Item 5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Executive Vice President
and Chief Financial Officer
. The Board of Directors (the “Board”) of Actuant Corporation (the “Company”)
appointed Rick Dillon, 45, as Executive Vice President and Chief Financial Officer, effective December 22, 2016 to succeed Andrew
G. Lampereur. Mr. Dillon will become an employee of the Company on December 5, 2016.
Mr. Dillon served as Executive Vice President
and Chief Financial Officer of Century Aluminum Co. since 2014. Prior to that time, Mr. Dillon served as Vice President-Finance
Global Surface Mining Group and Vice President-Controller and Chief Accounting Officer of Joy Global Inc. from 2009 to 2014. Prior
to Joy Global, Mr. Dillon served as Vice President-Business Planning and Analysis and Vice President-Controller and Chief Accounting
Officer at Newell Brands, and Vice President-Controller and Chief Accounting Officer at Briggs & Stratton Corporation.
The Company entered into an offer letter
(the “Offer Letter”), with Mr. Dillon. The material terms of the Offer Letter are summarized below:
Base Salary and Bonus
. Mr.
Dillon will receive an annual base salary of $450,000, subject to review annually, and will be eligible to participate in the Company’s
annual bonus plan for fiscal 2017 on the same basis as the other members of the senior executive team. For fiscal 2017, Mr.
Dillon’s target bonus will be 70% of his base salary ($315,000). Mr. Dillon will also receive a $300,000 cash signing bonus.
Long-term Incentive Compensation
.
On the first day of the open trading window in December 2016, Mr. Dillon will be granted non-qualified stock options valued at
$200,000 and restricted stock units valued at $600,000 (collectively, the “Equity Award”). The options will have an
exercise price equal to and the restricted stock units will be priced based on, the closing market price of the Company’s
stock on the grant date. The Equity Award will be subject to the terms and conditions of the Actuant Corporation 2009 Omnibus Incentive
Plan, as amended, and the specific award agreements. The restricted stock units will vest ratably over two years and the non-qualified
stock options will vest 50% on the three-year anniversary of the grant date and the remaining 50% on the five-year anniversary
of the grant date. In connection with the Company’s annual grant of equity awards, Mr. Dillon will be eligible for an equity
award in January 2017 with an aggregate value of $550,000, which will consist of 35% restricted stock units, 35% non-qualified
stock options and 30% performance shares.
Mr. Dillon will be entitled to participate
in the Company’s Investment/Matching Restricted Stock Grant Program for senior executives of the Company (the “Program”).
Under the Program, the Company will grant one share of restricted stock or one restricted stock unit (the “Matching Shares”)
for every two shares of Company common stock purchased by Mr. Dillon during the open trading windows that start in December 2016,
March 2017 and June 2017. The maximum value of the stock that may be purchased and subject to the Program is limited to $500,000
(maximum value of Matching Shares is $250,000). The Matching Shares will cliff vest on the third anniversary of the grant date
contingent on Mr. Dillon continuing to
hold the purchased shares and remaining
an employee with the Company; provided, however, that the Matching Shares will fully vest in the event of (a) a termination of
Mr. Dillon’s employment without cause; or (b) Mr. Dillon’s death or total and permanent disability.
The Company will also enter into a Change
in Control Agreement with Mr. Dillon. The Change in Control Agreement is the same form of Change in Control Agreement as
the Company’s other executive officers. The Change in Control Agreement provides that if the Company terminates Mr. Dillon’s
employment within a period beginning six months prior to, and ending 24 months after a change in control, Mr. Dillon is entitled
to receive a lump sum payment equal to two times his combined base salary and two times the amount of the highest annual bonus
or annual incentive compensation earned by Mr. Dillon under any annual cash bonus or annual incentive compensation plan of the
Company (for the avoidance of doubt, such amount shall not take into account any compensation earned under any long-term incentive
plan of the Company) during the three complete fiscal years of the Company immediately preceding the termination of employment.
In addition, Mr. Dillon would continue to receive benefits available to him at the time of termination for 24 months after termination
or until such earlier date as he becomes employed by another employer and becomes eligible for similar benefits.
There are no arrangements or understandings
between Mr. Dillon and any other persons pursuant to which he was selected as Executive Vice President and Chief Financial
Officer. There are also no family relationships between Mr. Dillon and any director or executive officer of the Company and
he has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation
S-K.
The foregoing description of the Offer
Letter and Change in Control Agreement is qualified in its entirety by reference to the full text of the Offer Letter and the Change
in Control Agreement, which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K. The Company
will also enter into its standard form of indemnification agreement with Mr. Dillon, which is filed as Exhibit 10.3 to this Current
Report on Form 8-K.
The Company entered into a Separation
Agreement and Release with Mr. Lampereur dated November 17, 2016 (the “Separation Agreement”). Mr. Lampereur
will remain Executive Vice President and Chief Financial Officer through December 21, 2016 and an employee through January 31,
2017 (the “Separation Date”). Mr. Lampereur will provide consulting and transition support through January 31, 2018.
In accordance with the Separation Agreement, Mr. Lampereur will receive (i) $490,000 (which is equal to his current annual
base salary) in cash to be paid over a period of 12 months in accordance with the Company’s payroll practices; (ii) a
transition completion bonus of $85,750; (iii) continued coverage under the group medical plans of the Company at active employee
rates through January 31, 2018; (iv) vesting of outstanding stock options; and (v) vesting of outstanding restricted stock units.
In addition, his outstanding stock options will be exercisable through their respective expiration dates. Mr. Lampereur will
also retain his performance share awards and will receive the shares, if any, earned under each outstanding performance share award
held by him based on actual results during the performance period. The Separation Agreement includes a release, as well as non-compete,
non-solicit, non-disparagement and confidentiality covenants. The preceding summary of the Separation Agreement does not
purport to be complete and is qualified in its entirety by reference to the full text of the Separation Agreement filed as Exhibit 10.4
to this Current Report on Form 8-K.
Board Retirements
. The Company also
announced today that Robert Arzbaecher and Thomas Fischer will not stand for re-election as directors and will retire from Actuant’s
Board of Directors when their current term ends at the next annual shareholders’ meeting on January 17, 2017. Danny Cunningham,
elected as a director in March 2016 and a recently retired partner and Chief Risk Officer of Deloitte and Touche, LLP, is expected
to be appointed chairman of the audit committee upon Mr. Fischer’s retirement, subject to his re-election as a director at
the upcoming annual shareholders meeting.