EXHIBIT 10.4

APOGEE ENTERPRISES, INC.

DEFERRED COMPENSATION PLAN

FOR NON-EMPLOYEE DIRECTORS

(2005 Restatement)

(Amended and Restated Effective as of January 1, 2005)

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

APOGEE ENTERPRISES, INC.

DEFERRED COMPENSATION PLAN

FOR NON-EMPLOYEE DIRECTORS

(2005 Restatement)

TABLE OF CONTENTS

 

                      Page SECTION 1.    ESTABLISHMENT AND PURPOSE    1    1.1.
   Establishment       1.2.    Purpose    SECTION 2.    DEFINITIONS    1    2.1.
   Definitions          2.1.1.      Board          2.1.2.      Committee      
   2.1.3.      Common Stock          2.1.4.      Company          2.1.5.     
Deferral Election Form          2.1.6.      Deferred Payment Form         
2.1.7.      Deferred Stock Account          2.1.8.      Election Amount         
2.1.9.      Eligible Director          2.1.10.      Fair Market Value         
2.1.11.      Fees          2.1.12.      Incentive Amount          2.1.13.     
Maturity Date          2.1.14.      Non-Employee Director          2.1.15.     
Participant          2.1.16.      Participating Director          2.1.17.     
Plan          2.1.18.      Plan Year          2.1.19.      Retainer         
2.1.20.      Stock Deferral Election          2.1.21.      Termination from
Board       2.2.    Gender and Number    SECTION 3.    ELIGIBILITY FOR
PARTICIPATION    3

 

-i-

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

SECTION 4.    ELECTION TO DEFER RECEIPT OF RETAINER AND FEES    3    4.1.   
Election to Receive Common Stock at a Later Date in Lieu of Cash       4.2.   
Credits to Deferred Stock Account       4.3.    Manner of Making Deferral
Election       4.4.    Dividend Credit       4.5.    Fair Market Value      
4.6.    Termination of Service as a Director    SECTION 5.    SHARES AVAILABLE
FOR ISSUANCE    5    5.1.    Maximum Number of Shares Available       5.2.   
Adjustments to Shares    SECTION 6.    DEFERRAL PAYMENT AND ISSUANCE OF COMMON
STOCK    5    6.1.    Maturity of Deferred Stock Account       6.2.    Form of
Deferral Payment       6.3.    Payment of Deferred Stock Accounts in a Lump Sum
      6.4.    Payment of Deferred Stock Accounts in Installments       6.5.   
Payment of Deferred Stock Accounts – Change of Control    SECTION 7.   
DESIGNATION OF BENEFICIARIES    6    7.1.    Right to Designate       7.2.   
Failure of Designation       7.3.    Disclaimers by Beneficiaries       7.4.   
Definitions       7.5.    Special Rules       7.6.    No Spousal Rights      
7.7.    Death Prior to Full Distribution       7.8.    Facility of Payment   
SECTION 8.    NONTRANSFERABILITY    9 SECTION 9.    LIMITATION ON RIGHTS OF
ELIGIBLE DIRECTORS AND PARTICIPATING DIRECTORS    9    9.1.    Service as a
Director       9.2.    Nonexclusivity of the Plan    SECTION 10.    PLAN
AMENDMENT, MODIFICATION AND TERMINATION    10 SECTION 11.    PARTICIPANTS ARE
GENERAL CREDITORS OF THE COMPANY    10

 

-ii-

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

SECTION 12.    CHANGE OF CONTROL    11    12.1.      Change of Control      
12.2.      Continuing Director    SECTION 13.    CLAIMS PROCEDURE    12    13.1.
     Original Claim       13.2.      Claims Review Procedure       13.3.     
General Rules    SECTION 14.    MISCELLANEOUS    14    14.1.      Securities Law
and Other Restrictions       14.2.      Governing Law       14.3.      ERISA
Administrator       14.4.      Service of Process       14.5.     
Administrative Determinations       14.6.      Rules and Regulations       14.7.
     Errors in Computations       14.8.      ERISA Status       14.9.      IRC
Status   

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

APOGEE ENTERPRISES, INC.

DEFERRED COMPENSATION PLAN

FOR NON-EMPLOYEE DIRECTORS

(2005 Restatement)

SECTION 1

ESTABLISHMENT AND PURPOSE

1.1. Establishment. Apogee Enterprises, Inc., a Minnesota corporation, together
with any and all subsidiaries established effective as of January 31, 1998, a
deferred compensation plan for the non-employee members of its Board which shall
be known as the Deferred Compensation Plan for Non-Employee Directors
(hereinafter called the “Plan”). Apogee reserved to itself, by action of the
Compensation Committee of the Board of Directors, to amend this Plan and has
done so on prior occasions. By the adoption of this 2005 Restatement, Apogee
does hereby completely amend and restate the terms of the Plan in this Plan
Statement.

1.2. Purpose. The purpose of this Plan is to provide a means whereby amounts
payable by the Company to its Non-Employee Directors for services as a member of
the Company’s Board may be deferred to some future period. It is also the
purpose of this Plan to motivate such Non-Employee Directors to continue to make
contributions to the growth and profits of the Company and to increase their
ownership of shares of Common Stock, and thereby align their interests in the
long-term success of the Company with that of the other shareholders. This will
be accomplished by allowing each Participating Director to elect voluntarily to
receive all or a portion of his or her retainer and fees in the form of shares
of deferred Common Stock pursuant to an irrevocable election made under this
Plan.

SECTION 2

DEFINITIONS

2.1. Definitions. When the following terms are used herein with initial capital
letters, they shall have the following meanings:

2.1.1. Board — the Board of Directors of the Company.

2.1.2. Committee — the Compensation Committee of the Board, which Committee is
composed solely of two or more Non-Employee Directors (as defined in Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended).

2.1.3. Common Stock — the common stock, par value $0.33 1/3 per share, of Apogee
Enterprises, Inc.

2.1.4. Company — Apogee Enterprises, Inc., a Minnesota corporation, together
with all its subsidiaries.

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

2.1.5. Deferral Election Form — the irrevocable election to defer the receipt of
Fees and Retainer as provided for in Section 4.3 of this Plan.

2.1.6. Deferred Payment Form — the irrevocable payment election of the
Participant’s Deferred Stock Account.

2.1.7. Deferred Stock Account — the account established pursuant to Section 4.2
of this Plan.

2.1.8. Election Amount — the amount of the Retainer and Fees the Participating
Director elects to defer as set forth in Section 4.1 of this Plan.

2.1.9. Eligible Director — any Non-Employee Director of the Company as set forth
in Section 3 of this Plan.

2.1.10. Fair Market Value — the value as set forth in Section 4.5 of this Plan.

2.1.11. Fees — the amount payable to a Director for attendance at Board meetings
or meetings of committees of the Board.

2.1.12. Incentive Amount — 10% of the Election Amount that is designated an
added benefit given to Participating Directors from the Company as set forth in
Section 4.1 of this Plan.

2.1.13. Maturity Date — the date set forth in Section 6.1 of this Plan.

2.1.14. Non-Employee Director — an individual who is a member of the Board but
who is not an employee of the Company or any of its subsidiaries.

2.1.15. Participant — a person who is a Non-Employee Director who has elected to
defer such fees and retainers under this Plan, or a person who, prior to the
time of Termination from Board had elected to defer such compensation under this
Plan and who retains, or whose beneficiaries retain, benefits under the Plan and
in accordance with its terms.

2.1.16. Participating Director — has the meaning set forth in Section 4.1.

2.1.17. Plan — this Deferred Compensation Plan, as it may be amended from time
to time.

2.1.18. Plan Year — the 12-month period beginning January 1 and ending
December 31. There was a short Plan Year from July 1-December 31, 2005. Plan
Years prior to July 1, 2005, began on July 1 and ended June 30 of each year.

2.1.19. Retainer — the annual amount payable to a Director for services rendered
as a Director.

2.1.20. Stock Deferral Election — the election made pursuant to Section 4.1 of
this Plan.

 

-2-

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

2.1.21. Termination from Board — a Participant’s membership on the Board
terminates under any circumstances. However when the term “Termination from
Board” is used in the Plan Statement in connection with Post 2004 Account, it
shall be construed to have the same meaning consistent with the term “Separation
from Service” as used in section 409A of the Code.

2.2. Gender and Number. Except when otherwise indicated by the context, any
masculine terminology when used in the Plan shall also include the feminine
gender, and the definition of any term herein in the singular shall also include
the plural.

SECTION 3

ELIGIBILITY FOR PARTICIPATION

Any Non-Employee Director of the Company shall be eligible to participate in
this Plan (an “Eligible Director”). In the event a Participant no longer meets
the requirements for participation in this Plan, the Participant shall become an
inactive Participant, retaining all the rights described under this Plan, except
the right to make any further deferrals, until the time that the Participant
again becomes an active Participant or receives a complete distribution of the
Participant’s Deferred Stock Account.

SECTION 4

ELECTION TO DEFER RECEIPT OF RETAINER AND FEES

4.1. Election to Receive Common Stock at a Later Date in Lieu of Cash. On forms
provided by the Company, each Eligible Director who decides to participate may
irrevocably elect to defer receipt of cash equal to 25%, 50%, 75% or 100% of the
sum of the annual Retainer and any Fees. The amounts to be deferred will be in
the form of a Common Stock credit to the Participating Director’s Deferred Stock
Account, as set forth in Section 4.2 hereof, for the amount of the Retainer and
Fees the Participating Director elects to defer plus an amount equal to 10% of
the Election Amount designated as an incentive benefit given to Participating
Directors from the Company. The Stock Deferral Election shall be made pursuant
to Section 4.3. Any Stock Deferral Election may only be amended or revoked for a
subsequent Plan Year, by completing a new Deferral Election Form and filing it
with the Company prior to the beginning of such Plan Year as provided in
Section 4.3.

4.2. Credits to Deferred Stock Account. Credits to each Participant’s Deferred
Stock Account shall be made quarterly as of the last business day of each
calendar quarter. The amount credited for each quarter shall include the Fees
earned by the Participating Director for meetings attended during the calendar
quarter and 25% of the amount of the annual Retainer for the applicable Plan
Year for which the Participating Director chose to defer receipt of cash, plus
the Incentive Amount described in Section 4.1. The credit to the Deferred Stock
Account shall be in the form of stock units in a number equal to the number of
shares of Common Stock

 

-3-

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

having a Fair Market Value, as defined in Section 4.5, equal to the amount of
the Retainer and Fees so elected for deferral for the applicable quarter plus
the Incentive Amount. Amounts credited to the Deferred Stock Accounts shall be
rounded to the nearest one-hundredth share. In the event that a Participating
Director elects to defer less than 100% of the Retainer and Fees in shares of
Common Stock, he shall receive the balance of the payment in cash.

4.3. Manner of Making Deferral Election. A Participating Director may elect to
defer payment of the Retainer and payment of Fees pursuant to this Plan by
filing, at any time prior to the beginning of a Plan Year (or by such earlier
date as the Administrative Committee shall determine), an irrevocable election
with the Company on a form provided for that purpose, except that any person who
is first elected to the Board after the beginning of a Plan Year may make a
Stock Deferral Election for that Plan Year within thirty (30) days of becoming
eligible to participate in this Plan. The Deferral Election Form shall specify
an amount to be deferred expressed as a percentage of the Participating
Director’s Retainer and Fees. In all circumstances, the first credit to a
Participant’s Deferred Stock Account will only include the Retainer and Fees for
services performed after the effective date of the Deferral Election Form.

4.4. Dividend Credit. Each time a cash dividend is paid on the Common Stock of
the Company, the Participating Director shall receive a credit of stock units to
Participating Director’s Deferred Stock Account as of the last business day of
the calendar quarter in which the dividend was paid. The number of stock units
credited shall be the number equal to that number of shares of Common Stock
(rounded to the nearest one-hundredth of a share) having a Fair Market Value, as
defined in Section 4.5, on the last business day of the applicable calendar
quarter equal to the amount of the dividend that would have been payable on the
number of shares of Common Stock equal to the number of stock units credited to
the Participating Director’s Deferred Stock Account on the dividend record date.

4.5. Fair Market Value. For purposes of converting dollar amounts into shares of
Common Stock, the Fair Market Value of each share of Common Stock shall be equal
to the closing price of one share of the Common Stock on the Nasdaq Stock Market
(or other exchange on which the shares of Common Stock are then listed and
primarily traded) on the applicable crediting date or payment date.

4.6. Termination of Service as a Director. If a Participating Director leaves
the Board before the conclusion of any calendar quarter, the Participating
Director will be paid the quarterly installment of the Retainer and Fees
entirely in cash, notwithstanding that a Stock Deferral Election made by such
Participating Director is on file with the Company. The date of termination of a
Participating Director’s service as a Director of the Company will be deemed to
be the date of termination recorded on the personnel or other records of the
Company.

 

-4-

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

SECTION 5

SHARES AVAILABLE FOR ISSUANCE

5.1. Maximum Number of Shares Available. The maximum number of shares of Common
Stock that will be available for issuance under this Plan will be 200,000
shares, subject to any adjustments made in accordance with the provisions of
Section 5.2. The shares of Common Stock available for issuance under this Plan
shall be authorized but unissued shares.

5.2. Adjustments to Shares. In the event of any reorganization, merger,
consolidation, recapitalization, liquidation, reclassification, stock dividend,
stock split, combination of shares, rights offering, divestiture or
extraordinary dividend, an appropriate adjustment will be made in the number
and/or kind of securities available for issuance under this Plan to prevent
either the dilution or the enlargement of the rights of the Eligible Directors
and Participating Directors.

SECTION 6

DEFERRAL PAYMENT AND ISSUANCE OF COMMON STOCK

6.1. Maturity of Deferred Stock Account. A Participant’s account shall become
payable to (or with respect to) a Participant upon the earliest of, or upon the
occurrence of, one of the following events (the “Maturity Date”), as elected by
the Participant in the Deferral Election Form:

 

  (a) The Participant’s Termination from Board,

 

  (b) A date selected by the Participant,

 

  (c) The Participant reaches seventy (70) years of age, or

 

  (d) The Participant’s death.

6.2. Form of Deferral Payment. At the time of making the Stock Deferral
Election, each Participating Director shall also complete a deferral payment
election specifying one of the payment options described in Sections 6.3 and
6.4, and an election pursuant to Section 6.1 for the Maturity Date. The deferral
payment election shall be irrevocable as to all amounts credited to the
Participating Director’s Deferred Stock Account. The Participating Director may
change the deferral payment election by completing a Deferred Payment Form and
filing it with the Company, such change will only apply to deferrals credited in
a subsequent Plan Year.

6.3. Payment of Deferred Stock Accounts in a Lump Sum. Unless a Participating
Director elects to receive payment of the Participating Director’s Deferred
Stock Account in installments as described in Section 6.4, credits to a
Participating Director’s Deferred Stock Account shall be payable in full on the
first business day of the calendar year following the Maturity Date. If the
provisions of Section 7 become applicable and a Participating Director’s
designated beneficiary or beneficiaries are entitled to receive payment, such
distributions shall,

 

-5-

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

in all cases, be made in a lump sum in accordance with this Section and not
Section 6.4 of this Plan. All payments shall be made in shares of Common Stock,
with one share of Common Stock issued for each stock unit credited to the
Participating Director’s Deferred Stock Account, plus cash in lieu of any
fractional share.

6.4. Payment of Deferred Stock Accounts in Installments. A Participating
Director may elect to have the Participating Director’s Deferred Stock Account
paid in annual installments following the Maturity Date. All payments shall be
made in shares of Common Stock, with one share of Common Stock issued for each
stock unit credited to the Participating Director’s Deferred Stock Account, plus
cash in lieu of any fractional share. All installment payments shall be made
annually beginning on the first business day of the calendar year following the
Maturity Date, with subsequent installments paid on the first business day of
each subsequent calendar year. The amount of each installment payment shall be
computed as the number of stock units credited to the Participating Director’s
Deferred Stock Account on the relevant installment payment date, multiplied by a
fraction, the numerator of which is one and the denominator of which is the
total number of installments elected (not to exceed 10) minus the number of
installments previously paid. Amounts paid prior to the final installment
payment shall be rounded to the nearest whole number of shares; the final
installment payment shall be for the whole number of stock units then credited
to the Participating Director’s Deferred Stock Account, together with cash in
lieu of any fractional share.

6.5. Payment of Deferred Stock Accounts – Change of Control. Notwithstanding
Sections 6.3 and 6.4, in the event of a Change of Control (as defined in
Section 12), credits to a Participating Director’s Deferred Stock Account
immediately prior to the effective time of the transaction constituting the
Change of Control shall be paid in full to the Participating Director or the
Participating Director’s beneficiary or estate, as the case may be, either in
whole shares of Common Stock (together with cash in lieu of a fractional share)
or, if the holders of Common Stock generally are to receive other consideration
in such Change of Control transaction, in the consideration per share of Common
Stock to be received by such holders of Common Stock, in either case, on the
business day immediately after the effective date of the transaction.

SECTION 7

DESIGNATION OF BENEFICIARIES

7.1. Right to Designate. Each Participant may designate, upon forms to be
furnished by and filed with the Plan Administrator, one or more primary
Beneficiaries or alternative Beneficiaries to receive all or a specified part of
such Participant’s Deferred Stock Account in the event of such Participant’s
death. The Participant may change or revoke any such designation from time to
time without notice to or consent from any Beneficiary. No such designation,
change or revocation shall be effective unless executed by the Participant and
received by the Company during the Participant’s lifetime.

7.2. Failure of Designation. If a Participant:

 

  (a) fails to designate a Beneficiary,

 

-6-

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

  (b) designates a Beneficiary and thereafter revokes such designation without
naming another Beneficiary, or

 

  (c) designates one or more Beneficiaries and all such Beneficiaries so
designated fail to survive the Participant,

such Participant’s Deferred Stock Account, or the part thereof as to which such
Participant’s designation fails, as the case may be, shall be payable to the
first class of the following classes of automatic Beneficiaries with a member
surviving the Participant and (except in the case of surviving issue) in equal
shares if there is more than one member in such class surviving the Participant:

Participant’s surviving spouse

Participant’s surviving issue per stirpes and not per capita

Participant’s surviving parents

Participant’s surviving brothers and sisters

Representative of Participant’s estate.

7.3. Disclaimers by Beneficiaries. A Beneficiary entitled to a distribution of
all or a portion of a deceased Participant’s Deferred Stock Account may disclaim
an interest therein subject to the following requirements. To be eligible to
disclaim, a Beneficiary must be a natural person, must not have received a
distribution of all or any portion of the Deferred Stock Account at the time
such disclaimer is executed and delivered, and must have attained at least age
twenty-one (21) years as of the date of the Participant’s death. Any disclaimer
must be in writing and must be executed personally by the Beneficiary before a
notary public. A disclaimer shall state that the Beneficiary’s entire interest
in the undistributed Deferred Stock Account is disclaimed or shall specify what
portion thereof is disclaimed. To be effective, duplicate original executed
copies of the disclaimer must be both executed and actually delivered to the
Company after the date of the Participant’s death but not later than one hundred
eighty (180) days after the date of the Participant’s death. A disclaimer shall
be irrevocable when delivered to the Company. A disclaimer shall be considered
to be delivered to the Company only when actually received by the Company. The
Company shall be the sole judge of the content, interpretation and validity of a
purported disclaimer. Upon the filing of a valid disclaimer, the Beneficiary
shall be considered not to have survived the Participant as to the interest
disclaimed. A disclaimer by a Beneficiary shall not be considered to be a
transfer of an interest in violation of the provisions of Section 8 and shall
not be considered to be an assignment or alienation of benefits in violation of
federal law prohibiting the assignment or alienation of benefits under this
Plan. No other form of attempted disclaimer shall be recognized by the Company.

7.4. Definitions. When used herein and, unless the Participant has otherwise
specified in the Participant’s Beneficiary designation, when used in a
Beneficiary designation, “issue” means all persons who are lineal descendants of
the person whose issue are referred to, including legally adopted descendants
and their descendants but not including illegitimate descendants and their
descendants; “child” means an issue of the first generation; “per stirpes” means
in equal shares among living children of the person whose issue are referred to
and the issue (taken collectively) of each deceased child of such person, with
such issue taking by right of representation of such deceased child; and
“survive” and “surviving” mean living after the death of the Participant.

 

-7-

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

7.5. Special Rules. Unless the Participant has otherwise specified in the
Participant’s Beneficiary designation, the following rules shall apply:

 

  (a) If there is not sufficient evidence that a Beneficiary was living at the
time of the death of the Participant, it shall be deemed that the Beneficiary
was not living at the time of the death of the Participant.

 

  (b) The automatic Beneficiaries specified in Section 7.2 and the Beneficiaries
designated by the Participant shall become fixed at the time of the
Participant’s death so that, if a Beneficiary survives the Participant but dies
before the receipt of all payments due such Beneficiary hereunder, such
remaining payments shall be payable to the representative of such Beneficiary’s
estate.

 

  (c) If the Participant designates as a Beneficiary the person who is the
Participant’s spouse on the date of the designation, either by name or by
relationship, or both, the dissolution, annulment or other legal termination of
the marriage between the Participant and such person shall automatically revoke
such designation. (The foregoing shall not prevent the Participant from
designating a former spouse as a Beneficiary on a form executed by the
Participant and received by the Plan Administrator after the date of the legal
termination of the marriage between the Participant and such former spouse, and
during the Participant’s lifetime.)

 

  (d) Any designation of a nonspouse Beneficiary by name that is accompanied by
a description of relationship to the Participant shall be given effect without
regard to whether the relationship to the Participant exists either then or at
the Participant’s death.

 

  (e) Any designation of a Beneficiary only by statement of relationship to the
Participant shall be effective only to designate the person or persons standing
in such relationship to the Participant at the Participant’s death.

A Beneficiary designation is permanently void if it either is executed or is
filed by a Participant who, at the time of such execution or filing, is then a
minor under the law of the state of the Participant’s legal residence. The
Company shall be the sole judge of the content, interpretation and validity of a
purported Beneficiary designation.

7.6. No Spousal Rights. Prior to the death of the Participant, no spouse or
surviving spouse of a Participant and no person designated to be a Beneficiary
shall have any rights or interest in the benefits credited under this Plan
including, but not limited to, the right to be the sole Beneficiary or to
consent to the designation of Beneficiaries (or the changing of designated
Beneficiaries) by the Participant.

7.7. Death Prior to Full Distribution. If, at the death of the Participant, any
payment to the Participant was due or otherwise pending but not actually paid,
the amount of such payment shall be included in the Deferred Stock Account which
are payable to the Beneficiary (and shall not be paid to the Participant’s
estate).

 

-8-

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

7.8. Facility of Payment. In case of the legal disability, including minority,
of a Participant or Beneficiary entitled to receive any distribution under this
Plan, payment shall be made, if the Company shall be advised of the existence of
such condition:

 

  (a) to the duly appointed guardian, conservator or other legal representative
of such Participant or Beneficiary, or

 

  (b) to a person or institution entrusted with the care or maintenance of the
incompetent or disabled Participant or Beneficiary, provided such person or
institution has satisfied the Company that the payment will be used for the best
interest and assist in the care of such Participant or Beneficiary, and provided
further, that no prior claim for said payment has been made by a duly appointed
guardian, conservator or other legal representative of such Participant or
Beneficiary.

Any payment made in accordance with the foregoing provisions of this section
shall constitute a complete discharge of any liability or obligation of the
Company therefor.

SECTION 8

NONTRANSFERABILITY

In no event shall the Company make any payment under this Plan to any assignee
or creditor of a Participant or of a Beneficiary. Prior to the time of payment
hereunder, a Participant or Beneficiary shall have no rights by way of
anticipation or otherwise to assign or otherwise dispose of any interest under
this Plan nor shall such rights be assigned or transferred by operation of the
law.

SECTION 9

LIMITATION ON RIGHTS OF ELIGIBLE DIRECTORS AND

PARTICIPATING DIRECTORS

9.1. Service as a Director. Nothing in this Plan will interfere with or limit in
any way the right of the Board or the Company’s shareholders to remove an
Eligible Director or Participating Director from the Board. Neither this Plan
nor any action taken pursuant to it will constitute or be evidence of any
agreement or understanding, express or implied, that the Board or the Company’s
shareholders have retained or will retain an Eligible Director or Participating
Director for any period of time or at any particular rate of compensation.

9.2. Nonexclusivity of the Plan. Nothing contained in this Plan is intended to
effect, modify or rescind any of the Company’s existing compensation plans or
programs or to create any limitations on the Board’s power or authority to
modify or adopt compensation arrangements as the Board may from time to time
deem necessary or desirable.

 

-9-

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

SECTION 10

PLAN AMENDMENT, MODIFICATION AND TERMINATION

The Board may suspend or terminate this Plan at any time. The Board may amend
this Plan from time to time in such respects as the Board may deem advisable in
order that this Plan will conform to any change in applicable laws or
regulations or in any other respect that the Board may deem to be in the
Company’s best interests; provided, however, that no amendments to this Plan
will be effective without approval of the Company’s shareholders, if shareholder
approval of the amendment is then required pursuant to Rule 16b-3 (or any
successor rule) promulgated under the Securities Exchange Act of 1934, as
amended, or the rules of the Nasdaq Stock Market (or other exchange on which the
shares of Common Stock are then listed and primarily traded). Following a
termination of the Plan, Deferred Stock Accounts shall remain in the Plan until
the Participant becomes eligible for the benefits under Section 6. The
termination of the Plan shall not adversely affect any Participant or
Beneficiary who has become entitled to the payment of any benefits under the
Plan as of the date of termination. Notwithstanding the foregoing, to the extent
permissible under section 409A of the Code and the related Treasury regulations
and guidance, if there is a termination of the Plan with respect to all
Participants, the Board shall have the right, in its sole discretion, and
notwithstanding any elections made by the Participant, to immediately pay all
benefits in a lump sum following such termination of the Plan.

SECTION 11

PARTICIPANTS ARE GENERAL CREDITORS OF THE COMPANY

The Participating Directors and Beneficiaries thereof shall be general unsecured
creditors of the Company with respect to any payments to be made pursuant to
this Plan and shall not have any preferred interest by way of trust, escrow,
lien or otherwise in any specific assets of the Company. If the Company shall,
in fact, elect to set aside monies or other assets to meet its obligations
hereunder (there being no obligation to do so), whether in a grantor’s trust or
otherwise, the same shall, nevertheless, be regarded as a part of the general
assets of the Company subject to the claims of its general creditors, and
neither any Participating Director nor any Beneficiary thereof shall have a
legal, beneficial or security interest therein.

 

-10-

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

SECTION 12

CHANGE OF CONTROL

12.1. Change of Control. 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:

 

  (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 12.2 hereof) cease to
constitute a majority of the Company’s Board; 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.

Notwithstanding the foregoing, none of the foregoing event(s) shall constitute a
Change of Control unless such event(s) constitute a Change of Control as defined
in section 409A of the Code, any regulations and other guidance in effect from
time to time thereunder, including without limitation, Notice 2005-1.

12.2. Continuing Director. “Continuing Director” shall mean any person who is a
member of the Board of the Company, who is not an Acquiring Person (as
hereinafter defined) or an

 

-11-

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

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 on the date, as of which this Plan first
became effective or (b) subsequently becomes a member of the Board, if such
person’s initial nomination for election or initial election to the Board is
recommended or approved by a majority of the Continuing Directors. For purposes
of this Section 12.2: “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.

SECTION 13

CLAIMS PROCEDURE

Without limiting the generality of the following, an application for benefits
under Section 3 shall be processed as a claim for the purposes of this section.

13.1. Original Claim. Any person may file with the Committee a written claim for
benefits under this Plan. Within ninety (90) days after the filing of such a
claim, the Committee shall notify the claimant in writing whether his or her
claim is upheld or denied in whole or in part or shall furnish the claimant a
written notice describing specific special circumstances requiring a specified
amount of additional time (but not more than one hundred eighty days from the
date the claim was filed) to reach a decision on the claim. If the claim is
denied in whole or in part, the Committee shall state in writing:

 

  (a) the specific reasons for the denial;

 

  (b) the specific references to the pertinent provisions of the Plan Statement
on which the denial is based;

 

  (c) a description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary; and

 

  (d) an explanation of the claims review procedure set forth in this section.

13.2. Claims Review Procedure. Within sixty (60) days after receipt of notice
that his or her claim has been denied in whole or in part, the claimant may file
with the Committee a written request for a review and may, in conjunction
therewith, submit written issues and comments. Within sixty (60) days after the
filing of such a request for review, the Committee shall notify the claimant in
writing whether, upon review, the claim was upheld or denied in whole or in part
or shall furnish the claimant a written notice describing specific special
circumstances requiring a specified amount of additional time (but not more than
one hundred twenty days from the date the request for review was filed) to reach
a decision on the request for review.

 

-12-

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

13.3. General Rules.

 

  (a) No inquiry or question shall be deemed to be a claim or a request for a
review of a denied claim unless made in accordance with the claims procedure.
The Committee may require that any claim for benefits and any request for a
review of a denied claim be filed on forms to be furnished by the Committee upon
request.

 

  (b) All decision on claims and on requests for a review of denied claims shall
be made by the Committee.

 

  (c) The Committee may, in its discretion, hold one or more hearings on a claim
or a request for a review of a denied claim.

 

  (d) Claimants may be represented by a lawyer or other representative (at their
own expense), but the Committee reserves the right to require the claimant to
furnish written authorization. A claimant’s representative shall be entitled to
receive copies of notices sent to the claimant.

 

  (e) The decision of the Committee on a claim and on a request for a review of
a denied claim shall be served on the claimant in writing. If a decision or
notice is not received by a claimant within the time specified, the claim or
request for a review of a denied claim shall be deemed to have been denied.

 

  (f) Prior to filing a claim or a request for a review of a denied claim, the
claimant or his or her representative shall have a reasonable opportunity to
review a copy of the Plan Statement and all other pertinent documents in the
possession of Apogee.

 

  (g) The Committee may permanently or temporarily delegate all or a portion of
its authority and responsibility under this Section to a another committee or to
an individual.

 

  (h) The procedures and remedies herein are not exclusive. Subsequent to a
Change in Control, a Participant or surviving spouse of a Participant shall not
be required to exhaust these administrative remedies. If there is litigation
regarding the benefits payable to or with respect to a Participant, then
notwithstanding Section 7.4, determinations made by the Committee subsequent to
a Change in Control (even if such determinations relate to events occurring
wholly or partially before the Change in Control) shall not be afforded any
deference and the matter shall be heard de novo.

 

  (i) If any Participant successfully litigates, in whole or in part, any claim
for benefits under this Plan, the court shall award reasonable attorney’s fees
and costs of the action to the Participant.

 

-13-

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

SECTION 14

MISCELLANEOUS

14.1. Securities Law and Other Restrictions. Notwithstanding any other provision
of this Plan or any Stock Deferral Election delivered pursuant to this Plan, the
Company will not be required to issue any shares of Common Stock under this Plan
and a Participating Director may not sell, assign, transfer or otherwise dispose
of shares of Common Stock issued pursuant to this Plan, unless (a) there is in
effect with respect to such shares a registration statement under the Securities
Act of 1933, as amended (the “Securities Act”) and any applicable state
securities laws or an exemption from such registration under the Securities Act
and applicable state securities laws, and (b) there has been obtained any other
consent, approval or permit from any other regulatory body that the Company
deems necessary or advisable. The Company may condition such issuance, sale or
transfer upon the receipt of any representations or agreements from the parties
involved, and the placement of any legends on certificates representing shares
of Common Stock, as may be deemed necessary or advisable by the Company, in
order to comply with such securities law or other restriction.

14.2. Governing Law. The validity, construction, interpretation, administration
and effect of this Plan and any rules, regulations and actions relating to this
Plan will be governed by and construed exclusively in accordance with the laws
of the State of Minnesota.

14.3. ERISA Administrator. The Company shall be the plan administrator of this
Plan.

14.4. Service of Process. In the absence of any designation to the contrary by
the Company, the Secretary of the Company is designated as the appropriate and
exclusive agent for the receipt of service of process directed to this Plan in
any legal proceeding including arbitration, involving this Plan.

14.5. Administrative Determinations. The Committee shall make such
determinations as may be required from time to time in the administration of
this Plan. The Committee shall have the discretionary authority and
responsibility to interpret and construe the Plan Statement and to determine all
factual and legal questions under this Plan, including but not limited to the
entitlement of Participants and others, and the amounts of their respective
interests. Each interested party may act and rely upon all information reported
to them hereunder and need not inquire into the accuracy thereof, nor be charged
with any notice to the contrary.

14.6. Rules and Regulations. Any rule not in conflict or at variance with the
provisions hereof may be adopted by the Committee.

14.7. Errors in Computations. The Company nor the Committee shall not be liable
or responsible for any error in the computation of any benefit payable to or
with respect to any

 

-14-

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

Participant resulting from any misstatement of fact made by the Participant or
by or on behalf of any survivor to whom such benefit shall be payable, directly
or indirectly, to Apogee, and used by the Company in determining the benefit.
Apogee shall not be obligated or required to increase the benefit payable to or
with respect to such Participant which, on discovery of the misstatement, is
found to be understated as a result of such misstatement of the Participant.
However, the benefit of any Participant which is overstated by reason of any
such misstatement or any other reason shall be reduced to the amount appropriate
in view of the truth (and to recover any prior overpayment by offset or other
legal process).

14.8. ERISA Status. This Plan is adopted with the understanding that it is an
unfunded plan maintained primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees as
provided in section 201(2), section 301(3) and section 401(a)(1) of ERISA. Each
provision shall be interpreted and administered accordingly.

14.9. IRC Status. This Plan is intended to be a nonqualified deferred
compensation arrangement. The rules of section 401(a) et. seq. of the Code shall
not apply to this Plan. The rules of section 3121(v) and section 3306(r)(2) of
the Code shall apply to this Plan. The rules of section 409A of the Code shall
apply to this Plan to the extent applicable and this Plan Statement shall be
construed and administered accordingly. The Company nor any of its officers,
directors, agents or affiliates shall be obligated, directly or indirectly, to
any Participant or any other person for any taxes, penalties, interest or like
amounts that may be imposed on the Participant or other person on account of any
amounts under this Plan or on account of any failure to comply with any Code
section.

 

-15-