DEF 14A of Northern Technologies International Corp, Dec 4, 2023

DEF 14A of Northern Technologies International Corp

Filed Dec 4, 2023 · FY20230001171843-23-007389

Open on EDGAR

  1. EXECUTIVE COMPENSATION PHILOSOPHY

    | • | Provide fair and competitive compensation opportunities that attract and retain executives. |

  2. EXECUTIVE COMPENSATION BEST PRACTICES

    | What we do: | What we don’t do: | | • Emphasize pay for performance | • No guaranteed salary increases or bonuses | | • Structure our executive compensation so a significant portion of pay is at risk | • No repricing of stock options unless approved by stockholders | | • Structure our executive compensation so a significant portion is paid in equity | • No pledging of NTIC securities, unless certain criteria are met | | • Maintain competitive pay packages | • No hedging of NTIC securities | | • Maintain robust clawback policy | • No excessive perquisites | | • Hold an annual say-on-pay vote | • No tax gross-ups | | • Maintain stock ownership guidelines | |

  3. HOW WE PAY

    | • | Annual incentive – a variable, short-term element that is typically payable in cash and is based on a corporate profitability goal and individual performance goals. |

  4. HOW WE PAY

    | • | Long-term incentive – a variable, long-term element that is provided in stock options. |

  5. FISCAL 2023 EXECUTIVE COMPENSATION ACTIONS

    | Element | Key Fiscal 2023 Actions | | Base Salary | Our executives received base salary increases at the start of fiscal 2023 of 5.0%. | | Annual Incentive | Our executives received annual bonuses based primarily on Adjusted EBITOI (earnings before interest, taxes, and other income, as adjusted to take into account amounts paid under bonus plan and other adjustments), in amounts representing 77.4% of their base salaries. A portion of the annual incentive earned for fiscal 2023 was paid in the form of stock option grants made at the beginning of fiscal 2023. | | Long-Term Incentive | Our executives received stock option grants on September 1, 2022, which vest annually over a three-year period. The fiscal 2023 stock option grants were intended as partial payout of the fiscal 2023 annual bonus program. | | Health and Welfare Benefits | No significant changes were made. | | Retirement Plans | No significant changes were made. | | Perquisites | No significant changes were made. |

  6. APPROVAL OF NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION 2024 STOCK INCENTIVE PLAN

    APPROVAL OF NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION 2024 STOCK INCENTIVE PLAN The Board has approved the Northern Technologies International Corporation 2024 Stock Incentive Plan (which we refer to as the “2024 plan”). The purpose of the 2024 plan is to advance the interests of NTIC and our stockholders by enabling us to attract and retain qualified individuals to perform services for us, provide incentive compensation for such individuals in a form that is linked to the growth and profitability of our Company and increases in stockholder value, and provide opportunities for equity participation that align the interests of recipients with those of our stockholders. Our continuing ability to offer equity incentive awards is critical to our ability to attract, motivate and retain qualified personnel, particularly as we grow and in light of the highly competitive markets for employee talent in which we operate. If our stockholders approve the 2024 plan, it will replace the Northern Technologies International Corporation Amended and Restated 2019 Stock Incentive Plan (which we refer to as the “2019 plan”) and no new awards will be granted under the 2019 plan. The terms of the 2019 plan, as applicable, will continue to govern awards outstanding under the 2019 plan, until exercised, expired, paid or otherwise terminated or canceled. Other than the 2019 plan, we currently have no other equity compensation plans under which equity awards can be granted, other than the Northern Technologies International Corporation Employee Stock Purchase Plan. The Board of Directors recommends a vote “FOR” the proposal to approve the 2024 plan.

  7. How Does the Board Recommend that You Vote

    | • | FOR Proposal Four—Approval of Northern Technologies International Corporation 2024 Stock Incentive Plan. |

  8. PROPOSAL ONE—ELECTION OF DIRECTORS

    PROPOSAL ONE—ELECTION OF DIRECTORS

  9. Number of Directors

    Number of Directors Our Second Amended and Restated Bylaws provide that the Board of Directors will consist of that number of directors as may be determined by the Board of Directors or by the stockholders at an annual meeting. The Board of Directors has fixed the number of directors at eight.

  10. Nominees for Director

    Nominees for Director The Board of Directors has nominated the following eight individuals to serve as our directors until the next annual meeting of stockholders or until their successors are elected and qualified. All nominees named below are current members of the Board of Directors.

  11. Nominees for Director

    | • Nancy E. Calderon | • Ramani Narayan, Ph.D. | | • Sarah E. Kemp | • Richard J. Nigon | | • Sunggyu Lee, Ph.D. | • Cristina Pinho | | • G. Patrick Lynch | • Konstantin von Falkenhausen |

  12. Nominees for Director

    Proxies can only be voted for the number of persons named as nominees in this proxy statement, which is eight. If prior to the Annual Meeting, the Board of Directors should learn that any nominee will be unable to serve for any reason, the proxies that otherwise would have been voted for this nominee will be voted for a substitute nominee as selected by the Board. Alternatively, the proxies, at the Board’s discretion, may be voted for that fewer number of nominees as results from the inability of any nominee to serve. The Board of Directors has no reason to believe that any of the nominees will be unable to serve.

  13. Information about Current Directors and Board Nominees

    Information about Current Directors and Board Nominees The following table sets forth as of November 21, 2023 the name, age and principal occupation of each current director and each individual who has been nominated by the Board of Directors to serve as a director of NTIC, as well as how long each individual has served as a director of NTIC.

  14. Information about Current Directors and Board Nominees

    | Name | Age | Principal Occupation | Director Since | | Nancy E. Calderon(1)(2) | 64 | Former Partner of KPMG LLP | 2019 | | Sarah E. Kemp(2) | 56 | Vice President, International Government Affairs of Intel Corporation | 2019 | | Sunggyu Lee, Ph.D.(3) | 71 | Chief Technologist of Chemtech Innovators LLC | 2004 | | G. Patrick Lynch | 56 | President and Chief Executive Officer of NTIC | 2004 | | Ramani Narayan, Ph.D. | 74 | Distinguished Professor in Department of Chemical Engineering & Materials Science at Michigan State University | 2004 | | Richard J. Nigon(1)(2)(3) | 75 | Senior Vice President of Cedar Point Capital, Inc. | 2010 | | Cristina Pinho(2) | 65 | Chair of the Board of Instituto Luísa Pinho Sartori | 2023 | | Konstantin von Falkenhausen(1)(3) | 56 | Partner of B Capital Partners AG | 2012 |

  15. Information about Current Directors and Board Nominees

    _________________________

  16. Information about Current Directors and Board Nominees

    | (1) Member of the Audit Committee |

  17. Information about Current Directors and Board Nominees

    | (2) Member of the Nominating and Corporate Governance Committee |

  18. Information about Current Directors and Board Nominees

    | (3) Member of the Compensation Committee |

  19. Additional Information about Current Directors and Board Nominees

    Additional Information about Current Directors and Board Nominees The following paragraphs provide information about each current director and nominee for director, including all positions he or she holds, his or her principal occupation and business experience for the past five years, and the names of other publicly-held companies of which the director or nominee currently serves as a director or has served as a director during the past five years. We believe that all of our directors and nominees display personal and professional integrity; satisfactory levels of education and/or business experience; broad-based business acumen; an appropriate level of understanding of our business and its industry and other industries relevant to our business; the ability and willingness to devote adequate time to the work of the Board of Directors and its committees; a fit of skills and personality with those of our other directors that helps build a board that is effective, collegial and responsive to the needs of NTIC; strategic thinking and a willingness to share ideas; a diversity of experiences, expertise and background; and the ability to represent the interests of all of our stockholders. The information presented below regarding each director and nominee also sets forth specific experience, qualifications, attributes and skills that led the Board of Directors to the conclusion that such individual should serve as a director in light of our business and structure. Nancy E. Calderon has been a director of NTIC since October 2019. Ms. Calderon is a CPA and retired from KPMG LLP in September 2019 after a distinguished 33-year career. Until her retirement, Nancy served as Global Lead Partner for a Fortune 40 Technology company, managing a global team of over 500 professionals in more than 50 countries, a position she held since July 2012, senior partner of KPMG’s Board Leadership Center from its inception in 2015, and as a director of KPMG’s Global Delivery Center in India and its related holding companies since September 2011. Previously, she was KPMG’s Americas Chief Administrative Officer and U.S. National Partner in Charge, Operations from July 2008 to June 2012. Ms. Calderon has sat on a number of KPMG committees, including the Americas Region Management Committee, Enterprise Risk Management, Privacy, Pension Steering and Investment, Social Media and Knowledge Management. She currently serves on the board of directors of Belden Inc. We believe Ms. Calderon’s qualifications to sit on the Board of Directors include her extensive financial accounting experience with KPMG and her current and prior experience on boards of directors, including, in particular, her experience serving on the audit committees of Arcimoto, Inc.; Belden, Inc.; KPMG’s Global Delivery Center; Women Corporate Directors Foundation and the New York YMCA. Ms. Calderon received a Bachelor of Science from UC Berkeley’s Haas Business School and a Master of Science from Golden Gate University. Sarah E. Kemp has been a director of NTIC since October 2019. Ms. Kemp is Vice President, International Government Affairs for Intel Corporation. Before joining Intel Corporation in February 2022, Ms. Kemp was the Associate Vice President for Organon, a global biopharmaceutical company where she lead Global Women’s Health Policy and ESG, a position she served since April 2021. Prior to Organon, Ms. Kemp lead Merck’s Policy Communication and Population Health organization responsible for emerging markets from November 2020 to April 2021. Prior to this role, she was the Executive Director, Public Policy and Commercial Strategies for China and the Asia Pacific from July 2019 to October 2020. Before joining Merck, Ms. Kemp was the Deputy Under Secretary, for the International Trade Administration at the U.S. Department of Commerce in Washington, D.C., from February 2017 to July 2019. In this role, she oversaw a $485 million annual budget and 2,100 trade and investment professionals based in 108 US cites and 76 markets around the world. Prior to her time in D.C., she was the Minister Counselor for Commercial Affairs at the U.S. Embassy in Beijing, overseeing the U.S. Department of Commerce’s trade promotion and trade policy activities in its operations in Beijing, Chengdu, Shanghai, Wuhan, Shenyang and Guangzhou. In this capacity, she was a key advisor to the Ambassador and advised U.S. CEOs—from fortune 500 companies to SME’s—on China business strategy, market access, export promotion, anti-dumping / countervailing duty cases, intellectual property protection and export controls. As a career Foreign Commercial Service Officer, she served as the Country Manager in China and Vietnam, and had multiple postings in Beijing, Hong Kong and Bangkok. Ms. Kemp joined Commerce as a Presidential Management Fellow. Ms. Kemp served on the board of directors of the Concordia International School in Hanoi, Vietnam, an international day school offering preschool through high school education, from 2012-2014 and was the Co-Chair of Women Corporate Directors in Vietnam from 2011-2014 and in Beijing from 2009-2011. Ms. Kemp serves on the Advisory Board of Indiana University’s Manufacturing Policy Initiative and is on the Board of the Center for International Private Enterprise. We believe Ms. Kemp’s qualifications to sit on the Board of Directors include her extensive knowledge and experience in international commerce, particularly with regard to Asia Pacific and Greater China, her prior board experience and her in depth experience in international and public affairs. Ms. Kemp received her Master of Business Administration from the Chinese University of Hong Kong, her Master of Public Administration from Columbia University and her Bachelor of Arts in Physiological–Anthropology from Hamilton College. Sunggyu Lee, Ph.D. has been a director of NTIC since January 2004. Dr. Lee is Chief Technologist, Chemtech Innovators LLC, Akron, Ohio. Previously, he held positions of Russ Ohio Research Scholar and Professor of Chemical and Biomolecular Engineering, Ohio University, Athens, Ohio from 2010 to 2020, Professor of Chemical and Biological Engineering, Missouri University of Science and Technology, Rolla, Missouri from 2005 to 2010, C.W. LaPierre Professor and Chairman of Chemical Engineering at University of Missouri-Columbia from 1997 to 2005, and Robert Iredell Professor and Head of Chemical Engineering Department at the University of Akron, Akron, Ohio from 1988 to 1996. He has authored 12 books and over 550 archival publications and received 35 U.S. patents in a variety of chemical and polymer processes and products. He is currently serving as Editor of Encyclopedia of Chemical Processing, Taylor & Francis, New York, New York and also as Book Series Editor of Green Chemistry and Chemical Engineering, CRC Press, Boca Raton, Florida. Throughout his career, he has served as consultant and technical advisor to a number of national and international companies in the fields of polymers, petrochemicals and energy. He received his Ph.D. from Case Western Reserve University, Cleveland, Ohio in 1980. We believe Dr. Lee’s qualifications to sit on the Board of Directors include his significant technical and industrial expertise with chemical and polymer processes and products. Such expertise is particularly helpful with respect to assessing and operating NTIC’s ZERUST® industrial business.

  20. Additional Information about Current Directors and Board Nominees

    G. Patrick Lynch, an employee of NTIC since 1995, has been President since July 2005 and Chief Executive Officer since January 2006 and has served as a director of NTIC since February 2004. Mr. Lynch served as President of North American Operations of NTIC from May 2004 to July 2005. Prior to May 2004, Mr. Lynch held various positions with NTIC, including Vice President of Strategic Planning, Corporate Secretary and Project Manager. Mr. Lynch is also an officer and director of Inter Alia Holding Company, which is a significant stockholder of NTIC. Prior to joining NTIC, Mr. Lynch held positions in sales management for Fuji Electric Co., Ltd. in Tokyo, Japan, and programming project management for BMW AG in Munich, Germany. Mr. Lynch received a Master of Business Administration degree from the University of Michigan Ross School of Business. We believe Mr. Lynch’s qualifications to sit on the Board of Directors include his depth of knowledge of NTIC and its day-to-day operations in light of his position as Chief Executive Officer of NTIC, as well as his affiliation with a significant stockholder of NTIC, which the Board of Directors believes generally helps align management’s interests with those of our stockholders. Ramani Narayan, Ph.D. has been a director of NTIC since November 2004. He is a Distinguished Professor at Michigan State University in the Department of Chemical Engineering & Materials Science, where he has 200+ refereed publications in leading journals to his credit, 19 patents, edited three books and one expert dossier in the area of bio-based polymeric materials. His research encompasses design and engineering of sustainable, biobased products, biodegradable plastics and polymers, biofiber reinforced composites, reactive extrusion polymerization and processing, studies in plastic end-of-life options like biodegradation and composting. He conducts carbon footprint calculations for plastics and products. He also performs LCA (Life Cycle Assessment) for reporting a product’s environmental footprint. He serves as Scientific Chair of the Biodegradable Products Institute (BPI), North America. He served on the Technical Advisory Board of Tate & Lyle. He served on the Board of Directors of ASTM International, an international standard setting organization and was the founding Chair of the committee on Environmentally Degradable Plastics and Biobased Products (D20.96) and the Plastics Terminology Committee (D20.92). Dr. Narayan is also the technical expert for the United States on ISO (International Standards Organization) TC 61 on Plastics—specifically for Terminology, Biobased and Biodegradable Plastics. He has won numerous awards, including the Named MSU University Distinguished Professor in 2007; the Governors University Award for commercialization excellence; Michigan State University Distinguished Faculty Award, 2006, 2005 Withrow Distinguished Scholar award, Fulbright Distinguished Lectureship Chair in Science & Technology Management & Commercialization (University of Lisbon; Portugal); First recipient of the William N. Findley Award, The James Hammer Memorial Lifetime Achievement Award, and Research and Commercialization Award sponsored by ICI Americas, Inc. & the National Corn Growers Association. We believe Dr. Narayan’s qualifications to sit on the Board of Directors include his significant technical expertise in the bioplastics area which has been helpful to NTIC’s management in assessing and operating NTIC’s Natur-Tec® bioplastics business. Richard J. Nigon has been a director of NTIC since February 2010 and non-executive Chairman of the Board since November 2012. Mr. Nigon is the Senior Vice President of Cedar Point Capital, Inc., a private company that raises capital for early stage companies. From February 2001 until May 2007, Mr. Nigon was a Director of Equity Corporate Finance for Miller Johnson Steichen Kinnard (MJSK), a privately held investment firm. In December 2006, MJSK was acquired by Stifel Nicolaus, and Mr. Nigon was a Managing Director of Private Placements at Stifel Nicolaus. From February 2000 to February 2001, Mr. Nigon served as the Chief Financial Officer of Dantis, Inc., a web hosting company. Prior to joining Dantis, Mr. Nigon was employed by Ernst & Young, LLP from 1970 to 2000, where he served as a partner from 1981 to 2000. While at Ernst & Young, Mr. Nigon served as the Director of Ernst & Young’s Twin Cities Entrepreneurial Services Group and was the coordinating partner on several publicly-traded companies in the consumer retailing and manufacturing sectors. In addition to NTIC, Mr. Nigon also serves on the board of directors of Celcuity Inc. and as chairperson of its audit committee and serves on the board of directors of a number of privately-held companies. Mr. Nigon previously served on the board of directors of Tactile Systems Technology, Inc., Virtual Radiologic Corporation and Vascular Solutions, Inc. until its acquisition by Teleflex Incorporated in February 2017. Through his 30 years of service at Ernst & Young, LLP, Mr. Nigon brings to NTIC’s Board of Directors, and in particular the Audit Committee, extensive public accounting and auditing experience. The Board believes Mr. Nigon’s strong background in financial controls and reporting, financial management, financial analysis and SEC reporting requirements is critical to the Board’s oversight responsibilities. In addition, his strategic planning expertise and other experiences gained through his management and leadership roles at private investment firms that have invested in early stage companies, is helpful to the Board in assessing and operating NTIC’s newer businesses. Cristina Pinho has been a director of NTIC since January 2023. Ms. Pinho is Chair of the Board of Instituto Luísa Pinho Sartori, a nonprofit organization in Brazil whose mission is to support and incentivize conservationists and biologists to work on environmental protection, a position she has held since April 2015. Ms. Pinho is also an independent board director of Ocyan, a private company, a position she has held since August 2020. Ms. Pinho is a member of a sounding board of Shell Brazil, a position she has held since June 2023. From November 2019 to January 2022, she served as Corporate Executive Director at Brazilian Petroleum and Gas Institute, a nonprofit organization in Brazil, formed by major oil and gas producers in Brazil and petroleum products service companies. From January 2019 to November 2019, Ms. Pinho served as Undersecretary of Energy, Petroleum and Gas at Rio de Janeiro State. From 2012 to 2015, she served as Executive Manager of E&P Services and Logistics for Petrobras. We believe Ms. Pinho’s qualifications to sit on the Board of Directors include her extensive experience in the oil and gas industry in Brazil and her extensive experience in ESG matters. Ms. Pinho received an ESG Competent Boards Certificate in 2021 and is a graduate of the Columbia Senior Executive Program at the Columbia Business School and also received a Digital Strategy for Business degree from the Columbia Business School in 2018. She has also received an MBA CoppeAd UFRJ; Senior Strategic Management, MBA Fundação Getúlio Vargas, Business and Strategic Management and a Mechanical Engineering degree from the Universidade Federal do Rio de Janeiro.

  21. Additional Information about Current Directors and Board Nominees

    Konstantin von Falkenhausen has been a director of NTIC since November 2012. Mr. von Falkenhausen is currently a Partner of B Capital Partners AG, an independent investment advisory boutique focused on infrastructure, public private partnerships and clean energy. In this capacity, since April 2018, Mr. von Falkenhausen has been a Director of the general partner of the B Capital Energy Transition Infrastructure Fund SICAV-SIF, an investment fund registered with the Luxembourg financial authorities CSSF. From February 2004 to March 2008, Mr. von Falkenhausen served as a Partner of capiton AG, a private equity firm located in Berlin, Germany. From March 2003 to February 2004, he served as interim Chief Financial Officer of Neon Products GmbH, a privately held neon lighting company. From May 1999 to February 2003, Mr. von Falkenhausen served as an investment manager of West Private Equity Ltd. and an investment director of its German affiliate West Private Capital GmbH. Prior to May 1999, Mr. von Falkenhausen served in several positions with BankBoston Robertson Stephens International Ltd., an investment banking firm. Mr. von Falkenhausen is a citizen of Germany. He has a Master’s degree in economics (lic. oec) from the University of Fribourg (Switzerland) and a Masters of Business Administration from the University of Chicago. We believe Mr. von Falkenhausen’s qualifications to sit on the Board of Directors include his experience with several private investment and equity firms that have invested in early stage companies, which the Board believes is helpful in assessing and operating NTIC’s newer businesses, and his financial expertise, which the Board believes is helpful in analyzing NTIC’s financial performance. The Board of Directors unanimously recommends a vote FOR the election of all of the eight nominees named above.

  22. Additional Information about Current Directors and Board Nominees

    | The Board of Directors Recommends a Vote FOR Each Nominee for Director | ☑ |

  23. Introduction

    | • | Link amount of compensation to both company and individual performance goals; and |

  24. Introduction

    | • | Provide fair and competitive compensation opportunities that attract and retain executives. |

  25. Introduction

    | • | Equity-based compensation granted to our named executive officers is in the form of stock options and aligns the long-term interests of our executives with the long-term interests of our stockholders. In response to a concern raised by one of our stockholders, stock options granted to our executives now vest annually over a three-year period as opposed to a one-year period. |

  26. Introduction

    | • | Our executive officers receive only modest perquisites and have modest severance and change-in-control arrangements. |

  27. PROPOSAL FOUR—APPROVAL OF NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION 2024 STOCK INCENTIVE PLAN

    PROPOSAL FOUR—APPROVAL OF NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION 2024 STOCK INCENTIVE PLAN _________________

  28. Background

    Background On November 10, 2023, the Board of Directors, upon recommendation of the Compensation Committee, approved the Northern Technologies International Corporation 2024 Stock Incentive Plan (referred to in this section as the “2024 plan” or the “plan”), subject to approval by our stockholders at the Annual Meeting. The purpose of the 2024 plan is to advance the interests of NTIC and our stockholders by enabling us to attract and retain qualified individuals to perform services, provide incentive compensation for such individuals in a form that is linked to the growth and profitability of our company and increases in stockholder value, and provide opportunities for equity participation that align the interests of recipients with those of our stockholders. If our stockholders approve the 2024 plan, it will replace the Northern Technologies International Corporation Amended and Restated 2019 Stock Incentive Plan (referred to as the “2019 plan”), with the remaining shares available for grant under the 2019 plan rolling over into the 2024 plan, and no new awards will be granted under the 2019 plan. The terms of the 2019 plan, as applicable, will continue to govern awards outstanding under the 2019 plan, until exercised, expired, paid or otherwise terminated or canceled. Other than the 2019 plan and our employee stock purchase plan, we have no other equity compensation plans under which equity awards can be granted. Subject to adjustment, the maximum number of shares of our common stock to be authorized for issuance under the 2024 plan is 800,000 shares, plus (i) the number of shares of common stock remaining available for issuance under the 2019 plan but not subject to outstanding awards as of the effective date of the 2024 plan, plus (ii) the number of additional shares of common stock subject to awards outstanding under the 2019 plan as of the effective date of the 2024 plan but only to the extent that such outstanding awards are forfeited, cancelled, expire or otherwise terminate without the issuance of such shares of common stock after the effective date of the 2024 plan. The Board of Directors is asking our stockholders to approve the 2024 plan in order to qualify stock options for treatment as incentive stock options for purposes of Section 422 of the Internal Revenue Code of 1986, as amended, or Code. In addition, the Listing Rules of the Nasdaq Stock Market require stockholder approval of the 2024 plan. If our stockholders do not approve the 2024 plan, the 2019 plan will remain in effect until it terminates in accordance with its terms. The 2024 plan allows us to award eligible recipients the following awards:

  29. Background

    | • | options to purchase shares of our common stock that qualify as “incentive stock options” within the meaning of Section 422 of the Code (referred to as “incentive options”); |

  30. Background

    | • | shares of our common stock that are subject to certain forfeiture and transferability restrictions (referred to as “restricted stock awards”); |

  31. Background

    | • | rights to receive the fair market value of one or more shares of our common stock, payable in cash, shares of our common stock, or a combination of both, the payment, issuance, retention and/or vesting of which is subject to the satisfaction of specified conditions, which may include achievement of specified objectives (referred to as “restricted stock unit awards” or “RSUs”); |

  32. Background

    In the following discussion, we refer to both incentive options and non-statutory options as “options,” and to options, stock appreciation rights, restricted stock awards, deferred stock units, restricted stock units, performance awards and other stock based awards as “incentive awards.”

  33. Reasons Why You Should Vote in Favor of the 2024 Plan

    | • | Aligns directors, employee and stockholder interests. We currently provide long-term incentives in the form of stock option grants to our non-employee directors, executive officers and other key employees. We believe that our stock-based compensation program helps align the interests of our directors, executive officers and other key employees with our stockholders. We believe that our long-term stock-based incentives help promote long-term retention of our employees and encourage ownership of our common stock. If the 2024 plan is approved, we will be able to maintain our means of aligning the interests of our directors, executive officers and other key employees with the interests of our stockholders. |

  34. Summary of Sound Governance Features of the 2024 Plan

    | ✓ No automatic share replenishment or “evergreen” provision | ✓ Members of the committee administering the plan are non-employee and independent directors | | ✓ Will not be excessively dilutive to our stockholders | ✓ Stockholder approval is required for material revisions to the 2024 plan | | ✓ Limit on number of “full value” awards | ✓ No “tax gross-ups” | | ✓ No liberal share counting or “recycling” of shares from exercised stock options, SARs or other stock-based awards | ✓ Options, SARs and unvested performance awards are not entitled to dividend equivalent rights and no dividends will be paid on unvested awards | | ✓ No reload stock options or SARs | ✓ Limits on non-employee director compensation | | ✓ No re-pricing of “underwater” stock options or SARs without stockholder approval | ✓ Stock option and SAR exercise prices will not be lower than the fair market value on the grant date | | ✓ “Clawback” provisions | |

  35. Background for Shares Authorized for Issuance

    | • | Historical equity award granting practices, including our three-year average share usage rate (commonly referred to as “burn rate”); and |

  36. Shares Available and Outstanding Equity Awards

    Shares Available and Outstanding Equity Awards While the use of long-term incentives, in the form of equity awards, is an important part of our compensation program, we are mindful of our responsibility to our stockholders to exercise judgment in the granting of equity awards. In setting the number of shares of common stock available for issuance under the 2024 plan, the Board of Directors and Compensation Committee also considered shares currently available under the 2019 plan and total outstanding equity awards and how long the shares available under the 2019 plan are expected to last. To facilitate approval of the 2024 plan, set forth below is certain information about our shares of common stock that may be issued under our equity compensation plans as of November 21, 2023. As of November 21, 2023,

  37. Shares Available and Outstanding Equity Awards

    | • | we had 9,427,599 shares of common stock issued and outstanding. The market value of one share of common stock on November 21, 2023, as determined by reference to the closing price as reported on the Nasdaq Global Market, was $11.21; |

  38. Shares Available and Outstanding Equity Awards

    | • | 1,387,415 shares were subject to outstanding stock options under the 2019 plan and 439,560 shares were subject to outstanding stock options under the prior equity compensation plan; and |

  39. Shares Available and Outstanding Equity Awards

    | • | 157,059 shares remained available for issuance under the 2019 plan. |

  40. Historical Equity Award Granting Practices

    Historical Equity Award Granting Practices In setting the number of shares of common stock authorized for issuance under the 2024 plan, the Board of Directors and Compensation Committee also considered the historical number of equity awards granted under the 2019 plan in each of the last three fiscal years. The following table sets forth information regarding awards granted and earned and the annual burn rate for each of the last three fiscal years. The only equity awards granted during the last three fiscal years are stock options.

  41. Historical Equity Award Granting Practices

    | | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 | | Stock options granted | 277,613 | 174,840 | 419,874 | | Weighted average basic common shares outstanding during fiscal year | 9,693,482 | 9,216,216 | 9,116,472 | | Burn rate | 3.1% | 1.9% | 4.6% |

  42. Historical Equity Award Granting Practices

    The Board of Directors and Compensation Committee also considered our three-year average burn rate (fiscal 2021 to fiscal 2023) of approximately 3.1%, which is lower than the industry thresholds established by certain major proxy advisory firms. Based on historical and anticipated granting practices and the recent trading price of our common stock, we expect the additional shares authorized for issuance by the 2024 plan to cover awards for approximately three to four years. However, we cannot predict our future equity grant practices, the future price of our shares, or future hiring activity with any degree of certainty at this time, and the shares available for issuance under the 2024 plan could last for a shorter or longer time.

  43. Potential Dilution

    | (1) The only equity awards outstanding are stock options. No restricted stock, restricted stock units, performance stock units or other equity awards are outstanding. |

  44. Potential Dilution

    | (2) Dilution consists of the number of shares subject to equity awards outstanding as of November 21, 2023 divided by the number of shares of common stock outstanding as of November 21, 2023. |

  45. Potential Dilution

    | (3) Current potential dilution, or overhang, under the 2019 plan consists of the number of shares subject to equity awards outstanding as of November 21, 2023 and the number of shares available for future grant under the 2019 plan divided by the number of shares of common stock outstanding as of November 21, 2023. |

  46. Potential Dilution

    | (4) Current potential dilution, or overhang, under the 2024 Plan consists of the number of shares subject to equity awards outstanding as of November 21, 2023 and the number of shares available for future grant under the 2024 Plan, including the carryover shares, divided by the number of shares of common stock outstanding as of November 21, 2023. |

  47. Summary of the 2024 Plan Features

    | • | no more than 800,000 shares of our common stock may be issued pursuant to the exercise of incentive stock options; and |

  48. Summary of the 2024 Plan Features

    | • | to reserve shares or grant incentive awards in excess of the limitations provided in the 2024 plan; |

  49. Summary of the 2024 Plan Features

    | • | repurchasing the underwater options and stock appreciation rights and granting new incentive awards under the 2024 plan; or |

  50. Summary of the 2024 Plan Features

    | • | a change in control of NTIC of a nature that would be required to be reported pursuant to Section 13 or 15(d) of the Exchange Act, whether or not NTIC is then subject to such reporting requirements, including, without limitation, such time as (i) any person becomes, after the effective date of the 2024 plan, the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 40% or more of the combined voting power of our outstanding securities ordinarily having the right to vote at elections of directors, or (ii) individuals who constitute the Board of Directors on the effective date of the 2024 plan cease for any reason to constitute at least a majority of the Board of Directors, provided that any person becoming a director subsequent to the effective date of the 2024 plan whose election, or nomination for election by our stockholders, was approved by a vote of at least a majority of the directors comprising the Board of Directors on the effective date of the 2024 plan will, for purposes of this clause (ii), be considered as though such persons were a member of the Board of Directors on the effective date of the 2024 plan. |

  51. Securities Authorized for Issuance Under Equity Compensation Plans

    Securities Authorized for Issuance Under Equity Compensation Plans The following table summarizes outstanding options and other awards under NTIC’s equity compensation plans as of August 31, 2023. NTIC’s equity compensation plans as of August 31, 2023 were the Northern Technologies International Corporation Amended and Restated 2019 Stock Incentive Plan, the Northern Technologies International Corporation Amended and Restated 2007 Stock Incentive Plan, and the Northern Technologies International Corporation Employee Stock Purchase Plan. Except for automatic annual grants of $50,000 in options to purchase shares of NTIC common stock, or RSUs if so elected, to NTIC’s directors in consideration for their services as directors of NTIC and an automatic annual grant of $10,000 in options to purchase shares of NTIC common stock to NTIC’s Chairman of the Board in consideration for his services as Chairman, in each case on the first day of each fiscal year, and automatic initial pro rata grants of $50,000 in options to purchase shares of NTIC common stock to NTIC’s new directors in consideration for their services as directors of NTIC on the first date of their appointment as directors, options and other awards granted in the future under the Northern Technologies International Corporation Amended and Restated 2019 Stock Incentive Plan are within the discretion of the Board of Directors and the Compensation Committee of the Board of Directors and, therefore, cannot be ascertained at this time. No future grants of options or other stock awards will be made under the Northern Technologies International Corporation Amended and Restated 2007 Stock Incentive Plan.

  52. Securities Authorized for Issuance Under Equity Compensation Plans

    | Plan Category | (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | (b) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) | | Equity compensation plans approved by security holders | 1,557,130(1)(2) | $11.08 | 488,937(3) | | Equity compensation plans not approved by security holders | - | - | - | | Total | 1,557,130(1)(2) | $11.08 | 488,937(3) |

  53. Securities Authorized for Issuance Under Equity Compensation Plans

    | (1) Amount includes 439,559 shares of NTIC common stock issuable upon the exercise of stock options outstanding as of August 31, 2023 under the Northern Technologies International Corporation Amended and Restated 2007 Stock Incentive Plan and 1,117,571 shares of NTIC common stock issuable upon the exercise of stock options outstanding as of August 31, 2023 under the Northern Technologies International Corporation Amended and Restated 2019 Stock Incentive Plan. |

  54. Securities Authorized for Issuance Under Equity Compensation Plans

    | (2) Excludes employee stock purchase rights accruing under the Northern Technologies International Corporation Employee Stock Purchase Plan. Under such plan, each eligible employee may purchase up to 2,000 shares of NTIC common stock at semi-annual intervals on February 28th or 29th (as the case may be) and August 31st each year at a purchase price per share equal to 90% of the lower of (i) the closing sales price per share of NTIC common stock on the first day of the offering period or (ii) the closing sales price per share of NTIC common stock on the last day of the offering period. |

  55. Securities Authorized for Issuance Under Equity Compensation Plans

    | (3) Amount includes 426,903 shares available as of August 31, 2023 for future issuance under Northern Technologies International Corporation Amended and Restated 2019 Stock Incentive Plan and 62,034 shares available at August 31, 2023 for future issuance under the Northern Technologies International Corporation Employee Stock Purchase Plan. |

  56. Compensation Committee

    | • | recommending to the Board of Directors for its determination the annual salaries, incentive compensation, long-term compensation and any and all other compensation applicable to our executive officers; |

  57. Compensation Committee

    | • | administering our equity compensation plans and recommending to the Board of Directors for its determination grants of options or other equity-based awards for executive officers, employees and independent consultants under our equity compensation plans; |

  58. Stockholder Engagement

    | What We Heard | What We Did | | Encourage Board refreshment | We added two new members to the Board of Directors in October 2019 and one new member in 2023. | | Increase Board gender diversity | We added Nancy E. Calderon, Sarah E. Kemp and Cristina Pinho to the Board of Directors and updated our Nominating and Corporate Governance Committee Charter to include responsibility for making recommendations to the Board of Directors regarding director diversity. | | Increase stockholder influence over director elections | In November 2020, we adopted a “plurality plus” vote standard for uncontested director elections, with a director resignation policy, instead of a simple plurality vote standard. | | Align long-term incentives | We extended the vesting of our annual stock option grants to three-year vesting in response to a concern raised by one of our institutional stockholders. | | Increase visibility of ESG principles | We adopted a Health, Safety and Environment Policy as well as a Human Rights Policy to formalize our approach and further our goals with respect to these matters, as described above. We have also added an ESG section to our investor relations website to increase visibility. | | Ensure the recovery of incentive compensation based on incorrect calculations that resulted in a financial restatement or egregious behavior | We adopted a robust clawback policy which applies to not only financial restatements but also if an executive engages in egregious conduct that is substantially detrimental to NTIC. | | Align the interests of executive officers and directors with those of stockholders | We adopted stock ownership guidelines applicable to our executive officers and directors to ensure that their interests would be closely aligned with those of our stockholders. |

  59. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION

  60. DIRECTOR COMPENSATION – FISCAL 2023

    DIRECTOR COMPENSATION – FISCAL 2023

  61. DIRECTOR COMPENSATION – FISCAL 2023

    | Name | Fees Earned or Paid in Cash ($) | Option Awards ($)(1)(2) | All Other Compensation ($)(3) | Total ($) | | Nancy E. Calderon | $49,000 | $50,000 | $— | $99,000 | | Sarah E. Kemp | 37,000 | 50,000 | — | 87,000 | | Sunggyu Lee, Ph.D. | 35,000 | 50,000 | — | 85,000 | | Ramani Narayan, Ph.D. | 32,000 | 50,000 | 144,000 | 226,000 | | Richard J. Nigon | 60,500 | 60,000 | — | 120,500 | | Cristina Pinho | 25,250 | 31,855 | — | 57,105 | | Konstantin von Falkenhausen | 46,500 | 50,000 | — | 96,500 |

  62. DIRECTOR COMPENSATION – FISCAL 2023

    _____________________

  63. DIRECTOR COMPENSATION – FISCAL 2023

    | (1) The amounts in this column do not reflect the compensation actually received by the directors nor do they reflect the actual value that will be recognized by the directors. Instead, the amounts reflect the grant date fair value for option grants made by us in fiscal 2023, as calculated in accordance with FASB ASC Topic 718. |

  64. DIRECTOR COMPENSATION – FISCAL 2023

    On September 1, 2022, each of our then current directors, other than Mr. Lynch, received a stock option to purchase 10,309 shares of our common stock at an exercise price of $11.38 per share granted under the Northern Technologies International Corporation Amended and Restated 2019 Stock Incentive Plan, the material terms of which are described in more detail under “Executive Compensation—Stock Incentive Plans.” These options vested in full on September 1, 2023 and will expire on August 31, 2032 or earlier in the case of a director whose service as a director is terminated prior to such date. In addition, on September 1, 2022, Mr. Nigon received an additional stock option to purchase 2,062 shares of our common stock in consideration for his service as Chairman of the Board. The terms of this stock option are identical to the other director stock options granted on that date. See “—Non-Employee Director Compensation Program—Stock Options.” The grant date fair value associated with these awards and as calculated in accordance with FASB ASC Topic 718 is determined based on our Black-Scholes option pricing model. The grant date fair value per share for the options granted on September 1, 2022 was $4.85 and was determined using the following specific assumptions: risk free interest rate: 3.30%; expected life: 10.0 years; expected volatility: 45.2%; and expected dividend yield: 0%. On January 20, 2023, Ms. Pinho received a stock option to purchase 5,511 shares of our common stock at an exercise price of $12.95 per share granted under the Northern Technologies International Corporation Amended and Restated 2019 Stock Incentive Plan. This option vests in full on January 20, 2024 and will expire on January 19, 2033 or earlier if her service as a director is terminated prior to such date. The grant date fair value associated with this award and as calculated in accordance with FASB ASC Topic 718 is determined based on our Black-Scholes option pricing model. The grant date fair value per share for the options granted on January 20, 2023 was $5.78 and was determined using the following specific assumptions: risk free interest rate: 3.43%; expected life: 10.0 years; expected volatility: 45.1%; and expected dividend yield: 0%.

  65. DIRECTOR COMPENSATION – FISCAL 2023

    | (2) The table below provides information regarding the aggregate number of options to purchase shares of our common stock outstanding at August 31, 2023 and held by each of the directors listed in the Director Compensation Table. Note that because of the grant date, neither the Director Compensation Table nor the table below reflect option grants on September 1, 2023. See “—Non-Employee Director Compensation Program—Stock Options.” |

  66. DIRECTOR COMPENSATION – FISCAL 2023

    | Name | Aggregate Number Of Securities Underlying Options | Exercisable/ Unexercisable | | Exercise Price(s) | Expiration Date(s) | | Nancy E. Calderon | 41,560 | 31,251 | /10,309 | $8.24 – 16.97 | 10/21/2029 – 08/31/2032 | | Sarah E. Kemp | 41,560 | 31,251 | /10,309 | $8.24 – 16.97 | 10/21/2029 – 08/31/2032 | | Sunggyu Lee, Ph.D. | 10,309 | 0 | /10,309 | $11.38 | 08/31/2032 | | Ramani Narayan, Ph.D. | 22,714 | 12,405 | /10,309 | $16.97 – 18.23 | 08/31/2028 – 08/31/2032 | | Richard J. Nigon | 96,573 | 84,202 | /12,371 | $7.43 – 18.23 | 08/31/2024 – 08/31/2032 | | Cristina Pinho | 5,511 | 0 | /5,511 | $12.95 | 01/19/2033 | | Konstantin von Falkenhausen | 82,477 | 72,168 | /10,309 | $6.70 – 18.23 | 08/31/2024 – 08/31/2032 |

  67. DIRECTOR COMPENSATION – FISCAL 2023

    | (3) We do not provide perquisites or other personal benefits to our directors. The amounts reflected for Dr. Narayan reflects consulting fees paid during the fiscal year ended August 31, 2023 as described in more detail below under “—Consulting Agreement.” |

  68. Non-Employee Director Compensation Program

    Non-Employee Director Compensation Program Overview. Our non-employee directors for the purposes of our director compensation program currently consist of Nancy E. Calderon, Sarah E. Kemp, Sunggyu Lee, Ph.D., Ramani Narayan, Ph.D., Richard J. Nigon, Cristina Pinho and Konstantin von Falkenhausen. Our non-employee directors for fiscal 2023 were Nancy E. Calderon, Sarah E. Kemp, Sunggyu Lee, Ph.D., Ramani Narayan, Ph.D., Richard J. Nigon, Cristina Pinho and Konstantin von Falkenhausen. We use a combination of cash and long-term equity-based incentive compensation in the form of annual stock option grants to attract and retain qualified candidates to serve on the Board of Directors. In setting non-employee director compensation, we follow the processes and procedures described under “Corporate Governance—Nominating and Corporate Governance Committee—Processes and Procedures for the Determination of Director Compensation.” Cash Retainers and Meeting Fees. Each of our non-employee directors receives annual cash retainers and meeting fees. The following table sets forth the annual cash retainers paid to our non-employee directors during fiscal 2023:

  69. Non-Employee Director Compensation Program

    | Description | Annual Cash Retainer | | Non-employee Board Member | $25,000 | | Chairman of the Board | 15,000 | | Audit Committee Chair | 5,000 | | Audit Committee Member (including Chair) | 4,500 | | Compensation Committee Chair | 4,000 | | Compensation Committee (including Chair) | 3,000 | | Nominating and Corporate Governance Committee Chair | 2,000 | | Nominating and Corporate Governance Committee (including Chair) | 3,000 |

  70. Non-Employee Director Compensation Program

    Each of our non-employee directors also receives $1,000 for each Board, Board committee and strategy review meeting attended. No director, however, earns more than $1,000 per day in Board, Board committee and strategy review meeting fees. Stock Options/RSU Grants. Pursuant to our non-employee director compensation program, each non-employee director who is expected to stand for re-election at the next annual meeting of stockholders, is automatically granted a ten-year non-qualified option to purchase $50,000 in shares of our common stock on the first day of each fiscal year in consideration for his or her service as a director of NTIC, and the Chairman of the Board is automatically granted an additional ten-year non-qualified option to purchase $10,000 in shares of our common stock on the first day of each fiscal year in consideration for his or her services as Chairman; provided, however, that a non-employee director may elect to receive $50,000 in restricted stock units (“RSUs”) in lieu of options so long as such election is made prior to the grant date. In addition, each new non-employee director is automatically granted a ten-year non-qualified option to purchase a pro rata portion of $50,000 shares of our common stock calculated by dividing the number of months remaining in the fiscal year at the time of election or appointment by 12 on the date the director is first elected or appointed as a director of NTIC. The number of shares of common stock underlying the options or RSUs is determined based on the grant date fair value of the options or RSUs. Each option becomes exercisable in full on the one-year anniversary of the grant date. The exercise price of such options is equal to the fair market value of a share of NTIC’s common stock on the grant date. RSUs will vest on the one-year anniversary of the grant date. Each non-employee director of NTIC as of the first day of fiscal 2023, September 1, 2022, received a stock option award pursuant to this program. More recently, each current non-employee director of NTIC as of the first day of fiscal 2024, September 1, 2023, received a stock option award pursuant to this program. These stock options will vest in full on the first anniversary of the grant date. Under the terms of our stock incentive plan, unless otherwise provided in a separate agreement or modified in connection with the termination of a director’s service, if a director’s service with NTIC terminates for any reason, the unvested portion of options then held by the director will immediately terminate and the director’s right to exercise the then vested portion will:

  71. Non-Employee Director Compensation Program

    | • | immediately terminate if the director’s service relationship with NTIC terminated for “cause”; |

  72. Non-Employee Director Compensation Program

    | • | continue for a period of 12 months if the director’s service relationship with NTIC terminates as a result of the director’s death, disability or retirement; or |

  73. Non-Employee Director Compensation Program

    | • | continue for a period of three months if the director’s service relationship with NTIC terminates for any reason, other than for cause or upon the director’s death, disability or retirement. |

  74. Non-Employee Director Compensation Program

    If a director’s service with NTIC terminates for any reason, the unvested portion of any RSUs such director has elected to receive will immediately be terminated and forfeited. We refer you to note (1) to the “Director Compensation Table” for a summary of all option grants to our non-employee directors during the fiscal year ended August 31, 2023 and note (2) to the “Director Compensation Table” for a summary of all options to purchase shares of our common stock held by our non-employee directors as of August 31, 2023. Reimbursement of Expenses. All of our directors are reimbursed for travel expenses for attending meetings and other miscellaneous out-of-pocket expenses incurred in performing their Board of Directors functions.

  75. Compensation Review

    | • | Pay for performance. We tie compensation directly to financial performance. Our annual bonus plan pays out only if a certain minimum adjusted earnings threshold is met, and the payouts are completely dependent upon our actual adjusted earnings. |

  76. Compensation Review

    | • | Equity-based pay. A significant portion of executives’ compensation is “equity-based” and in the form of stock-based incentive awards. For fiscal 2023, approximately 26.0% of total compensation for our named executive officers was equity-based, assuming grant date fair values for equity awards. |

  77. Compensation Review

    | • | Clawback policy. Our stock incentive plan and related award agreements include a “clawback” mechanism to recoup incentive compensation if it is determined that executives engaged in certain conduct adverse to our interests. In addition, in August 2018, we adopted a clawback policy pursuant to which we may recover certain incentive compensation from current or former executive officers in the event a financial metric used to determine the vesting or payment of incentive compensation to an executive was calculated incorrectly or the executive engaged in egregious conduct that is substantially detrimental to NTIC. Effective as of October 2, 2023, we revised this clawback policy to comply with the mandatory recovery of erroneously paid compensation rules of the Nasdaq Stock Market. |

  78. Compensation Review

    | • | Provide fair and competitive compensation opportunities that attract and retain executives. |

  79. Compensation Review

    | • | Approves and recommends that the Board approve the total executive compensation package for each executive, including his base salary, annual bonus payout and annual stock option awards; |

  80. Compensation Review

    | • | Approves and recommends that the Board approve the terms of our annual bonus plan; |

  81. Compensation Review

    | • | Approves and recommends that the Board approve annual stock option grants; |

  82. Compensation Review

    | • | the retention value of executive equity holdings, including outstanding stock options; |

  83. Compensation Review

    | • | the dilutive effect on the interests of our stockholders of long-term equity-based incentive awards; and |

  84. Compensation Review

    | • | Annual incentive compensation; |

  85. Compensation Review

    | • | Long-term equity-based incentive compensation, in the form of stock options; and |

  86. Compensation Review

    | Element | Key Characteristics | Purpose | Key Fiscal 2023 Actions | | Base Salary | A fixed amount, paid in cash and reviewed annually and, if appropriate, adjusted. | Provide a source of fixed income that is competitive and reflects scope and responsibility of the position held. | Our named executive officers received a 5.0% increase to their fiscal 2022 annual base salaries. | | Annual Incentive | A variable, short-term element of compensation that is typically payable in cash and is based on Adjusted EBITOI and individual performance goals. | Motivate and reward our executives for achievement of annual business results intended to drive overall company performance. | Messrs. Lynch and Wolsfeld received bonuses in the amount of $382,207 and $282,502, respectively, in each case representing 77.4% of their annual base salary. A portion of the annual incentive earned for fiscal 2023 was paid in the form of a stock option grant made at the beginning of fiscal 2023, resulting in cash bonuses of $151,752 for Mr. Lynch and $112,165 for Mr. Wolsfeld. |

  87. Compensation Review

    | Long-Term Equity-Based Incentive | A variable, long-term element of compensation that is provided in the form of stock options. Stock options are time-based and vest annually over three years. Options granted prior to fiscal 2021 vested on the one-year anniversary of the grant date. | Align the interests of our executives with the long-term interests of our stockholders; promote stock ownership and create significant incentives for executive retention. | No significant changes were made. The fiscal 2023 stock option grant was intended as partial payout of the fiscal 2023 annual bonus program. | | Health and Welfare Benefits | Includes health, dental and life insurance. | Provide competitive health and welfare benefits at a reasonable cost and promote employee health. | No significant changes were made. | | Retirement Plans | Includes a 401(k) plan. We do not provide pension arrangements or post-retirement health coverage for our executives or employees. We also do not provide any nonqualified defined contribution or other deferred compensation plans. | Provide an opportunity for employees to save and prepare financially for retirement. | No significant changes were made. | | Perquisites | Includes use of a company-owned automobile. We do not provide any other perquisites to our executives. | Assist in the attraction and retention of executives. | No significant changes were made. |

  88. Compensation Review

    In addition, we have entered into employment agreements with our named executive officers to provide certain payments and benefits in the event of a change in control, which are payable only in the event their employment is terminated in connection with the change in control (“double-trigger” provisions). These change in control protections provide consideration to executives for certain restrictive covenants that apply following termination of employment and provide continuity of management in connection with a threatened or actual change in control transaction. If an executive’s employment is terminated without “cause” or by the executive for “good reason” (as defined in the employment agreements) within 24 months following a change in control, the executive will be entitled to receive a lump sum payment equal to two times, in the case of the CEO, and one and one-half times, in the case of the CFO, his average total annual compensation for the two most recently completed fiscal years. The average total annual compensation will be determined based on the calculation used to determine total compensation in the Summary Compensation Table. Accordingly, it will not include equity gains; only, the grant date fair value of equity grants. Additionally, each of the CEO and CFO is eligible to receive a pro rata portion of the target bonus that the executive otherwise would have been eligible to receive under our bonus plan for the fiscal year during which the executive’s employment is terminated, with such pro rata portion based on the number of completed months during the fiscal year that the executive was employed with NTIC. These arrangements, and a quantification of the payment and benefits provided under these arrangements, are described in more detail under “—Potential Payments Upon Termination or Change in Control—Change in Control Arrangements.” Other than the immediate acceleration of equity-based awards, which we believe aligns our executives’ interests with those of our stockholders by allowing executives to participate fully in the benefits of a change in control as to all of their equity, in order for a named executive officer to receive any other payments or benefits as a result of a change in control of NTIC, there must be a termination of the executive’s employment, either by us without cause or by the executive for good reason. The termination of the executive’s employment by the executive without good reason will not give rise to additional payments or benefits either in a change in control situation or otherwise. Thus, these additional payments and benefits will not just be triggered by a change in control, but also will require a termination event not within the control of the executive, and thus are known as “double trigger” change in control arrangements. As opposed to the immediate acceleration of stock options, we believe that other change in control payments and benefits should properly be tied to termination following a change in control, given the intent that these amounts provide economic security to ease the executive’s transition into new employment. We believe these change in control arrangements are an important part of our executive compensation program in part because they mitigate some of the risk for executives working in a smaller company where there is a meaningful risk that NTIC may be acquired. Change in control benefits are intended to attract and retain qualified executives who, absent these arrangements and in anticipation of a possible change in control of NTIC, might consider seeking employment alternatives to be less risky than remaining with NTIC through the transaction. We believe that relative to NTIC’s overall value, our potential change in control benefits are relatively small. We also believe that the form and amount of these change in control benefits are fair and reasonable to both NTIC and our executives. The Compensation Committee reviews our change of control arrangements periodically to ensure that they remain necessary and appropriate. Other Severance Arrangements. Each of our named executive officers is entitled to receive severance benefits upon certain other qualifying terminations of employment, other than a change in control, pursuant to the provisions of such executive’s employment agreement. These severance arrangements are primarily intended to retain our executives and provide consideration to those executives for certain restrictive covenants that apply following termination of employment. Additionally, we entered into the employment agreements because they provide us valuable protection by subjecting the executives to restrictive covenants that prohibit the disclosure of confidential information during and following their employment and limit their ability to engage in competition with us or otherwise interfere with our business relationships following their termination of employment. For more information on our employment agreements and severance arrangements with our named executive officers, see the discussions below under “—Summary Compensation—Employment Agreements” and “—Potential Payments Upon a Termination or Change in Control.” We believe that the form and amount of these severance benefits are fair and reasonable to both NTIC and our executives. The Compensation Committee reviews our severance arrangements periodically to ensure that they remain necessary and appropriate. Stock Ownership Guidelines In November 2021, the Board of Directors adopted stock ownership guidelines that are intended to align the interests of our executive officers with those of our stockholders. As of the date of this proxy statement, each of our executive officers required to meet the stock ownership guidelines had met such guideline. The stock ownership guidelines for our executive officers are as follows:

  89. SUMMARY COMPENSATION TABLE – FISCAL 2023

    SUMMARY COMPENSATION TABLE – FISCAL 2023

  90. SUMMARY COMPENSATION TABLE – FISCAL 2023

    | Name and Principal Position | Fiscal Year | Salary | Option Awards(1) | Non-Equity Incentive Plan Compensation(2) | All Other Compensation(3) | Total | | G. Patrick Lynch | 2023 | $493,735 | $230,455 | $151,752 | $13,102 | $889,044 | | President and Chief Executive Officer | 2022 | 470,224 | 237,217 | 169,310 | 13,102 | 889,853 | | Matthew C. Wolsfeld | 2023 | 364,935 | 170,337 | 112,165 | 12,875 | 660,312 | | Chief Financial Officer and Corporate Secretary | 2022 | 347,557 | 175,334 | 125,142 | 12,875 | 660,908 |

  91. SUMMARY COMPENSATION TABLE – FISCAL 2023

    | __________________________ |

  92. SUMMARY COMPENSATION TABLE – FISCAL 2023

    | (1) On September 1, 2022, each of the named executive officers was granted a stock option under the Northern Technologies International Corporation 2019 Stock Incentive Plan. We refer you to the information under the heading “Compensation Review—Elements of Our Executive Compensation Program—Long-Term Equity-Based Incentive Compensation” for a discussion of the option grants and their terms. The amounts reflected in the column entitled “Option Awards” for each officer represent the aggregate grant date fair value for the option awards, as computed in accordance with FASB ASC Topic 718. The grant date fair value is determined based on a Black-Scholes option pricing model. The grant date fair value per share for the options granted on September 1, 2022 was $4.85 and was determined using the following specific assumptions: risk free interest rate: 3.30%; expected life: 10.0 years; expected volatility: 45.2%; and expected dividend yield: 0%. |

  93. SUMMARY COMPENSATION TABLE – FISCAL 2023

    | (2) The amounts reflected in the column entitled “Non-Equity Incentive Plan Compensation” reflect the cash amount of bonus earned by each of the officers in consideration for their fiscal 2023 and 2022 performance, respectively, but paid to such officers during fiscal 2024 and 2023, respectively. We refer you to the information under “Compensation Review—Elements of Our Executive Compensation Program—Annual Incentive Compensation” for a discussion of the factors taken into consideration by the Board of Directors, upon recommendation of the Compensation Committee, in determining the amount of bonus paid to each named executive officer. |

  94. SUMMARY COMPENSATION TABLE – FISCAL 2023

    | (3) The amounts shown in the column entitled “All Other Compensation” for fiscal 2023 include the following with respect to each named executive officer: |

  95. SUMMARY COMPENSATION TABLE – FISCAL 2023

    | Name | 401(k) Match | Personal Use of Auto | | G. Patrick Lynch | $8,750 | $4,352 | | Matthew C. Wolsfeld | 8,750 | 4,125 |

  96. Outstanding Equity Awards at Fiscal Year End

    Outstanding Equity Awards at Fiscal Year End The table set forth below provides information regarding stock options for each of our named executive officers that remained outstanding at August 31, 2023. Note that because of the grant date, the table set forth below does not reflect option grants on September 1, 2023. We did not have any equity incentive plan awards or stock awards outstanding at August 31, 2023. Share and per share data have been adjusted to reflect our two-for-one stock split that was effective June 28, 2019.

  97. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END—FISCAL 2023

    OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END—FISCAL 2023

  98. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END—FISCAL 2023

    | | Option Awards | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price ($) | Option Expiration Date | | G. Patrick Lynch | 10,488 | 0 | 10.05 | 08/31/2024 | | | 14,574 | 0 | 7.43 | 08/31/2025 | | | 16,072 | 0 | 6.70 | 08/31/2026 | | | 11,704 | 0 | 9.18 | 08/31/2027 | | | 27,596 | 0 | 18.23 | 08/31/2028 | | | 58,651 | 0 | 10.80 | 08/31/2029 | | | 49,828 | 24,914(2) | 8.24 | 08/31/2030 | | | 10,847 | 21,693(3) | 16.97 | 08/31/2031 | | | 0 | 47,517(4) | 11.38 | 08/31/2032 | | Matthew C. Wolsfeld | 7,752 | 0 | 10.05 | 08/31/2024 | | | 10,772 | 0 | 7.43 | 08/31/2025 | | | 11,880 | 0 | 6.70 | 08/31/2026 | | | 8,650 | 0 | 9.18 | 08/31/2027 | | | 20,396 | 0 | 18.23 | 08/31/2028 | | | 43,351 | 0 | 10.80 | 08/31/2029 | | | 36,830 | 18,414(2) | 8.24 | 08/31/2030 | | | 8,017 | 16,034(3) | 16.97 | 08/31/2031 | | | 0 | 35,121(4) | 11.38 | 08/31/2032 |

  99. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END—FISCAL 2023

    __________________________

  100. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END—FISCAL 2023

    | (1) All options described in this table were granted under the Northern Technologies International Corporation 2019 Stock Incentive Plan or the Northern Technologies International Corporation Amended and Restated 2007 Stock Incentive Plan. Under these plans, upon the occurrence of a change in control, the unvested and unexercisable options will be accelerated and become fully vested and immediately exercisable as of the date of the change in control. For more information, we refer you to the discussion below under “—Stock Incentive Plans.” |

  101. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END—FISCAL 2023

    | (2) These options vest over a three-year period, with one-third of the underlying shares vesting on each of September 1, 2021, 2022 and 2023 so long as the individual remains an employee of NTIC as of such date. |

  102. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END—FISCAL 2023

    | (3) These options vest over a three-year period, with one-third of the underlying shares vesting on each of September 1, 2022, 2023 and 2024 so long as the individual remains an employee of NTIC as of such date. |

  103. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END—FISCAL 2023

    | (4) These options vest over a three-year period, with one-third of the underlying shares vesting on each of September 1, 2023, 2024 and 2025 so long as the individual remains an employee of NTIC as of such date. |

  104. Option Exercises for Fiscal 2023

    Option Exercises for Fiscal 2023 The following table summarizes all of the stock options exercised during fiscal 2023:

  105. Option Exercises for Fiscal 2023

    | | Option Awards(1) | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | | G. Patrick Lynch | 36,284 | 320,553 | | | 11,610 | 69,776 | | Matthew C. Wolsfeld | 27,218 | 236,933 | | | 8,582 | 51,578 |

  106. Option Exercises for Fiscal 2023

    __________________________

  107. Option Exercises for Fiscal 2023

    | (1) The number of shares acquired upon exercise reflects the gross number of shares acquired absent any netting for shares surrendered to pay the option exercise price and/or satisfy tax withholding requirements. The value realized on exercise represents the gross number of shares acquired on exercise multiplied by the market price of our common stock on the exercise date, less the per share exercise price. |

  108. Pay Versus Performance Disclosure

    Pay Versus Performance Disclosure Pay Versus Performance Table As required by Section 953(a) of the Dodd-Frank Act and Item 402(v) of SEC Regulation S-K, we are providing the following information about the relationship between “compensation actually paid” to our NEOs, within the meaning of such rules, and certain financial performance measures of our Company. The table below provides information regarding compensation actually paid to our CEO, our principal executive officer (PEO), and compensation actually paid to our CFO, our other non-PEO named executive officer, during each of the past two fiscal years, as well as total stockholder return and net income (loss) for each of the past two fiscal years.

  109. Pay Versus Performance Disclosure

    | | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2)(3) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers(4) | Average Compensation Actually Paid to Non-PEO Named Executive Officers(5)(6) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return(7) | Net Income(8) | | Year | ($) | ($) | ($) | ($) | ($) | ($) | | 2023 | 889,044 | 979,459 | 660,312 | 727,138 | 80.74 | 4,237,731 | | 2022 | 889,853 | 607,859 | 660,908 | 452,477 | 72.35 | 7,185,934 |

  110. Pay Versus Performance Disclosure

    ________________________

  111. Pay Versus Performance Disclosure

    | (1) Amounts reported represent the Summary Compensation Table total for our CEO for each of the years presented. See “Executive Compensation—Summary Compensation Table.” |

  112. Pay Versus Performance Disclosure

    | (2) Amounts reported represent compensation actually paid to our CEO for each of the years presented. The dollar amounts in this column do not reflect the actual amount of compensation earned by or paid to our CEO during the applicable year. |

  113. Pay Versus Performance Disclosure

    | (3) Compensation actually paid to our PEO consists of the following amounts deducted from or added to the Summary Compensation Table total for our CEO for each of the years presented: |

  114. Pay Versus Performance Disclosure

    | | Patrick L. Lynch | | Summary Compensation Table Total for 2023 | $889,044 | | Deduct: Stock awards(a) | 0 | | Deduct: Option awards(b) | 230,455 | | Add: Year-end value of equity awards granted during the year that are outstanding and unvested(c) | 272,272 | | Add: Change in fair value of equity awards granted in prior years that are outstanding and unvested(d) | 27,498 | | Add: Change in fair value of equity awards granted in prior years that vested during the year(e) | 21,099 | | Add: Value of dividend equivalents accrued on equity awards during the year | 0 | | Compensation Actually Paid for 2023 | 979,458 | | Summary Compensation Table Total for 2022 | $889,853 | | Deduct: Stock awards(a) | 0 | | Deduct: Option awards(b) | 237,217 | | Add: Year-end value of equity awards granted during the year that are outstanding and unvested(c) | 148,057 | | Add: Change in fair value of equity awards granted in prior years that are outstanding and unvested(d) | (128,556) | | Add: Change in fair value of equity awards granted in prior years that vested during the year(e) | (64,278) | | Add: Value of dividend equivalents accrued on equity awards during the year | 0 | | Compensation Actually Paid for 2022 | 607,859 |

  115. Pay Versus Performance Disclosure

    | (a) Represents the total of the amounts reported in the “Stock Awards” column in the Summary Compensation Table for the applicable year. |

  116. Pay Versus Performance Disclosure

    | (b) Represents the total of the amounts reported in the “Option Awards” column in the Summary Compensation Table for the applicable year. |

  117. Pay Versus Performance Disclosure

    | (c) Represents the year-end value of equity awards granted during the applicable year that are outstanding and unvested as of the end of such applicable year. |

  118. Pay Versus Performance Disclosure

    | (d) Represents the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any equity awards granted in prior years that are outstanding and unvested as of the end of such applicable year. |

  119. Pay Versus Performance Disclosure

    | (e) Represents the amount of change as of the vesting date (from the end of the prior fiscal year) in fair value of any equity awards granted in prior years that vested during the applicable year. |

  120. Pay Versus Performance Disclosure

    Since we do not have a pension plan, all of the foregoing adjustments are equity award adjustments for each applicable year and include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of such applicable year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any equity awards granted in prior years that are outstanding and unvested as of the end of such applicable year; (iii) for equity awards that are granted and vest in the same applicable year, the fair value as of the vesting date; (iv) for equity awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for equity awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on equity awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for such applicable year. Adjustments as provided in clauses (iii) and (vi) are inapplicable for all of the years presented in the table. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The value of option awards is based on the fair value as of the end of the covered year or change in fair value during the covered year, in each case based on our Black-Scholes option pricing model, the assumptions of which are described in Note 10 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended August 31, 2023.

  121. Pay Versus Performance Disclosure

    | (4) Average Summary Compensation Table total for non-PEO named executive officers reflects the Summary Compensation Table total for Matthew C. Wolsfeld. |

  122. Pay Versus Performance Disclosure

    | (5) The amounts in this column represent the compensation actually paid to Matthew C. Wolsfeld, our non-PEO named executive officer, for each of the years presented. The dollar amounts in this column do not reflect the actual average amount of compensation earned by or paid to the non-PEO during the applicable year. |

  123. Pay Versus Performance Disclosure

    | (6) Average compensation actually paid to our non-PEO named executive officer consists of the following amounts deducted from or added to the Summary Compensation Table total for our CFO for each of the years presented: |

  124. Pay Versus Performance Disclosure

    | | Matthew C. Wolsfeld | | Summary Compensation Table Total for 2023 | $660,312 | | Deduct: Stock awards(a) | 0 | | Deduct: Option awards(b) | 170,337 | | Add: Year-end value of equity awards granted during the year that are outstanding and unvested(c) | 201,243 | | Add: Change in fair value of equity awards granted in prior years that are outstanding and unvested(d) | 20,325 | | Add: Change in fair value of equity awards granted in prior years that vested during the year(e) | 15,595 | | Add: Value of dividend equivalents accrued on equity awards during the year | 0 | | Compensation Actually Paid for 2023 | 727,138 | | Summary Compensation Table Total for 2022 | $660,908 | | Deduct: Stock awards(a) | 0 | | Deduct: Option awards(b) | 175,334 | | Add: Year-end value of equity awards granted during the year that are outstanding and unvested(c) | 109,432 | | Add: Change in fair value of equity awards granted in prior years that are outstanding and unvested(d) | (95,020) | | Add: Change in fair value of equity awards granted in prior years that vested during the year(e) | (47,510) | | Add: Value of dividend equivalents accrued on equity awards during the year | 0 | | Compensation Actually Paid for 2022 | 452,477 |

  125. Pay Versus Performance Disclosure

    | (a) Represents the total of the amounts reported in the “Stock Awards” column in the Summary Compensation Table for the applicable year. |

  126. Pay Versus Performance Disclosure

    | (b) Represents the total of the amounts reported in the “Option Awards” column in the Summary Compensation Table for the applicable year. |

  127. Pay Versus Performance Disclosure

    | (c) Represents the year-end value of equity awards granted during the applicable year that are outstanding and unvested as of the end of such applicable year. |

  128. Pay Versus Performance Disclosure

    | (d) Represents the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any equity awards granted in prior years that are outstanding and unvested as of the end of such applicable year. |

  129. Pay Versus Performance Disclosure

    | (e) Represents the amount of change as of the vesting date (from the end of the prior fiscal year) in fair value of any equity awards granted in prior years that vested during the applicable year. |

  130. Pay Versus Performance Disclosure

    Since we do not have a pension plan, all of the foregoing adjustments are equity award adjustments for each applicable year and include the addition (or subtraction, as applicable) of the following: (i) the average year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of such applicable year; (ii) the average amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any equity awards granted in prior years that are outstanding and unvested as of the end of such applicable year; (iii) for equity awards that are granted and vest in the same applicable year, the average fair value as of the vesting date; (iv) for equity awards granted in prior years that vest in the applicable year, the average amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for equity awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the average fair value at the end of the prior fiscal year; and (vi) the average dollar value of any dividends or other earnings paid on equity awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for such applicable year. Adjustments as provided in clauses (iii) and (vi) are inapplicable for all of the years presented in the table. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The value of option awards is based on the fair value as of the end of the covered year or change in fair value during the covered year, in each case based on our Black-Scholes option pricing model, the assumptions of which are described in Note 10 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended August 31, 2023.

  131. Pay Versus Performance Disclosure

    | (7) The total shareholder return is calculated by the difference between our common stock price at the end of the measurement period by our stock price at the beginning of the measurement period, including dividends. |

  132. Pay Versus Performance Disclosure

    | (8) Amounts reported represent the amount of net income reflected in our audited consolidated financial statements for the applicable year and is presented in thousands. |

  133. Pay Versus Performance Disclosure

    Pay Versus Performance Relationship In accordance with Item 402(v) of SEC Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay versus Performance table above. The graphs below illustrate a high correlation between compensation actually paid to our NEOs and our cumulative total stockholder return (TSR) and little correlation between compensation actually paid to our NEOs during 2022 and 2023 and our net income during those years. Compensation Actually Paid and Company TSR. As demonstrated by the following graph, the amount of compensation actually paid to our NEOs is aligned with our cumulative TSR over the two years presented in the table. The alignment of compensation actually paid with our cumulative TSR over the period presented is because a significant portion of the compensation actually paid to our NEOs is comprised of equity awards, the value of which is driven by our stock price. Compensation Actually Paid and Net Loss. As demonstrated by the following graph, the amount of compensation actually paid to our NEOs increased despite a decrease in our net income. This is a result of an increase in our stock price during fiscal 2023, which increased the compensation actually paid to our NEOs, despite a decrease in our net income.