A majority of the votes entitled to be cast, represented in person or by proxy, will constitute a quorum for action at the Meeting. Abstentions will be counted as shares present for purposes of determining the presence or absence of a quorum. Proxies relating to “street name” shares that are voted by brokers on some matters, but not on other matters as to which authority to vote is withheld from the broker absent voting instructions from the beneficial owner (“broker non-votes”) will be treated as shares present for purposes of determining the presence or absence of a quorum. The voting requirements and the procedures described below are based upon provisions of the Wisconsin Business Corporation Law, the Company’s articles of incorporation and bylaws, and any other requirements applicable to the matters to be voted upon.

Directors are elected by a plurality of the votes cast by the holders of shares entitled to vote in the election at a meeting at which a quorum is present (Proposal 1). A “plurality” means that the individuals who receive the largest number of votes are elected as directors up to the maximum number of directors to be elected at the meeting. Shares for which authority is withheld to vote for director nominees and broker non-votes have no effect on the election of directors except to the extent that the failure to vote for a director nominee results in another nominee receiving a larger number of votes.

In order to approve, on an advisory basis, the compensation of our named executive officers (Proposal 2) the votes cast FOR must exceed the votes cast AGAINST the proposal. Abstentions will have no effect on this proposal. This advisory vote is considered a non–routine proposal under the rules applicable to banks and brokers. As a result, if you hold your shares in “street name,” absent specific voting instructions, your bank, broker or other holder of record will not be permitted to exercise voting discretion, and your shares will not be considered present and entitled to vote, with respect to this advisory vote. Broker non-votes will have no effect on this proposal.

In order to approve the ratification of PricewaterhouseCoopers LLP as our independent auditor (Proposal 3) the votes cast FOR must exceed the votes cast AGAINST the proposal. Abstentions will have no effect on this proposal. Because this proposal is considered a routine proposal, brokers or other entities holding shares for an owner in “street name” are able to vote on this proposal, even if no voting instructions are provided by the beneficial owner. Broker non-votes will have no effect on this proposal.

The cost of soliciting proxies, including the expense of forwarding to beneficial owners of stock held in the name of another, will be borne by the Company. In addition, officers and employees of the Company may solicit the return of proxies from certain shareholders by telephone or meeting. Such officers and employees will receive no compensation therefore in addition to their regular compensation. Shares held for the accounts of participants in the Actuant Corporation 401(k) Plan and Electrical Holdings 401(k) Plan (collectively the(the “401(k) Plans”Plan”) will be voted in accordance with the instructions of the participants or otherwise in accordance with the terms of such plans.plan. Shares held for the accounts of the participants in the Actuant Corporation Deferred Compensation Plan (the “Employee Deferred Compensation Plan”) will be voted by the trustee ofrabbi trust associated with the plan in accordance with its terms.Employee Deferred Compensation Plan, as directed by the Company.

By Mail—Shareholders who receive a paper proxy card may elect to vote by mail and should complete, sign and date their proxy card and mail it in the postage paid envelope provided. Proxy cards submitted by mail must be received by the time of the Annual Meeting in order for your shares to be voted.

At the Annual Meeting—Shares held in your name as the shareholder of record may be voted by you in person at the Annual Meeting. Shares held beneficially in “street name” may be voted by you in person at the Annual Meeting only if you obtain a legal proxy from the broker or other agent that holds your shares giving you the right to vote the shares and bring such proxy to the Annual Meeting.

A proxy may be revoked, prior to its exercise, by executing and delivering a later dated proxy, by delivering written notice of the revocation of the proxy to the Corporate Secretary prior to the Meeting or by attending and voting at the Meeting. Attendance at the Meeting, in and of itself, will not constitute a revocation of a proxy.

Unless previously revoked, the shares represented by all properly executed proxies received in time for the Meeting will be voted in accordance with the shareholder’s directions. If no directions are specified on a duly submitted proxy, the shares will be voted, in accordance with the recommendations of the boardBoard of directors,Directors, FOR the election of the directors nominated by the boardBoard of directors, FOR the ratification of PricewaterhouseCoopers LLP as the Company’s independent auditors andDirectors, FOR the approval, on a non-binding basis, of the compensation of our named executive officers, FOR the ratification of PricewaterhouseCoopers LLP as the Company’s independent auditor and in accordance with the discretion of the persons appointed as proxies on any other matters properly brought before the Meeting.

Robert C. Arzbaecher—Mr. Arzbaecher is the Chief Executive Officer of the Company and Chairman of the Board of Directors. Mr. Arzbaecher will continue in his role as Chairman of Board, but will step down as Chief Executive Officer of the Company at the January 2014 Annual Meeting, after serving as President and Chief Executive Officer of the Company, since 2000.a role he returned to in August 2015 in addition to his duties as Chairman of the Board. He previously held the role of President and Chief Executive Officer of the Company from 2000 to January 2014. Prior to that he washeld financial roles in Applied Power (Actuant's predecessor), including Vice President and Chief Financial Officer since 1994 and Senior(1994-1999), Vice President since 1998. He also served as Vice President, Finance of Tools &and Supplies from 1993 to 1994.(1993-1994) and Corporate Controller (1992-1993). Prior to joining the Company in 1992, as Corporate Controller, Mr. Arzbaecher held various financial positions with Grabill Aerospace, Farley Industries and Grant Thornton. Mr. Arzbaecher is a certified public accountant and also is a director of CF Industries Holdings, Inc. and Fiduciary Management, Inc. mutual funds. Mr. Arzbaecher provides the boardBoard with a thorough understanding of the Company, including strategy, business development, international operations and served markets. Additionally, he has extensive finance and acquisition experience, which is beneficial given the Company’s stated goal of growth through acquisitions.

Gurminder S. Bedi—Mr. Bedi is managing partner of Compass Acquisitions (a private equity partnership), serves on the board of directors of Kemet Corporation and CompuwareBlue Bird Corporation and is a retired Vice President of Ford Motor Company. Mr. Bedi served in a variety of managerial positions at Ford Motor Company for more than thirty years and holds degrees in mechanical engineering and business administration. Mr. Bedi’s broad experience in manufacturing operations and international business, as well as his automotive and commercial truck market background are key contributions to the board.Board. Based on his current and prior executive leadership positions, Mr. Bedi also brings to the boardBoard a familiarity with the challenges facing large, international public companies, as well as private equity groups (which are the source of some of the Company’s business acquisitions).

R. Alan Hunter, Jr.—Mr. Hunter is a retired executive from Stanley Black & Decker where he last served as President and Chief Operating Officer from 1993 through 1997, as well as Vice President Finance and Chief Financial Officer from 1986 to 1993. With over twenty years of experience at The Stanley Works, Mr. Hunter brings a strong financial background and thorough knowledge of the industrial tool and retail DIY industry to the board.Board. The boardBoard also benefits from his considerable international business experience, especially related to finance, operations, business development and strategy. Mr. Hunter currently serves on the Boardboard of Trusteestrustees of four mutual fund groups managed by MassMutual Financial Group.

Robert A. Peterson—Mr. Peterson is the former President and Chief Executive Officer of Norcross Safety Products, formerly a private equity owned business, since its inception in 1995 until it was sold to Honeywell in 2008. Prior to that he held executive level leadership positions with a number of firms including Farley Industries and Wright Line, after beginning his career at Ernst & Young. Mr. Peterson’s extensive finance, mergers and acquisition and private equity background has been beneficial to the boardBoard in evaluating financial performance and strategic acquisitions. Additionally, his manufacturing and distribution industry experience is a good fit for the businesses included in the Company’s Industrial segment. Mr. Peterson currently serves on the board of BarrierSafe Solutions International, Inc. (a private company).

Holly A. Van Deursen—Ms. Van Deursen was most recently an executive in the petrochemical industry, having held a variety of leadership positions at both British Petroleum and Amoco Corporation. She was Group Vice President of Petrochemicals for British Petroleum from 2003 to 2005 and Group Vice President of Strategy from 2001 to 2003. Ms. Van Deursen has extensive experience in the oil & gas industry, which provides the boardBoard with insight on our businesses in the Energy segment. Her experience in strategic analysis and corporate governance further enhances her ability to add value to our board.Board. She is currently a director of Bemis Company, Inc., Anson Industries (a private company), Petroleum Geo-Services and Capstone Turbine Corporation.

Dennis K. Williams—Mr. Williams is a retired President and Chief Executive Officer (2000 to 2005) and Chairman of the Board (2000 to 2006) of IDEX Corporation. Prior thereto,to that he held several executive level roles at General Electric. Mr. Williams brings to the boardBoard considerable experience and insight into issues facing large international public companies, knowledge specific to our markets (with over thirty years experience in our industries) and a strong track record of growing businesses. Mr. Williams’ background as an executive of a global company also lends a valuable perspective to the boardBoard on executive compensation, financial matters and business innovation. Mr. Williams is currently a director of Owens-Illinois, Inc. and Ametek, Inc.

At our 2012 Annual meeting, we asked shareholders to cast a non-binding advisory vote on the frequency with which we submit to shareholders a non-binding advisory vote on the compensation of our named executive officers ("Say on Pay" vote). Shareholders expressed a preference that Say on Pay votes occur every year. Consistent with this preference we will hold Say on Pay votes annually until the 2018 Annual Meeting, at which time shareholders will again be asked to vote on the frequency of Say on Pay votes.

We are asking our shareholders to vote,approve, on a non-binding advisory basis, on the compensation of our named executive officers,Named Executive Officers ("NEOs"), as disclosed in the Compensation Discussion and Analysis section and the accompanying compensation tables and narrative discussion inof this proxy statement. We have designedThe Compensation Committee has overseen the development and implementation of our executive compensation program which is designed to drive our long-term success and increase shareholder value. We utilize our executive compensation program to provide competitive compensation within our industry peer group that will attract and retain executive talent, encourage our leaders to perform at a high level by linking compensation with financial and performance milestones and align our executive compensation with shareholders’ interests through the use of equity-based incentive awards. The Compensation Committee has overseen the development and implementation of our executive compensation program in line with these core compensation principles.

PricewaterhouseCoopers LLP, an independent registered public accounting firm, performed an audit of our consolidated financial statements for the fiscal year ended August 31, 2015 and the effectiveness of our internal control over financial reporting as of August 31, 2015. The Audit Committee of the Board of Directors has selected thePricewaterhouseCoopers LLP to serve as our independent registered public accounting firm of PricewaterhouseCoopers LLP asfor fiscal 2016 and the Company’s independent auditorCommittee is presenting this selection to shareholders for the fiscal year ending August 31, 2014. The Audit Committee has directed that management submit the selection of independent auditors for ratification by the shareholders at the Annual Meeting.ratification.

Shareholder ratification of the selection of PricewaterhouseCoopers LLP as the Company’s independent auditor is not required by the Bylaws or otherwise. However,Company's bylaws, however, the Audit Committee and Board of Directors areis submitting the selection of PricewaterhouseCoopers LLP for shareholder ratification because they valuethe Audit Committee values shareholders’ views on the Company’s independent auditors. If the shareholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain PricewaterhouseCoopers LLP. Even if the selection is ratified, theThe Audit Committee mayalso retains the right to direct the appointment of a different independent accounting firm at any time during the year if the Audit Committeeit determines that such a change would be in the best interests of the Company and its shareholders.

A representative of PricewaterhouseCoopers LLP will be present at the Annual Meeting and will have the opportunity to make a statement and respond to appropriate questions.

The following table sets forth, as of October 15, 2013,30, 2015, unless otherwise indicated, certain information with respect to the beneficial ownership of common stock by persons known by the Company to beneficially own more than 5% of the outstanding shares of common stock, by the directors and nominees for director, by each executive officer of the Company named in the Summary Compensation Table below and by the Company’s executive officers and directors as a group. Shares are deemed to be beneficially owned by any person or group who has the power to vote or direct the vote or the power to dispose or direct the disposition of such shares, or who has the right to acquire beneficial ownership thereof within 60 days:

The beneficial ownership information set forth above is based on information furnished by the specified persons or known to the Company and is determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as required for purposes of this Proxy Statement. It is not necessarily to be construed as an admission of beneficial ownership for other purposes.

The Board of Directors (the “Board”) has adopted the Actuant Corporation Corporate Governance Guidelines (the “Guidelines”). The Guidelines state that the Board is elected by the shareholders to provide oversight and guidance to management with a view to increasing shareholder value over the long term. The Guidelines cover various topics, including, but not limited to, director independence, board and committee composition, board operations and leadership development. The Nominating & Corporate Governance Committee of the Board monitors and oversees the application of the Guidelines and recommends to the Board any changes to the Guidelines. Each committee has a written charter that is approved by the Board and annually evaluated by the committee.

The non-employee directors of the Board regularly meet alone without any members of management being present. Mr. Hall,Peterson, the lead director, presides at these sessions.

The Board has determined that each of Ms. Van Deursen and Messrs. Bedi, Ferland, Fischer, Hall, Hunter, Peterson and Williams (i) is “independent” within the definitions contained in the current New York Stock Exchange listing standards and the Company’s Corporate Governance Guidelines and (ii) has no other “material relationship” with the Company that could interfere with his or her ability to exercise independent judgment. In addition, the Board has determined that each member of the Audit Committee is “independent” within the definition contained in current Securities and Exchange Commission (“SEC”) rules. One of the Audit Committee members, Mr. Fischer, serves on three other audit committees and also serves on the board of directors of a construction firm, CG Schmidt, which the Company has engaged for services.committees. The Company’s Board has affirmatively determined that such simultaneous service does not impair Mr. Fischer’s ability to effectively serve as the chair of our Audit Committee. Furthermore, the Board has determined that all members of our Audit Committee meet the financial literacy requirements of the New York Stock Exchange ("NYSE") and qualify as “audit committee financial experts” as defined by the SEC.

OurThe Board oversees an enterprise-wide approach to risk management, designed to support the achievement of organizational objectives (including strategic initiatives), to improve long-term organizational performance and enhance shareholder value. While the Board has the ultimate oversight responsibility for the risk management process, various committees of the Board also have responsibility for risk management. In particular, the Audit Committee focuses on legal, compliance and financial risk (including internal controls), while the Compensation Committee and the Nominating & Corporate Governance Committee focus on compensation risk (as described below) and corporate governance policies, respectively.

In establishing and reviewing our executive compensation programs,program, the Compensation Committee considers, among other things, whether the compensation program rewards executives for performance and whether the program encourages unnecessary or excessive risk taking. In fiscal 2013, the Company performedThe Committee, with assistance from an independent compensation consultant (Towers Watson), annually performs a compensation risk assessment (includingincluding an inventory of material incentive and sales compensation plans) and presented a summaryplans. The Committee has identified several mitigating factors that help reduce the likelihood of the findingsundue risk taking related to compensation arrangements including, but not limited to, the Compensation Committee.use of various measures (earnings, asset management, total shareholder return ("TSR"), and cash flow) in a balanced mix of annual and long-term incentive plans, use of multiple types of incentives (cash, stock options, restricted stock units, performance shares), and executive stock ownership guidelines that help align incentives with long-term company stock price appreciation. Based upon the assessment performed, the Committee believes that through a combination of risk mitigating features and incentives guided by relevant market practices and Company-wide goals, the Company’s compensation policies and practices do not encourage unnecessary or excessive risk taking and are not reasonably likely to have a material adverse effect on financial results. In evaluating these compensation policies and practices, a number of factors were identified which the Compensation Committee believes discourages excessive risk taking, including the key factors described below:Company.

The Company has a compliance plan and code of conduct that applies to all of its officers, directors and employees (the “Code of Conduct”). The Code of Conduct, which is reviewed annually by the Nominating & Corporate Governance Committee, is available for your review on the corporate governance pagesection of the Company’s website at www.actuant.com.

Copies of the Company’s committee charters, corporate governance guidelines, Code of Conduct and Code of Ethics are posted inavailable on the Corporate Governance section of the Company’s website at www.actuant.com and may be obtained, free of charge, upon written request directed to our Executive Vice President and Chief Financial Officer, Actuant Corporation, N86W12500 Westbrook Crossing, Menomonee Falls, Wisconsin, 53051 or by telephone at (262) 293-1500.

The Nominating & Corporate Governance Committee has the lead role in identifying director candidates, including the slate of directors presented for election at the Meeting. The Nominating & Corporate Governance Committee will consider recommendations from shareholders concerning the nomination of directors. Recommendations should be submitted in writing to the Company and state the shareholder’s name and address, the name and address of the candidate, and the qualifications of and other detailed background information regarding the candidate. To be included in a proxy statement, recommendations must be received by the Company not less than 120 calendar days preceding the date of release of the prior year’s proxy statement. The direct nomination of a director by shareholders must be made in accordance with the advance written notice requirements of the Company’s Bylaws. For consideration at the 2015 Annual Meeting, direct nominations must be received by the Company no later than the close of business on September 16, 2014 and no earlier than the close of business on August 17, 2014.

Nominees for director are selected on the basis of experience, integrity, ability to make independent analytical inquiries, understanding of the Company’s business environment and willingness to devote adequate time to boardBoard duties. Although the boardBoard does not have a formal diversity policy, the boardBoard is committed to an inclusive membership, embracing diversity with respect to background, experience, skills, education, special training, race, age, gender, national origin and viewpoints.

In evaluating director nominees, the Nominating & Corporate Governance Committee also considers the following factors:

The Nominating & Corporate Governance Committee’s goal is to assemble a Board that brings to the Company a variety of perspectives and skills derived from high quality business and professional experience. In doing so, the Nominating & Corporate Governance Committee also considers candidates with appropriate non-business backgrounds.

Other than the foregoing, there are no stated minimum criteria for director nominees, although the Nominating & Corporate Governance Committee may also consider such other factors as it may deem are in the best interests of the Company and its shareholders. There is no limit with regard to the number of boards on which our directors may serve, but the board of directorsBoard considers service on others boards as a factor in the director selection process. The Nominating & Corporate Governance Committee does, however, believe it appropriate for at least one, and, preferably several, members of the boardBoard to meet the criteria for an “audit committee financial expert” as defined by Securities and Exchange CommissionSEC rules, and that a majority of the members of the boardBoard meet the definition of “independent director” under New York Stock ExchangeNYSE listing standards. The Nominating & Corporate Governance Committee also believes it appropriate for certain key members of the Company’s management to participate as members of the board.Board.

The Nominating & Corporate Governance Committee identifies nominees by first evaluating the current members of the Board who are willing to continue in service. Current members of the Board with skills and experience that are relevant to the Company’s business and who are willing to continue in service are considered for re-nomination, balancing the value of continuity of service by existing members of the Board with that of obtaining a new perspective. If any member of the Board does not wish to continue in service or if the Nominating & Corporate Governance Committee or the Board decides not to nominate a member for re-election, the Nominating & Corporate Governance Committee identifies the desired skills and experience of a new nominee in light of the criteria above. Current members of the Nominating & Corporate Governance Committee and Board are polled for suggestions as to individuals meeting the criteria of the Nominating & Corporate Governance Committee. Research may also be performed to identify qualified individuals. From time to time, the Company has engaged third party search firms to identify, evaluate or assist in identifying potential nominees.

In order to ensure appropriate representation on our board of directors,Board, the Nominating & Corporate Governance Committee has adopted a policy regarding resignation upon a director’s retirement or change in principal occupation or business association from the position the director held on the latter of: (a) the effective date of the policy; (b) the date when the director was last elected to our board of directors; and (c)Board or the date, if any, our board of directorsBoard last rejected an offer by the director to resign under the policy. Under the policy, uponUpon such a change in position, a director shall offer his or her resignation as a boardBoard member to the Nominating & Corporate Governance Committee, which will then recommend that our board of directorsBoard accept or reject the offer of resignation based on a review of the qualifications of the director, and whether the director's resignation from the Board would be in the best interests of the Company and its stockholders.shareholders.

The Board has adopted a process for communications with shareholders and other interested parties. Shareholders and other interested parties who want to communicate with the Board, the non-management directors as a group, or any individual director can write to: Actuant Corporation, Attention: Chairman, N86W12500 Westbrook Crossing, Menomonee Falls, Wisconsin 53051. Your letter should indicate that you are an Actuant shareholder. Depending on the subject matter, management will:

The Audit Committee of the boardBoard of directorsDirectors oversees and monitors the Company’s management and independent registered public accounting firm (currently PricewaterhouseCoopers LLP) throughout the financial reporting process. Management has the primary responsibility for the financial statements and the reporting process, including the system of internal controls.

In this context, the Audit Committee has met and held discussions with management and the independent registered public accounting firm regarding the fair and complete presentation of the Company’s results of operations and the assessment of the Company’s internal control over financial reporting. The Audit Committee has discussed significant accounting policies applied by the Company in its financial statements. Management represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America.

Additionally, the Audit Committee has done, among other things, the following:

No member of the Audit Committee is employed by or has any other material relationship with the Company. The boardBoard of directorsDirectors has determined that each member of the Audit Committee qualifies as an Audit Committee financial expert under Securities and Exchange Commission regulations, and the Audit Committee is comprised entirely of independent directors as required by the New York Stock Exchange listing standards and the applicable rules of the Securities and Exchange Commission.

The Compensation Committee (the “Committee”) oversees the Company’s executive compensation programs. It utilizes an independent compensation consultantActuant strives to provide guidancebe a premier diversified industrial corporation and advice on the development, monitoring and periodic adjustmentsa growth company that is operationally excellent. To achieve this, we look to the Company’s executive compensation programs. In additionoptimize our organization to attracting and retaining high caliber executives, the components of the executive compensation program (described on page 19) are designed to reward both short and long-term business performance. The mix of incentives, which are tied to varying performance periods, is designed to balance the need to drive current performance with long-term Company success. The Committee believes that the Company’s executives should be measured and rewarded for performance in growing sales, cash flow, earnings and return on invested capital. Additionally, other factors are critical such as the successful execution of corporate strategies, business portfolio management, expansion into emerging markets and other fast growing regions, building and developing a strong management team to ensure future succession, and fostering and driving a continuous improvement and high performance culture.

As a result of this financial performance, which fell below the threshold target for the annual incentive bonus plan, there were no cash bonuses earned by NEOs in fiscal 2015 (see page 17 for details of the Annual Bonus program). In addition, the total shares vested related to Performance share awards (which include aShares (discussed on page 20) were below the target level for the recently completed three year performance period) are tiedperiod. Given that incentive compensation and financial performance were both below target levels, we believe that our executive compensation program is effectively linked to financial objectives that are critical to the long-term success of the Company and its shareholders, including stock price appreciation and cash flow generation. Option grants and restricted share awards with time-based vesting provisions promote the retention of key executives, help drive long-term performance and align management’s interests with those of shareholders.

Our executive compensation program is aligned with our overall business model (illustrated below), which is intended to create shareholder value. For example,Our long standing Combined Management Measure ("CMM"), the primary metric used for the annual bonus program, rewards high return on invested capital and the generation of strong cash flow, which we believe are key drivers of shareholder value. In addition, a portion of the performance-based restricted stockperformance based equity awards (discussed on page 23) isare tied to the attainment of free cash flow conversion targets. In addition,targets, while the annual bonus also incorporates core sales growth, the first component of our long standing CMM annual cash incentive program (discussed on page 20) rewards high return on invested capital (“ROIC’) and the generation of increased free cash flow, which we believe are critical factors in driving shareholder value.business model.

More than a decade ago, we developed this business model which emphasizes cash flow generation. The model starts with core sales growth –- through customer intimacy, new products, emerging market penetration and other aspects of our Growth + Innovation process. We further increase sales and profits through acquisitions and reinvestment in our businesses, including capital expenditures. TheBusiness acquisitions add new capabilities, products and services, technologies, customers and geographic presence to make our base businesses stronger. Finally, continuous improvement –processes - whether “leaning out” existing operations, effective product sourcing, acquisition integration processes or leadership development – is- are utilized to improve profitability and drive cash flow. When executed successfully, these steps lead to strong earnings and cash flow generation that we redeploy back into the business. Our compensation plans were designed to linkprogram links executive pay with Company performance, and to driveeffective execution of this business model- driving growth in sales, earnings, cash flow and ultimately, Company stock price appreciation.

The Compensation Committee ("the Committee") is primarily responsible for overseeing the Company’s executive compensation program, after considering advice from an independent compensation consultant regarding competitive market pay practices. The Company’s CEO and management team also provide the Committee specific information related to NEO performance, compensation data and financial results.

Since fiscal 2003, theThe Committee has engagedutilizes Towers Watson as its independent compensation consultant. The consultant’s duties were to evaluateTowers assists the Committee by evaluating executive compensation, perform an analysis on realizedanalyzing pay alignment with financial and stock performance, discussproviding general compensation trends provideand competitive market practice data and benchmarking, participateand by participating in the design and implementation of certain elements of the executive compensation program and assist our CEO in developing compensation recommendations to present to the Committee for the executive officers other than himself. The compensation consultant provides the Committee with advice, consultation and market information on a regular basis, as requested, throughout the year. The compensation consultantprogram. Towers does not make specific recommendations on individual compensation amounts for the executive officers or the independent directors, nor does the consultantit determine the amount or form of executive and director compensation.

The Chief Executive Officer,Our CEO, in consultation with the Committee’s compensation consultant,Towers, develops compensation recommendations for the Committee to consider. The Chief Executive OfficerCEO considers various factors when making individual compensation recommendations including the relative importance of the executive’s position within the organization, the individualindividual’s tenure and experience of the executive, and the executive’s individual performance and contributions to the Company’s results.

In addition to Peer Group compensation data, for the Peer Group, the Committee alsoprimarily uses a broaderbroad set of data from the Towers Watson Executive Compensation Market Analysis Survey to obtain general background compensation information and an understanding of executive compensation trends. The Towers Watson survey data represents all participants in the Towers Watson database, with the exclusion of the financial services, healthcare and the energy services industries. The Committee does not determine the companies that are included in the Towers Watson survey data. The data (for(far in excess of 400 listed companies) is adjusted using regression analysis to reflect an organization of our revenue size. The data is reviewed in aggregate and on an individual basis by the Committee and provides an additionalthe primary reference point for making compensation related decisions. The Committee believes that this survey data, together with the compensation practices of the Peer Group and CEO recommendations (for other NEOs based on experience, expertise and demonstrated performance), accurately defines competitive market compensation for executive talent.

Base salaries are reviewed annually and are established considering the scope and complexity of the role, market competitiveness, individual performance and Company operating performance. Individual performance is evaluated based on achievement of established goals and objectives related to such items as business performance and leadership expectations.leadership. Generally changes in base salary are the result of either an annual merit increase, promotion or changes in role or market adjustment. In connection with his re-appointment to CEO in August 2015, the Committee approved a base salary of $800,000 for Mr. Arzbaecher. The remaining NEO's base salary increases in January 2015 were in the 3% to 4% range, reflecting annual merit adjustments.

Our NEOs, along with other executivesleaders and substantially all U.S. employees, have an opportunity to earn an annual cash incentive (the “Annual Cash Incentive”)bonus based on achievement of annual financial performance objectives. The performance objectives for the NEOs are approved by the Committee in the first quarter of each fiscal year.

We believe CMM is an effective measure of economic profitability and encourages all employees to drive both income statement and balance sheet performance. We believe thatimprove profits while using assets wisely. CMM is closely linkedtied to both ROIC and cash flow, which are important financial decision makingkey measures at the Company. The CMM metric has helped drive ROIC and cash flow, which we believe ultimately createslinked to shareholder value. This combination of metrics, and a thorough annual review of objectives and programs that underlie these metrics, along with regular progress reviews, ensure that individual performance is in balance and do not encourage undue risk.

We also utilize core sales growth (total sales growth less the impact of foreign currency and acquisitions/divestitures) as part of the annual bonus plan because it emphasizes this important measuresdriver of ourperformance success.  MBO’sCore sales growth targets are established at an individual business unit level and may include, but are not limited to, sales growth levels, expansion into emerging markets, product innovation metrics and low cost country sourcing initiatives. Unique MBOs are not established for each NEO. Rather, the MBO targets for segmentlevel.  Segment level executives such asincluding Messrs. Kobylinski and Blackmore represent the weighted average of the individual MBORoundhouse are measured on core sales growth targets for the underlying businesses withinassociated with their respective segments.  Similarly, the MBO measures forCorporate executives including Messrs. Arzbaecher, Goldstein, Lampereur and Lampereur represent the weighted average ofSkogg are measured on the achievement of all of Actuant’s individual business unit MBOs.consolidated Actuant core sales growth targets.

TargetAnnual bonus target percentages vary by NEO and are determined based on their scope of duties and responsibilities as well as market and peer group data. Actual bonus payments can range from 0% to 250% of the target annual bonus based on actual performance. NEOs not in charge of business units or segments have an annual bonus based on the CMM amounts (includingand core sales growth performance of Actuant. NEOs responsible for a business segment are eligible for an annual bonus based on Actuant CMM and Segment CMM)CMM and related MBO'score sales growth for their respective segment. The following table summarizes the fiscal 2015 annual bonus opportunity and weighting for each NEO.

The annual bonus earned is based on performance against pre-approved CMM and core sales targets, which are designed to be appropriately challenging and there is a risk that payments will not be made at all or will be made at less than 100%established by the Committee in the first quarter of the target amount. The degreefiscal year, considering financial plans, year-over-year improvement and the economic environment. Following the completion of difficulty, therefore, in achievinga fiscal year, the target CMM measures is designedCommittee approves annual bonus payouts based on the extent to be reasonably high. Variations in payouts from year to year are consistent with the Committee's approach of tying annual cash incentives to the Company's annual financial performance.which targets were met.

We provide benefit programs to our employees, including executives and our NEOs, to attract and retain them as well as to provide a competitive total compensation program. Actuant’s benefits philosophy is to generally provide similar benefit programs for all non-bargaining unit employees, including our NEOs. However, modifications may be made in certain cases including where Internal Revenue ServiceIRS limits or other regulations prevent equitable treatment modifications may be made.or for competitive positioning purposes. The following table summarizes such benefit plans and eligibility (for our U.S. employees):

Actuant hasWe also offer a deferred compensation plan that allows all U.S. employees with an annual base salary greater than $115,000over $120,000 to defer receiptcompensation and associated taxes until retirement or termination of salary and/or Annual Cash Incentives on a pre-tax basis. There is no limit to the amounts of either salary or incentives that participants can defer. Deferred amounts can be invested, in whole or in part, in a non-fundedemployment. Investment options include an interest bearing account and/or a common stock fund account. As a result of the non-fundedunfunded nature of the deferred compensation plan, compensation deferrals are essentially unsecured and subordinated loans from employees to the Company. Each year the Committee determines the interest rate for new deferrals, with reference totaking into account current market interest rates for subordinated debt of companies with similar credit ratings to the Company.rates. The common stock fund account return mirrors the performance of the Company’s commonActuant’s stock price. Shares of common stock equal to the value of deferred contributions to the common stock fundinto that account are contributed by the Company and held ininto a rabbi trust. Upon distribution,When distributed, deferred amounts invested in the interest planaccount are paid out of the Company’s general assetsin cash while an appropriate number of shares of common stock (plus accrued dividends) are released from the rabbi trust to satisfy common stock fund distributions.

Section 162(m) of the Internal Revenue Code limits the tax deductibility of compensation that we pay to NEOs (other than the chief financial officer) to $1,000,000$1 million in any year. This limitation does not apply to the CFO or performance based compensation for other NEOs if certain conditions are met. TheWhile the Committee generally attemptsintends for payments under certain of our incentive plans to maximizemeet the extent of thecriteria for tax deductibility of executive compensation under the provisions of Section 162(m). Thethe Internal Revenue Code, the Committee believes, however, that shareholders’ interest are best served by not restricting itsretains full discretion and flexibility in structuring compensation programs that are designed to attract, reward and retain successful executives, even though such programs may result in certain non-deductible compensation expenses.if not fully deductible.

To emphasizeOwnership of Actuant stock by our executives directly aligns their interests with shareholders. Accordingly, the Committee’s belief that stock ownership by the Company’s executive officers directly focuses those executives on increasing shareholder value, officerBoard maintains stock ownership guidelines have been adopted. The following table presents the required and actual ownership position of Actuant stock for each NEO, asequal in value to a multiple of annualtheir base salary as of October 15, 2013.salary.

To assist them in meeting the stock ownership requirement, the Company has an executive officer stock option matching program for newly hired or promoted executives. Under this program, the Company matches share purchases with an equal number of stock options that vest after five years. Those who have not reached their specified targets and who exercise stock options or that have restricted stock that vests,vest, are required to hold at least 60% of the net value of the shares they receive so that they meet their requirement in a timely manner, with the 40% balance available to cover related income tax obligations.

The Company’s insiderActuant maintains a policy that prohibits employees from engaging in short-term or speculative transactions involving its common stock. This policy prohibits trading policy contains stringent restrictions on transactions in Company common stock by directors and officers. All trades must be pre-approved. Directors and officers of the Company are prohibited fromon a short-term basis, engaging in any transaction in which they may profit from short-term speculative swings inshort sales, buying and selling puts and calls, and discourages the valuepractice of purchasing the Company’s securities (“hedging”). For this purpose, “hedging” includes “short-sales” (selling borrowed securities that the seller hopes can be purchased at a lower price in the future), “put” and “call” options (publicly available rights to sell or buy securities within a certain period of time at a specified price or the like) and other hedging transactions designed to minimize the risk inherent in owning the Company's stock such as zero-cost collars and forward sales contracts.on margin.

We continue to enhance the performance orientation of our executive pay program and believe that we have designed an executive compensation program which effectively links pay and performance and is in the best long-term interests of our shareholders. As indicated in our Compensation Committee Charter, we will continue to re-evaluate our executive compensation program to ensure future alignment in our compensation program and practices. Shareholder input will continue to be an important consideration in our annual executive compensation evaluation process.

The Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into our Annual Report on Form 10-K.