Enerpac Tool Group Corp 10-K for FY2026
Enerpac Tool Group Corp (EPAC)
10-K
2026-10-29
For: 2026-08-31
View Original
Added on
October 29, 2026
About this 10-K
Enerpac Tool Group Corp filed this 10-K on October 29, 2026, covering the fiscal year ended August 31, 2026 (FY2026).
Enerpac Tool Group Corp acquired SFE Group on October 28, 2026 for approximately $452 million in cash. Fiscal 2026 net sales rose 6% to $652 million, while operating profit fell to $129 million. AI summary
Headline figures
Fiscal year ended August 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $652.3M
- up 5.7% from $616.9M a year earlier
- Net income
- $89.7M
- down 3.2% from net income of $92.7M a year earlier
- Diluted EPS
- $1.72
- up 1.2% from $1.70 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) | ||||||||
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended August 31, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) | ||||||||
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition period from to
Commission File No. 1-11288
(Exact name of Registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
Mailing address: P. O. Box 3241, Milwaukee, Wisconsin 53201
(Address of principal executive offices)
(262 ) 293-1500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Ticker Symbol(s) | Name of each exchange on which registered | ||||||||||||
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☒ | Accelerated filer | ☐ | ||||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
| Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes ☐ No ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):
Yes ☐ No ☒
As of February 28, 2026, the last business day of the registrant's second fiscal quarter, the aggregate market value of the shares of Class A common stock (based upon the closing price on the New York Stock Exchange on February 28, 2026) held by non-affiliates of the Registrant was approximately $2.08 billion.
There were 51,305,685 shares of the Registrant’s Class A Common Stock outstanding as of October 26, 2026.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive Proxy Statement for the Annual Meeting of Shareholders to be held on February 4, 2027 are incorporated by reference into Part III hereof.
TABLE OF CONTENTS
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When used herein, the terms “we,” “us,” “our,” “Enerpac,” and the “Company” refer to Enerpac Tool Group Corp. and its subsidiaries.
References to fiscal years, such as “fiscal 2026,” are to the fiscal year ending on August 31 of the specified year.
Enerpac provides free-of-charge access to our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments thereto, through our investor website, ir.enerpactoolgroup.com, as soon as reasonably practical after such reports are electronically filed with the Securities and Exchange Commission (the “SEC”).
FORWARD LOOKING STATEMENTS AND CAUTIONARY FACTORS
This annual report on Form 10-K contains certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. The terms “may,” “should,” “could,” “will,” “anticipate,” “believe,” “estimate,” “expect,” “objective,” “plan,” “project” and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are subject to inherent risks and uncertainties that may cause actual results or events to differ materially from those contemplated by such forward-looking statements. In addition to the assumptions and other factors referred to specifically in connection with such statements, risks and uncertainties that may cause actual results or events to differ materially from those contemplated by such forward-looking statements include, without limitation, those described under “Item 1A. Risk Factors” of this annual report on Form 10-K and other matters, including those of political, economic, business, competitive and regulatory nature contained from time to time in our filings with the SEC. We disclaim any obligation, except to the extent required by applicable law, to publicly update or revise any forward-looking statements as a result of new information, future events or any other reason.
PART I
Item 1. Business
General
Enerpac Tool Group Corp. is a premier industrial tools, services, technology, and solutions provider serving a broad and diverse set of customers and end markets for mission-critical applications in more than 100 countries. Enerpac Tool Group's businesses are global leaders in providing high pressure hydraulic tools, controlled force products and solutions for precise positioning of heavy loads that help customers safely and reliably tackle some of the most challenging jobs around the world. The Company was founded in 1910 and is headquartered in Milwaukee, Wisconsin. The Company has one reportable segment, the Industrial Tools & Services (“IT&S”) Segment. The IT&S segment is primarily engaged in the design, manufacture and distribution of branded hydraulic and mechanical tools and in providing services and tool rental to the general industrial; refining and petrochemical; industrial maintenance, repair and operations (“MRO”); machining & manufacturing; power generation; infrastructure; mining; and other markets. Financial information related to the Company's reportable segment for the fiscal periods covered by this report is included in Note 16, “Business Segment, Geographic and Customer Information” in the notes to the consolidated financial statements. The Company has an Other operating segment, which does not meet the criteria to be considered a reportable segment. On October 28, 2026, we completed the acquisition of Specialized Fabrication Equipment Group LLC (“SFE Group”). We have included a separate description of SFE Group below, while the remaining discussion of our business in this Item 1, including the IT&S segment, is with respect to our business operated at the end of fiscal 2026 and prior to the completion of the acquisition of SFE Group.
Our businesses provide an array of products and services across multiple markets and geographies, which results in significant diversification. The IT&S segment and the Company are well-positioned to drive shareholder value through a sustainable business strategy built on well-established brands, broad global distribution and end markets, clear focus on the core tools and services business, and disciplined capital deployment.
Our Business Model
Our long-term goal is to create sustainable returns for our shareholders through above-market growth in our core business, expanding our margins, generating strong cash flow, and being disciplined in the deployment of our capital. We intend to grow through execution of our organic growth strategy, focused on key vertical markets that benefit from long-term macro trends, driving customer driven innovation, expansion of our digital ecosystem to acquire and engage customers, and an expansion in emerging markets such as Asia Pacific. In addition to organic growth, we also focus on margin expansion through operational efficiency techniques, including lean, continuous improvement and 80/20, to drive productivity and lower costs, as well as optimizing our selling, general and administrative expenses through consolidation and shared service implementation. We also apply these techniques and pricing actions to offset commodity increases and inflationary pricing. Finally, cash flow generation is critical to achieving our financial and long-term strategic objectives. We believe driving profitable growth and margin expansion will result in cash flow generation, which we seek to supplement through minimizing primary working capital. We intend to allocate the cash flow that results from the execution of our strategy in a disciplined way toward investment in our businesses, maintaining our strong balance sheet, disciplined M&A program and opportunistically returning capital to shareholders. We anticipate the compounding effect of reinvesting in our business will fuel further growth and profitable returns.
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Description of Business Segments
Industrial Tools & Services Reportable Segment
IT&S is a global supplier of branded hydraulic and mechanical tools and services to a broad array of end markets, including general industrial; refining and petrochemical; industrial MRO; machining & manufacturing; power generation; infrastructure; mining; and other markets.
Our primary products include branded tools, cylinders, pumps, hydraulic torque wrenches, highly engineered heavy lifting technology solutions and other tools. Examples of our products include high-force hydraulic and mechanical tools (cylinders, pumps, valves, bolt tensioners, specialty tools and other miscellaneous products), which are designed to allow users to apply controlled force and motion to increase productivity, reduce labor costs and make work safer and easier to perform. These tools operate at very high pressures of approximately 5,000 to 12,000 pounds per square inch. With our products used in a wide variety of end markets, they are often deployed in harsh operating conditions, such as machining, infrastructure maintenance and repair, refining, and petrochemical production, where safety is a key differentiator. As a result, we hold ourselves to a world-class safety standard to protect both our employees and those using our products and services.
On the services side of the segment, our highly trained technicians provide maintenance and manpower services to meet their customer-specific needs including bolting, machining, and joint integrity. We also provide rental services for certain of our products.
Our branded tools and services are primarily marketed through the ENERPAC®, HYDRATIGHT®, LARZEP®, SIMPLEX® and DTA the Smart Move® brand names.
The segment delivers products and services primarily through our world-class, global network of distributors, as well as direct sales to OEMs and select end users.
Other Operating Segment
Cortland Biomedical is a full-service biomedical textile product development company and represents the Other operating segment. Cortland Biomedical does not meet the quantitative or qualitative thresholds to be considered a reportable segment and, since the business is not closely related to the IT&S segment, results are not aggregated to be included in the results of the IT&S reportable segment. Certain information related to the Other operating segment is disclosed within Note 16, “Business Segment, Geographic and Customer Information” in the notes to the consolidated financial statements in order to comply with requirements under generally accepted accounting principles in the United States (“US GAAP”) to reconcile certain required disclosures to the Consolidated Financial Statements.
Acquisition of SFE Group
On October 28, 2026 , we acquired SFE Group in a merger transaction in which the aggregate amount paid by the Company with respect to the equity interests in SFE Group was approximately $452 million in cash, plus the issuance by the Company of approximately $20 million in restricted stock unit awards to key personnel of SFE Group, in lieu of cash payment of transaction bonuses owed by SFE Group to such personnel upon completion of the merger transaction. The cash portion of the acquisition consideration is subject to customary adjustments for the level of cash, net working capital, transaction related expenses (including with respect to the transaction bonuses), indebtedness and other similar items existing at SFE Group and its subsidiaries as of the closing date of the transaction.
SFE Group is a global industrial equipment company focused on specialized fabrication, welding, machining, and maintenance tools. It was formed in 2019 through the merger of three established brands and subsequent acquisitions to include the following brands: Climax, B&B Sumner, Axxair, Sumner Material Lifts, TAG, Mathey Dearman, Magnatech, Bortech, Fit-Up Pro, H&S Tool, PPM, and Calder. SFE Group serves industries such as aerospace & defense, food & beverage, bio-pharma, oil & gas, manufacturing, utilities, power generation, semiconductor, maritime, mining, transportation, data centers, and hospitals. SFE Group operates five manufacturing and fabrication facilities located in the United States, France, and the United Kingdom and had approximately 340 employees at August 31, 2026.
International Business
Our products and services are generally available globally, with our principal markets outside the United States being Europe, the Middle East and Asia. In fiscal 2026, we derived 39% of our net sales from the United States, 26% from Europe, 13% from the Middle East, 10% from Asia and 12% from other geographic areas. We have operations around the world that allow us to draw on the skills of a global workforce, provide flexibility to our operations, drive economies of scale, provide revenue streams that may help offset economic trends that are specific to individual countries, and facilitate access to new markets. Although international operations are subject to certain risks, we continue to believe that a global presence is key to maintaining strong relationships with many of our global customers and suppliers. Financial information related to the
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Company's geographic footprint of our continuing operations is included in Note 16, “Business Segment, Geographic and Customer Information” in the notes to the consolidated financial statements.
Product Development and Engineering
We conduct research and development (“R&D”) activities to develop new products and to enhance the functionality, effectiveness, ease of use and reliability of our existing products. We believe that our engineering and research and development efforts have been, and continue to be, key drivers of our success in the marketplace. Our advanced design and engineering capabilities contribute to the development of innovative and highly engineered products, maintain our technological leadership and enhance our ability to provide customers with unique and customized solutions and products. We anticipate that we will continue to make significant expenditures on research and development as we seek to provide new innovative tools and services to grow our market share. R&D costs are expensed as incurred and were $15 million in fiscal 2026, $14 million in fiscal 2025 and $12 million in fiscal 2024.
The Company holds numerous patents and trademarks. While no individual patent is believed to be of such importance that its termination would have a material adverse effect on our business, the termination of certain of our trademarks, including ENERPAC®, HYDRATIGHT®, LARZEP®, SIMPLEX® and DTA the Smart Move®, could have a material adverse effect on our business.
Competition
The markets for our products are highly competitive. We provide a diverse and broad range of industrial products and services to numerous global end markets, many of which are highly fragmented. Although we face larger competitors in several served markets, some of our competition is comprised of smaller companies which may lack the footprint or financial resources to serve global customers. We compete for business principally on the basis of customer service, product quality and availability, and engineering and research and development expertise. In addition, we believe that our cost structure, strategic global sourcing capabilities and global distribution support our competitive position.
Manufacturing and Operations
While we do have manufacturing capabilities including machining and fabrication, our manufacturing consists primarily of light assembly of components we source from a network of global suppliers. We have implemented single piece flow processes in most of our plants which reduce inventory levels, lower re-work costs and shorten lead times to customers. Components are built to our highly engineered specifications by a variety of suppliers in best-cost locations including various countries in Asia. We have built strong relationships with our key suppliers and, while we single source certain of our components, in many cases there are several qualified alternative sources.
Raw Material Costs, Inflation and Tariffs
We source materials and components from a network of global suppliers. These items are typically available from multiple suppliers. Raw materials that go into the components we source, such as steel, aluminum, plastic resin, brass, steel wire and rubber, are subject to price fluctuations and tariffs, which could have an impact on our results. We have been able to offset the impact of inflation and tariffs with productivity and pricing actions. We continue to manage our supply chain to mitigate ongoing risks associated with the evolving geopolitical and inflationary environments.
Order Backlogs and Seasonality
Our operating segments have a relatively short order-to-ship cycle. We had order backlogs of $81 million and $54 million at August 31, 2026 and 2025, respectively. The increase in our order backlog year over year was primarily due to strong order growth. Assuming no significant supply chain constraints arise after the date of this report, substantially all of the backlog at August 31, 2026 is expected to be filled within twelve months.
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While we typically experience a stronger second half of our fiscal year, our consolidated sales are not subject to significant seasonal fluctuations.
Percentages of Sales by Fiscal Quarter* | |||||||||||
| 2026 | 2025 | ||||||||||
| Quarter 1 (September - November) | 22% | 24% | |||||||||
| Quarter 2 (December - February) | 24% | 24% | |||||||||
| Quarter 3 (March - May) | 26% | 26% | |||||||||
| Quarter 4 (June - August) | 28% | 27% | |||||||||
| 100% | 100% | ||||||||||
| *Amounts may not add to 100% due to rounding. | |||||||||||
Human Capital Management
The goal of our human capital management strategy and practices 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 that makes up our workforce (approximately 2,100 employees as of August 31, 2026) is critical to the success of our company and the ability to deliver shareholder value. Our talent development framework is built around a robust performance management and development structure. Together with their leaders, employees establish annual goals and objectives that align directly with our organizational commitments. We monitor progress throughout the year, with candid and frequent dialogue encouraged along the way, and a formal check-in process at the mid-year point to facilitate a clear understanding of progress against goals as well as career development for our employees. Semi-annually, our Executive Leadership Team reviews the skills we require to execute our corporate strategy and key role requirements to identify development opportunities for our emerging talent. Annually, we conduct performance reviews and succession planning, and we promote a long-term career development view by encouraging the creation of unique individual development plans. Training opportunities for all levels of the organization are available and focus on skill, competency and leadership development. We believe in coaching and the sharing of perspectives, and we facilitate mentorship opportunities for the benefit of our workforce. We are committed to devoting the time, resources and planning necessary to maximize the potential of our employees' career development, as well as addressing the future skills needs of our organization.
In 2025, we rolled out Building a Culture of Success: Competencies and Behaviors for Enerpac Employees and Leaders, a very detailed competency model with behavioral guidance that we believe will foster the kind of culture that allows all of our employees to thrive. Launched in July 2025, our employees completed a comprehensive workshop to explain what the model is, how to use it, and how it is used within the organization. In fiscal 2027, we are launching training for all People Leaders to learn more about the Leader Competencies, with workshops and training for each of those competencies.
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 a comprehensive menu of benefits, including healthcare (health, dental, and vision) coverage, health savings accounts with $500/$1,000 employer funding, dependent care and healthcare flexible spending accounts, company-paid short-term disability, long-term disability, company-paid base life and accidental disability insurance, voluntary life coverage up to 6x annual salary, and spousal and dependent life coverage. Employees are offered thirteen paid holidays, three weeks of paid time off, military leave, a 401(k) retirement plan with a Company match and immediate vesting, access to our employee assistance program, an annual bonus program with broad participation, equity incentive programs, and an employee stock purchase plan that allows employees to buy company shares at a 15% discount (up from 10% in fiscal 2024). Both part-time and full-time employees are eligible for adoption assistance and up to 12 weeks of parental leave, of which six weeks are paid for full-time employees at an employee's full salary. We offer tuition reimbursement up to $7,000 for associate and undergraduate programs and $9,000 for graduate programs. We also offer a dependent scholarship of up to $2,500 for both part-time and full-time employees. We continue to evaluate enhancements to our compensation and benefit programs in all locations to ensure we remain competitive and meet the needs of our employees.
Employee Safety. 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 leaders and employees at all levels embrace our health, safety, security, environment, and quality (''HSSEQ'') programs, which translates into an enterprise-wide obligation to provide healthy, safe and productive work environments for our employees and deliver high standards of safety and quality in the 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 collaboration and 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 thorough reviews of incidents, near-misses, and quality issues; and management accountability and discussion of these improvement opportunities is a cornerstone of all business reviews. We finished the year with a Total Case Incident Rate (TCIR), of 0.68, compared with 0.54
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in fiscal 2025. Although this represents an increase of approximately 26% from the prior year, our TCIR remains significantly below industry averages and continues to place the Company within the top performing quartile of the BLS Machinery Manufacturing (NAICS 333) benchmark for businesses with more than 1,000 employees.
Executive Officers of the Registrant
The names, ages and positions of all of the executive officers of the Company as of October 17, 2026 are listed below.
| Name | Age | Position | ||||||||||||
| Paul E. Sternlieb | 54 | President and Chief Executive Officer | ||||||||||||
| Darren M. Kozik | 49 | Executive Vice President and Chief Financial Officer | ||||||||||||
| Eric T. Chack | 48 | Executive Vice President - Operations | ||||||||||||
| Mart T.W. Hinnen | 44 | Executive Vice President of Innovation & Heavy Industrial Technologies | ||||||||||||
| Philip A. Jefferson | 51 | Executive Vice President, Chief Commercial Officer | ||||||||||||
| Noah N. Popp | 53 | Executive Vice President, General Counsel, Corporate Secretary & Chief Compliance Counsel | ||||||||||||
| Benjamin J. Topercer | 49 | Executive Vice President, Chief People & Technology Officer | ||||||||||||
Paul E. Sternlieb, President and Chief Executive Officer, was appointed President and Chief Executive Officer of the Company in October 2021. Prior to joining the Company, Mr. Sternlieb served as Executive Vice President and President, Protein, at John Bean Technologies Corporation (“JBT”) since October 2017. Prior to JBT, Mr. Sternlieb was Group President, Global Cooking in the Food Equipment Group at Illinois Tool Works since 2014. He served as a Vice President & General Manager with Danaher from 2011 to 2014. Before Danaher, he held management roles with the H.J. Heinz Company, a leading food production company, and was a consultant with McKinsey & Company.
Darren M. Kozik was appointed as the Company’s Executive Vice President and Chief Financial Officer effective October 28, 2024. Prior to joining the Company, Mr. Kozik served as Senior Vice President—Global Corporate Finance of ManpowerGroup, a leading global workforce solutions company, after having served as Senior Vice President—North America Finance and Shared Services of ManpowerGroup from August 2018. Prior to ManpowerGroup, from May of 2016 to August of 2018, Mr. Kozik served first as the Chief Financial Officer of Mortara Instrument, and subsequently as Vice President and General Manager for the business. Mr. Kozik started his career at General Electric in 1999 and worked in roles of increasing scope and global responsibility, ending as the Chief Financial Officer of the Global Ultrasound business unit of GE Healthcare in 2016.
Eric T. Chack, Executive Vice President - Operations, joined the Company in July 2024 and leads all aspects of Enerpac’s global operations, including oversight for manufacturing, procurement, logistics, continuous improvement, quality, and reliability. Prior to joining Enerpac, from November 2021 to July 2024, Mr. Chack was SVP Supply Chain for Mohawk Industries. Before his time at Mohawk, from January 2018 to July 2021, Mr. Chack was SVP Global Operations & Supply Chain for Briggs & Stratton and held global operations leadership roles at SPX Corporation and IDEX Corporation. He has extensive experience building, developing, and optimizing the performance of world-class operations teams. In addition, he served as an Infantry Officer in the Marine Corps.
Mart T.W. Hinnen, Executive Vice President of Innovation & Heavy Industrial Technologies, joined the Company in March 2008 and has been promoted into roles of increasing responsibility since then, including General Manager of Heavy Lifting Technology & Machining in May of 2018, leading the ASCEND transformation program in April of 2022, adding the responsibility as Vice President of Innovation as of January 2024 and most recently promoted to Executive Vice President of Innovation & Heavy Industrial Technologies in May of 2026. Prior to joining the Company, Mart was an Internal Auditor at AXA. He has experience in implementing business transformations and market-leading innovation programs. Mart holds master’s degrees in Industrial Engineering and Management from the University of Twente (Netherlands), in IT auditing from the University of Amsterdam (Netherlands), and in Finance & Control from the University of Nyenrode (Netherlands).
Philip A. Jefferson, Executive Vice President, Chief Commercial Officer, joined the Company as the President of the Europe, Middle East, and Africa (“EMEA”) Region in June of 2023; was promoted to Regional President, Americas & EMEA, in November of 2024; and most recently to Executive Vice President, Chief Commercial Officer in May of 2026. Prior to joining the Company, Phil served as European Sales & Marketing Director at Honeywell International from March 2022 to June 2023 and Vice President Strategic Sales & Innovation at The Barcode Warehouse from July 2020 to March 2022. Prior to joining The Barcode Warehouse, he held senior commercial leadership roles at Motorola Solutions. He has extensive experience in recruiting, developing, and leading high performing commercial teams. Phil holds a bachelor’s degree from the University of Birmingham (UK).
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Noah N. Popp, Executive Vice President, General Counsel, Corporate Secretary & Chief Compliance Counsel, joined the Company in July 2025. Before joining the Company, Mr. Popp served as Regional General Counsel-Americas and Corporate Secretary of JBT Marel Corporation since September 2014, having served over the prior ten years in various in-house legal counsel positions with Kraft Foods Group, Inc., TMK IPSCO, Reyes Holdings L.L.C. and IPSCO Inc.
Benjamin J. Topercer, Executive Vice President, Chief People & Technology Officer, joined the Company in February 2022, serving as Executive Vice President and Chief Human Resource Officer until his appointment as Executive Vice President, Chief People & Technology Officer in August 2026. In his role, Ben is responsible for leading several key functions including Human Resources; Information Technology; Health, Safety, Security, and Environment and Corporate Communications. From June 2016 until he joined Enerpac, Mr. Topercer was the Chief Human Resource Officer for Vantage Specialty Chemicals, a manufacturer of specialty chemicals and ingredients included in consumer and industrial products. Prior to joining Vantage, he served in various human resources management roles for Premier Farnell Corporation, a distributor of electronic components, including as Global Head of HR for its sales, marketing, e-commerce and technology groups and specified business units, from September 2013 to June 2016. Prior to that, Mr. Topercer served as Director, Human Resources for Eaton Corporation, and its predecessor, Cooper Industries, from July 2011 to September 2013. Prior to that, he served in positions of progressive responsibility in the human resources group of Henkel Corporation from September 2004 to July 2011 and at Rexam Sussex from March 2000 to September 2004.
Item 1A. Risk Factors
The risks and uncertainties described below are those that we have identified as material but are not the only risks and uncertainties facing the Company. If any of the events contemplated by the following risks occur, our business, financial condition, or results of operations could be materially adversely affected. Additional risks and uncertainties not currently known to us, or that we currently believe are immaterial, also may adversely impact our business, including our ability to execute our strategic growth and profitability objectives.
Risks Related to Economic Conditions
Supply chain issues, including shortages of adequate component supply or that increase our costs or cause delays in our ability to fulfill orders, or a failure by us to estimate customer demand properly, could have an adverse impact on our business and operating results and our relationships with customers.
We rely on our supply chain for components and raw materials to manufacture our products and provide services to our customers. We may experience a reduction or interruption in supply due to factors beyond our control, including as a result of geopolitical conflicts and the imposition of international sanctions in response thereto, a significant natural disaster, pandemics, or shortages in global freight capacity. Our vendors may be unable or unwilling to meet our demand for raw materials or components, or significantly increase lead times for deliveries, which we may be unable to offset through alternate sources of supply. Further, vendors may impose significant increases in the price of critical components and raw materials that we may be unable to pass along to our customers. In addition, a failure by us to appropriately forecast or adjust our requirements for components or raw materials based on our business needs and volatility in demand for our products may impact our ability to timely procure raw materials and components necessary to maintain desired productivity in our operations. These supply chain issues, and others, could materially adversely affect our business, operating results, and financial condition and could materially damage customer relationships.
We procure certain components for our products from single or limited suppliers. In the event of supply disruptions from these suppliers, we may not be able to diversify our supply base for such components in a timely manner or may experience quality issues with alternate sources. Further, we procure a portion of our components from suppliers located in China, and we are therefore exposed to potential disruptions in deliveries from these suppliers due to political tensions with China, including tariffs and other trade restrictions; geopolitical risks; energy shortages or other causes. Our growth and ability to meet customer demand depend in large part on our ability to obtain timely deliveries of components and raw materials from our suppliers, and significant disruptions in their supply could have an adverse material affect on our business, operating results, and financial condition and could materially damage customer relationships.
We have in the recent past experienced supply shortages and inflationary pressures for certain components and raw materials that are important to our manufacturing process. The factors described above and others may exacerbate these pressures on us and our suppliers, and we expect these supply chain challenges and cost impacts may continue to impact us in the future. Moreover, our customers may be impacted by these same supply disruptions, reducing their demand for our products and services, which can adversely affect our financial results. Although we have generally secured additional supply from existing or alternate suppliers or taken other mitigating actions when such disruptions have occurred in past periods, there is no guarantee we can continue to do so in the future, and our business, results of operations, and financial condition could be adversely affected. When facing component supply-related challenges, we may also increase our inventories and purchase commitments to shorten lead times and increase the likelihood of maintaining adequate inventories to meet customer
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expectations. If the demand for our products is less than our expectations or if we otherwise fail to anticipate customer demand properly, an oversupply of components could result in inventory levels that could also lead to significant excess and obsolete inventory charges and adversely affect our operating and financial results.
Deterioration of, or instability in, the domestic and international economy and challenging end-market conditions could impact our ability to grow the business and adversely impact our financial condition, results of operations and cash flows and our ability to execute our strategy.
Our businesses and operating results have been, and will continue to be, affected by domestic and international economic conditions. Demand for our products and services is affected by general economic and business conditions in our served end markets. A substantial portion of our revenues is derived from customers in cyclical industries (such as the industrial and oil & gas sectors) that typically are adversely affected in periods of economic contraction or volatility. In such periods, our customers may experience deterioration of their businesses, which may reduce or delay our sales. Demand for most of our products and services depends on the level of new capital investment and planned maintenance expenditures by our customers. The level of capital expenditures by our customers fluctuates based on planned expansions, new builds and repairs, commodity prices, general economic conditions, availability of credit, funding available from government sources, and expectations of future market behavior. We have experienced contraction and challenging demand conditions in many of our served markets historically, and it is reasonably possible that we could experience such conditions in the future, which may adversely affect our financial condition, results of operations and cash flows and our ability to execute our strategy.
Disruptions in global oil markets have adversely affected our business and results of operations and similar events in the future may adversely affect our business and results.
A portion of our revenues is derived from customers in the midstream and downstream oil & gas industry. Disruptions in the global oil & gas markets (such as those due to the armed conflicts in the Middle East and the Ukraine/Russia conflict and the resulting international sanctions) and other changes in the supply of, and demand for, oil can have significant impacts on oil prices and negatively affect cash flows for many of those customers. In addition, oil and gas infrastructure has been targeted in the armed conflicts in the Middle East and in Ukraine and Russia. Combined, these disruptions have resulted in, and in the future could result in, lower capital expenditures and project modifications, delays or cancellations by those customers, reducing the demand for certain of our products and services in that end market, which could adversely affect our results of operations and financial condition.
Uncertainty over global tariffs, or the financial impact of tariffs, may negatively affect our results.
Changes in U.S. domestic and global tariff frameworks have increased our costs of producing goods and resulted in additional risks to our supply chain. We have developed and implemented strategies to mitigate previously implemented and, in some cases, proposed tariff increases, but there is no assurance we will be able to continue to mitigate prolonged tariffs. In the past year, the U.S. government has imposed significant tariffs impacting a wide variety of goods across multiple countries and indicated that additional tariffs may be imposed in the near future. In response, some countries have announced or imposed tariffs on goods made in the U.S., along with other trade restrictions, such as export restrictions on certain goods, including critical minerals, produced in their countries. These actions could depress demand for our products or increase the cost to manufacture our products, which may affect the competitiveness of our products relative to manufacturers not affected by such actions. Moreover, protracted trade disputes and uncertainty with respect to tariffs and trade agreements can adversely affect general economic conditions. All of these outcomes could have a material adverse effect on our business, financial condition, results of operations and cash flow.
Risks Related to Our Business and Operations
Logistics challenges, including global freight capacity shortages, could increase our freight costs or cause delays in our ability to fulfill orders and could have an adverse impact on our business and operating results.
The Company’s ability to import products in a timely and cost-effective manner has been, and may continue to be, adversely affected by shortages of freight capacity, delays at ports, port strikes, and other issues that otherwise affect transportation and warehousing providers. For example, the armed conflicts in the Middle East and the associated attacks on commercial ships in the region have caused global increases in shipping costs, as well as significant delays for some shipments. Globally, the shipping industry faces other challenges, including labor disputes at major ports and railways and weather-related disruptions, such as droughts in Panama reducing capacity in the Panama Canal, and extreme volatility in the price of oil. These issues could delay the delivery of our products or require the Company to locate alternative ports or warehousing providers to avoid disruption to customers. These alternatives may not be available on short notice or could result in higher freight and logistics costs, which could have an adverse impact on the Company’s business and financial condition.
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We face collection risk for receivables in foreign jurisdictions.
We sell products and services through distributors and agents. In certain jurisdictions, those third parties represent a significant portion of our sales in their respective countries. Collection times for receivables in many foreign jurisdictions may often be substantially longer than those in the United States (though typically less than one year). Further, for certain of our services business agency relationships, we utilize intermediary agents and are dependent on our agents to collect payment on our behalf. The indirect sales channels expose us to the credit risk of both our channel partners and end customers and increase the risk of delayed payments or uncollectible balances, which has occurred in the past and may occur again. A liquidity event or dispute involving one of our channel partners may adversely affect our results of operations and financial condition.
If we fail to retain the agents and distributors upon whom we rely to market our products and services, we may be unable to effectively market our products and services and our revenue and profitability may decline.
The marketing success of many of our businesses in the U.S. and abroad depends largely upon our independent agents’ and distributors’ sales and service expertise and relationships with customers in our end markets. Many of these agents have developed strong ties to existing and potential customers because of their detailed knowledge of our products. A loss of a significant number of these agents or distributors, or of a particular agent or distributor in a key market or with key customer relationships, could significantly inhibit our ability to effectively market our products, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Cybersecurity vulnerabilities, threats and more sophisticated and targeted computer crime could pose a risk to our systems, networks, operations, products, solutions, services and data.
Increased global cybersecurity threats, computer viruses and more sophisticated and targeted cyber-related attacks pose risks to our systems, networks and operations. Similarly, cybersecurity failures resulting from human error, vulnerabilities and technological errors, including the errors of third-party software providers, can also pose a risk to our systems, including third-party vendor operated systems, operations and products and potentially those of our business partners. An attack or information system failure also could result in losses due to an inability to recover lost data; software and key documentation; ransomware payments; security breaches; theft; lost or corrupted data; misappropriation of sensitive, confidential or personal data or information; loss of trade secrets and commercially valuable information; reputational harm, including loss of confidence by our customers, suppliers and employees in our ability to adequately protect their information; fines; and production downtimes and operational disruptions. The development and adoption of generative artificial intelligence (“AI”) technologies exacerbates these risks and may give rise to new tools for threat actors to attack and disrupt our systems.
We attempt to mitigate these risks by employing measures including employee training, network monitoring and testing, maintenance of protective systems, contingency planning, and the engagement of third-party experts, but we remain potentially vulnerable to additional known or unknown threats. We anticipate that meaningful investments in our operating technology infrastructure will be necessary as we continue to evaluate our vulnerabilities and take actions to safeguard our systems. Further, while we currently maintain insurance coverage that, subject to its terms and conditions, is intended to address costs associated with certain aspects of cybersecurity incidents and information systems failures, this insurance coverage may not, depending on the specific facts and circumstances surrounding an incident, cover all losses or all types of claims that arise from an incident, or the damage to our reputation that may result from an incident. There is no assurance the financial or operational impact from such threats or events will not be material.
A material disruption at a significant manufacturing facility could adversely affect our ability to generate sales and result in increased costs that we cannot recover.
Our financial performance could be adversely affected due to our inability to meet customer demand for our products or services in the event of a material disruption at one of our significant manufacturing or services facilities. Equipment failures, natural disasters, health issues (including pandemics), power outages, fires, explosions, terrorism, adverse weather conditions, labor disputes or other events could create a material disruption. Interruptions to production could increase our cost of sales, harm our reputation and adversely affect our ability to attract or retain our customers. Our business continuity plans may not be sufficient to address disruptions attributable to such risks. Any interruption in production capability could require us to make substantial capital expenditures to remedy the situation, which could adversely affect our financial condition and results of operations.
Our business operates in highly competitive markets, so we may be forced to cut prices or incur additional costs.
Our business generally faces substantial competition, domestically and internationally, in our end markets. We may lose market share in certain businesses or be forced to reduce prices or incur increased costs to maintain existing business. We compete globally on the basis of product design, quality, availability, performance and customer service. Present or future competitors in our markets may have new technologies or more attractive products and services or greater financial, technical or other resources which could put us at a competitive disadvantage. In addition, some of our competitors may be willing to reduce prices and accept lower margins to compete with us.
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Our international operations pose political, currency and other risks.
We expect sales from and into foreign markets to continue to represent a significant portion of our revenue. In addition, many of our manufacturing operations and suppliers are located outside the United States, including China, the United Kingdom, Spain and the Netherlands. Our sales and operating activities outside of the U.S. are, and will continue to be, subject to a number of risks, including:
•unfavorable fluctuations in foreign currency exchange rates;
•adverse changes in foreign tax, legal and regulatory requirements;
•export and import restrictions and controls on repatriation of cash;
•political and economic instability;
•difficulty in protecting intellectual property;
•government embargoes, tariffs and trade protection measures, such as “anti-dumping” duties applicable to classes of products, and import or export licensing requirements, as well as the imposition of trade sanctions against a class of products imported from or sold and exported to, or the loss of “normal trade relations” status with, countries in which we conduct business, that could significantly increase our cost of products or otherwise reduce our sales and harm our business;
•cultural norms and expectations that may sometimes be inconsistent with our Code of Conduct and our requirements about the manner in which our employees, agents and distributors conduct business;
•differing labor regulations; and
•acts of hostility, terror or war.
Our operations outside the United States require us to comply with a number of United States and international regulations. For example, we are subject to the Foreign Corrupt Practices Act (the “FCPA”), which prohibits United States companies or their agents and employees from providing anything of value to a foreign official for the purposes of influencing any act or decision of these individuals in their official capacity to help obtain or retain business, direct business to any person or corporate entity, or obtain any unfair advantage. Our activities in countries outside the United States create the risk of unauthorized payments or offers of payments by one of our employees or agents that could be in violation of the FCPA, even though these parties are not always subject to our control. We have internal control policies and procedures and have implemented training and compliance programs with respect to the FCPA. However, we cannot assure that our policies, procedures and programs always will protect us from reckless or criminal acts committed by our employees or agents. In the event that we believe or have reason to believe that our employees or agents have or may have violated applicable anti-corruption laws, including the FCPA, we may be required to investigate or have outside counsel investigate the relevant facts and circumstances. In addition, we are subject to and must comply with all applicable export controls and economic sanctions laws and embargoes imposed by the United States and other various governments. Changes in export control or trade sanctions laws may restrict our business practices, including cessation of business activities in sanctioned countries or with sanctioned entities, and may result in modifications to compliance programs and increase compliance costs, and violations of these laws or regulations may subject us to fines, penalties and other sanctions, such as loss of authorizations needed to conduct aspects of our international business or debarments from export privileges. Violations of the FCPA or export controls or sanctions laws and regulations may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, financial condition, results of operations, and cash flows. Other countries in which we operate have similar anti-corruption legal frameworks, such as the U.K. Bribery Act and China’s Anti-Unfair Competition Law, to which we may be subject.
We intend to continue to pursue international growth opportunities, which could increase our exposure to risks associated with international sales and operations. As we expand our international operations, we may also encounter new risks that could adversely affect our revenues and profitability. Failure to properly manage these risks could adversely affect our business, financial condition, results of operations and cash flows. In addition, United States tax reform has significantly changed how foreign operations are taxed in the United States. Therefore, we continue to review our organizational structure, and changes to where income is generated, which changes may have a material adverse effect on our liquidity and results of operations.
Our customers and other business partners often require terms and conditions that expose us to significant risks and liabilities.
We operate in end markets and industries in which our customers and business partners seek to contractually shift significant risks associated with their operations or projects to us. We structure our commercial and contracting practices to assess and manage the risks we are assuming, but we cannot assure that material liabilities will not arise from our contracts with
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our business partners. Also, our contracting standards may be more stringent than those of certain competitors, and as a result, we may experience market share losses or the reduction in growth opportunities.
Imposition of laws and regulations that disadvantage the oil & gas industry or other energy industries may have an adverse impact on our results of operations.
A portion of our revenues is derived from the sale of products and services to end users in the oil & gas industry. Accordingly, our results of operations may be adversely affected by the imposition of climate-related laws and regulations that disadvantage the oil & gas industry compared to other industries and have the effect of reducing the production of petroleum products. In addition, a reduction in the production of petroleum products as a result of consumer behavior that embraces alternative sources of energy over oil & gas could similarly adversely affect our results of operations by reducing the demand for our products and services. Similarly, actions by the U.S. Government that disadvantage the wind industry may adversely affect demand for certain of our products and adversely affect our results of operations.
Risks Related to the Execution of Our Strategy
If we fail to develop new products, or customers do not accept our new products, our business could be adversely affected.
Our ability to develop innovative new products can affect our competitive position and often requires the investment of significant resources. Difficulties or delays in research, development, production or commercialization of new products, or failure to gain market acceptance of new products and technologies, may reduce future sales and adversely affect our competitive position. There can be no assurance that we will have sufficient resources to make such investments, that we will be able to make the technological advances necessary to maintain competitive advantages or that we can recover major research and development expenses. If we fail to make innovations, launch products with quality problems, experience development cost overruns, or the market does not accept our new products, then our financial condition, results of operations, cash flows and liquidity could be adversely affected.
Our growth strategy includes strategic acquisitions, which we may not be able to consummate.
We plan to make acquisitions to grow our business, enhance our global market position and broaden our industrial tools product offerings. Our ability to successfully execute acquisitions will be impacted by factors including the availability of financing on terms acceptable to us, the potential reduction of our ability or willingness to incur debt to fund acquisitions, the reluctance of target companies to sell in current markets, our ability to identify acquisition candidates that meet our valuation parameters and increased competition for acquisitions. Failure to effectively execute our acquisition strategy could have an adverse effect on our competitive position, reputation, financial condition, results of operations, cash flows and liquidity.
We may not be able to realize planned benefits from acquired companies.
We may not be able to realize planned benefits from acquired companies, including from our recent acquisition of SFE Group. Achieving those benefits depends on the timely, efficient and successful execution of a number of post-acquisition events, including integrating the acquired business into the Company. Factors that could affect our ability to achieve these benefits include:
•difficulties in integrating and managing personnel, financial reporting and other systems used by the acquired businesses;
•the failure of acquired businesses to perform in accordance with our expectations;
•failure to achieve anticipated synergies between our business units and the business units of acquired businesses;
•the loss of customers of acquired businesses;
•the loss of key managers and employees of acquired businesses;
•increased expenses;
•assumption of known and unknown liabilities and exposure to litigation;
•increased levels of debt or dilution to existing shareholders;
•potential cybersecurity risks, as acquired systems may not possess the appropriate security measures; or
•other material adverse events in the acquired businesses.
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We conduct operational, financial, tax, systems, and legal due diligence on all acquisitions; however, we cannot assure that all potential risks or liabilities are adequately discovered, disclosed, or understood in each instance.
In addition, internal controls over financial reporting of acquired companies may not be compliant with required standards. Issues may exist that could rise to the level of significant deficiencies or, in some cases, material weaknesses, particularly with respect to foreign companies or non-public U.S. companies that we acquire.
The process of integrating acquired businesses into our existing operations also may require additional financial resources and attention from management that would otherwise be available for the ongoing development or expansion of our existing operations. Larger acquisitions, such as the recent SFE Group acquisition, may be particularly challenging to successfully integrate into our business. Although we expect to successfully integrate any acquired businesses, we may not achieve the desired net benefit in the timeframe planned or at all. If acquired businesses do not operate as we anticipate, it could materially impact our business, financial condition and results of operations.
We may not be able to maintain operational improvements from our restructuring actions and may not realize cost savings from restructuring actions undertaken in the future.
We have implemented plans designed to accelerate organic growth strategies and improve operational excellence by driving greater efficiency and productivity on selling, general and administrative expenses. In addition, we have implemented other plans that incurred restructuring costs to rightsize our Hydratight service operation, eliminate redundancies in our corporate or regional structures, eliminate excess capacity in our facilities as a result of the integration of acquisitions or divestitures of product lines, and eliminate product or service lines that did not meet targeted profitability metrics. Although we expect that the improved operating profit, cost savings and realization of efficiencies from these programs will continue to provide annual benefits, we may not fully maintain these improvements (see Note 4, “Restructuring Charges,” in the notes to the consolidated financial statements for further discussion of the current restructuring activities). We may, from time to time, implement additional restructuring plans designed to achieve similar objectives or otherwise accelerate organic growth strategies and improve operational excellence. We may not fully realize the anticipated benefits, savings and improvements in our cost structure from any restructuring efforts that we may undertake in the future, including due to unforeseen difficulties or delays. In addition, the expenses of restructuring initiatives could be greater than anticipated and the announcement and implementation of restructuring activities may be disruptive to our operations. If we are unable to realize anticipated cost savings from our restructuring initiatives in the future or experience costs greater than anticipated or disruptions to our operations in connection with such initiatives, our profitability and financial position may be adversely affected.
The indemnification provisions of acquisition agreements may result in unexpected liabilities.
Certain acquisition agreements from past acquisitions require the former owners to indemnify us against certain liabilities related to the operation of such acquired companies. In most of these agreements, the liability of the former owners is limited to specific warranties given in the agreement as well as in amount and duration. Certain former owners also may not be able to meet their indemnification responsibilities. We may be subject to the same risk with respect to future acquisitions as well. As a result of those limitations, we may face unexpected liabilities that adversely affect our profitability and financial position.
Our failure to successfully complete acquisitions could negatively affect us.
We may not be able to consummate desired acquisitions, which could materially impact our growth rate, results of operations, future cash flows and stock price. Our ability to achieve our goals depends upon, among other things, our ability to identify and successfully acquire companies, businesses and product lines, and to effectively integrate them and achieve cost savings. Additionally, decreases in our stock price and an inability to raise additional funds may adversely affect our ability to execute these acquisitions. Competition for acquisitions in our business areas may be significant and result in higher prices for businesses, including businesses that we may target, which may also affect our acquisition rate or benefits achieved from our acquisitions.
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Divestitures and discontinued operations could negatively impact our business, and retained liabilities from businesses that we have sold could adversely affect our financial results.
In connection with the execution of our strategy to become a pure-play industrial tools and services company, we have completed several divestitures. These divestitures pose risks and challenges that could negatively impact our business, including retained liabilities related to divested businesses, obligations to indemnify buyers against contingent liabilities and potential disputes with buyers.
If we do not realize the expected benefits of these divestitures or our post-completion liabilities and continuing obligations are substantial and exceed our expectations, our financial position, results of operations and cash flows could be negatively impacted. Any divestiture may result in a dilutive impact to our future earnings if we are unable to offset the dilutive impact from the loss of revenue and profits associated with the divestiture, as well as significant write-offs, including those related to goodwill and other intangible assets, which could have a material adverse effect on our results of operations and financial condition.
Our goodwill and other intangible assets represent a substantial amount of our total assets.
Our total assets reflect substantial intangible assets, primarily goodwill. As of August 31, 2026, goodwill and other intangible assets totaled $333 million, or 39% of our total assets. The goodwill results from acquisitions, representing the excess of the purchase price over the fair value of the net tangible and other identifiable intangible assets we have acquired. We assess annually, and more frequently if a triggering event occurs, whether there has been impairment in the value of our goodwill or indefinite-lived intangible assets. If future operating performance at one or more of our reporting units were to fall below current levels, we could be required to recognize a non-cash charge to operating earnings to impair the related goodwill or other intangible assets. See Note 7, “Goodwill, Intangible Assets and Long-Lived Assets” in the notes to the consolidated financial statements and “Critical Accounting Estimates” for further discussion on goodwill, intangible asset and long-lived asset impairments. Any future goodwill or intangible asset impairments could negatively affect our financial condition and results of operations.
Risks Related to Legal, Compliance and Regulatory Matters
We are subject to many laws and regulations that may change in ways that are detrimental to our competitiveness or results.
Our businesses are subject to regulation under a broad range of U.S. and foreign laws and regulations. Some of those laws and regulations may change in ways that will require us to modify our business practices and objectives in ways that adversely impact our financial condition or results of operations, including by restricting existing activities and products, subjecting our operations to escalating costs or prohibiting us from operating in certain jurisdictions. Examples of laws or regulations that may have an adverse effect on our operations, financial condition and growth strategies include tax law, tariffs and other export and import controls, anti-corruption law, competition law, data privacy regulations, currency controls and economic or political sanctions.
Legal compliance risks could result in significant costs to our business or cause us to restrict current activities or curtail growth plans.
We directly or indirectly operate in industries, markets and jurisdictions in which we are exposed to compliance risks and that are subject to significant scrutiny by regulators, governmental authorities and other persons. We structure and strengthen our risk management and compliance programs to mitigate such risks and foster compliance with all applicable laws, but our practices may not be sufficient to eliminate these risks. The global and diverse nature of our operations, the complex and high-risk nature of some of our markets, our reliance on third-party agents and representatives to support sales and other business activities, and increasingly stringent laws and enforcement activities could result in violations of law, enforcement actions or private litigation resulting in significant defense and investigation costs, fines and penalties, and a broad range of remedial actions, including potential restrictions on our operations and other adverse changes to our business plans. See Note 17, "Commitments and Contingencies" in the notes to the consolidated financial statements for additional information about compliance risks.
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Health, safety and environmental laws and regulations may result in additional costs.
We are subject to federal, state, local and foreign laws and regulations governing public and worker health and safety, including environmental matters. Violations of these laws could result in significant harm and financial liabilities that could adversely affect our operating results and reputation. Pursuant to such laws, governmental authorities have required us to contribute to the cost of investigating or remediating certain matters at current or previously owned and operated sites. In addition, we have provided environmental indemnities for previously owned operations in connection with the sale of certain businesses and product lines. Liability as an owner or operator, or as an arranger for the treatment or disposal of hazardous substances, can be joint and several and can be imposed without regard to fault. There is a risk that costs relating to these matters could be greater than what we currently expect or exceed our insurance coverage, or that additional remediation and compliance obligations could arise which require us to make material expenditures. In addition, environmentally related product regulations are growing globally in number and complexity and could contribute to increased costs with respect to disclosure requirements, product sales and distribution related costs, and post-sale recycling and disposal costs. More stringent environmental laws, unanticipated remediation requirements or the discovery of previously unknown conditions could materially harm our financial condition and operating results. We are also required to comply with environmental laws and regulations to maintain operating permits and licenses, some of which are subject to discretionary renewal from time to time, for many of our businesses, and our business operations could be restricted if we are unable to renew existing permits or to obtain any additional permits that we may require. There can be no assurance that these liabilities and costs will not have a material adverse effect on our financial position, results of operation, or cash flows.
Unfavorable tax law changes may adversely affect results.
We are subject to income taxes in the United States and in various foreign jurisdictions. Domestic and international tax liabilities are subject to the allocation of income among various tax jurisdictions. Our effective tax rate could be adversely affected by changes in tax law (including a potential increase in the U.S. federal income tax rate or increased tariffs on goods imported into the U.S.), the mix of earnings among countries with differing statutory tax rates, or changes in the valuation allowance of deferred tax assets.
Costs and liabilities arising from legal proceedings could be material and adversely impact our financial results.
We are subject to legal and regulatory proceedings, including litigation asserting product liability and warranty claims, including claims with respect to businesses that we have acquired for matters arising before the relevant date of acquisition. Because our products are used in critical applications in demanding environments, including in the oil & gas industry, product and service failures can have significant consequences and could result in significant product liability, warranty and other claims against us, regardless of whether our products and services caused the incident that is the subject of the claim, and we may have obligations to participate in the recall of products in which our products are components, if any of the components or services we supply prove to be defective. We maintain insurance and have established reserves for these matters as appropriate and in accordance with applicable accounting standards and practices. Insurance coverage, to the extent it is available, may not cover all losses arising from such contingencies. Also, estimating legal reserves or possible losses involves significant judgment and may not reflect the full range of uncertainties and unpredictable outcomes inherent in litigation and investigations, and the actual losses arising from particular matters may exceed our current estimates and adversely affect our results of operations. We also expect that additional legal proceedings and other contingencies will arise from time to time, and we cannot predict the occurrence, magnitude and outcome of such additional matters. Moreover, we operate in jurisdictions where claims involving us may be adjudicated within legal systems that are less developed and less reliable than those of the U.S. or other more developed markets, and this can create additional uncertainty about the outcome of proceedings before courts or other governmental bodies in such markets.
Risks Related to Our Capital Structure
Our indebtedness could harm our operating flexibility and competitive position.
We have incurred, and may in the future incur, significant indebtedness in connection with acquisitions or other strategic growth initiatives. While at current debt levels we have significant flexibility on our financial debt covenants, we have incremental capacity to incur substantial additional indebtedness to fund acquisitions (as we did to partially fund the acquisition of SFE Group) or other strategic growth initiatives. Our level of debt and the limitations imposed on us by our debt agreements could adversely affect our operating flexibility and put us at a competitive disadvantage.
Our ability to make scheduled principal and interest payments, refinance our indebtedness and satisfy our other debt and lease obligations will depend upon our future operating performance and credit market conditions, which could be adversely affected by factors beyond our control. In addition, there can be no assurance that future borrowings or equity financings will be available to us on favorable terms, or at all, for the payment or refinancing of our indebtedness. If we are unable to service our indebtedness, our business, financial condition and results of operations will be adversely affected.
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The financial and other covenants in our debt agreements may adversely affect us.
Our senior credit facility contains financial and other restrictive covenants. These covenants could limit our financial and operating flexibility as well as our ability to plan for and react to market conditions, meet our capital needs and support our strategic priorities and initiatives should we take on additional indebtedness for acquisition or other strategic objectives. Our failure to comply with these covenants also could result in events of default which, if not cured or waived, could require us to repay indebtedness before its due date, and we may not have the financial resources or otherwise be able to arrange alternative financing to do so. Our compliance with the covenants of our senior credit facility may be adversely affected by severe market contractions or disruptions to the extent they reduce our earnings for a prolonged period and we are not able to reduce our debt levels or cost structure accordingly. Borrowings under our senior credit facility are secured by most domestic personal property assets and are guaranteed by most of our domestic subsidiaries and by a pledge of the stock of most of our domestic and certain foreign subsidiaries. If borrowings under our senior credit facility were declared or became due and payable immediately as the result of an event of default and we were unable to repay or refinance those borrowings, our lenders could foreclose on the pledged assets and stock. Any event that requires us to repay any of our debt before it is due could require us to borrow additional amounts at unfavorable borrowing terms, cause a significant reduction in our liquidity and impair our ability to pay amounts due on our indebtedness. Moreover, if we are required to repay any of our debt before it becomes due, we may be unable to borrow additional amounts or otherwise obtain the cash necessary to repay that debt, when due, which could have a material adverse effect on our business, financial condition and liquidity.
We may incur increased interest expense as a result of our variable rate debt.
Borrowings under our revolving line of credit and our term loan incur interest which is variable based on fluctuations in the referenced Secured Overnight Financing Rate (“SOFR”). Increases in the referenced SOFR will increase our borrowing costs and negatively impact financial results and cash flows.
Risks Related to Ownership of Our Common Stock
The market price of our common stock may be volatile.
A relatively small number of shares of our common stock are normally traded in any one day and higher volumes could have a significant effect on the market price of our common stock. The market price of our common stock could fluctuate significantly for many reasons, including in response to the risks described in this section and elsewhere in this report or for reasons unrelated to our operations, such as reports by industry analysts, investor perceptions or negative announcements by our customers, competitors or suppliers regarding their own performance, as well as industry conditions and general financial, economic and political instability. An increase in the number of our shares, in connection with acquisitions, through a public offering of additional shares, or through stock incentive compensation plans has a dilutive effect on our earnings per share and can have a material adverse effect on our stock price.
Because our quarterly revenues and operating results may vary significantly in future periods, our stock price may fluctuate.
Our revenue and operating results may vary significantly from quarter to quarter. A high proportion of our costs are fixed, due in part to significant selling and manufacturing costs. Small declines in revenues could disproportionately affect operating results in a quarter and the price of our common stock may fall. Other factors that could significantly affect quarterly operating results include, but are not limited to:
•demand for our products and services;
•the timing of sales of our products and services;
•changes in foreign currency exchange rates;
•changes in applicable tax rates;
•an impairment of goodwill or other intangible assets;
•the occurrence of restructuring charges, which can vary significantly from period to period and result in fluctuations in our reported net income and earnings per share due to the timing of cost reduction actions;
•unanticipated delays or problems in introducing new products;
•announcements by competitors of new products, services or technological innovations;
•changes in our pricing policies or the pricing policies of our competitors;
•increased expenses, whether related to sales and marketing, raw materials or supplies, labor matters, product development or administration;
•major changes in the level of economic activity in major regions of the world in which we do business;
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•costs related to possible future acquisitions or divestitures of technologies or businesses;
•an increase in the number or magnitude of product liability or environmental claims; and
•our ability to expand our operations and the amount and timing of expenditures related to expansion of our operations, particularly outside the U.S.
Various provisions and laws could delay or prevent a change of control.
The anti-takeover provisions of our articles of incorporation and bylaws and provisions of Wisconsin corporation law could delay or prevent a change of control or may impede the ability of the holders of our common stock to change our management. In particular, our articles of incorporation and bylaws, among other things:
•require a supermajority shareholder vote to approve a merger of the Company with another entity;
•regulate how shareholders may present proposals or nominate directors for election at shareholders’ meetings; and
•authorize our board of directors to issue preferred stock in one or more series, without shareholder approval.
Other Risk Factors
Geopolitical unrest and terrorist activities may cause the economic conditions in the U.S. or abroad to deteriorate, which could harm our business.
Terrorist attacks against targets in the U.S. or abroad, rumors or threats of war, other geopolitical activity or trade disruptions, such as those caused by the Russia-Ukraine conflict, the armed conflicts in the Middle East, or any conflict or threatened conflict between China and Taiwan, may cause trade relations and general economic conditions in the U.S. or abroad to deteriorate. The occurrence of any of these events could result in a prolonged economic slowdown or recession in the U.S. or in other areas and could have a significant impact on our business, financial condition or results of operations.
Our inability to attract, develop and retain qualified employees could have a material adverse impact on our operations.
Our ability to deliver financial results and drive growth and pursue competitive advantages in our business substantially depends on our ability to retain key employees and continually attract new talent to the business. If we experience losses of key employees, such as our executives, or lose key employees we expected to retain from acquisitions, such as the SFE Group acquisition, or experience significant delays or difficulty in replacing any of these individuals, our operations, competitive position and financial results may be adversely affected. Competition for highly qualified personnel is intense, and our competitors and other employers may attempt to hire our skilled and key employees. Additionally, we need qualified managers and skilled employees with technical and manufacturing industry experience to operate our businesses successfully. From time to time there may be shortages of skilled labor which may make it more difficult and expensive for us to attract and retain qualified employees or lead to increased labor costs.
Our intellectual property portfolio may not prevent competitors from developing products and services similar to or duplicative to ours, and the value of our intellectual property may be negatively impacted by external dependencies.
Our patents, trademarks and other intellectual property may not prevent competitors from independently developing or selling products and services functionally equivalent or superior to our own or adequately deter misappropriation or improper use of our innovations and technology. In addition, further steps we take to protect our intellectual property, including non-disclosure agreements, may not prevent the misappropriation of our business-critical secrets and information. In such circumstances, our competitive position and the value of our brand may be negatively impacted.
Our competitors or other persons could assert that we have infringed their intellectual property rights.
We may be the target of enforcement of patents or other intellectual property rights by third parties. We have implemented legal reviews and other controls in our new product development and marketing processes system to mitigate the risk of infringing third-party rights, but those controls may not prove adequate or deter all claims. Responding to infringement claims, regardless of their merits, can be expensive and time consuming. If we are found to infringe any third-party rights, we could be required to pay substantial damages or we could be enjoined from offering some of our current products and services.
Item 1B. Unresolved Staff Comments
None.
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Item 1C. Cybersecurity
Cybersecurity Risk Management and Strategy
We depend on integrated information systems to conduct our business. In order to defend against cybersecurity threats, we have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. The frameworks used to design our program include the National Institute of Standards and Technology Cybersecurity Framework and The Sarbanes-Oxley Act of 2002. This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use these frameworks as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
Our cybersecurity risk management program is integrated into our overall enterprise risk management program and shares common methodologies, reporting channels, and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas. Our cybersecurity risk management program includes:
•risk assessments designed to help identify material cybersecurity risks to our critical systems and information;
•a security team principally responsible for managing our cybersecurity risk assessment processes, security controls, and responses to cybersecurity incidents;
•the use of external service providers, where appropriate, to assess, test or otherwise enhance our security controls;
•cybersecurity awareness training of our employees, including our incident response personnel;
•a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents, cybersecurity resilience and recovery; and
•a third-party risk management process for service providers, suppliers, and vendors who access our critical systems and data.
Cybersecurity Governance
Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to its Audit Committee oversight of cybersecurity and other information technology risks. Our Audit Committee oversees management’s implementation of our cybersecurity risk management program.
Our Audit Committee receives regular reports from management on our cybersecurity risks, and our full Board receives periodic updates. In addition, management updates the Audit Committee, as necessary, regarding any material or significant cybersecurity incidents.
Our Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity. Board members receive presentations on cybersecurity topics from our Vice-President of Information Technology (“VPIT”) as part of the Board’s continuing education on topics that impact public companies.
Our management team, including our VPIT and Director, Cybersecurity, has overall responsibility for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our management team’s experience includes extensive technology and finance leadership experience across multiple industries, experience in the Legal, Risk and Compliance disciplines, and over 20 years of leadership experience for our VPIT.
Our management team is informed about and monitors the prevention, detection, mitigation, and remediation of key cybersecurity risks and incidents through various means, which may include briefings from internal security personnel, threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us, and alerts and reports produced by security tools deployed in the information technology environment.
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Item 2. Properties
As of August 31, 2026, we owned or leased the following facilities (square footage in thousands):
| Number of Locations | Square Footage | ||||||||||||||||||||||||||||||||||
| Distribution / Sales / Admin | |||||||||||||||||||||||||||||||||||
| Manufacturing | Total | Owned | Leased | Total | |||||||||||||||||||||||||||||||
| Industrial Tools & Services | 14 | 30 | 44 | 207 | 1,021 | 1,228 | |||||||||||||||||||||||||||||
| Corporate and Other | 1 | 1 | 2 | — | 92 | 92 | |||||||||||||||||||||||||||||
| 15 | 31 | 46 | 207 | 1,113 | 1,320 | ||||||||||||||||||||||||||||||
We consider our facilities suitable and adequate for the purposes for which they are used and do not anticipate difficulty in renewing existing leases as they expire or in finding alternative facilities. Our largest facilities are located in the United States, the Netherlands, Spain, China and Saudi Arabia. We also maintain a presence in Algeria, Australia, Brazil, France, Germany, India, Italy, Japan, Kazakhstan, Norway, Poland, Singapore, South Africa, South Korea, Tunisia, the United Arab Emirates and the United Kingdom. See Note 11, “Leases” in the notes to the consolidated financial statements for information regarding our lease commitments.
Item 3. Legal Proceedings
We are a party to various legal proceedings that have arisen in the normal course of business. These legal proceedings typically include product liability, breaches of contract, employment, personal injury and other disputes.
We have recorded reserves for estimated losses based on the specific circumstances of each case. Such reserves are recorded when it is probable that a loss has been incurred as of the balance sheet date and the amount of the loss can be reasonably estimated. In our opinion, the resolution of these contingencies is not likely to have a material adverse effect on our financial condition, results of operations or cash flows. Information with respect to contingencies arising from legal proceedings, including governmental investigations, set forth in Note 17, “Commitments and Contingencies” in the notes to the consolidated financial statements, is incorporated by reference.
Item 4. Mine Safety Disclosures
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
The Company’s Class A common stock is traded on the New York Stock Exchange under the symbol EPAC. As of September 30, 2026, there were 754 shareholders of record of the Company's Class A common stock.
Dividends
In fiscal 2026, the Company declared a dividend of $0.04 per share of Class A common stock payable on October 16, 2026 to shareholders of record on October 6, 2026. In fiscal 2025, the Company declared a dividend of $0.04 per share of Class A common stock payable on October 17, 2025 to shareholders of record on October 7, 2025.
Share Repurchases
The Company's Board of Directors has authorized the repurchase and immediate retirement of shares of the Company's common stock under publicly announced share repurchase and retirement programs. In October 2025, the Company’s Board of Directors approved a new share repurchase program authorizing the repurchase of a total of $200 million of the Company’s outstanding common stock. The Company repurchased and retired 2,078,645 shares for $81 million (inclusive of excise taxes of $1 million) in the year ended August 31, 2026. As of August 31, 2026, the maximum value of shares that may yet be purchased under the program authorization is $120 million.
There were no share repurchases during the fourth quarter of fiscal 2026.
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Performance Graph
The graph and table below compare the cumulative five-year total return of the Company's Class A common stock with the cumulative total returns of the Russell 2000 Index and the S&P 600 Industrials Index. They assume the value of the investment in our Class A common stock and each index was $100 on August 31, 2021, and the reinvestment of all dividends during the five-year period ended August 31, 2026.
| 8/21 | 8/22 | 8/23 | 8/24 | 8/25 | 8/26 | ||||||||||||||||||||||||||||||
| Enerpac Tool Group Corp. | $ | 100.00 | $ | 77.26 | $ | 104.54 | $ | 164.79 | $ | 169.34 | $ | 149.41 | |||||||||||||||||||||||
| Russell 2000 | 100.00 | 82.12 | 85.94 | 101.81 | 110.12 | 139.26 | |||||||||||||||||||||||||||||
| S&P 600 Industrials | 100.00 | 92.76 | 112.23 | 141.66 | 163.18 | 192.79 | |||||||||||||||||||||||||||||
The stock price performance included in this graph is not necessarily indicative of future stock price performance.
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Item 6. [Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis is intended to assist the reader in understanding our results of operations and financial condition for the fiscal years ended August 31, 2026 and 2025. For comparisons of the fiscal years ended August 31, 2025 and 2024, see Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2025 filed on October 17, 2025. Management’s Discussion and Analysis is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data”.
Background
The Company has one reportable segment, the Industrial Tools & Services (“IT&S”) segment, and an Other operating segment, which does not meet the criteria to be considered a reportable segment. The IT&S segment is primarily engaged in the design, manufacture and distribution of branded hydraulic and mechanical tools and in providing services and tool rental to the general industrial; refining and petrochemical; industrial maintenance, repair and operations (“MRO”); machining & manufacturing; power generation; infrastructure; mining and other markets. Financial information related to the Company's reportable segment is included in Note 16, “Business Segment, Geographic and Customer Information” in the notes to the consolidated financial statements.
Business Update
Our businesses provide an array of products and services across multiple markets and geographies, which results in significant diversification. The IT&S segment and the Company are well-positioned to drive shareholder value through a sustainable business strategy built on well-established brands, broad global distribution and end markets, clear focus on the core tools and services business, and disciplined capital deployment.
Our Business Model
Our long-term goal is to create sustainable returns for our shareholders through above-market growth in our core business, expanding our margins, generating strong cash flow, and being disciplined in the deployment of our capital. We intend to grow through execution of our organic growth strategy, focused on key vertical markets that benefit from long-term macro trends, driving customer driven innovation, expansion of our digital ecosystem to acquire and engage customers, and an expansion in emerging markets such as Asia Pacific. In addition to organic growth, we also focus on margin expansion through operational efficiency techniques, including lean, continuous improvement and 80/20, to drive productivity and lower costs, as well as optimizing our selling, general and administrative expenses through consolidation and shared service implementation. We also apply these techniques and pricing actions to offset commodity increases and inflationary pricing. Finally, cash flow generation is critical to achieving our financial and long-term strategic objectives. We believe driving profitable growth and margin expansion will result in cash flow generation, which we seek to supplement through minimizing primary working capital. We intend to allocate the cash flow that results from the execution of our strategy in a disciplined way toward investment in our businesses, maintaining our strong balance sheet, disciplined M&A program, and opportunistically returning capital to shareholders. We anticipate the compounding effect of reinvesting in our business will fuel further growth and profitable returns.
Acquisition of SFE Group
On October 28, 2026, we acquired SFE Group in a merger transaction in which the aggregate amount paid by the Company with respect to the equity interests in SFE Group was approximately $452 million in cash, plus the issuance by the Company of approximately $20 million in restricted stock unit awards to key personnel of SFE Group, in lieu of cash payment of transaction bonuses owed by SFE Group to such personnel upon completion of the merger transaction. The cash portion of the acquisition consideration is subject to customary adjustments for the level of cash, net working capital, transaction related expenses (including with respect to the transaction bonuses), indebtedness and other similar items existing at SFE Group and its subsidiaries as of the closing date of the transaction. The Company funded the payment of the cash consideration at closing from cash on hand, its recently refinanced $300 million term loan and borrowings of $312 million under the revolving credit facility under its New Senior Credit Facility (as defined below).
SFE Group is a global industrial equipment company focused on specialized fabrication, welding, machining, and maintenance tools. It was formed in 2019 through the merger of three established brands and subsequent acquisitions to include the following brands: Climax, B&B Sumner, Axxair, Sumner Material Lifts, TAG, Mathey Dearman, Magnatech, Bortech, Fit-Up Pro, H&S Tool, PPM, and Calder. SFE Group serves industries such as aerospace & defense, food & beverage, bio-pharma, oil & gas, manufacturing, utilities, power generation, semiconductor, maritime, mining, transportation, data centers, and
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hospitals. SFE Group operates five manufacturing and fabrication facilities located in the United States, France, and the United Kingdom and had approximately 340 employees at August 31, 2026.
Historical Financial Data
The following table and corresponding year-over-year analysis sets forth our results of continuing operations:
| (dollars in millions, except per share amounts) | Year Ended August 31, | ||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
Statements of Earnings Data: (1) | % of net sales | % of net sales | |||||||||||||||||||||
| Total net sales | $ | 652 | 100 | % | $ | 617 | 100 | % | |||||||||||||||
| Total cost of products sold | 331 | 51 | % | 305 | 49 | % | |||||||||||||||||
| Gross profit | 321 | 49 | % | 312 | 51 | % | |||||||||||||||||
| Selling, general and administrative expenses | 182 | 28 | % | 167 | 27 | % | |||||||||||||||||
| Amortization of intangible assets | 6 | 1 | % | 6 | 1 | % | |||||||||||||||||
| Restructuring charges | 3 | 1 | % | 6 | 1 | % | |||||||||||||||||
| Impairment & divestiture charges | — | — | % | — | — | % | |||||||||||||||||
| Operating profit | 129 | 20 | % | 133 | 22 | % | |||||||||||||||||
| Financing costs, net | 9 | 1 | % | 10 | 2 | % | |||||||||||||||||
| Other expense, net | 3 | — | % | 3 | — | % | |||||||||||||||||
| Earnings before income tax expense | 118 | 18 | % | 121 | 20 | % | |||||||||||||||||
| Income tax expense | 28 | 4 | % | 28 | 5 | % | |||||||||||||||||
| Net earnings from continuing operations | $ | 90 | 14 | % | $ | 93 | 15 | % | |||||||||||||||
Other Financial Data: (1) | |||||||||||||||||||||||
| Depreciation | $ | 2 | $ | 2 | |||||||||||||||||||
| Capital expenditures | 11 | 19 | |||||||||||||||||||||
(1) Results are from continuing operations and exclude the financial results of previously divested businesses reported as discontinued operations. The summation of the individual components may not equal the total due to rounding. Period to period differences between line items included in the table may differ from the amount presented below due to rounding.
Consolidated Results
Consolidated net sales for fiscal 2026 were $652 million, 6% higher than the prior-year sales of $617 million. The effect of the weakening U.S. dollar on foreign currency rates compared to the prior-year period favorably impacted sales by $13 million, or 2%. This resulted in organic consolidated sales growth of approximately 4% in the year. Management refers to sales adjusted to exclude the impact of foreign currency changes and recent acquisitions and divestitures as “organic sales”. Product sales increased 9% to $546 million, compared to the prior fiscal year. Foreign currency rate changes favorably impacted product sales by $10 million, or 2%, resulting in organic product sales growth of 7%. This increase in organic product sales was primarily due to growth in the Americas region and the Cortland Biomedical business. Service sales were $106 million, a decrease of 9% compared to the prior fiscal year. Foreign currency rate changes favorably impacted service sales by $3 million, or 3%, resulting in a 12% decrease in organic service sales compared to the prior fiscal year. The organic sales decrease in the service business was due to lower activity, primarily in the EMEA region.
Gross profit increased by $9 million as a result of higher net sales in the current year. As a percentage of sales, gross profit was approximately 49.2% in fiscal 2026 compared to 50.5% in fiscal 2025. The 130 basis point decrease was primarily attributable to lower activity levels in the service business and, to a lesser extent, product sales mix.
Operating profit decreased by $4 million to $129 million, or 20% of sales, in fiscal 2026. The decrease was primarily attributable to higher selling, general and administrative (“SG&A”) costs associated with the Company’s previously announced acquisition of SFE Group, higher incentive compensation and unfavorable foreign currency translation, partially offset by the flow through of gross profit on the incremental current year sales and lower restructuring costs.
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Segment Results
IT&S Segment
The IT&S segment is a global supplier of branded hydraulic and mechanical tools and services to a broad array of end markets, including general industrial; refining and petrochemical; industrial MRO; machining & manufacturing; power generation; infrastructure; mining; and other markets. Its primary products include branded tools, cylinders, pumps, hydraulic torque wrenches, highly engineered heavy lifting technology solutions and other tools (Product product line). The segment provides maintenance and manpower services to meet customer-specific needs and rental capabilities for certain of our products (Service & Rental product line). The following table sets forth the results of operations for the IT&S segment:
(dollars in millions) | Year Ended August 31, | ||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Net Sales: | |||||||||||||||||||||||
| Product | $ | 520 | $ | 479 | $ | 41 | 9 | % | |||||||||||||||
| Service & Rental | 106 | 117 | (11) | (9) | % | ||||||||||||||||||
| Total net sales | 626 | 596 | 30 | 5 | % | ||||||||||||||||||
| Cost of products sold | 318 | 295 | 23 | 8 | % | ||||||||||||||||||
| Gross profit | 308 | 301 | 7 | 2 | % | ||||||||||||||||||
| Selling, general and administrative expenses | 135 | 129 | 6 | 5 | % | ||||||||||||||||||
| Amortization of intangible assets | 6 | 5 | 1 | 20 | % | ||||||||||||||||||
| Restructuring charges | 3 | 3 | — | — | % | ||||||||||||||||||
| Operating Profit | $ | 163 | $ | 164 | $ | (1) | (1) | % | |||||||||||||||
| Operating Profit % | 26.1 | % | 27.5 | % | |||||||||||||||||||
Fiscal 2026 net sales were $626 million, an increase of $30 million, or 5% from fiscal 2025 sales of $596 million. The effect of the weakening U.S. dollar on foreign currency rates compared to the prior-year period favorably impacted net sales by $13 million, resulting in organic sales growth for the segment of approximately 3%. The organic sales increase was driven by growth in our product sales, partially offset by a decline in our Service & Rental sales.
Product sales increased $41 million, or 9%, year-over-year with a favorable foreign currency impact of $10 million or 2%, resulting in organic product sales growth of 7%. Organic sales increased primarily due to higher sales in all regions, led by the Americas.
Service & Rental sales decreased $11 million, or 9%, year-over-year with a favorable foreign currency impact of $3 million, or 3%, resulting in organic Service & Rental sales decline of 12%. The organic sales were driven by lower activity levels, primarily in the EMEA region.
Fiscal 2026 operating profit of $163 million remained relatively flat to the prior year. This was driven by the gross profit flow-through impact of the increased sales, but offset by higher SG&A and amortization costs. Gross profit increased by $7 million as favorable impact from the higher product sales was partially offset by the impact from the decrease in Service & Rental sales, which has a higher fixed cost base. SG&A expense increased by $6 million as a result of higher employee-related costs, including incentive compensation and commissions, as well as an increase in advertising expense. Amortization expense increased by approximately $1 million, while restructuring charges were consistent with the prior year. As a percent of net sales, operating profit decreased 140 basis points primarily due to the lower activity in the Service & Rental business and to a lesser extent product sales mix.
Corporate
(dollars in millions) | Year Ended August 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| Selling, general and administrative expenses | $ | 41 | $ | 33 | |||||||
| Restructuring charges | — | 3 | |||||||||
| Total | $ | 41 | $ | 36 | |||||||
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Corporate primarily consists of SG&A expenses and enterprise-wide restructuring costs, including executive, legal, finance, human resources, and information technology, that are not allocated to the segments based on their nature. Corporate expenses were $41 million in fiscal 2026, an increase of $5 million compared to fiscal 2025 expenses. This increase was primarily attributable to $5 million in incremental SG&A expenses associated with M&A activities related to the acquisition of SFE Group and higher employee-related SG&A costs, including incentive compensation. These increases were partially offset by the impact of higher restructuring costs in the prior year.
Net financing costs were $9 million and $10 million in fiscal 2026 and fiscal 2025, respectively. The decrease in net financing costs for fiscal 2026 compared to fiscal 2025 was primarily due to lower net debt balances and lower net interest rates.
Income Tax Expense
The Company's income tax expense is impacted by a number of factors, including, among others, the amount of taxable earnings generated in foreign jurisdictions with tax rates that are different than the U.S. federal statutory rate, permanent items, state tax rates, changes in tax laws, acquisitions and divestitures and the ability to utilize various tax credits and net operating loss carryforwards. Income tax expense also includes the impact of provision to tax return adjustments, changes in valuation allowances and reserve requirements for unrecognized tax benefits. Pre-tax earnings, income tax expense and effective income tax rate from continuing operations for the past two fiscal years were as follows:
| (dollars in millions) | Year Ended August 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| Earnings before income tax expense | $ | 118 | $ | 121 | |||||||
| Income tax expense | 28 | 28 | |||||||||
| Effective income tax rate | 23.7 | % | 23.2 | % | |||||||
The fiscal 2026 and fiscal 2025 effective tax rates were 23.7% and 23.2%, respectively. The fiscal 2026 effective tax rate was slightly higher than the statutory 21% primarily as a result of state income taxes and taxes in foreign jurisdictions with rates higher than the U.S. which were partially offset by one-time tax benefits related to the lapse of the statute of limitations on uncertain tax positions, tax benefits related to stock compensation, and global tax planning initiatives that will not repeat in future periods due to certain tax attributes that are no longer available. Both the fiscal 2026 and fiscal 2025 income tax provisions were impacted by the mix of earnings in foreign jurisdictions with income tax rates different than the U.S. federal income tax rate and income tax benefits from global tax planning initiatives.
On July 4, 2025, H.R. 1, “An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14”, commonly referred to as the “One Big Beautiful Bill Act,” was enacted in the United States. The Company has evaluated the impact of the guidance provided to date and determined that it did not have a material impact on the fiscal 2026 consolidated financial statements.
Liquidity and Capital Resources
At August 31, 2026, cash and cash equivalents were $175 million, comprised of $135 million of cash held by foreign subsidiaries and $40 million held domestically. The following table summarizes the cash flow attributable to operating, investing and financing activities:
| (in millions) | Year Ended August 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| Cash provided by operating activities | $ | 130 | $ | 111 | |||||||
| Cash (used in) investing activities | (13) | (46) | |||||||||
| Cash used in financing activities | (95) | (81) | |||||||||
| Effect of exchange rate changes on cash | 1 | 1 | |||||||||
| Net increase (decrease) from cash and cash equivalents | $ | 23 | $ | (15) | |||||||
Cash flow provided by operations was $130 million for fiscal 2026 and $111 million for fiscal 2025. The $19 million increase in cash flow from operations was primarily the result of changes in working capital, in particular the lower inventory balance for fiscal 2026. Net cash used in investing activities was $13 million which is a $33 million decrease in cash used compared to the prior fiscal year. The decreased use of cash was due to the relatively lower cash outflow in fiscal 2026 compared to fiscal 2025, which included the payment of $27 million for the acquisition of DTA The Smart Move, S.A. (“DTA”) and increased capital expenditures relating to build-out costs for the Company's new headquarters location in
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Milwaukee, Wisconsin. Cash used in financing activities increased to $95 million for fiscal 2026 compared to $81 million for fiscal 2025. The $14 million increase is primarily driven by increased share repurchases.
During fiscal 2023, the Company refinanced its credit facility resulting in an updated senior credit facility (the “Senior Credit Facility”) of $600 million, comprised of a $400 million revolving line of credit and a $200 million term loan, which was scheduled to mature in September 2027. On July 7, 2026, the Company entered into an agreement to amend the Senior Credit Facility to increase the revolving credit facility thereunder from $400 million to $625 million. The Senior Credit Facility contains restrictive covenants and financial covenants. See Note 8, “Debt” in the notes to the consolidated financial statements for further details of the Senior Credit Facility. The Company was in compliance with all covenants, including the financial covenants, under the Senior Credit Facility at August 31, 2026. The unused credit line and amount available for borrowing under the revolving line of credit of the Senior Credit Facility, as amended, was $625 million at August 31, 2026.
On October 16, 2026, the Company refinanced its credit facility resulting in a new $850 million senior credit facility (the “New Senior Credit Facility”), comprised of a $550 million revolving line of credit and a $300 million term loan, which will mature in October 2031. See Note 18, “Subsequent Events” in the notes to the consolidated financial statements for further details.
We believe that the revolving credit facility under the New Senior Credit Facility, combined with our existing cash on hand and anticipated operating cash flows, will be adequate to meet operating, debt service, acquisition and capital expenditure funding requirements for the foreseeable future.
Primary Working Capital Management
We use primary working capital as a percentage of sales as a key metric for working capital efficiency. We define this metric as the sum of net accounts receivable and net inventory less accounts payable, divided by the past three months' sales annualized. The following table shows the components of our primary working capital:
| August 31, 2026 | August 31, 2025 | ||||||||||||||||||||||
| (dollars in millions) | $ | PWC % | $ | PWC % | |||||||||||||||||||
| Accounts receivable, net | $ | 113 | 15 | % | $ | 106 | 16 | % | |||||||||||||||
| Inventory, net | 71 | 10 | % | 79 | 12 | % | |||||||||||||||||
| Accounts payable | (43) | (6) | % | (43) | (6) | % | |||||||||||||||||
| Net primary working capital | $ | 141 | 19 | % | $ | 142 | 21 | % | |||||||||||||||
Total primary working capital was $141 million at August 31, 2026, which decreased from $142 million at August 31, 2025. Additional sales in Q4 of fiscal 2026 resulted in an increase in accounts receivable and a decrease in inventory at August 31, 2026 compared to the prior year.
Capital Expenditures
The majority of our manufacturing activities consist of assembly operations. We believe that our capital expenditure requirements are not as extensive as other industrial companies given the nature of our operations. Capital expenditures associated with continuing operations were $11 million and $19 million in fiscal 2026 and 2025, respectively. The decrease during fiscal 2026 is primarily related to a reduction in capital expenditures at the corporate segment compared to fiscal 2025, when additional expenditures occurred related to the build-out of the Company's new headquarters location in Milwaukee, Wisconsin.
Commitments and Contingencies
Given our desire to allocate cash flow and revolver availability to fund growth initiatives, we have historically leased most of our facilities and some operating equipment. We lease certain facilities, computers, equipment and vehicles under various operating lease agreements, generally over periods ranging from one to twenty years. Under most arrangements, we pay the property taxes, insurance, maintenance and expenses related to the leased property. Many of our leases include provisions that enable us to renew the leases at contractually agreed rates or, less commonly, based upon market rental rates on the date of expiration of the initial leases.
We had outstanding commercial letters of credit of $4 million and surety bonds of $3 million at August 31, 2026, while we had $6 million of outstanding letters of credit and $5 million of surety bonds at August 31, 2025. Most of these instruments relate to commercial contracts and self-insured workers’ compensation programs.
Additional detail regarding contingencies is included in Note 17, “Commitments and Contingencies” in the notes to the consolidated financial statements, which is incorporated by reference.
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Contractual Obligations
Our predominant sources of contractual obligations include the payment of interest and principal on our outstanding line of credit, our operating lease portfolio, certain employee-related benefit plans and agreements with certain suppliers related to the procurement of inventory.
The timing of principal payments associated with our revolving line of credit is disclosed in Note 8, “Debt” in the notes to the consolidated financial statements. We pay interest monthly based on prevailing interest rates at the time and the balance outstanding on our revolving line of credit.
Our lease contracts are primarily for real estate, vehicles, and manufacturing equipment. See Note 11, “Leases” in the notes to the consolidated financial statements for future minimum lease payments associated with our lease portfolio.
We have long-term obligations related to our deferred compensation, pension and postretirement plans that are summarized in Note 12, “Employee Benefit Plans” in the notes to the consolidated financial statements.
As part of our global sourcing strategy, we have entered into agreements with certain suppliers that require the supplier to maintain minimum levels of inventory to support certain products for which we require a short lead time to fulfill customer orders. We have the ability to notify the supplier that they no longer need to maintain the minimum level of inventory should we discontinue manufacturing a product during the contract period; however, we must purchase the remaining minimum inventory levels the supplier was required to maintain within a defined period of time. These contracts allow for us to terminate with appropriate notice so long as we utilize the remaining inventory on hand at the supplier and there are no overall minimum volumes in these contracts other than what the supplier is required to maintain on hand at any given point in time.
Critical Accounting Estimates
We prepare our consolidated financial statements in conformity with US GAAP. This requires management to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ from those estimates. The following estimates are considered by management to be the most critical in understanding judgments involved in the preparation of our consolidated financial statements and uncertainties that could impact our results of operations, financial position and cash flow.
Accounts receivable, net: Accounts receivable, net is recorded based on the contractual value of our accounts receivable, net of an estimated allowance for credit losses representing management’s best estimate of the amount of receivables that are not probable of collection. Accounts receivable, net was $113 million as of August 31, 2026, which is net of a $3 million allowance for credit losses. Our customer base generally consists of financially reputable distributors, agents, OEMs, and other customers with whom we have long standing relationships, and historically we have not experienced significant bad debt expense as a percentage of our annual net sales (bad debt expense as a percentage of net sales was less than 0.5% for each of the years ended August 31, 2026, 2025, and 2024).
Inventories: Inventory cost is determined using the last-in, first-out (“LIFO”) method for a portion of U.S. owned inventory (approximately 47% of total inventories at both August 31, 2026 and 2025). If the LIFO method were not used, inventory balances would be higher than amounts presented in the Consolidated Balance Sheet by $17 million and $18 million at August 31, 2026 and 2025, respectively. We perform an analysis on historical sales usage of individual inventory items on hand and record a reserve to adjust inventory cost to net realizable value, if necessary. The inventory valuation assumptions used are based on historical experience. We believe that such estimates are made based on consistent and appropriate methods; however, actual results may differ from these estimates under different assumptions or conditions.
Goodwill and Indefinite-lived intangibles: Goodwill, trademarks and certain tradenames have indefinite lives and are not amortized. However, goodwill and intangible assets are tested annually for impairment, and may be tested more frequently if any triggering events occur that would reduce the recoverability of the asset. In conducting the annual impairment test for goodwill, we have the option to first assess qualitative factors to determine whether it is more likely than not (greater than 50% likelihood) the fair value of any reporting unit is less than its carrying amount. If a qualitative assessment determines an impairment is more likely than not, we are required to perform a quantitative impairment test. Otherwise, no further analysis is required. Alternatively, we may elect to proceed directly to the quantitative impairment test.
In conducting a quantitative assessment for goodwill, we generally use a discounted cash flow model, which calculates fair value as the sum of the projected discounted cash flows over a discrete six-year period plus an estimated terminal value. Significant assumptions include forecasted revenues, operating profit margins, and discount rates applied to the future cash flows based on the respective reporting unit's estimated weighted average cost of capital. In certain circumstances, we also may review a market approach in which a trading multiple is applied to either forecasted EBITDA (earnings before interest, income taxes, depreciation and amortization) or anticipated proceeds of the reporting unit to arrive at the estimated fair value. If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded. We perform our goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. If the carrying amount exceeds the fair value of the
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reporting unit, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit's fair value up to the amount of the recorded goodwill.
During 2026 and 2025 management performed a qualitative assessment over goodwill and indefinite-lived intangibles and determined quantitative testing was not necessary.
As such, no impairment charges were recorded during the years ended August 31, 2026 or 2025.
A considerable amount of management judgment is required in performing impairment tests, principally in determining the fair value of each reporting unit and the indefinite-lived intangible assets. While we believe our judgments and assumptions are reasonable, different assumptions could change the estimated fair values and, therefore, future additional impairment charges could be required. Prolonged weakening industry or economic trends, disruptions to our business, loss of significant customers, inability to effectively integrate acquired businesses, unexpected significant changes or planned changes in the use of the assets or in entity structure and divestitures may adversely impact the assumptions used in the valuations and ultimately result in future impairment charges.
Business Combinations and Purchase Accounting: Business combinations are accounted for using the acquisition method of accounting, and accordingly, the assets and liabilities of the acquired business are recorded at their respective fair values. The excess of the purchase price over the estimated fair value is recorded as goodwill. Assigning fair market values to the assets acquired and liabilities assumed at the date of an acquisition requires knowledge of current market values and the values of assets in use, and often requires the application of judgment regarding estimates and assumptions. While the ultimate responsibility resides with management, for certain acquisitions we retain the services of certified valuation specialists to assist with assigning estimated values to certain acquired assets, including intangible assets and tangible long-lived assets, and assumed liabilities including earn-out obligations. Acquired intangible assets, excluding goodwill, are valued using discounted cash flow methodology based on future cash flows specific to the type of intangible asset purchased.
In fiscal 2025, the Company acquired all of the assets and assumed certain liabilities of DTA for an initial purchase price of $26.7 million plus potential earn-out of €12.0 million to be paid at the end of the third year following the acquisition that is contingent upon the achievement of certain financial objectives. The Company is required to remeasure the fair value of this contingent consideration at each reporting date, with changes in fair value recognized in earnings. The Company used the Black-Scholes model to determine the fair value remeasurement of the potential earn-out payment. The significant assumptions used to remeasure the value of the potential earn-out included the forecasted gross profit and the discount rate. These significant assumptions are forward looking and could be affected by future economic and market conditions.
Defined Benefit Plans: We provide a variety of benefits to employees and former employees including, in some cases, pensions and postretirement health care. Plan assets and obligations are recorded based on an August 31 measurement date utilizing various actuarial assumptions such as discount rates, assumed rates of return on plan assets and health care cost trend rates. We determine the discount rate assumptions by referencing high-quality, long-term bond rates that are matched to the duration of our benefit obligations, with appropriate consideration of local market factors, participant demographics and benefit payment forecasts. At August 31, 2026 and 2025, the discount rates on domestic benefit plans were 5.7% and 5.2%, respectively. In estimating the expected return on plan assets, we consider historical returns, forward-looking considerations, inflation assumptions and the asset-allocation strategy in investing such assets. Domestic benefit plan assets consist primarily of participating units in mutual funds with equity-based strategies, mutual funds with fixed income-based strategies, and U.S. treasury securities. The expected return on domestic benefit plan assets was 6.4% for each of the fiscal years ended August 31, 2026 and 2025. A 25 basis point change in the assumptions for the discount rate or expected return on plan assets would not have materially changed the fiscal 2026 domestic benefit plan expense.
We review actuarial assumptions on an annual basis and make modifications based on current rates and trends, when appropriate. As required by US GAAP, the effects of any modifications are recorded currently or amortized over future periods. Based on information provided by independent actuaries and other relevant sources, we believe that the assumptions used are reasonable; however, changes in these assumptions could impact our financial position, results of operations or cash flow. See Note 12, “Employee Benefit Plans” in the notes to the consolidated financial statements for further discussion.
Income Taxes: Judgment is required to determine the annual effective income tax rate, deferred tax assets and liabilities, reserves for unrecognized tax benefits and any valuation allowances recorded against net deferred tax assets. Our effective income tax rate is based on annual income, statutory tax rates, tax planning opportunities available in the various jurisdictions in which we operate and other adjustments. Our annual effective income tax rate includes the impact of discrete income tax matters including adjustments to reserves for uncertain tax positions and the benefits of various income tax planning activities. Tax regulations require items to be included in our tax returns at different times than these same items are reflected in our consolidated financial statements. As a result, the effective income tax rate in our consolidated financial statements differs from that reported in our tax returns. Some of these differences are permanent, such as expenses that are not tax deductible, while others are temporary differences, such as amortization and depreciation expenses.
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Temporary differences create deferred tax assets and liabilities, which are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We establish valuation allowances for our deferred tax assets when the amount of expected future taxable income is not large enough to utilize the entire deduction or credit. Relevant factors in determining the realizability of deferred tax assets include future taxable income, the expected timing of the reversal of temporary differences, tax planning strategies and the expiration dates of the various tax attributes.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The diverse nature of our business activities necessitates the management of various financial and market risks, including those related to changes in interest rates, foreign currency exchange rates and commodity costs.
Interest Rate Risk—As of August 31, 2026, long-term debt consisted of no borrowings under the revolving line of credit (variable rate debt) and $183 million of term-loan debt bearing interest based on SOFR (variable rate). An interest-rate swap effectively converts the SOFR-based rate of $90 million of term borrowings under our credit facility to a fixed rate. A ten percent increase in the average costs of our variable-rate debt would have resulted in a $1 million increase in financing costs for the fiscal year ended August 31, 2026.
Foreign Currency Risk—We maintain operations in the U.S. and various foreign countries. Our more significant non-U.S. operations are located in Australia, the Netherlands, the United Kingdom, Spain, Saudi Arabia and China, and we have foreign currency risk relating to receipts from customers, payments to suppliers and intercompany transactions denominated in foreign currencies. Under certain conditions, we enter into hedging transactions (primarily foreign currency exchange contracts) that enable us to mitigate the potential adverse impact of foreign currency exchange rate risk (see Note 10, “Derivatives” in the notes to the consolidated financial statements for further information). We do not engage in trading or other speculative activities with these transactions, as established policies require that these hedging transactions relate to specific currency exposures.
The strengthening of the U.S. dollar can have an unfavorable impact on our results of operations and financial position as foreign denominated operating results are translated into U.S. dollars. To illustrate the potential impact of changes in foreign currency exchange rates on the translation of our results of operations, annual sales and operating profit were remeasured assuming a ten percent reduction in foreign exchange rates compared to the U.S. dollar. Under this assumption, annual sales would have been $30 million lower and operating profit would have been $4 million lower for the fiscal year ended August 31, 2026. This sensitivity analysis assumes that each exchange rate would change in the same direction relative to the U.S. dollar and excludes the potential effects that changes in foreign currency exchange rates may have on actual sales or price levels. Similarly, a ten percent decline in foreign currency exchange rates relative to the U.S. dollar on our August 31, 2026 financial position would result in a $38 million reduction to equity (accumulated other comprehensive loss), as a result of non-U.S. dollar denominated assets and liabilities being translated into U.S. dollars, our reporting currency.
Commodity Risk—We source a wide variety of materials and components from a network of global suppliers. While such materials are typically available from numerous suppliers, commodity raw materials, such as steel and plastic resin, are subject to price fluctuations which could have a negative impact on our results. We strive to timely pass along such commodity price increases to customers to avoid profit margin erosion.
27
Item 8. Financial Statements and Supplementary Data
| Page | |||||
| INDEX TO CONSOLIDATED FINANCIAL STATEMENTS | |||||
| INDEX TO FINANCIAL STATEMENT SCHEDULE | |||||
All other schedules are omitted because they are not applicable, not required or because the required information is included in the consolidated financial statements or notes thereto.
28
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Enerpac Tool Group Corp.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Enerpac Tool Group Corp. (the Company) as of August 31, 2026 and 2025, the related consolidated statements of earnings, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended August 31, 2026, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at August 31, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended August 31, 2026, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of August 31, 2026, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated October 29, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
29
| Remeasurement of the potential contingent earn-out related to the acquisition of DTA The Smart Move , S.A. | |||||
| Description of the Matter | As described in Note 5 to the consolidated financial statements, during the year ended August 31, 2025, the Company completed its acquisition of DTA The Smart Move, S.A. ("DTA") for consideration of $26.7 million, plus contingent consideration of up to €12.0 million. The contingent consideration is payable at the end of the third year following the acquisition and is based on the achievement of specified financial targets. The Company is required to remeasure the fair value of the contingent consideration at each reporting date, with changes in fair value recognized in earnings. Auditing the Company's remeasurement of the contingent earn-out was complex due to the significant estimation uncertainty in the Company’s determination of the fair value of the potential earn-out of €2.9 million. The significant estimation uncertainty of the remeasurement of the potential earn-out was primarily due to the sensitivity of the respective fair values to underlying assumptions about the business’ projected achievement of certain financial objectives. The Company used the Black-Scholes model to determine the fair value remeasurement of the potential earn-out payment. The significant assumptions used to remeasure the value of the potential earn-out included the forecasted gross profit and the discount rate. These significant assumptions are forward looking and could be affected by future economic and market conditions. | ||||
| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s accounting for the remeasurement of the potential earn-out. For example, our tests included controls over the remeasurement process supporting the recognition and measurement of the potential earn-out. We also tested management’s review of the valuation model and significant assumptions used in the valuation. To test the fair value remeasurement of the potential earn-out, we performed audit procedures that included, among others, evaluating the Company's selection of the valuation methodology, evaluating the methods and significant assumptions used by management, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. We evaluated the methodology used by the Company and significant assumptions included in the fair value estimate and we evaluated the reasonableness of management’s forecasts of future cash flows by comparing the projections to historical results. | ||||
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2020.
October 29, 2026
30
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Enerpac Tool Group Corp.
Opinion on Internal Control Over Financial Reporting
We have audited Enerpac Tool Group Corp.’s internal control over financial reporting as of August 31, 2026, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Enerpac Tool Group Corp. (the Company) maintained, in all material respects, effective internal control over financial reporting as of August 31, 2026, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of August 31, 2026 and 2025, the related consolidated statements of earnings, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended August 31, 2026, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) and our report dated October 29, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Milwaukee, Wisconsin
October 29, 2026
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ENERPAC TOOL GROUP CORP.
CONSOLIDATED STATEMENTS OF EARNINGS
| (in millions, except per share amounts) | Year Ended August 31, | ||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Net sales | |||||||||||||||||
| Product | $ | $ | $ | ||||||||||||||
| Service & rental | |||||||||||||||||
| Total net sales | |||||||||||||||||
| Cost of products sold | |||||||||||||||||
| Product | |||||||||||||||||
| Service & rental | |||||||||||||||||
| Total cost of products sold | |||||||||||||||||
| Gross profit | |||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||
| Amortization of intangible assets | |||||||||||||||||
| Restructuring charges | |||||||||||||||||
| Impairment & divestiture charges | |||||||||||||||||
| Operating profit | |||||||||||||||||
| Financing costs, net | |||||||||||||||||
| Other expense, net | |||||||||||||||||
| Earnings before income tax expense | |||||||||||||||||
| Income tax expense | |||||||||||||||||
| Net earnings from continuing operations | |||||||||||||||||
| Earnings from discontinued operations, net of income taxes | |||||||||||||||||
| Net earnings | $ | $ | $ | ||||||||||||||
| Earnings per share from continuing operations | |||||||||||||||||
| Basic | $ | $ | $ | ||||||||||||||
| Diluted | $ | $ | $ | ||||||||||||||
| Earnings per share from discontinued operations | |||||||||||||||||
| Basic | $ | $ | $ | ||||||||||||||
| Diluted | $ | $ | $ | ||||||||||||||
| Earnings per share | |||||||||||||||||
| Basic | $ | $ | $ | ||||||||||||||
| Diluted | $ | $ | $ | ||||||||||||||
| Weighted average common shares outstanding | |||||||||||||||||
| Basic | |||||||||||||||||
| Diluted | |||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
32
ENERPAC TOOL GROUP CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| (in millions) | Year Ended August 31, | ||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Net earnings | $ | $ | $ | ||||||||||||||
| Other comprehensive income, net of tax | |||||||||||||||||
| Foreign currency translation adjustments | |||||||||||||||||
| Pension and other postretirement benefit plans | |||||||||||||||||
| Cash flow hedges | |||||||||||||||||
| Total other comprehensive income, net of tax | |||||||||||||||||
| Comprehensive income | $ | $ | $ | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
33
ENERPAC TOOL GROUP CORP.
CONSOLIDATED BALANCE SHEETS
| (in millions, except share and per share amounts) | August 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| A S S E T S | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable, net | |||||||||||
| Inventories, net | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets, net | |||||||||||
| Other long-term assets | |||||||||||
| Total assets | $ | $ | |||||||||
| L I A B I L I T I E S A N D S H A R E H O L D E R S’ E Q U I T Y | |||||||||||
| Current liabilities | |||||||||||
| Current maturities of long-term debt | $ | $ | |||||||||
| Trade accounts payable | |||||||||||
| Accrued compensation and benefits | |||||||||||
| Income taxes payable | |||||||||||
| Other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt, net | |||||||||||
| Deferred income taxes | |||||||||||
| Pension and postretirement benefit liabilities | |||||||||||
| Other long-term liabilities | |||||||||||
| Total liabilities | |||||||||||
| Shareholders’ equity | |||||||||||
| Class A common stock, $0.20 par value per share, authorized 168,000,000 shares, issued 51,185,430 and 52,946,336 shares, respectively | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Stock held in trust | ( | ( | |||||||||
| Deferred compensation liability | |||||||||||
| Total shareholders' equity | |||||||||||
| Total liabilities and shareholders' equity | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
34
ENERPAC TOOL GROUP CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| (in millions) | Year Ended August 31, | ||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Operating Activities | |||||||||||||||||
| Net earnings | $ | $ | $ | ||||||||||||||
| Less: Earnings from discontinued operations, net of income taxes | |||||||||||||||||
| Net earnings from continuing operations | |||||||||||||||||
| Adjustments to reconcile net earnings from continuing operations to net cash provided by operating activities - continuing operations: | |||||||||||||||||
| Impairment & divestiture charges | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Stock-based compensation expense | |||||||||||||||||
| Deferred income taxes | ( | ||||||||||||||||
| Amortization of debt issuance costs | |||||||||||||||||
| Provision for bad debts | |||||||||||||||||
| Other non-cash expenses | ( | ||||||||||||||||
| Changes in components of working capital and other, excluding acquisitions and divestitures: | |||||||||||||||||
| Accounts receivable | ( | ( | |||||||||||||||
| Inventories | ( | ||||||||||||||||
| Trade accounts payable | ( | ( | ( | ||||||||||||||
| Prepaid expenses and other assets | ( | ( | |||||||||||||||
| Income tax accounts | |||||||||||||||||
| Accrued compensation and benefits | ( | ||||||||||||||||
| Other accrued liabilities | ( | ||||||||||||||||
| Cash provided by operating activities - continuing operations | |||||||||||||||||
| Cash used in operating activities - discontinued operations | ( | ||||||||||||||||
| Cash provided by operating activities | |||||||||||||||||
| Investing Activities | |||||||||||||||||
| Capital expenditures | ( | ( | ( | ||||||||||||||
| Cash paid for business acquisitions, net of cash acquired | ( | ||||||||||||||||
| Purchase of business assets | ( | ( | |||||||||||||||
| Other | ( | ||||||||||||||||
| Cash used in investing activities | ( | ( | ( | ||||||||||||||
| Financing Activities | |||||||||||||||||
| Borrowings on revolving credit facility | |||||||||||||||||
| Principal repayments on revolving credit facility | ( | ( | ( | ||||||||||||||
| Principal repayments on term loan | ( | ( | ( | ||||||||||||||
| Purchase of treasury shares | ( | ( | ( | ||||||||||||||
| Stock options, taxes paid related to the net share settlement of equity awards and other | ( | ( | |||||||||||||||
| Payment of cash dividend | ( | ( | ( | ||||||||||||||
| Other | ( | ||||||||||||||||
| Cash used in financing activities | ( | ( | ( | ||||||||||||||
| Effect of exchange rate changes on cash | |||||||||||||||||
| Net increase (decrease) from cash and cash equivalents | ( | ||||||||||||||||
| Cash and cash equivalents - beginning of period | |||||||||||||||||
| Cash and cash equivalents - end of period | $ | $ | $ | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
35
ENERPAC TOOL GROUP CORP.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
| (in millions) | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Stock Held In Trust | Deferred Compensation Liability | Total Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
| Issued Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at August 31, 2023 | $ | $ | $ | ( | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Net earnings | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock contribution to employee benefit plans and other | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Vesting of equity awards | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Cash dividend ($0.04 per share) | — | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock based compensation expense | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock option exercises | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax effect related to net share settlement of equity awards | — | — | ( | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued to, acquired for and distributed from rabbi trust | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Treasury stock repurchased | — | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Treasury stock retired | ( | ( | — | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at August 31, 2024 | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net earnings | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock contribution to employee benefit plans and other | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Vesting of equity awards | ( | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash dividend ($0.04 per share) | — | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock based compensation expense | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock option exercises | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax effect related to net share settlement of equity awards | — | — | ( | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued to, acquired for and distributed from rabbi trust | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Treasury stock repurchased and retired | ( | ( | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance at August 31, 2025 | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net earnings | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock contribution to employee benefit plans and other | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Vesting of equity awards | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Cash dividend ($0.04 per share) | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock based compensation expense | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock option exercises | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax effect related to net share settlement of equity awards | — | — | ( | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued to, acquired for and distributed from rabbi trust | — | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Treasury stock repurchased and retired | ( | ( | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance at August 31, 2026 | $ | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
36
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting Policies
Nature of Operations: Enerpac Tool Group Corp. (the “Company”) is a premier industrial tools, services, technology and solutions company serving a broad and diverse set of customers in more than 100 countries. The Company has one reportable segment, Industrial Tools & Services (“IT&S”), and an Other operating segment, which does not meet the criteria to be considered a reportable segment. The IT&S segment is primarily engaged in the design, manufacture and distribution of branded hydraulic and mechanical tools and in providing services and tool rental to the refinery/petrochemical; general industrial; industrial MRO; machining & manufacturing; power generation; infrastructure; mining and other markets.
Cash Equivalents: The Company considers all highly liquid investments with original maturities of 90 days or less to be cash equivalents.
Inventories: Inventories are comprised of material, direct labor and manufacturing overhead. A portion of inventory is recorded on the first-in, first-out or average cost method and is stated at the lower of cost or net realizable value. A portion of U.S. owned inventory is determined using the last-in, first-out (“LIFO”) method (46.6 % and 47.3 % of total inventories as of August 31, 2026 and 2025, respectively). If the LIFO method were not used, inventory balances would be higher than reported amounts in the consolidated balance sheets by $17.0 million and $18.1 million at August 31, 2026 and 2025, respectively. During the fiscal year ended August 31, 2026, the Company experienced a liquidation of LIFO inventory layers, which resulted in a decrease in cost of goods sold and a corresponding increase in pre-tax income of approximately $1.7 million. This increase in income is attributable to the liquidation of inventory carried at lower historical costs.
The nature of the Company’s products is such that they generally have a very short production cycle. Consequently, the amount of work-in-process at any point in time is minimal. In addition, many parts or components are ultimately either sold individually or assembled with other parts making a distinction between raw materials and finished goods impractical to determine. Certain locations maintain and manage their inventories using a job cost system where the distinction of categories of inventory by state of completion is also not available. As a result of these factors, it is neither practical nor cost effective to segregate the amounts of raw materials, work-in-process or finished goods inventories at the respective balance sheet dates, as segregation would only be possible as the result of physical inventories which are taken at dates different from the balance sheet dates.
Property, Plant and Equipment: Property, plant and equipment are stated at cost. Plant and equipment are depreciated on a straight-line basis over the estimated useful lives of the assets, ranging from to forty years for buildings and improvements and to fifteen years for machinery and equipment. Equipment includes assets which are rented to customers of the IT&S segment. Leasehold improvements are amortized over the shorter of the life of the related asset or the term of the lease. Depreciation expense was $11.2 million, $10.1 million and $10.0 million for the years ended August 31, 2026, 2025 and 2024, respectively. The following is a summary of the Company's components of property, plant and equipment:
| August 31, | |||||||||||
| (in millions) | 2026 | 2025 | |||||||||
| Land, buildings and improvements | $ | $ | |||||||||
| Machinery and equipment | |||||||||||
| Gross property, plant and equipment | |||||||||||
| Less: Accumulated depreciation | ( | ( | |||||||||
| Property, plant and equipment, net | $ | $ | |||||||||
Leases: We determine if an arrangement contains a lease in whole or in part at the inception of the contract and identify classification of the lease as financing or operating. We account for the underlying operating lease asset at the individual lease level. Operating leases are recorded as operating lease right-of-use (“ROU”) assets in “Other long-term assets” and operating lease liabilities in “Other current liabilities” and “Other long-term liabilities” on the Consolidated Balance Sheets.
All leases greater than 12 months result in recognition of a ROU asset and a liability at the lease commencement date and are recorded at the present value of the future minimum lease payments over the lease term. The lease term is equal to the initial term at commencement plus any renewal or extension options that the Company is reasonably certain will be exercised. ROU
37
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
assets at the date of commencement are equal to the amount of the initial lease liability, the initial direct costs incurred by the Company and any prepaid lease payments less any incentives received. Lease expense for operating leases is recognized on a straight-line basis over the lease term or remaining useful life. As most of our leases do not provide the information required to determine the implicit rate, we utilize a consolidated group incremental borrowing rate for all leases as the Company has centralized treasury operations. The incremental borrowing rate is derived through a combination of inputs such as the Company's credit rating, impact of collaborated borrowing capabilities and lease term.
Leases with the duration of less than one-year are not recognized on the balance sheet and are expensed on a straight-line basis over the lease term. In addition, we do not separate lease components from non-lease components for all asset classes.
Goodwill and Other Intangible Assets: Goodwill and other intangible assets with indefinite lives are not subject to amortization, but are subject to annual impairment testing. Other intangible assets with definite lives, consisting primarily of purchased customer relationships, patents, trademarks and tradenames, are amortized over periods from one to twenty-five years.
The Company’s goodwill is tested for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that goodwill might be impaired. In conducting the annual impairment test for goodwill, the Company first assesses qualitative factors to determine whether it is more likely than not (greater than 50% likelihood) the fair value of any reporting unit is less than its carrying amount. If a qualitative assessment determines an impairment is more likely than not, we are required to perform a quantitative impairment test. Otherwise, no further analysis is required. Alternatively, we may elect to proceed directly to the quantitative impairment test. When a quantitative test is deemed necessary, the Company estimates fair value for its reporting units using a fair value method based on management’s judgments and assumptions. In estimating the fair value, the Company utilizes a discounted cash flow model, which is dependent on a number of assumptions, most significantly forecasted revenues and operating profit margins, and the weighted average cost of capital, or a market value approach if appropriate information is available as of the goodwill impairment assessment date. The estimated fair value of the reporting unit is compared to the carrying amount of the reporting unit, including goodwill. If the carrying value of the reporting unit exceeds its fair value, an impairment loss is recorded and should not exceed the total amount of goodwill allocated to the reporting unit. Indefinite-lived intangible assets are also subject to an annual impairment test. On an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired, the fair value of the indefinite-lived intangible assets are evaluated by the Company to determine if an impairment charge is required. A considerable amount of management judgment is required in performing impairment tests, principally in determining the fair value of each reporting unit and the indefinite-lived intangible assets.
Product Warranty Costs: The Company generally offers its customers an assurance warranty on products sold, although warranty periods may vary by product type and application. The reserve for future warranty claims, which is recorded within the “Other current liabilities” line on the Consolidated Balance Sheets, is based on historical claim rates and current warranty cost experience. The following is a roll-forward of the changes in product warranty reserves for fiscal 2026 and 2025:
| August 31, | |||||||||||
| (in millions) | 2026 | 2025 | |||||||||
| Beginning balance | $ | $ | |||||||||
| Provision for warranties | |||||||||||
| Warranty payments and costs incurred | ( | ( | |||||||||
| Warranty activity for acquired businesses | |||||||||||
| Impact of changes in foreign currency rates | |||||||||||
| Ending balance | $ | $ | |||||||||
Revenue from Contracts with Customers: The Company recognizes revenue when it satisfies a performance obligation in a contract by transferring control of a distinct good or service to a customer.
Under normal circumstances, the Company invoices the customer once transfer of control has occurred and has a right to payment. The typical payment terms vary based on the customer and the types of goods and services in the contract. The period of time between invoicing and when payment is due is not significant, as our standard payment terms are less than one year. Amounts billed and due from customers are classified as accounts receivables on the Consolidated Balance Sheets.
Customer sales are recorded net of allowances for returns and discounts, which are recognized as a deduction from sales at the time of sale. The Company commits to one-time or on-going trade discounts and promotions with customers that require the Company to estimate and accrue the ultimate costs of such programs. The Company generally does not require collateral or
38
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
other security for receivables and provides for an allowance for credit losses based on historical experience and a review of its existing receivables. Accounts receivable are stated net of an allowance for credit losses of $3.0 million and $3.8 million at August 31, 2026 and 2025, respectively. During fiscal 2025 the Company wrote off approximately $12.9 million in credit loss allowances related to charges that were incurred prior to fiscal 2023.
Tariff Refunds: Commencing in April 2025, the U.S. government implemented tariffs of at least 10% on goods imported from nearly all countries pursuant to the International Emergency Economic Powers Act (“IEEPA”). In February 2026, the U.S. Supreme Court ruled that these tariffs imposed under IEEPA were invalid. Subsequently, the U.S. Court of International Trade ruled that the collected tariffs in question must be refunded in accordance with the law. The U.S. government has appealed certain aspects of the Court of International Trade's orders relating to the refund of certain finally liquidated entries. U.S. Customs and Border Protection (“CBP”) has implemented the Consolidated Administration and Processing of Entries (“CAPE”) process to facilitate the submission and processing of valid requests for refunds of IEEPA duties. The Company has initiated the process of requesting refunds for IEEPA tariffs previously paid.
We applied the loss recovery model and determined the expected receipt of the refund of the previously paid IEEPA tariffs is probable. We estimate the amount of the probable refund to be $7.2 million, which was recorded in the year ended August 31, 2026 within “Other current assets” in the Consolidated Balance Sheets and as a reduction to “Cost of products sold” in the Consolidated Statements of Earnings. The net impact of IEEPA tariffs, inclusive of the refund, and the cash received from the refund process, were immaterial during the year ended August 31, 2026.
Shipping and Handling Costs: The Company records costs associated with shipping its products after control over a product has transferred to a customer and are accounted for as fulfillment costs. These costs are reported in the Consolidated Statements of Earnings in “Cost of products sold.”
Research and Development Costs: Research and development costs consist primarily of engineering and development resources and are expensed as incurred. Such costs incurred in the development of new products or significant improvements to existing products were $15.4 million, $14.5 million and $12.4 million in fiscal 2026, 2025 and 2024, respectively. The Company also incurs significant costs in connection with fulfilling custom orders and developing solutions for unique customer needs which are not included in these research and development expense totals.
Financing Costs: Financing costs represent interest expense, financing fees and amortization of debt issuance costs, net of interest income. Interest income was $1.9 million, $2.3 million and $2.5 million for fiscal 2026, 2025 and 2024, respectively.
Income Taxes: The provision for income taxes includes federal, state, local and non-U.S. taxes on income. Tax credits, primarily for non-U.S. earnings, are recognized as a reduction of the provision for income taxes in the year in which they are available for U.S. tax purposes. Deferred taxes are provided on temporary differences between assets and liabilities for financial and tax reporting purposes as measured by enacted tax rates expected to apply when temporary differences are settled or realized. Future tax benefits are recognized to the extent that realization of those benefits is considered to be more likely than not. A valuation allowance is established for deferred tax assets for which realization is not more likely than not of being realized. The Company's general policy is for non-U.S. subsidiary earnings to be indefinitely reinvested to the extent the remittance results in an incremental U.S. tax liability. However, the Company routinely analyzes the factors surrounding global cash needs and future cash utilization to determine if exceptions exist and establishes deferred tax liabilities for associated future tax costs. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense and treats any taxes due on future U.S. inclusions in taxable income under the Global Intangible Low-Taxed Income (“GILTI”) provision as a current period tax expense.
Foreign Currency Translation: The financial statements of the Company’s foreign operations are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and an appropriate weighted average exchange rate for each applicable period within the Consolidated Statements of Earnings. Translation adjustments are reflected in the Consolidated Balance Sheets and Consolidated Statements of Shareholders' Equity caption “Accumulated other comprehensive loss.”
39
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
Accumulated Other Comprehensive Loss: The following is a summary of the components included within accumulated other comprehensive loss:
| August 31, | |||||||||||
| (in millions) | 2026 | 2025 | |||||||||
| Foreign currency translation adjustments, net of tax | $ | $ | |||||||||
| Pension and other postretirement benefit plans, net of tax | |||||||||||
| Cash flow hedges, net of tax | ( | ||||||||||
| Accumulated other comprehensive loss | $ | $ | |||||||||
Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles in the United States (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The Company regularly evaluates the estimates and assumptions related to the allowance for credit losses, inventory valuation, warranty reserves, goodwill, intangible and long-lived asset valuations, employee benefit plan liabilities, over-time revenue recognition, income tax liabilities, deferred tax assets and related valuation allowances, uncertain tax positions, restructuring reserves, and litigation and other loss contingencies.
Recently Adopted Accounting Pronouncements
Effective August 31, 2026, the Company adopted Accounting Standards Update 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”) on a prospective basis. This ASU establishes new income tax disclosures to consistently categorize and provide greater disaggregation of information in the rate reconciliation, including dollar value and percentage impacts of each component of the reconciliation, as well as further disaggregates income taxes paid. This guidance is effective for fiscal years beginning after December 15, 2024, and interim periods thereafter. The adoption did not affect the Company’s financial position, results of operations or cash flows as the standard only impacts financial statement footnote disclosures (see Note 13, “Income Taxes” for further information).
Recently Issued Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2024-03 “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which is intended to improve disclosures about a public business entity's expenses, primarily through additional disaggregation of income statement expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. The Company is evaluating the impact of the adoption of ASU 2024-03 on the consolidated financial statements.
In September 2025, the FASB issued Accounting Standards Update 2025-06 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” (ASU 2025-06), which replaces the stage-based capitalization model for the treatment of development costs of internal-use software with a principles-based framework, reflecting modern software development practices. In addition, ASU 2025-06 requires companies to capitalize software costs once management authorizes and commits to funding with probable completion and use. This guidance will be effective for annual reporting periods beginning after December 15, 2027, and for interim periods within annual reporting periods within those annual reporting periods, and allows multiple transition methods, including retrospective, prospective, or modified prospective application, with early adoption permitted. The Company is evaluating the impact of the adoption of ASU 2025-06 on the consolidated financial statements.
In December 2025, the FASB issued Accounting Standards Update 2025-11, “Interim Reporting (Topic 270): Narrow-scope improvements” (ASU 2025-11). The amendments clarify the scope, form, and content of interim financial statement
40
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
disclosures and improve the navigability of Topic 270 without changing existing interim reporting requirements. The Company is currently evaluating the impact that the adoption of ASU 2025-11 will have on its condensed consolidated financial statements and related disclosures. ASU 2025-11 is effective for interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that the adoption of ASU 2025-11 will have on its interim financial reporting and related disclosures.
Note 2. Revenue from Contracts with Customers
Nature of Goods and Services
The Company generates its revenue under two principal activities, which are discussed below:
Product Sales: Sales of tools, heavy-lifting solutions, and rope solutions are recorded when control is transferred to the customer (i.e., performance obligation has been satisfied). For the majority of the Company’s product sales, revenue is recognized at a point in time when control of the product is transferred to the customer, which generally occurs when the product is shipped from the Company to the customer. For certain other products that are highly customized and have a limited alternative use, and for which the Company has an enforceable right of reimbursement for performance completed to date, revenue is recognized over time. We consider the input measure (efforts-expended or cost-to-cost) or output measure as a fair measure of progress for the recognition of over-time revenue associated with these custom products. For a majority of these customized products, machine hours and labor hours (efforts-expended measurement) are used as a measure of progress.
Service & Rental Sales: Service contracts consist of providing highly trained technicians to perform bolting, technical services, machining and joint-integrity work for our customers. These revenues are recognized over time as our customers simultaneously receive and consume the benefits provided by the Company. We consider the input measure (efforts-expended or cost-to-cost) or output measure as a fair measure of progress for the recognition of over-time revenue associated with service contracts. For a majority of the Company’s service contracts, labor hours (efforts-expended measurement) is used as the measure of progress when it is determined to be a better depiction of the transfer of control to the customer due to the timing and pattern of labor hours incurred. Revenue from rental contracts (less than one year and non-customized products) is generally recognized ratably over the contract term, depicting the customer’s consumption of the benefit related to the rental equipment.
Disaggregated Revenue and Performance Obligations
The Company disaggregates revenue from contracts with customers by reportable segment and product line and by the timing of when goods and services are transferred. See Note 16, “Business Segment, Geographic and Customer Information” for information regarding our revenue disaggregation by reportable segment and product line.
The following table presents information regarding revenues disaggregated by the timing of when goods and services are transferred:
| Year Ended August 31, | |||||||||||||||||
| (in millions) | 2026 | 2025 | 2024 | ||||||||||||||
| Revenues recognized at point in time | $ | $ | $ | ||||||||||||||
| Revenues recognized over time | |||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||
Contract Balances
The Company's contract assets and liabilities are recorded as follows:
| August 31, | |||||||||||
| (in millions) | 2026 | 2025 | |||||||||
| Accounts receivable, net | |||||||||||
| Contract assets, which are included in other current assets | |||||||||||
| Contract liabilities, which are included in other current liabilities | |||||||||||
Accounts Receivable: The Company performs its obligations under a contract with a customer by transferring goods or services in exchange for consideration from the customer. The Company typically invoices its customers as soon as control of an asset is transferred and a receivable for the Company is established. Accounts receivable, net is recorded at face amount of
41
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
customer receivables less an allowance for credit losses. The Company maintains an allowance for credit losses for expected losses as a result of customers’ inability to make required payments. Management evaluates the aging of customer receivable balances, the financial condition of its customers, historical trends and the time outstanding of specific balances to estimate the amount of receivables that will not be collected in the future and records the appropriate provision. The allowance for credit losses was $3.0 million and $3.8 million at August 31, 2026 and 2025, respectively.
Contract Assets: Contract assets relate to the Company’s rights to consideration for work completed but not billed as of the reporting date on contracts with customers. The contract assets are transferred to receivables when the rights become unconditional. The Company has contract assets on contracts that are generally long-term and have revenues that are recognized over time.
Contract Liabilities: As of August 31, 2026, the Company had certain contracts where there were unsatisfied performance obligations and the Company had received cash consideration from customers before the performance obligations were satisfied. The majority of these contracts relate to long-term customer contracts (project durations of greater than three months) and are recognized over time. The Company estimates that $4.9 million will be recognized in net sales from satisfying those performance obligations within the next twelve months.
Timing of Performance Obligations Satisfied at a Point in Time: The Company evaluates when the customer obtains control of the product based on shipping terms, as control will transfer, depending upon such terms, at different points between the Company's manufacturing facility or warehouse and the customer’s location. The Company considers control to have transferred upon shipment or delivery because (i) the Company has a present right to payment at that time; (ii) the legal title has been transferred to the customer; (iii) the Company has transferred physical possession of the product to the customer; and (iv) the customer has significant risks and rewards of ownership of the product.
Variable Consideration: The Company estimates whether it will be subject to variable consideration under the terms of the contract and includes its estimate of variable consideration in the transaction price based on the expected value method when it is deemed probable of being realized based on historical experience and trends. Types of variable consideration may include rebates, incentives and discounts, among others, which are recorded as a reduction to net sales at the time when control of a performance obligation is transferred to the customer.
Practical Expedients & Exemptions: The Company elected to expense the incremental cost to obtaining a contract when the amortization period for such contracts would be one year or less. The Company does not disclose the value of unperformed obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed.
Note 3. ASCEND Transformation Program
In March 2022, the Company announced the start of its ASCEND transformation program. ASCEND’s key initiatives included accelerating organic growth strategies, improving operational excellence and production efficiency by utilizing a Lean approach, and driving greater efficiency and productivity in selling, general and administrative (“SG&A”) expense by better leveraging resources to create a more efficient and agile organization.
The following summarizes ASCEND transformation charges:
| (in millions) | 2024 | Program to Completion | |||||||||
| ASCEND Expense recorded in Cost of products sold | $ | $ | |||||||||
| ASCEND Expense recorded in SG&A expenses | |||||||||||
| Total ASCEND Expense | |||||||||||
| Recorded with Restructuring charges | |||||||||||
| Total ASCEND Transformation Charges | $ | $ | |||||||||
The ASCEND program was completed as of August 31, 2024, with total program costs of $74.7 million, of which $18.6 million was restructuring charges. The restructuring charges incurred were predominately severance and other employee-related costs (see Note 4, “Restructuring Charges”).
42
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
Note 4. Restructuring Charges
The Company has undertaken or committed to various restructuring initiatives, including workforce reductions, leadership changes, plant consolidations to reduce manufacturing overhead, satellite office closures, the continued movement of production and product sourcing to low-cost alternatives and the centralization and standardization of certain administrative functions. Liabilities for severance are generally to be paid within twelve months, while future lease payments related to facilities vacated as a result of restructuring are to be paid over the underlying remaining lease terms.
On June 27, 2022, the Company approved a restructuring plan in connection with the initiatives identified as part of the ASCEND transformation program (see Note 3, “ASCEND Transformation Program”) to drive greater efficiency and productivity in global selling, general and administrative resources. The costs of this plan were predominately severance and other employee-related costs incurred as cash expenditures and impacting both IT&S and Corporate.
For the year ended August 31, 2024, the Company recorded $7.8 million, of restructuring charges associated with the ASCEND transformation program, inclusive of the Other Segment. No restructuring charges associated with the ASCEND transformation program were recorded for the year ended August 31, 2026 or 2025 as the ASCEND program ended at August 31, 2024, with a total restructuring charge of $18.6 million.
The following summarizes ASCEND restructuring reserve activity for the IT&S segment and Corporate:
| (in millions) | IT&S | Corporate | |||||||||
| Balance as of August 31, 2023 | $ | $ | |||||||||
| Restructuring charges | |||||||||||
| Cash payments | ( | ( | |||||||||
Other(1) | ( | ||||||||||
| Balance as of August 31, 2024 | |||||||||||
| Cash payments | ( | ( | |||||||||
| Balance as of August 31, 2025 | $ | $ | |||||||||
(1) Represents other non-cash items and impacts of changes in foreign currency rates.
During the third quarter of fiscal 2025, in light of the soft market conditions and as another step towards increasing efficiency of its selling, general and administrative spend, the Company incurred restructuring costs of $5.9 million, of which approximately three quarters was related to personnel actions and the remainder were charges associated with the Company's former headquarters location (the “FY25 Restructuring Plan”).
The following summarizes FY25 Restructuring Plan restructuring reserve activity for the IT&S segment and Corporate:
| (in millions) | IT&S | Corporate | |||||||||
| Balance as of August 31, 2024 | $ | $ | |||||||||
| Restructuring charges | |||||||||||
| Cash payments | ( | ||||||||||
Other(1) | ( | ||||||||||
| Balance as of August 31, 2025 | |||||||||||
| Restructuring charges | |||||||||||
| Cash payments | ( | ( | |||||||||
Other(1) | |||||||||||
| Balance as of August 31, 2026 | $ | $ | |||||||||
(1) Represents other non-cash items and impacts of changes in foreign currency rates.
In the second quarter of fiscal 2026, the Company announced a new restructuring plan rightsizing our Hydratight service operation in the IT&S segment and reducing headcount in the segment to align with current market conditions, primarily in the EMEA Region (the “FY26 Restructuring Plan”). The restructuring is also designed to support our strategic transition of the IT&S segment toward a higher margin service business and growth objectives. In connection with the announcement of this plan, the Company recorded $3.3 million of restructuring costs in the year ended August 31, 2026.
43
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
The following summarized reserve activity related to the FY26 Restructuring Plan for the IT&S segment:
| (in millions) | IT&S | ||||
| Balance as of August 31, 2025 | $ | ||||
| Restructuring charges | |||||
| Cash payments | ( | ||||
Other(1) | ( | ||||
| Balance as of August 31, 2026 | $ | ||||
(1) Represents other non-cash items and impacts of changes in foreign currency rates.
Note 5. Acquisitions
On September 4, 2024 , the Company acquired 100% of the stock of DTA The Smart Move, S.A. (“DTA”), a global leader in the industrial heavy loads transportation industry, designing and manufacturing mobile robotic solutions. The acquisition provides a complement to Enerpac's Heavy Lifting Technology product line and combines the Company's existing focus on vertical lift with DTA's specialization in horizontal movement enabling the Company to provide more comprehensive solutions for customers. The Company acquired all of the assets and assumed certain liabilities of DTA for an initial purchase price of $26.7 million plus potential earn-out of €12.0 million to be paid at the end of the third year following the acquisition that is contingent upon the achievement of certain financial objectives. The Company finalized the fair value of assets and liabilities acquired as of August 31, 2025. There were no material adjustments to the preliminary fair value allocation upon finalization.
Management has estimated the fair value of the earn-out liability to be €2.9 million and €2.5 million as of August 31, 2026 and 2025, respectively. The contingent consideration is payable at the end of the third year following the acquisition and is based on the achievement of specified financial targets. The Company is required to remeasure the fair value of the contingent consideration at each reporting date, with changes in fair value recognized in earnings. The Company used the Black-Scholes model to determine the fair value remeasurement of the potential earn-out payment. The significant assumptions used to remeasure the value of the potential earn-out included the forecasted gross profit and the discount rate. These significant assumptions are forward-looking and could be affected by future economic and market conditions.
See Note 18, “Subsequent Events” for further information on the Company's acquisition of Specialized Fabrication Equipment Group LLC.
Note 6. Discontinued Operations and Other Divestiture Activities
Discontinued Operations
On October 31, 2019 , as part of our overall strategy to become a pure-play industrial tools and services company, the Company completed the sale of the businesses comprising its former EC&S segment. This divestiture was considered part of our strategic shift to become a pure-play industrial tools and services company, and therefore, the results of operations are recorded as a component of “Earnings (loss) from discontinued operations, net of income taxes” in the Consolidated Statements of Earnings for all periods presented. All discontinued operations activity included within the Consolidated Statements of Earnings and the Consolidated Statements of Cash Flows for the periods presented relate to impacts from certain retained liabilities.
44
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
The following represents the detail of “Earnings from discontinued operations, net of income taxes” within the Consolidated Statements of Earnings:
| (in millions) | Year Ended August 31, | ||||||||||
| 2024 | |||||||||||
| Selling, general and administrative (benefit) | $ | ( | |||||||||
| Impairment & divestiture charges | |||||||||||
| Operating income | |||||||||||
| Other income, net | |||||||||||
| Earnings before income tax expense | |||||||||||
| Income tax expense | |||||||||||
| Earnings from discontinued operations, net of income taxes | $ | ||||||||||
Note 7. Goodwill, Intangible Assets and Long-Lived Assets
Changes in the gross carrying value of goodwill and intangible assets result from changes in foreign currency exchange rates, business acquisitions, divestitures and impairment charges. The changes in the carrying amount of goodwill for the years ended August 31, 2026 and 2025 by operating segment are as follows:
| (in millions) | IT&S | Other | Total | ||||||||||||||
| Balance as of August 31, 2024 | $ | $ | $ | ||||||||||||||
| DTA Acquisition | |||||||||||||||||
| Impact of changes in foreign currency rates | |||||||||||||||||
| Balance as of August 31, 2025 | |||||||||||||||||
| Impact of changes in foreign currency rates | ( | ( | |||||||||||||||
| Balance as of August 31, 2026 | $ | $ | $ | ||||||||||||||
The gross carrying value and accumulated amortization of the Company’s intangible assets are as follows:
| Weighted Average Amortization Period (Year) | August 31, 2026 | August 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Gross | Accumulated Amortization | Net Book Value | Gross | Accumulated Amortization | Net Book Value | ||||||||||||||||||||||||||||||||||||||
| Amortizable intangible assets: | ||||||||||||||||||||||||||||||||||||||||||||
| Customer relationships | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Patents | ||||||||||||||||||||||||||||||||||||||||||||
| Developed Technology | ||||||||||||||||||||||||||||||||||||||||||||
| Trademarks and tradenames | ||||||||||||||||||||||||||||||||||||||||||||
| Indefinite lived intangible assets: | ||||||||||||||||||||||||||||||||||||||||||||
| Tradenames | N/A | |||||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
The Company estimates amortization expense for future years to be: $6.0 million in fiscal 2027, $3.9 million in fiscal 2028, $3.7 million in fiscal 2029, $2.9 million in fiscal 2030, $2.3 million in fiscal 2031, and $2.6 million in aggregate thereafter. The future amortization expense amounts represent estimates and may be impacted by future acquisitions, divestitures or changes in foreign currency exchange rates, among other causes.
In conjunction with our annual goodwill impairment assessment, the Company did not record any charges in fiscal 2026 or 2025.
45
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
Note 8. Debt
The following is a summary of the Company’s indebtedness:
| August 31, | |||||||||||
| (in millions) | 2026 | 2025 | |||||||||
| Senior Credit Facility | |||||||||||
| Revolver | |||||||||||
| Term Loan | |||||||||||
| Total Senior Indebtedness | |||||||||||
| Less: Current maturities of long-term debt | ( | ( | |||||||||
| Debt issuance costs | ( | ( | |||||||||
| Total long-term debt, less current maturities | $ | $ | |||||||||
Senior Credit Facility
On September 9, 2022, the Company refinanced its previous senior credit facility with a $600 million senior credit facility, comprised of a $400 million revolving line of credit and a $200 million term loan, which was scheduled to mature in September 2027. The Company had the option to request up to $300 million of additional revolving commitments and/or term loans under this facility, subject to customary conditions, including the commitment of the participating lenders. This facility uses adjusted term SOFR as the interest rate benchmark and provides for interest rate margins above adjusted term SOFR ranging from % to % per annum depending on the Company’s net leverage ratio. In addition, a non-use fee is payable quarterly on the average unused amount of the revolving line of credit ranging from 0.15 % to 0.3 % per annum, based on the Company's net leverage. At August 31, 2026, the interest rate on the borrowings under the senior credit facility was adjusted term SOFR plus % per annum.
On July 7, 2026, pursuant to the provision of the senior credit facility permitting additional revolving commitments and/or term loans, the Company entered into an amendment to the agreement governing the senior credit facility to increase the revolving credit facility thereunder from $400 million to $625 million.
The facility contains financial covenants requiring the Company to not permit (i) the net leverage ratio, determined as of the end of each of its fiscal quarters, to exceed 3.75 to 1.00 (or, at the Company’s election and subject to certain conditions, 4.25 to 1.00 for the covenants period during which certain material acquisitions occur and the next succeeding four testing periods) or (ii) the interest coverage ratio, determined as of the end of each of its fiscal quarters, to be less than 3.00 to 1.00 . Borrowings under the facility are secured by substantially all personal property assets of the Company and its domestic subsidiary guarantors (other than certain specified excluded assets) and equity interests of certain subsidiaries of the Company. The Company was in compliance with all covenants under the credit facility at August 31, 2026.
At August 31, 2026, there were $182.5 million in borrowings outstanding under the term loans, no borrowings outstanding under the revolving line of credit and $625.0 million available for borrowing under the revolving line of credit facility.
On October 16, 2026 , the Company refinanced its senior credit facility resulting in a new $850 million senior credit facility, comprised of a $550 million revolving line of credit and a $300 million term loan, which will mature in October 2031. See Note 18, “Subsequent Events” in the notes to the consolidated financial statements for further details.
Cash Paid for Interest
Note 9. Fair Value Measurements
The Company assesses the inputs used to measure the fair value of financial assets and liabilities using a three-tier hierarchy. Level 1 inputs include unadjusted quoted prices for identical instruments and are the most observable. Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, foreign currency exchange rates, commodity rates and yield curves. Level 3 inputs are not observable in the market and include management’s own judgments about the assumptions market participants would use in pricing an asset or liability.
46
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
The fair value of the Company’s cash and cash equivalents, accounts receivable, accounts payable and variable rate long-term debt approximated book value at both August 31, 2026 and 2025 due to their short-term nature and the fact that the interest rates approximated market rates. Foreign currency exchange contracts and interest rate swaps are recorded at fair value. The fair value of the Company's foreign currency exchange contracts was a net liability of $0.1 million and a net asset of less than $0.1 million at August 31, 2026 and 2025, respectively.
Note 10. Derivatives
All derivatives are recognized in the balance sheet at their estimated fair value. The Company does not enter into derivatives for speculative purposes. Changes in the fair value of derivatives (not designated as hedges) are recorded in earnings along with the gain or loss on the hedged asset or liability.
The Company is exposed to market risk for changes in foreign currency exchange rates due to the global nature of its operations. In order to manage this risk, the Company utilizes foreign currency exchange contracts to reduce the exchange rate risk associated with recognized non-functional currency balances. The effects of changes in exchange rates are reflected concurrently in earnings for both the fair value of the foreign currency exchange contracts and the related non-functional currency asset or liability. These derivative gains and losses offset foreign currency gains and losses from the related revaluation of non-functional currency assets and liabilities (amounts included in “Other expense, net” in the Consolidated Statements of Earnings). The U.S. dollar equivalent notional value of these short duration foreign currency exchange contracts was $8.3 million and $10.3 million at August 31, 2026 and 2025, respectively. The fair value of outstanding foreign currency exchange contracts was a net liability of $0.1 million and net asset of less than $0.1 million at August 31, 2026 and 2025, respectively. Net foreign currency loss (gain) (included in “Other expense, net” in the Consolidated Statements of Earnings) related to these derivative instruments are as follows:
| Year Ended August 31, | |||||||||||||||||
| (in millions) | 2026 | 2025 | 2024 | ||||||||||||||
| Foreign currency (gain) loss | $ | ( | $ | $ | |||||||||||||
During December 2022, the Company entered into an interest rate swap, with a maturity date of November 30, 2025, for the notional amount of $60.0 million at a fixed interest rate of 4.022 % to hedge the floating interest rate of the Company's term loan. Upon maturation of this swap, during November 2025, the Company entered into a new interest rate swap, with a maturity date of September 9, 2027, for the notional amount on $90.0 million at a fixed rate of 3.4565 %. The interest rate swap was designated and qualified as a cash flow hedge. The Company uses the interest rate swap for the management of interest rate risk exposure, as an interest rate swap effectively converts a portion of the Company's debt from a floating rate to a fixed rate.
The Company records the fair value of the interest rate swap as an asset or liability on its balance sheet. The change in the fair value of the interest rate swap, a net gain of $0.4 million and net loss of less than $0.1 million for the years ended August 31, 2026 and 2025, respectively, is recorded in other comprehensive income (loss).
The Company also uses interest-rate derivatives to hedge portions of our net investments in non-U.S. subsidiaries (net investment hedge) against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S. dollar. For derivatives that are designated and qualify as a net investment hedge in a foreign operation, the net gains or losses attributable to the hedge changes are recorded in other comprehensive income (loss) where they offset gains and losses recorded on our net investments where the entity has non-U.S. dollar functional currency. During December 2022, the Company entered into a cross-currency swap designated as a net investment hedge with a notional amount of $30.5 million. In November 2025, this cross-currency swap was amended to extend the maturity date to November 30, 2028. On October 28, 2024, the Company entered into a cross-currency swap designated as a net investment hedge with a notional amount of $14.1 million and a maturity date of September 9, 2027. The change in the fair value of the net investment hedges, a net loss of $3.5 million and $3.6 million for the years ended August 31, 2026 and 2025, respectively, is recorded in other comprehensive income (loss).
47
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
Note 11. Leases
As of August 31, 2026, the Company had operating leases for real estate, vehicles, manufacturing equipment, IT equipment and office equipment. The Company did not have significant finance leases during the year ended August 31, 2026. Our leases typically range in term from 3 to 15 years and may contain renewal options for periods up to 5 years at our discretion. Our leases generally contain payments that are primarily fixed; however, certain lease arrangements contain variable payments, which are expensed as incurred and not included in the measurement of ROU assets and lease liabilities. These amounts include payments affected by changes in the Consumer Price Index and executory costs (such as real estate taxes, utilities and common-area maintenance), which are based on usage or performance. In addition, our leases generally do not include material residual value guarantees or material restrictive covenants.
The components of lease costs for the year ended August 31, 2026, 2025 and 2024 were as follows:
| Year Ended August 31, | |||||||||||||||||
| (in millions) | 2026 | 2025 | 2024 | ||||||||||||||
| Operating lease cost | $ | $ | $ | ||||||||||||||
| Short-term lease cost | |||||||||||||||||
| Variable lease cost | |||||||||||||||||
Supplemental cash flow and other information related to leases for the year ended August 31, 2026, 2025 and 2024 were as follows:
| Year Ended August 31, | |||||||||||||||||
| (in millions) | 2026 | 2025 | 2024 | ||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
| Operating cash flows from operating leases | $ | $ | $ | ||||||||||||||
| Right-of-use assets obtained in exchange for new lease liabilities: | |||||||||||||||||
| Operating leases | |||||||||||||||||
Supplemental balance sheet information related to leases at August 31, 2026 and 2025 were as follows:
| August 31, | |||||||||||
| (in millions) | 2026 | 2025 | |||||||||
| Operating leases: | |||||||||||
| $ | $ | ||||||||||
| $ | $ | ||||||||||
| Weighted Average Remaining Lease Term: | |||||||||||
| Operating leases | |||||||||||
| Weighted Average Discount Rate: | |||||||||||
| Operating leases | % | % | |||||||||
48
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
A summary of the future minimum lease payments due under operating leases with terms of more than one year at August 31, 2026 is as follows (in millions):
| 2027 | $ | ||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| 2031 | |||||
| Thereafter | |||||
| Total minimum lease payments | |||||
| Less imputed interest | ( | ||||
| Present value of net minimum lease payments | $ | ||||
Note 12. Employee Benefit Plans
U.S. Defined Benefit Pension Plans
All of the U.S. defined benefit pension plans are frozen, and as a result, plan participants no longer earn additional benefits. The following table provides detail of changes in the projected benefit obligations, the fair value of plan assets and the funded status of the Company’s U.S. defined benefit pension plans as of the respective August 31 measurement date:
| (in millions) | August 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| Reconciliation of benefit obligations | |||||||||||
| Benefit obligation at beginning of year | $ | $ | |||||||||
| Interest cost | |||||||||||
| Actuarial gain | ( | ( | |||||||||
| Benefits paid | ( | ( | |||||||||
| Benefit obligation at end of year | $ | $ | |||||||||
| Reconciliation of plan assets | |||||||||||
| Fair value of plan assets at beginning of year | $ | $ | |||||||||
| Actual return on plan assets | |||||||||||
| Company contributions | |||||||||||
| Benefits paid from plan assets | ( | ( | |||||||||
| Fair value of plan assets at end of year | |||||||||||
| Funded status of the plans (underfunded) | $ | ( | $ | ( | |||||||
The following table provides detail on the Company’s domestic net periodic benefit expense:
| (in millions) | Year Ended August 31, | ||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Interest cost | $ | $ | $ | ||||||||||||||
| Expected return on assets | ( | ( | ( | ||||||||||||||
| Amortization of actuarial loss | |||||||||||||||||
| Net periodic benefit expense | $ | $ | $ | ||||||||||||||
As of August 31, 2026 and 2025, $13.0 million and $14.7 million, respectively, of pension plan actuarial losses, which have not yet been recognized in net periodic benefit cost, were included in accumulated other comprehensive loss, net of income taxes. During fiscal 2027, $1.1 million of these actuarial losses are expected to be recognized in net periodic benefit cost.
49
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
Weighted-average assumptions used to determine U.S. pension plan obligations as of August 31 and weighted-average assumptions used to determine net periodic benefit cost for the years ended August 31 are as follows:
| Year Ended August 31, | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Assumptions for benefit obligations: | |||||||||||||||||
| Discount rate | % | % | % | ||||||||||||||
| Assumptions for net periodic benefit cost: | |||||||||||||||||
| Discount rate | % | % | % | ||||||||||||||
| Expected return on plan assets | % | % | % | ||||||||||||||
The Company's objective for its pension plan is to achieve an asset and liability duration match so that interim fluctuations in funded status should be limited by increasing the correlation between assets and liabilities. As such, the plan assets are invested to maintain funded ratios over the long term, while managing the risk that funded ratios fall meaningfully below 100%. In fiscal 2026, the plan assets were invested in a mix of 70 % duration-matched fixed income securities and 30 % equity securities. In fiscal 2025, the plan assets were invested in a mix of 50 % duration-matched fixed income securities and 50 % equity securities. Cash balances are maintained at levels adequate to meet near-term plan expenses and benefit payments. Investment risk is measured and monitored on an ongoing basis. At August 31, 2026, the Company’s overall expected long-term rate of return for assets in U.S. pension plans was 6.45 %. The expected long-term rate of return is based on the portfolio as a whole and not on the sum of the returns on individual asset categories. The target return is based on historical returns adjusted to reflect the current view of the long-term investment market and our investment mix between 70 % fixed income and 30 % equity securities.
The U.S. pension plan investment allocations by asset category were as follows:
(dollars in millions) | August 31, | ||||||||||||||||||||||
| 2026 | % | 2025 | % | ||||||||||||||||||||
| Cash and cash equivalents | $ | $ | |||||||||||||||||||||
| Income receivable | |||||||||||||||||||||||
| Fixed income securities: | |||||||||||||||||||||||
| U.S. Treasury Securities | |||||||||||||||||||||||
| Corporate Bonds | |||||||||||||||||||||||
| Mutual funds | |||||||||||||||||||||||
| Equity securities: | |||||||||||||||||||||||
| Mutual funds | |||||||||||||||||||||||
| Total plan assets | $ | $ | |||||||||||||||||||||
The fair value of mutual funds is based on unadjusted quoted market prices and therefore are classified as Level 1 within the fair value hierarchy under US GAAP. U.S. Treasury Securities and Corporate Bonds are valued using Level 2 inputs, as defined in Note 9, “Fair Value Measurements.”
Projected benefit payments from plan assets to participants in the Company’s U.S. pension plans are $3.0 2.9 million for fiscal 2029, $2.7 million for fiscal 2030, $2.6 million for fiscal 2031 and $11.3 million in aggregate for the following five years. The Company plans to make a contribution of $0.4 million to the U.S. pension plans in fiscal 2027.
The Company has seven foreign defined benefit pension plans which cover certain existing and former employees of businesses outside the U.S. Most of the participants in the foreign defined benefit pension plans are inactive and no longer earning additional benefits. The following table provides details of changes in the projected benefit obligations, the fair value of plan assets and the funded status of the Company’s significant foreign defined benefit pension plans as of the respective August 31 measurement date:
50
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
| (in millions) | August 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| Reconciliation of benefit obligations: | |||||||||||
| Benefit obligation at beginning of year | $ | $ | |||||||||
| Employer service costs | |||||||||||
| Interest cost | |||||||||||
| Actuarial gain | ( | ( | |||||||||
| Benefits paid | ( | ( | |||||||||
| Settlements | ( | ||||||||||
| Currency impact | ( | ||||||||||
| Benefit obligation at end of year | $ | $ | |||||||||
| Reconciliation of plan assets: | |||||||||||
| Fair value of plan assets at beginning of year | $ | $ | |||||||||
| Actual return on plan assets | ( | ||||||||||
| Company contributions | |||||||||||
| Benefits paid from plan assets | ( | ( | |||||||||
| Settlements | ( | ||||||||||
| Currency impact | |||||||||||
| Fair value of plan assets at end of year | |||||||||||
| Funded status of the plans (underfunded) | $ | ( | $ | ( | |||||||
The following table provides detail on the Company’s foreign net periodic benefit expenses:
| (in millions) | Year Ended August 31, | ||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Employer service costs | $ | $ | $ | ||||||||||||||
| Interest cost | |||||||||||||||||
| Expected return on assets | ( | ( | ( | ||||||||||||||
| Net periodic benefit expense | $ | $ | $ | ||||||||||||||
The weighted average discount rate utilized for determining the benefit obligation at August 31, 2026 and 2025 was 5.3 % and 4.7 %, respectively. The plan assets of these foreign pension plans consist primarily of participating units in fixed income and equity securities and insurance contracts. The Company’s overall expected long-term rate of return on these investments is 4.3 %. During fiscal 2027, the Company does not anticipate contributing to these pension plans.
Projected benefit payments to participants in these foreign plans are $0.3 million for fiscal 2027 and $0.4 2.8 million in aggregate for the five years thereafter. The Company does not plan to make a contribution of to the foreign pension plans in fiscal 2027.
Other Postretirement Health Benefit Plans
The Company provides other postretirement health benefits (“OPEB”) to certain existing and former employees of domestic businesses it acquired, who were entitled to such benefits prior to acquisition. These unfunded plans had a benefit obligation of $1.4 million and $1.5 million at August 31, 2026 and 2025, respectively. These obligations are determined utilizing assumptions consistent with those used for our U.S. pension plans and a health care cost trend rate of 7.0 %, trending downward to 5.0 % by fiscal 2027, and remaining level thereafter. Net periodic benefit costs for other postretirement benefits was income of less than $0.1 million for each of the years ended August 31, 2026, 2025 and 2024. Benefit payments from the plan are funded through participant contributions and Company contributions. Benefit payments are projected to be $0.2 million in fiscal 2027.
Defined Contribution Benefit Plans
The Company maintains a 401(k) plan for substantially all full time U.S. employees (the “401(k) Plan”). Under plan provisions, the Company funds cash for its contributions. Amounts are allocated to accounts set aside for each employee’s retirement. Employees generally may contribute up to 50 % of their compensation to individual accounts within the 401(k) Plan.
51
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
While contributions vary, the Company's match contribution is $0.50 for every $1 contributed by employees, up to 8 % of the employees' eligible pay. These match contributions are made on every payroll run, meaning the contribution is immediately 100% vested. In addition, the Company may make an annual, discretionary contribution of up to 3 % of employees' eligible pay to employees employed as of the end of the plan year. The discretionary contribution has a three -year vesting period. The Company elected not to provide a discretionary contribution for the year ended August 31, 2026. Expense recognized related to the 401(k) plan totaled $2.1 million for fiscal 2026, $2.0 million for fiscal 2025, and $2.1 million for fiscal 2024.
In addition to the 401(k) plan, the Company sponsors a non-qualified supplemental executive retirement plan (“the SERP Plan”). The SERP Plan is an unfunded defined contribution plan that covers certain current and former executive employees and has an annual contribution formula based on age and years of service (with Company contributions ranging from 3 % to 6 % of eligible wages). This unfunded plan had a $0.6 million and $0.7 million obligation at August 31, 2026 and 2025, respectively. Expense recognized for the SERP Plan was $0.2 0.3 million in fiscal 2024.
Deferred Compensation Plan
Note 13. Income Taxes
Earnings before income taxes from continuing operations, are summarized as follows:
| (in millions) | Year Ended August 31, | ||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Domestic | $ | $ | $ | ||||||||||||||
| Foreign | |||||||||||||||||
| $ | $ | $ | |||||||||||||||
52
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
Income tax expense from continuing operations is summarized as follows:
| (in millions) | Year Ended August 31, | ||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Currently payable: | |||||||||||||||||
| Federal | $ | $ | $ | ||||||||||||||
| Foreign | |||||||||||||||||
| State | |||||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | ( | ||||||||||||||||
| Foreign | ( | ||||||||||||||||
| State | ( | ( | |||||||||||||||
| Income tax expense | $ | $ | $ | ||||||||||||||
Income tax expense from continuing operations recognized in the accompanying consolidated statements of earnings differs from the amounts computed by applying the federal income tax rate to earnings from continuing operations before income tax expense. A reconciliation of income taxes at the federal statutory rate to the effective tax rate is summarized in the following table in accordance with the guidance in ASU 2023-09:
| Year Ended August 31, 2026 | ||||||||||||||
| Amount | Percent | |||||||||||||
| Federal statutory rate | $ | % | ||||||||||||
State income taxes, net of federal tax benefit (1) | ||||||||||||||
| Foreign tax effects | ||||||||||||||
| Netherlands | ||||||||||||||
| Statutory tax rate difference | ||||||||||||||
| Other | ||||||||||||||
| United Kingdom | ||||||||||||||
| Statutory tax rate difference | ( | ( | ||||||||||||
| Other | ||||||||||||||
| Other foreign jurisdictions | ||||||||||||||
| Effect of cross-border tax laws | ||||||||||||||
| Foreign-derived intangible income | ( | ( | ||||||||||||
| Unremitted earnings | ||||||||||||||
| Other | ||||||||||||||
| Tax credits | ( | ( | ||||||||||||
| Nontaxable or nondeductible items | ||||||||||||||
| Disallowed executive compensation | ||||||||||||||
| Other | ( | ( | ||||||||||||
| Changes in unrecognized tax benefits | ( | ( | ||||||||||||
| Other adjustments | ||||||||||||||
| Effective Tax Rate | $ | % | ||||||||||||
(1) State income taxes in Wisconsin and California comprised greater than 50% of the tax effect in this category.
53
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
A reconciliation of income taxes at the federal statutory rate to the effective tax rate prior to the adoption of ASU 2023-09 is summarized in the table below:
| Year Ended August 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Federal statutory rate | % | % | ||||||||||||
| State income taxes, net of Federal effect | ||||||||||||||
Tax on foreign earnings (1) | ||||||||||||||
| Foreign derived intangible income deduction | ( | ( | ||||||||||||
| Compensation adjustment | ||||||||||||||
| Valuation allowance additions and releases | ( | |||||||||||||
| Changes in liability for unrecognized tax benefits | ( | |||||||||||||
| Repatriation of foreign earnings | ( | |||||||||||||
| Foreign non-deductible expenses | ||||||||||||||
Audits and adjustments (2) | ||||||||||||||
| Research and development tax credit | ( | ( | ||||||||||||
| Other items | ( | |||||||||||||
| Effective income tax rate | % | % | ||||||||||||
(1) The Company generated $3.0 million and $3.4 million of withholding tax and U.S. tax on non-U.S. earnings, net of foreign tax credits for fiscal 2025 and 2024, respectively.
(2) The Company generated a tax expense related to audits and adjustments of $0.4
The amounts of cash income taxes paid by the Company were as follows:
| (in millions) | Year Ended August 31, 2026 | ||||
| Federal | $ | ||||
| State and Local | |||||
| Foreign | |||||
| Netherlands | |||||
| China | |||||
| Brazil | |||||
| All other foreign | |||||
| Cash paid for income taxes, net of refunds | $ | ||||
The amount of cash income taxes paid by the Company during the years ended August 31, 2025 and 2024 was $26.6 million and $23.8 million, respectively.
54
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
Temporary differences and carryforwards that gave rise to deferred tax assets and liabilities include the following items:
| (in millions) | August 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| Deferred income tax assets: | |||||||||||
| Operating loss and tax credit carryforwards | $ | $ | |||||||||
| Compensation related liabilities | |||||||||||
| Postretirement benefits | |||||||||||
| Inventory | |||||||||||
| Lease liabilities | |||||||||||
| Research and development capitalization | |||||||||||
| Book reserves and other items | |||||||||||
| Total deferred income tax assets | |||||||||||
| Valuation allowance | ( | ( | |||||||||
| Net deferred income tax assets | |||||||||||
| Deferred income tax liabilities: | |||||||||||
| Depreciation and amortization | ( | ( | |||||||||
| Lease assets | ( | ( | |||||||||
| Other items | ( | ( | |||||||||
| Deferred income tax liabilities | ( | ( | |||||||||
Net deferred income tax asset (1) | $ | $ | |||||||||
(1) The net deferred income tax asset is reflected on the balance sheet in two categories: an asset of $12.1 million and $13.7 million for fiscal 2026 and 2025, respectively, is included in “Other long-term assets” and a liability of $10.9 million and $6.2 million for fiscal 2026 and 2025, respectively, is included in “Deferred income taxes”.
The Company has $46.9 million and $2.4 million of gross state net operating loss and credit carryforwards, respectively, which are available to reduce future state tax liabilities. These state net operating loss carryforwards expire at various times through 2076. The Company also has $69.0 million and $8.2 million of foreign loss and credit carryforwards, respectively, which are available to reduce certain future foreign tax liabilities. The majority of the foreign loss carryforwards are not subject to any expiration dates, while the other balances expire at various times through 2036. The valuation allowance represents a reserve for deferred tax assets, including loss carryforwards and foreign tax credits, for which utilization is uncertain.
In general, the Company’s practice is to reinvest the earnings of its non-U.S. subsidiaries within those operations. Routinely, the Company analyzes the factors surrounding global cash needs and future cash utilization and determines if there are any exceptions. As of August 31, 2026, certain jurisdictions met this exception. On the undistributed foreign earnings that are no longer permanently reinvested outside of the United States, the Company recorded a deferred tax liability of $2.7 million.
Changes in the Company’s gross liability for unrecognized tax benefits, excluding interest and penalties, are as follows:
| (in millions) | 2026 | 2025 | 2024 | ||||||||||||||
| Beginning balance | $ | $ | $ | ||||||||||||||
| Increases based on tax positions related to the current year | |||||||||||||||||
| Increase for tax positions taken in a prior period | |||||||||||||||||
| Decrease for tax positions taken in a prior period | ( | ||||||||||||||||
| Decrease due to lapse of statute of limitations | ( | ( | ( | ||||||||||||||
| Decrease due to settlements | ( | ( | |||||||||||||||
| Changes in foreign currency exchange rates | |||||||||||||||||
| Ending balance | $ | $ | $ | ||||||||||||||
Substantially all of these unrecognized tax benefits, if recognized, would impact the effective income tax rate. As of August 31, 2026, 2025 and 2024, the Company recognized $5.8 million, $5.7 million and $5.0 million, respectively, for interest and penalties related to unrecognized tax benefits. The Company recognizes interest and penalties related to underpayment of
55
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
Note 14. Capital Stock and Share Repurchases
The authorized common stock of the Company as of August 31, 2026 consisted of 168,000,000 shares of Class A common stock, $0.20 par value, of which 51,185,430 shares were issued and outstanding; 1,500,000 shares of Class B common stock, $0.20 par value, none of which are outstanding; and 160,000 shares of cumulative preferred stock, $1.00 par value (“preferred stock”), none of which have been issued. Holders of both classes of the Company’s common stock are entitled to dividends, as the Company’s Board of Directors may declare out of funds legally available, subject to any contractual restrictions on the payment of dividends or other distributions on the common stock. If the Company were to issue any of its preferred stock, no dividends could be paid or set apart on shares of common stock, unless paid in common stock, until dividends on all of the issued and outstanding shares of preferred stock had been paid or set apart for payment and provision had been made for any mandatory sinking fund payments.
The Company's Board of Directors has authorized the repurchase and immediate retirement of shares of the Company's common stock under publicly announced share repurchase and retirement programs. Since the inception of the initial share repurchase program in fiscal 2012, the Company has repurchased 33,860,026 shares of common stock for $988.7 million. In October 2025, the Company's Board of Directors approved a new share repurchase program authorizing the repurchase of a total of $200 million of the Company's outstanding common stock. This new program took immediate effect, and replaced the prior share repurchase program that had been authorized in March 2022. The Company repurchased and retired 2,078,645 shares for $81.1 million (inclusive of excise taxes of $0.8 million) in the year ended August 31, 2026 under the October 2025 authorization and 1,699,200 shares for $68.7 million (inclusive of excise taxes of $0.7 million) in the year ended August 31, 2025 under the previous authorization. At August 31, 2026, the maximum value of shares that may yet be purchased under the program is $119.7 million.
56
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
Earnings Per Share
The reconciliation between basic and diluted earnings per share is as follows:
| (in millions, except per share amounts) | Year Ended August 31, | ||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Numerator: | |||||||||||||||||
| Net earnings from continuing operations | $ | $ | $ | ||||||||||||||
| Earnings from discontinued operations, net of income taxes | |||||||||||||||||
| Net earnings | $ | $ | $ | ||||||||||||||
| Denominator: | |||||||||||||||||
| Weighted average common shares outstanding - basic | |||||||||||||||||
| Net effect of dilutive securities - stock based compensation plans | |||||||||||||||||
| Weighted average common shares outstanding - diluted | |||||||||||||||||
| Earnings per share from continuing operations | |||||||||||||||||
| Basic | $ | $ | $ | ||||||||||||||
| Diluted | $ | $ | $ | ||||||||||||||
| Earnings per share from discontinued operations | |||||||||||||||||
| Basic | $ | $ | $ | ||||||||||||||
| Diluted | $ | $ | $ | ||||||||||||||
| Earnings per share: | |||||||||||||||||
| Basic | $ | $ | $ | ||||||||||||||
| Diluted | $ | $ | $ | ||||||||||||||
| Anti-dilutive securities- stock based compensation plans (excluded from earnings per share calculation) | |||||||||||||||||
Note 15. Stock Plans
Share based awards may be granted to key employees and directors under the Enerpac Tool Group Corp. 2017 Omnibus Incentive Plan (as amended and restated November 9, 2020) (the “Plan”). A total of 7,825,000 shares of Class A common stock have been authorized for issuance under the Plan plus shares, if any, that become issuable, pursuant to the terms of the Plan, upon the expiration, cancellation or forfeiture of awards under our previously registered stock plans outstanding at the time the Plan was first approved by the Company's shareholders. At August 31, 2026, 1,847,138 shares were available for future award grants. The Plan permits the Company to grant share-based awards, including stock options, restricted stock units and performance shares to employees and directors. Under the Plan, options may have a maximum term of years and an exercise price per share no less than 100 % of the fair market value of the Company’s common stock at the date of grant. No Options have been granted under Plan. The Company’s restricted stock grants generally vest, subject to continued employment, in equal annual installments over a -year period. The awards of performance shares generally include a -year performance period and vest at the end of the period, subject to continued employment. The awards of performance shares granted in fiscal 2026, fiscal 2025 and fiscal 2024 generally provide for payout based 33.34 % on the relative total shareholder return metric, 33.33 % on the Company's adjusted earnings per share and 33.33 % on the Company's three-year average return on invested capital. The provisions of share-based awards may vary by individual grant with respect to vesting period, dividend and voting rights, performance conditions and forfeitures.
57
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
A summary of restricted stock units and performance shares activity during fiscal 2026 is as follows:
| Number of Shares | Weighted-Average Fair Value at Grant Date (Per Share) | ||||||||||
| Outstanding at August 31, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Forfeited | ( | ||||||||||
| Vested | ( | ||||||||||
| Outstanding at August 31, 2026 | $ | ||||||||||
A summary of stock option activity during fiscal 2026 is as follows:
| Shares | Weighted-Average Exercise Price (Per Share) | Weighted-Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||||||||
| September 1, 2025 | $ | ||||||||||||||||||||||
| Granted | |||||||||||||||||||||||
| Exercised | ( | ||||||||||||||||||||||
| Forfeited | |||||||||||||||||||||||
| Expired | |||||||||||||||||||||||
| Outstanding at August 31, 2026 | $ | $ | |||||||||||||||||||||
| Exercisable at August 31, 2026 | $ | $ | |||||||||||||||||||||
Intrinsic value is the difference between the market value of the stock at August 31, 2026 and the exercise price which is aggregated for all outstanding and exercisable options. A summary of the total intrinsic value of options exercised and cash receipts from options exercised is summarized below:
(in millions) | Year Ended August 31, | ||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Intrinsic value of options exercised | $ | $ | $ | ||||||||||||||
| Cash receipts from exercise of options | |||||||||||||||||
The Company generally records compensation expense over the vesting period for restricted stock unit awards based on the market value of the Company's Class A common stock on the grant date and utilized an expected forfeiture rate of 12 % for the years ended August 31, 2026, 2025 and 2024. The fair value of Performance Shares with market vesting conditions utilize a Monte Carlo simulation model while those with performance vesting conditions have a fair value based on market price on the date of grant with updates made periodically to the amount of expense recognized based on our assessment of the performance condition being met with a range of attainment between 0 % and 200 %.
Note 16. Business Segment, Geographic and Customer Information
The Company is a global manufacturer of a broad range of industrial products and solutions. The IT&S reportable segment is primarily engaged in the design, manufacture, and distribution of branded hydraulic and mechanical tools and in providing services and tool rental to the general industrial; refining and petrochemical; industrial MRO; machining & manufacturing; power generation; infrastructure; mining and other markets. The Other segment is included for purposes of reconciliation of the respective balances below to the condensed consolidated financial statements.
58
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
The Company’s Chief Executive Officer is the Chief Operating Decision Maker (CODM). The CODM allocates resources and makes operating decisions based on the financial information presented by the Company’s segments. The measures regularly reviewed by our CODM include segment sales, segment operating profit and segment operating profit margin. Our CODM uses these financial measures to evaluate and allocate capital and company resources as critical determinants of segment performance. In addition, these metrics are used to monitor actual to forecasted and budgeted results to benchmark to our peers. The following table includes segment sales, significant expense items and segment operating profit as viewed by the CODM for the years ended August 31, 2026, 2025, and 2024.
| Year Ended August 31, | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Net Sales by Reportable Segment & Product Line | |||||||||||||||||
| IT&S Segment | |||||||||||||||||
| Product | $ | $ | $ | ||||||||||||||
| Service & Rental | |||||||||||||||||
| IT&S Segment | |||||||||||||||||
| Other Segment | |||||||||||||||||
| Cost of Products Sold | |||||||||||||||||
| IT&S Segment | |||||||||||||||||
| Other Segment | |||||||||||||||||
| Corporate | |||||||||||||||||
| Gross Profit | |||||||||||||||||
| IT&S Segment | |||||||||||||||||
| Other Segment | |||||||||||||||||
| Corporate | ( | ( | ( | ||||||||||||||
| Selling, General and Administrative Expenses | |||||||||||||||||
| IT&S Segment | |||||||||||||||||
| Other Segment | |||||||||||||||||
| General Corporate | |||||||||||||||||
| Amortization of Intangible Assets | |||||||||||||||||
| IT&S Segment | |||||||||||||||||
| Other Segment | |||||||||||||||||
| General Corporate | |||||||||||||||||
| Restructuring Charges | |||||||||||||||||
| IT&S Segment | |||||||||||||||||
| Other Segment | |||||||||||||||||
| General Corporate | |||||||||||||||||
59
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
| Year Ended August 31, | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Impairment & Divestiture Charges | |||||||||||||||||
| Other Segment | |||||||||||||||||
| Operating Profit (Loss) | |||||||||||||||||
| IT&S Segment | |||||||||||||||||
| Other Segment | |||||||||||||||||
| Corporate | ( | ( | ( | ||||||||||||||
| Operating Profit % | |||||||||||||||||
| IT&S Segment | |||||||||||||||||
| Other Segment | |||||||||||||||||
| Capital Expenditures: | |||||||||||||||||
| IT&S Segment | |||||||||||||||||
| Other Segment | |||||||||||||||||
| General Corporate | |||||||||||||||||
| $ | $ | $ | |||||||||||||||
| August 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Assets: | |||||||||||
| IT&S Segment | $ | $ | |||||||||
| Other Segment | |||||||||||
| Corporate | |||||||||||
| $ | $ | ||||||||||
In addition to the impact of changes in foreign currency exchange rates, the comparability of segment and product line information is impacted by acquisition/divestiture activities, impairment and divestiture charges, restructuring costs and related benefits. Corporate assets, which are not allocated, principally represent cash and cash equivalents, property, plant, and equipment, ROU assets, capitalized debt issuance costs and deferred income taxes.
60
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
The following tables summarize net sales and property, plant and equipment by geographic region (in millions):
| Year Ended August 31, | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Net Sales: | |||||||||||||||||
| United States of America | $ | $ | $ | ||||||||||||||
| Germany | |||||||||||||||||
| United Kingdom | |||||||||||||||||
| Brazil | |||||||||||||||||
| Canada | |||||||||||||||||
| Australia | |||||||||||||||||
| Saudi Arabia | |||||||||||||||||
| France | |||||||||||||||||
| China | |||||||||||||||||
| All Other | |||||||||||||||||
| $ | $ | $ | |||||||||||||||
| August 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Property, Plant and Equipment, net: | |||||||||||
| United States of America | $ | $ | |||||||||
| United Kingdom | |||||||||||
| Spain | |||||||||||
| UAE | |||||||||||
| Brazil | |||||||||||
| Netherlands | |||||||||||
| All other | |||||||||||
| $ | $ | ||||||||||
Note 17. Commitments and Contingencies
The Company had outstanding commercial letters of credit of $3.9 million and surety bonds of $2.6 million at August 31, 2026, and $5.9 million of letters of credit and $4.8 million of surety bonds at August 31, 2025, the majority of which relate to commercial contracts and self-insured workers' compensation programs.
As part of the Company's global sourcing strategy, we have entered into agreements with certain suppliers that require the supplier to maintain minimum levels of inventory to support certain products for which we require a short lead time to fulfill customer orders. We have the ability to notify the supplier that they no longer need to maintain the minimum level of inventory should we discontinue manufacturing of a product during the contract period; however, we must purchase the remaining minimum inventory levels the supplier was required to maintain within a defined period of time.
The Company is a party to various legal proceedings that have arisen in the normal course of business. These legal proceedings include regulatory matters, product liability, breaches of contract, employment, personal injury and other disputes. The Company has recorded reserves for loss contingencies based on the specific circumstances of each case. Such reserves are recorded when it is probable a loss has been incurred and can be reasonably estimated. The Company maintains a policy to exclude from such reserves an estimate of legal defense costs. In the opinion of management, resolution of these contingencies is not expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.
Additionally, in fiscal 2019, the Company provided voluntary self-disclosures to both Dutch and U.S. authorities related to sales of products and services linked to the Crimea region of Ukraine, which sales potentially violated European Union and
61
ENERPAC TOOL GROUP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
U.S. sanctions provisions. Although the U.S. investigation closed without further implication, the Dutch investigation continued. The Dutch Investigator concluded his investigation in March 2022 and provided the results to the Public Prosecutor's office for review. Specifically, the Investigator concluded that the sales transactions violated EU sanctions. The conclusion in the Investigator's report was consistent with the Company's understanding of what could be stated in the report and supported the Company to record an expense in the fiscal year-ended August 31, 2021, representing the low end of a reasonable range of financial penalties the Company may incur as no other point within the range was deemed more probable. The matter remains subject to further legal proceedings in the Netherlands. The Company has not adjusted its estimate of financial penalties as a result of the status of legal proceedings in the year ended August 31, 2026. While there can be no assurance of the ultimate outcome of the matter, the Company currently believes that there will be no material adverse effect on the Company's financial position, results of operations or cash flows from this matter.
Note 18. Subsequent Events
Refinancing of Senior Credit Facility
On October 16, 2026 , the Company refinanced its credit facility resulting in a new $850 million senior credit facility, comprised of a $550 million revolving line of credit and a $300 million term loan, which will mature in October 2031. The Company has the option to request up to $425 million of additional revolving commitments and/or term loans under the new facility, subject to customary conditions, including the commitment of the participating lenders. The new facility provides for interest rate margins above adjusted term SOFR ranging from % to % per annum depending on the Company’s net leverage ratio. Borrowings under the new facility initially bear interest at adjusted term SOFR plus % per annum. In addition, the new facility contains financial covenants requiring the Company to not permit (i) the net leverage ratio, determined as of the end of each of its fiscal quarters, to exceed 3.75 to 1.00 (or, at the Company’s election and subject to certain conditions, 4.25 to 1.00 for the testing period during which certain material acquisitions occur and the next succeeding four testing periods) or (ii) the interest coverage ratio, determined as of the end of each of its fiscal quarters, to be less than 3.00 to 1.00. Borrowings under the new facility are secured by substantially all personal property assets of the Company and its domestic subsidiary guarantors (other than certain specified excluded assets) and certain of the equity interests of certain subsidiaries of the Company. Initial borrowings under the new credit facility were applied to repay all outstanding borrowings under the refinanced credit facility which had been scheduled to mature in September 2027.
Acquisition of SFE Group
On October 28, 2026 , the Company acquired Specialized Fabrication Equipment Group LLC (“SFE Group”) in a merger transaction in which the aggregate amount paid by the Company with respect to the equity interests in SFE Group was approximately $452 million in cash, plus the issuance by the Company of approximately $20 million in restricted stock unit awards to key personnel of SFE Group, in lieu of cash payment of transaction bonuses owed by SFE Group to such personnel upon completion of the merger transaction. The cash portion of the acquisition consideration is subject to customary adjustments for the level of cash, net working capital, transaction related expenses (including with respect to the transaction bonuses), indebtedness and other similar items existing at SFE Group and its subsidiaries as of the closing date of the transaction. The Company funded the payment of the cash consideration at closing from cash on hand, its recently refinanced $300 million term loan and borrowings of $312 million under its revolving credit facility.
SFE Group is a global industrial equipment company focused on pipe and tube fabrication, welding, machining, and maintenance tools and serves industries such as aerospace & defense, food & beverage, bio-pharma, oil & gas, manufacturing, utilities, power generation, semiconductor, maritime, mining, transportation, data centers, and hospitals.
As the transaction had not closed as of August 31, 2026, the Company has not recorded the acquisition or performed an allocation of the purchase consideration to the net assets acquired at closing. The Company expects to finalize the purchase price allocation for the acquisition within the allowable measurement period.
Adoption of Inducement Award Plan
On October 28, 2026 , 2026, the Company’s Board of Directors adopted the Enerpac Tool Group Inducement Award Plan (the “Inducement Plan”), which provides for the issuance of up to 621,622 shares of the Company’s Class A common stock pursuant to equity awards to be granted solely to individuals who are expected to become officers and other employees and to whom the Company may grant equity awards without shareholder approval pursuant to the New York Stock Exchange’s Listing Rule 303A.08, or any successor rule relating to inducement awards. The Inducement Plan was adopted to facilitate awards of restricted stock units and other long-term equity awards to personnel of SFE Group in connection with the acquisition.
62
ENERPAC TOOL GROUP CORP.
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
| (in millions) | Additions | Deductions | ||||||||||||||||||||||||||||||||||||
| Balance at Beginning of Period | Charged to Costs and Expenses (Income) | Acquisition/ (Divestiture) | Accounts Written Off Less Recoveries | Other | Balance at End of Period | |||||||||||||||||||||||||||||||||
| Allowance for losses—Trade accounts receivable | ||||||||||||||||||||||||||||||||||||||
| August 31, 2026 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||
| August 31, 2025 | ( | |||||||||||||||||||||||||||||||||||||
| August 31, 2024 | ( | |||||||||||||||||||||||||||||||||||||
| Valuation allowance—Income taxes | ||||||||||||||||||||||||||||||||||||||
| August 31, 2026 | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
| August 31, 2025 | ( | |||||||||||||||||||||||||||||||||||||
| August 31, 2024 | ( | |||||||||||||||||||||||||||||||||||||
63
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“the Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective in recording, processing, summarizing, and reporting, within the time periods specified in the SEC's rules and forms, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act, and that such information is accumulated and communicated to the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure.
Management’s Report on Internal Control Over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s internal control over financial reporting based on the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, the Company’s management has concluded that, as of August 31, 2026, the Company’s internal control over financial reporting was effective.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of the effectiveness to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Ernst & Young LLP, an independent registered public accounting firm, has audited the Company’s internal control over financial reporting as of August 31, 2026, as stated in their report which is included herein.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the fourth quarter of fiscal 2026 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Item 9B. Other Information
During the three months ended August 31, 2026, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or adopted or terminated a “non-Rule 10b5-1 trading arrangement” (as such terms are defined in Item 408 of Regulation S-K).
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
64
PART III
Item 10. Directors; Executive Officers and Corporate Governance
Information about the Company’s directors is incorporated by reference to the “Proposal 1: Election of Directors” section of the Company’s Proxy Statement for its Annual Meeting of Shareholders to be held on February 4, 2027 (the “2027 Annual Meeting Proxy Statement”). Information about the Company’s Audit Committee, including the members of the committee, and the Company’s Audit Committee financial experts, is incorporated by reference to the “Proposal 1: Election of Directors” and “Corporate Governance Matters” sections of the Company’s 2027 Annual Meeting Proxy Statement. Information with respect to the timeliness of filings by directors and executive officers of reports required under Section 16(a) of the Securities Exchange Act of 1934, as amended, is incorporated by reference to the “Other Information—Delinquent Section 16(a) Reports” section of the 2027 Annual Meeting Proxy Statement. Information about the Company’s executive officers required by this item is contained in the discussion entitled “Executive Officers of the Registrant” in Part I hereof.
The Company has adopted a code of ethics that applies to its senior executive team, including its Chief Executive Officer, Chief Financial Officer and Corporate Controller. The code of ethics is posted on the Company’s website and is available free of charge at www.enerpactoolgroup.com. The Company intends to satisfy the requirements under Item 5.05 of Form 8-K regarding disclosure of amendments to, or waivers from, provisions of its code of ethics that apply to the Chief Executive Officer, Chief Financial Officer or Corporate Controller by posting such information on the Company’s website.
The Company has adopted an insider trading policy addressing the purchase, sale and other disposition of the Company’s securities by its officers, directors and employees that is reasonably designed to promote compliance with U.S. federal insider trading laws, rules and regulations and the rules of the New York Stock Exchange. That policy is filed as Exhibit 19 to this report.
Item 11. Executive Compensation
The information required by this item is incorporated by reference from the “Proposal 1: Election of Directors,” “Corporate Governance Matters,” “Executive Compensation” (other than the information appearing under the heading “Pay Versus Performance”) and “Non-Employee Director Compensation” sections of the 2027 Annual Meeting Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item is incorporated by reference from the “Certain Beneficial Owners” and “Executive Compensation—Equity Compensation Plan Information” sections of the 2027 Annual Meeting Proxy Statement.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated by reference from the “Corporate Governance Matters—Certain Relationships and Related Party Transactions” section of the 2027 Annual Meeting Proxy Statement.
Item 14. Principal Accountant Fees and Services
The information required by this item is incorporated by reference from the “Other Information—Independent Public Accountants” section of the 2027 Annual Meeting Proxy Statement.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
Documents filed as part of this report:
1. Consolidated Financial Statements
See “Index to Consolidated Financial Statements” set forth in Item 8, “Financial Statements and Supplementary Data” for a list of financial statements filed as part of this report.
2. Financial Statement Schedules
See “Index to Financial Statement Schedule” set forth in Item 8, “Financial Statements and Supplementary Data.”
3. Exhibits
| Exhibit | Description | Incorporated Herein By Reference To | Filed Herewith | Furnished Herewith | ||||||||||||||||||||||
| Agreement and Plan of Merger dated as of July 7, 2026 by and among Enerpac Tool Group Corp., Rodeo Merger Sub, LLC, Specialized Fabrication Equipment Group LLC, and SFEG Holdings, Inc., solely in its capacity as Equityholders Representative | Exhibit 2.1 to the Registrant's Current Report on Form 8-K filed on July 8, 2026 | |||||||||||||||||||||||||
| 3.1 | Exhibit 4.9 to the Registrant's Form 10-Q for the quarter ended February 28, 2001 | |||||||||||||||||||||||||
| Exhibit 3.1(b) of the Registrant's Form 10-K for the fiscal year ended August 31, 2003 | ||||||||||||||||||||||||||
| Exhibit 3.1 to the Registrant's Form 10-K for the fiscal year ended August 31, 2004 | ||||||||||||||||||||||||||
| Exhibit 3.1 to the Registrant's Form 8-K filed on July 18, 2006 | ||||||||||||||||||||||||||
| Exhibit 3.1 to the Registrant's Form 8-K filed on January 14, 2010 | ||||||||||||||||||||||||||
| Exhibit 3.1 to the Registrant's Form 8-K/A filed on January 30, 2020 | ||||||||||||||||||||||||||
| Amended and Restated Bylaws, as amended | Exhibit 3.1 of the Registrant's Form 8-K filed on August 1, 2022 | |||||||||||||||||||||||||
| Description of Registered Securities | Exhibit 4.1 to the Registrant's Form 10-K for the fiscal year ended August 31, 2020 | |||||||||||||||||||||||||
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| Exhibit | Description | Incorporated Herein By Reference To | Filed Herewith | Furnished Herewith | ||||||||||||||||||||||
| 10.1 | Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on September 15, 2022 | |||||||||||||||||||||||||
| Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on July 8, 2026 | ||||||||||||||||||||||||||
| Outside Directors’ Deferred Compensation Plan (as amended and restated effective July 23, 2021) | Exhibit 10.2 to the Registrant's Form 10-K for the fiscal year ended August 31, 2021 | |||||||||||||||||||||||||
| Deferred Compensation Plan (conformed through the fourth amendment) | Exhibit 10.2 to the Registrant's Form 10-Q for the quarter ended November 30, 2014 | |||||||||||||||||||||||||
| Non-Qualified Deferred Compensation Plan (as amended and conformed) | X | |||||||||||||||||||||||||
| 2010 Employee Stock Purchase Plan (as amended and restated December 1, 2023) | Exhibit 10.5 to the Registrant's Form 10-K for the fiscal year ended August 31, 2024 | |||||||||||||||||||||||||
| Enerpac Tool Group Corp. 2017 Omnibus Incentive Plan (as amended and restated November 9, 2020) | Appendix A to the Proxy Statement on Schedule 14A filed by Enerpac Tool Group Corp. on December 4, 2020 | |||||||||||||||||||||||||
| 2009 Omnibus Incentive Plan, conformed through the Second Amendment thereto | Exhibit 99.1 to the Registrant's Form 8-K filed on January 17, 2013 | |||||||||||||||||||||||||
| Supplemental Executive Retirement Plan (as amended and conformed) | X | |||||||||||||||||||||||||
| Senior Officer Severance Plan (as amended and restated as of April 21, 2026) | Exhibit 10.1 to the Registrant's Form 10-Q for the quarter ended May 31, 2026 | |||||||||||||||||||||||||
| Form of Indemnification Agreement for Directors and Officers | Exhibit 10.1 to the Registrant's Form 8-K filed on August 2, 2018 | |||||||||||||||||||||||||
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| Exhibit | Description | Incorporated Herein By Reference To | Filed Herewith | Furnished Herewith | ||||||||||||||||||||||
| 10.11* | X | |||||||||||||||||||||||||
| X | ||||||||||||||||||||||||||
| X | ||||||||||||||||||||||||||
| Executive Officer Bonus Plan | Exhibit B to the Registrant's Definitive Proxy Statement dated December 3, 2012 | |||||||||||||||||||||||||
| Form of NQSO Award (Director) under the 2009 Omnibus Incentive Plan* | Exhibit 10.1(a) to the Registrant's Form 10-Q for the quarter ended February 28, 2014 | |||||||||||||||||||||||||
| Form RSA Award (Director) under the 2017 Omnibus Incentive Plan | Exhibit 10.14 to the Registrant's Form 10-K for the fiscal year ended August 31, 2018 | |||||||||||||||||||||||||
| 10.15* | Exhibit 10.15(a) to the Registrant's Form 10-K for the fiscal year ended August 31, 2018 | |||||||||||||||||||||||||
| Exhibit 10.15(b) to the Registrant's Form 10-K for the fiscal year ended August 31, 2018 | ||||||||||||||||||||||||||
| Exhibit 10.1 to the Registrant's Form 10-Q for the quarter ended May 31, 2024 | ||||||||||||||||||||||||||
| 10.16* | Exhibit 10.16(a) to the Registrant's Form 10-K for the fiscal year ended August 31, 2018 | |||||||||||||||||||||||||
| Exhibit 10.16(b) to the Registrant's Form 10-K for the fiscal year ended August 31, 2018 | ||||||||||||||||||||||||||
| Exhibit 10.1 to the Registrant's Form 8-K filed on January 23, 2025 | ||||||||||||||||||||||||||
| Exhibit 10.2 to the Registrant's Form 8-K filed on January 23, 2025 | ||||||||||||||||||||||||||
| Exhibit 10.3 to the Registrant's Form 8-K filed on January 23, 2025 | ||||||||||||||||||||||||||
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| Exhibit | Description | Incorporated Herein By Reference To | Filed Herewith | Furnished Herewith | ||||||||||||||||||||||
| Form of Performance Share Award agreement under the 2017 Omnibus Incentive Plan (Special Executive Grant) | Exhibit 10.2 to the Registrant's Form 8-K filed on September 1, 2023 | |||||||||||||||||||||||||
| Letter agreement dated September 22, 2021 between Paul E. Sternlieb and Enerpac Tool Group Corp. | Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on September 29, 2021 | |||||||||||||||||||||||||
| Letter agreement dated September 23, 2024 between Darren M. Kozik and Enerpac Tool Group Corp. | Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on October 15, 2024 | |||||||||||||||||||||||||
| Letter agreement dated January 19, 2022 between Benjamin J. Topercer and Enerpac Tool Group Corp. | Exhibit 10.23 to the Registrant's Form 10-K for the fiscal year ended August 31, 2022 | |||||||||||||||||||||||||
| Letter agreement dated June 17, 2024 between Eric T. Chack and Enerpac Tool Group Corp. | Exhibit 10.24 to the Registrant's Form 10-K for the fiscal year ended August 31, 2024 | |||||||||||||||||||||||||
| Letter agreement dated June 6, 2025 between Noah N. Popp and Enerpac Tool Group Corp. | Exhibit 10.23 to the Registrant's Form 10-K for the fiscal year ended August 31, 2025 | |||||||||||||||||||||||||
| Code of Ethics Applicable to Senior Financial Executives | Exhibit 14 of the Registrant’s Form 10-K for the fiscal year ended August 31, 2017 | |||||||||||||||||||||||||
| Enerpac Tool Group Corp. Insider Trading Policy | Exhibit 19 of the Registrant’s Form 10-K for the fiscal year ended August 31, 2024 | |||||||||||||||||||||||||
| Subsidiaries of the Registrant | X | |||||||||||||||||||||||||
| Consent of Ernst & Young LLP | X | |||||||||||||||||||||||||
| Power of Attorney | See signature page of this report | |||||||||||||||||||||||||
| Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | |||||||||||||||||||||||||
| Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | |||||||||||||||||||||||||
| Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | |||||||||||||||||||||||||
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| Exhibit | Description | Incorporated Herein By Reference To | Filed Herewith | Furnished Herewith | ||||||||||||||||||||||
| Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | |||||||||||||||||||||||||
| Enerpac Tool Group Corp. Dodd-Frank Clawback Policy | Exhibit 97 of the Registrant’s Form 10-K for the fiscal year ended August 31, 2024 | |||||||||||||||||||||||||
| The following materials from the Enerpac Tool Group Corp. Form 10-K for the year ended August 31, 2026 formatted in Inline Extensible Business Reporting Language (Inline XBRL): (i) the Consolidated Statements of Earnings, (ii) the Consolidated Statements of Comprehensive Income (Loss), (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to Consolidated Financial Statements. | X | |||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Interactive Data Files submitted as Exhibit 101) | X | ||||||||||||||||||||||||
* Management contract or compensatory plan required to be filed under Item 15 of this report and Item 601 of Regulation S-K of the Securities and Exchange Commission.
Item 16. Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ENERPAC TOOL GROUP CORP. (Registrant) | ||||||||
| By: | /s/ DARREN M. KOZIK | |||||||
| Darren M. Kozik | ||||||||
| Executive Vice President and Chief Financial Officer | ||||||||
Dated: October 29, 2026
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Paul E. Sternlieb, Darren M. Kozik and Noah N. Popp, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this report, and to file the same, with all and any other regulatory authority, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.*
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| Signature | Title | |||||||
| /s/ PAUL E. STERNLIEB | President and Chief Executive Officer, Director | |||||||
| Paul E. Sternlieb | (Principal Executive Officer) | |||||||
| /s/ J. PALMER CLARKSON | Director | |||||||
| J. Palmer Clarkson | ||||||||
| /s/ DANNY L. CUNNINGHAM | Director | |||||||
| Danny L. Cunningham | ||||||||
| /s/ E. JAMES FERLAND | Chairman of the Board of Directors | |||||||
| E. James Ferland | ||||||||
| /s/ COLLEEN M. HEALY | Director | |||||||
| Colleen M. Healy | ||||||||
| /s/ RICHARD D. HOLDER | Director | |||||||
| Richard D. Holder | ||||||||
| /s/ CHARLES T. LAUBER | Director | |||||||
| Charles T. Lauber | ||||||||
| /s/ LYNN C. MINELLA | Director | |||||||
| Lynn C. Minella | ||||||||
| /s/ SIDNEY S. SIMMONS | Director | |||||||
| Sidney S. Simmons | ||||||||
| /s/ DARREN M. KOZIK | Executive Vice President and Chief Financial Officer | |||||||
| Darren M. Kozik | (Principal Financial Officer) | |||||||
| /s/ KEVIN J. HAGEN | Principal Accounting Officer and Vice President, Global Controller | |||||||
| Kevin J. Hagen | (Principal Accounting Officer) | |||||||
* Each of the above signatures is affixed as of October 29, 2026.
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Enerpac Tool Group Non-qualified Deferred Compensation Plan Effective January 1st, 2025 IMPORTANT NOTE This document has not been approved by the Department of Labor, Internal Revenue Service, or any other governmental entity. An adopting Employer must determine whether the Plan is subject to the Federal securities laws and the securities laws of the various states. An adopting Employer may not rely on this document to ensure any particular tax consequences or to ensure that the Plan is “unfunded and maintained primarily for the purpose of providing deferred compensation to a select group of management or highly compensated employees” under Title I of the Employee Retirement Income Security Act of 1974, as amended, with respect to the Employer’s particular situation. FMR LLC, its affiliates and employees cannot provide you with legal advice in connection with the execution of this document. This document should be reviewed by the Employer’s attorney prior to execution. Exhibit 10.4
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan TOC-i Table of Contents Preamble ..................................................................................................................................................................................... 1 Article 1 - General ................................................................................................................................................................ 1-1 Plan ........................................................................................................................................................................ 1-1 Effective Dates ................................................................................................................................................... 1-1 Amounts Not Subject to Code Section 409A ......................................................................................... 1-1 Article 2 - Definitions ......................................................................................................................................................... 2-1 Account ................................................................................................................................................................. 2-1 Administrator .................................................................................................................................................... 2-1 Adoption Agreement ...................................................................................................................................... 2-1 Beneficiary .......................................................................................................................................................... 2-1 Board or Board of Directors ........................................................................................................................ 2-1 Bonus .................................................................................................................................................................... 2-1 Change in Control ............................................................................................................................................. 2-1 Code ....................................................................................................................................................................... 2-1 Compensation .................................................................................................................................................... 2-1 Director ................................................................................................................................................................ 2-2 Disability .............................................................................................................................................................. 2-2 Eligible Employee ............................................................................................................................................ 2-2 Employer ............................................................................................................................................................. 2-2 ERISA ..................................................................................................................................................................... 2-2 Identification Date ........................................................................................................................................... 2-2 Key Employee .................................................................................................................................................... 2-2 Participant .......................................................................................................................................................... 2-2 Plan ........................................................................................................................................................................ 2-2
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan TOC-ii Plan Sponsor ...................................................................................................................................................... 2-2 Plan Year .............................................................................................................................................................. 2-2 Related Employer............................................................................................................................................. 2-3 Retirement .......................................................................................................................................................... 2-3 Separation from Service ................................................................................................................................ 2-3 Unforeseeable Emergency............................................................................................................................ 2-4 Valuation Date ................................................................................................................................................... 2-4 Years of Service ................................................................................................................................................. 2-4 Article 3 - Participation ..................................................................................................................................................... 3-1 Participation ....................................................................................................................................................... 3-1 Termination of Participation ....................................................................................................................... 3-1 Article 4 - Participant Elections ..................................................................................................................................... 4-1 Deferral Agreement......................................................................................................................................... 4-1 Amount of Deferral .......................................................................................................................................... 4-1 Timing of Election to Defer .......................................................................................................................... 4-1 Election of Payment Schedule and Form of Payment ....................................................................... 4-2 Article 5 - Employer Contributions .............................................................................................................................. 5-1 Matching Contributions ................................................................................................................................. 5-1 Other Contributions ........................................................................................................................................ 5-1 Article 6 - Accounts and Credits .................................................................................................................................... 6-1 Establishment of Account ............................................................................................................................. 6-1 Credits to Account ........................................................................................................................................... 6-1 Article 7 - Investment of Contributions ...................................................................................................................... 7-1 Investment Options ......................................................................................................................................... 7-1 Adjustment of Accounts ................................................................................................................................ 7-1
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan TOC-iii Article 8 - Right to Benefits.............................................................................................................................................. 8-1 Vesting .................................................................................................................................................................. 8-1 Death ..................................................................................................................................................................... 8-1 Disability .............................................................................................................................................................. 8-1 Article 9 - Distribution of Benefits ................................................................................................................................ 9-1 Amount of Benefits .......................................................................................................................................... 9-1 Method and Timing of Distributions ........................................................................................................ 9-1 Unforeseeable Emergency............................................................................................................................ 9-1 Payment Election Overrides ........................................................................................................................ 9-2 Cashouts of Amounts Not Exceeding Stated Limit ............................................................................. 9-2 Required Delay in Payment to Key Employees ................................................................................... 9-2 Change in Control ............................................................................................................................................. 9-3 Permissible Delays in Payment .................................................................................................................. 9-6 Permitted Acceleration of Payment ......................................................................................................... 9-7 Article 10 - Amendment and Termination ..............................................................................................................10-1 Amendment by Plan Sponsor ....................................................................................................................10-1 Plan Termination Following Change in Control or Corporate Dissolution ...........................10-1 Other Plan Terminations ............................................................................................................................10-1 Article 11 - The Trust .......................................................................................................................................................11-1 Establishment of Trust ................................................................................................................................11-1 Trust ....................................................................................................................................................................11-1 Investment of Trust Funds .........................................................................................................................11-1 Article 12 - Plan Administration..................................................................................................................................12-1 Powers and Responsibilities of the Administrator ..........................................................................12-1 Claims and Review Procedures ................................................................................................................12-2
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan TOC-iv Plan Administrative Costs ..........................................................................................................................12-3 Article 13 - Miscellaneous ..............................................................................................................................................13-1 Unsecured General Creditor of the Employer ....................................................................................13-1 Employer’s Liability ......................................................................................................................................13-1 Limitation of Rights .......................................................................................................................................13-1 Anti-Assignment .............................................................................................................................................13-1 Facility of Payment ........................................................................................................................................13-2 Notices ................................................................................................................................................................13-2 Tax Withholding .............................................................................................................................................13-2 Indemnification...............................................................................................................................................13-3 Successors .........................................................................................................................................................13-4 Disclaimer .........................................................................................................................................................13-4 Governing Law ................................................................................................................................................13-4
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Preamble 1 The Plan is intended to be a “plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended, or an “excess benefit plan” within the meaning of Section 3(36) of the Employee Retirement Income Security Act of 1974, as amended, or a combination of both. The Plan is further intended to conform with the requirements of Internal Revenue Code Section 409A and the final regulations issued thereunder and shall be interpreted, implemented, and administered in a manner consistent therewith.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 1-1 Plan The Plan will be referred to by the name specified in the Adoption Agreement. Effective Dates (a) Original Effective Date. The Original Effective Date is the date as of which the Plan was initially adopted. (b) Amendment Effective Date. The Amendment Effective Date is the date specified in the Adoption Agreement as of which the Plan is amended and restated. Except as otherwise provided in the Adoption Agreement, all amounts deferred under the Plan prior to the Amendment Effective Date shall be governed by the terms of the Plan as in effect on the day before the Amendment Effective Date. (c) Special Effective Date. A Special Effective Date may apply to any given provision if so specified in Appendix A of the Adoption Agreement. A Special Effective Date will control over the Original Effective Date or Amendment Effective Date, whichever is applicable, with respect to such provision of the Plan. Amounts Not Subject to Code Section 409A Except as otherwise indicated by the Plan Sponsor in Section 1.01 of the Adoption Agreement, amounts deferred before January 1, 2005 that are earned and vested on December 31, 2004 will be separately accounted for and administered in accordance with the terms of the Plan as in effect on December 31, 2004.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 2-1 Wherever used herein, the following terms have the meanings set forth below, unless a different meaning is clearly required by the context: Account “Account” means an account and any subaccounts established for the purpose of recording amounts credited on behalf of a Participant and any earnings, expenses, gains, losses, or distributions included thereon. The Account shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant or to the Participant’s Beneficiary pursuant to the Plan. Administrator “Administrator” means the person or persons designated by the Plan Sponsor in Section 1.05 of the Adoption Agreement to be responsible for the administration of the Plan. If no Administrator is designated in the Adoption Agreement, the Administrator is the Plan Sponsor. Adoption Agreement “Adoption Agreement” means the agreement adopted by the Plan Sponsor that establishes the Plan. Beneficiary “Beneficiary” means the persons, trusts, estates, or other entities entitled under Section 8.2 to receive benefits under the Plan upon the death of a Participant. Board or Board of Directors “Board” or “Board of Directors” means the Board of Directors of the Plan Sponsor. Bonus “Bonus” means an amount of incentive remuneration payable by the Employer to a Participant. Change in Control “Change in Control” means the occurrence of an event involving the Plan Sponsor that is described in Section 9.7. Code “Code” means the Internal Revenue Code of 1986, as amended. Compensation “Compensation” has the meaning specified in Section 3.01 of the Adoption Agreement.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 2-2 Director “Director” means a non-employee member of the Board who has been designated by the Employer as eligible to participate in the Plan. Disability “Disability” means that a Participant is disabled as defined in Section 6.01(i) of the Adoption Agreement. Eligible Employee “Eligible Employee” means an employee of the Employer who satisfies the requirements in Section 2.01 of the Adoption Agreement. Employer “Employer” means the Plan Sponsor and any other Related Employer that is listed in Section 1.04 of the Adoption Agreement. ERISA “ERISA” means the Employee Retirement Income Security Act of 1974, as amended. Identification Date “Identification Date” means the date as of which Key Employees are determined which is specified in Section 1.06 of the Adoption Agreement. Key Employee “Key Employee” means an employee who satisfies the conditions set forth in Section 9.6. Participant “Participant” means an Eligible Employee or Director who commences participation in the Plan in accordance with Article 3. Plan “Plan” means the unfunded plan of deferred compensation set forth herein, including the Adoption Agreement and any trust agreement, as adopted by the Plan Sponsor, and as amended from time to time. Plan Sponsor “Plan Sponsor” means the entity identified in Section 1.03 of the Adoption Agreement or any successor by merger, consolidation or otherwise. Plan Year “Plan Year” means the period identified in Section 1.02 of the Adoption Agreement.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 2-3 Related Employer “Related Employer” means the Plan Sponsor and (a) any corporation that is a member of a controlled group of corporations as defined in Code Section 414(b) that includes the Plan Sponsor and (b) any trade or business that is under common control as defined in Code Section 414(c) that includes the Plan Sponsor. Retirement “Retirement” has the meaning specified in 6.01(f) of the Adoption Agreement. Separation from Service “Separation from Service” means the date that the Participant dies, retires, or otherwise has a termination of employment with respect to all entities comprising the Related Employer. A Separation from Service does not occur if the Participant is on military leave, sick leave or other bona fide leave of absence if the period of leave does not exceed six months or such longer period during which the Participant’s right to re-employment is provided by statute or contract. If the period of leave exceeds six months and the Participant’s right to re- employment is not provided either by statute or contract, a Separation from Service will be deemed to have occurred on the first day following the six-month period. If the period of leave is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where the impairment causes the Participant to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, a 29 month period of absence may be substituted for the six month period. Whether a termination of employment has occurred is based on whether the facts and circumstances indicate that the Related Employer and the Participant reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Participant would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than 20 percent of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36 month period (or the full period of services to the Related Employer if the employee has been providing services to the Related Employer for less than 36 months). An independent contractor is considered to have experienced a Separation from Service with the Related Employer upon the expiration of the contract (or, in the case of more than one contract, all contracts) under which services are performed for the Related Employer if the expiration constitutes a good-faith and complete termination of the contractual relationship. If a Participant provides services as both an employee and an independent contractor of the Related Employer, the Participant must separate from service both as an employee and as an independent contractor to be treated as having incurred a Separation from Service. If a Participant ceases providing services as an independent contractor and begins providing services as an employee, or ceases providing services as an employee and begins providing services as an independent contractor, the Participant will not be considered to have experienced a Separation from Service until the Participant has ceased providing services in both capacities.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 2-4 If a Participant provides services both as an employee and as a member of the Board of Directors of a corporate Related Employer (or an analogous position with respect to a noncorporate Related Employer), the services provided as a Director are not taken into account in determining whether the Participant has incurred a Separation from Service as an employee for purposes of a nonqualified deferred compensation plan in which the Participant participates as an employee that is not aggregated under Code Section 409A with any plan in which the Participant participates as a Director. If a Participant provides services both as an employee and as a member of the Board of Directors of a corporate related Employer (or an analogous position with respect to a noncorporate Related Employer), the services provided as an employee are not taken into account in determining whether the Participant has experienced a Separation from Service as a Director for purposes of a nonqualified deferred compensation plan in which the Participant participates as a Director that is not aggregated under Code Section 409A with any plan in which the Participant participates as an employee. All determinations of whether a Separation from Service has occurred will be made in a manner consistent with Code Section 409A and the final regulations thereunder. Unforeseeable Emergency “Unforeseeable Emergency” means a severe financial hardship of the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s Beneficiary, or the Participant’s dependent (as defined in Code Section 152, without regard to Code section 152(b)(1), (b)(2) and (d)(1)(B); loss of the Participant’s property due to casualty; or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. Valuation Date “Valuation Date” means each business day of the Plan Year that the New York Stock Exchange is open. Years of Service “Years of Service” means each one-year period for which the Participant receives service credit in accordance with the provisions of Section 7.01(d) of the Adoption Agreement.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 3-1 Participation The Participants in the Plan shall be those Eligible Employees and Directors of the Employer who satisfy the requirements of Section 2.01 of the Adoption Agreement. Termination of Participation The Administrator may terminate a Participant’s participation in the Plan in a manner consistent with Code Section 409A. If the Employer terminates a Participant’s participation before the Participant experiences a Separation from Service, the Participant’s vested Accounts shall be paid in accordance with the provisions of Article 9.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 4-1 Deferral Agreement If permitted by the Plan Sponsor in accordance with Section 4.01 of the Adoption Agreement, each Eligible Employee and Director may elect to defer his or her Compensation within the meaning of Section 3.01 of the Adoption Agreement by executing in writing or electronically, a deferral agreement in accordance with rules and procedures established by the Administrator and the provisions of this Article 4. A new deferral agreement must be timely executed for each Plan Year during which the Eligible Employee or Director desires to defer Compensation. An Eligible Employee or Director who does not timely execute a deferral agreement shall be deemed to have elected zero deferrals of Compensation for such Plan Year. A deferral agreement may be changed or revoked during the period specified by the Administrator. Except as provided in Section 9.3, a deferral agreement becomes irrevocable at the close of the specified period. Amount of Deferral An Eligible Employee or Director may elect to defer Compensation in any amount permitted by Section 4.01(a) of the Adoption Agreement. Timing of Election to Defer Each Eligible Employee or Director who desires to defer Compensation otherwise payable during a Plan Year must execute a deferral agreement within the period preceding the Plan Year specified by the Administrator. Each Eligible Employee who desires to defer Compensation that is a Bonus must execute a deferral agreement within the period preceding the Plan Year during which the Bonus is earned that is specified by the Administrator, except that if the Bonus can be treated as performance based compensation as described in Code Section 409A(a)(4)(B)(iii), the deferral agreement may be executed within the period specified by the Administrator, which period, in no event, shall end after the date which is six months prior to the end of the period during which the Bonus is earned, provided the Participant has performed services continuously from the later of the beginning of the performance period or the date the performance criteria are established through the date the Participant executed the deferral agreement and provided further that the compensation has not yet become ‘readily ascertainable’ within the meaning of Treas. Reg. § 1.409A-2(a)(8). In addition, if the Compensation qualifies as ‘fiscal year compensation’ within the meaning of Treas. Reg. § 1.409A-2(a)(6), the deferral agreement may be made not later than the end of the Employer’s taxable year immediately preceding the first taxable year of the Employer in which any services are performed for which such Compensation is payable.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 4-2 Except as otherwise provided below, an employee who is classified or designated as an Eligible Employee during a Plan Year or a Director who is designated as eligible to participate during a Plan Year may elect to defer Compensation otherwise payable during the remainder of such Plan Year in accordance with the rules of this Section 4.3 by executing a deferral agreement within the thirty (30) day period beginning on the date the employee is classified or designated as an Eligible Employee or the date the Director is designated as eligible, whichever is applicable, if permitted by Section 4.01(b)(ii) of the Adoption Agreement. If Compensation is based on a specified performance period that begins before the Eligible Employee or Director executes his or her deferral agreement, the election will be deemed to apply to the portion of such Compensation equal to the total amount of Compensation for the performance period multiplied by the ratio of the number of days remaining in the performance period after the election becomes irrevocable and effective over the total number of days in the performance period. The rules of this paragraph shall not apply unless the Eligible Employee or Director can be treated as initially eligible in accordance with Treas. Reg. § 1.409A-2(a)(7). Election of Payment Schedule and Form of Payment All elections of a payment schedule and a form of payment will be made in accordance with rules and procedures established by the Administrator and the provisions of this Section 4.4. (a) If the Plan Sponsor has elected to permit annual distribution elections in accordance with Section 6.01(h) of the Adoption Agreement the following rules apply. At the time an Eligible Employee or Director completes a deferral agreement, the Eligible Employee or Director must elect a distribution event (which includes a specified time) and a form of payment for the Compensation subject to the deferral agreement from among the options the Plan Sponsor has made available for this purpose and which are specified in 6.01(b) of the Adoption Agreement. Prior to the time required by Treas. Reg. § 1.409A-2, the Eligible Employee or Director shall elect a distribution event (which includes a specified time) and a form of payment for any Employer contributions that may be credited to the Participant’s Account during the Plan Year. If an Eligible Employee or Director fails to elect a distribution event, he or she shall be deemed to have elected Separation from Service as the distribution event. If he or she fails to elect a form of payment, he or she shall be deemed to have elected a lump sum form of payment. (b) If the Plan Sponsor has elected not to permit annual distribution elections in accordance with Section 6.01(h) of the Adoption Agreement the following rules apply. At the time an Eligible Employee or Director first completes a deferral agreement but in no event later than the time required by Treas. Reg. § 1.409A-2, the Eligible Employee or Director must elect a distribution event (which includes a specified time) and a form of payment for amounts credited to his or her Account from among the options the Plan Sponsor has made available for this purpose and which are specified in Section 6.01(b) of the Adoption Agreement. If an Eligible Employee or Director fails to elect a distribution event, he or she shall be deemed to have elected Separation from Service in the distribution event. If the Participant fails to elect a form of payment, he or she shall be deemed to have elected a lump sum form of payment.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 5-1 Matching Contributions If elected by the Plan Sponsor in Section 5.01(a) of the Adoption Agreement, the Employer will credit the Participant’s Account with a matching contribution determined in accordance with the formula specified in Section 5.01(a) of the Adoption Agreement. The matching contribution will be treated as allocated to the Participant’s Account at the time specified in Section 5.01(a)(iii) of the Adoption Agreement. Other Contributions If elected by the Plan Sponsor in Section 5.01(b) of the Adoption Agreement, the Employer will credit the Participant’s Account with a contribution or contributions determined in accordance with the formula or method specified in Section 5.01(b) of the Adoption Agreement. These contributions will be treated as allocated to the Participant’s Account at the time specified in Section 5.01(b)(iii) of the Adoption Agreement.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 6-1 Establishment of Account For accounting and computational purposes only, the Administrator will establish and maintain an Account on behalf of each Participant which will reflect the credits made pursuant to Section 6.2, distributions or withdrawals, along with the earnings, expenses, gains and losses allocated thereto, attributable to the hypothetical investments made with the amounts in the Account as provided in Article 7. The Administrator may establish and maintain such other records and accounts, as it decides in its discretion to be reasonably required or appropriate to discharge its duties under the Plan. Credits to Account A Participant’s Account will be credited for each Plan Year with the amount of his or her elective deferrals under Section 4.1 at the time the amount subject to the deferral election would otherwise have been payable to the Participant and the amount of Employer contributions, if any, treated as allocated on his or her behalf under Article 5.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 7-1 Investment Options The amount credited to each Account shall be treated as invested in the investment options designated for this purpose by the Administrator. Adjustment of Accounts The amount credited to each Account shall be adjusted for hypothetical investment earnings, expenses, gains or losses in an amount equal to the earnings, expenses, gains or losses attributable to the investment options selected by the party designated in Section 9.01 of the Adoption Agreement from among the investment options provided in Section 7.1. If permitted by Section 9.01 of the Adoption Agreement, a Participant (or the Participant’s Beneficiary after the death of the Participant) may, in accordance with rules and procedures established by the Administrator, select the investments from among the options provided in Section 7.1 to be used for the purpose of calculating future hypothetical investment adjustments to the Account or to future credits to the Account under Section 6.2 effective as of the Valuation Date coincident with or next following notice to the Administrator. Each Account shall be adjusted as of each Valuation Date to reflect: (a) the hypothetical earnings, expenses, gains, and losses described above; (b) amounts credited pursuant to Section 6.2; and (c) distributions or withdrawals. In addition, each Account may be adjusted for its allocable share of the hypothetical costs and expenses associated with the maintenance of the hypothetical investments provided in Section 7.1.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 8-1 Vesting A Participant, at all times, has a 100% nonforfeitable interest in the amounts credited to his or her Account attributable to his or her elective deferrals made in accordance with Section 4.1. A Participant’s right to the amounts credited to his or her Account attributable to Employer contributions made in accordance with Article 5 shall be determined in accordance with the relevant schedule and provisions in Section 7.01 of the Adoption Agreement. Upon a Separation from Service and after application of the provisions of Section 7.01 of the Adoption Agreement, the Participant shall forfeit the nonvested portion of his or her Account. Death The Plan Sponsor may elect to accelerate vesting upon the death of the Participant in accordance with Section 7.01(c) of the Adoption Agreement and/or to accelerate distributions upon death in accordance with Section 6.01(b) or Section 6.01(d) of the Adoption Agreement. If the Plan Sponsor does not elect to accelerate distributions upon death in accordance with Section 6.01(b) or Section 6.01(d) of the Adoption Agreement, the vested amount credited to the Participant’s Account will be paid in accordance with the provisions of Article 9. A Participant may designate a Beneficiary or Beneficiaries, or change any prior designation of Beneficiary or Beneficiaries in accordance with rules and procedures established by the Administrator. Whenever a Participant designates a new Beneficiary, all former Beneficiary designations by such Participant shall be revoked automatically. If a Participant and the Participant’s spouse divorce, any designations of the spouse as Beneficiary shall become null and void. The former spouse shall be treated as the Beneficiary under the Plan only if after the divorce is final, the Participant expressly re-designates the former spouse as the Participant’s Beneficiary. A copy of the death notice or other sufficient documentation must be filed with and approved by the Administrator. If upon the death of the Participant there is, in the opinion of the Administrator, no designated Beneficiary for part or all of the Participant’s vested Account, such amount will be paid to his or her estate (such estate shall be deemed to be the Beneficiary for purposes of the Plan) in accordance with the provisions of Article 9. Disability If the Plan Sponsor has elected to accelerate vesting upon the occurrence of a Disability in accordance with Section 7.01(c) of the Adoption Agreement and/or to permit distributions upon Disability in accordance with Section 6.01(b) or Section 6.01(d) of the Adoption Agreement, the determination of whether a Participant has incurred a Disability shall be based on the definition of Disability in Section 6.01(i) of the Adoption Agreement and in a manner consistent with the requirements of Code Section 409A.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 9-1 Amount of Benefits The vested amount credited to a Participant’s Account as determined under Articles 6, 7 and 8 shall determine and constitute the basis for the value of benefits payable to the Participant under the Plan. Method and Timing of Distributions Except as otherwise provided in this Article 9, distributions under the Plan shall be made in accordance with the elections made or deemed made by the Participant under Article 4. Subject to the provisions of Section 9.6 requiring a six-month delay for certain distributions to Key Employees, distributions following a payment event shall commence at the time specified in Section 6.01(a) of the Adoption Agreement. If permitted by Section 6.01(g) of the Adoption Agreement, a Participant may elect, at least twelve months before a scheduled distribution event, to delay the payment date for a minimum period of sixty months from the originally scheduled date of payment, provided the election does not take effect for at least twelve months from the date on which the election is made. The distribution election change must be made in accordance with procedures and rules established by the Administrator. The Participant may, at the same time the date of payment is deferred, change the form of payment but such change in the form of payment may not effect an acceleration of payment in violation of Code Section 409A or the provisions of Treas. Reg. § 1.409A-2(b). For purposes of this Section 9.2, a series of installment payments is always treated as a single payment and not as a series of separate payments. Unforeseeable Emergency A Participant may request a distribution due to an Unforeseeable Emergency if the Plan Sponsor has elected to permit Unforeseeable Emergency withdrawals under Section 8.01(a) of the Adoption Agreement. The request must be in writing and must be submitted to the Administrator along with evidence that the circumstances constitute an Unforeseeable Emergency. The Administrator has the discretion to require whatever evidence it deems necessary to determine whether a distribution is warranted, and may require the Participant to certify that the need cannot be met from other sources reasonably available to the Participant. Whether a Participant has incurred an Unforeseeable Emergency will be determined by the Administrator on the basis of the relevant facts and circumstances in its sole discretion, but, in no event, will an Unforeseeable Emergency be deemed to exist if the hardship can be relieved: (a) through reimbursement or compensation by insurance or otherwise, (b) by liquidation of the Participant’s assets to the extent such liquidation would not itself cause severe financial hardship, or (c) by cessation of deferrals under the Plan. A distribution due to an Unforeseeable Emergency must be limited to the amount reasonably necessary to satisfy the emergency need and may include any amounts necessary to pay any federal, state, foreign or local income taxes and penalties reasonably anticipated to result from the distribution. The distribution will be made in the form of a single lump sum cash payment. If permitted by Section 8.01(b) of the Adoption Agreement, a Participant’s deferral elections for the remainder of the Plan Year will be cancelled upon a withdrawal due to an Unforeseeable Emergency. If the payment of all or any portion of the Participant’s vested Account is being delayed in accordance with Section 9.6 at the time he or she experiences an Unforeseeable Emergency, the amount being delayed shall not be subject to the provisions of this Section 9.3 until the expiration of the six month period of delay required by section 9.6.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 9-2 Payment Election Overrides If the Plan Sponsor has elected one or more payment election overrides in accordance with Section 6.01(d) of the Adoption Agreement, the following provisions apply. Upon the occurrence of the first event selected by the Plan Sponsor, the remaining vested amount credited to the Participant’s Account shall be paid in the form designated to the Participant or his or her Beneficiary regardless of whether the Participant had made different elections of time and/or form of payment or whether the Participant was receiving installment payments at the time of the event. Cashouts of Amounts Not Exceeding Stated Limit If the vested amount credited to the Participant’s Account does not exceed the limit established for this purpose by the Plan Sponsor in Section 6.01(e) of the Adoption Agreement at the time he or she incurs a Separation from Service for any reason, the Employer shall distribute such amount to the Participant at the time specified in Section 6.01(a) of the Adoption Agreement in a single lump sum cash payment following such Separation from Service regardless of whether the Participant had made different elections of time or form of payment as to the vested amount credited to his or her Account or whether the Participant was receiving installments at the time of such termination. A Participant’s Account, for purposes of this Section 9.5, shall include any amounts described in Section 1.3. Required Delay in Payment to Key Employees Except as otherwise provided in this Section 9.6, a distribution made on account of Separation from Service (or Retirement, if applicable) to a Participant who is a Key Employee as of the date of his or her Separation from Service (or Retirement, if applicable) shall not be made before the date which is six months after the Separation from Service (or Retirement, if applicable). (a) A Participant is treated as a Key Employee if: (i) he or she is employed by a Related Employer any of whose stock is publicly traded on an established securities market, and (ii) he or she satisfies the requirements of Code Section 416(i)(1)(A)(i), (ii) or (iii), determined without regard to Code Section 416(i)(5), at any time during the twelve month period ending on the Identification Date. (b) A Participant who is a Key Employee on an Identification Date shall be treated as a Key Employee for purposes of the six month delay in distributions for the twelve month period beginning on the first day of a month no later than the fourth month following the Identification Date. The Identification Date and the effective date of the delay in distributions shall be determined in accordance with Section 1.06 of the Adoption Agreement.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 9-3 (c) The Plan Sponsor may elect to apply an alternative method to identify Participants who will be treated as Key Employees for purposes of the six month delay in distributions if the method satisfies each of the following requirements: (i) is reasonably designed to include all Key Employees, (ii) is an objectively determinable standard providing no direct or indirect election to any Participant regarding its application, and (iii) results in either all Key Employees or no more than 200 Key Employees being identified in the class as of any date. Use of an alternative method that satisfies the requirements of this Section 9.6(c) will not be treated as a change in the time and form of payment for purposes of Treas. Reg. § 1.409A-2(b). (d) The six-month delay does not apply to payments described in Section 9.9(a), (b) or (d) or to payments that occur after the death of the Participant. If the payment of all or any portion of the Participant’s vested Account is being delayed in accordance with this Section 9.6 at the time he or she incurs a Disability which would otherwise require a distribution under the terms of the Plan, no amount shall be paid until the expiration of the six month period of delay required by this Section 9.6. Change in Control If the Plan Sponsor has elected to permit distributions upon a Change in Control, the following provisions shall apply. A distribution made upon a Change in Control will be made at the time specified in Section 6.01(a) of the Adoption Agreement in the form elected by the Participant in accordance with the procedures described in Article 4. Alternatively, if the Plan Sponsor has elected in accordance with Section 11.02 of the Adoption Agreement to require distributions upon a Change in Control, the Participant’s remaining vested Account shall be paid to the Participant or the Participant’s Beneficiary at the time specified in Section 6.01(a) of the Adoption Agreement as a single lump sum payment. A Change in Control, for purposes of the Plan, will occur upon a change in the ownership of the Plan Sponsor, a change in the effective control of the Plan Sponsor or a change in the ownership of a substantial portion of the assets of the Plan Sponsor, but only if elected by the Plan Sponsor in Section 11.03 of the Adoption Agreement. The Plan Sponsor, for this purpose, includes any corporation identified in this Section 9.7. All distributions made in accordance with this Section 9.7 are subject to the provisions of Section 9.6. If a Participant continues to make deferrals in accordance with Article 4 after he or she has received a distribution due to a Change in Control, the residual amount payable to the Participant shall be paid at the time and in the form specified in the elections he or she makes in accordance with Article 4 or upon his or her death or Disability as provided in Article 8. Whether a Change in Control has occurred will be determined by the Administrator in accordance with the rules and definitions set forth in this Section 9.7. A distribution to the Participant will be treated as occurring upon a Change in Control if the Plan Sponsor terminates the Plan in accordance with Section 10.2 and distributes the Participant’s benefits within twelve months of a Change in Control as provided in Section 10.3.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 9-4 (a) Relevant Corporations. To constitute a Change in Control for purposes of the Plan, the event must relate to: (i) the corporation for whom the Participant is performing services at the time of the Change in Control, (ii) the corporation that is liable for the payment of the Participant’s benefits under the Plan (or all corporations liable if more than one corporation is liable) but only if either the deferred compensation is attributable to the performance of services by the Participant for such corporation (or corporations) or there is a bona fide business purpose for such corporation (or corporations) to be liable for such payment and, in either case, no significant purpose of making such corporation (or corporations) liable for such payment is the avoidance of federal income tax, or (iii) a corporation that is a majority shareholder of a corporation identified in (i) or (ii), or any corporation in a chain of corporations in which each corporation is a majority shareholder of another corporation in the chain, ending in a corporation identified in (i) or (ii). A majority shareholder is defined as a shareholder owning more than fifty percent (50%) of the total fair market value and voting power of such corporation. (b) Stock Ownership. Code Section 318(a) applies for purposes of determining stock ownership. Stock underlying a vested option is considered owned by the individual who owns the vested option (and the stock underlying an unvested option is not considered owned by the individual who holds the unvested option). If, however, a vested option is exercisable for stock that is not substantially vested (as defined by Treas. Reg. § 1.83-3(b) and (j)) the stock underlying the option is not treated as owned by the individual who holds the option. (c) Change in the Ownership of a Corporation. A change in the ownership of a corporation occurs on the date that any one person or more than one person acting as a group, acquires ownership of stock of the corporation that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of such corporation. If any one person or more than one person acting as a group is considered to own more than fifty percent (50%) of the total fair market value or total voting power of the stock of a corporation, the acquisition of additional stock by the same person or persons is not considered to cause a change in the ownership of the corporation (or to cause a change in the effective control of the corporation as discussed below in Section 9.7(d)). An increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which the corporation acquires its stock in exchange for property will be treated as an acquisition of stock. Section 9.7(c) applies only when there is a transfer of stock of a corporation (or issuance of stock of a corporation) and stock in such corporation remains outstanding after the transaction. For purposes of this Section 9.7(c), persons will not be considered to be acting as a group solely because they purchase or own stock of the same corporation at the same time or as a result of a public offering. Persons will, however, be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase, or acquisition of stock, or similar business transaction with the corporation. If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation only with respect to ownership in that corporation prior to the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 9-5 (d) Change in the Effective Control of a Corporation. A change in the effective control of a corporation occurs on the date that either (i) any one person, or more than one person acting as a group, acquires (or has acquired during the twelve month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the corporation possessing thirty percent (30%) or more of the total voting power of the stock of such corporation, or (ii) a majority of members of the corporation’s Board of Directors is replaced during any twelve month period by Directors whose appointment or election is not endorsed by a majority of the members of the corporation’s Board of Directors prior to the date of the appointment or election, provided that for purposes of this paragraph (ii), the term corporation refers solely to the relevant corporation identified in Section 9.7(a) for which no other corporation is a majority shareholder for purposes of Section 9.7(a). In the absence of an event described in Section 9.7(d)(i) or (ii), a change in the effective control of a corporation will not have occurred. A change in effective control may also occur in any transaction in which either of the two corporations involved in the transaction has a change in the ownership of such corporation as described in Section 9.7(c) or a change in the ownership of a substantial portion of the assets of such corporation as described in Section 9.7(e). If any one person, or more than one person acting as a group, is considered to effectively control a corporation within the meaning of this Section 9.7(d), the acquisition of additional control of the corporation by the same person or persons is not considered to cause a change in the effective control of the corporation or to cause a change in the ownership of the corporation within the meaning of Section 9.7(c). For purposes of this Section 9.7(d), persons will or will not be considered to be acting as a group in accordance with rules similar to those set forth in Section 9.7(c) with the following exception. If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation only with respect to the ownership in that corporation prior to the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 9-6 (e) Change in the Ownership of a Substantial Portion of a Corporation’s Assets. A change in the ownership of a substantial portion of a corporation’s assets occurs on the date that any one person, or more than one person acting as a group (as determined in accordance with rules similar to those set forth in Section 9.7(d)), acquires (or has acquired during the twelve month period ending on the date of the most recent acquisition by such person or persons) assets from the corporation that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of the corporation immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the corporation or the value of the assets being disposed of determined without regard to any liabilities associated with such assets. There is no Change in Control event under this Section 9.7(e) when there is a transfer to an entity that is controlled by the shareholders of the transferring corporation immediately after the transfer. A transfer of assets by a corporation is not treated as a change in ownership of such assets if the assets are transferred to (i) a shareholder of the corporation (immediately before the asset transfer) in exchange for or with respect to its stock, (ii) an entity, fifty percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by the corporation, (iii) a person, or more than one person acting as a group, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding stock of the corporation, or (iv) an entity, at least fifty (50%) of the total value or voting power of which is owned, directly or indirectly, by a person described in Section 9.7(e)(iii). For purposes of the foregoing, and except as otherwise provided, a person’s status is determined immediately after the transfer of assets. Permissible Delays in Payment Distributions may be delayed beyond the date payment would otherwise occur in accordance with the provisions of Articles 8 and 9 in any of the following circumstances (as long as the Employer treats all payments to similarly situated Participants on a reasonably consistent basis): (a) The Employer may delay payment if it reasonably anticipates that its deduction with respect to such payment would be limited or eliminated by the application of Code Section 162(m). Payment must be made during the Participant’s first taxable year in which the Employer reasonably anticipates, or should reasonably anticipate, that if the payment is made during such year the deduction of such payment will not be barred by the application of Code Section 162(m) or during the period beginning with the Participant’s Separation from Service and ending on the later of the last day of the Employer’s taxable year in which the Participant separates from service or the 15th day of the third month following the Participant’s Separation from Service. If a scheduled payment to a Participant is delayed in accordance with this Section 9.8(a), all scheduled payments to the Participant that could be delayed in accordance with this Section 9.8(a) will also be delayed. (b) The Employer may also delay payment if it reasonably anticipates that the making of the payment will violate federal securities laws or other applicable laws provided payment is made at the earliest date on which the Employer reasonably anticipates that the making of the payment will not cause such violation.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 9-7 (c) The Employer reserves the right to amend the Plan to provide for a delay in payment upon such other events and conditions as the Secretary of the Treasury may prescribe in generally applicable guidance published in the Internal Revenue Bulletin. Permitted Acceleration of Payment The Employer may permit acceleration of the time or schedule of any payment or amount scheduled to be paid pursuant to a payment under the Plan provided such acceleration would be permitted by the provisions of Treas. Reg. § 1.409A-3(j)(4), including the following events: (a) Domestic Relations Order. A payment may be accelerated if such payment is made to an alternate payee pursuant to and following the receipt and qualification of a domestic relations order as defined in Code Section 414(p). (b) Compliance with Ethics Agreement and Legal Requirements. A payment may be accelerated as may be necessary to comply with ethics agreements with the Federal government or as may be reasonably necessary to avoid the violation of Federal, state, local or foreign ethics law or conflicts of laws, in accordance with the requirements of Code Section 409A. (c) De Minimis Amounts. A payment may be accelerated if (i) the amount of the payment is not greater than the applicable dollar amount under Code Section 402(g)(1)(B), and (ii) at the time the payment is made the amount constitutes the Participant’s entire interest under the Plan and all other plans that are aggregated with the Plan under Treas. Reg. § 1.409A-1(c)(2). (d) FICA Tax. A payment may be accelerated to the extent required to pay the Federal Insurance Contributions Act tax imposed under Code Sections 3101, 3121(a) and 3121(v)(2) of the Code with respect to compensation deferred under the Plan (the “FICA Amount”). Additionally, a payment may be accelerated to pay the income tax on wages imposed under Code Section 3401 of the Code on the FICA Amount and to pay the additional income tax at source on wages attributable to the pyramiding Code Section 3401 wages and taxes. The total payment under this subsection (d) may not exceed the aggregate of the FICA Amount and the income tax withholding related to the FICA Amount. (e) Section 409A Additional Tax. A payment may be accelerated if the Plan fails to meet the requirements of Code Section 409A; provided that such payment may not exceed the amount required to be included in income as a result of the failure to comply with the requirements of Code Section 409A. (f) Offset. A payment may be accelerated in the Employer’s discretion as satisfaction of a debt of the Participant to the Employer, where such debt is incurred in the ordinary course of the service relationship between the Participant and the Employer, the entire amount of the reduction in any of the Employer’s taxable years does not exceed $5,000, and the reduction is made at the same time and in the same amount as the debt otherwise would have been due and collected from the Participant. (g) Other Events. A payment may be accelerated in the Administrator’s discretion in connection with such other events and conditions as permitted by Code Section 409A.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 10-1 Amendment by Plan Sponsor The Plan Sponsor reserves the right to amend the Plan (for itself and each Employer) through action of its Board of Directors or other authorized person. No amendment can directly or indirectly deprive any current or former Participant or Beneficiary of all or any portion of his or her Account which had accrued and vested prior to the amendment. Plan Termination Following Change in Control or Corporate Dissolution If so elected by the Plan Sponsor in 11.01 of the Adoption Agreement, the Plan Sponsor reserves the right to terminate the Plan and distribute all amounts credited to all Participant Accounts within the 30 days preceding or the twelve months following a Change in Control as determined in accordance with the rules set forth in Section 9.7. For this purpose, the Plan will be treated as terminated only if all agreements, methods, programs and other arrangements sponsored by the Related Employer immediately after the Change in Control which are treated as a single plan under Treas. Reg. § 1.409A-1(c)(2) are also terminated so that all Participants under the Plan and all similar arrangements are required to receive all amounts deferred under the terminated arrangements within twelve months of the date the Plan Sponsor irrevocably takes all necessary action to terminate the arrangements. In addition, the Plan Sponsor reserves the right to terminate the Plan within twelve months of a corporate dissolution taxed under Code Section 331 or with the approval of a bankruptcy court pursuant to 11 U. S. C. Section 503(b)(1)(A) provided that amounts deferred under the Plan are included in the gross incomes of Participants in the latest of (a) the calendar year in which the termination and liquidation occurs, (b) the first calendar year in which the amount is no longer subject to a substantial risk of forfeiture, or (c) the first calendar year in which payment is administratively practicable. Other Plan Terminations The Plan Sponsor retains the discretion to terminate the Plan if (a) all arrangements sponsored by the Plan Sponsor that would be aggregated with any terminated arrangement under Code Section 409A and Treas. Reg. § 1.409A-1(c)(2) are terminated, (b) no payments other than payments that would be payable under the terms of the arrangements if the termination had not occurred are made within twelve months of the termination of the arrangements, (c) all payments are made within twenty-four months of the date the Plan Sponsor takes all necessary action to irrevocably terminate and liquidate the arrangements, (d) the Plan Sponsor does not adopt a new arrangement that would be aggregated with any terminated arrangement under Code Section 409A and the regulations thereunder at any time within the three year period following the date of termination of the arrangement, and (e) the termination does not occur proximate to a downturn in the financial health of the Plan Sponsor. The Plan Sponsor also reserves the right to amend the Plan to provide that termination of the Plan will occur under such conditions and events as may be prescribed by the Secretary of the Treasury in generally applicable guidance published in the Internal Revenue Bulletin.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 11-1 Establishment of Trust The Plan Sponsor may but is not required to establish a trust to hold amounts which the Plan Sponsor may contribute from time to time to correspond to some or all amounts credited to Participants under Section 6.2. In the event that the Plan Sponsor wishes to establish a trust to provide a source of funds for the payment of Plan benefits, any such trust shall be constructed to constitute an unfunded arrangement that does not affect the status of the Plan as an unfunded plan for purposes of Title I of ERISA and the Code. If the Plan Sponsor elects to establish a trust in accordance with Section 10.01 of the Adoption Agreement, the provisions of Sections 11.2 and 11.3 shall become operative. Trust Any trust established by the Plan Sponsor shall be between the Plan Sponsor and a trustee pursuant to a separate written agreement under which assets are held, administered and managed, subject to the claims of the Plan Sponsor’s creditors in the event of the Plan Sponsor’s insolvency. The Plan Sponsor must notify the trustee in the event of a bankruptcy or insolvency. Investment of Trust Funds Any amounts contributed to the trust by the Plan Sponsor shall be invested by the trustee in accordance with the provisions of the trust and the instructions of the Administrator. Trust investments need not reflect the hypothetical investments selected by Participants under Section 7.1 for the purpose of adjusting Accounts and the earnings or investment results of the trust need not affect the hypothetical investment adjustments to Participant Accounts under the Plan.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 12-1 Powers and Responsibilities of the Administrator The Administrator has the full power and the full responsibility to administer the Plan in all of its details; subject, however, to the applicable requirements of ERISA. The Administrator’s powers and responsibilities include, but are not limited to, the following: (a) To make and enforce such rules and procedures as it deems necessary or proper for the efficient administration of the Plan; (b) To interpret the Plan, its interpretation thereof to be final, except as provided in Section 12.2, on all persons claiming benefits under the Plan; (c) To decide all questions concerning the Plan and the eligibility of any person to participate in the Plan; (d) To administer the claims and review procedures specified in Section 12.2; (e) To compute the amount of benefits which will be payable to any Participant, former Participant or Beneficiary in accordance with the provisions of the Plan; (f) To determine the person or persons to whom such benefits will be paid; (g) To authorize the payment of benefits; (h) To make corrections and recover the overpayment of any benefits; (i) To comply with the reporting and disclosure requirements of Part 1 of Subtitle B of Title I of ERISA; (j) To appoint such agents, counsel, accountants, and consultants as may be required to assist in administering the Plan; (k) By written instrument, to allocate and delegate its responsibilities, including the formation of an Administrative Committee to administer the Plan.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 12-2 Claims and Review Procedures (a) Claims Procedure. If any person believes he or she is being denied any rights or benefits under the Plan, such person may file a claim in writing with the Administrator. If any such claim is wholly or partially denied, the Administrator will notify such person of its decision in writing. Such notification will contain (i) specific reasons for the denial, (ii) specific reference to pertinent Plan provisions, (iii) a description of any additional material or information necessary for such person to perfect such claim and an explanation of why such material or information is necessary, and (iv) a description of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the person’s right to bring a civil action following an adverse decision on review. If the claim involves a Disability, the denial must also include the standards that governed the decision, including the basis for disagreeing with any health care professionals, vocational professionals or the Social Security Administration as well as an explanation of the scientific or clinical judgment underlying the denial. Such notification will be given within 90 days (45 days in the case of a claim regarding Disability) after the claim is received by the Administrator. The Administrator may extend the period for providing the notification by 90 days (30 days in the case of a claim regarding Disability, which may be extended an additional 30 days) if special circumstances require an extension of time for processing the claim and if written notice of such extension and circumstance is given to such person within the initial 90 day period (45 day period in the case of a claim regarding Disability). If such notification is not given within such period, the claim will be considered denied as of the last day of such period and such person may request a review of his or her claim. (b) Review Procedure. Within 60 days (180 days in the case of a claim regarding Disability) after the date on which a person receives a written notification of denial of claim (or, if written notification is not provided, within 60 days (180 days in the case of a claim regarding Disability) of the date denial is considered to have occurred), such person (or his or her duly authorized representative) may (i) file a written request with the Administrator for a review of his or her denied claim and of pertinent documents and (ii) submit written issues and comments to the Administrator. The Administrator will notify such person of its decision in writing. Such notification will be written in a manner calculated to be understood by such person and will contain specific reasons for the decision as well as specific references to pertinent Plan provisions. The notification will explain that the person is entitled to receive, upon request and free of charge, reasonable access to and copies of all pertinent documents and has the right to bring a civil action following an adverse decision on review. The decision on review will be made within 60 days (45 days in the case of a claim regarding Disability). The Administrator may extend the period for making the decision on review by 60 days (45 days in the case of a claim regarding Disability) if special circumstances require an extension of time for processing the request such as an election by the Administrator to hold a hearing, and if written notice of such extension and circumstances is given to such person within the initial 60-day period (45 days in the case of a claim regarding Disability). If the decision on review is not made within such period, the claim will be considered denied.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 12-3 If the claim is regarding Disability, and the determination of Disability has not been made by the Social Security Administration, the Railroad Retirement Board, or under the Plan Sponsor’s long-term disability plan, the person may, upon written request and free of charge, also receive the identification of medical or vocational experts whose advice was obtained in connection with the denial of a claim regarding Disability, even if the advice was not relied upon. Before issuing any decision with respect to a claim involving Disability, the Administrator will provide to the person, free of charge, the following information as soon as possible and sufficiently in advance of the date on which the response is required to be provided to the person to allow the person a reasonable opportunity to respond prior to the due date of the response: (i) Any new or additional evidence considered, relied upon, or generated by the Administrator or other person making the decision; and (ii) A new or additional rationale if the decision will be based on that rationale. (c) Exhaustion of Claims Procedures and Right to Bring Legal Claim. No action at law or equity shall be brought more than one year after the Administrator’s affirmation of a denial of a claim, or, if earlier, more than four years after the facts or events giving rise to the claimant’s allegation(s) or claim(s) first occurred. Plan Administrative Costs All reasonable costs and expenses (including legal, accounting, and employee communication fees) incurred by the Administrator in administering the Plan shall be paid by the Plan to the extent not paid by the Employer.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 13-1 Unsecured General Creditor of the Employer Participants and their Beneficiaries, heirs, successors, and assigns shall have no legal or equitable rights, interests or claims in any property or assets of the Employer. For purposes of the payment of benefits under the Plan, any and all of the Employer’s assets shall be, and shall remain, the general, unpledged, unrestricted assets of the Employer. Each Employer's obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future. Employer’s Liability Each Employer’s liability for the payment of benefits under the Plan shall be defined only by the Plan and by the deferral agreements entered into between a Participant and the Employer. An Employer shall have no obligation or liability to a Participant under the Plan except as provided by the Plan and a deferral agreement or agreements. An Employer shall have no liability to Participants employed by other Employers. Limitation of Rights Neither the establishment of the Plan, nor any amendment thereof, nor the creation of any fund or account, nor the payment of any benefits, will be construed as giving to the Participant or any other person any legal or equitable right against the Employer, the Plan or the Administrator, except as provided herein; and in no event will the terms of employment or service of the Participant be modified or in any way affected hereby. Anti-Assignment Except as may be necessary to fulfill a domestic relations order within the meaning of Code Section 414(p), none of the benefits or rights of a Participant or any Beneficiary of a Participant shall be subject to the claim of any creditor. In particular, to the fullest extent permitted by law, all such benefits and rights shall be free from attachment, garnishment, or any other legal or equitable process available to any creditor of the Participant and his or her Beneficiary. Neither the Participant nor his or her Beneficiary shall have the right to alienate, anticipate, commute, pledge, encumber, or assign any of the payments which he or she may expect to receive, contingently or otherwise, under the Plan, except the right to designate a Beneficiary to receive death benefits provided hereunder. Notwithstanding the preceding, the benefit payable from a Participant’s Account may be reduced, at the discretion of the Administrator, to satisfy any debt or liability to the Employer.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 13-2 Facility of Payment If the Administrator determines, on the basis of medical reports or other evidence satisfactory to the Administrator, that the recipient of any benefit payments under the Plan is incapable of handling his or her affairs by reason of minority, illness, infirmity or other incapacity, the Administrator may direct the Employer to disburse such payments to a person or institution designated by a court which has jurisdiction over such recipient or a person or institution otherwise having the legal authority under State law for the care and control of such recipient. The receipt by such person or institution of any such payments therefore, and any such payment to the extent thereof, shall discharge the liability of the Employer, the Plan and the Administrator for the payment of benefits hereunder to such recipient. Notices Any notice or other communication to the Employer or Administrator in connection with the Plan shall be deemed delivered in writing if addressed to the Plan Sponsor at the address specified in Section 1.03 of the Adoption Agreement and if either actually delivered at said address or, in the case or a letter, five business days shall have elapsed after the same shall have been deposited in the United States mails, first-class postage prepaid and registered or certified. Tax Withholding If the Employer concludes that tax is owing with respect to any deferral or payment hereunder, the Employer shall withhold such amounts from any payments due the Participant or from amounts deferred, as permitted by law, or otherwise make appropriate arrangements with the Participant or his or her Beneficiary for satisfaction of such obligation. Tax, for purposes of this Section 13.7 means any federal, state, local or any other governmental income tax, employment or payroll tax, excise tax, or any other tax or assessment owing with respect to amounts deferred, any earnings thereon, and any payments made to Participants under the Plan.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 13-3 Indemnification (a) Each Indemnitee (as defined in Section 13.8(e)) shall be indemnified and held harmless by the Employer for all actions taken by him or her and for all failures to take action (regardless of the date of any such action or failure to take action), to the fullest extent permitted by the law of the jurisdiction in which the Employer is incorporated, against all expense, liability, and loss (including, without limitation, attorneys’ fees, judgments, fines, taxes, penalties, and amounts paid or to be paid in settlement) reasonably incurred or suffered by the Indemnitee in connection with any Proceeding (as defined in subsection (e)). No indemnification pursuant to this Section shall be made, however, in any case where (1) the act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct or recklessness or (2) there is a settlement to which the Employer does not consent. (b) The right to indemnification provided in this Section shall include the right to have the expenses incurred by the Indemnitee in defending any Proceeding paid by the Employer in advance of the final disposition of the Proceeding, to the fullest extent permitted by the law of the jurisdiction in which the Employer is incorporated; provided that, if such law requires, the payment of such expenses incurred by the Indemnitee in advance of the final disposition of a Proceeding shall be made only on delivery to the Employer of an undertaking, by or on behalf of the Indemnitee, to repay all amounts so advanced without interest if it shall ultimately be determined that the Indemnitee is not entitled to be indemnified under this Section or otherwise. (c) Indemnification pursuant to this Section shall continue as to an Indemnitee who has ceased to be such and shall inure to the benefit of his or her heirs, executors, and administrators. The Employer agrees that the undertakings made in this Section shall be binding on its successors or assigns and shall survive the termination, amendment, or restatement of the Plan. (d) The foregoing right to indemnification shall be in addition to such other rights as the Indemnitee may enjoy as a matter of law or by reason of insurance coverage of any kind and is in addition to and not in lieu of any rights to indemnification to which the Indemnitee may be entitled pursuant to the by-laws of the Employer. (e) For the purposes of this Section, the following definitions shall apply: (i) “Indemnitee” shall mean each person serving as an Administrator (or any other person who is an employee, Director, or officer of the Employer) who was or is a party to, or is threatened to be made a party to, or is otherwise involved in, any Proceeding, by reason of the fact that he or she is or was performing administrative functions under the Plan. (ii) “Proceeding” shall mean any threatened, pending, or completed action, suit, or proceeding (including, without limitation, an action, suit, or proceeding by or in the right of the Employer), whether civil, criminal, administrative, investigative, or through arbitration.
Enerpac Tool Group Corp. Enerpac Tool Group Non-Qualified Deferred Compensation Plan Article 13-4 Successors The provisions of the Plan shall bind and inure to the benefit of the Plan Sponsor, the Employer and their successors and assigns and the Participant and the Participant’s designated Beneficiaries. Disclaimer It is the Plan Sponsor’s intention that the Plan comply with the requirements of Code Section 409A. Neither the Plan Sponsor nor the Employer shall have any liability to any Participant should any provision of the Plan fail to satisfy the requirements of Code Section 409A. Governing Law The Plan will be construed, administered, and enforced according to the laws of the State specified by the Plan Sponsor in Section 12.01 of the Adoption Agreement.
Enerpac Tool Group Non-Qualified Deferred Compensation Plan Adoption Agreement
Table of Contents April 2022 i 1.01 Preamble .................................................................................................................................................................. 2 1.02 Plan ............................................................................................................................................................................ 2 1.03 Plan Sponsor .......................................................................................................................................................... 2 1.04 Employer ................................................................................................................................................................. 3 1.05 Administrator ........................................................................................................................................................ 3 1.06 Key Employee Determination Dates ............................................................................................................ 3 2.01 Participation ........................................................................................................................................................... 4 3.01 Compensation ........................................................................................................................................................ 5 3.02 Bonuses .................................................................................................................................................................... 6 4.01 Participant Contributions ................................................................................................................................. 7 5.01 Employer Contributions .................................................................................................................................... 9 6.01 Distributions ........................................................................................................................................................ 12 7.01 Vesting .................................................................................................................................................................... 18 8.01 Unforeseeable Emergency.............................................................................................................................. 22 9.01 Investment Decisions ....................................................................................................................................... 22 10.01 Trust ........................................................................................................................................................................ 22 11.01 Termination Upon Change In Control ....................................................................................................... 23 11.02 Automatic Distribution Upon Change In Control .................................................................................. 23 11.03 Change In Control .............................................................................................................................................. 23 12.01 Governing State Law ......................................................................................................................................... 24 Appendix A ............................................................................................................................................................................... 26
April 2022 2 1.01 Preamble By the execution of this Adoption Agreement the Plan Sponsor hereby [complete (a) or (b)] (a) ☐ adopts a new plan as of [month, day, year] (b) ☒ amends and restates its existing plan, the Enerpac Tool Group Nonqualified Deferred Compensation Plan (previously the Actuant Corporation Nonqualified Deferred Compensation Plan), as of January 1st, 2025 which is the Amendment Effective Date. Except as otherwise provided in Appendix A, all amounts deferred under the Plan prior to the Amendment Effective Date shall be governed by the terms of the Plan as in effect on the day before the Amendment Effective Date (referred to hereinafter as the “Prior Plan”, with deferrals made under such Prior Plan referred to as “Legacy Deferrals”). Original Effective Date: December 1st, 2002, as last restated effective January 1st, 2018 and amended from time to time thereafter. Pre-409A Grandfathering: ☒ Yes ☐ No By executing this Adoption Agreement, the Plan Sponsor (as defined below) has adopted the Plan (as defined below) consisting of the Basic Plan Document along with this Adoption Agreement (and any exhibits or schedules attached hereto). The Plan Sponsor, by completing this Adoption Agreement has made the specific choices regarding plan design as set forth in the Adoption Agreement together with the detailed additional provisions set out in the Basic Plan Document. All capitalized terms used in this Adoption Agreement have the same meaning given in the Basic Plan Document. 1.02 Plan Plan Name: Enerpac Tool Group Non-Qualified Deferred Compensation Plan Plan Year: January - December 1.03 Plan Sponsor Name: Enerpac Tool Group Corp. Address: N86 W12500 Westbrook Crossing, Menomonee Falls, WI 53051 Phone #: 262-293-1500 EIN #: 39-0168610
April 2022 3 Fiscal Year: January 1st – December 31st Is stock of the Plan Sponsor, any Employer or any Related Employer publicly traded on an established securities market? ☒ Yes ☐ No 1.04 Employer The following entities have been authorized by the Plan Sponsor to participate in and have adopted the Plan [insert “Not Applicable” if none have been authorized]: Entity Publicly Traded on Est. Securities Market Yes No Enerpac Tool Group Corp. ☒ ☐ All other Related Employers ☐ ☒ ☐ ☐ ☐ ☐ 1.05 Administrator The Plan Sponsor has designated the following party or parties to be responsible for the administration of the Plan: Name: Enerpac Tool Group Corp. Talent Development & Compensation Committee (hereinafter the “Committee”) Address: N86 W12500 Westbook Crossing, Menomonee Falls, WI 53051 Note: The Administrator is the person or persons designated by the Plan Sponsor to be responsible for the administration of the Plan. Neither Fidelity Employer Services Company nor any other Fidelity affiliate can be the Administrator. 1.06 Key Employee Determination Dates The Employer has designated [month, day, year] as the Identification Date for purposes of determining Key Employees. In the absence of a designation, the Identification Date is December 31. The Employer has designated [month, day, year] as the effective date for purposes of applying the six month delay in distributions to Key Employees.
April 2022 4 In the absence of a designation, the effective date is the first day of the fourth month following the Identification Date. 2.01 Participation (a) ☒ Employees [complete (i), (ii) or (iii)] (i) ☒ Eligible Employees are selected by the Employer. (ii) ☐ Eligible Employees are those employees of the Employer who satisfy the following criteria: (iii) ☐ Employees are not eligible to participate. (b) ☐ Directors [complete (i), (ii) or (iii)] (i) ☐ All Directors are eligible to participate. (ii) ☐ Only Directors selected by the Employer are eligible to participate. (iii) ☐ Directors are not eligible to participate.
April 2022 5 3.01 Compensation For purposes of determining Participant contributions under Article 4 and Employer contributions under Article 5, Compensation shall be defined in the following manner [complete (a) or (b) and select (c) and/or (d), if applicable]: (a) ☒ Compensation is defined as: Base Salary (reduced by deductions pursuant to Code section 125) Annual Bonus (b) ☐ Compensation as defined in [insert name of qualified plan] without regard to the limitation in Section 401(a)(17) of the Code for such Plan Year. (c) ☐ Director Compensation is defined as: (d) ☐ Compensation shall, for all Plan purposes, be limited to $ . (e) ☐ Not Applicable.
April 2022 6 3.02 Bonuses Compensation, as defined in Section 3.01 of the Adoption Agreement, includes the following type of bonuses that will be the subject of a separate deferral election: Type [Will be treated as] Performance Based Compensation Yes No Annual Bonus ☒ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ ☐ Not Applicable.
April 2022 7 4.01 Participant Contributions If Participant contributions are permitted, complete (a) and (b). Otherwise complete (c). (a) Amount of Deferrals A Participant may elect within the period specified in Section 4.01(b) of the Adoption Agreement to defer the following amounts of remuneration. For each type of remuneration listed, complete “dollar amount” and/or “percentage amount”. (i) Compensation other than Bonuses [do not complete if you complete (iii)] Type of Remuneration Dollar Amount % Amount Increment Min Max Min Max Base Salary 1% 80% 1% % % % % % % Note: The increment is required to determine the permissible deferral amounts. For example, a minimum of 0% and maximum of 20% with a 5% increment would allow an individual to defer 0%, 5%, 10%, 15% or 20%. (ii) Bonuses [do not complete if you complete (iii)] Type of Bonus Dollar Amount % Amount Increment Min Max Min Max Annual Bonus 1% 80% 1% Restricted Stock Units (RSUs) 0% 100% 100% Performance Stock Units (PSUs) 0% 100% 100% (iii) Compensation [do not complete if you completed (i) and (ii)] Dollar Amount % Amount Increment Min Max Min Max % % %
April 2022 8 (iv) Director Compensation Type of Compensation Dollar Amount % Amount Increment Min Max Min Max Annual Retainer % % % Meeting Fees Other: % % % Other: % % % Other: % % % (b) Election Period (i) Performance Based Compensation A special election period ☐ Does ☒ Does Not apply to each eligible type of performance based compensation referenced in Section 3.02 of the Adoption Agreement. The special election period, if applicable, will be determined by the Employer. (ii) Newly Eligible Participants An employee who is classified or designated as an Eligible Employee during a Plan Year ☒ May ☐ May Not elect to defer Compensation earned during the remainder of the Plan Year by completing a deferral agreement within the 30 day period beginning on the date he or she is eligible to participate in the Plan. The special election period, if applicable, will be determined by the Employer. (c) No Participant Contributions ☐ Participant contributions are not permitted under the Plan.
April 2022 9 5.01 Employer Contributions If Employer contributions are permitted, complete (a) and/or (b). Otherwise complete (c). (a) Employer Non-Discretionary Contributions (i) Amount For each Plan Year, the Employer shall make a matching contribution on behalf of each Participant who defers Compensation for the Plan Year and satisfies the requirements of Section 5.01(a)(ii) of the Adoption Agreement equal to [complete the ones that are applicable]: (A) ☐ [insert percentage]% of the Compensation the Participant has elected to defer for the Plan Year (B) ☐ An amount determined by the Employer in its sole discretion (C) ☐ Matching contributions for each Participant shall be limited to $ and/or [insert percentage]% of Compensation (D) ☐ Other: (E) ☒ Not Applicable [Proceed to Section 5.01(b)] (ii) Eligibility for matching contribution A Participant who defers Compensation for the Plan Year shall receive an allocation of matching contributions determined in accordance with Section 5.01(a)(i) provided he or she satisfies the following requirements [complete the ones that are applicable]: (A) ☐ Describe requirements:
April 2022 10 (B) ☐ Is selected by the Employer in its sole discretion to receive an allocation of matching contributions (C) ☐ No requirements (iii) Time of Allocation Matching contributions, if made, shall be treated as allocated [select one]: (A) ☐ As of the last day of the Plan Year (B) ☐ At such times as the Employer shall determine in its sole discretion (C) ☐ At the time the Compensation on account of which the matching contribution is being made would otherwise have been paid to the Participant (D) ☐ Other: (b) Employer Discretionary Contributions (i) Amount The Employer shall make a contribution on behalf of each Participant who satisfies the requirements of Section 5.01(b)(ii) equal to [complete the ones that are applicable]: (A) ☐ An amount equal to [insert percentage]% of the Participant’s Compensation (B) ☒ An amount determined by the Employer in its sole discretion (C) ☐ Contributions for each Participant shall be limited to $
April 2022 11 (D) ☐ Other: (E) ☐ Not Applicable [Proceed to Section 6.01] (ii) Eligibility for Other Contribution A Participant shall receive an allocation of other Employer contributions determined in accordance with Section 5.01(b)(i) for the Plan Year if he or she satisfies the following requirements [complete the one that is applicable]: (A) ☐ Describe requirements: (B) ☒ Is selected by the Employer in its sole discretion to receive an allocation of other Employer contributions (C) ☐ No requirements (iii) Time of Allocation Employer contributions, if made, shall be treated as allocated [select one]: (A) ☐ As of the last day of the Plan Year (B) ☒ At such times or times as the Employer shall determine in its sole discretion (C) ☐ Other: (c) No Employer Contributions ☐ Employer contributions are not permitted under the Plan.
April 2022 12 6.01 Distributions The timing and form of payment of distributions made from the Participant’s vested Account shall be made in accordance with the elections made in this Section 6.01 of the Adoption Agreement except when Section 9.6 of the Plan requires a six month delay for certain distributions to Key Employees of publicly traded companies. (a) Timing of Distributions (i) All distributions shall commence in accordance with the following [choose one]: (A) ☒ As soon as administratively feasible following the distribution event but in no event later than the time prescribed by Treas. Reg. Sec. 1.409A-3(d). (B) ☐ Monthly on specified day [insert day] (C) ☐ Annually on specified month and day [insert month and day] (D) ☐ Calendar quarter on specified month and day [insert month and day] [insert numerical quarter 1, 2, 3, or 4] (ii) The timing of distributions as determined in Section 6.01(a)(i) shall be modified by the adoption of: (A) ☐ Event Delay – Distribution events other than those based on Specified Date or Specified Age will be treated as not having occurred for [insert number of months] months (B) ☐ Hold Until Next Year – Distribution events other than those based on Specified Date or Specified Age will be treated as not having occurred for twelve months from the date of the event if payment pursuant to Section 6.01(a)(i) will thereby occur in the next calendar year or on the first payment date in the next calendar year in all other cases (C) ☒ Immediate Processing – The timing method selected by the Plan Sponsor under Section 6.01(a)(i) shall be overridden for the following distribution events [insert events]: (D) ☐ Not applicable
April 2022 13 (b) Distribution Events (i) Participant Contributions under Section 4.01(a) (excluding RSUs, which will always be paid in a Lump Sum): Participants may elect the following payment events and the associated form or forms of payment. If multiple events for each year are selected, the earliest to occur will trigger payment. For installments, insert the range of available periods (e.g., 5-15) or insert the periods available (e.g., 5, 7, 9). Lump Sum Installments (A) ☒ Specified Date ☒ years (B) ☐ Specified Age ☐ years (C) ☒ Separation from Service ☒ 5 or 10 years (D) ☐ Separation from Service plus 6 months ☐ years (E) ☐ Separation from Service plus months [not to exceed months] ☐ years (F) ☐ Retirement ☐ years (G) ☐ Retirement plus 6 months ☐ years (H) ☐ Retirement plus 12 months ☐ years (I) ☐ Disability ☐ years (J) ☐ Death ☐ years (K) ☐ Change in Control ☐ years The minimum deferral period for Specified Date or Specified Age event shall be 3 years.
April 2022 14 Installments may be paid [select each that applies] ☐ Monthly ☐ Quarterly ☐ Semi-Annually ☒ Annually (ii) Contributions under Section 5.01(a) and (b) Participants may elect the following payment events and the associated form or forms of payment. If multiple events for each year are selected, the earliest to occur will trigger payment. For installments, insert the range of available periods (e.g., 5-15) or insert the periods available (e.g., 5, 7, 9). Lump Sum Installments (A) ☐ Specified Date ☐ years (B) ☐ Specified Age ☐ years (C) ☒ Separation from Service ☒ years (D) ☐ Separation from Service plus 6 months ☐ years (E) ☐ Separation from Service plus months [not to exceed months] ☐ years (F) ☐ Retirement ☐ years (G) ☐ Retirement plus 6 months ☐ years (H) ☐ Retirement plus 12 months ☐ years (I) ☐ Disability ☐ years (J) ☐ Death ☐ years (K) ☐ Change in Control ☐ years
April 2022 15 The minimum deferral period for Specified Date or Specified Age event shall be N/A years. Installments may be paid [select each that applies] ☐ Monthly ☐ Quarterly ☐ Semi-Annually ☒ Annually (c) Specified Date and Specified Age elections may not extend beyond age Not Applicable. (d) Payment Election Override Payment of the remaining vested balance of the Participant’s Account will automatically occur at the time specified in Section 6.01(a) of the Adoption Agreement in the form indicated upon the earliest to occur of the following events [check each event that applies and for each event include only a single form of payment]: Events Form of Payment Lump Sum Installments ☐ Separation from Service ☐ ☐ Separation from Service before Retirement ☐ ☒ Death ☒ ☐ Disability ☐ ☐ Not Applicable ☐
April 2022 16 (e) Involuntary Cashouts ☐ If the Participant’s vested Account at the time of his or her Separation from Service does not exceed $25,000, distribution of the vested Account shall automatically be made in the form of a single lump sum in accordance with Section 9.5 of the Plan. ☐ There are no involuntary cashouts. (f) Retirement ☐ Retirement shall be defined as a Separation from Service that occurs on or after the Participant [insert description of requirements]: ☒ No special definition of Retirement applies. (g) Distribution Election Change A Participant ☒ Shall ☐ Shall Not be permitted to modify a scheduled distribution date and/or payment option in accordance with Section 9.2 of the Plan. A Participant shall generally be permitted to elect such modification 2 number of times. Administratively, allowable distribution events will be modified to reflect all options necessary to fulfill the distribution change election provision.
April 2022 17 (h) Frequency of Elections The Plan Sponsor ☒ Has ☐ Has Not elected to permit annual elections of a time and form of payment for amounts deferred under the Plan. If a single election of a time and/or form of payment is required, the Participant will make such election at the time he or she first completes a deferral agreement which, in all cases, will be no later than the time required by Reg. Sec. 1.409A-2. (i) Disability For Purposes of Section 2.11 of the Plan, Disability shall be defined as ☒ Total disability as determined by the Social Security Administration or the Railroad Retirement Board. ☐ As determined by the Employer’s long term disability insurance policy. ☐ As follows [insert description of requirements]: ☐ Not applicable.
April 2022 18 7.01 Vesting (d) Employer Contributions under Sections 5.01(a) The Participant’s vested interest in the amount credited to his or her Account attributable to matching contributions shall be based on the following schedule: ☒ Years of Service Vesting % 0 100% [insert “100” if there is immediate vesting] 1 % 2 % 3 % 4 % 5 % 6 % 7 % 8 % 9 % ☐ Other: ☐ Class year vesting applies: ☐ Not applicable.
April 2022 19 (e) Employer Discretionary Contributions under Section 5.01(b) The Participant’s vested interest in the amount credited to his or her Account attributable to Employer contributions other than matching contributions shall be based on the following schedule: ☒ Years of Service Vesting % 0 100% [insert “100” if there is immediate vesting] 1 % 2 % 3 % 4 % 5 % 6 % 7 % 8 % 9 % ☐ Other: ☐ Class year vesting applies: ☐ Not applicable.
April 2022 20 (f) Acceleration of Vesting The Participant’s vested interest in his or her Account will automatically be 100% upon the occurrence of the following events [select the ones that are applicable]: (i) ☐ Death. (ii) ☐ Disability. (iii) ☐ Change in Control. (iv) ☐ Eligibility for Retirement. (v) ☐ Other: (vi) ☒ Not applicable. (g) Years of Service (i) A Participant’s Years of Service shall include all service performed for the Employer and ☐ Shall ☒ Shall Not include service performed for the Related Employer.
April 2022 21 (ii) Years of Service shall also include service performed for the following entities: (iii) Years of Service shall be determined in accordance with [select one]: (A) ☐ The elapsed time method in Treas. Reg. Sec. 1.410(a)-7 (B) ☐ The general method in DOL Reg. Sec. 2530.200b-1 through b-4 (C) ☐ Participant’s Years of Service credited under: [insert name of plan] (D) ☐ Other: (iv) ☒ Not applicable.
April 2022 22 8.01 Unforeseeable Emergency (a) A withdrawal due to an Unforeseeable Emergency as defined in Section 2.24: ☒ Will ☐ Will Not [if Unforeseeable Emergency withdrawals are not permitted, proceed to Section 9.01] be allowed. (b) Upon a withdrawal due to an Unforeseeable Emergency, a Participant’s deferral election for the remainder of the Plan Year: ☒ Will ☐ Will Not be cancelled. If cancellation occurs, the Participant may resume participation in accordance with Article 4 of the Plan. 9.01 Investment Decisions Investment decisions regarding the hypothetical amounts credited to a Participant’s Account shall be made by [select one]: (a) ☒ The Participant or his or her Beneficiary (b) ☐ The Employer 10.01 Trust The Employer [select one]: ☒ Does ☐ Does Not intend to establish a trust as provided in Article 11 of the Plan.
April 2022 23 11.01 Termination Upon Change In Control The Plan Sponsor ☒ Reserves ☐ Does Not Reserves the right to terminate the Plan and distribute all vested amounts credited to Participant Accounts upon a Change in Control as described in Section 9.7. 11.02 Automatic Distribution Upon Change In Control Distribution of the remaining vested balance of each Participant’s Account ☒ Shall ☐ Shall Not automatically be paid as a lump sum payment upon the occurrence of a Change in Control as provided in Section 9.7. 11.03 Change In Control A Change in Control for Plan purposes includes the following [select each definition that applies]: (a) ☒ A change in the ownership of the Employer as described in Section 9.7(c) of the Plan. (b) ☒ A change in the effective control of the Employer as described in Section 9.7(d) of the Plan. (c) ☒ A change in the ownership of a substantial portion of the assets of the Employer as described in Section 9.7(e) of the Plan. (d) ☐ Not Applicable.
April 2022 24 12.01 Governing State Law The laws of Wisconsin shall apply in the administration of the Plan to the extent not preempted by ERISA.
Execution Page April 2022 25 The Plan Sponsor has caused this Adoption Agreement to be executed this 17th day of July, 2024 , . Plan Sponsor: By: Title: Enerpac Tool Group VP - Total Rewards Type text here
April 2022 26 Appendix A Special Provisions A. The provisions of this Plan regarding the determination of Key Employees shall apply for the purposes of determining Specified Employees under the Prior Plan. B. The following Claims procedures shall replace Section 12.2 of the Plan and shall also apply to Legacy Deferrals (the “Claims Procedures”). The claims procedures set forth below are mandatory for claims under the Plan. All claims under the Plan are subject to the period of limitations as set forth herein. If a claimant fails to follow these claims procedures, or to timely file a claim or appeal in accordance with these procedures, the denial of the claim shall become final and binding on all persons for all purposes. 1. Filing a Claim. Any controversy or claim arising out of or relating to the Plan shall be filed in writing with the Committee which shall make all determinations concerning such claim. Any claim filed with the Committee and any decision by the Committee denying such claim shall be in writing and shall be delivered to the Participant or Beneficiary filing the claim (the “Claimant”). Notice of a claim for payments shall be delivered to the Committee within 90 days of the latest date upon which the payment could have been timely made in accordance with the terms of the Plan and Code Section 409A, and if not paid, the Participant or Beneficiary must file a claim under these Claims Procedures not later than 180 days after such latest date. If the Participant or Beneficiary fails to file a timely claim, the Participant forfeits any amounts to which he or she may have been entitled to receive under the claim. a. In General. Notice of a denial of benefits (other than claims based on disability) will be provided within 90 days of the Committee’s receipt of the Claimant's claim for benefits. If the Committee determines that it needs additional time to review the claim, the Committee will provide the Claimant with a notice of the extension before the end of the initial 90-day period. The extension will not be more than 90 days from the end of the initial 90-day period and the notice of extension will explain the special circumstances that require the extension and the date by which the Committee expects to make a decision. b. Disability Benefits. Notice of denial of claims based on disability will be provided within forty-five (45) days of the Committee’s receipt of the Claimant’s claim for disability benefits. If the Committee determines that it needs additional time to review the disability claim, the Committee will provide the Claimant with a notice of the extension before the end of the initial 45-day period. If the Committee determines that a decision cannot be made within the first extension period due to matters beyond the control of the Committee, the time period for making a determination may be further extended for an additional 30 days. If such an additional extension is necessary, the Committee shall notify the Claimant prior to the expiration of the initial 30-day extension. Any notice of extension shall indicate the circumstances necessitating the extension of time, the date by which the Committee expects to furnish a notice of decision, the specific standards on which such entitlement to a benefit is based, the unresolved issues that prevent a decision on the claim and any additional information needed to resolve those issues. A Claimant will be provided a minimum of 45 days to submit any necessary additional information to the Committee. In the event that a 30-day extension is necessary due to a Claimant’s failure to submit information necessary to decide a claim, the period for
April 2022 27 furnishing a notice of decision shall be tolled from the date on which the notice of the extension is sent to the Claimant until the earlier of the date the Claimant responds to the request for additional information or the response deadline. c. Contents of Notice. If a claim for benefits is completely or partially denied, notice of such denial shall be in writing. Any electronic notification shall comply with the standards imposed by Department of Labor Regulation 29 CFR 2520.104b- 1(c)(1)(i), (iii), and (iv). The notice of denial shall set forth the specific reasons for denial in plain language. The notice shall: (i) cite the pertinent provisions of the Plan document, and (ii) explain, where appropriate, how the Claimant can perfect the claim, including a description of any additional material or information necessary to complete the claim and why such material or information is necessary. The claim denial also shall include an explanation of the claims review procedures and the time limits applicable to such procedures, including the right to appeal the decision, the deadline by which such appeal must be filed and a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse decision on appeal and the specific date by which such a civil action must commence under Section 4 of these Claims Procedures. d. In the case of a complete or partial denial of a disability benefit claim, the notice shall provide such information and shall be communicated in the manner required under applicable Department of Labor regulations. 2. Appeal of Denied Claims. A Claimant whose claim has been completely or partially denied shall be entitled to appeal the claim denial by filing a written appeal with a committee designated to hear such appeals (the “Appeals Committee”). A Claimant who timely requests a review of the denied claim (or his or her authorized representative) may review, upon request and free of charge, copies of all documents, records and other information relevant to the denial and may submit written comments, documents, records and other information relating to the claim to the Appeals Committee. All written comments, documents, records, and other information shall be considered “relevant” if the information: (i) was relied upon in making a benefits determination, (ii) was submitted, considered or generated in the course of making a benefits decision regardless of whether it was relied upon to make the decision, or (iii) demonstrates compliance with administrative processes and safeguards established for making benefit decisions. The review shall take into account all comments, documents, records, and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The Appeals Committee may, in its sole discretion and if it deems appropriate or necessary, decide to hold a hearing with respect to the claim appeal. a. In General. Appeal of a denied benefits claim (other than a disability benefits claim) must be filed in writing with the Appeals Committee no later than 60 days after receipt of the written notification of such claim denial. The Appeals Committee shall make its decision regarding the merits of the denied claim within 60 days following receipt of the appeal (or within 120 days after such receipt, in a case where there are special circumstances requiring extension of time for reviewing the appealed claim). If an extension of time for reviewing the appeal is required because of special circumstances, written notice of the extension shall be furnished to the Claimant prior to the commencement of the extension. The notice will indicate the special circumstances requiring the extension of time and the date by which the Appeals Committee expects to
April 2022 28 render the determination on review. The review will take into account comments, documents, records and other information submitted by the Claimant relating to the claim without regard to whether such information was submitted or considered in the initial benefit determination. b. Disability Benefits. Appeal of a denied disability benefits claim must be filed in writing with the Appeals Committee no later than 180 days after receipt of the written notification of such claim denial. The review shall be conducted in accordance with applicable Department of Labor regulations. The Appeals Committee shall make its decision regarding the merits of the denied claim within 45 days following receipt of the appeal (or within 90 days after such receipt, in a case where there are special circumstances requiring extension of time for reviewing the appealed claim). If an extension of time for reviewing the appeal is required because of special circumstances, written notice of the extension shall be furnished to the Claimant prior to the commencement of the extension. The notice will indicate the special circumstances requiring the extension of time and the date by which the Appeals Committee expects to render the determination on review. Following its review of any additional information submitted by the Claimant, the Appeals Committee shall render a decision on its review of the denied claim. c. Contents of Notice. If a benefits claim is completely or partially denied on review, notice of such denial shall be in writing. Any electronic notification shall comply with the standards imposed by Department of Labor Regulation 29 CFR 2520.104b-1(c)(1)(i), (iii), and (iv). Such notice shall set forth the reasons for denial in plain language. The decision on review shall set forth: (i) the specific reason or reasons for the denial, (ii) specific references to the pertinent Plan provisions on which the denial is based, (iii) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records, or other information relevant (as defined above) to the Claimant’s claim, and (iv) a statement of the Claimant’s right to bring an action under Section 502(a) of ERISA, following an adverse decision on review and the specific date by which such a civil action must commence under Section 4 of these Claims Procedures. For the denial of a disability benefit, the notice will also include such additional information and be communicated in the manner required under applicable Department of Labor regulations. 3. Claims Appeals Upon Change in Control. Upon a change in control, the Appeals Committee, as constituted immediately prior to such change in control, shall continue to act as the Appeals Committee. The Company may not remove any member of the Appeals Committee, but may replace resigning members if 2/3rds of the members of the Board of Directors of the Company and a majority of Participants and Beneficiaries with Account Balances consent to the replacement. The Appeals Committee shall have the exclusive authority at the appeals stage to interpret the terms of the Plan and resolve appeals under the Claims Procedure. Each Related Employer shall, with respect to the Committee identified under this Section: (i) pay its proportionate share of all reasonable expenses and fees of the Appeals Committee, (ii) indemnify the Appeals Committee (including individual committee members) against any costs, expenses and liabilities including, without limitation, attorneys’ fees and expenses arising in connection with the performance of the Appeals Committee hereunder, except with respect to matters resulting from the Appeals Committee’s gross negligence or willful misconduct, and (iii) supply full and timely information to the Appeals Committee on all matters related to
April 2022 29 the Plan, any rabbi trust, Participants, Beneficiaries and Accounts as the Appeals Committee may reasonably require. 4. Legal Action. A Claimant may not bring any legal action, including commencement of any arbitration, relating to a claim for benefits under the Plan unless and until the Claimant has followed the claims procedures under the Plan and exhausted his or administrative remedies under Sections 1 and 2 of these Claims Procedures. No such legal action may be brought more than twelve (12) months following the notice of denial of benefits under Section 2 of these Claims Procedures, or if no appeal is filed by the applicable appeals deadline, twelve (12) months following the appeals deadline. If a Participant or Beneficiary prevails in a legal proceeding brought under the Plan to enforce the rights of such Participant or any other similarly situated Participant or Beneficiary, in whole or in part, the Related Employer shall reimburse such Participant or Beneficiary for all legal costs, expenses, attorneys’ fees and such other liabilities incurred as a result of such proceedings. If the legal proceeding is brought in connection with a change in control (including a “change in control” as defined in a rabbi trust) the Participant or Beneficiary may file a claim directly with the trustee for reimbursement of such costs, expenses and fees. For purposes of the preceding sentence, the amount of the claim shall be treated as if it were an addition to the Participant’s or Beneficiary’s Account Balance and will be included in determining the Related Employer’s trust funding obligation as provided under the Plan, if any. 5. Discretion of Appeals Committee. All interpretations, determinations and decisions of the Appeals Committee with respect to any claim shall be made in its sole discretion, and shall be final and conclusive. 6. Arbitration. a. Prior to Change in Control. If, prior to a change in control, any claim or controversy between a Related Employer and a Participant or Beneficiary is not resolved through the claims procedure set forth in these Claims Procedures, such claim shall be submitted to and resolved exclusively by expedited binding arbitration by a single arbitrator. Arbitration shall be conducted in accordance with the following procedures: The complaining party shall promptly send written notice to the other party identifying the matter in dispute and the proposed remedy. Following the giving of such notice, the parties shall meet and attempt in good faith to resolve the matter. In the event the parties are unable to resolve the matter within 21 days, the parties shall meet and attempt in good faith to select a single arbitrator acceptable to both parties. If a single arbitrator is not selected by mutual consent within ten Business Days following the giving of the written notice of dispute, an arbitrator shall be selected from a list of nine persons each of whom shall be an attorney who is either engaged in the active practice of law or recognized arbitrator and who, in either event, is experienced in serving as an arbitrator in disputes between employers and employees, which list shall be provided by the main office of either JAMS, the American Arbitration Association (“AAA”) or the Federal Mediation and Conciliation Service. If, within three Business Days of the parties’ receipt of such list, the parties are unable to agree
April 2022 30 on an arbitrator from the list, then the parties shall each strike names alternatively from the list, with the first to strike being determined by the flip of a coin. After each party has had four strikes, the remaining name on the list shall be the arbitrator. If such person is unable to serve for any reason, the parties shall repeat this process until an arbitrator is selected. Unless the parties agree otherwise, within 60 days of the selection of the arbitrator, a hearing shall be conducted before such arbitrator at a time and a place agreed upon by the parties. In the event the parties are unable to agree upon the time or place of the arbitration, the time and place shall be designated by the arbitrator after consultation with the parties. Within 30 days of the conclusion of the arbitration hearing, the arbitrator shall issue an award, accompanied by a written decision explaining the basis for the arbitrator’s award. In any arbitration hereunder, the Related Employer shall pay all administrative fees of the arbitration and all fees of the arbitrator, except that the Participant or Beneficiary may, if he/she/it wishes, pay up to one-half of those amounts. Each party shall pay its own attorneys’ fees, costs, and expenses, unless the arbitrator orders otherwise. The prevailing party in such arbitration, as determined by the arbitrator, and in any enforcement or other court proceedings, shall be entitled, to the extent permitted by law, to reimbursement from the other party for all of the prevailing party’s costs (including but not limited to the arbitrator’s compensation), expenses, and attorneys’ fees. The arbitrator shall have no authority to add to or to modify this Plan, shall apply all applicable law, and shall have no lesser and no greater remedial authority than would a court of law resolving the same claim or controversy. The arbitrator shall have no authority to add to or to modify this Plan, shall apply all applicable law, and shall have no lesser and no greater remedial authority than would a court of law resolving the same claim or controversy. The arbitrator shall, upon an appropriate motion, dismiss any claim without an evidentiary hearing if the party bringing the motion establishes that it would be entitled to summary judgment if the matter had been pursued in court litigation. The parties shall be entitled to discovery as follows: Each party may take no more than three depositions. The Related Employer may depose the Participant or Beneficiary plus two other witnesses, and the Participant or Beneficiary may depose the Related Employer, pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure, plus two other witnesses. Each party may make such reasonable document discovery requests as are allowed in the discretion of the arbitrator. The decision of the arbitrator shall be final, binding, and non-appealable, and may be enforced as a final judgment in any court of competent jurisdiction. This arbitration provision of the Plan shall extend to claims against any parent, subsidiary, or affiliate of each party, and, when acting within such capacity, any officer, director, shareholder, Participant, Beneficiary, or agent of any party, or of any of the above, and shall apply as well to claims arising out of state and
April 2022 31 federal statutes and local ordinances as well as to claims arising under the common law or under this Plan. Notwithstanding the foregoing, and unless otherwise agreed between the parties, either party may apply to a court for provisional relief, including a temporary restraining order or preliminary injunction, on the ground that the arbitration award to which the applicant may be entitled may be rendered ineffectual without provisional relief. Any arbitration hereunder shall be conducted in accordance with the Federal Arbitration Act: provided, however, that, in the event of any inconsistency between the rules and procedures of the Act and the terms of this Plan, the terms of this Plan shall prevail. If any of the provisions of this Section 6(a) of these Claims Procedures are determined to be unlawful or otherwise unenforceable, in the whole part, such determination shall not affect the validity of the remainder of this section and this section shall be reformed to the extent necessary to carry out its provisions to the greatest extent possible and to insure that the resolution of all conflicts between the parties, including those arising out of statutory claims, shall be resolved by neutral, binding arbitration. If a court should find that the provisions of this Section 6(a) of these Claims Procedures are not absolutely binding, then the parties intend any arbitration decision and award to be fully admissible in evidence in any subsequent action, given great weight by any finder of fact and treated as determinative to the maximum extent permitted by law. The parties do not agree to arbitrate any putative class action or any other representative action. The parties agree to arbitrate only the claims(s) of a single Participant or Beneficiary. b. Upon Change in Control. Upon a change in control, Section 6(a) of these Claims Procedures shall not apply and any legal action initiated by a Participant or Beneficiary to enforce his or her rights under the Plan may be brought in any court of competent jurisdiction. Notwithstanding the Appeals Committee’s discretion under Sections 3 and 5 of these Claims Procedures, the court shall apply a de novo standard of review to any prior claims decision under Sections 1 through 3 of these Claims Procedures or any other determination made by the Company, its Board of Directors, a Related Employer, the Committee, or the Appeals Committee.
Exhibit 10.8
ENERPAC TOOL GROUP CORP.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(As conformed to amendments made through October 25, 2022)
Enerpac Tool Group Corp. (formerly “Actuant Corporation”), a Wisconsin corporation, maintains the Enerpac Tool Group Corp. Supplemental Executive Retirement Plan (prior to January 29, 2020, known as the “Actuant Corporation Supplemental Executive Retirement Plan”) (the “Plan”) for the benefit of a select group of management and highly compensated employees of the Company and its Affiliates. The Plan is intended to provide such employees with certain supplemental retirement benefits. The Plan is an unfunded deferred compensation plan that is intended to qualify for the exemptions provided in Sections 201, 301, and 401 of ERISA.
The Plan was originally established during the Plan Year starting September 1, 2010, and taking into account Compensation paid beginning September 1, 2010 as described in Section 1.11.
The Plan is designed to comply with the American Jobs Creation Act of 2004, as amended (the “Jobs Act”), Section 409A of the Code, and final Treasury regulations and guidance issued thereunder. In the event of any inconsistency between the terms of the Plan and the Jobs Act or Section 409A of the Code, the terms of the Jobs Act and Section 409A of the Code shall prevail and govern.
Section 1
Definitions
The following words and phrases shall have the following meanings unless a different meaning is plainly required by the context:
1.1“Administrator” shall mean the Company, as provided in Section 8.1.
1.2“Affiliate” shall mean a corporation, trade or business which is, together with the Company, a member of a controlled group of corporations or an affiliated service group or under common control (within the meaning of Section 414(b), (c) or (m) of the Code), but only for the period during which such other entity is so affiliated with the Company.
1.3“Age” means a Participant’s age in whole years as of the last day of the Plan Year.
1.4“Beneficiary” shall mean the person or persons entitled to receive benefits under the Plan upon the death of a Participant, as provided in Section 6.6.
1.5“Board of Directors” shall mean the Board of Directors of the Company, as constituted from time to time.
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1.6“Change of Control” shall mean the date on which the first of the following events occur:
(a)any one person or more than one person acting as a Group (within the meaning assigned to such term in Treasury Regulation §§1.409A-3(i)(5)(v)(B) and (vi)(D)) (excluding Affiliates) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) all or substantially all of the business or assets from the Company (but in no event shall a Change of Control be deemed to have occurred where such acquired assets have a total Gross Fair Market Value (as defined below) of less than 40% of the total Gross Fair Market Value of all of the assets of the Company immediately before such acquisition or acquisitions);
(b)any one person or more than one person acting as a Group (excluding Affiliates) acquires more than 50% of the total fair market value or total voting power of stock of the Company, provided that if such person or persons are considered either to own more than 50% of the total fair market value or total voting power of the stock of the Company or to possess Effective Control (as defined below) of the Company, the acquisition of additional stock or control, respectively, of the Company by the same person or persons is not considered to cause a Change of Control of the Company under this subsection (b); or
(c)(i) any one person, or (ii) a majority of the Board of Directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board of Directors as constituted before the appointment or election.
“Effective Control” for purposes of this Plan means that any one person or more than one person acting as a Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing 30% or more of the total voting power of the stock of the Company, provided that if such person or persons are considered either to own more than 50% of the total fair market value or total voting power of the stock of the Company or to possess Effective Control of the Company, the acquisition of additional stock or control, respectively, of the Company by the same person or persons is not considered to cause a change in the Effective Control of the Company. The term “Gross Fair Market Value” shall mean the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. For purposes of determining stock ownership, the attribution rules described in Section 318(a) of the Code shall apply and stock underlying a vested option is considered owned by the individual who holds the vested option, provided that if a vested option is exercisable for stock that is not substantially vested (as defined by Treasury Regulation §§83-3(b) and (j)), the stock underlying the option shall not be treated as owned by the individual who holds the option. If payments from the Plan are made on account of a Change of Control event described in subsection (a) or (b), above, that occur because the Company or an Affiliate purchases its stock held by the Participant or because the Company, an Affiliate, or a third party purchases a stock right held by the Company or Affiliate, or that are calculated by reference to the value of the Company or Affiliate’s stock, such payments shall be completed not later than 5 years after the Change of Control event. A Change of Control shall be subject to such further rules, conditions, limitations, restrictions, or clarifications prescribed under Section
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409A of the Code, including, without limitation, Treasury Regulation §§1.409A-3(i)(5)(v), (vi) and (vii).
1.7“Code” shall mean the Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code shall include such section, any valid regulation promulgated thereunder, and any comparable provision of any future legislation amending, supplementing or superseding such section.
1.8“Committee” shall mean the Supplemental Executive Retirement Plan Committee, as it may be constituted from time to time.
1.9“Company” shall mean Enerpac Tool Group Corp., a Wisconsin corporation.
1.10“Company Contributions” shall mean the amounts credited to Participants’ Accounts under the Plan pursuant to Section 3.
1.11“Compensation” shall mean the base salary of a Participant for a Plan Year beginning on or after September 1, 2010 and any bonuses paid to him or her under any of the Company’s or Affiliate’s incentive or bonus plans during such Plan Year. Any bonuses scheduled to be received by a Participant in the Plan Year following his or her final Plan Year of active participation in the Plan and not otherwise excluded below shall also be included as “Compensation” paid during his or her final Plan Year. Notwithstanding the foregoing, “Compensation” shall not include (a) any bonus or salary payments made pursuant to a Change of Control, (b) any earnings accrued or bonuses paid under the Actuant Corporation Medium Term Incentive Bonus Plan and the Actuant Corporation Long Term Incentive Plan, and (c) any payments or income received from stock options, restricted stock, or restricted stock units. With respect to any given Plan Year, the Committee also retains discretion to include in “Compensation” any payments made to a Participant by his or her employer prior to such employer becoming an Affiliate.
1.12“Disability” or “Disabled” shall mean the mental or physical inability of a Participant to perform the regularly assigned duties of his or her employment, provided that such inability (a) has continued or is expected to continue for a period of at least 12 months and (b) is evidenced by the certificate of a physician satisfactory to the Committee stating that such inability exists and is likely to be permanent.
1.13“Eligible Employee” shall mean any executive serving on the Executive Leadership Team. Notwithstanding the foregoing, any executive serving on the Executive Leadership Team but working outside the United States on a permanent basis shall only be considered an “Eligible Employee” for the Plan Year if such individual submits a request for participation no less than 30 days prior to the beginning of the Plan Year and the Committee approves such request.
1.14“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended. Reference to a specific section of ERISA shall include such section, any valid regulation promulgated thereunder, and any comparable provision of any future legislation amending, supplementing or superseding such section.
1.15“Participant” shall mean an Eligible Employee who (a) has become a Participant in the Plan pursuant to Section 2.1 and (b) has not ceased to be a Participant pursuant to Section 2.2.
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1.16“Participant’s Account” or “Account” shall mean as to any Participant the separate account maintained on the records of the Company in order to reflect his or her interest under the Plan.
1.17“Plan” shall mean the Enerpac Tool Group Corp. Supplemental Executive Retirement Plan, as set forth in this instrument and as hereafter amended from time to time, and, to the extent (and only to the extent) required under Section 409A of the Code, any other plan with which the Plan is required to be aggregated under Section 409A of the Code. This Plan is intended to constitute an account balance plan, as defined in Treasury Regulation §1.409A-1(c)(2)(i)(A).
1.18“Plan Year” shall mean each 12-month period beginning September 1 and ending the following August 31.
1.19“Termination of Employment” shall mean the date of the Participant’s separation from service (within the meaning of Treasury Regulation §§1.409A-1(h) and 1.409A-2(i)(2)) for any reason, including by reason of death or Disability, with the Company and its Affiliates, except that in applying Sections 1563(a)(1), (2), and (3) of the Code for purposes of determining the controlled group of corporations under Section 414(b) of the Code, the language “at least 50 percent” is used instead of “at least 80 percent” each place it appears in Section 1563(a)(1), (2), and (3) of the Code, and in applying Treasury Regulation §1.414(c)-2 for purposes of determining trades or businesses (whether or not incorporated) that are under common control for purposes of Section 414(c) of the Code, “at least 50 percent” is used instead of “at least 80 percent” each place it appears in Treasury Regulation §1.414(c)-2. The employment relationship is treated as continuing intact while the Participant is on military leave, sick leave, or other bona fide leave of absence if the period of any such leave does not exceed six months, or if longer, so long as the Participant retains the right to reemployment with the Company or an Affiliate under an applicable statute or by contract. A leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Participant will return to perform services for the Company or an Affiliate. If the period of leave exceeds six months and the Participant does not retain a right to reemployment under an applicable law or by contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period.
1.20“Years of Service” shall be determined in accordance with the following paragraphs:
(a)An Eligible Employee shall be credited with one (1) Year of Service for each full, completed year of employment with the Company or an Affiliate. Full years of employment shall be measured from the Eligible Employee’s most recent employment date. Partial years of employment shall not be recognized. Years of employment ending prior to the effective date of the Plan are included in determining Years of Service.
(b)If an Eligible Employee previously worked for the Company or an Affiliate, terminated employment, and was subsequently reemployed by the Company or an Affiliate, full years of employment accrued prior to the most recent reemployment date shall not be counted as Years of Service, except as shall be determined by the Committee in its sole discretion.
(c)An Eligible Employee’s service with a predecessor employer shall not be counted as Years of Service, except as shall be determined by the Committee in its sole discretion.
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For purposes of determining the amount of the Company Contribution to which a Participant is entitled under Section 3, a Participant’s total Years of Service for a Plan Year shall be determined as of the last day of such Plan Year.
Section 2
Participation
2.1Participation
Each Eligible Employee shall become a Participant in the Plan as of the later of: (a) September 1, 2010 or (b) the date on which the employee becomes an Eligible Employee.
2.2Termination of Participation
An Eligible Employee who has become a Participant shall remain a Participant until his or her entire vested Account balance is distributed. However, an Eligible Employee who has become a Participant may or may not be an active Participant receiving a Company Contribution for a particular Plan Year, depending upon whether he or she is still serving on the Executive Leadership Team.
Section 3
Company Contributions
The Company shall make a Company Contribution to the Plan for a Plan Year on behalf of each Participant, provided that such Participant is serving on the Executive Leadership Team on the last day of such Plan Year or incurred a termination of employment with the Company and all Affiliates prior to the last day of such Plan Year by reason of death, Disability, or another event approved by the Committee in its discretion. The amount of the Company Contribution will equal a percentage of the Participant’s Compensation for that Plan Year, and such percentage of Compensation shall be based on the total of the Participant’s Age and Years of Service, as determined in accordance with the following chart:
Age + Years of Service Percentage of Compensation
Less than 50 3%
50-59 4%
60-69 5%
70 or more 6%
Notwithstanding the foregoing, the Committee has the discretion to make a Company Contribution to a Participant based on a fixed dollar amount or percentage of pay other than the percentage set forth above as determined by the Committee, so long as (a) such dollar amount or
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percentage is higher than the amount or percentage that would otherwise apply based on the chart above; and (b) the Committee communicates the new dollar amount or percentage to the Participant in writing for each Plan Year in which the new dollar amount or percentage applies.
An individual who first becomes a Participant during a Plan Year shall be eligible to receive a Company Contribution for that Plan Year based on Compensation paid during the entire Plan Year, so long as such Participant is otherwise serving on the Executive Leadership Team on the last day of such Plan Year or incurred a termination of employment with the Company and all Affiliates prior to the last day of such Plan Year by reason of death, Disability, or another event approved by the Committee in its discretion.
Section 4
Notional Investments
4.1 Deemed Interest Investment Option.
(a) Deemed Interest Investment Option. Effective for Plan Years beginning September 1, 2023, the Committee may, but is not required to, make available a “Deemed Interest Investment Option” as an investment option under the Plan. In the event a portion of a Participant’s Account is invested in the Deemed Interest Investment Option, such portion shall be credited with deemed interest as of the end of each month, as follows. A Participant’s monthly interest credit with respect to the portion of the Participant’s Account that is attributable to the Participant’s service with the Company or an Affiliate during a particular Plan Year shall be equal to: (a) such portion of the Participant’s Account as of the first day of the month, less any distributions of such portion of the Participant’s Account during the month pursuant to Section 6, multiplied by (b) a rate equal to one-twelfth of the applicable “Deemed Interest Rate.” The “Deemed Interest Rate” shall be a rate of interest determined annually by the Committee prior to the beginning of each Plan Year (except in the event that the Committee decides not to offer a Deemed Interest Investment Option with respect to any Plan Year or with respect to any Company Contributions for a Plan Year). If offered, the Deemed Interest Rate shall be announced to Participants prior to the start of each Plan Year.
(b) One-Time Election of Deemed Interest Investment Option. If a Deemed Interest Investment Option is made available, the Participant may only elect to invest in the Deemed Interest Investment Option during the investment election window established by the Committee for the initial election with respect to such Company Contributions attributable to service with the Company or an Affiliate during the applicable Plan Year designated by the Committee. Participants may not transfer any portion of the Participant’s Account that is invested in any other Deemed Investment Option to a Deemed Interest Investment Option.
(c) Transfer to any other Deemed Investment Option. A participant may transfer some or all of the potion of the Participant’s Account notionally invested in a Deemed Interest Investment Option to a Deemed Investment Option (other than a Deemed Interest Investment Option), in accordance with rules and procedures established by the Committee. In the event such a transfer is made from a
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Deemed Interest Investment Option to any other Deemed Investment Option, such amounts may not be transferred back to a Deemed Interest Investment Option.
(d) Grandfathered Deemed Interest Rates. For Plan Years beginning prior to September 1, 2023, the Administrator designated one investment option, the Deemed Interest Investment Option, for the notional investment of Participants’ Accounts. Except in the event of an elective transfer by a Participant described in Section 4.1(c), the Deemed Interest Rate for a Plan Year beginning prior to September 1, 2023, shall apply to all Company Contributions attributable to service with the Company or an Affiliate during the applicable Plan Year for as long as those contributions are maintained under the Plan.
4.2 Deemed Investment Option.
(a) Deemed Investment Option Effective Date. Effective November 1, 2022, the Company shall make Deemed Investment Options available under the Plan.
(b) Deemed Investment Option. The term “Deemed Investment Option” means an investment fund, index or vehicle selected by the Committee and made available to Participants for the deemed investment of their Accounts. The Deemed Interest Investment Option shall generally be considered a Deemed Investment Option, except that the rules described in Section 4.1 shall override any rules applicable to Deemed Investment Options under the Section 4.2 that are inconsistent with the rules of Section 4.1.
(c) Administration of Deemed Investment Options. The Committee may promulgate any rules and procedures with respect to Deemed Investment Options as it deems appropriate, in its discretion. The Committee shall select the Deemed Investment Options to be made available to Participants for the deemed investment of their Accounts under the Plan. The Committee may change, discontinue, or add to the Deemed Investment Options made available under the Plan at any time in its sole discretion. A Participant must select the Deemed Investment Options for their Account in the manner set forth by the Committee and may make changes to their selections in accordance with procedures established by the Committee. In addition, the Committee may choose a default Deemed Investment Option that will apply to Company Contributions for which a Participant has not made an investment election under this Section 4.2. The Committee may also replace Deemed Investment Options with other Deemed Investment Options and require Participants to elect new Deemed Investment Option at any time (except as described in Section 4.1(d)). The Committee’s administration of the Deemed Investment Options is not required to be uniform amongst the Participants. The Committee may delegate its duties and authority under Section 4 of this Plan to employees of the Company, as the Committee deems appropriate.
(d) Investment Earnings. Each Account (or portion thereof, as applicable) shall be adjusted for earnings or losses based on the performance of the Deemed Investment Options selected (but see Section 4.1(a) with respect to Deemed Interest Investment Options) by the Participant. Earnings and losses shall be
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computed on each Valuation Date. For this purpose, “Valuation Date” means each business day of the Plan Year.
(e) Deemed Investment Options are Notional. Deemed Investment Options are for recordkeeping purposes only and do not allow Participants to direct any Company assets (or, if applicable, the assets of any trust related to the Plan). Accounts are not actually invested in the Deemed Investment Options available under the Plan and Participants do not have any real or beneficial ownership in any Deemed Investment Option.
(f) No Warranties. Neither the Company nor the Committee (nor its delegees) warrants or represents that the value of any Participant’s Account will increase. Each Participant assumes the risk in connection with the deemed investment of their Account.
Section 5
Accounting
5.1Participants’ Accounts
For each Plan Year, at the direction of the Administrator, there shall be established and maintained on the records of the Company, a “Company Contribution Account” to reflect the Company Contributions made on the Participant’s behalf during such Plan Year and the notional income, earnings or losses attributable thereto (as determined in accordance with Section 4). Except as expressly modified, all accounts maintained for a Participant are referred to collectively as the Participant’s “Account.”
5.2Participants Remain Unsecured Creditors
All amounts credited to a Participant’s Account under the Plan shall continue for all purposes to be a part of the general assets of the Company. Each Participant’s interest in the Plan shall make him or her only a general, unsecured creditor of the Company.
5.3Accounting Methods
The accounting methods or formulae to be used under the Plan for the purpose of maintaining the Participants’ Accounts, including the calculation and crediting of notional income, earnings or losses, shall be determined by the Administrator, in its sole discretion. The accounting methods or formulae selected by the Administrator may be revised from time to time. If a Participant has a question regarding the accounting methods or formulae applicable to the maintenance of his or her Account, the Participant may submit a written request to the Administrator for a written explanation and confirmation of such accounting methods or formulae. However, no Participant or Beneficiary shall have any right to examine books, records, or accounts of the Company in connection with amounts payable under the Plan.
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5.4Reports
Each Participant shall have access at any time to statements of his or her Account, reflecting the status of his or her interest in the Plan.
Section 6
Distributions
6.1General Timing of Distributions
Payment of a Participant’s Account shall commence upon the expiration of the six-month period following the Participant’s Termination of Employment. In the event amounts under the Plan are payable in installments, the first annual installment shall be delayed not less than six months after such Participant’s Termination of Employment, with all other annual installment payments payable as originally scheduled. During the delay in payment specified under this Section 6.1, unpaid amounts shall continue to be credited with notional income, earnings or losses attributable thereto (as determined in accordance with Section 4). Amounts contributed to the Plan on behalf of a Participant following commencement of his/her payments under the Plan shall be either (i) distributed in a lump sum to the Participant in the same tax year as the rest of the Participant’s account balance under this Section, or (ii) with respect to amounts payable in installments under Section 6.2(b), divided by the appropriate fraction (1/5 or 1/10, as elected), and the resulting amount shall be distributed in the same tax year as the first installment payment, with the remainder included in the remainder of the Participant’s account to be distributed as part thereof.
6.2Form of Payment
(a)Election. For each Plan Year in which a Participant is eligible to receive a Company Contribution, the Participant shall submit a benefit election form as to the form of payment for his or her Company Contribution (and associated notional income, earnings or losses attributable thereto (as determined in accordance with Section 4)) for such Plan Year. The Administrator in its sole discretion, shall determine the manner and deadlines for Participants to make these form of payment elections, and such election shall become irrevocable on the December 31 immediately prior to the start of such Plan Year. For a Participant who first becomes eligible to participate in the Plan in the middle of a Plan Year, the Participant’s benefit election form must be submitted within the first 30 days after becoming an Eligible Employee. Such election shall become irrevocable upon the expiration of this 30-day period. Also, if the Participant first becomes eligible after December 31 of a given year, he or she shall also make a benefit election for the forthcoming Plan Year within the first 30 days after becoming an Eligible Employee, and such benefit election shall become irrevocable upon the expiration of the 30-day period. If the Participant fails to complete a benefit election form for a Plan Year, he or she shall receive his or her benefit (and associated notional income, earnings or losses attributable thereto (as determined in accordance with Section 4)) for such Plan Year in accordance with his or her benefit election form for the immediately preceding
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Plan Year, and if no such benefit election form for the immediately preceding Plan Year exists, in the form of a lump sum.
(b)Forms of Payment. Payment (or installment payments) of a Participant’s Account shall be made in cash. Subject to any acceleration of payments required under this Section 6, a Participant may elect to receive such payment in one of the following forms of payment upon such Participant’s Termination of Employment commencing as of the date specified in Section 6.1: (i) a lump sum payment, (ii) five annual installment payments, or (iii) ten annual installment payments; provided, however, that a Participant who elects to receive annual installments for five or ten years shall instead receive payment in a lump sum equal to the balance then credited to his or her Account pursuant to and in accordance with the applicable provisions of this Section 6 if: (A) such Participant’s Termination of Employment occurs due to his or her death or Disability, or (B) distribution to such Participant is accelerated due to a Change of Control. If the Participant elected to receive five or ten annual installment payments, subject to any acceleration of payments required under this Section 6, his or her first installment shall be equal to 1/5th or 1/10th (respectively) of the balance then credited to his or her Account that is attributable to service with the Company or an Affiliate during the Plan Year with respect to which the election relates. Each subsequent annual installment shall be paid to the Participant in each of the Participant’s subsequent taxable years commencing with such Participant’s second taxable year following the taxable year in which his or her Termination of Employment occurred and ending in the Participant’s taxable year in which the final annual installment is due. The amount of each subsequent installment shall be equal to the balance then credited to the Participant’s Account that is attributable to service with the Company or an Affiliate during the Plan Year with respect to which the election relates, divided by the number of annual installments remaining to be made. While a Participant’s Account is in installment payout status, the unpaid balance credited to the Participant’s Account shall continue to be credited with notional income, earnings or losses attributable thereto (as determined in accordance with Section 4).
(c)No Subsequent Change in Form or Timing of Payment. Notwithstanding any provision of this Plan or Section 409A of the Code to the contrary, neither the Participant nor the Company is permitted to change or revoke the form or timing of payment with respect to a Participant’s Company Contributions on or after the date on which such election becomes irrevocable.
6.3Change of Control
If there is a Change of Control, the balance then credited to a Participant’s Account shall be distributed to him or her in a lump sum within 90 days after the date of the Change of Control.
6.4Special Rule for Death
If a Participant dies, the balance then credited to his or her Account shall be distributed to his or her Beneficiary in a lump sum within 90 days after the date of death.
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6.5Forfeiture of Company Contributions
If, prior to a Change of Control, the benefit of any Participant in the Plan becomes subject to any “clawback” or similar forfeiture policy adopted by the Company, then the portion of the Participant’s Account subject to such policy may be forfeited at the discretion of the Committee.
6.6Beneficiary Designations
Each Participant may, pursuant to such procedures as the Administrator may specify, designate one or more Beneficiaries. A Participant may designate different Beneficiaries (or may revoke a prior Beneficiary designation) at any time by delivering a new designation (or revocation of a prior designation) in like manner. Any designation or revocation shall be effective only if it is received by the Administrator. However, when so received, the designation or revocation shall be effective as of the date the notice is executed (whether or not the Participant still is living), but without prejudice to the Administrator on account of any payment made before the change is recorded. The last effective designation received by the Administrator shall supersede all prior designations. If a Participant dies without having effectively designated a Beneficiary, or if no Beneficiary survives the Participant, the Participant’s Account shall be payable to his or her surviving spouse, or, if the Participant is not survived by his or her spouse, the Account shall be paid to his or her estate.
6.7Payments to Incompetents
If any individual to whom a benefit is payable under the Plan is a minor or legally incompetent, the Committee shall determine whether payment shall be made directly to the individual, any person acting as his or her custodian or legal guardian under the Uniform Transfers to Minors Act, his or her legal representative or a near relative, or directly for his or her support, maintenance or education.
6.8Undistributable Accounts
Each Participant and (in the event of death) his or her Beneficiary shall keep the Administrator advised of his or her current address. If the Administrator is unable to locate a Participant to whom a Participant’s Account is payable under this Section 6, the Participant’s Account shall be held in suspense pending location of the Participant, without any prejudice to the Committee, the Administrator, or the Company (and each of their respective authorized delegates), as the case may be, including, without limitation, for any additional tax liability resulting from such delay in payment, provided that such unpaid amounts shall continue to be credited with notional income, earnings or losses attributable thereto (as determined in accordance with Section 4). If the Administrator is unable to locate a Beneficiary to whom a Participant’s Account is payable under this Section 6 within six (6) months (or such other period during which payment must commence under this Section 6 or, if later, such other period permitted under Section 409A of the Code) of the Participant’s death, the Participant’s Account shall be paid to the Participant’s estate.
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6.9Committee Discretion
Within the specific time periods described in this Section 6, the Committee shall have sole discretion to determine the specific timing of the payment of any Account balance under the Plan. In addition and notwithstanding any contrary provision of the Plan, the Committee, in its sole discretion, may cause the balance credited to a Participant’s Account to be paid to him or her in a lump sum at any time following the Participant’s termination of employment with the Company and all Affiliates. Notwithstanding the foregoing, the Committee shall retain and exercise such discretion reserved hereunder only to the extent such retention and exercise of discretion does not violate the requirements of Section 409A of the Code.
6.10Withholding; Reporting
To the extent required by law in effect at the time any distribution is made from the Plan, the Company shall withhold any taxes and such other amounts required to be withheld. Further, to the extent required by law, the Company shall report amounts deferred and/or amounts taxable under the Plan to the appropriate governmental authorities, including, without limitation, to the United States Internal Revenue Service.
Section 7
Participant’s Interest in Account
Subject to Sections 5.2 (relating to creditor status) and 9.2 (relating to amendment and/or termination of the Plan), a Participant’s interest in the balance credited to his or her Account shall become fully vested and nonforfeitable at the earliest of the following dates:
(a)The date the Participant completes five Years of Service.
(b)The date of the Participant’s death while in the employ of the Company or an Affiliate.
(c)The date of the Participant’s Termination of Employment by reason of Disability.
(d)The Participant’s attainment of age 60 while in the employ of the Company or an Affiliate.
Section 8
Administration of the Plan
8.1Plan Administrator
The Company is hereby designated as the administrator of the Plan (within the meaning of Section 3(16)(A) of ERISA).
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8.2Committee
The Committee shall have the authority to control and manage the operation and administration of the Plan. Any member of the Committee may resign at any time by notice in writing mailed or delivered to the Secretary of the Company.
8.3Actions by Committee
Each decision of a majority of the members of the Committee then in office shall constitute the final and binding act of the Committee. The Committee may act with or without a meeting being called or held and shall keep minutes of all meetings held and a record of all actions taken by written consent.
8.4Powers of Committee
The Committee shall have all powers and discretion necessary or appropriate to supervise the administration of the Plan and to control its operation in accordance with its terms, including, but not by way of limitation, the following powers:
(a)To interpret and determine the meaning and validity of the provisions of the Plan and to determine any question arising under, or in connection with, the administration, operation or validity of the Plan or any amendment thereto;
(b)To determine any and all considerations affecting the eligibility of any employee to become a Participant or remain a Participant in the Plan;
(c)To cause one or more separate Accounts to be maintained for each Participant;
(d)To cause Company Contributions and notional income, earnings or losses attributable thereto (as determined in accordance with Section 4) to be credited to Participants’ Accounts;
(e)To establish and revise an accounting method or formula for the Plan, as provided in Section 5.3;
(f)To determine the manner and form in which any distribution is to be made under the Plan;
(g)To determine the status and rights of Participants and their spouses, Beneficiaries or estates;
(h)To employ such counsel, agents and advisers, and to obtain such legal, clerical and other services, as it may deem necessary or appropriate in carrying out the provisions of the Plan;
(i)To establish, from time to time, rules for the performance of its powers and duties and for the administration of the Plan;
(j)To arrange for annual distribution to each Participant of a statement of benefits accrued under the Plan;
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(k)To establish a claims and appeal procedure satisfying the minimum standards of Section 503 of ERISA pursuant to which individuals or estates may claim Plan benefits and appeal denials of such claims;
(l)To delegate to any one or more of its members or to any other person, severally or jointly, the authority to perform for and on behalf of the Committee one or more of the functions of the Committee under the Plan; and
(m)To decide all issues and questions regarding Account balances, and the time, form, manner, and amount of distributions to Participants.
8.5Decisions of Committee
Benefits under the Plan will be paid to a person only if the Committee or its delegate decides in its discretion that the person is entitled to such benefits. All actions, interpretations, and decisions of the Committee or its delegate shall be conclusive and binding on all persons, and shall be given the maximum possible deference allowed by law. No action at law or in equity shall be brought to recover benefits under this Plan until the appeal rights herein provided have been exercised and the Plan benefits requested in such appeal have been denied in whole or in part. After exhaustion of the Plan’s claim procedures, any further legal action taken against the Plan or its fiduciaries by the Participant or other claimant must be filed in a court of law no later than 120 days after the Committee’s final decision regarding the claim.
8.6Administrative Expenses
Expenses incurred in the administration of the Plan by the Committee or otherwise, including legal fees and expenses, shall be paid by the Company in such proportions and allocations as the Committee determines.
8.7Eligibility to Participate
No member of the Committee who is also an employee of the Company or an Affiliate shall be excluded from participating in the Plan if otherwise eligible, but he or she shall not be entitled, as a member of the Committee, to act or pass upon any matters pertaining specifically to his or her own Account under the Plan.
8.8Indemnification
The Company and any Affiliates employing Participants shall, and hereby do, indemnify and hold harmless the members of the Committee, from and against any and all losses, claims, damages or liabilities (including attorneys’ fees and amounts paid, with the approval of the Board of Directors, in settlement of any claim) arising out of or resulting from the implementation of a duty, act or decision with respect to the Plan, so long as such duty, act or decision does not involve gross negligence or willful misconduct on the part of any such individual.
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8.9Currency
The amount and notional investment of all Company Contributions shall be calculated in U.S. dollars at actual exchange rates, as established by the Committee. Any distributions from this Plan shall also be made in U.S. dollars.
Section 9
Modification or Termination of Plan
9.1Employers’ Obligations Limited
The Company intends to continue the Plan indefinitely, and to maintain each Participant’s Account until it is scheduled to be paid to him or her in accordance with the provisions of the Plan. However, the Plan is voluntary on the part of the Company, and the Company does not guarantee to continue the Plan. The Company at any time may, by amendment of the Plan, suspend or discontinue Company Contributions, with or without cause. Complete discontinuance of all Company Contributions shall be deemed a termination of the Plan.
9.2Right to Amend or Terminate
The Board of Directors reserves the right to alter, amend or terminate the Plan, or any part thereof, in such manner as it may determine, at any time and for any reason. The Board of Directors may delegate its authority under this subsection to any individuals or committee. The Company, in its sole discretion, may seek a private letter ruling from the Internal Revenue Service regarding the tax consequences of the Plan. If such a ruling is sought, the Committee shall have the right to adopt such amendments to the Plan, including retroactive amendments, as the Internal Revenue Service may require as a condition to the issuance of such ruling.
9.3Effect of Termination
If the Plan is terminated pursuant to this Section 9, the balances credited to the Accounts of the affected Participants shall be distributed to them at the time and in the manner set forth in Section 6; provided, however, that the Committee, in its sole discretion may authorize accelerated distribution of Participants’ Accounts as of any earlier date; provided that such discretion reserved to the Committee to accelerate the form and timing of the distribution of Participants’ Accounts shall be exercised only to the extent the termination of the Plan arises pursuant to and in accordance with one of the following provisions:
(a)Corporate Dissolution or Bankruptcy. The Plan is terminated and liquidated by the Company within 12 months of a corporate dissolution taxed under Section 331 of the Code, or with the approval of a bankruptcy court pursuant to Section 503(b)(1)(A) of the Bankruptcy Code, provided such amounts are included in the Participants’ gross incomes in the latest of the following years (of, if earlier, the taxable year in which such amounts are actually or constructively received): (i) the calendar year in which the Plan is terminated and liquidated, (ii) the first calendar year in which amounts are no longer subject to a substantial risk of
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forfeiture, or (iii) the first calendar year in which the payment is administratively practicable.
(b)Change of Control Event. The Company takes irrevocable action to terminate and liquidate the Plan within the 30 days before or 12 months after the occurrence of a Change of Control, provided that all other plans sponsored by the Company and any of its Affiliates after the Change of Control with which the Plan is required to be aggregated under Section 409A of the Code are terminated and liquidated with respect to each Participant that experienced the Change of Control, so that all such Participants are required to receive a distribution of the amounts deferred under the Plan and such aggregated plans within 12 months of the date the Company took such irrevocable action to terminate and liquidate all such aggregated plans.
(c)Termination of All Similar Arrangements. The Plan is terminated and liquidated by the Company, provided (i) the termination and liquidation does not occur proximate to a downturn in the financial health of the Company; (ii) the Company terminates and liquidates all other plans required to be aggregated under Section 409A if the same Participant had deferrals of compensation under all such aggregated plans, (iii) no payments are made on account of the terminations (other than payments that would have been payable in the absence of the plan terminations) within 12 months of the date the Company takes irrevocable action to terminate and liquidate all such aggregated plans, (iv) all payments are made within 24 months of the of the date the Company takes irrevocable action to terminate and liquidate all such aggregated plans, and (vi) within three years following the date the Company takes irrevocable action to terminate and liquidate all such aggregated plans, the Company and its Affiliates do not establish any new nonqualified deferred compensation plans that would otherwise have been aggregated with the Plan under Section 409A of the Code if the same Participant participated in both plans.
(d)Other. The Plan is terminated and liquidated pursuant to and in accordance such other events and conditions prescribed under Section 409A of the Code.
Section 10
General Provisions
10.1Inalienability
In no event may either a Participant, a former Participant or his or her Beneficiary, spouse or estate sell, transfer, anticipate, assign, hypothecate, or otherwise dispose of any right or interest under the Plan; and such rights and interests shall not at any time be subject to the claims of creditors nor be liable to attachment, execution or other legal process. Accordingly, for example, a Participant’s interest in the Plan is not transferable pursuant to a domestic relations order.
10.2Successors, Acquisitions, Mergers, Consolidations
The terms and conditions of the Plan shall inure to the benefit of and bind the Company, the Participants, their successors, assigns and personal representatives.
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10.3Rights and Duties
Neither the Company nor the Committee shall be subject to any liability or duty under the Plan except as expressly provided in the Plan, or for any action taken, omitted or suffered in good faith.
10.4No Right to Company Assets
No Participant or other person shall acquire by reason of the Plan any right in or title to any assets, funds or property of the Company whatsoever, including, without limiting the generality of the foregoing, any specific funds, assets, or other property which the Company, in its sole discretion, may set aside in anticipation of liability hereunder. Any benefit which becomes payable hereunder shall be paid from the general assets of the Company. A Participant shall have only a contractual right to the amounts, if any, payable hereunder to that Participant. The Company’s obligations under this Plan are not secured or funded in any manner, even if the Company elects to establish a trust with respect to the Plan. Even though benefits provided under the Plan are not funded, the Company may establish a trust to assist in the payment of benefits. All investments under this Plan are notional and do not obligate the Company (or its delegates) to invest the assets of the Company or of any such trust in a similar manner.
10.5No Enlargement of Employment Rights
Neither the establishment or maintenance of the Plan, the making of any Company Contributions nor any action of the Company or the Committee, shall be held or construed to confer upon any individual any right to be continued as an employee of the Company or any Affiliate nor, upon dismissal, any right or interest in any specific assets of the Employers other than as provided in the Plan. The Company and its Affiliates expressly reserve the right to discharge any employee at any time.
10.6Apportionment of Costs and Duties
Whenever the Company is permitted or required under the terms of the Plan to do or perform any act, matter or thing, it shall be done and performed by any officer or employee of the Company who is thereunto duly authorized by the Board of Directors of the Company.
10.7Company Contributions Not Counted Under Other Employee Benefit Plans
Company Contributions under the Plan will not be considered for purposes of contributions or benefits under any other employee benefit plan sponsored by the Company or any of its Affiliates.
10.8Applicable Law
The provisions of the Plan shall be construed, administered and enforced in accordance with applicable Federal law, and to the extent not preempted thereby or inconsistent therewith, with the laws of the State of Wisconsin, without regard to the conflicts of laws provisions of that State or any other jurisdiction. Without limiting the generality and
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applicability of the foregoing and notwithstanding any provision in the Plan to the contrary, if and to the extent that the payment of any Accounts would otherwise violate the requirements of Section 409A of the Code, such Accounts shall be paid under such other conditions determined by the Administrator or the Committee, as the case may be, that cause the payment of such Accounts to comply with Section 409A of the Code and the Plan shall be construed and administered accordingly to achieve that objective.
10.9Responsibility for Legal Effect
No representations or warranties, express or implied, are made by the Company or the Committee and neither the Company nor the Committee assumes any responsibility concerning the legal, tax, or other implications or effects of the Plan.
10.10Severability
If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability shall not affect any other provisions of the Plan, and in lieu of each provision which is held invalid or unenforceable, there shall be added as part of the Plan a provision that shall be as similar in terms to such invalid or unenforceable provision as may be possible and be valid, legal, and enforceable.
10.11Captions
The captions contained in and the table of contents prefixed to the Plan are inserted only as a matter of convenience and for reference and in no way define, limit, enlarge or describe the scope or intent of the Plan nor in any way shall affect the construction of any provision of the Plan.
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Exhibit 10.11(a)
ENERPAC TOOL GROUP CORP.
CHANGE IN CONTROL AGREEMENT
FOR
CHANGE IN CONTROL AGREEMENT
FOR
[EXECUTIVE NAME]
This Agreement is made between Enerpac Tool Group Corp. (the “Corporation”), a Wisconsin corporation and [EXECUTIVE NAME] (the “Executive”) effective [INSERT DATE].
For the purposes of this Agreement, “Affiliate” means the Corporation, its subsidiaries or holding companies from time to time and any subsidiary of any holding company form time to time.
WHEREAS, the Executive is a valued employee of the Corporation; and
WHEREAS, the Executive wishes to remain an employee of the Corporation; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Executive and the Corporation agree as follows:
1.Employment and Duties. The Corporation hereby continues to employ Executive as [INSERT TITLE], with all powers and authority as are customary to this position, and Executive hereby accepts such continued employment with the Corporation in accordance with the terms and conditions set forth herein. Executive shall have such executive responsibilities as is customary with this position and as the Corporation’s Chief Executive Officer shall from time to time assign to the Executive. Executive agrees to devote Executive’s full time (excluding annual vacation time), skill, knowledge, and attention to the business of the Corporation and the performance of Executive’s duties under this Agreement. Notwithstanding the foregoing, Executive’s employment with the Corporation or its Affiliate shall continue to be subject to and otherwise governed by the terms of any applicable employment or services agreement entered into by and between Executive and the Corporation or its Affiliate (the “Employment Agreement”).
2.Termination, Bonus, and Severance Pay.
(a)As used in this Agreement, a Change in Control means:
(A)the date that any one person, or more than one person acting as a group (as defined in paragraph (i)(5)(v)(B) of Treasury Regulation Section 1.409A-3(i)(5)), acquires ownership of stock of the Corporation that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of the Corporation, determined in accordance with Treasury Regulation Section 1.409A-3(i)(5), other than in a public offering; or
(B)the date that any one person, or more than one person acting as a group (as determined in paragraph (i)(5)(v)(B) of Treasury Regulation Section 1.409A-3(i)(5)), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Corporation that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the Corporation
immediately before such acquisition (“gross fair market value” for these purposes meaning the value of the assets of the Corporation, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets); or
(C)the date that any one person, or more than one person acting as a group (as determined under paragraph (i)(5)(v)(B) of Treasury Regulation Section 1.409A-3(i)(5)), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Corporation possessing 30 percent or more of the total voting power of the stock of the Corporation; or
(D)the election of directors constituting a majority of the Board of Directors (the “Board”) pursuant to a proxy solicitation not recommended by the Board.
(b)As used in this Agreement, a “Triggering Event” means the occurrence of one or more of the following events within the period of 24 months following a Change in Control, without the Executive’s consent:
(A)(A) a material reduction in the base salary paid to the Executive or (B) a material reduction in Executive’s bonus opportunity or (C) a material reduction in the total aggregate value of the fringe benefits received by the Executive compared to the levels received by the Executive at the time of a Change in Control; or
(B)a material diminution in the Executive’s authority, responsibilities or duties or a material diminution in the authority, duties, or responsibilities of the supervisor to whom the Executive is required to report (including a requirement that an Executive report to an officer or employee of the Corporation instead of reporting directly to the CEO) compared to the levels or circumstances existing at the time of a Change in Control; or
(C)a change in the location or headquarters where the Executive is normally expected to provide services to a location of 40 or more miles from the previous location existing at the time of the Change in Control; or
(D)the Corporation’s material breach of its obligations under this Agreement or the Employment Agreement, if applicable.
Notwithstanding the foregoing, a Triggering Event will not be deemed to have occurred until the Executive has provided notice to the Corporation of the existence of the Triggering Event within 45 days of the initial existence of the Triggering Event, and the Corporation has failed within a period of at least 60 days to adequately remedy the Triggering Event condition (the “Triggering Event Notice Period”).
(c)Except as provided in clause (d) below, and otherwise subject to the terms and conditions of the Agreement, if (i) the Corporation terminates Executive’s employment within the period beginning 6 months prior to a Change in Control and ending 24 months following a Change in Control, or (ii) Executive voluntarily terminates Executive’s services within 30 days following the expiration of the Triggering Event
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Notice Period (and at a time when Executive’s employment could not otherwise be terminated by the Corporation for cause in accordance with clause (d) below) that occurs within 24 months following the date of a Change in Control:
(A)the Corporation shall pay to the Executive a lump sum equal to the sum of twice the amount of the highest per annum base rate of salary in effect with respect to the Executive during the 2 year period immediately prior to the termination of employment; and
(B)the Corporation shall pay to the Executive a lump sum the greater of:
a.twice the amount of the highest annual bonus or annual incentive compensation earned by the Executive under any annual cash bonus or annual incentive compensation plan of the Corporation during the 3 complete fiscal years of the Corporation immediately preceding the termination of employment; or
b.twice the amount of the highest annual bonus or annual incentive compensation opportunity, calculated at target, for the Executive under any annual cash bonus or annual incentive compensation plan of the Corporation during the 3 complete fiscal years of the Corporation immediately preceding the termination of employment; and
(C)any outstanding equity or long-term incentive awards held by Executive immediately prior to Executive’s termination of employment by the Corporation (or in the event of a voluntary termination due to a Triggering Event, immediately prior to the expiration of the Triggering Event Notice Period where the Corporation has not remedied the Triggering Event condition in accordance with subsection 2(b) above) shall be fully vested (at target level for performance-based awards) and, with respect to any, stock options, stock appreciation rights or similar awards, Executive shall have the full duration of the original exercise period to exercise such award; and
(D)the Corporation shall pay to Executive in a lump sum an amount equal to the sum of the Corporation’s monthly cost with respect to (A) the welfare benefits in which the Executive (or the eligible dependent of the Executive) was enrolled or otherwise participating immediately prior to the date of the Executive’s termination, including for sake of clarity the portion of any monthly premium or cost that the Corporation would normally pay or provide based on the applicable group medical, dental and vision coverage, if any, in which the Executive (and any applicable dependent) was enrolled immediately prior to the date of termination, and (B) other perquisites Executive was receiving or being provided at the highest level within the 12 month period preceding the date of the Executive’s termination, multiplied by 24. For purposes hereof, perquisites will include the cost paid by the Corporation for the Executive’s lease of a car or a car allowance, as the case may be. For purposes of clarification, this lump sum payment shall not be dependent upon any election to continue eligible group health plan coverage under Section 4980B of the Code (“COBRA”), and neither the Executive nor any eligible dependent shall have any right to continue such coverage other than as permitted under and otherwise in accordance with all applicable conditions and provisions applicable to such COBRA coverage. To the
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extent that the Executive (or any eligible dependent) wishes to elect continuation coverage, the Executive (or the eligible dependent) is responsible for the timely election of such continuation coverage and payment of any applicable premiums under COBRA.
(d)For the avoidance of doubt, the amounts described in (B) above shall not take into account any compensation opportunity under any long-term incentive plan of the Corporation. The lump sums described in (A), (B) and (D) above shall be paid by the Corporation to the Executive within 60 days after the Executive’s termination of employment, or, in the event of a voluntary termination due to a Triggering Event.
(e)Notwithstanding any provision herein, no amounts will be due under this Agreement in the event the Executive’s employment is terminated by the Corporation for cause. The term “for cause” shall mean solely the following events:
(A)conviction, or a plea of guilty or no contest, of a felony;
(B)conviction, or a plea of guilty or no contest, of a crime involving dishonesty, disloyalty or fraud;
(C)reporting to work under the influence of alcohol;
(D)the use of illegal drugs (whether or not at the workplace);
(E)conviction, or a plea of guilty or no contest, of conduct in conjunction with Executive’s duties hereunder which could reasonably be expected to, or which does, cause the Corporation or any of its affiliates public disgrace or disrepute or economic harm;
(F)repeated failure to perform duties as reasonably directed by the Board or CEO (or the person to whom Executive directly reports);
(G)gross negligence or willful misconduct with respect to the Corporation;
(H)obtaining any personal profit not thoroughly disclosed to and approved in writing by the Board or CEO in connection with any transaction entered into by, or on behalf of, the Corporation or any Affiliate;
(I)violation of any of the terms of the Corporation’s or any Affiliate's established policies which is not cured to the Board’s reasonable satisfaction within twenty (20) working days after you receive written notice thereof; or
(x) any other material breach of this Agreement by you which is not cured to the Board’s reasonable satisfaction within twenty (20) working days after you receive written notice thereof.
(f)Notwithstanding anything to the contrary set forth in this Section 2 or elsewhere in this Agreement, any payments made hereunder:
(A)within 2-½ months of the end of the Corporation’s taxable year containing the Executive’s severance from employment, or
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(B)within 2-½ months of the Executive’s taxable year containing the severance from employment shall be exempt from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations thereunder. Payments subject to subparagraphs (i) or (ii) shall be treated and shall be deemed to be an entitlement to a separate payment within the meaning of Section 409A of the Code and the regulations thereunder.
To the extent payments under this Agreement are not exempt from Section 409A under subparagraphs (i) or (ii) above:
(C)any payments made in the first 6 months following the Executive’s termination from employment that are equal to or less than the lesser of the amounts described in Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and (2) shall be exempt from Section 409A. Payments subject to this subparagraph (iii) shall be treated and shall be deemed to be an entitlement to a separate payment within the meaning of Section 409A of the Code and the regulations thereunder.
To the extent payments under this Agreement are not exempt from Section 409A under subparagraphs (i), (ii) or (iii) above:
(D)any payments made equal to or less than the applicable dollar amount under Section 402(g)(1)(B) of the Code for the year of severance from employment shall be exempt from Section 409A in accordance with Treasury Regulation Section 1.409A-1(b)(9)(v)(D). Payments subject to this subparagraph (iv) shall be treated and shall be deemed to be an entitlement to a separate payment within the meaning of Section 409A of the Code and the regulations thereunder.
To the extent payments under this Agreement are not exempt from Section 409A under subparagraphs (i), (ii), (iii) or (iv) above, and to the extent the Executive is a "specified employee" (as defined below):
(E)payments due to the Executive under Section 2 shall begin no sooner than 6 months after the Executive's severance from employment (other than for Death); provided, however, that any payments not made during the 6 month period described in this subsection 2(e) due to the 6-month delay period required under Treasury Regulation Section 1.409A-3(i)(2) shall be made in a single lump sum as soon as administratively practicable after the expiration of such 6 month period, and the balance of all other payments required under this Agreement shall be made as otherwise scheduled in this Agreement.
(f) For purposes of this Section 2, any reference to severance of employment or termination of employment shall mean a "separation from service" as defined in Treasury Reg. Section 1.409A-1(h). For purposes of this Agreement, the term "specified employee" shall have the meaning set forth in Treasury Reg. Section 1.409A-1(i).
(g) Notwithstanding any other provision of this Agreement, in order to be entitled to receive any payments or benefits that otherwise may become due hereunder, Executive must (i) sign a release and waiver of all claims in a form provided by or otherwise acceptable to the Corporation, and such release and waiver must become
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irrevocable, and (ii) comply with all applicable restrictive covenants and preemptive rights pursuant to any Employment Agreement or other agreement entered into between Executive and the Corporation or its affiliate.
3.Excise Tax Adjustment.
(a)Subject to the provisions of this Section 3, in the event it is determined that all or any part of the severance benefits payable to Executive under this Agreement or any other payments or benefits payable to Executive under any other agreement with, or plan or policy of, Corporation (the “Total Payments”) will, as determined by an independent accounting firm selected by Corporation, be subject to the tax (the “Excise Tax”) imposed by Code Section 4999 (or any similar tax that may hereafter be imposed), then such payment shall be either: (i) provided to Executive in full, or (ii) provided to Executive to such lesser extent as would result in no portion of such payment being subject to such Excise Tax, whichever of the foregoing amounts, when taking into account such Excise Tax, results in the receipt by Executive of the greatest amount of the payment, notwithstanding that all or some portion of such payment may be taxable under such Excise Tax. To the extent such payment needs to be reduced pursuant to the preceding sentence, reductions shall come from taxable amounts before non-taxable amounts and beginning with the payments otherwise scheduled to occur soonest. Executive agrees to cooperate fully with Corporation to determine the benefits applicable under this Section 3.
(b)For purposes of determining whether any of the Total Payments will be subject to the Excise Tax, and the amounts of such Excise Tax, the following shall apply:
(A)Any payments or benefits received or to be received by Executive in connection with a Change in Control or Executive’s termination of employment (whether pursuant to the terms of this Agreement or any other plan, policy, arrangement or agreement with Corporation, or with any person whose actions result in a Change in Control or any person affiliated with Corporation or such persons) shall be treated as “parachute payments” within the meaning of Code Section 280G(b)(2), and all “excess parachute payments” within the meaning of Code Section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of Corporation such other payments or benefits (in whole or in part) do not constitute parachute payments, or unless such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Code Section 280G(b)(4) in excess of the base amount within the meaning of Code Section 280G(b)(3), or are otherwise not subject to the Excise Tax.
(B)The value of any noncash benefits or any deferred payment or benefit shall be determined in accordance with the principles of Code Sections 280G(d)(3) and (4).
4.Confidential Information. As a supplement to any other confidentiality provisions applicable to the Executive, Executive acknowledges that all Confidential Information is and shall continue to be the exclusive proprietary property of the Corporation or an Affiliate, whether or not disclosed to or entrusted to the custody of Executive. Executive will not, either during the term hereof or at any time thereafter, disclose any Confidential Information, in whole or in part, to any person or entity other than to employees of the Corporation or an Affiliate, for any reason or purpose, unless the Corporation or an Affiliate gives its prior written consent to such disclosure. Executive also will not, either during the term hereof or at any time thereafter, use in
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any manner any Confidential Information for Executive’s own purposes or for the benefit of any person or entity except the Corporation or any Affiliate whether such use consists of duplication, removal, oral communication, disclosure, transfer or other unauthorized use thereof, unless the Corporation gives its prior written consent to such use. As used herein, the term “Confidential Information” refers to all information and materials not in the public domain belonging to, used by or in the business of the Corporation or any Affiliate (the “Business”) relating to its business strategies, products, pricing, customers, technology, programs, costs, employee compensation, marketing plans, developmental plans, computer programs, computer systems, inventions, developments, formulae, processes, designs, drawings, trade secrets of every kind and character and competitive information. “Confidential Information” also includes confidential information belonging to other companies and disclosed to the Executive by the Corporation or an Affiliate.
5.Non-competition and Inventions.
(a)This Agreement hereby incorporates any non-competition or similar provisions of the Employment Agreement as if fully rewritten herein. In the event that there is no Employment Agreement, or such Employment Agreement does not include non-competition or similar provisions thereto, during the period of employment of Executive and for a period of one year after Executive’s termination of employment for any reason, Executive shall not directly or indirectly as a principal, agent, owner, employee, consultant, advisor, trustee, beneficiary, distributor, partner, co-venturer, officer, director, stockholder or in any other capacity, nor will any entity owned by Executive:
(A)divert or attempt to divert any business from the Corporation or an Affiliate or engage in any act likely to cause any customer or supplier of the Corporation or an Affiliate to discontinue or curtail its business with the Corporation or an Affiliate or to do business with another entity, firm, business, activity or enterprise directly or indirectly competitive with the Corporation or an Affiliate; or
(B)contact, sell or solicit to sell or attempt to contact, sell or solicit to sell products competitive to those sold by the Corporation or an Affiliate to any customer of the Corporation or an Affiliate with which Executive had contact while performing services for the Corporation or an Affiliate; or
(C)solicit or attempt to solicit any employee of the Corporation or an Affiliate for employment or retention.
Notwithstanding the provisions above, Executive may acquire securities of any entity the securities of which are publicly traded, provided that the value of the securities of such entity held directly or indirectly by Executive immediately following such acquisition is less than 5% of the total value of the then outstanding class or type of securities acquired.
(b)Executive acknowledges and agrees that the restrictions set forth in this Section 5 are founded on valuable consideration and are reasonable in duration and geographic area in view of the circumstances under which this Agreement is executed and that such restrictions are necessary to protect the legitimate interests of the Corporation or an Affiliate. If, in any judicial proceeding, a court shall refuse to enforce any separate covenant set forth herein, then such unenforceable covenant shall be deemed eliminated from this Section 5 for the purpose of that proceeding to the extent necessary to permit the remaining separate covenants to be enforced.
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(c)The Executive hereby sells, transfers and assigns to the Corporation and any Affiliate the entire right, title and interest of the Executive in and to all inventions, ideas, disclosures and improvements, whether patented or unpatented, and copyrightable materials, made or conceived by the Executive, solely or jointly, or in whole or in part, during the period Executive is bound by this Agreement which (i) relate to methods, apparatus, designs, products, processes or devices sold, leased, used or under construction or development by the Corporation or an Affiliate or any subsidiary or (ii) otherwise relate to or pertain to the business, functions or operations of the Corporation or any Affiliate, or (iii) arise (wholly or partly) from the efforts of the Executive during the Term hereof in connection with Executive’s performance of Executive’s duties hereunder. The Executive shall communicate promptly and disclose to the Corporation, in such form as the Corporation requests, all information, details and data pertaining to the aforementioned inventions, ideas, disclosures and improvements; and, whether during the term hereof or thereafter, the Executive shall execute and deliver to the Corporation or any Affiliate such formal transfers and assignments and such other papers and documents as may be required of the Executive to permit the Corporation or any Affiliate to file and prosecute the patent applications and, as to copyrightable material, to obtain copyright thereon. This provision does not relate to any invention (i) for which no equipment, supplies, facilities or trade secret information of the Corporation or an Affiliate was used and which was developed entirely on the Executive’s own time and which does not relate (A) directly to the business of the Corporation or an Affiliate, or (B) to the Corporation’s of an Affiliate's actual or demonstrably anticipated research or development; or (ii) which does not result from any work performed by the Executive for the Corporation or an Affiliate.
6.Miscellaneous.
(a)This Agreement shall be governed by and construed in accordance with the internal laws of the State of Wisconsin, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.
(b)All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive, to Executive’s address appearing on the records of the Corporation.
If to the Corporation:
Enerpac Tool Group Corp.
648 N. Plankinton Ave.
4th Floor
648 N. Plankinton Ave.
4th Floor
Milwaukee, WI 53203
Attention: Chairman of the Audit Committee
With a copy to:
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Michael Best & Friedrich, LLP
790 N. Water Street
Milwaukee, WI 5320260606
Attention: Martin P. Tierney
or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
(c)The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(d)The Corporation may withhold from any amounts payable under this Agreement such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
(e)The Executive’s or the Corporation’s failure to insist upon strict compliance with any provisions of this Agreement or the failure to assert any right the Executive or the Corporation may have hereunder, including, without limitation, the right of the Executive to terminate employment for cause pursuant to this Agreement, shall not be deemed to be a waiver of such provision or right or of any other provision or right of this Agreement.
(f)The Executive and the Corporation acknowledge that, except as may otherwise be provided herein or under any other written agreement between the Executive and the Corporation, or otherwise in accordance with applicable law, the employment of the Executive by the Corporation is “at will” and the Executive’s employment may be terminated by the Corporation at any time.
(g)The Corporation agrees that if it breaches any payment obligation hereunder, the Corporation will pay all reasonable attorney fees and costs incurred by Executive in enforcing Executive’s rights hereunder.
(h)This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.
(i)If the Corporation sells, leases, exchanges or otherwise disposes of, in a single transaction or series of related transactions, all or substantially all of its property and assets, or if the Corporation ceases to exist as a separate entity as a result of a merger, spin-off, reorganization or otherwise, then the Corporation will, as a condition precedent to any such transaction, cause effective provision to be made so that the person or entity acquiring such property and assets or succeeding to the business of the Corporation as the surviving entity of a merger, spin-off, reorganization or otherwise, as applicable, becomes bound by, and replaces the Corporation under, this Agreement.
(j)This Agreement constitutes the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and terminates and supersedes any and all prior agreements, understandings and representations, whether written or oral, by or between the parties hereto or their Affiliates which may have related to the subject matter hereof in any way, which are hereby terminated and cancelled and of
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no further force or effect as of the date of this Agreement, without the payment of any additional consideration by or to either of the parties hereto.
7.Injunctive Relief. Executive acknowledges and agrees that irreparable injury will result to the Corporation in the event Executive breaches any covenant contained in this Agreement and that the remedy at law for such breach will be inadequate. Therefore, if Executive engages in any act in violation of the provisions of this Agreement, the Corporation shall be entitled, in addition to such other remedies and damages as may be available to it by law or under this Agreement, to injunctive or other equitable relief to enforce the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on [INSERT DATE].
EXECUTIVE: ENERPAC TOOL GROUP CORP.:
By:
Title: __________________________________
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Exhibit 10.11(b)
ENERPAC TOOL GROUP CORP.
CHANGE IN CONTROL AGREEMENT
FOR
CHANGE IN CONTROL AGREEMENT
FOR
[EXECUTIVE NAME]
This Agreement is made between Enerpac Tool Group Corp. (the “Corporation”), a Wisconsin corporation and [EXECUTIVE NAME] (the “Executive”) effective [INSERT DATE].
WHEREAS, the Executive is a valued employee of the Corporation or an Affiliate (for the purposes of this Agreement, “Affiliate” means the Corporation, its subsidiaries or holding companies from time to time and any subsidiary of any holding company from time to time"); and
WHEREAS, the Executive wishes to remain an employee of the Corporation or an Affiliate; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Executive and the Corporation agree as follows:
1.Employment and Duties. The Corporation or an Affiliate hereby continues to employ Executive as [INSERT TITLE], with all powers and authority as are customary to this position, and Executive hereby accepts such continued employment with the Corporation or an Affiliate in accordance with the terms and conditions set forth herein. Executive shall have such executive responsibilities as is customary with this position and as the Corporation’s Chief Executive Officer shall from time to time assign to the Executive. Executive agrees to devote Executive’s full time (excluding annual vacation time), skill, knowledge, and attention to the business of the Corporation or an Affiliate and the performance of Executive’s duties under this Agreement. Notwithstanding the foregoing, Executive’s employment with the Corporation or an Affiliate shall continue to be subject to and otherwise governed by the terms of any applicable employment or services agreement entered into by and between Executive and the Corporation or an Affiliate (the “Employment Agreement”).
2.Termination, Bonus, and Severance Pay.
(a)As used in this Agreement, a Change in Control means:
(A)the date that any one person, or more than one person acting as a group (as defined in paragraph (i)(5)(v)(B) of Treasury Regulation Section 1.409A-3(i)(5)), acquires ownership of stock of the Corporation that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of the Corporation, determined in accordance with Treasury Regulation Section 1.409A-3(i)(5), other than in a public offering; or
(B)the date that any one person, or more than one person acting as a group (as determined in paragraph (i)(5)(v)(B) of Treasury Regulation Section 1.409A-3(i)(5)), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Corporation that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the Corporation immediately before such acquisition (“gross fair market value” for these purposes meaning the value of the assets of the Corporation, or the value of the assets being
disposed of, determined without regard to any liabilities associated with such assets); or
(C)the date that any one person, or more than one person acting as a group (as determined under paragraph (i)(5)(v)(B) of Treasury Regulation Section 1.409A-3(i)(5)), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Corporation possessing 30 percent or more of the total voting power of the stock of the Corporation; or
(D)the election of directors constituting a majority of the Board of Directors (the “Board”) pursuant to a proxy solicitation not recommended by the Board.
(b)As used in this Agreement, a “Triggering Event” means the occurrence of one or more of the following events within the period of 24 months following a Change in Control, without the Executive's consent:
(A)(A) a material reduction in the base salary paid to the Executive or (B) a material reduction in Executive’s bonus opportunity or (C) a material reduction in the total aggregate value of the contractual benefits received by the Executive; compared to the levels received by the Executive at the time of a Change in Control; or
(B)a material diminution in the Executive’s authority, responsibilities or duties or a material diminution in the authority, duties, or responsibilities of the supervisor to whom the Executive is required to report (including a requirement that an Executive report to an officer or employee of the Corporation or an Affiliate instead of reporting directly to the CEO) compared to the levels or circumstances existing at the time of a Change in Control; or
(C)a change in the location or headquarters where the Executive is normally expected to provide services to a location of 40 or more miles from the previous location existing at the time of the Change in Control; or
(D)the Corporation’s or an Affiliate's material breach of its obligations under this Agreement or the Employment Agreement, if applicable.
Notwithstanding the foregoing, a Triggering Event will not be deemed to have occurred until the Executive has provided notice to the Corporation or an Affiliate of the existence of the Triggering Event within 45 days of the initial existence of the Triggering Event, and the Corporation or an Affiliate has failed within a period of at least 60 days to adequately remedy the Triggering Event condition (the “Triggering Event Notice Period”).
(c)Except as provided in clause (d) below, and otherwise subject to the terms and conditions of the Agreement, if (i) the Corporation or an Affiliate terminates Executive’s employment within the period beginning 6 months prior to a Change in Control and ending 24 months following a Change in Control, or (ii) Executive voluntarily terminates Executive’s services within 30 days following the expiration of the Triggering Event Notice Period (and at a time when Executive’s employment could not
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otherwise be terminated by the Corporation or an Affiliate for cause in accordance with clause (d) below) that occurs within 24 months following the date of a Change in Control:
(A)the Corporation shall pay to the Executive a lump sum equal to the sum of twice the amount of the highest per annum base rate of salary in effect with respect to the Executive during the 2 year period immediately prior to the termination of employment; and
(B)the Corporation shall pay to the Executive a lump sum the greater of:
a.twice the amount of the highest annual bonus or annual incentive compensation earned by the Executive under any annual cash bonus or annual incentive compensation plan of the Corporation or an Affiliate during the 3 complete fiscal years of the Corporation immediately preceding the termination of employment; or
b.twice the amount of the highest annual bonus or annual incentive compensation opportunity, calculated at target, for the Executive under any annual cash bonus or annual incentive compensation plan of the Corporation or an Affiliate during the 3 complete fiscal years of the Corporation immediately preceding the termination of employment; and
(C)any outstanding equity or long-term incentive awards held by Executive immediately prior to Executive’s termination of employment by the Corporation or an Affiliate (or in the event of a voluntary termination due to a Triggering Event, immediately prior to the expiration of the Triggering Event Notice Period where the Corporation or an Affiliate has not remedied the Triggering Event condition in accordance with subsection 2(b) above) shall be fully vested (at target level for performance-based awards) and, with respect to any, stock options, stock appreciation rights or similar awards, Executive shall have the full duration of the original exercise period to exercise such award.
(d)For the avoidance of doubt, the amounts described in (B) above shall not take into account any compensation opportunity under any long-term incentive plan of the Corporation or an Affiliate. The lump sums described in clauses (A) and (B) above shall be paid by the Corporation or an Affiliate to the Executive within 60 days after the Executive’s termination of employment, or, in the event of a voluntary termination due to a Triggering Event.
(e)Notwithstanding any provision herein, no amounts will be due under this Agreement in the event the Executive’s employment is terminated by the Corporation or an Affiliate for cause. The term “for cause” shall mean solely the following events:
(A)conviction of any criminal offence (other than an offence under any road traffic legislation in the UK or elsewhere for which a fine or non-custodial penalty is imposed);
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(B)conviction of any criminal offence involving dishonesty, disloyalty or fraud;
(C)reporting to work under the influence of alcohol;
(D)the use of illegal drugs (whether or not at the workplace);
(E)conviction, or a plea of guilty or no contest, of conduct in conjunction with Executive’s duties hereunder which could reasonably be expected to, or which does, cause the Corporation or an Affiliate public disgrace or disrepute or economic harm;
(F)repeated failure to perform duties as reasonably directed by the Board or CEO (or the person to whom Executive directly reports);
(G)gross negligence or gross misconduct with respect to the Corporation or an Affiliate;
(H)obtaining any personal profit not thoroughly disclosed to and approved in writing by the Board or CEO in connection with any transaction entered into by, or on behalf of, the Corporation or an Affiliate;
(I)violation of any of the terms of the Corporation’s or any Affiliate's established policies which is not cured to the Board’s reasonable satisfaction within twenty (20) working days after you receive written notice thereof; or
(x) any other material breach of this Agreement by you which is not cured to the Board’s reasonable satisfaction within twenty (20) working days after you receive written notice thereof.
(g) Notwithstanding any other provision of this Agreement, in order to be entitled to receive any payments or benefits that otherwise may become due hereunder, Executive must (i) sign a release and waiver of all claims in a form provided by or otherwise acceptable to the Corporation or an Affiliate, and such release and waiver must become irrevocable, and (ii) comply with all applicable restrictive covenants and preemptive rights pursuant to any Employment Agreement or other agreement entered into between Executive and the Corporation or an Affiliate.
(h) Any payments under this Agreement shall not be cumulative with any severance payments the Executive may receive pursuant to applicable English employment legislation upon termination of his employment contract. Accordingly, any amount payable under this Agreement to the Executive shall be reduced by, and set off against, any severance or compensation payment to which the Executive may be entitled under applicable English employment legislation, so that no double recovery shall arise; provided, however, that in no event shall the aggregate amount received by the Executive fall below the minimum severance payment mandatorily required under applicable English employment legislation.
3.Confidential Information. As a supplement to any other confidentiality provisions applicable to the Executive, Executive acknowledges that all Confidential Information is and
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shall continue to be the exclusive proprietary property of the Corporation or an Affiliate, whether or not disclosed to or entrusted to the custody of Executive. Executive will not, either during the term hereof or at any time thereafter, disclose any Confidential Information, in whole or in part, to any person or entity other than to employees of the Corporation or an Affiliate, for any reason or purpose, unless the Corporation or an Affiliate gives its prior written consent to such disclosure. Executive also will not, either during the term hereof or at any time thereafter, use in any manner any Confidential Information for Executive’s own purposes or for the benefit of any person or entity except the Corporation or an Affiliate whether such use consists of duplication, removal, oral communication, disclosure, transfer or other unauthorized use thereof, unless the Corporation or an Affiliate gives its prior written consent to such use. As used herein, the term “Confidential Information” refers to all information and materials not in the public domain belonging to, used by or in the business of the Corporation or an Affiliate relating to its business strategies, products, pricing, customers, technology, programs, costs, employee compensation, marketing plans, developmental plans, computer programs, computer systems, inventions, developments, formulae, processes, designs, drawings, trade secrets of every kind and character and competitive information. “Confidential Information” also includes confidential information belonging to other companies and disclosed to the Executive by the Corporation or an Affiliate.
4.Miscellaneous.
(a)This Agreement shall be governed by and construed in accordance with the laws of England and Wales, and the courts of England and Wales shall have non-exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Agreement or its subject matter or formation. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.
(b)All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive, to Executive’s address appearing on the records of the Corporation.
If to the Corporation:
Enerpac Tool Group Corp.
648 N. Plankinton Ave.
4th Floor
648 N. Plankinton Ave.
4th Floor
Milwaukee, WI 53203
Attention: Chairman of the Audit Committee
With a copy to:
Michael Best & Friedrich, LLP
790 N. Water Street
Milwaukee, WI 5320260606
Attention: Martin P. Tierney
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or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
(c)The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(d)The Corporation or an Affiliate may withhold from any amounts payable under this Agreement such federal, state, local or foreign taxes and/or social security or similar contributions as shall be required to be withheld pursuant to any applicable law or regulation.
(e)The Executive’s or the Corporation’s failure to insist upon strict compliance with any provisions of this Agreement or the failure to assert any right the Executive or the Corporation may have hereunder, including, without limitation, the right of the Executive to terminate employment for cause pursuant to this Agreement, shall not be deemed to be a waiver of such provision or right or of any other provision or right of this Agreement.
(f)The Executive and the Corporation acknowledge that, except as may otherwise be provided herein or under any other written agreement between the Executive and the Corporation, or otherwise in accordance with applicable law, the employment of the Executive by the Corporation may be terminated by the Corporation at any time.
(g)The Corporation agrees that if it breaches any payment obligation hereunder, the Corporation will pay all reasonable attorney fees and costs incurred by Executive in enforcing Executive’s rights hereunder.
(h)This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.
(i)If the Corporation sells, leases, exchanges or otherwise disposes of, in a single transaction or series of related transactions, all or substantially all of its property and assets, or if the Corporation ceases to exist as a separate entity as a result of a merger, spin-off, reorganization or otherwise, then the Corporation will, as a condition precedent to any such transaction, cause effective provision to be made so that the person or entity acquiring such property and assets or succeeding to the business of the Corporation as the surviving entity of a merger, spin-off, reorganization or otherwise, as applicable, becomes bound by, and replaces the Corporation under, this Agreement.
(j)This Agreement constitutes the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and terminates and supersedes any and all prior agreements, understandings and representations, whether written or oral, by or between the parties hereto or their Affiliates which may have related to the subject matter hereof in any way, which are hereby terminated and cancelled and of no further force or effect as of the date of this Agreement, without the payment of any additional consideration by or to either of the parties hereto.
5.Injunctive Relief. Executive acknowledges and agrees that irreparable injury will result to the Corporation or an Affiliate in the event Executive breaches any covenant contained in this Agreement and that the remedy at law for such breach will be inadequate. Therefore, if
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Executive engages in any act in violation of the provisions of this Agreement, the Corporation or an Affiliate shall be entitled, in addition to such other remedies and damages as may be available to it by law or under this Agreement, to injunctive or other equitable relief to enforce the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on [INSERT DATE].
EXECUTIVE: ENERPAC TOOL GROUP CORP.:
By:
Title: __________________________________
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Exhibit 10.11(c)
ENERPAC TOOL GROUP CORP.
CHANGE IN CONTROL AGREEMENT
FOR
CHANGE IN CONTROL AGREEMENT
FOR
[EXECUTIVE NAME]
This Agreement is made between Enerpac Tool Group Corp. (the “Corporation”), a Wisconsin corporation and [EXECUTIVE NAME] (the “Executive”) effective [INSERT DATE].
WHEREAS, the Executive is a valued employee of the Corporation or an Affiliate (for the purposes of this Agreement, “Affiliate” means the Corporation, its subsidiaries or holding companies from time to time and any subsidiary of any holding company from time to time"); and
WHEREAS, the Executive wishes to remain an employee of the Corporation or an Affiliate; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Executive and the Corporation agree as follows:
1.Employment and Duties. The Corporation or an Affiliate hereby continues to employ Executive as [INSERT TITLE], with all powers and authority as are customary to this position, and Executive hereby accepts such continued employment with the Corporation or an Affiliate in accordance with the terms and conditions set forth herein. Executive shall have such executive responsibilities as is customary with this position and as the Corporation’s Chief Executive Officer shall from time to time assign to the Executive. Executive agrees to devote Executive’s full time (excluding annual vacation time), skill, knowledge, and attention to the business of the Corporation or an Affiliate and the performance of Executive’s duties under this Agreement. Notwithstanding the foregoing, Executive’s employment with the Corporation or an Affiliate shall continue to be subject to and otherwise governed by the terms of any applicable employment or services agreement entered into by and between Executive and the Corporation or an Affiliate (the “Employment Agreement”).
2.Termination, Bonus, and Severance Pay.
(a)As used in this Agreement, a Change in Control means:
(A)the date that any one person, or more than one person acting as a group (as defined in paragraph (i)(5)(v)(B) of Treasury Regulation Section 1.409A-3(i)(5)), acquires ownership of stock of the Corporation that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of the Corporation, determined in accordance with Treasury Regulation Section 1.409A-3(i)(5), other than in a public offering; or
(B)the date that any one person, or more than one person acting as a group (as determined in paragraph (i)(5)(v)(B) of Treasury Regulation Section 1.409A-3(i)(5)), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Corporation that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the Corporation immediately before such acquisition (“gross fair market value” for these purposes meaning the value of the assets of the Corporation, or the value of the assets being
disposed of, determined without regard to any liabilities associated with such assets); or
(C)the date that any one person, or more than one person acting as a group (as determined under paragraph (i)(5)(v)(B) of Treasury Regulation Section 1.409A-3(i)(5)), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Corporation possessing 30 percent or more of the total voting power of the stock of the Corporation; or
(D)the election of directors constituting a majority of the Board of Directors (the “Board”) pursuant to a proxy solicitation not recommended by the Board.
(b)As used in this Agreement, a “Triggering Event” means the occurrence of one or more of the following events within the period of 24 months following a Change in Control, without the Executive's consent:
(A)(A) a material reduction in the base salary paid to the Executive or (B) a material reduction in Executive’s bonus opportunity or (C) a material reduction in the total aggregate value of the contractual benefits received by the Executive compared to the levels received by the Executive at the time of a Change in Control; or
(B)a material diminution in the Executive’s authority, responsibilities or duties or a material diminution in the authority, duties, or responsibilities of the supervisor to whom the Executive is required to report (including a requirement that an Executive report to an officer or employee of the Corporation or an Affiliate instead of reporting directly to the CEO) compared to the levels or circumstances existing at the time of a Change in Control; or
(C)a change in the location or headquarters where the Executive is normally expected to provide services to a location of 40 or more miles from the previous location existing at the time of the Change in Control; or
(D)the Corporation’s or an Affiliate's material breach of its obligations under this Agreement or the Employment Agreement, if applicable.
Notwithstanding the foregoing, a Triggering Event will not be deemed to have occurred until the Executive has provided notice to the Corporation or an Affiliate of the existence of the Triggering Event within 45 days of the initial existence of the Triggering Event, and the Corporation or an Affiliate has failed within a period of at least 60 days to adequately remedy the Triggering Event condition (the “Triggering Event Notice Period”).
(c)Except as provided in clause (d) below, and otherwise subject to the terms and conditions of the Agreement, if (i) the Corporation or an Affiliate terminates Executive’s employment within the period beginning 6 months prior to a Change in Control and ending 24 months following a Change in Control, or (ii) Executive voluntarily terminates Executive’s services within 30 days following the expiration of the Triggering Event Notice Period (and at a time when Executive’s employment could not
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otherwise be terminated by the Corporation or an Affiliate for cause in accordance with clause (d) below) that occurs within 24 months following the date of a Change in Control:
(A)the Corporation shall pay to the Executive a lump sum equal to the sum of twice the amount of the highest per annum base rate of salary in effect with respect to the Executive during the 2 year period immediately prior to the termination of employment; and
(B)the Corporation shall pay to the Executive a lump sum the greater of:
a.twice the amount of the highest annual bonus or annual incentive compensation earned by the Executive under any annual cash bonus or annual incentive compensation plan of the Corporation or an Affiliate during the 3 complete fiscal years of the Corporation immediately preceding the termination of employment; or
b.twice the amount of the highest annual bonus or annual incentive compensation opportunity, calculated at target, for the Executive under any annual cash bonus or annual incentive compensation plan of the Corporation or an Affiliate during the 3 complete fiscal years of the Corporation immediately preceding the termination of employment; and
(C)any outstanding equity or long-term incentive awards held by Executive immediately prior to Executive’s termination of employment by the Corporation or an Affiliate (or in the event of a voluntary termination due to a Triggering Event, immediately prior to the expiration of the Triggering Event Notice Period where the Corporation or an Affiliate has not remedied the Triggering Event condition in accordance with subsection 2(b) above) shall be fully vested (at target level for performance-based awards) and, with respect to any, stock options, stock appreciation rights or similar awards, Executive shall have the full duration of the original exercise period to exercise such award.
(d)For the avoidance of doubt, the amounts described in (B) above shall not take into account any compensation opportunity under any long-term incentive plan of the Corporation or an Affiliate. The lump sums described in clauses (A) and (B) above shall be paid by the Corporation or an Affiliate to the Executive within 60 days after the Executive’s termination of employment, or, in the event of a voluntary termination due to a Triggering Event.
(e)Notwithstanding any provision herein, no amounts will be due under this Agreement in the event the Executive’s employment is terminated by or at the initiative of the Corporation or an Affiliate for cause. The term “for cause” shall mean solely the following events:
(A)termination for urgent cause (dringende reden) within the meaning of Section 7:678 Dutch Civil Code (BW) (“DCC”) or seriously reproachable conduct (ernstig verwijtbaar handelen) within the meaning of, inter alia, Section 7:673(7)(c) DCC;
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(B)conviction of a crime (misdrijf)
(C)conviction of any criminal offence involving dishonesty, disloyalty or fraud;
(D)reporting to work under the influence of alcohol;
(E)the use of illegal drugs (whether or not at the workplace);
(F)conviction, or a plea of guilty or no contest, of conduct in conjunction with Executive’s duties hereunder which could reasonably be expected to, or which does, cause the Corporation or an Affiliate public disgrace or disrepute or economic harm;
(G)repeated failure to perform duties as reasonably directed by the Board or CEO (or the person to whom Executive directly reports);
(H)gross negligence or gross misconduct with respect to the Corporation or an Affiliate;
(I)obtaining any personal profit not thoroughly disclosed to and approved in writing by the Board or CEO in connection with any transaction entered into by, or on behalf of, the Corporation or an Affiliate;
(J)violation of any of the terms of the Corporation’s or any Affiliate's established policies which is not cured to the Board’s reasonable satisfaction within twenty (20) working days after you receive written notice thereof; or
(x) any other material breach of this Agreement by you which is not cured to the Board’s reasonable satisfaction within twenty (20) working days after you receive written notice thereof.
(g) Notwithstanding any other provision of this Agreement, in order to be entitled to receive any payments or benefits that otherwise may become due hereunder, Executive must (i) sign a release and waiver of all claims in a form provided by or otherwise acceptable to the Corporation or an Affiliate, and such release and waiver must become irrevocable, and (ii) comply with all applicable restrictive covenants and preemptive rights pursuant to any Employment Agreement or other agreement entered into between Executive and the Corporation or an Affiliate.
(h) From any payments made under this Agreement shall be deducted any and all statutory entitlements on account of the termination of the Executive's employment, including, without limitation, statutory severance pay (transitievergoeding) pursuant to Section 7:673 DCC and equitable compensation (billijke vergoeding) pursuant to Section 7:681 or 7:683 DCC.
3.Confidential Information. As a supplement to any other confidentiality provisions applicable to the Executive, Executive acknowledges that all Confidential Information is and shall continue to be the exclusive proprietary property of the Corporation or an Affiliate, whether or not disclosed to or entrusted to the custody of Executive. Executive will not, either during the term hereof or at any time thereafter, disclose any Confidential Information, in whole or in part,
- 4 -
to any person or entity other than to employees of the Corporation or an Affiliate, for any reason or purpose, unless the Corporation or an Affiliate gives its prior written consent to such disclosure. Executive also will not, either during the term hereof or at any time thereafter, use in any manner any Confidential Information for Executive’s own purposes or for the benefit of any person or entity except the Corporation or an Affiliate whether such use consists of duplication, removal, oral communication, disclosure, transfer or other unauthorized use thereof, unless the Corporation or an Affiliate gives its prior written consent to such use. As used herein, the term “Confidential Information” refers to all information and materials not in the public domain belonging to, used by or in the business of the Corporation or an Affiliate relating to its business strategies, products, pricing, customers, technology, programs, costs, employee compensation, marketing plans, developmental plans, computer programs, computer systems, inventions, developments, formulae, processes, designs, drawings, trade secrets of every kind and character and competitive information. “Confidential Information” also includes confidential information belonging to other companies and disclosed to the Executive by the Corporation or an Affiliate.
4.Miscellaneous.
(a)This Agreement shall be governed by and construed in accordance with the law of the Netherlands and the Dutch courts shall have non-exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Agreement or its subject matter or formation, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.
(b)All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive, to Executive’s address appearing on the records of the Corporation.
If to the Corporation:
Enerpac Tool Group Corp.
648 N. Plankinton Ave.
4th Floor
648 N. Plankinton Ave.
4th Floor
Milwaukee, WI 53203
Attention: Chairman of the Audit Committee
With a copy to:
Michael Best & Friedrich, LLP
790 N. Water Street
Milwaukee, WI 5320260606
Attention: Martin P. Tierney
- 5 -
or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
(c)The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(d)The Corporation or an Affiliate may withhold from any amounts payable under this Agreement such federal, state, local or foreign taxes and/or social security or similar contributions as shall be required to be withheld pursuant to any applicable law or regulation.
(e)The Executive’s or the Corporation’s failure to insist upon strict compliance with any provisions of this Agreement or the failure to assert any right the Executive or the Corporation may have hereunder, including, without limitation, the right of the Executive to terminate employment for cause pursuant to this Agreement, shall not be deemed to be a waiver of such provision or right or of any other provision or right of this Agreement.
(f)The Executive and the Corporation acknowledge that, except as may otherwise be provided herein or under any other written agreement between the Executive and the Corporation, or otherwise in accordance with applicable law, the employment of the Executive by the Corporation may be terminated by the Corporation at any time.
(g)The Corporation agrees that if it breaches any payment obligation hereunder, the Corporation will pay all reasonable attorney fees and costs incurred by Executive in enforcing Executive’s rights hereunder.
(h)This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.
(i)If the Corporation sells, leases, exchanges or otherwise disposes of, in a single transaction or series of related transactions, all or substantially all of its property and assets, or if the Corporation ceases to exist as a separate entity as a result of a merger, spin-off, reorganization or otherwise, then the Corporation will, as a condition precedent to any such transaction, cause effective provision to be made so that the person or entity acquiring such property and assets or succeeding to the business of the Corporation as the surviving entity of a merger, spin-off, reorganization or otherwise, as applicable, becomes bound by, and replaces the Corporation under, this Agreement.
(j)This Agreement constitutes the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and terminates and supersedes any and all prior agreements, understandings and representations, whether written or oral, by or between the parties hereto or their Affiliates which may have related to the subject matter hereof in any way, which are hereby terminated and cancelled and of no further force or effect as of the date of this Agreement, without the payment of any additional consideration by or to either of the parties hereto.
5.Injunctive Relief. Executive acknowledges and agrees that irreparable injury will result to the Corporation or an Affiliate in the event Executive breaches any covenant contained in this Agreement and that the remedy at law for such breach will be inadequate. Therefore, if
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Executive engages in any act in violation of the provisions of this Agreement, the Corporation or an Affiliate shall be entitled, in addition to such other remedies and damages as may be available to it by law or under this Agreement, to injunctive or other equitable relief to enforce the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on [INSERT DATE].
EXECUTIVE: ENERPAC TOOL GROUP CORP.:
By:
Title: __________________________________
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Exhibit 21
| NAME OF SUBSIDIARY: | STATE/COUNTRY OF INCORPORATION: | |||||||
| EURL Hydratight PPS EL Djazair | Algeria | |||||||
| Actuant Australia Pty. Ltd. | Australia | |||||||
| Enerpac Energy (Australia) Pty. Ltd. | Australia | |||||||
| Enerpac Tool Group Australia Pty. Ltd. | Australia | |||||||
| Enerpac Belgium Services BV | Belgium | |||||||
| Hydratight Equipamentos Servicos e Industria Ltda. | Brazil | |||||||
| Actuant Canada Corporation | Canada | |||||||
| Enerpac (Jiangsu) Industrial Equipment Co. Ltd | China | |||||||
| Enerpac (Shanghai) Industrial Equipment Co. Ltd | China | |||||||
| Enerpac (Shanghai) Trading Co. Ltd. | China | |||||||
| Actuant Cyprus Ltd | Cyprus | |||||||
| Enerpac International Holdings, Inc. | Delaware | |||||||
| Cortland Company, Inc | Delaware | |||||||
| ETG Worldwide Holdings II LLC | Delaware | |||||||
| Hydratight Operations, Inc. | Delaware | |||||||
| Rodeo Merger Sub, LLC | Delaware | |||||||
| Actuant Europe Holdings SAS | France | |||||||
| Enerpac France SAS | France | |||||||
| Actuant GmbH | Germany | |||||||
| Hydratight Injectaseal Deutschland GmbH | Germany | |||||||
| Actuant Global Sourcing, Ltd. | Hong Kong | |||||||
| Enerpac India Pvt. Ltd. | India | |||||||
| Engineered Solutions LP | Indiana | |||||||
| Enerpac SpA | Italy | |||||||
| Enerpac Co. Ltd | Japan | |||||||
| Actuant Holding Kazakhstan LLP | Kazakhstan | |||||||
| Actuant JV Kazakhstan LLP | Kazakhstan | |||||||
| Actuant Mexico Holdings S. de R.L. de C.V. | Mexico | |||||||
| Actuant Europe CV | Netherlands | |||||||
| ATU Euro Finance BV | Netherlands | |||||||
| ATU Global Holdings II BV | Netherlands | |||||||
| BML Global Holdings CV | Netherlands | |||||||
| Enerpac BV | Netherlands | |||||||
| Enerpac Heavy Lifting Technology BV | Netherlands | |||||||
| Enerpac Investments, Inc. | Nevada | |||||||
| ETG M.E. Investments, LLC | Nevada | |||||||
| ETG Worldwide Holdings I Inc. | New York | |||||||
| Enerpac AS | Norway | |||||||
| Venice Holdings AS | Norway | |||||||
| Venice Norge AS | Norway | |||||||
| Enerpac Eastern Europe SP. ZO.O. | Poland | |||||||
| Hydratight Arabia Limited | Saudi Arabia | |||||||
| Actuant Asia Pte. Ltd. | Singapore | |||||||
| Enerpac Asia Pte. Ltd. | Singapore | |||||||
| Actuant Operations Singapore Pte Ltd. | Singapore | |||||||
| Venice (Singapore) Pte Ltd. | Singapore | |||||||
| Venice Holdings (Singapore) Pte Ltd. | Singapore | |||||||
| Enerpac Africa (Pty) Ltd. | South Africa | |||||||
| Enerpac Korea Ltd. | South Korea | |||||||
| Actuant Middle East Holdings, S.L. | Spain | |||||||
| DTA The Smart Move, S.A. | Spain | |||||||
| Enerpac Spain, S.L. | Spain | |||||||
| Enerpac Scandinavia AB | Sweden | |||||||
| Hydratight Ltd. | Trinidad | |||||||
| Hydratight Tunisia SUARL | Tunisia | |||||||
| Enerpac UK Ltd. | UK | |||||||
| BML PN Ltd | UK | |||||||
| Cortland UK Holdings Limited | UK | |||||||
| Enerpac Acquisitions Ltd. | UK | |||||||
| Enerpac Energy Ltd. | UK | |||||||
| Enerpac Finance Ltd | UK | |||||||
| Enerpac Global Financing Limited | UK | |||||||
| Enerpac Holdings Ltd. | UK | |||||||
| Enerpac International Ltd. | UK | |||||||
| ETG Global Holdings Ltd | UK | |||||||
| HT Global Holdings Limited | UK | |||||||
| Hydratight Ltd. | UK | |||||||
| Venice Fundco Ltd. | UK | |||||||
| Venice Topco Ltd. | UK | |||||||
| Enerpac Middle East FZE | United Arab Emirates | |||||||
| Hydratight FZE | United Arab Emirates | |||||||
Exhibit 23
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements:
1.Registration Statement (Form S-8 No. 333-239643) pertaining to Enerpac Tool Group Corp. Outside Directors’ Deferred Compensation plan;
2.Registration Statement (Form S-8 No. 333-215592) pertaining to the Actuant Corporation 2017 Omnibus Incentive Plan;
3.Registration Statement (Form S-8 No. 333-46469) pertaining to the Applied Power Inc. 1996 Stock Option Plan;
4.Registration Statement (Form S-8 No. 333-53702) pertaining to the Actuant Corporation 2001 Stock Plan;
5.Registration Statement (Form S-8 No. 333-53704) pertaining to the Actuant Corporation 2001Outside Directors’ Stock Option Plan;
6.Registration Statement (Form S-8 No. 333-61279) pertaining to the Zero Corporation 1988 Stock Option Plan and the Zero Corporation 1994 Stock Option Plan;
7.Registration Statement (Form S-8 No. 333-61281) pertaining to the Applied Power Inc. Employee Stock Purchase Plan;
8.Registration Statement (Form S-8 No. 333-89068) pertaining to the Actuant Corporation Outside Directors’ Deferred Compensation Plan;
9.Registration Statement (Form S-8 No. 333-102523) pertaining to the Actuant Corporation 2002 Stock Plan;
10.Registration Statement (Form S-8 No. 333-102524) pertaining to the Actuant Corporation Outside 2001 Directors’ Stock Option Plan;
11.Registration Statement (Form S-8 No. 333-112008) pertaining to the Actuant Corporation 2004 Employee Stock Purchase Plan;
12.Registration Statement (Form S-8 No. 333-118811) pertaining to the Actuant Corporation Deferred Compensation Plan;
13.Registration Statement (Form S-8 No. 333-131186) pertaining to the Actuant Corporation 2002 Stock Plan;
14.Registration Statement (Form S-8 No. 333-131187) pertaining to the Actuant Corporation Amended and Restated 2001 Outside Directors’ Stock Plan;
15.Registration Statement (Form S-8 No. 333-156734) pertaining to the Actuant Corporation 2009 Omnibus Incentive Plan;
16.Registration Statement (Form S-8 No. 333-186146) pertaining to the Actuant Corporation 2009 Omnibus Incentive Plan;
17.Registration Statement (Form S-8 No. 333-164304) pertaining to the Actuant Corporation 2010 Employee Stock Purchase Plan;
18.Registration Statement (Form S-8 No. 333-254821) pertaining to the Enerpac Tool Group Corp. 2017 Omnibus Incentive Plan (as amended and restated November 9, 2020);
19.Registration Statement (Form S-8 No. 333-164303) pertaining to the Actuant Corporation 2009 Omnibus Incentive Plan;
20.Registration Statement (Form S-8 No. 333-299679) pertaining to the Enerpac Tool Group Inducement Award Plan
of our reports dated October 29, 2026, with respect to the consolidated financial statements and schedule of Enerpac Tool Group Corp., and the effectiveness of internal control over financial reporting of Enerpac Tool Group Corp., included in this Annual Report (Form 10-K) for the year ended August 31, 2026.
/s/ Ernst & Young LLP
Milwaukee, Wisconsin
October 29, 2026
Exhibit 31.1
CERTIFICATION
I, Paul E. Sternlieb, certify that:
1.I have reviewed this annual report on Form 10-K of Enerpac Tool Group Corp.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluations; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: October 29, 2026
| /s/ Paul E. Sternlieb | |||||
| Paul E. Sternlieb President and Chief Executive Officer (Principal Executive Officer) | |||||
Exhibit 31.2
CERTIFICATION
I, Darren M. Kozik certify that:
1.I have reviewed this annual report on Form 10-K of Enerpac Tool Group Corp.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting
Date: October 29, 2026
| /s/ Darren M. Kozik | |||||
| Darren M. Kozik Executive Vice President and Chief Financial Officer (Principal Financial Officer) | |||||
Exhibit 32.1
WRITTEN STATEMENT OF THE CHIEF EXECUTIVE OFFICER
Pursuant to 18 U.S.C. ss.1350, I, the undersigned President and Chief Executive Officer of Enerpac Tool Group Corp. (the “Company”), hereby certify, based on my knowledge, that the Annual Report on Form 10-K of the Company for the annual period ended August 31, 2026 (the “Report”) fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.
Date: October 29, 2026
| /s/ Paul E. Sternlieb | |||||
| Paul E. Sternlieb President and Chief Executive Officer | |||||
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Enerpac Tool Group Corp. and will be retained by Enerpac Tool Group Corp. and furnished to the Securities and Exchange Commission or its staff upon request.
The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the Form 10-K and shall not be considered filed as part of the Form 10-K.
Exhibit 32.2
WRITTEN STATEMENT OF THE CHIEF FINANCIAL OFFICER
Pursuant to 18 U.S.C. ss.1350, I, the undersigned Executive Vice President and Chief Financial Officer of Enerpac Tool Group Corp. (the “Company”), hereby certify, based on my knowledge, that the Annual Report on Form 10-K of the Company for the annual period ended August 31, 2026 (the “Report”) fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.
Date: October 29, 2026
| /s/ Darren M. Kozik | |||||
| Darren M. Kozik | |||||
| Executive Vice President and Chief Financial Officer | |||||
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Enerpac Tool Group Corp. and will be retained by Enerpac Tool Group Corp. and furnished to the Securities and Exchange Commission or its staff upon request.
The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the Form 10-K and shall not be considered filed as part of the Form 10-K.