The
following table sets forth information concerning beneficial ownership of
common stock of the Company by persons who are known to own more than 5% of the
outstanding voting stock of the Company at March 31, 1995. Unless otherwise
indicated, all shares represent sole voting and investment power.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
------------------- -------------------- ----------
<S> <C> <C>
David L. Babson & Company 1,317,658 9.8%
One Memorial Drive
Cambridge, MA 02142-1300
Trust of Russell H. Baumgardner (6/6/86) 1,283,614 9.5%
(1)
c/o Lionel, Sawyer, & Collins
1100 Bank of America Plaza
50 West Liberty Street
Reno, NV 89501
Guardian Industries Corp. 762,700 5.7%
43043 West Nine Mile Road
Northville, MI 48167
</TABLE>
- --------
(1) The 1,283,614 shares held by the Russell H. Baumgardner Trust (the "Trust")
dated June 6, 1986 are also deemed to be beneficially owned by Messrs.
Donald W. Goldfus, O. Walter Johnson and Laurence J. Niederhofer, because
they share voting and investment power as trustees of the Trust. If the
shares held by the Trust were included in the holdings of Messrs. Goldfus,
Johnson and Niederhofer, the number of shares and percentage of outstanding
shares held by each of Messrs. Goldfus, Johnson and Niederhofer would be as
follows: Goldfus, 1,612,529 (12.0%); Johnson, 1,295,233 (9.6%); and
Niederhofer, 1,574,789 (11.7%).
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Articles of Incorporation provide that the Board of Directors
be divided into three classes of directors of as nearly equal size as possible
and further provides that the total number of directors be determined
exclusively by the 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 nine directors. The terms of the directors of Class III,
consisting of Directors D. Goldfus, O. Johnson and J. Martineau, expire at the
1995 Annual Meeting of Shareholders. Mr. Johnson will be retiring from the
board at that time and will not seek reelection. To fill the resulting Class
III director vacancy, the Corporate Governance Committee of the Board has
placed in nomination the name of Paul B. Burke. The terms of the directors of
Class I and Class II expire at the 1996 and 1997 Annual Meetings of
Shareholders, respectively.
Unless authority is withheld, the Proxy solicited hereby will be voted FOR
the election of Messrs. Paul B. Burke, Donald W. Goldfus and James L. Martineau
as Directors of Class III for a three-year term expiring at the 1998 Annual
Meeting of Shareholders. The affirmative vote of a majority of the shares of
common stock of the Company entitled to vote and present in person or by proxy
at the annual meeting is necessary to elect each nominee. Messrs. Goldfus and
Martineau have been members of the Board of Directors since
2
<PAGE>
1964 and 1973, respectively, and were last elected to the Board of Directors at
the 1992 Annual Meeting of Shareholders.
Management has no reason to expect that any of the nominees will fail to be a
candidate at the annual meeting and, therefore, does 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 (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.
The following table sets forth certain information as to each nominee for the
office of director, as well as directors whose terms of office will continue
after the 1995 Annual Meeting of Shareholders is held.
<TABLE>
<CAPTION>
DIRECTOR TERM
NAME AND PRINCIPAL OCCUPATION AGE SINCE EXPIRES
- ----------------------------- --- -------- -------
<S> <C> <C> <C>
Anthony L. Andersen (Class II) 59 1988 1997
Chair-Board of Directors and CEO of H. B. Fuller Company
(manufacturer of specialty chemicals) since 1992. Prior to
that, President and Chief Executive Officer of H. B.
Fuller Company since 1974. Mr. Andersen is also a director
of Cowles Media Company and Minnesota Mutual Life
Insurance Company.
Committees: Compensation and Corporate Governance
Gerald K. Anderson (Class I) 63 1981 1996
President of the Company since 1989. Prior to that,
Executive Vice President of the Company since 1987. Prior
to that, President of the Commercial Construction Division
of the Company since 1982. Prior to that, various senior
management positions with the Company since 1973.
Committees: Executive
Paul B. Burke (Class III) 39 -- --
President and Chief Executive Officer of BMC Industries,
Inc. (manufacturer of precision imaged and optical
products) since 1991. Prior to that, various senior
management positions with BMC Industries, Inc. since 1987.
Mr. Burke is also a director of BMC Industries, Inc. and
First Trust N.A.
Donald W. Goldfus (Class III) 61 1964 1995
Chairman of the Board of Directors and Chief Executive
Officer of the Company since 1988. Prior to that,
President and Chief Executive Officer since 1986 and
President and Chief Operating Officer since 1984. Prior to
that, various senior management positions with the
Company. Mr. Goldfus is also a director of G & K Services,
Inc., Lifetouch Inc., and Hypro Corporation.
Committees: Executive and Corporate Governance
Harry A. Hammerly (Class II) 61 1994 1997
Executive Vice President, International Operations, 3M
Company (industrial, consumer and health care products
manufacturer) since March 1994. Prior to that, various
senior management positions with 3M Company since 1973.
Mr. Hammerly is also a director of 3M Company, Cincinnati
Milacron, Inc. and The Geon Company.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR TERM
NAME AND PRINCIPAL OCCUPATION AGE SINCE EXPIRES
- ----------------------------- --- -------- -------
<S> <C> <C> <C>
Jerry W. Levin (Class I) 51 1987 1996
President and Chief Executive Officer of Revlon, Inc.
(consumer products company) since 1991. Executive Vice
President, MacAndrew & Forbes Group, Inc. (investment
firm) since 1989. Prior to that, various senior executive
positions with The Pillsbury Company (processor and
distributor of food products) since 1974. Mr. Levin is
also a director of Revlon, Inc., Revlon Worldwide, EcoLab
Inc., Coleman Company and Meridian Sports.
Committees: Audit
James L. Martineau (Class III) 54 1973 1995
Vice President of the Company. President of the Glass
Fabrication Division of the Company since 1971. Mr.
Martineau is also a director of First Bank Southeast,
N.A., Owatonna, MN.
Committees: Executive
Laurence J. Niederhofer (Class II) 62 1964 1997
Retired Chief Executive Officer of the Window Fabrication
Division of the Company. Mr. Niederhofer is also a
director of M & I First American National Bank, Wausau,
WI.
Committees: Audit and Executive
D. Eugene Nugent (Class I) 67 1990 1996
Director, Retired Chairman and Chief Executive Office of
Pentair, Inc. (manufacturer of paper and industrial
products) from 1982 to 1992. Mr. Nugent is also a director
of Pentair, Inc. and Piper Trust Funds, Inc.
Committees: Audit, Compensation, Executive and Corporate
Governance
</TABLE>
- --------
None of the above nominees or directors is related to any other nominee or
director or to any executive officer of the Company. Except as indicated above,
each of the nominees and directors has maintained his current principal
occupation for at least the last five years.
The Board of Directors held six meetings during the last fiscal year. The
Company has standing Audit, Compensation, Executive and Corporate Governance
Committees of the Board of Directors. The members of the various committees are
noted in the table above.
The Audit Committee recommends the selection of the independent auditors to
the Board of Directors; reviews the scope and results of the audits performed
by the independent auditors; and reviews various auditing and accounting
matters. The Audit Committee met twice during the fiscal year ended February
25, 1995.
The Compensation Committee determines the salary and other compensation of
all elected officers and senior management. The Compensation Committee also
administers the 1987 Stock Option Plan and the 1987 Partnership Plan. The
Compensation Committee met once during the fiscal year ended February 25, 1995.
The Executive Committee exercises the power of the full Board of Directors
between meetings, except for the power of filling Board vacancies. The
Executive Committee met three times during the fiscal year ended February 25,
1995.
4
<PAGE>
The Corporate Governance Committee periodically assesses the organization's
adherence to the Company's mission and principles, reviews the organizational
structure and succession plans, makes recommendations to the Board regarding
the composition and responsibilities of board committees, and suggests new
director nominees to the Board. The Committee will consider qualified nominees
recommended by shareholders. Any such recommendation for the 1996 election of
directors should be submitted in writing to the Secretary of the Company at the
address indicated above no later than 90 days in advance of the 1996 Annual
Meeting of Shareholders. Such recommendation must include information specified
in the Company's Bylaws which will enable the Committee to evaluate the
qualifications of the recommended nominee. Non-employee director members of the
Committee annually review and evaluate the performance of the Chief Executive
Officer. The Corporate Governance Committee met six times during the fiscal
year ended February 25, 1995.
Compensation of Directors. Directors, except for full-time employees of the
Company or its subsidiaries, 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. The meeting fee for committee chairs is $1,500 for each committee
meeting chaired. Non-employee directors also receive automatic, annual stock
option grants under the 1987 Stock Option Plan. The number of shares granted is
determined by dividing directors' cash compensation by the market price of
common stock on specified dates. The Security Ownership table includes the
options granted to the non-employee directors in fiscal 1995, which for the
non-employee directors as a group totaled 8,382 shares. The per share exercise
price of all such options is $12.41. None of these options has been exercised.
Non-employee directors also may elect to participate in the Company's
Employee Stock Purchase Plan. Under the plan, participants may purchase the
Company's common stock by contributing up to $100 per week, with the Company
contributing an amount equal to 15% of the weekly contribution. For the fiscal
period 1995, the Company contributed $3,270 to the Employee Stock Purchase Plan
for the benefit of all non-employee directors as a group.
The Company has consulting agreements with Laurence J. Niederhofer and D.
Eugene Nugent, non-employee directors, to provide consulting and advisory
services to the Company. Mr. Niederhofer's agreement as amended covers five
one-year terms ending November 1, 1998 and pays Mr. Niederhofer a fee of
$120,000 per year, plus certain out-of-pocket expenses and other benefits. Mr.
Nugent's agreement pays him a fee of $1,000 per day, plus certain out-of-pocket
expenses, per assigned consulting engagement. For the fiscal period 1995, Mr.
Nugent was paid $2,000 for consulting services.
5
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the number of the Company's common shares
beneficially owned by each director, the executive officers of the Company
included in the Summary Compensation Table set forth under the caption
"Executive Compensation" below, and by all directors and executive officers of
the Company as a group, at March 31, 1995.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
----------------------------------------------
NUMBER OF OPTIONS
SHARES EXERCISABLE PERCENT OF
PRESENTLY WITHIN OUTSTANDING
NAME HELD(1) 60 DAYS TOTAL SHARES
---- --------- ----------- ------- -----------
<S> <C> <C> <C> <C>
Anthony L. Andersen.......... 3,459 7,086 10,545 (7)
Gerald K. Anderson........... 64,822 10,000 74,822 (7)
William G. Gardner........... 29,470(2) 11,250 40,720 (7)
Donald W. Goldfus............ 316,415(3)(4) 12,500 328,915 2.6%
Richard Gould................ 5,234 -- 5,234 (7)
Harry A. Hammerly............ 1,221 121 1,342 (7)
O. Walter Johnson............ 3,881(4) 7,738 11,619 (7)
Jerry W. Levin............... 13,996(5) 7,058 21,054 (7)
James L. Martineau........... 122,772 7,500 130,272 1.0%
Laurence J. Niederhofer...... 289,845(4)(6) 1,330 291,175 2.2%
D. Eugene Nugent............. 1,944 6,748 8,692 (7)
All Directors and Executive
Officers as a group (12
persons).................... 853,059 62,331 924,390 6.9%
</TABLE>
- --------
(1) Each person shown has sole voting and investment power over the shares
unless otherwise indicated. Shares beneficially owned include shares owned
or vested through the Company's 1987 Partnership Plan, Employee Stock
Purchase Plan, 401(k) Plan and Pension Plan.
(2) Includes 276 shares held by Mr. Gardner's children and 100 shares held by
Mr. Gardner's wife, as to which he disclaims beneficial interest.
(3) Includes 25,656 shares held by Mr. Goldfus' wife, as to which he disclaims
beneficial interest.
(4) The 1,283,614 shares held by the Russell H. Baumgardner Trust dated June 6,
1986 (see Security Ownership of Principal Shareholders) are also deemed to
be beneficially owned by Messrs. Goldfus, Johnson and Niederhofer because
they share voting and investment power as trustees. If the shares held by
the Trust were included in the above table, the number of shares held by
each of Messrs. Goldfus and Niederhofer would be increased by 1,283,614 and
the percent of outstanding shares would be as follows: Goldfus, 12.0%;
Johnson, 9.6%; Niederhofer, 11.7%; and all directors and executive officers
as a group, 16.4%.
(5) Includes 2,000 shares held by Mr. Levin's wife as trustee for trusts for
the benefit of Mr. Levin's children, as to which he disclaims beneficial
interest.
(6) Includes 30,224 shares held by Mr. Niederhofer's wife, as to which he
disclaims beneficial interest.
(7) Less than 1%.
6
<PAGE>
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Overview and Philosophy
The compensation of executive officers is determined by the Compensation
Committee of the Board of Directors. The Committee is comprised entirely of
outside directors. To assist in performing its duty and to enhance the
objectivity and independence of the Committee, the advice and recommendations
of an outside compensation consultant, as well as independent compensation
data, are periodically obtained.
In administering the executive pay 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. As such, plans are
designed and decisions are made that place more emphasis on long-term business
development than on short-term results. Also, the Committee believes it is
consistent with this entrepreneurial philosophy to place more emphasis on both
short and long-term incentive pay, than on base pay. In furtherance of this
philosophy, the Company maintains a high level of operational autonomy, there
being only six executive officers and 24 employees, including officers, at the
corporate level, compared to a total employee count of 6,185 as of February,
1995. Compensation of divisional management is administered primarily at the
divisional level.
The objectives of the executive compensation policies are to:
(1) Promote the achievement of strategic objectives which lead to long-term
growth in shareholder value.
(2) Establish total compensation plans that are competitive with similarly
situated companies, that attract and retain superior performers, and
that reward outstanding performance.
(3) Align the executive officers' interests with those of the Company by
making incentive compensation dependent upon business unit or company
performance.
Base Salary
Base salaries are reviewed annually. In determining annual salary
adjustments, the Committee takes into account the executive's level of
responsibility, experience and performance in relation to the Company's
performance and other companies' performance. In fiscal 1995, base salaries of
executive officers were generally less than the average of companies of
equivalent size and complexity. Base salary increases in the fiscal year ranged
from 3% to 30% with the average being 13%.
Annual Incentive
Executives may earn annual incentive compensation under an individualized
cash bonus plan. The Committee develops the plan for the Chief Executive
Officer and reviews and approves plans for other executive officers at the
beginning of the fiscal year. Each plan encompasses specific objectives, such
as business unit or Company profitability, achievement of planned results,
return on assets or equity, and individual and group development. The actual
cash bonus is awarded based on the degree of achievement of those objectives.
The Committee may also make discretionary bonus awards if, in its judgment,
such action is merited in light of individual performance, compensation equity,
or both. For fiscal 1995, the range of potential bonus payments as a percentage
of base pay was from zero to 100 percent.
7
<PAGE>
Long-term Incentive
To further encourage alignment of executives' interests with those of the
Company's shareholders, executives selected by the Committee may also
participate in the 1987 Partnership Plan. At the beginning of the year, each
participant may voluntarily defer up to fifty percent of the possible
incentive compensation (to a maximum of $100,000) to be invested in the
Partnership Plan. The Company matches the deferred amount and the aggregate is
invested in the Company's common stock. The individual's amount is vested
immediately, however the shares are held in trust and restricted for a period
of not less than five years. The Company match is made in restricted stock
that is vested in equal annual increments over a period of up to 10 years, as
determined by the Committee. In the accompanying Summary Compensation Table,
the deferred amount and the Company match under the Partnership Plan are shown
in the column labeled Restricted Stock Award. Such restricted stock awards
relate exclusively to the compensation deferral under the Partnership Plan,
and no other restricted stock grants have been made to executive officers of
the Company in the three-year period.
Stock Options
Executives are also eligible to receive grants under the Company's stock
option plan which is also administered by the Compensation Committee. Option
grants are made at current market prices so that executive rewards accrue only
as shareholder value increases. The option grants typically vest at the rate
of 25 percent per year, beginning on the grant's first anniversary. Consistent
with the Company's emphasis on long-term incentives, grants are generally made
each year to a broad base of recipients (124 employees in fiscal 1995) that
may or may not include executive officers.
Chief Executive Officer Compensation
Mr. Donald W. Goldfus has held the position of Chief Executive Officer since
1986. In April 1994, his annual salary was set at $370,000, a 30 percent
increase. The Committee's decision on Mr. Goldfus' base salary took into
account the recommendations of its independent compensation consultant and
included relevant compensation survey data. The survey was compiled by the
compensation consultant from its data base of industrial companies with
revenues ranging from $200 million to $1 billion. The base salary of $370,000
leaves Mr. Goldfus still well below the median chief executive officer pay
level in the survey. The Committee believes that Mr. Goldfus' contributions
have led to the significant improvement by both segments of the company, but
most specifically the turnaround in the Building Products & Services segment
of the Company during the past year. This conclusion is supported by the
Corporate Governance Committee which, as part of its duties, completed a
performance review of the Chief Executive Officer in March 1995. Accordingly,
the Committee awarded Mr. Goldfus a discretionary bonus of $200,000 under the
annual incentive plan. The sum of Mr. Goldfus' base pay and annual incentive
award is also well below the median level of the consultant's survey. Mr.
Goldfus had elected to defer one-half of any bonus received into the Company's
long-term, stock-based incentive plan (the 1987 Partnership Plan). Therefore,
the accompanying Summary Compensation Table reflects a cash bonus of $100,000.
The deferred portion, together with the Company match as described above and
in the table, are reported in the restricted stock award column in the table.
The Committee believes the executive compensation policies and actions
discussed in the above report reflect decisions which are consistent with the
Company's overall beliefs and goals.
Anthony L. Andersen
O. Walter Johnson
D. Eugene Nugent
Members of the Compensation
Committee
8
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and noncash compensation for services
in all capacities for each of the last three fiscal years, awarded to the Chief
Executive Officer of the Company and the four other most highly compensated
executive officers of the Company.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
----------------------------------------- ------------------------------------------------
TOTAL STOCK
OTHER RESTRICTED OPTION LONG-TERM
NAME AND PRINCIPAL ANNUAL STOCK SHARES INCENTIVE ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION(1) AWARD(4) AWARDED PAYOUTS COMPENSATION(5)
------------------ ---- -------- -------- --------------- ---------- ----------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Donald W. Goldfus....... 1995 $356,923 $100,000 $ 913 $200,000 35,000 -- $ 9,575
Chairman and CEO 1994 285,000 25,000 686 50,000 15,000 -- 14,490
1993 281,538 25,000 856 50,000 -- -- 14,061
Gerald K. Anderson...... 1995 246,154 50,000 52,826(2) 100,000 10,000 -- 9,575
President 1994 225,000 25,000 38,912(2) 50,000 10,000 -- 13,948
1993 222,802 25,000 41,758(2) 50,000 -- -- 14,187
James L. Martineau...... 1995 226,346 151,500 653 101,000 -- -- 9,575
Vice President 1994 220,000 135,000 490 90,000 5,000 -- 13,698
1993 218,571 67,500 611 45,000 -- -- 13,868
Richard Gould........... 1995 153,846 100,000 -- -- 5,000 -- 1,385
Senior Vice President 1995 -- 127,750(3) -- -- -- -- --
1994 -- -- -- -- -- -- --
1993 -- -- -- -- -- -- --
William G. Gardner...... 1995 136,346 25,000 -- 50,000 -- -- 8,768
Treasurer and 1994 130,000 10,000 -- 20,000 5,000 -- 8,525
Secretary 1993 129,231 5,000 -- 10,000 -- -- 9,281
</TABLE>
- --------
(1) Includes interest credited to participants' accounts under the Company's
1986 Deferred Incentive Compensation Plan.
(2) Includes compensation and interest under the consulting agreement described
below under Employment Agreement.
(3) Includes an employment award consisting of Company stock and personal tax
reimbursement in connection with Mr. Gould's joining the Company in May
1994.
(4) Under the 1987 Apogee Enterprises, Inc. Partnership Plan, participants are
given the opportunity to voluntarily defer up to 50 percent of their annual
incentive compensation, to a maximum of $100,000. The Company matches the
deferred amount and the aggregate, listed under "Restricted Stock Award,"
is invested in the Company's common stock. The individual's deferred amount
is vested immediately, however the shares are held in trust and restricted
for a period of not less than five years. The Company match is made in
restricted stock that is vested in equal annual increments over a period of
up to 10 years, as determined by the Compensation Committee. All shares are
eligible to receive all declared dividends. As of February 25, 1995, the
total number of shares held in trust and dollar value of those shares for
each officer is listed below.
<TABLE>
<CAPTION>
SHARES SHARES
ACQUIRED ACQUIRED
WITH WITH
YEARS OF DEFERRED COMPANY AGGREGATE
OFFICER PARTICIPATION AMOUNT MATCH $ VALUE
------- ------------- -------- -------- ---------
<S> <C> <C> <C> <C>
Donald W. Goldfus................. 8 20,886 9,673 $527,143
Gerald K. Anderson................ 8 33,727 10,541 763,623
Richard Gould..................... N/A N/A N/A N/A
James L. Martineau................ 8 8,050 9,849 308,758
William G. Gardner................ 8 5,546 6,324 204,476
</TABLE>
(5) Represents amounts paid under the Company's defined contribution pension
plan and 401(k) savings plan, which are applicable to executive officers on
the same basis as all eligible employees.
9
<PAGE>
STOCK OPTIONS
The following tables summarize option grants and exercises during fiscal 1995
to or by the executive officers named in the Summary Compensation Table above,
and the value of the options held by such persons at the end of fiscal 1995.
OPTION GRANTS IN FISCAL 1995
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
% OF ANNUAL RATES OF STOCK
TOTAL OPTIONS PRICE APPRECIATION FOR
GRANTED TO EXERCISE OPTION TERM
OPTIONS(1) EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME GRANTED (#) FISCAL YEAR ($/SHARE) DATE 5% 10%
---- ----------- ------------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Donald W. Goldfus....... 35,000 22.1% $13.00 6/21/99 $ 125,707 $ 277,782
Gerald K. Anderson...... 10,000 6.3% $13.00 6/21/99 35,916 79,366
Richard Gould........... 5,000 3.2% $13.00 6/21/99 17,958 39,683
</TABLE>
- --------
(1) The options were granted on June 21, 1994 and will become exercisable in
equal increments over the next four years.
OPTION EXERCISES IN FISCAL 1995 AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL
SHARES YEAR END (#) YEAR END ($)
ACQUIRED ON VALUE (EXERCISABLE/ (EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE) UNEXERCISABLE)
---- ------------ ------------ ----------------- -----------------
<S> <C> <C> <C> <C>
Donald W. Goldfus....... -- -- 12,500/42,500 $52,500/190,000
Gerald K. Anderson...... -- -- 10,000/15,000 38,750/70,000
James L. Martineau...... -- -- 7,500/2,500 25,000/13,750
Richard Gould........... -- -- 0/5,000 0/21,250
William G. Gardner...... -- -- 11,250/3,750 49,375/21,875
</TABLE>
EMPLOYMENT AGREEMENT
The Company has an employment agreement with Mr. Gerald K. Anderson,
whereunder Mr. Anderson has agreed to provide the Company with consulting
services and not to engage in competition with the Company for a period of five
years after his termination of employment. Under the terms of the agreement,
the Company awards Mr. Anderson or his beneficiaries ten percent of his salary
and incentive compensation earned each year, to be paid, with interest, over a
period commencing upon his termination of employment, death or disability.
10
<PAGE>
[GRAPH APPEARS HERE]
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG APOGEE, PEER GROUP, S&P MIDCAP 400 AND S&P SMALLCAP 600
<CAPTION>
Measurement period PEER S&P S&P
(Fiscal Year Covered) APOGEE GROUP MIDCAP 400 SMALLCAP 600
- --------------------- -------- -------- ---------- ------------
<S> <C> <C> <C> <C>
Measurement PT -
2/28/90 $100 $100 $100 $100
FYE 2/28/91 $117.41 $ 97.67 $117.65 $ 97.88
FYE 2/28/92 $ 83.86 $106.31 $155.27 $133.82
FYE 2/28/93 $ 81.58 $124.06 $167.79 $147.10
FYE 2/28/94 $109.41 $130.94 $193.19 $178.76
FYE 2/28/95 $125.46 $136.27 $196.36 $171.21
</TABLE>
- --------
Assumes $100 invested at the close of trading on February 28, 1990 in Apogee
Enterprises, Inc. common stock, S&P Midcap 400, S&P Smallcap 600 and the peer
group composite listed below. Assumes monthly reinvestment of dividends. Total
return calculations for the indices were performed by S&P Compustat Services,
Inc.
For fiscal year 1995, the Company has replaced the S&P Midcap 400 Index, used
in fiscal 1994, with the S&P Smallcap 600 Index because it believes that S&P
Smallcap 600 Index better represents the market capitalization composition of
the Company and the peer group. The S&P Midcap 400 Index is included in the
above line graph for comparison purposes. The S&P Smallcap 600 is an index of
small capitalization stock performance begun about two years ago to complement
the S&P 500, an index covering the large capitalization segment, and the S&P
Midcap 400 which covers the middle capitalization segment.
The Company's primary business activities include the fabrication and
installation of nonresidential wall and window systems and architectural glass
products (about 67% of net sales) and the fabrication, distribution and
installation of automotive safety glass (about 33% of net sales). The Company
is not aware of any competitors, public or private, that are similar to it in
both size and scope of business activities. Most of the Company's direct
competitors are either privately owned or divisions of larger, publicly owned
companies. The "peer" group in the accompanying total return graph consists of
all public companies with
11
<PAGE>
market capitalization of $500 million or less as of February 28, 1995 that are
known to the Company 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 the peer group index are: Butler Manufacturing
Company, Donnelley Corporation, Excel Industries, International Aluminum
Corporation, Robertson-Ceco Corporation, Southwall Technologies and Sun
Distributors.
PROPOSAL 2
PROPOSAL TO AMEND THE AMENDED AND RESTATED 1987 APOGEE ENTERPRISES, INC. STOCK
OPTION PLAN
In April 1995, the Company's Board of Directors adopted, subject to
shareholder approval, an amendment to the Company's Amended and Restated 1987
Apogee Enterprises, Inc. Stock Option Plan (the "Stock Option Plan") to
increase the automatic, annual stock option grant to directors of the Company
who are not employees of the Company or its subsidiaries ("nonemployee
directors"). Prior to such amendment, the nonemployee director received an
option covering a number of shares of common stock of the Company equal to the
quotient ("Quotient") of the amount actually paid to such nonemployee director,
as director's fees (including annual retainer and meeting fees) for the
previous year, divided by the average closing sale price of common stock of the
Company on the NASDAQ Stock Market for the 10 business days preceding the
annual meeting of the shareholders. The amendment would increase such amount to
a number of shares equal to twice the Quotient. The effect of the amendment
would be to double the number of shares under option that the nonemployee
director would otherwise receive each year under the Stock Option Plan. The
Board of Directors believes the proposed amendment will enhance the Company's
ability to attract and retain the services of experienced and knowledgeable
nonemployee directors and provide additional incentive for such nonemployee
directors to promote the Company's long-term success and progress.
In order to qualify for certain transaction exemptions under the federal
securities laws, it is necessary to obtain shareholder approval of this
proposed amendment to the Stock Option Plan. If the amendment is approved by
the Company's shareholders, the amendment will be effective on the date of the
annual meeting, June 20, 1995, and all nonemployee directors who are members of
the Board on that date will be granted options to purchase shares under the
Stock Option Plan as amended. If the amendment is not approved by the Company's
shareholders, such amendment will not take effect.
SUMMARY OF THE PLAN
The following summary of the Stock Option Plan is qualified in its entirety
by reference to the full text of the Stock Option Plan, a copy of which may be
obtained by the shareholders of the Company upon request directed to the
Company's Treasurer at Suite 1800, 7900 Xerxes Avenue South, Minneapolis,
Minnesota 55431-1159. The Stock Option Plan provides for the issuance of
options to purchase shares of Company common stock to executives and key
employees of the Company and its subsidiaries and to nonemployee directors of
the Company. Options granted under the Stock Option Plan may be designated as
either "incentive stock options" as defined under Section 422A of the Internal
Revenue Code of 1986, as amended (the "Code"), or options which do not qualify
as incentive stock options (commonly referred to as "nonstatutory stock
options"). The automatic, annual options granted to the nonemployee directors
are nonstatutory options granted with exercise prices equal to the average
closing sale price in the formula described above.
12
<PAGE>
A maximum number of 1,250,000 shares of common stock may be issued under the
Stock Option Plan, subject to shareholder approval to increase the number of
shares reserved for issuance under the Stock Option Plan. If any option
terminates or expires without having been exercised in full, the stock not
purchased under such option shall again be available for the purposes of the
Stock Option Plan. If any change is made in the stock subject to the Stock
Option Plan, or subject to any option granted under the Stock Option Plan
(through merger, consolidation, reorganization, recapitalization, or
otherwise), appropriate adjustments shall be made as to the maximum number of
shares subject to the Stock Option Plan, and the number of shares and exercise
price per share of stock subject to outstanding options.
The Stock Option Plan is administered by the Compensation Committee of the
Board of Directors (the "Committee"), whose members have responsibility for
deciding which employees will be granted options and, subject to the terms of
the Stock Option Plan, for setting the terms of each option. Discretionary
options may only be granted under the Stock Option Plan to key employees
(including officers) of the Company or its subsidiaries, as determined from
time to time by the Committee. Eligibility for and level of participation with
respect to discretionary grants are based upon perceived contribution to the
Company's success and other factors, and the Company believes that, at present,
any Company employee may potentially be determined to be "key" for purposes of
the Stock Option Plan. The exercise price for incentive stock options granted
under the Stock Option Plan must be at least equal to 100% of the fair market
value of the shares on the date of the grant. The nonemployee directors receive
automatic, annual stock option grants, as described above. For purposes of
determining the rights of the nonemployee directors who receive automatic,
annual stock option grants, the members of the Board who are not eligible to
receive such grants shall serve as the "Committee."
Options granted under the Stock Option Plan are not transferable (except by
will or the laws of descent and distribution) and may be exercised only by the
optionholder during his or her lifetime (unless a guardian or legal
representative is appointed). Subject to certain specified limitations, each
discretionary option granted under the Stock Option Plan is exercisable in full
or in installments at such time or times over such periods as the Committee
determines in its discretion. Except for options granted to nonemployee
directors, options granted under the Stock Option Plan may not be exercised
prior to one year after grant and may not have a term exceeding 10 years.
Options granted to nonemployee directors are exercisable in full on the date of
grant and for ten years thereafter. In the case of incentive stock options, to
the extent that the aggregate fair market value (determined as of the time the
option is granted) of the shares with respect to which all incentive stock
options are exercisable for the first time by an optionholder during any
calendar year exceeds $100,000, such option shall be treated as a nonstatutory
stock option.
Under the Stock Option Plan, the exercise price may be paid in cash, or,
subject to Committee approval, common stock of the Company, a promissory note,
or other consideration, or a combination thereof.
The Stock Option Plan expires in 1997. No options may be granted under the
Stock Option Plan after its expiration. The Stock Option Plan may be
terminated, modified, or amended by the Board of Directors at any time,
provided that the Board may not without further approval of shareholders, (i)
materially increase the benefits accruing to optionholders, (ii) increase the
number of shares which may be issued under the plan, (iii) modify the
requirements as to eligibility for participation.
The following is a summary of the principal federal tax consequences
generally applicable to options under the Stock Option Plan. The grant of an
option 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 a liability may arise
pursuant to the alternative minimum tax), and the
13
<PAGE>
Company will not be entitled to a tax deduction when an incentive option is
exercised. Upon exercising a nonstatutory stock option, the optionee 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. The tax consequences to an optionee 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 such shares were acquired by exercising an
incentive stock option or by exercising a nonstatutory stock option. Generally,
there will be no tax consequences to the Company in connection with a
disposition of shares acquired under an option, except that 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.
Special rules apply in the case of individuals subject to section 16(b) of
the Exchange Act. In particular, under current law, unless a special election
is made pursuant to the Code, shares received pursuant to the exercise of a
stock option 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, may be determined as of the end
of such period.
Under the Stock Option Plan, the Committee may permit optionholders
exercising nonstatutory stock options, subject to the discretion of the
Committee and upon such terms and conditions as it may impose, to surrender
shares of common stock (either shares received upon the exercise of the award
or shares previously owned by the optionee) to the Company to satisfy federal
and state withholding tax obligations.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The affirmative vote of the holders of a majority of the shares of the common
stock of the Company present and entitled to vote at the Annual Meeting on this
item of business is required for the approval of the proposal. Proxies will be
voted in favor of such proposal unless otherwise specified. The Board of
Directors recommends that you vote FOR approval of the proposed amendment to
the Stock Option Plan.
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
KPMG Peat Marwick LLP has served as the independent auditors of the Company
since 1968. The Board of Directors has again appointed KPMG Peat Marwick LLP to
serve as the Company's independent auditors for the fiscal year ending March 2,
1996. While it is not required to do so, the Board of Directors is submitting
the selection of that firm for ratification in order to ascertain the views of
the shareholders. 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 common stock of the Company
represented at the meeting in person or by proxy.
A representative of KPMG Peat Marwick LLP will be present at the Annual
Meeting of Shareholders and will be afforded an opportunity to make a statement
and will be available to respond to appropriate questions.
In connection with the audit function for fiscal year 1995, KPMG Peat Marwick
LLP reviewed the Company's annual report and its filings with the Securities
and Exchange Commission.
14
<PAGE>
GENERAL
The 1995 Annual Report to Shareholders for the fiscal year ended February 25,
1995 is being mailed with this Proxy Statement.
Management does not intend to present any matters at the meeting not referred
to above and does not presently know of any matter that may be presented to 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
thereon in accordance with their best judgment.
The Company will pay the cost of soliciting proxies in the accompanying form.
In addition to solicitation by the use of mails, certain officers and regular
employees of the Company may solicit the return of proxies by telephone,
telegram or personal interview, and may request brokerage houses and
custodians, nominees and fiduciaries to forward soliciting materials to their
principals and will reimburse them for their reasonable out-of-pocket expenses.
Shareholders who wish to obtain a copy of the Company's Form 10-K Annual
Report, filed with the Securities and Exchange Commission for the fiscal year
ended February 25, 1995, may do so without charge by writing to the Treasurer
at Suite 1800, 7900 Xerxes Avenue South, Minneapolis, Minnesota 55431-1159.
By Order of the Board of Directors,
/s/ William G. Gardner
William G. Gardner
Secretary
Dated: May 17, 1995
15
<PAGE>
Exhibit A
AMENDED AND RESTATED
1987 APOGEE ENTERPRISES, INC. STOCK OPTION PLAN
ARTICLE I.
PURPOSE OF THE PLAN
The purposes of this Plan, which shall be know as the "Amended and Restated
1987 Apogee Enterprises, Inc. Stock Option Plan" and shall hereinafter be
referred to as the "Plan," are to advance the long-term financial interests and
growth of Apogee Enterprises, Inc. and its Subsidiaries (as defined in Section
2.16) (the "Company") by providing an additional incentive for superior
performance by officers, directors and employees of the Company who are selected
as Participants (as defined in Section 2.13) in the Plan, to enhance the ability
of the Company to attract and retain officers, directors and key employees of
the highest caliber and possessing outstanding ability, to provide incentive
compensation opportunities that are comparable with those of competitor
corporations, and to foster each Participant's interest in the continued success
and development of the Company.
ARTICLE II.
DEFINITIONS
For purposes of the Plan, the following terms, when capitalized, shall have
the respective meanings designated below, unless a different meaning is plainly
required by the context. Where applicable, the masculine pronoun or possessive
shall mean or include the feminine and the singular shall include the plural.
2.01 "Board" shall mean the Board of Directors of Apogee Enterprises, Inc.
2.01 "Code" shall mean the Internal Revenue Code of 1986, as amended.
2.03 "Committee" shall mean the Compensation Committee of the Board
described in Section 3.01 below.
2.04 "Common Stock" shall mean the common stock, par value $.33 1/3 per
share, of Apogee Enterprises, Inc.
2.05 "Company" shall mean Apogee Enterprises, Inc. and its Subsidiaries.
2.06 "Date of Grant" shall mean the date on which the Committee grants an
ISO or a Nonstatutory Option, except, with respect to Options granted under
Section 3.02A, in which case
<PAGE>
"Date of Grant" shall mean the date of the annual meeting of the shareholders
of Apogee Enterprises, Inc.
2.07 "Disability" shall mean either (i) a physical or mental 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 or as a director or (ii) for purposes of interpreting
any ISOs, the date when an employee becomes "disabled" under the terms of
Section 22(e)(3) of the Code.
2.08 "Effective Date" and "Initial Effective Date" shall have the meanings
provided in Article XVI below.
2.09 "Fair Market Value" of a share of Common Stock on any date shall be
the closing price of the stock on either the NASDAQ National Market System, or
if the Common Stock shall become listed on a national stock exchange, such
exchange, as reported by any publication of general circulation selected by the
Committee.
2.10 "ISO" shall mean an Option designated to be an incentive stock option
pursuant to the Stock Option Agreement and governed by the provisions of Section
422A of the Code.
2.11 "Nonstatutory Option" shall mean an Option which is not an incentive
stock option pursuant to the Stock Option Agreement and not intended to qualify
under the provisions of Section 422A of the Code.
2.12 "Option" shall mean, unless the context shall otherwise indicate, an
ISO or a Nonstatutory Option.
2.13 "Participant" shall mean an officer or key employee of the Company
who is selected by the Committee to receive an Option under the Plan and each
director of the Company who is not an employee of the Company. A Participant
shall remain such until such time as all Options granted to him have been
exercised in full or have expired or been canceled pursuant to the Plan.
2.14 "Plan" shall mean the Amended and Restated 1987 Apogee Enterprises,
Inc. Stock Option Plan, as it may be further amended from time to time.
2.15 "Stock Option Agreement" shall mean the contractual arrangement
between the Company and a Participant which sets forth the terms of the Option.
2.16 "Subsidiary" shall mean an affiliated employer that, during any
period, (i) has 50 percent or more of its voting stock or, in the case of a
partnership or joint venture, 50 percent or more of the capital interest
thereof, owned, directly or indirectly, by Apogee Enterprises,Inc. or (ii) is a
member with Apogee Enterprises, Inc. in a controlled group of corporations or,
for purposes of granting ISOs, is otherwise under common control with Apogee
Enterprises,Inc. within the meaning of Section 425(e) and (f) of the Code.
<PAGE>
ARTICLE III.
ADMINISTRATION
3.01 Committee. The Plan shall be administered under the direction of a
Committee of the Board which shall consist of not less than three members who
shall be appointed by the Board from time to time. As of the Effective Date,
the Committee shall be the Compensation Committee of the Board. Except for
Options granted under Section 3.02A, no member of the Committee shall be
eligible to participate in the Plan while serving as a Committee member. Each
member of the Committee shall be, at all times while serving as such, a
"disinterested person", as such term is defined in Rule 16b-3(d)(3) under the
Securities Exchange Act of 1934, as amended.
3.02 Committee Authority. The Committee shall, subject to section 3.02A,
have sole and complete authority to (a) select Participants, (b) grant Options
to Participants, (c) designate Options to be granted as either ISOs or
Nonstatutory Options, (d) determine the number of shares of Common Stock to be
subject to each ISO and Nonstatutory Option granted to each Participant (subject
to the overall limitations set forth in Section 4.01), (e) determine the terms
and conditions pursuant to which Options shall be granted and prescribe the
forms and terms of Stock Option Agreements evidencing such Options and
amendments thereto, (f) determine whether, to what extent, and under what
circumstances an Option may be exercised in cash, other securities, a promissory
note, other Options, or other property (or any combination thereof), or
canceled, forfeited, or suspended and the method or methods by which an Option
may be settled, exercised, canceled, forfeited, or suspended; (g) determine
whether, to what extent, and under what circumstances Common Stock issuable with
respect to an Option under this Plan shall be accelerated or deferred either
automatically, or at the election of the holder thereof or of the Committee; (h)
interpret and administer this Plan and any instrument or agreement relating to,
or Option made under, this Plan; and (i) establish, amend, suspend, or waive
such rules and regulations and appoint such agents as it shall deem appropriate
for the proper administration of this Plan. The Committee shall have authority
to construe and interpret the Plan and Stock Option Agreements and to impose
such limitations or restrictions as may be deemed necessary or advisable by
counsel for the Company so that compliance with the Code, the securities laws of
the United States and any other applicable laws or regulations may be assured.
3.02A Options to Nonemployee Directors. The Committee is authorized and
directed to issue Nonstatutory Options to members of the Board who are not
employees of the Company in accordance with this Section 3.02A. Each member of
the Board who is not an employee of the Company or any Subsidiary shall be
granted an Option to purchase Common Stock on the date of each annual meeting of
the shareholders of Apogee Enterprises, Inc. so long as he is a member of the
Board on that date. The number of shares of Common Stock subject to each such
Option shall be equal to the product of two times the quotient of (i) the amount
actually paid to each member of the Board, respectively, as a director for the
previous year (including, without limitation, any fees paid for attending
meetings of the Board or any committee thereof) divided by (ii) the average
closing sale price of a share of Common Stock in the NASDAQ National Market
System or, if the Common Stock is then listed on a national stock exchange, on
such exchange, as reported by any publication of general circulation selected by
the Committee, for the 10 business
<PAGE>
days next preceding each annual meeting of the shareholders of Apogee
Enterprises, Inc. The amount described in subsection (ii) shall also be the
exercise price per share for Options granted under this Section 3.02A. The
Options granted under this Section 3.02A shall be exercisable in full for a
period of 10 years from the date of grant. Subject to the provisions of this
Section 3.02A, the terms, conditions, and form of any Nonemployee Director Stock
Option Agreement shall be determined by the Committee, in its discretion.
Notwithstanding anything in the Plan to the contrary, for purposes of
determining the right of optionholders under this Section 3.02A, the "Committee"
shall be deemed to consist solely of members of the Board who are not eligible
to receive Options under this Section 3.02A.
3.03 Committee Decisions. A decision by a majority of the Committee shall
govern all actions of the Committee. Such decision may be made either at a
meeting of the Committee at which a majority of its members are present or
without a meeting by a writing signed by the entire Committee. All decisions
and interpretations made by the Committee shall be binding and conclusive on the
Company and each Participant and such Participant's legal representatives and
beneficiaries.
3.04 Plan Administration. The Committee may designate officers or
employees of the Company to assist the Committee in the administration of the
Plan to execute documents on behalf of the Committee, and the Committee may
delegate to such officers or employees such other ministerial and limited
discretionary duties as it sees fit.
ARTICLE IV.
SHARES SUBJECT TO THE PLAN
4.01 Share Limitations. The shares of Common Stock to be issued and
delivered by the Company upon exercise of Options shall be authorized and
unissued shares of Common Stock. The maximum number of shares of Common Stock
which shall be reserved for issuance under the Plan shall be 1,250,000 shares;
subject, however, to the adjustments described in Article XI that may be made
after the Effective Date. No Option may be granted which could cause such
maximum limit, as so adjusted after the Effective Date, to be exceeded.
4.02 Shares Upon Option Termination. If Options shall terminate by reason
of expiration, surrender for cancellation or otherwise without being wholly
exercised, or for any reason become unexercisable as to any shares of Common
Stock, new Options may be granted covering the number of shares of Common Stock
to which such termination relates or as to which such Options have become
unexercisable.
ARTICLE V.
TERMS OF OPTION
5.01 General Effect. Except as provided in Section 3.02A, each ISO and
Nonstatutory Option shall contain such terms and conditions (which need not be
identical as among
<PAGE>
Participants) as the Committee shall determine, subject to the limitations and
requirements stated below.
5.02 Option Exercise Price. Except as provided in Section 3.02A, the
exercise price per share of Common Stock covered by an Option shall be
determined by the Committee, in the exercise of its discretion, at the time the
Option is granted; provided, however, that such exercise price for any ISO
granted shall not be less than 100 percent of the Fair Market Value of a share
of Common Stock on the Date of Grant of such ISO; and, unless otherwise
permitted by law, if any person who is granted an ISO under the Plan owns, as of
the Date of Grant of such ISO, more than 10 percent of the Company's voting
stock, the Option exercise price per share of Common Stock covered by such ISO
shall not be less than 110 percent of the Fair Market Value of a share of such
Common Stock on the Date of Grant. Except for Options granted under Section
3.02A, the exercise price per share of Common Stock covered by a Nonstatutory
Option may be less than, equal to, or greater than the Fair Market Value of a
share of Common Stock on the Date of Grant of a Nonstatutory Option.
5.03 Period Within Which an Option May be Exercised. Except for Options
granted under Section 3.02A, each Option granted under the Plan shall be
exercisable on such date or dates, during such period and for such number of
shares as shall be determined by the Committee and set forth in the Stock Option
Agreement with respect to such Option, except that no Option granted hereunder
(other than Options granted under Section 3.02A) shall be made exercisable
during the first year of its term, except upon the retirement, death or
disability of the Participant through action of the Committee.
5.04 Maximum Exercise Period. Notwithstanding any other provision of the
Plan, unless the Committee, in its sole discretion, shall determine, on the Date
of Grant of an Option, an earlier expiration date, each Option shall expire and
be no longer exercisable after the date 10 years from the Date of Grant of such
Option (or five years from the Date of Grant in the case of any ISO that is
granted to any person who, on such Date of Grant, owns more than 10 percent of
the Company's voting stock).
5.05 Effect of Termination of Employment. The following provisions apply
to all Options granted under the Plan other than Options granted under Section
3.02A:
(a) Unless otherwise determined by the Committee in its discretion, in the
event that a Participant shall cease to be employed by the Company for any
reason other than his or her gross and willful misconduct, retirement,
Disability or death, such Participant shall have the right to exercise the
Option at any time within three months after such termination of employment to
the extent of the full number of share he or she was entitled to exercise on the
date of termination, subject to the condition that no Option shall be
exercisable after the expiration of its term.
(b) In the event that a Participant shall cease to be employed by the
Company by reason of his or her gross and willful misconduct during the course
of his or her employment, including but not limited to wrongful appropriation of
funds of his or her employer or the commission of a felony, the Option shall be
terminated as of the date of the misconduct.
<PAGE>
(c) Unless otherwise determined by the Committee in its discretion, in the
event a Participant shall cease to be employed by the Company by reason of
retirement and shall not have fully exercised his or her Option, such Option may
be exercised to the extent of the full number of shares he or she was entitled
to exercise on the date of retirement at any time within three months after the
date of retirement, subject to the condition that no Option shall be exercisable
after the expiration of its term.
(d) Unless otherwise determined by the Committee in its discretion, if the
Participant shall become Disabled while in the employ of the Company, or shall
die while in the employ of, or within three months following retirement from,
the Company, and shall not have fully exercised the Option, such Option may be
exercised at any time (i) within one year after termination of employment in the
event of Disability or (ii) within one year after such Participant's death by
the executors or administrators of the Participant's estate or by any person or
persons to whom the Option is transferred by will or the applicable laws of
descent and distribution, subject to the condition that no Option shall be
exercisable after the expiration of its term.
5.06 Rights as a Shareholder. No person shall have any rights as a
shareholder with respect to any shares covered by an Option granted pursuant to
the Plan until the date of the issuance of a stock certificate to him or her for
such shares.
5.07 Leave of Absence. Time spent on a leave of absence granted by the
Company shall be considered as continued employment for purposes of the Plan,
subject to any limitation that may hereafter be imposed by law.
5.08 Nontransferability. No Option or any rights or interests of any
Participant under the Plan shall be assignable or transferable, except, in the
event of the death of a Participant, by his will or by the laws of descent and
distribution. During a Participant's lifetime, Options granted to him may be
exercised only by him, except in the event a legal representative is appointed
as a result of a Participant's disability, in which case such legal
representative may exercise Options held by such Participant. If a Participant
dies, the representative or representatives of his estate, or the person or
persons who acquired (by bequest or inheritance) the right to exercise any of
his Options, may exercise only those Options which are exercisable pursuant to
Section 5.05(d) above. Any assignment or transfer of an Option other than upon
death of a Participant shall immediately cause such Option to lapse and become
null and void.
5.09 Partial Exercise. Unless otherwise provided by the Committee, an
Option (or exercisable portion thereof) may be exercised in whole or in part,
subject to the provisions of the Stock Option Agreement.
5.10 Sequential Exercise of Options. No Option granted under this Plan
shall be subject to the sequential exercise requirements applicable to Incentive
Stock Options granted prior to 1987.
<PAGE>
5.11 Options Not Exercisable Beyond Original Term. Notwithstanding any
other provision of the Plan, unless otherwise determined by the Committee in its
discretion, no Option shall remain exercisable beyond its original term.
ARTICLE VI.
MULTIPLE GRANTS OF OPTIONS
More than one Option, and more than one form of Option, may be granted to a
Participant; provided, however, that pursuant to Section 422A(b)(7) of the Code,
the aggregate Fair Market Value (determined as of the Date of Grant of each
Option) of shares of Common Stock for which ISOs are exercisable for the first
time by a Participant during any calendar year under all ISO plans of the
Company shall not exceed $100,000. This $100,000 annual limitation on value of
ISO's exercisable shall not apply to the grant of Nonstatutory Options.
ARTICLE VII.
PERIOD FOR GRANTING OPTIONS
Options may be granted within a period of 10 years from the Initial
Effective Date of this Plan; provided, however, Options granted during the term
of this Plan may be exercised beyond such date in accordance with the terms of
the Option grant.
ARTICLE VIII.
NO EFFECT UPON EMPLOYMENT STATUS
Neither the fact that a person has been selected as a Participant nor been
granted an Option shall, in and of itself, limit or otherwise qualify the right
of his employer to terminate his employment at any time or give such person any
right to be retained in the employ of the Company. Except for nonemployee
directors of Apogee Enterprises, Inc., as provided in Section 3.02A, no person
shall have a right to be selected as a Participant, or, having been so selected,
to be selected as a Participant again.
ARTICLE IX.
METHOD OF EXERCISE
9.01 Date of Exercise. Unless otherwise determined by the Committee in
its discretion, an Option shall be exercised by a written notice to the
Committee, in form satisfactory to the Committee, and shall be signed by the
Participant or by such other person who may be entitled to exercise such Option.
Unless otherwise determined by the Committee in its discretion, the date of
exercise of any Option shall be the date on which such written notice of
exercise is received by the
<PAGE>
Committee or by such person who is designated and authorized by the Committee to
receive such notice on its behalf. The time when Common Stock may be purchased
and the number of shares which may be purchased at all times shall be set forth
in the Stock Option Agreement.
9.02 Payment of Exercise Price. The notice of exercise shall state the
number of shares of Common Stock with respect to which the option is being
exercised, and shall be accompanied by the payment of the full Option exercise
price for such shares in such manner as the Committee shall determine in its
discretion.
9.03 Issuance of Certificate. A certificate or certificates for the
shares of Common Stock purchased through the exercise of an Option shall be
issued in regular course after the exercise of the Option and payment therefor.
No person to whom an Option is granted shall have any of the rights or
privileges of a shareholder with respect to any shares of stock issuable upon
exercise of such Option until certificates representing such shares have been
issued and delivered.
ARTICLE X.
IMPLIED CONSENT OF PARTICIPANTS
Each Participant, by his acceptance of an Option, shall be deemed to have
consented to be bound, on his own behalf and on behalf of his heirs, assigns and
legal representatives, by all of the terms and conditions of the Plan as then or
thereafter in effect.
ARTICLE XI.
SHARE ADJUSTMENTS
If there is any reorganization, recapitalization, merger or consolidation
of Apogee Enterprises, Inc. or if there is any other change in the Common Stock
resulting from stock splits, stock dividends, combinations or exchanges of
shares, or other similar capital adjustments, equitable proportionate
adjustments shall be made by the Committee in (a) the number of shares that may
be covered by Options, (b) the number of shares subject to Options previously
granted, and (c) the Option exercise price of shares covered by Options
previously granted, as well as such other equitable proportionate adjustments as
the Committee may deem necessary or advisable under the circumstances so as to
avoid dilution of, or detrimental effects on, Options.
ARTICLE XII.
COMPANY RESPONSIBILITY
All expenses of the Plan, including the cost of maintaining records, shall
be borne by the Company. Neither the Company, its officers or agents, the
Board, the Committee nor any member of the Board or the Committee shall have any
responsibility or liability (other than under applicable securities acts) for
any act or thing done or left undone with respect to the price, time, quantity
or other conditions and circumstances of the purchase of shares of Common Stock
under
<PAGE>
the terms of the Plan, so long as such entitles or persons do not act in a
manner constituting gross negligence or willful misconduct.
ARTICLE XIII.
SECURITIES LAWS
The Company, the Board and the Committee shall take all necessary or
appropriate actions to ensure that all Options and all exercises thereof are in
full compliance with all applicable United States federal and state laws and all
applicable foreign securities laws. Notwithstanding the foregoing, the Company
shall not be required to deliver any shares of Common Stock upon the exercise of
an Option (or portion of such Option) prior to (a) the admission of such shares
to listing on any stock exchange on which such Common Stock may then be listed,
and (b) the completion of such registration or other qualification of such
shares under any applicable federal, state or foreign law, rule or regulation,
as the Committee shall determine to be necessary or advisable.
ARTICLE XIV.
AMENDMENT AND TERMINATION
The Board may terminate the Plan at any time. Notice of such termination
shall be given to Participants, but any failure to give such notice shall not
impair such termination. The Board may, at any time and from time to time,
amend, modify, suspend, or discontinue the Plan (including any form of Stock
Option Agreement) for any purpose required or permitted by law; provided,
however, that no such amendment or modification shall (a) materially increase
the benefits accruing to Participants under the Plan, (b) increase the number of
shares of Common Stock which may be issued under the Plan (other than as
provided in Article XI), or (c) modify the requirements as to eligibility for
participation under the Plan, without the approval of the holders of a majority
of the shares of the Common Stock then outstanding. Notwithstanding the
foregoing the Board may amend the Plan, without stockholder approval, to the
extent necessary to cause ISOs granted under the Plan to meet the requirements
of the Code. If the Plan is terminated, any unexercised Option shall continue
to be exercisable in accordance with its terms and the terms of the Plan in
effect immediately prior to such termination.
ARTICLE XV.
WITHHOLDING TAX
Where a Participant or other person is entitled to receive shares of Common
Stock pursuant to the exercise of an Option, the Company shall have the right to
require the Participant or other such person to pay to the Company the amount of
any taxes which the Company may be required to withhold with respect to such
shares before delivery to such Participant or other person of a certificate or
certificates representing such shares. The Committee may, at the request of the
Participant, and in lieu of a cash payment by the Participant, hold back from
the Participant
<PAGE>
the requisite number of shares of Common Stock necessary to satisfy the
Company's withholding responsibilities with respect to the exercise of an
Option. Upon the disposition of shares of Common Stock acquired pursuant to the
exercise of an ISO, the Company shall have the right to require the payment of
the amount of any taxes which are required by law to be withheld with respect to
such disposition.
ARTICLE XVI.
EFFECTIVE DATE
This Plan (prior to its amendment and restatement) first became effective
on April 24, 1987 (the "Initial Effective Date"). This Plan, as restated and
amended, became effective April 20, 1990 (the date of its adoption by the Board
of Directors of the Company)(the "Effective Date"); provided, however, if the
Plan is not approved by the vote of the holders of the majority of the
outstanding shares of the Company's stock within twelve (12) months from said
Effective Date, the Plan shall be deemed null and void from its inception and
all Options granted thereunder shall be terminated.
ARTICLE XVII.
NON-EXCLUSIVITY OF THE PLAN
The adoption of this Plan shall not be construed as limiting the power of
the Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock options otherwise than
under the Plan and such arrangements may be either generally applicable or
applicable only in specific cases.
Approved and adopted by the Board of Directors of Apogee Enterprises, Inc.
the 20th day of April, 1990.
/s/ William G. Gardner
---------------------------------
Secretary
Attest:
/s/ Gerald K. Anderson
- --------------------------------------
President
<PAGE>
APOGEE ENTERPRISES, INC.
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints DONALD W. GOLDFUS and GERALD K. ANDERSON as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all the shares of Common
Stock of Apogee Enterprises, Inc. held of record by the undersigned on April 28,
1995, at the Annual Meeting of Shareholders to be held on June 20, 1995, or any
adjournment thereof.
1. ELECTION OF DIRECTORS:* FOR all nominees listed below * WITHHOLD AUTHORITY
(except as marked to the to vote for all
contrary below) nominees listed
below
INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through nominee's name in the list below:
PAUL B. BURKE DONALD W. GOLDFUS JAMES L. MARTINEAU
- ------------------------------------------------------------------------
2. PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG PEAT MARWICK AS THE INDEPENDENT
AUDITORS OF THE COMPANY.
*FOR *AGAINST *ABSTAIN
- ------------------------------------------------------------------------
3. PROPOSAL TO AMEND THE COMPANY'S AMENDED AND RESTATED 1987 STOCK OPTION PLAN.
*FOR *AGAINST *ABSTAIN
- ------------------------------------------------------------------------
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly be brought before the meeting.
This proxy when properly executed will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, this proxy will be
voted FOR Proposals 1, 2 and 3. Please sign exactly as name appears below. 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.
Dated:_______________, 1995
___________________________
Signature
___________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
