Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
2017 Omnibus Incentive Plan
On January 23, 2018, the shareholders of the Company approved the First Amendment to the Actuant Corporation 2017 Omnibus Incentive Plan (the “Amendment”) at the Company’s annual meeting of shareholders. The Amendment was previously approved by the Company’s Board of Directors on October 17, 2017, subject to shareholder approval. The summary of the Amendment set forth in this Item 5.02 is qualified in its entirety by reference to the text of the Amendment, a copy of which is filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
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 Actuant Corporation 2017 Omnibus Incentive Plan (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 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 $2,500,000 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.
Item 5.07 Submission of Matters to a Vote of Security Holders.
The Annual Meeting of the Shareholders (the “Annual Meeting”) of Actuant Corporation (the “Company”) was held January 23, 2018. At the annual meeting, shareholders elected the following directors, to serve until the Company’s next annual meeting and until their successors are elected and qualified:
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Shares Voted in Favor of
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Shares Withholding Authority
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Broker Non-Votes
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Randal W. Baker
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56,148,773
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415,113
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1,239,783
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Gurminder S. Bedi
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53,726,660
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2,837,226
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1,239,783
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Danny L. Cunningham
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55,955,552
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608,334
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1,239,783
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E. James Ferland
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55,956,923
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606,963
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1,239,783
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Richard D. Holder
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53,255,416
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3,308,470
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1,239,783
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R. Alan Hunter, Jr.
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53,386,878
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3,177,008
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1,239,783
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Robert A. Peterson
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53,593,499
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2,970,387
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1,239,783
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Holly A. Van Deursen
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53,743,411
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2,820,475
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1,239,783
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Dennis K. Williams
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53,419,435
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3,144,451
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1,239,783
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The following reflects voting for matters other than the election of directors brought for vote at the Annual Meeting:
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Shares Voted in Favor of
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Shares Voted Against
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Abstentions
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Broker Non-Votes
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Ratification of PricewaterhouseCoopers LLP as the Company’s independent auditor
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54,025,573
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3,704,745
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73,351
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Amendment to the Actuant Corporation 2017 Omnibus Incentive Plan
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50,661,071
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5,622,779
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280,036
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1,239,783
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Advisory vote on the compensation of the Company's Named Executive Officers
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55,336,035
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960,900
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266,951
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1,239,783
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1 Year
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2 Years
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3 Years
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Abstain
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Broker Non-Votes
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Vote on the frequency of future advisory votes to approve the compensation of the Company's Named Executive Officers
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48,911,897
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26,440
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7,511,602
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113,947
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1,239,783
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