Business Context and Reporting Period
This Form 8-K Current Report was filed by Apogee Enterprises, Inc. on April 28, 2009. The filing details the execution of new executive compensation agreements and amendments to director deferred compensation plans. The report focuses on the Executive Management Incentive Plan (Executive MIP) for fiscal 2010 and long-term equity awards under the 2002 Omnibus Stock Incentive Plan.
Key Financial Metrics
The filing does not provide specific financial results such as revenue, profit, cash flow, margins, debt, or liquidity figures. The document is strictly focused on executive compensation structures and plan amendments.
Material Changes and Compensation Details
Annual Cash Incentive Compensation (Fiscal 2010)
On April 28, 2009, the Company entered into Bonus Pool Award Agreements with named executive officers. Payouts are based on net sales and earnings per share (corporate level), with Mr. Silvestri's award also tied to Viracon business unit metrics. Payout ranges as a percentage of salary are as follows:
| Executive | Position | Target Payout (%) | Maximum Payout (%) |
|---|---|---|---|
| Russell Huffer | Chairman, President and CEO | 75.00 | 150.00 |
| James S. Porter | CFO | 55.00 | 110.00 |
| Gregory A. Silvestri | Executive Vice President | 55.00 | 110.00 |
| Patricia A. Beithon | General Counsel | 37.50 | 75.00 |
| Gary R. Johnson | Vice President and Treasurer | 25.00 | 50.00 |
Performance Share Units (2010-2012)
Performance Share Units were awarded with a performance period from March 1, 2009, to March 3, 2012. Vesting is based on average return on invested capital, cumulative earnings per share, and market share growth.
| Executive | Target Award (Shares) | Maximum Award (Shares) |
|---|---|---|
| Russell Huffer | 53,125 | 106,250 |
| James S. Porter | 17,933 | 35,866 |
| Gregory A. Silvestri | 18,761 | 37,522 |
| Patricia A. Beithon | 14,843 | 29,686 |
| Gary R. Johnson | 4,731 | 9,462 |
Time-Based Restricted Stock
Restricted stock awards were granted to vest in three equal annual installments starting April 28, 2010, with full vesting upon death or total disability.
| Executive | Shares Awarded | Vesting Date |
|---|---|---|
| Russell Huffer | 49,619 | 4/28/2012 |
| James S. Porter | 12,434 | 4/28/2012 |
| Gregory A. Silvestri | 12,632 | 4/28/2012 |
| Patricia A. Beithon | 10,291 | 4/28/2012 |
| Gary R. Johnson | 3,154 | 4/28/2012 |
Director Deferred Compensation Plan Amendment
The Compensation Committee approved an amendment to the Deferred Compensation Plan for Non-Employee Directors, reducing the number of shares available for issuance by 45,000 to a total of 155,000 shares.
Guidance, Outlook, and Risks
The filing does not contain forward-looking financial guidance, management commentary on market conditions, or specific risk factors beyond the standard forfeiture provisions in the compensation agreements. Key contingencies include:
- Forfeiture: Executive officers forfeit all rights to annual bonuses and performance share units if terminated for reasons other than Disability, Retirement, death, or involuntary termination without Cause.
- Change in Control: Performance periods for share units are deemed to end on the date of a Change in Control, with awards adjusted for the truncated period.
Investor Verification Checklist
- Verify the specific performance metrics (net sales, EPS, ROIC, market share) required to achieve the target and maximum payout levels for fiscal 2010 and the 2010-2012 period.
- Review the attached Exhibit 10.1, 10.2, and 10.3 for detailed definitions of "Cause," "Disability," and "Retirement" which dictate forfeiture and pro-rata vesting.
- Confirm the impact of the 45,000 share reduction in the Director Deferred Compensation Plan on future director retention incentives.
- Assess the dilution impact of the total potential share awards (Performance Share Units and Restricted Stock) on existing shareholders.