<PAGE>
 
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                     For the fiscal year ended March 3, 2001

[_]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

Commission File Number 0-6365

                            APOGEE ENTERPRISES, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

             Minnesota                                  41-0919654       
    (State or other jurisdiction of        IRS Employer Identification Number
    incorporation or organization)

 7900 Xerxes Avenue South - Suite 1800
       Minneapolis, Minnesota                            55431
(Address of principal executive offices)               (Zip Code)

       Registrant's telephone number, including area code: (952) 835-1874

                           --------------------------

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:

                         Common Stock $.33-1/3 Par Value
                                 Title of Class

                           --------------------------

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes __X__  No _____ .

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [_].

         The aggregate market value of voting and non-voting stock of the
registrant on April 30, 2001 was $239,536,860 (based on closing stock price of
$8.490 per share as reported by Nasdaq).

         The number of shares outstanding of the registrant's Common Stock,
$0.33 1/3 par value per share, outstanding at April 30, 2001 was 28,214,000.

                       DOCUMENTS INCORPORATED BY REFERENCE


         Part III hereof incorporate information by reference from the Proxy
Statement for the Annual Meeting of Shareholders to be held June 19, 2001.

<PAGE>
 
                            APOGEE ENTERPRISES, INC.
                                    FORM 10-K

                                TABLE OF CONTENTS

                     For the fiscal year ended March 3, 2001

               Description                                             Page
               -----------                                             ----
PART I
------
     Item 1.   Business                                                  3

     Item 2.   Properties                                                7

     Item 3.   Legal Proceedings                                         7

     Item 4.   Submission of Matters to a Vote
               of Security Holders                                       8

               Executive Officers of the Registrant                      8
PART II
-------

     Item 5.   Market for the Registrant's
               Common Equity and Related
               Shareholder Matters                                       8

     Item 6.   Selected Financial Data                                   10

     Item 7.   Management's Discussion and
               Analysis of Financial Condition
               and Results of Operations                                12

     Item 7A.  Quantitative and Qualitative Disclosures
               About Market Risk                                        19

     Item 8.   Financial Statements and
               Supplementary Data                                       19

     Item 9.   Changes in and Disagreements with
               Accountants on Accounting and
               Financial Disclosure                                     19

PART III
--------

     Item 10.  Directors and Executive Officers
               of the Registrant                                        20

     Item 11.  Executive Compensation                                   20

     Item 12.  Security Ownership of Certain
               Beneficial Owners and Management                         20

     Item 13.  Certain Relationships and
               Related Transactions                                     20
PART IV
-------

     Item 14.  Exhibits, Financial Statement
               Schedules and Reports on Form 8-K                        20

               Index of Financial Statements and Schedules             F-1


                                       2

<PAGE>
 

                                     PART I
                                     ------


ITEM 1.   BUSINESS

The Company
-----------

Apogee Enterprises, Inc. was incorporated under the laws of the State of
Minnesota in 1949. The Company, through its subsidiaries, is a leader in
technologies involving the design and development of value-added glass products,
services and systems for the non-residential building, commercial and automotive
markets. Unless the context otherwise requires, the terms "Company" and "Apogee"
as used herein refer to Apogee Enterprises, Inc. and its subsidiaries.

During fiscal 2001, the Company realigned its reporting segments to match the
markets they serve in order to underscore the Company's growth potential and to
reflect its changing business mix and focus. The new segments are Architectural
Products and Services (Architectural), Large-Scale Optical Technologies (LSO)
and Automotive Replacement Glass and Services (Auto Glass). The Architectural
segment designs, engineers, fabricates and installs the walls of glass and
windows comprising the outside skin of commercial and institutional buildings.
The LSO segment develops and produces high technology glass that enhances the
visual performance of products for the display, imaging and picture framing
industries. The Auto Glass segment fabricates, repairs and replaces automobile
windshields and windows. Financial information about the Company's segments can
be found in Note 17 to the Consolidated Financial Statements of Apogee
Enterprises, Inc. contained elsewhere in this report. See "Index of Financial
Statements and Schedules." Prior periods have been restated to reflect these new
segments.

During fiscal 2001, the Company completed the sale of substantially all of the
assets of VIS'N Service Corporation (VIS'N), a non-auto glass focused,
third-party administered claims processor, in two separate transactions. In
fiscal 2000, the Company completed the sale of 100% of the stock of its
large-scale domestic curtainwall business, Harmon, Ltd., and the divestiture of
the detention/security operations. Combined with the fiscal 1998 exit from
international curtainwall operations, these transactions effectively removed the
Company from the large-scale construction business and the third-party
administered claims processing business. Accordingly, these businesses are
presented as discontinued operations in the consolidated financial statements
and notes. Prior periods have been restated.

Architectural Products and Services (Architectural)
---------------------------------------------------

The companies within the Architectural segment design, engineer, fabricate and
install the walls of glass and windows comprising the outside skin of commercial
and institutional buildings. The businesses in this segment include: Viracon,
the leading global fabricator of coated, high-performance architectural glass;
Harmon, Inc., the Company's full service building glass installation and
maintenance business; Wausau Window & Wall Systems, a manufacturer of custom,
non-residential aluminum window systems and curtainwall; and Linetec, one of the
largest U.S. architectural paint and anodizing finishers.

Viracon fabricates finished glass products and provides glass-coating services.
This operating unit purchases flat, unprocessed glass in bulk quantities from
which a variety of glass products are fabricated, including insulated,
heat-processed and laminated architectural glass, security glass and laminated
industrial glass.

The Viracon unit is able to fabricate all types of architectural glass
(insulated, laminated and combinations of both) at its Owatonna, Minnesota and
its Statesboro, Georgia facilities. Combined with its glass coating
capabilities, the unit is able to provide a full range of products from these
facilities. Viracon will continue to meet complex requirements and lead in
innovation with an increase in silkscreening capacity and the introduction of a
highly reflective, energy-efficient glass in fiscal 2002.

Insulated glass, comprised of two or more pieces of glass separated by a sealed
air space, is used in architectural and residential applications for thermal
control. Laminated glass consists of two or more pieces of glass fused with a
plastic interlayer and is used primarily for strength and safety in skylights
and in security applications. Viracon's reflective and low-emissivity coatings
reduce energy costs and provide innovative design features for window and
curtainwall systems. Low-emissivity coatings are an invisible, metallic film
deposited on glass which selectively limits the transfer of heat through the
glass. Low-emissivity coated glass represents a fast-growing segment of both
residential and nonresidential glass markets.

Viracon markets its products nationally and overseas to glass distributors,
contractors and industrial glass fabricators. A substantial portion of its glass
product is delivered to customers by Viracon's fleet of company-owned trucks,
providing "backhaul" capability for its raw materials, thereby reducing shipping
time, transportation costs and breakage expense.

Harmon, Inc. offers complete design, engineering, installation and replacement
or glazing services for commercial, institutional and other buildings. Harmon,
Inc. emphasizes projects that are relatively small in comparison to Apogee's
discontinued large-scale curtainwall operations. While the installation of
building glass in new construction projects is the core business, service and
retrofit 


                                       3

<PAGE>
 
construction of older buildings are adding to growth. This unit offers 24-hour
replacement service for storm or vandalism damage. In-house engineering
capabilities allow Harmon, Inc. to duplicate the original design or create a
completely new appearance for renovated buildings.

Wausau Window & Wall Systems (Wausau) designs and manufactures high-quality,
thermally-efficient aluminum window and curtainwall systems. These products meet
high standards of wind load capacity and resistance to air and moisture
infiltration. Wausau's aluminum window frame designs are engineered to be
thermally efficient, utilizing high-strength polyurethane to limit the transfer
of heat or cold through the window frame. Products are marketed through a
nationwide network of distributors and a direct sales staff. Sales are made to
building contractors and to building owners for retrofitting older buildings.
Wausau maintains design and product engineering staffs to prepare aluminum
window and curtainwall system designs to fit customers' needs and to originate
new product designs.

Linetec has two metal-coating facilities which provide anodized and
fluoropolymer coatings to metal. Anodizing is the electrolytic process of
putting a protective, often colored, oxide film on light metal, typically
aluminum. Fluoropolymer coatings are high quality paints which are sometimes
preferred over anodizing because of the wider color selection. Coatings are
applied to window and curtainwall components for industrial metal fabricators
(including Wausau), as well as other companies' metal, plastic, wood or glass
products. A significant portion of Linetec's revenues are generated from
painting home and commercial shutters.

Large-Scale Optical Technologies (LSO)
--------------------------------------

LSO companies develop and produce high technology glass that enhances the visual
performance of products for the display, imaging and picture framing industries.
Businesses in this segment include: Tru Vue, a leading U.S. value-added glass
and matboard manufacturer for the art and framing industry; and Viratec Thin
Films, a leading global producer of optical thin film coatings for the display
and imaging markets.

Tru Vue is one of the largest domestic manufacturers of value-added picture
framing glass. Tru Vue provides its customers with a full array of picture
framing glass products, including clear, reflection control, which diminishes
reflection and enhances clarity, and conservation glass, which substantially
blocks ultraviolet rays to protect artwork. Tru Vue compliments its glass
product offering with sales of conservation picture framing matboard. The
products are distributed primarily through independent distributors which, in
turn, supply local picture framing markets. In fiscal 2001, Tru Vue expanded its
pre-framed art business through the acquisitions of Balangier Fine Art and
Designs, and Corporate Art Services, Inc. Also, by demonstrating the financial
benefit of moving to value-added glass, Tru Vue converted three mass
merchandisers and 1,000 frame shops from plain framing glass to TruGuard(TM),
its proprietary glass that protects pictures and art from deteriorating in
sunlight, in fiscal 2001. In anticipation of converting additional frame shops
and mass merchandisers this year, Tru Vue will install a second production line
for this product.

Viratec develops advanced, optical-display and imaging coatings for glass and
other surfaces. These products are used in anti-glare computer screens,
high-quality optical components and high performance mirror products for the
imaging industry. Viratec markets optical display and imaging products to both
domestic and overseas customers. These customers provide further assembly,
marketing and distribution to end-users. Viratec's Optium(TM) coating line was
relocated in fiscal 1999 from Minnesota to southern California, a location
closer to the flow of customers' computer monitor supply chains. This facility
will be closed during fiscal 2002 following notice received in late fiscal 2001
that its primary customer planned to discontinue its computer monitor operations
in southern California, thereby eliminating the need for Viratec's facility in
southern California. The facility closing is not expected to have a significant
impact on the Company's fiscal 2002 operating results.

Automotive Replacement Glass and Services (Auto Glass)
------------------------------------------------------

Auto Glass companies fabricate, repair and replace automobile windshields and
windows. Businesses in this segment include: Harmon AutoGlass, the nation's
second largest chain of retail auto glass replacement and repair stores; and
Viracon/Curvlite, a leading U.S. fabricator of aftermarket foreign and domestic
car windshields.

Harmon AutoGlass, a Minneapolis-based company, is the second largest auto glass
retailer in the United States. Harmon AutoGlass opened its first shop over 50
years ago in downtown Minneapolis and today has grown to 454 retail service
centers, including co-branded facilities, in 44 states and 820 mobile
installation vehicles. In addition to its own shops, Harmon AutoGlass has a
network of more than 4,000 affiliated auto glass retailers across the country.

In an effort to enhance efficiency, geographic coverage and customer service in
the distribution of auto replacement glass, the Company and PPG Industries
combined their U.S. automotive replacement glass distribution businesses in July
2000 to create a new entity, PPG Auto Glass, LLC (PPG Auto Glass), of which the
Company has a 34 percent interest. As part of the arrangements with this joint
venture, Harmon has committed, under a long-term contract, to purchase a
majority of its replacement windshield needs from the joint venture. Harmon
AutoGlass also eliminated two layers of field management to bring leadership
closer to the customer 


                                       4

<PAGE>
 
and closed 37 under-performing shops, or about 11 percent of total facilities
while maintaining service coverage in all impacted markets. Harmon AutoGlass has
also outsourced to APAC Customer Services, Inc. for call center insurance
claims processing to improve customer service and obtain a technological
advantage.

Harmon AutoGlass has a diverse customer base, including insurance companies,
commercial fleets and consumers. While Harmon AutoGlass' primary business is
windshield repair and replacement, some Harmon AutoGlass retail stores also
offer an inventory of flat glass for home window repair and table tops. Harmon
AutoGlass' Web site provides information on safety and technology, and allows
customers to locate stores and conveniently schedule appointments online.

Harmon AutoGlass is committed to its values of safety, quality, expertise and
customer service. Harmon AutoGlass believes that it has one of the best customer
satisfaction ratings in the industry. Harmon AutoGlass is an industry leader in
employee training by having all of its technicians participate in a rigorous
internal certification program. Harmon AutoGlass also requires technicians to be
certified by the National Auto Glass Association.

Viracon/Curvlite (Curvlite) fabricates replacement windshields for foreign and
domestic automobiles and laminated glass parts for the RV and bus industries.
Under a long-term agreement with PPG Industries, Inc. (PPG), Curvlite's
automotive replacement glass production is dedicated to PPG, and Curvlite is now
fabricating approximately 500 different parts, about half the number
manufactured previously.

Sources and Availability of Raw Materials
-----------------------------------------

None of the Company's operating units are significantly dependent upon any one
supplier. The Company believes a majority of its raw materials (bulk flat glass,
aluminum extrusions, automotive glass and related materials) are available from
a variety of domestic sources.

Trademarks and Patents
----------------------

The Company has several nationally recognized trademarks and trade names which
it believes have significant value in the marketing of its products. Harmon
AutoGlass(R), Viratec(R), Tru Vue(R), TruGuard(R), Linetec(R) and Glass Depot(R)
are registered trademarks and Optium(TM) is a listed trademark of the Company.
PPG Auto Glass is a trademark of PPG Industries. Viratec Thin Films has obtained
several patents pertaining to its glass coating methods. However, no single
patent is considered to be material to the Company.

Customers
---------

The customer base of the Company is a diverse group which includes retailers,
distribution outlets, general and sub-contractors, OEM manufacturers and
end-users. No one customer accounts for 10% or more of the Company's
consolidated revenues, although, due to the auto glass distribution joint
venture with PPG, PPG Auto Glass has become the primary customer of Curvlite,
the Auto Glass segment's manufacturer of replacement windshields for the
automobiles. In the opinion of management, the loss of any single customer would
not have a material long-term adverse effect on the Company.

Backlog
-------

At March 3, 2001, the Company's total backlog of orders considered to be firm
was $200,218,000 compared with $175,137,000 at February 26, 2000. Of this
amount, approximately $190,000,000 of orders were in the Architectural segment.

Competition
-----------

The Company's businesses are in industries that are, in general, fairly mature
and highly competitive. Businesses in the Architectural and LSO segments
(Viracon, Viratec and Tru Vue) compete with several large integrated glass
manufacturers and numerous smaller specialty fabricators. Product pricing and
service are the primary competitive factors in these markets. Harmon, Inc.
competes against local and regional construction companies where primary
competitive factors are quality engineering and service. Wausau competes against
several major aluminum window manufacturers while Linetec competes against
regional paint and anodizing companies. These companies primarily serve the
custom portion of the construction market in which the primary competitive
factors are product quality, reliable service and the ability to provide
technical engineering and design services. The Auto Glass segment competes with
other auto glass shops, glass warehouses, car dealers, body shops and
fabrication facilities on the basis of pricing and customer service. Its
competition consists of national and regional chains as well as significant
local competition.


                                       5

<PAGE>
 
Markets
-------

The Architectural Products and Services (Architectural) companies design,
engineer, fabricate and install the walls of glass and windows comprising the
outside skin of commercial and institutional buildings. The markets that these
businesses serve are very competitive, price sensitive and affected by changes
in the commercial construction industry as well as, in general, economic
conditions.

The Large-Scale Optical Technologies (LSO) companies develop and produce high
technology glass that enhances the visual performance of products for display,
imaging and picture framing industries. The markets that these businesses serve
are very competitive, highly responsive to new products and price sensitive.

The Automotive Replacement Glass and Services (Auto Glass) companies fabricate,
repair and replace automobile windshields and windows. The market that these
businesses serve tends to be cyclical in nature and is influenced by a variety
of factors, including weather, new car sales, speed limits, road conditions, the
economy, and average annual number of miles driven. This market's pricing
structure has changed significantly in recent years as insurance companies seek
volume pricing at discounted rates from historical levels and attempt to enter
into preferred or exclusive provider arrangements with a limited number of
providers. Consequently, margins have narrowed at the retail, wholesale and
manufacturing levels, in which the Auto Glass segment operates. 

Research and Development
------------------------

The amount spent on research and development activities over the past three
fiscal years was $3.0 million in fiscal 2001, $2.4 million in fiscal 2000 and
$2.9 million in fiscal 1999. The Company's investment in TerraSun LLC relates to
a research and development venture of which the Company has a 50 percent
ownership. TerraSun is developing holographic optical technologies for lighting
and energy systems applications.

Environment
-----------

To comply with environmental regulations, Linetec's paint facility utilizes an
oxidizer to remove volatile organic compounds (VOC's) generated from the
spraying of solvent based paints. Linetec also sends excess paint and area
liquids to a certified waste treatment facility for disposal. In addition to
these processes, caustic soda is used in Linetec's anodizing operation. This is
then neutralized prior to discharge into a waste water treatment facility.

The Company's Tru Vue facility also has a process in which caustic soda is
neutralized prior to discharge into a waste water treatment facility. Tru Vue
also removes acid fumes through a wet-scrubbing system.

The Company's Viracon facility ships its scrap glass to a company that recycles
glass.

Employees
---------

The Company employed 5,912 persons at March 3, 2001, of whom approximately 696
were represented by labor unions. The Company is a party to 44 collective
bargaining agreements with several different unions. Approximately 18% of the
collective bargaining agreements will expire during fiscal 2002. The number of
collective bargaining agreements to which the Company is a party will vary with
the number of cities with active nonresidential construction contracts. The
Company considers its employee relations to be very good and has not recently
experienced any significant loss of work days due to strike.

Foreign Operations and Export Sales
-----------------------------------

During the years ended March 3, 2001, February 26, 2000 and February 27, 1999,
the Company's export sales, principally from Architectural operations, amounted
to approximately $40,001,000, $42,096,000 and $40,316,000, respectively.


                                       6

<PAGE>
 

I
TEM 2.  PROPERTIES
         ----------

The following table lists, by segment, the Company's major facilities as of
March 3, 2001, the general use of the facility and whether it is owned or leased
by the Company.


<TABLE>
<CAPTION>
Facility                                       Location                  Owned/Leased        Function
--------                                       --------                  ------------        --------
<S>                                            <C>                       <C>                 <C>            
Architectural Products and Services
-----------------------------------
Viracon                                        Owatonna, MN              Owned                   Mfg./Admin.
Viracon                                        Statesboro, GA            Owned                   Mfg.
Viracon - Temp II Bldg.                        Owatonna, MN              Owned                   Mfg.
Harmon Inc. Headquarters                       Minneapolis, MN           Leased                  Mfg.
Wausau Window & Wall Systems                   Wausau, WI                Owned                   Mfg./Admin.
Wausau Window & Wall Systems - Plant II        Wausau, WI                Owned                   Mfg.
Wausau Window & Wall Systems - Plant III       Wausau, WI                Owned                   Mfg.
Linetec (Painting)                             Wausau, WI                Owned                   Mfg./Admin.
Linetec (Anodizing)                            Wausau, WI                Owned                   Mfg.

Large-Scale Optical Technologies
--------------------------------
Tru Vue                                        McCook, IL                Owned               Mfg./Admin.
Tru Vue                                        Winter Park, FL           Leased              Mfg./Admin.
Balangier Designs, Inc.                        Little Ferry, NJ          Leased              Mfg./Admin.
Viratec Thin Films, Inc.                       Faribault, MN             Owned               Mfg./Admin.
Viratec Thin Films, Inc.                       San Diego, CA             Leased              Mfg.

Automotive Replacement Glass and Services
-----------------------------------------
Harmon AutoGlass Headquarters                  Minneapolis, MN           Leased              Administrative
Viracon/Curvlite                               Owatonna, MN              Owned               Mfg./Admin.
National Distribution Center (1)               Owatonna, MN              Owned               Warehouse/Admin.
Harmon Solutions-Call Center (2)               Orlando, FL               Owned               Administrative
Harmon Solutions-Call Center (2)               Eau Claire, WI            Leased              Administrative

Other
-----
Apogee Corporate Office                        Minneapolis, MN           Leased              Administrative
</TABLE>


1.       Space has been vacated, due to PPG Auto Glass joint venture, and is
         being considered for alternative uses or sale.
2.       Space has been vacated since the outsourcing arrangement with APAC and
         is being considered for alternative uses or sale.

In addition to the locations indicated above, at fiscal year-end, the Automotive
Replacement Glass and Services segment operated 287 Harmon AutoGlass retail
locations and 167 co-branded facilities nationally. The majority of such
locations are leased. Also, Architectural Products and Services' Harmon, Inc.
unit operated 14 leased locations. The Company owns 4 distribution centers that
are currently leased to PPG Auto Glass.

The Viracon/Curvlite plant, a Wausau Window & Wall Systems facility, the Linetec
paint facility, and the Call Center in Florida were constructed with the use of
proceeds from industrial revenue bonds issued by those cities. These properties
are considered owned, since at the end of the bond term, title reverts to the
Company.


ITEM 3.  LEGAL PROCEEDINGS
         -----------------

Apogee has been a party to various legal proceedings incidental to its normal
operating activities. In particular, like others in the construction industry,
the Company's discontinued construction business is routinely involved in
various disputes and claims arising out of construction projects, sometimes
involving significant monetary damages. Although it is impossible to predict the
outcome of such proceedings, the Company believes, based on facts currently
available to management, that none of such claims will result in losses that
would have a material adverse effect on its financial condition.


                                       7

<PAGE>
 

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
         ---------------------------------------------------

No matters were submitted to a vote of security holders during the fourth
quarter ended March 3, 2001.

EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------

         NAME                    AGE      POSITION
         ----                    ---      --------

         Russell Huffer           51      Chairman, President and Chief 
                                          Executive Officer

         Michael B. Clauer        44      Executive Vice President and Chief 
                                          Financial Officer

         Joseph T. Deckman        57      Executive Vice President

         Larry D. Stordahl        58      Executive Vice President

         Patricia A. Beithon      47      General Counsel and Secretary

         Gary R. Johnson          39      Vice President and Treasurer

         James S. Porter          40      Corporate Controller

Executive officers are elected annually by the Board of Directors and serve for
a one-year period. There are no family relationships between the executive
officers or directors of the Company.

Mr. Huffer has been an employee of the Company for more than the last five
years. Mr. Clauer joined the Company in November 2000. Prior to joining the
Company, Mr. Clauer held a management position at Open Port and several
financial management positions at Budget Group, Inc. and PepsiCo, Inc. Mr.
Deckman has been an employee of the Company for more than the last five years.
Mr. Stordahl joined the Company in August 1998. Prior to joining the Company,
Mr. Stordahl held several management positions with SPX Corporation in Owatonna,
Minnesota. Mr. Johnson has been an employee of the Company for more than the
last five years. Ms. Beithon joined the Company in September 1999. Prior to
joining the Company, Ms. Beithon held a divisional legal counsel position with
Pfizer, Inc. subsidiaries, American Medical Systems, Inc. and Schneider (USA),
Inc. in Minneapolis, Minnesota. Mr. Porter joined the Company in August 1997.
Prior to joining the Company, Mr. Porter held financial management positions at
Rollerblade, Inc. in Minneapolis, Minnesota.


                                     PART II


ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
        -----------------------------------------------------------------
        MATTERS
        -------

Market Information
------------------

Apogee common stock is traded on the Nasdaq National Market, under the ticker
symbol APOG. Stock price quotations are printed daily in major newspapers.
During the fiscal year ended March 3, 2001, the average trading volume of Apogee
common stock was 3,545,000 shares per month, according to Nasdaq.

As of April 30, 2001, there were 28,214,000 shares of common stock outstanding,
of which about 8.6 percent were owned by officers and directors of Apogee. At
that date, there were approximately 2,082 shareholders of record and 7,200
shareholders for whom securities firms acted as nominees.


                                       8

<PAGE>
 
The following chart shows the quarterly range and year-end closing bids for one
share of the Company's common stock over the past five fiscal years.


<TABLE>
<CAPTION>
                   Quarter               Quarter                Quarter               Quarter          Year  
                      I                    II                     III                   IV             End   
              ----------------       ---------------        ---------------       ---------------     ------ 
<S>           <C>                    <C>                    <C>                   <C>                 <C>    
  1997          9.625 - 14.250       13.250 - 18.250        15.250 - 22.625       17.250 - 23.750     19.875 
  1998         14.000 - 21.250       17.750 - 22.625        21.125 - 25.000       10.375 - 23.250     12.938 
  1999         11.813 - 15.250       11.125 - 15.500         8.125 - 12.875        8.750 - 12.375      8.750 
  2000          8.750 - 13.750        7.875 - 14.313         5.688 -  8.625        4.000 -  6.313      5.000 
  2001          3.313 -  5.500        3.250 -  4.531         4.313 -  6.063        4.625 -  9.500      9.000 
</TABLE>


Dividends
---------

It is Apogee's policy, subject to Board review and approval, to pay quarterly
cash dividends in May, August, November and February. Cash dividends have been
paid each quarter since 1974. The chart below shows quarterly and annual
cumulative, cash dividends per share for the past five fiscal years. Subject to
future operating results, available funds and the Company's future financial
condition, the Company intends to continue paying cash dividends as, when and if
declared by its Board of Directors.

                       Quarter   Quarter   Quarter    Quarter
                          I        II        III        IV      Year
                     --------------------------------------------------
             1997       0.043      0.043     0.045     0.045    0.175
             1998       0.045      0.045     0.050     0.050    0.190
             1999       0.050      0.050     0.053     0.053    0.205
             2000       0.053      0.053     0.053     0.053    0.210
             2001       0.053      0.053     0.053     0.053    0.210


                                       9

<PAGE>
 

ITEM 6.  SELECTED FINANCIAL DATA
         -----------------------

The following information should be read in conjunction with Item 7 -

Management's Discussion and Analysis of Financial Condition and Results of
Operations and Item 8 - Financial Statements and Supplementary Data.


<TABLE>
<CAPTION>
(In thousands, except per share data)*             2001         2000          1999             1998          1997 
----------------------------------------------------------------------------------------------------------------- 
<S>                                         <C>          <C>            <C>             <C>           <C>         
Operating Results
Net sales                                   $   865,200  $   840,488    $   788,062     $   731,094   $   642,226 
Gross profit                                    178,997      167,235        170,415         165,139       143,761 
Operating income                                 31,894       19,418         43,352          45,659        44,628 
Earnings (loss) from continuing operations       13,361        3,071         20,245          24,114        26,827 
Earnings (loss) from discontinued operations      1,641        9,104          4,988         (75,169)         (607)
Net earnings (loss)                              15,002       12,175         25,233         (51,055)       26,220 
Earnings (loss) per share - basic
     From continuing operations                    0.48         0.11           0.73            0.87          0.98 
     From discontinued operations                  0.06         0.33           0.18           (2.70)        (0.02)
     Net earnings (loss)                           0.54         0.44           0.91           (1.84)         0.96 
Earnings (loss) per share - diluted
     From continuing operations                    0.48         0.11           0.73            0.85          0.96 
     From discontinued operations                  0.06         0.33           0.18           (2.65)        (0.02)
     Net earnings (loss)                           0.54         0.44           0.91           (1.80)         0.93 
Effective tax rate - %                             39.9         50.8           37.6            37.4          31.5 

Operating Ratios
Gross margin - %                                   20.7         19.9           21.6            22.6          22.4 
Operating margin - %                                3.7          2.3            5.5             6.2           6.9 
Net margin - continuing operations - %              1.5          0.4            2.6             3.3           4.2 
Net margin - %                                      1.7          1.4            3.2            (7.0)          4.1 
Return on:
     Average shareholders' equity - %              10.5          9.1           21.0           (36.2)         16.9 
     Average invested capital - %                   5.0          3.7            8.3           (16.7)          9.2 
     Average total assets - %                       3.3          2.6            5.8           (12.5)          7.1 

Funds Flow Data
Depreciation and amortization               $    34,229  $    33,019    $    25,798     $    22,463   $    17,860 
Capital expenditures                             14,823       44,025         77,392          37,892        34,203 
Dividends                                         5,834        5,833          5,666           5,251         4,806 

Year-End Data
Total assets                                $   432,679  $   481,154    $   466,389     $   405,526   $   410,522 
Current assets                                  175,191      214,422        204,308         206,858       159,095 
Current liabilities                             137,437      135,397        119,796          97,750        86,178 
Working capital                                  37,754       79,025         84,512         109,108        72,916
     Current ratio                                  1.3          1.6            1.7             2.1           1.8 
Long-term debt                                  104,206      164,371        165,097         151,967       127,640 
     % of invested capital                         37.6         50.2           51.0            53.1          39.4 
Shareholders' equity                            148,292      137,772        130,664         109,600       172,150 
     % of invested capital                         53.5         42.1           40.4            38.3          53.1 

Investment Information
Dividends per share                         $     0.210  $     0.210    $     0.205     $     0.190   $     0.175 
Book value per share                               5.33         4.97           4.73            3.99          6.17 
Price range during year:
     High                                         9 1/2      14 5/16         15 1/2              25        23 3/4 
     Low                                          3 1/4            4          8 1/8          10 3/8         9 5/8 
     Close                                            9            5          8 3/4        12 15/16        19 7/8 
Price/earnings ratio at year-end                     17           11             10              NM            21 
Dividend yield at year-end - %                      2.3          4.2            2.4             1.5           0.9 
Shares outstanding at year-end               27,825,000   27,743,000     27,623,000      27,453,000    27,882,000 
Average monthly trading volume                3,545,000    2,666,000      1,962,000       4,065,092     4,795,244 
---------------------------------------------------------------------------------------------------------------------------  
</TABLE>

*Share and per share data have been adjusted for the fiscal 1997 stock dividend.
**Fiscal 1994 figures reflect the cumulative effect of a change in accounting
for income taxes, which increased net earnings by $525,000, or 4 cents per
share.

                                       10

<PAGE>
 

<TABLE>
<CAPTION>
(In thousands, except per share data)*             1996         1995           1994**          1993          1992          1991  
-------------------------------------------------------------------------------------------------------------------------------  
<S>                                         <C>          <C>            <C>             <C>           <C>           <C>          
Operating Results
Net sales                                   $   567,823  $   516,022    $   426,400     $   367,878   $   364,578   $   368,094  
Gross profit                                    116,426      102,400         84,184          71,141        67,193        74,816  
Operating income                                 34,729       31,535         23,803           8,779         2,730        17,629  
Earnings (loss) from continuing operations       20,656       19,160         16,279           6,657        (1,300)        7,391  
Earnings (loss) from discontinued operations     (2,820)      (6,110)       (12,446)         (2,143)        9,805         9,626  
Net earnings (loss)                              17,836       13,050          3,833           4,514         8,505        17,017  
Earnings (loss) per share - basic
     From continuing operations                    0.76         0.72           0.62            0.25         (0.05)         0.27  
     From discontinued operations                 (0.10)       (0.23)         (0.47)          (0.08)         0.36          0.36  
     Net earnings (loss)                           0.66         0.49           0.14            0.17          0.32          0.63  
Earnings (loss) per share - diluted
     From continuing operations                    0.76         0.71           0.61            0.25         (0.05)         0.27  
     From discontinued operations                 (0.10)       (0.23)         (0.47)          (0.08)         0.36          0.35  
     Net earnings (loss)                           0.65         0.48           0.14            0.17          0.31          0.62  
Effective tax rate - %                             35.4         35.1           32.6            28.8        (113.5)         44.2  

Operating Ratios
Gross margin - %                                   20.5         19.8           19.7            19.3          18.4          20.3  
Operating margin - %                                6.1          6.1            5.6             2.4           0.7           4.8  
Net margin - continuing operations - %              3.6          3.7            3.8             1.8          (0.4)          2.0  
Net margin - %                                      3.1          2.5            0.9             1.2           2.3           4.6  
Return on:
         Average shareholders' equity - %          13.5         10.9            3.4             4.0           7.6          16.6  
     Average invested capital - %                   7.6          6.7            2.4             3.0           5.7          11.5  
     Average total assets - %                       5.5          4.5            1.6             2.1           4.2           8.8  

Funds Flow Data
Depreciation and amortization               $    13,122  $    11,972    $    12,423     $    12,344   $    14,407   $    12,000  
Capital expenditures                             20,038       22,603         11,447           6,393         9,985        11,988  
Dividends                                         4,453        4,154          3,841           3,584         3,505         3,248  

Year-End Data
Total assets                                $   327,233  $   317,085    $   257,877     $   213,372   $   212,282   $   196,292  
Current assets                                  149,414      155,608        123,301         102,869       112,847       106,614  
Current liabilities                              83,574       90,876         92,536          61,702        63,786        48,441  
Working capital                                  65,840       64,732         30,765          41,167        49,061        58,173  
      Current ratio                                 1.8          1.7            1.3             1.7           1.8           2.2  
Long-term debt                                   79,102       80,566         35,688          28,419        25,267        29,398  
     % of invested capital                         32.5         35.6           21.6            18.7          17.0          19.9  
Shareholders' equity                            138,922      124,628        114,062         112,336       113,780       109,050  
     % of invested capital                         57.0         55.1           69.0            74.1          76.6          73.8  

Investment Information
Dividends per share                         $     0.165  $     0.155    $     0.145     $     0.135   $     0.130   $     0.120  
Book value per share                               5.14         4.64           4.28            4.26          4.23          4.05  
Price range during year:
     High                                         9 7/8        9 1/4          8 7/8           6 3/8             9       10 1/16  
     Low                                          6 1/2        5 3/4          5 1/8           4 1/8         4 3/4         6 5/8  
     Close                                      9 13/16        8 5/8          7 1/4         5 13/16         6 1/8             9  
Price/earnings ratio at year-end                     15           18             50              34            19            14  
Dividend yield at year-end - %                      1.7          1.9            2.0             2.3           2.1           1.3  
Shares outstanding at year-end               27,034,000   26,886,000     26,624,000      26,354,000    26,922,000    26,954,000  
Average monthly trading volume                1,775,740    1,613,012        518,900         644,294     1,386,058     1,212,682  
-------------------------------------------------------------------------------------------------------------------------------  
</TABLE>

*Share and per share data have been adjusted for the fiscal 1997 stock dividend.
**Fiscal 1994 figures reflect the cumulative effect of a change in accounting
for income taxes, which increased net earnings by $525,000, or 4 cents per
share.

NM=Not meaningful


                                       11

<PAGE>
 

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        -----------------------------------------------------------------------
        OF OPERATIONS
        -------------

Introduction
In fiscal 2001, Apogee experienced enhanced revenues and earnings primarily
through improved operational efficiencies, as well as through better equipment
utilization and increased market share. Highlights for the year included the
following:

o  Realignment of the reporting segments with the markets they serve to
   underscore Apogee's growth potential and to reflect Apogee's changing
   business mix and focus.
o  Completion of the ramp-up of the fiscal 2000 start-up of Apogee's
   Statesboro, Georgia plant to support Viracon's continued growth for
   high-end manufactured architectural glass.
o  Formation of PPG Auto Glass, LLC joint venture to enhance efficiency,
   geographic coverage and customer service in the distribution of auto
   replacement glass.
o  Improved operating efficiencies through cost reduction initiatives at
   Apogee's Harmon AutoGlass, which are expected to result in annual
   savings of $5 million.
o  Acquisition of two manufacturers in the $2 billion pre-framed art
   market, which expands the markets for Apogee's Tru Vue products.
o  Reduction of long-term debt to $104 million at the end of fiscal 2001
   from $164 million at the end of fiscal 2000.

Performance
Fiscal 2001 Compared To Fiscal 2000
Consolidated net sales increased 3% in fiscal 2001 to $865.2 million from $840.5
million in fiscal 2000. The results of the Auto Glass distribution unit, which
Apogee contributed to the PPG Auto Glass joint venture, were not included in
Apogee's continuing operations for the third and fourth quarters of fiscal 2001,
as they were through the second quarter of fiscal 2001. Fiscal 2001 revenues
grew 11% compared to the prior year after being adjusted for the formation of
the joint venture. The majority of the increase is attributable to increased
unit production due to the full-year impact of plant expansions completed during
fiscal 2000, enhanced equipment utilization and the impact of fiscal year 2001
acquisitions. Additionally, fiscal 2001 comprised of 53 weeks while fiscal 2000
comprised of 52 weeks.

The following table illustrates the relationship between various components of
operations, stated as a percent of net sales, for each of the fiscal years in
the three-year period ended March 3, 2001. Fiscal 1999 results are restated to
reflect the effect of discontinued operations reported during fiscal 2000.


Percent of Net Sales                               2001      2000      1999
-------------------------------------------------------------------------------
Net sales                                          100.0    100.0     100.0
Cost of sales                                       79.3     80.1      78.4
                                                   -----    -----     -----
      Gross profit                                  20.7     19.9      21.6
Selling, general and
  administrative expenses                           17.0     17.6      16.1
                                                   -----    -----     -----
      Operating income                               3.7      2.3       5.5
Interest expense, net                                1.3      1.3       1.2
Equity in income (loss) of affiliated companies      0.2     (0.3)     (0.2)
                                                   -----     ----     -----
      Earnings from continuing operations
      before income taxes                            2.6      0.7       4.1
Income taxes                                         1.1      0.4       1.5
                                                   -----     ----     -----
     Earnings from continuing operations             1.5      0.3       2.6
Earnings from discontinued operations, net           0.2      1.1       0.6
                                                   -----     ----     -----
      Net earnings                                   1.7      1.4       3.2
-------------------------------------------------------------------------------

On a consolidated basis, cost of sales, as a percentage of net sales, fell to
79.3% for fiscal 2001, improving from 80.1% in fiscal 2000. The primary factors
underlying the resulting increase in gross profit percentage were improved
performance attributable to enhanced manufacturing performance within the
Architectural and Large-Scale Optical segments, as well as cost reduction
initiatives within the Automotive Replacement Glass segment. These improvements
were partially offset by higher general liability and health insurance related
expenses across all segments.

Selling, general and administrative (SG&A) expenses, as a percentage of sales,
decreased to 17.0% from 17.6%. After being adjusted for the formation of the PPG
Auto Glass joint venture, SG&A expenses decreased, as a percentage of sales,


                                       12

<PAGE>
 
from 18.5% in fiscal 2000. The primary factor for the decrease was due to the
cost reduction initiatives implemented at the Automotive Replacement Glass
segment, as well as reductions in expenses related to doubtful accounts across
all segments. These were offset by increases in amounts expensed for bonuses and
incentives.

Net interest expense rose slightly to $11.1 million, or 1.3% of sales, in fiscal
2001. The increase reflected higher weighted-average interest rates under the
Company's revolving credit agreement. This was somewhat offset by lower average
borrowing levels during fiscal 2001 as compared to fiscal 2000.

Apogee's equity in income from affiliated companies was $1.5 million in fiscal
2001 compared to an equity in loss from affiliated companies of $2.8 million a
year ago. Income associated with the Company's PPG Auto Glass joint venture,
including rationalization and other transaction related adjustments, was offset
by the Company's TerraSun research and development joint venture. The PPG Auto
Glass joint venture formed on July 29, 2000, combined the Company's and PPG's
U.S. automotive replacement glass distribution businesses into a newly formed
entity, PPG Auto Glass, LLC, with the Company having a 34% ownership interest in
the joint venture. Fiscal 2000 results were largely attributable to TerraSun.

Apogee's effective income tax rate of 39.9% of pre-tax earnings from continuing
operations decreased from the 50.8% of pre-tax earnings from continuing
operations reported in fiscal 2000. This reduction is due to the relationship of
book and tax differences as a percentage of pre-tax income.

Apogee's fiscal 2001 earnings from continuing operations increased to $13.4
million or $0.48 diluted earnings per share. This compared to earnings from
continuing operations of $3.1 million, or $0.11 diluted earnings per share, a
year earlier.

The Company reported earnings from operations of discontinued businesses of $1.6
million after tax, or $0.06 diluted earnings per share for fiscal 2001 as
compared to $9.1 million after tax, or $ 0.33 diluted earnings per share, a year
earlier.

Apogee's fiscal 2001 net earnings were $15.0 million, or $0.54 diluted earnings
per share. This compared to $12.2 million, or $0.44 diluted earnings per share,
a year ago. The return on average shareholders' equity was 10.5% in fiscal 2001
versus 9.1% for fiscal 2000.

Segment Analysis
During fiscal 2001, the Company realigned its operating business units into
three reporting segments. The following is a discussion on the results of
operations of these three business segments. See Note 17 "Business Segments
Data" in the Notes to Consolidated Financial Statements for a three-year history
of each segment's net sales, operating income, identifiable assets, capital
expenditures, and depreciation and amortization.


(In thousands)                                   2001       2000       1999
----------------------------------------------------------------------------
Architectural Products and Services
   Net sales                                 $441,466   $394,104   $349,968
   Operating income                            27,393     20,513     23,501

Large-Scale Optical Technologies
   Net sales                                   90,768     69,934     58,669
   Operating income (loss)                      4,571      (540)      2,477

Automotive Replacement Glass and Services
   Net sales                                  333,311    377,499    380,524
   Operating income                             1,429        184     18,399
----------------------------------------------------------------------------

Architectural Products and Services (Architectural). Architectural companies
design, engineer, fabricate and install the walls of glass and windows
comprising the outside skin of commercial and institutional buildings. The
businesses in this segment include: Viracon, the leading global fabricator of
coated, high-performance architectural glass; Harmon, Inc., the Company's full
service building glass installation and maintenance business; Wausau Window &
Wall Systems, a manufacturer of custom, non-residential aluminum window systems
and curtainwall; and Linetec, one of the largest U.S. architectural paint and
anodizing finishers.


                                       13

<PAGE>
 
Architectural net sales for fiscal 2001 increased 12% over fiscal 2000. Viracon
reported an increase in net sales of 18%, mostly due to the increased capacity
from the full-year impact associated with the completion of the Statesboro
facility. Additionally, strong customer demand for Viracon's high-performance
architectural glass products significantly improved sales volume. Harmon, Inc.
reported a 19% increase in net sales, primarily due to an increased number of
curtainwall installation projects and Linetec improved sales by 5%. These
increases were offset by a slow-down in shipments at Wausau Window & Wall
Systems due to the facility not being able to fill its available short lead-time
capacity during the second half of the year.

Operating income for the segment of $27.4 million represented an increase of 34%
over prior year. This was the result of increased production capacity and
improved utilization at Viracon as well as increased earnings at Harmon, Inc.
and Linetec. These increases were partially offset by reductions in earnings at
Wausau Window & Wall Systems.

The Architectural segment backlog, at March 3, 2001, remained at record levels
of $190.0 million, compared to $153.6 million at February 26, 2000.

Large-Scale Optical Technologies (LSO). LSO companies develop and produce high
technology glass that enhances the visual performance of products for the
display, imaging and picture framing industries. Businesses in this segment
include: Tru Vue, a leading U.S. value-added glass and matboard manufacturer for
the art and framing industry; and Viratec Thin Films, a leading global producer
of optical thin film coatings for the display and imaging markets.

LSO net sales of $90.8 million represented a 30% increase over fiscal 2000. Tru
Vue reported a 25% improvement in sales due to increased demand for their high
margin, value-added glass products. Additionally, Tru Vue expanded its
pre-framed art business through the acquisitions of Balangier Fine Art and
Designs, and Corporate Art Services, Inc. These acquisitions represent 40
percent of the Tru Vue increase for fiscal 2001 sales. Viratec reported a net
sales increase of 37% over fiscal 2000 levels due to strong operational
improvement that allowed for significant volume growth.

LSO operating income of $4.6 million for fiscal 2001 compared favorably to an
operating loss of $0.5 million for fiscal 2000. The increase was the result of
the increased sales volume at both of the segment's operations as well as the
impact of sales of higher margin products from Tru Vue and improved equipment
utilization at Viratec. These increases were offset by acquisition related
integration costs at Tru Vue and the impact of shut down costs for Viratec's San
Diego facility. The shut down of the San Diego facility will not have a material
impact on next year's financial results.

Automotive Replacement Glass and Services (Auto Glass). Auto Glass companies
fabricate, repair and replace automobile windshields and windows. Businesses in
this segment include: Harmon AutoGlass, the nation's second largest chain of
retail auto glass replacement and repair stores; and Viracon/Curvlite, a leading
U.S. fabricator of aftermarket foreign and domestic car windshields.

Auto Glass net sales decreased 12% to $333.3 million in fiscal 2001. Fiscal 2001
revenues for the segment grew 4% compared to the prior year after being adjusted
for the formation of the PPG Auto Glass joint venture. Net sales of the auto
glass retail unit decreased 2% compared with those of a year ago due, in part,
to soft demand for auto replacement glass services. The retail unit volume
decrease was offset by unit price increases. Market data indicates that unit
demand for replacement auto glass in the U.S. rose 4.2% during fiscal 2001. In
an effort to improve margins, Harmon AutoGlass closed retail facilities and
implemented strategies to reduce low margin business. This resulted in a
reduction in volume of 14.9%.

Auto Glass operating income increased to $1.4 million for fiscal 2001 from
operating income of $0.2 million in fiscal 2000. During fiscal 2001, as part of
the Company's initiative to maintain customer service and reduce costs, Harmon
AutoGlass reduced headcount through position eliminations, closed 37
underperforming stores, or nearly 11% of its retail locations, and transitioned
call center operations to APAC Customer Services, Inc. Harmon AutoGlass
continued to maintain a presence in most markets where shop closings occurred.
Viracon/Curvlite reported slightly increased operating income over the prior
year.

At the end of fiscal 2001, Auto Glass had 287 Harmon AutoGlass retail locations
and 167 co-branded facilities. The segment continues to explore opportunities to
increase utilization and improve efficiencies.

Discontinued Operations. During fiscal 2001, the Company completed the sale of
substantially all of the assets of VIS'N Service Corporation (VIS'N), a non-auto
glass focused, third-party administered claims processor, in two separate
transactions with no impact to net earnings. In fiscal 2000, the Company
completed the sale of 100% of the stock of its large-scale domestic curtainwall
business, Harmon, Ltd. In fiscal 1999, Apogee's Board of Directors authorized
the divestiture of the detention/security operations and the Company executed
the sale of the business. The sale of Harmon, 


                                       14

<PAGE>
 
Ltd. and the Company's detention/security business combined with the fiscal 1998
exit from international curtainwall operations effectively removed the Company
from the large-scale construction business. Accordingly, these businesses are
presented as discontinued operations in the accompanying financial statements
and notes. Prior periods have been restated.

The Company reported after-tax operating income from the businesses reported as
discontinued operations for fiscal 2001 of $1.6 million. This was primarily the
result of cash collected from our international curtainwall operations during
fiscal 2001 that exceeded the anticipated receipts. For fiscal 2000, after-tax
earnings from discontinued operations were $9.1 million.

Fiscal 2000 Compared To Fiscal 1999
Consolidated net sales increased 7% to $840.5 million in fiscal 2000 compared to
fiscal 1999. Net sales increased 13% in the Architectural Products and Services
(Architectural) segment, and 19% at the Large-Scale Optical Technologies (LSO)
segment. Net sales at the Automotive Replacement Glass and Services (Auto Glass)
segment were flat compared to fiscal 1999.

On a consolidated basis, cost of sales, as a percentage of net sales, rose
slightly to 80.1%, up from 78.4% in fiscal 1999. The primary factors underlying
the resulting decline in gross profit were slower than anticipated production
ramp-ups within the Architectural and LSO segments along with increased costs to
increase production velocity at Viracon. Additionally, Apogee experienced
increased costs associated with meeting demand in these segments as well as a
decline in margin in the Auto Glass businesses. These factors were offset by
margin improvements at Harmon, Inc.

Selling, general and administrative (SG&A) expenses grew by $20.8 million, or
16%. The primary factors for the growth were an increase in salaries, allowance
for doubtful accounts, marketing costs, outside services, information systems
and severance costs, offset by a decrease in bonuses and incentives. A portion
of the increased personnel costs represented classification variances associated
with the Company's many system conversions; quantification of such
classifications is not considered cost effective. Gross profit benefited as a
result of these classification variances.

Net interest expense rose 9% to $10.4 million in fiscal 2000. The increase
reflected higher weighted-average outstanding borrowing levels and to a lesser
extent, slightly higher interest rates under the Company's revolving credit
agreement.

Apogee's effective income tax rate was 50.8% of pre-tax earnings from continuing
operations, up substantially from the 37.6% rate recorded in fiscal 1999.

Apogee's equity in loss of affiliated companies was $2.8 million in fiscal 2000
compared to $1.4 million a year ago, largely associated with the Company's
TerraSun research and development joint venture.

Apogee's fiscal 2000 earnings from continuing operations declined to $3.1
million, or $0.11 diluted earnings per share. This compared to earnings from
continuing operations of $20.2 million, or $0.73 diluted earnings per share, a
year earlier.

Earnings from operations of discontinued businesses were $9.1 million after tax,
or $0.33 diluted earnings per share, compared to $5.0 million, or $0.18 diluted
earnings per share, a year earlier.

Apogee's fiscal 2000 net earnings were $12.2 million, or $0.44 diluted earnings
per share. This compared to $25.2 million, or $0.91 diluted earnings per share,
a year ago. The return on average shareholders' equity was 9.1% in fiscal 2000
versus 21.0% for fiscal 1999.

Segment Analysis
The following is a discussion of the results of operations of the Company's
three business segments. See Note 17 "Business Segments Data" in the Notes to
Consolidated Financial Statements for a three-year history of each segment's net
sales, operating income, identifiable assets, capital expenditures, and
depreciation and amortization.

Architectural Products and Services (Architectural). Net sales for the
Architectural segment for fiscal 2000 increased 13% to $394.1 million, while
operating income decreased 13% to $20.5 million for the year.

Viracon, the segment's architectural glass fabrication unit, reported a net
sales increase of 8%, while operating earnings decreased significantly in fiscal
2000 as compared to the prior year. The decrease in profitability was the result
of a decrease in earnings at the Owatonna, Minnesota plant and start-up losses
and slower than expected ramp-up at its Statesboro, Georgia facility. Operating
earnings at the Owatonna plant were down compared to fiscal 1999 due to reduced
operating rates and additional costs incurred to position the facility for
improved production velocity.


                                       15

<PAGE>
 
The Harmon, Inc. business had a solid year. Net sales grew by 29%, while
operating income rose by 75%. Continuing operating improvements and an emphasis
toward higher-margin business helped the unit's profitability.

Wausau Window & Wall Systems, which manufactures commercial windows, had
increased sales of 9% for the year. Operating income decreased for the facility
compared to fiscal 1999.

Linetec, which provides painting and anodizing services, leveraged higher net
sales into a significant operating income increase. This business also continued
to benefit from improvements in its engineering capabilities.

Large-Scale Optical Technologies (LSO). LSO reported a net sales improvement for
fiscal 2000 of 19% to $69.9 million while reporting a significant decrease in
earnings as compared to the prior year.

Tru Vue, the segment's value-added art framing glass and matboard fabrication
unit, posted a 9% improvement in sales, while earnings rose by 26%. These
results reflect increased penetration of the unit's value-added products and
increased capacity and efficiency due to the second quarter completion of a new
production facility in Chicago.

Viratec, which applies optical-grade coatings to glass and other substrates,
reported a net sales increase of 29%, while recording an operating loss. The
operating loss was primarily due to Viratec's flat glass operation which
encountered significant downtime with the start-up of its new vertical coater.
The vertical coater became operational in the third quarter but continued to
experience problems during the remainder of the year. Also, in mid-year,
Viratec's San Diego CRT coating operation lost significant production time
during a technology changeover to accommodate a new product.

Automotive Replacement Glass and Services (Auto Glass). During fiscal 2000 and
1999, Auto Glass operated auto glass businesses under the Harmon AutoGlass
(Harmon), Harmon Solutions Group (Solutions), Glass Depot and Viracon/Curvlite
brands. Due to an industry merger in 1997, Harmon became the second largest
company in the auto glass repair and replacement industry. Fiscal 2000 net sales
at Auto Glass remained flat as compared to fiscal 1999 net sales while operating
income decreased significantly.

Net sales of the Auto Glass retail unit decreased slightly compared with those
of fiscal 1999, although unit volume was flat. A significant operating loss was
recorded due to increased competitive pricing pressures in the retail business
and soft retail demand. Market data indicates that unit demand for replacement
auto glass in the U.S. fell nominally in 1999. Same-location retail net sales
decreased by 8%, while unit net sales were flat with last year. To respond to
changing market conditions, the business was restructured during fiscal 2000 to
reduce fixed cost overhead. In fiscal 2000, 17 retail auto facilities were
closed. In addition, employee headcount was reduced at auto glass headquarters
and to a lesser extent in the field workforce. In addition, retail coverage in
closed store markets was being maintained by mobile vans and service centers
operated from facilities shared with businesses outside of the Company. Unit
sales trends for the AutoGlass retail unit continued to outpace the industry.

The segment's manufacturing operation, Viracon/Curvlite, fabricates auto glass
for the replacement auto glass aftermarket. Viracon/Curvlite's net sales in
fiscal 2000 decreased slightly. The unit's National Distribution Center, which
offered other manufacturers' products as well as Viracon/Curvlite's products for
both domestic and foreign vehicles, and the AutoGlass Express program, a
delivery system to fill customer orders more quickly and completely, accounted
for an increase in unit sales. This increase was offset by a decrease in unit
sales for the broker program, resulting in a slight decrease in unit sales for
fiscal 2000, compared to fiscal 1999. About 61% of Viracon/Curvlite's net sales
were made to the Glass Depot unit in fiscal 2000.

At fiscal year-end, Auto Glass had 324 Harmon AutoGlass retail locations, 143
co-branded facilities and 77 Glass Depot distribution centers.

Discontinued Operations. In late fiscal 2000, Apogee's Board of Directors
authorized the exit from the Company's interest in VIS'N Service Corporation
(VIS'N), a non-auto glass focused, third-party administered claims processor. In
addition, during fiscal 2000, the Company completed the sale of 100% of the
stock of its large-scale domestic curtainwall business, Harmon, Ltd. In fiscal
1999, Apogee's Board of Directors authorized the divestiture of the
detention/security and domestic curtainwall operations. On December 3, 1998, the
segment executed the sale of its detention/security business, effective November
28, 1998. Combined with the fiscal 1998 exit from international curtainwall
operations, these transactions effectively remove the Company from the
large-scale construction business, in addition to the non-auto glass focused
third-party administered claims processing business. Accordingly, these
businesses are presented as discontinued operations in the accompanying
financial statements.


                                       16

<PAGE>
 
Operating results from the businesses reported as discontinued operations
improved significantly over fiscal 1999. For fiscal 2000, earnings from
discontinued operations were $9.1 million after-tax compared to $5.0 in fiscal
1999.

Liquidity and Capital Resources
                                                         Year-ended
                                                   March 3,    February 26,
(In thousands, except percentages)                   2001          2000
------------------------------------------------------------------------------
Cash provided by operations                         $61,610      $43,836
Capital expenditures                                 14,823       44,025
Acquisition of businesses, net of cash acquired       3,602        1,983
Proceeds from dispositions of property               17,834       14,672
Payments on long-term debt, net                      60,703        1,844
Debt to invested capital                               37.6%        50.2%

 Net cash provided by operating activities. Cash provided by continuing
operating activities was $61.6 million in fiscal 2001, an increase of $17.8
million compared to last year. The increase was due to improved cash flow
generated by the operating companies during the year, primarily from improved
results. The Company reduced working capital by $41.3 million during the year,
primarily related to contribution of inventory to the PPG Auto Glass joint
venture, but also due to continued focus on reducing working capital.

Net cash provided by investing activities. New capital investment in fiscal 2001
totaled $14.8 million, versus $44.0 million and $77.4 million in fiscal 2000 and
1999, respectively. This reduction is the result of focusing on the expenditures
made in the prior years by completing the start-up at Viracon's Statesboro
facility and of the vertical coater at Viratec's Faribault, Minnesota operation.
In addition, in fiscal 2001, the LSO segment expanded its pre-framed art
business by purchasing two high-end pre-framed art businesses. The aggregate
purchase price for these businesses was $3.6 million, including goodwill of $2.9
million.

During fiscal 2001, the Company entered into a $16 million sale/leaseback
associated with miscellaneous operating equipment. In Fiscal 2000, the Company
entered into a $13.4 million sale/leaseback associated with miscellaneous
operating equipment. The Company used the proceeds of these sale/leaseback
transactions to reduce the Company's long-term floating rate debt and replaced
it with eight-year fixed rate operating leases.

In fiscal 2002, the Company expects to incur capital expenditures as necessary
to maintain existing facilities and information systems. Fiscal 2002
expenditures are expected to be approximately $25 million.

Net cash used in financing activities. In May 1998, the Company obtained a
five-year, committed credit facility in the amount of $275 million. This credit
facility requires Apogee to maintain minimum levels of net worth and certain
financial ratios. The total commitment of the credit facility was reduced by the
sales price, net of taxes, of the fiscal 1999 sale of the detention/security
business, resulting in a committed credit facility of $253 million as of
February 27, 1999. The total commitment of the credit facility was also reduced
in April 2000, resulting in a committed credit facility of $200 million as of
March 3, 2001. The Company's receivables, inventory, equipment and intangibles
secure the credit facility. Based upon the Company's satisfaction of certain
financial covenants during fiscal 2001, the Company has the right to cause this
security interest to be released upon its request.

Long-term debt, including current installments of $0.3 million, stood at $104.5
million at March 3, 2001, down $60.0 million from a year earlier. The majority
of the Company's long-term debt consisted of bank borrowings. During fiscal
2000, $7.7 million of variable rate industrial revenue bonds were issued and the
resulting proceeds were loaned to the Company to finance a portion of the
Company's capital projects in Statesboro and San Diego.

In December 1998, the Company entered into an interest rate swap agreement,
which expires in fiscal 2004, which effectively converted $25 million of its
variable rate borrowings into a fixed rate obligation. In February 2000, the
Company entered into an interest rate swap agreement, which expires in fiscal
2003, which effectively converted $10 million of its variable rate borrowings
into a fixed rate obligation.

For fiscal 2002, the Company expects that outstanding borrowings will generally
decline over the course of the year. The company believes that cash from
operating activities and the available credit facility provide adequate
liquidity for the next 12 months.


                                       17

<PAGE>
 
Shareholders' Equity
At March 3, 2001, Apogee's shareholders' equity stood at $148.3 million, up 8%
from a year ago. Book value per share also rose to $5.33, up from $4.97 per
share a year ago, as outstanding common shares increased only nominally during
the year. Net earnings and the proceeds from the issuance of 118,000 shares of
common stock under our stock-based compensation plans accounted for the
increases, which were partly offset by dividends paid of $0.21 per share and the
repurchase of 36,000 shares of common stock.

Market Risks
The Company's principal market risk is sensitivity to interest rates, which is
the risk that changes in interest rates will reduce net earnings of the Company.
To manage the Company's direct risk from changes in market interest rates,
management actively monitors the interest sensitive components of the Company's
balance sheet, primarily debt obligations, as well as market interest rates in
order to minimize the impact of changes in interest rates on net earnings and
cash flow.

The primary measure of interest rate risk is the simulation of net income under
different interest rate environments. The approach used to quantify interest
rate risk is a sensitivity analysis. This approach calculates the impact on net
earnings, relative to a base case scenario, of rates increasing or decreasing
gradually over the next 12 months by 200 basis points. The aforementioned
changes in interest rates affecting the Company's financial instruments would
result in approximately a $400,000 impact to net earnings. As interest rates
increase, net earnings decrease; as interest rates decrease, net earnings
increase.

The Company uses interest swaps to fix a portion of its variable rate borrowings
from fluctuations in interest rates. As of March 3, 2001, the Company has
interest swaps covering $35 million of variable rate debt. The net present
liability associated with these swaps is $1.8 million at the end of fiscal 2001.

The Company has a policy of using forward exchange contracts to hedge its net
exposures, by currency, related to the foreign currency-denominated monetary
assets and liabilities, and future firm commitments of its operations. Forward
exchange contracts are also used from time to time to manage near-term foreign
currency cash requirements. The primary objective of these hedging activities is
to maintain an approximately balanced position in foreign currencies so that
exchange gains and losses resulting from exchange rate changes, net of related
tax effects, are minimized.

Given the Company's balanced foreign exchange position described above, a 10%
adverse change in foreign exchange rates upon which these contracts are based
would result in exchange losses from these contracts that would, in all material
respects, be fully offset by exchange gains on the underlying net monetary
exposures for which the contracts are designated as hedges. As of March 3, 2001,
the Company did not have any forward contracts outstanding as the Company had no
material foreign exchange exposure.

Impact of Inflation
Our financial statements are prepared on a historical cost basis, which does not
completely account for the effects of inflation. However, since the cost of many
of our inventories is determined using the last-in, first-out (LIFO) method of
accounting, cost of sales, except for depreciation expense included therein,
generally reflects current costs.

The cost of glass, one of our primary raw materials, was essentially flat
compared with last year. We expect the cost of glass to increase slightly in
fiscal 2002. While our construction and supply contracts are at fixed prices,
the material components are usually based on firm quotes obtained from
suppliers. Labor costs, including taxes and fringe benefits, rose in fiscal 2001
and a moderate increase also can be reasonably anticipated for fiscal 2002.
Other costs are managed to minimize the inflationary pressures that exist in
markets for goods and services that Apogee's business operations require.

Forward Looking Statements

This discussion contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements reflect the
Company's current views with respect to future events and financial performance.
The words "believe," "expect," "anticipate," "intends," "estimate," "forecast,"
"project," "should" and similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. All forecasts and projections in this document
are "forward-looking statements," and are based on management's current
expectations or beliefs of the Company's near-term results, based on current
information available pertaining to the Company, including the risk factors
noted below.

The Company wishes to caution investors that any forward-looking statements made
by or on behalf of the Company are subject to uncertainties and other factors
that could cause actual results to differ materially from such statements. These


                                       18

<PAGE>
 
uncertainties and other risk factors include, but are not limited to, those
noted below. There can be no assurances given that the ongoing reorganization
and realignment of Harmon AutoGlass will lead to successful operating results
now or in the future. Also, there can be no assurances that the ramp-ups of
plant capacity will lead to successful operating results for those companies now
or in the future. There can be no assurances that the closing of the Viratec San
Diego facility will not result in an additional charge to earnings. There can be
no assurances that PPG Auto Glass, Apogee's automotive replacement glass
distribution joint venture with PPG Industries, will achieve favorable
short-term or long-term operating results. In addition, in recent years, there
has been excess capacity at the distribution level of the automotive replacement
glass industry and margins have narrowed. There is no assurance PPG Auto Glass
will achieve any anticipated efficiencies or be able to improve or maintain
margins.

A number of other factors should be considered in conjunction with this report's
forward-looking statements, any discussion of operations or results by the
Company or its representatives and any forward-looking discussion, as well as
comments contained in press releases, presentations to securities analysts or
investors, or other communications by the Company. These other factors are set
forth in the cautionary statement filed as Exhibit 99 to the Company's Annual
Report on Form 10-K, and include, without limitation, cautionary statements
regarding changes in economic and market conditions, factors related to
competitive pricing, commercial building market conditions, management of growth
of business units, greater than expected costs or difficulties related to the
operation of the businesses, the impact of foreign currency markets, the
integration of acquisitions, the realization of expected economies gained
through expansion and information systems technology updates. New factors emerge
from time to time and it is not possible for management to predict all such
factors, nor can it assess the impact of each such factor on the business or the
extent to which any factor, or a combination of factors, may cause actual
results to differ materially from those contained in any forward-looking
statements.


I
TEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
         ----------------------------------------------------------

The information required by this Item is contained in a separate section of this
report. See "Market Risks" included in Item 7 immediately above.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
         -------------------------------------------

The information required by this Item is contained in a separate section of this
report. See "Index of Financial Statements and Schedules."


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         ---------------------------------------------------------------
         FINANCIAL DISCLOSURE
         --------------------

On April 15, 1999, the Company determined not to re-engage its independent
auditors, KPMG Peat Marwick LLP ("KPMG") and appointed Arthur Andersen LLP as
its new independent auditors, effective immediately. This determination followed
the Company's decision to seek proposals from independent accounting firms,
including KPMG, with respect to the engagement of independent accountants to
audit the Company's financial statements for the fiscal year ending February 26,
2000. The decision not to re-engage KPMG and to retain Arthur Andersen was
approved by the Company's Board of Directors upon the recommendation of its
Audit Committee.

The reports of KPMG on the financial statements of the Company for its fiscal
years ended February 27, 1999 did not contain any adverse opinion or disclaimer
of opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principles. During the Company's two most recent fiscal years and the
subsequent interim period through April 15, 1999, (i) there were no
disagreements between the Company and KPMG on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure which, if not resolved to the satisfaction of KPMG, would have caused
KPMG to make reference to the subject matter of the disagreement
("Disagreement") in connection with its reports and (ii) there were no
reportable events ("Reportable Event"), as defined in Item 304 (a) (1) (v) of
Regulations S-K of the Securities and Exchange Commission, with the exception of
items related to internal control deficiencies of the Company's Asian
construction operations, including inadequate project accounting and review
procedures. The Company agreed with the characterization of said items as
reportable events and undertook appropriate actions to remedy the internal
control deficiencies.

The Company did not, during the Company's two most recent fiscal years prior to
the auditor change and the subsequent interim period through April 15, 1999,
consult with Arthur Andersen regarding (i) the application of accounting
principles to a specified transaction, either completed or proposed, or the type
of audit opinion that might be rendered on the Company's financial statements,
and either a written report was provided to the Company or oral advice was
provided that Arthur Andersen concluded was an important factor considered by
the Company in reaching a decision as to the accounting, auditing or financial
reporting issue, or (ii) any mater that was either the subject of a Disagreement
with KPMG or a Reportable Event.


                                       19

<PAGE>
 
The Company reported the change in accountants on Form 8-K on April 22, 1999.
The Form 8-K contained a letter from KPMG, addressed to the Securities and
Exchange Commission stating that it agreed with the comments in clause (i) of
the second paragraph of the above statements, and was not in a position to agree
or disagree with the comments in the remainder of the above statements.


                                    PART III
                                    --------


ITEMS 10, 11, 12 and 13. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT;
                         ---------------------------------------------------
                         EXECUTIVE COMPENSATION; SECURITY OWNERSHIP OF CERTAIN 
                         ----------------------------------------------------- 
                         BENEFICIAL OWNERS AND MANAGEMENT; AND CERTAIN 
                         --------------------------------------------- 
                         RELATIONSHIPS AND RELATED TRANSACTIONS.
                         ---------------------------------------

The information required by these Items, other than the information set forth in

Part I above in "Executive Officers of the Registrant," is included on pages 1
to 8 and 11 to 14 of the Proxy Statement for the Annual Meeting of Shareholders
to be held June 19, 2001, which is incorporated herein by reference.



                                     PART IV
                                     -------


ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
         ----------------------------------------------------------------

(a) and (d) Financial Statements and Financial Statement Schedules -

         The consolidated financial statements and schedules of the Registrant
         listed in the accompanying "Index of Financial Statements and
         Schedules" together with the reports of Arthur Andersen LLP and KPMG
         LLP, independent auditors, are filed as part of this report.

(b) Reports on Form 8-K

         During the quarter ended March 3, 2001, the Company did not file any
         reports on Form 8-K.

(c) Exhibits -

         The information called for by this Item is contained in a separate
         section of this report. See "Exhibit Index."


                                       20

<PAGE>
 
                                 - SIGNATURES -


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

       Date:  May 18, 2001
                                       APOGEE ENTERPRISES, INC.


                                       By:   /s/ Russell Huffer                
                                             ----------------------------------
                                             Russell Huffer
                                             Chairman of the Board of Directors


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.


<TABLE>
<CAPTION>
  SIGNATURE                                           TITLE                                       DATE
----------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                                          <C>                 
                                                     Chairman, President, CEO and Director        
  /s/ Russell Huffer                                 (Principal Executive Officer)                May 18, 2001
------------------------------------------           -----------------------------------------    --------------------
  Russell Huffer


                                                      Executive VP & CFO (Principal
  /s/ Michael B. Clauer                               Financial and Accounting Officer)           May 18, 2001
------------------------------------------           -----------------------------------------    --------------------
  Michael B. Clauer


  /s/ Donald W. Goldfus                               Director                                    May 18, 2001
------------------------------------------           -----------------------------------------    --------------------
  Donald W. Goldfus


/s/ Harry A. Hammerly                                 Director                                    May 18, 2001
------------------------------------------           -----------------------------------------    --------------------
  Harry A. Hammerly


  /s/ Laurence J. Niederhofer                         Director                                    May 18, 2001
------------------------------------------           -----------------------------------------    --------------------
  Laurence J. Niederhofer


  /s/ James L. Martineau                              Director                                    May 18, 2001
------------------------------------------           -----------------------------------------    --------------------
  James L. Martineau


  /s/ Barbara B. Grogan                               Director                                    May 18, 2001
------------------------------------------           -----------------------------------------    --------------------
  Barbara B. Grogan
</TABLE>



                                       21

<PAGE>
 

<TABLE>
<CAPTION>
  SIGNATURE                                           TITLE                                       DATE
----------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                                          <C>                 
  /s/ Stephen C. Mitchell                             Director                                    May 18, 2001
------------------------------------------           -----------------------------------------    --------------------
  Stephen C. Mitchell


  /s/ Bernard P. Aldrich                              Director                                    May 18, 2001
------------------------------------------           -----------------------------------------    --------------------
  Bernard P.  Aldrich


  /s/ J. Patrick Horner                               Director                                    May 18, 2001
------------------------------------------           -----------------------------------------    --------------------
  J. Patrick Horner


  /s/ Michael E. Shannon                              Director                                    May 18, 2001
------------------------------------------           -----------------------------------------    --------------------
  Michael E. Shannon


  /s/ Ray C. Richelson                                Director                                    May 18, 2001
------------------------------------------           -----------------------------------------    --------------------
  Ray C. Richelsen
</TABLE>


                                       22

<PAGE>
 
                            Apogee Enterprises, Inc.
                                    Form 10-K

                           Items 8, 14 (a) and 14 (d)

                   Index of Financial Statements and Schedules




Financial Statements
    Independent Auditors' Reports..........................................F-2
    Consolidated Balance Sheets............................................F-4
    Consolidated Results of Operations.....................................F-5
    Consolidated Statements of Shareholders' Equity........................F-6
    Consolidated Statements of Cash Flows..................................F-7
    Notes to Consolidated Financial Statements.............................F-8

Financial Schedules
    Schedule II - Valuation and Qualifying Accounts.......................F-20

All other schedules are omitted because they are not required, or because the
required information is included in the consolidated financial statements or
noted thereto.


                                       F-1

<PAGE>
 

Report of Independent Public Accountants

To Apogee Enterprises, Inc.:

We have audited the accompanying consolidated balance sheet of Apogee
Enterprises, Inc. (a Minnesota corporation) and subsidiaries as of March 3, 2001
and February 26, 2000, and the related consolidated results of operations,
statements of shareholders' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Apogee Enterprises, Inc. and
subsidiaries as of March 3, 2001 and February 26, 2000, and the results of their
operations and their cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States.



Arthur Andersen LLP


Minneapolis, Minnesota,
April 2, 2001



                                      F-2

<PAGE>
 

Independent Auditor's Report



The Board of Directors and Shareholders
Apogee Enterprises, Inc.:

We have audited the fiscal 1999 consolidated financial statements of Apogee
Enterprises, Inc. and subsidiaries as listed in the accompanying index. In
connection with our audit of the fiscal 1999 consolidated financial statements,
we also have audited the financial statement schedule for fiscal 1999 as listed
in the accompanying index. These consolidated financial statements and the
financial statement schedule are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated financial
statements and financial statement schedule based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the results of operations and cash flows of
Apogee Enterprises, Inc. and subsidiaries for the year ended February 27, 1999
in conformity with accounting principles generally accepted in the United States
of America. Also, in our opinion, the related financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the fiscal 1999 information
set forth therein.


KPMG LLP


Minneapolis, Minnesota
April 12, 1999, except as to Note 11 which is as of February 14, 2000



                                      F-3

<PAGE>
 
CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                            March 3,   February 26,
(In thousands)                                                                2001        2000
-----------------------------------------------------------------------------------------------------
<S>                                                                        <C>          <C>    
Assets
Current assets
  Cash and cash equivalents                                                $   4,689    $   7,192
  Receivables, net of allowance for doubtful accounts                        121,461      125,064
  Inventories                                                                 40,434       68,184
  Deferred income taxes                                                        4,854        8,435
  Other current assets                                                         3,753        5,547
-----------------------------------------------------------------------------------------------------
    Total current assets                                                     175,191      214,422
-----------------------------------------------------------------------------------------------------

Property, plant and equipment, net                                           147,593      186,039
Marketable securities available for sale                                      24,451       24,951
Investments in affiliated companies                                           32,530          418
Intangible assets, at cost less accumulated
     amortization of $12,520 and $11,668, respectively                        50,145       50,549
Other assets                                                                   2,769        4,775
-----------------------------------------------------------------------------------------------------
         Total assets                                                      $ 432,679    $ 481,154
=====================================================================================================


Liabilities and Shareholders' Equity
Current liabilities
  Accounts payable                                                         $  59,537    $  57,989
  Accrued expenses                                                            57,571       56,624
  Current liabilities of discontinued operations, net                          2,578        2,907
  Billings in excess of costs and earnings on uncompleted contracts           10,330        9,827
  Accrued income taxes                                                         7,093        7,868
  Current installments of long-term debt                                         328          182
-----------------------------------------------------------------------------------------------------
     Total current liabilities                                               137,437      135,397
-----------------------------------------------------------------------------------------------------

Long-term debt, less current installments                                    104,206      164,371
Other long-term liabilities                                                   24,466       25,248
Liabilities of discontinued operations, net                                   18,278       18,366

Commitments and contingent liabilities (Notes 6, 13 and 14)

Shareholders' equity
  Common stock of $0.33-1/3 par value; authorized 50,000,000 shares;
    issued and outstanding, 27,825,000 and 27,743,000, respectively            9,275        9,248
  Additional paid-in capital                                                  45,773       45,106
  Retained earnings                                                           93,543       84,608
  Unearned compensation                                                         (757)        (888)
  Net unrealized gain (loss) on marketable securities                            458         (302)
-----------------------------------------------------------------------------------------------------
    Total shareholders' equity                                               148,292      137,772
-----------------------------------------------------------------------------------------------------
    Total liabilities and shareholders' equity                             $ 432,679    $ 481,154
=====================================================================================================
</TABLE>


See accompanying notes to consolidated financial statements.


                                      F-4

<PAGE>
 
CONSOLIDATED RESULTS OF OPERATIONS


<TABLE>
<CAPTION>

                                                       Year Ended        Year Ended           Year Ended
(In thousands, except per share data)                March 3, 2001    February 26, 2000    February 27, 1999
-------------------------------------------------------------------------------------------------------------
<S>                                                    <C>               <C>                <C>      
Net sales                                              $ 865,200         $ 840,488          $ 788,062
Cost of sales                                            686,203           673,253            617,647
-------------------------------------------------------------------------------------------------------------
     Gross profit                                        178,997           167,235            170,415
Selling, general and administrative expenses             147,103           147,817            127,063
-------------------------------------------------------------------------------------------------------------
     Operating income                                     31,894            19,418             43,352
Interest expense, net                                     11,122            10,359              9,494
Equity in income (loss) of affiliated companies            1,465            (2,817)            (1,424)
-------------------------------------------------------------------------------------------------------------
     Earnings from continuing operations before 
       income taxes                                       22,237             6,242             32,434
Income taxes                                               8,876             3,171             12,189
-------------------------------------------------------------------------------------------------------------
        Earnings from continuing operations               13,361             3,071             20,245
Earnings from operations of                                                               
   Discontinued businesses, net of income taxes            1,641             9,104              4,988
-------------------------------------------------------------------------------------------------------------
     Net earnings                                      $  15,002         $  12,175          $  25,233
-------------------------------------------------------------------------------------------------------------
Earnings per share - basic                                                                
     Continuing operations                             $    0.48         $    0.11          $    0.73
     Discontinued operations                                0.06              0.33               0.18
-------------------------------------------------------------------------------------------------------------
     Net earnings                                      $    0.54         $    0.44          $    0.91
-------------------------------------------------------------------------------------------------------------
Earnings per share - diluted                                                              
     Continuing operations                             $    0.48         $    0.11          $    0.73
     Discontinued operations                                0.06              0.33               0.18
-------------------------------------------------------------------------------------------------------------
     Net earnings                                      $    0.54         $    0.44          $    0.91
-------------------------------------------------------------------------------------------------------------
Weighted average basic shares outstanding                 27,835            27,746             27,586
Weighted average diluted shares outstanding               27,898            27,794             27,762
-------------------------------------------------------------------------------------------------------------
</TABLE>


See accompanying notes to consolidated financial statements.


                                      F-5

<PAGE>
 
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                                                                   Net Unrealized 
                                   Common                  Additional                               Gain (Loss) on                
                                   Shares     Common        Paid-In       Retained    Unearned        Marketable     Comprehensive
(In thousands)                  Outstanding    Stock        Capital       Earnings   Compensation     Securities        Earnings  
----------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>           <C>          <C>            <C>        <C>           <C>               <C>          
Balance at February 28, 1998       27,453     $9,151        $38,983       $61,899      $(686)            $ 254                
     Net earnings                                                          25,233                                      $ 25,233 
     Unrealized loss on
       marketable securities,          
       net of $93 tax benefit                                                                             (174)            (174)
                                                                                                                    -------------
     Comprehensive earnings                                                                                            $ 25,059
                                                                                                                    =============
     Unearned compensation                                                               (35)
     Common stock issued              306        102          2,994
     Common stock repurchased 
       and retired                   (136)       (45)           (74)       (1,272)
     Cash dividends ($0.205 
       per share)                                                          (5,666)
----------------------------------------------------------------------------------------------------------------------------------

Balance at February 27, 1999       27,623      9,208         41,903        80,194       (721)               80
     Net earnings                                                          12,175                                      $ 12,175
     Unrealized loss on
       marketable securities,
       net of $204 tax benefit                                                                            (382)            (382)
                                                                                                                    -------------
     Comprehensive earnings                                                                                            $ 11,793
                                                                                                                    =============
     Unearned compensation                                                              (167)
          Tax benefit associated 
            with stock plans                                    803
     Common stock issued              309        103          2,678
     Common stock repurchased 
       and retired                   (189)       (63)          (278)       (1,928)
     Cash dividends ($0.21
      per share)                                                           (5,833)
----------------------------------------------------------------------------------------------------------------------------------

Balance at February 26, 2000       27,743      9,248         45,106        84,608       (888)             (302)
     Net earnings                                                          15,002                                      $ 15,002  
     Unrealized gain on
       marketable securities,          
       net of $407 tax expense                                                                             760              760
                                                                                                                    -------------
     Comprehensive earnings                                                                                            $ 15,762
                                                                                                                    =============
     Unearned compensation                                                               131
          Tax benefit associated 
            with stock plans                                    236
              
     Common stock issued              118         39            493
     Common stock repurchased 
       and retired                    (36)       (12)           (62)         (233)
     Cash dividends ($0.21
      per share)                                                           (5,834)
-----------------------------------------------------------------------------------------------------------------
Balance at March 3, 2001           27,825     $9,275        $45,773       $93,543      $(757)            $ 458   
=================================================================================================================
</TABLE>


See accompanying notes to consolidated financial statements.


                                      F-6

<PAGE>
 
CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                         Year Ended         Year Ended        Year Ended
(In thousands)                                                          March 3, 2001   February 26, 2000  February 27, 1999
------------------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>             <C>                <C>              
Operating Activities
Net earnings                                                               $15,002           $12,175            $25,233
Adjustments to reconcile net earnings to net cash provided by
    operating activities:
    Net earnings from discontinued operations                               (1,641)           (9,104)            (4,988)
    Depreciation and amortization                                           34,229            33,019             25,798
    Deferred income tax expense (benefit)                                    4,422            (3,319)             4,844
    Equity in (income) loss of affiliated companies                         (1,465)            2,817              1,424
    Net cash flow to discontinued operations                                (3,151)             (534)           (13,580)
    Other, net                                                               2,857               643               (349)
------------------------------------------------------------------------------------------------------------------------------
        Cash flow before changes in operating assets and liabilities        50,253            35,697             38,382
    Changes in operating assets and liabilities, net of effect of
      acquisitions and investment in joint venture:
      Receivables                                                            4,292            (6,828)           (17,115)
      Inventories                                                            5,394               637             (7,128)
      Other current assets                                                   1,682                30              1,295
      Accounts payable and accrued expenses                                    998            20,330              5,151
      Billings in excess of costs and earnings on uncompleted                  503            (1,795)             4,680
      contracts
      Refundable and accrued income taxes                                     (539)            2,004             26,972
      Other                                                                   (973)           (6,239)               778
------------------------------------------------------------------------------------------------------------------------------
           Net cash provided by operating activities                        61,610            43,836             53,015
------------------------------------------------------------------------------------------------------------------------------
Investing Activities
Capital expenditures                                                       (14,823)          (44,025)           (77,392)
Proceeds from sales of property, plant and equipment                        17,834            14,672                310
Acquisition of businesses, net of cash acquired                             (3,602)           (1,983)              (380)
Purchases of marketable securities                                          (7,900)          (17,469)           (24,315)
Sales/maturities of marketable securities                                    9,570            19,169             15,515
Investment in and advances to affiliated companies                          (3,083)           (2,665)            (1,285)
Dividends from affiliated companies                                          1,247               --                 -- 
Net cash flow from discontinued operations                                   4,375             2,000             22,500
Other, net                                                                    (856)             (162)               (62)
------------------------------------------------------------------------------------------------------------------------------
           Net cash provided by (used in) investing activities               2,762           (30,463)           (65,109)
------------------------------------------------------------------------------------------------------------------------------
Financing Activities
Payments on long-term debt                                                 (60,703)           (9,494)            (1,446)
Proceeds from issuance of long-term debt                                       --              7,650             14,197
Increase in deferred debt expense                                             (563)             (334)            (3,107)
Proceeds from issuance of common stock                                         532             2,781              3,096
Repurchase and retirement of common stock                                     (307)           (2,269)            (1,515)
Dividends paid                                                              (5,834)           (5,833)            (5,666)
------------------------------------------------------------------------------------------------------------------------------
           Net cash (used in) provided by financing activities             (66,875)           (7,499)             5,559
------------------------------------------------------------------------------------------------------------------------------
(Decrease) increase in cash and cash equivalents                            (2,503)            5,874             (6,535)
Cash and cash equivalents at beginning of year                               7,192             1,318              7,853
------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year                                  $  4,689          $  7,192            $ 1,318
==============================================================================================================================

Supplemental schedule of non-cash investing activities:
Net assets contributed to PPG Auto Glass, LLC (see Note 5)                $ 30,359          $   --              $   -- 
==============================================================================================================================
</TABLE>


See accompanying notes to consolidated financial statements.


                                      F-7

<PAGE>
 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     1 Summary of Significant Accounting Policies and Related Data

Basis of Consolidation. The consolidated financial statements include the
accounts of Apogee and all majority-owned subsidiaries (the Company). As
explained in Note 11, the Company's curtainwall contracting and
detention/security contracting businesses are reported as discontinued
operations, along with the Company's interest in VIS'N Service Corporation. The
equity method is used to account for the Company's joint ventures. Intercompany
transactions have been eliminated in consolidation. Certain amounts from
prior-years' financial statements have been reclassified to conform with this
year's presentation.

Cash and Cash Equivalents. Investments with an original maturity of three months
or less are included in cash and cash equivalents.

Inventories. Inventories, which consist primarily of purchased glass and
aluminum, are valued at the lower of cost or market. Approximately 93% of the
inventories are valued by use of the last-in, first-out (LIFO) method, which
does not exceed market. If the first-in, first-out (FIFO) method had been used,
inventories would have been $3,135,000 and $3,127,000 higher than reported at
March 3, 2001, and February 26, 2000, respectively.

Property, Plant and Equipment. Property, plant and equipment are carried at
cost. Significant improvements and renewals are capitalized. Repairs and
maintenance are charged to expense as incurred. Depreciation is computed on a
straight-line basis, based on estimated useful lives of 20 to 40 years for
buildings and 2 to 15 years for equipment.

Intangible Assets and Amortization. Intangible assets consist principally of the
excess of cost over the fair value of net assets acquired (goodwill) and are
amortized on a straight-line basis, primarily over 40 years. Amortization
expense amounted to $2,370,000, $2,287,000 and $2,060,000 in 2001, 2000 and
1999, respectively.

Long-Lived Assets. The carrying value of long-lived assets such as property,
plant and equipment and intangible assets is reviewed when circumstances suggest
that the assets have been impaired. If this review indicates that the long-lived
assets will not be recoverable based on the estimated undiscounted cash flows
over the remaining amortization period, the carrying value of such assets must
be reduced to estimated fair value. The Company has assets at a net book value
of $14 million associated with a portion of an Enterprise Resource Planning
(ERP) project, the majority of which is in service and is being amortized. In
accordance with Statement of Financial Accounting Standards (SFAS) No. 121, the
Company will continue to monitor the viability of this investment.

Insurance Subsidiary. Prism Assurance, Inc. (Prism) is a wholly owned insurance
subsidiary that insures the Company's workers' compensation, general liability
and automobile liability risks. Prism invests in fixed maturity investments
which are classified as "available for sale" and are carried at market value as
prescribed by SFAS No. 115. Reserve requirements are established based on
actuarial projections of ultimate losses. Apogee also has accruals for losses
incurred prior to Prism's formation (1996). Losses estimated to be paid within
12 months are classified as accrued expenses, while losses expected to be
payable in later periods are included in other long-term liabilities.

Revenue Recognition. The Company recognizes revenue from construction contracts
on a percentage-of-completion basis, measured by the percentage of costs
incurred to date to estimated total costs for each contract. Contract costs
include materials, labor and other direct costs related to contract performance.
Provisions are established for estimated losses, if any, on uncompleted
contracts in the period in which such losses are determined. Amounts
representing contract change orders, claims or other items are included in sales
only when they have been approved by customers. Revenue from the sale of
products or services provided and the related cost of sales are recorded upon
shipment or as services are rendered.

Income Taxes. The Company accounts for income taxes as prescribed by SFAS No.
109, which requires use of the asset and liability method. This method
recognizes deferred tax assets and liabilities based upon the future tax
consequences of temporary differences between financial and tax reporting.


                                      F-8

<PAGE>
 
Foreign Operations. The financial statements of foreign operations have been
translated to U.S. dollars, using the rules of SFAS No. 52. Balance sheet
accounts are stated in U.S. dollars, generally at the year-end exchange rate.
Results of operations are translated at average exchange rates for the
respective period.

     The Company may periodically enter into forward currency exchange contracts
to manage specific foreign currency exposures related to foreign construction
contracts, receivables and bank borrowings denominated in foreign currencies. As
of March 3, 2001, there were no forward contracts outstanding as the Company had
no material foreign currency exchange exposure. Gains and losses on forward
contracts related to receivables are recognized currently, while gains and
losses related to construction projects are deferred and accounted for as a part
of the related transaction.

Accounting Period. Apogee's fiscal year ends on the Saturday closest to February
28. Fiscal year 2001 consisted of fifty-three weeks, while fiscal 2000 and 1999
each consisted of fifty-two weeks.

Accounting Estimates. The preparation of the consolidated financial statements
in conformity with accounting principles generally accepted in the U.S. requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the consolidated financial statements and the reported amounts of
net sales and expenses during the reporting period. Amounts subject to
significant estimates and assumptions include, but are not limited to, insurance
reserves, reserves related to discontinued operations, and net sales recognition
for construction contracts, including the status of outstanding disputes and
claims. Actual results could differ from those estimates.

New Accounting Standards. The Financial Accounting Standards Board (FASB) issued
SFAS No. 133 regarding accounting for derivative instruments and hedging
activities. SFAS No. 133, as amended by SFAS No. 137 and No. 138, establishes
accounting and reporting standards requiring that derivative instruments
(including certain derivative instruments embedded in other contracts) be
recorded in the balance sheet either as an asset or liability measured at fair
value. SFAS No. 133 requires changes in the derivative's fair value to be
recognized in earnings or, for derivatives that hedge market risk related to
future cash flows, in accumulated other comprehensive income, unless specific
hedge accounting criteria are met. The Company adopted SFAS No. 133 on March 4,
2001, which resulted in the Company recording the fair value of the interest
rate swaps described in Note 6 as a liability with an offsetting adjustment to
other comprehensive earnings.

     2 Working Capital

Receivables
(In thousands)                              2001        2000
--------------------------------------------------------------
Trade accounts                          $ 102,171   $ 110,704
Construction contracts                     16,819      15,550
Contract retainage                          6,334       5,212
Other receivables                           5,079       4,138
--------------------------------------------------------------
Total receivables                         130,403     135,604
Less allowance for doubtful accounts       (8,942)    (10,540)
--------------------------------------------------------------
  Net receivables                       $ 121,461   $ 125,064
--------------------------------------------------------------

     The Company provides products and services to the commercial and
institutional new construction and remodeling markets, the automotive
replacement glass market and selected consumer markets. There is no
concentration of credit risk due to the diversity of the markets, channels of
distribution, and the geographic location of customers. Allowances are
maintained for potential credit losses and such losses have been within
management's expectations.


                                      F-9

<PAGE>
 
Inventories
(In thousands)                            2001      2000
----------------------------------------------------------
Raw materials                           $20,124   $18,966
Work-in-process                           6,259     4,995
Finished goods                           12,406    43,439
Costs and earnings in excess of
   Billings on uncompleted contracts      1,645       784
----------------------------------------------------------
     Total inventories                  $40,434   $68,184
----------------------------------------------------------


Accrued Expenses
 (In thousands)                           2001      2000
----------------------------------------------------------
Payroll and related benefits            $24,077   $21,770
Insurance                                 9,928    10,529
Taxes, other than income taxes            3,927     4,802
Pension                                   4,777     4,685
Interest                                  1,048       630
Other                                    13,814    14,208
----------------------------------------------------------
     Total accrued expenses             $57,571   $56,624
----------------------------------------------------------

     3 Property, Plant and Equipment

(In thousands)                                   2001         2000
-------------------------------------------------------------------
Land                                        $   5,408    $   3,964
Buildings and improvements                     89,787       91,042
Machinery and equipment                       139,290      153,186
Office equipment and furniture                 60,627       63,472
Construction-in-progress                        8,656       22,684
-------------------------------------------------------------------
Total property, plant and equipment           303,768      334,348
Less accumulated depreciation                (156,175)    (148,309)
-------------------------------------------------------------------
     Net property, plant and equipment      $ 147,593    $ 186,039
-------------------------------------------------------------------

     Depreciation expense was $31,859,000, $30,732,000 and $23,738,000 in 2001,
2000 and 1999, respectively.

     4 Marketable Securities

     Prism invests in fixed maturity investments classified as "available for
sale" and carried at market value as prescribed by SFAS No. 115. Unrealized
gains and losses are reported in a separate component of shareholders' equity,
net of income taxes, until the investments are sold. The amortized cost, gross
unrealized gains and losses and estimated fair values of investments available
for sale at March 3, 2001 and February 26, 2000 are as follows:

                                      Gross         Gross      Estimated
                     Amortized   Unrealized    Unrealized         Market
(in thousands)            Cost        Gains        Losses          Value
-------------------------------------------------------------------------
March 3, 2001
U.S. Treasury Notes   $  3,464         $ 82        $  --        $ 3,546
Municipal bonds         20,282          675          (52)         20,905
-------------------------------------------------------------------------
Total investments     $ 23,746         $757        $ (52)       $ 24,451
-------------------------------------------------------------------------

February 26, 2000
U.S. Treasury Notes   $  5,466         $ --        $(248)       $  5,218
Municipal bonds         19,947           40         (254)         19,733
-------------------------------------------------------------------------
Total investments     $ 25,413         $ 40        $(502)       $ 24,951
-------------------------------------------------------------------------


                                      F-10

<PAGE>
 
     The amortized cost and estimated fair values of investments at March 3,
2001 by contractual maturity are shown below. Expected maturities may differ
from contractual maturities as borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.

                                               Amortized           Estimated
(in thousands)                                      Cost        Market Value
-----------------------------------------------------------------------------
Due within one year                              $ 1,507             $ 1,514
Due after one year through five years             10,694              10,915
Due after five years through ten years             3,784               4,004
Due after ten years through fifteen years          2,636               2,756
Due beyond fifteen years                           5,125               5,262
-----------------------------------------------------------------------------
Total                                            $23,746             $24,451
-----------------------------------------------------------------------------

     Gross realized gains of $30,000, $15,000 and $120,000 and gross realized
losses of $94,000, $536,000 and $0 were recognized in fiscal 2001, 2000 and
1999, respectively, and are included in interest expense, net in the
accompanying Consolidated Results of Operations.

     5 Investments


     The Company has acquired through joint venture, investments that are
accounted for by the equity method. The nature and extent of these investments
change over time.

     On July 29, 2000, the Company and PPG Industries combined their U.S.
automotive replacement glass distribution businesses in a new entity, PPG Auto
Glass, LLC (PPG Auto Glass) of which the Company has a 34 percent interest. On
March 3, 2001, the Company's investment in PPG Auto Glass was $32.2 million, of
which $7.6 million represents the unamortized excess of the cost of the
investment over the value of the underlying net tangible assets when the joint
venture was formed. This excess is being amortized over a life of 20 years.

     The Company's investment in TerraSun LLC relates to a research and
development joint venture of which the Company has a 50 percent interest.


     6 Long-Term Debt

(In thousands)                                2001         2000
-----------------------------------------------------------------
Borrowings under revolving credit
     agreement, interest ranging from
     6.38% to 8.38%                        $ 96,000     $156,500
Other                                         8,534        8,053
Total long-term debt                        104,534      164,553
Less current installments                      (328)        (182)
-----------------------------------------------------------------
     Net long-term debt                    $104,206     $164,371
-----------------------------------------------------------------

     Long-term debt maturities are as follows:

Fiscal Year                         (In thousands)
------------------------------------------------------
2002                                    $    328
2003                                         328
2004                                      96,228
2005                                          --
2006                                          --
Thereafter                                 7,650
------------------------------------------------------
     Total                              $104,534
------------------------------------------------------

In May 1998, the Company obtained a five-year, committed, secured credit
facility in the amount of $275 million. This credit facility requires the
Company to maintain minimum levels of net worth and certain financial ratios.
The 


                                      F-11

<PAGE>
 
total commitment of the credit facility was reduced by the sales price, net
of taxes, of the sale of the detention/security business, resulting in a
committed credit facility of $253 million as of February 26, 2000. The total
commitment of the credit facility was again reduced in April 2000, resulting in
a committed credit facility of $200 million as of March 3, 2001. The majority of
the borrowings under the credit facility are made at a rate equal to three-month
LIBOR (London Interbank Offered Rate) plus an applicable margin. The applicable
margin is calculated based upon the Company's financial ratios. At March 3,
2001, the applicable margin was 1.5%. The Company's receivables, inventory,
equipment and intangibles secure the credit facility. Based upon the Company's
satisfaction of certain financial covenants during fiscal 2001, the Company has
the right to cause this security interest to be released upon its request. At
March 3, 2001, the Company was in compliance with all of the financial covenants
of the credit facility.

     Selected information related to bank borrowings is as follows:

(In thousands, except percentages)                       2001         2000
---------------------------------------------------------------------------
Average daily borrowings during the year             $136,284     $174,869
Maximum borrowings outstanding during the year        156,800      195,300
Weighted average interest rate during the year           8.1%         6.9%
---------------------------------------------------------------------------

     In 2000, the Company entered into an interest rate swap agreement that
effectively converted $10 million of variable rate borrowings into a fixed rate
obligation. Under this agreement, which expires in 2003, the Company receives
payments at variable rates while making payments at a fixed rate of 7.21%. In
1999, the Company entered into an interest rate swap agreement that effectively
converted $25 million of variable rate borrowings into a fixed rate obligation.
Under this agreement, which expires in 2004, the Company receives payments at
variable rates while making payments at a fixed rate of 7.125%. The net interest
paid or received associated with these agreements is included in interest
expense. The net present liability associated with these interest rate swap
agreements was $1.8 million and $198,000 at March 3, 2001 and February 26, 2000,
respectively.

     7 Interest, Net

(In thousands)                        2001        2000         1999
--------------------------------------------------------------------
Interest on debt                  $ 12,610     $11,939      $10,898
Other interest expense                 420         636          619
--------------------------------------------------------------------
Total interest expense              13,030      12,575       11,517
Less interest income                (1,908)     (2,216)      (2,023)
--------------------------------------------------------------------
  Interest expense, net           $ 11,122     $10,359      $ 9,494
--------------------------------------------------------------------

Interest payments, including interest expense allocated to discontinued
operations, were $12,262,000, $12,477,000 and $12,067,000 in 2001, 2000 and
1999, respectively.

     8 Employee Benefit Plans

     The Company maintains a qualified defined contribution pension plan that
covers substantially all full-time, non-union employees. Contributions to the
plan are based on a percentage of employees' base earnings. Deposits of the
pension costs with the trustee are made annually. All pension costs were fully
funded or accrued as of year-end. Contributions to the plan were $4,734,000,
$4,920,000 and $4,209,000 in 2001, 2000 and 1999, respectively.

     The Company also maintains a 401(k) savings plan, which allows employees to
contribute 1% to 13% of their compensation. Apogee matches 30% of the first 6%
of the employee contributions. Contributions to the plan were $1,967,000,
$2,098,000 and $2,009,000 in 2001, 2000 and 1999, respectively.

     9 Shareholders' Equity and Stock Option Plans

     A class of 200,000 shares of junior preferred stock with a par value of
$1.00 is authorized, but unissued.

     The Company has a Shareholders' Rights Plan, under which each share of
outstanding common stock has an associated preferred share purchase right. The
rights are exercisable only under certain circumstances, including the


                                      F-12

<PAGE>
 
acquisition by a person or group of 10% of the outstanding shares of the
Company's common stock. Upon exercise, the rights would allow holders of such
rights to purchase common stock of Apogee or an acquiring company at a
discounted price, which generally would be 50% of the respective stock's current
fair market value.

     The 1997 Stock Option Plan and 1987 Stock Option Plan (the "Plans") each
provide for the issuance of up to 2,500,000 options to purchase Company stock.
Options awarded under these Plans, either in the form of incentive stock options
or nonstatutory options, are exercisable at an option price equal to the fair
market value at the date of award. The 1987 Plan has expired and no new grants
of stock options may be made under this Plan.

     The 1987 Partnership Plan, a plan designed to increase the ownership of
Apogee stock by key employees, allows participants selected by the Compensation
Committee of the Board of Directors to use earned incentive compensation to
purchase Apogee common stock. The purchased stock is then matched by an equal
award of restricted stock, which vests over a predetermined period. Common
shares of 3,200,000 are authorized for issuance under the Plan. As of March 3,
2001, 2,514,000 shares have been issued or committed under the Plan. The Company
expensed $1,814,000, $786,000 and $1,926,000 in conjunction with the Partnership
Plan in 2001, 2000 and 1999, respectively.

   A summary of option transactions under the Plans for 2001, 2000 and 1999
follows:

                                               Options Outstanding
-------------------------------------------------------------------------------
                                   Number of       Average      Option Price
                                     Shares    Exercise Price      Range
-------------------------------------------------------------------------------
Balances, February 28, 1998         1,484,000     $ 12.53      $  4.48 - $25.00
Options granted                       443,000       13.94        10.63 -  15.25
Options exercised                    (160,946)       6.92         5.88 -   8.69
Options canceled                     (184,540)      14.33         5.88 -  16.75
-------------------------------------------------------------------------------
Balances, February 27, 1999         1,581,514       13.27         4.48 -  25.00
Options granted                       453,500       11.28         6.75 -  13.44
Options exercised                    (136,704)       6.66         6.50 -   8.69
Options canceled                     (238,875)      14.11         6.50 -  16.75
-------------------------------------------------------------------------------
Balances, February 26,2000          1,659,435       13.15         4.48 -  25.00
Options granted                       728,100        4.80         3.75 -   5.81
Options exercised                      (1,250)       4.19         4.19 -   4.19
Options canceled                     (274,507)      10.28         3.97 -  17.75
-------------------------------------------------------------------------------
Balances, March 3, 2001             2,111,778     $ 10.67       $ 3.75 - $25.00
-------------------------------------------------------------------------------

The following table summarizes information about stock options outstanding and
exercisable at March 3, 2001:


<TABLE>
<CAPTION>
                           Options Outstanding                Options Exercisable
                ----------------------------------------  --------------------------
   Range of                    Remaining    Weighted-                    Weighted-       
   Exercise       Number      Contractual    Average        Number        Average      
    Prices      Outstanding       Life    Exercise Price  Exercisable  Exercise Price
------------------------------------------------------------------------------------
<S>             <C>             <C>         <C>           <C>            <C>
$ 3.75- $ 5.00     563,370      8.9 years   $ 4.69           54,970       $ 4.04
  5.01-  12.50     647,288      6.9 years     9.62          322,424         9.50
 12.51-  25.00     901,120      5.7 years    15.16          740,520        15.25
------------------------------------------------------------------------------------
                 2,111,778      6.9 years   $10.67        1,117,914       $13.04
------------------------------------------------------------------------------------
</TABLE>



     In accordance with the disclosure-only provisions of SFAS No. 123,
Accounting for Stock-Based Compensation, no compensation cost has been
recognized with respect to the Plans. Had compensation cost for the Plans been
determined based on the fair value of the awards, the Company's net earnings
(loss) and earnings (loss) per share would have been reduced to the pro forma
amounts indicated below:


                                      F-13

<PAGE>
 
(In thousands, except per share data)  2001        2000         1999
----------------------------------------------------------------------
As reported:
Net earnings
   Continuing operations             $13,361     $ 3,071      $20,245
   Discontinued operations             1,641       9,104        4,988
----------------------------------------------------------------------
                                     $15,002     $12,175      $25,233
----------------------------------------------------------------------
Earnings per share - diluted
   Continuing operations             $  0.48     $  0.11      $  0.73
   Discontinued operations              0.06        0.33         0.18
----------------------------------------------------------------------
                                     $  0.54     $  0.44      $  0.91
----------------------------------------------------------------------
Pro forma:
Net earnings (loss)
   Continuing operations             $10,045     $  (250)     $17,477
   Discontinued operations             1,641       9,104        4,988
----------------------------------------------------------------------
                                     $11,686     $ 8,854      $22,465
----------------------------------------------------------------------
Earnings (loss) per share-diluted
   Continuing operations             $  0.35     $ (0.01)     $  0.63
   Discontinued operations              0.06        0.32         0.18
----------------------------------------------------------------------
                                     $  0.41     $  0.32      $  0.81
----------------------------------------------------------------------

     The above pro forma amounts may not be representative of the effects on
reported net earnings (loss) for future years. The fair value of each option
grant is estimated on the date of grant using the Black-Scholes option-pricing
model with the following weighted-average assumptions used for grants in 2001,
2000 and 1999:

                                        2001      2000       1999
------------------------------------------------------------------
Dividend yield                          4.4%      1.8%       1.5%
Expected volatility                    60.5%     62.4%      38.0%
Risk-free interest rate                 7.5%      4.8%       6.0%
Expected lives                      10 years  10 years   10 years
------------------------------------------------------------------

     10 Income Taxes

     The components of income tax expense (benefit) related to continuing
operations for each of the last three fiscal years are as follows:

(In thousands)                         2001       2000        1999
---------------------------------------------------------------------
Current:
Federal                              $ 3,642     $ 6,229     $ 8,267
State and local                          402         466       1,175
---------------------------------------------------------------------
     Total current                   $ 4,044     $ 6,695     $ 9,442
---------------------------------------------------------------------

Deferred:
Federal                              $ 4,282    $(3,453)     $ 2,414
State and local                          550        (71)         333
---------------------------------------------------------------------
     Total deferred                  $ 4,832    $(3,524)     $ 2,747
---------------------------------------------------------------------

---------------------------------------------------------------------
Total income tax expense             $ 8,876     $ 3,171     $12,189
---------------------------------------------------------------------

     Income tax payments, net of refunds, were $4,463,000, $8,508,000, and
$2,090,000 in 2001, 2000, and 1999, respectively.

     The differences between statutory federal tax rates and consolidated
effective tax rates are as follows:


                                      F-14

<PAGE>
 
                                       2001      2000       1999
--------------------------------------------------------------------
Statutory federal tax rate              35.0%     35.0%     35.0%
State and local income taxes, net        2.8       4.1
     of federal tax benefit                                  3.0
Tax credits                             (3.3)     (2.0)     (1.5)
Foreign sales corporation               (0.8)     (7.3)     (1.1)
Goodwill amortization                   1.8       6.4        1.0
Meals and entertainment                 1.3       5.5        1.2
Other, net (including changes in
     tax reserves and tax-exempt
     interest)                           3.1       9.1       0.0
--------------------------------------------------------------------
Consolidated effective tax rate         39.9%     50.8%     37.6%
--------------------------------------------------------------------

     Tax benefits for deductions associated with the 1987 Stock Option Plan and
the 1987 Partnership Plan amounted to $236,000, $803,000 and $0 in 2001, 2000,
and 1999, respectively. These benefits were added directly to additional paid-in
capital and were not reflected in the determination of income tax expense.

     Deferred tax assets and deferred tax liabilities at March 3, 2001 and
February 26, 2000 are as follows:

                                        2001                     2000
                              ------------------------  ----------------------
(In thousands)                 Current      Noncurrent   Current      Noncurrent
--------------------------------------------------------------------------------
Accounts receivable           $   3,457    $    (183)   $   3,628    $     (369)
Accrued insurance                   ---        3,205          ---        2,837
Deferred compensation                37        6,208           37        7,837
Restructuring reserve               ---          ---        2,910          ---
Inventory                           559           10        1,377          201
Depreciation                        ---       (2,816)         143       (6,156)
Employee benefit plans             (372)         ---       (1,899)         ---
Other                             1,173       (4,817)       2,239       (1,492)
--------------------------------------------------------------------------------
Deferred tax assets           $   4,854    $   1,607    $   8,435    $   2,858
--------------------------------------------------------------------------------

     11 Discontinued Operations

     During fiscal 2001, the Company completed the sale of substantially all of
the assets of VIS'N Service Corporation (VIS'N), a non-auto glass focused,
third-party administered claims processor, in two separate transactions. In
fiscal 2000, Apogee's Board of Directors authorized the exit from the Company's
interest in VIS'N. In fiscal 2000, the Company completed the sale of 100% of the
stock of its large-scale domestic curtainwall business, Harmon, Ltd. In fiscal
1999, Apogee's Board of Directors authorized the divestiture of the
detention/security operations and the Company executed the sale the business.
Combined with the fiscal 1998 exit from international curtainwall operations,
these transactions effectively remove the Company from the large-scale
construction business and the third party administered claims processing
business. Accordingly, these businesses are presented as discontinued operations
in the consolidated financial statements and notes. Prior periods have been
restated.

(In thousands)                             2001         2000           1999
------------------------------------------------------------------------------
Earnings from Operations
of Discontinued Businesses
Net sales                                 $ 2,750     $ 28,331      $ 168,739
Earnings before income
   Taxes and minority interest*             2,525        9,821          7,590
Income tax expense                            884          717          2,837
Minority interest                              --           --           (235)
Earnings from operations,
   Net of income taxes                    $ 1,641     $  9,104       $  4,988
------------------------------------------------------------------------------
*    Includes net interest expense allocations (based on the ratio of net
     operating assets of discontinued operations to consolidated net assets) of
     $0, $111,000 and $444,000 for 2001, 2000 and 1999, respectively.


                                      F-15

<PAGE>
 
     The 2000 effective income tax rate of 7.3% on discontinued operations was
due to a decrease in the valuation allowance resulting from the utilization of
certain tax assets that were previously reserved for.

(In thousands)                                         2001          2000
-----------------------------------------------------------------------------
Net Liabilities of Discontinued Operations
Current assets                                       $     629     $   3,983
Property, plant and equipment, net                          --           782
Other assets                                                --         3,248
Accrued liabilities                                    (21,485)      (29,286)
-----------------------------------------------------------------------------
Net liabilities of discontinued operations           $ (20,856)    $ (21,273)
Less net current liabilities of discontinued 
     operations                                          2,578         2,907
-----------------------------------------------------------------------------
Net long term liabilities of discontinued        
     operations                                      $ (18,278)    $ (18,366)
-----------------------------------------------------------------------------

     In fiscal 1998, the Company recorded pre-tax charges of $96.1 million
related to the international curtainwall operations. The charges included an
amount for the estimated loss on disputed construction contracts in Europe,
including the accrual of certain penalty amounts, and a provision for the
accrual of legal and related costs associated with the resolution of legal
proceedings related to organizational changes in the majority-owned European
curtainwall unit. The charges also included amounts for severance and
termination benefits for employees in France, Asia and the U.S., the write-down
of property and equipment and other long-term assets to their estimated net
salable value and other items such as lease termination costs. The charges also
reflected the estimated costs associated with exiting the European operations,
including the completion of certain remaining projects. In March 1998, the five
operating companies comprising the European curtainwall operations filed for
bankruptcy or commenced liquidation, effectively relinquishing control over
those entities.

     At March 3, 2001, accruals totaling $20.9 million represented the remaining
estimated future cash outflows associated with the exit from discontinued
operations. The majority of these cash expenditures are expected to be made
within the next two to three years. The primary components of the accrual relate
to the completion of certain construction projects, costs to exit VIS'N, legal
costs and other costs associated with the proceedings noted above.

     12 Acquisitions

     In fiscal 2001, the Large-Scale Optical Technologies segment expanded its
pre-framed art business by purchasing two high-end pre-framed art companies. The
purchase price of these businesses was $3.6 million, including $2.9 million of
goodwill.

     In fiscal 2000, the Auto Glass segment purchased the assets of one
distribution center. The purchase price of the acquisition was $2.0 million,
including $596,000 recorded as goodwill.

     During fiscal 1999, the Auto Glass segment purchased an 80% interest in an
insurance claims and policy processing outsource company (VIS'N). The aggregate
purchase price of the acquisition was $2.8 million. Goodwill of $3.4 million was
recorded and liabilities of $1.4 million were assumed.

     Unless noted, no liabilities were assumed in the above transactions. All of
the above transactions were accounted for by the purchase method. Accordingly,
the consolidated financial statements include the net assets and results of
operations from the dates of acquisition.

     13 Leases

     As of March 3, 2001, the Company was obligated under noncancelable
operating leases for buildings and equipment. Certain leases provide for
increased rentals based upon increases in real estate taxes or operating costs.
Future minimum rental payments under noncancelable operating leases are:


                                      F-16

<PAGE>
 
Fiscal Year                               (In thousands)
--------------------------------------------------------
2002                                            $12,747
2003                                             11,193
2004                                             10,145
2005                                              8,678
2006                                              6,116
Thereafter                                       10,379
--------------------------------------------------------
     Total minimum payments                     $59,258
--------------------------------------------------------

     Total rental expense was $21.8 million, $23.8 million and $24.5 million in
2001, 2000 and 1999, respectively.

     During fiscal 2001 and 2000, the Company entered into agreements for the
sale and leaseback of certain production equipment. The sale price of the
equipment was $16.0 million and $13.4 million, respectively. The Company has a
purchase option at projected future fair market value under the agreements. The
leases are classified as operating leases in accordance with SFAS No. 13,
Accounting for Leases.

     A gain of $9.7 million has been deferred and is being recognized over the
lease term. The unamortized portion of the deferred gain of $8.7 million is
included in the balance sheet captions accrued expenses and other long-term
liabilities. The average annual lease payment over the life of the lease is $4.5
million.

     14 Commitments and Contingent Liabilities

     At March 3, 2001, the Company had ongoing letters of credit related to its
risk management programs, construction contracts and certain industrial
development bonds. The total value of letters of credit under which the Company
is obligated as of March 3, 2001 was approximately $16.4 million.

     The Company has entered into a number of noncompete agreements, largely
associated with acquisitons. As of March 3, 2001, future payment of $4.0 million
were committed under such agreements.

     The Company has been a party to various legal proceedings incidental to its
normal operating activities. In particular, like others in the construction
industry, the Company's construction businesses are routinely involved in
various disputes and claims arising out of construction projects, sometimes
involving significant monetary damages. Although it is impossible to predict the
outcome of such proceedings, facts currently available indicate that no such
claims will result in losses that would have a material adverse effect on the
financial condition, results of operations, or cash flows of the Company.

     15 Earnings Per Share

     The following table presents a reconciliation of the share amounts used in
the computation of basic and diluted earnings per share:

(In thousands)                           2001       2000       1999
---------------------------------------------------------------------
Basic earnings per share -
     Weighted common shares
     Outstanding                        27,835     27,746     27,586
Weighted common shares assumed
     Upon exercise of stock options         63         48        176
---------------------------------------------------------------------
Diluted earnings per share -
     Weighted common shares and
     Potential common shares
     Outstanding                        27,898     27,794     27,762
---------------------------------------------------------------------


                                      F-17

<PAGE>
 
     16 Quarterly Data (Unaudited)

<TABLE>
<CAPTION>
                                                                 Quarter
                                               ----------------------------------------------
(In thousands, except per share data)           First       Second       Third       Fourth
----------------------------------------------------------------------------------------------
<S>                                             <C>         <C>          <C>         <C>
Fiscal 2001
Net sales                                       $237,253    $236,364      $197,291   $194,292
Gross profit                                      47,914      47,056        41,322     42,705
Earnings from continuing operations                2,020       4,200         2,962      4,179
Earnings  from discontinued operations                ---        ---           ---      1,641
Net earnings                                       2,020       4,200         2,962      5,820
Earnings  per share - basic
     From continuing operations                     0.07        0.15          0.11       0.15
     From discontinued operations                   0.00        0.00          0.00       0.06
     Net earnings                                   0.07        0.15          0.11       0.21
Earnings  per share - diluted
     From continuing operations                     0.07        0.15          0.11       0.15
     From discontinued operations                   0.00        0.00          0.00       0.06
     Net earnings                                   0.07        0.15          0.11       0.21
----------------------------------------------------------------------------------------------
Fiscal 2000
Net sales                                       $209,663    $216,962      $201,127   $212,736
Gross profit                                      47,063      45,493        30,609     44,071
Earnings (loss) from continuing operations         4,787       5,309        (4,982)    (2,043)
Earnings (loss) from discontinued operations        (217)      8,732         2,004     (1,415)
Net earnings (loss)                                4,570      14,041        (2,978)    (3,458)
Earnings (loss) per share - basic
     From continuing operations                     0.17        0.19         (0.18)     (0.07)
     From discontinued operations                  (0.01)       0.31          0.07      (0.05)
     Net earnings (loss)                            0.17        0.51         (0.11)     (0.12)
Earnings (loss) per share - diluted
     From continuing operations                     0.17        0.19         (0.18)     (0.07)
     From discontinued operations                  (0.01)       0.31          0.07      (0.05)
     Net earnings (loss)                            0.16        0.50         (0.11)     (0.12)
----------------------------------------------------------------------------------------------
</TABLE>


     17 Business Segments Data

     During fiscal 2001, the Company realigned its reporting segments to match
the markets they serve in order to underscore the Company's growth potential and
to reflect its changing business mix and focus. The segments are Architectural
Products and Services (Architectural), Large-scale Optical Technologies (LSO)
and Automotive Replacement Glass and Services (Auto Glass). The Architectural
segment designs, engineers, fabricates and installs the walls of glass and
windows comprising the outside skin of commercial and institutional buildings.
The LSO segment develops and produces high technology glass that enhances the
visual performance of products for the display, imaging and picture framing
industries. The Auto Glass segment fabricates, repairs and replaces automobile
windshields and windows. Prior periods have been restated to reflect these new
segments.

(In thousands)                            2001       2000       1999
------------------------------------------------------------------------
Net Sales
Architectural                          $ 441,466  $ 394,104  $ 349,968
Large-scale optical                       90,768     69,934     58,669
Auto glass                               333,311    377,499    380,524
Intersegment elimination                    (345)    (1,049)    (1,099)
------------------------------------------------------------------------
     Total                             $ 865,200  $ 840,488  $ 788,062
------------------------------------------------------------------------

Operating Income
Architectural                          $  27,393  $  20,513  $  23,501
Large-scale optical                        4,571       (540)     2,477
Auto glass                                 1,429        184     18,399


                                      F-18

<PAGE>
 
Corporate and other                       (1,499)      (739)    (1,025)
------------------------------------------------------------------------
        Total                          $  31,894  $  19,418  $  43,352
------------------------------------------------------------------------

Identifiable Assets
Architectural                          $ 225,668  $ 226,929  $ 201,356
Large-scale optical                       68,489     77,538     64,858
Auto glass                                96,595    123,040    134,564
Corporate and other                       41,927     53,647     65,611
------------------------------------------------------------------------
       Total                           $ 432,679  $ 481,154  $ 466,389
------------------------------------------------------------------------

Capital Expenditures
Architectural                          $   6,257  $  23,382  $  54,384
Large-scale optical                        2,677     17,254     16,057
Auto glass                                 5,922      3,918      5,359
Corporate and other                          (33)      (529)     1,592
------------------------------------------------------------------------
       Total                           $  14,823  $  44,025  $  77,392
------------------------------------------------------------------------

Depreciation and Amortization
Architectural                          $  16,111  $  15,693  $  10,081
Large-scale optical                        5,916      5,354      4,260
Auto glass                                11,873     10,615     10,734
Corporate and other                          329      1,357        723
------------------------------------------------------------------------
       Total                           $  34,229  $  33,019  $  25,798
------------------------------------------------------------------------

     Apogee's export net sales are less than 10% of consolidated net sales. No
single customer, including government agencies, accounts for 10% or more of
consolidated net sales. Segment operating income is net sales less cost of sales
and operating expenses. Operating income does not include provision for interest
expense or income taxes. "Corporate and other" includes miscellaneous corporate
activity not allocable to business segments.


                                      F-19

<PAGE>
 
 
                                                                    SCHEDULE II
                                                                     -----------

                    APOGEE ENTERPRISES, INC. AND SUBSIDIARIES

                       Valuation and Quantifying Accounts
                                 (In thousands)


<TABLE>
<CAPTION>
                                     Balance at         Charged to         Deductions       Balance at
                                    beginning of        costs and        from reserves        end of
                                       period            expenses             (1)              period
                                    --------------    ---------------    ---------------   --------------
<S>                                 <C>               <C>                <C>               <C>
For the year ended March 3, 2001:
  Allowance for
  doubtful receivables                 $10,540            $1,638             $3,236           $ 8,942
                                    ==============    ===============    ===============   ==============
  Inventory reserves                   $ 5,178            $5,857             $8,942           $ 2,093
                                    ==============    ===============    ===============   ==============

For the year ended February 26, 2000:
  Allowance for
  doubtful receivables                 $7,161             $7,656             $4,277           $10,540
                                    ==============    ===============    ===============   ==============
  Inventory reserves                   $5,112             $ 336              $  270           $ 5,178
                                    ==============    ===============    ===============   ==============

For the year ended February 27, 1999:
  Allowance for
  doubtful receivables                 $5,372             $1,408             $(381)           $7,161
                                    ==============    ===============    ===============   ==============
  Inventory reserves                   $4,281             $1,031              $200            $5,112
                                    ==============    ===============    ===============   ==============
</TABLE>


(1)  Net of recoveries


                                      F-20

<PAGE>
 
                                  EXHIBIT INDEX

Exhibit (3A)   Restated Articles of Incorporation. Incorporated by reference to
               Exhibit 3A to Registrant's Annual Report on Form 10-K for year
               ended February 27, 1988.

Exhibit (3B)   Restated By Laws of Apogee Enterprises, Inc. Incorporated by
               reference to Exhibit 3B to Registrant's Quarterly Report on Form
               10-Q for the quarter ended May 30, 1998.

Exhibit (4A)   Specimen certificate for shares of common stock of Apogee
               Enterprises, Inc. Incorporated by reference to Exhibit 4A to
               Registrant's Annual Report on Form 10-K for year ended February
               29, 1992.

Exhibit (4B)   Rights Agreement between Registrant and American Stock Transfer
               Co. dated October 19, 1990. Incorporated by reference to
               Registrant's Form 8-A on October 19, 1990.

Exhibit (4C)   Amendment No. 1 to Rights Agreement, dated June 28, 1995, to the
               Rights Agreement between Registrant and American Stock Transfer
               Co. dated October 19, 1990. Incorporated by reference to
               Registrant's Form 8-A/A on June 28, 1995.

Exhibit (4D)   Amendment No. 2 to Rights Agreement, dated February 22, 1999, to
               the Rights Agreement between Registrant and American Stock
               Transfer Co. dated October 19, 1990. Incorporated by reference to
               Registrant's Form 8-A/A on February 22, 1999.

Exhibit (4E)   Amendment No. 3 to Rights Agreement, dated December 7, 1999, to
               the Rights Agreement between Registrant and American Stock
               Transfer Co. dated October 19, 1990. Incorporated by reference to
               Registrant's Form 8-A/A on December 7, 1999.

Exhibit (10A)  Deferred Incentive Compensation Plan dated February 27, 1986
               between Registrant and certain executive officers. Incorporated
               by reference to Exhibit 10N to Registrant's Annual Report on Form
               10-K for year ended March 1, 1986.

Exhibit (10B)* Amended and Restated 1987 Apogee Enterprises, Inc. Partnership
               Plan. Incorporated by reference to Registrant's S-8 registration
               statement dated March 30, 1993.

Exhibit (10C)* Employment Agreement between Registrant and Richard Gould dated
               May 23, 1994. Incorporated by reference to Exhibit 10I to
               Registrant's Annual Report on Form 10-K for year ended February
               25, 1995.

Exhibit (10D)* Amendment to Apogee Enterprises, Inc. Employment Agreement with
               Richard Gould dated July 7, 1998. Incorporated by reference to
               Exhibit 10.4 to Registrant's Quarterly Report on Form 10-Q for
               the quarter ended November 28, 1998.

Exhibit (10E)* 1987 Apogee Enterprises, Inc. Stock Option Plan. Incorporated by
               reference to Registrant's S-8 registration statement dated July
               18, 1990.

Exhibit (10F)  Multi-Currency Credit Agreement dated as of May 21, 1998 between
               Apogee Enterprises, Inc. and banks party to the agreement,
               including related security, pledge, contribution and subsidiary
               guaranty agreements. Incorporated by reference to Exhibit 10G to
               Registrant's Annual Report on Form 10-K for year ended February
               28, 1998.

Exhibit (10G)  Amendment No. 1 to Credit Agreement, dated July 22, 1998.

Exhibit (10H)  Conditional Waiver and Amendment No. 2 to Credit Agreement and
               Amendment to Certain Credit Documents, dated November 10, 1998.

Exhibit (10I)  Waiver and Amendment No. 3 to Credit Agreement, dated September
               14, 1999. Incorporated by reference to Exhibit 10 to Registrant's
               Quarterly Report on Form 10-Q for the quarter ended November 27,
               1999.

<PAGE>
 
Exhibit (10J)  Conditional Waiver and Amendment No. 4 to Credit Agreement, dated
               April 12, 2000. Incorporated by reference to Exhibit 10 to
               Registrant's Quarterly Report on Form 10-Q for the quarter ended
               June 3, 2000.

Exhibit (10K)* 1997 Omnibus Stock Incentive Plan. Incorporated by reference to
               Exhibit A of Registrant's proxy statement for the 1997 Annual
               Meeting of Shareholders, filed May 16, 1997.

Exhibit (10L)* Resignation Agreement between Apogee Enterprises, Inc. and James
               L. Martineau. Incorporated by reference to Exhibit 10.1 to
               Registrant's Quarterly Report on Form 10-Q for the quarter ended
               November 28, 1998.

Exhibit (10M)* Apogee Enterprises, Inc. Officers' Supplemental Executive
               Retirement Plan. Incorporated by reference to Exhibit 10.2 to
               Registrant's Quarterly Report on Form 10-Q for the quarter ended
               November 28, 1998.

Exhibit (10N)* First Amendment of Apogee Enterprises, Inc. Officers'
               Supplemental Executive Retirement Plan, dated May 11, 1999.
               Incorporated by reference to Exhibit 10J to Registrant's Annual
               Report on Form 10-K for the year ended February 27, 1999.

Exhibit (10O)* Apogee Enterprises, Inc. Executive Supplemental Plan.
               Incorporated by reference to Exhibit 10.3 to Registrant's
               Quarterly Report on Form 10-Q for the quarter ended November 28,
               1998.

Exhibit (10P)* Forms of Severance Agreement between the Company and certain
               senior executive officers of the Company.

Exhibit (10Q)  Stock Purchase Agreement dated November 10, 1998 between Apogee
               Enterprises, Inc. and CompuDyne Corporation. Incorporated by
               reference to Registrant's Current Report on Form 8-K filed
               November 10, 1998.

Exhibit (10R)  Stock Purchase Agreement between the Company and CH Holdings,
               Inc. Incorporated by reference to Registrant's Current Report on
               Form 8-K filed on April 23, 1999.

Exhibit (10S)* Deferred Compensation Plan for Non-Employee Directors.
               Incorporated by reference to Exhibit A of the Registrant's proxy
               statement for the 1999 Annual Meeting of Shareholders, filed May
               17, 1999.

Exhibit (10T)  Contribution and Assumption Agreement dated June 13, 2000, among
               PPG Industries, the Company, certain subsidiaries of the Company
               and PPG Auto Glass. Incorporated by reference to Registrant's
               Current Report on Form 8-K filed on August 1, 2000.

Exhibit (10U)  Limited Liability Company Agreement dated June 13, 2000, between
               PPG Industries and the Company. Incorporated by reference to
               Registrant's Current Report on Form 8-K filed on August 1, 2000.

Exhibit (21)   Subsidiaries of the Registrant

Exhibit (23A)  Consent of Arthur Andersen LLP

Exhibit (23B)  Consent of KPMG LLP

Exhibit (99)   Private Securities Litigation Reform Act of 1995 - Cautionary
               Statement

*    Management contract or compensatory plan or arrangement required to be
     filed as an exhibit to this Form 10-K.





<PAGE>
 
                                                                     Exhibit 10G

                       AMENDMENT NO. 1 TO CREDIT AGREEMENT

     AMENDMENT NO. 1, dated as of July 22, 1998 (this "Amendment"), to the
CREDIT AGREEMENT, dated as of May 21, 1998 (the "Credit Agreement"), among
Apogee Enterprises, Inc., a Minnesota corporation (the "Borrower"), each of the
lenders from time to time parties thereto (collectively, the "Lenders"), and The
Bank of New York, as L/C Issuer, Administrative Agent for the Lenders and Swing
Line Lender.

     THE PARTIES hereby agree as follows:

     Section 1. Amendments.

     Pursuant to Section 11.05 of the Credit Agreement, the parties hereby agree
to amend the Credit Agreement as follows:

          (a) The definition of "Applicable Margin" in Section 1.01(c) of the
     Credit Agreement shall be amended to read in its entirety as follows:

          "`Applicable Margin' means, at any date and with respect to each Loan,
     the applicable margin set forth below based upon the Debt/EBITDA Ratio as
     of such date (it being understood that measurement of the Debt/EBITDA as of
     any Measurement Date is sufficient for this purpose):

                                                      Applicable Margin
                                                 ----------------------------
         Debt/EBITDA Ratio                       ABR Loans   Eurodollar Loans
         -----------------                       ---------   ----------------
         4.00 or greater                            0.250%          1.500%
         3.50 or greater, but less than 4.00        0.000           1.250
         3.00 or greater, but less than 3.50        0.000           1.125
         2.50 or greater, but less than 3.00        0.000           0.750
         2.00 or greater,
 but less than 2.50        0.000           0.625
         Less than 2.00                             0.000           0.500

     Notwithstanding the foregoing:

               (i) Prior to the date of final determination of EBITDA for the
          fiscal quarter of the Borrower to end on November 28, 1998, the
          Applicable Margin for Eurodollar Loans shall not be less than 1.125%;
          and

<PAGE>
 
               (ii) If the Subordinated Debt Transaction shall not have been
          completed on or prior to December 31, 1998, then the Applicable Margin
          shall be 0.250% per annum above the rate otherwise determined until
          the Security Release Date."

          (b) Section 3.07(a) of the Credit Agreement shall be amended to read
     in its entirety as follows:

               "(a) The Commitment Fee. The Borrower agrees to pay to the
          Administrative Agent, for the respective accounts of the Lenders, on
          the last day of each calendar quarter of each year, commencing with
          the first such day after the Effective Date, and on the Commitment
          Termination Date, a fee (the "Commitment Fee") computed by applying
          (i) the applicable percentage per annum set forth below based on the
          Debt/EBITDA Ratio on each day during the then-ending quarter (or
          shorter period ending with the Commitment Termination Date) (it being
          understood that measurement of the Debt/EBITDA as of any Measurement
          Date is sufficient for this purpose) to (ii) the Available Commitment
          on such day:

                                                       Commitment Fee Percentage
              Debt/EBITDA Ratio                                Per Annum
              -----------------                        -------------------------
              4.00 or greater                                  0.350%
              3.50 or greater, but less than 4.00              0.300
              3.00 or greater, but less than 3.50              0.250
              2.50 or greater, but less than 3.00              0.225
              2.00 or greater, but less than 2.50              0.175
              Less than 2.00                                   0.125


          Prior to the date of final determination of EBITDA for the fiscal
          quarter of the Borrower to end on November 28, 1998, the Commitment
          Fee percentage per annum shall not be less than 0.250%."

          (c) Section 10.03(a) of the Credit Agreement shall be amended to read
     in its entirety as follows:

               "Section 10.03 Assignments. (a) Any Lender may at any time assign
          to one or more financial institutions (each an "Assignee") all, or a
          proportionate part of all, of its rights and obligations under this
          Agreement, and such Assignee shall assume such rights and obligations,
          pursuant to an instrument, in substantially the form of Exhibit F (an
          "Assignment and Acceptance"), executed by such Assignee and such
          transferor Lender, with (and subject to) the signed consent of the
          Borrower (which consent shall not be unreasonably withheld, provided
          that it shall not be unreasonable to withhold consent if such
          assignment would result in there being more than fifteen (15) Lenders
          (such number 


                                      -2-

<PAGE>
 
          to be increased to twenty (20) Lenders should the Subordinated Debt
          Transaction not be consummated within 135 days of the Effective Date))
          and the Administrative Agent (which consent shall not be unreasonably
          withheld); provided that (i) the foregoing consent requirement shall
          not be applicable in the case of an assignment or other transfer by
          any Lender to an Eligible Affiliate of such Lender, to another Lender
          or to a Federal Reserve Bank, (ii) the aforementioned consent of the
          Borrower shall not be required if there shall have occurred an Event
          of Default that is continuing and (iii) a Lender may only make an
          assignment or other transfer of its Loans or Commitment in the minimum
          amount of $5,000,000 or integral multiples of $1,000,000 in excess
          thereof unless such Lender's Loans or Commitment is less than
          $5,000,000, in which case such Lender may only make an assignment or
          other transfer of all of its Loans or Commitment. Upon execution and
          delivery of an Assignment and Acceptance and payment by such Assignee
          to such transferring Lender of an amount equal to the purchase price
          agreed between such transferring Lender and such Assignee and payment
          by the transferring Lender or the Assignee of an assignment fee of
          $3,500 to the Administrative Agent, such Assignee shall be a Lender
          party to this Agreement and shall have all the rights and obligations
          of a Lender with a Commitment as set forth in such Assignment and
          Acceptance, and the transferring Lender shall be released from its
          obligations hereunder to a corresponding extent, and no further
          consent or action by any party shall be required."

     Section 2. Miscellaneous.

          (a) All capitalized terms not otherwise defined in this Amendment
     shall have the meanings ascribed to them in the Credit Agreement.

          (b) All provisions in Article XI of the Credit Agreement shall apply
     to this Amendment with equal force and effect as if restated completely
     herein.

          (c) Except as set forth in Section 1 hereof, the Credit Agreement
     shall remain in full force and effect without amendment, modification or
     waiver. Execution and delivery hereof by a Lender shall not preclude the
     exercise by such Lender of any rights under the Credit Agreement (as
     amended by Section 1 hereof).

          (d) This Amendment shall be governed by and construed in accordance
     with the laws of the State of New York applicable to contracts made and to
     be performed entirely within such state.

          (e) This Amendment shall be effective on the first date as of which a
     counterpart hereof has been executed and delivered to the Administrative
     Agent under the Credit Agreement by the Borrower and the Required Lenders
     under the Credit Agreement.

                     [THE NEXT PAGE IS THE SIGNATURE PAGE.]


                                      -3-


<PAGE>
 
     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.


                                       APOGEE ENTERPRISES, INC.


                                       By: /s/Gary R. Johnson
                                           -------------------------------------
                                           Name: Gary R. Johnson
                                           Title:  Assistant Secretary and 
                                                   Assistant Treasurer


                                       THE BANK OF NEW YORK, as
                                       Administrative Agent, L/C Issuer
                                       and Swing Line Lender in the
                                       Credit Agreement


                                       By: /s/ Richard A. Raffetto
                                           -------------------------------------
                                          Name:  Richard A. Raffetto
                                          Title: Vice President


                                       THE BANK OF NEW YORK, as
                                       a Lender in the Credit Agreement


                                       By: /s/ Richard A. Raffetto
                                           -------------------------------------
                                           Name:  Richard A. Raffetto
                                           Title: Vice President


                                       U.S. BANK NATIONAL ASSOCIATION, as
                                       a Syndication Agent and as a Lender in 
                                       the Credit Agreement


                                       By: /s/ Matthew A. Ross
                                           -------------------------------------
                                       Name: Matthew A. Ross
                                       Title: Vice President


                                       HARRIS TRUST AND SAVINGS BANK, as
                                       a Documentation Agent and as a Lender in 
                                       the Credit Agreement


                                       By: /s/ Catherine C. Ciolek
                                           -------------------------------------
                                       Name:  Catherine C. Ciolek
                                       Title: Vice President


                                      -4-



<PAGE>
 
                                                                     Exhibit 10H


           CONDITIONAL WAIVER AND AMENDMENT NO. 2 TO CREDIT AGREEMENT
                                       AND
                      AMENDMENT TO CERTAIN CREDIT DOCUMENTS


     CONDITIONAL WAIVER AND AMENDMENT NO. 2, dated November 10, 1998 (this
"Waiver and Amendment") to the CREDIT AGREEMENT, dated May 21, 1998 (the "Credit
Agreement"), among Apogee Enterprises, Inc., a Minnesota corporation (the
"Borrower"), each of the lenders from time to time parties thereto (collectively
the "Lenders", including the Lenders parties to the original Credit Agreement
and Lenders parties to the Credit Agreement by virtue of the Master Assignment
and Acceptance, dated August 12, 1998 and effective August 14, 1998), and The
Bank of New York, as L/C Issuer, Administrative Agent for the Lenders and Swing
Line Lender, as such Credit Agreement was amended by AMENDMENT NO. 1, dated July
22, 1998 ("Amendment No. 1"). This Waiver and Amendment also amends certain
other Credit Documents, dated May 21, 1998, indicated herein.

                                    RECITALS
                                    --------

     A. The Borrower desires to sell the stock of certain of its Subsidiaries
pursuant to an agreement with a certain third party.

     B. The Credit Agreement, the Credit Documents and certain related
agreements place certain restrictions on the Borrower's ability to sell such
stock.

     C. The Lenders
 desire to waive certain of these restrictions subject to
certain conditions and amendments to the Credit Agreement.

     D. The Borrower desires to agree to such conditions.

     E. Consummation of the sale of such assets will require amendments to
certain other Credit Documents related to the Credit Agreement.

     F. In addition, the parties desire to make an additional amendment to the
Credit Agreement related to assignment of commitments under the Credit
Agreement.

     NOW, THEREFORE, the parties hereto hereby agree as follows:

     Section 1. Amendment to Provisions Relating to Assignments

     Clause (iii) of the proviso at the end of the first sentence of Section
10.03(a) of the Credit Agreement, as amended by Amendment No. 1, shall be
amended to read in its entirety as follows:

          "(iii) a Lender may only make an assignment or other transfer of its
     Loans or Commitment in the minimum amount of $5,000,000 or integral
     multiples of $500,000 in excess thereof unless such Lender's Loans or
     Commitment is less than $5,000,000, in which case such Lender may only make
     an assignment or other transfer of all of its Loans or Commitment."


                                      -1-

<PAGE>
 
     Section 2. Amendment to Commitment Reduction Provisions

     Section 2.03(b) of the Credit Agreement shall be amended to read in its
entirety as follows:

          "(b) Upon completion of the Subordinated Debt Transaction, the Total
     Commitment shall be reduced by an amount equal to the lesser of (i) the net
     proceeds thereof or (ii) the amount required to reduce the Total Commitment
     to $175,000,000."

     Section 3. Waivers

          (a) The Borrower represents that it has supplied to the Administrative
     Agent true and complete copies of the following documents related to the
     proposed sale by the Borrower of all of the issued and outstanding stock of
     certain wholly owned subsidiaries of the Borrower:

               (i) Letter of Intent, dated August 18, 1998, between Compudyne
          Corporation ("Compudyne"), the Borrower, Norment Industries, Inc.
          ("Norment") and Norshield Corporation ("Norshield"); and

               (ii) Draft of Stock Purchase Agreement, such draft dated November
          5, 1998 (the "Draft Stock Purchase Agreement"), by and between the
          Borrower, as "Seller", and Compudyne Corporation, a Nevada
          corporation, as "Purchaser" ("Compudyne"), pursuant to which the
          Borrower intends to sell to Compudyne all of the issued and
          outstanding stock of Norment and Norshield for a purchase price of
          $22,500,000 (subject to certain adjustments described therein).

          The parties hereto understand that this Waiver and Amendment is being
     executed and delivered prior to the execution of the Stock Purchase
     Agreement. This Waiver and Amendment shall become effective as of the date
     of execution of the definitive Stock Purchase Agreement; provided, that
     promptly upon execution thereof the Borrower shall have provided a copy of
     the executed Stock Purchase Agreement to the Administrative Agent and
     either (A) no material changes, additions, deletions or other modifications
     shall have been made to the Draft Stock Purchase Agreement, as reflected in
     the Stock Purchase Agreement, or (B) any material changes, additions,
     deletions or other modifications reflected in the Stock Purchase Agreement
     are acceptable to the Administrative Agent. The parties hereby agree that
     the term "Stock Purchase Agreement" as used in this Waiver and Amendment
     shall mean such definitive agreement, as approved by the Administrative
     Agent and as executed by the Borrower and Compudyne (including all
     exhibits, attachments, or schedules thereto).

          The agreements listed in (i) and (ii) above, and the transactions
     described therein, shall sometimes be referred to herein as the "Subsidiary
     Sale" or the "Norment Subsidiary Sale". The wholly owned subsidiaries of
     the Borrower that are the subject of the Stock Purchase Agreement (Norment
     and Norshield) shall sometimes be referred to herein as the "Stock Sale
     Subsidiaries". The total purchase price (as it may be adjusted in
     accordance with the Stock Purchase Agreement, and including all escrow and
     other payments as consideration for the sale of the stock of the Stock Sale
     Subsidiaries) for the Subsidiary Sale, whether received in parts or in
     whole and whenever received, shall sometimes be referred to herein as the
     "Purchase Price" or the "Norment Purchase Price". The "Excluded Assets"
     referred to in the Stock Purchase Agreement shall be referred to herein as
     the "Excluded Assets".


                                      -2-

<PAGE>
 
          (b) The parties agree that the Subsidiary Sale represents a
     "substantial part" of the assets or property of the Borrower and of the
     Stock Sale Subsidiaries within the meaning of Section 7.02(a) of the Credit
     Agreement.

          (c) Pursuant to Section 11.05(a) of the Credit Agreement, the Lenders
     hereby waive the application to the Subsidiary Sale of (i) the restrictions
     contained in Section 7.02(a) of the Credit Agreement on sales of a
     substantial part of the assets or property of the Borrower or its
     Subsidiaries and (ii) the restrictions contained in Section 7.02(g) of the
     Credit Agreement on disposal of stock of Subsidiaries, in each case subject
     to the conditions and amendments contained in this Waiver and Amendment.
     Anything herein or elsewhere to the contrary notwithstanding, such waivers
     are granted only insofar as necessary to permit the Subsidiary Sale.

     Section 4. Conditions to Waivers

          (a) In consideration of the grant of the waivers described in Section
     3(c) to this Waiver and Amendment, the parties agree to the following
     amendments to the Credit Agreement:

               (i) Amendments to Defined Terms of Credit Agreement.

                    (1) Section 1.01(c) of the Credit Agreement is amended to
               add the following terms:

                         "`Norment Purchase Price' shall mean the total purchase
                    price (as it may be adjusted in accordance with the Stock
                    Purchase Agreement by and between the Borrower and Compudyne
                    Corporation relating to the Norment Subsidiary Sale in the
                    form contemplated by that certain Conditional Waiver and
                    Amendment No. 2 to Credit Agreement, dated November 10,
                    1998, related hereto, and including all escrow and other
                    payments as consideration for the sale of the stock of the
                    Subsidiaries the subject of such Stock Purchase Agreement,
                    Norment Industries, Inc. and Norshield Corporation), net of
                    any taxes incurred in connection with the receipt thereof,
                    for the Norment Subsidiary Sale, whether received in parts
                    or in whole and whenever received."

                         "`Norment Purchase Price Payment' shall have the
                    meaning ascribed to such term in Section 2.05(d)(i) hereof."

                         "`Norment Subsidiary Sale' shall mean the sale of all
                    of the issued and outstanding stock of Norment Industries,
                    Inc. and Norshield Corporation, two Subsidiaries of the
                    Borrower, pursuant to the Stock Purchase Agreement by and
                    between the Borrower and Compudyne Corporation relating to
                    such sale in the form contemplated by that certain
                    Conditional Waiver and Amendment No. 2 to the Credit
                    Agreement, dated November 10, 1998, related hereto."

                    (2) The parties agree that the term "Credit Documents" as
               used in the Credit Agreement and the other Credit Documents shall
               include this Waiver and Amendment.


                                       -3-

<PAGE>
 
               (ii) Amendments to Section 2.05, "Prepayment", of Credit
          Agreement.

               Section 2.05 of the Credit Agreement shall be amended to add the
          following subsections:

                    "(d) (i) If the Borrower or any of its Affiliates shall
               receive any payment of the Norment Purchase Price, in part or in
               whole (such payment, whether in part or in whole, a "Norment
               Purchase Price Payment"), at a time when the Total Commitment is
               greater than $175,000,000, then, immediately following receipt of
               such Norment Purchase Price Payment, (x) the Borrower shall
               prepay Loans and L/C Obligations in an amount equal to such
               Norment Purchase Price Payment and (y) the Total Commitment shall
               be reduced by an amount equal to such Norment Purchase Price
               Payment (but not to less than $175,000,000).

                    "(ii) If any Norment Purchase Price Payment shall occur at a
               time when the Total Commitment is equal to or less than
               $175,000,000, then, immediately following receipt of such Norment
               Purchase Price Payment, the Borrower shall prepay Loans and L/C
               Obligations in an amount equal to such Norment Purchase Price
               Payment, but no reduction of the Total Commitment shall be
               required as a consequence thereof."

          (b) Any payment of the then outstanding amount of Loans or L/C
     Obligations pursuant to Section 4(a) above shall be applied to such Loans
     or L/C Obligations in accordance with the procedures of the Credit
     Agreement. All reductions of the Total Commitment shall be permanent.

          (c) To the extent that the conditions in Section 4(a) above are in
     conflict with any provisions of the Credit Agreement (including, but not
     limited to, the definition of "Commitment" in the Credit Agreement), the
     parties hereto agree that the provisions of Section 4(a) hereof shall, in
     accordance with Section 11.05 of the Credit Agreement, supersede such
     provisions of the Credit Agreement, but only to the extent necessary to
     effect the purpose of the waivers contained herein.

     Section 5. Actions Necessary to Effect Waivers and Subsidiary Sale

     Concurrently with the consummation of the Subsidiary Sale, and conditional
thereupon, the following actions (a) through (e) shall be taken:

          (a) Pledge Agreement.

               (i) The Agent under the Pledge Agreement, dated May 21, 1998 and
          executed in connection with the Credit Agreement (the "Pledge
          Agreement"), shall return the Pledged Securities pertaining to the
          issued and outstanding stock of the Stock Sale Subsidiaries to the
          applicable Pledgor in the Pledge Agreement. Such Pledged Securities
          shall be returned as received (duly endorsed by the appropriate
          Pledgor in blank for transfer or accompanied by appropriate
          assignment(s) by the appropriate Pledgor or appropriate undated stock
          power(s) executed by 


                                      -4-

<PAGE>
 
          the appropriate Pledgor or other document sufficient to transfer title
          thereto).

               (ii) The Pledged Securities returned pursuant to Section 5(a)(i)
          of this Waiver and Amendment, shall no longer be "Pledged Securities"
          or "Collateral" as defined in the Pledge Agreement, shall no longer be
          considered to appear on Schedule A to the Pledge Agreement and shall
          no longer be subject to any restrictions of the Pledge Agreement.

               (iii) The Agent under the Pledge Agreement agrees to execute and
          deliver all such agreements, assignments, instruments and documents,
          including, but not limited to, any release documents under the Uniform
          Commercial Code (the "UCC"), and to do all such other things as the
          appropriate Pledgor deems reasonably necessary or appropriate to give
          effect to the actions or amendments described in Sections 5(a)(i) and
          5(a)(ii) above and to remove the Agent's lien and security interest
          from the Pledged Securities of the Stock Sale Subsidiaries.

               (iv) The Borrower (and Pledgor of the stock of the Stock Sale
          Subsidiaries) hereby reconfirms the covenants, agreements,
          representations and warranties made by it in the Pledge Agreement. In
          particular, should any of the Excluded Assets received by the Borrower
          from the Stock Sale Subsidiaries be placed into a new domestic
          Subsidiary, the Borrower agrees that the stock of such new domestic
          Subsidiary shall be considered "Additional Securities" pursuant to
          Section 2(b) of the Pledge Agreement and the Borrower hereby
          covenants, in accordance with Section 4(c) of the Pledge Agreement,
          promptly to furnish to the Agent a duly completed and executed
          amendment to Schedule A to the Pledge Agreement in the form provided
          in Schedule B to the Pledge Agreement and promptly to deliver the
          stock certificate of such new domestic Subsidiary as "Pledged
          Securities" and "Collateral" in accordance with the Pledge Agreement.

               (v) No party to this Waiver and Amendment intends this Waiver and
          Amendment to impair or otherwise affect in any way the lien and
          security interest granted pursuant to the Pledge Agreement on any of
          the Collateral described therein other than the stock and related
          assets of the Stock Sale Subsidiaries. No reference to this Waiver and
          Amendment need be made in any note, instrument or other document at
          any time referring to the Pledge Agreement -- any reference in any of
          such to the Pledge Agreement to be deemed to reference the Pledge
          Agreement as modified hereby. Except as specifically modified hereby,
          all the terms and conditions of the Pledge Agreement shall stand and
          remain unchanged and in full force and effect.

          (b) Security Agreement.

               (i) The parties to the Security Agreement, dated May 21, 1998 and
          executed in connection with the Credit Agreement (the "Security
          Agreement"), 


                                      -5-

<PAGE>
 
          hereby agree that the Stock Sale Subsidiaries shall no longer be
          "Debtors", as defined in the Security Agreement, and the assets of
          such Stock Sale Subsidiaries (other than the Excluded Assets) shall no
          longer be "Collateral", as defined in the Security Agreement.

               (ii) The Collateral Agent in the Security Agreement shall take
          all reasonable actions necessary to effect the release described in
          Section 5(b)(i) of this Waiver and Amendment, including, but not
          limited to, execution and delivery of any agreements, instruments or
          other documents, including, but not limited to, UCC termination
          statements or other releases pertaining to the Collateral released
          under Section 5(b)(i) hereof.

               (iii) To the extent that the Excluded Assets become assets of the
          Borrower or another Subsidiary, such Excluded Assets shall remain
          Collateral under the Security Agreement, pledged by the appropriate
          Debtor. To the extent that the Excluded Assets shall be placed by the
          Borrower into a new domestic Subsidiary, Borrower shall cause, in
          accordance with Section 13(f) of the Security Agreement, such new
          domestic Subsidiary to become a Debtor under the Security Agreement by
          executing and delivering an agreement in the form of Schedule C to the
          Security Agreement.

               (iv) No party to this Waiver and Amendment intends this Waiver
          and Amendment to impair or otherwise affect in any way the lien and
          security interest of granted pursuant to the Security Agreement on any
          of the Collateral described therein other than the assets of the Stock
          Sale Subsidiaries. No reference to this Waiver and Amendment need be
          made in any note, instrument or other document at any time referring
          to the Security Agreement -- any reference in any of such to the
          Security Agreement to be deemed to reference the Security Agreement as
          modified hereby. Except as specifically modified hereby, all the terms
          and conditions of the Security Agreement shall stand and remain
          unchanged and in full force and effect.

          (c) Subsidiary Guaranty.
 
               (i) The parties to the Subsidiary Guaranty Agreement, dated May
          21, 1998 and executed in connection with the Credit Agreement (the
          "Guaranty"), hereby agree that the Stock Sale Subsidiaries shall no
          longer be Guarantors under the Guaranty and shall no longer be subject
          to the obligations thereunder.

               (ii) To the extent that the Excluded Assets shall be placed by
          the Borrower into a new domestic Subsidiary, Borrower shall cause, in
          accordance with Section 10 of the Guaranty, such new domestic
          Subsidiary to become a Guarantor under the Guaranty by executing and
          delivering an agreement in the form of Exhibit A to the Guaranty.


                                      -6-

<PAGE>
 
               (iii) No party to this Waiver and Amendment intends this Waiver
          and Amendment to impair or otherwise affect in any way the Guaranty by
          the Guarantors described therein, other than the Guaranty by the Stock
          Sale Subsidiaries. No reference to this Waiver and Amendment need be
          made in any note, instrument or other document at any time referring
          to the Guaranty -- any reference in any of such to the Guaranty to be
          deemed to reference the Guaranty as modified hereby. Except as
          specifically modified hereby, all the terms and conditions of the
          Guaranty shall stand and remain unchanged and in full force and
          effect.

          (d) Contribution Agreement. The parties to the Contribution Agreement,
     dated May 21, 1998 and executed in connection with the Credit Agreement
     (the "Contribution Agreement"), hereby agree that the Stock Sale
     Subsidiaries shall no longer be deemed "Subsidiaries" or "Contributing
     Parties" under the Contribution Agreement.

          (e) Credit Agreement. The parties hereto agree that the Stock Sale
     Subsidiaries shall no longer be deemed "Subsidiaries" under the Credit
     Agreement or any of the Credit Documents.

     Section 6. Miscellaneous

          (a) All capitalized terms not otherwise defined in this Waiver and
     Amendment shall have the meanings ascribed to them in the Credit Agreement
     or the Credit Documents.

          (b) All provisions in Article XI of the Credit Agreement shall apply
     to this Waiver and Amendment with equal force and effect as if restated
     completely herein.

          (c) Except as set forth in this Waiver and Amendment and Amendment No.
     1, the Credit Agreement shall remain in full force and effect without
     amendment, modification or waiver. Execution and delivery hereof by a
     Lender shall not preclude the exercise by such Lender of any rights under
     any Credit Document (as amended or modified from time to time).

          (d) In accordance with Section 11.05(b) of the Credit Agreement,
     except to the extent expressly set forth herein, the waivers contained in
     this Waiver and Amendment shall be effective only in the specific instance
     of the Subsidiary Sale described herein and for the specific purpose for
     which such waivers are given.

          (e) This Waiver and Amendment shall be governed by and construed in
     accordance with the laws of the State of New York applicable to contracts
     made and to be performed entirely within such state.

          (f) This Waiver and Amendment shall be effective on the first date as
     of which a counterpart hereof has been executed and delivered by the
     Borrower and all of the Lenders under the Credit Agreement to the
     Administrative Agent under the Credit Agreement.


                                      -7-

<PAGE>
 
                  [THE NEXT PAGE IS THE FIRST SIGNATURE PAGE.]


                                      -8-

<PAGE>
 
     IN WITNESS WHEREOF, the parties hereto have caused this Waiver and
Amendment to be duly executed as of the date first above written.

                                       APOGEE ENTERPRISES, INC.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       THE BANK OF NEW YORK, as
                                       Administrative Agent, L/C
                                       Issuer and Swing Line
                                       Lender in the Credit
                                       Agreement


                                       By: /s/ Richard A. Raffetto
                                           -------------------------------------
                                           Name:  Richard A. Raffetto
                                           Title:  Vice President

                                       LENDERS (and other Agents)
                                       --------------------------

                                       THE BANK OF NEW YORK, as a Lender in the
                                       Credit Agreement


                                       By: /s/ Richard A. Raffetto
                                           -------------------------------------
                                           Name:  Richard A. Raffetto
                                           Title:  Vice President

                                       U.S. BANK NATIONAL ASSOCIATION, as 
                                       Syndication Agent and a Lender in the 
                                       Credit Agreement


                                       By: /s/ Matthew A. Ross
                                           -------------------------------------
                                           Name:  Matthew A. Ross
                                           Title:  Vice President

                                       HARRIS TRUST AND SAVINGS BANK, as 
                                       Documentation Agent and a Lender in the 
                                       Credit Agreement


                                       By: /s/ Catherine C. Ciolek
                                           -------------------------------------
                                           Name:  Catherine C. Ciolek
                                           Title:  Vice President


                                      -9-

<PAGE>
 
                                       THE BANK OF NOVA SCOTIA, as Co-Agent and 
                                       a Lender in the Credit Agreement

                                       By: /s/ M.D. Smith
                                           -------------------------------------
                                           Name:  M.D. Smith
                                           Title:  Agent Operations

                                       COMERICA BANK, as Co-Agent and a Lender 
                                       in the Credit Agreement

                                       By: /s/ Timothy O'Rourke
                                           -------------------------------------
                                           Name:  Timothy O'Rourke
                                           Title:  Vice President

                                       THE FUJI BANK, LIMITED, as a Lender in
                                       the Credit Agreement


                                       By: /s/ Peter L. Chinnici
                                           -------------------------------------
                                           Name:  Peter L. Chinnici
                                           Title:  Joint General Manager

                                       THE SUMITOMO BANK, LIMITED, as a Lender
                                       in the Credit Agreement

                                       By: /s/ John H. Kemper
                                           -------------------------------------
                                           Name:  John H. Kemper
                                           Title:  Senior Vice President

                                       NORWEST BANK MINNESOTA, NATIONAL
                                       ASSOCIATION, as a Lender in the Credit
                                       Agreement

                                       By: /s/ Molly S. Van Metre
                                           -------------------------------------
                                           Name:  Molly S. Van Metre
                                           Title:  Vice President

                                       REGIONS BANK, as a Lender in the Credit
                                       Agreement

                                       By: /s/ Jim Schmaltz
                                           -------------------------------------
                                           Name:  Jim Schmaltz
                                           Title:  Vice President


                                      -10-

<PAGE>
 
                        [PARTIES TO THE PLEDGE AGREEMENT]


                                       PLEDGOR:
                                       --------

                                       APOGEE ENTERPRISES, INC., as Pledgor of 
                                       the stock of Norment Industries, Inc. and
                                       Norshield Corporation


                                       By: /s/ Gary R. Johnson 
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer


                                       ACCEPTED BY:
                                       -----------

                                       THE BANK OF NEW YORK, as Agent for the
                                       Secured Creditors in the Pledge Agreement


                                       By: /s/ Richard A. Raffetto
                                           -------------------------------------
                                           Name:  Richard A. Raffetto
                                           Title:  Vice President


                                      -11-

<PAGE>
 
                       [PARTIES TO THE SECURITY AGREEMENT]


                                       DEBTORS:

                                       APOGEE ENTERPRISES, INC.


                                       By: /s/ Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary and 
                                                   Assistant Treasurer

                                       HARMON, INC.


                                       By: /s/ Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary and 
                                                   Assistant Treasurer

                                       VIRACON/CURVELITE, INC.


                                       By: /s/ Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary and 
                                                   Assistant Treasurer

                                       NORMENT INDUSTRIES, INC.


                                       By: /s/ Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary and 
                                                   Assistant Treasurer

                                       APOGEE WAUSAU GROUP, INC.


                                       By: /s/ Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary and 
                                                   Assistant Treasurer

                                       MILCO CONTRACTING, INC.


                                       By: /s/ Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary and 
                                                   Assistant Treasurer


                                      -12-

<PAGE>
 
                                       THE GLASS DEPOT, INC.


                                       By: /s/ Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary and 
                                                   Assistant Treasurer

                                       THE GLASS DEPOT OF NY, INC.


                                       By: /s/ Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary and 
                                                   Assistant Treasurer

                                       NORSHIELD CORPORATION


                                       By: /s/ Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary and 
                                                   Assistant Treasurer

                                       VIRACON, INC.


                                       By: /s/ Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary and 
                                                   Assistant Treasurer

                                       VIRATEC THIN FILMS, INC.


                                       By: /s/ Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary and 
                                                   Assistant Treasurer

                                       TRU VUE, INC.


                                       By: /s/ Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary and 
                                                   Assistant Treasurer

                                       HARMON GLASS COMPANY

                                       By: /s/ Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary and 
                                                   Assistant Treasurer

                                      -13-

<PAGE>
 
                                       AMERICAN MANAGEMENT GROUP


                                       By: /s/ Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary and 
                                                   Assistant Treasurer

                                       DOVER GLASS COMPANY


                                       By: /s/ Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary and 
                                                   Assistant Treasurer

                                       HARMON, LTD.


                                       By: /s/ Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary and 
                                                   Assistant Treasurer

                                       ACCEPTED BY:
                                       -----------

                                       THE BANK OF NEW YORK, as Agent for the
                                       Secured Creditors in the Security 
                                       Agreement


                                       By: /s/ Richard A. Raffetto
                                           -------------------------------------
                                           Name:  Richard A. Raffetto
                                           Title:  Vice President


                                      -14-

<PAGE>
 
                 [PARTIES TO THE SUBSIDIARY GUARANTY AGREEMENT]


                                       GUARANTORS:
                                       -----------

                                       HARMON, INC.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       VIRACON/CURVELITE, INC.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       NORMENT INDUSTRIES, INC.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       APOGEE WAUSAU GROUP, INC.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       MILCO CONTRACTING, INC.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       THE GLASS DEPOT, INC.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer


                                      -15-

<PAGE>
 
                                       THE GLASS DEPOT OF NY, INC.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       NORSHIELD CORPORATION


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       VIRACON, INC.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       VIRATEC THIN FILMS, INC.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       TRU VUE, INC.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       HARMON GLASS COMPANY


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       AMERICAN MANAGEMENT GROUP


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer


                                      -16-

<PAGE>
 
                                       DOVER GLASS COMPANY


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       HARMON, LTD.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       ACCEPTED BY:
                                       -----------

                                       THE BANK OF NEW YORK, as Agent for the
                                       Guaranteed Creditors in the Subsidiary 
                                       Guaranty Agreement


                                       By: /s/ Richard A. Raffetto
                                           -------------------------------------
                                           Name:  Richard A. Raffetto
                                           Title:  Vice President


                                      -17-

<PAGE>
 
                     [PARTIES TO THE CONTRIBUTION AGREEMENT]


                                       CONTRIBUTING PARTIES:
                                       --------------------

                                       APOGEE ENTERPRISES, INC.


                                       By: /s/ Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       HARMON, INC.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       VIRACON/CURVELITE, INC.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       NORMENT INDUSTRIES, INC.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary &
                                                   Assistant Treasurer

                                       APOGEE WAUSAU GROUP, INC.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       MILCO CONTRACTING, INC.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer


                                      -18-

<PAGE>
 
                                       THE GLASS DEPOT, INC.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       THE GLASS DEPOT OF NY, INC.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       NORSHIELD CORPORATION


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       VIRACON, INC.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       VIRATEC THIN FILMS, INC.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       TRU VUE, INC.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       HARMON GLASS COMPANY


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer


                                      -19-

<PAGE>
 
                                       AMERICAN MANAGEMENT GROUP


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary & 
                                                   Assistant Treasurer

                                       DOVER GLASS COMPANY


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary &
                                                   Assistant Treasurer

                                       HARMON, LTD.


                                       By: /s/  Gary R. Johnson
                                           -------------------------------------
                                           Name:  Gary R. Johnson
                                           Title:  Assistant Secretary &
                                                   Assistant Treasurer


                                      -20-



<PAGE>
 
                                                                     Exhibit 10P

                               SEVERANCE AGREEMENT


     THIS SEVERANCE AGREEMENT is made as of the ______ day of ___________,
__________, between Apogee Enterprises, Inc., a Minnesota corporation, with its
principal offices at Norwest Financial Center, 7900 Xerxes Avenue South, Suite
1800, Minneapolis, Minnesota 55431 (the "Company") and ____________
("Executive"), residing at _______________________________.


                          W I T N E S S E T H   T H A T:

     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, 2000;
provided that commencing on January 1, 2001 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(i) hereof)
shall have occurred during such term.

     2. Termination of Employment

          (i) 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(iii)
     hereof), at any time. Executive's rights upon 

<PAGE>
 
     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.

          (ii) After a Change in Control

               (a) 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(ii)
          or as a result of Executive's Disability (as defined in Section 3(iv)
          hereof) or his death.

               (b) 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.

               (c) From and after the date of a Change in Control during the
          term of this Agreement: (I) 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 (II) 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(ii) hereof), or upon Executive's voluntary
          termination of his employment with the Company or such other Apogee
          Entity for any reason during the 30-consecutive-day period commencing
          on the first anniversary of the date on which the Change in Control
          shall have occurred and ending on the 30th day immediately following
          the first anniversary on which the Change in Control occurs, 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

          (i) A "Change in Control" shall mean:

               (a) 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 


                                      -2-

<PAGE>
 
          provision thereto, whether or not the Company is then subject to such
          reporting requirement including, without limitation, any of the
          following events:

                    (I) the consummation of any consolidation or merger of the
               Company in which the Company is not the continuing or surviving
               corporation or pursuant to which shares of the Company's common
               stock would be converted into cash, securities, or other
               property, other than a merger of the Company in which the holders
               of the Company's common stock immediately prior to the
               consolidation or merger have the same proportionate ownership of
               common stock of the surviving corporation immediately after the
               merger; or

                    (II) 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;

               (b) 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;

               (c) the Continuing Directors (as defined in Section 3(v) hereof)
          cease to constitute a majority of the Company's Board of Directors; or

               (d) the majority of the Continuing Directors determine in their
          sole and absolute discretion that there has been a change in control
          of the Company.

          (ii) "Good Reason" shall mean the occurrence of any of the following
     events, 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:

               (a) the assignment to Executive of employment duties or
          responsibilities which are not of comparable responsibility and status
          as the employment duties and responsibilities held by Executive
          immediately prior to a Change in Control, or a change in Executive's
          titles or offices as in effect immediately prior to a Change in
          Control of the Company, or any removal of Executive from or any
          failure to reelect or reappoint Executive to any of such positions,
          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;

               (b) a 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 or the
          Company's (or any other Apogee Entity then employing Executive)
          failure to increase Executive's base salary (within 12 months of
          Executive's last increase 


                                      -3-

<PAGE>
 
          in base salary) after a Change in Control of the Company in an amount
          which at least equals, on a percentage basis, the average percentage
          increase in base salary for all executive officers of the Company
          effected during the preceding 12 months;

               (c) any failure by the Company (or any other Apogee Entity then
          employing Executive) to continue in effect 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) 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;

               (d) 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;

               (e) except to the extent otherwise required by applicable law,
          the failure by the Company (or any other Apogee Entity then employing
          Executive) to continue in effect 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 substantially
          similar benefits), 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;

               (f) the failure by the Company (or any other Apogee Entity then
          employing Executive) to provide Executive with the number of paid
          vacation days to which Executive is entitled immediately prior to such
          Change in Control in accordance with the Company's (or any other
          Apogee Entity's) vacation policy as then in effect;

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

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

          (iii) "Cause" shall mean termination by the Company (or any other
     Apogee Entity then employing Executive) of Executive's employment based
     upon (a) the willful and 


                                      -4-

<PAGE>
 
     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 (b) the willful
     engaging by Executive in misconduct which is materially injurious to the
     Company, monetarily or otherwise. For purposes of this Section 3(iii), 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.

          (iv) "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.

          (v) "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 (a) was a member of the Board of
     Directors on the date of this Agreement as first written above or (b)
     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(v): "Acquiring Person" shall mean
     any "person" (as such term is used in Sections 13(d) and 14(d) of the
     Exchange Act) who or which, together with all Affiliates and Associates of
     such person, is the Beneficial Owner of 10% or more of the shares of Common
     Stock of the Company then outstanding, but shall not include the Company,
     any subsidiary of the Company or any Executive benefit plan of the Company
     or of any subsidiary of the Company or any entity holding shares of Common
     Stock organized, appointed or established for, or pursuant to the terms of,
     any such plan; and "Affiliate" and "Associate" shall have the respective
     meanings ascribed to such terms in Rule 12b-2 promulgated under the
     Exchange Act.

     4. Benefits upon Termination under Section 2(ii)(c) After a Change in
Control

          (i) Upon the termination (voluntary or involuntary) of the employment
     of Executive pursuant to Section 2(ii)(c) hereof, Executive shall be
     entitled to receive the benefits specified in this Section 4. The amounts
     due to Executive under subparagraphs (a), (b), (c) or (d) of this Section
     4(i) shall be paid to Executive not later than one business day prior to
     the date that the termination of Executive's employment becomes effective
     (the "Employment Termination Date"). All benefits to Executive pursuant to
     this Section 4(i) shall be subject to any applicable income, payroll or
     other taxes required by law to be withheld.

               (a) The Company shall pay to Executive (x) the full base salary
          earned by him and unpaid through the date that the termination of
          Executive's employment becomes effective, at the rate in effect at the
          time written notice of termination (voluntary or involuntary) was
          given, (y) any amount earned by Executive as a bonus with respect to
          the fiscal year of the Company preceding the termination of his
          employment if such 


                                      -5-

<PAGE>
 
          bonus has not theretofore been paid to Executive, and (z) an amount
          representing credit for any vacation earned or accrued by him but not
          taken;

               (b) In lieu of any further base salary payments to Executive for
          periods subsequent to the date that the termination of Executive's
          employment becomes effective, the Company shall pay as severance pay
          to Executive (a "Severance Payment") a lump-sum cash amount equal to
          the sum of:

                    (I) an amount equal to the bonus Executive earned with
               respect to the fiscal year of the Company preceding the
               termination of his employment, or Executive's maximum target
               bonus for the fiscal year in which the Employment Termination
               Date occurs, whichever is greater (the "Target Bonus"),
               multiplied by a fraction, the numerator of which is equal to the
               number of full months in the year Executive terminates employment
               that have elapsed at the Employment Termination Date, and the
               denominator of which is twelve (12), plus

                    (II) the sum of Executive's (A) annual 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) the Target Bonus;

               (c) Notwithstanding any provision to the contrary in the Amended
          and Restated 1987 Apogee Enterprises, Inc. Partnership Plan (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
          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
          to Executive;

               (d) 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);

               (e) Notwithstanding any other agreement in existence between the
          Company and Executive at the Employment Termination Date, all stock
          options or shares of restricted stock owned or held by Executive or
          promised to be payable to Executive by the Company shall be
          immediately vested in Executive without further restriction 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; and

               (f) Any and all contracts, agreements or arrangements between the
          Company and/or any other Apogee Entity and Executive prohibiting or
          restricting Executive from owning, operating, participating in, or
          providing employment or consulting services to, any business or
          company competitive with the Company or such other Apogee Entity at


                                      -6-

<PAGE>
 
          any time or during any period after the Employment Termination Date,
          shall be deemed terminated and of no further force or effect as of the
          Employment Termination Date, to the extent, but only to the extent,
          such contracts, agreements or arrangements so prohibit or restrict
          Executive; provided that, the foregoing provision shall not constitute
          a license or right to use any proprietary information of the Company
          or such other Apogee Entity and shall in no way affect any such
          contracts, agreements or arrangements insofar as they relate to
          nondisclosure and nonuse of proprietary information of the Company or
          such other Apogee Entity notwithstanding the fact that such
          nondisclosure and nonuse may prohibit or restrict Executive in certain
          competitive activities.

          (ii) 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.

          (iii) 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 Internal Revenue Code of
     1986, as amended (the "Code") to the "Total Payments" (as defined in
     Section 4(iv) below) to be received by Executive. If such auditors
     determine that, after taking into account the provisions of Section 4(iv)
     hereof, any of the Total Payments would be subject to the excise tax
     imposed by Section 4999 of the Code, or any interest or penalties with
     respect to such tax (such excise tax, together with interest and penalties,
     are collectively referred to as the "Excise Tax"), then, in addition to any
     amounts payable under foregoing provisions of this Section 4, the Company
     shall pay an additional cash payment (a "Gross-Up Payment") within 30 days
     of such determination equal to the Excise Tax imposed on the Total
     Payments, including any Excise Tax or any other income taxes that may be
     imposed on such Gross-Up Payment. If no determination by the Company's
     auditors is made prior to the time a tax return reflecting the Total
     Payments is required to be filed by Executive, Executive will be entitled
     to receive a Gross-Up Payment calculated on the basis of the Total Payments
     reported by him in such tax return, within 30 days of the filing of such
     tax return. In all events, if any tax authority determines that a greater
     Excise Tax should be imposed on the Total Payments than is determined by
     the Company's independent auditors or reflected in Executive's tax return
     pursuant to this subparagraph (iii), Executive shall be entitled to receive
     the full Gross-Up Payment calculated on the basis of the amount of Excise
     Tax determined to be payable by such tax authority from the Company within
     30 days of such determination.

          (iv) 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, (a) 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; (b) no portion of the 


                                      -7-

<PAGE>
 
     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; (c) the value of any benefit provided by Section 4(i)(f) of
     this Agreement shall not be taken into account in computing Total Payments;
     and (d) 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. In case of uncertainty as to whether all or
     some portion of a payment is or is not payable to Executive under this
     Agreement, the Company shall initially make the payment to Executive, and
     Executive agrees to refund to the Company any amounts ultimately determined
     not to have been payable under the terms hereof.

     5. Successors and Binding Agreement

          (i) 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 5(i) or
     which otherwise becomes bound by all the terms and provisions of this
     Agreement by operation of law.

          (ii) 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.

     6. 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.

     7. 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 


                                      -8-

<PAGE>
 
signed by Executive and such officer 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.

     8. 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 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 8 by giving 15 days'
prior notice to the other party hereto.

     9. 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.

     10. 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.

     11. 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.

     12. 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.


                                      -9-

<PAGE>
 
     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                                       
                                          --------------------------------------
                                          Russell Huffer
                                          Its Chief Executive Officer and 
                                          President



                                       EXECUTIVE


                                       -----------------------------------------

                                       -----------------------------------------


                                      -10-

<PAGE>
 
                               SEVERANCE AGREEMENT


         THIS SEVERANCE AGREEMENT is made as of the _____ day of___________,
__________, between Apogee Enterprises, Inc., a Minnesota corporation, with its
principal offices at Norwest Financial Center, 7900 Xerxes Avenue South, Suite
1800, Minneapolis, Minnesota 55431 (the "Company") and
___________________________________ ("Executive"),
_____________________________________.

                          W I T N E S S E T H T H A T:

         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, 2000;
provided that commencing on January 1, 2001 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(i) hereof)
shall have occurred during such term.

         2. Termination of Employment

         (i) 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(iii) hereof), at any time.
Executive's rights upon termination of employment from all Apogee Entities prior
to a Change in Control shall be

<PAGE>
 
governed by the employing Apogee Entity's standard employment termination policy
applicable to Executive in effect at the time of termination.

         (ii) After a Change in Control

                  (a) 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(ii)
         or as a result of Executive's Disability (as defined in Section 3(iv)
         hereof) or his death.

                  (b) 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.

                  (c) From and after the date of a Change in Control during the
         term of this Agreement: (I) 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 (II) 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(ii) hereof), or upon Executive's voluntary termination of his
         employment with the Company or such other Apogee Entity for any reason
         during the 30-consecutive-day period commencing on the first
         anniversary of the date on which the Change in Control shall have
         occurred and ending on the 30th day immediately following the first
         anniversary on which the Change in Control occurs, 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

         (i) A "Change in Control" shall mean:

                  (a) 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:


                                      -2-

<PAGE>
 
                           (I) the consummation of any consolidation or merger
                  of the Company in which the Company is not the continuing or
                  surviving corporation or pursuant to which shares of the
                  Company's common stock would be converted into cash,
                  securities, or other property, other than a merger of the
                  Company in which the holders of the Company's common stock
                  immediately prior to the consolidation or merger have the same
                  proportionate ownership of common stock of the surviving
                  corporation immediately after the merger; or

                           (II) 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;

                  (b) 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;

                  (c) the Continuing Directors (as defined in Section 3(v)
         hereof) cease to constitute a majority of the Company's Board of
         Directors; or

                  (d) the majority of the Continuing Directors determine in
         their sole and absolute discretion that there has been a change in
         control of the Company.

         (ii) "Good Reason" shall mean the occurrence of any of the following
events, 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:

                  (a) the assignment to Executive of employment duties or
         responsibilities which are not of comparable responsibility and status
         as the employment duties and responsibilities held by Executive
         immediately prior to a Change in Control, or a change in Executive's
         titles or offices as in effect immediately prior to a Change in Control
         of the Company, or any removal of Executive from or any failure to
         reelect or reappoint Executive to any of such positions, 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;

                  (b) a 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 or the
         Company's (or any other Apogee Entity then employing Executive) failure
         to increase Executive's base salary (within 12 months of Executive's
         last increase in base salary) after a Change in Control of the Company
         in an amount which at least


                                      -3-

<PAGE>
 
         equals, on a percentage basis, the average percentage increase in base
         salary for all executive officers of the Company effected during the
         preceding 12 months;

                  (c) any failure by the Company (or any other Apogee Entity
         then employing Executive) to continue in effect 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) 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;

                  (d) 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;

                  (e) except to the extent otherwise required by applicable law,
         the failure by the Company (or any other Apogee Entity then employing
         Executive) to continue in effect 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 substantially
         similar benefits), 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;

                  (f) the failure by the Company (or any other Apogee Entity
         then employing Executive) to provide Executive with the number of paid
         vacation days to which Executive is entitled immediately prior to such
         Change in Control in accordance with the Company's (or any other Apogee
         Entity's) vacation policy as then in effect;

                  (g) the failure by the Company to obtain, as specified in
         Section 5(i) hereof, an assumption of the obligations of the Company to
         perform this Agreement by any successor to the Company; or

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

         (iii) "Cause" shall mean termination by the Company (or any other
Apogee Entity then employing Executive) of Executive's employment based upon (a)
the willful and continued failure by Executive substantially to perform his
duties and obligations (other than any


                                      -4-

<PAGE>
 
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 (b) the willful engaging by Executive in misconduct which is
materially injurious to the Company, monetarily or otherwise. For purposes of
this Section 3(iii), 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.

         (iv) "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.

         (v) "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 (a) was a member of the Board of Directors on
the date of this Agreement as first written above or (b) 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(v): "Acquiring Person" shall mean any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) who or which, together with all
Affiliates and Associates of such person, is the Beneficial Owner of 10% or more
of the shares of Common Stock of the Company then outstanding, but shall not
include the Company, any subsidiary of the Company or any Executive benefit plan
of the Company or of any subsidiary of the Company or any entity holding shares
of Common Stock organized, appointed or established for, or pursuant to the
terms of, any such plan; and "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 promulgated under the
Exchange Act.

         4. Benefits upon Termination under Section 2(ii)(c) After a Change in
Control

         (i) Upon the termination (voluntary or involuntary) of the employment
of Executive pursuant to Section 2(ii)(c) hereof, Executive shall be entitled to
receive the benefits specified in this Section 4. The amounts due to Executive
under subparagraphs (a), (b), (c) or (d) of this Section 4(i) shall be paid to
Executive not later than one business day prior to the date that the termination
of Executive's employment becomes effective (the "Employment Termination Date").
All benefits to Executive pursuant to this Section 4(i) shall be subject to any
applicable income, payroll or other taxes required by law to be withheld.

                  (a) The Company shall pay to Executive (x) the full base
         salary earned by him and unpaid through the date that the termination
         of Executive's employment becomes effective, at the rate in effect at
         the time written notice of termination (voluntary or involuntary) was
         given, (y) any amount earned by Executive as a bonus with respect to
         the fiscal year of the Company preceding the termination of his
         employment if such


                                      -5-

<PAGE>
 
         bonus has not theretofore been paid to Executive, and (z) an amount
         representing credit for any vacation earned or accrued by him but not
         taken;

                  (b) In lieu of any further base salary payments to Executive
         for periods subsequent to the date that the termination of Executive's
         employment becomes effective, the Company shall pay as severance pay to
         Executive (a "Severance Payment") a lump-sum cash amount equal to the
         sum of:

                           (I) an amount equal to the bonus Executive earned
                  with respect to the fiscal year of the Company preceding the
                  termination of his employment, or Executive's maximum target
                  bonus for the fiscal year in which the Employment Termination
                  Date occurs, whichever is greater (the "Target Bonus"),
                  multiplied by a fraction, the numerator of which is equal to
                  the number of full months in the year Executive terminates
                  employment that have elapsed at the Employment Termination
                  Date, and the denominator of which is twelve (12), plus

                           (II) twenty-four (24) 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;

                  (c) Notwithstanding any provision to the contrary in the
         Amended and Restated 1987 Apogee Enterprises, Inc. Partnership Plan
         (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 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 to Executive;

                  (d) 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);

                  (e) Notwithstanding any other agreement in existence between
         the Company and Executive at the Employment Termination Date, all stock
         options or shares of restricted stock owned or held by Executive or
         promised to be payable to Executive by the Company shall be immediately
         vested in Executive without further restriction 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; and

                  (f) Any and all contracts, agreements or arrangements between
         the Company and/or any other Apogee Entity and Executive prohibiting or
         restricting Executive from owning, operating, participating in, or
         providing employment or consulting services to, any business or company
         competitive with the Company or such other Apogee Entity at


                                      -6-

<PAGE>
 
         any time or during any period after the Employment Termination Date,
         shall be deemed terminated and of no further force or effect as of the
         Employment Termination Date, to the extent, but only to the extent,
         such contracts, agreements or arrangements so prohibit or restrict
         Executive; provided that, the foregoing provision shall not constitute
         a license or right to use any proprietary information of the Company or
         such other Apogee Entity and shall in no way affect any such contracts,
         agreements or arrangements insofar as they relate to nondisclosure and
         nonuse of proprietary information of the Company or such other Apogee
         Entity notwithstanding the fact that such nondisclosure and nonuse may
         prohibit or restrict Executive in certain competitive activities.

         (ii) 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.

         (iii) 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 Internal Revenue Code of 1986,
as amended (the "Code") to the "Total Payments" (as defined in Section 4(iv)
below) to be received by Executive. If such auditors determine that, after
taking into account the provisions of Section 4(iv) hereof, any of the Total
Payments would be subject to the excise tax imposed by Section 4999 of the Code,
or any interest or penalties with respect to such tax (such excise tax, together
with interest and penalties, are collectively referred to as the "Excise Tax"),
then, in addition to any amounts payable under foregoing provisions of this
Section 4, the Company shall pay an additional cash payment (a "Gross-Up
Payment") within 30 days of such determination equal to the Excise Tax imposed
on the Total Payments, including any Excise Tax or any other income taxes that
may be imposed on such Gross-Up Payment. If no determination by the Company's
auditors is made prior to the time a tax return reflecting the Total Payments is
required to be filed by Executive, Executive will be entitled to receive a
Gross-Up Payment calculated on the basis of the Total Payments reported by him
in such tax return, within 30 days of the filing of such tax return. In all
events, if any tax authority determines that a greater Excise Tax should be
imposed on the Total Payments than is determined by the Company's independent
auditors or reflected in Executive's tax return pursuant to this subparagraph
(iii), Executive shall be entitled to receive the full Gross-Up Payment
calculated on the basis of the amount of Excise Tax determined to be payable by
such tax authority from the Company within 30 days of such determination.

         (iv) 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,
(a) 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; (b) no portion of the


                                      -7-

<PAGE>
 
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; (c)
the value of any benefit provided by Section 4(i)(f) of this Agreement shall not
be taken into account in computing Total Payments; and (d) 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. In case of
uncertainty as to whether all or some portion of a payment is or is not payable
to Executive under this Agreement, the Company shall initially make the payment
to Executive, and Executive agrees to refund to the Company any amounts
ultimately determined not to have been payable under the terms hereof.

         5. Successors and Binding Agreement

         (i) 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 5(i) or which otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law.

         (ii) 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.

         6. 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.

         7. 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


                                      -8-

<PAGE>
 
signed by Executive and such officer 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.

         8. 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 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 8 by giving 15 days'
prior notice to the other party hereto.

         9. 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.

         10. 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.

         11. 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.

         12. 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.


                                      -9-

<PAGE>
 
         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
                                       -----------------------------------------
                                       Russell Huffer
                                       Its Chief Executive Officer and President


                                    EXECUTIVE

                                    --------------------------------------------

                                    --------------------------------------------

                                     -10-




<PAGE>
 
                                                                      Exhibit 21

                         SUBSIDIARIES OF THE REGISTRANT

     The Company is the owner of all of the issued and outstanding stock of the
following corporations, except as noted below.

                                                           State or Country of
      Name of Subsidiary                                      Incorporation    
      ------------------                                   ------------------- 
      Apogee Enterprises International, Inc.                     Barbados
      Prism Assurance, Ltd.                                      Vermont
      Harmon, Inc.                                               Minnesota
      Harmon Contract, Inc.                                      Minnesota
      Harmon Contract Asia, Ltd. (1)                             Minnesota
      Harmon Contract Asia Sdn Bhd (2)                           Malaysia
      Harmon Contract U.K., Limited (3)                          United Kingdom
      Harmon Europe (4) (8)                                      France
      AWG Services, Inc. (5)                                     Wisconsin
      Viracon, Inc.                                              Minnesota
      Viratec Thin Films, Inc. (6)                               Minnesota
      Viracon Georgia, Inc. (6)                                  Minnesota
      Viracon/Curvlite, Inc.                                     Minnesota
      Tru Vue, Inc.                                              Illinois
      Harmon Glass Company                                       Minnesota
      Apogee Sales Corporation (7)                               South Dakota
      Harmon Glass of Canada Ltd. (7) (8)                        Canada
      Apogee Wausau Group, Inc.                                  Wisconsin
      Harmon CFEM Facades (UK) Ltd. (8) (9)                      United Kingdom
      Harmon/CFEM Facades S.A. (8) (10)                          France
      Harmon Facalu S.A. (8) (10)                                France
      Harmon Sitraco S.A. (8) (10)                               France
      Harmon Voisin S.A. (8) (10)                                France
      VIS'N Service Corporation (8) (11)                         Minnesota
      Balangier Designs, Inc. (12)                               New Jersey


(1)  Owned by Harmon Contract, Inc.
(2)  Owned by Harmon Contract Asia, Ltd.
(3)  99.99% owned by Harmon Contract, Inc. and .01% by Apogee Enterprises, Inc.
(4)  100% owned by various
 Apogee entities
(5)  Owned by Apogee Wausau Group, Inc.
(6)  Owned by Viracon, Inc.
(7)  Owned by Harmon Glass Company
(8)  Inactive
(9)  99.99% owned by Harmon Europe S.A. and .01% by Apogee Enterprises, Inc.
(10) Owned by Harmon Europe S.A.
(11) 99.6% owned by Harmon Glass Company
(12) Owned by Tru Vue, Inc.



<PAGE>
 
                                                                     Exhibit 23A

                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS


As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 10-K, into the Company's previously filed
Registration Statement File Nos. 333-43734, 33-60400, 333-20979, 333-32437,
33-13302, 33-66574, 333-58181, 333-58165, 33-35944, 333-95863, and 333-95855.


                                       /s/ Arthur Andersen LLP

Minneapolis, Minnesota,
May 18, 2001





<PAGE>
 
                                                                     Exhibit 23B

                          Independent Auditors' Consent


The Board of Directors
Apogee Enterprises, Inc.:

We consent to incorporation by reference in the registration statements (Nos.
33-60400, 333-20979, 333-32437, 33-13302, 33-66574, 333-58181, 333-58165,
33-35944, 333-95863, 333-95855 and 333-43734) on Forms S-3 and S-8 of Apogee
Enterprises, Inc. of our report dated April 12, 1999, except as to Note 11 which
is as of February 14, 2000, relating to the consolidated results of operations
and cash flows of Apogee Enterprises, Inc. and subsidiaries for the year ended
February 27, 1999, which report appears in the March 3, 2001 annual report on
Form 10-K of Apogee Enterprises, Inc.



                                       /s/ KPMG LLP

Minneapolis, Minnesota
May 16, 2001





<PAGE>
 
                                                                      Exhibit 99
LITIGATION REFORM ACT OF 1995


                              CAUTIONARY STATEMENTS
                              ---------------------

The following discussion contains certain cautionary statements regarding
Apogee's business and results of operations, which should be considered by
investors and others. These statements discuss matters, which may in part be
discussed elsewhere in this Form 10-K, and which may have been discussed in
other documents prepared by the Company pursuant to federal securities laws.
This discussion is intended to take advantage of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. The following factors
should be considered in conjunction with any discussion of operations or results
by the Company or its representatives, including any forward-looking discussion,
as well as comments contained in press releases, presentations to securities
analysts or investors, or other communications by the Company.

In making these statements, the Company is not undertaking to address or update
each factor in future filings or communications regarding the Company's business
or results, and is not undertaking to address how any of these factors may have
caused changes to discussions or information contained
 in previous filings or
communications. In addition, any of the matters discussed below may have
affected Apogee's past results and may affect future results, so that the
Company's actual results for fiscal 2002 and beyond may differ materially from
those expressed in prior communications. Though the Company has attempted to
list comprehensively these important cautionary factors, the Company wishes to
caution investors and others that other factors may in the future prove to be
important in affecting the Company's business or results of operations.

Industry Conditions

The Company is divided into three segments, each serving different markets.

The Architectural Products and Services (Architectural) segment's companies
design, engineer, fabricate and install the walls of glass and windows
comprising the outside skin of commercial and institutional buildings. The
markets that these businesses serve are very competitive, price sensitive and
affected by changes in the commercial construction industry as well as general,
economic conditions. The companies of this segment have been, in general,
profitable, with growing revenues. There can be no assurance the growth
experienced by the segment will continue or that competitors or the economic
environment will not significantly change market conditions.

The Large-Scale Optical Technologies (LSO) segment's companies develop and
produce high technology glass that enhances the visual performance of products
for display, imaging and picture framing industries. The markets that these
businesses serve are very competitive, highly responsive to new products and
price sensitive. The revenue growth of the companies in this segment have been,
in general, increasing steadily while profitability has not been consistent with
that growth. There can be no assurance the revenue growth experienced by the
segment will continue or that the profitability pattern will change.
Additionally, there can be no assurance that the introduction of new products or
competitors will not significantly change market conditions.

The Automotive Replacement Glass and Services (Auto Glass) segment's companies
fabricate, repair and replace automobile windshields and windows. The market
that these businesses serve tends to be cyclical in nature and is influenced by
a variety of factors, including weather, new car sales, speed limits, road
conditions, the economy and average annual number of miles driven. This market's
pricing structure has changed significantly in recent years as insurance
companies seek volume pricing at discounted rates from historical levels and
attempt to enter into preferred or exclusive provider arrangements with a
limited number of providers. Consequently, revenues have decreased and margins
have narrowed at the retail and manufacturing levels, in which the Auto Glass
segment operates. There can be no assurance that the Company will be able to
increase revenues or to improve or maintain its margins, whether through
improved pricing conditions or cost-savings, or that it will continue to be
selected by insurance companies as a provider of replacement and repair auto
glass on a regional or national basis on acceptable terms and conditions.

Competitive Environment

The Company's business segments operate in industries that are highly
competitive and, other than the industries in which the LSO's units compete, are
fairly mature. The barriers to entry are not significant for many of the markets
the Company serves, specifically in the Auto Glass segment and glass
installation business. Therefore, the Company expects its markets to remain
highly competitive. The Company faces competition from other major contractors,
subcontractors, manufacturers, 


                                       1

<PAGE>
 
fabricators, wholesalers, retailers and installers in each of its markets,
certain of which competitors have greater financial or other resources than the
Company.

The businesses in the Architectural and LSO segments compete with several large
integrated glass manufacturers and numerous smaller specialty fabricators.
Product pricing and service are the primary competitive factors in this market.
The markets for the products of the LSO segment are also characterized by
frequent refinement and enhancement, new product introductions and declining
average selling prices over product life cycles. These factors require the
Company to seek improvement in its manufacturing processes on a continuous
basis, as well as to innovate with respect to new or improved products. There
can be no assurance that the Company will be able to meet such requirements. In
addition, such requirements may generate a continual need for new investments,
as to which there can be no assurance the Company can obtain the necessary
investment resources and, if obtained, that such investment will produce
appropriate returns.

The Architectural segment's Wausau Window & Wall Systems unit competes against
several major aluminum window manufacturers. Wausau primarily serves the custom
portion of this market in which the primary competitive factors are product
quality, reliable service and the ability to provide technical engineering and
design services.

The Auto Glass segment competes with other auto glass shops, glass distributors,
car dealers, body shops and fabrication facilities on the basis of pricing,
national coverage and customer service. Its competition consists of national and
regional chains as well as significant local competition.

There can be no assurance that the Company will continue to be able to compete
effectively in its markets.

Discontinued International Curtainwall Operations

During fiscal 1998, the Company made the strategic decision to close or exit its
European and Asian international curtainwall operations in order to focus more
selectively on higher-margin domestic curtainwall business. As a result of such
restructuring, the Company recorded nonrecurring pre-tax charges of $26.0
million and $35.9 million in the third and fourth quarters of fiscal 1998,
respectively. While the Company believes these restructuring charges are
adequate to cover all expenses the Company has incurred or will incur in order
to close or exit such operations, there can be no assurance given that
additional charges will not be required to be made in future periods. The
Company faces related risks and uncertainties, including the inability to
effectively manage restructured business units and the inability to effectively
manage costs or difficulties related to the operation of the businesses or
execution of restructuring or exit activities. The occurrence of one or more of
such events may have a material adverse effect on the business, financial
condition or results of operations of the Company.

Capital Expenditures/Facility Utilization

The Architectural segment's continued growth depends, to a significant degree,
on its ability to increase capacity utilization at these facilities. In response
to continued strong demand for the segment's high-performance architectural
glass products, the Company, in fiscal 1999, undertook a capital investment
program, the primary purpose of which was to increase production capacity and
productivity of its Viracon business unit. Pursuant to this plan, the Viracon
unit completed construction in fiscal 2000 of a new architectural glass
fabrication complex in Statesboro, Georgia.

Additionally, the LSO segment's growth is also dependent on its ability to
expand its production facilities and fully utilize these expanded facilities.
LSO's unit, Tru Vue, completed construction of a new facility in the first
quarter of fiscal 2000 and in fiscal 2001, purchased two manufacturers to expand
its pre-framed art business. The segment's Viratec unit installed a new,
large-scale flat-glass coating line that went on line in late fiscal 2000.
During fiscal 1999, the Viratec unit moved its Optium line to San Diego, a
location closer to the flow of customers' computer monitor supply chains. During
fiscal 2001, the Company was notified that this facility's primary customer
planned to relocate its computer monitor facility, eliminating the need for the
Company's facility. The Company accrued expenses associated with the shut down
of this facility in fiscal 2001.

The Company believes, although these ramp-ups and acquisitions have been
completed, that the continued utilization of these facilities will be important
in enabling the Architectural and LSO segments to continue to satisfy the demand
for their products and services. Although the Company believes it has the
capital and managerial resources to execute these plans, there can be no
assurance that the planned expansions and acquisitions will produce the improved
operating and financial results expected by the Company. Additionally, there are
no assurances that the shut down of the Viratec San Diego facility will not
result in an additional charge to earnings.


                                       2

<PAGE>
 
Consolidation of Auto Glass Installation Industry

The auto glass installation industry is consolidating in response to insurance
companies' growing preference to interact with only a few major providers that
are capable of offering efficient claims management services throughout a large
geographic region. Due to an industry merger in 1997, Auto Glass became the
second largest company in the auto glass repair and replacement industry. During
fiscal 2001, the Company and PPG combined their U.S. automotive replacement
businesses into a newly formed entity, PPG Auto Glass, LLC, of which the Company
maintains a 34% ownership interest. The Company expects further industry
consolidation in the auto glass retail and wholesales businesses. The Auto Glass
segment has also initiated several cost savings initiatives over the past three
fiscal years to lessen the impact of reduced margins on the operating results of
the Company.

There is no assurance PPG Auto Glass will achieve any anticipated efficiencies
or be able to improve or maintain margins. Additionally, if the Auto Glass
segment is unable to control costs while providing required services to the
insurance market, it may not be able to remain a viable competitor in this
industry. The failure by the Auto Glass segment to timely respond to such
changes could have a material adverse effect on its, and the Company's,
business, financial condition or results of operations.

Government Regulation

Many states have statutes or regulations prohibiting certain referral practices
by insurers. Approximately 30 states currently have statutes or regulations that
prohibit an insurance company from requiring a policyholder to use a particular
vendor. In addition, new laws or regulations relating to the referral practices
of insurance companies may be adopted in these or other states. The Auto Glass
segment does not enter into arrangements with insurance companies pursuant to
which such insurance companies require policyholders to use the Auto Glass
segment for auto glass replacement or repair services. Although the Company does
not believe that existing government regulation of insurance company referral
practices will have a material adverse effect on the Company, no assurance can
be given that future regulation of such referral practices will not have a
material adverse effect on its, and the Company's, business, financial condition
or results of operations.

Effect of Weather Conditions

The severity of weather has historically affected the Auto Glass segment's sales
and operating income, with severe weather generating increased sales and income
and mild weather resulting in lower sales and income. Accordingly, mild weather
conditions may adversely affect the Auto Glass segment's results of operations.


                                       3