<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
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
APOGEE ENTERPRISES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
APOGEE ENTERPRISES, INC.
- --------------------------------------------------------------------------------
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF APOGEE ENTERPRISES, INC.]
May 29, 1998
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 23, 1998.
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
<PAGE>
APOGEE ENTERPRISES, INC.
7900 XERXES AVENUE SOUTH
SUITE 1800
MINNEAPOLIS, MN 55431-1159
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 23, 1998
----------------
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 23, 1998 for the following purposes:
1. To elect four directors for a three-year term;
2. To approve a proposed amendment to the 1987 Partnership Plan;
3. To ratify the appointment of KPMG Peat Marwick LLP as independent
auditors for the fiscal year ending February 27, 1999; and
4. To transact such other business as may properly be brought before the
meeting.
The Board of Directors has fixed April 28, 1998 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
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,
/s/ Martha L. Richards
Martha L. Richards
General Counsel and Secretary
Minneapolis, Minnesota
May 29, 1998
<PAGE>
APOGEE ENTERPRISES, INC.
PROXY STATEMENT
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 23, 1998. Only shareholders of record at the
close of business on April 28, 1998 will be entitled to notice of and 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 proposed
amendment to the 1987 Partnership 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 "withhold" 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 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 represented at the meeting
for purposes of determining a quorum but not represented at the meeting for
purposes of calculating the vote with respect to such matter or matters.
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 29, 1998.
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS
At April 28, 1998, there were 27,496,124 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 by the Company to own
more than 5% of the outstanding voting stock of the Company at March 31, 1998.
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>
Trust of Russell H. Baumgardner(6/6/86)(1)..... 2,167,228 7.9%
c/o Lionel, Sawyer, & Collins
1100 Bank of America Plaza
50 West Liberty Street
Reno, NV 89501
Neuberger & Berman, LLC (2) ................... 2,015,400 7.3%
Neuberger & Berman Management Incorporated
605 Third Avenue
New York, NY 10158-3698
</TABLE>
- --------
(1) The 2,167,228 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, such individuals' common stock holdings
would be as follows: Goldfus, 2,911,572 (10.6%), Johnson, 2,200,308 (8.0%)
and Niederhofer, 2,688,843 (9.8%).
1
<PAGE>
(2) With respect to the information reported relating to Neuberger & Berman,
LLC ("N&B LLC") and Neuberger & Berman Management Incorporated ("N&B
Inc."), the Company has relied upon the information supplied by N&B LLC
and N&B Inc. in a Schedule 13G filing received by the Company on or about
February 17, 1998, which information was subsequently updated by N&B LLC
and N&B Inc. on March 31, 1998. N&B LLC and N&B Inc. serve as the sub-
advisor and the investment manager, respectively, of various mutual funds
which hold such shares in the ordinary course of business. As such N&B LLC
and N&B Inc. exercise shared investment discretion over various
institutional accounts which held 2,015,400 shares of the Company's Common
Stock as of March 31, 1998. Of the shares reported, N&B LLC has sole
voting power with respect to 1,089,800 shares and N&B LLC and N&B Inc.
have shared voting power with respect to 925,600 shares.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, certain officers and persons who own more than ten percent of a
registered class of the Company's equity securities to file reports of
ownership on Form 3 and changes in ownership on Forms 4 or 5 with the
Securities and Exchange Commission (the "Commission") and the NASDAQ National
Market. Specific due dates for these reports have been established by the
Commission and the Company is required to disclose in this Proxy Statement any
failure to file reports by such dates. Based solely on its review of the
copies of such reports received by it, or written representations from certain
reporting persons, the Company believes that, during the fiscal year ended
February 28, 1998, all Section 16(a) filing requirements applicable to its
officers, directors and ten percent shareholders were complied with, except
that Ms. Richards, an officer, and Mr. Cohen, a director, each filed late one
report covering her or his initial Form 3 filing and Mr. Mitchell, a director,
filed late one report covering one transaction.
ITEM 1: ELECTION OF DIRECTORS
The Company's Articles of Incorporation provide that the Board of Directors
("the Board") shall be divided into three classes of directors of as nearly
equal size as possible and further provide that the total number of directors
be determined exclusively by the Board. The term of each class of director is
three years, and the term of one class expires each year in rotation.
Currently, there are ten directors. The terms of the directors of Class III,
consisting of Directors Jerome B. Cohen, Donald W. Goldfus, James L.
Martineau, and Michael E. Shannon expire at the 1998 Annual Meeting of
Shareholders. Messrs. Goldfus and Martineau have been members of the Board
since 1964 and 1973, respectively, and were last elected to the Board at the
1995 Annual Meeting of Shareholders. In addition, Messrs. Cohen and Shannon
have joined the Board since the date of the last annual meeting of
shareholders. The terms of the directors of Class I and Class II expire at the
1999 and 2000 Annual Meeting of Shareholders, respectively.
Unless authority is withheld, the Proxy solicited hereby will be voted FOR
the election of each of Messrs. Donald W. Goldfus, James L. Martineau, Jerome
B. Cohen, and Michael E. Shannon for a three-year term expiring at the 2001
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.
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 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 Annual Meeting of Shareholders is held.
2
<PAGE>
<TABLE>
<CAPTION>
NAME AND PRINCIPAL OCCUPATION AGE DIRECTOR SINCE TERM EXPIRES
- ----------------------------- --- -------------- ------------
<S> <C> <C> <C>
Jerome B. Cohen (Class III) 65 1997 1998
Dean, Robert R. McCormick School of
Engineering and Applied Science at
Northwestern University since 1986. Prior
to that, Professor of Material Science
and Engineering from 1965 to 1986 and
Associate Professor from 1961 to 1965.
Committees: Compensation
Donald W. Goldfus (Class III) 64 1964 1998
Chairman of the Board of Directors since
1988 and 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.
Committees: Executive and Corporate
Governance
Barbara B. Grogan (Class I) 50 1996 1999
Chairman of the Board of Directors 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
Harry A. Hammerly (Class II) 64 1994 2000
Former Executive Vice President, 3M
Company (industrial, consumer, and health
care products manufacturer). Executive
Vice President, International Operations,
3M Company from 1991 to 1995. Prior to
that, various senior management positions
with 3M Company since 1973 and other
positions since 1955. Mr. Hammerly is
also a director of Cincinnati Milacron,
Inc., BMC Industries, Inc. and Brown &
Sharpe Manufacturing Company.
Committees: Audit, Executive and Corporate
Governance
Russell Huffer (Class II) 48 1998 2000
Chief Executive Officer and President of
the Company since January 1998. Prior to
that, various senior management positions
with the Company or its subsidiaries
since 1986.
Committees: Executive
James L. Martineau (Class III) 57 1973 1998
Executive Vice President of the Company
since 1996. Prior to that, various senior
management positions with the Company
since 1971.
Stephen C. Mitchell (Class I) 54 1996 1999
President and Chief Operating Officer of
Lester B. Knight & Associates, Inc. (a
privately held, professional services
company) since 1975.
Committees: Audit and Compensation
Laurence J. Niederhofer (Class II) 65 1964 2000
Retired Chief Executive Officer of the
Company's Apogee Wausau Group.
Committees: Executive and Corporate
Governance
D. Eugene Nugent (Class I) 70 1990 1999
Corporate consultant, retired Chairman and
Chief Executive Officer of Pentair, Inc.
(a manufacturer of industrial products)
from 1982 to 1992. Mr. Nugent is also a
director of Pentair, Inc. and UFE, Inc.
Committees: Compensation, Executive and
Corporate Governance
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
NAME AND PRINCIPAL OCCUPATION AGE DIRECTOR SINCE TERM EXPIRES
- ----------------------------- --- -------------- ------------
<S> <C> <C> <C>
Michael E. Shannon (Class III) 61 1998 1998
Chairman of the Board and Chief Financial and
Administrative Officer of Ecolab Inc.
(developer and marketer of premium cleaning,
sanitizing and maintenance products and
services) since 1996. Prior to that, various
senior management positions with Ecolab
since 1984. Mr. Shannon is also a director
of Henkel-Ecolab Jt Venture, Minnesota
Mutual Life Insurance Company and the
National Association of Manufacturers.
Committees: Audit and Compensation
</TABLE>
- --------
None of the above nominees or directors is related to any other director or
to any executive officer of the Company. Except as indicated above, each of
the directors has maintained his or her current principal occupation for at
least the last five years.
The Board of Directors held seven meetings during the last fiscal year. The
Company has standing Audit, Compensation, Executive and Corporate Governance
Committees of the Board of Directors. The current members of the various
committees are noted in the previous table. Each member served on the listed
committee from June 1997 through the date of this proxy statement with the
exception of Mr. Nugent, who was a member of the Audit Committee from June
1997 to January 1998; Mr. Hammerly, who was a member of the Compensation
Committee from June 1997 to January 1998 and then became a member of the Audit
Committee in January 1998; Mr. Cohen, who became a member of the Compensation
Committee in January 1998; Mr. Niederhofer, who became a member of the
Corporate Governance Committee in April 1998; and Mr. Shannon, who became a
member of the Audit and Corporate Governance Committees in April 1998.
The Audit Committee recommends the selection of the independent auditors to
the Board of Directors; reviews the scope and results of the studies performed
by the independent auditors; and reviews various auditing and accounting
matters. The Audit Committee met four times during the fiscal year.
The Compensation Committee determines the salary and other compensation of
all elected officers and senior management. The Compensation Committee also
administers the 1997 Omnibus Stock Incentive Plan and the 1987 Partnership
Plan. The Compensation Committee met four times during the fiscal year.
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 did not meet during the fiscal year.
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, annually conducts a
review of the performance of individual directors and the Board as a whole,
and suggests new director nominees to the Board. The Committee will consider
qualified nominees recommended by shareholders. Any such recommendation for
the 1999 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 January 22, 1999. 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 four
times during the fiscal year.
Each director attended more than 75% of the meetings of the Board and
Committees of which they were members during fiscal 1998.
4
<PAGE>
Compensation of Directors
Directors, except for full-time employees of the Company, 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 a committee chair is
$1,500 for each committee meeting chaired. Non-employee directors also receive
automatic, annual stock option grants to purchase 4,000 shares of the
Company's common stock under the 1997 Omnibus Stock Incentive Plan. The
Security Ownership table includes the options granted to the non-employee
directors in fiscal 1998, which for the non-employee directors as a group
totaled 32,000 shares. The per share exercise price of all such options is
approximately $19.18. 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 1998, the Company contributed $3,360 to the Employee Stock Purchase
Plan for the benefit of all non-employee directors as a group.
The Company has a consulting agreement with Laurence J. Niederhofer, a non-
employee director, 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.
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 and the executive officers of the Company
included in the Summary Compensation Table set forth under the caption
"Executive Compensation" and by all directors and executive officers of the
Company as a group, at March 31, 1998.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
---------------------------------------------------
NUMBER OF OPTIONS PERCENT OF
SHARES HELD EXERCISABLE OUTSTANDING
NAME (1) W/IN 60 DAYS TOTAL SHARES
- ---- ----------- ------------ --------- -----------
<S> <C> <C> <C> <C>
Robert G. Barbieri......... 83 2,500 2,583 (5)
Jerome B. Cohen............ 108 4,000 4,108 (5)
Donald W. Goldfus.......... 684,344(2)(3) 60,000 744,344 2.7%
Richard Gould.............. 47,587 12,500 60,087 (5)
Barbara B. Grogan.......... 418 4,000 4,418 (5)
Terry L. Hall.............. 23,375 5,000 28,375 (5)
Harry A. Hammerly.......... 5,830 14,380 20,210 (5)
Russell Huffer............. 68,308 5,000 73,308 (5)
James L. Martineau......... 247,756 35,000 282,756 1.0%
Stephen C. Mitchell........ 2,418 4,000 6,418 (5)
Laurence J. Niederhofer.... 504,883(3)(4) 16,732 521,615 1.9%
D. Eugene Nugent........... 5,400 30,362 35,762 (5)
Martha L. Richards......... -- 1,250 1,250 (5)
Michael E. Shannon......... -- -- -- (5)
All Directors and Executive
Officers as a Group
(14 persons).............. 1,590,510 194,724 1,785,234 6.5%
</TABLE>
- --------
(1) Each person shown has sole voting and investment power over 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 93,616 shares held by Mr. Goldfus' wife, as to which he disclaims
beneficial interest.
(3) The 2,167,228 shares held by the Russell Baumgardner Trust dated June 6,
1986 (see Security Ownership of Principal Shareholders) are also deemed to
be beneficially owned by Messrs. Goldfus 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 2,167,228 and the
percent of outstanding shares would be as follows: Goldfus, 10.6%;
Niederhofer, 9.8%; and all directors and executive officers as a group,
14.4%.
(4) Includes 60,448 shares held by Mr. Niederhofer's wife, as to which he
disclaims beneficial interest.
(5) Less than 1%.
6
<PAGE>
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT
Overview and Philosophy
The compensation of executive officers is determined by the Compensation
Committee of the Board of Directors (the "Committee"). The Committee is
comprised entirely of non-employee 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. Independent
compensation data from other companies of similar size and complexity is also
periodically obtained. A comprehensive survey of the other companies and
review of the Company's executive compensation system and practices were
carried out by the Committee, with the assistance of an outside compensation
consultant, in fiscal year 1997. The Committee concluded that no major changes
of the Company's system or practices were required in order to enable the
Committee properly to perform its functions for the Company.
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. The Committee emphasizes
long-term business development and creation of shareholder value. Therefore, a
major portion of total compensation is performance-based.
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. Attract and retain high performing executives by offering total
compensation plans competitive with similarly situated companies and
rewarding outstanding performance.
3. Align the interests of executive officers 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, the
Committee takes into account the executive's level of responsibility,
experience and performance in relation to that of the Company and other
companies. Base salaries are generally targeted to be at the average of
similar companies. In fiscal 1998, base salaries of executive officers, other
than the Chief Executive Officer, were generally very near the averages set
forth in the independent compensation survey obtained by the Committee. The
salary for the newly appointed Chief Executive Officer was well below average
for comparable companies.
Annual Incentive
Executives may earn annual incentive compensation under individualized cash
bonus plans. The Committee develops the plan for the Chairman, and for the
President and Chief Executive Officer, and reviews and approves plans for
other executive officers at the beginning of the fiscal year. Each plan
contains specific financial objectives, such as business unit or Company
profitability and return on assets, as well as specific objectives for
business, organization and personal development. The Committee establishes a
threshold financial target for the Company each year. The Committee then
evaluates each executive on these financial targets. If those targets are not
met, it is the goal of the Committee to not pay bonuses for financial goals.
In addition, challenging non-financial incentive objectives are also
established by the Committee for each executive. The Committee evaluates and
may award each executive for meeting these objectives. Exceeding all of the
annual objectives usually provides the executive with the opportunity to earn
total cash compensation in the upper quartile of that paid by companies of
similar size and complexity. For fiscal 1998, the range of bonus payments as a
percentage of base pay ranged from zero to 87%.
7
<PAGE>
Long-Term Incentives
Partnership Plan. To further encourage alignment of the executive's
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 each year, each participant may voluntarily defer up to fifty percent of
annual incentive compensation (to a maximum of $100,000) to be invested in the
Partnership Plan. The Company matches 100% of the deferred amount and the
aggregate is invested in the Company's common stock. The individual's amount
is vested immediately and the shares are held in trust and restricted for a
period as determined by the Compensation Committee. The Company match is made
in the form of restricted stock that is vested in equal annual increments over
a period of up to ten years, as determined by the Committee. In the
accompanying Summary Compensation Table, the deferred amount and the Company
match are shown in the column labeled "Restricted Stock Award". No other
restricted stock grants have been made to executive officers in the three-year
period shown in that Table.
Stock Option Plan. Executives are also eligible to receive grants under the
Company's stock option plan, which is administered by the Committee. Nearly
all option grants made with respect to the 1998 fiscal year 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. The remaining
option grants made with respect to the 1998 fiscal year were made under the
Company's 1997 Omnibus Stock Incentive Plan, which was approved by
shareholders at the June 17, 1997 Annual Meeting.
Under either plan, option grants may be made only at or above current market
prices so that executive rewards will accrue only as shareholder value
increases. The options granted under the 1987 Stock Option Plan typically
vested at a rate of 25 percent per year beginning on the grant's first
anniversary, although some grants made in fiscal 1997 will vest entirely
within 32 to 48 months after grant. Options granted under the 1997 Omnibus
Stock Incentive Plan typically vest in 3 to 5 years. Option grants are shown
in the table entitled "Option Grants in Fiscal 1998". Grants have generally
included a broad base of participants that includes employees below the
executive level.
Chief Executive Officer Compensation
Mr. Donald W. Goldfus held the position of Chief Executive Officer from 1986
to January 1998. His total compensation has been consistently well below the
median level of the market for CEO's at comparable companies, according to the
survey data compiled by the Company's independent compensation consultants. In
April 1997, his base salary was set at $535,000, a 19% increase. The base
salary of $535,000 still leaves Mr. Goldfus modestly below the median chief
executive base pay level for similar companies in the recent survey conducted
by an independent outside compensation consultant. Mr. Goldfus did not attain
the financial and other performance targets established at the beginning of
the fiscal year for determination of his annual incentive bonus award, but did
make significant strides towards ensuring improved financial performance in
the future. Accordingly, the Committee awarded Mr. Goldfus a bonus of $150,000
under the annual incentive plan. The sum of Mr. Goldfus' base salary and
annual incentive bonus is well below the lower end of the top quartile in the
recent independent compensation consultant market survey. Mr. Goldfus has
elected to defer fifty percent of any bonus received into the 1987 Partnership
Plan. Therefore, the accompanying Summary Compensation Table reflects a cash
bonus of $75,000. The deferred portion, as well as the Company match described
above, is reported in the restricted stock award column in that Table.
Mr. Russell Huffer attained the position of Chief Executive Officer in
January 1998. His base salary was set by the Committee in January 1998 at
$350,000. The base salary of $350,000 leaves Mr. Huffer substantially below
the median base pay level for chief executive officers of similar companies in
the recent survey conducted by an independent outside compensation consultant.
Mr. Huffer exceeded the financial and other performance targets established at
the beginning of the fiscal year for determination of his annual incentive
bonus award. Accordingly, the Committee awarded Mr. Huffer a bonus of $200,000
under the annual incentive plan. The sum of Mr. Huffer's base salary and
annual incentive bonus is well below the lower end of the top quartile in the
8
<PAGE>
recent independent compensation consultant market survey. Mr. Huffer has
elected to defer fifty percent of any bonus received into the 1987 Partnership
Plan. Therefore, the accompanying Summary Compensation Table reflects a cash
bonus of $100,000. The deferred portion as well as the Company match as
described above, is reported in the restricted stock award column in that
Table.
On April 18, 1997, Messrs. Goldfus and Huffer were granted stock options to
purchase 20,000 and 40,000 shares, respectively, of the Company's common stock
at fair market value. The options were granted under the terms of the 1987
Stock Option Plan. On January 13, 1998, Mr. Huffer was granted a stock option
to purchase 50,000 shares of the Company's common stock at fair market value.
The option was granted under the 1997 Omnibus Stock Incentive Plan. The
options were granted pursuant to the guidelines and procedures described
above.
(S)162(m) Policy
The Committee does not believe that in fiscal 1998 annual compensation
provided to any of the executive officers named in the table entitled "Summary
Compensation Table" below will exceed $1 million within the meaning of Section
162(m) of the Internal Revenue Code. Under Section 162(m), all compensation in
excess of $1,000,000 for any such officer must meet certain requirements
related to Company performance and shareholder approval in order for the
Company to fully deduct these amounts. It is the Committee's intention to keep
all executive compensation fully deductible now and in the future, but the
Committee reserves the right to provide non-deductible compensation if it
deems it to be in the best interests of the Company and its shareholders.
The Committee believes the executive compensation policies and actions
reported above reflect decisions which are consistent with the overall beliefs
and objectives of the Company.
Stephen C. Mitchell
Jerome B. Cohen
D. Eugene Nugent
9
<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
--------------------------------- ---------------------------------
OTHER ALL
ANNUAL SECURITIES OTHER
COMPEN- RESTRICTED UNDERLYING LONG-TERM COMPEN-
NAME AND PRINCIPAL SATION STOCK OPTIONS/SARS INCENTIVE SATION
POSITION YEAR SALARY (1) BONUS (2) (3) AWARD (4) AWARDS PAYOUTS (5)
------------------ ---- ---------- --------- ------- ---------- ------------ --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Donald W. Goldfus....... 1998 520,288 75,000 1,909 150,000 20,000 -- 10,850
Chairman (6) 1997 441,223 445,000 584 341,399 100,000 -- 10,200
1996 389,923 240,000 1,027 308,690 -- -- 10,200
Russell Huffer.......... 1998 232,109 100,000 -- 200,000 90,000 -- 9,250
President and Chief 1997 198,909 66,500 -- 227,030 40,000 -- 8,850
Executive Officer (6) 1996 162,410 62,500 -- 192,925 4,000 -- 8,065
James L. Martineau...... 1998 268,269 150,000 1,365 200,000 20,000 -- 64,091
Executive Vice 1997 256,903 108,800 418 341,399 40,000 -- 10,200
President 1996 240,097 159,975 744 164,595 40,000 -- 10,200
Richard Gould........... 1998 246,539 62,500 -- 125,000 20,000 -- 7,650
Senior Vice President 1997 227,308 87,540 -- 298,854 80,000 -- 7,200
1996 212,500 75,000 -- 231,531 40,000 -- 57,829
Robert G. Barbieri...... 1998 150,961 60,000 -- -- 20,000 -- 100,864
Vice President, Finance 1997 23,077 12,500 -- -- 10,000 -- 32,500
and Chief Financial 1996 -- -- -- -- -- -- --
Officer (7)
Martha L. Richards...... 1998 150,539 50,000 -- -- 5,000 -- 10,000
General Counsel 1997 -- -- -- -- -- -- --
And Secretary 1996 -- -- -- -- -- -- --
Terry L. Hall (7)....... 1998 229,115 -- -- -- 40,000 -- --
1997 225,962 87,540 -- 298,854 80,000 -- 10,248
1996 213,461 150,000 -- -- 50,000 -- 55,491
</TABLE>
- --------
(1) Fiscal 1998 and 1997 comprised 52 weeks while fiscal 1996 comprised 53
weeks.
(2) The bonus amounts shown reflect only the cash portion of the annual bonus
awarded in each fiscal year. For individuals in the 1987 Partnership Plan,
the remaining bonus amounts were deferred and shown in the actual
restricted stock awards as further detailed in Note 4 thereto.
(3) Includes interest credited under the Company's 1986 Deferred Incentive
Compensation Plan.
(4) Under the 1987 Partnership Plan, participants are given the opportunity to
voluntarily defer up to fifty percent of their annual incentive
compensation, to a maximum of $100,000. The Company matches the deferred
amount and the aggregate is invested in the Company's common stock. The
value of each executive officer's restricted stock awards, as shown in the
"Restricted Stock Award" column, is based upon the closing market price of
the Company's common stock on the respective dates of grant. The date of
grant for fiscal 1998, 1997 and 1996 was April 17, 1998, April 18, 1997,
and April 19, 1996, respectively. 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, with the exception of the 1997
grants for Messrs. Goldfus and Gould, which will vest 100% after a two-
year period, and the 1998 grant for Mr. Goldfus which will vest 100% on
February 17, 1999, and the 1998 grant for Mr. Gould which will vest in
equal amounts over a two-year period. The Company which is made in
restricted stock that is vested in equal annual increments over a period
for up to ten years, as determined by the Compensation Committee. All
shares are eligible to receive all declared dividends. For each officer
listed in the table, the total number of shares held in trust and dollar
value of those shares as of February 28, 1998, the last day of fiscal
1998, is listed below.
10
<PAGE>
<TABLE>
<CAPTION>
SHARES ACQUIRED
WITH:
----------------
YEARS OF DEFERRED COMPANY AGGREGATE
OFFICER PARTICIPATION AMOUNT MATCH $ VALUE
------- ------------- -------- ------- ----------
<S> <C> <C> <C> <C>
Donald W. Goldfus.................. 11 51,793 27,388 $1,024,404
Russell Huffer..................... 10 29,957 31,089 789,783
James L. Martineau................. 11 36,349 32,600 892,028
Richard Gould...................... 2 17,955 14,718 422,707
Robert G. Barbieri................. N/A N/A N/A N/A
Martha L. Richards................. N/A N/A N/A N/A
Terry L. Hall...................... 1 9,057 8,921 232,590
</TABLE>
(5) Represents amount 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. The 1998 amounts for Messrs.
Martineau and Barbieri also include $53,241 and $100,684, respectively,
for expenses paid in connection with their relocation. The 1998 amounts
also include cash employment awards of $20,000 and $10,000, respectively,
paid to Mr. Barbieri and Ms. Richards. The 1997 amounts for Messrs.
Barbieri and Hall also include $12,500 and $3,048, respectively, for
relocation expenses paid in connection with their relocation. The 1996
amounts for Mr. Gould and Mr. Hall also include $50,767 and $54,799,
respectively, for expenses paid in connection with their relocation.
(6) Mr. Huffer was elected as President and Chief Executive Officer effective
as of January, 1998. Mr. Goldfus ceased holding those positions effective
as of such date.
(7) Mr. Hall resigned as Vice President, Finance and Chief Financial Officer
effective as of February, 1998; Mr. Barbieri was elected to that position
effective as of February, 1998.
STOCK OPTIONS
The following tables summarize option grants and exercises during fiscal
1998 to or by the executive officers named in the Summary Compensation Table,
and the value of options held by such persons at the end of fiscal 1998. No
SARs have been granted to, or were held by, any of the named executive
officers as of February 28, 1998.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL
------------------------------------- REALIZABLE VALUE AT
% OF TOTAL ASSUMED ANNUAL
NUMBER OF OPTIONS/SARS RATES OF STOCK
SECURITIES GRANTED TO PRICE APPRECIATION
UNDERLYING EMPLOYEES EXERCISE OR FOR OPTION TERM
OPTIONS/SARS IN FISCAL BASE PRICE EXPIRATION -------------------
NAME GRANTED (#) YEAR (PER SHARE) DATE 5% 10%
- ---- ------------ ------------ ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Donald G. Goldfus (1)... 20,000 5.0% $16.75 4/18/07 $210,678 $ 533,903
Russell Huffer (2)...... 40,000 9.9% 16.75 4/18/07 421,356 1,067,806
Russell Huffer (3)...... 50,000 12.4% 12.1875 1/13/08 383,230 971,185
James L. Martineau (4).. 20,000 5.0% 16.75 4/18/07 210,678 533,903
Richard Gould (5)....... 20,000 5.0% 16.75 4/18/07 210,678 533,903
Robert G. Barbieri (6).. 20,000 5.0% 11.3125 2/2/08 142,286 360,584
Martha L. Richards (7).. 5,000 1.2% 19.875 3/3/02 27,455 60,669
Terry L. Hall (8)....... 40,000 9.9% 16.75 4/18/07 421,356 1,067,806
</TABLE>
OPTION/SAR GRANTS IN FISCAL 1998
- --------
(1) The option was granted on April 18, 1997 and will become 100% exercisable
on February 17, 1999.
(2) The option was granted on April 18, 1997 and will become 100% exercisable
in equal increments over the next five years.
(3) The option was granted on January 18, 1998 and will become 100%
exercisable in equal increments over the next four years.
11
<PAGE>
(4) The option was granted on April 18, 1997 and will become 100% exercisable
in equal increments over the next four years.
(5) The option was granted on April 18, 1997 and will become 100% exercisable
in equal increments over the next two years.
(6) The option was granted on February 2, 1998 and will become 100%
exercisable in equal increments over the next four years.
(7) The option was granted on March 3, 1997 and will become 100% exercisable
in equal increments over the next four years.
(8) The option was granted on April 18, 1997 and will become 100% exercisable
in five variable increments over the next five years. Mr. Hall ceased to
serve as an employee of the Company effective as of February 6, 1998.
Therefore, all of the options shown above have terminated effective as of
that date and may not be exercised by Mr. Hall.
AGGREGATED OPTION/SAR EXERCISES IN FISCAL 1998 AND FISCAL YEAR-END OPTION/SAR
VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF
UNEXERCISED UNEXERCISED IN-THE-
OPTIONS/SARS MONEY OPTIONS/SARS
SHARES AT FISCAL YEAR AT FISCAL YEAR
ACQUIRED ON END (#) END
EXERCISE VALUE (EXERCISABLE/ (EXERCISABLE/
NAME (#) REALIZED ($) UNEXERCISABLE) UNEXERCISABLE) (1)
- ---- ----------- ------------ -------------- -------------------
<S> <C> <C> <C> <C>
Donald W. Goldfus.. 22,500 $393,053 60,000/137,500 $776,250/$1,778,906
Russell Huffer..... 2,250 29,109 5,000/127,750 64,688/ 1,652,766
James L. Martineau. -- -- 35,000/ 75,000 452,813/ 970,313
Richard Gould...... 27,500 408,275 12,500/110,000 161,719/ 1,423,125
Robert G. Barbieri. -- -- 2,500/ 27,500 32,344/ 355,781
Martha L. Richards. -- -- 1,250/ 3,750 16,172/ 48,516
Terry L. Hall...... 25,000 100,769 5,000/ 0 64,688/ 0
</TABLE>
- --------
(1) The value of the options is determined by multiplying the difference
between the exercise price of the option and the closing price of the
Company's common stock on the NASDAQ National Market on February 28, 1998
($12 15/16 per share) by the number of shares underlying the options.
EMPLOYMENT AGREEMENT AND OTHER CERTAIN TRANSACTIONS
The Company has an employment agreement with Mr. Richard Gould, whereunder
Mr. Gould has agreed to provide the Company with defined services and not to
engage in competition with the Company for a period of one year after his
termination. Under the terms of the agreement, if Mr. Gould's employment is
terminated for reasons other than those defined in the agreement, the Company
would award Mr. Gould severance compensation in the amount equal to one year's
base compensation plus his average annual incentive compensation. If
termination occurs within ten years of the agreement, the Company would employ
Mr. Gould as a consultant for a period of up to five years following such
termination at an annual fee of $50,000. The Company also has a consulting
agreement with Mr. Laurence Niederhofer as described in "Compensation of
Directors."
12
<PAGE>
COMPARATIVE STOCK PERFORMANCE
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
FEBRUARY 28, 1993 TO FEBRUARY 28, 1998
The line graph compares the cumulative total shareholder return on the common
stock of the Company for the last five fiscal years with cumulative total
return on the S&P Small Cap 600 Index and the peer group index described below.
Base
Feb '93 Feb '94 Feb '95 Feb '96 Feb '97 Feb '98
------- ------- -------- -------- -------- --------
Apogee 100 134.13 153.7935 179.277 368.0916 239.5945
S&P SmallCap 100 121.52 116.3919 152.5082 117.9771 238.2135
Peer Group 100 108.42 113.68 116.84 133.68 161.05
- --------
Assumes $100 invested at the close of trading on February 28, 1993 in Apogee
Enterprises, Inc. common stock, S&P SmallCap 600 and the peer group composite
listed below. Assumes reinvestment of all dividends. Total return calculations
for the Indices were performed with all available data by S&P Compustat
Services, Inc.
For the fiscal year ended February 28, 1998, the Company's primary business
activities included the fabrication and coating of architectural and consumer
glass (about 25% of net sales), the fabrication, distribution and installation
of automotive replacement glass (about 38% of net sales) and the design and
installation of nonresidential curtainwall and window systems (about 38% of net
sales). The Company is not aware of any competitors, public or private, that
are similar to it in 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 market capitalization of $500
million or less as of February 28, 1998 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
Corporation, Donnelley Corporation, Excel Industries, International Aluminum
Corporation, Robertson-Ceco Corporation, Southwall Technologies and Sun
Distributors.
13
<PAGE>
ITEM 2: PROPOSAL TO AMEND THE 1987 PARTNERSHIP PLAN TO INCREASE
NUMBER OF SHARES AUTHORIZED FOR ISSUANCE
UNDER THE PLAN FROM 2,200,000 TO 3,200,000 SHARES
On January 9, 1998, the Board of Directors approved an amendment to the 1987
Apogee Enterprises, Inc. Partnership Plan (the "Partnership Plan"), subject to
shareholder approval, to increase the number of shares of common stock
authorized for issuance thereunder from 2,200,000 shares to 3,200,000.
At the present time, there are insufficient authorized but unissued shares
remaining under the Partnership Plan for issuance to key executives at levels
currently anticipated by management for fiscal 1999. An increase in the
authorized shares under the Partnership Plan is therefore necessary to allow
for such anticipated participation as well as to provide sufficient shares for
fiscal years beyond 1999. All employees, as defined by the Plan, are eligible
to participate in the plan. The Compensation Committee annually selects from
among eligible individuals, persons to participate in the 1987 Partnership
Plan. Prior to the beginning of each year, each participant may voluntarily
defer up to fifty percent of the annual incentive compensation which may be
earned by such participant (to a maximum of $100,000 for such year) to be
invested in the Partnership Plan. The Company matches 100% of the deferred
amount and the aggregate is invested in the Company's common stock. The
individual's deferred amount is vested immediately and the shares are held in
trust and restricted for a period as determined by the Compensation Committee.
The Company match is made in the form of restricted stock that is vested in
equal annual increments over a period of up to ten years, as determined by the
Committee.
The Partnership Plan was adopted by the Company and its subsidiaries to
provide key executives with increased ownership in the Company, foster and
motivate exceptional work performance and teamwork among executives and
provide supplemental retirement benefits and long-term financial security.
The proposed amendment to increase the number of shares of common stock
authorized for issuance under the Partnership Plan would give the Board of
Directors the ability to continue the Partnership Plan for the above
referenced purposes.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends a vote FOR this proposal. The affirmative
vote of a majority of the shares entitled to vote and present in person or by
proxy at the annual meeting is necessary to approve the proposed amendment.
Unless authority is withheld, the Proxy will be voted for the proposed
amendment to the Partnership Plan.
ITEM 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
February 27, 1999. 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 entitled to vote and 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, 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 1998, KPMG Peat
Marwick LLP reviewed the Company's annual report and its filings with the
Securities and Exchange Commission.
14
<PAGE>
SHAREHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
Any shareholder wishing to have a proposal considered for submission at the
1999 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 22, 1999.
GENERAL
The 1998 Annual Report to Shareholders for the fiscal year ended February
28, 1998 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 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 Annual Report on
Form 10-K, filed with the Securities and Exchange Commission, for the fiscal
year ended February 28, 1998, may do so without charge by writing to the
Secretary at Suite 1800, 7900 Xerxes Avenue South, Minneapolis, Minnesota,
55431-1159.
By Order of the Board of Directors,
/s/ Martha L. Richards
Martha L. Richards
General Counsel and Secretary
Dated: May 29, 1998
15
<PAGE>
THIS DOCUMENT CONSTITUTES PART OF A
PROSPECTUS COVERING SECURITIES THAT HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933
AMENDED AND RESTATED APOGEE ENTERPRISES, INC.
PARTNERSHIP PLAN,
AS PROPOSED TO BE AMENDED THROUGH JUNE 23, 1998
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, Inc.; Norment Industries, Inc.; Harmon Ltd.; Harmon
Contract, Inc.; Norshield Corp.; Apogee Wausau Group, Inc.; Milco Contracting,
Inc.; Viracon, Inc.; Viratec Thin Films, Inc.; Tru Vue Inc.; TerraSun, L.L.C.;
Viracon/Curvlite, Inc.; FirstCall Inc.; The Glass Depot, Inc.; The Glass Depot
of New York, Inc.; Harmon Glass Company; American Management Group, Inc.; and
Dover Glass Co.) for a select group of management or highly compensated
personnel. This Plan is designed to provide 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 Administrator appointed by the Board of
Directors, and if none, then the Committee.
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 not 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
Subsidiary, 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 any other Subsidiary. (See Article VI).
<PAGE>
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.
1.05. "Board of Directors" means the Board of Directors of Apogee
Enterprises, Inc.
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 not 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
-2-
<PAGE>
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.
-3-
<PAGE>
1.19. "Plan" means this Restated 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 non-transferable, 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.
-4-
<PAGE>
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
---------------------------------------------------
2.01. Selection 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.
2.02. Disqualification 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
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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
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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
("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 permit any
action inconsistent with those laws or interpretations, and any 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.
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ARTICLE V
ADMINISTRATION
--------------
5.01. Compensation Committee. The Plan shall be administered by a Plan
Compensation committee composed of either (i) the Board of Directors, a 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 shall 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.
5.02. Powers. The Committee shall have the exclusive and final authority
to interpret the Plan, prescribe, amend, and rescind the rules and regulations
relating to the Plan, to delegate such responsibilities or duties as are
allowable under the Plan or by law as it deems desirable, and make all other
determinations necessary or advisable for the administration of the 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.
5.03. No 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
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her behalf as a 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
--------------------------------------
6.01. Establishment 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.
6.02. Deposits 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:
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(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.
6.03. Participant 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").
6.04. Trust 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.
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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.
6.05. Interest 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
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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.
6.06. Insolvency. 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.
6.07. Distribution 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
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distribute yearly distributions in lump sum, or over a shorter or
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.
6.08. Shares Subject to Plan. Apogee hereby authorizes 1,600,000 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.
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ARTICLE VII
POOL B: RESTRICTED STOCK
-------------------------
7.01. Issuance 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.
7.02. Designation. 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.
7.03. IRC (S)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.
7.04. Restriction 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.
7.05. Legend 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
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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.
7.06. Risk 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:
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(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 event of a 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
event of forfeiture has occurred. The terms of the purchase shall be
cash in exchange for the Restricted Stock at the time of closing.
7.07. Vesting. 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 vesting 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.
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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.
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.
7.08. Escrow. 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.
7.10. Earnings 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.
7.11. Recording. No transfer of Restricted Stock shall be recognized by
Apogee Enterprises, Inc. until it is duly entered upon its books and records and
all indicia of ownership are changed accordingly; provided, however, that 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
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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.
7.12. Shares Subject to Plan. Apogee hereby authorizes 1,600,000 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.
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ARTICLE X
DILUTION OR REORGANIZATION
--------------------------
10.01. Dilution. 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 Funds) 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.
10.02. Reorganization. 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
-------------
11.01. Relation Between Trust and Plan. This Plan and the Trust are part
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.
11.02. Relation 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
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terms of this Plan and the Restricted Stock Agreement, such conflict shall be
resolved in favor of the Plan.
11.03. Headings. 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.
11.05. Construction, 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.
11.06 Income Tax Withholding. In order to comply with all applicable
federal or state income tax laws of regulations, Apogee may take such action as
it
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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 federal and
state taxes to be withheld or collected upon either (a) a distribution from any
Trust Fund accounts and/or Vintage Accounts of such Participant or (b) the
release from escrow of shares of Restricted Stock by the Plan Administrator upon
the lapse of restrictions with respect to such shares, the Committee, in its
absolute discretion and subject to such additional terms and conditions as it
may adopt, shall permit the Participant to satisfy such tax obligation by either
(a) electing to have Apogee withhold a portion of the shares otherwise to be
delivered to Participant upon such distribution or release having a Fair Market
Value on the date of such distribution or release equal to the amount of such
taxes, or (b) delivering to Apogee shares of Common Stock, other than the shares
issuable to Participant upon such distribution or release, with a Fair Market
Value on the date of such distribution or release equal to the amount of such
taxes.
ARTICLE XII
EFFECTIVE DATE OF PLAN
----------------------
This Plan, including all amendments hereto, 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.
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<PAGE>
EXHIBIT A
DEFERRED COMPENSATION TRUST AGREEMENT
(APOGEE ENTERPRISES, INC. PARTNERSHIP PLAN)
THIS TRUST AGREEMENT is made between Apogee Enterprises, Inc., and its
subsidiaries, Harmon Glass Company, Harmon Glass of Florida, Inc., Wausau Metals
Corporation, Viracon, Inc. and W.S.A., Inc., as grantor (the "Grantor"), and
Andrew Shea, as trustee (the "Trustee"), and is the Trust established for
funding of "Pool A" deferred compensation pursuant to the Apogee Enterprises,
Inc. Partnership Plan of even date.
ARTICLE I
DEFINITIONS
-----------
All terms defined in the Plan shall have the same meaning herein, unless
such term is specifically defined below. In such event, the term as defined in
this Article I shall take precedence in the interpretation of this Trust
Agreement.
1.01. "Beneficiary" means the person, persons or trust last designated by
the Participant to receive the proceeds of Participant's Trust Fund pursuant to
the Plan. Such designation shall have been made pursuant to Article VIII of the
Plan.
1.02. "Grantor" means Apogee, an Apogee Company, or the Committee, acting
on behalf of Apogee.
1.03. "Plan" means the Apogee Enterprises, Inc. Restated Partnership Plan,
as it may be amended from time to time.
1.04. "Pool A" means that portion of the incentive compensation awarded by
Apogee to the Participant, which Participant has elected to defer such
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compensation and pursuant to the Plan, to which Apogee has contributed property
as Grantor for the purpose of establishing Participant Trust Funds.
1.05. "Trustee" means the entity, entities, person or persons individually
signing this Agreement as Trustee, or any successor to such Trustee.
1.06. "Trust Fund" means the fund held by the Trustee pursuant to the
terms of this Trust, including individual Trust Fund accounts and Vintage
Accounts established for each Participant.
1.07. "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
SAVINGS CLAUSE
--------------
This Agreement is intended to conform to the provisions of Sections 671
through 677 of the Internal Revenue Code of 1986, as amended ("IRC" or the
"Code") and to 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 Trust shall be interpreted consistently with those laws and
interpretations, shall not be interpreted to permit any action inconsistent with
those laws or interpretations, and any 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
provisions.
ARTICLE III
TRUST PROPERTY
--------------
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3.01. Initial Contribution. The Grantor, desiring to create a Trust for
the benefit of Participants in the Plan, and for other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged,
hereby transfers and irrevocably assigns to the Trustee as its initial
contribution to the Trust the sum of One Dollar ($1.00) .
3.02. Required Contributions. Following the award of Incentive
Compensation to a Participant who has elected to defer a portion of such
compensation under the Plan, and as soon thereafter as may be reasonably
practicable, Grantor shall deposit with the Trustee (for the benefit of a
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 required to be
deposited with the Trust. No fractional shares of Common Stock shall be
accepted for deposit by the Trust.
3.03. Other Contributions. The Grantor may periodically contribute
additional funds to the Trust, but shall not be required to do so by this
Agreement.
3.04. The Plan. All contributions to the Trust shall be made in
accordance with the terms of the Plan. Yearly transfers and contributions are
wholly dependent upon the award of Incentive Compensation to Participants in any
Fiscal Year and, based on the foregoing, no contributions by the Grantor will be
required for a year in which no Incentive Compensation is awarded.
3.05. Trust Estate. All initial, required, and other contributions of
funds or property, including individual Participant Trust Fund accounts, are
referred hereto herein collectively as the Trust Estate or the Trust assets.
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ARTICLE IV
REVOCATION, AMENDMENT AND TERMINATION
-------------------------------------
4.01. Revocation. Grantor declares that this Agreement is irrevocable and
Grantor shall not have the right or power to alter, amend, revoke or terminate
this Agreement, except as specifically provided in Section 4.02 hereof.
4.02. Amendment. This Agreement may be amended only as and to the extent
provided in this Section 4.02. The Grantor may amend this Agreement only as
follows:
(a) To make such changes as may be necessary to prevent taxation
to the Participant (or to the beneficiary) of the Grantor's
contributions to the Trust, trust earnings, or trust assets until such
time as all or a portion of the Participant's Trust Fund and Vintage
Accounts are actually distributed to the Participant or to the
Beneficiary.
(b) To remove the Trustee and to appoint a successor Trustee in
its place as provided in Section 9.01 hereof.
(c) All amendments to this Agreement shall be in writing and
shall be signed by the Grantor and by the Trustee.
4.03. Termination. This Agreement shall remain in full force and effect
until such time as all Trust Funds and Vintage Accounts are fully and completely
distributed in accord with the provisions of this Agreement, including proper
accounting therefor. Termination of the Plan, for any reason, shall not affect
this Agreement nor the duties and obligations of the Trustee, or any Participant
or Beneficiary, or the Grantor hereunder.
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ARTICLE V
GRANTOR'S CREDITORS AND INTEREST OF PARTICIPANTS
------------------------------------------------
5.01. Grantor's Creditors. Notwithstanding any statement contained herein
or in the Plan to the contrary, all of the assets of the Trust Estate 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 or their
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.
5.02. Interest of Participant. Assets of the Trust are not intended to
serve as security for payment of Participant Trust Funds under the Plan if
Grantor (as a specific Apogee Company) is or becomes insolvent. All rights
created under the Plan and the Trust shall be and are mere unsecure contractual
rights of a Participant against Grantor, defined herein as the Apogee Company
from whom the Participant was awarded Incentive Compensation in a particular
Fiscal Year. A Participant's right to receive payments of Trust funds pursuant
to this Agreement is and shall be no greater than the right of an unsecured
general creditor of the applicable Apogee Company joining as a Grantor of this
Agreement.
5.03. Spendthrift Clause. No right, benefit or payment under this
Agreement or the Plan shall be subject to attachment or other legal process for
the debts of a Participant or any beneficiary of a Participant, 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 the Trustee, or the Grantor by virtue of the
provisions of this Agreement or the Plan.
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<PAGE>
ARTICLE VI
INVESTMENT, MANAGEMENT AND CONTROL
----------------------------------
The Trustee shall discharge its responsibilities for the investment,
management and control of Trust assets solely in the interest of the
Participants and Beneficiaries of the Plan. The Trustee shall accumulate all
net income (Trust income net of income taxes) and shall add such net income to
principal for reinvestment. 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 interest 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.
ARTICLE VI
DISTRIBUTIONS
-------------
7.01. 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 or longer period
as the Committee may find appropriate.
7.02. Alternative Distribution Methods. Subject to the provisions of
Section 7.01 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), and such distribution election
including (i) a lump sum on
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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, Disability, or Death. A Participant shall elect the
manner of distribution on the form attached to the Plan as Exhibit C 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.
7.03. Yearly Installment Distributions. In the event of installment
distribution, each yearly installment shall be transferred on the fifteenth
(15th) 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.
7.04. Form of Distributions. Distributions made by the Trustee shall be
made only in Common Stock.
ARTICLE VIII
TRUST FUND AND ACCOUNTING
-------------------------
8.01. Participant 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 the Grantor
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 Section 5.02
"Interest of Participant").
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8.02. Trust Fund Accounting. The Trustee shall credit each Participant's
Trust Fund accounts and respective Vintage Accounts with (i) the number of
shares of Common Stock contributed by Grantor on Participant's behalf, 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
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 Grantor.
Each Vintage Account shall be debited or credited, as applicable, for additional
shares purchased by the Trustee on 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 on 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 the respective
Grantor company. To the extent Grantor incurs taxable income in respect to cash
dividends declared and paid on Participant Pool A shares, Grantor 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.
ARTICLE IX
TRUSTEE
-------
9.01. Removal. The Grantor shall have the right to discharge any Trustee,
and to appoint a successor Trustee in its place. Discharge of a Trustee shall
be by delivery of thirty (30) days written notice to such Trustee, accompanied
by the name
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of its intended successor. Successor Trustees shall be appointed only if
qualified to act under the laws of any state or of the United States.
9.02. Resignation. A Trustee may resign at any time by delivering thirty
(30) days written notice of resignation to the Grantor. Upon receipt of such
notice the Grantor shall appoint a successor Trustee. The successor Trustee
shall be appointed as provided in Section 9.01.
9.03. Compensation of Trustee. Neither the Trustee nor any designated
successor Trustee, shall be entitled to receive any commissions or other
compensation for receiving or disbursing the principal or income of the Trust
Estate, unless authorized in writing by the Grantor.
9.04. Administrative Powers. Subject to a limitation imposed by other
provisions of this Agreement, but without limiting by implication or otherwise
the directions given to or powers conferred upon the Trustee by this Agreement
or by law, the Trustee is expressly granted the following additional powers,
authority and discretions in relation to any and all of the Trust property, at
any time constituting part of the Trust Estate or any of the Trust Estate
hereunder, and whether constituting principal or income, and generally with
relationship to the management and administration of the Trust:
(a) Investments. When investing, reinvesting, purchasing,
acquiring, exchanging, selling and managing the Trust Estate, the
Trustee shall act with the care, skill, prudence, and diligence under
the circumstances then prevailing, that a prudent person acting in a
like capacity and familiar with such matters would use. Within the
limitations of the foregoing standard, the Trustee, by way of
illustration is authorized to acquire certain forms of property and
investment and do the following:
1. To vote stock, give proxies, pay calls for assessments
and to sell or exercise stock options, subscription rights and
conversion rights;
2. To participate in foreclosures, reorganizations,
consolidations, mergers, liquidations, pooling agreements, voting
trusts, consent to corporate sales and other acts, and to
register
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<PAGE>
securities or other property in its own name or in the name of
its nominee without disclosing any fiduciary relationship;
3. The Trustee may, without liability, continue to hold
property received into the Trust at its inception or subsequently
added to it or acquired pursuant to proper authority if as long
as the Trustee, in the exercise of good faith and of reasonable
prudence, discretion and intelligence, may consider that
retention is in the best interests of the Trust.
9.05. Controversy. If any controversy arises with respect to this Trust,
the Trustee shall take action as directed in writing by the Committee or, in the
absence of such written direction, as it deems advisable, whether by legal
proceedings, compromise or otherwise. The Trustee may retain funds or property,
or involve or pay in such funds or property to a court of competent jurisdiction
without liability pending settlement of the controversy.
9.06. Employment of Counsel. The Trustee may consult with legal counsel
(who may be counsel for the Grantor) and shall be fully protected with respect
to any action taken or admitted by it in good faith pursuant to advice of
counsel.
9.07. Bond. The Trustee shall not be required to post any bond or other
security for the faithful performance of any of its duties. The Trustee shall
have the obligation of exercising all of its duties and discretions in a
fiduciary manner.
9.08. Receipt of Materials and Voting. The Trustee shall deliver to each
Participant as promptly as practicable, by mail or otherwise, all notices of
meetings, proxy statements and other material distributed by Apogee Enterprises,
Inc., or other issuers to its or their stockholders. All shares of Common Stock
in each Participant's account will be voted by the Trustee in accordance with
the Participant's signed proxy instructions duly delivered to Trustee or
otherwise in accordance with applicable rules of the applicable regulatory
authority.
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ARTICLE X
INSOLVENCY
----------
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.
ARTICLE XI
MISCELLANEOUS
-------------
11.01. Relationship Between Trust and Plan. This Plan and the Trust are
part of a single integrated Deferred Compensation Plan and shall be construed
with reference to the other. In the event of any conflict between the terms of
the Plan and this Trust, such conflict shall be resolved in favor of the Trust.
11.02. Headings. 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 Trust Agreement, such
conflict shall be resolved in favor of the text.
11.03. Counterparts. This Trust Agreement 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 Agreement.
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11.04. Construction and Binding Effect. This Plan shall be governed by
and construed in accordance with the law of the State of Minnesota. This
Agreement shall be binding upon and inure to the benefit of the Grantor and its
successors and assigns and the Participants and their heirs and personal
representatives.
11.05. Situs. This Trust shall be deemed to be a Minnesota trust and
shall be governed and interpreted as such.
11.06. Acceptance of Trust. The Trustee accepts the Trust and agrees to
carry out the provisions on its part to be performed.
11.07. Term. This Trust shall remain in existence for an uncertain term
as provided in and in accordance with Section 4.03 of this Agreement.
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<PAGE>
IN WITNESS WHEREOF the Grantor and the Trustee have executed this Agreement
this 28th day February, 1987.
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
TRUSTEE
/s/ Andrew Shea
------------------------------------------
Attest:
- --------------------------------
Secretary
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<PAGE>
EXHIBIT B
RESTRICTED STOCK AGREEMENT
(APOGEE ENTERPRISES, INC. PARTNERSHIP PLAN)
THIS RESTRICTED STOCK AGREEMENT is made between Apogee Enterprises, Inc.
and ________________ ("Apogee"), and ____________ (the "Participant"), and is
the Restricted Stock Agreement established for the purpose of setting forth the
terms and conditions upon which the funding of "Pool B" Restricted Stock shall
be issued to Participant pursuant to the Apogee Enterprises, Inc. Restated
Partnership Plan.
1. Acceptance of Plan Terms and Definitions. Participant is eligible to
participate in Apogee's Partnership Plan with respect to receipt of Pool B
Restricted Stock. Participant hereby acknowledges having received a copy of the
Plan and all exhibits thereto, and agrees to be bound by its terms and
conditions. All terms defined in the Plan shall have the same meaning herein.
2. Issuance and Ownership. Pursuant to Participant's election to defer
Incentive Compensation as provided in Article III of the Plan and concurrently
upon funding of the Pool A Trust, subject to execution of this Agreement by
all parties hereto, Apogee shall cause to have issued or purchased in
Participant's name _____ shares of Common Stock as provided in and determined by
Section 7.02 of the
Plan.
3. Designation. Common Stock transferred to a Participant in Section 2
hereof 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 Section 6 hereof.
4. IRC (S)83. 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.
5. Restriction on Transfer of Shares. Except as to Participant's vested
interest in and to the Restricted Stock as provided hereinafter (Unrestricted
Stock),
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Participant (or any Beneficiary of 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 Participant or Participant's Beneficiary. Any stock which is no longer
subject to Section 6 hereof 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.
6. Legend 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 Participant or Participant's
Beneficiary 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 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 has been placed
with Apogee Enterprises, Inc., as well as any transfer agent appointed
by it, preventing transfer of any Restricted Stock of Participant or
Participant's Beneficiary, pending removal of the restrictions on
transfer as set forth herein.
(c) Removal of Legend. The legend endorsed on 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 Participant or
Beneficiary of Participant become vested
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<PAGE>
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 Participant or a Beneficiary of 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. Risk of Forfeiture. The Committee has established, in its sole
discretion, events by which Participant will forfeit his or her entire interest
in Restricted Stock. Such events are set forth on Schedule 1 to this Agreement,
which Schedule is attached hereto and incorporated by reference herein. A
forfeiture is not and shall not be interpreted to be a Disqualification pursuant
to Section 2.02 of the Plan. In the event of a forfeiture of Restricted Stock,
Participant shall offer (or be deemed to have offered automatically) to Apogee
all, and not less than all, of 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 event of forfeiture has occurred. The terms of
purchase shall be cash in exchange for the Restricted Stock at the time of
closing.
8. Vesting. Except as otherwise provided in this Agreement, 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 as set forth in Schedule 1. All Restricted Stock transferred to
Participant with respect to Incentive Compensation granted for the 19__ Fiscal
Year shall vest in accordance with Schedule 1. Participant acknowledges that
the Committee may have or will, 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
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which may differ from any other vesting schedule established for Participant in
another Fiscal Year.
If any of the following events occur while 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.
9. Escrow. Participant acknowledges that the Restricted Stock issued and
outstanding in the name of Participant shall be retained in a bank safe deposit
box under the control of the Plan Administrator unless and until such stock
becomes Unrestricted Stock pursuant to the Plan.
10. Voting. Restricted Stock may be voted by 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.
11. Earnings on Shares. Participant 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 Participant as a result of such share ownership shall, however, be
Restricted Stock subject to the provisions of the Plan and this Agreement,
including the vesting schedule or schedules established by the Committee.
12. Recording. No transfer of Restricted Stock shall be recognized by
Apogee Enterprises, Inc. until it is duly entered upon its books and records and
all indicia of ownership are changed accordingly; provided, however, that 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
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<PAGE>
recognized by Apogee Enterprises, Inc. and shall not be entered upon its books
and records.
13. Miscellaneous.
13.01. Relationship between Agreement and Plan. This Agreement and
the Plan 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 the
Plan and this Agreement, such conflict shall be resolved in favor of the Plan.
13.02. Headings. All section headings herein 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
Agreement, its exhibits, or collateral documents, such conflict shall be
resolved in favor of the text.
13.03. Counterparts. This Agreement may be executed in an original
and any number of counterparts, all of which shall be deemed an original and all
of which, taken together, shall constitute one agreement.
13.04. Construction and Binding Effect. This Agreement shall be
governed by and construed in accordance with the laws of the State of Minnesota.
This Agreement shall be binding upon and inure to the benefit of all parties
hereto, their successors and assigns, and their heirs and personal
representatives.
13.05. Amendment. This Agreement may be amended only upon execution
of a written instrument evidencing such amendment executed by all parties
hereto.
13.06. Bond. The Administrator shall not be required to post any
bond or other security for the faithful performance of its duties. If any
controversy arises with respect to this Agreement, the Administrator may retain
funds or property, or involve or pay in such funds or property to a court of
competent jurisdiction without liability pending settlement of the controversy.
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<PAGE>
IN WITNESS WHEREOF, Apogee and Participant have executed this Agreement
this ___ day of __________, 19__.
APOGEE
By___________________________________
__________________, Member,
Plan compensation committee
______________________________________
Participant
B-6
<PAGE>
SCHEDULE 1
----------
APOGEE ENTERPRISES, INC. PARTNERSHIP PLAN
-----------------------------------------
RESTRICTED STOCK AGREEMENT VESTING SCHEDULE
-------------------------------------------
PLAN YEAR: 1988
----------------
Pursuant to Sections 7 and 8 of this Restricted Stock Agreement, the Committee
has established the following vesting schedule with respect to Pool B Restricted
Stock transferred to the undersigned Participant for the year indicated. If the
Participant has satisfied Requirements (1) or (2) below at the end of any Fiscal
Year listed in Column A, the corresponding percentage (as set forth in Column B)
of the Restricted Stock transferred to the Participant shall become Unrestricted
on the last day of that Fiscal Year.
Requirements:
- ------------
(1) Participant must have been in the employ of an Apogee Company for the
entire applicable Fiscal Year, OR
(2) If the Participant is not in the employ of an Apogee Company for an
entire Fiscal Year, but has entered in to a binding agreement to not
engage in competition with any Apogee Company subsequent to
Participant's Early Retirement, then the Participant must not have
engaged in competition (as defined by the agreement) with any Apogee
Company at any time during the applicable Fiscal Year.
Vesting Schedule: For Restricted Stock to be Transferred to the
Participant on or about May 1, 1988
Column A Column
-------- ------
Fiscal Year
Ending Portion
February Vesting
-------- -------
1989 %
1990 %
1991 %
1992 %
1993
1994 %
1995 %
1996 %
1997 %
1998 %
--------
Total 100%
========
B-7
<PAGE>
__________________________ ATTEST:
Participant's Signature
_______________________________
Signature
__________________________
Name of Participant
(Please Print) _______________________________
Name
__________________________ _______________________________
Date Date
B-8
<PAGE>
EXHIBIT C
---------
APOGEE ENTERPRISES, INC.
ELECTION TO PARTICIPATE IN
DEFERRED COMPENSATION PARTNERSHIP PLAN
TO: THE COMPENSATION COMMITTEE, APOGEE BOARD OF DIRECTORS:
- ----------------------------------------------------------
1. Acceptance of Plan Terms. The undersigned is eligible to participate
in Apogee's deferred compensation Partnership Plan, effective February 28, 1987
(the "Plan"). The undersigned hereby acknowledges having received a copy of the
Plan and all exhibits thereto, including the Trust Agreement (the "Trust") of
even date and agrees to be bound by its terms and conditions. All terms defined
in the Plan or the Trust shall have the same meaning herein.
2. Deferral - Amount. The undersigned, pursuant to Article III of the
Plan, hereby elects to defer the following portion of the compensation that may
become due to Participant under the Plan with respect to Apogee's Fiscal Year
ending __________, 19__ (CHOOSE ONE OPTION ONLY):
____ $__________, or such lesser amount as may be equal to, but not greater
than fifty percent (50%) of Incentive Compensation earned by the
undersigned under the Plan, OR
____ ___% (not to exceed fifty percent (50%)) of the total Incentive
Compensation earned by the undersigned under the Plan, OR
____ An amount equal to the entire amount of Incentive Compensation earned
by the undersigned under the Plan less $_____, which amount shall not
exceed fifty percent (50%) Incentive Compensation. In the event such
amount exceeds fifty percent (50%) the Committee shall adjust the
dollar amount above to allow for deferral of exactly fifty percent
(50%) of Incentive Compensation.
3. Distributions - Election to Defer. This is the undersigned's election
to defer compensation under the Plan for the Fiscal Year ending February __,
19__. Pursuant to Article VI of the Plan, the undersigned hereby elects to
receive distributions from the Participant's Pool A Trust Fund in the following
manner (CHOOSE ONE OPTION ONLY):
____A. In a lump sum, on the following date which is subsequent to the
Base Period: February 15, 19__(19__ or later)
____B. In lump sum upon my Retirement (not including Early Retirement),
Disability, Termination of Employment (subsequent to the Base period),
or death.
C-1
<PAGE>
____C. Series of Annual Installment Distributions commencing on February 15,
19__ (19__ or later), and over ___ (# of years) consecutive yearly
installments.
However, upon the earlier of my death or disability:
____1. Series of Annual Installment Distributions
commencing within 90 days of my death or disability
and over ___ (# of years) consecutive yearly
installments, OR
____2. Retain original payment schedule.
*___D. Series of Annual Installment Distributions commencing within 90 days of
the occurrence of any one of the following events:
-Upon death; over ___ consecutive yearly installments.
-Upon Disability, over ___ consecutive yearly installments.
-Upon Retirement (not including Early Retirement), over ___
consecutive yearly installments.
-Upon Termination of Employment (other than on account of death,
disability, or retirement) and subsequent to the Base Period, over ___
consecutive yearly installments.
*Participant acknowledges that if Option C or D above is chosen, pursuant to
Section 6.07 of the Plan, the Committee may vary the time and manner of making
installment payments. Further, as a result of your election to receive
installment payments under Option C or D, the amount of yearly distributions may
be made in lump sum, or over a shorter or longer period as the committee, in its
sole discretion, may find appropriate.
Participant acknowledges that any Pool A Incentive Compensation awarded to
Participant under the 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 your Trust Fund shall be returned to Apogee and the dollar amount of
Incentive Compensation forgone by this election shall be promptly remitted to
the Participant.
C-2
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this document on the day
and year hereafter indicated.
ATTEST: _______________________________
Name
By________________________ _______________________________
Name Signature
__________________________ _______________________________
Signature Date
__________________________
Date
NOTE: IN MAKING YOUR ELECTION TO DEFER COMPENSATION, YOU SHOULD CONSULT WITH
YOUR ATTORNEY, TAX ADVISOR, OR FINANCIAL ADVISOR TO DETERMINE THE SUITABILITY OF
THE DEFERRAL AND THE VARIOUS DISTRIBUTION ALTERNATIVES TO YOUR PARTICULAR
FINANCIAL AND TAX CIRCUMSTANCES.
Received by Apogee this day of February,
19__.
By______________________________________
Administrator, Plan compensation
committee
C-3
<PAGE>
EXHIBIT D
---------
APOGEE ENTERPRISES, INC.
DESIGNATION OF BENEFICIARY FOR PAYMENTS
DUE UNDER PARTNERSHIP PLAN
TO: THE COMPENSATION COMMITTEE, APOGEE BOARD OF DIRECTORS:
- ----------------------------------------------------------
The undersigned is a Participant in Apogee Enterprises, Inc. ("Apogee")
Partnership Plan, effective February 28, 1987 ("the Plan").
Pursuant to Article VIII of the Plan, the undersigned hereby designates the
following persons or entities as primary and secondary beneficiaries of any
"Pool A" (deferred compensation) and "Pool B" (Restricted Stock) property or
amount due the undersigned under the Plan payable by reason of my death:.
Primary Beneficiary:
- -------------------
Name: Address: Relationship:
______________________ ___________________ ____________________
___________________
Secondary (Contingent) Beneficiary
- ----------------------------------
Name: Address: Relationship:
______________________ ___________________ ____________________
___________________
THE RIGHT TO REVOKE OR CHANGE ANY BENEFICIARY DESIGNATION IS HEREBY RESERVED.
ALL PRIOR DESIGNATIONS (IF ANY) OF BENEFICIARIES AND SECONDARY BENEFICIARIES ARE
HEREBY REVOKED.
The Committee shall cause the Trustee or the Administrator, as applicable, to
pay all sums payable under the Plan by reason of my death to the Primary
Beneficiary, if he or she survives me, and if no Primary Beneficiary shall
survive me, then to the Secondary Beneficiary, and if no named beneficiary
survives me, then the Trustee shall pay all amounts in accordance with Article
VIII of the Plan. In the event that a named beneficiary survives me and dies
prior to receiving the entire amount payable under the Plan, then and in that
event, the remaining unpaid amount, payable according to the terms of the Plan,
shall be payable to the personal representative of the estate of said deceased
beneficiary, who survives me, but dies prior to receiving the total amount due
under the Plan.
D-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this document on the day
and year hereinafter indicated, in the presence of the witnesses indicated below
who each signed as witnesses in the presence of the undersigned and each other.
_______________________________________
Name
_______________________________________
Signature
_______________________________________
Date
ATTEST:
____________________
Name
____________________
Signature
____________________
Date
NOTE: IN PREPARING THIS DESIGNATION OF BENEFICIARY, YOU SHOULD CONSULT WITH YOUR
ATTORNEY TO DETERMINE THE APPROPRIATE METHOD OF DESIGNATION CONSISTENT WITH YOUR
PERSONAL ESTATE PLAN.
D-2
<PAGE>
APOGEE ENTERPRISES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints RUSSELL HUFFER, ROBERT G. BARBIERI and MARTHA L.
RICHARDS as Proxies, each with the power to appoint his or her 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, 1998, at the Annual Meeting of Shareholders to be held
on June 23, 1998, or any adjournment thereof.
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS: / / FOR all nominees listed below / / WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees
contrary below) listed below
</TABLE>
INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through nominee's name in the list below:
JEROME B. COHEN DONALD W. GOLDFUS
JAMES L. MARTINEAU MICHAEL E. SHANNON
- --------------------------------------------------------------------------------
2. PROPOSAL TO APPROVE AMENDMENT TO THE 1987 PARTNERSHIP PLAN.
/ / FOR / / AGAINST / / ABSTAIN
- --------------------------------------------------------------------------------
3. PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG PEAT MARWICK AS THE INDEPENDENT
AUDITORS OF THE COMPANY.
/ / 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: , 1998
------------------------
-------------------------------------
Signature
-------------------------------------
Signature if held jointly
-------------------------------------
Title (If applicable)
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
