APOGEE ENTERPRISES, INC.APOG

APOGEE ENTERPRISES, INC. Stock Compensation Disclosure

10-KFiled Apr 24, 20253 min read
Share-Based Compensation
We have a 2019 Stock Incentive Plan and a 2019 Non-Employee Director Stock Plan (the Plans) that provide for the issuance of 1,150,000 and 300,000 shares, respectively, for various forms of stock-based compensation to employees and non-employee directors. Awards under these Plans may be in the form of incentive stock options (to employees only), non-statutory options, stock-settled stock appreciation rights (SARs), or nonvested share awards and units, all of which are granted at a price or with an exercise price equal to the fair market value of the Company’s stock at the date of award. We also have 2009 Non-Employee Director Stock Incentive Plan under which deferred restricted stock units were allocated, in addition to deferred restricted stock units acquired pursuant to a dividend equivalent reinvestment feature. As of June 23, 2019, no additional awards can be made under the 2009 Non-Employee Director Stock Incentive Plan.

We recorded share-based compensation expense, in which we account for any forfeitures as they occur, as follows:
(In thousands)202520242023
Restricted stock awards and restricted stock units$8,040 $6,753 $5,607 
Performance share units2,685 2,714 2,389 
Stock options— 254 660 
Share-based compensation expense
10,725 9,721 8,656 

Stock Options
For fiscal 2024, there were no cash proceeds from the exercise of stock options as all stock options were exercised on a stock-for-stock basis. The aggregate intrinsic value of securities exercised (the amount by which the stock price on the date of exercise exceeded the stock price of the award on the date of grant) was $1.8 million.

Service Condition Awards
Nonvested share awards and units generally vest over a two, three or four-year period. The following table summarizes nonvested restricted stock awards and restricted stock units activity for fiscal 2025:
 Number of Shares and UnitsWeighted Average Grant Date Fair Value
Awards outstanding at March 2, 2024
384,461 $40.28 
Granted137,227 63.59 
Vested
(160,028)42.67 
Forfeited and cancelled
(13,441)51.37 
Awards outstanding at March 1, 2025
348,219 $48.53 

Performance Condition Awards
In fiscal 2022, the Compensation Committee of the Board of Directors implemented an executive compensation program for certain key employees. In each of the first quarters of fiscal 2025, fiscal 2024 and fiscal 2023, we issued performance shares in the form of nonvested share unit awards, which give the recipient the right to receive shares earned at the end of the respective three-fiscal-year performance period. The number of share units issued at grant is equal to the target number of performance shares and allows for the right to receive a variable number of shares, ranging from 0% to 200% of target, dependent on achieving defined performance goals and being employed at the end of the performance period.

The following table summarizes nonvested performance share units granted and outstanding for which plans are at 100% to 200% of target:
Number of Shares and UnitsWeighted Average Grant Date Fair Value
Awards outstanding at March 2, 2024
115,104 $41.89 
Granted (1)
76,914 48.37 
Vested (1)
(79,526)34.90 
Forfeited and cancelled
(11,372)52.46 
Awards outstanding at March 1, 2025
101,120 $51.13 
(1)
Includes 39,763 shares for performance goals component of the fiscal 2022-2024 performance period.

At March 1, 2025, there was $11.8 million of total unrecognized compensation cost related to nonvested share and nonvested share unit awards, which is expected to be recognized over a weighted average period of approximately 21 months. The total fair value of shares vested during fiscal 2025 was $10.0 million.
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Historical Timeline

Fiscal YearFiled
2025Apr 24, 2025Showing above
2018Apr 30, 2018

About Stock Compensation Disclosures

Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.

Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.

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