UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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 § 240.14a-12 |
Apogee Enterprises, Inc.
(Name of Registrant as Specified In Its Charter)
Not Applicable
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x | No fee required. | |||
¨ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||
(1) | Title of each class of securities to which transaction applies:
| |||
(2) | Aggregate number of securities to which transaction applies:
| |||
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
| |||
(4) | Proposed maximum aggregate value of transaction:
| |||
(5) | Total fee paid:
| |||
¨ | Fee paid previously with preliminary materials. | |||
¨ | Check box if any part of the fee is offset as provided by Exchange Act Rule 240.0-11 and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
(1) | Amount Previously Paid:
| |||
(2) | Form, Schedule or Registration Statement No.:
| |||
(3) | Filing Party:
| |||
(4) | Date Filed:
|
May 12, 2014
Dear Shareholder:
You are cordially invited to attend the 2014 Annual Meeting of Shareholders of Apogee Enterprises, Inc. to be held at Apogees headquarters, 4400 West 78th Street, Suite 520, Minneapolis, Minnesota, commencing at 9:30 a.m. Central Daylight Time on Wednesday, June 25, 2014. The Corporate Secretarys formal notice of the meeting and the proxy statement appear on the following pages and describe the matters to come before the meeting.
We hope that you will be able to attend the meeting, and we look forward to seeing you. Even if you plan to attend the meeting, we urge you to vote your shares by either Internet or mail as promptly as possible so your shares will be represented at the annual meeting. Instructions on voting your shares are on the Notice of Internet Availability of Proxy Materials you received for the annual meeting. If you received paper copies of our proxy materials, instructions on the two ways to vote your shares can be found on the enclosed proxy form. Internet voting facilities for shareholders of record will be available 24 hours a day and will close at 11:59 p.m. Eastern Daylight Time (10:59 p.m. Central Daylight Time) on June 24, 2014. If you attend the meeting in person and you are a shareholder of record, you may at that time revoke any proxy previously given and vote in person, if desired.
Sincerely, | ||||
Joseph F. Puishys | Bernard P. Aldrich | |||
Chief Executive Officer | Chair of the Board of Directors |
APOGEE ENTERPRISES, INC.
4400 West 78th Street
Suite 520
Minneapolis, Minnesota 55435
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on June 25, 2014
NOTICE IS HEREBY GIVEN that the 2014 Annual Meeting of Shareholders of Apogee Enterprises, Inc. will be held at Apogees headquarters, 4400 West 78th Street, Suite 520, Minneapolis, Minnesota, commencing at 9:30 a.m. Central Daylight Time on Wednesday, June 25, 2014 for the following purposes:
1. | Election of two Class I directors for three-year terms ending in the year 2017 and one Class III director for a two-year term ending in the year 2016; |
2. | Advisory approval of Apogees executive compensation; |
3. | To consider and act upon a proposal to approve the 2014 Restatement of the Apogee Enterprises, Inc. 2009 Non-Employee Director Stock Incentive Plan; |
4. | To consider and act upon a proposal to approve the 2014 Restatement of the Apogee Enterprises, Inc. Deferred Compensation Plan for Non-Employee Directors; |
5. | Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending February 28, 2015; and |
6. | Transaction of such other business as may properly be brought before the meeting. |
The Board of Directors has fixed May 2, 2014 as the record date for the meeting. Only shareholders of record at the close of business on that date are entitled to receive notice of and to vote at the meeting.
Pursuant to rules adopted by the Securities and Exchange Commission, we have elected to provide access to our proxy materials over the Internet. Accordingly, we have sent our shareholders a Notice of Internet Availability of Proxy Materials (the Notice) containing instructions on how to access our 2014 proxy statement and our fiscal 2014 Annual Report to Shareholders online. Shareholders who have received the Notice will not be sent a printed copy of our proxy materials in the mail unless they request to receive a printed copy.
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be held on June 25, 2014: Our 2014 Proxy Statement and our Fiscal 2014 Annual Report to Shareholders are available at www.proxyvote.com.
By Order of the Board of Directors, |
Patricia A. Beithon |
General Counsel and Corporate Secretary |
Minneapolis, Minnesota
May 12, 2014
TABLE OF CONTENTS
1 | ||||
1 | ||||
1 | ||||
1 | ||||
1 | ||||
1 | ||||
2 | ||||
2 | ||||
2 | ||||
What is the difference between a shareholder of record and a street name holder? |
3 | |||
3 | ||||
3 | ||||
3 | ||||
What vote is required for the election of directors or for a proposal to be approved? |
4 | |||
4 | ||||
5 | ||||
5 | ||||
5 | ||||
Can I change my vote after submitting my proxy or voting instructions? |
5 | |||
5 | ||||
6 | ||||
Who pays for the cost of proxy preparation and solicitation? |
6 | |||
6 | ||||
6 | ||||
8 | ||||
9 | ||||
10 | ||||
11 | ||||
12 | ||||
12 | ||||
14 | ||||
16 | ||||
16 | ||||
16 | ||||
16 | ||||
16 | ||||
16 | ||||
17 | ||||
Procedures for Shareholder Recommendations or Nominations of Director Candidates |
17 | |||
17 | ||||
18 | ||||
18 | ||||
20 | ||||
20 |
i
21 | ||||
21 | ||||
Non-Employee Director Compensation Arrangements During Fiscal 2014 |
21 | |||
23 | ||||
25 | ||||
25 | ||||
25 | ||||
44 | ||||
45 | ||||
48 | ||||
49 | ||||
51 | ||||
52 | ||||
53 | ||||
PROPOSAL 2: ADVISORY APPROVAL OF APOGEES EXECUTIVE COMPENSATION |
59 | |||
60 | ||||
67 | ||||
AUDIT COMMITTEE REPORT AND PAYMENT OF FEES TO INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
71 | |||
71 | ||||
71 | ||||
72 | ||||
PROPOSAL 5: RATIFICATION OF APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
72 | |||
SHAREHOLDER PROPOSALS FOR OUR 2015 ANNUAL MEETING OF SHAREHOLDERS |
72 | |||
73 | ||||
73 | ||||
73 | ||||
APPENDIX A | ||||
APPENDIX B |
ii
|
PROXY STATEMENT 2014 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JUNE 25, 2014 |
The Board of Directors of Apogee Enterprises, Inc. (Apogee or the Company) is soliciting proxies for use at our annual meeting of shareholders to be held on Wednesday, June 25, 2014, and at any adjournment of the meeting. We are first making the proxy statement and form proxy card and voting instructions available to our shareholders on or about May 13, 2014.
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
1
2
3
4
5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information concerning beneficial ownership of our common stock outstanding as of May 2, 2014, the record date for our 2014 Annual Meeting of Shareholders, by persons known to us to own more than 5% of our common stock. Unless otherwise indicated, the named holders have sole voting and investment power with respect to the shares beneficially owned by them.
Name of Beneficial Owner |
Amount and Nature of Beneficial Ownership (#) |
% of Common Stock Outstanding | ||
BlackRock, Inc.(1) |
2,492,464 | 8.6 | ||
Franklin Resources, Inc.(2) |
2,294,880 | 7.9 | ||
The Vanguard Group, Inc.(3) |
1,879,372 | 6.5 | ||
Westwood Management Corp.(4) |
1,538,187 | 5.3 | ||
Dimensional Fund Advisors LP(5) |
1,445,851 | 5.0 |
(1) | We have relied upon the information provided by BlackRock, Inc. in a Schedule 13G/A reporting information as of December 31, 2013. The Schedule 13G/A was filed by BlackRock, Inc. in its capacity as a parent holding company or control person and indicates that BlackRock, Inc. has sole investment power over 2,492,464 shares and sole voting power over 2,407,574 shares. BlackRock Fund Advisors, a subsidiary of BlackRock, Inc., beneficially owns 5% or greater of the outstanding shares of the security class reported on the Schedule 13G/A. The address for BlackRock, Inc. is 40 East 52nd Street, New York, NY 10022. |
(2) | We have relied upon the information provided by Franklin Resources, Inc. (FRI), Charles B. Johnson, Rupert H. Johnson, Jr. and Franklin Advisory Services, LLC, an investment advisor (Franklin), in a jointly filed Schedule 13G/A reporting information as of December 31, 2013. Direct or indirect subsidiaries of FRI serve as investment managers of one or more open-end or |
6
closed-end investment companies or other managed accounts that hold the shares of our common stock in the ordinary course of business. In their capacity as investment managers, the subsidiaries of Franklin exercise sole investment discretion over the securities covered by an investment management agreement. Franklin Advisory Services, LLC has sole investment power over 2,294,880 shares and sole voting power over 2,146,280 shares, in the aggregate, held as of December 31, 2013. Charles B. Johnson and Rupert H. Johnson, Jr., each of whom owns in excess of 10% of the outstanding common stock of FRI, may be deemed to be the beneficial owners of securities held by entities advised by FRI subsidiaries. Franklin, FRI subsidiaries, Charles B. Johnson and Rupert H. Johnson, Jr. each disclaim beneficial ownership of the shares of our common stock. The filing persons and each of the investment management subsidiaries believe that they are not a group within the meaning of Rule 13d-5 of the Securities Exchange Act of 1934 (the Exchange Act). The address for FRI is One Franklin Parkway, San Mateo, CA 94403.
(3) | We have relied upon the information provided by The Vanguard Group, Inc., an investment advisor (Vanguard), in a Schedule 13G/A reporting information as of December 31, 2013. Of the shares reported, Vanguard has sole investment power over 1,837,118 shares, shared investment power over 42,254 shares, and sole voting power over 44,554 shares. Vanguard Fiduciary Trust Company, a wholly owned subsidiary of Vanguard, serving as an investment manager of collective trust accounts, is the beneficial owner of 42,254 shares and Vanguard Investments Australia, Ltd., a wholly owned subsidiary of Vanguard, serving as investment manager of Australian investment offerings, is the beneficial owner of 2,300 shares. The address for Vanguard is 100 Vanguard Boulevard, Malvern, PA 19355. |
(4) | We have relied upon the information provided by Westwood Management Corp., an investment advisor (Westwood), in a Schedule 13G reporting information as of December 31, 2013. Of the shares reported, Westwood has sole investment power over 1,538,187 shares, sole voting power over 1,360,246 shares and shared voting power over 33,361 shares. The address for Westwood is 200 Crescent Court, Suite 1200, Dallas, TX 75201. |
(5) | We have relied upon the information provided by Dimensional Fund Advisors LP, an investment advisor (Dimensional Advisors), in a Schedule 13G/A reporting information as of December 31, 2013. Dimensional Advisors furnishes investment advice to four investment companies and serves as investment manager to certain commingled group trusts and separate accounts (such investment companies, trusts and accounts are collectively referred to as the Funds). Subsidiaries of Dimensional Advisors may act as advisor or sub-advisor to certain Funds. All of the 1,445,851 shares listed are owned by the Funds. The Funds exercise sole investment power over 1,445,851 shares and sole voting power over 1,411,175 shares. The Funds also have the right to receive, or power to direct the receipt of dividends from, or the proceeds from the sale of the securities held in their respective accounts. In its role as investment advisor, sub-advisor and/or manager, Dimensional Advisors and its subsidiaries may be deemed to be beneficial owners of the shares; however, Dimensional Advisors and its subsidiaries disclaim beneficial ownership of such shares. The address for Dimensional Advisors is Palisades West, Building One, 6300 Bee Cave Road, Austin, TX 78746. |
7
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table sets forth the number of shares of our common stock beneficially owned as of May 2, 2014, the record date for our 2014 Annual Meeting of Shareholders, by each of our directors, each of our executive officers named in the Summary Compensation Table (our Named Executive Officers) and by all of our directors and executive officers as a group.
Amount and Nature of Beneficial Ownership
Name of Beneficial Owner |
Shares of Common Stock Held (#)(1)(2) |
Shares Underlying Options Exercisable Within 60 Days (#)(3) |
Total Beneficial Ownership (#) |
%
of Common Stock Outstanding |
Phantom Stock (#)(4) |
Total Stock- | ||||||||||||||
Non-Employee Directors |
||||||||||||||||||||
Bernard P. Aldrich |
24,958 | 31,257 | 56,215 | * | 46,447 | 102,662 | ||||||||||||||
Jerome L. Davis |
19,569 | 21,946 | 41,515 | * | 33,011 | 74,526 | ||||||||||||||
Sara L. Hays |
21,669 | 16,072 | 37,741 | * | 20,881 | 58,622 | ||||||||||||||
John T. Manning |
30,937 | (6) | | 30,937 | * | | 30,937 | |||||||||||||
Robert J. Marzec |
25,291 | 25,383 | 50,674 | * | 10,748 | 61,422 | ||||||||||||||
Stephen C. Mitchell(7) |
7,933 | | 7,933 | * | | 7,933 | ||||||||||||||
Donald A. Nolan |
3,122 | | 3,122 | * | 1,494 | 4,616 | ||||||||||||||
Richard V. Reynolds |
23,958 | 10,000 | 33,958 | * | 23,800 | 57,758 | ||||||||||||||
David E. Weiss |
22,525 | 25,383 | 47,908 | * | | 47,908 | ||||||||||||||
Named Executive Officers |
||||||||||||||||||||
Joseph F. Puishys |
272,287 | 300,341 | 572,628 | 1.9 | | 572,628 | ||||||||||||||
James S. Porter |
134,868 | | 134,868 | * | | 134,868 | ||||||||||||||
Patricia A. Beithon |
188,729 | | 188,729 | * | | 188,729 | ||||||||||||||
John A. Klein |
15,255 | | 15,255 | * | | 15,255 | ||||||||||||||
Gary R. Johnson |
54,208 | | 54,208 | * | | 54,208 | ||||||||||||||
All directors and executive officers as a group (14 persons) |
845,309 | 430,382 | 1,275,691 | 4.3 | 136,381 | 1,412,072 |
* | Indicates less than 1%. |
(1) | Unless otherwise indicated, the individuals listed in the table have sole voting and investment power with respect to the shares owned by them, and such shares are not subject to any pledge. For our non-employee directors, the number indicated includes shares of restricted stock issued to the named individual pursuant to our 2009 Non-Employee Director Stock Incentive Plan, as amended (2011) (the Director Stock Plan). For our executive officers, the number of shares indicated includes shares issued to the named individual pursuant to our 2009 Stock Incentive Plan, as amended (2011) (the Stock Incentive Plan), our employee stock purchase plan and our 401(k) retirement plan. |
(2) | Includes the following shares of restricted stock issued pursuant to our Director Stock Plan: 7,933 shares for each of Messrs. Aldrich, Davis, Manning, Marzec, Mitchell, Reynolds and Weiss and Ms. Hays; 3,122 shares for Mr. Nolan; and 66,586 shares for all executive officers and directors as a group. All shares of restricted stock held pursuant to our Director Stock Plan are subject to future vesting conditions and holders of such shares have no investment power over such shares. |
8
Includes the following shares issued to our Named Executive Officers pursuant to our Stock Incentive Plan:
Named Executive Officers |
Shares of Restricted Stock | ||||
Joseph F. Puishys |
145,386 | ||||
James S. Porter |
15,185 | ||||
Patricia A. Beithon |
11,987 | ||||
John A. Klein |
5,933 | ||||
Gary R. Johnson |
4,406 | ||||
All directors and executive officers as a group (14 persons) |
182,897 |
All shares of restricted stock held pursuant to our Stock Incentive Plan are subject to future vesting conditions and the holders of such shares have no investment power over such shares.
(3) | Includes shares underlying stock options exercisable currently or within 60 days of May 2, 2014. |
(4) | Includes phantom stock units, each representing the value of one share of our common stock, that are attributable to accounts in our Deferred Compensation Plan for Non-Employee Directors (Director Deferred Compensation Plan), which is described under the heading Director Deferred Compensation Plan on page 22. |
(5) | The amounts in this column are derived by adding the amounts in the Total Beneficial Ownership and the Phantom Stock columns of the table. |
(6) | Includes 1,000 shares held by Mr. Mannings wife. |
(7) | Mr. Mitchell will retire from our Board effective as of our 2014 Annual Meeting of Shareholders. |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
9
PROPOSAL 1: ELECTION OF DIRECTORS
10
11
12
13
14
15
16
17
Board Committee Membership, Meetings and Responsibilities
We currently have three standing Board committees: Audit, Compensation, and Nominating and Corporate Governance. Each of those Committees consists entirely of independent, non-employee directors. On June 26, 2013, we disbanded our Strategy and Enterprise Risk Committee, with the full Board assuming oversight for strategy and enterprise risk. Each Committee operates under a written charter which is available on our website at www.apog.com (Corporate Governance).
The table below provides fiscal 2014 membership and meeting information for each of our standing Board committees.
Name |
Audit Committee |
Compensation Committee |
Nominating and Corporate Governance Committee |
Strategy and Enterprise Risk Committee(1) | ||||||||||||||||
Bernard P. Aldrich(2) |
||||||||||||||||||||
Jerome L. Davis |
M | M | ||||||||||||||||||
Sara L. Hays |
M | (3) | C | (4) | M | (3) | ||||||||||||||
John T. Manning |
M | M | (4) | C | (3) | |||||||||||||||
Robert J. Marzec |
C | M | (3) | |||||||||||||||||
Stephen C. Mitchell |
M | C/M | (5) | |||||||||||||||||
Donald A. Nolan |
M | (4) | ||||||||||||||||||
Joseph F. Puishys |
M | (3) | ||||||||||||||||||
Richard V. Reynolds |
M | M | (4) | M | (3) | |||||||||||||||
David E. Weiss |
C | M | (3) | |||||||||||||||||
Fiscal 2014 Meetings |
9 | 7 | 4 | 1 | ||||||||||||||||
Fiscal 2014 Executive Sessions |
5 | 5 | 3 | 1 |
C = Committee Chair M = Committee Member
(1) | Our Strategy and Enterprise Risk Committee disbanded on June 26, 2013. |
(2) | Mr. Aldrich serves as Non-Executive Chair of our Board. |
(3) | Through June 26, 2013. |
(4) | Since June 26, 2013. |
(5) | Mr. Mitchell served as Chair of our Nominating and Corporate Governance Committee through June 26, 2013 and continued to serve as a member of such Committee after such date. |
18
The primary functions of each of our current Board Committees are described below.
Board Committee |
Responsibilities | |
AUDIT COMMITTEE
All Members Independent
This Committee has oversight responsibilities for our independent registered public accounting firm.
Each member meets the independence and experience requirements of the NASDAQ listing standards and the SEC.
John T. Manning and Robert J. Marzec are each audit committee financial experts under the rules of the SEC. |
Directly responsible for the appointment, compensation, retention and oversight of the work of the firm that serves as the independent accountants to audit our financial statements.
Oversees our system of financial controls and internal audit procedures.
Oversees our program to ensure compliance with legal and regulatory requirements and ethical business practices.
Assesses and establishes policies and procedures to manage our financial reporting and internal control risk.
Establishes policies and procedures for the pre-approval of all services by our independent registered public accounting firm.
Oversees our internal audit function.
Establishes procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters.
Considers the accountants independence.
| |
COMPENSATION COMMITTEE
All Members Independent
This Committee administers our executive compensation program.
Each member is a non-employee director, as defined in the Exchange Act, and is an outside director as defined in Section 162(m) of the Internal Revenue Code.
|
Establishes our executive compensation philosophy and compensation programs that comply with this philosophy.
Determines the compensation of our executive officers and other members of senior management.
Administers our stock incentive plans in which our employees participate.
Administers our annual cash and long-term incentive plans for executive officers and other members of senior management.
Reviews its decisions on compensation for our Chief Executive Officer with the full Board of Directors prior to communicating those decisions to our Chief Executive Officer. | |
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
All Members Independent
This Committee identifies and evaluates Board candidates and oversees our corporate governance practices. |
Establishes and implements procedures to review the qualifications for membership on our Board of Directors, including nominees recommended by shareholders.
Assesses our compliance with our Corporate Governance Guidelines.
Reviews our organizational structure and succession plans.
Makes recommendations to our Board of Directors regarding the composition and responsibilities of our Board committees and compensation for directors.
Conducts an annual performance review of our Board committees and Board of Directors as a whole and our directors whose terms are expiring at that years annual meeting of shareholders.
Conducts an annual review of the performance of our Chief Executive Officer, which includes soliciting assessments from all non-employee directors.
|
19
20
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
NON-EMPLOYEE DIRECTOR COMPENSATION
21
The following table describes the compensation arrangements with our non-employee directors for fiscal 2014.
Compensation |
Fiscal 2014 | |
Annual Cash Retainers: |
||
Non-Executive Chair of the Board(1) (2) |
$110,000 | |
Board Member(2) |
50,000 | |
Audit Committee Chair |
30,000 | |
Audit Committee Member |
15,000 | |
Compensation Committee Chair |
20,000 | |
Compensation Committee Member |
10,000 | |
Nominating and Corporate Governance Committee Chair |
20,000 | |
Nominating and Corporate Governance Committee Member |
10,000 | |
Strategy and Enterprise Risk Committee Chair(3) |
20,000 | |
Strategy and Enterprise Risk Committee Member(3) |
10,000 | |
Equity Grant |
A time-based restricted stock award of 3,122 shares that vests over three years. | |
Charitable Matching Contributions Program for Non-Employee Directors |
$2,000 maximum aggregate annual match. |
(1) | We pay an annual cash retainer to our Non-Executive Chair of the Board and do not pay any other cash compensation to him for service on our Board of Directors. |
(2) | Our Board of Directors increased the annual retainers for the Non-Executive Chair by $10,000 to $110,000 and for Board members by $10,000 to $50,000 effective as of July 1, 2013. |
(3) | On June 26, 2013, our Strategy and Enterprise Risk Committee was disbanded and the cash retainers were paid only for that portion of the year the Committee was in existence. |
22
Fiscal 2014 Non-Employee Director Compensation Table
The following table shows the compensation paid to our non-employee directors for fiscal 2014.
Name |
Fees Earned or Paid in Cash ($)(1) |
Stock Awards ($)(2) |
All Other Compensation ($)(3) |
Total ($) | ||||
Bernard P. Aldrich |
106,667(4) | 74,990 | 22,554 | 204,211 | ||||
Jerome L. Davis |
66,667 | 74,990 | 17,494 | 159,151 | ||||
Sara L. Hays |
68,333 | 74,990 | 13,163 | 156,486 | ||||
John T. Manning |
75,000 | 74,990 | 5,492 | 155,482 | ||||
Robert J. Marzec |
80,000 | 74,990 | 9,440 | 164,430 | ||||
Stephen C. Mitchell |
70,000 | 74,990 | 5,492 | 150,482 | ||||
Donald A. Nolan(5) |
43,333 | 74,990 | 1,024 | 119,347 | ||||
Richard V. Reynolds |
71,667 | 74,990 | 14,235 | 160,892 | ||||
David E. Weiss |
70,000 | 74,990 | 5,492 | 150,482 |
(1) | Includes cash retainers deferred by non-employee directors under our Director Deferred Compensation Plan, as further described under the heading Director Deferred Compensation Plan on page 22. During fiscal 2014, Messrs. Davis and Nolan were our only non-employee directors to make deferrals of their annual cash retainers pursuant to our Director Deferred Compensation Plan, deferring $16,667 and $32,500, respectively, of their fiscal 2014 retainers. |
(2) | The amounts in this column are calculated based on the fair market value of our common stock on the date the award was made in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (FASB ASC Topic 718). Each non-employee director received a time-based restricted stock award of 3,122 shares on June 26, 2013. The closing price of our common stock on the NASDAQ Global Select Market on June 26, 2013, the date of grant, was $24.02. The table below sets forth certain information with respect to the aggregate number of shares of unvested restricted stock and vested options to purchase shares of our common stock held by our non-employee directors as of March 1, 2014, the end of fiscal 2014. Our non-employee directors did not hold any unvested stock options as of March 1, 2014. |
Name |
Aggregate Number of Shares of Restricted Stock (#) |
Aggregate Number of Stock Options (#) | ||
Bernard P. Aldrich |
7,933 | 31,257 | ||
Jerome L. Davis |
7,933 | 21,946 | ||
Sara L. Hays |
7,933 | 16,072 | ||
John T. Manning |
7,933 | | ||
Robert J. Marzec |
7,933 | 25,383 | ||
Stephen C. Mitchell |
7,933 | | ||
Donald A. Nolan |
3,122 | | ||
Richard V. Reynolds |
7,933 | 10,000 | ||
David E. Weiss |
7,933 | 25,383 |
23
(3) | This column includes the dividend equivalents paid on phantom stock units pursuant to our Director Deferred Compensation Plan, dividends paid on shares of restricted stock issued pursuant to our Director Stock Plan and matching contributions pursuant to our Charitable Matching Contributions Program for Non-Employee Directors. The table below sets forth the amounts contributed or paid by the Company for our non-employee directors pursuant to such plans with respect to fiscal 2014. |
Name |
Dividend Equivalents Paid on Phantom Stock Units Held in our Director Deferred Compensation Plan ($) |
Dividends Paid on Shares of Restricted Stock Issued Pursuant to our Director Stock Plan ($) |
Matching Contributions under our Charitable Matching Contributions Program for Non-Employee Directors ($) |
Total All Other Compensation ($) | ||||||||||||||||
Bernard P. Aldrich |
17,062 | 3,492 | 2,000 | 22,554 | ||||||||||||||||
Jerome L. Davis |
12,002 | 3,492 | 2,000 | 17,494 | ||||||||||||||||
Sara L. Hays |
7,671 | 3,492 | 2,000 | 13,163 | ||||||||||||||||
John T. Manning |
| 3,492 | 2,000 | 5,492 | ||||||||||||||||
Robert J. Marzec |
3,948 | 3,492 | 2,000 | 9,440 | ||||||||||||||||
Stephen C. Mitchell |
| 3,492 | 2,000 | 5,492 | ||||||||||||||||
Donald A. Nolan |
150 | 874 | | 1,024 | ||||||||||||||||
Richard V. Reynolds |
8,743 | 3,492 | 2,000 | 14,235 | ||||||||||||||||
David E. Weiss |
| 3,492 | 2,000 | 5,492 |
(4) | We increased the annual retainer for service as our Non-Executive Chair by $10,000 on July 1, 2014, the fifth month in fiscal 2014. |
(5) | Mr. Nolan joined our Board of Directors on June 26, 2013. |
24
25
26
Executive Compensation Philosophy and Practices. Our compensation programs are designed to attract, motivate and retain executive talent to achieve long-term success of our Company; pay for sustainable performance in an ever-changing environment; and align the interests of our executive officers with our shareholders. We continue to refine our executive compensation program to reflect evolving executive compensation practices. The table on page 28 highlights our current executive compensation practices.
27
Our Executive Compensation Practices: (What We Do)
|
See Page
|
Executive Compensation Practices We Have Not Implemented or Have Discontinued: (What We Dont Do)
|
See Page
| |||
We tie pay to performance. A significant percentage of both short-term compensation and long-term compensation is performance-based.
We review tally sheets and realizable pay and performance for our executives and use that information as a factor in making compensation decisions.
|
29
32 |
We do not have employment contracts for our Named Executive Officers, except for a transitional employment agreement with Mr. Puishys, who joined our Company on August 22, 2011 as our Chief Executive Officer and President, which expires on August 22, 2014. |
42 | |||
We mitigate undue compensation risk, including utilizing caps on potential payments; multiple financial performance metrics; different metrics for our annual cash incentives and long-term performance awards; as well as robust Board and Board Committee processes to identify risk.
|
44 |
We do not believe any of our Companys compensation programs create risks that are reasonably likely to have a material adverse effect on our Company. |
44 | |||
We have change-in-control severance agreements with all of our Named Executive Officers that provide benefits only upon a double trigger. |
43 |
We do not provide for excise tax gross-ups or single triggers in our change-in-control severance agreements. |
43 | |||
Our equity award agreements for grants made pursuant to our Stock Incentive Plan have double trigger change-in-control provisions for all employees.
|
56 |
|||||
We provide minimal perquisites to our executives. |
46-47 |
We do not provide tax reimbursement or tax gross-ups on any perquisites.
We do not provide automobile allowances to or pay for club memberships for our Named Executive Officers.
We do not have any Company-owned or leased aircraft.
|
46-47 | |||
We have adopted stringent share ownership guidelines, and we review compliance annually.
We evaluate share utilization by annually reviewing overhang and annual burn rates.
|
43
33 |
We do not reprice underwater stock options or stock appreciation rights. |
||||
The Committee benefits from its utilization of a compensation consulting firm that fully meets the stringent independence requirements under the final rules of the Dodd-Frank Act. |
32 |
The Committees compensation consulting firm does not provide any other services to our Company other than those requested by our Compensation Committee for executive compensation and our Nominating and Corporate Governance Committee with respect to director compensation.
|
32 | |||
We have a clawback policy that applies to our Named Executive Officers and certain other executives.
We have a formal hedging policy that prohibits all employees and directors from engaging in hedging transactions in our Companys securities.
|
44
43 |
The Committees independent compensation consulting firm does not provide any specific recommendations for compensation for our Named Executive Officers. |
32 |
28
Target Compensation Mix. The charts below illustrate the short-term and long-term mix, and fixed and performance-based mix of the primary compensation elements at target used by the Committee as a guideline in making compensation awards for our Named Executive Officers.
Target Compensation Mix
(1) | Our two-year cash-based performance awards are on end-to-end performance cycles and are granted every other year. We have included the annualized (50%) value of such awards at target in the charts. Our two-year cash-based performance awards are granted at the beginning of the first year of the two-year performance cycle and are a component of long-term compensation for both years in the performance cycle. |
29
30
Overview of Primary Compensation Elements
The table below provides an overview of the three primary compensation elements used in our executive compensation program.
Compensation |
Objective |
How Determined |
Market Positioning(1) |
How Impacted by | ||||
Base Salary | Attract and retain executives by offering pay programs that are competitive with the market. | Annual subjective assessment of executive leadership and individual performance, experience, tenure, competitive market data, internal equity among positions with similar responsibilities, and executive potential. | Targeted to be around the 50th percentile relative to competitive market practices. | Based on individual performance. | ||||
Annual Cash Incentive Compensation |
Create an incentive for achievement of pre-defined annual Company performance results. | For target bonus award opportunity percentages competitive market data and trends and internal equity among positions with similar responsibilities.
For actual bonus payouts performance against pre-established criteria in our annual cash incentive plan. |
Target level performance results in target total cash compensation (base salary plus annual cash incentive compensation) that is generally slightly below the 50th percentile.
Above target performance results in maximum total cash compensation that is generally slightly above the 50th percentile.
Below target performance results in threshold total cash compensation that is generally at or below the 25th percentile. |
Payout dependent on achievement of one-year Company financial performance goals. | ||||
Long-Term Incentive Compensation:
Time-Based Restricted Stock and
Cash-Based Performance Awards |
Align the interests of executives with shareholders and to focus on long-term sustained performance.
Create appropriate retention incentives. |
Company performance, annual subjective assessment of achievement of individual business objectives, market data and trends, internal equity among positions with similar responsibilities and executive potential. | Targeted generally to be at or slightly above the 50th percentile for target performance and up to the 75th percentile for maximum performance. | Increase in our common stock price increases the value of the time-based restricted stock awards.
Payout of cash-based performance awards is dependent on achievement of two-year Company financial performance goals. |
(1) | Actual pay levels may be above or below the targeted level depending on all of the factors outlined in the How Determined column of the table. |
31
Compensation Process
32
33
34
Below is information on the base salaries of our Named Executive Officers for fiscal 2014 and fiscal 2015.
Base Salary | ||||||||||||
Name |
Fiscal 2014 Base Salary ($) |
Percent Increase in Fiscal 2014 (%) |
Percentile in the Fiscal 2014 Competitive Market (%) |
Fiscal 2015 Base Salary ($) |
Percent Increase in Fiscal 2015 (%) |
Percentile in the Fiscal 2015 Competitive Market (%) | ||||||
Joseph F. Puishys |
670,000 | 6.3 | 45 | 770,000 | 14.9 | 55 | ||||||
James S. Porter |
384,375 | 2.5 | 60 | 395,000 | 2.8 | 60 | ||||||
Patricia A. Beithon |
301,400 | 2.5 | 35 | 315,000 | 4.5 | 35 | ||||||
John A. Klein |
246,000 | 2.5 | 40 | 255,000 | 3.7 | 30 | ||||||
Gary R. Johnson |
210,545 | 3.0 | 50 | 215,810 | 2.5 | 40 |
35
Fiscal 2014 Annual Cash Incentive Payouts. The performance factor used to establish the fiscal 2014 bonus pool under our Executive MIP was 7% of Apogee operating income. In fiscal 2014, we had operating income of $40,285,000, generating a bonus pool of $2,820,000. The performance goals used for fiscal 2014 awards for annual cash incentive awards made pursuant to our Executive MIP for our Named Executive Officers were a combination of Apogee net sales, earnings per share (EPS), and days working capital.
The tables below set forth certain information with respect to the fiscal 2014 annual cash incentive award payout ranges as a percentage of fiscal 2014 salary for our Named Executive Officers.
Fiscal 2014 Annual Cash Incentive Compensation Ranges
Name |
Threshold Payout as a Percentage of Fiscal 2014 Salary (%)(1) |
Target Payout as a Percentage of Fiscal 2014 Salary (%)(2) |
Maximum Payout as a Percentage of Fiscal 2014 Salary (%)(3) | |||
Joseph F. Puishys |
5.00 | 100.00 | 200.00 | |||
James S. Porter |
3.00 | 60.00 | 120.00 | |||
Patricia A. Beithon |
2.50 | 50.00 | 100.00 | |||
John A. Klein |
2.00 | 40.00 | 80.00 | |||
Gary R. Johnson |
1.25 | 25.00 | 50.00 |
(1) | Assumes threshold performance level is achieved for only the performance goal with the lowest weighting and is not achieved for any other performance goals. If actual results are below threshold performance level for all performance goals, the payout will be zero. |
(2) | Assumes target performance level is achieved for all performance goals. |
(3) | Assumes maximum performance level is achieved for all performance goals. |
The following table outlines the performance metrics, weighting and performance levels and actual performance achievement for the fiscal 2014 performance cycle.
Fiscal 2014 Annual Cash Incentive Performance Levels
Performance Goal |
Weighting (%) | Threshold | Target | Maximum | Actual Performance | |||||
Net Sales | 25 | $733,000,000 | $761,000,000 | $781,000,000 | $771,445,000 | |||||
EPS | 65 | $0.75 | $0.90 | $1.05 | $0.95 | |||||
Days Working Capital | 10 | 45.9 days | 43.0 days | 39.3 days | 47.8 days |
36
The following table sets forth certain information with respect to the fiscal 2014 annual cash incentive compensation payouts for each of our Named Executive Officers.
Fiscal 2014 Annual Cash Incentive Compensation Payouts
Performance Metrics |
Potential Payout | Actual Payout | ||||||||||||||||||||||
Name |
Metric |
Weighting (%) |
Target Payout as a Percent of Fiscal 2014 Salary (%) |
Target Payout Level ($) |
Percentage of Target (%) |
Approved Payout Amount ($)(1) |
Percent of | |||||||||||||||||
Joseph |
Net Sales |
25 | 25.00 | 167,500 | 38.06 | 255,002 | 38.06 | |||||||||||||||||
F. |
EPS |
65 | 65.00 | 435,500 | 86.67 | 580,689 | 86.67 | |||||||||||||||||
Puishys |
Days Working Capital |
10 | 10.00 | 67,000 | | | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
100 | 100.00 | 670,000 | 124.73 | 835,691 | 124.73 | |||||||||||||||||||
James |
Net Sales |
25 | 15.00 | 57,656 | 38.06 | 87,791 | 22.84 | |||||||||||||||||
S. |
EPS |
65 | 39.00 | 149,906 | 86.67 | 199,875 | 52.00 | |||||||||||||||||
Porter |
Days Working Capital |
10 | 6.00 | 23,063 | | | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
100 | 60.00 | 230,625 | 124.73 | 287,666 | 74.84 | |||||||||||||||||||
Patricia |
Net Sales |
25 | 12.50 | 37,675 | 38.06 | 57,356 | 19.03 | |||||||||||||||||
A. |
EPS |
65 | 32.50 | 97,955 | 86.67 | 130,627 | 43.34 | |||||||||||||||||
Beithon |
Days Working Capital |
10 | 5.00 | 15,070 | | | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
100 | 50.00 | 150,700 | 124.73 | 187,983 | 62.37 | |||||||||||||||||||
John |
Net Sales |
25 | 10.00 | 24,600 | 38.06 | 37,441 | 15.22 | |||||||||||||||||
A. |
EPS |
65 | 26.00 | 63,960 | 86.67 | 85,288 | 34.67 | |||||||||||||||||
Klein |
Days Working Capital |
10 | 4.00 | 9,840 | | | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
100 | 40.00 | 98,400 | 124.73 | 122,729 | 49.89 | |||||||||||||||||||
Gary |
Net Sales |
25 | 6.25 | 13,159 | 38.06 | 20,023 | 9.51 | |||||||||||||||||
R. |
EPS |
65 | 16.25 | 34,213 | 86.67 | 45,625 | 21.67 | |||||||||||||||||
Johnson |
Days Working Capital |
10 | 2.50 | 5,264 | | | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
100 | 25.00 | 52,636 | 124.73 | 65,648 | 31.18 |
(1) | The individual approved payout amount for each of our Named Executive Officers is less than the maximum allocation of the bonus pool under our Executive MIP for such individual. Therefore, all approved payout amounts for our Named Executive Officers are fully deductible under Section 162(m) of the U.S. Internal Revenue Code of 1986. |
37
Fiscal 2014 Restricted Stock Awards
Name |
Time-Based Restricted Stock Awarded (#) |
Value of Award ($)(1) |
Percentage of Fiscal 2014 Salary (%) |
Grant Price ($) | ||||
Joseph F. Puishys(2) |
21,036 | 535,997 | 80 | 25.48 | ||||
James S. Porter(3) |
7,241 | 184,501 | 48 | 25.48 | ||||
Patricia A. Beithon(4) |
5,678 | 144,675 | 48 | 25.48 | ||||
John A. Klein(5) |
2,896 | 73,790 | 30 | 25.48 | ||||
Gary R. Johnson(6) |
1,818 | 46,323 | 22 | 25.48 |
(1) | The value of the award was calculated by multiplying the number of shares of restricted stock by $25.48, the closing price of our common stock on the NASDAQ Global Select Market on April 30, 2013, the date of grant. |
(2) | Mr. Puishys individual business objectives for fiscal 2013 were based on: financial performance, geographic expansion, intellectual property strategy, organizational development and new product introductions. |
(3) | Mr. Porters individual business objectives for fiscal 2013 were based on financial and operational performance, geographic expansion, organizational development, execution of our company-wide enterprise resource planning system implementation, and strategy and business development. |
(4) | Ms. Beithons individual business objectives for fiscal 2013 were based on compliance, corporate governance, litigation and claim management, and support for growth initiatives. |
(5) | Mr. Kleins individual business objectives for fiscal 2013 were based on cost productivity savings, continuous improvement and Lean manufacturing training and implementation initiatives, procurement practices and organizational development. |
(6) | Mr. Johnsons individual business objectives for fiscal 2013 were based on treasury management, enterprise risk management, credit facility management, real estate portfolio management and retirement plan management. |
38
Two-Year Cash-Based Performance Awards and Payout Cycle
The table below sets forth certain information with respect to our fiscal 2013 2014 cash-based performance awards payout ranges as a percentage of salary at threshold, target and maximum performance.
Fiscal 2013 2014 Cash-Based Performance Award Payout Ranges
Name |
Threshold Payout as a Percentage of Fiscal 2013 Salary (%)(1) |
Target Payout as a Percentage of Fiscal 2013 Salary (%)(2) |
Maximum Payout as a Percentage of Fiscal 2013 Salary (%)(3) | |||
Joseph F. Puishys |
31.75 | 190.48 | 380.95 | |||
James S. Porter |
24.00 | 144.00 | 288.00 | |||
Patricia A. Beithon |
24.00 | 144.00 | 288.00 | |||
John A. Klein |
15.00 | 90.00 | 180.00 | |||
Gary R. Johnson |
11.00 | 66.00 | 132.00 |
(1) | Assumes threshold performance level is achieved for only one of the performance goals and is not achieved for any other performance goals. If actual results are below threshold performance level for all performance goals, the payout will be zero. |
(2) | Assumes target performance level is achieved for all performance goals. |
(3) | Assumes maximum performance level is achieved for all performance goals |
39
Fiscal 2013 2014 Cash-Based Performance Award Payouts. The performance goals for our fiscal 2013 2014 cash-based performance awards made pursuant to our Stock Incentive Plan were average return on invested capital (ROIC), cumulative EPS and cumulative net sales.
The table below outlines, with respect to our fiscal 2013 2014 cash-based performance awards, the performance metrics, weightings, performance levels and actual performance achievement for the fiscal 2013 2014 performance cycle.
Fiscal 2013 2014 Cash-Based Performance Award Payout Metrics and Payout Percentages
Performance Metric |
Weight (%) |
Threshold (50%) |
Target (100%) |
Maximum (200%) |
Actual Performance |
Percentage Earned (%) |
Percentage Payout (%) | ||||||||||||||||||||||||||||
Average ROIC |
33-1/3 | 3.50 | % | 5.80 | % | 7.30 | % | 6.00 | % | 113.33 | 37.78 | ||||||||||||||||||||||||
Cumulative EPS |
33-1/3 | $0.93 | $1.55 | $1.95 | $1.62 | 117.50 | 39.17 | ||||||||||||||||||||||||||||
Cumulative Net Sales |
33-1/3 | $1,366,400,000 | $1,465,300,000 | $1,567,000,000 | $1,471,669,000 | 106.19 | 35.39 | ||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||
112.34 | |||||||||||||||||||||||||||||||||||
|
|
The table below sets forth certain information with respect to the fiscal 2013 2014 cash-based performance award payouts earned for each of our Named Executive Officers.
Fiscal 2013 2014 Cash-Based Performance Award Payouts
Performance Metrics | Potential Payout | Actual Amount Earned | ||||||||||||||||||||||
Name |
Metric | Weighting (%) |
Target Payout as a Percent of Fiscal 2013 Salary (%) |
Target Payout Level ($) |
Percentage of Target (%) |
Total Earned Amount ($)(1) |
Percent of Fiscal 2013 Salary (%) | |||||||||||||||||
Joseph |
Average ROIC | 33-1/3 | 63.5 | 400,000 | 113.33 | 453,320 | 71.96 | |||||||||||||||||
F. |
Cumulative EPS |
33-1/3 | 63.5 | 400,000 | 117.50 | 470,000 | 74.60 | |||||||||||||||||
Puishys |
Cumulative Net Sales |
33-1/3 | 63.5 | 400,000 | 106.19 | 424,760 | 67.42 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
100 | 190.5 | 1,200,000 | 112.34 | 1,348,080 | 213.98 | |||||||||||||||||||
James |
Average ROIC |
33-1/3 | 48.0 | 180,000 | 113.33 | 203,994 | 54.40 | |||||||||||||||||
S. |
Cumulative EPS |
33-1/3 | 48.0 | 180,000 | 117.50 | 211,500 | 56.40 | |||||||||||||||||
Porter |
Cumulative Net Sales |
33-1/3 | 48.0 | 180,000 | 106.19 | 191,142 | 50.97 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
100 | 144.0 | 540,000 | 112.34 | 606,636 | 161.77 | |||||||||||||||||||
Patricia |
Average ROIC |
33-1/3 | 48.0 | 141,120 | 113.33 | 159,931 | 54.40 | |||||||||||||||||
A. |
Cumulative EPS |
33-1/3 | 48.0 | 141,120 | 117.50 | 165,816 | 56.40 | |||||||||||||||||
Beithon |
Cumulative Net Sales |
33-1/3 | 48.0 | 141,120 | 106.19 | 149,856 | 50.97 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
100 | 144.0 | 423,360 | 112.34 | 475,603 | 161.77 | |||||||||||||||||||
John |
Average ROIC |
33-1/3 | 30.0 | 72,000 | 113.33 | 81,597 | 34.00 | |||||||||||||||||
A. |
Cumulative EPS |
33-1/3 | 30.0 | 72,000 | 117.50 | 84,600 | 35.25 | |||||||||||||||||
Klein |
Cumulative Net Sales |
33-1/3 | 30.0 | 72,000 | 106.19 | 76,457 | 31.86 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
100 | 90.0 | 216,000 | 112.34 | 242,654 | 101.11 | |||||||||||||||||||
Gary |
Average ROIC |
33-1/3 | 22.0 | 44,971 | 113.33 | 50,965 | 24.93 | |||||||||||||||||
R. |
Cumulative EPS |
33-1/3 | 22.0 | 44,971 | 117.50 | 52,841 | 25.85 | |||||||||||||||||
Johnson |
Cumulative Net Sales |
33-1/3 | 22.0 | 44,971 | 106.19 | 47,755 | 23.36 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
100 | 66.0 | 134,913 | 112.34 | 151,561 | 74.14 |
(1) | The fiscal 2013 2014 cash-based performance award earned amounts are paid out in two equal annual installments. The first installment will be paid in May 2014 and the second installment will be paid in March 2015, contingent on the executive being employed by our Company on the date the second installment is paid. The table below sets forth the fiscal 2013 2014 cash-based performance award earned amounts payment schedule. |
Name |
May 2014 ($) | March 2015 ($) | ||
Joseph F. Puishys |
674,040 | 674,040 | ||
James S. Porter |
303,318 | 303,318 | ||
Patricia A. Beithon |
237,802 | 237,801 | ||
John A. Klein |
121,327 | 121,327 | ||
Gary R. Johnson |
75,781 | 75,780 |
40
The threshold, target and maximum goals and the payout of the fiscal 2012 2014 performance share unit awards are set forth in the tables below.
Fiscal 2012 2014 Performance Share Unit Award Payout Metrics and Payout Percentages
Performance Metric |
Weight (%) |
Threshold (50%) |
Target (100%) |
Maximum (200%) |
Actual Performance |
Percentage Earned (%) |
Percentage (%) | |||||||||||||||||||
Average ROIC |
33-1/3 | 2.90% | 4.10% | 5.30% | 4.20% | 108.33 | 36.11 | |||||||||||||||||||
Cumulative EPS |
33-1/3 | $1.08 | $1.65 | $2.20 | $1.79 | 125.45 | 41.81 | |||||||||||||||||||
Market Share Growth(1) (33-1/3%) |
||||||||||||||||||||||||||
Architectural Segments |
28-1/3 | 10.90% | 13.90% | 16.90% | 36.10% | 200.00 | 56.67 | |||||||||||||||||||
Large-Scale Optical Segment |
5 | 20.00% | 30.00% | 35.00% | 7.60% | | | |||||||||||||||||||
| ||||||||||||||||||||||||||
134.59 | ||||||||||||||||||||||||||
|
(1) | For our Architectural Glass, Architectural Framing Systems and Architectural Services Segments (collectively referred to as the Architectural Segments), the target for growth at the end of the performance period was set at 3.0% above market growth (or 3.0% less than the market decline) in the U.S. commercial construction market for the performance period as reported in the McGraw-Hill report. The McGraw-Hill report is an industry report regarding growth in the construction industry, which is adjusted for the number of months by which our Architectural Segments lag the general commercial construction industry. The Committee relies on the McGraw-Hill report published just prior to the Committee meeting at which the payout is determined. The target for Large-Scale Optical Segment value-added picture framing glass and acrylic growth was pre-set at a 30.0% increase in market share. |
The table below sets forth the shares earned under the fiscal 2012 2014 performance share unit awards.
Fiscal 2012 2014 Performance Share Unit Payouts
Name |
Target Level of Performance Share Units (#) |
Percentage Payout (%) |
Additional Shares Issued (#) |
Total Performance Share Unit Payout (#) |
Market Value of Total Performance Share Unit Payout ($)(1) | ||||||||||||||||||||
Joseph F. Puishys(2) |
N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||
James S. Porter |
18,354 | 134.59 | 6,349 | 24,703 | 774,686 | ||||||||||||||||||||
Patricia A. Beithon |
14,522 | 134.59 | 5,023 | 19,545 | 612,931 | ||||||||||||||||||||
John A. Klein(2) |
N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||
Gary R. Johnson |
4,628 | 134.59 | 1,601 | 6,229 | 195,341 |
41
(1) | Market value of the total performance share unit payout is calculated by multiplying ($31.36), the closing price of our common stock on the NASDAQ Global Select Market on April 29, 2014, the date the Committee approved the final award, by the number of performance share units earned. |
(2) | Messrs. Puishys and Klein were not employed by our Company in fiscal 2012 when the fiscal 2012 2014 performance share unit awards were granted. |
42
Executive Stock Ownership Guidelines
We have had stock ownership guidelines for executives since 2001. The ownership guidelines are:
Position |
Value of Common Stock to be Owned(1) | |
Chief Executive Officer and President |
5 times base salary | |
Executive Vice Presidents, Chief Financial Officer and General Counsel |
3 times base salary | |
Other Executive Officers |
2 times base salary | |
Other Senior Corporate Executives |
1 time base salary |
(1) | Shares are valued based on the average closing price of our common stock for the fiscal year. |
43
44
The following table sets forth the total compensation for services in all capacities for fiscal 2014, 2013 and 2012 awarded to our Named Executive Officers.
Summary Compensation Table
Name and Principal Position |
Fiscal Year |
Salary ($) |
Bonus ($) |
Stock Awards ($)(1) |
Option Awards ($)(2) |
Non- Equity Incentive Plan Compen- sation ($)(3) |
Change in Pension Value and Non- Qualified Deferred Compen- sation Earnings ($)(4) |
All Other Compen- sation ($)(5) |
Total ($) | |||||||||||||||||||||||
Joseph F. Puishys |
2014 | 664,615 | | 535,997 | | 2,183,771 | | 68,327 | 3,452,710 | |||||||||||||||||||||||
Chief Executive Officer and President |
2013 | 625,961 | | 500,004 | | 1,200,000 | | 78,381 | 2,404,346 | |||||||||||||||||||||||
2012 | 323,077 | (6) | 500,000 | 1,800,000 | (7) | 1,300,000 | | | 49,549 | 3,972,626 | ||||||||||||||||||||||
James S. Porter |
2014 | 383,113 | | 184,501 | | 894,302 | | 28,890 | 1,490,806 | |||||||||||||||||||||||
Chief Financial Officer |
2013 | 373,075 | | 188,995 | | 415,575 | | 27,922 | 1,005,567 | |||||||||||||||||||||||
2012 | 367,637 | | 431,108 | (8) | | 432,840 | | 16,211 | 1,247,796 | |||||||||||||||||||||||
Patricia A. Beithon |
2014 | 300,364 | | 144,675 | | 663,586 | 2,527 | 27,813 | 1,138,965 | |||||||||||||||||||||||
General Counsel and Corporate Secretary |
2013 | 292,842 | | 148,175 | | 271,509 | 34,295 | 30,575 | 777,396 | |||||||||||||||||||||||
2012 | 290,888 | | 352,066 | (8) | | 285,400 | 110,859 | 19,758 | 1,058,971 | |||||||||||||||||||||||
John A. Klein |
2014 | 245,192 | | 73,790 | | 365,383 | | 41,291 | 725,656 | |||||||||||||||||||||||
Senior Vice President, Operations and Supply Chain Management |
2013 | 203,077 | (9) | | 225,608 | | 149,244 | | 87,167 | 665,096 | ||||||||||||||||||||||
Gary R. Johnson |
2014 | 209,720 | | 46,323 | | 217,209 | 598 | 14,427 | 488,277 | |||||||||||||||||||||||
Vice President and Treasurer |
2013 | 203,612 | | 49,469 | | 94,398 | 595 | 11,649 | 359,723 | |||||||||||||||||||||||
2012 | 202,276 | | 109,153 | (8) | | 99,230 | 209 | 10,469 | 421,337 |
(1) | The amounts shown in this column represent the grant date fair value of the time-based restricted stock awards made in fiscal 2014, 2013 and 2012 to our Named Executive Officers, the performance share unit awards made in fiscal 2012, and the special one-time inducement awards of fully-vested shares of our Companys common stock and time-based restricted stock made to Mr. Puishys in fiscal 2012, when he joined our Company. These amounts are calculated in accordance with FASB ASC Topic 718, based on the closing share price of our common stock on the date of grant. See Note 11 (Share-Based Compensation) to our fiscal 2014 Audited Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended March 1, 2014. |
(2) | The amounts shown in this column represent the grant date fair value of options granted. In accordance with FASB ASC Topic 718, the grant date fair value for the awards has been determined using the Black-Scholes method and based on the assumptions set forth in Note 11 (Share-Based Compensation) to our fiscal 2014 Audited Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended March 1, 2014. |
(3) | The amounts in this column for fiscal 2014 represent the annual cash incentive awards earned for fiscal 2014 made pursuant to our Executive MIP and the full earned amount of the fiscal 2013 2014 cash-based performance awards for the two-year performance cycle made pursuant to our Stock Incentive Plan, reported in a single year as required by applicable SEC rules. Actual payments of earned fiscal 2013 2014 cash-based performance awards are made in two equal installments following the performance period and are contingent on continued active employment on each applicable payment date. The first payment of the fiscal 2013 2014 cash-based performance awards was made in May 2014 and the second is scheduled to be made in March 2015. |
45
The following table sets forth information with respect to fiscal 2014 non-equity incentive plan compensation for our Named Executive Officers.
Name |
Fiscal Year | Annual Cash Incentive Awards Earned ($) |
Two-Year Cash-Based Performance Awards Earned ($) | ||||||||||||
Joseph F. Puishys |
2014 | 835,691 | 1,348,080 | ||||||||||||
James S. Porter |
2014 | 287,666 | 606,636 | ||||||||||||
Patricia A. Beithon |
2014 | 187,983 | 475,603 | ||||||||||||
John A. Klein |
2014 | 122,729 | 242,654 | ||||||||||||
Gary R. Johnson |
2014 | 65,648 | 151,561 |
For fiscal 2013 and 2012, the amounts in this column represent only the annual cash incentive awards earned. These awards were made pursuant to our Executive MIP for fiscal 2013 and our prior Executive MIP and individual annual cash incentive plan for fiscal 2012.
Our Executive MIP is discussed under the heading Executive MIP on page 35, and the fiscal 2014 annual cash incentive awards made pursuant to such plan are discussed under the heading Fiscal 2014 Annual Cash Incentive Payouts on page 36 and Grants of Plan-Based Awards on page 48. Our two-year cash-based performance award long-term compensation is discussed under Two-Year Cash-Based Performance Awards on page 38 and the fiscal 2013 2014 cash-based performance awards were made pursuant to our Stock Incentive Plan and are discussed under Fiscal 2013 2014 Cash-Based Performance Award Payouts on page 40.
(4) | The following table shows each component of the Change in Pension Value and Non-Qualified Deferred Compensation Earnings column for each of our Named Executive Officers for fiscal 2014, 2013 and 2012. |
Name |
Fiscal Year | Change in Pension Value ($) |
Above Market Earnings on Amounts Deferred Pursuant to our Legacy Deferred Compensation Plan ($) | ||||||||||||
Joseph F. Puishys |
2014 | | | ||||||||||||
2013 | | | |||||||||||||
2012 | | | |||||||||||||
James S. Porter |
2014 | | | ||||||||||||
2013 | | | |||||||||||||
2012 | | | |||||||||||||
Patricia A. Beithon |
2014 | 2,396 | 131 | ||||||||||||
2013 | 34,165 | 130 | |||||||||||||
2012 | 110,813 | 46 | |||||||||||||
John A. Klein |
2014 | | | ||||||||||||
2013 | | | |||||||||||||
Gary R. Johnson |
2014 | | 598 | ||||||||||||
2013 | | 595 | |||||||||||||
2012 | | 209 |
(5) | The following table shows each component of the All Other Compensation column for each of our Named Executive Officers for fiscal 2014. |
Name |
Perquisites ($) |
Company Matching Contributions to Defined Contribution Plans ($)(a) |
Dividends or Earnings on Stock Awards ($)(b) |
Dividend Equivalents Paid on 2011 2013 Performance Share Units Earned |
Relocation Assistance ($) |
Total All Other Compensation ($) | ||||||
Joseph F. Puishys |
3,088(c) | 9,221 | 56,018 | | | 68,327 | ||||||
James S. Porter |
| 10,535 | 7,364 | 10,991 | | 28,890 | ||||||
Patricia A. Beithon |
1,136(d) | 12,100 | 5,880 | 8,697 | | 27,813 | ||||||
John A. Klein |
931(d) | 8,827 | 4,078 | | 27,455(e) | 41,291 | ||||||
Gary R. Johnson |
796(d) | 8,971 | 1,888 | 2,772 | | 14,427 |
46
(a) | This column reports the amounts we set aside or accrued during fiscal 2014 under our 401(k) Retirement Plan and Employee Stock Purchase Plan as matching contributions on our Named Executive Officers contributions to such plans. Such contribution amounts are set forth in the table below. Our Named Executive Officers are eligible to participate in our 401(k) Retirement Plan and Employee Stock Purchase Plan on the same basis as all eligible employees. |
Name |
401(k) Retirement
Plan Matching Contributions ($) |
Employee Stock Purchase Plan 15% Matching Contributions ($) | ||
Joseph F. Puishys |
9,221 | | ||
James S. Porter |
8,975 | 1,560 | ||
Patricia A. Beithon |
8,980 | 3,120 | ||
John A. Klein |
8,827 | | ||
Gary R. Johnson |
8,971 | |
(b) | This column represents dividends paid on unvested restricted stock. |
(c) | Includes $1,140 in premiums for enhanced long-term disability insurance and $1,948 for reimbursement of spousal travel. |
(d) | Includes premiums for enhanced long-term disability insurance. |
(e) | Includes $8,084 in expenses relating to the sale of his home and purchase of a new home, and $19,371 in miscellaneous relocation expenses. |
(6) | Mr. Puishys joined our Company as Chief Executive Officer and President on August 22, 2011, and his fiscal 2012 salary is only for the portion of the fiscal year that Mr. Puishys was our employee. |
(7) | The amount includes the special, one-time new hire awards of 59,952 fully vested shares of our common stock with a grant date fair market value of $500,000 and 155,875 shares of time-based restricted stock with a grant date fair market value of $1,300,000, which vest in equal annual installments over five years. |
(8) | The amounts include the grant date fair market value of the target payout amounts for the fiscal 2012 2014 performance share unit awards, which are as follows: Mr. Porter, $259,709; Ms. Beithon, $205,486; and Mr. Johnson, $65,486. The grant date fair market value of the maximum potential payout amounts for the performance share unit awards are as follows: Mr. Porter, $519,418; Ms. Beithon, $410,973; and Mr. Johnson, $130,972. Further information regarding the fiscal 2012 2014 performance share unit awards is included in the Outstanding Equity Awards at 2014 Fiscal Year-End table on page 49. |
(9) | Mr. Klein joined our Company as Senior Vice President, Operations and Supply Chain Management on April 30, 2012, and his fiscal 2013 salary is only for the portion of the fiscal year that he was our employee. |
47
The following table sets forth information for our Named Executive Officers concerning (i) estimated possible payouts for fiscal 2014 annual cash incentive awards, and (ii) time-based restricted stock awards made during fiscal 2014.
Fiscal 2014 Grants of Plan-Based Awards
Name |
Grant Date |
Estimated Possible Payouts
under Non-Equity Incentive Plan Awards(1) |
All Other Stock Awards: Number of Shares of |
Grant Date Fair Value of Stock and | ||||||||||||||||||
Threshold ($) |
Target ($) |
Maximum ($) |
Stock or Units (#)(2) |
Option Awards ($)(3) | ||||||||||||||||||
Joseph F. Puishys |
||||||||||||||||||||||
Fiscal 2014 annual cash incentive award |
4/30/2013 | 33,500 | 670,000 | 1,340,000 | | | ||||||||||||||||
Time-based restricted stock award |
4/30/2013 | | | | 21,036 | 535,997 | ||||||||||||||||
James S. Porter |
||||||||||||||||||||||
Fiscal 2014 annual cash incentive award |
4/30/2013 | 11,531 | 230,625 | 461,250 | | | ||||||||||||||||
Time-based restricted stock award |
4/30/2013 | | | | 7,241 | 184,501 | ||||||||||||||||
Patricia A. Beithon |
||||||||||||||||||||||
Fiscal 2014 annual cash incentive award |
4/30/2013 | 7,535 | 150,700 | 301,400 | | | ||||||||||||||||
Time-based restricted stock award |
4/30/2013 | | | | 5,678 | 144,675 | ||||||||||||||||
John A. Klein |
||||||||||||||||||||||
Fiscal 2014 annual cash incentive award |
4/30/2013 | 4,920 | 98,400 | 196,800 | | | ||||||||||||||||
Time-based restricted stock awards |
4/30/2013 | | | | 2,896 | 73,790 | ||||||||||||||||
Gary R. Johnson |
||||||||||||||||||||||
Fiscal 2014 annual cash incentive award |
4/30/2013 | 2,632 | 52,636 | 105,273 | | | ||||||||||||||||
Time-based restricted stock award |
4/30/2013 | | | | 1,818 | 46,323 |
(1) | These columns show the range of possible payouts under the fiscal 2014 annual cash incentive awards. The fiscal 2014 annual cash incentive awards were made pursuant to our Executive MIP described under the heading Executive MIP on page 35 and all are based on results achieved against financial performance metrics. Amounts shown in the Threshold column assume threshold performance level is achieved for only the performance goal with the lowest weighting and is not achieved for any other performance goals. Amounts shown in the Target and Maximum columns assume target and maximum performance levels, respectively, are achieved for all performance goals. The fiscal 2014 annual cash incentive award payouts are described under the heading Fiscal 2014 Annual Cash Incentive Payouts on page 36 and shown in the Summary Compensation Table on page 45 in the column titled Non-Equity Incentive Plan Compensation. |
(2) | For our Named Executive Officers, these time-based restricted stock awards were based on performance during fiscal 2013 and vest in equal annual installments on the first three anniversaries of the grant date. Dividends or other distributions (whether cash, stock or otherwise) with respect to the shares of time-based restricted stock will be paid during the vesting period. In the event of total disability or death prior to the end of the vesting period, the shares of time-based restricted stock will be distributed at the end of the vesting period to the participant, or in the event of death, to his or her estate. Our time-based restricted stock program is described under Time-Based Restricted Stock Awards on page 37. |
(3) | The fair value of the restricted stock awards was calculated by multiplying the number of shares of our common stock by $25.48, the closing price of our common stock on the NASDAQ Global Select Market on April 30, 2013, the date of the grant. |
48
Outstanding Equity Awards at Fiscal Year-End
The following table summarizes the equity awards held by our Named Executive Officers as of March 1, 2014, the last day of fiscal 2014.
Outstanding Equity Awards at 2014 Fiscal Year-End
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||
Name |
Option Grant Date |
Number of Securities Under- lying Unexer- cised Options (#) Exer- cisable |
Number of Securities Under- lying Unexer- cised Options (#) Unexer- cisable |
Option Exercise Price ($)(1) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) |
Market Value of Shares or Units of Stock That Have Not Vested ($)(2) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | |||||||||||||||||||||||||
Joseph |
8/22/2011 | (4) | 300,341 | 150,171 | 8.34 | 8/22/2021 | | | | | ||||||||||||||||||||||||
F. |
| | | | | 93,525 | (5) | 3,201,361 | | | ||||||||||||||||||||||||
Puishys |
| | | | | 21,673 | (6) | 741,867 | | | ||||||||||||||||||||||||
| | | | | 21,036 | (7) | 720,062 | | | |||||||||||||||||||||||||
James |
5/01/2007 | (8) | 18,058 | | 24.19 | 5/01/2017 | | | | | ||||||||||||||||||||||||
S. |
4/29/2008 | (8) | 20,289 | | 21.59 | 4/29/2018 | | | | | ||||||||||||||||||||||||
Porter |
| | | | | | | 18,354 | (9) | 628,257 | ||||||||||||||||||||||||
| | | | | 4,038 | (10) | 138,221 | | | |||||||||||||||||||||||||
| | | | | 8,624 | (11) | 295,200 | | | |||||||||||||||||||||||||
| | | | | 7,241 | (7) | 247,859 | | | |||||||||||||||||||||||||
Patricia |
4/13/2005 | (8) | 17,411 | | 14.10 | 4/13/2015 | | | | | ||||||||||||||||||||||||
A. |
4/25/2006 | (8) | 16,939 | | 15.77 | 4/25/2016 | | | | | ||||||||||||||||||||||||
Beithon |
5/01/2007 | (8) | 14,946 | | 24.19 | 5/01/2017 | | | | | ||||||||||||||||||||||||
4/29/2008 | (8) | 17,104 | | 21.59 | 4/29/2018 | | | | | |||||||||||||||||||||||||
| | | | | | | 14,522 | (9) | 497,088 | |||||||||||||||||||||||||
| | | | | 3,453 | (10) | 118,196 | | | |||||||||||||||||||||||||
| | | | | 6,761 | (11) | 231,429 | | | |||||||||||||||||||||||||
| | | | | 5,678 | (7) | 194,358 | | | |||||||||||||||||||||||||
John |
| | | | | 5,000 | (12) | 171,150 | | | ||||||||||||||||||||||||
A. |
| | | | | 3,125 | (13) | 106,969 | | | ||||||||||||||||||||||||
Klein |
| | | | | 2,896 | (7) | 99,130 | | | ||||||||||||||||||||||||
Gary |
| | | | | | | 4,628 | (9) | 158,416 | ||||||||||||||||||||||||
R. |
| | | | | 1,029 | (10) | 35,223 | | | ||||||||||||||||||||||||
Johnson |
| | | | | 2,257 | (11) | 77,257 | | | ||||||||||||||||||||||||
| | | | | 1,818 | (7) | 62,230 | | |
(1) | The exercise price for all stock option and stock appreciation right (SAR) grants is 100% of the closing price of our common stock on the NASDAQ Global Select Market on the date of grant. |
(2) | The market value is calculated by multiplying the closing price of $34.23 of our common stock on the NASDAQ Global Select Market on February 28, 2014, the last trading day of fiscal 2014, by the number of shares of restricted stock that had not vested or the number of unearned performance share unit awards as of March 1, 2014, the last day of fiscal 2014. |
(3) | Includes performance share unit awards with three-year performance periods until payout. At the beginning of each performance period, the threshold, target and maximum award levels are set. Our performance share unit award program is described under the heading Legacy Fiscal 2012 2014 Performance Share Unit Payouts on page 41. |
(4) | Represents a stock option award that vests in equal, annual installments on the first three anniversaries of the date of grant and has a 10-year term. |
49
(5) | Represents an unvested time-based restricted stock award granted on August 22, 2011, which vests in equal, annual installments on the first five anniversaries of the date of grant. |
(6) | Includes unvested time-based restricted stock award granted on April 27, 2012, which vests in equal annual installments on the first three anniversaries of the date of grant. |
(7) | Includes unvested time-based restricted stock award granted on April 30, 2013, which vests in equal annual installments on the first three anniversaries of the date of grant. |
(8) | Represents SARs that vested in equal annual installments on the first three anniversaries of the date of grant and have 10-year terms. Upon exercise of a SAR, the holder will receive the number of shares of our common stock with a total value equivalent to the difference between the exercise price of the SAR and the fair market value of our common stock on the date of exercise. In the event of total disability or death, all outstanding SARs become immediately exercisable for a period of 12 months following the date of total disability or death. |
(9) | Represents performance share unit awards made on April 26, 2011 for the three-year performance period beginning on the first day of fiscal 2012 and ending on the last day of fiscal 2014, which will only be earned if the predetermined goals for the performance period are met. The number of shares in this column is equal to the target number of performance share units. |
For each of our Named Executive Officers, the number of shares of our common stock that may be earned as a payout based on threshold, target and maximum performance levels during the three-year performance period is set forth below.
Name |
Performance Period | Estimated Future Payouts Based on Performance Level | ||||||||||
Threshold (#) | Target (#) | Maximum (#) | ||||||||||
Joseph F. Puishys |
N/A | N/A | N/A | N/A | ||||||||
James S. Porter |
Fiscal 2012 2014 | 9,177 | 18,354 | 36,708 | ||||||||
Patricia A. Beithon |
Fiscal 2012 2014 | 7,261 | 14,522 | 29,044 | ||||||||
John A. Klein |
N/A | N/A | N/A | N/A | ||||||||
Gary R. Johnson |
Fiscal 2012 2014 | 2,314 | 4,628 | 9,256 |
The performance share unit awards for the fiscal 2012 2014 performance period were paid out at the 134.59% level on April 29, 2014. Information regarding the performance share unit award payouts in fiscal 2014 is provided under the heading Legacy Fiscal 2012 2014 Performance Share Unit Payouts on page 41. The performance share unit awards for the fiscal 2012 2014 performance period are included in the table because such awards were not deemed earned and vested until April 29, 2014, which is after the last day of fiscal 2014.
(10) | Includes unvested time-based restricted stock awards granted on April 26, 2011, which vested on April 26, 2014. |
(11) | Includes unvested time-based restricted stock awards granted on April 26, 2012, which vest in equal annual installments on the first three anniversaries of the date of grant. |
(12) | Includes unvested time-based restricted stock award granted on April 30, 2012, which vested on April 30, 2014. |
(13) | Includes unvested time-based restricted stock award granted on April 30, 2012 that vests in equal annual installments on the first three anniversaries of the date of grant. |
50
Option Exercises and Stock Vested
The following table sets forth information on stock option and SAR award exercises and restricted stock awards vested during fiscal 2014 for each of our Named Executive Officers.
Fiscal 2014 Option Exercises and Stock Vested | ||||||||||||||
Option Awards | Stock Awards | |||||||||||||
Name |
Number of Shares Acquired on Exercise (#) |
Value Realized on Exercise ($)(1) |
Number of Shares Acquired on Vesting (#) |
Value Realized on Vesting ($)(2) | ||||||||||
Joseph F. Puishys |
| | 42,012(3) | 1,177,504(4) | ||||||||||
James S. Porter |
14,107 | 513,520 | 23,810(5) | 606,808(6) | ||||||||||
Patricia A. Beithon |
22,000 | 513,674 | 19,101(5) | 486,799(6) | ||||||||||
John A. Klein |
| | 6,563(3) | 167,255(7) | ||||||||||
Gary R. Johnson |
9,057 | 287,053 | 6,024(5) | 153,524(6) |
(1) | The value realized is the difference between the exercise price per share or SAR and the closing price of our common stock on the NASDAQ Global Select Market on the date of exercise multiplied by, in the case of a stock option, the number of shares acquired on exercise of the option or, in the case of a SAR, the number of SARs exercised. |
(2) | The value realized is determined by multiplying the shares acquired on vesting by the closing price of our common stock on the NASDAQ Global Select Market on the vesting date. |
(3) | Includes shares of time-based restricted stock that became vested and were distributed during fiscal 2014. |
(4) | Calculated using the closing prices of $25.49 and $28.91 on April 26, 2013 and August 22, 2013, respectively, for the shares of time-based restricted stock that became vested on April 27, 2013 and August 22, 2013, respectively. |
(5) | Includes fiscal 2011 2013 performance share unit awards and shares of time-based restricted stock that became vested and were distributed during fiscal 2014. The fiscal 2012 2014 performance share unit awards that were paid out on April 29, 2014 are not included in the table since such shares were not considered vested until April 29, 2014, which is after the last day of fiscal 2014. |
(6) | Calculated using the closing prices of $25.49 on April 26, 2013 for the shares of time-based restricted stock that became vested on April 26 and 27, 2013 and $25.48 on April 30, 2013 for the fiscal 2011 2013 performance share units that became vested on April 30, 2013. |
(7) | Calculated using the closing price of $25.48 on April 30, 2013 for shares of time-based restricted stock that became vested on April 30, 2013. |
51
Fiscal 2014 Pension Benefits Table
The following table shows the present value of accumulated benefits under our Legacy SERP as of March 1, 2014, the measurement date used in preparing our fiscal 2014 Audited Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended March 1, 2014, years of service credit and payments during fiscal 2014 for Ms. Beithon, our only Named Executive Officer who participates in our Legacy SERP.
Fiscal 2014 Pension Benefits | ||||||||
Name |
Plan Name | Number of Years Credited Service (#) |
Present Value of Accumulated Benefit ($)(1) |
Payments During Last Fiscal Year ($) | ||||
Patricia A. Beithon |
Legacy SERP | 9 | 466,186 | |
(1) | The present value of accumulated benefits is based on the assumptions used in determining our Legacy SERP benefit obligations and net periodic benefit cost for financial reporting purposes, except that no pre-retirement mortality assumption is used for these calculations. A complete description of the accounting policies and assumptions we used to calculate the present value of accumulated benefits can be found under Note 9 (Employee Benefit Plans Officers Supplemental Executive Retirement Plan (SERP), Obligations and Funded Status of Defined-Benefit Pension Plans and Additional Information) to our fiscal 2014 Audited Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended March 1, 2014. |
52
53
Non-Qualified Deferred Compensation Table
The table below provides information on our Named Executive Officers compensation during fiscal 2014 under our Deferred Compensation Plan and Legacy Deferred Compensation Plan.
Fiscal 2014 Deferred Compensation
Name |
Name of Plan |
Executive Contributions in Last Fiscal Year ($)(1) |
Registrant Contributions in Last Fiscal Year ($) |
Aggregate Earnings in Last Fiscal Year ($)(1) |
Aggregate Withdrawals/ Distributions ($) |
Aggregate Balance at Last Fiscal Year End ($) | |||||||||||||||||||||
Joseph F. Puishys |
Deferred Comp. | | | | | | |||||||||||||||||||||
Legacy Deferred Comp. | | | | | | ||||||||||||||||||||||
James S. Porter |
Deferred Comp. | | | | | | |||||||||||||||||||||
Legacy Deferred Comp. | | | | | | ||||||||||||||||||||||
Patricia A. Beithon |
Deferred Comp. | | | | | | |||||||||||||||||||||
Legacy Deferred Comp. | | | 131 | | 40,955(2) | ||||||||||||||||||||||
John A. Klein |
Deferred Comp. | | | | | | |||||||||||||||||||||
Legacy Deferred Comp. | | | | | | ||||||||||||||||||||||
Gary R. Johnson |
Deferred Comp. | 9,440(3) | | | 4,883 | 15,141(3) | |||||||||||||||||||||
Legacy Deferred Comp. | | | 598 | | 186,944(4) |
(1) | Pursuant to SEC rules, all earnings on non-qualified deferred compensation during fiscal 2014 in excess of 3.20%, 120% of the applicable federal rate compounded annually, have been deemed above-market earnings. During fiscal 2014, the interest paid on amounts deferred for plan years beginning prior to January 1, 2010 pursuant to our Legacy Deferred Compensation Plan was 3.48%. These amounts are reported in the Change in Pension Value and Non-Qualified Deferred Compensation Earnings column of the Summary Compensation Table on page 45. |
(2) | The amount reported in this column for Ms. Beithon is not reported in the Summary Compensation Table on page 45 because all of this amount was earned by her prior to fiscal 2012; however, all of this amount was reported in the Summary Compensation Table in the years earned. |
(3) | The amounts reported in this column for Mr. Johnson are reported in the Summary Compensation Table on page 45 in the Non-Equity Incentive Plan Compensation column. |
(4) | The amount reported in this column for Mr. Johnson for our Legacy Deferred Compensation Plan is not reported in the Summary Compensation Table on page 45, as all of this amount was earned by him prior to fiscal 2012; however, this amount would have been reported in the Summary Compensation Table in the year earned provided Mr. Johnson was a Named Executive Officer in such years. |
54
55
56
Executive Benefits and Payments Upon Termination and Change-in-Control
The table below shows potential payments to our Named Executive Officers upon certain terminations pursuant to agreement, disability, death and a change-in-control of our Company. The table below assumes that termination of employment or the change-in-control was effective as of February 28, 2014, the last trading day of fiscal 2014. The amounts shown are estimates of the amounts that would be paid to the executives upon termination of employment or the change-in-control, in addition to the base salary and bonus earned by our Named Executive Officers for fiscal 2014. We have not included payments or benefits that are fully disclosed in the Fiscal 2014 Pension Benefits table on page 52 or Fiscal 2014 Deferred Compensation table on page 54. The actual amounts to be paid can only be determined at the actual time of a Named Executive Officers termination of employment.
Name |
Type of Payment |
Payments Upon Involuntary Termination Without Cause or Resignation for Good Reason Pursuant to Employment Agreement ($) |
Payments Upon Disability ($) |
Payments Upon Death ($) |
Payments After a Change-in- Control without Termination ($) |
Payments Upon Involuntary or Good Reason Termination After a Change-in-Control Occurs ($) | |||||||||||||||||||||
Joseph |
Cash Severance Payment | 1,340,000 | (1) | | | | 2,680,000 | (2) | |||||||||||||||||||
F. |
Health Insurance Benefits | 12,595 | | | | 25,189 | |||||||||||||||||||||
Puishys |
Reimbursement of Legal Costs | | | | | | (3) | ||||||||||||||||||||
Acceleration of Vesting | |||||||||||||||||||||||||||
Stock Options |
3,887,927 | (4) | | | 3,887,927 | (4) | 3,887,927 | (4) | |||||||||||||||||||
Restricted Stock |
3,201,361 | (5) | 4,663,290 | (5) | 4,663,290 | (5) | | 4,663,290 | (5) | ||||||||||||||||||
Cash-Based Perf. Awards |
1,348,080 | (6) | | (7) | | (7) | 1,348,080 | (6) | 1,348,080 | (6) | |||||||||||||||||
Disability Payments | | 302,499 | (8) | | | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Total |
9,789,963 | 4,965,789 | 4,663,290 | 5,236,007 | 12,604,486 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
James |
Cash Severance Payment | | | | | 1,230,000 | (2) | ||||||||||||||||||||
S. |
Health Insurance Benefits | | | | | 32,906 | |||||||||||||||||||||
Porter |
Reimbursement of Legal Costs | | | | | | (3) | ||||||||||||||||||||
Acceleration of Vesting | |||||||||||||||||||||||||||
Performance Share Units |
| | (9) | | (9) | 845,584 | (10) | 845,584 | (10) | ||||||||||||||||||
Restricted Stock |
| 681,280 | (5) | 681,280 | (5) | | 681,280 | (5) | |||||||||||||||||||
Cash-Based Perf. Awards |
| | (7) | | (7) | 606,636 | (6) | 606,636 | (6) | ||||||||||||||||||
Disability Payments |
| 5,850 | (8) | | | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Total |
| 687,130 | 681,280 | 1,452,220 | 3,396,406 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||
Patricia |
Cash Severance Payment |
| | | | 904,200 | (2) | ||||||||||||||||||||
A. |
Health Insurance Benefits |
| | | | 2,038 | |||||||||||||||||||||
Beithon |
Reimbursement of Legal Costs |
| | | | | (3) | ||||||||||||||||||||
Acceleration of Vesting |
|||||||||||||||||||||||||||
Performance Share Units |
| | (9) | | (9) | 669,025 | (10) | 669,025 | (10) | ||||||||||||||||||
Restricted Stock |
| 543,983 | (5) | 543,983 | (5) | | 543,983 | (5) | |||||||||||||||||||
Cash-Based Perf. Awards |
| | (7) | | (7) | 475,603 | (6) | 475,603 | (6) | ||||||||||||||||||
Disability Payments |
| 210,351 | (8) | | | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Total |
| 754,334 | 543,983 | 1,144,628 | 2,594,849 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||
John |
Cash Severance Payment |
| | | | 688,800 | (2) | ||||||||||||||||||||
A. |
Health Insurance Benefits |
| | | | 32,906 | |||||||||||||||||||||
Klein |
Reimbursement of Legal Costs |
| | | | | (3) | ||||||||||||||||||||
Acceleration of Vesting |
|||||||||||||||||||||||||||
Restricted Stock |
| 377,249 | (5) | 377,249 | (5) | | 377,249 | (5) | |||||||||||||||||||
Cash-Based Perf. Awards |
| | (7) | | (7) | 242,654 | (6) | 242,654 | (6) | ||||||||||||||||||
Disability Payments |
| 172,200 | (8) | | | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Total |
| 549,449 | 377,249 | 242,654 | 1,341,609 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||
Gary |
Cash Severance Payment |
| | | | 263,181 | (1) | ||||||||||||||||||||
R. |
Health Insurance Benefits |
| | | | 12,163 | |||||||||||||||||||||
Johnson |
Reimbursement of Legal Costs |
| | | | | (3) | ||||||||||||||||||||
Acceleration of Vesting |
|||||||||||||||||||||||||||
Performance Share Units |
| | (9) | | (9) | 213,219 | (10) | 213,219 | (10) | ||||||||||||||||||
Restricted Stock |
| 174,710 | (5) | 174,710 | (5) | | 174,710 | (5) | |||||||||||||||||||
Cash-Based Perf. Awards |
| | (7) | | (7) | 151,561 | (6) | 151,561 | (6) | ||||||||||||||||||
Disability Payments |
| 147,378 | (8) | | | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Total |
| 322,088 | 174,710 | 364,780 | 814,834 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
(1) | Equals the sum of his (a) annual base salary as of February 28, 2014 and (b) fiscal 2014 annual cash incentive award at target level performance. |
(2) | Equals the sum of (a) two times his or her annual base salary as of February 28, 2014, and (b) two times his or her fiscal 2014 annual cash incentive award at target level performance. |
57
(3) | We will pay legal fees and expenses incurred to obtain or enforce any right or benefit under his or her CIC Severance Agreement. |
(4) | Includes stock options, which would vest upon an assumed occurrence on February 28, 2014 of one of the following events: (a) termination without Cause or resignation for Good Reason pursuant to employment agreement; (b) a Change-in-Control not involving an acquirer with publicly traded stock without termination of employment; or (c) termination without Cause or resignation for Good Reason after a Change-in-Control. The amount in this table represents the aggregate number of shares subject to options that would vest multiplied by the closing price ($34.23) of our common stock on the NASDAQ Global Select Market on February 28, 2014, the last trading day of fiscal 2014, less the exercise price ($8.34) of such options. |
(5) | Includes time-based restricted stock awards (excluding performance share unit awards), which would vest upon an assumed occurrence on February 28, 2014 of one of the following events: (a) termination without Cause or resignation for Good Reason pursuant to employment agreement; (b) disability; (c) death; (d) a Change-in-Control without termination of employment; or (e) termination following a Change-in-Control. The amount in this table represents such aggregate number of shares multiplied by the closing price ($34.23) of our common stock on the NASDAQ Global Select Market on February 28, 2014, the last trading day of fiscal 2014. |
(6) | The amount represents the payout of cash-based performance awards assuming the performance period ended upon the assumed occurrence on February 28, 2014 (one day before the end of the two-year performance period) of one of the following events: (a) termination without Cause or resignation for Good Reason pursuant to employment agreement; (b) a Change-in-Control without termination; or (c) termination following a Change-in-Control. |
(7) | In the event employment is terminated due to retirement, disability or death prior to the end of the performance period for cash-based performance awards, our Named Executive Officer, or his or her estate, will be entitled to retain and receive a prorated portion (based on the amount of time elapsed between the beginning of the performance period and the date of termination) of the cash-based performance awards at the end of the performance period to the extent earned. |
(8) | This amount represents the annual disability payments during the first year of disability. Annual disability payments after the first year of disability would be as follows: for Mr. Puishys, $180,000; for Mr. Porter, $0; for Ms. Beithon, $180,000; for Mr. Klein, $147,600; and for Mr. Johnson, $126,324. |
(9) | In the event employment is terminated due to retirement, disability or death prior to the end of the performance period for performance share units, our Named Executive Officer, or his or her estate, will be entitled to retain and receive the performance share units at the end of the performance period to the extent earned. |
(10) | This amount represents the payout of performance share units, assuming the performance period ended on February 28, 2014 (one day before the end of the three-year performance period), the date of the Change-in-Control. |
58
PROPOSAL 2: ADVISORY APPROVAL OF APOGEES EXECUTIVE COMPENSATION
59
PROPOSAL 3: APPROVAL OF THE 2014 RESTATEMENT OF THE
APOGEE ENTERPRISES, INC. 2009 NON-EMPLOYEE DIRECTOR STOCK INCENTIVE PLAN
60
61
62
63
64
Historical Awards Under the Director Stock Plan
The following table sets forth information with respect to grants of time-based restricted stock to the Named Executive Officers, director nominees and the specified groups set forth below under the Director Stock Plan as of March 1, 2014, the last day of fiscal 2014.
Name and Principal Position |
Time-Based | |
Joseph F. Puishys |
| |
James S. Porter |
| |
Patricia A. Beithon |
| |
John A. Klein |
| |
Gary R. Johnson |
| |
Robert J. Marzec |
7,933 | |
Donald A. Nolan |
3,122 | |
David E. Weiss |
7,933 | |
All current executive officers as a group (5 persons) |
| |
All current non-executive directors as a group (9 persons) |
66,586 | |
Each associate of the above-mentioned directors, executive officers or nominees |
| |
Each other person who received or is to receive 5% of such options, warrants or rights |
| |
All employees (other than executive officers) as a group (160 persons) |
|
65
Equity Compensation Plan Information
The following table summarizes, with respect to our equity compensation plans, the number of shares of our common stock to be issued upon exercise of outstanding options, warrants and other rights to acquire shares, the weighted-average exercise price of those outstanding options, warrants and rights and the number of shares remaining available for future issuance under our equity compensation plans as of March 1, 2014, the last day of fiscal 2014.
Plan Category |
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights |
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights |
Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in the First Column) | ||||||||||||
Equity compensation plans |
|||||||||||||||
approved by security holders |
632,870 | (1)(2) | $ | 15.29 | (3) | 1,174,537 | (4) | ||||||||
Equity compensation plans |
|||||||||||||||
not approved by security |
|||||||||||||||
holders |
450,512 | (5)(6) | $8.34 | None | |||||||||||
Total |
1,083,382 | (7) | $ | 12.40 | 1,174,537 |
(1) | Includes shares underlying performance share unit awards granted under our Stock Incentive Plan, options and SARs granted under our 2002 Omnibus Stock Incentive Plan and options granted under our 1997 Stock Incentive Plan. Dividends accrue on the outstanding performance share units during the three-year performance period but will be paid only on shares earned at the end of the performance period. None of the outstanding stock options or SARs has dividend rights attached, nor are they transferable. |
(2) | As described further under the heading Legacy Fiscal 2012 2014 Performance Share Unit Payouts on page 41, at the beginning of fiscal 2012, performance share units were awarded to plan participants which will vest based on our Companys performance over a three-year performance period. The performance share units represent the right to receive shares of our common stock at the end of the three-year performance period. Pursuant to SEC rules and the reporting requirements for this table, we have included in this column 235,530 shares underlying the Fiscal 2012 2014 Performance Share Units at maximum level performance, assuming our Company performed at the maximum level during the applicable performance period. Only 117,765 shares underly the Fiscal 2012 2014 Performance Share Units at target level performance. We discontinued issuing performance share unit awards at the beginning of fiscal 2013. |
Pursuant to the SEC rules and reporting requirements for this table, we have not included in this column 457,299 shares of restricted stock that are issued and outstanding. All shares of restricted stock outstanding have dividend rights attached, but none of the shares of restricted stock are transferrable.
(3) | The weighted-average exercise price only includes the 117,765 shares underlying the Fiscal 2012 2014 Performance Share Units at target level performance. |
(4) | Pursuant to the SEC Rules and reporting requirements for this table, of these shares, 59,041 are available for issuance under our Legacy Partnership Plan, 959,568 are available for grant under our Stock Incentive Plan, 50,344 are available for grant under our Director Stock Plan; no shares are available for grant under our 2002 Omnibus Stock Incentive Plan or our 1997 Stock Incentive Plan, and 105,584 are available for grant under our Director Deferred Compensation Plan. However, because our Company granted the Fiscal 2012 - 2014 Performance Share Unit awards at target at the beginning of the three-year performance period, actual shares available for future grant under our Stock Incentive Plan (assuming the Fiscal 2012 - 2014 Performance Share Unit awards granted at target) is actually 1,077,333. |
66
(5) | Reflects stock options granted to Mr. Puishys on August 22, 2011 pursuant to the terms of his employment agreement with our Company effective as of August 22, 2011. The options will vest in equal annual installments over a three-year period beginning on August 22, 2012. |
(6) | Pursuant to the SEC rules and reporting requirements for this table, we have not included in this column 93,525 shares of restricted stock that are issued and outstanding. All shares of restricted stock outstanding have dividend rights attached, but none of the shares of restricted stock are transferrable. |
(7) | If only the 117,765 shares underlying the Fiscal 2012 - 2014 Performance Share Unit awards at target level performance had been included in this column, the number of shares of common stock to be issued upon exercise of outstanding options, warrants and rights as of March 1, 2014, the last day of fiscal 2014, would have been 965,617, which aligns with the information reported under Note 11, (Share-Based Compensation) to our fiscal 2014 Audited Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended March 1, 2014. |
Recommendation
The Board of Directors recommends that you vote FOR the proposal to approve the amendments to the Director Stock Plan Restatement. Proxies will be voted FOR the proposal unless otherwise specified.
PROPOSAL 4: APPROVAL OF THE 2014 RESTATEMENT OF THE APOGEE ENTERPRISES, INC. NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
67
68
69
Historical Awards Under the Director Deferred Compensation Plan
The following table sets forth information with respect to grants of phantom stock units to the Named Executive Officers, director nominees and the specified groups set forth below under the Director Deferred Compensation Plan as of March 1, 2014, the last day of fiscal 2014.
Name and Principal Position |
Phantom Stock Units | ||||
Joseph F. Puishys |
| ||||
James S. Porter |
| ||||
Patricia A. Beithon |
| ||||
John A. Klein |
| ||||
Gary R. Johnson |
| ||||
Robert J. Marzec |
10,748 | ||||
Donald A. Nolan |
1,494 | ||||
David E. Weiss |
| ||||
All current executive officers as a group (5 persons) |
| ||||
All current non-executive directors as a group (9 persons) |
138,502 | ||||
Each associate of the above-mentioned directors, executive officers or nominees |
| ||||
Each other person who received or is to receive 5% of such options, warrants or rights |
| ||||
All employees (other than executive officers) as a group (160 persons) |
|
Recommendation
The Board of Directors recommends that you vote FOR the proposal to approve the Director Deferred Compensation Plan Restatement. Proxies will be voted FOR the proposal unless otherwise specified.
70
AUDIT COMMITTEE REPORT AND PAYMENT OF FEES TO INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees
For fiscal 2014 and 2013, we incurred the fees shown in the following table for professional services provided by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, the Deloitte Entities).
Fiscal 2014 |
Fiscal 2013 | |||||
Audit Fees(1) |
$ | 1,342,000 | $1,254,000 | |||
Audit-Related Fees(2) |
63,000 | 27,000 | ||||
Tax Fees(3) |
335,000 | 174,000 | ||||
All Other Fees |
| | ||||
|
|
| ||||
Total |
$ | 1,740,000 | $1,455,000 |
(1) | Audit fees consisted primarily of audit work performed in preparation of our annual financial statements, audit of internal controls over financial reporting, review of the quarterly financial statements included in our quarterly reports on Form 10-Q and review of other SEC filings for fiscal 2014 and 2013. |
(2) | Audit-related fees primarily include fees for audits of our employee benefit plans during fiscal 2014 and 2013, and acquisition-related financial due diligence services during fiscal 2014. |
(3) | Tax fees for fiscal 2014 consisted of $41,000 for U.S. and foreign tax return reviews and $294,000 for miscellaneous tax consultations. Tax fees for fiscal 2013 consisted of $33,000 for U.S. tax return review and $141,000 for miscellaneous tax consultations. |
71
PROPOSAL 5: RATIFICATION OF APPOINTMENT OF OUR INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
SHAREHOLDER PROPOSALS FOR OUR 2015 ANNUAL MEETING OF SHAREHOLDERS
72
HOUSEHOLDING OF PROXY MATERIALS
By Order of the Board of Directors, |
|
Patricia A. Beithon |
General Counsel and Corporate Secretary |
Dated: May 12, 2014
73
[THIS PAGE INTENTIONALLY LEFT BLANK]
APOGEE ENTERPRISES, INC.
2009 NON-EMPLOYEE DIRECTOR STOCK INCENTIVE PLAN,
AS AMENDED AND RESTATED (2014)
Section 1. | Purpose. |
The purpose of the Plan is to promote the interests of the Company and its shareholders by aiding the Company in attracting and retaining Non-Employee Directors capable of providing strategic direction to, and assuring the future success of, the Company, to offer such Non-Employee Directors incentives to put forth maximum efforts for the success of the Companys business and an opportunity to acquire a proprietary interest in the Company, thereby aligning the interests of such Non-Employee Directors with the Companys shareholders.
Section 2. | Definitions. |
As used in the Plan, the following terms shall have the meanings set forth below:
(a) Acquiring Person shall mean any person (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) who or which, together with all Affiliates and Associates of such person, is the Beneficial Owner (as defined in Rule 13d-3 promulgated under the Exchange Act) of 10% or more of the shares of Common Stock of the Company then outstanding, but shall not include the Company, any subsidiary of the Company or any employee benefit plan of the Company or of any subsidiary of the Company or any entity holding shares of Common Stock organized, appointed or established for, or pursuant to the terms of, any such plan. For purposes of this definition, Affiliate and Associate shall have the respective meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act.
(b) Affiliate shall mean (i) any entity that, directly or indirectly through one or more intermediaries, is controlled by the Company and (ii) any entity in which the Company has a significant equity interest, in each case as determined by the Committee.
(c) Award shall mean any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Dividend Equivalent, Stock Award or Other Stock-Based Award granted under the Plan.
(d) Award Agreement shall mean any written agreement, contract or other instrument or document evidencing an Award granted under the Plan. An Award Agreement may be in an electronic medium and need not be signed by a representative of the Company or the Participant. Each Award Agreement shall be subject to the applicable terms and conditions of the Plan and any other terms and conditions (not inconsistent with the Plan) determined by the Committee.
(e) Board shall mean the Board of Directors of the Company.
(f) Change in Control shall mean:
(i) a change in control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act, or successor provision thereto, whether or not the Company is then subject to such reporting requirement including, without limitation, any of the following events:
(A) the consummation of any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Companys Common Stock would be converted into cash, securities, or other property, other than a merger of the Company in which all or substantially all of the holders of the Companys Common Stock immediately prior to the consolidation or merger own more than 65% of the common
A-1
stock of the surviving corporation immediately after the merger in the same relative proportions as their ownership of the Companys Common Stock immediately prior to the consolidation or merger;
(B) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company;
(C) any reorganization, reverse stock split, or recapitalization of the Company which would result in a Change in Control; or
(D) any transaction or series of related transactions having, directly or indirectly, the same effect as any of the foregoing.
(ii) any person (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the Beneficial Owner (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 35% or more of the combined voting power of the Companys then outstanding securities; or
(iii) the Continuing Directors cease to constitute a majority of the Companys Board.
(g) Code shall mean the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder.
(h) Committee shall mean the Nominating and Corporate Governance Committee of the Board or any successor committee of the Board designated by the Board to administer the Plan. The Committee shall be comprised of not less than such number of Directors as shall be required to permit Awards granted under the Plan to qualify under Rule 16b-3, and each member of the Committee shall be a Non-Employee Director within the meaning of Rule 16b-3.
(i) Common Stock shall mean shares of common stock, $.33-1/3 par value, of the Company.
(j) Company shall mean Apogee Enterprises, Inc., a Minnesota corporation, and any successor corporation.
(k) Continuing Director shall mean any person who is a member of the Board, who is not an Acquiring Person or an Affiliate or Associate of an Acquiring Person, or a representative of an Acquiring Person or of any such Affiliate or Associate, and who (A) was a member of the Board on the date of the applicable Award Agreement or (B) subsequently becomes a member of the Board, if such persons initial nomination for election or initial election to the Board is recommended or approved by a majority of the Continuing Directors. For purposes of this definition, Affiliate and Associate shall have the respective meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act.
(l) Director shall mean a member of the Board.
(m) Dividend Equivalent shall mean any right granted under Section 5(d) of the Plan.
(n) Exchange Act shall mean the Securities and Exchange Act of 1934, as amended.
(o) Fair Market Value shall mean, with respect to any property (including, without limitation, any Shares or other securities), the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee. Notwithstanding the foregoing, unless otherwise determined by the Committee, the Fair Market Value of Shares on a given
A-2
date for purposes of the Plan shall be the closing sale price of the Shares as reported on the NASDAQ Global Select Market on such date or, if such market is not open for trading on such date, on the most recent preceding date when such market is open for trading.
(p) Non-Employee Director shall mean a Director who is not also an employee of the Company or an Affiliate.
(q) Option shall mean an option granted under Section 5(a) of the Plan that is not intended to meet the requirements of Section 422 of the Code or any successor provision.
(r) Other Stock-Based Award shall mean any right granted under Section 5(f) of the Plan.
(s) Participant shall mean a Non-Employee Director granted an Award under the Plan.
(t) Person shall mean any individual or entity, including a corporation, partnership, limited liability company, association, joint venture or trust.
(u) Plan shall mean this Apogee Enterprises, Inc. 2009 Non-Employee Director Stock Incentive Plan, as amended from time to time.
(v) Restricted Stock shall mean any Share granted under Section 5(c) of the Plan.
(w) Restricted Stock Unit shall mean any unit granted under Section 5(c) of the Plan evidencing the right to receive a Share (or a cash payment equal to the Fair Market Value of a Share) at some future date.
(x) Rule 16b-3 shall mean Rule 16b-3 promulgated by the Securities and Exchange Commission under the Exchange Act or any successor rule or regulation.
(y) Section 409A shall mean Section 409A of the Code, or any successor provision, and applicable Treasury Regulations and other applicable guidance thereunder.
(z) Shares shall mean shares of Common Stock or such other securities or property as may become subject to Awards pursuant to an adjustment made under Section 4(c) of the Plan.
(aa) Stock Appreciation Right shall mean any right granted under Section 5(b) of the Plan.
(bb) Stock Award shall mean any Share granted under Section 5(e) of the Plan.
(cc) 2002 Plan shall mean the Apogee Enterprises, Inc. Amended and Restated 2002 Omnibus Stock Incentive Plan, as amended from time to time.
Section 3. | Administration. |
(a) Power and Authority of the Committee. The Plan shall be administered by the Committee. Subject to the express provisions of the Plan and to applicable law, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to each Participant under the Plan; (iii) determine the number of Shares to be covered by (or the method by which payments or other rights are to be calculated in connection with) each Award; (iv) determine the terms and conditions of any Award or Award Agreement, including any terms relating to the forfeiture of any Award and the forfeiture, recapture or disgorgement of any cash, Shares, other
A-3
securities, other Awards, other property and other amounts payable with respect to any Award; (v) amend the terms and conditions of any Award or Award Agreement; (vi) accelerate the exercisability of any Award or the lapse of restrictions relating to any Award; (vii) determine whether, to what extent and under what circumstances Awards may be exercised in cash, Shares, other securities, other Awards or other property, or cancelled, forfeited or suspended; (viii) determine whether, to what extent and under what circumstances cash, Shares, other securities, other Awards, other property and other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder of the Award or the Committee; (ix) interpret and administer the Plan and any instrument or agreement, including any Award Agreement, relating to the Plan; (x) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (xi) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions under or with respect to the Plan or any Award or Award Agreement shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon any Participant, any holder or beneficiary of any Award or Award Agreement.
(b) Power and Authority of the Board. Notwithstanding anything to the contrary contained herein, the Board may, at any time and from time to time, without any further action of the Committee, exercise the powers and duties of the Committee under the Plan.
Section 4. | Shares Available for Awards. |
(a) Shares Available. Subject to adjustment as provided in Section 4(c) of the Plan, the aggregate number of Shares that may be issued under all Awards under the Plan shall be 350,000.
(b) Counting Shares. For purposes of this Section 4, if an Award entitles the holder thereof to receive or purchase Shares, the number of Shares covered by such Award or to which such Award relates shall be counted on the date of grant of such Award against the aggregate number of Shares available for granting Awards under the Plan. For purposes of determining the number of Shares covered on the date of grant by a Stock Appreciation Right that is to be settled in Shares, the aggregate number of Shares with respect to which the Stock Appreciation Right is to be exercised shall be counted against the number of Shares available for Awards under the Plan (without regard to the number of actual Shares issued upon settlement). Notwithstanding the foregoing, the following special rules shall apply with respect to share counting under the Plan:
(i) If any Shares covered by an Award or to which an Award relates are not purchased or are forfeited or are reacquired by the Company (including shares of Restricted Stock, whether or not dividends have been paid on such shares), or if an Award otherwise terminates or is cancelled without delivery of any Shares, then the number of Shares counted pursuant to Section 4(b) of the Plan against the aggregate number of Shares available under the Plan with respect to such Award, to the extent of any such forfeiture, reacquisition by the Company, termination or cancellation, shall again be available for granting Awards under the Plan.
(ii) Notwithstanding anything to the contrary in this Section 4(a), the following Shares will not again become available for issuance under the Plan: (A) any Shares which would have been issued upon any exercise of an Option but for the fact that the exercise price was paid by a net exercise permitted under the Award Agreement or any Shares tendered in payment of the exercise price of an Option; (B) any Shares withheld by the Company or Shares tendered to satisfy any tax withholding obligation with respect to an Option or Stock Appreciation Right; (C) Shares covered by a Stock Appreciation Right issued under the Plan that are not issued in connection with settlement in Shares upon exercise; or (D) Shares that are repurchased by the Company using Option exercise proceeds.
A-4
(iii) Awards that do not entitle the holder thereof to receive or purchase Shares and Awards that are settled in cash shall not be counted against the aggregate number of Shares available for Awards under the Plan.
(c) Adjustments. In the event that any dividend (other than a regular cash dividend) or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company or other similar corporate transaction or event affects the Shares such that an adjustment is necessary in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it deems equitable, adjust any or all of (i) the number and type of Shares (or other securities or other property) which thereafter may be made the subject of Awards, (ii) the number and type of Shares (or other securities or other property) subject to outstanding Awards and (iii) the purchase or exercise price with respect to any Award; provided, however, that the number of Shares covered by any Award or to which such Award relates shall always be a whole number. Such adjustment shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive.
Section 5. | Awards. |
(a) Options. The Committee is hereby authorized to grant Options to Non-Employee Directors with the following terms and conditions and with such additional terms and conditions not inconsistent with the provisions of the Plan as the Committee shall determine:
(i) Exercise Price. The purchase price per Share purchasable under an Option shall be determined by the Committee; provided, however, that such purchase price shall not be less than 100% of the Fair Market Value of a Share on the date of grant of such Option.
(ii) Option Term. The term of each Option shall be fixed by the Committee but shall not be longer than 10 years from the date of grant (except where the exercise of the Option is suspended not more than 30 days because the exercise would otherwise violate applicable law).
(iii) Time and Method of Exercise. The Committee shall determine the time or times at which an Option may be exercised in whole or in part. The minimum vesting period of Options shall be three years from the date of grant, unless vesting of the Option is conditioned on performance of the Company or an Affiliate or on personal performance (other than continued service with the Company or an Affiliate), in which case the minimum vesting period of Options shall be at least one year from the date of grant. Notwithstanding the foregoing, the Committee may permit acceleration of vesting of Options in the event of the Participants death, disability or retirement or a change in control of the Company. The Committee shall also determine the method or methods by which, and the form or forms (including, without limitation, cash, Shares, other securities, other Awards or other property, or any combination thereof, having a Fair Market Value on the exercise date equal to the applicable exercise price) in which, payment of the exercise price with respect thereto may be made or deemed to have been made.
(b) Stock Appreciation Rights. The Committee is hereby authorized to grant Stock Appreciation Rights to Non-Employee Directors subject to the terms of the Plan and any applicable Award Agreement. A Stock Appreciation Right granted under the Plan shall confer on the holder thereof a right to receive upon exercise thereof the excess of (i) the Fair Market Value of one Share on the date of exercise (or, if the Committee shall so determine, at any time during a specified period before or after the date of exercise) over (ii) the grant price of the Stock Appreciation Right as specified by the Committee, which price shall not be less than 100% of the Fair Market Value of one Share on the date of grant of the Stock Appreciation Right. Subject to the terms of the Plan and any applicable Award Agreement, the grant price, term, methods of exercise, dates of exercise, methods of settlement and any other terms and conditions of any Stock Appreciation Right shall be as determined by the Committee (except that the term
A-5
of each Stock Appreciation Right shall be subject to the term limitation in Section 5(a)(ii) applicable to Options). The Committee may impose such conditions or restrictions on the exercise of any Stock Appreciation Right as it may deem appropriate.
(c) Restricted Stock and Restricted Stock Units. The Committee is hereby authorized to grant Awards of Restricted Stock and Restricted Stock Units to Non-Employee Directors with the following terms and conditions and with such additional terms and conditions not inconsistent with the provisions of the Plan as the Committee shall determine:
(i) Restrictions. Shares of Restricted Stock and Restricted Stock Units shall be subject to such restrictions as the Committee may impose (including, without limitation, any limitation on the right to vote a Share of Restricted Stock or the right to receive any dividend or other right or property with respect thereto), which restrictions may lapse separately or in combination at such time or times or upon achievement of established performance goals, in such installments or otherwise as the Committee may deem appropriate. Such Awards shall vest, in installments or otherwise, over at least a three-year period from the date of grant, unless the Award is conditioned on performance of the Company or an Affiliate or on personal performance (other than continued service with the Company or an Affiliate), in which case the minimum vesting period of such Award shall be at least one year from the date of grant; provided, however, that the Committee may permit acceleration of vesting of such Awards in the event of the Participants death, disability or retirement or a change in control of the Company. Notwithstanding the foregoing, rights to dividend or Dividend Equivalent payments shall be subject to the limitations described in Section 5(d).
(ii) Issuance and Delivery of Shares. Any Restricted Stock granted under the Plan shall be issued at the time such Awards are granted and may be evidenced in such manner as the Committee may deem appropriate, including book-entry registration or issuance of a stock certificate or certificates, which certificate or certificates shall be held by the Company. Such certificate or certificates shall be registered in the name of the Participant and shall bear an appropriate legend referring to the restrictions applicable to such Restricted Stock. Shares representing Restricted Stock that is no longer subject to restrictions shall be delivered to the Participant promptly after the applicable restrictions lapse or are waived. In the case of Restricted Stock Units, no Shares shall be issued at the time such Awards are granted. Upon the lapse or waiver of restrictions and the restricted period relating to Restricted Stock Units evidencing the right to receive Shares, such Shares shall be issued and delivered to the holder of the Restricted Stock Units.
(iii) Forfeiture. Except as otherwise determined by the Committee, upon a Participants resignation or removal as a Director (in either case, as determined by the Committee) during the applicable restriction period, all Shares of Restricted Stock and all Restricted Stock Units held by the Participant at such time shall be forfeited and reacquired by the Company; provided, however, that the Committee may, when it finds that a waiver would be in the best interest of the Company, waive in whole or in part any or all remaining restrictions with respect to Shares of Restricted Stock or Restricted Stock Units.
(d) Dividend Equivalents. The Committee is hereby authorized to grant Dividend Equivalents to a Participant under which the Participant shall be entitled to receive payments (in cash, Shares, other securities, other Awards or other property as determined in the discretion of the Committee) equivalent to the amount of cash dividends paid by the Company to holders of Shares with respect to a number of Shares determined by the Committee. Subject to the terms of the Plan and any applicable Award Agreement, such Dividend Equivalents may have such terms and conditions as the Committee shall determine. Notwithstanding the foregoing, (i) the Committee may not grant Dividend Equivalents to Participants in connection with grants of Options or Stock Appreciation Rights to such Participants, and (ii) no dividend or Dividend Equivalent payments shall be made to a Participant with respect to any Award subject to performance-based vesting conditions prior to the date on which all conditions or restrictions relating to such Award (or portion thereof to which the dividend or Dividend Equivalent relates) have been satisfied, waived or lapsed.
A-6
(e) Stock Awards. The Committee is hereby authorized to grant to Non-Employee Directors Shares without restrictions thereon, as deemed by the Committee to be consistent with the purpose of the Plan. Subject to the terms of the Plan and any applicable Award Agreement, such Stock Awards may have such terms and conditions as the Committee shall determine.
(f) Other Stock-Based Awards. The Committee is hereby authorized to grant to Non-Employee Directors such other Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares), as are deemed by the Committee to be consistent with the purpose of the Plan. The Committee shall determine the terms and conditions of such Awards, subject to the terms of the Plan and the Award Agreement. Shares, or other securities delivered pursuant to a purchase right granted under this Section 5(g), shall be purchased for consideration having a value equal to at least 100% of the Fair Market Value of such Shares or other securities on the date the purchase right is granted. The consideration paid by the Participant may be paid by such method or methods and in such form or forms (including, without limitation, cash, Shares, other securities, other Awards or other property, or any combination thereof), as the Committee shall determine.
(g) General.
(i) Consideration for Awards. Awards may be granted for no cash consideration or for any cash or other consideration as may be determined by the Committee or required by applicable law.
(ii) Awards May Be Granted Separately or Together. Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with or in substitution for any other Award or any award granted under any other plan of the Company or any Affiliate. Awards granted in addition to or in tandem with other Awards or in addition to or in tandem with awards granted under any other plan of the Company or any Affiliate may be granted either at the same time as or at a different time from the grant of such other Awards or awards.
(iii) Forms of Payment under Awards. Subject to the terms of the Plan and of any applicable Award Agreement, payments or transfers to be made by the Company or an Affiliate upon the grant, exercise or payment of an Award may be made in such form or forms as the Committee shall determine (including, without limitation, cash, Shares, other securities, other Awards or other property, or any combination thereof), and may be made in a single payment or transfer, in installments or on a deferred basis, in each case in accordance with rules and procedures established by the Committee. Such rules and procedures may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents with respect to installment or deferred payments.
(iv) Term of Awards. The term of each Award shall be for a period not longer than 10 years from the date of grant (except where the exercise of the Option is tolled not more than 30 days because the exercise would otherwise violate applicable law).
(v) Limits on Transfer of Awards. Except as otherwise provided in this Section 5(g)(v), no Award (other than fully vested and unrestricted Shares issued pursuant to any Award) and no right under any such Award shall be transferable by a Participant other than by will or by the laws of descent and distribution, and no Award (other than fully vested and unrestricted Shares issued pursuant to any Award) or right under any such Award may be pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation, attachment or encumbrance thereof shall be void and unenforceable against the Company or any Affiliate. Each Award under the Plan or right under any such Award shall be exercisable during the Participants lifetime only by the Participant (except as provided herein or in an Award Agreement or amendment thereto relating to an Option) or, if permissible under applicable law, by the Participants guardian or legal representative. The Committee may establish procedures as it deems appropriate for a Participant to designate a Person or Persons, as beneficiary or beneficiaries, to exercise the rights of the Participant and receive any property distributable with respect
A-7
to any Award in the event of the Participants death. Notwithstanding the foregoing, the Committee, in its discretion and subject to such additional terms and conditions as it determines, may permit a Participant to transfer an Option to any family member (as such term is defined in the General Instructions to Form S-8 (or any successor to such Instructions or such Form) under the Securities Act of 1933, as amended) at any time that such Participant holds such Option, provided that such transfers may not be for value (i.e., the transferor may not receive any consideration therefor) and the family member may not make any subsequent transfers other than by will or by the laws of descent and distribution.
(vi) Restrictions; Securities Exchange Listing. All Shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such restrictions as the Committee may deem advisable under the Plan, applicable federal or state securities laws and regulatory requirements, and the Committee may cause appropriate entries to be made or legends to be placed on the certificates for such Shares or other securities to reflect such restrictions. If the Shares or other securities are traded on a securities exchange, the Company shall not be required to deliver any Shares or other securities covered by an Award unless and until such Shares or other securities have been admitted for trading on such securities exchange.
(vii) Prohibition on Option and Stock Appreciation Right Repricing. Except as provided in Section 4(c) hereof, the Committee may not, without prior approval of the Companys shareholders, seek to effect any re-pricing of any previously granted underwater Option or Stock Appreciation Right by: (i) amending or modifying the terms of the Option or Stock Appreciation Right to lower the exercise price; (ii) canceling the underwater Option or Stock Appreciation Right and granting either (A) replacement Options or Stock Appreciation Rights having a lower exercise price; or (B) Restricted Stock, Restricted Stock Units, Stock Awards or Other Stock-Based Awards in exchange; or (iii) cancelling or repurchasing the underwater Options or Stock Appreciation Rights for cash or other securities. An Option or Stock Appreciation Right will be deemed to be underwater at any time when the Fair Market Value of the Shares covered by such Award is less than the exercise price of the Award.
(viii) Section 409A Provisions. Notwithstanding anything in the Plan or any Award Agreement to the contrary, to the extent that any amount or benefit that constitutes deferred compensation to a Participant under Section 409A of the Code and applicable guidance thereunder is otherwise payable or distributable to a Participant under the Plan or any Award Agreement solely by reason of the occurrence of a Change in Control or due to the Participants disability or separation from service, such amount or benefit will not be payable or distributable to the Participant by reason of such circumstance unless the Committee determines in good faith that (i) the circumstances giving rise to such Change in Control, disability or separation from service meet the definition of a change in ownership or control, disability, or separation from service, as the case may be, in Section 409A(a)(2)(A) of the Code and applicable proposed or final regulations, or (ii) the payment or distribution of such amount or benefit would be exempt from the application of Section 409A by reason of the short-term deferral exemption or otherwise. For purposes of this paragraph, a separation from service shall mean a complete severance for any reason of a Directors relationship as a Director and/or independent contractor of the Company and any Affiliates. A Director may have a separation from service upon resignation as a Director even if the Director then becomes an officer or employee of the Company or an Affiliate. In all events, separation from service shall be construed to have a meaning consistent with the term separation from service as used and defined in Section 409A of the Code.
Section 6. | Amendment and Termination; Corrections. |
(a) Amendments to the Plan. The Board may amend, alter, suspend, discontinue or terminate the Plan at any time; provided, however, that, notwithstanding any other provision of the Plan or any Award Agreement, prior approval of the shareholders of the Company shall be required for any amendment to the Plan that:
(i) requires shareholder approval under the rules or regulations of the Securities and Exchange Commission, the NASDAQ Global Select Market or any other securities exchange that are applicable to the Company;
A-8
(ii) increases the number of shares authorized under the Plan as specified in Section 4(a) of the Plan;
(iii) permits repricing of Options or Stock Appreciation Rights which is prohibited by Section 5(g)(vii) of the Plan; and
(iv) permits the award of Options or Stock Appreciation Rights at a price less than 100% of the Fair Market Value of a Share on the date of grant of such Option or Stock Appreciation Right, contrary to the provisions of Sections 5(a)(i) and 5(b) of the Plan.
(b) Amendments to Awards. Subject to the provisions of the Plan, the Committee may waive any conditions of or rights of the Company under any outstanding Award, prospectively or retroactively. Except as otherwise provided in the Plan, the Committee may amend, alter, suspend, discontinue or terminate any outstanding Award, prospectively or retroactively, but no such action may adversely affect the rights of the holder of such Award without the consent of the Participant or holder or beneficiary thereof. The Company intends that Awards under the Plan shall satisfy the requirements of Section 409A to avoid any adverse tax results thereunder, and the Committee shall administer and interpret the Plan and all Award Agreements in a manner consistent with that intent. If any provision of the Plan or an Award Agreement would result in adverse tax consequences under Section 409A, the Committee may amend that provision (or take any other action reasonably necessary) to avoid any adverse tax results and no action taken to comply with Section 409A shall be deemed to impair or otherwise adversely affect the rights of any holder of an Award or beneficiary thereof.
(c) Correction of Defects, Omissions and Inconsistencies. The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award or Award Agreement in the manner and to the extent it shall deem desirable to implement or maintain the effectiveness of the Plan.
Section 7. | General Provisions. |
(a) No Rights to Awards. No Non-Employee Director, Participant or other Person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Non-Employee Directors, Participants or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to any Participant or with respect to different Participants.
(b) Award Agreements. No Participant shall have rights under an Award granted to such Participant unless and until an Award Agreement shall have been duly executed on behalf of the Company and, if requested by the Company, signed by the Participant, or until such Award Agreement is delivered and accepted through any electronic medium in accordance with procedures established by the Company.
(c) No Rights of Shareholders. Except with respect to Restricted Stock and Stock Awards, neither a Participant nor the Participants legal representative shall be, or have any of the rights and privileges of, a shareholder of the Company with respect to any Shares issuable upon the exercise or payment of any Award, in whole or in part, unless and until the Shares have been issued.
(d) No Limit on Other Compensation Plans or Arrangements. Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other or additional compensation plans or arrangements, and such plans or arrangements may be either generally applicable or applicable only in specific cases.
(e) No Right to Directorship. The grant of an Award shall not be construed as giving a Participant the right to be retained as a Director.
A-9
(f) Governing Law. The validity, construction and effect of the Plan or any Award, and any rules and regulations relating to the Plan or any Award, shall be determined in accordance with the laws of the State of Minnesota.
(g) Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction or Award, and the remainder of the Plan or any such Award shall remain in full force and effect.
(h) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Affiliate.
(i) No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash shall be paid in lieu of any fractional Share or whether such fractional Share or any rights thereto shall be cancelled, terminated or otherwise eliminated.
(j) Headings. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.
(k) Other Benefits. No compensation or benefit awarded to or realized by any Participant under the Plan shall be included for the purpose of computing such Participants compensation under any compensation-based retirement, disability, or similar plan of the Company unless required by law or otherwise provided by such other plan.
Section 8. | Effective Date of the Plan; Effect on 2002 Plan. |
The Plan was approved by the shareholders of the Company at the 2009 Annual Meeting of Shareholders held on June 24, 2009 and the Plan was first effective as of the date of such shareholder approval. On and after the date of shareholder approval of the Plan, grants to Non-Employee Directors were discontinued under the 2002 Plan, and all grants to Non-Employee Directors on or after the date of shareholder approval of the Plan have been, and shall continue to be, made solely under the Plan. All grants previously made to Non-Employee Directors under the 2002 Plan shall continue to be governed by the terms and conditions of the 2002 Plan and any award agreements entered into thereunder.
Section 9. | Term of the Plan. |
The Plan shall terminate at midnight on June 23, 2019, unless terminated before then by the Board. Awards may be granted under the Plan until the earlier to occur of termination of the Plan or the date on which all Shares available for Awards under the Plan have been purchased or acquired. As long as any Awards are outstanding under the Plan, the terms of the Plan shall govern such Awards.
Adopted by Board May 7, 2009, subject to and effective upon shareholder approval
Approved by shareholders on June 24, 2009
Amended by Board April 27, 2011, subject to and effective upon shareholder approval
Amended and Restated by Board April 30, 2014, subject to and effective upon shareholder approval
A-10
APOGEE ENTERPRISES, INC.
DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
(2014 Restatement)
Section 1. | Establishment and Purpose. |
(a) Establishment. Apogee Enterprises, Inc., a Minnesota corporation, together with any and all subsidiaries established effective as of January 31, 1998, a deferred compensation plan for the non-employee members of its Board which shall be known as the Deferred Compensation Plan for Non-Employee Directors (hereinafter called the Plan). Apogee reserved to itself, by action of the Compensation Committee of the Board of Directors, to amend this Plan and has done so on prior occasions. By the adoption of this 2014 Restatement, Apogee does hereby completely amend and restate the terms of the Plan in this Plan Statement.
(b) Purpose. The purpose of this Plan is to provide a means whereby amounts payable by the Company to its Non-Employee Directors for services as a member of the Companys Board may be deferred to some future period. It is also the purpose of this Plan to motivate such Non-Employee Directors to continue to make contributions to the growth and profits of the Company and to increase their ownership of shares of Common Stock, and thereby align their interests in the long-term success of the Company with that of the other shareholders. This will be accomplished by allowing each Participating Director to elect voluntarily to receive all or a portion of his or her retainer and fees in the form of shares of deferred Common Stock pursuant to an irrevocable election made under this Plan.
Section 2. | Definitions. |
(a) Definitions. When the following terms are used herein with initial capital letters, they shall have the following meanings:
(i) Board shall mean the Board of Directors of the Company.
(ii) Committee shall mean the Nominating and Corporate Governance Committee of the Board or any successor committee of the Board designated by the Board to administer the Plan. The Committee shall be comprised of not less than such number of Directors as shall be required to permit Awards granted under the Plan to qualify under Rule 16b-3, and each member of the Committee shall be a Non-Employee Director within the meaning of Rule 16b-3.
(iii) Common Stock shall mean the common stock, par value $0.33 1/3 per share, of Apogee Enterprises, Inc.
(iv) Company shall mean Apogee Enterprises, Inc., a Minnesota corporation, together with all its subsidiaries.
(v) Deferral Election Form shall mean the irrevocable election to defer the receipt of Fees and Retainer as provided for in Section 4(c) of this Plan.
(vi) Deferred Payment Form shall mean the irrevocable payment election of the Participants Deferred Stock Account.
(vii) Deferred Stock Account shall mean the account established pursuant to Section 4(b) of this Plan.
(viii) Election Amount shall mean the amount of the Retainer and Fees the Participating Director elects to defer as set forth in Section 4(a) of this Plan.
B-1
(ix) Eligible Director shall mean any Non-Employee Director of the Company as set forth in Section 3 of this Plan.
(x) Fair Market Value shall mean the value as set forth in Section 4(e) of this Plan.
(xi) Fees shall mean the amount payable to a Director for attendance at Board meetings or meetings of committees of the Board.
(xii) Maturity Date shall mean the date set forth in Section 6(a) of this Plan.
(xiii) Non-Employee Director shall mean an individual who is a member of the Board but who is not an employee of the Company or any of its subsidiaries.
(xiv) Participant shall mean a person who is a Non-Employee Director who has elected to defer such fees and retainers under this Plan, or a person who, prior to the time of Termination from Board 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.
(xv) Participating Director shall mean has the meaning set forth in Section 4(a).
(xvi) Plan shall mean this Deferred Compensation Plan, as it may be amended from time to time.
(xvii) Plan Year shall mean the 12-month period beginning January 1 and ending December 31. There was a short Plan Year from July 1-December 31, 2005. Plan Years prior to July 1, 2005, began on July 1 and ended June 30 of each year.
(xviii) Retainer shall mean the annual amount payable to a Director for services rendered as a Director.
(xix) Stock Deferral Election shall mean the election made pursuant to Section 4(a) of this Plan.
(xx) Termination from Board shall mean a Participants membership on the Board terminates under any circumstances. However when the term Termination from Board is used in the Plan Statement, it shall be construed to have the same meaning consistent with the term Separation from Service as used in section 409A of the Code.
(b) Gender and Number. Except when otherwise indicated by the context, any masculine terminology when used in the Plan shall also include the feminine gender, and the definition of any term herein in the singular shall also include the plural.
Section 3. | Eligibility for Participation. |
Any Non-Employee Director of the Company shall be eligible to participate in this Plan (an Eligible Director). In the event a Participant no longer meets the requirements for participation in this Plan, the Participant shall become an inactive Participant, retaining all the rights described under this Plan, except the right to make any further deferrals, until the time that the Participant again becomes an active Participant or receives a complete distribution of the Participants Deferred Stock Account.
B-2
Section 4. | Election to Defer Receipt of Retainer and Fees. |
(a) Election to Receive Common Stock at a Later Date in Lieu of Cash. On forms provided by the Company, each Eligible Director who decides to participate may irrevocably elect to defer receipt of cash equal to 25%, 50%, 75% or 100% of the sum of the annual Retainer and any Fees. The amounts to be deferred will be in the form of a Common Stock credit to the Participating Directors Deferred Stock Account, as set forth in Section 4(b) hereof, for the amount of the Retainer and Fees the Participating Director elects to defer. The Stock Deferral Election shall be made pursuant to Section 4(c). Any Stock Deferral Election may only be amended or revoked for a subsequent Plan Year, by completing a new Deferral Election Form and filing it with the Company prior to the beginning of such Plan Year as provided in Section 4(c).
(b) Credits to Deferred Stock Account. Credits to each Participants Deferred Stock Account shall be made quarterly as of the last business day of each calendar quarter. The amount credited for each quarter shall include the Fees earned by the Participating Director for meetings attended during the calendar quarter and 25% of the amount of the annual Retainer for the applicable Plan Year for which the Participating Director chose to defer receipt of cash. The credit to the Deferred Stock Account shall be in the form of stock units in a number equal to the number of shares of Common Stock having a Fair Market Value, as defined in Section 4(e), equal to the amount of the Retainer and Fees so elected for deferral for the applicable quarter. Amounts credited to the Deferred Stock Accounts shall be rounded to the nearest one-hundredth share. In the event that a Participating Director elects to defer less than 100% of the Retainer and Fees in shares of Common Stock, he shall receive the balance of the payment in cash.
(c) Manner of Making Deferral Election. A Participating Director may elect to defer payment of the Retainer and payment of Fees pursuant to this Plan by filing, at any time prior to the beginning of a Plan Year (or by such earlier date as the Administrative Committee shall determine), an irrevocable election with the Company on a form provided for that purpose, except that any person who is first elected to the Board after the beginning of a Plan Year may make a Stock Deferral Election for that Plan Year within thirty (30) days of becoming eligible to participate in this Plan. The Deferral Election Form shall specify an amount to be deferred expressed as a percentage of the Participating Directors Retainer and Fees. In all circumstances, the first credit to a Participants Deferred Stock Account will only include the Retainer and Fees for services performed after the effective date of the Deferral Election Form.
(d) Dividend Credit. Each time a cash dividend is paid on the Common Stock of the Company, the Participating Director shall receive a credit of stock units to Participating Directors Deferred Stock Account as of the last business day of the calendar quarter in which the dividend was paid. The number of stock units credited shall be the number equal to that number of shares of Common Stock (rounded to the nearest one-hundredth of a share) having a Fair Market Value, as defined in Section 4(e), on the last business day of the applicable calendar quarter equal to the amount of the dividend that would have been payable on the number of shares of Common Stock equal to the number of stock units credited to the Participating Directors Deferred Stock Account on the dividend record date.
(e) Fair Market Value. For purposes of converting dollar amounts into shares of Common Stock, the Fair Market Value of each share of Common Stock shall be equal to the closing price of one share of the Common Stock on the NASDAQ Global Select Market (or other exchange on which the shares of Common Stock are then listed and primarily traded) on the applicable crediting date or payment date.
(f) Termination of Service as a Director. If a Participating Director leaves the Board before the conclusion of any calendar quarter, the Participating Director will be paid the quarterly installment of the Retainer and Fees entirely in cash, notwithstanding that a Stock Deferral Election made by such Participating Director is on file with the Company. The date of termination of a Participating Directors service as a Director of the Company will be deemed to be the date of termination recorded on the personnel or other records of the Company.
B-3
Section 5. | Shares Available for Issuance. |
(a) Maximum Number of Shares Available. The maximum number of shares of Common Stock that will be available for issuance under this Plan will be 255,000 shares, subject to any adjustments made in accordance with the provisions of Section 5(b). The shares of Common Stock available for issuance under this Plan shall be authorized but unissued shares.
(b) Adjustments to Shares. In the event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, divestiture or extraordinary dividend, an appropriate adjustment will be made in the number and/or kind of securities available for issuance under this Plan to prevent either the dilution or the enlargement of the rights of the Eligible Directors and Participating Directors.
Section 6. | Deferral Payment and Issuance of Common Stock. |
(a) Maturity of Deferred Stock Account. A Participants account shall become payable to (or with respect to) a Participant upon the earliest of, or upon the occurrence of, one of the following events (the Maturity Date), as elected by the Participant in the Deferral Election Form:
(i) The Participants Termination from Board,
(ii) A date selected by the Participant,
(iii) The Participant reaches seventy (70) years of age, or
(iv) The Participants death.
(b) Form of Deferral Payment. At the time of making the Stock Deferral Election, each Participating Director shall also complete a deferral payment election specifying one of the payment options described in Sections 6(c) and (d), and an election pursuant to Section 6(a) for the Maturity Date. The deferral payment election shall be irrevocable as to all amounts credited to the Participating Directors Deferred Stock Account. The Participating Director may change the deferral payment election by completing a Deferred Payment Form and filing it with the Company, such change will only apply to deferrals credited in a subsequent Plan Year.
(c) Payment of Deferred Stock Accounts in a Lump Sum. Unless a Participating Director elects to receive payment of the Participating Directors Deferred Stock Account in installments as described in Section 6(d), credits to a Participating Directors Deferred Stock Account shall be payable in full on the first business day of the calendar year following the Maturity Date. If the provisions of Section 7 become applicable and a Participating Directors designated beneficiary or beneficiaries are entitled to receive payment, such distributions shall, in all cases, be made in a lump sum in accordance with this Section and not Section 6(d) of this Plan. All payments shall be made in shares of Common Stock, with one share of Common Stock issued for each stock unit credited to the Participating Directors Deferred Stock Account, plus cash in lieu of any fractional share.
(d) Payment of Deferred Stock Accounts in Installments. A Participating Director may elect to have the Participating Directors Deferred Stock Account paid in annual installments following the Maturity Date. All payments shall be made in shares of Common Stock, with one share of Common Stock issued for each stock unit credited to the Participating Directors Deferred Stock Account, plus cash in lieu of any fractional share. All installment payments shall be made annually beginning on the first business day of the calendar year following the Maturity Date, with subsequent installments paid on the first business day of each subsequent calendar year. The amount of each installment payment shall be computed as the number of stock units credited to the Participating Directors Deferred Stock Account on the relevant installment payment date, multiplied by a fraction, the numerator of which is one and the denominator of which is the total number of installments elected (not to exceed 10) minus the
B-4
number of installments previously paid. Amounts paid prior to the final installment payment shall be rounded to the nearest whole number of shares; the final installment payment shall be for the whole number of stock units then credited to the Participating Directors Deferred Stock Account, together with cash in lieu of any fractional share.
(e) Payment of Deferred Stock Accounts Change in Control. Notwithstanding Sections 6(c) and (d), in the event of a Change in Control (as defined in Section 12), credits to a Participating Directors Deferred Stock Account immediately prior to the effective time of the transaction constituting the Change in Control shall be paid in full to the Participating Director or the Participating Directors beneficiary or estate, as the case may be, either in whole shares of Common Stock (together with cash in lieu of a fractional share) or, if the holders of Common Stock generally are to receive other consideration in such Change in Control transaction, in the consideration per share of Common Stock to be received by such holders of Common Stock, in either case, on the business day immediately after the effective date of the transaction.
Section 7. | Designation of Beneficiaries. |
(a) Right to Designate. Each Participant may designate, upon forms to be furnished by and filed with the Plan Administrator, one or more primary Beneficiaries or alternative Beneficiaries to receive all or a specified part of such Participants Deferred Stock Account in the event of such Participants death. The Participant may change or revoke any such designation from time to time without notice to or consent from any Beneficiary. No such designation, change or revocation shall be effective unless executed by the Participant and received by the Company during the Participants lifetime.
(b) Failure of Designation. If a Participant:
(i) fails to designate a Beneficiary,
(ii) designates a Beneficiary and thereafter revokes such designation without naming another Beneficiary, or
(iii) designates one or more Beneficiaries and all such Beneficiaries so designated fail to survive the Participant,
such Participants Deferred Stock Account, or the part thereof as to which such Participants designation fails, as the case may be, shall be payable to the first class of the following classes of automatic Beneficiaries with a member surviving the Participant and (except in the case of surviving issue) in equal shares if there is more than one member in such class surviving the Participant:
Participants surviving spouse
Participants surviving issue per stirpes and not per capita
Participants surviving parents
Participants surviving brothers and sisters
Representative of Participants estate.
(c) Disclaimers by Beneficiaries. A Beneficiary entitled to a distribution of all or a portion of a deceased Participants Deferred Stock Account may disclaim an interest therein subject to the following requirements. To be eligible to disclaim, a Beneficiary must be a natural person, must not have received a distribution of all or any portion of the Deferred Stock Account at the time such disclaimer is executed and delivered, and must have attained at least age twenty-one (21) years as of the date of the Participants death. Any disclaimer must be in writing and must be executed personally by the Beneficiary before a notary public. A disclaimer shall state that the Beneficiarys entire interest in the undistributed Deferred Stock Account is disclaimed or shall specify what portion thereof is disclaimed. To be effective, duplicate original executed copies of the disclaimer must be both executed and actually
B-5
delivered to the Company after the date of the Participants death but not later than one hundred eighty (180) days after the date of the Participants death. A disclaimer shall be irrevocable when delivered to the Company. A disclaimer shall be considered to be delivered to the Company only when actually received by the Company. The Company shall be the sole judge of the content, interpretation and validity of a purported disclaimer. Upon the filing of a valid disclaimer, the Beneficiary shall be considered not to have survived the Participant as to the interest disclaimed. A disclaimer by a Beneficiary shall not be considered to be a transfer of an interest in violation of the provisions of Section 8 and shall not be considered to be an assignment or alienation of benefits in violation of federal law prohibiting the assignment or alienation of benefits under this Plan. No other form of attempted disclaimer shall be recognized by the Company.
(d) Definitions. When used herein and, unless the Participant has otherwise specified in the Participants Beneficiary designation, when used in a Beneficiary designation, issue means all persons who are lineal descendants of the person whose issue are referred to, including legally adopted descendants and their descendants but not including illegitimate descendants and their descendants; child means an issue of the first generation; per stirpes means in equal shares among living children of the person whose issue are referred to and the issue (taken collectively) of each deceased child of such person, with such issue taking by right of representation of such deceased child; and survive and surviving mean living after the death of the Participant.
(e) Special Rules. Unless the Participant has otherwise specified in the Participants Beneficiary designation, the following rules shall apply:
(i) If there is not sufficient evidence that a Beneficiary was living at the time of the death of the Participant, it shall be deemed that the Beneficiary was not living at the time of the death of the Participant.
(ii) The automatic Beneficiaries specified in Section 7(b) and the Beneficiaries designated by the Participant shall become fixed at the time of the Participants death so that, if a Beneficiary survives the Participant but dies before the receipt of all payments due such Beneficiary hereunder, such remaining payments shall be payable to the representative of such Beneficiarys estate.
(iii) If the Participant designates as a Beneficiary the person who is the Participants spouse on the date of the designation, either by name or by relationship, or both, the dissolution, annulment or other legal termination of the marriage between the Participant and such person shall automatically revoke such designation. (The foregoing shall not prevent the Participant from designating a former spouse as a Beneficiary on a form executed by the Participant and received by the Plan Administrator after the date of the legal termination of the marriage between the Participant and such former spouse, and during the Participants lifetime.)
(iv) Any designation of a nonspouse Beneficiary by name that is accompanied by a description of relationship to the Participant shall be given effect without regard to whether the relationship to the Participant exists either then or at the Participants death.
(v) Any designation of a Beneficiary only by statement of relationship to the Participant shall be effective only to designate the person or persons standing in such relationship to the Participant at the Participants death.
A Beneficiary designation is permanently void if it either is executed or is filed by a Participant who, at the time of such execution or filing, is then a minor under the law of the state of the Participants legal residence. The Company shall be the sole judge of the content, interpretation and validity of a purported Beneficiary designation.
B-6
(f) No Spousal Rights. Prior to the death of the Participant, no spouse or surviving spouse of a Participant and no person designated to be a Beneficiary shall have any rights or interest in the benefits credited under this Plan including, but not limited to, the right to be the sole Beneficiary or to consent to the designation of Beneficiaries (or the changing of designated Beneficiaries) by the Participant.
(g) Death Prior to Full Distribution. If, at the death of the Participant, any payment to the Participant was due or otherwise pending but not actually paid, the amount of such payment shall be included in the Deferred Stock Account which are payable to the Beneficiary (and shall not be paid to the Participants estate).
(h) Facility of Payment. In case of the legal disability, including minority, of a Participant or Beneficiary entitled to receive any distribution under this Plan, payment shall be made, if the Company shall be advised of the existence of such condition:
(i) to the duly appointed guardian, conservator or other legal representative of such Participant or Beneficiary, or
(ii) to a person or institution entrusted with the care or maintenance of the incompetent or disabled Participant or Beneficiary, provided such person or institution has satisfied the Company that the payment will be used for the best interest and assist in the care of such Participant or Beneficiary, and provided further, that no prior claim for said payment has been made by a duly appointed guardian, conservator or other legal representative of such Participant or Beneficiary.
Any payment made in accordance with the foregoing provisions of this Section shall constitute a complete discharge of any liability or obligation of the Company therefor.
Section 8. | Nontransferability. |
In no event shall the Company make any payment under this Plan to any assignee or creditor of a Participant or of a Beneficiary. Prior to the time of payment hereunder, a Participant or Beneficiary shall have no rights by way of anticipation or otherwise to assign or otherwise dispose of any interest under this Plan nor shall such rights be assigned or transferred by operation of the law.
Section 9. | Limitation on Rights of Eligible Directors and Participating Directors. |
(a) Service as a Director. Nothing in this Plan will interfere with or limit in any way the right of the Board or the Companys shareholders to remove an Eligible Director or Participating Director from the Board. Neither this Plan nor any action taken pursuant to it will constitute or be evidence of any agreement or understanding, express or implied, that the Board or the Companys shareholders have retained or will retain an Eligible Director or Participating Director for any period of time or at any particular rate of compensation.
(b) Nonexclusivity of the Plan. Nothing contained in this Plan is intended to effect, modify or rescind any of the Companys existing compensation plans or programs or to create any limitations on the Boards power or authority to modify or adopt compensation arrangements as the Board may from time to time deem necessary or desirable.
Section 10. | Plan Amendment, Modification and Termination. |
The Board may suspend or terminate this Plan at any time. The Board may amend this Plan from time to time in such respects as the Board may deem advisable in order that this Plan will conform to any change in applicable laws or regulations or in any other respect that the Board may deem to be in the Companys best interests; provided, however, that no amendments to this Plan will be effective without approval of the Companys shareholders, if shareholder approval of the amendment is
B-7
then required pursuant to Rule 16b-3 (or any successor rule) promulgated under the Securities Exchange Act of 1934, as amended, or the rules of the NASDAQ Global Select Market (or other exchange on which the shares of Common Stock are then listed and primarily traded). Following a termination of the Plan, Deferred Stock Accounts shall remain in the Plan until the Participant becomes eligible for the benefits under Section 6. The termination of the Plan shall not adversely affect any Participant or Beneficiary who has become entitled to the payment of any benefits under the Plan as of the date of termination. Notwithstanding the foregoing, to the extent permissible under section 409A of the Code and the related Treasury regulations and guidance, if there is a termination of the Plan with respect to all Participants, the Board shall have the right, in its sole discretion, and notwithstanding any elections made by the Participant, to immediately pay all benefits in a lump sum following such termination of the Plan.
Section 11. | Participants Are General Creditors of the Company. |
The Participating Directors and Beneficiaries thereof shall be general unsecured creditors of the Company with respect to any payments to be made pursuant to this Plan and shall not have any preferred interest by way of trust, escrow, lien or otherwise in any specific assets of the Company. If the Company shall, in fact, elect to set aside monies or other assets to meet its obligations hereunder (there being no obligation to do so), whether in a grantors trust or otherwise, the same shall, nevertheless, be regarded as a part of the general assets of the Company subject to the claims of its general creditors, and neither any Participating Director nor any Beneficiary thereof shall have a legal, beneficial or security interest therein.
Section 12. | Change in Control. |
(a) Change in Control. A Change in Control shall mean:
(i) a change in control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act), or successor provision thereto, whether or not the Company is then subject to such reporting requirement including, without limitation, any of the following events:
(A) the consummation of any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Companys Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Companys Common Stock immediately prior to the consolidation or merger have the same proportionate ownership of Common Stock of the surviving corporation immediately after the merger; or
(B) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company;
(ii) any person (as such term is used in sections 13(d) and 14(d) of the Exchange Act) is or becomes the Beneficial Owner (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 35% or more of the combined voting power of the Companys then outstanding securities;
(iii) the Continuing Directors (as defined in Section 12(b) hereof) cease to constitute a majority of the Companys Board; or
(iv) the majority of the Continuing Directors determine in their sole and absolute discretion that there has been a change in control of the Company.
Notwithstanding the foregoing, none of the foregoing event(s) shall constitute a Change in Control unless such event(s) constitute a Change in Control as defined in section 409A of the Code, any regulations and
B-8
other guidance in effect from time to time thereunder, including without limitation, Treasury Regulation § 1.409A-3(i)(5).
(b) Continuing Director. Continuing Director shall mean any person who is a member of the Board of the Company, who is not an Acquiring Person (as hereinafter defined) or an Affiliate or Associate (as hereinafter defined) of an Acquiring Person, or a representative of an Acquiring Person or of any such Affiliate or Associate, and who (a) was a member of the Board on the date, as of which this Plan first became effective or (b) subsequently becomes a member of the Board, if such persons initial nomination for election or initial election to the Board is recommended or approved by a majority of the Continuing Directors. For purposes of this Section 12(b): Acquiring Person shall mean any person (as such term is used in sections 13(d) and 14(d) of the Exchange Act) who or which, together with all Affiliates and Associates of such person, is the Beneficial Owner of 10% or more of the shares of Common Stock of the Company then outstanding, but shall not include the Company, any subsidiary of the Company or any executive benefit plan of the Company or of any subsidiary of the Company or any entity holding shares of Common Stock organized, appointed or established for, or pursuant to the terms of, any such plan; and Affiliate and Associate shall have the respective meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act.
Section 13. | Claims Procedure. |
Without limiting the generality of the following, an application for benefits under Section 3 shall be processed as a claim for the purposes of this Section.
(a) Original Claim. Any person may file with the Committee a written claim for benefits under this Plan. Within ninety (90) days after the filing of such a claim, the Committee shall notify the claimant in writing whether his or her claim is upheld or denied in whole or in part or shall furnish the claimant a written notice describing specific special circumstances requiring a specified amount of additional time (but not more than one hundred eighty days from the date the claim was filed) to reach a decision on the claim. If the claim is denied in whole or in part, the Committee shall state in writing:
(i) the specific reasons for the denial;
(ii) the specific references to the pertinent provisions of the Plan Statement on which the denial is based;
(iii) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and
(iv) an explanation of the claims review procedure set forth in this Section.
(b) Claims Review Procedure. Within sixty (60) days after receipt of notice that his or her claim has been denied in whole or in part, the claimant may file with the Committee a written request for a review and may, in conjunction therewith, submit written issues and comments. Within sixty (60) days after the filing of such a request for review, the Committee shall notify the claimant in writing whether, upon review, the claim was upheld or denied in whole or in part or shall furnish the claimant a written notice describing specific special circumstances requiring a specified amount of additional time (but not more than one hundred twenty days from the date the request for review was filed) to reach a decision on the request for review.
(c) General Rules.
(i) No inquiry or question shall be deemed to be a claim or a request for a review of a denied claim unless made in accordance with the claims procedure. The Committee may require that any claim for benefits and any request for a review of a denied claim be filed on forms to be furnished by the Committee upon request.
B-9
(ii) All decision on claims and on requests for a review of denied claims shall be made by the Committee.
(iii) The Committee may, in its discretion, hold one or more hearings on a claim or a request for a review of a denied claim.
(iv) Claimants may be represented by a lawyer or other representative (at their own expense), but the Committee reserves the right to require the claimant to furnish written authorization. A claimants representative shall be entitled to receive copies of notices sent to the claimant.
(v) The decision of the Committee on a claim and on a request for a review of a denied claim shall be served on the claimant in writing. If a decision or notice is not received by a claimant within the time specified, the claim or request for a review of a denied claim shall be deemed to have been denied.
(vi) Prior to filing a claim or a request for a review of a denied claim, the claimant or his or her representative shall have a reasonable opportunity to review a copy of the Plan Statement and all other pertinent documents in the possession of Apogee.
(vii) The Committee may permanently or temporarily delegate all or a portion of its authority and responsibility under this Section to another committee or to an individual.
(viii) The procedures and remedies herein are not exclusive. Subsequent to a Change in Control, a Participant or surviving spouse of a Participant shall not be required to exhaust these administrative remedies. If there is litigation regarding the benefits payable to or with respect to a Participant, then notwithstanding Section 7(d), determinations made by the Committee subsequent to a Change in Control (even if such determinations relate to events occurring wholly or partially before the Change in Control) shall not be afforded any deference and the matter shall be heard de novo.
(ix) If any Participant successfully litigates, in whole or in part, any claim for benefits under this Plan, the court shall award reasonable attorneys fees and costs of the action to the Participant.
Section 14. | Miscellaneous. |
(a) Securities Law and Other Restrictions. Notwithstanding any other provision of this Plan or any Stock Deferral Election delivered pursuant to this Plan, the Company will not be required to issue any shares of Common Stock under this Plan and a Participating Director may not sell, assign, transfer or otherwise dispose of shares of Common Stock issued pursuant to this Plan, unless (a) there is in effect with respect to such shares a registration statement under the Securities Act of 1933, as amended (the Securities Act) and any applicable state securities laws or an exemption from such registration under the Securities Act and applicable state securities laws, and (b) there has been obtained any other consent, approval or permit from any other regulatory body that the Company deems necessary or advisable. The Company may condition such issuance, sale or transfer upon the receipt of any representations or agreements from the parties involved, and the placement of any legends on certificates representing shares of Common Stock, as may be deemed necessary or advisable by the Company, in order to comply with such securities law or other restriction.
(b) Governing Law. The validity, construction, interpretation, administration and effect of this Plan and any rules, regulations and actions relating to this Plan will be governed by and construed exclusively in accordance with the laws of the State of Minnesota.
(c) Service of Process. In the absence of any designation to the contrary by the Company, the Secretary of the Company is designated as the appropriate and exclusive agent for the
B-10
receipt of service of process directed to this Plan in any legal proceeding including arbitration, involving this Plan.
(d) Administrative Determinations. The Committee shall make such determinations as may be required from time to time in the administration of this Plan. The Committee shall have the discretionary authority and responsibility to interpret and construe the Plan Statement and to determine all factual and legal questions under this Plan, including but not limited to the entitlement of Participants and others, and the amounts of their respective interests. Each interested party may act and rely upon all information reported to them hereunder and need not inquire into the accuracy thereof, nor be charged with any notice to the contrary.
(e) Rules and Regulations. Any rule not in conflict or at variance with the provisions hereof may be adopted by the Committee.
(f) Errors in Computations. The Company nor the Committee shall not be liable or responsible for any error in the computation of any benefit payable to or with respect to any Participant resulting from any misstatement of fact made by the Participant or by or on behalf of any survivor to whom such benefit shall be payable, directly or indirectly, to Apogee, and used by the Company in determining the benefit. Apogee shall not be obligated or required to increase the benefit payable to or with respect to such Participant which, on discovery of the misstatement, is found to be understated as a result of such misstatement of the Participant. However, the benefit of any Participant which is overstated by reason of any such misstatement or any other reason shall be reduced to the amount appropriate in view of the truth (and to recover any prior overpayment by offset or other legal process).
(g) ERISA Status. This Plan is adopted with the understanding that it is an unfunded plan maintained primarily for the purpose of providing deferred compensation for non-employee directors only, and thus is not subject to ERISA. Each provision shall be interpreted and administered accordingly.
(h) IRC Status. This Plan is intended to be a nonqualified deferred compensation arrangement. The rules of section 401(a) et. seq. of the Code shall not apply to this Plan. The rules of section 409A of the Code shall apply to this Plan to the extent applicable and this Plan Statement shall be construed and administered accordingly. The Company nor any of its officers, directors, agents or affiliates shall be obligated, directly or indirectly, to any Participant or any other person for any taxes, penalties, interest or like amounts that may be imposed on the Participant or other person on account of any amounts under this Plan or on account of any failure to comply with any Code section.
Adopted by the Board on October 9, 1998, subject to and effective upon shareholder approval
Approved by shareholders on June 22, 1999
Amended and Restated by the Board on October 11, 2006
Amended by the Board on February 27, 2009
Amended by the Board on April 29, 2009
Amended and Restated by the Board on April 30, 2014, subject to and effective upon shareholder approval
B-11
4400 West 78th Street Suite 520 Minneapolis, MN 55435 |
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
KEEP THIS PORTION FOR YOUR RECORDS | |
|
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
For All |
Withhold All |
For All Except |
To withhold authority to vote for any individual nominee(s), mark For All Except and write the number(s) of the nominee(s) on the line below. |
|||||||||||||||||||||
The Board of Directors recommends you vote FOR the following: |
||||||||||||||||||||||||
1. |
Election of Directors |
¨ |
¨ |
¨ |
|
|||||||||||||||||||
Nominees | ||||||||||||||||||||||||
01 | ROBERT J. MARZEC 02 DONALD A. NOLAN 03 DAVID E. WEISS | |||||||||||||||||||||||
The Board of Directors recommends you vote FOR proposals 2, 3, 4 and 5. |
For | Against | Abstain | |||||||||||||||||||||
2. |
ADVISORY APPROVAL OF APOGEES EXECUTIVE COMPENSATION. |
¨ |
¨ |
¨ |
||||||||||||||||||||
3. |
PROPOSAL TO APPROVE THE 2014 RESTATEMENT OF THE APOGEE ENTERPRISES, INC. 2009 NON-EMPLOYEE DIRECTOR STOCK INCENTIVE PLAN. |
¨ |
¨ |
¨ |
||||||||||||||||||||
4. |
PROPOSAL TO APPROVE THE 2014 RESTATEMENT OF THE APOGEE ENTERPRISES, INC. DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS. |
¨ |
¨ |
¨ |
||||||||||||||||||||
5. |
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS APOGEES INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING FEBRUARY 28, 2015. |
¨ |
¨ |
¨ |
||||||||||||||||||||
NOTE: In their discretion, the Proxies are authorized to vote upon such other business as may properly be brought before the meeting. |
||||||||||||||||||||||||
|
Yes | No | ||||||||||||||||||||||
Please indicate if you plan to attend this meeting |
¨ |
¨ |
||||||||||||||||||||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. | ||||||||||||||||||||||||
Signature [PLEASE SIGN WITHIN BOX]
|
Date
|
Signature (Joint Owners)
|
Date
|
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report, Notice & Proxy Statement is/are available at www.proxyvote.com.
|
Annual Meeting of Shareholders APOGEE ENTERPRISES, INC. June 25, 2014 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints JOSEPH F. PUISHYS, JAMES S. PORTER and PATRICIA A. BEITHON as Proxies, each with the power to appoint his or her substitute, and hereby authorizes any one of them to represent and to vote, as designated on the reverse, all of the shares of Common Stock of Apogee Enterprises, Inc. (Apogee) held of record by the undersigned on May 2, 2014, at the Annual Meeting of Shareholders of Apogee to be held on June 25, 2014, or any adjournment thereof, and hereby revokes all former Proxies.
This Proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder. If no direction is made, this proxy will be voted FOR Proposals 1, 2, 3, 4 and 5.
If you are a participant in the Apogee Employee Stock Purchase Plan, this card directs Computershare Shareowner Services LLC, as the Plan Administrator, to vote, as designated on the reverse, all of the shares of Apogee Common Stock held of record in the Plan account for which it has received direction by 11:59 A.M. Eastern Time on June 23, 2014. The Plan Administrator cannot vote the shares unless it receives timely direction from you.
If you are a participant in the Apogee 401(k) Retirement Plan, this card directs Principal Trust Company, as Trustee for the Plan, to vote, as designated on the reverse, all of the shares of Apogee Common Stock held of record in the Plan account. The Trustee will vote, with regard to the Plan, shares of Apogee Common Stock for which it has not received direction by 11:59 A.M. Eastern Time on June 23, 2014 in the same proportion as directed shares are voted, unless contrary to ERISA or unless contrary to applicable law.
Continued and to be signed on reverse side |
|||||||
*** Exercise Your Right to Vote ***
Important Notice Regarding the Availability of Proxy Materials for the
Shareholder Meeting to Be Held on June 25, 2014
Meeting Information
|
||||||||||
Meeting Type: Annual Meeting |
||||||||||
APOGEE ENTERPRISES, INC. |
For holders as of: May 02, 2014 | |||||||||
Date: June 25, 2014 |
Time: 9:30 AM CDT |
|||||||||
Location: Apogee Enterprises, Inc. |
||||||||||
4400 West 78th Street |
||||||||||
Suite 520 Minneapolis, MN 55435
|
||||||||||
4400 West 78th Street Suite 520 Minneapolis, MN 55435 |
You are receiving this communication because you hold shares in the above named company. | |||||
This is not a ballot. You cannot use this notice to vote these shares. This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. You may view the proxy materials online at www.proxyvote.com or easily request a paper copy (see reverse side). | ||||||
|
We encourage you to access and review all of the important information contained in the proxy materials before voting.
| |||||
See the reverse side of this notice to obtain proxy materials and voting instructions.
| ||||||
Before You Vote |
||||||||
How to Access the Proxy Materials
Proxy Materials Available to VIEW or RECEIVE: | ||||||||
|
1. Annual Report 2. Notice & Proxy Statement How to View Online: Have the information that is printed in the box marked by the arrow è (located on the following page) and visit: www.proxyvote.com.
How to Request and Receive a PAPER or E-MAIL Copy: If you want to receive a paper or e-mail copy of these documents, you must request one. There is NO charge for requesting a copy. Please choose one of the following methods to make your request: 1) BY INTERNET: www.proxyvote.com 2) BY TELEPHONE: 1-800-579-1639 3) BY E-MAIL*: sendmaterial@proxyvote.com * If requesting materials by e-mail, please send a blank e-mail with the information that is printed in the box marked by the arrow è (located on the following page) in the subject line.
Requests, instructions and other inquiries sent to this e-mail address will NOT be forwarded to your investment advisor. Please make the request as instructed above on or before June 11, 2014 to facilitate timely delivery.
|
|||||||
How To Vote |
||||||||
Please Choose One of the Following Voting Methods
|
Vote In Person: Many shareholder meetings have attendance requirements including, but not limited to, the possession of an attendance ticket issued by the entity holding the meeting. Please check the meeting materials for any special requirements for meeting attendance. At the meeting, you will need to request a ballot to vote these shares.
Vote By Internet: To vote now by Internet, go to www.proxyvote.com. Have the information that is printed in the box marked by the arrow è available and follow the instructions.
Vote By Mail: You can vote by mail by requesting a paper copy of the materials, which will include a proxy card.
|
|||||||
Voting items | ||||||||||||||||||||
The Board of Directors recommends you vote FOR the following:
1. Election of Directors |
||||||||||||||||||||
Nominees |
||||||||||||||||||||
01 ROBERT J. MARZEC 02 DONALD A. NOLAN 03 DAVID E. WEISS |
||||||||||||||||||||
The Board of Directors recommends you vote FOR proposals 2, 3, 4 and 5. |
||||||||||||||||||||
2. ADVISORY APPROVAL OF APOGEES EXECUTIVE COMPENSATION. |
||||||||||||||||||||
|
||||||||||||||||||||
3. PROPOSAL TO APPROVE THE 2014 RESTATEMENT OF THE APOGEE ENTERPRISES, INC. 2009 NON-EMPLOYEE DIRECTOR STOCK INCENTIVE PLAN. |
||||||||||||||||||||
4. PROPOSAL TO APPROVE THE 2014 RESTATEMENT OF THE APOGEE ENTERPRISES, INC. DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS. |
||||||||||||||||||||
5. RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS APOGEES INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING FEBRUARY 28, 2015. |
||||||||||||||||||||
NOTE: In their discretion, the Proxies are authorized to vote upon such other business as may properly be brought before the meeting. |
||||||||||||||||||||
|