TABLE OF CONTENTS
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| Page |
| General Information | |
The Proposals | |
| Proposal 1: Election of Directors | |
Proposal 2: Ratification of SelectionAppointment of Independent Auditors | |
Proposal 3: Vote Upon an Amendment to the Actuant Corporation 2017 Omnibus Incentive Plan | |
Proposal 4: Advisory Vote to Approve Compensation of Our Named Executive Officers | |
Proposal 5:4: Advisory Vote on the Frequency of Future Advisory Votes to Approve Compensation of our Named Executive Officers | |
Our Named Executive Officers |
| Certain Beneficial Owners | |
| Corporate Governance Matters | |
| Board Election and Leadership Structure | |
| Board Committees, Charters, Functions and Meetings | |
| Executive Sessions of Non-Management Directors | |
Independence of Directors; Financial ExpertExpertise of Audit Committee | |
Compensation Risk AssessmentKey Areas of Board Oversight | |
Use of Compensation Consultants and Other AdvisorsDirector Selection Procedures | |
CodesSummary of ConductDirector Skills, Competencies and Attributes | |
Director Selection ProceduresResignation Policy | |
| Communications with Directors | |
| Certain Relationships and Related Person Transactions | |
| Compensation Committee Interlocks and Insider Participation | |
| Information Available Upon Request | |
| Report of the Audit Committee | |
| Executive Compensation (Compensation Discussion and Analysis) | |
Executive Summary | |
Compensation and Link to PerformanceExecutive Summary | |
| Alignment of Compensation to Performance | |
| Shareholder Input on Executive Compensation Program | |
| Oversight of the Executive Compensation Program | |
| Assessing Competitive Compensation Practices | |
| Target Level Compensation Determination | |
| Components of Executive Compensation | |
Tax Deductibility of Executive CompensationStock Ownership Requirements | |
Stock Ownership RequirementsAnti-Hedging Policy | |
Anti-Hedging PolicyCompensation Clawback Policies | |
Changes for the Fiscal 2024 Executive Compensation Clawback PolicyProgram | |
| Talent Development and Compensation Committee Report | |
| Summary Compensation Table | |
| Grants of Plan-Based Awards | |
| Outstanding Equity Awards at Fiscal Year-End | |
Equity Awards Exercised and Vested in Fiscal 20172023 | |
| Employee Deferred Compensation | |
| Equity Compensation Plan Information | |
| Senior Officer Severance Plan and Retirement Agreements | |
Change In Control Payments and Other Separation Agreements | |
| CEO Pay Ratio | |
| Pay Versus Performance | |
| Non-Employee Director Compensation | |
| Other Information | |
| Delinquent Section 16(a) Reports | |
EXHIBIT A: First Amendment to the Actuant Corporation 2017 Omnibus Incentive PlanIndependent Public Accountants | |
| Shareholder Proposals | |
| Householding of Annual Meeting Materials | |
| Forward-Looking Statements | |
| Additional Matters | |
ACTUANT CORPORATION
N86W12500 Westbrook Crossing
Menomonee Falls, Wisconsin 53051
(262) 293-1500
PROXY STATEMENT
This Proxy Statement and accompanying proxy are being first mailedsent to
shareholders on or about December 4, 2017.11, 2023.
General InformationGENERAL INFORMATION
This Proxy Statement and accompanying proxy are furnished to the shareholders of Actuant CorporationEnerpac Tool Group Corp. (the “Company”“Company,” “Enerpac,” “we,” or “us”) in connection with the solicitation of proxies by the Board of Directors of the Company (the “Board of Directors” or the “Board”) for use at the virtual Annual Meeting of Shareholders on January 23, 201825, 2024 (the “Meeting”), and at any adjournment thereof. Accompanying this Proxy Statement is a Notice of Annual Meeting of Shareholders and a form of proxy for suchthe Meeting. The Company’s 2023 Annual Report to Shareholders (the “Annual Report”), which includes its Annual Report on Form 10-K for the fiscal year ended August 31, 20172023 (without exhibits), which constitutes the 2017 Annual Report to Shareholders and accompanies this Proxy Statement and contains financial statements and certain other information concerning the Company.
ACCESSING THE VIRTUAL ANNUAL MEETING
Location and Date of AnnualThis year the Meeting
The annual meeting will be held solely by means of remote communication and there will be no in-person meeting location. The Meeting is open to all holders of our common stock as of the Record Date (as defined below). Shareholders will be able to attend and participate in the virtual meeting, including voting their shares and asking questions. To attend and participate in the Meeting, visit www.virtualshareholdermeeting.com/EPAC2024 and enter the 16-digit control number listed on January 23, 2018your proxy card or voting instruction form.
The Meeting will begin promptly at 8:00 a.m. Eastern, Central Time, on January 25, 2024. We encourage you to access the virtual platform prior to the start time to familiarize yourself with the virtual platform and ensure that you can hear the streaming audio. You may log into the virtual platform beginning at 7:45 a.m., Central Time, on January 25, 2024.
The virtual annual meeting is supported across different online browsers and devices (desktops, laptops, tablets and cell phones). Please be certain you have the The Breakers, One South Country Road, Palm Beach, Florida.most updated version of the applicable software and plugins. Also, you should ensure that you have a strong internet connection from wherever you intend to participate in the virtual annual meeting.
If you encounter any difficulties accessing the Meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual shareholder meeting log-in page. Technical support will be available starting at 7:00 a.m., Central Time, on January 25, 2024.
Record Date
RECORD DATE
The record date for shareholders entitled to notice of and to vote at the Meeting is the close of business on November 17, 201720, 2023 (the “Record Date”). As of the Record Date, we had 59,955,297Date, 54,338,046 shares of the Company's Class A common stock were outstanding, which does not include 29,627,622 shares of Class A common stock outstanding.held in treasury. Each share of Class A common stock outstanding on the record dateRecord Date is entitled to one vote on all matters submitted at the Meeting. No other class of capital stock was outstanding on the Record Date.
QUORUM
A majority of the votes entitled to be cast, present by means of remote communication or 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”submitted by banks, brokers or other holders of record holding shares for you as a beneficial owner that are voted by brokers ondo not indicate a vote for some matters, butor all of the proposals because that holder does not on other matters as to whichhave voting authority to vote is withheld from the broker absentand has not received voting instructions from the beneficial owner (“brokeryou (so-called “broker non-votes”) willare also considered to be treated as shares present for purposes of determining whether a quorum exists.
If you hold your shares in an account maintained by a bank, broker or other holder of record (referred to as holding shares in “street name”), these holders are permitted under the presencerules of the New York Stock Exchange to vote your shares on the ratification of the appointment of Ernst & Young LLP as our independent auditor, even if they do not receive voting instructions from you, but are not permitted under the rules of the New York Stock Exchange to vote on Proposals 1, 3 and 4, unless you timely provide them with your voting instructions. It is important, therefore, if you hold your shares through an account maintained by a bank, broker or absenceother holder of a quorum. record that you timely provide your instructions to them so that your vote with respect to these matters may be cast.
The voting requirements and the procedures described in this section and below are based upon provisions of the Wisconsin Business Corporation Law, the Company’s articlesRestated Articles of incorporationIncorporation, as amended, and its bylaws, the rules of the New York Stock Exchange and any other requirements applicable to the matters to be voted upon.
Required Vote
REQUIRED VOTE
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.
directors.
In order to approve the ratification of PricewaterhouseCoopersErnst & Young LLP as our independent auditor for the fiscal year ending August 31, 2024 (Proposal 2), 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,As noted above, banks, brokers or other entities holding your shares for an owner in “street name” are ablepermitted to vote on this proposal, even if noyou do not provide any voting instructions are provided by the beneficial owner. Broker non-votes will have no effect on this proposal.
instructions.
In order to approve, on an amendment toadvisory basis, the 2017 Omnibus Incentive Plancompensation of our named executive officers as disclosed in this Proxy Statement (Proposal 3), the votes cast FOR must exceed the votes cast AGAINST the proposal. Abstentions will have no effect on this proposal. This proposal 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 recordnon-votes will not be permitted to exercise voting discretion, and your shares will not be considered present and entitled tocount in determining the outcome of the vote with respect to this proposal. Broker non-votes will have no effect on this proposal.
In order to approve, on an advisory basis, the compensation of our named executive officers (Proposal 4), the votes cast FOR must exceed the votes cast AGAINST the proposal. The vote on the frequency of future advisory votes to approve the compensation of our named executive officers (Proposal 5)4) will be decided by a plurality of the votes validly cast. Abstentions and broker non-votes will have no effectnot count in determining the outcome of the vote on these proposals. These advisorythis proposal.
Any other business that may properly come before the Meeting, or any adjournment of the Meeting, will be approved if more votes are considered non–routine proposalscast FOR the proposal than are cast AGAINST the proposal. Accordingly, broker non-votes, if any, and abstentions will not be counted in determining the outcome of the votes on any such proposal. The Board of Directors is not aware of any other business to be addressed at the Meeting; however, other business may be addressed if it properly comes before the Meeting.
INTERNET AVAILABILITY OF PROXY MATERIALS
We are pleased to be distributing our proxy materials to shareholders via the Internet under the “notice and access” approach permitted by the rules applicable to banksof the Securities and brokers.Exchange Commission (the “SEC”). As a result, if you hold your shares in “street name,” absent specific voting instructions, your bank, broker or other holderwe are mailing to our shareholders a Notice of record will not be permitted to exercise voting discretion,Internet Availability of Proxy Materials (a “Notice”) about the Internet availability of the proxy materials instead of a full paper copy of the proxy materials. This approach conserves natural resources and your shares will not be considered presentreduces our costs of printing and entitled to vote, with respect to these advisory votes. Broker non-votesdistributing the proxy materials, while providing a convenient method of accessing the materials and voting. All shareholders will have no effectthe ability to access the proxy materials over the Internet and may request to receive a paper copy of the proxy materials by mail. Instructions on these proposals.how to access the proxy materials over the Internet or to request a paper copy may be found in the Notice. Our Proxy Statement and the Annual Report are available at www.proxyvote.com.
Cost of Soliciting Proxies
COST OF SOLICITING PROXIES
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 heldcompensation for the accounts of participantssuch solicitation. Innisfree M&A Incorporated (“Innisfree”) may assist us in the Actuant Corporation 401(k) Plan (the “401(k) Plan”) will be votedsolicitation of proxies and provide us with advice and support related to solicitation. If we engage Innisfree for these services, we do not expect the total costs to us for their services to exceed $20,000.
VOTING PROCEDURES
Via the Internet before the Meeting. If you hold your shares directly—that is, not in accordance withan account maintained by a bank, broker or other holder of record—then you may vote your shares before the Meeting over the Internet by following the instructions on the Notice or, if you requested a paper copy of the participants or otherwise in accordance withproxy materials, the terms of such plan. Shares held for the accountspaper copy of the participants in the Actuant Corporation Deferred Compensation Plan (the “Employee Deferred Compensation Plan”) will be voted by the rabbi trust associated with the Employee Deferred Compensation Plan, as directed by the Company.
Voting Procedures
Via the Internet—Shareholders can vote their shares via the Internet as instructed on the proxy card.card that you received. The Internet procedures are designed to authenticate a shareholder’s identity to allow shareholders to vote their shares and confirm that their instructionsvotes have been properly recorded. Internet voting for shareholders of record is available 24 hours a day and will close at 11:59 p.m. (CST) on January 22, 2018. The Notice instructs you how to access and review all important information in the Proxy Statement and the Annual Report. You will then be directed to select a link where you will be able to vote on the proposals presented. The deadline for Internet voting will be 10:59 p.m., Central Time, on January 24, 2024.
If you hold your shares in “street name” through an account with a bank, broker or other entity, your ability to provide voting instructions via the Internet depends on the voting process of the bank, broker or other entity through which you hold the shares. Please review the voting instruction form from your bank, broker or other entity through which you hold the shares and complete, sign and return the form you received. You should check your voting instruction form to see if telephone or Internet voting is available to you.
By Telephone—Telephone. Shareholders who hold their shares directly may vote via telephone using the toll-free number listed on the proxy card. Voting viaThe deadline for telephone voting will be 10:59 p.m., Central Time, on January 24, 2024. If you hold your shares in “street name” through an account with a bank, broker or other entity, your ability to provide voting instructions by telephone depends on the telephone will close at 11:59 p.m. (CST) on January 22, 2018.voting process of the bank, broker or other entity through which you hold the shares. Please follow their directions carefully.
By Mail—Mail. Shareholders who receivehold their shares directly can vote by mail by first requesting a paper copy of the proxy materials, which will include a proxy card, by following the procedures set forth in the Notice. A shareholder receiving 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. If you hold your shares in “street name” through an account with a bank, broker or other entity, your ability to provide voting instructions by mail depends on the voting process of the bank, broker or other entity through which you hold the shares. Please follow their directions carefully.
At the Annual Meeting—Meeting. Shares held directly in your name as the shareholder of record may be voted by you in person atby attending the AnnualMeeting via the Internet and voting during the Meeting. Shares held beneficially in “street name” through an account with a bank, broker or other entity may be voted by you in person at the Annual Meeting only if you obtain a legal proxy from the bank, broker or other agententity that holds your shares giving you the right to vote the shares and bring such proxy to the Annual Meeting. To attend and participate in the Meeting, visit www.virtualshareholdermeeting.com/EPAC2024 and enter the 16-digit control number listed on your proxy card or voting instruction form. Please have your notice in hand when you access the website and then follow the instructions.
Shares Held in Plans. Shares held for the accounts of participants in the Company’s 401(k) Plan (the “401(k) Plan”) will be voted in accordance with the instructions of the participants or otherwise in accordance with the terms of the 401(k) Plan. Shares held for the accounts of the participants in the Company’s Deferred Compensation Plan (the “Employee Deferred Compensation Plan”) will be voted by the rabbi trust associated with the Employee Deferred Compensation Plan, as directed by the Company.
Revocation of Proxies
REVOCATION OF PROXIES
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, by voting on the Internet after you have given your proxy (only your latest Internet or telephone proxy submitted prior to the Meeting will be counted) or by attending and voting at the Meeting. Attendance at the Meeting, in and of itself, will not constitute a revocation of a proxy.
Please note that any re‑votes by mail or proxy revocations must be received by our Corporate Secretary at Enerpac Tool Group Corp., N86W12500 Westbrook Crossing, Menomonee Falls, Wisconsin 53051 prior to the Meeting in order to be effective.
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 Board of Directors, FOR the election of the directors nominated by the Board of Directors, FOR the Ratificationratification of PriceWaterhouseCoopersthe appointment of Ernst & Young LLP as the Company'sCompany’s independent auditor, FOR the approval of the amendment to the Actuant Corporation 2017 Omnibus Incentive Plan, FOR the approval, on a non-binding basis, of the compensation of our named executive officers 1as described in this Proxy Statement, and for every ONE YEAR, frequency, on a non-binding basis, of the frequency of holding future advisory votes to approve the compensation of our named executive officers and in accordance with the discretion of the persons appointed as proxies on any other matters properly brought before the Meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors currently consists of nineten members. AtDirectors are elected annually for one-year terms. Accordingly, at the Meeting, nineten directors will be elected to serve until the next annual meeting of shareholders and until their successors shall be elected and qualified. The Board of Directors has nominated the ten individuals listed below for election as directors at the Meeting. Each of these nominees is presently serving as a director of the Company and, except for Colleen M. Healy, was most recently elected by the shareholders at the Company’s annual meeting held in February 2023. Ms. Healy was elected as a director by the Board of Directors on May 15, 2023 to fill the vacancy created by the expansion of the size of the board from nine to ten directors that occurred on such date. The selection of Ms. Healy was the result of a deliberative process undertaken by the Governance and Sustainability Committee, and Ms. Healy was first suggested to the Governance and Sustainability Committee, among other candidates, by the Board Advisory Council of the New York Stock Exchange (the "NYSE").
It is the intention of the persons named in the accompanying form of proxy to nominate as directors and, unless otherwise specified in a proxy by a shareholder, to vote such proxy for the election of the persons named below.below, unless otherwise instructed by a shareholder in a completed proxy that is timely submitted. In the event any of the nominees should become unable to serve as a director, an eventuality which management has no reason to believe will occur, proxies may be voted for another nominee. Each person named below is presently serving as a director
DIRECTOR CANDIDATE BIOGRAPHIES AND QUALIFICATIONS
The Board has nominated each of the Company.following individuals for election for a one-year term expiring at the annual meeting of shareholders to be held in 2025.
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| | Alfredo Altavilla Former Executive Chairman of Italia Trasporto Aereo S.p.A. INDEPENDENT DIRECTOR Age: 60 Director since: 2018
| | Other Current Public Company Directorships: •None | | Enerpac Board Committees: •Audit •Compensation
Other Directorships within the Last Five Years: •Telecom Italia Mobile S.p.A. •Recordati S.p.A | |
Mr. Altavilla served as Executive Chairman of Italia Trasporto Aereo S.p.A., a state-owned airline in Italy, from June 2021 until October 2022. His prior executive experience was at Fiat Chrysler, from which he retired in August 2018 after a 29-year career in which he held several senior executive roles, including Chief Operating Officer, Europe, Africa and Middle East; Head of Business Development for Fiat Chrysler Automobiles; and Chief Executive Officer of Iveco, Fiat Chrysler’s trucks and commercial vehicles business. Mr. Altavilla also serves as Senior Advisor to CVC Capital Partners and served as Chairman of Recordati S.p.A., a pharma company listed in Milan and owned by CVC.
Mr. Altavilla brings to the Board extensive operating, business development, new product development and acquisition experience. His expertise in doing business in Europe and the Middle East also provides insights critical to the Board’s oversight of Company operations and growth strategies in those markets. |
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| | Judy L. Altmaier Former President of Exmark Manufacturing Co. INDEPENDENT DIRECTOR Age: 62 Director since: 2019 | | Other Current Public Company Directorships: •Allison Transmission, Inc. | | Enerpac Board Committees: •Audit •Compensation
Other Directorships within the Last Five Years: •None | |
Ms. Altmaier served as the President of Exmark Manufacturing Co., a manufacturer of professional turf-care equipment and a subsidiary of The Toro Company (“Toro”), from 2013 until her retirement in January 2019. Prior to that, she was Vice President, Operations and Quality Management of Toro from 2009 until 2013. Before joining Toro, she spent more than 25 years with Eaton Corporation plc (“Eaton”), holding positions of increasing responsibility including Vice President of Operations, Auto Group Americas during 2009 and Vice President, General Manager Global Engine Valve Division in Turin, Italy from 2007 until 2009. Ms. Altmaier joined Eaton in 1983 as an accountant. Ms. Altmaier chairs the Compensation Committee and serves as a member of the Finance Committee of Allison Transmission, Inc.
Ms. Altmaier brings to the Board her industry experience in manufacturing, operations, supply chain management, mergers and acquisitions and product development and strategy, including in the areas of automation and electrification, developed over her career with Toro and Eaton. In addition, she brings significant experience in international operations and the execution of growth initiatives. |
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| Directors standing for re-election | | Age | | Director Since |
| Randal W. Baker, Chief Executive Officer | | 54 | | 2016 |
| Gurminder S. Bedi, Director | | 70 | | 2008 |
| Danny L. Cunningham, Director | | 62 | | 2016 |
| E. James Ferland, Director | | 50 | | 2014 |
| Richard D. Holder, Director | | 54 | | 2017 |
| R. Alan Hunter, Jr., Director | | 70 | | 2007 |
| Robert A. Peterson, Chairman of the Board, Director | | 61 | | 2003 |
| Holly A. Van Deursen, Director | | 58 | | 2008 |
| Dennis K. Williams, Director | | 71 | | 2006 |
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| | J. Palmer Clarkson Former President and Chief Executive Officer of Bridgestone HosePower LLC INDEPENDENT DIRECTOR Age: 66 Director since: 2018 | | Other Current Public Company Directorships: •CNX Resources Corporation | | Enerpac Board Committees: •Compensation •Governance and Sustainability
Other Directorships within the Last Five Years: •None | |
Mr. Clarkson served as the President and Chief Executive Officer of Bridgestone HosePower LLC, a Florida-based industrial hose service company from 1990 until his retirement in June 2022. Founded by Mr. Clarkson in 1990 and acquired by Bridgestone Hose in 2014, HosePower is the largest U.S.-based service provider of hydraulic and industrial hoses used in construction machinery, mining, oil field equipment and general industrial applications. Mr. Clarkson is the chair of the Environmental, Safety and Corporate Responsibility Committee and serves on the Compensation and Nominating and Corporate Governance committees of CNX Resources Corporation.
Mr. Clarkson’s areas of expertise include financial and operational management, distribution and dealer channel management, business development and capital allocation. Mr. Clarkson brings a significant understanding of the Company’s tools business and sales channels to the Board as well as strong financial and accounting experience. |
Randal W. Baker—Mr. Baker was appointed President and Chief Executive Officer of the Company in March 2016. Prior to joining the Company, Mr. Baker held multiple roles during a six year tenure at Joy Global, including most recently as Chief Operating Officer. Prior to Joy Global, Mr. Baker was an executive with Case New Holland Inc., holding a variety of roles including President and CEO of its agricultural equipment business. Mr. Baker also held diverse leadership roles in marketing, sales, product development and engineering at Komatsu America Corporation, Ingersoll-Rand and Sandvik Corporation.
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| | Danny L. Cunningham Former Partner and Chief Risk Officer of Deloitte & Touche, LLP INDEPENDENT DIRECTOR Age: 68 Director since: 2016 | | Other Current Public Company Directorships: •WEC Energy Group, Inc. | | Enerpac Board Committees: •Audit, Chair •Governance and Sustainability
Other Directorships within the Last Five Years: •None | |
Mr. Cunningham is a retired Partner and former Chief Risk Officer of Deloitte & Touche, LLP, a multinational public accounting firm. He has more than 30 years of experience serving public audit clients in a broad array of industries, including manufacturing. He has practiced in both the United States and China. He is a member of the Audit and Oversight Committee of WEC Energy Group, Inc.
Mr. Cunningham possesses expertise in the areas of financial reporting, auditing, accounting and risk management and also brings a strong knowledge of corporate transactions and a global perspective to the Board. |
Gurminder S. Bedi—Mr. Bedi serves on the board of directors of Kemet Corporation and Blue Bird Corporation and is a retired Vice President of Ford Motor Company. He previously served on the board of directors of Compuware Corporation. 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. Mr. Bedi also brings to the Board 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).
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| | E. James Ferland Former Chairman and Chief Executive Officer of Babcock & Wilcox Enterprises, Inc. INDEPENDENT DIRECTOR NON-EXECUTIVE CHAIRMAN OF THE BOARD Age: 57 Director since: 2014 | | Other Current Public Company Directorships: •None | | Enerpac Board Committees: •Governance and Sustainability, Chair
Other Directorships within the Last Five Years: •None
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Mr. Ferland is the retired Chairman and Chief Executive Officer of Babcock & Wilcox Enterprises, Inc. (“B&W”), a provider of energy and environmental products and services for power and industrial markets worldwide. He held those positions from July 2015, when B&W was spun-off from the Babcock & Wilcox Company (now known as BWX Technologies, Inc.), until March 2018. Mr. Ferland was Chief Executive Officer of Babcock & Wilcox Company from 2012 through the date of the spin-off. He previously held various leadership roles with Westinghouse Electric Company, LLC and PNM Resources, Inc.
With more than 25 years of senior management and engineering experience in diversified industries, Mr. Ferland brings to the Board extensive operations, financial and acquisition experience, knowledge of the energy markets and valuable perspectives from leading a global public company. |
Danny L. Cunningham—Mr. Cunningham is a retired Partner and former Chief Risk Officer of Deloitte & Touche, LLP, a multinational public accounting firm. He has more than 30 years of experience serving public audit clients in a broad array of industries, including manufacturing. He has practiced in both the United States and China. Mr. Cunningham brings expertise in the areas of financial, accounting and auditing matters, knowledge of corporate transactions and a global perspective to the Board.
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| | Colleen M. Healy Former Chief Financial Officer and Principal Accounting Officer of SailPoint Technologies Holdings, Inc. INDEPENDENT DIRECTOR Age: 52 Director since: 2023 | | Other Current Public Company Directorships: •None | | Enerpac Board Committees: •Audit Committee •Governance and Sustainability, Committee
Other Directorships within the Last Five Years: •None
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Ms. Healy is the retired Chief Financial Officer and Principal Accounting Officer of SailPoint Technologies Holding, Inc. (“SailPoint”), an identity and access management software company. She held those positions from March 2022 until the sale of SailPoint in August 2022. From October 2019 until December 2020, Ms. Healy served as the Chief Financial Officer of Basis Global Technologies, Inc. (formerly, Centro, Inc.), a provider of workflow automation and business intelligence software for marketing and advertising functions within enterprises. Prior to 2018, Ms. Healy served as Vice President, Finance of Hillrom Holdings, Inc., Vice President, Investor Relations of TransUnion, and in various positions of increasing responsibility over nearly 20 years at Microsoft Corporation, including as General Manager of U.S. Industry for Financial Services, Head of Investor Relations, and in senior roles within treasury, business development and corporate development.
Ms. Healy has extensive experience in financial and strategic leadership, including serving as chief financial officer of a public company. She has deep experience in investor relations, mergers and acquisitions, capital markets and digital technologies, and brings strong leadership to the Board.
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E. James Ferland—Mr. Ferland is Chairman and Chief Executive Officer of Babcock & Wilcox Enterprises, Inc. (“B&W”), a provider of energy and environmental products and services for power and industrial markets worldwide. Mr. Ferland has held this position since July 2015 when B&W was spun-off from The Babcock & Wilcox Company. Mr. Ferland was President and Chief Executive Officer of The Babcock & Wilcox Company from 2012 through the date of the spin-off. He also served as a director during this time. Mr. Ferland also previously held various leadership roles with Westinghouse Electric Company, LLC and PNM Resources, Inc. With more than 25 years of senior management and engineering experience in diversified industries, Mr. Ferland brings to the Board extensive operations, financial and acquisition experience, knowledge of the energy markets and valuable perspectives from leading a global public company. Mr. Ferland is also a director at B&W.
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| | Richard D. Holder President and Chief Executive Officer of HZO, Inc. INDEPENDENT DIRECTOR Age: 60 Director since: 2017 | | Other Current Public Company Directorships: •Armstrong World Industries, Inc. | | Enerpac Board Committees: •Audit •Compensation, Chair Other Directorships within the Last Five Years: •NN, Inc. | |
Mr. Holder currently serves as President and Chief Executive Officer of HZO, Inc., a provider of thin-film nanocoatings for electronics, a role that he has held since February 2021. Prior to HZO, he was President and Chief Executive Officer of NN, Inc., a publicly traded diversified industrial manufacturing company, from June 2013 to September 2019. Prior to joining NN, Inc., Mr. Holder held a variety of leadership positions during his twelve-year tenure at Eaton, where he last served as President of Eaton Electrical Components Group, a unit of Eaton’s Electrical sector. Prior to joining Eaton, he held leadership roles at US Airways, Allied Signal and Parker Hannifin and served in the U.S. Marine Corps. Mr. Holder also serves on the board of Armstrong World Industries, Inc., a publicly traded manufacturer and designer of ceiling systems for use in the construction and renovation of commercial and residential buildings in the Americas, and on the boards of several private companies.
As a current and former chief executive officer and a seasoned executive with nearly 30 years of international experience across a diverse set of industries and disciplines, Mr. Holder brings to the Board a unique perspective from leading global public companies, along with extensive business, financial and industry experience. |
Richard D. Holder —Mr. Holder is President and Chief Executive Officer of NN Inc, a diversified industrial manufacturing company. Mr. Holder has held this position since joining NN in June 2013. Mr. Holder is a seasoned executive with more than 25 years of international experience across a diverse set of industries and disciplines. Prior to NN, Inc., Mr. Holder held a variety of leadership positions during his twelve year tenure at Eaton Corporation, where he last served as President of Eaton Electrical Components Group, a unit of Eaton’s Electrical Sector. Prior to joining Eaton, he held a variety of leadership roles at US Airways, AlliedSignal and Parker Hannifin. As a sitting Chief Executive Officer, Mr. Holder brings to the Board a unique perspective from leading a global public company, along with extensive business, financial and industry experience. Mr. Holder is also a director for NN, Inc.
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| | Lynn C. Minella Former Executive Vice President & Chief Human Resources Officer of Johnson Controls International plc INDEPENDENT DIRECTOR Age: 65 Director since: 2022 | | Other Current Public Company Directorships: •None | | Enerpac Board Committees: •Compensation •Governance and Sustainability
Other Directorships within the Last Five Years: •None | |
Ms. Minella is an accomplished human resources executive with more than 40 years of global experience across a diverse set of industries. She served as Executive Vice President and Chief Human Resources Officer of Johnson Controls International plc from June 2017 until her retirement in December 2021. Prior to joining Johnson Controls, she served as Group Human Resources Director at BAE Systems plc from June 2012 to June 2017. Prior to BAE Systems, she was with Air Products and Chemicals, Inc. from 2004 until 2012 where she was the Senior Vice President of Human Resources and Communications. Earlier in her career she also held a variety of human resources roles of increasing responsibility at International Business Machines Corporation. Ms. Minella has a Bachelor of Science degree in Industrial and Labor Relations from Cornell University.
Ms. Minella brings extensive global experience in human resources management and human capital development across hardware and software development, services, and industrial and manufacturing organizations. Her experience includes talent acquisition and development, diversity and inclusion, compensation management, succession planning and onboarding executive talent. She brings a firm understanding of corporate governance matters based both on her prior experience as an executive officer of a public reporting company and as a director of an international FTSE public company.
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| | Sidney S. Simmons Corporate Attorney INDEPENDENT DIRECTOR Age: 65 Director since: 2018 | | Other Current Public Company Directorships: •None | | Enerpac Board Committees: •Audit •Governance and Sustainability
Other Directorships within the Last Five Years: •None | |
Mr. Simmons is a seasoned corporate and transactional attorney with over 40 years of experience. He provides legal counseling to a range of corporate clients, assisting them, with mergers and acquisitions, business planning and structuring, and negotiating and implementing complex business transactions, among other matters. He has a long history of volunteer service with various national and local organizations, some of which include serving as a chairman of the Audit Committee and as the Vice Chair of the Board of Directors of Catholic Charities USA and as Chairman of the Board of Directors of St. Vincent’s Health System, Inc., in Jacksonville, Florida.
In addition to his deep and broad knowledge and his experience in executing commercial transactions, he brings experience in corporate governance and legal and regulatory compliance to the Board’s deliberations as well as experience in recruiting and retaining executive talent. |
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 industry to the Board. The Board also benefits from his considerable international business experience, especially related to finance, operations, business development and strategy. Mr. Hunter currently serves on the board of trustees of four mutual fund groups managed by MassMutual Financial Group.
Robert A. Peterson—Mr. Peterson held the position of Chairman of the Board of Barrier Safe Solutions International, Inc, formerly a private equity owned business, from 2011 until it was sold to Ansell Limited in 2014. Mr. Peterson was President and Chief Executive Officer of Norcross Safety Products, 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 Board 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.
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 Board 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. She is currently a director of Bemis Company, Inc., 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 to that he held several executive level roles at General Electric. Mr. Williams brings to the Board 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 Board on executive compensation, financial matters and business innovation. Mr. Williams is currently a director of Owens-Illinois, Inc. and Ametek, Inc.
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| | Paul E. Sternlieb President and Chief Executive Officer, Enerpac Tool Group Corp. MANAGEMENT Age: 51 Director since: 2021 | | Other Current Public Company Directorships: •Kennametal Inc. | | Enerpac Board Committees: •None
Other Directorships within the Last Five Years: •None | |
Mr. Sternlieb was appointed President and Chief Executive Officer of the Company and a member of the Board effective October 2021. He joined Enerpac from John Bean Technologies Corporation (“JBT”), where he served since October 2017 as Executive Vice President and President of its Protein business. Prior to joining JBT, Mr. Sternlieb was Group President, Global Cooking in the Food Equipment Group at Illinois Tool Works Inc. from 2014 to 2017 and a Vice President and General Manager with Danaher Corporation from 2011 to 2014. Earlier in his career, he also held management roles with H.J. Heinz Company and was a consultant with McKinsey & Company. Mr. Sternlieb also serves on the board of directors of Kennametal Inc., an industrial technology company traded on the New York Stock Exchange. He holds an M.B.A. from, and was a Palmer Scholar at, the Wharton School and dual undergraduate degrees in Economics and Computer Science from the Jerome Fisher Program in Management & Technology at the University of Pennsylvania.
Mr. Sternlieb brings extensive operational and international experience to the Company and Board and has an established record of using a systematic approach to delivering growth and margin expansion at industrial businesses. |
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTEVOTING “FOR” THE ELECTION OF EACH OF THE NINETEN NOMINEES.
PROPOSAL 2
RATIFICATION OF SELECTIONAPPOINTMENT OF INDEPENDENT AUDITORS
PricewaterhouseCoopersErnst & Young LLP anhas been our independent registered public accounting firm since 2020, and has performed an audit of our consolidated financial statements for the fiscal year ended August 31, 20172023 and the effectiveness of our internal control over financial reporting as of August 31, 2017.2023. The Audit Committee of the Board of Directors has selected PricewaterhouseCoopersrecommends that the shareholders ratify the appointment of Ernst & Young LLP to serve as our independent registered public accounting firm for fiscal 2018audit the consolidated financial statements of the Company and the Committee is presenting this selection to shareholderseffectiveness of the Company’s internal control over financial reporting for ratification.
the fiscal year ending August 31, 2024. Shareholder ratification of the selectionappointment of PricewaterhouseCoopersErnst & Young LLP as the Company’s independent auditor is not required by the Company'sCompany’s bylaws, however,but the Audit Committee is submitting the selectionappointment of PricewaterhouseCoopersErnst & Young LLP for shareholder ratification because the Audit Committee values shareholders’ views on the Company’s independent auditors. If the shareholders fail to ratify the selection,appointment, the Audit Committee will reconsider whether or not to retain PricewaterhouseCoopersErnst & Young LLP. The Audit Committee also retains the right to direct the appointment of a different independent accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its shareholders.
The Audit Committee is solely responsible for retaining or terminating the Company’s independent auditors. A representative of PricewaterhouseCoopersErnst & Young LLP will be present atis expected to attend the Annual Meeting and will have the opportunity to make a statement and respond to appropriate questions.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT AUDITORS.
PROPOSAL 3
VOTE UPON AN AMENDMENT TO THE ACTUANT CORPORATION 2017 OMNIBUS INCENTIVE PLAN
Introduction
On October 17, 2017, our Board of Directors approved, subject to shareholder approval, the First Amendment to the Actuant Corporation 2017 Omnibus Incentive Plan (the “Omnibus Plan”), which amends the permitted terms for Performance-Based Awards under Section 11 of the Omnibus Plan and provides that cash-based incentive awards may be granted as Performance-Based Awards under the Omnibus Plan. A “Performance-Based Award” is an equity-based or cash-based award granted in a manner such that it qualifies for the performance-based compensation exemption from Section 162(m) of the Code.
Previously, the Compensation Committee has awarded cash incentive compensation under the Actuant Corporation Executive Officer Bonus Plan. We are seeking shareholder approval so that both equity-based and cash-based awards be granted under the Omnibus Plan as Performance-Based Awards, which will simplify and unify our plan administrative practices.
If the Amendment is approved by our shareholders, all equity-based and cash-based awards that are intended to qualify as “performance-based compensation” will be granted as Performance-Based Awards under the Omnibus Plan after the 2018 Annual Meeting. In addition, no further awards would be made under the Actuant Corporation Executive Officer Bonus Plan.
If the Amendment is not approved, we will be unable to grant future cash-based incentive awards under the Omnibus Plan or Executive Officer Bonus Plan as “performance-based compensation” exempt from the $1 million deduction limitation under Section 162(m).
Material Terms for Performance Goals under Performance-Based Awards
As defined in the tax rules, stockholders must approve each of the material terms of performance goals if the Company is to obtain tax deductions for the specified forms of performance-based compensation for executives whose total annual compensation exceeds $1 million, including (i) the employees eligible to receive compensation, (ii) the description of the business performance criteria on which the performance goals are based and (iii) the maximum amount of performance-based compensation that can be paid to an employee. Each of these aspects is discussed below.
The following is a summary of the material features of the Amendment. The following summary is qualified in its entirety by reference to the terms of the Amendment, which is attached to this proxy statement as Exhibit A.
Group of Employees Covered
Only executive officers shall be eligible to receive cash-based incentive compensation in the form of Performance-Based Awards.
Performance Criteria
The Amendment sets forth a unified set of performance criteria when granting either cash-based or equity-based incentive compensation as Performance-Based Awards under the Omnibus Plan. Performance criteria that can be used for Performance-Based Awards (collectively “Performance Objectives”) may be absolute in their terms or measured against or in relationship to other companies or other external or internal measures. Performance Objectives may be designated to include or exclude the impact of extraordinary charges, losses from discontinued operations, restatements and accounting changes and other special charges such as restructuring expenses, currency fluctuations, acquisitions and divestitures and related expenses (including without limitation expenses related to goodwill and other intangible assets), exchange rate effects, the effect of changes in tax laws, corporate tax rates, accounting principles or other applicable laws, foreign exchange gains and losses, stock offerings, stock repurchases, strategic loan loss provisions, a change in the Company's fiscal year, litigation or claim judgments or settlements, and other unusual, transition, one-time and/or non-recurring items of gain or loss that are separately identified and quantified in the Company’s audited financial statements. However, notwithstanding the preceding sentence, unless the Compensation Committee determines otherwise prior to the end of the applicable time for establishing Performance Objectives for an Award under Section 162(m), to the extent any such item affects any Performance Objective applicable to a Performance-Based Award, such item shall be automatically excluded or included in determining the extent to which a performance goal has been achieved, whichever will produce the higher payout under an Award (subject to any exercise of “negative discretion” by the Compensation Committee solely with respect to cash-based incentive compensation).
Performance Objectives with respect to a Performance-Based Award may include any one or more of the following objectives or combination thereof (or an equivalent metric), as established by the Compensation Committee in its sole discretion: (i) achieving a target level of Company net sales; (ii) achieving a target level of earnings (including net earnings; gross earnings; earnings before
certain deductions, such as interest, net financing costs, taxes, depreciation, or amortization; or earnings per share or diluted earnings per share); (iii) achieving a target level of income (including net income or income before consideration of certain factors, such as overhead) or a target level of profit margin or profits (operational, net or gross profits for the Company, an Affiliate, or a business unit) ; (iv) achieving a target return on the Company’s (or an Affiliate’s) sales, revenues, capital, assets, or shareholders’ equity; (v) revenue growth (whether including or excluding the impact of foreign currency translation changes), (vi) maintaining or achieving a target level of appreciation in the price of the shares of Common Stock; (vii) achieving a target market share for the Company (or an Affiliate); (viii) achieving or maintaining a share price that meets or exceeds the performance of specified stock market indices or other benchmarks over a specified period; (ix) achieving a level of share price, earnings, or income performance that meets or exceeds performance in comparable areas of peer companies over a specified period; (x) achieving specified reductions in costs or targeted levels in costs; (xi) achieving specified improvements in collection of outstanding accounts or specified reductions in non-performing debts; (xii) achieving a level of cash flow or working capital; (xiii) introducing one or more products into one or more new markets; (xiv) acquiring a prescribed number of new customers in a line of business; (xv) achieving a prescribed level of productivity within a business unit; (xvi) completing specified projects within or below the applicable budget; (xvii) completing acquisitions of other businesses or integrating acquired businesses; (xviii) expanding into other markets; (xix) asset carrying charge, as defined in the Bonus Plan or otherwise; (xxi) free cash flow and (xxii) net assets employed, as defined in the Bonus Plan or otherwise. Any criteria used may be measured, as applicable, (A) in absolute terms, (B) in relative terms (including without limitation by the passage of time, comparison of the Company’s performance as to one or more of the objectives listed above against another listed objective (such as EBITDA as a percentage of sales) and/or against another company or companies), (C) on a per-share basis, (D) against the performance of the Company as a whole or a segment of the Company, (E) on a pre-tax or after-tax basis, and/or (F) on a GAAP or non-GAAP basis.
Cash Incentive Awards
The Amendment also allows for Cash Incentive Awards to be granted under the Omnibus Plan. A “Cash Incentive Award” is a cash bonus opportunity awarded by the Compensation Committee pursuant to which an executive officer may become entitled to receive an amount of cash denominated in U.S. dollars or another currency based on satisfying one or more performance goals and vesting requirements as are specified in the Award Agreement or, if no Award Agreement is entered into with respect to the Cash Incentive Award, other documents evidencing the Award. A Cash Incentive Award may, but need not, be granted as a Performance-Based Award under Section 11 of the Plan. Cash Incentive Awards may be granted alone or in tandem with other awards granted under the Omnibus Plan. Cash Incentive Awards may be granted only to executive officers.
Per-Person Maximum Limits
An executive officer may receive no more than $2,500,0000 with respect to a Cash Incentive Award during a calendar year. All other limits under the Omnibus Plan for other forms of Performance-Based Awards will remain the same under the Amendment. In any calendar year, an eligible employee or director may receive, under the Omnibus Plan, stock options or stock appreciation rights with respect to no more than 1,000,000 shares of our common stock. In addition, in any calendar year, an eligible employee or director may receive restricted stock, restricted stock units, unrestricted grants of shares or other similar awards (whether performance-based or time-vested) with respect to no more than 500,000 shares of our common stock. Notwithstanding the foregoing, for an eligible outside director, the aggregate grant date fair value of awards granted to such an individual under the Omnibus Plan, as amended, during any calendar year, along with any regular cash retainer or meeting fees paid to such individual during the calendar year, shall not exceed $700,000. In the event an individual employee becomes an outside director (or vice versa) during a calendar year, the limit set forth in the immediately preceding sentence shall not apply to awards granted to such an individual in the individual’s capacity as an employee.
Summary of Other Plan Provisions
The following is a summary of the other material terms of the Omnibus Plan, which was approved by stockholders at the 2017 Annual Meeting. A copy of the Omnibus Plan can be accessed at: https://www.sec.gov/Archives/edgar/data/6955/000000695516000087/atuproxyfy2016.htm.
Types of Awards
Awards under the Plan may consist of any combination of stock options, stock appreciation rights, restricted stock, restricted stock units, other stock-based awards and cash incentive awards. As used in this section, the phrase “other stock-based awards” means all awards other than stock options, stock appreciation rights, restricted stock and restricted stock units.
Share Reserve
Our shareholders approved 4,325,000 shares of our common stock for awards under the Omnibus Plan at the Company’s 2017 Annual Meeting. This amount was in addition to the number of shares of our common stock subject to awards outstanding under our
preexisting stock plans that become available for future grant under the Omnibus Plan because they are forfeited or cancelled. The number of shares that remained available for grant under the Plan and all other equity compensation plans we sponsor as of the end of our last fiscal year are set forth below following this Proposal under the heading “Equity Compensation Plan Information.”
Administration
The Omnibus Plan will be administered by the Compensation Committee of our Board of Directors. The Omnibus Plan gives the Compensation Committee discretion to make awards under the Omnibus Plan, to determine the type, size and the terms of awards, to determine the criteria for vesting and exercisability, to establish rules for the administration of the Omnibus Plan, and to make any other determinations that it deems necessary or desirable for the administration of the Omnibus Plan.
Eligibility
The persons who are eligible to participate in the Omnibus Plan include directors and employees (including officers) of the Company and its subsidiaries. Approximately 400 employees and 8 non-management directors are eligible to participate in the Plan. However, only non-employee directors and employees selected by the Compensation Committee will be granted awards under the Plan. The number of eligible employees is expected to increase over time based upon the future growth and needs of the Company.
Stock Options
Stock options granted under the Omnibus Plan may be either incentive stock options, which are intended to satisfy the requirements of Section 422 of the Internal Revenue Code, or non-qualified stock options, which are not intended to meet those requirements. The exercise price of a stock option may not be less than 100% of the fair market value of our common stock on the date of grant and the term may not be longer than 10 years, subject to certain rules applicable to incentive stock options; provided, that if a stock option other than an incentive stock option has an expiration date within 3 days of a Company “black-out period,” the expiration date of such stock option shall be extended for a period of 30 days following the end of the “black-out period” or such longer period as permitted by the Compensation Committee. The Omnibus Plan prohibits the repricing of outstanding stock options. Grantees will not be entitled to receive any dividends or other distributions paid with respect to a stock option. Award agreements for stock options may include rules for the effect of a termination of service on the option and the term for exercising stock options after any termination of service. No option may be exercised after the end of the term set forth in the award agreement.
Stock Appreciation Rights
A stock appreciation right entitles the grantee to receive, with respect to a specified number of shares of common stock, any increase in the value of the shares from the date the award is granted to the date the right is exercised. The base price of a stock appreciation right may not be less than 100% of the fair market value of our common stock on the date of grant and the term may not be longer than 10 years. Except as otherwise provided by the Compensation Committee, stock appreciation rights will only be settled in shares of our common stock. Grantees will not be entitled to receive any dividends or other distributions paid with respect to a stock appreciation right. Award agreements for stock appreciation rights may include rules for the effect of a termination of service on the stock appreciation right and the term for exercising stock appreciation rights after any termination of service. No stock appreciation right may be exercised after the end of the term set forth in the award agreement.
Restricted Stock
Restricted stock is common stock that is subject to restrictions, including a prohibition against transfer and a substantial risk of forfeiture, until the end of a “restricted period” during which the grantee must satisfy certain vesting conditions (which may include attaining certain performance goals). Unless otherwise determined by the Compensation Committee, if the grantee does not satisfy the vesting conditions by the end of the restricted period, the restricted stock will be forfeited. Restricted stock awards in excess of 5% of the number of shares available for awards under the Omnibus Plan that are conditioned on a participant’s continued employment with the Company or one of its affiliates will not become vested earlier than one year from the date of grant. During the restricted period, the holder of restricted stock has the right to vote the shares of restricted stock but will not have the right to receive dividends with respect to such shares, unless, in each case, otherwise provided for by the Compensation Committee.
Restricted Stock Units
A restricted stock unit entitles the grantee to receive common stock after a “restricted period” during which the grantee must satisfy certain vesting conditions (which may include attaining certain performance goals). Unless otherwise determined by the Compensation Committee, if the grantee does not satisfy the vesting conditions by the end of the restricted period, the restricted stock unit will be forfeited. The Compensation Committee is authorized (but not required) to grant holders of restricted stock units the right to receive dividend equivalents on the underlying common stock. Awards of restricted stock units in excess of 5% of the number of
shares available for awards under the Omnibus Plan that are conditioned on a participant’s continued employment with the Company or one of its affiliates will not become vested earlier than one year from the date of grant.
Other Equity-Based Awards
The Omnibus Plan also authorizes the Compensation Committee to grant other types of equity-based compensation, including deferred stock units, unrestricted shares, and other awards that are convertible into our common stock. For example, the Compensation Committee may grant awards that are based on the achievement of performance goals. Other such awards in excess of 5% of the number of shares available for awards under the Omnibus Plan that are conditioned upon a participant's continued employment with the Company or one of its affiliates will not become vested earlier than one year from the date of grant.
Amendment and Termination
Our Board may amend or terminate the Omnibus Plan at any time. No amendment that increases the total number of shares of common stock that may be granted under the Omnibus Plan, increases the maximum number of shares of common stock that may be issued to any individual participant, or amends the Omnibus Plan provision that prohibits repricing of options or stock appreciation rights without shareholder approval will be effective unless it is approved by our shareholders. Without the consent of an affected participant, no action may adversely affect in a material manner any right of such participant under any previously granted award.
Tax Information
Equity-based and cash-based awards granted under the Omnibus Plan may be, but are not required to be, structured to qualify as performance-based compensation under Section 162(m) of the Code. Awards must satisfy the conditions set forth in Section 162(m) of the Code to qualify as “performance-based compensation”, and stock options and other awards must be granted under the Omnibus Plan by a committee consisting solely of two or more “outside directors” (as defined under Section 162(m) regulations) and must satisfy the Omnibus Plan’s limit on the total number of shares that may be awarded to any one participant during a year. For awards other than stock options and stock appreciation rights to qualify, the grant, issuance, vesting, or retention of the award must be contingent upon satisfying one or more of the performance criteria set forth in the Omnibus Plan, as established and certified by a committee consisting solely of two or more “outside directors.” The rules and regulations promulgated under Section 162(m) are complicated and subject to change from time to time, and may apply with retroactive effect. In addition, a number of requirements must be met in order for particular compensation to so qualify. As such, there can be no assurance that any compensation awarded or paid under the Plan will be deductible under all circumstances.
New Plan Benefits
Because of the discretionary nature of any future awards to executive officers under the Plan, the amount of awards to be made after the 2018 Annual Meeting is not determinable at this time.
Reasons for Approval
The Board of Directors believes that the approval of the Amendment will benefit the Company by simplifying plan administration and allowing our Compensation Committee to grant compensation in ways that will preserve tax deductions for the Company on certain types of equity-based and cash-based incentive compensation.
Vote Required for Approval
A quorum being present, the affirmative vote of a majority of the votes cast is necessary to approve the material terms of the performance goals and provision for cash awards under the Omnibus Plan.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVALVOTING “FOR” RATIFICATION OF THE AMENDMENT TO THE ACTUANT CORPORATION 2017 OMNIBUS INCENTIVE PLAN.APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT AUDITORS.
PROPOSAL 43
ADVISORY VOTE TO APPROVE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
We are asking our shareholders to approve, on a non-binding advisory basis, the compensation of our Namedthe executive officers named in the Summary Compensation Table included in this Proxy Statement (the “Named Executive Officers ("NEOs"Officers” or “NEOs”), as disclosed in the Executive Compensation Discussion and Analysis section and the accompanying compensation tables and narrative discussion contained in this proxy statement.Proxy Statement. The Talent Development and Compensation Committee has overseen the development and implementation of our executive compensation programprograms, which isare designed to drive long-term success and increase shareholder value. We utilize our executive compensation programprograms 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.
Our overall executive compensation program is founded on threeseveral guiding principles, which we believe emphasizesemphasize a pay forpay-for-performance philosophy, reflect market practice and incentivize both short-term and long-term performance philosophy:while discouraging excessive risk-taking:
•Executive compensation is aligned with our overall business strategy of driving growth opportunities andopportunities; improving operating metrics,metrics; focusing on sales growth, margin expansion, earnings, cash flow generation and return on invested capital.capital; and promoting a values-driven business culture that emphasizes respect for all employees, inclusion, safety and ethical behavior.
•Base pay levels and incentive compensation opportunities provide an appropriate mix of compensation elements, are aligned with each executive’s role and responsibilities and are regularly benchmarked to market practice for peer companies.
•Key executives responsible for establishing and executing our business strategy should have incentive compensation opportunities that align with both annual commitments to investors and long-term shareholder value creation. PerformanceThe annual bonus program, performance equity awards, a compensation clawback policy,policies, stock ownership requirements, anti-hedging policy and multi-year vesting periods on equity awards are important components of that alignment.
•Signing bonuses and initial equity awards are offered to attract executive talent to join the Company in senior executive positions.
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• | Our overall compensation targets reflect our intent to pay executive Total Direct Compensation (base salary, annual bonus opportunity and the value of share based awards) at approximately the 50th percentile of pay. In some cases, to attract and retain top talent, we may set target compensation over market rates (generally not to exceed the 75th percentile) to align with an individual’s experience profile and reflect the complexities of certain roles.•Equity awards represent a significant portion of compensation for key executives to provide long-term retention incentives, with at least 50% of target annual equity awards vesting based on achievement of performance goals (for Mr. Sternlieb, the proportion was 60%). •Our overall compensation targets, not including special equity awards for retention and initial awards to attract executive talent to join the Company, reflect our intent to pay executive Total Direct Compensation (base salary, annual bonus opportunity and the value of share-based awards) at approximately the 50th percentile of pay for our peer group, but the Talent Development and Compensation Committee retains discretion to consider factors such as individual performance, tenure, experience and responsibility to ensure an executive’s compensation is competitively positioned and thereby to attract and retain top talent reflective of our communities, industry, customers and values. |
We believe that our pay-for-performance objectives result in compensation that reflects our financial results, stock price performance and other performance objectives described in the Compensation Discussion and Analysis. Accordingly, the Board of Directors requests our shareholders to approve, on an advisory basis, the compensation of our NEOs. Although the outcome of this advisory vote is non-binding, the Talent Development and Compensation Committee and the Board of Directors will review and consider the outcome, among other factors, when making future compensation decisions for our NEOs.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTEVOTING “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THE EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS SECTION AND THE ACCOMPANYING COMPENSATION TABLES AND NARRATIVE DISCUSSION CONTAINED IN THIS PROXY STATEMENT.
PROPOSAL 54
ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES TO APPROVE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
As required by Section 14A of the Securities Exchange Act of 1934, we are asking our shareholders to vote, on a non-binding, advisory basis, on the frequency of future advisory votes to approve the compensation of our named executive officers.NEOs. Specifically, shareholders may vote on whether the advisory vote to approve the compensation of our named executive officersNEOs should occur every one, two or three years.
The Board of Directors has given serious consideration to the recommended frequency of future advisory votes on the compensation of our named executive officers,NEOs, including consideration of the results of prior shareholder voting specific to advisory votes on the frequency of approving the compensation of our named executive officers.NEOs. After considering the benefits and consequences of each option for holding the advisory vote on the compensation of our named executive officers,NEOs, the Board of Directors recommends that shareholders approve holding the advisory vote on the compensation of our named executive officersNEOs once every year.
An annual advisory vote on the compensation of our named executive compensationNEOs will allow us to obtain information on shareholders’ views of the compensation of our named executive officersNEOs on a current basis. Additionally, an annual advisory vote on the compensation of our named executive officersNEOs will provide the Board of Directors and the Talent Development and Compensation Committee with more direct input from shareholders on our executive compensation policies, practices and procedures. Finally, an annual advisory vote on the compensation of our named executive officersNEOs is consistent with our objectives of engaging in regular dialogue with our shareholders on corporate governance matters, including our executive compensation philosophy, policies and programs.
For the reasons discussed above, the Board of Directors recommends that shareholders vote in favor of holding an advisory vote on the compensation of our named executive officersNEOs once every year. When voting on the frequency of the advisory vote on the compensation of our named executive officers,NEOs, shareholders should understand that they are not voting “for” or “against” the recommendation of the Board of Directors to hold the advisory vote once every year. Rather, shareholders will have the option to choose whether to approve holding future advisory votes on the compensation of our named executive officersNEOs every one, two or three years, or to abstain entirely from voting on the matter.
Although the outcome of the advisory vote on the frequency of the advisory vote on the compensation of our named executive officersNEOs is non-binding, our Board of Directors will review and consider the outcome of the vote, among other factors, when making future decisions regarding the frequency of advisory votes on executive compensation.compensation of our NEOs.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE OF “1EVERY “ONE YEAR” FOR THE FREQUENCY OF FUTURE ADVISORY VOTES TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.
CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of October 15, 2017,31, 2023, 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 the Company's Class A common stock, by the directors, and nominees for director, by each current and former executive officer of the Company named in the Summary Compensation Table below, and by the Company’s directors and executive officers and directorsemployed at October 31, 2023 as a group. Information with respect to the beneficial ownership of an executive officer not employed as of October 31, 2023 is presented as of the date of the former executive officer's termination of service.
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Beneficial Owner (1) | | Amount and
Nature | | Percent of
Class |
| More Than Five Percent Shareholders: | | | | | | |
BlackRock Inc. 55 East 52nd Street New York, New York 10055 | | 8,943,831 | | | (2) | | 16.43% |
The Vanguard Group, Inc.
100 Vanguard Boulevard
Malvern, Pennsylvania 19355 | | 6,474,672 | | | (3) | | 11.90% |
T. Rowe Price Investment Management, Inc.
101 East Pratt Street
Baltimore, Maryland 21202 | | 5,411,147 | | | (4) | | 9.94% |
Clarkston Capital Partners, LLC, et al.
91 West Long Lake Road
Bloomfield Hills, Michigan 48304 | | 5,005,747 | | | (5) | | 9.20% |
| | | | | | |
| Officers and Directors: | | | | | | |
| Alfredo Altavilla, Director | | 24,542 | | | | | * |
| Judy L. Altmaier, Director | | 15,873 | | | (6) | | * |
| J. Palmer Clarkson, Director | | 33,203 | | | (7) | | * |
| Anthony P. Colucci, Executive Vice President and Chief Financial Officer | | 3,437 | | | | | * |
| Danny L. Cunningham, Director | | 57,046 | | | (8) | | * |
| James P. Denis, Executive Vice President, General Counsel, Secretary and Chief Compliance Counsel | | 3,668 | | | | | * |
| E. James Ferland, Non-Executive Chair of the Board of Directors | | 91,161 | | | (9) | | * |
| Colleen M. Healy, Director | | — | | | (10) | | * |
| Richard D. Holder, Director | | 30,096 | | | (11) | | * |
| Lynn C. Minella, Director | | 11,820 | | | (12) | | * |
| Sidney S. Simmons, Director | | 40,651 | | | (13) | | * |
| Paul E. Sternlieb, Director, President and Chief Executive Officer | | 146,801 | | | | | * |
| Benjamin J. Topercer, Executive Vice President and Chief Human Resources Officer | | 9,567 | | | | | * |
| Markus Limberger, former Executive Vice President, Operations | | 5,808 | | | | | * |
| Barbara G. Bolens, former Executive Vice President and Chief Strategy Officer | | 41,711 | | | (14) | | * |
| All Directors and Executive Officers employed as of October 31, 2023 as a group (14 persons) | | 473,673 | | | (15) | | * |
(1)Unless otherwise noted, the specified person has sole voting power and/or dispositive power over the shares shown as beneficially owned.
(2)This information is based on a Schedule 13G amendment filed with the SEC on January 26, 2023 by BlackRock, Inc. reporting beneficial ownership as of December 31, 2022. BlackRock, Inc. reports beneficial ownership of 8,943,831 shares, with sole voting power over 8,880,549 shares and sole dispositive power over 8,943,831 shares. The Schedule 13G was filed by Blackrock, Inc. as a parent holding company with respect to the following subsidiaries: BlackRock Advisors, LLC, Aperio Group, LLC, BlackRock (Netherlands) B.V., BlackRock Fund Advisors, BlackRock Institutional Trust Company, National Association, BlackRock Asset Management Ireland Limited, BlackRock Financial Management, Inc., BlackRock Asset Management Schweiz AG, BlackRock Investment Management, LLC, BlackRock Investment Management (UK) Limited, BlackRock Asset Management Canada Limited, BlackRock Investment Management (Australia) Limited and BlackRock Fund Managers Ltd. The Schedule 13G indicates that BlackRock Fund Advisors beneficially owns 5% or greater of the outstanding shares of our common stock.
(3)This information is based on a Schedule 13G amendment filed with the SEC on February 9, 2023 by The Vanguard Group, Inc. reporting beneficial ownership as of December 30, 2022. The Vanguard Group, Inc. reports beneficial ownership of 6,474,672 shares, with sole voting power over 0 shares, shared voting power over 97,668 shares, sole dispositive power over 6,324,840 shares and shared dispositive power over 149,832 shares.
(4)This information is based on a Schedule 13G amendment filed with the SEC on February 14, 2023 by T. Rowe Price Investment Management, Inc. reporting beneficial ownership as of December 31, 2022. T. Rowe Price Investment Management, Inc. reports beneficial ownership of 5,411,147 shares, with sole voting power over 1,647,272 shares and sole dispositive power over 5,411,147 shares.
(5)This information is based on a Schedule 13G amendment filed with the SEC on February 14, 2023 by Clarkston Capital Partners, LLC (“CCP”), Clarkston Companies, Inc. (“CC”), Modell Capital LLC (“MC”), Jeffrey A. Hakala, Gerald W. Hakala and Jeremy J. Modell reporting beneficial ownership as of December 31, 2022. Each of CCP, CC, MC, Jeffrey A. Hakala, Gerald W. Hakala and Jeremy J. Modell reports beneficial ownership of 5,005,747 shares, with sole voting power over 0 shares, shared voting power over 4,899,522 shares, sole dispositive power over 0 shares and shared dispositive power over 5,005,747 shares. The Schedule 13G amendment further reports that CCP is an investment adviser, that the securities reported therein are held in the accounts of CCP’s discretionary clients or in
an account over which a control person of CCP has beneficial ownership, that the sole members of CCP are CC and MC, that the sole owners of CC are Jeffrey A. Hakala and Gerald W. Hakala, and the sole member of MC is the Jeremy J. Modell Revocable Living Trust.
(6)Includes 9 phantom stock units held in the Outside Directors’ Deferred Compensation Plan, which are settled in the Company’s Class A common stock, generally within 60 days following the director’s termination of service.
(7)Includes 8,947 phantom stock units held in the Outside Directors’ Deferred Compensation Plan, which are settled in the Company’s Class A common stock, generally within 60 days following the director’s termination of service
(8)Includes 2,930 shares issuable pursuant to options exercisable currently or within 60 days of October 31, 2023. Also includes 23,617 phantom stock units held in the Outside Directors’ Deferred Compensation Plan, which are settled in the Company’s Class A common stock, generally within 60 days following the director’s termination of service.
(9)Includes 11,029 shares issuable pursuant to options exercisable currently or within 60 days of October 31, 2023. Also includes 12,494 phantom stock units held in the Outside Directors’ Deferred Compensation Plan, which are settled in the Company’s Class A common stock, generally within 60 days following the director’s termination of service.
(10)Ms. Healy was elected as a director effective on May 15, 2023.
(11)Includes 9 phantom stock units held in the Outside Directors’ Deferred Compensation Plan, which are settled in the Company’s Class A common stock, generally within 60 days following the director’s termination of service
(12)Includes 5,351 phantom stock units held in the Outside Directors Deferred Compensation Plan, which are settled in the Company’s Class A common stock, generally within 60 days following the director’s termination of service.
(13)Includes 14,078 phantom stock units held in the Outside Directors’ Deferred Compensation Plan, which are settled in the Company’s Class A common stock, generally within 60 days following the director’s termination of service.
(14)Ms. Bolens ceased serving as Executive Vice President and Chief Strategy Officer on April 1, 2023. Shares reported as beneficially owned by Ms. Bolens are as of the date immediately prior to the date she ceased serving as an executive officer of the Company and include 20,735 restricted stock units that were subject to accelerated vesting upon her departure.
(15)Includes 13,959 shares issuable pursuant to options exercisable currently or within 60 days of October 31, 2023. Also includes 64,505 phantom stock units held in the Outside Directors’ Deferred Compensation Plan, which are settled in the Company’s Class A common stock, generally within 60 days following the director’s termination of service.
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. 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:
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| | | | | | |
| Beneficial Owner (1) | | Amount and Nature | | | | Percent of Class |
| Five Percent Shareholders: | | | | | | |
Blackrock, Inc. 55 East 52nd Street New York, NY 10022
| | 6,928,942 | | (2) | | 11.6% |
Southeastern Asset Management, Inc. 6410 Poplar Avenue, Suite 900 Memphis, TN 38119 | | 5,900,024 | | (2) | | 9.9% |
Vanguard Group, Inc. 100 Vanguard Boulevard Malvern, Pennsylvania 19355 | | 5,310,943 | | (2) | | 8.9% |
Pzena Investment Management, LLC
320 Park Avenue, 8th Floor
New York, NY 10022 | | 3,917,524 | | (2) | | 6.5% |
Fuller & Thaler Asset Management Inc.
411 Borel Avenue - 300
San Mateo, CA 94402 | | 3,150,941 | | (2) | | 5.3% |
| | | | | | | |
| Named Executive Officers and Director Nominees: | | | | | | |
| Randal W. Baker, President and Chief Executive Officer | | 39,876 | | (3) | | * |
| Gurminder S. Bedi, Director | | 68,122 | | (4) | | * |
| Danny L. Cunningham, Director | | 3,226 | | (5) | | * |
| Rick T. Dillon, Executive Vice President and Chief Financial Officer | | 703 | | (6) | | * |
| E. James Ferland, Director | | 22,758 | | (7) | | * |
| Richard D. Holder, Director | | — | | | | * |
| R. Alan Hunter, Jr., Director | | 79,258 | | (8) | | * |
| Andrew G. Lampereur, Former Executive Vice President and Chief Financial Officer | | 459,643 | | (9) | | * |
| Robert A. Peterson, Chairman of the Board of Directors | | 132,825 | | (10) | | * |
| Stephen J. Rennie, Former Executive Vice President, Industrial Segment | | 108,369 | | (11) | | * |
| Roger A. Roundhouse, Executive Vice President, Engineered Solutions Segment | | 31,905 | | (12) | | * |
| Eugene E. Skogg, Former Executive Vice President, Human Resources | | 116,704 | | (13) | | * |
| Holly A. Van Deursen, Director | | 69,147 | | (14) | | * |
| Dennis K. Williams, Director | | 76,122 | | (15) | | * |
| | | | | | | |
| All Directors and Current Executive Officers as a group (13 persons) | | 652,360 | | (16) | | 1.1% |
| |
(1)
| Unless otherwise noted, the specified person has sole voting power and/or dispositive power over the shares shown as beneficially owned. |
| |
(2)
| Share ownership, as of September 30, 2017, based on a report issued to the Company by a third party service provider. |
| |
(3)
| Includes 20 shares held in the 401(k) Plan. Excludes 1,080 phantom stock units held in the Employee Deferred Compensation Plan, which are settled in Actuant common stock no less than six months following termination of employment. Mr. Baker does not have any voting or dipositive power with respect to the phantom stock units. |
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(4)
| Includes 5,000 shares held by a trust. Also includes 51,749 shares issuable pursuant to options exercisable currently or within 60 days of October 15, 2017. |
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(5)
| Includes 3,226 phantom stock units held in the Outside Directors’ Deferred Compensation Plan, which are settled in Actuant common stock, generally within 60 days following the director’s termination of service. |
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(6)
| Includes 703 shares held in the 401(k) Plan. Excludes 397 phantom stock units held in the Employee Deferred Compensation Plan, which are settled in Actuant common stock no less than six months following termination of employment. Mr. Dillon does not have any voting or dispositive power with respect to the phantom stock units. |
| |
(7)
| Includes 8,099 shares issuable pursuant to options exercisable currently or within 60 days of October 15, 2017. Also includes 5,794 phantom stock units held in the Outside Directors’ Deferred Compensation Plan, which are settled in Actuant common stock, generally within 60 days following the director’s termination of service. |
| |
(8)
| Includes 59,749 shares issuable pursuant to options exercisable currently or within 60 days of October 15, 2017. Also includes 7,373 phantom stock units held in the Outside Directors’ Deferred Compensation Plan, which are settled in Actuant common stock, generally within 60 days following the director’s termination of service. |
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(9)
| Includes 740 shares held in the Employee Stock Purchase Plan and 2,250 shares held by his children through custodians. Also includes 360,388 shares issuable pursuant to options exercisable currently or within 60 days of October 15, 2017. |
| |
(10)
| Includes 16,400 shares held in an individual IRA account and 6,000 shares held in trusts for his children. Also includes 59,749 shares issuable pursuant to options exercisable currently or within 60 days of October 15, 2017. Also includes 33,140 phantom stock units held in the Outside Directors’ Deferred Compensation Plan, which are settled in Actuant common stock, generally within 60 days following the director’s termination of service. |
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(11)
| Includes 759 shares held in the 401(k) Plan. Also includes 56,009 shares issuable pursuant to options exercisable currently or within 60 days of October 15, 2017. Excludes 1,954 phantom stock units held in the Employee Deferred Compensation Plan, which are settled in Actuant common stock no less than six months following termination of employment. Mr. Rennie does not have any voting or dipositive power with respect to the phantom stock units. |
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(12)
| Includes 174 shares held in the 401(k) Plan. Also includes 7,331 shares issuable pursuant to options exercisable currently or within 60 days of October 15, 2017. Excludes 591 phantom stock units held in the Employee Deferred Compensation Plan, which are settled in Actuant common stock no less than six months following termination of employment. Mr. Roundhouse does not have any voting or dipositive power with respect to the phantom stock units. |
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(13)
| Includes 17,514 shares held in individual IRA accounts. Also includes 39,832 shares issuable pursuant to options exercisable currently or within 60 days of October 15, 2017. Excludes 285 phantom stock units held in the Employee Deferred Compensation Plan, which are settled in Actuant common stock no less than six months following termination of employment. Mr. Skogg does not have any voting or dipositive power with respect to the phantom stock units. |
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(14)
| Includes 51,749 shares issuable pursuant to options exercisable currently or within 60 days of October 15, 2017. |
| |
(15)
| Includes 59,749 shares issuable pursuant to options exercisable currently or within 60 days of October 15, 2017. |
| |
(16)
| Includes 16,400 shares held in individual IRA accounts, 6,000 shares held in private trust accounts for children, 5,000 shares held in private trust accounts and 6,4755 shares held in the 401(k) Plan. Also includes 375,366 shares issuable pursuant to options exercisable currently or within 60 days of October 15, 2017. Includes 49,533 shares held in the Outside Directors’ Deferred Compensation Plan, which are settled in Actuant common stock, generally within 60 days following the director’s termination of service. Excludes 18,844 phantom stock units held in the Employee Deferred Compensation Plan, which are settled in Actuant common stock no less than six months following termination of employment. The executive officers do not have any voting or dipositive power with respect to the phantom stock units. |
Thedays. Such 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 purposespurposes.
CORPORATE GOVERNANCE MATTERS
BOARD ELECTION AND LEADERSHIP STRUCTURE
Directors are elected at each annual meeting to serve for a one-year term. Directors are elected by a plurality vote. In July 2021, the Board revised our Corporate Governance Guidelines
to provide for a mandatory retirement age of directors, specifying that no director after attaining the age of 72 will be nominated for re-election.
The Board elects a Chair each year. The positions of Directors (the “Board”Chair of the Board and Chief Executive Officer are separated between Mr. Ferland and Mr. Sternlieb. This allows our CEO, Mr. Sternlieb, to focus on the day-to-day business operations, while the Chair leads our Board in providing strategic direction, oversight and advice to management. The Board does not have a fixed policy regarding whether to have an executive or non-executive Chair and retains the authority to modify this leadership structure as appropriate to best address the Company’s circumstances and advance the interests of all shareholders.
The Board Chair’s responsibilities include presiding over executive sessions of the independent directors, liaising between the Chief Executive Officer and independent directors, consulting with the Chief Executive Officer as to appropriate scheduling and agendas of meetings of the Board, serving as the principal conduit for communications directed from shareholders to employees and the non-employee directors, and leading the annual assessment of Board and committee performance.
BOARD COMMITTEES, CHARTERS, FUNCTIONS AND MEETINGS
The Board has three standing committees— the Audit Committee, the Governance and Sustainability Committee and the Talent Development and Compensation Committee—each of which has a charter. The Board appoints the members of these committees after considering the recommendations of the Governance and Sustainability Committee. There were eight meetings of the Board during the fiscal year ended August 31, 2023 (“fiscal 2023”). All members of the Board serving during fiscal 2023 attended at least 75% of the aggregate number of meetings of the Board and all the committees on which they served which were held during the respective director’s period of service. The Company has no formal policy with respect to the attendance of the directors at the Company’s annual meeting of shareholders. All of the directors, except Ms. Healy who joined the Board in May 2023, attended the 2023 annual meeting of shareholders.
Current Board committee membership and functions appear in the following table.
| | | | | | | | |
| Committees | | Committee Functions |
AUDIT
Danny L. Cunningham, Chair Alfredo Altavilla Judy L. Altmaier Colleen M. Healy Richard D. Holder Sidney S. Simmons
Fiscal 2023 Meetings—8 | | • Manages oversight responsibilities related to accounting policies, internal control, financial reporting practices, and compliance with the financial code of conduct |
| • Provides oversight of cyber and information security risks and legal and regulatory compliance |
| • Oversees the preparation of the Company's financial statements |
| • Reviews the independent auditor’s qualifications and independence |
| • Reviews the performance of the Company’s internal audit function and the Company’s independent auditors |
| • Maintains lines of communication between the Board and the Company’s financial and senior management, internal auditors and independent accountants |
| • Prepares the Audit Committee report to be included in the Company’s annual proxy statement |
| • Conducts an annual evaluation of the performance of the Audit Committee |
GOVERNANCE AND SUSTAINABILITY
E. James Ferland, Chair
J. Palmer Clarkson
Danny L. Cunningham Colleen M. Healy Lynn C. Minella Sidney S. Simmons
Fiscal 2023 Meetings—3 | | • Responsible for assessing the mix of skills and experiences of the members of the Board and for evaluating and nominating prospective members to serve on the Board |
| • Exercises a leadership role in developing, maintaining and monitoring the Company’s corporate governance policies and procedures |
| • Provides oversight of the Company's corporate responsibility, including environmental, social and diversity initiatives |
| • Oversees the annual self-evaluations of the Board and its committees, including the performance and contributions of individual directors |
| • Conducts an annual evaluation of the performance of the Governance and Sustainability Committee |
TALENT DEVELOPMENT AND COMPENSATION
Richard D. Holder, Chair Alfredo Altavilla
Judy L. Altmaier J. Palmer Clarkson Lynn C. Minella
Fiscal 2023 Meetings—5 | | • Determines the compensation of executive officers and makes recommendations to the independent directors of the Board regarding Chief Executive Officer compensation |
| • Administers and establishes performance objectives for the Company's annual (short-term) incentive compensation plans and equity-based (long-term) compensation programs |
| • Makes recommendations to the Board with respect to the amendment, termination or replacement of incentive compensation plans and equity-based compensation programs |
| • Reviews leadership development and succession plans for corporate and subsidiary officers, including the CEO |
| • Exercises oversight of the Company's talent management, development and retention and related strategies, programs and risks, including the Company's diversity, equity and inclusion initiatives and results |
| • Exercises oversight of the Company's community engagement and culture and related strategies, programs and risks |
| • Recommends to the Board the compensation for Board members |
| • Conducts an annual evaluation of the performance of the Talent Development and Compensation Committee |
EXECUTIVE SESSIONS OF NON-MANAGEMENT DIRECTORS
The non-executive directors of the Board regularly meet in the absence of management. Mr. Ferland, the Board Chair, presides at these sessions.
INDEPENDENCE OF DIRECTORS; FINANCIAL EXPERTISE OF AUDIT COMMITTEE
The Board has determined that each of Ms. Altmaier, Ms. Healy, Ms. Minella and Messrs. Altavilla, Clarkson, Cunningham, Ferland, Holder and Simmons (i) is independent within the definitions contained in the current NYSE 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 SEC rules. The Board has determined that all members of the Audit Committee meet the financial literacy requirements of the NYSE and each of Mr. Cunningham, Ms. Healy, Mr. Holder and Ms. Altmaier qualifies as an “audit committee financial expert” as defined by the SEC.
KEY AREAS OF BOARD OVERSIGHT
The Board oversees management’s establishment and execution of the Company’s strategy and operational priorities, capital allocation, governance framework, human capital management and enterprise-wide risk management, which are designed to support long-term organizational performance, ensure alignment with stakeholder expectations and enhance shareholder value. While the Board has the ultimate oversight responsibility for these matters, its committees assist it with certain areas of oversight. The Audit Committee focuses on legal, compliance, information security and cybersecurity, and financial risks (including internal controls). The Talent Development and Compensation Committee focuses on compensation and human capital risks and management. The Governance and Sustainability Committee supports the Board’s oversight of corporate governance, sustainability, and environmental, health and safety risks and practices.
Corporate Governance
The Board has adopted the Actuant CorporationCompany’s Corporate Governance Guidelines (the “Guidelines”). The Guidelines stateprovide 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 and Sustainability Committee of the Board monitors and oversees the application of the Guidelines and annually recommends to the Board any changes to the Guidelines.Guidelines and the Company’s governance practices. Each committee has a written charter that is approved by the Board and annually evaluated by the committee.committee, as well as by the Governance and Sustainability Committee.
Compliance and Integrity
Board Committees, Charters, Functions and Meetings
The Board has three standing committees — Audit, Nominating & Corporate Governance and Compensation — and appoints the members of the committees after considering the recommendations of the Nominating & Corporate Governance Committee. There were 10 meetings of the Board during the fiscal year ended August 31, 2017. All members of the Board attended at least 75% of the aggregate number of meetings of the Board and all the committees on which they served. While the Company has no formal policy with respect to attendance of the directors atadopted the Company’s Annual MeetingCode of Shareholders, all membersConduct (“Code of Conduct”), which is called “The Tools for Doing What’s Right.” The Code of Conduct sets out the Board attended the 2017 Annual Meeting. Current Board committee membershipCompany’s commitment to values-based business behavior and functions appeareach officer’s, director’s and employee’s individual responsibility for ensuring they and other Company representatives adhere to high ethical standards and always act in the following table:
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Committees | | Committee Functions |
Audit
Danny L. Cunningham, Chairperson
E. James Ferland
Richard D. Holder
R. Alan Hunter, Jr.
Dennis K. Williams
Fiscal 2017 Meetings—8
| | • Manages oversight responsibilities related to accounting policies, internal control, financial reporting practices and legal and regulatory compliance |
| • Reviews the integrity of the Company’s financial statements |
| • Reviews the independent auditor’s qualifications and independence |
| • Reviews the performance of the Company’s internal audit function and the Company’s independent auditors |
| • Maintains lines of communication between the Board and the Company’s financial management, internal auditors and independent accountants |
| • Prepares the Audit Committee report to be included in the Company’s annual proxy statement |
| • Conducts an annual evaluation of the performance of the Audit Committee |
Nominating & Corporate Governance Robert A. Peterson, Chairperson
Gurminder S. Bedi
E. James Ferland
Holly A. Van Deursen
Fiscal 2017 Meetings—5
| | • Responsible for evaluating and nominating prospective members for the Board |
| • Exercises a leadership role in developing, maintaining and monitoring the Company’s corporate governance policies and procedures |
| • Conducts an annual assessment of the Board, Committees and Directors performance and contributions |
| • Conducts an annual evaluation of the performance of the Nominating & Corporate Governance Committee
|
Compensation Holly A. Van Deursen, Chairperson
Gurminder S. Bedi
Richard D. Holder
R. Alan Hunter, Jr.
Dennis K. Williams
Fiscal 2017 Meetings—7
| | • Determines the compensation of executive officers and makes recommendations to the Board regarding Chief Executive Officer compensation. |
| • Administers annual (short-term) incentive compensation plans and equity-based (long-term) compensation programs maintained by the Company |
| • Makes recommendations to the Board with respect to the amendment, termination or replacement of incentive compensation plans and equity-based compensation programs |
| • Recommends to the Board the compensation for Board members and conducts an annual evaluation of the performance of the Compensation Committee |
Leadership Structure
The positions of Chairman of the Board and Chief Executive Officer are separated between Mr. Peterson and Mr. Baker. This allows our CEO (Mr. Baker) to focus on the day-to-day business operations, while allowing the Chairman of the Board (Mr. Peterson) to lead our Board in its role of providing oversight and advice to management. The Board retains the authority to modify this leadership structure as and when appropriate to best address the Company's current circumstances and to advance the interests of all shareholders.
The Chairman of the Board presides over executive sessions of the independent directors; serves as liaison between the Chief Executive Officer of the Company and other independent directors; consults with theits stakeholders. The Company also has a Code of Ethics Applicable to Senior Finance Executives (“Code of Financial Ethics”), which applies to its Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer and Corporate Controller, or persons performing similar functions. The Code of Conduct and Code of Financial Ethics are reviewed annually by the Company asGovernance and Sustainability Committee. In addition, the Audit Committee reviews the actions management is taking to appropriate schedulingmaintain an ethical culture, including how management promotes an environment in which employees can raise ethical concerns without fear of retaliation, and, agendasat its quarterly meetings, is informed of meetings of the Board; and serves as the principal liaison for communication by shareholders and employees directed specifically toward non-management directors.
Executive Sessions of Non-Management Directors
The non-employee directors of the Board regularly meet alone without any members ofall compliance concerns submitted to management being present. Mr. Peterson presides at these sessions.
Independence of Directors; Financial Expert
The Board has determined that each of Ms. Van Deursen and Messrs. Bedi, Cunningham, Ferland, Holder, 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 GuidelinesEthics Hotline.
The Company has adopted a Supplier Code of Conduct, which outlines our expectation that suppliers demonstrate the highest standards of business conduct, integrity and (ii) has noadherence to the law. The Supplier Code of Conduct applies to suppliers, vendors, consultants, contractors and other “material relationship”third parties and provides specific guidance regarding suppliers’ responsibilities to comply with all applicable laws and regulations, inform the Company of concerns and operate responsibly with respect to the Company’s standards for anticorruption, the environment, social and human rights, and other matters.
Strategy
Elements of the Company’s strategy are discussed at every regularly scheduled Board meeting. At these reviews, the Board and management discuss operational and strategic priorities, conditions and trends in the Company’s markets, identified risks and associated mitigation strategies, and short-term and longer-term challenges to the achievement of the Company’s objectives. The Board also regularly discusses investor feedback and expectations, capital allocation plans, the Company’s acquisition pipeline, and management’s multi-year plans for organic and inorganic growth, including opportunities in vertical markets the business serves and those into which it is positioned to expand.
Board Oversight of Enterprise Risks
The Company’s executive leadership and senior leadership team are responsible for executing the Company’s enterprise-risk-management program, which is coordinated by the internal audit function and the Company’s management executive committee. The program is implemented through quarterly management reviews of strategic, financial, operational, human capital, legal and other risks with key operational and functional personnel globally and of the efficacy of mitigation actions being pursued for each risk. The Board is responsible for oversight of the Company’s overall risk management framework and, at least annually, conducts a focused review of the Company’s most significant risks and the policies and practices implemented to mitigate those risks. In addition, throughout the year, the Board and its committees have detailed discussions with management concerning specific risk areas and mitigation processes.
Oversight of Cybersecurity Risk
The Audit Committee provides oversight of management’s efforts to mitigate cybersecurity risk and respond to cyber incidents, which include assistance from third-party experts to test and enhance the efficacy of the Company’s cybersecurity processes in accordance with the Company that could interfere with his or her abilitylatest security protocols. The Audit Committee engages in a comprehensive annual overview of the Company’s cybersecurity framework but also receives briefings from management throughout the year on cybersecurity matters, emerging risks and the steps being taken to exercise independent judgment. In addition, the Board has determined that each member ofaddress these risks. Management processes to mitigate cybersecurity risks, and related reports to the Audit Committee, is “independent” within the definition containedinclude simulations and plans for how to respond to cybersecurity incidents, should they occur, and comply with legal and regulatory requirements in current Securitiessuch circumstances. All employees and Exchange Commission (“SEC”) rules. The Board has determined that all members of the Audit Committee meet the financial literacy requirements of the New York Stock Exchange ("NYSE")others with access to Company information systems receive comprehensive and qualify as “audit committee financial experts” as defined by the SEC.periodic training on data and cybersecurity security practices, including regular training on how to spot fraudulent and phishing emails.
Board Role in Risk Oversight
The 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 theExecutive Compensation Committee and the Nominating & Corporate Governance Committee focus on compensation risk (as described below) and corporate governance policies, respectively.
Compensation Risk Assessment
In establishing and reviewing our executive compensation program, the Talent Development and Compensation Committee considers, among other things, recommendations from shareholders and proxy advisory firms, whether the Company’s compensation program rewardsprograms reward executives for performance and whether the program encouragesprograms encourage unnecessary or excessive risk taking. The Talent Development and Compensation Committee annually performs a compensation risk assessment, including a review of material incentive and sales compensation plans. The Talent Development and Compensation Committee, with assistance from an independent compensation consultant, (Willis Towers Watson), annually performs a compensation risk assessment including an inventoryhas overseen the implementation of material incentive and sales compensation plans. The Committee has identified several mitigating factors thatto help reduce the likelihood of undue risk taking related to compensation arrangements, including, but not limited to, the use of various measures (core(such as core sales, earnings, asset management,profit margin performance relative to revenue changes, total shareholder return ("TSR"(“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 and performance shares), and executive stock ownership guidelines that help align incentives with long-term company stock price appreciation. Based upon the assessment performed, theappreciation, executive compensation clawback policies and an anti-hedging policy. The Talent Development and Compensation Committee believesand Board believe that the Company’s compensation policies and practices do not encourage unnecessary or excessive risk taking and are not reasonably likely to havepromote other behavior that could result in a material adverse effect onevent for the Company.
Environmental Sustainability
UseThe Governance and Sustainability Committee oversees the execution of Compensation Consultantsthe Company’s environmental sustainability strategy, which reflects the Company’s commitment to operating sustainably, innovating for the environment and Other Advisors
The Compensation Committee hasassisting in the authorityglobal transition to engage the servicesclean energy, and supporting global efforts to reduce greenhouse gas emissions. Energy efficiency is embedded in our new product development (“NPD”) strategy and practices, and our Centers of outside advisors, experts and othersExcellence challenge themselves to assist in performing its responsibilities. The Compensation Committee has utilized the services of Willis Towers Watson ("Willis") as its executive and director compensation adviser for several years. During fiscal 2017, fees paid to Willis for servicesregularly deliver innovative solutions tailored to the Committee were $0.2 million. The Company hasexacting demands of our customers for more energy-efficient, electric and sustainable products. Examples of our products that are supporting the shift to renewable energy sources are our specialized tools to build and maintain wind turbines. Other product innovations reflect our commitment to energy efficiency and reduced environmental impacts, such as the expansion of our lines of battery-powered tools, use of recycled materials in our new pump designs and size and weight reductions on many new product designs.
Our commitment to the environment and to supporting efforts to combat climate change also routinely engaged separate divisionsextends to how we run our operations. We have implemented an environmental management system to monitor and manage the environmental impacts of Willis for actuarial services relatedour operations, ensure compliance with relevant regulations and continuously execute on opportunities to pension plans, post-retirement healthcare plansreduce waste. We strongly believe that taking all necessary steps to protect the communities in which we operate from environmental harm is a moral imperative. We also have launched programs to conduct energy efficiency assessments at all our locations globally with the objective of reducing electricity and other benefits,natural gas consumption across our operations as well as insurance brokerage services. Fees paidimproving our waste recycling practices and reducing waste that our facilities send to Willislandfills. Additional information on our environmental sustainability program may be found at www.enerpactoolgroup.com/sustainability/.
Diversity and Inclusion
Our senior leadership team and management at all levels are committed to creating a culture of inclusion and belonging in a workplace where all employees can thrive and do their best work. Senior leadership and management regularly report the Company’s progress on these commitments to the Board. We incorporate our Diversity, Equity & Inclusion ("DE&I") objectives into our core strategy. Our DE&I objectives include: (i) a focus on our culture, (ii) supporting education for these additional servicesdisadvantaged groups in our communities, and (iii) broadening our recruiting efforts to reach and attract more diverse employees. Because of the strategic importance of DE&I, and to ensure it is embedded into our strategy, DE&I initiatives are under the responsibility of our Chief Human Resource Officer. In fiscal 2023, we continued to strengthen our Women of Enerpac employee resource group by adding a new leader who has increased participation in the group by over 58% from the prior year. Additionally, two new employee resource groups were created: Pride@Enerpac and S.E.R.V.E. (Military Veterans and First Responders). These new groups have continued to grow since their launch in fiscal 2017 were $0.6 million. Willis2023. Additionally, all leaders of our Executive Leadership Team are aligned as Executive Sponsors to our employee resource groups to help guide and support efforts to make Enerpac an inclusive place to work. We include questions in our employee engagement survey to help measure our progress in promoting our employees’ sense of belonging.
We also believe diversity at the executive compensation consultants are not involved in providing anyand Board level is key to the long-term success of the additional valuation, advisoryCompany and brokerage servicesthe promotion of diversity and inclusion in our workplace. We believe that valuing diversity as part of our core strategy will provide great opportunity to Enerpac to attract and retain talent, benefit from diverse points of view and ultimately assist in achieving our goals to drive shareholder value creation.
Human Capital Management
Our human capital management strategy and practices are generally overseen by our Board with assistance from the Talent Development and Compensation Committee and the Governance and Sustainability Committee. Our strategy is for Enerpac to be considered an employer of choice, and our initiatives and programs are predicated on making this objective a reality.
The talent and skills of our workforce are critical to our future success and ability to deliver shareholder value. Our development framework starts with robust performance management. Together with their leaders, employees establish annual goals and objectives that clearly align with our organizational commitments. We monitor progress throughout the year, with candid and frequent dialogue encouraged along the way. Annually, our senior leadership team reviews the skills and roles we require to execute our corporate strategy and to identify development opportunities for our emerging talent. Succession planning and talent development is conducted on an ongoing basis to identify top candidates for key roles. We promote a longer-term view by inviting employees to work with leaders to create their own, unique individual development plans. Training programs in many different modalities are available for all levels throughout Enerpac, addressing a wide variety of skills and competencies, both general and technical. We believe in coaching and the sharing of perspectives and in facilitating mentorship opportunities for the benefit of our workforce. We are committed to devoting the time, resources and planning necessary to maximize the potential of our employees.
We offer competitive compensation and benefits tailored to the Company.geographical markets and industries in which we operate. In the U.S., employees who work more than 30 hours per week are eligible for comprehensive benefits, including paid time off, healthcare (health, dental, and vision), short- and long-term disability, life and accidental disability insurance, a 401(k) retirement plan with a Company match, access to our Employee Assistance Program, an annual bonus program with broad participation, equity incentive programs, an Employee Stock Ownership Plan that allows employees to buy Company shares at a discount, flexible work arrangements and up to 12 weeks of maternity leave. We also offer tuition reimbursement of up to $5,250 annually for undergraduate programs and $7,500 annually for graduate programs for all U.S. full-time employees, and $1,000 annually for part-time employees who work more than 20 hours per month. We continue to evaluate enhancements to our compensation and benefit programs at all locations to ensure we remain competitive and meet the needs of our employees. Consistent with this desire, in fiscal 2023 we enhanced or added several benefits for our U.S. employees, including expanded paid parental leave, adoption assistance, medical coverage for select fertility treatments and expanded short-term disability benefits for hourly employees. Outside of the U.S., we are now partnering with a global benefits consulting firm to confirm that our benefits are market-competitive.
Employee Safety
Annually, Willis providesThe safety, health, and well-being of our employees, contractors, and visitors at our sites globally is our top priority and a principle that is deeply embedded in our culture. Our health, safety, security, environment, and quality (“HSSEQ”) programs are fully embraced by our leaders and employees at all levels and translate into an enterprise-wide mandate to provide healthy, safe and productive work environments and deliver high standards of safety and quality in products, services and solutions for our customers and end-users. At the Committee with written confirmationheart of its independenceour HSSEQ efforts is a desire to foster a culture of continuous improvement and employee empowerment through training, frequent and constructive management engagement, a risk-based evaluation of business activities and behaviors, and the existencedeployment of any potential conflictsprograms and resources to mitigate those risks. We continually track and report our performance, including through reviews of interest. The Committee also obtains an understandingincidents, near-misses, and quality issues, and management accountability and discussion of the policies and procedures that Willis has in place to preventthese improvement opportunities is a cornerstone of all business reviews.
conflicts of interest, evaluates whether there are personal or business relationships between Willis and members of the Committee and validates that employees of Willis who perform consulting services do not own Actuant common stock. After considering these factors, the scope of services provided by Willis and the amount of fees paid for executive compensation consulting and other services, the Committee has concluded that the engagement of Willis does not create a conflict of interest.
Codes of Conduct
DIRECTOR SELECTION PROCEDURES
The Company has a compliance planGovernance 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 on the corporate governance section of the Company’s website at www.actuant.com. The Company has also adopted a Code of Ethics that applies to its senior corporate executive team, including its Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer and Corporate Controller, or persons performing similar functions. The Code of Ethics is also posted on the Company's website.
Information Available Upon Request
Copies of the Company’s committee charters, corporate governance guidelines, Code of Conduct and Code of Ethics are available on the Corporate Governance section of the Company’s website 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.
Director Selection Procedures
The Nominating & Corporate GovernanceSustainability Committee has the lead role in identifying director candidates, including the slate of directors presented for election at the Meeting.Company’s annual meeting of shareholders. The Nominating & Corporate Governance and Sustainability 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.
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 Board duties. Although the Boardit does not have a formal diversity policy, the Board is committed to an inclusive membership, embracing diversity with respect to background, experience, skills, education, special training, race, age, gender, national origin and viewpoints.viewpoints.Our Governance and Sustainability Committee believes it is important to refresh the Board’s membership and skills by adding new directors from time to time. The Board currently includes three directors who identify as female and one director who identifies as Black.
The Governance and Sustainability Committee’s objective is to assemble and maintain a Board that provides an optimized mix of skills, experience and perspectives to provide oversight and strategic guidance and maximize shareholder value in the context of the Company’s current or expected circumstances. In evaluating director nominees, the Nominating & Corporate Governance and Sustainability Committee also considers a range of factors and circumstances, including the following factors:following:
•the strategic objectives and needs of the Company with respect to the particular talents and experience of its directors;
•the knowledge, skills and experience of nominees;nominees, including operational, leadership and board experience;
•familiarity with national andthe Company’s markets, including international business matters;experience;
experience•financial literacy and expertise with accounting rules and practices;
•the desire to balance the considerable benefit of continuity with the periodic injection of the fresh perspective provided by new members; and
•the appropriate size of the Company’s Board.
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 GovernanceSustainability 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 in addition to the foregoing as it may deemdeems are in the best interests of the Company and its shareholders. There is no limit with regardIn order to the number of boards on whichensure our directors may serve, buthave adequate time to fulfill their duties, the Board considers servicelimits participation of our directors on others boards as a factor in the director selection process. of other public companies to one such board with respect to our CEO and four such boards with respect to our non-CEO directors.
The Nominating & Corporate Governance and Sustainability Committee does, however, believebelieves it is appropriate forthat at least one, and preferably several, members of the Board to meet the criteria for an “audit committee financial expert”expert,” as defined by SEC rules, and that a substantial majority of the members of the Board meet the definition of “independent director” under NYSE listing standards. The Nominating & Corporate Governance and Sustainability Committee also believes it is appropriate for certain keythe Chief Executive Officer, and if circumstances warrant other members of the Company’s management to participate as members ofserve on the Board.
The Nominating & Corporate Governance and Sustainability Committee identifies nominees for election to the Board by, firstamong other considerations, evaluating the skills of the current members of the Board, who are willingtheir performance and contributions to continue in service.deliberations, their tenure on the Board and other relevant circumstances. Current members of the Board with skills and experience that are relevant to support the Company’s businessneeds and strategic priorities and who are willing to continue in serviceto serve as directors generally are considerednominated for re-nomination,re-election, 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. From time to time, the Company has engaged third party firmsGovernance and Sustainability Committee will determine to add new directors to the Board to enhance its capabilities, with such new directors being identified by a variety of means, including based on the recommendation of shareholders or existing directors or with the assistance of third-party recruiters to identify and evaluate or assist in identifying potential nominees.the qualifications of candidates satisfying the Board’s criteria for new directors.
SUMMARY OF DIRECTOR SKILLS, COMPETENCIES AND ATTRIBUTES
Director Resignation PolicyA summary of Board governance considerations and each director’s experience and skills follows:
DIRECTOR RESIGNATION POLICY
In order to ensure appropriate representation on ourthe Board, the Nominating & Corporate Governance and Sustainability Committee has adopted a policy regarding resignation upon a director’s retirementfrom the Board if directors retire from or change inotherwise cease to be employed at their principal occupation or business association from the position the director held on the latteras of the date whentime the director was last elected to our Board or the date, if any, our Board last rejected an offer by the director to resign under the policy.Board. Upon such a material change in a director’s position, a director shall offer his or her resignation as a Board memberdirector to the Nominating & Corporate Governance and Sustainability Committee, which will then recommend that our Board accept or reject the resignation offer of resignation based on a review of the qualifications of the director, and whether the director's resignation from the Board would be inafter considering the best interests of the Company and its shareholders.
Communications with Directors
COMMUNICATIONS WITH DIRECTORS
Shareholders and other interested parties who want to communicate with the Board, the non-managementnon-employee directors as a group, or any individual director, can write to: Actuant Corporation,Enerpac Tool Group Corp., Attention: Chairman,Chair of the Board of Directors, N86W12500 Westbrook Crossing, Menomonee Falls, Wisconsin 53051. Your letter should indicate thatwhether you are an Actuanta shareholder. Depending on the subject matter, management will:
Forward•forward the communication to the director or directors to whom it is addressed;
Attempt•attempt to handle the inquiry directly, for example, where it is a request for information about the CompanyCompany; or it is a common stock related matter; or
Not•not forward the communication if it is primarily commercial in nature or if it relates to an improper or irrelevant topic.
Certain Relationships and Related Person Transactions
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
The Corporate Governance Guidelines (applicable to Board members) and Code of Business Conduct and Ethics (applicable to all employees) document the Company’s policies regarding conflicts of interest and related partyrelated-party transactions. Under these policies, any related party transaction or potential conflict of interest involving an executive officer, director or 5% shareholder is reviewed by legal counsel and then referred to the Nominating & Corporate GovernanceAudit Committee for final resolution.
During fiscal 2017, the Company had sales of approximately $0.2 million to a subsidiary of Babcock & Wilcox Enterprises, Inc (B&W). Mr. Ferland is President and Chief Executive Officer of B&W and a member of our Board. These sales transactions were negotiated in the ordinary course of business at prices and on terms and conditions that we believe are no less favorable to the Company than those that would have resulted from arm’s length negotiations between unrelated parties.
Other than as disclosed in the preceding paragraph, during fiscal 2017 theThe Company is not aware of being party to any transaction during fiscal 2023 in which an executive officer, director or 5% shareholder had a direct or indirect material interest.
Compensation Committee Interlocks and Insider ParticipationCOMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 2017,2023, no member of the Talent Development and Compensation Committee served as an officer, former officer or employee of the Company or had a relationship discloseabledisclosable under “Certain Relationships and Related Person Transactions.” Further, during fiscal 2017,2023, no executive officer of the Company served as:
•a member of the Compensation Committeecompensation committee (or equivalent) of any other entity, one of whose executive officers served as one of our directors or was an immediate family member of a director, or served on ourthe Talent Development and Compensation Committee;Committee of the Board; or
•director of any other entity, one of whose executive officers or their immediate family member served on ourthe Talent Development and Compensation Committee.
INFORMATION AVAILABLE UPON REQUEST
Copies of the charters of the Audit Committee, Governance and Sustainability Committee and Talent Development and Compensation Committee, the Corporate Governance Guidelines, the Code of Conduct and the Code of Financial Ethics are available on the Corporate Governance section of the Company’s website at www.enerpactoolgroup.com. They also may be obtained, free of charge, upon written request directed to our Executive Vice President, General Counsel & Secretary, Enerpac Tool Group Corp., N86W12500 Westbrook Crossing, Menomonee Falls, Wisconsin 53051 or by telephone at (262) 293-1500.
REPORT OF THE AUDIT COMMITTEE
The following report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act, of 1934, except to the extent the Company specifically incorporates this report by reference therein.
The Audit Committee represents and assists the Board of Directors in fulfilling its oversight responsibility relating to (i) the integrity of the Company's financial statements and financial reporting process and the Company's systems of internal controlscontrol over financial reporting; (ii) the performance of the internal audit function; (iii) the annual independent audits of the Company's financial statements and management's report regarding the effectiveness of the Company's system of internal control over financial reporting, the engagement of the independent registered public accounting firm and the evaluation of the their qualifications, independence and performance;reporting; (iv) the compliance by the Company with legal and regulatory requirements, including the Company's disclosure controls and procedures; and (v) the fulfillment of the other responsibilities set out in the committee'sAudit Committee's charter. The Audit Committee has the responsibility for the engagement and retention of the Company's independent registered public accounting firm, the evaluation of its qualifications, independence and performance, and the approval of all audit and other engagement fees.
In discharging its responsibilities, the Audit Committee is not itself responsible for the planning or conducting of audits or for any determination that the Company's financial statements are complete and accurate or presented in accordance with generally accepted accounting principles. The Company's management is primarily responsible for its financial statements and the quality and integrity of the reporting process. The independent registered public accounting firm, PricewaterhouseCoopersErnst & Young LLP, is responsible for expressing an opinion on the conformity of the Company’s audited financial statements with generally accepted accounting principles and an opinion on the effectiveness of the Company’s internal control over financial reporting.
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 financial position 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:
•discussed with PricewaterhouseCoopersErnst & Young LLP the overall scope and plans for its audit;
•met with PricewaterhouseCoopersErnst & Young LLP, with and without management present, to discuss the results of its examinations, the evaluation of the Company’s internal controls, and the overall quality of the Company’s financial reporting;
•reviewed and discussed the audited financial statements for the fiscal year ended August 31, 20172023 with the Company’s management and PricewaterhouseCoopersErnst & Young LLP;
•discussed with PricewaterhouseCoopersErnst & Young LLP thosethe matters required to be discussed by Statementthe applicable requirements of Auditing Standards No. 61, Communications with Audit Committees ("SAS 61"), as amended and as adopted by the Public Company Accounting Oversight Board in Rule 3200T; and the Securities and Exchange Commission; and
•received the written disclosures and the letter from PricewaterhouseCoopersErnst & Young LLP required pursuant to Rule 3526, “Communicationby the applicable requirements regarding the independent accountant’s communications with the Audit Committees Concerning Independence,” of the Public Company Accounting Oversight Board (“PCAOB”)
Committee concerning independence and discussed with Ernst & Young LLP its independence.
Based upon the foregoing, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s annual reportAnnual Report on Form 10-K for the fiscal year ended August 31, 2017.
2023.
No member of the Audit Committee is employed by, or has any other material relationship with, the Company. The Board of Directors has determined that eachat least one member of the Audit Committee qualifies as an Audit Committee"audit committee financial expertexpert" 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.
October 19, 2023
THE AUDIT COMMITTEE
Danny L. Cunningham, ChairpersonChair
E. James FerlandAlfredo Altavilla
Judy L. Altmaier
Richard D. Holder
R. Alan Hunter, Jr.Colleen M. Healy
Dennis K. WilliamsSidney S. Simmons
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
COMPENSATION DISCUSSION AND ANALYSIS
This section of the proxy provides information regarding the compensation program for our current Chief Executive Officer, our current and former Chief Financial Officers and ourOfficer, the three other most highly compensated executive officers serving at August 31, 2017,2023 (which includes Markus Limberger who voluntarily ceased serving as an executive officer and employee effective November 30, 2023), and an additional individual who was the Company’s other most highly compensated executive officer during fiscal 2023 (other than the individuals serving as the Chief Executive Officer or Chief Financial Officer), but was no longer serving as an executive officer at August 31, 2023. These individuals are collectively referred to as ourthe Named Executive Officers (“NEOs”). OurThe NEOs for fiscal 2017 NEOs2023 are as follows:
Randal W. Baker,•Paul E. Sternlieb, President and Chief Executive Officer
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• | Rick T. Dillon, Executive Vice President and Chief Financial Officer (1)
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• | Andrew G. Lampereur, former Executive Vice President and Chief Financial Officer (2)
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• | Stephen J. Rennie, Executive Vice President, Industrial Segment (3)
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Roger A. Roundhouse, Executive Vice President, Engineered Solutions Segment
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• | Eugene E. Skogg, Executive Vice President, Human Resources (4)
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Officer;
(1) Mr. Dillon joined the Company in December 2016 and was appointed•Anthony P. Colucci, Executive Vice President and Chief Financial Officer in January 2017.
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(2)
| Mr. Lampereur departed the Company in January 2017. |
(3) Mr. Rennie subsequently departed the Company in October 2017.Officer;
(4) Mr. Skogg subsequently departed the•Benjamin J. Topercer, Executive Vice President and Chief Human Resources Officer;
•James P. Denis, Executive Vice President, General Counsel, Secretary and Chief Compliance Counsel;
•Markus Limberger, former Executive Vice President, Operations; and
•Barbara G. Bolens, former Executive Vice President and Chief Strategy Officer.
EXECUTIVE SUMMARY
The Company in September 2017.
Executive Summary
Actuant is committed to developing and implementing an executive compensation program that directly aligns the interests of the NEOs with the long-term interests of shareholders. With this goal in mind, we havethe Talent Development and Compensation Committee of the Board of Directors (referred to in this section of the Proxy Statement as the "Committee") has developed an executive compensation program that is designed to:
•attract and retain highly experienced and committed executives who have the skills, education, business acumen and background to successfully lead a diversifiedan industrial company;
•embrace our values, including for us to reflect the diversity of our communities, industry and customers;
•motivate executives to demonstrate exceptional personal performance and consistently perform at or above expected levels during different business cycles; and
•provide balanced incentives for the achievement of near-term and long-term objectives, without incentivizing executives to take excessive risk.
The Company’s executive compensation program for fiscal 2023 was designed, and the performance measures for incentive compensation awards made in fiscal 2023 were established, while the Company was in the early stages in its global transformation and facing economic uncertainty globally. In fiscal 2017,2023, we experiencedbegan to see the results of the transformation and added to the momentum of fiscal 2022’s strong financial results across the board. Revenues grew 5% in fiscal 2023, with core sales—which exclude the impact of foreign exchange and dispositions—increasing at a sluggish first halfgreater rate. Within the Industrial Tools and Service segment, three of our four geographic regions—Americas, Asia Pacific, and ESSAI (which included Europe, sub-Saharan Africa, and India)—generated double-digit revenue growth in fiscal 2023. Our results for fiscal 2023 exceeded our expectations, with revenues, adjusted EBITDA and free cash flow—the measures framing our announced outlook for the fiscal year—each exceeding the top end of our guidance ranges announced at the beginning of the fiscal year, withwhile also achieving adjusted EBITDA margin expansion. Due to these strong financial results, the second half showing improvements within the broad industrial, mining, infrastructure, commercial and off-highway vehicle and agriculture markets, most notably within the Industrial and Engineered Solutions segments. However, reduced capital and maintenance spending in the oil & gas markets (Energy segment) in the form of project cancellations, deferrals and scope reductions, resulted in a consolidated core sales decline of 4% in fiscal 2017 and considerably lower earnings per share year-over-year. Despite lower earnings, we generated $68 million of Free Cash Flow in fiscal 2017.
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| | | Year Ended August 31, |
| | | 2017 | | 2016 |
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| Net Sales | | $ | 1,096 |
| | $ | 1,149 |
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Core Sales Change (1) (3) | | (4 | )% | | (6 | )% |
Adjusted Earnings Per Share(2)(3) | | $ | 0.83 |
| | $ | 1.22 |
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Adjusted EBITDA (3) | | $ | 122 |
| | $ | 152 |
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Free Cash Flow (3) | | $ | 68 |
| | $ | 112 |
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| Fiscal Year-end Stock Price | | $ | 24.05 |
| | $ | 23.83 |
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(1) Core sales change represents total sales decline excluding the impact of acquisitions, divestitures and foreign currency rate changes between years.
(2) Adjusted earnings per share excludes an impairment & other divestiture charge ($1.82), restructuring charges ($0.09), director & officer transition charges ($0.08) and a tax adjustment gain ($0.05) in fiscal 2017 and a product line divestiture gain ($0.03), restructuring charges ($0.17) and non-cash impairment charge ($2.86) in fiscal 2016.
(3) See "Reconciliation of GAAP Measures to Non-GAAP Measures" included in our 2017 Annual Report to Shareholders which accompanies this Proxy Statement.
As a result of this financial performance, the cashannual bonuses earned by our current NEOs infor fiscal 20172023 were generally below186.2% of their respective target (see page 23levels. Given the strong results, the Committee believes that the Company’s executive compensation programs are effectively linked to performance.
Our executive compensation philosophy focuses on creating long-term value for detailsshareholders, as well as driving key employee engagement and retention. In line with this philosophy, the Committee recommended, and the independent members of the Annual Bonus program), with higher amounts earned by someBoard approved, the grant of our NEOs in business segments with
favorable core salesspecial equity awards to Mr. Sternlieb, effective August 30, 2023. Under Mr. Sternlieb’s direction and earnings results. While profitability was challenged to varying degrees acrossleadership, the board, modest core sales growth in twoCompany has created meaningful shareholder value, significantly improved operational efficiency and productivity, expanded adjusted EBITDA, and built a strong foundation for profitable growth. The Committee recommended and the independent members of the three segmentsBoard approved these special equity awards to incentivize Mr. Sternlieb to continue to focus on growth and our abilityshareholder value creation, as well as to generatehelp retain him as the Company’s CEO, for the next several years. The special equity awards have an aggregate grant date fair value of approximately $4.5 million, with awards having one-third of that value vesting, subject to his continued employment, on the first, second and convert free cash flow company-widethird anniversaries of the date of the award. The awards consist of a time-vesting restricted stock unit award, representing two-thirds of the aggregate grant date fair value, and a performance-vesting restricted stock unit award representing one-third of the aggregate grant date fair value. The restricted stock units vest in fiscal 2017 (despite lower earnings) benefitedequal annual installments on the cash bonusesfirst and second anniversaries of allthe date of our NEOs. Similarly,grant and the total shares vested related to Performance Shares (discussedvest on the third anniversary of the date of grant and are payable based on achievement of net revenue and adjusted EBITDA margin targets for the fiscal year ending August 31, 2026. These awards are described in greater detail below under “Special Equity Awards to CEO” beginning on page 24) were below26.
The Committee remains committed to linking executive compensation to performance metrics that align the target level forinterests of the most recently completed three yearNEOs with the long-term interests of shareholders. By recruiting talented and experienced executive officers to join the Company and providing them with compensation that incentivizes both retention and driving Company performance, period.the Committee is focused on improving shareholder value.
Given that both incentive compensation and overall financial performance were below target levels, we believe that our
ALIGNMENT OF COMPENSATION TO PERFORMANCE
The Company’s executive compensation program is effectively linkeddesigned to performance. Further, we continue to believe our incentive compensation programs align closely to our business model of achieving core sales growth, quality of earnings and cash flow generation to fuel acquisitions, capital deployment and share repurchases.
Compensation and Link to Performance
Our executive compensation program is aligned with our overall business model (illustrated below),financial and strategic objectives, which isare intended to create shareholder value.
Our The Company is well-positioned to deliver long-term goal is to grow diluted earnings per share faster than most multi-industry peers.shareholder value through a sustainable business model built on well-established brands, robust global distribution and broad end markets, the Company's four-pillar growth strategy, disciplined capital deployment, and an experienced leadership team. The key tenets of our business model center on creating best-in-class returns through growth of our core businesses, driving efficiency and profitability, generating strong cash flow, and prudently deploying our capital. We intend to leveragecreate organic growth in excess of our strongmarkets through market positions to generate core sales growth that exceeds end-market growth rates. Core sales growth is accomplished through a combination of share capture, product innovation, commercial effectiveness, and market expansion into emergingin our industries and geographicwithin our regions. In addition to core salesorganic growth, we also focus on adjusted EBITDA margin expansion by reducing our structural and SG&A costs, optimizing our manufacturing footprint, and employing strategic sourcing programs. Cash flow generation is critical to achieving our financial and long-term strategic objectives and is achieved through expanding profit margins and driving improvement in working capital velocity in combination with our low capital intensity. Finally, we are focused on acquiring complementary businesses and utilize our proprietary Acquisition Integration Management ("AIM") processes to efficiently incorporate acquisitions into the Company. Following an acquisition, we seek to drive growth opportunities (additional cross-selling opportunities and customer relationships) and cost reductions via operational excellence. We also focus on profit margin expansion and cash flow generation to achieve our financial objectives. Our LEAD (“Lean Enterprise Across Disciplines”) Business System utilizes various continuous improvement techniques to reduce costs, improve efficiencies and drive operational excellence across all locations and functions worldwide, thereby expanding profit margins and improving the customer experience. Our LEAD efforts also support our core sales growth. Strong cash flow generation is achieved by maximizing returns on assetsinvested capital through investing in internal capital projects, maintaining a strong balance sheet, making acquisitions aligned with our strategy and minimizing primary working capital needs. The cash flow that results from efficient asset management, improved profitability and loyal customers is usedopportunistically acquiring our own shares.
SHAREHOLDER INPUT ON EXECUTIVE COMPENSATION PROGRAM
At the annual meeting held in February 2023, shareholders overwhelmingly supported the advisory proposal to fund strategic acquisitions, common stock repurchases and internal growth opportunities.
Shareholder Input on Executive Compensation Program
Shareholders provided overwhelming support forapprove the compensation of ourthe NEOs atas disclosed in the 2017 Annual Meeting,proxy statement for that annual meeting, with over 98%the approval of shareholders voting in favorapproximately 97% of the compensation program for our NEOs. We engageCompany's common stock that voted either “for” or “against” the proposal. The Company engages with shareholders to gather feedback on ourits compensation programs, which havehas led to changes that strengthen the link between executive pay and Company performance. We will continually assess and modify ourthe Company’s executive compensation program to incorporate shareholder input, industry trends and competitive compensation practices.
The Compensation Committee (the "Committee") engages in an ongoing review of the Company’s executive compensation program to evaluate whether the program supports the Company’s compensation philosophy and objectives and is closely alignedaligns with the Company’s business objectives. In connection with this ongoing review, and based on feedback received from our
shareholders, the Committee continues to implementimplements and maintainmaintains what it believes are best practices for executive compensation each of which reinforcesand reinforce the Company’s compensation philosophy. Below is a summary of those practices.
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What We Dothe Company Does | | What We Dothe Company Does Not Do |
Use• Uses performance metrics to align pay with performance | | • Offer gross-ups of related excise taxes on executive severance agreements |
Cap• Caps payouts under our annual cash bonus plan and performance share plans | | Provide single-trigger change-in-control severance benefits• Otherwise provide tax gross-ups in the event of a change in control |
Have• Grants at least 50% of target annual equity awards as performance-based awards | | • Pay dividends on unearned and unvested performance shares |
| • Has robust stock ownership guidelines for our CEO and other current NEOs | | • Pay dividends on unearned and unvested performance sharesrestricted stock units |
Apply• Applies clawback provisions to annual cash bonus and equity awards for executives in case of financial restatement.restatements | | • Reprice stock options |
Engage• Engages an independent compensation consultant that reports to the Compensation Committee | | Provide tax gross-ups in the event of a change in control |
Prohibit• Prohibits short sales, hedging or pledging of our stock by our executive officers and directors | | |
Oversight of the Executive Compensation Program
OVERSIGHT OF THE EXECUTIVE COMPENSATION PROGRAM
The Committee is primarily responsible for overseeing the Company’s executive compensation program and considers advice from an independent compensation consultant regarding competitive market pay practices. TheDuring each year, the Company’s CEO and management team also provide the Committee specific information related to NEO performance, compensation data and financial results.
Role of Talent Development and Compensation Committee
The Committee establishes ourthe Company’s executive compensation philosophy and administers the overall executive compensation program. The Committee reviews and approves all components of the compensation program, establishes objectives for NEOs that are aligned with the Company’s business and financial strategy, and determines compensation levels for our NEOs. CEO compensation is recommended by the Committee to the members of the Board who are independent directors for approval. The Committee monitors the performance of NEOs (other than the CEO) through verbal updates regarding their annual reviews completed by the CEO and performs aCEO. A separate evaluation of the CEO’s performance is conducted in cooperation with the ChairmanChair of the Board. The Committee recommends to the Board compensation actions with respect to the CEO, which determinations are approved by the independent members of the Board.
Role of Compensation Consultant
The Committee utilizes Willishas the authority to engage the services of outside advisors, experts and others to assist in performing its responsibilities. The Committee utilized the services of Mercer, LLC (“Mercer”) as its independent compensation consultant. Willis assistsconsultant in designing the executive compensation program for fiscal 2023. Mercer assisted the Committee by evaluating executive compensation, analyzing pay alignment with financial and stock performance, providing general compensation trends and competitive market data and benchmarking, and by participating in the design and implementation of certain elements of the executive compensation program. Willis doesMercer did not make specific recommendations on individual compensation amounts for the executive officers or the independent directors, nor does did
it determine the amount or form of executive and director compensation.
In selecting Mercer as the Committee’s compensation consultant, the Committee considered its independence by taking into account the factors prescribed by the NYSE listing rules. In its role as the Committee’s independent compensation advisor, Mercer provided written confirmation of its independence and the existence of any potential conflicts of interest. The Committee also reviewed the respective policies and procedures that Mercer maintains to prevent conflicts of interest, evaluated whether there are personal or business relationships between Mercer and members of the Committee, and validated that employees of Mercer who perform consulting services do not own the Company’s common stock. Based on this evaluation, the Committee determined that no conflict of interest exists with respect to Mercer.
Role of Management and the Chief Executive Officer
OurThe CEO, in consultation with the Executive Vice President - Human Resources function, develops recommendations for the compensation recommendationsof the other executive officers for the Committee to consider. The CEO considers various factors when making recommendations, including external market data as provided by Willis,the Committee's independent compensation consultant, the relative importance of the executive’s position within the organization, the individual’sexecutive’s tenure and experience and the executive’s performance and contributions to the Company’s results.
The CEO, with assistance from Human Resources and Finance personnel, works to monitormonitors existing compensation plans and programs applicable to NEOs and other executives, to recommendrecommends financial and other targets to be achieved under those programs, to prepareprepares analyses of financial data, peer comparisons and other briefing materials for the Committee in making its decisions, and, ultimately, to implementimplements the decisions of the Committee.Committee’s decisions.
Assessing Competitive Compensation Practices
ASSESSING COMPETITIVE COMPENSATION PRACTICES
The Committee reviews both general industry survey data as well as compensation practices and pay opportunities for a selection of publicly-tradedcertain publicly traded U.S. companies thatwith which the Company considers it competes with from a business andfor executive talent perspective (the “Peer Group”). The CompanyIn evaluating compensation decisions for fiscal 2023, it used executive compensation and the Committee have regularly utilized a Peer Group as part of the annual benchmarking process. From time to time, the Committee has undertaken a review ofincentive-plan-design data compiled by Mercer for the Peer Group and other relevant companies to ensure it remains a reasonableassess the reasonableness and appropriate tool to utilize forappropriateness of both pay levellevels and pay design benchmarking purposes. A review of compensation programs. The companies in the Peer Group was conducted duringat the commencement of fiscal
2017 with no significant changes. The Peer Group companies were chosen based on their alignment with the Company, 2023 are as reflected in the following characteristics:
Reasonably comparable market capitalization and annual revenues
Global scope and complexity
End-market diversification
Acquisitive growth strategies
The companies listed below are included in the Peer Group:follows: |
| | | | | | | | | | |
Altra Industrial Motion CorpBadger Meter, Inc. | Crane CoEnPro Industries Inc. | IDEX CorpProto Labs, Inc. | Thermon Group Holdings, Inc. |
| Barnes Group Inc. | ESCO Technologies Inc. | RBC Bearings Incorporated | TriMas Corporation |
| Brady Corporation | Helios Technologies, Inc. | SPX FLOW, Inc. | |
| Circor International, Inc. | Kadant Inc. | Standex International CorpCorporation | |
AO Smith CorpColumbus McKinnon Corporation | EnerSysLindsay Corporation | John Bean Technologies CorpThe Gorman-Rupp Company | TriMas Corp |
Barnes Group Inc | EnPro Industries, Inc | Kennametal Inc | Woodward, Inc |
Belden Inc | Graco Inc | Lincoln Electric Holdings Inc | |
Brady Corp | Harsco Corp | Nordson Corp | |
Briggs & Stratton Corp | Hillenbrand, Inc | Rexnord Corp | |
In July 2023, the Committee adjusted the Peer Group by removing Circor International, Inc., SPX FLOW, Inc. and The Gorman-Rupp Company and adding Franklin Electric Co., Inc., Mueller Water Products, Inc. and Tennant Company. These adjustments were made in response to SPX FLOW, Inc. ceasing to be a publicly traded company, Circor International, Inc. entering into an agreement to be acquired and the dissimilarity of the executive compensation structure at The Gorman-Rupp Company, which did not provide for a substantial incentive compensation component. In addition, to Peer Group compensation data, the Committee primarily uses a broad set of data from the Willis Executive Compensation Market Analysis Survey to obtain compensation informationFranklin Electric Co., Inc., Mueller Water Products, Inc. and an understanding of executive compensation trends. The Willis survey data represents all participants in their database, with the exclusion of the financial services and the energy services industries. The Committee does not determine the companies that areTennant Company were included in the Willis survey data. The data (far in excess of 400 listed companies) is adjusted to reflect an organization of our revenue size. The data is reviewed in aggregate and on an individual basispeer group for the Company that was selected by the Committee and provides the primary reference point for making compensation related decisions. The Committee believes that this survey data, together with the compensation practicesone or more of the Peer Group and CEO recommendations (for other NEOs based on experience, expertise and demonstrated performance), accurately defines competitiveinstitutional proxy advisory firms in its evaluation of the Company’s compensation practices. The expected 2023 revenues of the revised peer group range from $2.1 billion to $441 million, with a median of $910 million, with market compensation for executive talent.capitalizations at that time ranging from $5.0 billion to $834 million, with a median of $2.6 billion.
TARGET LEVEL COMPENSATION DETERMINATION Target Level Compensation Determination
To determine NEO compensation, the Committee considers factors such as the level of responsibility, skills and experiencesexperience required by the position, the executive’s qualifications, ourthe Company’s ability to replace suchthe individual, and the overall competitive environment. It also considersenvironment, current and historical compensation levels, performance in the role, length of service, the Committee’s view of internal equity and consistency and other considerations it may feel are relevant. In analyzing these factors, the Committee reviews competitive compensation data and generally targets the 50th percentile of pay for Total Direct Compensation (base salary, annual cash bonus and equity incentive awards)., but the Committee retains discretion to consider factors such as individual performance, tenure, experience and responsibility to ensure an executive’s compensation is competitively positioned. In some cases, individual components of compensation may be over market (inabove the 50th percentile in order to emphasize a particular element or if individual circumstances dictate),dictate, but the total compensation package is designed to be market competitive and will generally not exceedto align with Peer Group practices.
As noted above, in fiscal 2023, Mr. Sternlieb received special equity awards having an aggregate grant date fair value of approximately $4.5 million (vesting as to one-third of the 75thaward on each of the first, second and third anniversaries of the grant date), which increased his Total Direct Compensation above the 50th percentile typically targeted by the Committee. The Committee recommended and the independent members of market at target.the Board approved these special equity awards to incentivize Mr. Sternlieb to continue the focus on growth and shareholder value creation, as well as to help retain him as the Company’s CEO, for the next several years.
Components of Executive Compensation
COMPONENTS OF EXECUTIVE COMPENSATION
We seek to pay ourthe Company’s executives fairly and competitively and to link pay with performance. The main elements of ourexecutive compensation program are base salary, a short-term incentive in the form of an annual cash bonus, and long-term equity incentive awards. We emphasize
The Company emphasizes compensation opportunities that reward our executives when they deliver targeted financial results. A significant portion of our executives'executive compensation is equity-based. ForIn fiscal 2017,2023, annual equity incentive awards granted to the NEOs were in the form
of time-vesting restricted stock units (“restricted stock units”) and performance-based restricted stock units (“Performance Shares”). Additionally, special awards of restricted stock units and Performance Shares were awarded to Mr. Sternlieb.
Incentive compensation at target (annual cash bonus and equity incentive awards) accounted for approximately 80%91% of Mr. Baker'sSternlieb’s Total Direct Compensation opportunity during fiscal 2023 and approximately 65%56% of the average Total Direct Compensation opportunity of the other NEOs.NEOs who served as officers on August 31, 2023. The following chart illustrates the allocation of the Total Direct Compensation at target for these officers of base salary, annual bonus, annual equity awards and for the CEO, special equity awards granted as restricted stock units and Performance Shares.
In connection with her departure, Ms. Bolens received benefits under the Company’s Senior Officer Severance Plan, which is described beginning on page 36.
The NEOs also receive certain perquisites and participate in certain retirement, health and welfare plans.
Base Salary
Base salaries for continuing officers 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 business performance and leadership. Generally, changes in base salary are the result of either an annual merit increase, promotion, or changeschange in role or market adjustment. Base salaries for newly appointed executive officers are determined based on the scope and complexity of the role, the executive’s prior employment history and experience level, and market competitiveness. Base salary increases for NEOs occurredadjustments are typically made in January 2017of each year. In connection with the promotion of Mr. Denis to Executive Vice President, General Counsel and Secretary in September 2022, his base salary was increased by 21%. Mr. Limberger joined the Company in September 2022 and his base salary was set at that time. In light of the recency of these salary decisions for Mr. Denis and Mr. Limberger, they were innot eligible for the 2% to 6% range,annual January salary adjustment. In January 2023, the base salary rates of the other current NEOs were increased by 5%, reflecting annual merit adjustments.
In May 2023, Mr. Topercer’s base salary rate was increased a further 6.4% in recognition of the expansion of his responsibilities to include management of the Communications and Sustainability departments.
Annual Bonus
Our NEOs, along with other leaders and substantially all U.S. employees, have an opportunity to earn an annual cash bonus based on achievement of certain performance objectives. Beginning in fiscal 2017, the Committee and management modified the annual bonus plan design and metrics to align more closely to the Company's business model of achieving core sales growth, quality of earnings and cash flow generation to fuel acquisitions, capital deployment and share repurchases. The threefour performance metrics implemented within the fiscal 2023 annual bonus plan are Core Sales Growth, Adjusted EBITDA, Adjusted EBITDA Margin % and Free Cash Flow.Flow Conversion. The exhibitdiagram below illustrates the fiscal 20172023 bonus plan design. 
Annual bonus opportunity percentages vary by NEO and are determined based on their scope of duties and responsibilities as well as market and peer group data. Annual cash bonus achievement can range from 0% to 200% of the target annual bonus based on actual performance. The annual bonus payment is calculated for the NEOs based on the actual base salary paid during the fiscal year ended August 31, 2023 and, accordingly, reflects pro ration from the respective annual base salary rates as they were adjusted during the fiscal year. The following table summarizes the fiscal 20172023 annual cash bonus opportunity granted to the NEOs and the weighting of the components of the annual bonus opportunity and weighting for each NEO.as a percentage of the target annual cash bonus opportunity.
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| | | | | | | | | | | | | | | | |
| | | Annual Bonus Opportunity as a % of Base Salary | | Weighting of Components of Target Annual Bonus |
| Name | | Threshold | | Target | | Maximum | | Actuant Core Sales | | Actuant EBITDA Margin % | | Segment Core Sales | | Segment EBITDA Margin % | | Actuant Free Cash Flow |
| Randal W. Baker | | 0% | | 100% | | 200% | | 33.3% | | 33.3% | | — | | — | | 33.4% |
Rick T. Dillon (1) | | 0% | | 70% | | 140% | | 33.3% | | 33.3% | | — | | — | | 33.4% |
Andrew G. Lampereur (2) | | 0% | | 70% | | 140% | | 33.3% | | 33.3% | | — | | — | | 33.4% |
| Stephen J. Rennie | | 0% | | 60% | | 120% | | — | | — | | 33.4% | | 33.3% | | 33.4% |
| Roger A. Roundhouse | | 0% | | 60% | | 120% | | — | | — | | 33.4% | | 33.3% | | 33.4% |
| Eugene E. Skogg | | 0% | | 60% | | 120% | | 33.3% | | 33.3% | | — | | — | | 33.4% |
| |
(1)
| In accordance with his offer letter dated November 10, 2016, Mr. Dillon was entitled to a full year earned bonus without proration. |
| |
(2)
| Mr. Lampereur did not receive a bonus payout in fiscal 2017 due to his departure from the Company in January 2017. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Annual Bonus
Opportunity as a %
of Base Salary | | Weighting of Components of
Target Annual Bonus |
| NEO | | Threshold | | Target | | Maximum | | Core Sales Growth | | Adjusted EBITDA | | Adjusted EBITDA Margin | | Free Cash Flow Conversion |
| Paul E. Sternlieb | | 0 | | 100% | | 200% | | 25% | | 25% | | 25% | | 25% |
| Anthony P. Colucci | | 0% | | 70% | | 140% | | 25% | | 25% | | 25% | | 25% |
| Benjamin J. Topercer | | 0% | | 50% | | 100% | | 25% | | 25% | | 25% | | 25% |
| James P. Denis | | 0% | | 45% | | 90% | | 25% | | 25% | | 25% | | 25% |
| Markus Limberger | | 0% | | 45% | | 90% | | 25% | | 25% | | 25% | | 25% |
| Barbara G. Bolens | | 0% | | 60% | | 120% | | 25% | | 25% | | 25% | | 25% |
The fiscal 2023 annual bonus was designed to be earned is based on performance against approved Core Sales Growth, Adjusted EBITDA, Adjusted EBITDA Margin % and Free Cash Flow
Conversion scales. These metrics align closely to our strategy and shareholder expectations with a focus on profitable growth. The scales which arewere established by the Committee in the first quarter of the fiscal year, considering financial plans, market conditions, year-over-year performance, non-recurring projects, and the general economic environment. Core Sales represents the net sales change between years excluding the impactThese financial measures can be impacted by a variety of acquisitions, divestituresnon-recurring or extraordinary items (e.g., business restructuring) and foreign currency rate changes. EBITDA, Free Cash Flow and Free Cash Flow Conversion are calculated as illustratedactual results may be adjusted for these items if not contemplated in the "Reconciliation of GAAP Measurestarget setting process. Adjustments to Non-GAAP Measures" included in our 2017 Annual Report to Shareholders which accompanies this Proxy Statement.the annual bonus financial results, if any, are reviewed and approved by the Committee. Following the completion of a fiscal year, the Committee approves annual bonus payouts based on the extent to which targets were achieved. Fiscal 20172023 annual bonus achievement for our corporate executives is shown below:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Fiscal 2023 Bonus Scale | | Fiscal 2023 Bonus Achievement |
| (dollars in millions) | | Threshold 0% | | 50% | | Target 100% | | Maximum 200% | | Result | | Bonus Payout % of Target |
Core Sales (1) | | -3.1% | | 0.1% | | 3.2% | | 9.7% | | 7.7% | | 39.7% |
Adjusted EBITDA (2) | | $94.0 | | $111.0 | | $128.0 | | $156.4 | | $153.0 | | 47.1% |
Adjusted EBITDA Margin (3) | | 16.7% | | 19.5% | | 22.3% | | 25.6% | | 25.5% | | 49.3% |
Free Cash Flow Conversion (4) | | 80.0% | | 83.0% | | 86.0% | | 95.0% | | 116.6% | | 50.0% |
(1) Core Sales represents the net sales change between years excluding the impact of acquisitions, divestitures and foreign currency rate changes. |
| | | | | | | | | | | | |
| | | Fiscal 2017 Bonus Scale | | Fiscal 2017 Bonus Achievement |
| | | Threshold | | | | Target | Maximum | | Result | | Bonus Payout % | |
| | | 0% | | 50% | | 100% | 200% | | | |
| Consolidated Core Sales Metric | | -6.9% | | -5.9% | | -2.1% | 2.0% | | -4.0% | | 75.2% | |
| Consolidated EBITDA Margin % Metric | | 13.0% | | 13.4% | | 14.1% | 14.7% | | 11.3% | | 0.0% | |
(3) Adjusted EBITDA Margin is adjusted EBITDA as defined above divided by net sales.
Actuant generated $68 million free(4) Free Cash Flow Conversion is cash flow from operations for fiscal 2017a period reduced by capital expenditures and free cash flow conversion was greater than 125% which resulted in a 100% achievementincreased by the proceeds from the sale of property, plant and equipment and with certain other adjustments, with the total divided by adjusted net income (net income adjusted for this metric. certain items selected by the Committee that it believes do not reflect normal operating conditions).
The blended result of the achievement outcomes above is a bonus payout of 58%186.2% of target. The following table sets forth for our corporate executiveseach NEO the total amount of payouts of annual bonus for fiscal 2017.2023:
| | | | | | | | |
| NEO | | Annual Bonus Payout for Fiscal 2023 ($) |
| Paul E. Sternlieb | | 1,466,325 |
| Anthony P. Colucci | | 650,071 |
| Benjamin J. Topercer | | 353,780 |
| James P. Denis | | 268,128 |
| Markus Limberger | | 340,606 |
| Barbara G. Bolens | | — |
These financial measures can be impactedSigning Bonus
As an inducement to Mr. Limberger to leave his prior employment and join the Company on September 1, 2022, the Company paid him a cash bonus of €300,000 upon the commencement of his employment. The signing bonus was structured to compensate Mr. Limberger for compensation that would have otherwise been payable by his former employer, while providing a variety of non-recurring or extraordinary items (e.g., acquisitions, divestitures, business restructuring, accounting rule changes, etc.) and actual results may be adjusted for these items if not contemplatedretention incentive in the target setting process. All adjustmentsform of an agreement to repay the annual bonus financial results are reviewed and approved by the Committee.
In order to illustrate the historical level of performance against annual bonus targets, the following table summarizes the actual annual bonus payout percentages achieved by our corporate executives (expressed as a percentagefull amount of the target annualsigning bonus level)in the event he voluntarily terminates his employment with the Company (other than for eachgood reason) or the Company terminates his employment for cause within the first year of his employment and 50% of his signing bonus if he voluntarily terminates his employment (other than for good reason) or the last fiveCompany terminates his employment for cause during the second year of his employment. Mr. Limberger voluntarily ceased serving as Executive Vice President, Operations and as an employee at the end of November 30, 2023. In light of this development, Mr. Limberger repaid one-half of his signing bonus. Accordingly, only one-half of Mr. Limberger’s signing bonus is included as compensation for fiscal years:2023 in the Summary Compensation Table appearing on page 31 in the “Bonus” column.
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| | | |
| Fiscal Year | | Annual Bonus Payout |
| 2013 | | 8% | (1) |
| 2014 | | 7% | |
| 2015 | | 0% | |
| 2016 | | 4% | |
| 2017 | | 58% | |
| | | |
(1) Corporate executives declined annual bonuses in fiscal 2013. |
Equity Compensation
We believe that aA significant portion of each NEO’s Total Direct Compensation should be madeis in the form of equity compensation due to thecreate a strong alignment created with shareholders. If ourthe Company’s stock price declines, so does the value of the NEOs'NEOs’ compensation, and vice versa. For ourthe NEOs, the Committee approves aan annual target award value for each NEO based on Willisthe independent compensation consultant’s benchmarking data and other applicable factors, such as internal equity and individual contributions. HistoricallyIn fiscal 2023, the Committee allocated 50% of the annual equity awards forto its NEOs have been allocated in the form of 35% in stock options, 35% inas Performance Shares and 50% as restricted stock units, except for Mr. Sternlieb, whose annual equity awards were allocated as 60% Performance Shares and 30%40% restricted stock units.
In fiscal 2021, as a result of the uncertainties with respect to the COVID-19 pandemic’s impact on the general economy and the markets served by the Company, the sole performance measure used for the Performance Shares awarded that year was the Company’s Total Shareholder Return relative to the S&P 600 SmallCap Industrial Index (approximately 90 companies) (“relative TSR”). For Performance Shares awarded in the fiscal year ended August 31, 2022 (“fiscal 2022”), the Committee selected both relative TSR and Return on Invested Capital (“ROIC”) as equally weighted performance shares. Beginningmeasures, including ROIC to ensure that strategic objectives reflected by that metric were measured and incentivized. For fiscal 2023, the Committee selected relative TSR, ROIC and adjusted Earnings Per Share as equally weighted performance measures for Performance Share awards. The Committee added adjusted Earnings Per Share as a performance metric in fiscal 2018, equity awards for NEOs will be allocated 50% in performance shares and 50% in restricted stock in order2023, to align with the equity allocation practicesCompany’s goal of earnings growth and shareholder value creation. The Company defines these metrics as follows:
•ROIC is adjusted EBITDA, calculated in a manner consistent with adjusted EBITDA as presented by the Peer Group.Company in its quarterly and annual earnings announcements, with adjustments for certain items selected by the Committee that it believes do not reflect normal operating conditions, divided by the sum of Shareholder’s Equity and net debt, with net debt defined as the total of long-term and current debt less cash.
•Adjusted Earnings Per Share is calculated in a manner consistent with adjusted diluted earnings per share from continuing operations as presented by the Company in its quarterly and annual earnings announcements, with adjustments for certain items selected by the Committee that it believes do not reflect normal operating conditions.
The following describes each type of annual award:
Performance Based Restricted Stock ("Units (“Performance Shares"Shares”)—Our
The annual Performance Share awards have a three-year performance period, with vesting based 50% on the achievement of an absolute Free Cash Flow Conversion target and 50% on the Company’s TSR relative to the S&P 600 SmallCap Industrial Index (approximately 90 companies).specified performance metrics. New three-year performance cycles start annually with grants generally near the beginning of each fiscal year. The Committee designedAwards made in fiscal 2023 provided for vesting based on achievement of a Return on Invested Capital target, the plan to include bothCompany’s relative TSR, and Free Cash Flow Conversion elements to emphasizeadjusted Earnings Per Share as equally weighted performance measures. Return on Invested Capital is an important measure in determining how well the importance of these two metrics to the long-term success of the Company.Company deploys capital. Relative TSR aligns the interests of shareholders and executives while strong Free Cash Flow Conversion helps ensure adequate cash generationand is a measure of the Company’s performance relative to fund Companyits peers rather than a measure of absolute performance. Adjusted Earnings Per Share aligns well with the Company's goal of earnings growth dividends and stock buybacks. Theshareholder value creation. With respect to relative TSR, the targets and vesting scale for Performance Shares granted in fiscal 20172023 were as follows:follows (with performance between these levels resulting in vesting based on straight-line interpolation):
| | | | | | | | | | | | | | | | | | | | |
| Measure | | Threshold | | Target | | Maximum |
| Vesting Scale (as a percentage of Target) | | 50% | | 100% | | 200% |
| Relative TSR Percentile | | 25th | | 50th | | 75th |
The threshold, target and maximum levels with respect to the Return on Invested Capital and adjusted Earnings Per Share measures are not presented as such information is confidential and competitively sensitive. In setting these levels, the Committee considered achievement of the target level to be a stretch goal. Payout of shares under the Performance Shares is subject to continued employment, except in the event that employment is terminated as a result of death, disability, a qualifying retirement or is a qualifying termination under the Company’s Senior Officer Severance Plan, in which case the number of shares to be paid out is to be prorated based on the period served during the performance period relative to the full performance period.
For the annual Performance Shares awarded in fiscal 2023, the payout with respect to the relative TSR component is capped at 100% of the target amount if the Company’s absolute total shareholder return for the three-year measurement period is negative. Shares to be issued to Ms. Bolens under the Performance Shares awarded in fiscal 2023 will be reduced pro rata to reflect the term of her employment during the three-year period ending August 31, 2025. The Performance Shares awarded to Mr. Limberger in fiscal 2023 were forfeited upon his departure. The following table summarizes the number of shares that would be issued at the threshold, target and maximum levels for the annual fiscal 2023 Performance Share grants made to the NEOs.
| | | | | | | | | | | | | | | | | | | | |
| | Fiscal 2023 Performance Shares Grants |
| NEO | | Threshold | | Target | | Maximum |
| Paul E. Sternlieb* | | 30,365 | | 60,729 | | 121,458 |
| Anthony P. Colucci | | 4,808 | | 9,616 | | 19,232 |
| Benjamin J. Topercer | | 2,784 | | 5,567 | | 11,134 |
| James P. Denis | | 1,772 | | 3,543 | | 7,086 |
| Markus Limberger** | | 1,772 | | 3,543 | | 7,086 |
| Barbara G. Bolens*** | | 519 | | 1,038 | | 2,076 |
* Does not include the Performance Shares awarded to Mr. Sternlieb on August 30, 2023, which are discussed below under “Special Equity Awards to CEO.”
** The amounts presented for Mr. Limberger do not reflect the forfeiture of his unvested Performance Share awards in connection with his departure.
|
| | | | | | |
| Measure | | Threshold | | Target | | Maximum |
| Vesting Scale (as a percentage of Target) | | 50% | | 100% | | 150% |
| Relative TSR Percentile | | 25th | | 50th | | 75th |
| Free Cash Flow Conversion | | 100% | | 115% | | 140% |
As a result of the uncertainties with respect to the COVID-19 pandemic’s impact on the general economy and the markets served by the Company, the sole performance measure used for Performance Share awards granted in the fiscal year ended August 31, 2021 (“fiscal 2021”) for the three-year performance period ended August 31, 2023 was the Company’s relative TSR. All of the NEOs, other than Ms. Bolens, joined the Company or were promoted to an executive officer position after the Performance Share awards were granted in fiscal 2021 and thus did not receive Performance Shares for the three-year period ended August 31, 2023; only Ms. Bolens received such a Performance Share award. The target and actual shares vestedvesting scale for the recently completed three-year performance periods are summarized as follows (in aggregate for all NEOs):
|
| | | | | | |
| Performance Period Ended | | Target Shares | | Actual Shares Vested | | % of Target Shares Vested |
| August 31, 2015 | | 98,342 | | 58,967 | | 60% |
| August 31, 2016 | | 4,699 | | 2,963 | | 63% |
August 31, 2017 (1) | | 10,570 | | 7,769 | | 74% |
(1) Mr. Lampereur and Mr. Roundhouse are the only NEOs with shares vesting from the fiscal 2015these Performance Share Grant
The three-year measurement period for the fiscal 2015 Performance Share grant ended August 31, 2017Shares, and the vesting level achieved, isare shown below:in the following tables:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Threshold (50%) | | Target
(100%) | | Maximum (150%) | | Actual Performance | | Vesting for Actual Performance |
| Relative TSR Percentile | | 25th | | 50th | | 75th | | 40.6% | | 81.2% |
|
| | | | | | | | | | |
| | Threshold (50%) | | Target (100%) | | Maximum (150%) | | Actual Relative TSR Percentile | | Actual Vesting for Relative TSR Percentile |
Relative TSR Percentile | | 25th
| | 50th
| | 75th
| | Below 25th
| | 0% |
|
| | | | | | | | | | |
| | | Threshold (50%) | | Target (100%) | | Maximum (150%) | | Actual Cash Flow Conversion | | Actual Vesting for Free Cash Flow Conversion |
| Free Cash Flow Conversion | | 100% | | 115% | | 140% | | 139% | | 147% |
The following tables summarize threshold,As a result of these performance levels, shares paid out upon the vesting of the Performance Shares were at 81.2% of the target and maximum restricted stock share opportunities foraward opportunity level, with Ms. Bolens receiving 3,937 shares, with the fiscal 2016 and fiscal 2017 Performance Share grants for eligible NEOs asshares issued to Ms. Bolens being reduced pro rata to reflect the term of her employment during the three-year period ended August 31, 2017:2023.
|
| | | | | | |
| | | 2016 Performance Shares Grant |
| Name | | Threshold | | Target | | Maximum |
| Andrew G. Lampereur | | — | | 9,321 | | 13,982 |
| Roger A. Roundhouse | | — | | 6,353 | | 9,530 |
| Eugene E. Skogg | | — | | 4,143 | | 6,215 |
|
| | | | | | |
| | | 2017 Performance Shares Grant |
| Name | | Threshold | | Target | | Maximum |
| Randal W. Baker | | — | | 33,044 | | 49,566 |
| Rick T. Dillon | | — | | 6,004 | | 9,006 |
| Andrew G. Lampereur | | — | | 9,253 | | 13,880 |
| Stephen J. Rennie | | — | | 5,618 | | 8,427 |
| Roger A. Roundhouse | | — | | 6,873 | | 10,310 |
| Eugene E. Skogg | | — | | 4,759 | | 7,139 |
Restricted Stock Units and Awards—Restricted
The annual restricted stock units and awards granted prior to January 2017officers in fiscal 2023 generally vested 50% after three years with the remaining 50% vesting after five years. Restricted stock awarded in January 2017 and thereafter generally vestsvest, subject to continued employment, in equal annual installments over a three-year period. Accordingly, such awards serve as a retention incentive, as unvested awards are forfeited if the executive voluntarily leaves the Company. The Committee has the ability to vary the vesting schedule for new grants. Individuals granted restricted stock units have the ability to defer receipt and taxability of the shares beyond their normal vesting dates into the Employee Deferred Compensation PlanCompany’s deferred compensation plan by providing written notice to the Company at least twelve months in advance of the award’s scheduled vest date.
Stock Options—Stock options granted to NEOs generally become 50% exercisable three years after the grant date with the remaining 50% exercisable after five years. The Committee has the ability to vary both the term and vesting schedule for new stock option grants in accordance with the deferred compensation plan. All optionsIn addition, in the event of termination of employment due to death, the restricted stock units become fully vested, and upon termination of employment due to disability some or all of the restricted stock units may vest as determined by the Committee in its discretion.
In fiscal 2023, the Committee granted annual awards of restricted stock units to executive officers in October. In prior fiscal years, annual restricted stock units were awarded approximately the same date as the annual meeting of shareholders (typically held in January or February). The Committee changed its practice in fiscal 2023 to make annual restricted stock unit awards on the same date that Performance Shares are granted and when other annual compensation decisions are generally made, which has consistently been in October.
In addition, Mr. Limberger was granted restricted stock units having a grant date fair value of $171,923 upon the date he commenced employment (September 1, 2022) as an inducement to him to join the Company, as he left an existing position with another firm and forfeited equity awards with his prior employer as a consequence of accepting his position with the Company. These additional restricted stock units awarded to Mr. Limberger vested on September 1, 2023.
The following table summarizes the Committee’s authorization,number of restricted stock units and the grant date fair value of restricted stock unit awards (based on the market price of the shares on the grant date) made to each NEO during fiscal 2023 as part of the annual award program (and the initial award to Mr. Limberger).
| | | | | | | | | | | | | | |
| | | Restricted Stock Unit Awards |
| NEO | | Number of Shares (#) | | Grant Date Fair Value ($) |
| Paul E. Sternlieb* | | 40,486 | | 1,000,004 |
| Anthony P. Colucci | | 9,615 | | 237,491 |
| Benjamin J. Topercer | | 5,567 | | 137,505 |
| James P. Denis | | 3,543 | | 87,512 |
| Markus Limberger** | | 12,488 | | 259,435 |
| Barbara G. Bolens | | 5,364 | | 132,491 |
* Does not include the restricted stock units awarded to Mr. Sternlieb on August 30, 2023, which are discussed below under “Special Equity Awards to CEO.”
** The amounts presented for Mr. Limberger include the inducement award of 8,945 restricted stock units, having a grant date fair value of $171,923, awarded to him in connection with the commencement of his employment, which award vested on September 1, 2023, and do not reflect the forfeiture of unvested restricted stock units in connection with his departure.
Special Equity Awards to CEO
Effective on August 30, 2023, Mr. Sternlieb was granted special equity awards of Performance Shares and restricted stock units. The Committee recommended and the independent members of the Board approved these special equity awards because they believe these awards will incentivize Mr. Sternlieb to continue to focus on growth and shareholder value creation, as well as to help retain him as the Company’s CEO, for the next several years. The special equity awards have an exercise price equalaggregate grant date fair value of approximately $4.5 million, with awards having one-third of that value vesting, subject to his continued employment, on the first, second and third anniversaries of the date of the award. The awards consist of a time-vesting restricted stock unit award, representing two-thirds of the aggregate grant date fair value, and a performance-vesting restricted stock unit award representing one-third of the aggregate grant date fair value.
The Performance Shares vest, subject to continued employment, on the third anniversary of the date of grant and are payable based on achievement of net revenue and adjusted EBITDA margin targets for the fiscal year ending August 31, 2026. “Net revenue” is defined as total revenue for the period less allowances for discounts and returns and “adjusted EBITDA margin” is calculated by dividing adjusted EBITDA for the period (calculated in a manner consistent with adjusted EBITDA as presented by the Company in its quarterly and annual earnings announcements, and without any additional adjustments as may be determined by the Committee under the annual bonus plan) divided by net revenue for the period. The number of shares to be earned under the Performance Shares is based on the level of net revenue for the fiscal year ending August 31, 2026, with 50% of the target amount of shares being earned at a threshold specified level, 100% of the target level of shares at the target specified level, and 200% of the target level of shares at the specified maximum level (with performance between these specified levels resulting in the payout of shares based on straight-line interpolation), provided that no shares will be earned if the adjusted EBITDA margin for that fiscal year is below a specified minimum level. The threshold, target and maximum levels with respect to net revenue and the minimum adjusted EBITDA margin are not presented, as such information is confidential and competitively sensitive. In setting these levels, the Committee and the Board considered achievement of the target level of net revenue and minimum adjusted EBITDA margin to be stretch goals. The shares that would be paid out under the Performance Shares at the threshold, target and maximum levels of net revenue performance, assuming satisfaction of the minimum adjusted EBITDA margin, are 27,808, 55,617 and 111,234, respectively. The Performance Shares have a grant date fair value at target of $1,500,000. Payout of shares under the Performance Shares is subject to Mr. Sternlieb’s continued employment, except in the event that employment is terminated as a result of death or disability, or is a qualifying termination under the Company’s Senior Officer Severance Plan, in which case the number of shares to be paid out is to be prorated based on the period served since the date of grant relative to the closing market pricefull period from the date of grant until determination of the performance levels for the performance period.
The restricted stock units are for a total of 111,234 shares, which vest, subject to continued employment, in two equal annual installments commencing on the first anniversary of the date of grant, and have a ten-year term. Stock option back-datinggrant date fair value of $2,999,981. In the event of Mr. Sternlieb’s death, the restricted stock units would become fully vested, and upon termination of his employment due to disability some or re-pricing is expressly prohibited. Toall of the extentrestricted stock options are granted in the future,units may vest as determined by the Committee in its discretion.
Under Mr. Sternlieb’s direction and leadership, the Company has currently determined that stock options will vest in equal installments overcreated meaningful shareholder value, significantly improved operational efficiency and productivity, expanded adjusted EBITDA, and built a three-year period. The Committee concluded that a shorter vesting period would enhance retentionstrong foundation for profitable growth. As illustrated by the following graph, since Mr. Sternlieb joined Enerpac as our CEO and President on October 8, 2021 through the practice is more alignedmost recent fiscal year end, August 31, 2023, the TSR with respect to our Class A Common Stock was 27.4% compared to the practicesTSR of 12.9% of the Peer Group.S&P 600 SmallCap Industrial Index for the same period.
Practices Regarding the Grant of Equity Compensation
The Committee has generally followed a practice of making annual equity grants of restricted stock unit awards to its NEOs on a single date each year, when all material information is publicly available. In fiscal 2017, the Committee granted the equity awards at its regularly scheduled January 2017 meeting. Performance Shares were granted in October near the beginning of the three-year performance period. While the vast majority of awards to NEOs have historically been made as part of ourthe Company’s annual grant program, the Committee occasionally also makes awards to NEOs or other employees at other times, such as in connection with hiring, promotions or for retention purposes. In fiscal 2023, the Committee granted Performance Share awards and restricted stock unit awards in October 2023, when it makes its general annual executive compensation decisions.
Severance Payments
In August 2015,connection with their respective termination of employment, Ms. Bolens received benefits under the Board approved an Investment/Matching Restricted Stock Grant Program ("the Program") for senior executivesCompany’s Senior Officer Severance Plan, which is described in “Executive Compensation—Senior Officer Severance Plan and Executive Agreements—Senior
Officer Severance Plan,” beginning on page 36. To be eligible to receive these benefits, Ms. Bolens provided a general release of claims in favor of the Company. Under this Program the Company granted one share of restricted stock or restricted stock unit (the “Matching Shares”) for every two shares of Company common stock purchased by an eligible senior executive. The maximum value of the stock that could be purchased was limited to: $5 million for the Company’s CEO and $2 million for each of the other NEOs. Contingent upon the senior executive continuing to hold the purchased shares and remaining an employee with the Company or a member of the Board, the Matching Shares cliff vest on the third anniversary of the grant date; provided, however, that the Matching Shares fully vest in the event of (a) a termination of employment without cause; (b) the death or total and permanent disability of the senior executive; or (c) material reduction in authority, responsibility or duties. Our CEO was the only NEO to take advantage of the program in fiscal 2017.
The following table summarizes the grant date fair value of restricted stock awards (based on the market price of the shares on the grant date) made to each NEO during each of the last three fiscal years:
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Non-Routine Stock Awards | | |
| Name | | Year | | Routine Stock Awards | | Employment Transition Stock Awards | Retention Stock Awards | | Matching Shares (1) | | Total Stock Awards |
| Randal W. Baker | | 2017 | | $ | 1,624,995 |
| | $ | — |
| $ | — |
| | $ | 282,500 |
| | $ | 1,907,495 |
|
| | | 2016 | | 1,150,000 |
| | — |
| — |
| | 174,423 |
| | 1,324,423 |
|
| | | | | | | | | | | | |
Rick T. Dillon(2) | | 2017 | | $ | 357,484 |
| | $ | 599,988 |
| $ | — |
| | $ | — |
| | $ | 957,472 |
|
| | | | | | | | | | | | |
| Andrew G. Lampereur | | 2017 | | $ | 455,013 |
| | $ | — |
| $ | — |
| | $ | — |
| | $ | 455,013 |
|
| | | 2016 | | 438,772 |
| | — |
| — |
| | 1,027,576 |
| | 1,466,348 |
|
| | | 2015 | | 438,750 |
| | — |
| — |
| | — |
| | 438,750 |
|
| | | | | | | | | | | | |
| Stephen J. Rennie | | 2017 | | $ | 276,246 |
| | $ | — |
| $ | — |
| | $ | — |
| | $ | 276,246 |
|
| | | 2016 | | 149,998 |
| | — |
| — |
| | 218,138 |
| | 368,136 |
|
| | | | | | | | | | | | |
| Rodger A. Roundhouse | | 2017 | | $ | 337,986 |
| | $ | — |
| $ | — |
| | $ | — |
| | $ | 337,986 |
|
| | | 2016 | | 299,000 |
| | — |
| 731,000 |
| | 104,880 |
| | 1,134,980 |
|
| | | 2015 | | 276,252 |
| | — |
| — |
| | — |
| | 276,252 |
|
| | | | | | | | | | | | |
| Eugene E. Skogg | | 2017 | | $ | 234,004 |
| | $ | — |
| $ | — |
| | $ | — |
| | $ | 234,004 |
|
| | | 2016 | | 195,008 |
| | — |
| — |
| | 624,877 |
| | 819,885 |
|
| | | 2015 | | 150,005 |
| | 450,000 |
| — |
| | — |
| | 600,005 |
|
| |
(1)
| The ability for NEOs to receive Matching Shares under the Program expired in March 2016 for all NEOs, with the exception of Mr. Baker who was provided matching eligibility through October 2016 in accordance with the terms of his offer letter dated February 24, 2016. |
| |
(2)
| Mr. Dillon received a new hire grant of $600,000 consistent with his offer letter dated November 10, 2016 which vests in equal installments over 2 years. Additionally, Mr. Dillon was provided matching share eligibility through June 2017, but did not participate in the Program. |
Retirement and Other Benefits
We provideThe Company provides additional benefit programs to ourits employees, including executivesNEOs and our NEOs,other executives, to attract and retain them as well as to provide a competitive total compensation program. Actuant’sThe Company's benefits philosophy is to generally provide similar benefit programs
for all non-bargaining unit employees, including our NEOs. However, modificationsModifications may be made in cases where IRS limits or other regulations prevent equitable treatment or for competitive positioning purposes. The following table summarizes such benefit plans and eligibility (for ourfor U.S. employees):
|
| | | | | | | | | | | | | | | | | | | |
| Type of Benefit | | NEOs | | Certain Other
Executives and
High Level Managers
| | Most Other
Full Time Employees
|
| 401(k) Retirement Plan | | ü | | ü | | ü |
| Supplemental Executive Retirement Plan (SERP) | | ü | | Selectively | | Not Offered |
| Employee Deferred Compensation Plan | | ü | | ü | | üSelectively |
| Medical/Dental/Vision Insurance | | ü | | ü | | ü |
| Annual Physical | | ü | | Selectively | | Not Offered |
| Life and Disability Insurance | | ü | | ü | | ü |
Supplemental Life andLong-Term Disability Insurance | | ü | | Selectively | | Not Offered |
| Employee Stock Purchase Plan | | ü
Not Offered | | ü
Selectively | | ü |
Vacation | | ü | | ü | | ü |
| Tuition Reimbursement Plan | | ü | | ü | | ü |
Automobile AllowanceAllowance/Leased Vehicle | | ü | | Selectively | | Selectively |
| Financial Planning Services | | ü | | Selectively | | Not Offered |
| Personal Use of Company Aircraft | | ü | | Selectively | | Not Offered | | Not Offered |
401(k) Retirement Plan
(“401(k) Plan”)
Under ourthe Company’s 401(k) Plan, most employees, including our NEOs, may contribute eligible compensation up to IRS limits. Historically, the Company has provided a matching contribution of $0.50 for every $1 on employee elective contributions, up to 8% of eligible pay, with immediate vesting. In May 2020, the Company temporarily suspended the matching contributions under the 401(k) Plan as part of company-wide cost savings actions implemented to mitigate the adverse financial impact of the COVID-19 pandemic. The matching contributions were reinstated in January 2021 on terms consistent with the Company’s historical practice. Although the 401(k) Plan permits the Company generally provides a “core” contribution equalto make annual, discretionary contributions of up to 3% of eligible compensation (subject to IRS compensation and contribution limits). In addition, the Company provides a matching contribution of 100% for the first $300 contributed to the Plan, and an additional 25% match on employee elective contributions between $300 and 6% of eligible compensation. Company matching and core contributions vest 25% after two years, 50%pay that would be fully vested after three years 75% after four years and 100% after fiveof service, the Company has not made any such contributions for several years.
Supplemental Executive Retirement Plan ("SERP"(“SERP”)
The SERP covers certain executive level employees (including the NEO’s)NEOs) and is designed to improve the competitive positioning of ourthe Company's retirement programs, reward long-service employees and support executive retention and recruiting efforts. The SERP is a nonqualified defined contribution plan and the benefit is calculated by applying a SERP multiplier to total eligible compensation in a given year (base salary plus annual paid bonus). The SERP multiplier ranges from 3-6%,3 to 6% and is determined by a formula that takes into account the executive’s age and years of service. SERP contributions are credited to a notional interest bearing account and vest after five years of service or when the executive turns 60. The targeted combined annual NEO retirement contribution between the SERP and 401(k) Plan is approximately 7-10.5%7 to 10.5% of cash compensation, depending on age and years of service. Each year the Committee determines the interest rate for new SERP contributions and set the rate for fiscal 2023 deferrals at 4%.
Employee Deferred Compensation Plan
WeThe Company also offeroffers a deferred compensation plan that allows U.S. employees with base salary over $120,000 to defer cash compensation, shares issuable under restricted stock unit and Performance Share awards, and associated taxes until retirement or termination of employment. Investmentemployment or, subject to certain limitations, an earlier specified date. Investments include a mix of options includesimilar to the 401(k) Plan, a company stock account (although the plan was amended during the fiscal year ended August 31, 2019 to no longer permit investment contributions other than the deferral of restricted stock units to be made into the company stock account) and, for deferrals made prior to December 1, 2019, an interest bearing account and/or a common stock account. As a result of the unfunded nature of the plan, compensation deferrals are essentially unsecured loans from employees to the Company. Each year the Committee determines the interest rate for new deferrals, taking into account current market rates. The stock account return mirrors the performance of Actuant’sthe Company’s stock price. Shares of common stock equal to the valuenumber of deferred contributions into that accountvested shares are transferred by the Company into a rabbi trust. When distributed, deferred amounts invested in the interest accountand investment accounts are paid out in cash while an appropriate number of shares of common stock (plus accrued dividends) areis released from the rabbi trust to satisfy common stock fund distributions.
In addition,Contributions into the Employee Deferred Compensation Plan allows all employeesdeferred compensation plan may reduce the ability to participate fully in the U.S. with annual eligible401(k) Plan. The same matching formula is used for deferrals in the deferred compensation in excess of $260,000, to receive their 401(k) core contribution, calculatedplan as if no IRS limits were in place ("Restoration Contribution"). We believe that it is not equitable, or market competitive, to limit the Company core contribution to the 401(k) Plan based on IRS compensation and contribution limits. All Company core contributions pursuant to the Deferred Compensation Plan are deemed to be invested in Actuant common stock and are credited to participant's Deferred Compensation Plan Core Contribution Stock Fund.
Plan.
Other Benefits
We provideOther perquisites are provided to help executives be more productive and efficient, to provide protection from potential business risk and as a competitive compensation measure. They are limited in amount, and we maintainthe Company maintains a strict policy regarding the eligibility and use of these benefits, which include financial planning and personal use of the company airplane. Annual NEO personal use of the plane (which is reviewed by the Committee at least annually) is capped at 24 hours of flight time for the CEO and 12 hours for all other NEOs. The other benefits earned by our NEOs in fiscal 20172023 are included in the “All OtherOther” Compensation” column of the Summary Compensation Table”Table appearing on page 31.31, with details provided in footnote 5 to that table.
Tax Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code limits the tax deductibility of compensation that we pay to NEOs to $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. While the Committee generally intends for payments under certain of our incentive plans to meet the criteria for tax deductibility under the provisions of the Internal Revenue Code, the Committee retains full discretion and flexibility in structuring compensation programs that are designed to attract, reward and retain successful executives, even if not fully deductible.
Stock Ownership Requirements
STOCK OWNERSHIP REQUIREMENTS
Ownership of ActuantCompany stock by our executives directly aligns their interests with shareholders. Accordingly, the BoardCompany maintains stock ownership guidelines for our NEOs equal in value to a multiple of their base salary.salary, with the levels for current NEOs set forth in the table below.
|
| | | | | | | |
| Position | | Multiple of Base Salary
Required to be held in
Actuant
Company Stock
|
| CEO | | 5X |
| Other NEOs | | 3X |
Effective fiscal 2017, our Board of Directors approved changes to our stockStock ownership requirements to include the value of unvested restricted stock units, consistent with Peer Group practices. Additionally, the value of "in the money" vested options, shares held in the 401(k), Plan, employee stock purchase plan and/or deferred compensation accounts, as well as shares owned outright or by immediate family members continue to beare counted towards the ownership requirements. In order to be market competitive and aligned with our peers, we have extended theThe compliance period to achieve the ownership requirement to 5 years from 3is five years from the date of appointment. The Committee reviews each NEO'sNEO’s compliance with these guidelines on an annual basis, and all NEO'sNEOs who are current executive officers either have either met the target ownership level, or are within the five yearfive-year compliance period.
ExecutivesSales of shares by executives are expected to hold all of their shareslimited until the ownership requirements are met. Those who have not reached their specified targets are required to hold 50% gross value of the sharesnet vested share value for each grant they receive so that they meet their requirements in a timely manner, with the 50% balance available to cover related income tax obligations.manner.
Anti-Hedging PolicyANTI-HEDGING POLICY
Actuant maintainsThe Company has adopted a policy that prohibitsprohibiting directors, officers, and other employees from engaging in short-term or speculative transactions involving itsthe Company’s common stock. This policy prohibits trading in Company common stock on a short-term basis, engaging in short sales, and buying and selling puts and calls, and discourages the practice of purchasing the Company’s stock on margin.
COMPENSATION CLAWBACK POLICIES
Compensation Clawback Policy
We have aThe Company maintains two executive compensation clawback policy forpolicies with respect to its executive officers, whichincluding a policy adopted effective as of December 1, 2023 to address new requirements under rules recently adopted by the SEC and NYSE mandating the clawback of incentive compensation upon the restatement of the Company's financial statements. The prior-existing clawback policy that had been adopted by the Company defines the economic consequences that misconduct could have on their compensation. Inthe compensation of executive officers. Under that policy, in the event of a financial restatement due to fraud or misconduct, as determined by the Board of Directors, the responsible executiveexecutives must reimburse the Company for their annual cash bonus, as well as equity basedequity-based awards or other performance-based compensation paid to the executive based on the financial results that were the subject of the restatement.
The policy adopted effective as of December 1, 2023 is of broader scope and applies with respect to a restatement of the Company’s financial statements even in the absence of any fraud or misconduct by an executive officer. The policy generally requires the recovery by the Company, in the event of a required accounting restatement (including a “little-r” restatement) of the Company’s financial statements, of incentive-based compensation received after the date of the adoption of the policy, which is based wholly or in part upon the attainment of any financial reporting measure, received by current or former executive officers to the extent that such compensation based on the erroneously reported financial information exceeds the amount derived from the restated financial information. Clawback under the policy is required for any such excess compensation received during the three completed fiscal years immediately preceding the date the Company is required to prepare an accounting restatement. The policy provides for mandatory clawback by the Company of such excess compensation, with exceptions applicable only if (a) the direct expense paid to a third party to assist in enforcing the policy would exceed the amount to be recovered (provided that the Company must make a reasonable attempt to recover such erroneously awarded compensation, document its reasonable attempts to recover, and provide that documentation to the NYSE) or (b) a recovery from certain tax-qualified retirement plans would likely cause such plans to fail to meet the statutory requirements for tax exemption. To facilitate the application of the policy, the Company requires recipients of awards of incentive compensation based wholly or in part upon the attainment of any financial reporting measure, including relative TSR, to agree to repay any such excess compensation in accordance with the policy. Conclusion
CHANGES FOR THE FISCAL 2024 EXECUTIVE COMPENSATION PROGRAM
We believe that we have designed anThe Company did not make any structural changes to the design of its executive compensation program that effectively links payfor the fiscal year ending August 31, 2024 ("fiscal 2024"), including the performance measures and performance and isweightings used in the bestannual bonus program and annual long-term interestsequity awards, other than the changes in the peer group of our shareholders. As indicatedcompanies used for comparative purposes in our Compensationevaluating the reasonableness and appropriateness of executive compensation, as described above, and starting in fiscal 2024, allowing NEOs to participate in the Company's employee stock purchase plan. The Committee Charter, we will continue to evaluate ourbelieves the structure of the executive compensation program continues to ensure future alignment in our compensation program and practices. Shareholder input will continue to be an important consideration in our annualalign executive compensation evaluation process.incentives with shareholder interests.
Compensation Committee Report
TALENT DEVELOPMENT AND COMPENSATION COMMITTEE REPORT
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.
November 27, 2023
THE
TALENT DEVELOPMENT AND COMPENSATION COMMITTEE
Holly A. Van Deursen, Chairperson
Gurminder S. Bedi
Richard D. Holder, Chair
R. Alan Hunter Jr.Alfredo Altavilla
Dennis K. WilliamsJudy L. Altmaier
Palmer Clarkson
Lynn C. Minella
Summary Compensation Table
SUMMARY COMPENSATION TABLE
The following table sets forth the total compensation applicable to the fiscal years ended August 31, 2017, 20162023, 2022 and 20152021 by the NEOs:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Salary | | Bonus | | Stock Awards | | Non-Equity Incentive Plan Compensation | | Change in Pension Value and Non-qualified Deferred Compensation Earnings | | All Other Compensation | | Total |
| Name & Principal Position | | Year | | ($) | | ($)(1) | | ($)(2)(3) | | ($)(4) | | ($)(5) | | ($)(6) | | ($) |
Paul E. Sternlieb(7) | | 2023 | | 774,519 | | | — | | | 6,999,985 | | | 1,466,325 | | | — | | | 367,677 | | | 9,608,505 | |
| President and Chief Executive Officer | | 2022 | | 666,346 | | | 977,500 | | | 5,057,747 | | | — | | | — | | | 211,675 | | | 6,913,268 | |
| | | | | | | | | | | | | | | | |
Anthony P. Colucci(8) | | 2023 | | 490,529 | | | — | | | 475,015 | | | 650,071 | | | — | | | 56,309 | | | 1,672,924 | |
| Executive Vice President and Chief Financial Officer | | 2022 | | 118,750 | | | 245,000 | | | 120,009 | | | 13,555 | | | — | | | 12,571 | | | 509,885 | |
| | | | | | | | | | | | | | | | |
Benjamin J. Topercer(9) | | 2023 | | 358,635 | | | — | | | 275,005 | | | 353,780 | | | — | | | 60,689 | | | 1,048,109 | |
| Executive Vice President of Chief Human Resources Officer | | 2022 | | 183,077 | | | 185,000 | | | 812,501 | | | 18,034 | | | — | | | 47,033 | | | 1,245,645 | |
| | | | | | | | | | | | | | | | |
James P. Denis (10) | | 2023 | | 315,769 | | | — | | | 175,012 | | | 268,128 | | | — | | | 55,141 | | | 814,050 | |
| Executive Vice President, General Counsel, Secretary and Chief Compliance Counsel | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Markus Limberger(11) | | 2023 | | 406,650 | | | 162,660 | | | 346,935 | | | 340,606 | | | — | | | — | | | 1,256,851 | |
| Former Executive Vice President, Operations | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Barbara G. Bolens(12) | | 2023 | | 202,682 | | | — | | | 265,016 | | | — | | | — | | | 597,395 | | | 1,065,093 | |
| Former Executive Vice President and Chief Strategy Officer | | 2022 | | 329,642 | | | — | | | 524,398 | | | 31,968 | | | — | | | 87,559 | | | 973,567 | |
| | 2021 | | 311,827 | | | — | | | 337,584 | | | 46,774 | | | 280 | | | 81,175 | | | 777,640 | |
(1)In fiscal 2023, in connection with the commencement of his employment, Mr. Limberger received a signing bonus of €300,000. In fiscal 2022, in connection with the commencement of their respective employment, Mr. Sternlieb, Mr. Colucci and Mr. Topercer received a signing bonus of $415,000, $245,000 and $185,000, respectively. Each of these executive officers is required to repay all or some of the signing bonus in the event he voluntarily terminates his employment with the Company before certain specified dates other than for good reason (and, in the case of Mr. Limberger, also if the Company terminates his employment for cause), with the amount of the required repayment being based on the length of service prior to departure. In connection with his resignation, Mr. Limberger has repaid one-half of his signing bonus in accordance with the terms of his agreement with the Company with respect to the recoupment of the signing bonus. Accordingly, one-half of Mr. Limberger’s signing bonus is included as compensation for fiscal 2023. Mr. Sternlieb’s initial employment arrangement provided that his annual bonus payment for fiscal 2022 would be no less than 75% of his annual base salary for that fiscal year. For fiscal 2022, the full amount of signing bonus received by Mr. Sternlieb, Mr. Colucci and Mr. Topercer and the guaranteed portion of Mr. Sternlieb’s annual bonus payment are reported as “Bonus” in this table.
(2) Equity compensation awards granted in fiscal 2023 consisted of restricted stock units and Performance Shares. These equity awards are reported at a value, developed solely for purposes of disclosure in accordance with the rules and regulations of the SEC, equal to the “grant date fair value” thereof under ASC Topic 718 of the Financial Accounting Standards Board (“FASB”) for financial reporting purposes, except that the reported value does not reflect any adjustments for risk of forfeiture. The reported amounts for any award do not reflect any adjustments for restrictions on transferability. See Note 14 of the Notes to Consolidated Financial Statements included in our Form 10-K for the year ended August 31, 2023 for a discussion of the assumptions made in determining the grant date fair values in this column. For the Performance Shares, the amount reported is based on the number of shares issuable upon achievement of the target level of performance. As described on pages 25 and 26, the payout for Performance Share ranges from 0% to 200% of the target level based on the actual performance level achieved. Assuming maximum payouts for the Performance Shares at 200% of the target level, the amounts reported above for the restricted stock units and Performance Shares for fiscal 2023 would be as follows: Mr. Sternlieb, $9,999,985; Mr. Colucci, $712,515; Mr. Topercer, $412,505; Mr. Denis, $262,512; Mr. Limberger, $434,435; and Ms. Bolens, $397,516. All restricted stock units and Performance Share awards granted to Mr. Limberger that were unvested as of his November 30, 2023 departure from the Company were forfeited upon his departure. The amounts reported in the table for Mr. Limberger do not reflect the impact of such forfeiture. In accordance with the Company’s Senior Officer Severance Plan, Ms. Bolens’ Performance Shares are eligible to vest, notwithstanding her departure from the Company prior to the vesting date, on a pro rata basis based on the portion of the performance period during which she was employed with the Company. The amounts reported for fiscal 2023 do not reflect such pro rata reduction.
(3) Stock awards to Mr. Sternlieb in fiscal 2023 include annual awards of restricted stock units and Performance Shares having grant date fair values of $1,000,004 and $1,500,000, respectively, and special awards of restricted stock units and Performance Shares granted on August 30, 2023 having grant date fair values of $2,999,981 and $1,500,000, respectively. The restricted stock units granted on August 30, 2023 vest in equal annual installments on the first and second anniversaries of the date of grant and the Performance Shares granted on August 30, 2023 vest based on achievement of net revenue and adjusted EBITDA margin targets for the fiscal year ending August 31, 2026.
(4) Reflects amounts earned under the annual bonus plan, except that, for 2021, the amount does not reflect the value of restricted stock units awarded in connection with the Company’s annual bonus plan for the performance period for the first half of fiscal 2021, the value of which is included for fiscal 2021 under the column heading “Stock Awards.” Annual bonus plan amounts are paid in the first quarter of the subsequent fiscal year.
(5) Reflects the portion of interest earned in the Employee Deferred Compensation Plan and Supplemental Executive Retirement Plan to the extent that it exceeds the SEC benchmark “market” rate of 2.09%, 4.12% and 5.36% in 2021, 2022 and 2023, respectively (120% of the applicable federal long-term rate). See page 28 for information on the Employee Deferred Compensation Plan, and page 35 for NEO activity in this plan.
(6) For fiscal 2023, these amounts consist of the following:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name & Principal Position | | Year | | Salary
($) | | Stock
Awards
($) (7) | | Option
Awards
($) (8) | | Annual Bonus
($) (9) | | Non-qualified
Deferred
Compensation
Earnings
($) (10) | | All Other
Compensation
($) (11) | | Total
($) |
| Randal W. Baker (1) | | 2017 | | $ | 850,000 |
| | $ | 1,907,495 |
| | $ | 875,059 |
| | $ | 496,400 |
| | $ | 879 |
| | $ | 120,514 |
| | $ | 4,250,347 |
|
| President and Chief Executive Officer | | 2016 | | 405,385 |
| | 1,324,423 |
| | 1,150,000 |
| | 212,500 |
| | — |
| | 39,641 |
| | 3,131,949 |
|
| | | | | | | | | | | | | | | | | |
Rick T. Dillon (2) | | 2017 | | $ | 320,192 |
| | $ | 957,472 |
| | $ | 392,531 |
| | $ | 183,960 |
| | $ | — |
| | $ | 409,468 |
| | $ | 2,263,623 |
|
| Executive Vice President and Chief Financial Officer | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Andrew G. Lampereur (3) | | 2017 | | $ | 325,990 |
| | $ | 455,013 |
| | $ | 245,060 |
| | $ | — |
| | $ | 260,522 |
| | $ | 513,496 |
| | $ | 1,800,081 |
|
| Former Executive Vice President and Chief Financial Officer | | 2016 | | 490,000 |
| | 1,466,348 |
| | 236,249 |
| | 13,034 |
| | 278,573 |
| | 69,554 |
| | 2,553,758 |
|
| | | 2015 | | 482,000 |
| | 438,750 |
| | 236,216 |
| | — |
| | 187,311 |
| | 73,139 |
| | 1,417,416 |
|
| | | | | | | | | | | | | | | | |
Stephen J. Rennie (4) | | 2017 | | $ | 410,000 |
| | $ | 276,246 |
| | $ | 148,735 |
| | $ | 191,880 |
| | $ | 6,744 |
| | $ | 58,001 |
| | $ | 1,091,606 |
|
| Executive Vice President - Industrial Segment | | 2016 | | 360,769 |
| | 368,136 |
| | 224,997 |
| | 19,172 |
| | 7,412 |
| | 60,626 |
| | 1,041,112 |
|
| | | | | | | | | | | | | | | | | |
| Roger A. Roundhouse (5) | | 2017 | | $ | 420,000 |
| | $ | 337,986 |
| | $ | 182,000 |
| | $ | 299,376 |
| | $ | 908 |
| | $ | 54,368 |
| | $ | 1,294,638 |
|
| Executive Vice President - Engineered Solutions Segment | | 2016 | | 405,000 |
| | 1,134,980 |
| | 160,991 |
| | — |
| | 583 |
| | 59,709 |
| | 1,761,263 |
|
| | | 2015 | | 390,000 |
| | 276,252 |
| | 206,393 |
| | — |
| | — |
| | 52,560 |
| | 925,205 |
|
| | | | | | | | | | | | | | | | | |
Eugene E. Skogg (6) | | 2017 | | $ | 361,000 |
| | $ | 234,004 |
| | $ | 126,000 |
| | $ | 126,494 |
| | $ | 6,136 |
| | $ | 160,413 |
| | $ | 1,014,047 |
|
| Executive Vice President - Human Resources | | 2016 | | 340,000 |
| | 819,885 |
| | 104,996 |
| | 7,105 |
| | 650 |
| | 62,324 |
| | 1,334,960 |
|
| | | 2015 | | 70,865 |
| | 600,005 |
| | 150,003 |
| | — |
| | — |
| | 76,215 |
| | 897,088 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 401(k) Core and Match | | SERP (a) | | Automobile Allowance | | Supplemental Disability Insurance | | Executive Physical | | Personal Use of Company Plane (b) | | Financial Planning (c) | | Relocation Assistance and Benefits (d) | | Separation/Severance Benefits (e) | | Total |
| Name | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) | | ($) |
| Paul E. Sternlieb | | 11,250 | | | 53,423 | | | 21,301 | | | 3,594 | | | 4,000 | | | 46,075 | | | 6,300 | | | 221,734 | | | — | | | 367,677 | |
| Anthony P. Colucci | | 11,250 | | | 20,127 | | | 16,200 | | | 2,782 | | | 5,950 | | | — | | | — | | | — | | | — | | | 56,309 | |
| Benjamin J. Topercer | | 8,810 | | | 11,254 | | | 25,782 | | | 2,822 | | | 5,245 | | | — | | | 6,776 | | | — | | | — | | | 60,689 | |
| James P. Denis | | 10,595 | | | 14,077 | | | 19,637 | | | 1,914 | | | — | | | 8,918 | | | — | | | — | | | — | | | 55,141 | |
| Markus Limberger | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Barbara G. Bolens | | 4,481 | | | — | | | 12,930 | | | 884 | | | 4,295 | | | — | | | 7,987 | | | — | | | 566,818 | | | 597,395 | |
(a) Represents Company contribution to the SERP plan as described on page 28.
| |
(1)
| Mr Baker joined the Company in March 2016 and therefore his base salary in 2016 represents actual salary earned. Fiscal 2016 stock awards include the non-routine awards described on page 26. Mr. Baker's fiscal 2016 annual bonus was the minimum bonus awarded in his offer letter dated February 24, 2016. |
| |
(2)
| Mr. Dillon joined the Company in December 2016 and therefore base salary represents actual salary earned. His annual salary at August 31, 2017 was $450,000. Mr. Dillon received a $600,000 restricted stock grant and $200,000 option grant upon joining the Company. Mr. Dillon's fiscal 2017 annual bonus was based on full year earnings as stated in his offer letter dated November 10, 2016. |
| |
(3)
| Mr. Lampereur departed the Company in January 2017 and therefore fiscal 2017 base salary represents actual salary earned prior to his departure and a transition services payment of $85,750. Fiscal 2016 stock awards include the non-routine awards described on page 26. |
| |
(4)
| Mr. Rennie was promoted effective August 2016 and therefore his base salary in 2016 represents actual salary earned in his current and former role. Fiscal 2016 stock awards include the non-routine awards described on page 26. Mr Rennie subsequently departed the Company in October 2017. |
| |
(5)
| Mr. Roundhouse's fiscal 2016 stock awards include the non-routine awards described on page 26. |
| |
(6)
| Mr. Skogg joined the Company in June 2015 and therefore his base salary in 2015 represents actual salary earned. Additionally, fiscal 2016 and 2015 stock awards include the non-routine awards described on page26. Mr Skogg subsequently departed the Company in September 2017.
|
| |
(7)
| Amounts reflect the aggregate grant date fair value of restricted stock and Performance Share awards and Investment/Matching Restricted Stock as described in detail under “Non-Routine Stock Awards” on page 26. The amount was determined by multiplying the grant date fair value of the award by the number of restricted shares/units granted, or the number of Performance Shares awarded (assuming a payout at target). As described on page 24, Performance Share vesting ranges from 0% to 150% of target. The value of outstanding unvested Performance Shares at the maximum payout of 150% at August 31, 2017 is summarized in the following table: |
(b) The income for personal use of the Company plane was determined by calculating the incremental cost including fuel, pilot and other variable costs.
(c) Amounts listed in this column include tax gross-up payments made to the applicable NEO with respect to such benefits.
(d) Represents relocation assistance and benefits in accordance with the Company’s Executive Homeowner Policy.
(e) Consists of severance payable under the Company’s Senior Officer Severance Plan, which plan is described beginning on page 36. Pursuant to the Company’s Senior Officer Severance Plan, Ms. Bolens received payment of a lump-sum payment equal to the sum of (1) one year’s base salary at her regular salary rate ($349,650), (2) the annual bonus that would have been payable to her under the Company’s annual bonus plan for the fiscal year in which her termination of employment occurred based on achievement of financial and other goals at “target” levels ($209,790), and (3) the portion of the monthly premium that the Company would normally pay for 12 months of medical, dental and vision coverage at the same level for such benefits immediately prior to the termination of employment (including dependent coverage, to the extent applicable) ($7,378).
(7) Mr. Sternlieb was appointed President and Chief Executive Officer effective October 8, 2021.
(8) Mr. Colucci was appointed Executive Vice President and Chief Financial Officer effective May 30, 2022.
(9) Mr. Topercer was appointed the Company’s Executive Vice President and Chief Human Resource Officer effective February 14, 2022.
(10) Mr. Denis was promoted to Executive Vice President, General Counsel and Secretary on September 23, 2022. Compensation Mr. Denis received in fiscal 2023 in his prior capacities with the Company is included in the amounts reported in the table.
(11) Mr. Limberger joined the Company on September 1, 2022. Mr. Limberger voluntarily ceased serving as Executive Vice President, Operations and as an employee at the end of November 30, 2023. Mr. Limberger is based in Germany and salary, bonus and other cash payments to him are made in Euros. For presentation of his compensation in this table in fiscal 2023, we have translated the amount of payments made to him in Euros to a U.S. dollar amount based on the currency exchange rate on August 31, 2023 of $1.0844 for €1.00.
(12) Ms. Bolens departed from the Company on April 1, 2023. Ms. Bolens received certain severance benefits under the Company’s Senior Officer Severance Plan, a description of which begins on page 36.
|
| | | | | | | | |
| Name | | 2017 Grant | | 2016 Grant |
| Randal W. Baker | | $ | 1,192,062 |
| | $ | — |
|
| Rick T. Dillon | | 216,594 |
| | — |
|
| Andrew G. Lampereur | | 333,802 |
| | 336,255 |
|
| Stephen J. Rennie | | 202,669 |
| | — |
|
| Roger A. Roundhouse | | 247,943 |
| | 229,184 |
|
| Eugene E. Skogg | | 171,681 |
| | 149,459 |
|
| |
(8)
| Amounts represent the aggregate grant date fair value of options utilizing a binomial pricing model. The amounts do not represent the realized or unrealized earnings or value earned in the respective year. Actual realization of value or earnings under equity compensation plans is related to common stock share price appreciation. |
| |
(9)
| Reflects amounts earned under the Annual Bonus plan. Amounts are paid in the first quarter of the subsequent fiscal year. For additional information on the Annual Bonus plan, see page 23. |
| |
(10)
| Reflects the portion of interest earned in the Employee Deferred Compensation Plan and Supplemental Executive Retirement Plan that exceeds the SEC benchmark “market” rate of 3.71%, 2.28% and 3.09% in 2015, 2016 and 2017, respectively (120% of the applicable federal long term rate). See page 27 for information on the Employee Deferred Compensation Plan, and page 36 for NEO activity in this plan. |
| |
(11)
| Reflects all other compensation, as summarized in the following table: |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Year | | 401(k)
Core and
Match | | 401(k)
Restoration (1) | | SERP (2) | | Automobile
Allowance | | Supplemental Life & Disability Insurance | | Executive Physical | | Personal Use of Company Plane (3) | | Club Dues | | Financial Planning | | Relocation Benefits | | Other (4) | | Total |
| Randal W. Baker | | 2017 | | $ | 12,150 |
| | $ | 23,925 |
| | $ | 42,500 |
| | $ | 7,182 |
| | $ | 4,083 |
| | $ | 4,874 |
| | $ | 25,800 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 120,514 |
|
| | | 2016 | | 12,150 |
| | 4,212 |
| | 16,215 |
| | — |
| | 2,739 |
| | 4,325 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 39,641 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Rick T. Dillon | | 2017 | | $ | 12,150 |
| | $ | 10,656 |
| | $ | 9,606 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 12,000 |
| | $ | — |
| | $ | — |
| | $ | 65,056 |
| | $ | 300,000 |
| | $ | 409,468 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Andrew G. Lampereur | | 2017 | | $ | — |
| | $ | — |
| | $ | — |
| | $ | 12,795 |
| | $ | 288 |
| | $ | — |
| | $ | 8,000 |
| | $ | — |
| | $ | 2,413 |
| | $ | — |
| | $ | 490,000 |
| | $ | 513,496 |
|
| | | 2016 | | 12,150 |
| | 6,681 |
| | 29,234 |
| | 10,135 |
| | 3,461 |
| | — |
| | 7,200 |
| | — |
| | 693 |
| | — |
| | — |
| | 69,554 |
|
| | | 2015 | | 11,925 |
| | 7,226 |
| | 30,012 |
| | 11,724 |
| | 3,371 |
| | — |
| | 6,000 |
| | — |
| | 2,881 |
| | — |
| | — |
| | 73,139 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Stephen J. Rennie | | 2017 | | $ | 12,150 |
| | $ | 4,821 |
| | $ | 21,285 |
| | $ | 10,429 |
| | $ | 4,492 |
| | $ | 4,824 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 58,001 |
|
| | | 2016 | | 12,150 |
| | 3,066 |
| | 18,038 |
| | 10,182 |
| | 2,741 |
| | 4,449 |
| | — |
| | — |
| | 10,000 |
| | — |
| | — |
| | 60,626 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Roger A. Roundhouse | | 2017 | | $ | 12,150 |
| | $ | 4,494 |
| | $ | 16,592 |
| | $ | 10,633 |
| | $ | 3,916 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 6,583 |
| | $ | — |
| | | | $ | 54,368 |
|
| | | 2016 | | 12,150 |
| | 4,044 |
| | 15,992 |
| | 9,479 |
| | 3,577 |
| | 7,507 |
| | — |
| | — |
| | 6,960 |
| | — |
| | — |
| | 59,709 |
|
| | | 2015 | | 11,858 |
| | 4,540 |
| | 16,453 |
| | 4,791 |
| | 2,746 |
| | 7,172 |
| | — |
| | — |
| | 5,000 |
| | — |
| | — |
| | 52,560 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Eugene E. Skogg | | 2017 | | $ | 10,999 |
| | $ | 3,642 |
| | $ | 24,367 |
| | $ | 11,530 |
| | $ | 2,365 |
| | $ | 8,196 |
| | $ | — |
| | $ | — |
| | $ | 5,243 |
| | $ | 94,071 |
| | $ | — |
| | $ | 160,413 |
|
| | | 2016 | | 10,445 |
| | 3,335 |
| | 16,913 |
| | 3,088 |
| | 2,365 |
| | 8,213 |
| | — |
| | — |
| | 6,858 |
| | 11,107 |
| | — |
| | 62,324 |
|
| | | 2015 | | 4,978 |
| | — |
| | 4,163 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 17,074 |
| | 50,000 |
| | 76,215 |
|
| |
(1)
| Represents Company Restoration Contribution to the Employee Deferred Compensation Plan, as described on page 27. |
| |
(2)
| Represents Company contribution to the SERP plan as described on page 27. |
| |
(3)
| The income for personal use of the Company plane was determined by calculating the incremental cost including fuel, pilot and other variable costs. |
| |
(4)
| Represents a sign-on bonus in fiscal 2017 for Mr. Dillon, termination/severance amounts in fiscal 2017 for Mr. Lampereur and a sign-on bonus in fiscal 2015 for Mr. Skogg. |
Grants of Plan-Based Awards
The following table sets forth the equity compensation awards in fiscal 2017,2023, as well as the potential range of payouts for fiscal 20172023 under the Annual Bonus plan:annual cash bonus plan.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Grant
Date | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | All Other Stock Awards: Number of Shares or Units(3) | | Grant Date Fair Value of Stock and Option Awards(4) |
| | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | |
| Name | | ($) | | ($) | | ($) | | (#) | | (#) | | (#) | | (#) | | ($) |
| Paul E. Sternlieb | | 10/24/2022 | | — | | | — | | | — | | | 30,365 | | | 60,729 | | | 121,458 | | | — | | | 1,500,000 | |
| | 10/24/2022 | | — | | | — | | | — | | | — | | | — | | | — | | | 40,486 | | | 1,000,004 | |
| | 8/30/2023 | | — | | | — | | | — | | | 27,809 | | | 55,617 | | | 111,234 | | | — | | | 1,500,000 | |
| | 8/30/2023 | | — | | | — | | | — | | | — | | | — | | | — | | | 111,234 | | | 2,999,981 | |
| | n/a | | — | | | 787,500 | | | 1,575,000 | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | |
| Anthony P. Colucci | | 10/24/2022 | | — | | | — | | | — | | | 4,808 | | | 9,616 | | | 19,232 | | | — | | | 237,500 | |
| | 10/24/2022 | | — | | | — | | | — | | | — | | | — | | | — | | | 9,616 | | | 237,515 | |
| | n/a | | — | | | 349,125 | | | 698,250 | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | |
| Benjamin J. Topercer | | 10/24/2022 | | — | | | — | | | — | | | 2,784 | | | 5,567 | | | 11,134 | | | — | | | 137,500 | |
| | 10/24/2022 | | — | | | — | | | — | | | — | | | — | | | — | | | 5,567 | | | 137,505 | |
| | n/a | | — | | | 190,000 | | | 380,000 | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | |
| James P. Denis | | 10/24/2022 | | — | | | — | | | — | | | 1,772 | | | 3,543 | | | 7,086 | | | — | | | 87,500 | |
| | 10/24/2022 | | — | | | — | | | — | | | — | | | — | | | — | | | 3,543 | | | 87,512 | |
| | n/a | | — | | | 144,000 | | | 288,000 | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | |
Markus Limberger(5) | | 9/1/2023 | | — | | | — | | | — | | | — | | | — | | | — | | | 8,945 | | | 171,923 | |
| | 10/24/2022 | | — | | | — | | | — | | | 1,772 | | | 3,543 | | | 7,086 | | | — | | | 87,500 | |
| | 10/24/2022 | | — | | | — | | | — | | | — | | | — | | | — | | | 3,543 | | | 87,512 | |
| | n/a | | — | | | 182,993 | | | 365,985 | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Barbara G. Bolens | | 10/24/2022 | | — | | | — | | | — | | | 2,683 | | | 5,365 | | | 10,730 | | | — | | | 132,500 | |
| | 10/24/2022 | | — | | | — | | | — | | | — | | | — | | | — | | | 5,365 | | | 132,516 | |
| | n/a | | — | | | 209,790 | | | 419,580 | | | — | | | — | | | — | | | — | | | — | |
(1) These columns show the range of cash payouts with respect to awards under the fiscal 2023 annual bonus plan described beginning on page 23. The actual bonuses earned under this plan are included in the Summary Compensation Table on page 31. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Grant
Date | | Estimated Future Payouts Under Annual Bonus (1) | | Estimated Future Vesting
Under Equity
Incentive Plan Awards (2) | | All Other
Stock
Awards:
Number
of Shares
(#) (3) | | All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#) (4) | | Exercise
or Base
Price of
Option
Awards
($/Sh) | | Grant Date
Fair Value
of Stock
and Option
Awards
($) (5) |
| Name | | Threshold
($) | | Target
($) | | Maximum
($) | | Threshold
(#) | | Target
(#) | | Maximum
(#) | |
| Randal W. Baker | | 10/14/2016 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 12,500 |
| | — |
| | $ | — |
| | $ | 282,500 |
|
| | | 10/18/2016 | | — |
| | — |
| | — |
| | — |
| | 33,044 |
| | 49,566 |
| | — |
| | — |
| | — |
| | 749,982 |
|
| | | 1/16/2017 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 32,468 |
| | — |
| | — |
| | 875,013 |
|
| | | 1/16/2017 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 73,130 |
| | 11.97 |
| | 875,059 |
|
| | | n/a | | — |
| | $ | 850,000 |
| | $ | 1,700,000 |
| | | | | | | | | | | | | | |
Rick T. Dillon (6) | | 12/27/2016 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 22,263 |
| | — |
| | $ | — |
| | $ | 599,988 |
|
| | | 12/27/2016 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 18,980 |
| | 10.54 |
| | 200,001 |
|
| | | 1/16/2017 | | — |
| | — |
| | — |
| | — |
| | 6,004 |
| | 9,006 |
| | — |
| | — |
| | | | 164,980 |
|
| | | 1/16/2017 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 7,143 |
| | — |
| | — |
| | 192,504 |
|
| | | 1/16/2017 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 16,090 |
| | 11.97 |
| | 192,530 |
|
| | | n/a | | — |
| | $ | 315,000 |
| | $ | 630,000 |
| | | | | | | | | | | | | | |
| Andrew G. Lampereur | | 10/18/2016 | | — |
| | — |
| | — |
| | — |
| | 9,253 |
| | 13,880 |
| | — |
| | — |
| | $ | — |
| | $ | 210,011 |
|
| | | 1/16/2017 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 9,091 |
| | — |
| | — |
| | 245,002 |
|
| | | 1/16/2017 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 20,480 |
| | 11.97 |
| | 245,060 |
|
| Stephen J. Rennie | | 10/18/2016 | | — |
| | — |
| | — |
| | — |
| | 5,618 |
| | 8,427 |
| | — |
| | — |
| | $ | — |
| | $ | 127,509 |
|
| | | 1/16/2017 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 5,519 |
| | — |
| | — |
| | 148,737 |
|
| | | 1/16/2017 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 12,430 |
| | 11.97 |
| | 148,735 |
|
| | | n/a | | — |
| | $ | 246,000 |
| | $ | 492,000 |
| | | | | | | | | | | | | | |
| Roger A. Roundhouse | | 10/18/2016 | | — |
| | — |
| | — |
| | — |
| | 6,873 |
| | 10,310 |
| | — |
| | — |
| | $ | — |
| | $ | 155,993 |
|
| | | 1/16/2017 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 6,753 |
| | — |
| | — |
| | 181,993 |
|
| | | 1/16/2017 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 15,210 |
| | 11.97 |
| | 182,000 |
|
| | | n/a | | — |
| | $ | 252,000 |
| | $ | 504,000 |
| | | | | | | | | | | | | | |
| Eugene Skogg | | 10/18/2016 | | — |
| | — |
| | — |
| | — |
| | 4,759 |
| | 7,139 |
| | — |
| | — |
| | $ | — |
| | $ | 108,013 |
|
| | | 1/16/2017 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 4,675 |
| | — |
| | — |
| | 125,991 |
|
| | | 1/16/2017 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 10,530 |
| | 11.97 |
| | 126,000 |
|
| | | n/a | | — |
| | $ | 216,600 |
| | $ | 433,200 |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| |
(1)
| These columns show the range of payouts under the fiscal 2017 Annual Bonus plan described on page 23. The actual bonuses earned under this plan are included in the Summary Compensation Table on page 30. Since Mr. Lampereur departed the Company effective January 2017, he was not eligible for a 2017 bonus and therefore bonus payout ranges are not provided. |
| |
(2)
| Reflects Performance Shares granted in fiscal 2017 under the Company’s 2009 Omnibus Plan. Refer to page 24 “Equity Compensation-Performance Based Restricted Stock” for further details on these awards. |
| |
(3)
| Reflects restricted stock granted in fiscal 2017 under the Company’s 2009 Omnibus Plan. |
| |
(4)
| Reflects stock options granted in fiscal 2017 under the Company’s 2009 Omnibus Plan. |
| |
(5)
| The fair value of restricted stock awards is based on the market price of the shares on the grant date or a simulation model (Monte Carlo), depending on the type of performance condition, while the fair value of the option awards is determined using a binomial pricing model. Refer to our Annual Report on Form 10-K for details regarding assumptions utilized to value share based awards. |
| |
(6)
| Mr. Dillon joined the Company in December 2016, but his annual bonus was based upon full year earnings as stated in his offer letter dated November 10, 2016. Mr. Dillon also received a $600,000 restricted stock grant and $200,000 option grant upon joining the Company. |
Outstanding(2) Reflects Performance Shares granted in fiscal 2023 under the Company’s 2017 Omnibus Incentive Plan, as amended (the “2017 Omnibus Incentive Plan”). Refer to “Equity Compensation—Performance Based Restricted Stock Units” beginning on page 25 and “Special Equity Awards to CEO” beginning on page 26 for further details on these awards. In accordance with the Company’s Senior Officer Severance Plan, Ms. Bolens Performance Shares are eligible to vest, notwithstanding her departure from the Company prior to the vesting date, on a pro rata basis based on the portion of the performance period during which Ms. Bolens was employed with the Company. The amounts reported do not reflect such pro rata reduction.
(3) Reflects restricted stock units granted in fiscal 2023 under the 2017 Omnibus Incentive Plan. Each of the awards of restricted stock units vests in three equal annual installments, commencing on the first anniversary of the date of grant, except that the restricted stock awards granted to Mr. Sternlieb on October 30, 2023 vest in two equal annual installments, commencing on the first anniversary of the date of grant, and the restricted stock awards granted as an inducement award to Mr. Limberger on September 1, 2022 in connection with the commencement of his employment vested in full on September 1, 2023. Vesting of the restricted stock units is subject to continued employment through the vesting date.
(4) The grant date fair value of restricted stock unit awards is based on the market price of the shares on the grant date (and in the case of the awards granted on January 15, 2023, which was not a trading day, is based on the market price of the shares at Fiscal Year-Endclosing on the preceding trading day) and the grant date fair value of Performance Shares is based on a simulation model (Monte Carlo). See Note 14 of the Notes to Consolidated Financial Statements included in our Form 10-K for the year ended August 31, 2023 for a discussion of the assumptions made in determining the grant date fair values in this column.
(5) All restricted stock units and Performance Share awards granted to Mr. Limberger that were unvested as of his November 30, 2023 departure from the Company were forfeited upon his departure.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table summarizes the outstanding equity incentive plan awards held by each NEO at August 31,
2017:2023. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Option Awards | | Stock Awards | | | Performance Awards (2) | |
| Name | | Date of Grant | | Number of Securities Underlying Options (#) Exercisable | | Number of Securities Underlying Options (#) Unexercisable | | Option Exercise Price ($) | | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | | | Number of Shares or Units of Stock That Have Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | |
| Randal W. Baker | | 3/21/2016 | | — |
| | 120,441 |
| | $ | 24.42 |
| (5) | 3/21/2026 |
| | 47,092 |
| | $ | 1,132,563 |
| (5) | | — |
| | — |
| |
| | | 4/4/2016 | | — |
| | — |
| | — |
| | — |
| | 2,031 |
| | 48,845 |
| (7) | | — |
| | — |
| |
| | | 7/11/2016 | | — |
| | — |
| | — |
| | — |
| | 5,397 |
| | 129,798 |
| (7) | | — |
| | — |
| |
| | | 10/14/2016 | | — |
| | — |
| | — |
| | — |
| | 12,500 |
| | 300,625 |
| (7) | | — |
| | — |
| |
| | | 10/18/2016 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | 33,044 |
| | $ | 794,708 |
| |
| | | 1/16/2017 | | — |
| | 73,130 |
| | 26.95 |
| (5) | 1/16/2027 |
| | 32,468 |
| | 780,855 |
| (6) | | — |
| | — |
| |
| Rick T. Dillon | | 12/27/2016 | | 0 | | 12/18/1951 | | 26.95 | -5 | 12/27/2026 | | 12/13/1960 | | 12/9/3365 | -4 | | 0 | | 0 | |
| | | 1/16/2017 | | 0 | | 1/19/1944 | | 26.95 | -5 | 1/16/2027 | | 7/22/1919 | | 5/4/2370 | -6 | | 6/8/1916 | | 5/4/2295 | |
| Andrew G. Lampereur | | 1/14/2008 | | 50,000 |
| | — |
| | $ | 28.36 |
| (3) | 1/14/2018 |
| | — |
| | — |
| | | — |
| | — |
| |
| | | 1/9/2009 | | 92,000 |
| | — |
| | 18.33 |
| (3) | 1/9/2019 |
| | — |
| | — |
| | | — |
| | — |
| |
| | | 1/12/2010 | | 44,400 |
| | — |
| | 19.20 |
| (3) | 1/12/2020 |
| | — |
| | — |
| | | — |
| | — |
| |
| | | 1/14/2011 | | 37,000 |
| | — |
| | 27.77 |
| (3) | 1/14/2021 |
| | — |
| | — |
| | | — |
| | — |
| |
| | | 1/9/2012 | | 25,800 |
| | — |
| | 22.87 |
| (3) | 1/9/2022 |
| | — |
| | — |
| | | — |
| | — |
| |
| | | 1/14/2013 | | 20,798 |
| | — |
| | 28.70 |
| (3) | 1/14/2023 |
| | — |
| | — |
| | | — |
| | — |
| |
| | | 1/13/2014 | | 15,238 |
| | — |
| | 35.71 |
| (3) | 1/13/2024 |
| | — |
| | — |
| | | — |
| | — |
| |
| | | 10/29/2014 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | 6,486 |
| | $ | 155,988 |
| (3) |
| | | 1/20/2015 | | 26,159 |
| | — |
| | 22.98 |
| (3) | 1/20/2025 |
| | — |
| | — |
| | | — |
| | — |
| |
| | | 10/19/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | 9,321 |
| | 224,170 |
| (3) |
| | | 1/19/2016 | | 28,513 |
| | — |
| | 21.41 |
| (3) | 1/19/2026 |
| | — |
| | — |
| | | — |
| | — |
| |
| | | 10/18/2016 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | 9,253 |
| | 222,535 |
| (3) |
| | | 1/16/2017 | | 20,480 |
| | — |
| | 26.95 |
| (3) | 1/16/2027 |
| | — |
| | — |
| | | — |
| | — |
| |
| Stephen J. Rennie | | 1/8/2013 | | 0 | | 525 | | 28.21 | -9 | 1/8/2023 | | 0 | | 0 | | | 0 | | 0 | |
| | | 1/14/2013 | | 7/26/1917 | | 7/26/1917 | | 28.70 | -9 | 1/14/2023 | | 1568 | | 3/30/2003 | -9 | | 0 | | 0 | |
| | | 4/8/2013 | | 0 | | 1000 | | 29.65 | -9 | 4/8/2023 | | 0 | | 0 | | | 0 | | 0 | |
| | | 1/13/2014 | | 4/19/1914 | | 4/19/1914 | | 35.71 | -9 | 1/13/2024 | | 1400 | | 3/7/1992 | -9 | | 0 | | 0 | |
| | | 4/4/2014 | | 0 | | 2000 | | 34.48 | -9 | 4/4/2024 | | 0 | | 0 | | | 0 | | 0 | |
| | | 7/7/2014 | | 0 | | 11/4/1906 | | 34.09 | -9 | 7/7/2024 | | 0 | | 0 | | | 0 | | 0 | |
| | | 10/20/2014 | | 0 | | 1500 | | 29.62 | -9 | 10/20/2024 | | 0 | | 0 | | | 0 | | 0 | |
| | | 1/7/2015 | | 0 | | 1000 | | 25.29 | -9 | 1/7/2025 | | 0 | | 0 | | | 0 | | 0 | |
| | | 1/20/2015 | | 0 | | 8/30/1963 | | 22.98 | -9 | 1/20/2025 | | 9/4/1916 | | 2/18/2301 | -9 | | 0 | | 0 | |
| | | 4/6/2015 | | 0 | | 1500 | | 24.46 | -9 | 4/6/2025 | | 0 | | 0 | | | 0 | | 0 | |
| | | 10/19/2015 | | 0 | | 0 | | 0 | | 0 | | 4/7/1910 | | 12/2/2146 | -9 | | 0 | | 0 | |
| | | 1/6/2016 | | 0 | | 0 | | 0 | | 0 | | 3/18/1908 | | 7/14/2097 | -9 | | 0 | | 0 | |
| | | 1/19/2016 | | 0 | | 5/6/1974 | | 21.41 | -9 | 1/19/2026 | | 3/7/1919 | | 4/26/2361 | -9 | | 0 | | 0 | |
| | | 4/4/2016 | | 0 | | 0 | | 0 | | 0 | | 5/23/1907 | | 10/12/2077 | -9 | | 0 | | 0 | |
| | | 10/18/2016 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | | 5/19/1915 | | 12/3/2269 | -9 |
| | | 1/16/2017 | | 0 | | 1/11/1934 | | 26.95 | -9 | 1/16/2027 | | 2/9/1915 | | 5/27/2263 | -9 | | 0 | | 0 | |
| Roger A. Roundhouse | | 5/5/2014 | | 7,331 |
| | — |
| | $ | 33.93 |
| | 5/5/2024 |
| | — |
| | — |
| | | — |
| | — |
| |
| | | 10/29/2014 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | 4,084 |
| | $ | 98,220 |
| |
| | | 1/20/2015 | | — |
| | 16,471 |
| | 22.98 |
| (5) | 1/20/2025 |
| | 6,473 |
| | $ | 155,676 |
| (5) | | — |
| | — |
| |
| | | 4/6/2015 | | — |
| | 6,000 |
| | 24.46 |
| (8) | 4/6/2025 |
| | — |
| | — |
| | | — |
| | — |
| |
| | | 10/19/2015 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | 6,353 |
| | 152,790 |
| |
| | | 10/30/2015 | | — |
| | — |
| | — |
| | — |
| | 4,600 |
| | 110,630 |
| (7) | | — |
| | — |
| |
| | | 1/19/2016 | | — |
| | 19,430 |
| | 21.41 |
| (5) | 1/19/2026 |
| | 7,519 |
| | 180,832 |
| (5) | | — |
| | — |
| |
| | | 3/17/2016 | | — |
| | — |
| | — |
| | — |
| | 13,334 |
| | 320,682 |
| (6) | | 10,000 |
| | 240,500 |
| |
| | | 10/18/2016 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | 6,873 |
| | 165,296 |
| |
| | | 1/16/2017 | | — |
| | 15,210 |
| | 26.95 |
| (5) | 1/16/2027 |
| | 6,753 |
| | 162,410 |
| (6) | | — |
| | — |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Option Awards | | Stock Awards |
| Name | | Grant Date | | Number of Securities Underlying Options (#) Exercisable | | Option Exercise Price ($) | | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(2) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) |
| Paul E. Sternlieb | | 10/8/2021 | | — | | | — | | | — | | | 93,851 | | | 2,458,896 | | (3) | — | | | — | |
| | 10/19/2021 | | — | | | — | | | — | | | — | | | — | | | 58,011 | | | 1,519,888 | |
| | 1/25/2022 | | — | | | — | | | — | | | 33,962 | | | 889,804 | | (3) | — | | | — | |
| | 10/24/2022 | | — | | | — | | | — | | | — | | | — | | | 101,215 | | | 2,651,833 | |
| | 10/24/2022 | | — | | | — | | | — | | | 40,486 | | | 1,060,733 | | (3) | — | | | — | |
| | 8/30/2023 | | — | | | — | | | — | | | — | | | — | | | 55,617 | | | 1,457,165 | |
| | 8/30/2023 | | — | | | — | | | — | | | 111,234 | | | 2,914,331 | | (4) | — | | | — | |
| | | | | | | | | | | | | | | | |
| Anthony P. Colucci | | 5/30/2022 | | — | | | — | | | — | | | 3,937 | | | 103,149 | | (3) | — | | | — | |
| | 10/24/2022 | | — | | | — | | | — | | | — | | | — | | | 23,169 | | | 607,028 | |
| | 10/24/2022 | | — | | | — | | | — | | | 9,616 | | | 251,939 | | (3) | — | | | — | |
| | | | | | | | | | | | | | | | |
| Benjamin J. Topercer | | 2/14/2022 | | — | | | — | | | — | | | 31,788 | | | 832,846 | | (3) | — | | | — | |
| | 10/24/2022 | | — | | | — | | | — | | | — | | | — | | | 5,567 | | | 145,855 | |
| | 10/24/2022 | | — | | | — | | | — | | | 5,567 | | | 145,855 | | (3) | — | | | — | |
| | | | | | | | | | | | | | | | |
| James P. Denis | | 1/19/2021 | | — | | | — | | | — | | | 1,494 | | | 39,143 | | (3) | — | | | — | |
| | 1/25/2022 | | — | | | — | | | — | | | 2,246 | | | 58,845 | | (3) | | | |
| | 10/24/2022 | | — | | | — | | | — | | | — | | | — | | | 3,543 | | | 92,827 | |
| | 10/24/2022 | | — | | | — | | | — | | | 3,543 | | | 92,827 | | (3) | — | | | — | |
| | | | | | | | | | | | | | | | |
Markus Limberger(6) | | 9/1/2022 | | — | | | — | | | — | | | 8,945 | | | 234,359 | | (5) | — | | | — | |
| | 10/24/2022 | | — | | | — | | | — | | | — | | | — | | | 3,543 | | | 92,827 | |
| | 10/24/2022 | | — | | | — | | | — | | | 3,543 | | | 92,827 | | (3) | — | | | — | |
| | | | | | | | | | | | | | | | |
Barbara G. Bolens(7) | | 10/27/2020 | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | 10/19/2021 | | — | | | — | | | — | | | — | | | — | | | 3,504 | | | 91,805 | |
| | 10/24/2022 | | — | | | — | | | — | | | — | | | — | | | 1,038 | | | 27,196 | |
| | | | | | | | | | | | | | | | |
(1) Market value of restricted stock unit awards and Performance Shares is based on the $26.20 closing price on the NYSE of the Company’s Class A common stock on August 31, 2023.
|
| | | | | | | | | | | | | | | | | | | | |
| | | Option Awards | | Restricted Stock Awards | | | Performance Awards (2) | |
| | | Date of Grant | | Number of Securities Underlying Options (#) Exercisable | | Number of Securities Underlying Options (#) Unexercisable | | Option Exercise Price ($) | | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | | | Number of
Shares or
Units of
Stock That
Have Not
Vested
(#) | | Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($) (1) | |
| Eugene Skogg | | 7/21/2015 | | 0 | | 7/12/1945 | | 22.95 | (10) | 7/21/2025 | | 8/11/1935 | | 6/18/2756 | -10 | | 0 | | 0 | |
| | | 10/19/2015 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | | 5/5/1911 | | 10/18/2172 | -10 |
| | | 10/30/2015 | | 0 | | 0 | | 0 | | 0 | | 2/16/1917 | | 12/31/2311 | -10 | | 0 | | 0 | |
| | | 1/6/2016 | | 0 | | 0 | | 0 | | 0 | | 1/24/1941 | | 9/11/2887 | -10 | | 0 | | 0 | |
| | | 1/19/2016 | | 0 | | 9/10/1934 | | 21.41 | -10 | 1/19/2026 | | 6/4/1913 | | 11/28/2222 | -10 | | 0 | | 0 | |
| | | 4/4/2016 | | 0 | | 0 | | 0 | | 0 | | 9/8/1913 | | 3/25/2229 | -10 | | 0 | | 0 | |
| | | 10/18/2016 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | | 1/10/1913 | | 5/12/2213 | -10 |
| | | 1/16/2017 | | 0 | | 10/29/1928 | | 26.95 | -10 | 1/16/2027 | | 10/18/1912 | | 10/31/2207 | -10 | | 0 | | 0 | |
| |
(1)
| Market value of restricted stock awards and Performance Shares has been computed by multiplying the $24.05 closing price of the Company’s common stock on August 31, 2017 (the last trading day of fiscal 2017) by the number of shares awarded. |
| |
(2)
| With the exception of the March 17, 2016 grant to Mr. Roundhouse, awards represent Performance Shares (at target) that include a three-year performance period and vest based on achievement of an absolute Free Cash Flow Conversion target and the Company’s TSR percentile relative to the S&P 600 SmallCap Industrial Index. Subsequent to August 31, 2017 and the completion of the three year performance period, the 2015 Performance Share grant (granted on October 29, 2014) vested at 74% of the target level. See “Equity Compensation-Performance Based Restricted Stock” on page 24 for additional details. The March 17, 2016 award to Mr. Roundhouse vests if certain segment-specific EBITDA targets are achieved by August 31, 2018. |
| |
(3)
| Mr. Lampereur departed the Company in January 2017. As a condition of termination, all of Mr. Lampereur's unvested restricted stock and stock options were fully vested, and all unvested performance awards remain outstanding subject to the original performance criteria. |
| |
(4)
| Restricted stock vests in equal installments over a two year period. |
| |
(5)
| Fifty percent of the share based award vests on the third anniversary and the balance on the fifth anniversary of the grant date. |
| |
(6)
| Restricted stock vests in equal installments over a three year period. |
| |
(7)
| Restricted stock received in connection with the Investment/Matching Restricted Stock Program vests on the third anniversary of the grant date. |
| |
(8)
| Stock options become exercisable on the fifth anniversary of the grant date. |
| |
(9)
| Mr. Rennie departed the Company in October 2017. As a condition of termination, any restricted stock and stock option grants vesting within 2 years of termination will vest. All other restricted stock units and stock options will be forfeited effective October 2017. Mr Rennie's fiscal 2017 performance award will remain outstanding subject to the original performance criteria. |
| |
(10)
| Mr. Skogg departed the Company in September 2017. As a condition of termination, any unvested restricted stock and stock option grants will fully vest as of September 2017 and all unvested performance awards remain outstanding subject to the original performance criteria. |
(2) Represents awards of Performance Shares (at target) that include a three-year performance period (except for the Performance Shares awarded to Mr. Sternlieb on August 30, 2023) and vest based on achievement of performance measures subject to continued employment. Performance Shares granted in fiscal 2021 vest based solely on the Company’s TSR percentile relative to the S&P 600 SmallCap Industrial Index. Performance Shares awarded in fiscal 2022 vest based on achievement of an ROIC target and the Company’s TSR percentile relative to the S&P 600 SmallCap Industrial Index. Performance Shares granted in fiscal 2023, other than the award to Mr. Sternlieb on August 30, 2023, vest based on achievement of an ROIC target, the Company’s TSR percentile relative to the S&P 600 SmallCap Industrial Index, and adjusted Earnings Per Share. Grants of Performance Shares in fiscal 2021 are presented at the target level, grants of Performance Shares in fiscal 2022 are presented at the target level, and grants of Performance Shares in fiscal 2023, other than the Performance Shares awarded to Mr. Sternlieb on August 30, 2023, are presented at the target level. Subsequent to August 31, 2023 and the completion of the three-year performance period, the fiscal 2021 Performance Share grants (granted on October 27, 2020) vested at 81.2% of the target level. The Performance Shares awarded to Mr. Sternlieb on August 30, 2023 vest based on achievement of net revenue and adjusted EBITDA margin targets for the fiscal year ending August 31, 2026, subject to Mr. Sternlieb’s continued employment, and are presented at the target level. See “Equity Compensation—Performance Based Restricted Stock Units” beginning on page 25 and “Special Equity Awards Exercisedto CEO” beginning on page 26 for additional details.
(3) Restricted stock units vest in equal annual installments over a three-year period, subject to continued employment, commencing on the first anniversary of the date of grant. The amount presented reflects the remaining unvested balance.
(4) Restricted stock units vest in equal annual installments over a two-year period, subject to continued employment, commencing on the first anniversary of the date of grant.
(5) Restricted stock units vest in full one year after the date of grant, subject to continued employment.
(6) All restricted stock units and Vested in Fiscal 2017Performance Share awards granted to Mr. Limberger that were unvested as of his November 30, 2023 departure from the Company were forfeited upon his departure.
(7) In accordance with the Company’s Senior Officer Severance Plan, the Performance Share awards for Ms. Bolens reflect pro ration for the period of service prior to her departure relative to the three-year performance period.
The
EQUITY AWARDS EXERCISED AND VESTED IN FISCAL 2023
The grant date fair value of equity compensation awards in each of the past three fiscal years is included in the Summary Compensation Table on page 30.31. However, this does not reflect the actual value realized on past awards, which may be more or less than the target values, depending on the appreciation in the price of the Company’s common stock. The following table summarizes the number of shares and the actual value realized by each NEO upon the exercise of options and vesting of restricted stock units and Performance Shares during fiscal 2017.2023.
|
| | | | | | | | | | | | | | |
| | | Option Awards | | Stock Awards |
| Name | | Number of Shares Acquired on Exercise (#) | | Value
Realized on
Exercise ($)(1) | | Number of Shares Acquired on Vesting (#) | | Value Realized
on Vesting ($)(1) |
| Randal W. Baker | | — |
| | $ | — |
| | — |
| | $ | — |
|
| Rick T. Dillon | | — |
| | — |
| | — |
| | — |
|
| Andrew G. Lampereur | | 42,500 |
| | 135,404 |
| | 105,883 |
| | 2,893,406 |
|
| Stephen J. Rennie | | — |
| | — |
| | 2,748 |
| | 70,621 |
|
| Roger A. Roundhouse | | — |
| | — |
| | 7,639 |
| | 217,454 |
|
| Eugene E. Skogg | | — |
| | — |
| | 6,470 |
| | 155,604 |
|
| |
(1)
| Value realized on exercise of stock options reflects the difference between the option exercise price and the market price at exercise multiplied by the number of shares, while the value realized on the vesting of restricted stock awards reflects the number of shares vested multiplied by the market price of the stock on the vest date. |
Employee Deferred Compensation
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Option Awards | | Stock Awards |
| Name | | Number of Shares Acquired on Exercise (#) | | Value Realized on Exercise ($) | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($)(1) |
| Paul E. Sternlieb | | — | | — | | 63,900 | | 1,371,971 |
| Anthony P. Colucci | | — | | — | | 1,968 | | 51,483 |
| Benjamin J. Topercer | | — | | — | | 15,892 | | 419,390 |
| James P. Denis | | — | | — | | 4,732 | | 116,935 |
| Markus Limberger | | — | | — | | — | | — |
| Barbara G. Bolens | | — | | — | | 33,080 | | 808,313 |
(1)Value realized on the vesting of restricted stock units and Performance Share awards reflects the number of shares vested multiplied by the market price of the stock on the vest date.
EMPLOYEE DEFERRED COMPENSATION
NEOs are eligible to participate in the Company’s Employee Deferred Compensation Plan and Supplemental Executive RetirementRetirement Plan (see page 2728 for a description of the plans).
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Executive Contributions in Last Fiscal Year(1) ($) | | Registrant Contributions in Last Fiscal Year (2) ($) | | Aggregate Earnings in Last Fiscal Year(3) ($) | | Aggregate Withdrawals/Distributions ($) | | Aggregate Balance at Last FYE (4) ($) |
| Paul E. Sternlieb | | | | | | | | | | |
| Deferred Compensation | | — | | | — | | | — | | | — | | | — | |
| Supplemental Executive Retirement | | — | | | 53,423 | | | 2,902 | | | — | | | 81,825 | |
| | | | | | | | | | |
| Anthony P. Colucci | | | | | | | | | | |
| Deferred Compensation | | — | | | — | | | — | | | — | | | — | |
| Supplemental Executive Retirement | | — | | | 20,127 | | | 167 | | | — | | | 24,314 | |
| | | | | | | | | | |
| Benjamin J. Topercer | | | | | | | | | | |
| Deferred Compensation | | 19,152 | | | — | | | 1,004 | | | — | | | 20,156 | |
| Supplemental Executive Retirement | | — | | | 11,254 | | | 212 | | | — | | | 16,566 | |
| | | | | | | | | | |
| James P. Denis | | | | | | | | | | |
| Deferred Compensation | | — | | | — | | | — | | | — | | | — | |
| Supplemental Executive Retirement | | — | | | 14,077 | | | — | | | — | | | 14,077 | |
| | | | | | | | | | |
| Markus Limberger | | | | | | | | | | |
| Deferred Compensation | | — | | | | | | | — | | | — | |
| Supplemental Executive Retirement | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | |
| Barbara G. Bolens | | | | | | | | | | |
| Deferred Compensation | | — | | | — | | | 2,292 | | | — | | | 57,570 | |
| Supplemental Executive Retirement | | — | | | — | | | 2,144 | | | — | | | 55,022 | |
| | | | | | | | | | |
(1)NEO contributions include employee elective deferrals of base salary, annual bonus or restricted stock units (in accordance with the 2017 Omnibus Incentive Plan). Accordingly, all amounts in this column are included in the Summary Compensation Table on page 31 in one or more of the following columns for fiscal 2023: “Salary,” “Stock Awards” or “Non-Equity Incentive Plan Compensation.”
(2)These amounts for fiscal 2023 appear in the “All Other Compensation” column of the Summary Compensation Table on page 31 (see footnote 5 to that table).
(3)Represents aggregate earnings (loss) on investments of deferred compensation deemed invested in a mix of options similar to the 401(k) Plan, a company stock account (although the plan no longer permits investment of contributions into the company stock account other than the deferral of restricted stock units) and, for deferrals made prior to December 1, 2019, an interest bearing account. Interest on the interest bearing account was paid at rate of 4% in fiscal 2023.
(4)The aggregate balance of August 31, 2023 represents the balance in each NEO’s participant account.
(5)Mr. Vuchetich forfeited benefits under the Supplemental Executive Retirement Plan upon his separation of employment since he did not satisfy the minimum service period requirement for vesting of benefits under that plan.
EQUITY COMPENSATION PLAN INFORMATION
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | NEO Contributions in Fiscal 2017 (1) | | Actuant Contributions | | Aggregate Investment Earnings in Fiscal 2017 | | Aggregate Withdrawals and Distributions | | Aggregate Balance at August 31, 2017 (4) |
| Interest (2) | | Other (3) | |
| Randal W. Baker | | | | | | | | | | | | |
| Deferred Compensation | | $ | 42,500 |
| | $ | 23,925 |
| | $ | 2,311 |
| | $ | 337 |
| | $ | — |
| | $ | 90,450 |
|
| Supplemental Executive Retirement | | — |
| | 42,500 |
| | 963 |
| | — |
| | — |
| | 59,678 |
|
| Rick T. Dillon | | | | | | | | | | | | |
| Deferred Compensation | | $ | — |
| | $ | 10,656 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 10,656 |
|
| Supplemental Executive Retirement | | — |
| | 9,606 |
| | — |
| | — |
| | — |
| | 9,606 |
|
| Andrew G. Lampereur | | | | | | | | | | | | |
| Deferred Compensation | | $ | 35,218 |
| | $ | — |
| | $ | 412,231 |
| | $ | 1,871 |
| | $ | — |
| | $ | 5,660,757 |
|
| Supplemental Executive Retirement | | — |
| | — |
| | 21,630 |
| | — |
| | — |
| | 312,950 |
|
| Stephen J. Rennie | | | | | | | | | | | | |
| Deferred Compensation | | $ | — |
| | $ | 4,821 |
| | $ | 8,996 |
| | $ | 675 |
| | $ | — |
| | $ | 197,504 |
|
| Supplemental Executive Retirement | | — |
| | 21,286 |
| | 5,022 |
| | — |
| | — |
| | 103,054 |
|
| Roger A. Roundhouse | |
| |
| |
| |
| |
| |
|
| Deferred Compensation | | $ | — |
| | $ | 4,494 |
| | $ | — |
| | $ | 387 |
| | $ | — |
| | $ | 14,700 |
|
| Supplemental Executive Retirement | | — |
| | 16,592 |
| | 2,381 |
| | — |
| | — |
| | 57,149 |
|
| Eugene E. Skogg | | | | | | | | | | | | |
| Deferred Compensation | | $ | 121,409 |
| | $ | 3,642 |
| | $ | 11,446 |
| | $ | 267 |
| | $ | — |
| | $ | 253,232 |
|
| Supplemental Executive Retirement | | — |
| | 24,367 |
| | 1,294 |
| | — |
| | — |
| | 46,987 |
|
| |
(1)
| NEO contributions include employee elective deferrals of base salary, annual bonus or restricted stock units (in accordance with the 2009 Omnibus Incentive Plan). |
| |
(2)
| Interest was earned on deferred balances at various rates based on the year that eligible compensation was deferred, with a rate of 5.74% for calendar 2017 contributions. While the interest rates are above the SEC benchmark “market” rate (120% of the applicable federal long-term rate), the Company believes the rates are appropriate as they are reflective of the unsecured and unfunded nature of the Employee Deferred Compensation Plan and Supplemental Executive Retirement Plan. The rates are intended to approximate the rates the Company would pay for similar unsecured loans on the open market. Only the difference between the interest credited to the participant’s account and the SEC benchmark “market” rate of 3.09% is included under the caption “Non-qualified Deferred Compensation Earnings” in the Summary Compensation Table on page 30. |
| |
(3)
| Represents gain (loss) on Actuant stock and reinvested dividends included in each NEO’s deferred compensation account. |
| |
(4)
| The aggregate balance of August 31, 2017 represents the balance in each NEO’s participant account. |
Equity Compensation Plan Information
The following table summarizes information, as of August 31, 2017,2023, relating to our equity compensation plans pursuant to which grants of options, restricted sharesstock units or other rights to acquire shares may be granted from time to time.
| | | | | | | | | | | | | | | | | | | | |
| Plan Category | | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) | | Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights(2) | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in First Column) (3) |
Equity compensation plans approved by security holders (1) | | 1,668,943 | | | $ | 24.12 | | | 3,505,902 | |
| Equity compensation plans not approved by security holders | | — | | | — | | | — | |
| Total | | 1,668,943 | | | $ | 24.12 | | | 3,505,902 | |
(1)The number of securities to be issued upon exercise of outstanding options, warrants and rights comprises shares issuable with respect to 598,275 stock options at a weighted average exercise price of $27.03, 31,132 stock appreciation rights at a weighted average exercise price of $30.07 (the number of actual shares issued will
|
| | | | | | | | | | |
| Plan Category | | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) | | Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in First Column) (2) |
| Equity compensation plans approved by security holders (1) | | 4,482,078 |
| | $ | 24.47 |
| | 4,830,399 |
|
| Equity compensation plans not approved by security holders | | — |
| | — |
| | — |
|
| | | 4,482,078 |
| | $ | 24.47 |
| | 4,830,399 |
|
| |
(1)
| The number of securities to be issued upon exercise of outstanding options, warrants and rights includes 2,925,040 stock options at a weighted average exercise price of $24.24, 266,590 stock appreciation rights at a weighted average exercise price of $26.97 (the number of actual shares issued will vary based on the stock price on the date of exercise), 1,174,808 restricted stock units and 115,640 Performance Shares (at target). |
| |
(2)
| The number of securities remaining available for future issuance under equity compensation plans include 4,524,027 shares under the 2017 Omnibus Plan, 59,876 shares under the Actuant Corporation Deferred Compensation Plan and 246,496 shares under the Actuant Corporation 2010 Employee Stock Purchase Plan. |
vary based on the stock price on the date of exercise), 661,409 restricted stock units and378,127 Performance Shares (at target), granted under the 2017 Omnibus Incentive Plan. There were no stock options or stock appreciation rights issued under the 2017 Omnibus Incentive Plan that were outstanding at August 31, 2023.
(2)The weighted average exercise price does not take into account awards of Performance Shares or restricted stock units. (3)The number of securities remaining available for future issuance under equity compensation plans include 3,365,219 shares under the 2017 Omnibus Incentive Plan, 48,506 shares under the Company’s Deferred Compensation Plan and 140,708 shares under the Company’s 2010 Employee Stock Purchase Plan.
SENIOR OFFICER SEVERANCE PLAN AND EXECUTIVE AGREEMENTS
Senior Officer Severance Plan
On July 30, 2019, the Board of Directors approved the Company’s Senior Officer Severance Plan to provide increased certainty for the covered executive officers and the Company in the event of a severance. The Senior Officer Severance Plan is expected to assist the Company with the retention and recruitment of key executives, provide the Company with important protections, and reduce costs in the event of a dispute. The Senior Officer Severance Plan applies to the Company’s Chief Executive Officer and any Executive Vice President of the Company (the “Senior Officers”). In connection with the appointment of Mr. Sternlieb as President and Chief Executive Officer, the Company entered into a letter agreement with him to establish the terms of his initial compensation, which agreement included enhanced benefits under the Senior Officer Severance Plan.
The Senior Officer Severance Plan, as modified for the separate agreement with Mr. Sternlieb, provides that, in the event the employment of a Senior Officer is terminated by the Company without “Cause” or by a Senior Officer with “Good Reason” (as each term is defined in the Senior Officer Severance Plan):
•the Senior Officer would be entitled to receive a lump-sum payment equal to the sum of (i) one year’s (one and one-half year’s for Mr. Sternlieb) base salary at the Senior Officer’s regular salary rate, (ii) the annual bonus (one and one-half times the annual bonus for Mr. Sternlieb) that would have been payable to the Senior Officer under the Company’s annual bonus plan for the fiscal year in which such termination of employment occurs based on achievement of financial and other goals at “target” levels, and (iii) the portion of the monthly premium that the Company would normally pay for 12 months (18 months for Mr. Sternlieb) of medical, dental and vision coverage at the Senior Officer’s same level for such benefits immediately prior to the termination of employment (including dependent coverage, if applicable);
•outstanding unvested stock options granted by the Company to the Senior Officer would become vested upon the termination of employment and each outstanding unexercised stock option, including previously vested stock options, would remain exercisable until the earlier of (i) the date such stock option would have expired by its original terms (disregarding any provision for early expiration of the stock option upon termination of employment) or (ii) 10 years after the date such stock option was granted;
•outstanding restricted stock units granted by the Company to the Senior Officer would become vested upon termination of employment;
•with respect to any outstanding Performance Shares awarded by the Company to the Senior Officer, the requirement for the Senior Officer to remain employed during the relevant period would be waived, and the Senior Officer would be entitled to receive, following the completion of the relevant performance period, a pro rata pay out (based on the portion of the performance period during which the Senior Officer was employed) to the extent Performance Shares are earned based on the level of achievement of performance goals;
•the Senior Officer would be entitled to receive benefits under the retirement plans of the Company in which the Senior Officer participates based on the terms of such plans; and
•the Senior Officer would be entitled to receive outplacement services in a form, manner and with a scope of benefits as determined by the Talent Development and Compensation Committee of the Company’s Board of Directors, or any successor administrator appointed under the Senior Officer Severance Plan.
The Senior Officer Severance Plan provides for the reduction of the foregoing payments and benefits in connection with the application of Internal Revenue Code Section 280G if such a reduction would enable the Senior Officer to benefit financially on an after-tax basis. In addition, the Senior Officer Severance Plan provides that a Senior Officer whose employment is terminated in connection with a sale of a business unit is not entitled to the foregoing benefits if the Senior Officer receives an “Offer of Comparable Employment” (as defined in the Senior Officer Severance Plan) from the purchaser of the business unit. The Senior Officer Severance Plan also provides that if a Senior Officer becomes entitled, prior to satisfaction of conditions for payment under the Senior Officer Severance Plan, to receive severance benefits under an agreement with the Company upon termination of employment in connection with a change in control of the Company or sale of a business unit of the Company then no benefits are payable to the Senior Officer pursuant to the Senior Officer Severance Plan. Under the separate agreement with Mr. Sternlieb, he would be entitled to reimbursement by the Company of reasonable legal fees, up to $10,000, to enforce the Senior Officer Severance Plan.
The receipt by a Senior Officer of any payment or other benefit under the Senior Officer Severance Plan is conditioned upon (i) the delivery by the Senior Officer of a full and unconditional release of all claims against the Company in a form appended to the Senior Officer Severance Plan, (ii) the delivery by the Senior Officer of an agreement in a form appended to the Senior Officer Severance Plan including provisions relating to, among other matters, confidentiality, non-competition, non-solicitation of the Company’s customers, and non-hiring of the Company’s employees, and (iii) the Senior Officer’s agreement to provide reasonable assistance with respect to specified matters during the 12 months following termination of employment.
The Senior Officer Severance Plan provides that it may be amended or terminated at any time by the Company, provided that if there is a “Change in Control” of the Company (as defined in the Senior Officer Severance Plan), then during the two years following the Change in Control the Senior Officer Severance Plan may not be modified or rescinded to adversely affect the rights of the Senior Officers covered by the Senior Officer Severance Plan at the time of the Change in Control. In Control Paymentsaddition, if the Company becomes obligated to make any payments under the Senior Officer Severance Plan to a Senior Officer, the Senior Officer Severance Plan will remain in effect until such obligations have been satisfied. The Senior Officer Severance Plan also provides that all benefits under the
Senior Officer Severance Plan are subject to the Company’s clawback policy for executive officers or any other clawback policy of the Company that is subsequently in effect.
Because Mr. Limberger resigned as an officer and Other Separationemployee, he was not entitled to any benefits under the Senior Officer Severance Plan in connection with his departure. Ms. Bolens received benefits under the Senior Officer Severance Plan in connection with her departure. As a condition to her receipt of these benefits, Ms. Bolens provided a general release of claims in favor of the Company. For more details regarding the payments made to Ms. Bolens in connection with her departure, see "Executive Compensation-Summary Compensation Table" above.
No Employment Agreements
Other than the separation agreements noted below, theThe Company does not have employment contracts with any of its NEOs. Whether and to what extent the Company would provide severance benefits to any NEOs upon termination (other than due to a change in control) is discretionary.current executive officers.
Change in Control Arrangements
Change in control agreements are in place with each of the NEOs providing certain benefits upon termination of employment following both a change in control and a triggering event. Such agreements are intended to encourage executives to consider the best interests of shareholders by alleviating any concerns about their own personal financial well-being in the face of a potential change in control of the Company.
A triggering event is defined as:
a material reduction in the base salary or annual bonus opportunity, or material reduction in the total value of the fringe benefits received by the executive from the Company from prior levels received at the time of a change in control or during the six month period prior to the change in control;
a material reduction in authority and responsibility or a material decrease in the same for the supervisor to whom the executive reports, from the levels existing at the time of a change in control or the six month period prior to the change in control; or
a change in the location or headquarters where the executive is expected to work that is 40 or more miles from the previous location existing at the time of the change in control or during the six month period preceding the change in control.
A change in control is defined as:
the acquisition by a person or group of more than 50% of our common stock;
the acquisition by a person or group of assets of the Company that have a total gross fair market value equal to or more than 40% of the total gross market value of all of the assets of the Company immediately before such acquisition; or
the acquisition by a person or group of 30% or more of the total voting power of the stock of the Company; or
a change in the majority of our Board without the endorsement of the existing Board members.
Severance Payments
The terms of the change in control agreements do not vary by executive, and there are no excise tax gross-ups. The agreements state that if the Company terminates the executive’s employment within a period beginning six months prior to, and up to 24 months after a change of control (the “Triggering Event Period”), that executive is entitled to receive a lump sum payment equal to two annual base salary plus the greater of (i) two times the highest annual bonus earned by the executive during the three complete fiscal years immediately preceding the termination of employment or (ii) two times the amount of the target annual bonus for the executive during the three complete fiscal years immediately preceding the termination of employment. The lump sum payment would be payable within 20 days after termination of employment. The multiples to be paid in the event of a change-in-control were not determined in relation to the overall compensation guideline, but rather as part of an objective to attract and retain NEOs. In addition, the executive would continue to receive welfare benefits and perquisites available to that NEO at the time of termination for two years following termination of employment.
In addition, if the Company terminates the executive within the Triggering Event Period, any outstanding equity or long-term incentive awards held by the executive immediately prior to termination shall be fully vested (at target level for performance-based awards) and, with respect to any stock options, stock appreciation rights or similar awards the executive shall have the full duration of the original exercise period to exercise such award.
Certain of our equity compensation plans also contain change in control provisions. Our 2002 Stock Option Plan and 2009 Omnibus Plan allow the Committee to either provide for equivalent substitute options to be granted upon a change in control or the cash-out of options previously granted under such plan based on the fair market value of the stock at the time of such settlement, or, with respect to certain awards, the highest fair market value per share of stock during the 60-day period immediately preceding the change in control. Any stock option deferral program that remains in existence requires distribution of all deferred shares as soon as practicable after the date of a change in control.
Taking into account the terms of each NEO’s change in control agreement, the following table provides the estimated payments upon a change in control for the NEOs who are executive officers as of the date of this proxy statement (the “current NEOs”), as if their employment had been terminated by the Company or by the NEO on August 31, 2017 after a triggering event:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Base Salary | | Annual Bonus (1) | | Stock Options (2) | | Stock Awards (3) | | Benefits (4) | | Total |
| Randal W. Baker | | $ | 1,700,000 |
| | $ | 1,700,000 |
| | $ | — |
| | $ | 3,187,394 |
| | $ | 101,035 |
| | $ | 6,688,429 |
|
| Rick T. Dillon | | 900,000 |
| | 630,000 |
| | — |
| | 851,610 |
| | 73,266 |
| | 2,454,876 |
|
| Stephen J. Rennie | | 820,000 |
| | 492,000 |
| | 96,570 |
| | 881,505 |
| | 82,921 |
| | 2,372,996 |
|
| Roger A. Roundhouse | | 840,000 |
| | 504,000 |
| | 68,919 |
| | 1,587,036 |
| | 77,247 |
| | 3,077,202 |
|
| Eugene E. Skogg | | 722,000 |
| | 433,200 |
| | 51,747 |
| | 1,388,759 |
| | 77,956 |
| | 2,673,662 |
|
| |
(1)
| Actual payout will be based on the highest annual bonus target or highest annual paid bonus paid during the previous three years, multiplied by two. |
| |
(2)
| Represents the intrinsic value (difference between the closing trading price at August 31, 2017 and exercise price, multiplied by the number2023 in the absence of shares subject to the option) of unvested stock options with an exercise price less than $24.05 (i.e. options that are “in the money”). |
| |
(3)
| Represents market value of unvested restricted stock based on the August 31, 2017 closing price of the Company’s common stock ($24.05). |
| |
(4)
| Represents estimated costs to provide the welfare benefits and perquisites provided to the NEOs as described on page 27. |
Estimated payments owed to the NEOs upon a change in control absent termination or a triggering event (as definedof the Company. The amounts presented are determined with respect to the Senior Officer Severance Plan, except with respect to Mr. Sternlieb, who is eligible for additional benefits as described beginning on page 37) would be36. The severance benefits under the “Stock Options” and “Stock Awards” columnsSenior Officer Severance Plan (including as modified for Mr. Sternlieb) are reflected in the table above.following table.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Base Salary ($) | | Annual Bonus (1) ($) | | Stock Awards (2) ($) | | Benefits (3) ($) | | Total ($) |
| Paul E. Sternlieb | | $ | 2,354,625 | | | $ | 2,354,625 | | | $ | 11,892,101 | | | $ | — | | | $ | 16,601,351 | |
| Anthony P. Colucci | | 997,500 | | | 698,250 | | | 607,028 | | | 49,563 | | | 2,352,341 | |
| Benjamin J. Topercer | | 760,000 | | | 380,000 | | | 1,124,609 | | | 43,037 | | | 2,307,646 | |
| James P. Denis | | 640,000 | | | 288,000 | | | 340,967 | | | 43,037 | | | 1,312,004 | |
Separation Agreements
In November 2016, the Company entered into a Separation and Release agreement with Mr. Lampereur. In accordance with the Separation Agreement, Mr. Lampereur’s employment with the Company ended on January 31, 2017 and Mr. Lampereur received (i) $490,000 to be paid to him over a period(1)Represents market value of one year, (ii) $85,750 to be paid to him for transition services, (iii) continued coverage under the group medical plans of the Company at active employee rates for 12 months following the Separation Date, (iv) vesting of all outstanding stock options and unvested restricted stock units on the Separation Date. All Performance Shares held by Mr. Lampereur remain in force and he will receive shares based on the achievementAugust 31, 2023 closing price on the NYSE of the Company's Class A common stock ($26.20), but does not include any amount with respect to the vesting of unvested Performance Shares as the amount of shares to be issued under such awards is dependent on the level of performance objectives after eachachieved for the full three-year performance cycle.period and accordingly is not known.
Subsequent to August 31, 2017,(2)Represents the portion of the monthly premium that the Company entered intowould pay for 12 months of medical, dental and vision insurance coverage, but does not include an estimate of the cost of outplacement services because such amount is not presently determinable (under the Senior Officer Severance Plan, the form, manner and with a Separationscope of such services is subject to the discretion of the Talent Development and Release agreement with Mr. Skogg and Mr. Rennie, individually. The details of Mr. Skogg and Mr. Rennie’s agreements were filed on Form 8-K dated October 6, 2017.Compensation Committee).
Death or Disability Arrangements
Our NEOs are not generally entitled to any special benefits upon death or permanent disability. In the case of an NEOa current NEO's death, payment of base salary would cease. The executive’s estate would receive an earned, pro-rata 401(k) match and core contribution, non-qualified core contribution under the Deferred Compensation Plan benefit and annual bonus. All stock options, restricted stock units and performance sharesPerformance Shares would become 100% vested. The value of each NEO’s stock options and restricted stock and performance shares,units as of August 31, 2023, whose vesting would be accelerated upon death, is the same as disclosed in the preceding change in controlSeverance Payments table.
The value of Performance Shares, whose vesting would be accelerated upon death, is presently undeterminable as it depends on future performance results.
If the NEO becomes disabled during employment, base salary would continue at 100% for up to six months while the executive is disabled. If the executive remains disabled after six months and enrolled in the voluntary supplemental long term disability program, the insurance carrier would begin making disability payments to the executive, otherwiseexecutive. Otherwise, no further salary or disability payments would be due. Additionally, all current NEOs currently participate in a company-paid supplemental disability insurance program.
Benefits from that policy would be paid by the insurance carrier in addition to the voluntary group policy. The NEO would receive an earned, pro-rata 401(k) match and core contribution, non-qualified core contribution under the Deferred Compensation Plan benefit, and annual cash bonus payout after six months of disability. AllIn the event of termination of employment due to permanent disability, all unvested stock options, and restricted stock units and Performance Shares would become 100% vested.
CHANGE-IN-CONTROL PAYMENTS
Change-in-Control Arrangements
The Company has entered into change in control agreements with each of the current NEOs providing certain benefits upon termination of employment following both a “change in control” of the Company and a “triggering event.” Such change-in-control agreements are intended to encourage executives to consider the best interests of shareholders by alleviating any concerns about their own personal financial well-being in the face of a potential change in control of the Company.
A “change in control” is generally defined as:
•the acquisition by a person or group of more than 50% of the Company’s common stock;
•the acquisition by a person or group of assets of the Company that have a total gross fair market value equal to or more than 40% of the total gross market value of all of the assets of the Company immediately before such acquisition; or
•the acquisition by a person or group of 30% or more of the total voting power of the stock of the Company; or
•a change in the majority of the Board of Directors without the endorsement of the existing Board members.
A “triggering event” is generally defined as:
•a material reduction in the base salary or annual bonus opportunity, or material reduction in the total value of the fringe benefits received by the executive from the Company from prior levels received at the time of a change in control or during the six month period prior to the change in control;
•a material reduction in authority and responsibility or a material decrease in the same for the supervisor to whom the executive reports, from the levels existing at the time of a change in control or the six month period prior to the change in control;
•a change in the location or headquarters where the executive is expected to work that is 40 or more miles from the previous location existing at the time of the change in control or during the six month period preceding the change in control; or
•in the agreement with Mr. Sternlieb, a material breach of his change-in-control agreement by the Company.
The terms of the change in control agreements do not include any provisions for excise tax gross-ups. The agreements generally do not vary by executive, but Mr. Sternlieb’s agreement provides for certain enhanced benefits. The agreements state that if the Company terminates the executive’s employment within a period beginning six months prior to, and up to 24 months after a change of control (the “Triggering Event Period”), that executive is entitled to receive a lump sum payment equal to two times (2.99 times for Mr. Sternlieb) the executive’s annual base salary plus the greater of (i) two times (2.99 times for Mr. Sternlieb) the highest annual bonus earned by the executive during the three complete fiscal years immediately preceding the termination of employment or (ii) two times (2.99 times for Mr. Sternlieb) the highest amount of the target annual bonus for the executive during the three complete fiscal years immediately preceding the termination of employment. The lump sum payment would be payable within 20 days after termination of employment. The multiples to be paid in the event of a change in control were not determined in relation to the overall compensation guideline, but rather as part of an objective to attract and retain NEOs. In addition, the executive would continue to receive welfare benefits and perquisites available to that NEO at the time of termination for two years following termination of employment. Under his change-in-control agreement, Mr. Sternlieb would be entitled to reimbursement by the Company of reasonable legal fees, up to $10,000, to enforce his change-in-control agreement.
The agreements provide for the reduction of the foregoing payments and benefits in connection with the application of Internal Revenue Code Section 280G if such a reduction would enable the executive to benefit financially on an after-tax basis. The agreements also include obligations of the executive relating to, among other matters, confidentiality, non-competition, non-solicitation of the Company’s customers, and non-hiring of the Company’s employees.
In addition, if the Company terminates the executive within the Triggering Event Period, any outstanding equity or long-term incentive awards held by the executive immediately prior to termination shall be fully vested (at the target level of performance for performance-based awards) and, with respect to any stock options, stock appreciation rights or similar awards the executive shall have the full duration of the original exercise period to exercise such award.
Certain of our equity compensation plans and awards also contain change in control provisions. The award agreements for outstanding restricted stock, restricted stock units and Performance Shares provide for immediate vesting upon the occurrence of a change in control, with the amount earned under Performance Share awards being based on achievement of target performance levels.
Taking into account the terms of each current NEO’s change-in-control agreement in force on August 31, 2023, the following table provides the estimated payments upon a change in control for the NEOs as if their employment had been terminated by the Company or by the NEO on August 31, 2023 after a triggering event. We have assumed, solely for the purposes of this presentation, that there will be no reduction of these payments pursuant to the provision of the agreements providing for a reduction in connection with the application of Internal Revenue Code Section 280G if such a reduction would enable the executive to benefit financially on an after-tax basis.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Base Salary ($) | | Annual Bonus (1) ($) | | Stock Awards (2) ($) | | Benefits (3) ($) | | Total ($) |
| Paul E. Sternlieb | | 2,354,625 | | | 2,354,625 | | | 11,892,101 | | | — | | | 16,601,351 | |
| Anthony P. Colucci | | 997,500 | | | 698,250 | | | 607,028 | | | 49,563 | | | 2,352,341 | |
| Benjamin J. Topercer | | 760,000 | | | 380,000 | | | 1,124,609 | | | 43,037 | | | 2,307,646 | |
| James P. Denis | | 640,000 | | | 288,000 | | | 340,967 | | | 43,037 | | | 1,312,004 | |
(1)Actual payout will be based on the highest annual bonus target or highest annual paid bonus paid during the previous three years, multiplied by two.
(2)Represents market value of unvested restricted stock units and unvested Performance Shares (at the target level of performance) based on the August 31, 2023 closing price on the NYSE of the Company's Class A common stock ($26.20).
(3)Represents estimated costs to provide the welfare benefits and perquisites provided to the current NEOs as described on page 38.
Estimated payments owed to the current NEOs upon a change in control, absent termination or a triggering event (as defined on page 37) and assuming that the Talent Development and Compensation Committee determined to vest all unvested stock options in connection with the change in control, would be as set forth in the “Stock Options” and “Stock Awards” columns in the table above.
CEO PAY RATIO
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the ratio of the annual total compensation, calculated in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K (“Annual Total Compensation”) of our median-compensated employee and the annualized Annual Total Compensation of Mr. Sternlieb who served as our CEO throughout fiscal 2023. For our fiscal 2023:
•the Annual Total Compensation of our median-compensated employee was $50,057; and
•the Annual Total Compensation of Mr. Sternlieb, who served as our CEO throughout fiscal 2023, was $9,608,505.
Accordingly, the ratio of the CEO's Annual Total Compensation to the median-compensated employee’s Annual Total Compensation for fiscal 2023 was 192 to 1.
The pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described below.
Because the SEC rules for identifying the median-compensated employee and calculating the pay ratio based on that employee’s Annual Total Compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the amount of compensation of the median-compensated employee and the pay ratio reported by other companies may not be comparable to our estimates reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
In identifying the median-compensated employee for fiscal 2023,we used base salary as our consistently applied compensation measure to determine our median employee from our employee population, excluding our CEO, as of August 31, 2023. For hourly employees, the annual base salary was calculated using a reasonable estimate of hours worked and their hourly wage rate. We annualized base salaries for employees who were employed as of August 31, 2023 but were not employed for the full fiscal year. For our non-U.S. employees, we used the foreign exchange rates applicable at August 31, 2023 to convert their base salary into U.S. dollars.
PAY VERSUS PERFORMANCE
An SEC rule adopted in 2022 requires that we include in the proxy statement disclosure of the relationship between executive compensation and our financial performance over the past three fiscal years, with future annual meeting proxy statements expanding the period by an additional year until the period addressed by the disclosure is five years. As specified by the SEC rule, the following table presents for each of the past three fiscal years:
•the total compensation of each individual serving as principal executive officer (“PEO”) of the Company, as calculated in accordance with the presentation of Total compensation in the Summary Compensation Table, appearing on page 31, with separate columns for each individual who served as PEO during this period (Randal W. Baker, identified as First PEO in the table and elsewhere in this section of the proxy statement, served as Enerpac’s principal executive officer until October 8, 2021, and Mr. Sternlieb, identified as Second PEO in the table and elsewhere in this section of the proxy statement, has served as our principal executive officer since then);
•the amount of “Compensation Actually Paid” as determined in accordance with the SEC rule for each PEO, with footnotes describing and quantifying the adjustments from Total compensation as reported in accordance with the presentation of such amounts required for the Summary Compensation Table to derive Compensation Actually Paid;
•the average total compensation, as calculated in accordance with the presentation of Total compensation in the Summary Compensation Table, of the individuals, other than the PEO, listed as named executive officers in our proxy statement for the annual meeting held in the year following each such year (the “Non-PEO NEOs”), with a footnote to the table identifying the individuals comprising the Non-PEO NEOs in each year;
•the average amount of “Compensation Actually Paid” as determined in accordance with the SEC rule for the Non-PEO NEOs, with footnotes describing and quantifying the adjustments from Total compensation as reported in accordance with the presentation of such amounts required for the Summary Compensation Table to derive such average Compensation Actually Paid;
•Enerpac’s cumulative total shareholder return (“TSR”) for the period beginning on the last trading day of the year preceding the earliest year presented in the table and ending the last trading day of the year presented in the table (for example, for fiscal 2022, the period from August 31, 2020 through August 31, 2022), assuming the investment of $100 in Enerpac common stock on the first day of such period;
•the cumulative TSR for each such period of the peer group of companies identified in a footnote to the table calculated on the same basis as Enerpac’s TSR, but assuming an investment on the first day of such period of $100 in the common stock of such companies, allocated among such companies based on their respective market capitalization at August 31, 2020;
•the net income of Enerpac and its subsidiaries on a consolidated basis as presented in our consolidated statement of operations included in the accompanying annual report; and
•Adjusted EBITDA, a measure selected by us for presentation in this table as the most important financial performance measure linking Compensation Actually Paid to the NEOs for the most recent fiscal year to company performance.
The table presents Compensation Actually Paid in accordance with the requirements of the SEC rule. As identified in the footnotes to the table, the determination of Compensation Actually Paid includes adjustments to reflect, among other things, period-to-period changes in the value of unvested equity awards and the Performance Share Awards. Accordingly, such amounts do not reflect the value of compensation actually delivered to, or received by the PEOs or the Non-PEO NEOs, in the period reported in the table. The amount of actual compensation received by any executive officers depends on whether the executive officer satisfies the conditions for vesting of any such award, the extent to which performance conditions for performance-based awards are satisfied, and the value of our common stock on the date such awards vest (or, with respect to options, on the date that vested options are exercised).
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Value of Initial Fixed $100 Investment Based on: | | |
| Fiscal Year | Summary Compensation Table Total for First PEO(1) | Summary Compensation Table Total for Second PEO(2) | Compensation Actually Paid to First PEO(3) | Compensation Actually Paid to Second PEO(3) | Average Summary Compensation Table Total for Non-PEO NEOs(4) | Average Compensation Actually Paid to Non-PEO NEOs(3) | Total Shareholder Return(5) | Peer Group Total Shareholder Return(6) | Net Income(7) | Adjusted EBITDA(8) |
| ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | (h) | (i) |
| (a) | (b) | (b) | (c) | (c) | (d) | (e) | (f) | (g) | ($ in thousands) |
| 2023 | N/A | 9,608,505 | N/A | 11,699,671 | 1,171,205 | 1,405,400 | 126.71 | 126.40 | 46,561 | 136,343 |
| 2022 | 525,459 | 6,913,269 | (52,920) | 6,687,110 | 1,181,201 | 1,041,667 | 93.64 | 120.78 | 15,686 | 82,828 |
| 2021 | 4,481,386 | N/A | 5,931,625 | N/A | 1,141,200 | 1,376,759 | 121.22 | 147.08 | 38,077 | 74,692 |
(1) Randal W. Baker served as President and Chief Executive Officer during all of fiscal 2021 and in fiscal 2022 until October 8, 2021 and is identified as First PEO in the table. The negative amount of compensation actually paid reported for fiscal 2022 reflects a decline in the value of outstanding equity awards in that fiscal year and the forfeiture of certain awards in that year as a result of his departure.
(2) Paul E. Sternlieb has served as Chief Executive Officer since October 8, 2021 and is identified as Second PEO in the table.
(3) "Compensation actually paid" to our Named Executive Officers represents the “Total” compensation reported in the Summary Compensation Table for the applicable fiscal year (“Applicable FY”), as adjusted per SEC rules as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Adjustments | 2021 | 2022 | 2023 |
| First PEO | Average Non-PEO NEOs | First PEO | Second PEO | Average Non-PEO NEOs | Second PEO | Average Non-PEO NEOs |
| ($) | ($) | ($) | ($) | ($) | ($) | ($) |
| Deduction for Amounts Reported under the “Stock Awards” and “Option Awards” Columns in the Summary Compensation Table for Applicable FY | (3,308,568) | (578,624) | (216,740) | (5,057,747) | (562,899) | (6,999,985) | (307,397) |
| Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Remain Unvested as of Applicable FY End, determined as of Applicable FY End | 3,533,524 | 582,238 | — | 4,831,588 | 325,530 | 7,470,959 | 318,298 |
| Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Vested during Applicable FY, determined as of Vesting Date | — | — | 225,558 | — | 161,886 | — | 27,335 |
| Increase/deduction for Awards Granted during Prior Fiscal Year that were Outstanding and Unvested as of Applicable FY End, determined based on change in ASC 718 Fair Value from Prior Fiscal Year End to Applicable FY End | 597,724 | 152,210 | (1,333,315) | — | (105,339) | 1,462,863 | 81,560 |
| Increase/deduction for Awards Granted during Prior Fiscal Year that Vested During Applicable FY, determined based on change in ASC 718 Fair Value from Prior Fiscal Year End to Vesting Date | 633,949 | 85,373 | 1,127,315 | — | 111,757 | 154,773 | 130,820 |
| Deduction of ASC 718 Fair Value of Awards Granted during Prior Fiscal Year that were Forfeited during Applicable FY, determined as of Prior Fiscal Year End | — | (4,927) | (388,383) | — | (71,402) | — | (16,941) |
| Increase based on Dividends or Other Earnings Paid during Applicable FY prior to Vesting Date | 4,453 | 916 | 7,186 | — | 932 | 2,556 | 519 |
| Deduction for Change in the Actuarial Present Values reported under the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” Column of the Summary Compensation Table for Applicable | — | — | — | — | — | — | — |
| TOTAL ADJUSTMENTS | 1,450,239 | | 235,559 | | (578,379) | | (226,159) | | (139,533) | | 2,091,166 | | 234,195 | |
(4) This amount is the average of the total compensation, as calculated in accordance with the presentation of Total compensation in the Summary Compensation Table appearing on page 31, of the Non-NEO PEOs in each year. The following table lists the individuals who comprise the Non-PEO NEOs in each of the covered years:
| | | | | | | | | | | | | | | | | |
| Fiscal 2023 | | Fiscal 2022 | | Fiscal 2021 |
| Anthony P. Colucci | | Anthony P. Colucci | Barbara G. Bolens | | Rick T. Dillon |
| Benjamin J. Topercer | | Benjamin J. Topercer | Scott M. Vuchetich | | John Jeffrey Schmaling |
| James P. Denis | | Rick T. Dillon | Bryan R. Johnson | | Fabrizio Rasetti |
| Markus Limberger | | John Jeffrey Schmaling | Fabrizio Rasetti | | Barbara G. Bolens |
| Barbara G. Bolens | | | | | |
(5) Represents the company’s TSR for the period beginning on the last trading day of the year preceding the earliest year presented in the table and ending the last trading day of the covered year, which includes the reinvestment of dividends paid on our common stock during the relevant period.
(6) Represents the TSR for the period beginning on the last trading day of the year preceding the earliest year presented in the table and ending the last trading day of the covered year, which includes dividends paid during the relevant period, of the common stock of the companies included in the Russell 2000 Index.
(7) Represents net income of Enerpac and its subsidiaries on a consolidated basis, which includes the results of discontinued operations in each of the periods presented.
(8) The Company selected measure is adjusted EBITDA, which is a measure used in the annual cash incentive plan. Adjusted EBITDA is the Company’s earnings before interest, income tax, depreciation and amortization expenses, adjusted by adding selected expenses that the Talent Development and Compensation Committee believes do not reflect normal operating conditions and subtracting certain selected income items that the Talent Development and Compensation Committee believes do not reflect normal operating conditions. Adjusted EBITDA is calculated in a manner consistent with adjusted EBITDA as presented by the Company in its quarterly and annual earnings announcements, with additional adjustments to exclude annual incentive compensation expense and for certain items selected by the Talent Development and Compensation Committee that it believes do not reflect normal operating conditions.
Performance measures used to link performance to executive compensation
We have listed below the four performance measures that represent the most important metrics we used to link Compensation Actually Paid to our NEOs for 2023 to Company performance:
•Adjusted EBITDA
•Core Sales Growth
•Adjusted EBITDA Margin; and
•Free Cash Flow Conversion.
These measures are described beginning on page 24 of this proxy statement.
Graphical presentations of the relationship of executive compensation to certain performance measures
The following charts present the relationship for the periods presented in the foregoing table between the Compensation Actually Paid for each of the PEOs and the average Compensation Actually Paid for the Non-PEO NEOs and each of the Company’s TSR, the Company’s peer group TSR, net income and Adjusted EBITDA.
NON-EMPLOYEE DIRECTOR COMPENSATION
Director Compensation
DirectorsIn fiscal 2023, directors who are not employees of the Company arewere paid an annuala cash retainer, of $60,000 (as of January 1, 2017)paid in quarterly installments, for serving on the Board of Directors. The annual rate of the cash retainer was initially $60,000 and was increased to $70,000 commencing June 1, 2023, at which time the annual rate of the cash retainer for the chair of the Compensation and Talent Development Committee was increased from $10,000 to $12,000. Directors are also reimbursed for expenses incurred in connection with attendance at meetings. As of August 31, 20172023, directors are paid the following additional cash fees for serving on committees:
| | | | | | | | | | | | | | |
| Committee | | Member Fee | | Additional Chair Fee |
| Audit | | $ | 15,000 | | | $ | 15,000 | |
| Compensation and Talent Development | | 10,000 | | | 12,000 | |
| Governance and Sustainability | | 10,000 | | | 7,500 | |
|
| | | | | | | | |
| Committee | | Member Fee | | Chairperson Fee |
| Audit | | $ | 15,000 |
| | $ | 15,000 |
|
| Compensation | | 10,000 |
| | 10,000 |
|
| Nominating & Governance | | 10,000 |
| | 7,500 |
|
Additionally, the Chairman of the Board receives an annual cash fee of $112,500 for services (above and beyond the annual retainer). The directors are not paid “per meeting” fees associated with their services as Company directors. The Company and the Board believe management access to the Board, outside of regular meeting dates, should occur on an “as needed”as-needed basis, without concern for the fees associated with such access. Directors elected by the Board between annual meetings are paid a pro rata amount of the annual fee based on the period of their service.
Equity compensation for the Board in fiscal 20172023 was in the form of restricted stock (approximately 65% weighting) andunits. Non-employee directors annually receive restricted stock options (approximately 35% weighting). In fiscal 2017,units having a value upon grant of $120,000, with the Chair receiving an additional $100,000 of restricted stock units for the additional services required of the position.
For their service commencing with the annual meeting of shareholders held in January 2022, each then current non-employee director (except the Chairman of the Board) was granted 2,930 stock options and 2,412 restricted shares. The Chairman of the Board was granted 3,580 stock options and 2,955 restricted shares. These stock options and6,469 restricted stock vest after eleven months and options have a ten year life. To be market competitive and aligned to our peer companies, effective fiscal 2018, directors will receive their equity compensation inunits, except for the form of 100%Chair, who received 11,860 restricted stock units. For their service commencing with the annual meeting of shareholders held in February 2023, each then-current non-employee director was granted 4,347 restricted stock units, except for the Chair, who received 7,971 restricted stock units. In each case, these awards of restricted stock units vest 50 weeks after their grant dates.
In fiscal 2017, theThe non-employee directors who served on the Board during all or a portion of fiscal 2023 received a combination of cash payments and equity-based compensation as shown in the table below and were also reimbursed for actual out-of-pocket expenses incurred in attending meetings.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Annual Retainer ($) | | Committee Fees ($) | | Chair Fee ($) | | Stock Awards ($) (1) | | Total ($) | | Outstanding Stock Options at Fiscal Year End (#) | | Non-vested Restricted Stock at Fiscal Year End (#) |
| Alfredo Altavilla | | 67,500 | | | 25,000 | | | — | | | 120,000 | | | 212,500 | | | — | | | 4,347 | |
| Judy L. Altmaier | | 67,500 | | | 25,000 | | | — | | | 120,000 | | | 212,500 | | | — | | | 4,347 | |
| J. Palmer Clarkson | | 67,500 | | | 20,000 | | | — | | | 120,000 | | | 207,500 | | | — | | | 4,347 | |
| Danny L. Cunningham | | 67,500 | | | 25,000 | | | 15,000 | | | 120,000 | | | 227,500 | | | 2,930 | | | 4,347 | |
| E. James Ferland, Jr. | | 67,500 | | | 10,000 | | | 10,000 | | | 220,000 | | | 312,500 | | | 11,029 | | | 7,971 | |
| Colleen M. Healy | | 20,650 | | | 7,375 | | | — | | | 75,588 | | | 103,613 | | | — | | | 3,089 | |
| Richard D. Holder | | 67,500 | | | 25,000 | | | 11,500 | | | 120,000 | | | 224,500 | | | — | | | 4,347 | |
| Lynn C. Minella | | 67,500 | | | 20,000 | | | | | 120,000 | | | 207,500 | | | — | | | 4,347 | |
| Sidney S. Simmons | | 67,500 | | | 25,000 | | | — | | | 120,000 | | | 212,500 | | | — | | | 4,347 | |
|
| | | | | | | | | | | | | | | | | | | | | |
| Name | | Annual Retainer ($) | | Committee Fees ($) | | Stock Awards ($) (1) | | Option Awards ($) (1) | | Total ($) | | Outstanding Stock Options at Fiscal Year End (#) | | Non-vested Restricted Stock at Fiscal Year End (#) |
| Gurminder S. Bedi | | 60,000 |
| | 20,000 |
| | 65,000 |
| | 35,000 |
| | 180,000 |
| | 54,679 |
| | 2,412 |
|
| Danny L. Cunningham | | 60,000 |
| | 20,500 |
| | 65,000 |
| | 35,000 |
| | 180,500 |
| | 2,930 |
| | 2,412 |
|
| E. James Ferland, Jr. | | 60,000 |
| | 25,000 |
| | 65,000 |
| | 35,000 |
| | 185,000 |
| | 11,029 |
| | 2,412 |
|
Richard D. Holder(2) | | 15,118 |
| | 6,299 |
| | — |
| | — |
| | 21,417 |
| | — |
| | — |
|
| R. Alan Hunter, Jr. | | 60,000 |
| | 25,000 |
| | 65,000 |
| | 35,000 |
| | 185,000 |
| | 62,679 |
| | 2,412 |
|
| Robert A. Peterson | | 183,750 |
| | 17,500 |
| | 79,625 |
| | 42,875 |
| | 323,750 |
| | 63,329 |
| | 2,955 |
|
| Holly A. Van Deursen | | 60,000 |
| | 30,000 |
| | 65,000 |
| | 35,000 |
| | 190,000 |
| | 54,679 |
| | 2,412 |
|
| Dennis K. Williams | | 60,000 |
| | 25,000 |
| | 65,000 |
| | 35,000 |
| | 185,000 |
| | 62,679 |
| | 2,412 |
|
| |
(1)
| Amounts represent the aggregate grant date fair value. The amounts do not correspond to the actual value that may be realized by our non-employee directors, as that is dependent on the long-term appreciation in the Company’s common stock. Refer to our Annual report on Form 10-K for details regarding assumptions utilized to value share based awards. |
| |
(2)
| Mr. Holder was appointed as a Director effective May 2017. |
(1)Amounts represent the aggregate grant date fair value. The amounts do not correspond to the actual value that may be realized by non-employee directors, as that is dependent on the long-term appreciation in the Company’s common stock.
Similar to the NEOs, directors have stock ownership guidelines to drive long-term performance alignment with shareholders. Under the guidelines, each non-employee director is expected to own ActuantCompany common stock with a total value equal to five times their base cash annual retainer (or an aggregate $300,000). During fiscal 2017,As of August 31, 2023, all directors (except Mr. HolderMs. Minella, who joined the Board in 2017) exceededon January 25, 2022, and Ms. Healy, who joined the board on May 15, 2023, and who each has three years after joining the Board to satisfy the requirement) satisfied the ownership requirement.
Under the Outside Directors’ Deferred Compensation Plan, each non-employee directordirectors can defer all or a portion of their annual retainer, and committee fees and vested restricted stock units for future payment on a specified date or when they leave the Board. The number of shares, equal toCompensation deferred under the amount of compensation deferred, is contributed to a rabbi trust. The plan consists solely ofare represented by phantom stock units, which are settled in ActuantClass A common stock, generally following the director’s termination of service. AsA number of August 2017,shares, based on the amount of compensation deferred, is contributed by the Company to a rabbi trust. During fiscal 2023, Messrs. Cunningham, Ferland and Ferland were participatingSimmons and Ms. Minella participated in the Outside Directors’ Deferred Compensation Plan.
OTHER INFORMATION
SectionDELINQUENT SECTION 16(a) Beneficial Ownership Reporting ComplianceREPORTS
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, the Company’s directors, executive officers and persons who beneficially own 10% or more of the common stock are required to reportfile reports specifying their initial ownership of common stock and subsequent changes in that ownership to the SEC. These reports are required to be filed within specified time periods established by the SEC. Based solely on our review of reports filed with the SEC, and the NYSE. Specific due dates for those reportswe believe that no director, officer, or 10% shareholder failed to timely file any report required by Section 16(a) to have been establishedfiled since August 31, 2022, other than the late filings by the following officers and directors: (i) each of Mr. Cunningham, Ms. Minella and Mr. Simmons was late in filing two reports, and Mr. Ferland was late in filing one report, each reporting the Company is requiredacquisition of phantom stock units pursuant to disclosethe Company’s Outside Directors’ Deferred Compensation Plan in this Proxy Statement any failure to fileconnection with the deferral by those due dates during fiscal 2017. The Company believes that allsuch director of a quarterly cash retainer payment; (ii) each of Ms. Altmaier, Mr. Clarkson, Mr. Cunningham, Mr. Ferland, Mr. Holder, Ms. Minella, and Mr. Simmons was late in filing requirements were satisfiedone report with respect to fiscal 2017.the acquisition of phantom stock units pursuant to the Company’s Outside Directors’ Deferred Compensation Plan as dividend equivalents in connection with the payment of the Company’s annual dividend on October 18, 2023; (iii) Mr. Simmons was late in filing one report with respect to the acquisition of shares in connection with the settlement pursuant to the Company’s Outside Directors’ Deferred Compensation Plan of an equal number of phantom stock units at the scheduled deferred payment date; and (iv) Mr. Limberger was two days late in filing one report for the purchase of common stock on September 21, 2022.
Independent Public AccountantsINDEPENDENT PUBLIC ACCOUNTANTS
PricewaterhouseCoopersErnst & Young LLP, an independent registered public accounting firm, performed an audit of our consolidated financial statements for the fiscal yearyears ended August 31, 20172023 and 2022 and the effectiveness of our internal control over financial reporting as of August 31, 2017. The Audit Committee has selected PricewaterhouseCoopers LLP to serve as our independent registered public accounting firm for the current fiscal year,2023 and the committee is presenting this selection to shareholders for ratification. Representatives of PricewaterhouseCoopers will be present at the Annual Meeting to respond to shareholders’ questions.2022. Aggregate fees for professional services rendered for the Company by PricewaterhouseCoopersErnst & Young LLP for suchthe past two fiscal years were as follows:
| | | | | | | | | | | | | | |
| | Fiscal Year Ended August 31, 2023 | | Fiscal Year Ended August 31, 2022 |
| Audit Fees | | $ | 1,125,000 | | | $ | 1,165,700 | |
| Audit-Related Fees | | — | | | — | |
| Tax Compliance Fees | | 61,179 | | | 10,295 | |
| Tax Consulting Fees | | 185,340 | | | 321,927 | |
| All Other Fees | | — | | | 95,000 | |
| | $ | 1,371,519 | | | $ | 1,592,922 | |
|
| | | | | | | | |
| | | Fiscal Year Ended
August 31, 2017 | | Fiscal Year Ended
August 31, 2016 |
| Audit Fees | | $ | 2,315,700 |
| | $ | 1,999,700 |
|
| Audit-Related Fees | | — |
| | 27,300 |
|
| Tax Compliance Fees | | 320,900 |
| | 382,300 |
|
| Tax Consulting Fees | | 990,900 |
| | 1,977,200 |
|
| All Other Fees | | — |
| | — |
|
| | | $ | 3,627,500 |
| | $ | 4,386,500 |
|
Audit Fees were for professional services rendered for the audit of the Company’s annual financial statements and related audit of the Company’s internal control over financial reporting, the review of quarterly financial statements and the preparation of statutory and regulatory filings. Tax Compliance Fees include professional services related to annual tax compliance including foreign tax return preparation and transfer pricing studies, while Tax Consulting Fees include professional services related to tax planning, tax reform and tax advisory services. In addition to the fees above, the Company also reimbursed PricewaterhouseCoopers LLPErnst & Young for out of pocket expenses, which were less than $100,000 in fiscal 20172023 and 2016.
fiscal 2022.
The Audit Committee has considered the compatibility of the respective non-audit services provided by PricewaterhouseCoopersErnst & Young LLP to PricewaterhouseCoopers LLP’s continuedErnst & Young LLP's independence and has concluded that the independence of PricewaterhouseCoopersErnst & Young LLP iswas not compromised by the performance of such services.
The Audit Committee has adopted policies and procedures for the pre-approval of any services performed by the independent auditor to ensure that such services do not impair the auditor’s independence. All annual recurring audit fees require specific approval by the Audit Committee prior to the work commencing. AllIn addition, pursuant to the Audit Committee's policy, certain other proposed services for which involvethe independent auditor would charge $50,000 or more than $50,000 in fees require specific approval by the Audit Committee prior to the work commencing. TheUnder its policies, the Audit Committee has given general pre-approval for all legally allowablemay pre-approve non-audit services provided by category, defining the independent auditor that involvescope of services, with fees less than $50,000 onand delegate to management the condition that such engagement must be specificallyauthority to approve individual projects within the pre-approved bycategory, with management and management must provide quarterly reports of such activityreporting to the Audit Committee.Committee each quarter any approvals made by it under that delegated authority in the quarter.
Shareholder ProposalsSHAREHOLDER PROPOSALS
ShareholderShareholder proposals must be received by the Company no later than August 6, 201813, 2024 in order to be considered for inclusion in the Company’s annual meeting proxy statement next year. Shareholders who wish to submit a proposal not intended to be included in the Company’s annual meeting proxy statement but to be presented at next year’s annual meeting, or who propose to nominate a candidate for election as a director at that meeting, are required by the Company’s bylaws to provide notice of such proposal or nomination to the principal executive offices of the Company. This notice must be received by the Company no later than the close of business on September 19, 2018October 27, 2024 nor earlier than the close of business on August 20, 2018,September 27, 2024 for such proposal to be considered for a vote, or such candidate to be nominated for election as director, at next year’s annual meeting. TheAny such notice must contain the information required by the Company’s bylaws.
Householding of Annual Meeting Materials
HOUSEHOLDING OF ANNUAL MEETING MATERIALS
Some banks, brokers, and other nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This means that only one copyshareholders who share the same address may not receive separate copies of this proxy statementmaterials, unless we have received instructions to the contrary. If, at any time, you no longer wish to participate in householding and the Annual Report on Form 10-K for the fiscal year ended August 31, 2017 may have been sent to multiple shareholders in your household. If you would prefer to receive a separate set of the proxy materials, or if you are receiving multiple copies of athe proxy statement or Annual Report on Form 10-K either now or in the future,materials and wish to receive only one, please contactnotify your bank, broker or other nominee.
Upon writtennominee if your shares are held in an account through a bank, broker or oral requestother nominee record holder or us if you directly hold your shares. We will promptly deliver an additional copy of the proxy materials to theyou, without charge, if you write to our Executive Vice President and Chief Financial Officer, we will provide a separate copyEnerpac Tool Group Corp., N86W12500 Westbrook Crossing, Menomonee Falls, Wisconsin 53051 or call us at (262) 293-1500.
FORWARD-LOOKING STATEMENTS
Certain of the annual report and/above statements constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to inherent risks and uncertainties that may cause actual results or proxy statement.events to differ materially from those contemplated by such forward-looking statements. Factors that may cause actual results or events to differ materially from those contemplated by such forward-looking statements include, without limitation, general economic uncertainty, market conditions in the industrial, oil & gas, energy, power generation, infrastructure, commercial construction, truck and automotive industries, the impact of geopolitical activity, including the invasion of Ukraine by Russia and international sanctions imposed in response thereto, as well as the armed conflict involving Hamas and Israel, the ability of the Company to achieve its plans or objectives related to its growth strategy, market acceptance of existing and new products, market acceptance of price increases, successful integration of acquisitions, the impact of dispositions and restructurings, the ability of the Company to continue to achieve its objectives related to the ASCEND program, including any assumptions underlying its calculation of expected incremental operating profit or program investment, operating margin risk due to competitive pricing and operating efficiencies, supply chain risk, risks related to reliance on independent agents and distributors for the distribution and service of products, material, labor, or overhead cost increases, tax law changes, foreign currency risk, interest rate risk, commodity risk, tariffs, litigation matters, impairment of goodwill or other intangible assets, the Company’s ability to access capital markets and other factors that may be referred to or noted in the Company’s reports filed with the SEC from time to time, including those described under "Item 1A. Risk Factors" of the Annual Report.
Additional Matters
ADDITIONAL MATTERS
Other than the proposals and matters described herein, management is not aware of any other matters whichthat will be presented for action at the Meeting. If other matters do come before the Meeting, including any matter as to which the Company did not receive notice by October 21, 2017November 5, 2023 and any shareholder proposal omitted from this Proxy Statement pursuant to the applicable rules of the Securities and Exchange Commission, it is intended that proxies will be voted in accordance with the judgment of the person or persons exercising the authority conferred thereby.
By Order of the Board of Directors,
ROBERT A. PETERSONE. JAMES FERLAND
ChairmanChair of the Board
Menomonee Falls, Wisconsin
December 4, 201711, 2023
ItPlease know that your vote is very important that proxies be returnedto us, and we encourage you to vote promptly. Therefore, whetherWhether or not you expect to attend the Annual Meeting in person, shareholders are requested toby means of remote communication, please vote via the Internet or telephone, or by paper proxy card or vote instruction form, which you should complete, date, sign and return their proxies as soon as possible.by mail, so that your shares may be voted.
A copy (without exhibits)The Annual Report, which includes of the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 20172023 (without exhibits), as filed with the Securities and Exchange Commission,SEC, has been providedmade available with this Proxy Statement. Additional copies of the Form 10-KAnnual Report are available, free of charge, upon written or telephonic request directed to our Executive Vice President and Chief Financial Officer, Actuant Corporation,Enerpac Tool Group Corp., N86W12500 Westbrook Crossing, Menomonee Falls, Wisconsin 53051 or by telephonecalling us at (262) 293-1500.
EXHIBIT A: FIRST AMENDMENT TO THE ACTUANT CORPORATION 2017 OMNIBUS INCENTIVE PLAN
Important Notice Regarding the Actuant Corporation 2017 Omnibus Incentive Plan (the “Plan”) is made on this 17th dayAvailability of October, 2017, by Actuant Corporation (the “Company”).
WHEREAS, the Company currently maintains the Actuant Corporation Executive Officer Bonus Plan (the “Bonus Plan”) to provide cash-based incentive compensation to certain Executive Officers (as defined under the Plan) that is intended to qualify as “performance-based compensation” exempt from the $1 million deduction limitation under Section 162(m) of the Code (as defined under the Plan);
WHEREAS,the Company may not grant cash-based incentive compensation under the Bonus Plan as “performance-based compensation” under Section 162(m) of the Code (as defined under the Plan) after the Company’s upcoming annual meeting of stockholders in 2018 (the “2018 Annual Meeting”) due to restrictions under IRS regulations;
WHEREAS, Section 11 of the Plan sets forth provisions under which equity-based compensation may be, but is not required to be, granted under the Plan by the Committee (as defined under the Plan) in a manner that qualifies as “performance-based compensation” under Section 162(m) of the Code;
WHEREAS, the Board (as defined in the Plan) has determined that it is in the Company’s best interests to simplify and consolidate plan administration by having all grants of incentive compensation intended to qualify as “performance-based compensation” be made under the Plan following the 2018 Annual Meeting and making other related changes, in lieu of seeking re-approval of the material terms of the Bonus Plan; and
WHEREAS, the Board has authority to amend the Plan under Section 25 thereof and to condition any amendment upon shareholder approval.
NOW, THEREFORE, the Plan is hereby amended as follows effective as of the 2018 Annual Meeting, subject to obtaining approval of the Company shareholders atProxy Materials for the Annual Meeting in a manner required under the exemption for “performance-based compensation” under 162(m) of Code.Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
1. Section 2(c) shall be amended by deleting such section in its entirety and replacing it with the following:
“Award” means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock Units, Cash Incentive Awards, or other equity- or cash-based awards.
2. Section 6(d) shall be amended by adding the following sentence at the end thereof:
“The maximum amount that may be earned by an Executive Officer under a Cash Incentive Award granted in any calendar year shall not exceed $2,500,000.”
3. Section 11 shall be amended by deleting the second and third paragraphs of subsection (b) thereof and replacing them with the following:
“Performance Objectives may be absolute in their terms or measured against or in relationship to other companies or other external or internal measures. If so specified in the Award Agreement, Performance Objectives may include or exclude extraordinary charges, losses from discontinued operations, restatements and accounting changes and other special charges such as restructuring expenses, currency fluctuations, acquisitions and divestitures and related expenses (including without limitation expenses related to goodwill and other intangible assets), exchange rate effects, the effect of changes in tax laws, corporate tax rates, accounting principles or other applicable laws, foreign exchange gains and losses, stock offerings, stock repurchases, strategic loan loss provisions, a change in the Company's fiscal year, litigation or claim judgments or settlements, and other unusual, transition, one-time and/or non-recurring items of gain or loss that are separately identified and quantified in the Company’s audited financial statements. However, notwithstanding the preceding sentence, unless the Committee determines otherwise prior to the end of the applicable time for establishing Performance Objectives for an Award under Section 162(m), to the extent any such item affects any Performance Criteria applicable to an Award, such item shall be automatically excluded or included in determining the extent to which the Performance Objective has been achieved, whichever will produce the higher payout under an Award (subject to any exercise of “negative discretion” by the Committee with respect to Cash Incentive Awards).
Performance Objectives with respect to any Award may include any one or more of the following objectives or combination thereof (or an equivalent metric), as established by the Committee in its sole discretion: (i) achieving a target level of Company net sales; (ii) achieving a target level of earnings (including net earnings; gross earnings; earnings before certain deductions, such as interest, net financing costs, taxes, depreciation, or amortization; or earnings per share or diluted earnings per share); (iii) achieving a
target level of income (including net income or income before consideration of certain factors, such as overhead) or a target level of profit margin or profits (operational, net or gross profits for the Company, an Affiliate, or a business unit) ; (iv) achieving a target return on the Company’s (or an Affiliate’s) sales, revenues, capital, assets, or shareholders’ equity; (v) revenue growth (whether including or excluding the impact of foreign currency translation changes), (vi) maintaining or achieving a target level of appreciation in the price of the shares of Common Stock; (vii) achieving a target market share for the Company (or an Affiliate); (viii) achieving or maintaining a share price that meets or exceeds the performance of specified stock market indices or other benchmarks over a specified period; (ix) achieving a level of share price, earnings, or income performance that meets or exceeds performance in comparable areas of peer companies over a specified period; (x) achieving specified reductions in costs or targeted levels in costs; (xi) achieving specified improvements in collection of outstanding accounts or specified reductions in non-performing debts; (xii) achieving a level of cash flow or working capital; (xiii) introducing one or more products into one or more new markets; (xiv) acquiring a prescribed number of new customers in a line of business; (xv) achieving a prescribed level of productivity within a business unit; (xvi) completing specified projects within or below the applicable budget; (xvii) completing acquisitions of other businesses or integrating acquired businesses; (xviii) expanding into other markets; (xix) asset carrying charge, as defined in the Bonus Plan or otherwise; (xxi) free cash flow and (xxii) net assets employed, as defined in the Bonus Plan or otherwise. Any criteria used may be measured, as applicable, (A) in absolute terms, (B) in relative terms (including without limitation by the passage of time, comparison of the Company’s performance as to one or more of the objectives listed above against another listed objective (such as EBITDA as a percentage of sales) and/or against another company or companies), (C) on a per-share basis, (D) against the performance of the Company as a whole or a segment of the Company, (E) on a pre-tax or after-tax basis, and/or (F) on a GAAP or non-GAAP basis.
4. A new Section 12A is added immediately following existing Section 12 to read as follows:
“12A Cash Incentive Awards
(a) A “Cash Incentive Award” is a cash bonus opportunity awarded by the Committee pursuant to which an Executive Officer may become entitled to receive an amount of cash denominated in U.S. dollars or another currency based on satisfying one or more performance goals and vesting requirements as are specified in the Award Agreement or, if no Award Agreement is entered into with respect to the Cash Incentive Award, other documents evidencing the Award. A Cash Incentive Award may, but need not, be granted as a Performance-Based Award under Section 11 of the Plan.
(b) Cash Incentive Awards may be granted only to Executive Officers. The Committee shall select the performance goals to be achieved by the Participant, the completion of any specified period of continuous service and the length of the performance period. The amount payable shall be expressed in terms of an objective formula or standard which may be based upon the Participant’s base salary as of the date of the Award or a multiple or percentage thereof, a dollar amount, a percentage of the applicable criteria underlying the specified Performance Objective(s) (or a percentage thereof in excess of a threshold amount) or otherwise. The foregoing objective formula or standard also may be expressed in the form of a range, pursuant to which the actual amount of a Cash Incentive Award payable under the Plan may vary depending upon the extent to which the Performance Objectives for the Performance Period have been attained. The Committee may establish for any Participant a method or formula for determining the maximum amount payable. Notwithstanding anything to the contrary in this Section 12A, Cash Incentive Awards that are granted by the Committee with the intention of being a Performance-Based Award shall also be subject to the requirements of Section 6(d) and Section 11 of the Plan.
(c) At the time the Committee determines a Cash Incentive Award opportunity for a Participant, the Committee shall also establish the payment terms applicable to such Cash Incentive Award. Such terms shall include when such payments will be made; provided, however, that the timing of such payments shall in all instances either (a) satisfy the conditions of an exception from Section 409A of the Code (e.g., the short-term deferrals exception described in Treasury Regulation Section 1.409A-1(b)(4)), or (b) comply with Section 409A of the Code, and provided further, that in the absence of such terms regarding the timing of payments, such payments shall occur no later than the later of (i) the 15th day of the third month of the calendar year following the calendar year in which the Participant’s right to payment ceased being subject to a substantial risk of forfeiture, and (ii) the 15th day of the third month of the Company’s fiscal year following the Company’s fiscal year in which the Participant’s right to payment ceased being subject to a substantial risk of forfeiture. A Participant may elect to defer the payment of a Cash Incentive Award as may be permitted from time to time under the terms of a nonqualified deferred compensation plan established or maintained by the Company.”
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| | | | Shareowner Services | | | | | |
| | P.O. Box 64945 | | | | |
| | | | St. Paul, MN 55164-0945 | | | | | |
| | Address Change? Mark box, sign, and indicate changes below: ¨
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| | | | | | | | |
| | | | TO VOTE BY INTERNET OR | | |
| | | | TELEPHONE, SEE REVERSE SIDE |
| | | | OF THIS PROXY CARD. | | |
YOUR VOTE IS IMPORTANT!
Please sign and date this proxy card and return it promptly in the enclosed postage-paid envelope to
Wells Fargo Shareowner Services, P.O. Box 64873, St. Paul, MN 55164-9397,
so your shares are represented at Actuant Corporation’s 2018 Annual Meeting.
òPlease fold here – Do not separateò
If no specification is made, this proxy will be voted for all names
listed in Proposal 1 and for Proposals 2, 3 and 4.
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| | | | | | | | | | | | |
| 1. Election of
directors:
| | 01 Randal W. Baker | | 06 R. Alan Hunter | | ¨ Vote FOR
| | ¨ Vote WITHHELD
| |
| | 02 Gurminder S. Bedi | | 07 Robert A. Peterson | | all nominees (except as marked) | | from all nominees | |
| | 03 Danny L. Cunningham | | 08 Holly A. Van Deursen | | | | |
| | | 04 E. James Ferland | | 09 Dennis K. Williams | | | | | | | |
| | | 05 Richard D. Holder | | | | | | | | | |
| | | | | | | | | | | | |
| (Instructions: To withhold authority to vote for any indicated nominee,
write the number(s) of the nominee(s) in the box provided to the right.)
| | | | | | |
| | | | |
| 2. Ratification of PricewaterhouseCoopers LLP as the Company's independent auditor. | ¨ For
| | ¨ Against
| | ¨ Abstain
| |
| | | | |
| 3. Vote upon an amendment to the Actuant Corporation 2017 Omnibus Incentive Plan. | ¨ For
| | ¨ Against
| | ¨ Abstain
| |
| |
| 4. Advisory vote to approve the compensation of our named executive officers. | ¨ For
| | ¨ Against
| | ¨ Abstain
| |
| |
| The Board of Directors recommends you vote 1 year on the following proposal. If no specification is made, this proxy will be voted for 1 year. | |
| | |
| 5. Advisory vote on the frequency of future advisory votes to approve the | ¨ 1 Year
| ¨ 2 Years
| | ¨ 3 Years
| | ¨ Abstain
| |
| compensation of our named executive officers.
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| 6. In their discretion, upon such other business as may properly come before the Annual Meeting or any adjournment thereof; all as set out in | |
Notice and Proxy Statement relating to the Annual Meeting, receipt of which is hereby acknowledged.
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| THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER SPECIFIED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IMPORTANT – THIS PROXY MUST BE SIGNED AND DATED. | |
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| Date
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| | | | | V25940-Z86338-P00539 | | | | | | | | | | | | |
| | | | | | | | | | | | Signature(s) in Box | |
| | | | | | | | | | | | Please sign exactly as your name(s) appears on Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy. | |
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ACTUANT CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
Tuesday, January 23, 2018
8:00 a.m. Eastern Time
The Breakers
One South Country Road
Palm Beach, Florida
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| | proxy | | | | | | |
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| | | ENERPAC TOOL GROUP CORP. | | | |
| | | | | | | | |
| | | ANNUAL MEETING OF SHAREHOLDERS | | | |
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| | | This proxy is solicited on behalf ofby the Board of Directors for the Annual Meeting to be held on January 23, 2018.Randal W. Baker
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| | The undersigned hereby appoints Paul E. Sternlieb, Anthony P. Colucci and Rick T. Dillon,James Denis, and each of them, are hereby authorized as Proxies,proxies, each with full power of substitution, to represent and vote the Class A Common Stock of the undersigned at the Annual Meeting of Shareholders of ACTUANT CORPORATION,ENERPAC TOOL GROUP CORP., a Wisconsin corporation, to be held on January 23, 201825, 2024 at 8:00 a.m. EasternCentral Time, virtually at The Breakers, One South Country Road, Palm Beach, Florida,www.virtualshareholdermeeting.com/EPAC2024, or at any adjournments thereof, with like effect as if the undersigned were personally present and voting upon the matters indicated on the reverse side of this card. |
Vote by Internet, Telephone or Mail
24 Hours a Day, 7 Days a Week
Your phone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.
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: | NOTE TO PARTICIPANTS IN THE 401 (K) PLAN. | ( | | * | |
INTERNET/MOBILE | | PHONE | | MAIL | | | | |
www.proxypush.com/atu | As a participant in the 401(k) Plan, you have the right to direct Fidelity Management Trust Company, as Trustee for the Enerpac Tool Group Corp. 401(k) Plan, to vote all shares of common stock as of Enerpac Tool Group Corp. allocated as of November 20, 2023. If instructions are not received by the voting deadline on the reverse side, or if the voting instructions are invalid because this form is not properly signed and dated, the shares will be voted in accordance with the terms of the Plan document. | 1-866-883-3382 | | |
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Use the Internet | | | Continued and to vote your proxybe signed on reverse side | | Use a touch-tone telephone to | | Mark, sign and date your proxy |
until 11:59 p.m. (CT) on | | vote your proxy until 11:59 p.m. (CT) | | card and return it in the |
January 22, 2018 | | on January 22, 2018. | | postage-paid envelope provided. |
If you vote your proxy by Internet or by Telephone, you do NOT need to mail back your Proxy Card.
