SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
APOGEE ENTERPRISES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
LOGO
May 16, 1996
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders to be
held in the Lutheran Brotherhood Building Auditorium, 625 Fourth Avenue South,
Minneapolis, Minnesota, commencing at 10:00 a.m. on Tuesday, June 18, 1996.
The Secretary's formal notice of the meeting and the Proxy Statement appear
on the following pages and describe the matters to come before the meeting.
During the meeting, time will be provided for a review of the activities of the
past year and items of general interest about the Company.
We hope that you will be able to attend the meeting in person, and we look
forward to seeing you. Please mark, date and sign the enclosed proxy and return
it in the accompanying envelope as quickly as possible, even if you plan to
attend the meeting. You may vote in person at that time if you so desire.
Sincerely,
/s/ Donald W. Goldfus
Donald W. Goldfus
Chairman of the Board,
Chief Executive Officer
and President
APOGEE ENTERPRISES, INC.
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 18, 1996
Notice is hereby given that the Annual Meeting of Shareholders of APOGEE
ENTERPRISES, INC. will be held in the Lutheran Brotherhood Building Auditorium,
625 Fourth Avenue South, Minneapolis, Minnesota, commencing at 10:00 a.m. on
Tuesday, June 18, 1996 for the following purposes:
1. To elect three directors for a three-year term;
2. To ratify the appointment of KPMG Peat Marwick LLP as independent
auditors for the fiscal year ending March 1, 1997; and
3. To transact such other business as may properly be brought before the
meeting.
The Board of Directors has fixed April 26, 1996 as the record date for the
meeting. Only shareholders of record at the close of business on that date are
entitled to receive notice of and vote at the meeting.
YOUR PROXY IS IMPORTANT TO ENSURE A QUORUM AT THE MEETING. EVEN IF YOU OWN
ONLY A FEW SHARES, AND WHETHER OR NOT YOU EXPECT TO BE PRESENT, YOU ARE
URGENTLY REQUESTED TO DATE, SIGN AND MAIL THE ENCLOSED PROXY IN THE POSTAGE-
PAID ENVELOPE PROVIDED. THE PROXY MAY BE REVOKED BY YOU AT ANY TIME AND GIVING
OF YOUR PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE
MEETING.
By Order of the Board of Directors,
/s/ William G. Gardner
William G. Gardner
Secretary
Minneapolis, Minnesota
May 16, 1996
PROXY STATEMENT
GENERAL INFORMATION
The enclosed proxy is being solicited on behalf of the Board of Directors of
Apogee Enterprises, Inc. (the "Company") for use at the Annual Meeting of
Shareholders to be held on June 18, 1996. Only shareholders of record at the
close of business on April 26, 1996 will be entitled to vote at the meeting. A
shareholder executing a proxy retains the right to revoke it by notice in
writing to the Secretary of the Company at any time prior to its use. Proxies
in the accompanying form which are properly executed, duly returned and not
revoked will be voted in the manner specified. If a proxy is properly executed
but does not specify any or all choices on it, the proxy will be voted as
follows: (i) in favor of the election as Class I directors of all of the
nominees described herein; (ii) in favor of the appointment of KPMG Peat
Marwick LLP as independent auditors of the Company; and (iii) in the discretion
of the persons named in the proxy, as to such other matters as may properly
come before the meeting.
If an executed proxy is returned and the shareholder has voted "abstain" on
any matter, the shares represented by such proxy will be considered present at
the meeting for purposes of determining a quorum and for purposes of
calculating the vote, but will not be considered to have been voted in favor of
such matter. If an executed proxy is returned by a broker holding shares in
street name which indicates that the broker does not have discretionary
authority as to certain shares to vote on one or more matters, such shares will
be considered present at the meeting for purposes of determining a quorum, but
will not be considered to be represented at the meeting for purposes of
calculating the vote with respect to such matter.
The address of the Company is Suite 1800, 7900 Xerxes Avenue South,
Minneapolis, Minnesota 55431-1159. The telephone number is (612) 835-1874. The
mailing of this proxy statement and form of proxy to shareholders will commence
on or about May 16, 1996.
SHAREHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
Any shareholder wishing to have a proposal considered for submission at the
1997 annual meeting must submit the proposal in writing to the Secretary of the
Company at the address indicated above in accordance with all applicable rules
and regulations of the SEC no later than January 17, 1997.
1
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS
At April 26, 1996, there were 13,538,244 shares of common stock, par value
$.33 1/3, issued and outstanding. Each share is entitled to one vote. The
following table sets forth information concerning beneficial ownership of
common stock of the Company by persons who are known to own more than 5% of the
outstanding voting stock of the Company at March 31, 1996. Unless otherwise
indicated, all shares represent sole voting and investment power.
NAME AND
ADDRESS
OF BENEFICIAL AMOUNT AND NATURE OF PERCENT OF
OWNER BENEFICIAL OWNERSHIP CLASS
------------- -------------------- ----------
David L. Babson & Company............... 1,261,558 9.3%
One Memorial Drive
Cambridge, MA 02142-1300
Trust of Russell H. Baumgardner
(6/6/86)(1)............................ 1,183,614 8.7%
c/o Lionel, Sawyer, & Collins
1100 Bank of America Plaza
50 West Liberty Street
Reno, NV 89501
KPM Investment Management, Inc.......... 692,550 5.1%
10250 Regency Circle
Omaha, NE 68114
- --------
(1) The 1,183,614 shares held by the Russell H. Baumgardner Trust (the "Trust")
dated June 6, 1986 are also deemed to be beneficially owned by Messrs.
Donald W. Goldfus, O. Walter Johnson and Laurence J. Niederhofer, because
they share voting and investment power as trustees of the Trust. If the
shares held by the Trust were included in the holdings of Messrs. Goldfus,
Johnson and Niederhofer, the number of shares and percentage of outstanding
shares held by each of Messrs. Goldfus, Johnson and Niederhofer would be as
follows: Goldfus, 1,541,704 (11.4%); Johnson, 1,207,190 (8.9%); and
Niederhofer, 1,476,826 (10.9%).
All persons subject to Section 16 of the Securities and Exchange Act filed
required reports in a timely manner disclosing transactions involving the
Company's stock, with the exception of a late filing by Mr. G. Anderson, a
director, in connection with the exercise of two options and the sale of the
underlying shares in July, 1995, a late filing by Mr. G. Haider, an officer of
a subsidiary, in connection with the sale of common stock and a late filing by
Mr. T. Adamson, an officer of a subsidiary, in connection with the purchase of
common stock.
ELECTION OF DIRECTORS
The Company's Articles of Incorporation provide that the Board of Directors
be divided into three classes of directors of as nearly equal size as possible
and further provide that the total number of directors be determined
exclusively by the Board of Directors. The term of each class of director is
three years, and the term of one class expires each year in rotation.
Currently, there are nine directors. The terms of the directors of Class I,
consisting of Directors G. Anderson, J. Levin and D. Nugent, expire at the 1996
Annual Meeting of Shareholders. Mr. Nugent has been a member of the Board of
Directors since 1990, and was last elected to the Board of Directors at the
1993 Annual Meeting of Shareholders. Mr. Anderson and Mr. Levin will be
retiring from the board at that time and will not seek reelection. To fill the
resulting Class I director
2
vacancies, the Corporate Governance Committee of the Board has placed in
nomination the names of Barbara B. Grogan and Stephen C. Mitchell. The terms of
the directors of Class II and Class III expire at the 1997 and 1998 Annual
Meeting of Shareholders, respectively.
Unless authority is withheld, the Proxy solicited hereby will be voted FOR
the election of Ms. Barbara B. Grogan and Messrs. Stephen C. Mitchell and D.
Eugene Nugent as Directors of Class I for a three-year term expiring at the
1999 Annual Meeting of Shareholders. The affirmative vote of a majority of the
shares of common stock of the Company entitled to vote and present in person or
by proxy at the annual meeting is necessary to elect each nominee.
Management has no reason to expect that any of the nominees will fail to be a
candidate at the annual meeting and, therefore, does not have in mind any
substitute or substitutes for any of the nominees. If any of the nominees
should be unable to serve as a director (which event is not anticipated),
proxies will be voted for a substitute nominee or nominees in accordance with
the best judgment of the person or persons acting under the proxies.
The following table sets forth certain information as to each nominee for the
office of director, as well as directors whose terms of office will continue
after the 1996 Annual Meeting of Shareholders is held.
DIRECTOR TERM
NAME AND PRINCIPAL OCCUPATION AGE SINCE EXPIRES
- ----------------------------- --- -------- -------
Anthony L. Andersen (Class II) 60 1988 1997
Chair-Board of Directors of H. B. Fuller Company (manu-
facturer of specialty chemicals) since 1992. Prior to
that, CEO, President and Chief Executive Officer of H.
B. Fuller Company since 1974. Mr. Andersen is also a di-
rector of Minnesota Mutual Life Insurance Company.
Committees: Executive and Audit
Paul B. Burke (Class III) 40 1995 1998
President and Chief Executive Officer of BMC Industries,
Inc. (manufacturer of precision imaged and optical prod-
ucts) since 1991. Prior to that, various senior manage-
ment positions with BMC Industries, Inc. since 1987. Mr.
Burke is also a director of BMC Industries, Inc.
Committees: Compensation and Corporate Governance
Donald W. Goldfus (Class III) 62 1964 1998
Chairman of the Board of Directors and Chief Executive
Officer of the Company since 1988. President of the Com-
pany since 1995. Prior to that, various senior manage-
ment positions with the Company. Mr. Goldfus is also a
director of G & K Services, Inc.
Committees: Executive and Corporate Governance
Barbara B. Grogan (Class I) 48 -- --
Chairman of the Board of Directors and President, Western
Industrial Contractors (a construction company special-
izing in machinery erection and installation) since
1982. Ms. Grogan is also a director of Deluxe Corpora-
tion, Winter Park Ski Area, Volunteers of America and
Pentair, Inc.
3
DIRECTOR TERM
NAME AND PRINCIPAL OCCUPATION AGE SINCE EXPIRES
- ----------------------------- --- -------- -------
Harry A. Hammerly (Class II) 62 1994 1997
Retired Executive Vice President, 3M Company. Executive
Vice President, International Operations, 3M Company
(industrial, consumer and health care products manufac-
turer) from 1991 to 1995. Prior to that, various senior
management positions with 3M Company since 1973 and
other positions since 1955. Mr. Hammerly is also a di-
rector of 3M Company, Cincinnati Milacron, Inc., BMC In-
dustries, Inc. and The Geon Company.
Committees: Compensation, Corporate Governance and Execu-
tive
James L. Martineau (Class III) 55 1973 1998
Vice President of the Company. President of the Glass
Fabrication Division of the Company since 1971. Mr. Mar-
tineau is also a director of First Bank Southeast, N.A.,
Owatonna, MN.
Stephen C. Mitchell (Class I) 52 -- --
President and Chief Operating Officer of Lester B. Knight
& Associates, Inc., (a privately held, professional
services company) since 1975. He is also Chairman of
Knight Architects Engineers Planners, Inc.
Laurence J. Niederhofer (Class II) 63 1964 1997
Retired Chief Executive Officer of the Window Fabrication
Division of the Company. Mr. Niederhofer is also a di-
rector of M & I First American National Bank, Wausau,
WI.
D. Eugene Nugent (Class I) 68 1990 1996
Retired Chairman and Chief Executive Office of Pentair,
Inc. (manufacturer of industrial products) from 1982 to
1992. Mr. Nugent is also a director of Pentair, Inc.
Committees: Audit, Compensation, Executive and Corporate
Governance
- --------
None of the above nominees or directors is related to any other nominee or
director or to any executive officer of the Company. Except as indicated above,
each of the nominees and directors has maintained his current principal
occupation for at least the last five years.
The Board of Directors held seven meetings during the last fiscal year. The
Company has standing Audit, Compensation, Executive and Corporate Governance
Committees of the Board of Directors. The members of the various committees are
noted in the table above.
The Audit Committee recommends the selection of the independent auditors to
the Board of Directors; reviews the scope and results of the audits performed
by the independent auditors; and reviews various auditing and accounting
matters. The Audit Committee met twice during the fiscal year ended March 2,
1996.
The Compensation Committee determines the salary and other compensation of
all elected officers and senior management. The Compensation Committee also
administers the 1987 Stock Option Plan and the 1987 Partnership Plan. The
Compensation Committee met once during the fiscal year ended March 2, 1996.
The Executive Committee exercises the power of the full Board of Directors
between meetings, except for the power of filling Board vacancies. The
Executive Committee met once during the fiscal year ended March 2, 1996.
4
The Corporate Governance Committee periodically assesses the organization's
adherence to the Company's mission and principles, reviews the organizational
structure and succession plans, makes recommendations to the Board regarding
the composition and responsibilities of board committees, and suggests new
director nominees to the Board. The Committee will consider qualified nominees
recommended by shareholders. Any such recommendation for the 1997 election of
directors should be submitted in writing to the Secretary of the Company at the
address indicated above no later than 90 days in advance of the 1997 Annual
Meeting of Shareholders. Such recommendation must include information specified
in the Company's Bylaws which will enable the Committee to evaluate the
qualifications of the recommended nominee. Non-employee director members of the
Committee annually review and evaluate the performance of the Chief Executive
Officer. The Corporate Governance Committee met four times during the fiscal
year ended March 2, 1996.
Compensation of Directors. Directors, except for full-time employees of the
Company or its subsidiaries, receive an annual retainer of $18,000, plus a fee
of $1,000 for each meeting of the Board of Directors or its committees
attended. The meeting fee for committee chairs is $1,500 for each committee
meeting chaired. Non-employee directors also receive automatic, annual stock
option grants under the 1987 Stock Option Plan. The number of shares granted is
determined by dividing directors' cash compensation by the market price of
common stock on specified dates. The Security Ownership table includes the
options granted to the non-employee directors in fiscal 1996, which for the
non-employee directors as a group totaled 19,839 shares. The per share exercise
price of all such options is $17.59. None of these options has been exercised.
Non-employee directors also may elect to participate in the Company's
Employee Stock Purchase Plan. Under the plan, participants may purchase the
Company's common stock by contributing up to $100 per week, with the Company
contributing an amount equal to 15% of the weekly contribution. For the fiscal
period 1996, the Company contributed $3,660 to the Employee Stock Purchase Plan
for the benefit of all non-employee directors as a group.
The Company has consulting agreements with Laurence J. Niederhofer and Gerald
K. Anderson, non-employee directors, to provide consulting and advisory
services to the Company. Mr. Niederhofer's agreement as amended covers five
one-year terms ending November 1, 1998 and pays Mr. Niederhofer a fee of
$120,000 per year, plus certain out-of-pocket expenses and other benefits. Mr.
Anderson's agreement covers a six and one-half year term ending the earlier of
December 31, 2001 or a termination event as described in the agreement. The
agreement pays Mr. Anderson a defined monthly amount based on a declining
hourly commitment plus certain out-of-pocket expenses and other benefits. For
the fiscal period 1996, Mr. Anderson was paid $159,000 for consulting services.
5
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the number of the Company's common shares
beneficially owned by each director, the executive officers of the Company
included in the Summary Compensation Table set forth under the caption
"Executive Compensation" below, and by all directors and executive officers of
the Company as a group, at March 31, 1996.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
----------------------------------------------
NUMBER OF OPTIONS
SHARES EXERCISABLE PERCENT OF
PRESENTLY WITHIN OUTSTANDING
NAME HELD(1) 60 DAYS TOTAL SHARES
---- --------- ----------- ------- -----------
Anthony L. Andersen.......... 3,846 10,724 14,570 (7)
Gerald K. Anderson........... 72,464 -- 72,464 (7)
Paul B. Burke................ 203 -- 203 (7)
William G. Gardner........... 31,553(2) 8,750 40,679 (7)
Donald W. Goldfus............ 329,340(3)(4) 20,000 349,340 2.6%
Richard Gould................ 5,862 1,250 7,112 (7)
Terry L. Hall................ 37 -- 37 (7)
Harry A. Hammerly............ 2,569 2,850 5,419 (7)
Jerry W. Levin............... 14,403(5) 9,673 24,076 (7)
James L. Martineau........... 119,980 3,750 123,730 (7)
Laurence J. Niederhofer...... 288,699(4)(6) 4,513 293,212 2.2%
D. Eugene Nugent............. 2,322 10,670 12,992 (7)
All Directors and Executive
Officers as a group
(12 persons)................ 871,278 72,180 943,458 7.0%
- --------
(1) Each person shown has sole voting and investment power over the shares
unless otherwise indicated. Shares beneficially owned include shares owned
or vested through the Company's 1987 Partnership Plan, Employee Stock
Purchase Plan, 401(k) Plan and Pension Plan.
(2) Includes 100 shares held by Mr. Gardner's wife, as to which he disclaims
beneficial interest.
(3) Includes 25,656 shares held by Mr. Goldfus' wife, as to which he disclaims
beneficial interest.
(4) The 1,183,614 shares held by the Russell H. Baumgardner Trust dated June 6,
1986 (see Security Ownership of Principal Shareholders) are also deemed to
be beneficially owned by Messrs. Goldfus and Niederhofer because they share
voting and investment power as trustees. If the shares held by the Trust
were included in the above table, the number of shares held by each of
Messrs. Goldfus and Niederhofer would be increased by 1,183,614 and the
percent of outstanding shares would be as follows: Goldfus, 11.4%;
Niederhofer, 10.9%; and all directors and executive officers as a group,
15.9%.
(5) Includes 2,000 shares held by Mr. Levin's wife as trustee for trusts for
the benefit of Mr. Levin's children, as to which he disclaims beneficial
interest.
(6) Includes 30,224 shares held by Mr. Niederhofer's wife, as to which he
disclaims beneficial interest.
(7) Less than 1%.
6
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT
Overview and Philosophy
The compensation of executive officers is determined by the Compensation
Committee of the Board of Directors. The Committee is comprised entirely of
nonemployee directors. To assist in performing its duty and to enhance the
objectivity and independence of the Committee, the advice and recommendations
of an outside compensation consultant, as well as independent compensation
data, are periodically obtained.
In administering the executive pay plans, the Committee desires to preserve
the entrepreneurial style that it believes forms a strong component of the
Company's history, culture and competitive advantage. As such, plans are
designed and decisions are made that place more emphasis on long-term business
development than on short-term results. Also, the Committee believes it is
consistent with this entrepreneurial philosophy to place more emphasis on both
short and long-term incentive pay, than on base pay. In furtherance of this
philosophy, the Company maintains a high level of operational autonomy, there
being only five executive officers and 26 employees, including officers, at the
corporate level, compared to a total employee count of 6,163 as of March 2,
1996. Compensation of divisional management is administered primarily at the
divisional level.
The objectives of the executive compensation policies are to:
(1) Promote the achievement of strategic objectives which lead to long-term
growth in shareholder value.
(2) Establish total compensation plans that are competitive with similarly
situated companies, that attract and retain superior performers, and
that reward outstanding performance.
(3) Align the executive officers' interests with those of the Company by
making incentive compensation dependent upon business unit or company
performance.
Base Salary
Base salaries are reviewed annually. In determining annual salary
adjustments, the Committee takes into account the executive's level of
responsibility, experience and performance in relation to the Company's
performance and other companies' performance. In fiscal 1996, base salaries of
executive officers were generally less than the average of companies of
equivalent size and complexity. Base salary increases in the fiscal year ranged
from 4% to 13% with the average being 6%.
Annual Incentive
Executives may earn annual incentive compensation under individualized cash
bonus plans. The Committee develops the plan for the Chief Executive Officer
and reviews and approves plans for other executive officers at the beginning of
the fiscal year. Each plan encompasses specific objectives, such as business
unit or Company profitability, achievement of planned results, return on assets
or equity, and individual and group development. The actual cash bonus is
awarded based on the degree of achievement of those objectives. The Committee
may also make discretionary bonus awards if, in its judgment, such action is
merited in light of individual performance, compensation equity, or both. For
fiscal 1996, the range of potential bonus payments as a percentage of base pay
was from zero to 100 percent.
7
Long-term Incentive
To further encourage alignment of executives' interests with those of the
Company's shareholders, executives selected by the Committee may also
participate in the 1987 Partnership Plan. At the beginning of the year, each
participant may voluntarily defer up to fifty percent of the possible incentive
compensation (to a maximum of $100,000) to be invested in the Partnership Plan.
The Company matches the deferred amount and the aggregate is invested in the
Company's common stock. The individual's amount is vested immediately, however
the shares are held in trust and restricted for a period of not less than five
years. The Company match is made in restricted stock that is vested in equal
annual increments over a period of up to 10 years, as determined by the
Committee. In the accompanying Summary Compensation Table, the deferred amount
and the Company match under the Partnership Plan are shown in the column
labeled Restricted Stock Award. Such restricted stock awards relate exclusively
to the compensation deferral under the Partnership Plan, and no other
restricted stock grants have been made to executive officers of the Company in
the three-year period.
Stock Options
Executives are also eligible to receive grants under the Company's stock
option plan which is also administered by the Compensation Committee. Option
grants are made at current market prices so that executive rewards accrue only
as shareholder value increases. The option grants typically vest at the rate of
25 percent per year, beginning on the grant's first anniversary. Consistent
with the Company's emphasis on long-term incentives, grants are generally made
each year to a broad base of recipients (91 employees in fiscal 1996) that may
or may not include executive officers.
Chief Executive Officer Compensation
Mr. Donald W. Goldfus has held the position of Chief Executive Officer since
1986. In April 1995, his annual salary was set at $384,800, a 4 percent
increase. The Committee's decision on Mr. Goldfus' base salary took into
account the recommendations of its independent compensation consultant and
included relevant compensation survey data. The survey was compiled by the
compensation consultant from its data base of industrial companies with
revenues ranging from $200 million to $1 billion. The base salary of $384,800
leaves Mr. Goldfus still well below the median chief executive officer pay
level in the survey. The Committee believes that Mr. Goldfus' contributions
have led to the significant improvement by all three segments of the company,
but most specifically margin improvement, working capital reduction and
earnings growth of the Company during the past year. This conclusion is
supported by the Corporate Governance Committee which, as part of its duties,
completed a performance review of the Chief Executive Officer in March, 1996.
Accordingly, the Committee awarded Mr. Goldfus a discretionary bonus of
$340,000 under the annual incentive plan. The sum of Mr. Goldfus' base pay and
annual incentive award is also well below the median level of the consultant's
survey. Mr. Goldfus had elected to defer one-half of any bonus received into
the Company's long-term, stock-based incentive plan (the 1987 Partnership
Plan). Therefore, the accompanying Summary Compensation Table reflects a cash
bonus of $240,000. The deferred portion, together with the Company match as
described above and in the table, are reported in the restricted stock award
column in the table.
The Committee believes the executive compensation policies and actions
discussed in the above report reflect decisions which are consistent with the
Company's overall beliefs and goals.
Paul B. Burke
Harry Hammerly
D. Eugene Nugent
Members of the Compensation
Committee
8
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and noncash compensation for services
in all capacities for each of the last three fiscal years, awarded to the Chief
Executive Officer of the Company and the four other most highly compensated
executive officers of the Company.
ANNUAL COMPENSATION LONG-TERM COMPENSATION
-------------------------------------- --------------------------------
TOTAL STOCK
RESTRICTED OPTION LONG-TERM ALL OTHER
NAME AND PRINCIPAL OTHER ANNUAL STOCK SHARES INCENTIVE COMPENSATION
POSITION YEAR SALARY(1) BONUS COMPENSATION(2) AWARD(3) AWARDED PAYOUTS (4)
- ------------------ ---- --------- ------- --------------- ---------- ----------- --------- ------------
Donald W. Goldfus....... 1996 389,923 240,000 1,027 200,000 -- -- 10,200
Chairman and CEO 1995 356,923 100,000 913 200,000 35,000 -- 9,575
1994 285,000 25,000 686 50,000 15,000 -- 14,490
Richard Gould........... 1996 212,500 75,000 -- 150,000 20,000 -- 57,829
Senior Vice President 1995 153,846 100,000 -- -- 5,000 -- 201,182
1994 -- -- -- -- -- -- --
James L. Martineau...... 1996 240,097 159,975 744 106,650 20,000 -- 10,200
Vice President 1995 226,346 151,500 653 101,000 -- -- 9,575
1994 220,000 135,000 490 90,000 5,000 -- 13,698
Terry L. Hall........... 1996 213,461 150,000 -- -- 25,000 -- 55,491
Vice President, Finance 1995 -- -- -- -- -- -- --
and CFO 1994 -- -- -- -- -- -- --
William G. Gardner...... 1996 144,904 42,500 -- 85,000 10,000 -- 9,374
Treasurer and 1995 136,346 25,000 -- 50,000 -- -- 8,768
Secretary 1994 130,000 10,000 -- 20,000 5,000 -- 8,525
- --------
(1) Fiscal 1996 comprised 53 weeks while fiscal 1995 and 1994 comprised 52
weeks.
(2) Includes interest credited under the Company's 1986 Deferred Incentive
Compensation Plan.
(3) Under the 1987 Apogee Enterprises, Inc. Partnership Plan, participants are
given the opportunity to voluntarily defer up to 50 percent of their annual
incentive compensation, to a maximum of $100,000. The Company matches the
deferred amount and the aggregate, listed under "Restricted Stock Award,"
is invested in the Company's common stock. The individual's deferred amount
is vested immediately, however the shares are held in trust and restricted
for a period of not less than five years. The Company match is made in
restricted stock that is vested in equal annual increments over a period of
up to 10 years, as determined by the Compensation Committee. All shares are
eligible to receive all declared dividends. As of March 2, 1996, the total
number of shares held in trust and dollar value of those shares for each
officer is listed below.
SHARES ACQUIRED
WITH
----------------
YEARS OF DEFERRED COMPANY AGGREGATE
OFFICER PARTICIPATION AMOUNT MATCH $ VALUE
------- ------------- -------- ------- ---------
Donald W. Goldfus.................... 9 21,768 12,939 $681,125
Richard Gould........................ N/A N/A N/A N/A
James L. Martineau................... 9 11,007 11,928 450,099
Terry L. Hall........................ N/A N/A N/A N/A
William G. Gardner................... 9 4,619 7,054 229,083
(4) Represents amounts paid under the Company's defined contribution pension
plan and 401(k) savings plan, which are applicable to executive officers on
the same basis as all eligible employees. The 1996 amounts for Mr. Hall and
Mr. Gould also include $54,799 and $50,767, respectively, for relocation
expenses paid in connection with their relocations to Minnesota. The 1995
amount for Mr. Gould also includes $127,750 for an employment award
consisting of Company stock and personal tax reimbursement and $72,047
relocation expenses in connection with Mr. Gould's relocation.
9
STOCK OPTIONS
The following tables summarize option grants and exercises during fiscal 1996
to or by the executive officers named in the Summary Compensation Table above,
and the value of the options held by such persons at the end of fiscal 1996.
OPTION GRANTS IN FISCAL 1996
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
RATES OF STOCK
% OF PRICE
TOTAL OPTIONS APPRECIATION FOR
GRANTED TO EXERCISE OPTION TERM
OPTIONS(1) EMPLOYEES IN PRICE EXPIRATION -----------------
NAME GRANTED (#) FISCAL YEAR ($/SHARE) DATE 5% 10%
- ---- ----------- ------------- --------- ---------- -------- --------
Richard Gould........... 20,000 8.9% $17.38 6/20/00 $ 96,000 $212,160
James L. Martineau...... 20,000 8.9% $17.38 6/20/00 96,000 212,160
Terry L. Hall........... 25,000 11.1% $17.38 6/20/00 120,000 265,200
William G. Gardner...... 10,000 4.4% $17.38 6/20/00 48,000 106,080
- --------
(1) The options were granted on June 20, 1995 and will become exercisable in
equal increments over the next four years.
OPTION EXERCISES IN FISCAL 1996 AND FISCAL YEAR-END OPTION VALUES
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS
SHARES FISCAL YEAR AT FISCAL YEAR
ACQUIRED ON END (#) END ($)
EXERCISE VALUE (EXERCISABLE/ (EXERCISABLE/
NAME (#) REALIZED ($) UNEXERCISABLE) UNEXERCISABLE)
- ---- ----------- ------------ -------------- ----------------
Donald W. Goldfus..... 5,000 $11,250 16,250/33,750 $117,031/232,969
Richard Gould......... -- -- 1,250/23,750 8,281/ 69,844
James L. Martineau.... 5,000 11,250 2,500/22,500 19,688/ 64,688
Terry L. Hall......... -- -- 0/25,000 0/ 56,250
William G. Gardner.... 5,000 11,250 6,250/13,750 52,968/ 53,281
EMPLOYMENT AGREEMENT
The Company has an employment agreement with Mr. Richard Gould, whereunder
Mr. Gould has agreed to provide the Company with defined services and not to
engage in competition with the Company for a period of one year after his
termination. Under the terms of the agreement, if Mr. Gould's employment is
terminated for reasons other than those defined in the agreement, the Company
would award Mr. Gould severance compensation in the amount equal to one year's
base compensation plus his average annual incentive compensation. If
termination occurs within ten years of the agreement, the Company would employ
Mr. Gould as a consultant for a period of up to five years at an annual fee of
$50,000.
10
COMPARATIVE STOCK PERFORMANCE
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
FEBRUARY 28, 1991 TO FEBRUARY 28, 1996
The line graph below compares the cumulative total shareholder return on the
Common Stock of the Company for the last five fiscal years with cumulative
total return on the S&P SmallCap 600 Index and the peer group index described
below.
INDEXED RETURNS
Years Ending
Base
Period
Company Name/Index Feb 91 Feb 92 Feb 93 Feb 94 Feb 95 Feb 96
- -------------------------------------------------------------------------------
APOGEE ENTERPRISES INC 100 71.43 69.48 93.19 106.86 124.56
S&P SMALL CAP 600 INDEX 100 136.71 150.28 182.63 174.92 229.20
PEER GROUP 100 108.84 127.02 134.05 139.51 153.56
- --------
Assumes $100 invested at the close of trading on February 28, 1991 in Apogee
Enterprises, Inc. common stock, S&P SmallCap 600 and the peer group composite
listed below. Assumes monthly reinvestment of dividends. Total return
calculations for the Indices were performed with all available data by S&P
Compustat Services, Inc.
For the fiscal year ended February, 1996, the Company's primary business
activities included the design and installation of nonresidential curtainwall
and window systems (about 52% of net sales), the fabrication and coating of
architectural and consumer glass (about 17% of net sales) and the fabrication,
distribution and installation of automotive replacement glass (about 31% of net
sales). The Company is not aware of any competitors, public or private, that
are similar to it in both size and scope of business activities. Most of the
Company's direct competitors are either privately owned or divisions of larger,
publicly owned companies. The "peer" group in the accompanying total return
graph consists of all public companies with market capitalization of $500
million or less as of February 28, 1996 that are known to the Company to be
engaged in some aspect of glass and/or aluminum products or services for
construction and/or automotive end markets.
The companies included in the peer group index are: Butler Manufacturing
Corporation, Donnelley Corporation, Excel Industries, International Aluminum
Corporation, Robertson-Ceco Corporation, Southwall Technologies and Sun
Distributors.
11
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
KPMG Peat Marwick LLP has served as the independent auditors of the Company
since 1968. The Board of Directors has again appointed KPMG Peat Marwick LLP to
serve as the Company's independent auditors for the fiscal year ending March 1,
1997. While it is not required to do so, the Board of Directors is submitting
the selection of that firm for ratification in order to ascertain the views of
the shareholders. If the selection is not ratified, the Board of Directors will
reconsider its selection. Ratification of the selection will require the
affirmative vote of a majority of the shares of common stock of the Company
represented at the meeting in person or by proxy.
A representative of KPMG Peat Marwick LLP will be present at the Annual
Meeting of Shareholders and will be afforded an opportunity to make a statement
and will be available to respond to appropriate questions.
In connection with the audit function for fiscal year 1996, KPMG Peat Marwick
LLP reviewed the Company's annual report and its filings with the Securities
and Exchange Commission.
GENERAL
The 1996 Annual Report to Shareholders for the fiscal year ended March 2,
1996 is being mailed with this Proxy Statement.
Management does not intend to present any matters at the meeting not referred
to above and does not presently know of any matter that may be presented to the
meeting by others. However, if other matters properly come before the meeting,
it is the intention of the persons named in the enclosed form of proxy to vote
thereon in accordance with their best judgment.
The Company will pay the cost of soliciting proxies in the accompanying form.
In addition to solicitation by the use of mails, certain officers and regular
employees of the Company may solicit the return of proxies by telephone,
telegram or personal interview, and may request brokerage houses and
custodians, nominees and fiduciaries to forward soliciting materials to their
principals and will reimburse them for their reasonable out-of-pocket expenses.
Shareholders who wish to obtain a copy of the Company's Form 10-K Annual
Report, filed with the Securities and Exchange Commission for the fiscal year
ended March 2, 1996, may do so without charge by writing to the Secretary at
Suite 1800, 7900 Xerxes Avenue South, Minneapolis, Minnesota 55431-1159.
By Order of the Board of Directors,
/s/ William G. Gardner
William G. Gardner
Secretary
Dated: May 16, 1996
12
APOGEE ENTERPRISES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints DONALD W. GOLDFUS and TERRY L. HALL as Proxies,
each with the power to appoint his substitute, and hereby authorizes them to
represent and to vote, as designated below, all the shares of Common Stock of
Apogee Enterprises, Inc. held of record by the undersigned on April 26, 1996, at
the Annual Meeting of Shareholders to be held on June 18, 1996, or any
adjournment thereof.
1. ELECTION OF DIRECTORS:
* FOR all nominees listed below * WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees
contrary below) listed below
INSTRUCTION: To withhold authority to vote for any individual nominee, strike
a line through nominee's name in the list below:
BARBARA B. GROGAN STEPHEN C. MITCHELL D. EUGENE NUGENT
- --------------------------------------------------------------------------------
2. PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG PEAT MARWICK AS THE INDEPENDENT
AUDITORS OF THE COMPANY.
* FOR * AGAINST * ABSTAIN
- --------------------------------------------------------------------------------
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly be brought before the meeting.
This proxy when properly executed will be voted in the manner directed herein
by the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2. Please sign exactly as name appears below. When
signing as attorney, executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign in full corporate name
by President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Dated:_______________________, 1996
- -----------------------------------
Signature
- -----------------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
