Enerpac Tool (EPAC) DEF 14ADefinitive proxy

This Proxy Statement and accompanying proxy are furnished to the shareholders of Enerpac Tool Group Corp. (the “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 February 3, 2023 (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 the Meeting. The Company’s 2022 Annual Report to Shareholders (the “Annual Report”), which includes its Annual Report on Form 10-K for the year ended August 31, 2022 (without exhibits), accompanies this Proxy Statement and contains financial statements and certain other information concerning the Company.

This year the 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/EPAC2023 and enter the 16-digit control number listed on your proxy card or voting instruction form.

The Meeting will begin promptly at 8:00 a.m., Central Time, on February 3, 2023. 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 February 3, 2023.

The virtual annual meeting is supported across different online browsers and devices (desktops, laptops, tablets and cell phones). Please be certain you have the 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 February 3, 2023.

A majority of the votes entitled to be cast, present by means of remote communication or represented 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 submitted by banks, brokers or other holders of record holding shares for you as a beneficial owner that do not indicate a vote for some or all of the proposals because that holder does not have voting authority and has not received voting instructions from you (so-called “broker non-votes”) are also considered to be 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 rules 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 and 3 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 other holder of 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 Restated Articles of Incorporation, 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.

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.

In order to approve the ratification of Ernst & Young LLP as our independent auditor for the fiscal year ending August 31, 2023 (Proposal 2), the votes cast FOR must exceed the votes cast AGAINST the proposal. Abstentions will have no effect on this proposal. As noted above, banks, brokers or other entities holding your shares in “street name” are permitted to vote on this proposal, even if you do not provide any voting instructions.

In order to approve, on an advisory basis, the compensation 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 and broker non-votes will not count in determining the outcome of the vote on this proposal.

Any other business that may properly come before the Meeting, or any adjournment of the Meeting, will be approved if more votes are cast 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.

We are pleased to be distributing our proxy materials to shareholders via the Internet under the “notice and access” approach permitted by the rules of the Securities and Exchange Commission (the “SEC”). As a result, we are mailing to our shareholders a Notice of 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 reduces our costs of printing and distributing the proxy materials, while providing a convenient method of accessing the materials and voting. All shareholders will have the 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 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.

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 in addition to their regular compensation for such solicitation. Innisfree M&A Incorporated (“Innisfree”) may assist us in the solicitation 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.

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.

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 ratification of the appointment of Ernst & Young LLP as the Company’s independent auditor, and FOR the approval, on a non-binding basis, of the compensation of our named executive officers as described in this Proxy Statement and in accordance with the discretion of the persons appointed as proxies on any other matters properly brought before the Meeting.

It is the intention of the persons named in the accompanying form of proxy to vote such proxy for the election of the persons named 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.

The Board has nominated each of the following individuals for election for a one-year term expiring at the annual meeting of shareholders to be held in 2024.

Ernst & Young LLP, an independent registered public accounting firm, performed an audit of our consolidated financial statements for the fiscal year ended August 31, 2022 and the effectiveness of our internal control over financial reporting as of August 31, 2022. The Board of Directors recommends that the shareholders ratify the appointment of Ernst & Young LLP, to audit the consolidated financial statements of the Company and the effectiveness of the Company’s internal control over financial reporting for the fiscal year ending August 31, 2023. Shareholder ratification of the appointment of Ernst & Young LLP as the Company’s independent auditor is not required by the Company’s bylaws, but the Audit Committee is submitting the appointment of Ernst & 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 appointment, the Audit Committee will reconsider whether to retain Ernst & 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.

PricewaterhouseCoopers LLP served as the Company’s independent auditors for the fiscal years ended August 31, 2020 and 2019 and audited the consolidated financial statements of the Company for the fiscal years then ended. The Audit Committee conducted a process with multiple firms to determine the Company’s independent registered public accounting firm for the fiscal year ended August 31, 2021. As a result of this process, on November 16, 2020, the Audit Committee dismissed PricewaterhouseCoopers LLP as its independent registered public accounting firm for the fiscal year ended August 31, 2021. The audit reports of PricewaterhouseCoopers LLP on the Company's consolidated financial statements as of and for the fiscal year ended August 31, 2020 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles.

During the fiscal years ended August 31, 2020 and 2019 and in the subsequent interim period through November 16, 2020, there were no “disagreements” (as that term is described in Item 304(a)(1)(iv) of Regulation S-K (“Regulation S-K”) of the rules and regulations of the Securities and Exchange Commission and the related instructions) with PricewaterhouseCoopers LLP on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the satisfaction of PricewaterhouseCoopers LLP, would have caused PricewaterhouseCoopers LLP to make reference to the subject matter of such disagreements in their reports on the consolidated financial statements. During the fiscal year ended August 31, 2020 and in the subsequent interim period through November 16, 2020, there were no “reportable events” as that term is described in Item 304(a)(1)(v) of Regulation S-K.

The Audit Committee approved the appointment of Ernst & Young LLP as the Company’s new independent registered public accounting firm for the year ended August 31, 2021, and Ernst & Young LLP accepted appointment as the Company's independent registered public accounting firm for the year ended August 31, 2021 on November 18, 2020. During the fiscal years ended August 31, 2020 and 2019 and in the subsequent interim period through November 18, 2020, neither the Company nor anyone acting on its behalf consulted with Ernst & Young LLP regarding (i) the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, and neither a written report nor oral advice was provided to the Company that Ernst & Young LLP concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue, (ii) any matter that was the subject of a disagreement as defined in Item 304(a)(1)(iv) of Regulation S-K, or (iii) any reportable event as defined in Item 304(a)(1)(v) of Regulation S-K.

The Audit Committee is solely responsible for retaining or terminating the Company’s independent auditors. A representative of Ernst & Young LLP is expected to attend the Meeting and will have the opportunity to make a statement and respond to appropriate questions.

We are asking our shareholders to approve, on a non-binding advisory basis, the compensation of the executive officers named in the Summary Compensation Table included in this Proxy Statement (the “Named Executive Officers” or “NEOs”), as disclosed in the Executive Compensation section and the accompanying compensation tables and narrative discussion contained in this Proxy Statement. The Compensation Committee has overseen the development and implementation of our executive compensation programs, which are designed to drive long-term success and increase shareholder value. We utilize our executive compensation programs 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 several guiding principles, which we believe emphasize a pay-for-performance philosophy, reflect market practice and incentivize both short-term and long-term performance while discouraging excessive risk-taking:

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 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 RECOMMENDS VOTING “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THE EXECUTIVE COMPENSATION SECTION AND THE ACCOMPANYING COMPENSATION TABLES AND NARRATIVE DISCUSSION CONTAINED IN THIS PROXY STATEMENT.

The Board has three standing committees— the Audit Committee, the Governance and Sustainability Committee and the 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 ten meetings of the Board during the fiscal year ended August 31, 2022 (“fiscal 2022”). All members of the Board serving during fiscal 2022 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, including Ms. Minella who was elected as a director effective upon the adjournment of the 2022 annual meeting of shareholders, attended the 2022 annual meeting of shareholders.

Current Board committee membership and functions appear in the following table.

The non-executive directors of the Board regularly meet in the absence of management. Mr. Ferland, the Board Chair, presides at these sessions.

The Board has determined that each of Ms. Altmaier, Ms. Minella and Messrs. Altavilla, Clarkson, Cunningham, Ferland, Holder and Simmons (i) is independent within the definitions contained in the current New York Stock Exchange (“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, Mr. Holder and Ms. Altmaier qualifies as an “audit committee financial expert” as defined by the SEC.

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

The Board has adopted the Company’s Corporate Governance Guidelines (the “Guidelines”). The Guidelines provide 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 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 and the Company’s governance practices. Each committee has a written charter that is approved by the Board and annually evaluated by the Governance and Sustainability Committee.

The Board has adopted the Company’s Code of Conduct (“Code of Conduct”), which is called “The Tools for Doing What’s Right.” The Code of Conduct sets out the Company’s commitment to values-based business behavior and each 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 best interests of the Company and its 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 Governance and Sustainability Committee. In addition, the Audit Committee reviews the actions management is taking to maintain an ethical culture, including how management promotes an environment in which employees can raise ethical concerns without fear of retaliation, and, at its quarterly meetings, is informed of all compliance concerns submitted to management and the Company’s Ethics 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 adherence to the law. The Supplier Code of Conduct applies to suppliers, vendors, consultants, contractors and other 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.

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, 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.

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 of specific risk areas and mitigation processes.

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 latest 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 address these risks. Management processes to mitigate cybersecurity risks, and related reports to the Audit Committee, include simulations and plans for how to respond to cybersecurity incidents, should they occur, and comply with legal and regulatory requirements in such circumstances. All employees and others with access to company information systems receive comprehensive and periodic training on data and cybersecurity security practices, including regular training on how to spot fraudulent and phishing emails.

In establishing and reviewing our executive compensation program, the Compensation Committee considers, among other things, recommendations from shareholders and proxy advisory firms, whether the Company’s compensation programs reward executives for performance and whether the programs encourage unnecessary or excessive risk taking. The Compensation Committee annually performs a compensation risk assessment, including a review of material incentive and sales compensation plans. The Compensation Committee, with assistance from an independent compensation consultant, has overseen the implementation of several mitigating factors to help reduce the likelihood of undue risk taking related to compensation arrangements, including, but not limited to, the use of various measures (such as core sales, earnings, profit margin performance relative to revenue changes, total shareholder return (“TSR”), and cash flow) in a balanced mix of annual and long-term incentive plans, use of multiple types of incentives (cash, restricted stock units and performance shares), executive stock ownership guidelines that help align incentives with long-term company stock price appreciation, a clawback policy and anti-hedging policy. The Compensation Committee and Board believe that the Company’s compensation policies and practices do not encourage unnecessary or excessive risk taking and are not likely to promote other behavior that could result in a material adverse event for the Company.

The Governance and Sustainability Committee oversees the execution of the Company’s environmental sustainability strategy, which reflects the Company’s commitment to operating sustainably, innovating for the environment and assisting in the global transition to clean 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 Excellence challenge themselves to regularly deliver innovative solutions tailored to the exacting 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 senior leadership team and management at all levels are dedicated to creating a culture of inclusion and belonging and a workplace where all employees can thrive and do their best work, and senior management reports to the Board on the Company’s progress on a regular basis. Over the past year, we have significantly enhanced our focus on Diversity, Equity & Inclusion ("DE&I") objectives and have incorporated them into our core strategy. Our DE&I objectives include: (i) a focus on our culture, (ii) supporting education for disadvantaged 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. To date, as part of our strategy execution, we have engaged a third-party consulting firm to assist in executing our priorities, created DE&I councils in our four operating regions, and formed the Women of Enerpac, our first employee resource group. We have also implemented psychological safety training. Our DE&I initiatives have strong ties to the broader organization to ensure we are successful in achieving our goals.

We also believe diversity at the executive and Board level is key to the long-term success of the Company and the 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.

Our human capital management strategy and practices are generally overseen by our Board with assistance from its Compensation Committee and 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 and perform succession planning. We promote a longer-term view by inviting employees to work with leaders to create their own, unique individual development plans. Training programs in

We offer competitive compensation and benefits tailored to the 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 $3,500 annually for undergraduate programs and $5,000 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, with the amounts for undergraduate and graduate programs increasing to $5,250 and $7,500, respectively, beginning on January 1, 2023. 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, we have enhanced or added several benefits for our U.S. employees beginning in calendar 2023, including expanded paid parental leave, adoption assistance, medical coverage for select fertility treatments and expanded short-term disability benefits for hourly employees.

The 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 heart of our 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 deployment of programs and resources to mitigate those risks. We continually track and report our performance, including through reviews of incidents, near-misses, and quality issues, and management accountability and discussion of these improvement opportunities is a cornerstone of all business reviews.

The Governance and Sustainability Committee has the lead role in identifying director candidates, including the slate of directors presented for election at the Company’s annual meeting of shareholders. The 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 it 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.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 two 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 Governance and Sustainability Committee considers a range of factors and circumstances, including the following:

The Governance and Sustainability Committee also may consider such other factors in addition to the foregoing as it deems are in the best interests of the Company and its shareholders. There is no limit with regard to the number of boards on which our directors may serve, but the Board considers service on other boards as a factor in the director selection process and requires that all directors be able to devote sufficient time to fulfill their duties to the Company’s Board and committees.

The Governance and Sustainability Committee believes it is appropriate that at least one, and preferably several, members of the Board meet the criteria for an “audit committee financial expert,” as defined by SEC rules, and that a majority of the members of the Board meet the definition of “independent director” under NYSE listing standards. The Governance and Sustainability Committee also

The Governance and Sustainability Committee identifies nominees for election to the Board by, among other considerations, evaluating the skills of the current members of the Board, their performance and contributions to deliberations, their tenure on the Board and other relevant circumstances. Current members of the Board with skills and experience to support the Company’s needs and strategic priorities and who are willing to continue to serve as directors generally are nominated for re-election, balancing the value of continuity of service by existing members of the Board with that of obtaining a new perspective. From time to time, the Governance 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 the qualifications of candidates satisfying the Board’s criteria for new directors.

A summary of Board governance considerations and each director’s experience and skills follows:

In order to ensure appropriate representation on the Board, the Governance and Sustainability Committee has adopted a policy regarding resignation from the Board if directors retire from or otherwise cease to be employed at their principal occupation as of the time the director was last elected to the Board. Upon such a material change in a director’s position, a director shall offer his or her resignation as a director to the Governance and Sustainability Committee, which will accept or reject the resignation offer after considering the best interests of the Company and its shareholders.

Shareholders and other interested parties who want to communicate with the Board, the non-employee directors as a group, or any individual director can write to: Enerpac Tool Group Corp., Attention: Chair of the Board of Directors, N86W12500 Westbrook Crossing, Menomonee Falls, Wisconsin 53051. Your letter should indicate whether you are a shareholder. Depending on the subject matter, management will:

The Corporate Governance Guidelines and Code of Conduct document the Company’s policies regarding conflicts of interest and related-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 referred to the Governance and Sustainability Committee for final resolution.

The Company is not aware of being party to any transaction during fiscal 2022 in which an executive officer, director or 5% shareholder had a direct or indirect material interest.

During fiscal 2022, no member of the Compensation Committee served as an officer, former officer or employee of the Company or had a relationship disclosable under “Certain Relationships and Related Person Transactions.” Further, during fiscal 2022, no executive officer of the Company served as:

Copies of the charters of the Audit Committee, Governance and Sustainability Committee 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.

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 control 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; (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 Audit 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 planning or conducting 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, Ernst & 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.

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 Report on Form 10-K for the fiscal year ended August 31, 2022.

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 at least one member of the Audit Committee qualifies as an "audit committee financial expert" under Securities and Exchange Commission regulations, and the Audit Committee is comprised entirely of independent directors as required by the New York Stock Exchange listing standards and the applicable rules of the Securities and Exchange Commission.

October 24, 2022

This section of the proxy provides information regarding the compensation program for our Chief Executive Officer, our Chief Financial Officer, the three other most highly compensated executive officers serving at August 31, 2022, the individual who served as our Chief Executive Officer during fiscal 2022 who retired from that role on October 8, 2021, the individual who served as our Chief Financial Officer during fiscal 2022 who ceased serving in that role on April 30, 2022, the individual who served as Interim Principal Financial Officer from April 30, 2022 until May 30, 2022, and two additional individuals who were the Company’s other most highly compensated executive officers during fiscal 2022 (other than the individuals serving as the Chief Executive Officer or Chief Financial Officer), but were no longer serving as executive officers at August 31, 2022. These individuals are collectively referred to as the Named Executive Officers (“NEOs”). The NEOs for fiscal 2022 are as follows:

The Company 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, the 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:

In fiscal 2022, we replaced almost all of our executive management team. Of the five NEOs who are current officers of the Company, each of Mr. Sternlieb (our Chief Executive Officer), Mr. Colucci (our Chief Financial Officer), Mr. Topercer and Mr. Vuchetich joined the Company in fiscal 2022. This change in our executive management team was deliberate, as the Board of Directors sought new perspectives from management to transform the Company. These efforts led to the ASCEND transformation program (“ASCEND”) announced in March 2022. ASCEND’s key initiatives include accelerating organic growth go-to-market strategies, improving operational excellence and production efficiency by utilizing a Lean approach, and driving greater efficiency and productivity in selling, general and administrative expense by better leveraging resources to create a more efficient and agile organization. The Company expects that implementation of ASCEND will deliver an incremental $40-$50 million of annual operating profit, with the full run rate of operating profit expected to be reflected in the Company’s results as it exits fiscal 2024.

In connection with the recruitment of Mr. Sternlieb, Mr. Colucci, Mr. Topercer and Mr. Vuchetich, the Company offered compensation packages that included signing bonuses, initial equity awards and certain other benefits effective upon joining the Company, including a minimum annual bonus amount for Mr. Sternlieb for fiscal 2022 which was a critical component in his recruitment. These signing bonuses, initial equity awards and other benefits were necessary to attract these new executives to leave their prior employment in light of their forfeiture of compensation and awards from prior employers as a result of them joining the Company. As described in more detail in the following pages, these signing bonuses and initial equity awards were structured to provide a retention incentive, with the equity awards vesting over time subject to continued employment and some or all of the signing bonuses to be repaid by the NEOs who received them if the NEO voluntarily terminates employment prior to specified anniversaries of the commencement of employment other than for “Good Reason.”

More than half of Mr. Sternlieb’s total compensation, and more than a third of these other NEO’s average total compensation, in fiscal 2022 as reported in the Summary Compensation Table appearing on page 34 was attributable to these signing bonuses, initial equity awards and, for Mr. Sternlieb, the guaranteed minimum bonus. The Committee does not anticipate awarding any signing bonus or guarantying payment of minimum bonus amounts, or making equity awards at a level similar to these initial equity awards, to these executives in the future. Accordingly, the fiscal 2022 total compensation of Mr. Sternlieb and the other NEOs who joined the Company in fiscal 2022 as reported in the Summary Compensation Table is not indicative of the total compensation levels of these executives anticipated by the Committee going forward.

In connection with the changes in executive management, the Company entered into agreements with Mr. Baker and Mr. Dillon, the Company’s former Chief Executive Officer and Chief Financial Officer, respectively, in connection with their respective separation of employment to facilitate the transition of their respective responsibilities to the new executive team. The Committee and the Board of Directors approved these agreements as being necessary to effect an appropriate transition of these important responsibilities. In addition, because the departures of Mr. Schmaling and Mr. Rasetti were not for cause, each of these former officers were entitled to benefits under our Senior Officer Severance Plan (the “Senior Officer Severance Plan”). The Company maintains the Senior Officer Severance Plan as a necessary component of the executive officer compensation program to provide increased certainty for the covered executive officers and the Company in the event of a severance, which assists the Company with the retention and recruitment of key executives. The bulk of the total compensation for fiscal 2022 as reported in the Summary Compensation Table for Mr. Baker and Mr. Dillon is attributable to the benefits under their respective separation agreements and for Mr. Schmaling and Mr. Rasetti is attributable to the benefits under the Senior Officer Severance Plan. The agreements with Mr. Baker and Mr. Dillon and the Senior Officer Severance Plan are described in more detail in the following pages.

The Committee remains committed to linking executive compensation to performance metrics that align the interests of the NEOs 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, the Committee is focused on improving shareholder value.

In connection with the recruitment of Mr. Sternlieb, Mr. Colucci, Mr. Topercer and Mr. Vuchetich, each of whom joined the Company in fiscal 2022, the Company offered incentive packages that included signing bonuses, initial equity awards and certain other benefits effective upon joining the Company. As a result of these one-time awards offered to incentivize these NEOs to join the Company, the compensation of these individuals in fiscal 2022 reflects payments that are not be indicative of the anticipated future compensation payable to these NEOs.

The following table sets forth the one-time payments and awards made to Mr. Sternlieb, Mr. Colucci, Mr. Topercer and Mr. Vuchetich in connection with their recruitment to the Company in fiscal 2022:

In fiscal 2022, as an inducement to join and remain at the Company, the Committee granted restricted stock units to Mr. Sternlieb, Mr. Colucci, Mr.Topercer and Mr.Vuchetich having a grant date fair value of approximately $2.9 million, $120,000, $700,000 and $340,000, respectively. These awards of restricted stock units were made to attract these individuals, each of whom left existing positions with other firms, and in certain cases forfeited equity awards from those firms as a result of their departures, to join the Company by compensating these individuals for the awards they were surrendering by virtue of joining the Company. The vesting annual periods and other terms of these restricted stock units were the same as those of the restricted stock units granted as part of the annual equity incentive compensation award process, described below.

For the NEOs hired in fiscal 2022, these equity awards are reflected as compensation for fiscal 2022 in the Summary Compensation Table appearing on page 34 in the “Stock Awards” column.

As an additional inducement for NEOs hired during the fiscal year to leave their prior employment and accept roles with the Company, the Company paid them cash signing bonuses upon the commencement of their employment. The signing bonus arrangements were structured to remunerate these individuals for compensation that would have otherwise been payable by their

Each of Mr. Sternlieb, Mr. Topercer and Mr. Vuchetich is required to repay the full amount of his signing bonus if he voluntarily terminates his employment (other than for Good Reason) within the first year of his employment and 50% of his signing bonus if he voluntarily terminates his employment (other than for Good Reason) during the second year of his employment. If Mr. Colucci voluntarily terminates his employment (other than for Good Reason) within the following periods, he is required to repay the following portion of his signing bonus: during the first year of employment, 100%; during the second year of employment, 75%; during the third year of employment, 50%; and during the fourth year of employment, 25%.

For the NEOs hired in fiscal 2022, the full amounts of these signing bonuses are reflected as compensation for fiscal 2022 in the Summary Compensation Table appearing on page 34 in the “Bonus” column.

In connection with the recruitment of Mr. Sternlieb, the Company offered a compensation package that included a minimum annual bonus amount for him for fiscal 2022 equal to 75% of his annual base salary rate. This minimum annual bonus payment for fiscal 2022 was a critical component in recruiting Mr. Sternlieb in light of the performance-based compensation opportunities he was foregoing from his prior employer by joining the Company. Because this minimum bonus amount was not subject to achievement of performance measures, it is included as compensation for Mr. Sternlieb for fiscal 2022 in the Summary Compensation Table appearing on page 34 in the “Bonus” column.

The Committee does not anticipate providing for any similar minimum bonus arrangements to the NEOs going forward, with annual bonus amounts to be based on actual achievement of selected performance measures against targeted goals selected by the Committee.

In addition to the compensation described above, the NEOs hired in fiscal 2022 received relocation assistance and benefits in accordance with the Company’s Executive Homeowner Policy, including, in the case of Mr. Sternlieb, 365 days of temporary housing allowance from the date of his appointment and, in the case of Mr. Topercer, hotel lodging for up to one day per week.

For the NEOs hired in fiscal 2022, these additional signing benefits are reflected as compensation for fiscal 2022 in the Summary Compensation Table appearing on page 34 in the “All Other Compensation” column.

The Company’s executive compensation program is designed to align with our financial and strategic objectives, which are intended to create shareholder value. In fiscal 2022, this effort included the recruitment of a new executive management team, as the Board of Directors sought new perspectives from management to transform the Company, and the creation and initial implementation of ASCEND, which the Company expects will deliver meaningful operational improvements. The Company is well-positioned to deliver long-term shareholder value through a sustainable business model built on well-established brands, robust global distribution and broad end markets, a clear focus on our core tools and services business, 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 prudent deployment of our capital. We intend to create organic growth in excess of our markets through market share capture, product innovation, commercial effectiveness, and expansion in our industries and within our regions. In addition to organic growth, we also focus on adjusted EBITDA margin expansion through optimizing our manufacturing footprint, reducing our structural costs, and strategic sourcing. ASCEND is intended to further improve our adjusted EBITDA margin. 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 improving returns on invested capital through investing in internal capital projects, maintaining a strong balance sheet, making acquisitions aligned with our strategy and opportunistically acquiring our own shares.

At the annual meeting held in January 2022, shareholders overwhelmingly supported the advisory proposal to approve the compensation of the NEOs as disclosed in the proxy statement for that annual meeting, with the approval of over 99% of the Company's common stock that voted either “for” or “against” the proposal. The Company engages with shareholders to gather feedback on its compensation programs, which has led to changes that strengthen the link between executive pay and Company performance. We will continually assess and modify the Company’s executive compensation program to incorporate shareholder input, industry trends and competitive compensation practices.

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 aligns with the Company’s business objectives. In connection with this ongoing review, and based on feedback received from our shareholders, the Committee implements and

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. During each year, the Company’s CEO and management team also provide the Committee specific information related to NEO performance, compensation data and financial results.

The Committee establishes the 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 NEOs. CEO compensation is recommended by the Committee to the Board 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 a separate evaluation of the CEO’s performance in cooperation with the Chair of the Board.

The Committee has 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 in designing the executive compensation program for fiscal 2022. 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 participating in the design and implementation of certain elements of the executive compensation program. Mercer did not make specific recommendations on individual compensation amounts for the executive officers or independent directors, nor 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 Compensation 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.

The CEO, in consultation with the Human Resources function, develops recommendations for the compensation of the other executive officers for the Committee to consider. The CEO considers various factors when making recommendations, including external market data provided by the Committee's independent compensation consultant, the relative importance of the executive’s position within the organization, the executive’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, monitors existing compensation plans and programs applicable to NEOs and other executives, recommends financial and other targets to be achieved under those programs, prepares analyses of financial data, peer comparisons and other briefing materials for the Committee in making its decisions, and, ultimately, implements the Committee’s decisions.

The Committee reviews general industry survey data as well as compensation practices for certain publicly traded U.S. companies with which the Company considers it competes for executive talent (the “Peer Group”). In evaluating compensation decisions for fiscal 2022, it used executive compensation and incentive-plan-design data compiled by Mercer for the Peer Group and other relevant companies to assess the reasonableness and appropriateness of both pay levels and design of compensation programs. The companies in the Peer Group at the commencement of fiscal 2022 are as follows:

In July 2022, the Committee adjusted the Peer Group by removing Graco, Inc., Lydall, Inc. and Harsco Corporation and adding Circor International, Inc., Lindsay Corporation and The Gorman-Rupp Company. These adjustments were made in response to Lydall, Inc. ceasing to be a publicly traded company and changes in the sizes of the companies in the Peer Group relative to Enerpac in an effort to maintain a Peer Group in which the Company falls approximately at the midpoint of the Peer Group in terms of revenue.

We seek to pay the Company’s executives fairly and competitively and to link pay with performance. The main elements of executive compensation are base salary, a short-term incentive in the form of an annual bonus, and long-term equity incentive awards. A number of the Company’s executives, including Mr. Sternlieb, joined the Company in the most recent fiscal year, and those executives received a signing bonus as part of their initial compensation arrangements, with some or all of the signing bonus to be repaid if an executive terminates employment with the Company before a specified date, with the amount of the required repayment being based on the length of service prior to departure. These signing bonuses and other initial compensation benefits provided to new executive officers in connection with their recruitment to join the Company are discussed in greater detail above in “Compensation Decisions in Connection with Recruiting New Executive Officers.”

The Company emphasizes compensation opportunities that reward executives when they deliver targeted financial results. A significant portion of executive compensation is equity-based. In fiscal 2022, annual equity incentive awards granted to the NEOs who were employed in October 2021 and continued service through the end of the fiscal year were in the form of time-vesting restricted stock units (“restricted stock units”) and performance-based restricted stock units (“Performance Shares”). Certain of the NEOs who ceased employment prior to August 31, 2022 received restricted stock units and Performance Shares. NEOs who joined the Company after October 2021 received awards of restricted stock units. In addition to equity awards granted as part of the anticipated annual compensation process, the NEOs who joined the Company during fiscal 2022, including Mr. Sternlieb, received an additional award of restricted stock units as a recruiting incentive to join the Company in certain cases in recognition of awards they held from their prior employer that were forfeited upon their departure to accept employment with the Company.

Incentive compensation at target (annual bonus and equity awards) accounted for approximately 77% of Mr. Sternlieb’s Total Direct Compensation opportunity during fiscal 2022 and approximately 62% of the average Total Direct Compensation opportunity of the other NEOs who served as officers on August 31, 2022. 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 the total of signing bonuses and initial equity awards to NEOs who joined the Company in fiscal 2022.

As this chart illustrates, almost half of Mr. Sternlieb’s total compensation, and more than a third of the other NEO’s average total compensation, in fiscal 2022 was attributable to signing bonuses paid and initial equity awards granted to attract new executives to leave their prior employment in light of their forfeiture of compensation and awards from prior employers as a result of them joining the Company. The signing bonuses and initial equity awards were also structured to provide a retention incentive, with some or all of the signing bonuses to be repaid by the NEOs who received them if the NEO voluntarily terminates employment prior to specified anniversaries of the commencement of employment other than for “Good Reason” and the equity awards vesting over time subject to continued employment. As the Committee does not anticipate awarding any signing bonus or minimum bonus amounts, or making equity awards at a level similar to these initial equity awards, to these executives in the future, the fiscal 2022 total compensation of Mr. Sternlieb and the other NEOs who joined the Company in fiscal 2022 as reported in the Summary Compensation Table appearing on page 34 is not indicative of the total compensation levels of these executives anticipated by the Committee going forward.

In connection with their departure, the NEOs who ceased to serve as officers during fiscal 2022 received certain separation benefits. Messrs. Baker and Dillon received separation benefits under agreements entered into in connection with their respective departures, which agreements are described beginning on page 42, while Messrs. Schmaling and Rasetti received benefits under the Company’s Senior Officer Severance Plan, which is described beginning on page 41.

The NEOs also receive certain perquisites and participate in certain retirement, health and welfare plans.

Base salaries for continuing officers are reviewed annually and 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 an annual merit increase, promotion, change in role or market adjustment. Base salaries for newly appointed executive officers are determined based generally on the scope and complexity of the role, the executive’s prior employment history and experience level, and market competitiveness. Mr. Sternlieb’s initial annual salary rate was set at $750,000 in view of these considerations. Base salary adjustments are typically made in January of each year. In light of the recency of the determination of their initial base salary rates, no adjustments were made to the base salaries of the NEOs who had joined the Company in fiscal 2022. In January 2022, the base salary rates of the other NEOs who were then employed by the Company were increased in the range of 2% to 3%, reflecting annual merit adjustments.

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. The three performance metrics implemented within the fiscal 2022 annual bonus plan are Core Sales Growth, EBITDA Margin % and Free Cash Flow Conversion. The diagram below illustrates the fiscal 2022 bonus plan design for the NEOs.

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, except that, pursuant to the terms of his initial employment, the annual bonus amount to be paid to Mr. Sternlieb for fiscal 2022 may be no less than 75% of his annual base salary rate, which term was critical in recruiting him to join the Company

The fiscal 2022 annual bonus was designed to be earned based on performance against approved Core Sales Growth, 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 were 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 impact of acquisitions, divestitures and foreign currency rate changes. EBITDA is the Company’s earnings before interest, income tax, depreciation and amortization expenses, adjusted by adding selected expenses that the Committee believes do not reflect normal operating conditions and subtracting certain selected income items that the Committee believes do not reflect normal operating conditions. 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 for certain items selected by the Committee that it believes do not reflect normal operating conditions. Free Cash Flow Conversion is cash flow from operations for a period reduced by capital expenditures and increased 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 certain items selected by the Committee that it believes do not reflect normal operating conditions). These financial measures can be impacted by a variety of non-recurring or extraordinary items (e.g., business restructuring) and actual results may be adjusted for these items if not contemplated in the target setting process. Adjustments to 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 2022 annual bonus achievement is shown below:

The blended result of the achievement outcomes above is a bonus payout of 16.0% of target. The following table sets forth for each NEO the total amount of payouts of annual bonus for fiscal 2022:

* Pursuant to the terms of his initial employment, the annual bonus amount to be paid to Mr. Sternlieb for fiscal 2022 may be no less than 75% of his annual base salary rate, which term was critical in recruiting him to join the Company and applies only for fiscal 2022. The Committee does not anticipate providing guaranteed annual bonuses in future years.

Signing Bonus

A significant portion of each NEO’s Total Direct Compensation is in the form of equity compensation to create a strong alignment with shareholders. If the Company’s stock price declines, so does the value of the NEOs’ compensation, and vice versa. For the NEOs, the Committee approves an annual target award value for each NEO based on the independent compensation consultant’s benchmarking data and other applicable factors, such as internal equity and individual contributions.

In fiscal 2022, with the impact of the COVID-19 pandemic having lessened, the Committee returned to its historic practice of annually awarding both Performance Shares and restricted stock units allocated 50% as Performance Shares and 50% as restricted stock units, except for Mr. Sternlieb, whose annual equity awards were allocated as 55% Performance Shares and 45% restricted stock units. In the prior fiscal year, 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 fiscal 2022, the Committee selected both relative TSR and Return on Invested Capital (“ROIC”) as equally weighted performance measures for Performance Share awards. Including the ROIC metric ensured all strategic objectives were measured and incentivized. Return on Invested Capital is adjusted EBITDA, calculated in a manner consistent with adjusted EBITDA 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, 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.

In addition to the grants of restricted stock units as part of the Committee’s annual equity incentive compensation award process, in fiscal 2022 the Committee granted additional restricted stock units to Messrs. Sternlieb, Colucci, Topercer and Vuchetich having a grant date fair value of approximately $2.9 million, $120,000, $700,000 and $340,000, respectively. These additional awards of restricted stock units to these NEOs were made to attract these NEOs, each of whom left existing positions with other firms to join the Company and in certain cases forfeited equity awards with their prior employers as a consequence of accepting positions with the Company. The vesting annual periods and other terms of the additional restricted stock units awarded to these NEOs were the same as those of the restricted stock units granted as part of the annual equity incentive compensation award process.

The following describes each type of award:

Performance Share awards have a three-year performance period, with vesting based on the achievement of specified performance metrics. New three-year performance cycles start annually with grants generally near the beginning of each fiscal year. Awards made in fiscal 2022 provided for vesting based 50% on achievement of a Return on Invested Capital target and 50% on the Company’s relative TSR (as defined above). Return on Invested Capital is an important measure in determining how well the Company deploys capital. Relative TSR aligns the interests of shareholders and executives and is a measure of the Company’s

The threshold, target and maximum levels with respect to the Return on Invested Capital measure 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.

Performance Share awards granted in the fiscal year ended August 31, 2020 (“fiscal 2020”) for the three-year performance period ended August 31, 2022 provided for vesting based 50% on achievement of a Free Cash Flow Conversion target and 50% on the Company’s relative TSR. Free Cash Flow Conversion is calculated as described above. The targets and vesting scale for these Performance Shares, and the vesting level achieved, are shown in the following tables:

As a result of these performance levels, shares paid out upon the vesting of the Performance Shares were at 29.8% of the target award opportunity levels granted to the NEOs who received awards in fiscal 2020. The failure to satisfy the threshold level of performance for the three-year period ended August 31, 2022 with respect to the Free Cash Flow Conversion component of the Performance Shares was due primarily to the impact of the COVID-19 pandemic during the performance period.

The following table sets forth the number of shares paid out to each of the NEOs upon vesting of the Performance Shares awarded in fiscal 2020. Messrs. Sternlieb, Colucci, Topercer and Vuchetich, who each joined the Company in fiscal 2022, did not receive an award of Performance Shares for the three-year performance period. The Performance Shares awarded to Messrs. Baker, Dillon, Schmaling and Rasetti in fiscal 2020 became vested upon their respective separation of employment, with the shares issued to Messrs. Schmaling and Rasetti being reduced pro rata to reflect the term of their respective employment during the three-year period ended August 31, 2022.

Restricted stock units granted to officers in fiscal 2022 generally vest, 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 Company’s deferred compensation plan by providing written notice to the Company in accordance with the deferred compensation plan.

The following table summarizes the 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 2022 as part of the annual award program, to Ms. Bolens and Messrs. Dillon, Schmaling and Rasetti in connection with the CEO transition and to Mr. Johnson in connection with the CFO transition.

As noted above, in fiscal 2022 the Committee granted additional restricted stock units to Messrs. Sternlieb, Colucci, Topercer and Vuchetich having a grant date fair value of approximately $2.9 million, $120,000, $700,000 and $340,000, respectively. These additional awards of restricted stock units to these NEOs offered as part of their initial compensation packages in recruiting these NEOs, each of whom left existing positions with other firms, and in certain cases forfeited compensation awards, to join the Company.

The Committee has generally followed a practice of making annual grants of restricted stock unit awards to its NEOs on a single date each year, when all material information is publicly available. While awards to NEOs have historically been made as part of the 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 2022, the Committee granted the restricted stock unit awards at its regularly scheduled January 2022 meeting, with additional awards to the NEOs who joined the Company in fiscal 2022 in connection with the commencement of their respective employment, as well as the additional awards granted in October 2021 in connection with the CEO transition and the additional award to Mr. Johnson in February 2022 in connection with Mr. Dillon’s entry into his separation agreement as noted above. In addition, restricted stock units awarded in connection with the annual bonus plan for the fiscal 2021 were awarded in the first quarter of fiscal 2022, promptly following the determination of the bonus amount payable under such plan.

In connection with their separation of employment, each of Mr. Baker and Mr. Dillon entered into agreements with the Company to address their continued employment during a transition period, and payments, benefits and other matters in connection with their separation of employment. See “Executive Compensation—Senior Officer Severance Plan and Executive Agreements—Retirement Agreement with Mr. Baker” and “Executive Compensation—Senior Officer Severance Plan and Executive Agreements—Transition and Separation Agreement with Mr. Dillon,” on pages 42 and 43, for descriptions of these agreements. These agreements were entered into by the Company to facilitate the transition of the respective responsibilities of these NEOs. Pursuant to these agreements, each of these NEOs provided general releases of claims in favor of the Company.

In connection with their respective termination of employment, each of Mr. Schmaling and Mr. Rasetti received benefits under the Company’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 41. To be eligible to receive these benefits, each of these NEOs provided general releases of claims in favor of the Company.

Retirement and Other Benefits

The Company provides additional benefit programs to its employees, including NEOs and other executives, to attract and retain them as well as to provide a competitive total compensation program. The Company's benefits philosophy is to generally provide similar benefit programs for all non-bargaining unit employees, including NEOs. Modifications 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 U.S. employees:

Under the Company’s 401(k) Plan, most employees, including 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 to make annual, discretionary contributions of up to 3% of eligible pay that would be fully vested after three years of service, the Company has not made any such contributions for several years.

The SERP covers certain executive level employees (including the NEOs) and is designed to improve the competitive positioning of the 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% 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 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 2022 deferrals at 1.89%.

The Company also offers 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 or, subject to certain limitations, an earlier specified date. Investments include a mix of options similar 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. As a result of the unfunded nature of the plan, compensation deferrals are essentially unsecured loans from employees to the Company. The stock account return mirrors the performance of the Company’s stock price. Shares of common stock equal to the number of vested shares are transferred by the Company into a rabbi trust. When distributed, deferred amounts invested in the interest and investment accounts are paid out in cash while an appropriate number of shares of common stock (plus accrued dividends) is released from the rabbi trust to satisfy common stock fund distributions.

Contributions into the deferred compensation plan may reduce the ability to participate fully in the 401(k) Plan. The same matching formula is used for deferrals in the deferred compensation plan as the 401(k) Plan.

Other 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 the 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 2022 are included in the “All Other” Compensation” column of the Summary Compensation Table appearing on page 34, with details provided in footnote 5 to that table.

Ownership of Company stock by executives directly aligns their interests with shareholders. Accordingly, the Company maintains stock ownership guidelines for NEOs equal in value to a multiple of their base salary, with the levels for current NEOs set forth in the table below.

Stock ownership requirements include the value of unvested restricted stock units, consistent with Peer Group practices. Additionally, 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 are counted towards the ownership requirements. The compliance period to achieve the ownership requirement is five years from the date of appointment. The Committee reviews each NEO’s compliance with these guidelines on an annual basis, and all NEOs who are current executive officers either have met the target ownership level, or are within the five-year compliance period.

Sales of shares by executives are limited until the ownership requirements are met. Those who have not reached their specified targets are required to hold 50% of the net vested share value for each grant they receive so that they meet their requirements in a timely manner.

The Company has adopted a policy prohibiting directors, officers, and other employees from engaging in short-term or speculative transactions involving the 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.

The Company’s clawback policy for executive officers defines the economic consequences misconduct could have on their compensation. In the event of a financial restatement due to fraud or misconduct, as determined by the Board of Directors, responsible executives must reimburse the Company for their annual cash bonus, as well as equity-based awards or other performance-based compensation paid to the executive based on the financial results that were the subject of the restatement.

In addition to the change in the peer group of companies used for comparative purposes in evaluating the reasonableness and appropriateness of executive compensation, as described above, the Committee has made other changes to the design of the annual bonus program and long-term equity incentives for the fiscal year ending August 31, 2023 ("fiscal 2023"). The Committee believes these changes further align executive incentives with shareholder interests and with the objectives of ASCEND:

Additionally, as discussed above, a significant portion of the NEOs compensation in fiscal 2022 was a result of signing bonuses, initial equity awards and other incentives offered to our NEOs who joined the Company in fiscal 2022, including in the case of Mr. Sternlieb, a guaranteed annual bonus. These signing bonuses, initial equity awards and other benefits were necessary to attract these new executives to leave their prior employment in light of their forfeiture of compensation and awards from prior employers as a result of them joining the Company. The Committee does not anticipate awarding any signing bonuses or guarantying payment of minimum bonus amounts, or making equity awards at a level similar to these initial equity awards, to these executives in fiscal 2023.

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.

The following table sets forth the equity compensation awards in fiscal 2022, as well as the potential range of payouts for fiscal 2022 under the annual cash bonus plan.

The following table summarizes the outstanding equity incentive plan awards held by each NEO at August 31, 2022.