Employment Agreement

Change in Control Agreement

 

 

EX-10.1 2 dex101.htm EMPLOYMENT AGREEMENT

Exhibit 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is made and entered as of August 5, 2011, to be effective as of the “Commencement Date” (as defined below), between Apogee Enterprises, Inc., a Minnesota corporation (the “Company”), and Joseph F. Puishys (the “Executive”), a resident of Minnesota.

RECITALS

WHEREAS, the Company wishes to employ the Executive as the Company’s Chief Executive Officer, and the Executive desires to accept and to serve as the Company’s Chief Executive Officer;

WHEREAS, the Company and the Executive understand that such employment is expressly conditioned on execution of this Agreement; and

WHEREAS, the Company desires to employ the Executive as Chief Executive Officer, and the Executive desires to be employed by the Company in that capacity, pursuant to the terms and conditions of this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the Executive’s employment as the Company’s Chief Executive Officer and the foregoing premises, the mutual covenants set forth below, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Executive agree as follows:

ARTICLE I: EMPLOYMENT, TERM AND DUTIES

1.1 Employment. The Company hereby employs the Executive as Chief Executive Officer, and the Executive accepts such employment and agrees to perform services for the Company, for the period and upon the other terms and conditions set forth in this Agreement. Effective as of the “Commencement Date” (as defined in Section 1.2 hereof), the Company’s Board of Directors (the “Board”) hereby elects the Executive as a member of the Board, to serve until the next annual meeting of the Company’s shareholders.

1.2 Term. The Executive’s employment with the Company shall commence on August 22, 2011 (the “Commencement Date”), and, unless earlier terminated pursuant to the terms of Article III hereof, shall be for a period of three (3) years, extending through August 22, 2014 (such employment period being referred to herein as the “Term”).

1.3 Position and Duties.

 

 

1.3.1

Service with the Company. The Executive agrees to serve as the Company’s Chief Executive Officer with such authority, power, responsibilities and duties (a) as are set forth for that position in the By-laws of the Company; (b) as the Board shall assign to the Executive from time to time; and (c) that the Executive undertakes or accepts consistent

 

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with his position as Chief Executive Officer. The Executive acknowledges and agrees that, from time to time, he will be required to perform duties with respect to one or more of the Company’s “Affiliates,” and that he will not be entitled to any additional compensation for performing those duties. The Executive shall report directly to the Board. As used herein, the term “Affiliate” means a company which is directly, or indirectly through one or more intermediaries, controlled by or under common control with another company, where “control” shall mean the right, either directly or indirectly, to elect the majority of the directors (general partners, managers or equivalent) thereof without the consent or acquiescence of any third party.

The Executive also agrees to serve, for any period for which the Executive is elected, as a member of the Board or as a director or officer of any Affiliate; provided, however, that the Executive shall not be entitled to any additional compensation for serving in any of such capacities.

Upon termination of Executive’s employment, for whatever reason, Executive agrees to resign immediately from the Board and from all Affiliate boards of directors on which he is then currently serving.

 

 

1.3.2

Performance of Duties. During the Term, the Executive agrees to serve the Company faithfully and to the best of the Executive’s ability and to devote the Executive’s full business time, attention and efforts to the business and affairs of the Company (exclusive of any period of vacation, sick, disability, or other leave to which the Executive is entitled).

The Executive hereby confirms that, during the Term, the Executive will not render or perform services for any other corporation, firm, entity or person that are inconsistent with the provisions of this Agreement, whether or not such activity is pursued for gain, profit, or other pecuniary advantage.

The rest of this Section 1.3.2 notwithstanding, the Executive may (a) serve on the board of one for-profit and other non-profit corporations (subject to the Executive having obtained the prior approval of the Chair of the Board’s Nominating and Corporate Governance Committee to serve on such a board in accordance with all of the Company’s policies, including, without limitation, the Company’s policy regarding conflicts of interest); (b) participate in industry organizations; (c) deliver lectures or fulfill speaking engagements; and (d) manage personal investments, so long as the activities referred to in clauses (a) through (d) above do not materially interfere with the performance of the Executive’s responsibilities under this Agreement. Notwithstanding the terms of clause (a) of the preceding sentence, the Executive agrees to resign from any and all boards of for-profit or non-profit corporations, as and when requested to do so by the

 

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Board at any time during the Term if, in its good faith judgment, the Board determines that such service (or continued service) by the Executive is not in the best interests of the Company.

The Executive will perform all of the Executive’s responsibilities in compliance in all material respects with all applicable laws and with all of the applicable policies generally in effect for employees of the Company or any applicable policies of the Company Affiliate for which the Executive performs services, including without limitation, the Company’s Code of Business Ethics and Conduct and related policies, as the same may be amended from time to time.

 

 

1.3.3

No Conflicting Obligations. The Executive represents that: (a) his acceptance of employment under the terms of this Agreement and his performance of the duties specified above will not conflict with any contractual or other obligations which he may owe to any former employers or other third parties, and (b) his performance of these duties will not require the disclosure of confidential information acquired by the Executive in confidence or in trust prior to Executive’s employment with the Company. Executive agrees to indemnify the Company and hold it harmless against any and all liabilities or claims arising out of any unauthorized act or acts by the Executive that are in violation of or constitute a breach of any such obligations. Executive agrees that he will not, hereafter, enter into any agreement, whether written or oral, which conflicts with his obligations under this Agreement.

ARTICLE II. COMPENSATION, BENEFITS AND EXPENSES

2.1 Base Salary. As his initial base compensation for all services he renders under this Agreement, the Executive shall receive an annualized base salary (“Annual Base Salary”) of Six Hundred Thousand Dollars ($600,000.00), starting on the Commencement Date. The Annual Base Salary shall be paid in accordance with the Company’s normal payroll procedures and policies, as such procedures and policies may be modified from time to time. The Annual Base Salary shall be reviewed and adjusted in the sole discretion of the Board’s Compensation Committee (the “Committee”) according to a schedule and in a manner consistent with the Company’s practices for salary adjustment for senior executives, which practices may be revised from time to time; provided, however, that, without the Executive’s consent, the Annual Base Salary may be reduced no more than 10% in connection with an across-the-board salary reduction by the Company similarly affecting all senior executives of the Company.

2.2 Incentive Compensation. While the Executive holds the position of Chief Executive Officer of the Company and the Company’s Amended and Restated Executive Management Incentive Plan (the “EMIP”) remains in effect, the Committee shall designate the Executive as a participant in the EMIP, subject to and in accordance with the terms and conditions thereof, including any goals the Committee establishes to govern the EMIP for any

 

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fiscal year. For the 2013 fiscal year (commencing in March 2012), Executive’s target incentive bonus under the EMIP shall be an amount equal to 100% of the Annual Base Salary actually paid to the Executive for that fiscal year.

2.3 Signing Bonus. In connection with Executive’s execution and delivery of this Agreement and commencement of employment with the Company, and to replace forfeited compensation earned at his previous employer, the Board has (i) granted to Executive, effective as of the Commencement Date and pursuant to the terms of award agreements (to be entered into by the Company and the Executive), the equity awards set forth on Exhibit A hereto and (ii) agreed to pay to the Executive a cash bonus, as further set forth on Exhibit A hereto (collectively, the “Signing Bonus”).

2.4 Benefit Plans: During the Term, the Executive shall be entitled to participate in the employee health and welfare and pension benefits programs offered generally by the Company to its executive employees, to the extent that the Executive’s position, tenure, salary, health, and other qualifications make the Executive eligible to participate. Such plans currently include, without limitation, the Company’s medical, dental and disability plans, and its executive deferred incentive compensation plan and 401(k) retirement plan, and reimbursement of financial and estate planning fees of up to $2,000 annually. The Executive’s participation in such benefits shall be subject to the terms of the applicable plans, as the same may be amended from time to time. The Company does not guarantee the adoption or continuance of any particular employee benefit or benefit plan during the Term, and nothing in this Agreement is intended to, or shall in any way restrict the right of the Company, to amend, modify or terminate any of its benefits or benefit plans during the Term.

2.5 Fiscal 2013 Restricted Stock Award. The Executive will be eligible to receive an award of time-based restricted stock, in accordance with the terms of the Company’s 2009 Stock Incentive Plan (the “2009 Stock Plan”) and the Company’s standard form of time-based restricted stock award agreement, when the Committee meets in March or April of 2012 with respect to the 2013 fiscal year annual awards. The specific amount of restricted shares to be awarded will be based upon the achievement by the Executive of certain mutually agreed business objectives for the fiscal 2012 year. The target value of such award shall be $400,000, to be determined as of the date of grant, using the closing price per share of the Company’s Common Stock on such date. The actual award may be more, but not less, than the target, depending on achievement of the business objectives. The actual award to be made shall be in the range of 100% to 160% of the target award, and all such awarded shares shall vest in three equal, annual installments, with the first vesting to occur on the first anniversary of the date of grant.

2.6 Fiscal 2013 Performance Share Unit Award. The Executive will be eligible to receive an award of performance share units (“PSUs”), in accordance with the terms of the 2009 Stock Plan and the Company’s standard form of performance share unit award agreement, when the Committee meets in March or April of 2012 with respect to the 2013-2015 fiscal year performance cycle. The target value of this PSU award shall have a value of $600,000, measured as of the date of grant. The actual award may be more or less than the target, depending on achievement, over the full three-year period, of the business objectives determined

 

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by the Committee at the time of grant. The actual award to be made shall be in the range of 0% to 200% of the target award, and the shares of Common Stock that are issued at the end of the three-year performance period are immediately vested. Dividends with respect to the shares underlying the PSUs will accrue during the three-year performance period and will be paid only on shares earned as of the end of the performance period.

2.7 Additional Equity Grants. The Executive will be eligible for consideration for additional grants of equity in the Company beginning with the fiscal year 2013 Company equity grant cycle (as set forth in Sections 2.5 and 2.6 above), and in conformity with the practices and procedures of the Committee as in effect at such time. During the Term, the Executive shall be entitled to participate in the equity plans offered generally by the Company to its executive employees, to the extent that the Executive’s position, tenure, salary and other qualifications make the Executive eligible to participate. In addition to the Stock Plan, such plans include the employee stock purchase plan of the Company.

2.8 Stock Ownership Guidelines. The Executive shall use commercially reasonable efforts to comply with the Company’s stock ownership guidelines for its executive officers, as such guidelines may be amended from time to time. For the Chief Executive Officer, those guidelines encourage stock ownership, within five years of becoming such officer, of an amount of stock equal in value to five times the Chief Executive Officer’s base salary. Stock ownership calculation shall be determined in accordance with the terms of the Company’s stock ownership guidelines.

2.9 Expenses. During the Term, the Executive shall be entitled to reimbursement for all reasonable business expenses he incurs in carrying out his duties under this Agreement in accordance with the policies and practices of the Company for submission of expense reports, receipts, or similar documentation of such expenses as in effect from time to time by the Company.

2.10 Vacation. The Executive shall be entitled to take up to 20 days of paid vacation per calendar year, subject to ensuring that the business and affairs of the Company shall be continued in normal fashion during his absence. Any unused vacation shall not be carried over into successive years and shall not have any cash value to the Executive.

ARTICLE III: TERMINATION OF EMPLOYMENT

3.1 Termination. The Executive’s employment under this Agreement may be terminated during the Term as described in this Article III.

3.1.1 Death or Disability. The Executive’s employment shall terminate automatically upon the Executive’s death. The Executive’s employment shall terminate in the event the Executive becomes “Totally Disabled.” For purposes of this Agreement, “Totally Disabled” means “totally disabled” as defined in the Company’s Group Long-Term Disability Plan applicable to senior executives as in effect on the Commencement Date, and as may be amended from time to time thereafter.

 

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3.1.2 Termination by the Company for Cause. The Company may terminate this Agreement and the Executive’s employment hereunder for Cause at any time after providing written notice to the Executive. For purposes of this Agreement, “Cause” means:

 

 

(a)

the failure or refusal of the Executive to perform substantially the Executive’s duties hereunder (other than as a result of total or partial incapacity due to physical or mental illness) including any breach of the Executive’s obligations under Section 1.3 hereof and any breach of the Executive’s fiduciary duties to the Company (including the Executive’s appropriation or attempted appropriation of a material business opportunity of the Company);

 

 

(b)

the engaging by the Executive in intentional or willful misconduct which is materially injurious to the reputation, business, financial condition or business relationships of the Company or the Executive’s reputation or business relationships;

 

 

(c)

perpetration of an intentional fraud against or affecting the Company or any customer, supplier, client, agent, or executive thereof;

 

 

(d)

conviction (including conviction on a nolo contendere plea) of a felony or any crime involving fraud, dishonesty or moral turpitude; or

 

 

(e)

the breach of any covenant set forth in Article IV or V hereof;

provided, however that:

 

 

(i)

a termination pursuant to clauses (b) or (c) shall not become effective unless the Company has delivered written notice to the Executive describing Executive’s actions constituting “Cause” and the Executive has failed to convince the Board within fifteen business (15) days thereafter that his actions did not constitute “Cause” as described in such notice; and

 

 

(ii)

a termination pursuant to clauses (a) or (e) above, if susceptible of cure, shall not become effective unless the Executive fails to cure such failure to perform or breach within forty-five (45) days after written notice from the Company identifying what reasonable actions shall be required to cure such failure to perform.

3.1.3 Termination by the Company without Cause. The Company may terminate this Agreement and the Executive’s employment hereunder for any reason or no reason at any time after providing written notice to the Executive. If the Company terminates the Executive’s employment for any reason other than Cause, then the terms of Section 3.2.3 shall apply.

 

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3.1.4 Termination by the Executive For Good Reason. The Executive may terminate his employment for Good Reason during the Term. For purposes of this Agreement, “Good Reason” means:

 

 

(a)

except with the Executive’s written consent given in the Executive’s discretion, the assignment to the Executive of any position and/or duties which represent or otherwise entail a material diminution in the Executive’s position (including status, office, title and reporting requirements), authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial or inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of written notice thereof given by the Executive, but including any diminution attributable to the fact that the Company is no longer a public company;

 

 

(b)

any material reduction in the Executive’s aggregate compensation and incentive opportunities (other than a reduction that applies generally to all senior executive officers of the Company);

 

 

(c)

the failure by the Board to nominate the Executive as a candidate to serve as a member of the Board;

 

 

(d)

a requirement to relocate his principal residence to a location other than the Twin Cities metropolitan region; or

 

 

(e)

the material breach by the Company of any of its obligations under this Agreement.

The Executive shall have Good Reason to terminate his employment if (i) within forty-five (45) days following the Executive’s actual knowledge of the event which the Executive determines constitutes Good Reason, he notifies the Company in writing that he has determined a Good Reason exists and specifies the event creating Good Reason, (ii) following receipt of such notice, the Company fails to remedy such event within forty-five (45) days, and (iii) the Executive terminates his employment within thirty (30) days after the end of such cure period. If any of the conditions is not met, the Executive shall not have a Good Reason to terminate his employment.

3.1.5 Continuation of Provisions. Notwithstanding any termination of the Executive’s employment with the Company, the Executive, in consideration of the Executive’s employment hereunder to the date of employment termination (the “Termination Date”), shall remain bound by the provisions of this Agreement which specifically relate to periods, activities or obligations upon or subsequent to the termination of the Executive’s employment, including, but not limited to, the covenants contained in Articles IV and V hereof.

3.1.6 Surrender of Records and Property. Upon any termination of the Executive’s employment with the Company, the Executive shall deliver promptly to the

 

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Company the Executive’s security access card, and all records, manuals, books, blank forms, documents, letters, memoranda, notes, notebooks, reports, computer disks, computer software, computer programs (including source code, object code, on-line files, documentation, testing materials and plans and reports), designs, drawings, formulae, data, tables or calculations or copies thereof, which are the property of the Company or any Company Affiliate or which relate in any way to the business, products, practices or techniques of the Company or any Company Affiliate, and all other property, trade secrets and “Confidential Information” (as defined in Section 4.1) of the Company or any Company Affiliate, including, but not limited to, all tangible, written, graphical, machine readable and other materials (including all copies) which in whole or in part contain any trade secrets or Confidential Information of the Company or any Company Affiliate which in any of these cases are in the Executive’s possession or under the Executive’s control. This includes all copies or specimens in the Executive’s possession, whether prepared or made by others or the Executive. Upon any termination of the Executive’s employment, the Executive shall also refrain from accessing the Company’s files via computer or modem. The Executive shall acknowledge in writing the return of all such materials, when requested to do so by the Company.

Notwithstanding the foregoing, the Executive shall be entitled to retain one copy of this Agreement, any stock option, restricted stock, PSU or other plan or agreement with the Company pursuant to which the Executive retains any rights at the Termination Date, and documentation provided to the Executive during his employment relating to such compensation or benefits.

3.2 Compensation Following Termination of Employment. Upon the termination of the Executive’s employment with the Company, the Executive shall be entitled only to the following compensation and benefits upon such termination:

3.2.1 Termination by Reason of the Executive’s Death or Total Disability. In the event that the Executive’s employment is terminated by reason of the Executive’s death or Total Disability, then the Company shall pay the following amounts to the Executive, the Executive’s spouse or his estate, as the case may be: (a) any amounts due to the Executive for Annual Base Salary through the date of employment termination, together with (b) any other unpaid amounts to which the Executive is entitled as of the Termination Date pursuant to Article II of this Agreement, including, without limitation, amounts that the Executive is entitled to under any benefit plan of the Company in accordance with the terms of such plan.

Except as otherwise set forth above (or in any applicable award agreement between the Company and the Executive which is in effect on the Termination Date hereunder), the Executive will have no rights to any unvested benefits or any other compensation or payments coming due after the Termination Date.

3.2.2 Termination by the Company for Cause or by the Executive Without Good Reason. If the Executive’s employment is terminated by the Company for Cause or the Executive voluntarily terminates employment without Good Reason, the Company shall pay to the Executive (a) any Annual Base Salary earned but not paid through the Termination Date, plus (b) the amount of any other benefits to which the Executive is legally entitled as of the Termination Date under the terms and conditions of any benefit plans of the Company in which the Executive is participating as of the Termination Date. The Company shall have no further obligations under this Agreement.

 

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3.2.3 Termination by the Executive for Good Reason or by the Company Without Cause. In the event that the Executive’s employment is terminated by the Executive for Good Reason or by the Company without Cause, and provided that the Executive has executed a written release to the Company in substantially the same form attached hereto as Exhibit B and the rescission period specified therein has expired, the Company shall, within forty-five (45) days of the Termination Date, pay the following amounts to the Executive; provided, however, that, if the 45-day period begins in one calendar year and ends in a second calendar year, the such severance payment shall be paid in the second calendar year:

 

 

(a)

as severance, a multiple of the Executive’s then-current level of Annual Base Salary plus then-current level of target bonus under the EMIP (or its equivalent at the Termination Date), as set forth below, payable in accordance with regular Company payroll practices:

 

Year of Termination

  

Severance Multiple

Commencement Date through the day prior to the first anniversary of the Commencement Date

  

Three times (3X)

First anniversary of Commencement Date through the day prior to the second anniversary of the Commencement Date

  

Two times (2X)

Second anniversary of Commencement Date through the day prior to the fifth anniversary of the Commencement Date

  

One times (1X)

Fifth anniversary of Commencement Date and thereafter

  

Zero times (0X) (i.e., no special severance payment under the terms of this Agreement)

 

 

(b)

A lump sum payment, equal to an amount equivalent to the cost, at the Termination Date, of insurance premiums sufficient to pay for the continuation of medical and dental insurance for the applicable severance period, as set forth in the above table, based on the coverage level and coverage options in place at the time of the Executive’s employment termination date;

 

 

(c)

Automatic acceleration of any unvested Signing Bonus awards; all other unvested equity awards held by Executive would be treated in accordance with the terms of the applicable award agreement;

 

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(d)

any Annual Base Salary earned but not paid through the Termination Date;

 

 

(e)

any reimbursable expenses incurred prior to the Termination Date by the Executive in accordance with Section 2.9 that have not been reimbursed by the Company as of the Termination Date;

 

 

(f)

any compensation previously earned, paid to and deferred by the Executive (including any earnings thereon accrued to an account designated for the benefit of the Executive) in accordance with the terms and conditions of any deferred compensation plan of the Company in which the Executive is participating as of the Termination Date, in all cases, to the extent such deferred compensation and/or earnings thereon have vested as of the Termination Date; and

 

 

(g)

any other unpaid amounts to which the Executive is entitled as of the Termination Date pursuant to Article II of this Agreement, including, without limitation, amounts that the Executive is entitled to under any benefit plan of the Company in accordance with the terms of such plan.

3.2.4 Statutory Compensation at Employment Termination. In addition to the foregoing compensation payable at employment termination, the Executive shall be entitled to receive the following, but only to the extent then-mandated by Minnesota law at the Termination Date:

 

 

(a)

A lump sum payment equal to the Executive’s earned but unused vacation accrued under Apogee’s regular vacation policy through the Termination Date; and

 

 

(b)

The Executive shall have the right to continue, at the Executive’s expense, to participate in Apogee’s group life insurance program for the legally required period following the Termination Date.

3.2.5 No Other Compensation or Continuing Benefits. For the avoidance of doubt, the parties acknowledge and agree that, after the Termination Date, the Executive shall not continue to participate in any benefit or retirement plans of the Company, except with respect to balances of deferred accounts, if any, existing in any such plan as of the Retirement Date.

Except as otherwise specifically set forth in this Section 3.2, the Company shall have no further obligations to pay any compensation of any kind to the Executive after his Termination Date under this Agreement.

3.3 No Other Benefits. If the Executive receives the payments and benefits described in this Article III, the Executive will not be eligible to receive from the Company or any Affiliate any other severance or termination payments or benefits of any kind, including but not limited to those provided in Article II of this Agreement. Furthermore, this Agreement is not

 

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intended to provide the Executive with payments or benefits that are duplicative or overlap payments or benefits that will be paid or provided to the Executive under other agreements between the Executive and the Company or its Affiliates. Accordingly, except as provided herein, the Executive acknowledges that this Agreement shall supersede and replace in their entirety any and all other policies and/or agreements to which the Executive and the Company or any of its Affiliates are a party that provide severance or continuation of income payments to the Executive or the Executive’s family following the Termination Date, except the Change in Control Severance Agreement dated as of the date hereof (the “CIC Severance Agreement”). This Agreement will be superseded and replaced in its entirety by the CIC Severance Agreement on the “Effective Date” (as defined therein) or upon the termination, prior to the Effective Date, of the Executive’s employment by (i) the Company without Cause or (ii) the Executive for Good Reason, where the effect of such termination is to entitle the Executive to receive the benefits described in Sections 4 and 5 of the CIC Severance Agreement as a result of the occurrence of event or circumstances described in Section 2(b)(iii) of the CIC Severance Agreement.

ARTICLE IV: CONFIDENTIAL INFORMATION

4.1 Nondisclosure. At all times during the Executive’s employment and after the Termination Date, the Executive will hold in the strictest confidence and will not disclose, use, lecture upon or publish any of the Company’s Confidential Information, except as such disclosure, use or publication may be required in connection with the Executive’s work for the Company, or unless the Company expressly authorizes such disclosure in writing. The Executive will obtain the Company’s written approval before publishing or submitting for publication any material (written, verbal or otherwise) that relates to the Executive’s work at the Company and/or incorporates any Confidential Information. The Executive hereby assigns to the Company any and all rights, title and interest the Executive may have or acquire in the Confidential Information and recognizes that all of the Confidential Information is and shall be the sole property of the Company and its successors and assigns.

As used herein, “Confidential Information” means information that was developed, created, or discovered by or on behalf of the Company or any of its Affiliates, or which became or will become known by, or was or is conveyed to the Company, which has commercial value in the Company’s business. “Confidential Information” includes, but is not limited to, customer and mailing lists, cost and pricing information, employee data, financial data, business plans, sales and marketing plans, business acquisition or divestiture plans, research and development activities relating to existing commercial activities and new products, services and offerings under active consideration, software programs, and trade secrets which the Executive may have acquired during the course of his employment with the Company or its Affiliates or which is received in confidence by or for the Company from any other person. The foregoing obligation shall not apply to (i) any information which was known to the Executive prior to disclosure to him by the Company or any of its Affiliates; (ii) any information which was in the public domain prior to its disclosure to the Executive; (iii) any information which comes into the public domain through no fault of the Executive; (iv) any information which the Executive is required to disclose by a court or similar authority or under subpoena, provided that the Executive provides the Company with notice thereof and assists, at the Company’s or its Affiliates sole expense, any

 

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reasonable endeavor of the Company or any of its Affiliates by appropriate means to obtain a protective order limiting the disclosure of such information; and (v) any information which is disclosed to the Executive by a third party which has a legal right to make such disclosure.

ARTICLE V: NON-COMPETITION, NON-SOLICITATION NON-HIRE AND NON-DISPARAGEMENT

5.1 Non-Competition Covenant. In consideration of the financial and other benefits described in this Agreement, the Executive agrees that, during the period commencing on the Commencement Date and ending on the date that is two (2) years after the Termination Date (without regard for the reason for such termination and whether such termination is occasioned by the Company or the Executive), the Executive shall not, directly or indirectly, and in any manner or capacity (e.g., as an advisor, principal, agent, partner, officer, director, investor, shareholder, employee, member of any association or otherwise), engage in any business activities that are competitive with any of the businesses conducted, or planned to be conducted, by the Company or any Company Affiliate during the one-year period ending on the Termination Date.

5.2 Geographical Extent of Covenant. The Executive acknowledges that the Company directly, or indirectly through the Company Affiliates, currently is engaged in business throughout North America and South America, including each county, state and province thereof. Consequently, the Executive agrees that his obligations under this Article V shall apply in any market in North America or South America in which: (a) the Company or, as applicable, a Company Affiliate(s), operates during the one-year period described in the last two lines of Section 5.1; and (b) the Company or, as applicable, a Company Affiliate(s), has plans to enter on the date the Executive ceases to be employed by the Company.

5.3 Limitation on Covenant. Ownership by the Executive, as a passive investment, of less than one percent (1%) of the outstanding shares of capital stock of any corporation listed on a national securities exchange or publicly traded in the over-the-counter market shall not constitute a breach of this Article V.

5.4 Non-Solicitation And Non-Hire. The Executive agrees that, for a period of two (2) years after the Termination Date, without regard for the reason for such termination (and whether occasioned by the Company or the Executive), the Executive shall not, except with the prior written consent of the Company: (a) hire or attempt to hire for employment any person who is employed by the Company or a Company Affiliate, or attempt to influence any such person to terminate employment with the Company or any Company Affiliate; (b) induce or attempt to induce any employee of the Company or any Company Affiliate to work for, render services to, provide advice to, or supply confidential business information or trade secrets of the Company or any Company Affiliate to any third person, firm or corporation; or (c) induce or attempt to induce any customer, supplier, licensee, licensor or other business relation of the Company or any Company Affiliate to cease or reduce doing business with the Company or such Company Affiliate, or in any way interfere with the relationship between any such customer,

 

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supplier, licensee, licensor or other business relation and the Company or any Company Affiliate. Nothing herein shall prohibit the Executive from general advertising for personnel not specifically targeting any employee or other personnel of the Company, or from hiring any such employee or other personnel responding to such general advertising.

The foregoing limitations shall not apply with respect to: (i) any former employee of the Company whose employment terminated prior to the Commencement Date, or (ii) any employee of the Company whose employment is terminated after the Commencement Date and prior to the Termination Date, so long as at least six (6) months have passed between the Termination Date and the date of any action by the Executive set forth in the first sentence of this Section 5.4.

5.5 Non-Disparagement. During and after the Term:

(a) the Executive agrees not to make any remarks (whether in public or private) knowingly or intentionally disparaging the Company or any Company Affiliate, or their respective products, services, officers, director or employees, whether past or current, including any present, former or future director, officer, employee or agent of the Company or any Company Affiliate. The provisions of this Section 5.5(a) shall not apply to any truthful statement(s) required to be made by the Executive or by any representative of the Executive in any legal proceeding or governmental (including all agencies thereof) or regulatory filing, investigation or proceeding; and

(b) the Company agrees that none of its Senior Representatives (as defined below) will make any remarks (whether in public or private) knowingly or intentionally disparaging the Executive. The provisions of this Section 5.5(b) shall not apply to any truthful statement(s) required to be made by the Company or by any representative of the Company in any legal proceeding or governmental (including all agencies thereof) or regulatory filing, investigation or proceeding. For purposes of this Section 5.5(b), the term “Senior Representatives” shall mean each of the Company’s directors and its Chief Financial Officer, General Counsel, Vice President Human Resources, and Vice President and Treasurer.

ARTICLE VI: DISPUTE RESOLUTION PROCESS

6.1 Dispute Defined. The Company and the Executive desire to establish a reasonable and confidential means of resolving any dispute, question or interpretation arising out of or relating to (i) this Agreement or the alleged breach or threatened breach of it, (ii) the making of this Agreement, including claims of fraud in the inducement, (iii) the Executive’s employment by the Company pursuant to this Agreement, including claims of wrongful termination or discrimination, or (iv) any activities by the Executive restricted by Articles IV and V of this Agreement following the cessation of his employment with the Company (each such dispute to be referred to herein as a “Dispute”).

6.2 Procedure. In furtherance of the parties’ mutual desire, the Company and the Executive agree that if either party believes a Dispute exists, that party shall provide the other with written notice of the claimed Dispute. Upon receipt of that written notice, the following

 

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procedure shall be the exclusive means of fully and finally resolving the Dispute. First, within thirty (30) days of the other party receiving that notice, the Executive and appropriate representatives of the Company and/or Board will meet to attempt to resolve amicably the Dispute. Second, if a mutually agreeable resolution is not reached within thirty (30) days following the parties’ first meeting, the parties will engage in mediation with a mutually agreeable neutral mediator, said mediation to be held within forty-five (45) days of the final meeting between the Executive and representatives of the Company and/or Board. The Company shall pay the fees and expenses of the mediator. Third, if the Dispute is not resolved through mediation within thirty (30) days, the Dispute shall be resolved exclusively by final and binding arbitration held in accordance with the provisions of this Agreement and the American Arbitration Association (“AAA”) National Rules for the Resolution of Employment Disputes then in effect, unless such rules are inconsistent with the provisions of this Agreement. In connection with such arbitration:

 

 

(a)

Any such arbitration shall be conducted: (i) by a neutral arbitrator appointed by mutual agreement of the parties; or (ii) failing such agreement, by a neutral arbitrator appointed in accordance with said AAA rules;

 

 

(b)

The parties shall be permitted reasonable discovery in accordance with the provisions of the Minnesota Rules of Civil Procedure, including the production of relevant documents by the other party, the exchange of witness lists, and a limited number of depositions, including depositions of any expert who will testify at the arbitration;

 

 

(c)

The arbitrator’s award shall include findings of fact and conclusions of law showing the legal and factual basis for the arbitrator’s decision, which decision shall be final and binding upon the parties;

 

 

(d)

The arbitrator shall have the authority to award to the prevailing party any remedy or relief that a United States District Court or court of the State of Minnesota could order or grant if the dispute had first been brought in that judicial forum, including costs and attorneys’ fees;

 

 

(e)

The arbitrator’s award may be entered as a judgment by any court of competent jurisdiction; and

 

 

(f)

Unless otherwise agreed by the parties, the place of any arbitration proceeding shall be Minneapolis, Minnesota.

6.3 Confidentiality of Dispute Resolution. Except as the parties shall agree in writing, upon court order, or as required by law, neither the Company nor the Executive will disclose to any third party, except for their counsel, retained experts and other persons directly serving counsel or retained experts, any fact or information in any way pertaining to the process of resolving a Dispute under this Article VI, or to the fact of or any term that is part of a

 

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resolution or settlement of any Dispute. This prohibition on disclosure specifically includes, without limitation, any disclosure of an oral statement or of a written document made or provided by either the Executive or the Company, or by any of its or his representatives, counsel or retained experts, or other persons directly serving any representatives, counsel or retained experts.

6.4 Right to Injunctive Relief. The Executive acknowledges and agrees that the services to be rendered by him hereunder are of a special, unique and extraordinary character, that it would be difficult to replace such services and that any violation of the Executive’s obligations under either Article IV or Article V would be highly injurious to the Company and/or to any Company Affiliate and that it would be extremely difficult to compensate the Company and/or any Company Affiliate fully for damages for any such violation. Accordingly, notwithstanding the terms of this Article VI, the Company or any Company Affiliate, as the case may be, shall be entitled to seek, without the necessity of posting bond or proving any monetary damages and without any requirement to engage in any dispute resolution process outlined in this Article VI, temporary and permanent injunctive relief from a court of law, in the event of violation by the Executive of any of his obligations under any provision of either Article IV or Article V. This provision with respect to injunctive relief shall not, however, diminish the right of the Company, any Company Affiliate or the Executive to claim and recover damages, or to seek and obtain any other relief available to it pursuant to the provisions of this Article VI.

ARTICLE VII: ASSIGNMENT; SUCCESSORS.

7.1 Assignment. This Agreement is personal to the Executive and, without the prior written consent of the Company, shall not be assignable by the Executive. This Agreement shall inure to the benefit of and be enforceable by the Executive’s heirs, executors and administrators.

7.2 Successors. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns, provided that the Company may not assign this Agreement except in connection with the assignment or disposition of all or substantially all of the assets or stock of the Company, or by law as a result of a merger or consolidation.

ARTICLE VIII: MISCELLANEOUS PROVISIONS

8.1 Notices. All notices and other communications under this Agreement shall be in writing and shall be given by hand delivery to the other party, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Executive:

500 E. Grant St.

Apt. #1710

Minneapolis, MN 55404

 

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With a copy to:

Kaplan, Strangis and Kaplan, P.A.

5500 Wells Fargo Center

90 South Seventh Street

Minneapolis, Minnesota 55402

Attention: Jim Melville

If to the Company by mail or fax:

Apogee Enterprises, Inc.

4400 West 78th Street

Suite 520

Minneapolis, Minnesota 55435

Attention: General Counsel

or to such other address as either party furnishes to the other in writing in accordance with this paragraph. Notices and communications shall be effective when actually received by the addressee or three (3) days after the initiation of delivery; provided that this period will not extend any period of notice specifically set forth in this Agreement.

Any party may change the address for the purpose of this Section by giving the other written notice of the new address in the manner set forth above.

8.2 Enforceability. The parties intend that each of the covenants referenced in Section 5 hereof shall be construed as a series of separate covenants, one for each state of the United States, one for each county of each state of the United States, one for each province of Canada and one for each state of Mexico. To the extent any provision of this Agreement shall be determined to be invalid or unenforceable in any jurisdiction, such provision shall be deemed to be deleted from this Agreement as to such jurisdiction only, and the validity and enforceability of the remainder of such provision and of this Agreement shall be unaffected. In furtherance of and not in limitation of the foregoing, the Executive and the Company expressly agree that should the duration of, geographical extent of, or business activities covered by, any provision of this Agreement be in excess of that which is valid or enforceable under applicable law in a given jurisdiction, then such provision, as to such jurisdiction only, shall be construed to cover only that duration, extent or activities that may validly or enforceably be covered. The unenforceability of any covenant in Section 5 hereof shall not preclude the enforcement of any other of said covenants or provisions or of any other obligation of the Executive hereunder, and the existence of any claim or cause of action of the Company against the Executive, whether predicated on the Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of any of said covenants. The Company and the Executive acknowledge the uncertainty of the law in this area with respect to Section 5 hereof, and expressly stipulate that this Agreement is to be given the construction that renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law.

 

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8.3 Taxes. Notwithstanding any other provision of this Agreement, the Company shall withhold from any amount payable under this Agreement all federal, state, local and foreign taxes that are required to be withheld by applicable laws or regulations, or that are consistent with the Company’s prevailing practice.

8.4 Governing Law, Construction, and Severability. The validity, interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Minnesota. In the event any provision of this Agreement shall be held illegal or invalid for any reason, said illegality or invalidity shall not in any way affect the legality or validity of any other provision of this Agreement. It is the intention of the parties hereto that the Company be given the broadest possible protection respecting its Confidential Information and trade secrets and respecting competition by the Executive following the Executive’s separation from the Company.

8.5 Venue. Any action at law, suit in equity or judicial proceeding arising directly, indirectly or otherwise in connection with, out of, related to or from this Agreement or any provision hereof shall be litigated only in the State of Minnesota, Hennepin County District Court, or the United States District Court for the District of Minnesota. The Executive waives any right the Executive may have to transfer or change the venue of any litigation brought against the Executive by the Company.

8.6 Entire Agreement. This Agreement (together with the Exhibits attached hereto and the other agreements between the Company and the Executive referenced herein) is the final, complete and exclusive agreement of the parties with respect to the subject matter hereof and supersedes all prior discussions between the Company and the Executive regarding the subject matter hereof. No modification of, or amendment to, this Agreement, nor any waiver of either party’s rights under this Agreement, will be effective unless in writing and signed by both parties. Any subsequent change or changes in the Executive’s duties, obligations, salary or compensation will not affect the validity or scope of this Agreement.

8.7 Counterparts. This Agreement may be simultaneously executed in any number of counterparts, and such counterparts executed and delivered, each as an original, shall constitute but one and the same instrument.

8.8 Captions and Headings. The captions and paragraph headings used in this Agreement are for convenience of reference only, and shall not affect the construction or interpretation of this Agreement or any of the provisions hereof.

8.9 Survivability. The provisions of this Agreement that by their terms call for performance subsequent to termination of the Executive’s employment under this Agreement, or of this Agreement, shall so survive such termination. For purposes of clarification and not in limitation of the foregoing sentence, the parties acknowledge and agree that (a) Articles IV, V and VIII, and Section 3.1.6 shall survive the termination of this Agreement, and (b) Section 3.2.3 shall survive through the fifth anniversary of the Commencement Date.

 

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8.10 Waiver. No waiver by the Company or the Executive of any breach or violation of this Agreement shall be a waiver of any preceding or succeeding breach or violation. No waiver by the Company or the Executive of any right under this Agreement shall be construed as a waiver of any other right hereunder. Except as otherwise provided in Section 3.1.2 or Section 3.1.4, neither the Company nor the Executive shall not be required to give notice to enforce strict adherence to any of the terms or conditions of this Agreement.

8.11 Advice of Counsel. The Executive acknowledges that he has been provided the opportunity to seek, and has obtained, the advice of counsel in connection with the negotiation and execution of this Agreement.

8.12 No Strict Construction. Each of the Executive and the Company acknowledges and agrees that the language used in this Agreement and the other agreements referred to herein is, and shall be deemed to be, the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against either party hereto.

8.13 Legal and Consulting Fees. The Company shall reimburse the Executive for the reasonable, and appropriately documented, fees and expenses of legal counsel, compensation consultants and tax and accounting advisers to the Executive in connection with the negotiation and execution of this Agreement, up to a maximum total reimbursement of $25,000.

8.15 Section 409A Compliance.

(a) The parties believe that, if amounts are paid at the time or times indicated in this Agreement, the payments will not be required to be delayed for six months under 409(a)(2)(B) of the Internal Revenue Code of 1986, as amended (the “Code”). Notwithstanding anything to the contrary in this Agreement, however, if, at the time of the Executive’s “separation from service” within the meaning of Section 409A of the Code, the Company determines that the Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then, to the extent any payment or benefit that the Executive becomes entitled to under this Agreement on account of the Executive’s separation from service would be considered deferred compensation subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (A) six months and one day after the Executive’s separation from service, or (B) the Executive’s death.

(b) To the extent that any payment or benefit under or pursuant to this Agreement is payable upon the Executive’s termination of employment, then such payments or benefits shall be payable only upon the Executive’s “separation from service” to the extent necessary to comply with Section 409A of the Code. The determination of whether and when a “separation from service” has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A 1(h). Each payment made under this Agreement shall be treated as a separate payment for purposes of Section 409A of the Code.

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to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code. The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to comply fully with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder.

(d) The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

EXECUTIVE

/s/ Joseph F. Puishys

Joseph F. Puishys

APOGEE ENTERPRISES, INC.

By

 

/s/ Bernard P. Aldrich

 

Bernard P. Aldrich

 

Director and Non-Executive Chair of the Board of Directors of Apogee Enterprises, Inc

 

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EXHIBIT A

SIGNING BONUS

A. Sign-On Equity Awards: Subject to entering into standard forms of award agreements for each award, the Board hereby awards to the Executive, effective as of the Commencement Date, the following equity awards in connection with the commencement of his duties as Chief Executive Officer. All such stock awards are being made as “inducement grants” pursuant to NASDAQ Stock Market Listing Rule 5635(c)(4):

1. Time-Based Restricted Stock (the “Retention Grant”): Executive will receive restricted shares of Company Common Stock valued at $1,300,000, using the closing price per share of the Company’s Common Stock as reported on the NASDAQ Stock Market on the date of grant. The award will vest in equal annual increments over a five-year period, commencing on the first anniversary of the date of the award. The shares of restricted stock will include the right to receive dividends, in accordance with the terms of the related award agreement.

2. Time-Based Stock Options (the “Performance Grant”): Executive will receive options to acquire shares of Company Common Stock valued at $1,300,000, using a Black-Scholes valuation of the Company Common Stock, based on its closing price per share as reported on the NASDAQ Stock Market on the date of grant. The exercise price of each such option shall be equal to the closing price per share of the Company; Common Stock on the date of grant. The award will vest in equal annual increments over a three-year period, commencing on the first anniversary of the date of the award.

3. Unrestricted Stock Award (the “Bonus Offset”): Executive will receive shares of Company Common Stock valued at $500,000, using the closing price per share of the Company’s Common Stock as reported on the NASDAQ Stock Market on the date of grant. The award will vest immediately on the date of grant, and is being made in lieu of the Executive participating in the fiscal year 2012 EMIP.

B. Cash Bonus: The Board hereby agrees to cause the Company to pay to the Executive, in connection with the commencement of his duties as Chief Executive Officer, a cash bonus of $500,000 the “Cash Bonus”), payable following the end of the 2012 fiscal year at the time that cash incentive awards are customarily made by the Committee (i.e., in March or April of 2012); provided that, the Executive continues to be employed as Chief Executive Officer of the Company on such payment date. Notwithstanding the foregoing, if the Executive’s employment has been terminated by the Company without Cause, or by the Executive with Good Reason, prior to such payment date, then the Executive shall continue to receive the Cash Bonus on such payment date.

 

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EXHIBIT B

Form of Release

RELEASE

This Release (“Release”) is entered into as of                     , 20    , by and between Apogee Enterprises, Inc., a Minnesota corporation (“Apogee”), and Joseph F. Puishys (“Executive”), an individual residing in the State of Minnesota.

1. Release of Claims. In consideration of the promises, covenants and other valuable consideration provided by Apogee under the Employment Agreement dated as of                     , 2011, by and between Apogee and Executive (the “Employment Agreement”) and otherwise, Executive, on behalf of himself, his spouse, successors, heirs, and assigns, and except as expressly set forth herein, hereby unconditionally and forever releases and discharges Apogee, including its parents, affiliates, subsidiaries, and business units, and their current or former shareholders directors, officers, employees, agents, predecessors, successors, assigns, and insurers (collectively referred to as “Released Parties”) to the fullest extent permitted by law from any and all debts, demands, promises, agreements, claims, causes of action, losses, obligations, liabilities, damages, judgments, costs, expenses (including, but not limited to, attorneys’ fees) of any nature whatsoever, known or unknown, contingent or non-contingent (collectively, “Claims”), that Executive had or has as of the date of this Release arising out of or in any way relating to Executive’s hiring, employment, or separation from employment with Apogee, including but not limited to any Claims (i) under any federal, state or local law, regulation, rule or ordinance including, but not limited to, the Age Discrimination in Employment Act of 1967 (“ADEA”), 42 U.S.C. §§ 1981-1988, Title VII of the Civil Rights Act of 1964 (“Title VII”), the Equal Pay Act, the Employee Retirement Income Security Act of 1974 (“ERISA”), the National Labor Relations Act, the Occupational Safety and Health Act (“OSHA”), the Family and Medical Leave Act of 1993 (“FMLA”), the Workers Adjustment and Retraining Notification Act (“WARN”), the Americans with Disabilities Act of 1990 (“ADA”), the Minnesota Human Rights Act (“MHRA”), and any provision of the Minnesota or federal Constitutions; (ii) otherwise for retaliation; harassment; discrimination on any basis; or any related cause of action; as well as for salary, wages, severance pay, vacation pay, sick pay, bonuses, benefits, pension, stock options, overtime, and any other compensation or benefit of any nature; (iii) grounded on contract or tort theories, including but not limited to claims for wrongful discharge, breach of express or implied contract, implied covenant of good faith and fair dealing, intentional or negligent infliction of emotional distress, violation of public policy, conspiracy, invasion of privacy, tortious interference with contract or current or prospective business relationships, promissory estoppel, breach of fiduciary or other duty, breach of manuals or other policies, assault, battery, fraud, false imprisonment, misrepresentation, defamation, including libel, slander, and self-publication defamation, or (iv) any other claim of any kind whatsoever, including but not limited to any claim for damages or declaratory or injunctive relief of any kind. Furthermore, Executive relinquishes any right to re-employment with Apogee or the Released Parties. Executive also relinquishes any right to further payment or benefits under any employment agreement, benefit plan or severance arrangement maintained or previously or

 

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subsequently maintained by Apogee or any of the Released Parties or any of its respective predecessors or successors, except that he does not release any post-employment rights he has under the Employment Agreement or any plans referenced in that Agreement. Executive also does not release his right to indemnification and advancement of expenses for defense under any agreement he has entered into with Apogee, under Apogee’s charter or by-laws or under any insurance policy maintained by Apogee that is applicable to its current or former directors and officers, or under any applicable law relating to officers, directors or employees.

2. No Claims Against Released Parties. Executive warrants and represents that he has not filed any claims, charges, complaints or actions against any Released Party, or assigned or transferred or purported to assign or transfer to any person or entity all or any part of or any interest in any claim released herein, and covenants that to the fullest extent permitted by law, he will not sue or otherwise institute or cause to be instituted against Apogee or any of the Released Parties any claim, lawsuit or other legal or administrative proceeding that is related to any matters released by Executive under Section 1 of this Release. Executive agrees that if he brings or asserts any such action or lawsuit, he shall pay all costs and expenses, including reasonable attorneys’ fees, incurred by Apogee or the Released Parties in dismissing or defending the action or lawsuit. Executive further agrees that if any claim arising out of any act or omission occurring before Executive’s execution of this Release is prosecuted in his name before any court or administrative agency that he waives and agrees not to take any award, damages or other individual relief (legal or equitable) from such claim to the fullest extent permitted by law. If any agency or court assumes jurisdiction of any complaints, claims, or actions against any Released Party by or on behalf of Executive arising out of any act or omission occurring before Executive’s execution of this Release, Executive will request that the agency or court withdraw the matter or dismiss the matter in its entirety, with prejudice, and will execute all necessary documents to effect such withdrawal and/or dismissal with prejudice. Nothing in this provision, however, shall be interpreted to prevent executive from: (a) bringing a claim or lawsuit to enforce the terms of this Release or the post-employment rights provided in the Employment Agreement; (b) filing a charge with, or participating in any investigation conducted by, a governmental agency; or (c) challenging or seeking a determination in good faith of the validity of Executive’s release under the ADEA.

3. Rescission. Executive has been informed of his right to revoke this Release insofar as it extends to potential claims under the ADEA by informing Apogee of his intent to revoke this Release within seven (7) calendar days following his execution of this Release. Executive has likewise been informed of his right to rescind this Release insofar as it relates to potential claims under the Minnesota Human Rights Act by written notice to Apogee within fifteen (15) calendar days following his execution of this Release. Executive has further been informed and understands that any such rescission must be in writing and hand-delivered to Apogee or, if sent by mail, postmarked within the applicable time period, sent by certified mail, return receipt requested, to Apogee as set forth in Section 6 hereof.

Executive and Apogee agree that if Executive exercises this right of rescission, this Release shall be null and void and Executive shall not receive or, if received, shall return in full to Apogee any consideration paid or benefit provided in connection with this Release contemporaneously with

 

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the delivery of rescission notice. Executive specifically understands and agrees that (a) any attempt by him to revoke this Release after the specified period for rescission has expired is, or will be, ineffective; (b) if he exercises his right to rescind, then Apogee will have no further obligations to him or to others whose rights derive from him to pay any severance or provide any future benefits under the Employment Agreement; and (c) rescission by Executive will have no effect upon his separation from employment.

4. Breach of this Release. If a court of competent jurisdiction determines that either party has breached or failed to perform any part of this Release, the parties agree that the non-breaching party shall be entitled to injunctive relief to enforce this Release and that the breaching party shall be responsible for paying the non-breaching party’s costs and attorneys’ fees incurred in enforcing this Release.

5. Severability. Whenever possible, each provision of this Release shall be interpreted in such a manner as to be effective and valid under applicable law and to carry out each provision herein to the greatest extent possible, but if any provision of this Release is held to be void, invalid, illegal or for any other reason unenforceable, the parties agree that the validity, legality and enforceability of the remaining provisions of this Release will not be affected or impaired thereby, and will be interpreted so as to effect, as closely as possible, the intent of the parties hereto.

6. Notices. All notices and other communications hereunder will be in writing. Any notice or other communication hereunder shall be deemed duly given if it is sent by registered or certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient as set forth:

If to Executive: To his current residence address maintained in Apogee’s records.

If to Apogee:

Apogee Enterprises, Inc.

4400 West 78th Street

Suite 520

Minneapolis, Minnesota 55435

Attention: General Counsel

Any party may send any notice or other communication hereunder to the intended recipient at the address set forth using any other means (including personal delivery, expedited courier, messenger services, facsimile, ordinary mail or electronic mail), but no such notice or other communication shall be deemed to have been duly given unless and until it is actually received by the intended recipient. Any party may change the address to which notices and other communications hereunder are to be delivered by giving the other party notice in the manner set forth herein.

 

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7. Choice of Law. This Release shall be deemed performable by all parties in, and venue shall be in the state or federal courts located in, Hennepin County, Minnesota, and the construction and enforcement of this Release shall be governed by Minnesota law without regard to its conflict of laws rules.

8. Binding Effect of Release. This Release shall be binding upon Executive and his heirs, administrators, representatives, executors, successors and permitted assigns.

9. Time to Sign and Return Release. Executive acknowledges and agrees that he first received the original of this Release on or before                     , 20    . Executive also understands and agrees that he has been given at least 21 calendar days from the date he first received this Release to obtain the advice and counsel of the legal representative of his choice and to decide whether to sign it. Executive acknowledges that he has been advised and has sought the advice of his own counsel. No separation payments or other post-employment rights or benefits provided by the Employment Agreement shall become due until Executive has executed this Release and all rescission periods set forth herein have passed. Executive represents and agrees that he has thoroughly discussed all aspects and effects of this Release with his attorney, that he has had a reasonable time to review this Release, that he fully understands all the provisions of this Release and that he is voluntarily entering into this Release.

BY SIGNING THIS RELEASE, EXECUTIVE ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS RELEASE, THAT HE UNDERSTANDS ALL OF ITS TERMS, AND THAT HE IS ENTERING INTO IT KNOWINGLY AND VOLUNTARILY. HE FURTHER ACKNOWLEDGES THAT HE IS AWARE OF HIS RIGHTS TO REVIEW AND CONSIDER THIS RELEASE FOR 21 DAYS AND TO CONSULT WITH AN ATTORNEY ABOUT IT, AND STATES THAT BEFORE SIGNING THIS RELEASE, HE HAS EXERCISED THESE RIGHTS TO THE FULL EXTENT THAT HE DESIRED. HE ALSO ACKNOWLEDGES THAT HE WILL BE RECEIVING BENEFITS THAT HE WOULD NOT OTHERWISE BE ENTITLED TO RECEIVE EXCEPT BY VIRTUE OF HIS ENTERING INTO THIS RELEASE.

 

DATE:

 

 

EXECUTIVE

 

JOSEPH F. PUISHYS

 

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EX-10.1 2 dex101.htm FORM OF CHANGE IN CONTROL SEVERANCE AGREEMENT

Exhibit 10.1

FINAL 2011

CHANGE IN CONTROL SEVERANCE AGREEMENT

THIS CHANGE IN CONTROL SEVERANCE AGREEMENT is made as of the      day of March, 2011, between Apogee Enterprises, Inc., a Minnesota corporation, with its principal offices at 4400 West 78th Street, Suite 520, Minneapolis, Minnesota 55435 (the “Company”) and                      (“Executive”), residing at                                         .

WITNESSETH THAT:

WHEREAS, this Agreement is intended to specify the financial arrangements that the Company will provide to Executive upon Executive’s separation from employment with the Company and all subsidiaries of the Company (collectively, the “Apogee Entities”) under any of the circumstances described herein; and

WHEREAS, this Agreement is entered into by the Company in the belief that it is in the best interests of the Company and its shareholders to provide stable conditions of employment for Executive notwithstanding the possibility, threat or occurrence of certain types of change in control, thereby enhancing the Company’s ability to attract and retain highly qualified people.

NOW, THEREFORE, to assure the Company that it will have the continued dedication of Executive notwithstanding the possibility, threat or occurrence of a bid to take over control of the Company, and to induce Executive to remain in the employ of the Apogee Entities, and for other good and valuable consideration, the Company and Executive agree as follows:

1. Term of Agreement. The term of this Agreement shall commence on the date hereof as first written above and shall continue through December 31, 2011; provided that, commencing on January 1, 2012 and each January 1 thereafter, the term of this Agreement shall automatically be extended for one additional year unless, not later than September 30 of the preceding year, the Board of Directors of the Company (a majority of which, at such time, shall be composed of Continuing Directors) shall have authorized, by majority vote, management of the Company to give notice to Executive, and the Company shall have given such notice, that the Company does not wish to extend this Agreement; and provided, further, that, notwithstanding any such notice by the Company not to extend, this Agreement shall continue in effect for a period of 24 months beyond the term provided herein if a Change in Control (as defined in Section 3(a) hereof) shall have occurred during such term.

2. Termination of Employment.

(a) Prior to a Change in Control. Prior to a Change in Control, any Apogee Entity may terminate Executive from employment with such Apogee Entity at will, with or without Cause (as defined in Section 3(c) hereof), at any time. Executive’s rights upon termination of employment from all Apogee Entities prior to a Change in Control shall be governed by the employing Apogee Entity’s standard employment termination policy applicable to Executive in effect at the time of termination.


(b) After a Change in Control.

(i) From and after the date of a Change in Control during the term of this Agreement, neither the Company nor the Apogee Entity then employing Executive shall terminate Executive from employment with the Company or any Apogee Entity except as provided in this Section 2(b) or as a result of Executive’s Disability (as defined in Section 3(d) hereof) or his death.

(ii) From and after the date of a Change in Control during the term of this Agreement, the Company (or the other Apogee Entity then employing Executive) shall have the right to terminate Executive from employment with the Apogee Entities at any time during the term of this Agreement for Cause, by written notice to Executive, specifying the particulars of the conduct of Executive forming the basis for such termination, such notice to be effective on the 30th day following delivery thereof to Executive if Executive has not substantially cured the conduct identified in such notice.

(iii) From and after the date of a Change in Control during the term of this Agreement:

 

 

(A)

the Company (or the other Apogee Entity then employing Executive) shall have the right to terminate Executive’s employment without Cause, at any time; and

 

 

(B)

Executive shall, upon the occurrence of such a termination by the Company or such other Apogee Entity without Cause, or upon the voluntary termination of Executive’s employment by Executive for Good Reason (as defined in Section 3(b) hereof), be entitled to receive the benefits provided in Section 4 hereof. Executive shall evidence a voluntary termination for Good Reason by written notice to the Company given within 60 days after the date of the occurrence of any event that Executive knows or should reasonably have known constitutes Good Reason for voluntary termination. Such notice need only identify Executive and set forth in reasonable detail the facts and circumstances claimed by Executive to constitute Good Reason.

3. Definitions.

(a) 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

 

2


 

corporation or pursuant to which shares of the Company’s 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 Company’s common stock immediately prior to the consolidation or merger own more than 65% of the common stock of the surviving corporation immediately after the merger in the same relative proportions as their ownership of the Company’s 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 any of the events described in clause (i)(A) or subparagraphs (ii) or (iii) of this Section 3(a); or

 

 

(D)

any transaction or series of related transactions having, directly or indirectly, the same effect as any of the foregoing; or any agreement, contract, or other arrangement providing for 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 Company’s then outstanding securities;

(iii) the Continuing Directors (as defined in Section 3(e) hereof) cease to constitute a majority of the Company’s Board of Directors; 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.

(b) “Good Reason” shall mean the occurrence of any of the following events, in each case, after the Executive has provided written notice to the Company of the occurrence of such event and the Company has failed to cure, to the Executive’s reasonable satisfaction, the cause of such event within thirty (30) days after the date of such written notice, except for the occurrence of such an event in connection with the termination or reassignment of Executive’s employment by the Company (or any other Apogee Entity then employing Executive) for Cause, for Disability or for death:

(i) the assignment to Executive of employment duties or responsibilities which are not at least of materially comparable responsibility and status as the employment duties and responsibilities held by Executive immediately prior to a Change in Control, or any removal of Executive from or any failure to reelect or reappoint Executive to any positions held by Executive immediately prior to a Change in Control, except in connection with the termination of his employment for Disability, retirement or Cause, or as a result of Executive’s death, or by Executive other than for Good Reason;

 

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(ii) a material reduction by the Company (or any other Apogee Entity then employing Executive) in Executive’s base salary as in effect immediately prior to a Change in Control or as the same may be increased from time to time during the term of this Agreement;

(iii) the Company’s (or any other Apogee Entity then employing Executive) requiring Executive to be based anywhere other than within 50 miles of Executive’s office location immediately prior to a Change in Control, except for requirements of temporary travel on the Company’s business to an extent substantially consistent with Executive’s business travel obligations immediately prior to a Change in Control;

(iv) the failure by the Company to obtain, as specified in Section 8(a) hereof, an assumption of the obligations of the Company to perform this Agreement by any successor to the Company; or

(v) any material breach by the Company of this Agreement.

(c) “Cause” shall mean termination by the Company (or any other Apogee Entity then employing Executive) of Executive’s employment based upon (i) the willful and continued failure by Executive substantially to perform his duties and obligations (other than any such failure resulting from his incapacity due to physical or mental illness or any such actual or anticipated failure resulting from Executive’s termination for Good Reason) or (ii) the willful engaging by Executive in misconduct which is materially injurious to the Company, monetarily or otherwise. For purposes of this Section 3(c), no action or failure to act on Executive’s part shall be considered “willful” unless done, or omitted to be done, by Executive in bad faith and without reasonable belief that his action or omission was in the best interests of the Company.

(d) “Disability” shall mean any physical or mental condition which would qualify Executive for a disability benefit under any long-term disability plan maintained by the Company (or any other Apogee Entity then employing Executive) either before or after a Change in Control.

(e) “Continuing Director” shall mean any person who is a member of the Board of Directors 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 (i) was a member of the Board of Directors on the date of this Agreement as first written above or (ii) subsequently becomes a member of the Board of Directors, if such person’s initial nomination for election or initial election to the Board of Directors is recommended or approved by a majority of the Continuing Directors. For purposes of this Section 3(e): “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 15% 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; and “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act.

 

4


4. Benefits upon Termination under Section 2(b)(iii).

(a) After a Change in Control.

(i) Upon the termination (voluntary or involuntary) of the employment of Executive pursuant to Section 2(b)(iii) hereof, Executive shall be entitled to receive the benefits specified in this Section 4. Subject to the Company and Executive’s compliance with the terms of clauses (a) and (c) of Section 7, the amounts due to Executive under subparagraphs (ii), (iii), (iv) or (v) of this Section 4(a) shall be paid to Executive not later than the tenth business day following the date that the termination of Executive’s employment becomes effective (the “Employment Termination Date”). All benefits to Executive pursuant to this Section 4(a) shall be subject to any applicable income, payroll or other taxes required by law to be withheld. As used in this Section 4(a), the term, “termination of employment,” and other similar terms used in this Section 4(a), shall be construed to have the same meaning as is given to the term, “Separation from Service,” in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

(ii) The Company shall pay to Executive (A) the full base salary earned by him and unpaid through the Employment Termination Date, at the rate in effect at the time written notice of termination (voluntary or involuntary) was given, (B) any amount earned by Executive as a bonus with respect to the last completed fiscal year of the Company preceding the Employment Termination Date, if such bonus has not theretofore been paid to Executive, and (C) an amount representing credit for any vacation earned or accrued by Executive but not taken.

(iii) The Company shall pay to Executive an amount equal to Executive’s target bonus for the fiscal year in which the Employment Termination Date occurs (the “Target Bonus”), multiplied by a fraction, the numerator of which is equal to the number of full months in the year in which Executive’s employment is terminated that have elapsed at the Employment Termination Date, and the denominator of which is twelve (12).

(iv) In lieu of any further base salary or bonus payments to Executive for periods subsequent to Executive’s Employment Termination Date, the Company shall pay as severance pay to Executive (a “Severance Payment”) a lump-sum cash amount equal to [twenty-four (24)] [twelve (12)] times the sum of (A) Executive’s monthly base salary (as in effect in the month preceding the month in which the termination becomes effective or as in effect in the month preceding the Change in Control, whichever is higher) and (B) one-twelfth (1/12) of the Target Bonus.

(v) Notwithstanding any provision to the contrary in the Apogee Enterprises, Inc. Partnership Plan (2005 Restatement) (the “Partnership Plan”) (or in any other agreement or plan in existence between the Company and Executive at the Employment Termination Date), any rights Executive may have at any time under the Partnership Plan (but only as it applies to the Pool B Shares) and which are deferred at the time of the Employment Termination Date shall immediately become vested and the Company shall pay to Executive any amounts due or which have been promised under the Partnership Plan (but only as it applies to the Pool B Shares) to Executive.

 

5


(vi) Following the Employment Termination Date, Executive shall be entitled, at the cost and expense of the Company, to continued medical and dental insurance coverage for Executive and Executive’s eligible dependents on the same basis as in effect prior to the Change of Control or Executive’s Employment Termination Date, whichever is deemed to provide for more substantial benefits, until the end of the [twenty-four (24)] [twelve (12)] month period following a Change in Control. If the Company determines that it is not able to provide the coverage required in this Subsection 4(a)(vi) under the general terms and provisions of the Company’s welfare benefit plans consistent with the underwriting, regulatory and tax treatment intended for those plans, then the Company shall reimburse Executive for the cost of obtaining substantially similar benefits (the “Benefit Payment”).

(vii) The Company shall also pay to Executive all legal fees and expenses incurred by Executive as a result of such termination of employment (including all fees and expenses, if any, incurred by Executive in seeking to obtain or enforce any right or benefit provided to Executive by this Agreement whether by arbitration or otherwise).

(viii) Notwithstanding any other agreement in existence between the Company and Executive, at the Employment Termination Date (i.e., only if Executive’s employment is terminated following a Change in Control), all stock options or shares of restricted stock owned or held by Executive or promised to be payable to Executive by the Company that were not vested as of such date shall be immediately vested in Executive without further restriction (collectively, the “Accelerated Equity Awards”) and Executive shall be treated at that time as the unrestricted owner of such Company stock options and stock, subject to applicable constraints under federal and state securities laws. The acceleration of vesting, at the Employment Termination Date, of any and all other equity awards made to Executive (whether in the form of stock appreciation rights, performance awards or performance units or otherwise) shall be governed by the terms of the equity plan and equity award pursuant to which such other awards were made.

(b) No Mitigation. Executive shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise. The amount of any payment or benefit provided in this Section 4 shall not be reduced by any compensation earned by Executive as a result of any employment by another employer.

(c) 280G “Best Net”. Upon the occurrence of a Change in Control, the Company shall cause its independent auditors promptly to review, at the Company’s sole expense, the applicability of Section 4999 of the Code to the Total Payments (as defined in Section 4(d) below) to be received by Executive. If such auditors determine that, after taking into account the provisions of Section 4(d) hereof, any of the Total Payments would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto), or any interest or penalties with respect to such tax, by reason of being “contingent on a change in ownership or control” of the Company, within the meaning of Section 280G of the Code (or any successor provision thereto) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such excise tax (such excise tax, together with interest and penalties, are hereafter

 

6


collectively referred to as the “Excise Tax”), then, if a reduction in the amount of payments under Section 4(a) of this Agreement sufficient to avoid the Excise Tax would result in an increase in the Total Payments that would be retained by Executive, net of all applicable taxes, then and only then, the payments due under Section 4(a) shall be reduced to the amount that, when considered with all of the Total Payments taken into account under Section 280G is One Dollar ($1.00) less than the smallest sum that would subject Executive to the Excise Tax. For the avoidance of doubt, in the event that Executive decides not to reduce the amount of payments due to Executive under Section 4(a), Executive, and not the Company, shall be solely responsible for the payment of all taxes, including any Excise Taxes, that become due thereon.

(d) As used herein, “Total Payments” shall mean, collectively, any payment or benefit received or to be received by Executive in connection with a Change in Control of the Company or termination of Executive’s employment (whether payable pursuant to the terms of this Agreement or any other plan, contract, agreement or arrangement with the Company, with any person whose actions result in a Change in Control of the Company or with any person constituting a member of an “affiliated group” as defined in Section 280G(d)(5) of the Code) with the Company or with any person whose actions result in a Change in Control of the Company. For purposes of calculating Total Payments, (i) no portion of the Total Payments the receipt or enjoyment of which Executive shall have effectively waived in writing prior to the date of payment of the Severance Payment shall be taken into account; (ii) no portion of the Total Payments shall be taken into account which in the opinion of tax counsel selected by the Company and acceptable to Executive does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code; (iii) the value of any benefit provided by Section 4(a)(viii) of this Agreement with respect to Accelerated Equity Awards shall, to the extent required by Section 280G of the Code, be taken into account in computing Total Payments; and (iv) the value of any other non-cash benefit or of any deferred cash payment included in the Total Payments shall be determined by the Company’s independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.

5. Certain Benefits Continuation Following a Change in Control. For the twenty-four (24)-month period following a Change in Control, the Company (or any other Apogee Entity then employing Executive) shall continue in effect:

(a) any incentive plan or arrangement (including, without limitation, any incentive compensation plan, long-term incentive plan, bonus or contingent bonus arrangements or credits, the right to receive performance awards, or similar incentive compensation benefits) in which Executive is participating, or is eligible to participate, at the time of a Change in Control of the Company (or any other plans or arrangements providing Executive with substantially similar benefits). The failure of the Company (or any other Apogee Entity then employing Executive) to do so, or the taking of any action by the Company (or such other Apogee Entity), including an amendment or modification to any such plan or arrangement (except as may be required by applicable law), which would adversely affect Executive’s participation in any such plan or arrangement shall constitute a material breach of this Agreement by the Company; and

(b) except to the extent otherwise required by applicable law, any benefit or compensation plan, stock ownership plan, stock purchase plan, bonus plan, life insurance plan, health-and-accident plan or disability plan in which Executive is participating or is eligible to participate immediately prior to a Change in Control (or plans providing Executive with

 

7


substantially similar benefits) The failure of the Company (or any other Apogee Entity then employing Executive) to do so, or the taking of any action by the Company (or such other Apogee Entity) which would adversely affect Executive’s participation in, or materially reduce Executive’s benefits under, any of such plans or deprive Executive of any material fringe benefit enjoyed by Executive immediately prior to such Change in Control shall constitute a material breach of this Agreement by the Company.

6. Employee Covenants. In consideration of this Agreement, and in recognition of the fact that, as a result of Executive’s employment with the Company or any of its affiliates, Executive has had or will have access to and gain knowledge of highly confidential or proprietary information or trade secrets pertaining to the Company or its affiliates, as well as the customers, suppliers, joint ventures, licensors, licensees, distributors or other persons and entities with whom the Company or any of its affiliates does business (“Confidential Information”), which the Company or its affiliates have expended time, resources and money to obtain or develop and which have significant value to the Company and its affiliates, Executive agrees for the benefit of the Company and its affiliates, and as a material condition to Executive’s receipt of benefits described in this Agreement, as follows.

(a) Non-Disclosure of Confidential Information. Executive acknowledges that Executive will receive access or have received access to Confidential Information about the company or its affiliates, that this information was obtained or developed by the Company or its affiliates at great expense and is zealously guarded by the Company and its affiliates from unauthorized disclosure and that Executive’s possession of this special knowledge is due solely to Executive’s employment with the Company or one or more of its affiliates. In recognition of the foregoing, Executive will not at any time during employment or following termination of employment for any reason, disclose, use or otherwise make available to any third party any Confidential Information relating to the Company’s or any affiliate’s business, products, services, customers, vendors or suppliers; trade secrets, data, specifications, developments, inventions and research activity; marketing and sales strategies, information and techniques; long and short term plans; existing and prospective client, vendor, supplier and employee lists, contacts and information; financial, personnel and information system information and applications; and any other information concerning the business of the Company or its affiliates which is not disclosed to the general public or known in the industry, except for disclosure necessary in the course of Executive’s duties or with the express written consent of the Company. All Confidential Information, including all copies, notes regarding, and replications of such Confidential Information will remain the sole property of the Company or its affiliate, as applicable, and must be returned to the Company or such affiliates immediately upon termination of Executive’s employment.

(b) Return of Property. Upon termination of employment with the Company or any of its affiliates, or at any other time at the request of the Company, Executive shall deliver to a designated Company representative all records, documents, hardware, software and all other property of the Company or its affiliates and all copies of such property in Executive’s possession. Executive acknowledges and agrees that all such materials are the sole property in Executive’s possession. Executive acknowledges and agrees that all such materials are the sole property of the Company or its affiliates and that Executive will certify in writing to the Company at the time of delivery, whether upon termination or otherwise, that Executive has complied with this obligation.

 

8


(c) Non-Solicitation of Existing or Prospective Customers, Vendors and Suppliers. Executive specifically acknowledges that the Confidential Information described in Section 6(a) includes confidential data pertaining to existing and prospective customers, vendors and suppliers of the company or its affiliates; that such data is a valuable and unique asset of the business of the Company or its affiliates; and that the success or failure of their businesses depends upon their ability to establish and maintain close and continuing personal contacts and working relationships with such existing and prospective customers, vendors, and suppliers and to develop proposals which are specific to such existing and prospective customers, vendors, and suppliers. Therefore, during the Executive’s employment with the Company or any of its affiliates and for the [twenty-four (24)] [twelve (12)] months following Executive’s Employment Termination Date (provided that Executive has received all payments, including the Severance Payment, that become due and payable to Executive hereunder following such Employment Termination Date (the “Payment Condition”)), Executive agrees that Executive will not, except on behalf of the Company or its affiliates, or with the Company’s express written consent, solicit, approach, contact or attempt to solicit, approach or contact, either directly or indirectly, on Executive’s own behalf or on behalf of any other person or entity, any existing or prospective customers, vendors, or suppliers of the Company or its affiliates with whom Executive had contact or about whom Executive gained Confidential Information during Executive’s employment with the Company or its affiliates for the purpose of obtaining business or engaging in any commercial relationship that would be competitive with the “Business of the Company” (as defined below in Section 6(e)(i) or cause such customer, supplier, or vendor to materially change or terminate its business or commercial relationship with the Company or its affiliates.

(d) Non-Solicitation of Employees. Executive specifically acknowledges that the Confidential Information described in Section 6(a) also includes confidential data pertaining to employees and agents of the Company or its affiliates, and Executive further agrees that during Executive’s employment with the Company or its affiliates and for the [twenty-four (24)] [twelve (12)] months following Executive’s Employment Termination Date (provided thatthe Payment Condition has been satisfied), Executive will not, directly or indirectly, on Executive’s own behalf or on behalf of any other person or entity, solicit, contact, approach, encourage, induce or attempt to solicit, contact, approach, encourage or induce any of the employees or agents of the Company or its affiliates to terminate their employment or agency with the Company of any of its affiliates.

(e) Non-Competition. Executive covenants and agrees that during Executive’s employment with the Company or any of its affiliates and for the [twenty-four (24)] [twelve (12)] months following Executive’s Employment Termination Date (provided that the Payment Condition has been satisfied), Executive will not, in any geographic market in which Executive worked on behalf of the Company or any of its affiliates, or for which Executive had any sales, marketing, operational, logistical or other management or oversight responsibility, engage in or carry on, directly or indirectly, as an owner, employee, agent, associate, consultant, partner or in any other capacity, a business competitive with the Business of the Company.

(i) The “Business of the Company” shall mean any business in which the Company or any of its affiliates was involved, or was investing in for the purpose of being involved, at any time within the twenty-four (24) months preceding Executive’s Employment Termination Date.

 

9


(ii) To “engage in or carry on” shall mean to have ownership in any enterprise engaged in the Business of the Company (excluding ownership of up to 1% of the outstanding shares of a publicly traded company) or to consult, work in, direct or have responsibility for any area of the Business of the Company.

(f) No Disparaging Statements. Executive agrees that Executive will not make any disparaging statements about the Company, its affiliates, directors, officers, agents, employees, products, pricing policies, or services.

(g) Remedies for Breach of These Covenants. Any breach of the covenants in this Section 6 likely will cause irreparable harm to the Company or its affiliates for which money damages could not reasonably or adequately compensate the Company or its affiliates. Accordingly, the Company or any of its affiliates shall be entitled to all forms of injunctive relief (whether temporary, emergency, preliminary, prospective or permanent) to enforce such covenants, in addition to damages and other available remedies, and Executive consents to the issuance of such an injunction without the necessity of the Company or any such affiliate posting a bond. In the event that injunctive relief or damages are awarded to the Company or any of its affiliates for any breach by Executive of this Section 6, Executive further agrees that the Company or such affiliate shall be entitled to recover its costs and attorneys’ fees necessary to obtain such recovery. In addition, Executive agrees that upon Executive’s breach of any covenant in this Section 6, all unexercised options issued under any stock option plans of the Company will immediately terminate and the Company shall have the right to exercise any and all of the rights described above.

(h) Enforceability of These Covenants. It is further agreed and understood by executive and the Company that if any part, term or provision of these terms and conditions should be held to be unenforceable, invalid or illegal under any applicable law or rule, the offending term or provision shall be applied to the fullest extent enforceable, valid or lawful under such law or rule or, if that is not possible, the offending term or provision shall be struck and the remaining provisions of these Terms and Conditions shall not be affected or impaired in any way.

7. Release of Claims Required.

(a) Notwithstanding any other provision of this Agreement, no benefits shall be paid pursuant to Section 4(a) if Executive:

(i) fails to execute and deliver to the Company a release of claims (the “Release of Claims”) in the form and manner prescribed by the Company, within the time set forth in the Release of Claims, or

(ii) revokes or rescinds such Release of Claims during the revocation or rescission period set forth in such Release of Claims.

(b) The Release of Claims will include Executive’s agreements related to confidentiality, non-competition, non-solicitation, non-disparagement and arbitration.

(c) It is the responsibility of the Company to deliver to Executive the Company’s form of Release of Claims sufficiently before the date specified in Section 4(a) for payment, such

 

10


that Executive is afforded such period as may be required by applicable statute or regulation to consider whether to sign the Release of Claims and whether to revoke or rescind such Release of Claims. If the Company shall fail to do so, Executive’s obligation to execute and deliver a Release of Claims is waived.

8. Successors and Binding Agreement.

(a) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company), by agreement in form and substance satisfactory to Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle Executive to compensation from the Company in the same amount and on the same terms as Executive would be entitled hereunder if Executive terminated his employment after a Change in Control for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Employment Termination Date. As used in this Agreement, “Company” shall mean the Company and any successor to its business and/or assets which executes and delivers the agreement provided for in this Section 8(a) or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.

(b) This Agreement is personal to Executive, and Executive may not assign or transfer any part of his rights or duties hereunder, or any compensation due to him hereunder, to any other person. Notwithstanding the foregoing, this Agreement shall inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, heirs, distributees, devisees and legatees.

9. Arbitration. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in the Minneapolis-St. Paul metropolitan area, in accordance with the applicable rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. In the event that Executive engages counsel to arbitrate any dispute hereunder (which arbitration results in an award to Executive of any kind) or to enforce such an award, all costs and expenses incurred by Executive, including reasonable attorney’s fees and expenses, with respect to such arbitration or enforcement thereof shall be reimbursed to Executive by the Company promptly upon Executive’s submission of a request therefor.

10. Modification; Waiver. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in a writing signed by Executive and such officer or Continuing Director as may be specifically designated by the Board of Directors of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

11. Notice. All notices, requests, demands and all other communications required or permitted by either party to the other party by this Agreement (including, without limitation, any notice of termination of employment and any notice of an intention to arbitrate) shall be in

 

11


writing and shall be deemed to have been duly given when delivered personally or received by certified or registered mail, return receipt requested, postage prepaid, at the address of the other party, as first written above (directed to the attention of the Board of Directors and Corporate Secretary in the case of the Company). Either party hereto may change its address for purposes of this Section 11 by giving 15 days’ prior notice to the other party hereto.

12. Severability. If any term or provision of this Agreement or the application hereof to any person or circumstances shall to any extent be invalid or unenforceable, the remainder of this Agreement or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

13. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

14. Governing Law. This Agreement has been executed and delivered in the State of Minnesota and shall in all respects be governed by, and construed and enforced in accordance with, the laws of the State of Minnesota, including all matters of construction, validity and performance.

15. Effect of Agreement; Entire Agreement. The Company and Executive understand and agree that this Agreement is intended to reflect their agreement only with respect to payments and benefits upon termination in certain cases and is not intended to create any obligation on the part of either party to continue employment. This Agreement supersedes any and all other oral or written agreements or policies made relating to the subject matter hereof and constitutes the entire agreement of the parties relating to the subject matter hereof; provided that this Agreement shall not supersede or limit in any way Executive’s rights under any benefit plan, program or arrangements in accordance with their terms.

 

12


IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in its name by a duly authorized director and officer, and Executive has hereunto set his hand, all as of the date first written above.

 

 

APOGEE ENTERPRISES, INC.

 

By:

 

 

 

David E. Weiss

 

Chair, Compensation Committee of the Board of Directors

 

Date: [Month]     , 2011

 

EXECUTIVE

 

 

 

[Name]

 

Date: [Month]     , 2011

 

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