UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant  ☒                            

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

Apogee Enterprises, Inc.

(Name of Registrant as Specified In Its Charter)

Not Applicable

(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

				December [    ], 2019

Dear Shareholder:

You are cordially invited to attend the 2019 Annual Meeting of Shareholders of Apogee Enterprises, Inc. to be held at Apogee’s headquarters, 4400 West 78th Street, Suite 520, Minneapolis, Minnesota, commencing at 7:30 a.m. Central Standard Time on [Tuesday], January [14], 2020. The 2019 Annual Meeting was postponed pending discussions and entry into a Cooperation Agreement with our shareholder, Engaged Capital, LLC. We have summarized the terms of the Cooperation Agreement on pages 21 – 22. We expect that the 2020 Annual Meeting will take place at its regularly scheduled time in June 2020.

The Corporate Secretary’s formal notice of the meeting and the proxy statement appear on the following pages and describe the matters to come before the meeting. You may be required to present a valid government-issued picture identification and proof of stock ownership in order to attend the meeting. If you hold stock through a broker, bank, trust or other nominee, you may be required to present a copy of a statement reflecting your stock ownership as of the record date.

Even if you plan to attend the meeting, we urge you to vote your shares by marking your votes on the enclosed proxy card, signing and dating it, and mailing it in the enclosed postage-paid envelope as promptly as possible. You may also vote your shares via the Internet or by telephone as directed on the enclosed proxy card. Internet and telephone voting facilities for shareholders of record will be available 24 hours a day and will close at 11:59 p.m. Eastern Standard Time (10:59 p.m. Central Standard Time) on January 13, 2020. If you attend the meeting in person and you are a shareholder of record, you may at that time revoke any proxy previously given and vote in person, if desired.

Sincerely,

NOTICE OF 2019 ANNUAL MEETING OF SHAREHOLDERS

The 2019 Annual Meeting of Shareholders of Apogee Enterprises, Inc. (including any adjournments or postponements thereof) (the “Annual Meeting”) will be held as follows:

The purpose of the Annual Meeting is to consider and take action on the following:

The Board of Directors has fixed November 20, 2019, as the record date for the Annual Meeting. Only shareholders of record at the close of business on that date are entitled to receive notice of and to vote at the Annual Meeting. There were 26,552,935 shares of our common stock issued and outstanding as of the record date and, therefore, eligible to vote at the Annual Meeting.

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Your vote is important to ensure a quorum at the meeting. Even if you own only a few shares, and whether or not you expect to be present at the meeting, we urgently request that you mark, date, sign, and mail the enclosed proxy card in the postage-paid envelope provided or vote your shares via the Internet or by telephone as directed on the enclosed proxy card. Internet and telephone voting facilities for shareholders of record will be available 24 hours a day, and will close at 11:59 p.m. Eastern Standard Time (10:59 p.m. Central Standard Time) on January 13, 2020. You may revoke your proxy at any time prior to the meeting and delivery of your proxy will not affect your right to vote in person if you attend the meeting.

By Order of the Board of Directors,

Patricia A. Beithon

General Counsel and Corporate Secretary

Minneapolis, Minnesota

December [      ], 2019

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TABLE OF CONTENTS

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PROXY STATEMENT

2019 ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD JANUARY [14], 2020

The Board of Directors of Apogee Enterprises, Inc. (“Apogee” or the “Company”) is soliciting proxies for use at our 2019 Annual Meeting of Shareholders (including any adjournments and postponements thereof) (the “Annual Meeting”) to be held on [Tuesday, January 14], 2020. This proxy statement and the enclosed proxy card and are first being mailed or given to our shareholders on or about [_______], December [ ], 2019.

PROXY STATEMENT SUMMARY

Below are highlights of some of the information contained in this proxy statement. These highlights are only a summary. Please review the complete proxy statement and our 2019 Annual Report to Shareholders for the fiscal year ended March 2, 2019 before you vote.

ANNUAL MEETING OF SHAREHOLDERS

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PROPOSAL 1 – ELECTION OF DIRECTORS (See pages 14 – 19 for more information.)

You are being asked to elect four Class III directors to the Board at the Annual Meeting. Our Board of Directors is currently composed of ten directors and divided into three classes. At the Annual Meeting, four directors are standing for election as Class III directors. The term of office for the Class III directors will expire at the conclusion of our 2022 Annual Meeting of Shareholders and when their successors are duly elected and qualified, or upon their earlier resignation or removal.

We have presented the following information about our Class III director nominees:

Vote required: In accordance with Section 302A.215 of the Minnesota Business Corporation Act (the “MBCA”), directors are elected by a plurality of the shares present and entitled to vote on the election of directors at the Annual Meeting, which means that the nominees receiving the highest number of “for” votes by the shares entitled to vote, up to the number of directors positions subject to election or re-election, will be elected to the Board. However, in accordance with our Corporate Governance Guidelines, if a majority of our shares that are voted in a certain nominee’s election are “withheld” from such election, the nominee shall offer his or her resignation to our Nominating and Corporate Governance Committee for its consideration. The Nominating and Corporate Governance Committee shall evaluate the best interests of Apogee and its shareholders and shall recommend to the Board the action to be taken with respect to such offered resignation.

Our Board of Directors recommends that you vote FOR the four Class III director nominees. Unless authority for one or more of the nominees is withheld, proxies will be voted FOR the election of each of the four Class III director nominees.

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PROPOSAL 2 – ADVISORY VOTE ON EXECUTIVE COMPENSATION (See pages 71 – 72 for more information.)

The Company provides shareholders with the opportunity to cast an annual advisory (non-binding) vote on our executive compensation program (a “Say on Pay Proposal”).

Vote Required: The affirmative vote of a majority of the shares of our common stock present in person or by proxy and entitled to vote at the Annual Meeting is required for the approval of the Say on Pay Proposal.

Our Board of Directors recommends that you cast an advisory vote FOR the Say on Pay Proposal. Proxies will be voted FOR the proposal unless otherwise specified.

PROPOSAL 3 – APPROVAL OF THE APOGEE ENTERPRISES, INC. 2019 STOCK INCENTIVE PLAN (See pages 73 – 81 for more information.)

We are asking our shareholders to approve our Apogee Enterprises, Inc. 2019 Stock Incentive Plan (the “2019 Stock Plan”). The purpose of the 2019 Stock Plan is to promote the interests of the Company and its shareholders by aiding the Company in attracting and retaining employees, officers, consultants and independent contractors capable of contributing to the future success of the Company, to provide such persons with opportunities for stock ownership in the Company and to offer such persons incentives to put forth maximum effort for the success of our Company’s business. Subject to shareholder approval, the Board has reserved 1,150,000 shares of our common stock for issuance under the 2019 Stock Plan.

Vote Required: The affirmative vote of the majority of the shares of our common stock present in person or by proxy and entitled to vote at the Annual Meeting is required for the approval of the 2019 Stock Plan.

Our Board of Directors recommends that you vote FOR approval of the 2019 Stock Plan. Proxies will be voted FOR the proposal unless otherwise specified.

PROPOSAL 4 – APPROVAL OF THE APOGEE ENTERPRISES, INC. 2019 NON-EMPLOYEE DIRECTOR STOCK PLAN (See pages 82 – 88 for more information.)

We are asking our shareholders to approve our Apogee Enterprises, Inc. 2019 Non-Employee Director Stock Plan (the “2019 Director Stock Plan”). The purpose of the 2019 Director Stock Plan is to promote the interests of the Company and our shareholders by aiding us in attracting and retaining non-employee directors capable of providing strategic direction to, and assuring the future success of the Company and motivating such non-employee directors to put forth maximum efforts for the success of our business. The 2019 Director Stock Plan will allow us to provide our non-employee directors an opportunity to acquire a proprietary interest in our Company, thereby aligning the interests of our non-employee directors with our shareholders. Subject to shareholder approval, the Board has reserved 150,000 shares of common stock issuance under the 2019 Director Stock Plan.

Vote Required: The affirmative vote of the majority of the shares of our common stock present in person or by proxy and entitled to vote at the Annual Meeting is required for the approval of the 2019 Director Stock Plan.

Our Board of Directors recommends that you vote FOR approval of the 2019 Director Stock Plan. Proxies will be voted FOR the proposal unless otherwise specified.

In June 2018, the Board approved amendments to the Company’s Restated Articles of Incorporation (the “Articles”) in order to establish a majority voting standard for director elections, reduce certain supermajority voting requirements, and eliminate the “anti-greenmail” provisions in the Articles, subject to shareholder approval. The Board believes that these proposals are aligned with good corporate governance and are in the best interests of our shareholders. A marked version of the Articles, amended and restated to reflect all of the proposed changes, can be found in Appendix A.

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PROPOSAL 5 – APPROVAL OF AN AMENDMENT TO THE ARTICLES TO ELECT DIRECTORS BY MAJORITY VOTE (See pages 89 – 91 for more information.)

We are asking shareholders to approve an amendment to the Articles to adopt a majority voting standard for the election of directors. Our directors are currently elected by a plurality voting standard. Under the proposed majority voting standard, a director nominee running in an uncontested election must receive more “for” votes than “against” votes by the shareholders entitled to vote and present in person or represented by proxy at a meeting duly called and held for such purpose and at which a quorum is present.

Vote Required: The affirmative vote by holders of at least 80% of the outstanding shares of common stock is required for the approval of this amendment to the Articles.

Our Board of Directors recommends that you vote FOR the proposal to amend the Articles to elect directors by majority vote rather than by plurality vote. Proxies will be voted FOR the proposal unless otherwise specified.

PROPOSAL 6 – APPROVAL OF AN AMENDMENT TO THE ARTICLES TO REDUCE THE REQUIRED VOTE OF THE COMPANY’S SHAREHOLDERS, FROM SUPERMAJORITY TO MAJORITY, TO REMOVE DIRECTORS FOR CAUSE (See page 92 for more information.)

We are asking shareholders to approve an amendment to the Articles to reduce the vote required for shareholders to remove a director for cause from 80% of the outstanding shares of common stock to a majority of the outstanding shares of common stock present at a meeting of shareholders.

Vote Required: The affirmative vote by holders of at least 80% of the outstanding shares of common stock is required for the approval of this amendment to the Articles.

Our Board of Directors recommends that you vote FOR the proposal to amend the Articles to reduce the supermajority vote to a majority vote for shareholder removal of directors for cause. Proxies will be voted FOR the proposal unless otherwise specified.

PROPOSAL 7 – APPROVAL OF AN AMENDMENT TO THE ARTICLES TO REDUCE THE REQUIRED VOTE OF THE COMPANY’S SHAREHOLDERS, FROM SUPERMAJORITY TO MAJORITY, TO AMEND THE DIRECTOR REMOVAL PROVISION (See page 93 for more information.)

We are asking shareholders to approve an amendment to the Articles to reduce the vote required for shareholders to amend the director removal provision in Section 5.02 of the Articles (the “Director Removal Provision”) from 80% of the outstanding shares of common stock to a majority of the outstanding shares of common stock present at a meeting of shareholders.

Vote Required: The affirmative vote by holders of at least 80% of the outstanding shares of common stock is required for the approval of this amendment to the Articles.

Our Board of Directors recommends that you vote FOR the proposal to amend the Articles to reduce the supermajority vote to a majority vote for the amendment of the Director Removal Provision. Proxies will be voted FOR the proposal unless otherwise specified.

PROPOSAL 8 – APPROVAL OF AN AMENDMENT TO THE ARTICLES TO ELIMINATE THE ANTI-GREENMAIL PROVISION (See pages 94 - 95 for more information.)

We are asking shareholders to approve an amendment to the Articles to repeal Article VIII entitled, “Prevention of Greenmail” (the “Anti-Greenmail Provision”). The repeal would reduce the shareholder vote required to approve the Company’s purchase of shares from interested shareholders, including greater than 5% shareholders, under the specified circumstances, from 80% of all votes entitled to be cast to a majority of the voting power of all shares entitled to vote, which is the voting standard set forth in the MBCA. The Board believes that the anti-greenmail provision set forth in the MBCA provides Apogee with sufficient protection from the potential abuse of greenmail.

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Vote Required: The affirmative vote by holders of at least 80% of the outstanding shares of common stock is required for the approval of this amendment to the Articles.

Our Board of Directors recommends that you vote FOR the proposal to amend the Articles to repeal the Anti-Greenmail Provision. Proxies will be voted FOR the proposal unless otherwise specified.

PROPOSAL 9 – APPROVAL OF AN AMENDMENT TO THE ARTICLES TO REDUCE THE REQUIRED VOTE OF THE COMPANY’S SHAREHOLDERS, FROM SUPERMAJORITY TO MAJORITY, TO AMEND THE ANTI-GREENMAIL PROVISION (See page 96 for more information.)

We are asking shareholders to approve an amendment to the Articles to reduce the vote required for shareholders to amend the Anti-Greenmail Provision. If shareholders do not approve Proposal 8 to repeal the Anti-Greenmail Provision, but do approve this Proposal 9, the shareholder vote required to amend the Anti-Greenmail Provision would be reduced from 80% of the outstanding “Voting Stock” (as that term is defined in the proposal), voting together as a single class, to the affirmative vote of the holders of a majority of the outstanding Voting Stock present at a meeting of shareholders, voting together as a single class.

Vote Required: The affirmative vote by holders of at least 80% of the outstanding shares of common stock is required for the approval of this amendment to the Articles.

Our Board of Directors recommends that you vote FOR the proposal to amend the Articles to reduce the supermajority voting requirement to a majority vote to amend or repeal the Anti-Greenmail Provision. Proxies will be voted FOR the proposal unless otherwise specified.

PROPOSAL 10 – RATIFICATION OF THE EXCLUSIVE FORUM BY-LAW (See pages 97 - 98 for more information.)

We are asking shareholders to ratify an amendment to the Company’s By-laws which provides that the state and federal courts in Hennepin County, Minnesota will serve as the exclusive forum for the adjudication of certain legal actions involving Apogee (the “Exclusive Forum By-law”). The Board determined that the adoption of the Exclusive Forum By-Law is in the best interests of our Company and its shareholders because, among other reasons, it will limit the ability of plaintiffs in certain cases to forum shop and to litigate in multiple jurisdictions, which can result in conflicting decisions by different courts and significant expense to our Company.

The Board amended the By-laws, effective June 28, 2018, to add a new Article VIII, which contains this provision. This provision became effective at that time. While it is not required to do so, our Board of Directors determined at the time that it adopted the Exclusive Forum By-law that it would submit it to our shareholders for ratification. If the Exclusive Forum By-law is not ratified, the Board will reconsider whether it is in the best interests of Apogee and its shareholders to retain the Exclusive Forum By-law.

Vote Required: The affirmative vote of the majority of the shares of our common stock present in person or by proxy and entitled to vote at the Annual Meeting is required for the ratification of the adoption of the Exclusive Forum By-Law.

Our Board of Directors recommends that you vote FOR the ratification of the adoption of the Exclusive Forum By-law. Proxies will be voted FOR the proposal unless otherwise specified.

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PROPOSAL 11 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (See pages 99 – 101 for more information.)

Our Audit Committee has appointed Deloitte & Touche LLP, as our independent registered public accounting firm for the fiscal year ending February 29, 2020. Deloitte & Touche has acted as our independent registered public accounting firm since fiscal 2003.

Vote Required: The affirmative vote of a majority of the shares of our common stock present in person or by proxy and entitled to vote at the Annual Meeting is required for ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending February 29, 2020.

Our Board of Directors recommends that you vote FOR the ratification of the appointment of our independent registered public accounting firm. Proxies will be voted FOR the proposal unless otherwise specified.

FISCAL 2019 PERFORMANCE HIGHLIGHTS (See pages 34 – 36 for more information.)

Adjusted diluted earnings per share and adjusted operating income are non-GAAP financial metrics that are reconciled with the most directly comparable GAAP financial metrics in Appendix E.

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FISCAL 2019 COMPENSATION ACTIONS (See page 41 and pages 45 - 53 for more information.)

EXECUTIVE COMPENSATION PROGRAM HIGHLIGHTS (See pages 32 – 69 for more information.)

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BOARD COMPOSITION

The composition of our Board of Directors facilitates independent oversight and a diversity of background and experiences that enrich Board deliberations. The following charts assume the election of the Class III nominees presented in this proxy statement.

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BOARD SKILLS

Each of our Class I and Class II directors and Class III director nominees brings a diversity of skills and experiences to his or her service on our Board. Core qualifications and areas of expertise that will be represented on our Board assuming the election of the for Class III director nominees is shown below.

SHAREHOLDER OUTREACH

We conduct regular outreach with our shareholders to discuss business and other matters. During fiscal 2019, senior management attended five investor conferences and engaged with investors during other non-deal roadshows, site visits and conference calls. In addition to these investor engagements, we initiated our first proactive outreach to corporate governance teams from several of our largest shareholders.    

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth information concerning beneficial ownership of our common stock outstanding as of November 20, 2019, by persons known to us to own more than 5% of our common stock. Unless otherwise indicated, the named holders have sole voting and investment power with respect to the shares beneficially owned by them.

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SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT

The following table sets forth the number of shares of our common stock beneficially owned as of November 20, 2019, by each of our directors, each of our executive officers named in the Summary Compensation Table (our “Named Executive Officers”) and by all of our directors and executive officers as a group.

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For our executive officers, the number of shares indicated includes shares issued to the named individual pursuant to our 2009 Stock Incentive Plan, as amended and restated (2011) (the “2009 Stock Incentive Plan”), our Employee Stock Purchase Plan and our 401(k) Retirement Plan. The number of shares of restricted stock issued pursuant to our 2009 Stock Incentive Plan is set forth below.

All shares of restricted stock held pursuant to our 2009 Stock Incentive Plan are subject to future vesting conditions, and the holders of such shares have no investment power over such shares.

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PROPOSAL 1: ELECTION OF DIRECTORS

Our Articles provide that our Board of Directors will be divided into three classes of directors of as nearly equal size as possible and the term of each class of directors is three years. Our Articles further provide that the total number of directors will be determined exclusively by our Board of Directors. The term of one class expires each year in rotation. At our Annual Meeting, the terms of our four Class III directors will expire. Currently, we have ten directors, with four directors serving in Class III and three directors serving in Classes I and II. Jerome L. Davis, Sara L. Hays and Richard V. Reynolds, all of whom serve as Class III directors, will retire at the conclusion of the Annual Meeting, after 15, 14 and 13 years, respectively, of service on our Board.

Mark A. Pompa has been nominated for re-election to our Board as a Class III director. Christina M. Alvord, Frank G. Heard, and Elizabeth M. Lilly (collectively, the “New Director Candidates”) have been nominated as new Class III directors in connection with our entry into a Cooperation Agreement with Engaged Capital. The New Director Candidates are not affiliated with Engaged Capital. Nor have they, or would they, receive any compensation or other payments from any third parties, including Engaged Capital, in exchange for their candidacy or service on the Board. For more information on their nominations, please refer to “New Director Candidates” on page 21.

Class III directors elected at the Annual Meeting will serve until our 2022 Annual Meeting of Shareholders and until their successors are duly elected and qualified or until their earlier resignation or removal. Each of the nominees has agreed to serve as a director, if elected.

Each of the nominees has consented to be named as a nominee to the Board in this proxy statement, and we have no reason to expect that any of the nominees will fail to be a candidate at the Annual Meeting. Therefore, we have not identified any substitute nominee or nominees at this time. If any of the nominees should be unable to serve as a director prior to the Annual Meeting, proxies will be voted for a substitute nominee or nominees in accordance with the best judgment of the person or persons named as proxies in the enclosed proxy card.

Information about the background and qualifications of the Board nominees for election at the Annual Meeting and the directors who are not subject to re-election at the Annual Meeting is provided below. All of our directors possess the minimum qualities and skills described under “Criteria for Membership on Our Board of Directors” on page 22.

Required Vote and Recommendation

In accordance with Section 302A.215 of the MBCA, directors are elected by a plurality of the shares present and entitled to vote on the election of directors at the Annual Meeting, which means that the nominees receiving the highest number of “for” votes by the shares entitled to vote, up to the number of directors positions subject to re-election, will be elected to the Board. However, in accordance with our Corporate Governance Guidelines, if a majority of our shares that are voted in a certain nominee’s election are “withheld” from such election, the nominee shall offer his or her resignation to our Nominating and Corporate Governance Committee for its consideration. The Nominating and Corporate Governance Committee shall evaluate the best interests of Apogee and its shareholders and shall recommend to the Board the action to be taken with respect to such offered resignation.

Our Board of Directors recommends that you vote FOR the four Class III director nominees. Unless authority for one or more of the nominees is withheld, proxies will be voted FOR the election of the four Class III nominees.

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Class I Directors – Term Expiring in 2020 (continued)

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CORPORATE GOVERNANCE

Corporate Governance Resources

Information related to our corporate governance is available on our website at www.apog.com by clicking on “Investors”, selecting “Governance” and then selecting the applicable document or information. This information includes:

Information relating to our management team is also available on our website at www.apog.com by clicking on “About Us” and then selecting “Leadership.”

We will provide copies of any of the foregoing information without charge upon written request to: Corporate Secretary, Apogee Enterprises, Inc., 4400 West 78th Street, Suite 520, Minneapolis, Minnesota 55435.

Certain sections of this Proxy Statement reference or refer you to materials posted on our website, www.apog.com. These materials and our website are not incorporated by reference in, and are not part of this Proxy Statement.

Code of Business Ethics and Conduct

Our Board of Directors has adopted our Code of Business Ethics and Conduct (our “Code of Conduct”), which is a statement of our high standards for ethical behavior and legal compliance. All of our employees and all members of our Board of Directors are required to comply with our Code of Conduct.

Corporate Governance Guidelines

Our Corporate Governance Guidelines outline the role, composition, qualifications, operation and other policies applicable to our Board of Directors and are revised as necessary to continue to reflect evolving corporate governance practices.

Director Independence

Under our Corporate Governance Guidelines, a substantial majority of the directors on our Board, and all members of our Audit, Compensation, and Nominating and Corporate Governance Committees must be independent. Each year, in accordance with NASDAQ rules, our Board of Directors affirmatively determines the independence of each director and nominee for election as a director in accordance with guidelines it has adopted, which include all elements of independence set forth in the NASDAQ listing standards.

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Our Nominating and Corporate Governance Committee reviewed the applicable legal standards for Board member and Board committee member independence and reported on its review to our Board of Directors. Based on this review, our Board of Directors has determined that the following non-employee directors are independent and have no material relationship with us except serving as a director and holding shares of our common stock: Bernard P. Aldrich, Lloyd E. Johnson, Donald A. Nolan, Herbert K. Parker, Mark A. Pompa and Patricia K. Wagner, as well as Jerome L. Davis, Sara L. Hays and Richard V. Reynolds, who are retiring from our Board of Directors at the conclusion of the Annual Meeting, and John T. Manning and Robert J. Marzec, both of whom retired from our Board effective as of our 2018 Annual Meeting of Shareholders. The Board has also determined that Christina M. Alvord, Frank G. Heard and Elizabeth M. Lilly, the New Director Candidates, are independent and have no material relationship with us. Our Board of Directors has determined that Joseph F. Puishys is not independent because he serves as our Chief Executive Officer and President.

Board Leadership Structure

Our Board of Directors separated the roles of Chair of the Board and Chief Executive Officer in 2011, and Mr. Aldrich has served as our Non-Executive Chair since 2011. In this capacity, Mr. Aldrich has chaired our annual meetings of shareholders, the meetings of our Board of Directors and executive sessions of our independent directors. The Non-Executive Chair of our Board, in consultation with our Chief Executive Officer, establishes the agenda for each meeting of our Board of Directors. The Non-Executive Chair also attends Committee meetings as an ad hoc member, and serves as the primary liaison between the senior management team and the Board. The Board determined that having a Non-Executive Chair would enable our Chief Executive Officer to focus his time and energy on development of strategy, operational improvements and leadership of the management and employee team. The Board and our Chief Executive Officer believe that this division of responsibilities has served the Board, the Company and our shareholders well.

New Director Candidates

On November 10, 2019, we signed a Cooperation Agreement with our shareholder Engaged Capital, after a series of discussions on the composition of the Board and other governance matters. Pursuant to the Cooperation Agreement, we agreed to the nomination of three new, independent directors to the Board at the Annual Meeting. The Board subsequently nominated Ms. Alvord, Mr. Heard and Ms. Lilly to the Board.

The New Director Candidates are not affiliated with Engaged Capital, and they have not, and would not, receive compensation or other payments from any third parties, including Engaged Capital, in exchange for their candidacy or their service on our Board. In addition, Engaged Capital has agreed that the New Director Candidates will not provide any non-public information regarding the Company to Engaged Capital and has further agreed not to seek any such information from the New Director Candidates during the term of the Cooperation Agreement.

We have agreed with Engaged Capital that the Board would appoint Ms. Alvord to the Nominating and Corporate Governance Committee, Mr. Heard to the Audit Committee and Ms. Lilly to the Compensation Committee upon their election to the Board. Furthermore, as long as Engaged Capital owns at least 3.5% of the Company’s then outstanding shares of common stock or the stock equivalent thereof (calculated as of the date of the Cooperation Agreement):

The Cooperation Agreement will expire on August 1, 2020, unless it is terminated earlier (the “Termination Date”). Until the Termination Date, Engaged Capital has committed to customary standstill restrictions relating to proxy contests and other activist campaigns, share purchases (up to 9.9%) and

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related matters. Until the Termination Date, Engaged Capital has agreed to vote all of its shares of the Company’s common stock at any annual or special meeting and any consent solicitation of the Company’s shareholders (1) in accordance with the Board’s recommendations for director elections and related matters; and (2) in accordance with the Board’s recommendations on all other proposals, provided, however, that in the event that Institutional Shareholder Services Inc. (“ISS”) recommends otherwise with respect to any proposals (other than the election or removal of directors), Engaged Capital is permitted to vote in accordance with ISS’s recommendation; provided, further, that Engaged Capital is permitted to vote in its sole discretion with respect to any proposals related to an extraordinary transaction such as a merger or sale of the Company.

The foregoing description of the Cooperation Agreement is not complete and is qualified in its entirety by reference to the Cooperation Agreement, a copy of which was filed as Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on November 12, 2019, which is incorporated herein by reference.

Criteria for Membership on Our Board of Directors

Director candidates should possess the highest personal and professional ethics, integrity and values; be committed to representing the long-term interests of our stakeholders; have an inquisitive and objective perspective, practical wisdom and mature judgment; and be willing to challenge management in a constructive manner. Our Board of Directors strives for membership that is diverse in gender, ethnicity, age, geographic location, and business skills and experience at policy-making levels. In addition, director candidates must be willing to devote sufficient time to carrying out their duties and responsibilities effectively, and should be committed to serving on our Board of Directors for an extended period of time.

Procedure for Evaluating Director Nominees

Our Nominating and Corporate Governance Committee’s procedure for reviewing the qualifications of all nominees for membership on our Board of Directors includes making a preliminary assessment of each proposed nominee, based upon resume and biographical information, willingness to serve and other background information, business experience and leadership skills. The Board believes that its membership should reflect a diversity of experience, skills, geography, gender and ethnicity. The Committee considers each of these factors when evaluating Board composition, and it considers these factors on an ongoing basis as it identifies and evaluates director candidates. All director candidates who continue in the process are then interviewed by members of our Nominating and Corporate Governance Committee and other current directors. Our Nominating and Corporate Governance Committee makes recommendations to our Board of Directors for inclusion in the slate of director nominees at a meeting of shareholders, or for appointment by our Board of Directors to fill a vacancy. Prior to recommending a director to stand for re-election for another term, our Nominating and Corporate Governance Committee applies its director candidate selection criteria, including a director’s past contributions to our Board of Directors, effectiveness as a director and desire to continue to serve as a director.

Board Refreshment

Our Company has had an active board refreshment program the past four years with planned retirements of long-termed directors.

From fiscal 2017 through fiscal 2019, we added four directors: Patricia K. Wagner, Lloyd E. Johnson, Herbert K. Parker and Mark A. Pompa. In addition, we are presenting three new director nominees for election to our Board at the 2019 Annual Meeting of Shareholders. If these director nominees are elected to our Board, seven of our ten directors will have less than five years of tenure on our Board.

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Retirement Policy

Our Board of Directors has established a policy that, unless otherwise approved by a majority of our directors, no individual may stand for election to our Board after his or her 72nd birthday.

Stock Ownership Guidelines for Non-Employee Directors

Our Board of Directors believes that non-employee directors should have a significant equity interest in Apogee and established voluntary stock ownership guidelines for directors in 2002. The guidelines encourage share ownership by our directors in an amount having a market value equal to three times the annual Board retainer to be achieved within five years of first being elected as a director. For fiscal 2019, the annual Board retainer was $60,000. In calculating share ownership of our non-employee directors, we include shares of restricted stock and restricted stock units issued pursuant to our Director Stock Plan, and phantom stock units issued pursuant to our Director Deferred Compensation Plan, but do not include unexercised stock options. Shares are valued based on the average closing price of our common stock for the most recently completed fiscal year. As of March 1, 2019, the last trading day of fiscal 2019, all of our non-employee directors exceeded our stock ownership guidelines, except for Mr. L. Johnson, who joined our Board on June 22, 2017, and Mr. Pompa, who joined our Board on October 2, 2018. Both Messrs. L. Johnson and Pompa are currently on pace to meet our guidelines within five years of election to our Board.

Board Meetings and 2018 Annual Meeting of Shareholders

During fiscal 2019, our Board of Directors met eleven times and our non-employee directors met in executive session without our Chief Executive Officer or any other members of management being present seven times. Each of our directors attended at least 75% of the regularly scheduled and special meetings of our Board of Directors and the Board committees on which he or she served that were held during the time he or she was a director during fiscal 2019.

All members of our Board of Directors are expected to attend our annual meeting of shareholders, and all the members of our Board of Directors who continued to serve on our Board after our 2018 Annual Meeting of Shareholders attended such meeting.

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Board Committee Responsibilities, Meetings and Membership

We currently have three standing Board Committees: Audit, Compensation, and Nominating and Corporate Governance. Each Committee operates under a written charter that is available on our website at www.apog.com by clicking on “Investors” and selecting “Governance” and then clicking on the applicable Board Committee.

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The table below provides fiscal 2019 membership and meeting information for each of our standing Board committees.

C = Committee Chair M = Committee Member

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Risk Oversight by Our Board of Directors

Our Board of Directors oversees our enterprise risk management processes, focusing on our business, strategic, financial, operational, information technology and overall enterprise risk. Our Board determined that oversight of our Company’s strategy and overall enterprise risk management program is more effective when performed by the full Board, utilizing the skills and experiences of all Board members. In addition, our Board of Directors executes its overall responsibility for risk management through its Committees, as follows:

Sustainability Focus

We have a company-wide commitment to sustainable business practices, focused on long-term profitable growth, while carefully stewarding the resources entrusted to us. Our commitment to sustainability is reflected in our Core Values which are the foundation of Apogee’s culture. Our Core Values are integrity, customer-focus, employee involvement and ownership, accountability, safe work environment, one team and respect for the individual.

Our commitment to sustainability begins with our people. We are continually focused on strengthening our team to ensure that we have the capabilities in place to consistently deliver for our customers. Apogee has an enterprise-wide talent management program in place to hire, train, and develop a diverse team of employees and leaders. We are also committed to our employees’ safety and wellness, with a robust workplace safety program, a comprehensive benefits package, and wellness initiatives to promote healthy lifestyles.

Our architectural products and services are key enablers to green building and sustainable design. We’ve long been at the forefront of developing innovative products and services that conserve resources and help architects and building owners achieve their sustainability goals. Our high-performance thermal framing systems, custom architectural glass coatings and other products help improve building energy efficiency, reduce greenhouse gas emissions, and increase security and comfort for building occupants.

Our commitment to sustainability also extends to our own operations as well. Through our company-wide Lean Enterprise initiative we are continually focused on eliminating waste and minimizing resource consumption. As a leader in our industry, we are committed to environmentally sustainable manufacturing practices and we have policies in place to comply with applicable environmental laws and regulations.

Finally, we strive to make a difference in the communities where we operate. Apogee and our business units have a long legacy of giving back to the communities where we do business through volunteerism, donations and financial support. We also work to strengthen the communities where we operate by investing in our business and creating good jobs.

Information related to our sustainability efforts is available on our website at www.apog.com by clicking “Sustainability.”

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Certain Relationships and Related Transactions

We have established written policies and procedures (the “Related Person Transaction Policy”) to assist us in reviewing transactions in excess of $120,000 involving our Company and our subsidiaries and Related Persons (“Related Persons Transactions”). A Related Person includes our Company’s directors, director nominees, executive officers and beneficial owners of 5% or more of our Company’s common stock and their respective Immediate Family Members (as defined in our Related Person Transaction Policy). Our Related Person Transaction Policy supplements our Code of Business Ethics and Conduct Conflict of Interest Policy, which applies to all of our employees and directors.

Our Related Person Transaction Policy requires any Related Person Transaction to be promptly reported to the Chair of our Nominating and Corporate Governance Committee. In approving, ratifying or rejecting a Related Person Transaction, our Nominating and Corporate Governance Committee will consider such information as it deems important to determine if the Related Person Transaction is fair to our Company. Our Conflict of Interest Policy requires our employees and directors to report to our General Counsel any potential conflict of interest situations involving any employee or director, or their Immediate Family Members. During fiscal 2019, there were no Related Party Transactions involving a Related Person, as defined in the policy.

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NON-EMPLOYEE DIRECTOR COMPENSATION

Non-Employee Director Compensation Arrangements During Fiscal 2019

We structure director compensation to attract and retain qualified non-employee directors and to further align the interests of directors with the interests of shareholders.

Our Board of Directors approves the compensation for members of our Board of Directors and Board committees based on the recommendations of our Nominating and Corporate Governance Committee. We target compensation for service on our Board of Directors and Board committees generally at the 50^th percentile for board service at companies in our peer group of companies, using the same peer group used for executive compensation purposes and described under the heading “Peer Group” on page 48. Generally, our Nominating and Corporate Governance Committee reviews and discusses the compensation data and analysis provided by management with reference to a third-party compensation database. Our Chief Executive Officer participates in the discussions on compensation for members of our Board of Directors. Directors who are employees receive no additional compensation for serving on our Board of Directors.

The following table describes the compensation arrangements with our non-employee directors as of the end of fiscal 2019.

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Restricted Stock Awards and Restricted Stock Unit Awards

Restricted stock awards to non-employee directors are issued pursuant to our 2009 Director Stock Plan. Each non-employee director receives a restricted stock award on the date he or she is first elected to our Board and annually on the date of our annual meeting of shareholders if his or her term continues after such meeting. The dollar value of the restricted stock award is determined by our Board of Directors, after recommendation by our Nominating and Corporate Governance Committee and in consideration of various factors, including market data and trends. We target the equity-based compensation received by non-employee directors at approximately the 50^th percentile of our peer group of companies. Generally, our Board of Directors determines the dollar value of the annual restricted stock awards in June of each year and prorates the dollar value of the restricted stock award for any director elected or appointed to our Board at a time other than an annual meeting of shareholders. Restricted stock awards vest in three equal annual installments over a three-year vesting period. Upon issuance of the restricted stock, each holder is entitled to the rights of a shareholder, including the right to vote the shares of restricted stock and receive any cash dividends and any other distributions.

Non-employee directors have the option to defer receipt of all or a portion of any restricted stock award and will receive a restricted stock unit award for that portion of the restricted stock award deferred. Restricted stock unit awards are also issued pursuant to our 2009 Director Stock Plan. Each non-employee director electing to receive a restricted stock unit award in lieu of a restricted stock award receives a credit of shares of our common stock in an amount equal to the number of shares he or she has elected to defer. The account is also credited, as of the crediting date, with an amount equal to the dividend paid on one share of our common stock multiplied by the number of shares credited to each account. Non-employee directors receiving restricted stock unit awards may elect to receive the amounts credited to their account at a fixed date, at age 70, or following death or retirement from our Board of Directors. The restricted stock unit awards and related accumulated dividends are paid out in the form of shares of our common stock (plus cash in lieu of fractional shares) either in a lump sum or in installments, at the participating director’s election. This is an unfunded book-entry, “phantom stock unit” plan, as no trust or other vehicle has been established to hold any shares of our common stock.

Director Deferred Compensation Plan

Our Director Deferred Compensation Plan was adopted by our Board of Directors to encourage our non-employee directors to increase their ownership of shares of our common stock, thereby aligning their interests in the long-term success of Apogee with that of our other shareholders. Under the plan, participants may elect to defer all or a portion of their annual cash retainer into deferred stock accounts. There is no Company match on amounts deferred by our non-employee directors under such plan. Each participating director receives a credit of shares of our common stock in an amount equal to the amount of annual cash retainer deferred divided by the fair market value of one share of our common stock as of the crediting date. These accounts also are credited, as of the crediting date, with an amount equal to the dividend paid on one share of our common stock multiplied by the number of shares credited to each account. Participating directors may elect to receive the amounts credited to their accounts at a fixed date, at age 70, or following death or retirement from our Board of Directors. The deferred amounts are paid out in the form of shares of our common stock (plus cash in lieu of fractional shares) either in a lump sum or in installments, at the participating director’s election. This plan is an unfunded, book-entry, “phantom stock unit” plan, as no trust or other vehicle has been established to hold any shares of our common stock.

Charitable Matching Contributions Program for Non-Employee Directors

Under our Charitable Matching Contributions Program for Non-Employee Directors, we match cash or publicly-traded stock contributions made by our non-employee directors to charitable organizations that are exempt from federal income tax up to a maximum aggregate amount of $2,000 per eligible non-employee director per calendar year.

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Fiscal 2019 Non-Employee Director Compensation Table

The following table shows the compensation paid to our non-employee directors for fiscal 2019.

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EXECUTIVE COMPENSATION

Compensation Committee Report

Our Compensation Committee has reviewed and discussed the following Compensation Discussion and Analysis section with management and the Committee’s independent compensation consultant. Based on its review and discussions with management, our Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in the Company’s 2019 Proxy Statement and Annual Report on Form 10-K for the fiscal year ended March 2, 2019.

Compensation Committee of the

Board of Directors of Apogee

Jerome L. Davis, Chair

Sara L. Hays

Donald A. Nolan

Patricia K. Wagner

Compensation Discussion and Analysis

This Compensation Discussion and Analysis describes Apogee’s executive compensation program for fiscal 2019, and certain elements of the fiscal 2020 program. In particular, this section explains how our Compensation Committee (the “Committee”) made decisions related to compensation for our executives, including our Named Executive Officers, for fiscal 2019.

Our Named Executive Officers for fiscal 2019 were:

Messrs. Porter, Jewell and G. Johnson and Ms. Beithon are collectively referred to as our “Other Named Executive Officers” in this Compensation Discussion and Analysis section.

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Executive Summary

About Apogee. Our Company is a world leader in the design and development of value-added glass solutions for enclosing commercial buildings and value-added glass and acrylic for picture framing and displays. We have four segments, with manufacturing and fabrication located in the U.S., Canada and Brazil. For fiscal 2019, we had net sales of approximately $1.4 billion.

Our Strategy

Our strategies are to diversify net sales streams and structure the business to provide more stable net sales growth and profit generation over a commercial construction economic cycle. Our strategies are focused on diversification of end-sectors served through growth from new geographies, new products and new markets, while improving margins through productivity, project selection initiatives and rigorous cost management.

In an effort to reduce our exposure to the cyclical nature of the large-building segment of the commercial construction industry, we have expanded our focus to include mid-sized projects in the Architectural Glass segment and grow our geographic footprint through organic growth and acquisitions in our Architectural Framing Systems segment. We continue to focus on the retrofit and renovation of windows and curtainwall as we have seen increased interest from property owners in upgrading building facades and improving energy efficiency.

In the Architectural Services segment, our emphasis is on improving margins through focused commercial construction project selection, while continuing to deliver long-term organic growth through geographic expansion in line with the segment’s available project management capacity.

Within the Large-Scale Optical segment, our strategy is to grow in newer display markets that desire the value-added properties that our glass and acrylic products provide, while continuing to convert the domestic and international custom picture framing and fine art markets from clear uncoated glass and acrylic products to value-added products that protect art from ultra-violet damage and minimize reflection.

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Our Fiscal 2019 Performance. Our Company achieved record net sales and generated significant operating cash flow. During fiscal 2019, we advanced our strategies to diversify net sales streams and position our Company to deliver shareholder value throughout the commercial construction economic cycle.

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During fiscal 2019, we made considerable progress on our strategies to better position our Company over the commercial construction cycle and took steps to improve our operations for future years.

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Creating Shareholder Value. The chart below compares our Company’s cumulative TSR to our compensation peer group for fiscal 2019 and the Russell 2000 Index for the past one, three and five-year periods

(1) CAGR is defined as compound annual growth rate; based on adjusted EPS.

(2) Adjusted EPS, excluding amortization of short-lived acquired intangibles, acquisition-related costs and the income tax impact on such adjustments, totaling $0.06 per share in the aggregate; GAAP EPS was $2.97.

(3) Adjusted EPS, excluding amortization of short-lived acquired intangibles, acquisition-related costs, restructuring-related costs and the income tax impact on such adjustments totaling $0.48 per share in the aggregate; GAAP EPS was $2.76.

See Exhibit A for a reconciliation of GAAP EPS and adjusted EPS.

(4) Adjusted EPS, excluding amortization of short-lived acquired intangibles, project-related charges, impairment charge and the income tax impact on such adjustments totaling $1.33 per share in the aggregate; GAAP EPS was $1.63.

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Executive Compensation Philosophy and Practices. Our compensation programs are designed to attract, motivate and retain executive talent to achieve success in both the short- and long-term for our Company; pay for sustainable performance in an ever-changing environment; and align the interests of our executive officers with our shareholders. We continue to refine our executive compensation program to reflect changes in our business strategy and evolving executive compensation practices.

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The Role of Shareholder Vote on Say on Pay Proposal. Our Company provides our shareholders with the opportunity to cast an advisory vote on our Say on Pay Proposal annually. At our Company’s annual meeting of shareholders held on June 28, 2018, 95% of the votes cast on the Say on Pay Proposal were voted in favor of ratification of the proposal. The Committee did not make any changes to its programs in response to this vote. The Committee will continue to take into account the outcome of our Company’s Say on Pay Proposal when making future compensation decisions.

Our Executive Compensation Program. Total compensation includes a mix of short-term and long-term compensation and fixed and performance-based compensation.

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Target Compensation Mix. The charts below illustrate the target mix of short-term and long-term incentives, and fixed and performance-based compensation, for our Chief Executive Officer and Other Named Executive Officers. This information is used by the Committee as a guideline in making compensation awards for our Named Executive Officers.

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Highlights of Fiscal 2019 Compensation Actions. The following highlights the Committee’s key compensation decisions for fiscal 2019. These decisions were made after reviewing compensation data provided by the Committee’s independent compensation consultant.

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Overview of Primary Compensation Elements

The table below provides an overview of the three primary compensation elements used in our executive compensation program.

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Compensation Process

Our compensation program is evaluated annually taking into consideration changes to our business strategy, the economy and our competitive marketplace, as well as evolving executive compensation practices.

During the first quarter of each fiscal year, the performance of each of our Named Executive Officers is evaluated based on a subjective assessment of (i) his or her executive leadership; and (ii) achievement of agreed-upon individual business objectives for the just-completed fiscal year. The annual performance evaluation of our Chief Executive Officer is administered by our Nominating and Corporate Governance Committee, with all non-employee directors participating in the performance evaluation, and the results of the Chief Executive Officer’s annual performance evaluation are reviewed by the Committee and our full Board. Our Chief Executive Officer conducts or participates in the annual performance evaluation of our Other Named Executive Officers and reviews the results with members of the Committee.

In establishing the elements and levels of compensation for a fiscal year, the Committee considers the annual performance evaluations of our Named Executive Officers and reviews its compensation consultant’s independent analyses of compensation based on comparable positions, using both published survey sources and company peer group data to determine our competitive positioning relative to the market. Our Chief Executive Officer makes recommendations to the Committee on compensation for our Other Named Executive Officers, but does not participate in the determination of his own compensation.

The Committee continuously monitors our compensation programs and annually reviews a compensation “tally sheet,” which lists total direct compensation (base salary, annual cash incentive compensation, and long-term incentive awards) perquisites, other elements of executive compensation, broad-based employee benefits and wealth accumulation through Company equity and retirement plans for our Named Executive Officers; however, the compensation tally sheets are not used to make actual pay decisions. The Committee assesses historical pay and performance to ensure continued alignment of our compensation programs. However, the Committee generally does not consider compensation earned in prior years in establishing the elements and levels of compensation for a Named Executive Officer in the current fiscal year.

Consulting Assistance, Peer Group and Competitive Market

Compensation Consultant Independence. In fiscal 2019, the Committee retained the services of Pearl Meyer to assist with the review of overall compensation levels for our executive officers. Pearl Meyer reports directly to the Committee, and the Committee can replace Pearl Meyer or hire additional consultants at any time. During fiscal 2019, Pearl Meyer attended five Committee meetings in person or by telephone, including executive sessions, as requested, and consulted with the Chair of the Committee between meetings.

As required under the Dodd-Frank Act, the Committee has analyzed whether the work of Pearl Meyer as its compensation consultant raises any conflict of interest, taking into consideration the following factors under this act: (i) Pearl Meyer does not provide any other services to our Company; (ii) the amount of fees from our Company paid to Pearl Meyer is less than 1% of Pearl Meyer’s total revenue; (iii) Pearl Meyer’s policies and procedures were designed to ensure independence; (iv) Pearl Meyer does not have any business or personal relationship with any executive officer of our Company or any member of the Committee; and (v) neither Pearl Meyer, nor any member of its consulting team, owns any stock of our Company. The Committee has determined, based on its analysis of the above factors, that Pearl Meyer is independent of our Company and the work of Pearl Meyer (and the individual compensation advisors employed by Pearl Meyer) as compensation consultant to the Committee has not created any conflict of interest. The Committee will continue to monitor the independence of its compensation consultant on an annual basis.

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Peer Group. The selection criteria identified for determining and reviewing our Company’s peer group generally include:

Compensation actions taken during fiscal 2019, including the determination of fiscal 2019 base salaries, annual cash incentive targets, restricted stock awards and the fiscal 2019 – 2020 performance-based awards, were based on the 15-company peer group listed below.

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Competitive Market. The Committee relies on its independent compensation consultant to help define the appropriate competitive market using a combination of the peer group companies and compensation surveys that contain market compensation information for similarly-sized organizations. The information on the competitive market is used by the Committee:

Fiscal 2019 Individual Compensation Actions

Fiscal 2019 Annual Performance Accomplishments. The performance during fiscal 2019 of each of our Named Executive Officers was evaluated based on a subjective assessment of (i) his or her executive leadership; and (ii) achievement against his or her individual business objectives for fiscal 2019. Below is certain information regarding each Named Executive Officer’s individual business objectives for fiscal 2019 and accomplishments against those objectives.

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Adjusted diluted earnings per share and adjusted operating margin are non-GAAP financial metrics that are reconciled with the most directly comparable GAAP financial metrics in Appendix E.

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Base Salary. Base salary reflects a fixed portion of the overall compensation package and is the base amount from which certain other compensation elements are determined. In making salary adjustments, the Committee considers the executive’s base salary relative to the market, our compensation philosophy and other factors, such as individual performance against business plans, leadership, initiatives, experience, knowledge and job criticality. After discussing these items, the Committee decided it was appropriate to provide merit increases to all of our Named Executive Officers for fiscal 2020, except Mr. Puishys.

Below is information on the base salaries of our Named Executive Officers for fiscal 2019 and fiscal 2020.

Annual Cash Incentive Compensation. Annual cash incentive awards are designed to reward short-term performance results. These results are based on achievement relative to objective financial goals set forth in the annual operating plan approved by our Board of Directors. For fiscal 2019, annual cash incentive awards to our Named Executive Officers were made pursuant to our shareholder-approved Apogee Enterprises, Inc. Executive Management Incentive Plan (the “Executive MIP”), as described below. The Executive MIP was approved by shareholders in fiscal 2016.

Executive MIP Our Executive MIP was designed to be an annual bonus “pool” plan. Each fiscal year, the Committee establishes a bonus pool equal to a percentage of one or more performance factors from a list of approved factors set forth in our Executive MIP. If the bonus pool generated for any fiscal year is not sufficient to fund all potential payouts to participants under the plan, the awards earned by each participant will be reduced proportionately based on each participant’s percent of the pool.

Each fiscal year, the Committee selects the executives of our Company who will participate in our executive management incentive plan for that year and assigns a percentage of the bonus pool to each participating executive, with the total percentage not to exceed 100% of the bonus pool for any given fiscal year. The percentage of the bonus pool assigned to each participating executive establishes the maximum annual cash incentive award payout for that individual participant for the current fiscal year; however, no one individual payout under the Executive MIP can exceed $3,000,000 in any given fiscal year.

The actual annual cash incentive awards to be paid to participants after the annual bonus pool has been established may be adjusted downward based on the achievement of one or more additional predetermined, objective performance goals based on the annual operating plan approved by our Board of Directors. At least one of the additional predetermined, objective performance goals must be met at the threshold level in order for any annual cash incentive to be paid to an executive. In addition, if our Company is not profitable, no annual cash incentives will be paid even if the other goals are at or above threshold.

Generally, if the threshold performance level for all performance goals is achieved, 50% or less of the target award will be earned; if target performance level for all performance goals is achieved, 100% of the target award will be earned; and if maximum performance level for all performance goals is achieved, 200% of the target award will be earned. If the threshold performance level for only one performance goal is achieved and the threshold performance is not achieved for any of the other performance goals, less than 50% of the target award will be earned based on the weighting allocated to that specific

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performance goal. For any performance between these levels, awards will be interpolated. The Committee has the discretion to further reduce payouts under our Executive MIP, as appropriate.

Fiscal 2019 Annual Cash Incentive Payouts. The performance factor used to establish the fiscal 2019 bonus pool under our Executive MIP was 5% of Apogee’s operating income. In fiscal 2019, we had operating income of $67,284,000, generating a bonus pool of $3,364,200.

The tables below set forth certain information with respect to the fiscal 2019 annual cash incentive award payout ranges as a percentage of fiscal 2019 salary for our Named Executive Officers.

The following table outlines the performance metrics, weighting and performance levels and actual performance achievement for the fiscal 2019 performance cycle.