The Old Severance Agreements have been previously filed with the Securities and Exchange Commission and described in Apogee's proxy statements relating to its annual shareholder meetings. In accordance with the terms of the Old Severance Agreements, Apogee provided notice to its executive officers to terminate the Old Severance Agreements in August 2004. In October, 2004, Apogee's Compensation Committee approved new severance agreements for Apogee's executive officers (the "New Severance Agreements"), which contain terms that are more consistent with the terms of severance agreements in today's market but which overall are not substantially different from the terms of the Old Severance Agreements.
On January 5, 2005, the following executive officers executed the New Severance Agreements, which were effective as of January 1, 2005:
Russell Huffer; Chairman, President and Chief Executive Officer
Michael B. Clauer; Executive Vice President
William F. Marchido; Chief Financial Officer
Patricia A. Beithon; Secretary and General Counsel
Gary R. Johnson; Vice President and Treasurer
James S. Porter; Vice President - Strategy and Planning
Like the Old Severance Agreements, the New Severance Agreements are designed to retain the executive officers and provide for continuity of management in the event of an actual or threatened change in control of Apogee (as "change in control" is defined in the New Severance Agreements). The New Severance Agreements provide that, in the event of a change in control of Apogee, each executive officer would have specific rights and receive specified benefits if the executive officer is terminated without cause or the executive officer voluntarily terminates his or her employment for "good reason" (as defined in the New Severance Agreements) within two years after the change in control. In these circumstances, Messrs. Huffer, Clauer, Marchido and Porter and Ms. Beithon will each receive a severance payment equal to two times the executive officer's annual salary plus the executive's targeted annual bonus (as calculated under the terms of the New Severance Agreements), and Mr. Johnson will receive a severance payment equal to his annual salary plus his targeted annual bonus (as calculated under the terms of the New Severance Agreements). Options granted under Apogee's Amended and Restated 1987 Stock Option Plan, 1997 Omnibus Stock Incentive Plan, 2002 Omnibus Stock Incentive Plan and agreements relating to Apogee's match under Apogee's Amended and Restated 1987 Partnership Plan also provide for payment or immediate vesting of awards in the event of a change in control of Apogee.
The forms of the New Severance Agreements are attached hereto as Exhibit 10.1 and are incorporated herein by reference.